Last checked at 27 Jun 2008 07:00
27 June 2008
Metals Exploration plc
Half Yearly Report
The directors of Metals Exploration plc ("Metals Ex" or "the Company") (AIM: MTL), the UK based precious and base metals exploration company with a focus on the Pacific Rim region, are pleased to announce the Company's unaudited interim results for the six months ended 31 March 2008.
Highlights:
In October 2007 the Company completed an infill drilling programme on the Runruno deposit. 41 holes were drilled for a total of over 5,800m and samples sent for assay. At this time the Company had nearly 2,500 individual samples waiting to be returned from laboratories, the results of which provided the key input to our subsequent resource update.
In early November 2007 the Company saw the completion of a resource update and technical review at Runruno, providing a JORC-compliant resource of 2.05M oz gold and 39.5Mlbs molybdenum. For the first time, part of the resource, comprising 409,000 oz gold and 10Mlbs molybdenum, was classified in the Indicated category. This was an important reflection of the Company's growing understanding of the deposit.
The management of the Company was strengthened by the appointment of Mr. Ian Holzberger as Project Director in January 2008. Ian has more than 35 years' experience in the base and precious metals mining industry, and is responsible for implementing the detailed Scoping Study into the technical and economic aspects of Runruno, set to report at the end of the summer 2008.
In February 2008 the Company was pleased to host a visit by Dr. Eric Jensen PhD, a recognised expert on the types of mineralisation found at Runruno, to the site where he undertook an investigation of the surrounding rock types. He also explored a possible similarity between Runruno and the Cripple Creek mine in Colorado, with very positive conclusions highlighting additional potential outside the current resource area.
In March 2008 a further resource update at Runruno increased the Indicated resources by 90 per cent., from 409,000oz gold to 775,000oz gold. The total contained gold increased slightly to 2.059 Moz but more significantly the gold grade increased from 2.27g/t to 2.41g/t. This increased resource and gold grade combined with the further understanding of the geological setting are important steps towards de-risking the project.
Two alternative processing circuits for the gold were identified in early April 2008, and encouraging recoveries from metallurgical testing were also released. Testwork undertaken in Australia and South Africa indicated that gold recoveries could average 88 to 92 per cent. from either POX or BIOX® circuits. Additionally, the high solubility of molybdenum indicated a route to recovery. Implications for capital and operating costs continue to be studied within the Scoping Study.
The results of the Concept Study, which is Stage 1 of the Scoping Study, were published in mid-April 2008, targeting production of between 190,000oz and 210,000oz gold per year, with up to 2.1Mlb of molybdenum by-product. The study showed that the project was robust on a 'gold only' basis with cash costs of $350-400/oz gold produced. With the molybdenum credits applied, the cost per ounce fell markedly to $190-320/oz. Additionally, the engineering firm Ausenco was appointed to assist with the Scoping Study and a site visit took place in early April.
In May 2008 the Company successfully raised £4.04 million through the placing of 20.2 million shares at 20p per share to fund the further development of the Runruno project.
Two Exploration Permits have been granted to the Company over highly prospective areas close to Runruno in June 2008. The Dupax project contains a partially mined zinc-copper-gold deposit covering an area of more than 8,800 hectares, while the Sulong prospect covers nearly 7,000 hectares and is thought to be prospective for gold.
Commenting on the results, Jonathan Beardsworth, CEO of Metals Ex, said:
"We are encouraged by the significant progress made at Runruno. Infill drilling has continued and we anticipate being able to release further resource updates in the coming months. We also await the results of the detailed Scoping Study which has been designed to be in sufficient detail to allow the Board to decide on a commitment to a full Bankable Feasibility Study. We continue to focus on environmental issues and on maintaining our excellent community relations through continued investment in the Runruno Livelihood Foundation."
Jonathan Beardsworth
Chief Executive Officer
Enquiries:
| Metals Exploration | +44 (0)20 7927 6690 |
| Jonathan Beardsworth, CEO | +44 (0)7747 101 552 |
| Hanson Westhouse Limited | +44 (0)113 246 2610 |
| Tim Feather / Matthew Johnson | |
| Pelham PR | |
| Charles Vivian | +44 (0)20 7743 6672 |
| Klara Kaczmarek | +44 (0)20 3159 4395 |
Consolidated interim income statement
| 6 months to 31 March 2008 | 6 months to 31 March 2007 | Year to 30 September 2007 | |
| £ | £ | £ | |
| (unaudited) | (unaudited) | (audited and restated) | |
| Revenue | - | - | - |
| Administrative costs | (481,191) | (664,038) | (2,691,329) |
| Analysed as follows: | |||
| Foreign exchange gains/(losses) | 1,257,709 | (1,318) | (53,855) |
| Other administrative costs | (1,738,900) | (662,720) | (2,637,474) |
| ------------------- | ------------------- | ------------------- | |
| Total administrative costs as above | (481,191) | (664,038) | (2,691,329) |
| ------------------- | ------------------- | ------------------- | |
| Operating loss | (481,191) | (664,038) | (2,691,329) |
| Finance income | 52,622 | 71,943 | 178,898 |
| Finance costs | (95,147) | (1,028) | (33,260) |
| -------------------- | ------------------- | -------------------- | |
| Net finance cost | (42,525) | 70,915 | 145,638 |
| -------------------- | ------------------- | -------------------- | |
| Loss before tax | (523,716) | (593,123) | (2,545,691) |
| Income tax | - | - | - |
| -------------------- | -------------------- | -------------------- | |
| Loss for the period | (523,716) | (593,123) | (2,545,691) |
| ================ | ================ | ================ | |
| Attributable to: | |||
| Equity holders of the parent | (618,833) | (482,371) | (2,540,325) |
| Minority interest | 95,117 | (110,752) | (5,366) |
| --------------------- | ------------------- | ------------------- | |
| (523,716) | (593,123) | (2,545,691) | |
| ================= | ================= | ================ | |
| Earnings per share: | |||
| Basic and diluted | (0.68p) | (0.66p) | (3.26p) |
| ================ | ================ | =============== |
Consolidated interim balance sheet
| 31 March 2008 | 31 March 2007 | 30 September 2007 | ||||||
| £ | £ | £ | ||||||
| (unaudited) | (unaudited) | (audited and restated) | ||||||
| ASSETS | ||||||||
| Non-current assets | ||||||||
| Property, plant and equipment | 409,441 | 114,534 | 189,172 | |||||
| Goodwill | 1,432,152 | 712,641 | 1,415,207 | |||||
| Other intangible assets | 7,373,472 | 1,932,968 | 5,395,098 | |||||
| Investments designated at fair value through profit and loss | 224,891 | - | 281,114 | |||||
| --------------------- | --------------------- | ---------------------- | ||||||
| 9,439,956 | 2,760,143 | 7,280,591 | ||||||
| --------------------- | --------------------- | ---------------------- | ||||||
| Current assets | ||||||||
| Trade and other receivables | 321,132 | 193,873 | 506,075 | |||||
| Cash and cash equivalents | 1,500,644 | 4,077,432 | 3,934,510 | |||||
| --------------------- | --------------------- | --------------------- | ||||||
| 1,821,776 | 4,271,305 | 4,440,585 | ||||||
| --------------------- | --------------------- | --------------------- | ||||||
| Total assets | 11,261,732 | 7,031,448 | 11,721,176 | |||||
| ================= | ================= | ================== | ||||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Trade and other payables | (397,500) | (400,986) | (465,606) | |||||
| --------------------- | ---------------------- | ---------------------- | ||||||
| (397,500) | (400,986) | (465,606) | ||||||
| --------------------- | ---------------------- | ---------------------- | ||||||
| Non-current liabilities | ||||||||
| Long-term borrowings | (2,000,000) | - | (2,030,082) | |||||
| ----------------------- | -------------------- | ----------------------- | ||||||
| Total non-current liabilities | (2,000,000) | - | (2,030,082) | |||||
| ----------------------- | --------------------- | ----------------------- | ||||||
| Total liabilities | (2,397,500) | (400,986) | (2,495,688) | |||||
| ------------------------ | --------------------- | ----------------------- | ||||||
| Net assets | 8,864,232 | 6,630,462 | 9,225,488 | |||||
| =================== | ==================== | =================== | ||||||
| EQUITY | ||||||||
| Equity attributable to equity holders of the parent | ||||||||
| Share capital | 917,738 | 776,856 | 913,738 | |||||
| Share options reserve | 1,971,719 | 1,417,497 | 1,737,575 | |||||
| Share premium account | 11,886,563 | 7,346,423 | 11,851,563 | |||||
| Profit and loss account | (5,890,170) | (3,324,135) | (5,271,337) | |||||
| Translation reserve | (125,948) | (1,189) | (9,900) | |||||
| ----------------------- | --------------------- | ----------------------- | ||||||
| Equity attributable to shareholders | 8,759,901 | 6,215,452 | 9,221,639 | |||||
| Minority Interest | 104,332 | 415,010 | 3,849 | |||||
| ----------------------- | ---------------------- | ----------------------- | ||||||
| Total equity | 8,864,232 | 6,630,462 | 9,225,488 | |||||
| =================== | =================== | =================== | ||||||
Consolidated interim statement of recognised income and expense
| 6 months to 31 March 2008 | 6 months to 31 March 2007 | Year to 30 September 2007 | |
| £ | £ | £ | |
| (unaudited) | (unaudited) | (audited and restated) | |
| Exchange differences on translation of foreign operations | (116,048) | (1,189) | (9,900) |
| --------------------- | -------------------- | --------------------- | |
| Net expense recognised directly in equity | (116,048) | (1,189) | (9,900) |
| Loss for the period | (523,716) | (593,123) | (2,545,691) |
| ---------------------- | -------------------- | --------------------- | |
| Total recognised income and expense for the period | (639,764) | (594,312) | (2,555,591) |
| ================== | ================== | ================== | |
| Attributable to: | |||
| Equity holders of the parent | (734,881) | (483,560) | (2,550,225) |
| Minority interest | 95,117 | (110,752) | (5,366) |
| --------------------- | -------------------- | --------------------- | |
| (639,764) | (594,312) | (2,555,591) | |
| =================== | =================== | =================== |
Consolidated interim cash flow statement
| 6 months to 31 March 2008 | 6 months to 31 March 2007 | Year to 30 September 2007 | |
| £ | £ | £ | |
| (unaudited) | (unaudited) | (audited and restated) | |
| Cash flows from operating activities | |||
| Loss after taxation | (523,716) | (593,123) | (2,545,691) |
| Adjustments for: | |||
| Depreciation and impairment | 109,609 | 16,569 | 294,349 |
| Share based payment expense | 257,143 | - | 282,128 |
| Net interest payable/(receivable) | 42,525 | (70,915) | (145,638) |
| Decrease in receivables | (11,256) | (86,097) | (398,299) |
| (Decrease)/increase in payables | (134,058) | 277,184 | 294,459 |
| Minority interest | - | - | - |
| Foreign exchange | (1,180,583) | (1,188) | (20,918) |
| --------------------- | --------------------- | --------------------- | |
| Cash used in operations | (1,440,336) | (457,570) | (2,239,610) |
| Interest received | 52,622 | - | 178,898 |
| Interest paid | (125,229) | 70,915 | (3,178) |
| --------------------- | ------------------- | --------------------- | |
| Net cash used in operating activities | (1,512,943) | (386,655) | (2,063,890) |
| --------------------- | ------------------- | --------------------- | |
| Cash flows from investing activities | |||
| Payment to acquire shares in quoted company | - | - | (532,159) |
| Purchase of intangible assets | (670,629) | (620,973) | (1,299,130) |
| Payment to acquire 15% of FCF | - | - | (3,817,114) |
| Purchase of property, plant and equipment | (266,295) | (49,193) | (167,420) |
| --------------------- | ------------------- | --------------------- | |
| Net cash used in investing activities | (936,924) | (670,166) | (5,815,823) |
| --------------------- | ------------------- | --------------------- | |
| Cash flows from financing activities | |||
| Proceeds from issue of share capital | 16,000 | 4,762,752 | 9,442,723 |
| Proceeds from long-term borrowings | - | - | 2,000,000 |
| Payment of long-term borrowings | - | ||
| --------------------- | ------------------- | --------------------- | |
| Net cash from financing activities | 16,000 | 4,762,752 | 11,442,723 |
| --------------------- | --------------------- | --------------------- | |
| Net increase/(decrease) in cash and cash equivalents | (2,433,867) | 3,705,931 | 3,563,010 |
| Cash and cash equivalents at beginning of period | 3,934,511 | 371,501 | 371,501 |
| --------------------- | --------------------- | --------------------- | |
| Cash and cash equivalents at end of period | 1,500,644 | 4,077,432 | 3,934,511 |
| ================== | ================== | ================= |
Basis of preparation
These consolidated interim financial statements are for the six months ended 31 March 2008. They have been prepared in accordance with the requirements of IFRS 1 "First-time Adoption of International Financial Reporting Standards" relevant to interim reports, because they are part of the period covered by the Group's first IFRS financial statements for the year ended 30 September 2008. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2007.
Please see the Company's website for the full interim results.