ORM.L Regulatory News (ORM)

7 Mar 2005 07:30

Ormonde Mining PLC07 March 2005 ORMONDE MINING PLC ("Ormonde" or "the Company") Results for the YEAR Ended 31 DECEMBER 2004 CHAIRMAN'S STATEMENT 2004 was a most productive and rewarding year for Ormonde in which considerableadvances were made in both our project acquisition and exploration activities inSpain. These activities culminated in the acquisition of two major advancedprojects, the La Zarza Gold-Copper Project and the Salamanca Gold Project, theupgrading and reconsolidation of the Tracia Gold Project into 100% Ormondeownership, and the completion of drilling programmes on the Salamon and Trivesgold projects. In June 2004, Ormonde acquired the right to earn a seventy percent interest inthe La Zarza Gold-Copper Project in southwest Spain. This acquisition representsa major step in the Company's development, presenting us with the opportunity ofmoving forward into the ranks of mining producers. The La Zarza Gold-CopperDeposit contains two substantial inferred mineral resources: a gold resource of5.9 million tonnes, grading 5.0 grams per tonne (g/t) gold and 50 g/t silver,and a 2.9 million tonne copper resource grading 2.8 percent copper, thecontained metal amounting to 950,000 ounces of gold, 9.5 million ounces ofsilver and 180 million pounds of copper. Moreover, there is considerablepotential to increase the size of these resources as they are largely open alongstrike and at depth; indeed, the deepest intersection of 7.0 metres at 12.1 g/tgold represents one of the best gold intersections. The key to the development of La Zarza will be the establishment of an optimalprocessing route for the treatment of both the gold/silver and the copperdeposits. A drilling programme is presently underway to obtain samples formetallurgical testwork. The results of this testwork will be incorporated into ascoping study which will determine the relative economics of the various optionsfor the development of both the copper and gold resources. Following this wepropose to carry out infill drilling to upgrade the resource figures ahead of abankable feasibility study on the project. We look forward in 2005 to makingmajor progress in advancing La Zarza towards development. The Salamanca Gold Project in western Spain is a relatively new acquisition andis, perhaps, less well known to shareholders, but we anticipate that the namesof many of our Salamanca prospects and mineral deposits will become familiar asthey are evaluated and drilled. Previous workers have reported resources onthree of these prospects: a large, low grade, one million ounce near-surfacegold resource at the Mina Marta Gold Deposit and a higher grade, 0.3 millionounce gold resource at the Mina Saturno and Valle de Los Espinos Gold Deposits.Ormonde's initial programmes will target higher grade zones within the MinaMarta deposit and extensions of the other two deposits. Our ground consolidation programme at Salamanca opens up two criticalopportunities: firstly, the possibility of establishing a viable miningoperation based on a central plant treating ore from the various deposits; andsecondly, the opportunity to explore the intervening ground between depositsalong the geological structures controlling the mineralization. Ormonde has nowscheduled an aggressive evaluation and exploration programme for Salamancaduring 2005. The results of last summer's drilling and trenching programmes on the SalamonGold Deposit in northwest Spain were encouraging. Deeper drilling below thecentral zone encountered high grade mineralization, indicating that the highergrade zones continue at depth, while surface trenching revealed a new footwallzone of mineralization below the main zone. Continued regional exploration inthe vicinity of Salamon also revealed a new area of gold mineralization, the LasSalas Prospect, located approximately one kilometre east of Salamon. We areencouraged by the discovery of these new zones of mineralization in and adjacentto the main deposit and further drilling is planned. At Trives in Galicia, we completed our first-stage drilling programme on thePortas Gold Prospect. This yielded encouraging results, with higher gradeintervals within broader areas of low grade mineralization below the surfaceworkings. Further drilling is required to better define the depth extent of thismineralization and clarify the structural controls on the localisation of thePortas gold zones. While our advanced projects represent the cornerstone in the Company's strategy,our policy of including carefully selected, earlier stage projects in ourportfolio has yielded dividends in the case of the Tracia Gold Project innorthwest Spain. Initial exploration results were particularly positive and anaggressive follow-up programme during the year culminated in drilling whichcommenced in December. The exploration results from Tracia encouraged us toexplore a much larger 2,000 square kilometre surrounding area and this hasproven most rewarding, with the identification of several new areas which lookgeologically similar to Tracia. The upgrading and enlargement of the Traciaproject area also encouraged us to buy out our joint venture partner's interestin the permit when this became available in December 2004. We believe that theTracia area holds considerable potential and we anticipate continued news flowfrom here during 2005. In order to fund our increased operational activity, Ormonde raised €940,000(before expenses) in June 2004, and it was most encouraging to see that thiscapital raising was well supported by both existing and new institutionalshareholders. In this respect, I must note that the more recent capital raisingshave been strongly supported in London and this has resulted in an increase inboth the proportion of institutional shareholders and in the proportion ofshareholders in the UK. These changes, I believe, are most positive, serving toconsiderably increase the trading liquidity in your Company's shares andfacilitating a steady growth in market capitalisation and share price to betterreflect Ormonde's assets. Significant efforts have also been expended to promoteawareness of Ormonde's progress through investor and public relations work andin September the Company retained Bankside Consultants to advise and assist inthis area. The Board is of the view that as Ormonde progresses and grows with theevaluation and development of its Spanish gold projects, on-going support fromthe UK market needs to be underpinned by Ormonde obtaining a quotation in Londonand, consequently, the Board has decided to seek admission to the London StockExchange's AIM market during 2005. Looking forward to 2005, I anticipate that it will be a very active year on theoperational side as we progress with the technical evaluation of La Zarza,commence the evaluation of the Salamanca resources, step-up our explorationactivities on the Tracia prospects and carry out an additional round of drillingat both Salamon and Portas. We continue to be active in the area of projectacquisition, although as we grow we are increasingly cognizant of the need toensure that these efforts are compatible with other corporate objectives. Weremain very satisfied with our focus on Spain, where the opportunities areconsiderable, the regional and local authorities very supportive and the riskprofile is low. I believe we have taken critical steps in 2004 towards our objective of becominga mid-sized European gold producer, and in 2005 we can look forward to increasedoperational activity as we seek to fast-track the evaluation of our keyprojects. Our Profit and Loss Account shows a loss of €376,140 for 2004 (2003: €449,383,which included the write-off of investments in projects in Tanzania). Managementcontinues to ensure that most of the funds raised are expended on fieldactivities and project development. The support of all shareholders, staff and advisers in pursuing our objectivesis most appreciated. Michael J. Donoghue Chairman ONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2004 12 months ended 12 months ended 31 December 31 December 2004 2003 euro euro Administrative expenses (401,370) (131,585) Operating income 19,450 26,423 Impairment of intangible fixed assets - (345,763) (381,920) (450,925) OPERATING (LOSS) Interest receivable 5,780 1,542 (LOSS) ON ORDINARY ACTIVITIES (449,383) BEFORE TAXATION (376,140) Tax on (loss) on ordinary activities - - (LOSS) ON ORDINARY ACTIVITIES (376,140) (449,383) AFTER TAXATION Minority Interest 694 - Retained (loss) for year (375,446) (449,383) Profit and loss account brought forward (9,176,050) (8,726,667) Profit and loss account carried forward (9,551,496) (9,176,050) (Loss) per share (euro0.0033) (euro0.0052) (Loss) per share - diluted (euro0.0033) (euro0.0052) CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2004 12 months ended 12 months ended 31 December 31 December 2004 2003 euro euro FIXED ASSETS Tangible assets 19,667 27,214 Goodwill 111,898 - Intangible assets 1,795,376 801,919 829,133 1,926,941 CURRENT ASSETS Debtors 66,446 22,205 Cash at bank and on hand 444,398 472,919 495,124 510,844 CREDITORS : (Amounts falling due (100,560) (46,514)within one year) NET CURRENT ASSETS 410,284 448,610 TOTAL ASSETS LESS CURRENT LIABILITIES 2,337,225 1,277,743 CREDITORS : (Amounts falling due (9,355) (19,606)after one year) NET ASSETS 2,327,870 1,258,137 CAPITAL AND RESERVES Called-up share capital 4,635,712 4,370,712 Share premium account 6,717,240 6,027,300 Capital conversion reserve fund 28,928 28,928 Shares to be issued for consideration 485,913 - Capital reserve 7,247 7,247 Foreign currency reserves 2,612 - Profit and loss account (9,551,496) (9,176,050) SHAREHOLDERS' FUNDS 2,326,156 1,258,137 Minority Interest 1,714 - 2,327,870 1,258,137 Enquiries to: Mike Donoghue - Non-Executive Chairman Ormonde Mining plc Tel: 00 353 56 7728351 info@ormondemining.com John Carroll - Director Ormonde Mining plc Tel: 00 353 1 4907260 Fergal Meegan Davy Corporate Finance Limited Tel: 00 353 1 614 8817 Simon Rothschild Bankside Consultants Tel: 00 44 20 7444 4153 simon.rothschild@bankside.com 7 March 2005 ENDS This information is provided by RNS The company news service from the London Stock Exchange