ORM.L Regulatory News (ORM)

26 Sep 2005 07:01

Ormonde Mining PLC26 September 2005 26 September 2005 Ormonde Mining plc Interim Results for the Six Months Ended 30 June 2005 DUBLIN & LONDON: 26 September 2005 - Ormonde Mining plc ("Ormonde" or "theCompany"), the Spain-focused gold exploration and development company, ispleased to announce its interim, unaudited results for the six months ended 30June 2005. HIGHLIGHTS • Admission to AIM and associated capital raising of £3.0 million provides the Company with financial platform to complement its technical strengths • Progress at La Zarza, lead project: results from initial drilling programme in line with expected widths and grades of mineralization; metallurgical testwork in progress; Phase 2 infill drilling underway • Activities advancing on portfolio of other mineral evaluation and exploration projects • Reported loss of €201,224 reflects continuing success in keeping overheads down and investment 'in the ground' Mike Donoghue, Chairman of Ormonde commented: "During this reporting period Ormonde has refinanced its activities and advancedits projects significantly. The combination of a solid project portfolio withincreased exposure to broader equity markets in a bullish commodity cycle, meansthat Ormonde is well positioned for growth." Enquiries to: Kerr Anderson, Managing Director,Ormonde Mining plc Tel: +353 (0)46 9073623 Fraser Gardiner, Director,Ormonde Mining plc Mobile: +353 (0)86 3931178 Simon Rothschild,Bankside Consultants Tel: +44 (0)20 7367 8871 Mobile: +44 (0)7703 167065 CHAIRMAN'S STATEMENT CORPORATE DEVELOPMENTS This Interim Report represents the first opportunity for your Board to formallyreport on its activities since Ormonde began trading on London's AlternativeInvestment Market (AIM) earlier this year. The Company was admitted to AIM inApril with an associated capital raising of £3.0 million (€4.3 million).Placees included both existing and new institutional investors, and the Placingwas heavily oversubscribed. Trading on AIM, together with our quotation on thenew Irish Enterprise Exchange (IEX), affords us increased investor visibilityand greater access to capital markets, in an appropriately regulated marketenvironment. We were also very pleased at this time to appoint Seymour Pierce as joint brokerwith Davy, thereby reinforcing Ormonde's position in the UK markets. Ofparticular note, both brokerages have well-respected, in-house, dedicatedresource research personnel and sales teams familiar with dealing in our sector.Davy also acts as Nominated Adviser and IEX Adviser. These corporate developments have therefore been critical moves in providingOrmonde with a platform for growth. OPERATIONAL REVIEW On operational matters, April's Placing has allowed Ormonde to pursue progresson all fronts. Foremost was the drilling programme at our lead project, LaZarza, where we are evaluating gold and copper resources estimated by aNormandy-BRGM JV in the 1990s to contain 950,000 ounces of gold, 9.5 millionounces of silver and 81,000 tonnes of copper. Results from the programme, designed primarily to obtain samples formetallurgical testwork, support our confidence in the project by confirming theexpected widths and grades of mineralization, including intersections of 10metres at 6.0 g/t gold and 15 metres at 5.8 g/t gold in hole ORM7, and 20.4metres at 6.5 g/t gold in ORM11. Our Phase 2 infill drilling programme,currently in progress, will provide more representative information ondistribution of metal grades across the deposit. The metallurgical testwork itself is now underway. In this programme,representative samples from drilling core are composited and put through varioustests to indicate the most appropriate method for the extraction of the economicminerals. The results of this testwork will then provide the basis of aneconomic scoping study, which will investigate the approximate economics andviability of various development options for a mining operation at La Zarza.The integration of extensive underground workings, previously developed forpyrite mining at La Zarza, into a new mining operation will also be consideredas an important factor in the study. In the meantime, Phase 2 drilling is continuing at La Zarza. Ormonde'sobjective is to upgrade at least part of the Normandy-BRGM resource to JORC "Indicated" category, and as previous drilling is widely spaced, more detaileddrilling is required. This drilling is currently focused on the upper portionof the deposit, which is accessed by existing underground infrastructure. In addition to La Zarza, work continued on our other mineral evaluation andexploration projects. In January, we completed the second part of oursignificant ground acquisition in Salamanca, where an extensive soilgeochemistry campaign, detailed mapping exercise and prospecting programme arecurrently in progress. These activities will lead to generation of initialdrilling targets, and we would anticipate testing these in Q1 2006. We have continued to explore the potential depth extension to Salamon, and atTracia our exploratory drilling campaign confirmed the depth extension ofsurface gold mineralization, whilst ongoing soil geochemistry has expanded theextent of known anomalous zones and is providing more detailed information onspecific drilling targets. As activities must be scheduled so as to keepcompany resources focused, programmes at Trives, where further drilling iswarranted following encouraging results from a preliminary campaign, willcontinue in 2006. In completing this brief operational review, I should note that we continue toevaluate new value opportunities in Spain, and we have recently signed an optionagreement to acquire a 50 per cent interest in the Valina Siver-Gold Projectfrom Polar Mining Oy, a Finnish subsidiary of ASX-listed Dragon Mining NL.Valina is a near-surface, potentially open-pittable, high-gradesilver-gold-antimony deposit, tested to-date by only six drill holes. Ormondeintends to drill three short holes on the prospect to obtain samples formetallurgical testwork, and if a saleable concentrate can be produced from thismineralization, we will proceed with a full evaluation of the deposit. MARKET TRENDS In the broader market, the metals and mining industry appears to be gatheringmomentum again after a somewhat quiet summer. Gold and copper, the metals ofimmediate interest to us, are presently trading at highs, the former recentlyreaching a 17-year high, with some analysts believing that it could be lookingtowards the US$500 level, whilst copper is now trading in the US$3,700-3,800 pertonne range. This favourable situation is supported by the growing belief thatthis upward readjustment in metal prices may be sustained in the longer term,albeit with periodic corrections, with market commentators forecasting a longerterm commodity super-cycle driven by the emergence of the larger Asianeconomies. This bullish outlook for metal prices benefits Ormonde not only by creatingfavourable sentiment in the junior resource market generally, but also,importantly, in real terms as we take further steps closer to building a goldmining business in Spain. SUMMARY In summary, I would note that during this reporting period Ormonde hasrefinanced its activities and advanced its projects significantly. Our reportedloss of €201,224 reflects our continued endeavours to keep overheads to aminimum and put as much investment as we can "into the ground". Finally, Ibelieve that the combination of a solid project portfolio with increasedexposure to broader equity markets in a bullish commodity cycle, means thatOrmonde is well positioned for growth. Michael J. DonoghueChairman23 September 2005 Consolidated Profit & Loss Account6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June, 2005 30 June, 2004 31 December, 2004 €000's €000's €000's Unaudited Unaudited Audited Administrative expenses (210) (109) (401)Operating income - - 19OPERATING LOSS (210) (109) (382)Interest receivable 9 1 6LOSS ON ORDINARY ACTIVITIESBEFORE TAXATION (201) (108) (376)Tax on (loss) on ordinary activities - - -LOSS ON ORDINARY ACTIVITIESAFTER TAXATION (201) (108) (376)Minority Interest - - 1Retained (loss) for year (201) (108) (375)Loss per Share (€0.0015) (€0.0010) (€0.0033) Consolidated Statement of Total Recognised Gains and Losses6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June, 2005 30 June, 2004 31 December, 2004 €000's €000's €000's Unaudited Unaudited Audited (Loss) for the financial year (201) (108) (375)Currency translation differences onforeign currency net investments - 1 3Total recognized gains and losses (201) (107) (372) Consolidated Balance Sheet6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June, 2005 30 June, 2004 31 December, 2004 €000's €000's €000's Unaudited Unaudited Audited FIXED ASSETSTangible assets 14 14 20Goodwill 112 - 112Intangible assets 2,853 1,064 1,795 2,979 1,084 1,927 CURRENT ASSETSDebtors 32 18 66Cash at bank and on hand 3,257 1,057 444 3,289 1,075 510CREDITORS: (amounts falling duewithin one year) (120) (97) (100)NET CURRENT ASSETS 3,169 978 410 TOTAL ASSETS LESS CURRENT LIABILITIES 6,148 2,062 2,337 CREDITORS: (amounts falling dueafter more than one year) (3) (15) (9)NET ASSETS 6,145 2,047 2,328 CAPITAL AND RESERVESCalled-up share capital 5,474 4,622 4,636Share premium account 10,383 6,668 6,717Capital conversion reserve fund 29 29 29Shares to be issued forconsideration - - 486Capital reserve 7 7 7Foreign currency reserves 3 3 3Profit and loss account (9,753) (9,284) (9,552)SHAREHOLDERS' FUNDS 6,143 2,045 2,326 Minority interest 2 2 2 6,145 2,047 2,328 Consolidated Cash Flow Statement6 months ended 30 June 2005 6 months ended 6 months ended 12 months ended 30 June, 2005 30 June, 2004 31 December, 2004 €000's €000's €000's Unaudited Unaudited Audited NET CASH OUTFLOW FROM OPERATING ACTIVITIES (195) (88) (329) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 8 2 6 Interest element of finance leases (1) (1) (2) NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 7 1 4 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Expenditure on intangible assets (1,011) (160) (587) Payments to acquire tangible assets (2) - (3) NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (1,013) (160) (590) NET CASH OUTFLOW BEFORE FINANCING (1,201) (247) (915) FINANCING Issue of shares net of expenses 4,018 832 895 Capital element of finance leases (4) (5) (10) NET CASH INFLOW FROM FINANCING 4,014 827 885 (DECREASE)/INCREASE IN CASH 2,813 580 (30) 1. This interim statement for the 6 months ended 30 June 2005 isunaudited and was approved by the Directors on 23 September 2005. The financialinformation contained in these statements does not constitute statutory accountswithin the meaning of section 240 of the Companies Act 1985. The financialinformation for the year ended 31 December 2004 has been extracted from thestatutory accounts for that year, which have been filed with the Registrar ofCompanies and on which the auditors issued an unqualified report. 2. The loss per share was calculated from the loss for the periodattributable to ordinary shareholders of €201,224 (June 2004 = €107,457) dividedby the time-weighted average number of shares in issue during the period of133,687,956 (June 2004 = 108,790,601). There is no dilutive effect of shareoptions on the basic loss per share. 3. No dividends were paid or proposed in respect of the six monthsended 30 June 2005. 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