RMM.L Regulatory News (RMM)

24 Oct 2005 14:14

Rambler Metals & Mining PLC24 October 2005 RAMBLER METALS AND MINING PLC PRELIMINARY RESULTS FOR THE PERIOD ENDED 31 AUGUST 2005 I am very pleased to be able to write this inaugural Chairman's overview ofRambler Metals and Mining PLC ("Rambler" or the "Company") for the period ended31 August 2005. The Company, which quoted its shares on London's AIM market inApril 2005, was founded in 2004 to explore and develop base metals projectslocated principally in countries and regions that have mining traditions and lowpolitical risk. The Company's strategy is guided by it's view that over themedium term the resource industry will retreat to countries that can provide thestability required to deliver appropriate long term returns in a cyclicalindustry. The Company's Directors have a range of experience in the natural resource andmining sector that includes exploration, mining and marketing, as well asexperience in the legal and corporate finance areas. The Company was fortunate to include in its founding Altius Minerals Corporation("Altius"), a Newfoundland and Labrador based mining company, which contributedto the Company's asset base with an option to acquire and develop the Ramblercopper and gold property in Newfoundland and Labrador, Canada. The Ramblerproperty had been a former copper and gold producer that ceased production whenthe deposit reached a then third-party property boundary. The neighbouringproperty was subsequently consolidated with the original mine property andacquired by Altius before being brought into the Company. The Company is encouraged by the substantial existing infrastructure and supportavailable to the Rambler project as these factors could allow mining, ifultimately warranted by results, to begin more quickly and cost-effectively thancompeting projects that are less favourably located. Existing undergroundinfrastructure includes a shaft and a decline, power and roads are in place anda port is nearby. Adjacent towns, including Baie Verte, have a long history andculture of mining and available workforces. Community and provincial governmentbased responses to the initiatives of the Company to date have been positive andsupportive. Operational Between the years of 2001 and 2004, several deep drilling programs designed byAltius probed the deposit with encouraging results. In spring of 2005, followingthe quotation of Rambler, the Company commenced a 28,000 meter drill program tofollow up on these results and other exploration targets. We have now completed the drilling of the first 10,500 meters of this programand we are pleased to report that to date the drill program is on budget andahead of schedule. To date the drill holes have attempted to delineate thepotential broader scope of the mineralizing system as per the recommendations inthe Competent Person's Report that was prepared in advance of the Company'slisting. Much of the remainder of the first phase drilling program will focuson more detailed drilling of the projected main mineralization trend, includingboth the Ming massive sulphide deposit (gold and copper) and the Ming Footwalldeposit (copper). Only two of the holes completed during this phase have been drilled within theprojected mineralization trend and both have encountered thick intersections ofcopper mineralization from the Footwall Zone including highlight intersectionsof 40 feet at 1.92 per cent copper and 0.19 grams per tonne gold from hole 8 and23 feet at 1.62 per cent copper and 0.17 grams of gold per tonne from hole 9).These results are comparable with mineralization encountered in two shallowertests of this trend (holes 3 and 4) last year and described in the Company's AIMAdmission Document dated 31 March 2005. One of these holes also encountered five separate intervals of massive sulphidemineralization along the Ming massive sulphide deposit. The presence of fivezones of massive sulphide mineralization was unexpected based upon historicalresults as was the much higher than usual gold grades associated with some ofthe mineralization. A best interval of 19.5 feet at 1.70 percent copper and 7.3grams per tonne gold was returned from hole 8. Ongoing geophysical surveys anddrilling should allow effective testing of the potential of this gold-richmineralization as part of the remaining stage 1 drilling program. In view of the regional scoping part of the phase 1 drilling program havingadvanced ahead of schedule, the Company has accordingly advanced its decisionmaking timeline with respect to undertaking the more detailed stages ofdelineation of the project's copper and gold mineralization. It is presentlyevaluating the options of surface based directional drilling and / or dewateringthe old mine to facilitate underground drilling. Both options should facilitatequicker evaluation of the mineralization by limiting the amount of cover rockthat is required to be drilled per test. Financial The consolidated net loss after taxation of the Company in respect of the periodended 31 August 2005 amounted to £31,313 (a loss per share of 0.2p). The Company's only source of income during the period was bank deposit interest,which amounted to £103,743. The net assets of the Company amounted to £7,823,628 as at the period end whichincludes intangible assets amounting to £1,096,817. Intangible assets consistsof accumulated deferred exploration expenditures in the Company's copper goldRambler property. The Company's policy is to capitalize these costs pendingdetermination of the feasibility of the project. In April 2005, in conjunction with the Company's quotation on the AIM market inLondon, the Company completed a private placement of shares with institutionaland other investors to raise £8 million before expenses. During the year it has become increasingly obvious that, in a climate of risingmetal prices, the mining industry as a whole has found itself facing shortagesof equipment and trained personnel, which it will have difficulty overcoming inthe short term. On a personal note I would like to give my thanks for the hardwork of the Altius exploration staff and the officers and directors of theCompany who have tackled many of these problems over the past year with a largemeasure of success. D H W DOBSONCHAIRMAN PRELIMINARY STATEMENT This preliminary statement was approved by the Board of Directors on 21 October2005 and has been agreed by the auditors. It does not constitute statutoryaccounts within the meaning of section 240 of the Companies Act 1985. Thestatutory accounts will be sent to shareholders shortly and will be filedfollowing the Company's Annual General Meeting. The Auditors have reported onthese accounts; their report is unqualified and does not contain statementsunder section 237(2) or (3) of the Companies Act 1985. GROUP PROFIT AND LOSS ACCOUNT PERIOD FROM 14 APRIL 2004 TO 31 AUGUST 2005 Period from 14 Apr 04 to 31 Aug 05 £ GROUP TURNOVER - Administrative expenses 135,056 ------------------------------------OPERATING LOSS (135,056) Interest receivable 103,743 ------------------------------------LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (31,313) Tax on loss on ordinary activities - -------------------------------RETAINED LOSS FOR THE FINANCIAL PERIOD (31,313) =============================== Earnings per share (pence) - basic and diluted (Note 3) (0.2) ==================== All of the activities of the group are classed as continuing. GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES PERIOD FROM 14 APRIL 2004 TO 31 AUGUST 2005 Period from 14 Apr 04 to 31 Aug 05 £Loss for the financial period (31,313)Foreign exchange gains and losses 170,026 ------------------------------------Total recognised gains and losses for the financial period 138,713 ==================================== GROUP BALANCE SHEET 31 AUGUST 2005 31 Aug 05 £ £ FIXED ASSETSIntangible assets 1,096,817 CURRENT ASSETSDebtors 152,251Investments 6,865,272Cash at bank 40,648 ---------------------------------------------- 7,058,171CREDITORS: Amounts falling due within one 331,350year ----------------------------------------------NET CURRENT ASSETS 6,726,821 ----------------TOTAL ASSETS LESS CURRENT LIABILITIES 7,823,638 ================ CAPITAL AND RESERVESCalled-up share capital 400,300Share premium account 7,164,625Other reserves 120,000Profit and loss account 138,713 ----------------EQUITY SHAREHOLDERS' FUNDS 7,823,638 ================ GROUP CASH FLOW STATEMENTPERIOD FROM 14 APRIL 2004 TO 31 AUGUST 2005 Period from 14 Apr 04 to 31 Aug 05 £ £ NET CASH OUTFLOW FROM OPERATING ACTIVITIES (159,302) RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 73,094 -------------NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 73,094 CAPITAL EXPENDITUREPayments to acquire intangible fixed assets (557,758) -------------NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (557,758) ACQUISITIONSPurchase of 51190 Newfoundland and Labrador Inc (65,065) -------------NET CASH OUTFLOW FROM ACQUISITIONS (65,065) -------------CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (709,031) MANAGEMENT OF LIQUID RESOURCESCash placed in other liquid investments (6,865,272) -------------NET CASH OUTFLOW FROM MANAGEMENT OF LIQUID RESOURCES (6,865,272) FINANCINGIssue of equity share capital 7,444,925 -------------NET CASH INFLOW FROM FINANCING 7,444,925 -------------NET CASH OUTFLOW IN PERIOD (Notes 4 and 5) (129,378) ============= RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROMOPERATING ACTIVITIES Period from 14 Apr 04 to 31 Aug 05 £ Operating loss (135,056)Increase in debtors (121,602)Increase in creditors 97,356 ------------------------------------Net cash outflow from operating activities (159,302) ==================================== 1. Nature of operations and going concern The Company is in an early stage of development, and while it currentlyhas significant cash resources, it does not generate any significant revenuesand its success will depend largely upon the outcome of its exploration andevaluation programmes. In April 2005, the Company completed a public placing of its shares andwas admitted to trade on AIM. The placing raised £8,000,000, before expenses,through the issue of 16,000,000 ordinary shares at 50p per share. The Directorscurrently believe that the Company has sufficient finance to fund the plannedexploration project and its general overheads to the end of 2006. The Companymay require, in due course, additional finance for its operations. 2. ACCOUNTING POLICIES (a) Basis of accounting The financial statements have been prepared under the historical costconvention, and in accordance with applicable accounting standards. (b) Basis of consolidation and accounting for goodwill The Group accounts consolidate the accounts of Rambler Metals and MiningPLC and all its subsidiary undertakings. The acquisition method of accounting is adopted where relevantconditions are fulfilled. The purchase consideration is allocated to the assetsand liabilities on the basis of fair value at the date of acquisition. Goodwillarising on consolidation is capitalised and shown within fixed assets.Amortisation of goodwill arising from the acquisitions is deferred untilproduction occurs, when it will be charged over the expected production periodof the project. Where a project is abandoned or is determined to not beeconomically viable, the goodwill is written off. The acquisition by the Company of Rambler Mines Limited in February 2005was accounted for in accordance with the principles of merger accounting set outin FRS 6 on "Acquisitions and Mergers". Accordingly, the consolidated financialstatements include the results of the Company since incorporation on 14 April2004 and are presented as if Rambler Mines Limited had been controlled by theCompany throughout the period from its incorporation. (c) Deferred exploration and evaluation costs These comprise costs directly incurred in exploration and evaluation as well asthe cost of mineral licences. They are capitalised as intangible assets pendingdetermination of the feasibility of the project. When the existence ofeconomically recoverable reserves is established the related intangible assetsare transferred to tangible fixed assets and the exploration and evaluationcosts are amortised on a depletion percentage basis. Where a project isabandoned or is determined to not be economically viable, the related costs arewritten off. The recoverability of deferred exploration and evaluation costs isdependent upon a number of factors common to the natural resource sector. Theseinclude the extent to which the Company can establish economically recoverablereserves on its properties, the ability of the Company to obtain necessaryfinancing to complete the development of such reserves and future profitableproduction or proceeds from the disposition thereof. 3. EARNINGS PER SHARE Period from 14 Apr 04 to 31 Aug 05 penceEarnings per ordinary share (0.2) ============= ======= Earnings per share have been calculated on the net basis of loss onordinary activities after taxation of £31,313 on 13,579,000 shares being theweighted average of shares in issue. There were no dilutive potential ordinaryshares outstanding at the end of the period. 4. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 31 Aug 05 £ £Decrease in cash in the period (129,378) Cash used to increase liquid resources 6,865,272 ----------- 6,735,894 -----------Change in net funds 6,735,894Effect of foreign exchange rate 170,026differencesNet funds at 14 April 2004 - -----------Net funds at 31 August 2005 6,905,920 =========== 5. ANALYSIS OF CHANGES IN NET FUNDS At Cash Exchange At 14 April flows translation 31 Aug 2004 2005 £ £ £ £ Net cash: Cash in hand - (129,378) 170,026 40,648 and at bank ---------- ---------- ---------- ---------- Liquid resources: Current - 6,865,272 - 6,865,272 asset investments ---------- ---------- ---------- ---------- Net funds - 6,735,894 170,026 6,905,920 ========== ========== ========== =========== Current asset investments are money market deposits. This information is provided by RNS The company news service from the London Stock Exchange