ROSE.L Regulatory News (ROSE)

8 Apr 2005 07:00

Vane Minerals PLC08 April 2005 8th April 2005 VANE Minerals Plc (AIM: VML) Financial Results for Period Ending December 2004 REPORT HIGHLIGHTS • Listed on AIM in June 2004 raising £3.283m net of expenses • At the end of the financial period, the Group had cash balances of £2.34m • All work programmes are on schedule and under budget • Commenced production on the Diablito gold-silver prospect in Mexico with full capacity production expected to be ahead of schedule during 2005 • Follow-up exploration work at prospective Guadalcazar gold prospect in Mexico significantly progressed • Drilling on Guadalcazar commenced in March 2005 • Option acquired on the Mina Charay gold-silver prospect in Mexico. First drilling results favourable • Uranium prospects identified in the North America. 7 prospects claimed to date with a further 28 under review • Gold and copper targets identified in Paraguay CHAIRMAN'S STATEMENT It gives me pleasure to have this opportunity of reviewing the principal eventsin the development of VANE Minerals since the company's successful listing onAIM in June 2004. Since that event, I am happy to report that the company's share price hasimproved strongly in a market in which mining increasingly is playing apre-eminent role. This encouraging performance continues to be underpinned bythe strength of the gold price on international markets. We remain on course with our declared strategy of generating early cash flowfrom our developing properties. While the thrust of our activities remains ourdeveloping gold-silver projects in Mexico, we have additionally made applicationin recent months for gold-copper prospects in Paraguay and also for uraniumlicences in North America. The £3.283 million (net of expenses) raised by VANE Minerals on listing in 2004is being applied to fund the detailed exploration and development of our threemain properties in Mexico: Diablito (gold-silver) in Nayarit; Guadalcazar (gold)in San Luis Potosi; and Mina Charay (gold-silver) in the State of Sinaloa. Mycolleague, Steve Van Nort, has commented further in his report on progress witheach of these prospects. Throughout the past year, the company has strived to apply the funds raised inthe IPO in an efficient and diligent manner. Consequently, VANE Minerals hasmanaged to accomplish its objectives as set out in the listing prospectus withinbudget and ahead of schedule and expects to be able to continue to fund itsvarious exploration activities from these resources, until the company becomescash generative with the development of our Diablito property. Our current cashburn rate is £143,000 per month, and this is expected to be maintained duringthe first half of 2005 until Diablito reaches full production. At the December2004 year-end, the group held £2.344 million in cash. One of the pillars of VANE Minerals' strategy has been the continuing access tothe extensive database of exploration files of the Freeport-McMoRan Copper andGold company. The exclusive agreement which we entered with this company wasrecently extended by a further year to June 2006, and we intend to use thisunique resource to identify additional exploration targets in the coming months. This has been a busy year for your company in which a number of milestones havebeen reached. VANE would like to thank its shareholders for their continuedsupport during this period of build-up towards initial mine production and cashflow generation. Your board believes that, with its exciting portfolio ofexploration and development projects, the company is placed now to grow thebusiness substantially and to create sustainable value going forward. MJ SpriggsChairman CHIEF EXECUTIVE OFFICER'S REPORT We are very pleased and encouraged by the progress that the VANE team has madesince the company listed in June of 2004. The two existing properties at thetime of the listing are on schedule and below budget as set out in the company'sprospectus and new additions to the VANE portfolio are progressing well and showpromising potential. Freeport-McMoran Exploration Files We have continued our review of the Freeport-McMoRan Copper and Gold Company's7000 plus exploration files, in accordance with our exclusive agreement, whichwas recently extended to 30 June 2006. Targets of interest have been identifiedand their evaluation is expected to be undertaken in the coming months. Diablito Project The company's Diablito project has been and continues to be a success. Thecompany's plan was to rapidly develop this property in order to give VANE a cashflow and enable the company to be a self-funding exploration company. Up-gradingof indicated resource at Diablito was accomplished through a detailed diamonddrilling programme which has been reported on in two press releases dated 29September 2004 and 25 October 2004. New resource estimates developed from thedrilling programme are tabulated below: Tons Tons Tons Grade GradeMeasured Indicated Inferred Au opt (Gold) Ag opt (Silver)23,300 11,700 65,000 0.39 42.4 Further up-grading of and expansion of the resource base is anticipated,especially down dip and to the west, with the completion of additional infilland step-out drilling. A mining plan for recovery of the Diablito resource, as outlined during theabove mentioned drilling campaign, has been formulated, a contract miningcompany selected and VANE and the MGA Contratista Minera SA de CV are now in theprocess of initiating that development plan. First production of ore is nowexpected in May 2005 with the design capacity of 50 t/d to be achieved twomonths ahead of the plan as outlined in the budget detailed in the listingprospectus. Guadalcazar Work at the company's Guadalcazar epithermal gold prospect has progressedsatisfactorily. VANE has completed a detailed geochemical survey (rock, waterand mesquite), geophysical surveys (gravity, magnetics and VLF) and geologicmapping of the limestones surrounding the Guadalcazar basin. Compilation of allthis data has identified a number of drill targets which offer the potential ofdiscovering a large hydrothermal gold deposit. Eight targets have been selectedto be drilled. The drill is scheduled to be mobilized in late February withdrilling, 22 holes budgeted, to commence immediately thereafter. Mina Charay In addition to the above accomplishments the VANE team has secured an option topurchase the Mina Charay gold-silver property located in the State of Sinaloa,Mexico. The Mina Charay project has both the potential for rapid generation ofcash flow and the discovery of a large bulk mineable deposit. First phasediamond drilling, 7 holes, has been completed along with a reconnaissance VLFsurvey, both of which indicate that one or more well-mineralized vein structuresoccur within the Mina Charay property and are open to the West, along strike anddown dip. Paraguay In Paraguay the company has applied for three large concessions in east centralParaguay totalling 3,800 sq kilometres, where at least 22 gold and/or gold/copper geochemical anomalies have been identified. Work has begun to evaluatethese anomalies through more detailed geochemical work, with drilling plannedfor the future. Uranium Work was initiated in late December 2004, on acquiring potential uraniumresources and/or prospects in North America. As of early 2005, 7 targets havebeen claimed and a further 28 prospects have been identified and are beingtargeted for acquisition. Some of the prospects are believed to containindicated resources with uranium grades of around 1% U3O8 or 20 pounds uraniumoxide per ton. At present uranium oxide prices of approximately $21.00/pound,the value of ore is over $400/ton. SD Van NortChief Executive Officer Enquiries: VANE Minerals plc Seymour Pierce Limited Parkgreen CommunicationsMatthew Idiens Sarah Wharry Justine Howarth / Cathy Malins020 7667 6322 020 7107 8000 020 7493 3713 CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the period ended 31 December 2004 Notes 15 months ended 11 months ended 31 December 2004 30 September 2003 £ £ TURNOVER - -Net operating expenses (637,663) - OPERATING LOSS (637,663) -Interest receivable 41,041 -Interest payable and similar charges (2,071) - LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (598,693) -Taxation 35,533 - LOSS ON ORDINARY ACTIVITIES AFTER TAXATION 3 (563,160) - LOSS PER SHAREBasic and diluted 2 (0.52p) - The operating loss for the period arises from the group's continuing operations. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 15 months ended 11 months ended 31 December 2004 30 September 2003 £ £ Loss for financial period (563,160) -Currency translation losses on foreign currency net (67,404) -investments Total recognised gains and losses for period (630,564) - CONSOLIDATED BALANCE SHEET31 December 2004 Notes 31 December 2004 30 September 2003 £ £FIXED ASSETSIntangible assets 11,503,882 - CURRENT ASSETSDebtors 116,093 -Cash at bank and in hand 2,344,253 2 2,460,346 2CREDITORS: Amounts falling due within one year (66,078) - NET CURRENT ASSETS 2,394,268 2 NET ASSETS 13,898,150 2 CAPITAL AND RESERVESCalled up share capital 14,614,382 2Share premium account - -Profit and loss account (716,232) - EQUITY SHAREHOLDERS' FUNDS 3 13,898,150 2 CONSOLIDATED CASH FLOW STATEMENTfor the period ended 31 December 2004 Notes 2004 2003 £ £ Cash flow from operating activities 4a (584,524) -Returns on investments and servicing of finance 4b 38,970 -Capital expenditure and financial investment 4b (381,899) -Acquisitions and disposals 4b 56,594 - CASH OUTFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING (870,859) -Management of liquid resources 4b (2,285,791) -Financing 4b 3,282,514 2 INCREASE IN CASH IN THE PERIOD 125,864 2 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2004 2003 £ £Increase in cash in the period 125,864 2Cash outflow from increase in liquid resources 2,285,791 - Change in net funds resulting from cash flows 2,411,655 2Translation difference (67,404) - Movement in net funds in the period 2,344,251 2NET FUNDS AT 1 OCTOBER 2003 2 - NET FUNDS AT 31 DECEMBER 2004 2,344,253 2 Notes to the financial statements, Period ended 31 December 2004' Note 1 BASIS OF PREPARATION The financial information for the year ended 31 December 2004 has not beenaudited and does not constitute the Company's statutory financial statementswithin the meaning of S240 of the Companies Act 1985. This preliminaryannouncement was approved by the Board on 7 April 2005. The statutory financial statements for the year ended 31 December 2004 have notbeen filed with the Registrar of Companies nor reported on by the Company'sauditors. They will be circulated to shareholders in April 2005 and the AnnualGeneral Meeting is arranged to take place on 12 May 2005. The comparative results for the year ended 31 December 2003 are an abridgedversion of the audited financial statements which have been filed with the UKRegistrar of Companies and on which the auditors issued an unqualified auditreport. Note 2 LOSS PER ORDINARY SHARE The calculation of basic and diluted loss per ordinary share is based on thefollowing loss and number of shares. 15 months 11 months ended ended 31 December 30 September 2004 2003 £ £ Loss for the financial period (563,160) - 2004 2003 No. of shares No. of shares Weighted average number of shares 107,745,590 2 Due to the loss incurred in the period, there is no dilutive effect from theissue of share options. Note 3 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 2004 2003 £ £ Loss for the financial period (563,160) - Issue of shares during the 14,951,198 2 period Share issue costs (422,486) - Exchange rate adjustments (67,404) - Net addition to shareholders' 13,898,148 2 funds Opening shareholders' funds 2 - Closing shareholders' funds 13,898,150 2 Note 4 CASH FLOWS 2004 2003 £ £ a Reconciliation of operating loss to net cash outflow from operating activities Operating loss (637,663) - Increase in debtors 143,063 - Increase in creditors (89,924) - Net cash outflow from operating activities (584,524) - b Analysis of cash flows for headings netted in the cash flow 2004 2003 £ £ Returns on investments and servicing of finance Interest received 41,041 - Other interest paid (2,071) - Net cash inflow from returns on investments and servicing of finance 38,970 - Capital expenditure and financial investment Purchase of intangible fixed assets (381,899) - Net cash outflow from capital expenditure and financial (381,899) - investment Acquisitions and disposals Cash acquired with subsidiary 106,594 - Acquisition of subsidiary (50,000) - Net cash inflow from acquisitions and disposals 56,594 - Management of liquid resources Cash deposited on 7 day deposit (2,285,791) - Net cash outflow from management of liquid resources (2,285,791) - Financing Proceeds from issue of share capital 3,705,000 2 Share issue costs (422,486) - Net cash inflow from financing 3,282,514 2 At Cash-flow Exchange At 1 October 2003 Difference 31 December 2004 £ £ £c Analysis of net funds £ Cash at bank and in hand 2 125,864 (67,404) 58,462 Cash on deposit - 2,285,791 - 2,285,791 2 2,411,655 (67,404) 2,344,253 d Analysis of the net outflow of cash in respect of the purchase 2004 2003 of subsidiary undertaking: £ £ Cash acquired with subsidiary 106,594 - Acquisition of subsidiary (50,000) - Net inflow of cash in respect of the purchase of subsidiary 56,594 - This information is provided by RNS The company news service from the London Stock Exchange