26 Apr 2010 07:00
VANE Minerals plc (AIM:VML)
("VANE" or the "Company")
Audited Results for the year ended 31 December 2009
Vane Minerals Plc (AIM:VML), today announces its audited results for the year ended 31 December 2009
Highlights
·; £2.35m revenue (£1.71m 2008)
·; £1.86m loss (£1.04m before impairment) (2008: £1.73m loss, £1.20m before impairment). Impairment in 2009 was mainly owing to the discontinuance of operations in Paraguay to allow the company to concentrate on its core activities in the US and Mexico
·; Minehead grade targets achieved at the Diablito silver-gold Mine
·; 1,941 tonnes average monthly production 2009
·; silver and gold grades on target at approximately 322g/t and 2.83g/t, respectively
·; Wate uranium pipe exploration success, Arizona
·; High-grade results led to NI 43-101 resource announcement, post the period, in March 2010
·; Breccia pipe portfolio increased in northern Arizona through new licence acquisitions
·; Acquisition of Coyote Basin with historic resource of 34.5 mm lbs U3O8 (non NI43-101)
·; US Copper target generation successful although drilling licence delays
·; Licence delays resolved post period and drilling commenced
Steve Van Nort, VANE's CEO commented: "2009 saw improvement of our silver/gold production in Mexico and our exploration work laid the foundation for the publication of our maiden resource to NI 43-101 standard at the Wate breccia pipe within the joint venture with Uranium One. Delineation of prospective targets at our US copper licences was also successful but further exploration was hindered due to drilling permit delays. The appropriate permits have since been granted and we began drilling at Lordsburg in April of this year. While our key areas of operation in our uranium exploration are located on state land within northern Arizona, the continuing moratorium on licenses within Federal lands continues to concern us. However a series of independent studies assessing the impact of uranium exploration and mining on the Federal land is under way, we believe that these studies will demonstrate the low impact nature of uranium operations within this region and we look forward to seeing the publication of preliminary results from these studies during 2010. VANE will continue to look at ways of expanding our revenue generating operations within Mexico, develop our uranium portfolio towards the development phase and acquire and drill new targets within our copper portfolio."
For further information, please contact:
| VANE Minerals Plc | +44 (0) 20 7667 6322 |
| Matthew Idiens
|
|
| Arbuthnot Securities | +44 (0) 20 7012 2000 |
| John Prior /Richard Johnson
|
|
| Threadneedle Communications | +44 (0) 20 7653 9850 |
| Laurence Read/ Beth Harris |
|
Chairman's Statement
2009 was a year that saw minehead grade targets achieved at the Diablito silver-gold Mine, Mexico, and solid exploration work delivered from the Wate uranium breccia pipe in northern Arizona. While copper exploration in New Mexico was slowed due to permitting issues, work carried out during 2009 formed the basis of the drilling programme now fully underway post the period.
Production at Diablito averaged 1,941 tonnes per month with silver and gold grades on target at approximately 322g/t and 2.83g/t, respectively. Tonnage milled at San Dieguito in 2009, amounted to 31,659 tonnes, a monthly average of 2,638 tonnes. The average processing grades were 277g/t and 2.48g/t silver and gold, respectively, while precious metals prices were close to our estimates. The uranium programme advanced on several fronts with new prospective properties added to the breccia pipe portfolio in northern Arizona. Existing operations at the Wate breccia pipe in Coconino County, northern Arizona progressed extremely well with high-grade results being returned that led to VANE announcing a NI 43-101 resource post the period in March 2010. During 2009, the Wate pipe was drilled and logged with results confirming historical data indicating a resource in excess of 1.0 million(mm) pounds of U3O8 at 0.8% (non-compliant NI 43-101). In northwest Colorado, VANE acquired the Coyote Basin property, high-grade uranium in a shallow dipping lignite seam with a historic resource of 34.5mm pounds of U3O8 and drilling at the North Wash property in southeastern Utah has doubled the indicated uranium mineralization. This progress was achieved during a time of market uncertainties which is testament to the measured approach of our experienced exploration team. Target generation within the southwest USA porphyry copper programme was successful but the drilling of targets was slowed due to permitting issues with the State of New Mexico.
The various political and legal actions against uranium exploration, development and mining on northern Arizona federal lands has obviously been of concern to VANE despite our core exploration projects, currently being operated on state land. The Company still has highly valuable licences on federal land and we look forward to the independent results from the various studies recently commissioned to determine the impact on uranium activities to the area. Studies commissioned specifically include examination of the interaction between exploration for, and the mining of, uranium and the Colorado River system and the Grand Canyon National Park. The numerous studies already completed, plus 30 years of uranium exploration, development and mining in northern Arizona have not revealed any verifiable or documented evidence of negative impact on the region from such operations. Looking forward:
·; VANE's uranium programme is designed to explore, develop and mine uranium in a safe and economical way thus providing an in-country source of fuel for the USA's growing carbon-free nuclear energy appetite. The USA currently imports 90% of its annual needs of over 40,000,000 pounds (lbs) of yellow cake.
·; The Wate pipe mineral lease application with our JV partner Uranium One USA Inc is progressing as planned.
·; The Coyote Basin project is being prepared for a core drilling programme to confirm historic grades and obtain samples for metallurgical testing.
·; VANE's Mexico silver-gold operations will continue with the intention to increase the feed head grade to the SDA mill via supplemental ores from surrounding mines. The idea of revitalizing old districts along the Western margin of the Sierra Madre appears to be financially attractive in the light of current and projected precious metal prices. These old districts produced high-grade gold and silver ore from vein deposits. Lacking a mill, these mines were able to operate only during periods of very high metal prices. Our centrally located mill coupled with a concentrate leaching facility at our SDA mill site will enable production from these high-grade veins to resume.
·; These old districts were based on small, high-grade vein deposits with individual mills at each mine and were shut down following years of controlled precious metal prices. With a centrally located moderate size mill, a concentrate leaching facility at our SDA mill site, and ore supplied from a number of these small, high-grade vein deposits this project now makes good economic sense.
·; VANE's porphyry copper programme has drilling underway at the Lordsburg project and will continue the acquisition and drilling of additional covered area targets in the famous southwest USA copper quadrilateral. One to two holes in a buried chalcocite blanket, occupying an area of no more than a quarter of a square mile, is all it will take to propel VANE onto the front pages.
We thank our investors for their current and continuing support and look forward to updating you with our progress throughout the rest of the year.
Sir Richard Needham
21 April 2010
Operations Review
Uranium exploration in USA
VANE Minerals (US) LLC, wholly-owned subsidiary of VANE Minerals plc, continued its uranium exploration activities in 2009, almost exclusively in the breccia pipe district of northern Arizona. This is in response to the weakening of the uranium oxide (U3O8) price from $85/pound (lb) U3O8 at the start of 2008 to $50/lb at the start of 2009. The current spot price is near $40/lb and the long-term price near $60/lb and, at these prices, the high-grade deposits which the breccia pipes are known for remain viable. This is in comparison to the lower grade stratabound deposits in Utah where VANE elected to hold its property position in a care and maintenance mode during the year. The Company did, however, diversify its uranium portfolio by acquiring at minimal cost a large land position in northwest Colorado. The project, Coyote Basin, covers a historic resource reported at 35mm lbs U3O8 (non-compliant NI 43-101) hosted in lignite with reported historic grades up to 0.82% U3O8 on which the Company plans to conduct confirmation work in 2010.
VANE - Uranium One Exploration U.S.A. Inc. Joint Venture
VANE's uranium programme advanced during 2009 with emphasis on the Wate Project. The Wate breccia pipe continues to show positive economic potential as VANE's leading candidate for development from its uranium portfolio. In order to move the project to the NI 43-101 report phase, five holes of a total of 6,900 feet were completed during the year. Variations in downhole directional survey data were observed and a decision was made late in the year to spend additional time in confirming these data. This resulted in delaying the start of the NI 43-101 resource report, but VANE is now confident in all data going into the resource model and is firmly behind its decision to perform the careful quality control checks. SRK Consulting Inc. have verified VANE's data and determined an inferred resource of 695,000 lbs of eU3O8 contained in 43,000 tonnes of rock with an average grade of 0.80% eU3O8 (VANE Press Release - 1 March 2010). SRK will incorporate this model into the NI 43-101 report scheduled for completion shortly. SRK also concluded that it is reasonable to assume that the historically estimated conservative case resource of 70,250 tonnes at 0.80% eU3O8 for 1.124mm lbs is likely to be correct. The next phase of the development of the project will be to transfer the Arizona State exploration permit into an Arizona State mineral lease and complete underground delineation drilling.
In an effort to continue building its portfolio of strong exploration targets, VANE acquired 13 breccia pipe targets from Neutron Energy Inc. during the year. These targets consist of six on Arizona State Lands which are fully permitted for drilling and seven targets located in the Kaibab National Forest and held by lode claims. VANE plans to implement drilling programmes at all the projects located on state lands in 2010, one of which has anomalous radioactivity at surface consisting of 65 times background.
Work on the Environmental Impact Study (EIS) that covers the permitting for 24 projects in the Kaibab National Forest is now scheduled for completion in Q3 2010. Among the 24 projects are the Shale and BNE confirmed mineralized pipes which were briefly explored in the mid-1980s but activities were curtailed due to weakness in the uranium market.
VANE continues to monitor the Segregation order that impacts all federal lands where VANE has holdings and the resulting regional EIS being completed. We are encouraged with recent announcements from the Obama administration in favour of nuclear energy. We are hopeful that the administration will recognize that the USA imports 90% of its uranium needs and that the nuclear energy industry is not stable without a secure domestic mined source.
North Arizona Strip
The Company greatly increased its presence on the north Arizona Strip during the year with the acquisition of 340 lode claims covering some 79 breccia pipe targets. The property package was acquired from Sage Associates and assembled under the supervision of an experienced breccia pipe geologist. This project is held 100% by VANE.
Colorado
VANE diversified its uranium portfolio by expanding into northwest Colorado with the acquisition of the Coyote Basin project from Uranium One Americas, Inc. The property package consists of 213 lode claims and one state section that covers a resource of uranium in lignite reported to contain 35mm lbs U3O8 (non-compliant NI 43-101) .
Uranium has been recovered from lignite historically and the Company plans to drill several holes in 2010 to obtain cores for metallurgical bench tests. Upon positive results, confirmation drilling will be undertaken to verify the reported historic resource. The project is of particular interest due to the high uranium grades reported in historic drill data, for example: 0.43% U3O8 average over 10 feet and 0.82% U3O8 average over 5 feet. Mr. Ken Miyoshi, who has 30-years' experience in uranium metallurgy including mill management, will oversee the metallurgical test work.
Utah Strata-bound Uranium Projects
VANE has successfully renegotiated its leases on the North Alice Extension and Happy Jack properties. The North Wash project has taken the lead position in VANE's Utah holdings due to its by-product vanadium potential. Based on VANE's drilling results in 2008, VANE's internal estimate of the resource doubled to 300,000 lbs eU3O8 (non NI 43-101 compliant) and with an estimated 1:5 uranium to vanadium ratio, giving and estimated vanadium content of 1.5mm lbs V2O5. VANE will continue to monitor the uranium and vanadium markets with the intent of further developing this project when the opportunity arises. The remaining Utah properties are 100% owned by VANE and are being maintained on a care and maintenance basis.
Southwestern USA copper exploration
VANE's 100% owned copper exploration team, AVEN Associates LLC (AVEN), continues to develop porphyry copper targets in the copper quadrilateral of southern Arizona and southeast New Mexico, a region that produces 60% of the annual demand for copper within the USA.
The Yuma King prospect controlled by AVEN consists of 320 federal lode mining claims which encompass approximately 6,400 acres or roughly 10 square miles. Historical data from sampling of old underground workings and eight diamond drill holes indicate the existence of a small high-grade oxide-copper inferred resource (Big Bar's NI 43-101 reports 450,000 tons at 3.03% copper) and a deep, under explored, porphyry copper-molybdenum potential. Geophysical data, via ultra-light magnetic survey, has been re-interpreted and is currently being evaluated in the context of the known regional/detailed geology and geochemistry. Drill targets are being identified and scheduled to be drilled before year end.
In September 2009, AVEN staked 49 20-acre federal lode claims in an area west of Lordsburg, New Mexico ('NM'), to go along with our 640 acre NM State Lease. This target is a covered area target, potential porphyry copper deposit under shallow post mineral alluvial offset from the Banner Mine mineral cluster and has been scheduled for drilling since late last year. Delays in getting the drill programme started have been because of permitting issues within the New Mexico State Land Department and New Mexico Game and Fish Department, New Mexico State Engineer's Office in Deming, New Mexico Division of Hydrology, Hidalgo County Clerk Office, New Mexico Department of Energy and Minerals and the Federal Bureau of Land Management (BLM) office in Las Cruzes. At the time of writing, permits are in hand and drilling has begun.
Numerous additional targets have been identified and will be drilled as land positions are established and permits issued.
Diablito mining and milling operations (silver & gold) Nayarit, Mexico
Minerales VANE SA de CV's (MV), the 100% wholly owned subsidiary of VANE Minerals plc, operations at the Diablito Mine (Diablito) at Las Lumbres, the San Dieguito de Arriba mill (SDA) at San Dieguito de Arriba and our offices and assaying laboratory at Acaponeta continued to operate smoothly during 2009. The MV team headed by Dr. Luiz Perez continued to upgrade the infrastructure associated with each of the operating areas while achieving production, safety and security objectives.
Production from Diablito Mine (MV) averaged 1,941 tonnes per month (DMO + PGO), an improvement over first half 2009 results but still below our target rate of 2,150 tonnes per month. Precious metal grades continue to reflect the effects of dilution caused by the erratic nature of the veins, pinching and swelling, and the softness of the host rocks surrounding the veins, especially the lower vein, vein #1, with its gouge zone at the upper contact. Silver and gold grades were on target at approximately 322g/t and 2.83g/t, respectively. Safety and security measures have been taken in response to the independent report issued by Dan White of Physical Resource Engineering (PRE) of Tucson following his on site evaluation in Q22009.
The San Dieguito de Arriba mill (SDA) continues to operate as planned with 90% availability for 2009. Tonnes milled during 2009 amounted to 31,659 tonnes for a monthly average of 2,638 tonnes or 92% of our targeted amount. The average grade of the material processed was 277g/t and 2.48g/t silver and gold respectively. The difference between the tonnes mined and the tonnes milled on a monthly basis was made up by supplementing mill feed material from lower grade stockpiles that had been built over the first three years of the mine operation when we were using a custom mill. The low grade stockpile at year end 2009 amounted to roughly 7,000 tonnes and will continue to supplement our mill feed for the next 18 months to keep the mill running at 100% capacity. Silver and gold recoveries at the mill during 2009 were 87% and 83% silver and gold respectively.
Concentrate sales were split between Penoles in Torreon (two shipments) and Grupo Mexico in San Luis Potosi (12 shipments). Total 2009 concentrate production amounted to 536.5 tonnes or 44.7 tonnes per month. Average metal prices for the concentrates sold during the year were $14.53/oz and $966.90/oz silver and gold respectively.
Acquisition opportunities, of both stand alone mine/mill operations and mine production as potential feed to the SDA mill, have been and continue to be evaluated. Our SDA mill is ideally located along a well-mineralized, 300km stretch of the Western Sierra Madre devoid of competitive mills and our MV team is ready to branch out into a new area. We will announce any further developments as soon as they happen in due course.
Paraguay exploration
VANE has expensed considerable effort in trying to locate a joint venture partner to carry the exploration work forward. Although a number of companies have been contacted, and a few showed serious interest, we have not been able to conclude a deal with any party so we have taken the decision to withdraw from this project
Principal risks and uncertainties
The directors believe that the immediate principal matters which could affect the performance of the Group in the future are:-
·; The Company currently generates its only income from the Diablito Mine and so in that respect it is dependent upon its smooth operation. We have an excellent relationship with the mining contractor, and others are available if needed.
·; The mill at San Dieguito de Arriba is operating smoothly with supplies readily at hand and spare components, mainly pumps and motors, have been sourced.
·; The concentrates are transported and presently sold to a third-party smelter and we are therefore subject to commercial charges of those parties and continuity of labour. Due to escalating smelting charges management is evaluating the building of a concentrate leaching facility at SDA whereby we would sell gold in the form of zinc precips to the smelter thus cutting our current smelting costs roughly in half.
·; While drill rig availability has historically been tight, VANE has secured rigs to cover all of the ongoing exploration programmes in Mexico, southwestern USA, the Colorado Plateau and Paraguay.
·; Additional drilling permits are under application and the timing on receiving these can vary as we have seen in our request for a drilling permit at our Lordsburg West target in New Mexico; four months elapsed since we initiated the permitting process and our final approval in mid-March 2010.
·; Changes to the US Mining Law of 1872, in legislation currently before the US Congress but not likely to be voted on this year, may affect future operations in that royalties on minerals obtained from federal lands (lode claims) may be imposed.
·; Political risk appears low in all our areas of operation.
·; The dispute between the United States Forest Service (USFS) and various environmental groups is delaying the approval of the necessary permits in some of our areas of interest. The Secretary of the Interior, Ken Salazar, has issued a 2 year segregation order covering approximately 1,000,000 acres in the Northern Arizona uranium breccia pipe district thereby limiting any further work on the effected federal lands for a two year study period to determine the effects, if any, of exploration, development and mining on the Grand Canyon National Park. State lands, on which the company is now focussing its efforts, are unaffected by this segregation order.
·; The prices of gold and silver have risen over the last six months and, given the current economic climate, we do not anticipate a precipitous drop in the near future. Uranium oxide prices have fallen from their high of $135 per pound in early 2007 and are currently approximately $40 per pound, but with world-wide demand for uranium on the increase again, we do not expect a dramatic price change in the near term.
Other important factors that could affect any one of the Group's many operations, including Diablito, are unanticipated mining, milling and other processing problems, accidents that lead to personal injury or property damage, persistent commodity price reductions, changes in political, social or economic circumstances, variance in ore grades, labour relations, adverse weather conditions and other adverse financial market conditions. We continue to monitor all aspects of our programmes with a view to ensuring their continued success.
Relationships
The Group enjoys good relationships with all of its suppliers and professional advisers. The relationship with the Mexican mining contractor, COMINVI SA de CV, potential drilling contractors in Mexico, and the principal drilling contractor in the USA, Del Rio Drilling and Pump are key to our ongoing operations.
Financial Review
Revenues
Revenues from the Diablito mine during the year have been lower than expected owing to a combination of factors:
·; Continued, unpredicted dilution of grades;
·; Declining concentrate ratio due to supplementing mill feed (to keep the mill running at 100% capacity) with stockpiled material particularly as some material had oxidized in the pile. That caused our concentrate grades to decrease and our concentrate tonnes to increase resulting in higher transportation costs, with recoveries staying the same;
·; Mine production has continued at approximately 1,950 tonnes per month during the year (DMO + PGO).
Results for the year
Under its third full year of IFRS reporting, the Group reported a net loss after tax of £1,864,026 or 0.98 pence per share in 2009 (compared with £1,726,821 or 0.91 pence per share as reported in 2008). Of the total net loss for the period, £4,621 (2008: £534,636) was due to the impairment of exploration assets relating to uranium projects, and £826,627 (2008: £nil) in respect of the Paraguay project.
The impairment of intangible assets in the year was significantly less than that of previous years owing to the fact that the majority of the Group's uranium and copper projects are being actively pursued.
Employee recruitment and retention
Although the Company has no quantitative target for the number of employees it needs or retains, this metric is closely monitored. The Company has an excellent record of retaining key staff.
During the year no new members have been added to the uranium team and one has departed.
Significant equity events
During the year there have been no new shares issued as a result of fund raising or options exercised.
There were a total of 190,108,108 (2008: 190,108,108) ordinary shares in issue at the year end. During the year share options were granted over a total of 500,000 shares to one director.
Cash position
The Group had closing cash balances at year end totalling £1,818,959 (2008: £3,308,016).
Inventory valuation
The closing inventory value for the reporting period was much higher than 2008 as stocks of ore that had previously been valued at £nil on the basis of the accounting policy (lower of cost and net realisable value) now had sufficient value owing to the substantial increase in gold prices during the year.
Key performance indicators
There are a number of key performance indicators that are reviewed regularly by the Board as set out below in respect of 2009:-
| Item | Actual | Target | Comment |
| Production monthly tonnage (DMO) | 1,495 | 1,500 | The average monthly production for the whole of 2009 was 1,941 tonnes (DMO + PGO). |
| Maintenance of mineral grades (DMO) | 3.26g Au 375g Ag | 3.75g Au 375g Ag | Overall close to target but we continue to experience significant dilution of the drill indicated grades. |
| Gross margin per tonne milled | $75.50 | $86.00 | Gross margin per tonne of milled output was lower than planned owing to reduced gold grades |
| Cash balances | £1.818m | £1.683m | Closing cash balances were slightly higher than anticipated. |
Outlook
Your board, management and dedicated exploration team continue to investigate and evaluate new opportunities designed to improve share price and ultimately shareholder value. VANE, as a diversified exploration company, is well situated with silver/gold production and exploration in Mexico, copper exploration in the highly productive SW US copper quadrilateral, uranium exploration and development in the high grade breccia pipe district of Northern Arizona and our newly acquired large lignite-hosted uranium project, Coyote basin, in Colorado. Drill holes discover ore bodies and VANE is dedicated to putting the majority of our exploration dollars into drilling. All it takes is one or two drill holes through a buried chalcocite blanket to move VANE up the ladder from a junior company.
We all would like to take this opportunity to thank you, our shareholders, for your continued support.
L Clark Arnold Kristopher K Hefton Steven D Van Nort
Director of Exploration COO, VANE Minerals plc CEO, VANE Minerals plc
Consolidated income statement for the year ended 31 December 2009
|
|
| 2009 £ | 2008 £ |
|
|
|
|
|
| Revenue |
| 2,350,866 | 1,710,807 |
|
|
|
|
|
| Cost of sales |
| (1,230,727) | (2,317,210) |
|
|
|
|
|
| Gross profit/(loss) |
| 1,120,139 | (606,403) |
|
|
|
|
|
| Operating and administrative expenses |
| (1,692,627) | (1,271,209) |
| Impairment of exploration costs |
| (831,248) | (534,636) |
|
|
|
|
|
| Operating loss |
| (1,403,736) | (2,412,248) |
|
|
|
|
|
| Income from investments |
| 26,698 | 244,787 |
| Finance costs |
| (144,341) | (142,157) |
|
|
|
|
|
| Loss before taxation |
| (1,521,379) | (2,309,618) |
| Taxation |
| (342,647) | 582,797 |
|
|
|
|
|
| Loss for the year - attributable to owners of the parent company |
| (1,864,026) | (1,726,821) |
|
|
|
|
|
|
|
|
|
|
| All the above Group's results relate to continuing operations. |
|
|
|
|
|
|
|
|
| Loss per ordinary share |
|
|
|
|
|
|
|
|
| Basic & Diluted |
| (0.98p) | (0.91p) |
|
|
|
|
|
|
|
|
|
|
Consolidated statement of comprehensive income
For the year ended 31 December 2009
|
|
| 2009 £ | 2008 £ |
|
|
|
|
|
| Loss for the year |
| (1,864,026) | (1,726,821) |
|
|
|
|
|
| Other comprehensive income |
|
|
|
|
|
|
|
|
| Exchange differences arising in translation of foreign operations |
| (289,492) | 879,874 |
|
|
|
|
|
| Income tax relating to components of other comprehensive income |
| 153,797 | (409,907) |
|
|
|
|
|
| Total comprehensive income for the year attributable to owners of the parent company |
| (1,999,721) | (1,256,854) |
|
|
|
|
|
Consolidated statement of financial position as at 31 December 2009
|
|
| 2009 £ | 2008 £ |
|
|
|
|
|
| Non current assets |
|
|
|
| Investments |
| 213,571 | 213,571 |
| Intangible assets |
| 2,567,140 | 2,803,654 |
| Property, plant and equipment |
| 2,645,091 | 3,216,525 |
|
|
|
|
|
|
|
| 5,425,802 | 6,233,750 |
|
|
|
|
|
| Current assets |
|
|
|
| Inventories |
| 804,200 | 20,157 |
| Trade and other receivables |
| 374,251 | 497,105 |
| Cash and cash equivalents |
| 1,818,959 | 3,308,016 |
|
|
|
|
|
|
|
| 2,997,410 | 3,825,278 |
|
|
|
|
|
| Total assets |
| 8,423,212 | 10,059,028 |
|
|
|
|
|
| Current liabilities |
|
|
|
| Trade and other payables |
| (454,276) | (361,833) |
| Taxation |
| (65,238) | (12,518) |
|
|
|
|
|
|
|
| (519,514) | (374,351) |
|
|
|
|
|
| Non-current liabilities |
|
|
|
| Convertible loan notes |
| (1,429,985) | (1,406,976) |
| Obligations under finance leases |
| - | (2,270) |
| Deferred tax |
| (320,295) | (174,993) |
| Provisions |
| (41,250) | (37,500) |
|
|
|
|
|
|
|
| (1,791,530) | (1,621,739) |
|
|
|
|
|
| Total liabilities |
| (2,311,044) | (1,996,090) |
|
|
|
|
|
| Net assets |
| 6,112,168 | 8,062,938 |
|
|
|
|
|
| Equity attributable to owners of the parent company |
|
|
|
| Share capital |
| 19,010,811 | 19,010,811 |
| Share premium account |
| 2,359,071 | 2,359,071 |
| Share option reserve |
| 280,161 | 231,210 |
| Other reserves |
| 261,220 | 261,220 |
| Cumulative translation reserve |
| 71,586 | 207,281 |
| Retained loss |
| (15,870,681) | (14,006,655) |
|
|
|
|
|
| Equity |
| 6,112,168 | 8,062,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of changes in equity
|
| Share capital | Share premium account | Share option reserve | Other reserves | Cumulative translation reserves | Retained loss | Total |
|
| £ | £ | £ | £ | £ | £ | £ |
|
|
|
|
|
|
|
|
|
| Balance at 1 January 2008 | 19,010,811 | 2,359,071 | 195,203 | 261,220 | (262,686) | (12,279,834) | 9,283,785 |
|
|
|
|
|
|
|
|
|
| Changes in equity for 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange differences arising on translation of foreign operations | - | - | - | - | 879,874 | - | 879,874 |
|
|
|
|
|
|
|
|
|
| Deferred tax effect of exchange differences arising on translation of foreign operations | - | - | - | - | (409,907) | - | (409,907) |
|
|
|
|
|
|
|
|
|
| Loss for the year | - | - | - | - | - | (1,726,821) | (1,726,821) |
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the year | - | - | - | - | 469,967 | (1,726,821) | (1,256,854) |
|
|
|
|
|
|
|
|
|
| Transactions with owners
|
|
|
|
|
|
|
|
| Share based payment | - | - | 36,007 | - | - | - | 36,007 |
|
|
|
|
|
|
|
|
|
| Balance at 31 December 2008 | 19,010,811 | 2,359,071 | 231,210 | 261,220 | 207,281 | (14,006,655) | 8,062,938 |
|
|
|
|
|
|
|
|
|
| Changes in equity for 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange differences arising on translation of foreign operations | - | - | - | - | (289,492) | - | (289,492) |
|
|
|
|
|
|
|
|
|
| Deferred tax effect of exchange differences arising on translation of foreign operations | - | - | - | - | 153,797 | - | 153,797 |
|
|
|
|
|
|
|
|
|
| Loss for the year | - | - | - | - | - | (1,864,026) | (1,864,026) |
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the year | - | - | - | - | (135,695) | (1,864,026) | (1,999,721) |
|
|
|
|
|
|
|
|
|
| Transactions with owners
|
|
|
|
|
|
|
|
| Share based payment | - | - | 48,951 | - | - | - | 48,951 |
|
|
|
|
|
|
|
|
|
| Balance at 31 December 2009 | 19,010,811 | 2,359,071 | 280,161 | 261,220 | 71,586 | (15,870,681) | 6,112,168 |
|
|
|
|
|
|
|
|
|
Consolidated cash flow statement
|
|
| 2009 £ | 2008 £ |
| Cash flow from operating activities |
|
|
|
|
|
|
|
|
| Loss before taxation |
| (1,521,379) | (2,309,618) |
|
|
|
|
|
| Income from investments |
| (26,698) | (244,787) |
| Finance costs |
| 144,341 | 142,157 |
|
|
|
|
|
| Adjustments for: |
|
|
|
| Depreciation of property, plant and equipment |
| 595,918 | 591,698 |
| Impairment of intangible assets |
| 831,248 | 534,636 |
| Share based payments |
| 48,951 | 36,007 |
| Effect of foreign exchange rate changes |
| 26,303 | 370,641 |
|
|
|
|
|
| Operating cash inflow / (outflow) before movements in working capital |
| 98,684 | (879,266) |
| (Increase) / decrease in inventories |
| (784,043) | 524,859 |
| Decrease / (increase) in trade and other receivables |
| 122,854 | (247,842) |
| Increase in trade and other payables |
| 98,175 | 90,247 |
|
|
|
|
|
| Cash used in operations |
| (464,330) | (512,002) |
| Income tax paid |
| (8,476) | (16,432) |
| Interest paid |
| (120,516) | (120,219) |
|
|
|
|
|
| Net cash used in operating activities |
| (593,322) | (648,653) |
|
|
|
|
|
| Cash flow from investing activities |
|
|
|
| Interest received |
| 26,698 | 244,787 |
| Purchase of property, plant and equipment |
| (60,106) | (120,559) |
| Purchase of intangible assets |
| (835,748) | (2,116,087) |
|
|
|
|
|
| Net cash used in investing activities |
| (869,156) | (1,991,859) |
|
|
|
|
|
| Cash flow from financing activities |
|
|
|
| Repayment of obligations under finance leases |
| (8,818) | (3,496) |
|
|
|
|
|
| Net cash used in financing activities |
| (8,818) | (3,496) |
|
|
|
|
|
|
|
|
|
|
| Net decrease in cash and cash equivalents |
| (1,471,296) | (2,644,008) |
|
|
|
|
|
| Cash and cash equivalents at beginning of year |
| 3,308,016 | 5,813,353 |
|
|
|
|
|
| Effect of foreign exchange rate changes |
| (17,761) | 138,671 |
|
|
|
|
|
| Cash and cash equivalents at end of year |
| 1,818,959 | 3,308,016 |
|
|
|
|
|
Earnings per share
The calculation of basic and diluted loss per ordinary share is based on the following loss and number of shares.
|
|
| 2009 £ | 2008 £ |
| Earnings |
|
| |
| Earnings for the purpose of basic loss per share (net loss for the year) | (1,864,026) | (1,726,821) | |
|
|
|
|
|
| Number of shares |
|
| |
| Weighted average number of shares for the purposes of basic loss per share | 190,108,108 | 190,108,108 | |
|
|
|
|
|
| Share options in issue |
|
| |
| Weighted average number of shares for the purposes of diluted loss per share | 190,108,108 | 190,108,108 | |
|
|
|
|
|
As a result of the losses incurred, there is no dilutive effect from the subsisting share options.
Basis of preparation
The financial information does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006 for the years ended 31 December 2009 or 2008.
The financial information for the years ended 31 December 2009 and 2008 is derived from the statutory accounts for those years. The auditor reported on those statutory accounts which have been delivered to the Registrar of Companies in the case of the 2008 year end.
The financial statements for the year ended 31 December 2009 have been reported on by the Company's auditor and contain an unqualified audit report with an emphasis of matter in regard to going concern. They will be circulated to the shareholders in April 2010 and the Annual General Meeting is arranged to take place in June 2010.
The financial statements have been prepared on the Going Concern basis. Historically the Group has relied upon investment funds from its shareholders to fund its operations. The Group is still undertaking extensive exploration activities and as such is dependent upon its cash resources for continuance of its programme. The Group generates cash from one of its subsidiaries through mining operations in Mexico, but this activity provides insufficient cash flow to fund the other activities of the Group.
Accordingly, VANE has been looking into a number of potential ways to add additional funding for the financing of its full exploration programme. Sources of additional cash flow are being considered, including the sourcing of additional mill feed from other mines in the area of the Diablito mine. Several potential sources of high grade ore exist in the locality and, as VANE owns the only locally-based mill, management are confident that one or more arrangements will be secured in the near future.
Additionally, an equity fund-raise through both the UK and Canadian markets as done historically with much success is an option, and the Group has been in discussions with Arbuthnot Securities Ltd, its broker, since the beginning of the year in relation to this.
The Group's exploration expenditure is largely discretionary and its activities can be adjusted to enable the Group to operate within available resources for the foreseeable future.
Having made appropriate enquires, having considered all the matters raised in the preceding paragraphs, and having examined the major areas which could affect the Group's financial position, the directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, they consider it appropriate to adopt the going concern basis in preparing the financial statements.
The audit report for the year ended 31 December 2008 was unqualified, did not include references to matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
This announcement is prepared applying International Financial Reporting Standards and IFRIC interpretations (`IFRS') as adopted by the European Union, with those parts of the Companies Act 2006 applicable to companies reporting under IFRS and using accounting policies that are consistent with those as stated in the previous year's financial statements except those stated below.
New and amended standards and interpretations adopted by the Group
The Group has adopted the following new and amended IFRSs during the current period.
• IAS 1 'Presentation of Financial Statements' (as revised in 2007) - effective 1 January 2009. IAS 1 (2007) has introduced terminology changes (including revised titles for the financial statement(s) and changes in the format and content of the financial statements.
• IFRS 8 'Operating Segments' - effective 1 January 2009 states that segment information should be based on management's internal reporting structure and accounting principles.
A full version of the Report and Financial Statements is available for download from the Company's web site at www.vaneminerals.com,