Sunrise Resources PLC Regulatory News (SRES)

7 Dec 2006 14:22

Sunrise Diamonds PLC07 December 2006 SUNRISE DIAMONDS PLC ANNOUNCEMENT OF AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2006 Chairman's Statement I am pleased to report on a year of substantial progress towards the discoveryof commercial diamond deposits on our exploration properties in Finland. New Discoveries The Company is exploring in the Karelian Craton, a diamond-prospectivegeological block that on the Russian side of the Finnish border contains some ofthe world's richest diamond deposits including the Lomonosov pipe complex atArkhangelsk now under development by Alrosa. There is potential for similar types of deposits in the Finnish part of theCraton and consequently a determined target generation and follow-up explorationprogramme is being conducted on the back of our valuable BHP Billiton database. As reported, we have achieved early successes in our diamond search wherenormally patience is a necessary ingredient. You may recall in my Chairman'sStatement last year I mentioned previous exploration in the Kuusamo region ofnorthern Finland defined a new kimberlite cluster and I forecast that morekimberlite discoveries would be made in the Kuusamo cluster. I am therefore delighted to report that our exploration this year has added afurther three new kimberlite discoveries bringing the total number at Kuusamo toseven. Three of these kimberlites are now known to be diamondiferous. BHP Billiton Database During the year we have built on our exclusive agreement with BHP Billiton toexploit their diamond exploration database for Finland. The database, which webelieve has a replacement value of over US$10 million, includes an extensivearchive of surface geochemical sampling results from throughout Finland as wellas extensive geophysical data and information on the mineral chemistry of thecountry's known kimberlites. A complete review of the BHP Billiton database has generated numerous targetswhich are now being followed up with detailed fieldwork. These includekimberlite pebbles from Target 298 with a high micro-diamond count and which areabundant near surface in conjunction with a high interest indicator mineralanomaly. Nordic Diamonds JV During the year we entered into a joint venture agreement with Canada's NordicDiamonds Ltd ("Nordic") which gives us the right to earn up to a 75% interest ina parcel of claims covering 16 of the 20 kimberlites that were discovered byAshton Mining and its partners in the 1990's in the Kaavi-Kuopio area of southcentral Finland. Most of these kimberlites are diamondiferous and one or moremay have commercial potential. The claims also include untested diamond targets- for example, Target 295 where our recent exploration has confirmed earlierreports of kimberlite fragments and associated high interest kimberliteindicator minerals. The recent recovery of a micro-diamond in the glacialsediment at this location taken together with the favourable chemistry of theindicator minerals suggests a significant diamond source nearby. Diamond Market The outlook for the diamond market continues to be positive with fine large gemsincreasing in price on the back of high demand and short supply. Low valuestones have, on the other hand seen a slight reduction in price more recentlyfollowing a period of larger than average sales by De Beers last year. However,the outlook is for prices to increase across the range as world diamond supplyfirst levels off, then declines against increasing world demand. Results for the Period The Company is reporting a loss of £179,209 for the year ending 30 September2006 (2005: £239,092). This comprises interest receipts of £14,254,administration expenses of £171,250 and reconnaissance expenses of £22,213. Enviable Landholding, Database And Targets The Company has, in a short time, positioned itself as the leading diamondexploration company operating in Finland with an enviable landholding and asubstantial inventory of targets developed from a proprietary diamondexploration database that is the most comprehensive in use in Finland today. Diamonds are always hard to find, but commercial diamond discoveries deliversuperior returns to shareholders compared to discoveries of other commodities. The Company is in an exciting phase of its development and I look forward toreporting further progress over the coming year. Patrick L. Cheetham 7 December 2006Executive Chairman Further Information: Patrick Cheetham, Sunrise Diamonds plc. Tel: +44 (0)1625-505947. Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: +44 (0)20-7628-5518 Web-site: www.sunrisediamonds.com Sunrise Diamonds plc Profit and Loss Account for the year ended 30th September 2006 Year ended Period ended 30 September 30 September 2006 2005 £ £ Exploration costs written off 22,213 39,942Administrative expenses 171,250 206,825Operating loss (193,463) (246,767) Interest receivable 14,254 7,675 Loss on ordinary activities before taxation (179,209) (239,092) Tax on loss on ordinary activities - - Loss for the year (179,209) (239,092) Loss per share - basic (pence) (0.20) (0.45) All amounts relate to continuing activities. There are no recognised gains and losses for the year other than those includedin the profit and loss account. Sunrise Diamonds plc Balance Sheet at 30th September 2006 2006 2006 2005 2005 £ £ £ £Fixed assetsIntangible assets 616,073 241,276 Current assetsDebtors 47,691 50,008Cash at bank and in hand 384,190 389,825 431,881 439,833 Creditors: amounts falling due within (100,315) (87,311)one year Net current assets 331,566 352,522 Net assets 947,639 593,798 Capital and reservesCalled up share capital 97,655 75,375Share premium account 1,268,285 757,515Profit and loss account (418,301) (239,092) Shareholders' funds 947,639 593,798 Sunrise Diamonds plc Cash Flow Statement for the year 30th September 2006 2006 2005 £ £ Net cash outflow from operating activities (178,142) (209,464) Returns on investment and servicing of financeInterest received 14,254 7,675 Net cash outflow from operating activities after returns on (163,888) (201,789)investments and servicing of finance Capital expenditure and financial investmentPurchase of intangible fixed assets (374,797) (241,276) Net cash outflow from capital expenditure and financial (374,797) (241,276)investment FinancingIssue of share capital (net of expenses) 533,050 832,890 Net cash inflow from financing 533,050 832,890 (Decrease)/Increase in cash (5,635) 389,825 Notes: 1 Publication of Non-Statutory Accounts The financial information set out in this announcement does not constitute theCompany's Statutory Accounts for the period ended 30 September 2006. Theauditors have reported on the 2006 accounts; their report is unqualified and didnot contain a statement under section 237 of the Companies Act 1985. TheStatutory Accounts for 2006 will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. 2 Reconciliation of movement in shareholders' funds 2006 2005 £ £ Loss for the year (179,209) (239,092) Shares issued during the year 535,075 857,500 Expenses of equity share issues (2,025) (24,610) Increase in shareholders' funds 353,841 593,798 Opening shareholders' funds 593,798 - Closing shareholders' funds 947,639 593,798 3 Reconciliation of operating loss to net cash outflow from operating activities 2006 2005 £ £ Operating loss (193,463) (246,767) Depreciation - - Decrease/(increase) in debtors 2,317 (50,008) Increase in creditors 13,004 87,311 Net cash outflow from operating activities (178,142) (209,464) 4 Reconciliation of cash flow to movement in net funds Cash at bank and in hand £ At 30 September 2006 384,190 At 1 October 2005 389,825 Decrease in cash in the year (5,635) Cash outflow from decrease in funds and lease - financing Cash inflow from decrease in liquid resources - Change in net funds resulting from cash flows (5,635) Movement in net funds in the year (5,635) Net Funds at 1 October 2005 389,825 Net funds at 30 September 2006 384,190 5 Dividend No dividend is proposed 6 Annual Report The Company's 2006 Annual Report will be published and sent to shareholders in due course and copies will be available to the public, free of charge, from the Registered Office of the Company at Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP for at least 30 days from the date of publication. 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