Last checked at 15 Dec 2011 07:00
SUNRISE RESOURCES PLC
("Sunrise" or "the Company")
15 December 2011
Results for the year ended 30 September 2011
The Board of Sunrise, the AIM-quoted diversified mineral exploration and development specialist, is pleased to announce today final results for the year ended 30 September 2011.
Key Points
·; Exploration focused on gold at Long Lake in Canada and white barite at Derryginagh in Ireland.
·; Objective is to develop a profitable mining operation at Derryginagh to support wider exploration efforts.
·; Drilling in progress at Derryginagh to evaluate resource potential.
·; White barite prices up circa 20% during the period under review as traditional Chinese supply continues to contract.
·; Diversified portfolio spreads risk - work to accelerate on Australian diamond project in 2012.
Commenting on today's results, Patrick Cheetham, Executive Chairman, said:
"It has been a challenging period for shareholders in 2010/11 as investor interest initially focused on the Long Lake project was adversely affected when the second round of drilling did not meet market expectations. This was accompanied by a wider and sharp decline in investor interest in junior mining stocks during 2011 as the Sovereign Debt Crisis continued to build.
In this environment the positive project and market developments at Derryginagh have not received the market attention I would like but I am nevertheless encouraged by results to date and in 2012 we expect feasibility studies to commence at Derryginagh and also for work to start at our exciting diamond prospect in Australia.
The Board believes that, at this stage in its development, a diversified portfolio spreads risk and we look forward to keeping shareholders informed of new developments.
Further information:
Sunrise Resources plc Tel: +44 (0) 845 868 4590
Patrick Cheetham, Executive Chairman
Northland Capital Partners Limited Tel: +44 (0)20 7796 8800
Gavin Burnell / Rod Venables
Charles Vaughan (Sales)
Yellow Jersey PR Limited Mobile: +44 (0)7768 537 739
Dominic Barretto
Chairman's Statement
I am pleased to report on the Company's progress for the year ended 30 September 2011, the first full year following our strategic project acquisitions in 2010 which resulted in a change of name to Sunrise Resources plc and a diversification of the Company's commodity interests into gold, base-metals and industrial minerals in Canada and Ireland.
Long Lake Project, Canada
During the year we extended our option agreement over the Long Lake gold mine, near Sudbury in Ontario, Canada. We also reported on two separate drilling programmes seeking extensions of the previously mined deposit which produced some 57,000 ounces of gold from high grade-ore during the first half of the 20th Century.
The first drill programme returned strong gold intersections and high expectations for the follow up drilling programme which, unfortunately, were not fully realised. Overall, the drilling suggests that the extent of near surface mineralisation is limited but we consider that the down dip continuation of the mineralised pipe remains a valid target. Further structural interpretation is required to better define this target as, so far, our drilling had found only minor gold mineralisation at depth.
A number of additional gold targets were tested during the year and extensive sampling was carried out on archived drill core from the E1 prospect, 350m south of the Long Lake gold mine. This sampling confirmed a number of high grade gold intersections at E1 but did not demonstrate the continuity of high grade mineralisation that has been suggested by earlier geophysical work.
Whilst gold has been the Company's prime target at Long Lake, Sudbury is the most productive nickel mining camp in the world having produced over 25% of the world's total nickel since 1883. The eastern half of the Long Lake claims covers a potential 10km long extension to the Copper Cliff offset dyke system which, further north, is host to a number of world-class copper-nickel-platinum group metal deposits, past and producing mines. Only one nickel target has been drill tested on this part of the claim block and further work is justified.
Derryginagh Barite Project, Ireland
In south-west Ireland the Company is targeting the production of white barite for use as industrial filler in paint and plastics.
There is a substantial market for white barite in Europe which has traditionally been supplied from China. However, the easily worked Chinese deposits are becoming exhausted and remaining reserves are being reserved for a growing domestic market. Sources of white barite are limited outside of China and so the Board believes that the Derryginagh deposit will be well positioned if a viable project can be demonstrated.
An important first milestone for the project, therefore, has been the completion in May 2011 of a positive concept study suggesting that a profitable underground mining operation could be developed at Derryginagh for an output of at least 50,000 tonnes per year of barite. This was based on initial estimates of mining and processing capital and operating costs and using published barite sales prices which have since risen by about 20%.
Following this study our programme of metallurgical testwork has continued with the objective to define a low cost gravity separation process for production of high-grade barite and a drilling programme is in progress to evaluate the resource potential of the barite vein.
A preliminary feasibility study is now warranted and will include further drilling and resource estimation.
Diamond Exploration in Australia & Finland
The Company's diamond projects have had a lower priority for expenditure in 2011 and the projects in Finland are on hold for the time being. The Cue exploration licence in Australia was granted during the year and work is budgeted for this project in 2012.
Financials
The audited financial statements for 2011 have been prepared in full compliance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
The Group reported a loss of £540,158 for the year (2010: £214,830).
In Conclusion
It has been a challenging period for shareholders in 2010/11 as investor interest initially focused on the Long Lake project was adversely affected when the second round of drilling did not meet market expectations. This was accompanied by a wider and sharp decline in investor interest in junior mining stocks during 2011 as the Sovereign Debt Crisis continued to build.
In this environment the positive project and market developments at Derryginagh have not received the market attention I would like but I am nevertheless encouraged by results to date and in 2012 we expect feasibility studies to commence at Derryginagh and also for work to start at our exciting diamond prospect in Australia.
The Company will also continue to seek additional project opportunities, especially where there is a commodity of geographical match to our existing activities. The Board believes that, at this stage in its development, a diversified portfolio spreads risk and we look forward to keeping shareholders informed of new developments.
Patrick Cheetham
Executive Chairman
14 December 2011
Sunrise Resources plc
Consolidated Income Statement
for the year ended 30 September 2011
2011 £ |
2010£ | ||
Pre-licence exploration costs | 965 | 27,398 | |
Impairment of deferred exploration cost | 268,284 | - | |
Administrative expenses | 274,772 | 188,633 | |
Operating loss | (544,021) | (216,031) | |
Interest receivable | 3,863 | 1,201 | |
Loss on ordinary activities before taxation | (540,158) | (214,830) | |
Tax on loss on ordinary activities | - | - | |
Loss on ordinary activities after tax | (540,158) | (214,830) | |
Loss for the year attributable to equity holders of the parent | (540,158) | (214,830) | |
Loss per share - basic and diluted (pence) | (0.18) | (0.10) |
All amounts relate to continuing activities.
Sunrise Resources plc
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2011
|
Group 2011 | Group 2010 |
£ | £ | |
| Loss for the year |
(540,158) |
(214,830) |
Foreign exchange translation differences on foreign currency | ||
net investments in subsidiaries | (12,668) | - |
| Comprehensive loss for the year attributable to equity holders of the parent |
(552,826) |
(214,830) |
Consolidated and Company Statement of Financial Position
at 30 September 2011
Group | Company | Group | Company | |
2011 | 2011 | 2010 | 2010 | |
£ | £ | £ | £ | |
Non-current assets | ||||
Intangible assets | 1,241,623 | 1,230,461 | 931,173 | 931,173 |
Investment in subsidiary | - | 26,992 | - | 12,969 |
1,241,623 | 1,257,453 | 931,173 | 944,142
| |
Current assets | ||||
Receivables | 40,605 | 40,605 | 22,807 | 22,807 |
Cash and cash equivalents | 696,338 | 696,338 | 340,512 | 340,512 |
736,943 | 736,943 | 363,319 | 363,319
| |
Current liabilities | ||||
Trade and other payables | (85,957) | (85,957) | (75,799) | (75,799) |
Net current assets | 650,986 | 650,986 | 287,520 | 287,520 |
Net assets | 1,892,609 | 1,908,439 | 1,218,693 | 1,231,662 |
Equity | ||||
Called up share capital | 312,739 | 312,739 | 248,866 | 248,866 |
Share premium account | 3,526,621 | 3,526,621 | 2,420,203 | 2,420,203 |
Share option reserve | 237,972 | 237,972 | 181,521 | 181,521 |
Foreign currency reserve | (12,668) | - | - | - |
Accumulated losses | (2,172,055) | (2,168,893) | (1,631,897) | (1,618,928) |
Equity attributable to owners of the parent | 1,892,609 | 1,908,439 | 1,218,693 | 1,231,662 |
Sunrise Resources plc
Consolidated and Company Statement of Cash Flows
for the year ended 30 September 2011
Group | Company | Group | Company | |
2011 | 2011 | 2010 | 2010 | |
£ | £ | £ | £ | |
|
|
|
|
|
Operating activity |
|
|
|
|
|
|
|
|
|
Operating loss | (544,021) | (541,160) | (216,031) | (203,062) |
Share based payment charge | 59,389 | 59,389 | 18,846 | 18,846 |
Shares issued in lieu of net wages | 24,016 | 24,016 | 19,092 | 19,092 |
Impairment charge | 267,996 | 267,996 | - | - |
(Increase)/Decrease in accounts receivable |
(17,798) |
(17,798) |
(610) |
(610) |
Increase/(Decrease) in accounts payable | 10,158 | 10,158 | 9,374 | 9,374 |
| ||||
Net cash outflow from operating activity |
(200,260) |
(197,399) |
(169,329) |
(156,360) |
| ||||
Investing activity | ||||
| ||||
Interest received | 3,863 | 3,863 | 1,201 | 1,201 |
Purchase of intangible fixed assets | (581,384) | (570,222) | (128,637) | (128,637) |
Loan to subsidiary | - | (14,023) | - | (12,969) |
| ||||
Net cash outflow from investing activity |
(577,521) |
(580,382) |
(127,436) |
(140,405) |
| ||||
Financing activity | ||||
|
|
|
|
|
Issue of share capital (net of expenses) | 1,146,275 | 1,146,275 | 350,000 | 350,000 |
|
|
|
|
|
Net cash inflow from financing activity | 1,146,275 | 1,146,275 | 350,000 | 350,000 |
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
368,494 |
368,494 |
53,235 |
53,235 |
|
|
|
|
|
Cash and cash equivalents at start of year |
340,512 |
340,512 |
287,277 |
287,277 |
Exchange differences | (12,668) | (12,668) | - | - |
|
|
|
|
|
Cash and cash equivalents at 30 September |
696,338 |
696,338 |
340,512 |
340,512 |
NOTES
1. Accounting policies
The financial statements have been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS), as adopted by the European Union. They have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.
The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. These projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company's and Group's planned discretionary project expenditures and to maintain the Company and Group as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company's ability to continue as going concerns and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.
2. Publication of Non-Statutory Accounts
The financial information set out in this announcement does not constitute the Company's Statutory Accounts for the period ended 30 September 2011 or 2010. The financial information for 2010 is derived from the Statutory Accounts for 2010. Full audited accounts in respect of that financial period have been delivered to the Registrar of Companies.
The Statutory Accounts for 2011 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditor has reported on the 2011 and 2010 accounts. The 2011 accounts did not contain a statement under the Companies Act 2006 s498(2) or (3), and the 2010 accounts did not contain a statement under the Companies Act 1985 s237(2) or (3), and both received an unqualified audit opinion. However there was an emphasis of matter in relation to a requirement that the Company raise funds in the future to continue as a going concern.
3. Loss per share | ||
Loss per share has been calculated on the loss and the weighted average number of shares in issue during the year. | ||
2011 |
2010 | |
Loss (£) | (540,158) | (214,830) |
Weighted average shares in issue (No.) | 301,225,242 | 223,364,525 |
Basic and diluted loss per share (pence) | (0.18) | (0.10) |
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.
4. Dividend
The directors are unable to recommend the payment of any ordinary dividend.
5. Annual Report
The Company's 2011 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 and will be downloadable from the Company's website at www.sunriseresourcesplc.com.