Sunrise Resources PLC Regulatory News (SRES)

8 Dec 2008 11:40



SUNRISE DIAMONDs PLC 

Announcement of audited Financial statements FOR THE PERIOD ENDED

 30 SEPTEMBER 2008

Chairman's Statement 

I am pleased to present the Company's audited Financial Statements for the year ended 30 September 2008.

The Company's diamond exploration in Finland has progressed satisfactorily for most of this past year and, in particular, pleasing progress has been made in the further grade evaluation of kimberlites under our control. On the claims where we are earning a joint venture interest from Nordic Diamonds Inc., sampling of Kimberlite 17 has indicated diamond grades of economic interest and drilling on Kimberlite 14 suggests that it has not yet been fully delineated and that it is more extensive than first thought.

Through our exclusive access to the BHP Billiton exploration database for Finland we have also continued to delineate a number of very exciting kimberlite targets in the lake covered areas of Kaavi-Kuopio where only limited testing has taken place in the past.

Outside of Finland, our ambitions to expand the Company's diamond exploration activities have been frustrated by the extended application process in our target country but we maintain an application for diamond exploration rights which, if granted, could be an important future focus for the company.

In normal circumstances I would have expected the Company's exploration progress to translate to a rewarding year for shareholders, but our wings have been clipped, not only by recent global financial events, but also by a longer running and progressive deterioration of investor interest in the diamond exploration sector in general.

Before the recent financial crisis and market crash, the past few years have seen a mining boom driven by a seemingly unrequited appetite for commodities in China, India and other developing countries. This real demand has driven a speculative bubble in commodities that has now burst. However, diamond exploration companies were largely sidelined during the boom despite rough diamond prices rising by more than 70% since the year 2000. There are a number of reasons for this. Compared to base and precious metals, the diamond market is opaque, with fewer opportunities for price speculation. A commercial diamond discovery cannot be indicated without expensive bulk sampling, and the lead time to production can be long. Despite this, the potential rewards for a successful development in the diamond business are high and investor interest will undoubtedly return to the sector in the future.

When stock markets crash, as they have globally in the past few months, all companies are affected. Recognising the difficulties facing exploration companies in particular, the Board is now keeping all further exploration expenditure under review and we have reduced administration costs from an already low base. All directors are taking their remuneration in shares and warrants rather than in cash.  

In the immediate future the Company will, where possible, look to industry rather than the markets to help finance its diamond exploration ambitions and will seek further arrangements of the type struck earlier this year with Mantle Diamonds to capitalise on the value of its investment in Finland to date and the value of its databases.

Given the decline in investor interest in diamond exploration companies the Board will, in future, consider opportunities in a broader range of commodities.

In September 2008 the Company made a small placing of shares which means that the Company is, after its cost cuts, able to continue operating for the foreseeable future whilst maintaining its project interests and seeking new opportunities. 

During the year we have secured a trading platform on PLUS Markets and, whilst our AIM trading facility is unaffected, it gives investors further choice and will lead, we hope, to increased trading liquidity once markets recover.

Financials

The Group Financial Statements for 2008 have been prepared for the first time in full compliance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and includes a greater level of disclosure. 

The Group is reporting a loss of £640,433 for the year (2007: £212,621).

In Conclusion

Although the world economic outlook is stormy, the Company's directors have weathered such storms in the past and I am confident that we will do so again. I would like to thank my fellow directors and shareholders for their support in 2008. 

Patrick L Cheetham

Executive Chairman

8 December 2008

Further Information:

Patrick Cheetham, Sunrise Diamonds plc. Tel: +44 (0)1625-505947. 

Brett Miller/Roxane Marffy, Ruegg & Co. Limited. Tel: +44 (0)20- 7584-3663

Web-site: www.sunrisediamonds.com

   Sunrise Diamonds plc

Consolidated Income Statement

for the year ended 30 September 2008

All amounts relate to continuing activities.

  Sunrise Diamonds plc

Statements of Total Recognised Income and Expense

for the year ended 30 September 2008

  Sunrise Diamonds plc

Balance sheets

at 30 September 2008

  Sunrise Diamonds plc

 Cash Flow Statements

for the year ended 30 September 2008

  1. Accounting Policies

The financial information set out in this announcement has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRSs), as adopted by the European Union, and their interpretations adopted by the International Accounting Standards Board (IASB). The Company has reviewed the accounting policies set out in the Company's financial statements for the year ended 30 September 2007, which were prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Consequently the opening IFRS balance sheet contains adjustments made to the amounts reported previously in financial statements prepared since the transition date to IFRS, 1 October 2006.

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. On the basis of these projections, which include the proceeds of future fundraising, the directors continue to adopt the "going concern" basis for preparing the accounts.

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 2008 or 2007. The financial information for 2007 is derived from the Statutory Accounts for 2007 and amended by the adoption of IFRSs. Full audited accounts in respect of that financial period prior to the adoption of IFRSs have been delivered to the Registrar of Companies. 

The Statutory Accounts for 2008 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on the 2008 and 2007 accounts. They did not contain a statement under Section 237(2) or (3) of the Companies Act 1985 and 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.

4. Dividend

No dividend is proposed.

5. Annual Report

The Company's 2008 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.sunrisediamonds.com.