Sunrise Res Regulatory News (SRES)

14 Jan 2008 14:00

Sunrise Diamonds PLC14 January 2008 SUNRISE DIAMONDs PLC Announcement of audited Financial statements FOR THE PERIOD ENDED 30 SEPTEMBER 2007 Chairman's Statement I am pleased to announce the audited Financial Statements for the year ended 30September 2007. The Company has completed its second full year of exploration in Finland'sKarelian Craton and significant progress can be reported. The diamondcredentials of our target areas are exemplified by the world-class Lomonosovdiamond mining complex being developed by Alrosa on the Russian side of theKarelian Craton as well as by our own new kimberlite discoveries in Finland. Through joint venture agreements and our own exploration success we havedeveloped our project portfolio to include advance projects where the potentialof a number of diamondiferous kimberlites is being evaluated and a large numberof earlier stage projects having the potential for new diamond discoveries. Thediscovery process is enhanced by the Company's agreement with BHP Billiton, anoption holder in the Company, which gives us exclusive rights to BHP Billiton'sdiamond exploration database for Finland. This includes valuable countrywidegeochemical and geophysical databases which are now being utilised. Nordic Diamonds JV In 2006 we acquired the right to earn a joint venture interest from Canada'sNordic Diamonds Ltd ("Nordic") in a parcel of claims covering the majority ofthe 20 kimberlites that were discovered by Ashton Mining and its partners in the1990's in the Kaavi-Kuopio area of south central Finland. Three of the kimberlite bodies have been shown by bulk sampling to have gradesbetween 15 and 26 carats per hundred tonnes. Whilst individually these pipes maybe too small for development, they may have commercial potential to provide feedfor a central processing plant and so work in 2007 has focused on the evaluationof other known diamondiferous kimberlites which could help justify such adevelopment. Three further kimberlites were drill tested in the autumn of 2007and samples are currently being evaluated for their diamond content with resultseagerly awaited. The Nordic Diamonds JV also includes numerous untested diamond targets - forexample, Target 295 where we have narrowed the search area for kimberlitefragments and microdiamond discovered last year, where the source remainstantalisingly close but, so far, elusive. Regional Exploration Our regional exploration activity has continued at a fast pace with work havingtaken place during the year on numerous target areas, mostly generated from theBHP Billiton geochemical database where kimberlite indicator mineral anomalieshave been found in the past but not followed-up. On a number of these targets positive confirmation of anomalies has been madeduring 2007 and follow up work is now in progress. A particular focus has beenTarget 298 where a large number of diamond bearing boulders have been discoveredduring the year and where the hunt is continuing for the source. Significant progress has also been made with the BHP Billiton geophysicaldatabase where the Company has been applying interpretation techniques andcomputing power not available when the data was collected and last interpreted.As a result, numerous targets have been generated for drill testing. Diamond Market Our exploration is taking place against a background of strong diamond marketfundamentals. The trend towards a shortage of rough diamonds continued throughthe year as world diamond production levelled off and demand increased. Thismarket imbalance is expected to see diamond prices for all sizes and qualitiescontinue their longer-term upward trend. Results for the Period The Group is reporting a loss of £212,621 for the year ending 30 September 2007(2006: £181,154 as restated). This comprises interest receipts of £18,961,administration expenses of £191,335 and reconnaissance costs of £43,305. In Conclusion Finland is highly prospective for diamonds, politically stable and relativelycheap to explore and few junior companies with our relatively low levels offunding have such active diamond exploration programmes. The Company hasscheduled a busy winter drilling programme and I look forward to reportingfurther progress during 2008 towards our objective of discovering economicdiamond deposits. Patrick L CheethamExecutive Chairman14 January 2008 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 Brett Miller/Roxane Marffy, Ruegg & Co. Limited. Tel: +44 (0)20- 7584-3663 Web-site: www.sunrisediamonds.com Sunrise Diamonds plc Consolidated Profit and Loss Account for the year ended 30th September 2007 Group & Company Group As restated Year ended Year ended 30 September 30 September 2007 2006 £ £ Exploration costs 43,305 22,213Administrative expenses 191,335 173,195 Operating loss (234,640) (195,408) Interest receivable 18,961 14,254 Loss on ordinary activities before taxation (215,679) (181,154) Tax on loss on ordinary activities - - Loss on ordinary activities after tax (215,679) (181,154) Minority interests 3,058 - Loss for the year (212,621) (181,154) Loss per share - basic and diluted (pence) (0.18) (0.21) 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 Sheets at 30th September 2007 Group & Group Company Company As restated 2007 2007 2006 £ £ £Fixed assetsIntangible assets 986,355 986,355 632,806Investments - 64 - 986,355 986,419 632,806 Current assets Debtors 309,042 324,386 47,691Cash at bank and in hand 455,930 455,930 384,190 764,972 780,316 431,881 Creditors: amounts falling due within one (206,019) (190,856) (100,315)year Net current assets 558,953 589,460 331,566 Net assets 1,545,308 1,575,879 964,372 Capital and reserves Called up share capital 138,867 138,867 97,655Share premium account 1,959,723 1,959,723 1,217,562Other Reserves 82,636 82,636 69,401Profit and loss account (632,867) (605,347) (420,246) Shareholders' funds 1,548,359 1,575,879 964,372 Equity minority interests 3,051 - - Total Capital Employed 1,545,308 1,575,879 964,372 Sunrise Diamonds plc Consolidated Cash Flow Statement for the year 30th September 2007 Group & Group Company As restated 2007 2006 £ £ Net cash outflow from operating activities (127,052) (178,142) Returns on investment and servicing of financeInterest received 18,961 14,254 Net cash outflow from operating activities after returns (108,091) (163,888)on investments and servicing of finance Capital expenditure and financial investment Purchase of intangible fixed assets (353,549) (374,797) Net cash outflow from capital expenditure and financial (353,549) (374,797)investment Financing Issue of share capital (net of expenses) 533,373 533,050 Issue of shares in subsidiary to minority interests 7 - Net cash inflow from financing 533,380 533,050 Increase/(Decrease) in cash 71,740 (5,635) 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 2007 or 2006. Thefinancial information for 2006 is derived from the Statutory Accounts for 2006as amended by the adoption of FRS20. The financial information set out in thisstatement relating to the period ended 30 September 2006 does not constitutestatutory accounts for that period. Full audited accounts in respect of thatfinancial period prior to the adoption of FRS20 have been delivered to theRegistrar of Companies. The Statutory Accounts for 2007 will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. The auditors have reported onthe 2006 and 2007 accounts. They did contain a statement under Section 237(2) or(3) of the Companies Act 1985 and received an unqualified audit opinion. Howeverthere was an emphasis of matter in relation to the availability of projectfinance. In common with many exploration companies, the Company raises financefor its exploration and appraisal activities in discrete tranches. Furtherfunding is raised as and when required. When any of the Group's projectsprogress to the development stage, specific financing will be required. The Directors are satisfied that the Group has adequate resources to continue tooperate for the foreseeable future. For this reason they continue to adopt the"going concern" basis for preparing the accounts. Prior year adjustmentsThe Company has applied the requirements of FRS20 (share based payments) in accordance with the transitional provisions to all relevant equity instruments granted after 7 November 2002 and unvested at 1 October 2005. The Company issues share based payments to directors and to employees of the Company providing its management services (Tertiary Minerals plc). All share based payments are measured at fair value at the date of grant and expensed on a straight line basis over any vesting period, based on the Group's estimate of shares that will eventually vest. Fair value is measured by use of a model based on the Black-Scholes-Merton valuation method. The expected life of the instrument used in the model is adjusted, based on the Company's best estimate, for the effects of any exercise restrictions and behavioural considerations. The adoption of FRS20 has resulted in a charge to the Profit & Loss Account of £13,235. A prior year adjustment has been made to the financial information set out for the year ended 30 September 2006 (£1,945) to apply charges to the Profit and Loss Account for share options granted or becoming vested in this period. This has no impact on the net assets of the Company. In December 2005 the Company issued options as a minor part of the consideration for the acquisition of rights to the BHP Billiton diamond exploration database for Finland. As the main consideration comprised various reciprocal rights it is difficult to isolate and reliably estimate the value of the option part-consideration other than by assessing the fair value of these options. Consequently the intangible assets have been increased during the year ended 30 September 2006 and subsequent accounting periods by £16,733. FRS25 - Financial Instruments In January 2006 the Company issued 17,777,778 free warrants exercisable at 3.5pas part of a share placing. The fair value of these warrants is estimated at£50,723 and this amount has been re-assigned from the Share Premium Reserve tothe Option Reserve and a prior year adjustment has been made accordingly. +--+---------------------------------------------------+-----------+-----------+|2.|Loss per share | +--+---------------------------------------------------+-----------+-----------+| | | +--+---------------------------------------------------+-----------+-----------+| |Loss per share has been calculated on the loss and the weighted average | |number of shares in issue during the year. +--+---------------------------------------------------+-----------+-----------+| | | | Group &|| | | | || | | | Company|| | | | || | | Group|As restated|| | | | || | | 2007| 2006|+--+---------------------------------------------------+-----------+-----------+| | | | |+--+---------------------------------------------------+-----------+-----------+| |Loss (£) | (212,621)| (181,154)|+--+---------------------------------------------------+-----------+-----------+| |Weighted average shares in issue (No.) |115,389,993| 87,750,156|+--+---------------------------------------------------+-----------+-----------+| | | | |+--+---------------------------------------------------+-----------+-----------+| |Basic and diluted loss per share (pence) | (0.18)| (0.21)|+--+---------------------------------------------------+-----------+-----------+ 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 not dilutive under the terms of |FRS14. |+--+----------------------------------------------------------------------------+ 3. Reconciliation of movement in shareholders' Group Company Company funds As restated 2007 2007 2006 £ £ £ Loss for the year (212,621) (185,101) (181,154) Shares issued during the year 824,495 824,495 535,075 Expenses of equity share issues (41,122) (41,122) (2,025) FRS20 Share based payments 13,235 13,235 18,678 Increase in shareholders' funds 583,987 611,507 370,574 Opening shareholders' funds 964,372 964,372 593,798 Closing shareholders' funds 1,548,359 1,575,879 964,372 4. Reconciliation of operating loss to net cash outflow from operating activities Group Company As restated 2007 2006 £ £ Operating loss (234,640) (195,408) Non-cash movement in reserves 13,235 1,585 Decrease/(increase) in debtors (11,351) 2,317 Increase in creditors 105,704 13,004 Net cash outflow from operating activities (127,052) (178,142) 5. Reconciliation of cash flow to movement in net funds Cash at bank and in hand £ At 30 September 2007 455,930 At 1 October 2006 384,190 Decrease in cash in the year 71,740 Change in net funds resulting from cash flows 71,740 Movement in net funds in the year 71,740 Net Funds at 1 October 2006 384,190 Net funds at 30 September 2007 455,930 6. Dividend No dividend is proposed 7. Annual Report The Company's 2007 Annual Report will be published and sent to shareholders indue course and copies will be available to the public, free of charge, from theRegistered Office of the Company at Sunrise House, Hulley Road, Macclesfield,Cheshire, SK10 2LP for at least 30 days from the date of publication and will bedownloadable from the Company's website at www.sunrisediamonds.com This information is provided by RNS The company news service from the London Stock Exchange