Sunrise Res Regulatory News (SRES)

16 Dec 2005 08:00

Sunrise Diamonds PLC16 December 2005 SUNRISE DIAMONDS PLC ANNOUNCEMENT OF AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2005 Chairman's Statement I have great pleasure in presenting your Company's first Annual Report andFinancial Statements for the period ended 30 September 2005 - a period of verypleasing progress. Foundations The foundations for the Company were laid when Tertiary Minerals plc("Tertiary") initiated diamond exploration in the Kuusamo area of Finland in May2004. This led to the discovery of two new kimberlites at Kalettomanpuro andKattaisenvaara, in what is now known as the Kuusamo kimberlite cluster. SunriseDiamonds plc ("Sunrise") was formed in February 2005 to continue this diamondexploration. After an oversubscribed entitlement issue to the shareholders ofTertiary and a subsequent placing, Sunrise was admitted to trading on the AIMmarket of the London Stock Exchange in June 2005. Exploration Success The Kuusamo kimberlite cluster sits centrally in the diamond prospective area ofthe Karelian Craton, a major geological block that includes the Russian diamondfields at Arkhangelsk where Alrosa is currently developing the world's secondlargest diamond mining complex. Since initiating exploration, in June 2005, Sunrise has made an early and highlysignificant breakthrough with the discovery of two further kimberlites at athird locality and the recovery of micro-diamonds from one of these kimberlitesat Anomaly 45. This has vindicated the Company's exploration strategy byconfirming the diamond prospectivity of the Kuusamo cluster that, until then,was only inferred from the favourable indicator mineral chemistry of thekimberlites. Sunrise's summer exploration campaign also included furtherkimberlite targeting and a programme of follow-up till-sampling which defined anumber of exciting drill targets which are now being drill tested. I amconfident that more kimberlite discoveries will be made in the Kuusamo area. BHP Billiton Database Acquisition A further exciting development has been the recent announcement of theacquisition from BHP Billiton of its entire diamond exploration database forFinland. This represents the results of over 6 years of exploration work inFinland by BHP Billiton subsidiary Dia Met Minerals Ltd and has an estimatedreplacement value of over US$10 million. This acquisition gives the Company a major leap forward in exploration, not onlyin the Kuusamo area, but elsewhere in the Karelian Craton of Finland wherediamondiferous kimberlites are known to occur - for example, in the Kaavi-Kuopioarea. The deal with BHP Billiton involves an issue of options to BHP Billitonand a first right of refusal on future project joint ventures or disposals anddiamond marketing agreements. Strategy Exploration in Finland remains the Company's main focus, but during thereporting period several diamond project opportunities have been evaluatedelsewhere in the world and the Company will continue to evaluate such projectsif they have the potential to increase shareholder value. The diamond exploration business is heating up in Finland with progress beingreported by a number of different companies and this is expected to increaseinvestor focus on Finland in the coming months. Diamond Market The Company's activities are taking place against a background of strong demandand strong prices for rough diamonds. A shortage of "rough" has led tosignificant price rises in recent years as a result of increased demand fromChina and India and a depletion of De Beers' traditional stockpiles. Results for the Period The Company is reporting a loss of £239,092 for the period. This comprisesinterest receipts of £7,675, administration expenses of £206,825 andreconnaissance expenses of £39,942. In Conclusion Your Company is now well positioned for further growth, with an experienced andenthusiastic Board and the management skills needed to unlock the value of theBHP Billiton exploration database and advance its diamond exploration projectsin Finland. I look forward to reporting progress over the coming year. Patrick L. Cheetham 15 December 2005Executive 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 period ended 30th September 2005 2005 £ Exploration costs written off 39,942Administrative expenses 206,825 --------- Operating loss (246,767) Interest receivable 7,675 Loss on ordinary activities before taxation (239,092) --------- Tax on profit on ordinary activities - Loss for the period (239,092) --------- Loss per share - basic (pence) (0.45) --------- All amounts relate to continuing activities. There are no recognised gains and losses for the period other than thoseincluded in the profit and loss account. Sunrise Diamonds plc Balance Sheet as at 30th September 2005 2005 2005 £ £Fixed assetsIntangible assets 241,276 Current assets Debtors 50,008Cash at bank and in hand 389,825 -------- 439,833 Creditors: amounts falling due within one year 87,311 -------- Net current assets 352,522 -------- Creditors: amounts falling due after more than one year - -------- Total assets less current liabilities 593,798 -------- Capital and reserves Called up share capital 75,375Share premium account 757,515Profit and loss account (239,092) -------- Shareholders funds 593,798 -------- Sunrise Diamonds plc Cash Flow Statement for the period ended 30th September 2005 2005 £ Net cash outflow from operating activities (209,464) Returns on investment and servicing of finance 7,675Interest received -------- Net cash outflow from operating activities after returns oninvestments and servicing of finance (201,789) -------- Capital expenditure and financial investment Purchase of intangible fixed assets (241,276) --------Net cash outflow from capital expenditure and financial investment (241,276) -------- Financing --------Issue of share capital (net of expenses) 832,890Exchange differences - -------- Net cash inflow from financing 832,890 -------- Increase in cash 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 2005. Theauditors have reported on the 2005 accounts; their report is unqualified anddid not contain a statement under section 237 of the Companies Act 1985. TheStatutory Accounts for 2005 will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. 2. Share capital 2005 2005 Number £ Authorised Ordinary shares of 0.1p each 2,000,000,000 2,000,000 Redeemable preference shares of £1 each 30,000 30,000 ---------- ----------- 2,000,030,000 2,030,000 ---------- ----------- Allotted, called up and fully paid Ordinary shares of 0.1p each 75,375,000 75,375 ---------- ----------- 75,375,000 75,375 ---------- ----------- During the period to 30 September 2005 the following share issues took place: An issue of two 1p ordinary shares on incorporation (14 February 2005) Sub-division of each 1p ordinary share into ten 0.1p ordinary shares (28February 2005) An issue of 19,999,980 0.1p ordinary shares at 0.75p for a total considerationof £149,999.85 (28 February 2005) An issue of 30,000 £1 redeemable preference shares, quarter paid (4 March 2005).These were fully paid up and then redeemed at par on 18 May 2005. An issue of 40,000,000 0.1p ordinary shares at 1p per share for a totalconsideration of £400,000 (5 May 2005). A placement of 15,375,000 0.1p ordinary shares at 2p per share for a totalconsideration of £307,500 (6 June 2005). 3. Warrants granted Unexercised warrants Issue date Exercise price Number Exercisable Expiry dates 06/06/05 0.02p 4,500,000 Any time before 06/06/10 expiry 06/05/05 0.03p 7,687,500 Within 12 months at 06/06/10 0.03p, or 0.05p between 12 and 24 months at 0.05p Warrants are issued for nil consideration and are exercisable as shown. Warrantsare exchangeable on a one for one basis for each ordinary share of 0.1p at theexercise price on the date of conversion. 4. Reconciliation of movement in shareholders' funds 2005 £ Loss for the period (239,092) Shares issued during the period 857,500 Expenses of equity share issues (24,610) ----------- Closing shareholders funds 593,798 ----------- 5. Reconciliation of operating loss to net cash outflow from operating activities 2005 £ Operating loss (246,767) Depreciation - Increase in debtors (50,008) Increase in creditors 87,311 ----------- Net cash outflow from operating activities (209,464) ----------- 6. Reconciliation of cash flow to movement in net funds Cash at bank and in hand Total £ £ Increase in cash in the period 389,825 389,825 Cash outflow from decrease in funds and lease - - financing Cash inflow from decrease in liquid resources - - ----------- ----------- Change in net funds resulting from cash flows 389,825 New finance leases - ----------- Movement in net funds in the period 389,825 ----------- 7. Post balance sheet event On 13 December 2005, as a result of the agreement reached with BHP CanadaDiamonds Company, the Company issued a 5 year option to BHP Billiton WorldExploration Inc to acquire 5 million Sunrise Diamonds shares at 5p each 8. Dividend No dividend is proposed 9. Annual Report The Company's 2005 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 or from Sunrise Diamonds plc, Sunrise House,Hulley Road, Macclesfield, Cheshire, SK10 2LP for at least 30 days from the dateof publication. This information is provided by RNS The company news service from the London Stock Exchange