Sirius Minerals Regulatory News (SXX)

22 Nov 2005 07:02

Sirius Exploration plc22 November 2005 22 November 2005 Sirius Exploration plc Interim Results for the Period MACEDONIA COPPER PROSPECTS SHOW FURTHER PROMISE • Drilling at Kadiica Indicates Continuity of Copper Enriched Blanket• Heart Of Porphyry System Now Being Drill Targeted• Osogovo Testing Awaits Results From Magnetic Survey And Hole 5• Sirius In Active Talks On New Property Acquisitions Sirius Exploration plc ("Sirius" or "the Group"), a company listed on AIM, todayannounces its interim results for the six months ended 30 September 2005. SIRIUS EXPLORATION PLC REVIEW OF PROGRESS ANDRESULTS FOR THE HALF YEAR ENDED 3O SEPTEMBER 2005 CHAIRMAN'S REVIEW Your company listed on AIM on 1st August 2005 raising a total of £584.937 at 5pper share with 1 warrant at 5p for every for 4 shares subscribed. This fundingis sufficient to complete the agreed exploration programs on our two propertiesin Macedonia and cover investigation of additional prospects. Currently, the company has two copper prospects: Osogovo and Kadiica located inMacedonia. These are held in a joint venture with Phelps Dodge. A detailedreview of the exploration program undertaken this year is set out in theManaging Director's report. We know from previous exploration that bothprospects contain copper mineralisation and our exploration objective is toprove if either contains economic quantities for Phelps Dodge or Sirius toexploit. The exploration program is broadly on target although we only expect to complete3 of the planned drill holes at Kadiica before the weather precludes furtherexploration for this season. Nonetheless we and Phelps Dodge believe that thedata from both Kadiica and Osogovo will be sufficient from the currentexploration program to form conclusions for further exploration in line withplan. In addition to the Macedonian prospects we are actively pursuing a policy ofproperty acquisition, both for stand-alone exploration and also for jointventures. Your company's directors are exploiting their considerable experienceand contacts to access suitable opportunities. During the half-year, over 20opportunities have been evaluated involving both base and precious metals and inareas including southern Africa, Australia, Brazil, The United States, Canada,Europe and countries of the FSU. Discussions have taken place with individualprospectors, junior companies and a number of the majors. We are currently in active negotiation on base metals, gold and diamondproperties in Europe and Africa with two of the world's top ten miningcompanies. We have every hope of bringing attractive new exploration projectsinto our portfolio in the near future. Richard Poulden22 November 2005 MANAGING DIRECTOR'S EXPLORATION REVIEW Your company is currently involved in two active exploration projects - thejoint ventures with the Phelps Dodge Corporation ("PD") at Kadiica and Osogovoin eastern Macedonia. These lie some 50km apart within the well-establishedBalkan porphyry trend which includes the Bor district in Romania, the Assarel,Chelopech and other deposits in Bulgaria and the Sukrupasa and Ikiztepe systemsin the Turkish Thrace. The Buchim deposit, currently Macedonia's only coppermine, is not far from the two project areas. Active exploration projects innorthern and eastern Greece are currently adding to the list of sizeableporphyry systems within this important trend. The Kadiica and Osogovo targets were recognised by PD from their leached caps,outcropping stockworks and breccias and, in the case of Osogovo, the adjoininglead-zinc-silver skarns of the now closed Sasa Toranitza mines. PD receivedexploration permits for these two properties in 2001 and initiated a programmeof preliminary mapping and surface sampling followed by the drilling of 4 holesat Osogovo and 8 at Kadiica. The former indicated that a large porphyry systemwas present and that it was mineralised over considerable intervals (155m of0.1% Cu in hole 2 and 388m of 0.13% Cu in hole 4). The Kadiica holesdemonstrated not only the existence of porphyry mineralisation but also of apotentially important supergene enrichment blanket. The joint venture with Sirius was established to follow up on these results anddetermine whether or not there was a target large enough to interest PD orSirius at either site. Should such a target be confirmed, your company willrecoup twice its exploration costs and retain a 2% net smelter return ("NSR") inperpetuity. In the absence of such a target, Sirius will own the explorationrights outright, leaving PD with a 1% NSR. Both targets are in areas which have good access with power and water available. Kadiica Surface mapping has indicated that the porphyry intrusions are complex andpossibly multi-phase. We felt that it was important to establish which phase wasthe mineraliser and eliminate the possibility of significant internal dilutionby post-ore plugs. With our partners we therefore undertook a ground magneticsurvey over the entire complex. This showed the dimension of the magnetic lowconcomitant with alteration and mineralisation to cover the entire 2km2 area ofPD's primary drilling and to be open to the north and east. Further, it showedno internal disruptions by post-ore intrusives. From this, we can now concludeboth that the alteration and mineralisation may be continuous between theearlier drill holes and that the enrichment blanket may also exhibit similarcontinuity. Following the interpretation of the magnetic survey, a programme of 6 drillholes was planned with the objective of identifying the heart of the primaryporphyry mineralisation and testing the grade and continuity of the enrichmentblanket. It should be pointed out that the area between the earlier drill holesis large enough to contain a substantial tonnage of contained copper at a gradeof possibly 1%. Hole 9 was completed at 431m in early October. It remained in the marginalalteration facies and outer stockwork of porphyry style mineralisation, cuttingboth the acid intrusive itself and amphibolitic wall rocks. Hypogene grades ofaround 0.1% are concomitant with this interpretation. However the enrichedblanket intersected in the upper parts of the hole consisted of 63m of 0.27% Cu.This compares favourably with 62m of 0.36% (including 21m of 0.77%) at nearbyhole 1. To the west hole 5 contains 77m @0.1% and to the south hole 8 contains70m @ 0.16%. These four holes therefore define the southern limits of theenrichment blanket which seems to contain a coherent c60m @ c0.3% Cu. (Holes 1and 9 are some 200m apart). Hole 10 has just been completed at 263m, having been stopped in magnetite-pyritestockwork akin to the barren potassic section of a porphyry system. It passedthrough weak stockwork Cu Mo mineralisation. Your company therefore feels thatthe hole passed through the potential mineralised zone into its barren portions.A supergene enrichment blanket of comparable thickness was intersected butassays are awaited. Hole 10 is 250m north of hole 2 (116m @0.27% Cu) and 900mnorth of holes 1 and 9. Holes 9 and 10 therefore substantiate the earlier drilling but have not yetintersected the heart of the porphyry mineralisation. They do however indicatethe continuity of the enrichment blanket, which remains open to the north andeast. Hole 11 is currently being collared some half way between 9 and 10targeting not only the heart of the mineralisation. The enrichment blanket is now known to cover an area of some 1.9km2. Thepiercement points show sufficient similarity for continuity between holes to bea reasonable expectation. This is justified by the smooth magnetic signatureover this area. The enrichment blanket seems to have a main portion of at least50m thickness and at a grade of at least 0.2% Cu. Drill targets remaining include not only infill of the enrichment blanketbetween the widely spaced current piercement points but also some small soilgold geochemical anomalies in areas of intense acid sulphate alteration withinthe boundaries of the mineralised system. Osogovo The outline of the mineralised system has been indicated by mapping whichlocated both breccia containing mineralised clasts and widespread stockwork,some of which is significantly mineralised with copper and molybdenum. Thedeeper workings on the Sasa and Toranitza mines also intersected mineralisedporphyry sills characteristic of the flanks of an intrusive centre. In addition,as the workings in the Sasa mine approach the intrusion, grades ofzinc-lead-silver mineralisation fall while those of copper rise. The four early holes drilled by PD substantiated these conclusions and definedthe target core area beneath the well-mineralised stockwork outcrops. The dip and precise location of the contacts of the porphyry are unknown and thetransition from stratiform to massive skarn could occur where the Sasa marblesintersect the porphyry. Consequently your company has commissioned anorientation ground magnetic survey extending outwards from the mineralisedintrusive over the Sasa workings. Calibration data is available from both theseworkings and hole 7 drilled by Sasa Mines close to the property boundary (16m of1.7% Cu and 40gpt Ag including 6.1M @ 3.5% Cu). This survey is currentlyunderway and should define the margins of the mineralised porphyry and possiblemassive skarns. Hole 5 is drilling beneath the outcropping Cu-Mo stockwork between earlier holes2 (155m @ 0.1% Cu including 37m @ 0.16%) and 4 (388m @ 0.13% Cu including 30m @0.3%). It was in mineralised stockwork at 389m at last report (planned 650m). Further drilling will await the results of the magnetic survey and Hole 5becoming available and properly assessed. However, your company feels that thereis high potential for both porphyry and skarn mineralisation in this largesystem in which extensive areas remain untested. Dr Nicholas Badham21 November 2005 For further information: Sirius Exploration plcRichard Poulden Tel: 01453 511900Nick Badham Tel: 01264 811121The City of London GroupRon Marshman Tel: 0207 628 5518John Greehnalgh www.siriusexploration.com CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 30 SEPTEMBER 2005 Unaudited Unaudited Audited Six months Six months Period ended ended ended 30 September 30 September 31 March 2005 2004 2005 £ £ £ Turnover - - - Administrative expenses (127,100) - (272,766) ---------- ---------- ---------- Operating loss (127,100) - (272,766) Interest receivable 1,107 - 234 ---------- ---------- ---------- Loss on ordinary activitiesbefore taxation (125,993) - (272,532) Tax on loss on ordinary - - -activities ---------- ---------- ---------- Loss for the financial period (125,993) - (272,532) ========== ========== ========== Loss per ordinary share Basic loss per share (pence) (0.03) (0.00) (15.00) ========== ========== ========== CONSOLIDATED BALANCE SHEET as at 30 SEPTEMBER 2005 Unaudited Unaudited Audited 30 September 2005 30 September 2004 31 March 2005 £ £ £ Fixed assetsIntangible assets 260,562 - 147,600 ----------- ---------- ----------- Current assetsDebtors 37,589 - 32,555Cash at bank 232,843 2 22,226 ----------- ---------- ----------- 270,432 - 54,781 Creditors: amountsfalling due within oneyear (49,038) - (4,211) ----------- ---------- ----------- Net current assets 221,394 - 50,570 ----------- ---------- ----------- Net assets 481,956 2 198,170 =========== ========== =========== Capital and reservesCalled up sharecapital 555,690 2 102,223Share premium account 324,791 - 368,479Profit and lossaccount (398,525) - (272,532) ----------- ---------- ----------- Shareholders' funds 481,956 2 198,170 =========== ========== =========== CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 SEPTEMBER 2005 Unaudited Unaudited Audited 30 September 30 September 31 March 2005 2004 2005 £ £ £ Net cash outflow fromoperating activities (112,307) - (276,110) Returns on investment and servicingof financeInterest received 1,107 - 234 Capital expenditureIntangible fixed assetadditions (112,962) - - ---------- ---------- ---------- Net cash outflowbefore financing (224,162) - (275,876) FinancingShare issues, net ofexpenses 434,779 2 298,102 ---------- ---------- ---------- Increase in cash inthe period 210,617 2 22,226 ========== ========== ========== NOTES TO THE UNAUDITED INTERIM RESULTS 1 Basis of preparation of interim financial resultsThe interim results for the six months ended 30 September 2005 are unaudited anddo not constitute statutory accounts within the meaning of section 240 of theCompanies Act 1985. They have been drawn up using accounting policies andprinciples consistent with those applied in the preparation of the auditedaccounts for the period ended 31 March 2005. The information contained in the report for the period ended 31 March 2005 doesnot constitute the statutory accounts for that financial period. Those accountshave been reported on by the Group's Auditors, Nexia Audit Limited, anddelivered to the Registrar of Companies. The report of the auditors wasunqualified. 2 Earnings per ordinary share Basic earnings per share figures have been calculated based upon 44,318,685shares in issue, being the weighted average number of ordinary shares in issueduring the period. 3. Capital commitments The company has committee to an exploration programme with its joint venturepartner Phelps Dodge Exploration Corporation. Further expenditure of up to$166,000 may be payable by 16 April 2006 4 Interim Report The interim report was approved by the Directors on 18 November 2005 and hasbeen posted to shareholders. It will be available, free of charge, from theCompany's registered office Compass House, Lypiatt Road, Cheltenham,Gloucestershire GL50 2JQ for a period of one month. Announcement Dr Nicholas Badham, Managing Director, is a Fellow of the Geological Society, aChartered European Geologist, a Fellow of the Society of Economic Geologists andwas formerly Chief Geologist of RTZ Mining and Exploration Limited. He has readand approved the technical disclosure in this regulatory announcement. This information is provided by RNS The company news service from the London Stock Exchange