Sirius Minerals Regulatory News (SXX)

22 Dec 2006 07:00

Sirius Exploration plc22 December 2006 FOR RELEASE 7.00AM 22 DECEMBER 2006 SIRIUS EXPLORATION PLC ("Sirius Exploration" or "the Company") Sirius Exploration acquires and explores mineral properties INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 RESULTS * £263,082 capital raised * £146,033 loss (2005: £145,862 restated) * FRS 20 restatement £19,869 for warrants at time of August 2005 listing * £452,007 shareholder's funds (2005: £481,956 restated) HIGHLIGHTS * Principal activity remains at the two exploration projects at Kadiica and Osogovo in Macedonia * Phelps Dodge has agreed to give Sirius Exploration 100% of the Osogovo and Kadiica projects subject to their agreed 1% NSR * Sirius Exploration - Balkan set up to accept the Osogovo and Kadiica claims - Good copper-silver target at Osogovo - Possibility of a small copper mine and gold potential at Kadiica * New Kalin Kamen claim registered and awaiting Macedonian government confirmation STRATEGY * Continue successful policy of joint ventures and agreements with major mining companies * Use the board's corporate finance skills to look for potential acquisitions * Actively seeking new opportunities * Principal interest in base metals but willing to look at other company-enhancing opportunities For further information: Cubitt Consulting Brian Coleman-Smith / Nia Thomas / Allison Reid Tel: 020 7367 5100 Sirius Exploration Plc Richard Poulden (Chairman) Tel: 014 5351 1900 richard.poulden@siriusexploration.com Jonathan Harrison (Financial Director) Mobile: 078 7988 7755 Dr Nicholas Badham (Managing Director) Tel: 012 6481 1121Beaumont Cornish Roland Cornish, (Chairman) Tel: 020 7628 3396 Notes to editor: Sirius Exploration Plc Sirius Exploration Plc (AIM: SXX) is quoted on the Alternative Investment Marketof the London Stock Exchange Ltd in London. The Company acquires and exploresmineral properties. The Company is exploring for copper on its porphyry coppermineral properties located in Macedonia. The Company has a joint venture with Phelps Dodge and has completed a drillingprogram at exploration sites in Macedonia. Sirius Exploration has an agreementwith Rio Tinto to explore their Macedonian database to identify furtherexploration opportunities. Website: www.siriusexploration.com Phelps Dodge Phelps Dodge is one of the world's leading producers of copper and molybdenum,the largest producer of molybdenum-based chemicals and continuous-cast copperrod, and among the leading producers of magnet wire and carbon black. Thecompany and two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries,employ approximately 15,500 people worldwide. Rio Tinto Rio Tinto is a world leader in finding, mining and processing the earth'smineral resources. Major products include aluminium, copper, diamonds, energyproducts (coal and uranium), gold, industrial minerals (borax, titanium dioxide,salt, talc and zircon), and iron ore. The Group's activities span the world butare strongly represented in Australia and North America with significantbusinesses in South America, Asia, Europe and southern Africa. Rio Tinto comprises wholly owned subsidiaries (such as Borax, Comalco,Hamersley, Rio Tinto Coal Australia, Kennecott and Rio Tinto Iron & Titanium),partly owned subsidiaries (Coal & Allied and Palabora) and non-managed,(Escondida) and joint ventures (Grasberg) in which public shareholders, othercompanies or governments are partners. SIRIUS EXPLORATION PLC ("Sirius Exploration" or "the Company") Sirius Exploration acquires and explores mineral properties INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 Chairman & Managing Director's Statement Exploration in Macedonia Our principal activity remains the two exploration projects, Kadiica andOsogovo, in the well-established and highly prospective Balkan copper-goldporphyry belt where it passes through eastern Macedonia. We have completed the planned programme in Macedonia with Phelps Dodge. Theprogramme for 2006 was completed with the 5th drill hole at Osogovo and the 11that Kadiica, as reported in the August annual report. Following completion of theprogramme, we have agreed with Phelps Dodge that both targets are large but arerelatively low grade copper porphyry mineralisations, with neither the grade northe size to interest them. Phelps Dodge have therefore made a decision towithdraw from the projects and cede them to Sirius Exploration, retaining only a1% NSR, as per our agreement. In order to receive the claims from Phelps Dodge and operate in Macedonia wehave set up a wholly-owned Macedonian subsidiary, Sirius Exploration-Balkan andwe are in the process of transferring the claims to this company. In March 2006, we signed an agreement with Rio Tinto for the exclusive use oftheir exploration database relating to Macedonia for a twelve month period. AsRio Tinto did not find anything of interest to them as a result of theirexploration, we are currently using the data to review opportunities inMacedonia using different economic criteria. Osogovo At Osogovo, Sirius Exploration is now confident of the porphyry-skarn model forthe mineralisation. The low grade porphyry is flanked by skarn mineralisationwhich replaces a limestone unit. The distal lead-zinc-silver skarnmineralisation constitutes the main ore at the Sasa mine which adjoins theOsogovo claim. Anecdotal evidence from the mine of gradual enrichment of theskarn in copper and silver as the porphyry was approached is now beingsubstantiated. The main area with potential for this proximal copper-silverskarn underlies not only the eastern section of the Osogovo claim but also someadjacent open ground beside and to the north of the Sasa claim. Your company ishappy to announce that this ground has now been applied for as the Kalin Kamenclaim. The application has been acknowledged as the first for this ground and isbeing duly processed. We have previously reported the existence of a drill hole by the former regime(Historical Hole 7) in what is now the Kalin Kamen claim where it runs betweenthe Sasa and Osogovo claims. Reported assays from this are 16m of 1.7% copperand 40 grams per tonne silver, including a 6.1m section of 3.5% copper. Thedrill logs show this section to be in the limestone bed and substantiate evenfurther the fertility of this area for rich copper-silver skarn mineralisation. During the surveying of the Osogovo target for redrilling some abandoned drillcore from historical Hole 7 was located. Although the core is incomplete anddisorientated there are highly magnetic sections of the abandoned core rich incopper. We can draw the conclusion that the magnetic anomaly in the orientationsurvey reflects the rich copper skarn mineralisation. The new magnetic surveyshould now be able to define its limits and consequent drill targets. As well as this strong anomaly the beginnings of what may be another anomalyhave been located at the western extremity of the test lines. Mineralised andaltered porphyry in outcrop have been identified at this site. Sirius Exploration has contracted a ground magnetic survey to cover not only thecentral porphyry of the Osogovo claim but also the eastern anomaly around HH7and the western one referred to above. This survey was started in November butdelayed by severe weather. The likely site for repeating HH7 is accessible by an existing road which willsave the costs of site preparation. Drilling will be underway next year when thesnow melts and access is again possible. Kadiica The completed drill programme has successfully outlined a supergene copperblanket under the crest of the ridge at Kadiica - in the centre of the claim.The ground magnetic survey indicates no internal disruptions to this blanket ofenriched copper. Very preliminary leach tests of core from the blanket materialshow that the mineralisation is leachable with a minimum copper recovery of 65%. There are only a few piercement points, analysis of the intersections of thesupergene blanket suggest a north-south channel of richer mineralisation in thecentre of the blanket. We can not give a broad outline of the resource because only a small amount ofdrilling has taken place. But it is encouraging to see that there is acontinuity of better grade copper between neighbouring holes. Early next year,Sirius Exploration will drill the southern end of this rich blanket and accessthe resource via a short adit. Topography of the area has shown that it ishighly favourable for entry by an adit. Direct access to the mineralisation willallow bulk samples to be taken for more precise leaching tests. We believe thereis a real opportunity here for a small copper mine. A review of the Rio Tinto Macedonian database, showed that samples had beencollected along the ridge central to the Kadiica claim and also from a number ofclosely spaced sites some 2km to the east - still well within the claim. RioTinto had noted that the ridge constitutes a zone of silicificationover-printing the porphyry mineralisation. They had undertaken a soil samplingsurvey which defines a low level gold anomaly coincident with thissilicification. Two of Rio Tinto's samples from siliceous outcrops on the ridgeassayed 7.2 and 0.8 grams per tonne gold - a significant anomaly. We willundertake an aggressive programme of rock sampling and trenching of thesilicified anomalous area next year. A further 7 samples taken over a 300m x 500m area to the east returned valuesbetween 0.8 and 5.4 grams per tonne - averaging 1.8gpt and all anomalous. YourManaging Director visited the site recently and can confirm that this easternarea is a second area of silicification also in need of mapping, trenching andsampling. Satellite imagery trained on the siliceous alteration on the ridge identifies assimilarly anomalous not only the eastern area (which is partially occluded bytrees) but also other areas beyond the limits of the current claim. These willalso be properly investigated when the weather permits. Summary In summary your company feels that it has successfully advanced the twoMacedonian projects. There is a good copper silver target at Osogovo and notonly the possibility of a small copper mine but also good gold potential atKadiica. Future strategy We intend to continue our strategy of joint ventures and agreements with majormining companies. The board's corporate finance skills will continue to beutilised to look for acquisitions. In addition to the company's efforts inMacedonia, we continue to seek out opportunities elsewhere. While we retain ourprincipal interest in base metals we will attempt to develop anycompany-enhancing opportunity which we are able to attract. Richard Poulden Dr Nicholas Badham Chairman Managing Director PROFIT AND LOSS ACCOUNT for the six months ended 30 SEPTEMBER 2006 Restated Restated Unaudited Unaudited Audited Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 £ £ £ Turnover - - - Administrative expenses (147,268) (127,100) (301,740) Expense arising from share-basedpayment transaction (19,869) (19,869) Operating loss (147,268) (146,969) (321,609) Interest receivable 1,235 1,107 3,749 Loss on ordinary activities before taxation (146,033) (145,862) (317,860) Tax on loss on ordinary activities - - - Loss for the financial period (146,033) (145,862) (317,860) Loss per ordinary share Basic loss per share (pence) (0.27) (0.33) (0.66) BALANCE SHEET as at 30 SEPTEMBER 2006 Restated Restated Unaudited Unaudited Audited 30 September 30 September 31 March 2006 2006 2005 £ £ £ Fixed assetsIntangible assets 385,755 260,562 355,175Tangible assets 647 - 813 ----------- ---------- ----------- 386,402 260,562 355,988 Current assetsDebtors 30,018 37,589 23,318Cash at bank 117,027 232,843 21,944 ----------- ---------- ----------- 147,045 270,432 45,262 Creditors: amountsfalling due within oneyear (81,440) (49,038) (66,292) ----------- ---------- ----------- Net currentassets/(liabilities) 65,605 221,394 (21,030) ----------- ---------- ----------- Net assets 452,007 481,956 334,958 =========== ========== =========== Capital and reservesCalled up sharecapital 149,199 131,470 132,545Share premium account 1,019,364 749,011 772,936Share based paymentreserve 19,869 19,869 19,869Profit and lossaccount (736,425) (418,394) (590,392) ----------- ---------- ----------- Shareholders' funds 452,007 481,956 334,958 =========== ========== =========== CASH FLOW STATEMENT for the six months ended 30 SEPTEMBER 2006 Unaudited Unaudited Audited 30 September 30 September 31 March 2006 2005 2006 £ £ £ Net cash outflow fromoperating activities (138,654) (112,307) (231,591) Returns on investment andservicing of financeInterest received 1,235 1,107 3,749 Capital expenditureIntangible fixed assetadditions (30,580) (112,962) (207,219) ---------- ---------- ---------- Net cash outflowbefore financing (167,999) (224,162) (435,061) FinancingShare issues, net ofexpenses 263,082 434,779 434,779 ---------- ---------- ---------- Increase in cash inthe period 95,083 210,617 (282) ========== ========== ========== NOTES TO THE UNAUDITED INTERIM RESULTS 1. Basis of preparation of interim financial results The interim results for the six months ended 30 September 2006 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 year ended 31 March 2006. In accordance with FRS 20, the Company has changed its policy for accounting forshare-based payments. On admission to AIM on 1 August 2005 the Company issued2,525,000 warrants (100,000 of which were to a Director) exercisable at any timeor times from admission until 1 August 2006 at an exercise price of 5p. Upon admission to AIM on 1 August 2005, the shares were traded at 3p. In accordance with FRS 20, the interim accounts for the period to 30 September2005 have been restated by a charge of £19,869 to fully reflect the cost of thewarrants issued (100,000 of which were to a Director), based on a net cost tothe Company of 0.8p per warrant. The information contained in the report for the year ended 31 March 2006constitutes the statutory accounts for that financial year. Those accounts havebeen reported on by the Group's Auditors, Nexia Smith & Williamson, anddelivered to the Registrar of Companies. The report of the auditors wasunqualified. These have been restated by a charge of £19,869 to fully reflectthe cost of warrants issued, based on a net cost to the Company of 0.8p perwarrant. 2. Earnings per ordinary share Basic earnings per share figures have been calculated based upon 54,625,273(2005: 44,318,685) shares in issue, being the weighted average number ofordinary shares in issue during the period. 3. Capital commitments There are no capital commitments. 4. Interim Report This interim report was approved by the Directors on 22nd December 2006 and hasbeen posted to shareholders. It will be available, free of charge, from theCompany's registered office 42 Bedford Row, London WC1R 4J for a period of onemonth. The interim report is also available to download onwww.siriusexploration.com. 5. Post balance sheet event On 30 October 2006, the Company established a subsidiary entity, SiriusExploration - Balkan, in Macedonia with issued share capital of £3,427. 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