TSTR.L Regulatory News (TSTR)

26 April 2011

TRI-STAR RESOURCES PLC

("Tri-Star Resources" or the "Company")

Final Results

For the year ended 31 December 2010

Chairman's Statement

Introduction

Tri-Star Resources Plc (formerly Canisp Plc) (AIM: TSTR) is pleased to announce its audited results for the year ended 31 December 2010.

On 27 August 2010, the Company completed the transaction whereby Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi ("Tri-Star") was reversed into the Company ("the Transaction"). In view of the size and nature of the Transaction, it was treated as a reverse takeover under the AIM Rules for Companies.

In the period under review, the Company recorded a loss after tax of £1,498,000 (year ended 31 December 2009 restated: loss after tax £7,000). Administrative expenses of £1,500,000 comprise non-recurring costs of £452,000 relating to professional fees in respect of the Transaction and a further £388,000 of costs associated with the Company's re-admission to trading on AIM, as a result of the Transaction being considered a reverse takeover ("Re-Admission"). Other administrative expenses include £275,000 relating to the operations in Turkey. The board of directors of the Company (the "Board") does not recommend that a dividend is paid at this time.

Capital restructuring

During the period, the Company's capital base was restructured through the conversion of each former ordinary share of 0.1 pence into one new ordinary share of 0.005 pence each ("New Ordinary Shares") and one deferred share of 0.095 pence each. A further 3,475,000,000 New Ordinary Shares were issued for cash during the period, raising £925,000, and 37,500,000 New Ordinary shares were issued in lieu of payment of fees to advisers. In addition, £383,500 of the Company's convertible debt was converted into a further 383,500,000 New Ordinary Shares.

Subsequent to the year end, the Company successfully placed a total of 270,800,000 New Ordinary Shares, at a placing price of one pence per share, with institutional and professional investors, raising £2.7 million, gross of expenses. Each placing share has a three year half warrant attached to it, exercisable at 2 pence, and a three year half warrant attached to it, exercisable at 3 pence. These shares rank pari passu with all existing ordinary shares in the capital of the Company, and were admitted to trading on AIM on 6 April 2011. Following the placing, the enlarged issued share capital of the Company is 5,033,347,275 ordinary shares.

Outlook

It has been a transformational period for the Company. In July 2010, the Company announced the proposed transaction involving Tri-Star. The cash consideration paid in respect of the Transaction is £300,000, of which £150,000 was funded through the issue of 3,100,000,000 New Ordinary Shares raising £155,000, before expenses, to the vendors of Tri-Star. The balance of £150,000 was paid on 19 April 2011, following specific milestones having been reached. The Transaction was approved by shareholders at the general meeting held on 26 August 2010.

Tri-Star holds licences and permits in respect of the mining and exploitation of mineral rights for antimony at Goynuk, located in the Gediz district of Turkey, and has an exploration concession over 783 hectares of land with a permit to mine antimony over a 24.62 hectare deposit area.

To date, the Company has drilled 20 diamond core holes and has received the assay results of the samples from the laboratory in Canada. On 31 January 2011, the Company announced that it had received all the assay results from the drilling programme completed in December 2010. Having considered these results, despite the area subject to survey representing only a very small part of the Company's licence area and that additional drilling and evaluation are necessary, the Board was satisfied that the mine contained sufficient antimony (Sb) resources to make mining and processing operations commercially viable. As a result, the Company immediately began the process of driving towards commercial production. Brian Spratley will discuss in more detail the findings and plans for the follow up exploration campaign at Goynuk in the Chief Executive Statement.

It is worth noting that the price of antimony metal, of which the vast majority of production comes from China, has risen from US$9,250 per tonne at the time of the Transaction to US$16,600 per tonne at present. This provides support for the increase in the Company's share price to 1.02 pence as at close of business on 19 April 2011. Vehbi Eyi, an executive director of the Company who has been involved in the trading of antimony metal products for nearly 40 years.

Finally, I would like to take this opportunity to thank our limited number of staff and consultants who have worked diligently over the past few months to bring the Company to the exciting position it is in today.

Adrian Collins

Chairman

26 April 2011

Chief Executive's Statement

Following the completion of the Transaction, a modest scout drilling programme was commenced in October 2010 on the mining property, which has had historic production but minimal scientific evaluation and no exploration drilling conducted to date. The programme led to the discovery of a new area of high grade mineralisation and also showed that the formational geology of the rock units hosting the mineralisation was complex.

The drilling programme was completed on 11 December 2010, having drilled 1,311 metres in 20 drill holes between 24 metres and 129 metres deep from 18 drill sites. The drilling focused on an area inside the exploitation concession licence only, a small fraction of the overall concession area at Goynuk.

In conjunction with the drilling, surface mapping and sampling was undertaken of exposures created by the excavation and placement of drill roads and sites.

This mineralisation and additional intercepts in holes DH001, DH002, DH004, DH013 indicate that the significant high grade mineralising system is present in previously unexplored areas. Other holes, while not returning mineralisation, have led to a better understanding of the geologic controls and limits of the mineralising systems in a region of prolific antimony mineralisation.

Since December 2010, the mine site and surrounding area have been visited by the Company's independent consulting geologist to conduct a regional and mine surface mapping exercise and to assist with the specification of an expanded drilling programme due to commence in the second quarter of 2011.

The preliminary findings indicate that an internationally compliant resource may be established with further drilling and geological appraisal. The Board and management have reviewed the results and have approved engineering studies to construct facilities for early stage production.

The following tabulation shows the drill data from the three holes that were drilled into the high grade mineralisation to the south east of the mine workings down dip from some very high grade pillars. These holes are not representative of the whole area, but part of the Company's scout drilling programme, aiming to define the structure and context of the geology and mineralisation.

The potential quantity and grade of the mineralisation indicated by the holes can only be conceptual in nature, as there has been insufficient exploration to date to define a mineral resource, and it is uncertain whether further exploration will result in the target being delineated as a mineral resource in terms of reporting codes.

Renewable for 10 year periods thereafter

Since these results were collected, the interpretation of the mineralisation in the region has been undertaken. The entire exploration concession has now been mapped. A programme of ground based geophysics is being planned on the concession area to identify structural features associated with mineralisation.

A better understanding of the complex Alpine style geology in the area has been achieved. The mineralisation is in a collision zone of oceanic ophilities and continental sediments, with a nearby volcanic intrusion adding a heat source, the Murat Dag. The deposition model being pursued is a low temperature epithermal mineral permeation in low angle thrust faults and other fractures associated with the axis of an anticline of some scale. The mineralised fluids are believed to have been trapped by silicification forming quartz and massive stibnite depositions. The axis of the anticline plunges to the South East where it was intersected by drill holes DH001, 002 and 004.

The mineralisation to the west of the ore body is stopped by serpentine rock. To the east the mineralisation is bounded by a downthrown fault, which has not been tested yet and is a target for our next drilling programme.

The mineralisation to the north remains open and is a target of our next round of drilling. Further sampling and assays were taken over the licence area.

Preliminary internal management estimates of the geological resources observed to date are in three locations. These assessments are not JORC or 43-101 compliant, as too few data points exist, and therefore do not constitute a resource. The following estimates must be treated with caution and are given only as a guide to the scale of mineralisation observed thus far.

The first location is an extension of the orebody previously underground mined to the South East and extends from observed high grade pillars in old workings through boreholes DH001, DH002 and DH 003 in a south easterly direction. The area is apparently constrained by faulting to the east and west, as mentioned above, however the area is still approximately 140m in strike, 5m in thickness and extends for approximately 100m. The estimated mineralisation in this area is about 210,000 tonnes at a grade of 5% Sb. It is the intention of this Spring's resumed drilling to verify this area and then extend this zone by step out drilling, following the mineralisation.

Interpretation of mineralisation

The second location is the upper North West section of the mıned area and is the area envisaged most suitable for an open pit. Although an area of more complex mineralisation, which occurs as rich plumes and fault filling and some disseminated material, internal estimates are in the region of 160,000 tonnes with an average grade at 4% Sb.

The mine has extensive accumulations of broken rock from various sources, open pit workings, underground workings, hand sorting and stockpiles. These dumps and accumulations are more extensive than originally believed and are estimated to contain approximately 80,000 tonnes at an average grade of 2% Sb. Owing to the difficulty of sampling the dumps, that contain a mixture of rock types and various sized rocks and boulders, a systematic process of crushing bulk samples and re-assaying the dumps is underway.

So far the mineral inventory at Goynuk, following the first phase of scout drilling on a small portion of the licence area, is approximately 450,000 tonnes containing 18,500t of Sb at grades little over 4%. Note that these are internal management estimates and significant further work is required to bring these figures into an industry compliant category. However, the next phase of geological and drilling test work should improve our knowledge and level of confidence on these figures, and we hope identify extensions and analogous structures to test on site. It is worth re-iterating that the potential quantity and grade of the mineralisation indicated can only be conceptual in nature, as there has been insufficient exploration to date to define a mineral resource, and it is uncertain whether further exploration will result in the target being delineated as a mineral resource in terms of reporting codes.

The recent financing of £2.7 million was completed mostly to fund the extended drilling programme, comprising in-fill resource and reserve drilling and assaying, engineering design of production facilities.

The management team has been expanded to include Len Holland, a metallurgical consultant, and Alain Chevalier, who joins as Chief Geologist.

Brian Spratley

Chief Executive

26 April 2011

Executive Director's Statement

The Antimony Market

The price of antimony metal in European markets rose consistently in the last year, from US$9,000 at the time of the Transaction to currently over US$16,600 per tonne at present, delivered to a warehouse in an ARA port. Prices for China located antimony trioxide have also risen significantly, in line with the metal price. Antimony tri-oxide often trades at a premium to the metal price. Current prices for Chinese tri-oxide (standard grade 99.5% SbO3) are in excess of US$15,200 per tonne. As this product contains significant oxygen content and small moisture, the implied price of antimony metal is nearer US$19,000 per tonne, making tri-oxide production a means of value adding to the metal.

The antimony and tri-oxide market will be approaching a quieter period in the Western world Easter and Northern Hemisphere summer holiday season and will lead to some chemical and manufacturing factories to operate on shortened working hours. However, demand should re-emerge from these markets in the build up to Q4 2011.

There has been considerable speculation that China has, apart from applying export quotas on antimony and antimony products (along with rare earth oxides and tungsten), actually commenced a programme of strategic stockpile accumulation. As the majority of antimony consumed by the USA, Europe and Japan is sourced from imports, any strategic stockpile accumulation from these important customer regions will contribute to the price pressures on the commodity for some time to come.

Vehbi Eyi

Executive Director

26 April 2011

The 2009 comparatives are restated as they relate to Üç Yildiz as described in the accounting policies.

1 Accounting policies

Basis of Preparation

The group financial statements have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). The Company's shares are listed on the AIM market of the London Stock Exchange.

The principal accounting policies of the Group are set out in the annual report and financial statements.

Acquisition of Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi

On 27 August 2010, Tri-Star Resources Plc (formerly Canisp Plc) agreed to pay cash of £300,000 to acquire 99% of the issued share capital of Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi (Üç Yildiz). After the acquisition, the former shareholders of Üç Yildiz owned 77.6% of the Company. An initial £150,000 of cash was paid and the remaining £150,000 was deferred. The initial £150,000 was funded by the issue of shares to the former shareholders of Üç Yildiz. The transaction has therefore been treated for accounting purposes as a share for share exchange and as a reverse acquisition. The remaining £150,000 has been treated as a financial liability in the financial statements and recognised in reserves as a distribution to the former shareholders. The deferred amount was paid in full during April 2011.

The initial payment of £150,000 was dependent on the issue of shares to the former Üç Yildiz shareholders for cash and was therefore a circular transaction as the cash didn't leave the Group.

This transaction falls outside the scope of IFRS 3 ("Business Combinations"), as it is a reverse acquisition into a listed shell, but the Group has adopted certain of the requirements of IFRS 3 in accounting for the reverse acquisition. The accounting policy adopted has been set out below.

The consolidated financial statements are presented as a continuation of the financial statements of the private operating entity (Üç Yildiz). The consideration transferred has been measured at fair value and has been calculated as the deemed cost of the combination based on the number of shares that Üç Yildiz would have to issue to achieve the same ratio of ownership interest that exists in the combined group. The assets and liabilities of Tri-Star have been recognised at fair value at the acquisition date. The surplus of the consideration transferred over the fair value of the net identifiable assets of Tri-Star arising on the acquisition has been recognised in the statement of comprehensive income as a cost of listing and no goodwill has, therefore, been recognised. The consideration transferred was not calculated based on the share price of the listed shell at the date of the acquisition as trading in the shares of the listed shell was suspended at that time. All other transaction costs have been treated as post transaction costs in the income statement.

The share capital and share premium at the period end represent the equity structure of the legal parent including the equity instruments issued by the legal parent to effect the transaction. This has been effected by the creation of another reserve to reflect the reverse acquisition.

Accounting periods and comparative information

The comparatives represent those of Üç Yildiz to reflect the substance that the legal subsidiary is the acquirer and so the prior-year figures relate only to the legal subsidiary. The comparative IFRS information for Üç Yildiz for the five months to 31 December 2008 and the year to 31 December 2009 has been included within the document sent to shareholders relating to the proposed transaction and the subscription for new ordinary shares and certain other items dated 3 August 2010.

In accordance with IAS 1, three statements of financial position are presented, being the year ended 31 December 2010, the prior year comparative, and the opening statement of financial position for the earliest period for which comparatives are provided, being 1 January 2009.

Üç Yildiz has a year end of 31 December and as such Tri-Star has changed its year end to 31 December. Historically, Tri-Star had a year end of 31 March and produced full year financial statements at 31 March 2010.

Going concern

The operations of the Group are currently being financed from funds which the Company raised from private and public placings of its shares during the year. The Group has not earned revenue during 2010, as it is still in the exploration phase of its business. The Group is reliant on the continuing support from its existing and future shareholders.

As at 31 December 2010, the Group had cash resources of £362,640 which management felt to be sufficient funds to manage the business during the first quarter of 2011. The placing of shares on 29 March 2011 raised a further £2.7 million to finance the continued exploration and development of the mine.

The Directors have prepared cash flow forecasts for the period ending 30 April 2012. The forecasts identify unavoidable third party running costs of the Group of £709,347 and demonstrate that the Group has sufficient finance facilities available to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Further development and exploration of the mine will continue as and when finance is available. Accordingly, the accounts have been prepared on a going concern basis.

2 SEGMENTAL REPORTING

As defined under International Financial Reporting Standard 8 (IFRS 8) management have defined that the Group's only material business segment is mining. 

As noted in the accounting policies, Tri-Star Turkey is deemed to be the acquiring Company under application of reverse acquisition rules. Therefore, the comparative results to the date of acquisition consist solely of Tri-Star Turkey. The results for the year ended 31 December 2010 include Canisp Plc from the date of acquisition, 27 August 2010. There is no difference between segmental revenue and Group revenue for the comparative periods.

Segment profit or loss is reported to the Board on a monthly basis and consists of earnings before interest, tax, depreciation and amortisation.

As defined under International Financial Reporting Standard 8 (IFRS 8), management have defined that the Group operates in the UK and Turkey.

3 Taxation

There was a tax refund for the year of £2,000 (2009: £3,000 charge).

Unrelieved tax losses of approximately £1.85 million (2009: £1.4 million) remain available to offset against future taxable trading profits. The unprovided deferred tax asset at 31 December 2010 is £481,000 (2009: £364,000) which has not been provided on the grounds that it is uncertain when taxable profits will be generated by the Group to utilise those losses.

4 LOSS PER SHARE

The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Under reverse accounting, the weighted average number of shares in issue during the period reflects Üç Yildiz's weighted average pre-combination ordinary shares multiplied by the exchange ratio established in the acquisition, and the weighted average total number of actual shares of the legal parent in issue after the date of acquisition. For the comparative period the weighted average number of shares in issue during the period is Üç Yildiz's weighted average pre-combination ordinary shares multiplied by the exchange ratio established in the acquisition.

5 share capital

The movement in the ordinary share capital is analysed as follows:

Following the approval of its shareholders at the Company's annual general meeting on 26 August 2010 of the share division of all existing issued and unissued ordinary shares in the capital of the Company ("Ordinary Shares") of 0.1p each into one Ordinary Share of 0.005p each and one deferred share of 0.095p each, application was made for 856,547,275 Ordinary Shares of 0.005p each to be admitted to trading on AIM. Admission of these 856,547,275 Ordinary Shares of 0.005p each occurred at 8.00 a.m. on 27 August 2010. Following this issue and the issue of the 3,137,500,000 Ordinary Shares of 0.005p each announced on 27 August 2010, the issue of 375,000,000 shares announced on 27 August 2010, the conversion of 383,500,000 shares announced on 27 August 2010 and the exercise of warrant announced on 21 December 2010 there were 4,762,547,275 Ordinary Shares of 0.005 pence each in issue (each of which are voting shares) as at 31 December 2010.

The deferred shares have no voting rights and are not eligible for dividends.

6 REVERSE ACQUISITION

On 27 August 2010, Tri-Star Resources Plc (formerly Canisp Plc) completed a reverse acquisition of Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi, a Company based in Turkey. The accounting entries for the transaction are set out in the accounting policies within the Annual Report and Accounts. The amounts recognised for each class of assets, liabilities and contingent liabilities recognised at the acquisition date were as follows:

The Group incurred acquisition related costs of £452,000 in completing the reverse acquisition. These costs are included within administrative expenses.

Since the acquisition, Tri-Star Resources Plc contributed a loss of £375,000 to the Group loss. Had the reverse acquisition been completed on 1 January 2010, the loss of the Group for the year would have been £1,571,000 (revenues: nil).

7 events after the balance sheet date

Assay Results establishing commercial viability of mine

On 31 January 2011, the Board announced that it had received all of the assay results from the drilling programme completed in December 2010. Having considered the results, despite the area subject to survey representing only a very small part of the Group's licence area, and that additional drilling are necessary, the Board was satisfied that the mine contains sufficient antimony resources to make mining and processing operations commercially viable. As a result, the Board will immediately begin the process of driving the Group towards commercial production.

Placing of shares

On 29 March 2011, the Board announced the placing of 270,800,000 new ordinary shares (the "Placing Shares"), at a placing price of one pence per share with institutional and professional investors, raising £2.7 million. In addition, each Placing Share will have a three year half warrant attached to it, which will be exercisable at 2 pence, and a three year half warrant attached to it, which will be exercisable at 3 pence.

Certain of the Directors' payments and the other financial liability of £150,000 recognised in the financial statements were contingent on both of these above events. These liabilities, totalling £229,860, therefore crystallised on 29 March 2011 and were paid on 4 April and 7 April 2011.

8 publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.

The consolidated statement of financial position at 31 December 2010, the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and associated notes for the year then ended have been extracted from the Group's 2010 financial statements upon which the auditors opinion is unqualified.

The accounts for the year ended 31 December 2010 will be posted to shareholders and laid before the Company at the Annual General Meeting, which will be held on 1 June at 11.00 a.m. at the offices of Fladgate LLP, 216 Great Queen Street, London WC2B 5DG. Copies will also be available on the Company's website (www.tri-starresources.com) in accordance with AIM Rule 26.

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