RNS Number:3979N
Falkland Gold and Minerals Ltd
10 June 2005
FALKLAND GOLD AND MINERALS LIMITED
Interim Results for the 6 months ended 31 March 2005
Highlights
* Alternative Investment Market ('AIM') flotation raises #8.9 million
after costs
* Licence term has been extended to July 2009
* 1st drill rig operational in early March 2005
* 2nd drill rig operational during May 2005
* More than 2,100 metres of core extracted by end of May 2005
* Stanley office fully established - February 2005
* Sample Prep Lab established at Goose Green in March 2005
* Core cutting facility operational April 2005
* Cash balances of approximately #8.45 million at 31 March 2005
Further information:
Falkland Gold & Minerals Limited
Richard Linnell, Chairman +27 82 440 6710
Bell Pottinger Corporate & Financial
Nick Lambert +44 (0) 20 7861 3232
CHAIRMAN'S INTERIM STATEMENT
I am pleased to report on the activities of Falkland Gold and Minerals Limited
("FGML" or "the Company") for the six month period ended 31 March 2005.
On 9 December 2004, the Company's shares were admitted to trading on London's
AIM market. I would like to thank all the applicants and shareholders for their
support through the flotation process as the institutional placement and the
public offer were both substantially oversubscribed and had to be scaled back to
#8 million and #2 million respectively (before costs).
Following the admission to AIM, the Falklands Islands Government has extended
the period of our licence from January 2007 to July 2009. The licence gives FMGL
exclusive exploration rights to substantially all of the onshore land mass of
the Falkland Islands (approximately 12,000 km2).
As part of Stage I of the exploration programme, last year, a considerable
amount of exploration had already been conducted. This included an aeromagnetic
survey of the Falkland Islands that identified a number of magnetic anomalies.
The presence of alluvial gold in several drainage systems was established as
well as the presence of kimberlitic indicator minerals and titanium rich gravel.
The Company has now identified at least twenty three targets for investigation
though this number may increase as our knowledge of the islands' geology is
enhanced.
Good progress has been made and drilling is well underway on Stage II, where the
focus for the first 12,000 metres of the investigative drilling programme is
centred on nine of the twenty-three targets identified.
To get our operating practices running smoothly, we commissioned the first
surface drill rig, "Falklands 1", on Target 5 which is located north of Goose
Green. We specifically chose Target 5 as the first drill site due to its close
proximity to the Goose Green facilities. By the end of March 2005, over 600
metres of 67mm diameter core had been extracted with a further 700 metres in
April. Drilling has now been completed in this area and we should receive our
first assay results from the laboratory later this month.
Stage III of the exploration programme will involve a further 12,000 metres of
investigative drilling on the remaining targets identified during Stage I and
any others that we subsequently identify.
In March 2005, the Company retained GeoExplo Ltda of Santiago, Chile has
progressed to carry out ground magnetic surveys. This work commenced in late
April and has progressed well. The team has already completed the 1,500
line-kilometre programme and the data is now being processed.
Following the AIM flotation, the Company is in a good position financially and
has cash balances of approximately #8.45 million as at 31 March 2005.
Our financial position has allowed us to bring forward the purchase of certain
equipment. In particular, we acquired a second surface drill rig, "Falklands 2"
in December 2004 to provide us with a back-up for Falklands 1 in the short term
and, thereafter, the opportunity to accelerate the rate at which targets are
drilled.
Given logistical delays in getting spare parts to the Falklands, we have also
purchased a larger stock of spares for the rigs than was originally forecast.
This, coupled with a decision to purchase certain operational equipment outright
instead of leasing, has enhanced FGML's operational independence and should
minimise drilling delays arising from mechanical failures.
During the period, the Company returned a loss of #346k, has invested #459k in
operational equipment and has capitalised #239k of costs directly attributable
to the exploration activities.
The Company is just over three months into the three year exploration programme
outlined in the 24 November 2004 Prospectus. By the end of May, around 2,100
metres had been drilled out of the planned 24,000 metres. With a positive
outlook for gold underpinning the resource potential of the Company the Board
remains optimistic about FGML's prospects.
Richard Linnell, Chairman
Profit and loss account for the 6 months ended 31 March 2005
6 months 8 month
ended period ended
31/03/2005 30/09/2004
(unaudited) (audited)
# #
Administrative expenses (457,705) (111,445)
----------- -------------
Operating Loss (457,705) (111,445)
Other interest receivable and similar income 111,836 11,699
----------- -------------
Loss on ordinary activities before taxation (345,869) (99,746)
Tax on loss on ordinary activities - -
----------- -------------
Loss on ordinary activities after taxation (345,869) (99,746)
----------- -------------
Loss retained for the financial period (345,869) (99,746)
=========== =============
6 months to 8 months to
31/03/2005 30/09/2004
Note (audited)
Pence Pence
Basic and diluted loss per ordinary share 2 (0.5) (0.3)
=========== =============
There were no recognised gains or losses in the period other than those dealt
with in the profit and loss account above.
All of the activities of the Company are classified as continuing.
Balance sheet as at 31 March 2005
31/03/2005 30/09/2004
(unaudited) (audited)
# #
Fixed assets
Intangible fixed assets 941,367 702,130
Tangible fixed assets 483,893 924
---------- ---------
1,425,260 703,054
========== =========
Current assets
Cash at bank and in hand 8,451,447 176,133
Debtors 87,652 5,415
---------- ---------
8,539,099 181,548
Creditors: amounts falling due within one year (186,425) (74,294)
---------- ---------
Net current assets 8,352,674 107,254
========== =========
Net assets 9,777,934 810,308
========== =========
Capital and reserves
Called up share capital 1,565 763
Share premium account 10,221,984 909,291
Profit and loss account (445,615) (99,746)
---------- ---------
Shareholders' equity funds 9,777,934 810,308
========== =========
Cash flow statement for the 6 months ended 31 March 2005
Note 6 months to 8 month
31/03/2005 period ended
(unaudited) 30/09/2004
(audited)
# #
Net cash outflow from operating
activities 3 (418,291) (93,569)
Returns on investments and servicing of
finance
Interest received 111,836 39
Foreign exchange gain - 11,660
Capital expenditure and financial
investment
Expenditure in respect of fixed
assets (731,726) (329,918)
---------- ---------
Net cash outflow before financing (1,038,181) (411,788)
Financing
Issue of ordinary share capital 10,413,570 536,671
Issue costs (1,100,075) -
Receipt of deferred share subscriptions - 51,250
---------- ---------
Increase in cash in the period 4 8,275,314 176,133
========== =========
Reconciliation of movements in shareholders'
funds for the 6 months ended 31 March 2005
Loss for the financial period (345,869) (99,746)
New share capital subscribed (net
of issue cost) 9,313,495 910,054
---------- ---------
Net increase to shareholders' funds 8,967,626 810,308
Opening shareholders' equity funds 810,308 -
---------- ---------
Closing shareholders' equity funds 9,777,934 810,308
========== =========
Notes to the interim results for the 6 months ended 31 March 2005
1. Basis of preparation of the financial statements
The interim financial information set out on pages 6 to 9 has been prepared on
the same basis and using the same accounting policies as were applied in drawing
up the company's statutory financial statements for the 8 month period ended
30th September 2004.
The financial information for the 6 months ended 31st March 2005 is unaudited.
In the opinion of the directors the financial information for this period fairly
presents the financial position, results of the operations and cash flows for
the period in compliance with Falkland Island Company Law and generally accepted
accounting principles.
The financial information for the 8 month period ended 30 September 2004 has
been derived from the Company's audited financial statements for the period as
filed with the Registrar of Companies and does not constitute the statutory
financial statements for that period.
The auditors' report on the statutory financial statements for the 8 month
period ended 30th September 2004 was unqualified.
Comparative figures for an equivalent 6 month period ended 31 March 2004 are not
available.
No dividends were proposed or paid during the period.
2. Loss per share
The calculation of loss per ordinary share is based on losses of #345,869 (8
months to 30 September 2004: loss #99,746) and the weighted average number of
ordinary shares outstanding of 66,171,429 (30 September 2004: 33,493,388). There
is no difference between the diluted loss per share and the basic loss per share
presented.
3. Reconciliation of operating loss to net cash outflow from operating
activities.
Reconciliation of operating loss to net cash outflow
from operating activities
Operating loss (457,705) (111,445)
Depreciation charge 9,520 247
Increase in debtors (82,237) (5,415)
Increase in creditors 112,131 23,044
---------- ----------
Net cash outflow from operating activities (418,291) (93,569)
========== ==========
Analysis of net funds
30/09/2004 Cash Flow 31/03/2005
# # #
Cash at bank and in hand 176,133 8,275,314 8,451,447
------------ ---------- ----------
Total 176,133 8,275,314 8,451,447
------------ ---------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
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