31 August 2006
Central China Goldfields plc
("Central China" or the "Company")
Central China Goldfields plc (AIM: GGG), a mineral exploration and development
company operating in China, reports its unaudited results for the six months
ended 30 June 2006.
Operational highlights:
* Through drilling and trenching, confirmed the potential of the flagship
Snow Mountain gold project, and identified new areas of gold mineralisation
* Signed a memorandum of understanding (MOU) on the Dong Mao Huo gold mine in
Nei Menggu
* Signed an agreement to form a joint venture on the De Ming Ding area in
Tibet
* In early May received a business licence for the Xiang Shui Tan Project in
Hubei Province
* In mid May signed our fifth joint venture on the flagship Nimu
Copper-Molybdenum Project in Tibet
* Appointed Dr. Johnny Hon as Non-Executive Director and Ciceron "Jun"
Angeles as Exploration Manager
* Raised over �2.2 million from the exercise of warrants, creating a strong
financial platform for growth in the short-to-medium term
Nigel Clark, Chairman of Central China Goldfields, commented:
"The goal is to build the Company so that within three years of flotation (by
2008) we will have three million ounces of gold (or gold equivalent) in our
inventory. We believe that this is well within our capabilities and are
confident this is achievable due to the expertise of the team and the potential
of the projects.
Our current projects are of a high quality and, so far, we have demonstrated
that two of them, the Snow Mountain and Nimu Projects, are potentially world
class.
We continue to create a substantial platform for future growth through a
combination of routes including exploring opportunities to form new joint
ventures with under-capitalised operational mines, and assessing other
corporate opportunities."
Enquiries, please contact:
Central China Goldfields plc Hanson Westhouse LLP
Dr. Jeffrey Malaihollo Richard Morrison / Cailey Barker
Tel: 020 7621 0200 Tel: 020 7601 6100
Email: info@ccgoldfields.com
www.ccgoldfields.com
Gresham PR Ltd King & Shaxson Capital Limited
Neil Boom Nick Bealer
Tel: 020 7404 9000 Tel: 020 7426 5986
Chairman's statement
I am pleased to report interim results for the six months to 30 June 2006. This
has been a very busy period in the development of your Company, during which
much encouraging progress has been made.
In little over a year, we have grown the Company from one project to five, of
which the Snow Mountain and Nimu Projects we consider to be worthy of flagship
status. We have raised over �2.2 million from shareholders exercising their
warrants, which has created a strong financial platform to take the Company
forward.
Our goal is to have three million ounces of gold (or gold equivalent) in our
inventory within three years of listing on AIM (by 2008). We are confident that
this goal is achievable, having assembled a team with all the necessary
contacts, skills and experience gained from many years of working successfully
in China, and given the fact that we are exploring in one of the most
prospective and yet under-explored regions in China.
Strategy and vision
As described in the interim and final statement in 2005, our vision is to
create one of the premier mining and exploration companies in China.
The key to achieving this goal is having the right people. Since our inception
we have built a team of technically competent people with a wide breadth of
corporate experience, who understand the particular dynamics of operating
successfully in China. The addition of Dr Johnny Hon to the board in March
significantly strengthens the team. His senior level contacts and relationships
in China and internationally will provide the Company with access to a number
of corporate opportunities.
Our growth strategy for the next three years and beyond is:
* Organic growth through exploration. We believe our two flagship projects
(Snow Mountain and Nimu) are potentially high quality assets. Our other
projects have significant growth potential
* Development of under capitalised operating mines. We have recognised that
there are joint venture opportunities in China, that can further develop
operating mines into highly-profitable operations using our technical
expertise and financial backing. Our Joint Venture in De Ming Ding in Nei
Menggu is an example of this strategy in action
* Corporate opportunities. We will use our corporate experience to find
undervalued mining assets in China and form joint ventures
APPOINTMENTS:
Critical to the development of any company are the people. In our business,
people are perhaps more crucial than other industries as we depend on their
specialist technical skills and experience to find and develop economic mineral
resources, thus creating value for all stakeholders.
During this period we appointed another Non-Executive Director, Dr. Johnny Hon
and a new Exploration Manager, Ciceron "Jun" Angeles.
Dr. Johnny Hon is a Venture Capitalist and a native of Hong Kong. After
completing his Ph.D. in Psychiatry from Cambridge University he joined ABN AMRO
as a private banker. Dr. Hon is a committee member of the 48 Group Club which
promotes positive trade and cultural relations between the United Kingdom and
the People's Republic of China. The contacts and network that Johnny Hon has
built over the years have been and will continue to benefit the Company.
We were delighted to welcome Jun Angeles to our team. Jun is a geologist with
29 years' experience in gold-base metal exploration in Asia. He obtained his
MSc in Mineral Exploration from the University of New South Wales, Australia
and was the Asia Exploration Manager for Newcrest between 1996 and 1999. Jun is
now based in Chengdu and is responsible for budgeting and supervising the
Company's exploration programmes. He is also responsible for assessing the
technical aspect of other corporate opportunities.
The number of employees in China has grown from two when we started the Company
in November 2004 to over 25 professionals today. We now have three general
managers responsible for the running of the projects. Each of them has many
years experience working in China. They report directly to Jun Angeles.
The general managers are assisted by project managers who are responsible for
the technical aspects of the projects. The project managers are geologists with
several years of international experience.
Our base in China remains at Chengdu from which we run our exploration
programmes for Snow Mountain, Nimu, De Ming Ding, Dong Mao Huo and for project
generation. We have a small office at Xiaogan in Hubei from which we run the
Xiang Shui Tan Project.
EXPLORATION PROGRESS
We now have five projects of which two are considered flagship projects: Snow
Mountain and Nimu.
Snow Mountain
In 2005, we have confirmed most of the previous exploration work of our Chinese
partners and in the process discovered new areas of gold mineralisation. In
2006, we started drilling the Songpanguo and Shiuniujia deposits and so far we
have hit mineralisation on every hole drilled. We have now commissioned an
independent party to calculate and update the resources and at the end of the
field season we will commission a scoping study.
Nimu
Nimu is a huge copper project with a reported inferred resource of 600,000
tonnes of copper oxide at an average grade of 1.1% Cu (not to International
Standards). We have geologists working in the area, and they have confirmed the
presence of porphyry style mineralisation in all of the exploration licenses
that we have visited. Moreover, we have now identified at least three target
areas to concentrate on. In addition, we are in the process of establishing a
Joint Venture company for this project. Our target is to find economic copper
oxide deposits and bring them into production as soon as possible.
Dong Mao Huo
Dong Mao Huo is a small operating mine with reported metal content of 130,000
oz. of gold with an average grade of 3.3g/t Au (reported by the Chinese
concession holder). We have commissioned independent consultants to review the
area and they report that although the area is prospective and under-explored,
the reported resource can not be verified to International Standards. They
recommend a systematic programme of drilling to better define the resource
potential prior to any mining decision. The consultants also drew a comparison
of the area with orogenic lode-gold deposits of the Eastern Goldfields of
Western Australian. We are in the process of finalising the joint venture
agreement on this project. Work will commence once the joint venture company is
established.
Xiang Shui Tan
This is a poly-metallic silver - gold - base metal project with reported
resources of 200,000 oz. of gold and 4 million oz. of silver (not to
International Standards). We announced the issuance of the Business Licence for
the Joint Venture company in May 2006. Shortly afterwards exploration work
started. The aim is to confirm the resources defined by our Chinese partner. We
will report on the result of the exploration work in the near future.
De Ming Ding
We signed an agreement to form a joint venture over a 1,789km2 area prospective
for copper mineralisation So far we have analysed the thermal signature of the
area using Advanced Spaceborne Thermal Emission Reflection satellite data and
our partner is completing the stream sediment and reconnaissance geological
survey. Upon receiving all the available data we will apply for the appropriate
exploration licences within the joint venture area.
Project Generation
We will continue to review the portfolio on a regular basis to secure added
value.
OUTLOOK
By pursuing the growth strategy outlined above, our aim is to build the Company
so that within three years of flotation (by 2008) we will have three million
ounces of gold (or gold equivalent) in our inventory. We believe that this is
well within our capabilities and are confident this is achievable due to the
expertise of the team and the potential of the projects.
Our current projects are of a high quality and so far we have demonstrated that
two of them, the Snow Mountain and Nimu Projects, are potentially world class.
We continue to create a substantial platform for future growth through a
combination of routes including exploring opportunities to form new joint
ventures with under-capitalised operational mines, and assessing other
corporate opportunities.
I would like to take this opportunity to thank all the board and staff members,
in China and London, for their dedication and contribution to date. It is their
hard work that has enabled us to grow to this stage and will continue to make
this Company a success.
Nigel Clark
Chairman
Beijing 31 August 2006
Financial Information
(unaudited)
Group Profit and Loss
6 months 6 months
Ended Ended
30 June 2006 30 June 2005
� �
General and administration expenses (289,480) (337,458)
OPERATING (LOSS) - All Continuing activities (289,480) (337,458)
Interest income 30,597 26,803
(LOSS) BEFORE TAXATION (258,883) (310,655)
Taxation - -
(LOSS) AFTER TAXATION (258,883) (310,655)
LOSS Per Share (0.004) (0.008)
Group Recognised Gains and Losses
6 months 6 months
Ended Ended
30 June 2006 30 June 2005
� �
Loss for the period (258,883) (310,655)
Exchange loss on foreign currency net investments - -
Total recognised losses for the period (258,883) (310,655)
Group Balance Sheet
As at As at
30 June 2006 31 December
� 2005
�
FIXED ASSETS 537 727
Tangible assets 1,143,921 638,255
Intangible assets 1,144,458 638,982
CURRENT ASSETS 74,689 14,245
Debtors 2,816,718 1,399,611
Cash at bank 2,891,407 1,413,856
CREDITORS (23,595) (25,285)
Amounts falling due within one year
NET CURRENT ASSETS/(LIABILITIES) 2,867,812 1,388,571
NET ASSETS 4,012,270 2,027,553
CAPITAL AND RESERVES 799,549 522,450
Called-up share capital 3,942,115 1,975,614
Share premium account (729,394) (470,511)
Profit and loss account - (deficit) 4,012,270 2,027,553
SHAREHOLDERS' FUNDS
Group Cash Flow Statement
6 months 6 months
Ended Ended
30 June 2006 30 June 2005
� �
Net Cash inflow/(outflow)from operating (320,827) (269,017)
activities
Capital expenditure and financial investment
Payment in respect of intangible assets (505,666) (240,547)
Net Cash Outflow from capital investment and (505,666) (240,547)
financial investment
Net Cash Outflow before use of liquid resources (826,493) (509,564)
and financing
Financing
Share capital issued for cash 2,243,600 1,881,750
Net Cash Flow from financing 2,243,600 1,881,750
Increase(Decrease) in cash 1,417,107 1,372,186
CENTRAL CHINA GOLDFIELDS plc
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2006
1. The interim results, which are unaudited, have been prepared in accordance
with UK GAAP.
The unaudited interim financial statements for the six months ended 30 June
2006 do not constitute statutory accounts within the meaning of section 240 of
the Companies Act 1985. The financial statements have been drawn up using
accounting policies and presentation consistent with those applied in the
audited accounts for the year ended 31 December 2005.
The financial information for the year ended 31 December 2005 has been
extracted from the statutory accounts for that period. The auditors report on
those accounts was unqualified.
2. No dividends were proposed or paid during the period.
3. The calculation of basic loss per share is based on a loss for the interim
period of � 258,883 and on a weighted average of approximately 62,199,000
ordinary shares of 1p each on issue during the period.
4. Due to losses incurred no taxation has been provided for. Deferred tax
assets on losses have not been recognised as it is not foreseeable with
sufficient certainty that the related tax benefit will be realised.
END
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