25 April 2007
Central China Goldfields plc (the "Company")
Final results for the year ended 31 December 2006
Central China Goldfields plc (AIM: GGG), a mineral exploration and development
company operating in China, is pleased to announce its final results for the
year ended 31 December 2006.
Operational and financial highlights:
* Signed three new joint ventures agreements: (the Nimu copper project in
Tibet, the Dong Mao Huo gold project in Inner Mongolia, and the De Ming
Ding copper prospect in Tibet).
* Identified eight target areas at flagship project Nimu which are reported
to contain inferred resources of 1.3 billion pounds of contained copper
(averaging 1.1% Cu) in supergene oxide form and over 467 million pounds of
hypogene sulphide copper (to Chinese Reporting Standard).
* Commenced drilling in early April 2007 at the Tinggong licence area at
Nimu, which is adjacent to a working copper mine. First Nimu drilling
results are expected in May/June.
* Confirmed the potential of the Snow Mountain gold project through drilling,
tunnelling and trenching, and identified new areas of gold mineralisation.
* Increased international standard resources at the Snow Mountain Songpanguo
deposit from 59,500 oz to 210,000 oz. (at an average of 3.2 g/t Au). The
resources can be increased with additional infill drilling. The total
resource at Snow Mountain is around one million ounces of gold (Chinese
Reporting Standard) of which 375,000 oz. Au is now to International
Reporting Standard.
* Dr. Johnny Hon was appointed as non-executive Director and Ciceron "Jun"
Angeles as Exploration Manager
* Nigel Clark's status changed from non-executive to executive Chairman
reflecting increased time input in the Company.
* Over �2.55 million raised from warrant exercises and �3.75 million through
a placing in December 2006, putting the Company in a strong financial
position with �4.0 million of cash (2005: �1.4 million) as at the end of
December 2006.
Nigel Clark, Chairman of Central China Goldfields, commented:
"Last year we grew the portfolio considerably. This included adding our
flagship copper project Nimu where drilling has recently commenced. We are now
eagerly awaiting the first Nimu results in May or June. If the results are
positive, we will focus much of 2007's exploration effort on Nimu.
This year we will also be seeking to continue to grow the portfolio, with a
focus on quality over quantity. Our strategy is to ensure that the quality of
the portfolio remains high and that there is significant potential to add
value."
Technical information in Company news releases has been reviewed and approved
by Dr. Jeffrey Malaihollo. He holds a BA and PhD in Geological Sciences and is
a Fellow of the Geological Society.
For Further Information:
Central China Goldfields plc Hanson Westhouse Limited
Dr. Jeffrey Malaihollo Anita Ghanekar / 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
Dear Shareholders,
Since joining AIM in March 2005 Central China Goldfields (GGG) has accumulated
an impressive portfolio of projects that we believe are among the best of our
peer group in China.
The Chinese mining industry is changing rapidly. In recent years, we have seen
cash-rich domestic players beginning to acquire or take stakes in companies
involved in domestic exploration and development. Interestingly, the larger
companies are also attempting to secure strategic resources abroad.
As the industry advances, there have also been beneficial changes to the
regulatory environment in China, for example, with new labour and fiscal laws
being perfected. We believe there are more changes in the pipeline, as China
continues to give encouraging signals welcoming further foreign investment in
mining.
Moreover, we have been pleased to see the introduction of many positive changes
that are helping to improve the efficiency of resource exploitation, reduce
accidents and lessen the environmental impact from mining activities. Going
forward, there are, and will continue to be, many opportunities for
reinterpretation of existing data, for joint ventures, mergers, acquisitions
and consolidation.
At about this time last year I said that Central China Goldfields was extremely
well positioned to take advantage of the opportunities in China and I made a
strong point about being in the right place at the right time. This of course
referred to our team having the right mix of technical skills, corporate
expertise and cultural awareness as well as being on the ground with access to
a superior deal flow. This has been borne out by the addition of excellent
prospects to the portfolio over the past year, particularly the flagship Nimu
project in Tibet.
Last May, we signed a joint venture on the Nimu copper-molybdenum project with
our partner at the Snow Mountain Project, the Sichuan Bureau of Metallurgy and
Geological Exploration. Nimu represents the best set of geological, geophysical
and mineralogical prospects that I have had the pleasure to work on in my
career of 35 years in the mining industry. Exploration work at Nimu started in
June 2006 and by the end of the 2006 field season, we managed to identify eight
target areas and bring two of these forward to drill-readiness. We all eagerly
await results from initial drilling which started in April this year.
The Nimu prospects were acquired only 14 months after listing and are a great
credit to all involved and testament to the fact that we have a strong team who
understand how to operate in China to win the right areas.
Field exploration in Snow Mountain continued in 2006 and the exploration
programme continued to add to the resources at international (JORC or NI
43-101) standards.
Work on the gold-silver-base metal project in the Hubei Province, Xiang Shui
Tan, did not show sufficient promise for added value and was therefore dropped
in late 2006.
Two other prospects were added to the portfolio in 2006: Dong Mao Huo in Inner
Mongolia and De Ming Ding in Tibet. A joint venture agreement was signed for
Dong Mao Huo in late 2006 and we will start exploration in this prospect in
2007. De Ming Ding is a lower key, longer term play in an excellent address
close to the large Qu Long porphyry deposit in Tibet.
Although considerable effort went into negotiating the potential joint venture
with Majestic Gold, a number of circumstances led the board to decide that
completing the deal would not be in the best interest of our shareholders.
However, in the process we raised �3.75 million in December 2006 which, when
added to the �2.55 million from the exercise of warrants, gives the Company the
financial strength to pursue its principal projects at Nimu and Snow Mountain
during the 2007 field season.
This year the Company welcomed Dr. Johnny Hon as a non-executive Director and
Jun Angeles as Exploration Manager. Both have continued to strengthen the
Company in both corporate and technical areas.
There are now more than 30 full time employees working in our Joint Venture
companies in China and two employees in London. I would like to report that I
have recently changed my status from non-executive to executive Chairman
reflecting my increased time input into the Company. I am also very pleased to
have been re-elected again as Chairman of the China International Mining Group
("CIMG") for 2007; this being my fourth year as Chairman. The CIMG continues to
be the leading international association for interlocution with the Chinese
authorities regarding the mining sector. My work at CIMG has brought Central
China Goldfields to the forefront and an influential position in the Chinese
mining industry.
Central China Goldfields takes its corporate responsibilities very seriously
and we have continued to focus on health, safety, environmental and community
relations issues and boosted our training. All of these will be detailed in the
Annual Report.
The Company intends to keep its shareholders fully aware of progress. In 2006
there were 62 news releases - approximately five per month.
Outlook
Last year we grew the portfolio considerably. This included adding our flagship
copper project Nimu where drilling has recently commenced. We are now eagerly
awaiting the first Nimu results in May or June. If the results are positive, we
will focus much of 2007's exploration effort on Nimu.
This year we will also be seeking to continue to grow the portfolio, with a
focus on quality over quantity. Our strategy is to ensure that the quality of
the portfolio remains high and that there is significant potential to add
value.
Nigel Clark
Executive Chairman
Beijing
25 April 2007
CENTRAL CHINA GOLDFIELDS PLC
PROFIT AND LOSS ACCOUNT
Year ended Period from
31st Dec 2006 3 Nov 2004 to
31st Dec 2005
� �
Administrative expenses 1,100,246 532,127
------------ ------------
OPERATING LOSS (1,100,246) (532,137)
Interest receivable and similar income 66,571 61,616
------------ ------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,033,675) (470,511)
LOSS FOR THE FINANCIAL PERIOD (1,033,675) (470,511)
============ ============
LOSS PER SHARE (Fully Diluted) (�0.014) (�0.011)
All of the activities of the group are classed as continuing.
The group has no recognised gains or losses other than the results for the
period as set out above.
The company has taken advantage of section 230 of the Companies Act 1985 not to
publish its own Profit and Loss Account.
CENTRAL CHINA GOLDFIELDS PLC
GROUP BALANCE SHEET
As at As at
31st Dec 06 31st Dec 05
� �
FIXED ASSETS
Intangible assets 2,251,078 638,255
Tangible assets 1,961 727
------------ -----------
2,253,039 638,982
CURRENT ASSETS
Debtors 906,810 14,245
Cash at Bank 4,013,417 1,399,611
------------ -----------
4,920,227 1,413,856
CREDITORS: Amounts falling due 137,385 25,285
within one year
------------ -----------
NET CURRENT ASSETS 4,782,842 1,388,571
------------ -----------
7,035,881 2,027,553
============ ===========
CAPITAL AND RESERVES
Called-up equity share capital 1,142,990 522,450
Share premium account 7,397,077 1,975,614
Retained earnings (470,511) -
Profit and loss account (1,033,675) (470,511)
------------ -----------
SHAREHOLDERS' FUNDS 7,035,881 2,027,553
============ ===========
CENTRAL CHINA GOLDFIELDS PLC
GROUP CASH FLOW
Period from Period from
1 Jan 06 3 Nov 04
to 31st Dec 06 to 31st Dec 05
� �
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (1,877,742) (517,992)
RETURNS ON INVESTMENTS & SERVICING OF FINANCE
Interest received 66,571 61,616
CAPITAL EXPENDITURE
Payments to acquire intangible fixed assets (1,615,302) (640,938)
Payments to acquire tangible fixed assets (1,724) (1,139)
----------- -----------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (1,617,026) (642,077)
----------- -----------
CASH OUTFLOW BEFORE FINANCING (3,428,197) (1,098,453)
FINANCING
Issue of equity share capital 620,540 522,450
Share premium on issue of equity share capital 5,933,851 2,226,996
Share issue costs (512,388) (251,382)
----------- -----------
NET CASH INFLOW FROM FINANCING 6,042,003 2,498,064
----------- -----------
INCREASE IN CASH 2,613,806 1,399,611
OPENING CASH 1,399,611 -
----------- -----------
CLOSING CASH 4,013,417 1,399,611
=========== ===========
RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Period from Period from
1 Jan 06 3 Nov 04
to 31st Dec 06 to 31st Dec 05
� �
Operating loss (1,100,246) (532,127)
Amortisation of goodwill 2,479 2,683
Depreciation 490 412
(Increase) in debtors (892,565) (14,245)
Increase in creditors 112,100 25,285
----------- ----------
Net cash outflow from operating activites (1,877,742) (517,992)
=========== ==========
END
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