Half-yearly report
Hidefield Gold plc
Unaudited Interim Results for the Six Months Ended 30 June 2008
London, 29th September, 2008: Hidefield ("Hidefield" or the
"Company"), the gold company with advanced projects in Argentina,
Brazil and Alaska, including the Don Nicolas gold project in Santa
Cruz Province, Argentina announces its unaudited interim results for
the six months ended 30 June 2008.
HIGHLIGHTS
* Additional drill results from Phase III drill programme confirmed
impressive gold mineralisation on Sulfuro and Reyna veins in the
LaPaloma sector, Coyote vein systems in the Martinetas sector and
Trofeo vein in the Microondas sector of the Don Nicolas gold
project.
* Sale of residual Groundhog/Trefi coal interest for
C$250,000.
* �1,000,000 convertible loan facility arranged.
* Joint venture negotiations near to finalisation on Cata Preta
gold project, Brazil.
ABOUT HIDEFIELD
Hidefield is a gold company with a focus on the acquisition and
development of highly prospective projects in North and South
America. The Company has a diverse portfolio of projects. In South
America and Alaska the projects are directly held by Hidefield, while
those projects in Canada, Nevada and Arizona are held in independent,
self-funded associate companies.
Hidefield's substantial direct gold project interests are principally
in Argentina where the Company is actively exploring the advanced
stage Don Nicolas gold project in Santa Cruz Province with a mineral
resource estimate, prepared in compliance with JORC reporting
standards, of 1,214,000 tonnes at 7.7 gpt gold containing 301,600
ounces of gold using a high grade cut of 90 gpt gold (383,400 ounces
of gold at 9.8 gpt without high grade cut off).
The Company is exploring an extensive portfolio of gold exploration
licences in the Patagonian provinces of Santa Cruz and Chubut,
Argentina while in Brazil the Company's activities are focused on the
evaluation of the advanced stage Cata Preta gold project near the
historic city of Ouro Preto in the productive Quadrilatero Ferrifero
region of Minas Gerais state.
In Alaska, Hidefield has a 60% interest in the Golden Zone and South
Estelle mineral projects and an option to earn up to 100% interest,
subject to a 2.5% NSR, by making a series of staged cash, share and
property expenditures. The Golden Zone property is located 240 km
north of Anchorage and contains a measured and indicated resource of
approximately 253,000 ounces of gold, 1,180,000 ounces of silver and
6,114,000 pounds of copper. The South Estelle property, now in joint
venture, is located approximately 175 km northwest of Anchorage and
230 km southwest of the Golden Zone project and adjoins Kennecott's
Whistler copper-gold property.
For more information on Hidefield go to www.hidefieldgold.com.
For further information on this release, please contact:
Hidefield Gold Plc
Ken Judge, Chairman + 44 773 300 1002
Investor Relations
Paul Ensor: London + 44 20 79762889
Jon Bey: North America + 1 800 689 2599
Hanson Westhouse Limited (Nomad)
Tim Feather / Matthew Johnson + 44 113 246 2610
Landsbanki Securities (UK) Ltd (Broker)
Tom Hulme + 44 20 7426 9000
Executive Chairman's Statement
I am pleased to report to you on the progress your Company made
during 2008 to date and provide the unaudited interim results for the
six months ended on 30 June, which have neither been audited nor
reviewed pursuant to guidelines issued by the Auditing Practices
Board.
While the Board is pleased with the considerable progress we have
made with our exploration activities in Argentina and the business
development of our associate companies, this progress comes at a time
of considerable turmoil in the world's capital markets.
This progress has created significant value in our own projects,
especially in Patagonia and in the investments we hold in associate
companies. Although this value does not seem to be reflected by an
increasingly risk averse investment market, this value is recognised
by other companies operating in the resources sector. As a
consequence, we have seen a rise in expressions of interest in the
establishment of joint ventures on projects owned by the Group and
its associate companies. While the turmoil in the world's capital
markets continues it is likely the Group will need to seek additional
financing through joint ventures or other tie ups with industry
partners if we are to continue pressing ahead with our exploration
activities.
Argentina
During the first half of 2008 we continued to focus our attention on
drilling and exploration activities designed to advance the Don
Nicolas gold project towards a decision on the possible future
development of a gold mine on our extensive licence position in East
Santa Cruz Province, Patagonia, Argentina.
The Don Nicolas gold project initially comprises the "La Paloma" and
"Martinetas" sectors of our extensive property. These areas have
been the focus of all of our drilling activity to date which has
provided us with the basis for the completion of an independently
assessed initial Resource Statement for the project. This confirmed
a mineral resource of 1,214,000 tonnes at 7.7 grammes per tonne
("gpt") gold for 301,600 ounces of gold estimated using a high grade
cut of 90 gpt gold (9.82 gpt gold and 383,400 ounces gold if no high
grade cut was applied). The mineral resource estimate was prepared
by Resource Evaluations Pty. Ltd. of Perth, Australia, an independent
consultant engaged for the purpose of completing the report, and was
prepared in compliance with the Australasian Code for Reporting of
Mineral Resources by the Joint Ore Reserves Committee ("JORC").
Our Phase III drill programme was concluded during the first half of
2008 with drill results published during the first half of 2008
providing encouragement that we should expect a further expansion of
the initial resource estimate on the Don Nicolas gold project.
The Group's Scoping Study, completed just prior to the end of 2007,
was designed to assess the economic viability of the development of a
mine on the Sulfuro deposit, representing the most advanced of the
gold deposits and initially representing approximately 65% of the
resource identified on the Sulfuro and Martinetas sectors of the Don
Nicolas gold project.
Encouragingly, the Scoping Study confirmed that the Group's Sulfuro
deposit was already of sufficient size to support the development of
a profitable mining operation and this conclusion is expected to have
been further enhanced by the results of the recently completed Phase
III drill programme.
Accordingly and while continuing to focus our exploration activities
on the Sulfuro and Marinetas sectors of the Don Nicolas gold project,
we have added to our already substantial licence position in the East
Santa Cruz Province, increasing our holdings to approximately 230,000
hectares. We are now evaluating other high priority exploration
target areas identified across our extensive license portfolio which
occupies a substantial and central position in an area that has
increasingly attracted the exploration attention of a significant
number of international gold exploration and mining companies.
Brazil
We have also made excellent progress with discussions on a joint
venture for the Cata Preta project in Brazil and expect to be in a
position to shortly announce the successful completion of those
discussions. The Group's Sumidouro Dome project just north of the
Cata Preta project remains under the management of our joint venture
partner which has been carrying out field work to evaluate the
exploration potential of that property.
North America
The Group continues to actively pursue discussions with potential
joint venture partners for the Golden Zone project in Alaska, and we
remain optimistic that we can successfully conclude a joint venture
to continue advancement on the exploration targets we have identified
on this promising property.
The Group successfully disposed of its remaining 5% interest in the
Groundhog/Trefi coal licenses for gross proceeds of �125,590.
Associate Companies
Columbus Gold Corporation (currently approximately 19% owned)
continued to expand its portfolio of prospective exploration projects
in Nevada, Arizona and Utah, increasing the portfolio to 34 projects
as of the date of this report of which 14 have now been joint
ventured with suitably qualified and committed industry participants,
including several of the world's largest gold mining companies.
Exploration activities by Alto Ventures Limited, the Company's other
significant associate company investment (currently approximately 14%
owned following a C$2.65 million capital raising in Autumn 2007, and
the sale of a portion of the Group's shareholding) has been focused
on the now 100% owned Despinassy gold project in the Abitibi
greenstone belt, near Val d'Or, Quebec and the Mud Lake, Cote-Archie
Lake and Coldstream projects in Ontario, Canada. Ongoing exploration
on these projects confirmed the excellent exploration potential
within Alto Ventures' extensive exploration portfolio including
within the Beardmore-Geradlton camp which continues to attract
significant exploration and joint venture interest, including the
establishment of joint ventures on several of Alto's properties.
Interim Results
The unaudited results of our activities and transactions completed
during the period under review and ended 30 June 2008 reflect a
moderate decrease in the level of our exploration activities on our
Don Nicolas gold project in southern Argentina which resulted in a
consequential reduction in the loss before taxation of �423,214
(2007: �730,732).
Corporate Outlook
Your board is making every effort to ensure that the Group remains
funded to continue exploration activities on its priority projects,
but shareholders will understand that the pace of our progress with
those activities will ultimately be determined in large part by the
availability of finance. It is difficult to predict at this time how
the present turmoil in world capital markets will affect our efforts
to secure the finance our activities will require, but failure to
secure this finance in a timely fashion will undoubtedly adversely
impact or disrupt the progress of our exploration for some time and
could result in the decision to sell some of our properties and
projects which in other circumstances, we would much prefer to
explore ourselves.
Despite the negative outlook on the world's capital markets my
colleagues on the Board and our talented associates in North and
South America have remained focussed on advancing our project and
corporate interests. We are assisted in this effort by John
Prochnau, the Company's founder, who retired from the Board after the
recent Annual General Meeting at the end of July but continues to act
as the Group's principal geologic consultant. Following John's
retirement from the Board, we were pleased that Sean McGrath, our
CFO, accepted appointment to replace John on our Board, and on behalf
of my colleagues I welcome Sean to the Board.
.
.On behalf of the Board I wish to thank my colleagues for their
continuing efforts and our shareholders for their support, and while
the outlook for the junior resources sector remains difficult, I look
forward to reporting to you on the progress of our activities during
the remainder of 2008.
Kenneth P Judge
Chairman
29 September 2008
Unaudited Consolidated Income Statement
For the six months ended 30 June 2008
Six months Six months Year
ended 30 June ended 30 June ended 31
2008 2007 December 2007
� � �
Expenses
Administrative expenses 354,727 674,606 1,249,745
Provision for diminution in
value of mineral rights - - 1,304,851
Total expenses (354,727) (674,606) (2,554,596)
Loss from operations (354,727) (674,606) (2,554,596)
Finance income 31,924 41,939 58,177
Gain on disposal of mineral
rights 125,590 - -
Gain on disposal and deemed
disposal of associates 60,053 20,167 507,640
Impairment of associate
investments (164,162) - -
Share of operating loss in
associates (79,191) (118,232) (267,415)
Loss for the period before
taxation (380,513) (730,732) (2,256,194)
Tax expense (42,701) - -
Loss for the period
attributable to equity
holders
of the parent (423,214) (730,732) (2,256,194)
Loss per ordinary share
- Basic & Diluted (0.15p) (0.28p) (0.84p)
Unaudited Consolidated Statement of Recognised Income and Expense
For the six months ended 30 June 2008
Six months Six months Year ended 31
ended 30 June ended 30 June December 2007
2008 2007 �
� �
Exchange adjustments on
foreign currency net
investments (33,054) (198,481) (234,191)
Net income recognised
directly in equity (33,054) (198,481) (234,191)
Loss for the period
attributable to equity
holders
of the parent (423,214) (730,732) (2,256,194)
Total recognised income and
expense for the period
attributable to the equity
holders of the parent (456,268) (929,213) (2,490,385)
All amounts relate to continuing activities.
Unaudited Consolidated Balance Sheet
As at 30 June 2008
At At At
30 June 30 June 31 December
2008 2007 2007
� � �
ASSETS
Non-current assets
Mineral rights 6,981,506 6,617,779 6,015,571
Property, plant and equipment 299,086 251,364 302,687
Investments in associates 1,613,676 2,205,163 1,835,666
Financial asset -
available-for-sale investment 11,210 10,540 14,006
8,905,478 9,084,846 8,167,930
Current assets
Trade and other receivables 838,506 802,467 979,368
Cash and cash equivalents 256,602 1,686,204 1,170,822
1,095,108 2,488,671 2,150,190
TOTAL ASSETS 10,000,586 11,573,517 10,318,120
LIABILITIES
Current liabilities
Trade and other payables 437,895 108,121 385,570
Related party loan 126,000 - -
Corporate tax payable 144,435 310,155 287,951
708,330 418,276 673,521
SHAREHOLDERS' EQUITY
Share capital 2,753,227 2,751,826 2,752,527
Share premium 12,354,776 12,348,210 12,351,711
Other reserves 3,613,340 3,533,628 3,576,492
Foreign currency translation
reserve (954,113) (951,456) (987,167)
Available-for-sale reserve 5,759 5,092 8,556
Retained deficit (8,480,733) (6,532,059) (8,057,520)
9,292,256 11,155,241 9,644,599
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 10,000,586 11,573,517 10,318,120
The unaudited interim consolidated financial statements were approved
by the Board of Directors and authorised for issue on 29 September
2008
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 June 2008
Six months Six months Year
ended 30 June ended 30 June ended 31
2008 2007 December 2007
� � �
Cash flow from operating
activities
Loss for the period (423,214) (730,732) (2,256,194)
Adjustments for:
Depreciation 1,383 9,969 3,584
Interest receivable (31,924) (15,627) (31,865)
Share of operating loss in
associates 79,191 118,232 267,415
Gain on deemed disposal of
associate (32,263) (20,167) (195,535)
Gain on disposal of
associate (27,790) - (312,105)
Gain on disposal of mineral
property interest (125,590) - -
(Gain) / loss on
revaluation of financial
assets
- fair value through profit
or loss - (26,312) (26,312)
Provision for impairment 164,162 - 1,304,851
Share based payment costs 36,848 42,864 85,728
Directors' remuneration
paid by issue of shares 3,766 2,940 7,140
Foreign exchange
differences (79,248) (4,385) (3,844)
Increase (decrease) in
payables 125,709 (223,042) 402
Decrease in receivables 80,178 238,980 122,655
Net cash used in operations (228,792) (607,280) (1,034,080)
Income taxes paid (143,555) - -
Net cash flow used in
operating activities (372,347) (607,280) (1,034,080)
Investing activities
Payments for property,
plant and equipment (4,573) (1,531) (86,274)
Proceeds from the disposal
of financial assets - 208,823 208,823
Proceeds from the disposal
on mineral rights 125,590 - -
Interest receivable 31,924 15,627 31,865
Proceeds from the disposal
of associate investments 60,420 - 665,364
Exploration costs
capitalised (890,018) (181,372) (915,116)
Acquisition of associate
investment - (112,742) (112,742)
Net cash flow used in
investing activities (676,657) (71,195) (208,080)
Financing activities
Issue of ordinary shares - 2,130,000 2,130,000
Cost of share issue - (85,463) (85,463)
Advance from related party 126,000 - -
Net cash flow from
financing activities 126,000 2,044,537 2,044,537
Net decrease in cash and cash
equivalents
in the period (923,004) 1,366,062 802,377
Cash and cash equivalents at the
beginning of the period 1,170,822 344,164 344,164
Effect of foreign exchange rate changes
on cash
and cash equivalents 8,784 (24,022) 24,281
Cash and cash equivalents at the end of
the period 256,602 1,686,204 1,170,822
1. Principal accounting policies
These interim consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS").
The basis of preparation and accounting policies used in preparing
the interim accounts for the six months ended 30 June 2008 are set
out below.
2. Basis of preparation
This unaudited interim consolidated financial information has been
prepared using the recognition and measurement principles of
International Accounting Standards, International Financial Reporting
Standards and Interpretations adopted for use in the European Union
(collectively EU IFRSs). The principal accounting policies used in
preparing the interim results are unchanged from those disclosed in
the group's statutory financial statements for the year ended 31
December 2007, and are expected to be consistent with those policies
which will be in effect at the year end.
The financial statements are presented in Great British Pounds
('GBP') and all values are rounded to the nearest pound (�) except
when otherwise indicated.
The financial information for the six months ended 30 June 2008 and
30 June 2007 is unaudited and does not constitute the group's
statutory financial statements for those periods within the meaning
of section 240 of the Companies Act 1985. The comparative financial
information for the full year ended 31 December 2007 has, however,
been derived from the statutory financial statement for that period.
A copy of those statutory financial statements has been delivered to
the Registrar of Companies. The auditors' report on those accounts
was unqualified, did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report and did not contain a statement under section 237(2)-(3)
of the Companies Act 1985.
3. Loss per ordinary share
The basic loss per share of 0.15 pence (2007 - 0.28 pence) is
calculated on the loss for the period attributable to equity holders
of the parent of �423,214 (2007 - �730,732) and on 275,333,255 (2007
- 264,395,816) ordinary shares, being the weighted average number of
ordinary shares in issue during the year ended 30 June 2008. Due to
the losses incurred during the period a diluted loss per share has
not been calculated as this would serve to reduce the basic loss per
share.
There are options and warrants outstanding at the end of the year
that could potentially dilute basic earnings per share in the future.
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