RNS Number:0336U
Leyshon Resources Limited
30 March 2007
Leyshon Resources Limited
Interim Financial Report
For the half-year ended 31 December 2006
REVIEW AND RESULTS OF OPERATIONS
Operating Results
Net operating loss after tax attributable to members of the Consolidated Entity
for the half-year ended 31 December 2006 was $6,709,388 (2005: Net operating
loss after tax of $3,255,295).
Operations
Zheng Guang
A 29,106 metre drilling programme was completed during the half-year comprising
16,100 metres of reverse circulation drilling and 13,006 metres of diamond
drilling. The programme was one of the largest drilling programmes undertaken in
Heilongjiang in recent years.
The programme is expected to increase the initial JORC compliant inferred
resource estimate reported in May 2006 of 930,000 ounces of gold, 64,000 tonnes
of zinc and 2.6 million ounces of silver (equivalent to 1.2 million ounces of
gold based on 1 g/t gold - 1% zinc). The estimate has been made by Hellman and
Schofield of Australia and is based on the results from the 2004 and 2005
programmes.
The Company, in conjunction with joint venture partner, the Qiqiha'er brigade of
the Heilongjiang Bureau of Mineral Resources, have announced their intention to
develop the Zheng Guang gold project as the first ever Sino Foreign owned gold
mine in the mineral rich province of Heilongjiang, northeast China.
The project's current scope is as an open cut mine initially treating gold ore
to produce approximately 100,000ozpa with annual revenues at current gold prices
in excess of US$60 million.
Revenue and earnings are expected to increase with the commissioning of a zinc
flotation circuit in 2011, which is designed to lift gold recovery and allow a
zinc concentrate to be produced for sale to Chinese smelters. Optimisation
testwork is underway which, upon completion in early 2007, will allow zinc
production, operating costs and sales terms to be finalised.
Final design studies are underway and are being undertaken by Australian and
Chinese consultants.
Corporate
The Company raised 8.3 million ($20.75 million) during the half-year through the
issue of 37,731,000 ordinary shares at 22 pence ($0.55) per share (before issue
costs). The placement occurred in two tranches with 23,786,984 being issued
immediately and the remaining 13,944,016 being subject to shareholder approval
which was received on 17 January 2007.
PAUL ATHERLEY
Director
Beijing, 30 March 2007
A copy of the audit review report is available from Stacey Apostolou on +618
9324 8525 or sapostolou@leyshonresources.com upon request.
For further information contact:
Leyshon Resources Tel: +86 10 869 9382
Paul Atherley - Managing Director Mob:+61 417 475 038
Seymour Pierce Ltd
Jonathan Wright Tel: +44 207 107 8000
Geological Information
The information in this report relating to exploration results, mineral
resources or ore reserves is based on information compiled by Mr Malcolm Wilson.
At the time of its compilation, Mr Wilson was a full time employee of the
Company. Mr Wilson is a member of the Australasian Institute of Mining and
Metallurgy.
Mr Wilson has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking and accordingly is a Qualified Person under AIM rules, as well
as a Competent Person as defined in the 2004 Edition of the 'Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr
Wilson consents to the inclusion in this announcement of the matters based on
his information in the form and context in which it appears.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006
Note Half-year Ended Half-year Ended
31 Dec 2006 31 Dec 2005
$ $
Revenue 2 151,364 207,161
Exploration expenses (5,333,249) (2,481,222)
Administration expenses (1,214,146) (957,475)
Business development expenses (313,357) (532,097)
----------- -----------
Loss before income tax (6,709,388) (3,763,633)
Income tax expense - -
----------- -----------
Loss for the half-year (6,709,388) (3,763,633)
Loss attributable to minority
interest - 508,338
----------- -----------
Loss attributable to members of
Leyshon Resources Limited (6,709,388) (3,255,295)
=========== ===========
Earnings Per Share
Basic loss per share (cents per
share) (4.41) (2.48)
Diluted loss per share (cents per
share) (4.41) (2.48)
The above Consolidated Income Statement should be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2006
Note 31 Dec 2006 30 Jun 2006
$ $
ASSETS
Current Assets
Cash and cash equivalents 14,042,909 8,434,899
Trade and other receivables 249,554 119,476
Other 52,354 68,781
---------- ----------
Total Current Assets 14,344,817 8,623,156
---------- ----------
Non-Current Assets
Other financial assets 510,000 526,001
Property, plant and equipment 17,492 9,786
Exploration and evaluation expenditure 12,722,473 12,722,473
---------- ----------
Total Non-Current Assets 13,249,965 13,258,260
---------- ----------
TOTAL ASSETS 27,594,782 21,881,416
---------- ----------
LIABILITIES
Current Liabilities
Payables 177,602 390,232
Provisions 70,819 40,241
---------- ----------
Total Current Liabilities 248,421 430,473
---------- ----------
Non-Current Liabilities
Deferred tax liabilities 3,604,688 3,604,688
---------- ----------
Total Non-Current Liabilities 3,604,688 3,604,688
---------- ----------
TOTAL LIABILITIES 3,853,109 4,035,161
---------- ----------
NET ASSETS 23,741,673 17,846,255
========== ==========
EQUITY
Issued capital 7 47,294,354 34,866,587
Reserves 6,018,612 5,841,573
Accumulated losses (29,691,179) (22,981,791)
---------- ----------
Parent entity interest 23,621,787 17,726,369
Minority interest 119,886 119,886
---------- ----------
TOTAL EQUITY 23,741,673 17,846,255
========== ==========
The above Consolidated Balance Sheet should be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006
Half-year Half-year
Ended Ended
31 Dec 2006 31 Dec 2005
$ $
Issued Capital
Issued and paid up capital - at the
beginning of the half-year 34,866,587 28,689,432
---------- ----------
Transactions with equity holders in their capacity as
equity holders:
Gross contributions of equity 13,081,860 -
Share issue expenses (654,093)
---------- ----------
12,427,767 -
---------- ----------
Issued and paid up capital - at the end
of the half-year 47,294,354 28,689,432
========== ==========
Employee Benefit Reserve
Balance at the beginning of the year 964,169 880,204
Employee benefit expense - Share
options 177,038 73,897
---------- ----------
Employee benefit reserve at the end of
the half-year 1,141,207 954,101
========== ==========
Option Premium Reserve
Option premium reserve at the beginning
of the half-year 3,837,841 3,725,000
Share options - -
---------- ----------
Option premium reserve at the end of
the half-year 3,837,841 3,725,000
========== ==========
Foreign Exchange Reserve
Foreign exchange reserve at the
beginning of the half-year 4,563 -
Exchange differences on translation of
foreign operations attributable to
members of Leyshon Resources Limited - 4,563
---------- ----------
Foreign exchange reserve at the end of
the half-year 4,563 4,563
========== ==========
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006 (CONTINUED)
Half-year Ended Half-year Ended
31 Dec 2006 31 Dec 2005
$ $
========== ==========
Investment Revaluation Reserve
Investment revaluation reserve at the
beginning of the half-year 1,035,000 -
Gain on available for sale investment - 1,035,000
---------- ----------
Investment revaluation reserve at the
end of the half-year 1,035,000 1,035,000
========== ==========
Accumulated Losses
Accumulated losses at the beginning of
the half-year (22,981,791) (14,834,084)
Adjustment on adoption of AASB 132 and
AASB 139, net of tax - 60,000
---------- ----------
Restated balance after adoption of AASB
132 and 139 (22,981,791) (14,774,084)
Loss for the half-year attributable to
members of Leyshon Resources Limited (6,709,388) (3,255,295)
---------- ----------
Accumulated losses at the end of the
half-year (29,691,179) (18,029,379)
========== ==========
Minority Interest
Minority interest at the beginning of
the half-year 119,886 117,930
Exchange differences on translation of
foreign operations attributable to the
minority interest - 1,956
Loss for the half-year attributable to
the minority interest - (508,338)
Additions to the minority interest - 449,367
---------- ----------
Minority interest at the end of the
half-year 119,886 60,915
========== ==========
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006 (CONTINUED)
Half-year Half-year
Ended Ended
31 Dec 2006 31 Dec 2005
$ $
Total recognised income and expense for the half
year:
Exchange differences on translation of foreign
operations:
- Members of Leyshon Resources Limited - 4,563
- Minority interest - 1,956
Gain on available for sale investments 1,035,000
---------- ----------
Net income recognised directly in
equity - 1,041,519
Loss for the half-year attributable to:
- Members of Leyshon Resources Limited (6,709,388) (3,255,295)
- Minority interest - (508,338)
---------- ----------
Total recognised income and expense for
the half-year (6,709,388) (2,722,114)
========== ==========
Attributable to:
Members of Leyshon Resources Limited (6,709,388) (2,215,732)
Minority interest - (506,382)
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006
Half-year ended Half-year ended
31 Dec 2006 31 Dec 2005
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (6,572,584) (3,606,185)
Receipts from customers - 22,337
Interest received 151,364 204,648
Interest paid (1,725) (134)
------------ -----------
Net cash flows used in operating
activities (6,422,945) (3,379,334)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of plant and equipment (12,071) (2,999)
Refunds of security bonds 16,000 7,500
------------ -----------
Net cash flows from/(used in) investing
activities 3,929 4,501
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 13,081,860 -
Share issue expenses paid (895,062) -
------------ -----------
Net cash flows from financing activities 12,186,798 -
------------ -----------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS 5,767,782 (3,374,833)
Cash and cash equivalents at the beginning
of the half-year 8,434,899 9,488,951
Effects of exchange rate changes on cash
and cash equivalents (159,772) 12,413
------------ -----------
CASH AND CASH EQUIVALENTS AT THE END OF
THE HALF-YEAR 14,042,909 6,126,531
============ ===========
The above Consolidated Cash Flow Statement should be read in conjunction with
the accompanying notes.
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This general purpose financial report for the interim half-year reporting period
ended 31 December 2006 has been prepared in accordance with Accounting Standard
AASB 134 Interim Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report of Leyshon Resources Limited for
the year ended 30 June 2006 and any public announcements made by Leyshon
Resources Limited and its subsidiaries during the interim reporting period in
accordance with the continuous disclosure requirements of the Corporations Act
2001.
(a) Basis of preparation of half-year financial report
The condensed financial statements have been prepared on the basis of historical
cost, except for the revaluation of certain non-current assets and financial
instruments. Cost is based on the fair values of the consideration given in
exchange for assets. All amounts are presented in Australian dollars.
The accounting policies and methods of computation adopted in the preparation of
the half-year financial report are consistent with those adopted and disclosed
in the company's 2006 annual financial report for the year ended 30 June 2006,
other than as detailed below.
In the current year, the Group has adopted all of the new and revised Standards
and Interpretations issued by the Australian Accounting Standards Board (the
AASB) that are relevant to its operations and effective for annual reporting
periods beginning on or after 1 July 2006. The adoption of these new and revised
standards has resulted in changes to the Group's accounting policies in the
following areas:
*Investments at fair value through profit or loss
Limitation of ability to designate financial assets and financial liabilities
through profit or loss.
The Australian Accounting Standards Board ('AASB') released AASB 2005-4
'Amendments to Australian Accounting Standards' in June 2005. AASB 2005-4 amends
AASB 139 "Financial Instruments: Recognition and Measurement' by limiting the
ability of entities to designate any financial asset or liability as 'at fair
value through profit or loss'.
Financial assets that can no longer be designated as 'at fair value through
profit or loss' shall be classified into either loans and receivables, held to
maturity investments or available-for-sale investments, as appropriate, and
measured at amortised cost or at fair value with changes in fair value
recognised in equity, depending on classification. Financial liabilities that
can no longer be designated as 'at fair value through profit or loss' shall be
classified as 'other' financial liabilities and measured at amortised cost.
The changes introduced by AASB 2005-4 are applied by the Group with effect from
the beginning of the comparative reporting period presented in this financial
report (ie with effect from 1 July 2005). The amendments are made in accordance
with the transitional provisions of AASB 2005-4 and result in options held by
the Group with a carrying value at 1 July 2005 (the date of designation) of
$255,000 that were previously designated as 'at fair value through profit or
loss' being reclassified as available for sale investments. Fair value movements
post 1 July 2005 are recognised directly in the investment revaluation reserve.
The impact of this classification is that, in the Group's financial statements,
other income for the half-year ended 31 December 2005 decreased by $1,035,000
and gains recognised in the investment revaluation reserve for the half-year
ended 31 December 2005 increased by $1,035,000 from that which was reported in
the 2005 Half-year Financial Report.
2. REVENUE
Half-year Half-year
Ended Ended
31 December 31 December
2006 2005
$ $
Interest received/receivable 151,364 207,161
========== =========
3. DIVIDENDS PAID OR PROVIDED FOR
No dividends have been paid or provided for during the half-year.
4. SEGMENT INFORMATION
The Consolidated Entity operates in one business segment, being the mining and
exploration of gold and other minerals in the resources sector, in the following
geographical segments:
Half-year 2006 Australia China Unallocated Consolidated
Half -Year Half -Year Half -Year Half -Year
2006 2006 2006 2006
$ $ $ $
Revenue
Total segment revenue 150,655 709 - 151,364
Unallocated revenue - - - -
--------- --------- ---------- -----------
Total revenue 150,655 709 - 151,364
--------- --------- ---------- -----------
Results
Segment result (1,593,795) (5,115,593) - (6,709,388)
Unallocated revenue less - - - -
unallocated expenses --------- --------- ---------- -----------
Loss before income tax (1,593,795) (5,115,593) - (6,709,388)
--------- --------- ---------- -----------
Half-year 2005 Australia China Unallocated Consolidated
Half -Year Half -Year Half -Year Half -Year
2005 2005 2005 2005
$ $ $ $
Revenue
Total segment revenue - - - -
Unallocated revenue - - - -
--------- --------- ---------- -----------
Total revenue - - - -
--------- --------- ---------- -----------
Results
Segment result (1,026,836) (2,943,958) - (3,970,794)
Unallocated revenue less
unallocated expenses - - 207,161 207,161
--------- --------- ---------- -----------
Profit/(loss) before
income tax (1,026,836) (2,943,958) 207,161 (3,970,794)
--------- --------- ---------- -----------
5. SUBSEQUENT EVENTS AFTER BALANCE DATE
Subsequent to the end of the half-year reporting period, the Company received
shareholder approval for the second tranche of shares issued as part of the
placement undertaken in December 2006. This resulted in the issue of 13,944,016
ordinary fully paid shares at an issue price of 22 pence per share.
6. CONTINGENT ASSETS AND LIABILITIES
At the last annual reporting date, the Consolidated Entity had the following
disclosed contingent liability. There has been no material change in the
contingent assets or liabilities of the Consolidated Entity during the
half-year.
Historical fixed and floating charge
In June 1987 the Company entered into a joint venture agreement ("JVA") with two
other parties. Pursuant to the JVA, a registered cross charge was entered into
with the parties to the JVA to secure payment obligations under a joint venture.
The joint venture no longer operates but the charge remains registered. The
charge was granted in favour of two parties, one of which is deregistered, the
other liquidated. The Company does not believe that there is any liability
outstanding under the charge, however due to the administrative difficulty in
removing the charge resulting from the counterparties being deregistered, the
charge may continue to be registered.
7. ISSUANCES, REPURCHASES AND REPAYMENTS OF EQUITY SECURITIES
During the half-year reporting period, Leyshon Resources Limited issued
23,786,984 ordinary shares for a total value before issue costs of $13,081,860.
A further 10,000,000 ordinary shares were issued on conversion of the
convertible preference shares for a value of $200,000. There were no other
movements in ordinary share capital or other issued share capital of the Company
during the current or prior half-year reporting period.
Leyshon Resources Limited issued 1,900,000 options over shares to executives
during the period, with details as follows:
Grant date Number of Exercise price ($) Expiry date Vesting date
options
15 Nov 06 150,000 0.40 30 Nov 09 15 Nov 06
15 Nov 06 825,000 0.40 30 Nov 09 15 May 07
15 Nov 06 925,000 0.55 30 Nov 09 15 Nov 07
The options have a total value of $685,150 of which $177,038 has been recognised
at 31 December 2006. There were no other movements in share options of the
Company during the current or prior half-year reporting period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKCKBOBKDDNB
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