TIDMLRL
RNS Number : 3345A
Leyshon Resources Limited
31 January 2011
31 January 2011
DECEMBER 2010 QUARTERLY REPORT
Leyshon Resources Limited (AIM/ASX: LRL) (Company) announces
that during the quarter it continued to review, and is continuing
to undertake due diligence on, a number of project investment
opportunities, some of which have the potential to meet the
Company's investment criteria.
The Company remains alive to possibilities both internationally
and within China. It is currently focusing on thermal and coking
coal and gold opportunities in the north western Chinese Provinces
of Inner Mongolia, Xinjiang and Southern Mongolia.
As previously announced, the Company has applied for five
licences in South West Mongolia. The Mongolian government tender
process, which involves a large number of licences and applications
by other companies, did not commence in December 2010 as planned.
The Company continues to monitor developments closely.
The Company is in active discussions with vendors of large
thermal coal projects in Xinjiang and Inner Mongolia. Due diligence
is well advanced and the results suggest that the projects have the
potential to meet the Company's investment criteria. Commercial
discussions and due diligence are ongoing and are expected to
continue during the current quarter.
In addition to the thermal and coking coal projects, the Company
is actively reviewing epithermal gold and copper targets
particularly in the major metallogenic Tien Shan belt in northern
Xinjiang and also elsewhere in China.
The Company has completed a detailed due diligence exploration
programme on a gold project located in a historic mining district
in north-west Xinjiang. Commercial negotiations have commenced and
are expected to continue during the current quarter.
The Company continues to generate investment proposals from many
locations around the world and it actively considers each one in
light of its competitive advantage of being located in Beijing and
able to access the Chinese end user market.
The Company remains diligent in its assessment of assets at all
times and is therefore prepared to commit significant expenditure
on due diligence and other studies before committing to a
transaction. The Company can give no assurance that these due
diligence investigations and/or discussions will successfully
conclude in an acquisition.
As previously advised the Company successfully completed its
readmission to AIM and as part of the readmission placed 30,435,130
new ordinary fully paid ordinary shares at A$0.23 and raised
approximately A$7 million before costs.
The shares were placed with a number of high profile
institutional investors who are supportive of the Company's
business plans. The placees include IDG-Accel China Growth Fund II
L.P. and its affiliated entity (collectively, "IDG-Accel Funds"),
as managed by IDG Capital Partners, which now becomes a major
shareholder holding approximately 8% of the Company.
IDG Capital Partners is a China-focused investment firm with
over US$2.5 billion capital under management. It was one of the
earliest foreign investment funds to enter the Chinese market and
since 1992 it has invested in high quality companies with long-term
growth potential.
The Company has also now achieved Wholly Owned Foreign Investor
(WOFE) status for it's activities and investments in China. This is
an important step as it allows the Company to make investments and
undertake its business activities in China within a regulatory
framework that is much closer to that governing local companies
than was previously the case.
The Company has also created and appointed four members to a
Beijing based Advisory Board. The purpose of the Advisory Board is
to provide guidance in relation to the Company's investments in
China. The Advisory Board members will provide specific advice in
relation to investments within China, provide introductions to
relevant government bodies and where appropriate represent the
Company at various levels of government.
The appointees are all senior officials who have held positions
in the Ministry of Lands and Resources. The Advisory Board members
are supportive of the Company's investment plans.
The Ministry of Lands and Resources is responsible for all
exploration and mining activities and is one of the Chinese
Government's most senior Ministries ranking alongside the National
Development and Reform Commission and the Ministry of Commerce in
terms of seniority.
The Company also continues to work closely with the Australian
Government's Austrade office in Beijing. During the quarter
Austrade's Minister (Commerce) hosted a delegation to the western
Chinese province of Xinjiang in support of Leyshon's ongoing
interest in investment in the province.
Subsequent to the end of the quarter the Company announced the
end of the share buyback programme. In total the Company purchased
2,165,098 shares at an average of 17.4 A$ cents and 10.8 pence per
share. During the quarter the Company's share price has traded at
or above net asset backing with good liquidity in both London and
Australia.
At quarter end, the Company had A$52.8 million in cash, and is
due A$1.4 million in term deposit interest for a total of A$54.2
million. This is an increase on the funds held immediately
following settlement on the sale of the Zheng Guang gold project in
December 2009 and is equivalent to 22 A$ cents per share and 13.7
pence per share.
For further information contact:
Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +86 137 1800 1914
patherley@leyshonresources.com
Seymour Pierce
Jonathan Wright/John Cowie (Nominated adviser)
Richard Redmayne/Leti McManus (Corporate broking)
Tel: +44 (0)207 107 8000
http://www.leyshonresources.com
Background
Leyshon was on the ground in 2003 when China opened its mining
sector to foreign investment. It has been fully engaged in China
since then and has its main operating office located in
Beijing.
China's latest Five Year Plan emphasizes Inclusive Growth which
entails the planned urbanization of a large number of Western
China's rural population into second and third tier cities. This
will result in significant increases in power consumption and
infrastructure spending.
The Company is planning to invest in high quality coal assets in
Xinjiang and South West Mongolia which will sell into the
escalating demand for thermal and metallurgical coal across China
over the next ten years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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