Cambridge Minerals Resources Plc / Index: AIM / Epic: CMR / Sector: Mining
22 July 2008
Cambridge Mineral Resources Plc ('CMR' or 'the Company')
Final Results
Cambridge Mineral Resources Plc, the AIM listed mining exploration and production company primarily targeting
precious metals in South America, announces its results for the year ended 31 December 2007.
CHAIRMAN'S STATEMENT
2007 was another positive year for Cambridge Mineral Resources plc as it continued its progress and added
value to its portfolio of mineral projects. In particular, our drive towards precious metal production of
100,000 ozs gold per annum in South America advanced and we expect to commence gold production in Colombia
later in 2008.
Despite considerable turbulence and difficulties in the financial markets, Cambridge Mineral Resources plc
(CMR) succeeded in financing Quintana, its first gold mine in Colombia and also obtained a conditional
finance facility for the development of two further gold mines in that country.
Precious and base metal prices continued to increase, adding further potential value to CMR's projects.
Highlights during the year include:
Colombia
At our Quintana Gold Mine, we successfully completed a drilling programme in March followed in June by the
completion of an independently-verified feasibility study, which confirmed initial reserves and resources
totalling 86,000 ozs of gold. Following a review of the economics we decided to proceed with the mine. We
approached financial institutions to seek funding for the project during the second half of 2007 and were
able to successfully arrange and complete the funding in January 2008.
Peru
In February we obtained an option to purchase our partner's 50% interest in the Patachanca claim group,
which we exercised in November. At our Rasuhuilca silver mine, underground development advanced with
positive results and we commenced a feasibility study. Assuming a positive outcome to that study and
obtaining the required finance, we expect to commence production in 2009.
Bulgaria
In August, we announced our holding of 1.5 million pounds of U308 uranium on one of our existing licenses.
In October, Electrum Limited, a private international exploration group, became our joint venture partners
replacing Asia Gold. Under the terms of this agreement, Electrum has to spend US$2.2 million to earn 80%
of the projects concerned. Their spend to date is US$0.8 million.
Spain
The Company's 100%-owned projects in the Iberian Pyrite Belt in south-western Spain are: Lomero-Poyatos, a
polymetallic underground mine on which we have previously completed a scoping study, and Masa Valverde, a
base-metal exploration project containing the largest unmined sulphide ore body in the region. In May an
independent NI 43-101 compliant study of our Spanish assets was completed, leading to discussions with
third-parties regarding possible opportunities to finance and advance these projects.
Corporate
During the year, the Company raised a total of �1,411,500 before expenses in new equity via private
placements. The majority of the funds raised were applied to financing the development of our South
American projects. Further capital will need to be raised in 2008.
The loss for the year was �646,399 (2006: loss of �797,636). CMR continues to seek to minimise
administration expenditure, notwithstanding the increasing burden of regulatory compliance costs.
Finally, the Company's South American assets have continued to develop. Our strategies for gold and silver
production are on course in South America against a background of strong metal prices. We look forward to
joining the ranks of junior gold and silver producers during the current financial year. To conclude, I
would like to thank our shareholders for their continued support and our staff for their dedication and
hard work.
Neil Maclachlan
Chairman
OPERATIONS REPORT
Colombia
Introduction
CMR entered Colombia at the end of 2005 and holds its interests through its wholly owned subsidiary,
Colgold Inc. During 2007 the Company acquired two further concessions within the world-class Frontino Gold
Belt in the Antioquia Department of north-western Colombia.
In total Colgold now holds 52,745 hectares of land under concession or application in Colombia, of which
35,135 hectares is held for its potential to host copper and gold porphyries in the Cauca Department of
south-west Colombia.
During the year Colgold employed up to 65 sub contractors at its operations in Colombia. Colgold's recently
assembled in-house diamond drilling team completed approximately 2,500m of drilling on Company properties
at an average cost of approx US$75 per metre (less than 50% of third party commercial rates). During the
second half of the year, the drill rig and crews were contracted out to third parties, to ensure maximum
return on the investment and to produce some additional income for the Company. Expressions of interest
and confidentiality agreements have been signed with a number of major companies regarding Colgold land
holdings in the Three Hills area of south-west Colombia.
Frontino Gold Belt
CMR continued to focus on the Frontino Gold Belt in the Antioquia Province, as this area has historically
produced approximately 45% of the country's gold and continues to do so. This belt is one of the world's
greatest mesothermal gold fields, with estimated production of 8-9Mozs from the Segovia-Remedios region
alone. Mineralization occurs within extensive vein structures typically exhibiting widths from a few
centimetres to several metres but typically in the 1 to 2m range. These veins are either near-vertical or
dip at 30-45 degrees and are formed by ribbon-banded quartz with subordinate pyrite, sphalerite and galena
containing free gold and have simple metallurgical profile with excellent recoveries. Veins have been
traced along strike for several thousand metres and at distances of up to 1,800m down dip.
CMR has 3 main projects within a 20km radius of Segovia-Remedios: Quintana, La Rosaleda and El Cinco. The
eventual construction of a central processing plant offers a rapid method to enable multi-mine start-ups
and the Company plans to develop this to a capacity of in excess of 100,000ozs per annum over the next 4
years.
Quintana
The Quintana Project, which includes the Las Camelias property, is made up of 6 mining titles and one
application and totals 7,667 hectares.
The Quintana Vein is a mesothermal quartz-sulphide gold vein dipping at 40 degrees to the east and averages
just over 1m true thickness in the mine. A 10 drill hole programme completed in 2007, proved the existence
of the vein 300m down dip and returned higher grades than seen so far in the mine and also generally better
true widths. At Quintana progress has been achieved by underground development with development completed
on three levels to more than 100m down dip from the surface. Combined with the drill programme, this work
has enabled the definition of a JORC compliant resource statement which has defined 109,852 tonnes at
24.58g/t gold, 19.85g/t silver (measured, indicated and inferred) containing 86,822ozs of gold.
This resource is still open along strike and at depth below the deepest drill intersects. In June 2007 CMR
completed a feasibility study as to the viability of the Quintana operations, which concluded that the
project would give an NPV of US$10.8m at a 10% discount rate, based on a 50 t/d operation over 5.5 years
and a gold price of US$600.
The initial capital expenditure was estimated at US$4.54m, with an average cash operating cost of US$131/oz
over the mine life. In January 2008, CMR reported the completion of Project Finance to allow commencement
of the necessary plant and infrastructure construction at the project, with the aim of achieving gold
production within approximately six months. Work commenced on site in February and is currently proceeding
according to schedule.
The Quintana Mine is expected to commence production in Q4 2008 at a rate of ~15,200 ozs of gold and 6,000
ozs of silver per annum. Drilling currently underway may lead to further resources being defined and this
production rate being increased.
El Cinco
CMR completed the negotiation of the Colina Negra Project, to give it majority interest in a contiguous
block of 7,400 hectares (6 concessions and one application) around the El Cinco and Colina Negra mines.
Work on site in 2007 included the successful completion of the Chingale exploration programme as well as
commencing exploration on the Colina Negra vein system and other mineralized structures, and completing
initial prospecting of the surrounding areas held by the Company.
At Colina Negra, the following results were obtained across the vein: 1.0m at 114.31g/t gold, 1.0m at
66.2g/t gold, 1.5m at 35.2g/t gold, 1.0m at 22.5g/t gold, 1.0m at 10.4g/t gold and 1.57m at 10.1g/t gold.
Prospecting results from the surrounding areas identified five areas for further exploration, with results
including 19.68 g/t gold and 40 g/t silver over 0.7m in quartz float and 5.76 g/t gold and 10.2 g/t silver
over 1m in an outcrop of the main vein nearby, as well as 1.79 g/t gold, 318.4 g/t silver and 20.23 g/t
gold, 7 g/t silver from old waste dump piles of now abandoned trial workings. CMR is in the process of
commencing road construction to the site, to facilitate a significant (>8,000m) diamond drilling campaign
to test the Chingale and Colina Negra veins at depth.
Success of this programme will lead to underground access development for an exploration/ production
programme, which should in turn lead to the definition of resources to permit the commencement of a
feasibility study as to whether these veins can become the second and third mine developments.
La Rosaleda
The La Rosaleda project is CMR's third project in the Frontino Gold Belt and comprises 566.2 hectares in
three concessions and three applications, to the immediate south of Frontino Gold Mines in the Segovia-
Remedios area. Initial exploration on the project commenced in May 2007 with a surface-prospecting
programme and to date over sixty old artisanal mine workings have been identified which reflect the three
main structural trends seen in the district. In addition two currently active artisanal mines are located
just outside the area of the agreement, returning grades of 6.89g/t gold and 57.6g/t silver over 0.9m. It
is planned to move the project to the drill ready stage by the end of 2008.
Mina del Sol
The Mina del Sol project also lies in Antioquia Province some 45km north-east of Medellin and comprises
578.2 hectares in two permits.
During 2007 CMR completed a five drill hole, 700m programme to follow up its trenching programme, which had
returned grades up to 70.72m at 1.41g/t gold. The first drill hole was mineralized throughout its entire
length, giving an average grade of 1.46g/t gold over 90.0m. Follow up drill hole ERD-0704 carried 138.84m
at 0.16g/t gold and hole ERD-0705 148.5m at 0.19g/t gold. Although not of economic grade, the width and
continuity of this mineralization is considered to be highly significant and prospective for the discovery
of a major intrusion-related gold deposit.
It is important to note that this is the first drilling at Mina del Sol. Consequently, the controls of
mineralization are as yet not fully understood, so that some of the drill holes missed the intended target.
However, the information gained from this initial drilling will enable the next phase of drilling to be
better targeted by refining the geological model in terms of the orientation and controls of the
mineralization.
Mina la Linda
The La Linda project lies to the south-west of Medellin just across the border between Antioquia and Caldas
Provinces. During 2007 CMR completed horizontal underground development on the La Linda vein, which has
now been completed to 51m from the adit portal. At the level of the adit a complex faulted section was
encountered between 31-49m, which has the effect of both thinning the vein and reducing the gold grade. As
a result, the weighted average for the vein along its entire exposed length in the adit reduced to 6.02g/t
gold and 13.9g/t silver over 0.68m. It is believed that the fault zone encountered has now been passed and
it is planned to continue further adit development for an additional 50m before commencing vertical
development to allow for definition of the vein in three dimensions.
Three Hills
The Three Hills project comprises 35,135 hectares of exploration territory situated in the western
Cordilliera of Colombia in Cauca Department. Due to adverse weather conditions in Colombia during the
first half of 2007, it was not possible to complete the proposed follow-up prospecting programme of the
Three Hills project.
Further to the initial field expedition to the area which noted extensive artisanal alluvial gold workings
in the streams draining the area. It is hoped that during 2008 it will be possible to complete this
programme and define the source of alluvial gold currently being exploited in the streams. CMR has
commenced discussions with a number of major international mining companies regarding the possibility of
entering into a joint venture to fast track exploration on the property.
Peru
During the year CMR completed the acquisition of the outstanding 50% of the three Patacancha permits that
it did not previously hold for a cost of US$265,000. Following this acquisition the titles were formally
transferred to CMR's wholly-owned subsidiary, Minera Peru Gold S.A.C.
Rasuhuilca
Development activities continued during the first quarter of 2007 with the completion of 235.1m of vertical
and lateral underground development to provide vertical contiguity of sample data and also as primary stope
development. Following completion of this underground development and return of assay values from this and
the pre-existing workings it has been possible to develop a block model and to estimate the Measured,
Indicated and Inferred Resource to JORC Standards.
The overall Rasuhuilca Main and west zones contain 321,100 tonnes at 2.15g/t gold, 185.2g/t silver (252g/t
silver equivalent) at a 75g/t silver equivalent cut-off. Additional potential to expand these resources
exists to the west within the Rasuhuilca north-west and Rasuhuilca south areas around the 4941m Level.
Within this Resource a proven and probable reserve (JORC Standard) of 168,700 tonnes at 3.05g/t gold,
216g/t silver (368 g/t silver equivalent) has been defined in the mining plan for the main zone.
This mining plan envisages the blasting of 50,300 tonnes as sub-level and stope development ore and a mere
2,500 tonnes of waste development thanks to the extent of the pre-existing development. Metallurgical
testwork has indicated that the average gold recovery will be ~85% whilst the average silver recovery will
be ~65%. The lower silver recovery is believed to be due to certain soluble silver minerals not being
recoverable via cyanidation and Merrill-Crowe process fixation.
Notwithstanding this the average recoverable value per tonne is estimated to be~US$155 per tonne (at
current metal prices) with a total cost of mining and processing (inclusive of capital costs) being
~US$41.9 per tonne of ore milled over the life of mine. On this basis the average total production cost of
silver is estimated to be ~ US$4.89/oz. CMR expects to complete the feasibility study on Rasuhuilca in
2008 and has already commenced procedures to acquire the requisite permits from the Peruvian central and
regional government departments in order to initiate mine operations in 2009.
Patacancha Area
The Patacancha permits cover a total area of around 1,800 hectares and, in addition to Rasuhuilca, contain
a number of already identified prospects with excellent potential. CMR is presently negotiating with a
number of companies who have expressed serious interest in exploring the permits for the potential to host
bulk tonnage gold and gold-copper mineralization.
New Projects
During the year CMR was offered several small gold mining projects in the vicinity of Patacancha and
elsewhere in Peru. Thus far none of these has been pursued as none was believed to have immediate
production potential. CMR will continue to examine any opportunities that present themselves to the
Company.
Bulgaria
During the year CMR completed a joint venture agreement in Bulgaria with a subsidiary of the Electrum
Global Gold Group. This earn-in joint venture agreement gives the option to Electrum to earn up to an 80%
interest in a number of exploration permits and applications presently held in Bulgaria by expending US$2.2
million within five years and making an initial investment of GBP50,000 for the acquisition of 833,333
ordinary shares in the Company.
Electrum Global Gold Group is a privately-held gold exploration company with one of the largest and most
diversified exploration portfolios in the world. Electrum holds interests in over 70 projects located in
the western United States, Africa, South America, Asia, and now, Eastern Europe.
Its management services company, Electrum USA Limited, is headquartered in Denver, Colorado. During the
year Bulgaria became a full EU member and the government has made a successful step forward to make the
environmental, mining and concession legislation of the country EU compliant. Such work has caused some
delays in the processing and granting of new exploration permits in country but CMR is now optimistic that
all new pending applications for gold and uranium will be issued in 2008.
Dobroselets
Exploration activities accelerated in the last quarter of 2007 on the Dobroselets permit. This area
includes a historically evaluated uranium deposit containing ~1.5 million lbs of U308 and also the Chaira
gold deposit, containing 450,000 ozs of gold. The Chaira mineralization comprises complex multi-directional
sheeted veins of quartz and pyrite cutting structural zones within a Cretaceous grano-diroritic intrusion
with extensive and widespread alteration.
The scale of alteration and mineralization suggests the presence of a major intrusion-related gold
mineralizing system that will require extensive evaluation but has excellent potential to host an economic
gold deposit.
The first drilling campaign at Dobroselets for 2,450m, commenced in early December 2007, and was planned
for ~1,200 metres of verification diamond drilling in Chaira and ~1,250 metres on the Mogilite area, which
is the shallow, near surface extension of the Chaira mineralization.
Rozino
CMR recently completed a scoping study evaluating the Tashlaka Hill gold resource in readiness for
application to the Bulgarian government to register a "Commercial Discovery" and subsequently to apply for
a "Mining Concession".
Tashlaka Hill is a low-sulphidation sediment-hosted deposit containing over 285,000 ozs of gold. At this
stage of work the Company is legally entitled to an extension for one year to enable the completion of the
financial, social and environmental analysis for a mining development. The Company is also entitled to
complete additional verification field work and in-fill drilling, which might be required to enable the
completion of the subsequent concession application.
CMR believes that its new joint venture partner will bring a wealth of experience with them as well as
substantial financial strength. Such contribution will be of significant help in accelerating the overall
exploration programme in country and lead the joint venture Company to the next stage of becoming a gold
miner in Bulgaria.
Uranium
During the year CMR identified and prepared seven applications for new exploration permits which were
lodged with the government of Bulgaria. These areas cover both existing known uranium resources and also
have excellent potential to host presently undiscovered uranium mineralization. Delays by the Ministry of
Environment (the relevant licensing authority) during 2007, which have impacted on most companies
throughout the natural resources sector, are expected to ameliorate during 2008 and the expectation is that
the permits will be issued as soon as possible.
Spain
CMR wholly owns two projects in the Iberian Pyrite Belt in south-western Spain, a region world renowned for
the presence of numerous 10-100Mt base metal sulphide deposits.
Lomero-Poyatos
This comprises a polymetallic volcanic hosted massive sulphide deposit formerly mined for production of
sulphuric acid, and estimated to contain significant quantities of both precious and base metals. CMR has
conducted extensive exploration in the 326 hectares licensed, including 10,082 metres of drilling, and an
independent Scoping Study was completed in 2005, resulting in Indicated Resources of:
Tonnes Gold g/t Silver g/t Copper % Zinc% Lead % Notes
3,710,00 3.26 27.8 0.87 1.57 1.16 1.5 g/t gold cut-off
At the time, the outcome of the Scoping Study indicated that the project was not deemed to be sufficiently
economically viable to repay the large capital cost of acquiring and re-commissioning a nearby processing
plant. However, since then, metal prices have improved considerably and CMR has also established
alternative processing options at significantly lower cost than before, such that the mine is now estimated
by the Company to be economically viable.
Masa Valverde
This project includes two permits totalling 3,482 hectares that host, among others, the Masa Valverde
deposit, the largest body of unmined massive-sulphide in the Iberian Pyrite Belt, comprising both
polymetallic massive sulphides and cupriferous stockwork.
Historic drilling has intersected up to 180m of massive sulphide and up to 111m of stockwork
mineralization, resulting in the following Inferred Resources:
Tonnes Gold g/t Silver g/t Copper % Zinc% Lead % Notes
119,950,000 0.86 41.9 0.57 4.30 1.28 3% zinc cut-
off
79,950,000 0.43 22.4 0.76 0.38 0.50 0.5% copper
cut-off
There is significant potential for a high-grade zinc/lead deposit to be defined within the massive
sulphides. Potential also exists for the upgrading and extension of the copper stockwork mineralization.
The mineralization is open to the west, with one intersection of 89m of massive sulphides. A number of
geophysical anomalies in the project area remain untested.
CMR is seeking to obtain additional finance for the development of both Lomero-Poyatos and Masa Valverde.
CONSOLIDATED INCOME STATEMENT
Note 2007 2006
� �
Other income 2 7,005 27,193
Administrative costs 2 (774,467) (686,561)
Share of loss from joint ventures - (635)
Impairment of exploration costs 6 (413,020) (137,633)
Forgiveness of loan 2 459,477 -
Disposal of available for sale investment 2 (22,400) -
Excess of acquirer's interest in the net fair value of acquiree's 2 94,000 -
identifiable net assets over cost
---------- ----------
Loss before tax (649,405) (797,636)
---------- ----------
---------- ----------
Tax 4 - -
Loss after tax (649,405) (797,636)
---------- ----------
Attributable to:
Equity holders of the parent (646,399) (797,636)
Minority interest (3,006) -
---------- ----------
(649,405) (797,636)
---------- ----------
---------- ----------
Loss per share:
Basic loss per share 5 (0.24p) (0.49)p
---------- ----------
Diluted loss per share (0.24p) (0.49)p
---------- ----------
---------- ----------
All transactions arise from continuing operations.
CONSOLIDATED BALANCE SHEET
Note 2007 2006
Assets � �
Non-current assets
Exploration expenditure 6 8,342,698 6,247,179
Property, plant and equipment 7 172,626 92,425
Goodwill 6 1,191,706 1,191,706
Available for sale investments 8 - 80,000
--------- ----------
9,707,030 7,611,310
Current assets
Cash and cash equivalents 9 40,862 621,392
Trade and other receivables 10 456,393 199,782
--------- ----------
497,255 821,174
---------- ----------
Total assets 10,204,285 8,432,484
---------- ----------
---------- ----------
Liabilities
Non-Current Liabilities
Borrowings 11 (86,303) -
----------- ------------
Current liabilities
Trade and other payables 11 (931,995) (555,132)
----------- ------------
Total liabilities (1,018,298) (555,132)
------------ ------------
Net assets 9,185,987 7,887,352
------------ ------------
------------ ------------
Equity
Equity attributable to equity holders of the parent
Share capital 12 2,711,156 2,089,989
Share premium account 13 11,160,040 10,456,807
Revaluation reserve 15 - 48,500
Merger reserve 14 2,116,435 2,116,435
Other reserves - 1,373
Translation reserve 17 618,416 (64,345)
Accumulated loss 16 (7,417,806) (6,771,407)
------------ ------------
Equity attributable to equity holders of the parent 9,188,241 7,887,352
Minority interest (2,254) -
------------ ------------
Total equity 9,185,987 7,887,352
------------ ------------
------------ ------------
The financial statements were approved by the Board of Directors on 21 July 2008.
CONSOLIDATED CASH FLOW STATEMENT
Note 2007 2006
� �
Net cash outflow from operating activities 18 (380,089) (892,837)
Investing Activities
Exploration costs (1,578,955) (1,653,962)
Purchase of property, plant and equipment (87,952) (74,752)
Proceeds from sale of available for sale investment 57,600 -
Interest received 4,973 26,558
Acquisition of investments - (28,965)
------------ ------------
Net cash used in investing activities (1,604,334) (1,731,121)
------------ ------------
Financing activities
Proceeds from issue of share capital 1,411,500 1,997,750
Share issue costs (87,100) (67,606)
Proceeds from long term borrowings 79,493 -
------------ ------------
Net cash from financing activities 1,403,893 1,930,144
Decrease in cash (580,530) (693,814)
Cash at the beginning of the period 621,392 1,315,206
------------ ------------
Cash and Cash Equivalents at the end of the period 40,862 621,392
------------ ------------
------------ ------------
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
2007 2006
� �
Exchange differences on translation of foreign operations 668,211 (64,345)
Transfers:
Transferred to profit and loss on sale of available for sale investment 48,500 -
--------- ---------
Net income recognised directly in equity 716,711 (64,345)
--------- ---------
Loss for the year (649,405) (797,636)
--------- ---------
Total recognised income and expense for the period (67,306) (861,981)
--------- ---------
--------- ---------
Attributable to:
Equity holders of parent (69,560) (861,981)
Minority Interest 2,254 -
NOTES TO THE FINANCIAL STATEMENTS
1. Segmental analysis
There is only one business operating segment for Cambridge Mineral Resources Plc.
Cambridge Mineral Resources Plc's profits and losses before taxation and its geographic allocation of net
assets may be summarised as follows:
Profit / (Loss) Net assets
2007 2006 2007 2006
� � � �
United Kingdom (791,357) (653,629) 7,972,218 6,775,124
Spain (49,397) (144,874) 430,132 483,071
Peru (3,382) (1,966) (7,416) (1,966)
Panama 24,273 (2,069) 41,964 (2,069)
Colombia 18,421 4,922 (2,952) 4,912
Bulgaria 155,043 - 752,041 628,280
--------- --------- ---------- ----------
(646,399) (797,636) 9,185,987 7,887,352
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Exploration costs per geographic segment are shown below:
Exploration Costs
2007 2006
� �
United Kingdom - -
Spain 3,783,661 3,324,261
Peru 644,420 401,698
Panama 867,750 590,760
Colombia 1,102,687 498,749
Bulgaria 1,944,180 1,431,711
--------- ---------
8,342,698 6,247,179
--------- ---------
--------- ---------
2. Loss before taxation
The loss on ordinary activities before taxation is stated after charging/(crediting):
2007 2006
� �
Finance income 4,974 27,193
Fees payable to the Company's auditor for the audit of the Company annual 35,000 15,000
accounts
- Tax 3,500 2,100
- Advice on conversion to IFRS 10,000 -
- Other non audit services 10,600 2,000
- Audit of foreign subsidiaries 10,140 8,239
Depreciation of property, plant and equipment 38,566 39,512
Impairment of intangible assets 413,020 24,034
Expired contracts - 113,599
Amortisation 2,254 1,717
Operating lease rentals land and buildings 7,514 2,747
Excess of acquirer's interest in the net fair value of acquiree's 94,000 -
identifiable assets, liabilities and contingent liabilities over cost
Foreign exchange (gain)/loss (17,501) 64,345
Loss on disposal of available for sale financial asset (22,400) -
Forgiveness of loan (459,477) -
Fees paid to Grant Thornton UK LLP and its associates for non-audit services to the Company itself are not
disclosed in the individual account of Cambridge Mineral Resources Plc because the Company's consolidated
accounts are required to disclose such fees on a consolidated basis.
A liability payable by Hereward Ventures was forgiven as a result of the withdrawal by a previous joint
venture partner, giving rise to a credit of �459,477. On recognition of the withdrawal of the previous
partner and CMR's increased interest rising to 100% a credit of �94,000 to the income statement resulted
which represents the excess of fair value of the acquiree's identifiable assets liabilities and contingent
liabilities over cost.
3. Directors and employees
Staff costs excluding directors during the year were as follows:
2007 2006
� �
Wages and salaries 148,310 109,579
Social security costs 28,465 27,293
------- -------
176,775 136,872
------- -------
------- -------
The average number of employees in the group during the year was 9 (2006: 7).
Remuneration in respect of key management personnel and directors was as follows:
2007 2006
� �
Emoluments:
- wages and salaries 112,500 94,354
- compensation for loss of office - 35,319
- fees 181,774 155,324
------- -------
294,274 284,997
------- -------
------- -------
The amounts set out above include remuneration in respect of the highest paid director as follows:
2007 2006
� �
Emoluments 70,500 70,500
------- -------
------- -------
No directors participate in money purchase or final salary pension schemes. No director exercised any share
options during the year.
4. Tax on loss on ordinary activities
The tax charge is based on the loss for the year and represents:
2007 2006
� �
Loss on ordinary activities for the year (649,405) (797,636)
United Kingdom corporation tax at 30% (2006: 30%) (194,822) (239,291)
UK expenses not deductable for tax purposes 13,919 -
UK tax losses not relieved 223,489 3,476
Foreign profits not taxable (102,493) 103,273
Adjustments on consolidation not taxable 59,907 132,542
--------- ---------
Tax Charge - -
--------- ---------
--------- ---------
The following deferred tax asset has not been recognised in relation to the UK tax losses:
Future UK tax rate at 28.00%
Fixed asset timing differences (6,139)
Losses and other deductions (1,873,422)
-----------
(1,879,561)
-----------
-----------
5. Loss per share
The loss per share is based on the loss for the year divided by the weighted average number of shares in
issue during the year.
2007 2006
� �
Loss after tax (�) (646,399) (797,636)
---------- -----------
---------- -----------
Weighted average number of shares 221,429,860 163,172,463
Basic loss per share (pence) (0.24p) (0.49p)
Diluted loss per share (pence) (0.24p) (0.49p)
For the current period, as diluted earnings would be increased when taking the warrants and share options into
account, these are deemed to be antidilutive and are ignored in the calculation of diluted earnings per share.
The instruments that have been excluded are shown below.
Dilutive earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The Company has two categories of
dilutive potential ordinary shares: warrants and share options. A reconciliation between the denominator used
in the calculation of basic loss per share and diluted loss per share is shown below:
Weighted average number of shares: 221,429,860 163,172,463
Warrants 46,254,155 17,738,630
Options 2,081,370 1,450,000
----------- -----------
Total Fully Diluted Shares 269,765,385 182,361,093
----------- -----------
----------- -----------
6. Intangible assets
Goodwill Exploration Total
Note expenditure
� � �
Gross carrying amount 1,191,706 4,081,640 5,273,346
Accumulated amortisation and impairment - (7,709) (7,709)
--------- --------- ---------
Carrying amount at 1 January 2006 1,191,706 4,073,931 5,265,637
Gross carrying amount 1,191,706 6,256,449 7,448,155
Accumulated amortisation and impairment - (9,270) (9,270)
--------- --------- ---------
At 31 December 2006 1,191,706 6,247,179 7,438,885
Gross carrying amount 1,191,706 8,758,594 9,950,300
Accumulated amortisation and impairment - (415,896) (415,896)
--------- --------- ---------
Carrying amount at 31 December 2007 1,191,706 8,342,698 9,534,404
--------- --------- ---------
--------- --------- ---------
Goodwill Exploration Total
Expenditure
� � �
Carrying amount at 1 January 2006 1,191,706 4,073,931 5,265,637
- separately acquired/internally developed - 2,404,320 2,404,320
Expired contracts - (113,599) (113,599)
Impairment - (24,034) (24,034)
Amortisation - (1,717) (1,716)
Net exchange differences - (91,722) (91,722)
--------- --------- ---------
Carrying amount at 31 December 2006 1,191,706 6,247,179 7,438,885
- separately acquired/internally developed - 1,872,012 1,872,012
- through business combinations 24 - 185,519 185,519
Amortisation - (2,254) (2,254)
Impairment - (413,020) (413,020)
Net exchange differences - 453,262 453,262
--------- --------- ---------
Carrying amount at 31 December 2007 1,191,706 8,342,698 9,534,404
--------- --------- ---------
--------- --------- ---------
The impairment was due to management evaluation and decision to cease exploration activities in the relevant areas
and was carried out after the official termination of the contract with the relevant government authorities.
The group has determined that the carrying amount of �3,324,261 in relation to exploration activities and
�1,191,706 for Goodwill in Spain is not impaired. This has been determined based on values prepared by external
parties and the performance of like companies that the carrying value of the exploration costs is not impaired.
7. Property, plant and equipment
Note Office Motor Total
equipment Vehicles
� � �
Gross carrying amount 269,970 146,541 416,511
Accumulated depreciation and impairment (235,740) (118,357) (354,097)
--------- --------- ---------
Carrying amount at 1 January 2006 34,230 28,184 62,414
Gross carrying amount 331,713 138,563 470,276
Accumulated depreciation and impairment (258,168) (119,683) (377,851)
--------- --------- ---------
Carrying amount at 31 December 2006 73,545 18,880 92,425
--------- --------- ---------
--------- --------- ---------
Gross carrying amount 435,011 106,857 541,868
Accumulated depreciation and impairment (293,561) (75,681) (369,242)
--------- --------- ---------
Carrying amount at 31 December 2007 141,450 31,176 172,626
--------- --------- ---------
--------- --------- ---------
Reconciliation of the carrying amounts shown in the
consolidated financial statements
Equipment Motor Total
Vehicles
� � �
Carrying amount at 1 January 2006 34,230 28,184 62,414
- separately acquired 72,211 - 72,211
Disposals (8,142) (5,837) (13,979)
Depreciation (30,585) (8,927) (39,512)
Depreciation released on disposal 6,293 5,837 12,130
Net exchange differences (462) (377) (839)
--------- --------- ---------
Carrying amount at 31 December 2006 73,545 18,880 92,425
- separately acquired 87,952 - 87,952
-through business combinations 24 12,954 24,795 37,749
Assets disposed of (8,824) (67,921) (76,745)
Depreciation (27,408) (11,158) (38,566)
Depreciation released on disposal - 65,068 65,068
Net exchange differences 3,231 1,512 4,743
--------- --------- ---------
Carrying amount at 31 December 2007 141,450 31,176 172,626
--------- --------- ---------
--------- --------- ---------
All depreciation and impairment charges are included in "administration costs" in the income statement.
8. Financial assets
Available for sale
investments
�
Valuation
At 1 January 2006 50,400
Revaluations 29,600
-------------------
At 31 December 2006 80,000
-------------------
-------------------
Disposal of financial assets (80,000)
-------------------
At 31 December 2007 -
-------------------
-------------------
The group held an investment in an associate Caracal Cambridge Bulgaria EAD (CCB) as at 31 December
2006. This investment was carried at a value of nil. No losses have been recognised in the Income Statement
for the current period, however, had these losses been recognised they would have been, �136,195.
9. Cash and cash equivalents
2007 2006
� �
Bank and cash balances 40,862 285,817
Short term deposits - 335,575
------ --------
40,862 621,392
------ --------
------ --------
10. Trade and other receivables
2007 2006
� �
Recoverable VAT 184,823 141,722
Other receivables 202,125 -
Prepayments and accrued income 69,445 58,060
------- --------
Total trade and other receivables 456,393 199,782
------- --------
------- --------
The carrying values are considered to be a reasonable approximation of fair value and are considered
recoverable within one year by the directors.
11. Trade and other payables
2007 2006
� �
Current liabilities
Trade and other payables 508,867 283,659
Social security and other taxes 35,461 15,066
Accruals and deferred income 387,667 256,407
------- --------
931,995 555,132
------- --------
------- --------
The carrying values are considered to be a reasonable approximation of
fair value.
2007 2006
� �
Non current liabilities
Borrowings 86,303 -
------- -----
------- -----
(a) The group has one loan taken out for the purchase of capital
equipment:
(i) a loan of �86,303 is due and payable in one instalment on October 25 2010.
(ii) the loan carries an interest rate of 13.93%
(iii) the fair value of this amount is �110,347. This has been calculated using the repayment
terms and the relevant interest rate.
12. Share capital
2007 2006
� �
Authorised
500,000,000 ordinary shares of 1p each 5,000,000 5,000,000
--------- ---------
--------- ---------
Allotted, called up and fully paid
271,115,704 (2006: 208,999,038) ordinary shares of 1p each 2,711,156 2,089,989
--------- ---------
--------- ---------
Allotments during the year
During the year the Company allotted a total of 62,116,666 ordinary 1p shares for cash consideration of
�1,411,500. The difference between the total consideration, net of expenses of �87,100, and the total
nominal value has been credited to the share premium account.
(a) Share options
All the share options below were granted after 7 November 2002, with the exception of the options granted
on the 1 April 2007, were all fully vested as at 1 January 2006. The Company has granted options to
subscribe for ordinary 1p shares as follows:
Exercise Number of
price per options
share unexercised
Date granted Period exercisable (pence)
31 December 2001 31 December 20012 to 30 December 2008 20.00p 450,000
19 February 2003 19 February 2003 to 18 February 2010 10.25p 700,000
19 February 2003 19 February 2003 to 18 February 2010 14.50p 300,000
1 April 2007 1 April 2007 to 31 March 2009 3.50p 175,000
-----------
1,625,000
-----------
-----------
The Company's share price at 31 December 2007was 2.05p. The highest and lowest share prices during the
year were 4.88p and 1.8p respectively.
During the year ended 31 December 2007 175,000 share options were issued to a Colombian employee. These
share options at the date of grant had a market value of �3,500 which the directors consider to be
a reasonable estimation of their fair value. The potential charge arising has not been charged to the income
statement.
The Company issued warrants to subscribe in cash for 30,666,666 ordinary 1p shares as shown in the
table below. The warrants are exercisable at any time between the dates shown and the date upon which a full
Stock Exchange listing or a takeover becomes effective.
(b) Share warrants
The Company issued warrants to subscribe in cash for 30,666,666 ordinary 1p shares as shown in the table below.
The warrants are exercisable at any time between the dates down and the date upon which a full Stock Exchange
listing or a takeover becomes effective.
Date of grant Number of Exercise Exercisable Exercisable
Warrants Price From To
21 June 2007 8,333,333 �0.0300 21/06/2007 20/06/2008
21 June 2007 8,333,333 �0.0300 21/06/2007 20/06/2009
6 August 2007 3,000,000 �0.0300 06/08/2007 05/08/2008
6 August 2007 3,000,000 �0.0300 06/08/2007 05/08/2009
6 August 2007 2,000,000 �0.0300 06/08/2007 05/08/2008
6 August 2007 2,000,000 �0.0300 06/08/2007 05/08/2009
23 October 2007 1,000,000 �0.0300 23/10/2007 22/10/2008
23 October 2007 1,000,000 �0.0300 23/10/2007 22/10/2009
23 October 2007 2,000,000 �0.0200 23/10/2007 22/10/2010
The directors are satisfied that the warrants outstanding as at 31 December 2007 are equity in nature and
therefore no fair value adjustment arising.
The following table shows the number and weighted average exercise price of all the unexercised share options
and warrants at the year end:
2007 2006
Number Weighted average Number Weighted average
exercise price exercise price
Outstanding at 1 34,150,000 3.47p 1,450,000 14.16p
January
Options granted during 175,000 3.50p - -
the year
Warrants granted 30,666,666 3.00p 32,700,000 3.00p
during the year
---------- ---------------- ---------- -----------------
Outstanding at 31 64,991,666 3.24p 34,150,000 3.40p
December
---------- ---------------- ---------- -----------------
---------- ---------------- ---------- -----------------
13. Share premium account
�
At 1 January 2006 9,165,330
Premium on allotments during the year 1,291,477
----------
At 31 December 2006 10,456,807
Premium on allotments during the year 703,233
----------
At 31 December 2007 11,160,040
----------
----------
Premium is net of share issue costs of �87,100.
14. Merger reserve
�
At 1 January 2006 and 31 December 2006 2,116,435
---------
At 31 December 2007 2,116,435
---------
---------
15. Revaluation reserve
�
At 1 January 2006 18,900
Revaluation of investments 29,600
---------
At 31 December 2006 48,500
Disposal of investments (48,500)
---------
At 31 December 2007 -
---------
---------
16. Accumulated loss
�
At 1 January 2006 (6,038,116)
Transfer to translation reserve 64,345
Retained profit for the year (797,636)
-----------
At 31 December 2006 (6,771,407)
Retained loss for the year attributable to the group (646,399)
-----------
At 31 December 2007 (7,417,806)
-----------
-----------
17. Translation Reserve
�
At 1 January 2006 -
Foreign exchange differences (64,345)
Balance at 31 December 2006 (64,345)
Foreign exchange differences 668,211
Transfer 14,550
--------
At 31 December 2007 618,416
--------
--------
18. Net cash outflow from operating activities
2007 2006
� �
Loss before taxation (649,405) (797,636)
Depreciation 38,566 21,899
Amortisation 2,254 1,717
Increase in debtors (43,364) (55,866)
Increase in creditors 353,128 112,966
Impairment 413,020 24,034
Foreign exchange movements 1,816 (199,951)
Forgiveness on loan (459,477) -
Loss on disposal of property, plant and equipment 34,973 -
Excess of acquirer's interest in the net fair value of acquiree's (94,000) -
identifiable net assets
Loss on disposal of available for sale asset 22,400 -
--------- ---------
Net cash outflow from operating activities (380,089) (892,837)
--------- ---------
--------- ---------
19. Financial instruments
The disclosures detailed below are as required by IFRS 7 Financial Instruments: Disclosures. The group's principal
treasury objective is to provide sufficient liquidity to meet operational cash flow requirements and to allow the
group to take advantage of new growth opportunities whilst maximising shareholder value. The group operates
controlled treasury policies which are monitored by the Board to ensure that the needs of the group are met as they
evolve. The impact of the risks required to be discusses in accordance with IFRS 7 are detailed below:
Summary of financial assets and liabilities
31 December 2007 Loans and receivables Total
Assets per balance sheet
Cash and Cash Equivalents 40,862 40,862
Total 40,862 40,862
--------------------- ----------
--------------------- ----------
31 December 2007 Other financial Total
liabilities
Liabilities per balance sheet
Borrowings 86,303 86,303
Trade and other payables 896,534 896,534
Total 982,837 982,837
----------------- ----------
----------------- ----------
31 December 2006 Loans and receivables Available for sale Total
assets
Assets per balance sheet
Available for sale - 80,000 80,000
investment
Cash and Cash Equivalents 621,392 - 621,392
Total 621,392 80,000 701,392
--------------------- ------------------ -------
--------------------- ------------------ -------
31 December 2006 Other financial Total
liabilities
Liabilities per balance sheet
Trade and other payables 540,066 540,066
Total 540,066 540,066
--------------- -------
--------------- -------
Market risk
- Foreign currency risk
The group does not hedge its exposure of foreign investments held in foreign currencies. The group undertakes
transactions principally in sterling, euros, Peruvian soles, Colombian pesos and US dollars. While
the group continually monitors its exposure to movements in currency rates, it does not utilise hedging
instruments to protect against currency risk.
------------------------------------------------------------------------------------------------------------
At 31st December 2007/2006 31/12/2007 31/12/2006
------------------------------------------------------------------------------------------------------------
Closing �/euro exchange rate 1.3619 1.4841
------------------------------------------------------------------------------------------------------------
Closing �/Peruvian new soles exchange rate 6.0836 6.1144
------------------------------------------------------------------------------------------------------------
Closing �/Colombian pesos exchange rate 4,070 4,312
------------------------------------------------------------------------------------------------------------
Closing �/US$ exchange rate 1.9909 1.9570
------------------------------------------------------------------------------------------------------------
Effect on equity of 1-17% increase in rate �2,559 �(4,507)
------------------------------------------------------------------------------------------------------------
Effect on equity of 1-17% decrease in rate �(13,936) �723
------------------------------------------------------------------------------------------------------------
Effect on loss of 1-17% increase in rate �223 �29,78
------------------------------------------------------------------------------------------------------------
Effect on loss of 1-17% decrease in rate �(4,441) �(3,148)
------------------------------------------------------------------------------------------------------------
Sensitivity analysis of the four foreign currencies used by the group has shown the following levels of
movement that can be tolerated by the group:
--------------------------------------------------------------------------------------
Euros Peruvian New Columbian US Dollars
Soles Peso
--------------------------------------------------------------------------------------
Increase in rate (2007) 2% 7% 3% 4%
--------------------------------------------------------------------------------------
Decrease in rate (2007) 9% 9% 7% 2%
--------------------------------------------------------------------------------------
Increase in rate (2006) 1% 6% 17% 12%
--------------------------------------------------------------------------------------
Decrease in rate (2007) 4% 2% 2% 1%
--------------------------------------------------------------------------------------
These figures have been obtained by analysing the movement in the foreign exchange rates for the past twelve
months against the average exchange rate for the period. Using this data, the maximum increase and decrease
has been determined. This has then been applied to the equity and loss position of the group for the period to
determine the sensitivity to foreign exchange movements. There has been no change in the assumptions and
methodology used in determining the sensitivity analysis from the previous period.
- Interest rate risk
The group finances its operations through the issue of equity share capital. There is one loan held, with a fixed
interest rate and therefore no exposure to interest rate fluctuations. The cash and cash equivalents disclosed in
note 9 were on short term deposit. These deposits are kept under regular review, with reference to future
expenditure requirements to maximise interest receivable. The results of the group are not significantly affected by
the level of interest income.
Maturity Analysis
The table below analyses the group's financial liabilities into relevant maturity groupings based on the remaining
period at the balance sheet to the contractual maturity date. Amounts payable within one year are not discounted
as the impact of discounting is not significant. Amounts payable greater than one year has been discounted at the
relevant interest rate.
-------------------------------------------------------------------------------------------------
At 31 December 2007 Less than 1 Year Between 1 and 2 years
-------------------------------------------------------------------------------------------------
Borrowings - 110,347
-------------------------------------------------------------------------------------------------
Trade and other payables 931,995 -
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
At 31 December 2007 Less than 1 Year Between 1 and 2 years
-------------------------------------------------------------------------------------------------
Borrowings - 175,250
-------------------------------------------------------------------------------------------------
Trade and other payables 931,995 -
-------------------------------------------------------------------------------------------------
Liquidity risk
In common with many exploration companies, the Company raises finance for its exploration and appraisal activities
in discrete tranches to finance its activities for limited periods only. Further funding is raised as and when
required. The group's policy continues to be to ensure that it has adequate liquidity by careful management of its
working capital.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The group is exposed to credit risk from its financing activities,
including deposits with banks and financial institutions, foreign exchange transactions and other financial
instruments. The group does not have trade receivables and does not hold collateral as security Credit risk from
balances with banks and financial institutions is managed by the Board.
No material exposure is considered to exist by virtue of the possible non performance of the counterparties to
financial instruments. At the current stage of operations, no counterparties exist.
20. Capital commitments
The Company had no capital commitments at 31 December 2007 or 31 December 2006.
21. Contingent liabilities
There were no contingent liabilities at 31 December 2007 or 31 December 2006.
22. Contingent assets
There were no contingent liabilities for the group at 31 December 2007 or
31 December 2006.
23. Operating lease commitments
The group does not have any lease commitments at balance date.
24. Acquisition of subsidiaries
Acquisition of remaining 50% share of Minera Sucre SAC
In November 2007 the group obtained the remaining 50% share
in Minera Sucre SAC bringing the Company's ownership to 100%. The acquired business contributed no revenue to the
group, only capitalised exploration costs. If the acquisition had occurred on 1 January 2007, in the directors
opinion there would not have been an adjustment to group revenue as all costs incurred were capitalised as
exploration costs. Details of net assets acquired and goodwill are as follows:
�
Purchase consideration
- fair value of shares issued 130,592
--------
Total Purchase Consideration 130,592
Fair value of net assets acquired 130,952
--------
Goodwill -
--------
--------
The assets and liabilities as of November 2007 arising from the
acquisition are as follows:
Fair Value Acquiree's
carrying
amount
Intangible assets (Exploration costs) 130,592 130,592
Acquisition of remaining 51% shareholding of Caracal Cambridge Bulgaria EAD (CCB):
The 31 December 2005 UK GAAP numbers were restated to include 100% of Hereward Ventures Bulgaria (HVB). In turn
HVB owned 49% of Caracal Cambridge Mining Ventures Ltd (CCMV), the 100% shareholder of CCB, which was treated as
investment in associate in the year ended 31 December 2006. The carrying value of the investment in the associate
was nil. The financial statements do not show the share of the associates' losses as at 31 December 2006 as this
would give rise to a negative investment carrying value.
In March 2007 the joint venture partner Asia Gold transferred their 51% shareholding in CCMV to HVB for a nil
consideration which therefore gave HVB a 100% shareholding. Later in 2007 HVB allocated 1% of their
shareholding to a new joint venture partner, Electrum. The excess of the fair value of the acquiree's identifiable
net assets over the cost of the acquisition was recognised immediately after acquisition in the income statement to
a value of �94,000. The acquired business contributed revenues of �1,127 and net profit of �368,011 to the group
from the date of acquisition to reporting date. If the acquisition had occurred on 1 January 2007, group revenue
would not have been affected as to date of acquisition only exploration costs had been incurred.
�
Purchase consideration
- cash paid -
--------
Total Purchase Consideration -
Fair value of net assets acquired 94,000
--------
Excess of acquirer's interest in the net fair (94,000)
value of acquiree's identifiable net assets
--------
--------
The assets and liabilities as of November 2007 arising from the acquisition are as follows:
Acquiree's Fair value Fair value
carrying adjustments
amount
Cash and cash equivalents 1,325 - 1,325
Property, plant and equipment and exploration 751,770 (659,095) 92,675
interests
Deferred tab liabilities 2,655 (2,655) -
Other receivables 36,283 (36,283) -
Borrowings (438,938) 438,938 -
Total 353,095 (259,094) 94,000
---------- ----------- ----------
---------- ----------- ----------
25. Related party transactions
During the year the Company paid Geomin Consultants �70,500 for the consultancy and technical services of its
employee C Andrew, who is a director of the Company. �11,750 was owing to Geomin Consultants at 31 December 2007.
During the year the Company paid Markham Associates, a company owned & controlled by N Maclachlan, �48,750 for the
directorial services of N Maclachlan, who is a non-executive director of the Company. �33,750 was owing to Markham
Associates at 31 December 2007.
During the year the Company paid Euroventure International Plc, a company owned and controlled by M Burton, who is
a director of the Company, �52,500 for the accountancy services of M Burton. �8,750 was owing to Euroventure
International Plc at 31 December 2007.
During the year M Burton, finance director, advanced the group �15,200 (2006 - nil). This amount is currently a
creditor of the company. Within the debtors balance of the group is an amount payable by M Burton of �4,070
(2006 - nil).
26. Post balance sheet events
(a) On 25 January 2008 the Company announced it had secured a finance facility of US$15,000,000 in respect of
certain of its gold mine projects in Columbia. Under the terms of the facility the Company has to deliver gold
in repayment for the finance.
(b) On 19 March 2008 the Company raised �400,000 before expenses through a share placing with an institution.
27. Reconciliation of UK GAAP IFRS statements
The valuation of the investments prior to 1 January 2006, the group's date of transition to IFRS, have not been
restated to comply with IFRS 3 "Business Combinations".
The Company has elected not to calculate the translation difference in respect of foreign operations
retrospectively and thereby set corresponding translation differences at the date of transition determined in
accordance with previous GAAP, which was zero.
Goodwill arising from these investments �1,529,475 has not been restated other than as set out in the note below.
Goodwill recognised by the group on acquisition under UK GAAP was amortised over a period of 20 years. Under IFRS
goodwill is not amortised, but tested annually for impairment. The goodwill amortisation charge recognised with UK
GAAP in 2006 was written back.
Under UK GAAP the investment that is held in Hereward was treated as a fixed asset investment. As a result the
assets and liabilities of the company were not recognised by the group. On transition to IFRS, the exemptions
previously available under UK GAAP not to recognise Hereward as a subsidiary is no longer available. As a result
the balance sheet as at 31 December 2005 has been restated to account for the fair value of the assets and
liabilities in relation to Hereward not previously recognised under UK GAAP.
The adoption of IFRS had the following impact on group profit:
Year ended 31 December 2006
As previously Adjustments As restated
reported under under IFRS
UK GAAP
Reference � � �
Continuing Operations
Other Income 27,193 - 27,193
Administrative Costs A (900,658) 76,464 (824,194)
Share of losses from joint ventures (635) - (635)
Loss on disposal of quoted investment - - -
-------------- ------------- ------------
Loss before tax (874,100) 76,464 (797,636)
-------------- ------------- ------------
-------------- ------------- ------------
Earnings per share:
Basic loss per share: (0.54) 1.33 (0.49)
-------------- ------------- ------------
-------------- ------------- ------------
Diluted loss per share (0.54) 1.25 (0.49)
-------------- ------------- ------------
-------------- ------------- ------------
Reconciliation of Profit / Loss
-------------------------------
�
(Loss) under UK GAAP
(874,100)
Goodwill amortization no longer recognised A 76,464
after date of transition
----------
Loss IFRS (797,636)
----------
----------
Notes:
A: Under IFRS goodwill is not amortised. Goodwill charged for the period has been written back.
Reconciliation of Group Equity:
31 December 2006 1 January 2006
As
As previously As previously restated
reported under As restated reported under under
UK GAAP Adjustments under IFRS UK GAAP Adjustments IFRS
Ref � � � � � �
Assets
Non-Cuurent Asset
Exploration expenditure b 4,815,468 1,431,711 6,247,179 3,173,455 900,476 4,073,931
Property Plant and
Equipment b 85,559 6,866 92,425 43,844 6,868 50,712
Goodwill a,b 1,038,768 152,938 1,191,706 1,115,242 76,464 1,191,706
Investments b 902,364 (822,364) 80,000 873,399 (822,938) 50,461
--------------------------------------- --------------------------------------
6,842,159 769,151 7,611,310 5,205,940 160,870 5,366,810
Current Assets -
Cash and Cash Equivalents b 618,302 3,090 621,392 1,287,292 3,090 1,290,382
Trade and other receivables b 798,588 (598,806) 199,782 642,868 (67,563) 575,305
1,416,890 (595,716) 821,174 1,930,160 (64,473) 1,865,687
--------------------------------------- --------------------------------------
Total Assets 8,259,049 173,435 8,432,484 7,136,100 96,397 7,232,497
--------------------------------------- --------------------------------------
--------------------------------------- --------------------------------------
Liabilities
Non Current Liabilities
Borrowings b - - - - (153,814) (153,814)
--------------------------------------- --------------------------------------
Current liabilities
Trade and other payables b (389,428) (165,704) (555,132) (287,778) (11,316) (299,094)
--------------------------------------- --------------------------------------
Total Liabilities (389,428) (165,704) (555,132) (287,778) (165,130) (452,908)
--------------------------------------- --------------------------------------
Net assets / liabilities 7,869,621 7,731 7,887,352 6,848,322 (68,733) 6,779,589
--------------------------------------- --------------------------------------
--------------------------------------- --------------------------------------
Equity
Equity attributable to equity holders of the parent
Share capital 2,089,989 - 2,089,989 1,451,322 - 1,451,322
Share premium account 10,456,807 - 10,456,807 9,165,330 - 9,165,330
Revaluation reserve 48,500 - 48,500 18,900 - 18,900
Merger reserve 2,116,435 - 2,116,435 2,116,435 - 2,116,435
Other Reserves b - 1,373 1,373 - 1,373 1,373
Translation reserve c - (64,345) (64,345)
Accumulated Loss a,b (6,842,110) 70,703 (6,771,407) (5,903,665) (70,106) (5,973,771)
------------------------------------ ------------------------------------
Total Equity 7,869,621 7,731 7,887,352 6,848,322 (68,733) 6,779,589
------------------------------------ ------------------------------------
------------------------------------ ------------------------------------
Reconciliation of Group Equity 1 January 2005 31 December 2006
� �
Total Equity UK GAAP 6,848,322 7,869,621
Goodwill no longer amortized after transition date a 76,464 152,938
Effect of recognising Hereward as Subsidiary b (145,197) (145,207)
-----------------------------------------
Total Adjustments to Equity (68,733) 7,731
-----------------------------------------
-----------------------------------------
Total Equity IFRS 6,779,589 7,887,352
-----------------------------------------
-----------------------------------------
Notes:
a: Under IFRS goodwill is not amortised. Goodwill charged for the period has been written back.
b: Under UK GAAP the investment that is held in Hereward was treated as a fixed asset investment. As a result
the assets and liabilities of the company were not recognised by the group. On transition to IFRS, the
exemptions previously available under UK GAAP not to recognise Hereward as a subsidiary is no longer available.
As a result the balance sheet as at 31 December 2005 has been restated to account for the fair value of the
assets and liabilities in relation to Hereward not previously recognised under UK GAAP.
c: The Group has elected to adopt the IFRS exemption from creating an opening balance for foreign currency
translation reserves. For the year ended 2006 amounts relating to foreign currency has been adjusted from
retained earnings to create the opening balance for the foreign currency translation reserve that is required
under IFRS.
The Annual General Meeting will be held at 11.00am on 4 September 2008 at 10 Fenchurch Avenue, London, EC3M 5BN.
The notice of this meeting can be found in the separate circular sent to shareholders accompanying the annual
report and accounts. Shareholders would have received a separate circular accompanying the annual report and
accounts containing explanatory information and the notice of the AGM.
It is anticipated that once the report and accounts are sent to shareholders, which is anticipated over the next few
days, trading in the company's ordinary shares shall resume.
The summary accounts set out above do not constitute statutory accounts as defined by Section 240 of the UK
Companies Act 1985. The consolidated balance sheet at 31 December 2007 and the consolidated income statement,
consolidated statement of recognised income and expense and the consolidated cash flow statement for the year
then ended have been extracted from the Group's 2007 statutory financial statements upon which the auditors' opinion
is modified on the basis of an emphasis of matter opinion and going concern. The results for the year ended 31
December 2006 have been extracted from the statutory accounts for that period, which contain a modified auditors'
report on the basis of an emphasis of matter opinion and going concern.
* * ENDS * *
For further information, visit www.cambmin.co.uk or contact:
Cambridge Mineral Resources plc
Michael Burton
Finance Director
020 7663 5618
Email: mburton@cambmin.co.uk
Ruegg & Co Limited
Gavin Burnell / Roxane Marffy
Nominated Adviser
020 7584 3663
Hichens, Harrison and Co
Colin Rowbury
Broker
020 7382 7771
Haywood Securities (UK) Limited
Tom Beattie
Broker
020 7031 8018
St Brides Media and Finance Ltd
Victoria Thomas
Financial Public Relations
020 7236 1177
Cambridge Mineral Resources Plc
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