Alexander Mining plc ("Alexander", the "Company") (TSX VENTURE:AXD)(AIM:AXM),
the AIM-listed mining and mineral processing technologies company, announces its
audited results for the year ended 31 December 2010.
Key highlights:
-- Important step towards commercialisation with joint venture partnership
agreement with Anvil Mining Limited on its Mutoshi copper and cobalt
project in the Democratic Republic of the Congo.
-- Positive testwork results, using AmmLeach(R) on zinc oxide deposits,
with Firestone Ventures and Rio Crystal
-- Successful listing of Alexander shares on TSX Venture Exchange
-- Disposal of Alexander Gold Group Limited for US$2.2m
-- The global mining industry has enjoyed another strong year, supported by
buoyant metals prices.
-- Healthy cash position of GBP 2.45m at the year end
CHAIRMAN'S STATEMENT
Introduction
Our business objective is clear; to capitalise on our breakthrough AmmLeach(R)
mineral processing technology. AmmLeach(R) has the potential to transform the
extraction process efficiencies and economics for many base metals but
especially copper, cobalt and zinc. We shall grow the Company by securing
royalty agreements in producing mines and/or equity interests in advanced
projects, in exchange for the use of our technology.
In my last Chairman's statement, I confidently forecasted that the forthcoming
year would bring significant progress in achieving our business objective. I am
delighted to report that this belief has been amply rewarded, with several
notable achievements.
Firstly, and most importantly, we announced in February 2011 a joint venture
partnership agreement with Anvil Mining Limited ('Anvil') on its Mutoshi copper
and cobalt project ('Mutoshi') in the Kolwezi region of the 'Copperbelt' in
Katanga province, Democratic Republic of the Congo (DRC). This is significant as
not only is Mutoshi a major project in its own right but it is our first deal in
one of the most important copper/cobalt target regions for our proprietary
leaching technology. Moreover, Anvil is an excellent partner, being one of the
most experienced and respected mining companies active in the DRC.
The agreement is to build and operate a pilot plant using AmmLeach(R) to treat a
total of 150,000 tonnes ('t') of cobalt ore for the production of cobalt metal.
The plant will also be able (with only minor modification) to process copper
ores to produce copper cathode.
Apart from Mutoshi, there is huge upside for our technology because of the
magnitude of the copper/cobalt resources in the DRC Copperbelt. It is the
world's largest sediment-hosted stratabound copper province. The carbonate
geology has particularly high acid consumption which makes it ideally suited to
our AmmLeach(R) process. By conservative estimates, the DRC Copperbelt contains
over 190 million tonnes ("Mt") of copper within at least fourteen giant
deposits, each over 2Mt copper, and yet is underexplored. As well as the
potential to make a satisfactory economic return as a stand-alone exercise, the
results from the pilot plant will form part of the decision by Anvil to
undertake a feasibility study for the development of a commercial-scale plant at
Mutoshi.
Turning to the opportunities for using AmmLeach(R) on zinc oxide deposits, we
recently announced significant progress here too. AmmLeach(R) amenability test
work done for Firestone Ventures Inc. ('Firestone') on its Torlon Hill zinc
oxide project ('Torlon Hill') in Guatemala, and Rio Cristal on its Charlotte
Bongara property produced favourable results.
The Torlon Hill testwork showed that potentially economic recoveries of zinc
should be achievable. As a result, Firestone requested Alexander submit a
conceptual process flow sheet using AmmLeach(R) for Torlon Hill and a plan for
substantial additional next stage testwork.
Additionally, Alexander and Firestone have agreed to work together
collaboratively to identify and target other high acid-consuming,
carbonate-hosted zinc oxide opportunities in Firestone's portfolio which may be
suitable for using AmmLeach(R). This is an important step in Alexander's aim of
demonstrating the commercial use of AmmLeach(R) for processing high grade zinc
oxide deposits. Such deposits are particularly found in North, Central and South
America.
In addition to these important developments, the Company has continued its
extensive discussions with mining companies about the use of its technology.
These discussions have covered projects with a range of base metals. In most
cases, it has led to the signing of confidentiality agreements and the
AmmLeach(R) amenability testing of copper, copper-cobalt, cobalt, zinc and
nickel deposit samples. This has brought meaningful testwork revenue to offset
our administrative costs.
We have continued to devote resources to research and development at the
University of Ballarat in Australia under the supervision of our consultant, Dr.
Nicholas Welham, for our leaching technologies. This has focused on other ores,
including saprolite nickel laterites, molybdenum oxides, and mixed base/precious
metals oxides (eg. gold/copper, silver/zinc). The latter, if successful, would
open up a major new avenue of use for AmmLeach(R) as, hitherto, these ores have
been highly problematic to treat.
Our consultancy agreement with RPT Resources has been terminated but it has been
fruitful in identifying many project/corporate opportunities potentially
suitable for AmmLeach(R). Alexander now has the right to pursue these
opportunities directly.
In tandem with our business development efforts, we have been diligent with the
protection of our intellectual property ('IP'). A robust IP protection model of
patenting is on-going. This includes the filing of supplementary patents as
research and development work progresses. Our first patent for 'Method for
Ammoniacal Leaching' has been granted in the Republic of South Africa and the
patent is in turn, importantly, now subject to import into the DRC. Our other
specific applications are at various stages of the patenting process.
In January this year, we announced the listing and admission of the Company's
ordinary shares for trading on the TSX Venture Exchange ('TSXV') under the
symbol 'AXD'. This is an important step as North American investors and
commentators have both a considerable breadth and depth of knowledge of and an
interest in investing in the global mining sector. The listing will broaden
understanding of the potential of our innovative proprietary mineral processing
technology and increase the profile of the Company with the aim of facilitating
investment and share trading by this investment community.
We have now completed the sale of our wholly owned subsidiary Alexander Gold
Group Limited ('AGGL'), which was the holding company for the Company's
Argentina assets, for a total consideration of US$2.2million. An amount of
US$400,000 was received on execution of the legally binding sale and purchase
agreement ('SPA'), with 18 monthly payments of US$100,000 each due commencing
March 2011. Along with the disposal of our investment in Mariana Resources,
which realised a profit of GBP 370,000 (on a net consideration of GBP 470,000),
this has bolstered our cash position, which was GBP 2.45m at the end of 2010.
Outlook
The global mining industry has enjoyed another strong year, supported by buoyant
metals prices. This is despite the volatility in the global economy and equity
markets. The healthy fundamentals for base metals mining companies, centred upon
strong growth in demand for their core products, should remain. Those developing
countries which are the key stimulants for growth in base metals demand, led by
China, India and Brazil, are still all enjoying strong economic expansion.
In this environment, we believe that the fundamental tenets of our business plan
are well founded and will amply reward shareholders. Our strong progress to date
reinforces this belief and we look forward to the year ahead with enthusiasm and
confidence.
Alexander's significant progress to date would not be possible without the hard
work and dedication of its employees, consultants and directors, and I would
like to record my grateful appreciation.
Matt Sutcliffe, Executive Chairman
9 May 2011
Consolidated income statement
For the year ended 31 December 2010
2010 2009
GBP '000 GBP '000
----------------------------------------------------------------------------
Continuing operations
Revenue 220 220
Cost of sales (4) (19)
----------------------------------------------------------------------------
Gross profit 216 201
Administrative expenses (1,361) (1,345)
Exploration and development expenses - (2)
Research and development expenses (369) (251)
----------------------------------------------------------------------------
Operating loss (1,514) (1,397)
Profit on sale of investment 370 -
Reversal of previously recognised impairment
charge - 68
Investment income 50 33
Finance cost - (44)
----------------------------------------------------------------------------
Loss before taxation (1,094) (1,340)
Income tax expense - -
----------------------------------------------------------------------------
Loss for the year from continuing operations (1,094) (1,340)
Profit / (loss) for the year from discontinued
operations 884 (196)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Loss for the year (210) (1,536)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic and diluted loss per share (pence):
from continuing operations (0.81p) (0.99p)
from continuing and discontinued operations (0.16p) (1.14p)
from discontinued operations 0.65p (0.15p)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
All components of profit or loss for the year are attributable to equity
holders of the parent.
Consolidated statement of comprehensive income
For the year ended 31 December 2010
2010 2009
GBP '000 GBP '000
----------------------------------------------------------------------------
Loss for the year (210) (1,536)
Other comprehensive income:
Exchange differences on translating foreign
operations (5) (41)
Gain on available for sale investments - 102
Previously recognised gain on investment
transferred to the income statement (102) -
----------------------------------------------------------------------------
Total comprehensive loss for the year attributable
to equity holders of the parent (317) (1,475)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated balance sheet
As at 31 December 2010
2010 2009
GBP '000 GBP '000
----------------------------------------------------------------------------
Assets
Property, plant & equipment - 1
Available for sale investments - 202
----------------------------------------------------------------------------
Total non-current assets - 203
----------------------------------------------------------------------------
Trade and other receivables 115 127
Cash and cash equivalents 2,357 3,540
----------------------------------------------------------------------------
2,472 3,667
Assets classified as held for sale 1,213 -
----------------------------------------------------------------------------
Total current assets 3,685 3,667
----------------------------------------------------------------------------
Total assets 3,685 3,870
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity attributable to owners of the parent
Issued share capital 13,549 13,549
Share premium 11,850 11,850
Merger reserve (2,487) (2,487)
Share option reserve 563 515
Translation reserve 1,343 1,348
Fair value reserve - 102
Accumulated losses (21,485) (21,279)
----------------------------------------------------------------------------
Total equity 3,333 3,598
----------------------------------------------------------------------------
Liabilities
Non-current liabilities
Provisions - 53
----------------------------------------------------------------------------
Current liabilities
Trade and other payables 279 219
Liabilities classified as held for sale 73 -
----------------------------------------------------------------------------
Total Current liabilities 352 219
----------------------------------------------------------------------------
Total liabilities 352 272
----------------------------------------------------------------------------
Total equity and liabilities 3,685 3,870
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated statement of cash flows
For the year ended 31 December 2010
2010 2009
GBP '000 GBP '000
----------------------------------------------------------------------------
Cash flows from operating activities
Operating loss - continuing operations (1,514) (1,397)
Operating loss - discontinued operations (204) (184)
Depreciation and amortisation charge 1 2
(Increase) / decrease in trade and other
receivables (5) 17
Increase / (decrease) in trade and other payables 78 (33)
Shares issued in payment of expenses - 96
Share option charge 52 117
Profit on disposal of property, plant and
equipment - (93)
----------------------------------------------------------------------------
Net cash outflow from operating activities (1,592) (1,475)
----------------------------------------------------------------------------
Cash flows from investing activities
Interest received 10 34
Proceeds from sale of investment 470 93
----------------------------------------------------------------------------
Net cash inflow from investing activities 480 127
----------------------------------------------------------------------------
Net decrease in cash and cash equivalents (1,112) (1,348)
Cash and cash equivalents at beginning of period 3,540 4,986
Exchange differences 26 (98)
----------------------------------------------------------------------------
Cash and cash equivalents at end of period 2,454 3,540
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated statement of changes in equity
For the year ended 31 December 2010
Share
Share Share Merger option
capital premium reserve reserve
GBP '000 GBP '000 GBP '000 GBP '000
At 1 January 2009 13,453 11,850 (2,487) 703
-------------------------------------------------------------------------
Accumulated loss for period - - - -
Exchange difference on
translating foreign
operations - - - -
Valuation gains on
available for sale
investments - - - -
-------------------------------------------------------------------------
Total comprehensive income
for the period
attributable to equity
holders of the parent - - - -
-------------------------------------------------------------------------
Share option costs - - - 117
Share options cancelled - - - (305)
Shares issued 96 - - -
-------------------------------------------------------------------------
At 31 December 2009 13,549 11,850 (2,487) 515
-------------------------------------------------------------------------
Accumulated loss for period - - - -
Exchange difference on
translating foreign
operations - - - -
Realisation of investment - - - -
-------------------------------------------------------------------------
Total comprehensive income
for the period
attributable to equity
holders of the parent - - - -
-------------------------------------------------------------------------
Share option costs - - - 52
Share options cancelled - - - (4)
Shares issued - - -
-------------------------------------------------------------------------
At 31 December 2010 13,549 11,850 (2,487) 563
-------------------------------------------------------------------------
Trans-
lation Fair value Accumulate Total
reserve reserve d losses equity
GBP '000 GBP '000 GBP '000 GBP '000
At 1 January 2009 1,389 - (20,048) 4,860
---------------------------------------------------------------------------
Accumulated loss for period - - (1,536) (1,536)
Exchange difference on
translating foreign
operations (41) - - (41)
Valuation gains on
available for sale
investments - 102 - 102
---------------------------------------------------------------------------
Total comprehensive income
for the period
attributable to equity
holders of the parent (41) 102 (1,536) (1,475)
---------------------------------------------------------------------------
Share option costs - - - 117
Share options cancelled - - 305 -
Shares issued - - - 96
---------------------------------------------------------------------------
At 31 December 2009 1,348 102 (21,279) 3,598
---------------------------------------------------------------------------
Accumulated loss for period - - (210) (210)
Exchange difference on
translating foreign
operations (5) - - (5)
Realisation of investment (102) - (102)
---------------------------------------------------------------------------
Total comprehensive income
for the period
attributable to equity
holders of the parent (5) (102) (210) (317)
---------------------------------------------------------------------------
Share option costs - - - 52
Share options cancelled - - 4 -
Shares issued - - - -
---------------------------------------------------------------------------
At 31 December 2010 1,343 - (21,485) 3,333
---------------------------------------------------------------------------
Notes
1. Financial statements
The financial information set out in this announcement does not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006
for the year ended 31 December 2010 or for the year ended 31 December 2009, but
is derived from those accounts. The financial statements for 2010 will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting. The auditors have issued an unqualified report on these accounts.
2. Summary of significant accounting policies
a) Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") in force at the reporting date and their
interpretations issued by the International Accounting Standards Board ("IASB")
as adopted for use within the European Union and with IFRS and their
interpretations adopted by the IASB.
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up to
31 December each year.
b) Disposal groups and non-current assets held for sale
Disposal groups and non-current assets held for sale are measured at the lower
of carrying amount and fair value less costs to sell.
Disposal groups and non-current assets are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather than through
continuing use.
This is the case, when the asset or disposal group is available for immediate
sale in its present condition subject only to terms that are usual and customary
for sales of such assets or disposal groups and the sale is considered to be
highly probable.
A sale is considered to be highly probable if the appropriate level of
management is committed to a plan to sell the asset or disposal group, and an
active programme to locate a buyer and complete the plan has been initiated.
Further, the asset or disposal group has been actively marketed for sale at a
price that is reasonable in relation to its current fair value. In addition, the
sale is expected to qualify for recognition as a completed sale within one-year
from the date that it is classified as held for sale.
c) Research and development expenditure
Research costs are recognised in the income statement as an expense as incurred.
Development costs are recognised in the income statement as an expense as
incurred unless the development project meets specific criteria for deferral and
amortisation. No development costs have been deferred to date because there is
insufficient information at the balance sheet date to quantify the expected
future economic benefits from the proprietary leaching technologies.
3. Disposal group - discontinued operations
A net profit for the year attributed to the discontinuing business amounted to
GBP 884,000, comprised as follows:
2010 2009
Discontinued operation GBP '000 GBP '000
Impairment reversal 1,099 -
Administrative expenses (182) (167)
Exploration and development expenses (23) (110)
Profit on disposal of property, plant and
equipment - 93
Investment income 1 1
Finance cost (11) (13)
----------------------------------------------------------------------------
Profit/(loss) for the year on discontinued
operation 884 (196)
----------------------------------------------------------------------------
The assets and liabilities of the disposal group / discontinued
business comprised of:
2010
GBP '000
Current assets:
Other receivables 1,116
Cash at bank 97
---------------------------------------------------------------
Total assets of disposal group 1,213
---------------------------------------------------------------
Current liabilities:
Trade and other payables 18
Environmental provision 55
---------------------------------------------------------------
Total liabilities of disposal group 73
---------------------------------------------------------------
4. Dividends
The directors do not recommend the payment of a dividend (2009: nil)
Annual Report
The Annual Report will be posted to all shareholders by 20 May 2011 and will be
available on the Company's website at www.alexandermining.com. Additional copies
will be made available to the public, free of charge, from the Company's
registered office at 35 Piccadilly, London W1J 0DW.
Annual General Meeting
The Company's Annual General Meeting will be held on Wednesday 15 June 2011 at
10.30 a.m. at the East India Club, 16 St James's Square, London SW1Y 4LH. The
Notice of the AGM is included in the Company's annual report and the associated
explanatory notes relating to the proposed resolutions at that meeting.
Disclaimers
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
This news release may contain forward looking statements, being statements which
are not historical facts, including, without limitation, statements regarding
potential mineralization, exploration results, resource or reserve estimates,
anticipated production or results, sales, revenues, costs, "best-efforts"
financings or discussions of future plans and objectives. There can be no
assurance that such statements will prove accurate. Such statements are
necessarily based upon a number of estimates and assumptions that are subject to
numerous risks and uncertainties that could cause actual results and future
events to differ materially from those anticipated or projected. Important
factors that could cause actual results to differ materially from the Company's
expectations are in Company documents filed from time to time with the TSX
Venture Exchange and provincial securities regulators, most of which are
available at www.sedar.com. The Company disclaims any intention or obligation to
revise or update such statements unless required by law.
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