GLENCAR MINING PLC
Announcement of Annual Results
29 May 2007
Glencar Mining plc ("Glencar" or the "Company") today announces its
results for the year ended 31 December 2006.
Highlights from the Chairman's statement:
* 2006 was another year of exciting exploration results for Glencar
* Results to date from our Komana West Project continue to impress
* Intention to drill the Komana East deposit using the extensive
knowledge gained from the Komana West Project
* Just completed promising exploration drilling programmes at
Badogo-Malikila, adjacent to the Komona concession - results are
awaited.
* Exploration on the Sankarani Project also continued at a fast
pace.
* In April 2007 a private placing of 22,600,000 new shares to
institutional investors was completed
* Audited results for the financial year ending December 2006 show
a loss of $1,450,961
The Komana West Project
The year 2006 represents a very important one in your Company's
growth and the exciting exploration results obtained last year have
continued through 2007 to date. Our primary exploration focus is on
our Komana West deposit in southern Mali where we are currently
completing our fourth phase of drilling. The Komana West deposit is
displaying evidence of very persistent, ore-grade mineralisation over
extensive widths and all the indications to date suggest that this
deposit will prove to be a commercially viable orebody.
Mali is a country well endowed with profitable gold deposits, but it
also possesses the essential fiscal and legal framework to enable
these deposits to be successfully worked with attendant benefits to
the State as well as the other stakeholders involved in the Nation's
resources. Gold is Mali's primary export earner and the Government of
Mali strongly supports the orderly and efficient extraction of the
natural resources in an environmentally responsible way. It is a
country rich in culture and tradition, with a young but now well
established democratic political system.
The results to date from our Komana West project continue to impress.
Recent intersections such as 49 metres at 6.0 grams per tonne and 86
metres at 2.73 grams per tonne indicate the presence of considerable
widths of ore grade mineralisation. The strike length of this
mineralised zone is already established at 1,100 metres and may
extend for at least another 500 metres further south. The drilling to
date also suggests that the mineralisation is open at depth. The
Komana Shear Zone, within which the Komana West deposit lies, extends
throughout the entire 20 kilometre length of the Komana Licence area.
Our field mapping and sampling programmes have discovered a number of
exciting exploration targets to the south of the Komana West deposit,
such as at Kama, 9 kilometres to the south. The Komana East deposit,
some 7 kilometres to the east of the Komana West deposit, was
explored by Randgold Resources and North Limited in the 1990's and
they estimated a non-JORC compliant resource of 280,000 ounces of
gold within a brecciated metasediment in a northeast-southwest
trending shear zone. We intend to drill the Komana East deposit,
using the extensive knowledge we have gained from our work at Komana
West to guide our evaluation of the deposit.
We have also recently completed an exploration drilling programme on
a promising target at Badogo-Malikila on the Solona concession,
adjacent to the Komana concession. Approximately 1,250 metres of
reverse circulation drilling has been completed and assay results are
awaited.
We are very pleased with the progress of our exploration programmes
to date. We are currently in the course of estimating a JORC -
compliant resource for the Komana West deposit, which we hope to be
able to announce before September. Drilling, which will shortly be
halted during the rainy season in Mali, will recommence there in
early October. Intensive drilling will be carried out both to improve
resource classification and to test the depth and strike extension of
the resource.
Sankarani Project
Exploration on the Sankarani Project also continued at a fast pace.
We completed over 8,000 metres of drilling on eight targets within
the three concessions which comprise our joint venture with a
subsidiary of Gold Fields Limited. Significant mineralisation was
encountered on three of those targets, at Sanankoro, on the Bokoro
licence; at Sanioumale West, on the Sanioumale licence and at Kabaya
South, on the Farasaba licence. It is likely that drilling will also
be continuing next season on the Sankarani Project, where targets at
Kabaya South and Sanioumale will be drilled in follow-up programmes,
together with additional exploration targets arising from our ongoing
exploration work. Confirmation of the proposed work programme at the
Sankarani Project is awaited following a review of exploration
results to date by the joint venture partners.
Asheba, Ghana
Our Asheba Project in Ghana has seen a much lower level of activity
recently due to the increasing call on resources by the intensive
activity on the exploration projects in Mali.
Other Projects
We are continuing to review the exploration results from our Makina
Project in southeast Uganda. A new airborne geophysical survey has
been flown by the Ugandan government and results are due for release
in mid 2007. We are keen to review these survey results to see if
they can guide our next phase of exploration in this prospective, but
underexplored part of Africa.
Despite encountering encouraging technical signatures in our
zinc/lead exploration programme in Co. Laois in Ireland, we decided
to relinquish our two licences there. A considerable amount of
expensive deep drilling would be required to advance the project and
it was felt that these funds could be spent to better effect in Mali.
Consequently, we have written off our investment in this project.
Private Placing of Shares
In April 2007, we completed a private placing of 22,600,000 new
shares to institutional investors. This funding, carried out at the
market price at the time, provides the Company with sufficient
funding to complete all anticipated drilling required to calculate a
resource for the Komana Project as well as conducting drilling for
strike and depth extensions to known mineralisation. In addition, the
funding will allow drill testing of other significant exploration
targets such as the Komana East deposit. Other targets, south of the
Komana West deposit and on the adjacent Solona licence will also be
drilled. The next drill season in Mali is expected to be just as
active and as exciting as the last.
Financial Results
The audited results for the financial year ending December 2006 show
a loss for the period of $1,450,961. This loss includes, for the
first time, under new accounting rules, an imputed cost to the
Company of the issue of share options to Directors and staff. Our
accounts are denominated in US Dollar currency and, due to the
decline of the dollar over the last year, certain costs whose
underlying currency is the Euro, appear as increased costs in US
Dollar terms.
Outlook
Following completion of the recent placing and the continuing
impressive results from the Komana West Project, in particular,
Glencar is in a very strong position to grow rapidly in terms of
market capitalisation and gold ounces per share. We now have the
funding to embark on substantial drilling programmes in Mali and also
in Ghana. Clearly, however, most of our exploration funding will be
devoted to the Komana West deposit and it is my belief that this
deposit will emerge as an addition to the growing list of profitable
gold mines in this prolific region of West Africa.
I would like to take this opportunity to thank our staff in Mali, on
both the Yanfolila and Sankarani Projects, for their diligence and
hard work, often in trying conditions. They have contributed
significantly to the success of our programmes to date.
I would also like to thank and congratulate the executive directors
on their excellent achievements during the past year.
Our Annual Report and Accounts and Notice of AGM will be posted to
shareholders shortly.
Sean Finlay
Chairman
GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 (AUDITED)
2006 2005
US$ US$
ADMINISTRATIVE EXPENSES (630,492) (725,654)
COST OF SHARE AWARDS (643,328) -
GAIN (LOSS) ON EXCHANGE 214,001 (19,422)
------------ ------------
OPERATING LOSS (1,059,819) (745,076)
EXCEPTIONAL ITEM (455,198) -
BANK INTEREST RECEIVABLE 90,612 37,269
INTEREST PAYABLE (24,822) (23,213)
------------ ------------
LOSS ON ORDINARY
ACTIVITIES BEFORE TAXATION (1,449,227) (731,020)
TAXATION (1,734) (892)
------------ ------------
LOSS FOR THE FINANCIAL YEAR (1,450,961) (731,912)
======== ========
LOSS PER SHARE (CENTS) (0.64) (0.39)
======== ========
DILUTED LOSS PER SHARE (0.62) (0.36)
(CENTS)
======== ========
GROUP BALANCE SHEET AS AT 31 DECEMBER 2006 (AUDITED)
2006 2005
US$ US$
ASSETS
Non current assets
Property, plant and equipment 410,203 28,447
Intangible assets 5,536,924 3,183,205
------------- -------------
5,947,127 3,211,652
------------- -------------
Current assets
Debtors 9,465 18,841
Cash 1,635,395 1,152,402
------------- -------------
1,644,860 1,171,243
------------- -------------
Total Assets 7,591,987 4,382,895
======== ========
EQUITY
Capital and reserves attributable to
the Group's
equity holders
Share capital 8,507,021 7,420,009
Share premium 38,009,726 36,215,883
Capital conversion reserve fund 82,092 82,092
Retained losses (40,956,434) (40,148,801)
------------- -------------
5,642,405 3,569,183
Minority Interest 1,159,531 (112,910)
------------- -------------
Total equity 6,801,936 3,456,273
------------- -------------
LIABILITIES
Non current liabilities
Creditors and accrued expenses 342,818 344,513
------------- -------------
Current liabilities
Trade and other payables 447,233 582,088
Current corporation tax liabilities - 21
------------- -------------
447,233 582,109
------------- -------------
Total liabilities 790,051 926,622
------------- -------------
Total equity and liabilities 7,591,987 4,382,895
======== ========
GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006
(AUDITED)
2006 2005
US$ US$
Cash flows from operating activities
Cash used in operations (560,954) (621,067)
Corporation tax paid (1,755) (870)
------------- -------------
Net generated from operating activities (562,709) (621,937)
------------- -------------
Cash flows from investing activities
Purchases of property, plant and (389,289) (2,020)
equipment
Purchases of intangible assets (1,113,300) (578,422)
Interest received 90,612 37,269
------------- -------------
Net cash used in investing activities (1,411,977)) (543,173)
------------- -------------
Cash flows from financing activities
Proceeds from the issuance of ordinary 2,457,679 1,315,767
shares
------------- -------------
Net cash generated from financing 2,457,679 1,315,767
activities
------------- -------------
Net increase in cash 482,993 150,657
Cash at beginning of the year 1,152,402 1,001,745
------------- -------------
Cash at end of the year 1,635,395 1,152,402
------------- -------------
The financial information contained above does not constitute the
group's full statutory accounts for the year ended 31 December 2006
but has been extracted from these accounts. The full statutory
accounts and auditor's report thereon will be sent to shareholders
shortly and filed with the Companies Office.
For further information, please contact:
Glencar Mining plc
Hugh McCullough, Managing Director
Tel: +353 1 661 9974
e-mail: info@glencarmining.ie
Heneghan PR
Sean O'Riordain
Tel: +353 87 2556727
e-mail: sean@hpr.ie
Bishopsgate Communications
Maxine Barnes/Nick Rome
Tel: +44 20 7562 3350
e-mail: nick@bishopsgatecommunications.com
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Copyright � Hugin ASA 2007. All rights reserved.
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