Interim Results
For Immediate Release:
COPPER RESOURCES CORPORATION
("CRC" or the "Company")
INTERIM REPORT FOR SIX MONTHS
Ended June 30, 2006
Copper Resources Corporation (AIM: CRC), the minerals exploration and mining
company, today released its interim report for the six months ended June 30,
2006.
Highlights from January-September, 2006
* Completion of the feasibility study for the Kinsenda Restart Project in
February 2006 in the Democratic Republic of Congo ("DRC") by Mineral
Engineering Technical Services Pty Ltd ("METS")
* Commencement in February of the Kinsenda dewatering programme.
* Raising of US$7.7 million at the end of March through a private placement
* Completion in April by FinOre of Perth of a new resource estimate for
Kinsenda that upgraded the previous estimate to JORC and SAMREC standards
* Completion in July of the infill drilling programme at Hinoba-an in the
Philippines
* Commencement in July of construction of the processing plant at the
Kinsenda site.
* Acceptance in July of offer of finance from RMB Resources for US$32 million
for the Kinsenda Restart Project.
* Discovery in September 2006 of gold at the Hinoba-an property in the
Philippines
* Identification of an attractive process (Dense Media Separation) for
treating the ore of the Haib Project in Namibia, with new scoping study
prepared by METS pointing to a 50% reduction in capital costs previously
estimated at US$700 million
Overview
Since listing in April 2005 CRC has acquired the Namibia and DRC properties.
The Company has made substantial progress on all three of its projects, so that
the Directors expect that Kinsenda in DRC will be brought into production in
2007, the Hinoba-an bankable feasibility study will be completed in 2007, and
the Haib feasibility study will be completed in mid 2007.
Kinsenda Project - DRC
Since CRC acquired 75% of MMK the following important milestones have been
reached in the ongoing redevelopment of the Kinsenda Restart Project:
* METS have completed the feasibility study
* METS are currently completing the bankable feasibility study
* Dewatering has commenced
* Construction has commenced
* RMB Resources have approved a project financing facility of $32.0 million
assuring the financing of Kinsenda
Hinoba-an Project - Philippines
The infill and geotechnical drilling is now complete and the BFS is continuing
with metallurgical testwork underway, with a resource estimate to be completed
in the third quarter of 2006. During geotechnical drilling CRC discovered a
significant gold system next to the current ore body. CRC is proceeding with
infill drilling on a 50x50 grid to prove up the gold discovery and proceed with
a gold resource estimate.
Haib Project - Namibia
Based on the positive conclusions of the new METS scoping study, CRC is
embarking on a pilot-scale test work programme for the promising Dense Media
Separation process. In addition, CRC will begin work on site to collect samples
of ore for mineralogical testing to ensure that, over the whole of the ore
body, mineralisation characteristics are documented. The pilot plant test
results will be available in mid-2007, at which point CRC will commence a
bankable feasibility study.
For further information:
Mitchell Alland Executive Vice Chairman - CRC +44 (0) 787 569 5563
Jonathan Naess Nabarro Wells & Co Limited +44 (0) 20 7710 7400
Richard Morrison Westhouse Securities +44 (0) 20 7601 6100
Toby Hall gth media relations +44 (0) 20 7153 8035
The accompanying unaudited consolidated Financial Information for the six
months ended 30 June 2006 and 30 June 2005 is expressed in United States
Dollars, has been reviewed by the Company's Auditors and has an effective date
of 27 September 2006.
COPPER RESOURCES CORPORATION
CONSOLIDATED INCOME STATEMENT
For the six month period ended 30 June 2006
(Unaudited)
30 June 31 December
2006 2005 2005 2004
$'000 $'000 $'000 $'000
Revenue 3,493 - - -
Cost of Sales (2,218) - - -
Gross Profit 1,275 - - -
Interest receivable and similar 105 137 298 2
income
Administration expenses (4,175) (543) (1,449) (744)
Unrealised foreign exchange gain/ 218 (384) 78 (1)
(loss)
Share option expenses - (1,169) (1,559) (74)
Warrant expenses (3,877) - - -
Other write offs - - (435) -
Loss on ordinary activities before (6,454) (1,959) (3067) (817)
taxation
Income tax expense - - - -
Minority interest 311 - 1 -
Loss for the financial year (6,143) (1,959) (3,066) (817)
Basic loss per ordinary share (Note (12.0c) (10c) (13.6c) (817,000)
1)
Diluted loss per ordinary share (Note (9.9c) (10c) (12.5c) (817,000)
1)
All amounts relate to continuing operations.
COPPER RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEET
As at 30 June 2006
(Unaudited)
Notes As at 30 As at 30 As at 31
June 2006 June 2005 December
(unaudited) (unaudited) 2005
(audited)
$'000 $'000 $'000
Assets
Non-current Assets
Property, plant and equipment 3 6,525 6 5,526
Development, exploration and 2 31,178 2,544 26,478
evaluation
Investment in other company 200 200 200
Total non-current assets 37,903 2,750 32,204
Current Assets
Inventories 4,165 - 5,422
Trade and other receivables 3,119 196 2,300
Cash and cash equivalents 12,497 16,441 11,565
Total current assets 19,781 16,637 19,287
Total assets 57,684 19,387 51,491
Equity and liabilities
Shareholder's equity
Share capital 4 43,024 19,321 30,365
Contributed surplus 2,817 - 2,817
Other reserve 6,406 1,629 1,576
Retained earnings (10,116) (2,867) (3,973)
Total equity 42,131 18,083 30,785
Minority interests 3,993 14 4,304
Net funds available to shareholders 46,124 18,097 35,089
Non-current liabilities
Deferred tax liabilities 18 493 13
Deferred purchase consideration 500 625 475
Borrowings 5 - - 354
Total non-current liabilities 518 1,118 842
Current Liabilities
Trade and other payables 3,457 96 5,097
Deferred purchase consideration 75 75 150
Borrowings 5 7,509 - 10,313
Total current liabilities 11,041 171 15,560
Total liabilities 11,559 1,289 16,402
Total equity and liabilities 57,683 19,387 51,491
COPPER RESOURCES CORPORATION
CHANGES IN EQUITY STATEMENT
For the six month period ended 30 June 2006
(Unaudited)
Share Contributed Other Retained Total
Capital surplus Reserves earnings
$'000 $'000 $'000 $'000 $'000
Balance, 31 December 2004 10 2,817 107 (907) 2,027
Additional contribution of 30,355 - - - 30,355
capital
Loss arising in the period - - - (3,066) (3,066)
Share based transactions - - 1,559 - (1,559)
Foreign exchange loss - - (90) - (90)
Balance, 31 December 2005 30,365 2,817 1,576 (3,973) 30,785
Loss for the 6 months - - - (6,143) (6,143)
Additional contribution of 12,659 - - - 12,659
capital
Share based transactions - - 4,830 - 4,830
At 30 June 2006 43,024 2,817 6,406 (10,116) 42,131
COPPER RESOURCES CORPORATION
CONSOLIDATED CASH FLOW STATEMENTS
For the six month period ended 30 June 2006
(Unaudited)
30 June 31 December
2006 2005 2005 2004
$'000 $'000 $'000 $'000
Cash flows from operating activities (6,559) (1,959) (3,364) (817)
Adjusted for:
Amortisation of intangible assets - 1 - 1
Share based transactions 3,877 1,169 1,559 452
Depreciation on property plant and 347 - 13 -
equipment
Foreign exchange gain/(loss) (218) (4) - 5
Operating cash flows before movement in (2,553) (793) (1,792) (359)
working capital
Change in receivables/inventories 439 (169) 1,814 (8)
Change in payables (1,468) 94 (5,218) 31
Net cash (used in)/generated from (1,029) (75) (3,404) 23
operations
Net cash used in operating activities (3,582) (869) (5,196) (336)
Cash flows from investing activities
Interest received 105 - 298 -
Acquisition of subsidiaries - - (12,914) (6)
Cash acquired in acquisition of - 1 2,454 1
subsidiaries
Investment in exploration costs (3,746) (599) (4,363) (4)
Investment in associates - (200) (200) (60)
Purchase of property, plant and (1,346) (5) (217) (1)
equipment
Net cash generated from/(used in) (4,987) (804) (14,942) (70)
investment activities
Cash flows from financing activities
Share capital issued (net of costs) 7,249 16,765 30,355 -
Contributions by shareholder 75 - - 1,592
Drawdown of loans 2,177 - - -
Net cash from financing activities 9,501 16,765 30,355 1,592
Net increase in cash and cash 932 15,092 10,217 1,186
equivalents
Cash and cash equivalents at beginning 11,565 1,348 1,348 162
of period
Cash and cash equivalents at end of 12,497 16,441 11,565 1,348
period
1. Nature of Operations
Copper Resources Corporation ("CRC" or the "Company") is the holding company of
a mineral exploration and development group of companies (the "Group"). The
Group is involved in the exploration, evaluation and development of copper
deposits in the Philippines, Namibia and Democratic Republic of the Congo
("DRC").
Kinsenda, Musoshi and Lubembe Projects - DRC
In February 2006 Mineral Engineering Technology Services ("METS") completed a
Feasibility Study on the Kinsenda redevelopment project in the DRC. In July
2006 the Company announced that Rand Merchant Bank ("RMB") had been mandated
and received credit approval to provide a US$32.0 million project finance
facility for the redevelopment of the Kinsenda Project. The redevelopment of
Kinsenda is progressing and commissioning is scheduled for June 2007. Musoshi
and Lubembe are currently on care and maintenance and will be progressed once
CRC has commissioned Kinsenda.
Hinoba-an Project - Philippines
CRC is continuing the Bankable Feasibility Study ("BFS") on the Hinoba-an
Project in the Philippines. The BFS is due for completion is Q2, 2007.
Haib Project - Namibia
CRC has completed the process review and identified Dense media separation as
an amenable process for the Haib ore. The initial review has been completed at
a scoping level and now needs to be enhanced into a feasibility study and BFS.
Details of progress on the companies various projects can also be obtained on
CRC's website www.copperresources.com .
In May 2006 The Company completed a private placement raising US$7.76 million
by issuing 8.0 million shares. These funds are being utilised in the
redevelopment of the Kinsenda Project in the DRC and on going working capital.
The accompanying interim consolidated financial information is prepared by
management in accordance with International Financial Reporting Standards
("IFRS"). Selected information and disclosures required in notes to annual
consolidated financial statements has been condensed or omitted. This interim
consolidated financial information should be read in conjunction with the
Company's audited annual consolidated financial statements and notes for the
year ended 31 December 2005. The interim financial information has been
prepared following the same accounting policies and methods of computation as
the annual consolidated financial statements for the year ended 31 December
2005.
Basic and Diluted Loss Per Share
The calculation of basic loss per ordinary share for the six months ended 30
June 2006 is based on the loss on ordinary activities after taxation of $6.14
million (2005: $1.96 million) and on 50,839,566 ordinary shares being the
weighted average of ordinary shares in issue and ranking for dividend during
the period.
The calculation of diluted loss per ordinary share for the six months ended 30
June 2006 is based on the loss on ordinary activities after taxation of $6.14
million and on 62,062,670 ordinary shares, warrants and share options being the
weighted average of ordinary shares, warrants and share options in issue and
ranking for dividend during the period.
Details of warrants and share options in issue which could potentially dilute
earnings per share in the future are shown in Note 4.
Impairment
The Company assesses whether impairment exists in any of its exploration
projects and writes down that project to its estimated recoverable value when
such impairment is found to exist. No write downs were recorded in the interim
financial information. If there had been such a write down it would have been
recorded in the Company's Income Statement.
Risks
The exploration for an exploitation of natural resources are speculative
activities that involve a high degree of risk for the Company and it's
shareholders, the risk factors which should be taken into account in assessing
the companies activities should include, but are not limited to those set out
below:
* Copper price volatility
* Currency fluctuations
* Normal risks of mining operations
* Political risks
* Government regulations
2. Exploration, evaluation and development
Deferred
Exploration Costs
$'000
Balance, 31 December 2004 212
Additions 26,266
Balance, 31 December 2005 26,478
Additions 4,700
At 30 June 2006 31,178
Intangible assets consist of capitalised exploration, evaluation and
development costs in relation to each of the Company's mining assets.
3. Property, plant and equipment
Freehold Heavy Plant and Total
properties Equipment Equipment
$'000 $'000 $'000 $'000
Cost
At 31 December 2005 477 5,135 312 5,924
Additions - 1,011 335 1,346
At 30 June 2006 477 6,146 647 7,270
Depreciation
At 31 December 2005 11 348 39 398
Charge for the 6 months 9 298 40 347
At 30 June 2006 20 646 79 745
Net book value
At 31 December 2004 - - 2 2
At 31 December 2005 466 4,787 273 5,526
At 30 June 2006 457 5,500 568 6,525
4. Share Capital
Number Amount
US$'000
Authorised
Ordinary Shares of no par value 500,000,000 -
Number Amount
US$'000
Issued
Balance, 31 December 2005 46,794,335 30,365
Ordinary Shares issued on exercise of 300,000 75
options
Ordinary shares issued for debt/equity swap 5,499,857 5,335
Ordinary Shares issued on private placement 8,000,000 7,249
Balance 30 June 2006 60,594,192 43,024
In March 2006 a total of $75,000 was raised from the exercise of 300,000
options to purchase ordinary shares of the Company at 25c.
On 6 June 2006 the Company completed a public placement to raise gross proceeds
of $7.76 million, through the issuance of 8,000,000 ordinary shares at 97c per
share and 4,000,000 warrants at 75p per share. The net proceeds of the offering
were $7.25 million after deducting associated raising costs of $0.43 million
plus various professional fees and stamp duty reserve tax costs related to the
offering.
In March 2006 the Company issued 5,499,857 ordinary shares at 97c per share to
the Forrest Group converting $5.33 million of debt to equity.
Share Options and Warrants
The Company has issued the following options at 30 June 2006:
Share Options Held Share options Held Date of Option Price Exercise
at 30 June 2006 at 31 December Grant per Share Period
2005
4,053,475 4,353,475 2005 various Up to 2010
The Company has issued the following warrants during the 6 months ended 30 June
2006:
Number of Number of Date of Grant Subscription Exercise
Warrants at 30 Warrants at 31 Price Period
June 2006 December 2005
4,000,000 - 4 April 2006 75p 4 April 2008
2,749,929 - 4 April 2006 75p 4 April 2008
120,000 - 4 April 2006 55p 4 April 2011
6,869,929 -
5. Borrowings
During the 6 months the Company concluded a debt for equity swap
Current Non-Current
$'000 $'000
At 30 June 2005 - -
Loan drawdown 10,313 354
At 31 December 2005 10,313 354
Loan drawdown 2,531 -
Loan repayment - (354)
Debt for Equity swap (5,335) -
At 30 June 2006 7,509 -
During the 6 months the Company converted the trade creditor of $2.4 million
into loan and also completed a debt for equity swap by issuing 5,499, 857
ordinary shares extinguishing $5.3 million in debt.
---ENDS---
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