Interim Results

AIM: KEFI 25 September 2008 KEFI Minerals Plc ("KEFI Minerals" or the "Company") INTERIM RESULTS FOR THE HALF-YEAR ENDED 30 JUNE 2008 KEFI Minerals, the AIM-quoted gold and copper exploration company with projects in Turkey, is pleased to announce its unaudited interim results for the half-year ended 30 June 2008. Highlights of the Half-Year Period * Exploration portfolio in Turkey expanded to nine projects through the addition of the Hasancelebi and the Bakir Tepe Licences. * Further drilling at the Derinin Tepe identified additional gold-silver mineralisation. * KEFI Minerals continued to evaluate joint ventures and acquisitions of properties with known mineral resources. * Strong exploration team and proprietary database enable the Company to rapidly identify and assess targets. * Loss for the half-year period totalling £557,000 reflects the Company's conservative accounting policy of writing of all expenditure until a commitment to develop a project is made by the Board. KEFI Minerals' Managing Director, Jeff Rayner, commented: "The Company continued to make good progress over the first half of 2008. Our exploration portfolio has been expanded with the addition of new project areas in Turkey. We continue to actively evaluate further acquisitions and potential joint ventures in Turkey and other countries." Enquiries KEFI Minerals WH Ireland Fox-Davies Bishopsgate Capital Communications Jeffrey Rayner Laurie Beevers Richard Hail Maxine Barnes Katy Mitchell Nick Rome +90 533 928 19 13 +44 161 832 +44 207 936 5230 +44 20 7562 3350 2174 www.kefi-minerals.com References in this announcement to exploration results and potential have been approved for release by Mr Malcolm Stallman, B.App.Sc.Mr Stallmanis a geologist and has more than 20 years' relevant experience in the field of activity concerned. He is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and has consented to the inclusion of the material in the form and context in which it appears. Managing Director's Report Our aim is to add value to our projects and create wealth for our stakeholders through the cost-effective acquisition or discovery and subsequent development of mineral resources. We continue to benefit from the extensive experience of the Company's Directors and senior management in exploration, development, financing and operation of natural resources projects. Finance KEFI Minerals commenced trading on AIM on 18 December 2006 and aims to create shareholder value through the discovery and exploitation of gold and copper deposits. In May 2008 the Company raised £624,367 by way of a placing by WH Ireland Limited of 20,812,242 new ordinary shares of 1p each at 3p per share together with the issue of 10,406,121 warrants to subscribe for new ordinary shares of 1p each at 5p per share on the basis of one warrant for every two new ordinary shares. The loss for the half-year period totalled £557,000 and reflects the Company's conservative accounting policy. All expenditure is written off until the Board decides to commence development of a project, from which point costs associated with the project would be capitalized. At 30 June 2008, KEFI Minerals had £524,000 in cash. Technical and administrative systems and personnel are provided to KEFI Minerals by EMED Mining on a cost-recovery basis, thus enabling KEFI Minerals to reduce overheads and spend more on discovering economic mineral deposits. Exploration Strategy KEFI Minerals' exploration assets comprise exploration licences in Turkey and the ownership of database containing information about further prospective sites in Turkey. Our Company aims to grow rapidly through either grassroots discovery or by acquiring a project with a defined resource or mine. We welcome proposals from owners of exploration properties who are interested in either selling or potentially partnering with KEFI Minerals. KEFI Minerals currently has the following nine exploration projects in Turkey: 1. At Derinin Tepe in the Western Anatolia Region, low-sulphidation epithermal quartz veins have been identified with gold and silver mineralisation. 2. At Artvin in northeastern Turkey, extensive hydrothermal alteration and gold and base metal mineralisation have been recognised in the project area, as well as historical workings indicating potential for economic mineralisation. 3. At Gumushane in eastern Turkey, areas of extensive hydrothermal alteration have been recognised in the project area, as well as coincident areas of interest identified through interpretation of Aster data. 4. Hasancelebi, in central Turkey, is prospective for high-sulphidation epithermal gold mineralisation and Iron-Oxide Copper-Gold ("IOCG") mineralisation. 5. At Karalar, in Central Anatolia, highly anomalous gold in stream sediments have been identified in an area of historic base metal mines. 6. Muratdag, in the Western Anatolia Region, is prospective for Carlin-style epithermal gold mineralisation. 7. Meyvali, in the Western Anatolia Region, is prospective for epithermal and skarn related mineralisation. 8. At Yatik, in the Western Anatolia Region, low-sulphidation epithermal quartz veins with gold and silver mineralisation have been identified. 9. Bakir Tepe, in southwestern Turkey, is prospective for Cyprus-type volcanogenic massive sulphide (VMS) copper-gold mineralisation. KEFI Minerals also has an extensive exploration database which contains information about approximately 100 further prospective sites in Turkey. This database provides the Company with a competitive advantage to identify prospective areas for project generation in Turkey. Monitoring of the exploration licence status of geologically prospective areas will be carried out on an ongoing basis so that KEFI Minerals can acquire further exploration opportunities as soon as they become available. Outlook The primary objective for 2008 is to rapidly assess the Company's current projects, to advance them as warranted by results and to identify the most prospective areas in Turkey for further evaluation. KEFI Minerals is in a strong position in a prospective part of the world, and the directors believe it has experienced management, a sound exploration strategy and supportive shareholders. The capital base will be expanded in due course as warranted by the results of exploration and prevailing financial market conditions. The directors believe that the efforts of the KEFI Minerals' team have placed the Company in a very good position to create value for shareholders. Jeff Rayner Managing Director KEFI MINERALS PLC CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 Notes Six months Six months ended 30 ended 30 June 2008 June 2007 GBP'000 GBP'000 Exploration costs (298) (419) Other income 68 21 Administration expenses (280) (248) Share-based benefits (44) (43) Operating loss (554) (689) Finance costs (3) (1) Loss before tax 4 (557) (690) Taxation - - Loss after tax (557) (690) Earnings per Share Information Basic and fully diluted loss per share 7 (0.48) (0.70) (pence) KEFI MINERALS PLC CONDENSED CONSOLIDATED BALANCE SHEET 30 JUNE 2008 Notes As at As at 30 As at 30 December June 30June 2007 2007 2008 GBP'000 GBP'000 GBP'000 ASSETS Non current assets Property, plant and equipment 43 47 74 Intangible assets 15 - - 366 43 47 440 Current assets Trade and other receivables 10 75 43 40 Bank and cash balances 11 524 502 841 599 545 881 Total assets 642 592 1,321 EQUITY AND LIABILITIES Capital and reserves Share capital 12 1,296 1,088 1,028 Share premium 1,347 991 867 Share options reserve 211 167 122 Other reserves (2,391) (1,773) (874) 463 473 1,143 Current liabilities Trade and other payables 13 179 119 178 Total liabilities 179 119 178 Total equity and liabilities 642 592 1,321 KEFI MINERALS PLC CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 Share Share Accumulated Share Exchange Total premium Options Difference capital losses Reserve Reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance 1 January 887 586 (201) 79 (5) 1,346 2007 Issue of share 141 294 - - - 435 capital Share issue costs - (13) - - - (13) Loss for the period - - (690) - - (690) Exchange difference - - - - 22 22 on translation of subsidiaries Recognition of - - - 43 - 43 share-based payments Balance at 30 June 1,028 867 (891) 122 17 1,143 2007 Issue of share 60 133 - - - 193 capital Share issue costs (9) (9) Loss for the period (796) (796) Exchange difference (103) (103) on translation of subsidiaries Recognition of 45 45 share-based payments Balance at 31 1,088 991 (1,687) 167 (86) 473 December 2007 Issue of share 208 416 - - - 624 capital Share issue costs - (60) - - - (60) Loss for the period - - (557) - - (557) Exchange difference - - - - (61) (61) on translation of subsidiaries Recognition of - - - 44 - 44 share-based payments Balance at 30 June 1,296 1,347 (2,244) 211 (147) 463 2008 KEFI MINERALS PLC CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 Six Six months to months to 30 June 30 June 2008 2007 GBP'000 GBP'000 Cash flows from operating activities (Loss) for the period (557) (690) Share-based benefits 44 43 Depreciation 7 7 Exchange difference on translation of subsidiaries (64) 23 Operating loss before working capital changes (570) (617) Changes in working capital: Trade and other receivables (32) 1,380 Trade and other payables 60 (390) Net cash from operations (542) 373 Cash flows form investing activities: Purchase of property, plant and equipment - (82) Acquisition of subsidiaries - - Net cash used in investing activities - (82) Cash flows from financing activities: Proceeds from issue of share capital 624 435 Share issue and listing costs (60) (13) Net cash from financing activities 564 422 Net increase in cash 22 713 Cash at beginning of period 502 128 Cash at end of period 524 841 KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 1. General information Country of incorporation The Company was incorporated in United Kingdom as a public limited company on 24 October 2006. Its registered office is at 27/28 Eastcastle Street, London W1W 8DH. Principal activities The principal activities of the Group for the period are: * To explore for mineral deposits of precious and base metals and other minerals that appear capable of commercial exploitation, including topographical, geological, geochemical and geophysical studies and exploratory drilling. * To evaluate mineral deposits determining the technical feasibility and commercial viability of development, including the determination of the volume and grade of the deposit, examination of extraction methods, infrastructure requirements and market and finance studies. * To develop, operate mineral deposits and market the metals produced. 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of these condensed interim consolidated financial statements are set out below. These policies have been applied consistently throughout the period presented in these financial statements unless otherwise stated. Basis of preparation The interim consolidated financial statements have been prepared in accordance with International Accounting Standards (IFRS) including International Accounting Standard 34 "Interim Financial Reporting" and using the historical cost convention. These interim consolidated financial statements (`the statements") are unaudited and include the financial statements of the Company and its subsidiary undertakings. They have been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of the Company and the Group for the year ended 31 December 2007. These statements do not include all of the disclosures required for annual financial statements, and accordingly, should be read in conjunction with the financial statements and other information set out in the Company's 31 December 2007 Annual Report. Use and revision of accounting estimates The preparation of the financial report requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 2. Summary of significant accounting policies-cont'd Use and revision of accounting estimates-cont'd The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Adoption of new and revised International Financial Reporting Standards (IFRSs) During the current period the Group adopted all the new and revised IFRSs and International Accounting Standards (IAS), which are relevant to its operations and are effective for accounting periods commencing on 1 January 2008. The adoption of these Standards did not have a material effect on the consolidated financial statements. At the date of authorisation of these financial statements some Standards were in issue but not yet effective. The Board of Directors expects that the adoption of these Standards in future periods will not have a material effect on the consolidated financial statements of the Group. Accounting policies The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial of the Group. Consolidation The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company as at 30 June 2008 and the results of all the controlled entities for the period then ended. The Company and its controlled entities together are referred to in this financial report as the Group. Control is achieved where the Company has power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of all the Group companies are prepared using uniform accounting policies. Transactions eliminated on consolidation Intercompany transactions, balances and unrealised gains on transactions between consolidated entities are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. Business combinations The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets held for sale and discontinued operations, which are recognised and measured at fair value less costs to sell. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 2. Summary of significant accounting policies-cont'd Business combinations (cont'd) Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss. The interest of minority shareholders in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired undertaking at the date of acquisition. Goodwill on acquisition of subsidiaries is included in "intangible assets". Goodwill on acquisitions of associates is included in "investments in associates". Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an undertaking include the carrying amount of goodwill relating to the undertaking sold. Goodwill is allocated to cash generating units for the purpose of impairment testing. Any excess of the interest in the net fair value of acquiree's identifiable assets, liabilities and contingent liabilities over cost is recognised immediately in the profit and loss. Revenue recognition Revenue consists of the amounts receivable from exploration tenements, technical data, precious and base metals sold. The Group had no sales/revenue during the period under review. Exploration costs The Group adopted the provisions of IFRS6 "Exploration for and Evaluation of Mineral Resources". The Group's stage of operations as at the period end and as at the date of approval of these financial statements have not yet met the criteria for capitalisation of exploration costs. Foreign currency translation (1) Measurement currency The financial statements are prepared in British Pounds (measurement currency) which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company. (2) Transactions and balances Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 2. Summary of significant accounting policies-cont'd Tax Income tax expense represents the sum of the tax currently payable and deferred tax. Current tax liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and laws that have been enacted, or subsequently enacted, by the balance sheet date. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Currently enacted tax rates are used in the determination of deferred tax. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Share capital Ordinary shares are classified as equity. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise of cash in hand and balances with banks. Comparatives Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current period. 3. Financial risk management Financial risk factors The Company's activities expose it to currency risk arising from the financial instruments it holds. The risk management policies employed by the Company to manage the risk are discussed below: Interest rate risk Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to interest rate risk in relation to its bank deposits. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly. Liquidity risk Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 3. Financial risk management (continued) Currency risk Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Euro, Bulgarian Lev and New Turkish Lira. The Group's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly. Fair values The fair values of the Groups financial assets and liabilities approximate their carrying amounts at the balance sheet date. 4. Operating profit/(loss) The following items have been included in arriving at operating (loss): 1 Jan 1 Jan 2008- 2007- 30 June 30 June 2008 2007 GBP'000 GBP'000 Recognition of share-based benefits 44 43 Professional services 25 25 5. Tax Due to tax losses sustained in the period, no tax liability arises on the Group. Under current legislation, tax losses may be carried forward and be set off against taxable income of the following years. The Company is anticipated that it will be resident in Cyprus for tax purposes. Cyprus The corporation tax rate is 10%. Under certain conditions interest may be subject to defence contribution at the rate of 10%. In such cases 50% of the same interest will be exempt from corporation tax, thus having an effective tax rate burden of approximately 15%. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 15%. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 5. Tax - cont'd Bulgaria Mediterranean Minerals (Bulgaria) EOOD, the 100% subsidiary of the Company, is resident in Bulgaria for tax purposes. The corporation tax rate is 10%. Due to tax losses sustained in the period, no tax liability arises on the Mediterranean Minerals (Bulgaria) EOOD. Under current legislation, tax losses may be carried forward and be set off against taxable income of the following five years. Turkey Dogu Akdeniz Mineralleri Ltd, the 100% subsidiary of Mediterranean Minerals (Bulgaria) EOOD, and ultimately 100% subsidiary of the Company, is resident in Turkey for tax purposes. The corporation tax rate is 20%. Due to tax losses sustained in the period, no tax liability arises on the Dogu Akdeniz Mineralleri Ltd. Under current legislation, tax losses may be carried forward and be set off against taxable income of the following five years. 6. Deferred tax No provision for deferred taxation has been made as there are no differences between the amounts attributed to assets and liabilities for tax purposes and their corresponding carrying amounts in the balance sheet. 7. Loss per share The calculation of the basic and diluted earnings per share attributable to the ordinary holders of the parent based on the following data: 1 Jan 2008 1 Jan 2007- 30 June 30 June 2008 2007 (Unaudited) (Unaudited) GBP'000 GBP'000 Net loss attributable to equity (557) (690) shareholders Number of ordinary share for the purposes of 115,771 98,931 basic earnings per share Basic and fully diluted loss per share (0.48) (0.70) (pence) The diluted loss per share has been kept the same as the basic loss per share as the conversion of the share option decreases the basic loss per share, thus being anti-dilutive. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 8. Business and geographical segments Business segments The Group has only one distinct business segment, being that of mineral exploration. Geographical segments The Group's exploration activities are located in Turkey and Bulgaria and its administration and management is based in Cyprus. Six months ended 30 June 2008 Cyprus Turkey Bulgaria Consolidation Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Operating loss (291) (320) - - (611) Financial income 6 39 12 - 57 Financial costs (3) - - - (3) Net loss for the period (288) (281) 12 - (557) Total assets 1,947 146 6 (1,457) 642 Total liabilities 172 1,295 160 (1,448) 179 Depreciation of fixed - 7 - - 7 assets Six months ended 30 June 2007 Cyprus Turkey Bulgaria Consolidation Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Operating loss (527) (183) - - (710) Financial income 19 2 - - 21 Financial costs (1) - - - (1) Net loss for the period (509) (181) - - (690) Total assets 1,561 131 7 (378) 1,321 Total liabilities 132 642 156 (752) 178 Depreciation of fixed 3 4 - - 7 assets 9. Controlled entities The Group has the following subsidiaries which have been consolidated in these financial statements. Company name Date of Country of % of acquisition incorporation shareholding Mediterranean Minerals 8/11/06 Bulgaria 100%-Direct (Bulgaria) EOOD Dogu Akdeniz Mineralleri Ltd 8/11/06 Turkey 100%-Indirect KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 10. Trade and other receivables 30 31 30 June Dec June 2008 2007 2007 GBP'000 GBP'000 GBP'000 Other amounts receivable 69 39 13 Deposits and other prepayments 6 4 27 75 43 40 11. Cash and cash equivalents Cash included in the cash flow statement comprise the following balance sheet amounts: 30 June 31 Dec 30 June 2008 2007 2007 GBP'000 GBP'000 GBP'000 Bank balances and cash 524 502 841 12. Share capital Number Share Share Total of Capital premium shares '000 GBP'000 GBP'000 GBP'000 Authorised Ordinary shares of 200,000 2,000 - 2,000 GBP0.01 each Issued and fully paid Seed round 42,000 420 36 456 IPO round 46,667 467 933 1,400 Issued 19 February 2007 at 11,667 117 233 350 GBP0.03 12 March 2007 at 250 2 5 7 GBP0.03 4 June 2007 at 1,000 10 25 35 GBP0.035 4 June 2007 at 1,250 12 32 44 GBP0.035 3 October 2007 at 6,000 60 132 192 GBP0.032 Share issue costs - - (405) (405) At 31 December 2007/1 108,834 1,088 991 2,079 January 2008 Issued 8 May 2008 at 20,812 208 416 624 GBP0.03 Share issue costs - - (60) (60) At 30 June 2008 129,646 1,296 1,347 2,643 On 8 May 2008 the Company issued 20,812,242 new ordinary shares of 1p each at 3p per share together with 10,406,121 warrants to subscribe for new ordinary shares of 1p each at 5 pence per share on the basis of one warrant for every two new ordinary shares. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 13. Trade and other payables 30 31 30 June Dec June 2008 2007 2007 GBP'000 GBP'000 GBP'000 Trade and other payables 81 62 101 Amounts due to EMED Mining Public 98 57 77 Ltd 179 119 178 14. Share option plan Details of share options outstanding as at 30 June 2008: Grant date Expiry date Exercise price Number of shares GBP '000 18/12/2006 18/12/2012 0.030 16,000 12/03/2007 11/03/2013 0.035 250 18/04/2007 17/04/2013 0.035 1,200 04/06/2007 03/06/2013 0.035 500 08/10/2007 07/10/2010 0.040 300 24/06/2008 23/06/2014 0.0325 250 18,500 Number of shares '000 Outstanding options at 1 January 2008 18,250 -granted 250 -cancelled - -exercised - Outstanding options at 30 June 2008 18,500 The Company has a share option scheme for employees and other parties of the Group. The options expire six years after grant date and are exercisable at the exercise price in whole or in part no more than one third form at grant date, two thirds after one year from the grant date and the balance after two years from the grant date. The option agreement contain provisions adjusting the exercise price in certain circumstances including the allotment of fully paid ordinary shares by way of a capitalisation of the Company's reserves, a sub division or consolidation of the ordinary shares, a reduction of share capital and offers or invitations (whether by way of rights issue or otherwise) to the holders of ordinary shares. The estimated fair values of the options were calculated using the Black Scholes option pricing model. The inputs into the model and the results are as follows: KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 14. Share option plan - cont'd 24 June 8 Oct 4 June 18 April 12March 18 Dec 2008 2007 2007 2007 2007 2006 Closing share price at 3.25p 3.00p 3.62p 3.88p 3.30p 3.88p issue date Weighted average 3.25p 4.00p 3.50p 3.50p 3.50p 3.00p exercise price Average expected 147.60% 85.58% 68.06% 68.06% 68.06% 50% volatility Expected life 6yrs 3yrs 6 yrs 6 yrs 6 yrs 6 yrs Risk free rate 5.00% 4.75% 6.08% 5.95% 5.73% 5.97% Expected dividend Nil Nil Nil Nil Nil Nil yield Discount factor 30% 30% 30% 30% 30% 30% Estimated fair value 2.13p 1.06p 1.71p 1.85p 1.50p 1.427p Expected volatility was estimated based on the likely range of volatility of the share price. 15. Intangible assets 30 31 30 June Dec June 2008 2007 2007 Goodwill GBP'000 GBP'000 GBP'000 Cost Balance at 1 January 364 364 364 Balance at 30 June/31 December 364 364 364 Provision for impairment Balance at 1 January 364 - - Provision for the period/year - 364 - Balance at 30 June/31 December 364 364 - Net Book Value Balance at 30 June/31 December - - 364 The impairment provision made at 31 December 2007 was made based on the directors' assessment of the current state of the group's development. 16. Contingent liabilities Dogu Akdeniz Mineralleri Ltd acquired a proprietary geological database that covers extensive parts of Turkey. Dogu has undertaken to make a payment of approximately €63,000 (AUD105,000) for each tenement it is subsequently awarded in Turkey and is identified from the database. The maximum number of such payments required under the agreement is four, resulting in a contingent liability of up to €252,000. These payments are to be settled by issuing shares in KEFI Minerals plc. The first tranch of shares was issued under this agreement in June 2007 for €43,750, the equivalent of AUD105,000. 17. Capital commitments The Group has no capital or other commitments as at 30 June 2008. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 18. Relationship deed A Relationship Deed between EMED and the Company dated 7 November 2006, by which EMED agrees not to operate in Bulgaria and Turkey, and the Company agrees not to operate in Albania, Armenia, Azerbaijan, Cyprus, Greece, Hungary, Iran, Oman, Romania, Saudi Arabia, Serbia or Slovakia the "EMED Area". The Relationship Deed provides that EMED has the right to appoint one non-executive director of the Company. It also provides EMED with a right of first refusal in respect of funding any proposed mining or exploration project of the Company. The Relationship Deed provides that the Company shall refer any opportunity to conduct mining or exploration activity in the EMED Area to EMED, and EMED shall refer any such opportunity in Bulgaria or Turkey to the Company. 18. Post balance sheet events There were no material post balance sheet events which have a bearing on the understanding of the financial statements. KEFI MINERALS PLC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2008 TO 30 JUNE 2008 REVIEW REPORT TO KEFI MINERALS PLC We have reviewed the accompanying balance sheet of KEFI Minerals Plc at June 30, 2008, and the income statement, statement of changes in equity and cash flow statement for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to issue a report on these financial statements based on our review. We conducted our review in accordance with the International Standard on Review Engagements 2400. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial statements do not give a true and fair view in accordance with International Accounting Standards. Nicosia, Cyprus, 25 September 2008 MOORE STEPHENS STYLIANOU & CO CERTIFIED PUBLIC ACCOUNTANTS - CY

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