Final Results

RNS Number : 6335F

Connemara Mining Company plc

19 June 2012

Connemara Mining Company plc

("Connemara" or the "Company")

Preliminary Results for the Year Ended 31 December 2011

Connemara Mining today announces its Preliminary Results for the year ended 31 December 2011.

Exploration Highlights:

· Stonepark zinc discovery in Limerick increased

· Joint venture agreed on the Oldcastle block of licences

· Work programme designed for Nenagh licences and joint venture partner being sought

Operational Highlights

· Joint-venture partner - Teck - undertook substantial surveys and drilling and discovered two layers of mineralised ore at Stonepark West

· Six of the 10 Newcastle West blocks will come back to the company

Post Period Highlights

· Farm-in agreement signed with Hendrick Resources for gold exploration in Wicklow/Wexford

John Teeling, Chairman, said, "Connemara has adequate funds for all proposed expenditure in the next year. Although mining exploration is a long term high risk business, Connemara is well placed in the most prospective country in the world in which to find zinc. The gold exploration project is exciting. We have strong hopes that we will move to drilling new areas in Wicklow/Wexford."

Enquiries:

Connemara Mining Company Plc

John Teeling, Chairman +353 (0) 1 833 2833

Jim Finn, Financial Director

Westhouse Securities Limited

Richard Baty +44 (0) 20 7601 6100

Petre Norton

Optiva Securities Ltd

Jason Robertson +44 (0) 203 137 1906

Jeremy King +44 (0) 203 137 1904

Blythe Weigh Communications +44 (0)20 7138 3204

Tim Blythe +44 (0) 7816 924626

Robert Kellner +44 (0) 7800 554377

Pembroke Communications

David O'Siochain +353 (0) 1 649 6486

www.connemaramining.com

Statement Accompanying the Preliminary Results

These are very difficult times for exploration companies. Exploration is a business of hope. As the world economy struggles it can be difficult for investors who have seen their wealth greatly diminished to remain optimistic. Share prices rise when investors have confidence in future growth, so they buy. In the middle of 2012 it is easy to see why investors predict that the future is not so bright, so they sell.

The Great Recession of 2007 shows little sign of ending. The travails of the Eurozone continue to weaken investor confidence. It is clear that the vast sums lost in housing bubbles must be written off. It is equally clear that Euro-economies cannot continue to spend on current activities far more than they earn.

Austerity is one answer but the cure is killing the patient. But if Europe is in turmoil who is going to drive world demand? The US recovery is weak. The US financial position is precarious relying on Asian buying of US treasuries to fund a vast deficit. This cannot continue indefinitely.

The BRICs have been the main drivers of recent years with high annual growth rates, but now signs of strain are appearing. Indian growth rates have collapsed as economic development has suffocated in the face of bureaucracy. Brazil, after a fantastic run, is slowing, as a strong currency debilitates manufacturing. Russia, and former Soviet Republics, continue to grow on the back of an increasingly shaky oil price.

That leaves China to power world growth. There is no doubt that by 2030 China will be the world's leading economy but the path will not be smooth. Economic shakeouts will happen. There is clear evidence of a housing bubble in the cities. A collapse will plunge the world economy into a deeper recession.

But recessions, no matter how bad are temporary. It is certain that the 2 billion people worldwide moving into the middle class will need and will buy most of the products that the Western middle classes currently demand. Cars, housing, white goods, phones, computers - each of these products require base metals. It is for this reason that projections of annual zinc and lead growth rates have grown from 2% to 4%. This means one very large new mine a year. Discoveries take years to be proven up and constructed before the metal is produced. So by now we know what new mines are coming on stream up to 2020. There are not enough new discoveries to meet demand as older mines are running down. The net result is forecast shortages of zinc and lead from 2013 onwards. Recession can delay this but only delay it. A strong supply demand balance suggests good future prices. Base metal prices are very volatile - a trend likely to continue in an unstable world, but overall the price trend is likely to be upward.

In this turbulent economic world, Connemara continues to explore in Ireland. In 2011, the Stonepark zinc discovery in Limerick was increased in size by the addition of another lense - Stonepark West, about 1.7km away from the 2007 discovery at Stonepark. Over 50 holes were drilled on the licence. We drilled 3 holes on our Thurles block near the Lisheen zinc mine. Results were poor but 3 holes in an area of over 60 sq kms gives little information. A fourth hole is currently under way.

We have agreed a joint venture on the Oldcastle block of licences located some 20kms from the Boliden mine at Navan. I hope to be able to announce the signing of this agreement very shortly. We have designed a work programme for our Nenagh block of licences close to the former Silvermines zinc mine. We would like to bring in a joint venture partner to implement this programme so that the full potential of the block can be realised.

Finally, in early 2012 we agreed a joint venture with Hendrick Resources, a private Canadian gold company, over four licences held by Connemara on the Wicklow/Wexford licences. This ground is prospective for gold as well as zinc. A fifth licence will be added to the joint venture. An Airborne Geophysical Survey has been completed across these licenses as part of a larger Exploration programme.

While all of this activity was on-going our share price continued to slide due, in part, to a general malaise in the exploration sector but more specifically related to zinc assets in Ireland. The sale by Minco of the Pallas Green discovery to Xstrata was not well received by the market. Pallas Green, which lies adjacent to Stonepark, holds an estimated 28 million tonnes of zinc lead ore at a 6% cut-off. The price of $19m for a 23% working interest was deemed poor by commentators. It reflects badly on the Stonepark discovery which is at an earlier stage of discovery, at least three years behind, and is currently only a fraction of the size of Pallas Green.

Turning to the operations, our 75% joint venture partner, Teck, in Stonepark undertook a substantial exploration programme in 2011 involving seismic, airborne gravity surveys and extensive drilling. They discovered a new lense, Stonepark West, with two layers of mineralised ore. Drilling between the three lenses did not link them up. In common with most Irish zinc lead discoveries the ore body lies in a series of lenses. This can result in extensive drilling on a tight grid basis to prove up a measured resource for a feasibility study. It is also a problem for mining as the ore is not continuous. A deep hole was drilled on the eastern portion of the licence block, at the core of the Limerick syncline. Difficulties were encountered with drilling and it was abandoned at greater than 800 metres depth. In recent months Teck has conducted a strategic review of the whole Stonepark area. Results are not yet known.

The 10 Newcastle West blocks of licences to the southwest of Stonepark are also part of the Teck/Connemara joint venture. A series of holes were drilled during 2011 by Teck. As a result of an evaluation we expect Teck to surrender 6 of these licences back to Connemara. Our Oldcastle block of licences lies some 25km north east of the Boliden mine at Navan in the northeast of Ireland. This is a sought after block with geological characteristics similar to Navan. Connemara drilled the area in 2009. Since that time we have been in discussion with potential partners. We need a partner with an understanding of Irish zinc geology and one committed to drill the deep holes necessary to test the potential. We now have such a partner and an agreement will be announced shortly.

We have two other blocks of licences which are prospective for zinc - one is the Thurles block near the Lisheen mine, the other is the Nenagh block, close to the worked out Silvermines mine. A single drill hole is underway on PL1577 on the Thurles block. This is to provide support for the geophysical, geochemical and drilling work done. We are examining options on each block.

Gold is the other Connemara exploration activity in Ireland. In early 2012 we signed a farm in agreement with Hendrick Resources of Canada whereby they can earn a 75% interest in a block of four licences in the Wicklow/Wexford area by spending €1m. A fifth licence adjacent to the others will be included in the deal. Dale Hendrick of Hendrick Resources is a vastly experienced, widely respected, Canadian based gold explorer. He believes that there is significant potential for gold down the east coast of Ireland. He believes that modern technology will identify prospective targets. History supports Dale Hendrick. From the Wicklow Gold Rush around 1800 to the present day, gold has been, and is being discovered in the streams and soils in Wicklow and Wexford. Connemara geologists have extensive experience in the area. We acquired what we believe are among the most prospective licences, the so called Mine River block. Earlier work by a number of explorers found gold and base metals on the ground. Hendrick Resources has undertaken an airborne magnetic survey and final results are due early in Q3 2012. A preliminary examination suggests the presence of previously unknown anomalies, which will be targeted for drilling.

Future and Finance

Connemara has adequate funds for all proposed expenditure in the next year. Extensive work will be carried out on the Wicklow/Wexford gold ground and on the Oldcastle block at no cost to Connemara; the current budget on Stonepark can be met from current funds.

Mining exploration is a long term high risk business. From discovery to cash flow takes a long time, usually 8 to 12 years. After the euphoria of a discovery wares off, the hard graft of proving up a geological resource then turning it into commercial feasibility takes time and money. Investors are almost always asked to invest more cash. The alternative is to joint venture - this is the Connemara strategy. This not only stretches available finances but brings in technical expertise. The downsides are loss of control, and usually, an extended time to dividends. Large companies have longer time horizons and lower costs of capital than smaller explorers and often take a longer term view. Connemara is facing this situation in relation to the Stonepark zinc discovery. Decisions taken on a different continent have time and cost impact on Connemara shareholders. On the other hand joint ventures such as the Oldcastle and Wicklow/Wexford work are enabling Connemara to have a much bigger exploration programme than we could afford from our own resources.

We believe the long term fundamentals for zinc and gold are very strong. The current extreme uncertainty in the world is having a devastating impact on market values. There is no way of knowing when the bear market in resource stocks will finish, but finish it will. When it does, I believe we are well placed to benefit from the upturn. Zinc is not the most fashionable of products but it is a key element in the billions of products going to be bought in Asia, Africa and South America. Connemara is well placed in the most prospective country in the world in which to find zinc. The gold exploration project is exciting. We have strong hopes that we will move to drilling new areas in Wicklow/Wexford.

John Teeling

Chairman

19 June 2012

CONNEMARA MINING COMPANY PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2011


	2011	2010
	€	€

CONTINUING OPERATIONS

Administrative expenses	(399,708)	(301,754)

OPERATING LOSS	(399,708)	(301,754)

Investment revenue	2,587	2,160

LOSS BEFORE TAXATION	(397,121)	(299,594)

Income tax expense	-	-

LOSS FOR THE YEAR AND
TOTAL COMPREHENSIVE INCOME	(397,121)	(299,594)




Loss per share - basic and diluted	(1.59c)	(1.71c)

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2011

	2011	2010
	€	€

ASSETS:

NON CURRENT ASSETS

Intangible assets	2,098,369	1,289,476


CURRENT ASSETS

Other receivables	52,441	65,203
Cash and cash equivalents	662,018	732,758

	714,459	797,961

TOTAL ASSETS	2,812,828	2,087,437


LIABILITIES:

CURRENT LIABILITIES
Trade and other payables	(461,635)	(467,904)

NET CURRENT ASSETS	252,824	330,057

NET ASSETS	2,351,193	1,619,533


EQUITY:

Called-up share capital	257,097	204,597
Share premium	4,105,155	3,028,874
Share based payment reserve	55,915	55,915
Retained deficit	(2,066,974)	(1,669,853)

TOTAL EQUITY	2,351,193	1,619,533

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011

	Called up Share Capital	Share Premium	Share Based Payment Reserve	Retained Deficit	Total
	€	€	€	€	€

At 1 January 2010	151,767	1,919,097	55,915	(1,370,259)	756,520
Shares issued	52,830	1,109,777	-	-	1,162,607
Loss for the year	-	-	-	(299,594)	(299,594)

At 31 December 2010	204,597	3,028,874	55,915	(1,669,853)	1,619,533

Shares issued	52,500	1,135,690	-	-	1,188,190
Share issue expenses	-	(59,409)	-	-	(59,409)
Loss for year	-	-	-	(397,121)	(397,121)

At 31 December 2011	257,097	4,105,155	55,915	(2,066,974)	2,351,193

Share premium

The share premium reserve comprises of the excess of monies received in respect of share capital over the nominal value of shares issued.

Share based payment reserve

The share based payment reserve arises on the grant of share options to directors and consultants under the share options plan.

Retained deficit

Retained deficit comprises accumulated losses in the current and prior years.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2011

	2011	2010
	€	€
CASH FLOW FROM OPERATING ACTIVITIES

Loss for the year	(397,121)	(299,594)
Investment revenue recognised in loss for the year	(2,587)	(2,160)
Exchange movements	22,524	(2,019)

	(377,184)	(303,773)

MOVEMENTS IN WORKING CAPITAL:
(Decrease)/Increase in trade and other payables	(6,269)	160,783
Decrease/(Increase) in trade and other receivables	12,762	(2,847)

CASH USED BY OPERATIONS	(370,691)	(145,837)

Investment revenue	2,587	2,160

NET CASH USED IN OPERATING ACTIVITIES	(368,104)	(143,677)

CASH FLOW FROM INVESTING ACTIVITIES

Payments for exploration and evaluation	(862,496)	(454,861)
Receipts for exploration and evaluation	53,603	-

NET CASH USED IN INVESTING ACTIVITIES	(808,893)	(454,861)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of equity shares	1,188,190	1,228,678
Share issue costs	(59,409)	(66,071)

NET CASH FROM FINANCING ACTIVITIES	1,128,781	1,162,607


NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	(48,216)	564,069

Cash and cash equivalents at beginning of financial year	732,758	166,670

Effect of exchange rate changes on cash held in foreign currencies	(22,524)	2,019

Cash and cash equivalents at end
of financial year	662,018	732,758

Notes:

1. Accounting Policies

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2010. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

2. Loss per Share

	2011	2010
	€	€

Loss per share - Basic and Diluted	(1.59c)	(1.71c)

Basic loss per share

The earnings and weighted average number of ordinary shares used in the calculation of basic loss per

share are as follows:

	2011	2010
	€	€

Loss for the year attributable to equity holders of the parent	(397,121)	(299,594)


	2011	2010
	No.	No.
Weighted average number of ordinary shares for the
purpose of basic earnings per share	24,918,615	17,478,073

Basic and diluted loss per share is the same as the effect of the outstanding share options and warrants is

anti-dilutive.

3. Intangible Assets

	2011	2010
Exploration and Evaluation:	€	€

Cost
At 1 January	1,289,476	834,615
Additions	862,496	454,861
Disposals	(53,603)	-

At 31 December	2,098,369	1,289,476

Carrying amount:
At 31 December	2,098,369	1,289,476

The above represents expenditure on projects in Ireland. Included in the group intangible assets is €20,800 (2010: €5,000) of directors' remuneration which was capitalised during the year.

On 21 December 2011 the Group sold its interest in licences in Zimbabwe to a third party.

The realisation of the intangible assets is dependent on the discovery and successful development of economic reserves which is subject to a number of risks including:

- uncertainties over development and operational risks;

- political and legal risks, including arrangements with governments for licences, profit sharing and

taxation;

- liquidity risks;

- going concern risks; and

- operational and environmental risks.

Should this prove unsuccessful the value included in the balance sheet would be written off to the statement of comprehensive income.

The directors are aware that by its nature there is an inherent uncertainty in such exploration and evaluation expenditure as to the value of the asset. Having reviewed the carrying value of exploration and evaluation of assets at 31 December 2011, the directors are satisfied that the value of the intangible asset is not less than carrying value.

4. General Information

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2011. The financial information for 2010 is derived from the financial statements for 2010 which have been delivered to the Companies Registration Office. The auditors have reported on 2010 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, financial assets and amounts due by group undertakings. The financial statements for 2011 will be delivered to the Companies Registration Office following the Company's Annual General Meeting.

A copy of the Company's Annual Report and Accounts for 2011 will be mailed to all shareholders shortly and will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland. The Annual Report will shortly be available for viewing at Connemara Mining Company PLC's website at www.connemaramining.com.