Interim Results

RNS Number : 3676E

Connemara Mining Company plc

26 September 2008

 



26th September 2008

Connemara Mining Company PLC

Interim Results for the Six Months Ended 30th June 2008

Highlights:

• Four rigs currently drilling at Stonepark zinc discovery, Limerick

• Additional resource grade intersections in 2008 drilling 

• Field work commencing on Newcastle West block in Limerick

• Data interpretation completed on Lough Sheelin block. Targets being selected for second stage drilling

• Field work completed on Castlemaine block

• New ground acquired

• Fully funded for all projected commitments

John Teeling, Chairman of Connemara Mining commented;

'Work continues apace on our zinc discovery in Stonepark, Limerick. Further resource grade intersections have been discovered, while visual inspection of two recent holes to the Northeast of the current discovery indicates the presence of significant mineralisation. With four rigs working, two on close step outs and two on regional exploration, we will gain an excellent understanding of the area.

As an early mover on the revival of Irish zinc exploration, we obtained the pick of the most prospective licences. We have active programmes on a number of these licences, as well as our focus on Limerick and our joint venture with global player Teck Cominco.'

Chairman's Statement - Interim Results for the Six Months Ended 30th June 2008

Connemara is a focused Irish zinc explorer. Our principal asset is a block of sixteen licences in Limerick. These licences are spread over 2 areas, Monaster and Newcastle West, both joint ventured with Teck Cominco, who are spending C$3m to earn a 75 per cent interest. In late 2007, Teck Cominco discovered resource grade zinc mineralisation at Stonepark on the Monaster block and a follow-up drill programme in 2008 has continued to deliver positive results.  

Two rigs are currently drilling step-out holes in the Stonepark area near the discovery hole TC-2638-4 (4.0m at 11.62% Zinc and 3.46% Lead, including 1.15m at 28.61% Zinc and 4.17% Lead) and a total of 10 drillholes have been completed to date in 2008. All 10 holes have intersected zones of hydrothermal 'black matrix breccia' (BMB) style alteration, containing trace to massive sulphides and the orezone remains open. A 100m step-out (TC-2638-7) to the SE of the discovery hole intersected 2.85m at 12.18% Zinc and 0.75% Lead within an overall interval of 15.35m at 3.25% Zinc and 0.33% Lead (see Table 1). A further 100m step-out (TC-2638-8) to the SE intersected 7.35m at 5.02% Zinc, 1.17% Lead, including 1.25m at 16.19% Zinc and 3.07% Lead. Two recent 100m step-out holes to the NE and NNW of the discovery hole have also hit Zinc-rich sulphide zones and assays are pending. 

Drill testing of additional regional targets on the Monaster Block began in July and this programme is ongoing with an additional two rigs. Work has also commenced on the Newcastle West block with the aim of generating drill targets for testing in 2009. 

The Stonepark discovery is located approximately 6km from the Tobermalug zone of the Pallas Green deposit (owned by Minco/Xstrata). Both zones are located within the same ENE-trending structural corridor and the style of hydrothermal brecciation and mineralisation at Stonepark is similar to Tobermalug. Minco/Xstrata plan to drill 50,000m on the Pallas Green project in 2008. Highlights of their 2008 drilling include; 8.4m at 30.5% Zinc and 5.3% Lead (hole MN-2529-026) and 11.2m at 10.75% Zinc and 1.56% Lead (hole MN-2529-042). According to Minco, drilling at Tobermalug has now demonstrated continuous mineralisation over a dip section length of 2.7km by 200-400m wide.

Table 1: Assay Results from Stonepark Drilling

Hole ID	Hole Angle (degrees)	From  (m)	To  (m)	Thickness (m)	Est. True Thickness (m)	Zn %	Pb (%)
TC-2638-4	-90	372.75	374.05	1.30	1.30	6.85	0.3
TC-2638-4	-90	374.05	376.1	2.05	2.05	0.3	<0.05
TC-2638-4	-90	376.1	380.1	4.00	4.00	11.62	3.46
		including:
TC-2638-4	-90	378.95	380.1	1.15	1.15	28.61	4.17
TC-2638-6	-90	460.7	461.15	0.45	0.45	2.26	1.54
TC-2638-7	-76	394.85	410.2	15.35	14.9	3.25	0.33
		including:
TC-2638-7	-76	394.85	397.7	2.85	2.8	12.18	0.75
TC-2638-8	-62	550.1	557.45	7.35	6.5	5.02	1.17
		including:
TC-2638-8	-62	556.2	557.45	1.25	1.1	16.19	3.07

Lough Sheelin

In the first half of 2008, Connemara completed an eleven hole drilling programme on their 100 per cent owned block of five licences in the Lough Sheelin area of Cavan/Meath where the target is a Navan style deposit similar to that of the Tara Mine 25km to the east. Five of the eleven holes intersected zinc/lead mineralisation (see table 2).

Table 2: Zinc/Lead Mineralisation at Lough Sheelin

Hole ID	From - To	Thickness	Grade
			Zinc	Lead
C-3925-1	58.7m - 59.15m	0.45m	4.35%	2.32%
C-3925-5	114.1m - 118.8m	4.7m	3.38%	0.59%
C-3935-8	101.8m - 102.3m	0.5m	3.66%	1.64%
	104.1m - 105.7m	1.6m	1.21%	0.35%
C-3925-9	103.5m - 104.6m	1.1m	2.18%	0.65%
	106.6m - 107.8m	1.2m	2.36%	0.58%
C-1053-2	103.7m - 104.4m	0.7m	1.2%	0.26%

An interpretation of the results suggests the mineralisation is very similar in style to that forming a halo around the Navan deposit. The zone of mineralisation remains open to the north and west. Work planned for the second half of 2008 will focus on further geophysical and soil sampling activities.

Other Irish Ground

As outlined above, field work including drilling will begin shortly on the ten licence block of Newcastle West.

A comprehensive field work programme has been completed on the Castlemaine licence in Kerry and is currently being interpreted. Connemara has been very successful with Prospecting Licence applications. In addition to those discussed above, the Company holds new ground in the Midlands and in the South East. A total of 38 prospecting licences are held by Connemara.

Activities Outside Ireland

The success in Stonepark has downgraded activities to expand Connemara into base metal projects outside of Ireland. Results from a worldwide trawl of base metal prospects were presented to Connemara directors and experts in May of this year. A series of targets have been selected and follow up work is underway.

Finance

Connemara is well financed to meet projected commitments. The heavy expenditures on drilling in Stonepark are fully funded by Teck Cominco.

Future

The demand for zinc continues to be driven by Chinese and Indian buying. The market for appliances, cars and galvanising in these countries is both large and long term, yet the price of zinc has halved in the past year to under $2,000 a tonne.

From a Connemara view point, it is the long term outlook rather than short term cycles which is significant. It takes years to bring a mine from discovery to operation. We are very comfortable with the long term outlook. The immediate future for Connemara lies in the ongoing drilling at Stonepark in Limerick. Results to date are exciting but it is still early days.

John Teeling

Chairman

26th September 2008

This release has been approved by Graham Reid, P. Geo., Director BRG Technical Services, consultants to Connemara. Mr. Reid has 30 years mineral exploration and evaluation experience.

Enquiries:

Connemara Mining Company Plc
John Teeling, Chairman	[phone]
Jim Finn, Financial Director
Blue Oar Securities Plc
John Wakefield	[phone]
Simon Moynagh
College Hill
Paddy Blewer	[phone]
Nick Elwes

www.connemaramining.com

Financial Information (Unaudited)
					Six Months Ended			Year Ended
					30 June 08		30 June 07				31 Dec 07
					unaudited		unaudited				audited
Condensed Consolidated Income Statement					€'000		€'000				€'000
Revenue					0		0			0
Cost of Admission to AIM					0		0			(265)
Operating Costs					(181)		(36)			(287)
Foreign Exchange Loss					(69)		0			(100)
Operating Loss					(250)		(36)			(652)
Interest Receivable					14		7			28
Loss on ordinary activities before taxation					(236)		(29)			(624)
Taxation					0		0			0
Loss for the period					(236)		(29)			(624)
Loss per share					(1.55c)		(.23c)			(4.62c)
Condensed Consolidated Balance Sheet					30 June 08		30 June 07			31 Dec 07
					unaudited		unaudited			audited
					€'000		€'000			€'000
Assets
Intangible Assets					513		333			407
Current Assets
Other receivables and prepayments					72		21			61
Cash and cash equivalents					793		307			1,184
Total Current Assets					865		328			1,245
Total Assets					1,378		661			1,652
Liabilities
Current Liabilities
Trade and other payables					(115)		(16)			(153)
Total Liabilities					(115)		(16)			(153)
Net Assets					1,263		645			1,499
Equity
Share Capital and Reserves					1,263		645			1,499
Total Equity					1,263		645			1,499

Condensed Consolidated Statement of Changes in
Shareholders Equity
		Share		Share	Other		Retained			Total
		Capital		Premium	Reserves		Losses			Equity
		€'000		€'000	€'000		€'000			€'000
As at 1 January 2007		123		548	6		(3)			674
Share option costs recognised in reserves										0
Shares issued										0
Share issue expenses										0
Loss for the period							(29)			(29)
As at 30 June 2007		123		548	6		(32)			645
Share option costs recognised in reserves					50					50
Shares issued		28		1,438						1,466
Share issue expenses				(67)						(67)
Loss for the period							(595)			(595)
As at 31 December 2007		151		1,919	56		(627)			1,499
Share option costs recognised in reserves										0
Shares issued										0
Share premium on shares issued										0
Loss for the period							(236)			(236)
As at 30 June 2008		151		1,919	56		(863)			1,263
					Six Months Ended			Year Ended
					30 June 08		30 June 07			31 Dec 07
					unaudited		unaudited			audited
Condensed Consolidated Cash Flow					€'000		€'000			€'000
Cash flows from operating activities
Operating Loss					(250)		(36)			(652)
Movements in Working Capital					(49)		10			155
Net Cash Outflow from Operating Activities					(299)		(26)			(497)
Cash Flow from Investing Activities
Returns on Investments and Servicing of Finance					14		7			28
Capital Expenditure					(106)		(76)			(149)
Net Cash used in Investing Activities					(92)		(69)			(121)
Financing Activities
Proceeds from issue of equity shares					0		0			1,400
Net Decrease in Cash and Cash Equivalents					(391)		(95)			782
Cash and Cash Equivalents at beginning of the period					1,184		402			402
Cash and Cash Equivalents at end of the period					793		307			1,184

Notes: 

1. Information

The financial information for the six months ended June 30th, 2008 and June 30th, 2007 is unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 148 of the Companies Act 1963.

The interim financial report has been prepared in accordance with IAS 34 Interim Financial Reporting and the accounting policies and methods of computation used in the interim financial statements are consistent with those used in the Group 2007 Annual Report, which is available at www.connemaramc.com

The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

2. No dividend is proposed in respect of the period.

3. Loss per share

	30 June 08	30 June 07	31 Dec 07
	€	€	€
Loss per share - Basic and Diluted	(1.55c)	(0.23c)	(4.62c)
Basic and diluted loss per share
The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Loss for the year attributable to equity holders of the Parent	(235,588)	(28,522)	(624,398)
Weighted average number of ordinary shares for the purpose of basic earnings per share	15,176,710	12,319,567	13,517,219

4. Intangible Assets

	30 June 08	30 June 07	31 Dec 07
Exploration and evaluation assets:	€'000	€'000	€'000
Cost at 1 January	407	258	258
Additions to 30 June	106	75	149
	_________	_________	_________
Cost at 30 June	513	333	407

Deferred Exploration and Evaluation expenditure at 30 June 2008 represents spend on projects in Ireland. 

All licences held by the Group to date are at an early stage of exploration, but all present indications, including those from geographical reports produced during 2007 are that it will have a value in excess of the accumulated costs to date. No impairment provision has been made in respect of these licences.

The group's activities are subject to a number of significant potential risks including;

- Uncertainties over development and operational costs

- Price fluctuations over the price of Zinc

- Operational and environmental risks

- Availability of funding

The realisation of this intangible asset is dependent on the successful development of economic reserves, including the ability of the Group to raise finance to develop the project. Should this prove unsuccessful the value included in the balance sheet would be written off.

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 deferred development expenditure at 30 June 2008, the directors are satisfied that the value of the intangible asset is not less than carrying value.

5. The Interim Report for the six months to June 30th, 2008 was approved by the Directors on 26th September 2008

6. Copies of the Interim Report will be sent to shareholders and will be available for inspection at the Companies Registered Office at 162 Clontarf Road, Dublin 3, Ireland. The Interim Report may also be viewed at Connemara Mining Company Plc's website at www.connemaramc.com 

 

END

 

 

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