Interim Results

Tanzania Gold PLC 30 March 2007 Tanzania Gold Plc ('Tanzania Gold Plc' or 'the Company') Interim Results for the six months ended 31 December 2006 Tanzania Gold Plc (TZG.L), the AIM listed exploration and development company operating in Tanzania, is pleased to announce its interim results for the six months ended 31 December 2006. Highlights: - £1.7m cash in bank sufficient for next phase of exploration programme - Phase one drilling completed within budget and on time - Joint Venture earn-in terms ahead of schedule - Trenching and assaying continues for phase two exploration programme Commenting on the results, Clive Sinclair-Poulton, Chief Executive Officer, said: 'The Board continues to believe in the potential of the Mkurumu project following the first phase of the exploration programme, which has been completed on time and within budget. Phase two of the exploration programme will be built around the geological knowledge we have gained over the past months. In the meantime, we are progressing with trenching and assaying, and will release results to shareholders as they become available.' For further information, please contact: Tanzania Gold Plc Tel: +353(0) 21 453 0053 Clive Sinclair-Poulton, Chief Executive Tel: +353(0) 85 739 2674 Email: clive@tanzgold.com Strand Partners Limited James Harris Tel: +44(0)20 7409 3494 Matthew Chandler Media enquiries: St Swithins PR Limited Tel: +44(0)20 7929 4391 Gary Middleton Email: gary@swithins.com Chairman's statement I have pleasure in presenting the Interim Report for Tanzania Gold Plc (the 'Company') for the six month period ended 31 December 2006. The period has been an active time for your Company, primarily in relation to our initial Drilling Programme that encompassed a total of twelve holes (including one collar re-drill), delineated into 1,041 metres of diamond drilling. The direction of this programme was at the autonomy of our wholly owned subsidiary, Anglo Tanzania Gold Limited ('ATGL'), within its 44 square kilometre Mkurumu joint venture project, located approximately 350 kilometres West of Dar es Salaam, Tanzania. The results of the first phase of the drilling programme are the subject of a separate announcement released today. Under the terms and conditions of the Joint Venture agreement between ATGL and Ashanti Exploration Tanzania Limited, executed on 10 May 2005, ATGL has committed to spend, in aggregate, US$650,000 on exploration activities on the Mkurumu project over the two year period ending 9 September 2007. Pending certified conformance to such exploration and funding obligations, ATGL will be entitled to acquire 50 per cent of Ashanti Exploration Tanzania Limited's rights over the Mkurumu Property, amounting to 46 per cent of the total Property. I am delighted to report that during November of last year, Ashanti Exploration Tanzania Limited formally acknowledged that ATGL's funding commitments for the first year to 9 September 2006 had been met and confirmed that the first 50 per cent of its entitlement or a 23 per cent interest had been earned. In line with the work programme set out in the Competent Person's Report published in September 2006, the Company has more than adequate funding still available to meet its remaining obligations and earn the remaining 50 per cent of its entitlement (remaining 23 per cent of the Property). The costs of the 2006 and 2007 drilling programme show we have already substantially met the spending requirements set out in the Joint Venture agreement giving the Company confidence that it will be able to earn the remaining 23 per cent interest in the project well before the September 2007 deadline. In light of our progress with the Mkurumu Property and in line with our overall Investment Strategy, the Company is currently reviewing and evaluating potential new project opportunities to create value for our Shareholders. The board is extremely pleased with the result of the reverse takeover and is pleased to report that the Company and its subsidiaries are enjoying an efficient and complementary working relationship. On behalf of your Board of Directors, I would like to take this opportunity to thank all of our Shareholders for their continuing support and look forward to reporting further progress in the second half of the year. Gerard Nealon Chairman 29 March 2007 TANZANIA GOLD PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Distribution activities - (13) - Administration expenses (285) (60) (130) ________ ________ ________ Operating loss (285) (73) (130) Interest receivable 8 - - ________ ________ ________ Loss on ordinary activities before taxation (277) (73) (130) Taxation - - - ________ ________ ________ Loss on ordinary activities after taxation (277) (73) (130) ======= ======= ======= Loss per ordinary share (pence) Basic (1.630p) (0.037p) (0.07p) Fully diluted (1.580p) (0.035p) (0.06p) CONSOLIDATED BALANCE SHEET 31 December 31 December 30 June 2006 2005 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Fixed assets Intangible assets 4,443 - - Investment in Joint Venture 317 - - Tangible assets 4 - - _________ _________ _________ 4,764 - - _________ _________ _________ Current assets Trade and other receivables 130 5 98 Cash at bank and in hand 1,660 604 3 _________ _________ _________ 1,790 609 101 Creditors: amounts falling due within one year (317) (501) (49) _________ _________ _________ Net current assets 1,473 108 52 _________ _________ _________ Total assets less current liabilities 6,237 108 52 Creditors: amounts falling due after more than one year - - - Provisions for liabilities and charges - - - _________ _________ _________ Net assets 6,237 108 52 ======== ======== ======== Capital and reserves Called up share capital 986 957 958 Share premium account 10,620 4,180 4,180 Reserves (6) - - Profit and loss account (5,363) (5,029) (5,086) __________ _________ _________ Total equity shareholders' funds 6,237 108 52 ========= ======== ======== The interim report was approved by the Board of Directors on 29 March 2007. Clive Sinclair-Poulton Chief Executive Officer CONSOLIDATED CASH FLOW STATEMENT Six months Six months Year ended ended Ended 31 December 31 December 30 June 2006 2005 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Net cash (outflow) / inflow from operating activities (226) 408 (194) Returns on investments and servicing of finance Interest received 8 - - Loans (39) - - Capital expenditure Joint Venture expenditure (79) - - Purchase of tangible fixed assets (3) - - _________ _________ _________ Net cash (outflow) / inflow before financing (339) 408 (194) Financing Shares issued 2,436 24 25 Share issue costs (442) - - _________ _________ _________ Net cash inflow from financing 1,994 24 25 _________ _________ _________ Increase / (decrease) in cash in the period 1,655 432 (169) ======== ======== ======== TANZANIA GOLD PLC NOTES TO THE UNAUDITED INTERIM REPORT 1. The results for the six month periods ended 31 December 2006 and 31 December 2005 are unaudited. They have been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of Tanzania Gold Plc for the year ended 30 June 2006. 2. The comparative figures for the year ended 30 June 2006 are extracted from the statutory accounts for that year which have been reported on by the auditors - such report was unqualified and did not contain a statement under section 237 (2) or (3) of The Companies Act 1985 ('The Act'). The statutory accounts for the year ended 30 June 2006 have been delivered to the Registrar of Companies. 3. The financial information contained in this report does not constitute statutory accounts of the Company within the meaning of Section 240 of The Act. 4. Copies of this Interim Report will be sent to all shareholders and are available at the Company's registered office. 5. Loss per ordinary share The basic loss per ordinary share has been calculated using the loss for the period and the weighted average number of ordinary shares in issue during the period as follows Six months Six months Year Ended ended ended 31 December 31 December 30 June 2006 2005 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Loss attributable to ordinary shareholders (277) (73) (130) ======= ======= ======= Number Number Number Weighted average number of ordinary shares in issue 17,064,576 198,819,507 198,927,309 Basic loss per share (pence) (1.630p) (0.037p) (0.070p) In September 2006, as part of the reverse takeover, a share consolidation took place with one new ordinary share of 0.2 pence each being exchanged for every twenty existing ordinary shares of 0.01 pence each. The diluted loss per ordinary share, as defined in FRS 22, has been calculated as shown below: Six months Six months Year Ended ended ended 31 December 31 December 30 June 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Loss attributable to ordinary shareholders (277) (73) (130) ======== ======= ======== Number Number Number Weighted average number of ordinary shares in issue as above 17,064,576 198,819,507 198,927,309 Dilution for share warrants outstanding 500,000 10,217,391 9,975,000 _________ __________ __________ Diluted weighted average number of shares in issue 17,564,576 209,036,898 208,902,309 ======== ========= ========= Diluted loss per share (pence) (1.580p) (0.035p) (0.050p) ======= ======= ======= 6. Statement of movements on reserves Called Up Share Profit Share premium and loss Capital account Reserves Account £'000 £'000 £'000 £'000 At 1 July 2006 957 4,180 - (5,086) Shares issued 29 7,008 - - Share issue costs - (568) - - Currency translation differences on foreign currency operations - - (6) - Deficit for the period - - - (277) _________ _________ _________ _________ At 31 December 2006 986 10,620 (6) (5,363) ======== ======== ======== ========= During the period ended 31 December 2006 the company issued 9,000,000 new ordinary shares as consideration on the reverse takeover of Tanzania Gold Limited at a price of 50 pence per share, issued 4,872,500 new ordinary shares at 50 pence per share by way of a placing with institutional and other investors, and issued 200,000 new ordinary shares to Strand Partners Limited at a price of 50 pence per share in connection with its services as the Company's Nominated Adviser. 7. Reconciliation of movements in shareholders' funds Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Loss for the period (277) (73) (130) Proceeds from issues of shares 6,468 24 25 Currency translation differences on foreign currency operations (6) - - _________ ________ _________ Net increase / (decrease) in shareholders' funds 6,185 (49) (105) Opening shareholders' funds 52 157 157 _________ ________ _________ Closing shareholders' funds 6,237 108 52 ======== ======== ======== 8. Reconciliation of operating profit to net cash (outflow) / inflow from operating activities Six months Six months Year ended ended Ended 31 December 31 December 30 June 2006 2005 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Operating loss (277) (73) (130) Add back: depreciation and amortisation 56 - - Less: bank interest received (8) - - Decrease in debtors 9 1 (92) (Decrease) in creditors (6) 480 28 ________ ________ ________ Net cash (outflow) / inflow from operating activities after exceptional items (226) 408 (194) ======= ======= ======= 9. Analysis of changes in net funds 1 July Cash Non-cash 31 December 2006 flows changes 2006 £'000 £'000 £'000 £'000 Cash at bank and in hand 3 1,655 2 1,660 ======== ======== ======== ======== INDEPENDENT REVIEW REPORT BY THE AUDITORS TO TANZANIA GOLD PLC Introduction We have been instructed by the Company to review the financial information for the six months ended 31 December 2006, which comprises the Consolidated Profit and Loss Account, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report which has been prepared on the basis that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review of work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 December 2006. UHY Hacker Young Chartered Accountants Registered auditors London 29 March 2007 This information is provided by RNS The company news service from the London Stock Exchange

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