Interim Results

Falkland Gold and Minerals Ltd
13 June 2006



FALKLAND GOLD AND MINERALS LIMITED

Interim Results for the 6 months ended 31 March 2006


13 June 2006


Highlights



•         Over 14,000 metres drilled up to end of May 2006;
•         British Geological Survey review conducted;
•         Cash balances of over £6.6 million;
•         Free of debt.


I am pleased to report on the activities of Falkland Gold and Minerals Ltd ('
FGML' or 'the Company') for the six month period to 31 March 2006.


During the period the Company returned a loss before tax of £490,517 (6 months
to 31 March 2005: £345,869).  A further £158,104 has been invested in tangible
fixed assets this period, most of which was spent on operating plant and
machinery.  Current monthly cash expenditure is approximately £170,000.


The Company is now well into the second year of its exploration programme in the
Falklands.  This programme has been designed to establish the source of alluvial
gold discovered in some of the streams in the Islands and the operations are
going well with over 14,000 metres of core having been drilled over ten targets
as at the end of May 2006.


3,900 metres of drilling is planned on four other targets that are drill ready
and an additional 4,000 metres of drilling is planned on three further targets
where we have yet to use ground sampling techniques to assist in focusing the
drill targeting.


In addition to the investigative drilling campaign, we will be undertaking a
peat soil geochemical sampling programme on two additional areas.  This work is
specifically aimed at developing new drill targets and should generate around
10,000 samples for analysis. Taken together, the drilling and sampling work
programme is likely to take us well into 2007 and this can be financed from
existing resources.


The British Geological Survey completed a review of the exploration work carried
out up to the end of March 2006 and also of the methodologies employed.  They
made several constructive suggestions on the way forward and commented
positively on the implementation of the exploration programme.  Their services
are being retained in order to provide additional interpretative capacity.


Your Board continues to believe that the potential outlined in the prospectus
issued in November 2004 remains and that the continuing work programme should
identify the geological model accounting for the various anomalies.  We remain
hopeful that this will lead on to some discoveries of economic value.


Richard Linnell - Chairman


Enquiries:



Falkland Gold and Minerals Limited
Richard Linnell (Chairman)           [phone]
FALKLAND GOLD AND MINERALS LIMITED



Profit and loss account for the 6 months period ended 31 March 2006


                                                           6 months           6 months
                                                       Period ended       Period ended         Year ended
                                                           31/03/06           31/03/05           30/09/05
                                                        (unaudited)        (unaudited)          (audited)
                                         Note                     £                  £                  £

Administrative expenses                                   (648,357)          (457,705)        (1,108,203)

Operating loss                                            (648,357)          (457,705)        (1,108,203)

Interest receivable                                         157,840            111,836            324,843

Interest payable                                                  -                  -            (2,133)

Loss on ordinary activities before                        (490,517)          (345,869)          (785,493)
taxation

Tax on loss on ordinary activities         2              (107,759)                  -                  -

Loss for the financial period after                       (598,276)          (345,869)          (785,493)
taxation

Retained loss for the period                              (598,276)          (345,869)          (785,493)


                                                           6 months           6 months
                                                       Period ended       Period ended         Year ended
                                                           31/03/06           31/03/05           30/09/05
                                                        (unaudited)        (unaudited)          (audited)
                                                              Pence              Pence              Pence

Basic and diluted loss per ordinary        3                 (0.76)             (0.52)             (1.09)
share




There were no recognised gains or losses in the year other than those dealt with
in the profit and loss account above.



All of the activities of the Company are classified as continuing.



Balance sheet as at 31 March 2006


                                                            6 months           6 months
                                                        Period ended       Period ended        Year ended
                                                            31/03/06           31/03/05          30/09/05
                                                         (unaudited)        (unaudited)         (audited)
                                                                   £                  £                 £

Fixed assets
Intangible assets                                          1,573,365            941,367         1,158,218
Tangible assets                                              560,579            483,893           537,938

                                                           2,133,944          1,425,260         1,696,156

Current assets
Debtors                                                      116,616             87,652            61,001
Cash at bank and in hand                                   6,659,013          8,451,447         7,659,993

                                                           6,775,629          8,539,099         7,720,994

Creditors: amounts falling due within one                  (182,341)          (186,425)          (91,642)
year

Net current assets                                         6,593,288          8,352,674         7,629,352

                                                           8,727,232          9,777,934         9,325,508


Capital and reserves
Called up share capital                                        1,565              1,565             1,565
Share premium account                                     10,209,182         10,221,984        10,209,182
Profit and loss account                                  (1,483,515)          (445,615)         (885,239)

                                                           8,727,232          9,777,934         9,325,508



Reconciliation of movements in shareholders' funds for the 6 months ended 31
March 2006



Loss for the financial period                              (598,276)           (345,869)       (785,493)

New share capital subscribed (net of issue costs)                 -           9,313,495       9,300,693

Net (decrease)/increase to shareholders' funds             (598,276)          8,967,626       8,515,200

Opening shareholders' equity funds                        9,325,508             810,308         810,308

Closing shareholders' equity funds                        8,727,232           9,777,934       9,325,508




Cash flow statement for the 6 months period ended 31 March 2006


                                                                       6 months            6 months
                                                                   Period ended        Period ended          Year ended
                                                                       31/03/06            31/03/05            30/09/05
                                                                    (unaudited)         (unaudited)           (audited)
                                                     Note                     £                   £                   £

Net cash outflow from operating activities            5               (546,353)           (418,291)           (869,413)

Returns on investments and
servicing of finance                                                    157,840             111,836             324,843

Capital expenditure                                                   (612,467)           (731,726)         (1,221,013)

Net cash outflow before financing                                   (1,000,980)         (1,038,181)         (1,765,583)

Financing                                                                     -           9,313,495           9,249,443

(Decrease)/increase in cash in period                               (1,000,980)           8,275,314           7,483,860



Notes to the interim accounts for the 6 months period ended 31 March 2006



1.         Basis of preparation of the financial statement



The interim financial information set out above has been prepared on the same
basis and using the same accounting policies as were applied in drawing up the
company's statutory financial statements for the year ended 30 September 2005.



The financial information for the 6 month periods ended 31 March 2006 and 31
March 2005 are unaudited.



In the opinion of the directors the financial information for the periods fairly
represents the financial position, results of the operations and cash flows for
the period in compliance with Falkland Island Company Law and generally accepted
accounting principles.



The financial information for the full year ended 30 September 2005 is extracted
from the Company's audited financial statements for that year as filed with the
Registrar of companies.  The auditors' report on those accounts was unqualified.



2.         Taxation



Analysis of the tax charge



The tax charge on the loss on ordinary activities for the period was as follows:


                                                              6 months           6 months
                                                          Period ended       Period ended         Year ended
                                                              31/03/06           31/03/05           30/09/05
                                                           (unaudited)        (unaudited)          (audited)
                                                                     £                  £                  £
Current tax:
UK corporation tax on profits of the period                     30,417                  -                  -
Adjustments in respect of previous periods                      77,342                  -                  -

Tax on loss on ordinary activities                             107,759                  -                  -


UK corporation tax has been charged at 30%



Factors affecting the tax charge



The tax assessed for the period is higher than the standard rate of corporation
tax in the UK. The difference is explained below:


                                                              6 months           6 months
                                                          Period ended       Period ended         Year ended
                                                              31/03/06           31/03/05           30/09/05
                                                           (unaudited)        (unaudited)          (audited)
                                                                     £                  £                  £

Loss on ordinary activities before tax                       (490,517)          (345,869)          (785,493)

Loss on ordinary activities multiplied by the
standard rate of corporation tax in the UK of
30%                                                           (147,155)          (103,761)          (235,648)

Effects of:
Tax losses unavailable for current relief                      107,579            100,905            157,940
Depreciation and amortisation in excess of
capital allowances
                                                                52,404              2,856             67,808
Expenses not deductible for tax purposes                         1,250                  -              9,900
Differences in tax rates                                        16,339                  -                  -
Adjustments in respect of previous periods                      77,342                  -                  -

Current tax charge                                             107,759                  -                  -



3.         Loss per share



The calculation of the basic loss per ordinary share is based on the losses of
£598,276 (6 months to 31 March 2005: £345,869) and the weighted average number
of ordinary shares outstanding of 78,250,000 (6 months to 31 March 2005:
66,171,429).  There is no difference between the basic loss per share and the
diluted loss per share presented.


4.         Dividends


The Directors do not recommend the payment of a dividend.


5.         Reconciliation of operating loss to net cash outflow from operating
activities

                                                          6 months            6 months
                                                      Period ended        Period ended          Year ended
                                                          31/03/06            31/03/05            30/09/05
                                                       (unaudited)         (unaudited)           (audited)
                                                                 £                   £                   £

Operating loss                                           (648,357)           (457,705)         (1,108,203)
Amortisation and depreciation charges                     174,679               9,520             225,778
Increase in debtors                                       (55,615)            (82,237)            (55,586)
(Decrease)/Increase in creditors                          (17,060)             112,131              68,598

Net cash outflow from operating activities               (546,353)           (418,291)           (869,413)





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