Interim Results
Falkland Gold and Minerals Ltd
12 June 2007
FALKLAND GOLD AND MINERALS LIMITED
Chairman's interim statement
for the 6 months period ended 31 March 2007
12 JUNE
FALKLAND GOLD AND MINERALS LIMITED
12 June 2007
Interim Results for the 6 months ended 31 March 2007
Highlights
• 'Falklands 1' drill rig relocated to West Falklands;
• Cash balances of over £4.9 million;
• Original target of 24,000 metres reached ahead of schedule.
During the period, the Company returned a loss before tax of £531,124 (6 months
to 31 March 2006: £533,577). Around £59,000 has been spent on tangible fixed
assets this period, the majority of which was on operating plant and machinery
and a second hand 4 wheel drive vehicle. At current levels, the total
expenditure is approximately £150,000 per month.
The Company is now well into the third year of its exploration programme in the
Falkland Islands which is designed to establish the source of alluvial gold
that had been discovered in some of the streams in the Islands. At the end of
May 2007 25,288 metres of core had been drilled across the various targets on
East Falklands with 5,087 metres of that total being drilled in 2007.
In May 2007 we relocated one of our drill rigs, 'Falklands 1', to West
Falklands. The sequence of targeting has optimised the logistics involved in
transporting men and equipment between the islands. The rig was sited on Target
20 and drilling has already commenced. In addition to the work outlined above,
several other areas have been selected for review in West Falklands and these
include radiometric anomalies. Further work, involving geological mapping and
soil sampling is planned to check their mineral potential.
On East Falklands we will continue our explorations programmes particularly on
Target 11 and in the region of Target 5. Going forward, we plan to drill an
additional 2,000 metres on East Falklands in the remainder of 2007. That will
include 600 metres on Target 11, 400 metres on Target 10 (two x 200 metre holes)
and 750 metres on the Cantera Prospect which is located immediately to the east
of Target 5. Drilling of some 1,900 metres is planned on West Falklands with
650 metres on Target 20, 750 metres on Target 18 (subject to final soil sample
results) and 500 metres on the Warrah Prospect. In order to test Target 20 at
depth, two deep holes (of 300 and 350 metres) have also been scheduled.
In addition to the drilling campaign, our work on the Black Shale Prospect,
which is an area of some 18 km2 to the north of Goose Green, continues to
progress well, increasing our geological and geochemical knowledge of the area.
As has been previously reported, our internal review of the Falkland Islands
project area and that of the British Geological Survey ('BGS') have generated
conceptual styled models of mineralisation for the Black Shale Prospect. It is
believed the Black Shale Prospect could provide the environment, in terms of
size and scope, to host these models. A key part of the models of
mineralisation are for fractures and dykes to intersect or cut through the black
shale to allow mineral rich fluid deposition. Structural mapping by the company
has identified such areas and so 10 blocks (ranging in size from 0.5 km2 to 5
km2 in area) have been drawn up to systematically cover the area. In total,
some 6,000 soil samples will be collected. These samples will provide assay
information that could indicate anomalous zones. Naturally, any such zones
would be followed up with drilling if justified.
Despite the extensive work programme, the lack of significant positive results
is disappointing. Given the incidence of gold grains that have been found in
the stream sediments and the fact that the BGS has identified these as being
epithermal in origin and close to their source, we continue to believe in the
potential of the licence. Nevertheless the fact remains that a source of the
gold has not been yet been located.
To provide further input into our work programme, we have commissioned Professor
Richard Viljoen of the University of the Witwatersrand in South Africa to review
our target generation and work execution. Professor Viljoen and his twin
brother Maurice have over 80 years experience between them in Southern
Hemisphere geology and target generation. We believe that they are well
equipped to review the approach the Company has taken and the results obtained
in order to assess whether the conclusions reached thus far are sound. His
initial findings support our belief and he has made a number of suggestions for
further work which will be developed by our team in the field.
The Board has continued to be very pleased by the performance of its competent
and well equipped team in the Falklands.
Richard Linnell
Chairman
Enquiries:
Falkland Gold and Minerals Limited
Richard Linnell (Chairman) +27 82 440 6710
FALKLAND GOLD AND MINERALS LIMITED
Profit and loss account
for the 6 months period ended 31 March 2007
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
Note £ £ £
Administrative expenses (684,506) (691,417) (1,610,920)
Operating loss (684,506) (691,417) (1,610,920)
Interest receivable 133,173 157,840 262,289
Other income 20,209 - 22,820
Loss on ordinary activities before taxation (531,124) (533,577) (1,325,811)
Tax on loss on ordinary activities 2 (25,303) (107,759) (127,103)
Loss for the financial period after taxation (556,427) (641,336) (1,452,914)
Retained loss for the period (556,427) (641,336) (1,452,914)
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
Pence Pence Pence
Basic and diluted loss per ordinary share 3 (0.71) (0.82) (1.86)
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.
FALKLAND GOLD AND MINERALS LIMITED
Balance sheet
as at 31 March 2007
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
Notes (unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Fixed assets
Intangible assets 2,223,389 1,573,365 1,834,282
Tangible assets 351,194 560,579 442,132
2,574,583 2,133,944 2,276,414
Current assets
Debtors 66,160 116,616 35,771
Cash at bank and in hand 4,916,663 6,659,013 5,782,956
4,982,823 6,775,629 5,818,727
Creditors: amounts falling due within one year (112,059) (182,341) (136,427)
Net current assets 4,870,764 6,593,288 5,682,300
7,445,347 8,727,232 7,958,714
Capital and reserves
Called up share capital 1,565 1,565 1,565
Share premium account 10,209,182 10,209,182 10,209,182
Other Reserves 5 199,020 112,900 155,960
Profit and loss account (2,964,420) (1,596,415) (2,407,993)
7,445,347 8,727,232 7,958,714
FALKLAND GOLD AND MINERALS LIMITED
Cash flow statement
for the 6 months period ended 31 March 2007
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Net cash outflow from operating activities (520,718) (589,413) (974,219)
Returns on investments and servicing of finance
Interest received 133,173 157,840 262,289
Other income 20,209 - 22,820
Capital expenditure
Purchase of intangible fixed assets (456,842) (454,363) (963,699)
Purchase of tangible fixed assets (59,872) (158,104) (183,245)
Net cash outflow before financing (884,050) (1,044,040) (1,836,054)
Financing
Share based payment 43,060 43,060 86,120
Taxation (25,303) (107,759) (127,103)
(Decrease) in cash in period (866,293) (1,108,739) (1,877,037)
FALKLAND GOLD AND MINERALS LIMITED
Cash flow statement
for the 6 months period ended 31 March 2007
Reconciliation of operating loss to net cash outflow from operating activities
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Operating loss (684,506) (691,417) (1,610,920)
Depreciation and amortisation 218,545 174,679 566,686
Decrease/(increase) in debtors (30,389) (55,615) 25,230
(Decrease)/increase in creditors (24,368) (17,060) 44,785
Net cash outflow from operating activities (520,718) (589,413) (974,219)
Reconciliation of movements in shareholders' funds for the 6 months period ended 31 March 2007
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Loss for the financial period (556,427) (641,336) (1,452,914)
Share based payment 43,060 43,060 86,120
(513,367) (598,276) (1,366,794)
Opening shareholders' equity funds 7,958,714 9,325,508 9,325,508
Closing shareholders' equity funds 7,445,347 8,727,232 7,958,714
FALKLAND GOLD AND MINERALS LIMITED
Notes to the interim accounts
for the 6 months period ended 31 March 2007
1. Basis of preparation of the financial statement
During this period, Financial Reporting Standard ('FRS') 20 'Share-based Payment
' was adopted. The net effect of adopting FRS 20 is detailed at Note 5. In all
other respects, 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 audited statutory financial statements for
the year ended 30 September 2006.
The financial information for the 6 month periods ended 31 March 2007 and 31
March 2006 are unaudited. The financial information for the full year ended 30
September 2006 is extracted from the Company's audited financial statements for
that year as filed with the Registrar of companies and has been modified solely
to reflect the effects of adopting FRS 20. The auditors' report on those
accounts was unqualified.
The financial information for the 6 month period ended 31 March 2006 and the
full year ended 30 September 2006 have been restated for the adoption of FRS 20.
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 periods in compliance with Falkland Island Company Law and
generally accepted accounting principles.
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
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Current tax:
UK corporation tax on profits of the period 25,303 30,417 49,761
Adjustments in respect of previous periods - 77,342 77,342
Tax on loss on ordinary activities 25,303 107,759 127,103
UK corporation tax has been charged at 30%.
FALKLAND GOLD AND MINERALS LIMITED
Notes to the interim accounts
for the 6 months period ended 31 March 2007
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
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Loss on ordinary activities before tax (531,124) (533,577) (1,325,811)
Loss on ordinary activities multiplied by the
standard rate of corporation tax in the UK of
30% (159,337) (160,073) (397,743)
Effects of:
Tax losses unavailable for current relief 133,275 120,497 303,608
Depreciation and amortisation in excess of
capital allowances 65,564 52,404 170,006
Small companies relief (14,649) 16,339 (27,570)
Expenses not deductible for tax purposes 450 1,250 1,460
Adjustments in respect of previous periods - 77,342 77,342
Current tax charge 25,303 107,759 127,103
3. Loss per share
The calculation of the basic loss per ordinary share is based on the losses of
£556,427 (6 months to 31 March 2006: £641,336) and the weighted average number
of ordinary shares outstanding of 78,250,000 (6 months to 31 March 2006:
78,250,000). 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. Share Based Incentives
During the period, the Company adopted FRS 20. The Company has an unapproved
share option plan and, in accordance with the requirements of FRS 20, the
Company recognises an expense based on the fair value of the options granted.
This cost is spread over the vesting period for each grant. The net effect of
adopting FRS 20 is summarised as follows;
6 months 6 months
Period ended Period ended Year ended
31/03/07 31/03/06 30/09/06
(unaudited) (unaudited and (unaudited and
re-stated) re-stated)
£ £ £
Profit and loss account
Administrative Expenses 43,060 43,060 86,120
Balance Sheet
Other Reserves 43,060 43,060 86,120
Profit and loss account 155,960 69,840 69,840
199,020 112,900 155,960
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Wednesday, 18th December 2024
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