Final Results

RNS Number : 0349L

Goldstone Resources Ltd

30 August 2012

 



GOLDSTONE RESOURCES LIMITED

("GoldStone" or the "Company")

Final results for the year ended 29 February 2012

GoldStone (AIM: GRL), the AIM quoted company focused on gold in West Africa, announces its final results for the year ended 29 February 2012.

Operational Highlights (including post year-end):

·     24% increase in Homase/Akrokerri Resource with prospect of further expansion based on yet to be received assay results

·     65% interest in Homase licence after spending US$1 million on exploration

·     Approximately 469 bore holes drilled to return 25,734 metres of core

·     Awaiting results from over 8,838 metres of drilling

·     Initial drilling completed at Sangola and assay results pending

·     Drilling ongoing at Oyem in Gabon and assay results pending

·     Intensive exploration to commence at Manso Amenfi in Ghana

·     Key personnel with proven track records joined the Company

Corporate Highlights:

·     Placing of £4.7 million in December 2011 in order to progress projects during 2012

·     Company's Articles amended to incorporate takeover protections

·     Appointment of W H Ireland as Nominated Adviser and Joint Broker

Jurie Wessels, GoldStone's Chief Executive, commented: "We are very pleased with the progress we have made in the past year and are keenly looking forward to receiving further results of our drilling at Homase, Sangola and Oyem.  With the funds at our disposal we are confident that we will achieve all our exploration targets this year and are hopeful to add more value for our shareholders."

Enquiries

GoldStone Resources Limited	[phone]
Jurie Wessels
Hendrik Schloemann
WH Ireland Limited	[phone]
Tim Feather
Nick Field
Optiva Securities Limited
Jason Robertson	[phone]
Jeremy King	[phone]
Walbrook PR
Paul Cornelius	[phone]

Chief Executive Officer's Report

With five projects spread over three West and Central African countries, GoldStone's portfolio ranges from a significant and growing gold resource to a number of highly prospective exploration projects.  The funding raised in November 2011 has enabled GoldStone to be active in all three countries of operation with four drill rigs operating at three of its projects.

In Ghana we have advanced the Homase/Akrokerri project by adding 24% more gold to our JORC compliant resource, which is now over 500,000oz.  With drill results still to be received there are reasonable prospects of expanding the resource further.  To the west in the south-eastern corner of Senegal, we have drilled one of our three major gold anomalies in the Sangola licence area, which has largely been untouched by modern exploration methods and which lies at the south-western perimeter of a gold generative province known as the Kenieba Inlier.  In Gabon, after protracted efforts to mobilise a rig to this remote corner of Africa, we have finally been able to start drilling operations at our Oyem licence and we have increased our understanding of our Ngoutou licence with geological field work.  In these two licenses we have the exciting prospect of exploring two very large contiguous and geologically impressive gold anomalies.  In Manso Amenfi in Ghana, we have a grassroots and brown fields exploration project with several intriguing gold in soil anomalies, cumulatively more than 7 km in extent, that will be explored during the latter part of this year.

From early results and information evident from our exploration activities during the past eight months, we believe the Company has enhanced the value of its assets significantly and is in a position to advance its exploration properties with the potential of making a Company-transforming discovery.

The Company raised approximately £4.7 million in November 2011 with the objective of increasing the resource at Homase/Akrokerri and to drill some of the Company's prospects.  I am pleased to report that since drilling operations started in June 2011 the Company has drilled a total of approximately 26,000 metres in 469 bore holes.  Most of the drilled samples have been submitted for assaying and a large number of results have been received, but the Company is still awaiting results from over 8 800 metres of drilling.  In addition the Company completed two permit-wide airborne geophysical surveys and is about to conclude another over the Manso Amenfi permit in the coming weeks.  Over 466 soil, pit and rock samples have been dispatched for assaying and our geological teams have traversed many kilometres to map and sample outcropping rocks in order to complement our understanding of the geological potential of our licences.

In the latter part of 2011 Andrew McIlwain and Bill Geier joined the Board as nominees of our largest shareholder Unity Mining Ltd ("Unity").  The Company also employed a number of key personnel, notably Johan Ingwersen as Exploration Manager who previously worked for Randgold Resources Ltd during the discovery phase of the Tongon Gold Deposit and Jacques Coetzer as General Manager.

Ghana Projects

The Company's Homase/Akrokerri project is situated within the well-known gold province of the Ashanti Gold Belt in Ghana.  The Homase/Akrokerri project consists of the Akrokerri Licence, which adjoins the southern border of the Homase Licence, within which there is an open pit where Anglo Gold Ashanti mined approximately 40,000 oz of gold in 2002/3.  Although the Company's ownership differs in each of the two licences, they are dealt with as one project by the Company because the areas contribute to a contiguous resource (currently at 502 000 oz of gold) and share the same geology.  The licences also border Anglo Gold Ashanti's large Obuasi permit and are located in the same geological environment as the world-class Obuasi gold deposit.

GoldStone announced its maiden JORC compliant gold resource estimate of 282,608 oz for Homase in April 2010.  In June 2011 an announcement adding 123,000 oz to the resource was made, all of which was contained within the Akrokerri licence area.  Both these estimates were calculated from historical drill data the Company inherited or acquired from previous explorers. 

In June 2011 the Company embarked on a drilling programme with two drill rigs, which culminated in 51 holes being drilled to return 14 376 metres of core on both licences.  From results received for 23 holes drilled in the Homase Licence, the Company announced on 1 August 2012 a 24% (96,400 oz) increase in the Homase/Akrokerri resource for a total combined resource of 502,000 oz.  The Homase resource ounces consequently increased from 282,608oz to 379,000oz.  The Akrokerri ounces remained unchanged at 123,000oz (June 2011) but may be subject to an update later this year.

Results of the August 2012 estimate, for which a cut-off grade of 0.5 g/t gold was applied, are summarised below:

Mineral Resource by Category

Category	Tonnage	Grade	Contained Gold
	Tonnes (million)	(Au g/t)	Oz
Measured	1.55	2.26	113,000
Indicated	4.17	1.75	234,000
Measured & Indicated	5.72	1.89	347,000
Inferred	3.27	1.47	155,000
Total	8.99	1.74	502,000

Mineral Resource by Material

Category	Tonnage	Grade	Contained Gold
	Tonnes (million)	(Au g/t)	Oz
Oxide	2.39	1.27	98,000
Fresh Rock	6.60	1.90	404,000
Total	8.99	1.74	502,000

The resource estimate summarised above also returned an encouraging increase in the average grade from 1.42 g/t to 1.74 g/t gold over a total of 8.99 million tonnes.  Both the Akrokerri and Homase resources may increase provided the results from the remaining 20 holes, which were aimed at depth extensions of the resource along a strike of 2,240m and which were not considered in the resource estimate of August 2012, prove positive. 

There are many exploration targets within the Homase/Akrokerri project area.  Initially the Company decided to focus its exploration efforts on increasing the existing resource and to explore the southern extensions of the Homase trend but earlier this year a second drill rig was put into operation to explore the area previously mined around the Akrokerri granite.

Historical soil sampling in the Akrokerri area indicated widespread gold mineralisation in the granite.  GoldStone's drilling in this area was preceded by geological mapping and surface rock sampling.  It was found that the Akrokerri quartz vein, which stretches along the eastern flank of the Akrokerri granite, ranges from 0.75 metres to three metres in width and has a strike extent in excess of 600 metres.  The central and northern portions of this quartz vein were the focus of colonial mining in the early decades of the previous century, when underground mining to a depth of 114 metres resulted in the recovery of 75,000 ounces of gold reportedly at an average grade of 24 g/t. 

Results from drill holes into the Akrokerri granite to test the strike extent, width and grade of the veins confirmed the existence of multiple south-west dipping and gold-bearing quartz veins with grades varying between 0.8-4.3g/t gold.  The inconsistent geometry of these veins, however, did not, as a matter of priority, justify additional drilling.  Instead more attention was consequently given to the Akrokerri quartz vein.  Two (666 meters) drill holes were directed at the quartz vein to intersect it between 105 and 311 metres below the surface.  Results achieved ranged between 1.69 g/t over 2.18m to 6.10 g/t over 2.09 m.  The Company's geologists are presently modelling the consistency and geometry of the quartz vein to determine whether further drilling is appropriate.

To date 51 drill holes totalling 14 376 metres have been completed at the Homase/Akrokerri project.  The table of drilling results set out hereunder lists all the Company's holes drilled at Homase/Akrokerri this year:

Drill Hole	From (m)	To (m)	Apparent Width (m)	Au Grade (g/t)	True Width (m)
12HMRD001	187	201	14	3.8	6.4
Including			8.3	5.9	3.8
12HMRD002	211	225	14	1.6	9.3
12HMRD003	163	173	10	2.1	7.1
Including			6	3	4.2
12HMRD004	229	231	2	0.8	1.4
12HMRD005	235	249	14	0.8	10.3
12HMRD006	208	230	22	0.6	15.3
12HMRD007	133.4	157.8	24.4	1.4	15.7
Including			7	3.3	4.5
12HMRD008	195	201	6	0.6	3.8
And	203.5	216	12.5	1	8
12HMRD009	Assays Pending
12HMRD010	Assays Pending
12HMRD011	Assays Pending
12HMRD012	Assays Pending
12HMRD013	Assays Pending
12AKDD001	Assays Pending
12AKDD002	42.6	44	1.4	1.5	N/A
and	156	156.4	0.4	3	N/A
and	295	298.1	3.1	4.3	N/A
12AKDD003	50.6	52.8	2.2	1.9	N/A
and	157	158.2	1.2	0.8	N/A
12AKDD004	116.1	118.3	2.2	1.7	N/A
and	309	311.1	2.1	6.1	N/A
12AKDD005	62	65	3	0.5	N/A
And	180.5	181.7	1.2	1.2	N/A
And	186.8	201.8	15	0.5	N/A
12AKDD006	104.8	109	4.3	1.7	N/A
And	269	269.6	0.6	1.4
12AKDD007	231	243.2	12.2	1.7	8.4
Including			9.2	2.2	6.3
12AKDD008	Assays Pending
12AKDD009	Assays Pending
12AKDD010	Assays Pending
12AKDD011	Assays Pending
12AKRD012	Assays Pending
12AKDD013	Assays Pending
12AKDD014	Assays Pending
12AKRD015	Assays Pending
12AKDD016	Assays Pending
12AKDD017	Assays Pending

All intercepts yielded gold values above the 0.5 g/t gold cut-off value applied to GoldStone's resource.

In order to identify further exploration targets a geophysical survey was executed over the Homase/Akrokerri project area.  Although an orientation IP (Induced Polarisation) survey had previously detected the structure that hosts the Homase gold deposit, it was decided that a VTEM (Versatile Time-Domain Electromagnetic) survey would be more economic.  A previously conducted VTEM survey over the central part of the gold resource at Homase, carried out by the Company during July 2010, confirmed that this survey method accurately maps the structure that controlled the gold mineralisation.  A 1,044 line kilometre survey, which covered all of the prospective rocks in the Homase/Akrokerri project area, was carried out by Geotech Airborne Limited and the electromagnetic, magnetic and radiometric data is currently being interpreted.

GoldStone now owns 65% of the Homase Licence after having spent US$1 million on exploration in the area.  The Company will attain an 85% interest if it is able to successfully complete a feasibility study of any nature over the area.  The Company owns 95.1% of the Akrokerri licence through a Ghanaian subsidiary.  Both the Akrokerri and Homase licences are subject to renewal this year and the Directors expect this renewal to occur during the coming months.

Also in Ghana, positive results of the soil sampling at Manso Amenfi, over which GoldStone has a joint venture with Asasemu Mining Limited ("Asasemu Mining"), have led to the identification of a number of gold anomalies, some of which trend parallel to nearby well known gold fertile structures.  A high-resolution airborne magnetic and radiometric survey is about to be carried out for the Company by Xcalibur Airborne Geophysics and is aimed at detecting any structures associated with the gold anomalies and to enable the optimal siting of trenches and/or drill lines.

GoldStone currently owns a 10% interest in the Manso Amenfi licence area and has the right to increase its interest to 25% after expending approximately US$350,000 on the project before March 2013.  Hereafter the Company may increase its interest in the project to 85% in increments either by reaching certain benchmarks (achieving a code compliant resource of any magnitude and a feasibility study) or after spending agreed exploration funds (an additional US$1.8 million) on the project.

Senegal (Sangola License)

Recent discoveries close to the Sangola licence in the same geological environment added additional appeal to this prospect.  The 471 km² Sangola licence, which is wholly owned by GoldStone, lies in the south-eastern corner of Senegal in the gold province known as the Kenieba Inlier.  Earlier exploration of the Birimian rocks of the Kenieba Inlier by other companies has resulted in the discovery of more than 30 million ounces of gold.  GoldStone's Sangola licence area, which is highly prospective and largely unexplored, lies on the South-Western limits of the Kenieba inlier and is bisected by the Main Transcurrent Shear Zone ("MTZ").  The MTZ is known to be responsible for the formation of gold deposits north-east of the licence area like the 3.4 Moz Massawa deposit (Randgold Resources). 

After completing a permit-wide termite mound sampling programme over the licence area, the Company announced the discovery of three major elongated gold anomalies.  The Baraboye, Tiabedji and Tiobo anomalies appear to overlie structures which splay off the MTZ or structures that run parallel to the MTZ.  In view of these early geochemistry results the Company committed to a first phase 15,000 metre Rotary Air Blast ("RAB") drilling programme and decided to test large parts of the Thiabedji anomaly.  The Thiabedji anomaly was an attractive target to commence the drilling operations in the licence because it required little further exploration before it could be regarded as 'drill ready'.  The drilling programme commenced two months later than planned in June 2012 and 11 358 metres were drilled in 418 holes before the drilling was terminated due to the onset of the rainy season.  At the same time an airborne high resolution magnetic and radiometric survey covering the entire permit area was carried out by Xcalibur Airborne Geophysics.  The survey's purpose was to delineate drill targets more accurately at Tiobo and Baraboye by detecting any structures that coincide with the gold anomalies at surface and to add an improved general geological understanding of the licence area.  Full results from the RAB drilling programme are pending.

Gabon Projects (Oyem & Ngoutou)

The Oyem and Ngoutou licences were granted to the Company in April 2011.  The licence areas have three common characteristics.  Firstly, both licences hold large contiguous and geologically compelling gold in soil anomalies, which were identified during a country-wide EU sponsored survey by the Gabonese Government.  Secondly, the anomalies on both licences coincide with a contact zone between amphibolite and gneissic rocks and thirdly, both licences contain significant artisanal gold workings in the streams that cut through the gold anomalies.

Both areas are easily accessible using existing logging roads and both will be investigated by a drilling program.  Exploration efforts in Gabon kicked off in June 2012 with the erection of a field camp in the remote Oyem licence area and the establishment of a base office in Libreville.  The results of GoldStone's soil sampling confirmed and sharpened the results of the EU sponsored survey in both permits.  Two drill lines, each with five drill pads, were prepared at Oyem in the months leading up to the arrival of the drill rig and its crew.  It was decided to postpone the building of an exploration camp at Ngoutou because the Company could rent existing infrastructure from a logging company operating in the area. A man-portable modularised drill rig suitable to the terrain of both the Oyem and Ngoutou licences was mobilised to Gabon in April 2012.  The South African drill crew from Geoserve Exploration Drilling Limited, which has been contracted to execute the 3,000 metre diamond drilling programme for the Company in Gabon, was mobilised to Oyem in June 2012.  The team will drill test the central part of the 15 kilometre long Oyem gold in soil anomaly and then mobilise to Ngoutou. 

Placing and Takeover Provisions

On 18 November 2001, the Company announced that it had conditionally raised approximately £4.7 million at a price of 5 pence per share (the "Placing").  The Placing was conditional on the passing of certain special resolutions, including a resolution which will incorporate provisions of Chapter 5 of the Disclosure Rules and Transparency Rules (the "DTRs") and provisions governing takeovers (the "Takeover Provisions") into the Company's Articles of Association (the "Articles"). 

The Placing was confirmed and the provisions relating to the DTR's and the Takeover Provisions were adopted at a meeting of shareholders on 5 December 2011.  The effect of the DTR provisions is that shareholders are now required to notify the Company of changes to their holdings in accordance with the DTRs.  The purpose of the Takeover Provisions is to include in the Articles provisions governing the conduct of any takeover of the Company.  Because the UK Takeover Code (the "Code") does not apply to GoldStone, the changes to the Articles have the effect of requiring any person who together with anyone acting in concert with them and who becomes interested in shares which carry 49 per cent or more of the voting rights of the Company, to make an offer for the remainder of the Company's share capital.  The adopted provisions also require that such an offer is to be made in cash at not less than the highest price paid by the offeror, or any person acting in concert with it, for any interest in the shares in the previous 12 months.

The changes to the Articles would not have been possible had Unity Mining Ltd ("Unity") not undertaken to vote in favour of proposed changes to the Articles at the planned Annual General Meeting of 5 December.  Unity is the Company's largest shareholder holding 107,053,326 ordinary shares, representing a recently increased interest of 33.63 per cent of the issued share capital. 

Changes to the Board

In October 2011 an announcement was made by Unity that both Rod Hanson and Tim Churcher would be leaving Unity.  At the same time Tim Churcher resigned from the Company's Board and three months later Rod Hanson, who was the Managing Director and Chief Executive Officer of Unity, was replaced by Andrew McIlwain as the Unity nominated Non-Executive Director of Goldstone.  Mr. McIlwain was appointed Managing Director and Chief Executive Officer of Unity Mining Limited on 2 December 2011.  Soon thereafter William (Bill) Geier was also nominated by Unity as a Non-Executive Director of the Company following his appointment to the role of Chief Financial Officer of Unity Mining Limited ("Unity").

Outlook

In the forthcoming months and with the approximately $US 3 million at our disposal our efforts will be focused towards assaying our results, drilling at our Manso Amenfi prospect and continuing our drilling operations at Oyem and Ngoutou with the aim of making a company transforming discovery.

At Homase/Akrokerri the Company expects to achieve a further resource update based on the balance of drill results from the paused drilling campaign.  Various gold prospects within the Homase/Akrokerri project area add significant resource potential to the project and will be investigated further.  The gold in soil anomalies, to the south and along strike of the Homase/Akrokerri mineral resource, will receive particular attention as well as the Adubrim prospect, which is associated with a structure that runs parallel to the existing resource.  The geometry of the Akrokerri quartz vein system is being assessed to determine whether it deserves further investigation.  Structurally interesting targets which may become more evident when the results of the recently completed VTEM survey are interpreted, will also be investigated.

At Manso Amenfi the multiple gold in soil anomalies already identified in the licence area will be investigated by intrusive exploration work after completion of the airborne high resolution magnetic survey in the coming months.  Drilling is expected to commence in the last quarter of this year.

At Sangola our knowledge of the permit should be improved once results from the recent RAB drilling programme are known. The licence area will only be accessible late this year when the Company will further investigate the Baraboye, Thiabedji and Tiobo gold prospects. Additional drilling will be necessary to further unlock the potential value of this prospect.

In Gabon first pass drilling will be completed at Oyem during the latter part of this year after which the drill rig is planned to be moved to Ngoutou.  Assay results will be made available as a geological understanding of the areas unfolds.

Jurie Wessels

Chief Executive Officer

29 August 2012

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 29 February 2012

	Note			Year ended 2012 US$	Year ended 2011 US$
Revenues
Interest receivable				24,043	8,621
				24,043	8,621
Exploration expenses
Exploration expenses				(4,173,439)	(667,688)
Gross loss				(4,149,396)	(659,067)
Other operating expenses				(1,541,149)	(885,646)
LOSS FOR THE FINANCIAL YEAR	4			(5,690,545)	(1,544,713)
OTHER COMPREHENSIVE INCOME				-	-
TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR				(5,690,545)	(1,544,713)
Loss per ordinary share
Basic and diluted loss per share (cents per share)	1			(1.8)	(0.7)

BALANCE SHEET

As at 29 February 2012

			Year ended 2012 US$	Year ended 2011 US$
FIXED ASSETS
Tangible assets			37,071	38,651
CURRENT ASSETS
Cash at bank			7,572,698	5,560,395
CREDITORS: amounts falling due within one year
Creditors and accruals			(539,454)	(167,677)
Net current assets			7,033,244	5,392,718
TOTAL ASSETS LESS CURRENT LIABILITIES			7,070,315	5,431,369
CAPITAL AND RESERVES
Share capital			5,234,834	3,746,214
Share premium			23,844,234	18,214,386
Capital contribution reserve			555,110	555,110
Share options reserve			605,808	605,808
Profit and loss account - (deficit)			(23,169,671)	(17,690,149)
SHAREHOLDERS' FUNDS			7,070,315	5,431,369

STATEMENT OF CHANGES IN EQUITY

AS AT 29 February 2012

	Note			Year ended 2012 US$	Year ended 2011 US$
SHARE CAPITAL - £0.01 per value	8
At 1 March				3,746,214	2,354,482
Issue of shares				1,488,620	1,391,732
At 29 February				5,234,834	3,746,214
SHARE PREMIUM
At 1 March				18,214,386	13,849,554
Issue of shares				5,629,848	4,970,640
Fair value of share options				-	(605,808)
At 29 February				23,844,234	18,214,386
CAPITAL CONTRIBUTION RESERVE				555,110	555,110
SHARE OPTIONS RESERVE	10			605,808	605,808
ACCUMULATED DEFICIT
Balance at beginning of year				(17,690,149)	(16,145,436)
Net loss				(5,690,545)	(1,544,713)
Credit to equity for equity-settled share-based payments				211,023	-
Balance at end of year				(23,169,671)	(17,690,149)
TOTAL SHAREHOLDERS' FUNDS				7,070,315	5,431,369

CASH FLOW STATEMENT

For the year ended 29 February 2012

				Year ended 2012 US$	Year ended 2011 US$
Loss for the financial year				(5,690,545)	(1,544,713)
Adjusted for:
Depreciation				13,450	10,162
Share options granted to directors and employees during the year				211,023	-
Interest received				(24,043)	(8,621)
Increase in creditors				371,777	63,215
Net cash outflow from operating activities				(5,118,338)	(1,479,957)
Investing activities
Interest received				24,043	8,621
Purchase of fixed assets				(11,870)	(30,531)
Net cash inflow/ (outflow) from investing activities				12,173	(21,910)
Financing activities
Proceeds from issue of ordinary share capital				7,118,468	6,362,372
Increase in cash				2,012,303	4,860,505
Cash at beginning of the year				5,560,395	699,890
Cash at end of the year				7,572,698	5,560,395

NOTES

1.         EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the losses attributable to ordinary shareholders and employees by the weighted average number of ordinary shares in issue after the placing on AIM.  Diluted earnings per share is calculated using the weighted average number of ordinary shares in issue as adjusted to assume conversion of all dilutive potential ordinary shares.

				2012 US$	2011 US$
Loss per ordinary share
Loss attributable to share holders				(5,690,545)	(1,544,713)
Weighted average number of ordinary shares				318,356,738	222,377,971
Basic and diluted loss per share				(1.8)	(0.7)

The Group has the following instruments which could potentially dilute basic earnings per share in the future:

				2012 Number	2011 Number
Share options				18,650,000	11,300,000
Warrants				21,802,778	21,802,778

2.         FINANCIAL INFORMATION

The financial information set out above does not constitute the Company's statutory accounts for the year ended 29 February 2012, but is derived from those accounts.  The auditors have reported on those accounts; their reports were unqualified and did not draw attention to any matters by way of emphasis without qualifying their reports.

3.         ANNUAL REPORT

The annual report and accounts for the year ended 29 February 2012 will be posted to shareholders by 31 August 2012 and will be available from the Company's website at www.goldstoneresources.com shortly.

 

END

 

 

FR BKCDKPBKDBFB