Final Results

RNS Number : 0493R

Landore Resources Limited

23 April 2009

 



Landore Resources Limited

('Landore' or 'the Company')

Final results

for the year ended 31 December 2008

The Board of Landore is pleased to announce its audited results for the year to 31 December 2008.

Chairman's statement

During this year of global financial turmoil, Landore has continued to create and increase value for its shareholders. The main focus of our activities has again been on the Junior Lake project in the province of Ontario, Canada.

Financial results

In the year ended 31st December 2008 the Group incurred a loss of £3,947,576 (2007: £2,627,315). This increased loss is a direct result of increased exploration expenditure of £2,550,375 which, in accordance with our prudent accounting policy, is all written off. In addition the losses were increased this year by a non-cash item of £584,955 relating to a charge for new share options and warrants.

The Junior Lake project

As stated above, the principal focus for our exploration activities has been centred on the Junior Lake project which is situated 235 kilometres northeast of Thunder Bay in the province of Ontario. The property is host to numerous metal deposits/occurrences including Nickel, Copper PGE deposits and a significant magnetite Iron Ore deposit. Full details of the project are set out in the operations report which follows my statement. The highlights are:

•    the combined resource estimates of the VW and B4-7 deposits now stand in excess of 51,000 tonnes of Nickel equivalent;

•    the land holdings and ownership of the Junior Lake project have now been consolidated and extended. In addition mining leases have been granted for the VW and B4-7 nickel projects; and

•    our exploration has established and confirmed the presence of a large magnetite Iron Ore deposit extending over a strike length of 3.8 kilometres or more which frequently outcrops at surface. Most significantly this Iron Ore deposit is situated at the western end of the Junior Lake property and is only 11 kilometres from the Canadian National Railway which provides direct access to the Port of Thunder Bay on Lake Superior.

During 2009 we will continue with drilling on the VW and B4-7 deposits with the aim of increasing the resource estimates of those projects. It is our intention to continue advancing these two projects towards development so as to take advantage of the recovery cycle in commodities that is widely expected by analysts. 

We will also be continuing with further drilling on the Iron Ore deposit with the aim of producing an inferred resource estimate of tonnage and grade.

Lessard - Copper-zinc project

The Lessard project is a VMS deposit located approximately 107 kilometres north of Chibougamau in the province of Quebec. As a result of the 2008 drilling campaign a compliant resource estimate of 740,000 tonnes @ 1.88 per cent. Copper, 3.5 per cent. Zinc, 38.6 g/t Silver and 0.84 g/t Gold was established.

During 2009 further exploration will continue to identify similar deposits on the property. It is worth noting that approximately 44 per cent. of all exploration expenditures on projects such as this in Quebec are reimbursed by the provincial government. As a result of 2008 exploration expenditures we are anticipating a reimbursement of C$902,000 later this year.

Funding

We are fortunate, in these difficult times, to have a strong and supportive group of shareholders. During the year a total of approximately £6.2 million was raised by placing new shares and warrants being exercised.

The Company is funded for its 2009 activities and has no long-term debt.

Outlook

Landore will continue to drill the Junior Lake projects as outlined above and increase resource estimates. We believe demand will increase, especially given the financial stimulus packages around the world, which will in turn restore metal prices to a level where projects become financially viable again. As usual we will keep shareholders informed as results become available.

Again I would like to thank management and staff at Thunder Bay and on site for their commitment towards the Company's performance over the past year.

Operations report

Introduction

Landore Resources Limited, through its 100 per cent. owned subsidiary Landore Resources Canada Inc., is actively engaged in mineral exploration in Eastern Canada.

Landore owns or has the mineral rights to nine properties owned 100 per cent. and has an option agreement on a further property.

Landore's primary focus is the Junior Lake Nickel and Iron projects followed by the Lessard copper-zinc project. In addition, substantial exploration work is being carried out on the optioned West Graham nickel project by First Nickel Inc.

JUNIOR LAKE PROPERTY

The Junior Lake property is located in the province of Ontario, Canada, approximately 235 kilometres north-northeast of Thunder Bay and is situated within the Caribou-O-Sullivan Greenstone Belt in the Wabigoon Subprovince.

The property is host to the VW Nickel Deposit (VW Deposit), the B4-7 Nickel-copper-cobalt-Platinum Group Elements (Ni-cu-co-PGE) Deposit, (B4-7 Deposit) and the BAM Zone gold occurrence, together with the Carrot Top Zone (Ni-cu-co-PGE), the Grassy Pond Zone (Ni-cu- co-PGE) and a significant Iron occurrence on the recently consolidated Lamaune Lake property. 

Land

During 2008 Landore completed a significant consolidation and acquisition programme in and around the highly prospective Junior Lake property.

Consolidation

In October Landore acquired the 20 per cent. share of the Lamaune Lake Property that Landore did not already own, for a consideration of 2,500,002 new ordinary shares of 1p each in the Company.

The Lamaune Lake property, consisting of eight claims for a total area of 1,616 hectares, is located at the western end of and is contiguous with the Junior Lake property. Lamaune contains the highly prospective Carrot Top Zone (Ni-cu-PGE), the Grassy Pond Zone (Ni-cu-PGE) and several other areas of interest including a significant Iron occurrence at North Lamaune Lake.

The vendors, Stares Contracting Corporation and James Dawson, have retained a 2 per cent. Net Smelter Returns Royalty ('NSR') on the eight original Lamaune claims and nine claims staked by Landore subsequent to the signing of the original option agreement in 2002. Landore is entitled to purchase 1 per cent. of the NSR for C$1,000,000 in certain specified circumstances.

Lamaune Lake property has now been consolidated into the Junior Lake property.

Acquisition

Four new claims, for a total area of 912 hectares, have been staked at the western end of the Junior Lake property to cover the strike extension of the North Lamaune Lake Iron Deposit.

In addition, four new claims, for a total area of 752 hectares, have been staked around Landore's Swole Lake claim, located on the mid-northern boundary of the Junior Lake property, to cover potentially significant nickel-copper-cobalt mineralization.

With the above consolidation and acquisitions, the Junior Lake property now extends for over 31 kilometres and covers an area of 14,145 hectares. 

Mining leases

A pre requisite for the development of the VW and the B4-7 Deposits is to secure tenure over an area of land sufficiently large enough to provide for development, mining, processing, infrastructure and buffer zones around the mining areas and for future expansion.

Landore has been granted three mining leases, which include mining and surface rights, over an area encompassing the VW and the B4-7 Deposits. The leases cover 23 existing exploration claims for a total area of 3,676 hectares and have been granted for 21 years renewable for further terms of 21 years.

Within the mining leases, Landore has the right, subject to provisions of certain Acts and reservations, to:

• sink shafts, excavations etc., for mining purposes;

• construct dams, reservoirs, railways etc., as needed; and

• erect buildings, machinery, furnaces, etc., as required and to treat ores.

VW Deposit

The VW Deposit is located at Ketchikan Lake in the central part of the Junior Lake property and is Landore's most advanced project.

In March 2008 a resource estimate upgrade, compliant to Canadian National Instrument 43-101 (NI 43-101) was completed on the VW Deposit.

The resource estimate reported 22,407 tonnes Nickel Equivalent (NiEq) at an average grade of 0.45 per cent. NiEq at a 0.2 per cent. Nickel cut-off grade. 91 per cent. of the resource is in the higher 'Indicated' category. The resource remained open to the east and to the west as well as down dip.

In July 2008 a further drilling campaign, comprising 19 holes for 5,189 metres, was completed on the VW Deposit with 11 holes testing the down dip extension of the higher grade Katrina Zone and the remaining eight holes testing the eastern extent of the deposit.

  Mineralized intersections included:

Drill-hole No	From Metres	Width Metres	Nickel %	Copper %	Cobalt %
0408-180	299.00	1.00	1.01	0.03	0.04
and	313.26	2.74	2.19	0.40	0.08
including	315.00	1.00	3.04	0.09	0.09
0408-185	216.00	11.00	1.53	0.07	0.04
including	224.00	2.00	3.19	0.08	0.07
and	239.00	1.50	0.88	0.03	0.03
and	243.61	1.39	1.39	0.13	0.04
0408-187	269.20	2.40	1.14	0.03	0.03
and	279.38	1.42	1.60	0.09	0.04

Results from the drilling on the western end of the VW Deposit, show the down plunge of the Katrina Zone mineralization to be improving with depth, further enhancing the underground mining potential.

Further drilling is programmed to be carried out on the western end of the VW Deposit in June 2009 and a resource upgrade will be commenced later this year. 

B4-7 Deposit

The B4-7 Deposit is located approximately 3 kilometres to the north-west of the VW Deposit and is Landore's second most advanced Deposit.

In May 2008 a resource estimate, Australasian Joint Ore Reserves Committee (JORC) Code compliant (2004), was completed on the B4-7 Deposit.

The resource estimate reported 28,900 tonnes Nickel Equivalent (NiEq) at an average grade of 0.45 per cent. NiEq at a 0.2 per cent. Nickel cut-off grade. All of the resource is in the 'Inferred' category. The B4-7 Deposit also remains open to the east and to the west as well as down dip.

As a result of the above resource estimates the combined Resources of the VW and B4-7 Deposits now stand in excess of 51,000 tonnes of NiEq.

A new drilling campaign commenced in March 2009 on the B4-7 Deposit, for approximately 6,000 metres, to advance the resource into an 'Indicated' category and to further test the continuity of the hanging wall mineralized zones named 'Alpha' and 'Beta'.

Drilling to date indicates strong westerly continuity of the B4-7 Deposit, with multiple zones of massive, potentially nickeliferous, pyrrhotite encountered in drill-hole 0409-125W' the most westerly hole drilled. The B4-7 Deposit remains open along strike and to depth.

Lamaune Lake Iron Ore Deposit

Exploration by Landore during 2008 has confirmed the presence of a large magnetite Iron Ore deposit at the western end of the Junior Lake property.

The exploration established that:

• strong magnetic anomalies extend over a strike length greater than 3.8 kilometres with banded iron formation (BIF) frequently outcropping at surface; and

• drilling intersected wide bands of BIF, including 78.10 metres (256 feet) in drill-hole 1108-45, and has confirmed the depth potential with drill-hole 1108-54 intersecting continuous BIF to a vertical depth of 192 metres (630 feet).

In late 2007, Landore commissioned a Geophysical review of the historic Zmudzinski-Despard Iron Ore deposit located to the south and south-east of North Lamaune Lake.

The review compared the magnetic anomalies outlined on the Iron Ore deposit in 1960 with Landore's 2004 Aerotem EM/Magnetic survey.

The results of the Geophysical review were sufficiently encouraging to warrant conducting of a detailed ground total field magnetic survey over a 3.8 kilometre trend to the south-east of North Lamaune Lake. The survey was completed in early 2008.

A comparison of the results of the above survey with the 2004 airborne magnetic survey results show a close correlation, with a total of nine anomalous magnetic responses defined by contour values of 64,000nT or greater. The historic anomalies, identified in 1960, were represented within five of these newly defined anomalies with additional strong anomalies between and to the south-east of historic anomalies, suggesting the potential for additional targets and Iron deposits not previously mapped.

Encouraged with the results of the review of the historic information and the recent magnetic surveys, Landore completed trenching and exploratory drilling on the two historic anomalies 'D and E', which were readily accessible by track, with banded BIF outcropping at surface and within an area that had been recently clear felled.

Three trenches, totalling 227 metres long, were excavated and washed, exposing wide bands of BIF. Sawn cut channel samples were taken and analyzed by ALS Laboratories, Thunder Bay, at their branch located in Perth, Western Australia, specializing in Iron analysis.

In July 2008, an exploration drilling campaign, consisting of 13 drill-holes, Diamond NQ core, for a total of 1,838 metres was completed on the 'D and E' historic anomalies (seven holes), the 'F and G' historic anomalies (five holes) and hole 1108-52 on an outcrop a further 3 kilometres to the south-east of the known trend.

Results from the BIF intersections received to date included:

Drill-hole No	From Metres	Width Metres	Fe %
1108-41	18.00	14.47	25.97
and	112.91	24.22	26.81
1108-42	29.08	65.74	30.69
and	201.00	23.44	28.29
1108-44	57.00	31.05	29.14
and	97.57	8.28	36.38
1108-45	17.00	78.10	30.44
1108.48	59.30	28.20	29.19
1108.49	6.00	18.18	28.89
1108-50	130.00	19.37	29.56
and	154.85	15.72	29.76
1108-53	130.00	38.20	29.47
and	175.39	10.86	33.76

Note: All holes were drilled at 45 degrees except 1105-54 which was drilled at 75 degrees to test the depth potential. The BIF is generally dipping at 65 to 75 degrees.

Curvilinear airborne magnetic anomalies infer at least two main sub-parallel trends of potential iron formation in a north-west south-east direction with less extensive oblique en-echelon trends.

The above geophysical trends remain untested by drilling for at least 2 kilometres along strike to the north-west and similarly along strike to the south-east providing excellent potential for discovery of additional magnetite iron formation.

Trenching and drilling has confirmed at least three horizons of BIF up to 75 metres wide and historic reports of finely banded magnetite with inter-bedded chert of similar thicknesses. Strong centimetre to metre scale folding is evident and as such likely exists on a larger scale, possibly causing thickening and thinning of the iron formation along the main trends.

Extract from R.V.Oja's 1960 report on the North Lamaune Iron Ore deposit:

'A beneficiation report on a sample of banded iron formation from the west end area, after grinding to -100 mesh shows that the concentrate contains 65.36 per cent. iron, 0.071 per cent. phosphorus, 6.58 per cent. silica and 0.20 per cent. titania. On the basis of the microscopic examination, it is believed a lower silica content could be obtained by finer grinding.'

Thus, from the drilling results and the limited historical metallurgical testing, the North Lamaune Iron Ore occurrence has the potential to be economically viable.

In addition the iron formation is on or near surface along the 3.8 kilometre trend providing for a low stripping ratio of ore to waste with associated low mining costs.

The recent magnetic surveys together with the trenching and drilling give promise that a resource many times larger than the historic estimates on the North Lamaune Iron Ore deposit can be expected.

Perhaps the greatest advantage that the North Lamaune Iron Ore deposit has is its proximity (just 11 kilometres) to the Canadian National Railway providing direct access to the Port of Thunder Bay on Lake Superior, from where, up to only 25 years ago, the giant Steep Rock Iron Mines of Atikokan shipped Iron Ore to the iron mills of North America.

The above parameters are sufficiently encouraging for Landore to advance the North Lamaune Iron Ore deposit towards resource status, with additional geophysical surveys, metallurgical and beneficiation testing being carried out in the first half of 2009 together with a substantial drilling campaign programmed to commence in July 2009.

Exploration

Carrot Top Zone

An exploration drilling campaign carried out in May/June 2008, consisting of 12 drill-holes, Diamond NQ core, for a total of 2,028 metres was completed on the Carrot Top and Zap Zones designed to further investigate the previous drilling.

Mineralized intersections included:

Drill-hole No	From Metres	Width Metres	Nickel %	Copper %	Platinum g/t	Palladium g/t	Cobalt %
1108-21	77.30	6.70	0.29	0.26	0.076	0.352	0.03
1108-24	185.20	18.30	0.34	0.32	0.038	0.206	0.03
1108-25	81.00	5.48	0.33	0.15	0.078	0.278	0.02
Including	84.60	0.32	1.29	0.16	0.133	1.064	0.12
1108-26	126.89	0.39	1.44	0.56	0.010	1.678	0.14

The results from the drilling campaigns completed to date show the Carrot Top Zone to have the potential to develop into a resource and therefore warrants follow up drilling.

Grassy Pond Zone

An exploration drilling campaign, consisting of eight drill-holes, Diamond NQ core, for a total of 1,034 metres, has been completed on the Grassy Pond Zone located approximately 3 kilometres to the north east of the B4-7 Nickel Copper PGE's deposit.

Highly anomalous results, including 0.7 metres at 0.39 per cent. nickel, 0.43 per cent. copper and 0.77grams/tonne gold in drill-hole 1108-30, are sufficiently encouraging to warrant follow up drilling.

B4-7 Deposit East Trend

An exploration drilling campaign, consisting of four drill-holes for 796 metres was completed in October 2008, on the 3 kilometre area between the VW Nickel Deposit and the B4-7 Nickel-Copper-PGE's Deposit. Highly anomalous results were sufficiently encouraging to warrant follow up drilling.

Environmental baseline studies

Golder Associates of Sudbury, Ontario, have continued with the environmental baseline studies programme initiated on the mining leases containing the VW and B4-7 Deposits in the winter of 2007.

Water surface monitoring of lakes and drainage tributaries within the vicinity of the Deposits have continued on a three monthly basis throughout the year. The area of influence has recently been expanded to include lakes and drainage further out from the leases.

Golders have also completed an 'Environmental Baseline Study' which included the following components:

• terrestrial field survey of the leases to ground-truth existing background information, identify plant communities, and make supplemental observations of wildlife and wildlife habitat;

• aquatic survey (fish community, fish habitat and associated habitat variability's) of selected water bodies within the leases; and

• preparation of the environmental baseline study report using all information obtained from the file review, consultants and field survey.

The above environmental and baseline studies are all pre requisite for permitting requirements for the development of the VW and the B4-7 Deposits.

Planned works 2009

VW Deposit

A drilling campaign consisting of three holes, for 1,500 metres, to test the down dip extension of the high grade Katrina Zone. Resource estimate upgrade.

B4-7 Deposit

A drilling campaign consisting of 16 holes, for 6,000 metres, to advance the deposit to 'Indicated' category and test the hanging wall zones. Resource estimate upgrade.

Iron Deposit

High resolution geophysical survey (helicopter airborne 'Impulse') over 8 kilometre Iron trend at 50 metre spacing. (Survey completed - awaiting interpretation).

Metallurgical and beneficiation testing. (In progress).

A drilling campaign, consisting of 20 holes for 8,000 metres, to advance the Iron Ore deposit towards an 'inferred' resource.

Exploration

Geophysical survey (helicopter airborne 'Aerotem') over the eastern third of the Junior Lake property. (Survey completed - awaiting interpretation).

A drilling campaign, consisting of 12 holes for 2,500 metres, to test the area between the VW and B4-7 Deposits.

LESSARD, COPPER-ZINC-SILVER PROJECT

The Lessard property, located approximately 107 kilometres north of the town of Chibougamau in the province of Quebec, comprises 111 claims for 2,277 hectares.

Lessard hosts a Copper-Zinc-Silver deposit with a historic resource reported in a feasibility study in 1975 by Selco Mining Corporation Ltd. The resource was not compliant with National Instrument 43-101.

In 2006 Landore completed a successful drilling campaign on the Lessard deposit to confirm the previous drilling results. An airborne geophysical survey was also completed over the entire property which highlighted possible strike extensions to the existing deposit and also developed new targets for follow up exploration.

A drilling campaign consisting of 25 NQ diamond drill holes, for a total of 9,581 metres, was completed in early 2008 on the Lessard deposit in order to provide closer spacing to enable a resource estimate and to target possible strike extensions of the existing deposit. 

Mineralised intersections included:

Drill-hole No	From Metres	Width Metres	Zinc %	Copper %	Silver gpt	Gold gpt
0908.11	175.0	9.0	4.94	1.47	24.9	0.44
including	179.0	3.0	0.93	2.63	41.2	0.58
including	183.0	1.0	15.04	1.27	26.3	0.26
0908.14	253.0	2.0	7.44	0.36	5.7	0.04
0908.18	317.0	2.0	5.97	1.16	19.3	0.14
0908.19	294.0	10.0	1.49	1.18	27.2	0.33
including	301.0	1.0	3.63	1.56	32.0	0.02
0908.21	166.5	0.5	5.70	3.88	60.0	0.13
0908.22	358.0	8.0	1.95	1.05	40.5	0.32
0908.27	432.0	2.3	7.60	0.41	23.0	0.27
0908.33	528.0	9.0	4.30	0.70	61.8	0.50
including	534.0	3.0	10.97	0.78	63.5	0.42

In September 2008 a Resource estimate, compliant to Canadian National Instrument 43-101 (NI 43-101) was completed on the Lessard deposit.

The Resource estimate reported 740,000 tonnes @ 1.88 per cent. copper, 3.50 per cent. zinc, 38.62 grams per tonne (g/t) silver and 0.84 g/t gold. using a net smelter return (NSR) value of US$206.52. All of the resource is in the 'Inferred' category. The Lessard deposit remains open down dip.

Further exploration to identify similar deposits on the property will be carried out during 2009.

MIMINISKA LAKE  -  FROND LAKE  - WOTTAM GOLD PROJECT

The Miminiska Lake property is located 115 kilometres to the east of Pickle Lake, Ontario and 180 kilometres to the southeast of the Placer Dome Musselwhite Mine and has a total area of 5,445 hectares.

Mineralization is hosted in iron formation in a similar setting to the Musselwhite gold deposit which has so far produced 2.17 million ounces with reserves currently estimated at over 1.77 million ounces.

Landore has completed four drilling campaigns between 2003 and 2005 on the Miminiska gold occurrence with 47 NQ diamond drill holes for 9,349 metres, focusing on two potential shoots within a known 800 metres strike length. Excellent results were received with grades reporting up to 131g/t gold over 0.5 metres and 40.2g/t over 2.3 metres.

No further work was carried out during 2008 whilst the Company focused all of its efforts on the Junior Lake and Lessard projects.

Due to the strong gold price Landore is currently conducting a study on the gold occurrence located on this property with the aim of recommencing exploration, including drilling, in the second half of 2009.

WEST GRAHAM/FIRST NICKEL OPTION - NICKEL

The West Graham property consists of one patented lot owned outright by Landore of 130 hectares, located in Northern Ontario, 17 kilometres from Sudbury on the southern rim of the Sudbury Intrusive Complex and contains the historic 'Conwest deposit'.

First Nickel Inc. entered into an option agreement in November 2005 with Landore to acquire a 70 per cent. interest in the West Graham property which is strategically located immediately to the south of the East Zone of First Nickel's Lockerby Mine. The agreement provides for First Nickel to make cash payments to Landore of C$150,000 and carry out exploration and development expenditures of C$6 million over a four-year period.

First Nickel announced in February 2009 the initial mineral resource estimate for the West Graham property, Conwest Zone located approximately 1.5 kilometres to the east of the #2 head-frame of First Nickel's Lockerby Mine.  

The Conwest Zone is near surface and contains in excess of 84 million pounds of nickel and 58 million pounds of copper within the in-situ Indicated Resource category. First Nickel is in the process of completing bench scale, metallurgical tests on the Conwest Zone and is investigating alternative processing and treatment options. Exploration will continue on the West Graham property in 2009, targeting the footwall lithologies to the south of the Conwest Zone.

OTHER PROPERTIES

The Company has other non-core exploration properties which includes grass roots exploration and defined drill targets. The Company is actively seeking joint venture partners for all these projects.

Consolidated income statement
for the year ended 31 December 2008

		Group 31 December 2008 £	Group 31 December 2007 £
Exploration costs (net)		(2,550,375)	(1,739,758)
Administrative expenses		(1,475,103)	(986,572)
Operating loss		(4,025,478)	(2,726,330)
Finance income		77,902	99,015
Loss before income tax		(3,947,576)	(2,627,315)
Income tax expense		--	--
Loss for the financial year		(3,947,576)	(2,627,315)
Attributable to:
Equity holders of the Company		(3,947,576)	(2,627,315)
Loss per share for losses attributable to the equity holders of the Company during the year
- basic		(0.028)	(0.023)
- diluted		(0.028)	(0.023)

The Group's operating loss relates to continuing operations.

consolidated balance sheet
at 31 December 2008

		Group At  31 December 2008 £	Group At  31 December 2007 £
Assets
Non current assets
Property, plant and equipment		99,201	96,852
		99,201	96,852
Current assets
Trade and other receivables		523,547	65,787
Cash and cash equivalents		2,882,283	480,184
		3,405,830	545,971
Total assets		3,505,031	642,823
Equity
Capital and reserves attributable to the
Company's equity holders
Share capital		1,811,992	1,218,328
Share premium		13,619,932	7,951,780
Share options		790,306	501,163
Warrants		143,659	43,571
Retained earnings		(13,198,046)	(9,446,194)
Cumulative translation adjustment		179,610	125,924
Total equity		3,347,453	394,572
Liabilities
Current liabilities
Trade payables		157,578	248,251
Total liabilities		157,578	248,251
Total equity and liabilities		3,505,031	642,823

Consolidated statement of changes in equity

for the year ended 31 December 2008

		Group 31 December 2008 £	Group 31 December 2007 £
Loss for the financial year		(3,947,576)	(2,627,315)
Translation adjustment on consolidation		53,686	(38,740)
Net loss		(3,893,890)	(2,666,055)
Issue of ordinary share capital		593,664	214,858
Share premium arising on issue		5,855,902	1,930,092
Issue costs		(187,750)	--
Issue of warrants		143,659	--
Issue of share options		441,296	111,960
Net increase/(decrease) in shareholders' funds		2,952,881	(409,145)
Opening shareholders' funds		394,572	803,717
Closing shareholders' funds		3,347,453	394,572

Consolidated cash flow statement
for the year ended 31 December 2008

		31 December 2008 £	31 December 2007 £
Cash flows from operating activities
Operating loss		(4,025,478)	(2,726,330)
Finance income		77,902	99,015
Depreciation of tangible fixed assets		30,682	23,200
Foreign exchange loss/(profit) on non-cash items		73,626	(130,495)
Share options		441,296	111,960
Warrants		143,659	--
Exploration expenditure (net)		2,550,375	1,739,758
Increase in debtors		(477,772)	(52,124)
(Decrease)/increase in creditors		(105,633)	145,096
Net cash outflow from operating activities		(1,291,343)	(789,920)
Cash flows from investing activities
Purchase of property, plant and equipment		(23,355)	(61,440)
Exploration expenditure (net)		(2,550,375)	(1,739,758)
		(2,573,730)	(1,801,198)
Cash flows from financing activities
Issue of ordinary share capital		6,449,566	2,144,950
Issue costs		(187,750)	--
		6,261,816	2,144,950
Net increase/(decrease) in cash and cash equivalents		2,396,743	(446,168)
Cash and cash equivalents at beginning of
financial year		480,184	845,704
Exchange gain on cash and cash equivalents		5,356	80,648
Cash and cash equivalents at end of financial year		2,882,283	480,184

  Accounting policies

Significant accounting policies

Statement of compliance

The financial statements have been prepared in accordance with those International Financial Reporting Standards ('IFRS') standards and International Financial Reporting Interpretations Committee ('IFRIC') interpretations issued and effective or issued and early adopted as at the time of preparing these financial statements (February 2009).

Basis of accounting

The financial statements have been prepared on the historical cost basis. The functional currency for the Group is considered to be UK Sterling. The principal accounting policies adopted are set out below.

The Directors consider the going concern basis of preparation to be appropriate as the Company has sufficient cash reserves to permit it to continue trading for a period of at least twelve months following the date of approval of these accounts.

Notes to the financial statements

1    Loss from operations

	2008 £	2007 £
Loss from operations is stated after charging/(crediting):
Depreciation of property, plant and equipment	30,682	23,200
Auditors' remuneration - audit services	30,467	24,550
Foreign exchange gain - Group	(5,354)	(80,050)
- Company	(816,799)	(448,787)

2    Taxation

With effect from 1 January 2008, Guernsey abolished the exempt company regime. The Company was therefore taxed at the company standard rate of 0 per cent. with effect from 1 January 2008. In the prior year the Company was exempt from taxation under the terms of The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 and was liable to pay an annual fee of £600.

The Company's subsidiary, Landore Resources Canada Inc., is subject to Canadian Federal tax. No tax has been provided in the accounts due to losses incurred by that company to date. That company has estimated non-capital losses of CA$3,770,000 as at 31 December 2008 which expire between 2008 and 2015. Landore Resources Canada Inc also has a subsidiary, Brancote US Inc, which is subject to taxation in the United States. This subsidiary has estimated non-capital losses of US$616,000 which expire between 2010 and 2020.

3    Mineral properties - Group

	1 January  2008 £	Net expense in the  period £	Accumulated expenditure at 31 December 2008 £
Miminiska Lake	1,131,777	2,747	1,134,524
Junior Lake	3,694,524	1,164,915	4,859,439
Frond Lake	67,686	2,233	69,919
Wottam	61,558	-	61,558
Lamaune Lake	301,139	864,420	1,165,559
Seeley Lake	89,086	-	-
Lessard	118,919	527,051	645,970
Other	31,752	(10,991)	20,761
	5,496,441	2,550,375	7,957,730

3.1    Miminiska Lake

Miminiska Lake, wholly owned by the Company, is a gold exploration project located approximately 115 kilometres east of Pickle Lake in Northern Ontario, Canada. The property consists of 28 patented and two staked claims.

3.2    Junior Lake

Junior Lake is a nickel, copper, platinum group metals and gold exploration project located approximately 250 kilometres north of Thunder Bay in Northern Ontario, Canada.

The property consists of two leased claims, wholly owned by the Company.

In addition, Junior Lake includes Auden, a nickel, copper, platinum group of metals and gold exploration project. The property consists of 44 staked mining claims surrounding the five Junior Lake leases and is wholly owned by the Company, except for five claims that are subject to a 2 per cent. net smelter return ('NSR').

3.3    Frond Lake

Frond Lake is a gold property located about 125 kilometres east of Pickle Lake in Northern Ontario, Canada. The property is comprised of 24 patented claims contiguous to the east of the Wottam property. On 22 December 2005, the Company purchased the property outright subject to underlying 2 per cent. NSR agreements.

3.4    Wottam

The Wottam property is a gold exploration project located 120 kilometres east of Pickle Lake in Northern Ontario, Canada. The property is wholly owned by the Company and includes 20 claims contiguous and between the Miminiska and Frond properties.

3.5    Lamaune Lake

Effective 5 September 2002, the Company entered into an Option Agreement relating to eight mining claims located near Lamaune Lake, Ontario. The Lamaune Lake property is contiguous with the Auden and Junior Lake property claims held by the Company. The Company earned 51 per cent. interest in the Lamaune Lake property and has the ability to earn a further 29 per cent. subject to the conditions set forth in the Option Agreement. 

In October 2008, the Company purchased the remaining 20 per cent. of the property for approximately C$460,000 and it is now wholly owned by the Company and 2 per cent. NSR given to holders of the 20 per cent. interest. 

3.6    Seeley Lake

Seeley Lake is an industrial minerals nepheline-syenite property, located 250 kilometres to the east of Thunder Bay, Ontario, on the north of Lake Superior. The property is comprised of 18 leased claims wholly owned by the Company. At December 2007, the Company underwent a review of the exploration results to date which determined that the results did not support further exploration expenditures in the foreseeable future and the exploration expenditures to date in the amount of C$191,106 were expensed in full.

3.7    Lessard

Lessard is a zinc, copper property comprised of 111 mining claims located approximately 107 kilometres north of the town of Chibougamau, in the province of Quebec, Canada. The property is wholly owned by the Company. In the current year, the Company has accrued for the recovery of mineral exploration costs for 2008 expenditures from the Quebec Government, in the amount of C$902,000 and recorded it in accounts receivable, with an offset to mineral properties.

3.8    Swole Lake

Included in other properties Swole Lake is a nickel, copper, platinum group element property comprised of one claim totalling 144 hectares, contiguous to the north of the Auden claims. The property was optioned from Stares Corp. on 19 June 2006. The Company can earn 100 per cent. interest in the property by making payments, aggregating C$50,000, of which C$30,000 has been paid to date. The property is subject to a 2 per cent. NSR.

3.9    West Graham

Included in other properties West Graham is a nickel, copper, platinum group metals property comprised of one patented claim wholly owned by the Company. The property is located 25 kilometres southwest of Sudbury and 1.5 kilometres east of the Lockerby nickel mine. On 21 November 2005, First Nickel Inc. optioned the property from the Company and, under the terms of an agreement, can earn 70 per cent. by making further payments and spending C$6 million in exploration costs over four years with the possibility of earning a further 15 per cent. interest subject to certain conditions.

4    Loss per share

The calculation of the basic loss per share is based on the loss for the financial year divided by the weighted average number of shares being 143,088,685 (2007: 115,006,332) in issue during the year.

The potential ordinary shares which arise as a result of the options in issue are not dilutive under the terms of IAS33 because they would reduce the loss per share. Accordingly there is no difference between the basic and dilutive loss per share.

5    Reconciliation of net cashflow to movement in net funds - Group

	2008 £	2007 £
Opening net funds	480,184	845,704
Increase/(decrease) in cash and cash equivalents	2,396,743	(446,170)
Net funds before foreign exchange	2,876,927	399,534
Exchange gains	5,356	80,650
Closing net funds	2,882,283	480,184

6    Analysis of net funds

	At  1 January 2008 £	Cashflow £	Exchange gains £	At  31 December 2008 £
Group
Cash and cash equivalents	480,184	2,396,743	5,356	2,882,283
Total	480,184	2,396,743	5,356	2,882,283
Company
Cash and cash equivalents	441,119	2,409,402	-	2,850,521
Total	441,119	2,409,402	-	2,850,521

7    Publication of non statutory accounts

The financial information set out in this preliminary announcement does not constitute statutory accounts.

The balance sheet at 31 December 2008 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Group's 2008 statutory financial statements upon which the auditors' opinion is unqualified.

8    Annual Report

The Annual Report for the year ended 31 December 2008 will be posted to shareholders today. The Annual General Meeting of the Company will be held at La Tonnelle House, Les Banques, St. Sampson, Guernsey, GY1 3HS on 24 June 2009 at 11.00 am. 

Copies of the report are available from the Company's registered office at P O Box 141, La Tonnelle House, Les Banques, St Sampson, Guernsey GY1 3HS and also from the Company's website www.landore.com.

 

END

 

 

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