Final Results

RNS Number : 0421N

Landore Resources Limited

04 June 2010

 



Landore Resources Limited

("Landore" or "the Company")

 

Final results

for the year ended 31 December 2009

 

The Board of Landore is pleased to announce its audited results for the year to 31 December 2009.

 

Chairman's statement

Landore has made significant progress in the development of its mineral resources in Canada during 2009 with the primary focus being on the Junior Lake property.

Financial results

In the year ended 31 December 2009 the Group incurred a loss of £3,801,115 (2008: £3,947,576).  This was in line with expectations and the direct exploration expenditure in the period was £2,697,943.

This expenditure has been largely funded with two share placements, in December 2009 and more recently in April 2010, which raised a total of £2.2 million.

The Company has no debt but will need to raise further equity to carry out its development programmes as outlined.

The Junior Lake property

The property is situated 235 kilometres northeast of Thunder Bay in the province of Ontario and is highly prospective for numerous metals including; gold, copper, nickel PGEs and iron ore.

Landore's operations team has made excellent progress in the development of the Junior Lake Nickel and Iron projects during 2009. In addition they have discovered a significant gold occurrence, the Lamaune Gold prospect, close to the Iron Ore deposit. Full details of these projects are set out in the Operations report which follows. Highlights are:

Lamaune Gold: Drilling to date has delineated a wide gold mineralised zone over 500 metres of strike length and up to 200 metres depth. The zone remains open both to the east and west and down dip. Metallurgical studies have commenced to determine if the mineralisation is amenable to low cost heap leach processing.

As a result of the gold discovery Landore staked a large area of highly prospective land to the north and contiguous with Junior Lake. With the recent staking the property extends over 31 kilometres and covers an area of 31,953 hectares.

Lamaune Iron: Independent studies have confirmed that the Lamaune Iron deposit has a potential size of a minimum half a billion tonnes of iron ore.  These encouraging results together with positive metallurgical studies show that the deposit has the potential to be economically viable.  This would be a large project and requires further market research and significant investment for resource delineation and feasibility studies.

Junior Lake Nickel deposits: The VW and B4-7 deposits have had further exploration work and metallurgical studies carried out during the year. The results are attractive enough, together with the improved nickel price, to now move to scoping / pre-feasibility studies. In addition there is substantial exploration potential to increase the area of the nickel resource.

Infrastructure: A major advantage for a multi-commodity asset such as this is the benefit of pre-existing infrastructure. Access by good roads all year is a major plus and the Canadian National Railway runs within 13 kilometres of the property. This could provide economic transportation to the port facilities at Thunder Bay. In addition there is plentiful water and also the potential to link into the planned Hydropower by 2013.

We will continue with the exploration and development of the Junior Lake projects throughout the rest of this year and regular updates will be released to shareholders.

We are very fortunate that Andrew Cheatle has recently joined us as General Manager. Andrew is a very experienced executive geologist who came to us from AMEC Engineering and before that was Chief Geologist at Goldcorp's Musselwhite Mine for eight years. His skills are already making significant contribution.

Landore continues to maintain excellent relationships with the Whitesand and AZA First Nations on whose traditional land our Junior Lake property is located. We have now enjoyed four years of successful co-operation under our joint Memorandum of Understanding.

I would once again, like to thank the executive team and all of the staff at Thunder Bay and on site for their excellent performance this year.

William Humphries

Chairman

Operations report

Introduction

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

Landore owns or has the mineral rights to seven properties in Eastern Canada, owned 100 per cent., of which West Graham and Mount Fronsac are optioned to third parties.

Landore through its 100 per cent. owned subsidiary, Brancote US, owns or has the mineral rights to eight properties for 99 claims in the State of Nevada.

Landore's exploration focus is on the highly prospective Junior Lake property, Ontario. 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, 100 per cent. owned by Landore, is located in the province of Ontario, Canada, approximately 235 kilometres north-northeast of Thunder Bay and is host to; the recently discovered Lamaune Gold Prospect; the Lamaune Iron deposit; the VW Nickel deposit, the B4-7 Nickel-Copper deposit, and numerous other highly prospective mineral occurrences.

Land acquisition

Following the discovery of the Lamaune Gold prospect in October 2009, Landore staked an additional 80 Mining claim blocks, for 17,216 Hectares, predominantly to the north of the new gold discovery. The new area is believed to have similar Archean greenstone geology to that of the existing Junior Lake property and to be highly prospective for gold, nickel, copper, cobalt, lithium and platinum group elements.

With the above acquisitions, the Junior Lake property now extends for over 31 kilometres and covers an area of 31,953 hectares.

Infrastructure:

The city of Thunder Bay is located on the northern shore of Lake Superior and is the main supply hub for the mining centres of northern Ontario, including Red Lake, Pickle Lake, and the Musselwhite mine. It has extensive port facilities and an airport providing daily flights to major provincial cities, as well as a rail line that provides access to both eastern and western North American markets.

Access to Junior Lake from Thunder Bay is via a sealed highway for 235 kilometres to the town of Armstrong and then via a well maintained forest products unsealed road for 100 kilometres that runs to the property.

The Canadian National Railway runs parallel to the Junior Lake property 13/15 kilometres to the south providing direct transport access to both to the Nickel smelting centre of Sudbury and to the port facilities at Thunder Bay. In addition Junior Lake has abundant water resources nearby and is just 10 kilometres from the two planned hydro-electric power stations on the Little Jackfish River with the connecting and main transmission lines passing through the property.

Lamaune Gold prospect

A significant gold discovery has been made at the Junior Lake property in the vicinity of the Lamaune Iron deposit.

Drilling carried out during the 2008/9 campaigns on the Lamaune Iron deposit frequently intersected anomalous gold values, including drill-hole 1109-67 on the eastern end of the deposit, which intersected 5.88 metres at 2.36g/t Au, including 1.38 metres at 7.45g/t Au.

A subsequent geological review of all anomalous gold intercepts on Junior Lake, including historic showings, identified the zone around drill-hole 1109-67, now named the Lamaune Gold prospect, as being one of the more favourable areas for gold exploration.

In October, 2009, a small drilling campaign, consisting of 11 diamond core NQ drill holes, for a total of 1,798 metres, was completed over 200 metres of strike extent at the Lamaune Gold prospect.

The campaign confirmed the presence of gold mineralisation with the identification of two distinct zones; a southern wide, low grade gold zone and a northern narrow, high grade zone containing significant gold intersections.

Drilling re-commenced on the Lamaune Gold prospect in January 2010 and to date a further 41 drill-holes (1110-84 to 1110-130) have been completed for 6,082 metres.

The southern broad zone of gold mineralisation, frequently outcropping at surface, has now been intersected over 500 metres of strike extent and has been drilled to a depth of 200 metres. The zone remains open along strike in both directions and at depth.

Mineralised intersections in the broad zone include:

Drill-hole	From	Intersection	Gold
No	Metres	Metres	g/t
1109-83	57.50	21.50	0.99
1110-86	44.65	10.35	0.56
1110-88	123.00	10.50	0.44
1110-94	103.00	25.50	0.93
1110-95	52.50	10.50	0.99
1109-99	61.80	14.75	0.56
1110-100	90.96	12.44	0.56
1110-101	49.50	21.10	0.62
1110-108	142.50	21.00	0.58

The gold mineralisation is associated with quartz and quartz-carbonate veinlets, pyrrhotite and arsenopyrite in a silicified garnetiferous amphibolite host.

In addition a high grade quartz vein has been intersected in close proximity to the broad zone.

Mineralised intersections include:

Drill-hole	From	Intersection	Gold
No	Metres	Metres	g/t
1109-75	41.00	3.00	9.14
including	42.18	0.60	35.63
1109-82	88.63	0.50	53.12
1110-85	15.25	1.95	5.68
including	16.60	0.60	15.69
1110-88	73.80	0.60	118.66
1110-97	61.60	12.40	2.27
including	70.60	0.50	46.08

The mineralogy of the high grade quartz vein is simple and the gold occurs as 'native gold' with gangue of quartz, calcite and muscovite and sulphides, of arsenopyrite and pyrrhotite. Visible gold has been observed in 7 drill holes of the Lamaune Gold prospect and one on the Whale Zone prospect.

Recent drill results continue to be encouraging. Drilling is ongoing and further results are pending.

Metallurgical studies have commenced to determine the amenability of the low grade gold mineralization to heap leaching and the high grade to gravity separation. Both are simple and low capital cost extraction methods and could be advanced to production in a relatively short time period.

High grade gold was also encountered in the exploration drilling program completed this year on the area between the VW Nickel deposit and the B4-7 Nickel-Copper-Cobalt deposit, the 'Whale Zone', with drill hole 0409-252 intersecting 0.75 metres at 26.10g/t Au. This zone is 12 kilometres to the east of the Lamaune Gold prospect and runs parallel and adjacent to the BAM gold zone.

In addition, historical gold showings on the Junior Lake property include 1.02 metres at 2.37g/t Au drilled by Placer Dome in 1988 at the western end of the property and 3.0 metres at 13.44g/t Au in trench sampling recorded by the Ontario Department of Mines in 1968 at the eastern end of the property.

These significant results are the first to be reported from drilling in this part of the Caribou O'Sullivan Archean Greenstone Belt in which the Junior Lake property is located. The gold mineralisation itself is typical of mesothermal-shear hosted-vein deposits that are found in many major mining centres throughout the world.

Prospective geological structures can be traced over the entire Junior Lake property length and are associated with the geological terrain boundary between rocks of the Wabigoon and English River Subprovinces. Mineralised rocks are foliated/sheared metovolcanics and iron formations, often with the presence of large porphyroblastic garnets and quartz veins.

The highly encouraging drill results from the Lamaune Gold prospect together with the results from the geological review, the historical information and the favourable lithologies and geological structures support the potential for economic gold mineralization on the Junior Lake property.

Lamaune Iron deposit

In October 2008, Landore reported that exploration, including geophysical surveys, trenching and drilling, had identified the presence of a large magnetite iron deposit at the western end of the Junior Lake property.

Further exploration works during 2009, including a helicopter-borne high resolution 'Impulse' geophysical survey over 12 kilometres of potential strike, together with additional drilling and trenching, indicated that the deposit could be of economical significance.

Accordingly, Landore initiated independent studies to provide an estimate of the potential size and quality of the Lamaune Iron deposit.

Potential size

An independent study has recently been completed for Landore in order to determine the size of the exploration target of its Lamaune Iron prospect. The study was completed using advanced geophysical modelling of the high resolution, high quality geophysical data set acquired in 2009, measurements of core sample magnetism, field work and assay results. This work has identified an exploration target of:

	To 400 metres depth
	Cumulative	Average
Cut-Off %	tonnes	Grade Fe %
15	635,313,686	25.7
20	371,435,320	31.9
25	254,519,350	36.6
30	245,519,350	36.6

The potential quantity and grade expressed above is conceptual in nature and in order to define a mineral resource further drilling is required.

Landore has drilled 39 diamond drill holes to date, for a total of 6,690 metres, over 3.5 kilometres of the central core area and is continuing to advance the Lamaune Iron project through drilling that is simultaneously exploring the Junior Lake gold prospect, metallurgical test work and ongoing geological and geophysical modelling.

Test work

A test work program has been carried out to determine the physical and chemical characteristics of the magnetite ore samples supplied from the central zone of the ore body. Ten composite samples, selected from drill-holes spaced along the central 3.5 kilometre zone, were submitted for 'Davis Tube Recovery' (DTR) tests. The test determines the recovery and grade of the magnetic product that can be obtained through grinding and magnetic separation only.

The average grade of the submitted composite samples was 32.19 per cent. Fe. The average grade of the DTR tests results was 65.5 per cent. Fe with a weight to concentrate averaging 25.2 per cent.

Preliminary flotation tests have indicated success at reducing silica in the concentrate to acceptable levels and improving iron recoveries. The magnetic separation/flotation circuit is common in the iron mines of Minnesota and Northern Michigan. The flotation tests show that a 68 per cent. Fe, 4.5 per cent. SiO2, 0.3 per cent. S grade concentrate, at a 72 per cent. product weight recovery and 83 per cent. Fe yield could be achieved.

An estimated feed tonnage of 11.6Mtpa would be required to produce 2.5 Mtpa of iron pellets. Further flotation test work will be required to optimise this circuit but the initial test work yielded positive results and it is expected that a combined sulphur and silica flotation circuit will produce the final product grade at acceptable yields.

The iron formation outcrops at surface along the central 3.5 kilometre zone providing for a low stripping ratio of ore to waste with associated low mining costs.

Another significant advantage is that the Lamaune Iron deposit is just 13 kilometres from the Auden siding on the Canadian National Railway providing direct access to the port of Thunder Bay. The port still has much of the infrastructure used by Steep Rock Iron Mines to ship iron ore to the iron mills of North America.

The encouraging results from exploration works and the independent studies completed to date show that the Lamaune Iron deposit has the potential to be economically viable.

Landore is initiating an independent study to determine the work required to advance the Lamaune Gold prospect to resource status.

Junior Lake Nickel deposits

Landore is exploring the VW and B4-7 deposits with the ultimate aim of developing their reserves in parallel, subject to favourable mining economic studies.

Exploration and studies on these two deposits in 2009 concentrated on upgrading the existing resources on both the VW and the B4-7 deposits to allow scoping studies to commence. In addition exploration of the prospective Carrot Top prospect and the area between the VW and B4-7 deposits is ongoing.

VW Nickel Deposit

The VW Nickel deposit (VW deposit), discovered by Landore in late 2005, is located at Ketchikan Lake in the central part of the Junior Lake property and is Landore's most advanced project.

From 2005 to 2009, Landore has drilled 139 Diamond NQ size holes for 44,059 metres on the VW deposit.

In the 2009 drilling campaign, three holes for 1,350 metres were completed on the VW deposit testing the down dip extension of the higher grade Katrina Zone.

Results from the 2008/2009 drilling campaigns, show the down plunge of the Katrina Zone mineralisation on the western end of the VW deposit to be improving with depth further enhancing the underground mining potential. These results from the two campaigns have now been incorporated in the new resource estimate for the VW deposit.

In October 2009 a technical report on the Resource estimate upgrade on the VW deposit was completed. The report is compliant to Canadian National Instrument 43-101 (NI 43-101).

The resource estimate, using a Cut-off grade of 0.25 per cent. Nickel reported:

•         Indicated - 3.73 million tonnes at 0.49 per cent. Nickel Equivalent (NiEq).

•         Inferred - 0.72 million tonnes at 0.49 per cent. NiEq.

For a contained 21,760 tonnes NiEq.

84  per cent. of the resource is in the Indicated category. The resource remained open to the east and to the west as well as down dip.

Metallurgical studies completed in 2008 indicate the nickel concentrate grades and recoveries ranging from 14 per cent. Ni at 74 per cent. recovery to 10 per cent. Ni at 80 per cent. recovery are a reasonable representation of the expected plant recovery.

The VW deposit outcrops at surface with the upper 150 metres of the deposit being amenable to lower cost open pit mining. Below 150 metres the grade improves sufficiently on the main Katrina Zone for underground mining.

B4-7 Nickel-copper-cobalt-PGE deposit:

The B4-7 Nickel-copper-cobalt-PGEs deposit (B4-7 deposit), discovered by International Mogul Inc in 1969, is located approximately 3 kilometres to the north-west of the VW deposit and is Landore's second most advanced deposit.

From 2003 to 2009 Landore has drilled 89 Diamond NQ size holes for 19,794 metres on the B4‑7 deposit.

In 2009 an infill drill campaign, consisting of 42 NQ size holes for a total of 8,764 metres, was completed on the B4-7 deposit. The drilling was designed to provide sufficient information and drill density to advance the deposit to Indicated status.

The campaign intersected wide zones of mineralisation with assay results returning grades up to 3.11 per cent. Nickel together with substantial credits of copper, assaying up to 3.81 per cent., palladium up to 8.10 grams per tonne (g/t) and cobalt to 0.44 per cent. (9.5 pounds per tonne).

Mineralised intersections included:

Drill-hole	From	Width	Nickel	Copper	Cobalt	Platinum	Palladium
No	Metres	Metres	%	%	%	g/t	g/t
0409-201	266.80	15.40	0.78	0.67	0.04	0.13	0.61
0409-212	61.00	0.42	0.41	3.81	0.04	0.17	0.30
0409-215	57.20	0.47	0.53	0.21	0.06	0.20	8.10
and	105.80	15.65	0.64	0.61	0.09	0.27	0.82
0409-219	13.14	2.61	3.11	0.19	0.13	0.04	3.46
and	63.10	0.30	0.29	0.81	0.44	0.17	0.06
and	64.54	15.31	0.78	0.56	0.08	0.15	0.80
0409-221	252.14	22.86	0.81	0.53	0.07	0.14	0.41
0419-223	228.30	12.78	0.83	0.49	0.08	0.08	0.66
0419-233	66.98	14.84	0.48	0.49	0.05	0.01	0.07
0419-234	150.62	12.25	0.65	0.32	0.05	0.01	0.02
0419-235	87.97	10.89	0.65	0.28	0.05	0.26	0.64
0419-236	92.64	17.59	0.73	0.28	0.06	0.25	0.92
0409-243	24.89	14.71	0.79	0.32	0.05	0.18	0.43

The B4-7 deposit, so far delineated over 650 metres of strike, remains open to the west along and down plunge to the north-west. A previously completed airborne electromagnetic survey suggests the conductive horizon hosting the B4-7 deposit persists for an additional 500 metres to the west.

In February 2010 a technical report on the Resource estimate upgrade on the B4-7 deposit was completed. The report is compliant to NI 43-101.

The resource estimate, using a Cut-off grade of 0.25 per cent. nickel reported:

•         Indicated - 2.00 million tonnes at 1.06 per cent. Nickel Equivalent (NiEq).

•         Inferred - 0.61 million tonnes at 0.87 per cent. NiEq.

For a contained 26,521 tonnes NiEq.

80  per cent. of the resource is in the Indicated category. The resource remained open to the east and to the west as well as down dip.

Preliminary metallurgical studies completed in 2010 indicate the nickel concentrate grades and recoveries of 13.5 per cent. Ni at 53 per cent. recovery with 17 per cent. cu at 87 per cent. recovery is achievable. Marketable concentrate can be achieved with further processing stages to upgrade the nickel, copper and PGM content with the rejection of pyrrhotite.

Additional metallurgical studies will be carried out on both the VW and B4-7 deposits commencing Q4.

The B4-7 deposit also outcrops at surface with the upper 150 metres of the deposit being amenable to lower cost open pit mining. Below 150 metres the grade improves sufficiently for underground mining.

As a result of the above Resource estimates the combined resources of the VW and B4-7 deposits now stands at 48,281 tonnes of NiEq. 82  per cent. of which is in the Indicated category.

Landore intends to commence a Scoping study on the combined deposits in Q4 2010.

Exploration

Carrot Top zone: A 3000 metre exploration drilling campaign has commenced on the Carrot Top designed to further investigate the high grade nickel intersected in the 2008 exploration drilling.

B4-7 Deposit East trend:  An exploration drilling campaign, consisting of 9 drill-holes for 1,662 metres, was completed in October 2009 in the 3 kilometre area between the VW deposit and the B4-7 deposit.

Highly anomalous results, including 0.50 metres at 0.14 per cent. Ni and 2.23 per cent. Cu from drill-hole 0409-247 and 0.75 metres at 0.24 per cent. Ni and 26.1g/t gold from drill-hole 0409-252, are sufficiently encouraging to warrant follow up drilling.

B4-8 zone: A small exploration campaign consisting of two drill-holes for 381 metres, was completed in October 2009 on the B4-8 zone, located just to the south west of B4-7 deposit.

Results, including 1.73 metres at 0.41 per cent.Ni from Drill-hole 0409-253, are sufficiently encouraging to warrant follow up drilling.

Field reconnaissance, mapping and sampling was carried out to the east of the VW deposit in the recently acquired Toronto lake area where several prospective areas have been identified for both nickel and gold. In addition mapping and sampling was carried out on and to the west of the VW deposit.

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 tri-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.

•         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.

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 (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.

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

Planned works 2010

Lamaune Gold Prospect

•         Continue drilling for exploration, mapping and sampling of trenches exposed for the Iron Project.

•         Initiate an Independent study to determine the work required to advance the Lamaune Gold prospect to resource status.

•         Complete metallurgical studies for potential heap leach and gravity processing.

Lamaune Iron

•         Initiate market research for potential customers in the Great Lakes area.

Junior Lake Nickel projects

•         Commence Scoping study on combined VW and B4-7 deposits.

•         Commence further metallurgical studies on combined VW and B4-7 deposits ore.

Exploration

•         An extensive reconnaissance exploration programme commenced in May 2010 on the Toronto Lake area in the eastern section of the Junior Lake property and on the newly acquired area north of the Lamaune Iron/Gold projects, now designated the Swole lake area. Landore will have a minimum of three geological exploration teams covering these areas.

•         Geophysical survey (helicopter airborne 'Aerotem') over the newly acquired Swole Lake area, covering 17,216 hectares, to commence in the fall.

•         A drilling campaign, consisting of 1,500 metres, to test the area between the VW and B4‑7 deposits, the B4-7 deposit east trend, the B4-8 zone and other targets, to commence in Q3 2010.

MIMINISKA LAKE - FROND LAKE - WOTTAM GOLD PROPERTIES

Miminiska Lake property:

Landore's Miminiska Lake property, 100 per cent. owned by Landore, covers an area of 5,494 hectares and is located approximately 130 kilometres to the north of the Junior Lake property and 115 kilometres to the east of the Pickle Lake mining camp in the highly productive and prospective Uchi Belt.

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.

Miminiska Lake and Frond Lake are 12 kilometres apart, separated by Landore's relatively unexplored Wottam claims. Drilling and prospecting on the Wottam claims has identified similar geology to that of the two exploration targets giving Wottam the potential to host additional gold deposits.

An independent technical review was completed in 2009 on the Miminiska Lake property, which established the presence of two exploration targets:

•         Miminiska Lake - 232,000 tonnes at 5.62 g/t gold

•         Frond Lake - 271,000 tonnes at 5.10 g/t gold

for a total of 503,000 tonnes at 5.34g/t for 86,357 ounces of gold.

Both these exploration targets are open along strike and at depth and have good potential for expansion and upgrading to a mineral Resource.

A drilling programme of 1,500 metres has been scheduled to commence in Q3 of 2010 to increase the confidence level and to expand the exploration targets in addition to exploring the Wottam Lake Claims.

Keezhik Lake Property

Landore has staked an additional 41 mining claim blocks, for 9,472 hectares in the highly prospective Keezhik Lake area, located 20 kilometres north of Landore's Miminiska Lake property and 150 kilometres south east of Goldcorp's Musselwhite Gold mine.

The Keezhik Lake area is adjacent to the North-Caribou - Totogan Shear Zone that is also host to Goldcorp's Musselwhite Gold mine, located 150 kilometers to the north-west. The Musselwhite Gold mine has produced in excess of 2.5 million ounces with 2 million ounces of gold in mineral reserve. The new Keezhik Lake claims are also located in the highly productive and prospective Uchi Belt.

Reconnaissance, mapping and sampling is programmed to be carried out at Keezhik Lake when Landore is drilling at Miminiska in Q4 2010.

ROOT LAKE LITHIUM PROPERTY

The Root Lake Lithium property, 100 per cent. owned by Landore, is located approximately 300 kilometres north-west of Thunder Bay and is host to the McCombe Pegmatite containing a historic resource of 2.297 million tonnes grading 1.3 per cent. Lithium (Li2O)

Lithium, the lightest metal and the least dense solid element under standard conditions, has seen a steady growth in demand over the past 20 years accelerating in the past few years. Its applications include: medicine; high temperature lubricants; heat resistant glass; ceramics and most importantly in rechargeable batteries where the most rapid growth is now occurring.

The Property, consisting of 33 patented claims for a total of 513.43 hectares on which Landore owns both the mineral and surface rights, lies in the Red Lake Mining Division, 150 kilometres east of Red Lake and 130 kilometres north of Sioux Lookout. Access to the property is via Sioux Lookout using the well maintained Vermilion River and Rawhide unsealed roads, the latter transecting the north-eastern corner of the claims.

The McCombe Pegmatite was discovered by Capital Lithium Mines Ltd. in 1956 during an exploration boom for Lithium and is one of a number of rare-element pegmatites that occur over a 350 kilometres strike-length of the boundary zone between the Uchi and the English River sub-provinces, in the Superior Province of Ontario.

The McCombe Pegmatite, comprising two main spodumene-bearing dykes, has been traced on surface for a strike length of 550 metres with widths up to 19 metres.

Capital Lithium Mines Ltd. completed a diamond drilling programme on the Root Lake Property in 1956, consisting of 55 drill-holes for 10,442 metres, establishing a resource of 2.297 million tonnes grading 1.3 per cent. Lithium (Li2O) on the McCombe Pegmatite. (Mulligan 1965). The above resource is not compliant to NI 43-101.

Spodumene and lepidolite were reported to be common in the pegmatite. Tourmaline, beryl, holmquisite, columbite-tantalite, and petalite were found in small portions.

The McCombe Pegmatite is also important as it contains the extremely rare mineral Liddicoatite (Tindle 2005) which has the potential to be used as a gemstone (similar to Topaz).

An independent technical review was completed in February 2010 on the Root Lake lithium property which confirmed the presence of an exploration target of approximate size and grade similar to the historic resource.

A drilling programme of 1,500 metres has been scheduled to commence in Q3 2010 to increase the confidence level, infill and to expand the McCombe exploration target.

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 to NI 43-101.

In 2006 and 2008 Landore completed successful drilling campaigns, consisting of 38 diamond NQ drill-holes for 12,368 metres on the Lessard deposit. 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.

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

The resource estimate reported 740,000 tonnes at 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.

No work was carried out on the Lessard property in 2009 and none is programmed for 2010 due to Landore concentrating on the highly prospective Junior Lake property.

WEST GRAHAM/FIRST NICKEL OPTION

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. Exploration continued on the West Graham property in 2009, targeting the footwall lithologies to the south of the Conwest zone.

OTHER PROPERTIES

Landore 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 statement of comprehensive income

for the year ended 31 December 2009

		Group	Group
		31 December	31 December
		2009	2008
		£	£
Exploration costs		(2,697,943) (1,113,073)	(2,550,375) (1,475,103)
Administrative expenses
Operating loss		(3,811,016)	(4,025,478)
Finance income		43,727	77,902
Loss before income tax		(3,767,289)	(3,947,576)
Income tax expense		(33,826)	-
Loss for the financial year		(3,801,115)	(3,947,576)
Other comprehensive income:
Exchange difference on translating foreign operations		24,450	53,686
Other comprehensive income for the year net of tax		24,450	53,686
Total comprehensive loss for year		(3,776,665)	(3,893,890)
Loss attributable to:
Equity holders of the Company		(3,801,115)	(3,947,576)
Total comprehensive loss attributable to:
Equity holders of the Company		(3,776,665)	(3,893,890)
Loss per share for losses attributable to the equity
holders of the Company during the year
- basic		(0.021)	(0.028)
- diluted		(0.021)	(0.028)

The Group's operating loss relates to continuing operations.

Consolidated statement of financial position

at 31 December 2009

		Group	Group
		31 December	31 December
		2009	2008
		£	£
Assets
Non current assets
Property, plant and equipment		120,370	99,201
		120,370	99,201
Current assets
Trade and other receivables		143,428	523,547
Cash and cash equivalents		792,583	2,882,283
		936,011	3,405,830
Total assets		1,056,381	3,505,031
Equity
Capital and reserves attributable to the
Company's equity holders
Share capital		1,899,592	1,811,992
Share premium		14,691,157	13,619,932
Share options		860,880	790,306
Warrants		143,659	143,659
Retained earnings		(16,968,271)	(13,198,046)
Cumulative translation adjustment		204,060	179,610
Total equity		831,077	3,347,453
Liabilities
Non current liabilities
Income tax liabilities		28,718	-
		28,718	-
Current liabilities
Trade and other payables		189,407	157,578
Income tax liabilities		7,179	-
		196,586	157,578
Total liabilities		225,304	157,578
Total equity and liabilities		1,056,381	3,505,031

Consolidated statement of changes in equity

for the year ended 31 December 2009

	Group	Group
	31 December	31 December
	2009	2008
	£	£
Loss for the financial year	(3,801,115)	(3,947,576)
Other comprehensive loss for the financial year	24,450	53,686
Total comprehensive loss for the financial year	(3,776,665)	(3,893,890)
Issue of ordinary share capital	87,600	593,664
Share premium arising on issue	1,071,225	5,855,902
Issue costs	-	(187,750)
Issue of warrants	-	143,659
Issue of share options	101,464	441,296
Net (decrease)/increase in shareholders' funds	(2,516,376)	2,952,881
Opening shareholders' funds	3,347,453	394,572
Closing shareholders' funds	831,077	3,347,453

Consolidated statement of cash flows

for the year ended 31 December 2009

		Group	Group
		31 December	31 December
		2009	2008
		£	£
Cash flows from operating activities
Operating loss		(3,811,016)	(4,025,478)
Finance income		43,727	77,902
Depreciation of tangible fixed assets		28,960	30,682
Foreign exchange (profit)/loss on non-cash items		(486)	73,626
Share options		101,464	441,296
Warrants		-	143,659
Exploration expenditure		2,697,943	2,550,375
Decrease/(increase) in debtors		380,119	(477,772)
Increase/(decrease) in creditors		31,829	(105,633)
Net cash outflow from operating activities		(527,460)	(1,291,343)
Cash flows from investing activities
Purchase of property, plant and equipment		(43,377)	(23,355)
Exploration expenditure		(2,697,943)	(2,550,375)
		(2,741,320)	(2,573,730)
Cash flows from financing activities
Issue of ordinary share capital		1,158,825	6,449,566
Issue costs		-	(187,750)
		1,158,825	6,261,816
Net (decrease)/increase in cash and cash equivalents		(2,109,955)	2,396,743
Cash and cash equivalents at beginning of financial year		2,882,283	480,184
Exchange gain on cash and cash equivalents		20,255	5,356
Cash and cash equivalents at end of financial year		792,583	2,882,283

Accounting policies

Significant accounting policies

Statement of compliance

The consolidated financial statements have been prepared in accordance with those International Financial Reporting Standards ("IFRS") 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 (March 2010).

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.

As described in the subsequent events, the Group has raised funding after the year end that strengthens the existing funds. On this basis the Directors have a reasonable expectation that the company has adequate resources to continue trading for a period of at least twelve months following the date of approval of these accounts. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

 

Notes to the financial statements

for the year ended 31 December 2009

1.       Loss from operations
	2009	2008
	£	£
Loss from operations is stated after charging/(crediting):
Depreciation of property, plant and equipment	28,960	30,682
Auditors' remuneration - audit services	21,530	30,467
Auditors' remuneration - services relating to taxation	4,155	6,055
Non cancellable operating leases	27,999	-
Foreign exchange gain - Group	(20,255)	(5,354)
Foreign exchange gain - Company	(448,352)	(816,799)

2.       Mineral properties - Group

			Accumulated
		Net expense	expenditure at
	1 January	in the	31 December
	2009	period	2009
	£	£	£
Junior Lake	4,859,439	2,642,910	7,502,349
Lamaune Lake	1,165,559	6,729	1,172,288
Miminiska Lake	1,134,524	35,926	1,170,450
Frond Lake	69,919	2,124	72,043
Wottam	61,558	-	61,558
Lessard	645,970	(2,260)	643,710
Other	20,761	12,514	33,275
	7,957,730	2,697,943	10,655,673

3.       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 182,916,757 (2008: 143,088,685) 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.

4.       Reconciliation of net cash flow to movement in net funds - Group

	2009	2008
	£	£
Opening net funds	2,882,283	480,184
(Decrease)/increase in cash and cash equivalents	(2,109,955)	2,396,743
Net funds before foreign exchange	772,328	2,876,927
Exchange gains	20,255	5,356
Closing net funds	792,583	2,882,283

5.       Analysis of net funds

	At 1 January		Exchange	At 31 December
	2009	Cash flow	gains	2009
	£	£	£	£
Cash and cash equivalents	2,882,283	(2,109,955)	20,255	792,583
Total	2,882,283	(2,109,955)	20,255	792,583

6.       Related party transactions

Advances were received by Landore Resources Canada Inc. from Landore Resources Limited. These were unsecured, non interest bearing and repayable on demand.

Mrs H F Green, a Director of the Company, is also a director of Saffery Champness Management International Limited ("SCMIL") and Rysaffe International Services Limited ("Rysaffe"). SCMIL were paid £45,860 (2008: £59,301) in the period in respect of its role as administrators for the Company and Rysaffe was paid £10,000 (2008: £10,000) in respect of its role as Company Secretary. £13,265 (2008: £15,930) was owing to SCMIL at the year end. The Amount owing to Rysaffe at year end was £nil (2008: £nil). All transactions are at market value.

Landore Resources Canada Inc paid management fees to a Director of the Company in the amount of C$30,000 (2008: C$30,000). At the year end, C$30,000 (2008: C$30,000) remains outstanding and has been included in trade payables. The equivalent sterling amount is £17,948.

On 6 November 2009, 715,000 shares were granted to William Humphries, a Director of the Company, at market value for 14 pence per share.

On 8 June 2009 James Garber, a director of the company who resigned on 23 January 2009, exercised 200,000 share options granted to him on 6 April 2005. The closing market price of the Group's shares on this day was 9.10 pence.

Other share options granted to and exercised by the Directors in the year are disclosed in the Directors' report.

7.       Subsequent events

On 7 April 2010 the Group issued 11,200,000 new ordinary shares of 1 pence at a price of 11 pence per share.

8.       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 2009 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Group's 2009 statutory financial statements upon which the auditors' opinion is unqualified.

9.       Annual Report

The Annual Report for the year ended 31 December 2009 will be posted to shareholders today. The Annual General Meeting of the Company will be held at The Cavalry & Guards Club, 127 Piccadilly, London W1V 0PX on Wednesday, 30 June 2010 at 12.30 pm.

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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