Final Results

RNS Number : 4168G

Landore Resources Limited

12 May 2011

 



Landore Resources Limited

("Landore" or "the Company")

 

Final results

for the year ended 31 December 2010

 

The Board of Landore is pleased to announce its audited results for the year to 31 December 2010.

Chairman's statement

The Group made excellent progress in the development of the Junior Lake iron and nickel projects during 2010. Full details of these projects are set out in the Operations report which follows.

Financial results

In the year ended 31 December 2010, the Group incurred a loss of £3,773,758 (2009: £3,801,114). This was in line with expectations and the direct exploration expenditure in the period was £2,653,910.

This expenditure has been largely funded with share placements in 2010 which raised approximately £3.84 million.

The Group 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 north-northeast of Thunder Bay in the province of Ontario and is highly prospective for numerous metals including; iron ore, nickel, copper, PGEs, gold, and lithium.

Lamaune Iron deposit: 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 Lamaune Iron deposit has the potential to be economically viable.

In October 2010, Landore Resources Canada Inc (Landore) completed its marketing and transportation study for Lamaune Iron and concluded that a potential market exists for iron pellets or iron nuggets in North America and that transportation of product to these markets, especially in southern Ontario, would be by direct rail.

In addition, Landore has recently staked a large area 25 kilometres to the east-northeast of the Lamaune Iron deposit. The new area, contiguous with the greater Junior Lake property, is host to a significant historic iron deposit, which, once developed, could substantially augment the existing Lamaune Iron deposit.

The Lamaune Iron deposit has significant potential value and will require independent management and funding. We are currently investigating the possibility of separating this asset into a new company for the benefit of all shareholders, who will be advised of the details in due course.

Lamaune Gold prospect: Independent studies have confirmed that the Lamaune Gold prospect has a potential size of a minimum forty thousand ounces of gold with metallurgical studies showing that the gold mineralisation is amenable to low cost heap leach processing and gravity separation. Due to the proximity of the Lamaune Gold prospect to the Lamaune Iron deposit, both deposits could be developed simultaneously with economic savings.

Junior Lake Nickel deposits: The combined resource of the VW and B4-7 Nickel deposits, delineated on the Junior Lake property to date, is in excess of forty eight thousand tonnes of nickel equivalent. We believe that the above tonnage needs to be 20 per cent. to 30 per cent. greater to make the project economically viable.

Accordingly, during 2010/11 Landore has focused its exploration effort towards the discovery of additional nickel mineralisation in the vicinity of the two main deposits.

Results from exploration drilling on the VW western extension zone, the B4-8 zone and the Swole Lake area, located just 5 kilometres to the north of the B4-7 deposit, are highly encouraging and are being followed up with further drilling at the time of this report.

Infrastructure: This multi-commodity asset benefits from pre-existing infrastructure. Access by good roads all year is a considerable advantage, as is the Canadian National Railway which runs within 13 kilometres of the property. This could provide economic transportation to the port facilities at Thunder Bay, as well as provide access to potential markets elsewhere in North America. In addition, there is plentiful water and also the potential to link into the planned hydropower by 2015.

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.

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 six 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 six properties in Eastern Canada, owned 100 per cent., of which Mount Fronsac is optioned to a third party. Landore also owns a 30 per cent. interest in the West Graham property currently being advanced by First Nickel Inc.

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.

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 Lamaune Iron deposit, the Lamaune Gold prospect, the VW Nickel deposit, the B4-7 Nickel-Copper deposit, and numerous other highly prospective mineral occurrences.

Land acquisition

Landore has staked an additional 17 mining claim blocks, for 3,383 hectares, to the east-northeast of the Lamaune area. The new area, north of Summit Lake and contiguous with the greater Junior Lake property, is host to a historic iron deposit delineated by a total of 15 drill holes for 1,738 metres.

Landore intends to conduct a helicopter-borne high resolution 'Impulse' geophysical survey over the Summit Lake anomaly and other potential areas in close proximity, after which three to four drill fences will be drilled along the anomaly to provide an estimate of the potential size and quality. This work is scheduled for completion in Q3 2011.

With the above acquisition, the Junior Lake property now extends for over 38 kilometres and covers an area of 35,699 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 gold 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 kilometres to the south providing direct transport access to both the nickel smelting centre of Sudbury and the port facilities at Thunder Bay. In addition, Junior Lake has abundant water resources nearby and is just 10 kilometres from the planned hydro-electric power station on the Little Jackfish River with the connecting and main transmission lines passing through the 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 economic significance. Accordingly, Landore initiated independent studies to provide an estimate of the potential size and quality of the Lamaune Iron deposit.

Potential size

In February 2010, an independent study was 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:

                            Cut-off                        Cumulative                     Average grade Fe

                         percentage                         tonnes                              percentage

                               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.

Test work

A test work programme 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 11.6 Mtpa 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.

Marketing and transportation study

In October 2010, Landore completed its marketing and transportation study for Lamaune Iron and concluded that a potential market exists for iron pellets or iron nuggets in North America and that transportation of product to these markets, especially in southern Ontario, would be by direct rail.

The market for the Lamaune Iron pellets are the 23 integrated steel mills in North America with a combined capacity of 69 million tons of annual steel production. These steel mills are predominantly located around the Great Lakes and managed by six corporations.

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

Planned

Landore intends to carry out a 30,000 metre in-fill drilling campaign on the 4.5 kilometre central section of the Lamaune Iron deposit to advance that section to a resource compliant with Canadian National Instrument 43-101 (NI 43-101), after which independent engineers will be engaged to commence actively marketing Lamaune Iron.

In addition, a geophysical survey (helicopter airborne 'Aerotem') over the newly acquired Summit Lake Iron deposit will be completed during Q3 2011.

Lamaune Gold prospect

In late 2008, a gold discovery was made on the Junior Lake property in the vicinity of the Lamaune Iron deposit.

A drill campaign, consisting of 75 drill holes for a total of 11,644 metres, was completed on Lamaune Gold in 2009/2010. Drilling intersected narrow vein high grade gold and wide zones of lower grade mineralisation.

The southern broad zone of gold mineralisation, frequently outcropping at surface, has so far been intersected over 500 metres of strike extent and has been drilled to a depth of 200 metres. The zone remains open at depth and to the east along strike.

Potential size

In Q3 2010, an independent geological consultant was contracted by Landore to review and prepare a three-dimensional model and conceptual mineral resource inventory for the Lamaune Gold prospect, based on the drilling data to date. This conceptual model defined an initial exploration target of 1,350,000 to 1,650,000 tonnes of mineralised material containing between forty to fifty thousand ounces of gold (oz-Au) at a cut-off grade of 0.3 grams per tonne (g/t).

The conceptual mineral resource inventory indicates that the Lamaune Gold prospect is a viable exploration target. Its proximity to the Lamaune Iron deposit has the distinct advantage that almost every drill hole intersects both deposits with resultant economic savings. Should they be advanced to development stage these savings will continue with the mining of both deposits simultaneously.

Landore has completed preliminary metallurgical testing of representative samples from the Lamaune Gold prospect which indicates that gold recovery from pulp material (-0.075mm) is 94.4 per cent. Petrographic analysis shows the gold to be "free gold" in the matrix of garnetiferous amphibolite. Metallurgical testing to date indicates the amenability of the low grade gold mineralisation 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.

Planned

Landore intends to carry out extension drilling on the Lamaune Gold prospect, in conjunction with infill drilling on the Lamaune Iron deposit, commencing in Q4 2011.

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.

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 2010, Landore has drilled 142 diamond NQ size holes for 35,339 metres on 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 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 remains 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 - PGEs 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 northwest 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.

The B4-7 deposit, so far delineated over 650 metres of strike, remains open to the east and west along and down plunge to the northwest. 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 remains 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.

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 stand at 48,281 tonnes of NiEq, 82 per cent. of which is in the Indicated category.

Exploration

Preliminary economic assessment work on the Junior Lake VW and B4-7 Nickel deposits indicate that additional tonnage of NiEq would be required to justify the construction of a stand-alone processing plant.

Accordingly, an extensive exploration programme was conducted during the summer of 2010 and the winter of 2010/11 to delineate potential extensions of the VW and B4-7 nickel deposits, to follow up on previously discovered zones of interest for gold and base metal mineralisation, as well as to identify prospective areas for nickel, lithium, and gold in other areas on the Junior Lake property. Exploration activities included field reconnaissance, geological mapping, trenching and sampling, as well as drilling.

VW-B4-7 trend

An exploration diamond drilling campaign consisting of 17 drill holes, for 3,663 metres, commenced in Q4 2010 to investigate the nickel potential west of the VW deposit to the B4-7 deposit. Drilling focused on an east-west trending geophysical anomaly extending between the two deposits, potentially related to the nickel-bearing geophysical anomalies of the VW and B4-7.

Drilling to-date has revealed several anomalous nickel intersections, including 3 metres at 0.23 per cent. Ni from drill hole 0411-294, and 2.5 metres at 0.39 per cent. Ni from drill hole 0411-288. Anomalous gold values were intersected as well, including 1.25 metres at 1.37 g/t gold from drill hole 0410-285, and 1.5 metres at 0.65 per cent. Cu and 0.22 g/t gold from drill-hole 0411-292. Further follow up drilling is warranted.

B4-8 zone

An exploration drilling campaign consisting of six diamond drill holes, for 1,347 metres, was carried out during Q1 2011 on the B4-8 geophysical conductor, in the vicinity and west of the B4-7 Nickel-Copper deposit. Highlights include 1 metre at 0.19 per cent. Ni, 0.52 per cent. Cu and 0.54 per cent. Zn from 0411-298, as well as 5.58 metres at 0.59 per cent. Ni and 0.29 per cent. Cu from 0411-301. Assay results for the remaining drill holes are pending. Preliminary findings are very prospective.

Swole Lake prospect

Historical work, together with mapping and sampling conducted by Landore in 2009 and 2010, identified the potential for lithium-bearing pegmatite and economic grades of nickel in the Swole Lake area, 4.8 kilometres north of the B4-7 Nickel-Copper deposit.

An exploration drilling campaign consisting of 10 drill holes, for 1,441 metres, was conducted during Q1 2011 to test for lithium-bearing pegmatite and nickel mineralisation hosted in adjacent mafic-ultramafic rocks. Assay results are pending.

Grassy Pond zone

An exploration campaign consisting of field reconnaissance, trenching and sampling was conducted during Q3 2010. Encouraging results from these activities prompted a drill campaign of 19 drill holes, for 2,765 metres, conducted during Q4 2010. The drilling targeted prospective geophysical conductors in the area. Highlights of the Fall 2010 drilling campaign include 1.5 metres at 0.74g/t Au from 0410-263, 1 metre at 1.56g/t Au from 0410-268, and 5.9 metres at 0.5 per cent. Cu from 0410-271. Further exploration eastward towards the B4-7 Nickel-Copper deposit is warranted.

Carrot Top zone

Six diamond drill holes and one drill hole extension, for 1,101 metres, were drilled on the Carrot Top zone to further investigate the high grade nickel intersected in the 2008 exploration drilling. Multiple narrow (<2 metre) zones of elevated nickel were intersected, including 0.88 metres at 0.47 per cent. Ni from drill-hole 1110-104, and 4.53 metres at 0.22 per cent. Ni and 0.19 per cent. Cu from drill hole 1110-102. In addition, 1.5 metres at 0.42 g/t Au was intersected in drill hole 1110-103. These findings further indicate the potential this area holds for economic mineralisation.

Toronto Lake area

Field reconnaissance, mapping and sampling were carried out to the east of the VW deposit in the Toronto Lake area. Grab sampling yielded several >1g/t Au values, the most promising of which being 71.69 g/t Au from a grab sample originating from a historical blast pit.

Encouraged by these results, Landore completed a trenching programme over the southern flank of Toronto Lake during Q3 2010. This programme, comprised of 18 trenches, extended over two sub-parallel zones of anomalous gold mineralisation less than 100 metres apart, with the northern zone being traced over a strike length of 600 metres. Several sawn channel samples from the zone graded over 1 g/t Au. Further exploration, including diamond drilling, is warranted to follow up on these encouraging results.

Tape Lake area

A field reconnaissance and sampling programme was conducted in the Tape Lake area, north of the Lamaune Iron and Gold deposits, during Q3 2010. Two granitic pegmatite dykes were located; grab samples taken from one of the pegmatite dykes returned values of 1.22 and 2.37 per cent. Lithium Oxide (Li₂O), respectively. Further exploration work in this area is warranted to follow up on these encouraging Li₂O results.

Planned

Results from the extensive exploration campaign completed during the past year have been highly successful. Drilling will re-commence on the B4-8 zone and the Swole Lake prospect in mid May 2011 to follow up on the encouraging results.

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 bi-annual basis during 2010 and 2011. The area of influence has recently been expanded to include lakes and drainage further out from the leases, including the Lamaune Iron area. The environmental and baseline studies are all pre-requisite for permitting requirements for the development of the VW, B4-7 and Lamaune Iron 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 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.

Landore is currently engaged in the necessary work requirements to bring the Lamaune Iron deposit claims to mining lease status in preparation for future development.

MIMINISKA LAKE - KEEZHIK LAKE 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 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 131 g/t gold over 0.5 metres and 40.2 g/t gold over 2.3 metres.

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 5.34 g/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.

Keezhik Lake property: Landore holds 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 southeast 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 kilometres to the northwest. 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.

No exploration was carried out on the Miminiska Lake and Keezhik Lake properties during this past year.

Planned: Reconnaissance, mapping and sampling are programmed to be carried out at Keezhik Lake during Q3 2011.

ROOT LAKE LITHIUM PROPERTY

The Root Lake Lithium property, 100 per cent. owned by Landore, is located approximately 300 kilometres northwest of Thunder Bay, and consists of 33 patented claims for a total of 513.43 hectares. It is host to the McCombe Pegmatite, which was initially 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 geological 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 2.3 million tonnes grading 1.3 per cent. Lithium Oxide (Li₂O) on the McCombe Pegmatite. (Mulligan1965). This resource is not compliant to NI 43-101.

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.

Planned: A drilling programme of 2,500 metres has been scheduled to commence in Q3 2011 to increase the confidence level, in-fill 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.

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. Cu, 3.50 per cent. Zn, 38.62 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 exploration was carried out on the Lessard property during this past year.

Planned: A field reconnaissance, mapping and sampling campaign is programmed for the Lessard property during Q4 2011.

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 has drilled and delineated a resource, NI 43-101 compliant, in excess of 84 million pounds of nickel and 58 million pounds of copper on the Conwest deposit, all in the Indicated Resource category.

In 2010, First Nickel earned 70 per cent. of the West Graham property as it successfully concluded Phase One of this agreement. Landore elected not to participate in a joint venture with First Nickel. As such, First Nickel has exercised the Phase Two Option of the agreement and has commenced a Feasibility Study on the property.

OTHER PROPERTIES

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

 

Consolidated statement of comprehensive loss

for the year ended 31 December 2010

		Group 31 December 2010 £	Group 31 December 2009 £
Exploration costs		(2,653,910)	(2,697,943)
Administrative expenses		(1,124,981)	(1,113,072)
Operating loss		(3,778,891)	(3,811,015)
Finance income		5,133	43,727
Loss before income tax		(3,773,758)	(3,767,288)
Income tax expense		-	(33,826)
Loss for the financial year		(3,773,758)	(3,801,114)
Other comprehensive (loss)/income:
Exchange difference on translating foreign operations		(29,475)	24,450
Other comprehensive (loss)/income for the year net of tax		(29,475)	24,450
Total comprehensive loss for year		(3,803,233)	(3,776,664)
Loss attributable to:
Equity holders of the Company		(3,773,758)	(3,801,114)
Total comprehensive loss attributable to:
Equity holders of the Company		(3,803,233)	(3,776,664)
Loss per share for losses attributable to the equity holders of the Company during the year
- basic		(0.017)	(0.021)
- diluted		(0.017)	(0.021)

The Group's operating loss relates to continuing operations.

 

Consolidated statement of financial position

at 31 December 2010

		Group At 31 December 2010 £	Group At 31 December 2009 £
Assets
Non current assets
Property, plant and equipment		119,862	120,370
		119,862	120,370
Current assets
Trade and other receivables		83,390	143,428
Cash and cash equivalents		782,959	792,584
		866,349	936,012
Total assets		986,211	1,056,382
Equity
Capital and reserves attributable to the Company's equity holders
Share capital		2,371,853	1,899,593
Share premium		17,951,320	14,691,157
Share options		834,958	860,880
Warrants		143,659	143,659
Retained earnings		(20,688,413)	(16,968,271)
Cumulative translation reserve		174,585	204,060
Total equity		787,962	831,078
Liabilities
Non current liabilities
Income tax liabilities		23,265	28,718
		23,265	28,718
Current liabilities
Trade and other payables		159,474	189,407
Income tax liabilities		15,510	7,179
		174,984	196,586
Total liabilities		198,249	225,304
Total equity and liabilities		986,211	1,056,382

 

Consolidated statement of changes in equity

for the year ended 31 December 2010

	Share capital £	Share premium £	Share options £	Warrants £	Retained earnings £	Cumulative translation reserve £	Total £
Balance at 1 January 2009	1,811,993	13,619,932	790,306	143,659	(13,198,047)	179,610	3,347,453
Loss for the financial year	-	-	-	-	(3,801,114)	-	(3,801,114)
Other comprehensive gains in the year	-	-	-	-	-	24,450	24,450
Issue of ordinary share capital	87,600	1,071,225	-	-	-	-	1,158,825
Share option adjustment	-	-	70,574	-	30,890	-	101,464
Balance at 31 December 2009	1,899,593	14,691,157	860,880	143,659	(16,968,271)	204,060	831,078
Balance at 1 January 2010	1,899,593	14,691,157	860,880	143,659	(16,968,271)	204,060	831,078
Loss for the financial year	-	-	-	-	(3,773,758)	-	(3,773,758)
Other comprehensive loss in the year	-	-	-	-	-	(29,475)	(29,475)
Issue of ordinary share capital (Note 12)	472,260	3,370,375	-	-	-	-	3,842,635
Issue cost (Note 12)	-	(110,212)	-	-	-	-	(110,212)
Share option adjustment (Note 13)	-	-	(25,922)	-	53,616	-	27,694
Balance at 31 December 2010	2,371,853	17,951,320	834,958	143,659	(20,688,413)	174,585	787,962

Consolidated statement of cash flows

for the year ended 31 December 2010

		Group 31 December 2010 £	Group 31 December 2009 £
Cash flows from operating activities
Operating loss		(3,778,891)	(3,811,015)
Finance income		5,133	43,727
Depreciation of tangible fixed assets		34,966	28,960
Foreign exchange gain on non-cash items		(32,248)	(486)
Decrease in debtors		60,038	380,119
(Decrease)/increase in creditors		(27,055)	31,829
Net cash outflow from operating activities		(3,738,057)	(3,326,866)
Cash flows from investing activities
Purchase of property, plant and equipment		(25,109)	(43,377)
		(25,109)	(43,377)
Cash flows from financing activities
Issue of ordinary share capital		3,842,635	1,158,825
Issue costs		(110,212)	-
Share options		27,694	101,465
		3,732,423	1,158,825
Net decrease in cash and cash equivalents		(3,049)	(2,109,955)
Cash and cash equivalents at beginning of financial year		792,584	2,882,284
Exchange (loss)/gain on cash and cash equivalents		(6,576)	20,225
Cash and cash equivalents at end of financial year		782,959	792,584

Notes to the financial statements

for the year ended 31 December 2010

1.       Mineral properties - Group

	1 January 2010 £	Net expense in the period £	Accumulated expenditure at 31 December 2010 £
Junior Lake	7,502,349	2,552,794	10,055,143
Lamaune Lake	1,172,288	-	1,172,288
Miminiska Lake	1,170,450	83,469	1,253,919
Frond Lake	72,043	466	72,509
Wottam	61,558	-	61,558
Lessard	643,710	7,273	650,983
Other	33,275	9,908	43,183
	10,655,673	2,653,910	13,309,583

1.1     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 five 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 120 staked mining claims surrounding the five Junior Lake leases and is wholly owned by the Company, except for eight claims that are subject to a 2 per cent. net smelter return ("NSR").

1.2     Lamaune Lake

Effective 5 September 2002, the Company entered into an Option Agreement relating to 18 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.

1.3     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.

1.4     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.

1.5     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.

1.6     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 is wholly owned by the Company.

1.7     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. The property is subject to a 2 per cent. NSR.

1.8     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.

2.       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 215,789,922 (2009: 182,916,757) 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 IAS 33 because they would reduce the loss per share. Accordingly there is no difference between the basic and dilutive loss per share.

3.       Analysis of net funds - Group

	At 1 January		Exchange	At 31 December
	2010	Cash flow	gains	2010
	£	£	£	£
Cash and cash equivalents	792,584	(3,049)	(6,576)	782,959
Total	792,584	(3,049)	(6,576)	782,959

4.       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.

Helen 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 £56,350 (2009: £45,860) in the period in respect of its role as administrators for the Company and Rysaffe was paid £10,000 (2009: £10,000) in respect of its role as Company Secretary. An amount of £7,610 (2009: £13,265) was owing to SCMIL at the year-end. The amount owing to Rysaffe at year end was £nil (2009: £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 (2009: C$30,000). At the year end, C$60,000 (2009: C$30,000) remains outstanding and has been included in trade payables. The equivalent sterling amount is £38,774.

On 9 April 2010, 2,000,000 shares were purchased at 11 pence per share by William Humphries, a Director of the Company. On 7 July 2010, a further 1,400,000 shares were purchased at 7.25 pence per share by William Humphries.

5.       Subsequent events

On 1^st February 2011 the Group issued 11,340,000 new ordinary shares of 1 pence at a price of 15 pence per share.

6.       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 2010 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Group's 2010 statutory financial statements upon which the auditors' opinion is unqualified.

7.       Annual Report

The Annual Report for the year ended 31 December 2010 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, 15 June 2011 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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