Interim Results

Landore Resources Limited 04 September 2007 Landore Resources Limited ('Landore' or 'the Company') Interim Results MANAGEMENT DISCUSSION AND ANALYSIS FOR THE SIX MONTHS ENDED 30 JUNE 2007 General The following discussion of performance, financial condition and future prospects should be read in conjunction with the interim consolidated financial statements of the Company and notes thereto for the period from 1 January 2007 to 30 June 2007. All amounts are stated in sterling. Overview Landore Resources Limited is listed on the Alternative Investment Market in London, with the trading symbol of LND.L The Company is based in Guernsey in the Channel Islands and its operating subsidiary, Landore Resources Canada Inc. is engaged in the exploration and development of a portfolio of precious and base metal properties in North America. Financial Results The financial results for the six months to 30 June 2007 show a loss of £896,758 (2006: loss of £613,260). These results are in line with expectations and reflect the increased activity on the Junior Lake Nickel Project. During the six month period exploration costs were £695,346 and administrative expenses were £237,401. In April 2007 we were pleased to welcome the Consolidated Press Group (CPG) of Australia as a substantial shareholder. CPG subscribed for 17.5% of the equity by investing approximately £2.1 million at 10p per share. Mineral Exploration Activities The Group's exploration activities have been mainly focused on the Junior Lake Nickel project. In addition, exploration continues on the West Graham property by our joint venture partner, First Nickel Inc. The Junior Lake Project - Nickel Significant progress has been made on the Junior Lake Nickel Project during the period under review. The Junior Lake properties are located in the province of Ontario, approximately 235 kilometres north-northeast of Thunder Bay and are situated within the Caribou-O-Sullivan Greenstone Belt in the Wabigoon Subprovince. In April 2007 a 16,000 metre drilling programme commenced on the VW Zone. One drill has been dedicated to extending the existing inferred resources of 14,300 tonnes of nickel and the second drill has concentrated on infill drilling to advance the resource to 'Indicated' status. This drill programme has been very successful and is now nearing completion. The drilling has consistently intersected multiple and wide zones of resource grade nickel mineralization with assay results received to date returning grades in excess of 1% nickel. The zone remains open along strike and at depth. Full details of these results have been set out in press releases and can be viewed on the website www.landore.com The remaining drill results will be reported during September and October of this year. A new and increased resource calculation will be carried out by Scott Wilson RPA in November/December 2007 and reported to shareholders at that time. Further highlights include:- •A memorandum of understanding was signed earlier in the year with the First Nations, the traditional land users of this area, formalizing a process to establish and maintain a positive, mutually beneficial, relationship amongst all parties regarding exploration and advanced exploration activities on the Junior Lake Nickel Project. •Significant increases in the land holding took place in June/July whereby the claims were extended by almost 5 kilometres to the east and south covering the eastern strike extension of the VW Zone structure. The Junior Lake area properties now extend over a strike length of 28 kilometres. •Baseline studies and additional metallurgical studies have commenced in order to advance the VW Zone Project to feasibility stage. •A further drilling programme consisting of 3,600 metres is scheduled to commence on the adjacent B4-7 Zone nickel / copper / PGE deposit in mid September to advance this project to a scoping study. West Graham / First Nickel option - Nickel First Nickel entered into an option/joint venture agreement with Landore Resources Canada Inc. in November 2005 to acquire a 70% interest in the West Graham property which is strategically located immediately to the south of the East Zone of the Lockerby Mine. The West Graham property contains the historic Conwest Deposit which represents the up- plunge extension of First Nickel's Lockerby East Deposit. A resource estimate completed by the Conwest Exploration Company Limited in the 1960's yielded 4.3 million tons at 0.52% nickel and 0.33% copper. This resource should be considered non-compliant with National Instrument 43-101. In December 2006, First Nickel completed their second drilling programme on the West Graham Property, consisting of 21 diamond drill holes for a total of 9,731 metres. First Nickel's drilling programme was successful in discovering 'no Seeum' or low sulphide type platinum group element (PGE) mineralization. Drill highlights included: •71.50 metres of 0.51% Ni and 0.34% Cu including 4.80 metres of 1.04% Ni and 0.31% Cu •19.05 metres of 0.52% Ni and 0.38% Cu including 0.35 metres of 3.77% Ni A $600,000 exploration programme has been proposed for the West Graham Property in 2007. The exploration programme will consist primarily of an 8,000 metre infill drilling programme to generate a resource estimate for the Conwest Deposit. For further information on Landore and its projects please visit the Company's website www.landore.com Accounting Policies The Company has adopted accounting policies which are in line with International Financial Reporting Standards. A full set of these policies were included in the financial statements to 31 December 2006. Use of Financial Instruments The Company has not entered any specialised financial agreements to minimise its investment risk, currency risk or commodity risk. There are no off-balance sheet arrangements. The principal financial instruments affecting the Company's financial condition and results of operations is currently its cash and short-term money market investments. Forward Looking Statements The above contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world gold markets, equity markets, costs and supply of material relevant to the mining industry, change in government and changes to regulations affecting the mining industry. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Notes Six months Six months ended ended 30 June 2007 30 June 2006 £ £ Exploration costs 2 695,346 424,835 Administrative expenses 237,401 344,527 ------------ ------------ Operating loss 932,747 769,362 Finance income (35,989) (32,859) Other income 3 - (123,243) ------------ ------------ Loss before income tax 896,758 613,260 Income tax expense - - ------------ ------------ Loss for the period 896,758 613,260 ============ ============ Attributable to: Equity holders of the Company 896,758 613,260 ============ ============ Loss per share attributable to the equity holders of the Company during the year - basic 4 (£0.01) (£0.01) ------------ ------------ The Group's operating loss relates to continuing operations. UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2007 Six months Six months ended ended 30 June 2007 30 June 2006 £ £ Loss for the period (896,758) (613,260) Translation adjustment on consolidation (143,635) 9,742 ------------ ------------ Net loss recognised directly in equity (1,040,393) (603,518) Issue of ordinary share capital 212,857 - Share premium arising on issue of ordinary share capital 1,915,717 - ------------ ------------ Net increase/(decrease) in shareholders' funds 1,088,181 (603,518) Opening shareholders' funds at 1 January 2007 803,717 1,792,546 ------------ ------------ Closing shareholders' funds 1,891,898 1,189,028 ============ ============ UNAUDITED CONSOLIDATED BALANCE SHEET AS AT SIX MONTHS ENDED 30 JUNE 2007 Notes As at 30 June As at 30 June 2007 2006 £ £ Assets Non current assets Property, plant and equipment 78,611 62,126 -------- -------- 78,611 62,126 -------- -------- Current assets Trade and other receivables 57,269 44,088 Cash and cash equivalents 2,062,180 1,242,258 -------- -------- 2,119,449 1,286,346 -------- -------- Total assets 2,198,060 1,348,472 -------- -------- Equity Capital and reserves attributable to the Company's equity holders Share capital 5 1,216,327 930,033 Share premium 7,937,405 5,410,126 Share options 397,905 247,531 Warrants 43,571 43,571 Retained earnings (7,724,340) (5,474,597) Cumulative translation adjustment 21,030 32,364 -------- -------- Total equity 1,891,898 1,189,028 -------- -------- Liabilities Current liabilities Trade and other payables 306,162 159,444 -------- -------- 306,162 159,444 -------- -------- Total liabilities 306,162 159,444 -------- -------- Total equity and liabilities 2,198,060 1,348,472 ======== ======== UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Six months ended Six months ended 30 June 2007 30 June 2006 Notes £ £ Cash flows from operating activities Cash generated from 6 (901,399) (606,453) operations Cash flows from investing activities Purchases of property, plant and equipment 36,345 (9,667) -------- -------- (36,345) (9,667) Cash flows from financing activities Issue of ordinary 2,128,574 - share capital -------- -------- 2,128,574 - Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period 845,704 1,848,807 Exchange gains on cash and cash equivalents 25,646 9,571 --------- -------- Cash and cash equivalents at end of period 2,062,180 1,242,258 ========= ======== NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 ACCOUNTING POLICIES 1 Basis of accounting 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 (July 2007). The financial statements have not been audited and have been prepared on the historical cost basis. The principal accounting policies adopted are consistent with those adopted in the annual accounts to 31 December 2006. 2 Exploration expenditure and mineral properties Accumulated Expenditure in Accumulated expenditure period expenditure 1 January 2007 30 June 2007 £ £ £ Miminiska Lake 1,130,068 1,642 1,131,710 Junior Lake 1,911,884 675,115 2,586,999 Frond Lake 68,304 1,093 69,397 Wottam 61,558 - 61,558 Lamaune 299,479 1,598 301,077 Seeley Lake 86,663 824 87,487 Other 25,570 8,895 34,465 Lessard 173,157 6,179 179,336 ----------- --------- ---------- 3,756,683 695,346 4,452,029 =========== ========= ========== Mineral properties at 30 June 2007 represent accumulated costs to date incurred by Landore Resources Canada Inc., a subsidiary of Landore Resources Limited. On acquisition of Landore Resources Canada Inc. on 5 April 2006 the fair value of those costs incurred to date was considered to be £Nil. All subsequent expenditure in the period has been charged to the income statement in accordance with the group accounting policy. 3 Other income Other income represents income receivable from the sale of property and option payment income. 4 Loss per share The loss per share is based on the loss for the period and the weighted number of ordinary shares in issue during the period, being 108,767,790 (2006: 93,003,310). Diluted loss per share 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 not increase the loss per share. Accordingly there is no difference between the basic and dilutive loss per share. 5 Share capital 2007 £ Authorised: 250,000,000 ordinary shares of 1 pence each 2,500,000 ======== Issued: 121,632,798 ordinary shares of 1 pence each 1,216,327 ======== Ordinary shares 2007 £ Issued: At 1 January 2007 1,003,470 Issued in the year 212,857 -------- At 30 June 2007 1,216,327 ======== The company issued 21,285,740 ordinary shares of 1 pence each in the period for consideration of £2,128,574 on 19 April 2007. The premium on issue of £1,915,717 has been credited to the share premium account. 6 Cash generated from operations Six months Six months ended ended 30 June 2007 30 June 2006 £ £ Operating loss (896,758) (613,260) Depreciation of property, plant and equipment 9,526 9,632 Decrease in receivables (41,696) (19,990) Increase in payables 189,934 17,165 Foreign exchange (162,405) - ------------ ------------ Net cash outflow from operating activities (901,399) (606,453) ============ ============ This information is provided by RNS The company news service from the London Stock Exchange

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