Annual Report

RNS Number : 9562F

Ovoca Gold PLC

31 May 2013

 

Ovoca Gold plc

Annual Report 2012

Ovoca Gold plc ("Ovoca" or the "Company") is pleased to announce its Annual Report and Financial Statements for the year ended 31 December 2012, which has been posted to shareholders today. Please click on the following link to view the Annual Report and Financial Statements:

http://www.rns-pdf.londonstockexchange.com/rns/9562F_-2013-5-30.pdf

The Annual General Meeting will be held at Buswells Hotel, 23-25 Molesworth Street, Dublin 2 at 2.00 p.m. on Tuesday 25 June 2013.

Key points:

·        Reached agreement in December 2012 for the sale of the Olcha gold-silver deposit to Polymetal International plc for a consideration of 775,000 shares in Polymetal (which had a value of US$13.5 million as at the date of the agreement announcement). The transaction completed in January 2013

·        The Company reported a loss of €2.231 million (US$2.853 million) for 2012

·        Cash and cash equivalents and available for sale financial assets of €26.595million (US$35.144 million) as at 31 December 2012

·        Appointment of Kirill Golovanov as chief executive director. Former CEO Tim McCutcheon remained as a non-executive director with the Company

·        Commissioning of the new on-site processing facility at Stakhanovsky which allowed completion of bulk sampling programme at the site during the year

Operating statistics:

·        Over 22,000 tonnes of ore material processed at the new Stakhanovsky processing plant, with final samples sent to Alex Stewart Laboratories in Moscow for fire assay

·        Exploration work conducted on 5 prospective sites on the Rassoshinskaya licence area. Over 4,800 meters were drilled on Rassoshinskaya, with an additional 3,166 meters of trenching

Kirill Golovanov, CEO of Ovoca Gold commented:

"I am pleased to report that 2012 represented a year of continued progress for Ovoca. When I took over the CEO position in May 2012, my main task was to ensure nothing was overlooked or miscalculated during the crucial period of mobilization. I am therefore happy to report that in 2012 the Company was able to successfully complete its exploration and operational goals.

In 2012 Ovoca's main operational activity was focused on Stankhanovsky, where we were determined to finish what we started in 2011 and complete the geological exploration effort in order to attain the data needed to calculate an updated resource estimate beyond our initial estimate, which was announced at the beginning of 2011. A key event in achieving this was the commissioning of the on-site processing facility at Stakhanovsky. The work at Stakhanovsky was not easy, as the extreme seasonality of the site's location meant that all work in the field needed to be completed before temperatures turned consistently below zero (usually by late September). Despite the odds, the Ovoca team was able to successfully put the processing facility into operation, collect the necessary bulk samples and wrap-up the exploration program by the onset of winter.

We processed over 22,000 tonnes of ore material at our new processing plant and drilled 3,100 meters on Stakhanovsky to compliment past drilling and the bulk sample program. The high quality of our work on-site and full compliance with internationally accepted norms for QA/QC (quality assurance/quality control) were confirmed by our consultants, Wardell Armstrong International, in the fall of 2012. As a result of the work mentioned above, the Company collected a considerable amount of geological data for Stakhanovsky and the entire management team is eagerly awaiting the results of the resource calculation, which will play a decisive role in our decision on how to advance the asset.

Aside from Stakhanovsky, in April 2012 the Company successfully received an exploitation license for the Olcha gold deposit, a project Ovoca acquired in 2009 as part of the Rassoshinskaya license. In December 2012 the Company agreed to a transaction to sell Olcha to Polymetal International for a consideration of 775,000 shares of Polymetal (which had a market value of US$13.5 million at the time of the announcement) and which also allowed Ovoca to retain the vast majority of the Rassoshinskaya area. This transaction was a great success for the Company and demonstrated that our team is very adept at developing assets that have hidden value. Additionally, now that Polymetal is active on Olcha, which sits inside the rest of the Rassoshinskaya exploration license area, it seems to me that other targets such as Zet and Podgorniy could now be of greater interest to gold miners.  Ovoca is focusing on potential options to explore gold targets within 50km of Olcha, which could have the potential to become satellite deposits to the Olcha license now owned by Polymetal.

In 2012 Ovoca drilled a total of 4,859 meters throughout the Rassoshinskaya license area, as well as completing 3,166 meters of trenching. The final receipt and analysis of this data collection will guide the Company for the next stage of development at Rassoshinskaya.

With the benefit of our strong balance sheet, Ovoca is well placed to continue its exploration and development activities in 2013 and to potentially take advantage of further opportunities as and when they may arise. Ovoca remains well placed to outlast current market turbulence in the gold markets and I am very confident in the future of Ovoca, where I look forward to the task of further developing the Company."

Ovoca Gold Plc

Kirill Golovanov, CEO

 [phone]

Davy - NOMAD, ESM Adviser and Broker

John Frain / Daragh O'Reilly [phone]

 

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