Half Yearly Report

RNS Number : 2143V

Aurum Mining PLC

11 December 2013

 



AURUM MINING PLC

("Aurum" or "the Company")

Interim Results for the six months ended 30 September 2013

Aurum Mining plc (AIM: AUR), the gold and tungsten explorer focused in Spain, is pleased to announce its interim results for the six months ended 30 September 2013.

Contacts:
Aurum Mining plc	www.aurummining.net
Chris Eadie, Chief Executive Officer	[phone]
WH Ireland Limited
Nominated Adviser & Broker	www.wh-ireland.co.uk
Mike Coe	[phone]

Aurum Mining Plc

Review of Activities

Aurum Mining plc (AIM: AUR) is pleased to announce its interim results for the six months ended 30 September 2013.

The period under review has been one of restructuring and transformation for the Company as the Board adopts a strategy to ensure the Company can grow and develop despite the challenging market conditions that continue to impact the junior mining sector.

As outlined in the Company's 2013 Annual Report, which was published in June 2013, the prevailing market conditions have resulted in an extremely frustrating backdrop against which we operate. The Annual Report highlighted that the Board, in spite of the highly prospective nature of its gold and tungsten portfolio, did not  feel that it could continue to make sustained and meaningful progress across all four of its projects concurrently due to the lack of availability of commercial funding. Furthermore, the report outlined that the Board was in discussions with a number of parties about the different ways in which it could finance the drilling programme planned for the Morille tungsten project and, more generally, how it was looking at ways to finance its asset portfolio through strategic alliances or partnering arrangements.

Since the publication of the Annual Report, the Company has been proactive in pursuing these discussions on both the gold and tungsten assets and the Board was pleased to announce in October that it completed a deal with Plymouth Minerals Limited ("Plymouth") (ASX: PLH) in which Plymouth has become Aurum's partner on the Morille tungsten project. The Board feels that the 'farmout' deal negotiated with Plymouth enables the Company to benefit from the asset without having to seek additional funding. The deal provides Aurum with upfront cash, leaves the Company with meaningful residual carry in the project, and guarantees a healthy share of profits should Plymouth dispose of the project.

With the Morille project effectively 'spoken for', the key next step for the Company will be to build on all the successful exploration work done on the gold projects and to identify ways of driving the three projects forward in spite market of limited cash resources and the poor ongoing market sentiment towards junior gold explorers.

Morille tungsten project

As highlighted above, the Company was very pleased to have identified and completed a deal with Plymouth as the partner for Aurum on the Morille tungsten project.

The Board feels, in addition to the deal structure giving Aurum a sizeable carried interest in the project, Plymouth also has the necessary capital to drive the project forward and a management team who have the necessary skill set to deliver on the project and to therefore realise value from Aurum's residual stake in the project. Plymouth is looking to aggressively pursue its exploration programme at Morille, something that Aurum was not able to achieve given its current resources. The Board has, to date, been impressed by the energy and enthusiasm of Plymouth and looks forward to Plymouth creating value for Aurum's Shareholders as the project develops.

The key terms of Aurum's 'farmout' deal with Plymouth are as follows:

·     Plymouth paid Aurum €250,000 to acquire an 80% interest in the Morille project

·     In October 2014, Plymouth will issue Aurum shares in Plymouth with a value of €50,000.

·     Aurum will retain a 20% carried interest in the Morille project. Plymouth has

retained the right to acquire this 20% at any time for £2.5m.

·     Once a decision is reached to proceed with a mining project at Morille, Aurum can choose to dispose of its interest, fund its 20% percentage, or convert to a 0.5% net smelter return ("NSR").

·     Should Plymouth dispose of its interest in the Morille project within the first

24 months of owning it, Aurum will be eligible for a 30% share of Plymouth's

profit from the disposal.

Gold projects

Over the last couple of years, the joint venture between Ormonde Mining plc ("Ormonde") (AIM: ORM) and Aurum has made substantial progress on each of its three gold projects and has raised the prospect that the joint-venture could be on the brink of three considerable new gold discoveries in North West Spain. The near surface mineralisation identified at Peralonso and Cabeza is of particular interest as both have the potential for a high grade resource and for rapid and low cost development. The work carried out at Pino highlights that, as hoped, the project may have considerable scale.

All three gold projects are highly prospective and have clearly defined follow up targets for exploration drilling - as mentioned the Board is now looking at a number of options to facilitate the funding of these. The recent gold price has presented an additional short-term challenge for the joint venture to consider albeit that the medium term outlook for gold is still positive.

During the recent period, a majority of the exploration work has been carried out at the Cabeza de Caballo permit area ("Cabeza"), and this remains one of the key follow up targets for the joint venture. The Board very much hopes that a mechanism to fund exploration work at Cabeza and the other permit areas can be found quickly.

Initial exploration work at Cabeza has indicated it to be an exploration target of great promise and the Board is extremely optimistic about its potential. Soil geochemistry, prospecting, geophysics and trenching work carried out have all indicated that the permit area has the potential to host a large, previously unrecognised, near surface gold system but a comprehensive follow up drilling campaign is required. Float samples with gold values greater than 1 gram per tonne ("g/t") now occur over some 2.6km of strike length at Cabeza.

Trenches at Cabeza were excavated on a gold-in-soil anomaly which has a strike length of some 800 metres (NNE/SSW) at 50 parts per billion gold. The soil anomaly was defined following prospecting which had defined high grade gold values from float material (loose blocks) in an area of very poor bedrock outcrop.

The results from the initial trenching work at Cabeza also indicated the potential existence of not only large but also high grade mineralised structures at the permit area - highlights from this trenching work are set out below:

Trench CABTR006 encountered two main zones of veining and mineralization (19m and 30m wide respectively). Best intervals within the two mineralised zones included:

·     First zone: 4 metres grading 8.17 g/t and 1 metre grading 14.0 g/t gold;

·     Second zone: 1 metre grading 4.72 g/t, 11 metres grading 1.57 g/t and 5 metres grading 1.22 g/t gold. If zero gold grade is assigned to the intervals that were not sampled in this zone (total of 13 metres), then this gives an average grade of 0.97g/t gold over the 30 metre mineralised zone.

Trench CABTR006 was located approximately 90 metres south of Trench CABTR004 which returned a mineralised section 21 metres grading 3.71 g/t gold from a similar zone of quartz-sulphide veining.

The trenching identified steeply dipping zones of gold-bearing quartz veining within variably altered granites. In addition to the granite hosted mineralisation, CABTR006 has encountered gold in the surrounding metamorphosed sedimentary rocks.

Following on from these excellent trenching and prospecting results the joint venture commenced a drilling programme at the permit area during the period.

To date, four diamond holes have been drilled, over a total depth of 442 metres, to test for near-surface extensions to the gold mineralisation previously identified by the earlier exploration work.

Results have now been received for these initial four holes and the main conclusions from these results are as follows:

·       Wide gold-bearing intersections were identified in two of the first four holes drilled - best results were returned from hole CABDD002 with an interval of 24 metres grading 0.35 g/t gold (from surface) and from CABD004 which intersected 18 metres grading 0.22g/t.

·       All four holes encountered gold mineralisation within 100 metres of the surface.

·       Narrower, higher grade, intersections include 3m at 0.66g/t in CABDD003 and 1.15m grading 1.06 g/t in CABD004.

·       The mineralisation is associated with three distinct sets of quartz sulphide veining in a style consistent with an 'Intrusion-Related' gold mineralising system.

These are still very early days for the Cabeza drilling campaign and it is not possible to draw firm conclusions from the assay results received to date. Nonetheless, the Board is encouraged to see these wide gold-bearing intersections, and the key objective now is for the joint venture to identify a way of facilitating further drilling at Cabeza to determine where these wide mineralised zones carry higher grades of gold.

The Cabeza permit area is a large and highly prospective target with a number of high quality target areas for follow up work which the joint venture will explore over the next period. The Board is extremely optimistic about Cabeza's potential but is realistic about the existing opportunities to fund the project.

In conclusion, all three of the gold project merit comprehensive further exploration work, and even though Cabeza has been the focus of the recent period that the Board remains confident that resources will be identified to enable work to continue at all three sites.

Key financials

For the six months to 30 September 2013, the Group reported a loss of £259,000 compared to a loss of £255,000 for the same period in 2012.

Cash at the end of September 2013 was circa £269,000 (30 September 2012: £661,000).

In October 2013, the Group received gross proceeds of €250,000 from the disposal of a stake in the Morille tungsten project.

During this period of transition, cash management and cost control have remained key priorities for the Company.

Corporate

The Company has continued to work closely with Ormonde on the gold projects. The Board recognises the value of a joint venture with a Company who have a well-established footprint in Spain and a logistical strength from which the joint venture benefits.

The Board would also like to thank Desarrollo de Recursos Geológicos ("DRG"), the Company's Spanish consultants on the Morille tungsten project. In particular, DRG proved critical in assisting in the deal with Plymouth.

Qualified Person

Simon Beardsmore, BSc (Hons), ARSM, MIMMM, CEng, Technical Manager of Aurum Mining plc, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the London Stock Exchange, has reviewed and approved the technical information contained in this report.

Sean Finlay                                         Chris Eadie

Chairman                                             Chief Executive Officer

11 December 2013

Aurum Mining Plc

Consolidated Income Statement

For the six months ended 30 September 2013

		Six months to 30 September	Six months to 30 September	Year ended 31 March
		2013	2012	2013
		£'000	£'000	£'000
	Notes	Unaudited	Unaudited	Audited
Project pre-acquisition costs		-	-	(58)
Other administrative expenses		(263)	(256)	(641)
Administrative expenses		(263)	(256)	(699)
Operating loss		(263)	(256)	(699)
Finance income		4	1	9
Loss for the period/year before taxation		(259)	(255)	(690)
Taxation		-	-	-
Loss for the period/year attributable to equity shareholders of the parent company		(259)	(255)	(690)
Loss per share expressed in pence per share
Basic and Diluted	3	(0.18p)	(0.22p)	(0.55p)

Aurum Mining Plc

Consolidated Statement of Comprehensive Income

For the six months ended 30 September 2013

		Six months to 30 September	Six months to 30 September	Year ended 31 March
		2013	2012	2013
		£'000	£'000	£'000
		Unaudited	Unaudited	Audited
Loss after taxation for the period/year		(259)	(255)	(690)
Other comprehensive loss for the period/year		-	-	-
Total comprehensive loss for the period/year attributable to the equity shareholders of the parent company		(259)	(255)	(690)

 

Aurum Mining Plc

Consolidated Statement of Financial Position

As at 30 September 2013

		30 September	30 September	31 March
		2013	2012	2013
	Notes	£'000	£'000	£'000
		Unaudited	Unaudited	Audited
Assets
Non-current assets
Intangible assets	4	1,193	839	1,000
Property, plant and equipment		-	1	-
Total non-current assets		1,193	840	1,000
Current assets
Receivables		30	45	57
Cash and cash equivalents		269	661	698
Total current assets		299	706	755
Total assets		1,492	1,546	1,755
Liabilities
Current liabilities
Trade and other payables		95	112	99
Total current liabilities		95	112	99
Total liabilities		95	112	99
Total net assets		1,397	1,434	1,656

Capital and reserves attributable to the equity holders of the company
Share capital		1,413	1,182	1,413
Share premium		11,585	11,172	11,585
Retained deficit		(11,601)	(10,920)	(11,342)
Total equity		1,397	1,434	1,656

Aurum Mining plc

Consolidated Statement of Changes in Equity

For the six months ended 30 September 2013

	Share capital	Share premium	Retained deficit	Total equity
Unaudited	£'000	£'000	£'000	£'000
At 1 April 2013	1,413	11,585	(11,342)	1,656
Total comprehensive loss for the period	-	-	(259)	(259)
At 30 September 2013	1,413	11,585	(11,601)	1,397

For the six months ended 30 September 2012

	Share capital	Share premium	Retained deficit	Total equity
Unaudited	£'000	£'000	£'000	£'000
At 1 April 2012	1,182	11,172	(10,665)	1,689
Total comprehensive  loss for the period	-	-	(255)	(255)
At 30 September 2012	1,182	11,172	(10,920)	1,434

Aurum Mining plc

Consolidated Statement of Changes in Equity

For the year ended 31 March 2013

	Share capital	Share premium	Retained deficit	Total equity
Audited	£'000	£'000	£'000	£'000
At 1 April 2012	1,182	11,172	(10,665)	1,689
Total comprehensive loss for the period	-	-	(690)	(690)
Share based payments	-	-	13	13
Issue of shares (net of issue costs)	231	413	-	644
At 31 March 2013	1,413	11,585	(11,342)	1,656

The following describes the nature and purpose of each reserve within owners' equity.

Reserve	Description and purpose
Share capital	Amounts subscribed for share capital at nominal value.
Share premium	Amounts subscribed for share capital in excess of nominal value.
Retained deficit	Cumulative net gains and losses recognised in the income statement less distributions made.

Aurum Mining plc

Consolidated Cash Flow Statement

For the six months ended 30 September 2013

	Six months to 30 September	Six months   to 30 September	Year ended 31 March
	2013	2012	2013
	£'000	£'000	£'000
	Unaudited	Unaudited	Audited
Cash flow from operating activities
Loss for the period before tax	(259)	(255)	(690)
Adjustments for:
Depreciation of property, plant and equipment	-	-	1
Finance income	(4)	(1)	(9)
Share-based payments	-	-	13
Exchange differences	4	-	8
Cash flow used in operating activities before changes in working capital	(259)	(256)	(677)
Decrease  in other receivables	27	12	-
Decrease in trade and other payables	(4)	(9)	(22)
Net cash flow used in operating activities	(236)	(253)	(699)
Investing activities
Ormonde joint venture payments	(132)	(170)	(305)
Purchase of  Tungsten permits	(61)	(234)	(260)
Interest income	-	1	1
Net cash flow used in investing activities	(193)	(403)	(564)
Financing activities
Proceeds from issue of share capital	-	-	694
Expenses paid in connection with share issues	-	-	(50)
Net cash flow from financing activities	-	-	644
Net decrease in cash and cash equivalents	(429)	(656)	(619)

Cash and cash equivalents at the beginning of the period/year	698	1,317	1,317
Cash and cash equivalents at the end of the period/year	269	661	698

Aurum Mining Plc

Notes to the Consolidated Interim Financial Statements

For the half year ended 30 September 2013

1. Basis of preparation

The consolidated interim financial statements of Aurum Mining plc (the "Company") for the six months ended 30 September 2013 comprise the results of the Company and its subsidiaries (together referred to as the "Group"). The corresponding amounts are for the year ended 31 March 2013 and the six month period ended 30 September 2012.

These consolidated interim financial statements have been prepared in accordance with the rules of the London Stock Exchange for companies trading securities on AIM and on a basis consistent with the accounting policies and methods of computation as published by the Group in its Annual Report for the year ended 31 March 2013, which is available on the Company's website. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2013 Annual Report.

The financial information for the half years ended 30 September 2013 and 30 September 2012 is unaudited, and does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006. 

The Annual Financial Statements of Aurum Mining plc are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The comparative financial information for the year ended 31 March 2013 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2013 have been filed with the Registrar of Companies. The independent Auditors' Report on that Annual Report and Financial Statements for 2013 was unqualified, but did draw attention by way of emphasis, in respect of the Group's ability to continue as a going concern, but did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.

The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the Group's latest annual audited financial statements except that in the current financial year, the Group has adopted a number of revised Standards and Interpretations. However, none of these has had a material impact on the Group's reporting. In addition, the IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report.

The Group financial statements are presented in Great Britain Pounds Sterling and all values are rounded to the nearest thousand Pounds (£'000) except when otherwise indicated.

Consistent with the 2013 Annual Report the Directors continue to believe that despite very challenging market conditions, the Company and the Group have access to adequate resources to continue in operational existence for the next 12 months. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.

2. Changes in accounting policies

There were no changes in accounting policies during the six months ended 30 September 2013.

3. Loss per share

Basic loss per share is calculated by dividing the loss attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

For diluted loss per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. 

As at 30 September 2013 there were 4,450,000 (30 September 2012: 3,950,000, 31 March 2013: 4,450,000) potentially dilutive ordinary shares.

The effect of all potential ordinary shares arising from the exercise of options is anti-dilutive and therefore diluted loss per share has not been calculated.

	Six months to 30 September	Six months to  30 September	Year ended 31 March
	2013	2012	2013
	£'000	£'000	£'000
	Unaudited	Unaudited	Audited
Net loss attributable to equity holders of the  parent Company	(259)	(255)	(690)

	Six months to 30 September	Six months to 30 September	Year ended 31 March
	2013	2012	2013
	Unaudited	Unaudited	Audited
Weighted average number of shares:
Used in the Basic Loss per Share calculation	141,291,930	118,159,942	125,086,829
Effect of dilutive share options and warrants	-	-	-
Used in the Diluted Loss per share calculation	141,291,930	118,159,942	125,086,829

4. Intangible assets

	30 September	30 September	31 March
	2013	2012	2013
	£'000	£'000	£'000
Intangible assets	Unaudited	Unaudited	Audited
Gold exploration	872	605	740
Tungsten project	321	234	260
Total intangible assets	1,193	839	1,000

5. Farmout of stake in the Tungsten project

On 31 October 2013 the Company farmed out 80% of its stake in the Morille tungsten project to Plymouth for €250,000 payable in cash and ordinary shares in Plymouth with a value of €50,000. The full details of the transaction are included within the Review of Activities.

6. Events after the reporting period

Details of significant post reporting period events are included within the Review of Activities, and note 5 above.

 

END

 

 

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