Final Results

Sunrise Diamonds PLC 16 December 2005 SUNRISE DIAMONDS PLC ANNOUNCEMENT OF AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2005 Chairman's Statement I have great pleasure in presenting your Company's first Annual Report and Financial Statements for the period ended 30 September 2005 - a period of very pleasing progress. Foundations The foundations for the Company were laid when Tertiary Minerals plc ('Tertiary') initiated diamond exploration in the Kuusamo area of Finland in May 2004. This led to the discovery of two new kimberlites at Kalettomanpuro and Kattaisenvaara, in what is now known as the Kuusamo kimberlite cluster. Sunrise Diamonds plc ('Sunrise') was formed in February 2005 to continue this diamond exploration. After an oversubscribed entitlement issue to the shareholders of Tertiary and a subsequent placing, Sunrise was admitted to trading on the AIM market of the London Stock Exchange in June 2005. Exploration Success The Kuusamo kimberlite cluster sits centrally in the diamond prospective area of the Karelian Craton, a major geological block that includes the Russian diamond fields at Arkhangelsk where Alrosa is currently developing the world's second largest diamond mining complex. Since initiating exploration, in June 2005, Sunrise has made an early and highly significant breakthrough with the discovery of two further kimberlites at a third locality and the recovery of micro-diamonds from one of these kimberlites at Anomaly 45. This has vindicated the Company's exploration strategy by confirming the diamond prospectivity of the Kuusamo cluster that, until then, was only inferred from the favourable indicator mineral chemistry of the kimberlites. Sunrise's summer exploration campaign also included further kimberlite targeting and a programme of follow-up till-sampling which defined a number of exciting drill targets which are now being drill tested. I am confident that more kimberlite discoveries will be made in the Kuusamo area. BHP Billiton Database Acquisition A further exciting development has been the recent announcement of the acquisition from BHP Billiton of its entire diamond exploration database for Finland. This represents the results of over 6 years of exploration work in Finland by BHP Billiton subsidiary Dia Met Minerals Ltd and has an estimated replacement value of over US$10 million. This acquisition gives the Company a major leap forward in exploration, not only in the Kuusamo area, but elsewhere in the Karelian Craton of Finland where diamondiferous kimberlites are known to occur - for example, in the Kaavi-Kuopio area. The deal with BHP Billiton involves an issue of options to BHP Billiton and a first right of refusal on future project joint ventures or disposals and diamond marketing agreements. Strategy Exploration in Finland remains the Company's main focus, but during the reporting period several diamond project opportunities have been evaluated elsewhere in the world and the Company will continue to evaluate such projects if they have the potential to increase shareholder value. The diamond exploration business is heating up in Finland with progress being reported by a number of different companies and this is expected to increase investor focus on Finland in the coming months. Diamond Market The Company's activities are taking place against a background of strong demand and strong prices for rough diamonds. A shortage of 'rough' has led to significant price rises in recent years as a result of increased demand from China and India and a depletion of De Beers' traditional stockpiles. Results for the Period The Company is reporting a loss of £239,092 for the period. This comprises interest receipts of £7,675, administration expenses of £206,825 and reconnaissance expenses of £39,942. In Conclusion Your Company is now well positioned for further growth, with an experienced and enthusiastic Board and the management skills needed to unlock the value of the BHP Billiton exploration database and advance its diamond exploration projects in Finland. I look forward to reporting progress over the coming year. Patrick L. Cheetham 15 December 2005 Executive Chairman Further Information: Patrick Cheetham, Sunrise Diamonds plc. Tel: +44 (0)1625-505947. Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: +44 (0)20-7628-5518 Web-site: www.sunrisediamonds.com Sunrise Diamonds plc Profit and Loss Account for the period ended 30th September 2005 2005 £ Exploration costs written off 39,942 Administrative expenses 206,825 --------- Operating loss (246,767) Interest receivable 7,675 Loss on ordinary activities before taxation (239,092) --------- Tax on profit on ordinary activities - Loss for the period (239,092) --------- Loss per share - basic (pence) (0.45) --------- All amounts relate to continuing activities. There are no recognised gains and losses for the period other than those included in the profit and loss account. Sunrise Diamonds plc Balance Sheet as at 30th September 2005 2005 2005 £ £ Fixed assets Intangible assets 241,276 Current assets Debtors 50,008 Cash at bank and in hand 389,825 -------- 439,833 Creditors: amounts falling due within one year 87,311 -------- Net current assets 352,522 -------- Creditors: amounts falling due after more than one year - -------- Total assets less current liabilities 593,798 -------- Capital and reserves Called up share capital 75,375 Share premium account 757,515 Profit and loss account (239,092) -------- Shareholders funds 593,798 -------- Sunrise Diamonds plc Cash Flow Statement for the period ended 30th September 2005 2005 £ Net cash outflow from operating activities (209,464) Returns on investment and servicing of finance 7,675 Interest received -------- Net cash outflow from operating activities after returns on investments and servicing of finance (201,789) -------- Capital expenditure and financial investment Purchase of intangible fixed assets (241,276) -------- Net cash outflow from capital expenditure and financial investment (241,276) -------- Financing -------- Issue of share capital (net of expenses) 832,890 Exchange differences - -------- Net cash inflow from financing 832,890 -------- Increase in cash 389,825 -------- Notes: 1 Publication of Non-Statutory Accounts The financial information set out in this announcement does not constitute the Company's Statutory Accounts for the period ended 30 September 2005. The auditors have reported on the 2005 accounts; their report is unqualified and did not contain a statement under section 237 of the Companies Act 1985. The Statutory Accounts for 2005 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 2. Share capital 2005 2005 Number £ Authorised Ordinary shares of 0.1p each 2,000,000,000 2,000,000 Redeemable preference shares of £1 each 30,000 30,000 ---------- ----------- 2,000,030,000 2,030,000 ---------- ----------- Allotted, called up and fully paid Ordinary shares of 0.1p each 75,375,000 75,375 ---------- ----------- 75,375,000 75,375 ---------- ----------- During the period to 30 September 2005 the following share issues took place: An issue of two 1p ordinary shares on incorporation (14 February 2005) Sub-division of each 1p ordinary share into ten 0.1p ordinary shares (28 February 2005) An issue of 19,999,980 0.1p ordinary shares at 0.75p for a total consideration of £149,999.85 (28 February 2005) An issue of 30,000 £1 redeemable preference shares, quarter paid (4 March 2005). These were fully paid up and then redeemed at par on 18 May 2005. An issue of 40,000,000 0.1p ordinary shares at 1p per share for a total consideration of £400,000 (5 May 2005). A placement of 15,375,000 0.1p ordinary shares at 2p per share for a total consideration of £307,500 (6 June 2005). 3. Warrants granted Unexercised warrants Issue date Exercise price Number Exercisable Expiry dates 06/06/05 0.02p 4,500,000 Any time before 06/06/10 expiry 06/05/05 0.03p 7,687,500 Within 12 months at 06/06/10 0.03p, or 0.05p between 12 and 24 months at 0.05p Warrants are issued for nil consideration and are exercisable as shown. Warrants are exchangeable on a one for one basis for each ordinary share of 0.1p at the exercise price on the date of conversion. 4. Reconciliation of movement in shareholders' funds 2005 £ Loss for the period (239,092) Shares issued during the period 857,500 Expenses of equity share issues (24,610) ----------- Closing shareholders funds 593,798 ----------- 5. Reconciliation of operating loss to net cash outflow from operating activities 2005 £ Operating loss (246,767) Depreciation - Increase in debtors (50,008) Increase in creditors 87,311 ----------- Net cash outflow from operating activities (209,464) ----------- 6. Reconciliation of cash flow to movement in net funds Cash at bank and in hand Total £ £ Increase in cash in the period 389,825 389,825 Cash outflow from decrease in funds and lease - - financing Cash inflow from decrease in liquid resources - - ----------- ----------- Change in net funds resulting from cash flows 389,825 New finance leases - ----------- Movement in net funds in the period 389,825 ----------- 7. Post balance sheet event On 13 December 2005, as a result of the agreement reached with BHP Canada Diamonds Company, the Company issued a 5 year option to BHP Billiton World Exploration Inc to acquire 5 million Sunrise Diamonds shares at 5p each 8. Dividend No dividend is proposed 9. Annual Report The Company's 2005 Annual Report will be published and sent to shareholders in due course and copies will be available to the public, free of charge, from the Registered Office of the Company or from Sunrise Diamonds plc, Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP for at least 30 days from the date of publication. This information is provided by RNS The company news service from the London Stock Exchange

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