Interim Results

RNS Number : 0799J

Goldstone Resources Ltd

27 November 2008

 



GOLDSTONE RESOURCES LIMITED

('GoldStone' or the 'Company')

Interim Results

Chief Executive's Report

I am setting out below a review of GoldStone's activities during the six months ended 31 August 2008 which incorporates an update on the current status of the Company's projects.

BAUXITE

Detailed sampling was undertaken during the first quarter of 2007 by BHP Billiton on the Company's bauxite interests in Guyana, South America. During July 2007 BHP Billiton elected not to exercise its option over the bauxite interests and subsequently made available to the Company all information in its possession relating to the exploration programme, as well as a summarising geological report. GoldStone, after a thorough review of all the BHP Billiton information, exercised its right to apply for eleven prospecting licences within the area of the reconnaissance permission. The applications are currently being processed by the Guyanese Geological Mining Commission.

The Company has recently accompanied a major producer in the bauxite industry on an on-site review of the project and is in continuing discussions with the objective of commercialising these interests. 

DR3-EAST URANIUM PROJECT

During June 2008 GoldStone conditionally agreed to acquire up to a 100 per cent. interest in a uranium exploration project owned by Hymrai Properties 1 (Pty) Ltd ('Hymrai') which is known as the DR3-East Uranium Project (the 'Acquisition').

The area held under the prospecting permit occupies 43 km2 and is approximately 200 km west of Areva's Ryst Kuil uranium deposit and approximately 50 km north of the town of Laingsburg in the Western Cape Province of South Africa.

An examination of historical exploration data from the areas held under this exploration permit has been completed by the Company and will be independently reviewed in a SAMREC compliant Competent Person's Report which is required to support GoldStone's application for the listing of its ordinary shares on the Alt-X stock exchange of the Johannesburg Stock Exchange ('ALTX').

The DR3-East Permit Area contains several outcropping uranium occurrences. GoldStone carried out a limited reverse circulation drill programme during October 2008 by drilling ten holes sited over two of these occurrences. The depths of the drill holes ranged from 14 metres to 55 metres. Preliminary field testing of the drill cuttings with a spectrometer demonstrated that the outcropping mineralisation extends underground at both locations. The assay results are still pending and a down hole radiometric survey will be undertaken in the future.

The style of the uranium mineralisation at Ryst Kuil and DR-3 East is similar and Areva's publicised intentions to place Ryst Kuil into production, demonstrate that the Karoo uranium belt holds the potential to host economically viable uranium deposits.

The Acquisition comprised the conditional purchase of the entire issued share capital and loan accounts of Hymrai from two different classes of vendors. A Black Economic Empowerment company, Obeec (Pty) Ltd (the 'BEE Vendor'), holds 26 per cent. of the share capital of Hymrai in accordance with the policy of the Department of Minerals and Energy ('DME') of South Africa. The remaining 74 per cent. of the share capital is held by various different private entities (the 'Non-BEE Vendors'). The BEE Vendor has been unable to obtain the requisite Section 11 approval from the DME for the sale of its 26 per cent. shareholding in Hymrai, within the time limits set by the Acquisition agreement. Therefore the transaction is proceeding in respect of the remaining 74 per cent. shareholding of the Non-BEE Vendors. Completion of the transaction with Hymrai is pending certain approvals by the DME in respect of the remaining 74 per cent., as well as the listing of GoldStone on the ALTX Stock Exchange.

GOLD

Since March 2008 the Board has focused particularly on palaeoplacer and hydrothermal gold prospects, in order to leverage the Company's expertise in this field. The Company has consequently been assessing and reviewing international opportunities in this field.

Positive results of research completed into the prospectivity, political stability and mining legislation of certain of the selected countries have led to reviews and/or applications and/or the granting of the gold exploration permits as follows:

Mali

Early in June 2008 the Company was granted an option for 90 days to undertake limited exploration and apply for two gold exploration permits in Mali, West Africa. The Baroya and Metedia permit areas (the 'Permit Areas') are contiguous and occupy a total area of 15 km2, close to the international border with Senegal in the south-western gold belt of Mali.  

GoldStone consequently carried out a limited exploration programme during the 90-day period over the Baroya and Metedia permit areas and the results are positive and encouraging. The Company therefore lodged applications early in September 2008 for exploration permits over these areas and the applications are currently under consideration by the Ministry of Mining in Mali.

Historical soil sampling, trenching and drilling by previous operators on the permit areas demonstrated the presence of numerous gold occurrences in soil and rock. This included drill hole intersections with potentially economic gold concentrations, including 15 metres at 0.97 g/t Au and 4 metres at 1.92 g/t Au. The field visit undertaken by GoldStone during July 2008 confirmed the presence of the hydrothermal gold mineralisation on the Baroya and Metedia permits. Soil sampling results demonstrated the presence of multiple gold anomalies in soil on the properties. Artisanal saprolite workings extend from the neighbouring Segala gold deposit into the Baroya permit and coincide with a strong gold anomaly in soil. Samples of the saprolite in this area yielded gold values of up to 17 g/t. 

The permits are within 8 km of the Tabakoto gold mine. The Board believes that proximity of the permit areas to the Tabakoto gold mine significantly increases the chances of any gold deposit discovered to become economically viable. Any future exploration programme in this area will be guided by the principals of 'brown fields exploration'; directed not only to discover large, stand alone, gold deposits but also to define smaller gold resources that could serve as satellite feeders to the Tabakoto plant.

Senegal 

The Company lodged applications during March 2008 for three gold exploration permits in Senegal, West Africa.

The Sangola (471 km2), Dindefelou (280 km2) and Velingara (575 km2) licences applied for all lie within the prospective Kenieba inlier of the Birimian Formation and are close to the border of Guinea. Two of the permit areas in question contain potential hydrothermal gold mineralisation, whilst the third may contain palaeoplacer gold mineralisation. The Directors believe that these areas have not been explored using modern techniques and accordingly may hold the potential for new gold discoveries. Senegalese mining legislation provides for a processing period of six months from the date an exploration application is lodged. The applications are currently still being processed.

India

GoldStone applied to the Foreign Investment Promotion Board ('FIPB') of India to establish a subsidiary company in order to explore for gold, diamond and uranium mineral resources. Following the FIPB's approval for gold and diamonds and further investigations by the Company, GoldStone submitted an application during June 2008 to explore an identified basin in one of the states of India where Witwatersrand-type palaeoplacer sedimentation has been described in a publication by the Geological Society of India. During previous exploration by the Government of India, a basal quartz-pebble conglomerate unit was found to have been invariably mineralised with pyrite and uranium, a well known characteristic of Witwatersrand palaeoplacers. GoldStone has visited the site and the Board is of the opinion that the deposits deserve detailed exploration.

The Company anticipates that the review process related to GoldStone's exploration applications may take between 12 and 24 months from date of lodgement.

USA

In October 2008 the Company completed a second phase review of certain potential palaeoplacer deposit occurrences in the USA, which might host economical gold deposits.

GoldStone anticipates lodging the applications for exploration permits over the relevant areas during the first half of 2009.

LISTING ON ALTx 

The Directors are of the opinion that a listing on ALTX would raise the Company's profile, open new avenues for fund raising for the Company, if required, and will provide improved liquidity for the Company's shareholders at a relatively low cost. In addition an ALTX listing will allow GoldStone to invest in the South African Development Community ('SADC'), a region that is well-known for its exploration opportunities.

FINANCING

The Company's cash resources are currently approximately US$1.5 million.

OUTLOOK

The Board looks forward to completing the acquisition of the DR3-East Uranium Project, which has the potential to rebuild value for shareholders. The listing of GoldStone on the ALTX is progressing and the Board expects that this process will be concluded during the current financial year which would enable the completion of the acquisition of the DR3-East Uranium Project.

The Board took a decision during March 2008 to focus the Company's principal activities on the exploration for palaeoplacer and hydrothermal gold mineralisation as well as associated minerals, such as silver, copper and uranium. As a consequence the Board is on an ongoing basis investigating and reviewing potential exploration projects which fall within this ambit.

APPROVAL

Dr. Lawrie Minter, who holds a PhD in palaeoplacer sedimentology, has reviewed and approved the content of this announcement.

Nico van der Hoven

Chief Executive Officer

27 November 2008 

Enquiries:

GoldStone Resources Ltd	00 27 21 794 4004
Nico van der Hoven (Chief Executive Officer)
Hanson Westhouse Limited	0113 246 2610
Tim Feather / Matthew Johnson

CONDENSED STATEMENT OF OPERATIONS

For the six months ended 31 August

				Six months period ended 31 August 2008 US$	Six months period ended 31 August 2007 US$
Turnover
Management fees				-	25,000
Interest receivable				32,031	76,061
				32,031	101,061
Exploration expenses
Exploration expenses				(74,266)	(2,159)
Gross (loss)/profit				(42,235)	98,902
Other operating expenses				(508,349)	(330,605)
LOSS FOR THE FINANCIAL PERIOD				(550,584)	(231,703)
Loss per ordinary share
Basic (cents per share)				(0.4c)	(0.2c)

CONDENSED BALANCE SHEET

				Six months period ended  31 August US$	Year ended  28 February US$
FIXED ASSETS
Other assets				30,000	-
Tangible assets				19,095	21,016
				49,095	21,016
CURRENT ASSETS
Debtors and prepayments				19,195	19,195
Cash at bank				1,771,856	2,336,447
				1,791,051	2,355,642
CREDITORS: amounts falling due within one year
Creditors and accruals				(56,591)	(42,519)
Net current assets				1,734,460	2,313,123
TOTAL ASSETS LESS CURRENT LIABILITIES				1,783,555	2,334,139
CAPITAL AND RESERVES
Share capital				2,354,482	2,354,482
Share premium				13,849,554	13,849,554
Capital contribution reserve				555,110	555,110
Accumulated deficit				(14,975,591)	(14,425,007)
SHAREHOLDERS' FUNDS				1,783,555	2,334,139

CONDENSED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 August

				Period ended  2008  US$	Period ended  2007  US$
SHARE CAPITAL - £0.01 par value
Authorised - 250,000,000 shares
Issued and fully paid - 130,816,663 shares				2,354,482	2,354,482
SHARE PREMIUM				13,849,554	13,849,554
CAPITAL CONTRIBUTION RESERVE				555,110	555,110
ACCUMULATED DEFICIT
Balance at beginning of period				(14,425,007)	(13,655,686)
Net loss for the period				(550,584)	(231,703)
Balance at end of period				(14,975,591)	(13,887,389)
				1,783,555	2,871,757

CONDENSED CASH FLOW STATEMENT

For the six months ended 31 August

				Six months period ended 31 August 2008 US$		Six months period ended 31 August 2007 US$
Loss for the period				(550,584)	(231,703)
Adjusted for:
Depreciation				6,340	7,105
Interest received				(32,031)	(76,061)
Exploration expenses				50,141	2,159
Increase in debtors				-	(10,039)
Increase/ (decrease) in creditors				14,072	(8,349)
Net cash outflow from operating activities				(512,062)	(316,888)
Investing activities
Exploration expenses				(50,141)	(2,159)
Interest received				32,031	76,061
Deposit paid				(30,000)	-
Purchase of fixed assets				(4,419)	(288)
				(52,529)	73,614
Decrease in cash				(564,591)	(243,274)
Cash at beginning of the period				2,336,447	3,103,109
Cash at end of the period				1,771,856	2,859,835

NOTE

LOSS PER ORDINARY SHARE 

Basic earnings per share is calculated by dividing the losses attributable to ordinary shareholders by the weighted average number of ordinary shares in issue after the placing on the AIM.

				31 August  $	28 February 2008 $
Loss per ordinary share
Loss attributable to share holders				(550,584)	(231,703)
Weighted average number of ordinary shares				130,816,633	130,816,633
Basic loss per share (cents)				(0.4c)	(0.2c)

 

END

 

 

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