Interim Results

RNS Number : 6009D

Landore Resources Limited

17 September 2008

 



LANDORE RESOURCES LIMITED

INTERIM STATEMENT

For the six months ended 30 June 2008

www.landore.com

 MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED 30 JUNE 2008

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 2008 to 30 June 2008. 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.

Results of Operations

The financial results for the six months to 30 June 2008 show a loss of £2,439,942 (2007: loss of £896,758). These results are in line with expectations and reflect the increased activities on the Junior Lake and Lessard projects. During the six month period exploration costs were £1,608,181 and administrative expenses were £859,843, it should be noted that an amount of £217,726 for share based payments and £157,015 for exchange losses were included within administrative expenses.

During the period under review £2,409,717 has been raised by placing 13,342,000 new shares at 15p per share, 3,800,000 options being exercised at a strike price of 7.75p per share and 1,624,525 warrants being exercised at a strike price of 7p per share. Since the period end, a share placing of 6,500,000 new shares at 9.5p, raising £617,500 was announced on 5th September 2008.

Mineral Exploration Activities

The Group's exploration activities have been mainly focused on the Junior Lake nickel project and the Lessard copper project. In addition, exploration continues on the West Graham property by our joint venture partner, First Nickel Inc.

Junior Lake Nickel Project

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.

VW Nickel Deposit. As a result of substantial drilling and exploration in the latter half of 2007, Landore retained Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA), Toronto, to independently carry out a Canadian National Instrument 43-101 (NI43-101) compliant 'Resource Upgrade' estimate for the VW Nickel Deposit. The Resource upgrade was completed and announced in March 2008.

In summary the global resource base on the VW Deposit has been substantially increased by 48 per cent. to 22,407 tonnes Nickel equivalent (NiEq) at a 0.2% nickel cutoff grade. Ninety one per cent.of the new resource is now in the 'Indicated' category and the average grade has improved by 25 per cent. to 0.45 per cent. NiEq. Significantly the VW deposit remains open along strike in both directions to the east and west as well as at depth. This gives scope for expansion of the Resource base and confirms the strong economic potential of the VW Nickel Deposit.

Currently a 6,000 metre drill program is being carried out on the western end of the VW Deposit to test the down plunge of the high grade zone identified in last years drilling and on the eastern end to extend the near surface mineralization. To date 13 drill-holes for 3,754 metres of NQ diamond core have been completed. Results are either pending or under verification process and will be reported when available.

B4-7 Nickel-Copper-Cobalt-PGE's Deposit.  As a result of substantial drilling and exploration in the latter half of 2007, Landore retained Snowden Mining Industry Consultants (Snowden), Perth, Australia to independently prepare an Australasian Joint Ore Reserves Committee (JORC) Code compliant (2004) Mineral Resource estimate for the B4-7 Nickel, Copper, Cobalt and PGE,s deposit located just 3 kilometres to the north west of the VW deposit. The resource estimate was completed and announced in May 2008.

Extract from the report produced by Snowden.

The B4-7 resource estimate, at various nickel equivalent cut-off grades, is detailed below in Table 1.

Table 1 – Landore B4-7 Inferred Resource reported above various nickel equivalent (NiEQ) cut-off grades   Cut-off (NiEQ%) Tonnes (kt) Ni% Cu% Co% Pt ppm Pd ppm Au ppm NiEQ% 0.2 5,870 0.32 0.2 0.03 0.08 0.31 0.02 0.49 0.3 4,650 0.37 0.3 0.03 0.09 0.32 0.02 0.55 0.4 3,490 0.41 0.3 0.04 0.09 0.35 0.03 0.62 0.6 1,680 0.51 0.3 0.05 0.10 0.43 0.03 0.76 0.8 530 0.62 0.4 0.06 0.10 0.51 0.04 0.92

NiEQ = Ni% + (0.26 × Cu%) + (2.38 × Co%) + (0.19 × Pt ppm) + (0.06 × Pd ppm) + (0.12 × Au ppm) Tonnes and grades have been rounded and this may have resulted in minor discrepancies.

Extract ends.

In summary the global resource base on the B4-7 Deposit is 28,900 tonnes Nickel equivalent (NiEq) at a 0.2% nickel cutoff grade all in the inferred category with an average grade of 0.45 per cent. NiEq. The B4-7 deposit also remains open along strike in both directions to the east and west as well as at depth.

As a result of the above Resource estimates the combined Resources of the VW and B4-7 Deposits now stand in excess of 51,000 tonnes of Nickel equivalent.  

Metallurgical and Baseline studies continue in preparation for the planned Scoping Study.

Exploration. An exploration drilling campaign, consisting of 31 drill-holes for a total of 4,571 metres, has been completed on the Carrot Top Zone, the Grassy Pond Zone and banded iron formation all of which are located on the optioned Lamaune Lake property adjacent to and surrounded on three sides by the Junior Lake property. Drilling on the Carrot Top Zone was designed to further investigate highly anomalous nickel and copper encountered in drilling in 2005. Results are either pending or under verification process and will be reported when available.  

Lessard, Copper-Zinc-Silver Project

The Lessard property, located approximately 107 kilometres north of the town of Chibougamau in the province of Quebec, comprises 104 claims for 2,166 hectares. Lessard hosts a copper-zinc-silver deposit with a historic resource reported in a feasibility study in 1975 by Selco Mining Corporation Ltd of 1,463,835 tons at 1.73%Cu, 2.96%Zn, 1.1oz/t Ag and 0.019oz/t Au after allowance for dilution. (The resource is not compliant with National Instrument 43-101).

A drilling campaign consisting of 25 NQ diamond drill holes, for a total of 9,581 metres, was completed in the first half of 2008 on the Lessard deposit in order to provide closer spacing to enable a resource estimate and to target possible strike extensions of the existing deposit. 

The results from the 2008 drilling campaign are highly encouraging. Accordingly, Chlumsky, Armbrust and Meyer, LLC. of Lakewood, Colorado, has been retained by Landore to independently prepare a JORC Resource estimate and report on the Lessard deposit. Results of this study are expected towards the end of 2008.

West Graham / First Nickel option - Nickel

The West Graham property consists of one patented lot owned outright by Landore Resouces Inc. of 130 hectares, located in Northern Ontario, 17 kilometres from Sudbury on the southern rim of the Sudbury Intrusive Complex and contains the historic 'Conwest deposit'.

First Nickel Inc. entered into an option agreement in November 2005 with Landore Resources Canada Inc. to acquire a 70 per cent. interest in the West Graham property which is strategically located immediately to the south of the East Zone of First Nickel's Lockerby Mine. The agreement provides for First Nickel to make cash payments to Landore of C$150,000 and carry out exploration and development expenditures of C$6 million over a four-year period.

First Nickel Inc. reported in March 2008 the results of 22 diamond drill holes representing 5,469 metres of diamond drilling on the West Graham Property during the 2007 exploration programme and the first two holes of the 2008 exploration programme.

Results to date have met expectations based on the previous exploration programmes completed by First Nickel. Highlights of the drill programme include FN12045 with 0.59 per cent. Ni and 0.44 per cent. Cu over 70.20 metres, including 1.14 per cent. Ni and 0.60 per cent. Cu over 10.50 metres; and FN12050 with 55 per cent. Ni and 0.43 per cent. Cu over 86.70 metres, including 1.15 per cent. Ni and 0.71 per cent. Cu over 12.70 metres.

A new NI 43-101 Resource estimate is currently underway and is due to be received towards the end of 2008.

For further information on Landore and its projects please visit the Company's website www.landore.com

MANAGEMENT DISCUSSION AND ANALYSIS 

FOR THE SIX MONTHS ENDED 30 JUNE 2008

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 2007.

Use of Financial Instruments

The Company has not entered into 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 are 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 2008

		Six months ended		Six months ended
		30 June 2008		30 June 2007
	Notes	£		£
Exploration costs	2	(1,608,181)		(695,346)
Administrative expenses		(859,843)		(237,401)
Operating loss		(2,468,024)		(932,747)
Finance income		28,082		35,989
Loss before income tax		(2,439,942)		(896,758
Income tax expense		-		-
Loss for the period		(2,439,942)		(896,758)
Attributable to: Equity holders of the Company		(2,439,942)		(896,758)
Loss per share attributable to the equity holders of the Company during the year
- basic & diluted	3	(£0.02)		(£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 2008

	Six months ended		Six months ended
	30 June 2008		30 June 2007
	£		£
Loss for the period	(2,439,942)		(896,758)
Translation adjustment on consolidation	157,588		(143,635)
Net loss recognised directly in equity	(2,282,354)		(1,040,393)
Issue of ordinary share capital	187,665		212,857
Share premium arising on issue of ordinary share capital	2,215,177		1,915,717
Issue of share options	217,276		-
Net increase in shareholders’ funds	337,763		1,088,181
Opening shareholders’ funds at 1 January 2008	394,572		803,717
Closing shareholders’ funds	732,335		1,891,898

UNAUDITED CONSOLIDATED BALANCE SHEET

AS AT SIX MONTHS ENDED 30 JUNE 2008

		As at 30 June 2008		As at 30 June 2007
	Notes	£		£
Assets
Non current assets
Property, plant and equipment		96,719		78,611
		96,719		78,611
Current assets
Trade and other receivables		33,150		57,269
Cash and cash equivalents		1,119,842		2,062,180
		1,152,992		2,119,449
Total assets		1,249,711		2,198,060
Equity
Capital and reserves attributable the Company's equity holders
Share capital	4	1,405,993		1,216,327
Share premium	4	10,166,957		7,937,405
Share options	5	575,964		397,905
Other reserves/warrants	6	43,571		43,571
Retained earnings	7	(11,743,661)		(7,724,340)
Cumulative translation adjustment		283,511		21,030
Total equity		732,335		1,891,898
Liabilities
Current liabilities
Trade and other payables		517,376		306,162
		517,376		306,162
Total liabilities		517,376		306,162
Total equity and liabilities		1,249,711		2,198,060

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

				Six months ended  30 June 2008				Six months ended 30  June 2007
		Notes		£				£
Cash flows from operating  activities
Cash utilised in operations		8		(1,740,847)				(901,399)
Cash flows from investing activities
Purchases of property, plant and equipment		17,448				36,345
				(17,448)				(36,345)
Cash flows from financing activities
Issue of ordinary share capital		2,402,842				2,128,574
				2,402,842				2,128,574
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period				480,184				845,704
Exchange (losses)/gains on cash and cash equivalents				(4,889)				25,646
Cash and cash equivalents at end of period				1,119,842				2,062,180

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2008

ACCOUNTING POLICIES

1    Basis of accounting

      The financial statements have been prepared in accordance with those International Financial Reporting

      Standards ('IFRS') 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 (August 2008).

      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 2007.

2    Exploration expenditure and mineral properties    

	1 January 2008 £		Expenditure in period £		Accumulated expenditure 30 June 2008 £
Miminiska Lake	1,131,777		1,489		1,133,266
Junior Lake	3,694,524		295,479		3,990,003
Frond Lake	67,686		2,191		69,877
Wottam	61,558		-		61,558
Lamaune	301,139		403,201		704,340
Seeley Lake	89,086		-		89,086
Lessard	118,919		896,761		1,015,680
Other	31,752		9,060		40,812
	5,496,441		1,608,181		7,104,622

   Mineral properties at 30 June 2008 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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2008

3    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 130,210,589 (2007: 108,767,790).

    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.

4   Share capital               

				2008 £
Authorised:
250,000,000 ordinary shares of 1 pence each				2,500,000
Issued: 140,599,323				1,405,993

				2008 £
Ordinary shares
Issued:
At 1 January 2008				1,218,328
Issued in the year				187,665
At 30 June 2008				1,405,993

The company made allotments of ordinary 1p shares with an aggregate nominal value of £187,665 during the year as follows:

	Number of shares		Nominal Value		Share premium
22 January 2008 - share options exercised	3,800,000		38,000		256,700
April 2008	13,342,000		133,420		1,867,880
4 April 2008 - share warrants exercised	1,624,525		16,245		97,472
Share issue costs	-		-		(6,875)
	18,766,525		187,665		2,215,177

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2008

5    Share options                        

				2008 £
Share options reserve brought forward				501,163
Charge for options granted during the period				217,276
Transfer to profit and loss reserve for exercised options				(142,475)
Share options reserve carried forward				575,964

6    Other reserves

      The other reserves figure relates to warrants acquired on acquisition of Landore Resources Canada Inc.

      These were existing warrants acquired on a one for one basis and were exercised on 4 April 2008.

7    Profit and loss reserve

Issued:
At 1 January 2008				(9,446,194)
Loss for the period				(2,439,942)
Transfer from share options reserve				142,475
At 30 June 2008				(11,743,661)

8    Cash utilised in operations                  

			Six months ended  30 June 2008 £		Six months ended  30 June 2007 £
Operating loss			(2,439,942)		(896,758)
Depreciation of property, plant and equipment			14,777		9,526
Decrease/(increase) in receivables			31,285		(41,696)
Increase in payables			278,742		189,934
Share based payment			217,276		-
Foreign exchange loss/(gain)			157,015		(162,405)
Net cash outflow from operating activities			(1,740,847)		(901,399)

 

END

 

 

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