Final Results

RNS Number : 4503B

Vane Minerals PLC

17 April 2012

 



17 April 2012

VANE Minerals plc (AIM:VML)

("VANE" or the "Company")

Final Results for the year ended 31 December 2011

Notice of Annual General Meeting

 

Financial Highlights

·      £3.68 million revenue (2010: £2.56 million)

·      £1.60 million loss after tax (2010: £2.1 million loss after tax¹)

·      Raised £1.16 million before expenses in a successful fund raise during October 2011

·      Cash balances of £2.30 million as at 31 December 2011 (2010: £2.75 million)

 

¹Restated, see note 3

Operational Highlights

·      Appointment of new Chief Executive Officer

·      McGhee Peak commenced drilling in late 2011 and resulted in VANE successfully drilling into a clearly identified copper-molybdenum porphyry system. Yuma King and Granite Gap copper targets drilled with negative results

·      Pre-feasibility work continues at the Wate uranium project

·      High-grade uranium encountered at the Rose project

·      Improved production with higher grades from Mexican gold and silver assets

Post-Period Highlights

·      Diamond drilling programme initiated at McGhee Peak

·      Drilling commenced at Peg Leg copper target

·      Revenues arising from Mexican gold and silver production remain robust

·      U.S. Secretary of the Interior, Ken Salazar, announces the withdrawal of northern Arizona federal lands from all new exploration and mining activity

David Newton, Chief Executive, commented:

"The year under review was one of progress for the Company, progress that has accelerated into the current year. The first drilling results from McGhee Peak were encouraging, whilst the qualities of our Mexican assets can now be demonstrated over a meaningful period. VANE is in a robust position both operationally and financially, with the downside risk mitigated by the cash flow generated in Mexico and the profile of our exploration assets strengthened."

VANE also announces that the Annual General Meeting will be held at the offices of Allenby Capital Limited, Claridge House, 32 Davies Street, London W1K 4ND at 10:00 am on 31 May 2012, notice of which will be posted to shareholders along with the report and accounts by 20 April 2012.

For further information, please contact:

VANE Minerals Plc	[phone]
David Newton, Chief Executive Allenby Capital (Nominated Adviser & Joint Broker) Jeremy Porter/Alex Price	[phone]
Northland Capital Partners (Joint Broker) Louis Castro Bankside Consultants Simon Rothschild	[phone] [phone]

CHAIRMAN'S STATEMENT

The progress that we have made this year in both our copper and uranium exploration programmes and our precious metals production business in Mexico is substantial. Our post year end announcement of initial drilling results at McGhee Peak, where we drilled into a copper-molybdenum porphyry system, is a positive development for the Company and we will announce further drilling results on this property throughout the course of 2012. Our copper exploration programme is exciting interest and despite two negative drilling results in 2011, at our projects at Yuma King and Granite Gap, we remain optimistic for both McGhee Peak and our other identified projects which will continue to be tested throughout the current year.

Our uranium exploration programme in northern Arizona has progressed well through our joint venture with Uranium One. During the year, a NI 43-101 Inferred Resource amounting to 1.118M lbs eU3O8 was confirmed at our Wate project and drilling at our Rose project has produced positive results which we hope to be able to convert into a NI 43-101 compliant resource during 2012.

Post year end, the U.S. Secretary of the Interior announced the anticipated withdrawal from uranium mining activity of one million acres of federal lands in northern Arizona where VANE held substantial interests. Whilst this announcement was disappointing, we had amended our exploration plans in July 2009 such that since then, we have only drilled on state lands, which haven't been affected by the withdrawal. Regardless of this, the Board continues to believe in the long term fundamentals of nuclear energy and the outlook for uranium in 2012 and beyond.

Our Mexican subsidiary, Minerales VANE SA de CV, has made significant progress in increasing its financial contribution to the Group. During the course of 2011, production switched from our 100% owned Diablito Mine to ore produced from our joint venture with the Ruiz Brothers. As a result, grades and recovery rates improved leading to more revenue being generated and we have been able to announce that in the fourth quarter of 2011 the financial contribution from Minerales VANE covered the entire costs incurred by the Company for that quarter.

The fund raising during the year and the appointment of David Newton as our new Chief Executive leaves us in a strong position both financially and operationally and gives us the opportunity to grow the business through further exploration drilling on our copper and uranium assets, whilst the continuing success of our Mexican business provides the funding required to provide financial security for the Company.

We remain confident that the fundamentals for copper, gold, silver and uranium will remain strong in the medium to long term and we would like to thank our investors for their continuing support. We look forward to updating you with our progress throughout the rest of 2012.

Sir Richard Needham

16 April 2012

BUSINESS REVIEW

Review of Operations

2011 was a year of significant developments for VANE. The copper exploration programme was implemented and McGhee commenced drilling in late 2011 resulting in VANE successfully drilling into a clearly identified copper-molybdenum porphyry system. A separate diamond drilling programme has been initiated at that asset to determine whether or not economically viable grades of copper and molybdenum are present. Yuma King and Granite Gap copper targets were drilled earlier in the year with negative results.

Our uranium business progressed well through our joint venture with Uranium One and 2011 saw the confirmation of a NI 43-101 compliant resource at our Wate project and positive drilling results at Rose. In total 14 targets were drilled throughout the year with the results providing us with some further significant exploration targets. The announcement by the U.S. Secretary of the Interior, Ken Salazar, that all federal lands in northern Arizona were being withdrawn from hard-rock mining activity was disappointing, but expected and this had no material impact on the running of the business in 2011, as we had already adjusted our drilling programmes to focus on state lands.

Production of gold and silver from our Mexico business improved significantly throughout the course of 2011. We announced our intention to close our Diablito Mine in 2012 once some remaining high grade ore is mined, and production has focused on ore from our Ruiz joint venture. Throughout 2011, this joint venture produced ore from the La Colorada Mine, being one of a number of mines within the joint venture area, and revenues rose significantly due to substantially higher grades being mined and recovery rates improving at our SDA mill. VANE also completed the building of a Merrill Crowe cyanide leaching plant and by the year end this plant was fully operational.

David Newton, our new CEO, started with VANE on 1 September 2011, and is focusing the business on delivering its exploration strategy in the U.S. and improving the revenue flow from Mexico. Following his appointment, the Company also completed a fund raise in October 2011, which saw the Company raise £1.16 million, before expenses, which provides the Company with greater financial security.

Southwest USA Copper Exploration

During 2011, the Company drilled two copper exploration targets at Yuma King and Granite Gap which did not result in the discovery of economic mineralisation, and then commenced rotary drilling at its McGhee Peak target. The results of this rotary drilling programme were announced post year end and confirmed that VANE had drilled into a clearly identified copper-molybdenum porphyry system that contained two mineralised zones, located approximately 1 mile apart. A further diamond drilling programme has been initiated in order to determine whether or not this porphyry system contains economically viable grades of these metals.

This is an extremely exciting development for VANE, not only because of what we might go on to discover at McGhee Peak, but also because the discovery of a covered porphyry system verifies the exploration techniques that VANE has been utilising in its exploration programme. Even if it transpires that McGhee Peak is not economically viable, these drilling results provide us with additional confidence that our exploration programme will be successful.

VANE has identified further drilling targets in both southern Arizona and southwest New Mexico which will be drilled in due course, although the permitting process in New Mexico still proves to be frustrating, challenging and time consuming and represents a barrier to the Company being able to accelerate its exploration programme.

Uranium Exploration in the USA

"The market that we now find ourselves in is like no other in the history of uranium. Production is far below requirements, which are growing."  (as quoted from a report posted on the website of UX Consulting (www.uxc.com) in December 2011).

A licence was granted by the U.S. Nuclear Regulatory Commission on 9 February 2012, for the first new nuclear generating plant to be built in the U.S in 30 years.  The plant will be built and operated by Southern Company at its Vogtle site south of Augusta, Georgia.

This news corroborates VANE's continued belief in the nuclear industry and its need for fuel. The long-term price of uranium oxide improved from a low in 2010 of US$58/lb to US$62/lb at the close of 2011, and remains steady near that price despite the natural disaster at Fukushima, Japan. The Company agrees with forecasts of continued strengthening of the price due to demand.

During 2011, VANE continued its uranium drilling exploration programme, which included the Rose project which was acquired in July.  Drilling on the Wate project was successful in moving the project to pre-feasibility, which our joint venture partner, Uranium One, is overseeing, and at Rose, ore-grade intercepts were encountered in several holes.  The drilling results on 8 of the other projects drilled were positive and justify further drilling.  

All breccia pipe drilling activities were carried out on state lands in northern Arizona.  As anticipated, and previously planned for operationally by VANE, the U.S. Department of Interior withdrew the federal lands in northern Arizona from all hard-rock mining activity where VANE and several companies hold mining claims.  Reaction to this move has come from exploration companies, industry support organizations and elected officials in the form of legislative action, as well as judicially in challenging the legality of the withdrawal.  The withdrawal is being viewed as "a taking" and investigations are underway into what recourse companies may have to recover losses.   

VANE will continue its exploration programme on state lands and has approved drilling plans of operations on 24 projects.  The lead projects going into 2012 are the Rose pipe where work will focus on establishing a NI 43-101 resource, and the Square Tank project where a major collapse feature, a strong indicator of a breccia pipe at depth, was identified by early-stage shallow drilling in 2011.  VANE geologists continue to identify new exploration targets to add to and prioritize in its portfolio of over 100 targets on state lands. In addition, the company continues to evaluate the economic viability of its North Wash uranium-vanadium project located in southeast Utah.

Mining and Milling Operations in Mexico

Minerales VANE SA de CV, significantly improved its financial performance in 2011. Operations continue to be directed from the headquarters located in Acaponeta, Nayarit that include offices, living quarters and analytical facilities.

During the year, production commenced at our Ruiz joint venture, located in La Rastra, Sinaloa. The joint venture has an area of interest covering some 1,500 square kilometres in southern Sinaloa. It includes three separate mining districts; La Rastra, Escuinapa and Rosario as well as four properties owned by the Ruiz family. The La Colorada Mine is currently in production and this has been the source of all joint venture ore for the SDA mill in 2011. Three additional concessions, Maria Fernanda, Valenzuela and Jorge Luis cover three partly developed high-grade veins.

The main financial terms of the joint venture are that profits are to be split 60:40 in favour of VANE, once 150% of all capital costs incurred by VANE have been repaid. For any period where capital costs are still being re-paid then the profits are split 80:20 in favour of VANE. Whilst almost all capital costs associated with commencing production at La Colorada have now been repaid, additional capital costs will be incurred in bringing into production the other concessions and properties within the joint venture.

During 2011, and once production had commenced at the joint venture, VANE halted production at its Diablito Mine and announced that it intends to close this mine during the course of 2012 following the extraction of approximately 3,200 tonnes of high-grade ore. Of these 3,200 tonnes, it is expected that approximately 1,663 tonnes of higher grade ore (c.17 g/T Au and c.1,800 g/T Ag) will be processed directly by the Merrill Crowe cyanide leaching plant, which was built during the course of 2011, and is now fully operational.  The remaining ore will be stockpiled in case of any interruptions to supply from our Ruiz joint venture ore. The extraction of these 3,200 tonnes commenced post period end and Diablito is expected to close later in 2012.

During the year, the SDA mill treated 31,466 tonnes of ore and production averaged 2,622 tonnes per month or 105% of target. Averages grades of 4.4 g/T Au and 131 g/T Ag were achieved with an average recovery rate of 73% Au and 69% Ag. 2,706 oz. Au and 73,384 oz. Ag were produced in total for 2011 at a direct production cost of $743.45 per equivalent oz Au or $16.23 per equivalent oz. Ag.  

With concentrating and treating facilities strategically situated along a major north-south highway and rail route, the Minerales VANE SA de CV team continues to seek and evaluate acquisition opportunities, both stand-alone mine/mill operations and mine/mill production as potential feed to the SDA mill and cyanide leach-Merrill Crowe plant. We also continue to look both north and south of Acaponeta for opportunities similar to the Ruiz joint venture. This broad area of interest contains both producing mines and significant historic production and represents what we see as a number of opportunities to expand our business.

FINANCIAL REVIEW

Revenue

Revenue for the year has been generated from both the Diablito mine and the Ruiz joint venture and the Income Statement reports total revenue for the year ended 31 December 2011 of £3,678,126 (2010: £2,560,413).

Revenue from Diablito continued to be lower than expected due to lower ore grades. As a result the Company announced the intention to close Diablito in 2012.

Revenue from the Ruiz joint venture exceeded expectations during Q4 due to higher than expected grades and recovery rates.

Income Statement

The Group reported a net loss after tax of £1,603,980 or 0.46p per Ordinary Share for the year ended 31 December 2011 (2010 restated: £2,100,329¹ or 0.96p per Ordinary Share¹). The Group reported a gross profit of £569,522 (2010: gross loss of £454,906) after charging profit share payments due under the terms of the Ruiz joint venture of £633,996 (2010: £nil) and depreciation of £653,280 (2010: £923,358).

There has been no impairment of intangible exploration and evaluation assets during the year as a result of the change in accounting policy disclosed (2010: £66,277¹)^. Impairment of property, plant and equipment resulted in a charge of £457,131 (2010: £nil) relating to impairment of the Diablito mine.

Other operating income of £109,691 (2010: £nil) relates to the 50 per cent uplift on capital expenditure incurred on the La Colorado mine under the terms of the Ruiz joint venture.

Investment income representing interest received on the Group's cash balances was £939 (2010: £3,613).

Balance Sheet

Total investment in intangible assets at 31 December 2011 was £4,865,067 (2010: £3,683,797¹) reflecting the Group's continued investment in its mineral exploration programme, including the new Wate Mining joint venture.

Property, plant and equipment at 31 December 2011 was £944,953 (2010: £1,961,254) reflecting the continued depreciation of the Diablito mine and Ore processing mill, together with the additional impairment of the Diablito mine of £285,248 (2010: £nil).

Trade and other receivables of £1,170,715 (2010: £504,622) primarily represents amounts owed by joint venture partners.

Trade and other payables of £1,577,446 (2010: £638,721) primarily represents amount due to joint venture partners.

Cash and cash equivalents at 31 December 2011 were £2,299,546 (2010: £2,750,399) which reflects the additional funds raised during October 2011 and the fact that revenue from the Mexico operations are now funding other areas of the Group's activities.

¹Restated, see note 3

Significant equity events

On 28 September 2011 the Company's Share Option Plan was amended by a resolution of the Remuneration Committee by which the existing share options were cancelled and replaced with new share options, granted with a new exercise price of 1.125p.

On 30 September 2011, the Company issued a further 11,600,000 share options to subscribe for Ordinary Shares of 0.1p each in the Company at an exercise price of 1.125p.

On 27 October 2011, the Company completed a placing of 116,000,000 Ordinary Shares of 0.1p each at a price of 1p per share, resulting in proceeds before expenses of £1,160,000.

Future Development

VANE, as a diversified exploration company, is well placed with its exciting copper exploration programme in the highly productive southwest USA copper quadrilateral and its uranium exploration and development programme in the high grade breccia pipe district of northern Arizona. The business is substantially de-risked by the revenues earned from VANE's gold/silver production assets in Mexico and it is the funding that this asset provides which will allow VANE to continue to invest in its exploration projects. With the exciting results from drilling at the McGhee Peak project, the Directors are optimistic for the year ahead.

We would like to thank all shareholders for their continued support.

DJ Newton                                                        KK Hefton                                      

Chief Executive Officer                                   Chief Operating Officer

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2011

	Note	2011 £	Restated 2010 £
Continuing operations
Revenue		3,678,126	2,560,413
Cost of sales		(2,474,608)	(3,015,319)
Profit share payments		(633,996)	-
Gross profit/(loss)		569,522	(454,906)
Operating expenses		(261,488)	(279,372)
Administrative expenses		(1,342,346)	(1,216,650)
Impairment of property, plant and equipment		(457,131)	-
Impairment of intangible exploration and evaluation assets		-	(66,277)
Impairment of available for sale investment		-	(213,571)
Other operating income		109,691	-
Operating loss		(1,381,752)	(2,230,776)
Investment income		939	3,613
Finance costs		(147,919)	(145,515)
Loss before taxation	5	(1,528,732)	(2,372,678)
Taxation		(75,248)	272,349
Loss for the year attributable to owners of the parent company		(1,603,980)	(2,100,329)
Loss per Ordinary Share	6
Basic and diluted		(0.46p)	(0.96p)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2011

		2011 £	Restated 2010 £
Loss for the year attributable to owners of the parent company		(1,603,980)	(2,100,329)
Other comprehensive income
Exchange differences arising on translation of foreign operations		(200,224)	170,252
Income tax relating to components of other comprehensive income		32,340	(86,598)
		(167,884)	83,654
Total comprehensive income for the year attributable to owners of the parent company		(1,771,864)	(2,016,675)

CONSOLIDATED BALANCE SHEET

As at 31 December 2011

		2011 £	Restated 2010 £
Non-current assets
Intangible assets		4,865,067	3,683,797
Property, plant and equipment		944,953	1,961,254
		5,810,020	5,645,051
Current assets
Inventories		363,720	432,158
Trade and other receivables		1,170,715	504,622
Cash and cash equivalents		2,299,546	2,750,399
		3,833,981	3,687,179
Total assets		9,644,001	9,332,230
Current liabilities
Trade and other payables		(1,577,446)	(638,721)
Taxation		(2,640)	(2,646)
		(1,580,086)	(641,367)
Non-current liabilities
Convertible loan notes		(1,483,409)	(1,455,380)
Deferred tax		(12,523)	(113,741)
Provisions		(54,510)	(45,375)
		(1,550,442)	(1,614,496)
Total liabilities		(3,130,528)	(2,255,863)
Net assets		6,513,473	7,076,367
Equity
Share capital		19,263,627	19,147,627
Share premium account		5,838,030	4,868,863
Share option reserve		396,679	310,701
Other reserves		261,220	261,220
Cumulative translation reserves		29,595	197,479
Retained deficit		(19,275,678)	(17,709,523)
Equity attributable to owners of the parent company		6,513,473	7,076,367

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2011

	Share capital	Share premium account	Share option reserve	Other Reserves	Cumulative translation reserves	Retained deficit	Total
	£	£	£	£	£	£	£
As at 1 January 2010 as previously stated	19,010,811	2,359,071	280,161	261,220	71,586	(15,870,681)	6,112,168
Restatement (note 3)	-	-	-	-	42,239	261,487	303,726
As at 1 January 2010 restated	19,010,811	2,359,071	280,161	261,220	113,825	(15,609,194)	6,415,894
Transactions with owners in their capacity as owners
Issue of equity shares	136,816	2,673,385	-	-	-	-	2,810,201
Expense of issue of equity shares	-	(163,593)	-	-	-	-	(163,593)
Total transactions with owners in their capacity as owners	136,816	2,509,792	-	-	-	-	2,646,608
Loss for the year as restated	-	-	-	-	-	(2,100,329)	(2,100,329)
Other comprehensive income for the year as restated	-	-	-	-	83,654	-	83,654
Total comprehensive income for the year as restated	-	-	-	-	83,654	(2,100,329)	(2,016,675)
Share- based payments	-	-	30,540	-	-	-	30,540
As at 1 January 2011 restated	19,147,627	4,868,863	310,701	261,220	197,479	(17,709,523)	7,076,367
Transactions with owners in their capacity as owners
Issue of equity shares	116,000	1,044,000	-	-	-	-	1,160,000
Expense of issue of equity shares	-	(74,833)	-	-	-	-	(74,833)
Total transactions with owners in their capacity as owners	116,000	969,167	-	-	-	-	1,085,167
Loss for the year	-	-	-	-	-	(1,603,980)	(1,603,980)
Other comprehensive income for the year	-	-	-	-	(167,884)	-	(167,884)
Total comprehensive income for the year	-	-	-	-	(167,884)	(1,603,980)	(1,771,864)
Share-based payments	-	-	123,803		-	-	123,803
Transfer to retained earnings in respect of options	-	-	(37,825)	-	-	37,825	-
As at 31 December 2011	19,263,627	5,838,030	396,679	261,220	29,595	(19,275,678)	6,513,473

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2011

		2011 £	Restated 2010 £
Operating activities
Loss before taxation		(1,528,732)	(2,372,678 )
Investment income		(939)	(3,613)
Finance costs		147,919	145,515
Adjustments for:
Depreciation of property, plant and equipment		660,794	929,939
Impairment of property, plant and equipment		457,131
Impairment of exploration and evaluation assets		-	66,277
Impairment of available for sale  investment		-	213,571
Decommissioning		9,616	-
Share-based payments		123,803	30,540
Effect of foreign exchange rate changes		(158,953)	(106,582)
Operating outflow before movements in working capital		(289,361)	(1,097,031)
Decrease in inventories		68,438	372,042
Increase in trade and other receivables		(826,417)	(130,371)
Increase in trade and other payables		938,578	186,468
Cash used in operations		(108,762)	(668,892)
Income tax paid		(6)	(933)
Interest paid		(119,744)	(120,286)
Net cash used in operating activities		(228,512)	(790,111)
Investing activities
Interest received		939	3,613
Purchase of property, plant and equipment		(173,557)	(181,137)
Purchase of intangible exploration and evaluation assets		(1,176,978)	(794,406)
Net cash used in investing activities		(1,349,596)	(971,930)
Financing activities
Proceeds from issue of shares		1,160,000	2,810,201
Expenses of issue of shares		(74,833)	(163,593)
Finance lease payments		-	(1,858)
Net cash from financing activities		1,085,167	2,644,750
Net (decrease)/increase in cash and cash equivalents		(492,941)	882,709
Cash and cash equivalents at beginning of year		2,750,399	1,818,959
Effect of foreign exchange rate changes		42,088	48,731
Cash and cash equivalents at end of year		2,299,546	2,750,399

NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2011

1.           GENERAL INFORMATION

VANE Minerals plc (the 'Company') is domiciled and incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is Metic House, Ripley Drive, Wakefield, WF6 1QT.

The nature of the Group's operations and its principal activities are the evaluation and acquisition of mineral exploration targets, principally gold, silver, copper and uranium targets in the United States, and the development and operation of mines in Mexico.

2.           BASIS OF PREPARATION

The financial information set out above is abridged and does not constitute the Company's statutory financial statements for the year ended 31 December 2011. The financial information has been extracted from the financial statements for the year ended 31 December 2011, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and were approved by the board on 16 April 2012 and on which the auditors' have reported without qualification.

No statement has been made by the auditor under section 489(2) or (3) of the Companies Act 2006 in respect of these abridged financial statements.

The statutory financial statements for the year ended 31 December 2011 will be posted no later than 20 April 2012 to shareholders and, once approved, will be delivered to the Registrar of Companies following the Annual General Meeting on 31 May 2012.

Copies of the Annual Report and Financial Statements for the year ended 31 December 2011 will be available on the Company's website (www.vaneminerals.com) from 17 April 2012 and from the Company Secretary, VANE Minerals plc, Metic House, Ripley Drive, Normanton, WF6 1QT.

3.           RESTATEMENT

During 2011 the Group changed its accounting policy relating to the impairment of intangible exploration and evaluation assets. In previous periods impairment reviews for exploration and evaluation assets were carried out on a project by project basis, with each project representing a potential single cash-generating unit. Under the amended accounting policy impairment reviews are carried out on a cost pool basis. Where the exploration and evaluation assets concerned fall within the scope of an established full cost pool the assets are tested for impairment together with all development and production assets associated with that cost pool, as a single cash-generating unit. Management considers that this policy provides more relevant information and is more appropriate to the nature of the Group's exploration activities and is more consistent with usual practice.   

As a result, the comparative financial information for the year ended 31 December 2010 has been restated with the adjustments made to the opening balances of assets, liabilities and equity for prior period restatements that occurred before the earliest period presented.

Accordingly, an adjustment has been made retrospectively increasing E&E assets by £664,008 with a corresponding increase in equity as at 31 December 2010.

A summary of the adjustments made to restate the prior year's financial statements is as follows:

			Consolidated Balance Sheet
			E&E £	Accumulated deficit £	Cumulative translation reserves £
At 1 January 2010 as previously stated			2,567,140	(15,870,681)	71,586
Impairment			303,726	261,487	42,239
At 1 January 2010 restated			2,870,866	(15,609,194)	113,825
At 31 December 2010 as previously stated			3,019,789	(18,322,320)	146,268
Impairment			664,008	612,797	51,211
At 31 December 2010 restated			3,683,797	(17,709,523)	197,479

			Consolidated Income Statement
			Impairment of  E&E assets £	Loss for the year £	Loss per share £
For the year ended 31 December 2010 as previously stated			(417,587)	(2,451,639)	(1.12p)
Impairment			351,310	351,310	0.16p
For the year ended 31 December 2010 restated			(66,277)	(2,100,329)	(0.96p)

			Consolidated Cash flow Statement
			Loss before taxation £	Impairment of  E&E assets £
For the year ended 31 December 2010 as previously stated			(2,723,988)	417,587
Impairment			351,310	(351,310)
For the year ended 31 December 2010 restated			(2,372,678)	66,277

 

4.           SEGMENTAL INFORMATION

For management purposes, the Group is organised into two operating divisions: the USA and Mexico. These divisions are the basis on which the Group reports its segment information.

Segment information about these divisions is presented below. The tables show the geographic segmentation of the Group. Activities in Mexico are currently concerned with gold and silver mining.  Activities in the USA are split between research for further gold, silver and copper properties, and research and evaluation of potential uranium properties.

			2011 £	Restated 2010 £
Income statement
Revenue
		Mexico	3,678,126	2,560,413
Segmental results
	USA		(591,579)	(720,221)
	Mexico		(10,405)	(728,059)
	Total segment results		(601,984)	(1,448,280)
	Unallocated results		(926,748)	(924,398)
	Current and deferred tax		(75,248)	272,349
	Loss after taxation		(1,603,980)	(2,100,329)
Depreciation
	USA		6,345	6,581
	Mexico		654,449	923,358
			660,794	929,939
Impairment
	USA		-	66,277
	Mexico		457,131	-
	Total segment impairment		457,131	66,277
	Unallocated impairment		-	213,571
	Total impairment		457,131	279,848

				2011 £	Restated 2010 £
Balance Sheet
Segment Assets
			USA	6,006,967	4,040,693
			Mexico	2,539,598	3,203,874
			Total segment assets	8,546,565	7,244,567
			Unallocated assets	1,097,436	2,087,663
			Total assets	9,644,001	9,332,230
Segment Liabilities
		USA		881,443	78,580
		Mexico		627,781	463,978
		Total segment liabilities		1,509,224	542,558
		Unallocated liabilities		1,606,141	1,596,918
		Current and Deferred Tax		15,163	116,387
		Total liabilities		3,130,528	2,255,863
Capital Additions
		USA		1,176,978	794,406
		Mexico		223,543	181,137
				1,400,521	975,543
Net Assets
		USA		5,125,524	3,962,113
		Mexico		1,896,654	2,634,763
		Total segment net assets		7,022,178	6,596,876
		Unallocated net (liabilities)/assets		(508,705)	479,491
		Total net assets		6,513,473	7,076,367

All the assets of the Group relate to the mining operations in Mexico and research, evaluation and mining in the USA. The business segmentation effectively follows the geographic segmentation given above. The Group's revenue was generated from one customer.

5.           LOSS BEFORE TAXATION

 The loss for the year has been arrived at after charging/(crediting):

		2011 £	2010 £
Depreciation of  property, plant and equipment		660,794	929,939
Staff costs		864,704	560,569
Operating leases - land and buildings		60,221	63,965
Non-recoverable VAT		19,789	-
Net foreign exchange losses/(gains)		5,532	(118,151)
Operating expenses - exploration and evaluation costs expensed		261,488	279,372

6.           LOSS PER ORDINARY SHARE

Basic loss per Ordinary Share is calculated by dividing the net loss for the year attributable to owners of the parent company by the weighted average number of Ordinary Shares outstanding during the year. The calculation of the basic and diluted loss per Ordinary Share is based on the following data:

		2011 £	Restated 2010 £
Losses
Losses for the purpose of basic loss per Ordinary Share being net loss attributable to owners of the parent company		(1,603,980)	(2,100,329)
Number of shares		Number	Number
Weighted average number of shares for the purposes of basic loss per Ordinary Share		347,899,000	218,376,369
Loss per Ordinary Share
Basic and diluted		(0.46p)	(0.96p)

Due to the losses incurred in 2011 and 2010, there is no dilutive effect from the existing share options or convertible loan notes.

 

END

 

 

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