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Arcon Int.Resources (AIN)

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Thursday 29 April, 2004

Arcon Int.Resources

Preliminary Results

Arcon International Resources PLC
29 April 2004


                      ARCON International Resources P.l.c.
              Preliminary Results for year ended 31 December 2003.

29th April 2004 - The Board of ARCON International Resources P.l.c. is pleased
to announce its Preliminary Results for the year ended 31st December 2003,
reporting:

   •Successful placing of 10% of issued shares with UK Institutional
    shareholders raising a gross 5.7 million for capital expenditure and
    exploration programme

   •Significant increase (+22%) in concentrate volumes sold to 120,421 dmt
    compared to 99,890 dmt in 2002 due to improved grade and recovery

   •Exploration appraisal of world class R Zone completed, defining a
    measured and indicated resource of 2.3 million tonnes @ 19.0% zinc, 7.2%
    lead and 66g/t silver

   •Access drive to R Zone completed in the third quarter

   •Milled tonnage 660,213 tonnes in 2003 comparable to previous year
    notwithstanding decision to develop the R Zone access drive. Accordingly
    milled anticipated tonnage to increase further in 2004 to 750,000 tonnes

   •Gross value of metal sales increase to €45.4 million, despite difficult
    economic conditions

   •EBITDA loss reduced in 2003 by 26% compared to 2002 to €4.5 million

   •Year-end loss reduced by 34% to €9.7 million which includes a reduction
    in depreciation of €3.1 million compared to 2002

Commenting on the year end results this morning, ARCON's Chief Executive, Kevin
Ross, said:

'ARCON International Resources P.l.c. has continued to make further positive
progress in 2003 in difficult market conditions. We increased our concentrate
volumes by 22% in 2003 compared to 2002 due to improved grades and recoveries at
the mine. This has resulted in a 34% reduction in retained loss to €9.7 million
compared to a loss of €14.7 million in 2002.

'The successful placing of shares in September raised a gross 5.7 million, which
has been used to continue capital development within the mine and expand the
mill concentrate production capacity. The tightness of concentrate supply in the
zinc market is forecast by market commentators to continue over the next two
years and is expected to result in improved zinc prices.

'During the year, huge challenges faced the industry as we saw the €/US$
exchange rate strengthening markedly to a rate of $1.263 at the end of the year.
Consequently although the annual average US$ zinc price rose by 8% compared to
2002 to US$837/tonne in 2003, the equivalent 2003 average € zinc price fell by
10% compared to 2002 to €747/tonne.

'ARCON recorded gross value of metal sales of 45.4 million in 2003 representing
a marginal increase on the previous year (43.4 million in 2002). Despite a 22%
rise in concentrate sales, smelter deductions at 23.1 million in 2003 were
broadly similar to last year (2002 - 23.3 million) due to lower treatment
charges.

'During 2003, exploration of the exceptional R Zone was completed. The zinc
grade of the remaining reserves and resources are the second highest in the
Western World. In 2004 we will continue the gravity survey to the south-west of
the mine (which remains largely unexplored), carry on with drilling of gravity
anomalies and continue infill drilling in the area in the immediate vicinity of
the mine.

'A planning application for development of the R Zone was submitted in May 2003
and a draft planning permission was received from Kilkenny County Council in
December 2003. The final planning permission is expected during the second
quarter of 2004. The Directors have declared the R Zone commercial for the
purposes of calculating depreciation on a unit of production basis and
accordingly depreciation has been charged at €4.1 million (2002 - €7.2 million).

'In 2004, we expect to increase substantially the gross sales revenue through
higher zinc grades, higher milled tonnage (following completion of the R Zone
access), lower treatment charges and significant lead sales following the
forthcoming completion of the upgrade to the lead circuit. This should result in
a meaningful improvement to our financial result for the year.'

For further information:

Pauline McAlester        Keith IronsKevin Ross
Murray Consultants       Bankside Consultants LtdARCON
Tel: +353 (1) 498        Tel: +44 (207) 444 4155Tel: +353 (56) 883
0300                     7100

                                                2003                 2002
                                               €'000                €'000

Gross value of metal sold                     45,470               43,357
Smelting charges and deductions              (23,115)              (23,287)
                                              ______                 _____

Turnover                                       22,355               20,070
                                               ______               _____

Production costs                              (21,440)             (21,348)
Depreciation                                   (4,121)              (7,223)

Cost of sales                                 (25,561)             (28,571)
                                    
Gross loss                                     (3,206)              (8,501)
Operating expenses                             (5,201)              (5,250)
Mineral exploration costs                        (230)                (346)
                                                 ______                _____

Operating loss                                 (8,637)             (14,097)
Forgiveness of debt and related interest            -                  807
                                                  _____               ______ 

Loss on ordinary activities before interest    (8,637)             (13,290)
Interest receivable and similar income               52                    72
Interest payable and similar charges             (1,097)               (1,438)
                                                  _____                 _____

Loss on ordinary activities before taxation      (9,682)              (14,656)
Tax on loss on ordinary activities                   -                      -
                                                  _____                ______

Retained loss for the year                       (9,682)              (14,656)

Profit and loss account, at beginning of year   (95,465)              (80,809)
                                                 ______                ______

Profit and loss account, at end of year        (105,147)               (95,465)
                                                                                                                     

Loss Per Ordinary Share, basic and diluted      €(0.006)               €(0.019)
                                                                                                                       

All activities were generated from continuing operations.

                                             Group                Company
                                       2003        2002     2003         2002
                                       €'000      €'000    €'000         €'000
Fixed assets
Mineral interests                     19,251      22,599     354          297
Tangible assests                       8,767      11,027      21           29
Financial assets                           -          -    47,985       64,382
                                       ______      _____   ______       _______
                                       28,018     33,626  48,36068       64,708
                                       ______     ______   ______       _______
Current assets
Stocks                                 9300       1,154       -            -
Debtors                               1,531       1,172      59            90
Cash at bank and in hand              3,880       1,885     1,241          16

                                      _____      ______     _____         ____
                                      6,341      4,211      1,300          106
Creditors: Amounts falling
due within one year                 (14,457)    (10,284)   (1,440)      (1,434)

                                     _______      _____    ______       ______

Net current liabilities              (8,116)     (6,073)     (140)      (1,328)

                                     ______       ______   ______        ______

Total assets less current            19,902       27,553   48,220        63,380
liabilities

Creditors: Amounts falling
due after more than one year        (8,912)      (8,681)  (14,336)      (14,545)

Provision for liabilities           (4,556)      (4,530)        -            -
and charges                         ______        ______   _______      _______

Net assets                          6,434         14,342   33,884        48,835


Capital and reserves
Called up share capital              31,770       30,189   31,770        30,189 
Capital conversion reserve            1,002        1,002    1,002         1,002
Share premium                        81,359       77,608   81,232        77,481
Profit and loss account            (105,147)     (95,465) (80,120)      (59,837)
Foreign currency translation                                                                         
reserve                             (2,550)      1,008        -            -      
                                   ________    ________   _________    ________


Shareholders' funds - equity         6,434       14,342    33,884        48,835



                                                  2003                    2002
                                                  €'000                  €'000


Net cash outflow from operating activities        (3,088)               (6,723)

Returns on investments and servicing of finance
Interest received                                    26                   116
Interest paid                                       (73)                 (334)

                                                    ______               _____

                                                    (47)                  (218)
                                                   ______               _______
Taxation                                             -                      -
                                                   ______               _______


Capital expenditure and financial investment
Expenditure on mineral interests                  (2,742)             (1,302)
Purchase of tangible fixed assets                  (1,290)            (1,825)
Cash paid for restoration costs                       (81)               (67)
                                                    _____               ______ 
                                                   (4,113)              (3,194)
Net cash outflow before use of liquid resources
and financing                                      (7,248)             (10,135)

Financing
Proceeds from issue of share capital, net           5,332               28,141
Finance lease payments                              (478)                  (82)
Fairfield facility advances                         4,457                 1,170
Indexia loan advances                                  -                  3,006
Repayment of Indexia loan                               -                (4,308)
Repayment of bank loans                                 -               (15,858)
                                                      _____               ______
                                                      9,311               12,069

Increase in cash in the year                        2,063                 1,934 
                                                    =====                 =====




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FR PUUPGCUPCGMB                                                                                                                                                                                                                                             

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