African Mining and Exploration plc.
("AME" or "the Company")
Financial Results for the Year Ended 31 December 2011
African Mining & Exploration plc (AIM: AME), the AIM listed gold exploration company operating in West Africa, announces its audited financial results for the year ended 31 December 2011.
Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial Statements are expected to be posted to shareholders this week and will also be made available to download today from the Company's website www.ameplc.co.uk.
The Annual Report and Financial Statements will also be made available for inspection at the Company's business office during normal business hours on any weekday. The Company's business office is at 2nd Floor, 3 Shepherd Street, W1J 7HL.
Annual General Meeting
The Company's next Annual General Meeting ("AGM") will be held at the offices of the Company's solicitors, Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 1AP on 15 June 2012 at 11.00 a.m. and a formal Notice of AGM and proxy form are expected to be posted to shareholders this week and will be available to download today from the Company's website at www.ameplc.co.uk.
Enquiries:
| African Mining & Exploration plc. | 44 (0)207 499 5881 |
| Mark Jones (Chief Executive Officer) | |
| | |
| Singer Capital Markets Limited (Nomad and Broker) | 44 (0)20 3205 7500 |
| James Maxwell / Jenny Wyllie | |
The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010, but is derived from those accounts. The auditors have reported on those accounts; their report was unqualified and did not draw attention to any matters by way of emphasis.
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2011
In last year's inaugural Chairman's Statement I was able to describe the achievements the Company had made in a relatively short space of time. It is therefore with some frustration, that despite the Company pursuing a solid strategy, the expected benefits have not yet fully materialised. However, I believe that a platform has been created which should prove fruitful as we move forward. The Company's recent investment in RAB and auger drilling capability is expected to provide effective reconnaissance exploration capability and should help counter the shortage of basic drilling equipment available from subcontractors in the region. The delay of its eventual deployment to the field hampered our progress on the ground. However, the drill rig is now fully operational and provides the Company with great flexibility.
West Africa Operations
Our Company is focused on the exploration and subsequent development of gold assets in West Africa. Mali, our initial country of operation, is the third largest gold producer in Africa and has a long and rich history of gold discoveries. Our West African operation is based in Bamako, the Capital of Mali, a country widely regarded as a model of development and democracy in West Africa. Recent events in Mali have seen a military coup d'état at the end of March, followed by sanctions imposed by ECOWAS (Economic Community of West African States) which were subsequently lifted, and an interim President, Dioncounda Traore who was previously the parliamentary speaker, has been installed. Elections are scheduled for the end of May. I am very pleased to report that all employees are safe, as is the Company's property and equipment, and the impact on the Company's exploration efforts so far was minimal. Indeed the Company was able to commence an auger drilling programme on the Karan permit area in early April. However, in light of some continued unrest in Bamako some disruption to our drilling programme may occur, especially due to shortages in fuel supplies.
Exploration
Although we believe that our current permits in Mali, Karan and Diatissan, have the potential for providing a significant resource base we are actively seeking opportunities to expand our areas of interest in additional geologically prospective areas. Initial results from the Karan drilling programme, which reported low grade gold halos had been intersected along with high grade intercepts of up to 11 g/t Au, were below expectations but have positively contributed to the Company's understanding of the permit area. Five additional drilling targets have been identified and a drilling programme has commenced.
The investment in our operational and drilling capability is being viewed very favourably by potential joint venture partners, and indeed we have recently signed an MOU on a prospective permit area which lies within the Yanfolila Greenstone Belt in Southern Mali.
Financial
At the time of Admission to AIM in November 2010, the Company raised £4.3 million net of expenses, this was augmented by £1.6 million received following the exercise of warrants in the first half of 2011. This has provided the Company with a healthy cash balance which continues to be utilised principally to conduct detailed exploration programmes on the Company's permits in Mali.
Social responsibility
The Company and its management are cognisant of its social and environmental responsibilities in the areas in which we operate and are committed to the development and maintenance of good relationships with stakeholder communities. To this end, the board has formulated a Community Relations policy which focuses on the positive interaction with the local community especially bearing in mind the significant artisanal mining which is taking place. This policy was implemented and already forms the basis for effective community relations in our permit areas as required by the Government.
Market performance
Although the gold market continues to be strong this was not reflected in stock market performance. As at mid April 2012 the AIM mining sector index was trading at almost 30% below the level of 1 January 2011. The Company's share price performance has been no exception to this trend. Unfortunately the coup in Mali added to uncertainty in the region and negatively affected investor confidence. However, with the quantitative easing measures implemented in the US, the UK and elsewhere, and the debt crises in particularly the Eurozone during this year investment interest in gold remains high.
Board changes
Since I last reported Martyn Churchouse, the Company's Technical Director, resigned from the Company due to conflicting commitments which would have prevented him from properly fulfilling his duties and providing the level of attention required by the Company.
Outlook
The organisation's enhanced and growing capacity provide a foundation that allows the Company to move forward positively in 2012 and I believe that we are in a stronger position compared with the same time last year. I would like to thank all the Company's stakeholders for their strong support in the last year and I look forward to the coming year, which I hope will be exciting and rewarding for the Company and its shareholders.
Stephen D Oke
Chairman
Date: 4 May 2012
CHIEF EXECUTIVE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2011
During the period the Company has maintained a clear focus on its strategy of creating a gold focussed exploration company concentrating on quality early exploration opportunities in West Africa. A key objective in achieving this has been to build a strong operational capability and setting up a network of relationships in the region. In addition we have investigated a number of 3rd party permit opportunities in Mali, Guinea and Senegal in order to diversify our exploration portfolio.
Acquisition of Drilling Rig
Following the completion of the initial 12,400 metre RC drilling campaign, the Company intended to undertake a RAB drilling programme to provide the necessary data on existing targets to outline where more RC and Core drill needed to be done. In addition, the Company had targeted an Auger drilling programme on both Karan and Diatissan permits to identify additional drill targets. However the scarcity of drill rigs with this capability in West Africa, combined with the demands for longer term drilling contracts made the acquisition of our own capability very attractive. The board therefore made the decision to acquire a RAB and auger drill rig.
The drill rig, which is mounted on an all-terrain vehicle, is capable of both RAB and Auger drilling and can drill down to depths greater than 100 metres in favourable ground conditions. Its rugged design and 4x4 functionality makes it highly mobile and will enable it to access rough terrain and road conditions conventional truck mounted drill rigs cannot operate in. This should enable the Company to operate during periods of seasonal rain thereby extending the length of the effective annual drilling season. With the acquisition of support equipment, a mobile exploration camp and the investment in ground magnetic survey equipment, AME has the capability to sample horizons beneath the laterite cover that masks most of the West African Gold Belt, simply and cost effectively. In areas which show enhanced prospectivity, the Company plans to undertake follow up RC and diamond core drilling.
The company's investment in the drilling rig and support equipment puts us in a strong position to negotiate JV opportunities with holders of prospective ground and capitalise on our growing contacts in West Africa. The effectiveness of this strategy was confirmed by the signing of a Memorandum of Understanding (MOU) with Sahelienne des Mines SARL in April 2012. Sahelienne des Mines is, a Malian registered company that owns the Tekeledougou exploration permit in Southern Mali. The MOU gives AME an exclusive option to enter into an exploration joint venture following a six month due diligence period during which time AME will complete a preliminary exploration programme.
Operations
Karan Permit
The Karan permit area consists of a single, rectangular exploration permit for a total of 250km2, and is located approximately 90km southwest of the Malian capital, Bamako, on a metalled road.
In the first half of 2011 the Company conducted a reverse circulation drilling programme of 12,400 metres focusing on a number of priority targets. The evidence accumulated to date, from drilling data and other sources, suggests the presence of gold mineralisation associated with a regional shear zone that extends north to south across the Karan permit with smaller cross-cutting and sub-parallel faults occurring within this structural corridor. The next step is to further enhance our understanding of the underlying geology which is complicated by the presence of a laterite cover and a thick saprolite layer of highly weathered rocks which extends in some cases to 100 metres in depth. The Company's recently acquired drilling capability is an essential tool in achieving this.
The outline plan for the Karan permit is that RAB drill fences will be completed at the three previously drilled targets of Mana, Fintakourouni and Kouroudjin to provide full cross-structure coverage, with additional RAB drilling at two targets near Kouroudjin, as identified from the Induced Polarisation (IP) geophysical survey, with follow up drilling taking place once the assay results of the initial RAB drilling have been processed.
A ground magnetic survey over the Farague geochemical anomaly will also be conducted to provide structural information prior to auger drilling. The same approach will be used on several additional targets identified by Newmont in 2011.
Kouroudjin, Fintakarouni and Mana Targets
RAB drill fences have been planned to further test mineralisation identified during 2011's RC drilling. Fences will be placed with an azimuth of 252-72°, perpendicular to the structure indicated by the artisanal pits, field structural measurements and regional geophysics. Three fences have been planned at each of the Mana, Fintakourouni and Kouroudjin targets, centred upon the best intercepts from the RC drilling. Nine RAB holes have been planned for each fence, with 50m hole spacing, the hole depths will be decided on site and the number of holes at each fence amended based on the drilling results and observations.
IP work yielded some interesting results and correlations with the best intercepts from the RC drilling at RC11KDJ001 and 012. These anomalies appear to have a NNW strike and will be tested initially by two RAB holes as recommended by the IP consultant. These RAB holes drill into a chargeability anomaly, which is twinned by another similar, yet stronger anomaly to the west.
Farague Target
The Farague area contains the most strongly anomalous geochemical results within the Karan Permit. It was tested with a termite mound sampling programme in Q2 of 2011 which further delineated an anomalous zone. This area will be the subject of ~ 20 line km of ground magnetometer survey prior to drilling. The results of this geophysical survey will be used in conjunction with the geochemical results to create a plan for drilling an auger grid.
Diatissan Permit
The Diatissan permit is located in the West of Mali in a greenstone belt that includes the world class Sadiola and Loulo mines.
In order to identify RAB drill targets at this permit, which contains several areas with geochem anomalies, AME commenced its planned work programme last year, whereby the previously excavated trenches were cleaned and re-sampled. The re-sampling exercise proved difficult due to the poor quality of mapping information from the original study. GPS co-ordinates of the original study did not match up with the re-trenching data, so meaningful correlation between the two sets of data was not possible. On the basis that AME has greater confidence in the data from its own programme it will use this data in conjunction with a ground magnetic survey over the majority of the permit area to define drill targets. The ground magnetic survey has just been finished and the preliminary interpretation has already defined one drill target at a structure that parallels the general trend over a distance of 400 to 600m. Further analysis of the data will be undertaken with the intention of identifying additional drill targets.
Initial drilling at Diatissan is planned on at least four target areas, after the drilling programme at Karan. Two targets have anomalous gold in soil and stock works of quartz veining in trenches. Each target will initially be drilled with five RAB holes perpendicular to the structural trend. A third target area where another five RAB holes are planned is defined by distinct ridges where tourmaline sandstone is present. The fourth target is at the magnetic anomaly. Subsequent targets will be defined upon completion of the interpretation of the ground magnetometer survey data.
Guinea Reconnaissance Permits
In May 2011 AME was granted three reconnaissance permits in Guinea. Following geological investigation, it was concluded that the permits were unlikely to yield an economic gold resource and will not be pursued. AME will continue to monitor opportunities to enhance its exploration portfolio.
Social Responsibility
We continue to enjoy excellent relationships with the local population at both of our exploration permits. This has developed through our local subsidiary Tobon Tondo over a period of almost 16 years at Diatissan and over 7 years at Karan. The geological studies and preparation for the planned drilling programme, which began at Karan in April, have provided frequent opportunities to regularly engage with the local community in line with AME's Community Relations Policy.
Outlook
Our new operational drilling capability puts AME in a stronger position to identify potential resources at low cost whilst at the same time allowing AME to react quickly to opportunities. This provides AME with a strong competitive advantage which opens up opportunities to establish resource potential on both the Company's existing properties, as well as any prospective properties under JV agreements. I am confident that the Company will start to gain traction as a result of the decisions and actions taken to date.
Mark C Jones
Chief Executive Officer
Date: 4 May 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011
| | | | 2011 £ | | 2010 £ |
| | | | | | |
| Revenue | | | - | | - |
| | | | | | |
| Administrative expenses | | | (1,530,297) | | (761,865) |
| | | | | | |
| OPERATING LOSS | | | (1,530,297) | | (761,865) |
| | | | | | |
| Finance income | | | 19,445 | | 2,090 |
| | | | | | |
| LOSS BEFORE TAX | | | (1,510,852) | | (759,775) |
| | | | | | |
| Taxation | | | - | | - |
| | | | | | |
| LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT | | |
(1,510,852) | |
(759,775) |
| | | | | | |
| OTHER COMPREHENSIVE INCOME | | | | | |
| Exchange gains/(losses) arising on translation of foreign operations | | | 5,166 | | (10,501) |
| | | | | | |
| OTHER COMPREHENSIVE INCOME FOR THE YEAR | | | 5,166 | | (10,501) |
| | | | | | |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR | | | | | |
| ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT | | | (1,505,686) | | (770,276) |
| | | | | | |
| Loss per share attributable to equity owners of the parent expressed in pence per share: Basic and diluted |
| |
(1.84) | |
(2.88) |
| | | | | | |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2011
| | | | 2011 £ | | 2010 £ |
| ASSETS | | | | | |
| NON-CURRENT ASSETS | | | | | |
| Intangible assets | | | 1,167,560 | | 281,883 |
| Property, plant and equipment | | | 182,726 | | 40,885 |
| | | | | | |
| TOTAL NON-CURRENT ASSETS | | | 1,350,286 | | 322,768 |
| | | | | | |
| CURRENT ASSETS | | | | | |
| Trade and other receivables | | | 49,881 | | 78,849 |
| Cash and cash equivalents | | | 3,378,474 | | 4,004,606 |
| | | | | | |
| TOTAL CURRENT ASSETS | | | 3,428,355 | | 4,083,455 |
| | | | | | |
| TOTAL ASSETS | | | 4,778,641 | | 4,406,223 |
| | | | | | |
| EQUITY AND LIABILITIES | | | | | |
| SHAREHOLDERS' EQUITY | | | | | |
| Share capital | | | 842,133 | | 708,115 |
| Share premium | | | 4,997,699 | | 3,429,561 |
| Foreign currency reserve | | | 13,886 | | 8,720 |
| Warrant reserve | | | 579,500 | | 708,115 |
| Share based payment reserve | | | 407,133 | | 67,771 |
| Merger reserve | | | 572,314 | | 572,314 |
| Retained earnings | | | (2,705,408) | | (1,323,171) |
| | | | | | |
| TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | | |
4,707,257 | |
4,171,425 |
| | | | | | |
| LIABILITIES | | | | | |
| CURRENT LIABILITIES | | | | | |
| Trade and other payables | | | 71,384 | | 234,798 |
| | | | | | |
| TOTAL LIABILITIES | | | 71,384 | | 234,798 |
| | | | | | |
| TOTAL EQUITY AND LIABILITIES | | | 4,778,641 | | 4,406,223 |
The financial statements were approved by the Board of Directors on 4 May 2012 and were signed on its behalf by:
........................................................................
Mark C. Jones
Chief Executive Officer
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011
| |
Share capital |
Share premium |
Foreign currency reserve |
Warrant reserve | Share based payment reserve |
Retained earnings |
Merger reserve |
Total equity |
| | £ | £ | £ | £ | £ | £ | £ | £ |
| | | | | | | | | |
| At 1 January 2010 | 123,615 | - | 19,221 | - | - | (355,281) | 312,116 | 99,671 |
| Issue of share capital | 584,500 | 4,000,000 | - | 500,000 | - | - | 260,198 | 5,344,698 |
| Fundraising costs | - | (570,439) | - | - | - | - | - | (570,439) |
| Bonus issue of warrants |
- |
- |
- |
208,115 |
- |
(208,115) |
- |
- |
| Total comprehensive expense for the year |
- |
- | (10,501) | - | - |
(759,775) | - |
(770,276) |
| Share based payments | - | - | - | - | 67,771 | - | - | 67,771 |
| | | | | | | | | |
| At 31 December 2010 | 708,115 | 3,429,561 | 8,720 | 708,115 | 67,771 | (1,323,171) | 572,314 | 4,171,425 |
| | | | | | | | | |
| Issue of share capital | 134,018 | 1,559,670 | - | - | - | - | - | 1,693,688 |
| Fundraising costs | - | 8,468 | - | - | - | - | - | 8,468 |
| Exercise of warrants | - | - | - | (128,615) | - | 128,615 | - | - |
| Total comprehensive expense for the year |
- |
- |
5,166 |
- |
- |
(1,510,852) |
- |
(1,505,686) |
| Share based payments | - | - | - | - | 339,362 | - | - | 339,362 |
| | | | | | | | | |
| At 31 December 2011 | 842,133 | 4,997,699 | 13,886 | 579,500 | 407,133 | (2,705,408) | 572,314 | 4,707,257 |
The following describes the nature and purpose of each reserve within owners' equity
Reserve Description and purpose
Share capital Amounts subscribed for share capital at nominal value
Share premium Amounts subscribed for share capital in excess of nominal value
Warrant reserve Fair value of the warrants issued.
Merger reserve Amounts resulting from acquisitions under common control.
Foreign currency reserve Gains/losses arising on retranslating the net assets of Group
operations into Pound Sterling.
Share based payment reserve Represents the accumulated balance of share based payment charges
recognised in respect of share options granted by African Mining
and Exploration Plc, less transfers to retained losses in respect of
options exercised.
Retained earnings Cumulative net gains and losses recognised in the consolidated
statement of comprehensive income.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011
| | | | 2011 £ | | 2010 £ |
| Cash flows used in operating activities | | | | | |
| Loss for the year | | | (1,510,852) | | (759,775) |
| Depreciation & amortisation charges | | | 19,690 | | 3,363 |
| Share based payment reserve charge | | | 339,362 | | 67,771 |
| Shares issued in lieu of payment to extinguish liabilities | | | 86,000 | | 169,737 |
| Finance income | | | (19,445) | | (2,090) |
| Cash flow from operating activities before changes in working capital | | (1,085,245) | | (520,994) | |
| | | | | | |
| Decrease/(increase) in trade and other receivables | | | 28,968 | | (78,820) |
| (Decrease)/increase in trade and other payables | | | (154,946) | | 114,844 |
| | | | | | |
| Net cash used in operating activities | | | (1,211,223) | | (484,970) |
| | | | | | |
| Cash flow used in investing activities | | | | | |
| Purchase of intangible fixed assets | | | (920,476) | | (68,010) |
| Purchase of tangible fixed assets | | | (165,085) | | (40,480) |
| Interest received | | | 19,445 | | 2,090 |
| | | | | | |
| Net cash from investing activities | | | (1,066,116) | | (106,400) |
| | | | | | |
| Cash flow from financing activities | | | | | |
| Amount repaid to Directors | | | - | | (10,599) |
| Issue of IPO shares net of costs | | | - | | 4,429,561 |
| Issue of other shares | | | - | | 168,053 |
| Exercise of warrants | | | 1,607,688 | | - |
| | | | | | |
| Net cash from financing activities | | | 1,607,688 | | 4,587,015 |
| | | | | | |
| (Decrease)/increase in cash and cash equivalents | | | (669,651) | | 3,995,645 |
| Cash and cash equivalents at beginning of year | | | 4,004,606 | | 4,294 |
| | | | | | |
| Exchange differences | | | 43,519 | | 4,667 |
| | | | | | |
| Cash and cash equivalents at end of year | | | 3,378,474 | | 4,004,606 |
| | | | | | |
This information is provided by RNS