MMS.L Regulatory News (MMS)

21 Sep 2006 07:01

Maghreb Minerals PLC21 September 2006 For immediate release PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2006 Maghreb Minerals Plc ('Maghreb' or 'the Company'; stock code: MMS), theAIM-listed exploration company developing base and precious metal deposits inNorth Africa, announces its results for the year ended 30 June 2006. HIGHLIGHTS • Completed 25 drill holes during the reporting period totalling 7,129metres in Tunisia and 5 drill holes in Algeria totalling 823 metres representingan average of approximately 700 metres per month. • At Fej Lahdoum, drilling results confirmed previously reported zincand lead mineralisation on Dar N'Hal Sud and achieved the aim of confirming thedown-dip and lateral extent of the mineralisation over a strike length of 1,200metres between the Dar N'Hal Nord mine and the Dar N'Hal Sud deposit. • At Djebba and the new Djebel Goraa exploration permit to the north andeast of Djebba, the drilling programme started in 2005, tested stratigraphy,verified the grade of the previously estimated 2.7 Million tones ("Mt") resourceand traced a mineralised breccia zone contact between Cretaceous and Triassicrocks, a possible feeder structure, over part of its 3 kilometres strike length. • A gravity and magnetic survey was completed in two phases at Djebbaand a north and east extension over the new exploration permit Djebel Goraa.This delineated the known extent of Zn and Pb mineralisation, indicating areasof anomalous high gravity extending beyond it to the north and east yet to betested by drilling. A drilling programme commenced in September 2006 to testthe areas of anomalous gravity. • The exploration and drilling programme started up at the Tan Chaffaocopper and gold prospect in Algeria in January 2006. The programme confirmedthe presence of zinc-copper-gold mineralisation. A gravity survey has recentlybeen completed and results are awaited. Commenting on the results, Chairman Gordon Riddler said: "The period has been one of significant progress. We continue to expand theareas of known mineralisation in Tunisia and anticipate publishing new resourcefigures for these deposits. In addition, we are actively seeking to expand ourportfolio of potential mine development projects. The past year has also seeninterest from other companies that wish to partner with us and we continue toevaluate these opportunities. Following the fund raising in August we havesufficient monies to undertake our planned programmes. Overall, I am verypleased with the progress made and look forward to continued good news forshareholders in the coming year". ENQUIRIES: Maghreb Minerals PlcGordon Riddler, Executive Chairman Tel: 020 7556 7038 Hanson Westhouse LLPTim Metcalfe / Richard Morrison Tel: 0207 601 6100 Bankside Consultants Tel: 0207 367 8888Michael Padley / Sam Allen Notes to editors: Maghreb Minerals Plc is an AIM listed exploration company developing both baseand precious metal deposits in Tunisia and Algeria where it holds the rights toseveral licence areas. The Company is targeting base metals, mainly lead andzinc, but has also identified areas containing barite and fluorite in Tunisiaand gold and copper in Algeria. For further information, please visitwww.maghrebminerals.co.uk The technical content of this press release has been reviewed by the ExecutiveChairman of Maghreb Minerals plc, Gordon Riddler, BSc, MBA, FIMMM, CEng, CSci,CMkt, MCIM, MCMI who has 40 years of experience in the mining sector and is aFellow of the Institute of Materials, Minerals and Mining, a recognisedprofessional association. CHAIRMAN'S STATEMENT Maghreb has made steady progress on its exploration permits in Tunisia andAlgeria during the year continuing its exploration for Zn, Pb and Au, moredetails of which can be found in the Operations Report. The exploration programme in Tunisia, carried out by our subsidiary High MarshHoldings Limited ("HMH") at Fej Lahdoum and Djebba, combined with the computercompilation of a large quantity of historical mining and exploration data nowavailable from the government authorities, continues to support the view thatthese are excellent Zn and Pb prospects that can go forward to thepre-feasibility stage in due course. Work is starting on the Group's otherexploration permits which also hold promise through the application of modernexploration methodology in former mining areas. In Algeria, the initial drillingprogramme, carried out by the group, has confirmed the presence ofzinc-copper-gold mineralisation, albeit at levels somewhat below expectations.Nonetheless, this is a highly prospective area and a decision on the approach tothe next phase will follow the receipt of results from the recently completedgeophysical survey. The Board is encouraged by the results of its explorationprogrammes undertaken to date. Looking ahead to the coming year, the Group is developing its strategy onseveral fronts. It has a programme to advance work on existing explorationpermits and extend its portfolio of exploration properties. In addition, theGroup is strengthening its project portfolio through effective permit managementand proactively seeking opportunities to develop, alone and in joint venture,early phase mining and processing operations. The Group will continue to ensureworking capital levels are adequate to undertake the work contemplated. The Group is acquiring four new exploration permits at Zaghouan in NorthernTunisia. The Zaghouan fluorite mine, which operated until 1990, has anIndicated Resource of 4Mt of fluorite. In addition, the Group is completing ajoint venture agreement with the O.N.M. for an exploration permit which coversthe former Bou Jabeur mining concession where the Office National des Mines ("O.N.M.") has previously established a 5.8Mt resource of high grade barite withassociated fluorite, zinc and lead mineralisation, grading 3.60 per cent Zn, 1,5per cent, Pb, 33 per cent BaSO4, 9 per cent CaF2. The Group has a strong focus on acquiring additional attractive explorationpermits, delivering exploration results on existing projects and developingcorporate opportunities, all aimed at the near term move from exploration todevelopment and mining with the goal of creating significant value forshareholders. I believe the Group has the team and projects in place to deliveron these goals. In order to pursue these opportunities, in August 2006, the Group raised£894,000 before costs by an issue of new ordinary shares and warrants. The newordinary shares have been listed on AIM whilst the warrants remain unlisted,consequently the Group has some £1.1 million in cash resources as at 31 August2006 available to pursue the next phase of its development programme in Tunisiaand Algeria. Finally, I would like to thank all members of the corporate and explorationteams of the Group for their diligent work carried out over the last year andfor the co-operation and support of the government authorities in Tunisia andAlgeria. Gordon P. Riddler 21 September 2006ChairmanMaghreb Minerals Plc OPERATIONS REPORT TUNISIA Exploration Permits Permits Renewed Further geological work on the Koudiat El Loutia, Djebba, Ouled Moussa and JebelFej Lahdoum exploration permits was reported to Direction General des Mines ("D.G.M.") and these have been renewed for a period of three years. Permits Relinquished During the last financial year, a total of four exploration permits wererelinquished in Tunisia, namely Kef Dougga, Kef Adhama, Aim Jemmala and KoudiatSidii. These permits generated results that did not justify further investment,particularly when compared with the prospectivity of the other explorationpermits and new acquisitions in the portfolio. The total land released throughnon-renewal of these permits was 140km(2). Relinquishing permits in this fashionis normal practice and is expected by the licensing authority. Permits Acquired Djebel Goraa The Group strategy was to concentrate on the Djebba exploration permit in 2006.The first phase of the gravity survey, which was completed in May 2006, led tothe extension of the original Djebba exploration permit, to the north and eastto cover emerging gravity anomalies which could indicate a similar degree of Znand Pb mineralisation as seen on the original permit. The new Djebel Goraaexploration permit is 16km(2) and is the target for detailed exploration becauseof its mineral potential. Zaghouan The Group has acquired four exploration permits around the town of Zaghouan inNorth-Eastern Tunisia: Hammam Zriba - Jebel Guebli, Jebel el Kohol, Sidid etTaia and Jebel el Messella. The permits cover a total area of 52km(2). The Hammam Zriba - Jebel Guebli permit covers the historic Zaghouan fluoritemining and processing operations, which is reported to have produced between35,000 and 40,000 tonnes of fluorspar per annum, until it closed in 1990. Theclosure was the result of a period of exceptionally low fluorspar prices due tohigh level of exports of fluorspar by Chinese producers at that time. The risein demand for fluorspar has seen prices rise from approximately US$100 per tonnein 1990 to current levels of approximately US$225 per tonne. The indicated resources on the Hammam Zriba - Jebel Guebli permit were reportedin 1988 to be to the order of 5Mt with a grade between 15 per cent and 30 percent CaF2. The Group believes that the strong rise in international fluorspar prices offersthe potential to re-establish profitable mining operations at Zaghouan at arelatively modest capital cost. The Group believes that a mining operation atZaghouan has the potential to generate annual revenue of around US$9 million perannum from fluorite production in due course, based on historic annualproduction rates of chemical grade fluorspar. To strengthen the Group's ability to evaluate and subsequently develop thisopportunity cost effectively, the Group proposes to enter into negotiations on ajoint venture with established mining companies to jointly evaluate re-openingthe Zaghouan mine. The Group acquired the Zaghouan properties in the face of intense competitionfrom other interested parties. The Group believes that Zaghouan offers an exciting possibility for Maghreb tomove into early production. Moreover, in addition to fluorite, the permits covering an area totalling 52km(2) are prospective for barite, zinc and lead mineralisation. Permits under Negotiation The Group has reached agreement with the O.N.M. to acquire a 95 per centinterest in the exploration permit covering the previous mine concession area atFej Lahdoum. The Group completed its exploration obligations under the optionagreement covering the prior mining concession at Fej Lahdoum in late 2005.Title to an exploration permit covering the previous mining concession has beengranted in the name of the O.N.M. The terms of the Group's earn-in rights to the Fej Lahdoum exploration permithave been agreed with the O.N.M. Under the agreement, the Group will earn a 95per cent beneficial interest in the exploration licence with additional rightsto increase the interest to 100 per cent. The agreement is expected to besigned shortly. A similar agreement is being negotiated for the exploration permit which coversthe former mining concession at Bou Jabeur. In addition to the known high gradeZn and Pb mineralisation at Bou Jabeur, the O.N.M. previously established aresource on the eastern end of the mining concession, known as the Gite Estdeposit. The resource established at Gite Est was 5.8Mt of high-grade baritewith associated fluorite, zinc and lead mineralisation at a grade of 3.6 percent Zn, 1.5 per cent Pb, 33 per cent BaSO4 and 9 per cent CaF2. Subsequently amining operation established on the Gite Est deposit focused on Zn and Pbproduction with by-product barite production. The mine was put on a care andmaintenance basis in the early 2000s due to then prevailing low metal prices. Exploration Programme and Results The Group has made substantial progress in furthering its exploration programmein Tunisia where it is evaluating Zn and Pb prospects. Gravity surveys havebeen completed at Djebba, Djebel Goraa and Ouled Moussa exploration permits. Atotal of 25 drill holes were completed in Tunisia at Fej Lahdoum and Djebba.The total metres drilled during the reporting period, was 7,129 metres,representing an average of 700 metres per month. In addition, four drill holesat Djebba (MDJ1 - MDJ4) and one at Fej Lahdoum (MFL8) were included in themeterage stated in the last Annual Report for 2005. A specialist report on apre-drilling geological appraisal in the northern part of the Group's Jebel FejLahdoum exploration permit was received in January 2006. Fej Lahdoum The drilling in 2005 confirmed and extended the known high-grade Zn and Pbmineralisation at the Fej Lahdoum, Dar N'Hal Sud and Dar N'Hal Nord deposits. The Phase 1 drilling at the Fej Lahdoum prospect was completed in the lastquarter of 2005. The Group has reached agreement with the O.N.M. to acquire 95 per cent interest,with additional rights to increase this to 100 per cent in the explorationpermit covering the previous mine concession area at Fej Lahdoum. Title to anexploration permit covering the previous mining concession has been granted inthe name of the O.N.M. The agreement is expected to be signed shortly. For the complete programme (including MFL1 to MFL8 drilled in the last financialyear), a total of twenty four drill holes (MFL1 to MFL24) were completed for atotal of 5,244 metres with depths ranging between 80 metres and 465 metres. Znand Pb mineralisation was intersected in seventeen drill holes. The drillingprogramme has met the Group's 3,000 metre drilling commitment to the TunisianGovernment. Drill holes MFL1 - MFL7 were drilled around Dar N'Hal Sud. MFL2 confirmed themineralisation previously identified by the O.N.M. The Dar N'Hal Sud measuredresource was estimated by the O.N.M. at 400,000 tonnes at a grade of 7.7 percent Zn and 5.6 per cent Pb (13.3 per cent combined Zn and Pb). The Dar N'HalSud deposit is a fault offset extension, situated some 100 metres south-east ofthe main Dar N'Hal Nord deposit. Work undertaken in 1991 estimated a reserve of1.4Mt at a grade of 6.0 per cent Zn and 5.6 per cent Pb at Dar N'Hal Sud. Ten drill holes (MFL8 to MFL17) were targeted principally to confirm thedown-dip and lateral extent of the mineralisation over a strike length of 1,200metres between the Dar N'Hal Nord mine and the Dar N'Hal Sud deposit. Thedrilling confirmed mineralisation but indicated structural complexity. Seven drill holes (MFL18 to MFL24) in un-tested ground to the north of the DarN'Hal Nord Mine, extended the projection of the surface area of the mineralresource at the Dar N'Hal Nord deposit by around 20 per cent. Three of thesedrill holes also verified the results from previous O.N.M. drill holes DNH25 (7metres @ 16.4 per cent combined Zn and Pb) and DNH26 (5.8 metres @ 21.19 percent combined Zn and Pb). Seventeen of the twenty-four drill holes intersected Zn and Pb mineralisation.These were sampled and all assays have been received. Seven of these drill holesintersected significant Zn and Pb mineralisation and the best intervals are asfollows: Drill Hole From (m) To (m) Interval (m) Zn (%) Pb (%) Combined Zn+Pb (%)MFL2 129.50 131.50 2.00 5.76 3.89 9.65 135.50 138.50 3.00 10.72 3.13 13.85 144.50 153.50 9.00 5.33 3.88 9.21 of which 144.50 147.50 3.00 7.43 2.67 10.10 149.50 153.50 4.00 5.47 6.35 11.82MFL8 321.00 400.80 79.80 5 intervals ranging from 3 to 5 11.85of which 382.35 384.60 2.25 1.89 9.96MFL9 289.45 322.20 32.75 3 intervals ranging from 4.5 to 5.98 6.30of which 313.50 322.20 8.70 4.28 2.02MFL11 251.60 257.60 6.00 13.00MFL18 195.65 213.20 17.55 10.10 3.32 13.42 of which 197.65 199.35 1.70 16.38 8.54 24.92 204.30 206.50 2.20 18.70 5.36 24.06 209.70 212.90 3.20 22.32 9.09 31.41 229.25 233.70 4.45 6.34 7.89 14.23 of which 231.00 232.00 1.00 5.60 21.61 27.21 237.20 238.20 1.00 7.39 2.80 10.19MFL21 276.10 300.55 24.45 6.50 0.95 7.45 of which 282.00 285.65 3.65 10.26 1.57 11.83 284.30 285.65 1.35 19.84 3.76 23.60 291.55 293.65 2.10 12.24 1.73 13.97 299.40 300.55 1.15 18.03 0.69 18.72MFL 22 246.50 247.50 1.00 12.74 1.36 14.10 253.80 255.25 1.45 5.21 22.34 27.55 260.70 265.70 5.00 4.33 2.48 6.81 272.10 292.00 19.90 4.05 4.70 8.75 of which 275.50 278.50 3.00 7.93 3.86 11.79 280.00 283.00 3.00 6.18 19.97 26.15 The results from the Phase 1 drilling programme, along with a large amount ofinformation recently received from Dar N'Hal Nord mine archives, has highlightedstructural complexity associated with the high-grade Zn and Pb mineralisation atFej Lahdoum. The Group is reviewing and modelling the extensive data set. The area between the known Dar N'Hal Nord and Dar N'Hal Sud deposits is emergingas an important target for infill drilling with the potential to add significanttonnages to the known resources. As a consequence of the structural complexity, and to progress exploration onthe Djebel Fej Lahdoum exploration permit, the Group commissioned an externalreview of structural data for the area along strike to the north east of the DarN'Hal Nord mine. This area between Bou Kcherida and Tabet Lahssan, north of theFej Lahdoum mine area, was mapped during late July 2005 in order to identifyprospective mineralised zones ahead of exploration drilling. The results of themapping have been integrated with the results from previous O.N.M. drilling todetermine the regional structure and develop a model for the origin of the knownmineralisation in the area. There is considerable evidence that Cretaceous sedimentation was controlled byextensional fault tectonics, as in the Dar N'Hal Nord-Fernana area, although inother places there is evidence of passive flooding of an irregular, locallykarstified, Triassic erosional surface. The region has been extensively modifiedby Miocene thrusting and a key aspect of the review has been to identify thelocations and depths of these thrust planes. In addition, a number of areas haveundergone down-to-the-west, extensional collapse of the thrust-tip monoclines. Old workings in the area occupy sedimentary transition zone deposits, associatedfractured limestones or associated splay faults. Much of the mineralisationappears to be associated with and confined to the probable karst permeability inthe uppermost Triassic dolomites where they are present. It is believed thatthese deposits were fed by flow along the underlying thrust planes and,consequently, the proposed follow up drilling programme is heavily biasedtowards intercepting these thrust plane surfaces. In addition, there is evidenceof a possible buried extensional fault under the east flank of Bou Derouaiawhich will also be tested. An initial drilling programme of nine drill holesacross the region has been recommended. Djebba and Djebel Goraa At Djebba, previous work by the O.N.M. in the 1980s and by the Canadian GroupSIDAM-Minorex in 1987-1989, resulted in a positive feasibility study for an openpit mining operation at Djebba based on a resource estimate of 2.7Mt at a gradeof 6.14 per cent Zn and 3.34 per cent Pb within which there was an open pitreserve estimate of 800,000 tonnes at a grade of 6.59 per cent Zn and 4.09 percent Pb. Preliminary metallurgical test-work on samples from the principal hostMiocene Basin demonstrated good recoveries for Zn and Pb to concentrates usingconventional flotation. Drilling The drilling programme at Djebba started with four shallow drill holes in July2005 to test stratigraphy, to verify the grade of known mineralisation and toextend exploration to cover the postulated brecciated feeder structure for thepreviously delineated Zn and Pb mineralisation. In 2006 the drilling campaignwas designed to trace a major northerly trending brecciated feeder structure andto establish if it was mineralised. The best intervals were as follows: DRILL HOLE From To Interval Zn Pb Combined (m) (m) (m) (%) (%) Zn and Pb%MDJ1 23.05 28.25 5.20 5.91 13.24 19.15 including 2.05 6.63 25.86 32.49MDJ2 21.85 32.30 10.45 17.52 1.57 19.09 including 6.80 24.58 1.04 25.62MDJ3 37.70 58.90 21.20 5.66 7.58 13.24 including 13.10 8.15 10.92 19.07 including 2.90 8.58 32.18 40.76 Max value Pb 0.45 10.31 50.90 61.21 Max value Zn 1.15 13.19 4.13 17.32 MDJ4 42.15 70.05 27.90 9.28 2.56 11.84 including 17.60 12.73 3.69 16.42 including 3.95 23.38 6.43 29.81 Max value Zn 1.15 31.07 4.35 35.42 Max value Pb 0.03 11.26 16.00 27.26 74.30 95.65 21.35 4.05 1.57 5.62 Max value Pb 0.95 6.51 9.74 16.25 Max value Zn 1.00 6.74 1.49 8.23MDJ7 32.85 41.40 8.55 9.55 0.81 10.36including 34.00 38.55 4.55 14.25 1.11 15.36 44.44 64.44 20.00 2.36 0.42 2.78including 47.40 49.40 2.00 6.25 1.46 7.71 96.80 100.15 3.35 5.23 0.21 5.44including 97.95 100.15 2.20 6.08 0.20 6.28MDJ9 63.40 82.65 19.25 3.54 0.56 4.10including 65.40 69.15 3.75 5.13 0.76 5.89including 79.60 80.00 0.40 4.52 1.54 6.06 Note: In MDJ3, the highest combined Zn and Pb value of 61.21 per cent (10.31 percent Zn and 50.90 per cent Pb) over 0.45 metres was recorded at a depth belowsurface of 57 metres. Drill holes MDJ1 and MDJ2, located 400 metres south of the previouslyestablished 2.7Mt grading 6.14 per cent Zn and 3.34 per cent Pb measured mineralresource in Miocene sediments and significantly extended the target zone formineralisation. MDJ1 reported 5.2 metres grading 19.2 per cent combined Zn andPb and MDJ2 10.45 metres grading 19.1 per cent combined Zn and Pb, at depths ofjust over 20 metres below surface. Computer modelling suggests thismineralisation falls within a narrow graben structure. Zn and Pb sulphidemineralisation has also been discovered nearby in a recently dug waterwell tothe east of these drill holes. The results from verification drill holes MDJ3 and MDJ4 give strongcorroboration of the data from previous programmes over a strike length of 200metres, where the original 2.7Mt estimate had been made. The next phase of drilling was planned to target possible extensions of theidentified mineral resource at Djebba, and test for new zones of mineralisation.This drilling programme extended the zinc-lead target zone at Djebba beyond thearea where a 2.7Mt resource is known. Drill holes MDJ7 and MDJ 9 intersected strong mineralisation in part of a 3kmlong brecciated contact zone between the Cretaceous and Triassic rocks,interpreted as the probable feeder structure for the mineralisation, and inaddition intersected a zone of previously unknown mineralisation associated withfaulting within impure Cretaceous limestones which has hitherto not beenevaluated and closed off. Drill hole MDJ7 reported mineralisation over 20 metresgrading better than 3 per cent Zn with the best intersection being 8.55 metresat a grade of 9.55 per cent Zn and 10.36 per cent combined Zn and Pb at a depthof 32.85 metres from surface including 4.55 metres at a grade of 14.25 per centZn and 15.35 per cent combined Zn and Pb. Drill hole MDJ8, which intersected theCretaceous and the brecciated Cretaceous-Triassic contact zone, reportedlow-grade zinc mineralisation over an interval of 14 metres. Drill holes MDJ10 to MDJ13 were drilled to trace structures and stratigraphicdistribution. Drill holes MDJ10 and MDJ11 were to the north of the main gravityanomaly on the new Djebel Goraa exploration permit, testing for the Cretaceous/Triassic contact. Only Cretaceous rocks were found with no mineralisation. MDJ12and MDJ13 traced the Cretaceous/Triassic contact near MDJ7 but found nomineralisation. The rest of this 3km brecciated contact remains to be exploredto the north and to the south. During the MDJ10 - MDJ13 campaign the drill data was fed into the computer modelalong with earlier O.N.M. data. A pattern of graben structures is emerging whichappear to control the distribution of the mineralisation. To the north andnortheast in the Djebel Goraa exploration permit the final gravityinterpretation just received indicates several high gravity anomalies, which mayrelate to mineralisation. The next drilling phase over the coming months atDjebba and Djebel Goraa will include the testing of these targets. Geophysics A gravity and magnetic survey was completed at Djebba and Djebel Goraa aimed atdelineating the possible extent of the massive Zn and Pb mineralisation and apossible brecciated feeder structure confirmed from previous and currentdrilling. Results of the first phase of geophysical surveys showed anomalous high gravityover the known extent of the massive Zn and Pb mineralisation at Djebba andextended beyond it to the north and east of the known mineralised area where thestrong gravity anomaly was still open and remained to be closed off and testedby drilling. Following on from this, the gravity and magnetic survey lines were extended andinfill lines added to close off anomalies to the north and the east (Phase 2).Following a quality control process this second phase has been combined with theearlier survey data and the interpretation has just been received and is beingintroduced to the computer model. The residual gravity interpretation suggestshigh anomalies which may reflect extensions to the Zn and Pb mineralisation. The Company's drilling programme at Djebba and Djebel Goraa has significantlyextended the zone of known mineralisation and has confirmed three types oftarget: • the Miocene Basin to the west of the Triassic-Cretaceous contact; • the brecciated zone at the unconformable Cretaceous/Triassic contact itself which may represent the feeder structure for the mineralisation at Djebba; and • the discovery of mineralisation by drill holes MDJ7 and MDJ9 in impure limestones of Cretaceous age. The Miocene Basin which lies to the north-west of the main Triassic-Cretaceouscontact and Miocene brecciated clays and sandstones, which increase in thicknessto the west, remain open and untested for mineralisation. Ouled Moussa A gravity survey was completed on the Ouled Moussa permit. The data is beingprocessed and results are awaited. The purpose of the gravity survey was toestablish continuity between the adjacent Bou Jabeur mine open pit and the largegravity anomaly previously discovered to the east of it. Gravity anomalies willbe followed up by geochemistry and drilling to establish the presence ofnear-surface barite-fluorite, Zn and Pb mineralisation. Other Permits It is planned to start geological investigation, gravity, geochemistry andfollow-up drilling on the Koudiat El Louatia (Lorbeus) and El Hammalaexploration permits in September 2006. The Lorbeus permit covers an oldlead-zinc mine and extensions of the geological structures which hosted thenearby Bougrine Mine Zn and Pb mineralisation. The El Hammala permit also coversa former mining area where a similar work programme is planned. Outlook In Tunisia, the Group has made significant progress with increased drillingrates, key geological and structural studies, geophysical surveys and computermodelling of mineralisation. The results from our Phase 1 drilling at FejLahdoum indicated continuity but also structural complexity between the knowndeposits. All available data at Fej Lahdoum has been compiled and is in theprocess of being modelled prior to proceeding with a second phase of drilling.Positive results from drilling and geophysics continue to be acquired at theDjebba and Djebel Goraa properties and the Group is focusing its attention ondrilling that prospect guided by the results of geophysical surveys. The Groupbelieves that Djebba and Djebel Goraa provide the best opportunity to reach thepre-production stage of lead-zinc mining, in the shortest time frame. The Groupplans to commence a pre-feasibility study on the development of a miningoperation at Djebba as soon as possible, aimed at mining high-grade near surfacemineralisation in the Miocene Basin rocks and extensions to the mineralisationto the north and south discovered in the recent drilling programme, in thecontact zone between the Triassic and Cretaceous rocks and in the Cretaceouslimestones. ALGERIA Tan Chaffao The Tan Chaffao exploration licence is located about 250km northwest ofTamanrasset in the Hoggar region of Algeria and is considered to be prospectivefor Cu and Au mineralisation. At Tan Chaffao, the geology comprises acid volcanics (porphyritic rhyolites)along the southern eastern edge of the licence area overlain by avolcano-sedimentary unit, including volcanic tuffs, with mafic volcanics(diabase) lateral to and overlying the volcano-sedimentary unit to the North.Major fault structures traverse the area. The polymetallic (Zn, Pb, Cu, Au) mineralisation of Tan Chaffao was discoveredin 1971, and explored during two field seasons (1972 and 1973) by Russiansupervised Office National de Recherche Geologique et Miniere ("O.R.G.M.")teams. The work consisted of geological and geophysical studies and a 10-holedrill programme. The ten holes were drilled to depths of between 100 metres to200 metres on several mineral-bearing zones over a strike length of 1,450metres. The lenses vary in length from 50 metres to 300 metres with widths ofbetween 0.6 metres and 16.5 metres. Of the ten drill holes, six holes wereassayed and appear to have intersected significant mineralisation. Core fromsome of these drill holes is located on the ground adjacent to the drillcollars. This core has been logged and where appropriate confirmatory drillingwill be undertaken. An Algerian subsidiary company is expected to be formed in July 2006 called theTan Chafao Mining Company SARL. Maghreb will hold an 85 per cent equity interestwith the Algerian O.R.G.M. having an effective equity interest of 15 per cent. A work programme commenced in early November 2005. A base camp was establishedwith the assistance of the O.R.G.M. The exploration programme included mapping,gravity and magnetic surveys and drilling. The drilling programme which started in January 2006 was aimed at verifying thegrades of mineralisation identified by previous work by the O.R.G.M. andpossible extensions along strike to the north and south. An O.R.G.M. drill rigwas mobilised to Tan Chaffao and five drill holes have been completed for atotal of 823 metres. The first two drill holes MTC001 (40 metres west of DDHS21)and MTC002 (40 metres west of MTC001) were located west of the O.R.G.M. drillhole DDHS21, to test the down dip extension of the mineralisation. DDHS21reported 17 metres at a grade of 3.5 grams per tonne ("gpt") Au and 1 per centCu, and 21 metres grading 2.0 gpt Au within 100 metres from the surface. Visualinspection of the drill core from these drill holes indicated a similargeological sequence to that recorded from DDHS21, of altered volcano-sedimentaryrocks with quartz veins and secondary pyrite in chlorite-sericite schists.MTC003 (40 metres south of MTC001), MTC004 (80 metres north of MTC001) andMTC005 (40 metres west of MTC004) were drilled to test the mineralisation alongstrike. The core assays received for three of these drill holes while confirming thepresence of mineralisation produced results below expectations, the best ofwhich are: Drill Hole From (m) To (m) Interval (m) AssayMTC001 84.60 94.50 9.90 2.27%Zn; 0.53%Pb; 0.23% Cuincluding 90.10 91.10 1.00 0.72 gpt Au 115.00 121.70 6.70 1.42%Zn; 0.34% Cuincluding 118.50 119.50 1.00 0.53 gpt Au MTC003 101.00 119.00 18.00 2.4%Zn; 0.79% Pb; 0.17% Cuincluding 107.00 110.00 3.00 3.02 gpt Auof which 108.00 109.00 1.00 8.04 gpt Au Assay results for MTC004 and MTC005 are awaited. The gold mineralisation mayhave a separate structural control from the base metals and further work isrequired to establish the controls of mineralisation. Tan Chaffao is stillconsidered a highly prospective area and a decision on the approach to the nextphase will follow the receipt of further assay results and the interpretationfrom the recently completed geophysical surveys. Gravity and magnetic surveys were completed in June 2006 to test the southernarea of mineral potential. The data has been processed and the results areexpected shortly. Outlook In Algeria, the exploration programme undertaken during the first half of 2006consisted of 5 drill holes and a gravity survey completed. The results of the recent drilling at Tan Chaffao are currently being reviewed.The gravity survey interpretation is due shortly and will be incorporated withother available data, in a computer model prior to a decision being made on theapproach to be adopted for the next stage of exploration. The Tan Chaffao property represents an interesting development for the Group,presenting an opportunity to leverage off earlier work by the O.R.G.M., whichhas indicated potential for a large tonnage orebody. In addition, it provides the Group with a platform to acquire additionalproperties, some potentially representing near term production, in this largeunderdeveloped mineral rich country. A number of other initiatives are underway with respect to acquiring additionalproperties prospective for Cu, Au, Zn and Pb mineralisation. CONSOLIDATED INCOME STATEMENT For the year ended 30 June 2006 Notes Year 13 Months Ended Ended 30 June 2006 30 June 2005 £'000 £'000 Revenue 2 - -Exploration expenses (791) (446)Gross loss (791) (446)Administrative expenses (434) (403)Listing and company formation expenses - (496)Operating loss (1,225) (1,345)Investment income 41 32Loss before tax (1,184) (1,313)Income tax expense - -Loss for the year/period (1,184) (1,313) Earnings per shareBasic loss per share (pence) 4 (2.99) (3.32) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2006 Share Share Retained Total capital premium earnings £'000 £'000 £'000 £'000 Balance at 7 June 2004 - - - - Loss for the period - - (1,313) (1,313)Issue of shares in the period 237 - - 237Premium on shares issued - 3067 - 3067Balance at 1 July 2005 237 3,067 (1,313) 1,991 Loss for the year - - (1,184) (1,184) Balance at 30 June 2006 237 3,067 (2,497) 807 There were no items of recognised income and expense in the year other than theloss for the financial year. CONSOLIDATED BALANCE SHEET As at 30 June 2006 Group Group 2006 2005 £'000 £'000Non-current assetsIntangible assets 82 82 Property, plant and equipment 177 200Investments - - 259 282Current assetsTrade and other receivables 42 19Cash and cash equivalent 561 1,766Current liabilities 603 1,785Trade and other payables (76) (55) Net current assets 1,709 548 Total assets less current liabilities 1,991 807Net assets 1,991 807 EquityShare capital 237 237Share premium account 3,067 3,067 Retained loss (2,497) (1,313) Total equity 807 1,991 CONSOLIDATED CASH FLOW STATEMENT For the year ended 30 June 2006 Year 13 Months Ended Ended 30 June 2006 30 June 2005 £'000 £'000Cash flows from operating activitiesOperating loss before interest and tax (1,225) (1,345)Add : Depreciation charges for the year / period 57 22Operating loss before working capital change (1,168) (1,323)Increase in receivables (23) (19)(Decrease)/ increase in payables (21) 76Net cash from operating activities (1,212) (1,266)Cash from investing activitiesPurchases of plant and equipment (34) (222)Interest income received 41 32Net cash from investing activities 7 (190)Financing activitiesProceeds on issue of share capital - 3,304Shares issued in exchange for investments - (82)Net cash received from financing - 3,222Net (decrease)/ increase in cash and cash equivalents (1,205) 1,766Cash and cash equivalents at the beginning of the year / period 1,766 -Cash and cash equivalents at the end of the year / period 561 1,766 NOTES TO THE ACCOUNTS 1. Significant accounting policies The financial statements have been prepared in accordance with IFRS as adoptedfor use in the European Union, therefore complying with Article 4 of the EU IASRegulation. The financial statements have been prepared on the historical costbasis. The preparation of the financial statements requires management to makeestimates and assumptions that affect the reported amounts of revenues,expenses, assets and liabilities, and the disclosure of contingent liabilitiesat the date of the financial statements. If in the future such estimates andassumptions which are based on management's best judgement at the date of thefinancial statements deviate from the actual circumstances, the originalestimates and assumptions will be modified as appropriate in the year in whichthe circumstances change. It has not been necessary to reclassify the comparative figures following the adoption of IFRS. Adoption of new and revised International Financial Reporting Standards The Group has decided on early adoption of all of the new and revised Standardsand Interpretations issued by the International Accounting Standards Board (theIASB) and the International Financial Reporting Interpretations Committee(IFRIC) of the IASB and endorsed by the European Union that are relevant to itsoperations. The Group's transition date was 7 June 2004. The Group is notaware of any International Financial Reporting Standards ("IFRSs") which havebeen issued since the year end date that will materially affect the financialstatements. The adoption of these new and revised standards and interpretations has notresulted in any significant changes to the Group's accounting policies. IFRS6Exploration for and Evaluation of Mineral Resources permits an entity adoptingIFRS to change its accounting policies for exploration and evaluationexpenditures if the change makes the financial statements more relevant to theeconomic decision making needs of the users. Equally, IFRS6 permits an entityto continue to use the accounting policies applied immediately before adoptingthe IFRS if this is considered more relevant. The directors believe it is morerelevant to continue with the existing accounting policies. 2. Revenue The Group has not generated any turnover in the year ended 30 June 2006 (Nil -13 months ended 30 June 2005). 3. Income tax expense No liability in respect of corporation tax has arisen during the year, as aresult of trading losses in each of the Group companies. No deferred taxliability or asset has been recognised in the year. The total charge for the year / period can be reconciled to the accountingprofit as follows: Year 13 Months Ended Ended 30 June 2006 30 June 2005 £'000 £'000 Loss before taxation, from continuing activities (1,184) (1,313) Loss on ordinary activities before tax multiplied by the standard rate (355) (394)of UK corporation tax of 30% (2005 - 30%)Losses not utilised 355 394Tax expense and effective tax rate for the year / period - - 4. Earnings per ordinary share (basic and diluted) The calculation of the basic and the diluted loss per share attributable to theordinary equity holders of the parent has been calculated on the net loss aftertax of £1,184,000 (2005 - £1,313,000), using the following weighted averages: Year 13 Months Ended Ended 30 June 2006 30 June 2005 Number of shares Number of shares Weighted average number of ordinary shares for 39,559,002 39,559,002 the purposes of basic loss per shareEffect of dilutive potential ordinary shares:Warrants 8,529,501 8,529,501Share options 3,800,000 2,450,000Weighted average number of ordinary shares forthe purposes of diluted loss per share 51,888,503 50,538,503 Loss from continuing operations Year 13 Months Ended Ended 30 June 2006 30 June 2005 Pence Pence Loss for the purposes of basic loss per share (2.99) (3.32)Loss for the purposes of diluted loss per share (2.99) (3.32) 5. Events after the balance sheet date On 3 August 2006, the Company raised £894,000 by a new issue of 11,175,000 newordinary shares of 0.6 pence per share which were issued at a price of 8 penceper share and 11,175,000 warrants were also issued to the new shareholders inequal proportions. See note 20. 6. Reconciliation of the opening position per UK GAAP as previously reported toIFRS and changes in equity Share Share Retained Total capital premium Loss £'000 £'000 £'000 £'000 Balance at 1 July 2005 (under UK GAAP) 237 3,067 (1,313) 1,991Changes in accounting policy:The adoption of IFRS had no impact - - - -on the equity of the groupBalance at 1 July 2005 (under IFRS) 237 3,067 (1,313) 1,991Loss for the year - - (1,184) (1,184)Balance at 30 June 2006 (under IFRS) 237 3,067 (2,497) 807 Reconciliation of equity As at 7 June As at 30 June 2004 2005 £'000 £'000 Shareholders' equity (under UK GAAP) - 1,991Adjustments: None required - -Shareholders' equity (under IFRS) - 1,991 The Annual Report will be posted to shareholders on 21 September 2006 and willalso be available on the Company's website. Copies will also be available fromMaghreb Minerals plc's head office: Suite 107, 1st Floor, 75 Cannon Street,London EC4N 5BN This information is provided by RNS The company news service from the London Stock Exchange