MMS.L Regulatory News (MMS)

31 Aug 2007 07:00

Maghreb Minerals PLC31 August 2007 MAGHREB MINERALS PLC FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2007 Maghreb Minerals Plc ('Maghreb' or 'the Company'; stock code: MMS), theAIM-listed exploration company developing base and industrial mineral depositsin North Africa, announces its results for the year ended 30 June 2007. HIGHLIGHTS • Agreements signed with the Office National des Mines ("O.N.M."), to acquire the exploration permits covering the former mining concessions on the past producing lead-zinc mines of Bou Jabeur, including the Gite de l'Est mine, and Fej Lahdoum. • Drill programmes accelerated with three drilling rigs now operating on deposit evaluation and quantification. • The drilling results to date at Bou Jabeur (Gite de l'Est) confirm and verify the previous O.N.M. drilling results. The in-situ value of the deposit is estimated to be in excess of US$1 billion, based on current prices. • Drilling at the Zaghouan (Zriba-Guebli) mine has verified the presence of substantial good quality fluorite mineralisation. • In June and July 2007, the Group raised approximately £2.8 million in cash. Gordon Riddler, Executive Chairman, Maghreb Minerals commented: "We have verified the existence of substantial resources at Bou Jabeur, FejLahdoum and Zaghouan. These plus the site at Djebba offer the potential tore-establish mining operations in the medium term. We now have the funding andthe management in place to allow us to fully evaluate the deposits and to bringthe projects to pre-feasibility stage. The aim is to move towards thecompilation of JORC compliant resource statements in the near term followed bythe resumption of mining operations as soon as possible." ENQUIRIES: Maghreb Minerals PlcGordon Riddler, Executive Chairman Tel: 020 7556 7038 Hanson Westhouse LimitedTim Metcalfe / Anita Ghanekar Tel: 0207 601 6100 Bankside ConsultantsMichael Padley / Libby Moss Tel: 0207 367 8888 Notes to editors: Maghreb Minerals Plc is an AIM listed exploration company developing base metaldeposits in Tunisia where it holds the rights to several licence areas. TheCompany is targeting base metals, mainly lead and zinc, but has also identifiedareas containing barite and fluorite in Tunisia. For further information, pleasevisit www.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.who has 40 years of experience in the mining sector and is a Fellow of theInstitute of Materials, Minerals and Mining, a recognised professionalassociation. 2007 ANNUAL REVIEW • Maghreb Minerals Plc's focus is on its highly prospective Tunisian mineral exploration and development assets. The work programme has been accelerated at the three past producing mining areas: Bou Jabeur, including Gite de l'Est, Fej Lahdoum and Zaghouan, including Zriba-Guebli. The aim of the programme is to move towards the compilation of compliant resource statements and the resumption of mining operations as soon as possible. • After extended negotiations with Office National des Mines ("O.N.M."), agreements were signed to acquire the exploration permits covering the former mining concessions on the past producing lead-zinc mines of Bou Jabeur, including the Gite de l'Est mine and Fej Lahdoum. • Three drilling rigs are now operating on deposit evaluation and quantification: one drilling rig at the past producing lead-zinc-fluorite-barite mine of Bou Jabeur (Gite de l'Est) mine and the other two at the past producing Zaghouan (Zriba-Guebli) fluorite mine. • The drilling results to date at Bou Jabeur (Gite de l'Est) confirm and verify the previous O.N.M. drilling results. The assays received to date confirm the presence of significant thicknesses of lead and zinc mineralisation and the presence of zones of high-grade zinc mineralisation. Assays for zinc from some twinned holes show significantly higher values over comparable intervals. • Two sets of mineralised core and milled core sample assay pulps from the previous O.N.M. drilling programmes completed between 1977 and 1986 have recently been discovered. This will significantly assist in the verification of the known deposit and constitute a saving to the Group estimated at approximately £870,000 in drilling costs. Drilling at Zaghouan (Zriba-Guebli) has verified the presence of substantialgood quality fluorite mineralisation varying in thickness between 1 metre and 12metres. Zinc and lead mineralisation is present in the majority of thedrillholes, in higher than expected quantities and the overall thickness of thefluorite intervals is greater than expected. • Geological mapping, gravity surveys, exploration drilling and resource modelling have been undertaken on the Djebba, Djebel Goraa, Ouled Moussa, Koudiat Louatia and Djebel Lorbeus exploration permits. • A new exploration permit, Djebel Lorbeus, adjacent to the highly prospective area around Koudiat Louatia, close to the past producing Bou Grine lead-zinc mine, was obtained. • The Group commences the new financial year with approximately £2.8 million in net cash resources following the successful completion of an equity fundraising over the end of the Financial Year. • Directors believe the Group has sufficient funds to see it through the current phase of exploration and project evaluation and onto pre-feasibility studies for the redevelopment of the past producing mines in the Company's portfolio of projects. CHAIRMAN'S STATEMENT Maghreb Minerals Plc (the "Group" or "Maghreb") has made significant progress inTunisia during the year in terms of consolidating its permit portfolio and itsexploration and resource verification programmes for zinc, lead, barite andfluorite. More details can be found in the Operations Report. Maghreb is focused on its highly prospective Tunisian assets, in particular onthose most likely to be able to develop producing mines in the medium term, BouJabeur, Zaghouan (Zriba-Guebli) and Fej Lahdoum. Exploration will continue onits other exploration permits including Djebel Goraa, Koudiat Louatia, DjebelLorbeus, Ouled Moussa, Kohol, Mecella and Sidi Taia. After extending negotiations with the O.N.M. in January 2007, the Group signedagreements to acquire the exploration permits covering the former miningconcessions on the past producing lead-zinc mines of Bou Jabeur, including theGite de l'Est mine and Fej Lahdoum. Maghreb has the right to earn a 90 per centinterest in both exploration permits. Three new exploration permits were obtained over prospective lead and zincproperties and the four Zaghouan permits were gazetted during this period. The Tunisian work programme has been accelerated, the principal aim of which isto move towards the compilation of compliant resource statements and theresumption of mining operations as soon as possible. Consequently, resourceverification drilling at past producing mines at Bou Jabeur (Gite de l'Est) andZaghouan (Zriba-Guebli) commenced at the beginning of calendar year 2007.Resource extension and delineation drilling is expected to start soon at FejLahdoum. Three drilling rigs are now in operation working as many shifts aspossible depending on local conditions. Gravity surveys, exploration drillingand resource modelling have been completed variously on exploration permits atDjebba, Djebel Goraa, Koudiat Louatia, Djebel Lorbeus and Ouled Moussa. In Algeria, Maghreb completed its initial work programme on its Tan Chaffaopermit in the Hoggar region, with lower than anticipated results with respect toassays reported from previous drilling undertaken by the Office NationalReserche Geologique et Miniere ("O.R.G.M."). The Group was unsuccessful in itsbids for exploration permits, including Bouk Dema (lead, zinc) and In Ekker(gold) for reasons beyond its control. Given the high level of expenditureincurred and disappointing results, Maghreb has decided to reduce its activitiesin Algeria to one of monitoring potential opportunities that may arise provided,of course, that the commercial and operating environment becomes more conducivefor junior mining exploration companies. Following recent fundraising, the Group has approximately £2.8 million in netcash resources as at 20 July 2007 available to pursue its focused explorationand resource definition and assessment programme in Tunisia. These funds will beused to accelerate the work programme, particularly in drilling and projectevaluation. The fundraising was by way of an issue of new ordinary shares andwas approved at an Extraordinary General Meeting on 28 June 2007. The new shareshave been listed on the AIM market of The London Stock Exchange. I am pleased to welcome Dr Alastair Baird and Dr Chris Clayton to the MaghrebBoard to assist with the exploration, geological and data modelling programmesbased on the thrust-tectonic model for the lead-zinc mineralisation, which theyhave formulated from knowledge gained over 20 years working in Tunisia. The Group now has a strong and secure exploration permit portfolio in Tunisiawith the potential to move some of its permits from exploration to developmentand mining over the medium term. The Group has the finance and resources inplace to convert this potential into shareholder value. I take this opportunity to thank all Group staff for their hard work over thelast year to deliver on our exploration permit portfolio and the work programme.The co-operation and support of the government authorities in Tunisia is alsoacknowledged and is greatly appreciated. Gordon P RiddlerExecutive Chairman 31 August 2007 OPERATIONS REPORT EXPLORATION PERMITS Maghreb has a strong and secure portfolio of twelve exploration permits inTunisia, all of which are in good standing. Maghreb, through its 100 per centsubsidiary, High Marsh Holdings ("HMH"), holds the rights to earn a 90 per centinterest, with the O.N.M. holding the other 10 per cent, in the Bou Jabeur andFej Lahdoum exploration permits and a 100 per cent interest in the explorationpermits of: Djebel Fej Lahdoum, Ouled Moussa, Koudiat Louatia, Djebel Lorbeus,Djebba, Djebel Goraa, Zriba-Guebli, Mecella, Kohol and Sidi Taia. Tunisian Exploration Permits Acquired Former Mine Concession - Fej Lahdoum In January 2007, the Group signed an agreement with the O.N.M. giving it theright to earn a 90 per cent interest in the exploration permit covering theformer mining concession of Fej Lahdoum. The O.N.M. holds title to theexploration permit on the former mine concession at Fej Lahdoum (as it was knownfor the AIM Admission document of December 2004) including the Dar N'Hal Nordpast producing mine and Dar N'Hal Sud zinc-lead deposit. This agreement entitlesMaghreb to earn a 90 per cent interest in the Fej Lahdoum exploration permit foran expenditure of TND 400,000 over two years on exploration and projectevaluation. Former Mine Concession - Bou Jabeur In January 2007, the Group signed an agreement with the O.N.M. giving it theright to earn a 90 per cent interest in the Bou Jabeur exploration permit,formerly known as the Bou Jabeur mine concession, which covers a significantarea of mineralisation including the Gite de l'Est barite-fluorite-zinc-leadmine. This agreement entitles Maghreb to earn a 90 per cent interest in the BouJabeur exploration permit for an expenditure of TND 400,000 over two years onexploration and project evaluation. Zaghouan Permits In November 2006 the exploration permits over Zriba-Guebli, Kohol, Sidi Taia andMecella were formally approved by the Ministry of Industry ("the Zaghouanpermits") and gazetted. Djebel Lorbeus The Djebel Lorbeus exploration permit (16 kilometres2) ("km") was approved bythe Ministry of Industry on 22 December 2006. Djebel Lorbeus is adjacent to thehighly prospective Koudiat Louatia (4 km2) permit, 4 km south-west of therecently closed Breakwater Bou Grine lead-zinc mine. As with all the otherexploration permits held by the Group in Tunisia the permit was granted for aninitial period of three years and can be renewed twice. Permits Relinquished The Hammala exploration permit (4 km-2) was not renewed in June 2007 when itexpired. After the evaluation of the old data and the results from geologicalreconnaissance, it was concluded that this permit did not justify furtherinvestment at this time. Applications for Permits in Algeria The Group responded to an invitation from the Ministry of Energy and Mines("M.E.M.") to submit bids for exploration permits, including Bouk Dema (lead,zinc) and In Ekker (gold). Unfortunately, the date of submission and bondarrangements were changed at a late stage during the bidding process with theconsequence that the Group's winning bid for Bouk Dema was rejected in favour ofan alternative bid. Our unsuccessful bid for the In Ekker permit reflected theremoval of the most promising gold target from the area originally offered byM.E.M. This was a disappointing outcome considering that the Group haddemonstrated its ability to deliver exploration programmes in difficult workingconditions in the country. EXPLORATION PROGRAMME AND RESULTS The Group's focus is now entirely on its Tunisian properties where it hasaccelerated the pace of its exploration and evaluation. The principal aim of thework programme is to move towards the compilation of compliant resourcestatements and the commencement of mining operations as soon as possible. Given the Group's target to commence mining operations as soon as possible, theprimary focus therefore is on the past producing mines over which the Groupholds title: Bou Jabeur, Fej Lahdoum and Zaghouan (Zriba-Guebli). In addition, the Group has certain obligations under its exploration permits toundertake work on its other exploration permits including Djebel Goraa, KoudiatLouatia, Djebel Lorbeus, Ouled Moussa, Kohol, Mecella and Sidi Taia, each ofwhich holds the potential to host significant lead-zinc or industrial mineraldeposits. In December 2006, Maghreb carried out a ranking exercise on its explorationpermits and other prospective areas in northern Tunisia in terms of theirpotential for hosting significant lead-zinc mineralisation. This exercise hasassisted significantly in prioritising the ongoing exploration element ofMaghreb's programme. The exercise was based on geological knowledge andfieldwork and did not take into account economic or environmentalconsiderations. It had been established previously that the known lead-zincdeposits in northern Tunisia are of Mississippi Valley Type ("MVT") origin, andthe ranking was based on the extent to which four principal geological criteria,for such a deposit to form, were met in the Group's project areas. Resource verification drilling was completed at Djebba in 2006 and commenced atpast producing mines of Bou Jabeur (Gite de l'Est) and Zaghouan (Zriba-Guebli)in 2007. Resource extension and delineation drilling is expected to start soonat Fej Lahdoum. Three drilling rigs are now in operation working as many shiftsper day as possible depending on local conditions. The two drilling rigs workingat Zriba-Guebli are contracted from a Tunisian company and the drilling rigoperating at Bou Jabeur is the Company owned Longyear LF70. Management and performance of our own drilling rig has improved, and the totalaverage monthly meterage drilled has almost doubled over the last four months. Atotal of 6,041 meters was drilled representing an average of 503 metres permonth, including periods when the drilling rig was not fully operational. Thiscompares to 7,129 metres and 594 metres per month in 2006. A total of 550samples were sent for assay to OMAC Laboratories in Ireland. Geological mapping, gravity surveys, exploration drilling and resource modellinghave been completed variously on exploration permits at Djebba, Djebel Goraa,Ouled Moussa, Koudiat Louatia and Djebel Lorbeus. Bou Jabeur (Gite de l'Est) Drilling commenced in mid-March at the Bou Jabeur (Gite de l'Est) deposit with aview to verifying past resource estimates and to provide metallurgical samplesfor test work, which will form part of the proposed pre-feasibility study. Todate seven drillholes have been completed (MBJ1 - MBJ7) for a total of 2,388metres. The best intersections are as follows: DRILL FROM TO INTERVAL Zn Pb COMBINED Ba* %HOLE (m) (m) (m) (%) (%) Zn%+Pb%MBJ 1 150.00 160.45 10.45 5.28 1.31 6.59---------------------------------------------------------------------------------------------------------------------------------------------------------------- 180.85 184.90 4.05 3.81 0.83 4.64-------------------------------------------------------------------------------- 187.50 188.75 1.25 5.99 1.00 6.99-------------------------------------------------------------------------------- 219.80 225.70 5.90 9.23 0.32 9.55-------------------------------------------------------------------------------- 227.55 234.00 6.45 2.64 0.88 3.52-------------------------------------------------------------------------------- 242.25 246.90 4.65 1.48 0.89 2.37 326.25 327.70 1.45 3.93 0.65 4.58--------------------------------------------------------------------------------Total 34.20 4.74 0.90 5.64--------------------------------------------------------------------------------MBJ 2 59.90 67.60 7.70 4.32 1.18 5.50(Zn + Pb) 77.85 80.15 2.30 4.67 0.57 5.24 153.50 170.00 16.50 3.71 2.14 5.85 179.10 188.70 9.60 6.34 2.10 8.44Total 36.10 4.60 1.82 6.42MBJ 2 61.00 65.25 4.25 34.67(Ba) 66.20 67.60 1.40 20.01 77.85 79.25 1.40 14.14--------------------------------------------------------------------------------Total 7.05 27.68--------------------------------------------------------------------------------MBJ 3 179.20 182.35 3.15 5.91 3.05 8.96 216.60 219.35 2.75 2.53 2.03 4.56 226.30 227.40 1.10 1.71 4.17 5.88--------------------------------------------------------------------------------Total 7.00 3.92 2.83 6.75--------------------------------------------------------------------------------MBJ 4 190.55 197.40 6.85 9.17 0.66 9.83including 191.60 195.85 4.25 12.26 0.96 13.22 202.85 206.15 3.30 3.62 2.13 5.75 207.95 211.65 3.70 2.69 0.65 3.34 211.65 225.85 14.20 9.88 1.97 11.85 251.85 259.50 7.65 4.98 0.83 5.81 262.15 267.10 4.95 3.78 1.63 5.41--------------------------------------------------------------------------------Total 44.90 6.48 1.83 8.31 * Fluorite and Barite assays are pending for all drill holes not reported on. Drillholes MBJ5 - MBJ7 are at various stages of logging, sampling and assay.Drilling is in progress on MBJ8. The drilling results at Bou Jabeur (Gite de l'Est) confirm and verify theprevious O.N.M. drilling results with lead and zinc assays in some cores lookingconsiderably better. The assays confirm the presence of significant thickness oflead and zinc mineralisation and the presence of zones of high-grade zincmineralisation in line with expectations. Two sets of mineralised core and milled core sample assay pulps from theprevious O.N.M. drilling programmes completed at Bou Jabeur (Gite de l'Est)between 1977 and 1986 have been discovered recently. These comprise 3,803 metresof mineralised core out of a total of 10,465 metres, from thirty one BJ - seriesO.N.M. drill holes out of a total of forty seven holes drilled. These mineralised core sections were used to determine the previous O.N.M.estimate of resources for the Bou Jabeur (Gite de l'Est) mine. In 2000 theoperators of Bou Jabeur (Gite de l'Est) quoted a proven, probable and possiblereserve of 5.1 million tonnes ("Mt") with a grade of 1.38 per cent Pb, 3.76 percent Zn, 33.2 per cent BaSO4, and 9.3 per cent CaF2. The core is in goodcondition and this core (or the pulps if available) is being used by Maghreb forre-logging and re-analyses, which is in progress. This will confirm the originalO.N.M. data, which can then be included with confidence in the compilation ofthe compliant resource statement currently being undertaken. As a consequence,the discovery of this core significantly reduces the number of verificationdrillholes planned by the Company. Drilling therefore can be redirected toproviding additional drillholes targeted at extending the mineral depositlaterally and at depth, speeding up the verification of the known deposit andsaving approximately £870,000, funds that can be used valuably in extending thescope of the Group's exploration efforts. Wardell Armstrong International ("W.A.I.") was appointed in March 2007 to assistwith the preparation of a compliant resource statement and to oversee theprogramme to upgrade the Bou Jabeur (Gite de l'Est) zinc-lead-fluorite-bariteresource at Bou Jabeur to International Reporting Standards. This work will leadup to commencing a pre-feasibility study on the re-commencement of miningoperations at Bou Jabeur (Gite de l'Est). To achieve this, W.A.I. is reviewingthe geological setting and model for the deposit, auditing proposed/existingsampling methodology including assay procedures for both historical and newdrill core sampling routines, monitoring of the verification and in-fill drillprogramme where deemed necessary to provide a more robust resourceclassification, and reviewing the existing Maghreb block model and resourceclassification at a variety of cut-off grades. A Surpac(R) geological model is currently being generated by Maghreb. The modelencompasses drillhole data and assays for forty seven historic drillholes fromsurface, ten underground drillholes and underground sampling plans and assays atBou Jabeur (Gite de l'Est) that have been made available by the O.N.M., as wellas results from current drilling. This includes a modern lithologicalcodification based on a recent review of core logs and outcrop evidence. Zaghouan (Zriba-Guebli) As reported upon in last year's Annual Report, the Group's acquisition of thefour exploration permits around the town of Zaghouan in north-eastern Tunisia:Zriba-Guebli, Jebel el Kohol, Sidi Taia and Jebel el Mecella was formallyapproved and gazetted this year. The permits cover a total area of 52km2. The Zriba-Guebli permit covers a past producing Zriba fluorite mine and theZaghouan processing operations. The indicated resources on the Zriba-Gueblipermit were reported in 1988 to be to the order of 5Mt with a grade between 15per cent and 30 per cent CaF2. The Group believes that the strong rise in international fluorspar prices offersthe potential to re-establish profitable mining operations at Zaghouan(Zriba-Guebli) at a relatively modest capital cost. The Group believes that amining operation at Zaghouan (Zriba-Guebli) has the potential to generate annualrevenue of around US$9 million per annum from fluorite production in due course,based on historic annual production rates of chemical grade fluorspar. At an appropriate time, the Group will consider entering into negotiations on ajoint venture with established mining and off-take companies to evaluate jointlyre-opening the Zaghouan (Zriba-Guebli) mine. In addition to fluorite, the four exploration permits at Zaghouan areprospective for barite, zinc and lead mineralisation. Verification drilling commenced on the Zriba-Guebli exploration permit andprogress to date is as follows: --------------------------------------------------------------------------------DRILL Total No. of Intervals Visible NotesHOLE Depth Samples Mineralised Minerals (m) (m)--------------------------------------------------------------------------------MG1 124.35 5 3.10 Pb/Zn/F Sampled and results awaitedMG2 161.10 19 2.20 Pb/Zn/F/Ba 10.90MG3 101.30 12 12.30 Pb/Zn/F/BaMG4 385.60 Logging in ProgressMG5 95.40 1.20 F/Zn 3.15 Ba/FMG6 111.60 2.10 Ba/F/ZnMG7 95.80 3.15 F/Zn MG8 - - - - Drilling in ProgressMG9 125.75 0.10 Logging in Progress 5.40MG10 - - - - Drilling in Progress-------------------------------------------------------------------------------- A total of eight drillholes have been completed on the Zriba -Guebli permit (MG1- MG7, and MG9) for a total of 1,200 metres and thirty six samples from threedrillholes have been sent for assay to date. Results are awaited. Two drillholesMG8 and MG10 are in progress. The drilling has verified the presence ofsubstantial fluorite mineralisation. Another six drillholes are planned tocomplete the verification of the resource previously estimated by O.N.M./I.C.F.Early visual indications from the Maghreb drill core shows the variability ofthe thickness of the fluorite deposit between 1 metre and 12 metres. Work is inhand to determine any thickness trends and controls to mineralisation. Thefluorite observed is clear and of good quality. More zinc and leadmineralisation is present, and the overall thickness of the fluorite intervalsis greater than expected. The extent of the fluorite mineralisation suggests alarge mineralising system may be present. This possibility will be investigatedshortly by means initially of a geological reconnaissance followed by furtherdrilling. The Zriba-Guebli permit covers the past producing Zriba fluorite mine and theGuebli fluorite deposit, which is considered an extension of the mineralisedlayer mined in Zriba mine. Mineralisation is stratabound, with mineralisedlayers in the order of 1 and 15 metres thick. The Zriba mine, a room and pillarmining operation, produced approximately 4Mt of ore, grading 25 per centfluorite (CaF2) and 1-2 per cent lead-zinc, between 1967 and 1992, when it wasclosed due to low mineral prices at that time. The O.N.M. estimates theremaining mineral resources in the southern part of the Zriba mine and at Gueblito be of the order of 4Mt, including 850,000 tonnes ("t") in the "mineralreserve" category. Fej Lahdoum Mapping and additional drilling work will commence shortly on the explorationpermit covering the former Fej Lahdoum mining concession aimed at expanding theknown resource at the Dar N'Hal Nord mine and the Dar N'Hal Sud deposit. TheGroup has already drilled a total of 5,244 metres on the Fej Lahdoum mineconcession and surrounding Djebel Fej Lahdoum exploration permit. Djebba and Djebel Goraa At Djebba, drilling continued. Fifteen holes (MDJ14 - MDJ28) were drilled for atotal of 2,451 metres aimed at verification of, and extensions to, the knownlead-zinc resource; previously estimated at 2.7Mt grading 6.14 per cent Zn and3.34 per cent Pb within which there was an open pit reserve estimate of 800,000tgrading 6.59 per cent Zn and 4.09 per cent made by the Canadian GroupSIDAM-Minorex in 1987-1989. This phase of the drilling, whilst confirming the presence of the known deposit(tonnage and grade), failed to find any significant extensions of the maindeposit. Targets were tested in the Cretaceous rocks and the brecciated contactbetween Cretaceous and Triassic rocks. Overall, the tonnage of the known depositis anticipated to have been increased slightly. All the data has been modeledand it is proposed to complete a revised resource estimation and preliminarypre-feasibility study on the deposit to establish the extent to which this couldstand alone as an open pit development at current metal prices. Drill testing of selected gravity survey anomalies was negative and led to are-interpretation of the gravity data using more extensive terrain correctionsand alternative rock densities. The re-interpretation of the gravity datasuggested the possible existence of a Miocene basin with a coincident gravityhigh on the Djebel Goraa exploration permit (the "Djebel Goraa anomaly"), in asimilar setting and to the north-east of the known deposit at Djebba. A furthersmall gravity survey was completed to define the Djebel Goraa anomaly in moredetail and this will be drill tested in due course. --------------------------------------------------------------------------------Permit No. of Survey Gravity Line No. of Survey Grid Size Survey Date Profiles (km) Stations (m)--------------------------------------------------------------------------------Djebel Goraa 16 14 196 50x50;500x500 March 2007-------------------------------------------------------------------------------- A study of the mineral prospectivity of an area south-west of Djebba wascompleted in December 2006. High gravity anomalies along with examination of the1:50,000 geological map south-west of Djebba, suggested that this area had muchin common with the geology around the Dar N'Hal Nord deposit at Fej Lahdoum andhence warranted more detailed study. While there were common features, it wasclear that the Cretaceous sediments here were deposited within the sedimentarybasin, rather than at its edge, unlike at the Fej Lahdoum and Lorbeus deposits.As a result, during tertiary thrusting there was no focus for concentratingpotential mineralising fluids as they escaped from the main sedimentary basin tothe south-west. Any such focus would have to have been above the present dayerosion level. Consequently, it was concluded that there was little chance ofany significant mineralisation in this area. Ouled Moussa The principal activity on the Ouled Moussa exploration permit, adjacent to BouJabeur (Gite de l'Est) permit, has been the completion of a gravity survey overthis permit and an adjacent part of the Bou Jabeur exploration permit. --------------------------------------------------------------------------------Permit No. of Survey Gravity Line No. of Survey Grid Size Survey Date Profiles (km) Stations (m)-------------------------------------------------------------------------------- Sept 2006Ouled Moussa 16 31.2 420 50x50; 100x100 May 2007--------------------------------------------------------------------------------Bou Jabeur 11 10.0 77 100x200 May 2007-------------------------------------------------------------------------------- High gravity anomalies and lineament features derived from the residual gravitymap indicate an extension of the Aptian sediments across a north-north-westtrending "structure". The lead-zinc-barite-fluorite mineralisation at Bou Jabeur(Gite de l'Est) is located along the southern side of the gravity high relatedto the Aptian outcrop and may be present in a similar position to the north-eastin the Ouled Moussa permit, but at greater depth. The existence or otherwise ofthe mineralised reef limestone unit found at Gite de l'Est on the Ouled Moussaexploration permit will be tested by drilling. The gravity indicated target will be tested, in due course, by drilling at leasttwo holes, one to ascertain the depth of the sequence and another to establishthe presence of a continuation of barite-fluorite, lead and zinc mineralisationto the north-east from the Bou Jabeur (Gite de l'Est) deposit into the OuledMoussa exploration permit. Koudiat Louatia and Djebel Lorbeus A brief geological appraisal of the area south-west of the present KoudiatLouatia exploration permit at Djebel Lorbeus was completed to establish itspotential to host MVT lead-zinc deposits analogous to Bou Grine and Fej Lahdoum. Structurally and sedimentologically, the area represents the north-west marginof a south-west-north-east trending Cretaceous extensional basin intersected bya number of north-west south-east transfer faults, probably reactivated fromTriassic times. A number of the prerequisite features of MVT deposits appear tobe present in the southern Lorbeus area. As a result of reconnaissance fieldworka successful application was made for the Djebel Lorbeus exploration permit tothe south of Kodiat Louatia. Further detailed geological mapping will beundertaken to define stratigraphy and structure and understand the majorfracture system within the Abiod limestones. Gravity surveys completed are as follows and the interpretation is awaited. --------------------------------------------------------------------------------Permit No. of Survey Gravity Line No. of Survey Grid Size Survey Date Profiles (km) Stations (m)--------------------------------------------------------------------------------Koudiat Louatia 8 8.6 173 100x200 June 2007 --------------------------------------------------------------------------------Lorbeus 20 60.0 383 200x200 June 2007-------------------------------------------------------------------------------- Past O.N.M. soil geochemical data found in the O.N.M. files, show anomaliescoinciding with areas of rock hydrofracturing. It is planned to complete alimited number of scout drill holes to refine the understanding of the geologyand the MVT potential of this area. Algeria - Tan Chaffao Maghreb through its 85 per cent held subsidiary, Tan Chafao Mining CompanyS.A.R.L., completed it initial work programme on its Tan Chaffao permit in theHoggar region of southern Algeria, a remote locality 250km north-west ofTamanrasset. Assays of the last two of a series of five drillholes werereceived. --------------------------------------------------------------------------------Drillhole From To Interval Assay (m) (m) (m)--------------------------------------------------------------------------------MTC 004 68.35 74.35 6.00 0.81%Zn; 1.35%Pb--------------------------------------------------------------------------------MTC 005 113.20 125.80 12.60 3.89%Zn;1.73%Pb; 0.16%Cuincluding 116.20 122.80 6.60 6.38%Zn;2.77%Pb; 0.21%Cu-------------------------------------------------------------------------------- The mineralisation occurs in an altered sulphidic quartzite horizon belowchlorite-sericite schists. Drilling results from all five drillholes (MTC001 -MTC005), for a total of 823 metres, were below our expectations based onprevious O.R.G.M. data. Gravity survey data combined with soil geochemistryidentified some small-scale gravity highs with coincident elevated copper andgold in soils. Given the high level of expenditure incurred in operating in theremote Tan Chaffao area, the slow progress of available contractors anddisappointing initial results, the decision was made to terminate furtherexploration over this permit. Activities in Algeria have been reduced to a level which will serve to monitorpotential opportunities that may arise. OUTLOOK Maghreb's prime focus now is on its highly prospective Tunisian assets with itswork programme aimed at the evaluation and expansion of known resources at threepast producing mines and advancing these projects towards pre-feasibility study.These are Bou Jabeur, Zriba-Guebli and Fej Lahdoum. The Group has a strong and secure exploration permit portfolio in Tunisia withthe potential to move some of its permits from exploration to development andmining over the medium term. Maghreb has the finance and management resources in place to convert thispotential into shareholder value. FINANCIAL REVIEW At the commencement of this financial year, the Group had net cash resources of£561,000 and during the course of the year, it had two successful fundraisings,the last being completed immediately following the Extraordinary General Meetingon 28 June 2007 and in early July 2007. Administration expenses were adverselyaffected by an increase in insurance costs to provide cover for increasedstaffing and timing differences and substantial indirect costs associated withthe fundraisings. There is an additional accounting provision required under theIFRS 2 accounting standard for providing for share based payments relating tothe Employee Unapproved Share Option Plan. This has resulted in the Group havingto provide £167,000 with respect to share based payments relating to theoutstanding employee options. Of this amount, £106,000 arose in prior years.Group funds have been used predominantly in the pursuit of the Group'sexploration activities in Tunisia and Algeria as summarised below: 2007 2006 £'000 £'000 Net cash at 1 July 2006 561 1,766 Add:Funds raised 3,474 -Interest income and working capital (329) 54adjustments Deduct:Expense arising from share option based 167 -payment transactionsFund raising commissions 153 -Fixed assets purchased 48 34Exploration expenditure: 825 791 Tunisia 544 516 Algeria - discontinued operations 281 255 Other exploration - 20Administration expenditure 561 434 ----------------- -----------------Net cash at 1 July 2007 1,952 561 ----------------- ----------------- At 20 July 2007, following the closing of the fundraising, the Group had cashresources of approximately £2.8 million which should be sufficient to fund theGroup's activities through the current phase of project evaluation and ontopre-feasibility studies for the redevelopment of the past producing mines in theCompany's portfolio of projects. CONSOLIDATED INCOME STATEMENTFor the year ended 30 June 2007 2007 2006 £'000 £'000Revenue - - Exploration expenses - continuing operations (544) (536)Exploration expenses - discontinued operations (281) (255) --------------------------Gross loss (825) (791) Administrative expenses - continuing operations (881) (434) --------------------------Operating loss (1,706) (1,255) Investment income 25 41 -------------------------- Loss before tax (1,681) (1,184) Income tax expense - - Loss for the year on continuing operations (1,400) (929)Loss for the year from discontinued operations (281) (255) -------------------------- Total loss for the year (1,681) (1,184) Earnings per share Basic and diluted loss per share on continuing (2.81) (2.35)operations (pence)Basic and diluted loss per share from discontinued (0.56) (0.64)operations (pence) CONSOLIDATED BALANCE SHEETAs at 30 June 2007 2007 2006 £'000 £'000Non-current assetsIntangible assets 82 82Property, plant and equipment 156 177Investments - - -------------------- ---------------------- 238 259Current assetsTrade and other receivables 737 42Cash and cash equivalents 1,952 561 -------------------- --------------------- 2,689 603Current liabilitiesTrade and other payables (95) (55)Provisions (65) - -------------------- --------------------- (160) (55)Net current assets 2,529 548 -------------------- --------------------- Total assets less current 2,767 807liabilities Net assets 2,767 807 =================== ==================== EquityShare capital 526 237Share premium account 6,252 3,067Share option reserve 167 -Retained loss (4,178) (2,497) -------------------- ------------------- Total equity 2,767 807 =================== =================== G P Riddler R J C CollierExecutive Chairman Director CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30 June 2007 Notes 2007 2006 £'000 £'000Cash flows from operating activitiesOperating loss before interest and tax (1,706) (1,225)Add : Depreciation charges for the year 69 57Add : Movement in Share option reserve 167 -Operating loss before working capital (1,470) (1,168)change(Increase) in trade and other (695) (23)receivablesIncrease/(Decrease) in trade and other 105 (21)payables --------------- ----------------Net cash flow from operating activities (2,060) (1,212)Cash flows from investing activitiesPurchases of plant and equipment (48) (34)Interest income received 25 41Net cash from investing activities (23) 7Cash flows from financing activitiesProceeds on issue of share capital 3,474 - --------------- ---------------- Net increase/(decrease) in cash and 1,391 (1,205)cash equivalents Cash and cash equivalents at the 561 1,766beginning of the year --------------- --------------Cash and cash equivalents at the end of 1,952 561the year NOTES TO THE ACCOUNTS 1. General information Maghreb Minerals Plc is a public limited company and was incorporated in Englandand Wales on 7 June 2004. The Company was admitted to the Alternative InvestmentMarket of the London Stock Exchange on 23 December 2004. The address of itsregistered office and principal place of business are disclosed on the last pageof the annual report. The principal activities of the Company and itssubsidiaries (the Group) are described in the Chairman's Statement. 2. International Financial Reporting Standards The Group follows the Standards and Interpretations issued by the InternationalAccounting Standards Board ("IASB") and the International Financial ReportingInterpretations Committee of the IASB and endorsed by the European Union thatare relevant to its operations. At the date of authorisation of these financialstatements the Group is aware of the following IFRSs which were in issue buthave not been applied in these financial statements as they are not mandatorilyeffective: - IFRS 7 Financial instruments disclosures - IFRS 8 Operating segments - Amendments to IAS 1 Capital disclosures The Directors do not anticipate that the adoption of these statements andinterpretations will have a material impact on the Group's primary financialstatements. However, future application of these standards is likely tosignificantly increase the disclosures required in the financial statements. IFRS 6 Exploration for and Evaluation of Mineral Resources permits an entity onadopting IFRS 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, IFRS 6 permits an entityto continue to use the accounting policies applied immediately before adoptingthe IFRS if this is considered more relevant. The Directors believe it was andis more relevant to continue with the accounting policies then prevailing andapply United Kingdom generally accepted accounting practices for exploration andevaluation expenditures. 3. 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 principal accounting policies set out below have been applied consistentlyby Group entities. Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe Company and entities controlled by the Company (its subsidiaries). Controlis achieved where the Company has the power to govern the financial andoperating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired during the year are included in theConsolidated Income Statement from the effective date of acquisition. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring their accounting policies into line with those used byother members of the Group. All intra-group transactions, balances, income and expenses are eliminated onconsolidation. Going concern The Directors have formed a judgment at the time of approving the financialstatements that there is a reasonable expectation that the Company has adequateresources to continue in operational existence for the foreseeable future.Following the successful fundraising in June and July 2007, the Group hasapproximately £2.8 million in cash reserves which is sufficient to fund theGroup's activities for at least the next twelve to twenty four months. The financial information has been prepared on the going concern basis, thevalidity of which depends principally on the discovery of economically viablemineral deposits and the availability of subsequent funding to extract theresource or alternatively the availability of funding to extend the Group'sexploration activities. The financial information does not include anyadjustment that would arise from a failure to complete either option. RevenueThe Group has not generated any revenue in the year ended 30 June 2007. 4. Earnings per ordinary share (basic and diluted) The calculation of the basic loss per share attributable to the ordinary equityholders of the parent has been calculated on the net loss after tax of£1,681,000 (2006 - £1,184,000), using the weighted average number of ordinaryshares of 49,802,752 (2006 - 39,559,002). All warrants and share options in issue at the year end decrease the loss pershare for the year, and as such are deemed anti-dilutive. Therefore the dilutedloss per share is the same as the basic loss per share for both 2007 and 2006. 2007 2006 Pence Pence Loss from continuing operations for the purposes of basicand diluted loss per share (2.81) (2.35) Loss from discontinued operations for purposes of basic anddiluted loss per share (0.56) (0.64) The Annual Report will be posted to shareholders on 31 August 2007 and will alsobe available on the Company's website in due course. Copies will also beavailable from Maghreb Minerals plc's head office: Suite 107, 1st Floor, 75Cannon Street, London EC4N 5BN This information is provided by RNS The company news service from the London Stock Exchange