MMS.L Regulatory News (MMS)

5 Mar 2007 07:01

Maghreb Minerals PLC05 March 2007 For immediate release 5 March 2007 MAGHREB MINERALS plc Interim Results Substantial Progress - Option Agreements on Former Producing Mines Concluded Maghreb Minerals plc ('Maghreb' or 'the Company'), the AIM-quoted mining andexploration company exploring for and developing base and precious metaldeposits in North Africa, announces its unaudited results for the six-monthperiod ended 31 December 2006, a period of substantial progress for the Company. Operational Highlights: Tunisia • 90 per cent right to Fej Lahdoum and Bou Jabeur deposits secured - estimated in-situ value of resources in excess of US$1 billion • Evaluation of the redevelopment of the Bou Jabeur Gite de l'Est mine underway • Four exploration permits secured in the Zaghouan fluorite district and data compilation underway • Two permits added to the portfolio to cover additional targets near Djebba and Koudiat Louatia • Further 14 drill holes completed at Djebba • Gravity survey completed on the Ouled Moussa exploration permit Algeria • Five drill holes completed at Hoggar prospect; results below expectations • Activities to be reduced in Algeria but will continue to monitor potential opportunities; immediate focus on short term opportunities in Tunisia Financial Highlights: • Consolidated loss of £701,000 (2005: £476,000), in line with expectations • Placing to raise £894,000 completed in August 2006 • Cash reserves total £838,000 at period end Commenting on Maghreb's prospects, Gordon Riddler, Executive Chairman, said: "Maghreb has succeeded in consolidating its strong exploration permit portfolioposition in Tunisia. We have substantial in-situ resources and we are working toestablish a pathway to restarting mining operations at these past producingmines. The Group's focus in the immediate future is on those permits andproperties in Tunisia most likely to be able to be converted into producingassets in the near term." NB Any tonnages and grade estimates given in this report are based on availablehistorical information and are not compliant with JORC standards, but are theonly information available to the Group at present. 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. ENQUIRIES: Maghreb Minerals plcGordon Riddler, Executive Chairman Tel: +44 (0)1339 755 308 E-mail :gordon.riddler@maghrebminerals.com Hanson Westhouse Limited Tel: +44 (0) 207 601 6100Tim Metcalfe/Anita Ghanekar Bankside ConsultantsMichael Padley/Sam Allen Tel: +44 (0) 207 367 8888 Notes to editors: Maghreb Minerals plc is a junior exploration company which is focused onexploiting mining opportunities in North Africa using its highly experiencedboard and management team. The Company joined AIM in December 2004. Maghreb'sprincipal properties are located in Tunisia and Algeria in North Africa. Bothcountries are politically stable with good infrastructure. They have historicmining areas and excellent geological potential to host substantial mineraldeposits. The countries have not been explored by modern techniques andtherefore represent an excellent opportunity to find undiscovered or undevelopeddeposits, mitigating exploration risk and reducing time to production.Geographically the countries are close to the important metal concentratemarkets of Europe. In Tunisia, Maghreb has nine exploration permits, and has agreements in place todevelop two deposits, Fej Lahdoum and Bou Jabeur, with an in-situ valueestimated to be in excess of US$1 billion. In Algeria, Maghreb has a copper-goldproject at Tan Chaffao with a historic resource and potential to expand. CHAIRMAN'S STATEMENT I am pleased to provide a review of Maghreb Minerals Plc's ("Maghreb" or the"Group") activities and financial results for the six months ended 31 December2006; a period during which substantial progress has been made. Introduction------------ Maghreb has succeeded in consolidating a strong exploration permit portfolioposition in Tunisia where it has continued to evaluate its lead, zinc, bariteand fluorite prospects. The Group's focus in the immediate future is on thoseTunisian permits and properties most likely to be able to be converted intoproducing assets in the near term, details of which are discussed in theparagraphs below. In Algeria, in light of current circumstances, the Board has decided to reduceits activities and monitor potential opportunities that may arise to add to itscore portfolio. Tunisian Operations------------------- In Tunisia, Maghreb successfully concluded its extended negotiations with theOffice Nationale des Mines ("O.N.M.") and signed agreements in December 2006 toearn a 90% right to the Fej Lahdoum and Bou Jabeur deposits. The successfulconclusion to these negotiations allows the Group to now move quickly towardsreserve determination and mine feasibility studies on these deposits and on thepast producing mines. The agreement with the O.N.M. (which owns an exploration permit ("EP") on theformer mine concession at Fej Lahdoum including the Dar N'Hal Nord and Dar N'HalSud zinc-lead deposits) entitles Maghreb to earn a 90% interest in the FejLahdoum EP. The resource estimate for the Dar N'Hal Nord deposit was estimatedat 1.4 million tonnes ("Mt") grading 5.6% Pb and 6.0% Zn in 1991, of which anestimated 1.2 Mt grading 11.6% Pb and Zn remains unmined. The O.N.M. resourceestimate for the Dar N'Hal Sud deposit was 400,000 tonnes grading 5.6% Pb and7.7% Zn (13.3% combined Pb and Zn). Drilling by Maghreb in 2005 expanded thefootprint of known mineralisation at the Fej Lahdoum mine by an estimated 20%.The known resources have an in-situ value estimated to be in excess of US$123million, based on prices of Zn US$1.75/lb and Pb US$0.71/lb. A similar agreement was signed giving a right to earn a 90% interest in the BouJabeur EP, formerly known as the Bou Jabeur mine concession, which covers asignificant area of mineralisation including the Gite de l'Est barite-fluoritezinc-lead mine. A 1996 O.N.M report cites a "resource estimate" of 5.8Mt with agrading of 3.6% Zn, 1.5% Pb, 33.80% BaSO4, and 9.3% CaF2, including possible,probable and certain categories (the latter being 3.4 Mt at 3.6% Zn, 1.2% Pb,10.6% CaF2, 39.2% BaSO4). It is estimated that less than 800,000 tonnes of thedeposit has been mined. The in-situ value of the deposit, which consists oflead, zinc, barite and fluorite, is estimated to be in excess of US$980 million,based on the prices above. The Group plans to evaluate the redevelopment of the Bou Jabeur Gite de l'Estmine, while at Fej Lahdoum the agreement allows us to proceed with a resourceassessment moving out from the former mine, and this is expected to form thebasis of a resumption of mining operations at Fej Lahdoum. Maghreb hasidentified areas of potential mineralisation to the north and south of the DarN'Hal Nord and Dar N'Hal Sud deposits which provides an opportunity to expandresources both inside the Fej Lahdoum EP as well as in its surroundingexploration permit. Having completed the data compilation of all the known drill results and theplans of old mine workings, the Group's focus is to recommence drilling at theFej Lahdoum and Bou Jabeur mines to target the expansion of the known resourceand conversion of resources to proven reserves. The Company intends to engage awork programme that will enable it to appoint internationally recognisedadvisors to assist with feasibility studies and programme planning to advise onbringing the Bou Jabeur mine back into production as soon as possible. In December, Maghreb was awarded four exploration permits in the Zaghouanfluorite district, located 60 km south of Tunis. The four permit areas,Zriba-Guebli, Kohol, Mesella and Sidi at Taia, cover an area of known fluorite,lead and zinc mineralisation and historic mining operations. The Zriba-Gueblipermit covers the Zriba mine and the Guebli deposit, which is considered anextension of the mineralised layer mined in the Zriba mine. Mineralisation is 1m to 10m thick and the O.N.M. estimates the remaining mineral resources in thesouth part of Zriba mine and at Guebli to be of the order of 4Mt, including850,000 tonnes in the mineral reserve category. The three additional permits are all adjacent to the Zriba-Guebli permit. On the Kohol permit, the O.N.M. hasidentified a mineral resource of 600,000 tonnes including 400,000 tonnes of'proved mineral in-situ estimates' grading 35 % CaF2, 2-5% Pb/Zn. On the Sidi atTaia permit, the O.N.M. has identified mineralisation of the order of 25,000tonnes grading 15% CaF2 (fluorite) 10% BaSO4 (barite) + SrSO4 (strontiumsulphate) and 3.5% Pb/Zn. On the Mesella permit, zinc oxide and zinc sulphideand fluorite mineralisation is hosted in fractures and has been mined on a smallscale in the past. In addition to the potential for discovery of additionalfluorite resources, there is also potential for significant lead zincmineralisation on these licence areas. At Zriba historic data from the O.N.M. is being compiled which indicate thatthese permits represent an opportunity for the Company to become a significantindustrial mineral producer in the short-term as well as having the potentialfor the discovery of additional fluorite, lead and zinc resources. Two further exploration permits were added to the portfolio, Djebel Goraa andLorbeus which extend the existing permits areas of Djebba and Koudiat Louatiarespectively to include prospective targets as indicated by gravity surveys andgeological mapping. Drilling continued at Djebba during the reporting period and 14 drill holes (MDJ14 - MDJ27 - for a total of 2,218m) were completed to test potential targets inthe Miocene and Cretaceous rocks and also the brecciated contact zone. Some ofthe targets were indicated by the gravity survey. No significant extensions tothe original Djebba deposit were found. The information gained led to are-interpretation of the gravity survey at Djebba which has identified asignificant gravity high coincident with Miocene rocks, overlying Triassicrocks, adjacent to the breccia zone and some former lead-zinc workings (similarto the geological setting of the known Djebba deposit). This lies on the newDjebel Goraa exploration permit north and east of the original permit and willbe tested by drilling in due course. A gravity survey was also completed on the Ouled Moussa exploration permit. Theinterpretation indicates that the main gravity anomaly associated with strataadjacent to the mineralisation, continues from the Bou Jabeur mine, northeastwards across the Ouled Moussa exploration permit, downthrown about 200m tothe east by a northerly trending fault. This establishes an interesting targetfor later drilling. Algerian Operations------------------- In Algeria, the Group responded to an invitation from the Ministry of Energy andMines ("MEM") to submit bids for exploration permits, including Bouk Dema (lead,zinc) and In Ekker (gold). Unfortunately, the date of submission and bondarrangements were changed late during the bidding process with the consequencethat the Group's winning bid for Bouk Dema was rejected in favour of analternative bid. Our unsuccessful bid for the In Ekker permit reflected theremoval of the most promising gold target from the area originally offered byMEM. This was a disappointing outcome considering that the Group hasdemonstrated its ability to deliver exploration programmes in difficult workingconditions in the country. On its Tan Chaffao permit in the Hoggar region of southern Algeria, Maghrebcompleted the first phase of its programme completing five drill holes (MTC001 - MTC005) for a total of 823m. Drilling results were below our expectations thatwere based on previous ORGM data. Gravity survey data combined with soilgeochemistry identified some gravity highs with coincident elevated copper andgold in soils. This data is being reviewed to assess the viability of continuedexploration on this permit. Given that the Group has incurred expenditure in excess of £500,000 since itcommenced operations in Algeria without the anticipated results, the Board hasdecided to reduce its activities but continue to monitor potential opportunitiesthat may arise. Any tonnages and grade estimates given in this report are based on availablehistorical information and are not compliant with JORC standards, but are theonly information available to the Group at present. Financial--------- During the period under review, on 3 August 2006 the Group raised £894,000 by afresh issue of ordinary shares and warrants, details of which are set out innote 6 to these interim statements. The Group made a consolidated loss for the six months ended 31 December 2006 of£701,000 (2005: £476,000) as tabled below. The loss was in line withexpectations. Six months to Six months to 12 months to 31 December 31 December 30 June 2006 2005 2006 (£'000) (£'000) (£'000) Interest income 14 27 41 Total expenditure incurred in respectof the:- Tunisian explorationprogramme (262) (265) (550)- Algerian explorationprogramme (254) (70) (293) Administration expenses (199) (168) (382) ----- ----- -----Loss for the period (701) (476) (1,184) Included in the Algerian exploration expenses is a provision of £40,000 for landtax on the area over which the Group has options. Administration expenses in2006 include the costs directly and indirectly associated with the fund raising.The Group had £838,000 in cash resources at 31 December 2006. Outlook------- The Group's focus in the immediate future is on its Tunisian assets and inparticular on those most likely to be able to be converted into producing minesin the near term. Now that the important agreements on the two former mine concessions at BouJabeur and Fej Lahdoum have been signed with the O.N.M in Tunisia together withthe acquisition of the fluorite permit at Zriba (Zaghouan), Maghreb is focussingon the "advanced exploration" opportunities that these permits provide. Thiswill be followed in due course by exploration on its other permits includingDjebel Fej Lahdoum, Djebel Goraa, Lorbeus and Ouled Moussa. The Group has been approached by, and opened discussions with, a number ofparties who have expressed interest in entering into varying commercialrelationships to exploit the different mining concessions and explorationpermits held by the Group. These discussions are at a very early and preliminarystage and whether any agreement/s will be reached is by no means certain. The period has been one of substantial progress and Maghreb's core portfolio ofexploration permits and agreements provide a strong foundation on which to builda robust future for the Company in North Africa. Gordon RiddlerExecutive Chairman 5th March 2007 MAGHREB MINERALS PLC CONDENSED CONSOLIDATED INCOME STATEMENT For the six months ended 31 December 2006 Un-audited Un-audited Audited 6 months ended 6 months ended 12 months ended 31 December 31 December 30 June 2006 2005 2006 £'000 £'000 £'000RevenueExploration expenses (516) (335) (843)----------------- ------------ ------------ ------------Gross loss (516) (335) (843) Administrative expenses (199) (168) (382)----------------- ------------ ------------ ------------Operating loss (715) (503) (1,225) Investment income 14 27 41----------------- ------------ ------------ ------------Loss before tax (701) (476) (1,184) Income tax expense - - ------------------ ------------ ------------ ------------Loss for the period (701) (476) (1,184)----------------- ------------ ------------ ------------ Earnings per share Basic loss per share(pence) (1.38) (1.20) (2.99)----------------- ------------ ------------ ------------ CONDENSED CONSOLIDATED BALANCE SHEET As at 31 December 2006 Un-audited Un-audited Audited 31 December 31 December 30 June 2006 2005 2006 £'000 £'000 £'000 Non-current assetsIntangible assets 82 82 82Property, plant andequipment 147 193 177----------------- ------------ ------------ ---------- 229 275 259Current assetsOther receivables 35 115 42Cash 838 1,173 561----------------- ------------ ------------ ---------- 873 1,288 603Current liabilitiesTrade and other payables (102) (48) (55)----------------- ------------ ------------ --------------------------- ------------ ------------ ----------Net current assets 771 1,240 548----------------- ------------ ------------ --------------------------- ------------ ------------ ----------Total assets less 1,000 1,515 807current liabilities----------------- ------------ ------------ --------------------------- ------------ ------------ ----------Net assets 1,000 1,515 807----------------- ------------ ------------ ---------- EquityShare capital 304 237 237Share premium account 3,894 3,067 3,067Retained earnings (3,198) (1,789) (2,497)----------------- ------------ ------------ ----------Total equity 1,000 1,515 807----------------- ------------ ------------ ---------- CONDENSED STATEMENT OF CHANGES IN EQUITY For the six months ended 31 December 2006 Share capital Share premium Retained Total earnings £'000 £'000 £'000 £'000 Balance at 31December 2004 237 3,067 (807) 2,497---------------------- -------- -------- -------- -------- Loss for theperiod - - (506) (506) Issue of share capital - - - - Balance at 1 July2005 237 3,067 (1,313) 1,991---------------------- -------- -------- -------- -------- Loss for theperiod - - (476) (476) Balance at 31December 2005 237 3,067 (1,789) 1,515---------------------- -------- -------- -------- --------Loss for theperiod - - (708) (708) Balance at 1 July2006 237 3,067 (2,497) 807---------------------- -------- -------- -------- -------- Loss for theperiod (701) (701)Issue of sharecapital 67 827 - 894Balance at 31December 2006 304 3,894 (3,198) 1,000---------------------- -------- -------- -------- -------- CONDENSED CONSOLIDATED CASH FLOW STATEMENTFor the six months ended 31 December 2006 Un-audited Un-audited Audited 6 months ended 6 months ended 12 months ended 31 December 31 December 30 June 2006 2005 2006 £'000 £'000 £'000 Cash flows from operatingactivitiesOperating loss beforeinterest and tax (715) (503) (1,225)----------------- ------------- ------------ -----------Add: Depreciation chargesfor the period 30 24 57----------------- ------------- ------------ -----------Operating loss beforeworking capital changes (685) (479) (1,168)Decrease / (Increase) in 7 (96) (23)debtors----------------- ------------- ------------ -----------Increase / (Decrease) in 48 (28) (21)creditors----------------- ------------- ------------ -----------Cash generated /(absorbed) by 55 (124) (44)operations----------------- ------------- ------------ -----------Net cash from operating (630) (603) (1,212)activitiesCash flows from investingactivitiesPurchases of plant and (1) (17) (34)equipmentInterest income received 14 27 41----------------- ------------- ------------ -----------Net cash from investing 13 10 7activities Financing activities----------------- ------------- ------------ -----------Proceeds on issue ofshare capital 894 - ------------------ ------------- ------------ ----------- 894 - ------------------ ------------- ------------ -----------Net increase / (decrease)in cash 277 (593) (1,205) Cash at the beginning ofthe period 561 1,766 1,766----------------- ------------- ------------ -----------Cash at the end of theperiod 838 1,173 561----------------- ------------- ------------ ----------- NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. General information The interim financial information for the six months ended 31 December 2006 hasbeen prepared under IFRS as adopted for use in the EU. The results for the year ended 30 June 2006 have been audited whilst the resultsfor the six months ended 31 December 2005 and 31 December 2006 are un-audited.The interim report is un-audited and does not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. The statutory accounts forthat year, which were prepared under UK Generally Accepted Accounting Principles(GAAP), have been delivered to the Registrar of Companies. The auditors' opinionon those accounts was unqualified and did not contain a statement made unders237(2) or s237(3) of the Companies Act 1985. The audited 12 months ended 30 June 2006 income statement figures have beenrestated following a reclassification of £52,000 between exploration expensesand administrative expenses. There is no material seasonality associated with the Group's activities. The interim financial report has been prepared in accordance with IFRS,including IAS34 'Interim Financial Reporting'. The interim figures are preparedon the basis of the accounting policies set out in the last annual report to 30June 2006. 2. DividendsNo dividends were paid or proposed in the 6 months ended 31 December 2006 (foryear ended 30 June 2006 - £ NIL). 3. Business and Geographical Segments The Group's operations are located in Tunisia, Algeria and the United Kingdom.The Group's exploration activities are located in Tunisia and Algeria, and itsadministration and management is based in the United Kingdom. Segment operating loss and loss for year by geography are reconciled to entityoperating loss and entity loss for the year as follows: Segment Operating Loss Loss For Year Unaudited Unaudited Audited Unaudited Unaudited Audited 6 months ended 6 months ended 12 months ended 6 months ended 6 months ended 12 months ended 31 Dec 2006 31 Dec 2005 30 June 2006 31 Dec 2006 31 Dec 2005 30 June 2006 £'000 £'000 £'000 £'000 £'000 £'000Algeria (254) (70) (293) (254) (70) (293)Tunisia (262) (265) (550) (262) (265) (550)United (199) (168) (382) (185) (141) (341)Kingdom ---- ---- ----- ----- ---- ------Entity operating (715) (503) (1,225) (701) (476) (1,184)loss and entityloss for year 4. Taxation No liability in respect of income tax has arisen during the period, as a resultof trading losses in each of the Group companies. No deferred tax liability orasset has been recognised in the period. 5. Earnings per share Basic earnings per ordinary share have been calculated on profit attributable tomembers from continuing activities of the parent company and on 50,734,002 (31December 2005 - 39,559,002) ordinary shares, being the weighted average numberof ordinary shares in issue throughout the six months ended 31 December 2006. Diluted earnings per ordinary share have been calculated on profit attributableto members from continuing activities of the parent company and on 73,438,503(31 December 2005 - 51,258,503) ordinary shares, warrants and share options,being the weighted average number of ordinary shares, warrants and share optionsin issue throughout the six months ended 31 December 2006. This figure comprises: Number of Number of shares shares Weighted average number of ordinaryshares for the purpose of basic lossper share 50,734,002Effect of dilutive potential ordinary sharesWarrants 19,704,501Share options 3,800,000Net movement in share options (800,000) ----------- 3,000,000 -----------Weighted average number of ordinaryshares for the purpose of diluted loss -----------per share 73,438,503 ----------- 6. Share Capital On 3 August 2006, 11,175,000 new ordinary shares of 0.6p per share were issuedat a price of 8p per share and 11,175,000 warrants were issued. The warrants areexercisable at any time on or before the second anniversary of the date ofissue, and the expiry date is 3 August 2008. The warrants will give the Warrantholders collectively the right to subscribe for 11,175,000 Ordinary Shares at asubscription price of 12 pence per share. The issue raised cash of £894,000. 7. Transactions with Directors Services Services Services Un-audited Un-audited Audited months ended 6 months ended 12 months ended 31 Dec 2006 31 Dec 2005 30 June 2006 £'000 £'000 £'000 Gordon Peterkin Riddler 32 22 52 Robyn Maree Storer 21 31 56 Richard John Charles Collier 12 25 38 George Warren Heard - - 15 Payments to G P Riddler and R M Storer relate to consultancy services paid torelated parties for services by them as Directors of the Company. Payments to G W Heard and R J C Collier are in respect of Director's fees. There were no amounts owed to related parties at 31 December 2006, 31 December2005 and 30 June 2006. 8. Availability of report Copies of this report are to be sent to all shareholders and are available fromthe Company's registered office at 25 Moorgate, London EC2R 6AY. ENDS This information is provided by RNS The company news service from the London Stock Exchange