Final Results
ANGUS & ROSS PLC
PRELIMINARY RESULTS
FOR THE YEAR ENDED 28 FEBRUARY 2007
HIGHLIGHTS
* Private placings completed, raising �7.75 million net
* Successful 2006 exploration leading to increased resources in
Greenland
* Significant progress made towards reopening of Black Angel mine
* Post year end US$30 million loan facility agreed
* Post year end private placings completed for Brazilian subsidiary
raising �824,950
* Successful listing of Australian associate on the Australian Stock
Exchange raising A$4 million
CHAIRMAN'S STATEMENT
Dear Shareholder,
Another year has gone by since I last wrote this statement and you
will see that it has been a year of substantial progress towards the
goal of all mining companies - cash flow.
Twelve months ago, a substantial exploration programme was underway
in Greenland, a new geological and financial team was being assembled
in Brazil and we were in the process of floating the Company's
Australian subsidiary, QGM, on the Australian Stock Exchange. It
gives me considerable pleasure to report to you on all fronts.
Of pivotal importance of course, is the ability to finance
exploration and, when it subsequently proves justified, the
exploitation of the resources discovered. Your Board has been
involved in lengthy negotiations to secure funding, almost a year
ahead of the completion of a Bankable Feasibility Study, to enable
both exploration and civil engineering work to continue at the Black
Angel mine in Greenland.
It was particularly encouraging for our small management team that at
the Extraordinary General Meeting in York on 2 July 2007, 80
shareholders, representing 50% of the Company and accounting for 99%
of all votes cast, voted in favour of the US $30 million facility we
had negotiated. Your Board would like to record its thanks for this
overwhelming support.
In addition to the above, �7.75 million was also raised last year in
equity, largely as the result of two private placings.
FINANCIAL RESULTS
The loss for the year amounts to �4,161,801 compared with �2,138,335
in 2006. This increase is largely accounted for by �2.5 million in
additional exploration costs and associated overheads, the direct
result of our accelerated activities in Greenland and Brazil. We
continue to write off all such costs until ore reserves and value are
established.
At the year end our cash and bank balances amounted to �3,957,526
compared to �1,008,062 at the same time last year. This increase is
largely the result of successful equity fundraisings during the year.
GREENLAND
The 2007 field season is currently underway at your Group's flagship
project. Not only is further exploration work being undertaken to
prove up and hopefully augment the resources discovered last year but
the civil engineering programme has commenced to enable the Black
Angel mine to be reopened next year. Work has started to reinstall
the cable car which will give access to the mine itself. Construction
of the infrastructure at ground level has already commenced. All
being well this should be completed next year and whilst much still
remains to be done, I am hopeful that the first production for 18
years from the mine should start in the last quarter of 2008.
BRAZIL
Last year saw the strengthening of the management team in Brazil and
the creation of a new holding company, St Andrews Mining Ltd ("SAM"),
for our operations there. A number of new projects in Brazil,
particularly Sta D�bora and Sta Elena, are especially encouraging
with work underway towards defining a large gold resource. It is
possible that one of these will be producing gold within the next
twelve months.
In April and August 2007, we successfully undertook two private
placings in SAM, raising a total of �824,950 to provide additional
working capital for our operations in Brazil. As a result of these
placings, A&R retains an 81% interest. It is the intention to seek a
listing for SAM next year.
AUSTRALIA
I am happy to report that in January of this year QGM successfully
listed on the Australian Stock Exchange, raising A$4 million. In
addition to the joint venture announced last year with Oxiana, QGM
announced a further cooperation, this time with Canadian company Mega
Uranium. The independence of QGM means that it is now no longer
financially dependent upon A&R and it is now treated as an associate
rather than as a subsidiary company.
CANADA
In line with our commitment to terminate our involvement in projects
that were unlikely to produce early cash flow, we disposed of our
part of the Separation Lake venture in exchange for shares in our
partner, Gossan Resources Ltd. That investment has now been sold.
GENERAL
It is not normal for Chairmen to dilute their enthusiasm with a word
or two of caution in their statements. However, it does no harm for
us all to be realistic about the challenges ahead. Almost all mining
projects in the world today are experiencing delays. Dump trucks are
sitting idle because of the lack of capacity of tyre manufacturers,
assay laboratories around the world are taking months rather than
weeks to do their work and lastly there is a worldwide shortage of
experienced management at all levels. These examples are simply the
result of the success of the stock markets in raising new funds for
mining exploration over the last four years in particular. Only now
have service industries started to respond to the increased demand.
Your Group is better positioned than many in having strong technical
management in all areas of its operations. However, the process of
changing from an exploration company to a producing one will require
a range of additional skills and we are therefore now actively
engaged in recruitment.
Another area of concern that I know I share with other Chairmen of
smaller public companies is the creeping costs involved in complying
with increasing regulation. Soon many investors will object to half
of the money being raised in small IPOs being used in fees and
overheads that are outside the control of the companies. This will
inevitably result in a spate of mergers.
Your Company makes strenuous efforts to keep in touch directly with
all its shareholders. However with so many shareholdings in nominee
names and some nominee companies refusing to distribute news
releases, we continue to encourage our shareholders to contact us in
order that they may be placed on our direct mailing list.
Naturally all shareholder contact details are treated confidentially
by us and are not passed on to any other organisation. This is not so
with shareholders' details appearing on the Company register. Third
parties often request shareholder lists from the registrar who is
obliged to pass these details on without establishing the reason for
their final use. The potential for abuse of this system can be
imagined.
As ever, none of the achievements of your Group would have been
possible without the loyal support of many hardworking people at all
levels. If space did not preclude me from doing so I would like to
mention everyone by name. However, particular mention must be made of
Frank van der Stijl in Greenland and Jayme Leite in Brazil. They run
our drilling operations in remote areas with many people answerable
to them.
Then of course my sincere thanks are due to my fellow Directors on
the boards of the various companies in the Angus & Ross group. All
deserve to be singled out for their various contributions - often at
antisocial times of the day and night.
In conclusion, I would like to believe that the year ahead will be
the one that shareholders have been patiently waiting for.
Robin Andrews
Chairman
28 August 2007
Group profit and loss account
Year ended 28 February 2007
2007 2006
Restated
� �
Depreciation of capitalised exploration (222,962) (257,383)
costs - (657,362)
Exploration costs impaired (2,544,175) (527,802)
Exploration costs written off (2,767,137) (1,442,547)
(855,988) -
Impairment of goodwill (1,275,260) (711,393)
Other administrative expenses
(2,131,248) (711,393)
Total administrative expenses
- (291,918)
Exceptional item - loss on capitalisation
of loan in subsidiary (4,898,385) (2,445,858)
Operating loss (28,480) -
Share of operating loss of associate (4,926,865) (2,445,858)
Total operating loss
334,514 (20,504)
Exceptional item - profit/(loss) on part 226,947 72,332
disposal of subsidiary
undertaking (4,365,404) (2,394,030)
Interest receivable and similar income
- -
Loss on ordinary activities before
taxation (4,365,404) (2,394,030)
Tax on loss on ordinary activities 203,603 255,695
Loss on ordinary activities after taxation (4,161,801) (2,138,335)
Minority interests - equity (3.16p) (2.85p)
(3.04p) (2.83p)
Loss sustained for the financial year
Basic loss per share
Fully diluted loss per share
All activities are derived from the Group's continuing operations
Group statement of total recognised gains and losses
Year ended 28 February 2007
2007 2006
Restated
� �
Loss sustained attributable to members of the (4,161,801) (2,138,335)
parent company
Exchange difference on re-translation of net 47,625 11,522
assets of subsidiary
undertakings (4,114,176) (2,126,813)
Total recognised gains and losses relating to
the year (230,015)
(4,344,191)
Prior year adjustment (as explained in note
5)
Total gains and losses recognised since last
annual report
Balance sheets 28 February 2007
Group
Company
2007 2006 2007 2006
Restated Restated
� � � �
Fixed assets
Intangible assets - 3,825 - -
Tangible assets 51,988 649,600 14,181 10,607
Investments in
subsidiary - - - 364,704
undertakings
Investment in 544,757 - 573,237 -
associated
undertaking 596,745 653,425 587,418 375,311
395,921 179,938 568,737 328,397
Current assets
Debtors due within - - - 118,317
one year 3,957,526 1,008,062 3,644,016 355,960
Debtors due after 4,353,447 1,188,000 4,212,753 802,674
more than
one year
Cash at bank and in
hand (468,431) (250,451) (120,899) (151,504)
3,885,016 937,549 4,091,854 651,170
Creditors: amounts
falling due 4,481,761 1,590,974 4,679,272 1,026,481
within one year
Net current assets (87,077) (117,529) (87,077) (117,529)
Total assets less
current 4,394,684 1,473,445 4,592,195 908,952
liabilities
Creditors: amounts
falling due
after more than one 1,387,772 753,144 1,387,772 753,144
year 11,990,417 4,874,177 11,990,417 4,874,177
558,105 230,015 558,105 230,015
(9,541,610) (5,427,434) (9,344,099) (4,948,384)
Net assets
4,394,684 429,902 4,592,195 908,952
Capital and reserves
- 1,043,543 - -
Called up share
capital 4,394,684 1,473,445 4,592,195 908,952
Share premium account
Share option reserve
Profit and loss
account
Equity shareholders'
funds
Minority interests -
equity
Total capital
employed
Group cash flow statement
Year ended 28 February 2007
2007 2006
� �
Net cash outflow from operating activities (3,665,613) (1,094,120)
Returns on investments and servicing of finance
Interest received 226,947 72,332
Capital expenditure
Payments to acquire tangible fixed assets (24,112) (725,464)
Acquisitions and disposals
Increase in stake in subsidiary undertaking - (5,422)
Part disposal of subsidiary undertaking 381,020 895,767
381,020 890,345
Net cash outflow before management of liquid
resources and financing (3,081,758) (856,907)
Financing
Net cash receipts from issue of ordinary share capital 6,036,632 -
Increase/(decrease) in cash 2,954,874 (856,907)
Notes to the Cash Flow Statement
Year ended 28 February 2007
A Reconciliation of operating loss to net cash outflow from
operating activities
2007 2006
Restated
� �
Operating loss (4,898,385) (2,445,858)
Increase in debtors (215,983) (92,212)
Increase in creditors 187,528 88,329
Movement in debtors and creditors on disposal
of (213,437) -
subsidiary 234,493 265,705
Depreciation - 657,362
Impairment of tangible fixed assets 855,988 -
Goodwill written off - 293,793
Loss on capitalisation of loan in subsidiary 328,090 198,694
Share based payments 56,093 (59,933)
Other non-cash movements including exchange
differences (3,665,613) (1,094,120)
Net cash outflow from operating subsidiaries
B Acquisitions and disposals
2007 2006
� �
(i) Increase in stake in subsidiary undertaking
(BAM) 858,248 7,957
Net assets acquired 855,988 3,825
Goodwill 1,714,236 11,782
Satisfied by: 1,714,236 6,360
Shares - 5,422
Cash 1,714,236 11,782
(ii) Disposal/Part disposal of subsidiary 238,723 916,271
undertaking (QGM) 334,514 (20,504)
Net assets disposed of 573,237 895,767
Gain/(loss) on disposal
- 895,767
Satisfied by: 573,237 -
Cash
Cost of investment in associate
C Analysis of net funds
1 March Exchange 28
2006 Cash flow movements February
� � � 2007
�
Cash at bank and 1,008,062 2,954,874 (5,410) 3,957,526
in hand
1,008,062 2,954,874 (5,410) 3,957,526
Net funds
D Reconciliation of net cash flow to movement in net funds
2007 2006
� �
Increase/(decrease) in cash in the 2,954,874 (856,907)
year (5,410) 1,511
Translation difference 2,949,464 (855,396)
Movement in net funds in the year 1,008,062 1,863,458
Opening net funds 3,957,526 1,008,062
Closing net funds
Notes to the preliminary results for the year ended 28 February 2007
1. This statement was approved by the Directors and agreed with
the Group's auditor on
28 August 2007.
2. The figures and financial information for the year ended 28
February 2007 do not
constitute the statutory financial statements for that year.
3. The figures and financial information for the year ended 28
February 2006 do not
constitute the statutory financial statements for that year. Those
financial
statements have been delivered to the Registrar and included an
auditor's report
which was unqualified.
4. Loss per ordinary share
The calculations for the basic and diluted loss per ordinary share
have been calculated
on the basis of the following information:
2007 2006
Restated
Loss attributable to the Group (�4,161,801) (�2,138,335)
Weighted average number of shares in issue during the year (Basic) 131,895,511 74,964,403
Weighted average number of shares in issue during the year (Diluted) 136,873,776 75,556,728
5. Share-based payment transactions - change in accounting policy
The Group adopted FRS 20 "Share-based payment" from 1 March 2006 and
as a result
comparative figures have been restated. In accordance with the
transitional provisions,
FRS 20 has been applied to all grants of equity instruments after 7
November 2002
that were unvested as of 1 March 2006. The effect on the Group and
Company loss for
the year to 28 February 2007 was an increase of �328,090 (2006:
�198,694) and the
cumulative effect on the deficit on the profit and loss account
reserve at the year
end was an increase of �558,105 (2006: �230,015). In both years,
there was an equal
and opposite movement in the share option reserve, so overall
shareholders' funds and
net assets were not affected in either year.
6. The directors do not propose the payment of a dividend.
7. The Report and Accounts of the Company for the year ended 28
February 2007 will be
sent to shareholders shortly. Copies will be available from the
Company's website
www.angusandross.com and from the registered office of the Company,
St Chad's House,
Piercy End, Kirkbymoorside, York YO62 6DQ. The Annual General Meeting
of the Company
will be held in York on Tuesday 2 October 2007.
For further information contact:
Angus & Ross plc
Robin Andrews, Chairman 01751 430988
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