Conroy Diamonds and Gold Plc ("the Company")
Final Results for the year to 31 May 2005
Chairman's Statement
I have great pleasure in presenting the Financial Statements for the twelve
months ended May 31 2005. The year has brought continued exploration success.
The Company has doubled the number of gold targets on its licences and is now
well down the road towards establishing a new gold province.
The ten new gold targets lie within a 20km2 area in the Armagh-Monaghan Gold
Belt and also within one of the three areas identified by SRK Consulting as
being highly prospective. These three areas relate to intersections of major
deep-seated lineaments and the Orlock Bridge Fault, itself a major geological
structure. Such lineaments, are of particular importance, because major mineral
deposits elsewhere in the world are often found on or near such structures.
Approximately 1,000 soil samples have been collected over the new targets and
analysed for gold content. Individual gold values of up to 739ppb, 434ppb,
267ppb, 222ppb and 178ppb were reported from separate anomalies. These are very
high values when viewed against a normal background level of less than 4ppb and
where values over 10ppb are considered anomalous. The targets are up to half a
kilometre in length.
Your Company's regional exploration strategy is to identify areas of gold
anomalism through regional soil sampling, followed up by a combination of deep
overburden sampling, trenching and drilling. This strategy has led to
significant gold discoveries in the Longford-Down Massif indicating the
potential for it to become a new gold province.
The latest discovery by your Company in the Armagh-Monaghan Gold Belt which
extends over only a small part of the Massif, is a new gold bearing structure
east of Tullybuck-Lisglassan in County Monaghan. This resulted from closely
spaced deep overburden and bedrock sampling. The structure, which is extensive,
is a linear feature which extends 250m along strike and is open in both
directions.
In addition to the discoveries in the Armagh-Monaghan Gold Belt, two
mineralised zones 400m apart have been outlined at Slieve Glah in County Cavan,
35 miles to the southwest. Although exploration there is still at an early
stage, initial results suggest excellent potential for further gold discoveries
in that part of the Longford-Down Massif.
All of the gold discoveries in the Massif are spatially related to the Orlock
Bridge Fault and are seen to be structurally controlled. Slieve Glah was
identified as a target because a major strike swing of the Orlock Bridge Fault
occurs at that location and this may have created a dilation zone. Such
structures are significant as they may be associated with substantial tonnage
of mineralised rock.
Under a Scheme of Arrangement the Company's diamond interests have been
transferred to Karelian Diamond Resources Plc ("Karelian"). As consideration
for this transfer Karelian issued 10,256,639 Ordinary Shares in that company to
the shareholders of the Company on the basis that for every 6 Ordinary Shares
held by a member of the Company, that member received 1 Ordinary Share in
Karelian. The Scheme of Arrangement was approved by shareholders on 8 July 2004
and approval was also given, subject to sanction by the High Court, for the
share premium account to be reduced by Euro1,025,000, that being the book value of
the diamond interests transferred. On 26 July 2004 the High Court sanctioned
the Scheme of Arrangement and confirmed the reduction of the share premium
account.
Appointment of broker and nominated advisor
City Capital Securities Limited, a part of City Capital Corporation (3C), has
been appointed as your Company's Broker. John East & Partners Limited have been
appointed as Nominated Advisor. I have great pleasure in welcoming both parties
and look forward to working with them in developing the financial status and
recognition which your Company's achievements on the ground merit.
Finance
During the course of the financial year, professional mining investor Mr Bruce
Rowan personally bought 13.9% of the share capital of your Company through a
placement of shares at 2.50p each, together with 20,000,000 warrants
exercisable at 3.75p per share. Mr Rowan owns a total of 10,450,000 shares,
14.61 per cent of the ordinary share capital. The funds raised (�250,000/Euro
375,000) contributed to your Company's working capital. I find it extremely
gratifying that someone of Mr Rowan's experience and success in the mining
industry has made such a significant personal investment in the Company and I
welcome him as a substantial shareholder.
The directors have considered the build-up of current liabilities on the
balance sheet. These liabilities arise mainly from the accrual of unpaid
directors' fees and remuneration over a number of years. By foregoing payment
of their fees and remuneration, the directors effectively allowed the Company's
exploration work on the ground to continue, even during times when capital
raisings via the Stock Exchange were extremely difficult.
The directors have indicated their intention to waive their entitlement to all
amounts accrued up to 31 August 2005. The amount of such accruals included in
creditors at 31 May 2005 was Euro1,330,974 and at 31 August 2005 was Euro1,422,782 (�
961,656).
After careful consideration, and discussions with the Company's advisors, the
Board has decided, subject to ratification by the shareholders at the Annual
General Meeting, to issue a total of 49,064,190 warrants to the individual
directors for nil consideration exercisable over 10 years at a subscription
price of Euro0.037 (Stg2.5p per share). A resolution to this effect has therefore
been included in the agenda for the AGM.
The number of warrants proposed to be issued to each director is as follows:
Name of Warrant Holder Number of Warrants
R.T.W.L Conroy 21,364,493
M.T.A Jones 13,839,858
J.P Jones 8,058,129
P Conroy 1,450,427
L.J Maguire 1,450,427
H.H Rennison 1,450,427
M.E Power 301,032
Estate of H.B Knott 1,149,395
I welcome this action by the directors as it represents a strong vote of
confidence in your Company and its prospects.
In the light of the excellent exploration results achieved to date, your
directors are considering how best to fund your Company's activities going
forward. Options being studied include joint venture and farm-out, as well as
other arrangements as may be appropriate for advancing the interests of your
Company.
Auditors
I would like to take the opportunity of thanking the partners and staff of KPMG
for their services to your Company during the course of the year.
Directors, Consultants and Staff
I wish to express my deep appreciation of the support and dedication of the
directors, consultants and staff, which has made possible the continued
progress and success which your Company has achieved.
Future Outlook
The demonstration of the widespread occurrence of gold on your Company's
acreage in the Longford-Down Massif in Ireland and its potential to become a
new gold province is a major achievement which augers well for the future of
your Company.
Professor Richard Conroy
Chairman
Profit and Loss Account
For the Year Ended 31 May 2005
2005 2004
Euro Euro
Operating Expenses (515,205) (331,321)
Other Income 1,958 5,595
Loss on ordinary activities (513,247) (325,726)
Tax on loss on ordinary activities - -
Loss retained for the Year (513,247) (325,726)
Profit and Loss Account at 1 June (1,758,884) (1,433,158)
Profit and Loss Account at 31 May (2,272,131) (1,758,884)
Loss per ordinary share - Basic and fully diluted (Euro0.008) (Euro0.006)
There are no recognised gains or losses other than the loss for the year.
Balance Sheet - 31 May 2005
2005 2004
Euro Euro
Fixed Assets
Mineral interests 6,043,726 6,202,068
Tangible assets 53,015 54,482
Financial assets - 2
6,096,741 6,256,552
Current Assets
Debtors 39,020 45,046
Cash at bank and in hand 62,689 517,862
101,709 562,908
Creditors: Amounts falling due within one year (1,586,037) (1,028,342)
Net Current Liabilities (1,484,328) (465,434)
Net Assets 4,612,413 5,791,118
Capital and reserves
Called up share capital 2,146,320 1,846,320
Capital conversion reserve fund 30,617 30,617
Share premium 4,707,607 5,673,065
Profit and loss account (2,272,131) (1,758,884)
Shareholders' Funds - all equity 4,612,413 5,791,118
Cash Flow Statement
For the Year Ended 31 May 2005
2005 2004
Euro Euro
Net Cash Inflow/(Outflow) from Operating Activities 70,638 (444,490)
Capital Expenditure and Financial Investment (888,353) (1,026,190)
Net Cash Outflow before Financing (814,715) (1,470,680)
Financing 359,542 1,685,707
(Decrease)/Increase in cash (455,173) 215,027
Notes to the Financial Statements
1. Publication of non-statutory accounts
The financial information set out in this preliminary announcement are
abbreviated accounts as defined in Section 19 of the Companies (Amendment) Act
1986.
The financial information for the period ended 31 May 2005 have been extracted
from the Company's financial statements to that date which have received an
unqualified auditors' report but have not yet been delivered to the Registrar
of Companies.
2. Loss per share
The calculation of the loss per ordinary share of Euro0.008 (2004 - Euro0.006) is
based on the loss for the financial year of Euro513,247 (2004 - Euro325,726) and the
weighted average number of ordinary shares on a basic and fully diluted basis
during the year of 64,487,011 (2004 - 53,210,678). Share options and warrants
are not included in the calculation of fully diluted shares since the Company
incurred a loss in 2005 and 2004 which results in these potential shares being
anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the period ended 31 May,
2005.
4. A copy of the Annual Report and Accounts will be sent to all shareholders
shortly and will be available from the Company's registered office, 10 Upper
Pembroke Street, Dublin 2.
END
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