Cambridge Mineral - Final Results
Cambridge Minerals Resources Plc / Index: AIM / Epic: CMR / Sector: Mining
22 July 2008
Cambridge Mineral Resources Plc ('CMR' or 'the Company')
Final Results
Cambridge Mineral Resources Plc, the AIM listed mining exploration and
production company primarily targeting
precious metals in South America, announces its results for the year ended 31
December 2007.
CHAIRMAN'S STATEMENT
2007 was another positive year for Cambridge Mineral Resources plc as it
continued its progress and added
value to its portfolio of mineral projects. In particular, our drive towards
precious metal production of
100,000 ozs gold per annum in South America advanced and we expect to commence
gold production in Colombia
later in 2008.
Despite considerable turbulence and difficulties in the financial markets,
Cambridge Mineral Resources plc
(CMR) succeeded in financing Quintana, its first gold mine in Colombia and
also obtained a conditional
finance facility for the development of two further gold mines in that country.
Precious and base metal prices continued to increase, adding further potential
value to CMR's projects.
Highlights during the year include:
Colombia
At our Quintana Gold Mine, we successfully completed a drilling programme in
March followed in June by the
completion of an independently-verified feasibility study, which confirmed
initial reserves and resources
totalling 86,000 ozs of gold. Following a review of the economics we decided to
proceed with the mine. We
approached financial institutions to seek funding for the project during the
second half of 2007 and were
able to successfully arrange and complete the funding in January 2008.
Peru
In February we obtained an option to purchase our partner's 50% interest in
the Patachanca claim group,
which we exercised in November. At our Rasuhuilca silver mine, underground
development advanced with
positive results and we commenced a feasibility study. Assuming a positive
outcome to that study and
obtaining the required finance, we expect to commence production in 2009.
Bulgaria
In August, we announced our holding of 1.5 million pounds of U308 uranium on
one of our existing licenses.
In October, Electrum Limited, a private international exploration group, became
our joint venture partners
replacing Asia Gold. Under the terms of this agreement, Electrum has to spend
US$2.2 million to earn 80%
of the projects concerned. Their spend to date is US$0.8 million.
Spain
The Company's 100%-owned projects in the Iberian Pyrite Belt in south-western
Spain are: Lomero-Poyatos, a
polymetallic underground mine on which we have previously completed a scoping
study, and Masa Valverde, a
base-metal exploration project containing the largest unmined sulphide ore body
in the region. In May an
independent NI 43-101 compliant study of our Spanish assets was completed,
leading to discussions with
third-parties regarding possible opportunities to finance and advance these
projects.
Corporate
During the year, the Company raised a total of �1,411,500 before expenses in
new equity via private
placements. The majority of the funds raised were applied to financing the
development of our South
American projects. Further capital will need to be raised in 2008.
The loss for the year was �646,399 (2006: loss of �797,636). CMR
continues to seek to minimise
administration expenditure, notwithstanding the increasing burden of regulatory
compliance costs.
Finally, the Company's South American assets have continued to develop. Our
strategies for gold and silver
production are on course in South America against a background of strong metal
prices. We look forward to
joining the ranks of junior gold and silver producers during the current
financial year. To conclude, I
would like to thank our shareholders for their continued support and our
staff for their dedication and
hard work.
Neil Maclachlan
Chairman
OPERATIONS REPORT
Colombia
Introduction
CMR entered Colombia at the end of 2005 and holds its interests through its
wholly owned subsidiary,
Colgold Inc. During 2007 the Company acquired two further concessions within the
world-class Frontino Gold
Belt in the Antioquia Department of north-western Colombia.
In total Colgold now holds 52,745 hectares of land under concession or
application in Colombia, of which
35,135 hectares is held for its potential to host copper and gold porphyries in
the Cauca Department of
south-west Colombia.
During the year Colgold employed up to 65 sub contractors at its operations in
Colombia. Colgold's recently
assembled in-house diamond drilling team completed approximately 2,500m of
drilling on Company properties
at an average cost of approx US$75 per metre (less than 50% of third party
commercial rates). During the
second half of the year, the drill rig and crews were contracted out to third
parties, to ensure maximum
return on the investment and to produce some additional income for the Company.
Expressions of interest
and confidentiality agreements have been signed with a number of major
companies regarding Colgold land
holdings in the Three Hills area of south-west Colombia.
Frontino Gold Belt
CMR continued to focus on the Frontino Gold Belt in the Antioquia Province, as
this area has historically
produced approximately 45% of the country's gold and continues to do so. This
belt is one of the world's
greatest mesothermal gold fields, with estimated production of 8-9Mozs from the
Segovia-Remedios region
alone. Mineralization occurs within extensive vein structures typically
exhibiting widths from a few
centimetres to several metres but typically in the 1 to 2m range. These veins
are either near-vertical or
dip at 30-45 degrees and are formed by ribbon-banded quartz with subordinate
pyrite, sphalerite and galena
containing free gold and have simple metallurgical profile with excellent
recoveries. Veins have been
traced along strike for several thousand metres and at distances of up to 1,800m
down dip.
CMR has 3 main projects within a 20km radius of Segovia-Remedios: Quintana, La
Rosaleda and El Cinco. The
eventual construction of a central processing plant offers a rapid method to
enable multi-mine start-ups
and the Company plans to develop this to a capacity of in excess of 100,000ozs
per annum over the next 4
years.
Quintana
The Quintana Project, which includes the Las Camelias property, is made up of 6
mining titles and one
application and totals 7,667 hectares.
The Quintana Vein is a mesothermal quartz-sulphide gold vein dipping at 40
degrees to the east and averages
just over 1m true thickness in the mine. A 10 drill hole programme completed in
2007, proved the existence
of the vein 300m down dip and returned higher grades than seen so far in the
mine and also generally better
true widths. At Quintana progress has been achieved by underground development
with development completed
on three levels to more than 100m down dip from the surface. Combined with the
drill programme, this work
has enabled the definition of a JORC compliant resource statement which has
defined 109,852 tonnes at
24.58g/t gold, 19.85g/t silver (measured, indicated and inferred) containing
86,822ozs of gold.
This resource is still open along strike and at depth below the deepest drill
intersects. In June 2007 CMR
completed a feasibility study as to the viability of the Quintana operations,
which concluded that the
project would give an NPV of US$10.8m at a 10% discount rate, based on a 50 t/d
operation over 5.5 years
and a gold price of US$600.
The initial capital expenditure was estimated at US$4.54m, with an average cash
operating cost of US$131/oz
over the mine life. In January 2008, CMR reported the completion of Project
Finance to allow commencement
of the necessary plant and infrastructure construction at the project, with
the aim of achieving gold
production within approximately six months. Work commenced on site in February
and is currently proceeding
according to schedule.
The Quintana Mine is expected to commence production in Q4 2008 at a rate of
~15,200 ozs of gold and 6,000
ozs of silver per annum. Drilling currently underway may lead to further
resources being defined and this
production rate being increased.
El Cinco
CMR completed the negotiation of the Colina Negra Project, to give it majority
interest in a contiguous
block of 7,400 hectares (6 concessions and one application) around the El
Cinco and Colina Negra mines.
Work on site in 2007 included the successful completion of the Chingale
exploration programme as well as
commencing exploration on the Colina Negra vein system and other mineralized
structures, and completing
initial prospecting of the surrounding areas held by the Company.
At Colina Negra, the following results were obtained across the vein: 1.0m at
114.31g/t gold, 1.0m at
66.2g/t gold, 1.5m at 35.2g/t gold, 1.0m at 22.5g/t gold, 1.0m at 10.4g/t gold
and 1.57m at 10.1g/t gold.
Prospecting results from the surrounding areas identified five areas for further
exploration, with results
including 19.68 g/t gold and 40 g/t silver over 0.7m in quartz float and 5.76
g/t gold and 10.2 g/t silver
over 1m in an outcrop of the main vein nearby, as well as 1.79 g/t gold, 318.4
g/t silver and 20.23 g/t
gold, 7 g/t silver from old waste dump piles of now abandoned trial workings.
CMR is in the process of
commencing road construction to the site, to facilitate a significant
(>8,000m) diamond drilling campaign
to test the Chingale and Colina Negra veins at depth.
Success of this programme will lead to underground access development for
an exploration/ production
programme, which should in turn lead to the definition of resources to
permit the commencement of a
feasibility study as to whether these veins can become the second and third mine
developments.
La Rosaleda
The La Rosaleda project is CMR's third project in the Frontino Gold Belt and
comprises 566.2 hectares in
three concessions and three applications, to the immediate south of Frontino
Gold Mines in the Segovia-
Remedios area. Initial exploration on the project commenced in May 2007
with a surface-prospecting
programme and to date over sixty old artisanal mine workings have been
identified which reflect the three
main structural trends seen in the district. In addition two currently active
artisanal mines are located
just outside the area of the agreement, returning grades of 6.89g/t gold and
57.6g/t silver over 0.9m. It
is planned to move the project to the drill ready stage by the end of 2008.
Mina del Sol
The Mina del Sol project also lies in Antioquia Province some 45km north-east
of Medellin and comprises
578.2 hectares in two permits.
During 2007 CMR completed a five drill hole, 700m programme to follow up its
trenching programme, which had
returned grades up to 70.72m at 1.41g/t gold. The first drill hole was
mineralized throughout its entire
length, giving an average grade of 1.46g/t gold over 90.0m. Follow up drill
hole ERD-0704 carried 138.84m
at 0.16g/t gold and hole ERD-0705 148.5m at 0.19g/t gold. Although not of
economic grade, the width and
continuity of this mineralization is considered to be highly significant and
prospective for the discovery
of a major intrusion-related gold deposit.
It is important to note that this is the first drilling at Mina del Sol.
Consequently, the controls of
mineralization are as yet not fully understood, so that some of the drill holes
missed the intended target.
However, the information gained from this initial drilling will enable the
next phase of drilling to be
better targeted by refining the geological model in terms of the
orientation and controls of the
mineralization.
Mina la Linda
The La Linda project lies to the south-west of Medellin just across the border
between Antioquia and Caldas
Provinces. During 2007 CMR completed horizontal underground development on the
La Linda vein, which has
now been completed to 51m from the adit portal. At the level of the adit a
complex faulted section was
encountered between 31-49m, which has the effect of both thinning the vein and
reducing the gold grade. As
a result, the weighted average for the vein along its entire exposed length in
the adit reduced to 6.02g/t
gold and 13.9g/t silver over 0.68m. It is believed that the fault zone
encountered has now been passed and
it is planned to continue further adit development for an additional 50m
before commencing vertical
development to allow for definition of the vein in three dimensions.
Three Hills
The Three Hills project comprises 35,135 hectares of exploration territory
situated in the western
Cordilliera of Colombia in Cauca Department. Due to adverse weather
conditions in Colombia during the
first half of 2007, it was not possible to complete the proposed follow-up
prospecting programme of the
Three Hills project.
Further to the initial field expedition to the area which noted extensive
artisanal alluvial gold workings
in the streams draining the area. It is hoped that during 2008 it will be
possible to complete this
programme and define the source of alluvial gold currently being exploited
in the streams. CMR has
commenced discussions with a number of major international mining companies
regarding the possibility of
entering into a joint venture to fast track exploration on the property.
Peru
During the year CMR completed the acquisition of the outstanding 50% of the
three Patacancha permits that
it did not previously hold for a cost of US$265,000. Following this
acquisition the titles were formally
transferred to CMR's wholly-owned subsidiary, Minera Peru Gold S.A.C.
Rasuhuilca
Development activities continued during the first quarter of 2007 with the
completion of 235.1m of vertical
and lateral underground development to provide vertical contiguity of sample
data and also as primary stope
development. Following completion of this underground development and return of
assay values from this and
the pre-existing workings it has been possible to develop a block model and
to estimate the Measured,
Indicated and Inferred Resource to JORC Standards.
The overall Rasuhuilca Main and west zones contain 321,100 tonnes at 2.15g/t
gold, 185.2g/t silver (252g/t
silver equivalent) at a 75g/t silver equivalent cut-off. Additional potential
to expand these resources
exists to the west within the Rasuhuilca north-west and Rasuhuilca south
areas around the 4941m Level.
Within this Resource a proven and probable reserve (JORC Standard) of 168,700
tonnes at 3.05g/t gold,
216g/t silver (368 g/t silver equivalent) has been defined in the mining plan
for the main zone.
This mining plan envisages the blasting of 50,300 tonnes as sub-level and stope
development ore and a mere
2,500 tonnes of waste development thanks to the extent of the pre-existing
development. Metallurgical
testwork has indicated that the average gold recovery will be ~85% whilst
the average silver recovery will
be ~65%. The lower silver recovery is believed to be due to certain
soluble silver minerals not being
recoverable via cyanidation and Merrill-Crowe process fixation.
Notwithstanding this the average recoverable value per tonne is estimated to
be~US$155 per tonne (at
current metal prices) with a total cost of mining and processing (inclusive
of capital costs) being
~US$41.9 per tonne of ore milled over the life of mine. On this basis the
average total production cost of
silver is estimated to be ~ US$4.89/oz. CMR expects to complete the
feasibility study on Rasuhuilca in
2008 and has already commenced procedures to acquire the requisite permits
from the Peruvian central and
regional government departments in order to initiate mine operations in 2009.
Patacancha Area
The Patacancha permits cover a total area of around 1,800 hectares and, in
addition to Rasuhuilca, contain
a number of already identified prospects with excellent potential. CMR is
presently negotiating with a
number of companies who have expressed serious interest in exploring the permits
for the potential to host
bulk tonnage gold and gold-copper mineralization.
New Projects
During the year CMR was offered several small gold mining projects in the
vicinity of Patacancha and
elsewhere in Peru. Thus far none of these has been pursued as none was
believed to have immediate
production potential. CMR will continue to examine any opportunities that
present themselves to the
Company.
Bulgaria
During the year CMR completed a joint venture agreement in Bulgaria with a
subsidiary of the Electrum
Global Gold Group. This earn-in joint venture agreement gives the option to
Electrum to earn up to an 80%
interest in a number of exploration permits and applications presently held in
Bulgaria by expending US$2.2
million within five years and making an initial investment of GBP50,000 for
the acquisition of 833,333
ordinary shares in the Company.
Electrum Global Gold Group is a privately-held gold exploration company with
one of the largest and most
diversified exploration portfolios in the world. Electrum holds interests in
over 70 projects located in
the western United States, Africa, South America, Asia, and now, Eastern Europe.
Its management services company, Electrum USA Limited, is headquartered in
Denver, Colorado. During the
year Bulgaria became a full EU member and the government has made a successful
step forward to make the
environmental, mining and concession legislation of the country EU compliant.
Such work has caused some
delays in the processing and granting of new exploration permits in country but
CMR is now optimistic that
all new pending applications for gold and uranium will be issued in 2008.
Dobroselets
Exploration activities accelerated in the last quarter of 2007 on the
Dobroselets permit. This area
includes a historically evaluated uranium deposit containing ~1.5 million
lbs of U308 and also the Chaira
gold deposit, containing 450,000 ozs of gold. The Chaira mineralization
comprises complex multi-directional
sheeted veins of quartz and pyrite cutting structural zones within a Cretaceous
grano-diroritic intrusion
with extensive and widespread alteration.
The scale of alteration and mineralization suggests the presence of a
major intrusion-related gold
mineralizing system that will require extensive evaluation but has excellent
potential to host an economic
gold deposit.
The first drilling campaign at Dobroselets for 2,450m, commenced in early
December 2007, and was planned
for ~1,200 metres of verification diamond drilling in Chaira and
~1,250 metres on the Mogilite area, which
is the shallow, near surface extension of the Chaira mineralization.
Rozino
CMR recently completed a scoping study evaluating the Tashlaka Hill gold
resource in readiness for
application to the Bulgarian government to register a 'Commercial Discovery' and
subsequently to apply for
a 'Mining Concession'.
Tashlaka Hill is a low-sulphidation sediment-hosted deposit containing over
285,000 ozs of gold. At this
stage of work the Company is legally entitled to an extension for one year to
enable the completion of the
financial, social and environmental analysis for a mining development. The
Company is also entitled to
complete additional verification field work and in-fill drilling, which might
be required to enable the
completion of the subsequent concession application.
CMR believes that its new joint venture partner will bring a wealth of
experience with them as well as
substantial financial strength. Such contribution will be of significant help
in accelerating the overall
exploration programme in country and lead the joint venture Company to the next
stage of becoming a gold
miner in Bulgaria.
Uranium
During the year CMR identified and prepared seven applications for new
exploration permits which were
lodged with the government of Bulgaria. These areas cover both existing known
uranium resources and also
have excellent potential to host presently undiscovered uranium mineralization.
Delays by the Ministry of
Environment (the relevant licensing authority) during 2007, which have
impacted on most companies
throughout the natural resources sector, are expected to ameliorate during 2008
and the expectation is that
the permits will be issued as soon as possible.
Spain
CMR wholly owns two projects in the Iberian Pyrite Belt in south-western Spain,
a region world renowned for
the presence of numerous 10-100Mt base metal sulphide deposits.
Lomero-Poyatos
This comprises a polymetallic volcanic hosted massive sulphide deposit
formerly mined for production of
sulphuric acid, and estimated to contain significant quantities of both precious
and base metals. CMR has
conducted extensive exploration in the 326 hectares licensed, including 10,082
metres of drilling, and an
independent Scoping Study was completed in 2005, resulting in Indicated
Resources of:
Tonnes Gold g/t Silver g/t Copper % Zinc% Lead % Notes
3,710,00 3.26 27.8 0.87 1.57 1.16 1..5 g/t gold cut-off
At the time, the outcome of the Scoping Study indicated that the project was
not deemed to be sufficiently
economically viable to repay the large capital cost of acquiring and
re-commissioning a nearby processing
plant. However, since then, metal prices have improved considerably and
CMR has also established
alternative processing options at significantly lower cost than before, such
that the mine is now estimated
by the Company to be economically viable.
Masa Valverde
This project includes two permits totalling 3,482 hectares that host, among
others, the Masa Valverde
deposit, the largest body of unmined massive-sulphide in the Iberian
Pyrite Belt, comprising both
polymetallic massive sulphides and cupriferous stockwork.
Historic drilling has intersected up to 180m of massive sulphide and
up to 111m of stockwork
mineralization, resulting in the following Inferred Resources:
Tonnes Gold g/t Silver g/t Copper % Zinc% Lead % Notes
119,950,000 0.86 41.9 0.57 4.30 1.28 3% zinc cut-
off
79,950,000 0.43 22.4 0.76 0.38 0.50 0.5% copper
cut-off
There is significant potential for a high-grade zinc/lead deposit to be
defined within the massive
sulphides. Potential also exists for the upgrading and extension of the copper
stockwork mineralization.
The mineralization is open to the west, with one intersection of 89m of massive
sulphides. A number of
geophysical anomalies in the project area remain untested.
CMR is seeking to obtain additional finance for the development of both
Lomero-Poyatos and Masa Valverde.
CONSOLIDATED INCOME STATEMENT
Note 2007 2006
� �
Other income 2 7,005 27,193
Administrative costs 2 (774,467) (686,561)
Share of loss from joint ventures - (635)
Impairment of exploration costs 6 (413,020) (137,633)
Forgiveness of loan 2 459,477 -
Disposal of available for sale investment 2 (22,400) -
Excess of acquirer's interest in the net fair value of acquiree's 2
94,000 -
identifiable net assets over cost
---------- ----------
Loss before tax (649,405) (797,636)
---------- ----------
---------- ----------
Tax 4 - -
Loss after tax (649,405) (797,636)
---------- ----------
Attributable to:
Equity holders of the parent (646,399) (797,636)
Minority interest (3,006) -
---------- ----------
(649,405) (797,636)
---------- ----------
---------- ----------
Loss per share:
Basic loss per share 5 (0.24p) (0.49)p
---------- ----------
Diluted loss per share (0.24p) (0.49)p
---------- ----------
---------- ----------
All transactions arise from continuing operations.
CONSOLIDATED BALANCE SHEET
Note 2007 2006
Assets � �
Non-current assets
Exploration expenditure 6 8,342,698 6,247,179
Property, plant and equipment 7 172,626 92,425
Goodwill 6 1,191,706 1,191,706
Available for sale investments 8 - 80,000
--------- ----------
9,707,030 7,611,310
Current assets
Cash and cash equivalents 9 40,862 621,392
Trade and other receivables 10 456,393 199,782
--------- ----------
497,255 821,174
---------- ----------
Total assets 10,204,285 8,432,484
---------- ----------
---------- ----------
Liabilities
Non-Current Liabilities
Borrowings 11 (86,303) -
----------- ------------
Current liabilities
Trade and other payables 11 (931,995) (555,132)
----------- ------------
Total liabilities (1,018,298) (555,132)
------------ ------------
Net assets 9,185,987 7,887,352
------------ ------------
------------ ------------
Equity
Equity attributable to equity holders of the parent
Share capital 12 2,711,156 2,089,989
Share premium account 13 11,160,040 10,456,807
Revaluation reserve 15 - 48,500
Merger reserve 14 2,116,435 2,116,435
Other reserves - 1,373
Translation reserve 17 618,416 (64,345)
Accumulated loss 16 (7,417,806) (6,771,407)
------------ ------------
Equity attributable to equity holders of the parent 9,188,241 7,887,352
Minority interest (2,254) -
------------ ------------
Total equity 9,185,987 7,887,352
------------ ------------
------------ ------------
The financial statements were approved by the Board of Directors on 21 July
2008.
CONSOLIDATED CASH FLOW STATEMENT
Note 2007 2006
� �
Net cash outflow from operating activities 18 (380,089) (892,837)
Investing Activities
Exploration costs (1,578,955) (1,653,962)
Purchase of property, plant and equipment (87,952) (74,752)
Proceeds from sale of available for sale investment 57,600 -
Interest received 4,973 26,558
Acquisition of investments - (28,965)
------------ ------------
Net cash used in investing activities (1,604,334) (1,731,121)
------------ ------------
Financing activities
Proceeds from issue of share capital 1,411,500 1,997,750
Share issue costs (87,100) (67,606)
Proceeds from long term borrowings 79,493 -
------------ ------------
Net cash from financing activities 1,403,893 1,930,144
Decrease in cash (580,530) (693,814)
Cash at the beginning of the period 621,392 1,315,206
------------ ------------
Cash and Cash Equivalents at the end of the period 40,862 621,392
------------ ------------
------------ ------------
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
2007 2006
� �
Exchange differences on translation of foreign operations 668,211 (64,345)
Transfers:
Transferred to profit and loss on sale of available for sale investment
48,500 -
--------- ---------
Net income recognised directly in equity 716,711 (64,345)
--------- ---------
Loss for the year (649,405) (797,636)
--------- ---------
Total recognised income and expense for the period (67,306) (861,981)
--------- ---------
--------- ---------
Attributable to:
Equity holders of parent (69,560) (861,981)
Minority Interest 2,254 -
NOTES TO THE FINANCIAL STATEMENTS
1. Segmental analysis
There is only one business operating segment for Cambridge Mineral Resources
Plc.
Cambridge Mineral Resources Plc's profits and losses before taxation and its
geographic allocation of net
assets may be summarised as follows:
Profit / (Loss) Net assets
2007 2006 2007 2006
� � � �
United Kingdom (791,357) (653,629) 7,972,218 6,775,124
Spain (49,397) (144,874) 430,132 483,071
Peru (3,382) (1,966) (7,416) (1,966)
Panama 24,273 (2,069) 41,964 (2,069)
Colombia 18,421 4,922 (2,952) 4,912
Bulgaria 155,043 - 752,041 628,280
--------- --------- ---------- ----------
(646,399) (797,636) 9,185,987 7,887,352
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Exploration costs per geographic segment are shown below:
Exploration Costs
2007 2006
� �
United Kingdom - -
Spain 3,783,661 3,324,261
Peru 644,420 401,698
Panama 867,750 590,760
Colombia 1,102,687 498,749
Bulgaria 1,944,180 1,431,711
--------- ---------
8,342,698 6,247,179
--------- ---------
--------- ---------
2. Loss before taxation
The loss on ordinary activities before taxation is stated after
charging/(crediting):
2007 2006
� �
Finance income 4,974 27,193
Fees payable to the Company's auditor for the audit of the Company annual
35,000 15,000
accounts
- Tax 3,500 2,100
- Advice on conversion to IFRS 10,000 -
- Other non audit services 10,600 2,000
- Audit of foreign subsidiaries 10,140 8,239
Depreciation of property, plant and equipment 38,566 39,512
Impairment of intangible assets 413,020 24,034
Expired contracts - 113,599
Amortisation 2,254 1,717
Operating lease rentals land and buildings 7,514 2,747
Excess of acquirer's interest in the net fair value of acquiree's 94,000 -
identifiable assets, liabilities and contingent liabilities over cost
Foreign exchange (gain)/loss (17,501) 64,345
Loss on disposal of available for sale financial asset (22,400) -
Forgiveness of loan (459,477) -
Fees paid to Grant Thornton UK LLP and its associates for non-audit services to
the Company itself are not
disclosed in the individual account of Cambridge Mineral Resources Plc because
the Company's consolidated
accounts are required to disclose such fees on a consolidated basis.
A liability payable by Hereward Ventures was forgiven as a result of the
withdrawal by a previous joint
venture partner, giving rise to a credit of �459,477. On recognition of the
withdrawal of the previous
partner and CMR's increased interest rising to 100% a credit of �94,000 to the
income statement resulted
which represents the excess of fair value of the acquiree's identifiable assets
liabilities and contingent
liabilities over cost.
3. Directors and employees
Staff costs excluding directors during the year were as follows:
2007 2006
� �
Wages and salaries 148,310 109,579
Social security costs 28,465 27,293
------- -------
176,775 136,872
------- -------
------- -------
The average number of employees in the group during the year was 9 (2006: 7).
Remuneration in respect of key management personnel and directors was as
follows:
2007 2006
� �
Emoluments:
- wages and salaries 112,500 94,354
- compensation for loss of office - 35,319
- fees 181,774 155,324
------- -------
294,274 284,997
------- -------
------- -------
The amounts set out above include remuneration in respect of the highest paid
director as follows:
2007 2006
� �
Emoluments 70,500 70,500
------- -------
------- -------
No directors participate in money purchase or final salary pension schemes. No
director exercised any share
options during the year.
4. Tax on loss on ordinary activities
The tax charge is based on the loss for the year and represents:
2007 2006
� �
Loss on ordinary activities for the year (649,405) (797,636)
United Kingdom corporation tax at 30% (2006: 30%) (194,822) (239,291)
UK expenses not deductable for tax purposes 13,919 -
UK tax losses not relieved 223,489 3,476
Foreign profits not taxable (102,493) 103,273
Adjustments on consolidation not taxable 59,907 132,542
--------- ---------
Tax Charge - -
--------- ---------
--------- ---------
The following deferred tax asset has not been recognised in relation to the UK
tax losses:
Future UK tax rate at 28.00%
Fixed asset timing differences (6,139)
Losses and other deductions (1,873,422)
-----------
(1,879,561)
-----------
-----------
5. Loss per share
The loss per share is based on the loss for the year divided by the weighted
average number of shares in
issue during the year.
2007 2006
� �
Loss after tax (�) (646,399) (797,636)
---------- -----------
---------- -----------
Weighted average number of shares 221,429,860 163,172,463
Basic loss per share (pence) (0.24p) (0.49p)
Diluted loss per share (pence) (0.24p) (0.49p)
For the current period, as diluted earnings would be increased when taking the
warrants and share options into
account, these are deemed to be antidilutive and are ignored in the calculation
of diluted earnings per share.
The instruments that have been excluded are shown below.
Dilutive earnings per share is calculated by adjusting the weighted
average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The
Company has two categories of
dilutive potential ordinary shares: warrants and share options. A
reconciliation between the denominator used
in the calculation of basic loss per share and diluted loss per share is shown
below:
Weighted average number of shares: 221,429,860 163,172,463
Warrants 46,254,155 17,738,630
Options 2,081,370 1,450,000
----------- -----------
Total Fully Diluted Shares 269,765,385 182,361,093
----------- -----------
----------- -----------
6. Intangible assets
Goodwill Exploration Total
Note expenditure
� � �
Gross carrying amount 1,191,706 4,081,640 5,273,346
Accumulated amortisation and impairment - (7,709) (7,709)
--------- --------- ---------
Carrying amount at 1 January 2006 1,191,706 4,073,931 5,265,637
Gross carrying amount 1,191,706 6,256,449 7,448,155
Accumulated amortisation and impairment - (9,270) (9,270)
--------- --------- ---------
At 31 December 2006 1,191,706 6,247,179 7,438,885
Gross carrying amount 1,191,706 8,758,594 9,950,300
Accumulated amortisation and impairment - (415,896) (415,896)
--------- --------- ---------
Carrying amount at 31 December 2007 1,191,706 8,342,698 9,534,404
--------- --------- ---------
--------- --------- ---------
Goodwill Exploration Total
Expenditure
� � �
Carrying amount at 1 January 2006 1,191,706 4,073,931 5,265,637
- separately acquired/internally developed - 2,404,320 2,404,320
Expired contracts - (113,599) (113,599)
Impairment - (24,034) (24,034)
Amortisation - (1,717) (1,716)
Net exchange differences - (91,722) (91,722)
--------- --------- ---------
Carrying amount at 31 December 2006 1,191,706 6,247,179 7,438,885
- separately acquired/internally developed - 1,872,012 1,872,012
- through business combinations 24 - 185,519 185,519
Amortisation - (2,254) (2,254)
Impairment - (413,020) (413,020)
Net exchange differences - 453,262 453,262
--------- --------- ---------
Carrying amount at 31 December 2007 1,191,706 8,342,698 9,534,404
--------- --------- ---------
--------- --------- ---------
The impairment was due to management evaluation and decision to cease
exploration activities in the relevant areas
and was carried out after the official termination of the contract with the
relevant government authorities.
The group has determined that the carrying amount of �3,324,261 in relation
to exploration activities and
�1,191,706 for Goodwill in Spain is not impaired. This has been determined
based on values prepared by external
parties and the performance of like companies that the carrying value of the
exploration costs is not impaired.
7. Property, plant and equipment
Note Office Motor Total
equipment Vehicles
� � �
Gross carrying amount 269,970 146,541 416,511
Accumulated depreciation and impairment (235,740) (118,357) (354,097)
--------- --------- ---------
Carrying amount at 1 January 2006 34,230 28,184 62,414
Gross carrying amount 331,713 138,563 470,276
Accumulated depreciation and impairment (258,168) (119,683) (377,851)
--------- --------- ---------
Carrying amount at 31 December 2006 73,545 18,880 92,425
--------- --------- ---------
--------- --------- ---------
Gross carrying amount 435,011 106,857 541,868
Accumulated depreciation and impairment (293,561) (75,681) (369,242)
--------- --------- ---------
Carrying amount at 31 December 2007 141,450 31,176 172,626
--------- --------- ---------
--------- --------- ---------
Reconciliation of the carrying amounts shown in the
consolidated financial statements
Equipment Motor Total
Vehicles
� � �
Carrying amount at 1 January 2006 34,230 28,184 62,414
- separately acquired 72,211 - 72,211
Disposals (8,142) (5,837) (13,979)
Depreciation (30,585) (8,927) (39,512)
Depreciation released on disposal 6,293 5,837 12,130
Net exchange differences (462) (377) (839)
--------- --------- ---------
Carrying amount at 31 December 2006 73,545 18,880 92,425
- separately acquired 87,952 - 87,952
-through business combinations 24 12,954 24,795 37,749
Assets disposed of (8,824) (67,921) (76,745)
Depreciation (27,408) (11,158) (38,566)
Depreciation released on disposal - 65,068 65,068
Net exchange differences 3,231 1,512 4,743
--------- --------- ---------
Carrying amount at 31 December 2007 141,450 31,176 172,626
--------- --------- ---------
--------- --------- ---------
All depreciation and impairment charges are included in 'administration costs'
in the income statement.
8. Financial assets
Available for sale
investments
�
Valuation
At 1 January 2006 50,400
Revaluations 29,600
-------------------
At 31 December 2006 80,000
-------------------
-------------------
Disposal of financial assets (80,000)
-------------------
At 31 December 2007 -
-------------------
-------------------
The group held an investment in an associate Caracal Cambridge
Bulgaria EAD (CCB) as at 31 December
2006. This investment was carried at a value of nil. No losses have been
recognised in the Income Statement
for the current period, however, had these losses been recognised they would
have been, �136,195.
9. Cash and cash equivalents
2007 2006
� �
Bank and cash balances 40,862 285,817
Short term deposits - 335,575
------ --------
40,862 621,392
------ --------
------ --------
10. Trade and other receivables
2007 2006
� �
Recoverable VAT 184,823 141,722
Other receivables 202,125 -
Prepayments and accrued income 69,445 58,060
------- --------
Total trade and other receivables 456,393 199,782
------- --------
------- --------
The carrying values are considered to be a reasonable approximation of fair
value and are considered
recoverable within one year by the directors.
11. Trade and other payables
2007 2006
� �
Current liabilities
Trade and other payables 508,867 283,659
Social security and other taxes 35,461 15,066
Accruals and deferred income 387,667 256,407
------- --------
931,995 555,132
------- --------
------- --------
The carrying values are considered to be a reasonable approximation of
fair value.
2007 2006
� �
Non current liabilities
Borrowings 86,303 -
------- -----
------- -----
(a) The group has one loan taken out for the purchase of capital
equipment:
(i) a loan of �86,303 is due and payable in one instalment on October 25
2010.
(ii) the loan carries an interest rate of 13.93%
(iii) the fair value of this amount is �110,347. This has been calculated
using the repayment
terms and the relevant interest rate.
12. Share capital
2007 2006
� �
Authorised
500,000,000 ordinary shares of 1p each 5,000,000 5,000,000
--------- ---------
--------- ---------
Allotted, called up and fully paid
271,115,704 (2006: 208,999,038) ordinary shares of 1p each 2,711,156 2,089,989
--------- ---------
--------- ---------
Allotments during the year
During the year the Company allotted a total of 62,116,666 ordinary 1p shares
for cash consideration of
�1,411,500. The difference between the total consideration, net of expenses of
�87,100, and the total
nominal value has been credited to the share premium account.
(a) Share options
All the share options below were granted after 7 November 2002, with the
exception of the options granted
on the 1 April 2007, were all fully vested as at 1 January 2006. The Company
has granted options to
subscribe for ordinary 1p shares as follows:
Exercise Number of
price per options
share unexercised
Date granted Period exercisable (pence)
31 December 2001 31 December 20012 to 30 December 2008 20.00p 450,000
19 February 2003 19 February 2003 to 18 February 2010 10.25p 700,000
19 February 2003 19 February 2003 to 18 February 2010 14.50p 300,000
1 April 2007 1 April 2007 to 31 March 2009 3.50p 175,000
-----------
1,625,000
-----------
-----------
The Company's share price at 31 December 2007was 2.05p. The highest and lowest
share prices during the
year were 4.88p and 1.8p respectively.
During the year ended 31 December 2007 175,000 share options were issued to a
Colombian employee. These
share options at the date of grant had a market value of �3,500 which the
directors consider to be
a reasonable estimation of their fair value. The potential charge arising has
not been charged to the income
statement.
The Company issued warrants to subscribe in cash for 30,666,666 ordinary 1p
shares as shown in the
table below. The warrants are exercisable at any time between the dates shown
and the date upon which a full
Stock Exchange listing or a takeover becomes effective.
(b) Share warrants
The Company issued warrants to subscribe in cash for 30,666,666 ordinary 1p
shares as shown in the table below.
The warrants are exercisable at any time between the dates down and the date
upon which a full Stock Exchange
listing or a takeover becomes effective.
Date of grant Number of Exercise Exercisable Exercisable
Warrants Price From To
21 June 2007 8,333,333 �0.0300 21/06/2007 20/06/2008
21 June 2007 8,333,333 �0.0300 21/06/2007 20/06/2009
6 August 2007 3,000,000 �0.0300 06/08/2007 05/08/2008
6 August 2007 3,000,000 �0.0300 06/08/2007 05/08/2009
6 August 2007 2,000,000 �0.0300 06/08/2007 05/08/2008
6 August 2007 2,000,000 �0.0300 06/08/2007 05/08/2009
23 October 2007 1,000,000 �0.0300 23/10/2007 22/10/2008
23 October 2007 1,000,000 �0.0300 23/10/2007 22/10/2009
23 October 2007 2,000,000 �0.0200 23/10/2007 22/10/2010
The directors are satisfied that the warrants outstanding as at 31 December
2007 are equity in nature and
therefore no fair value adjustment arising.
The following table shows the number and weighted average exercise price of
all the unexercised share options
and warrants at the year end:
2007 2006
Number Weighted average Number Weighted average
exercise price exercise price
Outstanding at 1 34,150,000 3.47p 1,450,000 14.16p
January
Options granted during 175,000 3.50p - -
the year
Warrants granted 30,666,666 3.00p 32,700,000 3.00p
during the year
---------- ---------------- ---------- -----------------
Outstanding at 31 64,991,666 3.24p 34,150,000 3.40p
December
---------- ---------------- ---------- -----------------
---------- ---------------- ---------- -----------------
13. Share premium account
�
At 1 January 2006 9,165,330
Premium on allotments during the year 1,291,477
----------
At 31 December 2006 10,456,807
Premium on allotments during the year 703,233
----------
At 31 December 2007 11,160,040
----------
----------
Premium is net of share issue costs of �87,100.
14. Merger reserve
�
At 1 January 2006 and 31 December 2006 2,116,435
---------
At 31 December 2007 2,116,435
---------
---------
15. Revaluation reserve
�
At 1 January 2006 18,900
Revaluation of investments 29,600
---------
At 31 December 2006 48,500
Disposal of investments (48,500)
---------
At 31 December 2007 -
---------
---------
16. Accumulated loss
�
At 1 January 2006 (6,038,116)
Transfer to translation reserve 64,345
Retained profit for the year (797,636)
-----------
At 31 December 2006 (6,771,407)
Retained loss for the year attributable to the group (646,399)
-----------
...truncated
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