Final Results

27 March 2007 BISICHI MINING PLC Preliminary Results for the year ended 31 December 2006 2006 2005 Revenue Â£13,239,000 Â£13,485,000 Profit before interest, tax and Â£3,737,000 Â£5,471,000 depreciation Profit before tax Â£2,614,000 Â£4,206,000 Diluted earnings per share 19.68p 30.19p Dividend per share up 11.1% 2.50p 2.25p Commenting, Michael Heller, chairman of Bisichi Mining PLC said: "2006 has been both a challenging and a successful year for Bisichi Mining and, with the many opportunities now arising in the South Africa, we look forward to the coming year with confidence". END For further information, please call: Andrew Heller Robert Corry, Bisichi Mining PLC 020 7415 5030 Christopher Joll MJ2 Ltd 020 7491 7776 CHAIRMAN'S STATEMENT I am pleased to report to shareholders that a very strong performance in the second half has resulted in a profitable year for Bisichi Mining PLC ("Bisichi") with Group profit on ordinary activities before interest, taxation and depreciation at Â£3,737,000 (2005: Â£5,471,000). As already reported, the first six months of 2006 were severely impacted by the consequences of the fatality that occurred in late 2005 at Black Wattle Colliery. However, 2006 clearly demonstrated the strength of the management team and its ability to deal swiftly and effectively with unforeseen problems in our mining operations. The second half of the year has been the most profitable in the company's history. One of the most exciting aspects of the past year in South Africa has been the sharp increase in the availability of mineral rights for development by empowered mining companies such as ourselves. This has arisen because many reserves have been returned to the State as a result of the "use it or lose it" provisions of the Mineral and Petroleum Resources Development Act 2004 ("MPRDA"). With Black Wattle's Black Economic Empowerment ("BEE") status and successful track record we are well placed to take advantage of these newly-available coal reserves. During the past year, we have forged relationships with new BEE partners which will allow us to take the operations in South Africa onto the next level. In this regard, I am pleased to announce the appointment of David Nkosi as a Director of Black Wattle Colliery. David is a graduate of the Department of Minerals and Energy ("DME") training programme and has been involved in the mining sector for several years. We look forward to his active involvement as a Director of Black Wattle identifying new reserves and helping to grow our South African business. Shareholders should be aware that, as a result of certain difficulties that have emerged in our relationship with the minority shareholder at Black Wattle Colliery, we have had to remove Sipho Dube and Duku Mogoai (his associate at Endulwini Resources) as directors of the Black Wattle Colliery. In addition we have cancelled the Agreement by which the Mhlaba Dube Memorial Trust held 37.5% shareholding in Black Wattle and we have initiated court proceedings in South Africa to obtain a declaration that the Trust is no longer a shareholder. This legal action does not affect the operation of Black Wattle Colliery nor its mineral rights granted under the MPRDA. Once this matter has been resolved, we will invite a new BEE partner to join us as a shareholder in Black Wattle. Black Wattle was one of the first coal mines in South Africa to achieve BEE status in 1999 and Bisichi remains committed to maintaining its leadership in this regard. As shareholders have already been informed, Ezimbokodweni Mining (Pty) Limited is the joint venture company formed to own and develop the Pegasus Reserve. This company is owned as to 49% by Bisichi and 51% by Endulwini Resources. Although the DME has converted the prospecting rights, Ezimbokodweni has not yet provided the 100% financial guarantee required by the vendor, Ingwe, in accordance with its obligation under the original Purchase and Sale Agreement. We have already indicated to Ingwe that Bisichi is willing to put up a guarantee for its 49 % of the project and we are actively pursuing the resolution of this issue with all parties concerned. If the development of Pegasus does not proceed as planned the current availability of other high quality coal reserves referred to earlier in this report provides us with numerous opportunities to develop our mining activities in South Africa independent of Pegasus. To that end, we are in the process of purchasing a drill rig and have set up a dedicated team in a satellite office to work full time on reserve acquisitions. I am delighted to report that Bisichi's UK retail property portfolio, managed by London & Associated Properties PLC has contributed most satisfactorily to this year's profits and has underpinned our mining activities. The portfolio, including our share of Dragon Retail Properties, is virtually fully let, and was valued at 31 December 2006 by independent chartered surveyors at Â£19.3 million, an increase of 10%. To underline our confidence in the future of Bisichi, your directors are recommending a dividend of 2.50p, compared to 2.25p per share in the previous year, an increase of 11.1% This will be paid on 13 August 2007 to shareholders on the register as of 20 July 2007. 2006 has been both a challenging and a successful year for Bisichi and, with the many opportunities now arising in the South Africa, we look forward to the coming year with confidence. MICHAEL HELLER Chairman 27 March 2007 MINING REVIEW Mining Report As the Chairman has reported, the first six months of 2006 were greatly affected by the aftermath of the first underground fatality in Black Wattle's history which took place in late 2005. The closure of the Continuous Miner section immediately reduced production which had a negative impact on profitability. In the wake of the accident, your management took a number of decisive actions in order to turn the situation around. The Continuous Miner was overhauled and lowered during this down time period which facilitated its return to reliable operation earlier than was originally anticipated as it could start to mine in areas of lower seam height. We obtained accelerated permission from the DME to mine under a major highway, which allowed us access to a substantial untouched portion of our reserves. We also took over ownership of the Black Wattle's washing plant, which has allowed us to upgrade the facility, improve yields and increase overall productivity. Moreover, we successfully achieved substantial increases in price for each of our major products. Finally, we have entered into a long term contract with a BEE company for the sale of our discard material to Eskom, the South African electricity utility. This contract both generates substantial revenue and will greatly reduce our rehabilitation liability when we eventually cease mining. Furthermore, it has already reduced our handling and stockpiling expenses on the mine. As a result of these actions by your management, Black Wattle delivered its most profitable half year in its history in the second half of 2006. Production: Black Wattle Colliery The two bord and pillar and continuous miner sections performed well in the second half of 2006. Taking the setbacks of late 2005 and the first half of 2006 into account, we are very pleased to have achieved a run-of-mine production figure for the year of 1.199 million tonnes, just 7.5% less than 2005. The three sections should continue to mine at acceptable levels in 2007. We will increase production when we receive opencast permission, which has recently been applied for from the DME. In this regard, we have had the necessary meetings with all interested and affected parties and are awaiting DME approval to commence opencast mining. Marketing: Black Wattle Colliery 2006 was a very successful year, both in terms of export-based sales and the prices we are achieving in a very strong domestic market. In April 2006, we achieved a price increase of 18.6% for our sales to local suppliers of steam coal, followed by another increase of 14.3% in November 2006. In July 2006, we achieved an 11% increase in our prices for the local ferrochrome market. Although the mine's fixed price export contract came to a conclusion in the second half of 2006, strong prices in the international market have meant that export-based sales are still highly profitable, especially with the recent depreciation of the South African rand. The general tightness of supply both in the international and domestic markets has effectively put in place a price floor at much higher than historical levels. For the first time in recent memory, the prices for domestic steam coal Free on Mine are higher than the price which we receive from Richards Bay Coal Terminal, taking in to account the additional transportation costs. We fully intend to exploit these favourable market conditions by locking in prices where sensible and taking advantage of new sales opportunities as they arise. Human Resources: Black Wattle Colliery In order to strengthen our human resource management activities, Andrew Mandlazi was recently appointed Head of Human Resources at the Black Wattle Colliery. He has joined us at a critical time when we are implementing a number of important policies, key among these include: Worker Training: Black Wattle is sending a number of its employees to various training programs throughout the Mpumalanga and Gauteng Regions, including the Colliery Training College in Witbank, Witwatersrand University, and Potchefstroom University. Adult Basic Education Training (ABET): The workforce has been assessed for ABET training and a computer-based ABET training facility is being established at the mine to facilitate participation in this program. HIV/AIDS Peer Education: Six employees have been sent to be trained as HIV/AIDS Peer Educators to assist in putting into place Black Wattle's HIV/AIDS education program. Employment Equity: Quarterly Employment Equity meetings are taking place to ensure that the Black Wattle Colliery is complying with all aspects of national legislation related to Employment Equity. Social Development We are participating in the Integrated Development Program of the Steve Tshwete (Middelburg) Municipality through the provision of assistance to the Evergreen Primary School and the nearby community. Key activities completed in the recent year include painting of all classrooms, completion of the school administration buildings, and final construction of the school kitchen. Procurement Black Wattle has implemented a BEE-focussed procurement policy which strongly encourages our suppliers to have and maintain strong BEE credentials. We constantly monitor our monthly BEE spend and encourage potential BEE suppliers to compete for equipment and service contracts at the Black Wattle Colliery. We also are actively engaged in sale of our products to BEE enterprises, as shown by our 5 year sales agreement with a BEE company for the purchase of our discard for supply to Eskom. Health and Safety Supervisors have received training in hazard identification and risk assessment in their work areas. All levels of employees will have received this training by the end of 2007. A medical surveillance system is in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards. Prospects At Black Wattle Colliery higher prices are being achieved across the range of all of our markets-- from our premium low phosphorous nuts to our discard sales to the power industry. The opportunity to commence opencast mining in the next few months is now a real possibility, and the increased performance of the washing plant has improved both yield and coal quality. The prospects for acquiring additional reserves have never looked so good. I am confident that 2007 will be a successful year for our South African operations. ANDREW HELLER Managing Director 27 March 2007 Bisichi Mining Plc Consolidated income statement for the year ended 31 December 2006 Notes Year Year ended Ended 31 Dec 31 Dec 2006 2005 Â£'000 Â£`000 Group revenue 1 13,239 13,485 Operating costs (12,346) (12,037) __________ __________ Operating profit before adjustments 1 893 1,448 Gains on held for trading investments 81 177 Increase in value of investment 1,643 2,393 property Exceptional items 2 12 124 Share of profit in joint ventures 175 522 __________ __________ Operating profit 1 2,804 4,664 Interest receivable 232 76 Interest payable (422) (534) __________ __________ Profit before tax 2,614 4,206 Taxation 3 (489) (687) __________ __________ Profit for the period 2,125 3,519 __________ __________ Profit attributable to equity 2,125 3,256 shareholders Profit attributable to minority - 263 interest __________ __________ 2,125 3,519 __________ __________ Earnings per share 5 20.33p 31.15p __________ __________ Diluted earnings per share 5 19.68p 30.19p __________ __________ Bisichi Mining Plc Consolidated balance sheet As at 31 December 2006 2006 2005 Â£'000 Â£'000 Assets Non-current assets Value of investment properties 17,270 15,625 attributable to group Fair value of head lease 146 153 Property 17,416 15,778 Reserves, plant and equipment 5,415 5,604 Investments in Joint Ventures 2,637 2,519 Other Investments 391 424 Deferred tax assets 234 241 Total non-current assets 26,093 24,566 Current assets Inventories 56 124 Trade and other receivables 2,056 4,578 Held for trading investments 700 629 Interest derivative 53 36 Cash and cash equivalents 3,275 488 6,140 5,855 Total assets 32,233 30,421 Liabilities Current liabilities Borrowings (3,302) (2,382) Trade and other payables (5,887) (4,432) Current tax liabilities (33) (91) (9,222) (6,905) Non-current liabilities Borrowings (3,402) (4,368) Finance lease liabilities (146) (153) Deferred tax liabilities (2,974) (2,582) (6,522) (7,103) (15,744) (14,008) Net assets 16,489 16,413 Equity Share capital 1,045 1,045 Translation reserve (1,241) 56 Other reserves 189 114 Retained earnings 16,496 14,606 16,489 15,821 - 592 Total equity 16,489 16,413 Bisichi Mining Plc Consolidated CASH FLOW STATEMENT For the year ended 31 December 2006 Year Year ended ended 31 December 31 December 2006 2005 Â£'000 Â£'000 Cash flows from operating activities Operating profit 2,804 4,664 Depreciation 933 807 Share based payment expense 75 23 Unrealised gain on investment held for (81) (177) trading Unrealised gain on investment properties (1,643) (2,393) Share of profit of joint ventures (175) (522) Hedging - 82 ___ ___ Cash flow before working capital 1,913 2,484 Change in inventories 57 (89) Change in trade and other receivables 1,780 (753) Change in trade and other payables (382) 750 Change in provisions 38 (136) Acquisitions of held for trading - (24) investments Proceeds from held for trading investments 10 99 ___ ___ Cash generated from operations 3,416 2,331 Interest received 232 76 Interest paid (422) (534) Income tax paid 28 (331) ___ ___ Cash flow from operating activities 3,254 1,542 ___ ___ Acquisition of reserves, plant and (1,893) (1,348) equipment Proceeds from sale of investment 19 482 properties, reserves, plant and equipment Acquisitions of investments (10) (41) ___ ___ Cash flow from investing activities (1,884) (907) ___ ___ Cash flow from financing activities Borrowings drawn 1,380 23 Borrowings repaid (498) (1,927) Equity dividends paid (235) (209) ___ ___ Cash flow from financing activities 647 (2,113) ___ ___ Net increase (decrease) in cash and cash 2,017 (1,478) equivalents ___ ___ Cash and cash equivalents at 1 January (969) 507 Exchange adjustment (70) 2 ___ ___ Cash and cash equivalents at 31 December 978 (969) ___ ___ Bisichi Mining Plc Consolidated STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the year ended 31 December 2006 Share Translation Other Retained Total Minority Total equity reserve earnings interest capital reserves Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Balance as at 1 January 1,045 141 91 11,559 12,836 334 13,170 2005 Revaluation of - - - 2,393 2,393 - 2,393 investment properties Movement on fair value - - - (58) (58) - (58) of derivatives Other income statement - - - 921 921 263 1,184 movements Profit for the year - - - 3,256 3,256 263 3,519 Exchange adjustment - (85) - - (85) (5) (90) _____________ _____________ ____________ ____________ ____________ ____________ ____________ Total recognised income - (85) - 3,256 3,171 258 3,429 and expense for the period Dividend - - - (209) (209) - (209) Equity share options - - 23 - 23 - 23 _____________ _____________ ____________ ____________ ____________ ____________ ____________ Balance at 31 December 1,045 56 114 14,606 15,821 592 16,413 2005 Revaluation of - - - 1,643 1,643 - 1,643 investment properties Movement on fair value - - - 17 17 - 17 of derivatives Other income statement - - - 465 465 - 465 movements Profit for the year - - - 2,125 2,125 - 2,125 Exchange adjustment - (1,297) - - (1,297) - (1,297) _____________ _____________ ____________ ____________ ____________ ____________ ____________ Total recognised income - (1,297) - 2,125 828 - 828 and expense for the period Dividend - - - (235) (235) - (235) Removal of minority - - - - - (592) (592) interest Equity share options - - 75 - 75 - 75 _____________ _____________ ____________ ____________ ____________ ____________ ____________ Balance at 31 December 1,045 (1,241) 189 16,496 16,489 - 16,489 2005 _____________ _____________ ____________ ____________ ____________ ____________ ____________ Bisichi Mining Plc ACOUNTING POLICIES aND NOTES TO ACCOUNTS Basis of accounting The results for the year ended 31 December 2006 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The principal accounting policies applied are the same as those set out in the Financial Statements for the year ended 31 December 2005. 1 SEGMENTAL ANALYSIS 31 December 31 December 2006 2005 Â£'000 Â£'000 Revenue Mining 12,138 12,278 Property 1,064 1,086 Other 37 121 _______ _______ 13,239 13,485 _______ _______ Operating profit before adjustments Mining 534 1,008 Property 350 436 Other 9 4 _______ _______ 893 1,448 _______ _______ Operating profit Mining 516 1,066 Property 2,198 3,417 Other 90 181 _______ _______ 2,804 4,664 _______ _______ 2 EXCEPTIONAL ITEMS 31 December 31 December 2006 2005 Â£'000 Â£'000 Gain on sale of investment 12 412 properties Costs in relation to suspended - (288) fund raising _______ _______ 12 124 _______ _______ 3 TAXATION 31 December 31 December 2006 2005 Â£'000 Â£'000 Based on the results for the year: Corporation tax at 30% (2005: 30%) (46) 154 Adjustment in respect of prior 143 (1) years - UK _______ _______ 97 153 Deferred tax 392 534 _______ _______ 489 687 _______ _______ * DIVIDEND A final dividend in respect of 2006 of 2.5p (2005: 2.25p) per share amounting to a total of Â£261,000 (2005: Â£235,000) is proposed by the board. The dividend proposed is not accounted for until it has been approved at the Annual General Meeting. The amount will be accounted for as an appropriation of revenue reserves in the year ending 31 December 2007. * EARNING PER SHARES Both the basic and diluted earnings per share calculations are based on a profit of Â£2,125,000 (2005: Â£3,256,000). The basic earnings per share have been calculated on 10,451,506 (2005: 10,451,506) ordinary shares being in issue during the period. The diluted earnings per share have been calculated on the number of shares in issue of 10,451,506 (2005: 10,451,506) plus the dilutive potential ordinary shares arising from share options of 347,466 (2005: 334,746) totalling 10,798,972 (2005: 10,786,252). * FINANCIAL INFORMATION The above financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information has been extracted from the group's annual report and accounts for the year ended 31 December 2006 on which the auditors have not yet expressed an opinion, but for which an unqualified report is expected. Statutory accounts for the year ended 31 December 2005 which were prepared under IFRS, have been delivered to the Registrar of Companies; the report of the auditors on those accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. * Board approval These preliminary results were approved by the Board of Bisichi Mining PLC on 27 March 2007.

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