Interim Results
COPPER RESOURCES CORPORATION
("CRC" or the "Company")
INTERIM REPORT
For the six months ended 30 June 2007
Copper Resources Corporation (AIM: CRC), the minerals exploration and mining
company, today released its interim report for the six months ended 30 June,
2007.
Highlights from January-September, 2007:
* US$15 million (before expenses) was raised in February 2007 through a
private placement.
* US$7.5 million was raised through the conversion of warrants and options
after 30 June 2007.
* The Forrest Group agreed that US$7.5 million of its loan outstanding to
Minière de Musoshi et Kinsenda SARL ("MMK"), CRC's 75% owned subsidiary in
the Democratic Republic of Congo, would be assigned to CRC, in exchange for
the issue of 5,025,873 shares. The transaction has not yet taken place.
* Kinsenda bankable feasibility study was completed.
Status of Current Projects:
(1) Kinsenda Project (DRC)
The independent bankable feasibility study ("BFS"), which was completed in June
2007, shows compelling project economics with an IRR to CRC estimated at 52%,
and an NPV (10%) estimated at US$124 million based on a long-term copper price
of US$1.30 per pound. At a copper price of US$1.75 per pound the BFS shows an
IRR of 75% and an NPV of US$230 million.
MMK's dewatering programme at Kinsenda reached the 285 metre level, at which
the dewatering is completed and at which operations will commence. Currently,
operations are underway for cleaning up and securing the stopes for
exploitation at that level, as well the installation of the permanent pump
station to reach the 330 metre level, which will then allow the development of
the mine to begin. The engineering for the construction of the concentrator has
been completed and MMK is ready to place orders for major equipment as soon as
funds are available.
MMK is currently exporting 15 tonnes of Cobalt content in white alloy per month
originating from its Kimono deposit which is being treated at its electric arc
furnace at Musoshi. It expects to increase production by about 20 percent in
the coming months.
MMK currently employs 1,115 people in the DRC.
(2) Hinoba-an Project (Philippines)
CRC has commissioned a new scoping study by IMC Mining Solutions Pty Ltd
("IMC") of Brisbane (Australia) to determine the scope of infill drilling
programmes needed and to help formulate the content of the BFS, in order to
optimise project parameters such as mining and milling throughput rates to
maximise project return. The scoping study is expected to be completed within
two months, and the BFS will require an additional 18 months, including the new
infill drilling.
(3) Haib Project (Namibia):
CRC has elected to cancel its option on the Haib project due to insufficient
progress on the metallurgical testing program, and the investment has been
written off in full.
We look forward to progressing the Kinsenda and Hinoba-an projects throughout
the year.
Metorex Limited:
On 18 September 2007, Metorex Limited announced that it had completed the
acquisition of the Forrest Group's interests in CRC and MMK and that it
intended to make an offer for the remaining shares in CRC on the basis of 73
new Metorex shares for every 100 CRC shares with a cash alternative of 125p per
share.
For further information please contact:
Copper Resources Nabarro Wells & Fox-Davies Capital GTH
Corporation Co. Limited Limited
Communications
Mitchell Alland Hugh Oram Richard Hail Toby Hall
Executive Vice
Chairman
+44 (0) +44 (0) +44 (0) 207 936 +44 (0)
5200
78 7569 5563 20 7710 7400 20 7153 8035
The accompanying unaudited consolidated Financial Information for the six
months ended 30 June 2007 and 30 June 2006 is expressed in United States
Dollars, and has an effective date of 29 September 2007.
COPPER RESOURCES CORPORATION
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2007
(Unaudited)
Notes 30 June 31 December
2007 2006 2006 2005
$'000 $'000 $'000 $'000
Revenue 3,974 3,493 11,740 -
Cost of Sales (1,494) (2,218) (11,932) -
Gross Profit/(Loss) 2,480 1,275 (192) -
Interest receivable and similar 437 105 158 298
income
Administration expenses (7,400) (4,175) 661 (1,449)
Unrealised foreign exchange gain/ 923 218 (4,195) 78
(loss)
Share option expenses - - (243) (1,559)
Impairment of mining assets 7 (650) - - -
Warrant expenses - (3,877) - -
Share issue costs (115) - - -
Other write offs - - - (435)
Loss on ordinary activities before (4,325) (6,454) (3,811) (3067)
taxation
Income tax expense (83) - - -
Minority interest 398 311 722 1
Loss for the financial period (4,010) (6,143) (3,089) (3,066)
Basic and diluted loss per ordinary (5.9c) (12.0c) (5.4c) (13.6c)
share 1
All amounts relate to continuing operations.
COPPER RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEET
As at 30 June 2007
(Unaudited)
Notes As at 30 As at 30 As at 31
June 2007 June 2006 December 200
(unaudited) (unaudited) 6 (audited)
$'000 $'000 $'000
Assets
Non-current Assets
Property, plant and equipment 3 6,640 6,525 6,941
Development, exploration and 2 44,067 31,178 37,820
evaluation
Investment in other company - 200 200
Total non-current assets 50,707 37,903 44,961
Current Assets
Inventories 7,801 4,165 7,483
Trade and other receivables 6,135 3,119 4,487
Cash and cash equivalents 5,386 12,497 1,334
Total current assets 19,322 19,781 13,304
Total assets 70,029 57,684 58,265
Equity and liabilities
Shareholder's equity
Share capital 4 57,469 43,024 42,969
Contributed surplus 2,817 2,817 2,817
Other reserves 1,750 6,406 736
Retained earnings (11,072) (10,116) (7,062)
Total equity 50,964 42,131 39,460
Minority interests 3,184 3,993 3,582
Net funds available to shareholders 54,148 46,124 43,042
Non-current liabilities
Deferred tax liabilities - 18 -
Deferred purchase consideration - 500 475
Total non-current liabilities - 518 475
Current Liabilities
Trade and other payables 8,342 3,383 7,059
Deferred purchase consideration - 150 150
Borrowings 5 7,539 7,509 7,539
Total current liabilities 15,881 11,042 14,748
Total liabilities 15,881 11,560 15,223
Total equity and liabilities 70,029 57,684 58,265
COPPER RESOURCES CORPORATION
CHANGES IN EQUITY STATEMENT
For the six months ended 30 June 2007
(Unaudited)
Share Contributed Other r Retained Total
Capital surplus eserves earnings
$'000 $'000 $'000 $'000 $'000
At 31 December 2005 30,365 2,817 1,576 (3,973) 30,785
Additional contribution of 12,604 - - - 12,604
capital
Loss arising in the period - - - (3,089) (3,089)
Share based transactions - - 243 - 243
Foreign exchange loss - - (1,083) - (1,083)
At 31 December 2006 42,969 2,817 736 (7,062) 39,460
Loss for the period - - - (4,010) (4,010)
Additional contribution of 14,500 - - - 14,500
capital
Foreign exchange gain - - 1,014 - 1,014
At 30 June 2007 57,469 2,817 1,750 (11,072) 50,964
COPPER RESOURCES CORPORATION
CONSOLIDATED CASH FLOW STATEMENTS
For the six months ended 30 June 2007
(Unaudited)
30 June 31 December
2007 2006 2006 2005
$'000 $'000 $'000 $'000
Operating Loss (4,765) (6,559) (3,969) (3,364)
Adjusted for:
Taxation payable (83) - - -
Share based transactions 3,877 243 1,559
Depreciation on property plant and 1,160 347 722 13
equipment
Impairment of mining assets 650 - - -
Foreign exchange loss - (218) - -
Operating cash flows before movement in (3,038) (2,553) (3,004) (1,792)
working capital
Change in receivables/inventories (1,965) 439 (4,248) 1,814
Change in payables 1,285 (1,468) 1,949 (5,218)
Net movement (680) (1,029) (2,299) (3,404)
Net cash used in operating activities (3,718) (3,582) (5,303) (5,196)
Cash flows from investing activities
Interest received 437 105 158 298
Acquisition of subsidiaries - - - (12,914)
Cash acquired in acquisition of - - - 2,454
subsidiaries
Investment in exploration costs (7,163) (3,746) (11,342) (4,363)
Investment in associates 200 - - (200)
Purchase of property, plant and (1,218) (1,346) (2,137) (217)
equipment
Net cash generated used in investment (7,744) (4,987) (13,321) (14,942)
activities
Cash flows from financing activities
Share capital issued (net of costs) 14,500 7,249 12,604 30,355
Contributions by shareholder - 75 - -
Drawdown of loans - 2,177 (3,128) -
Net cash from financing activities 14,500 9,501 9,476 30,355
Effect of exchange rate changes on cash 1,014 - (1,083) -
Net increase in cash and cash 4,052 932 (10,231) 10,217
equivalents
Cash and cash equivalents at beginning 1,334 11,565 11,565 1,348
of period
Cash and cash equivalents at end of 5,386 12,497 1,334 11,565
period
1. Nature of operations
Copper Resources Corporation ("CRC" or the "Company") is the holding company of
a mineral exploration and development group of companies (the "Group"). The
Group is involved in the exploration, evaluation and development of copper
deposits in the Philippines, Namibia and Democratic Republic of the Congo
("DRC").
The accompanying interim consolidated financial information is prepared by
management in accordance with International Financial Reporting Standards
("IFRS"). Selected information and disclosures required in notes to annual
consolidated financial statements has been condensed or omitted. This interim
consolidated financial information should be read in conjunction with the
Company's audited annual consolidated financial statements and notes for the
year ended 31 December 2006. The interim financial information has been
prepared following the same accounting policies and methods of computation as
the annual consolidated financial statements for the year ended 31 December
2006.
Basic and Diluted Loss per Share
The calculation of basic and diluted loss per ordinary share for the six months
ended 30 June 2007 is based on the loss on ordinary activities after taxation
of $4.010 million (2006: $6.143 million) and on 67,482,036 ordinary shares
being the weighted average of ordinary shares in issue and ranking for dividend
during the period.
Details of warrants and share options in issue which could potentially dilute
earnings per share in the future are shown in Note 5.
Impairment
The Company assesses whether impairment exists in any of its exploration
projects and writes down that project to its estimated recoverable value when
such impairment is found to exist.
Risks
The exploration and exploitation of natural resources are speculative
activities that involve a high degree of risk for the Company and its
shareholders. The risk factors which should be taken into account in assessing
the Company's activities should include, but are not limited to, those set out
below:
* Copper price volatility
* Currency fluctuations
* Normal risks of mining operations
* Political risks
* Government regulations
2. Exploration, evaluation and development
$'000
At 31 December 2005 26,478
Additions 11,342
At 31 December 2006 37,820
Additions 7,163
Impairment charges (291)
Adjustment to costs represented by (625)
deferred compensation no longer payable
At 30 June 2007 44,067
Intangible assets consist of capitalised exploration, evaluation and
development costs in relation to each of the Company's mining assets.
3. Property, plant and equipment
Freehold Heavy Plant and Total
properties Equipment Equipment
$'000 $'000 $'000 $'000
Cost
At 31 December 2006 568 6,793 700 8,061
Additions and reallocations 116 1,461 (360) 1,217
Impairment charge (358) - - (358)
At 30 June 2007 326 8,254 340 8,920
Depreciation
At 31 December 2006 59 936 125 1,120
Charge and reallocation for the (13) 1,248 (75) 1,160
period
At 30 June 2007 46 2,184 50 2,280
Net book value
At 31 December 2006 509 5,857 575 6,941
At 30 June 2007 280 6,070 290 6,640
4. Share Capital
Number Amount
US$'000
Authorised
Ordinary Shares of no par value 500,000,000 -
Number Amount
US$'000
Issued
At 31 December 2006 60,594,191 42,969
Ordinary Shares issued on exercise of 100,000 100
options
Ordinary Shares issued on private placement 10,000,000 14,400
At 30 June 2007 70,694,191 57,469
5. Share Options and Warrants
The total number of options outstanding at 30 June 2007:
Share Options Held Share options Held Date of Option Exercise
at 30 at 31 December 200 Grant Period
6 Price per
June 2007 Share
4,790,675 4,890,675 Various Various April
2008-December
2010
Warrants Warrants Date of Warrant Price Exercise
Grant per Share Period
Held at 30 Held at 31
December 2006
June 2007
7,019,929 6,869,929 Various Various 28 March
2008
6. Borrowings
Current
$'000
At 30 June 2006 7,509
Loan drawdown 30
At 30 June 2007 7,539
7. Subsequent events
During the period, the Company elected to cancel its option on the HAIB
Project, due to insufficient progress on the metallurgical testing program,
which has led to the write-offs in full of both the associated fixed assets and
the related exploration and development expenses.
As announced on 9 July, 2007, Options over 312,500 Shares lapsed subsequent to
the period end.
8. Related party transaction
There were no related party transactions during the period.
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