Final Results
28 November 2011
Conroy Gold and Natural Resources plc
("Conroy" or "the Company")
Final Results For The Year Ended 31 May 2011
A Year of Significant Progress
Conroy (AIM: CGNR; ESM: CGNRI), the Irish based resource company exploring and
developing gold and other projects in Ireland, is pleased to announce its
results for the year ended 31 May 2011. A year during which the Company has
moved from being solely focussed on exploration towards initial preparations
relating to development and production.
* Scoping Study results on Clontibret Gold project positive on both financial
and technical grounds
* Preliminary environmental studies completed
* Positive results from infill drilling programme
* Positive results from step out drilling at Clay Lake gold target
* £1,800,000 sterling (over €2,000,000) raised during period.
Chairman, Professor Richard Conroy commented:
"The positive outcome of the Scoping Studies at Clontibret provide a sound
technical and financial basis for the next phase of the project, the positive
results of the infill drilling showing increased widths of mineralisation and
high grade intersections and, the positive results of step out drilling at Clay
Lake confirm the potential of the licence areas. We have established that a
gold mine is viable, on a section of the 30 mile trend we have delineated,
which we intend to bring into production in the near term."
Further Information:
Professor Richard Conroy, Chairman, Conroy Gold and Natural Tel:
Resources plc +353-1-661-8958
Simon Clements/Virginia Bull, Merchant Securities Limited Tel:
(Nomad) +44-20-7628-2200
Brian Farrell, IBI Corporate Finance Limited (ESM Adviser) Tel:
+353-1-637-7800
John Grant/ Karen Kelly/ David Lawman, XCAP Securities PLC Tel: +44-20-7101
(Broker) 7070
Michael Padley/Michael Spriggs, Lothbury Financial Services Tel:
Limited +44-20-7868-2010
Don Hall, Hall Communications Tel:
+353-1-660-9377
www.conroygoldandnaturalresources.com
CHAIRMAN'S STATEMENT
I have pleasure in presenting your Company's Final Results for the year ended
31 May 2011. The year has been one of substantial progress for your Company as
it moves from being solely focussed on exploration to being also involved in
development and making initial preparations relating to production.
A sound basis for this has been provided by the positive results on both
financial and technical grounds from the independent Scoping Study completed by
Tetra Tech Wardrop Engineering Inc. ("Wardrop") on your Company's Clontibret
gold prospect in Co. Monaghan where we plan to develop a conventional open pit
gold mine.
Clontibret Gold Project
The positive outcome of the scoping studies indicates that the Clontibret gold
project is viable and forms the foundation for the next stage of the project in
the knowledge that the ore system remains open and that further expansion of
the resource is likely.
The Joint Ore Reserves Committee ("JORC") Standard Scoping Study by Wardrop was
focussed on the Tullybuck-Lisglassan area which comprises approximately 20 per
cent of your Company's Clontibret gold target. Wardrop recommended that
following on the positive outcome of the scoping study, infill and step-out
drilling along strike together with metallurgical studies be carried out.
The scope of the study included Geology, including Regional Geology, Resource
Review, Deposit Types and Mineralisation; Mine Plan and Plant Design,
Infrastructure/ Utilities and Ancillary Facilities, Mine Water and Waste
Management, Capital and Operating Costs Estimates and Financial Analysis.
An ongoing definitive infill drilling programme commenced in the spring. This
programme is designed to further define gold zones within the proposed mine
area, potentially increasing the resource and also to provide geotechnical
information for mine design purposes together with the ore material required
for metallurgical test work. Positive results to date from the infill drilling
include increased widths of mineralisation (up to 19.35 metres) and high grade
intersections (including 2 metres of 11.24 g/t Au).
During the year, preliminary environmental studies were completed by
environmental consultants Golder Associates. Detailed environmental monitoring
and site assessments have been initiated, ecological studies are underway,
surface water monitoring locations established and a weather station installed.
Pre and final feasibility studies will follow leading in turn to the submission
of planning and mining applications as a prerequisite to mine development.
Clay Lake Gold Target
Positive drilling results were received from the step out drilling programme in
the Clay Lake gold target in Co. Armagh, 4.5 miles (7 km) to the northeast of
Clontibret.
The Clay Lake target covers an area of approximately 141 hectares and has
returned the highest gold-in-soil values recorded by your Company on its Irish
exploration licences. The step out drilling programme builds on previous
positive gold results which demonstrated the presence of a broad zone of gold
mineralisation.
The target is named after the Clay Lake nugget containing 28g of gold which was
found in a stream bed in the 1980s.
Gold Trend
Both Clontibret and Clay Lake are located along the 50 km (30 mile) gold trend
outlined on your Company's licences which stretch from Co. Armagh in Northern
Ireland across counties Monaghan and Cavan in the Republic of Ireland in a
geological structure called the Longford-Down Massif.
The gold area is adjacent to a historic lead-mining district and your Company,
during the course of its exploration, has also discovered a very large (100km2)
zinc-in-soil anomaly, suggesting a zonation in mineralisation in the area and
further expanding the metallurgical potential of the area.
Total Gold Potential
In-house studies by your Company, though conceptual in nature, suggest that the
total gold potential of the Company's exploration licences in the Longford-Down
Massif could now lie in the 15 million - 20 million ounce range. This
projection is based on (i) the 1 million ounce JORC-compliant resource outlined
in only 20 per cent of the Clontibret project, (ii) the potential of the
remaining 80 per cent of that target, (iii) the discovery at Clay Lake and (iv)
other large gold-in-soil anomalies that have been outlined elsewhere on its
licences. Whilst there has been insufficient exploration to date to define such
a mineral resource, and there is no certainty that further exploration will
result in a resource of this magnitude being realised, your directors believe
that the potential of the area is clear and the possibilities exciting.
Gold in Ireland
As we move towards development a brief note on gold in Ireland is appropriate.
Gold has been known to exist in Ireland for over 2,000 years as demonstrated by
the magnificent gold ornaments in the National Museum in Dublin. However, apart
from a small gold rush in County Wicklow in the 19th century, Ireland, though
well known as an international base-metals province, has not previously been
regarded as a gold province. We are hopeful that our recent success will lead
to this perception changing. Your Company's management, who were involved in
the zinc discovery at Galmoy, which revived Ireland as a major base-metals
province, have long believed that there was also significant potential for gold
in Ireland and, with that objective in mind, initiated the exploration
programme by your Company which has successfully identified this new gold
district stretching across three counties and where, at Clontibret, in Co.
Monaghan, your Company proposes to develop a gold mine.
Mining in Ireland
Ireland is currently a major base metal producer. There is a long established
mining tradition, a favourable business climate and excellent infrastructure.
The Conroy executive team involved in the discovery and development of the
Galmoy zinc ore bodies which led to the revival of the Irish base metal
industry now look forward to the development of a gold mine at Clontibret.
World Gold Production
Global gold mine production reached a peak of 2,600 tonnes in 2001 but has
since declined with countries such as South Africa producing far less gold than
previously. Demand for gold is greater than supply with the deficit made up by
recycling and Central Bank sales. The trend of Central Bank selling has now
reversed. China is said to be doubling its gold reserves and other countries
are also increasing their purchases of gold. This excess of demand over supply
is a very important development which augurs well for your Company's future as
it moves towards becoming a gold producer.
Share Price
Your Board believes that your Company's value as measured by the share price is
yet to reflect the increasing value of its underlying assets as it moves
towards development and production.
Finance
The loss after taxation for the year ended 31 May 2011 was €427,970 (2010: €
290,445) and the net assets as at 31 May 2011 were €11,647,817 (2010: €
9,344,116). Cash at bank as at 31 May 2011 was €749,456 (2010: €1,648,160).
During the year £1,800,000 sterling (prior to expenses) was raised by the issue
of 30,000,000 shares for cash at a price of 6 pence per share and I converted €
687,540 (the equivalent of £600,000 sterling) of my loans to the Company into
shares at the same price.
As in previous years, I have supported the working capital requirements of the
Company. The balance of the loans due to me at the period end was €554,612. The
loans have been made on normal commercial terms. The other Directors consider,
having consulted with the Company's Nominated Adviser and the Company's ESM
Adviser, that the terms of the loans are fair and reasonable in so far as the
Company's shareholders are concerned.
Subsequent to the year end a further £750,000 sterling was raised by issue of
20,689,685 ordinary shares of €0.03 at 3.625p sterling together with 20,689,685
warrants exercisable at 4.25 pence per share. The Subscription Shares were
placed at 3.625 pence per share, a premium of 22% to the closing price on the
previous day. I personally subscribed for 6,896,552 of the Subscription Shares.
The Warrants can be exercised at any time from admission of the Subscription
Shares to the second anniversary of the admission of the Subscription Shares.
The Warrants also contain a mandatory exercise clause if the closing price of
the Ordinary Shares remains at 5.5 pence per share or higher for five or more
consecutive business days.
Auditors
I would like to take this opportunity of thanking the partners and staff of
Deloitte & Touche for their services to your Company during the course of the
year.
Directors, Consultants and Staff
I would also like 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
Your Company has made further excellent progress in the financial year to 31
May 2011. I look forward to the future with confidence as we move from the
exploration phase into the development phase.
Professor Richard Conroy
Chairman
28 November 2011
INCOME STATEMENT
FOR YEAR ENDED 31 MAY 2011
2011 2010
€ €
OPERATING EXPENSES (364,356) (151,793)
Finance income - bank interest 5,764 77
receivable
Finance costs - interest on (69,378) (138,729)
shareholder loan
LOSS BEFORE TAXATION (427,970) (290,445)
Taxation - -
LOSS FOR THE YEAR (427,970) (290,445)
Loss per ordinary share - basic and (€0.0020) (€0.0021)
diluted
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2011
2011 2010
ASSETS € €
Non-current Assets
Intangible assets 11,759,028 9,802,468
Investment in Subsidiary 2 2
Property, plant and equipment 23,849 14,424
11,782,879 9,816,894
Current Assets
Trade and other receivables 81,323 56,381
Cash and cash equivalents 749,459 1,648,160
830,782 1,704,541
Total Assets 12,613,661 11,521,435
EQUITY AND LIABILITIES
Capital and Reserves
Called up share capital 6,913,935 5,713,935
Share premium 7,656,028 6,273,383
Capital conversion reserve fund 30,617 30,617
Share based payments reserve 731,682 582,656
Retained losses (3,684,445) (3,256,475)
Total Equity 11,647,817 9,344,116
Non-current Liabilities
Financial Liabilities 646,673 1,636,661
Total Non-current Liabilities 646,673 1,636,661
Current Liabilities
Trade and other payables 319,171 540,658
Total Current Liabilities 319,171 540,658
Total Liabilities 965,844 2,177,319
Total Equity and Liabilities 12,613,661 11,521,435
CASh Flow Statement
For the Year Ended 31 May 2011
2011 2010
€ €
Cash flows from operating activities
Cash used in operations (567,558) (150,169)
Tax paid - -
Net cash used in operating activities (567,558) (150,169)
Cash flows from investing activities
Investment in exploration and evaluation (1,836,028) (945,021)
Payments to acquire property, plant and (24,158) (206)
equipment
Net cash used in investing activities (1,860,186) (945,227)
Cash flows from financing activities
Issue of share capital 1,895,105 3,000,632
Advances of shareholder loan - 190,000
Repayment of shareholder loan (42,424) (508,897)
Bank interest received 5,764 77
Interest paid on shareholder loan (329,402) -
Net cash generated from financing 1,529,043 2,681,812
activities
(Decrease)/Increase in cash and cash (898,701) 1,586,416
equivalents
Cash and cash equivalents at beginning of 1,648,160 61,744
year
Cash and cash equivalents at end of year 749,459 1,648,160
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 2011 has been extracted
from the Company's financial statements to that date which have received an
unqualified auditor's report but have not yet been delivered to the Registrar
of Companies.
2. Earnings per share
The calculation of the loss per ordinary share of €0.0020 (2010 - €0.0021) is
based on the loss for the financial year of €427,970 (2010 - €290,445) and the
weighted average number of ordinary shares in issue during the year of
213,797,820 (2010 - 136,981,154).
Since the Company incurred a loss the effect of share options and warrants
would be anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the period ended 31 May,
2011.
4. Copies of Accounts
A copy of the Annual Report and Financial Statements, Notice of Meeting and
Proxy Form will be available on the Company's website
www.conroygoldandnaturalresources.com and will be available from the Company's
registered office, 10 Upper Pembroke Street, Dublin 2. It will also be
forwarded to shareholders who requested a hard copy.
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