Half-yearly Report
28 February 2012
Conroy Gold and Natural Resources plc
("Conroy" or "the Company")
Half-year results for the six months ended 30 November 2011
Economics of Clontibret Gold Project transformed by updated Resource and Evaluation data
Conroy Gold and Natural Resources plc (AIM: CGNR; ESM: CGNR.I), the gold exploration and development company primarily focused on Ireland, announces its results for the six months ended 30 November 2011.
Highlights:
* Clontibret Gold Project Scoping Updated by Tetra Tech WEI Inc ("Tetra
Tech")
* Resource increased to over 600,000 ounces gold (Au)
* Indicated category increased to over 250,000 ounces (Au)
* Mine life increased to 11.2 years
* Gold in-situ averaging over 50,000 ounces per annum for first five years of
mine life
* NPV(8) increased to US$72.3 Million: IRR increased to 49.4 per cent
* Company raised £750,000 through subscription
* Shore Capital Stockbrokers Limited appointed as sole broker with immediate
effect
Commenting, Chairman, Professor Richard Conroy said:
"The results of the updated resource and evaluation by Tetra Tech transformed
the mine economics with in excess of a 100 per cent increase in contained gold,
a substantial increase in gold production, a reduction in operating costs, an
increase in mine life to over 11 years, and a two year payback period."
For further information please contact:
Conroy Gold and Natural Resources plc Tel:+353-1-661-8958
Professor Richard Conroy, Chairman
Merchant Securities Limited (Nomad) Tel:+44-20-7628-2200
Simon Clements/Virginia Bull,
Shore Capital Stockbrokers Limited (Broker) Tel: +44-20-7408-4050
Jerry Keen/Bidhi Bhoma/Toby Gibbs
IBI Corporate Finance Limited (ESM Adviser) Tel: +353-1-637-7800
Brian Farrell
Lothbury Financial Services Tel:+44-20-7868-2010
Michael Padley/Michael Spriggs
Hall Communications Tel: +353-1-660-9377
Don Hall
Visit the website at: www.conroygoldandnaturalresources.com
CHAIRMAN'S STATEMENT
I am pleased to report on the technical and financial activities of your
Company for the six months ended 30 November 2011, a period of further very
positive progress.
During the period, Tetra Tech WEI Inc ("Tetra Tech") completed an updated
evaluation of Conroy's Clontibret Gold Project using updated commodity prices,
operating and capital costs and an updated resource model.
The update has transformed the mine economics of the project with an increase
of in excess of a 100 per cent in contained gold, a substantial increase in
gold production, a reduction in operating costs, an increase in mine life to
over 11 years, and a two year payback period. The new resource and evaluation
was developed by Tetra Tech to Joint Ore Reserves Committee ("JORC") standard
and is an update on the scoping study previously undertaken by Tetra Tech. The
evaluation was based on a long-term gold price of US$1,372 per oz Au and on a
new resource estimate based on infill drilling, assay results and updated
geological interpretation. The new resource estimate, using a minimum mining
width of 2 metres and a cut-off grade of 0.60g/t Au, shows a 25 per cent
increase in tonnage to 11,709,700 tonnes and a 19 per cent increase in total
ounces of gold to over 600,000 oz at 1.60 g/t Au (indicated 259,956 oz Au,
inferred 341,148 oz Au) (see table below). The mineral resource was evaluated
for mining potential using Whittle pit optimisation software.
Summary of Resource Estimate
Indicated Inferred Total
Tonnes Au (g/ Ozt Tonnes Au (g/ Ozt Tonnes Au (g/ Ozt
t) t) t)
4,926,900 1.64 259,956 6,782,800 1.56 341,148 11,709,700 1.60 601,104
Note: Contained metal estimates remain subject to factors such as mining
dilution and process recovery losses
The Whittle evaluation showed a 120 per cent increase in contained gold within
a conventional open pit configuration, a 9 per cent reduction in operating
costs due to economy of scale, a reduction in stripping ratio from 11.8 to 9.4,
a doubling of production rate from 400,000 to 800,000 tonnes per annum, a
decrease in gold grade from 2.19 g/t Au to 1.53g/t Au, an assumed overall
recovery rate of approximately 85 per cent using a bio-oxidation process;
in-situ gold averaging over 50,000 oz per annum in the first five years of mine
life and an increase in mine life to 11.2 years. The increase in size and
throughput will increase capital costs to US$77.8M (from US$ 47.9M) but with a
reduction in payback period to two years.
The economic evaluation was based on a pre-tax financial model, taking a base
case commodity price for gold of US$1,372 per ounce, this gave a 49.4 per cent
internal rate of return (IRR) and a net present value (NPV), at an 8 per cent
discount rate, of US$72.3M. These are very encouraging results as your Company
moves towards the development of a gold mine at Clontibret.
Elsewhere exploration continued on the Company's other licences in the
Longford-Down Massif. Seven additional prospecting licences in lithologies
similar to those in which the Company has made its discoveries in Counties
Monaghan and Armagh were acquired in Counties Clare, Tipperary and Kilkenny.
Finance
The loss after taxation for the half-year ended 30 November 2011 was €203,752
(2010: €213,504) and the net assets as at 30 November 2011 were €12,381,024
(2010: €11,787,771). Cash at bank as at 30 November 2011 was €412,951 (2010: €
2,178,075).
During the period £750,000 was raised by issue of 20,689,685 ordinary shares of
€0.03 at 3.625 pence per share ("Subscription Shares") together with 20,689,685
warrants exercisable at 4.25 pence per share ("Warrants"). The Subscription
Shares were placed at 3.625 pence per share, a premium of 22% to the closing
price on the day prior the their issue. I personally subscribed for
Subscription Shares with an aggregate value of £250,000.
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.
Outlook
The delivery of the updated Scoping Study on your Company's gold project at
Clontibret further enhances the economics of the project. Much remains to be
done but it is your Board's intention to bring in a mine at Clontibret as soon
as possible.
Directors and Staff
I would like to thank my fellow directors, staff and consultants for their
support and dedication, which has enabled the continued success of the Company.
I look forward to the future with confidence.
Yours faithfully,
Professor Richard Conroy
Chairman
28 February 2012
INCOME STATEMENT
FOR HALF-YEAR ENDED 30 NOVEMBER 2011
Six months Six months Year ended
ended ended
30 November 30 November 31 May
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
€ € €
OPERATING EXPENSES (199,802) (208,972) (364,356)
Finance income - bank interest 542 5,070 5,764
receivable
Finance costs - interest on (4,492) (9,602) (69,378)
shareholder loan
LOSS BEFORE TAXATION (203,752) (213,504) (427,970)
Taxation - - -
LOSS FOR THE YEAR (203,752) (213,504) (427,970)
Loss per ordinary share - basic and (€0.0009) (€0.0011) (€0.0020)
diluted
STATEMENT OF COMPREHENSIVE INCOME
FOR HALF-YEAR ENDED 30 NOVEMBER 2011
Six months Six months Year ended
ended ended
30 November 30 November 31 May
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
€ € €
LOSS FOR PERIOD (203,752) (213,504) (427,970)
Total income and expense recognised in
other comprehensive income
- - -
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
- ENTIRELY ATTRIBUTABLE TO EQUITYHOLDERS
(203,752) (213,504) (427,970)
Statement OF CHANGES IN EQUITY
For the HALF-Year Ended 30 NOVEMBER 2011
Capital
Conversion Share-based Retained
Share Share Reserve Payment Earnings Total
Capital Premium Fund Reserve (Deficit) Equity
€ € € € €
At 1 June 2010 5,713,935 6,273,383 30,617 582,656 (3,256,475) 9,344,116
Share issue 1,200,000 - - - - 1,200,000
Share premium - 1,382,645 - - - 1,382,645
Share-based payments - - - 74,514 - 74,514
Loss for the period - - - - (213,504) (213,504)
At 30 November 2010 6,913,935 7,656,028 30,617 657,170 (3,469,979) 11,787,771
At 1 December 2010 6,913,935 7,656,028 30,617 657,170 (3,469,979) 11,787,771
Share-based payments - - - 74,512 - 74,512 -
Loss for period - - - - (214,466) (214,466)
At 31 May 2011 6,913,935 7,656,028 30,617 731,682 (3,684,445) 11,647,817
At 1 June 2011 6,913,935 7,656,028 30,617 731,682 (3,684,445) 11,647,817
Share issue 620,690 - - - - 620,690
Share premium - 241,756 - - - 241,756
Share-based payments - - - 74,513 - 74,513
Loss for the period - - - - (203,752) (203,752)
At 30 November 2011 7,534,625 7,897,784 30,617 806,195 (3,888,197) 12,381,024
STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2011
30 November 30 November 31 May
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
ASSETS € € €
Non-current Assets
Intangible assets 12,845,738 10,612,546 11,759,028
Investment in Subsidiary 2 2 2
Property, plant and equipment 17,306 19,735 23,849
12,863,046 10,632,283 11,782,879
Current Assets
Trade and other receivables 68,464 60,613 81,323
Cash and cash equivalents 412,951 2,178,075 749,459
481,415 2,238,688 830,782
Total Assets 13,344,461 12,870,971 12,613,661
EQUITY AND LIABILITIES
Capital and Reserves
Called up share capital 7,534,625 6,913,935 6,913,935
Share premium 7,897,784 7,656,028 7,656,028
Capital conversion reserve fund 30,617 30,617 30,617
Share based payments reserve 806,195 657,170 731,682
Retained losses (3,888,197) (3,469,979) (3,684,445)
Total Equity 12,381,024 11,787,771 11,647,817
Non-current Liabilities
Financial Liabilities 588,097 554,612 565,625
Total Non-current Liabilities 588,097 554,612 565,625
Current Liabilities
Trade and other payables 375,340 528,588 400,219
Total Current Liabilities 375,340 528,588 400,219
Total Liabilities 963,437 1,083,200 965,844
Total Equity and Liabilities 13,344,461 12,870,971 12,613,661
CASh Flow Statement
For the HALF-Year Ended 30 NOVEMBER 2011
Six months ended Six months Year ended
ended
30 November 30 November 31 May
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
€ € €
Cash flows from operating activities
Cash used in operations (194,641) (566,270) (567,558)
Tax paid - - -
Net cash used in operating (194,641) (566,270) (567,558)
activities
Cash flows from investing activities
Investment in exploration and (1,026,444) (749,812) (1,836,028)
evaluation
Payments to acquire property, plant (883) (11,754) (24,158)
and equipment
Net cash used in investing (1,027,327) (761,566) (1,860,186)
activities
Cash flows from financing activities
Issue of share capital 862,446 1,895,105 1,895,105
Advances of shareholder loan 22,472 - -
Repayment of shareholder loan (42,424) (42,424)
-
Bank interest received 542 5,070 5,764
Interest paid on shareholder loan - - (329,402)
Net cash generated from financing 885,460 1,857,751 1,529,043
activities
(Decrease)/Increase in cash and cash (336,508) 529,915 (898,701)
equivalents
Cash and cash equivalents at 749,459 1,648,160 1,648,160
beginning of period
Cash and cash equivalents at end of 412,951 2,178,075 749,459
period
Notes to the Financial Statements
1. Basis of preparation
The half-yearly financial statements have been prepared on the basis of the
recognition and measurement requirements of International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU), and their
interpretations adopted by the International Accounting Standards Board (IASB).
The accounting policies used in the preparation of the half-yearly financial
information are the same as those used in the Company's audited financial
statements for the year ended 31 May 2011.
2. Earnings per share
The calculation of the loss per ordinary share of €0.0009 (2010 - €0.0011) is
based on the loss for the financial year of €203,752 (2010 - €213,504) and the
weighted average number of ordinary shares in issue during the year of
237,361,005 (2010 - 193,797,820).
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 30 November, 2011.
4. Copies of Accounts
A copy of the Half-Yearly Report 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.
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