Final Results

KEFI Minerals Plc ("KEFI" or the "Company") Annual Results for the 12 months ended 31 December 2009 Chairman's Report During 2009, KEFI Minerals successfully progressed exploration of its prospects in Turkey and launched a major new initiative in the Kingdom of Saudi Arabia. The global financial crisis severely restricted the availability of funding for exploration companies during 2009. Your Board took prompt action to reduce the Company's financial risk at the same time as enabling the team to work towards achieving our exploration goals. As well as further reducing expenditure on an already low cost base, KEFI Minerals entered into two new joint ventures during 2009 that provided funding to progress exploration appropriately. These joint ventures reflect the recognition of KEFI Minerals within the industry for its technical abilities and the quality of its projects. Exploration Strategy Since admission to AIM in December 2006, KEFI Minerals has quickly developed the following core competencies: * Strong technical skills that enable cost-effective and rapid exploration for major mineral deposits; and * Flexibility to become an early entrant in countries that are becoming attractive for mining investment and are suitably prospective. These competencies were developed by the Company's activities in Turkey and are now being applied in Saudi Arabia. KEFI Minerals' exploration strategy remains the same and is based on the following concepts: * Combining strong international and local knowledge in exploration models and techniques; * Selecting areas within prospective stratigraphic and structural settings with a high potential for gold mineralisation in particular; * Exploring projects as a package rather than individual isolated prospects; * Rapidly identifying, prioritising and assessing targets; and * Creating effective working relationships and further developing knowledge using an established local team. The object of this strategy is to add value for shareholders by: * Advancing our projects to resource stage through drilling; * Targeting resources of >1 million ounces of gold in particular, or equivalent through exploration; and * Identifying and fostering high-quality joint venture opportunities, with both international and local partners, in order to source capital and manage financing costs. Strategic Alliances KEFI Minerals leverages its technical expertise and available funding by entering into strategic alliances. EMED Mining plc, of which I am Managing Director, provides commercial, technical and administrative support and personnel on a cost-recovery basis. This alliance enables KEFI Minerals' staff to minimise overheads and focus on exploration. The Artvin Joint Venture was formed in October 2008 with a wholly-owned subsidiary of Centerra Gold Inc. ("Centerra Gold"), a Canadian-based gold mining and exploration company. This alliance was expanded in 2009 by forming the Bakir Tepe Joint Venture with Centerra Gold. KEFI Minerals is the manager of both of these joint ventures while Centerra Gold earns into the joint ventures by funding exploration. In 2009, KEFI Minerals expanded its activities significantly by forming the Gold and Minerals ("G&M") Joint Venture to explore the mineral potential of the Kingdom of Saudi Arabia. Our strong local partner is Abdul Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR"), a leading Saudi construction and investment group. The primary target of this new alliance with ARTAR is the discovery and development of a >1 million ounce gold deposits in the under explored Precambrian Arabian Shield of Saudi Arabia. KEFI Minerals is the operating partner with a 40% interest with ARTAR holding the remaining 60% and providing local support services.These partnerships have allowed the Company to expand its exploration activities in both countries whilst reducing its financial exposure. This approach also allows the Company to retain the flexibility to be able to rapidly assess other opportunities in the region. Funding KEFI Minerals completed two private placements in 2009 and raised £1,035,000. In January 2010, an additional two private placements were completed raising a further £665,000. Exploration expenditure at our Artvin and Bakir Tepe Projects is being funded entirely by Centerra, while ARTAR is funding 60% of expenditure for the G&M Joint Venture in Saudi Arabia. EMED Mining remains a supportive shareholder and retains a 25% interest in KEFI Minerals. EMED Mining is owned primarily by a range of mining industry investment specialists, primarily from Australia, South Africa, United States and the United Kingdom. Summary KEFI Minerals' aim is to add value to our projects and create wealth for our stakeholders through the cost-effective acquisition or discovery and subsequent development of mineral resources. Turkey and Saudi Arabia are both under-explored countries with excellent potential for discovery of major gold and copper mines. The disciplined, focused exploration approach of our small team provides technical excellence that is leveraged via its carefully structured strategic alliances. Continuing strength in gold and copper prices, combined with the prospects identified by the Company, provides an exciting opportunity to create exceptional value for shareholders - subject to the Company continuing its tight focus and risk management. Harry Anagnostaras-Adams Chairman Enquiries: KEFI Minerals Jeffrey Rayner www.kefi-minerals.com +90 533 928 19 13 Fox-Davies Capital Oliver Stansfield +44 207 936 5220 WH Ireland Limited Katy Mitchell +44 161 832 2174 Bishopsgate Nick Rome +44 20 7562 3350 Communications Michael Kinirons CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2009 2009 2008 GBP'000 GBP'000 Revenue - - Exploration costs (203) (677) _______ _______ Gross loss (203) (677) Administrative expenses (677) (563) Share-based benefits (94) (89) Share of loss from jointly controlled (329) - entities Other income 389 - _______ _______ Operating loss (914) (1,329) Foreign exchange (loss)/gain (46) 185 Finance income - 12 Finance costs (4) (5) _______ _______ Loss before tax (964) (1,137) Tax - - _______ _______ LOSS FOR THE YEAR (964) (1,137) Other comprehensive income: Exchange differences on translating foreign 41 (206) operations _______ _______ TOTAL COMPREHENSIVE LOSS FOR THE YEAR (923) (1,343) _______ _______ Loss per share (GBP) 0.01 0.01 The company has taken advantage of the exemption conferred by section 408 of Companies Act 2006 from presenting its own statement of comprehensive income. Loss after taxation amounting to £2.3million(2008: £0.72 million) has been included in the financial statements of the parent company. STATEMENTS OF FINANCIAL POSITION 31 December 2009 The The The The Group Company Group Company 2009 2009 2008 2008 GBP'000 GBP'000 GBP'000 GBP'000 ASSETS Non-current assets Property Plant and Equipment 42 - 36 - Goodwill - - - - Fixed asset investments 2 2 - 2 Trade and other receivables - - - 1,651 _______ _______ ______ _______ 44 2 36 1,653 _______ _______ ______ _______ Current assets Trade and other receivables 64 205 109 - Cash and cash equivalents 322 319 293 288 _______ _______ ______ _______ 386 524 402 288 _______ _______ ______ _______ Total assets 430 526 438 1,941 _______ _______ ______ _______ EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 2,382 2,382 1,296 1,296 Share premium 1,413 1,413 1,347 1,347 Share based payments reserve 382 382 256 256 Exchange difference reserve (251) - (292) - Profit and Loss Account (3,773) (3,743) (2,824) (1,457) _______ _______ ______ _______ Total equity 153 434 (217) 1,442 _______ _______ ______ _______ Non-current liabilities Share of loss in jointly 150 - - - controlled entity - - 266 266 Advances Received _______ _______ ______ _______ 150 - 266 266 _______ _______ ______ _______ Current liabilities Trade and other payables 127 92 389 233 _______ _______ ______ _______ 127 92 389 233 _______ _______ ______ _______ Total liabilities 277 92 655 499 _______ _______ ______ _______ Total equity and liabilities 430 526 438 1,941 _______ _______ ______ _______ CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2009 Share Share Share Profit and Exchange Total capital premium Loss options Account Difference reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 January 2008 1,088 991 167 (1,687) (86) 473 Changes in Equity for - - - (1,137) (206) (1,343) 2008 Total comprehensive loss for the year Recognition of share - - 89 - - 89 based payments Issue of share capital 208 416 - - - 624 Share issue costs - (60) - - - (60) ____ ____ ____ ____ ____ ____ At 31 December 2008 1,296 1,347 256 (2,824) (292) (217) Changes in Equity for 2009 Total comprehensive loss - - - (964) 41 (923) for the year Recognition of share - - 141 - - 141 based payments Exercise of warrants - - (15) 15 - - Issue of share capital 1,086 121 - - - 1,207 Share issue costs - (55) - - - (55) ____ ____ ____ ____ ____ ____ At 31 December 2009 2,382 1,413 382 (3,773) (251) 153 ____ ____ ____ ____ ____ ____ COMPANY STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2009 Share Share Share Accumulated Total capital premium options losses reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 January 2008 1,088 991 167 (738) 1,508 Changes in Equity for 2008 - - - (719) (719) Total comprehensive loss for the year Recognition of share based - - 89 - 89 payments Issue of share capital 208 416 - - 624 Share issue costs - (60) - - (60) ____ ____ ____ ____ ____ At 31 December 2008 1,296 1,347 256 (1,457) 1,442 Changes in Equity for 2009 - - - (2,301) (2,301) Total comprehensive loss for the year Recognition of share based - - 141 - 141 payments Exercise of warrants - - (15) 15 - Issue of share capital 1,086 121 - - 1,207 Share issue costs - (55) - - (55) ____ ____ ____ ____ ____ At 31 December 2009 2,382 1,413 382 (3,743) 434 ____ ____ ____ ____ ____ CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December 2009 2009 2008 GBP'000 GBP'000 CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax (964) (1,137) Adjustments for: Depreciation of property, plant and equipment 17 23 Share-based benefits 94 89 Issue of warrants 47 - Interest income - (12) Exchange difference on translation of subsidiaries 39 (218) ____ ____ (767) (1,255) Changes in working capital: Trade and other receivables 45 (66) Trade and other payables (262) 270 ____ ____ (217) 204 ____ ____ Net cash used in operating activities (984) (1,051) ____ ____ CASH FLOWS FROM INVESTING ACTIVITIES Payments for purchase of property, plant and equipment (21) - Acquisition of jointly controlled entity (2) - Advances from Centerra Gold (KB) Inc. (266) 266 Share of results from jointly controlled entity 150 - Interest income - 12 ____ ____ Net cash (used in)/from investing activities (139) 278 ____ ____ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital 1,207 624 Listing and issue costs (55) (60) ____ ____ Net cash from financing activities 1,152 564 ____ ____ Net increase/(decrease) in cash and cash equivalents 29 (209) Cash and cash equivalents: At beginning of the period 293 502 ____ ____ At end of the period 322 293 ____ ____ COMPANY CASH FLOW STATEMENT Year ended 31 December 2009 2009 2008 GBP'000 GBP'000 CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax (2,301) (712) Adjustments for: Impairment of intercompany balances 1,646 - Share-based benefits 94 89 Issue of warrants 47 Interest income - (12) ____ ____ (514) (635) Changes in working capital: Trade and other receivables (200) (515) Trade and other payables (141) 124 ____ ____ (341) (391) ____ ____ Net cash used in operating activities (855) (1,026) ____ ____ CASH FLOWS FROM INVESTING ACTIVITIES Advances from Centerra Gold (KB) Inc. (266) 266 Interest income - 12 ____ ____ Net cash (used in)/ from investing activities (266) 278 ____ ____ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital 1,207 624 Listing and issue costs (55) (60) ____ ____ Net cash from financing activities 1,152 564 ____ ____ Net increase/(decrease) in cash and cash 31 (184) equivalents Cash and cash equivalents: At beginning of the period 288 472 ____ ____ At end of the period 319 288 ____ ____ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2009 1. Incorporation and principal activities Country of incorporation KEFI Minerals Plc (the "Company") was incorporated in United Kingdom as a public limited company on 24 October 2006. Its registered office is at 27/28 Eastcastle Street, London W1W 8DH. Principal activities The principal activities of the Group for the period are: * to explore for mineral deposits of precious and base metals and other minerals that appear capable of commercial exploitation, including topographical, geological, geochemical and geophysical studies and exploratory drilling. * to evaluate mineral deposits determining the technical feasibility and commercial viability of development, including the determination of the volume and grade of the deposit, examination of extraction methods, infrastructure requirements and market and finance studies; and * to develop, operate mineral deposits and market the metals produced. 2. Accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout the period presented in these financial statements unless otherwise stated. Basis of preparation and consolidation The company and the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. They comprise the accounts of KEFI Minerals Plc and all its subsidiaries made up to 31st December 2009. The company and the consolidated financial statements have been prepared under the historical cost convention. The Group has adopted IAS 1 (revised) `Presentation of financial statements' as of 1 January 2009. The revised standard prohibits the presentation of items of income and expenditure within the statement of changes in equity. Going concern The Directors have formed a judgment at the time of approving the financial statements that there is a reasonable expectation that the company and group have adequate resources to continue in operational existence for the foreseeable future. The financial statements have been prepared on the going concern basis, the validity of which depends principally on the discovery of economically viable mineral deposits and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Company's exploration activities. The financial statements do not include any adjustments that would arise from a failure to complete either option. Functional and presentational currency Items included in the Group's financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in British Pounds (GBP), which is the Group's functional and presentational currency. Foreign currency translation (1) Foreign currency translation Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. (2) Foreign operations On consolidation, the assets and liabilities of the consolidated entity's foreign operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are recognized in the foreign currency translation reserve, through other comprehensive income and recognized in profit or loss on disposal of the foreign operation. Revenue recognition The Group had no sales/revenue during the period under review. Interest income Interest income is recognized on a time-proportion basis using the effective interest method. Property plant and equipment Property plant and equipment are stated at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition less depreciation. Depreciation is calculated on the straight-line method to write off the cost of each asset to their residual values over their estimated useful life. The annual depreciation rates used are as follows: Furniture, fixtures and office 10% equipment Motor Vehicles 20% Acquisitions and goodwill The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognized at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognized and measured at fair value less costs to sell. Purchased goodwill is capitalized and classified as an asset in the statement of financial position. Goodwill arising on acquisition is recognized as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognized. Goodwill is reviewed for impairment on an annual basis. When the directors consider the initial value of the acquisition to be negligible, the goodwill is written off to the statement of comprehensive income immediately. Trading results of acquired subsidiary undertakings are included from the date of acquisition. Goodwill is deemed to be impaired when the present value of the future cash flows expected to be derived is lower than the carrying value. Any impairment is charged to the statement of comprehensive income immediately. Interest in joint ventures Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The results and assets and liabilities of joint ventures are included in these financial statements for the period from 1st January 2009 (or subsequent dates of incorporation) to 31 December 2009, using the equity method of accounting. Finance costs Finance costs and other borrowing costs are charged to the statement of comprehensive income as incurred. Tax The tax payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the statement of financial position liability method. Deferred tax liabilities are generally recognized for all taxable differences and deferred tax assets are recognized to the extent that taxable profits will be available against which deductible temporary differences can be utilized. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority. Investments Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognized as an expense in the period in which the impairment is identified. Exploration costs The Group has adopted the provisions of IFRS 6 "Exploration for and Evaluation of Mineral Resources". The Group's stage of operations as at the period end and as at the date of approval of these financial statements has not yet met the criteria for capitalization of exploration costs. Share-based compensation benefits Equity-settled share-based payments are recognized at fair value at the date of grant and the recognition of liabilities for cash-settled share-based payments at the current fair value at each statement of financial position date. The total amount expensed is recognized over the vesting period, which is the period over which performance conditions are to be satisfied. The fair value is measured using the Black Scholes pricing model. The inputs used in the model are based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. Critical accounting estimates and judgements The preparation of the financial report requires the making of estimations and assumptions that affect the recognized amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Significant judgement is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Financial instruments Financial assets and financial liabilities are recognized in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash at bank and in hand, with a maturity date of less than three months. Borrowings Borrowings are recorded initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost. Any differences between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of comprehensive income over the period of the borrowings using the effective interest method. 3. Annual General Meeting and Dispatch of Accounts to Shareholders The Company's Annual General Meeting will be held at the offices of Field Fisher Waterhouse LLP at 35 Vine Street, London EC3N 2AA on 25 May 2010 at 12.00 p.m. A copy of the report and accounts will be dispatched to shareholders on or around 30 April 2010 and will be available from that date on the Company's website www.kefi-minerals.com. 4. Financial Information The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2009, but is derived from those accounts. Statutory accounts for 2009 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on those accounts and their report was not qualified, but drew attention by way of emphasis of matter to going concern uncertainties disclosed in Note 2.

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