Medoro Resources Announces 2004 Year-end Results

Medoro Resources Announces 2004 Year-end Results

 

    TORONTO, May 2 /CNW/ - Medoro Resources Ltd. (TSX-V/AIM:MRL) announced

today its 2004 year-end results for the periods ending December 31, 2004.

Medoro was formed following the business combination between Full Riches

Investments Limited and a wholly-owned subsidiary of Gold Mines of Sardinia,

plc.

    For the year ended December 31, 2004, Medoro reported a loss of

$9.9 million or $0.14 per share as compared to a loss of $0.3 million or $0.07

per share in the previous period. The 2004 results largely reflects the loss

on disposal of the majority of the Gold Mines of Sardinia assets.

    On October 20, 2004, the company announced the completion of the sale of

most of its assets in Sardegna to Sargold Resource Corporation for a total of

(euro) 6 million plus $1 million in Sargold shares payable over a period of

60 months. With this sale, Medoro significantly improved its financial

position, ending the year with cash of $2.4 million, receivables of

$10.6 million and no debt. Subsequent to the end of the year, Medoro also

completed two private placements for gross proceeds of $4.9 million.

    With these transactions, Medoro has completed its transformation from an

under-funded, marginally profitable former gold producer to a well-funded

junior explorer. At Monte Ollasteddu, Gold Fields has completed a geophysical

survey to follow up on last year's drilling results and help better identify

targets for this year's program, which is expected to commence as soon as

necessary approvals are obtained. The company continues to seek a joint

venture partner for its Pestarena project and is actively pursuing other

opportunities elsewhere in Europe.

 

                         Financial Statements follow

 

    MEDORO RESOURCES LTD.

    (formerly Full Riches Investments Ltd.)

    Consolidated Balance Sheets

    (Expressed in Canadian dollars)

    -------------------------------------------------------------------------

 

                                                 December 31,     October 31,

                                                        2004            2003

                                               --------------  --------------

    ASSETS

 

    CURRENT

      Cash and cash equivalents                $   2,448,813   $   3,221,339

      Accounts receivable                             75,981           9,468

      Promissory note (Note 5 (b))                         -          50,000

      Prepaid and deposits                                 -           1,973

      Current portion of note receivable

       (Note 5 (a))                                  747,908               -

    -------------------------------------------------------------------------

                                                   3,272,702       3,282,780

    LOAN RECEIVABLE (Note 3)                               -         662,925

    NOTE AND SHARES RECEIVABLE (Note 5 (a))        5,882,880               -

    MINERAL PROPERTIES (Note 6)                    5,979,873               -

    -------------------------------------------------------------------------

                                               $  15,135,455   $   3,945,705

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

 

    LIABILITIES

 

    CURRENT

      Accounts payable and accrued

       liabilities                             $     401,534   $      97,762

    FUTURE INCOME TAXES (Note 8)                   2,130,031               -

    -------------------------------------------------------------------------

                                                   2,531,565          97,762

    -------------------------------------------------------------------------

 

    SHAREHOLDERS' EQUITY

 

    Share capital (Note 7)                        29,161,976       6,706,001

    Contributed surplus (Note 7)                     584,622               -

    Shares to be issued (Note 3 (e))                       -          15,000

    Special warrants (Note 3 (b))                          -       2,490,905

    Subscriptions received (Note 3 (b))                    -       1,255,000

    Deficit                                      (17,142,708)     (6,618,963)

    -------------------------------------------------------------------------

                                                  12,603,890       3,847,943

    -------------------------------------------------------------------------

                                               $  15,135,455   $   3,945,705

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

 

 

 

    MEDORO RESOURCES LTD. (formerly Full Riches Investments Ltd.)

    Consolidated Statements of Operations and Deficit

    (Expressed in Canadian dollars)

 

                                                    Fourteen

                                                months ended      Year ended

                                                 December 31,    December 31,

                                                        2004            2003

                                               --------------  --------------

    OPERATING EXPENSES

      Amortization                             $           -   $          97

      Bank charges and interest                        5,730           5,824

      Bridge financing fee                                 -          15,000

      Consulting fees                                922,425          65,419

      Director fees                                  119,409               -

      Insurance                                            -           8,000

      Investor relations, transfer agent and

       filing fees                                   168,921          10,774

      Legal and accounting                           537,145          68,139

      Office                                          22,330           9,249

      Rent                                             4,000          10,560

      Stock-based compensation                       160,269               -

      Telephone                                        2,080             508

      Travel and promotion                           527,348           4,935

    -------------------------------------------------------------------------

                                                   2,469,657         198,505

    -------------------------------------------------------------------------

    OTHER INCOME (EXPENSES)

      Accreted interest on note receivable           162,593               -

      Foreign exchange gain (loss)                   208,575          (2,850)

      Interest income                                 44,846           6,516

      Loss on disposal of capital assets                   -          (1,844)

      Other income                                     3,805               -

    -------------------------------------------------------------------------

                                                     419,819           1,822

    -------------------------------------------------------------------------

    NET LOSS FROM CONTINUING OPERATIONS           (2,049,838)       (196,683)

    NET LOSS FROM DISCONTINUED OPERATIONS

     (Note 5)                                     (8,228,907)       (150,000)

    -------------------------------------------------------------------------

    NET LOSS FOR THE PERIOD                      (10,278,745)       (346,683)

    -------------------------------------------------------------------------

    DEFICIT, BEGINNING OF PERIOD                  (6,618,963)     (6,272,280)

    CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING

     POLICY (Note 2(i))

                                                    (245,000)              -

    -------------------------------------------------------------------------

    ADJUSTED OPENING BALANCE                      (6,863,963)     (6,272,280)

    -------------------------------------------------------------------------

    DEFICIT, END OF PERIOD                     $ (17,142,708)  $  (6,618,963)

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    LOSS PER SHARE FROM CONTINUING OPERATIONS  $       (0.03)  $       (0.03)

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    LOSS PER SHARE FROM DISCONTINUED

     OPERATIONS                                $       (0.12)  $       (0.03)

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    BASIC AND DILUTED LOSS PER SHARE           $       (0.15)  $       (0.06)

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    BASIC AND DILUTED WEIGHTED-AVERAGE NUMBER

    OF COMMON SHARES OUTSTANDING                  68,590,779       5,935,925

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

 

      See accompanying Notes to the Consolidated Financial Statements.

 

 

 

    MEDORO RESOURCES LTD. (formerly Full Riches Investments Ltd.)

    Consolidated Statements of Cash Flows (Expressed in Canadian dollars)

 

                                                    Fourteen

                                                months ended      Year ended

                                                 December 31,    December 31,

                                                        2004            2003

                                               --------------  --------------

 

    OPERATING ACTIVITIES

      Net loss from continuing operations      $  (2,049,838)  $    (196,683)

      Items not affecting cash:

        Loss on disposal of capital assets                 -           1,844

        Amortization                                       -              97

        Stock compensation expense                   160,269               -

        Foreign exchange (gain) loss on note

         receivable                                 (208,575)          2,850

        Accreted interest on note receivable        (162,593)              -

        Bridge financing fee                               -          15,000

    -------------------------------------------------------------------------

                                                  (2,260,737)       (176,892)

      Changes in non-cash working capital items

        Accounts receivable                          (66,513)         (8,107)

        Prepaid and deposits                           1,973           2,465

        Accounts payable and accrued liabilities     303,772          80,414

    -------------------------------------------------------------------------

                                                  (2,021,505)       (102,120)

    -------------------------------------------------------------------------

    INVESTING ACTIVITIES

      Acquisition of mineral properties

       (Note 4)                                   (1,006,042)              -

      Proceeds on disposition of subsidiary,

       net (Note 5 (a))                              763,130               -

      Repayment of promissory note                    50,000               -

      Advances to Gold Mines of Sardinia plc               -        (662,925)

    -------------------------------------------------------------------------

                                                    (192,912)       (662,925)

    -------------------------------------------------------------------------

    FINANCING ACTIVITIES

      Issuance of common shares for cash           7,528,485               -

      Proceeds from bridge financing                       -         660,900

      Repayment of bridge financing                        -        (660,900)

      Issuance of special warrants                         -       2,490,905

      Issuance of subscriptions receipts                   -       1,255,000

    -------------------------------------------------------------------------

                                                   7,528,485       3,745,905

    -------------------------------------------------------------------------

    NET INCREASE IN CASH FROM CONTINUING

     OPERATIONS                                    5,314,068       2,980,860

    NET DECREASE IN CASH FROM DISCONTINUED

     OPERATIONS (Note 5 (a))                      (6,086,594)              -

    CASH, BEGINNING OF PERIOD                      3,221,339         240,479

    -------------------------------------------------------------------------

    CASH, END OF PERIOD                        $   2,448,813   $   3,221,339

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

 

      See accompanying Notes to the Consolidated Financial Statements.

 

 

 

    MEDORO RESOURCES LTD. (formerly Full Riches Investments Ltd.)

    Consolidated Statements of Cash Flows (Expressed in Canadian dollars)

 

 

    SUPPLEMENTAL CASH FLOW INFORMATION

 

                                                    Fourteen

                                                months ended      Year ended

                                                 December 31,    December 31,

                                                        2004            2003

                                               --------------  --------------

 

    Interest paid                              $           -   $       5,070

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

 

    The following transactions are not reflected in the consolidated

    statement of cash flows:

 

    During the fourteen month period ended December 31, 2004:

 

    (i)    44,171,118 common shares, 5,793,918 share purchase warrants and

           1,182,888 share purchase options with a value of $8,895,626 were

           issued in connection with the acquisition of Sardinia Gold Mining

           SpA (Note 3).

 

    (ii)   4,000,000 common shares with a value of $2,200,000 were issued in

           connection with the acquisition of Miniere di Pestarena srl

           (Note 4).

 

    (iii)  1,000,000 common shares with a value of $180,000 were issued in

           consideration for services provided in connection with the sale of

           GMS Australia (Note 5 (a)).

 

    (iv)   140,624 common shares with a value of $70,312 as payment for

           certain liabilities.

 

    (v)    75,000 common shares with a value of $15,000 as consideration for

           a bridge facility (Note 3 (c)).

 

    (vi)   The Company received a long-term note, payable in cash and shares,

           with a discounted value of $6,630,788 as consideration on the sale

           of GMS Australia (Note 5 (a)).

 

      See accompanying Notes to the Consolidated Financial Statements.

 

    For further information: Peter Volk, Assistant Secretary,

[phone], info(at)medororesources.com

    (MRL)