Final Results

RNS Number : 8302U

Amur Minerals Corporation

30 June 2009

 



30 June 2009

Amur Minerals Corporation

(AIM: AMC)

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008

Amur Minerals Corporation ('Amur' or the 'Company'), an exploration and development company focused on East Russia, announces its Final Results for the year ended 31 December 2008.

Highlights:

• Flagship nickel copper sulphide Kun-Manie project awarded GKZ protocol allowing application for mining licence 

• Kun-Manie exploration licence extended, additional targets to be drilled

• Move to becoming self supporting contractor

• Additional reports on Anadjakan and Kustak projects filed

• Over $7 million raised

Chairman Robert W. Schafer commented:

'During 2008, the Company continued to advance its flagship nickel copper sulphide project, Kun Manie, toward production. A two year extension on the exploration licence was granted and the can now pursue a mining licence, on drilled resources. This licence has upgraded the status of the Company to that of a late stage exploration company eying production in the future.

'The potential to discover new orebodies remains high and still includes three not yet drilled targets as well as the opportunity to expand resources within the three drilled areas. The limits of mineralisation have not yet been defined at Ikenskoe, Vodorazdalny and Maly Krumkon.'

Enquiries: 

Company Amur Minerals Corp.	Nomad and Broker RBC Capital Markets	Public Relations Lothbury Financial
Robin Young	Martin Eales	Michael Padley
CEO		Libby Moss
[phone]	[phone]	[phone]

  Chairman's Statement

It is with pleasure that I report the results of 2008 to our shareholders. During the course of the year, numerous objectives were accomplished in the areas of exploration, reporting and attaining a Certificate of Discovery. These three items are interdependent and meet the final objectives in allowing Amur to secure an extension on its Kun-Manie exploration licence and to move the currently drilled resources toward approval for a mining permit.

Given the difficult financial markets, Amur scaled back its originally planned exploration efforts and focused on meeting the data requirements and programme needs for obtaining an extension on the exploration licence. With the additional results in hand, we were able to compile summary reports for filing with the various Russian Federation governmental agencies responsible for oversight of mineral resource projects. The resultant documents provided the basis from which the Company was awarded an extension of two years to continue exploration within the boundaries of the original exploration licence until the end of 2010. The potential to discover new ore bodies remains high and includes three not yet drilled targets as well as the opportunity to expand resources within the three drilled areas. The limits of mineralisation have not yet been defined at Ikenskoe, Vodorazdalny and Maly Krumkon and the potential for resource expansion resulted in the award of the extension.

In addition, the Company submitted a Russian feasibility study for review of the economic potential of the drilled resources. The study indicated that the Kun Manie project in its current state has potential to become an economic mining operation. As a result, Amur was awarded with a protocol from the State Committee on Reserves (GKZ). This protocol enables Amur to move forward to submit applications for a mining licence within the appropriately drilled areas as defined by Russian standards.

Accomplishment of these tasks has positioned the Company to continue advancing from a pure exploration company to a preproduction company focused on the development of Kun-Manie. This project has the potential to be one of the premier open pit nickel sulphide projects in the world. We plan to continue with step out exploration and advance the project to production.

These milestones were achieved due to diligent professional work completed by our technical staff and the experience of our executive management within Russia. It is a credit to their efforts that we have been able to accomplish the required objectives in five short years. This is unusual; the majority of the companies working within Russia normally require significantly more time to reach the milestones attained by Amur.

In May of 2008, the Russian Federation also passed a new law regarding the ownership of mineral resource properties. This law had a two-fold impact on Amur. The first required the Company to register with the Anti Monopoly Board (FAS) as Amur is a foreign based company which is the majority owner of a resource project. The second impact of this law relates to the simple fact that the Kun Manie licence contains recoverable nickel and cobalt resources. As a result, the project will be placed into a newly defined class of resources called the 'strategic category'. This new classification requires FAS monitoring and may require that Amur has a Russian partner at Kun Manie. By August, we had filed the required information with FAS.  

As regards to a Russian partner, Amur has been examining various alternatives among Russian companies since February 2008. The key criteria for selecting a Russian partner company is that it is financially transparent and can provide a compatible working relationship. We have compiled a short list of potential Russian companies and will continue the search to identify an appropriate partner. Concurrently, we are also examining the potential for obtaining a waiver that would obviate the need for a partner. 

The Company ended 2008 with just over $440,000 in bank deposits.  Since the year end the Company has supplemented this with two placings raising a total of $459,000 in cash and a further share swap in June 2009 through which the Company received shares worth approximately $940,000 which will be held for resale.  Cash flow forecasts show that current cash balances are sufficient to meet all of the Company's needs for a 6 week period.  

In the absence of any additional finance being provided in the next six weeks, it is the Directors' intention to sell for cash all or part of the shares in Grafton Resources Limited that were acquired via stock swap on 1 June 2009 to meet immediate working capital requirements. Grafton Resources plans to list its shares on the Main Market of the Irish Stock Exchange in the next four weeks; however, these shares are not currently listed on any exchange and there can be no assurances that the Company will be able to sell these shares. 

As for the future, the Company will continue to pursue a series of multiple objectives. Most of these are already moving forward and include the following:

• Discussions with potential investors to secure financing are in progress. These discussions follow on the back of two successfully completed transactions in 2009. As a result, the Board have concluded that it is appropriate to present these accounts on a going concern basis.

• The Company has also been interviewing selected, highly qualified individuals to broaden the expertise and geographic network of the Board of Directors. We believe that the candidates will provide valuable support to the Company in the areas of corporate finance, strategic thinking and increased levels of contacts throughout the mineral resource industry. By adding such individuals, there will be an increased visibility of the Company and it will allow it to advance its existing projects toward production.

• The Company will also evaluate the potential of diversifying its asset base. This will be done on geographic, commodity and near term production bases. By diversification, there will be a reduction in exposure to specific commodity prices and country risk. This shall increase the growth potential of the Company.

In summary, 2008 was a key year for the Company. In the face of the financial crisis and the changing dynamic of the Russian regulatory environment, we were able to attain all required goals. This has provided us with an extension to continue exploration at Kun-Manie as well as giving the right to file for a mining application on a large portion of the resources. These advances now allow the Company to continue to move forward towards development and production at Kun-Manie once a mining licence is granted.

As a final word, I would like to thank several individuals for their efforts over 2008. Several key staff and non executive directors retired at the end of the year. All have been instrumental in the success of Amur and include Messrs Prikhodko, Guryanov, Eccles, Striker Smith and Haskell. We appreciate their efforts on behalf of Amur and wish them well in their next endeavors.

Mr. Robert Schafer

Non Executive Chairman

30 June 2009

Chief Executive Officer's Statement

During 2008, we completed our fifth consecutive field season at Kun-Manie. The cumulative results have resulted in our being awarded the right to participate in the mining of the drilled resource and the granting of a two year exploration extension was also granted. The combination of these two accomplishments represents a major milestone to the Company and further establishes Amur as a long term player in Russia.

Numerous milestones were achieved despite the volatile economic climate.  Accomplishments included the following:

• A total of seven million dollars was raised during 2008 when little capital funding was available. The Company has continued its unrelenting search for funds into 2009 to continue the advancement of the projects and has been successful in raising additional funds.

• Amur also registered on the Plus Market trading facility in London providing additional access to shareholders and resulting in improved liquidity of Amur shares.

• The Company moved from being contractor supported in the areas of logistics and site management to being self supporting. This was accomplished by the acquisition of earth moving equipment and numerous support vehicles. In the long term, this will reduce the operating costs related to exploration and future development.

• The final exploration obligations relating to the Kun-Manie licence were completed. This included further reconnaissance work, trenching, and verification drilling. Verification drilling confirmed the historical results as well as the presence of high grade intervals of nickel.

• The Company completed the compilation of a Russian equivalent feasibility study which was submitted to the appropriate Federation agencies. The results provided additional support that the property contained a sustainable mineral resource suitable for production.

• Amur obtained the right to participate in the development of the Kun-Manie project. This was accomplished with the award of a Certificate of Discovery from the Russian Federation's State Committee on Reserves (GKZ). This is the first step necessary in obtaining the mining licence for appropriately drilled mineralisation.

• The Company was awarded a two year extension to continue exploration on Kun-Manie through to the end of 2010. This was allowed as the Company has identified additional targets requiring further exploration work.

• Necessary reports related to its Anadjakan and Kustak licences were prepared for filing with the appropriate Russian agencies.

As well as successes, the year also provided challenges, mainly related to the financial crisis. As a result, we reduced our exploration programmes and undertook cost cutting measures.

Regulatory changes within the Russian Federation also modified the Company's plans to advance its exploration projects. In May 2008, all nickel projects were declared to fall within a newly defined strategic category. The new regulations required the Company to register with the Anti Monopoly Board (FAS). This was required as Amur controls licences containing strategic minerals and as such, the Company may have to have a Russian partner.

Amur's advisors were well informed in advance of the approval of the legislation and the Company had already begun to identify potential Russian partners which could be required in the future. A strategic partner may not be needed provided a waiver is granted to Amur. We continue to work with the appropriate Ministries and our contacts within the Russian government to attain this waiver whilst simultaneously continuing our search for a suitable Russian partner.

We maintain a positive outlook regarding the development of Kun-Manie. We continue to operate in cost cutting mode and have already identified various potential sources of funds for the upcoming year. With the successful award of the Certificate of Discovery, we can now advance toward the submission of additional applications necessary for obtaining a mining licence. This work had already been initiated at the end of 2008 and will continue through 2009.

To conclude, Amur has now successfully operated in the Russian Federation for five years. It has succeeded in expanding the Kun-Manie project and has successfully navigated the regulatory agencies of Russia. These positive results are related to the simple fact that the Company has discovered a substantial nickel copper sulphide project thereby underpinning the future of Amur.

Mr. Robin J Young

Chief Executive Officer

30 June 2009

  AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

AS OF 31 DECEMBER 2008

(Amounts in '000s US Dollars)

	Notes	31 December 2008	Restated 31 December 2007
NON-CURRENT ASSETS
Capitalised exploration costs		13,597	12,534
Property, plant and equipment		1,044	94
Total non-current assets		14,641	12,628
CURRENT ASSETS
Cash and cash equivalents		442	1,729
Inventories		270	-
Other receivables		569	68
Total current assets		1,281	1,797
Total assets		15,922	14,425
CURRENT LIABILITIES
Trade and other payables		420	349
Total current liabilities		420	349
SHAREHOLDERS' EQUITY
Share capital		19,719	12,719
Share premium		7,707	8,310
Share options		1,390	1,084
Retained deficit		(11,408)	(9,106)
Foreign exchange translation reserve		(1,906)	1,069
Total shareholders' equity		15,502	14,076
Total liabilities and shareholders' equity		15,922	14,425

  AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2008

(Amounts in '000s US Dollars)

			Restated
	Notes	Year ended 31 December 2008	Year ended 31 December 2007
Administrative expenses		(2,352)	(2,121)
Loss from operations		(2,352)	(2,121)
Finance income		50	136
Loss before tax		(2,302)	(1,985)
Taxation		-	-
Loss for the year attributable to equity shareholders of the parent		(2,302)	(1,985)
Loss per share: basic & diluted	3	USD (0.02)	USD (0.02)

  AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2008

(Amounts in '000s US Dollars)

	Year  ended 31 December 2008	Restated Year  ended 31 December 2007
Cash flow from operating activities:
Net Loss before Taxation	(2,302)	(1,985)
Adjustments to reconcile loss before tax to net cash used in operating activities:
Depreciation	13	9
Share based payment	26	412
Investment income	(50)	(136)
Increase in accounts receivable	(505)	(7)
Increase in inventories	(270)	-
Increase/(decrease) in accounts payable	68	334
Net cash used in operating activities	(3,020)	(1,373)
Cash flow from investing activities:
Exploration expenditure	(3,516)	(5,152)
Purchase of property, plant and equipment	(1,356)	(91)
Interest received	50	136
Net cash used in investing activities	(4,822)	(5,107)
Cash flow from financing activities:
Net proceeds from placing *	6,513	5,248
Net cash from financing activities	6,513	5,248
Net change in cash and cash equivalents	(1,329)	(1,232)
Cash and cash equivalents brought forward	1,729	2,999
Foreign Exchange Effects	42	(38)
Cash and cash equivalents carried forward	442	1,729
Material non-cash transactions
Proceeds from issue of shares retained by broker	383	293
Expenses paid by broker	(383)	(293)

  AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2008

(Amounts in '000s US Dollars)

	Share capital	Share premium account	Retained deficit	Options  Reserve	Restated Foreign Currency Translation Reserve	Total
Balance at 31 December 2006  - as previously reported	7,143	8,838	(7,121)	472	-	9,332
- restatement	-	-	-	-	432	432
As restated	7,143	8,838	(7,121)	472	432	9,764
Exchange differences arising on translation of foreign operations	-	-	-	-	637	637
Net income recognised directly in equity	-	-	-	-	637	637
Net loss for the year	-	-	(1,985)	-	-	(1,985)
Total recognised income and expense for the year	-	-	(1,985)	-	637	(1,348)
Shares issued	5,576	-	-	-	-	5,576
Costs associated with issue of share capital	-	(328)	-	-	-	(328)
Issue of share options	-	(200)	-	612	-	412
Balance at 31 December 2007	12,719	8,310	(9,106)	1,084	1,069	14,076
Exchange differences arising on translation of foreign operations	-	-	-	-	(2,975)	(2,975)
Net income recognised directly in equity	-	-	-	-	(2,975)	(2,975)
Net loss for the year	-	-	(2,302)	-	-	(2,302)
Total recognised income and expense for the year	-	-	(2,302)	-	(2,975)	(5,277)
Shares issued	7,000	-	-	165	-	7,165
Costs associated with issue of share capital	-	(487)	-	-	-	(487)
Issue of share options	-	(116)	-	141	-	25
Balance at 31 December 2008	19,719	7,707	(11,408)	1,390	(1,906)	15,502

  Notes to the preliminary statement of results for the year ended 31 December 2008

1.    Basis of Preparation

The financial statements have been presented in thousands of United States Dollars and in accordance with International Financial Reporting Standards and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the European Union ('IFRS'). However this announcement does not in itself contain sufficient information to comply with IFRS.

The financial information for the year ended 31 December 2008 has been extracted from the audited accounts of Amur Minerals Corporation which will be delivered to shareholders in due course. The financial information for the year ended 31 December 2007 has been extracted from the audited accounts of Amur Minerals Corporation.  The auditors reported on those accounts and their report was unqualified. The audit reports for the years ended 31 December 2007 and 31 December 2008 did contain an emphasis of matter in respect of going concern to which the auditors drew attention without qualifying their report.

2.     Going Concern

The Group has significant funding needs in order to continue exploration at its properties and provide ongoing working capital. The Group raised a further USD 0.5 million of cash and invested in shares in Grafton Resources valued at USD 0.9 million in a series of transactions in April and June 2009 through the issue of new shares.  Based on current cash flow forecasts, the group has sufficient cash to meet all planned work program and working capital commitments for the next six weeks.  

The Directors are currently in negotiations with a number of parties in respect of raising further funds to continue with the exploration work program. These negotiations relate to the raising of new capital and/or divestment of part of the Group's interest in its assets, in order to ensure that the Group will have adequate cash resources to continue in operation and to develop its assets. There are currently no binding agreements in place. 

In the absence of any additional finance being provided in the next six weeks, it is the Directors' intention to sell for cash all or part of the shares in Grafton Resources Limited that were acquired via stock swap on 1 June 2009 to meet immediate working capital requirements.  Grafton Resources plans to list its shares on the Main Market of the Irish Stock Exchange in the next four weeks; however, these shares are not currently listed on any exchange and there can be no assurances that the Company will be able to sell these shares.  

These conditions indicate the existence of a material uncertainty which may cast significant doubt over the group's ability to continue as a going concern. Based on the current progress of the negotiations with potential providers of finance and discussions with potential investors the Directors believe that the necessary funds to provide adequate financing for continued exploration work will be raised as required and accordingly they are confident that the Group will continue as a going concern and have prepared the financial statements on that basis. 

The financial statements do not include the adjustments that would result if the Group was not able to continue as a going concern.

3.     Loss Per Share

Basic and fully diluted loss per share are calculated and set out below. The effects of warrants and share options outstanding at the year ends are anti-dilutive and have therefore been excluded from the following calculations.

	Year ended 31 December 2008		Year ended 31 December 2007
Net loss for the year	(2,302)		(1,985)
Weighted average number of shares used in the calculation of basic loss per share	116,201,206		96,905,308
Weighted average number of shares used in the calculation of diluted loss per share	131,974,356		105,396,462
Basic and diluted loss per share	USD (0.02)		USD (0.02)

The Group had no dilutive potential ordinary shares in either year that would serve to increase the loss per ordinary share. There is therefore no difference between the basic and diluted loss per share for either year.  A total of 17,291,456 (2007: 9,291,456) potential ordinary shares have therefore been excluded from the above calculations.

4.    Events After the Balance Sheet Date

Placings of shares

On 30 April 2009, the Company raised £180,000 ($266,000) through the sale of 6 million new shares.  

On 1 June 2009, the Company raised and additional £120,900 ($193,000) via a placing of 3.1 million new shares. Simultaneously, the Company issued a further 6 million new shares for a gross consideration of £1 in accordance with the terms of an earlier placing. Amur will have no further obligation to issue shares in connection with this previous placing.

Also on 1 June 2009, the Company entered into a share exchange transaction with Grafton Resource Investments Ltd.  Amur has subscribed for shares in Grafton with a value of approximately £589,000 based on a net asset value of US$38.42 per Grafton share in consideration for the issue of 15,100,000 new Amur ordinary shares at a value per ordinary share of 3.9p (a 44% premium to the closing mid market price of 2.7p on 29 May 2009).

The resulting shares in issue after these transactions is 151,903,938.

5.    Annual General Meeting

The Company's Annual General Meeting will be held at the Courtyard Moscow City Center Hotel, Voznesensky Periulok 7, 125009 Moscow, Russian Federation on Friday 14 August 2009 at 11.00am.  

6.    Dividends

The directors do not recommend the payment of a dividend for the period.

7.    Annual Accounts

Copies of the Company's Annual Accounts will today be posted to shareholders who have so elected to receive them and are also available for download from the Company's website at www.amurminerals.com.

 

END

 

 

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