Final Results for the Year Ended 31 December 2016

RNS Number : 3367J
Connemara Mining Company plc
28 June 2017
 

28th June 2017

 

Connemara Mining Company plc ("Connemara")

 

Final Results for the Year Ended 31 December 2016


 

Connemara Mining Company today announces its results for the year ending 31 December 2016.

 

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

 

ENDS

 

Enquiries:

Connemara Mining Company Plc


John Teeling, Chairman

+353 (0) 1 833 2833

Jim Finn, Director


Gavin Berkenheger, Director

+44 (0) 784 145 5632

Northland Capital Partners Limited


Matthew Johnson / Gerry Beaney

+44 (0) 203 861 6625

John Howes


Dowgate Capital Stockbrokers Limited


Jason Robertson

+44 (0) 203 903 7725

Blytheweigh

+44 (0) 207 138 3204

Nick Elwes

+44 (0) 783 185 1855

Camilla Horsfall

+44 (0) 781 784 1793

Teneo PSG


Ciaran Flynn

+353 (0) 1 661 4055

Alan Tyrrell

+353 (0) 1 661 4055

 

www.connemaramining.com

 

 

Statement Accompanying the Final Results

 

Connemara is an Irish focused zinc and gold explorer with 35 licences spread across Ireland.  We have three joint ventures where we brought in partners with funds and technology.  Or so we hoped.  Two of the joint ventures are in zinc with Teck Resources, one of the world's greatest zinc companies.  Losses in areas other than zinc have ravaged the share price of Teck.  Exploration budgets were slashed to virtually nothing.  In recent years Teck have done little on our joint venture licences apart from keeping them in good standing.  I believe that the coming months will see developments in the joint ventures.

 

Hendrick Resources, a private Canadian gold prospector, joint ventured five gold licences in Wicklow/Wexford.  They did some excellent work identifying high potential targets.  Finance for small gold exploration companies in Canada has been virtually non-existent for the past five years.  The promoter has struggled to raise funds while also battling ill health.  Once again sufficient work has been done to keep our licences in good standing. 

 

Zinc has doubled in price in the past 18 months and I believe it has further to go.  Gold above $1,200 an ounce means that every 1 gram a ton is worth $40.  These prices make most producers profitable and should incentivise explorers and early stage investors into exploration shares.

 

There has been a dramatic revival of interest, particularly from Canada, in Irish zinc exploration with up to seven new companies entering the sector.  The announcement by Boliden, the owner of the Tara zinc mine at Navan in Meath, that they have identified an additional orebody on the property which will extend the commercial mine life by years has boosted interest.  It is thought that the use of 3D seismic techniques, prevalent in oil exploration but rare until now in Irish zinc/lead exploration, identified the structure at depth.

 

For many years the flagship Irish zinc exploration project has been at Pallas Green in Limerick, where Glencore the licence holder has identified 42 million tons of ore at a combined grade of 8% zinc/lead.  In recent years little or no exploration has been done on the property.  But it is now reported that eight drilling rigs are working on the site with a target of 22,000 metres of drilling.

 

The first Connemara/Teck joint venture is in Stonepark in Limerick, a few hundred metres from the Pallas Green discovery.  The excitement of the early years when three good zinc bearing zones were discovered has given way to care and maintenance.  This is not a good position for a junior explorer like Connemara which needs news and excitement.  Teck are operator and control over 76% of the joint venture.  We believe there is interest in acquiring Teck's share of the joint venture and we would be more than pleased to support any sale.  Such a sale would be positive for Connemara as we would like to see new eyes evaluate the potential on the Stonepark block.

 

The second joint venture with Teck is five licences in the Oldcastle area straddling the Meath/Cavan border.  This area has historical zinc/lead discoveries.  Our block is 30 km west of the Tara mine.  The target is a large ore body at depth.  Teck holds many licences in the midland area of Ireland and they appear to be following a regional model in which the geology of Oldcastle plays a part.  Teck are earning into the block so Connemara has no expenditure at present.  In 2016, Teck drilled one deep hole on the block with disappointing results.  We do not believe that one hole is enough, however such holes are expensive, costing up to €100,000 each.  Further drilling which is our preferred option will mean that Teck will earn into their 75% holding.  After which, like in Stonepark, Connemara will either fund its share or dilute.

 

We like zinc and believe that Ireland is the best zinc prospecting province in the world.  The geology is good, title is secure, skills are available and licencing terms are reasonable.  We have continued to monitor available ground and in the past year have added seven new licences.  Five new prospecting licences have been acquired in the Derrykearn area of Laois.  The properties lie along the Rathdowney Trend not far from the closed Galmoy and Lisheen zinc/lead mines.  Two historic mines, Tonduff and Derrykearn, are on the licences.  The best place to find a mine is where there is or was a mine.  Exploration technology is evolving rapidly so we believe that new eyes casting a critical look at the geology of Derrykearn may reveal new targets.

 

The two Ladyswell licences in Cork cover an area containing a former barite mine.  Barite is found in association with base metals.  Little historic exploration has been carried out on the ground.  Some early stage prospecting will take place this year.

 

 

Gold

We have two distinct gold exploration programmes - our 100% owned licence block in Donegal where we are active and our joint venture with Hendrick in Wicklow/Wexford which is effectively on care and maintenance.

 

The Inishowen block in Donegal now covers 187 km2 in eleven licences.  We drilled four holes in 2016 with positive results including 4.82 metres at 5.48 grams/tonne of gold.

 

We also explored the old Glentogher silver mine approximately 4 km away from our discoveries to see if we could connect the two.  We failed to find significant gold grades.  Analysis of the geophysics over the area suggest additional veins and has identified two magnetic anomalies about 1 km north of the earlier drilling.  We are examining a drilling proposal for later in 2017.

 

Gold in Wicklow/Wexford has been the subject of lore, fable and frustration since first discovered in Avoca in 1796.  Over the decades many companies have prospected and explored to try to find the hard rock source for the gold found in the rivers and streams in the area.

 

Connemara personnel have long experience in the area.  We believe that we hold five of the best licences.  This view was supported by the decision of Hendrick Resources to acquire the licences surrounding our block and to joint venture our block.  Extensive work by Hendrick revealed numerous drilling targets on Connemara ground.  Then the recession hit, money dried up and the principal, Dale Hendrick, a renowned gold explorer, had health issues.  The joint venture is in limbo.  Because of the skills, experience and technology in Hendrick we are reluctant to walk away.  We are in discussions with the principals in order to seek a resolution.

 

 

 

 

Future

A rising tide lifts all ships.  So it is with Connemara.  Better zinc prices, renewed exploration actively in Ireland and the arrival of new explorers is good for Connemara.  We would be pleased for Teck to drill both joint ventures Stonepark and Oldcastle.  But that does not look likely for Stonepark.  We would support any transfer of the Teck interest to a new explorer willing to invest in the property.  Though the pace of exploration in Oldcastle is excruciatingly slow we are not spending any money and won't for some time.  Given the prospectivity and potential of Oldcastle a new partner with more commitment and deeper pockets would be our preferred way forward.

 

We believe that our new ground in Derrykearn and Ladyswell has excellent potential.  We will prospect the ground and then seek to bring in a partner.  Our overhead and joint venture partner spending is low so we spend very little money to do the exploration work.  But our partners are not spending on the ground.  We would like this rectified.  We have funded the company on a shoestring and will continue to do so.

 

 

 

 

 

John Teeling

Chairman

27th June 2017

 

CONNEMARA MINING COMPANY PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

 

 

 

 


2016

2015





CONTINUING OPERATIONS






Administrative expenses

(195,584)

(202,965)


                   

                   

OPERATING LOSS

(195,584)

(202,965)




Investment revenue

-

4


                   

                   

LOSS BEFORE TAXATION

(195,584)

(202,961)




Income tax expense

-

-


                   

                  

LOSS FOR THE FINANCIAL YEAR AND



TOTAL COMPREHENSIVE INCOME

(195,584)

(202,961)


                   

                   




Loss per share - basic and diluted

(0.29c)

(0.36c)


                   

                   

 

 

 



 

CONNEMARA MINING COMPANY PLC

 

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2016

 

 

 

 


2016

2015





ASSETS:






FIXED ASSETS






Intangible assets

2,698,314

2,451,015


                   

                   




CURRENT ASSETS






Other receivables

13,632

28,299

Cash and cash equivalents

162,794

120,382


                   

                   


176,426

148,681


                   

                   

TOTAL ASSETS

2,874,740

2,599,696


                   

                  




LIABILITIES:






CURRENT LIABILITIES



Trade and other payables

(442,120)

(426,392)


                   

                   

NET CURRENT LIABILITIES

(265,694)

(277,711)


                   

                   

NET ASSETS

2,432,620

2,173,304


                   

                   




EQUITY:






Called-up share capital

757,897

557,797

Share premium

5,063,806

4,809,006

Retained deficit

(3,389,083)

(3,193,499)


                   

                   

TOTAL EQUITY

2,432,620

2,173,304


                   

                   

 

 

 



 

CONNEMARA MINING COMPANY PLC

 

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

 

 

Group and Company







Called up Share

Capital

Share

Premium

Share Based Payment

Reserve

Retained

Deficit

 

Total








At 1 January 2015

557,797

4,809,006

-

(2,990,538)

2,376,265

Loss for the year

-

-

-

(202,961)

(202,961)

At 31 December 2015

557,797

4,809,006

-

(3,193,499)

2,173,304

Shares issued

200,100

278,742

-

-

478,842

Share issue expenses

-

(23,942)

-

-

(23,942)

Loss for the year

 

 

 

(195,584)

(195,584)

At 31 December 2016

757,897

5,063,806

-

(3,389,083)

2,432,620

 

In respect of prior financial year:

 

Group and Company







Called up Share

Capital

Share

Premium

Share Based Payment

Reserve

Retained

Deficit

 

Total








At 1 January 2014

357,397

4,524,801

49,815

(2,732,061)

2,199,952

Shares issued

200,400

300,600

-

-

501,000

Share issue expenses

-

(16,395)

-

-

(16,395)

Options exercised

-

-

(49,815)

49,815

-

Loss for the year

-

-

-

(308,292)

(308,292)

At 31 December 2014

557,797

4,809,006

-

(2,990,538)

2,376,265

Loss for the year

-

-

-

(202,961)

(202,961)

At 31 December 2015

557,797

4,809,006

-

(3,193,499)

2,173,304

 

Share premium

 

The share premium reserve comprises of the excess of monies received in respect of share capital over the nominal value of shares issued.

 

Share based payment reserve

 

The share based payment reserve arises on the grant of share options to directors and consultants under the share options plan.

 

Retained deficit

 

Retained deficit comprises accumulated losses in the current and prior financial years.



CONNEMARA MINING COMPANY PLC

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

 

 

 

 


2016

2015





CASH FLOW FROM OPERATING ACTIVITIES






Loss for the financial year

(195,584)

(202,961)

Investment revenue recognised in loss for the financial year

-

(4)

Exchange movements

11,963

(16,334)


                   

                  


(183,621)

(219,299)




MOVEMENTS IN WORKING CAPITAL



Increase/(Decrease) in trade and other payables

15,728

(30,980)

Decrease in other receivables

14,667

41,099


                   

                   

CASH USED BY OPERATIONS

(153,226)

(209,180)




Investment revenue

-

4


                   

                   

NET CASH USED IN OPERATING ACTIVITIES

(153,226)

(209,176)


                   

                   

CASH FLOW FROM INVESTING ACTIVITIES






Payments for exploration and evaluation






NET CASH USED IN INVESTING ACTIVITIES

(247,299)

(71,624)


                   

                   

CASH FLOW FROM FINANCING ACTIVITIES

(247,299)

(71,624)


                   

                   

Proceeds from issue of equity shares

478,842

-

Share issue costs

(23,942)

-


                   

                   

NET CASH FROM FINANCING ACTIVITIES

454,900

-


                   

                   




NET INCREASE/(DECREASE) IN



CASH AND CASH EQUIVALENTS

54,375

(280,800)




Cash and cash equivalents at beginning



of financial year

120,382

384,848




Effect of exchange rate changes on cash held in foreign currencies

(11,963)

16,334


                   

                   

Cash and cash equivalents at end



of financial year

162,794

120,382


                   

                   



 

Notes:

 

1.    Accounting Policies

 

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2015.  The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

2.    Loss per Share                                                                                                                                 

              


2016

2015





Loss per share - Basic and Diluted

(0.29)

(0.36c)


                   

                   

 

Basic loss per share

The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:

 


2016

2015





Loss for the year attributable to equity holders of the parent

(195,584)

(202,961)


                   

                   





2016

2015


No.

No.

Weighted average number of ordinary shares for the



purpose of basic earnings per share

68,498,396

55,779,711


                   

                   

 

Basic and diluted loss per share is the same as the effect of the outstanding share options and warrants is anti-dilutive.

 

3.    Intangible Assets

 


2016

2015

Exploration and Evaluation:




Cost:



At 1 January 2016

2,451,015

2,379,391

Additions

247,299

71,624


                   

                   

At 31 December 2016

2,698,314

2,451,015


                   

                   




Carrying amount:



At 31 December 2016

2,698,314

2,451,015


                   

                   

The above represents expenditure on projects in Ireland. Included in the Group intangible assets is €Nil (2015: €Nil) of directors' remuneration which was capitalised during the year.

 

In 2012 the Group entered into an agreement with Teck Ireland Limited ("Teck"), a subsidiary of Teck Resources Limited, which gives Teck the option of earning a 75% interest in licences held by the Group in Cavan/Meath. Teck have to spend €1.35 million on the licences by 2018 in order to earn the option to acquire 75% interest. As per the agreement the licences have been transferred into a new company, Oldcastle Zinc Limited. As at 31 December 2016 Teck had completed €1,064,403 worth of expenditure. As per the agreement upon Teck completing €550,000 worth of expenditure 343,500 ordinary shares in Oldcastle Zinc Limited were to be issued to Teck. The shares were issued on 20 February 2015 giving Teck a 51% interest in the company.

 

In 2007 the Group entered into an agreement with Teck Cominco which gave Teck Cominco the option to earn a 75% interest in a number of other licences held by the Group.  Teck Cominco had to spend CAD$3m to earn the interest. During 2012 the relevant licences were transferred to a new company, TILZ Minerals Limited, which at 31 December 2016 was owned 23.44% (2015: 23.44%) by Limerick Zinc Limited and 76.56% (2015: 76.56%) by Teck Ireland Limited.                The Group's share of expenditure on the licences continues to be capitalised as an exploration and evaluation asset. The Group is subject to cash calls from Teck Ireland Limited in respect of the financing of the ongoing exploration and evaluation of these licences. In the event that the Group decides not to meet these cash calls its interest in TILZ Minerals Limited may be diluted accordingly.

 

The realisation of the intangible assets is dependent on the discovery and successful development of economic reserves which is subject to a number of risks as outlined below. Should this prove unsuccessful the value included in the balance sheet would be written off to the statement of comprehensive income.

 

The Group's exploration activities are subject to a number of significant and potential risks including:

 

               - uncertainties over development and operational risks;

               - compliance with licence obligations;

               - liquidity risks; and

               - going concern risks;

 

The directors are aware that by its nature there is an inherent uncertainty in such exploration and evaluation expenditure as to the value of the asset.  Having reviewed the carrying value of exploration and evaluation of assets at 31 December 2016, the directors are satisfied that the value of the intangible asset is not less than carrying value.

 

Segmental analysis

2016

2015





Limerick

1,404,296

1,370,210

Oldcastle

330,000

330,000

Rest of Ireland

964,018

750,805


                   

                   


2,698,314

2,451,015


                   

                   

 



 

 

4.    Share Capital and Share Premium

              


2016

2015


Authorised:



200,000,000 Ordinary shares of €0.01 each

2,000,000

2,000,000


                   

                   

 

Allotted, Called-Up and Fully Paid:



Share

Share


Number

Capital

Premium



At 1 January 2015

55,779,711

557,797

4,809,006

Issued in the year

-

-

-


                   

                   

                   





At 31 December 2015

55,779,711

557,797

4,809,006

Issued in the year

20,010,000

200,100

278,742

Share issue costs

-

-

(23,942)


                   

                   

                   

31 December 2016

75,789,711

757,897

5,063,806


                   

                   

                   

 

On 13 May 2016, a total of 20,010,000 shares were issued at a price of 2p per share to provide additional working capital and fund development costs. 

For each share subscribed for, the investors also received one warrant to subscribe for an additional ordinary share at a price of 5p per share at any time until 26 May 2018. As date of issue each warrant had a fair value of 0.0824p.

 

 

5.    Annual General  Meeting

 

The Company's Annual General Meeting will be held on 24th July 2017 in the Shelbourne Hotel, St. Stephen's Green, Dublin at 1:00 pm.

 

 

6.    General Information

 

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2016.  The financial information for 2015 is derived from the financial statements for 2015 which have been delivered to the Companies Registration Office.  The auditors have reported on 2015 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, investment in subsidiaries and amounts due by group undertakings. The financial statements for 2016 will be delivered to the Companies Registration Office.

 

A copy of the Company's Annual Report and Accounts for 2016 will be mailed to all shareholders shortly and will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.  The annual report will shortly be available for viewing at Connemara Mining Company PLC's website at www.connemaramining.com.

 

 


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