Final Results
Condor Resources PLC
29 June 2007
29th June, 2007
Condor Resources plc
(''Condor'' or ''the Company'')
Audited Results for the Year Ended 31 December 2006
Condor is pleased to announce the audited financial results for the year ended
31 December 2006.
HIGHLIGHTS
• Successful listing of the Company on the Alternative Investment Market
(AIM) of the London Stock Exchange on 31st May 2006 - £4.85m raised.
• Commissioning of the Nicaraguan and London offices.
• Awarded the El Gigante licence in El Salvador, further consolidating the
Pescadito Project area which covers several significant historical workings.
• Commenced diamond drilling at the Loma del Caballo Prospect, El Salvador.
• Secured the Kuikuinita and Columbus Projects in Nicaragua for an initial
cost of US$300,000. Indications of porphyry copper-gold style mineralisation
are present. A further US$200,000 to be paid after full due diligence
completed.
• Global Resources up 32% from those quoted at IPO through reporting a
maiden JORC mineral resource of 112,600 ounces of gold and 97,300 ounces of
silver at La Calera, El Salvador. A further 193,000 ounces of gold and
155,000 ounces of silver are contained within the block model over an
initial strike length of some 700 metres.
• Completed 1,500 metres of trenching at the Pescadito Project, El Salvador
where an extension program is underway at the Santo Thomas - Protectora -
Carolina - Divisidero structure. The directors believe that trench results
reported at Corozal include 14 metres @ 1.01g/t gold and 19.9g/t silver; 2
metres @ 2.19g/t gold and 50.2g/t silver; 2 metres @ 2.59g/t gold and 12.5g/
t silver and 1 metre @ 8.61g/t gold and 491.1g/t silver.
• Completion of technical reviews of four licences within Nicaragua. Results
of these reviews of the Chachagua, Cerro de Oro, Guapinol and El Gallo
licences resulted in the the licences being returned to the vendors, Chorti
Holdings with no further work commitments to Condor.
POST PERIOD HIGHLIGHTS
• Payment made of a further US$200,000 to secure the Kuikuinita and Columbus
projects after completion of a favourable technical due diligence process.
• Significant initial trench results reported from the Company's 100% owned
El Cacao Project in Nicaragua showing excellent width and grade and
continuity of mineralization over at least 400 metres strike length on a
virgin epithermal vein discovery. Further trenching is in progress on a
potential 2,000 metres of mineralised strike.
• Released significant trenching results on its San Albino Project in
northern Nicaragua, close to the historical high grade San Albino Mine, with
high grade trenching results including 18 metres at 6.77g/t gold.
Mineralisation remains open along strike in both directions and the width
remains unconstrained at the thickest intersection in the south-east.
• Two additional parallel mineralised structures have been identified at the
same prospect. Both parallel systems are open along strike and returned the
following assay results: 3 metres at 2.94g/t gold and 3 metres @ 20.11g/t
gold respectively.
CHAIRMAN'S STATEMENTS
Dear Shareholder,
I am pleased to present Condor Resources PLC's annual report for the 12 month
financial period to the 31st December 2006. It has been a busy year for your
Company. The main corporate event was the listing of your Company on the 31st
May 2006 on the Alternative Investment Market of the London Stock Exchange. On
Admission to AIM the Company raised £4.85 million. I joined the Board as
Chairman immediately prior to listing.
Condor is an exploration company, focused on the discovery of gold, silver and
base metals in Central America. The Company currently has 5 explorations
licences in El Salvador and 5 explorations licences in Nicaragua with an
additional two licences under application. Condor has been operating in Central
American countries since June 2003. Condor has a JORC Compliant Inferred
Resource of 467,104 ounces of gold and 18.4 million ounces of silver.
Condor's strategy is to secure 100% ownership of licences in under explored
mineral rich areas, which have a history of mining. Condor evaluates each
project via a process of rock chip sampling, trenching and mapping, at which
stage a decision is made whether to discard the project or embark on a drill
campaign. To this extent, Condor has discarded five concessions during the
period and added a further five. The objective of this strategy is to focus on a
lead project in each country and drill up resources and reserves to a JORC
standard, which are commercial in quantity. Condor's stated objective is to
prove a resource of 1 to 2 million ounces of gold and 30 to 50 million ounces of
silver within approximately 2 years of Admission to AIM.
In order to execute the strategy your executive management has assembled a
small, highly focused team of geologists and mining executives with proven
exploration, project development and business analysis expertise. Condor has a
team of 20 personnel in Central America, including 4 expatriate and 6 national
geologists and associated senior management personnel. The year has not been
without challenges. Initially there was difficulty securing a suitable drilling
rig and technical staff, but these issues have been overcome. More recently, in
El Salvador the Ministry of the Environment (MARN) has delayed issuing
environmental permits to drill. This has delayed drilling on a key project.
However, Condor is still drilling on other licences where an environmental
permit to drill has been granted. The Board is carefully monitoring the
situation and is seeking clarification from MARN and will inform shareholders of
developments in due course.
Looking to the future, Condor has produced very encouraging results from several
of its concessions in El Salvador and Nicaragua and the Board is confident that
one of these concessions can be developed into a commercial deposit of at least
1 million ounces of gold.
I would like to thank shareholders for their confidence and support during the
year. My thanks also go to my fellow directors and to a loyal, motivated and
hard working team who are equally excited by the discoveries they are making in
Central America.
Mark Child
Non-executive Chairman
MANAGING DIRECTORS'S REVIEW
Dear Shareholder,
In this, my first Annual Report as Chief Executive Officer of Condor Resources
PLC, I would like, at the outset, to thank shareholders for their confidence and
support to my team and me, shown throughout a more difficult than expected year.
Your support has ensured that Condor is well funded and strategically positioned
to take advantage of the under developed opportunities in the resources sector
within Central America at this very positive time in the commodities cycle.
Condor has assembled a small, highly focused team with proven exploration,
project development and business analysis and evaluation expertise, ensuring
that the Company's growth vision will not be impeded by the skills shortage
being experienced across the industry. In addition, Condor's board includes a
balanced spread of experienced and accomplished financial, mining executives and
geologists with the capability of delivering on our focused long-term growth
strategy in the minerals sector.
At 31st December 2006, Condor had £3.4 million in cash reserves and a strong,
long-term investor and shareholder base. A comprehensive review of the Company's
existing projects in El Salvador and Nicaragua is continually being undertaken
to evaluate the most appropriate projects to enable Condor to achieve its stated
objectives and to maximize long term value for its shareholders from these
assets. At the same time we are assessing a broad range of opportunities
predominantly in gold and base metals in Central America, with a focus on
securing 100% ownership of under explored areas or advanced projects with
possible production.
Our first new projects are through an exploration farm-in and joint-venture with
Chorti Holdings of Nicaragua on the Columbus and Kuikuinita Concessions in the
RAAN of north eastern Nicaragua, which was announced in November 2006 last year.
This farm-in and joint venture represents a very attractive gold and base metals
exploration opportunity of considerable size for Condor within a region that is
one of Nicaragua's major metal producing areas. An initial field program of grid
establishment, mapping and trenching is underway and is to be followed by a
maiden drilling program to test the depth and extent of the mineralization
outlined already. Further details of this are contained within the Review of
Operations section of this Annual Report.
Although Condor's primary aim is to meet its stated resource targets, the
assessment of more advanced or production opportunities will continue to be
diligently analysed on a systematic basis.
We have a clear vision to build Condor into a substantial new resource company
with a strong focus on securing and pursuing new exploration and development
projects in Central America with a view to moving to production status as soon
as possible. I hope that shareholders will continue to share this vision with us
as we move forward into what promises to be an exciting stage of development for
Condor.
My thanks go to my fellow directors for their support and as well to the loyal,
motivated and hardworking team, most of whom have worked successfully building
other resource companies in the past. This highly supportive and experienced
team will undoubtedly underpin the future success of Condor Resources PLC.
Shareholders requiring additional information on the Company's activities are
invited to contact me at any time during business hours or to access the
Company's web site at www.condorresourcesplc.com.
Nigel Ferguson
Managing Director
OPERATIONS REPORT
During the year, exploration proceeded on a number of fronts with the main focus
being the more advanced resource opportunities in El Salvador. Exploration in
Nicaragua continued whilst two new, Condor managed gold exploration farm-in and
joint ventures commenced at Columbus and Kuikuinita in the north eastern RAAN
region of Nicaragua.
Summary of Operations - El Salvador
Project Licence Ownership Licence Prospect Exploration Stage JORC
Area (km2) Resource
La Calera La Calera 100% 42.00 La Calera Resource Yes
Trenching and
awaiting
drilling,
awaiting
environmental
permits
El Pescadito El 100% 50.00 Loma del Resource Yes
Pescadito Caballo
Virginia Trenching and No
Agua drilling
-Caliente
Corazal Trenching No
El Tigre Trenching and No
drilling
Santo Thomas Drilled No
Protectora Awaiting drilling No
Pepe Drilled No
Carolina 100% 40.50 Divisidero Resource, Yes
Awaiting drilling
El Gigante 100% 42.50 El Gigante Mapping, No
trenching
El Potosi El Potosi Earning 48.00 El Potosi Drilled No
100%
El Capulin Drilled No
Summary of Operations - Nicaragua
Project Licence Ownership Licence Exploration Stage JORC
Area (km2) Resource
Segovia San Albino Earning 80% 87.00 Trenching and drill ready. No
Awaiting permits
Potrerillos 100% 12.00 Pending award No
El Golfo 100% 20.00 Pending award No
Matagalpa Cacao 100% 11.90 Drill ready awaiting drill No
rig.
Las 100% 62.40 Pending first phase No
Morritas exploration
Siuna Kuikuinita Earning 80% 136.00 Trenching, drill planning No
underway
Columbus Earning 80% 140.00 Trenching, drill planning No
underway
The Company released on the 29th November 2006, its unaudited Interim Results
for the ten months ended 31st August 2006 and instigated the process of
upgrading its accounting software to handle three operational areas.
Condors' total global resources to Inferred JORC compliance are some 476,104
ounces of gold and 18.4 million ounces of silver.
Central American Mineral Resources - Condor Resources plc
Gross Gold Gross Silver
Prospect JORC Tonnes Grade (g Contained Tonnes Grade (g/ Contained
/t) Metal (oz) t) Metal (oz)
Category
Loma del Inferred 2,517,300 1.44 116,500 2,517,300 39.00 3,200,000
Caballo
Divisidero Inferred 2,748,200 2.70 238,000 2,748,200 171.00 15,100,000
La Calera Inferred 1,692,000 2.07 112,604 1,692,000 1.79 97,373
TOTAL 6,957,500 2.09 467,104 6,957,500 82.00 18,397,373
EL SALVADOR
Condor, through its wholly owned El Salvadoran subsidiary, Minerales Morazan SA
de CV, has been exploring for epithermal gold silver systems in Morazan
Formation of El Salvador.
The area of interest lies within the Nicaraguan Graben that hosts several major
gold and silver deposits along its 750 kilometre length including El Dorado, San
Sebastian, El Limon and La Libertad. It is one of the areas best endowed gold
provinces within the region yet, it remains relatively under explored.
Exploration during the year focused on the Pescadito and La Calera projects. At
the Pescadito project, mapping, trenching, air photo interpretation and both
reverse circulation and diamond core drilling has been completed to investigate
broad zones of intense surface alteration with associated historical workings.
Drilling has confirmed that the Pescadito project's Divisadero structure
comprises broad mineralized stockwork breccia zones with interstitial high grade
quartz veins. Alteration in the form of silica flooding and pyritisation is
evident over lateral widths of up to 60 metres in places. Gold and silver
results indicate at least three extensive mineralised zones of greater than 1g/t
gold and up to 1200g/t silver within the 3 kilometre structure coincidental to
historical workings.
At La Calera, a maiden JORC compliant mineral resource of some 112,600 ounces of
gold and 97,300 ounces of silver was calculated and reported by the Company on
20th December 2006. Modelling of the deposit by Independent Geologist and
Competent Person Ravensgate, also indicates a further 193,000 ounces of gold and
155,000 ounces of silver are contained within this block model covering a strike
length of some 700 metres.
Work continues on the project with intensive trenching and mapping defining
several new mineralised structures over a broader zone of defined
mineralization.
Aerial Photography has been completed for all licences in El Salvador which
allows regional targeting and topographical control within the project areas.
Project Reviews
La Calera Project
(Condor 100% ownership)
Summary of Mineral Resources - La Calera Prospect
Mineral Gross Gold Gross Silver
Resources Grade Contained Grade Contained
Tonnes (g/t) Metal (oz) Tonnes (g/t) Metal (oz)
Total 1,692,000 2.07 112,604 1,692,000 1.79 97,373
Inferred
Up to the date 13th December 2006, the company continued with its aggressive
trenching program utilising a local labour force of up to 100 at times. Several
new mineralised zones were discovered and will be further tested by drilling.
Our knowledge of the mineralised system has been greatly enhanced through this
trenching program allowing better definition of drilling targets. Multiple
mineral stockwork and vein systems have now been outlined and warrant further
drill testing.
Highlights from the La Calera trenching program to year end include 5 metres @
5.51g/t gold; 13 metres @ 8.57g/t gold including 6 metres @ 17.21g/t gold; 5
metres @ 4.29g/t gold; 6 metres @ 3.06g/t gold; 11 metres @ 3.15m gold; 7 metres
@ 2.51g/t gold and 9 metres @ 2.26g/t gold. Several of these trenches contain
open ended mineralisation and Condor has progressed to a further trenching
program that will infill and extend the known mineralisation.
The culmination of the trenching program was the delivery of a maiden resource
to the market on the 20th December 2006 of some 112,000 ounces of gold and
97,000 ounces of silver. This in itself was a significant increase in the
company's Central American resources - up 32% from those quoted at IPO.
Independent Geologist Ravensgate's modelling of the deposit also indicates that
using similar parameters for resource calculation, a further 193,000 ounces of
gold and 155,000 of silver are contained within the prospect that do not however
meet the strict criteria for JORC reporting and compliance.
Pescadito Project
(Condor 100% ownership)
Global Mineral Resources - Condor Resources plc
Gross Gold Gross Silver
Prospect JORC Tonnes Grade Contained Tonnes Grade (g/ Contained Metal
(g/t) Metal (oz) t) (oz)
Category
Loma del Inferred 2,517,300 1.44 116,500 2,517,300 39.00 3,200,000
Caballo
Divisidero Inferred 2,748,200 2.70 238,000 2,748,200 171.00 15,100,000
Trenching has formed an integral part the Company's exploration tools and work
progressed during the period at the Pescadito Project produced some significant
and interesting intercepts. These included trench results at Corozal including
14 metres @ 1.01g/t gold and 19.9g/t silver; 2 metres @ 2.19g/t gold and 50.2g/t
silver; 2 metres @ 2.59g/t gold and 12.5g/t silver and 1 metre @ 8.61g/t gold
and 491.1g/t silver. The mineralisation and alteration encountered within this
trenching gave excellent confirmation of Condor's target model of broad stock
work zones of gold mineralisation with inter-fingering high grade quartz veins.
This suggests that open pit mining may be possible, with subsequent underground
mining of higher grade mineralised zones.
Additionally, an initial 1,500m trenching programme was completed and an
extension program is still underway at the Santo Thomas - Protectora - Carolina
- Divisidero structure, within the Pescadito Project.
Condor was also awarded the El Gigante licence in El Salvador which forms the
third licence within the Pescadito project. The El Gigante licence, contains a
number of historical workings and exhibits a geological setting similar to that
of the San Sebastian Gold Mine area to the south east, which is recorded as El
Salvadors' most prolific and richest gold producer.
SHAPE /* MERGEFORMAT Condor was also awarded the El Gigante licence in El
Salvador which forms the third licence within the Pescadito project. The El
Gigante licence, contains a number of historical workings and exhibits a
geological setting similar to that of the San Sebastian Gold Mine area to the
south east, which is recorded as El Salvadors' most prolific and richest gold
producer.
Historical underground workings from circa 1935, indicate the average grade of
underground sampling at El Gigante was 5.33g/t gold (max. 37.32g/t gold) and
228g/t silver (max 1,023g/t silver). A 6 diamond drill hole program was
completed in 2004 by Intrepid Minerals Corp. of Canada with significant
intercepts including 3.35m @ 15.61g/t gold and 1393g/t silver from 29.9m depth;
0.2m @ 44.86g/t gold and 2516g/t silver from 24.65m depth and 9.65m @ 4.00g/t
gold and 231g/t silver from 48.45m depth.
These drill results show at least two parallel structures that have never had
follow up work completed on them. Condor completed only reconnaissance rock chip
sampling on the licence which confirms gold mineralisation on a structure 1,000m
long and 2m to 5m wide. The limited sampling program includes values up to 4.83g
/t gold; with channel chip results of some 5m @ 2.51g/t gold and 4m @ 1.33g/t
gold. The structure remains open in all directions.
Further significant results were reported from trenching at the Loma del Caballo
Prospect in line with those disclosed in the Admission Document, and confirming
the width and nature of mineralization in the resource area. These included 8m @
0.57g/t gold and 46.94g/t silver; 7m @ 1.88g/t gold and 17.61g/t silver; 15m @
3.24g/t gold and 41.96g/t silver including 2m @ 17.53g/t gold and 229.25g/t
silver.
El Potosi Project
(Condor earning 100%)
Encouraging assay results were received from exploration work at the Potosi
Project in El Salvador where highlights included 5.0 metres @ 9.23 g/t gold
including 1m @ 30.93g/t gold, and 5.35 metres @ 22.15g/t gold including 0.38m @
98.6g/t gold and 41.1g/t silver from diamond and reverse circulation drilling
completed on the main project area.
Further drilling was undertaken and results indicate that similar mineralised
zones are evident within the Potosi workings zones at depths of plus 120 metres.
The Company is assessing further work and may complete further drilling on the
project should it be warranted.
NICARAGUA
Condor has progressed with exploration of the licences within Nicaragua with the
aim of getting all prospects to the drilling stage within a 12 to 18 month
period from listing. The Nicaraguan licences are presently secondary to the more
advanced El Salvador package and will require further preparatory work to ensure
that exploration funds are spent in a diligent manner testing structures with
significant potential to add value to the company.
General field work including operational setup of offices and field camps was
followed by mapping and sampling of prospective areas of the company's'
licences. Trenching of most highlighted areas of gold anomalism has been
undertaken and progress has been made in defining drilling targets for late 2007
early 2008.
The Company secured two new exciting prospects in November of 2006; the
Kuikuinita and Columbus projects. These will form an integral part of the
strategy to develop and build value for shareholders as the Directors believe
that they hold significant as yet untested potential.
Under the terms of the agreement for these two licences Condor has made cash
payments totalling US$290,000 and must expend US$1 million on each licence over
a three year term to earn an 80% interest.
The Company also completed its initial review of four licences within Nicaragua
through field verification of anomalous zones as defined by previous exploration
programs. The Company considered the results of the verification program on the
four licences, Chachagua, Cerro de Oro, Guapinol and El Gallo, to fall short of
the criteria for further work commitments. It was therefore decided to return
the licences to the vendors; Chorti Holdings.
Project Reviews
Columbus Project
(Condor earning up to 80%)
The Columbus Concession includes Cerro Columbus, which extends west to another
zone of greisen alteration with associated breccia pipes with gold occurring in
a quartz-specularite breccia pipe. Trench results by previous explorers include
19.5 metres at 2.26g/t gold. Gold is also associated with the quartz-tourmaline
breccia pipes in oxide zones after sulphides, with results of 13.35 metres at
1.43g/t gold being reported from this zone.
The presence of highly anomalous molybdenum, averaging 682ppm Mo over 35.4
metres in trench COL-04 and associated copper and silver mineralisation may
indicate a proximal intrusion related system consistent with the previously
proposed theory that there are multiple intrusive phases, indicating a
favourable environment for porphyry hosted mineralization.
Significant results from previous diamond drilling completed by Pila Gold
includes 8.68m @ 2.52g/t gold including 1.52metres @ 6.5g/t gold, 22.3g/t
silver, 0.12% Copper and 0.2% molybdenum; 19.8metres @ 3.14g/t gold; 2.58metres
@ 18.37g/t gold;22.4metes @ 1.07g/t gold including 3.05metres @ 2.46g/t gold,
12.3g/t silver, 0.23% copper.
Condor's objective is to discover a substantial deposit capable of underpinning
a stand alone mining operation. To this end, Condor commenced its field
operations late in 2006 with initial work including cutting and assaying of
previous drill core to confirm previous assay tenor, mapping on a re-established
grid plan and planning future work.
Kuikuinita Project
(Condor earning up to 80%)
The Kuikuinita Project contains Tertiary aged dacitic tuffs overlaying an
Ultramafic sequence intruded by coeval dacite dykes. A trenching programme
carried out by Pila Gold in late 2002 demonstrated that gold mineralisation in
the Loma Los Indios area occurs either in the Dacite dykes or adjacent to them
in the surrounding intruded units.
Trench sampling by Pilar Gold in the San Antonio area in an oxidized and
weathered Ultramafic returned 5 metres at 17.3g/t gold. The most significant
gold mineralisation intercepted in the Pilar exploration program included 2.8
metres at 12.85g/t gold, 0.86 metres at 16.2g/t gold and 82.6g/t silver and 1.52
metres at 8.6g/t gold. Both these and Pila trenches were duplicated by Condor
and the results have shown a high level confidence in the sampling process.
Additionally, silver and base metal mineralisation associated with a fault zone
was intercepted in drill hole KUDH-7. Oxide mineralisation occurs in mafic
volcanics adjacent to a dacite dyke suggesting a genetic association with the
dyke. This intercept averaged 20.9 metres at 226g/t silver, 0.82g/t gold, 0.6%
copper, 3.35% lead and 1% zinc, with a high of 774g/t silver, 2.2g/t gold,
12.48% lead and 1.9% copper over 2.74 metres.
Condor believes that further investigative work is required to determine the
projects full potential which the company has commenced in an infill trenching
program to be followed by exploration reverse circulation drilling.
San Albino Project
(Condor earning 80% at San Albino and has 100% of El Golfo and Potrerillos)
During the year, steady progress has been made with field work focussed on
reconnaissance chip sampling and follow up trenching of anomalous areas. A total
of 110 chip grab samples were taken in the course of mapping 89 kilometres of
tracks and grid lines with results as high as 100g/t gold returned. Visible gold
was seen in several samples and follow up trenching commenced late in the year.
A total of 336 metres of hand excavated trenches were completed and 1 metres
samples submitted to the laboratory for analytical determinations.
Results for the majority of trenching samples were outstanding at the end of the
year however ongoing trenching based on geological results continues.
The San Albino Project has the ability to provide several high grade quartz
veins within close proximity of each other with high grade gold results of up to
one or two ounces per tonne. It is expected that the average grade will be well
above 5g/t gold.
Cacao and Las Morritas Projects
(Condor 100% ownership)
Two new licences were applied for directly to Government by Condor Resource's
subsidiary in country, Condor SA. Full environmental clearances and
investigations for initial exploration work were carried out simultaneously and
the licences were awarded early in 2007 post end of year.
Juan Sebastian Project
(Condor earning up to 80%)
During the year, a total of 20km(2) of mapping was completed with a view to
investigate the anomalous copper mineralisation within the licence area. A zone
to the southern boundary was defined as the greater area of anomalism however
further investigation revealed that copper mineralisation was contained within a
basaltic flow with an expected thickness of 120m. This negated easy exploration
of the anomalous areas and it was decided that the licence would be returned to
the vendor.
POST PERIOD HIGHLIGHTS
Post period highlights include the delivery of several significant assay results
to Company. These include the following:
On the 1st March, 2007, Reverse Circulation drilling commenced at El Pescadito
in El Salvador after a substantial delay in the ability to secure a suitable
drilling rig for El Salvador.
On the 11 May, 2007, significant trenching results from the Company's 100% owned
El Cacao Project in Nicaragua were released for the initial phase of trenching.
These assay results show excellent width and grade and establish a continuity of
mineralization over at least 400m strike length on a virgin epithermal vein
discovery.
The Company completed 290.6m of an ongoing programme exposing gold-bearing
epithermal quartz veins as well as testing for possible strike extensions and
additional parallel zones. Mineralised veins up to 3.1m wide at grades of 2.58g/
t gold were reported, including a one metre wide, higher grade zone of greater
than 10g/t gold.
Selected highlights include:
Trench Number Width Gold Grade
CCTR0004 1.0 metre 11.54g/t
CCTR0005 2.8 metres 3.06g/t
CCTR0006 3.1 metres 2.58g/t
CCTR0007 1.2 metres 1.17g/t
CCTR0007 2.0 metres 1.19g/t
CCTR0009 2.4 metres 2.18g/t
These results define a highly gold anomalous area with a strike length of 400
metres containing several parallel quartz veins and associated wide alteration
zones that will require further follow up work, including an extensive drilling
program. Mapping of lag and float material suggests that the Cacao vein could
extend for a further 2km to the west, partially buried beneath a thin cover of
alluvium. Further trenches are being excavated to test the western strike extent
of the structure.
On 18th May 2007, the Company released significant news on its San Albino
Project in northern Nicaragua close to the historical high grade San Albino Mine
where high grade trenching results included 18 metres at 6.77g/t gold.
Significant gold intercepts in four adjacent trenches approximately 50 metres
apart, define a mineralised corridor greater than 200 metres long and varying
between 3 metres width in the northeast to over 18 metres width towards the
south-west. Mineralisation remains open along strike in both directions and the
width remains unconstrained at the thickest intersection in the south-east.
In addition, two parallel mineralised structures have been identified in trench
SATR010 which was extended further to the south-east than the other trenches to
test for such parallel mineralised structures. Both parallel systems are open
along strike and returned the following assay results from SATR010: 3 metres at
2.94g/t gold and 3 metres @ 20.11g/t gold respectively.
All the significant uncut intersections are summarised in the table below:
Trench Number Width Gold Grade Silver Grade
SATR003 12 metres 5.59g/t 23.11g/t
SATR010 18 metres 6.77g/t 11.84g/t
SATR010 3 metres 2.94g/t 5.40g/t
SATR010 3 metres 20.11g/t 31.07g/t
SATR011 16 metres 7.89g/t 10.23g/t
SATR013 3 metres 4.99g/t 24.37g/t
The gold mineralization is hosted by a south-east dipping shear zone of
chloritic and locally graphitic quartz-bearing schist that cuts through a
package of medium to high grade metamorphic rocks. Width and grade of the gold
mineralization increases to the south-east, where both width and strike extent
have not yet been constrained.
Extensions to existing trenches and further trenching to test the strike extent
are planned. An initial reverse circulation program to test continuity of
mineralization at depth is also being planned for commencement after receipt of
Government Environmental Permits and on securing a suitable drilling rig. The
wide intersections indicated in trenching to date suggest that the San Albino
Prospect may be amenable to low cost open pit bulk mining.
The Company is very excited about the recent results and prospectivity of the
licence and looks forward to continue excellent results from the field through
additional trenching and subsequent drilling of the highly mineralised
structures.
DIRECTORS REPORT
The directors present their report with the financial statements of the company
and the group for the year ended 31 December 2006.
Incorporation
The company was incorporated in England and Wales on 10 October 2005. It
re-registered as a public limited company on 7 April 2006 and floated on the AIM
stock market on 31 May 2006.
principal activity
The principal activity of the group in the year under review was that of
exploration of gold and silver concessions in El Salvador and Nicaragua.
review of developments and future prospects
The group's financial performance for the year was in line with Directors'
expectations. The group loss after taxation for the year to 31 December 2006
amounted to £690,464.
The record of the business during the year and an indication of likely further
developments may be found in the Chairman's statement (page 3) and the Managing
Director's Review (page 4).
DIRECTORS
The directors shown below have held office during the period:
N M Ferguson - appointed 24 March 2006
M L Child - appointed 24 May 2006
S Dobson - appointed 24 March 2006 - resigned 13 September 2006
K P Eckhof - appointed 24 March 2006
T L Wall - resigned 7 April 2006
Gower Nominees Limited - resigned 22 March 2006
DIRECTORS INTERESTS
The directors in office during the period under review and their interests in
ordinary shares and unlisted options of the company at 31 December 2006 were:
31 December 2006
Directors Holding Number of Number of
shares options
M L Child Direct 2,000,000 1,250,000
Indirect Nil Nil
N M Ferguson Direct Nil Nil
Indirect 800,000 4,500,000
K P Eckhof Direct Nil Nil
Indirect 240,000 1,750,000
The interests of the Directors, financial advisers and staff in options to
subscribe for ordinary shares of the company were:
Exercise Latest As at 1 Granted Lapsed As at 31
price (p) exercise January during the in the December
date 2006 year year 2006
DIRECTORS
M L Child 15 30 May 2011 Nil 1,250,000 Nil 1,250,000
N M Ferguson 15 30 May 2011 Nil 4,500,000 Nil 4,500,000
K P Eckhof 15 30 May 2011 Nil 1,750,000 Nil 1,750,000
FINANCIAL ADVISERS
Nabarro Wells 15 30 May 2011 Nil 2,000,000 Nil 2,000,000
OTHERS 15 30 May 2011 Nil 2,250,000 Nil 2,250.000
Nil 11,750,000 Nil 11,750,000
SUBSTANTIAL SHAREHOLDERS
Shareholders Number of Holding %
ordinary shares
Pershing Keen Nominees Limited 17,865,600 13.7
Roy Nominees Limited 11,000,000 8.4
Teawood Nominees Limited 8,840,000 6.8
ISI Nominees Limited 7,100,000 5.5
Chase Nominees Limited 6,000,000 4.6
T. Hoare Nominees Limited 5,140,000 3,9
S. Dobson 5,000,000 3.9
Vidacos Nominees Limited 4,745,000 3.6
HSBC Global Custody Nominee (UK) Limited 4,400,000 3.4
Bear Sterns Securities Corp 4.275,000 3.3
Chase Nominees Limited 4,000,000 3.1
Giltspur Nominees Limited 3,917,000 3.0
FINANCIAL RISK MANAGEMENT
The group's operations expose it to financial risks that include liquidity risk,
interest rate and foreign exchange risk. The group does not have any debt and is
not therefore required to use derivative financial instruments to manage
interest rate costs nor is hedge accounting applied.
1. Price Risk
The directors do not consider there is a price risk to the business. The group
has no exposure to equity securities price risk as it holds no other listed or
equity investment
2. Credit Risk
At this early stage of the group's development, in the absence of customers, it
does not have credit risk.
3. Liquidity Risk
The group actively manages its working finance to ensure the group has
sufficient funds for operations and planned expansions.
4. Interest Rate Cash Flow Risk
The group does not have interest-bearing liabilities. Interest bearing assets
are only cash balances that earn interest at a floating rate.
The directors do not consider there to be a material cash flow risk.
5. Foreign Exchange Risk
The group principally operates in US Dollars. It does not currently consider the
risk of exposure to be material. As such the directors do not currently consider
it necessary to enter into forward exchange contracts. This situation is
monitored on a regular basis.
Corporate Governance
Corporate Policies
Condor takes its health, safety, environmental and community responsibilities
seriously, and has developed policies and systems to ensure that it explores in
a safe, low impact and consultative manner, maximising the sustainability of its
present and future operations for the benefit of all stakeholders.
Health and Safety
Condor takes the health and safety of its employees and contractors seriously,
and strives to exceed statutory obligations and achieve best practice. To this
end, a new safety management system has been implemented for its exploration
operations.
Environment
Condor operates in strict adherence to local and Governmental standards with
regard to environmental impact on the local community. This procedure includes
pre-exploration checks and post-exploration remediation programs.
Community
Condor is committed to working consultatively and co-operatively within the
communities in which it operates, which includes local subsistence farmers and
pastoralists and firmly believes that future mining operations should be to the
benefit of all. To this end, Condor personnel participate in cultural awareness
programs and have forged close ties with landholders and maintain a constructive
dialogue with the Department of Environment and local community representatives.
Condor is also a sponsor of many community development and aid programs
currently in place including the provision of clean water through drilling water
wells, tree planting, the supply of school books and training of locals in both
technical and non technical skills to assist their personal development.
Compliance with the Combined Code
The directors recognise the value of the Combined Code on Corporate Governance,
and whilst under AIM rules full compliance is not required, the directors
believe that the company applies the recommendations insofar as is practicable
and appropriate for a public company of its size.
Board of Directors
The board of directors comprises one executive director and two non-executive
directors who qualify as independent non-executive directors as defined by the
Combined Code. The directors are of the opinion that the board comprises a
suitable balance and that the recommendations of the Combined Code have been
implemented to an appropriate level. The board, through the chairman and
executive director in particular, maintain regular contact with its advisers and
public relations consultants in order to ensure that the board develops an
understanding of the views of major shareholders about the company.
The board meets regularly throughout the year and met 10 times during the period
to 31 December 2006. The board is responsible for formulating, reviewing and
approving the company's strategy, financial activities and operating
performance. Day-to-day management is devolved to the executive director who is
charged with consulting with the board on all significant financial and
operational matters. Consequently, decisions are made promptly and following
consultation among directors concerned where necessary and appropriate.
All necessary information is supplied to the directors on a timely basis to
enable them to discharge their duties effectively, and all directors have access
to independent professional advice, at the company's expense, as and when
required.
The participation of both private and institutional investors at the Annual
General Meeting is welcomed by the board.
Committees
Each of the following committees has its own terms of reference.
Audit Committee
The Audit Committee comprises the non-executive director and the non-executive
chairman. Its terms of reference indicate at least two regular meetings per year
and its formal meeting, to review the findings of the 2006 audit work, took
place on 19 June 2007. All directors received a copy of the audit committee
report prior to the meeting and had an opportunity to comment. The meeting was
attended by the auditors.
The chief financial officer and a representative of the external auditors are
normally invited to attend meetings. Other directors or staff may be invited to
attend, as considered beneficial by the committee.
The Audit Committee's primary responsibilities are to review the effectiveness
of the company's systems of internal control, to review with the external
auditors the nature and scope of their audit and the results of the audit, and
to evaluate and select external auditors.
Remuneration Committee
The Remuneration Committee plans to meet at least twice in each year. Its
members are M L Child (chairman) and K Eckhof, both of whom were in attendance
at the meeting.
The company's policy is to remunerate senior executives fairly in such a manner
as to facilitate the recruitment, retention and motivation of staff. The
Remuneration Committee agrees with the Board a framework for the remuneration of
the chairman, the executive directors and the senior management of the company.
The principal objective of the committee is to ensure that members of the
executive management of the company are provided incentives to encourage
enhanced performance and are, in a fair and responsible manner, rewarded for
their individual contributions to the success of the company. Non-executive fees
are considered and agreed by the Board as a whole.
Service Contracts
The company has service contracts with its executive and non-executive
directors.
The service contracts also provide that the directors and parties related to the
directors are entitled to participate in the share option arrangements operated
by the Company as well as consultancy payments.
Details of the contracts currently in place for directors and related parties
are as follows:
Annual salary Consultancy Date of Contract Unexpired Notice period
£'000 payments £'000 term
M. L. Child 12 24 24 May 2006 - 6 months
N. M. Ferguson 24 100 24 May 2006 - 6 months
K. P. Eckhof 12 24 24 May 2006 - 6 months
Subject to the notice requirements described above, there is no provision in the
service agreements for compensation to be payable on early termination of the
contract.
Supplier payment policy
It is the group's policy to pay suppliers in accordance with the terms of
business agreed with them. The number of days' purchases outstanding for the
group as at 31 December 2006 was 30 days.
Change of fiscal year end
Condor Resources Plc changed its fiscal year end from 31st October to a 12 month
period ending 31st December to align its reporting period with that of its
subsidiary companies.
Annual general meeting
Your attention is drawn to the Notice of Meeting enclosed with this report
convening the Annual General Meeting of the company at 10 a.m. on 25 July 2007
at the offices of the company at 1 Warwick Row, London SW1E 5ER. The Notice of
Meeting sets out and explains the special and ordinary business to be conducted
at the meeting.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the financial statements in
accordance with applicable laws and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have elected to prepare the
financial statements in accordance with International Reporting Standards as
adopted for use in the European Union. The financial statements are required by
law to give a true and fair view of the state of affairs of the company and the
group and of the profit and loss of the group for that period. In preparing
these financial statements, the directors are required to
• Select suitable accounting policies and then apply them consistently;
• Make judgements and estimates that are reasonable and prudent;
• Prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and the group and to enable them to ensure that the financial statements
comply with the Companies Act 1985. They are also responsible for safeguarding
the assets of the company and the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
ON BEHALF OF THE BOARD:
26 June 2007
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as
defined by Section 234ZA of the Companies Act 1985) of which the group's
auditors are unaware, and each director has taken all steps that he ought to
have taken as a director in order to make himself aware of any relevant audit
information and to establish that the group's auditors are aware of that
information.
AUDITORS
The auditors, Mazars LLP, will be proposed for re-appointment in accordance with
Section 385 of the Companies Act 1985.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CONDOR RESOURCES PLC
We have audited the group and parent company financial statements (the '
financial statements') of Condor Resources plc for the year ended 31 December
2006, which comprise the Consolidated Income Statement, Consolidated Statement
of Changes in Equity, Consolidated Balance Sheet, Company Balance Sheet,
Consolidated Cash Flow Statement, Company Cash Flow Statement and the related
notes. These financial statements have been prepared on the basis of the
accounting policies set out therein.
This report is made solely to the company's members, as a body, in accordance
with Section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the company's members those matters we are required to
state to them in an auditors' report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report and the
Financial Statements in accordance with applicable law and International
Financial Reporting Standards as adopted for use in the European Union are set
out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements, International Standards on Auditing
(UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and have been properly prepared in accordance with the Companies
Act 1985. We also report to you if, in our opinion, the Directors' Report is
consistent with the financial statements. In addition we report to you, if in
our opinion, the company has not kept proper accounting records, if we have not
received all the information we require for our audit, or if information
specified by law regarding directors' remuneration and transactions with the
group is not disclosed.
We read other information contained in the Annual Report and consider whether it
is consistent with the audited financial statements. This other information
comprises the Directors' Report, Chairman's Statement and Operational and
Financial Review. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the
financial statements. Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the group's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
• the financial statements give a true and fair view, in accordance
with International Financial Reporting Standards as adopted by use by the
European Union, of the state of the group's and company's affairs as at 31
December 2006 and of the group's result for the period then ended;
• the financial statements have been properly prepared in accordance
with the Companies Act 1985; and
• the information given in the Directors' Report is consistent with
the financial statements.
Mazars LLP
Chartered accountants
Registered auditors
3 Sheldon Square
London
W2 6PS
26 June 2007.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Period 10.10.05
to 31.12.05
Year Ended
31.12.06
Notes £ £
CONTINUING OPERATIONS
Revenue 2 - -
Administrative expenses (807,565) -
OPERATING LOSS (807,565) -
Finance income 4 117,342 -
LOSS BEFORE TAX 5 (690,223) -
Tax 6 (241) -
LOSS FOR THE YEAR (690,464) -
Attributable to: (690,464) -
Equity holders of the parent
Earnings per share expressed in pence per 8
share:
Basic (0.72) -
Diluted (0.72) -
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2006
Year Ended Period 10.10.05
31.12.06 to 31.12.05
Notes £ £
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 10 69,473 -
Intangible assets 11 4,464,040 -
Trade and other receivables 13 170,076 -
4,703,589 -
CURRENT ASSETS
Trade and other receivables 13 40,818 -
Cash and cash equivalents 14 3,456,183 -
3,497,001 -
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 15 176,934 -
Tax payable 241 -
177,175 -
NET CURRENT ASSETS 3,319,826 -
NET ASSETS 8,023,415 -
SHAREHOLDERS' EQUITY
Called up share capital 18 1,298,118 -
Share premium 19 7,306,486 -
Legal reserves 19 60 -
Share options reserve 19 109,275 -
Retained earnings 19 (690,524) -
Total shareholders' equity 8,023,415 -
TOTAL EQUITY 8,023,415 -
The financial statements were approved by the Board of Directors on 26 June
2007.
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2006
Year Ended Period 10.10.05
31.12.06 to 31.12.05
Notes £ £
ASSETS
NON-CURRENT ASSETS
Intangible assets 11 234,807 -
Investments 12 3,606,021 -
Trade and other receivables 13 1,018,330 -
4,859,158 -
CURRENT ASSETS
Trade and other receivables 13 22,345 -
Cash and cash equivalents 14 3,405,764 -
3,428,109 -
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 15 166,707 -
NET CURRENT ASSETS 3,261,402 -
NET ASSETS 8,120,560 -
SHAREHOLDERS' EQUITY
Called up share capital 18 1,298,118 -
Share premium 19 7,306,486 -
Share options reserve 19 109,275 -
Retained earnings 19 (593,319) -
Total shareholders' equity 8,120,560 -
TOTAL EQUITY 8,120,560 -
The financial statements were approved by the Board of Directors on 26 June
2007.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Period
Year Ended 10.10.05 to
31.12.06 31.12.05
Notes £ £
Cash flows from operating activities
Loss before tax (690,223) -
Share based payment 109,275 -
Depreciation charges 4,332 -
Exchange rate differences 11,310 -
Profit on disposal of fixed assets (690) -
Finance income (117,342) -
(683,338) -
Increase in trade and other receivables (208,454) -
Increase in trade and other payables 176,934 -
Gross cash payments from operations (714,858) -
Net cash from operating activities (714,858) -
Cash flows from investing activities
Purchase of subsidiaries (55,570) -
Purchase of intangible fixed assets (234,807) -
Purchase of tangible fixed assets (74,736) -
Increase in exploration costs (354,327) -
Sale of tangible fixed assets 4,710 -
Interest received 117,342 -
Net cash from investing activities (597,388) -
Cash flows from financing activities
Proceeds from share issue 5,545,000 -
Less issue costs (776,571) -
Net cash from financing activities 4,768,429 -
Increase in cash and cash equivalents 3,456,183 -
Cash and cash equivalents at beginning of year 1 - -
Cash and cash equivalents at end of year 1 3,456,183 -
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
1. CASH AND CASH EQUIVALENTS
The amounts disclosed on the cash flow statement in respect of cash and cash
equivalents are in respect of these balance sheet amounts:
Period ended 31 December 2006
31.12.06 1.1.06
£ £
Cash and cash equivalents 3,456,183 -
Period ended 31 December 2005
Cash and cash equivalents - -
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Period
Year Ended 10.10.05 to
31.12.06 31.12.05
Notes £ £
Cash flows from operating activities
Loss before tax (593,319) -
Share based payment 109,275 -
Finance income (117,184) -
(601,228) -
Increase in trade and other receivables (744,719) -
Increase in trade and other payables 166,707 -
Gross cash payments from operations (1,179,240) -
Cash flows from investing activities
Purchase of intangible fixed assets (234,807) -
Purchase of fixed asset investments (65,802) -
Interest received 117,184 -
Net cash from investing activities (183,425) -
Cash flows from financing activities
Proceeds from share issue 5,545,000 -
Less issue costs (776,571) -
Net cash from financing activities 4,768,429 -
Increase in cash and cash equivalents 3,405,764 -
Cash and cash equivalents at beginning of year 1 - -
Cash and cash equivalents at end of year 1 3,405,764 -
NOTES TO THE COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
1. CASH AND CASH EQUIVALENTS
The amounts disclosed on the cash flow statement in respect of cash and cash
equivalents are in respect of these balance sheet amounts:
Period ended 31 December 2006
31.12.06 1.1.06
£ £
Cash and cash equivalents 3,405,764 -
Period ended 31 December 2005
Cash and cash equivalents - -
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2006
1. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards and with those parts of the Companies Act 1985
applicable to companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention.
The accounts have been rounded to the nearest pound.
Basis of consolidation
The group accounts consolidate the accounts of its wholly owned subsidiaries;
Minerales Morazan S.A. De C.V. and Condor S.A. under the acquisition method. The
financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date control ceases.
Acquisitions
On the acquisition of a subsidiary, fair values are attributed to the group's
share of net assets. Where the cost of acquisition exceeds the values
attributable to such net assets, the difference is treated as purchase goodwill,
which is capitalised and amortised over its estimated useful life. Where the
cost of acquisition is less than the value attributable to such net assets, the
difference is treated as negative goodwill and is recognised immediately in the
income statement.
Property, plant and equipment
Property, plant and equipment is stated at cost, or deemed cost less accumulated
depreciation, and any recognised impairment loss.
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
Freehold Property The rental property is being completely refurbished and will be
depreciated over its useful economic life once work is finished.
Plant and machinery - 20% on cost
Fixtures and fittings - 50% on cost
Motor vehicles - 25% on cost
Computer equipment - 50% on cost
Financial instruments
Financial assets and financial instruments are recognised on the group's balance
sheet when the group becomes a party to the contractual provisions of the
instrument.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short-term highly liquid investments that are readily convertible to a known
cash amount and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments issued by the group are classified
according to the substance of contractual arrangements entered into and the
definitions of a financial liability and an equity instrument. An equity
instrument is any contract that evidences a residual interest in the assets of
the group after deducting all of its liabilities.
Equity instruments issued by the company are recorded at the proceeds received,
net of direct costs.
Taxation
Current taxes are based on the results shown in the financial statements and are
calculated according to local tax rules, using tax rates enacted or
substantially enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date.
A deferred tax asset is only recognised when it is more likely than not that the
asset will be recoverable in the foreseeable future out of suitable taxable
profits.
Intangible assets - exploration costs, licences and minerals resources
Exploration expenditure comprises costs which are directly attributable to
researching and analysing data. Licences include the costs incurred in
acquiring mineral rights and, the entry premiums paid to gain access to areas of
interest. Mineral resources include amounts paid to third parties to acquire
interests in existing projects.
When it has been established that a mineral deposit has development potential,
all costs (direct and applicable overhead) incurred in connection with the
exploration and development of the mineral deposits are capitalised until either
production commences or the project is not considered economically viable.
In the event of production commencing, exploration costs, licences and mineral
resources are amortised through administrative expenses, over the expected life
of the mineral reserves on a unit production basis. Other pre-trading expenses
are written off as incurred. Where a project is abandoned or is considered to
be of no further interest, the related costs are written off.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the
rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the
date of transaction. Exchange differences are taken into account in arriving at
the operating result.
On consolidation of a foreign operation, assets and liabilities are translated
at the balance sheet rates, income and expenses are translated at rates ruling
at the transaction date. Exchange differences on consolidation are taken to the
income statement.
Share based payments
The fair value of equity instruments granted to directors, employees and
consultants is charged to the income statement with a corresponding increase in
equity. The fair value of share options is measured at grant date, using the
Black-Scholes model, and spread over the period during which the employee
becomes unconditionally entitled to the award. The charge is adjusted to reflect
the number of shares or options that vest, except where forfeiture is due to
criteria, as stated in the share option agreements.
2. REVENUE AND SEGMENTAL REPORTING
The group has not generated any revenue during the period.
The group's operations are located in England, El Salvador and Nicaragua.
The following is an analysis of the carrying amount of segment assets, and
additions to plant and equipment, analysed by geographical area in which the
assets are located.
Carrying amount of Additions to Depreciation Carrying amount of Result for the
segment assets property, plant & charged in the year liabilities year
equipment and
intangible assets
Year ended Period Year ended Period Year Period Year Period Year Period
ended ended ended ended ended ended ended ended
31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05
£ £ £ £ £ £ £ £ £ £
England 3,872,977 - 234,807 - - - 166,707 - (593,319) -
El Salvador 2,414,781 - 2,219,887 - 3,906 - 9,709 - (57,063) -
Nicaragua 1,912,832 - 1,806,131 - 426 - 759 - (40,082) -
Total 8,200,590 - 4,260,825 - 4,332 - 177,175 - (690,464)
3. EMPLOYEES AND DIRECTORS
Period 10.10.05
Year Ended to
31.12.06 31.12.05
£ £
Wages and salaries 51,657 -
Social security costs 2,259 -
53,916 -
The average monthly number of group and company employees during the year
was as follows:
Group Company
Year ended Period ended Year ended Period ended
31.12.06 31.12.05 31.12.06 31.12.05
£ £ £ £
Directors' 3 2 3 2
Employees 34 - 1 -
37 2 4 2
Salary payments Termination payment Personal Related party Total
consultancy payment payments *
Year Period Year Period Year Period Year Period Year Period
ended ended ended ended ended ended ended ended ended ended
31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05 31.12.06 31.12.05
£ £ £ £ £ £ £ £ £ £
T Wall - - - - - - 21,000 - 21,000 -
M Child 7,000 - - - - - 43,475 - 50,475 -
N Ferguson 14,000 - - - 33,785 - 66,664 - 114,449 -
K Eckhof 7,000 - - - - - 14,000 - 21,000 -
S Dobson 12,000 - 36,000 - - 24,000 - 72,000 -
Total 40,000 - 36,000 - 33,785 - 169,139 - 278,924 -
* = Refer to note 22 for listing of related parties
The Company has adopted a discretionary bonus scheme by which bonuses are paid
to directors, employees and consultants and used by the recipients to subscribe
for new Ordinary Shares at market value. A total of up to 10 percent of the
total share capital in issue from time to time will be made available for this
purpose without the Board having first obtained the consent of the Shareholders.
The amount of any bonus payable under this scheme will be subject to approval by
the remuneration committee. At the year end no bonuses were paid.
The interests of the Directors in options to subscribe for ordinary shares of
the company were:
Exercise Latest As at 1 Granted Lapsed As at 31
price (p) exercise January 2006 during the in the December
date year year 2006
DIRECTORS
M L Child 15 30 May 2011 Nil 1,250,000 Nil 1,250,000
N M Ferguson 15 30 May 2011 Nil 4,500,000 Nil 4,500,000
K P Eckhof 15 30 May 2011 Nil 1,750,000 Nil 1,750,000
4. NET FINANCE INCOME
Period 10.10.05
Year Ended to
31.12.06 31.12.05
£ £
Finance income:
Deposit account interest 117,342 -
5. LOSS BEFORE TAX
The loss before tax is stated after charging/(crediting):
Period 10.10.05
Year Ended to
31.12.06 31.12.05
£ £
Depreciation - owned assets 4,332 -
Auditor's remuneration 14,100
Non-audit fees 34,768
Profit on disposal of fixed assets (690)
Foreign exchange differences 61,633 -
6. TAX
Analysis of the tax charge
Period 10.10.05
Year Ended to
31.12.06 31.12.05
£ £
Current tax:
Tax 241 -
Total tax charge in income statement 241 -
Reconciliation of the tax charge
The tax assessed for the period is different than the standard rate of
corporation tax in the UK (19%). The differences are explained below:
Year Ended 31.12.06
£
Loss before tax (690,464)
Loss before tax multiplied by standard rate of
Corporation tax in the UK of 19% (131,188)
Effects of:
Deferred tax not provided 131,188
Tax charge relating to Minerales Morazan S.A 241
Total tax charge in income statement 241
7. LOSS OF PARENT COMPANY
As permitted by Section 230 of the Companies Act 1985, the profit and loss
account of the parent company is not presented as part of these financial
statements. The parent company's loss for the financial year was (£593,319)
(2005 - £nil).
8. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
A reconciliation is set out below:
Basic EPS
Loss for the period (690,494)
Weighted average number of shares 95,744,592
Loss per share (in pence) (0.72)
In accordance with IAS 33 and as the group has reported a loss for the period,
the share options are not dilutive.
9. STATEMENT OF CHANGES IN EQUITY
Group
Profit and Share capital Share Share option Total
loss premium reserve
reserve
£ £ £ £ £
At 1 January 2006 - - - - -
Loss for the period (690,464) - - - (690,464)
New shares issued - 1,298,118 8,083,057 - 9,381,175
Transaction costs - - (776,571) - (776,571)
Share based payment - - - 109,275 109,275
(690,464) 1,298,118 7,306,486 109,275 8,023,415
Profit and Share capital Share Share option Total
loss premium reserve
reserve
£ £ £ £ £
Company
At 1 January 2006 - - - - -
Loss for the period (593,319) - - - (593,319)
New shares issued - 1,298,118 8,083,057 - 9,381,175
Transaction costs - - (776,571) - (776,571)
Share based payment - - - 109,275 109,275
(593,319) 1,298,118 7,306,486 109,275 8,120,560
10. PROPERTY, PLANT AND EQUIPMENT
Group
Freehold Plant and Fixtures and
property machinery fittings
£ £ £
COST
Additions 951 8,707 6,984
Exchange differences - - (149)
At 31 December 2006 951 8,707 6,835
DEPRECIATION
Charge for year - - 2,189
At 31 December 2006 - - 2,189
NET BOOK VALUE
At 31 December 2006 951 8,707 4,646
Motor vehicles Computer
equipment
Totals
£ £ £
COST
Additions 54,486 3,745 74,873
Exchange differences (919) - (1,068)
At 31 December 2006 53,567 3,745 73,805
DEPRECIATION
Charge for year 1,762 381 4,332
At 31 December 2006 1,762 381 4,332
NET BOOK VALUE
At 31 December 2006 51,805 3,364 69,473
11. INTANGIBLE ASSETS
Group
Exploration Mineral Licences Total
costs resources
£ £ £ £
COST
Additions 628,790 3,600,443 234,807 4,464,040
At 31 December 2006 628,790 3,600,443 234,807 4,464,040
NET BOOK VALUE
At 31 December 2006 628,790 3,600,443 234,807 4,464,040
Company
Licences
£
COST
Additions 234,807
At 31 December 2006 234,807
NET BOOK VALUE
At 31 December 2006 234,807
The JORC inferred reserves of the company are as follows:
Gold 467,000 contained metal ounces
Silver 18.4m contained metal ounces.
12. INVESTMENTS
Company
Shares in group
undertakings
£
COST
Additions 3,606,021
At 31 December 2006 3,606,021
NET BOOK VALUE
At 31 December 2006 3,606,021
The company's investments at the balance sheet date in the share capital of
companies include the following:
Subsidiaries
Name Country of Interest Class of Nature of the Share capital Profit/
shares business and reserves (loss) for
incorporation the year
£ £
Minerales El Salvador 100.00% Ordinary Gold and 4,209 211
Morazan S. A. silver
de C. V. exploration
Condor S. A. Nicaragua 100.00% Ordinary Gold and (32,454) (34,049)
silver
exploration
On 24 March 2006 the company entered into an Asset Sale Agreement with Condor
Resources Limited, a company incorporated in Australia, for the acquisition of
the assets held by that company, which comprised other receivables and
investments in subsidiaries.
The acquisition of the net assets of those subsidiaries have been accounted for
in accordance with IFRS3, Business Combinations, using the purchase method. The
remainder of the assets acquired were accounted for at their fair value.
The total consideration of the Asset Sale Agreement was paid by way of a cash
payment amounting to £50,000 and the issue of 35,383,230 Ordinary Shares at 10p
each. The fair value of the net assets acquired with the subsidiaries was as
follows:
Minerales Morazan Condor S. A. Total Assets
S.A. de C. V.
£ £ £
Property, plant & equipment 8,106 - 8,106
Mineral resources 1,800,221 1,800,222 3,600,443
Exploration costs 274,463 - 274,463
Trade and other receivables 10,576 1,595 12,171
Cash and cash equivalents 10,232 - 10,232
Trade and other payables (299,394) (299,394)
3,606,021
Satisfied by:
Cash payment 50,000
Issue of 35,383,230
Ordinary
Shares at 10p each 3,538,323
Transaction costs 17,698
3,606,021
13. TRADE AND OTHER RECEIVABLES
Group Company
31.12.06 31.12.05 31.12.06 31.12.05
£ £ £
Current:
Other debtors 25,222 - 19,995 -
Other taxes 5,474 - - -
Prepayments 10,122 - 2,350 -
40,818 - 22,345 -
Non-current:
Amounts owed by group undertakings - - 947,771 -
Loans receivable 36,534 - - -
Accounts receivable 43,613 - - -
Other debtors 89,929 - 70,559 -
170,076 - 1,018,330 -
Aggregate amounts 210,894 - 1,040,675 -
14. CASH AND CASH EQUIVALENTS
Group Company
31.12.06 31.12.05 31.12.06 31.12.05
£ £ £
Bank accounts 3,456,183 - 3,405,764 -
15. TRADE AND OTHER PAYABLES
Group Company
31.12.06 31.12.05 31.12.06 31.12.05
£ £ £
Current:
Trade payables 121,736 - 120,727 -
Social security and other taxes 6,012 - - -
Other creditors 10,602 - 10,602 -
Accrued expenses 38,584 - 35,378 -
176,934 - 166,707 -
16. LEASING AGREEMENTS
Group
Non-cancellable operating leases
31.12.06 31.12.05
£ £
Within one year 16,076 -
Between one and five years 8,737 -
24,813 -
The group lease all of its properties, the terms of which vary from country to
country.
Company
Non-cancellable operating leases
31.12.06 31.12.05
£ £
Within one year 4,200 -
17. CAPITAL COMMITMENTS
Group Company
31.12.06 31.12.05 31.12.06 31.12.05
£ £ £
Within one year 344,546 - 344,546 -
Between one and five years 3,866,571 - 3,866,571 -
4,211,117 - 4,211,117 -
Capital Commitments is comprised of licence option fees, land surface taxes,
exploration and development costs made under two licence option agreements
entered into in Nicaragua.
This assumes that all licences in Nicaragua covered by option agreements are
considered viable by the board, and all future option payments to maintain
Condor's interest in these projects are maintained. The option agreements in
place, however, permit Condor to discontinue exploration and development of any
licence at any time at its sole discretion; with concurrent reduction in
liability without penalty should the management believe this licence will not
lead to economic exploitation.
18. CALLED UP SHARE CAPITAL
Authorised Class: Nominal 31.12.06 31.12.05
Number: value: £ £
1,000,000,000 Ordinary shares 1p 10,000,000 1,000,000
2005: 1,000,000,000 Ordinary shares of 0.1p each
Alloted and
issued Class: Nominal 31.12.06 31.12.05
Number: value: £ £
129,811,753 Ordinary shares 1p 1,298,118
2005: 2 Ordinary shares of 0.1p each
The following shares were allotted at par during the period:
39,999,998 Ordinary shares of 1p each
The following were allotted during the period at a premium as shown below:
89,811,753 Ordinary shares of 1p each at 10p per share
On 17 January 2006 the nominal capital was increased by £9,000,000 and on the
same date it was consolidated on from £10,000,000 divided into 10,000,000,000
ordinary shares of £0.001 each to £10,000,000 divided into 1,000,000,000
ordinary shares of £0.01 each.
19. RESERVES
Group
Retained Share Legal Share option Total
earnings premium reserve reserve
£ £ £ £ £
Deficit for the year (690,464) - - - (690,464)
Transfer to legal reserve (60) - 60 - -
Cash share issue - 7,306,486 - - 7,306,486
Share based payment - - - 109,275 109,275
At 31 December 2006 (690,524) 7,306,486 60 109,275 6,725,297
Retained Share Share option Total
earnings premium reserve
£ £ £ £
Company
Deficit for the year (593,319) - - (593,319)
Cash share issue 7,306,486 - 7,306,486
Share based payment - - 109,275 109,275
At 31 December 2006 (593,319) 7,306,486 109,275 6,822,442
Retained earnings represent the cumulative net gains and losses recognised in
the consolidated income statement.
Share premium reserve represents the amounts subscribed for share capital in
excess of the nominal value of the shares issued, net of cost of issue.
Legal reserve represents the El Salvadorean statutory reserve calculated on
results declared.
Share options reserve represents the cumulative fair value of share options
granted.
20. RECONCILIATION OF MOVEMENTS IN RESERVES
Group
31.12.06 31.12.05
£ £
Loss for the financial year (690,464) -
Share capital 1,298,118 -
Share premium 7,306,486 -
Share option 109,275 -
Net addition to reserves 8,023,415 -
Opening reserves - -
Closing reserves 8,023,415 -
Company
31.12.06 31.12.05
£ £
Loss for the financial year (593,319) -
Share capital 1,298,118 -
Share premium 7,306,486 -
Share option 109,275 -
Net addition to reserves 8,120,560 -
Opening reserves - -
Closing reserves 8,120,560 -
21. EQUITY-SETTLED SHARE OPTION SCHEME
The company has a share option scheme for directors, employees and
consultants to the group.
Details of the share options outstanding during the year are as
follows:
1-Jan-06 31-Dec-06
Date of No. of Issued in Forfeit or No. shares Date from which Lapse date Price
Grant shares year lapsed in options are first per
year exercisable share
24/03/2006 0 15,000,000 3,250,000 11,750,000 31-May-06 30-May-11 15p
The estimated fair value of the options granted in 2006 is £109,275 and has been
fully recognised within administration expenses. This fair value has been
calculated using the Black-Scholes option pricing model. The inputs into the
model were as follows:
2006
Weighted average share price 6.0p
Weighted average exercise price 15.0p
Expected volatility 45%
Expected life 4
Risk free rate 5.9%
Expected dividend yield Nil
Expected volatility was determined with reference to the historical volatility
of the company's share price. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations. The
weighted average remaining contractual life of the share options outstanding at
the end of the period is 4.5 years.
22. RELATED PARTY TRANSACTIONS
During the year the company received consultancy advice for an amount of £66,664
from Ridgeback Holdings Pty Limited, a company incorporated in Australia in
which Nigel Ferguson, a director, has an interest. There was £nil outstanding at
the year end.
During the year the company received consultancy advice for an amount of £14,000
from Iguana Resources Pty Limited, a company incorporated in Australia, in which
Klaus Eckhof, a non-executive director, has an interest. There was £nil
outstanding at the year end.
During the year the company received consultancy advice for an amount of £43,475
from Axial Associates Limited, a company incorporated in England and Wales, in
which Mark Child, a non-executive director, has an interest. There was £nil
outstanding at the year end.
During the year the company received consultancy advice for an amount of £24,000
from Fortview Capital Management Pty Limited, a company incorporated in
Australia, in which Stephen Dobson, a director, has an interest. There was £nil
outstanding at the year end.
During the year the company received consultancy advice for an amount of £21,000
from Horseford Limited, a company incorporated in England and Wales, in which
Tim Wall, a director, has an interest. There was £nil outstanding at the year
end.
23. NON-CASH TRANSACTIONS
During the year, the group acquired Minerales Morazan S. A. de C. V. and Condor
S. A. The consideration was partly satisfied by the issue of 35,383,230 ordinary
shares of 1p each. This is the only major non-cash transactions.
24. CONTROLLING PARTY
There is no ultimate controlling party.
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2006, but is derived from
those accounts. Statutory accounts for the period have been delivered to the
Registrar of Companies.
Copies of the accounts will be posted to shareholders very shortly.
- Ends -
For further information please visit www.condorresourcesplc.com or enquire to:
Condor Resources Plc Mark Child, Chairman
+44 20 7408 1067
Nigel Ferguson, CEO
+44 20 7808 7222
Nabarro Wells & Co. Limited Hugh Oram
+44 20 7710 7400
Anthony Rowland
+44 20 7710 7419
Mirabaud Securities Limited Rory Scott
+44 20 7878 3360
Parkgreen Communications Limited Clare Irvine
Brendan McNamara
+44 (0) 20 7851 7480
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 10 minutes ago Ricardo
- 11 minutes ago F&C Investment Trust
- 12 minutes ago F&C Investment Trust
- 36 minutes ago K3 Business Technology Group
- 39 minutes ago Panther Metals