ASCOT MINING PLC
INTERIM RESULTS TO 31 MARCH 2009
The Directors of the Company append below an update report by the Group Chief
Executive and interim accounts which have been reviewed by the Company's
auditor.
The Directors of the Company accept responsibility for the content of this
announcement.
Contact:
Damien Daly
(UK) + 44 (0) 7880 55 46 47
info@ascotmining.com
ASCOT MINING PLC
INTERIM FINANCIAL INFORMATION AND RESULTS FOR THE SIX MONTHS TO
31 MARCH 2009
ASCOT MINING PLC
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2009
Directors Report
The Directors of Ascot Mining Plc ("the Group") announce the unaudited
results for the six months to 31 March 2009. The net loss before taxation of
GBP £ 602,032 covers the six months trading results of the Group from 1
October 2008 to 31 March 2009. During this period the Group has seen
significant progress in the development of Veritas Gold's Chassoul mine, the
advancement of Veritas Mining's operations near Las Juntas and a long sought
after acquisition of a joint Venture in La Toyota, a highly desirable gold
concession in the area of the Company's other operations.
Since listing on the PLUS Markets in April 2008, the Company has overcome
many challenges. In the initial period, prices of materials were very high,
equipment was difficult to procure and labour was expensive. Subsequently,
the ongoing international financial crisis and the changed ratio of GBP to
USD made it very difficult to obtain the funding necessary to bring the
Company's properties into production. Despite these challenges the Company
has continued to make good progress in developing its operations.
Significant events
During the period under review the Directors are pleased to report that the
following significant events have been achieved:
Approximately GBP 7,600,000 in equity funding raised in total to date.
10 November 2008: Cajeta Vein was intercepted exposing high grades at
Chassoul Mine.
15 December 2008: Ascot Mining Plc was accepted for continuously trading on
the European electronic trading platform Xetra (R) (Symbol: AM3.DE).
24 December 2008: Ascot Mining Plc's General Meeting took place and David
B. Jackson was re-elected a director of the Company.
26 January 2009: Sponsored by Bank of New York Mellon; Ascot establishment
of a Level-1 American Depositary Receipt (ADR) program trading on the US over-
the-counter (OTC) market.
Overview:
Ascot Mining PLC ("Ascot") is developing and rehabilitating previously
producing gold mines in Costa Rica. It is close to producing gold at its
three wholly owned subsidiaries, when they will generate substantial early
cash flow. These are:
Veritas Gold CR, S.A. - Chassoul Gold Mine.
Veritas Mining CR, S.A. - Tres Hermanos, El Recio and Boston.
Veritas Resources CR, S.A. - La Toyota Mine Joint Venture.
The board of Ascot prides itself on its prudent use of funds. However, last
year, the Company, along with the rest of the mining sector, was hit by
steep rises in raw materials, fuel and other costs that far exceeded initial
projections requiring additional funding to be raised. The Company is now
well positioned to speed up the move to Ascot becoming a gold producer with
a significant cash flow.
Update on Operations:
Veritas Gold: Chassoul Mine:
The development of the Chassoul Mine is significantly advanced and the
Company is currently developing sufficient tonnage of ore ahead of
production.
Once the mill circuit has been balanced, daily gold production is estimated
at between 25 to 30 oz per day. Independent assays have officially certified
results of up to 106.75 grams of gold or 3.43 oz per ton, which are in the
upper levels of the expected range.
The contract for lining the tailings pond has been negotiated. Once the
liner is installed and the refurbished crusher is delivered to the site the
mill will be fully operational.
Veritas Mining: Tres Hermanos - El Recio - Boston Mines.
Tres Hermanos, El Recio and the nearby Boston concession consist of a series
of mines with tremendous scope to significantly increase the already known
resources. Records suggest an average mining grade of 0.3 to 1.00 oz/ton
can be expected, plus bonanza type chutes with far higher grades that are
well documented locally.
Gold production is planned to begin in 2009 at 30 to 35 oz daily based on
the mill handling 50 tonnes per day.
Power is available from a nearby existing hydroelectric power line. The
Costa Rican Government's mining department has Ascot's proposal whereby
tailings will be neutralized and pumped underground. This technique is
environmentally beneficial, as it will stabilize former underground
workings, and it is also cost effective.
Production will be boosted by development of the nearby El Recio concession
which is a near-surface resource of 22,500 ounces of gold with an estimated
value of US$18,000,000 (at US$800/oz).
Detailed satellite imaging is currently being interpreted by the Company's
consultants to identify further drill targets. A drilling program is planned
to locate other as yet undiscovered gold veins and expand the known
resources.
Veritas Resources: La Toyota Mine Joint Venture.
La Toyota is readily accessible, via paved roads, from the Company's other
operations at Tres Hermanos, El Recio, Boston and Chassoul.
There are four parallel veins approximately 300 meters apart on La Toyota
concession. The initial development will be of the Toyota vein which is 4
meters wide near surface narrowing to 1.5 meters nominally about 10 meters
below.
This vein extends for more than 1 kilometre and its horizontal limit has not
yet been fully established. According to the Mining Department of the Costa
Rica Government, the Toyota vein hosts "proven but not yet 43-101 compliant"
reserves of 666,190 tons at an average grade of 0.48 oz/ton or 319,770 oz of
gold.
The concession is permitted for 150 metric tonnes per day of mill
throughput. The initial mill capacity will be 50 metric tonnes per day,
increasing in two planned stages to full capacity. Mill recovery, after
stabilizing the circuit, will be in the order of 92%.
Assuming an average grade of 0.48 oz/tonne, the daily production will be 18
to 20 oz/day. Once the mine has been developed to a stage where 150 tonnes
per day of ore can be delivered to the mill on a regular basis, mill
capacity will be increased to permitted levels.
Assuming the same parameters as above, the expected production would be 55
oz/day. (50% to Veritas Resources).
Summary:
Despite intense pressure, Ascot has resisted several proposals for
discounted and dilutive financing. While the effect has been to somewhat
delay its production schedule it has enabled the Company to maintain future
shareholder value.
The Company is now on a much stronger footing allowing us to achieve our
objectives whilst potentially rewarding our investors with returns
substantially in excess of other investment options. Once processing
operations commence, Ascot's focus will be to grow its production toward its
declared objective of 100,000 ounces per year.
The Company is now significantly advanced in its planned operations. It has
managed to increase substantially the gold resources under its control and
now has in excess of 656,000 oz. of Gold with the expectation that this will
further increase.
Statements for the six-month period have been reviewed by the Group's
auditors.
Respectfully,
David B Jackson
Group Chief Executive
Dated: 29 June 2009
ASCOT MINING PLC
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2009
Unaudited Audited Unaudited
Six Months Year Ended Six Months
Notes Ended 31 Mar 30 Sept Ended 31 Mar
2009 2008 2008
£ £ £
Revenue - 100,185 46,880
Cost of sales - (144,910) (196,656)
Gross loss - (44,725) (149,776)
Distribution (11,259) (1,795) -
costs
Administration (590,779) (857,153) (300,135)
expenses
Other operating 69 1,710 -
income
Operating loss (601,969) (901,963) (449,911)
Finance costs (63) (486) -
Loss before (602,032) (902,449) (449,911)
taxation
Taxation - - -
Loss after taxation (602,032) (902,449) (449,911)
Earnings per
share:
Loss per share (2.22)p (4.5)p (1.9)p
Fully diluted (2.22)p (4.5)p (1.9)p
loss per share
ASCOT MINING PLC
CONSOLIDATED BALANCE SHEETS
FOR THE SIX MONTHS ENDED 31 MARCH 2009
Group Group Group
Unaudited as Audited Unaudited as
ASSETS at as at at
Notes 31 Mar 2009 30 Sep 2008 31 Mar 2008
£ £ £
Non-Current Assets 2
Goodwill 3,990,245 3,990,245 4,078,317
Property, plant and 3,261,732 3,126,232 3,021,907
equipment
Development costs 3 1,907,437 1,421,231 859,153
Total Non-Current 9,159,414 8,537,708 7,959,377
Assets
Current assets
Trade and other 130,992 124,676 145,719
receivables
Cash at bank and in 260,523 31,953 440,695
hand
Assets held for
resale - - -
Total current 391,515 156,629 586,414
assets
Total Assets 9,550,929 8,694,337 8,545,791
EQUITY AND
LIABILITIES
Capital and
reserves
Called up share 5 293,011 249,447 283,414
capital
Share premium 6 7,347,996 6,123,727 5,635,373
account
Retained earnings 6 (1,392,011) (789,979) (454,911)
Total Equity 6,248,996 5,583,195 5,463,876
Non- Current
Liabilities
Borrowings 2,643,477 2,679,072 2,770,788
Current Liabilities 4 658,456 432,070 311,127
Total Liabilities 3,301,933 3,111,142 3,081,915
TOTAL EQUITY AND 9,550,929 8,694,337 8,545,791
LIABILITIES
ASCOT MINING PLC
NOTES TO THE INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 MARCH 2009
1. Principal Accounting Policies
1.1 Accounting Convention
The interim financial information has been prepared under the historical
cost convention.
1.2 Compliance with Accounting Standards
The interim financial information has been prepared in accordance with
applicable International Financial Reporting Standards (IFRS) as adopted by
the European Union and applied in accordance with the provisions of the
Companies Act 2006.
1.3 Basis of consolidation
The group interim financial information comprises the interim financial
information for Ascot Mining plc and all of its subsidiaries up to 31 March
2009.
The results of operations of subsidiary undertakings are included in the
consolidated interim financial information as from the date of acquisition,
which is the date on which control of the acquired subsidiary is
effectively transferred to the buyer. The results of operations of
subsidiary undertakings disposed of are included in the consolidated income
statement until the date of disposal, which is the date on which the parent
ceases to have control of the subsidiary undertaking. Intragroup balances
and intragroup transactions and resulting unrealised profits are eliminated
in full. Unrealised losses resulting from intragroup transactions are also
eliminated unless cost can be recovered.
1.4 Revenue recognition
Revenue is derived wholly from its Costa Rican subsidiaries, Veritas
Mining, CR, S.A. and Veritas Gold CR, S.A.
Revenue represents amounts receivable for goods net of VAT and trade
discounts.
1.5 Goodwill
Goodwill arising on an acquisition represents the excess of the cost of the
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities acquired as at the date of the exchange transaction.
Goodwill is initially measured at cost and is subsequently measured at cost
less any accumulated impairment losses. Goodwill is tested annually for
impairment or more regularly where an indication of impairment exists.
When there is impairment, goodwill is written down immediately to its
recoverable amount and the impairment losses are recognised in the income
statement. Impairment losses are not subsequently reversed.
1.6 Development cost
Development costs are amortised over 5 years from the commencement of
production.
1.7 Foreign currency
Transactions in foreign currencies are translated into sterling at the
rates of exchange ruling on the date on which transactions occur. At the
balance sheet date foreign currency monetary items are translated into
sterling at the exchange rate ruling at the balance sheet date. Foreign
exchange differences arising on translation are recognised in the income
statement in the period in which they arise. At the balance sheet date,
non-monetary items, which are carried in terms of historical denominated
foreign currency, are reported using the exchange rate at the date of the
transaction. Non-monetary items, which are carried at fair value
denominated in a foreign currency, are reported using the exchange rate
that existed at the date when the values were determined.
2. Non-Current Assets
31 March 30 Sept 31 March
2009 2008 2008
£ £ £
Intangibles
Goodwill 3,990,245 3,990,245 4,078,317
Property, plant and
equipment
Chassoul Mine 2,812,420 2,812,420 2,908,700
Chassoul Tailings Pond 215,182 73,313 -
Mining equipment 177,852 179,088 69,288
Vehicles 50,616 56,010 39,696
Office furniture and 5,662 5,401 4,221
equipment
3,261,732 3,126,232 3,021,907
3. Other Assets
31 March 30 Sept 31 March
2009 2008 2008
£ £ £
Development costs 1,907,437 1,421,231 859,153
1,907,437 1,421,231 859,153
As an incentive for investment in Costa Rica, the government granted the
mining industry the right to capitalise development costs, costs incurred
to start production and rehabilitate production facilities, and then
amortise these costs over five years from the commencement of production.
4. Current Liabilities
31 March 30 Sept 31 March
2009 2008 2008
£ £ £
Trade creditors 41,320 24,759 307,044
Other creditors 617,136 407,311 4,083
658,456 432,070 311,127
5. Capital and Reserves
31 March 30 Sept 31 March
2009 2008 2008
£ £ £
Ordinary Shares
Authorised
195,000,000 Ordinary shares 1,950,000 1,950,000 1,950,000
of 1p each
Allotted, called up and
fully paid
29,301,164 Ordinary shares 293,011 249,447 233,414
of 1p each
Redeemable preference
shares
Authorised, allotted,
called up and fully paid
50,000 redeemable - - 50,000
preference shares of £1
293,011 249,447 283,414
Options have been granted over 1,500,000 ordinary 1 pence shares on various
terms as described in the respective agreements.
6. Statement of movements on reserves
Share premium Profit
account and loss
account
£ £
Balance at 30 September 6,123,727 (789,979)
2008
Loss for the period - (602,032)
Premium on shares issued 1,224,269 -
during the year
Balance at 31 March 2009 7,347,996 (1,392,011)
7. Reconciliation of shareholders' funds
31 March 30 Sept 31 March
2009 2008 2008
£ £ £
Loss for the financial (602,032) (902,449) (449,911)
period
Redemption of preference - (50,000) -
share capital
Credit arising on share - 117,470 -
based payment
Proceeds from issue of 1,267,833 6,373,174 5,868,787
shares
Net increase in 665,801 5,538,195 5,418,876
shareholders' funds
Opening shareholders' funds 5,583,195 45,000 45,000
Closing shareholders' funds 6,248,996 5,583,195 5,463,876
8. Post Balance Sheet Events
6 April, 2009: Ascot Mining PLC announces that its wholly owned subsidiary,
Veritas Resources has signed a Joint Venture Agreement with the owner of La
Toyota Gold Concession in Costa Rica.
8 June 2009: Ascot Mining PLC announced that it will sell up to a maximum
of 7,000 Troy ounces of its planned near term production of gold, of which 1,486
ounces of gold has been subscribed for, resulting in non dilutive paid in
proceeds to the Company of US$1,000,885.60.
INTRODUCTION
We have reviewed the accompanying consolidated income statement and
consolidated balance sheet together with accompanying notes for the six
months ended 31 March 2009. Management is responsible for the preparation
and fair presentation of this interim financial information in accordance
with applicable law and International Financial Reporting Standards (IFRSs)
as adopted by the European Union. Our responsibility is to express a
conclusion on this interim financial information based on our review.
SCOPE OF REVIEW
We conducted our review in accordance with International Standard on Review
Engagements 2410 "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity". A review of financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly we do
not express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to
believe that the accompanying preliminary interim financial information does
not give a true and fair review of the financial position of the entity as
at 31 March 2009, and of its financial performance for the six month period
then ended in accordance with IFRSs as adopted by the European Union.
Clarkson Hyde LLP
Chartered Accountants
70 Conduit Street
London W1S 2GF 29 June 2009