Alexander Mining plc ("Alexander" or the "Company") (AIM:AXM)(TSX VENTURE:AXD),
the AIM-listed mining and mineral processing technologies company, announces its
audited results for the year ended 31 December 2011.
Highlights:
-- In South Africa - AmmLeach(R) copper/cobalt demonstration pilot plant
established in collaboration with MC Process Pty Ltd. in Johannesburg.
-- Pilot plant to be used for testing bulk representative samples from the
Democratic Republic of Congo ('DRC') and elsewhere.
-- First AmmLeach(R) plant in the world to showcase process in two circuits
through to copper and cobalt cathode metal, compared with majority of
DRC cobalt currently produced as an intermediate product.
-- In DRC - Patent for a Method of Ammoniacal Leaching granted and
important progress with copper/cobalt opportunities.
-- In Australia - Method for Leaching of a Copper-containing Ore patent
granted plus favourable testwork for Altona Mining on samples from its
Roseby copper project.
-- In Turkey - Red Crescent Resources to investigate AmmLeach(R) technology
for copper and zinc projects.
-- In Guatemala - AmmLeach(R) second stage testwork discussions with
Firestone Ventures.
Chairman's Statement
I am pleased to report that since my statement in last year's annual report,
Alexander has made steady progress in advancing its plan to commercialise its
proprietary breakthrough AmmLeach(R) mineral processing technology.
Alexander's technology is applicable to the extraction of several important base
metals from high acid consuming ores in many parts of the world. During the
year, we have continued to test samples from a growing number of projects and
engage in discussions with various companies and groups about commercial
adoption of the technology. Because of confidentiality agreements, disclosure
has been restricted to those opportunities where we are able to put the news
into the public domain. However, we can say that based on this work and coupled
with what has been announced, the geographic spread has expanded further to
potentially significant countries and regions of the world.
Importantly, the diversification is not just geographic but also by metal,
covering a range of mineral types. To date, we have tested dozens of different
samples, which has enabled us to create an invaluable database of know-how and
intellectual property. Although some initiatives have advanced less rapidly than
we would have liked due to factors beyond our control, our belief in the
fundamental ability of AmmLeach(R) to transform the extraction process
efficiencies and economics for many base metals is unshakeable.
Two countries with major potential and where we have announced significant
initiatives are Australia and Turkey, the former mainly for copper and the
latter for copper and zinc. In Turkey, we announced Red Crescent Resources
Limited's ('RCR') intention to investigate the use of AmmLeach(R) technology for
the primary recovery of copper and zinc from the oxide mineralisation at several
of its base metals projects in Turkey. At RCR's Hakkari Zinc flagship project in
far south-east Turkey, the use of AmmLeach(R) as part of a full feasibility
study on an optimised process engineering solution for primary zinc metal
production is planned. Also, at RCR's Sivas copper project in north-east central
Turkey, RCR hopes to deliver early production through the potential application
of Alexander's proprietary oxide (AmmLeach(R)) and sulphide (HyperLeach(R))
technologies via technical collaboration.
In Queensland, Australia, we have carried out preliminary amenability testwork
for Altona Mining Limited ('Altona') to investigate the use of AmmLeach(R)
technology for copper recovery at its Roseby Project. Encouraging results have
been obtained and reported to Altona, with the next stage pending discussions
with Altona. We believe that Queensland holds considerable potential for the
application of AmmLeach(R) technology for copper and other base metals.
Moving to Latin America, we have investigated the application of AmmLeach(R)
technology for the owners of several copper and/or zinc oxide deposits. An
ongoing relationship with Firestone Ventures Inc. ('Firestone'), after
favourable initial testwork and scoping studies, has led Firestone to select the
AmmLeach(R) process for its Torlon Hill Zinc-Lead- Silver Oxide Project in
Guatemala. Firestone is in discussions with Alexander on proposals, dependent
upon Firestone funding, for further bench-scale work, column testing and a
demonstration test plant designed to test further the application of the
AmmLeach(R) process to feasibility study standard. This follows on from
Firestone's extensive preliminary metallurgical testwork on the Torlon Hill
deposit using a variety of alternative processing methods. We are delighted that
Firestone has selected AmmLeach(R) as its preferred processing method at Torlon
Hill, as well as for other potential Guatemala sources of feedstock. We greatly
look forward to working with Firestone to advance its projects.
In the Copperbelt of the Democratic Republic of the Congo ('DRC'), one of the
most important copper/cobalt AmmLeach(R) target regions, we have made a
concerted effort to advance the adoption of our technology. In particular, this
included the joint venture partnership agreement announced with Anvil Mining
Limited ('Anvil') on its Mutoshi copper and cobalt project ('Mutoshi') in the
Kolwezi region, DRC. Progress with this opportunity stalled in late 2011 as
Anvil became subject to a takeover bid, now completed successfully, by Minmetals
Resources Limited. We look forward to discussing the Mutoshi project with the
new owners to ascertain their intentions.
We also undertook AmmLeach(R) testwork for Tiger Resources Limited ('Tiger') on
ore from its Kipoi copper/cobalt project in the DRC. This was to investigate the
use of AmmLeach(R) for processing material from the Kipoi Central Stage 1 Pit,
which contains approximately 4,500t of cobalt. In addition, Alexander completed
detailed pilot plant design engineering for the project and submitted this work
to Tiger. We await news of Tiger's intentions for the project.
Separately in the Copperbelt, Alexander has carried out detailed investigations
of other opportunities. This has included collecting samples for testing, under
our supervision, at the premises of MC Process (Pty) Ltd. ('MC Process') in
Johannesburg. MC Process is our partner of choice for Africa and a specialist in
the design and manufacture of minerals processing equipment, especially solvent
extraction plants. MC Process has considerable experience in the Copperbelt and
other countries in Africa and has been working closely with us to investigate
attractive opportunities. The testwork results have been promising and, as part
of our collaboration with MC Process, we have jointly moved to establish a
demonstration pilot plant at MC Process's premises for bigger representative
samples which have been delivered from the DRC. The results from the plant will
be invaluable for design and scale up to a full size commercial plant. In
addition, the plant will be an excellent showcase for our commercialisation
activities.
We have continued to protect rigorously our intellectual property ('IP'). A
major milestone in the protection of the Company's AmmLeach(R) IP was reached
when Alexander's MetaLeach Limited ('MetaLeach') subsidiary was granted a
Standard Patent in Australia for a Method for Leaching of a Copper-containing
Ore. This was particularly noteworthy given Australia's robust patenting regime
and status as having one of the world's biggest mining industries, with
significant potential for our AmmLeach(R) technology. Our first patent for a
Method for Ammoniacal Leaching was granted in the Republic of South Africa in
2010 and Alexander recently announced that it had received notification from the
Ministry of Industry of the DRC that MetaLeach had been granted the same patent
in the DRC. We expect regular news flow about our suite of patents as our other
specific applications progress through the various stages of the patenting
process.
We announced early last year the sale of our wholly owned subsidiary Alexander
Gold Group Limited, including the former Leon copper project. The terms of the
sale were for a down payment of US$400,000 plus 18 monthly payments of
US$100,000, commencing March 2011. According to the schedule, the last payment
due will be in August 2012. As well as making an important contribution to our
overheads, a recent meeting with the Argentinean purchasers confirmed their
intention to bring the project into production using our AmmLeach(R) technology
under licence. This would be particularly gratifying as this is where
AmmLeach(R) Was pioneered. Although the terms of using AmmLeach(R) are subject
to discussion and finalisation, we have already agreed the principle of granting
a licence in exchange for a gross sales royalty and to provide any necessary
technical assistance with the project development.
Outlook
The world economy and financial markets have been highly volatile. Market
turmoil in the second half of 2011, due to the, as yet, unresolved European
sovereign debt crisis, impacted negatively upon base metals prices. However, the
fallout was not as bad as many had feared and the better start to global-stock
markets in 2012 has seen base metals prices in general recover notably from the
August 2011 lows. The reality is that, outside of the troubled Euro Zone, global
growth has held up well, as usual fuelled by China, India and Brazil which are
the key regions for growth in base metals demand.
We look forward to healthy base metals prices in the foreseeable future.
Moreover, given general industry expectations that the demand for the main base
metals, including copper and zinc, will grow significantly in the next few
decades, we believe that the environment in the global mining industry for the
commercial adoption of our technology will be excellent and ultimately provide
significant returns to shareholders. As always, I would like to mark my grateful
appreciation for the continued hard work and dedication of Alexander's
employees, consultants and directors.
Matt Sutcliffe
Executive Chairman
8 May 2012
Consolidated income statement
For the year ended 31 December 2011
2011 2010
GBP '000 GBP '000
----------------------------------------------------------------------------
Continuing operations
Revenue 20 220
Cost of sales - (4)
----------------------------------------------------------------------------
Gross profit 20 216
Administrative expenses (1,386) (1,361)
Research and development expenses (464) (369)
----------------------------------------------------------------------------
Operating loss (1,830) (1,514)
Profit on sale of investment - 370
Finance income 150 50
----------------------------------------------------------------------------
Loss before taxation (1,680) (1,094)
Income tax expense - -
----------------------------------------------------------------------------
Loss for the year from continuing
operations (1,680) (1,094)
Profit for the year from discontinued
operations 1,487 884
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Loss for the year (193) (210)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic and diluted profit/(loss) per
share (pence):
from continuing operations (1.24p) (0.81p)
from continuing and discontinued
operations (0.14p) (0.16p)
from discontinued operations 1.10p 0.65p
----------------------------------------------------------------------------
----------------------------------------------------------------------------
All components of profit or loss for the year are attributable to equity
holders of the parent.
Consolidated statement of comprehensive income
For the year ended 31 December 2011
2011 2010
GBP '000 GBP '000
----------------------------------------------------------------------------
Loss for the year (193) (210)
Other comprehensive income:
Exchange differences realised on
disposal of subsidiary (1,403) -
Exchange differences on translating
foreign operations - (5)
Previously recognised gain on investment
transferred to the income statement - (102)
----------------------------------------------------------------------------
Total comprehensive loss for the year
attributable to equity holders of the
parent (1,596) (317)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated balance sheet
As at 31 December 2011
2011 2010
GBP '000 GBP '000
----------------------------------------------------------------------------
Assets
Property, plant & equipment 29 -
----------------------------------------------------------------------------
Total non-current assets 29 -
----------------------------------------------------------------------------
Trade and other receivables 661 115
Cash and cash equivalents 1,257 2,357
----------------------------------------------------------------------------
1,918 2,472
Assets classified as held for sale - 1,213
----------------------------------------------------------------------------
Total current assets 1,918 3,685
----------------------------------------------------------------------------
Total assets 1,947 3,685
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity attributable to owners of the
parent
Issued share capital 13,599 13,549
Share premium 11,850 11,850
Merger reserve - (2,487)
Share option reserve 535 563
Translation reserve (60) 1,343
Accumulated losses (24,100) (21,485)
----------------------------------------------------------------------------
Total equity 1,824 3,333
----------------------------------------------------------------------------
Liabilities
Current liabilities
Trade and other payables 123 279
Liabilities classified as held for sale - 73
----------------------------------------------------------------------------
Total current liabilities 123 352
----------------------------------------------------------------------------
Total liabilities 123 352
----------------------------------------------------------------------------
Total equity and liabilities 1,947 3,685
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated statement of cash flows
For the year ended 31 December 2011
2011 2010
GBP '000 GBP '000
----------------------------------------------------------------------------
Cash flows from operating activities
Operating loss - continuing operations (1,830) (1,514)
Discontinued operations - costs of
selling subsidiary - (204)
Depreciation and amortisation charge 8 1
Decrease / (increase) in trade and other
receivables 60 (5)
(Decrease) / increase in trade and other
payables (229) 78
Expenses settled through issue of equity 50 -
Share option charge 37 52
----------------------------------------------------------------------------
Net cash outflow from operating
activities (1,904) (1,592)
----------------------------------------------------------------------------
Cash flows from investing activities
Interest received 5 10
Acquisition of property, plant and
equipment (37) -
Proceeds from sale of investment - 470
Proceeds from sale of subsidiary 736 -
----------------------------------------------------------------------------
Net cash inflow from investing
activities 704 480
----------------------------------------------------------------------------
Net decrease in cash and cash
equivalents (1,200) (1,112)
Cash and cash equivalents at beginning
of period 2,454 3,540
Exchange differences 3 26
----------------------------------------------------------------------------
Cash and cash equivalents at end of
period 1,257 2,454
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated statement of changes in equity
For the year ended 31 December 2011
Share
Share Share Merger option
capital premium reserve reserve
GBP '000 GBP '000 GBP '000 GBP '000
--------------------------------------------------------------------------
At 1 January 2010 13,549 11,850 (2,487) 515
--------------------------------------------------------------------------
Accumulated loss for
period - - - -
Exchange difference on
translating foreign
operations - - - -
Realisation of
investment - - - -
--------------------------------------------------------------------------
Total comprehensive
income for the period
attributable to equity
holders of the parent - - - -
--------------------------------------------------------------------------
Share option costs - - - 52
Share options cancelled - - - (4)
--------------------------------------------------------------------------
At 31 December 2010 13,549 11,850 (2,487) 563
--------------------------------------------------------------------------
Accumulated loss for
period - - - -
Exchange difference on
translating foreign
operations - - - -
Realisation of foreign
exchange gains upon
sale of subsidiary - - - -
--------------------------------------------------------------------------
Total comprehensive
income for the period
attributable to equity
holders of the parent - - - -
--------------------------------------------------------------------------
Share option costs - - - 37
Share options cancelled - - - (65)
Transfer from merger
reserve - - 2,487 -
Shares issued 50 - - -
--------------------------------------------------------------------------
At 31 December 2011 13,599 11,850 - 535
--------------------------------------------------------------------------
Trans- Fair
lation value Accumulated Total
reserve reserve losses equity
GBP '000 GBP '000 GBP '000 GBP '000
----------------------------------------------------------------------------
At 1 January 2010 1,348 102 (21,279) 3,598
----------------------------------------------------------------------------
Accumulated loss for
period - - (210) (210)
Exchange difference on
translating foreign
operations (5) - - (5)
Realisation of
investment - (102) - (102)
----------------------------------------------------------------------------
Total comprehensive
income for the period
attributable to equity
holders of the parent (5) (102) (210) (317)
----------------------------------------------------------------------------
Share option costs - - - 52
Share options cancelled - - 4 -
----------------------------------------------------------------------------
At 31 December 2010 1,343 - (21,485) 3,333
----------------------------------------------------------------------------
Accumulated loss for
period - - (193) (193)
Exchange difference on
translating foreign
operations - - - -
Realisation of foreign
exchange gains upon
sale of subsidiary (1,403) - - (1,403)
----------------------------------------------------------------------------
Total comprehensive
income for the period
attributable to equity
holders of the parent (1,403) - (193) (1,596)
----------------------------------------------------------------------------
Share option costs - - - 37
Share options cancelled - - 65 -
Transfer from merger
reserve - - (2,487) -
Shares issued - - - 50
----------------------------------------------------------------------------
At 31 December 2011 (60) - (24,100) 1,824
----------------------------------------------------------------------------
Notes
1. Financial statements
The financial information set out in this announcement does not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006
for the year ended 31 December 20111 or for the year ended 31 December 2010, but
is derived from those accounts. The financial statements for 2011 will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting. The auditors have issued an unqualified report on these accounts. The
auditor has issued an unqualified opinion in respect of the financial statements
which does not contain any statements under the Companies Act 2006, Section
498(2) or Section 498(3). The auditor has raised an Emphasis of Matter in
relation to going concern and the availability of project finance as follows:
"In forming our opinion, which is not modified, we have considered the adequacy
of the disclosures made in note 2(a) to the financial statements concerning the
requirement of the company to raise further finance within the next twelve
months in order to continue its operations and to meet its commitments. If the
company is unable to secure such additional funding, this may have a
consequential impact on the company's and the group's ability to continue as a
going concern. The outcome of any corporate developments or fundraising cannot
presently be determined, and no adjustments to asset carrying values that may be
necessary should the company be unsuccessful have been recognized in the
financial statements. These conditions, along with the other matters explained
in note 2(a) to the financial statements, indicate the existence of a material
uncertainty which may cast significant doubt about the company's ability to
continue as a going concern.
2. Summary of significant accounting policies
a) Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") in force at the reporting date and their
interpretations issued by the International Accounting Standards Board ("IASB")
as adopted for use within the European Union and with IFRS and their
interpretations adopted by the IASB.
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up to
31 December each year.
Going Concern
Based on a review of the Group's budgets and cash flow forecasts, the directors
have identified that if current and near-term corporate development
opportunities are unsuccessful in providing adequate funding then the Company
will need to raise finance within the next twelve months in order to continue
its operations and to meet its commitments In common with many mining,
exploration and intellectual property development companies, the Company needs
to raise finance for its activities in discrete tranches to finance its
activities for limited periods. The Directors are confident that the Company
currently has a range of corporate development opportunities which could include
significant funding outcomes and moreover that, if necessary, any further
funding can be raised as and when required. On this basis, they have concluded
that it is appropriate to draw up the financial statements on the going concern
basis. However, there can be no certainty that either development opportunities
or alternative funding will be secured in the necessary timescales and this
indicates the existence of a material uncertainty that may cast significant
doubt on the ability of the Company and the Group to continue as a going
concern. The financial statements do not include any adjustments, particularly
in respect of fixed assets, investments, receivables and provisions for winding
up which could be necessary if the Company and Group ceased to be a going
concern.
b) Research and development expenditure
Research costs are recognised in the income statement as an expense as incurred.
Development costs are recognised in the income statement as an expense as
incurred unless the development project meets specific criteria for deferral and
amortisation. No development costs have been deferred to date because there is
insufficient information at the balance sheet date to quantify the expected
future economic benefits from the proprietary leaching technologies.
3. Disposal group - discontinued operations
On 28 February 2011, the Company completed, as planned, the sale of its entire
interest in its subsidiary, Alexander Gold Group Limited for the sum of
US$2,200,000. US$400,000 was received on execution of the legally binding sale
and purchase agreement and 18 monthly payments of US$100,000 each became due,
commencing in March 2011.
Given the stage of negotiations at 31 December 2010, the directors have used, at
that date, the proposed transaction as the 'best' indicator of the fair value of
the disposal group and discounted the expected proceeds to arrive at a fair
value of GBP 1,140,000 after deducting expected costs to sell. Previously
impaired assets of the disposal group had impairments reversed to give a
carrying value equal to that fair value amount.
At 1 January 2010 no carrying value had been brought forward for the investment
in Alexander Gold Group within the Company's balance sheet. Previously
recognised impairments for this investment were therefore reversed to give a
carrying value of GBP 1,140,000 and the investment was classified as a
non-current asset available for sale.
A discount rate of 25% per annum was applied in arriving at the fair value of
the receivable, mainly in recognition of the risks implicit in the anticipated
collection of future instalment payments. In addition to a small discount for
the time value of money, the discount related principally to country / political
risk, the risk that foreign exchange controls may restrict future remittances,
as well as counter-party in-country credit risks. The same discount rate of 25%
per annum has been applied to the remaining instalment balances at 31 December
2011. The discounted balance of GBP 534,000 is included in trade and other
receivables.
A net profit for the year attributed to the discontinued business amounted to
GBP 1,487,000 (2010: GBP 884,000), comprised as follows:
2011 2010
Discontinued operation GBP '000 GBP '000
Impairment reversal - 1,099
Administrative expenses - (182)
Exploration and development expenses - (23)
Profit on disposal of property, plant
and equipment - -
Investment income - 1
Finance cost - (11)
Gain on disposal of discontinued
operation 84 -
Realisation of translation reserve
transferred to Income Statement on
disposal of the subsidiary (IAS 21) 1,403 -
-----------------------------------------------------------------
Profit for the year on discontinued
operation 1,487 884
-----------------------------------------------------------------
Other comprehensive income relating to the disposal group
The cumulative profit transferred to translation reserve in
respect of the disposal group amounted to GBP 1,403,000 at 31
December 2010. This translation reserve was realised by its
transfer to the Income Statement on disposal of the subsidiary
during the year ended 31 December 2011.
4. Dividends
The directors do not recommend the payment of a dividend (2010: nil)
Annual Report
The Annual Report will be posted to all shareholders by 23 May 2012 and will be
available on the Company's website at www.alexandermining.com. Additional copies
will be made available to the public, free of charge, from the Company's
registered office at 35 Piccadilly, London W1J 0DW.
Annual General Meeting
The Company's Annual General Meeting will be held on Thursday 14th June 2012 at
10.30 a.m. at the East India Club, 16 St James's Square, London SW1Y 4LH. The
Notice of the AGM is included in the Company's annual report and the associated
explanatory notes relating to the proposed resolutions at that meeting.
Disclaimers and forward looking statements
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
This news release contains forward looking or future-oriented financial
information, being information which is not historical fact, including, without
limitation, statements regarding potential results of AmmLeach(R) testwork,
anticipated applications for the AmmLeach(R) processing and discussions of
future plans and objectives. Although the Company believes that the expectations
reflected by such information are reasonable, these statements are based on
assumptions and factors concerning future events that may prove to be
inaccurate. Such statements are necessarily based upon a number of estimates and
assumptions based on information available to the Company about itself and the
business in which it operates. Information used in developing forward-looking
information has been acquired from various sources including third party
consultants, suppliers, regulators and other sources and is subject to numerous
risks and uncertainties that could cause actual results and future events to
differ materially from those anticipated or projected. Important factors that
could cause actual results to differ materially from the Company's expectations
are the continuing availability of capital resources to fund the
commercialisation of Alexander's technologies; continued positive results from
trials and applications of Alexander's AmmLeach(R) and HyperLeach(R)
technologies and other factors as disclosed in Company documents filed from time
to time with the TSX Venture Exchange and provincial securities regulators, most
of which are available at www.sedar.com. Management uses forward-looking
statements because it believes they provide useful information to the
shareholders with respect to proposed transactions involving Alexander, and
cautions readers that the information may not be appropriate for other purposes
and should not be read as guarantees of future performance or results. The
Company disclaims any intention or obligation to revise or update such
statements unless required by law.
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