TIDMMNA
RNS Number : 0384R
Monterrico Metals PLC
23 April 2009
Monterrico Metals plc
23 April 2009
Preliminary Results for the Year ended 31 December 2008
HIGHLIGHTS 2008/9
* New Chairman appointed in June 2008
* Management in Peru strengthened with New Social Manager appointed
* New management commenced review of Rio Blanco Detailed Feasibility Study ("DFS")
work and completed the Trade-off study to evaluate the alternative technical
options for the development of Rio Blanco by maximizing the value from the total
resources (1,257Mt) and optimizing the economics of the Project, whilst
improving environmental and social aspects
* The Environmental and Social Impact Assessment ("ESIA") continues
* 20% conditional warrants issued to Peruvian investors to increase local
participation
* The Company strengthens its Social Programme and expands and improves
communications with local and regional communities
* Peruvian Government approved the request to acquire an additional buffer zone
around the eight core mining concessions of Rio Blanco Project ("Rio Blanco" or
the "Project")
* The Company's Head Office moved to Hong Kong
* Plan to delist from the AIM in 2009
REPORT FROM THE CHIEF EXECUTIVE OFFICER
Executive Summary
I am pleased to report that in 2008, Monterrico Metals plc has taken significant
steps towards becoming a producing mining company. In line with management's
philosophy, vision and mission, the Company is approaching the final definition
of technology and layout for our flagship Rio Blanco Project following an
exhaustive evaluation of development alternatives designed to maximize the
economic, environmental and social feasibility of the Project. The Company
continues to focus on improving relations with local communities around Rio
Blanco. While maintaining stable operations, Monterrico has achieved a higher
level of integration and improvement in the Company's management systems through
the development and advancement of appropriate operating standards, processes
and procedures.
The Board of Monterrico has today announced that it intends to seek its
shareholders' approval to cancel admission of the ordinary shares of Monterrico
to trading on AIM. A circular containing details of the proposed de-listing is
being sent to shareholders today to seek shareholders' approval at the
forthcoming annual general meeting to be held on Friday 22 May 2009. Copies of
the circular will be shortly made available from Monterrico's website,
www.monterrico.com. For details of the proposed de-listing, please refer to the
circular.
I would like to thank all directors and employees of Monterrico and its
subsidiaries for their valuable contribution for the year's achievements.
Xiaodong Huang
Chief Executive Officer23 April 2009
Enquiries:
For more information please contact:
Monterrico Metals plc
Susan Li, Finance Director +852 2803 2738
Andrew Bristow, Investor Relations Manager +511 226 3322
EVOLUTION SECURITIES LIMITED
(Nominated adviser) +44 20 7071 4300
Rob Collins
Barry Saint
Adam James
Esther Lee
EVOLUTION SECURITIES CHINA LIMITED
(Financial adviser and broker) +44 20 7220 4850
Project Development Optimization Programme
The Project is located in steep, geographically complex terrain subject to
moderate rainfall. As a result, management considered that the technology and
layout chosen for the development of Rio Blanco should be designed in strict
compliance with Peruvian legislation and include forest conservation
initiatives, process water recycling, and integrated site specific water
management technologies to guarantee maintenance of existing water quality in
local water sources. At the same time management required design considerations
to rationalize mine operation parameters and process flow to minimize overall
operating costs.
Following these considerations by management, and using the 2007 feasibility
study as a base, in March 2008 Chinese engineers from Monterrico's main
shareholding companies reviewed and evaluated the overall project layout paying
special attention to alternatives for the Tailings Storage Facility, processing
of Potential Acid Generating (PAG) material and concentrate transport. Based on
this work a new trade off study was commissioned and completed in October 2008
by Hatch Engineering (Chile) and in December 2008 was subject to final review by
engineers from the main shareholding companies.
The most favourable alternative considers a 500 million tonne operation
producing 191,000 tonnes of copper in concentrate and 2,180 tonnes of molybdenum
in concentrate. Design considerations allow for mine expansion to adjacent
resources and ore processing capacity can be managed to extend or increase
production depending on market conditions. Advanced technologies are also being
applied in the design in order to manage all risks associated with PAG materials
both with respect to waste rock and mine closure to ensure maintenance of
current water quality in the environment.
In early 2009, a decision will be made on final project design parameters, which
will in turn be used to complete a Feasibility Study by the third quarter of
2009. These parameters will also be used to make appropriate adjustments to the
Environmental and Social Impact Assessment ("ESIA") which is expected to be
completed in the fourth quarter of 2009.
Internal Management
1. Core Sample Warehouse
In March 2008, the Company completed reorganizing and cataloguing 58,000 meters
of diamond drilling samples from the Project in a warehouse in Peru's capital,
Lima, which guarantees the safety and longevity of these samples while providing
ease of access for future technical study.
2. Exploration site management and rehabilitation planning of the Project
Following the sanction by the Peruvian Government's independent exploration and
mining supervising authority, OSINERGMIN, the Company has complied with all
resolutions which addressed certain historical site management issues between
2004 and 2006. The rehabilitation of the exploration site and environmental
monitoring are also proceeding normally in accordance with Peruvian legislation
and the special requirements imposed by OSINERGMIN.
3. Team Building
The Company has been actively focused on the construction of a sound technical
team suitable for taking Rio Blanco forward through final feasibility,
permitting and into construction and has employed a number of excellent mining
and environmental professionals which strengthen the company's human resource
capacity in mining development, environmental protection and safety.
4. Management Systems
The Company has undertaken preliminary establishment of procedures compliant
with the ISO9000 series management system in the areas of financial budgeting,
human resources management, procurement and information management.
Stakeholder Relations
Challenges related to local communities are at the forefront of mining
development in South America where all mining enterprises must actively manage
community issues in order to prosper. Rio Blanco is no exception, and the
Company has been very active in 2008 focusing on initiatives that bring detailed
and accurate information about the Company and the project to all stakeholders,
both close to the project and throughout the northern region of Peru. These
initiatives range from dedicated information office installations, through
printed and radio media information, to door to door promotion and relationship
building.
Since its inception in September of 2007, our interactive information office in
the city of Piura has received close to 50,000 visitors, and has played a key
role in gaining the support of regional opinion leaders, politicians, students,
universities, media and other members of society. Similar installations in rural
areas have also received much attention, and will continue to be a vital
instrument in maintaining the population informed of the inevitable developments
related to Rio Blanco in the future.
Our community relations programme continues to focus on promoting economic
development for local communities with the Company's involvement aimed at
modernizing existing local productive activities such as agriculture, textiles,
coffee, dairy and tourism. Programmes to improve health and education in the
local communities also continue to build confidence and trust between the
Company and local people.
The Company will continue to participate in and strengthen communication with
local families and community leaders at all levels, firm in the belief that
communication strengthens understanding, and that understanding promotes trust.
There are still some difficult challenges ahead with some of our local
relationships, but in general we are progressing actively and constructively
with a significant proportion of local people participating harmoniously with
the Company in development activities.
I am also pleased to report the clear and strong support for mining investment
in general, and for Rio Blanco in particular, expressed by the Peruvian Central
Government and by the Regional Government of Piura. Most notably was the support
towards mining investment in Peru, expressed during the APEC summit held in Lima
in November 2008. Peru's Constitutional President, Alan Garcia continues to
actively promote foreign investment and especially that of Chinese origin in
mining.
We have well developed relationships with many Peruvian State and other
institutions such as NGO's, the church and media, and are further developing our
relationships with investors and potential investors following the successful
relocation of our corporate headquarters from London to Hong Kong.
Outlook for 2009
The global financial crisis continues to evolve following the US sub-prime
mortgage crisis and ensuing global stock market collapse and is having far
reaching impacts on the global economy. Developed countries are entering into
recession and the strong growth enjoyed by many developing nations is now
showing clear signs of slowing significantly. Confidence in global markets has
been severely affected with stocks around the world being devalued across all
economic sectors and demand for manufactured products and commodities shrinking,
leading the world into the most serious economic crisis since 1929.
The rapid and drastic fall in commodity prices has led the global mining
industry into what we believe will be a long period of very difficult conditions
with the possibility of further falls in commodity prices that will threaten the
viability of many existing mining operations. The prospect of obtaining finance
for mining projects in different stages of development and for exploration
projects is extremely poor, which will delay significantly many projects coming
into production around the world; perhaps the only real indicator that commodity
prices will recover as supply becomes restricted.
Facing these difficulties, our priority is to maintain a good cash flow to
ensure that all Monterrico's projects will come safely through this crisis.
Since the third quarter of 2008, the Company began merging departments,
cancelling or postponing non-urgent projects, and reducing management costs. We
are also strictly controlling expenditure in the 2009 budget. Xiamen Zijin
Tongguan Investment Development Co., Ltd. (the "Zijin Consortium") has agreed to
provide financial support to Monterrico for the foreseeable future.
Despite this very negative outlook, the global crisis also presents a number of
significant long term opportunities as the demand for metals generated by
continued economic growth in emerging countries remains positive, albeit
reduced. The decline in commodity prices will reduce capital costs for project
development, particularly those related to infrastructure and transport. The
cancellation of a number of projects worldwide has already begun to reduce lead
times on critical equipment, and at the same time the recent shortages of
qualified professionals will be alleviated. I believe Monterrico is uniquely
placed to seize and take full advantage of these opportunities.
The Board of Monterrico has today announced that it intends to seek its
shareholders' approval to cancel admission of the ordinary shares of 10 pence
each in Monterrico to trading on AIM. A circular containing details of the
proposed de-listing is being sent to shareholders today to seek shareholders'
approval at the forthcoming annual general meeting to be held on Friday 22 May
2009. Copies of the circular will be shortly made available from Monterrico's
website, www.monterrico.com. For details of the proposed de-listing, please
refer to the circular.
In China we have a saying: "If winter comes, can spring be far behind?".
However, we must also think of adversity when in prosperity, and make the
enterprise more open, integrated and competitive in the long term. We will
continue to work hard, and ensure we maximize the interests of Peru, local
communities, and you our shareholders.
Financial Review
The Company and its subsidiaries (collectively as "the Group") incurred total
expenses in the reporting period of US$6,178,000 (2007 (restated): recurring
expenses of US$4,957,000 and non recurring expenses of US$5,930,000) including
the share-based payment expense for the warrants granted to the strategic
partner of US$2,736,000 (2007: US$Nil). The non-recurring expenditure in 2007
related to the legal and professional service fee, and termination costs,
associated with the Zijin Consortium's takeover of the Company in April 2007.
The total capitalized expenditure for the Group amounted to US$47,894,000 at the
end of the period (2007 (restated): US$40,780,000).
The total loss before tax incurred in 2008 for Monterrico is US$10,911,000 (2007
(restated): US$10,462,000) including the exchange loss of US$4,337,000
associated with the shareholder loans from the Zijin Consortium.
The loan and interest the Group owed to the Zijin Consortium amounted to
US$20,552,000 at the end of 2008 (2007: US$12,359,000).
The Company signed a loan facility agreement of US$5,000,000 and GBP2,550,000 in
February 2008 with the Zijin Consortium to meet the working capital requirements
of the Group in 2008, of which its term was extended to 9 February 2010. In
February 2009, the Company signed a further US$5,000,000 loan agreement with the
Zijin Consortium in meeting the forecast working capital requirement of the
Group this year. The Company is also in discussion with the Zijin Consortium to
extend the terms of the loans due to expire this year.
As at 31 December 2008, the Group had cash reserves of US$2,787,000 (2007:
US$5,044,000).
Consolidated income statement
for the year ended 31 December 2008
+------------------------------------------------+------------+------------+
| | 2008 | 2007 |
| | | (restated) |
+------------------------------------------------+------------+------------+
| | US$'000 | US$'000 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Administrative and operating expenses | (6,178) | (4,957) |
+------------------------------------------------+------------+------------+
| Non recurring administrative expenses | - | (5,930) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Operating loss | (6,178) | (10,887) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Finance revenue | 207 | 1,038 |
+------------------------------------------------+------------+------------+
| Finance costs | (4,940) | (613) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Loss before income tax | (10,911) | (10,462) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Income tax | - | - |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Loss for the year | (10,911) | (10,462) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Weighted average number of ordinary shares | 26,306,068 | 26,306,068 |
| (number of shares) | | |
+------------------------------------------------+------------+------------+
| Basic and diluted loss per ordinary share | (0.41) | (0.40) |
| (US$) | | |
+------------------------------------------------+------------+------------+
Consolidated balance sheet
as at 31 December 2008
+------------------------------------------------+------------+------------+
| | 2008 | 2007 |
| | | (restated) |
+------------------------------------------------+------------+------------+
| | US$'000 | US$'000 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Assets | | |
+------------------------------------------------+------------+------------+
| Non-current assets | | |
+------------------------------------------------+------------+------------+
| Exploration and evaluation assets (2007: | 47,894 | 40,780 |
| Intangible assets) | | |
+------------------------------------------------+------------+------------+
| Property, plant and equipment | 655 | 283 |
+------------------------------------------------+------------+------------+
| Other receivables | 3,398 | 2,969 |
+------------------------------------------------+------------+------------+
| Total non-current assets | 51,947 | 44,032 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Current assets | | |
+------------------------------------------------+------------+------------+
| Cash and cash equivalents | 2,787 | 5,044 |
+------------------------------------------------+------------+------------+
| Other receivables and prepayments | 356 | 350 |
+------------------------------------------------+------------+------------+
| Total current assets | 3,143 | 5,394 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Total assets | 55,090 | 49,426 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Equity and liabilities | | |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Shareholders' Equity | | |
+------------------------------------------------+------------+------------+
| Share capital | 4,546 | 4,546 |
+------------------------------------------------+------------+------------+
| Share premium | 50,178 | 50,178 |
+------------------------------------------------+------------+------------+
| Share option reserve | 3,056 | 38 |
+------------------------------------------------+------------+------------+
| Foreign currency translation reserve | 6,654 | 1,593 |
+------------------------------------------------+------------+------------+
| Accumulated losses | (30,777) | (20,065) |
+------------------------------------------------+------------+------------+
| Total Shareholders' Equity | 33,657 | 36,290 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Current liabilities | | |
+------------------------------------------------+------------+------------+
| Other payable and accrued liabilities | 881 | 777 |
+------------------------------------------------+------------+------------+
| Interest-bearing loans and borrowings | 20,552 | 12,359 |
+------------------------------------------------+------------+------------+
| Total current liabilities | 21,433 | 13,136 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Total liabilities | 21,433 | 13,136 |
+------------------------------------------------+------------+------------+
| Total liabilities and shareholders' equity | 55,090 | 49,426 |
+------------------------------------------------+------------+------------+
Consolidated statement of changes in equity
for the year ended 31 December 2008
+----------------+---------+---------+---------+-------------+-------------+----------+
| | Share | Share | Share | Foreign | Accumulated | Total |
| | capital | premium | option | currency | losses | equity |
| | | | reserve | translation | | |
| | | | | reserve | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------+---------+---------+---------+-------------+-------------+----------+
| | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Balance | 4,546 | 50,178 | 1,092 | 2,391 | (9,136) | 49,071 |
| at 1 | | | | | | |
| January | | | | | | |
| 2007 | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Prior | - | - | - | (991) | (1,974) | (2,965) |
| period | | | | | | |
| restatement | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Balance | 4,546 | 50,178 | 1,092 | 1,400 | (11,110) | 46,106 |
| at 1 | | | | | | |
| January | | | | | | |
| 2007 | | | | | | |
| (restated) | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Foreign | - | - | - | 193 | - | 193 |
| currency | | | | | | |
| translation | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Total | - | - | - | 193 | - | 193 |
| income | | | | | | |
| recognised | | | | | | |
| directly | | | | | | |
| in equity | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Loss | - | - | - | - | (10,462) | (10,462) |
| for | | | | | | |
| the | | | | | | |
| year | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Total | - | - | - | - | (10,462) | (10,462) |
| recognised | | | | | | |
| loss of | | | | | | |
| the year | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Credit | - | - | 453 | - | - | 453 |
| arising | | | | | | |
| on | | | | | | |
| share | | | | | | |
| options | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Transfer | - | - | (1,507) | - | 1,507 | - |
| to | | | | | | |
| accumulated | | | | | | |
| loss on | | | | | | |
| expired | | | | | | |
| share | | | | | | |
| options | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| At 31 | 4,546 | 50,178 | 38 | 1,593 | (20,065) | 36,290 |
| December | | | | | | |
| 2007 | | | | | | |
| (restated) | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Balance | 4,546 | 50,178 | 38 | 3,213 | (18,265) | (39,710) |
| at 1 | | | | | | |
| January | | | | | | |
| 2008 | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Prior | - | - | - | (1,620) | (1,800) | (3,420) |
| period | | | | | | |
| restatement | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Balance | 4,546 | 50,178 | 38 | 1,593 | (20,065) | 36,290 |
| at 1 January | | | | | | |
| 2008 | | | | | | |
| (restated) | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Foreign | - | - | - | 5,061 | - | 5,061 |
| currency | | | | | | |
| translation | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Total | - | - | - | 5,061 | - | 5,061 |
| income | | | | | | |
| recognised | | | | | | |
| directly | | | | | | |
| in equity | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Loss | - | - | - | - | (10,911) | (10,911) |
| for | | | | | | |
| the | | | | | | |
| year | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Total | - | - | - | - | (10,911) | (10,911) |
| recognised | | | | | | |
| loss of | | | | | | |
| the year | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Credit | - | - | 3,217 | - | - | 3,217 |
| arising | | | | | | |
| on | | | | | | |
| share | | | | | | |
| options | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Transfer | - | - | (199) | - | 199 | - |
| to | | | | | | |
| accumulated | | | | | | |
| loss on | | | | | | |
| expired | | | | | | |
| share | | | | | | |
| options | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
| Balance | 4,546 | 50,178 | 3,056 | 6,654 | (30,777) | 33,657 |
| at 31 December | | | | | | |
| 2008 | | | | | | |
+----------------+---------+---------+---------+-------------+-------------+----------+
Consolidated statement of cash flow
for the year ended 31 December 2008
+------------------------------------------------+------------+------------+
| | 2008 | 2007 |
| | | (restated) |
+------------------------------------------------+------------+------------+
| | US$'000 | US$'000 |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Cash flows from operating activities | | |
+------------------------------------------------+------------+------------+
| Loss before income tax | (10,911) | (10,462) |
+------------------------------------------------+------------+------------+
| Adjustments for: | | |
+------------------------------------------------+------------+------------+
| Depreciation | 103 | 97 |
+------------------------------------------------+------------+------------+
| Unwinding of discount on IGV receivables | (179) | (132) |
+------------------------------------------------+------------+------------+
| Interest income | (28) | (332) |
+------------------------------------------------+------------+------------+
| Discount on initial recognition of IGV | 42 | 229 |
| receivables | | |
+------------------------------------------------+------------+------------+
| Loan interest expenses | 561 | 384 |
+------------------------------------------------+------------+------------+
| Loss on disposal of property, plant and | 6 | - |
| equipment | | |
+------------------------------------------------+------------+------------+
| Share-based payment | 3,217 | 453 |
+------------------------------------------------+------------+------------+
| Unsuccessful exploration expenditure | - | 495 |
| derecognised | | |
+------------------------------------------------+------------+------------+
| Impairment provision for exploration and | 293 | 25 |
| evaluation assets | | |
+------------------------------------------------+------------+------------+
| Foreign exchange loss | 3,870 | 147 |
+------------------------------------------------+------------+------------+
| Working capital adjustments | | |
+------------------------------------------------+------------+------------+
| (Increase)/decrease in other receivables and | (41) | 281 |
| prepayments | | |
+------------------------------------------------+------------+------------+
| Increase in long-term other receivables | (292) | (979) |
+------------------------------------------------+------------+------------+
| Increase/(decrease) in other payables relating | 212 | (801) |
| to operating activities | | |
+------------------------------------------------+------------+------------+
| Net cash outflows for operating activities | (3,147)) | (10,595) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Cash flows from investing activities | | |
+------------------------------------------------+------------+------------+
| Interest received | 28 | 332 |
+------------------------------------------------+------------+------------+
| Purchase of property, plant and equipment | (486) | (77) |
+------------------------------------------------+------------+------------+
| Investment in exploration and evaluation | (7,407) | (9,089) |
| assets | | |
+------------------------------------------------+------------+------------+
| Net cash outflow for investing activities | (7,865) | (8,834) |
+------------------------------------------------+------------+------------+
| | | |
+------------------------------------------------+------------+------------+
| Cash flow from financing activities | | |
+------------------------------------------------+------------+------------+
| Proceeds from loans and borrowings | 9,282 | 11,853 |
+------------------------------------------------+------------+------------+
| Net cash inflow from financing activities | 9,282 | 11,853 |
+------------------------------------------------+------------+------------+
| Decrease in cash | (1,730) | (7,576) |
+------------------------------------------------+------------+------------+
| Effect of exchange rate fluctuations | (527) | 44 |
+------------------------------------------------+------------+------------+
| Cash and cash equivalents, beginning of year | 5,044 | 12,576 |
+------------------------------------------------+------------+------------+
| Cash and cash equivalents, end of year | 2,787 | 5,044 |
+------------------------------------------------+------------+------------+
Disclosure of Major Accounting Policy
1. Accounting policies
Basis of preparation of financial statements
The accounting policies adopted in the preparation of the financial information
are consistent with those applied to the year ended 31 December 2007 except for
the adoption of new and amended standards. Adoption of these revised standards
and interpretations did not have any effect on the financial performance or
position of the Group.
The consolidated financial statements are presented in US dollars and have been
prepared on the historical cost basis.
Going concern
At 31 December 2008 the Company, and its subsidiaries, have net current
liabilities totalling US$18,290,000, which includes amounts owing to Xiamen
Zijin Tongguan Investment Development Co., Ltd. ("Zijin Consortium")
totalling US$20,552,000. These loans, plus a further US$5,000,000 loan facility
granted by the Zijin Consortium in February 2009, are all due to be repaid to
the Zijin Consortium before February 2010. The Directors have a reasonable
expectation that the existing cash balance at 31 December 2008 of US$2,787,000,
coupled with the US$5,000,000 loan facility granted in February 2009 and any
further financial support which the Group may obtain from the Zijin Consortium,
will provide sufficient cash to enable the Group to fund its working capital
requirements, and the planned expenditures, over the next 12 months from the
date of this report.
As the loans with the Zijin Consortium are due for repayment within the next
twelve months, and given the Company has no other source of funding, the ability
for the Company to continue as a going concern is dependent upon the ongoing
support from the Zijin Consortium, and from the Zijin Consortium's three
shareholders. A letter of support to this effect has been received by the
Company from the Zijin Consortium, and from the Zijin Consortium's three
shareholders, which confirms financial support until 31 December 2010. As a
result the Directors have a reasonable expectation that the Company will
continue to receive support from the Zijin Consortium, and the Zijin Consortium
has the ability to continue to provide this support. The financial statements
have therefore been prepared on a going concern basis.
2. Loss per share
Basic loss per share amounts are calculated by dividing the net loss for the
year by the weighted average number of ordinary shares outstanding during the
year.
The basic and diluted loss per share is the same as there are no dilutive
effects on earnings as the effect on the exercise of share options would be to
decrease the loss per share.
+-----------------------------------------------+--+----------+------------+
| | | 2008 | 2007 |
| | | | (restated) |
+-----------------------------------------------+--+----------+------------+
| | | | |
+-----------------------------------------------+--+----------+------------+
| Net losses attributable to ordinary | | (10,911) | (10,462) |
| shareholders (US$'000) | | | |
+-----------------------------------------------+--+----------+------------+
| Weighted average number of ordinary shares | | 26,306 | 26,306 |
| (number of shares-thousand) | | | |
+-----------------------------------------------+--+----------+------------+
| Basic and diluted loss per ordinary share | | (0.41) | (0.40) |
| (US$) | | | |
+-----------------------------------------------+--+----------+------------+
There have been no other transactions involving ordinary shares or potential
ordinary shares between the reporting date and the date of completion of these
financial statements.
3. Post balance sheet events
On 9 February 2009, the Company entered into a loan facility agreement with the
Zijin Consortium.
The loan facility is for an aggregate amount of up to US$5 million at an
interest rate of not greater than 1 percent above LIBOR, as published by the
British Bankers Association. The loan is repayable on 8 February 2010. No amount
was drawn down after the facility agreement was signed.
The proceeds from the loan facility will be used to meet the working capital
needs of the Group for 2009.
On the same day, the loan facility agreement with the Zijin Consortium of
US$5,000,000 and GBP2,550,000 which expires on 2 February 2009, was extended to
9 February 2010. The other terms of the loan facility remains unchanged.
4. Statutory Accounts
The financial information set out above does not constitute the Company's
statutory accounts as defined in section 240 of the Companies Act 1985 for the
year ended 31 December 2008. The financial information for the years ended 31
December 2008 and 2007 have been extracted from the consolidated financial
statements of Monterrico Metals plc for the year ended 31 December 2008 which
have been approved by the directors on 23 April 2009. The financial statements
are produced in accordance with International Financial Reporting Standards, as
adopted by the European Union ("EU"). The auditor's report on those financial
statements was unqualified and did not contain a statement under section 237 of
the Companies Act 1985.
Statutory accounts for 2008 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
5. Comparative financial information
The comparative financial information presented, which has been extracted from
the audited 31 December 2008 financial statements differs to those figures
presented in the 31 December 2007 financial statements due to the correction of
certain prior year errors.
The net effect of these errors, which are set out in note 21 of the 31 December
2008 financial statements was to:
* Decrease the reported loss for the year ended 31 December 2007 from
US$10,636,000 to US$10,462,000;
* Decrease total asset at 31 December 2007 from US$52,846,000 to US$49,426,000;
and
* Decrease total equity from US$39,710,000 to US$36,290,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IJMLTMMMTMPL
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