Half-yearly Report
28/02/2013 07:00
28 February 2013
Conroy Gold and Natural Resources plc
("Conroy" or "the Company")
Half-yearly results for the six months ended 30 November 2012
Metallurgical tests underway for planned gold mine at Clontibret
Conroy Gold and Natural Resources plc (AIM:CGNR; ESM:CGNR.I), the gold
exploration and development company planning to develop a gold mine at
Clontibret in Ireland, announces its results for the six months ended 30
November 2012.
Highlights:
* Metallurgical tests by Gold Fields Ltd. underway
* Gold flotation recovery 90 per cent.
* 8 per cent sulphur grade in concentrate
* Results suggest increased IRR and NPV
* Geophysical results, combined with drilling results, suggest that Clay Lake
Prospect could host large gold deposit
* Series of targets indicated at Slieve Glah by gold-in-soil sampling
programme
Commenting, Chairman, Professor Richard Conroy said:
"The commencement of the metallurgical tests by Gold Fields Ltd. is an
important further step for our planned mine at Clontibret. I am also very
pleased with the progress at our Clay Lake target in Co. Armagh which
increasingly looks as though it could host a large gold deposit. The Board is
also delighted by the discovery of a series of large targets at Slieve Glah."
For further information please contact:
Conroy Gold and Natural Resources plc Tel: +353-1-661-8958
Professor Richard Conroy, Chairman
Merchant Securities Limited (Nomad) Tel: +44-20-7628-2200
Simon Clements/Virginia Bull
Hybridan LLP (Joint Broker) Tel: +44-20-7947-4350
Claire Noyce/Deepak Reddy
Shore Capital Stockbrokers Limited (Joint Broker) Tel: +44-20-7408-4050
Jerry Keen/Bidhi Bhoma/Toby Gibbs
IBI Corporate Finance Limited (ESM Adviser) Tel: +353-766-234-800
Brian Farrell
Lothbury Financial Services Limited Tel: +44-20-3440-7620
Michael Padley/Michael Spriggs
Hall Communications Tel: +353-1-660-9377
Don Hall
Visit the website at: www.conroygoldandnaturalresources.com
CHAIRMAN'S STATEMENT
Dear Shareholder,
I have great pleasure in presenting your Company's Interim Report for the six
months ended 30 November 2012. This was a period of further very positive
progress for your Company during which time prefeasibility metallurgical tests
began in relation to Conroy's planned gold mine at Clontibret, there were
indications that your Company's Clay Lake Target in Co. Armagh could host a
large gold deposit and a series of further large gold targets were discovered
at Slieve Glah in Co. Cavan.
Clontibret
Work continues on the planned development of a gold mine on 20 per cent. of the
Clontibret target including an agreement with Gold Fields Limited to undertake
mineralogical characterisation and prefeasibility metallurgical test work. The
proposed process - BIOX is a well-established bacterial oxidation process.
Gold Fields Limited is a world leader in this environmentally friendly, proven
technology
A comprehensive series of composites were constructed from drill core to create
samples of lode and stockwork material selected from different locations within
the proposed pit shell. The samples total over 350 kilogrammes of drill core
and have been dispatched to South Africa for testing. The samples are comprised
of ore grade material with a 10 per cent dilution factor and represent a
similar grade to that expected for run of mine.
The pre-feasibility metallurgical test work comprises Comminution, Flotation
and BIOX Test work. The test work is being managed and executed by SGS South
Africa (Pty) Ltd. under the supervision and direction of Gold Fields Ltd. BIOX
is a well-established bacterial oxidation process and Gold Fields Ltd is a
world leader in this environmentally friendly proven technology with a number
of plants currently in operation worldwide including South Africa, Ghana,
Brazil, China and Australia.
Tetra Tech, which conducted the Scoping Studies on behalf of your Company will
review the metallurgical studies on your Company's behalf and compile the
metallurgical report for the metallurgical section in the Feasibility Studies
for the proposed mine.
These results relate to the Comminution test work being undertaken by
Goldfields Limited ("Goldfields") including grinding, crushing and other
factors in relation to mill design. The test work undertaken included Bond Rod
Work Index (BRWi), Bond Ball Work Index (BBWi), Bond Abrasion Work Index (Ai)
and SAG Mill Comminution Test (SMC). The latter was carried out on behalf of
Goldfields by JKTech which specialises in SAG Mill techniques.
The Abrasion Index was lower than anticipated and the ore is harder. The test
sample was classified in the SMC test by JK Tech as being moderately hard.
The results suggest that a combination of Semi-Autonomous Grind ("SAG")/Ball
Mill or "HPGR"/ Ball Mill or a larger Ball Mill for the process plant be
considered. Preliminary indications are that a "SAG"/Ball Mill combination may
be the preferred choice.
The gold flotation recovery, at 90 per cent, is higher than assumed in the
Scoping Study. This is encouraging both technically and financially.
The results also indicate an 8 per cent sulphur grade in concentrate whereas in
the Scoping Study a grade of 12 per cent had been assumed. The lower sulphur
grade in the concentrate is highly advantageous as it will reduce process
operating costs.
The concentrate mass recovery at 5 per cent was the same as predicted in the
Scoping Study which is also very satisfactory.
The Company estimates that the effect of these results would increase the IRR
from 49.4 per cent (in the Scoping Study) to over 55 per cent and would
increase the NPV8 from $72.3 million to over $90 million using the base case
gold price of $1,372 per ounce as used by Tetra Tech in their Scoping Study and
thus substantially increase the overall financial attractiveness of the
project.
The laboratory flotation full locked cycle tests were also completed and the
results positive. The importance of these tests is that they simulate what
might be achieved when the processing plant of the mine is in continuous
operation. Steady state conditions were achieved in the fifth and sixth cycles.
This is a very satisfactory outcome as the results suggest an efficient and
smooth running flotation process.
Clay Lake Gold Target
A ground geophysical survey at Clay Lake has now been conducted by Golder
Associates on your Company's behalf, totalling 960 line metres in four survey
lines over the Northern area of the Clay Lake target. The survey was performed
to determine the geophysical signature of the mineralisation and hosting
lithologies, together with geological information on the subsurface features.
Strong features were seen in all four lines and interpretation of the results
depicted an anticlinal folding sequence of the gold bearing black carbonaceous
stockwork zone, which had been seen in the drill holes previously.
These geophysical results, combined with the drilling results, provide highly
relevant information for understanding the geology of the area, planning future
drilling and in particular regarding the apexes of the anticlinal structures.
Mineralisation tends to accumulate in the anticlinal structures and supports
the view that the Clay Lake gold target could host a large gold deposit.
Slieve Glah Gold Target
A series of further large gold-in-soil targets have been discovered within your
Company's Slieve Glah licence areas in County Cavan following a detailed
gold-in-soil survey.
Two new targets (Targets 3 and 4), each over 3 km (1.9 miles) in length, were
discovered. In addition the assay results of the survey, which comprised over
900 soil samples, extended the surface area of the two known gold targets
(Targets 1 and 2) at Slieve Glah by over 1 km (0.6 miles) resulting in both now
also totalling over 3 km in length.
Anomalous gold values returned from the assay analysis ranged from 4 ppb (parts
per billion) Au to over 300ppb Au. In Ireland, over 10ppb Au is considered
highly anomalous in soil samples and during follow-up drilling and/or trenching
over that anomaly typically proves positive for gold-in bedrock.
In one of the newly discovered targets (Target 4) a highly anomalous area has
been identified which measures approximately 1,000 metres in length by 500
metres in width, trending Northwest to Southeast. The area has been defined by
over a hundred soil samples collected on a 100m grid. Assay analysis returned
maximum gold values of up to 140ppb Au with over 30 per cent. of the soil
samples returning elevated gold values of greater than 10ppb Au.
Gold has previously been confirmed in bedrock in the Slieve Glah target area
through trenching and diamond core drilling by your Company.
The gold in soil targets identified by the soil sampling survey appear to be
structurally controlled and to occur as a series of right angle zones adjacent
to the Orlock Bridge Fault, a major sinistral fault believed to be an
influencing factor on mineralisation in the region. In the Slieve Glah area the
Orlock Bridge Fault undergoes a marked swing from its normal Northeast -
Southwest strike, producing a dilatational zone allowing greater permeation and
circulation of mineralising fluids, which also may assist in concentration of
mineralisation and thus can be associated with substantial accumulations of
minerals.
The new Slieve Glah gold targets lie at the southern end of the 50km (30 miles)
gold trend
discovered by your Company, which stretches from Co. Armagh in Northern Ireland
to Co. Cavan in the Republic of Ireland, and are located approximately 40km (25
miles) south of the Clontibret Gold Project.
Finance
The loss after taxation for the half-year ended 30 November 2012 was ?197,683
(2011: loss of ?203,752) and the net assets as at 30 November 2012 were
?12,555,277 (2011: ?12,381,024).
Outlook
Your Company looks forward to continued progress with its planned gold mine at
Clontibret and its highly promising exploration targets.
Directors and Staff
I am delighted that Mr Seamus FitzPatrick has agreed to become Deputy Chairman.
Mr Seamus FitzPatrick, with his business ability and wide ranging experience in
corporate and financial matters, has already played a major role in the ongoing
success and development of the Company. I look forward to his advice and
support over the coming years as the Company moves from exploration to
production.
Mr FitzPatrick, who has been a Non-Executive Director of Conroy for the past
five years, has worked in both corporate finance and private equity in London
and New York with Morgan Stanley International, J.P. Morgan Capital Partners
and Bankers' Trust. In 1999 he co-founded CapVest Associates LLP, which has
raised funds in excess of 2.0 billion. He is chairman of the Mater Private
Hospital and Valeo Foods Limited, and is a board member of Reno Norden AB. He
is also a member of the board of Karelian Diamond Resources plc.
I would like to thank all of my fellow directors, staff and consultants for
their support and dedication, which has enabled the continued success of the
Company. I look forward to the future with confidence.
Yours faithfully,
Professor Richard Conroy
Chairman
28 February 2013
INCOME STATEMENT
FOR HALF-YEAR ENDED 30 NOVEMBER 2012
Six months Six months Year ended
ended ended
30 November 30 November 31 May
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
? ? ?
OPERATING EXPENSES (191,884) (199,802) (524,888)
Finance income - bank interest 0 542 779
receivable
Finance costs - interest on (5,799) (4,492) (9,153)
shareholder loan
LOSS BEFORE TAXATION (197,683) (203,752) (533,262)
Taxation - -
LOSS FOR THE YEAR (197,683) (203,752) (533,262)
Loss per ordinary share - basic (?0.0007) (?0.0009) (?0.0022)
and diluted
STATEMENT OF COMPREHENSIVE INCOME
FOR HALF-YEAR ENDED 30 NOVEMBER 2012
Six months Six months Year ended
ended ended
30 November 30 November 31 May
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
? ? ?
LOSS FOR PERIOD (197,683) (203,752) (533,262)
Total income and expense - -
recognised in other comprehensive
income
TOTAL COMPREHENSIVE INCOME FOR THE (197,683) (203,752) (533,262)
PERIOD - ENTIRELY ATTRIBUTABLE TO
EQUITYHOLDERS
STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2012
30 November 30 November 31 May
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
ASSETS ? ? ?
Non-current Assets
Intangible assets 14,226,967 12,845,738 13,603,186
Investment in Subsidiary 2 2 2
Property, plant and equipment 8,913 17,306 10,688
14,235,882 12,863,046 13,613,876
Current Assets
Trade and other receivables 116,802 68,464 73,940
Cash and cash equivalents 42,768 412,951 238,647
159,570 481,415 312,587
Total Assets 14,395,452 13,344,461 13,926,463
EQUITY AND LIABILITIES
Capital and Reserves
Called up share capital 8,112,257 7,534,625 8,112,257
Share premium 7,872,573 7,897,784 7,872,573
Capital conversion reserve fund 30,617 30,617 30,617
Share based payments reserve 955,221 806,195 880,709
Retained losses (4,415,391) (3,888,197) (4,217,708)
Total Equity 12,555,277 12,381,024 12,678,448
Non-current Liabilities
Financial Liabilities 994,314 588,097 665,318
Total Non-current Liabilities 994,314 588,097 665,318
Current Liabilities
Trade and other payables 845,861 375,340 582,697
Total Current Liabilities 845,861 375,340 582,697
Total Liabilities 1,840,175 963,437 1,248,015
Total Equity and Liabilities 14,395,452 13,344,461 13,926,463
CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2012
Six months Six months Year ended
ended ended
30 November 30 November 31 May
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
? ? ?
Cash flows from operating activities
Cash generated by/(used in) operations 15,444 (194,641) (211,386)
Tax paid - -
Net cash generated by/(used in) 15,444 (194,641) (211,386)
operating activities
Cash flows from investing activities
Investment in exploration and (563,515) (1,026,444) (1,687,013)
evaluation
Payments to acquire property, plant - (883) (938)
and equipment
Net cash used in investing activities (563,515) (1,027,327) (1,687,951)
Cash flows from financing activities
Issue of share capital - 862,446 1,414,867
Advances of shareholder loan 352,192 22,472 -
Repayment of shareholder loan - - -
Bank interest received 542 779
Interest paid on shareholder loan - - (27,121)
Net cash generated from financing 352,192 885,460 1,388,525
activities
(Decrease)/Increase in cash and cash (195,879) (336,508) (510,812)
equivalents
Cash and cash equivalents at beginning 238,647 749,459 749,459
of period
Cash and cash equivalents at end of 42,768 412,951 238,647
period
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 NOVEMBER 2012
Capital
Conversion Share-based Retained
Share Share Reserve Payment Earnings Total
Capital Premium Fund Reserve (Deficit) Equity
? ? ? ? ? ?
At 1 June 2012 8,112,257 7,872,573 30,617 880,708 (4,217,707) 12,678,448
Share-based - - - 74,513 - 74,513
payments
Loss for the - - - - (197,684) (197,684)
period
At 30 November 8,112,257 7,872,573 30,617 955,221 (4,415,391) 12,555,277
2012
Capital
Conversion Share-based Retained
Share Share Reserve Payment Earnings Total
Capital Premium Fund Reserve (Deficit) Equity
? ? ? ? ? ?
At 1 June 2011 6,913,935 7,656,028 30,617 731,682 (3,684,445) 11,647,817
Share issue 620,690 - - - - 620,690
Share premium - 241,756 - - - 241,756
Share-based - - - 74,513 - 74,513
payments
Loss for the - - - - (203,752) (203,752)
period
At 30 November 7,534,625 7,897,784 30,617 806,195 (3,888,197) 12,381,024
2011
Notes to the Financial Statements
1. Basis of preparation
The half-yearly financial statements have been prepared on the basis of the
recognition and measurement requirements of International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU), and their
interpretations adopted by the International Accounting Standards Board (IASB).
The accounting policies used in the preparation of the half-yearly financial
information are the same as those used in the Company's audited financial
statements for the year ended 31 May 2012.
2. Earnings per share
The calculation of the loss per ordinary share of ?0.0007 (2011 - ?0.0009) is
based on the loss for the financial year of ?197,683 (2011 - ?203,752) and the
weighted average number of ordinary shares in issue during the period of
270,408,542 (2011 - 237,361,005).
Since the Company incurred a loss the effect of share options and warrants
would be anti-dilutive.
3. Dividends
No dividends were paid or are proposed in respect of the period ended 30
November, 2012.
4. Copies of Accounts
A copy of the Half-Yearly Report will be available on the Company's website
www.conroygoldandnaturalresources.com and will be available from the Company's
registered office, 10 Upper Pembroke Street, Dublin 2.
END