Please find the full announcement concerning Cambrian Mining's (AIM: CBM) final results attached.
CAMBRIAN MINING PLC ("Cambrian" or "The Company")
Preliminary Results for the year ended 30th June 2005
The Directors have pleasure in presenting the accounts for the year ended 30th June 2005.
Proposed payment of maiden dividend of 1.5p
Net profit after tax of lb2.8m
4.6p earnings per share
Listed investments valued at lb119m at 30 June 2005 compared with lb13.1m at 30 June 2004
Coal production and profits commenced at Western Canadian Coal Corp.
Significant increase in profits for 2006 expected following the sale of a portion of the Company's Asia Energy Plc shareholding
The Directors of Cambrian have resolved to pay a maiden dividend of 1.5p per share following a strong profit performance for the year ended 30 June 2005. Net profit after tax for the year was lb2.8m as against a loss of lb69,000 in the previous financial year.
The value of Cambrian's listed investments rose sharply over the last year to lb119m compared with lb13.1m in the previous year, a rise of over 800%.
Cambrian's 41 percent interest in Western Canadian Coal is expected to provide a significant contribution to earnings in the current year. In the 3 months to 30 June 2005, Western Canadian Coal earned an operating profit of C$8m.
Cambrian earned pre-tax profits of lb4.4m for the year, mainly from the disposal of non-core assets. Since the end of the financial year Cambrian recorded a lb27m gain on the sale of 4.3 million shares of Asia Energy Plc. Cambrian has committed to retain the balance of 4.5 million Asia Energy Plc shares until 30 June 2005.
Charles de Chezelles, Chairman of Cambrian commented:
"Cambrian has continued to build its strong asset base to maintain its position as a diversified mining house servicing the steel industry. These financial results demonstrate the successful implementation of the Company's investment strategies and we are delighted to be in a position to offer a maiden dividend to our shareholders. I continue to be enthusiastic about our future prospects, remain pleased by our progress to date and look forward to the next year of development within the group".
For further information, please contact:
John Byrne / Jo Malins Justine Howarth /Ana Ribeiro
Cambrian Mining plc Parkgreen Communications
Tel: +44 (0)20 7409 0890 Tel: +44 (0)20 7493 3713
Cambrian Mining has achieved its third successive year of exceptional growth, thanks largely to your Company's strategy of positioning itself to benefit from the surge in international demand for coal.
More importantly your Directors have resolved to pay a maiden dividend of 1.5p per share to shareholders registered on 2 December 2005. The dividend payment reflects your Board's desire to return a portion of cash flow to shareholders.
The driving force behind Cambrian's continued expansion over the last year has been the relentless growth in world steel production. Most of this growth has taken place in Asia, led by the rapidly growing steel industry of China. World steel output rose 9.1% in 2004 and by a further 6.9% in the first eight months of 2005. (Source: International Iron and Steel Institute monthly global production figures; released September 2005).
This has led to considerable benefits to the enterprises in which Cambrian invests.
Western Canadian Coal Corp, of which Cambrian owns 41%, has brought the Dillon metallurgical coal mine into production and is now developing a second, larger mine, Perry Creek, which it is hoped will take annual coal production to 3.5 million tonnes.
The rise in value of Western Canadian Coal Corp. and Cambrian's other major coal asset, Asia Energy Plc, has underpinned a significant increase in the market value of Cambrian's listed portfolio to lb119 million at 30 June 2005, compared with lb13.1 million a year earlier. Another lb6.5 million has been invested in unlisted companies and ventures, some of which will be brought to the market this financial year.
Cambrian's portfolio was expanded by the merger in September 2004 with Deepgreen Minerals Corporation Ltd, now a wholly-owned subsidiary of Cambrian, and by additional investments in Western Canadian Coal Corp. and AGD Mining Ltd. We have also made new investments, including an initial stake in iron ore, through Aztec Resources Ltd, and nickel, through Vulcan Resources Ltd.
Cambrian earned pre-tax profits of lb4.4 million for the year mainly through the disposal of non-core assets. We expect that in the future, income generated by associate and subsidiary companies as they reach production and expand their operations will supplement and eventually exceed the income earned from disposals of Cambrian's investments. Western Canadian is expected to generate income in the year ahead.
Since the end of the financial year Cambrian recorded a lb27m gain on the sale of 4.3 million shares of Asia Energy Plc. However, Cambrian's strategy remains that of a traditional mining finance house. We will therefore continue to assume an entrepreneurial role in acquiring resource companies and participate in the planning and implementation of resource projects.
Cambrian's new unlisted investments and ventures include involvements in new coal and mineral ventures and related technologies with the aim of continuing the strong asset growth experienced by Cambrian since its formation.
Notable among these investments are:
the establishment of a new US coal group which is planning to develop in 2006 as a producer of 2 million tons annually of metallurgical and thermal coal
a new venture that, if successful, will greatly increase Cambrian's involvement in energy production through coal-to-liquids or shale oil projects
a greater involvement in iron making and coal processing technologies and investment in prospective, advanced mineral ventures and opportunities
plans for consolidation of our base metals and precious metals interests into one company
We anticipate that operating profit will grow this financial year as the Dillon mine reaches a full 12 months of production, as AGD brings its gold and antimony mine into production in the first quarter of 2006 and the US coal group moves rapidly to achieve its production targets.
Much will depend upon the continuation of strong world commodity markets but comfort that prices for steel-making and energy commodities will remain firm can be drawn from continuing strength in the Asian economies and the time taken to develop new resources and the facilities needed to bring them to market.
Charles de Chezelles
2005 Operational highlights
- Proposed payment of the Company's first dividend (1.5p per share)
- Asset values grow strongly, profits increase
- First coking coal shipments from Western Canadian Coal Corp's Dillon mine in north east British Columbia
- Western Canadian Coal Corp earns maiden profits
- Construction commences on Western Canadian Coal Corp's Perry Creek hard coking coal mine, the first mine in a phased development of the Wolverine Project Area
- Feasibility studies advanced on the Brule coal deposit adjacent to the Dillon mine
- Asia Energy upgrades coal resource to 572 million tonnes, completes feasibility study on major development in Bangladesh
- Formation of US coal group
- Initial investment made in advanced iron ore project on Koolan Island, Western Australia, through Aztec Resources
- Subsidiary, AGD, obtains permits and gives go ahead for Augusta gold/antimony mine development
- Nickel interests strengthened through investments in Vulcan Resources, Asian Minerals and direct exploration in Finland
- Energy and coal technology investments given new emphasis as likely growth areas
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