SUNRISE RESOURCES PLC The Board of Sunrise Resources plc, the AIM-quoted diversified mineral exploration and development company, is pleased to announce audited results for the year ended 30 September 2015.
Operational Highlights for 2015 County Line Diatomite Project, Nevada USA: | |
| Lease agreement with EP Minerals, LLC, a world leading producer of diatomite. |
| Potential for revenue based royalty stream starting within 18 months - at no further costs or risk to Company. |
Bay State Silver Project, Nevada, USA: | |
| Bonanza silver grades from underground sampling. |
| High-grade silver mineralisation intersected in first three drill holes. |
Follow up work budgeted in 2015 at Bay State Silver Project and Cue Diamond Project in Australia and at the newly acquired Pozz Ash Project in Nevada. | |
Commenting on today's results, Patrick Cheetham, Executive Chairman, said: 'The positive announcements made in recent weeks, across a range of projects, confirm that the Company remains on track to deliver on its strategic objectives in developing projects towards cash flow and in adding value to key exploration projects. We look forward to further progress in 2016.
Further information
Patrick Cheetham Executive Chairman Sunrise Resources plc | Tel: +44 (0)845 868 4590 |
Northland Capital Partners Limited Edward Hutton/David Hignell John Howes/Mark Treharne (Broking) | Tel: +44 (0)207 382 1100 |
Yellow Jersey PR Limited Dominic Barretto | Tel: +44 (0)7768 537 739 |
About Sunrise Resources plc
Sunrise Resources plc is an AIM-traded diversified mineral exploration and development company. The Company's objective is to develop profitable mining operations to sustain the Company's wider exploration efforts and create value for shareholders through the discovery of world-class deposits.
The Company has diamond and gold exploration interests in Western Australia and has staked claims and acquired leases over a number of base, precious metal and industrial mineral projects in Nevada, USA. The Company holds a royalty interest from EP Minerals in a Diatomite Project in Nevada and holds a white barite project in South-West Ireland.
Shares in the Company trade on AIM. EPIC: 'SRES'
http://www.sunriseresourcesplc.com
A Diversified Mineral Exploration AIM: SRES | Find out more at
and Development Specialistwww.sunriseresourcesplc.com
Chairman's StatementI am pleased to present the Company's Annual Report and Financial Statements for the year ended 30 September 2015.
Our Strategic Plan has two main objectives. To generate cash flow from more advanced projects, and to add value through mineral discovery by drill testing more speculative exploration targets. I am pleased to report that excellent progress has been made with both objectives in 2015.
We believe that industrial minerals projects have the greatest potential to achieve an early cash flow as these typically have fewer permitting issues, enabling them to be advanced to production more quickly than base or precious metal projects.
This was our objective when acquiring the County Line Diatomite Project and I am therefore delighted to have recently reported a lease agreement with North America's largest diatomite producer, EP Minerals, LLC that could see development of the project at no further cost or risk to our Company. Under the terms of the lease, EP Minerals will fund all future evaluation and development and pay a revenue based royalty to Sunrise Resources. Should EP Minerals, LLC maintain its interest in the project we can look forward to a schedule of minimum royalty payments, starting in less than 18 months' time.
With a similar objective in mind, we have also recently reported the acquisition of a second industrial minerals project in Nevada, the Pozz Ash Project, where we have discovered a potential new source of natural pozzolan, a 'green' alternative to cement in cement and concrete mixes. The deposit outcrops favourably over a wide area with minimal overburden, characteristics shared with the County Line Diatomite Project. Pozzolan samples are currently undergoing industrial testing.
We have renewed our licence over the Derryginagh Barite Project in Ireland for a further two years and additional industrial minerals projects are under consideration with a growing emphasis on Nevada, USA.
In 2015 our drilling activities focused on the Bay State Silver project after receiving exciting silver results from surface sampling and bonanza results from underground sampling along the Chihuahua vein system. Whilst only three drill holes were completed in the first phase of drilling, all three holes hit high-grade silver mineralisation and further drilling is now warranted. A further 14 drill holes have already been permitted which the Company believes should be sufficient for an initial Mineral Resource Estimate should the drilling continue to be successful.
Our Junction Gold Project and our Garfield Copper-Gold-Silver Project have also been readied for drill testing and trenching in 2015 but we have been cautious with all expenditures, with the result that some of the targets set out for drilling in our last Annual Report were not met, most notably in Australia where we have not yet drill tested our new kimberlite discoveries on the Cue Diamond Project or the interesting gold targets on our Baker's and Corona Projects. These remain targets for 2016.
In the current depressed commodity and mining share markets it is our goal to achieve a balance between sufficient fundraising to advance our Strategic Plan and minimising shareholder dilution. Nevertheless I believe our achievements in 2015 are notable given that we have limited our fundraising during the year to just £420,000.
I would also like to highlight the contributions made by my fellow directors who, for another year, have taken their fees in shares in order to reduce cash outflows, a point not always recognised by shareholders.
Our Annual General Meeting will be held on 18thFebruary 2016, and I encourage shareholders to attend.
Patrick Cheetham
Executive Chairman 11 December 2015
Strategic ReportThe Directors of the Company and its subsidiary undertakings (which together comprise 'the Group') present their Strategic Report for the year ended 30 September 2015.
OUR AIM
Is to develop profitable mining operations to sustain the Company's wider exploration efforts and create value for shareholders through the discovery of world-class mineral deposits.
OUR STRATEGY
Includes the targeting of advanced projects which have the potential to generate a sustaining cash flow as well as near-drill stage projects where there is a potential for significant mineral discovery.
We only operate in stable, democratic and mining friendly jurisdictions having low levels of corruption and political risk.
Key points from our strategy and business plan are summarised here and reviewed against our progress in the calendar year 2015 and our targets for 2016:
KEY POINTS | PROGRESS IN 2015 | TARGETS FOR 2016 |
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Principal Activities
The principal activity of the Group is the identification, acquisition, exploration and development of mineral projects. The main areas of activity are Australia and the USA. The Group also has a project in Ireland.
Organisation Overview
The Group's business is directed by the Board and is managed by the Executive Chairman. The Company has a Management Services Agreement with Tertiary Minerals plc ('Tertiary') which is a significant shareholder in the Company (as defined under the AIM Rules). Under this cost sharing agreement Tertiary provides all of the Company's administration and technical services, including the services of the Executive Chairman, at cost. Day-to-day activities are managed from Tertiary's offices in Macclesfield in the United Kingdom, but the Group operates in three other countries. The corporate structure of the Group reflects the historical pattern of acquisition by the Group and the need, where appropriate, for fiscal and other reasons, to have incorporated entities in particular territories.
The Group's exploration activity in Finland is undertaken through a registered branch in Finland. In Australia the Company operates through an Australian subsidiary, Sunrise Minerals Australia Pty Ltd. In Nevada, USA, the Company operates through a local subsidiary, SR Minerals Inc.
The Board of Directors comprises two non-executive directors and the Executive Chairman. The Executive Chairman of the Company is also Chairman of Tertiary Minerals plc, but otherwise the Board is independent of Tertiary.
Financial & Performance Review
The Group is not yet producing minerals and so has no income other than a small amount of bank interest. Consequently the Group is not expected to report profits until it disposes of or is able to profitably develop or otherwise turn to account its exploration and development projects.
The Group reports a loss of £301,271 for the year (2014: £700,295) after administration costs of £256,957 (2014: £368,517) and after crediting interest of £1,348 (2014: £1,855). The loss includes expensed pre-licence and reconnaissance exploration costs of £35,276 (2014: £52,351) and impairment of deferred costs of £10,386 (2014: £281,282). Administration costs include an amount of £10,829 (2014: £128,725) as non-cash costs for the value of certain options and warrants held by employees and others as required by IFRS 2.
The Financial Statements show that, at 30 September 2015, the Group had net current assets of £67,911 (2014: £260,019). This represents the cash position after allowing for receivables and trade and other payables. These amounts are shown in the Consolidated and Company Statement of Financial Position and are also components of the Net Assets of the Group. Net assets also include various 'intangible' assets of the Company. As the name suggests, these intangible assets are not cash assets but include some of this year's and previous years' expenditure on mineral projects where that expenditure meets the criteria in Note 1(d) of the accounting policies. The intangible assets total £753,738 (2014: £513,431) and a breakdown by project is shown in Note 2 to the financial statements. Details of intangible assets, property, plant & equipment and investments are also set out in Notes 8, 9 and 10 of the financial statements.
Expenditures which do not meet the criteria in Note 1(d), such as pre-licence and reconnaissance costs, are expensed and add to the Company's loss. The loss reported in any year can also include expenditure for specific projects carried forward in previous reporting periods as an intangible asset but which the Board determines is 'impaired' in the reporting period.
It is a consequence of the Company's business model that there will be regular impairments of unsuccessful exploration projec ts. The extent to which expenditure is carried forward as intangible assets is a measure of the extent to which the value of Company's expenditure is preserved.
In the current reporting period, an additional amount of £279 was impaired in respect of costs incurred in the year for the Derryginagh Project in Ireland, £9,589 in respect of the Kuusamo Project in Finland and £518 in respect of other diamond projects in Finland.
The intangible asset value of a project should not be confused with the realisable or market value of a particular project which will, in the Directors' opinion, be at least equal in value and often considerably higher. Hence the Company's market capitalisation on the AIM market is usually in excess of the net asset value of the Group.
The Company finances its activities through periodic capital raisings, as share placings and through other innovative equity based financial instruments. As the Company's projects become more advanced there may be strategic opportunities to obtain funding for some projects from future customers via production sharing, royalty and other marketing arrangements. The recently announced agreement with EP Minerals, LLC, which was announced in December 2015, is such an example.
Key Performance Indicators
The financial statements of a mineral exploration company can provide a moment in time snapshot of the financial health of the Company but do not provide a reliable guide to the performance of the Company or its Board.
The usual financial key performance indicators ('KPIs') cannot be applied to a company with no turnover and so the Directors consider that the detailed information in the Operating Review is the best guide to the Group's progress and performance during the year.
In addition the Directors highlight the following KPIs and expect that further KPIs will be reported as the Company progresses through development:
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