Date: 23rd February 2005
CHAIRMAN'S STATEMENT
HIGHLIGHTS:
I am pleased to report that the year 2004 was an excellent year for the company. Our investment strategy remained consistent and we harvested some of the benefits of our conservative investment policy.
During the year, your directors bought back 18.4 million shares representing 7.8% of the total number of shares in issue. The directors are of the opinion that the company's shares were undervalued and as such represented an excellent buy-back opportunity. These shares are held in treasury and may be cancelled, held or resold as the directors deem appropriate in the best interest of the shareholders.
The year under review was one of consolidation for the resource sector with the AIM market outperforming other international resource markets. It is encouraging to note that generalist fund managers continue to take positions in new and secondary resource offerings.
The forecast for commodity prices remains good with nickel and copper looking particularly strong on the demand side. Gold and platinum group metals continue to show price resilience with potential for price increases. Basic commodities such as iron ore and coal are also enjoying buoyant demand with robust producer pricing leading to long term demand at industry beneficial prices.
The aforementioned has led to the major mining companies posting significant profit increases, further attracting investor support to the resource industry.
Integral to the increased profitability is the demand from China and South East Asia. The question now is will this demand continue. The directors believe that even if general demand is reduced, the emergence of this region alongside traditional demand will still maintain supply pressure on base metals.
Our investment strategy remains consistent i.e. people, project and places with the emphasis on quality. We will, during 2005, structure our portfolio to be proactive in that we may take positions in new listings or possibly be part of the listing process.
Whilst we expect 2005 to be a good year for resource stocks we believe a part "pro-active" approach will allow us to outperform the sector.
As well as investing in more junior exploration companies, we will also seek out resource investments which are close to production, since we are of the opinion that the investment cycle will result in fund managers favouring maturing companies against emerging explorers.
I would like to thank our shareholders for their continued support and my fellow directors and management for their efforts during the year.
Finally, I would like to state my optimism for 2005 and assure our shareholders of our intent to further enhance the value of their company in the current year.
R B Rowan - Chairman
23 February 2005
TIGER RESOURCE FINANCE PLC ('Tiger')
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER, 2004
PORTFOLIO REVIEW (2004)
INVESTMENTS | Number 31/12/04 |
Cost 31/12/04 £ |
Valuation 31/12/04 £ |
African Eagle Resources Plc | 1,241,174 | 112,264 | 274,299 |
Alamos Gold Inc | 106,293 | 27,610 | 164,852 |
Ascent Resources Plc | 22,500,000 | 225,000 | 1,012,500 |
Bullion Resources Plc | 9,000,000 | 180,000 | 382,500 |
Formation Capital Corp | 2,025,000 | 207,043 | 375,129 |
Franconia Minerals Corp - OFEX | 333,333 | 45,432 | 63,333 |
Franconia Minerals Corp - TSE | 625,000 | 107,562 | 107,712 |
Gold Fields Ltd | 10,500 | 32,759 | 66,799 |
Minmet Plc | 17,471,488 | 241,135 | 471,730 |
Pacific North West Capital Corp | 566,500 | 107,682 | 119,587 |
Ridge Mining Plc | 100,000 | 178,477 | 50,000 |
River Diamonds Plc | 6,666,666 | 100,000 | 216,667 |
Tertiary Minerals plc | 1,330,000 | 119,700 | 119,700 |
FAIR VALUE OF WARRANTS & OPTIONS | |||
Cambrian Mining Plc (1) | 1,350,000 | - | 2,034,750 |
Franconia Minerals Corp - OFEX (2) | 166,667 | - | - |
Franconia Minerals Corp - TSE (3) | 312,500 | - | - |
River Diamonds Plc (4) | 13,333,333 | - | 233,333 |
MIT Ventures Corp Loan Note | - | 40,000 | 40,000 |
1,724,664 | 5,732,891 |
Warrants included in the above investment list are as follows:
* There were no adjusting post balance sheet events. On 14 February 2005, the Company exercised 1,200,000 warrants and 150,000 options held in Cambrian Mining Plc paying a total consideration of £375,000. The carrying value of the warrants and options was £2,034,750. The shares acquired upon exercise of the warrants were subsequently sold for net proceeds of £2,708,708 resulting in a profit of £2,333,708 compared to the original cost of purchase.
African Eagle Resources Plc: (AIM) - AFE www.africaneagle.co.uk
Tiger holds 1,241,171 shares in African Eagle Resources Plc ("African Eagle"). African Eagle explores for and develops gold and other mineral resources in eastern and southern Africa. The company acquired a 75% interest in the Igurubi project on which it recently completed a 17-hole, 1,190m reverse circulation drilling programme. The results demonstrated that the system contains significant gold mineralisation in the form of narrow but high-grade vein-like structures. In Zambia, a drilling programme and an airborne geophysical survey proceeded on its Mweze copper prospect. Tiger believes that African Eagle has good prospects, which will continue to impact favourably on the share price as further exploration results emerge.
Alamos Gold Inc: Toronto Stock Exchange (TSE) - AGI www.alamosgold.com
Tiger holds 106,293 shares in Alamos Gold Inc ("Alamos") purchased at a cost of £27,610. Alamos fully owns the Mulatos deposit, one of the largest undeveloped gold resources located in the state of Sonora, Mexico. This deposit, which is at mineable development stage and slated for production in 2005, was acquired from Placer Dome Inc. and Kennecott Minerals Company. Alamos also own the Salamandra property which was purchased for C$8.7 million equivalent to US$1.64 per gold resource ounce. Tiger believes that Alamos has good assets and anticipates that its share price will move in unison with the gold price. Consequently, we will monitor the company's share price closely.
Ascent Resources Plc (AIM) - AST
Tiger acquired 22,500,000 shares at a cost of £225,000 following a placing by Ascent Resources Plc ("Ascent") in November 2004. The company was admitted to AIM on 10 November 2004. Ascent Resources has been formed for the purpose of making investments in the mining, minerals, and oil and gas sectors. This investment has performed well for Tiger and was valued at £1,012,500 at 31 December 2004 reflecting an increase of 350%.
Bullion Resources Plc (AIM) - BLO
Tiger purchased 9,000,000 shares for a total consideration of £180,000 in Bullion Resources Plc ("Bullion").
In September 2004, Bullion agreed to dispose of the entire issued share capital and loan accounts of its subsidiary, Black Reef Gold Limited to Minerale Afrique Limited for a consideration of ZAR 5 million (approx. £454,000). The company also completed a fundraising totalling £625,000, further strengthening its treasury and positioning itself for a future reverse takeover transaction. Bullion has announced that it is holding exploratory discussions with suitable candidates and will keep shareholders informed of further developments. Tiger believes that Bullion has an experienced and entrepreneurial management team and should perform well in 2005.
Cambrian Mining Plc (AIM) - CBM www.cambrianmining.com
Tiger sold 1,350,000 shares in Cambrian Mining plc ("Cambrian") during the year for a consideration of £1,306,225 realising a profit of £1,006,225 and a return of 335% on original cost. Tiger acquired a further 1,350,000 shares at a cost of £375,000 by exercising options in January 2005. Cambrian is a diversified natural resource exploration and development company. The Cambrian investment performed extremely well in 2004 with success mainly attributable to Cambrian's 27% stake in Asia Energy Plc. Asia Energy's sole asset is the Phulbari coal deposit in north-west Bangladesh. The deposit contains more than 400 million tonnes of high quality thermal coal. Recent economic studies estimate post-tax project Net Present Value ("NPV") of US$2.3 billion. Tiger exercised 1,200,000 warrants and 150,000 options at a total cost of £375,000 and subsequently sold 1,350,000 Cambrian shares for a total consideration of £2,708,708 in February 2005.
Formation Capital Corporation: Toronto Stock Exchange (TSE) - FCO www.formcap.com
Tiger holds 2,025,000 shares in Formation Capital Corporation ("Formation"). Formation's fully owned flagship property, Idaho Cobalt, a primary cobalt project in the Idaho Cobalt Belt in the United States, is in the feasibility and permitting stage of development. The company recently announced final drill results from its 25,000 foot, 28 hole drill program on the project, confirming the downdip extension of mineralisation along a strike length of 2,200 feet of a known 2,400 feet of strike. The company also recently announced its intention to raise US$8 million (gross) by private placement. This investment is essentially a call option on the Cobalt price and Tiger will maintain an active watch on Cobalt futures.
Franconia Minerals Corporation (OFEX/TSE) - FRA www.franconiaminerals.com
Tiger acquired 625,000 shares in Franconia Minerals Corporation ("Franconia") at a cost of £107,562, following Franconia's dual listing on the Toronto Stock Exchange in which the company raised CDN$ 1.5 million. Franconia exercised its earn-in option on the Birch Lake platinum-palladium-copper-nickel property in the Duluth Complex of Minnesota and commenced a metallurgical testing programme on the property. In addition to the company's San Francisco drill-ready zinc property in the western US, Franconia acquired the Mahoney property, a high-grade zinc target in New Mexico. Franconia has interesting projects, a well regarded management team and provides Tiger with exposure to the US mining scene.
Gold Fields Limited: Johannesburg Stock Exchange (JSE) - GFI www.goldfields.co.za
Gold Fields Limited ("Gold Fields") is one of the world's largest producers of gold, operating in three key gold mining regions of the world, South Africa, West Africa (Ghana) and Australia. At the end of June 2004, Gold Fields had attributable precious metal mineral resources of 190.6 million ounces (195.3 million ounces - 2003) and attributable gold mineral reserves of 75.6 million ounces (81.5 million ounces - 2003). The earnings potential for the company is excellent against current gold prices and should impact favourably on profitability. At year-end, Tiger held 10,500 shares in the company valued at £66,799. The current takeover battle for the company has clouded results projections. Tiger, however believes that irrespective of the conclusion, the underlying assets should perform very well in a strong gold market.
Minmet Plc: Irish Stock Exchange (ISE) - MNT www.minmet.ie
Tiger sold 4 million shares in Minmet Plc ("Minmet") during the year, realising a profit of £78,486 compared to the original cost of purchase. At year-end, Tiger held a total of 17.5 million shares valued at £471,730. Minmet is a European gold producer with international mining and exploration interests. It is focused on generating positive cash flows from its Björkdal gold mine in Sweden having acquired both the crushing and the milling plants with an annual processing capacity of 1.2 million tonnes of ore, producing high value gold concentrates. Minmet acquired a 58% controlling shareholding in TSX-V listed GoldQuest Mining Corporation, which acquired Minmet's gold exploration interests in the Dominican Republic. The company also holds interests in exploration projects, principally for gold, in Brazil and Peru. Tiger perceives Minmet to be a well managed production/ exploration company and looks forward to a focus emerging from the company's current portfolio.
Pacific North West Capital Corp: Toronto Stock Exchange (TSE) - PFN www.pfncapital.com
Tiger holds 566,500 shares in Pacific North West Capital Corp ("PFN") valued at £119,587 on 31 December 2004. PFN is exploring for platinum group metals close to Sudbury, the nickel/copper mining region of Ontario and near Ketchikan south east Alaska. The company has as partners, Anglo Platinum in Canada and Lonmin plc in Alaska. The company increased the combined mineral resource estimate (measured and indicated Pt+Pd+Au) on its River Valley project to more than 1.1 million oz (previous 593,000 oz) following completion of its phase 6 program. PFN commenced a CDN$3 million phase-7 programme to continue to March 2005. On PFN's Union Bay Platinum project, Lonmin increased the programme budget by US$600,000 to US$1.8 million following favourable results from the Phase 1 exploration programme. This company, despite its excellent technical results, has traded in a disappointingly low share price. We will continue to follow progress closely.
Ridge Mining Plc: London Stock Exchange (LSE) - CLU www.cluff-mining.com
Tiger holds 100,000 shares in Ridge Mining Plc ("Ridge"), previously Cluff Mining Plc, valued at £50,000 at year-end. Ridge has reported good progress at its three main platinum and associated metal projects, Sheba's Ridge; Blue Ridge and Fountain Ridge on the Bushveld Complex of South Africa. The pre-feasibility study on its Sheba's Ridge Platreef joint venture is reported to be on target for completion in March 2005. Tiger awaits with interest the results of the feasibility study of Sheba's Ridge.
River Diamonds Plc (AIM) - RID www.riverdiamond.co.uk
Tiger acquired a further 3,333,333 shares in River Diamonds Plc ("River Diamonds") at a cost of £50,000. River Diamonds owns diamond and gold exploration licences in the Mato Grosso area of Brazil covering 57,000 ha. In August 2004, River Diamonds moved from OFEX to AIM raising £1.68 million. The company is focused on large scale alluvial deposits in the Mato Grasso region. Early stage production has begun at the first project, Melgueira, and is expected to increase to 2,700 tonnes per day by January 2005. River Diamonds, one of the first companies operating in Brazil to receive its Kimberley Export Licence, is now exporting diamonds to sell at a premium in the Antwerp market. This investment provides Tiger with a speculative position in the junior diamond sector, which is showing signs of buoyancy.
Tertiary Minerals Plc (AIM) -TYM www.tertiaryminerals.com
Tiger holds 1,330,000 shares in Tertiary Minerals Plc ("Tertiary") valued at £119,700. Tertiary is involved with tantalum, platinum group metals, base metals and gold. The company has interests in a number of mineral exploration projects in Sweden, Finland, Norway and Saudi Arabia including projects at drill-ready and preliminary economic feasibility stages. At Notträsk, the Company's main nickel prospect in Sweden, it has prepared a geophysical programme to cover the entire central part of the intrusion in the search for Voisey's Bay style massive nickel sulphides. Drilling is likely in the early summer. The company's Finnish Diamond Project remained a high priority in an active exploration portfolio. With continued hardening of the tantalum market the company is considering the start of preliminary feasibility studies on its world-class tantalum deposit in Saudi Arabia. The company has a good base of projects along with a strong management team. We would welcome one of the projects emerging as a lead project, which in our opinion would provide stronger investor confidence.
PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 DECEMBER 2004
2004 £ |
2003 £ | |
Administrative expenses | (332,892) | (287,645) |
OPERATING LOSS | (332,892) | (287,645) |
Profit on sale of fixed asset investments | 340,014 | 547,747 |
Investment income | 690 | 50,234 |
Other Income | 7,500 | 7,500 |
Interest receivable | 134,048 | 88,846 |
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION | 149,360 | 406,682 |
Tax on profit on ordinary activities | 65,374 | (104,028) |
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION FOR THE YEAR | 214,734 | 302,654 |
Basic and diluted earnings per share | 0.09p | 0.13p |
All profits are derived from continuing operations
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
YEAR ENDED 31 DECEMBER 2004
2004 £ |
2003 £ | |
Profit for the year after taxation | 214,734 | 302,654 |
Unrealised gains on fixed asset investments | 3,100,122 | 2,727,465 |
Unrealised losses on fixed asset investments | (655,545) | (85,074) |
Tax on gains/losses on fixed asset investments | (369,209) | (160,271) |
Total recognised gains | 2,290,102 | 2,784,774 |
BALANCE SHEET
AS AT 31 DECEMBER 2004
2004 £ |
2003 £ | |
FIXED ASSETS | ||
Investments | 5,732,891 | 4,533,734 |
CURRENT ASSETS | ||
Debtors | 11,755 | 11,962 |
Cash at bank | 3,732,178 | 2,991,055 |
3,743,933 | 3,003,017 | |
CREDITORS: amounts falling due within one year | (446,461) | (421,707) |
NET CURRENT ASSETS | 3,297,472 | 2,581,310 |
TOTAL ASSETS LESS CURRENT LIABILITIES | 9,030,363 | 7,115,044 |
Represented by: CAPITAL AND RESERVES | ||
Called-up share capital | 2,358,819 | 2,358,819 |
Share premium account | 1,554,856 | 1,554,856 |
Revaluation reserve | 4,008,228 | 2,818,695 |
Profit and loss account | 1,108,460 | 382,674 |
EQUITY SHAREHOLDERS' FUNDS | 9,030,363 | 7,115,044 |
CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2004
2004 £ |
2003 £ | |
Net cash (outflow) from operating activities | (345,032) | (264,983) |
Returns on investment and servicing of finance | ||
Interest received | 131,548 | 110,585 |
Other income and investment income received | 8,190 | 57,734 |
139,738 | 168,319 | |
Taxation | ||
Corporation tax paid | (264,234) | (6,604) |
Capital expenditure and financial investment | ||
Payments to acquire fixed asset investments | (512,562) | (961,631) |
Receipts from sale of fixed asset investments | 2,097,996 | 1,660,246 |
Net cash inflow from capital expenditure and financial investment | 1,585,434 | 698,615 |
Financing | ||
Proceeds from exercise of options | - | 17,000 |
Purchase of own shares for treasury | (374,783) | - |
Net cash (outflow)/inflow from financing | (374,783) | 17,000 |
Increase in cash in the year | 741,123 | 612,347 |
This preliminary statement is not the company's statutory accounts. The statutory accounts for the year ended 31 December 2004 have been approved by the directors and have received an audit report which was unqualified and did not contain statements under s237(2) and (3) of the Companies Act 1985. These statutory accounts have not been delivered to the Registrar of Companies and will be sent to shareholders on 7 March 2005.
The statutory accounts for the year ended 31 December 2003 have been delivered to the Registrar of Companies and have received an audit report which was unqualified and did not contain statements under s237(2) and (3) of the Companies Act 1985.
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