TIDMORE
RNS Number : 6366Z
Orogen Gold PLC
11 March 2013
11 March 2013
Orogen Gold Plc
("Orogen Gold", "Orogen" or "the Company")
2012 Full Year Results
Orogen Gold (AIM:ORE), the AIM quoted mineral exploration
company with its flagship project in the historic gold mining
district of Deli Jovan in Serbia, is pleased to announce its
audited results for the year ended 31 December 2012.
Operational Highlights
-- 22 holes for 4,897 metres of exploration diamond drilling
with trenching programme completed at the Gindusa Main Zone
("Gindusa") and Gindusa West Prospect ("Gindusa West")
o Assay results from underground sampling confirmed presence of
high grade gold values in the Gindusa veins ranging from trace gold
up to 63.4 g/t Au over 1m width in channel sampling
o Down hole intercepts of 22.2g/t Au over 0.5m, 16.25 g/t over
0.5m and 13.30 g/t over 1.0m at Gindusa
o New zone of gold mineralisation in a trench at Gindusa West
1.5km northwest of the historic mine, cutting eight metres
averaging 12.3 g/t gold including a three metre zone averaging
almost 1 oz of gold (29.6 g/t)
Financial Highlights
-- Completion of 55% earn-in to Deli Jovan in June 2012, in
accordance with agreement with Reservoir Minerals Inc.
-- GBP1.2 million raised in October through share placing and subscription by Directors
-- GBP204,000 raised through issue of equity in December under Equity Financing Facility
Post-period Highlights
-- Highly prospective gold property optioned within emerging
epithermal gold district in Armenia
-- WH Ireland appointed as sole Nomad & Broker
Ed Slowey, CEO of Orogen, commented today, "2012 saw the Company
make significant progress towards its target of outlining a
preliminary mineral resource at Deli Jovan, during what was
universally considered a difficult economic climate for AIM-quoted
junior explorers. The discovery of a new high grade gold zone at
Gindusa West and the encouraging down hole intercepts at Gindusa
have provided the Company with a solid base as it continues its
first stage drilling programme across the mine area.
"The acquisition of what has the potential to be a significant
epithermal gold system in Armenia evidenced the Company's strategy
in identifying and acquiring early-stage opportunities in what is a
rapidly emerging gold district in Europe.
"With funding in place for the planned work programmes in 2013,
we are looking forward to keeping the market updated and delivering
value to shareholders."
Enquiries:
Orogen Gold Plc +353 1662 8395
Ed Slowey, CEO
Alan Mooney, FD
WH Ireland Limited +44 (0) 20 7220 1666
Tim Feather
James Bavister
Newgate Threadneedle +44 (0) 20 7653 9840
Richard Gotla
Beth Harris
Chairman's Statement
The year of 2012 was a very challenging time for junior gold
exploration and project development companies. Despite such
headwinds Orogen secured financing for the first drilling programme
at the old Deli Jovan gold mining district in Serbia and reached
the 55% equity milestone on time and on budget. Highlight of the
2012 exploration programme was the announcement in December 2012 of
a new discovery west of the old Gindusa gold mine where a trench
cut a three-metre wide zone assaying 29.55 grammes (almost ounce of
gold) per tonne gold within a wider eight metre interval averaging
12.28 g/t. Financing for the next phase of drilling at the Gindusa
Mine which will include trenching and drill testing of a newly
discovered high-grade lode is secure and will commence in the
coming months after the Spring thaw in Serbia.
We have now entered the second phase of the earn-in agreement on
Deli Jovan where we can earn an additional 20% of the project by
committing to a further CAD2 million exploration spend on the
project by end December 2013.
As an exciting start to 2013 management were delighted to
conclude negotiations in January on an earn-in agreement on the
Mutsk gold project in Armenia as part of Orogen's strategy to seize
prospective early-stage growth opportunities at a low entry-cost.
The Mutsk gold project is within an emerging gold district only 30
kilometres from Lydian International's multi-million-ounce gold and
silver Amulsar deposit.
The Group has sufficient cash resources to complete the
currently planned 2013 exploration expenditures on Deli Jovan and
Mutsk including the completion of the 75% earn-in to the Deli Jovan
project.
At Deli Jovan we are proud of our achievements in 2012 and our
excellent health and safety and environmental record. We continue
to move forward on schedule and on budget in a measured and prudent
way to manage investor risk as we probe for the best zones of gold
mineralisation within this historic mining district.
We thank you all for your patience and support as we look
forward to a stream of news flow in 2013 from Serbia and
Armenia.
John Barry
Chairman
Chief Executive's Statement
2012 has been a very active year for Orogen Gold plc. We
completed the underground refurbishment at the historic Gindusa and
Rusman underground mines at our Deli Jovan gold exploration project
in Serbia and carried out a detailed structural mapping and
sampling programme there. We then undertook the initial drilling
and trenching campaign on the property where we have made very
encouraging progress. We are now poised to confirm the potential of
the Deli Jovan project in the coming exploration season. Towards
the end of the year we raised a total of GBP1,435,000 (before
costs) in new equity financing that strengthened our balance sheet
and secures our planned exploration work programmes for 2013.
During the year we put considerable effort into examining a
number of potential additional projects as part of our stated plan
to develop the Company. We were delighted to conclude negotiations
on an earn-in agreement in the Mutsk gold project in Armenia just
after the year end.
Deli Jovan earn-in with Reservoir Minerals Inc.
We achieved the 55% earn-in milestone on the Deli Jovan gold
exploration project in Serbia in June 2012 following our completion
of CAD1.5 million exploration financing of the project.
The 55% earn-in was completed on schedule and the expenditures
incurred to date were in line with our original budget for the work
programme that we set out when initiating the project. The payments
made under the terms of the earn-in agreement with Reservoir
Minerals Inc. were applied to acquire a 55%interest in Deli
JovanExploration d.o.o, the Serbian company operating the Deli
Jovan project. Deli Jovan Exploration d.o.o. has been included as a
subsidiary in the Group's consolidated results from the acquisition
date.
We have now entered the second phase of the earn-in agreement
where we can earn an additional 20% of the project by committing to
a further CAD2 million exploration spend on the project by end
December 2013. At the date of this report we have a cumulative
spend of CAD 2,510,000 on Deli Jovan and we anticipate completing
the 75% earn in during 2013.
Deli Jovan work programme
During the first half of 2012 we completed the opening of the
former mine shafts at Gindusa and Rusman. These were de-watered and
made safe and we carried out a mapping and sampling programme of
the old mine workings extending down to 60 metres on two levels at
Gindusa and 80m on three levels at Rusman during May 2012.
The results of this work were encouraging, particularly in
relation to Gindusa. They confirmed historic reports and identified
the presence of four mineralised quartz vein structures in the
Gindusa underground workings. These are sub-parallel, trending
NW-SE, dip from near vertical to steeply to the southwest and they
occur within a shear corridor at least 80m wide. High grade
gold-mineralised quartz-pyrite veins and lenses occur as pinches
and swells along the fault structures, with individual lenses up to
30m in horizontal extent with greater apparent continuity in
vertical extent. Typically these mineralised veins are 30-70
centimetres in width, up to in excess of 1m locally.
Assay results confirmed the presence of very high grade values
in the Gindusa vein system, ranging from trace gold up to 63.4g/t
Au over 1m width in channel sampling and up to 133.0g/t Au in more
selective chip sampling. Sampling at Rusman also yielded anomalous
gold results, albeit within more restricted mineral lenses.
Ginduša Mine drilling
Based on results of the underground work, the 2012 surface
exploration drilling programme focussed on the Ginduša mine area.
Outside the immediate areas of the old mines a combination of
geological mapping, soil geochemistry and trenching was undertaken
to define further drill targets and to make new discoveries within
the property.
Eight profiles were drilled 25-50 metres apart covering a strike
length of 250 metres. This represents the first drilling campaign
undertaken at the prospect. Most of the drilling was focussed on
testing the continuity at depth of the gold-bearing quartz-pyrite
lodes and fault structures exploited in the old mine workings.
Limited drilling also tested the potential for continuity of the
lodes along strike. Drilling totalled 4,426.5 metres in the 18
holes completed. Assay values (down hole depths, uncorrected for
intersection angle) include 16.25 g/t Au over 0.5m within a wider
interval of 8.3 g/t Au over 1.0m (DE-1), 14.55 g/t Au over 0.5m
within a wider interval of 4.97 g/t Au over 2.5m (DE-3), 9.73 g/t
Au over 1.0m within a wider interval of 2.98 g/t Au over 4.7m
(DE-4), 13.3 g/t over 1.0m within a wider interval of 4.05 g/t Au
over 3.9m (DE-14), 22.2 g/t Au over 0.5m within a wider zone of
8.15 g/t Au over 1.7m (DE-15).
The drilling and subsequent modelling of the veins confirmed
that the shear/vein system continues to at least the full 280m
vertical depth drilled and is open to depth, with low-grade gold
haloes occurring marginal to the main lodes.
A detailed overview of the Ginduša mineralised zones was carried
out by a structural geological specialist. He commented that "the
mineralised shear zone at the Ginduša Mine area comprises multiple
quartz lenses and is likely to be steep plunging, with overall
depth continuity, possibly to considerable depth". It was further
concluded that "while it is possible to develop extensive shear
zones laterally and vertically, gold grade will vary considerably
when intersected in core."
Ginduša West drilling and trenching
At Ginduša West, 1.5km northwest of the Ginduša Mine, four
surface diamond drill holes were completed to test the extension of
a strongly mineralised gold vein, dipping at 50 degrees to the
north, previously mapped and sampled by our JV partners, Reservoir
Minerals, in an old shallow exploration adit. Soil anomalies in the
area suggested that the vein system might be more extensive than
apparent underground. Three holes (DE-GEA1, 2 & 4) were drilled
on a single profile to establish the depth continuity of the vein.
The drilling demonstrated that the mineralised vein zone continues
down dip for approximately 100m, maintaining a width of about one
metre, and remains open to depth. Historic gold grades from
underground channel sampling ranged from 0.5 to 48.9g/t Au, while
drill grades of up to 3.28 g/t Au over 0.5m width from 64.0-64.5m
depth were encountered in Orogen hole DE-GEA1. Of particular
interest was the discovery of two parallel 'blind' quartz-pyrite
veins beneath the previously known vein. One of these veins
intersected in DE-GEA1 yielded 6.75g/t Au over a 0.95m intercept
from 90.65-91.6m. These new veins are open to depth and along
strike, and additional 'blind' veins may remain to be discovered in
the area.
Further evidence of previously unrecorded gold-bearing quartz
veining at Ginduša West was obtained from trench TAG2, which was
sited about 250m to the west of the drill profile to test a gold
anomaly located by soil sampling. This encountered a wide zone of
alteration and shearing of the host gabbro which contained
partially oxidised pyrite mineralisation and quartz veining. Assays
of continuous chip/channel samples through this zone returned
strong gold values, including a 3.0m zone assaying 29.55g/t Au
within a wider 8.0m interval averaging 12.28g/t Au. Follow-up of
this zone will be a priority for Orogen and several other soil
geochemical anomalies also remain to be tested in this area.
Preliminary drilling at the old Rusman mine has confirmed the
conclusions from earlier underground mapping and sampling and has
down-graded this prospect. Given the strong encouragement obtained
on the northern segment of the shear belt at the Ginduša Mine zone
and Ginduša West, including the new trench discovery, Orogen plans
to focus its activities on this sector of the belt.
Mutsk exploration project in Armenia
In January 2013 the Group signed a Memorandum of Understanding
with Georaid CJSC ("Georaid"), an Armenian registered company,
granting exclusive rights to undertake a confirmatory due diligence
exploration programme over the exploration licence held by Georaid
covering the Mutsk gold prospect in southern Armenia. Mutsk is an
early-stage gold exploration project and represents an opportunity
to acquire a property with indications of significant gold
mineralisation within an emerging epithermal gold district which
includes Lydian International's major Amulsar deposit, located just
30km to the northwest. The Mutsk discovery is open-ended, untested
to depth and potentially open-pittable. Initial shallow drilling by
Georaid has intersected mineralisation assaying up to 20.4m @
0.79g/t Au from 15.0 to 35.4m depth, within which a 5.0m zone
assayed 2.75g/t Au from 21.0-26.0m (Hole B-5).
Minimum Phase I exploration expenditures of US$150,000 are
planned for 2013 after which the Group has the option through
continuing investment in the property of US$2.5million by end
August 2016 to earn into 80% of the project.
Corporate
The loss for the year amounted to GBP651,000 (2011
GBP1,214,000). At 31 December 2012 the Group held cash resources of
GBP1,621,000 (2011 GBP2,004,000).
The Group has sufficient cash resources to complete the
currently planned 2013 exploration expenditures on Deli Jovan and
Mutsk including the completion of the 75% earn-in to the Deli Jovan
project.
Our Deli Jovan project is entering a very exciting phase in
2013. This is planned to include infill and extension drilling at
the Gindusa Mine zone to establish the potential for a compliant
mineral resource there, as well as follow-up trenching and drilling
on the exciting new targets identified at Gindusa West. At the same
time we will be investigating the potential of the Mutsk project
which is currently unconstrained in size and presents the
possibility of very attractive project going forward.
We look forward with excitement to the developments during
2013.
Edward Slowey
Chief Executive
Group statement of comprehensive income
For the year ended 31 December 2012
2012 2011
GBP'000 GBP'000
---------------------------------------------- -------- --------
Continuing operations
Revenue 7 -
Operational costs - -
---------------------------------------------- -------- --------
Gross profit 7 -
General and administrative (499) (372)
Share based payments (196) (511)
AIM re-admission costs - (136)
Impairment of investments in subsidiaries
and associates - (200)
Group operating loss (688) (1,219)
Interest received 37 5
---------------------------------------------- -------- --------
Loss on ordinary activities before taxation (651) (1,214)
Tax on loss on ordinary activities - -
---------------------------------------------- -------- --------
Loss for the year from continuing operations (651) (1,214)
Attributable to:
Equity holders of the parent (651) (1,214)
Non-controlling interests - -
---------------------------------------------- -------- --------
(651) (1,214)
---------------------------------------------- -------- --------
Loss per share:
Loss per share - basic and diluted,
attributable to ordinary equity holders
of the parent (0.03) (0.07)
Other comprehensive income
Group loss for the period (651) (1,214)
Exchange translation differences 17 -
---------------------------------------------- -------- --------
Total comprehensive loss for the year (634) (1,214)
Attributable to:
Owners of the parent (634) (1,214)
Non-controlling interests - -
---------------------------------------------- -------- --------
(634) (1,214)
---------------------------------------------- -------- --------
Group statement of financial position
As at 31 December 2012
2012 2011
GBP'000 GBP'000
-------------------------------------- -------- --------
Assets
Non-current assets
Exploration and evaluation assets 4,986 -
Investments - 549
Goodwill - 3,173
Property, plant and equipment 23 -
-------------------------------------- -------- --------
Total non-current assets 5,009 3,722
-------------------------------------- -------- --------
Current assets
Trade and other receivables 368 33
Cash and cash equivalents 1,621 2,004
Total current assets 1,989 2,037
-------------------------------------- -------- --------
Total assets 6,998 5,759
-------------------------------------- -------- --------
Equity and liabilities
Equity
Share capital 2,841 2,567
Share premium 11,325 10,239
Other reserves 729 516
Retained earnings (8,377) (7,726)
-------------------------------------- -------- --------
Equity attributable to owners of the
parent 6,518 5,596
Non-controlling interests 403 -
-------------------------------------- -------- --------
Total equity 6,921 5,596
-------------------------------------- -------- --------
Current liabilities
Trade and other payables 77 163
-------------------------------------- -------- --------
Total current liabilities 77 163
-------------------------------------- -------- --------
Total liabilities 77 163
-------------------------------------- -------- --------
Total equity and liabilities 6,998 5,759
-------------------------------------- -------- --------
Group cash flow statement
For the year ended 31 December 2012
2012 2011
GBP'000 GBP'000
----------------------------------------------- -------- --------
Cash flows from operating activities
Group operating loss (688) (1,219)
(Increase)/decrease in trade and other
receivables (272) 213
(Decrease)/increase in trade and other
payables (156) 24
Impairment loss on investments - 200
Share based payments 196 511
----------------------------------------------- -------- --------
Net cash flow from operating activities (920) (271)
----------------------------------------------- -------- --------
Cash flow from investing activities
Payments advanced as part of project
earn-in (335) (549)
Expenditure on exploration and evaluation (681) -
assets
Net cash inflow on acquisition of subsidiary 130 166
Interest received 37 5
----------------------------------------------- -------- --------
Net cash flow from investing activities (849) (378)
----------------------------------------------- -------- --------
Cash flow from financing activities
Net proceeds from issue of equity instruments 1,360 1,107
----------------------------------------------- -------- --------
Net cash flow from financing activities 1,360 1,107
----------------------------------------------- -------- --------
Net change in cash and cash equivalents (409) 458
Net foreign exchange difference 26 -
Cash and cash equivalents at beginning
of period 2,004 1,546
----------------------------------------------- -------- --------
Cash and cash equivalents at end of
period 1,621 2,004
----------------------------------------------- -------- --------
Notes
1. Approval
Ed Slowey, CEO of Orogen, is a Competent Person as defined by
various international instruments and takes responsibility for the
release of the technical information in this announcement.
2. Financial Information
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 December 2012,
but is derived from those accounts. The auditors have reported on
those accounts; their reports were unqualified and did not draw
attention to any matters by way of emphasis without qualifying
their reports.
3. Annual Report and AGM
The annual report and accounts for the year ended 31 December
2012 will be posted to shareholders on 19 March 2013 and will be
available from the Company's website at www.orogengold.com
shortly.
The annual report incorporates notice of the annual general
meeting which will be held at Finsgate, 5-7 Cranwood Street, London
EC1V 9EE on 9 May 2013 at 12.00 noon.
This information is provided by RNS
The company news service from the London Stock Exchange
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