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Audited Results
05 October 2006
Set out below are the audited financial results for URA for the period from incorporation on 11 January 2005 to 30 June 2006.
EXECUTIVE DIRECTOR'S STATEMENT
It gives me great pleasure to report on the progress Uranium Resources Plc ('Uranium' or 'the Company') has made during the period under review. It is the Company's strategy to acquire, invest and develop uranium projects with the key focus on known deposits predominantly in Southern Africa and Australia and I feel we have made steady progress in fulfilling these objectives.
In line with the Board's expectations, the Group is reporting a pre-tax loss for the period ended 30 June 2006 of £480,510. We are a development company and as such not currently producing revenue. We are keeping a tight rein on costs and are well capitalised with a cash position of £618,354 at 30 June 2006.
The most prominent corporate action during the reporting period occurred in September 2005, when we acquired four uranium prospecting licences in Tanzania for £350,000, following the purchase of Deep Yellow Tanzania Ltd. The consideration comprised of £50,000 in cash and the issue of 6,000,000 ordinary shares at 5p per share. The licences, covering an area of approximately 3,800 sq km, represent one of the largest uranium exploration land packages in Tanzania.
Three of the licences are located in the Mkuju River area in southern Tanzania, an area recognised as being one of the country's most highly prospective uranium targets. The licences, originally identified by the German company Uranerzbergbau GmbH ('Uranerz') during reconnaissance exploration between 1978 and 1982, will make the Company the largest land holder in the Mkuju River region. The Company has since been granted a fifth licence, the Ruhuhu licence, to the southeast of the existing Mkuju River licences. The Ruhuhu licence contains a number of high level airborne radiometric anomalies which the Company will assess during the current field programme.
In April 2006 we signed a farm in agreement with Australian Stock Exchange listed Western Metals Limited ('WMT'). Under the agreement WMT has the opportunity to earn a 40% interest in our Tanzanian prospecting licences by spending AUD$2 million on the licences on or before the second anniversary of the agreement becoming unconditional. WMT may increase its interest to 60% by spending a further AUD$2 million within a further two years. WMT must spend AUD$500,000 within 12 months of the completion of the agreement.
In April 2006 the team delineated five areas in the licences worthy of an immediate reconnaissance field trip. In May 2006 we announced positive results from a short reconnaissance field trip in the Mtonya group of tenements in the southern part of Tanzania, which revealed outcropping uranium mineralisation with a peak assay result of 975ppm (0.098%) U3O8.
This programme was managed by Drake-Brockman Geoinfo Pty Ltd, the operating company of Dr Joseph Drake-Brockman, who was appointed in September 2005. Dr Joseph Drake-Brockman has worked in uranium exploration for 20 years mainly in Australia and Tanzania.
Drake-Brockman Geoinfo Pty Ltd conducted a further field work programme at the Mtonya group of tenements in August. The first phase of the field work consists of radiometric traverses to confirm the size, continuity and magnitude of the airborne anomalies, sampling of hotspots to verify uranium mineralisation, trenching of mineralised zones to estimate thickness and orientation and geological mapping of trenches and outcrops to establish the parameters controlling the mineralisation. Results from this programme are expected to be available shortly. Assuming positive results, the Company will plan a drilling programme to commence as soon as practicable.
Key to our strategy is a strong management team and Board that possess the skills to identify, acquire, finance and develop a portfolio of uranium assets. Post year end we appointed James Pratt to the Board as a non-executive Director. He replaced Leon Pretorius who stepped down due to other business commitments. James has over 18 years experience in the mining and exploration industry, primarily in Australia and Africa, and also has extensive corporate experience through his involvement in a number of companies listed on the ASX and AIM markets.
With today's high commodity prices and fluctuating markets there is a great case for seeking alternative energy sources, and the international energy arena is providing a platform for these new energy ventures to occur. Although Uranium Resources is still in the early stage of development, we feel that there is great opportunity for it not only to become a significant player in the uranium market but also for nuclear energy to become a preferential energy choice, being one of the only base-load power sources that does not produce greenhouse gases.
We are confident that we have the team in place to achieve our objectives and remain focussed on creating shareholder value. Finally I would like to thank all those involved with the Company for their hard work and I look forward to the future with confidence.
Ross Warner
Director
5 October 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD FROM INCORPORATION ON 11 JANUARY 2005 TO 30 JUNE 2006
Notes £ 2006
£
Group turnover 2 -
Cost of sales -
_________
Gross profit -
Administrative expenses
Administrative expenses before
amortisation of goodwill (488,104)
Amortisation of goodwill (27,708)
(515,812)
Group operating loss
- continuing (515,812)
Interest receivable 35,302
Loss on ordinary activities
before taxation (480,510)
Taxation 4 -
Loss on ordinary activities
after taxation (480,510)
Loss for the period (480,510)
Dividends -
Retained loss for the period (480,510)
Loss per share
Basic 3 (0.24)p
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2006
Notes £ 2006
£
Fixed assets
Intangible assets 5 363,470
Current assets
Debtors 2,182
Cash at bank and in hand 618,354
620,536
Creditors: Amounts falling due
Within one year (12,489)
Net current assets 608,047
Net assets 971,517
Capital and reserves
Called up share capital 6 211,000
Share premium account 7 1,174,360
Profit and loss account 7 (413,843)
Shareholders' funds 8 971,517
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD FROM INCORPORATION ON 11 JANUARY 2005 TO 30 JUNE 2006
Notes £ 2006
£
Net cash outflow from
operating activities 9 (411,130)
Returns on investments and
Servicing of finance
Interest received 35,302
(375,828)
Acquisitions and disposals
Net funds used for investing in exploration (41,179)
Acquisition of a subsidiary undertaking (50,000)
Cash acquired with a subsidiary undertaking 1
Net cash outflow from acquisitions (91,178)
Net cash outflow before financing (467,006)
Financing
Proceeds from issue of share 1,150,000
Issue costs (64,640)
Cash inflow from financing 1,085,360
Increase in cash 11 618,354
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIOD FROM INCORPORATION ON 11 JANUARY 2005 TO 30 JUNE 2006
1. Basis of preparation
The accounts are prepared in accordance with the historical cost convention and
in accordance with applicable accounting standards and the Statement of
Recommended Practice 'Accounting for Oil and Gas Exploration, Development,
Production and Decommissioning Activities'.
The financial information contained in this report does not constitute full
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The figures are extracted from the audited full financial statements for the
period ended 30 June 2006 which will be filed with the Registrar of Companies in
due course.
2. Turnover
At the end of the financial year, the Group had not commenced commercial
production from its exploration sites and therefore had no turnover in the
period.
3. Earnings per share
The loss per ordinary share of 0.24p is based on the loss for the financial
period of £480,510 and 198,358,879 ordinary shares, being the average number of
shares in issue for the period.
No diluted loss per ordinary share has been disclosed because the conversion of
share options would decrease the net loss per share.
4. Taxation
Group
2006
£
Current Tax
UK corporation tax on profits for the period -
Adjustments for previous periods -
________
Total current tax charge -
=======
Factors affecting tax charge for period
Loss on ordinary activities before tax (480,510)
Tax on loss on ordinary activities at the
standard rate of UK corporation tax of 30% (144,153)
Effects of:
Expenses not deductible for tax purposes 21,198
Depreciation 8,312
Tax losses 114,643
________
Total current tax charge -
=======
5. Intangible assets
The movements during the period were as follows:
Exploration and Goodwill Total
appraisal
expenditure £ £
£
Cost
Additions 41,179 349,999 391,178
At 30 June 2006 41,179 349,999 391,178
Amortisation
Amortisation for the period - (27,708) (27,708)
At 30 June 2006 41,179 322,291 363,470
Net book value
At 30 June 2006 41,179 322,291 363,470
The goodwill of £349,999 arose on the acquisition of the Company's subsidiary
undertaking, Deep Yellow Tanzania Limited during the period. Goodwill is being
amortised over the Directors' estimate of its useful economic life of 10 years
until the production commences. On commencement of production, it will be
amortised on a unit of production basis based on proven and probable reserves.
In accordance with the accounting policy, the Directors have
assessed the value of the exploration and appraisal expenditure carried in the
accounts as intangible fixed assets. In the opinion of the Directors, no
impairment provision is considered necessary.
6. Share Capital
Group and Company
2006
£
Authorised
10,000,000,000 ordinary shares of 0.1p each 10,000,000
Allotted, called up and fully paid
Ordinary shares of 0.1p each
100,000,000 shares issued to founder members 100,000
105,000,000 shares issued on placement 105,000
6,000,000 shares issued on acquisition of Deep Yellow Tanzania Limited 6,000
As at 30 June 2006 211,000
The Company was incorporated on 11 January 2005 with an authorised share capital
of £10,000,000 divided into 10,000,000,000 ordinary shares of 0.1 p each, of
which 2 shares were issued fully paid, on incorporation.
On 27 January 2005 the founders subscribed for an aggregate of 99,999,998
ordinary shares, all at par value to raise £99,999.99.
On 15 February 2005, 105,000,000 ordinary shares were issued at 1.0p each for
cash
In addition, on 15 September 2005, the Company issued 6,000,000 ordinary shares
at 5.0p each in connection with the acquisition of Deep Yellow Tanzania Limited.
The movements in the share capital are summarised below:
Number of
Shares
Issue for cash - founder members 100,000,000
Issue for cash - placement 105,000,000
Shares issued on acquisition of Deep Yellow Tanzania Limited 6,000,000
At 30 June 2006 211,000,000
The share premiums arising as a result of above transactions are as follows:
2006
£
Issue of shares for cash - placement 945,000
Issue of shares on acquisition of Deep Yellow Tanzania Limited 294,000
1,239,000
7. Statement of movements on reserves
Movements in the share premium and profit and loss account during the period
were as follows:
Share Profit
Premium and loss
£ £
Group
Issue of shares (note 6) 1,239,000 -
Issue costs (64,640) -
Retained losses - (480,510)
Share options reserve (UITF 17) 66,667
At 30 June 2006 1,174,350 (413,843)
Share Profit
premium and loss
Company £ £
Issue of shares (note 6) 1,239,000 -
Issue costs (64,640) -
Retained loss for the period - (452,802)
Share options reserve (UITF 17) - 66,667
At 30 June 2006 1,174,360 (386,135)
The share options reserve of £66,667 has been calculated in accordance with UITF
17. As the share options were cancelled after the year end when the director
left the employment of the Company, the related credit has been taken to profit
and loss reserve.
8. Reconciliation of movements in shareholders' funds - equity only
2006
Group Company
£ £
Loss for the period (480,510) (452,802)
Dividends - -
(480,510) (452,802)
Share issues less costs 1,385,360 1,385,360
Share options reserve (UITF17) 66,667 66,667
Closing shareholders' funds 971,517 999,225
9. Reconciliation of operating loss to net cash inflow from operating
activities
2006
£
Group operating loss (515,812)
Amortisation of goodwill 27,708
Increase in debtors (2,182)
Increase in creditors 12,489
Share options charge (UITF17) 66,667
Net cash outflow from operating activities (411,130)
10. Analysis of changes in net funds
Cashflows 2006
£ £
Cash at bank and in hand 618,354 618,354
11. Reconciliation of net cash flow to movement in net funds
2006
£
Increase in cash 618,354
Movement in net funds 618,354
Net funds at 30 June 2006 618,354
12. Availability of Accounts
The financial information set out above does not constitute the Company's
statutory accounts for the period from Incorporation on 11 January 2005 to 30
June 2006, but is derived from those accounts. Statutory accounts for the
period have been delivered to the Registrar of Companies.
Copies of the accounts will be posted to shareholders in due course and will
also be available free of charge for collection at the following address:
30 Farringdon Street
London
EC4A 4HJ
| Contacts: | ||||
| Ross Warner |  |
Uranium Resources plc | |
Tel: 07760 487 769 |