10/12/2007

  

  

For immediate release

10 December 2007

A meeting for analysts will be held at 10am on the morning of the results, 10 December 2007, at the offices of Buchanan Communications, 45 Moorfields, London EC2Y 9AE.  The investor presentation, which will be used at the analyst meeting, will be made available on Aurum's website, www.aurummining.net.    

AURUM MINING PLC

("Aurum" or "the Company")

  Interim Results for the year ended 30 September 2007

Aurum Mining plc (AIM: AUR), the gold-mining company focussed on the Former Soviet Union (FSU) and whose principal asset is the Andash Project in the Kyrgyz Republic, is pleased to announce its interim results for the six months ended 30 September 2007.  

This is the first set of accounts that the Company has released adopting International Financial Reporting Standards (IFRS) and therefore the format of these results is different to recent reports. The adoption of IFRS represents an accounting policy change only, the details of which are included in the notes to these accounts.

Highlights  

• Substantial progress in the period ensuring that the Andash Zone I mine remains on time and within budget for initial production of gold and copper in H2 2008
• Appointment of Professor Muratbek Imanaliev, the President of the Institute of Public Policy in the Kyrgyz Republic, as chairman of the local advisory board to the Andash Mining Company, Aurum's Kyrgyz subsidiary
• Commitment to the Talas Valley underlined by plans for a $1 million social fund to be launched after production commences at Zone 1
• Exploration work on-going with initial assay results from the Tokhtonysay opportunity expected imminently along with the final report from geophysical work at Nakhodka  

Strong balance sheet with net cash of £25.5 million (H1 2006: £1 million). Pre-tax loss for the half year of £325,000 (H1 2006: loss of £834,000)

Sean Finlay, Aurum's Chairman, commented: "We have entered the second half of our financial year in a strong position and we look forward to calendar year 2008 with confidence and excitement. The Andash project is becoming increasingly de-risked, which, together with our significant exploration opportunities and the continuing strength of metal prices, underlines the increasing and on-going attractiveness of our business."

For further information:

Aurum Mining plc	Tel: 020 7478 9050
Mark Jones, Chief Executive Officer Chris Eadie, Chief Financial Officer
Arbuthnot Securities	Tel: 020 7012 2000
John Prior John Toll
Buchanan Communications	Tel: 020 7466 5000
Mark Court / Rebecca Skye Dietrich

Notes to editors

Aurum Mining, which joined the AIM market of the London Stock Exchange in May 2004, is a mining company focussed on gold opportunities in the Former Soviet Union. Its principal asset is an exploration licence over the Andash gold and copper project in the Kyrgyz Republic. A mining licence for Andash Zone 1 was awarded by the Kyrgyz authorities in 2006. The feasibility study compiled by Wardell Armstrong International, also in 2006, confirmed a measured and indicated resource base of 19.2 million tonnes at 1.1 grams per tonne of gold and 0.4% copper, which equates to 1.1 million ozs of gold and gold equivalent. Initial production at Andash Zone 1 is expected in the second half of 2008. The Andash project also includes Zone 2 and Zone 3 along with Tokhtonysay, Nakhodka and three other additional exploration areas.

Aurum Mining plc

 

Chairman's and Chief Executive's statement

_____________________________________________________________________________

 

The six month period to 30 September 2007 has been another period of sustained progress at Aurum. This progress has increased in momentum since the period end and we are entering the 2008 calendar year with a business confidently positioned to deliver our strategic objective of becoming a copper and gold producer during the second half of next year.

From the outset of the Andash project we were committed to taking a responsible approach to mining in the region and we are delighted to be able to announce plans for a $1 million social fund to benefit the local population within the Talas Valley. This fund, which will be managed by local trustees and be dedicated to social, educational and cultural development projects in the Andash area, will be initiated after production commences at the Zone 1 mine. We believe the success of the Andash project can be achieved only through ensuring a commonality of interests between ourselves and local, regional and national groups. Our proposed social fund underlines our objective of making a very positive on-going contribution to the Kyrgyz Republic.

To ensure that local people are fully informed about all aspects of the project, we have opened an information centre in Kupero Bazaar, the nearest village to the mine. This centre will be a focal point for information sharing between Aurum's wholly owned subsidiary the Andash Mining Company (AMC) and the local community.  AMC is itself becoming an increasingly important employer in the region, with current staff numbers totalling around 115.

To further strengthen our position in the region, we are also establishing a local advisory board for AMC and, in respect of this, we are delighted to announce the appointment of Professor Muratbek Imanaliev as the Chairman of this board. Professor Imanaliev is currently the President of the Institute for Public Policy in the Kyrgyz Republic, and he is also a Professor at the American University of Central Asia. Professor Imanaliev is a former Ambassador of the Kyrgyz Republic to the People's Republic of China, and he has twice held the position of the Minister for Foreign Affairs. He also holds the diplomatic rank of Ambassador Extraordinaire and Plenipotentiary of both the former USSR and the Kyrgyz Republic. We are both delighted and very proud that he has decided to join AMC, and we are convinced that he will assist us in our objective of developing the AMC into a world class sociably responsible and economical gold and copper producer. We will update the market further when the structure of AMC advisory board has been finalised and all relevant appointments made.

As the Andash mine development progresses we are able to determine our capital expenditure (capex) requirements for the Zone 1 mine in much greater detail, and we remain on track to complete the Zone 1 mine within both our forecast timeline and in-line with our forecast capex budget. In addition, we are in negotiations to secure leasing arrangements over our mining fleet and drilling equipment with the overall objective of optimising and preserving the Group's cash position ahead of cash generation from the Zone 1 mine.

As announced in our AGM statement in November 2007 we have been granted an extension to the time period for the completion of the technical design work for the Andash mine. This extension, from the end of November 2007 to the end of May 2008, further demonstrates the quality of our working relationship with the Kyrgyz authorities and has given us additional flexibility in finalising some key design features of the mine, including the tailings dam and the open pit, while allowing us to initiate the primary construction phase.

Concurrently with the finalisation of the design details, we have sourced and identified a substantial amount of the mining and processing plant for the Zone 1 mine. The first phase of construction has now started, with the primary access road contract now underway. Ball mills have been ordered with delivery next year in line with our requirements, and the mining fleet is already en route from Australia and the US. We do not foresee any problems in procuring the remaining plant required to meet our timeline commitments.

A further milestone for the Group will be the signing of an Investment Agreement between ourselves and the Kyrgyz Government. As it currently stands, the Agreement sets out the framework of our investment in the Kyrgyz Republic and the signing of the Agreement will show our ability to work efficiently and effectively in the Kyrgyz Republic. In order to get the Investment Agreement ratified by Government it is necessary to first get approval from 16 different ministries. AMC's Investment Agreement has now been approved by all 16 of these ministries and the agreement has now been passed back to Government for final approval. This whole process highlights the significant support we have developed within the Government.

Exploration update

The local geophysical exploration work at Nakhodka has been completed, and we await the final report which we hope to announce before the end of the year. Our initial drilling programme at Tokhtonysay has struck mineralisation and the core has been prepared and sent in for independent assay. We will update the market imminently on the results of this work.  

Financials

The Board of Aurum is pleased to announce the Group's results for the half year to 30 September 2007. This is the first set of accounts that the Group has released adopting International Financial Reporting Standards (IFRS) and therefore the format of these results is different to recent reports and there are some changes to the accounting policies, details of which are in the notes.

On a Group basis, loss before tax for the half year was £325,000 (H1 2006: loss of £834,000) with loss per share of 0.71p (H1 2006: loss per share of 7.12p). The balance sheet remains strong following the fundraising in March this year with net cash at the balance sheet date of £25.5 million (30 September 2006: £1 million).

Outlook

We have entered the second half of our financial year in a strong position and we look forward to calendar year 2008 with confidence and excitement. The Andash project is becoming increasingly de-risked, which, together with our significant exploration opportunities and the continuing strength of metal prices, underlines the increasing and on-going attractiveness of our business.

Sean Finlay                             

Chairman

Mark Jones

Chief Executive Officer  

Aurum Mining plc

Please download the full document below for further information.