Lero Gold Corporation
1 Red Place
London, W1K 6PL
United Kingdom
Tel :+44 (0)20 7518 3999
Fax :+44 (0)20 7518 3998
info@lerogold.com
www.lerogold.com
Lero Gold Corp.
Results for the Period December 31, 2007
Lero Gold Corp. (�Lero� or �the Company�) (TSX-V:LER) � a base and precious
metal exploration company with assets in Kyrgyzstan and Kazakhstan today
reports its results for the period ended December 31, 2007. All amounts are
reported in United States dollars unless otherwise indicated. Canadian dollars
are referred to herein as CAD$.
HIGHLIGHTS
February 2007
Acquisition of the Karchiga copper volcanogenic massive sulphide (VMS) project
in Kazakhstan
March 2007
Granting of the Barkol exploration licence in Kyrgyzstan to Lero
June 2007
Lero completed a second private placement with Gold Fields Exploration B.V.
(�Gold Fields�) to raise CAD$233,420 to invest specifically into the Barkol
exploration licence
Lero entered into an agreement for the sale of all of the shares of Tournon to
a subsidiary of Delta Industrial B.V.I. The sale of the shares did not
complete, as announced by the Company on November 26, 2007
Lero completes comprehensive re-interpretation of geophysical and geochemical
data at the Taldybulak licence
Lero commenced a >5,000m drilling programme in the Talas area in Kyrgyzstan
July 2007
Lero commenced a 1,800m confirmatory drilling programme at Karchiga project in
Kazakhstan
December 2007
Lero completed a private placement of 10,000,000 common shares at a price of
CAD$0.25 per share to raise CAD$2,500,000
Oriel Resources plc disposed of 100 per cent. of its interest (30,000,000
common shares or approximately 49.35 per cent. of the issued share capital at
that time) in the Company
February 2008
Lero completes 1,879m diamond drilling programme at the Karchiga project
March 2008
Lero appointed two new Directors and officers, Dr. Alexander Yakubchuk, as
Director and Chief Executive Officer, and Massimo Carello, as a Non-Executive
Director. Darryl Yea resigned as Non-Executive Chairman of the Company.
April 2008
European Minerals Corporation (�EMC�) announces intention to acquire Lero Gold
Corp.
Lero enters into a CAD$60 million private placement
Directors accepted David Swan�s resignation from the position of Chief
Financial Officer and Company Secretary
Lero appoints Randy Reichert as Chief Operating Officer, Petro Mychalkiw as
Chief Financial Officer and Tania Tchedayeva as Company Secretary
Dr Sergey V Kurzin, Chairman of Lero Gold Corp. commented:
�During 2007 and into 2008, several important and strategic relationships were
built, key management appointments were made and significant resource
calculations were reported for our Kyrgyz and Kazakh-based exploration
projects.
Given the potential merger with EMC, Gold Field�s involvement in the Taldybulak
project, the reported resource estimates for the Karchiga and Taldybulak-Talas
projects and the potential merger with EMC, I believe the Company is well
positioned to significantly grow its profile of base metal exploration and
development opportunities within the Central Asian region.�
MANAGEMENT�S DISCUSSION AND ANALYSIS
A full Management�s Discussion and Analysis of the results for the year ended
December 31, 2007 (�MD&A�) and Financial Statements (�Financials�) for the
Company for the year ended December 31, 2007 are available on SEDAR (www.sedar.com)
or on the Company�s website (www.lerogold.com). These can also be
obtained on application to the Company. The following information has been
extracted from the MD&A and the Financials.
FINANCIAL RESULTS
Results for the Year
The Company has incurred a net loss for fiscal year 2007 of $4.2 million
compared to $2.8 million for 2006, an increase of $1.4 million.
Interest income for fiscal year 2007 was $94,000 compared to $55,000 for fiscal
year 2006. The increase is due to the Company holding increased cash balances
in fiscal year 2007.
Other income of $94,000 for 2007 represents a withheld deposit following the
non-completion of the disposal of the Company�s wholly-owned subsidiary
Tournon, which through its wholly-owned subsidiary Oriel in Kyrgyzstan LLP,
holds the Company�s exploration and mining licence for the Tokhtazan and Akdjol
areas in western Kazakhstan.
Administration costs for fiscal year 2007 were $1.9 million compared to $1.6
million for fiscal year 2006. The increase of $0.3 million is in line with Management�s expectations
and reflects the costs of increasing the Company�s management team commensurate
with the requirements of a listed entity. Fiscal year 2007 administration costs
includes stock based compensation of $0.6 million compared to $0.8 million in
2006. During 2007, following the Reverse Takeover Transaction, the Company
awarded options to members of its Board, Management and employees.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2007 the Company had unrestricted cash of $2.9 million (2006 -
$3.5 million).
At December 31, 2007, the Company�s consolidated working capital comprising
cash, accounts receivable and prepaid expenses and less accounts payable and
accrued liabilities was $1.7 million compared to $3.4 million at December 31,
2006. The decrease in working capital arose as a result of cash used in
operations during the year exceed receipts from the issue of shares. The
Company�s liability of $1.1m to Oriel Resources Plc at December 31, 2007 was
included in current liabilities as it was repaid in full in April 2008.
The Company�s spending incurred on its Tokhtazan, Taldybulak and Karchiga
prospects during the year have been financed through equity or debt
contributions from shareholders as and when required. Although the Company has
been successful in the past in raising equity, there can be no assurance that
any funding required by the Company in the future will be made available to it
and, if such funding were to be made available, that it would be offered on
reasonable terms. If the Company were unable to raise such financing, it may
not be able to continue as a going concern. As a result, material adjustments
would be required to the carrying value of assets and liabilities and the
balance sheet classifications used and the reported amounts of income and
expenses.
In July 2006, the Company completed private placements linked to the RTO
raising total gross proceeds of CAD$4.165 million. Issue costs totalled $0.4
million and have been recorded as a reduction of share capital.
In September 2006, the Company exercised an option to acquire the entire issued
share capital of Kami Associates Limited. The cash element of the consideration
was $1.5 million.
In November 2006, the Company completed a private placement with Gold Fields
Limited for the gross proceeds of CAD$2.5 million. In connection with this
private placement the Company is required to spend at least CAD$2.0 million of
the placement funds on further exploration of the Company�s Taldybulak project.
In June 2007, the Company completed a private placement of 466,840 common
shares at a price of C$0.50 per share to Gold Fields Exploration B.V., a
subsidiary of Gold Fields, for proceeds of $201,093, net of share issue costs
of $5,730.
In December, 2007, the Company completed a private placement of 10,000,000
common shares at a price of C$0.25 per share for proceeds of $2,246,353, net of
share issue costs of $267,726.
REVIEW OF OPERATIONS
TALDYBULAK-TALAS EXPLORATION LICENCE
Within the Taldybulak-Talas Exploration Area, Lero currently holds four licence
areas. The Taldybulak copper-gold porphyry deposit is the Company�s primary
exploration property.
For avoidance of confusion;
1. The Taldybulak copper-gold porphyry deposit within the Taldybulak-Talas
Exploration Licence area is a separate deposit from the Taldybulak Levoberezhny
gold deposit previously owned by Central Asia Gold Limited, and
2. The Talas Copper Gold Limited Liability Company, the holder of the Lero�s
Taldybulak licence is a separate company from Talas Gold Mining Company, which
is the owner of the Jerooy Gold Project.
Taldybulak copper-gold porphyry deposit
A 2007 - 2008 drilling programme was completed to better delineate the extent
and geometry at Taldybulak Central and assess the additional tonnage potential
through the testing of peripheral targets along strike to the east, north west
and south of the central high grade core.
Results from the recently completed geological modelling and resource
evaluation studies have confirmed the potential for a large open-pittable Cu-Au
porphyry target at Taldybulak Central. These results have given Lero a solid
foundation from which to calculate an NI 43-101 compliant resource estimate for
Taldybulak Central and to further expand and advance exploration activities in
2008.
The resource estimate has been calculated at various gold cut-off grades and incorporates
all drilling data obtained for the Taldybulak-Talas copper-gold project by end
Q1 2008. At a 0.30g/t gold cut-off, the Indicated resource is 79Mt @ 0.63g/t Au
and 0.17% Cu with the Inferred resources totalling 163Mt @ 0.58g/t Au and 0.14%
Cu.
Taldybulak-Talas Copper-Gold Project, Mineral Resource Estimate.
Note: Au_eq=Au g/t + 2.5x Cu %
Metal equivalent: metallurgical recoveries and net smelter returns are assumed
to be 100%
Kentash Project Area
Limited work has been performed on the Kentash licence to date however stream
sediment geochemistry completed during 2006 returned high copper and gold
values, indicating potential for further occurrences of mineralisation along
the corridor linking Andash and Taldybulak.
In 2007, Lero completed a widely-spaced soil geochemical survey over the entire
Kentash licence. This returned some gold, copper and molybdenum anomalism in 3
areas which will be further assessed in 2008. In 2007, the widely-spaced IP
survey revealed chargeability anomalies in the central part of the license to
be further assessed in 2008.
Korgontash Project Area
The Tokhtonnisai copper-gold skarn project lies within the Korgontash licence
area, Talas Oblast, north western Kyrgyzstan. A trenching programme was
completed in 2006 with the objective of validating the width and grade of a
copper-gold anomaly outlined at Tokhtonnisai during the Soviet era. A total of
10 trenches twinning Soviet era trenches were sampled. Some very encouraging
results were obtained from the trenching programme. During June 2006, 4 lines
of DD-IP geophysics were completed across the prospect. The results indicated a
steeply north dipping chargeable body extending to the NE beneath cover and
beyond the limit of the current sampling. Lero drilled two 150m diamond drill
holes to test the trench and geophysical targets during November 2006. Drilling
failed to adequately test the targets as it appears that the mineralisation
dips at a shallower angle than had been interpreted, however, broad widths of
low grade mineralisation were intersected in hole TTDD-01.
In 2007, Lero covered the area north of the contact with granitoid batholiths
with widely spaced soil geochemical survey. This survey revealed gold and
copper anomalism east of Tokhtonnisai and west of the Aktash exclusion licence.
Due to late completion of the survey in November 2007 these targets were not
followed up, but they will be more thoroughly assessed in 2008.
In 2007, Lero drilled 3 additional diamond drill holes at the Tokhtonnisai
prospect, which returned some good intercepts, generally in line with the
previous Soviet data (Table below).
Significant Tokhtonnisai drill results in 2007
TOKHTAZAN EXPLORATION LICENCE AREA
In 2006, Lero initiated a trench sampling program at the Tokhtazan, Akdzhol and
Kurpsai prospects which returned promising gold values that warrant further
trenching and drilling. Three diamond drill holes were completed in late 2006
returning a best intersection of 5m at 6.2g/t at the south east of the deposit.
The 2007 programme consisted of chip and channel sampling, which returned
results in line with historical intercepts. The Company is actively seeking to
dispose of this asset.
Within the Akdjol licence the company performed 3,140 cubic metres of trenching
and road cut sampling, with some 2,532 samples collected. Within the Tokhtazan
licence, 1,540 cubic metres of trenching and road cutting were performed, with
640 samples collected.
KARCHIGA EXPLORATION LICENCE
In February 2007, Lero Gold Corp. entered into an agreement to purchase 73.9%
of �Eildon Enterprises Ltd� the registered and beneficial owner of 94.75% of
the capital of GRK MLD LLP (�MLD�), a limited liability partnership
incorporated under the laws of the Republic of Kazakhstan. Upon completion of
this transaction Lero indirectly owns 70% of MLD.
The Karchiga copper-gold licence area, which covers a total area of 47.3km2, is
a mid-Palaeozoic aged metamorphosed volcanogenic massive sulphide deposit (VMS)
located in the extreme north east of the Republic of Kazakhstan, within 40km of
the Chinese border The project is readily accessible and is situated on gentle
undulating terrain.
Mineralisation at Karchiga occurs as shallow dipping tabular bodies of massive
and disseminated chalcopyrite-pyrrhotite-pyrite ranging from 2 to 25m thick
that are hosted by highly metamorphosed amphibolite and micaceous schist. The
mineralisation appears to be geologically continuous for 1km of strike length
and robust.
The 2007 programme consisted of geophysical surveys, geological mapping and
geochemical sampling to identify new mineralised targets along the 10km of
strike length of the VMS horizon. Eight widely-spaced IP profiles were
completed during 2007 and revealed the presence of additional chargeable
targets which require in-fill geophysical profiling. The soil geochemical
assays are pending.
In 2007, Lero drilled 21 confirmatory holes totalling 1,879 m and 3 trenches
within the historically identified resource at Karchiga. The exploration
results have confirmed the dimensions of the known mineralisation and historic
Soviet assays completed between 1941 and 1984.
On 22 April 2008, Lero reported a National Instrument 43-101 compliant resource
estimate for the Karchiga VMS deposit. The resource incorporates the 1,879m of
confirmation diamond drilling completed by Lero in Q4 2007 and 86 historical
Soviet diamond drill holes and trenches totalling 10,330m. At a 0.50% copper
cut-off, the Indicated resource is 4.75Mt @ 2.46% Cu while the Inferred
resources total 2.81Mt @ 1.81% Cu.
Karchiga Copper Project, Resource Estimate April 2008
BARKOL EXPLORATION LICENCE
In March 2007, Lero was granted the 223km2 Barkol exploration licence, located
immediately to the west of the Taldybulak project and was acquired at no cost to
the company. The Barkol licence contains numerous occurrences of known
mineralisation, with one copper-gold-molybdenum deposit occurring within a 2km2
excision from the licence. Lero has undertaken an estimated annual expenditure
commitment on the Barkol licence of US$200,000, with exploration work due to
commence spring 2007.
During 2007, Lero completed soil geochemical sampling over areas of
historically mapped alteration. This returned some anomalous results for Au, Cu
and other base metals. These areas were also covered by widely-spaced IP
geophysical survey, which returned some chargeability anomalism in the areas
west of Chonur exclusion licence and in the central western part of the Barkol
licence. These anomalisms will be followed up during 2008.
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CAUTIONARY NOTE REGARDS FORWARD-LOOKING STATEMENTS
Certain statements in this MD&A constitute forward-looking statements. The
words "anticipate�, "continue", "estimate",
"expect", "may", "will", "should",
"believe", �potential� and similar expressions are intended to
identify forward-looking statements. Such forward-looking statements, including
but not limited to statements with respect to anticipated rates of production,
the estimated costs and timing of the Company's planned work programs and
reserves determination involve known and unknown risks, uncertainties and other
factors which may cause the actual rates of production, costs and results to be
materially different from estimated rates of production, costs or results
expressed or implied by such forward-looking statements.
The Company believes the expectations reflected in these forward looking
statements are reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements should not be
unduly relied upon. Factors that could cause actual results to differ materially
from those anticipated in these forward-looking statements include, among
others, uncertainties associated with estimating reserves, competition for,
among other things, capital, acquisitions of reserves, undeveloped properties
and skilled personnel, risks related to international operations, general risks
associated with mining operations, risks associated with equipment procurement
and equipment failure and volatility in market prices. Although the Company has
attempted to take into account important factors that could cause actual costs
or operating results to differ materially, there may be other factors that
cause costs of the Company's program or results not to be as anticipated,
estimated or intended.
Additional information relating to the Company is available on SEDAR at www.sedar.com
ENDS
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Notes to Editors:
1. Lero Gold Corporation (TSX-V: LER) is a base and precious metal exploration
company led by a senior management team with extensive expertise in mineral
exploration and advanced project management. In July, 2006 Oriel Resources Plc
completed its previously announced transfer and sale of its gold related assets
into Lero Gold Corporation (�Lero�) (formerly ELE Capital Corporation � �ELE�).
Lero resumed trading on TSX Venture Exchange (TSX-V) on Thursday July 27, 2006
under the trading symbol �LER�. Lero Gold is currently seeking and evaluating
advanced exploration stage gold and base metal projects in Kazakhstan and
Kyrgyzstan. Lero is currently exploring advanced staged gold deposits in the
Tien Shan gold belt in the Kyrgyz Republic and Rudny Altai belt in the Republic
of Kazakhstan.
2. Information Concerning Estimates of Measured, Indicated and Inferred
Resources.
This market announcement also uses the terms 'indicated resources' and
'inferred resources'. Lero Gold Corp. advises investors that although these
terms are recognised and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognise them. Investors are
cautioned not to assume that any part or all of the mineral deposits in these
categories will ever be converted into reserves. In addition, 'inferred
resources' have a great amount of uncertainty as to their existence, and
economic and legal feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis
of feasibility or pre-feasibility studies, or economic studies except for
Preliminary Assessment as defined under 43-101. Investors are cautioned not to
assume that part or all of an inferred resource exists, or is economically or
legally mineable.
3. Resource estimations were carried out by Julian Woodcock and reviewed by
Matthew Boyes (Senior Geologist and a Qualified Person under National
Instrument 43-101). Assays are conducted at the internationally certified Alex
Stewart Lab in Bishkek, Kyrgyzstan. Lero Gold Corporation operates a stringent
QA/QC policy that includes external certified standard samples and blanks in
each individual batch sent for analysis. Wardell Armstrong International is
currently reviewing methodology and interpolation parameters used in the block
model.
4. For avoidance of confusion;
a. The Taldybulak-Talas copper gold porphyry is a separate deposit from the
Taldybulak Levoberezhny gold deposit previously owned by Central Asia Gold
Limited, and
b. The Talas Copper Gold Limited Liability Company, the holder of the Lero
owned Taldybulak licence, is a separate company from Talas Gold Mining Company
which owned the Jerooy Gold project.
5. In November 2006, Lero granted Gold Fields Exploration B.V. an option to
enter into a joint venture agreement with the Company under which Gold Fields
Exploration B.V. has the right to;
a. earn up to a 60% interest in exploration licences on the Kentash, Taldybulak
and Korgontash tenements in the Talas Region by funding exploration
expenditures of up to CAD$10 million, and
b. increase its interest in the project by a further 10% (to a total of 70%) by
funding the expenditure of up to a further CAD$10 million on a feasibility
study. Thereafter, Gold Fields Exploration B.V. and Lero will contribute to the
project requirements on a pro-rata basis through to development, if
appropriate.
6. Gold Fields Exploration B.V. is an indirect wholly owned subsidiary of Gold
Fields Limited.
7. The TSX Venture Exchange does not accept responsibility for adequacy or
accuracy of this release.
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For further information please contact:
Alexander Yakubchuk, CEO, Lero Gold Corp.
Tel: +44 (0) 20 7514 0590
Tania Tchedayeva, Company Secretary, Lero Gold Corp.
Tel: +44 (0) 20 7514 0590
Gavin Dallas, Investor Relations, Lero Gold Corp.
Tel: +44 (0) 20 7514 0590
Keith Schaefer, Vanguard Shareholder Solutions
Tel: + 1 604 608 0824
Michael Padley / Michael Spriggs, Bankside Consultants
Tel: +44 (0) 20 7367 8888
www.lerogold.com
Lero Gold
Vanguard Shareholder Solutions
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Solutions (Vanguard) provides, for remuneration, corporate communications and
investor relations services to the above mentioned client(s). The information
contained in this email is based on existing disclosure documents or other
publicly available information. You are encouraged to seek independent verification
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inquiry neither Vanguard nor the above mentioned client(s) is offering
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