🕐09.06.09 - 08:16 Uhr

PNG RNS 090609 - Preliminary Results YE 31 December 2008



9th June 2009
Persian Gold PLC
Preliminary Results for Year Ended 31 December 2008
Highlights:
Chah-e-Zard Gold-Silver Project * Discovery Certificate applied for on 160,000 ounces of gold and 1 million ounces of silver * Scoping study shows significant returns on 15,000 ounce a year gold heap leach mine
Dalli Gold and Copper-Gold Project * Two separate orebodies 1.7 kilometres apart * Discovery Certificate application being finalised on the copper-gold orebody * Scoping study indicates commerciality of small SXEW mine
* Significant flow of potential new projects
John Teeling, Chairman of Persian Gold, commented; "Persian Gold continues to make progress in Iran with both of our advanced exploration projects.

At Chah-e-Zard, we await the issue of a Discovery Certificate prior to undertaking a mine feasibility study.

At Dalli, we are finalising a Discovery Certificate application on the copper / gold part of the orebody.
We have a first mover advantage, being the only European mining company active in Iran.

We see a significant flow of new gold projects in Iran and in adjacent countries."
Persian Gold PLC
John Teeling, Chairman
+353 (0) 1 833 2833 FinnCap
Matthew Robinson +44 (0) 20 7600 1658 College Hill
Paddy Blewer +44 (0) 20 7457 2020
Nick Elwes
Persian Gold PLC - Statement Accompanying the Preliminary Results
It is a clich� to say that we are operating in interesting times.

Exploration companies accept uncertainty and volatility as part of their normal operating environment, but the scenario facing Persian Gold for the past eighteen months is not normal.

It had to happen; cheap credit led to excess, fear replaced greed and credit simply evaporated.
Economic growth has stopped, wealth has vapourised and political uncertainty increased.

Many blue chip stocks have fallen by 90% or more.

As mineral prices collapsed, and credit disappeared, mining share prices crumbled.

Collateral values collapsed leading to forced sales.

Derivatives such as Contracts for Difference (CFDs) exacerbated the fall.

Liquidity almost ceased.


Persian Gold, an Irish managed company with a London Stock Exchange (AIM) listing, focused on gold and copper gold exploration projects in Iran, could not avoid the mayhem.

Our share price is down 90%, and it has become difficult to raise new cash.

Persian Gold did well to raise STG�400,000 new equity, but note it was 50% subscribed by the Directors.


The recession is temporary but the potential in Iran is permanent.

To remind shareholders, Iran is a vast country estimated to contain significant quantities of gold, copper and other base metals.

Political uncertainty during the past 30 years has resulted in limited exploration using modern techniques.

Sanctions have made it difficult for large mining companies to invest.

Opaque rules on mineral ownership have not facilitated investment.

Persian Gold, as an Irish controlled, Irish managed company, has been able to navigate the complexities.

We find ourselves one of the few, if not the sole, Western company actively exploring for minerals in the country.


The focus of our activity is the vast, underexplored Tethyan Belt, stretching in an arc from Turkey in the Northwest through Iran and extending into Pakistan in the Southeast - 2,000 kilometres of prospective ground.

There have been numerous gold discoveries on the Turkish end of this belt, while Barrick Gold and Antofagasta are developing the ever growing worlds largest copper / gold orebody, Reko Diq, located on the Pakistan / Iran border.
As a small company, Persian Gold cannot undertake the large scale reconnaissance which the Tethyan Belt deserves.

Instead, we reduce risk by concentrating on areas and / or projects with known mineralisation.


We have two advanced projects.

Chah-e-Zard, a gold-silver deposit near Yazd in Central Iran, and Dalli, a copper-gold project about 200 kilometres south of Tehran.

Chah-e-Zard is the most advanced project.

We await a Discovery Certificate giving us the right to exploit 160,000 ounces of gold and 1 million plus ounces of silver in near-surface oxide ore.

A scoping study indicates that a US$4 million capital expenditure will enable us to mine 15,000 ounces of gold a year at a grade of 1 gramme a tonne with an 80% recovery.

The small heap leach operation should have operating costs of US$10 per tonne of ore.

Once we obtain the necessary permits, it should take 9 months to construct.

Persian Gold will own 70% of the project with a local partner holding the remaining 30%.
The Chah-e-Zard licence has a mineralised zone of 1.25 kilometres x 0.75 kilometres and appears to have better gold grades in the sulphide zone 30 / 50 metres below the surface.

Cash from the mine could be used to explore and drill out the property.


Dalli is a copper / gold project where we had high hopes of discovering a large orebody.

Two phases of drilling and geophysics led to the conclusion that there are two separate orebodies on the licence, about 1.7 kilometres apart.

The South Hill is copper / gold while the North Hill is gold.

Modern copper extraction technology, SXEW, which has enabled the commercial development of smaller orebodies may be appropriate here.

A conceptual study of Dalli suggests that a US$20M investment could produce up to 50,000 tonnes of copper.

We are completing the work necessary to apply for a Discovery Certificate.
Our exploration activities are limited by our finances.

Our experienced geological team in Iran is producing a flow of potential targets in Iran and in adjacent countries.

We are having to be very selective, focusing on gold projects with the potential to contain at least 1 million ounces.

Ideally, we would take a partner who would add finance and some technical skills to our advantages, which are access, people, experience and projects.

Many mining companies want to be in Iran but most are reluctant to commit in the present political and economic environment.
In Iran, we have signed Memoranda of Understanding with a bank specialising in mining, a State mining venture and local mining companies.

Each one is showing projects to Persian Gold.

We are evaluating them using modern technology.

In the event of a commercial find, the local partner will access local funds while Persian Gold will operate and bring in external finance.
FUTURE The potential in Iran remains.

There will be large gold, copper and zinc mines developed, but they need to be discovered.

The current economic turmoil has all but destroyed investor interest in exploration companies.

In times like these, bad news is magnified and good news ignored.

Add political uncertainty to the economic chaos and it is easy to understand why investors in general ignore companies such as ours.

Raising risk capital is very difficult.
But for the discerning investor, the returns can be large.

There are faint signs of an economic recovery in the wider world.

The global political scene also has positive indicators, such as the new administration in the U.S., while the election in Iran will give a 4 year mandate to the winner.

But it will be some time before these factors translate into investor confidence in junior companies.
Persian Gold has early mover advantage in Iran.

We have built an experienced organisation well capable of performing in the environment.

We have good late stage projects and a flow of new proposals.

As the economic and political uncertainty clears, we will be well positioned.
John Teeling Chairman
9th June 2009
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008
31/12/2008
31/12/2007


REVENUE -
- Cost of sales -
- GROSS PROFIT -
- Administrative expenses (316,524)
(394,950) OPERATING LOSS (316,524)
(394,950) Finance income 7,957
16,868 Finance costs (1,800)
(1,301) LOSS BEFORE TAXATION (310,367)
(379,383) Income tax expense -
- LOSS AFTER TAXATION (310,367)
(379,383) LOSS PER SHARE - Basic and diluted (0.48p)
(0.66p)
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008
2008
2007

� ASSETS:
NON CURRENT ASSETS
Intangible assets 1,831,551
1,283,362 CURRENT ASSETS
Other receivables 12,697
20,085 Cash and cash equivalents 194,125
693,076
206,822
713,161 TOTAL ASSETS 2,038,373
1,996,523 LIABILITIES:
CURRENT LIABILITIES
Trade and other payables 170,759
271,977 NON-CURRENT LIABILITIES
Provision 10,000
10,000 TOTAL LIABILITIES 180,759
281,977 NET ASSETS 1,857,614
1,714,546
EQUITY
Called-up share capital 186,656
158,531 Share premium 2,654,764
2,314,113 Retained earnings - (deficit) (1,198,442)
(888,075) Share based payment reserve 214,636
129,977 TOTAL EQUITY 1,857,614
1,714,546
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008
Called-up Share Capital
Share Premium Share Based Payment Reserve Retained Earnings-Deficit
Total

� � � � At 1 January 2007
139,507 1,246,034 55,288 (508,692) 932,137 Share based payments
- - 74,689 - 74,689 Shares issued for cash
19,024 1,122,386 - - 1,141,410 Share issue expenses
- (54,307) - - (54,307) Loss for the year
-
-
-
(379,383)
(379,383)
At 31 December 2007
158,531 2,314,113 129,977 (888,075) 1,714,546 Share based payments
- - 84,659 - 84,659 Shares issued
28,125 421,875 - - 450,000 Shares issue expenses - (81,224)
- - (81,224) Loss for the year
-
-
-
(310,367)
(310,367)
At 31 December 2008
186,656
2,654,764
214,636
(1,198,442)
1,857,614
Share premium The share premium reserve comprises of a premium arising on the issue of shares.
Share based payment reserve The share based payment reserve comprises of share based payments made in 2007 and 2008.
Retained earnings (deficit) Retained earnings (deficit) comprises of losses incurred in 2008 and prior years.
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008
2008
2007

� CASH FLOW FROM OPERATING ACTIVITIES
Loss for financial year (310,367)
(379,383) Finance costs recognised in loss 1,800
1,301 Finance revenue recognised in loss (7,957)
(16,868) Share based payment -
59,413 Exchange movement 10,549
- Shares issued in lieu of fees 212,749
-
(93,226)
(335,537) MOVEMENTS IN WORKING CAPITAL
(Decrease)/increase in trade and other payables (101,218)
72,122 Decrease/(increase) in trade and other receivables 7,388
(16,556) CASH USED BY OPERATIONS (187,056)
(279,971) Finance cost (1,800)
(1,301) Finance income 7,957
16,868 NET CASH USED IN OPERATING ACTIVITIES (180,899)
(264,404) CASH FLOWS FROM INVESTING ACTIVITIES
Payments for intangible assets (544,754)
(438,883) NET CASH USED IN INVESTING ACTIVITIES (544,754)
(438,883) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of equity shares 237,251
1,087,103 NET CASH GENERATED FROM
FINANCING ACTIVITIES 237,251
1,087,103
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (488,402)
383,816 Cash and cash equivalents at beginning of the financial year 693,076
309,260 Effect of exchange rate changes on cash held in foreign currencies (10,549)
- Cash and cash equivalents at end of the financial year 194,125
693,076
Notes:
1.

Accounting Policies
The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRSs as adopted by the European Union.
2.

Earnings per Share
Basic loss per share is computed by dividing the loss after taxation for the year available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year.

Diluted earnings per share is computed by dividing the profit or loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.
The following table sets out the computation for basic and diluted earnings per share (EPS):
2008
2007

� Numerator
For basic and diluted EPS retained loss (310,367)
(379,383)
Denominator No.
No. For basic and diluted EPS 64,090,280
57,720,785
Basic EPS (0.48p)
(0.66p) Diluted EPS (0.48p)
(0.66p)
Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive and is therefore excluded.


3.

Intangible Assets
2008
2007
2008
2007
Group
Group
Company
Company



� Exploration and evaluation assets:
Cost:
At 1 January 1,283,362
819,203
1,283,362
819,203 Additions during the year 548,189
464,159
288,427
464,159 At 31 December 1,831,551
1,283,362
1,571,789
1,283,362 Carrying Value:
At 31 December 1,831,551
1,283,362
1,571,789
1,283,362
Exploration and evaluation assets relates to expenditure incurred prospecting, exploration for gold and related expenditure in Iran.
The realisation of this intangible asset is dependent on the discovery and successful development of economic mineral reserves which is affected by the risks outlined below.

Should the realisation of the intangible asset prove unsuccessful the value included in the balance sheet would be written off to the income statement.
The groups exploration activities are subject to a number of significant and potential risks including:
- price fluctuations - foreign exchange risks - uncertainties over development and operational risks - operations and environmental risks - political and legal risks, including arrangements with governments for licenses, profit sharing and taxation. - foreign investment risks including increases in taxes, royalties and renegotiation of contracts - liquidity risks - funding risks
The directors are aware that by its nature there is an inherent uncertainty in such development expenditure as to the value of the asset.

Having reviewed the deferred exploration and evaluation expenditure at 31 December 2008, the directors are satisfied that the value of the intangible asset is not less than carrying value.


Included above is an amount of �3,435 (2007: �15,276) of capitalised expenses related to equity-settled share-based payment transactions during the year.
4.

General Information
The financial information set out above does not constitute the Companys financial statements for the year ended 31 December 2008.

The financial information for 2007 is derived from the financial statements for 2007 which have been delivered to the Registrar of Companies.

The auditors have reported on 2007 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.

The financial statements for 2008 will be delivered to the Registrar of Companies following the Companys Annual General Meeting.


A copy of the Companys Annual Report and Accounts for 2008 will be mailed to all shareholders shortly and will also be available for collection from the Companys registered office, 20-22 Bedford Row, London WC1R 4JS.

The Annual Report and Accounts may also be viewed on Persian Gold plcs website at www.persiangoldplc.com .
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