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NORTH RIVER RESOURCES PLC

('North River')

ANNUAL RESULTS FOR THE YEAR ENDED 30 JUNE 2008

CHAIRMAN'S STATEMENT

North River has recently announced two new Directors in Glenn Whiddon and Martin French and Luke Bryan as Chief Operating Officer.

In the tough environment that we all face, it is imperative to be mindful that opportunities will arise and that North River needs to be positioned to act. In this regard, our new Directors and Luke have joined us and Glenn and myself will provide operational funding until equity funding is required.

North River continues with its joint venture in Australia but will be seeking other resource projects over time subject to stringent review and financing.

Obviously, the resource industry and our ability to finance an acquisition is undergoing dramatic changes. I am confident that when an attractive opportunity is identified, we will be in a favourable position to properly assess and complete a transaction.

Both small and large resource companies have had a difficult year and indeed 2009 will have challenges but the Directors have been reviewing many projects and this process will eventually bear fruit through an acquisition and creation of significant shareholder value in North River.

David Christian Steinepreis

Executive Chairman

   

DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2008

Review of the Business and Future Prospects

North River Resources plc is the holding company of North River Resources Pty Ltd ('NRRPL').  

NRRPL is party to a Farm-In Agreement with Segue Resources Limited ('Segue'), the holder of the Coronet Hill Tenement ('the Tenement' or 'EL 10004'). Under the Farm-In Agreement, NRRPL is entitled to earn a 20% interest in the Tenement by expending such amount as the parties may agree (currently being £400,000) up to a maximum of £500,000 on the Tenement on or before 18 August 2010. 

Subject to having expended the initial expenditure, NRRPL is entitled to earn a further 31% interest (in aggregate a 51% interest) in the Tenement by expending a further amount equal to £2,000,000 less the initial agreed expenditure on the Tenement on or before 18 August 2012.

Details of the Coronet Hill Tenement are as follows:  

Asset	Holder	Interest (%)	Status	License Expiry Date	License Area
EL10004 Northern Territory Australia	Segue	100	Exploration	18/08/2010	29.25 Kilometres2

The Coronet Hill Tenement is situated in the southern part of the Pine Creek Inlier, 220 kilometres south east of Darwin in the Northern Territory of Australia. This major mineral province of the Northern Territory covers about 66,000 kilometres2 and is centred 170 kilometres south of Darwin. 

The Company (through NRRPL) has to date spent £100,000 under the Farm-In Agreement as its contribution to exploration on the Tenement.

Exploration on the Tenement was undertaken by Segue as manager under the Farm-In Agreement and has included the following:

• Soil sampling in the southern and most prospective part of the Coronet Hill Tenement.  This demonstrated multi-element anomalism in the main Coronet Hill fault zone in the area tested. Field visits and grab sampling highlighted the abundance of massive and disseminated sulphide material in historical workings along the fault that gave values up to 20% copper but also significant arsenic.

• A gradient-array induced polarisation (IP) geophysical survey over the most prospective area to locate electromagnetic conductors that may be indicative of sulphide accumulations for drill testing. 

Five priority drilling targets have been selected out of information gathered from the IP survey. 

Following the collection of bulk samples, metallurgical testwork is to be conducted to understand the metallurgical characteristics of the known mineralisation.

The Directors' intention is for the Group to satisfy its expenditure requirements under the Farm-In Agreement.

During the year to 30 June 2008, in addition to its activities related to the Coronet Hill Tenement, the Company identified and reviewed a number of potential investments in the resources sector, however none met the Company's investment criteria.

Annual Report and Accounts and Dividends

The Directors do not propose to recommend any dividends for the year ended 30 June 2008.

The Annual Report and Accounts of the Company can be found on the Company's website and have been posted to shareholders.

GROUP INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

		Year ended 30 June 2008	Period ended 30 June 2007
		£	£
Administrative expenses		(260,059)	(259,982)
Loss on operating activities		(260,059)	(259,982)
Interest paid		(118)	(34)
Interest received		9,652	8,062
Loss on ordinary activities before taxation		(250,525)	(251,954)
Taxation		-	-
Loss on ordinary activities after taxation		(250,525)	(251,954)
Total recognised loss for the year/ period		(250,525)	(251,954)
Loss per share		Pence	Pence
Basic and diluted		0.37	0.64

GROUP AND COMPANY BALANCE SHEETS  AS AT 30 JUNE 2008

		Group 30 June 2008	Company 30 June  2008	Group 30 June 2007	Company 30 June 2007
		£	£	£	£
Non Current Assets
Intangible assets		100,000	-	100,000	-
Debtors		-	100,000	-	100,000
		100,000	100,000	100,000	100,000
Current Assets
Cash and cash equivalents		121,693	121,693	387,797	387,797
		121,693	121,693	387,797	387,797
TOTAL ASSETS		221,693	221,693	487,797	487,797
Current Liabilities
Creditors: amounts falling due within one year		(20,159)	(20,159)	(35,738)	(35,738)
		(20,159)	(20,159)	(35,738)	(35,738)
TOTAL LIABILITIES		(20,159)	(20,159)	(35,738)	(35,738)
NET ASSETS		201,534	201,534	452,059	452,059
Capital and Reserves Attributable to Equity Holders
Called up share capital		68,000	68,000	68,000	68,000
Share premium account		481,238	481,238	481,238	481,238
Option premium reserve		154,775	154,775	154,775	154,775
Retained losses		(502,479)	(502,479)	(251,954)	(251,954)
TOTAL EQUITY		201,534	201,534	452,059	452,059

GROUP AND COMPANY CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

		Group year ended  30 June 2008	Company year ended  30 June 2008	Group period ended  30 June 2007	Company periodended  30 June 2007
		£	£	£	£
Net cash outflow from operating activities		(275,638)	(275,638)	(69,469)	(69,469)
Returns on investments and servicing of finance
Interest paid		(118)	(118)	(34)	(34)
Interest received		9,652	9,652	8,062	8,062
Net cash inflow from returns on investment and servicing of finance		9,534	9,534	8,028	8,028
Investing
Capitalised costs - Farm-In costs Coronet Hill		-	-	(100,000)	-
Net cash outflow from investing		-	-	(100,000)	-
Financing
Loan to subsidiary		-	-	-	(100,000)
Proceeds from issue of shares		-	-	754,000	754,000
Costs of the issue of shares		-	-	(204,762)	(204,762)
Net cash inflow from financing		-	-	549,238	449,238
Increase/(decrease) in cash and cash equivalents		(266,104)	(266,104)	387,797	387,797
Cash and cash equivalents at the beginning of the period		387,797	387,797	-	-
Cash and cash equivalents at the end of the year/ period		121,693	121,693	387,797	387,797

NOTES TO THE FINANCIAL STATEMENTS 

FOR THE YEAR ENDED 30 JUNE 2008

1. Debtors	Group  30 June 2008	Company 30 June 2008	Group 30 June 2007	Company 30 June 2007
Loan to subsidiary	-	100,000	-	100,000

2. Creditors	Group  30 June 2008	Company 30 June 2008	Group 30 June 2007	Company 30 June 2007
Accruals	20,159	20,159	35,738	35,738

3. Subsidiary Undertakings

Company

Name of company                           Country        Holding     Proportion    Nature of business

                                                                            held

North River Resources Pty Ltd         Australia     Ordinary      100%              Mineral exploration

                                                                         Shares

4. Share Capital Group and Company	30 June 2008	30 June 2008	30 June 2007	30 June 2007
	Number of Shares	£	Number of Shares	£
Authorised
10,000,000,000 Ordinary shares of 0.1p each	10,000,000,000	10,000,000	10,000,000,000	10,000,000
Issued and Fully Paid
Ordinary shares of 0.1p each	68,000,000	68,000	68,000,000	68,000

5. Expenditure Commitments	Group 30 June 2008	Company 30 June 2008	Group 30 June 2007	Company 30 June 2007
	£	£	£	£
Commitments contracted for at reporting date but not recognised as liabilities are as follows:
Between one and two years	-	-	300,000	300,000
Between two and five years	300,000	300,000	-	-
Total	300,000	300,000	300,000	300,000

Under the terms and conditions of the Farm-In Agreement, the Company has a commitment to contribute a percentage of the cost of exploration expenditure to earn its interest in the project. The expenditure required is £400,000 of which £100,000 has already been spent. The balance to be spent on or before 18 August 2010 for the Company to earn its interest. The Company can however withdraw from the Farm-in Agreement at any time by giving notice in writing to Segue of its intention to withdraw and upon withdrawal the Farm-in Agreement shall terminate.

 

6. Post Balance Sheet Events

Since 30 June 2008 the Company has undertaken the collection of bulk samples and submitted these for metallurgical testwork to understand the metallurgical characteristics of the known mineralisation. Test results are yet to be received. The Company has expended approximately £25,000 on collection of the bulk samples and metallurgical testwork.

On 31 October 2008 the Company and its Farm-In partner Segue Resources Limited agreed to revise the Coronet Hill Tenement Farm-In Agreement. Under the revised Farm-In Agreement, NRRPL is entitled to earn a 20% interest in the Tenement by expending such amount as the parties may agree (currently being £400,000) up to a maximum of £500,000 on the Tenement on or before 18 August 2010 (previously 27 December 2008). 

Subject to having expended the initial expenditure, NRRPL is entitled to earn a further 31% interest (in aggregate a 51% interest) in the Tenement by expending a further amount equal to £2,000,000 less the initial agreed expenditure on the Tenement on or before 18 August 2012 (previously 27 December 2010).

On 24 November 2008 the Company entered into an agreement with Lagral Capital, a company associated with newly appointed Director Glenn Whiddon, and Ascent Capital, a company associated with the Chairman David Steinepreis, whereby these companies will make available a £300,000 convertible loan facility to the Company.  

 

* * ENDS * *

For further information contact:

David Steinepreis                                    North River Resources Plc               07913 402727

Romil Patel/ Oliver Cairns                       Blue Oar Securities Plc                     020 7448 4400

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