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SUNKAR RESOURCES PLC

(THE 'COMPANY')

INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2009

Sunkar Resources plc (AIM:SKR) is pleased to announce its results for the six months ended 30 June 2009. 

Highlights: 

• 634,000 tonnes of ore mined to 30 June 2009, indicating the Company will achieve its target of one million tonnes during 2009

• Phosphate rock analysis and pilot plant testing has been progressed and results of this are expected to be announced shortly

• Loss for the period was US$7,156,000 (30 June 2008 US$1,170,000), reflecting the increasing scale of the Company's operations

• Cash position at 30 June 2009: US$ 26,157,000

Teck Soon Kong, Chairman, commented:

'Sunkar has continued to deliver on the mining programme mapped out in the Company's IPO Admission document, on time and on budget. 

For the period under review we have mined 634,000 tonnes of ore, giving us great confidence our 2009 target of one million tonnes will be achieved. I would like to thank the project team at Chilisai for their professionalism and commitment in establishing mining during the winter months when conditions were harsh and achieving better than expected mining rates this year.

For the test programme, samples of beneficiated rock have been sent to three independent technical contractors for analysis and pilot plant phosphoric acid production. The results of these tests are expected to be announced shortly. These results are of great importance to the Company and are expected to confirm the processing route and the suitability for Di-Ammonium Phosphate (DAP) and Mono-Ammonium Phosphate (MAP) manufacture of Chilisai rock.'

For further information please contact:

Sunkar Resources
Serikjan Utegen, CEO	Tel: +44 20 3178 5785
Donald Sinclair, CFO	Tel: +44 20 3178 5785
Canaccord Adams Limited
Mike Jones	Tel: +44 20 7050 6500
Bhavesh Patel
GMP Securities Europe LLP
Jeremy Wrathall	Tel: +44 20 7647 2800
James Cassley
Bankside Consultants
Simon Rothschild	Tel: +44 20 7367 8888
Louise Mason

Editors Notes

Sunkar Resources plc

Sunkar Resources plc commenced mining following its IPO in June 2008. Sunkar's wholly owned subsidiary in Kazakhstan holds the Subsoil Use Contract to the Chilisai Phosphate Rock Deposit in NW Kazakhstan. The contract area is estimated to contain 800 Mt of phosphate ore.

Sunkar's strategy is to build a world class integrated ammoniated phosphate fertiliser plant with low operating costs.  Sunkar's low cost base derives from its near surface phosphate rock deposit, access to cheap sulphur from the nearby Tengiz oil field and regional long-term marginal priced gas.

The Chilisai Phosphate Rock Deposit is ideally located on a transportation hub that spans the agricultural markets from Western Europe through to China.

  SUNKAR RESOURCES PLC

CHAIRMAN'S STATEMENT

During the period under review Sunkar has continued to deliver on the mining programme mapped out in the Company's IPO Admission document, on time and on budget. 

For the period under review we have mined 634,000 tonnes of ore, giving us great confidence our 2009 target of one million tonnes will be achieved. I would like to thank the project team at Chilisai for their professionalism and commitment in establishing mining during the winter months when conditions were harsh and achieving better than expected mining rates this year.

Our mobile beneficiation plant is consistently producing target 17% grade rock and has been augmented recently with the purchased of a Metso Lokotrack ST620 mobile screen. The beneficiation plant is expected to reach full capacity by the end of the 3rd quarter of this year.  

Our preparations for appointing an engineering contractor to complete a Bankable Feasibility Study ('BFS') are at an advanced stage and details will be finalised following completion of our full pilot plant test programme. 

For the test programme, samples of beneficiated rock have been sent to three independent technical contractors for analysis and pilot plant phosphoric acid production. The results of these tests are expected to be announced shortly. These results are of great importance to the Company and are expected to confirm the processing route and the suitability for Di-Ammonium Phosphate (DAP) and Mono-Ammonium Phosphate (MAP) manufacture of Chilisai rock. 

In addition work has commenced to prepare a final product list. For this to be completed, phosphoric acid from the pilot plant tests will be used to produce sample quantities of the final fertiliser products. With this product list the Company will start seeking off-take agreements for future fertiliser production.

While advancing the BFS the Company continues to seek sales of phosphate rock and believes a market exists for milled phosphate rock. A small quantity of rock has been milled and given to farmers for application this autumn to encourage interest in a Direct Application Rock product. From discussions with domestic farmers and regional phosphoric fertiliser plants it is clear a milled product is preferred, if not essential, and the Company is exploring options for investing in milling facilities, which we believe may be more beneficial than outsourced milling contracts.

The medium term outlook for the phosphates sector remains positive as world prices have started to rise again with benchmark US Gulf DAP now above US$300 per tonne. The industry is confident that volumes will be restored as the autumn markets pick up. The underlying fundamentals of food demand and population growth in Asia remain unchanged, and the project is well positioned, with good infrastructure in place, to benefit from growing local and regional markets. 

Teck Soon Kong, CHAIRMAN

15 September 2009

  

SUNKAR RESOURCES PLC

CONSOLIDATED INCOME STATEMENT

		(unaudited)	(unaudited)	(audited)
	Note	6 months ended 30 Jun 2009 $,000	6 months ended 30 Jun 2008 $,000	Year ended 31 Dec 2008 $,000
Other operating income		-	9	-
Administrative expenses		(4727)	(1,183)	(7,849)
Foreign exchange losses		(2,502)	____  -	(6,406)
Operating loss before financing costs		(7,229)	(1,174)	(14,255)
Finance income		112	4	405
Finance costs		_  (39)	____  -	(22)
Loss before taxation		(7,156)	(1,170)	(13,872)
Income tax credit		-	-	10,858
Loss for the period		(7,156)	(1,170)	(3,014)
Attributable to:
Equity holders of parent		(7,156)	(1,108)	(2,753)
Minority interests		____  -	__  (62)	(261)
		(7,156)	(1,170)	(3,014)
Basic and diluted earnings per share (cents)	7	(4.48c)	(0.87c)	(2.15c)

  

 

SUNKAR RESOURCES PLC

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

			(unaudited)		(unaudited)	(audited)
	Note			6 months ended 30 June 2009 $,000	6 months ended 30 June 2008 $,000	Year ended 31 Dec 2008 $,000
Foreign exchange translation differences				(10,753)	(767)	(72)
Net expenditure charged directly against equity				(10,753)	(767)	(72)
Loss for the period				(7,156)	(1,170)	(3,014)
Total recognised income and expense for the period				(17,909)	(1,937)	(3,086)
Attributable to:
Equity holders of parent				(17,909)	(1,796)	(2,838)
Minority interests				_____  -	(141)	(248)
				(17,909)	(1,937)	(3,086)

  

SUNKAR RESOURCES PLC

CONSOLIDATED BALANCE SHEET

		(unaudited)	(unaudited)	(audited)
	Note	30 Jun 2009 $'000	30 Jun 2008 $'000	31 Dec 2008 $'000
Assets
Intangible exploration assets	2	61,284	66,622	75,341
Property, plant and equipment	3	10,345	5,359	11,383
Deposit		___  59	2,500	__  59
Total non-current assets		71,688	74,481	86,783
Inventories		3,009	-	2,111
Other receivables and prepayments		4,775	62,549	3,599
Cash and cash equivalents		26,157	_  793	34,545
Total current assets		33,940	63,342	40,255
Total assets		105,628	137,823	127,038
Equity
Issued share capital	4	298	298	298
Share premium	4	110,460	110,366	110,366
Share warrant reserve	4	467	561	561
Shares not issued reserve	4	-	-	-
Translation reserve	4	(10,066)	84	687
Retained earnings	4	(6,139)	(2,227)	(1,041)
Total equity attributable to equity holders of parent	4	95,020	109,082	110,871
Minority interest	4	_____  -	_  1,591	_____  -
Total equity		95,020	110,673	110,871
Liabilities
Other payables		642	837	694
Deferred tax liabilities		8,718	19,532	10,859
Provisions		__  330	____  -	__  330
Total long term liabilities		9,690	20,369	11,883
Trade and other payables		__  918	6,781	4,284
Total liabilities		10,608	27,150	16,167
Total equity and liabilities		105,628	137,823	127,038

SUNKAR RESOURCES PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

			(unaudited)		(unaudited)		(audited)
		Note		6 months ended 30 June 2009 $'000		6 months ended 30 Jun 2008 $,000	Year ended 31 Dec 2008 $'000
Cash flows from operating activities:
Operating loss				(7,229)		(1,173)	(14,255)
Adjustments for:
Depreciation				920		16	385
Share based payments				2,059		-	2,831
Increase in inventories				(898)		-	(2,111)
Decrease / (increase) in receivables				(1,177)		212	(673)
Increase / (decrease) in payables				_  (416)		__  96	__  777
Cash utilised in operations				(6,741)		(849)	(13,046)
Interest paid				_  (39)		___  -	__  (22)
Net cash utilised in operating activities				(6,780)		(849)	(13,068)
Cash flows from investing activities:
Interest received				112		3	405
Acquisition of minority interest				(2,950)		-	(7,950)
Acquisition of intangible exploration assets				(563)		(340)	(750)
Acquisition of property, plant and equipment				_  (355)		(4,150)	(11,523)
Net cash from investing activities				(3,756)		(4,487)	(19,818)
Cash flows from financing activities:
Repayment of loan				-		-	(5,708)
Proceeds from the issue of share capital				-		4	66,986
Payment of transaction costs				___  -		___  -	(5,703)
Net cash outflow from financing activities				-		4	61,283
Net (decrease) / increase in cash and cash equivalents				(10,536)		(5,332)	28,397
Cash and cash equivalents at start of period				34,545		6,107	6,107
Exchange differences				2,147		_  18	41
Cash and cash equivalents at end of period				26,157		793	34,545

Notes to the Financial Statements

1.    BASIS OF PREPARATION

    

Sunkar Resources PLC and its subsidiary Temir Service LLP (the 'Group') prepares its financial statements on the basis of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The financial statements presented herein have been prepared in accordance with the accounting policies expected to be used in preparing the Group's financial statements for the year ending 31 December 2009 which do not differ significantly from those used for the Group's 2008 financial statements.

Sunkar Resources PLC is a company registered in England and Wales and was incorporated on 28 March 2006. The Company acquired an 80% interest in in the capital of Temir Service LLP, a limited liability partnership registered in the Republic of Kazakhstan in September 2006 a further 10% on 13 December 2007 and the final 10% on 26 November 2008.

 

These interim results do not constitute statutory accounts within the meaning of s435 of the Companies Act 2006. The financial information in this report for the six months to 30 June 2009 and to 30 June 2008 has not been audited.  

The accounting policies and methods of computation used in the preparation of the unaudited consolidated financial information are the same as those described in the Company's audited consolidated financial statements and notes thereto for the year ended 31 December 2008. 

In the opinion of the management, the accompanying interim financial information includes all adjustments considered necessary for fair and consistent presentation of financial statements. These interim consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes for the year ended 31 December 2008.

The financial statements have been prepared on the going concern basis, assuming the Group and the Company to continue as going concerns, and therefore realise their assets and extinguish their liabilities in the normal course of business at the amounts stated in the financial statements.

    

  

2.    INTANGIBLE FIXED ASSETS

	(unaudited)	(unaudited)	(audited)
Deferred exploration costs	30 Jun 2009 $'000	30 Jun 2008 $'000	31 Dec 2008 $'000
Cost
Balance - beginning of period	75,341	67,406	67,406
Additions	563	340	1,773
Acquisition of minority interest	-	-	6,308
Exchange differences	(14,620)	(1,124)	(146)
Balance - end of period	61,284	66,622	75,341

3.    TANGIBLE FIXED ASSETS

	(unaudited)	(unaudited)	(audited)
Property, plant and equipment	30 Jun 2009 $'000	30 Jun 2008 $'000	31 Dec 2008 $'000
Cost
Balance - beginning of period	11,783	122	122
Additions	355	5,268	11,671
Exchange differences	(555)	__  -	_  (10)
Balance - end of period	11,583	5,390	11,783
Depreciation
Balance - beginning of period	400	15	15
Charge for period	920	16	385
Exchange differences	(82)	__  -	___  -
Balance - end of period	1,238	_  31	_400
Net book value
At end of period	10,345	5,359	11,383
At start of period	11,383	107	107

    

4.    RECONCILIATION OF MOVEMENT IN CAPITAL AND RESERVES

 

(Unaudited)			Shares
			not	Share
	Share	Share	issued	warrants	Translation	Accumulated		Minority	Total
	capital	premium	reserve	reserve	reserve	losses	Total	interest	equity
	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Balance at 1 January 2008	217	24,970	24,756	-	772	(1,119)	49,596	1,732	51,328
Loss for the period	-	-		-		(1,108)	(1,108)	(62)	(1,170)
Foreign exchange translation differences	-	-	-	-	(688)	-	(688)	(79)	(767)
Shares and warrants issued	81	91,567	(24,756)	94		-	66,986	-	66,986
Cost of share issues	-	(6,171)		467		-	(5,704)	-	(5,704)
Balance at 30 June 2008	298	110,366	-	561	84	(2,227)	109,082	1,591	110,673
Loss for the period	-	-	-	-	-	(1,645)	(1,645)	(199)	(1,844)
Foreign exchange translation differences	-	-	-	-	603	-	603	92	695
Acquisition of minority interest	-	-	-	-	-	-	-	(1,484)	(1,484)
Share based payments	-	-	-	-	-	2,831	2,831	-	2,831
Balance at 31 December 2008	298	110,366	-	561	687	(1,041)	110,871	-	110,871
Loss for the period	-	94	-	(94)		(7,156)	(7,156)	-	(7,156)
Foreign exchange translation differences	-	-	-	-	(10,753)	-	(10,753)	-	(10,753)
Share based payments						2,059	2,059	-	2,059
	298	110,460	-	467	(10,066)	(6,138)	95,021	-	95,021

 

   

5.    SHARE CAPITAL

At 30 June 2009, the authorised share capital comprised 500,000,000 ordinary shares of 0.1p each

6.    RELATED PARTY TRANSACTIONS

The company has provided a loan facility to Temir Service LLP of up to $32 million.

7.    EARNINGS PER SHARE

Basic earnings per share

The calculation of basic earnings per share, based on the loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding during the period was calculated as follows:

Loss attributable to ordinary shareholders

		6 months ended 30 Jun 2009	6 months ended 30 Jun 2008	Year ended 31 Dec 2008
		$'000	$'000	$'000
Loss for the period attributable to ordinary shareholders		(7,156)	(1,170)	(3,014)
Weighted average number of ordinary shares		6 months ended 30 June 2009 '000	6 months ended 30 Jun 2008 '000	Year ended 31 Dec 2008 '000
Issued ordinary shares at beginning of period		159,849	119,638	119,638
Effect of shares issued during the period		_____  -	14,426	20,669
Weighted average number at end of period		159,849	134,064	140,307

8.    SEGMENTED INFORMATION

A segment is a component of the Group distinguishable by economic activity (business segment) or by its geographical location (geographical segment) which is subject to risks and returns that are different from those of other segments. The Group's only business segment, which is its primary reporting format, is the development of Chilisai phosphate rock deposit in Kazakhstan. All the Group's activities are related to the development of the Chilisai phosphate rock deposit with support provided from the UK. In presenting information on the basis of geographical segments, segment assets and the cost of acquiring them are based on the geographical location of the assets. Segment capital expenditure is the total cost incurred during the period to acquire segment assets and where the assets are located. There was no Group turnover during the period.

For the six months ended 30 June 2009

(unaudited)	Segment Assets	Segment Liabilities	Segment Result	Capital Expenditure	Depreciation
Kazakhstan	77,805	10,384	(3,856)	918	904
UK	26,542	224	(4,582)	__  -	__  4
	104,347	10,608	(8,438)	_918	_920

For the year ended 31 December 2008

(audited)	Segment Assets	Segment Liabilities	Segment Result	Capital Expenditure	Depreciation
Kazakhstan	90,839	12,682	(2,469)	13,418	384
UK	36,199	3,485	(11,403)	__  26	_  1
	127,038	16,167	(13,872)	13,444	_385

9.    FINANCIAL INSTRUMENTS

The Board determines, as required, the degree to which it is appropriate to use financial instruments and hedging techniques to mitigate risks. The main risks for which such instruments may be appropriate are foreign exchange risk, interest rate risk and liquidity risk each of which is discussed below. There were no derivative instruments outstanding at 30 June 2009.

Liquidity risk

To date the Group has relied on shareholder funding and founder loans to finance its operations. As the Group has finite cash resources and no material income, the liquidity risk is significant and is managed by controls over expenditure. 

The liabilities of the Group are due within one year. The Group has adequate financial resources to meet the obligations existing at 30 June 2009.

Interest rate risk

At the balance sheet date there was no significant exposure to interest rate risk.

Foreign currency risk

The presentational currency of the Group is US Dollars. The functional currency of the parent company is US Dollars and the functional currency of the subsidiary is Kazakh Tenge. The Group is exposed to foreign currency risk due to movements in the Kazakh Tenge against the US Dollar exchange rate in relation to Kazakh Tenge denominated transactions and balances of the subsidiary and movements in GB Pounds and Euros against the Dollar Exchange rate in respect of transactions and balance of the parent company.

The Group has a general policy of not hedging against foreign currency risks.

		(unaudited)	(unaudited)
		30 Jun 2009	30 Jun  2008
		$'000	$'000
GB Pounds		2,808	677
US Dollars		17,634	8
Euros		5,593	11
UAE Dirham			1
Kazakh Tenge		122	96
		26,157	793

The Group's cash resources are mainly held in US Dollars, Euros, GBP and Kazakh Tenges. Exchange rate fluctuations may adversely affect the Group's financial position and results. 

Fair value of financial assets

In the directors' opinion there is no material difference between the book value and fair value of any of the group's financial instruments.

10.    CAPITAL COMMITMENTS

Under the Subsoil Use Contract the Group has obligations to invest $115 million cumulatively by the end of 2012. 

ENDIR GUURPBUPBGAQ