The following Profit and loss account and Balance Sheet are extracted from the audited accounts.
The accompanying notes are an integral part of this balance sheet.
APPROVED BY THE BOARD AND AUTHORISED FOR ISSUE
DIRECTOR: R.E. Newstone
DATE: 25 May 2006
The Auditors Messrs Wilson Wright & Co. Signed an unqualified audit report on 25th May 2006 drawing attention to one of our Accounting policy notes, which is reproduced below:
In common with many exploration companies, the company raises finance for its exploration and appraisal activities in discrete tranches to finance its activities for limited periods only. Further funding is raised as and when required.
The directors are of the opinion that the company will require to raise additional financial resources to enable the company to undertake an optimal programme of exploration and appraisal activity over the next twelve months.
Accordingly, the directors intend either to raise further funds or to engage an additional funding partner as appropriate during the course of the next twelve months.
Whilst the directors are confident that such funding will be available there can be no guarantee that this will be the case.
Brief Review of operations
A fuller version will be published with the annual accounts and posted to registered shareholders.
In early 2005 the directors decided to concentrate most of Agricola's effort on finding and developing uranium deposits in Finland. The Finnish Government is expanding its nuclear energy production by building its fifth nuclear power plant. Four nuclear power plants are now in operation. Nuclear power currently accounts for 27% of the total electricity supply in Finland. The country presently imports all of its uranium requirement. In 2003, 549 tons of uranium were required for its four nuclear power reactors.
The spot price of uranium has quintupled since 2001, whilst fears of global warming have led some environmental groups even to embrace nuclear power and emerging economies are increasingly building new nuclear power plants. Many analysts are already revising their earlier $50/lb uranium price to $75/lb.
Many of the mines and areas that yielded the US and Soviet cold war era stockpiles of uranium, are now depleted or reclaimed and unavailable for further exploitation, yet only 60% of uranium consumed in the world's nuclear reactors is being currently mined. Without supplies from stockpiles and recycled Russian warheads all the nuclear plants around the globe could not continue to run, and this even before allowing for the 24 new reactors now being built and a further 41 ordered or planned.
If the world is serious about finding alternatives to coal and hydrocarbon burning generation of electricity, it has to focus on finding the next generation of uranium mines.
On 10 May 2005. Agricola announced that the Finnish State Mining Authority of the Ministry of Trade and Industry has granted it claims Kauhee No.'s 1 -10, located in the Joensuu District of Eastern Finland. The claims cover 90 square kilometres, and include the only previously operated uranium mine in Finland, called Paukkajanvaara.
On 12 May 2005. Agricola further announced that the same Authority has granted it seven claims called Hautajaervi No.'s 1 -7, located in the municipality of Salla in the Lappland county in northern Finland. The claims cover an area of 63 square kilometres.
Agricola conducted an aggressive exploration programme of these reconnaissance licences through out 2005. The results of these explorations are summarised in the Review of Operations.
In December 2005Agricola announced that it has signed a letter of intent to enter into a joint venture with Cooper Minerals Inc. ("Cooper"), a company listed on the Toronto TSX Venture Exchange in Canada. Under the letter of intent, it is envisaged that Cooper will sign an option agreement with Agricola for the acquisition of an undivided 50% interest in certain reconnaissance licences granted to and beneficially owned by Agricola and located in the Paukkajanvaara, Kauhee claim area. The terms of this agreement are also outlined in the Review of Operations.
The two licence areas for uranium exploration are reconnaissance licences and Agricola in association with Cooper (on the Kauhee area) is presently in the process of having them change to 3 year prospecting licences.
Agricola continues to look for platinum deposits in Sweden and the Shetland Islands in addition to its uranium exploration activities.
I would like to thank our shareholders and fellow directors for their support in 2005.
Agricola will continue with efforts to increase shareholder value in 2006. No dividend is presently possible as the profit at loss account registers a loss.
The directors accept responsibility for the content of this announcement.
Dr. Robert Young, Chairman
+44 1353 648 931
Agricola Resources plc
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