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Churchill Mining plc Interim Results

Mon 29th March, 2010 6:00am
TIDMCHL

RNS Number : 3058J
Churchill Mining plc
29 March 2010

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CHURCHILL MINING PLC
("Churchill" or "the Company")

Interim Results


I am pleased to present Churchill Mining Plc's ("Churchill" or the "Company")
Half Year Report for the six months ended 31 December 2009 as development of our
world-class East Kutai Coal Project ("EKCP") in Indonesia continues to gather
momentum. The six months have seen us make a number of key steps forward in
terms of progressing EKCP and creating value for our shareholders, most notably
through the delivery of a mining reserve of nearly one billion tonnes, with
potential to expand this further.
EKCP is a world-class opportunity and since acquiring a 75% interest in the
project in 2007, we have been actively defining a large-scale sub-bituminous
thermal coal resource which we believe will be extremely attractive to end-users
of thermal coal, particularly in India and China.
Key achievements during the reporting period included the definition of the
Company's maiden in-situ mining Reserve of just under one billion tonnes of
thermal coal and significant work completed on a Feasibility Study into the
development of what we expect will be a large-scale and profitable coal mining
operation in one of the world's key emerging coal provinces.

The re-classification of a large portion of our resource base has been a high
priority for the Company and to this end, in-fill drilling and data analysis
underpinned an upgrade of 1.33 billion tonnes of the previously defined 3.18
billion tonnes global coal resource in August 2009 into the JORC categories of
Measured and Indicated.

A JORC Reserve Report was subsequently completed in October 2009 by independent
coal geology and mining specialists, SMG Consultants, resulting in the
definition of an initial JORC probable In-situ Reserve of 956 million tonnes of
thermal coal. This was a significant achievement for the Company, as we look to
leverage off the strong platform we have built through increasing confidence in
the resource base at EKCP, providing us with a strengthened position from which
to assess and negotiate strategic opportunities
In addition to this, work continued on the Feasibility Study on EKCP which has
identified the potential to exploit the project's thermal coal reserves at an
estimated annual production rate of 20 million tonnes per annum.
Initial results from the EKCP Feasibility Study have been very encouraging and
we look forward to announcing the associated results of our economic modeling.
We expect to complete the feasibility review process in the second quarter of
2010 at which time the Company will make a detailed assessment on project
economics and development requirements.

In the meantime, we will continue to create value by advancing the project and
putting the project's infrastructure items (mine stockyard, overland conveyor,
port/shiploader and power station) out to tender. To date, the bids received
have been well under predicted costs due to the resurgence in global
manufacturing and engineering capabilities following the global financial
crisis.

Churchill is still evaluating how best to generate value for Shareholders. Our
options include the sale of the project or Company, the development of EKCP with
a joint venture partner, or the financing and implementation of the EKCP by
Churchill itself. The project construction work at EKCP is expected to take
approximately two years to complete. With this timeframe in mind, we have
commenced the application process for necessary licences and permits with the
relevant Central, Provincial and Regional Indonesian Governments and will be
working diligently with these agencies to ensure that approvals are progressed
as rapidly as possible.
We have also completed work on the optimisation of pit shapes and the mining
sequence. Furthermore there is work in progress on evaluating a transport
corridor route and the site for a port terminal, with further site test work,
including a trial pit, currently in the pipeline.
Churchill continues to assess marketing and off-take possibilities for EKCP
coal, with Company representatives recently visiting 17 companies on India's
East Coast to discuss the project and potential off-take agreements. This trip
was very successful with Churchill representatives highly encouraged by the
growth profile of future Indian coal demand. It was established, during the
trip, that India will need a minimum of 100 million tonnes per annum of new
EKCP-styled coal to meet expected future energy needs, highlighting the growing
demand for coal in the region.
At our Sendawar Coal Bed Methane Project in East Kalimantan, we continue to
evaluate development options including Joint Venture discussions with a number
of interested parties. While the development of the EKCP is our key focus of
attention, we will continue to assess options to add value and diversification
to Churchill through Sendawar.

In a strategic move to complement the Company's fast track development and
production strategy, Churchill announced the appointment of Pala Investments AG
as a strategic advisor in December 2009. Pala has been mandated with the task of
increasing Churchill's operational and capital-raising flexibility, and we are
confident that its team of professional mining and financial experts will be
able to play a key role in obtaining the necessary funding for the future work
program and unlocking shareholder value as we move into the development phase.

Financial Review

In line with our expectations as a mining company in the pre-production phase,
the loss for the half year was US$3.0 million or 3.91c per ordinary share (Dec
2008: US$13.8 million or 20.61c per share). Administrative expenses were US$1.8
million (Dec 2008: US$2.1 million). During the half year the Company committed
approximately US$4.6 million to exploration and evaluation expenditure, mainly
at the flagship East Kutai Coal Project.

Financial Position

The Group's balance sheet as at 31 December 2009 and comparatives at 31 December
2008 are summarised below:

+------------------------------------------------+---------+---------+
| | 31 Dec | 31 Dec |
| | 2009 | 2008 |
+------------------------------------------------+---------+---------+
| | $'000 | $'000 |
+------------------------------------------------+---------+---------+
| | | |
+------------------------------------------------+---------+---------+
| Non-current assets | 23,038 | 13,076 |
+------------------------------------------------+---------+---------+
| Current assets | 5,470 | 8,494 |
+------------------------------------------------+---------+---------+
| Total assets | 28,508 | 21,570 |
+------------------------------------------------+---------+---------+
| Current liabilities | 699 | 375 |
+------------------------------------------------+---------+---------+
| Non-current liabilities | 41 | 8 |
+------------------------------------------------+---------+---------+
| Total liabilities | 740 | 383 |
+------------------------------------------------+---------+---------+
| Net assets | 27,768 | 21,187 |
+------------------------------------------------+---------+---------+

Non-current assets moved significantly due to the capitalised exploration
expenditure at the East Kutai Coal Project. The reduction in current assets
resulted from the cash invested into exploration and evaluation expenditure and
administrative overheads.
During the half year, we worked diligently on getting our tenement status
upgraded in line with new mining laws in Indonesia. As an extension of this
process, we are in the process of a corporate restructure in Indonesia that will
allow a direct equity interest in the tenements. This will ensure a simpler and
more transparent ownership regime and will add to the tenements marketability
should we wish to go down this path.
The strategic location of our flagship project - especially in relation to
rapidly growing Asian coal markets - combined with the steady progress that has
been made technically, has put us in a very strong position in the lead-up to
production. On behalf of the Board I would like thank you, our Shareholders, for
your continued support and I look forward to the next phase of our development
as we move closer to realising our core objective of becoming an international
coal producer.



David F Quinlivan
Chairman


INDEPENDENT REVIEW REPORT TO CHURCHILL MINING PLC

Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2009 which comprises the unaudited Condensed Consolidated Statement of
Comprehensive Income, Condensed Consolidated Statement of Financial Position,
Condensed Consolidated Statement of Changes in Shareholders Equity and Condensed
Consolidated Statement of Cash Flows and related notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly report, including the financial information contained therein,
is the responsibility of and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the rules of
the London Stock Exchange for companies trading securities on the Alternative
Investment Market which require that the half-yearly report be presented and
prepared in a form consistent with that which will be adopted in the company's
annual accounts having regard to the accounting standards applicable to such
annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting the requirements of the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market
and for no other purpose. No person is entitled to rely on this report unless
such a person is a person entitled to rely upon this report by virtue of and for
the purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity", issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2009 is not prepared, in all
material respects, in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market.


BDO LLP
Chartered Accountants and Registered Auditors
London
26th March 2010

BDO LLP is a limited liability partnership registered in England and Wales (with
registered number OC305127)


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

+------------------------------+------+-----------+-----------+----------+
| | | 6 months | 6 months | Year |
| | | to | to | ended |
+------------------------------+------+-----------+-----------+----------+
| | | 31 Dec | 31 Dec | 30 June |
| | | 2009 | 2008 | 2009 |
+------------------------------+------+-----------+-----------+----------+
| | |Unaudited |Unaudited | Audited |
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| | Note | $'000 | $'000 | $'000 |
+------------------------------+------+-----------+-----------+----------+
| Continuing Operations | | | | |
+------------------------------+------+-----------+-----------+----------+
| Revenue | | - | - | - |
+------------------------------+------+-----------+-----------+----------+
| Cost of Sales | | - | - | - |
+------------------------------+------+-----------+-----------+----------+
| Gross Profit /(Loss) | | - | - | - |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Other operating income | | - | 72 | - |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Other administrative | | (1,897) | (2,178) | (3,544) |
| expenses | | | | |
+------------------------------+------+-----------+-----------+----------+
| Impairment of exploration | | - | (5,715) | (5,715) |
| assets | | | | |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Total administrative | | (1,897) | (7,893) | (9,259) |
| expenses | | | | |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Loss from operations | | (1,897) | (7,821) | (9,259) |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Finance income | | 33 | 246 | 260 |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Finance expenses - interest | | (1) | (1) | (2) |
+------------------------------+------+-----------+-----------+----------+
| Finance expenses - foreign | | (20) | (3,348) | (3,534) |
| exchange losses | | | | |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Total finance expenses | | (21) | (3,349) | (3,536) |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Fair value loss on options | | (87) | - | (624) |
| held in associate | | | | |
+------------------------------+------+-----------+-----------+----------+
| Fair value impairment on | | (916) | (2,649) | (491) |
| investments in associate | | | | |
+------------------------------+------+-----------+-----------+----------+
| Deemed loss on disposal of | | (25) | (101) | (111) |
| associate | | | | |
+------------------------------+------+-----------+-----------+----------+
| Share of operating loss of | | (146) | (147) | (329) |
| associate | | | | |
+------------------------------+------+-----------+-----------+----------+
| Loss before taxation | | (3,059) | (13,821) | (14,090) |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Income tax expense | 4 | - | - | - |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Loss for the period | | (3,059) | (13,821) | (14,090) |
| attributable to equity | | | | |
| shareholders of the parent | | | | |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Other comprehensive income: | | | | |
+------------------------------+------+-----------+-----------+----------+
| Foreign exchange differences | | 290 | (1,125) | (919) |
| on translating foreign | | | | |
| operations | | | | |
+------------------------------+------+-----------+-----------+----------+
| Other comprehensive income | | 290 | (1,125) | (919) |
| for the period | | | | |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Total comprehensive income | | (2,769) | (14,946) | (15,009) |
| for the period attributable | | | | |
| to equity shareholders of | | | | |
| the parent | | | | |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+
| Loss per share | | | | |
+------------------------------+------+-----------+-----------+----------+
| (Loss) per Share (cents) | | | | |
+------------------------------+------+-----------+-----------+----------+
| Basic and diluted | 2 | (3.91c) | (20.61c) | (20.76c) |
+------------------------------+------+-----------+-----------+----------+
| | | | | |
+------------------------------+------+-----------+-----------+----------+


+----------+-----------+-----------+-----+---+-----------+-----------+-----------+
| CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2009 |
| |
+--------------------------------------------------------------------------------+
| | 6 months | 6 months | Year |
| | to | to | ended |
+ +-----------+-----------+-----------+
| | 31 Dec | 31 Dec | 30 June |
| | 2009 | 2008 | 2009 |
+ +-----------+-----------+-----------+
| |Unaudited |Unaudited | Audited |
| | | | |
+ +-----------+-----------+-----------+
| | $'000 | $'000 | $'000 |
+--------------------------------------------+-----------+-----------+-----------+
| | | | | | | | |
+----------+-----------+-----------+-----+---+-----------+-----------+-----------+
| ASSETS | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Current assets | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Cash and cash equivalents | | 5,330 | 8,325 | 10,903 |
+----------------------------------------+---+-----------+-----------+-----------+
| Trade and other receivables | | 140 | 169 | 172 |
+----------------------------------------+---+-----------+-----------+-----------+
| Total current assets | | 5,470 | 8,494 | 11,075 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Non-current assets | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Property, Plant and Equipment | | 236 | 236 | 224 |
+----------------------------------------+---+-----------+-----------+-----------+
| Other receivables | | 1,076 | 507 | 805 |
+----------------------------------------+---+-----------+-----------+-----------+
| Intangible assets | | 20,030 | 11,210 | 15,422 |
+----------------------------------------+---+-----------+-----------+-----------+
| Other financial assets | | 22 | 87 | 101 |
+----------------------------------------+---+-----------+-----------+-----------+
| Investments in associates | | 1,674 | 1,036 | 2,515 |
+----------------------------------------+---+-----------+-----------+-----------+
| Total non-current assets | | 23,038 | 13,076 | 19,067 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| TOTAL ASSETS | | 28,508 | 21,570 | 30,142 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| LIABILITIES | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Current Liabilities | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Trade and other payables | | 698 | 369 | 581 |
+----------------------------------------+---+-----------+-----------+-----------+
| Loans and Borrowings | | 1 | 6 | 8 |
+----------------------------------------+---+-----------+-----------+-----------+
| Total current liabilities | | 699 | 375 | 589 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Non-current Liabilities | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Provisions | | 41 | - | 27 |
+----------------------------------------+---+-----------+-----------+-----------+
| Borrowings | | - | 8 | - |
+----------------------------------------+---+-----------+-----------+-----------+
| Total non-current liabilities | | 41 | 8 | 27 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| TOTAL LIABILITIES | | 740 | 383 | 616 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| NET ASSETS | | 27,768 | 21,187 | 29,526 |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| CAPITAL & RESERVES ATTRIBUTABLE TO | | | | |
| EQUITY HOLDERS OF THE COMPANY | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| | | | | |
+----------------------------------------+---+-----------+-----------+-----------+
| Share Capital | | 1,558 | 1,339 | 1,507 |
+----------------------------------------+---+-----------+-----------+-----------+
| Share premium reserve | | 39,804 | 31,153 | 39,147 |
+----------------------------------------+---+-----------+-----------+-----------+
| Merger reserve | | 6,828 | 6,828 | 6,828 |
+----------------------------------------+---+-----------+-----------+-----------+
| Other reserves | | 2,593 | 1,554 | 2,000 |
+----------------------------------------+---+-----------+-----------+-----------+
| Retained Losses | | (23,015) | (19,687) | (19,956) |
+----------------------------------------+---+-----------+-----------+-----------+
| TOTAL EQUITY | | 27,768 | 21,187 | 29,526 |
+----------+-----------+-----------+-----+---+-----------+-----------+-----------+
In the December 2008 comparative information, a VAT receivable of $506,631,
which was previously included under current trade and other receivables, has
been reclassified in the current financial statements as a non current
receivable. The reclassification is as a result of a change in the expected
recovery period of the VAT receivable to being greater than one year from the
balance sheet date. The comparatives have therefore been adjusted for
comparability.



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE 6 MONTHS ENDING 31
DECEMBER 2009


+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Consolidated | Share | Share | Merger |Retained | Other Reserves | Total |
| | | | | | | |
+-----------------------------------+---------+---------+---------+----------+---------------------+----------+
| |Capital |Premium |Reserve | Losses | | Equity |
+-----------------------------------+---------+---------+---------+----------+---------------------+----------+
| | |Reserve | | | Foreign | Equity | |
| | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| | | | | |exchange | settled | |
| | | | | | | share | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| | | | | | | options | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Changes in equity for period to | | | | | | | |
| 31 December 2008 | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Balance at 1 July 2008 | 1,315 | 30,503 | 6,828 | (5,866) | 252 | 2,053 | 35,085 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Total comprehensive income for | - | - | - | (13,821) | (1,125) | - | (14,946) |
| the period | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Recognition of share based | - | - | - | - | - | 374 | 374 |
| payments | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Issue of shares | 24 | 650 | - | - | - | - | 674 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Balance at 31 December 2008 | 1,339 | 31,153 | 6,828 | (19,687) | (873) | 2,427 | 21,187 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Changes in equity for period to | | | | | | | |
| 31 December 2009 | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Balance at 1 July 2009 | 1,507 | 39,147 | 6,828 | (19,956) | (667) | 2,667 | 29,526 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Total comprehensive income for | - | - | - | (3,059) | 290 | - | (2,769) |
| the period | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Recognition of share based | - | - | - | - | - | 303 | 303 |
| payments | | | | | | | |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Issue of shares | 51 | 657 | - | - | - | - | 708 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+
| Balance at 31 December 2009 | 1,558 | 39,804 | 6,828 | (23,015) | (377) | 2,970 | 27,768 |
+-----------------------------------+---------+---------+---------+----------+----------+----------+----------+


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE 6 MONTHS ENDING 31
DECEMBER 2009

+------+-----+-----+-----+---+--+-----------+-----------+-----------+
| | | | | | | 6 | 6 months | Year |
| | | | | | | months | to | ended |
| | | | | | | to | | |
+------+-----+-----+-----+---+--+-----------+-----------+-----------+
| | | | | | | 31 Dec | 31 Dec | 30 June |
| | | | | | | 2009 | 2008 | 2009 |
+------+-----+-----+-----+---+--+-----------+-----------+-----------+
| | | | | | |Unaudited |Unaudited | Audited |
+------+-----+-----+-----+---+--+-----------+-----------+-----------+
| | | | | | | $'000 | $'000 | $'000 |
+------+-----+-----+-----+---+--+-----------+-----------+-----------+
| | | | | | | | | |
+------+-----+-----+-----+---+--+-----------+-----------+-----------+
| | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Cash flows from operating |3 | (1,559) | (1,994) | (3,471) |
| activities | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Interest paid | | (1) | (1) | (2) |
+----------------------------+--+-----------+-----------+-----------+
| Net cash flows from | | (1,560) | (1,995) | (3,473) |
| operating activities | | | | |
+----------------------------+--+-----------+-----------+-----------+
| | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Cash flows from investing | | | | |
| activities | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Finance Income | | 9 | 258 | 281 |
+----------------------------+--+-----------+-----------+-----------+
| Payments for property, | | (64) | (50) | (108) |
| plant & equipment | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Payments for exploration | | (4,681) | (3,362) | (7,306) |
| and evaluation | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Cash flows from investing | | (4,736) | (3,154) | (7,133) |
| activities | | | | |
+----------------------------+--+-----------+-----------+-----------+
| | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Cash flows from financing | | | | |
| activities | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Proceeds from issue of | | 708 | 674 | 9,006 |
| share capital | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Share issue expenses paid | | - | - | (171) |
+----------------------------+--+-----------+-----------+-----------+
| Repayments of borrowings | | (7) | (10) | (15) |
+----------------------------+--+-----------+-----------+-----------+
| Cash flows from financing | | 701 | 664 | 8,820 |
| activities | | | | |
+----------------------------+--+-----------+-----------+-----------+
| | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Net decrease in cash and | | (5,595) | (4,485) | (1,786) |
| cash equivalents | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Cash and cash equivalents | | 10,903 | 16,124 | 16,124 |
| at start of the | | | | |
| period/year | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Effect of foreign exchange | | 22 | (3,314) | (3,435) |
| rate differences | | | | |
+----------------------------+--+-----------+-----------+-----------+
| | | | | |
+----------------------------+--+-----------+-----------+-----------+
| Cash and cash equivalents | | 5,330 | 8,325 | 10,903 |
| at end of period/year | | | | |
+----------------------------+--+-----------+-----------+-----------+
| | | | | |
+------+-----+-----+-----+---+--+-----------+-----------+-----------+

NOTES TO THE INTERIM REPORT



1. BASIS OF PREPARATION

The condensed consolidated interim financial statements of the Group for the six
months ended 31 December 2009 which comprise the Company and its subsidiaries
(together referred to as the "Group) were approved by the Board on 26 March
2010. The interim results have not been audited, but were the subject of an
independent review carried out by the Company's auditors, BDO LLP. The condensed
interim financial information has been prepared using policies based on
International Financial Reporting Standards (IFRS and IFRIC interpretations)
issued by the International Accounting Standards Board ("IASB") as adopted for
use in the EU and with those parts of the Companies Act 2006 applicable to
companies preparing their accounts under IFRS. The financial information for the
six months to 31 December 2009 does not constitute statutory accounts of the
Company or the Group. These accounts have been prepared in accordance with the
accounting policies that are expected to be applied in the Report and Accounts
of Churchill Mining PLC for the year ending 30 June 2010. The statutory
accounts for the year ended 30 June 2009 have been filed with the Registrar of
Companies. The auditor's report on those accounts was unqualified, did not
include any references to any matters to which the auditors drew attention by
way of emphasis and did not contain a statement under section 498(2)-(3) of the
Companies Act 2006.

The consolidated financial statements incorporate the results of Churchill
Mining PLC and its subsidiary undertakings as at 31 December 2009, using the
acquisition method of accounting. The corresponding amounts are for the year
ended 30 June 2009 and the 6 month period ended 31 December 2008. The financial
information for the 6 months ended 31 December 2008 has been extracted from the
unaudited interim results released to 31 December 2008.

The presentation applied to the interim report is in line with the new IAS 1
('Presentation of Financial Statements') in respect of the primary statements
presentation.

These accounts have been prepared on the going concern basis however, the Group
cash flow forecasts show the Group requires additional funding required by June
2010 to fund the ongoing development program. The Board expects to obtain
additional funding in order to continue with the planned work program however,
presently there are no agreements or commitments in place for the additional
funds. The Directors are confident that the necessary funds to provide adequate
financing for continued development work will be raised as required and
accordingly they are satisfied that the going concern basis remains appropriate
for the preparation of the condensed consolidated financial information for the
6 months ended 31 December 2009.

2. LOSS PER SHARE
Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of Ordinary Shares
outstanding during the period.
+-------------------------------+------------+------------+------------+
| | 6 months | 6 months | Year |
| | to | to | ended |
+-------------------------------+------------+------------+------------+
| | 31 Dec | 31 Dec | 30 June |
| | 2009 | 2008 | 2009 |
+-------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
+-------------------------------+------------+------------+------------+
| | $'000 | $'000 | $'000 |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Loss for the period | (3,059) | (13,821) | (14,090) |
| attributable to ordinary | | | |
| shareholders | | | |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| | Number | Number | Number |
| | of | of | of |
| | Shares | Shares | Shares |
+-------------------------------+------------+------------+------------+
| Weighted average number of | 78,236,738 | 67,067,713 | 67,860,344 |
| shares used in the | | | |
| calculation of basic loss per | | | |
| share | | | |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Effect of dilutive share | 6,461,292 | 6,064,379 | 6,253,949 |
| options | | | |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Weighted average number of | 84,698,030 | 73,132,092 | 74,114,293 |
| shares | | | |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Basic loss per share | (3.91c) | (20.61c) | (20.76c) |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Diluted loss per share | (3.91c) | (20.61c) | (20.76c) |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Earnings per share | | | |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Loss for the period | (3,059) | (13,821) | (14,090) |
+-------------------------------+------------+------------+------------+
| | | | |
+-------------------------------+------------+------------+------------+
| Basic and diluted loss per | (3.91c) | (20.61c) | (20.76c) |
| share (cents) | | | |
+-------------------------------+------------+------------+------------+

The total number of shares in issue at 31 December 2009 amounted to 80,438,514
(31 December 2008 - 67,202,714). The total amount of options held over the
shares at 31 December 2009 was 12,241,486 (31 December 2008 - 15,477,286).
These options are exercisable at prices that range between 12p (19c) and 80p
($1.27).

The effect of all potential ordinary shares arising from the exercise of options
going forward is considered to be anti-dilutive. 250,000 potential ordinary
shares have been excluded from the above calculation as they are anti-dilutive.

3. NOTES TO THE CASH FLOW STATEMENT

+------------------------------+-----------+-----------+-----------+
| | 6 months | 6 months | Year |
| | to | to | ended |
+------------------------------+-----------+-----------+-----------+
| | 31 Dec | 31 Dec | 30 June |
| | 2009 | 2008 | 2009 |
+------------------------------+-----------+-----------+-----------+
| |Unaudited |Unaudited | Audited |
+------------------------------+-----------+-----------+-----------+
| | $'000 | $'000 | $'000 |
+------------------------------+-----------+-----------+-----------+
| Reconciliation of loss after | | | |
| tax to cash flows from | | | |
| operating activities | | | |
+------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------+-----------+-----------+-----------+
| Loss after tax | (3,059) | (13,821) | (14,090) |
+------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------+-----------+-----------+-----------+
| Share option expense | 303 | 360 | 614 |
+------------------------------+-----------+-----------+-----------+
| Net exchange differences | (5) | 3,372 | 3,534 |
+------------------------------+-----------+-----------+-----------+
| Depreciation | 51 | 27 | 60 |
+------------------------------+-----------+-----------+-----------+
| Impairment expense | - | 5,715 | 5,715 |
+------------------------------+-----------+-----------+-----------+
| Interest revenue in | (9) | (258) | (260) |
| investing activities | | | |
+------------------------------+-----------+-----------+-----------+
| Fair value loss on options | 87 | - | 624 |
| held in associate | | | |
+------------------------------+-----------+-----------+-----------+
| Fair value impairment on | 916 | 2,649 | 491 |
| investments in associate | | | |
+------------------------------+-----------+-----------+-----------+
| Deemed loss on disposal of | 25 | 101 | 111 |
| associate | | | |
+------------------------------+-----------+-----------+-----------+
| Share of associate loss | 146 | 147 | 329 |
+------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------+-----------+-----------+-----------+
| Increase in accounts | (239) | (111) | (400) |
| receivable | | | |
+------------------------------+-----------+-----------+-----------+
| Increase / (Decrease) in | 225 | (175) | (199) |
| creditors and accruals | | | |
+------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------+-----------+-----------+-----------+
| Cash flow from operating | (1,559) | (1,994) | (3,471) |
| activities | | | |
+------------------------------+-----------+-----------+-----------+
4. TAXATION

No taxation has been provided due to losses in the period. No deferred tax
asset has been recognised for past or current losses as the recoverability of
any such assets is not probable in the foreseeable future.

5. POST BALANCE SHEET EVENTS

Subsequent to the half year end, on 2nd March 2010, four 100% wholly owned
subsidiaries of Churchill Mining Plc were incorporated in Singapore.


6. RECOVERABLE VALUE ADDED TAX ("VAT") - INDONESIA

Included in Non-current trade and other receivables is an Indonesian VAT
receivable of $1,076,000 (30 June 2009: $805,000). Indonesian VAT on exploration
and administration costs is not recoverable until the commencement of commercial
mining services and related operations. Taking into consideration the
implementation of the new Mining Law in Indonesia in 2009 and the operating
structure of the Group, in addition to the application of the new VAT laws in
Indonesia applicable from 1 April 2010, the Directors anticipate that the VAT
receivable will be recovered in accordance with Indonesian law. However, if the
Group's Indonesian projects do not proceed to production, some or all of the VAT
may not be recoverable. No provision has been made in the Group accounts for
any potential non-recovery of VAT.


7. FORWARD LOOKING STATEMENTS

This report contains certain forward looking statements, which include
assumptions with respect to future plans, results and capital expenditures. The
reader is cautioned that assumptions used in the preparation of such information
may prove to be incorrect. All such forward looking statements involve
substantial known and unknown risks and uncertainties, certain of which are
beyond the Company's control. Please refer to the Company's Annual Report
available from the Company's web site for a list of risk factors. The Company's
actual results could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits the Company will
derive therefrom. All subsequent forward-looking statements, whether written or
oral, attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by these cautionary statements. Furthermore, the
forward-looking statements contained in this report are made as at the date of
this report

8. INTERIM REPORT

Copies of this interim report for the six months ended 31 December 2009 will be
available from the offices of Churchill Mining PLC, Suite 1, 346 Barker Road,
Subiaco, WA, 6008, and on the company's website www.churchillmining.com


For further information, please contact:
+--------------------------------+---------------+--------------------+
| | | |
| Churchill Mining Plc | Astaire | Pelham Bell |
| Managing Director - Paul | Securities | Pottinger |
| G. Mazak | Shane Gallwey | James MacFarlane / |
| | / | |
| +62 81510539186 / | Toby Gibbs | Charles Vivian |
| +62 21 39832398 | | |
| +61 8 6382 3737 | +44(0)20 7448 | +44 (0) 20 7337 |
| | 4400 | 1533 or |
| paul.mazak@churchillmining.com | | +44 (0) 7894462114 |
| | | |
+--------------------------------+---------------+--------------------+


This information is provided by RNS
The company news service from the London Stock Exchange
END

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