Interim Report

 

 

Following the announcement made on 27 November 2007 the Company makes a further announcement of its interim report this time with the financial information set out in full rather than via a link to the Company's website.

 

 

 

 

 

 

It is a few short months since the compilation of my last report incorporated into our Annual Report (still available on our web-site at www.acrplc.com).  I will endeavour to avoid too much repetition and offer a slightly different perspective in summary of our activities since then.

 

In order that the market may be better placed to understand the value of ACR's assets and projects, I would like to point out that we are in the process of compiling a detailed technical review incorporating geochemical and geophysical data in the first quarter of the new year.

 

As previously noted we have begun our anticipated broadening of outlook to other Southern/Central African countries.  First phase targeting has been undertaken in three regional countries in this regard and discussions have commenced with the relevant government bodies to acquire appropriate exploration rights.  Meanwhile, company registration and negotiations with local partners in Mozambique and Zambia are now at an advanced stage and exploration is expected to commence in early 2008 in these two countries.  Opportunities in Malawi, DRC and Angola have also been discussed but decisions on activities there are unlikely to be taken within the next 6 months.  We are hopeful that investors may expect announcements on acquisitions and allocation of concessions in 2008.

 

In Zimbabwe, economic pressures continue to take a toll on the local population and ACR continues to follow a social support policy to help alleviate this wherever we are active.  I am hopeful that the economy may be turned around in the coming year and that we might be able to play our part accordingly.  An election in early 2008 will hopefully not cause a material disruption to our operations in country.  ACR will always be committed to working productively and constructively with the Government of the day.  We note with enthusiasm the rapid increase in interest shown by potential and actual investors in Zimbabwe assets hailing from Western and Eastern countries and operating in all sectors, not least mining and exploration.  Wherever possible ACR has encouraged this and we believe stands to reap the benefit of our first-mover advantage. Indeed the company has recently been in discussions with potential project partners from several Asian, African and East European countries, regarding financial, equity and technical associations.

 

Meanwhile we continue a slow and steady legal process on our Marange diamond issue while simultaneously keeping open discussions on possible JV operations with Government.  I remain hopeful of an outcome that will have all-round benefits to the local economy, to this company and to the local community of the area who have suffered from past illegal activities.

 

ACR has commissioned a legal consultant to provide detailed advice on potential implications for the company's operations of the recently tabled Indigenisation and Empowerment Bill (not yet passed into law).  I once again stress our support for the concept of a long-term, rational re-balancing of economic power in favour of Zimbabweans in all sectors, one without prejudice to future foreign investment and without jeopardising prospects for nation-wide economic and social advancement.

 

In short, my opinion is that the world needs the resources that Zimbabwe has to offer, and Zimbabwe needs to regenerate a healthy economy while regaining its stature in Africa and the world.  No-one will benefit from the exclusion of this country's resources and my most ardent wish remains one for rapprochement all round.

 

One of the basic tenets of our strategy has been to implement the latest technology and ideas in exploration.  I would like to share some of the successes that this has brought to date and the hopes we have for further developments.

 

Firstly, perhaps we need to look at mining technology developments that promise to change the viability of projects we have been working upon and thereby draw us closer to feasibility and possible production in these fields.  I wrote recently about technology advances in PGE refining and concentration.  These have led us to commit to the sinking of a small exploration shaft in our Snakes Head project to procure trial samples of known PGE-bearing reefs.  Coupled with the recent rises in precious metal prices we look forward to results which could lead to initial scoping studies in the region and a drilling campaign to achieve a JORC resource.  We have selected potential technical partners with which to assist us in this regard and are hopeful of signing a substantive agreement post-testing.

 

In a similar vein, the mining and treatment of nickel laterite ore has advanced significantly in recent years and the resulting reduction in CAPEX requirements has changed the economics of such projects.  More specifically, the size threshold of a laterite deposit has dropped dramatically and I therefore note that we are far more proactive in the analysis of our laterite targets.  Again we hope to release important results from our geochemical and metallurgical work in this regard, which to date have been encouraging and could lead to an eventual estimate of resource size.

 

We have worked with experts in the field to design and build a plant for extraction of the uniquely-coated Marange style of diamonds which avoids the pitfalls associated with these diamonds of traditional extraction techniques.  This is another example of embracing both new technology and expert partners early, while using detailed research to ensure minimal ramp-up time.

 

Turning to exploration technology, we have exploited the availability of affordable XRF analysis and have acquired a second Niton analyser for both field and laboratory use.  This is proving invaluable in detecting all the minerals we are chasing and has all but removed our laboratory (pathfinder assay) bottleneck.  Decision-making on maintenance/expansion versus release of exploration areas has become far more efficient.  Our broad-brush geochem sampling effort has been expanded and anomalies of all minerals are providing future targets at an accelerated rate.

 

Our ongoing electro-magnetic survey using SIROTEM in the Perseverance nickel trend has already yielded promising anomalies that indicate both massive and disseminated nickel sulphide potential in keeping with the style of the historically-exploited Perseverance ore body.  This gives me confidence of establishing firm drill targets for 2008.  What's more, on the same trend, MMI geochem samples processed in Canada from sampling several kms along strike from the old pit, where suspected ultramafic is concealed under cover, has led to the discovery of a previously unknown nickel-rich gossan with potential for significant strike-length.  The SIROTEM follow-up is expected to define the dimensions of what appears to be another massive sulphide body along strike.

 

Our in-house diamond laboratory is in operation and our sorters have recently received training from a world-recognised specialist.  Together with the recent acquisition of a large electronic and physical sample database, we are set to use the latest understanding of diamond indicator minerals to re-process and analyse these concentrates.

 

The philosophy guiding the early adoption of these techniques gives us exactly the right edge to achieve results fast against a backdrop of large-scale geochemical and geophysical research.  I am hopeful that the output from these initiatives will provide target generation for development in the coming 18 months.

 

Coupled with this advantage we continue to benefit from our first-mover advantage which has allowed us almost unfettered access to ground which would be very difficult to obtain elsewhere in the world.  Our broad-brush gold geochem has yielded several important gold and silver anomalies which are being followed up firstly by consolidation of surrounding tenements, then by more detailed geochem work over the anomalies and thereafter by geophysics to ultimately define drill targets.  This strategy is now generating entirely new gold projects as intended.  Fortuitously this comes at a time when gold has reached record highs.  This bodes well for our green-field as well as our existing, advanced gold JORC resources in the Pickstone-Peerless and Giant mines.

 

As reported in the 2007 Annual Report we raised £4.5million cash by the issue of ordinary shares in July 2007 the proceeds of which are reflected in the Interim Results.  Expenditure in the period has been on progressing our planned exploration programme and as previously explained.  Meanwhile we maintain an adequate cash resource to initiate diamond production at short notice at Marange should circumstances allow.

 

I look forward to providing more detailed technical information on the development of these and other projects in the near future and am confident that 2008 will begin to offer reward for the faith our shareholders have placed in the Board and management of ACR.

 

I wish you all a joyous festive season and a prosperous New Year.

 

 

The information in the Chief Executive's Statement in the Interim Report that relates to exploration and technical matters has been approved by Michael Kellow who takes responsibility for them.

 

Michael Kellow (BSc) is a Member of AIG and a full-time employee of African Consolidated Resources plc.  Mr. Kellow has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves' (JORC Code).  Michael Kellow consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

 27 November 2007

 

 

 

 

 

 

 

 

 

The information relates to the period from 1 March 2007 to 31 August 2007.

 

The interim report was approved by the Directors on the 23 November 2007.

 

The interim report is unaudited.