LONDON (Alliance News) - Polo Resources PLC said Monday its pretax loss narrowed significantly in its first half, and it expects to receive USD22.8 million from a share buy-back offer by a portfolio company.
The natural resources and mine development investment company said its pretax loss was cut to USD2.5 million for the six months ended December 31, 2013 from USD8.8 million the previous year as lower charges and impairments offset lower gains from the sale of certain investments.
The company's gain from the sale of investments fell to USD135,000 from USD780,000 in 2012, but its administrative expenses fell to USD886,000 from USD1.6 million, and its share options expenses fell to USD145,000 from USD664,000.
Polo noted that it was hit in 2012 by a significant USD5 million impairment on its investments and, if this was not including in the results, its operating loss would be largely flat at USD1.1 million from USD1.5 million in 2012.
The company also noted that Signet Petroleum Ltd, an independent African oil explorer in which Polo has a 42% equity interest, has implemented a share buyback from which Polo expects to receive a minimum of USD22.8 million free of any taxation liability. The buyback follows Signet's sale of Namibian interests to Shell Exploration and Production, part of Royal Dutch Shell PLC.
Polo will sell 9.7 million Signet shares at a price of USD2.35 per share in Signet. It said the USD22.8 million compares favourably to the historic cost of Polo's investment in Signet of USD42.7 million when considered against Signet's remaining assets.
The company said it expects to be informed of the share sale allocation by March 13 and receive all proceeds on or before March 24, with all cash being reinvested into the company to help unlock value in its existing portfolio and to possibly acquire further undervalued and high potential assets.
Polo also said that a Mine Development Agreement which will establish the legal, fiscal and operating regimes for the development and commercial exploitation of its 90% owned Nimini Holdings Ltd's gold project in the Kono District of Sierra Leone, has now been signed by Sierra Leone's minister of Mineral Resources.
The company said the agreement remains subject to ratification by the Sierra Leone Parliament before its fiscal terms come into effect, and a further announcement will be made shortly.
Polo Resources shares were flat at 19.25 pence Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
Copyright © 2014 Alliance News Limited. All Rights Reserved.