Altona Energy Regulatory News (ANR)

31 Mar 2008 10:45

Altona Resources PLC31 March 2008 Altona Resources Plc / Index: AIM / Epic: ANR / Sector: Exploration & Production31 March 2008 Altona Resources Plc ("Altona" or "the Company") Interim Results Altona Resources Plc, the Australian based energy company, announces its resultsfor the six month period to 31 December 2007. Overview •Completion of technical pre-feasibility study for development of 10m barrel pa Coal to Liquid plant with a 560 MW co-generation power facility •Large diameter bulk sampling core drilling programme and HQ 61mm slimcore drilling programme and geotechnical assessment completed •Hydrogeological field work completed •Field study analysis expected to be competed early Q2 2008 •Imminent commencement of bankable feasibility study •Strong regional support - likely elevation to "Major Project" status with Australian government. •Share subscription agreement with Hong Kong based investment company Tongjiang International Energy Co. Ltd, raising £11m subject to shareholder agreement •Project significantly de-risked as a result of field work and advancements over the period Managing Director Chris Schrape said, "We are now entering a transitional periodfor the Company following the completion of the key technical field componentsof the pre-feasibility study for the development of an integrated 10 millionbarrel per year Coal to Liquid ("CTL") plant with a 560 MW co-generation powerfacility at our Arckaringa Project ("Arckaringa") in South Australia. With thecompletion of the pre feasibility study in sight, all the positive factorsfavouring development at Arckaringa continue to be confirmed. With ourinvestment we are systematically de-risking the project which is shaping up tobe highly exciting. The Arckaringa coal basin contains an estimated 7.8 billiontonnes of coal. The CTL process is ideal for the resource, and the demandeconomics from local and international markets will underpin the potential ofthe project." Chairman's Statement This has been one of the most exciting periods since the Company's inception,during which we have achieved a number of significant steps towards our goal ofbecoming a leading energy supplier, through the use of the Coal to Liquid("CTL") process. With coal resources at our Arckaringa Project in SouthAustralia estimated to be in excess of 7.5 billion tonnes, we believe we are onthe cusp of bringing a project to fruition that will harness what is potentiallyone of the world's largest undeveloped energy banks. Completion of a pre-feasibility study for the development of our planned 10million barrel per year integrated CTL plant with a 560 MW co-generation powerfacility at Arckaringa is imminent, bringing us to a point where we can commencethe final stage of the Bankable Feasibility Study ("BFS"). Importantly, financefor a significant portion of the BFS has been arranged with the sharesubscription agreement with a Hong Kong based investment company, TongjiangInternational Energy Co. Ltd ("Tongjiang"), to raise £11,618,000 subject toshareholder approval, as announced on 26 February 2008. Field Technical Programme The Company's drilling programme has been developed with a view to identifyingthe optimum area for opencast coal extraction for the purposes of fuelling theproposed CTL plant. Drilling has focussed on the Wintinna coal deposit withinthe Arckaringa Project and aims to redefine at least 700 million tonnes of coalto be classified as Measured or Indicated, according to the current JORC codefor reporting coal resources. In November 2007 we announced the completion of the large diameter (200mm) bulksampling core drilling programme; five boreholes located at representative sitesevenly spread throughout the area of resource definition produced approximatelyfive tonnes of coal. In addition, 1,031.23m of large diameter pre-collaring andcoring was undertaken and all holes were geophysically logged successfully.Analysis from the results of this drilling will enable us to validate andupgrade the previously defined coal resource and identify specifications for thepreparation and mining of Wintinna coal for use in the CTL process. November also saw the conclusion of the hydrogeological field work required totest groundwater conditions through the construction of three production wellsand three piezometers (devices used to measure water pressures in layers ofporous rock). Analysis of the retrieved data from this work will enable us tounderpin a groundwater management plan for the open pit mining process. Havingcompleted the large diameter drilling programme we proceeded to the HQ 61mmslimcore drilling programme required to provide further detailed data forresource definition and quality evaluation. The complete field programme,consisting of 21 boreholes, including four to assess the geotechnical parametersfor the site, was completed on schedule in February 2008 and we are now waitingfor results. We anticipate that it will take up to two months to analyse and report on theresults from the field programme and bring the pre-feasibility programme to anend. We expect the results to be returned early in the second quarter of 2008,slightly later than our initial estimation of the first quarter of 2008. Apositive outcome in these reports will enable Altona to move onto the BFS. BFS Given the Project's key strengths that have already been identified during thepre-feasibility stage at the Arckaringa Project, it is likely that progressionto the final stage of the BFS will result in its promotion to "major project"status in South Australia. With the aid of a streamlined state approval andevaluation process, we expect the final feasibility and government approvalsstage to take approximately 24 months. Following this, the construction andoperational commencement of two modules comprising the 10 million barrel peryear CTL plant and associated power facility could come to fruition in as littleas 36 to 54 months. Tongjiang Agreement With our focus ever looking forward, we were pleased to announce in February2008, a share subscription agreement with Tongjiang International Energy Co. Ltd("Tongjiang"), a Hong Kong based investment company, to raise £11,618,000through the placing of 240 million new ordinary shares. The new funds, whichrepresent a significant portion of the cash required to fund the forthcomingBFS, will be made available to the Company in three tranches, the first of whichwas completed on 29 February 2008 and the final two which will be completed,subject to shareholder approval, on 15 April 2008 and 30 June 2008. We are delighted to welcome Tongjiang as a major new investor in Altona. TheBoard believes this relationship is an excellent opportunity for the Company inopening doors into China, where there is an increasingly strong demand forinvestment in energy projects and for secure sources of clean transport fuels,notably low sulphur diesel and jet fuel. We believe that the Asian market inparticular could be vital for Altona and we are keen to cement relationshipssuch as this, to build strategic business opportunities for the longer termbenefit of the Company. Financial As a reflection of the Company's current position and the establishment ofoperations and the exploration and evaluation phase of the project, the Companyis reporting pre-tax losses for the six-month period ended 31 December 2007 of£330,000 (2006: loss of £768,000). Its cash position at 31 December 2007 was£558,000. Appointments We believe the Australian investment community, which has a strong understandingof the power deficit forecast for South Australia and the growing transportfuels supply gap in Australia, could play an integral role in the development ofthe Arckaringa Project in the future. In line with this, in November 2007 theCompany appointed a leading Australian stockbroker and financial advisory firm,Bell Potter Securities Limited, as its Australian financial adviser, to adviseAltona in respect to the institutional and retail investor markets in Australia. Outlook Our findings so far have served to reinforce all of the positive reasons forembarking on the Arckaringa Project. We firmly believe that given its excellentlocation, significant coal resources, growing demand for liquid fuel productsboth on the domestic and export markets, and provision of a tangible solution toenergy deficit in the region, this project has a very exciting future.Furthermore, upon completion of the placement to Tongjiang, the Company willhave excellent funding and will be in an enviable position to achieve a numberof its major strategic goals. I would like to thank all our shareholders for their continued support as wellas the Board and management for their diligence and hard work in bringing Altonato this exciting stage in its development. We look forward to regularly updatingshareholders on our progress throughout the remainder of the year. Chris Lambert Chairman 31 March 2008 Independent Review Report to Altona Resources Plc Introduction We have been engaged by the Company to review the accompanying ConsolidatedBalance Sheet of Altona Resources Plc as of 31st December 2007 and the relatedConsolidated Statements of Income, Changes in Equity and Cash Flows for thesix-month period then ended and related notes. We have read the otherinformation contained in the interim financial report and considered whether itcontains any apparent misstatements or material inconsistencies with theinformation in the financial statements. Directors' Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the Directors. The Directors areresponsible for preparing the interim report in accordance with the AIM rulesfor Companies which require that the financial information must be presented andprepared in a form consistent with that which will be adopted in the next annualfinancial statements. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the interim report based on our review. Thisreport, including the conclusion, has been prepared for and only for the Companyfor the purpose of the AIM rules for Companies and for no other purpose. We donot, in producing this report, accept or assume responsibility for any otherpurpose or to any other person to whom this report is shown or into whose handsit may come save where expressly agreed by our prior consent in writing. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity", issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion herein. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the accompanying interim financial information is not prepared, in allmaterial respects, in accordance with the basis of preparation set out in theNotes to the Interim Report and the AIM rules for Companies. CHAPMAN DAVIS LLP Chartered Accountants London 31st March 2008 Consolidated Income Statement For the half year ended 31st December 2007 Notes Reviewed Reviewed Audited Half-year ended Half-year ended Year ended 31 Dec 2007 31 Dec 2006 30 June 2007 £'000 £'000 £'000 Administrative expenses (363) (415) (675) Share options expensed - (364) (364) --------------------------- ------ ----------- ----------- ---------Operating Loss (363) (779) (1,039) Interest income 33 11 29 --------------------------- ------ ----------- ----------- ---------Loss on ordinaryactivities before taxation (330) (768) (1,010) Income tax expense 2 - - - --------------------------- ------ ----------- ----------- ---------Loss for the financialperiod (330) (768) (1,010)--------------------------- ------ ----------- ----------- --------- Loss per share expressedin pence 4 - Basic (0.12p) (0.33p) (0.41p) Consolidated Balance Sheet At 31st December 2007 Notes Reviewed Reviewed Audited 31 Dec 2007 31 Dec 2006 30 June 2007 £'000 £'000 £'000ASSETSNon-current assetsIntangible assets 5 3,928 2,508 2,957Plant and equipment 65 3 6Trade and other receivables 39 - 39 ---------- ----------- ----------- 4,032 2,511 3,002 ---------- ----------- -----------Current assetsCash at bank and in hand 558 391 1,638Debtors 155 32 65 ---------- ----------- ----------- 713 423 1,703 ---------- ----------- -----------Total assets 4,745 2,934 4,705 ---------- ----------- ----------- LIABILITIESCurrent liabilitiesTrade and other payables 416 47 164 ---------- ----------- -----------Net assets 4,329 2,887 4,541 ---------- ----------- -----------EQUITYCalled up share capital 283 240 283Share premium 3,226 1,402 3,226Merger reserve 2,001 2,001 2,001Other reserves 401 371 401Foreign exchange reserve 117 - (1)Retained earnings (1,699) (1,127) (1,369) ---------- ----------- -----------Total equity 4,329 2,887 4,541 ---------- ----------- ----------- Consolidated Cash Flow Statement For the half year ended 31st December 2007 Reviewed Reviewed Audited Half-year ended Period Period 31 Dec 2007 ended ended 31 Dec 2006 30 June 2007 £'000 £'000 £'000 Operating activitiesOperating loss (363) (779) (1,039)Adjustment to reconcile profitbefore tax to net cash flowsNon-cash:Depreciation - - 1Foreign exchange adjustment 9 - 22Share options expensed - 364 364Working capital adjustments(Increase) / decrease in debtors (90) 10 (59)Increase / (decrease) in creditors 7 (101) (59) ---------- ----------- -----------Net cash flows used in operatingactivities (437) (506) (770) Investing activitiesPayments to acquire tangible fixed (59) (1) (5)assetsPayments to acquire intangible fixedassets (617) (149) (546)Payment for bond deposit - - (3)Interest received 33 11 29 ---------- ----------- -----------Net cash outflow from investing (643) (139) (525)activities Financing activitiesNet proceeds from issue of shares - 582 2,479 ---------- ----------- -----------Net cash inflow from financing - 582 2,479 ---------- ----------- -----------Increase/(decrease) in cash in (1,080) (63) 1,184periodCash at bank and in hand atbeginning of 1,638 454 454period ---------- ----------- -----------Cash at bank and in hand at end of 558 391 1,638period ---------- ----------- ----------- Consolidated Statement of Changes in Equity For the half year ended 31st December 2007 Issued Share Merger Share Foreign Retained Total capital premium reserve based exchange earnings shareholders reserve payment reserve equity reserve £'000 £'000 £'000 £'000 £'000 £'000 Openingbalance at 1July 2006 231 829 2,001 7 - (359) 2,709Shares issuedduring theperiod 9 573 - - - - 582Share basedpayments - - - 364 - - 364Loss for theperiod - - - - - (768) (768)------------------ ------- ------- ------- -------- ------- ------- ---------Balance at 31December 2006 240 1,402 2,001 371 - (1,127) 2,887 Share capitalissued 43 2,026 - - - - 2,069Cost of shareissue - (204) - - - - (204)Share basedpayments - - - 32 - - 32Optionsexercised - 2 - (2) - - -Currencytranslationreserve - - - - (1) - (1)Loss for theperiod - - - - - (242) (242)------------------ ------- ------- ------- -------- ------- ------- ---------Balance at 30June 2007 283 3,226 2,001 401 (1) (1,369) 4,541------------------ ------- ------- ------- -------- ------- ------- --------- Currencytranslationreserve - - - - 118 - 118Loss for theperiod - - - - - (330) (330)------------------ ------- ------- ------- -------- ------- ------- ---------Balance at 31December 2007 283 3,226 2,001 401 117 (1,699) 4,329------------------ ------- ------- ------- -------- ------- ------- --------- Notes to the Interim Report For the half year ending 31st December 2007 1. PRESENTATION OF INTERIM RESULTS This interim report was approved by the Directors on 31 March 2008. The interimresults have not been audited, but were the subject of an independent reviewcarried out by the Company's auditors, Chapman Davis LLP. Their review confirmedthat the figures were prepared using applicable accounting policies andpractices consistent with those adopted in the annual report. The financialinformation contained in this interim report does not constitute statutoryaccounts as defined by Section 240 of the Companies Act 1985. Shareholders canreceive a copy of this interim report from the Company's registered office at 55Gower St London WC1E 6HQ. The accounts have been prepared on a going concern basis. As is common with manyjunior mining companies, the Company raises money for exploration and capitalprojects as and when required. There can be no assurance that the Group'sprojects will be fully developed in accordance with current plans or completedon time or to budget. Future work on the development of these projects, thelevels of production and financial returns arising there from may be adverselyaffected by factors outside the control of the Group. 2. TAXATION No taxation has been provided due to losses in the period. 3. DIVIDENDS The Directors do not recommend the payment of a dividend. 4. LOSS PER SHARE The basic loss per share is derived by dividing the loss for the periodattributable to ordinary shareholders by the weighted average number of sharesin issue. Reviewed Reviewed Audited 31 Dec 2007 31 Dec 2006 30 June 2007 £'000 £'000 £'000Loss for the period (330) (768) (1,010)Weighted average number of shares -expressed in million 283.2 235.7m 245.7mBasic loss per share - expressed inpence (0.12p) (0.33p) (0.41p) As the inclusion of the potential ordinary shares would result in a decrease inthe loss per share they are considered not to be dilutive and, as such, thediluted loss per share calculation is the same as the basic loss per share. 5. INTANGIBLE ASSET The Intangible Asset is in respect of the Project of Arckaringa Energy PtyLimited. Reviewed Reviewed Audited 31 Dec 2007 31 Dec 2006 30 June 2007 £'000 £'000 £'000Exploration and evaluationCostAt beginning of period 2,957 2,361 2,361Deferred evaluation expenditure 862 147 619Exchange adjustment 109 - (23)------------------------------- ---------- ----------- -----------Intangible Asset - Project 3,928 2,508 2,957------------------------------- ---------- ----------- ----------- Notes to the Interim Report For the half year ending 31st December 2007 6. CALLED UP SHARE CAPITAL Authorised £'0001,000,000,000 Ordinary shares of 0.1p each 1,000 Allotted, called up and fully paid283,165,784 Ordinary shares of 0.1p each 283 Share options and warrants The following equity instruments have been issued by the Company and have notbeen exercised at 31 December 2007: Number of Exercise Expires ordinary shares priceIPO options 1,750,000 1.00p 10/03/2010Warrant instrument 3,000,000 8.00p 02/08/2011Warrant instrument 3,000,000 12.00p 02/08/2011Warrant instrument 3,000,000 16.00p 02/08/2011Director options 6,000,000 7.00p 12/10/2011Director options 5,000,000 10.00p 12/10/2011Director options 3,000,000 14.00p 12/10/2011Broker options 1,500,000 4.75p 23/04/2012Broker options 1,500,000 9.50p 23/04/2012 7. TURNOVER AND SEGMENTAL INFORMATION The Company has no turnover during the period. The Group operates in one business segment, the exploration and evaluation ofcoal. The Group has material interests in two geographical segments, Australiaand the United Kingdom. The Group assets are substantially attributable to theexploration and evaluation of coal activities in Australia. The parent Companyoperates a head office based in the United Kingdom which incurred certainadministration and corporate costs. By geographical area United Kingdom Australia Total £'000 £'000 £'000Loss for the half year ended 31 December2007 (308) (22) (330)Other segment information:Segment assets 720 4,025 4,745 Operating results and net assets are substantially attributable to activities inAustralia. The parent company operates a head office based in the United Kingdom whichincurs certain administration costs. ***ENDS*** For further information visit www.altonaresources.com or please contact: Christopher Lambert Chairman +44 (0) 20 7024 8391 Christopher Schrape Managing Director +61 (0) 417 984 434 Hugh Oram Nabarro Wells & Co Limited +44 (0) 20 7710 7400 Alastair Stratton Matrix Corporate Capital LLP +44 (0) 20 7925 3300 Victoria Thomas St Brides Media & Finance +44 (0) 20 7236 1177 Notes to Editors: About Altona Altona Resources Plc is an Australian based energy Company that was admitted totrading on AIM in March 2005. Altona's primary focus is the completion of abankable feasibility study for its wholly owned Arckaringa Project for anintegrated 10 million barrel per year Coal to Liquid ('CTL') plant with a 560 MWco-generation power facility. The Company holds, through its wholly owned subsidiary Arckaringa Energy PtyLtd, a 100% interest in three exploration licences covering 2,500 sq. kms in thenorthern portion of the Permian Arckaringa Basin in South Australia. Theseinclude three coal deposits, Westfield (EL3360), Wintinna (EL3361) andMurloocoppie (EL3362). All three lie close to the Adelaide to Darwin railway andthe Stuart Highway. Containing more than 7.5 billion tonnes of coal (based onprevious JORC equivalent standards of the time) these coal deposits areeffectively one of the world's largest undeveloped energy banks, capable ofconversion into clean liquid fuels, low cost power and high value industrialfeedstocks. About Coal-to-Liquids (also see www.altonaresources.com) CTL is a proven technology which converts coal into more environmentally cleanand manageable energy sources including gas and synthetic fuels. The processinvolves two major stages, gasification to produce synthetic gas ("Syngas") richin hydrogen and carbon, and a liquefication stage where the Syngas is reactedover a catalyst to produce high quality, ultraclean synthetic fuels and chemicalfeedstocks. CTL is a prime example of clean coal technology - the associated combined cycleunits produce negligible sulphur oxides, significantly less nitrogen oxides and10 - 20% less CO2 per unit of power generated than a conventional coal firedplant, whilst carbon capture and storage offers the potential to reduce theoverall greenhouse gas emissions from CTL to below the "well to wheel" level offuels derived from crude oil. The technology is best demonstrated in South Africa, where currently 30% of thecountry's gasoline and diesel fuel needs are met through CTL plants. This information is provided by RNS The company news service from the London Stock Exchange