GCM Resources Regulatory News (GCM)

7 Mar 2005 07:00

Asia Energy PLC07 March 2005 7 March 2005 Asia Energy PLC (AIM: AEN) INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2004 Highlights •Significant progress towards developing Phulbari Coal Project •Test results confirm High Volatile Bituminous coal •Metallurgical and thermal coal products can also be produced •Four coal seams identified •Coal basin extends further north and south than expected •Initial Environmental Examination submitted on schedule •Transport logistics and water management studies progressing •Barclays Capital appointed as Financial Adviser •Significant commitment of expertise and resources to the Definitive Feasibility Study (DFS) £€2.4 million spent in period on drilling and the DFS •Cash in hand at end of period £10.4 million For Further Information: Asia Energy PLC Parkgreen CommunicationsMichael Frayne, Joint Managing Director Justine Howarth / Cathy MalinsDavid Lenigas, Joint Managing Director Tel: +44 (0) 20 7493 3713Tel: +44 (0) 20 7409 0890 cathy.malins@parkgreenmedia.com Gary Lye, Head of OperationsBangladesh: +88 0173 016701 www.asia-energy.com Evolution Securities JPMorgan CazenoveChris Sim Michael Wentworth-StanleyTel: +44 20 7071 4309 Tel: +44 20 7155 4588 Chairman's Statement Asia Energy PLC ('the Company') made significant progress towards developing itsPhulbari Coal Project ('Project') in north-west Bangladesh in the six months to31 December 2004. More than 200 staff, consultants, engineers and field workerswere engaged on the Project, as the Definitive Feasibility Study ('DFS') for the15 million tonnes per year open cut coal mine moved into its most intensivestage. Barclays Capital was appointed strategic financial advisor to the Companyand initiated negotiations on financing specific aspects of the Project with anumber of major international financial institutions. DFS activities included resource definition drilling, geotechnical andgroundwater investigation, coal quality testing, mine planning, coal processingstudies, coal marketing, environmental and social impact assessments, coaltransport logistics and infrastructure. The extensive programme of resource definition drilling commenced on 2 September2004. The drilling programme has been enhanced by surface geophysics(principally gravity), which has provided useful information on the coal basinmorphology and also indicated that the basin extends further northward andsouthward than originally anticipated. Test results confirmed that the coal atPhulbari varies between High Volatile A and High Volatile B Bituminous. Thetests also indicated that both metallurgical and thermal coal products can beproduced economically. A total of four coal seams have now been identified in the Phulbari basin.Exploration drilling had previously identified two seams. Highlights from thedrilling programme are tabulated below: Bore Top Thickness Top Thickness Thickness Thickness TOTAL Upper Upper Main Main Seam Lower Lower COAL Seam Seam Seam Seam1 Seam2 (metres) (metres) (metres) (metres) (metres) (metres) (metres) AEN2 206.96 11.9 222.88 30.4 0.72 1.26 44.28AEN8 271.6 13.7 290.1 26.4 - - 40.10AEN15 241.8 14.4 259.5 45.7 3.9 - 64.00AEN17 271.9 16.1 301.5 38.4 10.96 4.33 69.79AEN19 215.7 11.2 230.1 23.6 5.6 5.4 45.80AEN26 177.0 9.6 204.2 22.4 - - 32.00 Early indications are that the Run-of-Mine coal can be processed in a densemedium plant into three products - a semi-soft coking coal, an export qualitythermal coal, and a high ash domestic product. A very high total recovery isanticipated with the first product comprising 25% of output, and the secondaround 50%. The domestic product, the balance of the output, appears suitablefor the local brickworks industry which consumes several million tonnes per yearof Indian coal. A large diameter coring programme is scheduled to providesamples for process design and product testing. Downhole geophysics utilising the services of the Bangladesh Atomic EnergyCommission has been a valuable tool in coal sampling. The Company has applied astringent coal handling protocol, refrigerating samples from the field rightthrough to delivery to the ACIRL Pty Ltd testing facility in Brisbane,Australia. The Environmental and Social Impact studies are being carried out by SMECInternational Pty Ltd ('SMEC') with the assistance of numerous consultants andagencies from Bangladesh. A significant milestone for the project was thedelivery of the Initial Environmental Examination ('IEE') to the Government ofBangladesh on 9 February 2005. The document is being evaluated by the Departmentof Environment with the view to obtaining an environmental site clearance. Thiswill pave the way for the Environmental Impact Assessment ('EIA') to be lodgedby mid-year. The IEE was the culmination of more than six months' environmentaland socio-demographic studies, with up to 120 personnel involved. Groundwater and surface water management are critical for the project, and acombined team from SMEC and GHD Pty Ltd has been carrying out field testing andmodelling. The Company has appointed water management specialists from CoffeyGeoscientists Pty Ltd to assist in developing an overall water management plan. Coal transport logistics studies are progressing. They are being guided bymarketing studies, with rail, port and road options for transporting coal toboth international and the local Bangladesh markets. Results During the six months to 31 December 2004, the Company made a loss before andafter tax of £300,307 (30 June 2004 : Loss of £396,065) . Exploration costs of£2.4 million for the period have been capitalised (30 June 2004 : £2.1million).They relate mainly to the drilling programme at Phulbari and the work on theDefinitive Feasibility Study. In Summary Great strides have been made during the period towards realising the PhulbariProject. Drilling continues to confirm the resource base and the quality of theproduct, in line with expectations of starting a substantial low cost coalmining operation in the Phulbari coal basin. I would like to thank Asia Energystaff, consultants and supporting engineers and field workers for their positivecontribution. This statement is being sent to all shareholders and will also beavailable from the Company's registered office. Christopher Eager Chairman Group Profit and Loss Account 6 months to Period ended 31 December 30 June 2004 2004 Note (unaudited) £ £ Administrative Expenses (561,482) (497,171) Operating loss (561,482) (497,171) Net interest 261,175 101,106 Loss on ordinary activities before 2 (300,307) (396,065)taxation Taxation on loss on ordinary activities - - Loss on ordinary activities after (300,307) (396,065)taxation Loss for the financial period (300,307) (396,065) Basic and diluted loss per share (pence) (0.7)p (2.2)p GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 6 months to Period ended 31 December 30 June 2004 2004 (unaudited) £ £ Loss for the financial period (300,307) (396,065) Total recognised loss for the period (300,307) (396,065) The comparative for 30 June 2004 includes the period from 26 September 2003 to30 June 2004. The Company was incorporated on 26 September 2003. Group Balance Sheet 31 December 30 June 2004 2004 Note (unaudited) £ £ Fixed assetsIntangible assets 4,548,467 2,121,004Tangible assets 379,221 154,475 4,927,688 2,275,479 Current assetsStocks - 36,564Debtors 163,909 115,656Cash at bank and in hand 4 10,169,946 12,165,535 10,333,855 12,317,755 Creditors: amounts falling due within one (637,976) (170,359)year Net current assets 9,695,879 12,147,396 Total assets less current liabilities 14,623,567 14,422,875 Capital and reservesCalled up share capital 3,827,064 3,760,264Share premium account 11,492,875 11,058,676Profit and loss account (696,372) (396,065) Shareholders' funds 5 14,623,567 14,422,875 The Financial Statements were approved by the Board on 4 March 2005 and signedon its behalf. ..................... ..................... Jonathan Malins Michael Frayne Group Cash Flow Statement Note 6 months to Period ended 31 December 30 June 2004 2004 (unaudited) £ £ Net cash outflow from operating 3 (575,363) (619,820)activities Returns on investments and servicing offinanceInterest received 288,823 55,579Interest paid - (5,317)Net cash inflow from returns on 288,823 50,262investments and servicing of finance Taxation - - Capital expenditure and financialinvestmentPurchase of tangible fixed assets (244,393) (121,120)Purchase of intangible fixed assets (1,950,655) (466,155)Net cash outflow from capital expenditure (2,195,048) (587,275)and financial investments Acquisitions and disposalsNet cash acquired with subsidiary - 33,014undertaking Net cash outflow from acquisitions - 33,014 Management of liquid resourcesShort term deposits 2,000,000 (11,000,000) Net cash outflow before financing (481,588) (12,123,819) FinancingIssue of shares 500,999 14,726,977Share issue costs (15,000) (1,268,038)Repayment of borrowings on acquisition - (165,221)Net cash inflow from financing 485,999 13,293,718 Increase in cash 4 4,411 1,169,899 The comparative for 30 June 2004 includes the period from 26 September 2003 to30 June 2004. The Company was incorporated on 26 September 2003. Notes to Interim Report 1 - Basis of Preparation of Financial Statements The financial information contained herein does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Theunaudited interim financial information has been prepared on the basis of theaccounting policies set out in the Group's accounts for the year ended 30 June2004. The figures for the year ended 30 June 2004 have been extracted from theaccounts. Those accounts have been filed with the Registrar of Companies andcontained an unqualified report. The Company's auditors, Ernst & Young LLP, havereviewed the interim financial information for the six months ended 31 December2004 and their report is set out below. The comparative for 30 June 2004 includes the period from 26 September 2003 to30 June 2004. The Company was incorporated on 26 September 2003. The financial information for the 6 months ended 31 December 2004 is unaudited.In the opinion of the directors the financial information for this period fairlypresents the financial position, results of operations and cash flows for thisperiod and conforms with generally accepted accounting principles. 2 - Segmental Analysis There was no turnover during the financial period. The administrative expensesrelate to the United Kingdom, Australian and Bangladesh offices. The Group operates in one principal area of activity being coal exploration anddevelopment. The Group operates within one geographical market, being Bangladesh, and issupported by management and administrative functions in Australia and the UnitedKingdom. United Kingdom Australia Bangladesh Total £ £ £ £ Six Months ended 31December 2004Operating loss (62,275) (238,032) - (300,307)Net assets/ 15,025,158 (403,871) 2,280 14,623,567(liabilities) Period ended 30 June2004Operating loss (232,507) (138,218) (25,340) (396,065)Net assets/ 14,586,433 (139,778) (23,780) 14,422,875(liabilities) 3 - Net Cash Outflow from Operating Activities 6 months to Period ended 31 December 30 June 2004 2004 (unaudited) £ £ Operating loss (561,482) (497,171)Depreciation and amortisation 19,646 -Increase in debtors (75,900) (36,988)Increase/(Decrease) in creditors 5,809 (49,097)Decrease/(Increase) in stocks 36,564 (36,564)Net cash outflow from operating activities (575,363) (619,820) 4 - Reconciliation of Net Cash Flow to Movement in Net Funds 6 months to Period ended 31 December 30 June 2004 2004 (unaudited) £ £ Increase in cash in the period 4,411 1,169,899Cash (outflow)/inflow from financing - short (2,000,000) 11,000,000term (1,995,589) 12,169,899 Exchange differences - (4,364)Net funds at beginning of period 12,165,535 -Net funds at end of period 10,169,946 12,165,535 5 - Reconciliation of Movements in Shareholders' Funds 6 months to Period ended 31 December 30 June 2004 2004 (unaudited) £ £ Loss for the period (300,307) (396,065)New share capital subscribed 66,800 3,760,264Share premium (net of costs) 434,199 11,058,676Net increase in shareholders' funds 200,692 14,422,875 Shareholders' funds at beginning of period 14,422,875 - Shareholders' funds at end of period 14,623,567 14,422,875 Independent Review Report Introduction We have been instructed by the company to review the financial information forthe six months ended 31 December 2004 which comprises Group Profit and LossAccount, Group Balance Sheet, Group Cash Flow Statement, Group Statement ofTotal Recognised Gains and Losses, Reconciliation of Movements in Shareholders'Funds and the related notes 1 to 5. We have read the other information containedin the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report is made solely to the company having regard to guidance contained inBulletin 1999/4 'Review of interim financial information' issued by the AuditingPractices Board. To the fullest extent permitted by the law, we do not accept orassume responsibility to anyone other than the company, for our work, for thisreport, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report as required by the AIM Rulesissued by the London Stock Exchange. Review work performed We conducted our review having regard to the guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing PracticesBoard for use in the United Kingdom. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data, and based thereon, assessing whetherthe accounting policies and presentation have been consistently applied, unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with UnitedKingdom Auditing Standards and therefore provides a lower level of assurancethan an audit. Accordingly we do not express an audit opinion on the financialinformation. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2004. Ernst & Young LLPRegistered AuditorLondon4 March 2005 This information is provided by RNS The company news service from the London Stock Exchange