Last checked at 17 Apr 2013 09:36
Oracle Coalfields PLC
("Oracle", the "Company" or the "Group")
Results for the Year ended 31 December 2012
Oracle Coalfields PLC (AIM:ORCP), the coal explorer and developer of a lignite mineral property located in the south-eastern desert of Sindh Province, Pakistan, today announces results of the Company and the Group for the year ended 31 December 2012.
Highlights of the year include:
·; Completion of the Technical Feasibility Study
·; Economic viability of the construction and operation of our Block VI mine confirmed
·; Issue of the formal Mining Licence received
·; Signing of Joint Development Agreement with Karachi Electric Supply Company
·; Completion of Implementation Plan for coal mine development and production
·; Completion of a pre-feasibility study of the suitability of the mine-site for mine-mouth power plant production of electricity at projected tariff rates
Subsequent developments:
·; Successful £934,240 fund-raising in January 2013
Shahrukh Khan, CEO of Oracle, said:
"Oracle has therefore now put in place the building blocks for project implementation and is in active discussions with potential strategic partners, developers and potential contractors to develop both the mine and a mine mouth power plant with support of the Provincial and National Governments. An integrated mine and power plant development will provide security to partners and investors through transparent coal pricing arrangements and a long term Power Purchase Agreement for at least 30 years. The power shortage continues to escalate throughout the country and the development of the Thar coalfield would alleviate this as well as supplying competitive electricity with the assurance of security of supply for the foreseeable future."
Chairman's Statement
I am pleased to present Oracle's results for the period ending 31 December 2012. During the year, your company continued to make good progress, including the issuance of the Mining Lease, the signing of the Joint-Development Agreement with Karachi Electric Supply Company ("KESC") and the preparation of an Implementation Plan to proceed with mine development and production. As might be expected for a mining company at this stage of development, the consolidated financial results for the year to 31 December 2012 show an operational loss after taxation for Oracle and its subsidiaries ("Group") of £741,799 (2011: £948,092). The basic loss per share was 0.35p (2011: loss 0.46p).
At the end of 2012 the Group had cash and cash equivalents of £99,592 (2011: £1,604,602) and total assets less current liabilities of £3.52 million (2011: £4.23 million).
Early in 2013, £934,000 of further capital was raised including contributions from shareholders and management. The Group is now expected to have sufficient working capital to cover its working capital requirements throughout 2013. However, additional funds will be required to develop the Block VI coal mine. The Group is therefore considering options to raise the necessary debt and equity, and has started discussions with potential strategic investors/technical partners from the Middle East and Far East.
Whilst Oracle has made continued progress in developing the project, 2012 was a mixed year in Pakistan on the political and security fronts. Consequently, international investors have been hesitant, and foreign direct investment in the country was low in 2012 on a year on year basis. That said, due to the urgent need to resolve the energy crisis in Pakistan, the Government remains keen to assist your company in the development of the coal project and provides significant support.
The Board extends its thanks to the Coal & Energy Development Department, the Thar Coal Energy Board, the Sindh Coal Authority, and the Government of Sindh for their continued assistance. The Board also continues to be very grateful for the patience and support of our shareholders.
Your company is moving from project development to project implementation. Completion of the implementation phase will largely depend on financing and on entering a suitable partnership, both of which require thorough assessment. The Board aims to pursue both objectives this year as expeditiously as possible with the goal of making the project a significant contributor to Pakistan's energy mix.
Adrian Loader
Chairman
Chief Executive's Statement
The Government of Sindh's continued support for the earliest development of the Thar Coalfield is a key part of its strategy to meet the growing domestic demand for energy at the lowest possible cost whilst alleviating the national balance of payments by reducing dependency on imported fuel.
After completion in the 4th Quarter 2011 by SRK Consulting of the Technical Feasibility Study on the Block VI coal deposit in the Thar Coalfield, Sindh Province the Study was submitted to the Mines & Mineral Development Department, Government of Sindh, which issued the Mining Lease to the Company's local subsidiary, Sindh Carbon Energy Limited ("SCEL") in April 2012. The Mining Lease is a 30 year lease with an option to extend for another 30 years.
During 2012, SCEL entered a Joint-Development Agreement ("JDA") with KESC. The JDA sets out KESC's intent to develop a 300 MW mine-mouth power plant at Block VI with an option to increase to 1,100 MW over time. The JDA is a significant step in the Company's relationship with KESC which is making considerable efforts to develop coal-fired power plants in Sindh Province, and so reduce dependence on oil and gas-fired power plants in view of cost and secure long term supply of fuel. The emphasis on Thar coal, and particularly the Block VI project, is important for KESC to provide the necessary security of supply.
Following the JDA with KESC, the Company appointed Dargo Associates Ltd, a leading independent coal consultant who have been involved with the project since 2007, to review the SRK Technical Feasibility Study and advise on a smaller mine to support a minimum 300 MW power plant at site. In 4th Quarter of 2012, Dargo Associates published the Implementation Plan for a 2.4 million tonnes per annum open-pit mine that could feed a 300 MW power plant as well as supply local industries such as the cement sector. Capital and operating expenditure estimates were reduced substantially from previous figures..
During this period, the Company also entered into a Memorandum of Understanding ("MOU") with Thatta Cement Company, a leading cement company in Pakistan. This agreement is in addition to the MOU previously entered with Lucky Cement Ltd.
Pre-development work in preparation for mining is currently under way at the site including a Corporate Social Responsibility Programme ("CSR"). The CSR activities include basic healthcare, clean water and livestock veterinary care for the local communities. The work programme also covers activities such as drilling water wells to determine the number required for both the coal mine and the power plant. An access road within the Block VI is under consideration.
The Company is making every effort to ensure that the development of the coal mine at Block VI, Thar Coalfield, complies with the requirements of international standards and practice and due corporate governance.
The Baseline Studies of the Environmental & Social Impact Assessment ("ESIA") undertaken by Hagler Bailly of Pakistan and Wardell Armstrong International are complete with Social Impact studies due to be completed in the 2nd Quarter of 2013. The Company will then submit the ESIA to the Sindh Environmental Protection Agency, Government of Sindh ("SEPA") for a public hearing in Thar which is planned for 3rd Quarter 2013. As with the Baseline Studies, your company believes that there should be no major impediments for the project.
With the grant of the Mining Lease, signing of the JDA with KESC, implementation plan to proceed with open pit mining operation and commencement of pre-development work, Oracle is definitely moving from the development to the implementation phase.
Shahrukh Khan
Chief Executive Officer
Consolidated income statement
for the year ended 31 December 2012
2012 £ | 2011 £ | |
CONTINUING OPERATIONS | ||
Revenue | ||
Administrative expenses | (743,663) | (660,156) |
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS | (743,663) | (660,156) |
Exceptional items | -- | (293,429) |
OPERATING LOSS | (743,663) | (953,585) |
Finance income | 1,864 | 5,493 |
LOSS BEFORE INCOME TAX | (741,799) | (948,092) |
Income tax | - | - |
LOSS FOR THE YEAR | (741,799) | (948,092) |
Loss attributable to: | ||
Owners of the parent | (741,799) | (948,092) |
Earnings per share expressed in pence per share: | ||
Basic | (0.35) | (0.46) |
Diluted | (0.33) | (0.42) |
Consolidated statement of comprehensive income
for the year ended 31 December 2012
2012 £ | 2011 £ | |
LOSS FOR THE YEAR | (741,799) | (948,092) |
OTHER COMPREHENSIVE INCOME | ||
Exchange difference on consolidation | (10,742) | (3,884) |
Income tax relating to components of other comprehensive income | - | - |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX | (10,742) | (3,884) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | (752,541) | (951,976) |
Total comprehensive income attributable to: | ||
Owners of the parent | (752,541) | (951,976) |
Consolidated statement of financial position
31 December 2012
2012 £ | 2011 £ | |
ASSETS | ||
NON-CURRENT ASSETS | ||
Intangible assets | 3,672,424 | 3,204,424 |
Property, plant and equipment | 1,816 | 2,127 |
Investments | - | - |
Loans and other financial assets | 60,149 | 62,705 |
3,734,389 | 3,269,256 | |
CURRENT ASSETS | ||
Trade and other receivables | 52,016 | 91,271 |
Cash and cash equivalents | 99,592 | 1,604,602 |
151,608 | 1,695,873 | |
TOTAL ASSETS | 3,885,997 | 4,965,129 |
EQUITY | ||
SHAREHOLDERS' EQUITY | ||
Called up share capital | 216,011 | 214,211 |
Share premium | 6,070,418 | 6,029,702 |
Translation reserve | (19,189) | (8,447) |
Share scheme reserve | 63,070 | 63,070 |
Retained earnings | (2,824,688) | (2,082,889) |
3,505,622 | 4,215,647 | |
Non-controlling interests | 16,029 | 16,029 |
TOTAL EQUITY | 3,521,651 | 4,231,676 |
LIABILITIES | ||
CURRENT LIABILITIES | ||
Trade and other payables | 364,346 | 733,453 |
TOTAL LIABILITIES | 364,346 | 733,453 |
TOTAL EQUITY AND LIABILITIES | 3,885,997 | 4,965,129 |
Consolidated statement of changes in equity
for the year ended 31 December 2012
Called up share capital £ | Profit and loss account £ | Share premium £ | Translation reserve | |
Balance at 1 January 2011 | 184,211 | (1,134,797) | 3,284,291 | (4,563) |
Changes in equity | ||||
Issue of share capital | 30,000 | - | 2,745,411 | - |
Equity-settled share-based payment transactions | -- | -- | -- | -- |
Loss for the year | -- | (948,092) | -- | -- |
Other comprehensive income | - | -- | - | (3,884) |
Balance at 31 December 2011 | 214,211 | (2,082,889) | 6,029,702 | (8,447) |
Changes in equity | ||||
Issue of share capital | 1,800 | - | 40,716 | - |
Loss for the year | - | (741,799) | - | - |
Other comprehensive income | - | -- | - | (10,742) |
Balance at 31 December 2012 | 216,011 | (2,824,688) | 6,070,418 | (19,189) |
Share scheme reserve £ | Total £ | Non-controlling interests £ | Total equity | |
Balance at 1 January 2011 | - | 2,329,142 | 16,029 | 2,345,171 |
Changes in equity | ||||
Issue of share capital | - | 2,775,411 | - | 2,775,411 |
Equity-settled share-based payment transactions | 63,070 | 63,070 | -- | 63,070 |
Loss for the year | -- | (948,092) | -- | (948,092) |
Other comprehensive income | - | (3,884) | - | (3,884) |
Balance at 31 December 2011 | 63,070 | 4,215,647 | 16,029 | 4,231,676 |
Changes in equity | ||||
Issue of share capital | - | 42,516 | - | 42,516 |
Loss for the year | -- | (741,799) | - | (741,799) |
Other comprehensive income | - | (10,742) | - | (10,742) |
Balance at 31 December 2012 | 63,070 | 3,505,622 | 16,029 | 3,521,651 |
Consolidated statement of cash flows
for the year ended 31 December 2012
2012 £ | 2011 £ | |
Cash flows from operating activities | ||
Cash generated from operations | (446,246) | (642,572) |
Net cash from operating activities | (446,246) | (642,572) |
Cash flows from investing activities | ||
Purchase of intangible fixed assets | (1,100,872) | (2,067,152) |
Purchase of tangible fixed assets | (497) | -- |
Interest received | 1,247 | 4,878 |
Net cash from investing activities | (1,100,122) | (2,062,274) |
Cash flows from financing activities | ||
Proceeds of share issue | 42,667 | 3,000,000 |
Cost of share issue | (151) | (195,000) |
Net cash from financing activities | 42,516 | 2,805,000 |
(Decrease)/Increase in cash and cash equivalents | (1,503,852) | 100,154 |
Cash and cash equivalents at beginning of year | 1,603,444 | 1,504,448 |
Cash and cash equivalents at end of year | 99,592 | 1,604,602 |
The financial information set out above does not constitute statutory accountsas defined in the Companies Act 2006.
The consolidated statement of financial position at 31 December 2012, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and theconsolidated cash flow statement for the year then ended have been extracted from theCompany's statutory financial statements upon which the auditor's opinion is unqualified and does not include any statement under Section 498 of the Companies Act 2006.
Copies of the report and financial statements will be posted to Shareholders shortly and will be availablefor download on the Company's website at www.oraclecoalfields.com.
For further information:
Oracle Coalfields PLC +44 (0) 203 102 4807
Shahrukh Khan
Blythe Weigh Communications +44 (0) 207 138 3204
Tim Blythe, Robert Kellner
Novus Capital Markets +44 (0) 207 107 1881
Charles Goodfellow
Grant Thornton +44 (0) 207 728 3402
Gerry Beaney/David Hignell