Last checked at 16 Apr 2014 07:00
Final Results
16 April 2014
Oracle Coalfields PLC
("Oracle", the "Company" or the "Group")
Results for the Year ended 31 December 2013
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 2013.
Highlights of the year include:
· Joint Development Agreement with China CAMC Engineering Co Ltd for the development of the coal mine.
· Exclusive Memorandum of Understanding with SEPCO Electric Power Construction Corporation for the development of a 600 MW coal-fired power plant to cover its design, construction and operation.
· Two successful fund-raisings during in the year :
o £0.93 million in January, and
o £0.88 million in October.
Subsequently:
· A "No Objection Certificate" has been issued by the Environmental Protection Agency Government of Sindh on 17th January 2014 for the Environmental and Social Impact Assessment for Block VI of the Thar Coalfield submitted in 2013 concerning its environmental plan.
Shahrukh Khan, CEO of Oracle, said:
"Oracle is now finalising detailed agreements with its two Chinese partners, CAMCE and SEPCO for all the elements of its energy project in the Thar desert of Sindh Province of Pakistan. Oracle looks to final investment decision on the project in its entirety towards the end of 2014. 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 2013, which was a year of much activity for your company. It began with a fully proved up and commercially viable coal resource; on that basis the key objective for the Board and management was to find partners and investors with whom we could take the project forward. There was considerable interest in China and since September, we have crystallised arrangements, firstly with the Chinese state-owned company, China CAMC Engineering Co., Ltd. (CAMCE), for the mine and subsequently with another state-owned company, SEPCO Electric Power Construction Corporation (SEPCO), for the power plant. We now aim to complete Engineering, Procurement and Construction Contract (EPC) contracts with these companies for the mine and for the power plant respectively. CAMCE and SEPCO have introduced us to Sinosure, the state-owned China Export & Credit Insurance Corporation, which is expected to underwrite the capital expenditure of most of the power plant and part of the mine. Detailed discussions are to be held with Sinosure, and we also anticipate negotiations on the electricity tariff and coal price with the authorities in Pakistan.
Reflecting the position of the company as a mining company, now moving towards financial close, the consolidated financial results for the year to 31 December 2013 show an operational loss after taxation for Oracle and its subsidiaries ("Group") of £1,038,342 (2012: £741,799). The basic loss per share was 0.37p (2012: loss 0.35p).
The underlying operational costs for the year remain comparable to 2012 but, in preparation for the move towards final investment decision, during the year the Board undertook a detailed review of the recoverability of all expenditure capitalised as exploration costs by the company. As a result of the review an impairment provision of £217,519 has been made against costs capitalised in previous years, plus costs of £92,261 incurred during 2013 which had been charged directly to the statement of profit or loss instead of being capitalised.
At the end 2013 the Group had cash and cash equivalents of £538,789 (2012: £99,592) and total assets less current liabilities of £4.19 million (2012: £3.52 million).
During 2013, we raised further capital in two tranches including contributions from shareholders and management, in January of £934,000 and in October of £876,884. During the second quarter of 2014, the company will approach the market to raise the funds needed to cover expenditure to reach financial close, anticipated by year-end. Towards the end of the year, and contingent on reaching final investment decision, the company will make a further approach to the market for the funds needed to develop the project. The Group is considering various options to raise the necessary equity and debt, and has started discussions with potential strategic investors and technical partners.
The new government in Pakistan, elected in May, has shown its determination to develop the economy by developing export capability and encouraging new opportunities for foreign investment. Its support for the development of indigenous coal resource is strong, energy being recognised as fundamental to the economic development of the country.
The Board extends its thanks to the Thar Coal Energy Board, the Energy Department, the Sindh Coal Authority, and the Government of Sindh for their continued assistance. The Board continues to be very grateful for the patience and support of our shareholders.
Adrian Loader
Chairman
Chief Executive's Report
Pakistan continues to be affected by electricity shortages which are reducing the potential for economic growth. The new government elected in May 2013 has a commitment to resolve the energy shortfall and has reaffirmed support for the development of indigenous energy and power projects and in particular support for the development of coal and energy in the Thar coalfield.
Following the completion of the Environmental and Social Impact Assessment (ESIA) by Hagler Bailly of Pakistan and Wardell Armstrong International the report was submitted to the Sindh Environmental Protection Agency, Government of Sindh (SEPA) in April 2013. A public hearing was held on the site in June 2013 which was attended by the local people along with government representatives, SEPA, various non-governmental organisations (NGOs) and our consultants as part of the public consultation process.
Early in July 2013 SEPA held a Technical Committee Hearing in Karachi to examine the technical aspects of the ESIA and to take on board concerns raised at the public hearing which was attended by the Company and its consultants.
Following these meetings SEPA has issued the No Objections Certificate giving formal approval for the ESIA in January 2014 which is another significant step towards mine development.
During 2013 the Company has been actively seeking strategic partners to work with to facilitate the development of an integrated mine and power plant on the site and in September 2013 entered into a Joint Development Agreement (JDA) with CAMCE, a division of Sinomach for the development of the mine.
In November 2013, the Company entered into a Memorandum of Understanding (MOU) with SEPCO, a subsidiary of Power Construction Corporation of China (PowerChina) for the construction of initially a 600MW mine mouth power plant. An EPC is being developed and we are working towards entering into a JDA with SEPCO which will involve investment by SEPCO in both the mine and power plant.
As reported last year the Company entered into a JDA with the Karachi Electric Supply Company, now renamed K-Electric (KE) to develop initially a 300MW power plant with the potential to increase this to 1100MW over time. Additionally KE have proposed entering into a Power Purchase Agreement (PPA) with the Company to purchase the entire output from the power plant for a period of 30 years and the Company is working with KE to draw up the PPA agreement which will be presented to the National Electric Power Regulatory Authority (NEPRA) for approval later in 2014. In view of the developments with SEPCO to develop initially a 600MW mine-mouth power plant and discussions with KE in Karachi, the strategy is to now develop a 600MW mine-mouth power plant at Block VI, Thar together with the PPA agreement.
These are all exciting steps in the development of an integrated coal and power development within the Block VI coal property in Thar and the work in 2014 will concentrate on formalising agreements and contracts to bring the project into full implementation.
Work is continuing on site in the pre-development stage to implement a Corporate Social Responsibility Programme (CSR) to provide early benefits to the local community in terms of water, basic healthcare and veterinary support. Land survey work is being undertaken to develop a Resettlement Action Plan (RAP) in accordance with the Resettlement policy framework recently published in draft by the Sindh Government and that will conform to international best practice.
Oracle continues to look to find other coal mining and energy projects.
Shahrukh Khan
Chief Executive Officer
Consolidated income statement
for the year ended 31 December 2013
2013 £ | 2012 £ | |
CONTINUING OPERATIONS | ||
Revenue | - | - |
Other operating income | 82 | - |
Administrative expenses | (1,041,434) | (743,663) |
OPERATING LOSS | (1,041,352) | (743,663) |
Finance income | 3,010 | 1,864 |
LOSS BEFORE INCOME TAX | (1,038,342) | (741,799) |
Income tax | - | - |
LOSS FOR THE YEAR | (1,038,342) | (741,799) |
Loss attributable to: | ||
Owners of the parent | (1,028,042) | (741,799) |
Non-controlling interests | (10,300) | - |
(1,038,342 | (741,799) | |
Earnings per share expressed in pence per share: | ||
Basic | (0.37) | (0.35) |
Diluted | (0.35) | (0.33) |
Consolidated statement of comprehensive income
for the year ended 31 December 2013
2013 £ | 2012 £ | |
LOSS FOR THE YEAR | (1,038,342) | (741,799) |
OTHER COMPREHENSIVE INCOME | ||
Exchange difference on consolidation | (3,272) | (10,742) |
Income tax relating to components of other comprehensive income | - | - |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX | (3,272) | (10,742) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | (1,041,614) | (752,541) |
Total comprehensive income attributable to: | ||
Owners of the parent | (1,031,314) | (752,541) |
Non-controlling interests | (10,300) | - |
(1,041,614) | (752,541) |
Consolidated statement of financial position
31 December 2013
2013 £ | 2012 £ | |
ASSETS | ||
NON-CURRENT ASSETS | ||
Intangible assets | 3,755,014 | 3,672,424 |
Property, plant and equipment | 1,228 | 1,816 |
Loans and other financial assets | - | 60,149 |
3,756,242 | 3,734,389 | |
CURRENT ASSETS | ||
Trade and other receivables | 40,952 | 52,016 |
Cash and cash equivalents | 538,789 | 99,592 |
579,741 | 151,608 | |
TOTAL ASSETS | 4,335,983 | 3,885,997 |
EQUITY | ||
SHAREHOLDERS' EQUITY | ||
Called up share capital | 327,009 | 216,011 |
Share premium | 7,672,130 | 6,070,418 |
Translation reserve | (22,461) | (19,189) |
Share scheme reserve | 63,070 | 63,070 |
Retained earnings | (3,852,730) | (2,824,688) |
4,187,018 | 3,505,622 | |
Non-controlling interests | 5,729 | 16,029 |
TOTAL EQUITY | 4,192,747 | 3,521,651 |
LIABILITIES | ||
CURRENT LIABILITIES | ||
Trade and other payables | 143,236 | 364,346 |
TOTAL LIABILITIES | 143,236 | 364,346 |
TOTAL EQUITY AND LIABILITIES | 4,335,983 | 3,885,997 |
Consolidated statement of changes in equity
for the year ended 31 December 2013
Called up share capital £ | Profit and loss account £ | Share premium £ | Translation reserve | |
Balance at 1 January 2012 | 214,211 | (2,082,889) | 6,029,702 | (8,447) |
Issue of share capital | 1,800 | - | 40,716 | - |
Loss for the year | - | (741,799) | - | - |
Other comprehensive income | - | - | - | (10,742) |
Balance at 1 January 2013 | 216,011 | (2,824,688) | 6,070,418 | (19,189) |
Issue of share capital | 110,998 | - | 1,601,712 | - |
Loss for the year | - | (1,028,042) | - | - |
Other comprehensive income | - | - | - | (3,272) |
Balance at 31 December 2013 | 327,009 | (3,852,730) | 7,672,130 | (22,461) |
Share Scheme Reserve £ | Total £ | Non-controlling interests £ | Total Equity £ | |
Balance at 1 January 2012 | 63,070 | 4,215,647 | 16,029 | 4,231,676 |
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 |
Issue of share capital | - | 1,712,710 | - | 1,712,710 |
Loss for the year | - | (1,028,042) | (10,300) | (1,038,342) |
Other comprehensive income | - | (3,272) | - | (3,272) |
Balance at 31 December 2013 | 63,070 | 4,187,018 | 5,729 | 4,192,747 |
Consolidated statement of cash flows
for the year ended 31 December 2013
2013 £ | 2012 £ | |
Cash flows from operating activities | ||
Cash generated from operations | (1,007,580) | (446,246) |
Net cash from operating activities | (1,007,580) | (446,246) |
Cash flows from investing activities | ||
Purchase of intangible fixed assets | (272,169) | (1,100,872) |
Purchase of tangible fixed assets | - | (497) |
Cash acquired with subsidiary | 804,516 | - |
Interest received | 2,395 | 1,247 |
Net cash from investing activities | 534,742 | (1,100,122) |
Cash flows from financing activities | ||
Proceeds of share issue | 1,006,609 | 42,667 |
Cost of share issue | (94,393) | (151) |
Net cash from financing activities | 912,216 | 42,516 |
(Decrease)/Increase in cash and cash equivalents | 439,378 | (1,503,852) |
Effect of exchange rate changes on the balance of cash held in foreign currencies at the beginning of the financial year | (181) | (1,158) |
Cash and cash equivalents at beginning of year | 99,592 | 1,604,602 |
Cash and cash equivalents at end of year | 538,789 | 99,592 |
The financial information set out above does not constitute statutory accounts as defined in the Companies Act 2006.
The consolidated statement of financial position at 31 December 2013, the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Company'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 available for download on the Company's website at www.oraclecoalfields.com.
For further information:
Oracle Coalfields PLC +44 (0) 203 102 4807
Shahrukh Khan
Fortbridge Consulting +44 (0)7966 389196
Matt Beale/Bill Kemmery
Grant Thornton UK LLP +44 (0) 207 383 5100
Salmaan Khawaja/David Hignell/Jamie Barklem
Peterhouse Corporate Finance Limited +44 (0) 207 220 9791
Charles Goodfellow/Duncan Vasey