Last checked at 29 Sep 2011 07:00
Ovoca Gold PLC
29 September 2011
Ovoca Gold plc ("Ovoca" or the "Company")
2011 Interim Results
Ovoca Gold is pleased to announce its interim financial statements and report covering the six month period from 1 January 2011 to 30 June 2011.
Highlights:
·; Net income for 1H2011 of US$10.06 million
·; Cash and cash equivalents and available for sale financial assets of US$54.09 million as at 30 June 2011
·; Successful mobilization of exploration at two core projects
·; Appointment of Kenneth Kuchling as non-executive director - ex-Senior Mining Engineer for Rio Tinto's Diavik Diamond Mine between 1997 - 2000 and consultant to multiple high profile gold mines globally
·; Commencement of share buy back programme
·; Maiden Stakhanovsky resource, JORC Inferred 350,000 oz gold at 1.2 g/t (cut-off grade 0.5 g/t gold)
·; GLG Asset Management to manage $10mn of Company's funds
Post period:
·; Updated JORC Inferred resource for Olcha of 9.2mn tons to give 650,000 ounces gold at 2.20 g/t and 3.59mn ounces silver at 12.12 g/t (cut-off grade 1.0 g/t gold)
·; Appointment of Fairfax I.S. PLC as joint broker
·; Continuation of share buy back programme, total share count held in treasury at 1,095,000
CEO's letter
Dear shareholders,
It is my pleasure to report to you our financials and the results of our work for the first half of 2011. We started the year with several tasks. On the exploration front we planned to drill on new targets Podgorniy and Zet, conduct geophysical surveys on Olcha's northeast and southeast flanks, and complete a bulk sampling and drilling program on Stakhanovsky. On the corporate level our plan for the year is to successfully receive a full exploitation license for Olcha, effectively manage our cash and equivalents position to ensure the Company's financial strength, strengthen our board and staff of professionals, review acquisitions and corporate development opportunities and continue to reach out to a wider investor audience about Ovoca's undervalued share price.
Exploration:
Podgorniy - At the end of 2010 Ovoca announced grab sample results as part of a preliminary exploration effort that included soil geochemistry and mapping. Announced grab samples were:
Sample number | Gold grade, g/t | Silver grade, g/t |
#49 | 5 | 15 |
#52 | 21 | 68 |
#53 | 12 | 64 |
In 2011 Ovoca plans to complete a drilling programme of 5,000 meters, of which 4,000 meters is already completed. Core samples indicate potentially gold bearing mineralization and we await laboratory analysis. The majority of core samples is now at our base in Magadan or has been prepared and sent to a laboratory.
Zet - At the beginning of 2011 Ovoca announced the results of historical and 2010 trenching work. Zet is 30 kilometers north of Olcha and initial study of the target shows it is a low-sulphidation gold-silver epithermal ore zone similar to Olcha. Ovoca will be drilling on Zet for the first time and the total plan for 2011 was 2,000 meters, of which a total of 2,500 meters has been drilled and the season ended on Zet (additional 500 meters drilled above plan). The focus of the drilling is to establish that surface mineralization (as shown by trench work) extends to depth. There are several examples in and near the Magadan Region of operating gold mines transporting ore up to 100 kilometer distances. One such example is Birkachan-Kubaka-Sopka Kvartsevaya operated by Polymetal, while another example is Dvoynoye-Kupol operated by Kinross. While gold and silver grades are a key issue determining the economic viability of transporting ore, Zet and Olcha could be part of one production complex given their near proximity.
Previously announced trench results
Trench ID number | Target | Length, m | True thickness, m | Gold grade, g/t | Silver grade, g/t |
K-8-Z* | Vein #1 | 3.8 | 3.71 | 2.0 | 12.5 |
K1-Z* | Vein #1 | 1.5 | 1.41 | 0.7 | 5.5 |
K-8 | Vein #1 | 2.5 | 2.41 | 3.2 | 17.2 |
K-BK-5 | Vein #1 | 0.4 | 0.38 | 4.7 | 0.0 |
K-BK-2 | Vein #1 | 1.0 | 1.00 | 3.4 | 33.5 |
K-2 | Vein #1 | 1.9 | 1.84 | 2.7 | 14.2 |
K-BK-7 | Vein #1 | 0.7 | 0.70 | 1.9 | 0.0 |
K-BK-5 | Vein #2 | 1.0 | 0.95 | 6.2 | 8.2 |
TR-1 | Vein #2 | 3.0 | 2.90 | 2.6 | 17.0 |
K-BK-7 | Vein #2 | 0.5 | 0.47 | 20.6 | 14.0 |
SP-2 | Vein #2 | 4.0 | 3.88 | 10.5 | 60.5 |
K-1-Z* | Vein #3 | 0.6 | 0.59 | 6.6 | 80.6 |
K-BK-14 | Vein #3 | 0.7 | 0.69 | 4.0 | 12.0 |
K-BK-5 | Vein #3 | 0.1 | 0.10 | 2.0 | 0.0 |
K-2-Z* | Vein #3 | 1.0 | 0.75 | 8.0 | 10.8 |
K-BK-7 | Vein Zone #6 | 1.2 | 1.20 | 3.7 | 3.4 |
K-6-Z* | Vein Zone #6 | 3.7 | 3.52 | 4.1 | 29.9 |
K-BK-9 | Vein Zone #6 | 3.0 | 2.99 | 1.6 | 15.0 |
K-BK-11 | Vein #8 | 3.9 | 3.77 | 12.5 | 22.4 |
*Denotes trenches completed by Ovoca Gold in 2010
Olcha - Olcha was a core focus of Ovoca's exploration program in 2010, as we strived to move forward on the basis of existing information to increase the resources at the site. An updated JORC inferred resource statement was released in July 2011. Additionally, Ovoca has put together a Russian-compliant resource statement, as well as preliminary economic, environmental and metallurgical studies. This documentation has been filed with the necessary regulatory bodies so that Ovoca can receive a full exploitation license for Olcha. The Company expects to have an exploitation license by the end of 2011 or in early 2012. For 2011 Ovoca plans to conduct geophysical work to the northeast and the east of known mineralization zones. Ovoca announced its updated JORC compliant Inferred resource on Olcha in July. Chart below:
Cut-off grade, Au | Tons, Mt | Au grade, g/t | Au oz | Ag grade, g/t | Ag oz |
0.5 g/t | 20.1 | 1.39 | 900,000 | 9.32 | 6,050,000 |
1.0 g/t | 9.2 | 2.20 | 653,000 | 12.12 | 3,590,000 |
1.5 g/t | 5.2 | 2.97 | 496,000 | 14.64 | 2,440,000 |
2.0 g/t | 3.3 | 3.64 | 395,000 | 16.82 | 1,820,000 |
Stakhanovsky - At the beginning of 2011 Ovoca announced its maiden JORC compliant Inferred resource on Stakhanovsky. Chart below:
Million tonnes | Grade (g/t) | Gold (t) | Gold oz |
9.1 | 1.2 | 10.9 | 350,000 |
*Cut-off grade 0.5 g/t gold
In 2010 the Company commissioned a wide-diameter drill programme (RC rig drilling 18cm diameter drill wells), but the contractor did not complete the full work programme (completed was slightly over 50% or 7,100 meters). At the end of 2010 the Company decided to change contractors or shift the focus of the exploration effort to bulk sampling. Bulk sampling done in 2009 yielded encouraging results of 1.9 g/t and 2.0 g/t on two targets with total sample size being 260 tons. Ovoca chose for 2011 to conduct a bulk sampling programme with some drilling to confirm ore body structure (DD rig drilling 7cm diameter drill wells). The initial plan was to process 20,000 tons of ore samples over the 2011 summer and autumn. Unfortunately, a delay in the delivery of the metal frame that houses the conveyor belts and ball mill cost three weeks of the operating season. Despite intense efforts to expedite the assembly process to make up the lost time, the bulk sample processing facility was not ready until late into the operating season. To complicate matters further, this summer has been unusually cold in the Magadan Region, which has frozen up water supplies necessary for the operating of the facility. However, approximately 8,000 tons of ore samples have already been collected, labeled and await processing. The facility has been test-run so that once there is running water again it can be switched on for operation. The Company will be able to immediately start processing ore by the first thaw in the Stakhanovsky area, which normally is at the beginning of May. The result of this delay is a push out of anticipated first gold production to the beginning of 2014 (pending successful exploration and engineering results).
Corporate overview:
Available for sale securities and cash - As at 30 June 2011 Ovoca had circa 0.8 million Polymetal common shares worth US$15.35 million. Additionally, the Company had approximately US$28.74 million in cash and US$10.01 million in a diversified portfolio of gold mining equities. In total, the pro forma total cash and securities position of Ovoca as of 30 June 2011 is US$54.09 million. Ovoca's management and Board have decided to change the format of its equity portfolio investment. Part of the investment will now be made in a GLG fund. GLG is one of the world's largest fund management companies with over $70bn under management and are based in London. The liquidity provisions of the fund are substantially the same as our previous portfolio, while GLG brings to our investment their superior monitoring, brokerage service terms and risk management skills. In July the Company put US$10 million under GLG management. The strategy behind Ovoca's holding of Polymetal shares and the GLG fund investment is to give Ovoca shareholders exposure to the gold price before Ovoca has its own gold production.
Joint Broker appointment - On 5 July 2011 Ovoca appointed Fairfax I.S. PLC as joint broker to the Company with immediate effect. Davy continues to act as nominated adviser and joint broker for Ovoca. Fairfax is a well-established and very reputable broker and investment bank to the junior mining sector in London.
Director appointment - On 1 March 2011 Ken Kuchling became a non-executive director of the Company. Mr. Kuchling provides mining consulting services with multiple clients globally. He has worked on such projects as Northgate Mining's Kemess North copper-gold mine in Canada, NovaGold's Rock Creek project in Canada, Oromin Explorations' Sabodala gold project in Senegal, as well as having assisted with BHP Billiton's study of potash projects globally. Additionally, from 1997 to 2000 Mr. Kuchling was the Senior Mining Engineer for Rio Tinto's Diavik Diamond Mine in Canada playing a key role in completing the feasibility study and permitting of the project.
Sincerely,
Tim McCutcheon
CEO
Ovoca Gold plc | ||||||||
period ended 30 June 2011 | ||||||||
CONSOLIDATED INCOME STATEMENT | Unaudited | Unaudited | Unaudited | Unaudited | ||||
6 Months ended | 6 Months ended | 6 Months ended | 6 Months ended | |||||
30.06.2011 | 30.06.2010 | 30.06.2011 | 30.06.2010 | |||||
€'000 | €'000 | $'000 | $'000 | |||||
Continuing operations | ||||||||
Exploration costs written off | (166) | (299) | (233) | (398) | ||||
Gross loss | (166) | (299) | (233) | (398) | ||||
Administration expenses | 380 | (1 028) | 533 | (1 368) | ||||
Share option expense | (44) | (733) | (62) | (975) | ||||
Other gains and losses | 7 379 | 2 355 | 10 353 | 3 133 | ||||
Operating profit | 7 549 | 295 | 10 591 | 392 | ||||
Finance costs | (645) | (16) | (905) | (21) | ||||
Finance income | 354 | 647 | 496 | 861 | ||||
Gain for the period before tax | 7 258 | 926 | 10 182 | 1 232 | ||||
Income tax | (88) | 6 | (123) | 8 | ||||
Gain for the period from continuing operations | 7 170 | 932 | 10 059 | 1 240 | ||||
Discontinued operations | ||||||||
Loss for the period from discontinued operations | (2 103) | (2 798) | ||||||
Profit/(loss) for the period | 7 170 | (1 171) | 10 059 | (1 558) | ||||
Attributable to: | ||||||||
Owners of the parent | 7 170 | (1 171) | 10 059 | (1 558) | ||||
7 170 | (1 171) | 10 059 | (1 558) | |||||
Earnings/(loss) per share | ||||||||
Basic earnings per share from continuing operations | 0.08 cents | 0.20 cents | 0.12 cents | 0.26 cents | ||||
Basic loss per share from discontinued operations | (0.45) cents | (0.59) cents | ||||||
Fully diluted earnings per share from continuing operations | 0.08 cents | 0.21 cents | 0.11 cents | 0.27 cents | ||||
Fully diluted loss per share from discontinued operations | (0.47) cents | (0.62) cents | ||||||
Ovoca Gold plc | ||||||||
period ended 30 June 2011 | ||||||||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| ||||||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||
6 Months ended | 6 Months ended | 6 Months ended | 6 Months ended | |||||
30.06.2011 | 30.06.2010 | 30.06.2011 | 30.06.2010 | |||||
€'000 | €'000 | $'000 | $'000 | |||||
Profit/(loss) for the period | 7 170 | (1 171) | 10 059 | (1 558) | ||||
Other comprehensive (expense)/income: | ||||||||
Movement on available for sale financial assets | (8 600) | 4 654 | (10 516) | 4 538 | ||||
Exchange movement | (2 784) | 6 870 | (1 402) | 357 | ||||
Total comprehensive (loss)/income for the period | (4 214) | 10 353 | (1 859) | 3 337 | ||||
There is no income tax impact in respect of components recognised within the consolidated statement of comprehensive income. | ||||||||
Ovoca Gold plc | ||||||||
period ended 30 June 2011 | ||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||||
Share capital | Share premium | Treasury shares | Share based payment reserve | Other reserves | Exchange movement | Retained earnings | Total (attributable to owners of the parent) | |
€'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
At 1 January 2011 | 11 057 | 48 108 | - | 1 253 | 16 729 | 2 494 | (22 893) | 56 748 |
Comprehensive income: | ||||||||
Loss for the period | 7 170 | 7 170 | ||||||
Other comprehensive income | - | |||||||
Fair value movement on available for sale financial assets | (8 600) | (8 600) | ||||||
Realised exchange movement on available for sale assets disposed of during the year | (971) | (971) | ||||||
Exchange movement | (1 813) | (1 813) | ||||||
Total comprehensive income | - | - | - | - | (8 600) | (2 784) | 7 170 | (4 214) |
Transactions with owners | ||||||||
Reduction of share premium | (48 108) | 48 108 | - | |||||
Share based payments | 44 | 44 | ||||||
Share buy back | (20) | 15 | (40) | (45) | ||||
Total transactions with owners | - | (48 108) | (20) | 44 | - | 15 | 48 068 | (1) |
At 30 June 2011 | 11 057 | - | (20) | 1 297 | 8 129 | (275) | 32 345 | 52 533 |
At 1 January 2010 | 11 057 | 48 108 | - | 520 | 6 553 | (364) | (19 453) | 46 421 |
Comprehensive income: | ||||||||
Loss for the period | - | - | - | - | - | - | (1 171) | (1 171) |
Other comprehensive income | ||||||||
Fair value gain on available for sale financial assets | - | - | - | - | 4 654 | - | - | 4 654 |
Realised exchange movement on available for sale assets disposed of during the year - - - - - - | - | - | ||||||
Exchange movement | 6 870 | 6 870 | ||||||
Total comprehensive income | - | - | - | - | 4 654 | 6 870 | (1 171) | 10 353 |
Transactions with owners | ||||||||
Share based payments | 733 | 733 | ||||||
Total transactions with owners | 733 | 733 | ||||||
At 30 June 2010 | 11 057 | 48 108 | - | 1 253 | 11 207 | 6 506 | (20 624) | 57 507 |
Ovoca Gold plc | ||||||||
period ended 30 June 2011 | ||||||||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||||
Unaudited | Audited | Unaudited | Audited | |||||
30.06.2011 | 31.12.2010 | 30.06.2011 | 31.12.2010 | |||||
€'000 | €'000 | $'000 | $'000 | |||||
Assets | ||||||||
Current assets | ||||||||
Inventories | 129 | 35 | 186 | 46 | ||||
Trade and other receivables | 1 384 | 4 918 | 1 992 | 6 517 | ||||
Cash and cash equivalents | 19 973 | 8 394 | 28 740 | 11 123 | ||||
21 486 | 13 347 | 30 919 | 17 686 | |||||
Non current assets | ||||||||
Property, plant and equipment | 1 433 | 750 | 2 062 | 1 024 | ||||
Intangible assets | 24 751 | 23 413 | 35 616 | 33 252 | ||||
Available for sale financial assets | 17 616 | 32 473 | 25 349 | 43 029 | ||||
43 800 | 56 636 | 63 027 | 77 305 | |||||
Total assets | 65 286 | 69 983 | 93 946 | 94 991 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Trade and other payables | 1 032 | 1 153 | 1 485 | 1 528 | ||||
Provisions for other liabilities and charges | 8 697 | 2 092 | 12 515 | 2 771 | ||||
9 729 | 3 245 | 14 000 | 4 299 | |||||
Non current liabilities | ||||||||
Contingent provisions | 3 024 | 9 990 | 4 351 | 13 239 | ||||
Total liabilities | 12 753 | 13 235 | 18 351 | 17 538 | ||||
Net assets | 52 533 | 56 748 | 75 595 | 77 453 | ||||
Equity | ||||||||
Ordinary shares | 11 057 | 11 057 | 15 586 | 15 586 | ||||
Share premium accounts | 48 108 | 67 809 | ||||||
Treasury shares | (20) | - | (29) | - | ||||
Other reserves | 8 129 | 16 729 | 11 698 | 22 214 | ||||
Foreign currency translation reserve | (275) | 2 494 | (70) | 3 402 | ||||
Share based payment reserve | 1 297 | 1 253 | 1 866 | 1 706 | ||||
Profit and loss account | 32 345 | (22 893) | 46 543 | (33 264) | ||||
52 533 | 56 748 | 75 594 | 77 453 | |||||
Ovoca Gold plc | |||||||||||||||||
period ended 30 June 2011 | |||||||||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||
Unaudited | Audited | Unaudited | Audited | ||||||||||||||
30.06.2011 | 31.12.2010 | 30.06.2011 | 31.12.2010 | ||||||||||||||
€'000 | €'000 | $'000 | $'000 | ||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net profit for the period/year before tax | 7 258 | 936 | 10 182 | 1 254 | |||||||||||||
Foreign currency reserve movement | (2 767) | 2 858 | (3 263) | 1 909 | |||||||||||||
Depreciation | 43 | 116 | 60 | 154 | |||||||||||||
Share option expense | 44 | 733 | 62 | 973 | |||||||||||||
Net finance costs | 304 | (170) | 427 | (232) | |||||||||||||
Exploration costs written off | 166 | 297 | 233 | 394 | |||||||||||||
Increase in inventories | (94) | (28) | (135) | (36) | |||||||||||||
Decrease/(increase) in trade and other receivables | 3 534 | (921) | 5 085 | (789) | |||||||||||||
Decrease in trade and other payables | (121) | (686) | (175) | (1 108) | |||||||||||||
Decrease in provisions | (361) | - | (519) | - | |||||||||||||
Net cash flow from continuing operations | 8 005 | 3 135 | 11 956 | 2 519 | |||||||||||||
Discontinued Operations | |||||||||||||||||
Net loss for the year before tax | - | (4 376) | - | (5 811) | |||||||||||||
Exploration costs written off | - | 3 779 | - | 5 377 | |||||||||||||
Net finance costs | - | (89) | - | (112) | |||||||||||||
Net cash flow from discontinued operations | - | (686) | - | (546) | |||||||||||||
Net cash flow from operating activities | 8 005 | 2 449 | 11 956 | 1 973 | |||||||||||||
Cash flow from financing activities | |||||||||||||||||
Net interest received | 304 | 259 | 437 | 344 | |||||||||||||
Net cash flow from financing activities | 304 | 259 | 437 | 344 | |||||||||||||
Cash flows from investing activities | |||||||||||||||||
Net purchases of property, plant & equipment | (683) | (67) | (982) | (57) | |||||||||||||
Acquisitions of subsidiary/intangibles | - | (7 264) | - | (11 882) | |||||||||||||
Purchase of available for sale assets | (14 857) | - | (20 860) | - | |||||||||||||
Proceeds from disposal of AFS assets | 20 314 | (1 616) | 29 232 | (768) | |||||||||||||
Expenditure on exploration activities | (1 504) | (5 121) | (2 165) | (6 800) | |||||||||||||
Net cash flow from investing activities | 3 270 | (14 068) | 5 225 | (19 507) | |||||||||||||
Net increase/(decrease) in cash and cash equivalents | 11 579 | (11 360) | 17 618 | (17 190) | |||||||||||||
Cash and cash equivalents at the beginning of period/year | 8 394 | 19 754 | 11 123 | 28 313 | |||||||||||||
Cash and cash equivalents at the end of period/year | 19 973 | 8 394 | 28 741 | 11 123 | |||||||||||||
Ovoca Gold plc | |||||||||||||||||
period ended 30 June 2011 | |||||||||||||||||
1 | Basis of Preparation | ||||||||||||||||
The interim consolidated financial statements for the six months ended 30 June 2011 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board. | |||||||||||||||||
The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 December 2010 | |||||||||||||||||
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2010 | |||||||||||||||||
2 | Accounting Policies | ||||||||||||||||
The accounting policies are consistent with those in the annual report for the financial year ended 31 December 2010. | |||||||||||||||||
The following new standards, amendments and interpretations became effective in 2011, however, they either do not have an effect on the Group financial statements or they are not currently relevant for the Group: | |||||||||||||||||
Classification of Rights Issues (Amendment to IAS 32) | |||||||||||||||||
IAS 24, Related Party Disclosure (Revised) | |||||||||||||||||
Amendments to IFRIC 14, Prepayments of a Minimum Funding Requirement | |||||||||||||||||
IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments | |||||||||||||||||
In addition, a number of annual improvements to the IFRSs are effective for 2011, however, none of these had or is expected to have a material effect on the Group financial statements. | |||||||||||||||||
3 | Segmental reporting | ||||||||||||||||
Segment information is presented in accordance with IFRS 8 - Operating Segments with effect from 1 January 2010. Comparative information is presented on a consistent basis. | |||||||||||||||||
At 30 June 2011, the Group had two business segments, exploration activities and investment. Exploration activities are primarily carried out by number of subsidiary companies based in Russia. Investing activities are carried out by another subsidiary company located in Bermuda. Unallocated costs represent group administration costs, primarily incurred in Ireland. | |||||||||||||||||
Period ended 30 June 2011 | Exploration activities | Investment | Unallocated | Total | Exploration activities | Investment | Unallocated | Total | |||||||||
€'000 | €'000 | €'000 | €'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||||||||||
Exploration costs written off | (98) | - | (68) | (166) | (137) | - | (95) | (232) | |||||||||
Administration expenses | 267 | 2 146 | (2 077) | 336 | 375 | 3 010 | (2 914) | 471 | |||||||||
Other gains and losses | 121 | 7 259 | (1) | 7 379 | 170 | 10 185 | (1) | 10 354 | |||||||||
Operating profit | 290 | 9 405 | (2 146) | 7 549 | 407 | 13 195 | (3 011) | 10 591 | |||||||||
Finance costs | (94) | (598) | 47 | (645) | (132) | (839) | 66 | (905) | |||||||||
Finance income | 161 | 192 | 1 | 354 | 226 | 269 | 1 | 496 | |||||||||
Loss/Profit before tax | 357 | 8 999 | (2 098) | 7 258 | 501 | 12 625 | (2 943) | 10 183 | |||||||||
Segment assets | 16 148 | 49 004 | 136 | 65 288 | 23 236 | 70 514 | 196 | 93 946 | |||||||||
Segment liabilities | (763) | (11 721) | (269) | (12 753) | (1 098) | (16 866) | (387) | (18 351) | |||||||||
Net assets | 15 385 | 37 283 | (134) | 52 535 | 22 138 | 53 648 | (192) | 75 595 | |||||||||
Period ended 30 June 2010 | Exploration activities | Investment | Unallocated | Total | Exploration activities | Investment | Unallocated | Total | |
€'000 | €'000 | €'000 | €'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||
Revenue | - | - | - | - | - | - | - | - | |
Other gains and losses | (277) | 2 021 | 611 | 2 355 | (369) | 2 689 | 813 | 3 133 | |
Operating profit | (3 960) | 1 850 | 2 405 | 295 | (531) | 2 461 | (540) | 1 390 | |
Finance costs | (16) | - | - | (16) | (21) | - | - | (21) | |
Finance income | 454 | - | 193 | 647 | 604 | - | 257 | 861 | |
Loss/Profit before tax | (3 522) | 1 850 | 2 598 | 926 | 52 | 2 461 | (283) | 2 230 | |
Segment assets | 11 882 | 46 167 | 5 677 | 63 726 | 14 502 | 56 346 | 6 929 | 77 777 | |
Segment liabilities | (1 224) | (4 560) | (435) | (6 219) | (1 494) | (5 565) | (531) | (7 590) | |
Net assets | 10 658 | 41 607 | 5 242 | 57 507 | 13 008 | 50 781 | 6 398 | 70 187 | |
CONTINUING OPERATONS | |||||||||
Year ended 31 December 2010 | Exploration activities | Investment | Unallocated | Total | Exploration activities | Investment | Unallocated | Total | |
€'000 | €'000 | €'000 | €'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||
Exploration costs written off | (297) | - | - | (297) | (394) | - | - | (394) | |
Administration expenses | (11) | (1 870) | (1 480) | (3 361) | (14) | (2 483) | (1 966) | (4 463) | |
Other gains and losses | (60) | 4 682 | 231 | 4 853 | (80) | 6 228 | 307 | 6 455 | |
Operating profit | (368) | 2 812 | (1 249) | 1 195 | (488) | 3 745 | (1 659) | 1 598 | |
Finance costs | (118) | (974) | (11) | (1 103) | (157) | (1 293) | (15) | (1 465) | |
Finance income | 22 | 700 | 122 | 844 | 29 | 929 | 163 | 1 121 | |
Loss/Profit before tax | (464) | 2 538 | (1 138) | 936 | (616) | 3 381 | (1 511) | 1 254 | |
Income tax | - | - | - | - | - | - | - | - | |
Loss/Profit after tax | (464) | 2 538 | (1 138) | 936 | (616) | 3 381 | (1 511) | 1 254 | |
Segment assets | 11 212 | 58 361 | 410 | 69 983 | 15 219 | 79 216 | 556 | 94 991 | |
Segment liabilities | (795) | (12 094) | (346) | (13 235) | (1 053) | (16 026) | (459) | (17 538) | |
Net assets | 10 417 | 46 267 | 64 | 56 748 | 14 166 | 63 190 | 97 | 77 453 | |
DISCONTINUED OPERATIONS | |||||||||
Year ended 31 December 2010 | Exploration activities | Investment | Unallocated | Total | Exploration activities | Investment | Unallocated | Total | |
€'000 | €'000 | €'000 | €'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||
Administration expenses | (40) | - | - | (40) | (53) | - | - | (53) | |
Other gains and losses | (434) | - | - | (434) | (576) | - | - | (576) | |
Operating Loss | (474) | - | - | (474) | (629) | - | - | (629) | |
Loss on disposal of operations | (3 813) | - | - | (3 813) | (5 064) | - | - | (5 064) | |
Finance costs | (89) | - | - | (89) | (118) | - | - | (118) | |
Loss before tax | (4 376) | - | - | (4 376) | (5 811) | - | - | (5 811) | |
Income tax | - | - | - | - | - | - | - | - | |
Loss/Profit after tax | (4 376) | - | - | (4 376) | (5 811) | - | - | (5 811) | |
Segment assets | - | - | - | - | - | - | - | - | |
Segment liabilities | - | - | - | - | - | - | - | - | |
Net assets | - | - | - | - | - | - | - | - | |
Secondary reporting format - geographical segments | |||||||||
The Group's business segments and its assets are located in the Russia, Bermuda, and Ireland. The table above shows income and expenditure and assets and liabilities by primary geographical segments on the basis that exploration activities are carried out in Russia, investment activity is carried out in Bermuda and unallocated amounts relate to costs incurred in Ireland. | |||||||||
4 | Financial assets available for sale | ||||||||
Financial assets available for sale are held at their fair value and consist of both quoted securities and shares in Polymetal listed on the Russian Stock Exchange. They have provided a steady income stream throughout the period. There was a fall in the price of Polymetal shares during the period but their overall performance remains strong, the decrease of the total value of the financial assets being caused by both the disposal of shares for cash and re-investment of a significant portion from quoted securities into a high yield deposit facility. The latter is reflected in the increased cash and cash equivalents balance. | |||||||||
5 | Provisions | ||||||||
The change in the provisions is due to the timing of the deferred consideration payable on the previous year's acquisition of the 3 Russian subsidiaries, with the bulk of the conditional payment now falling due within the next 12 months. | |||||||||
6 | Transactions in own shares | ||||||||
By the end of the period the group had acquired 160,000 of its own shares through purchases on the London Stock Exchange. The total amount paid to acquire the shares net of commissions was €59,674 ($85,619). At the start of the period Ovoca Gold Plc obtained High Court permission to reduce its share premium account to facilitate the share buy back process. The shares are held as treasury shares and the company has the right to re-issue these shares at a later date. | |||||||||
7 | Events after the reporting period | ||||||||
There have been no significant events affecting the Group since the interim period. | |||||||||
8 | Approval of the financial statements | ||||||||
The interim report was approved by the Board of Directors on September 27, 2011 and is included on the Company's website, www.ovocagold.com. | |||||||||
Notes to Editors
Ovoca Gold PLC ("Ovoca" or "the Company") is a mineral exploration and mine development company listed on the AIM market of the London Stock Exchange (Ticker: OVG) and on the ESM market of the Irish Stock Exchange (Ticker: OVX). The Company's principal activity is gold exploration in the Magadan Region of the Russian Federation. Previously Ovoca acquired, developed and sold to JSC Polymetal the Goltsovoye silver project located in the Magadan Region. Currently, Ovoca is aggressively exploring and developing its 100 per cent owned Stakhanovsky, Rassoshinskaya and Nevsko-Pestrinskoye licenses.
Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city in the Magadan region. It is accessible by year-round road and there is power infrastructure on site. Stakhanovsky's initial independently established resource was announced in an RNS on 2 February 2011 and is available on the Company's website. The Company intends to put Stakhanovsky into production by 2013.
Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Seimchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource. Olcha's latest independently established resource was announced in an RNS on 07 July 2010 and is available on the Company's website. Rassoshinskaya also hosts several gold targets, including Podgorniy and Zet.
Nevsko-Pestrinskoye is located in the central part of the Magadan region near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the Company from 2006 - 2009 and sold to JSC Polymetal for US$47.7 million at the time of closing. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko- Pestrinskoye.
Ovoca Gold Plc
Timothy McCutcheon +7 495 916 6029 tim.mccutcheon@ovocagold.com
Davy - NOMAD and joint broker
John Frain +353 1 679 6363
Fairfax I.S. PLC - joint broker
Ewan Leggat/Laura Littley +44 207 598 5368