29 Mar 2012 07:00
Regency Mines PLC
("Regency" or the "Company")
Half-yearly report for the period ended 31 December 2011
29 March 2012
Regency Mines plc ("Regency" or the "Company") is a mineral exploration and development company and mining financier focused on exploring areas of copper and nickel potential in Western Australia, Queensland, and Papua New Guinea, announces its unaudited half-yearly results for the six months ended 31 December 2011.
Chairman's statement
In the next few weeks the Company expects to declare a maiden Mineral Resource at its Mambare nickel-cobalt project in Papua New Guinea, following a very successful drill programme which identified high grades, thick mineralised zones, and continuity of mineralisation. This will be the most significant milestone in the Company's short life, and the six month period for which we now report was the preparatory period in which the key exploration on this project was carried out.
The financial results do not tell this story; as Regency is an exploration company that may not be surprising. They do however track the changes in valuation of the two principal assets of the Company; its associate investment in Red Rock Resources plc ("Red Rock") and its investment in Oro Nickel Ltd (formerly Canopus No 83 Ltd)("Oro Nickel"), which owns the Mambare project.
The value of Investments in associates at 31 December 2011 showed a decrease to £3,517,654 from £8,473,996 at 31 December 2010. This reflected the attributable percentage of Red Rock's Total comprehensive income between these dates, which fell primarily because of a fall in the value of Red Rock's investment in Jupiter Mines Ltd in Australia (ASX:JMS) ("Jupiter"), whose share price fell from A$ 0.765 to A$ 0.27 over the year. Red Rock has stated that it expects these falls to be reversed as Jupiter moves towards production at its Tshipi mine.
Exploration assets over the same period increased from £2,439,012 to £4,143,683 as the costs of the drill programme carried out in the second half of the year were capitalised. Oro Nickel continued to be accounted for as a wholly owned subsidiary during the period.
As a result mainly of these two factors the Total Equity of the Company declined from £13,231,248 at the end of December 2010 to £11,440,645 at 31 December 2011.
Regency showed a loss before tax of £1,235,969 for the six months to 31 December 2011, which included a share in the loss of Red Rock.
Since the period end there has been a subsequent event of significance. On 26 January 2012 the formalities associated with the setting up of the joint venture between Regency and Direct Nickel Pty Ltd ("DNi") were completed, and Oro Nickel (Vanuatu) became the 50 per cent owned holding company for Regency's interest in Oro Nickel and in a licence to the DNi nickel treatment technology. We believe that this technology has the potential to transform the nickel market.
Besides the Mineral Resource to JORC standards we expect to be declared at Mambare shortly, we anticipate the completion of DNi's planned 2012 listing on the Australian Stock Exchange. As a substantial shareholder in DNi we look forward to this, both as increasing the liquidity of our asset base, and in enabling DNi to develop more rapidly.
Our Australian exploration will test a number of key targets this year, and we currently await the results of some promising drilling recently carried out at our sulphide discovery at Pyramid Lake in Western Australia.
I wrote four months ago in the Annual Report for the year to 30 June 2011 that "we expect to look back in a year's time and describe this year as one that was transformative in the history of the company". There is no reason for shading or amending that statement today. The transformation is well under way.
Andrew Bell
Executive Chairman
29 March 2012
Enquiries:
Andrew Bell | 0207 402 4580 or 07766 474849
| Regency Mines PLC | Chairman
|
Sandra Spencer | 0207 402 4580 or 07757 660 798
| Regency Mines PLC | Public and Investor Relations |
David Porter/Philip Davies
| 020 7444 0800 | Religare Capital Markets | Nominated Adviser |
Nick Emerson | 01483 413500 | Simple Investments Ltd | Broker |
Updates on the Company's activities are regularly posted on its website, www.regency-mines.com.
Consolidated statement of financial position
as at 31 December 2011
31 December 2011 | 31 December 2010 | 30 June 2011 | ||||
Unaudited £ | Unaudited £ | Audited £ | ||||
ASSETS | ||||||
Non current assets | ||||||
Property plant and equipment | 150,527 | 35,758 | 169,211 | |||
Investments in associates | 3,517,654 | 8,473,996 | 5,495,296 | |||
Goodwill | 56,460 | 47,961 | 54,034 | |||
Available for sale financial assets | 5,387,568 | 4,412,034 | 6,113,440 | |||
Exploration assets | 4,143,683 | 2,439,012 | 3,119,718 | |||
Total non current assets | 13,255,892 | 15,408,761 | 14,951,699 | |||
Current assets | ||||||
Cash and cash equivalents | 150,769 | 449,054 | 1,165,912 | |||
Trade and other receivables | 876,847 | 813,824 | 1,035,885 | |||
Total current assets | 1,027,616 | 1,262,878 | 2,201,797 | |||
TOTAL ASSETS | 14,283,508 | 16,671,639 | 17,153,496 | |||
EQUITY AND LIABILITIES | ||||||
Equity attributable to owners of the parent | ||||||
Called up share capital | 639,849 | 543,387 | 611,952 | |||
Share premium account | 11,671,181 | 8,069,862 | 11,248,428 | |||
Share based payment reserve | 172,744 | 174,915 | 172,744 | |||
Other reserves | (235,841) | 4,074,392 | 1,437,564 | |||
Retained earnings | (807,288) | 368,692 | 667,360 | |||
Total Equity | 11,440,645 | 13,231,248 | 14,138,048 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables | 1,002,062 | 208,622 | 826,269 | |||
Short term borrowings | 1,125,619 | 1,120,330 | 2,181,229 | |||
Total current liabilities | 2,127,681 | 1,328,952 | 3,007,498 | |||
Non current liabilities | ||||||
Long term borrowings | 707,532 | - | - | |||
Deferred tax liabilities | 7,650 | 2,111,439 | 7,950 | |||
Total non current liabilities | 715,182 | 2,111,439 | 7,950 | |||
TOTAL EQUITY AND LIABILITIES | 14,283,508 | 16,671,639 | 17,153,496 | |||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2011
Notes | 6 months to 31 December 2011 | 6 months to 31 December 2010 | ||
Unaudited £ | Unaudited £ | |||
Gain on dilution of interest in associate | 9,988 | 641,172 | ||
Impairment of available for sale investment | (104,753) | (25,755) | ||
Exploration expenses | (172,746) | (4,132) | ||
Administrative expenses | (288,832) | (230,318) | ||
Share of (losses)/profit of associates | (625,878) | 2,154,449 | ||
Finance costs (net) | (53,748) | (827) | ||
(Loss)/profit for the period before taxation | (1,235,969) | 2,534,589 | ||
Tax expense | (238,679) | (688,100) | ||
(Loss)/profit for the period attributable to owners of parent | (1,474,648) | 1,846,489 | ||
Earnings per share | ||||
(Loss)/earnings per share - basic | 3 | (0.24) pence | 0.39 pence | |
(Loss)/earnings per share - diluted | 3 | (0.24) pence | 0.37 pence |
All of the operations are considered to be continuing.
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2011
6 months to 31 December 2011 | 6 months to 31 December 2010 | |||
Unaudited £ | Unaudited £ | |||
(Loss)/profit for the period | (1,474,648) | 1,846,489 | ||
Revaluation of available for sale investments | (682,038) | 1,007,348 | ||
Deferred taxation on revaluation of available for sale investments | 93,598 | (271,984) | ||
Group's share of associates' other comprehensive (loss)/income | (1,361,752) | 4,264,279 | ||
Deferred tax on associates | 145,381 | (1,151,355) | ||
Unrealised foreign currency gain arising upon retranslation of foreign operations |
131,406 |
162,470 | ||
Total comprehensive (loss)/income for the period | (3,148,053) | 5,857,247 | ||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2011
The movements in equity during the period were as follows:
Share capital | Share premium account | Retained earnings | Share based payment reserve | Other reserves | Total equity | |
£ | £ | £ | £ | £ | £ | |
As at 30 June 2010 | 427,882 | 4,755,071 | (1,477,797) | 174,915 | 63,634 | 3,943,705 |
Changes in equity for 2010 | ||||||
Total comprehensive income for the period | - | - | 1,846,489 | - | 4,010,758 | 5,857,247 |
Transactions with owners | ||||||
Issue of shares | 115,505 | 3,376,616 | - | - | - | 3,492,121 |
Share issue and fundraising costs |
- |
(61,825) |
- |
- |
- |
(61,825) |
Total Transactions with owners | 115,505 | 3,314,791 | - | - | - | 3,430,296 |
As at 31 December 2010 | 543,387 | 8,069,862 | 368,692 | 174,915 | 4,074,392 | 13,231,248 |
As at 30 June 2011 | 611,952 | 11,248,428 | 667,360 | 172,744 | 1,437,564 | 14,138,048 |
Changes in equity for 2011 | ||||||
Total comprehensive loss for the period |
- |
- |
(1,474,648) |
- |
(1,673,405) |
(3,148,053) |
Transactions with owners | ||||||
Issue of shares | 27,897 | 472,753 | - | - | - | 500,650 |
Share issue and fundraising costs |
- |
(50,000) |
- |
- |
- |
(50,000) |
Total Transactions with owners | 27,897 | 422,753 | - | - | - | 450,650 |
As at 31 December 2011 | 639,849 | 11,671,181 | (807,288) | 172,744 | (235,841) | 11,440,645 |
Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Consolidation reserve | Total other reserves | |
£ | £ | £ | £ | £ | |
As at 30 June 2010 | (211,514) | (48,874) | 171,101 | 152,921 | 63,634 |
Changes in equity for 2010 | |||||
Total comprehensive income for the period | 735,364 | 3,112,924 | 162,470 | - | 4,010,758 |
As at 31 December 2010 | 523,850 | 3,064,050 | 333,571 | 152,921 | 4,074,392 |
As at 30 June 2011 | 360,740 | 416,355 | 507,548 | 152,921 | 1,437,564 |
Changes in equity for 2011 | |||||
Total comprehensive income/(loss) for the period |
(588,440) |
(1,216,371) |
131,406 |
- |
(1,673,405) |
As at 31 December 2011 | (227,700) | (800,016) | 638,954 | 152,921 | (235,841) |
Consolidated statement of cash flows
for the period ended 31 December 2011
6 months to 31 December 2011 | 6 months to 31 December 2010 | |||
Unaudited £ | Unaudited £ | |||
Cash flows from operating activities | ||||
(Loss)/Profit before taxation | (1,235,969) | 2,534,589 | ||
Decrease/(increase) in receivables | 159,038 | (510,036) | ||
Increase/(decrease) in payables | 175,793 | (132,831) | ||
Share of losses/(profit) in associates | 625,878 | (2,154,449) | ||
Interest receivable | (12,962) | (4) | ||
Interest payable | 30,351 | 831 | ||
Exploration expenses | - | 4,132 | ||
Impairment of exploration properties | 164,116 | - | ||
Currency adjustments | 35,167 | (14,555) | ||
Impairment of available for sale investment | 104,753 | 25,755 | ||
Gain on dilution of interest in associates | (9,988) | (641,172) | ||
Loss on disposal of fixed assets | 717 | - | ||
Depreciation | 16,223 | 6,859 | ||
Net cash flows from operations | 53,117 | (880,881) | ||
Cash flows from investing activities | ||||
Interest received | 12,962 | 4 | ||
Interest paid | (30,351) | (831) | ||
Payments to acquire available for sale investments | (60,919) | (3,017,857) | ||
Exploration payments | (1,022,776) | (218,715) | ||
Payments to acquire property plant and equipment | (11,395) | (14,120) | ||
Net cash flows from investing activities | (1,112,479) | (3,251,519) | ||
Cash flows from financing activities | ||||
Proceeds from issue of shares | 500,650 | 3,492,121 | ||
Transaction costs of issue of shares | (50,000) | (61,825) | ||
(Repayment)/proceeds of new borrowings | (406,431) | 1,120,330 | ||
Net cash flows from financing activities | 44,219 | 4,550,626 | ||
Net (decrease)/increase in cash and cash equivalents | (1,015,143) | 418,226 | ||
Cash and cash equivalents at the beginning of period | 1,165,912 | 30,828 | ||
Cash and cash equivalents at end of period | 150,769 | 449,054 | ||
Half-yearly report notes
for the period ended 31 December 2011
1 | Company and Group |
As at 30 June 2011 and 31 December 2011 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively. |
The Company will report again for the year ending 30 June 2012.
The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2011 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2011, upon which the auditors gave an unqualified audit report which did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies. |
2 | Accounting Polices |
Basis of preparation | |
The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting.' The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2011, which have been prepared in accordance with IFRS. |
3 | Earnings per share | 6 months to 31 December 2011 | 6 months to 31 December 2010 | |
£ | £ |
These have been calculated on (loss)/profit for the period after taxation of: |
(1,474,648) |
1,846,489 | ||
Weighted average number of Ordinary shares of £0.001 in issue | 616,769,746 | 475,087,544 | ||
(Loss)/earnings per share - basic | (0.24) pence | 0.39 pence | ||
Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options | 616,769,746 | 503,962,544 | ||
(Loss)/earnings per share fully diluted | (0.24) pence | 0.37 pence | ||
The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows: |
2011 | 2010 | |||
Number | Number | |||
Earnings per share denominator | 616,769,746 | 475,087,544 | ||
Weighted average number of exercisable share options | - | 28,875,000 | ||
Diluted earnings per share denominator | 616,769,746 | 503,962,544 |
Half-yearly report notes
for the period ended 31 December 2011, continued
4 | Segmental analysis |
Since the last annual financial statements the Group has not made any changes or additions to how it measures its segmental results. |
Investment in Red Rock Resources plc |
Other investments |
Australian exploration | Papua New Guinea exploration | Corporate and unallocated |
Total | ||
For the 6 month period to 31 December 2011 | £ | £ | £ | £ | £ | £ | |
Revenue | - | - | - | - | - | - | |
Result | |||||||
Segment results | (615,890) | (104,753) | (180,511) | (14,334) | (266,733) | (1,182,221) | |
Loss before tax and finance costs | (1,182,221) | ||||||
Interest receivable | 12,962 | ||||||
Interest payable | (30,351) | ||||||
Finance costs | (36,359) | ||||||
Loss before taxation | (1,235,969) | ||||||
Taxation expense | (238,679) | ||||||
Consolidated loss for the period | (1,474,648) | ||||||
Investment in Red Rock Resources plc |
Australian exploration | Corporate and unallocated |
Total | ||
For the 6 month period to 31 December 2010 | £ | £ | £ | £ | |
Revenue | - | - | - | - | |
Result | |||||
Segment results | 2,795,621 | (13,926) | (246,279) | 2,535,416 | |
Profit before tax and finance costs | 2,535,416 | ||||
Interest receivable | 4 | ||||
Interest payable | (831) | ||||
Profit before taxation | 2,534,589 | ||||
Taxation expense | (688,100) | ||||
Consolidated profit for the period | 1,846,489 |
A measure of total asset and liabilities for each segment is not readily available and so this information has not been presented. |
Half-yearly report notes
for the period ended 31 December 2011, continued
5 | Share Capital of the company |
The authorised share capital and the called up and fully paid amounts were as follows: |
Authorised | Number | Nominal £ | ||
At incorporation on 8 September 2004 and as at 31 December 2011, Ordinary shares of £0.001 each | 10,000,000,000 | 10,000,000 | ||
Called up, allotted and fully paid during the period | ||||
As at 30 June 2011 | 611,951,585 | 611,952 | ||
Issued 21 October 2011 at 1.96 pence per share | 10,249,550 | 10,250 | ||
Issued 22 December 2011 at 1.7 pence per share | 17,647,059 | 17,647 | ||
At 31 December 2011 | 639,848,194 | 639,849 | ||
6 | Capital Management |
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. |
7 Subsequent events
On 15 June 2011, the Company announced a Purchase and Sale Agreement with Oro Nickel (Vanuatu), ('ONV'), a wholly owned subsidiary of DNi, under which the Company would sell its wholly owned Papua New Guinea subsidiary, Canopus No 83 Limited, which has changed its name to Oro Nickel Limited. The consideration would be the allotment to the Company of such number of fully paid Ordinary shares as will, on completion, represent 50% of ONV's outstanding share capital. The transfer of the shares of Oro Nickel Limited was completed on 26 January 2012.