30 Mar 2011 14:30
Regency Mines PLC
("Regency" or the "Company")
Half-yearly report for the period ended 31 December 2010
30 March 2011 |
| |
Regency Mines plc ("Regency" or the "Company") the mineral exploration and mineral investment company with interests in nickel and other minerals in Western Australia, Queensland, Papua New Guinea and Pakistan, announces its unaudited half-yearly results for the six months ended 31 December 2010. |
Key Points:
·; Profit before taxation £2.535m (2009: £0.388m)
·; Total comprehensive income £5.857m (2009: £0.649m)
·; Total equity £13.231m (2009: £4.063m)
·; Earnings per share - basic 0.39 pence (2009: 0.10 pence)
·; Earnings per shares - diluted 0.37 pence (2009: 0.10 pence)
·; Significant contributions to profit (£2.154m) and comprehensive income (£4.264m) from 20.1% associate Red Rock Resources plc
·; Strategic investment in Oracle Coalfields PLC
·; Significant step-up in joint venture with Direct Nickel Ltd. with drill programme at the joint venture's Mambare copper/cobalt project in Papua New Guinea expected in 2Q2011
Chairman Andrew Bell commented: "The next twelve months are likely to be a transformative and stimulating period for the Company, with significant developments on several fronts".
A copy of the half-yearly report is being posted to shareholders and will be available shortly from the Company's website at www.regency-mines.com.
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 |
Peter Trevelyan-Clark/ Ben Jeynes
| 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.
Chairman's statement |
Dear Shareholders,
The interim group pretax profit of £2,534,589 (2010 interim profit £388,164) included £2,154,449 share of profits in associates, reflecting associate profits from Red Rock Resources plc ("Red Rock").
Comprehensive income for the period was £5,857,247 (2009 £649,379) and included a share in the comprehensive income of its 20.1% associate Red Rock and a £1,007,348 surplus on revaluation of available for sale investments (2010 £96,369), partly due to a rise in value of the Company's recently acquired strategic holding in Oracle Coalfields PLC ("Oracle").
Shareholders' equity increased by 225.6% year on year to £13,231,248 (2009 £4,063,284) and by 235.5% since 30th June 2010. This is substantially due to the increase in the value of investments in associates and in available for sale financial assets.
Two key developments occurred in November 2010, both facilitated by the rise in the Company's share price over the period which enabled the Company to raise £3,492,121 gross by the issue of new Regency shares, at an average issue price of 3.02p a share.
In the first development, Regency invested £1,017,500 in a new issue of 18,500,000 shares by Oracle, or approximately 10.04% of Oracle's issued share capital, which carried with it the right to take the Company's shareholding to 20% at the time of Oracle's anticipated admission to trading on AIM. Purchases since have raised the holding to 11.26% of Oracle's issued capital. The issue was at 5.5p per share, and the Oracle price traded on PLUS Markets has climbed steadily since and now stands at 10.125p. Oracle has recently announced that it expects its admission to trading on AIM to occur in April 2011. This investment was financed by a US$2,000,000 loan repayable in tranches up to 26 November 2011 arranged by Yorkville Advisors UK LLP.
In a second development, the Company announced a significant step in its joint venture with nickel technology developer Direct Nickel Ltd ("DNi"). Regency agreed to invest AUD 6,000,000 to acquire 1,039,860 new shares in DNi in two equal tranches, making it with approximately 7.31% the largest shareholder after the founders. The second half of this investment completed in early 2011.
At the same time Regency and DNi agreed to fund jointly the next £2,000,000 phase in the drill exploration of the joint venture's Mambare copper/cobalt project in Papua New Guinea. A joint operating committee was set up and a 4,000m drill programme is expected to start at end-April or early May with the two objectives of proving up a Mineral Resource to JORC standard on the southern flanks of the plateau and establishing the extent of mineralisation potential on top of the plateau.
DNi itself, following a successful demonstration of the reagent recycling component of its nickel ore treatment technology in Charlotte, North Carolina in October 2010, is building a demonstration plant in Perth, Western Australia to pilot the technology later this year, and plans a stock market listing.
The Company expects the coming period to see further progress at Mambare and in the DNi relationship, and admission of Oracle to trading on AIM followed by completion of the bankable feasibility study on Oracle's Thar coal project.
In Australia, Regency expects to conduct airborne geophysics at the historic copper-gold Bundarra mining camp in Queensland, all of which is held and where two promising copper targets may be tested by drilling later in the year. Further exploration of the high grade sulphide occurrence encountered by aircore drilling at Munglinup, WA will also be undertaken, to delineate the discovery and test for base metal mineralisation.
The next twelve months are likely to be a transformative and stimulating period for the Company, with significant developments on several fronts.
Andrew Bell
Chairman
30 March 2011
Consolidated statement of income
for the period ended 31 December 2010
Notes | 6 months to 31 December 2010 | 6 months to 31 December 2009 | ||
Unaudited £ | Unaudited £ | |||
Revenue | ||||
Management services | - | 19,027 | ||
Total revenue | - | 19,027 | ||
Net gains from other sales | ||||
Gains/(losses) on sales of investments | - | - | ||
Total net gains from other sales | - | - | ||
Total revenue and net gains from sales | - | 19,027 | ||
Gain on dilution of interest in associate | 641,172 | - | ||
Impairment of available for sale investment | (25,755) | - | ||
Exploration expenses | (4,132) | (5,729) | ||
Administrative expenses | (230,318) | (256,032) | ||
Share of profit of associates | 2,154,449 | 634,001 | ||
Finance costs (net) | (827) | (3,103) | ||
Profit for the period before taxation | 2,534,589 | 388,164 | ||
Tax expense | (688,100) | - | ||
Profit for the period attributable to owners of parent | 1,846,489 | 388,164 | ||
Earnings per share | ||||
Earnings per share - basic | 3 | 0.39 pence | 0.10 pence | |
Earnings per share - diluted | 3 | 0.37 pence | 0.10 pence |
All of the operations are considered to be continuing.
The accompanying notes form an integral part of this half-yearly report.
Consolidated statement of comprehensive income
for the period ended 31 December 2010
6 months to 31 December 2010 | 6 months to 31 December 2009 | |||
Unaudited £ | Unaudited £ | |||
Profit for the period | 1,846,489 | 388,164 | ||
Surplus on revaluation of available for sale investments | 1,007,348 | 96,369 | ||
Deferred taxation on revaluation of available for sale investments | (271,984) | - | ||
Group's share of associates' other comprehensive income | 4,264,279 | 180,325 | ||
Deferred tax on associates | (1,151,355) | - | ||
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations | 162,470 | (15,479) | ||
Total comprehensive income for the period | 5,857,247 | 649,379 | ||
The accompanying notes form an integral part of this half-yearly report.
Consolidated statement of financial position
as at 31 December 2010
Notes | 31 December 2010 | 31 December 2009 | 30 June 2010 | |||
Unaudited £ | Unaudited £ | Audited £ | ||||
ASSETS | ||||||
Non current assets | ||||||
Property plant and equipment | 35,758 | 13,381 | 28,181 | |||
Investments in associates | 8,473,996 | 1,619,935 | 1,414,096 | |||
Goodwill | 47,961 | 43,507 | 47,273 | |||
Exploration assets | 2,439,012 | 1,772,508 | 2,048,408 | |||
Total non current assets | 10,996,727 | 3,449,331 | 3,537,958 | |||
Current assets | ||||||
Cash and cash equivalents | 449,054 | 126,217 | 30,828 | |||
Trade and other receivables | 813,824 | 211,602 | 303,788 | |||
Available for sale financial assets | 5 | 4,412,034 | 571,596 | 412,584 | ||
Total current assets | 5,674,912 | 909,415 | 747,200 | |||
TOTAL ASSETS | 16,671,639 | 4,358,746 | 4,285,158 | |||
EQUITY AND LIABILITIES | ||||||
Equity attributable to owners of the parent | ||||||
Called up share capital | 543,387 | 396,129 | 427,882 | |||
Share premium account | 8,069,862 | 4,407,261 | 4,755,071 | |||
Share based payment reserve | 174,915 | 117,748 | 174,915 | |||
Other reserves | 4,074,392 | 750,171 | 63,634 | |||
Retained earnings | 368,692 | (1,608,025) | (1,477,797) | |||
Total Equity | 13,231,248 | 4,063,284 | 3,943,705 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables | 208,622 | 295,462 | 341,453 | |||
Short term borrowings | 1,120,330 | - | - | |||
Total current liabilities | 1,328,952 | 295,462 | 341,453 | |||
Non current liabilities | ||||||
Deferred tax liabilities | 2,111,439 | - | - | |||
Total non current liabilities | 2,111,439 | - | 341,453 | |||
TOTAL EQUITY AND LIABILITIES | 16,671,639 | 4,358,746 | 4,285,158 | |||
The accompanying notes form an integral part of this half-yearly report.
Consolidated statement of changes in equity
for the period ended 31 December 2010
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 2009 | 352,808 | 3,775,578 | (1,996,189) | 117,748 | 488,956 | 2,738,901 |
Changes in equity for 2009 | ||||||
Total comprehensive income/(loss) for the period | - | - | 388,164 | - | 261,215 | 649,379 |
Transactions with owners | ||||||
Issue of shares | 43,321 | 739,231 | - | - | - | 782,552 |
Share issue and fundraising costs | - | (107,548) | - | - | - | (107,548) |
Total Transactions with owners | 43,321 | 631,683 | - | - | - | 675,004 |
As at 31 December 2009 | 396,129 | 4,407,261 | (1,608,025) | 117,748 | 750,171 | 4,063,284 |
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/(loss) 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) |
Share based payments | - | - | - | - | - | - |
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 |
Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Consolidation reserve | Total other reserves | |
£ | £ | £ | £ | £ | |
As at 30 June 2009 | (217,072) | 437,763 | 115,344 | 152,921 | 488,956 |
Changes in equity for 2009 | |||||
Total comprehensive income/(loss) for the period | 96,369 | 180,325 | (15,479) | - | 261,215 |
Transactions with owners | |||||
Share based payments | - | - | - | - | - |
As at 31 December 2009 | (120,703) | 618,088 | 99,865 | 152,921 | 750,171 |
As at 30 June 2010 | (211,514) | (48,874) | 171,101 | 152,921 | 63,634 |
Changes in equity for 2010 | |||||
Total comprehensive income/(loss) for the period | 735,364 | 3,112,924 | 162,470 | - | 4,010,758 |
Transactions with owners | |||||
Share based payments | - | - | - | - | - |
As at 31 December 2010 | 523,850 | 3,064,050 | 333,571 | 152,921 | 4,074,392 |
Consolidated statement of cash flows
for the period ended 31 December 2010
Notes | 6 months to 31 December 2010 | 6 months to 31 December 2009 | ||
Unaudited £ | Unaudited £ | |||
Cash flows from operating activities | ||||
Profit before taxation | 2,534,589 | 388,164 | ||
Increase in receivables | (510,036) | (44,440) | ||
(Decrease)/increase in payables | (132,831) | 69,309 | ||
Share of profit in associates | (2,154,449) | (634,001) | ||
Interest receivable | (4) | (622) | ||
Interest payable | 831 | 3,725 | ||
Exploration expenses | 4,132 | 5,729 | ||
Currency adjustments | (14,555) | 11,280 | ||
Impairment of associate | 25,755 | - | ||
Gain on dilution of interest in associates | (641,172) | - | ||
Depreciation | 6,859 | 1,898 | ||
Net cash outflow from operations | (880,881) | (198,958) | ||
Cash flows from investing activities | ||||
Interest received | 4 | 622 | ||
Interest paid | (831) | (3,725) | ||
Payments to acquire associate company investments | - | (80,075) | ||
Payments to acquire available for sale investments | (3,017,857) | (255,643) | ||
Exploration payments | (218,715) | (209,376) | ||
Payments to acquire property plant and equipment | (14,120) | (5,191) | ||
Net cash flows from investing activities | (3,251,519) | (553,388) | ||
Cash flows from financing activities | ||||
Proceeds from issue of shares | 3,492,121 | 782,552 | ||
Transaction costs of issue of shares | (61,825) | (107,548) | ||
Proceeds of new borrowings | 1,120,330 | - | ||
Net cash flows from financing activities | 4,550,626 | 675,004 | ||
Net increase/(decrease) in cash and cash equivalents | 418,226 | (77,342) | ||
Cash and cash equivalents at the beginning of period | 30,828 | 203,559 | ||
Cash and cash equivalents at end of period | 449,054 | 126,217 | ||
Half-yearly report notes
for the period ended 31 December 2010
1 | Company and group |
As at 30 June 2010 and 31 December 2010 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 2011.
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 2010 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2010, 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 condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2010, which have been prepared in accordance with IFRSs |
3 | Earnings per share | 6 months to 31 December 2010 | 6 months to 31 December 2009 | |
£ | £ |
These have been calculated on profit for the period after taxation of: | 1,846,489 | 388,164 | ||
Weighted average number of Ordinary shares of £0.001 in issue | 475,087,544 | 382,375,603 | ||
Earnings per share - basic | 0.39 pence | 0.10 pence | ||
Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options | 503,962,544 | 400,375,603 | ||
Earnings per share fully diluted | 0.37 pence | 0.10 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: |
2010 | 2009 | |||
Number | Number | |||
Earnings per share denominator | 475,087,544 | 382,375,603 | ||
Weighted average number of exercisable share options | 28,875,000 | 18,000,000 | ||
Diluted earnings per share denominator | 503,962,544 | 400,375,603 |
Half-yearly report notes
for the period ended 31 December 2010, 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 | 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 |
Investment in Red Rock Resources plc | Other investments | Australian exploration | Corporate and unallocated | Total | ||
For the 6 month period to 31 December 2009 | £ | £ | £ | £ | £ | |
Revenue | - | - | - | 19,027 | 19,027 | |
Result | ||||||
Segment results | 634,001 | - | - | (242,734) | 391,267 | |
Profit before tax and finance costs | 391,267 | |||||
Interest receivable | 622 | |||||
Interest payable | (3,725) | |||||
Profit before taxation | 388,164 | |||||
Taxation expense | - | |||||
Consolidated profit for the period | 388,164 |
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 2010, continued
5 | Available for sale financial assets |
Net book amount | £ |
| |
| |||
At 30 June 2010 | 412,584 |
| |
Additions during the period | 3,017,857 |
| |
Revaluation during the period | 1,007,348 |
| |
Impairment during the period | (25,755) |
| |
| |||
Net book value at 31 December 2010 | 4,412,034 |
| |
| |||
The additions during the period relate to the company's £1,165,337 investment in Oracle Coalfields Plc and its £1,852,520 investment in Direct Nickel Pty Ltd, as detailed in the chairman's statement.
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6 | 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 2010, 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 2010 | 427,881,777 | 427,882 | ||
Issued 17 September 2010 at 1.10 pence per share | 59,000,000 | 59,000 | ||
Issued 24 September 2010 at 1.25 pence per share | 10,000,000 | 10,000 | ||
Issued 12 November 2010 at 3.00 pence per share | 10,470,000 | 10,470 | ||
Issued 30 November 2010 at 6.90 pence per share | 26,841,114 | 26,841 | ||
Issued 14 December 2010 at 6.00 pence per share | 5,000,000 | 5,000 | ||
Issued 23 December 2010 at 6.00 pence per share | 4,193,850 | 4,194 | ||
At 31 December 2010 | 543,386,741 | 543,387 | ||
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. |