28 Mar 2013 09:45
REGENCY MINES PLC
INTERIM RESULTS FOR PERIOD ENDED 31 DECEMBER 2012
28 March 2013
|
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 2012. |
Chairman's statement |
Dear Shareholders,
In the six months to 31 December 2012 the Company, which earlier in the year had achieved a milestone when it declared a 162.5 million ton mineral resource at 0.94 per cent nickel and 0.09 per cent cobalt at its joint venture Mambare project in Papua New Guinea, switched focus to its other assets.
In Western Australia our subsidiary Regency Mines Australasia Pty Ltd was active, carrying out initial analysis of earlier MMI (mobile metal ion) geochemical work at Pyramid Lake, and metallurgical testwork was carried out on titanium-rich clays from a small area of the project where we had previously carried out drilling. Initial exploration was carried out at the Munglinup graphite project, which is adjacent to the old Halberts mine, and talks began with the neighbouring owner on co-operation. We now plan to combine with their drill programme some exploration of our own. Initial research began on licenses we had applied for at Fraser West, and we looked again at the Bundarra copper-gold project in Queensland.
After our neighbours Sirius made the Nova nickel discovery, our Fraser West tenements found themselves in the heart of what now seemed the most exciting exploration area in Australia. We wanted to put Fraser West into an Australian-listed vehicle that could act as a vehicle for raising exploration funding, as interest in the area around Nova was strongest among Australian investors, and therefore entered into a transaction with RAM Resources Ltd (ASX:RMR) whereby RAM would acquire in stages up to 100 per cent of the Fraser West tenements, initially acquiring 80 per cent for 1,205,000,000 RAM shares. Under the first stages of this agreement we were issued with 155,000,000 RAM shares (11.4 per cent of outstanding RAM shares), and after a hiatus due to illnesses and absences at RAM we have just appointed Bill Guy as a director to the board of RAM to carry through and market the next stages. Bill Guy is an experienced and energetic Australian geologist who was formerly the Chief Geologist at Jupiter Mines Ltd, and is a director of Regency Mines Australasia Pty Ltd. We are pleased to have his involvement.
Elsewhere, we entered into an option agreement, later exercised, to enable us to farm in to Sudanese agromineral licenses. We have conducted several low intensity visits to the various projects, written the annual report for the new joint venture, and engaged with an expert consultant who worked for five years at the Saudi Al Jalamid phosphate deposit. We expect a revised concession agreement, covering all areas (including new and surrendered areas) and the different stages of exploration and development, to be executed at a signing ceremony in Khartoum, and until this occurs we are restricted in what we can discuss. Considerable potential exists for economic phosphate, potash, and gypsum mineralisation, and as an early investor in this vast and orderly country we have developed a strong working relationship with the authorities.
It is pleasing to report that our joint venture partner in Papua New Guinea, Direct Nickel Ltd, in which we are an investor, was finally able to procure funding and start 24/7 operation of the pilot plant for its nickel treatment technology in January 2013. The testwork will last until the Autumn but periodic updates have indicated a good start. Our Mambare project has a license for this technology, that has the potential to change the nickel industry.
In the period under review, a post-tax loss of £3,184,917 was incurred, compared with a loss of £1,484,313 in the comparable period of the previous year. The principal reason for this was the share of losses of associates of £2,071,632, which was due to the impairment charge taken on a major investment, Jupiter Mines Limited, at our associate company Red Rock Resources plc.
In the coming period, we expect continued news flow from operations at Direct Nickel and from our Australian activities, while corporate activity will continue to be a focus. Preliminary discussions have taken place with a potential investor in our Sudan joint venture, and a potential industrial partner from Asia has signed a non-disclosure agreement and plans to visit Mambare with us this Spring 2013. We have also had discussions with a possible partner for our Queensland Bundarra project. While there can be no assurance that all or any of these discussions will bear fruit, they, and the RAM transaction, reflect our emphasis this year on seeking financially strong partners for our projects, so that we may leverage our exposure either by restriction of our own financial commitment or by partial realisation of profits and value. |
Andrew Bell |
Chairman |
28 March 2013 |
Consolidated statement of financial position
as at 31 December 2012
Notes | 31 December 2012 | 31 December 2011 | 30 June 2012 | |||
Unaudited £ | Unaudited £ | Audited £ | ||||
ASSETS | ||||||
Non current assets | ||||||
Property plant and equipment | 44,833 | 150,527 | 54,204 | |||
Investments in associates and joint ventures | 3,504,274 | 3,517,654 | 4,544,108 | |||
Goodwill | - | 56,460 | - | |||
Available for sale financial assets | 4,868,060 | 5,387,568 | 4,770,250 | |||
Exploration assets | 1,787,950 | 4,143,683 | 1,572,086 | |||
Deferred tax assets | - | - | 138,162 | |||
Total non current assets | 10,205,117 | 13,255,892 | 11,078,810 | |||
Current assets | ||||||
Cash and cash equivalents | 15,428 | 150,769 | 17,849 | |||
Trade and other receivables | 1,366,048 | 876,847 | 1,548,277 | |||
Total current assets | 1,381,476 | 1,027,616 | 1,566,126 | |||
TOTAL ASSETS | 11,586,593 | 14,283,508 | 12,644,936 | |||
EQUITY AND LIABILITIES | ||||||
Equity attributable to owners of the parent | ||||||
Called up share capital | 5 | 850,713 | 639,849 | 663,084 | ||
Share premium account | 13,830,349 | 11,671,181 | 12,164,009 | |||
Share based payment reserve | 56,607 | 172,744 | 56,607 | |||
Other reserves | (280,056) | (235,841) | (1,394,750) | |||
Retained earnings | (4,427,969) | (807,288) | (1,243,052) | |||
Total Equity | 10,029,644 | 11,440,645 | 10,245,898 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables | 415,514 | 1,002,062 | 807,289 | |||
Short term borrowings | 1,141,435 | 1,125,619 | 1,591,749 | |||
Total current liabilities | 1,556,949 | 2,127,681 | 2,399,038 | |||
Non current liabilities | ||||||
Long term borrowings | - | 707,532 | - | |||
Deferred tax liabilities | - | 7,650 | - | |||
Total non current liabilities | - | 715,182 | - | |||
TOTAL EQUITY AND LIABILITIES | 11,586,593 | 14,283,508 | 12,644,936 | |||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2012
Notes | 6 months to 31 December 2012 | 6 months to 31 December 2011* | ||
Unaudited £ | Unaudited £ | |||
Revenue | ||||
Management services | 38,650 | 94,687 | ||
Gain on sale of exploration assets | 148,616 | - | ||
(Loss)/gain on dilution of interest in associate | (166,698) | 9,988 | ||
Impairment of available for sale investment | (279,961) | (104,753) | ||
Exploration expenses | (81,117) | (172,746) | ||
Administrative expenses | (484,245) | (393,823) | ||
Share of losses of associates | (2,071,632) | (625,878) | ||
Finance costs, net | (102,235) | (53,109) | ||
Loss for the period before taxation from continuing operations | (2,998,622) | (1,245,634) | ||
Tax expense | (186,295) | (238,679) | ||
Loss for the period after taxation from continuing operations | (3,184,917) | (1,484,313) | ||
Discontinued operations | ||||
Profit after tax for the period from discontinued operations | - | 9,665 | ||
Loss for the period attributable to owners of parent | (3,184,917) | (1,474,648) | ||
Earnings per share | ||||
Loss per share - basic | 3 | (0.41) pence | (0.24) pence | |
Loss per share - diluted | 3 | (0.41) pence | (0.24) pence |
*Certain amounts shown here do not correspond to the 2011 interim financial statements to re-present results of discontinued operations as explained in Note 1.
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2012
6 months to 31 December 2012 | 6 months to 31 December 2011 | |||
Unaudited £ | Unaudited £ | |||
Loss for the period | (3,184,917) | (1,474,648) | ||
Revaluation of available for sale investments | (135,345) | (682,038) | ||
Deferred taxation on revaluation of available for sale investments | 48,133 | 93,598 | ||
Group's share of associates' other comprehensive income/(loss) | 1,198,496 | (1,361,752) | ||
Deferred tax on associates | - | 145,381 | ||
Unrealised foreign currency gain arising upon retranslation of foreign operations |
3,410 |
131,406 | ||
Total comprehensive (loss) for the period | (2,070,223) | (3,148,053) | ||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2012
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 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 |
As at 30 June 2012 | 663,084 | 12,164,009 | (1,243,052) | 56,607 | (1,394,750) | 10,245,898 |
Changes in equity for 2012 | ||||||
Total comprehensive (loss)/income for the period |
- |
- |
(3,184,917) |
- |
1,114,694 |
(2,070,223) |
Transactions with owners | ||||||
Issue of shares | 187,629 | 1,705,803 | - | - | - | 1,893,432 |
Share issue and fundraising costs |
- |
(39,463) |
- |
- |
- |
(39,463) |
Total Transactions with owners |
187,629 |
1,666,340 |
- |
- |
- |
1,853,969 |
As at 31 December 2012 | 850,713 | 13,830,349 | (4,427,969) | 56,607 | (280,056) | 10,029,644 |
Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Consolidation reserve | Total other reserves | |
£ | £ | £ | £ | £ | |
As at 30 June 2011 | 360,740 | 416,355 | 507,548 | 152,921 | 1,437,564 |
Changes in equity for 2011 | |||||
Total comprehensive (loss)/income 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) |
As at 30 June 2012 | (20,216) | (1,575,958) | 201,424 | - | (1,394,750) |
Changes in equity for 2012 | |||||
Total comprehensive (loss)/income for the period |
(87,212) |
1,198,496 |
3,410 |
- |
1,114,694 |
As at 31 December 2012 | (107,428) | (377,462) | 204,834 | - | (280,056) |
Consolidated statement of cash flows
for the period ended 31 December 2012
6 months to 31 December 2012 | 6 months to 31 December 2011 | |||
Unaudited £ | Unaudited £ | |||
Cash flows from operating activities | ||||
Loss before taxation from continuing operations | (2,998,622) | (1,245,634) | ||
Profit before taxation from discontinued operations | - | 9,665 | ||
Loss before taxation | (2,998,622) | (1,235,969) | ||
Decrease in receivables | 182,229 | 159,038 | ||
(Decrease)/increase in payables | (391,775) | 175,793 | ||
Share of losses in associates | 2,071,632 | 625,878 | ||
Interest receivable | (3,548) | (12,962) | ||
Interest payable | 105,783 | 30,351 | ||
Impairment of exploration properties | 42,900 | 164,116 | ||
Share-based payments | 72,000 | - | ||
Currency adjustments | (24,297) | 35,167 | ||
Impairment of available for sale investment | 279,961 | 104,753 | ||
Loss/(gain) on dilution of interest in associates | 166,698 | (9,988) | ||
Loss on disposal of fixed assets | - | 717 | ||
Depreciation | 10,890 | 16,223 | ||
Net cash flows from operations | (486,149) | 53,117 | ||
Cash flows from investing activities | ||||
Interest received | 3,548 | 12,962 | ||
Payments to acquire available for sale investments | (513,116) | (60,919) | ||
Exploration payments | (268,533) | (1,022,776) | ||
Payments to acquire property plant and equipment | (1,522) | (11,395) | ||
Net cash flows from investing activities | (779,623) | (1,082,128) | ||
Cash flows from financing activities | ||||
Proceeds from issue of shares | 1,821,432 | 500,650 | ||
Transaction costs of issue of shares | (39,463) | (50,000) | ||
Interest paid | (105,783) | (30,351) | ||
Proceeds of new borrowings | 446,848 | - | ||
Repayment of borrowings | (859,683) | (406,431) | ||
Net cash flows from financing activities | 1,263,351 | 13,868 | ||
Net decrease in cash and cash equivalents | (2,421) | (1,015,143) | ||
Cash and cash equivalents at the beginning of period | 17,849 | 1,165,912 | ||
Cash and cash equivalents at end of period | 15,428 | 150,769 | ||
Half-yearly report notes
for the period ended 31 December 2012
1 | Company and Group |
As at 30 June 2012 and 31 December 2012 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively.
As at 30 June 2012, the Company no longer has direct ownership and control over Oro Nickel Ltd ("ONL") (formerly Canopus No 83 Limited) and has therefore ceased consolidating it as a subsidiary. The Consolidated Income Statement for the period 31 December 2011 has been re-presented to show ONL as a discontinued operation. |
The Company will report again for the year ending 30 June 2013.
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 2012 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2012, 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 2012, which have been prepared in accordance with IFRS. |
3 | Loss per share | 6 months to 31 December 2012 | 6 months to 31 December 2011 | |
£ | £ |
These have been calculated on loss for the period after taxation of: |
(3,184,917) |
(1,474,648) | ||
Weighted average number of Ordinary shares of £0.001 in issue | 774,173,582 | 616,769,746 | ||
Loss per share - basic | (0.41) pence | (0.24) pence | ||
Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options | 774,173,582 | 616,769,746 | ||
Loss per share fully diluted | (0.41) pence | (0.24) 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: |
2012 | 2011 | |||
Number | Number | |||
Earnings per share denominator | 774,173,582 | 616,769,746 | ||
Weighted average number of exercisable share options | - | - | ||
Diluted earnings per share denominator | 774,173,582 | 616,769,746 |
In accordance with IAS 33, the diluted earnings per share denominator takes into account the difference between the average market price of ordinary shares in the year and the weighted average exercise price of the outstanding options. The Group has weighted average share options of 18,000,000 for the current period which were not included in the calculation of diluted earnings per share because they are non-dilutive for the period presented.
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 2012 | £ | £ | £ | £ | £ | £ | |
Revenue | - | - | - | - | 38,650 | 38,650 | |
Result | |||||||
Segment results | (2,205,815) | (276,461) | 74,695 | (51,735) | (437,071) | (2,896,387) | |
Loss before tax and finance costs | (2,896,387) | ||||||
Interest receivable | 3,548 | ||||||
Interest payable | (105,783) | ||||||
Loss for the period before taxation from continuing operations | (2,998,622) | ||||||
Taxation expense | (186,295) | ||||||
Loss for the period after taxation from continuing operations | (3,184,917) | ||||||
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 | - | - | - | - | 94,687 | 94,687 | |
Result | |||||||
Segment results | (615,890) | (104,753) | (180,511) | (24,638) | (266,733) | (1,192,525) | |
Loss before tax and finance costs | (1,192,525) | ||||||
Interest receivable | 12,962 | ||||||
Interest payable | (29,712) | ||||||
Finance costs | (36,359) | ||||||
Loss for the period before taxation from continuing operations | (1,245,634) | ||||||
Taxation expense | (238,679) | ||||||
Loss for the period after taxation from continuing operations | (1,484,313) | ||||||
A measure of total asset and liabilities for each segment is not readily available and so this information has not been presented. |
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 2012, 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 2012 | 663,084,209 | 663,084 | ||
Issued 2 July 2012 at 1.25 pence per share | 64,600,000 | 64,600 | ||
Issued 8 August 2012 at 1.07 pence per share | 6,728,952 | 6,729 | ||
Issued 20 August 2012 at 0.95 pence per share | 16,808,323 | 16,808 | ||
Issued 28 September 2012 at 0.88 pence per share | 33,995,393 | 33,995 | ||
Issued 22 October 2012 at 0.83 pence per share | 12,040,462 | 12,041 | ||
Issued 7 November 2012 at 0.90 pence per share | 11,130,366 | 11,130 | ||
Issued 5 December 2012 at 0.82 pence per share | 10,973,595 | 10,974 | ||
Issued 5 December 2012 at 1.03 pence per share | 6,088,488 | 6,089 | ||
Issued 20 December 2012 at 0.80 pence per share | 25,263,373 | 25,263 | ||
At 31 December 2012 | 850,713,161 | 850,713 | ||
6 | Capital Management |
Management controls the capital of the Group in order to control risks, 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 January 2013, it was announced that the Company has issued 86,901,333 new ordinary shares of 0.1p each at a price of 0.7125 pence per share for a total consideration of £619,172.
·; On 29 January 2013, the Company announced the grant of 60,000,000 options over 60,000,000 ordinary shares of £0.001 in the capital of the Company to Directors and key employees of the Company. 40,000,000 options were granted to the Directors and 20,000,000 options are to be granted at the Board's discretion to key staff and project managers. The options can be exercised for prices between £0.015 and £0.045 with expirations between 1 June 2016 and 1 June 2019.
·; On 20 February 2013, it was announced that pursuant to a Special Advance entered into by the Company under the Standby Equity Distribution Agreement the Company has issued 70,646,937 new ordinary shares of 0.1p each at a price of 0.735 pence per share for a total consideration of £472,050, net of fees. Out of the total shares issued, 6,422,448 were issued as payment of fees.