27 Mar 2015 11:42
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27 March 2015
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Regency Mines Plc ("Regency" or the "Company"), the natural resources exploration and investment company with interests in oil in the United States and United Kingdom and nickel and other minerals in Australia, Papua New Guinea and Sudan, announces its unaudited half-yearly results for the six months ended 31 December 2014. |
Chairman's statement |
Dear Shareholders,
The six months to 31 December 2014 were dominated in terms of news coverage by the investments in the oil sector made by Regency. The most significant of these was the investment in 5% of Horse Hill Development Ltd (HHDL), supporting a similar investment at the same time by Alba Mineral Resources plc (Alba), in which Regency was a significant shareholder. During the period HHDL drilled the HH-1 well near Gatwick in Sussex, and announced a discovery currently thought to be commercial.
At the same time, and attracting less attention by the capital markets, the Company continued its steady exploration of agromineral prospects in Sudan, announcing the results of an ASTER study and interpretation of the Jebel Abyad phosphate target and mobilisation for an exploration programme at the Red Sea potash prospect.
Finance
Meanwhile the Company continued its programme of repaying debt and cutting costs in order to maximise its effectiveness in a period of continuing depressed sentiment towards the sector and low commodity prices. Administrative costs during the period, once adjustment is made for a £98k increase in currency losses on consolidation, declined significantly, and this decline is expected to continue in the current half year.
Sales were made of part of Regency's investment in Alba at a profit after the announcement of the two companies' investment in HHDL, and Regency saw an appreciation in the value of its remaining Alba holding over this time period. Sales were also made of part of Regency's holding in Ram Resources Ltd (Ram) in Australia. Although this latter sale showed a loss on book value, the Fraser Range assets that had been sold into Ram the previous year and resulted in the Company's holding these shares had little associated cost and so over the acquisition to disposal cycle the Company has realised and will continue to realise very favourable returns.
Oil
Besides the investment in HHDL, a further small planned investment in a West Virginia drilling project was made, and prospects for drilling this project economically will be reviewed later in the Spring.
After the end of the period, in March 2015, Regency announced the planned sale of its stake in HHDL to Alba. This sale will make funds available for other projects, and among those under review are potential low-risk and high-return oil participations in Texas and Louisiana, as well as other projects. A rigorous process of analysis is conducted on all projects brought to the Company, and not many projects will have acceptable risk parameters and be capable of providing near-term cash flow from low cost production, which are among the requirements.
Since the Company has large and long term projects in Papua New Guinea, Direct Nickel Ltd (DNi), and Sudan, where the possibility of progress in any individual year may be uncertain, complementing these with revenues from mining finance operations and sales of resulting marketable investments remains the strategy. Adding cash flow from smaller oil and gas participations as an additional source of financing to cover Company overheads and fund mineral exploration is a rational response to current market conditions.
Nickel
The Nickel price has come back to lower levels, and although the Company is confident that the next move for this metal, two thirds of which is used in stainless steel, will be upward, timing of these developments remains uncertain. The Company's partner Direct Nickel Ltd has faced challenges with advancing its technology as a result both of market conditions and of delays in progress in Indonesia in the recent post-election period.
The Company maintains its interest in the Mambare license, where some activity will be undertaken this year, and is actively engaged with DNi in order to assist that company with evolving its strategy for 2015.
Regency continues to discuss possible strategic alliances in this field.
Sudan
The Company is working with a consultant to follow up indications of carnallite and silvinite mineralisation in the well-log drilled to the south of and down-dip of the Red Sea license area, since these may be confirmatory of potash presence.
A short focussed exploration trip to target areas identified last year in the Jebel Abyad license is planned shortly, followed by a further phase of exploration at the Red Sea.
Investments and other
Regency retains a discloseable holding in Alba, through which it continues to have an interest in potential developments at the Horse Hill oil discovery. The Company also has been issued further shares in Ram, and in the event of a fundraising by Ram to finance exploration at the Fraser Range gold/copper exploration project it expects to exercise its conversion rights into further Ram shares. These shareholdings in Alba and Ram are marketable investments that may at an appropriate time be sold.
The Company looks forward to progressing exploration of its Munglinup tenements in conjunction with the new owner of the adjacent Halberts property, formerly a producing graphite mine.
Regency thanks shareholders and staff for their support over a challenging period. In the period ahead the Company will work diligently on its existing assets, and will remain open to opportunities for adding value and achieving the critical mass that will enable it to seize fully the opportunities that recovery will bring.
Andrew Bell
Chairman and CEO
27 March 2015
Consolidated statement of financial position
as at 31 December 2014
| Notes | 31 December 2014 |
| 31 December 2013 |
| 30 June 2014 |
|
| Unaudited £ |
| Unaudited £ |
| Audited £ |
ASSETS |
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Non current assets |
|
|
|
|
|
|
Property plant and equipment |
| 12,943 |
| 35,240 |
| 22,562 |
Investments in associates and joint ventures |
| 2,164,183 |
| 2,413,740 |
| 2,234,244 |
Available for sale financial assets |
| 4,686,652 |
| 4,570,968 |
| 4,611,833 |
Exploration assets |
| 1,259,823 |
| 1,427,588 |
| 1,198,306 |
Total non current assets |
| 8,123,601 |
| 8,447,536 |
| 8,066,945 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
| 7,243 |
| 10,168 |
| 267,325 |
Trade and other receivables |
| 1,778,765 |
| 1,500,417 |
| 1,659,602 |
Total current assets |
| 1,786,008 |
| 1,510,585 |
| 1,926,927 |
|
|
|
|
|
|
|
TOTAL ASSETS |
| 9,909,609 |
| 9,958,121 |
| 9,993,872 |
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EQUITY AND LIABILITIES |
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Equity attributable to owners of the parent |
|
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|
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Called up share capital | 5 | 1,788,919 |
| 1,222,540 |
| 1,475,403 |
Share premium account |
| 16,539,232 |
| 15,545,787 |
| 15,944,484 |
Share based payment reserve |
| - |
| 44,028 |
| 41,512 |
Other reserves |
| (327,982) |
| (202,234) |
| (370,137) |
Retained earnings |
| (8,853,699) |
| (7,642,437) |
| (8,089,080) |
Total Equity |
| 9,146,470 |
| 8,967,684 |
| 9,002,182 |
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LIABILITIES |
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|
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Current liabilities |
|
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|
|
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Trade and other payables |
| 427,323 |
| 442,800 |
| 503,427 |
Short term borrowings |
| 335,816 |
| 547,637 |
| 488,263 |
Total current liabilities |
| 763,139 |
| 990,437 |
| 991,690 |
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|
|
|
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TOTAL EQUITY AND LIABILITIES |
| 9,909,609 |
| 9,958,121 |
| 9,993,872 |
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The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2014
| Notes | 6 months to 31 December 2014 |
| 6 months to 31 December 2013 |
|
| Unaudited £ |
| Unaudited £ |
|
|
|
|
|
Revenue |
|
|
|
|
Management services |
| 15,255 |
| 63,991 |
Gain on sale of tenements |
| - |
| 973,702 |
|
| 15,255 |
| 1,037,693 |
|
|
|
|
|
Gain/(loss) on dilution of interest in associate |
| (30,585) |
| 25,948 |
Loss on sale of investments |
| (50,150) |
| - |
Impairment of available for sale investment |
| - |
| (913,676) |
Impairment of exploration assets |
| (103,971) |
| (475,138) |
Exploration expenses |
| 3,106 |
| (30,082) |
Administrative expenses |
| (532,042) |
| (514,212) |
Share of losses of associates |
| (104,505) |
| (171,536) |
Finance costs, net |
| (3,239) |
| (18,650) |
Loss for the period before taxation from continuing operations |
| (806,131) |
| (1,059,653) |
Tax expense |
| - |
| - |
Loss for the period after taxation from continuing operations |
| (806,131) |
| (1,059,653) |
|
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|
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Earnings per share |
|
|
|
|
Loss per share - basic | 3 | (0.05) pence |
| (0.09) pence |
Loss per share - diluted | 3 | (0.05) pence |
| (0.09) pence |
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2014
|
| 6 months to 31 December 2014 |
| 6 months to 31 December 2013 |
|
| Unaudited £ |
| Unaudited £ |
|
|
|
|
|
|
|
|
|
|
Loss for the period |
| (806,131) |
| (1,059,653) |
Revaluation of available for sale investments |
| 30,821 |
| 71,257 |
Group's share of associates' other comprehensive (expense)/ income |
| (9,971) |
| 13,106 |
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations |
|
21,305 |
|
(21,273) |
Total comprehensive loss for the period |
| (763,976) |
| (996,563) |
|
|
|
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The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2014
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 2013 | 1,106,050 | 15,025,276 | (6,595,363) | 56,607 | (265,324) | 9,327,246 |
Changes in equity for 2013 |
|
|
|
|
|
|
Total comprehensive (loss)/income for the period |
- |
- |
(1,059,653) |
- |
63,090 |
(996,563) |
Transactions with owners |
|
|
|
|
|
|
Issue of shares | 116,490 | 520,511 | - | - | - | 637,001 |
Share-based payment transfer | - | - | 12,579 | (12,579) | - | - |
Total Transactions with owners |
116,490 |
520,511 |
12,579 |
(12,579) |
- |
637,001 |
As at 31 December 2013 | 1,222,540 | 15,545,787 | (7,642,437) | 44,028 | (202,234) | 8,967,684 |
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As at 30 June 2014 | 1,475,403 | 15,944,484 | (8,089,080) | 41,512 | (370,137) | 9,002,182 |
Changes in equity for 2014 |
|
|
|
|
|
|
Total comprehensive (loss)/income for the period |
- |
- |
(806,131) |
- |
42,155 |
(763,976) |
Transactions with owners |
|
|
|
|
|
|
Issue of shares | 313,516 | 621,103 | - | - | - | 934,619 |
Share issue and fundraising costs |
- |
(26,355) |
- |
- |
- |
(26,355) |
Share-based payment transfer | - | - | 41,512 | (41,512) | - | - |
Total Transactions with owners | 313,516 | 594,748 | 41,512 | (41,512) | - | 908,264 |
As at 31 December 2014 | 1,788,919 | 16,539,232 | (8,853,699) | - | (327,982) | 9,146,470 |
| Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Total other reserves |
| £ | £ | £ | £ |
As at 30 June 2013 | (35,034) | (457,640) | 227,350 | (265,324) |
Changes in equity for 2013 |
|
|
|
|
Total comprehensive income/(loss) for the period | 71,257 | 13,106 | (21,273) | 63,090 |
|
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|
As at 31 December 2013 | 36,223 | (444,534) | 206,077 | (202,234) |
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As at 30 June 2014 | (311,934) | (403,989) | 345,786 | (370,137) |
Changes in equity for 2014 |
|
|
|
|
Total comprehensive income/(loss) for the period | 30,821 | (9,971) | 21,305 | 42,155 |
|
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As at 31 December 2014 | (281,113) | (413,960) | 367,091 | (327,982) |
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Consolidated statement of cash flows
for the period ended 31 December 2014
|
| 6 months to 31 December 2014 |
| 6 months to 31 December 2013 |
|
| Unaudited £ |
| Unaudited £ |
|
|
|
|
|
Cash flows from operating activities |
|
|
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|
Loss before taxation |
| (806,131) |
| (1,059,653) |
(Increase)/decrease in receivables |
| (119,161) |
| 112,854 |
(Decrease)/increase in payables |
| (76,104) |
| 5,942 |
Share of losses in associates |
| 104,505 |
| 171,536 |
Interest receivable |
| (8,412) |
| (8,740) |
Interest payable |
| 11,651 |
| 27,390 |
Impairment of exploration properties |
| 103,971 |
| 475,138 |
Share-based payments |
| - |
| 54,000 |
Currency adjustments |
| 121,334 |
| 96,667 |
Impairment of available for sale investment |
| - |
| 913,676 |
Loss/(Gain) on dilution of interest in associates |
| 30,585 |
| (25,948) |
Loss on sale of available for sale investments |
| 50,150 |
| - |
Gain on sale of tenements |
| - |
| (973,702) |
Depreciation |
| 9,618 |
| 13,301 |
Net cash flows from operations |
| (577,994) |
| (197,539) |
|
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Cash flows from investing activities |
|
|
|
|
Interest received |
| 8,412 |
| 8,740 |
Proceeds from sale of investments |
| 205,852 |
| - |
Payments to acquire associate company investments |
| (75,000) |
| - |
Payments to acquire available for sale investments |
| (300,000) |
| (53,793) |
Exploration payments |
| (207,378) |
| (366,338) |
Payments to acquire property plant and equipment |
| - |
| (1,028) |
Net cash flows from investing activities |
| (368,114) |
| (412,419) |
|
|
|
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|
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Cash flows from financing activities |
|
|
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|
Proceeds from issue of shares |
| 934,619 |
| 583,000 |
Transaction costs of issue of shares |
| (26,355) |
| - |
Interest paid |
| (11,651) |
| (27,390) |
Proceeds of new borrowings |
| 209,787 |
| 250,000 |
Repayment of borrowings |
| (420,374) |
| (198,245) |
Net cash flows from financing activities |
| 686,026 |
| 607,365 |
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|
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|
|
Net decrease in cash and cash equivalents |
| (260,082) |
| (2,593) |
|
|
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|
|
Cash and cash equivalents at the beginning of period |
| 267,325 |
| 12,761 |
Cash and cash equivalents at end of period |
| 7,243 |
| 10,168 |
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Half-yearly report notes
for the period ended 31 December 2014
1 | Company and Group |
| As at 30 June 2014 and 31 December 2014 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 full year ending 30 June 2015.
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 2014 has been extracted from the statutory accounts of the Group for that year. Statutory accounts for the year ended 30 June 2014, 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 2014, which have been prepared in accordance with IFRS. |
3 | Loss per share | 6 months to 31 December 2014 |
| 6 months to 31 December 2013 |
|
| £ |
| £ |
| These have been calculated on loss for the period after taxation of: |
(806,131) |
|
(1,059,653) |
|
|
|
|
|
| Weighted average number of Ordinary shares of £0.001 in issue | 1,630,200,524 |
| 1,158,617,085 |
| Loss per share - basic | (0.05) pence |
| (0.09) pence |
|
|
|
|
|
| Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options |
1,630,200,524 |
|
1,158,617,085 |
| Loss per share fully diluted | (0.05) pence |
| (0.09) 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: |
|
| 2014 |
| 2013 |
|
| Number |
| Number |
|
|
|
|
|
| Earnings per share denominator | 1,630,200,524 |
| 1,158,617,085 |
| Weighted average number of exercisable share options | - |
| - |
| Diluted earnings per share denominator | 1,630,200,524 |
| 1,158,617,085 |
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 6,367,213 for the current period. These were not included in the calculation of diluted earnings per share because all the options are not likely to be exercised given that even the lowest exercise price is substantially higher than the market price and are therefore non-dilutive for the period presented.
Half-yearly report notes
for the period ended 31 December 2014, 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 2014 | £ | £ | £ | £ | £ | £ |
|
|
|
|
|
|
|
|
| Revenue | - | - | - | - | 15,255 | 15,255 |
|
|
|
|
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| Result |
|
|
|
|
|
|
| Segment results | (132,087) | 130,274 | (385,961) | (3,003) | (412,115) | (802,892) |
| Loss before tax and finance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest receivable |
|
|
|
|
| 8,412 |
| Interest payable |
|
|
|
|
| (11,651) |
| Loss for the period before taxation |
|
|
|
|
| (806,131) |
|
|
|
|
|
|
|
|
| Taxation expense |
|
|
|
|
| - |
| Loss for the period after taxation |
|
|
|
|
| (806,131) |
|
|
|
|
|
|
|
|
|
| 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 2013 | £ | £ | £ | £ | £ | £ |
|
|
|
|
|
|
|
|
| Revenue | - | - | 973,702 | - | 63,991 | 1,037,693 |
|
|
|
|
|
|
|
|
| Result |
|
|
|
|
|
|
| Segment results | (102,677) | (913,676) | 366,164 | (61,731) | (329,083) | (1,041,003) |
| Loss before tax and finance costs |
|
|
|
|
| (1,041,003) |
|
|
|
|
|
|
|
|
| Interest receivable |
|
|
|
|
| 8,740 |
| Interest payable |
|
|
|
|
| (27,390) |
| Loss for the period before taxation |
|
|
|
|
| (1,059,653) |
|
|
|
|
|
|
|
|
| Taxation expense |
|
|
|
|
| - |
| Loss for the period after taxation |
|
|
|
|
| (1,059,653) |
|
|
|
|
|
|
|
|
| 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 2014, continued
5 | Share Capital of the company |
| The share capital of the Company is as follows: |
|
| Number |
| Nominal £ |
|
|
|
|
|
| Allotted, issued and fully paid |
|
|
|
| As at 30 June 2014 | 1,475,402,734 |
| 1,475,403 |
|
|
|
|
|
| Issued 12 August 2014 at 0.28 pence per share | 60,500,063 |
| 60,500 |
| Issued 29 August 2014 at 0.28 pence per share | 56,321,437 |
| 56,321 |
| Issued 29 September 2014 at 0.40 pence per share | 61,925,000 |
| 61,925 |
| Issued 29 September 2014 at 0.48 pence per share | 41,905,659 |
| 41,906 |
| Issued 27 November 2014 at 0.17 pence per share | 92,864,033 |
| 92,864 |
|
|
|
|
|
| At 31 December 2014 | 1,788,918,926 |
| 1,788,919 |
|
|
|
|
|
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 20 February 2015, the Company announced that a resolution was passed at the General Meeting held that day whereby each of the 1,788,918,926 existing Ordinary Shares will be subdivided into one new Ordinary Share of 0.01p each and one Deferred Share of 0.09p each.
· On 20 February 2015, the Company announced an issuance of 35,000,000 new shares to the Company by RAM Resources ('RAM'). The shares were issued by conversion of 5.6% out of the 13.5% carried interest retained by the Company in the Fraser Range tenements and have been issued at a deemed issue price of AUD 0.8c, valuing the Shares at AUD 280,000. The Shares are subject to a voluntary escrow period until 21 April 2015.
· On 12 March 2015, the Company announced that it has executed a binding term sheet with Alba Mineral Resources Plc to sell its interests in Horse Hill Developments Ltd for a total consideration of £300,000 payable in cash.
For further information, please contact:
Andrew Bell 0207 747 9960 or 0776 647 4849 Chairman Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.
Christian Pickel 0203 128 8208 Media Relations MHP Communications