27 Mar 2014 07:00
27 March 2014
Regency Mines plc
Interim Results for the 6 Months ended 31 December 2013
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Regency Mines Plc ("Regency" or the "Company"), the mining exploration and mineral investment company with interests in nickel and other minerals in Australia, Papua New Guinea and Sudan, announces its unaudited half-yearly results for the six months ended 31 December 2013. |
Highlights
· Sudanese agromineral exploration continued;
· Test work at the Direct Nickel Ltd ("DNi") pilot plant in Perth, Western Australia, on the DNi lateritic nickel treatment technology continued and reached its successful conclusion; and
· Sale of base metal and gold prospective tenements in the Fraser Range of Western Australia to Ram Resources Limited ("Ram") - an Australian quoted company - concluded after nearly a year as Ram raised funds from the market and issued us with shares.
Commenting on the results, Andrew Bell, Chairman of Regency Mines, said:
"Despite difficult markets in the second half of 2013, we made significant progress in our three principal areas of operation: in Sudan, with Direct Nickel and with the sale of base metal and gold tenements in Western Australia to Ram Resources. The actions undertaken in 2013 have positioned Regency well for any recovery in markets. However, irrespective of the direction markets take, we will continue to build on the progress already made with our projects, as well as looking for further opportunities to add shareholder value."
For further information contact:
Andrew Bell 0207 747 9990 or 0776 647 4849 Chairman Regency Mines plc
Colin Aaronson / David Hignell 0207 383 5100 NOMAD Grant Thornton UK LLP
Nick Emerson 01483 413500 Broker SI Capital Ltd.
Guy Wheatley 0207 382 8416 Joint Broker Beaufort Securities Ltd
Rupert Trefgarne 0203 128 8817 Media Relations MHP Communications
Chairman's statement |
Dear Shareholders,
In the six months to 31 December 2013, the Company was able to announce significant progress in three areas of operation: · Sudanese agromineral exploration continued; · Test work at the Direct Nickel Ltd ("DNi") pilot plant in Perth, Western Australia, on the DNi lateritic nickel treatment technology continued and reached its successful conclusion; and · The sale of base metal and gold prospective tenements in the Fraser Range of Western Australia to Ram Resources Limited ("Ram") - an Australian quoted company - concluded after nearly a year as Ram raised funds from the market and issued us with shares.
The Fraser Range is an area that has seen an extraordinary surge in exploration activity following the discovery of the Nova deposit by Sirius, and we expect that this belt will continue to be one of the most actively explored areas of Australia for years to come. After the 2013 year end, Ram has been able to announce a further funding and is now well backed by the brokerage community in Australia. We are permitted to convert part of our carried retained interest in the tenements to shares at the same time and at the same price as the funding, and in consequence expect to have several hundred thousand dollars of free trading stock during April, as well as our other shareholding, carried participation and royalty interest.
In Sudan, where exploration is early stage and over a very large area, it has a different character from advanced exploration, and our visits are brief in nature as we try and extract the maximum useful information in the shortest possible time, and then come back to study our findings in detail in London. We have so far encountered useful indications of potential potash mineralisation near the Red Sea coast, and established the presence of phosphogenesis over a large area of our Jebel Abyad tenement, thereby confirming our exploration model.
The results for the half year to 31 December 2013 reflect some of these developments, with revenues including a significant gain of £973,702 on the sale of tenements.
In 2014, we hope to see further progress as our Australian interests are actively explored and the gradual recovery in the nickel price impacts our considerable nickel investments, both through the exploration joint-venture at Mambare in Papua New Guinea, where we have a 162.5 million tonnes indicated and inferred resource, and through our investment in the DNi nickel treatment technology.
The growth of direct exports of untreated nickel ore to China and Japan in recent years has resulted in the Indonesian government banning exports of nickel and aluminium ore to which no local value had been added, from the beginning of 2014. The intention, which has been clear for a year and a half, has been carried through with great firmness by the Indonesian government, defying the expectations of the industry that they would back down when it came to the time. We regard this as a favourable development for the nickel industry; pricing had been undermined by the reduction in processed nickel imports by China, as Chinese enterprises instead imported un-processed ore and processed it in highly polluting plants. The unwinding of this process as the Indonesian government resists the high-grade near-surface portions of its natural resource base being exported for little profit will restore the traditional nickel production model. This has already begun to be reflected in an improvement on prices this year that we hope will be maintained, and it will result in more interest in processing options for nickel ore.
The proving of the DNi nickel technology could not have occurred at a more opportune time. Among the advantages of this technology is the ability to install it in a scalable and modular way (reducing initial cost), and we believe that its environmental impact will be less than other alternatives, and the operating costs less.
DNi has announced a production joint-venture with the partly government-owned PT Antam in Indonesia, and we will continue to work with our partners at DNi, and on our own behalf, to maximise the value of our nickel footprint, whether by exploration or by transaction.
Management hope that Regency's other interests will share in the stabilisation, if not recovery, in the mining and exploration industry in 2014. After a difficult 2013 in financial and market terms, we therefore hope to see more opportunities for adding shareholder value in 2014 and we shall be quick to take them.
We thank shareholders for their patience through a trying time - both for the market and specifically for the nickel industry. |
Andrew Bell |
Chairman and CEO |
26 March 2014 |
Consolidated statement of financial position
as at 31 December 2013
Notes | 31 December 2013 | 31 December 2012 | 30 June 2013 | |||
Unaudited £ | Unaudited £ | Audited £ | ||||
ASSETS | ||||||
Non current assets | ||||||
Property plant and equipment | 35,240 | 44,833 | 47,539 | |||
Investments in associates and joint ventures | 2,413,740 | 3,504,274 | 2,546,222 | |||
Available for sale financial assets | 4,570,968 | 4,868,060 | 4,343,140 | |||
Exploration assets | 1,427,588 | 1,787,950 | 1,728,641 | |||
Total non current assets | 8,447,536 | 10,205,117 | 8,665,542 | |||
Current assets | ||||||
Cash and cash equivalents | 10,168 | 15,428 | 12,761 | |||
Trade and other receivables | 1,500,417 | 1,366,048 | 1,613,272 | |||
Total current assets | 1,510,585 | 1,381,476 | 1,626,033 | |||
TOTAL ASSETS | 9,958,121 | 11,586,593 | 10,291,575 | |||
EQUITY AND LIABILITIES | ||||||
Equity attributable to owners of the parent | ||||||
Called up share capital | 5 | 1,222,540 | 850,713 | 1,106,050 | ||
Share premium account | 15,545,787 | 13,830,349 | 15,025,276 | |||
Share based payment reserve | 44,028 | 56,607 | 56,607 | |||
Other reserves | (202,234) | (280,056) | (265,324) | |||
Retained earnings | (7,642,437) | (4,427,969) | (6,595,363) | |||
Total Equity | 8,967,684 | 10,029,644 | 9,327,246 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables | 442,800 | 415,514 | 436,858 | |||
Short term borrowings | 547,637 | 1,141,435 | 527,471 | |||
Total current liabilities | 990,437 | 1,556,949 | 964,329 | |||
TOTAL EQUITY AND LIABILITIES | 9,958,121 | 11,586,593 | 10,291,575 | |||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2013
Notes | 6 months to 31 December 2013 | 6 months to 31 December 2012 | ||
Unaudited £ | Unaudited £ | |||
Revenue | ||||
Management services | 63,991 | 38,650 | ||
Gain on sale of tenements | 973,702 | 148,616 | ||
1,037,693 | 187,266 | |||
Gain/(loss) on dilution of interest in associate | 25,948 | (166,698) | ||
Impairment of available for sale investment | (913,676) | (279,961) | ||
Impairment of exploration assets | (475,138) | (42,900) | ||
Exploration expenses | (30,082) | (38,217) | ||
Administrative expenses | (514,212) | (484,245) | ||
Share of losses of associates | (171,536) | (2,071,632) | ||
Finance costs, net | (18,650) | (102,235) | ||
Loss for the period before taxation from continuing operations | (1,059,653) | (2,998,622) | ||
Tax expense | - | (186,295) | ||
Loss for the period after taxation from continuing operations | (1,059,653) | (3,184,917) | ||
Earnings per share | ||||
Loss per share - basic | 3 | (0.09) pence | (0.41) pence | |
Loss per share - diluted | 3 | (0.09) pence | (0.41) pence |
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2013
6 months to 31 December 2013 | 6 months to 31 December 2012 | |||
Unaudited £ | Unaudited £ | |||
Loss for the period | (1,059,653) | (3,184,917) | ||
Revaluation of available for sale investments | 71,257 | (135,345) | ||
Deferred taxation on revaluation of available for sale investments | - | 48,133 | ||
Group's share of associates' other comprehensive income | 13,106 | 1,198,496 | ||
Unrealised foreign currency (loss)/gain arising upon retranslation of foreign operations |
(21,273) |
3,410 | ||
Total comprehensive loss for the period | (996,563) | (2,070,223) | ||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2013
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 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 |
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 |
Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Total other reserves | |
£ | £ | £ | £ | |
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) |
As at 30 June 2013 | (35,034) | (457,640) | 227,350 | (265,324) |
Changes in equity for 2013 | ||||
Total comprehensive (loss)/income for the period | 71,257 | 13,106 | (21,273) | 63,090 |
As at 31 December 2013 | 36,223 | (444,534) | 206,077 | (202,234) |
Consolidated statement of cash flows
for the period ended 31 December 2013
6 months to 31 December 2013 | 6 months to 31 December 2012 | |||
Unaudited £ | Unaudited £ | |||
Cash flows from operating activities | ||||
Loss before taxation | (1,059,653) | (2,998,622) | ||
Decrease in receivables | 112,854 | 182,229 | ||
Increase/(decrease) in payables | 5,942 | (391,775) | ||
Share of losses in associates | 171,536 | 2,071,632 | ||
Interest receivable | (8,740) | (3,548) | ||
Interest payable | 27,390 | 105,783 | ||
Impairment of exploration properties | 475,138 | 42,900 | ||
Share-based payments | 54,000 | 72,000 | ||
Currency adjustments | 96,667 | (24,297) | ||
Impairment of available for sale investment | 913,676 | 279,961 | ||
(Gain)/loss on dilution of interest in associates | (25,948) | 166,698 | ||
Gain on sale of tenements | (973,702) | (148,616) | ||
Depreciation | 13,301 | 10,890 | ||
Net cash flows from operations | (197,539) | (634,765) | ||
Cash flows from investing activities | ||||
Interest received | 8,740 | 3,548 | ||
Payments to acquire available for sale investments | (53,793) | (364,500) | ||
Exploration payments | (366,338) | (268,533) | ||
Payments to acquire property plant and equipment | (1,028) | (1,522) | ||
Net cash flows from investing activities | (412,419) | (631,007) | ||
Cash flows from financing activities | ||||
Proceeds from issue of shares | 583,000 | 1,821,432 | ||
Transaction costs of issue of shares | - | (39,463) | ||
Interest paid | (27,390) | (105,783) | ||
Proceeds of new borrowings | 250,000 | 446,848 | ||
Repayment of borrowings | (198,245) | (859,683) | ||
Net cash flows from financing activities | 607,365 | 1,263,351 | ||
Net decrease in cash and cash equivalents | (2,593) | (2,421) | ||
Cash and cash equivalents at the beginning of period | 12,761 | 17,849 | ||
Cash and cash equivalents at end of period | 10,168 | 15,428 | ||
Half-yearly report notes
for the period ended 31 December 2013
1 | Company and Group |
As at 30 June 2013 and 31 December 2013 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively.
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The Company will report again for the full year ending 30 June 2014.
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 2013 has been extracted from the statutory accounts of the Group for that year. Statutory accounts for the year ended 30 June 2013, 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 2013, which have been prepared in accordance with IFRS. |
3 | Loss per share | 6 months to 31 December 2013 | 6 months to 31 December 2012 | |
£ | £ |
These have been calculated on loss for the period after taxation of: |
(1,059,653) |
(3,184,917) | ||
Weighted average number of Ordinary shares of £0.001 in issue | 1,158,617,085 | 774,173,582 | ||
Loss per share - basic | (0.09) pence | (0.41) pence | ||
Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options |
1,158,617,085 |
774,173,582 | ||
Loss per share fully diluted | (0.09) pence | (0.41) 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: |
2013 | 2012 | |||
Number | Number | |||
Earnings per share denominator | 1,158,617,085 | 774,173,582 | ||
Weighted average number of exercisable share options | - | - | ||
Diluted earnings per share denominator | 1,158,617,085 | 774,173,582 |
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 14,673,913 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 2013, 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 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) | ||||||
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 | - | - | 148,616 | - | 38,650 | 187,266 | |
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 | (2,998,622) | ||||||
Taxation expense | (186,295) | ||||||
Loss for the period after taxation | (3,184,917) | ||||||
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 2013, 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 2013, 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 2013 | 1,106,049,883 | 1,106,050 | ||
Issued 13 August 2013 at 0.52 pence per share | 10,000,000 | 10,000 | ||
Issued 4 September 2013 at 0.548 pence per share | 32,299,270 | 32,299 | ||
Issued 27 September 2013 at 0.585 pence per share | 42,700,730 | 42,701 | ||
Issued 18 December 2013 at 0.52 pence per share | 20,000,000 | 20,000 | ||
Issued 23 December 2013 at 0.47 pence per share | 11,489,346 | 11,490 | ||
At 31 December 2013 | 1,222,539,229 | 1,222,540 | ||
6 | Capital Management |
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.
The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior period. |
7 Subsequent events
· On 27 January 2014, the Company announced that YA Global Master SPV, Ltd. ('YA Global') has converted £127,564 in unsecured Convertible Bonds 2014 into 33,783,627 ordinary shares of 0.1 pence each in the Company under the terms of the Convertible Bond Instrument entered into in November 2013, at a price of £0.0037759 per share.
· On 28 February 2014, the Company announced that YA Global has converted £125,000 in unsecured Convertible Bonds 2014 into 39,976,973 ordinary shares of 0.1 pence each in the Company under the terms of the Convertible Bond Instrument entered into in November 2013 at a price of £0.0031268 per share. Simultaneously £7,614 of interest and fees was converted into 2,435,154 shares of 0.1 pence each at a price of £0.0031268 per share.