31 Mar 2016 07:00
31 March 2016
|
Regency Mines Plc ("Regency" or the "Company"), the natural resources exploration and mineral investing company with interests in oil and base metal exploration, announces its unaudited half-yearly results for the six months ended 31 December 2015. |
Chairman's statement |
The Company presents its interim report for the six months to 31st December 2015.
The strategic shift referred to in Regency's annual report has continued to gain momentum. It was then stated that a reduction of over 60% in staffing costs and 50% in total overhead costs was expected between August 2015 and February 2016. This expectation was fulfilled and further savings made, as the Company has returned to an emphasis on the transactional and mining finance activities that formed part of its purpose at listing in 2005. Exploration costs have been minimised, though exploration assets have been retained where these held valuable resource positions.
In December 2015 a capital reorganisation was carried out and reduced the number of ordinary shares outstanding by consolidating every 20 old shares into one new share. The indications so far are that the exercise may be succeeding in its purpose of reducing trading spreads and increasing tradability of the shares.
In the latter part of 2015, the Company disposed of listed holdings in Alba Mineral Resources plc (AIM:ALBA) and Ram Resources Ltd (ASX:RMR)("Ram"), though it retains a conversion interest in a further AUD200,000 of Ram stock. The Company also holds an interest in an advanced graphite project in Australia that is due to crystallise by May 2016 into either shares in an Australian listed company or AUD200,000 cash.
As the Company has announced, plans have been made and co-operation established with two groups in the U.S. for potential low cost oil production in West Virginia and Texas, but Regency is taking a cautious approach to progressing these while watching the changing oil price and economics in order to ensure a satisfactory return on any investment, and is at the same time vetting other prospects.
In the U.K. the Company re-invested in February 2016 in Horse Hill Development Limited ("HHDL"), in which it had previously been an investor at the time of the HH-1 well in 2014. Flow tests on the three horizons shown to be promising by the 2014 drilling was carried out in early 2016. So soon as the first flow results from the lowest of the three horizons was released, Regency took up an offer to reacquire a 5% interest in HHDL, on broadly the same terms on which it had sold. The rationale was that these results showed a volume of natural flow that far exceeded expectations and changed significantly in our view both the risk-reward equation and the prospect of relatively near-term production. The boundary between the unknown and the known changed enough to make this a different investment.
The HH-1 well appears to have been the best new discovery onshore UK at least since the Wytch Farm discovery. The forthcoming results of independent studies will give more perspective on the scale, but this is likely to be a developing story that will take time for its full potential to be understood. A large part of the likely cost outflows have already been incurred.
A recovery has been seen in base metal prices this year, but the Company's exposure to nickel, a metal volatile in price but which remains relatively low-priced, means that it is too early to expect that to feed through to greater interest in the Company's large Papua New Guinea resource. The investment in private technology company Direct Nickel Ltd continues to face challenges but we hope to play a positive rôle.
The Company continues to see potential in its lightly explored 555 sq km Motzfeldt project in southern Greenland, where it has already what is thought to be the largest known resource of tantalum, with 340m tons at 120 ppm, besides other mineral potential.
However, with the focus on cash flow this year, it is the onshore oil opportunities and corporate deal-making that are likely to absorb most management attention. Regency acted rapidly in February when the Horse Hill opportunity arose, and expects to see other opportunities arise in the course of 2016.
Andrew Bell
Chairman and CEO
29 March 2016
Consolidated statement of financial position
as at 31 December 2015
Notes | 31 December 2015 | 31 December 2014 | 30 June 2015 | |||
Unaudited £ | Unaudited £ | Audited £ | ||||
ASSETS | ||||||
Non-current assets | ||||||
Property plant and equipment | 7,470 | 12,943 | 8,828 | |||
Investments in associates and joint ventures | 1,288,551 | 2,164,183 | 1,660,854 | |||
Available for sale financial assets | 767,117 | 4,686,652 | 995,011 | |||
Exploration assets | 868,476 | 1,259,823 | 829,151 | |||
Total non-current assets | 2,931,614 | 8,123,601 | 3,493,844 | |||
Current assets | ||||||
Cash and cash equivalents | 36,404 | 7,243 | 3,565 | |||
Trade and other receivables | 1,804,577 | 1,778,765 | 1,830,683 | |||
Total current assets | 1,840,981 | 1,786,008 | 1,834,248 | |||
TOTAL ASSETS | 4,772,595 | 9,909,609 | 5,328,092 | |||
EQUITY AND LIABILITIES | ||||||
Equity attributable to owners of the parent | ||||||
Called up share capital | 5 | 1,859,770 | 1,788,919 | 1,815,326 | ||
Share premium account | 16,845,816 | 16,539,232 | 16,700,261 | |||
Other reserves | (150,645) | (327,982) | 60,140 | |||
Retained earnings | (14,241,781) | (8,853,699) | (13,936,310) | |||
Total Equity | 4,313,160 | 9,146,470 | 4,639,417 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables | 204,063 | 427,323 | 393,685 | |||
Short term borrowings | 255,372 | 335,816 | 294,990 | |||
Total current liabilities | 459,435 | 763,139 | 688,675 | |||
TOTAL EQUITY AND LIABILITIES | 4,772,595 | 9,909,609 | 5,328,092 | |||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2015
Notes | 6 months to 31 December 2015 | 6 months to 31 December 2014 | ||
Unaudited £ | Unaudited £ | |||
Revenue | ||||
Management services | 910 | 15,255 | ||
(Loss)/gain on sale of tenements | (71,650) | - | ||
(70,740) | 15,255 | |||
(Loss)/gain on dilution of interest in associate | (84,014) | (30,585) | ||
Loss on sale of investments | (12,210) | (50,150) | ||
Impairment of exploration assets | - | (103,971) | ||
Exploration expenses | (587) | 3,106 | ||
Administrative expenses | (264,911) | (532,042) | ||
Share of losses of associates | 126,990 | (104,505) | ||
Finance costs, net | - | (3,239) | ||
Loss for the period before taxation from continuing operations | (305,472) | (806,131) | ||
Tax expense | - | - | ||
Loss for the period after taxation from continuing operations | (305,472) | (806,131) | ||
Earnings per share | ||||
Loss per share - basic | 3 | (0.01) pence | (0.05) pence | |
Loss per share - diluted | 3 | (0.01) pence | (0.05) pence |
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2015
6 months to 31 December 2015 | 6 months to 31 December 2014 | |||
Unaudited £ | Unaudited £ | |||
Loss for the period | (305,472) | (806,131) | ||
Revaluation of available for sale investments | (68,615) | 30,821 | ||
Group's share of associates' other comprehensive (expense)/ income | (154) | (9,971) | ||
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations |
(142,016) |
21,305 | ||
Total comprehensive loss for the period | (516,257)) | (763,976) | ||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2015
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 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 | 1788,919 | 16,539,232 | (8,853,699) | - | (327,982) | 9,146,470 |
As at 30 June 2015 | 1,815,326 | 16,700,261 | (13,936,309) | - | 60,140 | 4,639,417 |
Changes in equity for 2015 | ||||||
Total comprehensive (loss)/income for the period |
- |
- |
(305,472) |
- |
(210,785) |
(516,257) |
Transactions with owners | ||||||
Issue of shares | 44,444 | 155,556 | - | - | - | 200,000 |
Share issue and fundraising costs |
- |
(10,000) |
- |
- |
- |
(10,000) |
Share-based payment transfer | - | - | - | - | - | - |
Total Transactions with owners |
44,444 |
145,556 |
- |
- |
- |
190,000 |
As at 31 December 2015 | 1,859,770 | 16,845,816 | (14,241,781) | - | (150,645) | 4,313,160 |
Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Total other reserves | |
£ | £ | £ | £ | |
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 |
As at 31 December 2014 | (281,113) | (413,960) | 367,091 | (327,982) |
As at 30 June 2015 | 82,707 | (416,803) | 394,236 | 60,140 |
Changes in equity for 2015 | ||||
Total comprehensive income/(loss) for the period | (51,564) | 12,660 | (171,881) | (210,785) |
As at 31 December 2015 | 31,143 | (404,143) | 222,355 | (150,645) |
Consolidated statement of cash flows
for the period ended 31 December 2015
6 months to 31 December 2015 | 6 months to 31 December 2014 | |||
Unaudited £ | Unaudited £ | |||
Cash flows from operating activities | ||||
Loss before taxation | (790,586) | (806,131) | ||
(Increase)/decrease in receivables | 103,618 | (119,161) | ||
(Decrease)/increase in payables | (189,625) | (76,104) | ||
Share of losses in associates | (127,026) | 104,505 | ||
Interest receivable | - | (8,412) | ||
Interest payable | - | 11,651 | ||
Impairment of exploration properties | - | 103,971 | ||
Currency adjustments | 206,645 | 121,334 | ||
Loss/(Gain) on dilution of interest in associates | 569,164 | 30,585 | ||
Loss on sale of available for sale investments | 71,650 | 50,150 | ||
Gain on sale of tenements | 12,209 | - | ||
Depreciation | 3,700 | 9,618 | ||
Net cash flows from operations | (140,251) | (577,994) | ||
Cash flows from investing activities | ||||
Interest received | - | 8,412 | ||
Proceeds from sale of investments | 61,807 | 205,852 | ||
Payments to acquire associate company investments | - | (75,000) | ||
Payments to acquire available for sale investments | - | (300,000) | ||
Exploration payments | (36,756) | (207,378) | ||
Payments to acquire property plant and equipment | (2,343) | - | ||
Net cash flows from investing activities | 22,709 | (368,114) | ||
Cash flows from financing activities | ||||
Proceeds from issue of shares | 200,000 | 934,619 | ||
Transaction costs of issue of shares | (10,000) | (26,355) | ||
Interest paid | - | (11,651) | ||
Proceeds of new borrowings | - | 209,787 | ||
Repayment of borrowings | (39,619) | (420,374) | ||
Net cash flows from financing activities | 150,381 | 686,026 | ||
Net decrease in cash and cash equivalents | 32,839 | (260,082) | ||
Cash and cash equivalents at the beginning of period | 3,565 | 267,325 | ||
Cash and cash equivalents at end of period | 36,404 | 7,243 | ||
Half-yearly report notes
for the period ended 31 December 2015
1 | Company and Group |
As at 30 June 2015 and 31 December 2015 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 2016.
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 2015 has been extracted from the statutory accounts of the Group for that year. Statutory accounts for the year ended 30 June 2015, 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 2015, which have been prepared in accordance with IFRS. |
3 | Loss per share | 6 months to 31 December 2015 | 6 months to 31 December 2014 | |
£ | £ |
These have been calculated on loss for the period after taxation of: |
(305,472) |
(806,131) | ||
Weighted average number of Ordinary shares of £0.001 in issue | 2,376,002,022 | 1,630,200,524 | ||
Loss per share - basic | (0.01) pence | (0.05) pence | ||
Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options |
2,376,002,022 |
1,630,200,524 | ||
Loss per share fully diluted | (0.01) pence | (0.05) 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: |
2015 | 2014 | |||
Number | Number | |||
Earnings per share denominator | 2,376,002,022 | 1,630,200,524 | ||
Weighted average number of exercisable share options | - | - | ||
Diluted earnings per share denominator | 2,376,002,022 | 1,630,200,524 |
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 3,201,099 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 2015, 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 2015 | £ | £ | £ | £ | £ | £ | |
Management services | - | - | - | - | 910 | 910 | |
Revenue | - | - | (71,650) | - | - | (71,650) | |
Result | |||||||
Segment results | 31,488 | (12,210) | 4,059 | 11,488 | (269,557) | (234,732) | |
Loss before tax and finance costs | |||||||
Interest receivable | - | ||||||
Interest payable | - | ||||||
Loss for the period before taxation | (305,472) | ||||||
Taxation expense | - | ||||||
Loss for the period after taxation | (305,472) | ||||||
| |||||||
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 | |
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) |
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 2015, 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 2015 | 2,052,990,373 | 1,815,326 | ||
Issued 20 August 2015 at 0.45 pence per share | 444,444,600 | 44,444 | ||
At 31 December 2015 | 2,497,434,973 | 1,859,770 | ||
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 11 January 2016, the company issued 2,285,712 new ordinary shares of 0.01p each to eligible employees under the terms of the company's share investment plan (SIP). The shares are held by the SIP Trustees and cannot be released to participants until five years after award except in specific circumstances.
· On 29 January 2016, the company granted 7,060,000 employee options exercisable into new ordinary shares of 0.01p each at 0.45p per share for a period of six years, and vesting in four tranches, one of 1,800,000 immediately, and the other three after 6, 12 and 18 months respectively and subject to performance conditions. The grants other than those to a non-executive director were made under the company's Enterprise Management Incentive scheme.
· On 23 February 2016, the company announced the acquisition from Angus Energy plc of a 5% interest in Horse Hill Development Ltd for a consideration of £400,000, part of which was satisfied by the issue of 54,236,919 new ordinary shares of 0.01p each, with the balance in cash. In addition, Angus Energy plc were issued with 17,898,183 options exercisable within 18 months from the date of issue into new ordinary shares of 0.01p in the company at a price of 0.39p per share.
· On 9 March 2016, the company raised a gross £400,000 by placing 66,666,667 new ordinary shares of 0.01p with investors at a price of 0.6p per share. One warrant was issued for each three shares placed, exercisable on 1 July 2016, 1 November 2016, or 1 February 2017, and at prices between 0.78p and 1.2p, into new ordinary shares of 0.01p.
For further information, please contact:
Andrew Bell 0207 747 9960 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.