Last checked at 31 Mar 2010 07:00
Red Rock Resources plc
Half-yearly report - six months ended 31 December 2009
31 March 2010
Red Rock Resources plc ("Red Rock" or the "Company") the mineral exploration and development company focused on iron ore and manganese, uranium and rare earths, and gold, and operating in Australia and East Africa, announces its unaudited half-yearly results for the six months ended 31 December 2009.
Chairman's statement
The period under review saw both recovery from the depressed conditions earlier in 2009, for which we claim no credit, and other developments which represented the gradual maturing of the Company's strategies. The sale of manganese assets to Jupiter Mines Ltd (ASX: JMS)("Jupiter") was completed, investment was made in the Migori gold belt in Kenya, and other purchases and sales of exploration interests occurred. Since 31 December there has been the announcement of a major and transformative transaction at Jupiter, and the relisting of Resource Star Ltd (ASX: RSL)("RSL") on the Australian Stock Exchange.
The disclosed interim pretax profit of £3,223,698 (2008 interim loss of £1,958,017) was sufficient to eliminate the accumulated deficit and, provided there are no significant setbacks between now and the 30 June financial year end, should allow the Company to declare its first dividend in 2010.
Total comprehensive income for the interim financial period was £2,980,046 (2008 loss of £1,958,017), which follows a £243,860 income for the year to 30 June 2009; this heading includes surplus on revaluation of available for sale investments including the Company's holding in Jupiter.
We prefer to adopt a cautious treatment at the interim stage, and have written down the value of those Jupiter shares still subject to escrow, and provided for a full tax charge. In respect of the 54,155,579 Jupiter shares issued to Red Rock during the period, which are subject to escrow until August 2010, the reference price for computing Profit in the Income Statement was based on that at the time of issue, with appreciation since issue taken to revaluation of available for sale investments in the Statement of Financial Position.
Since the end of the period covered by the interim results, the price of Jupiter shares, of which the Company held 93,304,165 at 31 December 2009, has risen from AUD 0.195c to AUD 0.285.
Total net equity rose 262.5% year on year to £9,531,890 (2008 £2,629,750), and rose 77.4% from the 30 June 2009 figure of £5,371,990, due once again to the rise in available for sale financial assets, which was only partially offset by the fall in investments in associates.
Since 31 December Jupiter has announced plans to acquire a 49.9% interest in the Tshipi manganese project in South Africa, and we expect that completion of this acquisition will dilute our holding in Jupiter from 25% to around 6%. We support the transaction, which has the potential to make Jupiter one of the world's dominant manganese producers, and though it is the first substantial transaction by Jupiter, we believe and hope that it will not be the last.
Our expectation is that manganese will see strong long term demand and that pricing short term is likely to follow that of other steel inputs like iron ore and coal.
Also since the end of the period, Red Rock has seen the relisting of its 24% owned associate RSL on the Australian Stock Exchange. There continue to be positive developments at our rare earth joint venture at Machinga in Malawi, and since relisting RSL has announced a farm-in to an advanced uranium exploration project in Northern Malawi, where a Resource statement is now being prepared, and good historic results from the Ilomba uranium/niobium occurrence in the north of Malawi. Exploration is soon to start on RSL's Northern territory tenements, one of which is close to Thundelarra Exploration's recent Thunderball discovery and in similar geology. We expect a continuing positive news flow from RSL.
Our small manganese project in Zambia has been adversely affected by illegal activities, and we are quietly and persistently pursuing our remedies, with little doubt of success.
In late 2009 the Company farmed in to 68km of the Migori greenstone belt , with a NI 43-101 Indicated Resource of 1,172,000 ounces of gold. Exploration has had a promising start in this underexplored area of the Tanzanian craton, and the Migori belt's evident gold endowment demonstrates its potential to host resources similar to those at Geita, North Mara, or other deposits in the Tanzanian greenstones. Red Rock will focus its exploration efforts in this area in the immediate future.
We continue to be presented with potentially interesting new projects and challenges, but are focussed in the coming period on protecting the growth in shareholder value we believe will come from the maturing of the current portfolio, so only opportunities that offer exceptional promise and are a strategic fit are being considered.
Andrew Bell
Executive Chairman
31 March 2010
Enquiries:
| Red Rock Resources plc |
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| Andrew Bell, Chairman | 0207 402 4580/07766 474849 |
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| John Watkins | 07768 512404 |
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| Nominated Adviser |
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| Religare Capital Markets |
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| Peter Trevelyan-Clark/Ben Jeynes | 020 7444 0800 |
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| Broker |
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| Simple Investments Ltd |
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| Nick Emerson, Renato Rufus | 01483 413500 |
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| Public Relations |
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| Lothbury Financial Limited |
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| Ron Marshman | 020 7011 9411 |
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Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.
Income statement
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| Group 6 months to 31 December 2009 | Group 6 months to 31 December 2008 | Group Year to 30 June 2009 | |
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| Unaudited £ | Unaudited £ | Audited £ | |
| Revenue Sales of investments Sales of exploration properties Cost of sales Management services
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634,666 3,627,901 (693,236) 1,171 |
64,869 - (107,557) 630 |
64,869 - (107,557) 3,285 | |
| Gross profit/(loss)
Exploration expenses | 3,570,502
(57,754) | (42,058)
(159,099) | (39,403)
(160,087) | |
| Administrative expenses Currency gain/(loss)
| (290,538) 3,570 | (217,120) (319) | (550,563) (2,543) | |
| Operating profit/(loss)
| 3,225,780 | (418,596) | (752,596) | |
| Share of operating loss in associates Deficit on revaluation of available-for-sale investments Interest receivable Interest payable
| - - 6,182 (8,264) | (55,433) (1,480,788) 1,513 (4,713) | (170,545) - 3,618 (9,002) | |
| Profit/(loss) on ordinary activities before taxation
| 3,223,698 | (1,958,017) | (928,525) | |
| Taxation
| (907,018) | - | - | |
| Profit/(loss) after taxation
| 2,316,680 | (1,958,017) | (928,525) | |
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| Earnings/(loss) per share - see note 3 Basic Diluted
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0.48 pence 0.45 pence
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(0.56) pence (0.55) pence
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(0.24) pence (0.24) pence
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All operations are considered to be continuing.
Statement of comprehensive income
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| Group 6 months to 31 December 2009 | Group 6 months to 31 December 2008 | Group Year to 30 June 2009 |
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| Unaudited £ | Unaudited £ | Audited £
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| Surplus on revaluation of available for sale investment |
| 871,256 | - | 1,165,635 |
| Deferred taxation on revaluation of available -for-sale investments |
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(242,714) |
- |
- |
| Unrealised foreign currency gain |
| 34,824 | - | 6,750 |
| Profit/(loss) for the financial period |
| 2,316,680 | (1,958,017) | (928,525)
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| Total comprehensive income for the financial period |
| 2,980,046 | (1,958,017) | 243,860 |
Statement of financial position
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| Group 31 December 2009 | Group 31 December 2008 | Group 30 June 2009 |
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| Unaudited £ | Unaudited £ | Audited £
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| Assets |
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| Current assets Cash and cash equivalents Trade and other receivables Investments in associates Available for sale financial assets Exploration properties
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231,019 384,486 536,220 9,235,542 685,341 |
20,078 410,413 903,401 820,913 636,372
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49,439 274,542 1,044,853 3,676,909 506,230 |
| Total current assets
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| 11,072,608 | 2,791,177 | 5,551,973 |
| Total assets |
| 11,702,608
| 2,791,177 | 5,551,973 |
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Equity and liabilities Current liabilities Trade and other payables Deferred taxation
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390,986 1,149,732
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161,427 -
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179,983 -
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| Total liabilities
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| 1,540,718 | 161,427 | 179,983 |
| Equity Called up share capital Share premium account Other reserves Retained earnings
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555,818 5,942,529 2,228,339 805,204
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405,481 4,425,336 82,581 (2,283,648) |
464,843 4,853,650 1,564,973 (1,511,476) |
| Total equity
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| 9,531,890 | 2,629,750 | 5,371,990 |
| Total equity and liabilities
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| 11,072,608 | 2,791,177 | 5,551,973 |
Statement of cash flows
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| Group 6 months to 31 December 2009 | Group 6 months to 31 December 2008 | Group Year to 30 June 2009 |
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| Unaudited £ | Unaudited £ | Audited £ |
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| Cash flows from operating activities |
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| Operating profit/(loss) (Increase)/decrease in receivables Increase/(decrease) in payables Profit on sale of exploration properties Exploration property costs Impairment of exploration properties Payments to acquire available for sale investments Cost of available for sale investments disposed of Costs of exploration properties disposed of Currency adjustments Share based payments
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| 3,225,780 (113,834) 211,003 (3,487,479) - - - - - 34,825 - | (418,596) (16,215) (251,868) - (147,665) 79,198 (53,333) 107,557 - - - | (752,596) 119,656 (233,312) - (184,445) 24,154 - - 221,964 8,637 52,687
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| Cash outflow generated from operations
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| (129,705) | (700,922) | (743,255) |
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Cash flows from investing activities Interest received Interest paid Proceeds from sale of subsidiary Proceeds from sale of associate Available for sale investments disposed of Payments to acquire associate company investments Payments to acquire available for sale investments Payments to acquire exploration properties
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6,182 (8,264) - 508,633 - - (1,059,477) (315,643) |
1,513 (4,712) - - - - - - |
3,618 (9,002) 482 - 107,557 (198,762) (309,079) - |
| Net cash flows used in investing activities
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| (868,569) | (3,199) | (405,186) |
| Acquisitions and disposals Cash disposed of on sale of subsidiary |
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(2,169) |
| Net cash flow from acquisitions and disposals |
| - | - | (2,169) |
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Cash flows from financing activities Proceeds from issue of shares Transaction costs of issue of shares
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1,299,089 (119,235) |
660,000 (23,400) |
1,147,725 (35,275) |
| Net cash flows from financing activities
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| 1,179,854 | 636,600 | 1,112,450 |
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Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period
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181,580
49,439 |
(67,521)
87,599 |
(38,160)
87,599 |
| Cash and cash equivalents at the end of period
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| 231,019 | 20,078 | 49,439 |
Consolidated statement of changes in equity
For the period ended 31 December 2009
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| Share capital | Share premium
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| £ | £ | £ | £ | £ |
| At 30 June 2008
| 305,481 | 3,888,736 | (582,951) | 339,901 | 3,951,167 |
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Issue of shares Share issue and fundraising costs Share based payments Total comprehensive income for the financial period
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159,362
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1,085,063
(120,149) -
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(928,525) |
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- 52,687
1,172,385 |
1,244,425
(120,149) 52,687
243,860 |
| At 30 June 2009
| 464,843 | 4,853,650 | (1,511,476) | 1,564,973 | 5,371,990 |
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Issue of shares Share issue and fundraising costs Total comprehensive income for the financial period
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90,975
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1,208,114
(119,235)
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2,316,680 |
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663,366 |
1,299,089
(119,235)
2,980,046 |
| At 31 December 2009 | 555,818 | 5,942,529 | 805,204 | 2,228,339 | 9,531,890 |
Half-yearly report notes
1. Company and Group
As at 30 June 2009 and 31 December 2009 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 2010.
The financial information contained in these interim financial statements does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2009 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2009, upon which the auditors have given an unqualified audit report and 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 policies
Accounting policies adopted under IFRS
These interim financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").
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 2009, which have been prepared in accordance with IFRSs
3. Earnings per share
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| 6 months to 31 December 2009 | 6 months to 31 December 2008 | Year to 30 June 2009 |
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| Unaudited £ | Unaudited £ | Audited £ |
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| These have been calculated on earnings/(loss) of:
| 2,316,680 | (1,958,017) | (928,525) | |
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Weighted average number of Ordinary Shares of £0.001 in issue:
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486,412,093 |
349,763,442
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389,691,824 | |
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Basic earnings/(loss) per share: |
0.48 pence |
(0.56) pence |
(0.24) pence | |
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Weighted average number of Ordinary Shares of £0.001 in issue inclusive of outstanding options:
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516,412,093 |
354,763,442
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401,678,125 | |
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Diluted earnings/(loss) per share: |
0.45 pence |
(0.55) pence |
(0.24) pence | |
4. Segmental information
The Group's primary business segment is mineral exploration. The Group operates within two principal geographical segments, the United Kingdom and Australia. In addition, there are limited operations in Zambia.
The following tables present revenue and loss information and certain asset and liability information by geographical segments:
For the six month period ended 31 December 2009
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| United Kingdom
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| £ | £ | £ | £ |
| Revenue Total segment revenue
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4,262,567 |
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4,262,567 |
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Total consolidated revenue
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4,262,567 _______ |
| Result Segment results
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3,241,431 |
(15,651) |
- |
3,225,780 |
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Profit/(loss before tax and finance costs
Interest receivable Interest payable
Profit/(loss) before taxation Taxation expense
Net profit for the period
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3,225,780 _______ 6,182 (8,264) _______ 3,223,698 (907,018) _______ 2,316,680 _______ |
As at 31 December 2009
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| United Kingdom
| Australia | Africa
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| £ | £ | £ | £ |
| Assets and liabilities Segment assets
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11,004,495 |
68,113 |
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11,072,608 |
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Total assets
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11,072,608 _______ |
| Segment liabilities
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(1,536,425) |
(4,293) |
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(1,540,718) |
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Total liabilities
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(1,540,718) _______ |
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For the year ended 30 June 2009
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| United Kingdom
| Australia | Africa
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| £ | £ | £ | £ |
| Revenue Total segment revenue
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3,285 |
64,869 |
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68,155 |
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Total consolidated revenue
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68,155 _______ |
| Result Segment results
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(667,250) |
(231,737) |
(24,154) |
(923,141) |
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Loss before tax and finance costs
Interest receivable Interest payable
Loss before taxation Taxation expense
Net loss for the year
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(923,141) _______ 3,618 (9,002) _______ (928,525) - _______ (928,525) _______ |
As at 30 June 2009
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| United Kingdom
| Australia | Africa
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| £ | £ | £ | £ |
| Assets and liabilities Segment assets
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321,525 |
5,175,630 |
54,818 |
5,551,973 |
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Total assets
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5,551,973 _______ |
| Segment liabilities
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(177,692) |
(2,291) |
- |
179,983 |
| Total liabilities
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179,983 _______ |
| Other segment information Capital expenditure
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- |
105,242 |
79,203 |
184,445 |
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184,445 _______ |
Copies of the half-yearly report are available free of charge by application in writing to the Company Secretary at the Company's business office, 115 Eastbourne Mews, Paddington, London W2 6LQ, on the Company's website (www.rrrplc.com), or by email to admin@rrrplc.com.