SNRP.L Regulatory News (SNRP)

26 Nov 2007 07:00

Strategic Natural Resources PLC26 November 2007 Strategic Natural Resources plc ("STRATEGIC NATURAL RESOURCES") ("SNR" or the "Company"; Ticker: (SNRP)) Interim results for the 6 months ended 31st August 2007 ------------------------------------------------------- Chairman's Statement Chairman's interim report It gives me great pleasure to present to shareholders the first set of interimresults for Strategic Natural Resources PLC ("SNR") since it was admitted to AIMin August, 2007 and to report on the progress being made by your Company. Immediately prior to the flotation on 7th August 2007, 10 million Ordinaryshares in SNR were placed at 30p per share raising a total of £3 million for theCompany. At admission there were 65 million Ordinary shares in issue giving amarket capitalisation of £19.5 million at the placing price. The current shareprice is 32p per share which reflects the continuing confidence of ourinvestors. The Company, through its subsidiary Elitheni Coal (Pty.) Limited ("Elitheni"),is engaged in the exploration for and extraction of coal in the Eastern CapeProvince of South Africa. Elitheni's current prospecting area comprisesapproximately 9,000 hectares under current prospecting licences and a further16,000 hectares are subject to a prospecting rights application. Commercial production is expected to commence in approximately 12 months time.The primary market for our coal will be a state of the art, independentcoal-fired power plant of 500 MW which is planed for construction at the mouthof the Indwe mine. It is anticipated that this plant, which will be developed,owned and operated by IPSA Group PLC ("IPSA") with whom the Company has enteredinto a framework agreement for supply, will consume 2.2 million tonnes per annumof coal extracted from our mine. IPSA is quoted on the AIM Market and on theAlternative Exchange of the JSE Limited ("AltX"). Our coal will also be supplied to the industrial heat and power market, with aplanned IPSA development near East London (SA) for Da Gama Textiles, and to themetallurgical market, with a new ferromanganese smelter under development atCoega near Port Elizabeth (SA). Other markets that will be supplied from the Elitheni mine are the local brickmanufacturing industry and the domestic household market. The Company was admitted to AIM on the basis of a coal resource of some 15million tonnes. We have since continued our drilling programme, raising theresource to some 40 million tonnes, having drilled only 4 per cent. of the areaunder licence. Drilling is continuing, with four rigs currently on site. Furtherincreases of resource tonnage are expected to be announced over the comingmonths as the drilling rate is stepped up, as planned. It is a well publicised fact that there is an acute shortage of electrical powercapacity serving South Africa's domestic and industrial sectors and that theprice of the sector's primary energy source, coal, is rising rapidly (Eskom, theSouth African para-statal electric utility reported an increase in coal costs of30 per cent. in its 2006/7 financial year). Most of the existing large scalepower plants and coal mines are situated in the northern part of South Africaclose to Johannesburg and Pretoria. Much power is lost in the transmission linesbefore reaching the southern half of the country. Elitheni therefore has adistinct advantage in that its coal is located almost 900km to the south of thenorthern coal reef. Furthermore, its low volatile content make Elitheni coalwell suited for use in a clean coal fluidised bed boiler system. SNR has completed an application to South Africa's Department of Minerals andEnergy ("the DME") to begin mining 5.5 million tonnes of coal. I am delighted toannounce today that this application has now been accepted and extraction rightsare expected to be granted in 12 months time following the completion of anumber of steps required by the DME including an environmental impact study andthe conclusion of a placing of a total of 26% of Elitheni shares into the handsof Black Economic Empowerment ("BEE") shareholders. I am pleased to say that we are at an advanced stage in the negotiations forcompleting our BEE commitment. Your Company has a highly professional team in place which has considerablemanagerial, geological, coal extraction and marketing expertise. They haveworked and continue to work very hard and cohesively as a team over the testingtimes before actual mining commences on site with the resultant cash flow fromcoal sales. They are also seeking to broaden the acreage of the Elitheni minewith new prospecting licences on land adjacent to the existing 25,000 hectaresover which Elitheni currently holds licences or has submitted an application fora licence. I am confident that your Company will continue to progress anddevelop as more coal reserves are added. We look forward to an exciting six months ahead. Richard LathamChairman STRATEGIC NATURAL RESOURCES PLCCONDENSED CONSOLIDATED INCOME STATEMENTfor the half year ended 31 August 2007 Notes Unaudited Unaudited Audited 6 months 6 months 15 months to 31/8/07 to 31/8/06 to 28/2/07 £ £ £ Administrative expenses (271,435) (1,488) (44,264)Other expenses 3 (60,264) - -Operating loss (331,699) (1,488) (44,264) Finance income 17,025 1,427 4,335Finance expense - - (1,620)Loss before tax (314,674) (61) (41,549) Tax expense - - -Loss for period (314,674) (61) (41,549) Attributable to minority interest 4 - - -Attributable to shareholders ofStrategic Natural Resource PLC (314,674) (61) (41,549) Earnings per share (basic and diluted) 5 (0.57p) (0.07p) (0.27p) CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEfor the half year ended 31 August 2007 Notes Unaudited Unaudited Audited 6 months 6 months 15 months to 31/8/07 to 31/8/06 to 28/2/07 £ £ £ Profit for the period attributable toshareholders of Strategic NaturalResources PLC 6 (314,674) (61) (41,549)Exchange differences on translationof overseas operations 6 15,160 - -Total recognised income and expense for the period (299,514) (61) (41,549) STRATEGIC NATURAL RESOURCES PLCCONDENSED CONSOLIDATED BALANCE SHEETat 31 August 2007 Notes Unaudited Unaudited Audited 31/8/07 31/8/06 28/2/07 £ £ £ AssetsNon-current assetsIntangible assets 7 1,130,897 - 845,239Plant & Equipment 62,372 - 54,226 1,193,269 - 899,465 Current assetsTrade and other receivables 129,217 - 40,324Cash and cash equivalents 2,532,564 76,675 140,225 2,661,781 76,675 180,549 Total assets 3,855,050 76,675 1,080,014 Equity and liabilitiesEquity attributable to shareholders ofStrategic Natural Resources PLC:Share capital 8 650,000 80,000 500,000Share premium 3,378,329 - -Translation reserve 15,160 - -Retained earnings (361,554) (5,575) (46,880) 6 3,681,935 74,425 453,120Minority interest 4 - - - Total equity 3,681,935 74,425 453,120 Current liabilitiesTrade and other payables 173,115 2,250 104,592Borrowings - - 522,302 173,115 2,250 626,894 Total liabilities 173,115 2,250 626,894 Total equity and liabilities 3,855,050 76,675 1,080,014 STRATEGIC NATURAL RESOURCES PLCCONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS Unaudited Unaudited Audited 6 months 6 months 15 months to 31/8/07 to 31/8/06 to 28/2/07 £ £ £ Net cash flow from operating activitiesLoss for period (314,674) (61) (41,549)Depreciation 6,430 - 1,454Effect of foreign exchange rate changes 18,627 - -Change in working capital (20,371) 500 (16,657)Net cash (outflow)/inflow from operatingactivities (309,988) 439 (56,752) Investing activitiesAcquisition of subsidiary (net of cash) - - (2,275)Drilling and exploration costs (287,410) - (55,409)Additions to plant & machinery assets (16,291) - -Net cash outflow from investing activities (303,701) - (57,684) Financing activitiesNet (decrease) increase in loans (522,302) - 158,742Proceeds from share issue 3,528,330 - 20,000Net cash inflow from financing activities 3,006,028 - 178,742 Increase in cash andcash equivalents during period 2,392,339 439 64,306Cash and cash equivalents atbeginning of period 140,225 76,236 75,919Cash and cash equivalents atend of period 2,532,564 76,675 140,225 STRATEGIC NATURAL RESOURCES PLC Notes to the Interim Statementfor the six months ended 31 August 2007 1. Basis of preparation These condensed consolidated interim financial statements (the interim financialstatements) have been prepared in accordance with the accounting policies setout below which are based on the recognition and measurement principles of IFRSin issue as adopted by the European Union (EU)and in accordance with thehistorical cost convention. These statements are unaudited and do not constituteStatutory Accounts within the meaning of Section 240 of the Companies Act 1985.Statutory Accounts for the period ended 28 February 2007 have been filed withthe Registrar of Companies. The auditors have made a report on those StatutoryAccounts under Section 235 of the Companies Act 1985. The auditors' reports wereunqualified and did not contain a statement under Section 237 (2) of theCompanies Act 1985. 2. Accounting policies This interim statement has been prepared in accordance with the Group's IFRSaccounting policies. These policies are set out in the Group's FinancialStatements for the period ended 28 February 2007. The provisions ofInternational Accounting Standards (IAS) 34 have not been adopted as they arenot applicable to this announcement. 3. Other Expenses On 7 August 2007 the Company's shares were admitted to the AIM market of theLondon Stock Exchange. Other expenses represent costs associated with thelisting. 4. Minority Interest The Company owns, through an intermediary holding company, 90% of Elitheni Coal(Pty.) Ltd. 100% of the losses have been attributed to the Company. 5. Earnings per share Unaudited Unaudited Audited Basic and diluted 31/8/07 31/8/06 28/2/07 Loss attributable to equity holdersof the Company £314,674 £61 £41,549Weighted average number of shares 55,625,000 80,000 14,845,361 Basic and Diluted EPS (0.57p) (0.07p) (0.27p) 6. Consolidated statement of changes in equity Unaudited Unaudited Audited 31/8/07 31/8/06 28/2/07 £ £ £ Opening shareholders' funds 453,120 74,486 74,669Exchange translation 15,160 - -Issue of shares (net of costs) 3,528,329 - 420,000Loss for the period (314,674) (61) (41,549)Closing equity shareholders' funds 3,681,935 74,425 453,120 7. Intangible assets Intangible assets represent the fair value of the coal mining licence held byElitheni Coal (Pty.) Ltd and the cost of the drilling and the development workto 31 August 2007. 8. Share Capital Unaudited Unaudited Audited 31/8/07 31/8/06 28/2/07 £ £ £ Authorised100,000,000 ordinary shares of 1p each 1,000,000 100,000 1,000,000(31/8/06 - 100,000 ordinary shares of £1 each) 1,000,000 100,000 1,000,000 Movement in share capital during the periodAllotted, called up and fully paid Number Share Share Capital premium On incorporation 2 2 -Allotment for cash on 7 January 2005 at par 79,998 79,998 -Balance at 31 August 2006 80,000 80,000 -Allotment for cash on 31 October 2006 at par 20,000 20,000 -Allotment on 13 December 2006 at par 400,000 400,000 -Sub-division of each £1 share into 100 shares of 1p on 13 December 2006 49,500,000 - -Balance at 28 February 2007 50,000,000 500,000 -Allotment for cash on 7 March 2007 at 20p 3,750,000 37,500 712,500Allotment for cash on 18 May 2007 at 20p 1,250,000 12,500 237,500Allotment for cash on 7 August 2007 at 30p 10,000,000 100,000 2,900,000Share issue costs written-off - - (471,671)Balance at 31 August 65,000,000 650,000 3,378,329 9. The Board of Directors approved this interim statement on 20 November 2007. This interim statement has not been audited. 10. Copies of this statement are being sent to all shareholders. Copies may beobtained from the company's registered office, 5th Floor, Prince Consort House,Albert Embankment, London SE1 7TJ. For further information please contact: Jeremy P. Metcalfe Chief Executive Strategic Natural Resources plc Tel: +44 20 7793 5616 Allan Piper First City Financial Public Relations Tel: +44 20 7242 2666 Rod Venables / Cecil Jordaan HB Corporate Tel: +44 20 7510 8600 STRATEGIC NATURAL RESOURCES PLC is an AIM listed British company established todevelop, own and manage natural resource extraction enterprises in southernAfrica. This information is provided by RNS The company news service from the London Stock Exchange