28 Sep 2012 07:00
28 September 2012
Zoltav Resources Inc.
(the 'Company' or 'ZOL' and together with its subsidiaries the 'Group')
Interim Results for the six months ended 30 June 2012
Highlights
• The Company is actively reviewing a number of significant possible investment opportunities in Russia.
• Sale of securities in Lukoil OAO for US$165,000, Rosneft OJSC for US$272,000 and Gazprom for US$260,000 in January 2012.
Summary Financials
• Income: 30 June 2012: US$35,000 (30 June 2011: US$ 37,000) 31 December 2011: US$77,000)
• Loss Attributable to Shareholders 30 June 2012: US$ 788,000 (Loss Attributable to Shareholders 30 June 2011: US$757,000, 31 December 2011: US$2,340,000)
• Shareholder Equity 30 June 2012: US$ 637,000 (30 June 2011: US$2,513,000, 31 December 2011: US$ 1,425,000)
• Loss per Share (basic) 30 June 2012: US$ 0.002, 30 June 2011: US$0.002, 31 December 2011: US$ 0.0063).
Chairman's statement
Operational review and outlook
The first six months of the year have seen the board put considerable focus into identifying an attractive investment in the FSU. With the Presidential elections in Russia in March and the fall in commodity prices in the first half of the year, these uncertainties led to price expectation continuing to be above the levels we felt were appropriate. However, the Company has started to see a number of interesting opportunities over the past three months, and is actively evaluating a small number of these.
On 27 July, the Company announced that it had accepted a binding and irrevocable offer of an unsecured, convertible loan of £500,000 from ARA Capital Limited, our largest shareholder. The agreement for the convertible loan has now been executed, as announced on 25 September
Financial results
The period up to 30 June 2012 saw an operating loss of US$788,000 (2011: $757,000). During the period, the Company chose to realise investment gains on the investments we had made in Rosneft, Gazprom and Lukoil, prior to the Presidential election in Russia. We have also taken further losses on the investments that were made by the previous board. Unfortunately our investment in Evergreen Energy has been written down following its filing for bankruptcy in January, and we also saw a significant fall in the value of our holding in Viridas PLC.
Symon Drake-Brockman
Executive Chairman
Enquiries:
Zoltav Resources Inc. Tel. +41 (0)22 338 2774
Symon Drake-Brockman, Executive Chairman
Huw Richardson, Company Secretary
Shore Capital Tel. +44 (0)20 7408 4090
Pascal Keane / Toby Gibbs - Corporate Finance
Jerry Keen - Corporate Broking
Condensed Statement of Comprehensive Income | ||||
Six month period ended 30 June | Six month period ended 30 June | Year ended 31 December | ||
2012 | 2011 | 2011 | ||
$000 | $000 | $000 | ||
Note | Unaudited | Unaudited | Audited | |
Continuing operations | ||||
Unrealised (loss)/gain on financial assets at fair value through profit or loss | (163) | 93 | 51 | |
Realised gains on disposal of financial assets at fair value through profit or loss | 35 | - | - | |
Other income | - | 37 | 77 | |
Administrative expenses | (660) | (775) | (2,417) | |
Other operating expenses | - | (112) | (51) | |
Operating loss | (788) | (757) | (2,340) | |
Financial costs | - | - | - | |
Loss before taxation | (788) | (757) | (2,340) | |
Taxation | - | - | - | |
Loss and total comprehensive loss for the period/year | (788) | (757) | (2,340) | |
Basic loss per share (US cents) | 4 | (0.21) | (0.20) | (0.63) |
Diluted loss per share (US cents) | 4 | (0.20) | (0.20) | (0.63) |
Condensed Statement of Financial Position | 30 June | 31 December | |
2012 | 2011 | ||
$000 | $000 | ||
Note | Unaudited | Audited | |
Non-current assets | |||
Property, plant and equipment | - | - | |
Total non-current assets | - | - | |
Current assets | |||
Trade and other receivables | 30 | 50 | |
Financial assets at fair value through profit or loss | 5 | 341 | 1,166 |
Cash and cash equivalents | 454 | 339 | |
Total current assets | 825 | 1,555 | |
Total assets | 825 | 1,555 | |
Current liabilities | |||
Trade and other payables | 188 | 130 | |
Total liabilities | 188 | 130 | |
Total net assets | 637 | 1,425 | |
Equity | |||
Share capital | 3,752 | 3,752 | |
Share premium | 8,892 | 8,892 | |
Other reserves | (12,007) | (11,219) | |
Total equity | 637 | 1,425 | |
Condensed Statement of Changes in Equity | Share capital | Share premium | Capital reserve | Employee share-based compensation reserve | Retained deficit | Total equity/ (capital deficiency) |
US$000 | US$000 | US$000 | US$000 | US$000 | US$000 | |
At 1 January 2011 | 3,098 | 6,022 | 40,444 | 1,235 | (51,057) | (258) |
Employee share-based compensation | - | - | - | 5 | - | 5 |
Issue of shares | 654 | 2,870 | - | - | - | 3,524 |
Transactions with owners | 654 | 2,870 | - | 5 | - | 3,529 |
Loss for the period | - | - | - | - | (757) | (757) |
At 30 June 2011 (Unaudited) | 3,752 | 8,892 | 40,444 | 1,240 | (51,814) | 2,514 |
Employee share-based compensation | - | - | - | 494 | - | 494 |
Lapse of share options | - | - | - | (1,235) | 1,235 | - |
Transactions with owners | - | - | - | (741) | 1,235 | 494 |
Loss for the period | - | - | - | - | (1,583) | (1,583) |
At 31 December 2011 | 3,752 | 8,892 | 40,444 | 499 | (52,162) | 1,425 |
Loss for the period | - | - | - | - | (788) | (788) |
At 30 June 2012 (Unaudited) | 3,752 | 8,892 | 40,444 | 499 | (52,950) | 637 |
Condensed statement of cash flows | Six month period ended 30 June | Six month period ended 30 June | Year ended 31 December | |
2012 | 2011 | 2011 | ||
$000 | $000 | $000 | ||
Unaudited | Unaudited | Audited | ||
Cash flows from operating activities | ||||
Loss before tax for the period/year | (788) | (757) | (2,340) | |
Adjustments for: Finance Costs | - | - | - | |
Unrealised loss/(gain) on financial assets at fair value through profit or loss | 163 | (93) | (51) | |
Gain realised as part of the disposal of investments | (35) | - | - | |
Employee share-based compensation | - | - | 499 | |
Depreciation, amortisation and impairment | - | 20 | 70 | |
Cash flows from operating activities before changes in working capital | (660) | (830) | (1,822) | |
Decrease / (increase) in accounts receivable | 20 | 629 | (32) | |
Increas/(decrease) in trade and other payables | 58 | (971) | (256) | |
Cash flows used in operating activities after changes in working capital and provisions | (582) | (1,172) | (2,110) | |
Cash flows from investing activities | ||||
Purchase of property, plant and equipment | - | - | (32) | |
Purchase of investment securities | - | (490) | (1,115) | |
Sale of investment securities | 697 | - | - | |
Net cash generated by/(used in) investing activities | 697 | (490) | (1,147) | |
Cash flows from financing activities | ||||
Proceeds from the issue of share capital | - | 3,523 | 3,523 | |
Net cash generated by financing activities | - | 3,523 | 3,523 | |
Net increase in cash and cash equivalents | 115 | 1,861 | 266 | |
Cash and cash equivalents at beginning of period/year | 339 | 73 | 73 | |
Cash and cash equivalents at end of period/year | 454 | 1,934 | 339 |
1 | Corporate information |
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| Zoltav Resources Inc. ("the Company") is a company incorporated in the Cayman Islands, which does not prescribe the adoption of any particular accounting framework. The Board has therefore adopted International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board and as adopted by the European Union. The Company's shares are listed on the AIM of the London Stock Exchange. |
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2 | Basis of preparation |
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These condensed interim financial statements of the Company for the six months ended 30 June 2012 ("the Period") have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Company's latest audited financial statements for the year ended 31 December 2011. These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2011. The auditors' opinion on these financial statements was not qualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The Company's operations are not subject to seasonality or cyclicality. The financial statements are prepared in United States Dollars under the historical cost convention and in accordance with IAS 34 (Interim financial Reporting) as adopted by the European Union.
a) Adoption of new and revised Standards The directors have considered the new and revised Standards and Interpretations that became effective during the period and concluded that they have no material impact on these condensed interim financial statements.
b) Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Critical accounting estimates and assumptions The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting year are discussed below: Going concern The condensed financial statements have been prepared on going concern basis. Valuations of share options or warrants granted The fair value of share options or warrants granted is calculated using the Black-Scholes Pricing Model which requires the input of highly subjective assumptions, including the volatility of the share price. Because changes in subjective input assumptions can materially affect the fair value estimate, in the opinion of the Directors of the Company, the existing model will not always necessarily provide a reliable single measure of the fair value of the share options. Valuation of financial assets categorised as at fair-value through profit or loss: The fair-value of listed investments classified as at fair-value through profit or loss is based on the listed share prices of the respective investments and translated to United States Dollars using the exchange rate ruling at the statement of financial position date. Critical judgements in applying the Company's accounting policies Management in applying the accounting policies consider that they have not had to make any significant judgements.
c) Segment reporting The Company operated in one segment during the period, investment in equity instruments of mining operations based in the former Soviet Union. The management information received by the Board is prepared on this basis.
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3 | Total Comprehensive income There are no additional items of income and expense which are not included within the profit and loss for the Period. |
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4 | Loss per share |
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The calculation of the basic and diluted loss per share for the six month period ended 30 June 2012 is based on the following data: |
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| Six months ended 30 June |
| Six months ended 30 June |
| Year ended 31 December |
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| 2012 |
| 2011 |
| 2011 |
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Basic loss per ordinary share (US cents) | (0.21) |
| (0.20) |
| (0.63) |
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Diluted loss per ordinary share (US cents) | (0.20) |
| (0.20) |
| (0.62) |
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Basic loss per share | $000 |
| $000 |
| $000 |
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Loss for the period/year attributable to equity shareholders | (788) |
| (757) |
| (2,340) |
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Weighted average number of ordinary shares | 375,244,344 |
| 375,244,344 |
| 369,188,585 |
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| Six months ended 30 June |
| Six months ended 30 June |
| Year ended 31 December | |||||||||
| 2012 |
| 2011 |
| 2011 | |||||||||
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Diluted loss per share | $000 |
| $000 |
| $000 | |||||||||
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Loss for the period/year attributable to equity shareholders | (788) |
| (757) |
| (2,340) | |||||||||
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Weighted average number of ordinary shares used in calculating basic loss per share | 375,244,344 |
| 375,244,344 |
| 369,188,585 | |||||||||
Effect of dilutive potential ordinary shares - warrants | 10,550,000 |
| 10,550,000 |
| 10,550,000 | |||||||||
Weighted average number of shares for calculating basic loss per share | 385,794,344 |
| 385,794,344 |
| 379,738,585 | |||||||||
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5 Financial assets at fair value through profit or loss
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| Six months ended 30 June |
| Year ended 31 December | ||
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| 2012 |
| 2011 | ||
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| $000 |
| $000 | ||
| Listed securities |
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| Equity securities - USA |
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| 1 |
| 665 | |||
| Equity securities - United Kingdom |
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| 340 |
| 501 | |||
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| 341 |
| 1,166 | |||
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The movement in financial assets at fair-value through profit or loss during the Period is:
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| Year/period ended 30 June | ||
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| 2012 | ||
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| $000 | ||
| At 1 January 2011 |
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| - | ||||
| Additions in the period |
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| 490 | |||
| Unrealised gain |
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| 93 | |||
| At 30 June 2011 |
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| 583 | ||||
| Additions in the period |
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| 625 | |||
| Unrealised loss |
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| (51) | ||||
| Foreign exchange movements |
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| 9 | ||||
| At 31 December 2011 |
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| 1,166 | ||||
| Additions in the period |
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| - | |||
| Disposals in the period |
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| (697) | |||
| Gain realised as part of the disposals |
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| 35 | |||
| Unrealised fair value loss |
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| (163) | ||||
| At 30 June 2012 |
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| 341 | ||||
Particulars and valuation basis of principal financial assets held at fair value through profit or loss are as follows:-
Name | Number of shares | Percentage held | Fair-value | Valuation basis |
30 June 2012 | 30 June 2012 | 30 June 2012 | ||
US$000 | ||||
Evergreen Energy Inc. - Ordinary shares |
57,692 |
0.21 |
1 | Quoted market price at 30 June 2012 of US$0.018 per share, listed on NYSE Arca, USA |
Paternoster Resources Group Plc (Formerly Viridas PLC) - Ordinary shares |
44,000,000 |
7.61 |
190 | Quoted market price at 30 June 2012 of £0.00275 listed on London AIM |
Aurum Mining Plc - Ordinary shares |
3,333,333 |
2.82 |
150 | Quoted market price at 30 June 2012 of £0.02875, listed on London AIM UK |
Total | 341 |
Name | Number of shares | Percentage held | Fair-value | Valuation basis |
31 December 2011 | 31 December 2011 | 31 December 2011 | ||
US$'000 | ||||
Rosneft Oil Company - Ordinary shares |
38,400 |
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250 | Quoted market price at 31 December 2011 of US$6.51 per share, listed on NYSE Arca USA |
Lukoil Holding - Ordinary shares |
3,050 |
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162 | Quoted market price at 31 December 2011 of US$53.2 per share, listed on NYSE Arca USA |
Gazprom OAO - Ordinary shares |
23,500 |
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250 | Quoted market price at 31 December 2011 of US$10.66 per share, listed on NYSE Arca USA |
Evergreen Energy Inc. - Ordinary shares |
57,692 |
0.21 |
3 | Quoted market price at 31 December 2011 of US$0.06 per share, listed on NYSE Arca USA |
Viridas PLC - Ordinary shares |
44,000,000 |
7.61 |
345 | Quoted market price at 31 December 2011 of £0.0051, listed on London AIM |
Aurum Mining Plc - Ordinary shares |
3,333,333 |
2.82 |
156 | Quoted market price at 31 December 2011 of £0.03, listed on London AIM UK |
Total | 1,166 |
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to 3 based on the degree to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 fair value measurements are those derived from valuation techniques that include
For the period ended 30 June 2012
Level 1 | Level 2 | Level 3 | Total | |
US$'000 | US$'000 | US$'000 | US$'000 | |
Financial assets at fair Value through profit or loss |
341 |
- |
- |
341 |
Total | 341 | - | - | 341 |
For the year ended 31 December 2011
Level 1 | Level 2 | Level 3 | Total | |
US$'000 | US$'000 | US$'000 | US$'000 | |
Financial assets at fair value through profit or loss |
1,166 |
- |
- |
1,166 |
Total | 1,166 | 1,166 | ||
6 | 5 Events after the reporting period On 27 July 2012 the Company entered into an agreement with ARA Capital Limited, its largest shareholder, for ARA Capital Limited to advance an unsecured convertible loan, in the form of a 'loan note', to the Company of £500,000. The loan documentation for the loan was completed on 14 September 2012. £250,000 will be provided to the Company within 60 days of finalising formal documentation and a further £250,000 will be provided to the Company by not later than six months following finalising formal documentation.
The loan will carry a coupon of 1 per cent per annum, have a term of three years and will be convertible at any time into new ordinary shares in the capital of the Company at a price of 2.3p per new share. The annual coupon (which is waived from the time of and in the event of conversion) may be paid in cash or new shares in the Company at the Company's option. The Company can repay the loan note at any time.
The purpose of the loan note is to provide additional working capital to the Company as it continues to evaluate natural resources opportunities.
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Issue of share options
On 27 July 2012 share options over the ordinary shares of the Company were awarded to the directors of the Company as follows:
Symon Drake-Brockman - 25,000,000 options
Steve Lowden - 10,000,000 options
David Francis - 5,000,000 options
Each option is exercisable into one new ordinary share of US$0.01 in the Company at an exercise price of 1p. The options are exercisable at any time during the three year period from 27 July 2012 and will be accounted for at fair value.
7 | Related party transactions
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Transactions between the Company and its previous subsidiaries, which were related parties of the Company, are not disclosed in this note as they do not qualify as related parties. Details of the significant transactions between the Company and other related parties during the period ended 30 June 2012 are as follows.
During the year the Company had the following material related party transactions:
Six months ended 30 June 2012 | Six months ended 30 June 2011 | |
US$'000 | US$'000 | |
Management services fee paid to fellow subsidiaries | - | 72 |
Directors remuneration | 250 | 59 |
Company Secretary services | 75 | - |