TIDMPOL
RNS Number : 4577U
Polo Resources Limited
29 March 2019
This Interim Report contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation.
29 March 2019
Polo Resources Limited
("Polo" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 31 DECEMBER 2018
Polo Resources Limited (AIM: POL), the multi-sector investment
company with interests in oil, gold, coal, copper, phosphate,
lithium, iron and vanadium, today announces its unaudited results
for the six months ended 31 December 2018.
Financial Summary:
-- Total Net Assets for the six months ended 31 December 2018
were USD54.91 million (30 June 2018: USD60.28 million).
-- Total Net Assets of USD64.27 million as of 21 March 2019 (31
December 2018: USD54.91 million).
-- Net Asset Value per share as at 21 March 2019 was
approximately 15.59 pence per share (31 December 2018: 13.86 pence
per share).
Chairman's Statement
Introduction
This period under review saw significant progress across our
portfolio. In particular our investee companies Hibiscus Petroleum,
GCM Resources and Celamin Holdings made major steps forward in both
corporate and business development fronts.
In terms of our investment exposure to oil which is secured
through our shareholding in Hibiscus Petroleum, the period under
review saw the price of Brent crude oil trade largely above USD60 a
barrel, peaking at just over USD86 in October 2018. The improvement
in the price of oil led to a stellar set of results for Hibiscus
Petroleum, with their second quarter ended 31 December 2018
recording a profit after tax rise by 354% to USD12.26 million,
compared to the same period in 2018. The significant improvement in
overall performance was attributable to the additional production
contribution from their recently acquired Malaysian North Sabah
assets, and the achievement of higher production efficiency from
their U.K. North Sea Anasuria Cluster production field where
Hibiscus are currently actively working on new side track
wells.
Polo has been a long-standing shareholder in GCM Resources. GCM
have been tirelessly working to advance their Phulbari Coal and
Power Project in Bangladesh, which now focuses on a captive coal
mine delivering 15 million tonnes per annum to feed mine-mouth
power stations of up to 6,000MW capacity. Large scale projects of
this type are complex but at the same time have the potential to
deliver very significant returns for investors. Earlier GCM
announced it had reached agreement with CGGC (China Gezhouba Group
International Engineering) for a 2,000MW mine-mouth power plant.
Polo was delighted with the news that GCM had agreed a memorandum
of understanding and subsequently joint venture agreements with
Power Construction Corporation of China (PowerChina) to develop
power plants with 4,000MW capacity that would take the captive
mine's remaining thermal coal production. The contracts provide a
framework for the basis and relationship to not only deliver the
power plants but also develop the proposed coalmine. Subsequently
GCM announced that they had deepened their relationship with
PowerChina by entering into a definitive engineering, procurement
and construction contract for the development of the Phase-1 power
plant (2 X 1,000MW).
The phosphate market enjoyed a very positive 2018 where global
shipments of phosphates reached record levels and where prices also
remained firm. On a corporate and legal level, Celamin made good
progress on the development of its 51 percent owned Chaketma
phosphate project and recently strengthened its board which
included the appointment of a world-leading phosphate expert.
Further, Celamin expanded its portfolio of interests in Tunisia and
as announced outside of this reporting period, secured a strategic
partnership with a prominent Tunisian natural resources business
executive, which will see Celamin potentially growing its
portfolio.
Polo remains committed to supporting our investee companies as
they progress towards enhancing the value of their projects.
Portfolio Overview
Hibiscus Petroleum Berhad ("Hibiscus")
In December 2018, Hibiscus Petroleum Berhad (HIBI:MK) announced
a corporate and business update. Highlights included: i) Completion
of the acquisition of a 50% participating interest in the 2011
North Sabah Enhanced Oil Recovery Production Sharing Contract
("North Sabah PSC") in Malaysia and commencement of operations of
this second producing asset effective 1 April 2018 under the
operatorship of the company; ii) In the U.K. North Sea, technical
work on the opportunities around the Anasuria Cluster (Hibiscus'
first producing asset in which it has a 50% participating interest)
increased the volume of reserves, and a well was drilled in the
Central North Sea; iii) In October 2018 Hibiscus acquired a 50%
participating interest in two discovered fields in Blocks 15/13a
and 15/13b in the Central North Sea (together, "Marigold &
Sunflower Blocks") which are currently non-producing - marking a
second major asset in the U.K. North Sea.
Each of the above activities has involved the deployment of
capital and technical resources of the company and from third
parties with a view to value accretion. Hibiscus remains committed
to achieving its Mission 2021 of achieving 100 million barrels
("MMbbls") of net proved and probable oil reserves and net
production of 20,000 barrels ("bbls") per day.
Hibiscus recently announced very encouraging operational
results. For the quarter ended 31 December 2018 ("2Q2019") a total
of approximately 568 thousand bbls of crude oil were sold. This
consists of about 274 thousand bbls from Anasuria sold at an
average realised oil price of USD58.08 per bbl, and approximately
294 thousand bbls of oil from the North Sabah PSC sold at an
average realised oil price of USD71.30 per bbl.
Approximately 1.7 million bbls of crude oil across both assets
have been sold in the first two quarters of the financial year
ending 30(th) June 2019 ("FY2019"). Hibiscus hopes to maintain
current production momentum to deliver on its target of between 2.7
and 3.0 million bbls of oil from its two producing assets in
FY2019.
Hibiscus' total net oil production rate is approximately 8,850
bbls per day from two producing assets. The company's asset teams
from both Anasuria and North Sabah are targeting to execute
production enhancement projects that could potentially enhance net
production to over 12,000 bbls of oil per day by 2021.
Additionally, Hibiscus has commenced the evaluation of options to
develop the Marigold and Sunflower discovered oilfields in the
U.K., which hold potential to drive significant future earnings
growth once these fields commence production.
Hibiscus remains debt-free with a cash balance of RM203.8
million (USD49.88 million) as at 31 December 2018.
Anasuria Cluster Update:
The Anasuria Cluster located offshore in the U.K. consists of
the Teal, Teal South, Guillemot and Cook fields which produce to
the Anasuria Floating, Production, Storage and Offloading vessel.
Hibiscus Petroleum's wholly--owned subsidiary, Anasuria Hibiscus UK
Limited ("AHUK") holds 50% joint--operating interests in the Teal,
Teal South and Guillemot fields, as well as 19.3% non--operating
interest in the Cook field. The asset has 19-year reserve life and
operating expense of USD15-23 per bbl of oil equivalent with an
asset valuation of USD401 million(1) in 2018 (from USD208
million(2) in 2016).
Technical work completed on the asset has enabled independent
experts to increase the company's net proven and probable ("2P Oil
Reserves") to 24.4 MMbbls (as of 1 July 2018 - LEAP Energy Partners
("Leap Energy")) from 20.2 MMbbls (projected by RPS Energy as of 1
March 2016). Given production of 2.5 MMbbls during the intervening
period, this upgrade signifies that 6.7 MMbbls were added to net
reserves.
The production enhancement projects that have been identified
for execution over the next few years are expected to help arrest
natural decline and increase Anasuria oil production to 5,000 bbls
per day by FY2020 (net to Hibiscus (as announced on 9 November
2017)).
An example of one such project that has been the subject of a
recent disclosure: The company announced on 3 September 2018 that
its first major capital expenditure programme, the GUA-P2 Side
Track project had successfully been completed and the well produced
gross 4,750 bbls per day on flow test (2,375 bbls per day net to
Hibiscus Petroleum), increasing Hibiscus' net daily production from
the Anasuria Cluster by more than 33%.
Post the reporting period, in March 2019, Hibiscus announced
that its jointly-controlled operating company, Anasuria Operating
Company Limited ("AOC""), is on track to execute the Guillemot A
GUA--P1 side--track well, a planned production enhancement project
at the Anasuria Cluster concession, which is targeted to unlock
approximately 1.7 million bbls of oil from its current net 2P
(proven and probable) oil reserves. The GUA--P1 side--track project
is an opportunity to re--enter the existing GUA--P1 wellbore and
potentially drain additional volumes of hydrocarbons. The drilling
of the GUA--P1 side--track well is estimated to commence by the
first half of calendar year 2019. The GUAP1 side--track project
will be funded from internally generated funds.
Hibiscus is also working towards the sanctioning of a further
drilling project (within the fields at Anasuria). Apart from
arresting natural decline, Hibiscus hopes that this proposed well
will enhance production. A water injection well has been sanctioned
on the Cook Field with the aim of re-pressurising the reservoir. In
this manner, AOC hopes to improve the Recovery Factor from this
field thus extending the economic life and lowering future unit
operating costs.
North Sabah PSC
The North Sabah PSC includes 20 offshore platforms across 4
producing fields located in the South China Sea, off the west coast
of Sabah, and the Labuan Crude Oil Terminal located in the Labuan
Federal Territory, in Malaysia. The fields, St Joseph, South
Furious, SF 30, and Barton ("North Sabah Fields"), have been
producing since 1979 and the PSC provides the group with
operatorship and production rights up to 2040.
Results disclosed in the second quarter of financial year 2019
represented the third quarter of reporting by the company of the
operations and contribution of the North Sabah PSC, having
completed the acquisition of a 50% participating interest in March
2018. The significance of this acquisition - the first in Malaysia
for the company - is that it has provided Hibiscus with
oil-production footprints on two different continents.
Prior to the completion of this transaction, Hibiscus produced
approximately a net of 1.0 MMbbls of crude oil per annum, solely
from the Anasuria Cluster. Thus, Hibiscus was subject to business
risks concentrated around the performance of a single asset. The
North Sabah PSC has mitigated this risk substantially. Revenues and
profits are now derived from two geographies. In addition, the
combined annual production has increased by approximately 2.0
MMbbls, or two-thirds that of total current production.
To further enhance production from the North Sabah PSC,
Petroliam Nasional Berhad ("PETRONAS") had in August 2018, approved
the St Joseph Infill Drilling project through the Milestone
Review-4 maturation process, leading to the submission of a Field
Development Plan in November 2018. This project entails the
drilling of three infill producers, utilising a triple splitter
wellhead on the St Joseph Jacket-A ("SJJT-A") platform. From an
estimated ultimate recovery ("EUR") of a gross of 2.8 million stock
tank barrels of oil, the project is expected to add approximately
gross 2,600 bbls per day of oil at peak production. This infill
drilling programme will require minimal modification of topside
facilities at the SJJT-A platform.
The total capital commitment to this project is anticipated to
be approximately RM142.5 million (USD34.31 million), which will be
shared equally with Hibiscus' joint venture partner, Petronas
Carigali Sdn Bhd. Drilling is expected to commence in April 2019
and first oil production expected in June 2019.
Additional projects are also being matured that will increase
production in the mid-term.
Positioning:
Hibiscus is amongst the exploration and production companies
operating and investing in the mature basins of the United Kingdom
Continental Shelf, Malaysia and the Bass Strait of Australia. The
company is currently 'sweating' its producing assets in the North
Sea and Malaysia. With the relatively strong crude oil price, the
company's immediate focus is to generate cash for future
investment. The critical success factor for Hibiscus is to maintain
the ability to operate with a low-cost base and to grow production
without disproportionately increasing the risks that it assumes.
Hibiscus also recognises that as oil prices increase, the cost of a
growth strategy founded on securing high potential producing assets
will be prohibitive. To accrete shareholder value, Hibiscus options
are thus limited to: growing production incrementally by executing
low risk projects from within its current asset base; and/or
acquiring assets that are not in production but have the
exploration element removed as a risk factor. These assets must be
acquired at a competitive price as they may require significant
capital infusion before they can deliver returns. Competitive
acquisition of contingent resources is going to be important as it
provides Hibiscus with a platform to build a sustainable business
and the impetus to achieve its 2021 mission.
1. Source: LEAP Energy Report dated August 2018.
2. Source: RPS Energy Report dated June 2016
GCM Resources Plc ("GCM")
Our investee company GCM has made very significant progress in
its pursuit of reputable development partners for its captive coal
mine and power project, located in North West Bangladesh adjacent
to the rural township of Phulbari. Working under the previously
reported agreement with China Gezhouba Group International
Engineering Co. Ltd ("CGGC"), in July 2017, CGGC delivered a
technical pre-feasibility study for a 2,000MW coal fired power
plant located at the mine site. Subsequently CGGC and GCM agreed a
Contract Framework Agreement and a Joint Development Framework
Agreement which saw the parties agreeing to be partners to develop
the proposed power plant with CGGC being appointed for the
engineering, procurement, construction, and commissioning of the
power plant.
In the fourth quarter of 2018, GCM engaged Power Construction
Corporation of China Ltd ("PowerChina"), a state-owned key
enterprise of People's Republic of China and a world-leading
integrated engineering construction group to undertake a
prefeasibility assessment for additional power plants at the mine
site. PowerChina advised that by utilising the latest highly energy
efficient ultra-supercritical power plant design, 6,000MW can be
generated from the mine's thermal coal production. This is a large
value-adding step for the integrated Phulbari Coal and Power
Project as it confirms both the enormous scale of power production
and the domestic market off-take for the mine's thermal coal
production, which will underpin the mine's feasibility.
Subsequently, GCM agreed a memorandum of understanding which was
followed by joint venture agreements with PowerChina. The contracts
provide a framework for the basis and relationship to develop GCM's
proposed coalmine as well as the additional power plants generating
up to 4,000MW, which would consume the remaining thermal coal
production. This was later followed by the announcement by GCM that
they had deepened their relationship with PowerChina, by entering
into a definitive engineering, procurement and construction
contract for the development of the Phase-1 power plant (2 X
1,000MW).
Also, in November 2018 Polo provided GCM with an additional
GBP1.2 million short-term loan facility to enable GCM to further
progress its joint venture arrangements with development
partners.
Polo is pleased that GCM has attracted reputable and leading
companies as equity partners, a significant endorsement on the
viability and attractiveness of the Phulbari Coal and Power
Project.
Celamin Holdings Limited ("Celamin")
Celamin remains focused on the exploration and development of
the Chaketma Phosphate Project in Tunisia ("Chaketma"). Chaketma is
a potential large-scale phosphate development asset, which
comprises six prospects over a total area of 56km(2) . It hosts a
total JORC compliant Inferred Resource of 130Mt @ 20.5% P O ,
confirmed from drilling at only two of the project's six
prospects.
Further progress has been made in the legal proceedings to
recover Celamin's 51% shareholding of the Chaketma project,
currently held by the project company Chaketma Phosphate SARL
("CPSA"). The company's original partner in Chaketma, Tunisian
Mining Services ("TMS"), had applied to have the seizure order on
its shares in CPSA lifted. As announced by Celamin on 3 January
2019, this application was rejected by the Tunisian courts. This is
a favourable outcome to Celamin as the seizure prevents TMS dealing
the shares in CPSA during the dispute and protects the company's
interest in Chaketma. Celamin understands that this decision is
final and cannot be challenged.
The decision of the Tunisian Supreme Court confirms Celamin's
confidence as it looks to have the arbitration decision awarded on
30 November 2017 enforced. The arbitration award in Celamin's
favour ordered (amongst other matters) TMS to return to the
company's wholly owned subsidiary, Celamin Limited, its 51%
shareholding in CPSA and to pay damages and costs in excess of USD4
million.
Celamin has continued to make progress with regards to its
Tunisian operations amid legal and board changes. Following a
technical review of Chaketma, and in light of Celamin's confidence
in regaining control of Chaketma, Celamin has appointed Mr Brian
Campbell, a leading phosphate expert as a consultant to the
company. The company will work with Mr Campbell to progress
feasibility work upon the recovery of Chaketma and assess the
pathways to production.
Post the reporting period, on 7 March 2019, Celamin announced
that it has secured a new local partner in Tunisia. Celamin has
into a memorandum of understanding with Tunisian company Al Kassm
Holding ("Al Kassm") to work together on mineral resource projects
in Tunisia and elsewhere in Africa. As projects are acquired,
Celamin and Al Kassm will form incorporated joint ventures, with
the project interests of each party to be agreed on a case by case
basis.
Djebba Zinc-Lead Project, Tunisia - Historical Resource
Estimate
On 31 October 2018 the Company announced that since the grant of
the two exploration permits in Tunisia - Djebba and Zeflana in July
2018, Celamin had acquired the report on the mining study completed
in 1989 by Montreal-based consultancy, Le Groupe SIDAM-Minorex,
from the Office National des Mines ("ONM") in Tunisia, and engaged
CSA Global to review this study to enable announcement of the
historical resource estimate.
Celamin is now focusing on validation of the historical resource
based on confirmatory drilling and target generation work to define
new targets for drill testing as this style of mineralisation can
be extensive and form large deposits.
PRISM Diversified Ltd ("PRISM")
PRISM Diversified Ltd. (formerly Ironstone Resources Ltd.) is
focused on sustainable resource and related mineral process
development in the province of Alberta, Canada. PRISM currently is
commercially developing two mineral projects designed to deliver
critically important commodities for globally emergent markets.
Production of Carbonyl Iron Powder, Cobalt and Vanadium:
In conjunction with its strategic Canadian technology partner,
PRISM is continuing to advance its multi-faceted Clear Hills
Project in north western Alberta. By utilizing patented commercial
vapour metal deposition technology, PRISM intends to produce
high-purity and high-value metal powders to supply the rapidly
advancing additive manufacturing industry (3D printing) in addition
to providing high purity powders for pharmaceuticals. With a
forecast annual output of up to 15,000 tonnes of carbonyl iron
powder, at prices reaching an average of USD10,000 per tonne, the
project is anticipated to generate a significant return on
investment over an estimated minimum 25-year project life.
Subject to completion of its current capital raise program,
PRISM will commence its feasibility engineering phase in H1 2019,
conducting its pre-feasibility study and preliminary economic
assessment within 90-days, followed by its feasibility study and
front-end engineering design anticipated to be completed by
year-end 2019.
Production of Lithium Carbonate from lithium-rich formation
brines:
With the global movement to electrifying transportation,
extending the range of batteries is of utmost importance. Recent
developments in new battery technology featuring blends of lithium
and vanadium show great promise to solve the "range anxiety" issue
many consumers face when deciding between traditional internal
combustion engines or electric vehicles.
PRISM has the benefit of not only owning a significant compliant
resource of vanadium pentoxide in the Clear Hills (2.45 billion
pounds contained), but also holds the largest mineral tenure in
Alberta for lithium - and other performance elements such as
potash, bromine and boron - in the Devonian-age reservoirs that
underlie its permits. These carbonate reservoirs that typically
produce oil and gas also contain significant amounts of formation
waters with elevated concentrations of lithium, a key component of
rechargeable lithium-ion batteries.
The key to commercialisation of Alberta's lithium brine is
developing and deploying lithium "direct-extraction" technology to
produce a lithium concentrate for further refining into
battery-grade lithium carbonate. PRISM has entered into an
agreement with a western-Canadian based water processing specialist
firm to co-develop the required technology, dubbed "LiREC(R) " to
separate the lithium from the reservoir fluids by adapting their
existing patented technology. PRISM anticipates it will commence
field trials of its LiREC(R) system in Q2 2019, in advance of
completing its pre-feasibility study and preliminary economic
assessment by the end of 2019.
Funding arrangements:
PRISM is currently conducting a capital raise program targeting
USD10 million in equity/debt in the first quarter of 2019 to
support the ongoing development of its commercial carbonyl powder
and lithium carbonate projects. New operating subsidiaries of PRISM
may be created for each project, with PRISM's shareholders
retaining a major interest in each entity. The company is exploring
options for public listings of PRISM and/or its subsidiary
companies.
Blackham Resources Limited ("Blackham")
The Matilda-Wiluna Operation ("Operation") is located in
Australia's largest gold belt. The Operation encompasses four large
scale gold systems surrounding the township of Wiluna that has
historically produced 4.4Moz of gold.
Over the last 7 years, Blackham acquired over 1,440 square
kilometres of mining and exploration tenure in the historical
Wiluna goldfield which is part of Australia's biggest gold belt.
The Wiluna goldfield contains many different styles of gold
mineralisation and has a combination of oxide, free-milling and
sulphide refractory deposits which have been successfully mined and
processed by many operators over the past 120 years. Blackham has a
significant resource base containing all styles of mineralisation
currently sitting at 6.7Mozs (announced 13th September 2018 "Wiluna
gold resources continue to grow"). In 2016 Blackham commenced
mining and processing of the free-milling resources through the
refurbished Wiluna CIP processing facility as the first stage of
its long-term Wiluna mining strategy. Free-milling gold production
is the pre-curser to the company's overall plan to unlock the value
associated with the sulphide refractory mineralisation. Over the
past two years, surface mining has focused on the Matilda Mine.
Wiluna ores are now being mined concurrently with these having the
advantage of a higher grade profile and being located within three
kilometres of the gold plant.
In October 2018, Blackham announced an increased Total Ore
Reserve estimate for the Operation of 26Mt @ 1.8g/t for 1.53Moz of
gold as at 30 June 2018. Free milling Ore Reserves now total
550koz, an increase of 190% on the previous year. Wiluna Open Pit
Ore Reserves increased by 30% to 10.7Mt @ 2.5g/t for 867koz
reinforcing the foundation for the expansion of the Wiluna
Operation. Open pit mining has now commenced at Wiluna to focus on
the oxide material which is already providing higher grade feed to
the Wiluna Processing Plant and will set a foundation for the next
phase of the Wiluna Expansion.
Blackham continues to progressively assess the Operation's
Resource base of 96Mt @ 2.2g/t for 6.7Moz (58% Indicated)
(announced 13(th) September 2018 "Wiluna Resources continue to
grow"), with further conversions expected into reserves. There are
currently 3.2Moz @ 4.6g/t Au in underground resources sitting
outside of Reserves. Drilling continues to focus on higher grade
near surface options to increase production and lower costs.
Blackham has been progressing its Expansion Definitive
Feasibility Study ("Expansion DFS") since finalising its Expansion
Preliminary Feasibility Study ('Expansion PFS") in August 2017. The
Expansion PFS contemplated available options for Blackham
developing its 6.7 Moz of Resources. In the process of undertaking
the Expansion DFS, Blackham has identified a staged approach that
allows an initial low capital cost expansion to enable production
from its 1.53Moz of Reserves, targeting 100-120kozpa with costs
well below its current free milling operation and long mine
life.
Post the reporting period, in February 2019, Blackham announced
a new expansion plan for the Operation. The expansion will increase
the mine's economic potential by selling sulphide gold concentrate
at low capital costs.
Blackham has identified an initial low capital cost staged
expansion at its Matilda-Wiluna Gold Operation. The two-stage
approach was developed through the company's ongoing Expansion DFS
and provides a simple low-capital route to allow gold production
from Blackham's substantial sulphide reserves.
Stage one mining will focus on Blackham's highest margin
reserves and will target 100,000-120,000 ounces a year with costs
well below the current free milling operation. This first stage
will focus on the high-grade underground inventory which supports
an initial 6-year mine life.
The second stage will be de-risked through stage-one production
and will increase throughput to about 250,000 ounces a year via the
conversion of the 4-million-ounce reserve
A flotation circuit will be added to produce the 100-120,000
ounces in the first stage, comprising 100,000 ounces of concentrate
(about 46,000 tonnes at 70 g/t gold) and about 20,000 ounces of
Wiltails processing. The existing two ball mills and refurbished
rod mill combined with the new flotation plan will allow the
facility to process 750,000 tonnes per year, with 90% flotation
recovery producing around 46,000 tonnes a year of gold
concentrate.
Once the second stage has begun, Blackham will incorporate
comminution, flotation and leach circuits to lift processing to
2.2-3.3 million tonnes per year. Second-stage all-in sustaining
costs will reduce to about AUD1,050 - 1,150 an ounce.
Calendar year 2018 demonstrated the mine had attained
operational stability, producing 78,000 ounces at an all-in
sustaining cost of AUD1,441 an ounce.
On 6 March 2019, Blackham announced that it has capitalised on
the strength in the Australian Dollar gold price to expand its gold
price protection to near record prices. An additional 20,000 ounces
has been hedged at a forward price of AUD1,836/oz. Blackham's
revised gold forward sales contracts position is for the delivery
of 38,123oz at an average price of AUD1,773/oz over the next ten
months. This represents approximately six months of gold production
price protection.
On 20 March 2019, Blackham announced a fully underwritten
renounceable entitlements issue to raise AUD25.8 million (USD18.32
million) to enable the company to progress to gold production
exceeding 100,000 ounces per annum.
Weatherly International Plc ("Weatherly") (In
Administration)
Weatherly has a diverse portfolio of base metal production and
development assets with multiple low capital spend growth
opportunities. These include the Tschudi Mine, the Otjihase and
Matchless mines (together, "Central Operations") and the Berg Aukas
project in Namibia.
In April 2018, Weatherly announced that it had retained advisers
to evaluate strategic options for the company following operational
challenges at its key asset, the Tschudi open pit copper mine, in
Namibia. The 2016/2017 year began on the back foot with Tschudi
needing to recover from the high groundwater inflow rates
encountered in the open pit in the last quarter of the previous
year. These inflow rates far exceeded the worst case scenarios
foreseen within the Bankable Feasibility Study, making it
impossible to prepare for these excessive inflows in advance and
making it equally impossible to provide the required volumes of ore
from the pits to the crushing and stacking plant in the short term.
As described in Weatherly's Interim Results announced on 19 March
2018, open pit groundwater inflows in the Tschudi open pit, and the
costs of dealing with them, continued to increase as pit mining
proceeded to greater depths. However, the flow rates were managed
adequately, to ensure a reliable supply of ore for stacking.
On 26 April 2018, Weatherly announced that it has engaged Numis
Securities Limited ("Numis") and Treadstone Resource Partners
("Treadstone") as its financial advisers to lead a review of
strategic alternatives for the company and its assets where all
opportunities for maximising shareholder value would be considered
(the "Strategic Review").
The scope of the options considered under the Strategic Review
included, but were not limited to, the sale of the entire issued,
and to be issued, share capital of the company; the restructuring
of the company's debt; the disposal of certain company asset(s); or
the raising of capital via equity issuance.
The position of the Tschudi mine remained fundamentally
uncertain as a result of further significant water ingress in May
2018. Whilst water levels were stabilised, it was not possible for
Weatherly to assess the length of time required before full mining
operations could be recommenced, nor the full financial impact be
assessed during this time. On 1 June 2018, Weatherly announced that
as a result of this material uncertainty, Orion Mine Finance
(Master) Fund I LP ("Orion) had confirmed to Weatherly, in writing,
that they were unlikely to permit further drawdowns under the
existing uncommitted loan facility with Orion, details of which
were announced by Weatherly on 28 July 2017. Weatherly's Directors
considered that no further reliance could be placed on Orion
supporting the company financially and therefore sought to
temporarily suspend the company's shares from trading on AIM and
seek advice in relation to administration. Subsequently, on the
same day, the company announced the appointment of Simon Kirkhope
and Andrew Johnson of FTI Consulting LLP ("FTI") as administrators
to the company.
On 31 July 2018 the Administrators' Statement of Proposals were
released by Weatherly and can be found at the following
website:
https://www.fticonsulting-emea.com/cip/weatherly-international-plc
On 7 August 2018, Strand Hanson Limited, Weatherly's Nominated
Adviser and Broker resigned and in light of the Administrators'
Statement of Proposals, Weatherly did not seek the services of
another Nominated Adviser and, as a result, the company was
delisted from AIM the following month.
On 8 October 2018, Weatherly announced that following
significant operational progress at Weatherly's Tschudi mine, the
company has restarted the process of reviewing its strategic
options (the "Process"). The Process is being led by Numis and
Treadstone.
The scope of the options being considered by Weatherly include,
but are not limited to, the sale of certain subsidiaries of
Weatherly, or the disposal of certain assets of the company (or of
its subsidiary undertakings).
There have been no recent updates from the Administrators.
Nimini Holdings Limited (Gold, Sierra Leone) ("Nimini")
Polo's Annual Report 2018 explained that despite the
considerable lobbying efforts by our in-country representative who
is a Director of our local subsidiary Nimini Mining Limited, the
Nimini Project's mining licence was cancelled at the end of August
2018. Polo remains disappointed by the Government of Sierra Leone's
action in cancelling the mining licence and has written to the
President and the Minister of Mines and Mineral Resources ("MoM")
appealing for the decision to be reversed.
Nimini remains very much on the back foot and Polo has suspended
any further expenditure on the Project. However, efforts to recover
the situation are continuing and our in-country representative has
reopened discussions with the MoM.
In the meantime, following the termination of the Operator
Agreement with our joint venture partner Plinian and under the
terms and conditions of this agreement and other supplementary
agreements Polo is pursuing recovery of some USD4,060,827.80 (as at
10 January 2019) from Plinian.
Universal Coal Resources Pte Ltd ("Universal")
In May 2016, Polo's subsidiary, PIL, entered into a secured SGD5
million (USD3.79 million) nominal value 15% redeemable convertible
note ("Note") with Universal Coal Resources Pte Ltd
("Universal").
Universal is incorporated in Singapore and itself had entered
into a conditional agreement to acquire an indirect 75% interest in
PT Transcoal Minergy Coal Project ("TCM"), a company incorporated
in Indonesia, from a Pan Asia Corporation Ltd. (ASX: PZC)
subsidiary.
The company failed to list on the Singapore Stock Exchange and
is now considering other areas of asset realisation, including
repayment of the loan note by way of asset transfers. Efforts are
continuing to resolve the matter.
Polo's current portfolio includes:
Petroleum assets:
-- Hibiscus Petroleum Limited (8.75%)
-- Regalis Petroleum Limited (12.66%)
Coal and power assets:
-- GCM Resources Plc (17.81%)
-- Universal Coal Resources Pte Ltd (redeemable convertible note)
Phosphate asset:
-- Celamin Holdings NL (18.40%)
Lithium, iron and vanadium:
-- PRISM Diversified Ltd (19.5%)
Gold assets:
-- Blackham Resources Limited (1.49%) (diluted following a rights issue and new share issue)
-- Nimini Holdings Limited (90%)
Copper asset:
-- Weatherly International Plc (5.2%)
Various liquid short-term investments.
Summary
The last six months of 2018 have been positive for Polo
following significant progress being made by our investee companies
and improvement in commodity asset classes in general. This is
reflected in the recovery of Polo's share price by 33 percent from
a low of 2.7p to 3.6p at the close of this reporting period (4.58p
as at 21 March 2019). Notwithstanding this, management is
congnisant of the gap between the company's share price and net
asset value and believes that that this will be bridged by our
investee companies delivering on their development plans and thus
providing returns on our investments, and through further
investment in high quality projects.
To conclude, I would like to take this opportunity to thank all
our shareholders and partners for their continued support.
Datuk Michael Tang, PJN
Executive Chairman
29 March 2019
For further information, please contact:
Polo Resources Limited
- Kudzayi Denenga, Investor Relations +27 (0) 787 312 919
Allenby Capital Limited (Nominated
adviser & broker)
- John Depasquale +44 (0)20 3328 5657
Blytheweigh (Public relations)
- Julia Tilley, Fergus Cowan +44 (0) 207 138 3204
About the Company
Polo Resources Limited is a multi-sector investment company
focused on investing in undervalued companies and projects with
strong fundamentals and attractive growth prospects. For complete
details on Polo, please refer to: www.poloresources.com
CAUTIONARY STATEMENT
The AIM Market of the London Stock Exchange Plc does not accept
responsibility for the adequacy or accuracy of this release. No
stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. All
statements, other than statements of historical fact, in this news
release are forward-looking statements that involve various risks
and uncertainties, including, without limitation, statements
regarding the future plans and objectives of Polo. There can be no
assurance that such statements will prove to be accurate,
achievable or recognizable in the near term.
Actual results and future events could differ materially from
those anticipated in such statements. These and all subsequent
written and oral forward-looking statements are based on the
estimates and opinions of management on the dates they are made and
are expressly qualified in their entirety by this notice. Polo
assumes no obligation to update forward-looking statements should
circumstances or management's estimates or opinions change.
The Company's exploration and investment activities may also be
affected by a number of risks, including legal, political,
environmental, economic, financing, permitting, commodity,
exploration and development and other market risks which are normal
to the industry and referenced in greater detail in the Company's
2017 Annual Report for the period ending 30 June 2018, which may be
found on the Company's website at profile on
www.poloresources.com.
Investment Update
Oil and Gas
Hibiscus Petroleum Berhad (HIBI: MK)
-- Oil and Gas, United Kingdom and Australia
-- 8.75% equity interest
Hibiscus is Malaysia's first listed independent oil and gas
exploration and production company. The company's key activities
are focused on monetising producing oilfields and growing its
portfolio of development and production assets in areas of the
company's geographical focus: United Kingdom, Malaysia and
Australia.
Core Assets:
1. The UK continental shelf is home to Hibiscus Petroleum's
first producing asset - the Anasuria Cluster, a group of producing
oil and gas fields and associated infrastructure. Hibiscus'
jointly-controlled entity, AOC is joint-operator of this revenue
generating asset. Recently, Hibiscus has expanded its footprint by
acquiring a 50% participating interest in two discovered offshore
oilfields in Production Licence P.198, located in the UK Central
North Sea.
2. In Financial Year 2018, Hibiscus successfully completed the
acquisition of the 2011 North Sabah PSC. The company's wholly-owned
subsidiary, SEA Hibiscus Sdn Bhd ("SEAH"), is the operator of this
producing asset.
3. Hibiscus' other North Sea interests include a 50% interest
under a JOA in the UK Continental Shelf Petroleum Production
Licence No. P.198 Block 15/13a and Block 15/13b.The blocks are
located in an area that is close to other discoveries and existing
infrastructure.
4. As operator of the West Seahorse field with proven and
probable reserves under the VIC/L31 production licence, as well as
the additional exploration opportunities under the VIC/P57
exploration licence, Australia holds significant potential for
Hibiscus' future development plans.
Hibiscus produces crude oil and sells it in cargoes. From the
Anasuria FPSO facility, Hibiscus sells its crude oil in cargoes of
approximately 250,000 barrels. BP Oil International Limited
("BPOI") has been appointed to lift its cargoes and to market them
to refineries in the region. The parent organisation of BPOI is BP
plc, a global energy company. To date, BPOI has successfully
marketed all cargoes at competitive prices.
In North Sabah, oil is lifted from the Labuan Crude Oil Terminal
and sold in parcels of approximately 300,000 barrels directly to
the Trafigura Group, a large global commodities trader.
Hibiscus' revenues are directly related to the volumes of oil
that it sells and the oil price that is secured at the time of a
lifting. Hence, if a relatively low oil price prevails at the time
of a lifting, it could reduce cash flow generation and revenue
recognition for the period. A prolonged low oil price scenario
could negatively impact future cash flow projections and thereby
potentially hinder certain planned business initiatives. Hibiscus
will consider entering into an appropriate hedging programme after
carefully assessing prevailing market conditions.
Anasuria Reserves Upgrade:
After acquiring the assets, the Anasuria technical team has been
focusing on understanding the asset and have been working towards
improving daily operational performance and identifying a portfolio
of viable production enhancement projects and gradually executing
them safely in a manner that is disciplined from a capital
allocation perspective.
Hibiscus commissioned LEAP Energy to undertake an independent
evaluation of in-place and recoverable hydrocarbons in the Anasuria
Cluster attributable to AHUK. In a report dated 23 August 2018,
LEAP Energy stated that, based on their evaluation, the 2P Reserves
net to AHUK have increased to 24.4 MMbbls as of 1 July 2018.
This recent estimate by LEAP Energy represents a net 4.2 MMbbls
or 20.8% increase in 2P Reserves when compared to the 20.2 MMbbls
forecasted by RPS Energy Consultants Limited (RPS Energy) as of 1
March 2016. Given that AHUK's production in the interim period
between 1 March 2016 and 1 July 2018 was approximately 2.5 MMbbls
of oil, then the net addition to the company's 2P Reserves since
the acquisition of its participating interest in the Anasuria
Cluster is 6.7 MMbbls.
The reserves upgrade by an independent expert demonstrates that
the company's efforts to extend the life of the Anasuria Cluster
and unlock value from its assets.
North Sabah PSC - Reserves and Contingent Resources
Assessment:
Hibiscus recently announced a summary of the reserves and
contingent resources prepared by RISC Advisory Pty Ltd ("RISC") in
respect of the North Sabah Fields.
SEAH had on 1 November 2018, appointed RISC to undertake an
independent audit and provide an assessment of the reserves and
contingent resources within the North Sabah Fields.
As of 31 December 2018, the 2P Reserves and the gross contingent
resources ("2C Resources") of oil in the North Sabah Fields were
estimated to be 55.3 million stock tank barrels ("MMstb") and 85.7
MMstb respectively. (On 12 October 2016, Hibiscus Petroleum had
disclosed gross 2P Reserves and gross 2C Resources as of 1 January
2016 of 62 MMstb and 79 MMstb respectively, derived by independent
technical valuer, RISC Operations Pty Ltd).
RISC is an independent oil and gas consultancy specialising in
reserve and resource evaluation, field development and valuation,
technical advice and due diligence.
RISC has reviewed the reserves/ resources within the North Sabah
Fields in accordance with the Society of Petroleum Engineers'
internationally recognised Petroleum Resource Management System
(SPE-PRMS), and applied economic cut-offs.
Production Licence P.198, UK Central North Sea:
The Blocks (Block 15/13a and Block 15/13b), within Licence P.198
in the United Kingdom Continental Shelf, are situated approximately
250km northeast of Aberdeen and 19km northeast of the Piper Field
in the UK Central North Sea, in 140m water depth.
A total of seven wells under the Licence have been drilled
to-date exploring the Palaeocene interval and exploring/appraising
the Upper Jurassic interval. A discovery within Block 15/13a, has
significant contingent oil resources. A smaller field, within Block
15/13b, lies northeast of Block 15/13a. Oil bearing layers were
tested in Palaeocene in Block 15/13a and in Upper Jurassic in Block
15/13b. In Block 15/13a, a 16-hour drill stem test resulted in a
final flow rate of 1,937 barrels per day on a 40/64" choke in a
conventional vertical well.
Hibiscus intends to pursue various future development
opportunities across the Blocks which have the potential to drive
long term production and optimise the value of the Blocks.
The gross resources for Blocks 15/13a and 15/13b have been
classified by AGR TRACS International Limited ("AGR") in accordance
with resource definitions presented in the Society of Petroleum
Engineer's Petroleum Resources Management System. Based on AGR's
gross estimates of the Blocks as of September 2018, the 2C oil
resources of the Blocks net to AHUK (50% participating interest)
are 30.0 MMstb. Once a development plan is approved and
successfully implemented, up to 30.0 MMstb of 2C may potentially be
converted to 2P, which is expected to be added to Hibiscus
portfolio, contributing to íts mission of achieving its 2021
mission of 100 MMbbls in proven and probable reserves ("2P").
In addition, there may be near field opportunities that could be
monetised through an area-wide development.
VIC/L31 and VIC/P57, Australia:
As operator of the West Seahorse field with proven and probable
reserves under the VIC/L31 production licence, as well as the
additional exploration opportunities under the VIC/P57 exploration
licence, Australia holds significant potential for Hibiscus' future
development plans.
On 21 March 2019, Hibiscus' share price closed at MYR1.06 with a
market capitalisation of USD413.8 million (MYR/USD = 0.24582).
Regalis Petroleum Limited
-- Oil, Republic of Chad
-- 12.66% equity interest
Polo's interest in the private and independent oil and gas
company, Regalis Petroleum Limited ("Regalis") increased to 13.67%
following an in-specie distribution by Polo's 42% owned associate,
Signet Petroleum Nigeria Limited and transfers from other Signet
shareholders.
Regalis has interests in three highly prospective onshore
exploration blocks in the Republic of Chad. Regalis completed a
5,349 kilometre airborne gravity/magnetic survey over Blocks DOA
and WD2-2008 which are on trend with existing and recent
Glencore/Caracal discoveries.
However, Polo has recorded an impairment charge of USD14.8
million in the previous financial year on the carrying value of its
investment in Regalis as no further progress has been made by
Regalis in pursuing its exploration strategy.
Coal
GCM Resources Plc (AIM: GCM)
-- Coal and Power Project, Bangladesh
-- 17.81% equity interest
In its Annual Report 2018 GCM reported its strategy is to
present a combined mine and power plant proposal that will be
amenable to the Government of Bangladesh. To deliver on this
strategy GCM has pursued partnerships with a number of large
internationally renowned Chinese State-owned enterprises (Chinese
SOE's), for both mine and power plant development.
The Chinese SOE's have been targeted due to their experience and
knowledge of developing major power infrastructure projects, the
attractiveness of Chinese investment from the perspective of
developing countries, their ability to include the Project within
the One Belt One Road Initiative of the People's Republic of China,
their access and connections to major Chinese State-owned banks and
the credibility that they contribute to the Company's proposal.
When the feasibility study for the Phulbari coal mine was
carried out back in 2004-05, there wasn't the domestic demand for
coal as there is today. To ensure economic sustainability a portion
of the coal production would have needed to be traded on the
international market until such time that domestic demand
increased. The situation today has dramatically changed and driven
by Bangladesh's heightened demand for electricity to drive
industrial development the Phulbari coal mine is now being
presented as a captive mine with its entire thermal coal production
going to mine-mouth power plants which have the potential to
deliver the cheapest power for Bangladesh.
Over the past decade there have been significant technical
advances in power generation. By using the latest highly energy
efficient ultra-supercritical thermal power plant technology GCM
and its development partners will be able to generate up to 6,000MW
of environmentally friendly thermal power production. This
represents an increase of 50% power generation over what was
possible using the older sub-critical boiler designs. This is a
very significant value-add for the Phulbari coal mine and
presenting the mine as a captive mine with its 6,000MW power
generation is a logical use for this 572 million tonne high quality
coal resource.
Working under a Memorandum of Understanding ("MoU") with world
renowned China Gezhouba Group International Engineering Co Limited
("CGGC"), a state-owned key enterprise of People's Republic of
China. CGGC delivered in July 2017 a technical pre-feasibility
study for a 2,000MW power plant located at the mine site.
Subsequently CGGC and GCM agreed a Contract Framework Agreement and
a Joint Development Framework giving CGGC the exclusive right for
the engineering, procurement, construction, and commissioning of
the proposed power plant.
Throughout 2018 GCM has also been in discussion with Power
Constructions Corporation of China Ltd ("PowerChina") which also is
a state-owned key enterprise of People's Republic of China and a
world-leading integrated engineering construction group.
In November 2018 PowerChina delivered a technical prefeasibility
study for mine mouth power plants generating the remaining 4,000MW
necessary to consume the Phulbari coal mine's planned full thermal
coal production. Significantly the PowerChina report included due
diligence that independently confirmed the Phulbari coal mine's
capability of supporting 6,000MW.
Immediately following delivery of the power plant technical
prefeasibility study, GCM and PowerChina signed an MoU setting out
the steps towards a future Joint Development Agreement, obtaining
approval from the Government of Bangladesh and subsequent
development of both the mine and power plants (4,000MW PowerChina
with 2,000MW being covered in the separate agreement with CGGC).
The MoU also states intention that equity holdings of the coal mine
and power plants shall be agreed in the future Joint Development
Agreement and targets submitting a formal proposal to the new
Government of Bangladesh early in 2019. Although PowerChina has
expressed its interest to participate in coal mine development, GCM
has been in discussion with another potential partner with specific
coal mine development experience.
On 17 January 2019 GCM announced that it has agreed a Joint
Venture Agreement PowerChina for the development of a 2×1,000MW
Coal-Fired Power Plant Project (Phase-1) at the site of the
Company's proposed coal mine in North-West Bangladesh. It was also
announced that PowerChina was awarded the EPC Contract (Engineering
Procurement Construction) for the power plant.
On 15 March 2019 GCM announced that it has agreed a second Joint
Venture Agreement with PowerChina for the development of an
additional 2×1,000MW Coal-Fired Power Plant Project (Phase-2) at
the proposed coal mine site.
Funding arrangements:
GCM announced in November 2017 that it had successfully raised
GBP2 million (GBP1.8 million net of costs) at 34.4p per New
Ordinary Share in an institutionally underwritten offer. This
resulted in a total of 5,813,953 New Ordinary Shares being allotted
to satisfy the Offer which means the Company will have 88,175,650
ordinary shares of 10p each in issue. No Ordinary Shares are held
in treasury.
GCM announced in November 2018 that it had secured a GBP1.2
million increase to its existing short-term loan facility of GBP1.1
million with Polo Resources Limited bringing the total loan
facility to GBP2.3 million. The original GBP1.1 million has already
been utilised and this latest amount will be drawn down in equal
quarterly instalments of GBP300,000 and will be used in progressing
joint venture arrangements with development partners and
preparation of a joint submission to the Government of
Bangladesh.
On 21 March 2019, GCM's share price closed at GBP0.27 with a
market capitalisation of USD35.1 million (GBP/USD = 1.32204).
Universal Coal Resources Pte Ltd
-- Coal Project, Indonesia
-- Redeemable convertible note
In May 2016, Polo's subsidiary, PIL, entered into a secured SGD5
million (USD3.79 million) nominal value 15% redeemable convertible
note ("Note") with Universal Coal Resources Pte Ltd
("Universal").
Universal is incorporated in Singapore and itself had entered
into a conditional agreement to acquire an indirect 75% interest in
PT Transcoal Minergy Coal Project ("TCM"), a company incorporated
in Indonesia, from a Pan Asia Corporation Ltd. (ASX: PZC)
subsidiary.
Universal was targeting a Singapore Stock Exchange Catalist
Board listing and the Note entitles Polo to convert the principal
outstanding plus any accrued interest into not less than 20% of the
share capital of Universal as enlarged by such a conversion at any
time up to 18 months from draw-down, or earlier upon the receipt of
approval in principle to list. The Note is repayable 18 months from
draw-down unless previously converted.
Pursuant to the terms of the Note, a key action for Universal
was to obtain approval from Pan Asia's shareholders for the
disposal of TCM to Universal within three months from the date of
the Note. As at the date hereof, this approval has not been
obtained and a default of the terms of the Note remains. PIL has
served notice on Universal and the parties who provided security,
namely PZC and Mr. Boelio Muliadi, and is currently in discussions
with them on a without prejudice basis for an amicable resolution,
in parallel with PZC's endeavours to dispose TCM to an
investor.
PZC announced that it is progressing the potential cash sale of
its interests in TCM and that Polo will be repaid from the proceeds
of sale. The transaction is still subject to certain conditions
precedent including due diligence, approval from PZC shareholders
and any approvals required from regulatory and other bodies.
TCM Coal Project:
TCM is the owner of a Production Operation Mining Business
Licence for a mining concession in South Kalimantan Province,
Indonesia. Their focus is the development of a two million tonnes
per annum underground mine delivering a high quality Bituminous
Coal saleable product of some 6,200 kcal/kg specific energy (GAR -
Gross as Received). The current JORC Resource of 129 Mt (measured,
indicated and inferred) has been derived from the southern area of
the concession and there is potential to upgrade and increase the
resource base through drilling the northern area. TCM's production
permit extends to April 2028. Further drilling and a full final
feasibility study are required to be completed and forestry
approval obtained prior to commencement of mine development. The
TCM Coal Project will utilise existing coal transportation
infrastructure including a 50 kilometre haul road to the river port
at Batulicin, a major coal shipping centre.
Phosphate
Celamin Holdings NL (ASX: CNL)
-- Phosphate, Tunisia
-- 18.40% equity interest
Celamin continues to focus on restitution of its interest in
CPSA, the operating company responsible for development of the
Chaketma Project.
During the period under review, Celamin announced a number of
appointments and resignations to its Board to increase the strength
and diversity of the Board in anticipation of continued success in
Tunisia as it progresses the recovery of the Chaketma Project and
increases work on its new lead/zinc exploration permits.
Post reporting period, on 7 March 2019, Celamin announced that
it has secured a new local partner in Tunisia. Celamin has into a
MoU with Tunisian company Al Kassm to work together on mineral
resource projects in Tunisia and elsewhere in Africa. As projects
are acquired, Celamin and Al Kassm will form incorporated joint
ventures, with the project interests of each party to be agreed on
a case by case basis.
Al Kassm is owned by Mr Ahmed Bouchamaoui, a prominent and
highly regarded Tunisian businessman. During the last 30 years, Mr
Bouchamaoui has overseen successful businesses both in Tunisia and
internationally including, but not limited to, oil and gas
exploration and production, real estate, agriculture, education
(American University), construction, health, telecommunication, IT
and mining.
In relation to the fraudulent purported transfer to TMS of
Celamin's 51% interest in the joint venture company CPSA, the
consolidated entity will continue to pursue all available legal and
other avenues in order to secure the preservation and recognition
of Celamin's rights, including restitution of its shares in CPSA
and compensation for damages suffered.
The full details of the background of the dispute can be found
at http://celaminnl.com.au/ and Celamin's Annual Report for the
year ended 30 June 2018.
Djebba Zinc-Lead Project, Tunisia - Historical Resource
Estimate:
In July 2018 Celamin was granted two new exploration permits in
Tunisia prospective for Zinc and Lead. The Djebba and Zeflana
permits cover 32 kilometres in the Atlas Zinc-Lead Province that
runs through the north of the country.
Since the grant of the exploration permits, Celamin has acquired
the report on the mining study completed in 1989 by Montreal-based
consultancy, Le Groupe SIDAM-Minorex, for the Office National des
Mines ("ONM") in Tunisia and engaged CSA Global to review this
study to enable announcement of the historical resource
estimate.
The mining study, titled "Etude de faisabilité preliminaire de
l'exploitation du gite plomb-zincifere de Djebba" (Pre-feasibility
study on mining the Djebba Zinc-Lead deposit) documents historical
resource estimates and mining studies for the deposit completed in
the period 1986-89. The study was based on drilling completed by
ONM at the historical Djebba mine site which was used to estimate
and report the historical resource of 2.7 Mt at 6.1% Zn and 3.3%
Pb(1) .
Better results from the historical ONM drilling include:
-- S-30bis 16.6m at 8.36% Zn & 1.8% Pb from 66.1m
-- MDJ2 10.45m at 17.52% Zn & 1.57% Pb from 21.85m
-- MDJ7 8.55m at 9.55% Zn & 0.81% Pb from 32.85m
Celamin cautions that this resource estimate is a historical
estimate and was not reported in accordance with the JORC Code. A
Competent Person has not done sufficient work to classify the
historical estimate as a Mineral Resource and/or Ore Reserve in
accordance with the JORC Code and it is uncertain that following
evaluation and/or further exploration work that the historical
estimate will be able to be reported as a Mineral Resource or Ore
Reserve in accordance with the JORC Code.
ASX Listing Rule 5.12 specifies the additional information that
must be provided in a market announcement that contains historical
estimates. This information is contained in the Annexure to
Celamin's 31 October 2018 Release together with further details on
the historic mineral resource estimate.
Reporting of the historical estimate is considered material as
it provides an indication of the presence of potentially economic
mineralisation on the property. Although it can only be considered
a qualitative indication at this time, it provides an indication of
the prospectivity of the area and supports investment in further
exploration.
Subsequent to the 1989 study, additional drilling and other
exploration work was completed at Djebba by ONM (1992),
ONM-Metallgesellschaft (1993-94), VSX-listed Consolidated Global
Minerals Ltd (2001-04), and AIM-listed Maghreb Minerals
(2002-2008). Celamin is in the process of acquiring, compiling, and
assessing the available data and reports for this subsequent
work.
Celamin will now focus on validation of the historical resource
based on confirmatory drilling and target generation work to define
new targets for drill testing as this style of mineralisation can
be extensive and form large deposits.
Link to Figure 1:
http://www.rns-pdf.londonstockexchange.com/rns/4577U_1-2019-3-29.pdf
Figure 1. Location of granted permits, Djebba and Zeflana and
recent applications
As noted in figure 1, Celamin has lodged applications for larger
permits covering the geological trends of both the Djebba and
Zeflana permits. The applications areas are expected to improve the
possibility of delineating extensions to the mineralisation at both
locations.
For further information on the Djebba and Zeflana permits,
including past ownership and historical data, please refer to ASX
releases 17 July 2018 and 31 October 2018 which can be found at
http://celaminnl.com.au/
Completion of Share Purchase Plan, Bonus Options Offer and Top
Up Placement:
On 9 November 2018, Celamin announced that it had successfully
raised AUD622,500 (USD439,070) from existing shareholders via the
share purchase plan, representing 92% of the maximum amount able to
be raised by the SPP.
The company also announced on 14 November 2018, that it had
raised AUD336,502 (USD242,975) from sophisticated investors via a
Top-Up Placement.
The Bonus Options Offer was also completed during the quarter
ending 31 December 2018 where eligible shareholders received one
(1) Bonus Option for every two (2) Shares held by Eligible Bonus
Option Shareholders registered on the record date.
On 6 December 2018, Celamin lodged a Supplementary Prospectus
extending the date of the Placement Offer to sophisticated,
institutional and/or professional investors to apply for up to
AUD250,000 worth of Shares at the Placement Offer Price of AUD0.025
per Placement Share, plus one (1) free attaching Option for every
two (2) Shares applied for exercisable at AUD0.05 per Option on or
before 18 May 2020 to Friday 8 February 2019. Polo's interest in
CNL following the SPP Offer and subsequent TUP stands at 26,214,915
shares representing 20.53% of CNL's Fully Paid Ordinary Shares.
The capital raised under the SPP Offer and the Placement Offer
will be used to fund ongoing legal proceedings for recovery of
Celamin's interest in the Chaketma Project, exploration programs on
Celamin's new exploration permits in Tunisia prospective for zinc
and lead, working capital and costs associated with the Offers.
On 21 March 2019, Celamin's share price closed at AUD0.061 with
a market capitalisation of USD6.2 million (AUD/USD = 0.70943).
(1) Celamin cautions that this resource estimate is a historical
estimate and was not reported in accordance with the JORC Code. A
competent person has not done sufficient work to classify the
historical estimate as a mineral resource and/or reserve in
accordance with the JORC Code and it is uncertain that following
evaluation and/or further exploration work that the historical
estimate will be able to be reported as a mineral resource or ore
reserve in accordance with the JORC Code.
Lithium, Iron, Vanadium and Precious Metals
PRISM Diversified Ltd (formerly Ironstone Resources)
-- Lithium, Iron, Vanadium and Precious Metals, Canada
-- 19.5% equity interest
The multifaceted Clear Hills Project will serve as the locus for
the long-term production of iron, vanadium, cobalt, lithium and
aggregate products to support the growing demand in the aerospace,
automotive and pharmaceutical industries for high-purity iron
powder products, and vanadium, cobalt and lithium electric metals
to meet the demands of the electrification of the global
transportation industry and renewable energy storage projects.
Through three diamond core drilling programs, a resource of 557
million tonnes of mineralized material has been defined (182
million tonnes contained iron and 2.45 billion pounds of contained
vanadium pentoxide), with the results reported in a NI 43-101
technical resource report (July 2012) released by SRK Consulting
(Canada) Inc. on behalf of Ironstone Resources. In early 2018,
Ironstone Resources was renamed to PRISM Diversified Ltd. to mark
the company's entry into its commercialization stage of
development.
In early 2017, PRISM determined that its iron deposit would be
amenable for the production of carbonyl iron powder using a
commercially-proven process, with secondary recovery of vanadium
and cobalt co-products.
Lithium-rich brines in Devonian-age oil and gas reservoirs
underlie PRISM's Clear Hills permits supported by several regional
studies and government reports. The company is currently evaluating
the formation brines to determine the most effective method to
extract, concentrate and refine the lithium into battery-grade
lithium carbonate. After successful preliminary tests revealed the
efficient direct-extraction of lithium from a reservoir brine
sample on PRISM's permit using leading-edge patented technology,
the company quadrupled its permit-holdings in the Peace Region and
now hold a 100% undivided interest in 1.91 million acres (776,322
hectares), the largest contiguous block of metallic and industrial
mineral permits held in Alberta today.
In conjunction with HATCH Associates, the company conducted an
extensive research and development program to fine-tune and scale a
novel process - dubbed as the HICS Process - for upgrading oolitic
ironstone into high-grade iron metallics to be sold as alternative
iron units into the US steel industry or to support steel
production in western Canada. Further commercialisation work will
be conducted after carbonyl iron powder operations commence,
anticipated in late 2020.
The overlying overburden is comprised of bentonite-rich
expandable clays for potential use in the production of
light-weight expandable clay aggregates (LECA), or which can be
manufactured into a variety of environmentally-friendly building
and road construction products.
The Clear Hills Project is situated in the heart of Peace
Country, 200 kms north of the city of Grande Prairie in north
western Alberta, Canada. The region hosts a near-surface
polymetallic iron-vanadium deposit that extends along the eastern
flanks of the Clear Hills.
Gold
Blackham Resources Limited (ASX: BLK)
-- Gold, Western Australia
-- Coal, Southwest Australia
-- Combined direct and indirect 1.49% equity interest (diluted
following a rights issue and new share issue)
The Matilda-Wiluna Gold Operation is located in Australia's
largest gold belt. The Operation encompasses four large gold
systems surrounding the township of Wiluna that has historically
produced of 4.4Moz of gold. In October 2016, Blackham produced
first gold from the Operation.
The Operation has 4.4 million ounces of historical production
and four separate large gold systems over 1,440 square kilometres
of tenure and 55 kilometres of strike.
The project has resources of 96 million tonnes at 2.2 g/t
containing 6.7 million ounces (58% of which is indicated) and
reserves of 26 million tonnes at 1.8 g/t for 1.53 million ounces
with a plus-10 year mine life.
Gold Production:
Calendar year 2018 saw production of 2.06Mt @ 1.4g/t with a
recovery of 86% for gold production of 78,089oz @ ASIC AUD1,441/oz.
This represents a significant improvement of 27% to CY 2017 gold
production of 61,181oz.
FY19 production guidance has been revised to 72--80koz primarily
on the back of lower first half production. AISC/oz has been
revised to AUD1,500--AUD1,700/oz due to a combination of lower
first half production and higher mining unit cost rates. For the
second half, management expects lower throughput due to harder ores
being processed, and higher mined grades in both the Matilda and
Wiluna open pits.
Table 1 -- Production & Cost Summary
SEP18 QTR DEC18 QTR FY19
YTD
Production Unit
======== ======================= =========
Open Pit Mining
======== ======================= =========
Total Mining bcm 1,890,930 2,356,346 4,247,275
=============================== ======== ========= ============ =========
Strip Ratio w:o 8.0 7.3 7.6
=============================== ======== ========= ============ =========
Ore Mined t 442,740 598,448 1,041,188
=============================== ======== ========= ============ =========
Mined Grade g/t 1.1 1.2 1.1
=============================== ======== ========= ============ =========
Underground Mining
=============================== ======== ======================= =========
Total UG lateral development m 149 84 233
=============================== ======== ========= ============ =========
Ore Mined t 9,407 10,833 20,240
=============================== ======== ========= ============ =========
Mined Grade g/t 7.4 5.6 6.5
------------------------------- -------- --------- ------------ ---------
Total Ore Mined t 452,147 609,281 1,061,428
=============================== ======== ========= ============ =========
Total Mined Grade g/t 1.3 1.2 1.2
=============================== ======== ========= ============ =========
Total OP & UG Contained Gold oz 18,362 24,219 42,581
=============================== ======== ========= ============ =========
Processing
=============================== ======== ========= ============ =========
Tonnes Processed t 555,677 487,401 1,043,078
=============================== ======== ========= ============ =========
Grade Processed g/t 1.2 1.4 1.3
=============================== ======== ========= ============ =========
Recovery % 91% 87% 89%
=============================== ======== ========= ============ =========
Gold Produced oz 19,049 19,016 38,065
=============================== ======== ========= ============ =========
Gold Sold oz 18,332 19,980 38,312
=============================== ======== ========= ============ =========
Costs Unit
======== ======================= =========
Mining A$/oz 1,003 1,113 1,058
======== ========= ============ =========
Processing A$/oz 419 443 431
=============================== ======== ========= ============ =========
Site Administration A$/oz 85 90 87
=============================== ======== ========= ============ =========
Pre--production mining costs
capitalised A$/oz (156) (160) (158)
=============================== ======== ========= ============ =========
Stockpile movements A$/oz 107 (126) (10)
=============================== ======== ========= ============ =========
Royalties, refining costs
& silver sales A$/oz 81 109 96
=============================== ======== ========= ============ =========
Sustaining capital expenditure A$/oz 27 117 72
=============================== ======== ========= ============ =========
Overhead costs A$/oz 22 20 21
=============================== ======== ========= ============ =========
All -- In -- Sustaining Costs
Per Ounce A$/oz 1,588 1,606 1,597
======== ========= ============ =========
Wiluna Open Pit Mining Commences:
In October 2018, Blackham advised it has commenced open pit
mining at Wiluna of its recently defined free milling ore. It has
been 10 years since open pit mining last took place at the Wiluna
Mine. Recommencement of mining at the Wiluna Mine is expected to
increase plant feed grade, reduce haulage costs and significantly
reduces mine sequencing risks due to more mining areas. Mining of
the Wiluna free milling pits will significantly reduce both
geological and mining risks associated with the larger sulphide
pits prior to recommissioning the Wiluna plants sulphide
circuit.
In line with the mine plan adopted at the start of the year, the
remaining open pits at Matilda will be mined concurrently with the
Wiluna open. All the Wiluna open pits are located within 3kms of
the plant, significantly lowering haulage costs
Funding arrangements:
During July 2018, Blackham entered into a Controlled Placement
Agreement ("CPA") with Acuity Capital. The CPA provides Blackham
with up to AUD10 million (USD7.29 million) of standby equity
capital over the coming 27 month period. Importantly, Blackham
retains full control of all aspects of the placement process,
having sole discretion as to whether or not to utilise the CPA, the
quantum of shares issued, the minimum issue price of shares and the
timing of each placement tranche (if any). There are no
requirements on Blackham to utilise the CPA and Blackham may
terminate the CPA at any time, without cost or penalty. If Blackham
does decide to utilise the CPA, Blackham is able to set a floor
price (at its sole discretion) and the final issue price will be
calculated as the greater of that floor price set by Blackham and a
10% discount to a Volume Weighted Average Price over a period of
Blackham's choosing (again at the sole discretion of Blackham).
On 20 March 2019, Blackham announced a fully underwritten
renounceable entitlements issue to raise AUD25.8 million to enable
the company to progress to gold production exceeding 100,000 ounces
per annum.
On 21 March 2019, Blackham's share price closed at AUD0.018 with
a market capitalisation of USD17.6 million (AUD/USD = 0.70943).
Nimini Holdings Limited
-- Gold Project, Sierra Leone
-- Equity interest: 90% Polo Resources and 10% Plinian Capital
Polo's Annual Report 2018 explained that despite the
considerable lobbying efforts by our in-country representative who
is a Director of our local subsidiary Nimini Mining Limited, the
Nimini Project's Mining Licence ("ML") was cancelled at the end of
August 2018. This came a month after a blanket move by the
Government of Sierra Leone ("GoSL") cancelling over 30 mining
licences at which time the GoSL cited it was facing serious revenue
generation challenges.
Note that Nimini had earlier taken the decision to suspend all
payments to the GoSL (including the annual ML fee). Nimini wrote to
the GoSL explaining that it was forced to take this drastic action
because the GoSL was not acting in good faith with the Mine
Development Agreement (MDA) negotiations. The MDA is crucial to
development of Nimini's Komahun Gold Project as it defines the
fiscal terms.
Polo remains disappointed by the GoSL's action in cancelling the
Nimini Project's mining licence and wrote directly to the President
and the Minister of Mines and Mineral Resources appealing for the
decision to be reversed.
The in-country representative has recently managed to re-open
discussions with the Minister of Mines and Polo still awaits the
outcome of its appeal against the mining licence.
Copper
Weatherly International Plc (AIM; WTI)
-- Copper, Namibia
-- 5.2% equity interest
Weatherly International has restarted the process of reviewing
its strategic options following the appointment of Simon Kirkhope
and Andrew Johnson of FTI Consulting as joint administrators of the
company in June 2018. This follows the implementation of a recovery
plan for its Tschudi copper mine in Namibia, following significant
water ingress in May 2018. Since the appointment of the joint
administrators in June, there have been material improvements to
the dewatering capabilities and a strategy enabling stable path to
growth has been implemented.
The strategic review process is being led by financial advisors
Numis and Treadstone, and the scope of the options being considered
by Weatherly include, but are not limited to, the sale of certain
subsidiaries of Weatherly, or the disposal of certain assets of the
company.
Weatherly has a diverse portfolio of base metal production and
development assets with multiple low capital spend growth
opportunities. These include the Tschudi Mine, the Otjihase and
Matchless mines (together, "Central Operations") which were placed
on care and maintenance in September 2015 and the Berg Aukas
project in Namibia. Key highlights of Weatherly's main assets are
provided below.
Tschudi
-- Producing copper mine located in Tsumeb, northern Namibia
-- Currently running at 17ktpa (the SX-EW plant's minimum design capacity)
-- Ore Reserves(1) of 15.6Mt at 0.89% Cu for 138.2kt and Mineral
Resources(1) of 51.0Mt at 0.76% Cu for 387.7kt
-- Materially improved dewatering capabilities and strategy enabling stable path to growth
-- Strong Resource base could support further production
enabling potential mine life extensions
-- Underexplored project area
-- Modern processing facilities and robust infrastructure base
Central Operations
-- Three underground mines and an 800ktpa copper concentrator,
currently on care and maintenance
-- The operations were in production until September 2015,
producing high quality concentrate sought after for blending
-- Mineral Resources(2) of 4.40Mt at 2.27% Cu for 99.7kt
(Otjihase) and 1.34Mt @ 2.40% for 31.8Kt (Matchless)
-- Otjihase and Matchless mines represent a significant low
capital intensity restart opportunity with substantial cash flow
enhancing opportunities including:
o Capital realisation through optimised design
o Improvement of exploration target through expansion and access
to neigbouring compartments
o Backfill optimisation to increase recovery
Berg Aukas
-- Past-producing zinc-lead-vanadium project located near Tsumeb, Namibia
-- Shafts and access development to 800m depth
-- Ore Reserves(3) of 1.69Mt at 11.16% Zn, 2.76% Pb and 0.23%
V(2) O(5) (Cut off 5% Zn eq) and Mineral
-- Resources(3) of 1.26Mt at 15.47% Zn, 3.84% Pb and 0.33% V(2) O(5) (Cut off 3.0% Zn)
-- Significant value enhancing opportunities including:
o Shaft stripping / decline addition options allowing for larger
equipment and mill expansion
o Unlocking value from metal recovery from stock of historical
tailings
o Favourable vanadium pricing environment
Notes
(1) Total as at 30 June 2017. 100% basis.
(2) 100% basis. Mineral Resource statement for the Otjihase Mine
is declared in terms of the JORC Code (2012
Edition) with an effective date of 31 March 2018. Matchless
estimated tonnage based on Bara polygonal calculation.
(3) As at April 2013.
Financial Position
The Group reported an operating loss of USD1,555,000 for the six
months to 31 December 2018
(31 December 2017: USD993,000). As at 21 March 2019, the Group
had a net position of cash, receivables and short term investments
of USD14.31 million (31 December 2018: USD13.03 million). Listed
and unlisted investments at marked to market value, cost and
valuation amounted to USD55.34 million (31 December 2018: USD47.48
million). The combined total of cash, receivables, payables, listed
and unlisted investments was USD64.27 million as of 21 March 2019
(31 December 2018: USD54.91 million) which is equivalent to a Net
Asset value of approximately 15.59 pence per Polo share (31
December 2018: 13.86 pence per share).
The Directors have reviewed the Group's budget for 2019, as well
as longer term financial cash flow projections and have considered
a range of different scenarios together with their associated risks
and uncertainties, and the impact of these scenarios on the
Company's cash balances. Additionally, the Directors have assessed
the likelihood of future funding requirements. Based on these
activities, the Directors are satisfied that the Company maintains
a healthy financial position from the date of the signing of these
financial statements, enabling Polo to take a flexible approach to
the acquisition and disposal of investments.
Outlook
With market uncertainty and volatility remaining high because of
issues such as BREXIT which could adversely impact Eurozone
economies and the potential for a softening of the Chinese economy,
Polo remains focussed on securing for shareholders a balanced risk
exposure to the natural resources sector. We have in our portfolio
a number of projects and asset classes that are widely spread
across multiple jurisdictions. It is this mixture of investments
that sit at different phases of value, but where all have the
ability to offer value release within the long term, that serve to
offer investors a broad investment risk hedge. Polo remains
focussed on supporting our current investee companies as our key
priority heading into 2019.
I would like to thank all our shareholders, partners and
advisers for their continuous and unwavering support.
Datuk Michael Tang, PJN
Executive Chairman
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 31 DECEMBER 2018
6 months ended 6 months ended Year ended
31 December 31 December
2018 2017
(unaudited) (unaudited) 30 June
2018
Note (audited)
$ 000's $ 000's $ 000's
Gain/(Loss) on sale of investments (458) - -
Investment income 72 50 241
Impairment of AFS investments - - (2,749)
Administrative & exploration
expenses (1,068) (1,041) (2,291)
Share options expensed (107) - (216)
Currency exchange gain/(loss) 6 (2) -
Group operating (loss) (1,555) (993) (5,015)
------------------- --------------- -----------
Share of associates results (527) (768) (785)
Impairment of associate - - (1,250)
Other loan provision - - (916)
Finance revenue 198 177 370
(Loss) before taxation (1,884) (1,584) (7,596)
Income tax expense - - -
Retained (loss) for the financial
period (1,884) (1,584) (7,596)
------------------- --------------- -----------
Attributable to:
Equity holders of the parent (1,884) (1,583) (7,596)
Non-controlling interests - (1) -
------------------- --------------- -----------
(1,884) (1,584) (7,596) 7,154
------------------- --------------- -----------
Earnings per share: 2
Basic earnings per share
(US cents) (0.60) (0.51) (2.44)
Diluted earnings per share
(US cents) (0.56) (0.50) (2.44)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHSED 31 DECEMBER 2018
6 months ended 6 months ended Year ended
31 December 31 December
2018 2017
(unaudited) (unaudited) 30 June
2018
(audited)
$ 000's $ 000's $ 000's
Retained (loss) for the
period (1,884) (1,584) (7,596)
Gain on market value revaluation
of available for sale investments (3,507) 16,114 20,334
Currency translation differences (83) 64 107
Other comprehensive income
for the period net of taxation (3,590) 16,178 20,441
--------------- --------------- -----------
Total comprehensive income (5,474) 14,594 12,845
--------------- --------------- -----------
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2018
31 December 31 December 30 June
2018 2017 2018
Note (unaudited) (unaudited) (audited)
$ 000's $ 000's $ 000's
Non-current assets
Tangible assets 2,475 2,475 2,475
Interest in associates 3 1,675 3,140 2,134
Available for sale investments 4 41,041 42,519 43,971
Trade and other receivables 4,050 3,843 3,941
Total non-current assets 49,241 51,977 52,521
-------------- ------------- -----------
Current assets
Trade and other receivables 3,412 3,788 3,004
Available for sale investments 4 4,762 6,758 6,816
Cash and cash equivalents 801 2,416 1,260
-------------- ------------- -----------
Total current assets 8,975 12,962 11,080
-------------- ------------- -----------
Total Assets 58,216 64,939 63,601
-------------- ------------- -----------
Current Liabilities
Trade and other payables (3,302) (3,125) (3,320)
-------------- ------------- -----------
Total Liabilities (3,302) (3,125) (3,320)
-------------- ------------- -----------
Net Assets 54,914 61,814 60,281
============== ============= ===========
Shareholders' equity
Share capital - - -
Share premium 306,714 306,714 306,714
Share based payment reserve 323 454 216
Foreign exchange reserve 17,151 17,191 17,234
Available for sale investments
reserve 16,171 15,451 19,674
Retained earnings (282,099) (274,656) (280,215)
Minority interest (3,346) (3,340) (3,342)
-------------- ------------- -----------
Total Equity 54,914 61,814 60,281
============== ============= ===========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHSED 31 DECEMBER 2018
6 months ended 6 months ended Year ended
31 December 31 December
2018 2017
(unaudited) (unaudited) 30 June
2018
(audited)
Cash flows from operating activities $ 000's $ 000's $ 000's
Operating (loss) (1,555) (993) (5,015)
Decrease/(Increase) in trade
and other receivables (408) 173 (513)
(Decrease)/Increase in trade
and other payables (18) (105) 90
Decrease/(Increase) in available
for sale investments 1,477 - (39)
Foreign exchange (gain)/ loss (6) 2 1
Share options expensed 107 - 216
Impairment of AFS investments - - 2,749
Depreciation and impairment - - -
--------------- --------------- -----------
Net cash (outflow) from operating
activities (403) (923) (2,511)
--------------- --------------- -----------
Cash flows from investing activities
Finance revenue 198 177 370
Receipts/(Payments) for investments
in associates (68) (824) (530)
Loan (advanced) to third party (109) (87) (184)
Net cash (outflow) from investing
activities 21 (734) (344)
--------------- --------------- -----------
Cash flows from financing activities
Issue of ordinary share capital - - -
Net cash (outflow) from financing - - -
activities
--------------- --------------- -----------
Net (decrease) in cash and cash
equivalents (382) (1,657) (2,855)
Cash and cash equivalents at
beginning of period 1,260 4,010 4,010
Exchange gain/(loss) on cash
and cash equivalents (77) 63 105
--------------- --------------- -----------
Cash and cash equivalents at
end of period 801 2,416 1,260
--------------- --------------- -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
FOR THE 6 MONTHSED 31 DECEMBER 2018
Available Foreign Share
for sale currency based Non-
Equity investment translation payment Retained Controlling Total
Contribution reserve reserve reserve earnings Total Interest Equity
Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $000's $ 000's
(unaudited)
As at 1 July
2018 306,714 19,674 17,234 216 (280,215) 63,623 (3,342) 60,281
(Loss) for
the period - - - - (1,884) (1,884) - (1,884)
Gain/(Loss)
on market
value
revaluation
of available
for sale
investments - (3,503) - - - (3,503) (4) (3,507)
Transfer to - - - - - - - -
income
statement
Currency
translation
differences - - (83) - - (83) - (83)
------------- ------------- ------------- --------- ---------- -------- ------------- --------
Total
Comprehensive
income - (3,503) (83) - (1,884) (5,470) (4) (5,474)
Share capital - - - - - - - -
issued
Share options - - - - - - - -
expired
Share options
charge - - - 107 - 107 - 107
Total
contributions
by and
distributions
to owners
of the
Company - - - 107 - 107 - 107
As at 31
December
2018 306,714 16,171 17,151 323 (282,099) 58,260 (3,346) 54,914
------------- ------------- ------------- --------- ---------- -------- ------------- --------
Available Foreign Share
for sale currency based Non-
Equity investment translation payment Retained Controlling Total
Contribution reserve reserve reserve earnings Total Interest equity
Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $000's $ 000's
(unaudited)
As at 1 July
2017 306,714 (682) 17,127 454 (273,073) 50,540 (3,320) 47,220
(Loss) for
the period - - - - (1,583) (1,583) (1) (1,584)
Gain/(Loss)
on market
value
revaluation
of available
for sale
investments - 16,133 - - - 16,133 (19) 16,114
Transfer - - - - - - - -
to income
statement
Currency
translation
differences - - 64 - - 64 - 64
------------- ----------- ------------ --------- ------------ --------- ------------ ---------
Total
Comprehensive
income - 16,133 64 - (1,583) 14,614 (20) 14,594
Share capital - - - - - - - -
issued
Share options
expired
Total - - - - - - - -
contributions
by and
distributions
to owners
of the Company
As at 31
December
2017 306,714 15,451 17,191 454 (274,656) 65,154 (3,340) 61,814
------------- ----------- ------------ --------- ------------ --------- ------------ ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
(continued)
FOR THE 6 MONTHSED 31 DECEMBER 2018
Equity Available Foreign Share Retained Total Non- Total
Contribution for sale currency based earnings Controlling equity
investment translation payment Interest
reserve reserve reserve
Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $000's $ 000's
(audited)
As at 1 July
2017 306,714 (682) 17,127 454 (273,073) 50,540 (3,320) 47,220
(Loss) for
the period - - - - (7,596) (7,596) - (7,596)
Gain on market
value
revaluation
of available
for sale
investments - 20,356 - - - 20,356 (22) 20,334
Currency
translation
differences - - 107 - - 107 - 107
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
Total
Comprehensive
income - 20,356 107 - (7,596) 12,867 (22) 12,845
Share options
expired - - - (454) 454 - - -
Share options
charge - - - 216 - 216 - 216
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
Total
contributions
by and
distributions
to owners of
the Company - - - (238) 454 216 - 216
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
As at 30 June
2018 306,714 19,674 17,234 216 (280,215) 63,623 (3,342) 60,281
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE 6 MONTHSED 31 DECEMBER 2018
1. Basis of preparation
The consolidated financial statements have been prepared under
the historical cost convention and on a going concern basis and in
accordance with International Financial Reporting Standards and
IFRIC interpretations adopted for use in the European Union
("IFRS") and those parts of the BVI Business Companies Act
applicable to companies reporting under IFRS.
The financial information for the period ended 31 December 2018
has not been audited or reviewed in accordance with the
International Standard on Review Engagements 2410 issued by the
Auditing Practices Board. The figures were prepared using
applicable accounting policies and practices consistent with those
adopted in the statutory accounts for the period ended 30 June 2018
and as expected to be adopted in the statutory accounts for the
year ending 30 June 2019. The figures for the period ended 30 June
2018 have been extracted from the accounts for the period ended 30
June 2018, which are available on the Company's website at
www.poloresources.com, and contain an unqualified audit report.
The financial information contained in this document does not
constitute statutory financial statements. In the opinion of the
directors the financial information for this period fairly presents
the financial position, results of operations and cash flows for
this period.
Statement of compliance
These condensed consolidated interim financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union with the
exception of International Accounting Standard ('IAS') 34 - Interim
Financial Reporting. Accordingly the interim financial statements
do not include all of the information or disclosures required in
the annual financial statements and should be read in conjunction
with the Group's 2018 annual financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Polo Resources Limited and its controlled entities.
The financial statements of controlled entities are included in the
consolidated financial statements from the date control commences
until the date control ceases.
The financial statements of subsidiaries are prepared for the
same reporting period as the parent company, using consistent
accounting policies. All inter-company balances and transactions
have been eliminated in full.
Foreign currencies
(a) Functional and presentation currency
The functional currency of each entity is determined after
consideration of the primary economic environment of the entity.
The group's presentational currency is US Dollar ($).
(b) Group companies
The results and financial position of all the group entities are
translated into the presentation currency as follows:
-- Assets, liabilities and equity for each balance sheet
presented are translated at the closing rate at the date of that
balance sheet;
-- Income and expenses for each income statement are translated at average exchange rates; and
-- All resulting exchange differences are recognized as a separate component of equity.
(c) Rates of exchange
US$ to one unit of foreign currency were as follows:
Average for Average for
As at 31 the As at 30 the period
December 6 months to June 2018 to 30 June
2018 31 December 2018
2018
Pound Sterling 1.26902 N/A 1.31515 N/A
Australian
Dollar 0.70322 N/A 0.73852 N/A
Canadian Dollar 0.73297 N/A 0.75760 N/A
Singapore Dollar 0.73134 N/A 0.73308 N/A
----------- ------------- ------------ ------------
2. Earnings per share
The calculation of earnings per share is based on the (loss)
after taxation divided by the weighted average number of shares in
issue during the period:
6 Months ended 6 Months ended
31 December 31 December
2018 2017
(unaudited) (unaudited) Year 30 June
2018
(audited)
Net (loss) after taxation
($000's) (1,884) (1,584) (7,596)
Weighted average number
of ordinary shares used
in calculating basic earnings
per share (millions) 311.79 311.79 311.79
--------------- --------------- --------------
Basic (loss) per share
(expressed in US cents) (0.60) (0.51) (2.44)
--------------- --------------- --------------
Weighted average number
of ordinary shares used
in calculating fully diluted
earnings per share (millions) 339.29 313.79 311.79
--------------- --------------- --------------
Diluted (loss) per share
(expressed in US cents) (0.56) (0.50) (2.44)
--------------- --------------- --------------
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The company
has one category of dilutive potential ordinary shares, namely
share options. For share options, a calculation is done to
determine the number of shares that could have been acquired at
fair value (determine as the average period market share price of
the company's shares) based on the monetary value of the
subscription rights attached to outstanding share options. The
number of shares calculated as above is compared with the number of
shares that would have been issued assuming the exercise of the
share options.
3. Interest in associates
2018
$ 000's
Group
At beginning of the period 2,134
Investments in associates - equity
purchases 68
Share of associates' loss for the period (527)
As at 31 December 2018 1,675
-----------
The breakdown of the carrying values and fair values at
the balance sheet date of the Group's interest in listed
and unlisted associates is as follows:
Non-current assets Carrying Fair Value
Value
$ 000's $ 000's
GCM Resources Plc (listed) 1,167 5,655
Celamin Holdings Ltd (listed) 508 479
1,675 6,134
--------- -----------
The breakdown of the fair values as at 21 March 2019 of
the Group's interest in listed and unlisted associates is
as follows:
Non-current assets Fair Value
$ 000's
GCM Resources Plc (listed) 6,244
Celamin Holdings Ltd (listed) 1,134
7,378
-----------
4. Available for sale investments
Group - Listed & Unlisted Investments $ 000's
At 1 July 2018 50,787
Acquired during the period -
Disposal during the period (1019)
Realised gain / (loss) on disposal (458)
Movement in market value (3,507)
--------
At 31 December 2018 45,803
--------
The available for sale investments splits
are as below:
Non-current assets - listed 31,514
Non-current assets - unlisted 9,527
Current assets - listed 3,965
Current assets - unlisted 797
--------
45,803
--------
Available-for-sale investments comprise investments in unlisted
and listed securities (which are traded on regulated stock markets)
and which are held by the Group as a mix of strategic and short
term investments.
5. Events after the end of the reporting period
There are no events after the end of the reporting period to
disclose.
6. Financial information
The financial information set out above does not constitute the
Group's statutory accounts for the period ended 30 June 2018, but
is derived from those accounts. Statutory accounts for the period
have been delivered to the shareholders, and the auditors made an
unqualified report thereon.
A copy of this interim financial report will be available on the
Company's website (www.poloresources.com) later today.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR PGUCWWUPBURB
(END) Dow Jones Newswires
March 29, 2019 04:39 ET (08:39 GMT)
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