Half-yearly report
26 March 2008
NEPTUNE MINERALS PLC
("Neptune" or the "Company")
INTERIM RESULTS
For the six
months ended 31 December 2007
Neptune Minerals Plc (AIM: NPM), the AIM listed explorer and
developer of Seafloor Massive Sulphide ("SMS") deposits is pleased to
announce its interim results for the six months ended 31 December
2007.
Highlights:
Two new hydrothermally inactive SMS zones were discovered on the
Rumble II West seamount in the Company's New Zealand prospecting
licence PL39-195 (Kermadec), over which Neptune is preparing to make
its first mining licence application.
A conceptual engineering scoping study was commissioned in October
2007 to review existing and potential technologies that may be used
for the commercial development of SMS deposits.
Project Trident was announced - Trident is a program of continuous
SMS exploration planned to commence in 2008 and using dedicated
survey and sampling vessels, offshore New Zealand. Funding
discussions with potential joint venture partners and contract
negotiations for Trident operations are ongoing.
Exploration licences were granted in Papua New Guinea and Vanuatu
waters - granted exploration tenements now total 278,000 km2 within
the Exclusive Economic Zone ("EEZ") of New Zealand, Papua New Guinea,
the Federated States of Micronesia and Vanuatu.
Further applications for exploration licences were lodged in New
Zealand, bringing the total area under application to 434,000 km2
within the waters of New Zealand, Japan, Commonwealth of Northern
Mariana Islands, Palau and Italy.
The Company's second and third New Zealand exploration programs;
Kermadec 07 and Colville-Monowai 2007, were completed in August
2007. In July and August 2007, Neptune also participated in a joint
Canadian-German research program over the Company's Italian
application areas.
Neptune's management team was strengthened with the appointment of a
Corporate Development Manager and an Environment Manager in late
2007.
Post-reporting period events:
Neptune's management team was further strengthened with the addition
of a Contracts & Procurement Manager and a New Zealand Country
Manager.
Neptune signed a Letter of Intent in March 2008 with C&C
Technologies, one of the world's leading marine survey companies, for
the provision of autonomous underwater vehicle survey, sampling and
vessel charter services. The L.O.I. commits both parties to contract
negotiations and project preparations towards Project Trident.
Dr Simon McDonald, CEO of Neptune, said:
"Following the location of inactive SMS zones within Neptune's New
Zealand tenements, the Company is focussed on lodging its first
mining licence application. The Company still aims to conduct trial
mining by 2010. Neptune is building up its management capabilities to
support the Company's growth and transition from SMS explorer to SMS
developer.
"At the same time, Neptune is planning to step up its exploration
activities to pursue the Company's vast opportunities. In the past 12
months, Neptune's tenement acreage has increased by 650%. We are
progressing discussions with potential joint venture partners to farm
into Neptune's New Zealand licences and participate in Project
Trident."
The interim results for the six months ended 31 December 2007 will be
posted to shareholders and are available on the Company's website
www.neptuneminerals.com. Extracts from these financial statements are
set out below.
- -END-
For further information please contact:
Simon McDonald (Neptune MD and CEO) T: +61 (0)2 9957 5244
By email to the Company info@nepmins.com
Richard Hail (Fox Davies Capital Limited, T: +44 (0)20 7936 5200
Broker)
Fiona Owen (Grant Thornton Corporate Finance, T: +44 (0)20 7383 5100
Nomad)
Rozanne Ichikowitz (Grant Thornton Sydney) T: +61 (0)2 8297 2522
Nadja Vetter / Matthew Law (Cardew Group, PR) T: +44 (0)20 7930 0777
M: +44 (0)7941 340 436
The Neptune Minerals website is www.neptuneminerals.com
CHIEF EXECUTIVE'S STATEMENT
I am pleased to report the interim results of Neptune Minerals Plc
("the Company" or "Neptune") for the six-month period to 31 December
2007.
NEW ZEALAND EXPLORATION
In August 2007 following the conclusion of the Kermadec 07
exploration program, Neptune announced that it had discovered two new
hydrothermally inactive SMS zones on the Rumble II West seamount in
the Company's New Zealand prospecting licence PL39-195 (Kermadec).
The Company is currently preparing to lodge a mining licence
application over this area to the New Zealand government.
Also in August 2007, Neptune completed its third New Zealand
exploration program using initial IPO funds, Colville-Monowai 07. The
Company acquired 20,000km2 of ship-mounted multi-beam bathymetry
("swath") data over PL39-194 (Monowai) and 8,000km2 of swath data
over PL39-205 (Colville).
This data has been analysed as part of a thorough structural
interpretation of Neptune's New Zealand tenements. The structural
review highlighted at least 150 high-priority structural targets for
follow up in Project Trident and formed the technical basis for
Neptune's new application areas within New Zealand waters.
Neptune is currently undertaking a baseline environmental impact
assessment of the Kermadec licence area for its Mining Licence
Application ("MLA"). Monitoring and measuring activities of the
Environmental Impact Assessment ("EIA") associated with the MLA will
be run off the RV Tangaroa later in 2008.
Neptune is awaiting completion of a conceptual engineering scoping
study commissioned with the French marine engineering firm, Technip
and Dutch dredging company, Boskalis in October 2007. This study was
designed to review and assess existing marine equipment and
technologies for SMS mining and lifting, to be assessed for
preliminary costing, operational reliability, capacity and
environmental issues. Neptune will evaluate this report with a view
to proceeding to pilot testing of the Kermadec prospect and a mining
pre-feasibility study.
PROJECT TRIDENT
Neptune announced in August 2007 its intention to undertake a program
of continuous exploration called Project Trident, to focus on
Neptune's New Zealand tenements. Neptune is progressing negotiations
with potential partners to farm into Neptune's New Zealand licences
and fund Project Trident through a joint venture.
Neptune signed a Letter of Intent in March 2008 with C&C
Technologies, one of the world's leading marine survey companies, for
the provision of autonomous underwater vehicle survey, sampling and
vessel charter services. The L.O.I. commits both parties to contract
negotiations and project preparations towards Project Trident.
EXPLORATION LICENCE GRANTS
In October 2007, Neptune was granted 10 prospecting licences ("PL's")
in the EEZ of Vanuatu covering a total area of 914km2, and in
November 2007, was granted seven exploration licences ("EL's") in the
EEZ of Papua New Guinea covering a total area of 13,345km2. In the
past 12 months, Neptune has increased its tenement acreage by 650%
and now has 278,000 km2 of SMS-prospective seafloor granted in New
Zealand, Papua New Guinea, the Federated States of Micronesia and
Vanuatu.
Vanuatu licences
Prospecting licences PL 1627-1636 were granted to Neptune Minerals
(Vanuatu) Limited, a wholly-owned subsidiary of the Company. Each
licence has been granted for an initial three-year period, with a
work commitment during that time to complete high resolution surface
mapping and geophysics and to collect surface and sub-surface
samples. The cumulative work commitment costs for these licences are
US$28,000 in year 1 and US$1.6 million in year 2.
The tenements are contiguous and cover the Gemini-Oscostar Volcanic
Complex, part of the New Hebrides Arc and situated south of Aneityum,
the southernmost island of Vanuatu. Exploration over this area by
researchers from Australia's Commonwealth Scientific and Industrial
Research Organisation ("CSIRO") in 2004, recovered sulphide rock
samples by dredging and detected hydrothermal activity. Both are
strong indications of the presence of SMS mineralisation.
PNG licences
Seven licences were granted to Neptune Minerals (PNG) Limited, a
wholly-owned subsidiary of the Company. Each has been granted for an
initial two-year period, with a work commitment to complete high
resolution surface mapping and geophysics as well as to collect
surface samples during that time. The cumulative work commitment
costs for these licences are US$0.6 million in year 1 and US$1.2
million in year 2.
Five tenements (EL 1554 to EL 1558) cover prospective seamounts and
other features that surround, and are submerged parts of, the island
groups that comprise the Tabar-Feni Arc. Numerous epithermal gold
deposits occur on these islands, including the Ladolam Deposit on
Lihir Island, one of the world's largest gold resources (43Moz
contained gold) and producing at 750Koz gold per year; and the 2.4Moz
Simberi gold deposit in the Tabar Islands where gold production began
in late 2007.
The target is high-grade epithermal gold mineralisation similar to
that sampled and drilled by joint British and German research cruises
on Conical Seamount 10km to the south of Lihir Island, and covered by
Neptune's licence (EL 1425). Previous grab-sampling at the summit of
Conical Seamount in 1999 and 2002 recovered distinctive
epithermal-style polymetallic veins with gold grades reaching 230g/t
Au, averaging 25g/t Au from 40 samples.
Research drilling at the summit plateau of Conical Seamount in 2002
(39 holes, 31% average recovery) confirmed the sub-seafloor extent of
surface gold mineralisation and associated alteration to depths of at
least 4.5m. Drill core samples of clay-silica alteration contained
average gold grades of 14.2g/t Au over a length of about 30cm and
appear to be part of a more extensive gold zone.
Two tenements (EL 1541 Klotsu and EL 1542 Namel) are situated in the
central Bismarck Sea, adjacent to a granted EL which has been the
subject of intensive commercial SMS exploration and scientific
research. Both tenements cover structural features related to SMS
mineralisation processes in the adjacent EL.
NEW VENTURES APPLICATIONS
In November 2007, Neptune lodged three PL applications in the EEZ of
New Zealand. The three licences, numbered PLA 50-468 to PLA 50-470,
have a total area of 84,880 km2 and cover SMS prospective areas
adjacent to Neptune's granted PL 39-194 (Monowai) and PL 39-205
(Colville).
ADDITIONS TO NEPTUNE MANAGEMENT TEAM
In October 2007, Neptune strengthened its management team with the
appointments of Glen Parsons as Corporate Development Manager and
Glenn Creed as Environment Manager.
Glen Parsons has over 15 years' international experience in corporate
finance, treasury and general management. During this time he has
built new teams and divisions within various organisations. He became
an executive director of RFC Corporate Finance Ltd, a minerals
resources investment bank. Glen has specific AIM experience as a
nominated advisor (Nomad) and has been involved with a number of
successful equity and debt raisings for junior and developing mining
companies.
Glenn Creed has 13 years' experience in environment and safety
management within the mining and construction industry, throughout
Australia and internationally. He was part of Placer Dome's global
EHS team, and as such was responsible for the environmental
management of Placer Dome's deep sea mineral exploration. This
involved the design, coordination and management of deep sea
monitoring and scientific research programs. Glenn has also held the
position of Vice President of Sustainability for Nautilus Minerals
Inc.
EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
During the first quarter of 2008, Neptune further strengthened its
management team with the appointment of Contracts & Procurement
Manager, Peter Wong and New Zealand Country Manager, Campbell
McKenzie.
Peter Wong has 20 years' experience in the fields of supply and
contract management, procurement, outsourcing and engineering
construction cost management. In the last 15 years, he has worked in
the oil and gas industry in the United Arab Emirates, Yemen, Egypt,
Brunei, PNG and Russia. He has successfully executed and managed the
contracting, procurement and supply chain management for onshore and
offshore drilling and construction projects.
Campbell McKenzie has 12 years' experience in the minerals industry
in both private and public sectors. He was previously manager of the
minerals unit at the Crown Minerals Group of the Ministry of Economic
Development of New Zealand, where he led a team that assessed and
made recommendations on all applications made to prospect, explore or
mine the NZ mineral resource estate. He has also worked as a
geologist with several Australian-based companies over a period of
nine years.
KEY OBJECTIVES
The Company's key objectives remain to grow Neptune's value and
business model by refining the exploration techniques for SMS
deposits; by adding prospective SMS areas to Neptune's exploration
portfolio and by attracting strategic partnerships and exploration
joint venture partners.
CASH POSITION
Neptune's cash position as at 31 December 2007 was �3.1 million. As
at the end of February 2008 the Company's cash position was �2.6
million.
Dr Simon McDonald
CEO and Managing Director
25 March 2008
NEPTUNE MINERALS PLC
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 December 2007
Six months Six months Financial
ended ended Year
31 December 31 December ended
2007 2006 30 June 2007
(unaudited) (unaudited) (audited)
Note �'000 �'000 �'000
Administrative expenses (1,219) (552) (864)
Other operating expenses (9) - (13)
Operating Loss (1,228) (552) (877)
Investment income 111 109 228
Loss for the period before
taxation (1,117) (443) (649)
Taxation - - -
Loss after taxation (1,117) (443) (649)
Loss per share (in pence)
Basic 6 (1.7p) (1p) (1.1p)
Diluted 6 (1.0p) (1p) (1.1p)
The notes on pages 5 to12 form part of these financial statements.
The income statement has been prepared on the basis that all
operations are continuing.
NEPTUNE MINERALS PLC
CONSOLIDATED BALANCE SHEET
As at 31 December 2007
As at As at As at
31 December 31 December 30 June 2007
2007 2006
(unaudited) (unaudited) (audited)
Note �'000 �'000 �'000
Assets
Non-current assets:
Intangible assets 7 6,315 2,583 4,336
Property, plant and
equipment 26 21 17
6,341 2,604 4,353
Current assets:
Trade and other receivables 15 9 138
Cash and cash equivalents 3,093 4,731 5,927
3,108 4,740 6,065
Total assets 9,449 7,344 10,418
Equity and liabilities:
Capital and reserves
Share capital 9 330 288 323
Share premium 10 11,521 8,789 11,119
Share option reserve 10 817 392 392
Retained profits (3,355) (2,161) (2,460)
Total equity 9,313 7,308 9,374
Current liabilities
Trade and other payables 136 36 1,044
Total liabilities 136 36 1,044
Total equity and
liabilities 9,449 7,344 10,418
The notes on pages 5 to 12 form part of these interim financial
statements.
Approved by the Board on 25 March 2008 and signed on its behalf by
Simon McDonald.
DIRECTOR: _________________________________
NEPTUNE MINERALS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2007
Share Share Share Retained Total
option Capital Premium Earnings
reserve
�'000 �'000 �'000 �'000 �'000
Balance at 30 June 2006 392 288 8,789 (1,946) 7,523
(audited)
Exchange differences on
translating foreign - - - 228 228
operations
Loss for the period - - - (443) (443)
Share option benefit - - - - -
Ordinary Shares issued - - - - -
Premium on shares issued - - - -
Balance at 31 December 2006 392 288 8,789 (2,161) 7,308
(unaudited)
Exchange differences on
translating foreign - - - (93) (93)
operations - - - (206) (206)
Loss for the period - - - - -
Share option benefit - 5 - - 35
Ordinary shares issued - - 2,330 - 2,330
Premium on shares issued
Balance at 30 June 2007 392 323 11,119 (2,460) 9,374
(audited)
Exchange differences on
translating foreign - - - 222 222
operations
Loss for the period - - - (1,117) (1,117)
Performance share benefit
(note 10 (c)) - 3 205 - 208
Share option benefit (note 426 - - - 426
10 (a))
Ordinary Shares issued (note - 4 - - 4
9)
Premium on shares issued - - 196 - 196
Balance at 31 December 2007 818 330 11,520 (3,355) 9,313
The notes on pages 5 to 12 form part of these interim financial
statements.
NEPTUNE MINERALS PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2007
Six month Financial
Six months ended Year
ended 31 December ended
31 December 2007 2006 30 June 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Operating Activities
Operating loss (1,228) (552) (877)
Adjustment for:
Performance Share Benefit 208 - -
Share option benefit 426 - -
Foreign Exchange (179) - (194)
Depreciation 9 1 13
Operating cash flow before
changes in working capital (764) (551) (1,058)
Increase in trade and other
receivables 123 93 (36)
Increase in trade and other
payables (908) (118) 890
Net cash used in operating
activities (1,549) (576) (204)
Investing Activities
Purchase of property, plant
and equipment (18) (4) (9)
Intangibles (1,694) (223) (1,581)
Net cash used in investing
activities (1,712) (227) (1,590)
Financing activities
Interest received 111 109 228
Issue of share capital 200 - 2,530
Cost of share issue - - (165)
Net cash from financing
activities 311 109 2,593
Net increase in cash and
cash equivalents (2,950) (694) 799
Cash and cash equivalents
at beginning of period 5,927 5,197 5,197
Effect of foreign exchange
rate changes 116 228 (69)
Cash and cash equivalents
at 31 December 2007 3,093 4,731 5,927
The notes on pages 5 to 12 form part of these interim financial
statements.
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