TIDMROSE
RNS Number : 3120A
Rose Petroleum PLC
28 September 2015
ROSE PETROLEUM PLC
("Rose", the "Group" or the "Company")
INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2015
The Board of Rose is pleased to present its report for the six
month period to 30 June 2015.
REVIEW OF ACTIVITIES
OVERVIEW
The Board believes that its oil and gas portfolio is of a scale
and quality to deliver long term Shareholder value. The assets were
acquired due to their prospectivity, size, location, and relatively
low breakeven price. Following the purchase of these assets, the
Company started to implement its development plan in line with its
previously stated strategy of unlocking the value of the
portfolio.
However, with the uncertainty of the current market conditions,
the Board has initiated a review of its strategy, assets and cost
base to ensure that its existing capital is optimally deployed
across the Group. As a result, the operational plans that were put
in place twelve months ago have been revised to reflect the current
operating environment and a rationalisation of expenditure across
the Group has been carried out. While the cost cutting has been
radical and far-reaching, the Group has retained an operational
capability sufficient to meet its commitments for the foreseeable
future. We believe the Group is now well-positioned to maintain its
assets.
As well as protecting the existing asset base, we are confident
that the Group can take advantage of potential acquisition
opportunities that might arise due to the current challenging
environment in the sector. The Company is utilising two investment
banks to help develop and fund these potential opportunities.
A full review of the developments over the period is outlined
below. It explains the development chronology and rationale behind
the current strategy. Additionally, a review of the non-oil and gas
assets is provided. These assets are constantly being assessed to
ascertain the most effective way of realising value.
OIL AND GAS DIVISION
The prime focus during the period has been the Uinta Basin,
specifically, the Mancos Formation. The development chronology and
rationale is reported below:
Uinta Basin (Mancos) activity:
The State 1-34 Mancos well was drilled to a total depth of 3,200
feet ('ft') at the beginning of the year to penetrate the Mancos
formation and retrieve whole and rotary core samples. It also
provided us with a full suite of electric logs for establishing
critical rock properties to calibrate with the Ryder Scott resource
analysis carried out in 2014. Mud logs indicated the presence of
hydrocarbons in both the Mancos and in the conventional sands
below. Results from core samples were extremely encouraging and
reiterated the potential of this acreage. The core results matched
or surpassed the parameters used by Ryder Scott for the Mancos
Shale resource calculation of 709 MMB of oil and 4.26 TCF of gas
for key criteria. Specifically:
-- Total Organic Content ('TOC') used by Ryder Scott was 1.5-2%.
The State 1-34 has an average background of 1.5-2% with a 150 ft
'kitchen' interval in the Ferron Member of TOC between 2.75% and up
to 4.5%;
-- Potential target reservoir or 'carrier' beds identified in
the same four Ryder Scott-defined Mancos intervals with porosities
in the 6-9% range;
-- State 1-34 average porosities 0.5-1% higher than the Ryder Scott study (P50 values);
-- State 1-34 hydrocarbon (oil) saturations both in core and in
situ are in line with the Ryder Scott study;
-- Net potential 'carrier' beds to gross interval ratios are comparable with Ryder Scott; and
-- Thermal maturity ('Tmax') confirms that the State 1-34 is
within the 'Intensive Generation and Expulsion' window for the
Ferron Member.
With the expected potential for early revenue and cash flows
from the conventional opportunity below the Mancos, a completion
was carried out on four selected intervals. These intervals were
perforated and flow tested, but none were deemed to be commercial
by virtue of the intersection of a vertical fault that was breached
with water. The well is currently shut in pending completion of the
Mancos core analysis, which was the primary objective of this well.
Although the results from the conventional completion programme
were disappointing, they should not overshadow the prospectivity
and potential large scale nature of the Mancos Shale, which has
always been the initial target of the O&G portfolio.
The permitting application process in relation to five new
Mancos wells was initiated in order to submit the Authority for
Permit to Drill ('APD') to the Bureau of Land Management ('BLM').
HRL Compliance Solutions and Uintah Engineering and Land Surveying
completed the internal location site evaluation in respect of the
Environmental Assessment ('EA') requirements and completed the
reports to submit to the BLM. Subject to approval, the Group
anticipated commencing drilling of the first of these new wells in
late 2015. However, as previously announced, in view of the oil
price environment, the Board has revised its Mancos strategy. In
order to seek to deliver value while prudently conserving cash,
Rose is now focusing on one permit initially, within the Cisco Dome
area, for the Federal 1-15 20-21 horizontal well. The APD has now
been submitted to the BLM, with the required archaeology,
paleontology, and biological studies having been completed for the
1-15 20-21 horizontal location. The location of the Federal 1-15
20-21 horizontal well was selected by an in-house geological study
of over 75 wells consisting of Rose-operated wells and wells
developed by third parties, where the existing well bores targeting
the deeper conventional gas field penetrated the Mancos. This
review was crucial in determining correct orientation and dip rates
and provided a more intimate understanding of the fault/fracture
system in the field. The Mancos formation is deeper into the basin
and benefits from the availability of the superior well control
data in this area. The Directors believe that due to the excellent
infrastructure, once a successful well has been completed, oil and
gas sales will follow shortly thereafter.
There are active discussions taking place with a number of third
parties in respect of the funding for the Mancos drill programme.
Once the permitting process for the 1-15 20-21 is completed and
timings known these discussions will be accelerated in the hope
that the funding for the programme can be secured.
Cisco Dome Acquisition
In Q4 2014, the Group made an add-on acquisition with the
purchase of the Cisco Dome Field consisting of 76 miles of
mid-stream gathering system, a gas processing plant, compressor
station and, importantly, a main pipeline tap into the Williams
natural gas pipeline. This acquisition added over 11,000 acres to
the Group's Mancos holdings and gave the Group control of its own
mid-stream gathering and processing capability in the area.
During the first six months of the period, the Rose field team
implemented a number of well enhancement procedures consisting of
dropping plunger lift systems into three wells and bringing four
wells back on line which had been shut in since the original
purchase. Two of the three plunger lift systems implemented
improved the stability of gas production and unloading well
liquids. However, due to the current gas price environment and a
weather related outage, the plant is currently suspended allowing
us to undertake a detailed review of operations. The outage does
not have a material financial impact on the business.
Paradox Basin
In late 2014, the Group began permitting a 61 square mile 3-D
seismic survey over its Paradox leasehold. Pending completion of
permitting and the availability of sufficient funding, the Group
plans to begin the survey in early Q1 2016. Since the end of Q1
2015, all field work for the cultural and environmental assessments
as well as field surveying for transmitter and receiving lines has
been completed. The Rose team believes permitting approval is
possible by the end of 2015, which will then enable actual
acquisition work to commence. The Board feels the 3D seismic will
add significant value to the Company and will be reviewing its
options on funding before proceeding. Once the seismic data is
processed and interpreted, it is expected that the Group will be
able to select its first Paradox well location.
Potential Acquisitions
The Board continues to assess opportunities to introduce
productive assets to Rose's portfolio. The Board believes the
current environment provides an opportunity to acquire high quality
assets with stable income which are non-core to other companies.
Accordingly, the Company has engaged both Jefferies International
Limited and Wellford Capital Markets to assist in the evaluation
and funding of potential targets. The team has identified key
target basins and are reviewing opportunities in the Marcellus, DJ
Basin, Eagle Ford, and Permian. The DJ Basin is our prime focus,
where our team has significant operational knowledge and
experience.
MINING DIVISION
Gold / Silver Production - Mina Charay, Mexico
Mine production continued throughout the period from the Mina
Charay mine in northern Sinaloa, Mexico. By the end of June, ore
production had reached the forecasted rate of 100 tonnes/day.
A total of 10,286 tonnes of ore were mined during the period,
and of this total, 8,385 tonnes of were processed at the Company's
flotation mill and laboratory ('SDA') located near the town of
Acaponeta in Nayarit. This tonnage yielded 1,128 ounces ('oz ') of
gold and 8,670 oz of silver. The average mill head grade for period
averaged 5.89 grammes per tonne (g/T) gold and 63.5 g/T silver. Due
to the metallurgical processing and the oxide nature of the
near-surface ore, recoveries for the period averaged 71% for gold
and 50.6% for silver. These recoveries were lower than planned.
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Both grade and recoveries are expected to increase as the mine
is developed in sulfide ore at deeper levels. Early production was
to the 30 metre ('m') level which is above the 50m average level of
the resource calculation. The Company has been conducting
metallurgical tests to determine if a solution to improve
recoveries in the oxide ore at the higher levels is possible.
Unfortunately, operational efforts have been overshadowed by the
continued decline in metals prices. Gold reached a high for the
period of US$1,302/oz in January and as of June 30 was US$1,172/oz
and post-period has hovered around US$1,100/oz. This, combined with
the low recoveries, has put a strain on the operation.
Against the challenging gold price and operational backdrop, the
Company is keeping the performance of Mina Charay under continual
review.
Copper and Molybdenum Porphyry Exploration, Mexico
During 2015, the Company has been active in preparing permit
applications for drilling on the Tango project located
approximately 70km east of the city of Mazatlán in southern
Sinaloa. This will be the first drilling to evaluate the separate
copper and molybdenum porphyry occurrences. In addition, drill
permit applications are being prepared to evaluate the vein on
which the San Agustin Mine is situated, in an effort to outline
additional gold and silver resources for the Company's SDA mill.
Applications were completed and submitted after the period end. The
drilling permits are expected to be received during H2 2015.
Porphyry Copper Exploration, Southwest U.S.A.
Property positions are being maintained at minimal cost on
several prospective targets in southwest New Mexico and southern
Arizona. This includes the Ardmore, Cherry Creek, Lone Hills,
McGhee Peak, and Railroad Well projects. The properties and
programme are on care and maintenance while Rose looks for a
partner to fund exploration. Given the continued inactivity on
these projects, the Board has taken the decision to write off their
carrying value.
U.S.A. Uranium Exploration
In February 2015, and in line with the Board's decision to
divest the Group's uranium assets, the Company sold its 50%
interest in the Wate breccia pipe project to Energy Fuels
Resources, Inc. ('EFR'). As consideration for the 50% interest in
the Wate project, EFR paid US$250,000 cash to Rose at closing,
along with a US$500,000 non-interest-bearing promissory note,
payable in two equal instalments of US$250,000 on each of the first
and second anniversaries of the closing, and a 2% production
royalty on EFR's stake in the project. The royalty can be purchased
by EFR upon payment to Rose's wholly owned subsidiary, VANE
Minerals (US) LLC ('VANE'), of an additional US$750,000, less any
royalties previously paid. In addition, upon meeting certain
regulatory milestones, the deferred payments due under the note
will be accelerated. In addition, EFR will pay an additional
US$250,000 cash to VANE resulting in a total sales price of US$2M
assuming the full value of the royalty is realised.
The remainder of the Company's uranium assets and programme,
operated by VANE, are being managed on a care and maintenance
basis. These assets are spearheaded by the 50:50 joint venture with
Anfield Resources Inc. in northern Arizona which maintains a land
position covering a number of breccia pipe targets on both State of
Arizona and federal lands. The targets on federal lands are located
in an area that was withdrawn in 2012, but ongoing litigation by
outside parties challenging the withdrawal order continues to
present the possibility that these lands could be re-opened.
The Company also holds land positions in Utah covering the North
Wash uranium-vanadium project and a State of Utah lease on an
exploration property adjacent to the Energy Queen Mine owned by
EFR. The Company continues to seek potential buyers for these
assets.
Group Structure
The Company's oil & gas division and mining division are run
and operated on a stand-alone basis. The Board believes that this
will enable it to divest the mining assets at the appropriate time,
should suitable opportunities arise, as they continue to focus on
Rose's oil and gas assets.
FINANCIAL REVIEW
The financial information is reported in United States Dollar
('US$')
Revenue
Revenue for the period was generated primarily from the
Company's gold mining and milling operations in Mexico. The Income
Statement reports total revenue for the six months ended 31 June
2015 of US$1.2 million (2014: US$2.3 million). The reduction in
revenues was primarily the result of the cessation of activities at
a number of the gold projects during 2014 and the gradual start-up
of the Mina Charay mine during 2015.
Income Statement
The Group reports a net loss after tax of US$6.1 million or 0.4
US cents per share for the six months ended 30 June 2015 (2014: net
loss after tax of US$1.8 million or 0.22 US cents per share). An
impairment of the Group's U.S.A. copper exploration and evaluation
assets resulted in a charge of US$2.34 million (2014: nil) to the
income statement in the period. The income statement also includes
a 'non-cash' charge of US$0.97 million (2014: US$0.15 million)
relating to the issue of share options.
The full financial impact of the current reorganisation and cost
reductions will be visible in the 2015 full year numbers.
Balance Sheet
Cash and cash equivalents at 30 June 2015 were US$6.1 million
(2014: US$9.3 million). During the period the Company raised gross
proceeds of GBP3.1 million through the placing of the Company's
Ordinary shares. Current cash is circa. US$4.0 million.
OUTLOOK
Shareholder returns remain the Board's principal objective and
we believe that with active stewardship, we can not only preserve
our assets in the current market conditions, but also take
advantage of opportunities within the sector as they arise.
The Board would like to thank all the staff, consultants and
advisers to Rose, as well as the continuing support of
Shareholders.
Rt Hon Earl of Kilmorey PC MC Idiens
Chairman Chief Executive Officer
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2015
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
Notes US$'000 US$'000 US$'000
Continuing operations
Revenue 2 1,224 2,266 3,097
Cost of sales (1,699) (1,687) (3,052)
Profit share payments - (462) (490)
----------- ----------- ------------
Gross (loss)/profit (475) 117 (445)
Operating, development and administrative
expenses (2,627) (1,412) (3,605)
Impairment of intangible exploration
and evaluation assets 3 (2,340) - (969)
Share-based payments (967) (145) (763)
Other income - 25 -
Loss on disposal of assets held
for sale 8 (35) - -
----------- ----------- ------------
Operating loss (6,444) (1,415) (5,782)
Finance income 5 3 8
Finance costs (34) (92) (91)
----------- ----------- ------------
Loss before taxation (6,473) (1,504) (5,865)
Taxation 4 359 (288) (13)
----------- ----------- ------------
Loss for the period attributable
to owners of the parent company 5 (6,114) (1,792) (5,878)
=========== =========== ============
Loss per Ordinary Share
Basic and diluted, cents per share 6 (0.40) (0.22) (0.55)
=========== =========== ============
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
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For the six months ended 30 June 2015
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
Loss for the period attributable
to owners of the parent company (6,114) (1,792) (5,878)
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss, net of tax
Foreign currency translation differences
on foreign operations (758) 604 (1,146)
Net (loss)/gain on hedge of net investment
in foreign operations (132) (398) 1,535
----------- ----------- ------------
(890) 206 389
----------- ----------- ------------
Total comprehensive income for the
period attributable to owners of
the parent company (7,004) (1,586) (5,489)
=========== =========== ============
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2015
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
Notes US$'000 US$'000 US$'000
Non-current assets
Intangible assets 7 11,610 6,943 9,947
Property, plant and equipment 729 930 823
Deferred tax asset - - 404
Other receivables 8 250 - -
----------- ----------- ------------
12,589 7,873 11,174
-----------
Current assets
Inventories 459 581 57
Trade and other receivables 1,391 2,467 1,007
Cash and cash equivalents 6,089 9,310 8,408
Assets held for sale 8 - 325 785
----------- ----------- ------------
7,939 12,683 10,257
-----------
Total assets 20,528 20,556 21,431
===========
Current liabilities
Trade and other payables (1,808) (2,081) (2,377)
Taxation payable (25) - (56)
----------- ----------- ------------
(1,833) (2,081) (2,433)
-----------
Non-current liabilities
Provisions (1,122) (500) (52)
----------- ----------- ------------
(1,122) (500) (52)
-----------
Total liabilities (2,955) (2,581) (2,485)
===========
Net assets 17,573 17,976 18,946
===========
Equity
Share capital 9 38,976 37,101 37,341
Share premium account 30,213 23,172 27,215
Share option reserve 2,538 975 1,540
Cumulative translation reserves (2,082) (1,415) (1,192)
Retained deficit (52,072) (41,857) (45,958)
-----------
Equity attributable to owners
of the parent company 17,573 17,976 18,946
===========
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
Share Share Cumulative
Share premium option Other translation Retained
capital account reserve reserves reserves deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January
2014 36,227 11,739 827 461 (1,623) (40,300) 7,331
Transactions
with owners in
their capacity
as owners:
Issue of equity
shares 738 10,330 - - - - 11,068
Conversion of
convertible loan
notes 136 1,567 - (461) 3 234 1,479
Expenses of issue
of equity shares - (464) - - - - (464)
Share-based
payments - - 145 - - - 145
Exchange
differences - - 3 - - - 3
------------ ----------- ----------- ------------- --------------- ----------- ---------
Total transactions
with owners in
their capacity
as owners 874 11,433 148 (461) 3 234 12,231
Loss for the
period - - - - - (1,792) (1,792)
Other comprehensive
income:
Currency
translation
differences - - - - 604 - 604
Net loss on hedge
of net investment
in foreign
operations - - - - (398) - (398)
Total other
comprehensive
income for the
period - - - - 206 - 206
Total comprehensive
income for the
period - - - - 206 (1,792) (1,586)
As at 30 June
2014 37,101 23,172 975 - (1,414) (41,858) 17,976
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(AUDITED)
Share Share Cumulative
Share premium option Other translation Retained
capital account reserve reserves reserves deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January
2014 36,227 11,739 827 461 (1,623) (40,300) 7,331
Transactions
with owners in
their capacity
as owners:
Issue of equity
shares 990 14,735 - - - - 15,725
Conversion of
convertible loan
notes 124 1,429 - (461) 42 214 1,348
Expenses of issue
of equity shares - (688) - - - - (688)
Share-based payments - - 763 - - - 763
Transfer to retained
earnings in respect
of forfeit options - - (6) - - 6 -
Exchange differences - - (44) - - - (44)
Total transactions
with owners in
their capacity
as owners 1,114 15,476 713 (461) 42 220 17,104
Loss for the
year - - - - - (5,878) (5,878)
Other comprehensive
income:
Currency translation
differences - - - - (1,146) - (1,146)
Net gain on hedge
of net investment
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in foreign operations - - - - 1,535 - 1,535
Total other comprehensive
income for the
year - - - - 389 - 389
Total comprehensive
income for the
year - - - - 389 (5,878) (5,489)
As at 31 December
2014 37,341 27,215 1,540 - (1,192) (45,958) 18,946
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
Share Share Cumulative
Share premium option Other translation Retained
capital account reserve reserves reserves deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January
2015 37,341 27,215 1,540 - (1,192) (45,958) 18,946
Transactions
with owners in
their capacity
as owners:
Issue of equity
shares 1,635 3,269 - - - - 4,904
Expenses of issue
of equity shares - (271) - - - - (271)
Share-based
payments - - 967 - - - 967
Exchange
differences - - 31 - - - 31
Total transactions
with owners in
their capacity
as owners 1,635 2,998 998 - - - 5,631
Loss for the
period - - - - - (6,114) (6,114)
Other
comprehensive
income:
Currency
translation
differences - - - - (758) - (758)
Net loss on hedge
of net investment
in foreign
operations - - - - (132) - (132)
Total other
comprehensive
income for the
period - - - - (890) - (890)
Total
comprehensive
income for the
period - - - - (890) (6,114) (7,004)
As at 30 June
2015 38,976 30,213 2,538 - (2,082) (52,072) 17,573
ROSE PETROLEUM PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2015
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
Appendices 2015 2014 2014
Restated
US$'000 US$'000 US$'000
Net cash used in operating activities a (3,382) (524) (2,736)
Net cash used in investing activities b (3,550) (1,420) (5,589)
Net cash from financing activities c 4,602 9,281 14,875
----------- ---------------- ---------------
Net (decrease)/increase in cash
and cash equivalents (2,330) 7,337 6,550
Cash and cash equivalents at
beginning of period 8,408 1,944 1,944
Effect of foreign exchange rate
changes 11 29 (86)
Cash and cash equivalents at
end of period 6,089 9,310 8,408
=========== ================ ===============
ROSE PETROLEUM PLC
APPENDICES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2015
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
a Operating activities
Loss before taxation (6,473) (1,504) (5,865)
Other income - (25) -
Investment income (5) (3) (8)
Finance costs 34 92 91
Adjustments for:
Depreciation of property, plant
and equipment 129 110 220
Impairment of intangible exploration
and evaluation assets 2,340 - 969
Decommissioning - (78) (18)
Share-based payments 967 145 763
Loss on disposal of assets held 35 - -
for sale
Effect of foreign exchange rate
changes (30) (14) 53
Operating outflow before movements
in working capital (3,003) (1,277) (3,795)
(Increase)/decrease in inventories (402) 323 847
(Increase)/decrease in trade
and other receivables (224) 721 973
Increase/(decrease) in trade
and other payables 247 (193) (650)
Cash used in operations (3,382) (426) (2,625)
Income tax paid - - (13)
Interest paid - (98) (98)
Net cash used in operating activities (3,382) (524) (2,736)
b Investing activities
Interest received 5 3 8
Purchase of property, plant and
equipment (67) (21) (124)
Purchase of intangible exploration
and evaluation
assets (3,738) (1,264) (5,335)
Acquisition of subsidiaries - (138) (138)
Proceeds on disposal of assets 250 - -
held for sale
Net cash used in investing activities (3,550) (1,420) (5,589)
c Financing activities
Proceeds from issue of shares 4,904 9,720 15,532
Expenses of issue of shares (302) (464) (657)
Joint partner funding - 25 -
Net cash from financing activities 4,602 9,281 14,875
ROSE PETROLEUM PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2015
1. ACCOUNTING POLICIES
Basis of preparation
This Report was approved by the Directors on 25 September
2015.
The condensed consolidated interim financial statements have
been prepared in accordance with the recognition and measurement
principles of International Accounting and Financial Reporting
Standards ( 'IFRS ') as adopted in the EU.
The condensed consolidated interim financial statements are
presented in United States Dollar ('US$') as the Group's trading,
and the majority of its assets are in US$.
The company is domiciled in the United Kingdom. The company is
listed on AIM.
The current and comparative periods to June have been prepared
using the accounting policies and practices consistent with those
adopted in the annual financial statements for the year ended 31
December 2014. In the interim results to 30 June 2014 the Group's
interest in Wate Mining Company LLC had been accounted for using
the equity method of accounting. The comparative results for the
period to June have been restated to reflect the treatment of the
Group's interest in Wate Mining Company LLC as non-current assets
held for sale.
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Comparative figures for the year ended 31 December 2014 have
been extracted from the statutory financial statements for that
period which carried an unqualified audit report, did not contain a
statement under section 498(2) or (3) of the Companies Act 2006 and
have been delivered to the Registrar of Companies.
The Financial Information contained in this report does not
constitute statutory financial statements as defined by section 434
of the Companies Act 2006, and should be read in conjunction with
the Group's financial statements for the year ended 31 December
2014. This report has not been audited or reviewed by the Group's
auditors.
During the first six months of the current financial year there
have been no related party transactions that materially affect the
financial position or performance of the Group and there have been
no changes in the related party transactions described in the last
annual financial report.
The principal risks and uncertainties of the Group have not
changed since the publication of the last annual financial report
where a detailed explanation of such risks and uncertainties can be
found.
2. SEGMENTAL INFORMATION
For management purposes, the Group is organised into three
operating divisions based on its principal activities of gold and
silver mining, research and evaluation of potential uranium and
copper properties and the exploration and development of O&G
resources. These divisions are the basis on which the Group reports
its segment information as presented below:
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
Revenue
Gold and silver 1,136 2,266 3,097
O&G 88 - -
---------- ---------- -------------
1,224 2,266 3,097
---------- ---------- -------------
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
Segmental results
Uranium and copper (2,488) (158) (325)
Gold and silver (637) (142) (1,430)
O&G (1,387) (316) (1,448)
---------- ---------- -------------
Total segment results (4,512) (616) (3,203)
Assets held for sale (35) - -
Unallocated results (1,926) (888) (2,662)
Current and deferred tax 359 (288) (13)
---------- ---------- -------------
Loss for the period (6,114) (1,792) (5,878)
---------- ---------- -------------
Net assets
Uranium and copper 1,633 3,618 3,552
Gold and silver 1,524 2,425 1,460
O&G 9,955 1,698 6,676
---------- ---------- -------------
Total segment net assets 13,112 7,741 11,688
Assets held for sale - 325 785
Unallocated net assets 4,486 9,910 6,125
Current and deferred tax (25) 348
---------- ---------- -------------
Total net assets 17,573 17,976 18,946
---------- ---------- -------------
3. IMPAIRMENT OF INTANGIBLE EXPLORATION AND EVALUATION
ASSETS
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
O&G assets - - 969
Copper assets 2,340 - -
----------- ----------- -----------
2,340 - 969
----------- ----------- -----------
4. TAXATION
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
Current period 5 97 66
Deferred tax (364) 191 (53)
----------- ----------- -----------
Tax (credit)/charge (359) 288 13
----------- ----------- -----------
5. DIVIDENDS
The directors do not recommend the payment of a dividend for the
period.
6. LOSS PER ORDINARY SHARE
Basic loss per Ordinary Share is calculated by dividing the net
loss for the period attributable to owners of the parent company by
the weighted average number of Ordinary Shares outstanding during
the period. The calculation of the basic and diluted loss per
Ordinary Share is based on the following data:
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
restated
US$'000 US$'000 US$'000
Losses
Loss for the purpose of basic loss
per Ordinary Share being net loss attributable
to owners of the parent company (6,114) (1,792) (5,878)
Number Number Number
'000 '000 '000
Number of shares
Weighted average number of shares for
the purpose of basic loss per Ordinary
Share 1,515,931 807,554 1,074,448
Loss per Ordinary Share
Basic and diluted, cents per share (0.40) (0.22) (0.55)
Due to the losses incurred, there is no dilutive effect from the
existing share options.
(MORE TO FOLLOW) Dow Jones Newswires
September 28, 2015 02:01 ET (06:01 GMT)
7. INTANGIBLE ASSETS
Exploration and
evaluation assets
US$'000
Cost
At 1 January 2014 8,538
Additions 2,764
Acquired on acquisition of a subsidiary 576
Reclassified as held for sale (325)
Exchange differences (11)
------------------
At 30 June 2014 (restated) 11,542
Additions 4,418
Reclassified as held for sale (460)
Exchange differences (67)
------------------
At 31 December 2014 15,433
Additions 4,024
Exchange differences (99)
------------------
At 30 June 2015 19,358
------------------
Impairment
At 1 January 2014 and 30 June 2014 4,599
Impairment charge 969
Exchange differences (82)
------------------
At 31 December 2014 5,486
Impairment charge 2,340
Exchange differences (78)
------------------
At 30 June 2015 7,748
------------------
Carrying amount
At 30 June 2015 11,610
------------------
At 30 June 2014 (restated) 6,943
------------------
At 31 December 2014 9,947
------------------
8. ASSETS HELD FOR SALE
On 17 February 2015, the Company completed the sale of its 50
per cent interest in Wate Mining Company LLC ('Wate') to EFR
Arizona Strip LLC ('EFR'). A loss of US$35,000 arose on the
disposal of assets, being the proceeds of disposal less the
carrying amount of the net assets.
The net assets of Wate at the date of disposal and the periods
reported were:
Unaudited Audited
six months year ended
17 February ended 30 31 December
June
2015 2014 2014
Restated
US$'000 US$'000 US$'000
Intangible exploration and evaluation
assets 785 325 785
----------- -----------
Loss on disposal (35)
-------------
Total consideration 750
-------------
Satisfied by:
Cash and cash equivalents 250
Deferred consideration 500
-----------------
750
-----------------
The deferred consideration of US$0.5 million will be settled by
means of a non-interest bearing promissory note, payable in two
equal instalments on 13 February 2016 and 13 February 2017.
In addition, there is a potential 2 per cent royalty due on
EFR's stake in the project and, upon the meeting of certain
regulatory milestones, EFR will pay an additional US$0.25 million
cash to the Company. Due to the uncertainty of the timing the
contingent consideration has not been recognised at 30 June
2015.
9. SHARE CAPITAL
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2015 2014 2014
Restated
Number Number Number
'000 '000 '000
Authorised
Ordinary Shares of 0.1p each 7,779 7,779 7,779
Deferred Shares of 9.9p each 190,108 190,108 190,108
----------- ----------- ------------
197,887 197,887 197,887
----------- ----------- ------------
Allotted, issued and fully paid
2,550,185,127 Ordinary Shares of 0.1p
each (30 June 2014:1,306,006,980 and
31 December 2014:1,510,185,120) 4,069 2,194 2,434
190,108 Deferred Shares of 9.9p each 34,907 34,907 34,907
----------- ----------- ------------
38,976 37,101 37,341
----------- ----------- ------------
The Deferred Shares are not listed on AIM, do not give the
holders any right to receive notice of, or to attend or vote at,
any general meetings, have no entitlement to receive a dividend or
other distribution or any entitlement to receive a repayment of
nominal amount paid up on a return of assets on winding up nor to
receive or participate in any property or assets of the Company.
The Company may, at its option, at any time redeem all of the
Deferred Shares then in issue at a price not exceeding $0.01 from
all shareholders upon giving not less than 28 days notice in
writing. There is no dilutive effect from the existing share
options or convertible loan notes.
ISSUED ORDINARY SHARE CAPITAL
On 14 June 2014, the Company issued 80,000,000 Ordinary Shares
of 0.1p each in respect of the conversion of its outstanding
convertible loan notes of US$1,553,200 (GBP1 million)
On 27 June 2014, the Company issued 433,333,323 Ordinary Shares
of 0.1p each at a price of 1.5p per share, raising gross proceeds
of US$10,095,800 (GBP6.5 million)
On 21 October 2014, the Company issued 4,178,152 Ordinary Shares
of 0.1p each at a price of 2.975p per share in satisfaction of
US$200,000 (GBP124,300) due in respect of the Utah farm-in
agreement.
On 5 December 2014, the Company issued 199,999,987 Ordinary
Shares of 0.1p each at a price of 1.75p per share, raising gross
proceeds of US$5,436,200 (GBP3.5 million)
On 30 June 2015, the Company issued 1,040,000,007 Ordinary
Shares of 0.1p each at a price of 0.3p per share, raising gross
proceeds of US$4,903,704 (GBP3.1 million)
Ordinary
Shares
Number
'000
At 1 January 2014 792,674
Allotment of shares 513,333
-----------
At 30 June 2014 1,306,007
Allotment of shares 204,178
-----------
At 31 December 2014 1,510,185
Allotment of shares 1,040,000
-----------
At 30 June 2015 2,550,185
-----------
Contacts
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September 28, 2015 02:01 ET (06:01 GMT)
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