We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Regency Mines Plc | LSE:RGM | London | Ordinary Share | GB00BKM69866 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.90 | 0.85 | 0.95 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMRGM
RNS Number : 2477R
Regency Mines PLC
07 December 2016
Regency Mines PLC
("Regency" or the "Company")
Final Audited Results for the Year Ended 30 June 2016
07 December 2016
A copy of the Company's annual report and financial statements for 2016 - extracts from which are set out below - will be made available on the Company's website www.regency-mines.com shortly and at the Annual General Meeting to be held on 30 December 2016.
Chairman's Review
Dear Shareholders,
Overview
We all live with paradox to some degree, for to live with consistency is far more difficult. Early stage resource companies live with a paradox that is particularly acute. It is this: they all know that mineral exploration takes time, and that bringing resources into production takes more time, but the investors who buy and sell their shares every day are a subset of investors who, while they may have a higher than usual tolerance of risk, often ally that with an appetite for volatility and quick returns. This is not always irrational: however great the opportunity, the long term uncertainties may need to be balanced by the prospect of short term gain.
Investors who have followed the resource sector over the five or so years to early 2016 will have seen few if any gains, and will have learnt some painful lessons about just how volatile the sector can be. They have learnt mistrust, which can be a hard lesson to unlearn. The reverse has been so severe, particularly in the final stages from 2015 to early 2016, that even some of the great companies of the mining sector, usually protected by strong cash flows, were brought to their knees. And it was this fact, the greatest confidence-destroyer, that showed recovery was round the corner. For if the price and volume leaders in a commodity cannot make profits, then volume falls and price rises must occur until they can.
So we now have a sector seeing price recovery, and perhaps some growth. Some of the hard lessons of the last five years have to be unlearnt if we are to seize the moment, although without repeating the mistakes of the five years before that.
Regency has one of the world's largest lateritic nickel and cobalt resources, which it developed itself, and perhaps the world's largest tantalum resource, but these are exploration projects, and Regency produces nothing. The long-term opportunities are great, and capital value crystallisation may occur at any time if there is a sufficiently large increase in price levels, such as has been seen this year in other commodities such as manganese and coal, but the timing of such an increase is necessarily unpredictable. Therefore the uncertainties are also great. The Company concluded some time ago that it was especially necessary given this profile to add cash-flow generation possibilities to balance the long-term character of the existing asset portfolio.
The logical place to seek such possibilities was the oil and gas sector. This was for three reasons. First, there are established procedures and legal structures for taking shared and partial direct interests, such as wellbore interests, whether in individual wells or strata or in larger projects, enabling us to participate in projects with critical mass while matching our participation level with our financial capabilities and risk appetite. Secondly, exploration success can lead to immediate cash flow. Thirdly, we had been expecting the oil price to fall and expected it to fall further, so we were mentally prepared and believed it would be possible to find attractively priced opportunities, including assets coming out of insolvency.
But finding good projects is not easy. We participated in the early drilling at Horse Hill in the Weald Basin, and reinvested in early 2016 when testing began and began to produce unexpectedly strong results from the Kimmeridge limestones.
Many projects were considered, and we entered at various points over the last two years into preliminary and co-operation agreements with three groups in the U.S. in relation to both the search for opportunities and specific opportunities. These, including the oil project tender in Wyoming, are not now being progressed. We have made clear that as we were looking for exceptional investments including insolvency situations while the sector was depressed we could not expect to consummate transactions in every case, expected failures in what would be competitive situations, and even one successful outcome might be transformative. We have since concluded one such successful transaction, and are progressing another, both with new partners.
In May 2016 we identified, and invested GBP175,000 in, Westport Energy plc, a company that was to acquire and has now acquired out of an insolvency coal bed methane assets in Oregon including five drilled wells ready for completion. That company, now named Curzon Energy plc is seeking listing in London and post-listing and a further investment we expect to hold some 10% with a seat on the board.
Straddling the energy and the mineral sectors is a commodity that, like oil and gas, has seen significant price recovery this year: coal. We identified Carbon Minerals Corporation, a project for metallurgical coal contour mining in Alabama that shares two characteristics with some of the oil projects we have been reviewing, in that it offers the prospect of immediate cash flow, and has recently been purchased out of a financial restructuring. We have post the balance sheet date agreed to take a participation in Carbon Minerals Corporation and paid a GBP50,000 deposit with GBP200,000 due subject to our confirmation of information.
With both these projects we are looking for returns out of proportion to their cost, and both of them could scale up relatively rapidly. The coal project has as its immediate objective that it should quickly start to throw off cash to the participants. This is important to us: after cutting costs during the year, we now focus on projects which could provide us with significant revenues and cash flow.
Discussion of the Results
Losses reported for the year to 30 June 2016 fell from GBP5,888,742 to GBP1,965,722. The continuing significant level of losses came as a result principally of further provisions made against the value of our assets. Impairment of available for sale financial assets of GBP547,068 reflected a further write-down in our stake in Direct Nickel Ltd, owners of a proprietary processing technology, from GBP762,439 to GBP215,375, and a decision has been made to expense our expenditure on Sudan exploration, which we shall not continue, resulting in a GBP658,281 charge to Exploration expenses.
Our efforts to cut costs were a priority during the period, and the most significant element of this was a strategic decision to close down our geology and accounting functions and outsource the work. Although the full effects of this were felt for less than half a year, we can report that Administrative expenses were reduced from GBP964,761 to GBP594,732.
We saw the departure during the year of two valued colleagues on the board who had been with the Company since Listing, John Watkins and Julian Lee, and are grateful for their assistance over many years. We also, as a result of the restructuring at the end of 2015, said goodbye to many members of staff, and record our thanks for their capable and loyal service.
Regency disposed of its remaining holdings in Alba Mineral Resources plc and Ram Resources Ltd during the year, for proceeds of GBP91,878 and AUD188,008.66 respectively.
Prospects
The Company looks forward to the possible IPO of Curzon Energy plc which we understand is targeted for early 2017. The same period is expected to see the grant of planning permission for the next phase of testing and exploration at Horse Hill, while Angus Energy is seeking permission for a side-track to assess potential at its neighbouring license at Brockham. Carbon Minerals Corporation also hopes, provided we complete our investment, to start coal production in the first quarter of 2017.
2017 should therefore start as an active year, and we hope it will continue as one.
Our major legacy assets at Mambare, our nickel-cobalt project in Papua New Guinea, and Motzfeldt, our Tantalum-Niobium resource in southern Greenland, are on present assumptions likely to see limited activity on the ground during the year. Should base metal prices such as Nickel continue to strengthen, and improve significantly, or that of Tantalum recover, more scope for joint venture exploration (and, indeed corporate activity) will exist as attention will once more focus on the underlying value of these assets. At some point in the recovery we believe this is likely to happen, whether it is in 2017 or 2018, so although we continue to pursue potential options for partnership or sale we do not feel under any pressure to bring these to an early conclusion.
Overall, Regency has begun to redefine its identity and from a low base has assembled a group of assets any of which have the capacity to transform the value of the Company. It remains highly entrepreneurial, and open to opportunities, whether within or outside the existing project portfolio.
At Curzon Energy we have an interest in a company where the initial phase will be followed up by ambitious plans to drill up to 200 wells in stages over 47,000 acres. At Carbon Minerals we expect to have an interest in a project that aims for over 100,000 tons coal production in its first year with ambitions for up to 3 million tons in its second. Ambitions are not the same as plans, and are not always fulfilled, but, in a market where capital values have been so depressed, to take a project with mineral potential but without high ambition would have an opportunity cost.
We hope for your continued support, and look forward to soon rewarding you with the progress we are anticipating in the remainder of this financial year towards our objective of building a secure base of revenues and profit.
Results and dividends
Regency Mines (the "Parent") and its subsidiaries made a post-tax loss of GBP1,965,722 (2015: GBP5,888,742). The Directors do not recommend the payment of a dividend. The following financial statements are extracted from the audited financial statements which were approved by the Board of Directors and authorised for issue on 06 December 2016.
For further information, please contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Executive Director Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.
Consolidated statement of financial position
as at 30 June 2016
Hot Features
Premium
30 June 30 June
2016 2015
Notes GBP GBP
------------------------------------ ----- ------------ ------------
ASSETS
Non-current assets
Property, plant and equipment 9 21,716 8,828
Investments in associates and joint
ventures 11 1,638,113 1,660,854
Available for sale financial assets 12 1,147,460 995,011
Exploration assets 13 233,900 829,151
Trade and other receivables 14 1,202,312 1,195,907
Total non-current assets 4,243,501 4,689,751
------------------------------------ ----- ------------ ------------
Current assets
Cash and cash equivalents 20 7,960 3,565
Trade and other receivables 14 344,815 634,776
------------------------------------ ----- ------------ ------------
Total current assets 352,775 638,341
------------------------------------ ----- ------------ ------------
Total assets 4,596,276 5,328,092
------------------------------------ ----- ------------ ------------
EQUITY AND LIABILITIES
Equity attributable to owners of
the Parent
Called up share capital 18 1,872,523 1,815,326
Share premium account 17,399,710 16,700,261
Share-based payment reserve 22,945 -
Other reserves 301,691 60,140
Retained earnings (15,902,031) (13,936,310)
------------------------------------ ----- ------------ ------------
Total equity 3,694,838 4,639,417
------------------------------------ ----- ------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 15 619,139 393,685
Short-term borrowings 15 282,299 294,990
------------------------------------ ----- ------------ ------------
Total current liabilities 901,438 688,675
------------------------------------ ----- ------------ ------------
Total equity and liabilities 4,596,276 5,328,092
------------------------------------ ----- ------------ ------------
These financial statements were approved by the Board of Directors and authorised for issue on 06 December 2016 and are signed on its behalf by:
Andrew R M Bell
Executive Chairman
The accompanying notes form an integral part of these financial statements.
Consolidated income statement
for the year ended 30 June 2016
Year to Year to
30 June 30 June
2016 2015 (restated)
Notes GBP GBP
-------------------------------------- ----- ----------- ----------------
Revenue
Management services 24,910 29,640
Total revenue 24,910 29,640
-------------------------------------- ----- ----------- ----------------
Gain / (loss) on dilution of interest
in associate 19,325 (215,157)
Loss on sales of investments (86,735) (382,678)
Adjustment to proceeds on prior
year sale of tenements (48,049) 66,469
Impairment of available for sale
financial assets (547,068) (3,425,976)
Exploration expenses (611) (6,747)
Impairment of exploration assets (658,281) (553,096)
Administrative expenses (net) (594,733) (964,761)
Share of losses of associates and
joint ventures (net of tax) (48,430) (420,418)
Finance costs, net 4 (26,050) (16,018)
-------------------------------------- ----- ----------- ----------------
Loss for the year before taxation 3 (1,965,722) (5,888,742)
Tax credit 5 - -
-------------------------------------- ----- ----------- ----------------
Loss for the year attributable
to owners of the Parent (1,965,722) (5,888,742)
-------------------------------------- ----- ----------- ----------------
Loss per share attributable to owners of the Parent
(1.20) (6.77)
Loss per share - basic 8 pence pence
(1.20) (6.77)
Loss per share - diluted 8 pence pence
-------------------------------------- ----- ----------- ----------------
All of the Group's operations are considered to be continuing.
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the year ended 30 June 2016
30 June 30 June
2016 2015
GBP GBP
--------------------------------------------- ----------- -----------
Loss for the year (1,965,722) (5,888,742)
Other comprehensive (expense)/income
Items that will be reclassified subsequently
to profit or loss
Surplus on revaluation of available for
sale 184,297 394,641
Share of other comprehensive income of
associates 6,364 (12,814)
Unrealised foreign currency gain 50,892 48,450
--------------------------------------------- ----------- -----------
Other comprehensive income/(expense) for
the year 241,553 430,277
--------------------------------------------- ----------- -----------
Total comprehensive expense for the year
attributable to owners of the Parent (1,724,169) (5,458,465)
--------------------------------------------- ----------- -----------
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the year ended 30 June 2016
The movements in equity during the year were as follows:
Share Share-based
Share premium Retained payment Other Total
capital account earnings reserve reserves equity
GBP GBP GBP GBP GBP GBP
---------------------------- --------- ---------- ------------ ----------- --------- -----------
As at 30 June 2014 1,475,403 15,944,484 (8,089,080) 41,512 (370,137) 9,002,182
Changes in equity
for 2015
Loss for the year - - (5,888,742) - - (5,888,742)
Other comprehensive
income for the year - - - - 430,277 430,277
Transactions with
owners
Issue of shares 339,923 782,132 - - - 1,122,055
Share issue and fundraising
costs - (26,355) - - - (26,355)
Share-based payment
transfer - - 41,512 (41,512) - -
---------------------------- --------- ---------- ------------ ----------- --------- -----------
Total transactions
with owners 339,923 755,777 41,512 (41,512) - 1,095,700
---------------------------- --------- ---------- ------------ ----------- --------- -----------
As at 30 June 2015 1,815,326 16,700,261 (13,936,310) - 60,140 4,639,417
Changes in equity
for 2016
Loss for the year - - (1,965,722) - - (1,965,722)
Other comprehensive
income for the year - - - - 241,553 241,553
Transactions with
owners
Issue of shares 57,196 749,449 - - - 806,645
Share issue and fundraising
costs - (50,000) - - - (50,000)
Share-based payment
transfer - - - 22,945 - 22,945
Total transactions
with owners 57,196 699,449 - 22,945 - 779,590
---------------------------- --------- ---------- ------------ ----------- --------- -----------
As at 30 June 2016 1,872,522 17,399,710 (15,902,032) 22,945 301,693 3,694,838
---------------------------- --------- ---------- ------------ ----------- --------- -----------
Available
for sale Foreign
financial Associate currency Total
asset investments translation other
reserve reserve reserve reserves
GBP GBP GBP GBP
------------------------------------- ---------- ------------ ------------ ---------
As at 30 June 2014 (311,934) (403,989) 345,786 (370,137)
Changes in equity for 2015
Other comprehensive (expense)/income
for the year 394,641 (12,814) 48,450 430,277
As at 30 June 2015 82,707 (416,803) 394,236 60,140
Changes in equity for 2016
Other comprehensive (expense)/income
for the year 184,297 6,364 50,892 241,553
As at 30 June 2016 267,004 (410,439) 445,128 301,693
------------------------------------- ---------- ------------ ------------ ---------
See note 16 for a description of each reserve included above.
Consolidated statement of cash flows
for the year ended 30 June 2016
Year
Year to to
30 June 30 June
2016 2015
GBP GBP
------------------------------------------- ----------- -----------
Cash flows from operating activities
Loss before taxation (1,965,722) (5,888,742)
Decrease/(Increase) in receivables 283,555 (93,569)
Increase/(decrease) in payables 225,453 (109,740)
Depreciation 7,453 13,734
Impairment of exploration properties 658,281 553,096
Share-based payments 47,995 72,290
Currency adjustments (26,871) 154,425
Finance cost, net 26,050 16,018
Share of losses of associate 48,430 420,418
Loss on sale of investments 86,735 382,678
Adjustment to proceeds on prior year sale
of tenements 48,049 (66,469)
Impairment of available for sale financial
assets 547,068 3,425,976
(Gain)/loss on dilution of interest in
associate (19,325) 215,157
------------------------------------------- ----------- -----------
Net cash outflow from operations (32,849) (904,728)
------------------------------------------- ----------- -----------
Cash flows from investing activities
Interest received 15,869 17,003
Proceeds from sale of investments 124,158 605,123
Purchase of property, plant and equipment (20,343) -
Purchase of available for sale financial
assets (674,498) (300,000)
Payments for exploration costs (37,771) (347,428)
Payments for investments in associates
and joint ventures - (75,000)
------------------------------------------- ----------- -----------
Net cash outflow from investing activities (592,585) (100,302)
------------------------------------------- ----------- -----------
Cash inflows from financing activities
Proceeds from issue of shares 781,595 1,049,765
Transaction costs of issue of shares (50,000) (26,355)
Interest paid (41,919) (33,021)
Proceeds of new borrowings - 99,787
Repayment of borrowings (59,847) (348,906)
------------------------------------------- ----------- -----------
Net cash inflow from financing activities 629,829 741,270
------------------------------------------- ----------- -----------
Net (decrease)/increase in cash and cash
equivalents 4,395 (263,760)
Cash and cash equivalents at the beginning
of period 3,565 267,325
Cash and cash equivalents at end of period 7,960 3,565
------------------------------------------- ----------- -----------
The accompanying notes and accounting policies form an integral part of these financial statements.
Company statement of financial position
as at 30 June 2016
30 June 30 June
2016 2015
Notes GBP GBP
------------------------------------ ----- ------------ ------------
ASSETS
Non-current assets
Property, plant and equipment 9 21,716 8,828
Investments in subsidiaries 10 482 482
Investments in associates and joint
ventures 11 1,754,773 1,827,454
Available for sale financial assets 12 1,147,460 909,749
Exploration assets 13 40,402 662,384
Trade and other receivables 14 2,003,858 2,109,247
Total non-current assets 4,968,691 5,518,144
------------------------------------ ----- ------------ ------------
Current assets
Cash and cash equivalents 20 6,626 2,432
Trade and other receivables 14 286,455 439,359
------------------------------------ ----- ------------ ------------
Total current assets 293,081 441,791
------------------------------------ ----- ------------ ------------
Total assets 5,261,772 5,959,935
------------------------------------ ----- ------------ ------------
EQUITY AND LIABILITIES
Called up share capital 18 1,872,522 1,815,326
Share premium account 17,399,710 16,700,261
Other reserves 240,772 33,530
Retained earnings (15,148,556) (13,267,690)
------------------------------------ ----- ------------ ------------
Total equity 4,364,448 5,281,427
------------------------------------ ----- ------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 15 615,025 383,518
Short-term borrowings 15 282,299 294,990
------------------------------------ ----- ------------ ------------
Total current liabilities 897,324 678,508
------------------------------------ ----- ------------ ------------
Total equity and liabilities 5,261,772 5,959,935
------------------------------------ ----- ------------ ------------
These financial statements were approved by the Board of Directors and authorised for issue on 06 December 2016 and are signed on its behalf by:
Andrew R M Bell
Executive Chairman
The accompanying notes form an integral part of these financial statements.
Company statement of changes in equity
for the year ended 30 June 2016
The movements in reserves during the year were as follows:
Share
Share premium Retained Other Total
capital account earnings reserves equity
GBP GBP GBP GBP GBP
----------------------------- --------- ---------- ------------ --------- -----------
As at 30 June 2014 1,475,403 15,944,484 (7,303,631) (336,651) 9,779,605
Changes in equity for
2015
Loss for the year - - (6,005,571) - (6,005,571)
Other comprehensive expense
for the year - - - 411,693 411,693
Transactions with owners
Issue of shares 339,923 782,132 - - 1,122,055
Share issue and fundraising
costs - (26,355) - - (26,355)
Share based payment transfer - - 41,512 (41,512) -
----------------------------- --------- ---------- ------------ --------- -----------
Total transactions with
owners 339,923 755,777 41,512 (41,512) 1,095,700
----------------------------- --------- ---------- ------------ --------- -----------
As at 30 June 2015 1,815,326 16,700,261 (13,267,690) 33,530 5,281,427
Changes in equity for
2016
Loss for the year - - (1,880,866) - (1,880,866)
Other comprehensive income
for the year - - - 184,297 184,297
Transactions with owners
Issue of shares 57,196 749,449 - - 806,645
Share issue and fundraising
costs - (50,000) - - (50,000)
Share based payment transfer - - - 22,945 22,945
Total transactions with
owners 57,196 699,449 - 22,945 779,590
----------------------------- --------- ---------- ------------ --------- -----------
As at 30 June 2016 1,872,522 17,399,710 (15,148,556) 240,772 4,364,448
----------------------------- --------- ---------- ------------ --------- -----------
Available
for sale
financial Share-based Total
asset payment Currency other
reserve reserve reserve reserves
GBP GBP GBP GBP
----------------------------- ---------- ----------- -------- ---------
As at 30 June 2014 (380,135) 41,512 1,972 (336,651)
Changes in equity for 2015
Other comprehensive expense
for the year 411,693 - - 411,693
Share based payment transfer - (41,512) - (41,512)
----------------------------- ---------- ----------- -------- ---------
As at 30 June 2015 31,558 - 1,972 33,530
Changes in equity for 2016
Other comprehensive income
for the year 184,297 - - 184,297
Share based payment transfer - 22,945 - 22,945
As at 30 June 2016 215,855 22,945 1,972 240,772
----------------------------- ---------- ----------- -------- ---------
See note 16 for a description of each reserve included above.
Company statement of cash flows
for the year ended 30 June 2016
Year
Year to to
30 June 30 June
2016 2015
GBP GBP
-------------------------------------------- ----------- -----------
Cash flows from operating activities
Loss before taxation (1,880,866) (6,005,571)
Decrease/(increase) in receivables 258,294 (194,339)
Increase/(decrease) in payables 231,509 (117,230)
Depreciation 7,453 13,734
Share-based payments 47,995 72,290
Finance costs, net 26,050 16,018
Currency (gain)/loss 47,156 55,846
Loss on sale of investments 18,474 382,678
Impairment of associate 72,678 1,063,515
Impairment of available for sale investment 478,454 3,425,976
Impairment of exploration expenses 658,281 351,689
-------------------------------------------- ----------- -----------
Net cash outflow from operations (34,522) (935,394)
-------------------------------------------- ----------- -----------
Cash flows from investing activities
Interest received 15,869 17,003
Payments for exploration costs (36,299) (315,147)
Payments for investments in associates
and joint ventures - (75,000)
Purchase of property, plant and equipment (20,343) -
Purchase of available for sale financial
assets (674,498) (300,000)
Proceeds from sale of investments 124,158 605,123
-------------------------------------------- ----------- -----------
Net cash outflow from investing activities (591,113) (68,021)
-------------------------------------------- ----------- -----------
Cash inflows from financing activities
Proceeds from issue of shares 781,595 1,049,765
Transaction costs of issue of shares (50,000) (26,355)
Interest paid (41,919) (33,021)
Proceeds of new borrowings - 99,787
Repayments of borrowings (59,847) (348,906)
-------------------------------------------- ----------- -----------
Net cash inflow from financing activities 629,829 741,270
-------------------------------------------- ----------- -----------
Net (decrease)/increase in cash and cash
equivalents 4,194 (262,145)
Cash and cash equivalents at the beginning
of period 2,432 264,577
-------------------------------------------- ----------- -----------
Cash and cash equivalents at end of period 6,626 2,432
-------------------------------------------- ----------- -----------
The accompanying notes and accounting policies form an integral part of these financial statements.
Notes to financial statements
for the year ended 30 June 2016
1. Principal accounting policies
1.1 Authorisation of financial statements and statement of compliance with IFRS
The Group financial statements of Regency Mines plc ("the Company" or "Regency") for the year ended 30 June 2016 were authorised for issue by the Board on 06 December 2016 and signed on the Board's behalf by Andrew Bell and Scott Kaintz. Regency Mines plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM.
1.2 Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU ("IFRS") and the requirements of the Companies Act applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments. The principal accounting policies adopted are set out below.
Going concern
The consolidated entity has incurred a loss before tax of GBP1,965,722 for the year ended 30 June 2016, and has a net cash outflow of GBP625,634 from operating and investing activities. At that date there was a net current liability position of GBP548,663. The loss resulted mainly from provisions taken against the carrying value of holdings in Direct Nickel Limited and exploration assets in Sudan.
The consolidated entity continues to be reliant upon completion of capital raising for continued operations, the provision of working capital and for the repayment of the GBP282,299 interest bearing loan due for full settlement in December 2016 and expected to be financed with the lender with repayments starting later in 2016. Whilst the Directors have instituted measures to preserve cash and secure additional finance, these circumstances create material uncertainties over future trading results and cash flows.
During the fiscal year the Board of Directors has completed the disposal of its entire investment in Ram Resources for a total consideration of GBP89,130.36. Further to this the Board has surrendered its conversion rights of its remaining direct interest in the Fraser Range project to Ram Resources for a total of GBP55,386.32.
The Group's cash flow forecast for the 12 months ending 31 December 2017 highlights the fact that the company is expected to generate negative cash flow through that period. The Board of Directors are evaluating all the options available, including the injection of funds into the Group during the next 12 months, and are confident that the necessary funds will be raised in order for the Group to remain cash positive for the whole period.
The Directors are confident in the Company's ability to raise new finance from stock markets if this is required during 2017 and the Group has demonstrated a consistent ability to do so. This includes multiple share issuances of 150 million (post-consolidation) shares for a total consideration of GBP0.876 million during the 2015-16 financial year
If additional equity capital is not obtained, the going concern basis may not be appropriate, with the result that the Group may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated in the financial report. The Directors have concluded that the combination of these circumstances represents a material uncertainty that casts significant doubt upon the Group's ability to continue as a going concern. Nevertheless after making enquiries, and considering the uncertainties described above, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was GBP1,880,866 (2015: GBP6,005,571). The Company's other comprehensive income for the financial year was GBP184,297 (2015: GBP411,693).
Amendments to published standards effective for the year ended 30 June 2016
New standards, amendments and interpretations adopted by the Company
No new and/or revised Standards and Interpretations have been required to be adopted, and/or are applicable in the current year by/to the Company, as standards, amendments and interpretations which are effective for the financial year beginning on 1 July 2014 are not material to the Company.
New standards, amendments and interpretations not yet adopted
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements, were in issue but not yet effective for the year presented:
- IFRS 9 in respect of Financial Instruments which will be effective for the accounting periods beginning on or after 1 January 2018.
- IFRS 14 in respect of Regulatory Deferral Accounts which will be effective for accounting periods beginning on or after 1 January 2016.
IFRS 15 in respect of Revenue from Contracts with Customers which will be effective for accounting periods beginning on or after 1 January 2017.
Amendments to IFRS 10, IFRS 12 and IAS 28 in respect of the application of the consolidation exemption to investment entities which will be effective for accounting periods beginning on or after 1 January 2016.
Amendments to IFRS 10 and IAS 28 in respect of the treatment of a sale or contribution of assets between an investor and its Associate or Joint Venture which will be effective for accounting periods beginning on or after 1 January 2016.
- Amendments to IFRS 11 in respect of Accounting for Acquisitions of Interest in Joint Operations which will be effective for accounting periods beginning on or after 1 January 2016.
- Amendments to IAS 1 in respect of determining what information to disclose in annual financial statements which will be effective for accounting periods beginning on or after 1 January 2016.
- Amendments to IAS 16 and IAS 38 in respect of Clarification of Acceptable Methods of Depreciation and Amortisation which will be effective for accounting periods beginning on or after 1 January 2016.
- Amendments to IAS 16 and IAS 41 in respect of Bearer Plants which will be effective for accounting periods beginning on or after 1 January 2016.
- Amendments to IAS 27 to allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates which will be effective for accounting periods beginning 1 January 2016.
- Annual improvements to IFRS's which will be effective for accounting periods beginning on or after 1 January 2016 as follows:
-- IFRS 5 - Changes in methods of disposal -- IFRS 7 - Servicing contracts
-- IFRS 7 - Applicability of the amendments to IFRS 7 to condensed interim financial statements
-- IAS 19 - Discount rate: Regional market issue -- IAS 34 - Disclosure of information "elsewhere in the interim financial report"
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.
Standards adopted early by the Group
The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.
1.3 Basis of consolidation
The consolidated financial statements of the Group incorporate the financial statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
-- derecognises the assets (including goodwill) and liabilities of the subsidiary; -- derecognises the carrying amount of any non-controlling interest; -- derecognises the cumulative translation differences recorded in equity; -- recognises the fair value of the consideration received; -- recognises the fair value of any investment retained; -- recognises any surplus or deficit in profit or loss; and
-- reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.
For the year ended 30 June 2016, the consolidated financial statements combine those of the Company with those of its subsidiaries, Red Rock Uranium Pty Limited, Regency Mines Australasia Pty Limited and Regency Resources Limited.
1.4 Summary of significant accounting policies
1.4.1 Investment in associates
An associate is an entity over which the Company is in a position to exercise significant influence, but not control or jointly control, through participation in the financial and operating policy decisions of the investee.
Investments in associates are recognised in the consolidated financial statements using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised unless the Group has incurred obligations or made payments on behalf of the associate.
Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.
Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds received for the dilutive share issue and the value of the Company's effective disposal.
In the Company accounts investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment when there is objective evidence of impairment.
1.4.2 Interests in joint ventures
The Group has a contractual arrangement with Direct Nickel Pty Ltd which represents a joint venture established through an interest in a jointly controlled entity, Oro Nickel (Vanuatu) Limited.
The Group recognises its interest in the entity's assets and liabilities using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax.
Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.
Financial statements of the jointly controlled entity are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's financial statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.
1.4.3 Taxation
Corporation tax payable is provided on taxable profits at the current rate. The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:
-- the same taxable entity; or
-- different taxable entities which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.
1.4.4 Property, plant and equipment
Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised at cost and is depreciated on a straight line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:
Office furniture, fixtures and fittings - 33% per annum Leasehold improvements - 5% per annum
1.4.5 Foreign currencies
Both the functional and presentational currency of Regency Mines plc is Sterling (GBP). Each Group entity determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.
The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG") and the US Dollar ("USD").
Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income when the changes in fair value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.
1.4.6 Revenue
Revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of the Group and the Company, when those inflows result in increases in equity.
Revenue is measured at the fair value of the consideration received or receivable for investment asset disposals in the normal course of business and is recognised when revenue and associated costs can be measured reliably and future economic benefits are probable.
In addition, revenue from management services is recognised on an accruals basis when the services have been delivered and any associated costs have been incurred.
1.4.7 Exploration assets
Exploration assets comprise exploration and development costs incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments.
Recoupment of exploration and development costs is dependent upon successful development and commercial exploitation of each area of interest and will be amortised over the expected commercial life of each area once production commences. The Group and the Company currently have no exploration assets where production has commenced.
The Group adopts the "area of interest" method of accounting whereby all exploration and development costs relating to an area of interest are capitalised and carried forward until abandoned. In the event that an area of interest is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval of an application is expensed with the exception of refundable rent which is raised as a receivable.
Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.
1.4.8 Share-based payments
The Group operates an equity-settled share-based payment arrangement whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.
The fair value of options granted to Directors and others in respect of services provided is recognised as an expense in the statements of income with a corresponding increase in equity reserves - the share-based payment reserve.
On exercise or lapse of share options, the proportion of the share-based payment reserve relevant to those options is transferred to retained earnings. On exercise, equity is also increased by the amount of the proceeds received.
The fair value is measured at grant date and charged over the vesting period during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model taking into account the terms and conditions upon which the options were granted. There are no market vesting conditions. The exercise price is fixed at the date of grant. For other equity instruments granted during the year (i.e. other than share options), fair value is measured on the basis of an observable market price.
1.4.9 Pension
The Group operates a defined contribution pension plan which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.
1.4.10 Finance costs/revenue
Borrowing costs are recognised on an accruals basis using the effective interest method.
Finance revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
1.4.11 Financial instruments
Financial assets and financial liabilities are recognised where the Group has become party to the contractual provisions of the instrument.
Financial assets
Investments
Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.
Investments in associate companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses previously recognised in other comprehensive income are transferred to profit and loss.
Available for sale financial assets
Equity investments intended to be held for an indefinite period of time are classified as available for sale financial assets. They are carried at fair value, where this can be reliably measured, with movements in fair value recognised in other comprehensive income and debited or credited to the available for sale financial assets reserve. Where the fair value cannot be reliably measured, the investment is carried at cost or a lower valuation where the Directors consider the value of the investment to be impaired.
Available for sale financial assets are included within non-current assets. On disposal, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had previously been recognised directly in reserves is recognised in the Income Statement.
Income from available for sale financial assets is accounted for in the Income Statement when the right to receive it has been established.
The Group assesses at each reporting date whether there is objective evidence that an investment is impaired. When there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the Income Statement - is removed from other comprehensive income and recognised in the Income Statement. Impairment losses on equity investments are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income.
Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectable amounts.
An allowance for impairment is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.
After initial recognition these assets are measured at amortised cost using the effective interest method less provision for impairment.
Financial liabilities and equity
Trade and other payables
Trade and other payables are initially recognised at fair value and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.
Short-term borrowings
Short-term borrowings are recorded initially at their fair value, plus directly attributable transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable on settlement or redemption, are recognised in profit or loss over the term of the instrument using an effective rate of interest.
Equity instruments
Equity instruments issued by the Company are recorded at fair value as initial recognition net of issue costs.
1.5 Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Significant judgements in applying the accounting policies
In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements:
Recognition of holdings less than 20% as an associate
The Directors have classified, as an associate, an equity investment where the Company is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee.
Significant influence is presumed when the Company holds greater than 20% of the voting power of the investee, unless it can be clearly demonstrated that this is not the case. Conversely, if the Company holds less than 20% of the voting power of an investee, it is presumed that the Company does not have significant influence, unless such influence can be clearly demonstrated.
The Company owns 2.32% (2015: 4.87%) of the issued share capital of Red Rock Resources plc. Andrew Bell, Chairman and Chief Executive Officer of the Company, is also a member of the Board and the Executive Chairman of Red Rock Resources plc. In accordance with IAS 28, the Directors of the Company consider this to provide the Group with significant influence as defined by the standard. As such, it continues to recognise Red Rock Resources plc as an associate for the year ended 30 June 2016 despite its shareholding falling below 20%.
The effect of recognising Red Rock Resources as an available for sale financial asset would be to decrease the loss by GBP9,878 and decrease other comprehensive income by GBP6,364.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined using the Black-Scholes model.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability; or
-- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
-- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
-- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Impairment of available for sale financial assets
The Group follows the guidance of IAS 39 to determine when an available for sale financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred "loss event") and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which fair value of an investment is less than its cost.
In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. "Significant" is evaluated against the original cost of the investment and "prolonged" against the period in which the fair value has been below its original cost. Mining share prices typically have more volatility than most other shares and this is taken into account by management when considering if a significant decline in the fair value of its mining investments has occurred. Management would consider that there is a prolonged decline in the fair value of an equity investment when the period of decline in fair value has extended to beyond the expectation management have for the equity investment. This expectation will be influenced particularly by the company development cycle of the investment.
2. Segmental analysis
As with all natural resource exploration and development ventures yet to generate cash from operations, ensuring adequate cash is available to meet operational obligations and to provide for investment opportunities is critical. This is therefore the main focus of management information presented to the chief operational decision makers, being the Executive Chairman and the Board of Directors.
The only sources of funds are issues of new equity and sales of exploration rights, investments or other assets. Therefore, in addition to monitoring the current market perception of the Company to shareholders, brokers and other possible providers of equity finance, constant attention is paid to:
available cash;
the market value of the Group's listed investments.
At 30 June 2016 the Group had cash and cash equivalents of GBP7,960.
The market value of the most significant of the Group's listed investments at 30 June 2016 is as follows:
Red Rock Resources plc GBP40,881.
Once the Group's main focus of operations becomes production of natural resources, the nature of management information examined by the Board will alter to reflect the need to monitor revenues, margins, overheads and trade balances, as well as cash.
IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity, the countries in which revenue is earned regardless of whether this information is used in by management in making operating decisions.
Investment
in
Red Rock Papua Corporate
Resources Other Australian New Guinea and
Year to 30 June plc investments exploration exploration unallocated Total
2016 GBP GBP GBP GBP GBP GBP
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
Revenue
Management services - - - - 24,910 24,910
- - - - 24,910 24,910
Gain on dilution
of interest in associate 19,325 - - - - 19,325
Adjustment to proceeds
on prior year sale
of tenements - - (48,049) - - (48,049)
Gain/(loss) on sale
of investments - 17,880 (104,616) - - (86,736)
Exploration expenses - (658,281) (611) - - (658,892)
Administrative expenses* - - 84,526 - (679,257) (594,732)
Share of profits
in associates (48,430) - - - - (48,430)
Impairment of available
for sale investments - (547,067) - - - (547,067)
Finance cost - net - - - - (26,050) (26,050)
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
Net (loss)/profit
before tax from
continuing operations (29,105) (1,187,468) (68,750) - (680,397) (1,965,722)
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
Investment
in
Red Rock Papua Corporate
Resources Other Australian New Guinea and
Year to 30 June plc investments exploration exploration unallocated Total
2015 GBP GBP GBP GBP GBP GBP
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
Revenue
Management services - - - - 29,640 29,640
Gain on sale of
tenements - - 66,469 - - 66,469
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
- - 66,469 - 29,640 96,109
Loss on dilution
of interest in associate (215,157) - - - - (215,157)
Loss on sale of
investments - 131,756 (514,434) - - (382,678)
Exploration expenses - (341,404) (208,154) (10,285) - (559,843)
Administrative expenses* - - (169,427) - (795,334) (964,761)
Share of losses
in associates (431,906) - - 11,488 - (420,418)
Impairment of available
for sale investments - (3,425,976) - - - (3,425,976)
Finance cost - net - - - - (16,018) (16,018)
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
Net (loss)/profit
before tax from
continuing operations (647,063) (3,635,624) (825,546) 1,203 (781,712) (5,888,742)
-------------------------- ---------- ------------ ------------ ------------ ------------ -----------
* Included in administrative expenses is depreciation charge of GBP7,453 (2015: GBP13,734) under Corporate and unallocated.
Information by geographical area
Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.
Papua
UK Australia New Guinea Sudan Other Total
Year to 30 June 2016 GBP GBP GBP GBP GBP GBP
---------------------------- ------------ ------------ ----------- ----------- ----------- ---------------
Revenue
Management services 24,910 - - - - 24,910
Adjustment to proceeds
on prior year sale
of tenements - (48,049) - - - (48,049)
Loss on sale of investments - (74,526) - - - (74,526)
---------------------------- ------------ ------------ ----------- ----------- ----------- ---------------
Total segment revenue 24,910 (122,575 - - - (97,665)
---------------------------- ------------ ------------ ----------- ----------- ----------- ---------------
Non-current assets
Investments in associates
and joint ventures 15,811 - 1,622,302 - - 1,638,113
Property, plant and
equipment 21,717 - - - - 21,717
Available for sale
financial assets 932,085 215,375 - - - 1,147,460
Exploration assets - 175,527 - - 58,375 233,901
---------------------------- ------------ ------------ ----------- ----------- ----------- ---------------
Total segment non-current
assets 969,613 390,902 1,622,302 - 58,375 3,041,191
---------------------------- ------------ ------------ ----------- ----------- ----------- ---------------
Papua
UK Australia New Guinea Sudan Other Total
Year to 30 June 2015 GBP GBP GBP GBP GBP GBP
-------------------------- ------------ ----------- ----------- -------- ------- ---------------
Revenue
Management services 29,640 - - - - 29,640
Gain on sale of tenements - 66,469 - - - 66,469
-------------------------- ------------ ----------- ----------- -------- ------- ---------------
Total segment revenue 29,640 66,469 - - - 96,109
-------------------------- ------------ ----------- ----------- -------- ------- --------------- Non-current assets Investments in associates and joint ventures - - 1,660,854 - - 1,660,854 Property, plant and equipment 8,828 - - - - 8,828 Available for sale financial assets 147,307 847,704 - - - 995,011 Exploration assets - 149,141 - 626,810 53,200 829,151 -------------------------- ------------ ----------- ----------- -------- ------- --------------- Total segment non-current assets 156,135 996,845 1,660,854 626,810 53,200 3,493,844 -------------------------- ------------ ----------- ----------- -------- ------- ---------------
3. Loss on ordinary activities before taxation
2016 2015
Group GBP GBP
---------------------------------------------- ------- -------
Loss on ordinary activities before taxation
is stated after charging:
Auditor's remuneration:
- fees payable to the Company's auditor
for the audit of consolidated and Company
financial statements 15,000 15,000
- fees payable to subsidiary auditors for
the audit of subsidiary financial statements 2,294 2,225
Depreciation 7,453 13,734
Directors' emoluments 172,855 204,401
Share-based payments - Directors 39,392 30,000
Share-based payments - Staff 8,603 42,290
---------------------------------------------- ------- -------
As declared in note 7, Directors are remunerated in part by third parties with whom the Company and Group have contractual arrangements.
4. Finance costs, net
2016 2015
GBP GBP
----------------- -------- --------
Interest expense (41,919) (33,021)
Interest income 15,869 17,003
----------------- -------- --------
(26,050) (16,018)
----------------- -------- --------
5. Taxation
2016 2015
GBP GBP
-------------------------------------------------- ----------- -----------
Current period transaction of the Group
UK corporation tax at 20.00% (2015: 20.75%)
on profits for the period - -
Deferred tax
Origination and reversal of temporary differences - -
Deferred tax assets derecognised - -
-------------------------------------------------- ----------- -----------
Tax (credit) - -
-------------------------------------------------- ----------- -----------
Factors affecting the tax charge for the
year
Loss on ordinary activities before taxation (1,965,722) (5,888,742)
-------------------------------------------------- ----------- -----------
Loss on ordinary activities at the average
UK standard rate of 20.00% (2015: 20.75%) (393,144) (1,221,914)
Impact of subsidiaries and associates 5,943 (24,242)
Effect of non-deductible expense 241,070 948,066
Effect of tax benefit of losses carried
forward 146,131 298,090
Current tax (credit) - -
-------------------------------------------------- ----------- -----------
Finance Act 2013 set the main rate of corporation tax at 20% from 1 April 2015 and at 20% from 1 April 2016.
6. Staff costs
The aggregate employment costs of staff (including Directors) for the year was:
2016 2015
GBP GBP
------------------------------------ ------- -------
Wages and salaries 211,646 455,774
Severance costs 14,679 -
Pension 12,704 18,743
Social security costs 17,953 40,785
Employee share-based payment charge 47,995 72,290
------------------------------------ ------- -------
Total staff costs 304,977 587,592
------------------------------------ ------- -------
The average number of Group employees (including Directors) during the year was:
2016 2015
Number Number
--------------- ------- -------
Executives 3 5
Administration 1 7
Exploration - 5
--------------- ------- -------
4 17
--------------- ------- -------
The Company's staff are employed both by the Company and Red Rock Resources plc ("Red Rock"). During the year, staff costs of GBP34,151 (2015: GBP105,848) were recharged to Red Rock. Such recharges are offset against administration expenses in the income statement.
During the year, for all Directors and employees who have been employed for more than three months, the Company contributed to a defined contributions pension scheme as described under Directors' remuneration in the Directors' Report and a Share Incentive Plan ("SIP") as described under Management incentives in the Directors' Report.
7. Directors' emoluments
Social
Directors' Consultancy Share-based Pension security
fees fees payments contributions costs Total
2016 GBP GBP GBP GBP GBP GBP
------------------------ ---------- ----------- ----------- --------------- --------- -------
Executive Directors
A R M Bell 48,000 15,000 15,883 3,485 3,156 85,524
S Kaintz 65,000 - 15,427 3,284 6,468 90,180
------------------------ ---------- ----------- ----------- --------------- --------- -------
Non-executive Directors
E Bugnosen 18,000 - 8,082 934 1,006 28,022
J M E Lee (resigned
30 Sept 16) 4,500 - - - (156) 4,344
J Watkins (resigned
15 Sept 16) 4,500 - - - (322) 4,178
------------------------ ---------- ----------- ----------- --------------- --------- -------
140,000 15,000 39,392 7,703 10,152 212,247
------------------------ ---------- ----------- ----------- --------------- --------- -------
Social
Directors' Consultancy Share-based Pension security
fees fees payments contributions costs Total
2015 GBP GBP - SIP GBP GBP GBP GBP
------------------------ ---------- ----------- ----------- --------------- --------- -------
Executive Directors
A R M Bell 48,000 15,000 6,000 2,930 4,531 76,461
S Kaintz 65,000 - 6,000 3,138 7,440 81,578
------------------------ ---------- ----------- ----------- --------------- --------- -------
Non-executive Directors
E Bugnosen 18,000 - 6,000 882 1,092 25,974
J M E Lee 18,000 - 6,000 - 1,163 25,163
J Watkins 18,000 - 6,000 - 1,225 25,225
------------------------ ---------- ----------- ----------- --------------- --------- -------
167,000 15,000 30,000 6,950 15,451 234,401
------------------------ ---------- ----------- ----------- --------------- --------- -------
The number of Directors who exercised share options in year was nil (2015: nil).
During the year, the Company contributed to a Share Incentive Plan more fully described in the Directors' Report. 1,339,074 (2015: 4,285,714) free shares were issued to each employee, including Directors, making a total of 5,356,296 (2015: 21,428,571) free shares issued.
8. Loss per share
The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue.
Diluted loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
The following reflects the loss and share data used in the basic and diluted loss per share computations:
2016 2015 (restated)
-------------------------------------------- -------------- ---------------
Loss attributable to equity holders
of the Parent GBP(1,965,722) GBP(5,888,742)
Weighted average number of ordinary
shares of GBP0.0001 (2015: GBP0.001)
in issue 163,621,119 87,017,523
(1.20) (6.77)
Loss per share - basic pence pence
-------------------------------------------- -------------- ---------------
Weighted average number of ordinary
shares of GBP0.0001 (2015: GBP0.001)
in issue inclusive of dilutive outstanding
options 163,621,119 87,017,523
(1.20) (6.77)
Loss per share - fully diluted pence pence
-------------------------------------------- -------------- ---------------
The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows:
2016 2015 (restated)
GBP GBP
------------------------------------ ----------- ---------------
Loss per share denominator 163,621,119 87,017,523
Weighted average number of dilutive
share options - -
------------------------------------ ----------- ---------------
Diluted loss per share denominator 163,621,119 87,017,523
------------------------------------ ----------- ---------------
In accordance with IAS 33, the diluted earnings per share denominator takes into account the difference between the average market price of ordinary shares in the year and the weighted average exercise price of the outstanding options. The Group has weighted average share options of 502,904 (2015: 3,201,099) which were not included in the calculation of diluted loss per share because they are non-dilutive for the year presented.
9. Property, plant and equipment
Office furniture
Leasehold and
improvements equipment Total
Group and Company GBP GBP GBP
------------------ --------------------------------- ---------------- ---------
Cost
At 1 July 2014 14,822 124,370 139,192
Additions - - -
Disposals - - -
Currency exchange - - -
------------------ --------------------------------- ---------------- ---------
At 30 June 2015 14,822 124,370 139,192
Additions 18,000 2,342 20,342
At 30 June 2016 32,822 126,712 159,534
------------------ --------------------------------- ---------------- ---------
Depreciation
At 1 July 2014 (10,756) (105,874) (116,630)
Charge (4,066) (9,668) (13,734)
Currency exchange - - -
------------------ --------------------------------- ---------------- ---------
At 30 June 2015 (14,822) (115,542) (130,364)
Charge (600) (6,853) (7,453)
At 30 June 2016 (15,422) (122,395) (137,817)
------------------ --------------------------------- ---------------- ---------
Net book value
At 30 June 2016 17,400 4,317 21,717
------------------ --------------------------------- ---------------- ---------
At 30 June 2015 - 8,828 8,828
------------------ --------------------------------- ---------------- ---------
10. Investments in subsidiaries
Company GBP ----------------------------------------- --- Cost At 30 June 2016 and 2015 482 ----------------------------------------- --- Impairment At 30 June 2016 and 2015 - ----------------------------------------- --- Net carrying value Net book amount at 30 June 2016 and 2015 482 ----------------------------------------- ---
The Parent Company of the Group holds more than 50% of the share capital of the following companies, the results of which are consolidated:
Proportion
Country of held by Nature of
Company registration Class Group business
------------------------- ------------- -------- ---------- -------------------
Red Rock Uranium
Pty Limited Australia Ordinary 100% Mineral exploration
Regency Mines Australasia
Pty Limited Australia Ordinary 100% Mineral exploration
Regency Resources
Limited Australia Ordinary 100% Dormant
Regency Resources
Inc USA Ordinary 100% Oil exploration
------------------------- ------------- -------- ---------- -------------------
11. Investments in associates and joint ventures
Group Company
Carrying balance GBP GBP
-------------------------------------- ------------------------- ----------------------
At 30 June 2014 2,234,244 2,815,969
Additions 75,000 75,000
Impairment - (1,063,515)
Loss on dilution of interest (215,157) -
Share of total comprehensive loss for
the year (433,233) -
-------------------------------------- ------------------------- ----------------------
At 30 June 2015 1,660,854 1,827,454
Additions - -
Impairment - (72,678)
Loss on dilution of interest 19,325 -
Share of total comprehensive loss for
the year (42,066) -
-------------------------------------- ------------------------- ----------------------
Net book amount at 30 June 2016 1,638,113 1,754,776
-------------------------------------- ------------------------- ----------------------
The market value of investments in listed associates as at 30 June 2016 was GBP40,881 (2015: GBP113,560).
The Parent Company of the Group, as at 30 June 2016, had a significant influence by virtue other than a shareholding of over 20% or had joint control through a joint venture contractual arrangement in the following companies:
Proportion
Country held
of by Accounting
Name registration Class Group year end
---------------------- ------------- -------- ---------- ----------
Direct
England 30 June
Red Rock Resources plc and Wales Ordinary 2.32% 2016
Oro Nickel (Vanuatu) 30 June
Limited Vanuatu Ordinary 50.00% 2016
---------------------- ------------- -------- ---------- ----------
Summarised financial information for the Company's associates and joint ventures, where available, as at 30 June 2016 is given below:
For the year ended As at 30 June
30 June 2016 2016
---------------------------------------
Total comprehensive
Revenue Loss expense Assets Liabilities
Name GBP GBP GBP GBP GBP
------------------- ------- --------- ------------------- ---------- -----------
Red Rock Resources
plc - (283,280) (106,089) 10,538,727 (1,911,492)
------------------- ------- --------- ------------------- ---------- -----------
12. Available for sale financial assets
Group Company
GBP GBP
------------------------------- ----------- -----------
Net book amount
At 30 June 2014 4,611,833 4,611,833
Additions during the year 402,314 300,000
Disposals during year (987,801) (987,801)
Impairments during the year (3,425,976) (3,425,976)
Revaluation 394,641 411,693
At 30 June 2015 995,011 909,749
Additions during the year 674,498 674,498
Disposals during year (227,894) (142,632)
Impairments during year (478,452) (478,452)
Revaluation 184,297 184,297
Net book value at 30 June 2016 1,147,460 1,147,460
------------------------------- ----------- -----------
The value of the Company's investment in Horse Hill Developments Ltd ("HHDL") has been increased during the year based on transactions that occurred in shares of the entity during the year. However, it is important to note that shares in HHDL remain unlisted and thus valuations are based on a relatively small number of transactions between arm's length buyers. See Note 20 for additional details of listed and unlisted AFS assets.
13. Exploration assets
Group Company
------------------------ ----------------------
2016 2015 2016 2015
GBP GBP GBP GBP
-------------------------- ----------- ----------- ----------- ---------
Cost
At 30 June 2015 2,540,744 2,684,318 1,014,073 698,926
Additions during the year 37,771 347,428 36,299 315,147
Disposals in the year - (200,647) - -
Exchange gains 206,603 (290,355) - -
-------------------------- ----------- ----------- ----------- ---------
At 30 June 2016 2,785,118 2,540,744 1,050,372 1,014,073
-------------------------- ----------- ----------- ----------- ---------
Impairment
At 30 June 2015 (1,711,593) (1,486,012) (351,689) -
Impairments recognised
in the year (658,281) (553,096) (658,281) (351,689)
Disposals in the year - 87,920 - -
Exchange gains (181,344) 240,225 - -
-------------------------- ----------- ----------- ----------- ---------
At 30 June 2016 (2,551,218) (1,711,593) (1,009,970) (351,689)
-------------------------- ----------- ----------- ----------- ---------
Net book value
At 30 June 2016 233,900 829,152 40,402 662,384
-------------------------- ----------- ----------- ----------- ---------
At 30 June 2015 829,151 1,198,306 662,384 698,926
-------------------------- ----------- ----------- ----------- ---------
14. Trade and other receivables
Group Company
--------------------
2016 2015 2016 2015
GBP GBP GBP GBP
----------------------------------- --------- --------- --------- ---------
Non-current
Amounts owed by Group undertakings - - 801,546 913,340
Amounts owed by related
parties
- due from associates and
joint ventures 1,202,312 1,195,907 1,202,312 1,195,907
----------------------------------- --------- --------- --------- ---------
Total 1,202,312 1,195,907 2,003,858 2,109,247
----------------------------------- --------- --------- --------- ---------
Current
Sundry debtors 222,617 287,211 164,257 91,794
Prepayments 35,232 29,683 35,232 29,683
Amounts owed by related
parties
- due from associates and
joint ventures 86,966 317,882 86,966 317,882
Total 344,815 634,776 286,455 439,359
----------------------------------- --------- --------- --------- ---------
15. Trade and other payables
Group Company
---------------- ----------------
2016 2015 2016 2015
GBP GBP GBP GBP
------------------------- ------- ------- ------- -------
Trade and other payables 387,467 192,034 383,353 181,867
Accruals 221,663 197,680 221,663 197,680
Amounts due to related
parties:
- due to associates - - - -
- due to key management 10,009 3,971 10,009 3,971
------------------------- ------- ------- ------- -------
Trade and other payables 619,139 393,685 615,025 383,518
Short-term borrowings 282,299 294,990 282,299 294,990
------------------------- ------- ------- ------- -------
Total 901,438 688,675 897,324 678,508
------------------------- ------- ------- ------- -------
YA Global Master SPV Limited
A short-term loan of GBPnil (2015: GBP99,787) was provided by YA Global Master SPV Limited. Interest on the balance of this loan is charged at a rate of 12% (2015: 12%) per annum. Repayments are made either in cash or by issue of shares in the Company in line with the terms of the agreement. The Company has pledged all of its shares in Oro Nickel (Vanuatu) Limited as well as 9,084,760 shares in Red Rock Resources plc as security for the loans.
16. Reserves
Share premium
The share premium account represents the excess of consideration received for shares issued above their nominal value net of transaction costs.
Foreign currency translation reserve
The translation reserve represents the exchange gains and losses that have arisen on the retranslation of overseas operations.
Retained earnings
Retained earnings represent the cumulative profit and loss net of distributions to owners.
Available for sale financial asset reserve
The available for sale financial asset reserve represents the cumulative revaluation gains and losses in respect of available for sale trade investments.
Associate investment reserve
The associate investments reserve represents the cumulative share of gains/losses of associates recognised in the Statement of Other Comprehensive Income.
Share-based payment reserve
The share-based payment reserve represents the cumulative charge for options granted, still outstanding and not exercised.
17. Share capital of the Company
The share capital of the Company is as follows:
2016 2015
Issued and fully paid GBP GBP
----------------------------------------- --------- ---------
1,788,918,926 deferred shares of
GBP0.0009 each - 1,610,027
2,052,990,373 ordinary shares of
GBP0.0001 each - 205,299
124,871,749 ordinary shares of GBP0.0001
each 12,487 -
1,788,918,926 deferred shares of
GBP0.0009 each 1,610,027 -
2,497,434,980 A deferred shares
of GBP0.000095 each 237,256 -
127,512,822 ordinary shares of GBP0.0001
each 12,752 -
----------------------------------------- --------- ---------
As at 30 June 1,872,522 1,815,326
Nominal
Movement in share capital Number GBP
-------------------------------------------- --------------- ---------
Ordinary shares of GBP0.0001 each
As at 30 June 2014 1,475,402,734 1,475,403
Shares issued in the year to 30 June
2015 577,587,639 339,923
-------------------------------------------- --------------- ---------
As at 30 June 2015 2,052,990,373 1,815,326
Issued 20 August 2015 at 0.00045 pence
per share 444,444,600 44,444
As at 23 December 2015, pre-share
re-organisation 2,497,434,973 1,859,770
23 December 2015, Share Re-organisation
(see below)
Issue of deferred shares of GBP0.000095
each (2,497,434,973) (237,256)
Issue of new ordinary shares of GBP0.000005
each (2,497,434,973) (12,487)
Share consolidation: 1 new ordinary
share of GBP0.0001 for 20 ordinary
shares of GBP0.000005 124,871,749 249,743
Issued 06 January 2016 at 0.525 pence
per share 2,285,712 229
Issued 22 February 2016 at 0.325 pence
per share 54,236,919 5,424
Issued 10 March 2016 at 0.6 pence
per share 66,666,667 6,667
Issued 01 April 2016 at 0.425 pence
per share 4,323,524 432
As at 30 June 2016 - ordinary shares
of GBP0.0001 each 252,384,571 1,872,522
-------------------------------------------- --------------- ---------
Change in Nominal Value / share re-organisation
The nominal value of shares in the company was originally 0.1 pence. At a shareholders meeting on 23 December 2015, the Company's shareholders approved a re-organisation of the company's shares which resulted in the creation of three classes of shares, being:
-- Ordinary shares with a nominal value of 0.01 pence, which will continue as the company's listed securities
-- Deferred shares with a value of 0.09 pence -- A Deferred shares with a value of 0.0095 pence
Subject to the provisions of the Companies Act 2006, the deferred shares may be cancelled by the company, or bought back for GBP1 and then cancelled. These deferred shares are not quoted and carry no rights whatsoever.
Capital management
Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
18. Share-based payments
Employee share options
In prior years, the Company established an employee share option plan to enable the issue of options as part of the remuneration of key management personnel and Directors to enable them to purchase ordinary shares in the Company. Under IFRS 2 "Share-based Payments", the Company determines the fair value of the options issued to Directors and employees as remuneration and recognises the amount as an expense in the Income Statement with a corresponding increase in equity.
At 30 June 2016, the Company had outstanding options to subscribe for Ordinary shares as follows:
Options issued
04 June 2016
exercisable
at
0.45 pence
per
share expiring
29 January
2022
Number
----------- ---------------
A R M Bell 2,960,000
S Kaintz 2,820,000
E Bugnosen 560,000
Employees 720,000
----------- ---------------
Total 7,060,000
----------- ---------------
2016 2015
---------------------- -----------------------
Weighted Weighted
average Number average
Number of exercise of exercise
options price options price
Company and Group Number Pence Number Pence
----------------------------- ----------- --------- ------------ ---------
Outstanding at the beginning
of the period - - 13,200,000 3.00
Expired - - (13,200,000) 3.00
Issued 7,060,000 0.45 - -
----------------------------- ----------- --------- ------------ ---------
Outstanding at the end of
the period 7,060,000 0.45 - -
----------------------------- ----------- --------- ------------ ---------
Exercisable at the end of
the period 7,060,000 0.45 - -
----------------------------- ----------- --------- ------------ ---------
During the financial year 7,060,000 options were issued at an exercise price of 0.45 pence (2015: nil) and they expire on 29 January 2022. A charge of GBP22,945 was posted to the income statement in respect of the share options issued during the year.
Share Incentive Plan
The Company operates a tax efficient Share Incentive Plan, a government approved scheme, the terms of which provide for an equal reward to every employee, including Directors, who had served for three months or more at the time of issue. The terms of the plan provide for:
-- each employee to be given the right to subscribe any amount up to GBP150 per month with Trustees who invest the monies in the Company's shares;
-- the Company to match the employee's investment by contributing an amount equal to double the employee's investment ("matching shares"); and
-- the Company to award free shares to a maximum of GBP3,600 per employee per annum.
The subscriptions remain free of taxation and national insurance if held for five years.
The fair value of services provided is recognised as an expense in the Income Statement at grant date and is determined indirectly by reference to the fair value of the free and matching shares granted. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date.
During the financial year, a total of 5,356,296 free and matching shares were awarded. On 6 January 2016 2,285,712 free shares with a fair value of 0.00525 pence were awarded, resulting in a share-based payment charge if GBP12,000 in the income statement. On 1 April 2016 3,070,584 free and matching shares with a fair value of 0.00425 pence were awarded, resulting in a share-based payment charge of GBP13,050 in the income statement.
Other options
On 22 February 2016, in relation to the Company's investment in Horse Hill, Angus Energy Plc was granted 17,898,183 options exercisable at a price of 0.39 pence per share and expiring within 18 months of the day of the grant.
19. Cash and cash equivalents
30 June 30 June
2016 Cash flow 2015
Group GBP GBP GBP
------------------------- ------- --------- -------
Cash in hand and at bank 7,960 4,395 3,565
------------------------- ------- --------- -------
30 June 30 June
2016 Cash flow 2015
Company GBP GBP GBP
------------------------- ------- --------- -------
Cash in hand and at bank 6,626 4,194 2,432
------------------------- ------- --------- -------
20. Financial instruments
20.1 Categories of financial instruments
The Group and Company holds a number of financial instruments, including bank deposits, short-term investments, loans and receivables and trade payables.
The carrying amounts for each category of financial instrument, measured in accordance with IAS 39 as detailed in the accounting policies, are as follows:
Group 2016 2015 30 June 2016 GBP GBP ------------------------------------------- --------- --------- Financial assets Available for sale financial assets at fair value through other comprehensive income Quoted equity shares 7,587 232,572 Available for sale financial assets at cost Unquoted equity shares 1,139,873 762,439 Total available for sale financial assets 1,147,460 995,011 Loans and receivables Trade and other receivables 1,547,127 1,830,683 Total financial assets 2,694,587 2,825,694 ------------------------------------------- --------- --------- Total current 1,547,127 1,830,683 ------------------------------------------- --------- --------- Total non-current 1,147,460 995,011 ------------------------------------------- --------- ---------
The carrying value of non-current financial assets in the Company equals that of the Group. The carrying value of current financial assets in the Company is higher than that of the Group mainly due to intercompany debt eliminated at the Group level.
Available for sale financial assets at cost
As at 30 June 2016, GBP1,139,873 of the Group's available for sale financial assets are valued at cost less impairment due to the investment being privately held and no quoted market price information is available. The Group's investment in Direct Nickel Ltd at 30 June 2016 is valued at GBP215,375 (2015: GBP762,439). There is currently no intention to dispose of this investment in the foreseeable future.
During the year the Group made a cash and share investment of GBP445,000 in the Horse Hill Development. At the year end, and based on the most recent transactions, this investment has been revalued to GBP749,498.
During the year the Group made a cash investment of GBP175,000 in Curzon Energy Plc. This investment is currently held at cost.
Financial instruments held at cost less impairment can be reconciled from beginning to ending balances as follows:
Unlisted investments
at cost
----------------------
2016 2015
Group and Company GBP GBP
------------------ --------- -----------
Brought forward 762,439 4,188,415
Additions 924,498 -
Disposals - -
Impairment (547,064) (3,425,976)
------------------ --------- -----------
Carried forward 1,139,873 762,439
------------------ --------- -----------
Group 2016 2015
30 June 2016 GBP GBP
---------------------------- ------- -------
Financial liabilities
Loans and borrowings
Trade and other payables 619,139 393,685
Short-term borrowings 282,299 294,990
Total financial liabilities 901,438 688,675
---------------------------- ------- -------
Total current 901,438 688,675
---------------------------- ------- -------
Total non-current - -
---------------------------- ------- -------
Current financial liabilities in the Company are lower than that of the Group, due to trade and other payables in subsidiary companies.
Trade receivables and trade payables
Management assessed that other receivables and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is determined by calculating present values at the reporting date, using the issuer's borrowing rate.
20.2 Fair values
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
-- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
-- Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
-- Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The carrying amount of the Group and Company's financial assets and liabilities is not materially different to their fair value. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Where a quoted price in an active market is available, the fair value is based on the quoted price at the end of the reporting period. In the absence of a quoted price in an active market, the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The following table provides the fair value measurement hierarchy of the Group's assets and liabilities:
Level 1 Level 2 Level 3 Total
Group GBP GBP GBP GBP
------------------------------ ------- --------- ------- ---------
30 June 2016
Available for sale financial
assets at fair value through
other comprehensive income
- Quoted equity shares 7,587 - - 7,587
- Unquoted equity shares - 1,139,873 - 1,139,873
------------------------------ ------- --------- ------- ---------
30 June 2015
Available for sale financial
assets at fair value through
other comprehensive income
- Quoted equity shares 232,572 - - 232,572
- Unquoted equity shares - 762,439 - 762,439
------------------------------ ------- --------- ------- ---------
20.3 Financial risk management policies
The Directors monitor the Group's financial risk management policies and exposures and approve financial transactions.
The Directors' overall risk management strategy seeks to assist the consolidated Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements.
Specific financial risk exposures and management
The main risks the Group is exposed to through its financial instruments are credit risk and market risk consisting of interest rate risk, liquidity risk, equity price risk and foreign exchange risk.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial liability of significant customers and counterparties), ensuring, to the extent possible, that customers and counterparties to transactions are of sound creditworthiness. Such monitoring is used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the Directors have otherwise cleared as being financially sound.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in note 14.
There are no amounts of collateral held as security in respect of trade and other receivables.
The consolidated Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated Group.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
-- monitoring undrawn credit facilities; -- obtaining funding from a variety of sources; and -- maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance operations to commercial exploration and that controls over expenditure are carefully managed. All financial liabilities are due to be settled within the next twelve months.
Market risk
Interest rate risk
The Company is not exposed to any material interest rate risk because interest rates on loans are fixed in advance.
Equity price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities, but also include political, economic, social, technical, environmental and regulatory factors.
Foreign exchange risk
The Group's transactions are carried out in a variety of currencies, including Australian Dollar, Canadian Dollar, Papua New Guinea Kina and UK Sterling.
To mitigate the Group's exposure to foreign currency risk, non-Sterling cash flows are monitored.
21. Significant agreements and transactions
Board Change
On 15 September 2015, John Watkins resigned from the Board of Directors.
On 1 October 2015, Julian Lee resigned from the Board of Directors.
Financing
-- On 1 July 2015, the Company raised GBP100,000 by way of an issue of 139,164,318 new ordinary shares of 0.01 pence each in the Company to YA Global Master SPV Ltd ("Yorkville") under a SEDA facility at a price of 0.0719 pence per share.
-- On 20 August 2015, the Company raised GBP200,000 by way of an issue of 444,444,600 new ordinary shares of 0.01 pence each in the Company at a price of 0.045 pence per share. For every two new ordinary shares, each subscriber will be issued with one warrant exercisable at 0.065 pence per share and expiring on 3 March 2017. The proceeds of the placing were applied to oil and gas investment due diligence activities, and for working capital purposes.
-- On 10 March 2016, the Company raised GBP400,000 by way of an issue of 66,666,667 new ordinary shares of 0.01 pence each in the Company at a price of 0.6 pence per share. For every three new ordinary shares, each subscriber will be issued with one warrants exercisable on the following three dates: 1 July 2016, at an exercise price of 0.78 pence per share; 1 November 2016, at an exercise price of 1 pence per share; and 1 February 2017, at an exercise price of 1.2 pence per share. The proceeds of the placing was applied to oil activities and for working capital purposes.
Sale of Interests
-- On 22 October 2015, the Company announced that it sold the whole of its residual 4.23% interest in Alba Mineral Resources plc ("Alba") for net proceeds of GBP91,878. The interest comprised 29,715,006 ordinary shares in Alba which at the mid-market closing price on 21 October 2015 had a market value of GBP96,574. The sale represents a GBP17,861 surplus over book cost of GBP74,017.
-- On 25 November 2015, the Company announced that it sold its remaining 59,516,530 shares in Ram Resources Ltd ("RAM") for a total consideration of AUD118,437.89. During the year the Company sold a total of 74,000,000 shares for a total consideration of GBP188,005.66. The Company retained a 4% carried interest, convertible into RAM shares at the rate of AUD50,000 per 1% at the price of any placing, as well as a royalty, in RAM's Fraser Range Project.
Oil and Gas Co-operation Agreement
On 16 November 2015, the Company announced that it has begun active co-operation with American Resources Inc aimed at identifying and pursuing oil and gas investment opportunities in the Southern United States. The first project is contingent on satisfactory leasing arrangements and would involve the Company taking a 50% Working Interest in the planned redevelopment of the North Francitas Oil project in Jackson and Matagorda Counties Texas, USA, for an aggregate cost of up to US$ 430,000.
Horse Hill Investment
On 22 February 2016, the Company announced that it signed a Heads of Agreement (the "Agreement") with Horse Hill Developments Ltd ("HHDL") for the Company to acquire a 5% interest in HHDL from Angus Energy Plc ("Angus"). HHDL is a special purpose company that owns a 65% participating interest in the Petroleum Exploration and Development Licence 137 ("PEDL 137") as well as the adjacent licence PEDL 246 in the Weald Basin, UK. The participants in the Horse Hill -1 well are HHDL as operator with a 65% interest and Magellan Petroleum Corporation with a 35% interest. The initial consideration payable by the Company under the HOA was GBP400,000, to be satisfied as to GBP223,730 in cash, and as to GBP176,270 by issues of 54,236,919 new ordinary shares in the Company at a price per share of 0.325 pence. Additionally, the Company granted Angus 17,898,183 options exercisable at a price of 0.39 pence per share and expiring within 18 months of the day of the grant.
The valuation of the Company's HHDL shares was estimated based on a general increase in the price of shares sold and bought through arm's length transactions by various parties since the Horse Hill project was initiated and in particular by two transactions that have occurred in 2016 by UK Oil and Gas Plc ("UKOG"). In April 2016 purchased 12% of HHDL from Angus energy for a total of GBP1.8m or GBP150k per 1% of HHDL. Subsequent to the Company's 30 June year end a further 6% of HHDL was purchased by UKOG from Flowermay Ltd for GBP1m, equating to GBP166.7k per 1% of HHDL. Given the timing of the second transaction post year-end it has been ignored and instead an uplift equating to GBP150k per 1% of the Company's stake in HHDL, equating to GBP750k total valuation has been utilized. This figure has been further adjusted to reflect the fact that a cash call of GBP54,497.83 was outstanding at financial year-end. It is important to note that shares in HHDL remain unlisted and thus relatively illiquid by capital market standards and thus this analysis must be based on a relatively small number of transactions.
Wyoming Oil Project
On 9 May 2016, the Company announced that Regency Resource Inc. ("RRI"), a wholly owned subsidiary of the Company, signed a Head of Agreement ("HOA") with private U.S. oil and gas company ("US Partner") to bid in an auction process under a Chapter 7 bankruptcy proceeding for a 75% non-operating working interest (net revenue interest to the Company of 60%) in an existing well ("Well") located in the prolific oil producing State of Wyoming. Pursuant to the HOA, the Company will carry its US partner for a 25% working interest in the completion of the Well and the next two wells drilled on the surrounding acreage. Thereafter, the costs will be met as to 75% by the Company and 25% by the US partner. The Company budgeted a commitment of under USD1,000,000 for the process and has agreed to pay the US partner a "prospect fee" of USD100,000 on the successful acquisition of the interest.
Curzon Energy Plc Investment (Formerly Westport Energy Plc)
On 26 May 2016, the Company announced an investment in Curzon Energy Plc ("Curzon"), a company formed to acquire natural gas operations in the United States. The Company agreed to subscribe for 21,875 new ordinary shares of GBP1.00 per share of Curzon at a price of GBP8.00 per share for a total consideration of GBP175,000 in a pre-IPO funding. Subsequently, the Curzon shares will be divided into 100 ordinary shares of GBP0.01 per share. Curzon seeks a listing on a London market and the Company commits to subscribe for a further GBP350,000 at a price of GBP0.10 per share ("IPO Subscription") upon admission of IPO shares. The Company is also to appoint a director to the Curzon board at the time of the IPO. Additionally, the Company is to receive additional Curzon shares at IPO in payment of a 7% fee ("Fee") to be taken in shares in Curzon in consideration of its entering into a one-year lock in on IPO Subscriptions and Fee shares.
Munglinup Graphite Disposal
On 14 June 2016, Gold Terrace Pty Ltd, a private Australian company, and the holder of the Graphite Australia Pty Ltd tenements, has notified the Company that will issue the Company with 3,000,000 shares in the capital of the proposed listed vehicle. This was valued at approximately AUD120,000 against a carrying value in the books of AUD200,000.
Consolidation of Shares
On 23 December 2015, the Company announced that each of the existing 2,497,434,980 issued ordinary shares of 0.01 pence each in the capital of the Company ("Existing Ordinary Shares") will be subdivided into one A deferred share of 0.0095 pence each ("A Deferred Shares") and one new ordinary share of 0.0005 pence each. Furthermore, every 20 ordinary shares of 0.0005 pence each in the capital of the Company will be consolidated into one new ordinary shares of 0.01 pence each ("New Ordinary Shares") and accordingly the Company will have 124,871,749 New Ordinary Shares in issue. The New Ordinary Shares will have the same rights and be subject to the same restrictions as the Existing Ordinary Shares in the Company's Articles of Association and the A Deferred Shares will have the rights and be subject to the restrictions attached to A Deferred Shares as set out in the Articles of Association.
Share Incentive Plan
On 12 January 2016, the Board of Directors approved the issue of 2,285,712 ordinary shares of 0.01 pence each in the Company under the Company's Share Incentive Plan ("SIP") for the 2015/16 tax year. 2,285,712 Free Shares have been awarded with reference to the mid-market closing price of 0.525 pence on 6 January 2016.
On 7 April 2016, the Board of Directors approved the issue of 4,323,524 ordinary shares of 0.01 pence each in the Company under the Company's Share Incentive Plan ("SIP") for the 2015/16 tax year. 564,704 Free Shares, 1,252,940 Partnership Shares and 2,505,880 Matching Shares have been awarded with reference to the mid-market closing price of 0.425 pence on 31 March 2016.
22. Commitments
As at 30 June 2016, the Company had entered into the following commitments:
-- Exploration commitments: On-going exploration expenditure is required to maintain title to the Group mineral exploration permits. No provision has been made in the financial statements for these amounts as the expenditure is expected to be fulfilled in the normal course of the operations of the Group.
-- The Company has an existing joint lease agreement with Red Rock Resources plc and Greatland Gold plc relating to Ivybridge House, 1 Adam Street, London WC2N 6LE. The lease is non-cancellable until 1 December 2017. Future minimum annual rental and service charges payable by the Company is GBP38,850.
23. Related party transactions
-- On 5 April 2013, Regency Mines plc, Red Rock Resources plc where Andrew Bell currently is a Director and Greatland Gold plc, where Andrew Bell previously was a Director, entered into a joint lease at Ivybridge House, 1 Adam Street, London WC2N 6LE. The three companies also share service costs and other outgoings of an office. The total of these costs charged to Red Rock Resources plc during the year was GBP110,918 (2015: GBP151,632), of which GBP44,949 (2015: GBP48,725) represented the Company's share of the office rent and the balance services provided. Regency charges Greatland Gold plc fixed quarterly fees for rent and office costs which totalling GBP24,000 during the year (2015: GBP24,000).
-- The costs incurred by the Company on behalf of Red Rock Resources plc are invoiced at each month end and settled as soon as may be possible. By agreement, the Company charges interest at the rate of 0.5% per month on all balances outstanding at each month end until they are settled. The total charged to Red Rock Resources plc for the year was GBP15,869 (2015: GBP16,865).
-- Related party receivables and payables are disclosed in notes 14 and 15, respectively. -- The Company held 9,084,760 shares (2.32%) in Red Rock Resources plc as at 30 June 2016.
-- The key management personnel are the Directors and their remuneration is disclosed within note 7.
24. Events after the reporting period
Issue of new shares
-- On 30 August 2016, the Company raised GBP300,000 by way of an issues of 75,000,000 new ordinary shares of 0.01 pence each in the Company at a price per share of 0.4 pence. Paul Johnson participated in GBP75,000 of this placing. The Company has also granted Paul Johnson the right to join the Board of the Company upon completion of the full placing. For every one share, each subscriber will be issued with one warrant exercisable at 0.8 pence per share and expiring on 11 March 2019.
Sale of interest
-- On 20 September 2016, the Company announced the sale of its the remaining direct interest of 4% in the Tenements comprising the Fraser Range Project in Western Australia to Ram Resource ltd for a total consideration of AUD100,000. Additionally, the Company was issued the option to purchase 16,666,666 new ordinary shares in Ram Resource ltd at a price of AUD0.006 per share expiring on 20 September 2020.
Direct Nickel Group - Restructuring
On 21 October 2016, the Company was informed of a restructuring of the Direct Nickel Group. Previously, the Company held a 6.78% stake in Direct Nickel Ltd ("DNiL"), which held 100% of Direct Nickel Holding Pty Ltd ("DNiH"), which held 100% shares in Direct Nickel Projects Pty Ltd ("DNiP"). After the restructuring, the Company will own 6.78% in DNiH which in turn holds 40% of DNiP. In addition to the Company's shareholding DNiH, the Company will also effectively own a bonus of 0.339% in Planet Minerals Ltd.
Metallurgical Coal - Heads of Terms
On 25 November 2016, the Company announced a Head of Terms to acquire a 20% shareholding in Carbon Minerals Corporation ("CMC"), which has entered into an agreement to acquire the Rosa metallurgical coal mine (the "Rosa Mine") located in Alabama, United States in the Warrior Coal Basin. The acquisition is for a total consideration of USD1,650,000 payable monthly plus a royalty per ton produced. The Company is to pay an initial refundable cash deposit of GBP50,000 with a further GBP200,000 due after due diligence and completion of a shareholders' agreement.
Curzon Energy (Formerly Westport Energy Plc)
The Company was informed that the former Westport Energy Plc had renamed itself Curzon Energy Plc in December 2016.
25. Control
There is considered to be no controlling related party.
26. These results are audited, however the information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The consolidated statement of financial position at 30 June 2016 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2016 statutory financial statements. Their report was unqualified and contained no statement under sections 498(2) or (3) of the Companies Act 2006 but did include an emphasis of matter as set out below. The financial statements for 2016 will be delivered to the Registrar of Companies by 31 December 2016.
"The consolidated entity has incurred a loss before tax of GBP1,965,722 for the year ended 30 June 2016, and has a net cash outflow of GBP625,634 from operating and investing activities. At that date there was a net current liability position of GBP548,663. The loss resulted mainly from provisions taken against the carrying value of holdings in Direct Nickel Limited and exploration assets in Sudan.
The consolidated entity continues to be reliant upon completion of capital raising for continued operations, the provision of working capital and for the repayment of the GBP282,299 interest bearing loan due for full settlement in December 2016 and expected to be financed with the lender with repayments starting later in 2016. Whilst the Directors have instituted measures to preserve cash and secure additional finance, these circumstances create material uncertainties over future trading results and cash flows.
During the fiscal year the Board of Directors has completed the disposal of its entire investment in Ram Resources for a total consideration of GBP89,130.36. Further to this the Board has surrendered its conversion rights of its remaining direct interest in the Fraser Range project to Ram Resources for a total of GBP55,386.32.
The Group's cash flow forecast for the 12 months ending 31 December 2017 highlights the fact that the company is expected to generate negative cash flow through that period. The Board of Directors are evaluating all the options available, including the injection of funds into the Group during the next 12 months, and are confident that the necessary funds will be raised in order for the Group to remain cash positive for the whole period.
The Directors are confident in the Company's ability to raise new finance from stock markets if this is required during 2017 and the Group has demonstrated a consistent ability to do so. This includes multiple share issuances of 150 million (post-consolidation) shares for a total consideration of GBP0.876 million during the 2015-16 financial year
If additional equity capital is not obtained, the going concern basis may not be appropriate, with the result that the Group may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated in the financial report. The Directors have concluded that the combination of these circumstances represents a material uncertainty that casts significant doubt upon the Group's ability to continue as a going concern. Nevertheless after making enquiries, and considering the uncertainties described above, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts."
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TRBFTMBIMBLF
(END) Dow Jones Newswires
December 07, 2016 11:54 ET (16:54 GMT)
1 Year Regency Mines Chart |
1 Month Regency Mines Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
