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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Archipelago Res | LSE:AR. | London | Ordinary Share | GB0033551721 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 57.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 7269C
Archipelago Resources PLC
04 September 2008
ARCHIPELAGO RESOURCES PLC
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2008
CHIEF EXECUTIVE OFFICER*S STATEMENT
Results AND DIVIDEND
The consolidated loss for the half year after taxation amounted to US$2,011,297 (2007: US$1,702,087). No dividends have been paid or
proposed.
REVIEW OF BUSINESS
On 17March 2008 Archipelago Resources Plc (*Archipelago* or *the Company*) announced that it had received Government approval to proceed
with development of the Company*s 85% owned Toka Tindung Gold Project in North Sulawesi, Indonesia (*the Project*). The Project has a
defined resource of 1.7m ounces (oz) gold equivalent of which 1.1m oz will initially be mineable by open pit.
On 15 July 2008 the Company reached agreement with Credit Suisse, Singapore Branch (*Credit Suisse*) to provide a conditional US$48m loan
facility (*the Loan Facility*) for development of the Project. The Company is now working with Credit Suisse to finalise the legal and other
commercial arrangements necessary to facilitate the drawdown under the Loan Facility.
Credit Suisse has developed great associations and experience over many years lending into Indonesia and the Directors look forward to
developing a mutually beneficial relationship with Credit Suisse and their associates in the years ahead.
Mining is now scheduled to commence in 1st quarter 2009 and production is targeted for 3rd quarter 2009 at an average annual rate of 160,000
oz/annum gold equivalent over the first 6 years of the initial 8 year project life. Given the excellent exploration potential existing at
Toka Tindung and encouraging initial exploration results reported last year, the Company is confident of extending the project life beyond 8
years.
Mining at Toka Tindung will be by way of five open pits with processing through a centralised plant. The mineralogy of the Toka Tindung
deposits is simple with indicated gold recoveries of approximately 94%.
Events since the Balance Sheet Date
Since 30 June 2008 the Company has reached agreement with Credit Suisse regarding the conditional provision of a loan facility referred to
above.
Also since 30 June 2008 the Company has announced that it has placed 12,380,000 Ordinary Shares of 1p each in the capital of the Company at
an issue price of 25 pence per share to institutional and private investors to raise GBP3.1m for the Company.
On 1 September 2008 the Company extended the repayment date of the RMB Australia Holdings Ltd (*RMB*) bridging loan facility from 31 August
2008 to 30 November 2008. In consideration for this extension the Company issued a further 1.75m options to RMB.
Other than as already announced, there has not been any other matter or circumstance that has arisen since 30 June 2008 which has
significantly affected, or may significantly affect, the operations or state of affairs of the Group.
By order of the board
J C Loosemore
Managing Director
2 September 2008
ARCHIPELAGO RESOURCES PLC
INCOME STATEMENT
for the 6 months ended 30 June 2008
Half-Year ended Half-Year ended
30 June 2008 30 June 2007
US$ US$
Notes
REVENUE - -
Cost of sales - -
GROSS PROFIT - -
Other income 3 69,063 132,104
Administrative expenses 3 (1,818,061) (1,100,995)
Exploration expenditure (478,537)
written off
OPERATING (LOSS)/GAIN (1,748,998) (1,447,428)
Gain on sale of assets 823 -
Finance Costs (263,122) (254,659)
(LOSS)/GAIN ON ORDINARY ACTIVITIES BEFORE (2,011,297) (1,702,087)
TAXATION
Taxation Expense - -
(LOSS)/GAIN ON ORDINARY ACTIVITIES AFTER TAXATION (2,011,297) (1,702,087)
RETAINED (LOSS)/GAIN FOR THE (2,011,297) (1,702,087)
YEAR
(Loss) / earnings per share 4 (0.011) (0.013)
- basic
(Loss) / earnings per share 4 (0.009) (0.012)
- diluted
There are no other recognised gains and losses other than those shown above. All the Group*s activities consist of continuing operations.
ARCHIPELAGO RESOURCES PLC
BALANCE SHEET
for the 6 months ended 30 June 2008
Half-Year ended Half-Year ended
30 June 2008 30 June 2007
US$ US$
NON - CURRENT ASSETS
Property plant and equipment 51,392,272 46,352,561
Development, exploration and evaluation 24,632,441 17,346,530
Prepaid borrowing costs 3,047,716 3,176,017
Investments 612,287 809,766
79,684,716 67,684,874
CURRENT ASSETS
Inventories 159,623 222,398
Trade and other receivables 1,512,417 2,401,950
Prepayments 46,195 30,788
Derivative financial instruments 443 401
Cash and cash equivalents 1,238,879 922,401
2,957,557 3,577,938
TOTAL ASSETS 82,642,273 71,262,812
EQUITY
Share capital 3,452,884 2,415,077
Share premium account 85,809,616 63,285,911
Reserves 2,611,655 1,406,970
Accumulated losses (17,911,670) (12,403,377)
TOTAL EQUITY 73,962,485 54,704,581
CURRENT LIABILITIES
Trade and other payables 2,393,890 6,419,327
Provisions 396,701 138,904
Borrowings 5,889,197 10,000,000
TOTAL LIABILITIES 8,679,788 16,558,231
TOTAL EQUITY AND LIABILITIES 82,642,273 71,262,812
ARCHIPELAGO RESOURCES PLC
STATEMENTS OF CHANGES IN EQUITY
for the 6 months ended 30 June 2008
Share Share Other Accumulated
capital premium reserves losses Total
US$ US$ US$ US$ US$
Total equity at the beginning 3,334,800 82,975,590 1,655,242 (15,317,873) 72,647,759
of the half-year
Shares issued 118,084 2,834,026 - - 2,952,110
Share issue costs - - - - -
Employee options - - 113,913 - 113,913
Other options - - 842,500 (582,500) 260,000
Exchange differences on - - - - -
translation of foreign
operations
Loss for the half-year - - - (2,011,297) (2,011,297)
3,452,884 85,809,616 2,611,655 (17,911,670) 73,962,485
Total equity at the end of the
half-year
ARCHIPELAGO RESOURCES PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
for the 6 months ended 30 June 2008
Half-Year ended Half-Year ended
30 June 2008 30 June 2007
Notes US$ US$
NET CASH OUTFLOW FROM OPERATING 6 (1,049,080) (1,483,675)
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property, plant (3,494,690) (9,347,995)
and equipment
Payments for development, (2,932,768) (6,151,287)
exploration and evaluation
expenditure
Proceeds from sale of property, 823 -
plant and equipment
Proceeds from sale of investments 833,383 -
Interest paid (263,122) (254,659)
NET CASH USED IN INVESTMENT (5,856,374) (15,753,941)
ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of ordinary share capital 2,952,110 -
New short term loans - 10,000,000
Repayment of loans (3,000,000) -
Loan to related party (4,981) -
Prepaid borrowing costs (31,646) (1,700,800)
NET CASH FROM FINANCING ACTVITIES (84,517) 8,299,200
Effect of change in exchange rates (150,899) (56,138)
on cash and cash equivalents
NET (DECREASE) / INCREASE IN CASH (7,140,870) (8,994,554)
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT START 8,379,749 9,916,955
OF PERIOD
CASH AND CASH EQUIVALENTS AT END OF 1,238,879 922,401
PERIOD
NOTES TO THE INTERIM RESULTS
1. accounting policies
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting and Accounting Standards adopted by the
European Union and comply with the Companies Act .
At the date of authorisation of these financial statements, there were Standards and Interpretations that were in issue but are not yet
effective and have not been applied in these financial statements. The Directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the financial statements of the Group or Company, except for additional
disclosures when the relevant Standards come into effect.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on management*s best knowledge of the amounts, events
or actions, actual results ultimately may differ from those estimates.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
The financial statements have been prepared on the going concern basis, assuming the Group and the Company to continue as going concerns,
and therefore realise their assets and extinguish their liabilities in the normal course of business at the amounts stated in the financial
statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its
subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating
policies of a subsidiary.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the group*s equity therein. Minority
interests consist of the amount of those interests at the date of the original business combination and the minority*s share of changes in
equity since the date of the combination. Losses applicable to the minority in excess of the minority*s interest in the subsidiary*s equity
are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make
additional investment to cover the losses.
All intercompany transactions and balances between group enterprises are eliminated on consolidation.
Depreciation
Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value based on
prices prevailing at the date of acquisition of each asset evenly over its expected useful life as follows:
Plant and equipment * over 3 to 7 years
Exploration expenditure will be amortised over expected production volumes from the date production commences.
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to
their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either; (1) hedges of the fair value
of recognised
NOTES TO THE INTERIM RESULTS (Cont*d)
assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk
management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows of hedged items.
(i) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together
with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
(ii) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised directly
in equity, while the gain or loss relating to the ineffective portion is recognised immediately in the income statement.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss (for
instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the
recognition of a non*financial asset or a non*financial liability, the gains and losses previously deferred in equity are transferred from
equity and included in the measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was
reported in equity is immediately transferred to the income statement.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not
qualify for hedge accounting are recognised immediately in the income statement.
Deferred taxation
Deferred tax assets and liabilities are recognised for temporary timing differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary timing differences to measure the deferred
tax asset or liability. An exception is made for certain temporary timing differences arising from the initial recognition of an asset or a
liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other
than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary timing differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary timing differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in
controlled entities where the parent entity is able to control the timing of the reversal of the temporary timing differences and it is
probable that the differences will not reverse in the foreseeable future.
Current and deferred tax attributable to amounts recognised directly in equity are also recognised directly in equity.
NOTES TO THE INTERIM RESULTS (Cont*d)
Foreign currencies
Translation of foreign currency transactions
Transactions in foreign currencies of entities are converted to local currency at the rate of exchange ruling at the date of the
transaction.
Amounts payable to and by related entities that are outstanding at the reporting date and are denominated in foreign currencies have been
converted to local currency using rates of exchange ruling at the end of the financial period.
Translation of foreign currency financial statements
Items included in the financial statements of each of the entities within the Group are measured using the currency of the primary economic
environment in which the entity operates (*the functional currency*). The functional currency of the Group is US dollars. The consolidated
financial statements are presented in US dollars, which is Archipelago Resources Plc presentation currency.
As at the reporting date the assets and liabilities of the subsidiaries are translated into US dollars at the rate of exchange ruling at the
balance sheet date and their income statements are translated at the weighted average exchange rate for the year. The exchange differences
arising on the translation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is
transferred to profit or loss account.
Development, exploration and evaluation expenditure
Exploration and evaluation costs (including the acquisition cost of exploration properties) which relate to *an area of interest* are
carried forward on the balance sheet where the rights to tenure are current and:
* the area of interest has commercially recoverable reserves; or
* the exploration and/or evaluation activities of the area of interest have not yet reached a stage that permits a reasonable
assessment of the existence or otherwise of commercially recoverable reserves.
The Group performs impairment testing when facts and circumstances suggest the carrying amount has been impaired. If it is determined that
the asset has been impaired it is immediately written off in the income statement.
Development expenditure incurred on or on behalf of the Group is accumulated separately for each area of interest in which economically
recoverable reserves have been identified to the satisfaction of the Directors. Such expenditure comprises net direct costs and an
appropriate portion of related overhead expenditure having a specific nexus with the development property.
Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of interest is
aggregated with the cost of development.
All expenditure incurred prior to commencement of commercial levels of production from each development property, is carried forward to the
extent to which recoupment out of revenue to be derived from the sale of production from the relevant development property, or from the sale
of that property, is reasonably assured.
No amortisation is provided in respect of development properties until they are reclassified as *Mine Properties* following a decision to
commence mining.
Borrowing costs
Borrowing costs are recognised as an expense when incurred, except where the entity holds a qualifying asset, those borrowing costs directly
associated with the qualifying asset are capitalised.
NOTES TO THE INTERIM RESULTS (Cont*d)
2. segment information
UK Australia Indonesia South East Asia Total
US$ US$ US$ US$ US$
Half-year 2008
Segment result (1,389,300) (523,955) (98,042) - (2,011,297)
Unallocated revenue less -
unallocated expenses
Loss before income tax (2,011,297)
Half-year 2007
Segment result (743,922) (364,097) (115,531) (478,537) (1,702,087)
Unallocated revenue less -
unallocated expenses
Loss before income tax (1,702,087)
3. OPERATING GAIN/(LOSS)
Half-Year ended Half-Year ended
30 June 2008 30 June 2007
US$ US$
(a) Revenue
Interest income 69,063 132,104
69,063 132,104
(b) Expenses
Directors* remuneration 208,630 178,693
Other staff costs 182,982 139,360
Rent 8,480 10,973
Depreciation 4,022 12,659
Fair value loss on derivatives - 5,872
Borrowing costs 230,023 208,392
Diminution of investments 156,458 103,448
Net foreign exchange differences 318,439 132,926
Other expenses 709,027 308,672
Total administrative expenses 1,818,061 1,100,995
4. EARNINGS PER SHARE
The calculation of basic earnings per share is based on a loss for the half year of US$2,011,297(2007: US$$1,702,087), and on 183,541,936
(2007: 136,419,334) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
The calculation of dilutive earnings per share is based on a dilutive loss for the half year of US$1,781,741(2007: US$1,658,516), and on
200,701,937 (2007: 125,078,976) potential dilutive ordinary shares.
NOTES TO THE INTERIM RESULTS (Cont*d)
5. SHARE CAPITAL
30-Jun 30-Jun 30-Jun 30-Jun
2008 2007 2008 2007
Shares Shares US$ US$
Balance at beginning of the 182,769,334 136,419,334 3,334,800 2,415,077
half-year
Issued during the period 6,000,000 - 118,084 -
Balance at end of the 188,769,334 136,419,334 3,452,884 2,415,077
half-year
6. notes to the statement of cash flows
Half-Year ended Half-Year ended
30 June 2008 30 June 2007
US$ US$
(a) Reconciliation of operating loss/gain
to net cash outflow from operating
activities
Operating (loss) / gain (1,748,998) (1,447,428)
Non-cash items
Exploration and evaluation expenditure - 478,537
written off
Foreign exchange loss / (gain) 318,397 132,926
Share options expensed 373,913 -
Net fair value change of derivatives - 5,872
Depreciation 4,022 12,659
Provision for diminution of investments 156,458 103,448
Borrowing costs amortised 226,300 208,392
Provision for doubtful debt (45,694) -
Movement in assets and liabilities
Increase in debtors 129,109 (676,095)
Increase in prepayments (5,260) (30,788)
Increase/(decrease) in inventory 616,096 (3,344,399)
Increase/(decrease) in creditors (1,111,290) 3,067,501
Increase in provisions 37,868 5,700
Net cash outflow from operating activities (1,049,080) (1,483,675)
7. Post balance sheet eventS
On 1 August 2008, the Company made a placement of 12,380,000 shares at 25 pence per share to raise GBP3,095,000.
NOTES TO THE INTERIM RESULTS (Cont*d)
8. GENERAL
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies
Act 1985.
The interim report will be available from the Company's website, www.archipelagoresources.com.au
CONTACTS
Colin Loosemore, Managing Director, Archipelago Resources Plc.
Tel: 00-618-9364-8301
Gerry Beaney / Fiona Kindness, Grant Thornton UK LLP
Tel: 020 7383 5100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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