Argos Resources Ltd 2018 Financial Results (1943T)

TIDMARG

RNS Number : 1943T

Argos Resources Ltd

18 March 2019

18 March 2019

ARGOS RESOURCES LIMITED

("Argos" or "the Company")

2018 Financial Results

Highlights

Argos Resources Ltd (AIM: ARG.L), the Falkland Islands based exploration company focused on the North Falkland Basin, is pleased to announce its financial results for the year ended 31 December 2018.

 
 *    US$406,000 profit (2017: US$118,000) 
 
 
  *    US$788,000 cash reserves at 31 December 2018 (2017: 
       US$758,000) 
 
   *    The Working Interest in the Licence was transferred 
        back to Argos in February 2019 
 
   *    The Group will continue to receive quarterly cash 
        payments from Noble and Edison of GBP75,000 per 
        quarter, for a period of 450 days after the notice to 
        withdraw, until 27 December 2019 
 
 
   *    The current Second Phase of the Licence expires in 
        November 2019. Discussions about the licence term 
        beyond that date are underway with the Falkland 
        Islands Government 
 

The full Annual Report and Consolidated Financial Statements can be read and downloaded from the Company website: http://www.argosresources.com/news.php?page=regulatory-news

Argos Resources Limited ([phone])

www.argosresources.com

Ian Thomson, Chairman

John Hogan, Managing Director

Cenkos Securities plc (Nomad & Broker)

Derrick Lee ([phone])

Neil McDonald ([phone])

Joint Chairman's statement and Managing Director's review

In October 2018 Noble Energy Falklands Limited ("Noble") and Edison International S.p.A ("Edison") served notice of their intention to withdraw from Production Licence PL001 (the Licence) in the North Falkland Basin, in which Argos held a 5% Overriding Royalty Interest under a Participation Agreement. The Licence covers an area of approximately 1,126 square kilometres in the North Falkland Basin.

On receipt of the notice Argos exercised the option under the Participation Agreement to have the Licence reassigned to it, which effectively terminated the Participation Agreement. Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of GBP75,000 per quarter, for a period of 450 days after the notice to withdraw. These payments, together with current cash balances of $788,000 at year end 2018, leave the Group adequately financed for at least twelve months beyond sign-off.

The current Second Phase of the Licence expires in November 2019 and discussions about the licence term beyond that date are underway with the Falkland Islands Government. The Working Interest in the Licence was transferred back to Argos in February 2019 and the Company will seek to secure other partners to participate in its development.

Results and dividend

The results for the year and the Group's financial position as at the year-end are shown in the attached financial statements. The directors have not recommended a dividend for the year (2017: $nil).

Business review

The Group has returned a profit for the year ended 31 December 2018 of $406,000 (2017: $118,000) which equates to a profit per share of 0.18 cents (2017: 0.05 cents). The increase in profit is due to the recognition of the full amount of the income due under the Participation agreement in the current year, as Argos are contractually entitled to the income under the termination clause of the agreement.

Administration expenses were $334,000 in 2018 compared to $329,000 in 2017.

Shareholders' equity has increased marginally from $29.46 million to $29.87 million in the year since 31 December 2017, as receipts under the Participation Agreement offset the administration costs leaving a small surplus. Cash in the year increased from $758,000 to $788,000.

IFRS 9 requires the consideration of the risk attached intercompany loan between the parent and subsidiary companies. This has resulted in an impairment provision in the accounts of the parent but it has no impact on the group accounts and does not affect the group's view of the outcome of the project.

Outlook for the next financial year

Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of GBP75,000 per quarter, which equates to $96,000 at the year-end exchange rate, for a period of 450 days after the notice to withdraw.

The Group is therefore fully funded for at least twelve months beyond sign-off.

Ian Thomson John Hogan

Chairman Managing Director

Consolidated statement of comprehensive income

Year ended 31 December 2018

 
                                                         Year            Year 
                                                        ended           ended 
                                                  31 December     31 December 
                                                         2018            2017 
                                                        $'000           $'000 
 Other income                                             784             380 
 Administrative expenses                                (334)           (329) 
 
 Finance income                                             4               1 
 Foreign exchange (losses)/gains                         (48)              66 
---------------------------------------------  --------------  -------------- 
 
 Profit for the year attributable 
  to owners of the parent                                 406             118 
---------------------------------------------  --------------  -------------- 
 
 Total comprehensive income 
  for the period 
 attributable to owners of 
  the parent                                              406             118 
 
 Basic and diluted earnings 
  per share (cents)                                      0.18            0.05 
---------------------------------------------  --------------  -------------- 
 

Consolidated statement of financial position

As at 31 December 2018

 
                                            2018      2017 
                                           $'000     $'000 
 Assets 
 Non-current assets 
 Exploration intangible assets 
  and royalty interests                   28,749    28,749 
                                          28,749    28,749 
 Current assets 
 Other receivables                           392        14 
 Cash and cash equivalents                   788       758 
-------------------------------------  ---------  -------- 
 
 Total current assets                      1,180       772 
-------------------------------------  ---------  -------- 
 
 Total assets                             29,929    29,521 
 
 Liabilities 
 Current liabilities 
 Trade and other payables                     61        59 
 
 Total liabilities                            61        59 
 
 Total net assets                         29,868    29,462 
-------------------------------------  ---------  -------- 
 
 
 Capital and reserves attributable 
  to 
 equity holders of the Company 
 Share capital                             6,696     6,696 
 Share premium                            30,071    30,071 
 Retained losses                         (6,899)   (7,305) 
 
 Total shareholders' equity               29,868    29,462 
-------------------------------------  ---------  -------- 
 

Consolidated statement of cash flows

Year ended 31 December 2018

 
                                                          Year            Year 
                                                         ended           ended 
                                                   31 December     31 December 
                                                          2018            2017 
                                                         $'000           $'000 
 Cash flows from operating activities 
 Profit for period before taxation                         406             118 
 Adjustments for: 
 Finance income                                            (4)             (1) 
 Foreign exchange loss/(gain)                               50            (67) 
 
 Net cash inflow from operating 
  activities 
 before changes in working capital                         452              50 
----------------------------------------------  --------------  -------------- 
 
 Increase in other receivables                           (378)               1 
 Increase/(decrease) in other payables                       2            (89) 
----------------------------------------------  --------------  -------------- 
 
 Net cash inflow/(outflow) from 
  operating activities                                      76            (38) 
----------------------------------------------  --------------  -------------- 
 
 Investing activities 
 Interest received                                           4               1 
 
 Net cash received from investment 
  activities                                                 4               1 
----------------------------------------------  --------------  -------------- 
 
 Financing activities 
 Issue of ordinary shares (share 
  options exercised)                                         -              27 
 
 Net cash from financing activities                          -              27 
----------------------------------------------  --------------  -------------- 
 
 Net increase/(decrease) in cash 
  and cash equivalents                                      80            (10) 
 Cash and cash equivalents at beginning 
  of period                                                758             701 
 Exchange (losses)/gains on cash 
  and cash equivalents                                    (50)              67 
----------------------------------------------  --------------  -------------- 
 

 Cash and cash equivalents at end 
  of the year                                              788             758 
----------------------------------------------  --------------  -------------- 
 

Consolidated statement of changes in equity

Year ended 31 December 2018

 
 
                             Share      Share   Retained     Total 
                           capital    premium     losses    equity 
                             $'000      $'000      $'000     $'000 
 At 1 January 2017           6,669     30,071    (7,423)    29,317 
 Total comprehensive 
  income for the year            -          -        118       118 
 Shares issued (share 
  options exercised)            27          -          -        27 
 
 At 31 December 2017 
  And 1 January 2018         6,696     30,071    (7,305)    29,462 
-----------------------  ---------  ---------  ---------  -------- 
 
 Total comprehensive 
  income for the year            -          -        406       406 
 
 At 31 December 2018         6,696     30,071    (6,899)    29,868 
-----------------------  ---------  ---------  ---------  -------- 
 

In preparing the financial information in this statement the Group, which consists of the Company Argos Resources Ltd, and its wholly owned subsidiary Argos Exploration Ltd, has applied policies in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). The financial information has been prepared under the historical cost convention.

The financial information set out above does not constitute the company's statutory accounts for 2017 or 2018. Statutory accounts for 2017 and 2018 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2017 and 2018 were unqualified and did not draw attention to any matters by way of emphasis.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

FR CKFDBQBKDPND

(END) Dow Jones Newswires

March 18, 2019 11:00 ET (15:00 GMT)