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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Reabold Resources Plc | LSE:RBD | London | Ordinary Share | GB00B95L0551 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0825 | 0.08 | 0.085 | 0.0825 | 0.0825 | 0.0825 | 34,504,609 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Mgmt Invt Offices, Open-end | 560k | -45k | 0.0000 | N/A | 7.9M |
From Apr 2019 to Apr 2024
TIDMRBD
RNS Number : 9830S
Reabold Resources PLC
29 June 2018
FOR IMMEDIATE RELEASE 29 June 2018
REABOLD RESOURCES PLC
Annual Report and Financial Statements
For the year ended 31 December 2017
The Company is pleased to announce the publication of its Annual Report and Financial Statements for the year ended 31 December 2017, extracts from which are set out below, and which will be posted to shareholders and made available on the website www.reabold.com
For further information please contact:
Reabold Resources plc c/o Camarco Stephen Williams +44 (0) 20 3757 4980 Sachin Oza Beaumont Cornish Limited Roland Cornish James Biddle Felicity Geidt +44 (0) 20 7628 3396 Camarco James Crothers Ollie Head Billy Clegg +44 (0) 20 3757 4980 Whitman Howard Limited - Joint Broker Nick Lovering Grant Barker +44 (0) 20 7659 1234 Turner Pope Investments (TPI) Ltd - Joint Broker Andy Thacker +44 (0) 20 3621 4120
Chairman's Statement
The year ended 31 December 2017 has been a transformational year for Reabold Resources Plc ("Reabold" or "the Company"). In October 2017, the Company appointed Sachin Oza and Stephen Williams to the Board as Co-Chief Executive Officers to lead the Company in focusing on pre-cash flow upstream oil and gas projects. Sachin and Stephen have worked in the energy sector for 14 and 15 years respectively and have both worked as investment analysts with M&G investments. Sachin and Stephen led fund raisings by the Company in September and October 2017 totalling GBP5.7 million, primarily from institutional investors, to support the Company's focused investing policy.
The investing policy of the Company remains to acquire direct and indirect interests in exploration and producing projects and assets in the natural resources sector, and consideration is currently given to investment opportunities globally. However, under that policy, the Board is to concentrate on investments in upstream oil and gas projects. Those projects have been in the form of minority non-operating investments and interests in on-shore or near-shore assets with low-cost drilling opportunities that can provide medium term production and hence cashflow.
On 1 November 2017, the Company was pleased to announce its first investment under its new executive team and focused investment direction, entering share subscription agreements to invest a total of GBP1.5 million in Corallian Energy Limited ("Corallian"), a private UK oil and gas appraisal and exploration company. Corallian has a portfolio of UK oil & gas licences, including the Colter appraisal project, that Corallian management states has a high chance of success given the appraisal nature of the project together with industry comparative low drilling costs. An initial GBP0.5m subscription in Corallian was completed on signing of the subscription agreement, with a further GBP1 million subscription to be completed at the time of the authorisation for expenditure by the joint venture partnership of P1918 in respect of the Colter well, which was completed in May 2018. Subsquently in February 2018, the Company announced that it was supporting a further capital raising by Corallian and would invest an additional GBP1.0 million, of which GBP0.5m was completed in February 2018 and the balance of GBP0.5m was completed in April 2018. Completion of the above subscriptions has resulted in Reabold investing a total of GBP2.5m for a 32.9% interest in Corallian.
On 4 December 2017, the Company was pleased to announce its second investment, entering into an agreement with Danube Petroleum Limited ("Danube", a wholly owned subsidiary of ASX listed ADX Energy Ltd, (ASX:ADX) to invest a total of GBP1.5 million for a 29% interest in Danube. Danube is a newly-formed UK private oil and gas company, which holds a 50% interest in the high impact Parta licence ("Parta"), onshore Romania, and a 100% interest in a low-risk appraisal campaign within Parta, comprising of two wells planned in the second half of 2018 to test 33 Billion Cubic Feet ("BCF") prospective and contingent resources. The first tranche of the Company's investment in Danube of GBP0.375 million was completed in March 2018, with the second tranche of GBP1.125 million to be completed upon submission of an Authorisation for Expenditure for the first appraisal well, which is anticipated in Q3 2018. Reabold has an option to invest a further GBP0.375 million in Danube, which can be actioned at the discretion of the Company within 6 months after completion of the transaction.
On 14 June 2018, the Company was pleased to announce the significant acquisition of 100% of the issued share capital of Gaelic Resources Ltd ("Gaelic") for the issue of 420 million new ordinary shares in Reabold ("Consideration Shares"), representing GBP3.04 million at the closing price of 0.725p per share on AIM on 12 June 2018 (the "Gaelic Acquisition"). The Gaelic Acquisition provides Reabold with options to participate in multiple near-term, high-impact oil and gas leases in California, United States (the "Leases").
Placings
In April 2017, the Company announced the arrangement of subscriptions totalling GBP0.367 million for 73,500,000 new ordinary shares at a price of 0.5p per share to fund the Company's investment of AUD$0.5 million (approx. GBP0.3 million) in lithium explorer Tonsley Mining Pty Ltd ("Tonsley") and for working capital purposes. In July 2017 the Board announced that it did not believe that its investment in Tonsley and its San Jose Lithium-Tin Project in Spain represented a long term asset for the Comapny and that it had delivered a Notice of Exercise of Put Option, which resulted in a transfer of AUD$0.5 million back to the Company.
Following the divestment of Tonsley and the Board's decision to focus on upstream oil and gas projects, in September 2017 the Company undertook a placing of 792,000,000 new ordinary shares at a price of 0.5 pence per share, raising GBP3.96 million (before expenses) to support the Company's investment policy. Whitman Howard and Turner Pope were appointed as the Company's joint broker, and they were instrumental in the equity fund raise from a mix of institutional and retail investors.
In view of the strong demand from investors to participate in the September placing, which significantly exceeded the Directors' existing authorities to allot shares on a non-pre-emptive basis, the Company obtained approval from shareholders at a general meeting ("GM") of the Company in October 2017 to enable a further placing on a non-pre-emptive basis. Subsequent to shareholder approval at the GM, the Company completed a further placing of 352,000,000 new ordinary shares at a price of 0.5 pence per share raising GBP1.76 million (before expenses) in October 2017.
Subsequent to year end, and in further support of the Company's investing strategy and executive team, the Company was delighted to complete in March 2018 a significant fund raising of 1,291,750,000 new ordinary shares at a price of 0.6 pence per share, raising GBP7.75 million (before expenses) to support the Company's investment policy.
Corallian Energy Investment
On 1 November 2017, the Company signed two share subscription agreements to acquire a total of 1,111,111 new shares at GBP1.35 per share in Corallian, for a total investment of GBP1.5 million (the "Corallian Investment"). Corallian has a portfolio of UK oil & gas licences, including the Colter appraisal project ("Colter"), that Corallian management states has a high chance of success given the appraisal nature of the project together with industry comparative low drilling costs.
The total subscription for GBP1.5 million would have given Reabold a 35.4% interest in Corallian at that time, with the right to appoint a director to the board of directors of Corallian. An initial GBP0.5 million subscription in Corallian was completed in October 2017, followed by the balance of GBP1.0 million in June 2018.
Corallian, at the time, held five licence interests in the UK, one of which was a 60% in UK licence P1918 which includes the Colter prospect. P1918 was held by a joint venture between Corallian (60%), the operator and Corfe Energy Limited (40%).
The Corallian Investment was the first to be completed in line with Reabold's strategy to identify strategic oil & gas opportunities with the potential to create significant shareholder value. The investment was funded from existing Reabold cash reserves following the successful fund raises in September and October 2017.
Highlights - Corallian's Colter Project:
-- Colter is offshore, adjacent to the Wytch Farm oil field, which has produced in excess of 450 million barrels of oil;
-- A 1986 discovery well on Colter recovered 41.9 API oil on test from a 10.5m oil column;
-- Since the 1980's seismic technology has advanced significantly such that Corallian has used modern techniques to merge and reprocess 3D seismic datasets which have enabled the identification of over 100m of mapped vertical relief up-dip of the discovery well;
-- An appraisal well is planned to be drilled on Colter by Corallian (Operator) in 2018;
-- Corallian estimates gross mean prospective resources of 30 million barrels of recoverable oil for the Colter prospect; and
-- Corallian financial modelling based on the above prospective resources forecasts a gross NPV (10) in the success case of GBP255 million.
Since Reabold's initial investment, we have been very pleased with the significant progress that has been achieved within the Corallian portfolio, including multiple farm-outs of both the Colter and Wick prospects.
On 12 February 2018, Reabold announced that Corallian was intending to raise additional capital ("the fundraise") in order to increase its exposure to the Colter prospect from 40% to 50%, to increase its exposure to the Wick prospect from 25% to 40%, and to further progress additional assets including the Oulton prospect. Following the fundraise Corallian is fully funded for all of this activity.
Reabold was pleased to support and participate in the fundraise and on 1 March 2018 announced that it had signed two subscription agreements with Corallian Energy being made from existing cash resources. The first agreement was an unconditional subscription for 333,333 new Corallian shares at GBP1.50 per share for an investment of GBP0.5 million, and was completed in February 2018 . The second agreement gave Reabold the option to subscribe for an additional 333,333 new Corallian shares at a price of GBP1.50 per share for an investment of GBP0.5 million any point up to 6 April 2018, which was completed prior to the expiry date. Taking the full Corallian fundraisings into account, Reabold has invested a total of GBP2.5 million for a current interest in 32.9% of Corallian's issued share capital.
Danube Petroleum Investment
In December 2017, the Company entered an agreement with Danube Petroleum Limited ("Danube") to invest a total of GBP1.5 million for a 29% interest in Danube. Danube holds a 50% interest in the high impact Parta licence, onshore Romania, and a 100% interest in a low-risk appraisal campaign within Parta, comprising of two wells planned in H2 2018 / H1 2019 to test 33 BCF prospective and contingent resources.
The Danube investment, which includes the right for Reabold to appoint a director to the Board of Danube, was formed of an initial 375,940 new shares issued upon completion of the transaction at GBP1.00 per share in March 2018. This will be followed by a further 1,127,819 new shares to be issued upon submission of an Authorisation for Expenditure for the first appraisal well at GBP1.00 per share anticipated in the third quarter of 2018. Reabold has an option of a further 375,940 shares in Danube at GBP1.00 per share, which can be actioned at the discretion of the Company within 6 months after completion of the transaction.
Highlights - Danube Petroleum Limited's Parta Project:
-- Parta licence is situated onshore, within a proven and stable hydrocarbon region that benefits from low drilling and operating costs
-- The two well Parta appraisal programme will redrill 1980s gas discoveries, including one that flowed gas to surface
-- Recently acquired 3D seismic data has delineated considerable untapped gas resources of 33 BCF gross in the primary reservoir targets, with additional upside in other horizons
-- Onshore Romania requires very low capital expenditure with nearby infrastructure, which will ensure fast payback following first gas
-- Economics are highly attractive based on current gas prices of $6.2/mbtu and the Parta licence is considered profitable at substantially lower gas prices
-- The Parta licence includes additional exploration and appraisal upside on the block with the potential for further total un-risked gross prospective resources of approximately 300 BCF of gas and 45 MMbbl of oil respectively identified on existing 2D seismic
-- Danube Petroleum Limited gives Reabold a foothold in Eastern Europe, providing the Company the opportunity to consolidate other licences in the area
The 33 BCF of prospective and contingent resource Parta appraisal project will consist of two low-cost appraisal wells, planned for drilling in 2018. The directors, based on financial modelling of the prospective resources of the Parta appraisal project, estimate an NPV (10) in the success case of up to USD$86 million gross for a multi-well development across the two appraisal projects.
Tonsley Mining Pty Limited
On 19 April 2017, the Company announced that it had entered into an agreement to buy an initial interest in the advanced San Jose Lithium-Tin Project in Spain ("the San Jose Project") for a consideration of AUD$0.5 million (approx. GBP0.3 million). The San Jose Project is a Joint Venture between Plymouth Minerals Limited's ("Plymouth" ASX:PLH) subsidiary Tonsley Mining Pty Limited ("Tonsley") and Sacyr, S.A, the IBEX 35 Spanish listed multinational infrastructures and services company. This investment was in line with Reabold's strategy to identify strategic mineral opportunities with the potential to add significant shareholder value.
The initial investment in the San Jose Project was affected through a share subscription agreement in the amount of AUD$0.5 million to acquire a minority interest of approx. 2.0% in Tonsley, an Australian special purpose holding company which owns the rights to earn up to a 75% interest in the San Jose Project. After an agreed amount of time between the Parties or in the event no interest is earned by Tonsley (or its subsidiary) in the San Jose Project, there was an agreed contractual mechanism (by way of options) for the AUD$0.5 million funds to be returned to the Company.
Tonsley has the right to earn a 75% interest in the San Jose Project by spending EUR1.5 million for a first stage 50%, then EUR2.5 million for the additional 25%, which is being funded by Plymouth.
On 17 July 2017, the Company announced that it had delivered to Plymouth a Notice of Exercise of Put Option in respect of Reabold's interest in Tonsley, whereby Reabold wouldtransfer back to Plymouth its shares in Tonsley in consideration of receipt of AUD$0.5 million (approx. GBP0.3 million), payable on 18 July 2017. Whilst the Tonsley investment represented an interesting opportunity for Reabold, it was decided that this would not form a long term asset for Reabold and therefore that Reabold should exercise its put option and redeploy the money on other investments.
Mogul Ventures Corp. Investment
The Company acquired in June 2014 a 1.2% interest in Mogul Ventures Corp. ("Mogul"), a private company focused on natural resources in Mongolia, principally tin.
In September 2017 Mogul raised CAD$25,000 through a debenture convertible at $0.25 per share to provide working capital. Mogul management advise that Mogul is currently is discussion with two potential investors/strategic partners from China for development of the its tin project, as well as ongoing discussions with a TSX Venture Exchange listed company for a financing and listing transaction.
The Company's interest in Mogul is non-core to its investment focus on pre-cash flow upstream oil and gas projects, and the Company is evaluating its divestment.
Notwithstanding that Mogul management remain positive towards Mogul's future in the public markets under improved market conditions, the Company has impaired its 1.2% interest in Mogul from GBP200,000 to GBP50,000, given Mogul's cash constrained position and challenges to date in raising significant capital, and the lack of sufficient clarity of its financial position.
Post year-end acquisition - Gaelic Resources Ltd
The proposed acquisition of 100% of Gaelic is considered by management to be a perfect fit with the Reabold strategy, providing high-impact drilling opportunities in California, with considerably de-risked wells with low drilling costs and a fast path to monetisation.
Following completion of the Gaelic Acquisition, Reabold, through Gaelic, will have the right to earn-in to 50% of the Leases by drilling up to five wells by the end of 2019. Reabold expects three of these wells to be drilled before the end of 2018 with the first two, on the West Brentwood and Monroe Swell Leases, anticipated to be drilled in Q3. In a success case, these wells will be put onto production, providing cashflow for further drilling activity. The Leases are operated by Integrity Management Solutions (the "Operator"), a California operating company that will direct operational decisions pertaining to the licenses. The five-well drilling programme is expected to cost Reabold up to approximately USD$7 million for the five wells.
The Gaelic Acquisition is subject to the approval of a Resolution to authorise the issue and allotment of the 420 million Consideration Shares at a General Meeting of the Company to be held on 29 June 2018. Application will be made in due course for the Consideration Shares, which when issued, will rank pari passu with the existing ordinary shares in issue, to be admitted to trading on AIM. The vendors of Gaelic, who collectively will hold 12.86 per cent. of Reabold's enlarged issued share capital, have agreed to a lock-in period in respect of 75% of the Consideration Shares of six months from the date of issue and thereafter to orderly market arrangements for a further six months.
Consultants
We were delighted to appoint as a consultant to the Company, Dr Peter Dolan, who has been involved in the oil and gas exploration industry since 1965 and has considerable experience with a wide range of pre-cash flow assets. He has an extensive network of personal contacts in the industry and is an active member of the Geological Society as well as various professional bodies and charities. Peter co-founded Ophir Energy plc and Ikon Science Limited and numerous other entities which have long since made their exits. He has also invested in early stage companie, including the oil and gas sector. Peter brings a wealth of experience to the Company in his role as a consultant.
The Board looks forward to reporting further in due course.
Strategic Report
Much has been achieved in the several months since we joined Reabold, including:
-- three rounds of fundraising attracting strong institutional support;
-- investments in Corallian and Danube funding an exciting (and potentially transformational) drilling campaign;
-- the proposed acquisition of 100% of Gaelic; and -- maturing a number of further exciting transactions.
These achievements are just the first part of executing our differentiated strategy which is tailored to create shareholder value against an industry backdrop that has caused widespread share price underperformance in junior exploration and production companies since 2012.
Our strong focus on this sector during our many years in the asset management industry leaves us fully understanding the frustration felt by investors experiencing falling share prices despite sound underlying asset bases. At the core of the Reabold strategy is the conversion of quality assets into positive share price performance, and this mindset drives everything that we do.
This is a very exciting time in the upstream oil & gas industry; costs remain extremely low following the downturn, and with a healthy commodity price outlook, project returns (for high quality assets) are more robust than has been the case for quite some time. As such, this is the ideal time to put capital into the ground, and the lack of activity in conventional oil & gas over the last half a decade has resulted in an abundance of interesting projects in need of financing.
We are extremely excited by the return potential these opportunities provide Reabold investors and look forward to embarking on a multi-well transformational drilling campaign over the next twelve months.
Business Model
Reabold is an investor in upstream oil and gas projects with an aim to create value from each project by investing in undervalued, low-risk, near-term upstream oil & gas projects and by identifying realistic potential exit plans prior to investment. The Company is focused on investment in pre-cash flow upstream oil and gas projects, primarily as significant minority interests or controlling interests in unlisted oil and gas companies.
The Company's long term strategy is to re-invest capital made through its investments into larger projects in order to grow the Company. Reabold aims to gain exposure to assets with limited downside and high potential upside, capitalising on the value created between the entry stage and exit point of its projects. The Company invests in projects that have limited correlation to the oil price.
Reabold has a highly-experienced management team, who possess the necessary background, knowledge and contacts to carry out the Company's strategy. Management believes the current distress in the oil & gas industry presents an opportune time to deploy capital in undervalued assets with huge potential.
The Company has made two initial investments in Corallian and Danube and management continues to assess a number of other high quality opportunities. As announced on 14 June 2018, the Company announced the acquisition of 100% of the issued share capital of Gaelic subject to shareholder approvals at the General Meeting of the Company to be held on 29 June 2018. Gaelic has the right to earn-in to 50% of multiple near-term, high-impact oil and gas leases in California, United States by drilling up to five wells by the end of 2019.
Corallian
Corallian management expects both the Colter and Wick prospects to be drilled in 2018. According to Corallian management estimates, the Colter project targets an NPV (net to Corallian at a 50% equity interest) of GBP128M based on 15M barrels of oil and a $55/bbl oil price. Corallian management estimates a 58% chance of success. The Wick project targets an NPV (net to Corallian at a 40% equity interest) of GBP84M based on 9.4M barrels of oil and a $55/bbl oil price. Corallian management estimates a 30% chance of success.
Danube
Reabold's investment in Danube offers the Company exposure to the low-risk, high-impact Parta license, onshore Romania. In line with Reabold's strategy, and as previously announced, a two-well appraisal campaign is scheduled for H2 2018. The objective of the campaign is to test 33 BCF of prospective and contingent resources, delieniated by 3D seismic data, gross to Danube Petroleum that will generate $86m of NPV to Danube Petroleum.
Parta particularly stood out as an opportunity due to the low drilling and operating costs which meant the time to invest in the asset was now. The economics are extremely attractive based on current gas prices and the license is considered profitable at considerably lower gas prices.
As part of the planned work programme, the appraisal wells are also intended to be producer wells. Danube can use the abundance of nearby infrastructure to readily monetise gas, thereby creating cashflow for Danube and subsequently Reabold. This cash can then be used to target further upside on the licence on which prospective resources of 300BCF of gas and 45 MMbbl of oil have been identified by the operator. As part of the appraisal campaign, two gas discoveries, one of which has previously flowed gas to surface, will be re-drilled.
Principal Risks and Uncertainties
The Company continuously monitors its risk exposures and reports to the board of directors ("The Board") on a regular basis. The Board reviews these risks and focuses on ensuring effective systems of internal financial and non-financial controls are in place and maintained.
Hot Features
Premium
Risk Mitigation Magnitude & Likelihood
Exploration Risk, Reabold's Analysis of available Magnitude- High
investee companies fail technical information Likelihood - High
to locate and explore to determine work programme.
hydrocarbon bearing Risk sharing arrangements
prospects that have entered into to reduce
the potential to deliver downside risk.
commercially, e.g. key
wells are dry or less
successful than anticipated.
------------------------------- -----------------------
Permitting Risk, planning, Reabold's investee companies Magnitude- High
environmental, licensing have to date been successful Likelihood - Medium
and other permitting in obtaining the required
risks associated with permits to operate.
our investees operations Therefore, Reabold considers
particularly with exploration that such risks are
drilling partially mitigated
operations. through compliance with
regulations, proactive
engagement with regulators,
communities and the
expertise and experience
of the management teams.
------------------------------- -----------------------
Liquidity Risk, because The Board regularly Magnitude- High
of its investee's exploration reviews Reabold's cashflow Likelihood - Medium
and development activities. forecast and the availability
or adequacy of its current
facilities to meet Reabold's
cash flow requirements.
------------------------------- -----------------------
Financial Review
The loss of the Company for the 12 months ended 31 December 2017 was GBP1,152,000 (2016: loss of GBP115,000), including impairment charge of GBP150,000 (2016: GBPnil) and share based payments expense of GBP559,000 (2016: GBPnil). The net assets as at 31 December 2017 were GBP5,732,000 (2016: GBP509,000). As at 31 December 2017, the Company had cash of GBP5,307,000 (2016: GBP340,000). Due to the relative limited time frame and activity of the Company to date in respect to the current focused strategy, the Board have not identified any key performance indicators of the Company.
Outlook
We are highly encouraged by the success we have had so far in the implementation of our strategy to invest in low-risk, high impact upstream oil and gas projects. With a portfolio that now contains the Danube and Corallian appraisal campaigns drilling in 2018, and the proposed acquisition of 100% of Gaelic and its exciting programme in 2018, together with a number of other projects currently under review, Reabold shareholders can look forward to an exciting 2018 and beyond.
Statement of comprehensive income for the year ended 31 December 2017
_____________________________________________________________________________________
Notes 2017 2016
GBP'000 GBP'000
Administration expenses (342) (115)
Impairment 9 (150) -
Provision 11 (101) -
Share based payments expense 13 (559) -
Loss on ordinary activities before taxation 4 (1,152) (115)
Taxation on loss on ordinary activities 7 - -
Loss for the financial year (1,152) (115)
Other comprehensive income - -
Total comprehensive loss for the financial
year (1,152) (115)
Attributable to:
Equity holders (1,152) (115)
(1,152) (115)
Loss per share
Basic loss per share (pence) 8 (0.18) (0.04)
Diluted loss per share (pence) 8 (0.14) (0.04)
All amounts relate to continuing operations.
Statement of financial position as at 31 December 2017 Company no. 3542727
_____________________________________________________________________________________
Notes 2017 2016
GBP'000 GBP'000
ASSETS
Non-current assets
Investments available for sale 9 550 200
550 200
Current assets
Cash and cash equivalents 5,307 340
Trade and other receivables 10 30 1
Prepayments 32 -
5,369 341
Total assets 5,919 541
EQUITY
Capital and reserves
Share capital 12 1,654 435
Share premium account 13,048 8,451
Capital redemption reserve 200 200
Share based payment reserve 559
Retained loss (9,729) (8,577)
Total equity 5,732 509
LIABILITIES
Current liabilities
Trade and other payables 14 65 4
Provisions 11 101 -
Accruals 14 21 28
Total liabilities 187 32
Total equity and liabilities 5,919 541
Statement of changes in equity for the year ended 31 December 2017
_____________________________________________________________________________________
Share Share Advance Capital Share Retained Total
capital premium received redemption based earnings
account for shares reserve payments
to be reserve
issued
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 31 December
2015 395 8,291 200 200 - (8,462) 624
-------- -------- ----------- ----------- --------- --------- -------
Total comprehensive
loss for the year - - -- - - (115) (115)
Changes in equity for
2016
Issue of share capital 40 160 - - - - 200
Advance received for
shares to be issued - - (200) - - - (200)
Balance as at 31 December
2016 435 8,451 - 200 - (8,577) 509
-------- -------- ----------- ----------- --------- --------- -------
Total comprehensive
loss for the year - - - - - (1,152) (1,152)
Changes in equity for
2017
Issue of share capital 1,219 4,597 - - - - 5,816
Share based payments - - - - 559 - 559
Balance as at 31 December
2017 1,654 13,048 - 200 559 (9,729) 5,732
-------- -------- ----------- ----------- --------- --------- -------
Statement of cash flows for the year ended 31 December 2017
_____________________________________________________________________________________
Notes 2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (1,152) (115)
Adjustments:
Impairment 9 150 -
Share based payments 13 559 -
Provisions 11 101 -
Realised foreign exchange gain (6) -
Operating cash flows before movement in
working capital (348) (115)
(Increase)/decrease in receivables (29) -
Increase/(decrease) in payables and accruals 54 (26)
(Increase)/decrease in prepayments (32) -
Net cash used in operating activities (355) (141)
Cash flows from investing activities
Purchase of available for sale investments 9 (795) -
Proceeds from divestment of available for
sale investments 9 302 -
Net cash used in investing activities (494) -
Cash flows from financing activities
Share placement net proceeds 12 5,816 -
Net cash generated from financing activities 5,816 -
Net increase/(decrease) in cash and cash
equivalents 4,967 (141)
Cash and cash equivalents at the beginning
of the period 340 481
Cash and cash equivalents at the end of
the period 5,307 340
Cash and cash equivalents comprises:
Cash and cash equivalents 5,307 340
Overdraft and borrowings - -
5,307 340
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2017
Reabold Resources Plc is a public limited company registered in England and Wales under the Companies Act and limited by shares. Registered in England number 3542727 at 20 Primrose Street, London EC2A 2EW. The nature of the Company's operations and its principal activities are set out in the Directors' report on pages 10 to 12.
1. Preparation of financial statements
Standards, amendments and interpretations in issue but not yet effective
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Company.
Management anticipates that all of the pronouncements will be adopted in the Company's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Company's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Company's financial statements.
IFRS 9 "Financial Instruments"
The IASB have released IFRS 9 following completion of the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. The new standard introduces extensive changes to IAS 39's guidance on the classification and measurement of financial assets and introduces a new 'expected credit loss' model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018 and has been endorsed by the European Union.
IFRS 15, 'Revenue from Contracts with Customers'
IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 'Revenue', IAS 11 'Construction Contracts', and several revenue-related interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs. These include how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities. IFRS 15 is effective for reporting periods beginning on or after 1 January 2018. This standard has been endorsed by the European Union.
IFRS 16 "Leases"
The IASB has published IFRS 16 'Leases', completing its long-running project on lease accounting. The new Standard, which is effective for accounting periods beginning on or after 1 January 2019, requires lessees to account for leases 'on-balance sheet' by recognising a 'right-of-use' asset and a lease liability. It will affect most companies that report under IFRS and are involving in leasing, and will have a substantial impact on the financial statements of lessees of property and high value equipment. This standard has been endorsed by the European Union.
The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Company in future periods. The Company's management will undertake a review of the impact on the Company of the above new standards during 2018.
2. Summary of significant accounting policies
Basis of accounting
The 2017 financial statements are prepared under International Financial Reporting Standards, as adopted for use by the European Union.
The financial statements have been prepared on the going concern basis and historical cost basis, except that the following assets and liabilities are stated at their fair value: financial instruments classified as fair value through the profit and loss.
The financial statements are presented in sterling, the currency of the primary economic environment in which the Company operates and in which the majority of the Company's transactions are denominated.
The principal accounting policies adopted are set out below.
Going concern
The financial statements have been prepared on the going concern basis. The Directors have prepared cash flow forecasts for the period ending 30 June 2019 which take account of the current cost and operational structure of the Company and investment agreements. These forecasts demonstrate that the Company has sufficient cash funds available to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
Taxation
The tax charge represents the sum of current and deferred tax.
Current tax payable is based on taxable profits for the year. Taxable profits differ from net profits as reported in the income statement because it excludes items that are taxable or deductible in other years and items that are not taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts 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 liability method. Deferred tax liabilities are recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets are offset when there is a legally enforceable right to offset current tax assets against current liabilities and when deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entity where there is an intention to settle on a net basis.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability or the asset is realised.
Currencies
Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary items in the statement of financial position are retranslated at the closing exchange rate at each statement of financial position date, and the resulting translation differences are recorded in profit or loss.
Impairment of investments available for sale
At each reporting date, if there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the recoverable amount, which is calculated using the Value in Use method. Any impairment loss is recognised immediately in the Statement of Comprehensive Income. Such impairment losses shall not be reversed.
Share based payments
The Company has an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:
-- Including any market performance conditions;
-- Excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period; and
-- Including the impact of any non-vesting conditions (for example, the requirement for employees to save).
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
In addition, in some circumstances, employees may provide services in advance of the grant date, and therefore the grant-date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date.
At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium.
Financial instruments
Financial assets and financial liabilities are recognised in the Company's statements of financial position when the Company has become a party to the contractual provisions of the instrument.
Investments available for sale
Classification
The Company classified its investments in unlisted shares that are not traded in an active market as available for sale at inception. Available for sale financial assets are non-derivatives that are either designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.
Recognition
Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investments.
Measurement
Unlisted Investments are initially recognised at cost, being the fair value of consideration given. Where the Company has investments in equity instruments that do not have a quoted price in an active market and whose fair value cannot be reliably measured these are carried at historic cost less any identified impairment losses at the end of each reporting period.
Fair value hierarchy
IFRS 13 requires disclosure of fair value measurements by level of the following fair value hierarchy:
Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can readily observe;
Level 2 - inputs are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly; and
Level 3 - inputs that are not based on observable market data (unobservable inputs).
Unlisted Investments are therefore classified at level 2 of the fair value hierarchy when initially recognised.
Loans and other receivables
Loans and other receivables are recognised initially at fair value and subsequently measured at amortised costs using the effective interest rate method, as reduced by appropriate provisions for estimated irrecoverable amounts less provision for impairment. A provision for impairment is accounted for when management deems the specific receivable balance not to be collectable. The amount of the impairment loss is recognised in the statement of comprehensive income.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term deposits and liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on the expected yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expect life of the expected financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that creates a residual interest in the assets of the Company.
Trade payables
Trade payables are stated at their amortised cost less any discount or rebate received.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Share premium
Representing the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.
Capital redemption reserve
Where a company acquires its own shares out of free reserves, then a sum equivalent to the nominal value is transferred to a capital redemption reserve.
Share based payments reserve
Represents the value of equity benefits provided to employees and directors as part of their remuneration and provided to consultants and advisors hired by the Company from time to time as part of the consideration paid.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the critical accounting judgements, apart from those involving estimations (which are dealt with separately below), that the Directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
(a) Critical judgements in applying the Company's accounting policy
In assessing whether there have been any indicators of impairment of assets, the Directors have considered both external and internal sources of information such as market conditions.
(b) Key sources of estimation uncertainty
As the Company is an investing company, the key source of estimation uncertainty is the impairment review of unlisted investments. The Company 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.
A further key source of estimation uncertainty is the calculation of share based payments. The Company uses the Black-Scholes option-pricing model where applicable, with inputs, in particular volatility, requiring significant judgement in application.
3. Segment analysis
The segmental analysis relates to the operations of the Company, as these are individual financial statements of the Company. The Company has one reportable operating segment on the basis that it incurs expenses from one business activity; being investing, and on the basis that it currently operates in one geographical location; being Europe. During the current year, the Company did not generate any revenue from its investment activities.
4. Loss on ordinary activities before taxation
2017 2016
The loss on ordinary activities before taxation Note GBP'000 GBP'000
has been arrived at after charging/(crediting):
Auditor's remuneration - audit of Company 15 12
Auditor's remuneration - other taxation
advisory services 6 -
Impairment loss on available for sale investment 9 150 -
Provision for VAT non-claimable 11 101 -
Share based payments 13 599 -
Staff costs - Directors 5 121 55
Foreign exchange gain on disposal of available
for sale investment (6) -
5. Staff costs
Staff employment costs were: 2017 2016
GBP'000 GBP'000
Wages and salaries 111 50
Social security costs 10 5
Other pension costs - -
121 55
During the year there were no employees (2016: nil) employed by the Company excluding four Directors in administration roles. The staff costs during the year include the accrual of director fees in the amount of GBP6,000 (2016: GBP16,000) which were not paid during the reporting period.
6. Directors' remuneration
The emoluments paid to Directors during the year was as follows:
Salary & fees Share based Pension 2017 2016
payments contribution Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Executive Directors
Jeremy Edelman 24 - - 24 24
Anthony Samaha 27 63 - 90 26
Sachin Oza 30 248 - 278 -
Stephen Williams 30 248 - 278 -
111 559 - 670 50
An accrual of GBP6,000 for director fees which were unpaid during the reporting period has been made.
The directors are the key management personnel of the Company.
As at 31 December 2017, no Director was accruing benefits under a money purchase scheme (2016: none). The total options held by directors as at 31 December 2017 was 190,000,000. Sachin Oza and Stephen Williams each held 90,000,000 options which are exercisable at 0.5p, 0.75p and 1.0p up until 19 October 2021. Anthony Samaha held 10,000,000 options exercisable at 0.5p up until 19 October 2021.
7. Taxation on loss on ordinary activities
Factors affecting tax charge for the year:
The tax assessed for the year is higher than the standard rate of corporation tax in the UK 20.0% from 1 January 2017 to 1 April 2017 and 19.0% from 1 April 2017 (2016: 20%).
2017 2016
GBP'000 GBP'000
Loss on ordinary activities before tax (1,152) (115)
Loss on ordinary activities multiplied by standard rate
of corporation tax in the UK (221) (23)
Effects of:
Unrelieved tax losses 221 23
Total tax for the year - -
No deferred tax assets have been recognised in the year (2016: nil).
The corporation tax rate was 20.0% from 1 April 2014 to 1 April 2017 and 19.0% from 1 April 2017. Thus the corporation tax rate for the year ended 31 December 2017 is 19.25%.
The Company has unused tax losses of GBP2.2 million and capital losses of GBP2.5 million. The deferred tax asset for these losses, amounting to GBP914,000 (2016: GBP835,000) has not been recognised as the timing of profits is uncertain.
8. Loss per share
The calculations of the basic and diluted earnings 2017 2016
per share are based on the following data:
GBP'000 GBP'000
Loss for the year (1,152) (115)
Loss for the purpose of basic earnings per share (1,152) (115)
Number Number
Number of shares
Weighted average number of ordinary shares in issue
during the year 655,361,644 320,148,773
Effect of dilutive options 190,000,000 -
Diluted weighted average number of ordinary shares
in issue during the year 845,361,644 320,148,773
Loss per share
Basic loss per share (pence) (0.18) (0.04)
Diluted loss per share (pence) (0.14) (0.04)
9. Investments available for sale
2017 2016
GBP'000 GBP'000
At 1 January 200 200
Addition at cost - Tonsley 295 -
Divestment - Tonsley (295)
Addition at cost - Corallian 500
Impairment - Mogul (150) -
------- -------
At 31 December 550 200
------- -------
On 19 April 2017, the Company announced that it had entered into an agreement to acquire an initial interest of approx. 2.0% in Tonsley for a consideration of AUD$0.5 million (approx. GBP0.3 million). Tonsley owns rights to earn up to 75% of the San Jose lithium project in Spain. Tonsley has the right to earn a 75% interest in the Project by spending EUR1.5 million for a first stage 50%, then EUR2.5 million for the additional 25%. After an agreed amount of time between the Parties or in the event no interest is earned by Tonsley (or its subsidiary) in the Project, there was an agreed contractual mechanism (by way of options) for the AUD$0.5 million funds to be returned to the Company. On 17 July 2017, the Company announced that it had delivered to Plymouth a Notice of Exercise of Put Option in respect of Reabold's interest in Tonsley, whereby Reabold wouldtransfer back to Plymouth its shares in Tonsley in consideration of receipt of AUD$0.5 million (approx. GBP0.3 million), payable on 18 July 2017. Whilst the Tonsley investment represented an interesting opportunity for Reabold, it was decided that this would not form a long term asset for Reabold and therefore that Reabold should exercise its put option and redeploy the money on other investments.
On 1 November 2017, the Company announced that it had entered into two share subscription agreements with Corallian to subscribe for 1,111,111 ordinary shares in the issued share capital of Corallian representing 35.4% of the issued share capital of Corallian for an aggregate subscription price of GBP1.5 million as follows:
i) Reabold has entered into an unconditional share subscription agreement to subscribe for 370,370 ordinary shares in the issued share capital of Corallian ("Tranche A Shares") for an aggregate subscription amount of GBP0.5 million which amount is payable immediately against transfer to Reabold of the Tranche A Shares. The Tranche A Shares represent 15.4% of the issued share capital of Corallian.
ii) Reabold has entered into a conditional share subscription agreement to subscribe for 740,741 ordinary shares in the issued share capital of Corallian ("Tranche B Shares") for an aggregate subscription amount of GBP1.0 million, representing 23.6% of the enlarged issued share capital of Corallian and which subscription is conditional upon the joint venture partners in licence P1918 in respect of the Colter appraisal project approving an authorisation for expenditure for the drilling of the Colter well prior to 30 April 2018 failing which Reabold's obligation to subscribe for the Tranche B Shares terminates. On issue of the Tranche B Shares to Reabold, and for so long as Reabold holds more than 30% of the issued share capital of Corallian, Reabold has the right to appoint a director to the board of directors of Corallian.
As outlined in the Chairman's Statement, the Directors have impaired the Company's investment in Mogul by GBP150,000 from a carrying value of GBP200,000 to GBP50,000, in view of Mogul's difficulties in attracting material financing to progress its tin project in Mongolia, despite the positive tin price trend. It is noted that, in the opinion of the Directors, the fair value of the Company's investment in Mogul is challenging to reliably measure given the relatively early stage of development of the entity, and the limited availability of financial and technical information. Accordingly the available for sale investments in Mogul has been measured at cost (less impairment) rather than fair value because the fair value cannot be measured reliably.
The Company has assessed the fair value of its investment in Corallian as at 31 December 2017 as GBP1.35 per share, applying the subscription price of the Corallian equity raising announced in November 2017. It is noted that in February 2018, the Company announced that it was participating in a further fund raising by Corallian at a subscription price of GBP1.50 per share, following positive progress by Corallian in 2019.
10. Trade and other receivables
2017 2016
GBP'000 GBP'000
VAT receivable 30 1
30 1
The receivable is in respect of VAT receivable for the December quarter. All receivables are due within one year. As outlined in Note 11, the Company has made a provision for the recoverability of the VAT receivable for the December 2017 quarter in the amount of GBP29,957.
11. Provisions
2017 2016
GBP'000 GBP'000
At 1 January - -
Provisions - charge for the year 101 -
At 31 December 101 -
The Company has been advised by HRMC that following a review of its activities, HMRC has assessed the Company's investment activities is not a supply for consideration and as a result the Company cannot claim any Input Tax related to its investment activities. HMRC had assessed that all expenses claimed since registration in December 2012 are related to investment activities and that it would be disallowing claimed Input Tax in the amount of GBP71,129 up to September 2017. The Company has made a further provision for VAT receivable for the December 2017 quarter in the amount of 29,957. The Company is in discussions with HMRC, in consultation with its taxation advisors, towards HMRC reversing this assessment and is awaiting a further response from HMRC.
12. Share capital
Number Nominal Total
of Value Value
ordinary GBP GBP'000
shares
Issued at 31 December 2015 280,915,896 GBP0.001 281
On 8 January 2016, placing for cash at 0.5p
per share 40,000,000 GBP0.001 40
-------------- --------- ---------
Issued at 31 December 2016 320,915,896 GBP0.001 321
On 18 April 2017, placing for cash at 0.5p
per share 73,500,000 GBP0.001 73
On 25 September 2017, placing for cash at
0.5p per share 792,000,000 GBP0.001 792
On 25 September 2017, debt for shares at
0.5p per share 2,000,000 GBP0.001 2
On 13 October 2017, placing for cash at
0.5p per share 352,000,000 GBP0.001 352
-------------- --------- ---------
Issued at 31 December 2017 1,540,415,896 GBP0.001 1,540
-------------- --------- ---------
"A" Deferred shares
The Company has in existence at 31 December 2016 and at 31 December 2017, 6,915,896 "A" deferred shares of 1.65p. These deferred shares do not carry voting rights.
Total ordinary and "A" Deferred shares
The issued share capital as at 31 December 2017 is as follows:
Number Nominal Total
of Value Value
ordinary GBP GBP'000
shares
Ordinary shares 1,540,415,896 GBP0.0010 1,540
"A" Deferred shares 6,915,896 GBP0.0165 114
---------
Issued at 31 December 2017 1,654
---------
The holders of ordinary shares are entitled to one vote per share at the meetings of the Company and to dividends as declared in proportion to the amounts paid up on the ordinary shares. No shares are of the Company are currently redeemable or liable to be redeemable at the option of the holder or the Company.
The holders of "A" Deferred shares do not have any right to receive written notice of or attend, speak or vote at any general meeting of the Company, or to any dividend declared by the Company. They may however be redeemed by the Company at any time at its option for one penny for all the "A" Deferred shares without obtaining sanction of such holders.
12. Share capital (continued)
Share Options
During the year 190 million options were granted (2016: nil).
Exercise Grant Date Vesting Date Expiry Date Options in
Price Issue
31 December
2017
19 October 19 October 19 October
0.50p 2017 2017 2021 70,000,000
19 October 19 October 19 October
0.75p 2017 2018 2021 60,000,000
19 October 19 April 19 October
1.00p 2017 2019 2021 60,000,000
-------------
190,000,000
-------------
At 31(st) December 2017 there were 190 million share options outstanding (2016: nil).
13. Share based payments
Details of share options and warrants granted during the year to Directors over the ordinary shares are as follows:
Lapsed
At 1 Issued / Exercised At 31
January during during December Exercise
2017 the year the year 2017 Price Vesting Expiry
Option Holder No. No. No. No. Pence Date Date
Sachin Oza - 30,000,000 - 30,000,000 0.50p 19/10/2017 19/10/2021
Sachin Oza - 30,000,000 - 30,000,000 0.75p 19/10/2018 19/10/2021
Sachin Oza - 30,000,000 - 30,000,000 1.00p 19/04/2019 19/10/2021
Stephen Williams - 30,000,000 - 30,000,000 0.50p 19/10/2017 19/10/2021
Stephen Williams - 30,000,000 - 30,000,000 0.75p 19/10/2018 19/10/2021
Stephen Williams - 30,000,000 - 30,000,000 1.00p 19/04/2019 19/10/2021
Anthony Samaha - 10,000,000 - 10,000,000 0.50p 19/10/2017 19/10/2021
---------- ------------ ------------- ------------
- 190,000,000 - 190,000,000
----------------------------- ------------ ------------- ------------
The number and weighted average exercise prices of share options are as follows:
2017 2016
Weighted Weighted
average average
exercise Number exercise Number
price of options price of options
Outstanding at 1 - - - -
January
Granted during the
year 0.74 190,000,000 - -
Forfeited during - - - -
the year
Exercised during - - - -
the year
Outstanding at 31
December 0.74 190,000,000 - -
Exercisable at 31
December 0.74 70,000,000 - -
---------- ------------ ---------- ------------
The options outstanding at 31 December 2017 have a weighted average contractual life of 3.80 years (2016: Nil).
The closing share price range during the year ended 31 December 2017 was 0.32p to 0.98p.
The options issued during the year were all granted on 19 October 2017 and vest in tranches upon grant, 12 months from grant and 18 months from grant. Should the option holder leave the Board prior to the vesting of their options, such options will be forfeited.
For the options granted, IFRS 2 "Share-Based Payment" is applicable, and the fair values were calculated using the Black-Scholes model. The inputs into the model were as follows:
Risk free Share price Expected Share price
rate volatility life at date
of grant
Granted 19 October
2017 0.72% 120% 4 years 0.77p
Expected volatility was determined by calculating the historical volatility of the Company's share price.
The Company recognised total expenses relating to equity-settled share-based payment transactions during the year of GBP559,000 (2016: nil).
14. Trade and other payables
2017 2016
GBP'000 GBP'000
Trade and other payables 65 4
Accruals 21 28
86 32
The Directors consider that the carrying amount of trade and other payables approximates to their fair value. All liabilities are due within one year.
15. Related party transactions
There were no loans from related party as at 31 December 2016 and 31 December 2017.
During the year ended 31 December 2017, the Company incurred fees to Santannos Limited, a company associated with Anthony Samaha, for provision of accounting services in the amount of GBP3,000 (2016: nil). As at 31 December 2017, an amount of GBP3,000 was included in accounts payable in respect of these fees.
The directors are the key management of the Company (refer to note 6).
16. Commitments
On 1 November 2017, the Company announced it had entered into a conditional share subscription agreement to subscribe for 740,741 ordinary shares in the issued share capital of Corallian ("Tranche B Shares") for an aggregate subscription amount of GBP1.0 million, with the subscription conditional upon the joint venture partners in licence P1918 in respect of the Colter appraisal project approving an authorisation for expenditure for the drilling of the Colter well prior to 30 April 2018 failing which Reabold's obligation to subscribe for the Tranche B Shares terminates. As at 30 April 2018, no such authorisation for expenditure for the drilling of the Colter well had been approved. Subsequently, on 25 May 2018, Reabold advised Corallian that it waived the condition for the Tranche B Shares and proceeded to complete the Tranche B subscription on 28 May 2018 in the amount of GBP1.0 million.
On 4 December 2017, the Company announced that it had signed an agreement with Danube, a newly incorporated subsidiary of ASX listed ADX Energy Ltd, to invest a total of GBP1.5 million for a 29% interest in Danube. The investment was conditional on completion of a transaction between Danube and ADX Energy Ltd, by 28 February 2018, which would result in Danube holding a 50% interest in the Parta licence in Romania, and a 100% interest in a low-risk appraisal campaign within Parta. The investment comprised an initial 375,940 new shares to be issued upon completion of the transaction at GBP1.00 per share This will be followed by a further 1,127,819 new shares to be issued upon submission of an Authorisation for Expenditure for the first appraisal well at GBP1.00 per share. On 19 February 2018, the Company agreed to extend the date for completion of the transaction to 31 March 2018, with completion taking place on 23 March 2018.
17. Financial risk management
The Company's operations expose it to a limited level of credit, foreign currency and liquidity risk. There is not any financial risk arising from the effects of changes in market prices of commodities based on its current activities.
The Company does not use derivative financial instruments to manage interest rate costs, and no hedge accounting is thus applied. Given the size of the Company, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board.
Credit risk
The Company's credit risk is primarily attributable to its trade receivables and cash balances. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.
Price risk
Price risk arises from uncertainty about the future prices of financial instruments held within the Company's portfolio. It represents the potential loss that the Company might suffer through holding market positions in the face of market movements. The investments in equity and fixed interest stocks of unlisted companies are not traded and as such the prices are more uncertain than those of more widely traded securities. The Board's strategy in managing the market price risk inherent in the Company's portfolio of equity investments is determined by the requirement to meet the Company's investment objective. The Directors manage these risks by regular reviews of the portfolio within the context of current market conditions. Unlisted investments are valued as per accounting policy in these financial statements.
Liquidity risk
The Company actively maintains a treasury system that maintains a net credit position and is designed to ensure the Company have sufficient available funds for operations and planned expansions.
Maturity of financial liabilities
The following table shows details the Company's remaining contractual maturity for its non-derivative financial liabilities. The maturity of the financial liabilities table has been drawn up based on the undisclosed cash flows based on the earliest date on which the Company can be required to pay.
2017 2016
GBP'000 GBP'000
Within one year 65 32
Interest rate risk
The Company's exposure to changes in interest rate risk relates primarily to interest-earning financial assets and interest-bearing financial liabilities. Interest rate risk is managed by the Company on an ongoing basis with the primary objective of limiting the extent to which net interest expense could be affected by an adverse movement in interest rates.
Foreign currency risk
The Company incurs foreign currency risk on investments that are denominated in currencies other than Sterling. At present, the Company does not have any formal policy for hedging against exchange exposure. The Company may, when necessary, enter into foreign currency forward contracts to hedge against exposure from foreign currencies fluctuations. As at both 31 December 2017 and 31 December 2016 the Company has an investment denominated in Canadian Dollar. Any movement in the Canadian Dollar against Sterling will create a fair value gain or loss. The Company has assessed the impact of changes in exchange rates as not being significant to the Company.
Capital risk management
The Directors consider the Company's capital to comprise of share capital and reserves stated on the statement of financial position. The Company manages its capital to ensure the Company will be able to continue on a going concern on a long term basis while ensuring the optimal return to shareholders and other stakeholders through an effective debt and equity balance. No changes were made in the objectives, policies and processes during the current or previous year.
The share capital, including share premium, and reserves totalling GBP5,732,000 (2016: GBP509,000) provides the majority of the working capital required by the Company. The Management reviews the capital structure and makes adjustment to it in the light of changes in economic conditions.
Other financial assets and liabilities
The notional amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents and trade and other payables) are assumed to approximate their fair value.
Categories of financial instruments
2017 2016
GBP'000 GBP'000
Financial assets:
Cash and cash equivalents 5,307 340
Receivables - 1
Available for sale investments 550 200
Total financial assets 541 541
Financial liabilities:
Other financial liabilities 65 32
Total financial liabilities 65 32
18. Post balance sheet events
On 1 March 2018, the Company announced it had signed two subscription agreements with Corallian. The first agreement was an unconditional subscription for GBP500,000 of new Corallian shares completed in February 2018 . The second agreement gave Reabold the option to subscribe for an additional GBP500,000 of new Corallian shares at any point up to 6 April 2018, which was completed prior to the expiry date.
On 19 March 2018, the Company announced the completion of a fund raising of 1,291,750,000 new ordinary shares at a price of 0.6 pence per share, raising GBP7.75 million (before expenses) to support the Company's investment policy.
On 14 March 2018, the Company announced the granting of 125,000,000 options of which 45,000,000 million have an exercise price of 0.60p and vest immediately, 40,000,000 have an exercise price of 0.90p and vest 12 months from grant; and 40,000,000 have a exercise price of 1.2p and vest 18 months from grant.
On 28 March 2018, the Company announced the completion of the first tranche of the investment in Danube, with Reabold receiving an in initial 375,940 new shares in Danube on payment of the consideration of GBP375,940.
On 30 May 2018, the Company announced the completion of the final tranche of its investment in Corallian for GBP1,000,000, as per the announcement on 1 November 2017. Including the GBP1,500,000 already invested as per the announcements on 1 March 2018 and 1 November 2017, Reabold has invested GBP2,500,000 in Corallian and owns 32.9% of Corallian's issued share capital.
On 14 June 2018, the Company announced the acquisition of 100% of the issued share capital of Gaelic for the issue of 420 million new ordinary shares, representing GBP3,045,000 at the closing price of 0.725p per share on AIM on 12 June 2018 ("Acquisition"). The Acquisition is subject to shareholder approvals at the General Meeting of the Company to be held on 29 June 2018. Gaelic has the right to earn-in to 50% of multiple near-term, high-impact oil and gas leases in California, United States by drilling up to five wells by the end of 2019. Further information in respect to the Acquisition is outlined in the Chairman's Statement.
19. Ultimate controlling party
In the opinion of the directors there is no controlling party.
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END
FR FPMBTMBBTTRP
(END) Dow Jones Newswires
June 29, 2018 02:01 ET (06:01 GMT)
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