Future Metals NL

Earnings Release • Sep 29, 2016

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RNS Number : 1264L

Red Emperor Resources NL

29 September 2016

29 September 2016

Red Emperor Resources NL ("Red Emperor")

Annual Report for the Year Ending 30 June 2016

Please see below extracts from the Company's annual report for the year ending 30 June 2016 (the "Annual Report"), being:

·      Extracts from the Directors' Report

·      Consolidated Statement of Comprehensive Income

·      Consolidated Statement of Financial Position

·      Consolidated Statement of Cash Flows

A copy of the entire Annual Report will be sent to shareholders and is available on the Company's website - www.redemperorresources.com

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

For further information please visit www.redemperorresources.com or contact:

Red Emperor

Greg Bandy +61 8 9212 0102

Grant Thornton UK LLP

Philip Secrett/Jen Clarke/Jamie Barklem +44 20 7383 5100

Directors Report

The Directors present their report for Red Emperor Resources NL ("Red Emperor", "Red Emperor" or "the Company") and its subsidiaries ("the Group") for the year ended 30 June 2016.

DIRECTORS

The names of the Company's Directors in office during the year and until the date of the Annual Report are as follows.   Mr. Greg Bandy (Managing Director)

Mr. Jason Bontempo (Non-Executive Director)

Mr. Nathan Rayner (Non-Executive Director)

INTERESTS IN THE SECURITIES OF THE COMPANY

As at the date of the Annual Report, the interests of the Directors in the securities of Red Emperor Resources NL are:

Director	Ordinary Shares	Options - exercisable at $0.055 each on or before 31-Dec-17
Greg Bandy	1,000,000	-
Jason Bontempo	-	-
Nathan Rayner	-	3,500,000

RESULTS OF OPERATIONS

The Company's net loss after taxation attributable to the members of Red Emperor for the year to 30 June 2016 was $9,034,572 (2015: $19,723,800).

DIVIDENDS

No dividend was paid or declared by the Company during the year and up to the date of the Annual Report.

CORPORATE STRUCTURE

Red Emperor Resources NL is a company limited by shares, which is incorporated and domiciled in Australia. 

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activity of the Company during the financial year was oil and gas exploration.

REVIEW OF OPERATIONS

Philippines (SC 55)

Red Emperor announced in August 2015 that the Hawkeye-1 exploration well was drilled to the planned total depth of 2,920m with the top reservoir intersected at 2,710m. The well proved the existence of hydrocarbons in SC55, however the hydrocarbon size discovered was at the low end of expectations and not likely to be economic to develop. Hawkeye-1 was plugged and abandoned. The drilling program was executed smoothly, ahead of schedule and significantly under budget with Red Emperor having paid a total of approximately AU$4.8m for its 15% equity proportion.

The Company announced during the year that the Joint Venture (JV) had formally received approval from the Philippines Department of Energy for a two-year moratorium, until 23 December 2017, on required work activity under Service Contract 55. During the moratorium period, the consortium will conduct specialised geophysical studies in the area surrounding the Hawkeye Prospect, which encountered gas shows when it was drilled last year. Although the Hawkeye well did not encounter gas in commercial quantities, it proved the presence of an active petroleum system in the contract area that hosts the "Cinco Prospect" as well as several other leads.

As announced previously, Otto Energy Limited (ASX: OEL) has advised the JV of its intention to exit the Block SC 55 as part of its strategy to focus on its North American assets. Red Emperor intends to have its full, proportionate interest be assigned and as a result its working interest will increase from 15% to 37.5%.

Georgia

Red Emperor, a 20% shareholder of Strait Oil and Gas Limited (Strait), was advised that the Georgian Government had confirmed the validity of the Production Sharing Contract (PSC) across Block VIa and the ability for Strait to access existing gas pipeline infrastructure, free of taxes. This important confirmation paves the way for ongoing sales negotiations with a potential purchaser of the PSC to continue. Red Emperor is not involved in these negotiations and can provide no certainty as to the likelihood of a successful outcome. Due diligence by both parties remains ongoing.

Corporate

In July 2015, the Company, through its London broker, Brandon Hill Capital, and its Australian broker, 708 Capital, placed 65,750,000 new ordinary shares at 4 pence (A$0.08) per share to raise £2.63 million (A$5.26 million) before expenses. Proceeds from the capital raising and existing cash resources were used to fund the drilling activities in the Philippines.

The Company also issued 4,320,000 unlisted options, exercisable at $0.08 each on or before 2 July 2018 as part consideration to advisors of the Company for capital raising fees associated with the July 2015 Share Placement.

Red Emperor reviewed a number of new opportunities with both its Australian and UK advisers respectively during the year. Whilst none of the projects reviewed resulted in a transaction, the Board remains committed to finding suitable new asset(s) to compliment the Company's current portfolio while oil & gas prices remain subdued.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There have been no significant changes in the state of affairs of the Group during the financial year, other than as set out in the annual report.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

There have been no other significant events subsequent to the end of the financial year to the date of the annual report.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Group will continue its investment in resource projects with the object of identifying commercial resources. The Company intends to pursue acquisition and investment opportunities to secure new projects in the natural resources sector.

Greg Bandy

Managing Director

Perth, Western Australia

29 September 2016

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the year ended 30 June 2016

	Note	30 June 2016 $	30 June 2015 $
Continuing Operations
Interest received	3	239,406	338,059
Employee and director benefits expense		(265,950)	(274,858)
Professional and Consultants		(570,771)	(301,157)
ASX and AIM and share registry fees		(83,731)	(113,661)
Travel expenditure		(72,799)	(119,284)
Impairment expense		(7,711,110)	(19,355,434)
Gain on derivative liability	12	-	783
Realised gain on investment	8	-	320,000
Realised Foreign exchange gain		28,341	-
Unrealised Foreign exchange (loss)/gain		(423,331)	14,632
Share based payment expense	21(a)	(30,934)	(57,519)
Other expenses		(143,693)	(175,361)
Loss before income tax		(9,034,572)	(19,723,800)
Income tax expense	4	-	-
Net loss for the year		(9,034,572)	(19,723,800)
Other comprehensive loss
Items that may be reclassified to profit or loss
Other comprehensive loss		13,938	(356)
Other comprehensive income for the year net of tax		13,938	(356)
Total comprehensive loss for the year		(9,020,634)	(19,724,156)
Loss per share
Basic loss per share (cents)	19	(2.13)	(6.77)
Diluted loss per share (cents)	19	N/A	N/A
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Consolidated Statement of Financial Position as at 30 June 2016

	Note	2016 $	2015 $
Current Assets
Cash and cash equivalents	5	11,715,540	12,494,427
Trade and other receivables	6	33,415	618,316
Assets held for sale	7	-	3,000,000
Total Current Assets		11,748,955	16,112,743
Non-Current Assets
Financial assets at fair value through profit and loss	8	400	400
Investment accounted for using the equity method	9	-	-
Exploration and evaluation expenditure	10	-	-
Total Non-Current Assets		400	400
Total Assets		11,749,355	16,113,143
Current Liabilities
Trade and other payables	11	69,946	819,254
Derivative financial liability	12	-	-
Total Current Liabilities		69,946	819,254
Total Liabilities		69,946	819,254
Net Assets		11,679,409	15,293,889
Equity
Issued capital	13	57,329,505	52,167,148
Reserves	14	4,096,879	3,839,144
Accumulated losses	15	(49,746,975)	(40,712,403)
Total Equity		11,679,409	15,293,889
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Consolidated Statement of Changes in Equity for the year ended 30 June 2016

	Issued capital $	Accumulated losses $	Foreign exchange translation reserve $	Share based payments reserve $	Total $
Balance at 1 July 2014	49,646,733	(20,988,603)	(28,405)	3,831,386	32,461,111
Total comprehensive loss for the year
Loss for the year	-	(19,723,800)	-	-	(19,723,800)
Other Comprehensive Loss	-	-	(356)	-	(356)
Total comprehensive loss for the year	-	(19,723,800)	(356)	-	(19,724,156)
Transactions with owners in their capacity as owners
Issue of shares	3,475,965	-	-	-	3,475,965
Share based payments	21,000	-	-	36,519	57,519
Cost of issue	(976,550)	-	-	-	(976,550)
Balance at 30 June 2015	52,167,148	(40,712,403)	(28,761)	3,867,905	15,293,889

Balance at 1 July 2015	52,167,148	(40,712,403)	(28,761)	3,867,905	15,293,889
Total comprehensive loss for the year
Loss for the year	-	(9,034,572)	-	-	(9,034,572)
Other Comprehensive Loss	-	-	13,938	-	13,938
Total comprehensive loss for the year	-	(9,034,572)	13,938	-	(9,020,634)
Transactions with owners in their capacity as owners
Issue of shares	5,763,718	-	-	-	5,763,718
Share based payments	-	-	-	30,934	30,934
Cost of issue	(601,361)	-	-	212,863	(388,498)
Balance at 30 June 2016	57,329,505	(49,746,975)	(14,823)	4,111,702	11,679,409

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows for the year ended 30 June 2016

	Note	2016                            $	2015                            $
Cash flows from operating activities
Payments to suppliers and employees		(1,113,641)	(1,020,479)
Interest received		239,406	338,059
Finance cost		28,341	(1,705)
Net cash used in operating activities	5	(845,894)	(684,125)
Cash flows from investing activities
Payments for purchase of equities		-	(182,299)
Payments for exploration and evaluation		(5,119,286)	(365,705)
Refund of Hawkeye-1 well costs		397,822	-
Proceeds from sale of equities		-	798,279
Payments for investment in associate		-	(59,140)
Net cash (used in) / provided by investing activities		(4,721,464)	191,135
Cash flows from financing activities
Proceeds from issue of shares and options		5,600,300	2,802,618
Payment of share issue costs		(388,498)	(136,550)
Net cash provided by financing activities		5,211,802	2,666,068
Net (decrease) / increase in cash and cash equivalents		(355,556)	2,173,078
Cash and cash equivalents at beginning of year		12,494,427	10,321,349
Effects of exchange rate changes on cash and cash equivalents		(423,331)	-
Cash and cash equivalents at the end of the year	5	11,715,540	12,494,427
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

This information is provided by RNS

The company news service from the London Stock Exchange

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