BEZANT RESOURCES PLC

Earnings Release • Nov 13, 2013

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RNS Number : 8133S

Bezant Resources PLC

13 November 2013

13 November 2013

Bezant Resources Plc

("Bezant" or the "Company")

Final Results for the Year Ended 30 June 2013

Bezant (AIM: BZT), the AIM listed copper-gold exploration and development company operating in the Philippines and Argentina, announces its audited final results for the year ended 30 June 2013.

Highlights:

Corporate:

·     8 pence per share (approximately £5.2m) returned to shareholders (excluding Gold Fields Netherlands Services BV ("Gold Fields")).

·     £3.8m cash held at the period end.

·     £1.4m loss after tax (2012: loss of £1.8m).

·     US$2.5m additional non-refundable payment made by Gold Fields in connection with the extension of its Option over the Group's entire interest in its flagship Mankayan Project.

·     US$7.5m equity subscription by Gold Fields (at a price of 25.97 pence per ordinary share).

·     Appointment of Mr Laurence Read as a Non-Executive Director of the Company.

Mankayan Copper-Gold Project, Philippines:

·     Extension of the Option granted to Gold Fields following shareholder approval.

·     Option extended until 31 January 2014 - US$60.5m revised consideration on exercise.

·     Regular dialogue maintained with Gold Fields - awaiting decision with respect to the potential exercise of its Option.

Eureka Copper-Gold Project, Argentina:

·     Environmental Impact Assessment ("EIA") approved by the requisite provincial authorities.

·     Copper-gold mineralised strata and lenses identified from exploratory fieldwork completed to date.

Post Period End:

·     Results of Phase One trenching and sampling programme at Eureka - assays returned for 68 samples from 17 trenches indicated an average 1.68 per cent. copper content.

Bernard Olivier, Chief Executive Officer of Bezant, commented:

"As ever, Bezant has focused on delivering value from cost effective fieldwork operations. The Company has ensured that it remains well funded whilst returning approximately £5.2m (8 pence per share) to shareholders, other than Gold Fields, following the additional US$2.5m non-refundable payment from Gold Fields in connection with the Option extension and its US$7.5m equity subscription.

Our Eureka project in Argentina has successfully progressed through key EIA approvals from the requisite provincial authorities and the fieldwork results we are achieving from surface trenching are highly encouraging.

Post the reporting period end we were deeply saddened by the death of Gerry Nealon, our longstanding Chairman, who was a key part of the Bezant story over the last six years and our sincere condolences once again go to Gerry's family. We look forward to building on Gerry's work and reporting further progress in the year ahead."

For further information, please contact:

Bernard Olivier Chief Executive Officer, Bezant Resources Plc                                Laurence Read Non-Executive Director, Bezant Resources Plc James Harris / Matthew Chandler / James Dance Strand Hanson Limited                                                           James Maxwell / Jenny Wyllie N+1 Singer                                                or visit http://www.bezantresources.com

Tel: +61 40 894 8182 Tel: +44 (0)20 3289 9923 Tel: +44 (0)20 7409 3494 Tel: +44 (0)20 7496 3000

Chairman's Statement

I am pleased to report upon the further progress made by the Company during the financial year ended 30 June 2013 and on our subsequent on-going activities to the date of this statement.

An extension to the option over our Mankayan project in the Philippines (the "Option") was approved by shareholders following negotiation and agreement with Gold Fields Netherlands Services BV ("Gold Fields") for it to make a further tranche payment to Bezant. Under the terms of the Option extension Gold Fields made a further non-refundable cash payment of US$2.5m and subscribed for US$7.5m of new equity in Bezant.

With these additional funds secured the Board of Bezant, following consultation with major shareholders, deemed that there was sufficient working capital within the business to be able to make a capital return to shareholders. Accordingly, Bezant undertook a UK High Court approved capital reduction process to enable it to return approximately £5.2m (8 pence per share) to shareholders.  As part of the Option extension agreement, Gold Fields were excluded from this return, and further to the subscription are currently interested in approximately 21.6 per cent. of the Company's issued share capital.

For the financial year ended 30 June 2013, the Group made a loss after tax of £1.4m (2012: loss of £1.8m). This loss reflects all of the Group's expenditure including corporate costs and the cost of its ongoing activities in Argentina and the Philippines. It is important to note that the year's results do not reflect the approximate £1.6m (US$2.5m) additional non-refundable option payment received from Gold Fields. The appropriate accounting treatment is to capitalise this amount as a deposit/deferred income on the balance sheet until such time as the Option is exercised or lapses when it will then be recognised in the income statement.

The Option secured by Gold Fields is exclusive until 31 January 2014. Bezant maintains regular dialogue with Gold Fields' representatives in relation to operations at the Mankayan project and their adjacent Lepanto property where Gold Fields has to date acquired a 40 per cent. ownership interest.  The Company will make an appropriate announcement, without delay, following receipt of a formal decision from Gold Fields in respect of its Option.

In the event that the Option over the Mankayan project is exercised, it remains the Board's intention to distribute a significant proportion of the sale proceeds to shareholders.

During the period, the Company received the requisite approval for the Environmental Impact Assessment ("EIA") component of its Eureka copper-gold project in Argentina. The work undertaken at Eureka to date has significantly developed our understanding of the geological model with trenching work yielding significant results from the near surface mineralisation and confirming the potential for Eureka to host an economically significant copper-gold resource.

Our ability to unlock the potential of a project like Eureka with limited capital expenditure is important, as Bezant continues to pursue a cost effective exploration and development strategy. 

I am saddened to report that, Gerry Nealon, our longstanding Chairman, passed away on 27 September 2013.  He is missed by all of us at Bezant and, on behalf of the Company, I would like to once again express our sincere condolences to Gerry's family. Consequently, I assumed the role of Non-Executive Chairman on an interim basis with effect from 30 September 2013 and have now accepted the appointment on a permanent basis.

The period reported on has been an extremely difficult time for companies, both large and small, operating in the mining sector. At Bezant we have focused on efficient capital outlay and carefully considering the best means to achieve value for shareholders from both our corporate and operational decisions.

Bezant has successfully returned cash to its shareholders and remains well capitalised to continue to secure value from its copper-gold assets in the current markets.

Dr Evan Kirby

Non-Executive Chairman

12 November 2013

Review of Operations and Activities

Corporate Activities

In October 2011 the Company entered into an option agreement with Gold Fields for the potential disposal of Asean Copper Investments Limited ("Asean") which holds the Group's entire interest in its flagship Mankayan copper-gold project in the Philippines. As previously announced, pursuant to the terms of an option agreement (the "Option Agreement") Gold Fields paid a non-refundable upfront cash payment of US$7 million, with a further cash sum of US$63 million becoming payable should the Option be exercised prior to its scheduled expiry date on 31 January 2013.  

On 10 December 2012 the Company announced the proposed extension of the Option for the disposal of Asean and a proposed equity participation in Bezant by Gold Fields. The Company also outlined its plans for an initial return of capital to shareholders whereby a minimum of US$7.5m would be distributed to shareholders.

On 10 January 2013 the Company received shareholder approval for the proposed Option extension agreement and equity participation by Gold Fields. Under the terms of the Option extension and subscription agreements:

·     A further US$2.5m non-refundable upfront payment was made to Bezant

·     Gold Fields subscribed for US$7.5m of equity in Bezant at a price of 25.97 pence per ordinary share

·     The Option was extended until 31 January 2014 with revised consideration of US$60.5m to be paid on future exercise of the Option

On 7 May 2013 shareholders duly approved the proposed capital return of approximately £5.2m (8 pence per share) to shareholders, other than Gold Fields, as well as the cancellation of part of the Company's share premium account and all of the Company's deferred shares.

On 22 May 2013 the Company received the requisite approval for the return of capital from the High Court and on or around 30 May 2013, 8 pence per share was returned to shareholders.

On 15 October 2012, the Company was also pleased to announce the appointment of Mr. Laurence Read as a Non-executive Director of the Company. Mr. Read has considerable experience advising natural resources companies and brings invaluable knowledge and expertise to assist with the Group's future growth.

Mankayan Project, Philippines:

The Mineral and Production Sharing Agreement covers a total of 534 hectares in the Guinaoang area of the Philippines (the "Mankayan Project"). The Mankayan Project is located in the Mankayan-Lepanto mining district, an area of porphyry copper belts in the Philippines, and is similar to several other deposits that have already been developed by third parties, such as the St Thomas deposit near Baguio City. The project site is situated adjacent to the copper/gold mine owned and run by Lepanto Consolidated Mining Company.

The Mankayan Project is currently the subject of an Option granted to Gold Fields with an extended expiry date of 31 January 2014. To date, the Company has not received any formal notice from Gold Fields in respect of its intentions with regards to potentially exercising the Option prior to its scheduled expiry. The Company continues to maintain regular dialogue with Gold Fields' representatives and will make an appropriate announcement, without delay, following receipt of a formal decision from Gold Fields.

Eureka Project, Argentina:

The project comprises a package of 11 highly prospective copper and gold licences. The 11 licences are located north-west of Jujuy near to the Argentine border with Bolivia and cover, in aggregate, an area in excess of approximately 5,500 hectares, accessible via a series of gravel roads. Historic exploration activities have been conducted on the project area since the 1980s by Minera Penoles, Codelco and Mantos Blancos, with unaudited unclassified estimates in the order of, in aggregate, up to approximately 62 million tonnes grading at 1% copper and approximately 52,000 ounces of gold as credits. The copper oxide mineralisation occurs in loosely consolidated conglomerates and is the focus of the project's economic potential.  Bezant is seeking to build up an understanding of the geological model to assess the economic viability of delineating a JORC standard resource at Eureka.

As announced on 8 October 2012, over 2,800 metres of verticalelectrical sounding, using a Schlumberger array, was carried out by ITAGH Consulting Group at known outcrops of mineralisation and also alongside new exploration trenches across the Eureka I Mine tenement area. The geophysical interpretations were:

·     Increase in the thickness of mineralised copper layers from the south (around 35 metres) to the north (>60 metres) - Eureka North Area;

·     Identification of mineralised paleochannels (ancient inactive and buried channels) trending SSE/NNW; and

·     Mineralised lenses appear to increase in thickness along a SSE/NNW direction. The direction appears to be related to a regional reverse fault with the same orientation.

The survey indicated an increase in the thickness of copper mineralisation in the project area thereby facilitating the development of a further exploration methodology for future exploration programmes.

Despite initial delays, on 30 May 2013, the Company announced that it had received approval of its comprehensive Environmental Impact Assessment ("EIA"), submitted in April 2012, from the relevant provincial authorities. The approved EIA includes 10 of the 11 licences, covering approximately 3,400 hectares of the total 5,500 hectare Eureka Project area. The approved area covers the entire historically known mining area plus all of the prospective exploration areas identified by the Company. As part of the EIA, Bezant undertook a range of geophysical and geochemical tests in order to formulate a cost effective exploration programme. Rock samples collected, including from areas without clearly identifiable copper seams, returned copper values ranging from 27ppm to 4.48%. The average copper value for all the 18 surface rock samples equated to 1.7% Cu, eleven of which returned values in excess of 1% Cu namely, 1.1%, 1.2%, 1.8%, 2.1%, 2.3%, 2.35%, 2.8%, 3.5%, 4.0%, 4.2% and 4.5% Cu. The samples containing 1% or more copper were taken along a 1,000 metre strike extent of identifiable copper mineralisation outcropping on surface.

On 16 October 2013, post reporting period end, the Company announced the results of its Phase One trenching and sampling programme. Assay results were returned for 68 samples taken from 17 trenches. The results indicated an average 1.68 per cent. copper content for the samples assayed. The results also indicated that the near surface mineralisation is potentially amenable to heap leaching, while the carbonate content of the conglomerate is reported to be low, indicating potential for low acid consumption.

Mkurumu Project, Tanzania:

All exploration activities in Tanzania were discontinued in prior years and the original exploration costs were fully impaired in 2010. In March 2012 the Company announced that it had agreed with Ashanti Exploration (Tanzania) Limited the termination of certain pre-existing joint venture arrangements and negotiated a new agreement whereby it received a reduced free carried interest of 5 per cent. along with a Net Smelter Return Royalty of 2 per cent. and was no longer exposed to any further exploration expenditure on the project. On 3 June 2013, Bezant announced that it had received notification from AngloGold Ashanti Limited stating that further to a peer review of their various projects they had decided to terminate the Mafulira Project. Their detailed analysis concluded that the Mafulira Project, which, included the Mkurumu Project, was not economically viable. Accordingly, the new agreement was also terminated.

Dr. Bernard Olivier

Chief Executive Officer

12 November 2013

Group Statement of Comprehensive Income

For the year ended 30 June 2013

						2013	2012
		Notes				£'000	£'000
Continuing operations
Group revenue						-		-
Cost of sales						-		-
Gross profit/(loss)						-		-
Administrative expenses						(1,287)		(1,652)
Group operating loss						(1,287)		(1,652)
Interest receivable						7		9
Share of Associates' loss						(118)		(193)
Loss before taxation						(1,398)		(1,836)
Taxation						-		-
Loss for the year						(1,398)		(1,836)
Attributable to: Equity holders of the Company						(1,398)		(1,836)
Other comprehensive income:
Items that can be subsequently reclassified to the income statement
Foreign currency reserve movement						85		143
Total comprehensive expense for the year attributable to equity holders of the Company						(1,313)		(1,693)
Loss per share (pence)
Basic & Diluted		2				(1.90p)		(2.82p)

Consolidated Statement of Changes in Equity

For the year ended 30 June 2013

	Share Capital £'000	Share Premium £'000	Other Reserves £'000	Accumulated Losses £'000	Total Equity £'000
Balance at 1 July 2012	784	30,974	533	(19,266)	13,025
Current year loss	-	-	-	(1,398)	(1,398)
Foreign currency reserve	-	-	85	-	85
Total comprehensive expenses for the year	-	-	85	(1,398)	(1,313)
Share issues	36	4,625	-	-	4,661
Capital return	(654)	(4,546)	-	-	(5,200)
Balance at 30 June 2013	166	31,053	618	(20,664)	11,173

	Share Capital £'000	Share Premium £'000	Other Reserves £'000	Accumulated Losses £'000	Total Equity £'000
Balance at 1 July 2011	784	30,974	390	(17,430)	14,718
Current year loss	-	-	-	(1,836)	(1,836)
Foreign currency reserve	-	-	143	-	143
Total comprehensive expenses for the year	-	-	143	(1,836)	(1,693)
Balance at 30 June 2012	784	30,974	533	(19,266)	13,025

Consolidated Balance Sheet

As at 30 June 2013

			2013	2012
	Notes		£'000	£'000
ASSETS
Non-current assets
Plant and equipment			87	43
Investments			7,696	7,679
Deferred exploration and evaluation costs			4,796	4,784
Total non-current assets			12,579	12,506
Current assets
Trade and other receivables			77	25
Cash at bank and in hand			3,826	4,287
Total current assets			3,903	4,312
TOTAL ASSETS			16,482	16,818
LIABILITIES
Current liabilities
Trade and other payables			5,309	3,793
Total current liabilities			5,309	3,793
NET ASSETS			11,173	13,025
EQUITY
Share capital	3		166	784
Share premium account	3		31,053	30,974
Share based payment reserve	4		265	265
Other reserves	4		353	268
Accumulated losses	4		(20,664)	(19,266)
SHAREHOLDERS' EQUITY			11,173	13,025

Consolidated Cash Flow Statement

For the year ended 30 June 2013

			2013	2012
	Notes		£'000	£'000
Net cash outflow from operating activities	6		(1,528)	(1,653)
Cash flows from investing activities
Interest received			7	9
Other income			38	60
Payments for plant and equipment			(55)	(6)
Payments to fund exploration			(20)	(598)
Payments to acquire subsidiary			-	(1,344)
Loans to associates and subsidiaries			(39)	(353)
Deposit for grant of option			1,559	3,610
			1,490	1,378
Cash flows from financing activities
Cash proceeds from issue of shares			4,661	-
Capital return			(5,200)	-
			(539)	-
Increase/(Decrease) in cash			(577)	(275)
Cash and cash equivalents at beginning of year			4,287	4,418
Foreign exchange movement			116	144
Cash and cash equivalents at end of year			3,826	4,287

Notes to the financial information

For the year ended 30 June 2013

1.	Basis of preparation The audited financial information set out above, which incorporates the financial information of the Company and its subsidiary undertakings (the "Group"), has been prepared using the historical cost convention and in accordance with International Financial Reporting Standards ("IFRS") including IFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by the European Union ("EU") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.    The audited financial information contained in this announcement does not constitute the Company's full financial statements for the year ended 30 June 2013 or 2012, but is derived from those financial statements, approved by the board of directors. The auditors' report on the 2013 accounts was unqualified and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.  The full audited financial statements for the year ended 30 June 2013 will be delivered to the Registrar of Companies and filed at Companies House following the Company's forthcoming annual general meeting.
2.		Loss per share
		The basic and diluted loss per share have been calculated using the loss for the 12 months ended 30 June 2013 of £1,398,000 (2012: £1,836,000). The basic loss per share was calculated using a weighted average number of shares in issue of 73,401,145 (2012: 64,993,603). The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 76,773,849 (2012: 67,689,734). The diluted loss per share and the basic loss per share are recorded as the same amount, as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

3.	Share capital
	Number	Class	Nominal value	Year ended 30 June 2013	Year ended 30 June 2012
					(Restated)
				£'000	£'000
	Authorised
	5,000,000,000 (2012: 690,432,500)	Ordinary	0.2p	10,000	1,381
	Nil (2012: 7,959,196)	Deferred	4p	-	319
	Nil (2012: 339,581)	Deferred	99p	-	336
				10,000	2,036
	Allotted, called up and fully paid
	82,939,525 (2012: 64,993,603)	Ordinary	0.2p	166	129
	Nil (2012: 7,959,196)	Deferred	4p	-	319
	Nil (2012: 339,581)	Deferred	99p	-	336
				166	1,067
	The number of issued deferred shares of £0.99 each, nominal value, has previously been incorrectly stated in the accounts of the Company as being 625,389 at an accounted value of £619,000.  There have been errors concerning the number of issued deferred shares of £0.99 each, nominal value, in the filings made by the Company with the UK Registrar of Companies.  A prior period adjustment of £283,000 has been made to the deferred shares account, from £619,000 to £336,000, in order to correct this prior period error.  The share premium account was also incorrectly stated in previously published financial statements at a value of £30,691,000.  This error is a direct consequence of the number of deferred shares being incorrectly accounted for.  A prior period adjustment of £283,000 has been made to the Share Premium account, from £30,691,000 to £30,974,000, in order to correct this prior period error.  The Companies House filings have been amended to resolve this administrative issue. A special resolution was passed on 7 May 2013, cancelling and extinguishing all issued deferred shares and approving the distribution of 8 pence per share in respect of the capital reduction of each share held at the record date other than any of the 17,945,922 shares which were transferred by Gold Fields on or around 22 March 2013 to Vidacos Nominees Limited.
				Number of shares 2013	Number of shares 2012
	The movement in the ordinary share capital is summarised below:
	As at beginning of the year			64,993,603	64,993,603
	Allotment of shares			17,945,922	-
	As at end of the year			82,939,525	64,993,603
	The movement in the deferred share capital is summarised below:
	As at beginning of the year			8,298,777	8,298,777
	Deferred shares cancelled			(8,298,777)	-
	As at end of the year			-	8,298,777

		2013	2012
			(Restated)
		£'000	£'000
	The share premium arising as a result of the above share transactions were as follows:
	As at 1 July	30,974	30,974
	Allotment of shares	4,625	-
	Less: Capital return	(4,546)	-
	As at 30 June	31,053	30,974

4.	Statement of movement on reserves
			Share-based payment reserve	Foreign exchange reserve	Accumulated losses
			£'000	£'000	£'000
	At 1 July 2012		265	268	(19,266)
	Current year loss		-	-	(1,398)
	Currency translation differences on foreign operations		-	85	-
	At 30 June 2013		265	353	(20,664)

5.	Reconciliation of movements in shareholders' funds
		2013	2012
		£'000	£'000
	Loss for the year	(1,398)	(1,836)
	Shares issued less costs	4,661	-
	Capital return	(5,200)	-
	Currency translation differences on foreign currency operations	85	143
	Opening shareholders' funds	13,025	14,718
	Closing shareholders' funds	11,173	13,025

6.	Reconciliation of operating loss to net cash outflow from operating activities
		2013	2012
		£'000	£'000
	Operating loss	(1,287)	(1,652)
	Depreciation and amortisation	13	8
	VAT refunds received	(38)	(60)
	Foreign exchange gain	(121)	(56)
	Subsidiary loss prior period	-	(2)
	(Increase)/decrease in debtors	(52)	(9)
	(Decrease)/increase in creditors	(43)	118
	Net cash outflow from operating activities	(1,528)	(1,653)

7.	Availability of Annual Report and Financial Statements
	Copies of the Company's full Annual Report and Financial Statements were posted yesterday to those shareholders who have elected to receive hardcopy shareholder communications from the Company and will also be made available to download from the Company's website at www.bezantresources.com. The Annual Report and Financial Statements will also be made available for inspection at the Company's registered office during normal business hours on any weekday. Bezant Resources Plc is registered in England and Wales with registered number 02918391. The registered office is at Level 6, Quadrant House, 4 Thomas More Square, London E1W 1YW.

8.	Annual General Meeting
	The Company's next Annual General Meeting ("AGM") will be held on 6 December 2013 and a formal Notice of AGM and proxy form were posted yesterday to those shareholders who have elected to receive hard copy shareholder communications from the Company and can also be downloaded from the Company's website at www.bezantresources.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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