CORCEL PLC — Interim / Quarterly Report 2014

Mar 27, 2015

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RNS Number : 7012I

Regency Mines PLC

27 March 2015

27 March 2015
Regency Mines Plc ("Regency" or the "Company"), the natural resources exploration and investment company with interests in oil in the United States and United Kingdom and nickel and other minerals in Australia, Papua New Guinea and Sudan, announces its unaudited half-yearly results for the six months ended 31 December 2014.

Chairman's statement

Dear Shareholders,

The six months to 31 December 2014 were dominated in terms of news coverage by the investments in the oil sector made by Regency. The most significant of these was the investment in 5% of Horse Hill Development Ltd (HHDL), supporting a similar investment at the same time by Alba Mineral Resources plc (Alba), in which Regency was a significant shareholder. During the period HHDL drilled the HH-1 well near Gatwick in Sussex, and announced a discovery currently thought to be commercial.

At the same time, and attracting less attention by the capital markets, the Company continued its steady exploration of agromineral prospects in Sudan, announcing the results of an ASTER study and interpretation of the Jebel Abyad phosphate target and mobilisation for an exploration programme at the Red Sea potash prospect. 

Finance

Meanwhile the Company continued its programme of repaying debt and cutting costs in order to maximise its effectiveness in a period of continuing depressed sentiment towards the sector and low commodity prices. Administrative costs during the period, once adjustment is made for a £98k increase in currency losses on consolidation, declined significantly, and this decline is expected to continue in the current half year.

Sales were made of part of Regency's investment in Alba at a profit after the announcement of the two companies' investment in HHDL, and Regency saw an appreciation in the value of its remaining Alba holding over this time period. Sales were also made of part of Regency's holding in Ram Resources Ltd (Ram) in Australia. Although this latter sale showed a loss on book value, the Fraser Range assets that had been sold into Ram the previous year and resulted in the Company's holding these shares had little associated cost and so over the acquisition to disposal cycle the Company has realised and will continue to realise very favourable returns.

Oil

Besides the investment in HHDL, a further small planned investment in a West Virginia drilling project was made, and prospects for drilling this project economically will be reviewed later in the Spring. 

After the end of the period, in March 2015, Regency announced the planned sale of its stake in HHDL to Alba. This sale will make funds available for other projects, and among those under review are potential low-risk and high-return oil participations in Texas and Louisiana, as well as other projects. A rigorous process of analysis is conducted on all projects brought to the Company, and not many projects will have acceptable risk parameters and be capable of providing near-term cash flow from low cost production, which are among the requirements.  

Since the Company has large and long term projects in Papua New Guinea, Direct Nickel Ltd (DNi), and Sudan, where the possibility of progress in any individual year may be uncertain, complementing these with revenues from mining finance operations and sales of resulting marketable investments remains the strategy. Adding cash flow from smaller oil and gas participations as an additional source of financing to cover Company overheads and fund mineral exploration is a rational response to current market conditions.

Nickel

The Nickel price has come back to lower levels, and although the Company is confident that the next move for this metal, two thirds of which is used in stainless steel, will be upward, timing of these developments remains uncertain. The Company's partner Direct Nickel Ltd has faced challenges with advancing its technology as a result both of market conditions and of delays in progress in Indonesia in the recent post-election period.

The Company maintains its interest in the Mambare license, where some activity will be undertaken this year, and is actively engaged with DNi in order to assist that company with evolving its strategy for 2015.

Regency continues to discuss possible strategic alliances in this field.

Sudan

The Company is working with a consultant to follow up indications of carnallite and silvinite mineralisation in the well-log drilled to the south of and down-dip of the Red Sea license area, since these may be confirmatory of potash presence.

A short focussed exploration trip to target areas identified last year in the Jebel Abyad license is planned shortly, followed by a further phase of exploration at the Red Sea.

Investments and other

Regency retains a discloseable holding in Alba, through which it continues to have an interest in potential developments at the Horse Hill oil discovery. The Company also has been issued further shares in Ram, and in the event of a fundraising by Ram to finance exploration at the Fraser Range gold/copper exploration project it expects to exercise its conversion rights into further Ram shares. These shareholdings in Alba and Ram are marketable investments that may at an appropriate time be sold.

The Company looks forward to progressing exploration of its Munglinup tenements in conjunction with the new owner of the adjacent Halberts property, formerly a producing graphite mine.

Regency thanks shareholders and staff for their support over a challenging period. In the period ahead the Company will work diligently on its existing assets, and will remain open to opportunities for adding value and achieving the critical mass that will enable it to seize fully the opportunities that recovery will bring.

Andrew Bell

Chairman and CEO

27 March 2015

Consolidated statement of financial position

as at 31 December 2014

	Notes	31 December 2014		31 December 2013		30 June 2014
		Unaudited £		Unaudited £		Audited £
ASSETS
Non current assets
Property plant and equipment		12,943		35,240		22,562
Investments in associates and joint ventures		2,164,183		2,413,740		2,234,244
Available for sale financial assets		4,686,652		4,570,968		4,611,833
Exploration assets		1,259,823		1,427,588		1,198,306
Total non current assets		8,123,601		8,447,536		8,066,945
Current assets
Cash and cash equivalents		7,243		10,168		267,325
Trade and other receivables		1,778,765		1,500,417		1,659,602
Total current assets		1,786,008		1,510,585		1,926,927
TOTAL ASSETS		9,909,609		9,958,121		9,993,872
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital	5	1,788,919		1,222,540		1,475,403
Share premium account		16,539,232		15,545,787		15,944,484
Share based payment reserve		-		44,028		41,512
Other reserves		(327,982)		(202,234)		(370,137)
Retained earnings		(8,853,699)		(7,642,437)		(8,089,080)
Total Equity		9,146,470		8,967,684		9,002,182
LIABILITIES
Current liabilities
Trade and other payables		427,323		442,800		503,427
Short term borrowings		335,816		547,637		488,263
Total current liabilities		763,139		990,437		991,690
TOTAL EQUITY AND LIABILITIES		9,909,609		9,958,121		9,993,872

The accompanying notes form an integral part of these financial statements.

Consolidated statement of income

for the period ended 31 December 2014

	Notes	6 months to 31 December 2014		6 months to 31 December 2013
		Unaudited £		Unaudited £
Revenue
Management services		15,255		63,991
Gain on sale of tenements		-		973,702
		15,255		1,037,693
Gain/(loss) on dilution of interest in associate		(30,585)		25,948
Loss on sale of investments		(50,150)		-
Impairment of available for sale investment		-		(913,676)
Impairment of exploration assets		(103,971)		(475,138)
Exploration expenses		3,106		(30,082)
Administrative expenses		(532,042)		(514,212)
Share of losses of associates		(104,505)		(171,536)
Finance costs, net		(3,239)		(18,650)
Loss for the period before taxation from continuing operations		(806,131)		(1,059,653)
Tax expense		-		-
Loss for the period after taxation from continuing operations		(806,131)		(1,059,653)
Earnings per share
Loss per share - basic	3	(0.05) pence		(0.09) pence
Loss per share - diluted	3	(0.05) pence		(0.09) pence

The accompanying notes form an integral part of these financial statements.

Consolidated statement of comprehensive income

for the period ended 31 December 2014

		6 months to 31 December 2014		6 months to 31 December 2013
		Unaudited £		Unaudited £
Loss for the period		(806,131)		(1,059,653)
Revaluation of available for sale investments		30,821		71,257
Group's share of associates' other comprehensive (expense)/ income		(9,971)		13,106
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations		21,305		(21,273)
Total comprehensive loss for the period		(763,976)		(996,563)

The accompanying notes form an integral part of these financial statements.

Consolidated statement of changes in equity

for the period ended 31 December 2014

The movements in equity during the period were as follows:

	Share capital	Share premium account	Retained earnings	Share based payment reserve	Other reserves	Total equity
	£	£	£	£	£	£
As at 30 June 2013	1,106,050	15,025,276	(6,595,363)	56,607	(265,324)	9,327,246
Changes in equity for 2013
Total comprehensive (loss)/income for the period	-	-	(1,059,653)	-	63,090	(996,563)
Transactions with owners
Issue of shares	116,490	520,511	-	-	-	637,001
Share-based payment transfer	-	-	12,579	(12,579)	-	-
Total Transactions with owners	116,490	520,511	12,579	(12,579)	-	637,001
As at 31 December 2013	1,222,540	15,545,787	(7,642,437)	44,028	(202,234)	8,967,684
As at 30 June 2014	1,475,403	15,944,484	(8,089,080)	41,512	(370,137)	9,002,182
Changes in equity for 2014
Total comprehensive (loss)/income for the period	-	-	(806,131)	-	42,155	(763,976)
Transactions with owners
Issue of shares	313,516	621,103	-	-	-	934,619
Share issue and fundraising costs	-	(26,355)	-	-	-	(26,355)
Share-based payment transfer	-	-	41,512	(41,512)	-	-
Total Transactions with owners	313,516	594,748	41,512	(41,512)	-	908,264
As at 31 December 2014	1,788,919	16,539,232	(8,853,699)	-	(327,982)	9,146,470

	Available for sale trade investments reserve	Associate investments reserve	Foreign currency translation reserve	Total other reserves
	£	£	£	£
As at 30 June 2013	(35,034)	(457,640)	227,350	(265,324)
Changes in equity for 2013
Total comprehensive income/(loss) for the period	71,257	13,106	(21,273)	63,090
As at 31 December 2013	36,223	(444,534)	206,077	(202,234)
As at 30 June 2014	(311,934)	(403,989)	345,786	(370,137)
Changes in equity for 2014
Total comprehensive income/(loss) for the period	30,821	(9,971)	21,305	42,155
As at 31 December 2014	(281,113)	(413,960)	367,091	(327,982)

Consolidated statement of cash flows

for the period ended 31 December 2014

		6 months to 31 December 2014		6 months to 31 December 2013
		Unaudited £		Unaudited £
Cash flows from operating activities
Loss before taxation		(806,131)		(1,059,653)
(Increase)/decrease in receivables		(119,161)		112,854
(Decrease)/increase in payables		(76,104)		5,942
Share of losses in associates		104,505		171,536
Interest receivable		(8,412)		(8,740)
Interest payable		11,651		27,390
Impairment of exploration properties		103,971		475,138
Share-based payments		-		54,000
Currency adjustments		121,334		96,667
Impairment of available for sale investment		-		913,676
Loss/(Gain) on dilution of interest in associates		30,585		(25,948)
Loss on sale of available for sale investments		50,150		-
Gain on sale of tenements		-		(973,702)
Depreciation		9,618		13,301
Net cash flows from operations		(577,994)		(197,539)
Cash flows from investing activities
Interest received		8,412		8,740
Proceeds from sale of investments		205,852		-
Payments to acquire associate company investments		(75,000)		-
Payments to acquire available for sale investments		(300,000)		(53,793)
Exploration payments		(207,378)		(366,338)
Payments to acquire property plant and equipment		-		(1,028)
Net cash flows from investing activities		(368,114)		(412,419)
Cash flows from financing activities
Proceeds from issue of shares		934,619		583,000
Transaction costs of issue of shares		(26,355)		-
Interest paid		(11,651)		(27,390)
Proceeds of new borrowings		209,787		250,000
Repayment of borrowings		(420,374)		(198,245)
Net cash flows from financing activities		686,026		607,365
Net decrease in cash and cash equivalents		(260,082)		(2,593)
Cash and cash equivalents at the beginning of period		267,325		12,761
Cash and cash equivalents at end of period		7,243		10,168

Half-yearly report notes

for the period ended 31 December 2014

1	Company and Group

	As at 30 June 2014 and 31 December 2014 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively.
	The Company will report again for the full year ending 30 June 2015. The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2014 has been extracted from the statutory accounts of the Group for that year. Statutory accounts for the year ended 30 June 2014, upon which the auditors gave an unqualified audit report which did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

2	Accounting Polices

	Basis of preparation
	The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting'.  The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2014, which have been prepared in accordance with IFRS.

3	Loss per share	6 months to  31 December  2014		6 months to  31 December  2013
		£		£

	These have been calculated on loss for the period after taxation of:	(806,131)		(1,059,653)
	Weighted average number of Ordinary shares of £0.001 in issue	1,630,200,524		1,158,617,085
	Loss per share - basic	(0.05) pence		(0.09) pence
	Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options	1,630,200,524		1,158,617,085
	Loss per share fully diluted	(0.05) pence		(0.09) pence

	The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows:

		2014		2013
		Number		Number
	Earnings per share denominator	1,630,200,524		1,158,617,085
	Weighted average number of exercisable share options	-		-
	Diluted earnings per share denominator	1,630,200,524		1,158,617,085

In accordance with IAS 33, the diluted earnings per share denominator takes into account the difference between the average market price of ordinary shares in the year and the weighted average exercise price of the outstanding options. The Group has weighted average share options of 6,367,213 for the current period. These were not included in the calculation of diluted earnings per share because all the options are not likely to be exercised given that even the lowest exercise price is substantially higher than the market price and are therefore non-dilutive for the period presented.

Half-yearly report notes

for the period ended 31 December 2014, continued

4	Segmental analysis

	Since the last annual financial statements the Group has not made any changes or additions to how it measures its segmental results.

		Investment in Red Rock Resources plc	Other investments	Australian exploration	Papua New Guinea exploration	Corporate and unallocated	Total
	For the 6 month period to 31 December 2014	£	£	£	£	£	£
	Revenue	-	-	-	-	15,255	15,255
	Result
	Segment results	(132,087)	130,274	(385,961)	(3,003)	(412,115)	(802,892)
	Loss before tax and finance costs
	Interest receivable						8,412
	Interest payable						(11,651)
	Loss for the period before taxation						(806,131)
	Taxation expense						-
	Loss for the period after taxation						(806,131)
		Investment in Red Rock Resources plc	Other investments	Australian exploration	Papua New Guinea exploration	Corporate and unallocated	Total
	For the 6 month period to 31 December 2013	£	£	£	£	£	£
	Revenue	-	-	973,702	-	63,991	1,037,693
	Result
	Segment results	(102,677)	(913,676)	366,164	(61,731)	(329,083)	(1,041,003)
	Loss before tax and finance costs						(1,041,003)
	Interest receivable						8,740
	Interest payable						(27,390)
	Loss for the period before taxation						(1,059,653)
	Taxation expense						-
	Loss for the period after taxation						(1,059,653)

	A measure of total asset and liabilities for each segment is not readily available and so this information has not been presented.

Half-yearly report notes

for the period ended 31 December 2014, continued

5	Share Capital of the company

	The share capital of the Company is as follows:

		Number		Nominal £
	Allotted, issued and fully paid
	As at 30 June 2014	1,475,402,734		1,475,403
	Issued 12 August 2014 at 0.28 pence per share	60,500,063		60,500
	Issued 29 August 2014 at 0.28 pence per share	56,321,437		56,321
	Issued 29 September 2014 at 0.40 pence per share	61,925,000		61,925
	Issued 29 September 2014 at 0.48 pence per share	41,905,659		41,906
	Issued 27 November 2014 at 0.17 pence per share	92,864,033		92,864
	At 31 December 2014	1,788,918,926		1,788,919

6	Capital Management
	Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.

7       Subsequent events

·      On 20 February 2015, the Company announced that a resolution was passed at the General Meeting held that day whereby  each of the 1,788,918,926 existing Ordinary Shares will be subdivided into one new Ordinary Share of 0.01p each and one Deferred Share of 0.09p each.

·      On 20 February 2015, the Company announced an issuance of 35,000,000 new shares to the Company by RAM Resources ('RAM'). The shares were issued by conversion of 5.6% out of the 13.5% carried interest retained by the Company in the Fraser Range tenements and have been issued at a deemed issue price of AUD 0.8c, valuing the Shares at AUD 280,000. The Shares are subject to a voluntary escrow period until 21 April 2015.

·      On 12 March 2015, the Company announced that it has executed a binding term sheet with Alba Mineral Resources Plc to sell its interests in Horse Hill Developments Ltd for a total consideration of £300,000 payable in cash.

For further information, please contact:

Andrew Bell 0207 747 9960 or 0776 647 4849                                   Chairman Regency Mines Plc

Roland Cornish/Rosalind Hill Abrahams 0207 628 3396              NOMAD Beaumont Cornish Limited

Jason Robertson 0129 351 7744                                                          Broker Dowgate Capital Stockbrokers Ltd.

Christian Pickel 0203 128 8208                                                          Media Relations MHP Communications

This information is provided by RNS

The company news service from the London Stock Exchange

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