Future Metals NL — Interim / Quarterly Report 2019

Feb 27, 2020

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RNS Number : 3206E

Red Emperor Resources NL

27 February 2020

27 February 2020

Red Emperor Resources NL

Half Year Report for the Six Months Ended 31 December 2019

The Board of Red Emperor Resources NL (ASX/AIM: RMP) ("RMP", "Red Emperor" or the "Company"), the natural resource exploration company with oil and gas interests on the Alaska North Slope and in South East Asia, is pleased to announce its unaudited interim results for the 6 months to 31 December 2019.

Please see below extracts from the Company's Half Year Report for the period ended 31 December 2019, being the:

-       Directors' Report

-       Consolidated Statement of Profit or Loss and Other Comprehensive Income

-       Consolidated Statement of Financial Position

-       Consolidated Statement of Changes in Equity

-       Consolidated Statement of Cash Flows

A copy of the full Half Year Report is available on the Company's website - www.redemperorresources.com

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

Red Emperor Resources NL	+61 8 9212 0102
Greg Bandy
Strand Hanson Limited (Nominated Adviser)	+44 (0) 20 7409 3494
James Harris
Brandon Hill Capital (UK Broker)	+44 (0) 203 463 5010
708 Capital Pty Ltd (Australian Broker)	+61 (0) 2 9112 2500

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.

Directors' Report

The Directors are pleased to present their report for Red Emperor Resources NL ("Red Emperor" or the "Company") and its subsidiaries (the "Group") for the half year ended 31 December 2019.

DIRECTORS

The persons who were directors of Red Emperor during the half year and up to the date of this report are:

·      Greg Bandy (Managing Director)

·      Aaron Bertolatti (Director & Company Secretary)

·      Jason Bontempo (Non-Executive Director)

REVIEW OF OPERATIONS

Perth Basin, Western Australia

In early December 2019, the Company entered into a binding Letter of Intent ("LOI") with Pilot Energy Limited (ASX: PGY) ("Pilot Energy") and Key Petroleum Limited (ASX: KEY) ("Key Petroleum") (together, the Joint Venture ("JV") partners) in order to secure an option to acquire a 70% operated interest in the offshore Perth Basin exploration permit, WA-481-P.

Pursuant to the terms of the LOI, Red Emperor agreed to fund the completion of an existing committed work programme comprising geological and geophysical studies required to be undertaken within the final year of the current permit term, up to a capped amount of A$150,000. Contemporaneous with such work programme, the existing JV partners, Pilot Energy (60% interest) and Key Petroleum (40% interest), in conjunction with Red Emperor, have formally applied to the National Offshore Petroleum Titles Administrator ("NOPTA") for a renewal of the permit, which expired on 19 February 2020.

On completion of the work programme, currently being managed and administered by Key Petroleum, and a favourable renewal decision from NOPTA, Red Emperor will have the exclusive option to acquire a 70% interest in, and the right to operate (subject to any requisite regulatory approval(s)), WA-481-P, in return for paying the JV partners, collectively, A$500,000. Red Emperor has until 15 business days after NOPTA's approval of the permit renewal application to exercise such option. A renewal decision is currently expected to be received in Q1 2020.

For further details, please refer to the Company's AIM announcement of 2 December 2019.

Alaska North Slope

During the reporting period, the consortium partners purchased additional regional 3D seismic data within ADL#s 391718, 391719, 391720 & 391721 (collectively, the "Western Blocks"), and the consortium is currently reviewing its plans to either reprocess / reinterpret the legacy 3D seismic data or seek to monetise the blocks.

Philippines (Block SC55)

On 26 August 2019, the 4-month extension to the moratorium period granted by the Philippine's Department of Energy ("DoE") expired. The Joint Venture then sought to enter into Sub-Phase 5 which required further, significant expenditure including the commitment to drill an exploration well in 2020.

The Board decided that this was not the optimum use of shareholder funds and as a result, during Q4 2019, the Company advised the operator, Palawan55, of its intention to withdraw from the Joint Venture and have its equity interest re-assigned.  Red Emperor still awaits formal approval of the reassignment of its equity interest in Block SC55 from the PoE and will advise shareholders once this has occurred.      

Corporate

In August 2019, Mr. Gracjan Lambert, Chief Executive Officer, resigned from the Company, by mutual agreement, in order to pursue his other business interests.

During the Period, Red Emperor retained the services of Mr. John Begg on a part-time basis to assist with introducing and reviewing business opportunities. John is an expert, upstream oil and gas project generator and deal closer. With decades of experience in equity capital markets, John is an industry-leading geoscientist who has lived and worked with consistently high business impact in Australia, developing SE Asian countries, the UK, Middle East and the USA.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

Subsequent to the reporting period end, the Company transferred A$150,000 to the JV partners of the offshore Perth Basin exploration permit WA-481-P to fund the completion of an existing committed work programme comprising geological and geophysical studies required to be undertaken within the final year of the current permit term.

There are no other significant events subsequent to the end of the Period to the date of this report.

AUDITOR'S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires the Company's auditors to provide the Directors of the Company with an Independence Declaration in relation to their review of the interim financial report.  This Independence Declaration is set out on page 4 and forms part of this Directors' report for the half-year ended 31 December 2019.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3) of the Corporations Act 2001.

Signed on behalf of the board in accordance with a resolution of the Directors.

Greg Bandy

Managing Director

Perth, Western Australia

27 February 2020

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the half-year ended 31 December 2019

		31-Dec-19	31-Dec-18
$	$
Continuing Operations
Interest received		13,412	52,602
Sale of subsidiary - Georgian Oil Pty Ltd		-	26,976
Unrealised foreign exchange gain		1,154	26,585
Employee and director benefits expense		(136,706)	(245,049)
Professional and consultants		(114,124)	(123,742)
ASX and AIM and share registry fees		(86,550)	(70,996)
Exploration expenditure written off		(93,999)	-
Share based payment expense		-	(700,330)
Other expenses		(81,203)	(324,406)
Loss before income tax		(498,016)	(1,358,360)
Income tax expense		-	-
Loss after Income Tax		(498,016)	(1,358,360)
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Foreign currency translation differences		54	160,936
Other comprehensive income for the period net of tax		54	160,936
Total comprehensive loss for the period		(497,962)	(1,197,424)
Loss per share for the period attributable to the members of Red Emperor Resources NL
Basic and diluted loss per share (cents)		(0.09)	(0.32)

The above Consolidated 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 31 December 2019

		31-Dec-19	30-Jun-19
Note	$	$
Current Assets
Cash and cash equivalents		5,105,357	5,642,936
Trade and other receivables		40,171	36,881
Total Current Assets		5,145,528	5,679,817
Non-Current Assets
Deferred exploration & evaluation expenditure	3	-	-
Total Non-Current Assets		-	-
Total Assets		5,145,528	5,679,817
Current Liabilities
Trade and other payables		28,952	65,279
Total Current Liabilities		28,952	65,279
Total Liabilities		28,952	65,279
Net Assets		5,116,576	5,614,538
Equity
Issued capital	4	61,811,451	61,811,451
Reserves	5	5,270,442	5,270,388
Accumulated losses	6	(61,965,317)	(61,467,301)
Total Equity		5,116,576	5,614,538

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Consolidated Statement of Changes in Equity

for the half-year ended 31 December 2019

	Issued capital	Accumulated losses	Foreign exchange translation reserve	Share based payments reserve	Total
$	$	$	$	$
Balance at 1 July 2018	57,329,505	(51,195,990)	(14,874)	4,111,702	10,230,343
Total comprehensive loss for the period
Loss for the period	-	(1,358,360)	-	-	(1,358,360)
Other comprehensive income	-	-	160,936	-	160,936
Total comprehensive income/(loss) for the period	-	(1,358,360)	160,936	-	(1,197,424)
Transactions with owners in their capacity as owners
Proceeds from options issued during the period	-	-	-	2,400	2,400
Share based payments	-	-	-	700,330	700,330
Balance at 31 December 2018	57,329,505	(52,554,350)	146,062	4,814,432	9,735,649

Balance at 1 July 2019	61,811,451	(61,467,301)	255,417	5,014,971	5,614,538
Total comprehensive loss for the period
Loss for the period	-	(498,016)	-	-	(498,016)
Other comprehensive income	-	-	54	-	54
Total comprehensive income/(loss) for the period	-	(498,016)	54	-	(497,962)
Transactions with owners in their capacity as owners
Balance at 31 December 2019	61,811,451	(61,965,317)	255,471	5,014,971	5,116,576

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

Consolidated Statement of Cash Flows

for the half-year ended 31 December 2019

		31-Dec-19	31-Dec-18
$	$
Cash flows from operating activities
Payments to suppliers and employees		(457,045)	(796,261)
Interest received		13,412	52,602
Net cash used in operating activities		(443,633)	(743,659)
Cash flows from investing activities
Payments for exploration and evaluation		(93,999)	(3,890,334)
Payment of performance bond		-	(1,454,779)
Proceeds from sale of subsidiary - Georgian Oil Pty Ltd		-	26,976
Net cash used in investing activities		(93,999)	(5,318,137)
Cash flows from financing activities
Proceeds from issue of options		-	2,400
Net cash provided by financing activities		-	2,400
Net decrease in cash and cash equivalents		(537,632)	(6,059,396)
Cash and cash equivalents at beginning of period		5,642,936	10,344,621
Effects of exchange rate changes on cash and cash equivalents		53	160,936
Cash and cash equivalents at the end of the period		5,105,357	4,446,161

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

About Red Emperor Resources NL

Red Emperor Resources NL is an Australian natural resource exploration company listed on both the Australian Securities Exchange (ASX: RMP) and the AIM Market (AIM: RMP).  Red Emperor has oil and gas interests on the Alaska North Slope and in South East Asia. In addition, in December 2019 it entered into a binding letter of intent to secure an option to acquire a 70 per cent. operated interest in the offshore Perth Basin exploration permit WA-481-P.

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

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