TIDMSVE
RNS Number : 5146C
Starvest PLC
17 June 2019
17 June 2019
Half-year report - six months ended 31 March 2019
Chairman's statement
The latter half of 2018 saw a marginal recovery in the mining
and resources sector but a decline in commodity prices adversely
affected share prices through Q1 2019. Despite this environment we
saw a 39% increase in our Net Asset Value (NAV) from GBP1.65m at 30
September 2018 to GBP2.30m as at 31 March 2019. From March 2019,
the company implemented a more transparent and objective valuation
method for portfolio stocks, making use of market prices without an
applied discount, and approximately 13 percentage points of the 39%
increase in NAV is attributable to this change.
We saw an increase in Net Asset Value Per Share over the six
months to 31 March 2019 from 3.33p per share to 4.15p per share.
Over the same period the daily closing share price remained at a
discount to NAV of approximately 35%.
The Company earned an operating profit of GBP640,414 during the
reporting period mainly attributable to significant increases in
selected portfolio stocks such as Greatland Gold plc (LON:GGP).
This operating profit resulted in earnings per share of 1.02p on a
fully diluted basis for the six-month period.
The Company continues its historical policy of investing in
companies with early-stage mining resource projects, but we also
have a mandate to invest directly in projects. Several projects are
under review focused on precious and base metals. We are also
evaluating other commodities such as lithium, cobalt and rare earth
elements which are forecast to increase in use and demand over the
medium to long term.
Several of our investee companies remain extremely active and
have provided very positive news flow over the reporting
period.
Greatland Gold (LON:GGP) continued exploration on its Paterson
area licences with drilling at Havieron producing exciting results
including 118m at 3.08g/t gold and 0.84% copper from 459m and 157m
at 6.04g/t gold and 0.44% copper from 660m. Peak grades of 211.3g/t
gold, 12.38% copper and 4,104ppm cobalt were established at
Havieron. The Company has subsequently signed a US$65m farm-in deal
with Newcrest with a minimum commitment of US$5m over an initial
12-month period with the potential for Newcrest to earn up to a 70%
interest through total expenditure of US$65m over a six-year
period. Newcrest may acquire an additional 5% interest at the end
of the farm-in period at fair market value for cash. Greatland is
well-funded to pursue its exploration work on the remaining parts
of the Havieron licence and two other Paterson licences, as well as
its five other project areas in Australia, with the potential to
add other exciting mineral exploration discoveries.
Cora Gold (LON:CORA) has continued exploration activities on its
flagship Sanankoro project, extending identified zones of gold
mineralisation within a 14km long structural corridor yet to be
fully tested. Independent consultants have calculated an initial
exploration target of between 30-50mt of ore at an average grade of
1.0-1.3g/t for 1.0-2.0moz gold. To date mineralisation has been
delineated to a depth of 100m, most of which is hosted within
weathered material which ranges in depth from around 50m to in
excess of 100m across the exploration target area. The relatively
soft oxidised rock would potentially allow for a low-cost open pit
operation.
Kefi Minerals (LON:KEFI) has taken significant steps toward mine
construction with the Ethiopian government giving approval for the
resettlement plan. The company has received all relevant consents
from federal agencies, including an endorsement by the Prime
Minster of the finance structure, with only minor aspects of the
plan yet to be finalised. The principal project contractors have
confirmed a 24-month development schedule set to commence in Q4
2019 while off-site project work such as power and roads
construction have already commenced.
Ariana Resources (LON:AAU) continues to report good production
results from its Kiziltepe Mine with 7,296oz extracted in Q1 2019,
exceeding annualised quarterly guidance by 17%. The company also
continues with exploration at its Kizilcukur, Tavsan and Salinbas
projects.
Other investee companies push ahead such as Oracle Power
(LOM:ORCP), which named a new CEO and has progressed its proposed
coal mine and power plant by securing the required capital to
proceed with development. Salt Lake Potash (LON:SO4) continues with
exploration at its Western Australia projects and is progressing
with test scale processing at one of its sites. Similarly, Sunrise
Resources (LON:SRES) has continued to test its pozzolan resource in
the USA with encouraging results.
Whilst the commodities market remains flat the board of Starvest
believes the Company is well positioned when the sector enters its
next upcycle. We continue to expect robust demand for energy and
metals over the medium and long term and look forward to providing
further updates to investors and the market.
Callum N Baxter
Chairman & Chief Executive
17 June 2019
Income Statement
6 months 6 months Year ended
to 31 March to 31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
GBP GBP GBP
Revenue 27,165 - -
Cost of sales (16,257) - -
------------- --------------- ---------------
Gross profit 10,908 - -
Administrative expenses (127,149) (128,922) (250,147)
Amounts written off against
trade investments (133,086) (415,421) (686,932)
Amounts written back against
trade investments 889,741 28,725 615,008
Operating profit / (loss) 640,414 (515,618) (322,071)
Interest receivable 37 2,945 5,829
------------- --------------- ---------------
Profit / (loss) on ordinary
activities before tax 640,451 (512,673) (316,242)
Tax on profit on ordinary activities - - -
------------- --------------- ---------------
Profit / (loss) / profit attributable
to Equity holders of the Company 640,451 (512,673) (316,242)
============= =============== ===============
Earnings/(loss) per share -
see note 3 1.18 pence (0.97) pence (0.60) pence
Basic 1.02 pence (0.83) pence (0.51) pence
Diluted
Statement of Financial Position
6 months 6 months Year ended
ended 31 ended 31 30 September
March 2019 March 2018 2018
Unaudited Unaudited Audited
GBP GBP GBP
Current assets
Trade and other receivables 16,331 18,552 55,992
Trade investments 2,258,694 1,183,287 1,498,059
Cash and cash equivalents 36,429 270,995 153,849
------------ ------------ --------------
Total current assets 2,311,454 1,472,834 1,707,900
------------ ------------ --------------
Current liabilities
Trade and other payables (44,504) (104,766) (119,401)
------------ ------------ --------------
Total current liabilities (44,504) (104,766) (119,401)
------------ ------------ --------------
Net current assets 2,266,950 1,368,068 1,588,499
============ ============ ==============
Capital and reserves
Called up share capital 552,927 528,982 539,649
Share premium account 1,681,431 1,640,876 1,654,209
Profit and loss account 32,592 (804,290) (607,859)
Equity reserve - 2,500 2,500
------------ ------------ --------------
Total equity shareholders'
funds 2,266,950 1,368,068 1,588,499
============ ============ ==============
Statement of Cash Flows
6 months 6 months Year ended
ended 31 ended 31 30 September
March 2019 March 2018 2018
Unaudited Unaudited Audited
GBP GBP GBP
Cash flows from operating activities
Operating profit/(loss) 640,414 (515,619) (322,071)
Net interest receivable 37 2,945 5,829
Share based payment charge 40,500 - 24,000
Decrease in trade and other
receivables 39,660 11,037 (26,403)
(Decrease)/increase in trade
and other payables (77,396) 3,154 17,788
------------ ------------ --------------
Net cash flows from operating
activities 643,215 (498,483) (300,857)
------------ ------------ --------------
Cash flows from investing activities
Purchase of current asset investments - (50,000) (50,000)
Loan converted to shares (20,000) - -
Sale of current asset investments 26,928 - -
Profit on sale of current asset (10,908) - -
investments
Increase in investment provisions 133,086 415,421 686,932
Decrease in investment provisions (889,741) (28,725) (615,008)
------------ ------------ --------------
Net cash flows from investing
activities (760,635) 336,696 21,924
------------ ------------ --------------
Net (decrease)/increase in cash
and cash equivalents (117,420) (161,787) (278,933)
Cash and cash equivalents at
beginning of period 153,849 432,782 432,782
------------ ------------ --------------
Cash and cash equivalents at
end of period 36,429 270,995 153,849
============ ============ ==============
Statement of Changes in Equity
Equity reserve Total Equity
attributable to
Share capital Share premium Profit and loss account shareholders
GBP GBP GBP GBP GBP
As at 30 September 2017 528,982 1,640,876 2,500 (291,617) 1,880,741
============= ============= ============== ======================= ======================
(Loss) for the period - - - (512,673) (512,673)
------------- ------------- -------------- ----------------------- ----------------------
Total recognised income
and expenses for the
period - - - (512,673) (512,673)
Shares issued - - - - -
Total contribution by
and distributions to -
owners - - - -
As at 31 March 2018 528,982 1,640,876 2,500 (804,290) 1,368,068
============= ============= ============== ======================= ======================
As at 30 September 2018 539,649 1,654,209 2,500 (607,859) 1,588,499
============= ============= ============== ======================= ======================
Profit for the period - - - 640,451 640,451
Total recognised income
and expenses for the
period - - - 640,451 640,451
Shares issued 13,278 27,222 - - 40,500
Equity component of
convertible loan - - (2,500) - (2,500)
------------- ------------- -------------- ----------------------- ----------------------
Total contributions by
and distributions to
owners 13,278 27,222 (2,500) - 38,000
As at 31 March 2019 552,927 1,681,431 - 32,592 2,266,950
============= ============= ============== ======================= ======================
Interim report notes
1. Interim report
The information relating to the six-month periods to 31 March
2019 and 31 March 2018 is unaudited.
The information relating to the year ended 30 September 2018 is
extracted from the audited accounts of the Company which have been
filed at Companies House and on which the auditors issued an
unqualified audit report.
2. Basis of preparation
This report has been prepared in accordance with applicable
United Kingdom accounting standards, including Financial Reporting
Standard 102 - 'The Financial Reporting Standard applicable in the
United Kingdom and Republic of Ireland' ('FRS102'), and with the
Companies Act 2006. Although the information included herein does
not constitute statutory accounts within the meaning of section 435
of the Companies Act 2006, the accounting policies that have been
applied are consistent with those adopted for the statutory
accounts for the year ended 30 September 2018.
The Company will report again for the full year to 30 September
2019.
The Company's investments at 31 March 2019 are stated at the
lower of cost and net realisable value or the valuation adopted at
30 September 2018 or the current market value based on market
quoted prices at the close of business. The Chairman's statement
includes a valuation based on market quoted prices at 31 March
2019.
3. Earnings per share
6 months 6 months Year ended
ended 31 ended 31 30 September
March 2019 March 2018 2018
Unaudited Unaudited Audited
GBP GBP GBP
Profit/(loss) for the period: 640,451 (512,673) (316,242)
------------- --------------- ---------------
Weighted average number of
Ordinary shares of GBP0.01
in issue 54,460,957 52,898,163 53,012,136
Earnings/(loss) per share 1.18 pence (0.97) pence (0.60) pence
- basic
------------- --------------- ---------------
Warrants in issue 8,500,000 8,500,000 8,500.000
Weighted average number of
Diluted Ordinary shares of
GBP0.01 in issue 62,960,957 61,398,163 61,512,136
Earnings/(loss) per share 1.02 pence (0.83) pence (0.51) pence
- diluted
------------- --------------- ---------------
Investment portfolio
Starvest now holds trade investments in the companies listed
below, which in aggregate comprise 95% of the portfolio value as at
31 March 2019:
Exploration for oil in England,
* Alba Mineral Resources plc lead-zinc in Ireland, uranium in
Mauritania and graphite in Greenland
www.albamineralresources.com
Gold-silver production and exploration
* Ariana Resources plc in Turkey
www.arianaresources.com
Gold exploration in West Africa
* Cora Gold Limited www.coragold.com
Gold exploration in Australia
* Greatland Gold plc www.greatlandgold.com
Gold and copper exploration in Ethiopia
* Kefi Minerals plc and Saudi Arabia
www.kefi-minerals.com
Coal mining in Pakistan
* Oracle Coalfields plc www.oraclecoalfields.com
Other direct and indirect mineral exploration companies:
Oil and gas exploration in Bulgaria
* Block Energy plc (formerly Goldcrest Resources plc) www.goldcrestresourcesplc.com
Investment banking and corporate
* Marechale Capital plc finance www.marechalecapital.com
Gold exploration in South America
* Minera IRL Limited www.minera-irl.com
Potash in Australia
* Salt Lake Potash Limited www.saltlaketpotash.com.au
Exploration for industrial minerals
* Sunrise Resources plc in United States, Finland, Australia
and Ireland
www.sunriseresourcesplc.com
Other investee companies are listed in the Company's 2018 annual
report available on request or from the Company web site -
www.starvest.co.uk
Copies of this interim report are available free of charge by
application in writing to the Company Secretary at the Company's
registered office, Salisbury House, London Wall, London EC2M 5PS,
by email to info@starvest.co.uk or from the Company's website -
www.starvest.co.uk
Enquiries to:
Starvest PLC
Callum Baxter or Gemma Cryan 02077 696 876
info@starvest.co.uk
Grant Thornton UK LLP (Nomad)
Colin Aaronson, Harrison Clarke or Seamus Fricker 02073 835
100
SI Capital Ltd (Broker)
Nick Emerson or Alan Gunn 01483 413 500
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END
IR UBOSRKRANAAR
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June 17, 2019 10:35 ET (14:35 GMT)
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