Unaudited half-yearly results

RNS Number : 2440A
Red Rock Resources plc
22 March 2017
 



22 March 2017

 

Red Rock Resources plc

Unaudited half-yearly results for the six months ended 31 December 2016

 

 

Red Rock Resources plc ("Red Rock" or the "Company"), the natural resource exploration and development company with production interests in oil in Louisiana, manganese in South Africa, and gold in South America, announces its unaudited half-yearly results for the six months ended 31 December 2016.

 

Chairman's statement

 

We present the company's interim report for the six months to 31st December 2016.

 

Three months ago in our Annual Report we spoke of the end of the downward cycle in the mineral sectors, and the beginning of a recovery that had been seen since the lows of January and February 2016. The cost reduction measures we were implementing, another theme of the Annual Report, and the continuation of the sector's good performance into the end of the calendar year, have meant that the recovery began to feed through into our published results with these interim figures.

 

The published profit for the six month period was £147,662 compared with a loss of £22,025 for the six months to 31st December 2015. Of greater significance, the total comprehensive profit for the period rose to £7,114,520 against a loss of £109,477 in the comparable period of the previous year. This reflected principally a £6,927,699 partial reversal of prior year impairments in the value of our 1.2% holding in Jupiter Mines Ltd ("Jupiter") which also impacted positively on shareholders' total equity which rose to £16,026,755 from £8,627,235 at 30th June 2016.

 

The reduction in our cost base saw a 39.1% year-on-year reduction in administrative costs for the half year against the year-before period, after a 24.4% year-on-year reduction in the year to June 2016,

 

Better manganese prices allowed the Tshipi é Ntle mine in the Northern Cape province of South Africa to announce in November 2016 a planned distribution to its shareholders equivalent to over half their capital investment in developing the mine. The 49.9% joint venture shareholder, Jupiter, in turn made a distribution to its shareholders: our share of that, US$655,784.80 (approximately £530,700), we received after the period-end in March 2017. A further distribution is expected this year. The distribution was carried out by means of an "equal access buyback" at US$0.40 per share for 6% of the Jupiter shares held by each shareholder, and received 98.01% acceptance.

 

At the 40c price, the value of our holding would be US$10.93m (or approximately £8.85m), and we would hope for (but might not achieve) an equal or higher price-equivalent in a liquidity event for the remainder of our holding, which is anticipated for later this year.

 

Jupiter has since appointed Bank of America Merrill Lynch to progress options for realising shareholder value in 2017: this may include a relisting, or a listing or sale of Tshipi é Ntle.

 

Given the disparity between our market capitalisation on the stock market and the value of this single high quality asset, and the strong possibility of a liquidity event, our nearest and safest way to preserve and increase shareholder value will be to keep costs low and avoid where possible new share issuance as we expect developments at Jupiter to cause before long a natural narrowing of the discount at which we trade. It might be hard for a new investment to offer a return superior to that obtainable from an existing investment. 

 

Turning to our other projects , the new owner of our former gold mining interests in Colombia now has a C$24m market value and has broadened its asset base. It announced in February 2017 that the second ball mill at the El Limón mine is now installed and operational, supplementing the first ball mill which gave us some problems and has given the new owner further ones, requiring more and lengthier refurbishment than expected. In our current financial year we have received three royalty payments amounting to US$26,607.16 from El Limón, covering the period to end-December, and hope to get one more, at a considerably higher level, as well as a US$50,000 interest payment, before our books close on 30th June 2017. After c1410 oz of gold production in calendar 2016, the operators forecast a level of production nearly ten times higher in 2017, with a 70%-plus further increase in 2018, so that we look to a substantial increase in our revenues from this source.

 

Our third revenue-producing asset, our 20% working interest in the LM20 and other oil and gas wells in the Shoats Creek field in Louisiana, has failed to produce the expected revenue stream to date as it has not been operated satisfactorily. This is a matter we shall now address, through a more vigorous and proactive approach. We see no reason why it should not perform better.

 

Apart from these three revenue and cash flow-producing interests, and some minor ones, the Company retains some exploration interests and assets in Kenya, Ivory Coast and elsewhere.

 

In Kenya, the company is pursuing an action for judicial review on behalf of itself and its local partner, and until that is resolved is restricted in its activities. This is a matter we shall give renewed attention. The Company is also seeking arbitration on its claim for conversion or early repayment of the US$1m Promissory Note due in May 2018 that was issued to it at the time of the sale of the Colombian assets.

 

Red Rock expects to show continuing satisfactory results in the second half of its financial year and for the full year to 30th June 2017, and, provided that commodity prices remain reasonably stable, should see a pattern of strengthening revenues in the following year. There is also a strong possibility of one or more significant liquidity events over coming months. The Company therefore looks to the future with confidence.   

 

 

Andrew Bell

Chairman

22 March 2017

 




 



 

Consolidated statement of financial position

as at 31 December 2016

 


Notes

31 December 2016


31 December 2015


30 June 2016


30 June 2015



Unaudited £


Unaudited £


Audited £


Audited £










ASSETS









Non-current assets









Property plant and equipment

5

15,600


-


17,400


266

Investments in associates and joint ventures


2,458,409


3,924,891


2,459,638


3,968,878

Available for sale financial assets

6

8,868,758


1,606,766


1,976,552


1,331,766

Exploration assets


280,460


-


280,460


-

Non-current receivables


5,205,816


3,692,538


4,838,559


3,634,270

Total non-current assets


16,829,043


9,224,195


9,572,609


8,935,180










Current assets









Cash and cash equivalents


32,585


132,760


26,564


29,426

Trade and other receivables


996,151


765,863


939,554


661,152

Total current assets


1,028,736


898,623


966,118


690,578










TOTAL ASSETS


17,857,779


10,122,818


10,538,727


9,625,758



















EQUITY AND LIABILITIES









Equity attributable to owners of the parent









Called up share capital

7

2,759,988


2,737,390


2,752,487


2,600,207

Share premium account


25,553,288


24,678,302


25,275,788


24,285,503

Other reserves


7,490,289


          307,448


523,431


394,899

Retained earnings


     (19,751,847)


(19,769,046)


(19,910,736)


(19,747,630)



16,051,718


7,954,094


8,640,971


7,532,979










Non-controlling interest


(24,963)


(6,100)


(13,736)


(5,491)

Total equity


16,026,755


7,947,994


8,627,235


7,527,488










LIABILITIES









Current liabilities









Trade and other payables


1,831,024


2,094,202


1,854,002


2,098,270

Short term borrowings


-


80,622


57,490


-

Total current liabilities


1,831,024


2,174,824


1,911,492


2,098,270










TOTAL EQUITY AND LIABILITIES


17,857,779


10,122,818


10,538,727


9,625,758










 

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



 

Consolidated statement of income

for the period ended 31 December 2016

 


Notes

6 months to 31 December 2016


6 months to 31 December 2015



Unaudited £


Unaudited £











Loss on sale of investments


(39,861)


-

Administrative expenses


(293,861)


(482,520)

Depreciation


(1,800)


(267)

Exploration expenses


(106,975)


(26,591)

Share of losses of associates and joint ventures


(1,229)


-

Other income


210,784


420,587

Foreign exchange gain


235,900


72,214

Finance income/(costs), net


144,704


(5,448)

Profit/(loss) for the period before taxation from continuing operations


147,662


(22,025)






Tax credit


-


-






Profit/(loss) for the period from continuing operations


147,662


(22,025)






Profit/(loss) for the period attributable to:





Equity holders of the parent


158,889


(21,417)

Non-controlling interest


(11,227)


(608)



147,662


(22,025)






Profit/(loss) per share





Profit/(loss) per share - basic

3

0.04 pence


(0.00) pence

Profit/(loss) per share - diluted

3

0.04 pence


(0.00) pence

 

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

 



 

Consolidated statement of comprehensive income

for the period ended 31 December 2016

 



6 months to 31 December 2016


6 months to 31 December 2015



Unaudited £


Unaudited £











Profit/(loss) for the period


147,662


(22,025)

Revaluation of available for sale investments


6,927,699


-

Unrealised foreign currency gain /(loss) arising upon retranslation of foreign operations


 

39,159


 

(87,452)

Total comprehensive profit/(loss) for the period


7,114,520


(109,477)











Total comprehensive income/(loss) for the period attributable to:





Equity holders of the parent


7,125,747


(108,869)

Non-controlling interest


           (11,227)


(608)



7,114,520


(109,477)






 

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

 

 



 

Consolidated statement of changes in equity

for the period ended 31 December 2016

 

The movements in equity during the period were as follows:


Share capital

Share premium account

Retained earnings

Non- controlling interest

Other reserves

Total equity

Unaudited

£

£

£

£

£

£








As at 30 June 2015

2,600,207

24,385,501

(19,747,629)

(5,491)

394,900

7,627,488

Changes in equity for 2015







Total comprehensive (loss)/income for the period

 

-

 

-

 

(21,417)

 

(608)

 

(87,452)

 

(109,477)

Transactions with owners







Issue of shares

137,184

392,799

-

-

-

529,983

Share issue and fundraising costs

-

-

-

-

-

-

Share-based payment transfer

-

-

-

-

-

-

Total Transactions with owners

137,184

392,799

(21,417)

-

-

508,566

As at 31 December 2015

2,737,390

24,778,301

(19,769,046)

(6,100)

307,448

7,100,975








As at 30 June 2016

2,752,488

25,275,788

(19,910,736)

(13,736)

523,431

8,627,235

Changes in equity for 2016







Total comprehensive income/(loss) for the period

 

-

             

-

 

158,889

 

(11,227)

 

6,966,858

 

7,114,520

Transactions with owners







Issue of shares

7,500

292,500

-

-

-

300,000

Share issue and fundraising costs

-

(15,000)

-

-

-

(15,000)

Share-based payment transfer

-

               -

-

-

-

-

Total Transactions with owners

7,500

277,500

-

-

-

285,000

As at 31 December 2016

2,759,988

25,553,288

(19,751,847)

(24,963)

7,490,289

16,026,755

 


Available for sale trade investments reserve

Foreign currency translation reserve

Share based payment reserve

Total other reserves

Unaudited

£

£

£

£






As at 30 June 2015

141,810

141,161

111,929

394,900

Changes in equity for 2015





Total comprehensive income for the period

-

(87,452)

-

(87,452)

Transactions with owners





Share-based payment transfer

-

-

-

-

As at 31 December 2015

141,810

53,709

111,929

307,448






As at 30 June 2016

299,096

161,065

63,270

523,431

Changes in equity for 2016





Total comprehensive income for the period

6,927,699

39,159

-

6,966,858

Transactions with owners





Share-based payment transfer

-

-

-

-

As at 31 December 2016

7,226,795

200,224

63,270

7,490,289






 



 

Consolidated statement of cash flows

for the period ended 31 December 2016

 


Notes

6 months to 31 December 2016


6 months to 31 December 2015



Unaudited £


Unaudited £

Cash flows from operating activities





Profit/(loss) before tax from continuing operations


147,662


(22,025)

(Increase)/decrease in receivables


(114,609)


(302,760)

(Decrease/increase in payables


(21,090)


4,070

Share of losses in associates and joint ventures


1,229


-

Interest receivable


(145,150)


(34)

Interest payable


445


5,481

Currency adjustments


(144,446)


96,354

Depreciation


1,800


231

Bad debt expense


19,508


-

Net cash outflow from operations


(254,651)


(226,823)






Cash flows from investing activities





Interest received


-


34

Proceeds of sale of investments


132,778


-

Payments to acquire associate company and joint venture investments


-


(275,000)

Payments to acquire AFS investments


(97,284)


-

Net cash (outflow)/inflow from investing activities


35,494


           (274,967)






Cash flows from financing activities





Proceeds from issue of shares


300,000


529,983

Transaction costs of issue of shares


(15,000)


-

Interest paid


(445)


(5,481)

Proceeds of new borrowings


-


250,000

Repayments of borrowings


(59,377)


(169,378)

Net cash inflow from financing activities


225,178


605,124






Net (decrease)/increase in cash and cash equivalents


6,021


103,334






Cash and cash equivalents at the beginning of period


26,564


29,426

Cash and cash equivalents at end of period


32,585


132,760






Cash and cash equivalents


32,585


132,760



32,585


132,760

 



 

Half-yearly report notes

for the period ended 31 December 2016

 

1

Company and group

 


As at 30 June 2016 and 31 December 2016 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 year ending 30 June 2017.

 

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 2016 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2016, 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 2016, which have been prepared in accordance with IFRS.

 

3

Profit per share


 

The following reflects the profit/(loss) and share data used in the basic and diluted profit/(loss) per share computations:

 



6 months to

 31 December 2016


6 months to

 31 December 2015



Unaudited £


Unaudited £







Profit/(loss) attributable to equity holders of the parent company

158,889


(21,417)







Weighted average number of Ordinary shares of £0.0001 in issue

394,440,494


5,756,628,685


Profit/(loss) per share - basic

0.04 pence


(0.00) pence







Weighted average number of Ordinary shares of £0.0001 in issue inclusive of outstanding dilutive options

394,440,494


5,756,628,685


Profit/(loss) per share - fully diluted

0.04 pence


(0.00) pence







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



2016


2015



Number


Number







Profit/(loss) per share denominator

394,440,494


5,756,628,685


Weighted average number of exercisable share options

13,320,000


-


Diluted profit/(loss) per share denominator

407,760,494


5,756,628,685




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 13,320,000 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 2016, continued

 

4

Segmental analysis

 



Jupiter Mines

Limited

 

Other investments

 

Australian exploration

 

African

exploration

Corporate and unallocated

 

 

Total


For the 6 month period to 31 December 2016

£

£

£

£

£

£










Revenue








Total segment external revenue

-

-

-

-

-

-










Result








Segment results

               -

(105,464)

29,309

(86,114)

165,227

2,958


Profit from continuing operations before tax and finance costs






2,958










Interest receivable






144,955


Interest payable






(251)


Profit from continuing operations before tax






147,662










Tax






-


Profit from continuing operations for the period






147,662

 



Jupiter Mines

Limited

 

Other investments

 

Australian exploration

 

African

exploration

Corporate and unallocated

 

 

Total


For the 6 month period to 31 December 2015

£

£

£

£

£

£










Revenue








Total segment external revenue

-

-

-

-

-

-










Result








Segment results

               -

(47,607)

(1,261)

(4,677)

36,968

(16,577)


Loss from continuing operations before tax and finance costs






(16,577)










Interest receivable






33


Interest payable






(5,481)


Loss from continuing operations before tax






(22,025)










Tax






-


Loss from continuing operations for the period






(22,025)

 

 


A measure of total assets 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 2016, continued

 

5

Property plant and equipment



Field equipment

and machinery

£

Fixtures and

fittings

£

Assets under

construction

£

Total

£

 







 

31 December 2015






 

Cost






 

At 1 July 2015


34,607

28,649

-

63,256

 

Additions


-

-

-

-

 

Disposals


-

-

-

-

 

Currency exchange


-

-

-

-

 

At 31 December 2015


34,607

28,649

-

63,256

 

Depreciation and impairment






 

At 1 July 2015


(34,607)

(28,382)

-

(62,989)

 

Depreciation charge


-

(267)

-

(267)

 

Disposals


-

-

-

-

 

Currency exchange


-

-

-

-

 

At 31 December 2015


(34,607)

(28,649)

-

(63,256)

 

Net book value






 

At 31 December 2015


-

-

-

-

 

 

31 December 2016






 

Cost






 

At 1 July 2016


34,607

45,807

-

80,414

 

Additions


-

-

-

-

 

Disposals


-

-

-

-

 

Currency exchange


-

-

-

-

 

At 31 December 2016


34,607

45,807

-

80,414

 

Depreciation and impairment






 

At 1 July 2016


(34,607)

(28,407)

-

(63,014)

 

Depreciation charge


-

(1,800)

-

(1,800)

 

Disposals


-

-

-

-

 

Currency exchange


-

-

-

-

 

At 31 December 2016


(34.607)

(30,207)

-

(64,814)

 

Net book value






 

At 31 December 2016


-

15,600

-

15,600

 

 

 

6

Available for sale financial assets



31 December 2016

£

31 December

2015

£

 


At 1 July 2016

1,976,552

1,331,766

 


Additions

97,284

275,000

 


Disposals

(132,778)

-

 


Revaluation adjustment

6,927,699

-

 


Impairment

                        -

-

 


At 31 December 2016

8,868,758

1,606,766

 

 

 

 

 

 

 

 

 

 

Half-yearly report notes

for the period ended 31 December 2016, continued

 


7


Share Capital of the company


 

Number
Nominal £







Allotted and fully paid during the period





As at 30 June 2016

392,325,740


2,752,487







Issued 24 August 2016 at 0.40 pence per share

75,000,000


7,500







As at 31 December 2016

467,325,740


2,759,987






 

8

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 period.

 

9

Subsequent events

·       On 16 January 2017, the company granted 35,000,000 employee options exercisable at 0.80p per share for a period of six years, and vesting in four equal tranches, two immediately, and the other two after 6 months and subject to performance conditions. The grants other than those to non-executive directors were made under the company's Enterprise management Incentive scheme. 

·       On 14 March 2017, the company announced that Jupiter Mines Ltd had completed the equal access share buy-back which commenced on 30 January 2017. Red Rock held 27,324,374 shares in Jupiter, equivalent to approximately 1.2% of the issued share capital prior to the share buyback. The carrying cost of this investment in the books of Red Rock at the date of the last audited accounts, 30 June 2016, was £1,483,119. Following the equal access buyback, in which Red Rock tendered 6% of the Jupiter stock it held, Red Rock has received USD 655,784.80 (approximately £537,131) and holds 25,684,913 shares in Jupiter, equivalent to approximately 1.2% of the issued share capital.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR ZMGZFVZRGNZM
UK 100

Latest directors dealings