Half Yearly Report

RNS Number : 3697T

Edenville Energy PLC

28 September 2010

 



28 September 2010

EDENVILLE ENERGY PLC ("Edenville" or the "Company") (AIM:EDL),

Interim Results for the Six Months Ended 30 June 2010

Edenville Energy plc, the African coal exploration and development company, today announces its Unaudited Interim Results for the six months ended 30 June 2010.

Highlights

·    £8.4 million net assets

·    £119,882 loss

·    Strategic decision to develop potential open pit, coal projects in Southern Africa

·   Acquisition of Edenville International Limited ("Edenville") securing six prospecting licences in Southern Tanzania covering prospective coal areas

·    Geographical focus on Mtwara Development Corridor, Southern Tanzania

-     An economic development zone with mandate to promote new energy    production

·    Mark Pryor appointed as Managing Director

·    Sally Schofield appointed as Non-Executive Director

·    Post period Events

o Securing of Namwele, Mkomolo and Muze coal deposits in the Rukwa Coalfield , Southern Tanzania

-     Namwele previously a small-scale producing coal mine

-     Typically shallow, near surface, shallow dipping coal mineralisation

-     66 Primary Mining Licences (6.58km², total area)

o Exploration and drill target delineation work underway

o Scout drilling expected to commence at Namwele during Q4 2010

Simon Rollason, Chairman of Edenville, commented that "2010 has seen Edenville establish a focussed portfolio of coal assets within Southern Tanzania. The new Board's objective is to efficiently evaluate and define a shallow coal resource during 2011 and develop open pits mines for potential domestic thermal demand and export markets."

Contact:

Edenville Energy plc
Simon Rollason - Chairman Rakesh Patel - Finance Director www.edenville-energy.com	[phone]
ZAI Corporate Finance Ltd
Ray Zimmerman / John Depasquale	[phone]
Threadneedle Communications
Laurence Read	[phone]

I am pleased to report on the interim results of the Group for the six months ended 30^th June 2010.

The Company made a loss for the six month period of £119,882 and had net assets at that date of £8.4 million.

Since October 2008, the Company's strategy has been investing, participating in joint ventures or acquiring one or more companies or businesses in the natural resource sector in Africa (and other geographical areas where considered appropriate). In June 2009, the Company set out its intention to identify and pursue a suitable acquisition target which would be fitting to the overall strategy of developing the Company into a successful natural resources exploration business.

In March 2010, the Company successfully completed the acquisition of Edenville International Limited ("Edenville"), which, through its 99.5 per cent. owned subsidiary, Edenville Tanzania, owned six prospecting licences in Tanzania with a particular focus on coal and uranium. The aggregate consideration for this acquisition was approximately £7 million which was satisfied by the issue and allotment of an aggregate of 1,393,941,536 Ordinary Shares. The Company also raised £1million by way of a placing of 200 million ordinary shares of 0.02 pence at 0.5 pence per share in order to meet the costs of the acquisition and to provide additional working capital for the Enlarged Group. At the same time the company changed its name to Edenville Energy plc.

The principal reason for the acquisition was it allowed for the implementation of the Company's strategy as set out above, while providing access to a region displaying very viable prospects in coal, some of which has the potential to contain uranium. The Government of Tanzania actively encouraging energy resources exploration and is seeking development of domestic power industry. The shift towards coal exploration and development is based on the steady global growth in demand for energy in the foreseeable future, particularly with increasing demand from China and India, and reflects a move away from the more niche gemstone markets to the broader appeal of energy commodities.

The board has been strengthened with the appointment of Mark Pryor as Managing Director and Sally Schofield as a Non-Executive Director.

Mark is an Independent Geological Consultant working with private mining and exploration groups, based out of the United Kingdom with over 25 years of management experience in advanced stage exploration and mine development projects worldwide. He is a 'Qualified Person' as defined by the Securities Commission and regularly submits Independent Technical Reports for companies wishing to list on the Stock Exchange as well as Independent Technical Reports and press releases for quoted companies. Sally's career has seen her work in commercial, technical and operational capacities in geographically and politically diverse regions including Kazakhstan, Albania, Central America, Brazil and Chile.  Her business skills have been recognised by several external parties, including Management Today, Courvoisier Future 500 and HM The Queen.

In August 2010, the company announced the successful completion of an agreement to acquire the majority interest in multiple licences covering the Namwele, Mkomolo and Muze coal deposits of the Rukwa Coalfield in southern Tanzania. Edenville has entered into an Acquisition and Option Agreement with Upendo Group Ltd, a Tanzanian registered company, whereby Edenville has acquired an initial 70% interest in 2 Prospecting Licences (PL), covering a total of 232.94km2, and 66 Primary Mining Licences (PML). Edenville has additionally acquired an undivided 100% interest in a Prospecting Licence - Reconnaissance (PLR) covering an area of 98.95km2, which surrounds the Namwele and Mkomolo PML's. The 66 Primary Mining Licences cover a combined total area of 6.58km2, and are located in three clusters covering the known occurrences of outcropping coal at Namwele, Mkomolo and Muze.

It is the intention of the Board that going forward we maintain a low cost base with the bulk of any funding being used for the projects on the ground.

Simon Rollason

Chairman

28 September 2010

consolidated STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2010

		Six months ended 30 June 10	Six months ended 30 June 09	Year ended 31 Dec 09
		Unaudited	Unaudited	Audited
	Note	£	£	£
Gross profit		-	-	-
Administrative expenses		(119,882)	(94,945)	(182,481)
Operating loss		(119,882)	(94,945)	(182,481)
Finance Costs		-	-	(2)
Loss before taxation		(119,882)	(94,945)	(182,483)
Tax		-	-	-
Loss for the period		(119,882)	(94,945)	(182,483)
Other comprehensive income:
Exchange differences on re-translation of foreign operations		(28,803)	-	-
Total comprehensive loss for the period		(148,685)	(94,945)	(182,483)
Attributable to:
Equity holders of the Company		(148,631)	(94,945)	(182,483)
Minority interests		(54)	-	-
		(148,685)	(94,945)	(182,483)
Loss per share	2
- basic and diluted (pence)		(0.005)	(0.007)	(0.013)

The loss for the period arises from the Group's continuing operations.

consolidated BALANCE SHEET

as at 30 june 2010

		As at 30 June 10	As at 30 June 09	As at 31 Dec 09
		Unaudited	Unaudited	Audited
	Note	£	£	£
Non-current assets
Tangible fixed assets		33,542	-	-
Intangible exploration and evaluation assets	4	7,064,352	19,082	19,082
Equity investments - available for sale		446,428	446,428	446,428
		7,544,322	465,510	465,510
Current assets
Trade and other receivables		47,385	20,076	66,134
Cash and cash equivalents		881,590	394,045	241,061
		928,975	414,121	307,195
Current liabilities
Trade and other payables		46,054	40,901	21,514
Current assets less current liabilities		882,921	373,220	285,681
Total assets less current assets and net assets		8,427,243	838,830	751,191
Capital and reserves
Called-up share capital	6	648,921	330,133	330,133
Share premium account		8,229,439	730,969	730,969
Foreign currency translation reserve		(28,803)	-	-
Share based payments reserve		40,893	33,441	33,441
Retained earnings		(463,180)	(255,813)	(343,352)
Minority interest		(27)	-	-
Total equity		8,427,243	838,730	751,191

consolidated statement of changes in equity

FOR THE SIX MONTHS ENDED 30 JUNE 2010

	Share capital	Share premium	Share based payments reserve	Foreign currency translation reserve	Retained Earnings	Minority interests	Total
	£	£	£	£	£	£	£
Balance at 1 January 2010	330,133	730,969	33,441	-	(343,352)	-	751,191
Issue of share capital	318,788	7,650,920	-	-	-	-	7,969,708
Cost of shares issued	-	(152,450)	-	-	-	-	(152,450)
Other reserves	-	-	7,452	-	-	27	7,479
Total comprehensive loss for the period	-	-	-	(28,803)	(119,828)	(54)	(148,685)
Balance at 30 June 2010	648,921	8,229,439	40,893	(28,803)	(463,180)	(27)	8,427,243
Balance at 1 January 2009	315,847	301,327	33,441	-	(160,868)	-	489,747
Total comprehensive loss for the period	-	-	-	-	(94,945)	-	(94,945)
Issue of shares capital	14,286	432,142	-	-	-	-	446,428
Cost of share issued	-	(2,500)	-	-	-	-	(2,500)
Balance at 30 June 2009	330,133	730,969	33,441	-	(255,813)	-	(838,730)
Balance at 1 January 2008	315,847	301,327	33,441	-	(160,869)	-	489,746
Issue of share capital	14,286	432,142	-	-	-	-	446,428
Cost of shares issued	-	(2,500)	-	-	-	-	(2,500)
Total comprehensive loss for the period	-	-	-	-	(182,483)	-	(182,483)
Balance at 31 December 2009	330,133	730,969	33,441	-	(343,352)	-	751,191

consolidated CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2010

	Six months ended 30 June 10	Six months ended 30 June 09	Year  ended 31 Dec 09
	Unaudited	Unaudited	Unaudited
	£	£	£
Cash flows from operating activities
Operating loss	(119,882)	(94,945)	(182,481)
Depreciation	1,458	-	-
Share based payments	7,452	-	-
Foreign exchange loss	165
Decrease/ (increase) in trade and other receivables	18,777	(3,687)	(49,744)
(Decrease)/ increase in trade and other payables	(41,076)	22,838	3,449
Net cash from operating activities	(133,106)	(75,794)	(228,776)
Investing activities
Purchase of subsidiary, net of cash acquired	(9,103)	-	-
Purchase of intangible assets	(29,812)	-	-
Purchase of property, plant and equipment	(35,000)	-	-
Purchase of investments - fair value through income statement	-	(19,082)	(19,082)
Net cash used in investing activities	(73,915)	(19,082)	(19,082)
Financing activities
Finance costs	-	-	(2)
Proceeds on issue of shares	1,000,000	-	-
Share issue costs	(152,450)	(2,500)	(2,500)
Net cash generated/(used) in from financing activities	847,550	(2,500)	(2,502)
Net increase/(decrease) in cash and cash equivalents	640,529	(97,376)	(250,360)
Cash and cash equivalents at beginning of year	241,061	491,421	491,421
Cash and cash equivalents at end of year	881,590	394,045	241,061

NOTES TO THE INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2010

1.       Financial Information and basis of preparation

The interim financial statements of Edenville Energy Plc are unaudited consolidated financial statements for the six months ended 30 June 2010 which have been prepared in accordance with IFRSs as adopted by the European Union.  They include unaudited comparatives for the six months ended 30 June 2009 together with audited comparatives for the year ended 31 December 2009.

The company changed its name from Gemstones of Africa Plc to Edenville Energy plc on 26 March 2010.

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2009, as described in those financial statements.

The interim financial statements do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The statutory accounts for the year ended 31 December 2009 have been reported on by the company's auditors and have been filed with the Registrar of Companies.  The report of the auditors was unqualified and did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2010:

·     IFRS 3 (revised) Business Combinations and consequential changes to IAS 27 Consolidated and separate financial statements, IAS 28 Investments in associates and IAS 31 Interests in joint ventures

·     IFRIC 17 Distribution of non-cash assets to owners

·     IFRIC 18 Transfer of assets from customers

The adoption of these standards has not had a material effect on the financial statements of the group.

2.       Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

	30 June 10	30 June 09	31 December 09
	£	£	£
Loss after taxation	(119,882)	(94,945)	(182,483)
Weighted average number of shares	2,212,928,071	1,365,922,594	1,380,047,211
Loss per share (pence)	(0.005)	(0.007)	(0.013)

3.       Dividends

No dividends are proposed for the six months ended 30 June 2010 (six months ended 30 June 2009 £nil: year ended 31 December 2009 £nil).

4.       Intangible exploration and evaluation assets

	As at	As at	As at
	30 June 10	30 June 09	31 December 09
	£	£	£
Cost and book value at start of period	19,082	-	-
Prospecting licences acquired on acquisition of subsidiary	7,044,399	-	-
Additions	29,812	19,082	19,082
Foreign exchange differences	(28,941)	-	-
Cost and book value at end of period	7,064,352	19,082	19,082

During the period ended 30 June 2010, the company acquired six Tanzanian prospecting licences through the acquisition of Edenville International (Tanzania) Limited.  The value of these intangible exploration assets acquired represents the fair value of the consideration paid by Edenville Energy plc at the time of the acquisition of Edenville International Limited, the details of which are provided in note 5 below.

The outcome of ongoing exploration and evaluation, and therefore whether the carrying value of exploration and evaluation assets will ultimately be recovered, is inherently uncertain.  The directors have assessed the value of exploration and evaluation expenditure carried as intangible assets.  In their opinion there has been no impairment loss to intangible exploration and evaluation assets in the period.

5.       Acquisition of subsidiary

On 29 March 2010, the company acquired 100% of the issued share capital of Edenville International Limited, a company incorporated in the Republic of the Seychelles.  Edenville International Limited owns 99.5% of the issued share capital of Edenville International (Tanzania) Limited, a company incorporated in the United Republic of Tanzania.

Consideration for the acquisition was satisfied by the issue of 1,393,941,536 ordinary shares of 0.02p at a price of 0.5 pence per share.

The transaction has been accounted for by the purchase method of accounting. Using an exchange rate of 1.49 USD/GBP being the rate prevailing at the date of acquisition, the book values of the net assets acquired amounted to £2,575,275 but the directors have revalued these to the estimated fair values as set out below:

	Book value	Fair value
	£	£
Intangible exploration and evaluation assets	2,589,959	7,044,399
Other receivables	28	28
Cash and cash equivalents	50,904	50,904
Other payables	(65,616)	(65,616)
Net assets acquired	2,575,275	7,029,715
Purchase consideration:
Fair value of shares issued		6,969,708
Direct costs related to the acquisition		60,007
Total purchase consideration		7,029,715

The estimated fair value of the net assets acquired is equal to the consideration paid and consequently there is no goodwill on acquisition.

6.       Share capital

		No.	£
30 June 2010
Allotted, called up and fully paid
Ordinary shares of 0.02p each		2,987,883,072	597,577
Deferred shares of 0.08p each		64,179,932	51,344
			648,921
30 June 2009
Allotted, called up and fully paid
Ordinary shares of 0.02p each		1,393,941,536	278,789
Deferred shares of 0.08p each		64,179,932	51,344
			330,133
31 December 2009
Allotted, called up and fully paid
Ordinary shares of 0.02p each		1,393,941,536	278,789
Deferred shares of 0.08p each		64,179,932	51,344
			330,133

On 29 March 2010 the company issued 1,393,941,536 ordinary shares of 0.02p at 0.5p per share as consideration for the acquisition of Edenville International Limited.

On 29 March 2010 the company issued 200,000,000 ordinary shares of 0.02p for cash at 0.5p per share.

7.       Distribution on interim report to shareholders

The interim report will be available for inspection by the public at the registered office of the company during normal business hours on any weekday and from the Company's website

http://www.edenville-energy.com/. Further copies are available on request.

 

END

 

 

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