Half Yearly Report

RNS Number : 6933N
Sunrise Resources Plc
20 May 2015
 



20 May 2015
 
SUNRISE RESOURCES PLC

(the "Company")

 

HALF-YEARLY REPORT

 

Sunrise Resources plc, the AIM-traded diversified mineral exploration and development company, announces its unaudited interim results for the six months ended 31 March 2015.

 

Operational Highlights

 

Nevada, USA

 

County Line Diatomite Project:

 

·      Project expanded - now over 8 square km of diatomite under claim.

·      Independent testing produces high-value filtration grade flux calcined diatomite from surface samples.

·      Deeper sampling scheduled for summer 2015 and a review of commercial options for future development is ongoing.

 

Bay State Silver Project:

 

·      Lease agreement signed on two additional claims in March 2015.

·      Further positive sampling results focused on Chihuahua Main, Splay and Lincoln vein systems:

3.5 m width from stockwork mineralisation between Chihuahua Main Vein and Splay Vein average 403 g/t silver (11.8 oz/t) & 1.5m grading 6.3% zinc, 6.6% lead, 0.3% copper, 0.16% tungsten and 579 g/t silver.

·      Drill permitting initiated at Bay State Silver Project.

 

Junction Gold Project:

 

·      New zone of gold mineralisation discovered - samples up to 16 g/t gold in initial sampling round.

 

Garfield Project:

 

·      Soil sampling completed to follow up copper-gold-silver float sample.

 

Western Australia

 

Planned Native Title and drilling programmes on the Cue Diamond Project and Baker's Gold Projects delayed by heavy rains and floods. Activity gearing up in second half of financial year.

 

 

Results Summary

 

·      Group loss for the six month period of £151,540 (six months to 31 March 2014: £156,479) comprising:

Administration costs of £131,623 (which includes non-cash share based payments of £6,058).

Uncapitalised exploration costs totalling £20,648.

Interest income of £731.

 

Funding

 

·      Placing of 70,000,000 shares on 19 January 2015 and 105,000,000 shares on 20 April 2015 together raising £420,000 before expenses.


 

 

Further information:

 

Sunrise Resources plc

Patrick Cheetham, Executive Chairman  

Tel:

+44 (0) 845 868 4590

 

 

 

Northland Capital Partners Limited

Edward Hutton/David Hignell

John Howes/Mark Treharne (Broking)

Tel:

+44 (0)20 7382 1100

 

 

Chairman's Statement

 

I am pleased to report that in the first half of this year we have maintained last year's level of exploration activity supported by modest fundraising and have focused on our projects in Nevada, USA and Western Australia.

 

The generation of new projects is taking place mainly in Nevada due to the speed at which secure tenure can be acquired and drilling programmes can be permitted. This contrasts with the typical 12 month time frame for licences to be granted in Western Australia and where, subsequently, Native Title clearances for drilling can be lengthy and expensive.

 

At our County Line Diatomite Project in Nevada we hold a large claim block covering over 8 sq. km. and a large surface occurrence of diatomite, a valuable, silica-rich, industrial raw material. Two programmes of surface sampling and testwork by an independent company have confirmed the suitability of tested samples for the production of high value markets in the filtration of beer, wine and other liquids and we are now moving to deeper sampling and a preliminary evaluation of production options.

 

The County Line Project has the potential to meet one of our strategic objectives which is to bring into production, at modest capital cost, a project that will sustain the costs of our broader objective which is the discovery of valuable mineral deposits that can be developed to create additional shareholder value.

 

However, we are clear in our resolve that the aim is not 'production at any cost' as it is well established  that the majority of companies that attempt the transition from exploration to production fail in this endeavour and there are many recent examples of ill-conceived mining operations which are now in administration or bankrupt.

 

At our Bay State Silver Project in Nevada we have been able to progress the project quickly to the drill permitting stage. Additionally, we have reported developments on a number of other new projects in Nevada with interesting gold discoveries being made on our early stage Junction and Garfield projects.

 

Our work in Western Australia has been hampered by recent heavy rains and floods but we expect to gear up work in the second half of the year at both the Cue Diamond Project and the Baker's Gold Project as we prepare these two projects for further drilling.  An additional soil sampling programme has just been completed at the Baker's Gold Project and a reinterpretation of airborne magnetic data has been commissioned at the Cue Diamond Project.

 

There is of course a direct link between the level of our exploration activity and the state of the mining equity markets that fund our activity. These markets continue to bump along at the bottom of this current cycle and, whilst the fundraising environment is more permissive than in recent times, our share price is regrettably low. Although this is a problem we share with most of our peers, it makes fundraising painfully dilutive. We recognise the benefit of bringing partners into our projects but also acknowledge that potential partners in the resource industry are similarly constrained and so progress towards this objective can be slow.

 

It is therefore a difficult balancing act between preserving cash, minimising dilution and progressing our exploration and development plans.  Sunrise Resources plc is first and foremost an exploration company and we would like to thank those fellow shareholders who, understanding this, are along for our journey and share a common position with the Directors who continue to take their remuneration in shares in the Company.

 

 

Patrick Cheetham

Executive Chairman

20 May 2015

 

 

Consolidated Income Statement

for the six months to 31 March 2015

 

 

 

Six months

to 31 March

2015

Unaudited


 

Six months

to 31 March

2014

Unaudited

 

 

Twelve months to

30 September

2014

Audited

 

£

 

£

£

 

 

 

 

 

 

Exploration costs

20,648

 

17,021

 

52,351

 

 

 

 

 

 

Impairment of deferred exploration cost

-

 

-

 

281,282

 

 

 

 

 

 

Administrative expenses

131,623

 

140,112

 

368,517

 

 

 

 

 

 

Operating loss

(152,271)

 

(157,133)

 

(702,150)

 

 

 

 

 

 

Interest receivable

731

 

654

 

1,855

 

 

 

 

 

 

 

 

 

 

 

 

Loss on ordinary activities before taxation

(151,540)

 

(156,479)

 

(700,295)

 

 

 

 

 

 

Tax on loss on ordinary activities

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Loss on ordinary activities after taxation

(151,540)

 

(156,479)

 

(700,295)

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period attributable to equity

holders of the parent

 

(151,540)

 

 

(156,479)

 

 

(700,295)

 

 

 

 

 

 

Loss per share - basic and fully diluted

(pence) (note 2)

(0.03)

 

(0.04)

 

(0.17)

 

 

Consolidated Statement of Comprehensive Income

for the six months to 31 March 2015

 

 

 

 

 

 

Six months

to 31 March

2015

Unaudited


 

Six months

to 31 March

2014

Unaudited

 


 

Twelve months

to 30 September

2014

Audited

 

£

 

£

 

£

 

 

 

 

 

 

Loss for the period

(151,540)

 

(156,479)

 

(700,295)

 

 

 

 

 

 

Items that could be reclassified subsequently to the income statement:

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation differences on foreign currency net investments in subsidiaries

 

 

(9,637)

 

 

 

(11,406)

 

 

 

(28,949)

 
Total comprehensive loss for the period attributable to equity holders of the parent

 

 

 

(161,177)

 

 

 

 

(167,885)

 

 

 

 

(729,244)

 


 

Consolidated Statement of Financial Position

as at 31 March 2015

 

 

 

As at

31 March

2015

Unaudited


 

As at

31 March

2014

Unaudited

 


 

As at

30 September

2014

Audited

 

£

 

£

 

£

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

579,321

 

654,266

 

513,431

 

 

 

 

 

 

 

579,321

 

654,266

 

513,431

 

 

 

 

 

 

Current assets

 

 

 

 

 

Receivables

19,597

 

39,229

 

23,683

Cash and cash equivalents

326,214

 

653,742

 

354,350

 

 

 

 

 

 

 

345,811

 

692,971

 

378,033

 

 

 

 

 

 

Current Liabilities

Trade and other payables

 

(87,589)

 

 

(128,346)

 

 

(118,014)

 

 

 

 

 

 

Net current assets

258,222

 

564,625

 

260,019

 

 

 

 

 

 

Net assets

837,543

 

1,218,891

 

773,450

 

 

 

 

 

 

Equity

 

 

 

 

 

Called up share capital

581,615

 

501,617

 

503,326

Share premium account

4,661,609

 

4,515,131

 

4,520,686

Share option reserve

365,486

 

398,177

 

404,979

Foreign currency reserve

(83,389)

 

(56,209)

 

(73,752)

Accumulated losses

(4,687,778)

 

(4,139,825)

 

(4,581,789)

 

 

 

 

 

 

Equity attributable to owners of the parent

 

837,543

 

 

1,218,891

 

 

773,450

 

 

 

Consolidated Statement of Changes in Equity

 

 

 

 

 

Share

Capital

 

Share

Premium

Account

 

Share

Option

reserve

 

Foreign

Currency

Reserve

 

 

Accumulated

Losses

 

 

 

Total

 

£

 

£

£

£

£

£

At 30 September 2013

375,996

4,107,417

378,106

(44,803)

(3,983,346)

833,370

Loss for the period

-

-

-

-

(156,479)

(156,479)

Exchange differences

-

-

-

(11,406)

-

(11,406)

 

 

 

 

 

 

 

Total comprehensive

 

 

 

 

 

 

loss for the period

-

-

-

(11,406)

(156,479)

(167,885)

Share issue

125,621

407,714

-

-

-

533,335

Share based payments

-

-

20,071

-

-

20,071

 

 

 

 

 

 

 

At 31 March 2014

501,617

4,515,131

398,177

(56,209)

(4,139,825)

1,218,891

Loss for the period

-

-

-

-

(543,816)

(543,816)

Exchange differences

-

-

-

(17,543)

-

(17,543)

 

 

 

 

 

 

 

Total comprehensive

 

 

 

 

 

 

loss for the period

-

-

-

(17,543)

(543,816)

(561,359)

Share issues

1,709

5,555

-

-

-

7,264

Share based payments

-

-

6,802

-

101,852

108,654

 

 

 

 

 

 

 

At 30 September 2014

503,326

4,520,686

404,979

(73,752)

(4,581,789)

773,450

Loss for the period

-

-

-

-

(151,540)

(151,540)

Exchange differences

-

-

-

(9,637)

-

(9,637)

 

 

 

 

 

 

 

Total comprehensive

 

 

 

 

 

 

loss for the period

-

-

-

(9,637)

(151,540)

(161,177)

Share issues

78,289

140,923

 

-

-

219,212

Share based payments

-

-

(39,493)

-

45,551

6,058

 

 

 

 

 

 

 

At 31 March 2015

581,615

4,661,609

365,486

(83,389)

(4,687,778)

837,543

 

 

 

 

 

 

 


Consolidated Statement of Cash Flows

for the six months to 31 March 2015

 

 

Six months

to 31 March

2015

Unaudited


Six months

to 31 March

2014

Unaudited

 


Twelve months

to 30 September

2014

Audited

 

£

 

£

 

£

Operating activity

 

 

 

 

 

 

Operating loss

(152,271)

 

(157,133)

 

(702,150)

Share based payment charge

6,058

 

20,071

 

128,725

Shares issued in lieu of net wages

9,015

 

9,348

 

16,612

Impairment charge

-

 

-

 

281,282

(Increase)/decrease in accounts receivable

4,086

 

(13,500)

 

2,046

Increase/(decrease) in accounts payable

(30,425)

 

49,670

 

39,338

 

 

 

 

 

 

Net cash outflow from operating activity

(163,537)

 

(91,544)

 

(234,147)

 

 

 

 

 

 

Investing activity

 

 

 

 

 

 

 

 

 

 

 

Interest received

731

 

654

 

1,855

Purchase of intangible fixed assets

(74,570)

 

(99,147)

 

(248,943)

 

 

 

 

 

 

Net cash outflow from investing activity

(73,839)

 

(98,493)

 

(247,088)

 

 

 

 

 

 

Financing activity

 

 

 

 

 

 

 

 

 

 

 

Issue of share capital (net of expenses)

210,198

 

523,987

 

523,987

 

 

 

 

 

 

Net cash inflow from financing activity

210,198

 

523,987

 

523,987

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

(27,178)

 

333,950

 

42,752

 

 

 

 

 

 

Cash and cash equivalents at start of period

354,350

 

320,353

 

320,353

Exchange differences

(958)

 

(561)

 

(8,755)

 

 

 

 

 

 

Cash and cash equivalents at end of period

326,214

 

653,742

 

354,350

 



Notes to the Interim Statement

 

1.       Basis of preparation

 

The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 30 September 2015 which are not expected to be significantly different to those set out in Note 1 of the Group's audited financial statements for the year ended 30 September 2014.  These are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 30 September 2015 or are expected to be adopted and effective at 30 September 2015. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information.

 

The financial information in this statement relating to the six months ended 31 March 2015 and the six months ended 31 March 2014 has neither been audited nor reviewed by the Auditors pursuant to guidance issued by the Auditing Practices Board. The financial information presented for the year ended 30 September 2014 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 30 September 2014 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for the year ended 30 September 2014 was unqualified, although did draw attention to  matters by way of emphasis in relation to going concern, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

          The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. These projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company's and Group's planned discretionary project expenditures and to maintain the Company and Group as a going concern. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

 

 

2.      Loss per share

 

          Loss per share has been calculated on the attributable loss for the period and the weighted average number of shares in issue during the period.

 

 

Six months

 to 31 March

2015

Unaudited

 

 

Six months

to 31 March

2014

Unaudited

 

 

Twelve months

to 30 September

2014

Audited

 

 


 

 

Loss for the period (£)

(151,540)

(156,479)

(700,295)

 

Weighted average shares in issue (No.)

 

535,598,816

 

385,136,199

 

405,273,899

 

 

 

 

Basic and fully diluted loss per share (pence)

 

(0.03)

 

(0.04)

 

(0.17)

 

 

 

 

 

The loss attributable to ordinary shareholders and weighted average number of ordinary shares  for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share.  This is because the exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS33.

 

 

3.      Share capital

 

During the six months to 31 March 2015 the following share issues took place:

 

An issue of 5,011,388 ordinary shares of 0.1p ("Ordinary Shares") at 0.425p per share to Tertiary Minerals plc (a Related Party), for a total consideration of £21,298 (6 November 2014) by way of settlement of an invoice issued to Sunrise Resources plc for management fees.

 

An issue of 70,000,000 Ordinary Shares at 0.3p per share, by way of placing, for a total consideration of £188,900 net of expenses (19 January 2015).

 

An issue of 3,278,029 0.1p Ordinary Shares at 0.275p per share to the three directors for a total consideration of £9,015 (5 February 2015), in satisfaction of directors' fees.

 

 

4.       Post Balance Sheet Event

 

On 20 April 2015 Sunrise Resources Plc issued a further 105,000,000 Ordinary Shares at 0.2p per share by way of placing, for a total consideration of £199,950 net of expenses.

 

 

5.       Interim report

 

Copies of this interim report are available from Sunrise Resources plc, Silk Point, Queens Avenue, Macclesfield, Cheshire, SK10 2BB, United Kingdom. It is also available on the Company's website at www.sunriseresourcesplc.com.


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