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Ortac Resources Ltd (OTC)

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Wednesday 22 December, 2010

Ortac Resources Ltd

Interim Results

RNS Number : 3934Y
Ortac Resources Limited
22 December 2010
 



Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration

22 December 2010

Ortac Resources Limited ('Ortac' or 'the Company')

Interim Results

 

Ortac Resources Limited, the AIM listed exploration and development company focussed on the development of precious metal projects in Europe, is pleased to announce its results for the six months ended 30 September 2010.

 

Chairman's Statement

 

This has been a transformational period for the Company following our acquisition of Ortac Resources PLC, which saw your Company emerge with a new name, Ortac Resources Limited, and a new strategy, focussing on gold exploration and development in Europe.

 

The acquisition equipped the Company with nine licences totalling c.200sq km in Slovakia at various stages of development, however we are focussed on one particular project initially, the Kremnica Gold Project ('Kremnica') which has a current JORC compliant resource of 760,000oz of gold ('Au') equivalent and we intend to fast track this towards bankable feasibility study.  The first step along this development process will be the publication of an updated resource statement for which we have appointed Snowden Mining Industry Consultants, which we expect to be able to conclude in early January 2011 to be followed by a preliminary scoping study. There remains strong potential for future resource delineation as the current resource at Kremnica has only been calculated along 1.1km of the 6.5km known strike length, which is open in both directions and at depth, and there are multiple targets present on the Kremnica licence area, so we expect that we can upgrade the resource considerably following additional drilling campaigns and resource re-modelling.  

 

In tandem with the development of our Kremnica project and exploratory work on the associated exploration licences, we are also evaluating the potential of our exploration licenses in Eastern Slovakia. The improvement in the precious metal market this year leads us to believe that there should be value to be extracted from these licenses. In addition some research is being conducted on other opportunities in the region to add to its resources, but the Company is mindful of the risks of diluting its strong position in the Central Slovakian Volcanic Field where past and present production and resources exceed 9 million oz Au. 

 

In conjunction with the assets that the Company acquired during the period, several of the key board members from the acquired company joined the Board of Ortac to ensure a seamless transfer of the assets and to facilitate the accelerated development of the Company's new portfolio of interests.  This restructuring process provided the Company with a strong technical, operational and corporate team to manage development on the ground in Slovakia, and a highly-experienced board with extensive knowledge of resource development and the Central European mining industry.  In addition to my own appointment as Chairman, Vassilios Carellas, Dorian Nicol and David Paxton were appointed as Chief Executive Officer and Non-executive Directors respectively, joining Charles Wood on the new Board.

 

In terms of the Company's non-European portfolio, Ortac retains a 77% interest in the Rio Paranaiba Iron Ore Project in Brazil, through our subsidiary company, Paranaiba Minerals Ltd.  The Board is currently considering a preliminary exploration programme for early 2011 as a first step in seeking a third party funder and/or development partner.

 

Ortac also retains 500,000 shares in Vatukoula Gold Mines plc ('Vatukoula'), which owns 100% of the Vatukoula Gold Mine in Fiji, a producing gold mine which contains 680,000 ounces of Au Reserves and 4.3 million ounces of Au Resources. This is following the sale of Vatukoula shares after the reporting period end, raising some £960,000 of additional working capital. The Board continues to closely follow Vatukoula's development and remains committed to extracting maximum value out of this investment for the benefit of shareholders. The current value of these shares is £1 million.

 

Financial Overview 

 

For the six months ended 30 September 2010, Ortac is reporting an operating loss of US$1.760m (2009: US$0.2m) before crediting negative goodwill arising on the acquisition of Ortac Resources plc of US$1.3m (2009: Nil) and after a charge in respect of share based payments of US$1.4 million (2009: Nil).  The retained loss for the financial period was US$477,000 (2009: US$148,000) and the loss per share was US0.05c (2009: US0.02c).

 

Outlook

 

Following the acquisition of Ortac Resources Plc, we have successfully realigned our strategy to focus on precious metal exploration and development in Central Europe.  With one flagship project already secured and approaching its next phase of development, I believe that Ortac has the foundation for a portfolio of projects of various stages of development across this highly prospective region.

 

I look forward to announcing the updated resource at our Kremnica project in the coming weeks, and also the publication of a preliminary scoping study in Q1 2011 in addition to keeping shareholders abreast of our other operational and corporate developments.

 

I would also like to take this opportunity to thank our valued shareholders for their support during the period, in addition to my fellow board members and the rest of the Ortac team. 

 

Anthony Balme

Chairman

21 December 2010

 

**ENDS**

  

For further information please visit www.ortacresources.com or contact:

Vassilios Carellas

Ortac Resources Ltd

Tel: +44 (0) 20 7440 0646

Charles Wood

Ortac Resources Ltd

Tel: +44 (0) 20 7440 0646

Roland Cornish

Beaumont Cornish Limited

Tel: +44 (0) 20 7628 3396

Rosalind Hill Abrahams

Beaumont Cornish Limited

Tel: +44 (0) 20 7628 3396

Jeremy King

Optiva Securities Ltd

Tel: +44 (0) 20 3137 1904

Jason Robertson

Optiva Securities Ltd

Tel: +44 (0) 20 3137 1906

Susie Geliher

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

Lottie Brocklehurst

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

 

 

Consolidated Financial Statements

 

GROUP INCOME STATEMENT

FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2010

 


Notes

Six months ended  30 September 2010

(Unaudited)

Six months ended
31 December 2009 (Unaudited)

Nine months ended
31 March 2010

(Audited)



$'000

$'000

$'000






Administrative expenses


(332)

(198)

(453)

Share based payments


(1,428)

-

(425)

Group operating loss


(1,760)

 (198)

(878)






Negative goodwill written off


1,283

-

-

Profit  on sale of investments


-

50

71

Loss before taxation


(477)

(148)

(807)






Income tax expense


 -

 -

-

Loss for the financial period

2

(477)

 (148)

(807)






Retained loss for the period attributable to:





Equity holders of the parent company


(477)

(148)

(807)






Loss per share  (US cents)





Basic

3

(0.05)

(0.02)

(0.14)

Diluted

3

(0.05)

(0.02)

(0.14)

 

GROUP STATEMENT OF COMPREHENSIVE INCOME                       

FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2010

 

 

Notes

Six months ended
30 September 2010

Six months ended
31 December 2009

Nine months ended
31 March 2010

 

 

(Unaudited)

(Unaudited)

Audited

 

 

$' 000

$' 000

$' 000

Loss for the period

 

(477)

(148)

(807)


 




Currency translation differences

 

522

(83)

(255)

Gain on revaluation of available for sale investments

 

569

280

1,052)

Total comprehensive income

 

614

49

(10)

 

 




Attributable to:





Equity holders of the parent company


614

49

(10)

 

 

GROUP BALANCE SHEET

AS AT 30 SEPTEMBER 2010

 


Notes

As at

30 September 2010

As at

31 December 2009

As at

31 March 2010



(Unaudited)

(Unaudited)

(Audited)








$'000

$'000

$'000

Assets





Non-current assets





Property, plant and equipment

6

417

-

-

Intangible assets

7

15,686

1,029

970

Total non-current assets


16,103

1,029

970






Current assets





Inventories


10

-

-

Trade and other receivables


457

-

112

Available for sale investments


2,392

1,130

1,737

Cash 


3,296

123

19

Total current assets


6,155

1,253

1,868

Total assets


22,258

2,282

2,838






Liabilities





Current liabilities





Trade and other payables


(526)

-

(190)

Total liabilities


(526 )

-

(190)

Net assets


21,732

2,282

2,648






Shareholders' equity





Called up share capital

4

-

-

-

Share premium


34,653

17,441

16,425

Share based payment reserve


2,209

368

744

Available for sale investment reserve


1,058

(268)

466

Foreign exchange reserve


2,013

1,806

2,737

Retained earnings


(18,201)

(17,065)

(17,724)

Equity attributable  to equity holders of the parent


21,732

2,282

2,648

 

 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2010

 


Called up share capital

Share premium reserve

Available for sale investment reserve

Foreign currency translation reserve

Share based payment reserve

Retained earnings

Total equity

Group

$ 000's

$ 000's

$ 000's

$ 000's

$ 000's

$ 000's

$ 000's

As at 1 Jul 2009

-

18,024

(566)

1,311

381

(16,917)

2,233

Loss for the period

-

-

-

-

-

(807)

(807)

Gain  on market value of available for sale investments

-

-

1,052

-

-

-

1,052

Currency translation differences

-

(1,599)

(20)

1,426

(62)

-

(255)

Total comprehensive income

-

(1,599)

1,032

1,426

(62)

(807)

(10)

Share based payments

-

-

-

-

425

-

425

As at 31 March 2010

-

16,425

466

2,737

744

(17,724)

2,648









Loss for the period

-  

-  

-  

-  

-  

(477)

(477)

Gain  on market value of available for sale investments

-  

-  

569

-  

-  

-  

569

Currency translation differences

-  

1,186

23

(724)

37

-  

522

Total comprehensive income

-  

1,186

592

(724)

37

(477)

614

Share capital issued

-  

17,800

-  

-  

-  

-  

17,800

Cost of share issue

-  

(758)

-  

-  

-  

-  

(758)

Share based payments


-  

-  

-  

1,428

-  

1,428

As at 30 September 2010

-  

34,653

1,058

2,013

2,209

(18,201)

21,732

 

 

GROUP CASH FLOW STATEMENT

FOR THE INTERIM PERIOD ENDED 30 SEPTEMBER 2010

 



Six months to

30 September 2010

Six months to

31 December 2009

Nine months to

31 March 2010



(Unaudited)

(Unaudited)

(Audited)








$'000

$'000

$'000






Cash flows from operating activities










Operating loss


(1,760)

(198)

(878)

(Increase)/decrease in trade and other receivables


(336)

111

(1)

Increase in inventories


(10)

-

-

Increase/(decrease) in trade and other payables


326

(57)

133

Foreign exchange translation


-

-

(2)

Share based payments


1,428

-

425)

Impairment charge


-

-

-

Depreciation


-

-

-

Net cash outflow from operating activities


(352)

 (144)

(323)






Cash flows from investing activities





Interest received


-

-

-

Payments to acquire intangible assets


(7)

(330)

(330)

Payments to acquire subsidiaries


(550)

-

-

Cash on business combinations


81

-

-

Proceeds from sale of investments


-

165 

238

Net cash outflow from investing activities


(476)

(165) 

 (92)






Cash flows from financing activities





Issue of ordinary share capital


4,869

-

-

Share issue costs


(758)

 -

 -

Net cash inflow from financing activities


4,111

 -

 -






Net increase/(decrease) in cash and cash equivalents


3,283

(309)

(415)

Foreign exchange differences on translation


(6)

(55)

(53)

Cash and cash equivalents at beginning of period


19

 487

487

Cash and cash equivalents at end of period


3,296

 123

19

 

NOTES TO THE INTERIM REPORT FOR SIX MONTHS ENDED 30 SEPTEMBER 2010

 

1.

Basis of preparation

 

The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the BVI Business Companies Act applicable to companies reporting under IFRS.

 

The financial information for the period ended 30 September 2010 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the period ended 31 March 2010. The figures for the period ended 31 March 2010 have been extracted from these accounts, which have been delivered to the Registrar of Companies, and contained an unqualified audit report.

 

The financial information contained in this document does not constitute statutory accounts. In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.

 

This Interim Financial Report was approved by the Board of Directors on 21 December 2010.

 

Statement of compliance

 

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34 - Interim Financial Reporting as adopted by the European Union. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements and should be read in conjunction with the Group's 2010 annual financial statements.

 

Basis of consolidation

 

The consolidated financial statements comprise the financial statements of Ortac Resources Limited and its controlled entities. The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases.

 

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

 

All inter-company balances and transactions have been eliminated in full.

 

Foreign currencies

 

The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The group's presentational currency is US Dollars ($).

 

2.

Segmental analysis

 

Segment information is presented in respect of the Group's management and internal reporting structure. As currently the Group is not in producing or exploring directly, there is no revenue being generated, and the main business segment is that of a corporate administrative entity.

 

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

 

 

UK/BVI

Slovakia

Total

Six months to

30 September 2010 (Unaudited)

$'000

$'000

$'000

Operating loss by geographical area

 

 

 

Operating loss

(1,754)

(6)

(1,760)

Investment revenue

-

-

-

Negative goodwill written off

-

1,283

1,283

Loss before and after taxation 

(1,754)

1,277

(477)

 




Other information




Depreciation and impairment

-

-

-

Capital additions

7

-

7

 




Segment assets

1,477

15,093

16,570

Financial assets

2,392

-

2,392

Cash

3,283

13

3,296

Consolidated total assets

7,152

15,106

22,258

 




Segment liabilities

-

-

-

Trade and other payables

455

71

526

Consolidated total liabilities

455

71

526

 

 

 

UK/BVI

Total

$'000

$'000

 

Six months to
31 December 2009 (Unaudited)

 


 

Operating loss by geographical area

 

 

 

Operating loss

(148)

(148)

 

Investment revenue

-

-

 

Loss before and after taxation  

(148)

(148)

 

 

 

 

 

Other information



Depreciation and impairment

-

-

Capital additions

330

330

 

 

 

 

Segment assets

1,029

1,029

 

Financial assets

1,130

1,130

 

Cash

123

123

 

Consolidated total assets

2,282

2,282

 

 

 

 

 

Segment liabilities

-

-

 

Trade and other payables

-

-

 

Consolidated total liabilities

-

-

 

 

Nine months to
31 March 2010(Audited)



Operating loss by geographical area



Operating loss

(878)

(878)

Gain on sale of investments

71

71

Investment revenue

-

-

Loss before and after taxation

(807)

(807)




Other information



Depreciation and impairment

-

-

Capital additions

330

330




Segment assets

2,707

2,707

Financial assets

112

112

Cash

19

19

Consolidated total assets

2,838

2,838




Segment liabilities

-

-

Financial liabilities

(190)

(190)

Consolidated total liabilities

(190)

(190)

 

 

3.

Loss per share

 

The calculation of earnings per share is based on the loss after taxation divided by the weighted average number of share in issue during the period:

 

 

Six months to

30 September 2010

(Unaudited)

Six months to

31 December 2009

(Unaudited)

Nine months to

31 March

2010

(Audited)

 

 

 

 

Net loss after taxation ($'000)

(477)

(148)

(807)

 




Weighted average number of ordinary shares used in calculating basic earnings per share (millions)

943

583

583

 




Basic loss per share (expressed in US cents)

(0.05)

(0.02)

(0.14)

 

As the inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be antidilutive and, as such, a diluted loss per share is not included.

 

4.

Share capital

 

The authorised share capital of the Company and the called up and fully paid amounts at 30 September 2010 were as follows:

 

a)   Authorised

 

$'000

 

Unlimited ordinary shares of no par value each

 

-

b)   Called up, allotted, issued and fully paid

Number of shares

Nominal value

$000's

Incorporation

1

-

20 April 2007 for cash at  0.0437p per share

239,999,999

-

4 May 2007 for cash at 5p per share

182,750,000

-

11 May 2007 for non-cash consideration

300,000

-

7 September 2007 for non-cash consideration at 5.3p per share

25,000,000

-

21 November 2008 for cash at 0.3p per share

100,000,000

-

28 May 2009 for cash at 2p per share

35,000,000

-

23 April 2010 for cash at 1p per share

300,037,976

-

26 April 2010 for cash at 1p per share

15,000,000

-

15 September 2010 for non-cash consideration at 1p per share

836,187,511

-

As at 30 September 2010

1,734,275,487

-

 

Total share options in issue

During the period ended 30 September 2010, options over 121,500,000 ordinary shares were granted.

As at 30 September 2010 the options in issue were;



Options in issue

 Exercise Price

 Expiry Date

30 September 2010

5p

04-May-12

10,000,000

1p

22-Apr-19

33,600,000

1p

04-Jun-19

11,200,000

1p

31-Dec-15

16,500,000

1p

31-Dec-20

105,000,000



176,300,000

 

No options lapsed or were cancelled and no options were exercised during the period ended 30 September 2010.

 

5.

Investment in group companies

 

Company

Country of Registration

Proportion held

Nature of Business

 

 

 

 

Ortac Resources plc

England and Wales

100%

Holding Company

Anglo-Slovak Minerals Limited

England and Wales

100%

Mineral Exploration

Bellmin s.r.o.

Slovak Republic

100%

Mineral Exploration

G.B.E. s.r.o.

Slovak Republic

100%

Mineral Exploration

St. Stephans Gold s.r.o.

Slovak Republic

100%

Mineral Exploration

Kremnica Gold s.r.o

Slovak Republic

100%

Mineral Exploration

Kremnica Gold Mining s.r.o.

Slovak Republic

100%

Mineral Exploration

Templar Georgia Ltd

BVI

100%

Holding Company

Paranaiba Minerals Ltd

BVI

100%

Holding Company

 

 

6.

Plant, property and equipment

 

 

Six months to

30 September 2010

(Unaudited)

Six months to

31 December

2009

(Unaudited)

Nine months to
31 March

2010

(Audited)

Group

$ 000's

$ 000's

$ 000's

 

 

 

 

Cost

 

 


Balance brought forward

-

-

-

Currency translation adjustments

9

-

-

Additions

-

-

-

Additions from business combinations

408

-

-


417

-

-





Depreciation




Balance brought forward

-

-

-

Currency translation adjustments

-

-

-

Depreciation charge

-

-

-

Balance Carried Forward

-

-

-





Net book value

417

-

-





 

 

7.

Intangible assets

 

 

Six months to

30 September 2010

(Unaudited)

Six months to

31 December

2009

(Unaudited)

Nine months to
31 March

2010

(Audited)

Group

$ 000's

$ 000's

$ 000's

 

 

 

 

Cost

 

 


Balance brought forward

970

699

699

Currency translation adjustments

367

-

(59)

Additions

7

330

330

Additions from business combinations

14,342

-

-


15,686

1,029

970





Impairment




Balance brought forward

-

-

-

Impairment charge

-

-

-

Disposal

-

-

-

Balance Carried Forward

-

-

-





Net book value

15,686

1,029

970





The cost is analysed as follows:




Deferred exploration expenditure - Slovakia

14,662

-

-

Deferred exploration expenditure - Brazil

1,024

1,029

970

 

15,686

1,029

970

 

 

 

 

Impairment review

 

 

 

 

At 30 September 2010, the Directors have carried out an impairment review and are of the opinion that carrying value is now stated at fair value.

 

 

 

8.

Acquisition of subsidiaries

 

On 15 September 2010 the Company completed its acquisition of the Ortac Resources plc group.  The companies acquired as part of the Ortac Resources plc group are as follows:

 

Company

Proportion acquired

Nature of Business

 

 

 

Ortac Resources plc

100%

Holding Company

Anglo-Slovak Minerals Limited

100%

Mineral Exploration

Bellmin s.r.o.

100%

Mineral Exploration

G.B.E. s.r.o.

100%

Mineral Exploration

St. Stephans Gold s.r.o.

100%

Mineral Exploration

Kremnica Gold s.r.o

100%

Mineral Exploration

Kremnica Gold Mining s.r.o.

100%

Mineral Exploration

 


Book Value

Fair Value

Adjustment

Fair Value on

Acquisition


$ 000's

$ 000's

$ 000's

Non-current assets




Property, plant and equipment

408


408

Goodwill

807


807

Exploration and evaluation

13,535


13,535





Current assets




Inventories

10


10

Trade and other receivables

414


414

Cash and cash equivalents

81


81





Current liabilities




Trade and other payables

(2,397)

1,906

(491)


12,858

1,906

14,764

Negative goodwill immediately




recognised



(1,283)

Consideration




Shares Issued (*)



12,931

Cash paid



550

Consideration



13,481

 

(*) The company issued 836,187,511 shares, valued at 1 pence per share on 15 September 2010.

 

Included in the loss for the interim period is $20,000 attributable to the Ortac Resources plc group.  Had the acquisition of the Ortac Resources plc group been effected at 1 April 2010, the loss for the period would have been $2.25m.

 

Contingent liability

 

As part of the purchase agreement for Kremnica Gold s.r.o. and Kremnica Gold Mining s.r.o., completed on 31 March 2010, Ortac Resources plc agreed to pay vendor royalties of up to US$3,750,000 in either shares or cash, being $15 per ounce on the first 250,000 ounces of gold equivalent (gold plus silver) resource defined as proven and probable reserve in the bankable feasible study.  This will become payable within 60 days of all required permits being obtained to permit commercial production at the Kremnica property.

 

 

9.

Post balance sheet events

 

There are no post balance sheet events to disclose

 

10.

The financial information set out above does not constitute the Group's statutory accounts for the period ended 31 March 2010, but is derived from those accounts.

 

11.

A copy of this interim statement is available on the Company's website: www.ortacresources.com.

 

 

 

 


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