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Starvest plc (SVE)

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Monday 11 April, 2011

Starvest plc

Half-yearly report








  11 April 2011
  Half-year report - six months ended 31 March 2011
Chairman's statement
I  am pleased to provide  a portfolio valuation update  as at 31 March 2011, the
interim  financial statements  for the  six months  ended on 31 March 2011 and a
commentary on the excellent progress made during the period.
Investment performance

At  30 September 2010, there were signs that  dampening impact of world economic
events  was  lifting  and  that  the  performance  of the Starvest portfolio was
improving  after two years of stagnation.  Those initial signs have proved to be
a foretaste of an excellent half year.  The key facts are as follows:

  * Company net asset value has increased by £5.9m or 141%;
  * Starvest's mid share price has risen by 77% from 7.75 pence on 30 September
    2010 to 13.75 pence on 31 March 2011;
  * Closing net asset value of 26.16 pence per share up 131% from 11.28 pence;
  * Mid share price on 31 March 2011 had a discount to net asset value of 47%;
  * Investment sales have realised £1.3m with a gross profit of £1.09m; and
  * The bank overdraft has been eliminated.

Basis of valuation

Starvest  uses closing bid  prices, or the  Directors' lower valuation if deemed
appropriate.   In  addition,  a  10% discount  is made against those investments
where  the Company holds either a large  percentage of a given investee or where
the  investment  constitutes  7% or  more  of  the  portfolio.   These valuation
discounts  totalled £1.08m at 31 March 2011, or 2.66 pence per share.  Adjusting
for  this discount, the full value based on bid prices was 28.82 pence per share
leading to a share price discount of 52%.

Given  the current stock market trading volume in some investee companies, it is
arguable  that mid price  rather than bid  price would be  appropriate.  Had the
Company  adopted such a policy  with all options exercised,  the value per share
would increase by a further £1.64m or 3.61 pence to 32.43 pence per share with a
share price discount of 57%.


Company statistics

                          31 March 30 September 2010   31 March     30 September
                              2011                         2010             2009

Trading portfolio          £10.03m            £4.57m     £3.53m           £4.72m
value

Company asset value        £10.10m            £4.19m     £3.19m           £4.02m
net of debt

Net asset value -      26.16 pence       11.28 pence 8.85 pence      10.72 pence
fully diluted per
share

Share price - mid      13.75 pence        7.75 pence 5.75 pence      11.75 pence

Share price discount           47%     Premium 31.3%        35%       Premium 9%
to fully diluted net
asset value

Market capitalisation       £5.05m            £2.84m     £2.01m            £4.1m



Portfolio comment

During  the  half  year,  Starvest  sold  at  profit:  its  remaining holding in
Franconia  Minerals Corporation, the  subject of a  takeover; and a  part of its
interest  in Beowulf Mining plc.   On sales of £1,324,020,  the gross profit was
£1,089,779.

During  the half  year, there  has been  increased investor  interest in mineral
exploration  ventures,  particularly  where  they  have demonstrated progress in
their  search for  and development  of their  projects leading  to much improved
valuations.   Against this background,  previous valuation impairments totalling
£848,498 have been reversed; new impairments total £35,198.

Taking  these factors into consideration resulted  in an operating profit before
expenses of £1,903,079.

During the period, Starvest added to its investment in Ariana Resources plc.

As  a  consequence  of  improved  valuations,  Starvest's  largest  investments,
comprising 85% of the declared valuation, in order of size were:

  * Oracle Coalfields plc
  * Regency Mines plc
  * Kefi Minerals plc
  * Beowulf Mining plc
  * Red Rock Resources plc
  * Ariana Resources plc
  * Sheba Exploration (UK) plc
  * Greatland Gold plc
  * Sunrise Resources plc

A  year  ago  we  stated  that  "within  the investment portfolio, we have eight
investments,  each  of  which  has  the  potential  to  transform  the  Starvest
portfolio.   We  must  be  patient!"   Our  patience  is  being rewarded, and we
continue  to believe that  there is considerable  growth potential in Starvest's
investment portfolio.

Other points of note during the half year:

  * The profit on ordinary activities before taxation for the period amounted to
    £1,812,920 (2010 loss £100,276).
  * After a corporation tax provision of £490,000, the net profit is reduced to
    £1,322,920 (2010: loss £100,276).
  * Basic profit of 3.6 pence per share (2010: loss of 0.29 pence per share);
    fully diluted profit of 3.3 pence per share (2010: loss 0.25 pence per
    share).

Resumption of dividend payments

In  the context of the greatly improved results coupled with the outlook for the
future,  the Board has resolved to resume dividend distributions commencing with
an  interim dividend amounting to 0.25 pence per share for which the record date
will be 27 May 2011 and the payment date 15 June 2011.

The matter will be kept under review, but at the 2011 annual general meeting the
Board  expects to  recommend to  Shareholders that  a final  dividend of  a like
amount be paid during January 2012.

The Board hopes to be able to recommend further dividends to shareholders in
future years.

In  early July, the Company expects to announce an update to the net asset value
as at 30 June 2011.

R Bruce Rowan

Chairman & Chief Executive

11 April 2011


Profit & loss account

                             6 months to 31    6 months to 31        Year  ended
                                  March 2011             March      30 September
                                                          2010              2010

                                   Unaudited         Unaudited           Audited
                                           £                 £                 £


Operating income                   1,324,020           630,605           640,044


Direct costs                       (234,241)         (228,275)         (237,713)

                         -------------------------------------------------------
Gross profit                       1,089,779           402,330           402,331


Administrative expenses             (88,791)          (90,162)         (182,760)


Impairment of trade                 (35,198)         (468,743)         (546,062)
investments                          848,498            62,470           288,109
Amounts written back to
trade investments

                         -------------------------------------------------------
Operating profit/(loss)            1,814,288          (94,105)          (38,382)
on ordinary activities


Interest receivable                      469             3,682             8,083
Interest payable                     (1,837)           (9,853)          (18,063)

                         -------------------------------------------------------
Profit/(loss) on ordinary          1,812,920         (100,276)          (48,362)
activities before
taxation


Tax on profit on ordinary          (490,000)                 -             9,385
activities

                         -------------------------------------------------------
Profit/(loss) on ordinary          1,322,920         (100,276)          (38,977)
activities after taxation
                         -------------------------------------------------------


Earnings/(loss) per share
- see note 3                       3.6 pence        (0.29) pence     (0.1) pence
Basic                              3.3 pence        (0.25) pence     (0.1) pence
Fully diluted

                         -------------------------------------------------------


Balance sheet
                       | |   6 months ended|   6 months ended|      Year  ended
                       | |    31 March 2011|    31 March 2010|     30 September
                       | |                 |                 |             2010
-----------------------+-+-----------------+-----------------+-----------------
                       | |        Unaudited|        Unaudited|          Audited
                       | |                £|                £|                £
-----------------------+-+-----------------+-----------------+-----------------
 Current assets        | |                 |                 |
 Debtors               | |          208,822|           19,081|           33,514
 Trading investments   | |        3,681,164|        2,619,453|        2,795,770
 Cash  at  bank  and in| |          407,539|                -|                -
 hand                  | |                 |                 |
                       | |                 |                 |
-----------------------+-+-----------------+-----------------+-----------------
                       | |        4,297,525|        2,638,534|        2,829,284
                       | |                 |                 |
-----------------------+-+-----------------+-----------------+-----------------
 Creditors   -  amounts| |                 |                 |
 falling due within one| |                 |                 |
 year                  | |        (550,960)|        (340,188)|        (377,639)
 Other creditors       | |                 |                 |
                       | |                 |                 |
-----------------------+-+-----------------+-----------------+-----------------
 Net current assets    | |        3,746,565|        2,298,346|        2,451,645
                       | |                 |                 |
-----------------------+-+-----------------+-----------------+-----------------
 Total assets less     | |        3,746,565|        2,298,346|        2,451,645
 current liabilities   | |                 |                 |
                       | |                 |                 |
-----------------------+-+-----------------+-----------------+-----------------
 Capital and reserves  | |                 |                 |
 Called     up    share| |          390,173|          372,173|          390,173
 capital               | |        2,100,396|        2,026,396|        2,100,396
 Share premium account | |        1,283,996|        (100,223)|         (38,924)
 Profit     and    loss| |                 |                 |
 account               | |                 |                 |
                       | |                 |                 |
-----------------------+-+-----------------+-----------------+-----------------
 Equity   shareholders'| |        3,774,565|        2,298,346|        2,451,645
 funds                 | |                 |                 |
                       | |                 |                 |
                       | +-----------------+-----------------+-----------------


Cash flow statement

  |                          |  6 months ended|  6 months ended|     Year ended
  |                          |   31 March 2011|   31 March 2010|   30 September
  |                          |                |                |           2010
--+------------------------+-+----------------+----------------+---------------
                           | |       Unaudited|       Unaudited|        Audited
                           | |               £|               £|              £
---------------------------+-+----------------+----------------+---------------
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
 Net cash inflow/(outflow) | |         740,926|         513,713|        333,851
 from operating activities | |                |                |
---------------------------+-+----------------+----------------+---------------
 Returns on investment and | |                |                |
 servicing of finance:     | |                |                |
---------------------------+-+----------------+----------------+---------------
 Interest receivable       | |             469|           3,682|          8,083
 Interest payable          | |         (1,837)|         (9,853)|       (18,063)
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
                           | |         (1,368)|         (6,171)|        (9,980)
---------------------------+-+----------------+----------------+---------------
                           | |                |                |
 Taxation recovered/(paid) | |           9,490|               -|        (9,490)
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
                           | |           9,490|               -|        (9,490)
---------------------------+-+----------------+----------------+---------------
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
 Financing:                | |                |                |
 Issue of new shares       | |               -|               -|         92,000
 Short term loan repaid    | |               -|               -|      (100,000)
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
                           | |               -|               -|        (8,000)
---------------------------+-+----------------+----------------+---------------
                           | |                |                |
 Increase/(decrease) in    | |         749,048|         507,542|        306,381
 cash in the period        | |                |                |
---------------------------+-+----------------+----------------+---------------
                           | |                |                |
 Opening cash balance      | |                |               -|              -
 brought forward           | |       (341,509)|       (747,890)|      (647,890)
 Net debt brought forward  | |                |                |
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
 Closing cash balance/( net| |         407,539|       (240,348)|      (341,509)
 debt)                     | |                |                |
                           | |                |                |
                           | +----------------+----------------+---------------


Movement on equity shareholders' funds

  |                          |  6 months ended|  6 months ended|    Year  ended
  |                          |   31 March 2011|   31 March 2010|   30 September
  |                          |                |                |           2010
--+------------------------+-+----------------+----------------+---------------
                           | |       Unaudited|       Unaudited|        Audited
                           | |               £|               £|              £
---------------------------+-+----------------+----------------+---------------
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
 Total recognised          | |       1,322,920|       (100,276)|       (38,977)
 (loss)/profits relating to| |                |                |
 the period                | |               -|               -|         92,000
 Shares issued             | |                |                |
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
 (Decrease)/increase in    | |       1,322,920|       (100,276)|         53,023
 shareholders' funds       | |                |                |
                           | |       2,451,645|       2,398,622|      2,398,622
 Opening shareholders'     | |                |                |
 funds                     | |                |                |
                           | |                |                |
---------------------------+-+----------------+----------------+---------------
 Closing      shareholders'| |       3,774,565|       2,298,346|      2,451,645
 funds                     | |                |                |
                           | |                |                |
                           | +----------------+----------------+---------------


Interim report notes

1.       Interim report

The  information relating to the six month periods to 31 March 2010 and 31 March
2011 is unaudited.

The  information relating to the year  ended 30 September 2010 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 accounting

The  report has been prepared using accounting policies that are consistent with
those  adopted  by  the  Company  in  accordance  with UK GAAP for the statutory
accounts for the year ended 30 September 2010, although the information does not
constitute statutory accounts within the meaning of section 435 of the Companies
Act 2006.

The Company will report again for the full year to 30 September 2011.

The  Company's investments at 31 March  2011 are valued at the  lower of cost or
the  valuation adopted at 30 September 2010 or the current market value based on
bid  prices  at  the  close  of  business.   The Chairman's statement includes a
valuation based on bid prices at 31 March 2011.

3.       Earnings per share

   |                  |6 months ended 31 |6 months ended 31 |       Year  ended
   |                  |        March 2010|        March 2010| 30 September 2010
--++------------------+------------------+------------------+------------------
  |                   |         Unaudited|         Unaudited|           Audited
  |                   |                 £|                 £|                 £
--+-------------------+------------------+------------------+------------------
  |                   |                  |                  |
--+-------------------+------------------+------------------+------------------
 These have been      |         1,322,920|         (100,276)|          (38,977)
 calculated on a      |                  |                  |
 profit/(loss) of:    |                  |                  |
----------------------+------------------+------------------+------------------
                      |                  |                  |
 The weighted average |        36,717,259|        34,917,259|        35,193,423
 number of shares used|                  |                  |
 was:                 |                  |                  |
----------------------+------------------+------------------+------------------
                      |                  |                  |
 Basic profit/(loss)  |         3.6 pence|      (0.29) pence|      (0.11) pence
 per share:           |                  |                  |
                      |                  |                  |
----------------------+------------------+------------------+------------------
                      |                  |                  |
 The weighted average |        40,492,259|        40,492,259|        40,492,259
 number of shares and |                  |                  |
 outstanding options  |                  |                  |
 used was:            |                  |                  |
----------------------+------------------+------------------+------------------
                      |                  |                  |
 Fully diluted        |         3.3 pence|      (0.25) pence|      (0.11) pence
 profit/(loss) per    |                  |                  |
 share:               |                  |                  |
                      |                  |                  |
                      +------------------+------------------+------------------



Investment portfolio

Starvest now holds trade investments in the companies listed below; of these the
following  nine companies  comprised 85% of  the portfolio  value as at 31 March
2011:

  * Oracle Coalfields plc      Coal mining in Pakistan

                               www.oraclecoalfields.com

  * Regency Mines plc          Copper & nickel exploration in Australia and
                               Papua New Guinea and investments in Red Rock
                               Resources plc and Oracle Coalfields plc

                               www.regency-mines.com

  * Kefi Minerals plc          Gold and copper exploration in Turkey and Saudi
                               Arabia

                               www.kefi-minerals.com

  * Beowulf Mining plc         Iron ore, gold, copper and uranium exploration in
                               Sweden

                               www.beowulfmining.com

  * Red Rock Resources plc     Iron ore and manganese exploration in Australia,
                               Greenland and Zambia; gold exploration in Kenya
                               and Columbia with investments in other companies

                               www.rrrplc.com

  * Ariana Resources plc       Gold exploration in Turkey

                               www.arianaresources.com

  * Sheba Exploration (UK) plc Gold exploration in Ethiopia

                               www.shebagold.com

  * Greatland Gold plc         Gold exploration in Western Australia and
                               Tasmania

                               www.greatlandgold.com

  * Sunrise Resources plc      Mineral exploration in Finland, Australia and
                               Ireland

                               www.sunriseresourcesplc.com


Other direct and indirect mineral exploration companies:

  * Equity Resources plc            Investment holding company with interests in
                                    Regency Mines plc and Red Rock Resources plc

  * Belmore Resources (Holdings)    Zinc exploration in Ireland
    plc
                                    www.belmoreresources.com

  * Alba Mineral Resources plc      Nickel, uranium & gold in Scotland,
                                    Mauritania, Sweden and Ireland

                                    www.albamineralresources.com

  * Minera IRL Limited, formerly    Gold exploration in South America
    Hidefield Gold plc
                                    www.minera-irl.com

  * Gippsland Limited               Tantulum exploration in Egypt

                                    www.gippslandltd.com.au

  * International Mining &          Investment holding company
    Infrastructure Corporation plc,
    formerly India Star Energy plc  www.imicplc.com




Other investee companies are listed in the Company's 2010 annual report
available on request as below.

Shareholders  and others who wish to  receive electronic copies of announcements
are  invited to  register their  email address  on the  home page of the Company
website: 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, 55 Gower
Street,  London WC1E 6HQ, by email to email@starvest.co.uk or from the Company's
website at www.starvest.co.uk.

Enquiries to:
  * Bruce Rowan, telephone 020 7486 3997
  * John Watkins, telephone 01483 771992, or to john@starvest.co.uk
  * Gerry Beaney, Colin Aaronson or David Hignell, Grant Thornton Corporate
    Finance, telephone 020 7383 5100

End






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Source: Starvest plc via Thomson Reuters ONE

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