Final Results for the Year Ended 31 December 2007
1st April 2008
GB00B23JN426/GBP/PLUS-exn
Oracle Coalfields PLC
Final Results For The Year Ended 31 December 2007
FULL YEAR HIGHLIGHTS
* Successful admission to PLUS in August 2007 at 3p per share, following placing of
GBP595,000
* Private placing at 3p per share completed in September 2007 raising GBP106,390
* Sindh Carbon Energy Ltd (80% owned) granted an exploration licence over Block VI of the
Thar Coalfield, in the Sindh Province of Pakistan, covering 66.1 square kilometres
* Sindh Carbon Energy Ltd granted a 100 square kilometre exploration licence at the Indus
East coalfield, KhoreWah, in the Sindh Province of Pakistan
* Drilling services contract signed within budget between Sindh Carbon Energy Ltd and
Pakistan-based coal specialist, Deep Rock Drilling (PVT) Ltd, to complete the work programme at
Thar and Indus East
* Work programme commenced at Indus East coalfield, KhoreWah in November 2007
POST PERIOD HIGHLIGHTS
* Work programme commenced at Block VI of Thar in February 2008 to verify recent drilling by
the China NE Geologic Bureau. The drilling will take the licence to a measured international JORC
reserve with results expected Q2 2008
* Appointment of Roderick Stead, Non-Executive Director
CHAIRMAN'S STATEMENT
The past year has been very positive for Oracle Coalfields plc ("the Company"), with the award of
two prime licences in the Sindh Province of Pakistan to our 80% owned subsidiary, Sindh Carbon
Energy Ltd. We have also secured funding of over GBP700,000, which has served to get the Company a
public listing on PLUS, and will take our flagship project, Block VI at Thar, to a measured JORC
reserve in the second quarter of 2008. Coupled with our own progress as a Company, the industry at
large has benefited from the world's increasing demands for finite energy feedstock, resulting in
the price of coal hitting record highs in the past month. This is an exciting time for Oracle
Coalfields, and it gives me great pleasure to report to shareholders on progress over the past
year and forthcoming milestones.
BACKGROUND
Oracle Coalfields PLC was formed on 5 July 2006 for the purpose of coal development and
exploitation, and on 6 September 2006 entered into a joint venture agreement with a local
Pakistani company, Sindh Koela Ltd, to pursue coal development opportunities in the coal rich
Sindh Province of Pakistan. As part of the agreement with Sindh Koela Ltd, the parties formed a
joint-venture company, Sindh Carbon Energy Ltd, which is 80% owned by Oracle Coalfields and 20%
owned by Sindh Koela.
THE INDUS EAST LICENCE
On 9 January 2007, Oracle Coalfields and Sindh Koela signed a Memorandum of Understanding with the
Sindh Coal Authority in Pakistan, and on 8 February 2007, the joint-venture company, Sindh Carbon
Energy Ltd, was issued an Exploration Licence by the Directorate General of Mines and Mineral
Development, Government of Sindh, for over 100 square kilometres of the Indus East Coalfield, at
KhoreWah. In 1992 the Geological Survey of Pakistan completed the drilling of two boreholes, KHW-1
and KHW-2, which returned a coal thickness of 3.2 metres and 0.95 metres respectively. The data
available to Oracle Coalfields has led us and our coal development partners to believe that we are
targeting a sizeable coal resource. Under Oracle Coalfields' agreement with Sindh Koela, once the
development of a coal mine commences, Sindh Koela will commence the development of one or more
mine-mouth power plants with an aggregate capacity of 150MW's, which could absorb the envisaged
annual coal production.
In line with the stated strategy, drilling commenced at the Indus East project in November 2007,
which saw an initial three boreholes completed by local coal specialists, Deep Rock Drilling (PVT)
Ltd ("DRD"). Upon completion of the third hole at Indus East, it was decided that the Company's
resources should focus upon Block VI of the Thar Coalfield, which was granted in mid-November
2007. It is anticipated that drilling will resume at Indus East in the fourth quarter of 2008.
BLOCK VI, THAR COALFIELD
On 3 November 2007, Oracle Coalfields signed a Memorandum of Understanding with the Sindh Coal
Authority and the Mines & Mineral Development, Government of Sindh in Pakistan and on 14 November
2007, the joint-venture company, Sindh Carbon Energy Ltd, was issued an Exploration Licence by the
Directorate General of Mines and Mineral Development, Government of Sindh, for over 66.1 square
kilometres of Block VI, Thar Coalfield, District of Tharparkar, Sindh Province. The Thar coalfield
is estimated to contain a total resource in excess of 175 billion tonnes of coal. To date, only
six blocks of the coalfield have been delineated and awarded, and we were delighted that the Mines
& Mineral Development, Government of Sindh, granted us Block VI in November 2007.
Block VI covers a landmass of 66.1 square kilometres of semi-arid land, and is situated 32
kilometres from the town of Islamkot, District of Tharparkar, Province of Sindh. In 2005 the China
North East Geological Survey Bureau completed a 35-borehole programme on Block VI, as commissioned
by the Sindh Coal Authority.
The 35-borehole programme completed by the Chinese saw a total depth of 9,852 metres drilled, of
which 5,986 metres was cored. All the boreholes were geophysically logged, and 273 lignite samples
were analysed for quality. Provisional indications from the Chinese drilling programme show that
there is in excess of 700 million tonnes of lignite coal, focussed on a main lignite seam with a
thickness varying between 9-20 metres at a depth of less than 150 metres. The quality of the
lignite coal gives a heating value of 3,250 kcal/kg, with high moisture and low ash and sulphur
contents. The quality of this lignite is suitable for coal-fired power stations.
On 14 February 2008, our drilling contractors, DRD, commenced work on the first borehole of a
seven hole programme on Block VI of the coalfield. The purpose of this drilling programme is to
validate the results achieved by the China North East Geological Survey Bureau, in order to raise
the resource to the internationally recognised JORC standard. This validation will form the basis
of an independent Competent Persons Report (CPR), which is in line to be completed in the second
quarter of 2008.
It is intended that this will be an integrated project, whereby Sindh Carbon Energy Ltd will be
the producer of the coal supply, and Oracle Coalfields together with a joint venture partner will
operate a 300 MW mine-mouth power plant. It is intended that approximately 1.5 million tonnes of
coal per annum will be required as feedstock for a 300 MW mine-mouth power plant, with the
potential to increase this to 1,000 MW in the future.
MANAGEMENT TEAM
On 4 January, 2008, the Company announced the appointment of Roderick Stead as a Non-Executive
director. This was an important development for Oracle Coalfields, as Roderick brings a wealth of
experience to our team. One of Roderick's most notable strengths is his experience with project
finance, having worked as leader of the financing team for Oman LNG LLC from 1996 - 1999, prior to
becoming leader of the financing team for Nigeria LNG between 1999 - 2003. I am sure that as we
move toward the stage of project financing that Roderick's experience in this area will prove a
valuable asset.
It is planned that we will further strengthen the management team, and we hope to appoint a Non-
Executive Chairman in the near future, as well as the appointment of an additional Non-Executive
Director.
THE PAKISTAN POWER MARKET
Pakistan continues to experience wide spread power shortages across the country. While oil and gas
currently accounts for the majority power source, rising fuel prices make coal a cost effective
long terms solution. In 2004/5 coal accounted for 1% of the total fuels (source: Pakistan Energy
Yearbook) however, this figure is estimated to rise to 17% by 2025.
THE INTERNATIONAL COAL MARKET
In my previous comments on the international coal market in September 2007, I noted that coal
prices would be set to rise over the remaining months of 2007 and rise over the course of 2008.
This has been the case, and in recent weeks coal has hit record highs. Power-station coal prices
have been trading above US$135 per metric ton, whilst thermal coal prices rose to US$90.87 per
metric ton in January 2008.
The rise in coal prices have been the result of supply delays and infrastructure constraints in
China, Australia and South Africa, the large contributors of thermal coal to the international
market. Inclement weather earlier this year in Queensland left several blue chip mining houses
declaring "force majeure" which will have a significant impact on production levels for 2008.
There have also been severe snowstorms in China, adversely effecting both mines and power
stations. South Africa's power shortages have been well documented as ESKOM, the country's state
owned power supplier, struggles to meet the rising demand for electricity which has directly
influenced the price for thermal coal and analysts are predicting continued strength in coal
prices for both the short and medium term which Oracle Coalfields should be well placed to take
advantage of.
FINANCIALS
The financial results for the period to 31 December 2007 show a loss for Oracle Coalfields plc
Group of Companies (Group) after taxation of GBP225,960 (Company - GBP225,960). At the period end,
the Group had cash at bank and in hand of GBP357,654 (Company - GBP350,533) and total assets less
current liabilities of GBP543,203 (Company - GBP525,430).
OUTLOOK
The Board is very positive about the outlook for the Company. We have developed Oracle Coalfields
apace since joining PLUS, and now have two assets in the Sindh Province of Pakistan. Drilling is
in line to complete a Competent Persons Report which will take the Block VI Thar coalfield to a
JORC compliant resource. We have strengthened the management team through the appointment of
Roderick Stead and look forward to strengthening the Board further in due course. These
developments may be seen as building blocks in taking the Company from PLUS to a listing on AIM at
an appropriate time. Further announcements will be made as the Company develops its plans.
We are pleased with the performance of the share price, which currently trades at a mid-price of
7p, up 133% on our listing price of 3p in August 2007.
I would like to take this opportunity to thank my Board for their hard work in developing the
Company, and our loyal shareholders for their continued support. We also extend our thanks to the
Mines and Mineral Development, Government of Sindh, and the Sindh Coal Authority for their
continued assistance as well as the continuing support from our local partners, Sindh Koela
Limited. The future is positive for Oracle Coalfields, and we look forward to a year of
significant development as we take the Company towards being a leading coal producer in Pakistan
and coupled with the rising global coal market believe the Company has built a strong platform.
Shahrukh Khan
Chairman
March 27, 2008
The Directors of the Issuer accept responsibility for this announcement.
ENQUIRIES:
ORACLE COALFIELDS PLC
SHAHRUKH KHAN, CHAIRMAN
TELEPHONE: +44 (0) 155 381 0940
EMAIL: S.KHAN@ORACLECOALFIELDS.COM
CORPORATE ADVISERS
ST HELEN'S CAPITAL PLC
BARRY HOCKEN, DIRECTOR
TELEPHONE: 020 7628 5582
EMAIL: BARRY.HOCKEN@STHELENSCAPITAL.COM
CONDUIT PR
JOS SIMSON
Telephone: 020 7429 6603
Oracle Coalfields plc
Oracle Coalfields plc
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