UNAUDITED INTERIM RESULTS FOR 6 MONTHS TO 30 JUNE
Interim Results
Oracle Coalfields PLC
14 September 2016
ORACLE COALFIELDS PLC
("Oracle" or the "Company" or the "Group")
UNAUDITED INTERIM RESULTS FOR THE 6 MONTHS TO 30 JUNE 2016
Oracle Coalfields PLC (AIM:ORCP), the UK energy developer of a combined lignite coal mine and mine mouth power plant located in the Thar desert in the south-eastern Sindh Province of Pakistan, today announces its unaudited interim results for the six months ended 30 June 2016.
Highlights
· Notification by the Energy Department, Government of Sindh for the extension of the applicability of US$ based 20% internal rate of return to all coal mining projects based on indigenous Thar coal to the companies which achieve financial close before 31 December 2016.
· Determination by the Thar Coal and Energy Board following a coal price petition, based on feasibility studies, of a coal price of US$60.23/tonne.
· The signing of a Shareholder Framework Agreement, subject to conditions precedent, whereby a consortium of new and existing Chinese partners will take 70% equity in the Company's subsidiaries in Pakistan, in order to advance the development of the project.
Shahrukh Khan, CEO of Oracle, said,
"The power shortage in Pakistan remains acute and the Government remains steadfast in its objective of dealing with the country's energy crisis. The Government continues to support the Company in the development of the coal mine and power project.
"Following the signing of the Shareholder Framework Agreement, we, with our Chinese partners, are currently in the process of agreeing a Shareholder Agreement and details of EPC contracts for both the mine and the power plant."
CHAIRMAN'S STATEMENT FOR THE 6 MONTHS TO 30 JUNE 2016
Chairman's Statement
I am pleased to present the Company's results for the six months ended 30 June 2016.
Operational Update and Looking Ahead
We continue to make progress towards bringing the Thar coalfield Block VI power project to a financial close The power shortage in Pakistan continues and it is clear that development of Thar is the substantive medium-term solution.
The Governments, federal and provincial, have put in place fiscal incentives and also a "cost-plus" arrangement under which holders of mining leases in the Thar desert are allowed a coal price and electricity tariff that give developers a project based internal rate of return ("IRR") of 20%, in US dollar terms. The Thar Coal and Energy Board has now made an initial determination of our coal price according to the Rules promulgated in 2014. This determination, based on our mine feasibility study, was at a coal price of US$60.23/tonne. To ensure that the IRR is maintained at 20% throughout the life of the project, the Rules allow for further coal price petitions at contract stage, financial close, commercial operations date and periodically thereafter through the lifetime of the project, to reflect actual costs.
The electricity tariff is similarly determined. Our power plant project is registered with the Private Power and Infrastructure Board, Ministry of Water and Power Government of Pakistan and we shall be submitting our initial electricity tariff petition shortly to the National Electric Power Regulatory Authority. We shall then open discussions with the National Transmission and Despatch Company ("NTDC"), who operate the National Grid, to conclude a Power Purchase Agreement ("PPA") and an Implementation Agreement with the Government of Pakistan which, inter alia, will guarantee payment for power delivery under the PPA.
In addition to the various Government incentives, the China Pakistan Economic Corridor has been set up with the aim of Chinese banks providing finance along with Chinese governmental support in approved energy and infrastructure projects. We understand the total financing to be made available is in the order of US$46 billion across a number of projects; our Thar Block VI project is included on the list of approved projects. This will assist in expediting both Pakistani and Chinese Government approvals that are required for our project.
The Environmental and Social Impact Assessment for the mine was approved in 2013 and for the power plant, it is near to completion. Preparation of resettlement of project affected people has been initiated; and the land ownership survey is underway, in accordance with the Government of Sindh Resettlement Policy Framework issued in 2015.
NTDC are responsible for the construction and operation of high voltage transmission lines to link Thar power plants with the National Grid; approximately 80 kilometres are required to make the connection. NTDC is expected to complete this transmission link within schedule.
The power plant will require water for its operation and the mine will have a surplus of water from its dewatering operations. The Government of Sindh, Energy Department, are responsible for the provision of water, where there is a shortage, and also for the evacuation of any surplus. The construction of a fresh water supply from the River Indus is in progress.
We signed a Shareholders Framework Agreement subject to conditions precedent, with new and existing Chinese partners in June 2016. Under this Agreement, it is proposed that the Chinese partners will take a 70% equity interest in the project and will act as Engineering, Procurement and Construction (EPC) contractors for the mine and the power plant. We are now working towards finalising a Shareholder Agreement and details of EPC contracts for both the mine and the power plant. Our Chinese partners are taking the lead in discussions on debt financing with Sinosure, the Chinese Export and Credit Insurance Corporation.
Summary of Results
As expected for a mining company at our stage of development, our financial results for the six months to 30 June 2016 show an operational loss for the Oracle Coalfields PLC Group of Companies after taxation of £448,139 (2015: loss of £528,476). At the period end, the Group had cash and cash equivalents of £1,098,594 (2015: £1,469,573) and net assets of £6,009,371 (2015: £6,706,723). The basic loss per share was 0.05p (2015: loss 0.07p).
Broader Outlook
Inevitably projects of this nature take time to bring to fruition. The development of Thar is a significant and sustainable element in Pakistan's longer term solution to the country's present energy crisis; speedy implementation is in the national interest.
The Board extends its appreciation to the Thar Coal Energy Board, the Energy Department, the Coal Mines Department and Government of Sindh, as well as the Ministry of Water and Power (Government of Pakistan) for their continued support. The Board also continues to be very grateful for the patience and support of our shareholders.
Anthony Scutt
Chairman of the Board - Oracle Coalfields PLC
Date: 13 September 2016
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2016
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2016 30 June 2015 31 Dec 2015
£ £ £
CONTINUING OPERATIONS
Revenue - - -
Other operating income - 768 768
Administrative expenses (452,710) (531,781) (980,819)
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OPERATING LOSS (452,710) (531,013) (980,051)
Finance costs - - -
Finance income 4,571 2,537 7,275
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LOSS BEFORE TAX (448,139) (528,476) (972,776)
Tax - - -
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LOSS FOR THE PERIOD (448,139) (528,476) (972,776)
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Loss attributable to:
Owners of the parent (447,972) (528,476) (972,190)
Non-controlling interests (167) - (586)
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(448,139) (528,476) (972,776)
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Loss per share attributable to the ordinary equity
holders of the parent:
Basic and diluted (pence) (0.05) (0.07) (0.12)
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHS ENDED 30 JUNE 2016
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2016 30 June 2015 31 Dec 2015
£ £ £
LOSS FOR THE PERIOD (448,139) (528,476) (972,776)
OTHER COMPREHENSIVE INCOME
Item that may be reclassified subsequently
to profit or loss:
Exchange difference arising on translation of foreign
operations 157,012 (23,503) 11,572
Income tax relating to components of other
comprehensive income - - -
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OTHER COMPREHENSIVE INCOME/(LOSS)
FOR THE PERIOD, NET OF INCOME TAX 157,012 (23,503) 11,572
TOTAL COMPREHENSIVE LOSS
FOR THE PERIOD (291,127) (551,979) (961,204)
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Total comprehensive income attributable to:
Owners of the parent (305,283) (551,979) (960,618)
Non-controlling interests 14,156 - (586)
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 June 2016 30 June 2015 31 Dec 2015
Notes £ £ £
ASSETS
NON-CURRENT ASSETS
Intangible assets 4,476,908 3,960,131 4,170,073
Property, plant and equipment 24,640 1,688 23,532
Loans and other financial instruments 3 377,266 - 338,676
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4,878,814 3,961,819 4,532,281
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CURRENT ASSETS
Trade and other receivables 114,342 1,020,411 87,604
Cash and cash equivalents 1,098,594 1,469,573 1,860,662
Restricted bank deposits 3 - 360,000 -
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1,212,936 2,849,984 1,948,266
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TOTAL ASSETS 6,091,750 6,811,803 6,480,547
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EQUITY
SHAREHOLDERS' EQUITY
Share capital 4 911,783 911,783 911,783
Share premium 10,900,723 10,897,723 10,900,723
Share scheme reserve 120,194 149,782 149,782
Translation reserve 24,079 (163,167) (132,534)
Accumulated losses (5,960,348) (5,095,127) (5,534,399)
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5,996,431 6,700,994 6,295,355
Non-controlling interest 12,940 5,729 5,143
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TOTAL EQUITY 6,009,371 6,706,723 6,300,498
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LIABILITIES
CURRENT LIABILITIES
Trade and other payables 82,379 105,080 180,049
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TOTAL LIABILITIES 82,379 105,080 180,049
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TOTAL EQUITY AND LIABILITIES 6,091,750 6,811,803 6,480,547
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CONSOLIDATED UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 30 JUNE 2016
Share
Share Accumulated Share scheme
capital losses premium reserve
£ £ £ £
Balance at 31 December 2014 389,009 (4,562,209) 8,346,733 63,070
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Changes in equity
Issue of share capital 522,774 - 2,875,255 -
Costs associated with share issue - - (324,265) 86,712
Loss for the period - (528,476) - -
Other comprehensive income - (4,442) - -
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Balance at 30 June 2015 911,783 (5,095,127) 10,897,723 149,782
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Changes in equity
Issue of share capital - - - -
Costs associated with share issue - - 3,000 -
Loss for the period - (443,714) - -
Other comprehensive income - 4,442 - -
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Balance at 31 December 2015 911,783 (5,534,399) 10,900,723 149,782
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Changes in equity
Release of charge for lapsed options - 29,588 - (29,588)
Further investment in subsidiary - (7,565) - -
Loss for the period - (447,972) - -
Other comprehensive income - - - -
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Balance at 30 June 2016 911,783 (5,960,348) 10,900,723 120,194
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Translation Non-controlling Total
reserve Total interest equity
£ £ £ £
Balance at 31 December 2014 (144,106) 4,092,497 5,729 4,098,226
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Changes in equity
Issue of share capital - 3,398,029 - 3,398,029
Costs associated with share issue - (237,553) - (237,553)
Loss for the period - (528,476) - (528,476)
Other comprehensive income (19,061) (23,503) - (23,503)
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Balance at 30 June 2015 (163,167) 6,700,994 5,729 6,706,723
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Changes in equity
Issue of share capital - - - -
Costs associated with share issue - 3,000 - 3,000
Loss for the period - (443,714) (586) (444,300)
Other comprehensive income 30,633 35,075 - 35,075
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Balance at 31 December 2015 (132,534) 6,295,355 5,143 6,300,498
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Changes in equity
Release of charge for lapsed options - - - -
Further investment in subsidiary 13,924 6,359 (6,359) -
Loss for the period - (447,972) (167) (448,139)
Other comprehensive income 142,689 142,689 14,323 157,012
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Balance at 30 June 2016 24,079 5,996,431 12,940 6,009,371
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CONSOLIDATED CASHFLOW STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2016
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2016 30 June 2015 31 Dec 2015
Notes £ £ £
Cash flows from operating activities
Cash generated from operations 1 (614,822) (590,188) (958,952)
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Net cash used in operating activities (614,822) (590,188) (958,952)
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Cash flows from investing activities
Purchase of intangible fixed assets (155,004) (175,869) (351,000)
Purchase of tangible fixed assets (1,158) (948) (22,975)
Cash placed on restricted deposit - (360,000) (332,116)
Interest received 4,571 2,537 7,275
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Net cash used in investing activities (151,591) (534,280) (698,816)
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Cash flows from financing activities
Share issue - 2,449,109 3,369,500
Cost of share issue - (237,553) (234,553)
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Net cash from financing activities - 2,211,556 3,134,947
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(Decrease)/Increase in cash
and cash equivalents (766,413) 1,087,088 1,477,179
Cash and cash equivalents at beginning
of period 2 1,860,662 383,063 383,063
Effect of foreign exchange rate changes 4,345 (578) 420
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Cash and cash equivalents at end of period 1,098,594 1,469,573 1,860,662
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NOTES TO THE CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2016
1. RECONCILIATION OF LOSS BEFORE TAX TO CASH GENERATED FROM OPERATIONS
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2016 30 June 2015 31 Dec 2015
£ £ £
Loss before tax (448,139) (528,476) (972,776)
Depreciation 195 - -
Shares issued in lieu of remuneration - - 28,529
Gain on foreign exchange currency movement (37,828) - (6,560)
Finance income (4,571) (2,537) (7,275)
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(490,343) (531,013) (958,082)
Increase in trade and
other receivables (26,737) (4,729) (20,735)
(Decrease)/Increase in trade and
other payables (97,742) (54,446) 19,865
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Net cash used in operations (614,822) (590,188) (958,952)
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2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the cash flow statement in respect of cash and cash equivalents are in respect of the statement of financial position amounts:
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2016 30 June 2015 31 Dec 2015
£ £ £
Cash and cash equivalents 1,098,594 1,469,573 1,860,662
Cash and cash equivalents consist of cash in hand and balances with banks.
NOTES TO THE FINANCIAL STATEMENTS UNAUDITED RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2016
1. Basis of preparation
These interim financial statements for the six month period ended 30 June 2016 have been prepared using the historical cost convention, on a going concern basis and in accordance with applicable International Financial Reporting Standards as adopted by the European Union ("IFRS") and with those parts of the UK Companies Act 2006 applicable to companies reporting under IFRS as adopted by the European Union. They have also been prepared on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2016, and which are also consistent with the accounting policies applied for the year ended 31 December 2015 except for the adoption of any new standards and interpretations.
These interim results for the six months ended 30 June 2016 and the comparatives for the six months ended 30 June 2015 are unaudited and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2015 have been delivered to the Registrar of Companies and filed at Companies House and the auditors' report on those financial statements was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Loss per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares of 911,783,126 (30 June 2015 - 736,490,500 and 31 December 2015 - 824,857,193) outstanding during the period. There is no difference between the basic and diluted loss per share.
3. Restricted bank deposits
In February 2015, US$500,000 was placed on deposit with Habib Bank as security for a performance bond. The deposit is repayable on compliance with the conditions of the bond.
4. Called up share capital
(Unaudited) (Unaudited) (Audited)
30 June 2016 30 June 2015 31 Dec 2015
£ £ £
Allotted, called up and fully paid
911,783,126 Ordinary shares of 0.1p each 911,783 911,783 911,783
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The number of shares in issue was as follows:
Number of shares
Balance as 31 December 2014 389,009,493
Issued during the period 522,773,633
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Balance at 30 June 2015 911,783,126
Issued during the period -
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Balance at 31 December 2015 911,783,126
Issued during the period -
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Balance at 30 June 2016 911,783,126
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5. Post balance sheet events
There are no post balance sheet events to report.
For further information:
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Oracle Coalfields PLC Shahrukh Khan
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+44 (0) 203 102 4807 |
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Brandon Hill Capital Limited Oliver Stansfield
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+44 (0)203 463 5000 |
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Peterhouse Corporate Finance Charles Goodfellow
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+44 (0)20 7220 9791 |
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Grant Thornton UK LLP Salmaan Khawaja, Richard Tonthat, Daniel Bush
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+44 (0) 207 373 5100 |
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Blythe Weigh Communications Tim Blythe, Camilla Horsfall, Megan Ray
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+44 (0) 207 138 3204 |
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Fortbridge Consulting Matt Beale, Bill Kemmery
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+44 (0) 7966 389196 |
The information contained within this announcement is considered to be inside information, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, prior to its release.
In accordance with the AIM Rules for Companies, a copy of this announcement will be made available on Oracle's website at: www.oraclecoalfields.com
This information is provided by RNS
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