11 March
2020
ALTONA ENERGY PLC
(“Altona” or “the Company”)
Final Results
For the Year Ended
30 June 2019
Altona Energy plc (NEX: ANR.PL), a mining exploration company
focused on the evaluation, development and extraction of coal
assets in South Australia though
the process of in-situ gasification, announces its final results
for the year ended 30 June 2019.
HIGHLIGHTS
- Non-renewal of historic Arckaringa mining tenements
significantly reducing commitments
- Leading to a one-off Impairment Charge of £11 million for the
year
- Negotiating the acquisition of new Petroleum Exploration
Licence in South Australia
- 2020 strategy to commence In-Situ Gasification project once
funding is in place
- Open Offer announced on 11 March
2020 to fund new operations
For further information, please visit www.altonaenergy.com or
contact:
Altona Energy
plc
Qinfu Zhang, Executive Director
Philip Sutherland, Non-Executive Director |
+44 (0) 7795 168 157
+61 (0)402 440 339 |
Alfred Henry
Corporate Finance Ltd (NEX Corporate Adviser)
Jon Isaacs / Nick Michaels |
+44 (0) 20 3772 0021 |
|
|
Leander (Financial
PR)
Christian Taylor- Wilkinson
|
+44 (0) 7795 168 157 |
Company Information
Altona is an exploration company focused on the evaluation,
development and extraction of coal assets in South Australia though the process of in-situ
gasification.
The Company was admitted to trading on AIM on 10 March 2005 and was subsequently admitted to
NEX on 1 February 2019. A copy of its admission documents
dated 4 March 2005 can be accessed on
its website, www.altonaenergy.com. This website is where
items can be inspected under Rule 75 of the NEX Rules for Issuers,
from 1 February 2019.
EXECUTIVE CHAIRMAN’S STATEMENT
The year under review, to 30 June
2019, was a time of major change for the Company, as it
tightened its board structure and repositioned itself closer to its
historic mining roots in South
Australia.
A number of initiatives which were started in 2018, were
subsequently cancelled at the start of 2019, following the
resignation and dismissal of a number of directors from the board,
at the Annual General Meeting held on 25
January 2019. Specifically, these lapsed initiatives
involved a partnership with the pyrolysis company Leinad Ltd and a
possible coal project on the Willoughby seam in the Company’s
Westfield tenement.
Further, the year in general was harmful for both the profile
and valuation of the Company, where we saw the share price fall
from 325p on 3 July 2018 (factoring
in the 1000 to 1 share consolidation of 18
October 2018) to 16.5p on 31 January
2019, when the Company lost its AIM listing and moved to the
NEX Exchange Growth Market. As Executive Chairman, I am the first
to apologise to shareholders for the lack of any clear operational
direction during 2018 and also the unfortunate association the
Company had with a number of disruptive investors, all of whom are
no longer shareholders of the Company.
In the first half of 2019, the board explored the possibility of
an investment into an operational vanadium mining company in the
Shaanxi region of China, which involved a great deal of due
diligence, including an in-depth visit to the mine by the Company’s
UK based director. After weighing up the changing economic and
industry factors, it was decided, in October
2019, not to go ahead with the investment.
Also in the first half of 2019, the Company continued to look to
further its interests in the in-situ gasification (“ISG”) sector in
South Australia, where, over the
years, we have collated a lot of information on the market
dynamics, technological advantages and product usage. The Company
has always held a strong relationship with the region’s Department
for Mining and Energy, through its long-term Australian director
Philip Sutherland. And, although the
process to assess and ”find” the right coal-bearing tenement for
Altona has been long, the Company announced on 21 November 2019, that it had entered into
negotiations to acquire a Petroleum Exploration Licence Application
(“PELA”) over a tenement close to its existing Exploration
Licences.
Board Changes
On 24 January 2019, Nicholas Lyth and Henry
Kloepper resigned with immediate effect as Chief Executive
Director and a non-Executive Director, respectively. On
25 January 2019, at the Company’s
AGM, the resolutions to re-appoint Robert
Hales and Timothy Jones as
non-Executive Officers were not passed and, subsequently both were
asked to leave the board with immediate effect.
Philip Sutherland, a director of
Altona since 2004 and who had resigned his position in December 2018,
was reappointed as a non-Executive Director on 1 March 2019.
On 19 November 2019, Ma Chi, the board representative of the
Company’s long-term joint venture partner, Sino-Aus Energy Group
Ltd, resigned as a non-Executive Officer with immediate effect,
following the termination of the joint venture agreement.
The Directors appreciate that the current board make-up is
smaller than many listed companies. With this is mind we are
currently meeting with individuals who have a good knowledge of the
mining and energy sectors, as well as those with connections to the
capital markets in London and
Australia.
Financial Review
During the period under review the Group made a loss before
taxation of £11,657,000 (2018: loss £645,000). The majority of the
loss before tax relates to the impairment of the intangibles assets
of £11,033,000, due to the Company relinquishing its ownership of
its three historic Exploration Licences in the Arckaringa Basin.
These tenements cannot become an operational asset for the Company,
due to the PELA needed to perform ISG is owned by another entity
and it is the Board’s belief that the costs to maintain them are
counter-productive to the Company’s current strategic focus.
The Company has focused on reducing unnecessary costs from the
business, by streamlining the board and closing its office in
Adelaide. Further, the main
London office has been changed to
be that of its financial PR adviser and non-Executive Director,
where no charge is being levied. The Company’s Chairman, Qinfu
Zhang has taken a reduction in salary to £25,000 from £105,000 for
a period of 12 months, effective from 1
December 2019.
As at 30 June 2019, the Group was
in an overdraft position of £96,000 (30 June
2018: cash at bank of £391,000)
The Company was admitted to trading on the NEX Exchange Growth
Market on 1 February 2019, following
a 14-years listing on AIM.
Post Balance Sheet Events –
Negotiations to acquire PELA 517
As mentioned above, the Company is now in exclusive talks with a
third party, Ahava Energy PTY Ltd, to acquire a new mining licence
in South Australia. This licence,
a Petroleum Exploration Licence Application (“PELA”) will allow the
Company to commence exploration into a viable ISG project (also
known as Underground Coal Gasification, or UCG). In 2015, when the
Company was at the cusp of starting a similar project, it was
informed that it did not own the necessary PELA over its three
tenements, which put a halt to the project.
The new tenement covered by the PELA is close to the Company’s
historic Arckaringa tenements and covers 5,000 sq kms, twice the
size of the existing tenements. The tenement is divided into two
areas; a smaller northern area which overlaps the Company’s
historic Exploration Licences at Westfield and Murloocoppie to the
north and west, respectively, and a significantly sized southern
area (over 4,000 sq km), of which 50% crucially sits outside the
environmentally sensitive Great Artesian Basin, meaning issues,
caused by the natural aquifer of the basin, will be substantially
less.
The more significant and potentially more rewarding southern
area of the PELA, whilst never having been tested for deep coal
deposits suitable for the ISG process is, however, situated between
other major coal bearing tenements, providing enough evidence for
WSP to warrant further investigation. Should this exploration be
successful (i.e. by finding at least two coal bearing deposits
between 100m and 1,400m – the depth most suitable for ISG), the
Company will look to quickly move towards obtaining the necessary
permits and funding to start a test production facility, within 2-3
years.
It has been suggested by WSP Australia Pty, the Company’s mining
consultant, that the longer term plan could be for the Company to
create an “Energy Precinct”, utilising wind and solar energy to
reduce costs for the extraction process, leading to the supply of
power (as well as chemical by-products, such as liquid ammonia,
hydrogen, ethanol and other synthetic fuels) to the South
Australian and broader markets.
The Company will need to raise funds in order to acquire the new
PELA and to pay for the initial exploration work, as well as for
general working capital purposes.
Outlook
The Company is now poised to begin new explorations on PELA 517,
should a successful fund raising be completed and the licence
acquired. The short-term work plan is then to appoint WSP to carry
out the first stages of investigation, ahead of a drilling
programme which could begin as soon as early 2021.
Therefore, I think it is fair and only right to now draw a line
under the past 18 months and start looking forward to the potential
benefits of this new ISG project, which has the strong likelihood
of increasing shareholder value, in a market where the end products
are much in demand.
Qinfu Zhang
Executive Chairman
Altona Energy Plc
11 March 2020
STATEMENT OF CONSOLIDATED
COMPREHENSIVE INCOME
For the year ended 30 June 2019
|
|
|
Group |
|
|
|
|
Notes |
2019
GBP’000 |
2018
GBP’000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
|
(624) |
(645) |
|
Impairment
expense |
8 |
(11,033) |
- |
|
Operating
loss |
4 |
(11,657) |
(645) |
Loss
before taxation |
|
(11,657) |
(645) |
|
Tax (charge) /
credit |
7 |
- |
- |
|
Loss for
the year attributable to the
equity holders of the parent |
|
(11,657) |
(645) |
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
Exchange differences on translating foreign operations that
may be subsequently reclassified to profit or loss |
|
(187) |
(575) |
|
Total comprehensive
income attributable to the equity holders of the parent |
|
(11,844) |
(1,220) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share (expressed in pence per share)
- Basic attributable to the equity holders of the parent |
6 |
(894.84)p |
(63.05)p |
|
- Diluted
attributable to the equity holders of the parent |
6 |
(894.84)p |
(63.05)p |
|
|
|
|
|
|
|
|
All of the above operations during the year are continuing.
STATEMENTS OF FINANCIAL POSITION
As at 30 June
2019
|
Notes |
Group
2019
GBP’000 |
Group
2018
GBP’000 |
Company
2019
GBP’000 |
Company
2018
GBP’000 |
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets |
8 |
- |
11,219 |
- |
- |
Investment in subsidiaries |
9 |
- |
- |
- |
1,432 |
Other receivables |
10 |
3 |
3 |
- |
11,096 |
Total non-current assets |
|
3 |
11,222 |
- |
12,528 |
Current
assets |
|
|
|
|
|
Trade and other receivables |
10 |
32 |
38 |
32 |
37 |
Cash and cash equivalents |
|
- |
391 |
- |
211 |
Total current assets |
|
32 |
429 |
32 |
248 |
|
|
|
|
|
|
TOTAL ASSETS |
|
35 |
11,651 |
32 |
12,776 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
11 |
310 |
91 |
310 |
84 |
Total current liabilities |
|
310 |
91 |
310 |
84 |
|
|
|
|
|
|
TOTAL LIABILITIES |
|
310 |
91 |
310 |
84 |
|
|
|
|
|
|
NET ASSETS |
|
(275) |
11,560 |
(278) |
12,692 |
|
|
|
|
|
|
EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF THE PARENT |
|
|
|
|
|
Share capital |
12 |
1,431 |
1,427 |
1,431 |
1,427 |
Share premium |
|
18,697 |
18,692 |
18,697 |
18,692 |
Merger reserve |
|
2,001 |
2,001 |
2,001 |
2,001 |
Foreign exchange reserve |
|
1,224 |
1,411 |
- |
- |
Retained deficit |
|
(23,628) |
(11,971) |
(22,407) |
(9,428) |
TOTAL EQUITY |
|
(275) |
11,560 |
(278) |
12,692 |
The loss within the parent company financial statements for the
year was £12,979,000 (2018: £489,000).
The financial statements were approved by the Board and
authorised for issue on 11 March
2020.
STATEMENTS OF CASH FLOWS
For the year ended 30 June 2019
|
|
Group |
Company |
|
|
2019
GBP’000 |
2018
GBP’000 |
2019
GBP’000 |
2018
GBP’000 |
Cash flows from
Operating activities |
|
|
|
|
|
(Loss)/profit for the
year before taxation |
|
(11,657) |
(645) |
(12,979) |
(489) |
Shares
issued for services |
9 |
- |
9 |
- |
Impairment
of intangibles |
11,033 |
- |
- |
- |
Impairment
of i/c loan / investment in subsidiary |
- |
- |
12,434 |
- |
(Increase)/decrease in
receivables |
|
6 |
(24) |
6 |
(24) |
Increase/(decrease) in
payables |
|
123 |
(11) |
129 |
(11) |
Cash used in
operations |
|
(486) |
(680) |
(401) |
(524) |
Income tax benefit
received |
|
- |
- |
- |
- |
Net
cash used in operating activities |
(486) |
(680) |
(401) |
(680) |
|
|
|
|
|
|
Cash flows from Investing
activities |
|
|
|
|
|
Loans (to) / from subsidiaries |
|
- |
- |
94 |
(324) |
Interest received |
|
- |
- |
- |
- |
Net cash generated
from/(used in) investing activities |
- |
- |
94 |
(324) |
|
|
|
|
|
|
Cash flows from Financing
activities |
|
|
|
|
|
Proceed from bank overdraft |
|
96 |
- |
96 |
- |
Proceeds from issue of shares |
|
- |
1,095 |
- |
1,095 |
Costs of issue |
|
- |
(46) |
- |
(46) |
Net cash inflow from
financing |
|
96 |
1,049 |
96 |
1,049 |
|
|
|
|
|
|
Net increase/(decrease)
in cash and cash equivalents |
(390) |
369 |
(211) |
201 |
Cash and
cash equivalents at beginning of the year |
391 |
15 |
211 |
10 |
Effect of exchange rate
changes on cash and cash equivalents |
(1) |
7 |
- |
- |
Cash and cash
equivalents at 30 June |
- |
391 |
- |
211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF CHANGES IN EQUITY
For the year ended 30 June 2019
Attributable to equity holders of the
parent
|
Share
capital |
Share
Premium |
Merger
reserve |
Foreign exchange
reserve |
Retained
deficit |
Total
equity |
Group |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
|
|
|
|
|
|
|
As at 1 July 2017 |
892 |
18,178 |
2,001 |
1,986 |
(11,326) |
11,731 |
Profit/(loss) for the year |
- |
- |
- |
- |
(645) |
(645) |
Other comprehensive income |
- |
- |
- |
(575) |
- |
(575) |
Total comprehensive income |
- |
- |
- |
(575) |
(645) |
(1,220) |
Issue of shares |
535 |
560 |
- |
- |
- |
1,095 |
Cost of share issue |
- |
(46) |
- |
- |
- |
(46) |
Balance at 30 June 2018 |
1,427 |
18,692 |
2,001 |
1,411 |
(11,971) |
11,560 |
Profit/(loss) for the year |
- |
- |
- |
- |
(11,657) |
(11,657) |
Other comprehensive income |
- |
- |
- |
(187) |
- |
(187) |
Total comprehensive income |
- |
- |
- |
(187) |
(11,657) |
(11,844) |
Issue of shares |
4 |
5 |
- |
- |
- |
9 |
Cost of share issue |
- |
- |
- |
- |
- |
- |
Balance at 30 June 2019 |
1,431 |
18,697 |
2,001 |
1,224 |
(23,628) |
(275) |
Company |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
|
|
|
|
|
|
|
Balance at 1 July 2017 |
892 |
18,178 |
2,001 |
- |
(8,939) |
12,132 |
Loss for the year |
- |
- |
- |
- |
(489) |
(489) |
Other comprehensive income |
- |
- |
- |
- |
- |
- |
Total comprehensive income |
- |
- |
- |
- |
(489) |
(489) |
Issue of shares |
535 |
560 |
- |
- |
- |
1,095 |
Cost of share issue |
- |
(46) |
- |
- |
- |
(46) |
Balance at 30 June 2018 |
1,427 |
18,692 |
2,001 |
- |
(9,428) |
12,692 |
Loss for the year |
- |
- |
- |
- |
(12,979) |
(12,979) |
Other comprehensive income |
- |
- |
- |
- |
- |
- |
Total comprehensive income |
- |
- |
- |
- |
(12,979) |
(12,979) |
Issue of shares |
4 |
5 |
- |
- |
- |
9 |
Cost of share issue |
- |
- |
- |
- |
- |
- |
Balance at 30 June 2019 |
1,431 |
18,697 |
2,001 |
- |
(22,407) |
(278) |
The following describe the nature and purpose of each reserve
within owners’ equity:
Reserve |
Description and
Purpose |
Share capital |
Amount subscribed for
share capital at nominal value |
Share premium |
Amount subscribed for
share capital in excess of nominal value. |
Merger reserve |
Reserve created on
issue of shares on acquisition of subsidiaries in prior years. |
Foreign exchange
reserve |
Cumulative translation
differences of net assets of subsidiaries. |
Retained deficit |
Cumulative net gains
and losses recognised in the consolidated statement of
comprehensive income |
NOTES TO PRELIMINARY RESULTS FOR THE
YEAR ENDED 30 JUNE 2019
-
The financial information set out above does not constitute
statutory accounts for the purpose of Section 434 of the Companies
Act 2006.The financial information has been extracted from the
statutory accounts of Altona energy Plc and is presented using the
same accounting policies, which have not yet been filed with the
Registrar of companies, and on which the auditors gave an adverse
opinion on 11 March 2020.
Below we have reproduced the qualification contained with the
audit report.
“Adverse Opinion
We have audited the Financial
Statements of Altona Energy Plc (the ‘Parent Company’) and its
subsidiaries (‘the Group’) for the year ended 30 June 2019 which comprise the Statement of
Consolidated Comprehensive Income, the Consolidated and Parent
Company Statements of Financial Position, the Consolidated and
Parent Company Statements of Cash Flows, the Consolidated and
Parent Company Statements of Changes in Equity and the related
notes to the Financial Statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and as regards the Parent Company Financial
Statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion, because of
inappropriate use of the going concern basis for the preparation of
the financial statements referred to in the Basis for adverse
opinion section of our report, the financial statements:
-
do not give a true and fair view of
the state of the Group’s and the Parent Company’s affairs as at
30 June 2019 and of the Group’s and
Parent Company’s loss for the year then ended;
-
have not been prepared in accordance
with IFRSs as adopted by the European Union; and
-
have not been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for adverse
opinion
As explained in the Material
uncertainty related to going concern paragraph, at the date of
signing of these accounts, the Group does not have sufficient
resources to continue trading for the foreseeable future. The
Company is currently at the ceiling of its overdraft facility with
its current bankers and the facility is due for renewal in
June 2020, where the Company may have
to settle the liability. The Group’s ability to continue as a going
concern is dependent on obtaining additional equity to fund current
and future working capital requirements, and repayment of the
current debt finance. The financial statements do not contain the
adjustments that may be necessary to reflect that the fact that the
company is not a going concern. Consequently, we are of the belief
that the use of the going concern basis for the preparation of the
financial statements is inappropriate.
We conducted our audit in accordance
with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit
of the Financial Statements section of our report. We are
independent of the Group and Parent Company in accordance with the
ethical requirements that are relevant to our audit of the
Financial Statements in the UK, including the FRC’s Ethical
Standard, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Other matter
The financial statements of the Group
and the Company for the year ended 30 June
2018 were audited by another auditor who expressed an
unqualified opinion on those statements on 28 December 2018.
Material
uncertainty related to going concern
We draw attention to note 1 in the Financial
Statements, which identifies conditions that may cast significant
doubt on the Group’s and Company’s ability to continue as a going
concern. The Group incurred a net loss of £11.6 million during the
year ended 30 June 2019, relating to
a one-off Impairment Charge due to the cancellation of its historic
mining licences at Arckaringa. At 30 June
2019 the Group had net current liabilities of £278k. The
Financial Statements have been prepared on the going concern basis
which is reliant on the successful fundraise by the Group to fund
its operations for the foreseeable future. The going concern
assessment of the Group is also reliant on the successful
acquisition of PELA 517 by the Group which it is currently in
negotiations to buy. This new mining licence is expected to contain
minimum expenditure requirements and the ability to meet these will
be dependent on the continued ability to raise new funds. As stated
in note 1, these events or conditions, along with the other matters
as set forth in note 17, indicate that a material uncertainty
exists that may cast significant doubt on the ability of the Group
and Company to continue as a going concern.”
The preliminary announcement of the results for the year ended
30 June 2019 was approved by the
board of directors on 11 March
2020.
2.
EARNINGS PER SHARE
The loss for the year attributed to shareholders is £11,657,000
(2018: loss £645,000).
This is divided by the weighted average number of Ordinary
shares outstanding calculated to be 1.602 million (2018: 1.023
million) to give a basic loss per share of 894.84 pence (2018: basic loss per share of
63.05 pence).
In the current and prior year there were no potentially dilutive
ordinary shares at the year end because the share price at year end
was below the strike price of the potentially dilutive options and
warrants. The potential future share issues that may dilute
the profit/(loss) per share relate to options in issue disclosed at
note 16.
-ends-