Embargoed until
7am
27 March 2019
Altona Energy
plc
(“Altona” or “the Company”)
Interim
Results
Altona (NEX: ANR.PL), is an emerging energy company focused on
developing its coal assets located in South Australia. The Company, which also has
interests in mining for industrial metals in China, announces its unaudited interim results
for the six months ended 31 December
2018.
Operational Highlights (Pre and Post Period End)
-
Underground Coal Gasification project in South Australia being evaluated
-
Possible investment in a Chinese vanadium mine under
consideration
-
Restructured board focused on shareholder value and corporate
governance
-
£500,000 loan note subscribed for by joint venture partner,
Sino-Aus Energy Ltd
-
Total assets are £11.2 million, with £19.8 million of tax losses
which could be applied against future profits
Qinfu Zhang, Executive Chairman of Altona, commented,
“Following a challenging 2018, the current board of Altona is
focused on the creation of value for shareholders. This is being
approached in two ways; firstly, by the re-evaluation of our
existing coal assets in Australia,
with the view to gaining the necessary licences during the course
of 2019, which will allow us to start the coal extraction within
the next two years; and secondly, through the investment in a
Chinese vanadium mining company, which the board is currently
considering, and which is dependent upon the Chinese government
granting the necessary permit to allow the deal to progress.”
For further information, please visit www.altonaenergy.com or
contact:
Altona Energy
plc
Qinfu Zhang, Executive Chairman |
+44 (0) 7795 168 157 |
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 and
development of its significant coal resource exceeding 7 billion
tonnes (1.3 billion tonnes historic JORC compliant) in the northern
portion of the Permian Arckaringa Basin in South Australia. Through its wholly
owned Australian subsidiary Arckaringa Energy Pty Ltd, Altona holds
a 100% interest in three exploration licences covering 1,944 sq.
kms in the northern portion of the Permian Arckaringa Basin in
South Australia including three
coal deposits – Westfield (EL5676), Wintinna (EL5677) and
Murloocoppie (EL5678). All three deposits lie close to the
Adelaide to Darwin railroad and
the Stuart Highway.
The Company is currently evaluating an investment in a Chinese
vanadium mining company.
The Company was admitted to trading on AIM on 10 March 2005 and transferred its listing to NEX
Exchange Growth Market 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.
EXECUTIVE CHAIRMAN’S STATEMENT
The six-month period under review from 1
July 2018 was a challenging period for the Company as is set
out in recent announcements. With these issues now resolved the
board of Altona is now fully focused on achieving shareholder
value. The challenges referred to include a third-party pyrolysis
licencing agreement entered into in August
2018, and which the board is no longer pursuing as it falls
outside the core interest of the business and its current
management.
However, at the Company’s Arckaringa project, in South Australia, where Altona owns the mining
exploration licences to three sizeable tenements, progress was made
with the receipt of a licence to construct water wells from the
environmental regulator. The Company has been reviewing its
strategy going forward which has included reassessing the extensive
geological and hydrological data base at its disposal. Based on
this data and other historical information and experience a cogent
cost effective and achievable plan for the development of the coal
assets is being formulated.
In October, the Company proposed and subsequently executed a
capital reorganisation of the shares, resulting in a thousand to
one consolidation. The current board believes that this action has
been partly responsible for the significant decline in the share
price in the latter part of 2018 and first month of 2019 and is
also confusing for shareholders. The new Board, in conjunction with
its advisors, is considering whether remedial action is required
and would have the desired effect to bring the share price more
closely in-line with its original value.
Financial Review
The financial loss of the Group for the six months ended
31 December 2018 was £366,000 (H1
2017: £258,000). Cash in bank at 31
December 2018 was £19,000 and the Company has total assets
of £11,173,000, which includes £11,074,000 of intangible
exploration and evaluation costs.
The Group has in excess of £19.8 million of tax losses carried
forward which it hopes to be able to be offset against future
profits.
An Australian Government Resource Development Grant of the order
of AUD104,000 is being actively sought.
Following the board changes subsequent to period end, the
current board and management are implementing policies and
procedures to dramatically improve the financial stewardship of the
Company moving forward.
Post Balance Sheet Events
Following a requisition for a general meeting on 14 December 2018, the shareholders met on 14
January and voted against the resolutions to remove Qinfu Zhang and
Ma Chi from the board. Subsequently,
Nick Lyth, Chief Executive and
Henry Kloepper, Non-Executive
Director resigned from the board with immediate effect on
24 January 2019. At the Company AGM
on 25 January 2019, shareholders
voted against the re-election of Timothy
Jones and Robert Hales, as
Non-Executive Chairman and Non-Executive Director respectively.
Qinfu Zhang resumed his role as Executive Chairman of the
Company and Philip Sutherland, who
had resigned his role as Operations Director (Australia) in December
2018, was re-appointed to the board as Non-Executive
Director on 1 March to continue his key role as Company
representative in South Australia.
Christian Taylor-Wilkinson was
appointed Non-Executive Director on 1 February, as well as being
reappointed as financial PR consultant to Altona, a role his
company Leander, had carried out between 2014 and 2018. A highly
experienced UK non-executive director has provisionally accepted a
position on the board, conditional to funding being received by
Altona.
Alfred Henry Corporate Finance Ltd was appointed as Corporate
Adviser on 1 February, following the Company’s change in listing
from AIM to NEX Exchange Growth Market on the same day.
Also, on 1 February, the Company announced that its long-term
joint venture partner, Sino-Aus Energy Group Ltd (Sino-Aus), had
subscribed £500,000 for a convertible unsecured loan note, due to
be redeemed on 31 July 2020. Sino-Aus
is in the process of obtaining a permit from the Chinese government
to transfer the funds out of China.
Arckaringa UCG Project
The board has revived its focus on its coal assets in
South Australia and is currently
in meetings with the Mining and Energy Department of the South
Australian government to assess the Company’s requirements for
2019. Further, the Company is monitoring the successes of Leigh
Creek Energy, which owns the neighbouring mining tenements, and
which has now commenced its commercial underground coal
gasification (“UCG”) project. Leigh Creek Energy, which is listed
on the Australian Stock Exchange (“ASX”) has seen its share price
rise by almost 200% since it announced its successful syngas test
burn in October 2018. Whilst Altona
faces a more challenging environment with its own tenements, the
board is positive that a similar achievement can be made in the
long-term.
With this in mind, the board is reviewing its position with the
South Australian government as to the Petroleum Exploration Licence
Application (“PELA”) 604, a licence which covers the majority of
the mining tenements the Company owns, and which is currently owned
by Tri Star Energy, an American mining company. Primarily, the
board is reviewing whether it can work around PELA 604 (in the
non-overlapping areas of the tenements) or acquire the Licence from
Tri Star Energy or, enter a co-operative agreement with Tri Star
Energy or, request the South Australian government to not grant
PELA 604 (the application was lodged by Tri-Star on 14 March 2016 and remains under consideration by
the regulator) and grant the Company PELA 666, which was filed by
Altona on 25 October 2016 and covers
the same geographical area.
Sino-Aus remains committed to its AUD30 million investment into
the Arckaringa project, conditional upon the correct licences being
granted.
Possible Vanadium Mine Investment
As announced on 14 January 2019,
the Company is evaluating an investment into a Chinese vanadium
mining company, in which Qinfu Zhang and his business associates
own a 40% stake. The process is following the strict regulations
set by the Chinese government, the first of which is for the
company to obtain a permit to allow it to enter into a joint
venture agreement with a non-Chinese company. Whilst this process
is being negotiated, the company is conducting a detailed
exploration survey which will be followed by a JORC evaluation
report.
The mine’s main product is Vanadium Pentoxide
(V2O5) which is currently in very high demand
in many industries, including steel strengthening, energy storage
in industrial batteries, thermal imaging equipment, nano-fibre
applications and as a catalyst in many industrial chemical
reactions.
A representative of Altona’s board will visit the mine in April
to meet with the company and commence due diligence. While the
investment cannot move forward until a permit from the Chinese
government has been granted, the board and its advisers are
establishing a plan of action so it can move forward quickly, upon
a successful issue of the required permit.
Outlook
The Company is focused on two potentially significant projects;
coal-to-syngas in South Australia,
through is its Arckaringa licences, and vanadium in China, through a possible joint venture
agreement and investment. The board is aware that both projects
require the granting of licences and permits from third parties and
that much work will need to be done to bring either to fruition.
However, following the poor strategic decisions of 2018, the board
realises that the need for a successful investment must be achieved
in order to start returning value to shareholders and, with this in
mind, is fully committed to both projects.
Qinfu Zhang
Executive Director
26 March 2019
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 DECEMBER 2018
|
Notes |
Unaudited
Half-year ended
31 Dec 2018 |
Unaudited
Half-year ended
31 Dec
2017 |
Audited
Year
ended
30 June
2018 |
|
|
£’000 |
£’000 |
£’000 |
Total
administrative expenses and loss from operations |
|
(366) |
(258) |
(645) |
Finance income |
|
- |
- |
- |
|
|
|
|
|
Loss before
taxation |
|
(366) |
(258) |
(645) |
Tax |
3 |
- |
- |
- |
|
|
|
|
|
Loss for the
financial period |
|
(366) |
(258) |
(645) |
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
Exchange differences
on translating foreign operations maybe subsequently reclassified
to profit or loss |
|
(148) |
(258) |
(575) |
|
|
|
|
|
Total comprehensive
profit/(loss) attributable to the equity holders of the parent |
|
(514) |
(516) |
(1,220) |
|
|
|
|
|
Loss per share |
|
|
|
|
- Basic and
diluted |
4 |
(23.51p) |
(21.85p) |
(63.05p) |
|
|
|
|
|
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
AS AT 31
DECEMBER 2018
|
|
Unaudited
31 Dec 2018
£’000 |
Unaudited
31 Dec
2017
£’000 |
Audited
30 June 2018
£’000 |
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
|
11,074 |
11,541 |
11,219 |
Other receivables |
|
3 |
3 |
3 |
Total Non-current assets |
|
11,077 |
11,544 |
11,222 |
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
|
77 |
23 |
38 |
Cash and cash equivalents |
|
19 |
756 |
391 |
Total Current assets |
|
96 |
779 |
429 |
|
|
|
|
|
Total assets |
|
11,173 |
12,323 |
11,651 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
5 |
127 |
60 |
91 |
Total Current liabilities |
|
127 |
60 |
91 |
|
|
|
|
|
Total liabilities |
|
127 |
60 |
91 |
|
|
|
|
|
NET ASSETS |
|
11,046 |
12,263 |
11,560 |
|
|
|
|
|
Capital and reserve attributable
to the equity holders of the Parent |
|
|
|
|
Share capital |
|
1,427 |
1,427 |
1,427 |
Share premium |
|
18,692 |
18,692 |
18,692 |
Merger reserve |
|
2,001 |
2,001 |
2,001 |
Foreign exchange reserve |
|
1,263 |
1,727 |
1,411 |
Retained losses |
|
(12,337) |
(11,584) |
(11,971) |
TOTAL EQUITY |
|
11,046 |
12,263 |
11,560 |
|
|
|
|
|
CONSOLIDATED STATEMENT OF
CASHFLOWS
FOR THE HALF YEAR ENDED 31 DECEMBER 2018
|
Unaudited
Half-year ended
31 Dec
2018 |
Unaudited
Half-year ended
31 Dec
2017 |
Audited
Year
ended
30 June
2018 |
|
£’000 |
£’000 |
£’000 |
|
|
|
|
Operating activities |
|
|
|
Loss before taxation |
(366) |
(258) |
(645) |
Finance income |
- |
- |
- |
Share based payments |
- |
- |
- |
Foreign exchange on loans to
controlled entities |
- |
2 |
- |
(Increase)/ decrease in
receivables |
(39) |
(9) |
(24) |
Increase / (decrease) in payables
and provisions |
36 |
(42) |
(11) |
Cash used in operations |
(369) |
(307) |
(680) |
Income tax benefit received |
- |
- |
- |
Net cash outflow used in
operating activities |
(369) |
(307) |
(680) |
|
|
|
|
Investing activities |
|
|
|
Interest received |
- |
- |
- |
Net cash outflow from investing
activities |
- |
- |
- |
|
|
|
|
Financing activities |
|
|
|
Proceeds from issue of shares |
- |
1,048 |
1,095 |
Costs of issue |
|
- |
(46) |
Net cash inflow from financing
activities |
- |
1,048 |
1,049 |
|
|
|
|
Increase/decrease in cash and
cash equivalents in period/ year |
(369) |
741 |
369 |
Cash and cash equivalents at
beginning of period / year |
391 |
15 |
15 |
Effect of exchange rate changes on
cash and cash equivalents |
(3) |
- |
7 |
Cash and cash equivalents at end
of period / year |
19 |
756 |
391 |
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE HALF YEAR ENDED 31 DECEMBER 2018
|
Share
capital |
Share
premium |
Merger
reserve |
Foreign exchange reserve |
Retained losses |
Total
shareholders’ equity |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
Balance at 30 June
2016 |
892 |
18,178 |
2,001 |
1,986 |
(11,326) |
11,731 |
Total comprehensive
loss for the period |
- |
- |
- |
(259) |
(258) |
(517) |
Issue of share
capital |
535 |
514 |
- |
- |
- |
1,049 |
Balance at 31 December
2017 |
1,427 |
18,692 |
2,001 |
1,727 |
(11,584) |
12,263 |
Total comprehensive
loss for the period |
- |
- |
- |
(316) |
(387) |
(703) |
Balance at 30 June
2018 |
1,427 |
18,692 |
2,001 |
1,411 |
(11,971) |
11,560 |
Total comprehensive
loss for the period |
- |
- |
- |
(148) |
(366) |
(514) |
Issue of share
capital |
- |
- |
- |
- |
- |
- |
Balance at 31
December 2018 |
1,427 |
18,692 |
2,001 |
1,263 |
(12,337) |
11,046 |
NOTES TO THE INTERIM REPORT
FOR THE HALF YEAR ENDING 31 DECEMBER 2018
1. GENERAL
INFORMATION
Altona Energy Plc (the “Company”) is a company registered in
England and Wales. The
condensed consolidated interim financial statements of the Company
for the six months ended 31 December
2018 comprise the result of the Company and its subsidiaries
(together referred to as the “Group”) and have been prepared in
accordance with the NEX Exchange Growth Market Rules for Issuers.
As permitted, the Company has chosen not to adopt IAS 34 “Interim
Financial Statement” in preparing these interim financial
statements.
The consolidated interim financial information for the period
1 July 2018 to 31 December 2018 is unaudited. In the opinion of
the Directors the condensed interim financial information for the
period presents fairly the financial position, and results from
operations and cash flows for the period in conformity with the
generally accepted accounting principles consistently applied. The
condensed interim financial information incorporates unaudited
comparative figures for the interim period 1
July 2017 to 31 December 2017
and extracts from the audited financial statements for the year to
30 June 2018.
The financial information contained in this interim report does
not constitute statutory accounts as defined by section 435 of the
Companies Act 2006.
The comparatives for the full year ended 30 June 2018 are not the Company’s full statutory
accounts for that year. A copy of the statutory accounts for that
year has been delivered to the Registrar of Companies. The
auditor’s report on those financial statements was unqualified but
did include a reference to the uncertainties surrounding going
concern, to which the auditors drew attention by way of emphasis of
matter and did not contain a statement under s498 (2) – (3) of
Companies Act 2006. The interim report has not been audited or
reviewed by the Company’s auditor. The key risks and uncertainties
and critical accountancy estimates remain unchanged from
30 June 2018 and the accountancy
policies adopted are consistent with those used in the preparation
of its financial statements for the year ended 30 June 2018.
3. TAXATION
The Group has recognised a £Nil tax credit (31 December 2017: £nil and 30 June 2018: £nil) in respect of the concession
for research and development tax credits available to the Group. No
current taxation has been provided due to losses in the period.
4. LOSS PER
SHARE
The basic loss per share is derived by dividing the loss for the
period attributable to ordinary shareholders by the weighted
average number of shares in issue.
|
Unaudited
31 Dec 2018 |
Unaudited
31 Dec 2017 |
Audited
30 June 2018 |
|
|
|
|
Loss for the period (£’000) |
(366) |
(258) |
(645) |
Weighted average number of shares –
expressed in thousands |
1,559 |
1,181 |
1,023 |
Basic loss per share – expressed in
pence |
(23.51p) |
(21.85p) |
(63.05p) |
As the inclusion of the potential ordinary shares would result
in a decrease in the loss per share they are considered to be
anti-dilutive and, as such, the diluted loss per share calculation
is the same as the basic loss per share.
5. TRADE AND OTHER
PAYABLES
|
Unaudited
31 Dec 2018
£’000 |
Unaudited
31 Dec 2017
£’000 |
Audited
30 June 2018
£’000 |
Trade payables |
60 |
22 |
54 |
Accruals and other payables |
67 |
38 |
37 |
|
127 |
60 |
91 |
6.
POST REPORTING DATE
EVENTS
There were no material post reporting date events.