TIDMATC
RNS Number : 7314U
Atlantic Coal PLC
30 June 2009
Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining
30 June 2009
Atlantic Coal Plc ('Atlantic' or 'the Company')
Preliminary Results
Atlantic Coal Plc, the AIM listed opencast coal production and processing
company with activities in Pennsylvania, USA, announces its preliminary results
for the year ended 31 December 2008.
Highlights
* Company continues to bring Stockton Colliery towards full production
* Several obstacles hindering production overcome
* Production for 2009 financial year bolstered by commencement of mining at
Mammoth coal seam on the northern face and mid section of the mine
* As of 31 May 2009, production at Stockton stood at 108,823 tons of run of mine
coal and 27,672 tons of clean coal
* Continued investment in infrastructure: recently ordered a new 21 yard bucket
hydraulic excavator under 4 year lease agreement
Atlantic Coal Managing Director Steve Best said, "We have worked hard this year
to overcome a number of operational issues that have hindered the achievement of
full production levels at our primary asset, the Stockton Colliery in
Pennsylvania. With these obstacles, for the most part surmounted, we have been
steadily increasing production at the mine, which has a defined resource of 4
million tons and have already experienced a significant improvement on last
year's performance."
For further information on the Company, visit: www.atlanticcoal.com or contact:
+--------------------------+---------------------------+-----------------+
| Stephen Best / Greg | Atlantic Coal plc | Tel: 020 7182 |
| Kuenzel | | 1747 |
+--------------------------+---------------------------+-----------------+
| Rod Venables / James | HB Corporate | Tel: 020 7510 |
| Reeve | | 8600 |
+--------------------------+---------------------------+-----------------+
| Daniel Fox Davies | Fox Davies Capital | Tel: 020 7936 |
| | | 5230 |
+--------------------------+---------------------------+-----------------+
| Hugo de Salis / Chris | St Brides Media & Finance | Tel: 020 7236 |
| Welsh | Ltd | 1177 |
+--------------------------+---------------------------+-----------------+
Chairman's Statement
During the year under review, Atlantic has focused on fulfilling its objectives
of advancing its primary asset, the Stockton Colliery in Pennsylvania. Although
the wider economic landscape has been marred by the economic turbulence
experienced during this period, and despite a number of operational issues that
we have had to overcome, I am pleased to report that a steady rate of
development has been maintained by Atlantic Coal and that the outlook for the
Company remains extremely positive.
As investors will be aware, the Stockton Colliery is an operating opencast
anthracite mine located in the Hazle Creek Valley in Pennsylvania, USA. The mine
has a defined reserve of 4 million tons and a historic production capability of
over 400,000 tons of run of mine coal per annum. The colliery has its own
on-site anthracite preparation plant, capable of washing and sizing up to
300,000 tons of anthracite per annum operating on a single shift. It is intended
that this significant excess capacity will be utilised by acquiring additional
sites within a 12 mile radius of the plant.
Financial Review
The loss for the year ended 31 December 2008 was $3,927,465. This performance
was impacted by lower raw coal production from the mine which is explained in
more detail in the Operational Review. Turnover was $2,229,746 with 17,654 tons
of clean coal sold at an average selling price of $126. These results represent
an improvement over our forecast for the year ended 31 December 2008 of revenues
of $1,700,000 and a net loss after tax of $8,500,000.
Operational Review
Production at Stockton during the year ended 31 December 2008 stood at 49,992
tons of run of mine coal resulting in 16,293 tons of clean coal and sales of
17,654 tons. The low level of production during 2008 was directly linked to the
re-tasking of equipment and staff to the railway relocation project, combined
with downtime due to the fine tuning and refining of the new washing plant. As a
result production was only recommenced in November of 2008. Production levels
have been bolstered in recent months by the commencement of mining at the
Mammoth coal seam on the northern face and mid section of the mine. This has
resulted in a steady rise in quality and recovery of coal and a subsequent
increase in volume supplied to the preparation plant.
As of 31 May 2009, production at Stockton stands at 108,823 tons of run of mine
coal and 27,672 tons of clean coal. Total inventory as at 31 May 2009 includes
42,504 tons of run of mine coal and 6,683 tons of clean coal. The Board expects
the stocks of both run of mine and clean coal to continue to build over the
summer months in preparation for the substantial increase in demand expected
during the winter period. To date the Company has sold 22,090 tons of clean coal
resulting in revenues of $2.8 million.
A further boost in production has also been achieved recently following the
discovery of an anomaly in the Mammoth coal seam. Production from this
undocumented pocket of coal extending from the mammoth seam has so far provided
approximately 50,000 tons of additional high yield coal and the management
estimates a further 50,000 tons have yet to be extracted from this area.
A key aspect of our strategy this year has been our ongoing effort to improve
efficiency and the cost effectiveness of our operations. Maintenance of key
equipment can be expensive, time consuming and disruptive to mining operations.
Given this, continued investment in high quality machinery and equipment is an
essential aspect of our business. In June 2009 we announced that the Company has
signed a four year lease agreement for a new 21 yard bucket hydraulic excavator,
at a total cost of US$3.5 million. Delivery of the new excavator will take
around nine months, and it is anticipated that this new piece of machinery will
have a significant effect on our operational efficiency and production capacity.
Additionally, changes implemented following operational reviews at the mine have
allowed us to refocus our mining strategy at the colliery. We have benefitted
from optimised operations and newly discovered areas of coal. Significantly,
this has meant that we have reached a stage where the relocation of the Norfolk
Southern Railway, situated near the north of the current pit area, can be
delayed. The decision to hold off work on completion of the line has been taken
primarily to preserve working capital for the Company. Preparation work for the
area has already been completed and work can recommence on the relocation easily
as and when the Board deems that conditions are right to do so. In the meantime,
the management will focus on maximising the production of coal from the rest of
the site.
The economic downturn has had an adverse effect on the steelmaking industry in
the US, to which a large proportion of our product is sold. However, we serve a
diverse range of markets, and a large volume of our coal is presently sold to
supply heating to homes and public buildings. Supply to these markets is
seasonal and coupled with reduced demand from the steelmakers we have
experienced a dip in sales in recent months. However, we are presently seeing a
resurgence in orders and fully expect sales to increase as coal merchants begin
to stockpile supplies in preparation for winter.
We are also fortunate that the high quality anthracite mined at Stockton is a
versatile material with numerous industrial uses, for example in metallurgy, for
filtration and as a tincture for glass products. We continue to supply our coal
to these niche markets which form an important component of our overall sales
profile. The average price of our anthracite has held steady at US$126 per ton
this year reaching a high of up to $165 per ton for certain products during the
month of December. Prices during the first 6 months of 2009 have averaged US$127
per ton.
Since the Company last reported we have raised over GBP2.5 million through the
placing of new shares. The first placing in September 2008 saw us raise
GBP2,133,560 (including the conversion of GBP283,365 of debt to equity) through
the issue of 426,712,000 new shares to new and existing institutional
shareholders. In April 2009 we announced the raising of GBP500,000 via a placing
of 100,000,000 new ordinary shares in the Company. The ability to raise money in
a financial climate lacking in positive sentiment is an extremely encouraging
sign for the Company and is a testament to investors' faith in the management
and their ongoing strategy to maximize the potential of Atlantic Coal's assets.
The Company has also recently undertaken and announced a restructuring of the
Board of Directors. In a further effort to cut expenditure, non-executive
directors Max Crossland and Ken Ford have elected to step down from their
positions with effect from 30 June 2009. I would like to take this opportunity
to offer my thanks on behalf of the Board to Max and Ken and to wish them the
very best in their future endeavours. In a further change to the Board, we
announced that Ray Petrilla has also stepped down from his position on the Board
to focus on his role as Chief Operations Officer of the Company's subsidiary,
the Stockton Coal Group.
Overall, I believe that Atlantic Coal is in a strong position moving forward.
This has been an important and transformational year for us, during which we
have overcome obstacles that have previously constrained our operations and
profitability. At Stockton we have a defined resource, state of the art
equipment and a rising production capacity with established markets to supply.
Time spent operating in the US has enabled our management to build strong ties
in the local business community over the years, and we will continue to pursue
other business opportunities in Pennsylvania, including potential acquisitions
and farm out agreements for the use of our coal preparation plant amongst other
mines in the area's prolific coalfields. I look forward to reporting further on
our progress in what will hopefully be a bright year for the Company.
Adam Wilson
Non-Executive Chairman
29 June 2009
BALANCE SHEETS
As at 31 December 2008
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| | | Group | | Company |
+------------------------------+------+-----------------------------+--+---------------------------+
| | Note | As at 31 | As at 31 | | As at 31 | As at 31 |
| | | December | December | | December | December |
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Non-Current Assets | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Property, plant and | 3 | 5,097,627 | 6,159,182 | | 212 | 3,065 |
| equipment | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Land, coal rights and | 4 | 7,656,260 | 6,378,121 | | - | - |
| restoration | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Intangible assets | 5 | - | - | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Investment in subsidiaries | 6 | - | - | | 14,235,180 | 19,072,306 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Trade and other receivables | 7 | - | - | | 9,872,350 | 8,217,677 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| | | 12,753,887 | 12,537,303 | | 24,107,742 | 27,293,048 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Current Assets | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Inventories | 8 | 480,191 | 751,589 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Trade and other receivables | 7 | 672,216 | 2,135,420 | | 67,866 | 541,721 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Other assets | 9 | 736,944 | 653,216 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Cash and cash equivalents | 10 | 327,090 | 1,591,300 | | 210,986 | 1,469,689 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| | | 2,216,441 | 5,131,525 | | 278,852 | 2,011,410 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Total Assets | | 14,970,328 | 17,668,828 | | 24,386,594 | 29,304,458 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Current Liabilities | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Trade and other payables | 12 | 3,556,904 | 3,525,155 | | 457,474 | 428,786 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Provisions | 13 | 2,160,000 | 1,080,000 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Borrowings | 14 | 1,098,993 | 950,500 | | 281,496 | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Accrued restoration costs | 15 | 2,100,000 | 428,000 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| | | 8,915,897 | 5,983,655 | | 738,970 | 428,786 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Non-Current Liabilities | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Borrowings | 14 | 3,186,327 | 3,988,413 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Accrued restoration costs | 15 | 5,080,927 | 6,624,209 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| | | 8,267,254 | 10,612,622 | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Total Liabilities | | 17,183,151 | 16,596,277 | | 738,970 | 428,786 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Net (Liabilities) / Assets | | (2,212,823) | 1,072,551 | | 23,647,624 | 28,875,672 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Capital and Reserves | | | | | | |
| Attributable to | | | | | | |
| Equity Holders of the | | | | | | |
| Company | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Called up share capital | 11 | 1,640,945 | 1,057,101 | | 1,640,945 | 1,057,101 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Share premium account | | 15,604,095 | 12,108,661 | | 15,604,095 | 12,108,661 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Merger reserve | | 15,326,850 | 17,112,462 | | 17,112,462 | 17,112,462 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Reverse acquisition reserve | | (12,999,288) | (12,562,742) | | - | - |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Other reserves | | 121,786 | 78,381 | | 121,786 | 78,381 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Foreign currency translation | | (3,322,014) | (277,968) | | (8,595,686) | (277,968) |
| reserve | | | | | | |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Retained earnings / (losses) | | (18,585,197) | (16,443,344) | | (2,235,978) | (1,202,965) |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
| Total Equity | | (2,212,823) | 1,072,551 | | 23,647,624 | 28,875,672 |
+------------------------------+------+--------------+--------------+--+-------------+-------------+
GROUP INCOME STATEMENT
For the year ended 31 December 2008
+-----------------------------------+------+-------+--------+-------------+-------------+
| | | | | Group |
+-----------------------------------+------+-------+--------+---------------------------+
| | | | Note | For the | For the |
| | | | | year ended | period from |
| | | | | 31 December | 1 September |
| | | | | 2008 | 2007 to 31 |
| | | | | $ | December |
| | | | | | 2007 |
| | | | | | $ |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Revenue | | | 1 | 2,229,746 | 2,523,054 |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Cost of sales | | | | (7,520,732) | (3,252,089) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Gross loss | | | | (5,290,986) | (729,035) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Administration expenses | | | | (1,661,768) | (848,628) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Other gains - net | | | 16 | 3,444,188 | 268,143 |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Other income | | | 17 | - | 1,602 |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Operating Loss | | | | (3,508,566) | (1,307,918) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Impairment of goodwill | | | 5 | - | (1,785,612) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Finance income | | | 18 | 54,469 | 21,834 |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Finance costs | | | 18 | (473,368) | (543,767) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Loss Before Taxation | | | | (3,927,465) | (3,615,463) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Corporation tax expense | | | 19 | - | - |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Loss for the Year | | | | (3,927,465) | (3,615,463) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Attributable to Equity Holders | | | | (3,927,465) | (3,615,463) |
+-----------------------------------+------+-------+--------+-------------+-------------+
| | | | | | |
+-----------------------------------+------+-------+--------+-------------+-------------+
| Loss per share attributable to the equity | | | |
| holders of the Company: | | | |
+--------------------------------------------------+--------+-------------+-------------+
| Basic and diluted | | | 20 | 0.44 cents | 1.11 cents |
+-----------------------------------+------+-------+--------+-------------+-------------+
| | | | | | |
+-----------------------------------+------+-------+--------+-------------+-------------+
All activities are classified as continuing.
The Company has elected to take the exemption under Section 230 of the Companies
Act 1985 from presenting the Parent Company Income Statement.
The loss for the parent company for the year was $1,033,013 (for the period 19
November 2007 to 31 December 2007: $302,643)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the year ended 31 December 2008
+----------------------------+-------------+-------------+-------------+------
=---+--------------+--------------+--------------+
| Company ($)
| Share | Share | Merger | Share | Translation | Profit
and | Total equity |
| | capital | Premium
| reserve | option | reserve | loss account | |
|
| | | | reserve |
| |
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| As at 31 December 2006
| 348,784 | 6,593,569 | - | 13,030 | 345,920 |
(374,021) | 6,927,282
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Share capital issued
| 708,317 | 5,532,086 | 17,112,462 | - | - |
- | 23,352,865
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Share based payments
| - | (16,994) | - | 65,351 | - |
- | 48,357
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Foreign currency
| - | - | - | - | (623,888) |
- | (623,888)
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Loss for the year
| - | - | - | - | - |
(828,944) | (828,944)
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| As at 31 December 2007
| 1,057,101 | 12,108,661 | 17,112,462 | 78,381 | (277,968) |
(1,202,965) | 28,875,672
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Share capital issued
| 583,844 | 3,495,434 | - | - | - |
- | 4,079,278
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Share based payments
| - | - | - | 43,405 | - |
- | 43,405
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Foreign currency
| - | - | - | - | (8,317,718) |
- | (8,317,718)
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| Loss for the year
| - | - | - | - | - |
(1,033,013) | (1,033,013)
|
+----------------------------+-------------+-------------+-------------+---
=------+--------------+--------------+--------------+
| As at 31 December 2008
| 1,640,945 | 15,604,095 | 17,112,462 | 121,786 | (8,595,686) |
(2,235,978) | 23,647,624
|
+----------------------------+-------------+-------------+-------------+---
-------+--------------+--------------+--------------+
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2008
+----------------------------------------------+----+------+-------------+--------------+
| | | | Group |
+----------------------------------------------+----+------+----------------------------+
| | | Note | For the | For the |
| | | | year ended | period from |
| | | | 31 | 1 September |
| | | | December | 2007 to 31 |
| | | | 2008 | December |
| | | | $ | 2007 |
| | | | | $ |
+----------------------------------------------+----+------+-------------+--------------+
| Cash flows from operating activities | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Operating loss | | | (3,508,566) | (1,307,918) |
+----------------------------------------------+----+------+-------------+--------------+
| Adjustments for: | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Depreciation | | | 1,096,054 | 365,133 |
+----------------------------------------------+----+------+-------------+--------------+
| Amortisation | | | 77,199 | 49,468 |
+----------------------------------------------+----+------+-------------+--------------+
| Share options expensed | | | 43,405 | 64,521 |
+----------------------------------------------+----+------+-------------+--------------+
| Accretion, accrued restoration costs | | | 195,621 | 62,496 |
+----------------------------------------------+----+------+-------------+--------------+
| Foreign exchange gains | | | (3,444,188) | (268,143) |
+----------------------------------------------+----+------+-------------+--------------+
| Decrease / (increase) in trade and other | | | 566,766 | (9,286) |
| receivables | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Less: Trade & other receivables acquired | | | - | (541,721) |
| on reverse acquisition | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Decrease in inventories | | | 271,398 | 215,187 |
+----------------------------------------------+----+------+-------------+--------------+
| Increase / (decrease) in trade and other | | | 222,658 | (11,782) |
| payables | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Less: Trade and other payables acquired on | | | - | (428,786) |
| reverse acquisition | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Increase in provisions | | | 1,080,000 | 432,000 |
+----------------------------------------------+----+------+-------------+--------------+
| Net cash used in operations | | | (3,399,653) | (1,378,831) |
+----------------------------------------------+----+------+-------------+--------------+
| | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Cash flows from investing activities | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Purchase of property, plant and equipment | | | (1,390,094) | (28,404) |
+----------------------------------------------+----+------+-------------+--------------+
| Increase in deposits & escrow | | | (83,728) | (12,930) |
+----------------------------------------------+----+------+-------------+--------------+
| Additions of cash from reverse acquisition | | | - | 3,157,195 |
+----------------------------------------------+----+------+-------------+--------------+
| Interest paid | | | (441,218) | (301,938) |
+----------------------------------------------+----+------+-------------+--------------+
| Interest received | | | 54,469 | 21,834 |
+----------------------------------------------+----+------+-------------+--------------+
| Net cash from (used in) investing activities | | | (1,860,571) | 2,835,757 |
+----------------------------------------------+----+------+-------------+--------------+
| | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Cash flows from financing activities | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Proceeds from equity contribution | | | 750,000 | 250,000 |
+----------------------------------------------+----+------+-------------+--------------+
| Proceeds from issue of share capital | | | 2,998,159 | - |
+----------------------------------------------+----+------+-------------+--------------+
| Transaction costs of share issue | | | (67,937) | - |
+----------------------------------------------+----+------+-------------+--------------+
| Proceeds from borrowings | | | 666,687 | - |
+----------------------------------------------+----+------+-------------+--------------+
| Repayments of borrowings | | | (1,035,677) | (207,959) |
+----------------------------------------------+----+------+-------------+--------------+
| Net cash from Financing Activities | | | 3,311,232 | 42,041 |
+----------------------------------------------+----+------+-------------+--------------+
| | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Net (decrease) / increase in cash and cash | | | (1,948,992) | 1,498,967 |
| equivalents | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Effect of foreign exchange rate changes | | | 684,782 | (40,754) |
+----------------------------------------------+----+------+-------------+--------------+
| Cash and cash equivalents at beginning of | | | 1,591,300 | 133,087 |
| period | | | | |
+----------------------------------------------+----+------+-------------+--------------+
| Cash and cash equivalents at end of period | | 10 | 327,090 | 1,591,300 |
+----------------------------------------------+----+------+-------------+--------------+
Significant Non-Cash Transactions
Conversion of Loan
A total of 56,673,000 shares issued as part of the placing in September 2008
were related to the conversion of a $500,000 loan outstanding as part of the
working capital facility described in Note 22.
COMPANY CASH FLOW STATEMENT
For the year ended 31 December 2008
+-----------------------------------------------+-------+-------------+-------------+
| | | Company |
+-----------------------------------------------+-------+---------------------------+
| | Note | For the | For the |
| | | year ended | year ended |
| | | 31 December | 31 |
| | | 2008 | December |
| | | $ | 2007 |
| | | | $ |
+-----------------------------------------------+-------+-------------+-------------+
| Cash flows from operating activities | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Operating loss | | (1,015,940) | (953,621) |
+-----------------------------------------------+-------+-------------+-------------+
| Adjustments for: | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Depreciation | | 2,594 | 2,678 |
+-----------------------------------------------+-------+-------------+-------------+
| Share options expensed | | 43,405 | 64,521 |
+-----------------------------------------------+-------+-------------+-------------+
| Decrease in deposits paid | | 72,305 | - |
+-----------------------------------------------+-------+-------------+-------------+
| Decrease / (increase) in VAT due | | 109,594 | (132,315) |
+-----------------------------------------------+-------+-------------+-------------+
| Decrease in prepayments | | 51,648 | 108,129 |
+-----------------------------------------------+-------+-------------+-------------+
| Decrease / (increase) in trade and other | | 93,869 | (128,622) |
| receivables | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Increase in trade payables | | 141,851 | 364,543 |
+-----------------------------------------------+-------+-------------+-------------+
| Increase in accruals | | 2,750 | 34,035 |
+-----------------------------------------------+-------+-------------+-------------+
| Net cash used in operations | | (497,924) | (640,652) |
+-----------------------------------------------+-------+-------------+-------------+
| | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Cash flows from investing activities | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Loans to subsidiary | | (3,876,092) | (1,070,388) |
+-----------------------------------------------+-------+-------------+-------------+
| Costs relating to acquisition of subsidiary | | (318,538) | (1,249,330) |
+-----------------------------------------------+-------+-------------+-------------+
| Interest received | | 11,767 | 125,349 |
+-----------------------------------------------+-------+-------------+-------------+
| Net cash used in investing activities | | (4,182,863) | (2,194,369) |
+-----------------------------------------------+-------+-------------+-------------+
| | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Cash flows from financing activities | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Proceeds from issue of share capital | | 2,998,159 | - |
+-----------------------------------------------+-------+-------------+-------------+
| Transaction costs of share issue | | (67,937) | - |
+-----------------------------------------------+-------+-------------+-------------+
| Loans received | | 666,687 | - |
+-----------------------------------------------+-------+-------------+-------------+
| Net cash from Financing Activities | | 3,596,909 | - |
+-----------------------------------------------+-------+-------------+-------------+
| | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Net Decrease in cash and cash equivalents | | (1,083,878) | (2,835,021) |
+-----------------------------------------------+-------+-------------+-------------+
| Cash and cash equivalents at beginning of | | 1,469,689 | 4,311,342 |
| period | | | |
+-----------------------------------------------+-------+-------------+-------------+
| Effect of foreign exchange rate changes | | (174,825) | (6,632) |
+-----------------------------------------------+-------+-------------+-------------+
| Cash and cash equivalents at end of period | 10 | 210,986 | 1,469,689 |
+-----------------------------------------------+-------+-------------+-------------+
Significant Non-Cash Transactions
Acquisition
The Company acquired the Stockton Coal Group (consisting of Coal Contractors
(1991) Inc, Stockton Anthracite LLC and Stockton Anthracite LP) on 19 November
2007 through a share exchange. The consideration for this acquisition comprised
the issue of 494,131,736 ordinary shares in Atlantic Coal plc.
Conversion of Loan
A total of 56,673,000 shares were issued as part of the placing in September
2008 which related to the conversion of a $500,000 loan outstanding as part of
the working capital facility described in Note 22.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2008
1. Segmental Information
At 31 December 2008, the Group operates in one business segment, the extraction
and processing of anthracite coal. The Group has interests in two geographical
segments, the United Kingdom and the United States of America. The Group
revenues and assets are substantially attributable to the coal activities in the
US. The parent company operates a head office based in the United Kingdom which
incurs certain administration and corporate costs.
Geographical Segments
The Group's business segments operate in two main geographical areas. The
Group's revenues are wholly within the US.
+---------------------------------------------------+--------------+-------------+
| | Group |
+---------------------------------------------------+----------------------------+
| Revenue | For the year | For the |
| | ended 31 | period from |
| | December | 1 September |
| | 2008 | 2007 to 31 |
| | $ | December |
| | | 2007 |
| | | $ |
+---------------------------------------------------+--------------+-------------+
| USA | 2,229,746 | 2,523,054 |
+---------------------------------------------------+--------------+-------------+
Revenue is allocated based on customer location.
+---------------------------------------------------+--------------+--------------+
| | Group |
+---------------------------------------------------+-----------------------------+
| Operating Loss | For the year | For the |
| | ended 31 | period from |
| | December | 1 September |
| | 2008 | 2007 to 31 |
| | $ | December |
| | | 2007 |
| | | $ |
+---------------------------------------------------+--------------+--------------+
| USA | 2,492,626 | 990,451 |
+---------------------------------------------------+--------------+--------------+
| UK | 1,015,940 | 317,467 |
+---------------------------------------------------+--------------+--------------+
| Total | 3,508,566 | 1,307,918 |
+---------------------------------------------------+--------------+--------------+
+-------------------------------------------+------------+------------+
| | Group |
+-------------------------------------------+-------------------------+
| Total Assets | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+-------------------------------------------+------------+------------+
| USA | 14,691,264 | 15,654,354 |
+-------------------------------------------+------------+------------+
| UK | 279,064 | 2,014,474 |
+-------------------------------------------+------------+------------+
| Total | 14,970,328 | 17,668,828 |
+-------------------------------------------+------------+------------+
Total assets are allocated based on asset location.
+---------------------------------------------------+--------------+-------------+
| | Group |
+---------------------------------------------------+----------------------------+
| Capital Expenditure | For the year | For the |
| | ended 31 | period from |
| | December | 1 September |
| | 2008 | 2007 to 31 |
| | $ | December |
| | | 2007 |
| | | $ |
+---------------------------------------------------+--------------+-------------+
| USA | 1,456,997 | 28,403 |
+---------------------------------------------------+--------------+-------------+
Capital expenditure is allocated based on asset location.
+----------------------------------------------------+-------------+-------------+
| | Group |
+----------------------------------------------------+---------------------------+
| Total Liabilities | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+----------------------------------------------------+-------------+-------------+
| USA | 16,444,181 | 16,167,491 |
+----------------------------------------------------+-------------+-------------+
| UK | 738,970 | 428,786 |
+----------------------------------------------------+-------------+-------------+
| Total | 17,183,151 | 16,596,277 |
+----------------------------------------------------+-------------+-------------+
+----------------------------------------------------+-------------+-------------+
| | Group |
+----------------------------------------------------+---------------------------+
| Depreciation | For the | For the |
| | year ended | period from |
| | 31 December | 1 September |
| | 2008 | 2007 to 31 |
| | $ | December |
| | | 2007 |
| | | $ |
+----------------------------------------------------+-------------+-------------+
| USA | 1,093,460 | 362,455 |
+----------------------------------------------------+-------------+-------------+
| UK | 2,594 | 2,678 |
+----------------------------------------------------+-------------+-------------+
| Total | 1,096,054 | 365,133 |
+----------------------------------------------------+-------------+-------------+
+----------------------------------------------------+-------------+-------------+
| | Group |
+----------------------------------------------------+---------------------------+
| Amortisation | For the | For the |
| | year ended | period from |
| | 31 December | 1 September |
| | 2008 | 2007 to 31 |
| | $ | December |
| | | 2007 |
| | | $ |
+----------------------------------------------------+-------------+-------------+
| USA | 77,199 | 49,168 |
+----------------------------------------------------+-------------+-------------+
2. Operating Loss
+---------------------------------------------------+--------------+-------------+
| The operating loss is stated after charging: | Group |
+---------------------------------------------------+----------------------------+
| | For the year | For the |
| | ended 31 | period from |
| | December | 1 September |
| | 2008 | 2007 to 31 |
| | $ | December |
| | | 2007 |
| | | $ |
+---------------------------------------------------+--------------+-------------+
| Fees payable to the Company's auditors for the | 37,104 | 40,036 |
| audit of the Parent Company and consolidated | | |
| accounts | | |
+---------------------------------------------------+--------------+-------------+
| Fees payable to the Company's auditors for other | - | 34,030 |
| services provided to the Company and its | | |
| subsidiaries: | | |
+---------------------------------------------------+--------------+-------------+
| Fees payable to the Company's auditors for the | 60,000 | 75,000 |
| audit of the Company's subsidiaries | | |
+---------------------------------------------------+--------------+-------------+
| Fees payable to the Company's auditors for tax | 2,000 | 2,000 |
| services | | |
+---------------------------------------------------+--------------+-------------+
| Depreciation | 1,096,054 | 365,133 |
+---------------------------------------------------+--------------+-------------+
| Amortisation | 77,199 | 49,468 |
+---------------------------------------------------+--------------+-------------+
3.Property, Plant and Equipment
Group
_____________________________________________________
+-----------------------------------------+-----------+--------------+--------
=-+--------------+-------------+
| |
Land and | Plant and | Motor | Furniture | Total |
|
| buildings | machinery | vehicles |
and | $ |
| | $ |
$ | $ | equipment | |
|
| | | | $ |
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Cost
| | | | |
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Balance as at 31 August 2007
| 332,957 | 15,047,171 | 365,546 | 63,398 | 15,809,072
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Additions
| - | 24,000 | - | 4,403 | 28,403
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Additions on reverse acquisition
| - | - | - | 6,831 | 6,831
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| As at 31 December 2007
| 332,957 | 15,071,171 | 365,546 | 74,632 | 15,844,306
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Additions
| - | 34,756 | - | - | 34,756
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Exchange differences
| - | - | - | (1,781) | (1,781)
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| As at 31 December 2008
| 332,957 | 15,105,927 | 365,546 | 72,851 | 15,877,281
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Depreciation
| | | | |
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Balance as at 31 August 2007
| 219,626 | 8,703,956 | 332,330 | 60,699 | 9,316,611
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Charge for the period
| 5,110 | 353,004 | 5,583 | 1,436 | 365,133
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| On reverse acquisition
| - | - | - | 3,475 | 3,475
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Exchange differences
| - | - | - | (95) | (95)
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| As at 31 December 2007
| 224,736 | 9,056,960 | 337,913 | 65,515 | 9,685,124
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Charge for the period
| 14,987 | 1,059,416 | 16,579 | 5,072 | 1,096,054
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Exchange differences
| - | - | - | (1,524) | (1,524)
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| As at 31 December 2008
| 239,723 | 10,116,376 | 354,492 | 69,063 | 10,779,654
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Net book value as at 31 December 2007
| 108,221 | 6,014,211 | 27,633 | 9,117 | 6,159,182
|
+-----------------------------------------+-----------+--------------+-----
=----+--------------+-------------+
| Net book value as at 31 December 2008
| 93,234 | 4,989,551 | 11,054 | 3,788 | 5,097,627
|
+-----------------------------------------+-----------+--------------+-----
-----+--------------+-------------+
The net book value of assets under finance lease is $118,930 (31 December
2007: $140,800).
+-------------------------------+--------+-----------+--------------+--------------+
| | | | | Company |
+-------------------------------+--------+-----------+--------------+--------------+
| | | | | Furniture |
| | | | | and |
| | | | | equipment |
| | | | | $ |
+-------------------------------+--------+-----------+--------------+--------------+
| Cost | | | | |
+-------------------------------+--------+-----------+--------------+--------------+
| Balance as at 1 January 2007 | | | | 6,831 |
+-------------------------------+--------+-----------+--------------+--------------+
| Exchange differences | | | | 89 |
+-------------------------------+--------+-----------+--------------+--------------+
| As at 31 December 2007 | | | | 6,920 |
+-------------------------------+--------+-----------+--------------+--------------+
| Exchange differences | | | | (1,871) |
+-------------------------------+--------+-----------+--------------+--------------+
| As at 31 December 2008 | | | | 5,049 |
+-------------------------------+--------+-----------+--------------+--------------+
| Depreciation | | | | |
+-------------------------------+--------+-----------+--------------+--------------+
| Balance as at 1 January 2007 | | | | 1,128 |
+-------------------------------+--------+-----------+--------------+--------------+
| Charge for the year | | | | 2,736 |
+-------------------------------+--------+-----------+--------------+--------------+
| Exchange differences | | | | (9) |
+-------------------------------+--------+-----------+--------------+--------------+
| As at 31 December 2007 | | | | 3,855 |
+-------------------------------+--------+-----------+--------------+--------------+
| Charge for the year | | | | 2,594 |
+-------------------------------+--------+-----------+--------------+--------------+
| Exchange differences | | | | (1,612) |
+-------------------------------+--------+-----------+--------------+--------------+
| As at 31 December 2008 | | | | 4,837 |
+-------------------------------+--------+-----------+--------------+--------------+
| Net book value as at 31 | | | | 3,065 |
| December 2007 | | | | |
+-------------------------------+--------+-----------+--------------+--------------+
| Net book value as at 31 | | | | 212 |
| December 2008 | | | | |
+-------------------------------+--------+-----------+--------------+--------------+
| | | | | |
+-------------------------------+--------+-----------+--------------+--------------+
4.Land, coal rights and restoration costs
+----------------------------------------------------+-------------+-------------+
| | Group |
+----------------------------------------------------+---------------------------+
| | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+----------------------------------------------------+-------------+-------------+
| Stockton mine costs | | |
+----------------------------------------------------+-------------+-------------+
| Land costs | 3,000,000 | 3,000,000 |
+----------------------------------------------------+-------------+-------------+
| Development costs | 2,437,098 | 2,437,098 |
+----------------------------------------------------+-------------+-------------+
| Railroad relocation costs (1) | 1,422,241 | - |
+----------------------------------------------------+-------------+-------------+
| Retirement obligation cost | | |
+----------------------------------------------------+-------------+-------------+
| Brought forward | 914,472 | 914,472 |
+----------------------------------------------------+-------------+-------------+
| Decrease in retirement obligation estimate | (66,903) | - |
+----------------------------------------------------+-------------+-------------+
| Carried forward | 847,569 | 914,472 |
+----------------------------------------------------+-------------+-------------+
| Total Stockton mine costs | 7,706,908 | 6,351,570 |
+----------------------------------------------------+-------------+-------------+
| | | |
+----------------------------------------------------+-------------+-------------+
| Stockton mine costs depreciation | | |
+----------------------------------------------------+-------------+-------------+
| Brought forward | 2,249,823 | 2,222,419 |
+----------------------------------------------------+-------------+-------------+
| Charge for the year | 50,102 | 27,404 |
+----------------------------------------------------+-------------+-------------+
| Stockton accumulated depreciation | 2,299,925 | 2,249,823 |
+----------------------------------------------------+-------------+-------------+
| | | |
+----------------------------------------------------+-------------+-------------+
| Stockton mine costs net book value | 5,406,983 | 4,101,747 |
+----------------------------------------------------+-------------+-------------+
| | | |
+----------------------------------------------------+-------------+-------------+
| Land costs | | |
+----------------------------------------------------+-------------+-------------+
| Land - 154.2 Acres surface and mineral | 3,400,000 | 3,400,000 |
+----------------------------------------------------+-------------+-------------+
| Land - 181 Acres mineral only | 150,000 | 150,000 |
+----------------------------------------------------+-------------+-------------+
| | 3,550,000 | 3,550,000 |
+----------------------------------------------------+-------------+-------------+
| | | |
+----------------------------------------------------+-------------+-------------+
| Mineral depreciation | | |
+----------------------------------------------------+-------------+-------------+
| Brought forward | 1,273,626 | 1,251,562 |
+----------------------------------------------------+-------------+-------------+
| Charge for the year | 27,097 | 22,064 |
+----------------------------------------------------+-------------+-------------+
| Land accumulated depreciation | 1,300,723 | 1,273,626 |
+----------------------------------------------------+-------------+-------------+
| | | |
+----------------------------------------------------+-------------+-------------+
| Land net book value | 2,249,277 | 2,276,374 |
+----------------------------------------------------+-------------+-------------+
| Total | 7,656,260 | 6,378,121 |
+----------------------------------------------------+-------------+-------------+
1. In the course of construction
The asset retirement provision for the Stockton mine property is calculated
using current cost estimates provided by an independent third party consultant.
The current cost estimates are applied to the required reclamation activities
for closure of the mine. The cost estimates are escalated at 4.4% annually to
the anticipated future mine closure date. The escalation factor was derived from
the prior 15 year average increase in the US Producer Price Index for Anthracite
producers. The future reclamation cost value is discounted at 8% (incremental
cost of borrowing) to arrive at the recorded reclamation liability.
5.Intangible Fixed Assets
+-------------------------------+-----------+--------+----------+----------+-------------+
| | | | | | Group |
+-------------------------------+-----------+--------+----------+----------+-------------+
| | | | | | Goodwill |
| | | | | | $ |
+-------------------------------+-----------+--------+----------+----------+-------------+
| Cost | | | | | |
+-------------------------------+-----------+--------+----------+----------+-------------+
| Balance as at 31 August 2007 | | | | | - |
+-------------------------------+-----------+--------+----------+----------+-------------+
| Arising on reverse | | | | | 1,785,612 |
| acquisition | | | | | |
+-------------------------------+-----------+--------+----------+----------+-------------+
| Impairment losses | | | | | (1,785,612) |
+-------------------------------+-----------+--------+----------+----------+-------------+
| As at 31 December 2007 | | | | | - |
+-------------------------------+-----------+--------+----------+----------+-------------+
| As at 31 December 2008 | | | | | - |
+-------------------------------+-----------+--------+----------+----------+-------------+
The goodwill arising on the reverse acquisition has been impaired in full as the
Directors' do not consider this reflects any increase in the value of the
Group's assets.
6.Investments in Subsidiary Undertakings
+----------------------------------------------------+-------------+-------------+
| | Company |
+----------------------------------------------------+---------------------------+
| Shares in Group Undertakings | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+----------------------------------------------------+-------------+-------------+
| At 1 January | 19,072,306 | - |
+----------------------------------------------------+-------------+-------------+
| Additions | 436,546 | 19,072,306 |
+----------------------------------------------------+-------------+-------------+
| Foreign currency translation | (5,273,672) | - |
+----------------------------------------------------+-------------+-------------+
| At 31 December | 14,235,180 | 19,072,306 |
+----------------------------------------------------+-------------+-------------+
Investments in Group undertakings are stated at cost, which is the fair
value of the consideration paid.
Details of Subsidiary Undertakings
+-------------------+---------------+------------+----------+---------------------------+
| Name of | Place of | Registered | Share | Principal activities |
| subsidiary | establishment | capital | capital | |
| | | | held | |
+-------------------+---------------+------------+----------+---------------------------+
| Coal Contractors | USA | Ordinary | 100% | Anthracite mining |
| (1991) Inc | | shares | | |
| | | $100 | | |
+-------------------+---------------+------------+----------+---------------------------+
| Stockton | USA | - | 100% | Operation of anthracite |
| Anthracite LP | | | | washing plant |
+-------------------+---------------+------------+----------+---------------------------+
| Stockton | USA | - | 100% | Dormant |
| Anthracite LLC | | | | |
+-------------------+---------------+------------+----------+---------------------------+
7. Trade and Other Receivables
+------------------------------------+-----------+-----------+--+-----------+-----------+
| | Group | | Company |
+------------------------------------+-----------------------+--+-----------------------+
| | As at 31 | As at 31 | | As at 31 | As at 31 |
| | December | December | | December | December |
| | 2008 | 2007 | | 2008 | 2007 |
| | $ | $ | | $ | $ |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Trade receivables | 327,745 | 631,593 | | 1,190 | 130,276 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Other receivables | 169,429 | 239,361 | | 2,574 | - |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Prepayments | 137,545 | 213,790 | | 26,605 | 110,769 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Deposits | - | 99,091 | | - | 99,091 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Equity contributions receivable | - | 750,000 | | - | - |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| VAT receivable | 37,497 | 201,585 | | 37,497 | 201,585 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Loans to related parties (note 26) | - | - | | 9,872,350 | 8,217,677 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| | 672,216 | 2,135,420 | | 9,940,216 | 8,759,398 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Less non-current portion: loans to | - | - | | 9,872,350 | 8,217,677 |
| related entities | | | | | |
+------------------------------------+-----------+-----------+--+-----------+-----------+
| Current portion | 672,216 | 2,135,420 | | 67,866 | 541,721 |
+------------------------------------+-----------+-----------+--+-----------+-----------+
All non-current receivables are due within five years of the Balance Sheet
date.
Group
At 31 December 2008, trade receivables of $327,745 (31 December 2007:
$501,317) were overdue but not impaired. These relate to a number of independent
customers for whom there is no recent history of default. The ageing of these
receivables is:
+---------------------------------------------+-------+-------------+------------+
| | | As at 31 | As at 31 |
| | | December | December |
| | | 2008 | 2007 |
| | | $ | $ |
+---------------------------------------------+-------+-------------+------------+
| Up to 3 months | | 231,506 | 320,746 |
+---------------------------------------------+-------+-------------+------------+
| 3 to 6 months | | 3,647 | 135,123 |
+---------------------------------------------+-------+-------------+------------+
| 6 to 12 months | | 5,836 | 45,448 |
+---------------------------------------------+-------+-------------+------------+
| Over 12 months | | 86,756 | - |
+---------------------------------------------+-------+-------------+------------+
| Total | | 327,745 | 501,317 |
+---------------------------------------------+-------+-------------+------------+
8. Inventories
+-------------------------------------+-----------+----------+--+----------+----------+
| | Group | | Company |
+-------------------------------------+----------------------+--+---------------------+
| | As at 31 | As at 31 | | As at 31 | As at 31 |
| | December | December | | December | December |
| | 2008 | 2007 | | 2008 | 2007 |
| | $ | $ | | $ | $ |
+-------------------------------------+-----------+----------+--+----------+----------+
| Coal | 350,611 | 601,348 | | - | - |
+-------------------------------------+-----------+----------+--+----------+----------+
| Supplies | 129,580 | 150,241 | | - | - |
+-------------------------------------+-----------+----------+--+----------+----------+
| | 480,191 | 751,589 | | - | - |
+-------------------------------------+-----------+----------+--+----------+----------+
The cost of inventories recognised as an expense and included in cost of
sales was $271,399 (31 December 2007: ($186,815)).
9. Other assets
+----------------------------------------------------------+-----------+----------+
| | Group |
+----------------------------------------------------------+----------------------+
| | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+----------------------------------------------------------+-----------+----------+
| Certificate of deposit | 230,606 | 230,649 |
+----------------------------------------------------------+-----------+----------+
| Escrow account | 506,338 | 422,567 |
+----------------------------------------------------------+-----------+----------+
| | 736,944 | 653,216 |
+----------------------------------------------------------+-----------+----------+
The Group, as part of a purchase agreement on a portion of the site
currently being mined, has provided a supply agreement to the seller. The
Group is required to provide, at the option of the purchaser, up to 100,000
tons of run of mine coal annually, with minimum quality specifications, until
the date of exhaustion of the coal reserves on the site (refer Note 13). As part
of the agreement, the Group is required to deposit into an escrow account
$1.00 for every ton of prepared coal produced from the site until the escrow
account accumulates to $2,500,000. Should the Group default on the terms of
the agreement, the escrow account could be forfeited as liquidating damages.
The Group has provided certificates of deposit as collateral to secure mine
reclamation obligations as required by the Department of Environmental
Protection. The certificates are not released until the underlying
reclamation obligations have been completed by the Group and released by the
Department of Environmental Protection.
10. Cash and Cash Equivalents
+-------------------------------------+-----------+-----------+--+----------+-----------+
| | Group | | Company |
+-------------------------------------+-----------------------+--+----------------------+
| | As at 31 | As at 31 | | As at 31 | As at 31 |
| | December | December | | December | December |
| | 2008 | 2007 | | 2008 | 2007 |
| | $ | $ | | $ | $ |
+-------------------------------------+-----------+-----------+--+----------+-----------+
| Cash at bank and in hand | 327,090 | 1,591,300 | | 210,986 | 1,469,689 |
+-------------------------------------+-----------+-----------+--+----------+-----------+
11. Called-Up Share Capital
+---------------------------------------------------+----------------+-------------+
| | Number | GBP |
+---------------------------------------------------+----------------+-------------+
| Authorised | | |
+---------------------------------------------------+----------------+-------------+
| Ordinary shares of 0.07 p each | 20,000,000,000 | 14,000,000 |
+---------------------------------------------------+----------------+-------------+
There has been no movement in the authorised share capital during the year
+------------------------------------+---------------+-----------+--+------------+------------+
| Issued | Number of | Ordinary | | Share | Total |
| | shares | shares | | premium | $ |
| | | $ | | $ | |
+------------------------------------+---------------+-----------+--+------------+------------+
| At 1 January 2007 | 267,868,264 | 348,784 | | 6,593,569 | 6,942,353 |
+------------------------------------+---------------+-----------+--+------------+------------+
| Acquisition of subsidiaries | 494,131,736 | 708,317 | | 5,515,092 | 6,223,409 |
+------------------------------------+---------------+-----------+--+------------+------------+
| At 31 December 2007 | 762,000,000 | 1,057,101 | | 12,108,661 | 13,165,762 |
+------------------------------------+---------------+-----------+--+------------+------------+
| Issue of new shares - 15 September | 426,712,000 | 536,074 | | 3,208,815 | 3,744,889 |
| 2008 (1) | | | | | |
+------------------------------------+---------------+-----------+--+------------+------------+
| Issue of new shares - 2 December | 45,000,000 | 47,770 | | 286,619 | 334,389 |
| 2008 | | | | | |
+------------------------------------+---------------+-----------+--+------------+------------+
| At 31 December 2008 | 1,233,712,000 | 1,640,945 | | 15,604,095 | 17,245,040 |
+------------------------------------+---------------+-----------+--+------------+------------+
| (1) Includes placing costs of | | | | | |
| $86,806 | | | | | |
| | | | | | |
+------------------------------------+---------------+-----------+--+------------+------------+
Share Options
Share options outstanding at the end of the year have the following expiry date
and exercise prices:
+-------------------------------------+--------+----------+--+-------------+------------+
| | | | | Shares |
+-------------------------------------+--------+----------+--+--------------------------+
| Expiry date | | Exercise | | 2008 | 2007 |
| | | price in | | | |
| | | GBP per | | | |
| | | share | | | |
+-------------------------------------+--------+----------+--+-------------+------------+
| 7 June 2011 | | 0.02 | | 24,348,142 | 24,348,142 |
+-------------------------------------+--------+----------+--+-------------+------------+
| 3 December 2011 | | 0.0045 | | 16,500,000 | - |
+-------------------------------------+--------+----------+--+-------------+------------+
| 18 November 2012 | | 0.025 | | 15,240,000 | 15,240,000 |
+-------------------------------------+--------+----------+--+-------------+------------+
| 18 November 2012 | | 0.035 | | 6,000,000 | 6,000,000 |
+-------------------------------------+--------+----------+--+-------------+------------+
| 18 November 2012 | | 0.055 | | 6,000,000 | 6,000,000 |
+-------------------------------------+--------+----------+--+-------------+------------+
| 18 November 2012 | | 0.075 | | 5,000,000 | 5,000,000 |
+-------------------------------------+--------+----------+--+-------------+------------+
| 15 September 2013 | | 0.005 | | 28,074,070 | - |
+-------------------------------------+--------+----------+--+-------------+------------+
| 15 September 2013 | | 0.012 | | 4,500,000 | - |
+-------------------------------------+--------+----------+--+-------------+------------+
| | | | | 105,662,212 | 56,588,142 |
+-------------------------------------+--------+----------+--+-------------+------------+
The options are exercisable starting immediately from the date of grant and
lapse on either the third or fifth anniversary of the date of grant. The Company
or Group has no legal or constructive obligation to settle or repurchase the
options in cash.
The fair value of the share options was determined using the Black Scholes
valuation model. The parameters used are detailed below:
+------------------------------+------------+------------+------------+------------+
| | 2008 Options | 2007 | 2006 |
| | | Options | Options |
+------------------------------+-------------------------+------------+------------+
| Option granted on: |15/09/2008 |03/12/2008 |19/11/2007 |06/06/2006 |
+------------------------------+------------+------------+------------+------------+
| Option life (years) | 5 years | 3 years | 5 years | 5 years |
+------------------------------+------------+------------+------------+------------+
| Risk free rate | 4.21% | 2.71% | 5% | 4.6% |
+------------------------------+------------+------------+------------+------------+
| Expected volatility | 29% | 30% | 15% | 15% |
+------------------------------+------------+------------+------------+------------+
| Expected dividend yield | - | - | - | - |
+------------------------------+------------+------------+------------+------------+
| Marketability discount | 20% | 20% | 20% | 80% |
+------------------------------+------------+------------+------------+------------+
| Total fair value of options | 43 | 15 | 65 | 13 |
| granted ($000) | | | | |
+------------------------------+------------+------------+------------+------------+
The expected volatility is based on historical volatility for the 6 months
prior to the date of granting.
The risk free rate return is based on zero yield government bonds for a term
consistent with the option life.
A reconciliation of options granted over the year to 31 December 2008 is
shown below:
+-------------------------------------+-------------+----------+--+------------+----------+
| | 2008 | | 2007 |
+-------------------------------------+------------------------+--+-----------------------+
| | Number | Weighted | | Number | Weighted |
| | | average | | | average |
| | | exercise | | | exercise |
| | | price | | | price |
| | | (GBP) | | | (GBP) |
+-------------------------------------+-------------+----------+--+------------+----------+
| Outstanding as at 1 January | 56,588,142 | 0.03 | | 24,348,142 | 0.02 |
+-------------------------------------+-------------+----------+--+------------+----------+
| Granted | 49,074,070 | 0.005 | | 32,240,000 | 0.04 |
+-------------------------------------+-------------+----------+--+------------+----------+
| Outstanding as at 31 December | 105,662,212 | 0.019 | | 56,588,142 | 0.032 |
+-------------------------------------+-------------+----------+--+------------+----------+
| Exercisable at 31 December | 83,446,166 | 0.023 | | 56,588,142 | 0.032 |
+-------------------------------------+-------------+----------+--+------------+----------+
+----------+----------+------------+-----------+------------+----------+------------+-----------+------------+
| | 2008 | 2007 |
+----------+------------------------------------------------+------------------------------------------------+
| Range of | Weighted | Number | Weighted | Weighted | Weighted | Number | Weighted | Weighted |
| exercise | average | of | average | average | average | of | average | average |
| prices | exercise | shares | remaining | remaining | exercise | shares | remaining | remaining |
| (GBP) | price | | life | life | price | | life | life |
| | (GBP) | | expected | contracted | (GBP) | | expected | contracted |
| | | | (years) | (years) | | | (years) | (years) |
+----------+----------+------------+-----------+------------+----------+------------+-----------+------------+
| 0 - 0.01 | 0.005 | 44,574,070 | 4.05 | 4.05 | - | - | - | - |
+----------+----------+------------+-----------+------------+----------+------------+-----------+------------+
| 0.01 - | 0.03 | 61,088,142 | 3.37 | 3.37 | 0.032 | 56,588,142 | 4.26 | 4.26 |
| 0.075 | | | | | | | | |
+----------+----------+------------+-----------+------------+----------+------------+-----------+------------+
No options were exercised during the period. The total fair value has
resulted in a charge to the Income Statement for the year ended 31 December 2008
of $43,405 (2007: $30,832).
12. Trade and Other Payables
+-------------------------------------+-----------+-----------+--+----------+----------+
| | Group | | Company |
+-------------------------------------+-----------------------+--+---------------------+
| | As at 31 | As at 31 | | As at 31 | As at 31 |
| | December | December | | December | December |
| | 2008 | 2007 | | 2008 | 2007 |
| | $ | $ | | $ | $ |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Trade payables | 3,032,127 | 2,661,675 | | 417,990 | 326,016 |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Other payables | 2,487 | - | | 2,487 | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Social security and other taxes | 84,136 | 75,772 | | 456 | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Accrued expenses | 438,154 | 787,708 | | 36,541 | 102,770 |
+-------------------------------------+-----------+-----------+--+----------+----------+
| | 3,556,904 | 3,525,155 | | 457,474 | 428,786 |
+-------------------------------------+-----------+-----------+--+----------+----------+
13. Provisions
+---------------------------------------------------------+-------------------+---------------------+
| | Group |
+---------------------------------------------------------+-----------------------------------------+
| | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+---------------------------------------------------------+-------------------+---------------------+
| Provision for supply of coal | 2,160,000 | 1,080,000 |
+---------------------------------------------------------+-------------------+---------------------+
In connection with the acquisition of the Stockton Mine real estate in November,
2000, the Stockton Coal Group entered into a ROM Coal Sale and Purchase
Agreement to supply coal to Jeddo, an affiliate of the vendor of the property,
Pagnotti Enterprises, Inc. It grants Jeddo the option to purchase up to 100,000
standard long tons of coal annually, divided into an "annual" amount of at least
50,000 tons, provided that Jeddo gives notice of its election to exercise by 31
December of the previous year, and a quarterly optional amount where Jeddo can
buy up to 50,000 tons more per year by exercising quarterly increase rights of
up to 5,000 tons per month. The term of the Group's obligation under this
agreement lasts until all the coal reserves at the Stockton mine are depleted.
As a result, a provision has been recognised for the Group's obligations under
this agreement.
A charge of $1,080,000 has been recognised in the current period (period ended
31 December 2007 - $432,000).
14. Borrowings
+-------------------------------------+-----------+-----------+--+----------+----------+
| | Group | | Company |
+-------------------------------------+-----------------------+--+---------------------+
| | As at 31 | As at 31 | | As at 31 | As at 31 |
| | December | December | | December | December |
| | 2008 | 2007 | | 2008 | 2007 |
| | $ | $ | | $ | $ |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Non-Current | | | | | |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Debenture and other loans | 3,085,340 | 3,860,161 | | - | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Finance lease liabilities | 100,987 | 128,252 | | - | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| | 3,186,327 | 3,988,413 | | - | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Current | | | | | |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Debentures and other loans | 1,041,265 | 908,328 | | 281,496 | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| Finance lease liabilities | 57,728 | 42,172 | | - | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
| | 1,098,993 | 950,500 | | 281,496 | - |
+-------------------------------------+-----------+-----------+--+----------+----------+
At 31 December 2008 total borrowings include secured liabilities of $1,683,887
(31 December 2007: $2,707,857). Borrowings are secured as follows:
General Electric Capital Corporation loan note in the amount of $1,683,887 is
secured on all anthracite coal to be extracted from the property and all
anthracite coal inventories through the grant of a mortgage on all the real
property of the Stockton Coal Group.
After the year end, the working capital facility provided by Stephen Best (refer
Note 22) of $281,496 became secured by way of a second charge over all
anthracite coal to be extracted from the property and all anthracite coal
inventories through the grant of a mortgage on all the real property of the
Stockton Coal Group.
The carrying amounts and fair value of the non-current borrowings are:
+-------------------------------------+-----------+--------------+--+-----------+--------------+
| | Carrying amount | | Fair value |
+-------------------------------------+--------------------------+--+--------------------------+
| | As at 31 | As at 31 | | As at 31 | As at 31 |
| | December | December | | December | December |
| | 2008 | 2007 | | 2008 | 2007 |
| | $ | $ | | $ | $ |
+-------------------------------------+-----------+--------------+--+-----------+--------------+
| Debenture and other loans | 3,085,340 | 3,860,161 | | 3,085,340 | 3,860,161 |
+-------------------------------------+-----------+--------------+--+-----------+--------------+
| Finance lease liabilities | 100,987 | 128,252 | | 100,987 | 128,252 |
+-------------------------------------+-----------+--------------+--+-----------+--------------+
| | 3,186,327 | 3,988,413 | | 3,186,327 | 3,988,413 |
+-------------------------------------+-----------+--------------+--+-----------+--------------+
The fair value of current borrowings equals their carrying amount, as the
impact of discounting is not significant. The fair values are based on the face
values of the loans.
The carrying amounts of short-term borrowings are approximately their fair
value.
Lease Liabilities
Lease liabilities are effectively secured, as the rights to the leased asset
revert to the lessor in the event of default.
+---------------------------------------------------------+-----------+-----------+
| | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+---------------------------------------------------------+-----------+-----------+
| Finance lease liabilities - minimum lease payments | | |
+---------------------------------------------------------+-----------+-----------+
| * due within one year | 73,206 | 60,210 |
+---------------------------------------------------------+-----------+-----------+
| * due within two to five years | 107,983 | 146,532 |
+---------------------------------------------------------+-----------+-----------+
| * due thereafter | - | - |
+---------------------------------------------------------+-----------+-----------+
| | 181,189 | 206,742 |
+---------------------------------------------------------+-----------+-----------+
| Finance charges allocated to future periods | 22,473 | 36,318 |
+---------------------------------------------------------+-----------+-----------+
| Present value of finance lease liabilities | 158,716 | 170,424 |
+---------------------------------------------------------+-----------+-----------+
15. Accrued Restoration Costs
+---------------------------------------------------------+-----------+-----------+
| | Group |
+---------------------------------------------------------+-----------------------+
| | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+---------------------------------------------------------+-----------+-----------+
| Gowen | 2,534,625 | 4,206,625 |
+---------------------------------------------------------+-----------+-----------+
| Stockton | 2,546,302 | 2,417,584 |
+---------------------------------------------------------+-----------+-----------+
| | 5,080,927 | 6,624,209 |
+---------------------------------------------------------+-----------+-----------+
| Gowen total costs | | |
+---------------------------------------------------------+-----------+-----------+
| Brought forward | 4,634,625 | 4,634,625 |
+---------------------------------------------------------+-----------+-----------+
| Increase in estimated reclamation liability | - | - |
+---------------------------------------------------------+-----------+-----------+
| Carried forward | 4,634,625 | 4,634,625 |
+---------------------------------------------------------+-----------+-----------+
| Gowen costs split: | | |
+---------------------------------------------------------+-----------+-----------+
| Current | 2,100,000 | 428,000 |
+---------------------------------------------------------+-----------+-----------+
| Non-current | 2,534,625 | 4,206,625 |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Stockton total costs | | |
+---------------------------------------------------------+-----------+-----------+
| Brought forward | 2,417,584 | 2,355,088 |
+---------------------------------------------------------+-----------+-----------+
| Accretion | 195,621 | 62,496 |
+---------------------------------------------------------+-----------+-----------+
| Decrease in estimated Stockton mine reclamation | (66,903) | - |
| liability | | |
+---------------------------------------------------------+-----------+-----------+
| Carried forward | 2,546,302 | 2,417,584 |
+---------------------------------------------------------+-----------+-----------+
16. Other Gains - Net
+---------------------------------------------------------+-------------------+-----------------------+
| | Group |
+---------------------------------------------------------+-------------------------------------------+
| | For the | For the |
| | year | period |
| | ended 31 | from 1 |
| | December | September |
| | 2008 | 2007 to |
| | $ | 31 |
| | | December |
| | | 2007 |
| | | $ |
+---------------------------------------------------------+-------------------+-----------------------+
| Net foreign exchange gains | 3,444,188 | 268,143 |
+---------------------------------------------------------+-------------------+-----------------------+
17. Other Income
+---------------------------------------------------------+-----------+--------------------------+
| | Group |
+---------------------------------------------------------+--------------------------------------+
| | For the | For the |
| | year | period |
| | ended 31 | from 1 |
| | December | September |
| | 2008 | 2007 to |
| | $ | 31 |
| | | December |
| | | 2007 |
| | | $ |
+---------------------------------------------------------+-----------+--------------------------+
| Sale of scrap metal | - | 1,572 |
+---------------------------------------------------------+-----------+--------------------------+
| Other | - | 30 |
+---------------------------------------------------------+-----------+--------------------------+
| | - | 1,602 |
+---------------------------------------------------------+-----------+--------------------------+
18. Finance Income and Costs
+-----------------------------------------------------+-------------+------------+
| | Group |
+-----------------------------------------------------+--------------------------+
| | For the | For the |
| | year ended | period |
| | 31 December | from 1 |
| | 2008 | September |
| | $ | 2007 to 31 |
| | | December |
| | | 2007 |
| | | $ |
+-----------------------------------------------------+-------------+------------+
| Interest Expense: | | |
+-----------------------------------------------------+-------------+------------+
| Convertible bond | - | 63,733 |
+-----------------------------------------------------+-------------+------------+
| Other loans | 473,268 | 480,034 |
+-----------------------------------------------------+-------------+------------+
| Finance Costs | 473,368 | 543,767 |
+-----------------------------------------------------+-------------+------------+
| Finance Income | | |
+-----------------------------------------------------+-------------+------------+
| Interest received from bank | 54,469 | 21,834 |
+-----------------------------------------------------+-------------+------------+
| Net Finance Costs | 418,899 | 521,933 |
+-----------------------------------------------------+-------------+------------+
19. Taxation
+-----------------------------------------------------+-------------+-------------+
| | Group |
+-----------------------------------------------------+---------------------------+
| | For the | For the |
| | year ended | period |
| | 31 December | from 1 |
| | 2008 | September |
| | $ | 2007 to 31 |
| | | December |
| | | 2007 |
| | | $ |
+-----------------------------------------------------+-------------+-------------+
| Loss before tax | (3,927,465) | (3,615,463) |
+-----------------------------------------------------+-------------+-------------+
| Tax at the applicable rate of 39% (2007: 39%) | (1,531,711) | (1,410,030) |
+-----------------------------------------------------+-------------+-------------+
| Net tax effect of losses carried forward | 1,531,711 | 1,410,030 |
+-----------------------------------------------------+-------------+-------------+
| Tax charge | - | - |
+-----------------------------------------------------+-------------+-------------+
No tax charge or credit arises on the loss for the period.
The tax rate used is a combination of the 28.25% (2007 : 30%) standard rate of
corporation tax in the UK, 34% US federal tax rate and 6% Pennsylvania state tax
rate for the Stockton Coal Group to give an applicable rate of 39% (2007: 39%).
The Group has tax losses of approximately $5,680,000 (2007: $3,500,000)
available to carry forward against future taxable profits. A deferred tax asset
has not been recognised because of uncertainty over the timing of future taxable
profits against which the losses may be offset.
20. Loss per Share
The calculation of the basic loss per share of 0.44 cents (31 December 2007
loss per share: 1.11 cents) is based on the loss attributable to ordinary
shareholders of $3,927,465 (31 December 2007 loss: $3,615,463) and on the
weighted average number of ordinary shares of 891,603,541 (31 December 2007:
326,081,044) in issue during the period.
In accordance with IAS 33, no diluted earnings per share is presented as the
effect on the exercise of share options would be to decrease the loss per share.
Details of share options that could potentially dilute earnings per share in
future periods are set out in Note 11.
21. Related Party Transactions
Shareholder Loans
Included within borrowings are the following amounts owed to shareholders:
+---------------------------------------------------------+-----------+-----------+
| | Group |
+---------------------------------------------------------+-----------------------+
| | As at 31 | As at 31 |
| | December | December |
| | 2008 | 2007 |
| | $ | $ |
+---------------------------------------------------------+-----------+-----------+
| Willoughby (465) Limited (1) | 488,357 | 600,060 |
+---------------------------------------------------------+-----------+-----------+
| Hichens, Harrison & Co Plc | 160,809 | 218,273 |
+---------------------------------------------------------+-----------+-----------+
| Mary Catherine Best (2) | 1,374,210 | 1,242,300 |
+---------------------------------------------------------+-----------+-----------+
| American Investments Ltd (3) | - | 55,000 |
+---------------------------------------------------------+-----------+-----------+
| | 2,023,376 | 2,115,633 |
+---------------------------------------------------------+-----------+-----------+
(1) Willoughby (465) Limited is a company controlled by Stephen Best, who is a
Director and shareholder of the Company.
(2) Mary Catherine Best is the spouse of Stephen Best.
(3) American Investments Ltd is a company controlled by Stephen Best.
Partnorth Limited
As at 31 December 2008 there are amounts receivable of $166,855 (31 December
2007: $166,855) due from Partnorth Limited. Partnorth Limited is controlled by
Stephen Best, who is a Director and shareholder of the Company.
Credit Facility
On 17 November 2006 the Company entered into an agreement with Stephen Best, who
is a Director and shareholder of the Company, ('Facility Letter'), whereby
Stephen Best has agreed to make available a credit facility of up to $1,000,000,
with a maturity date of 17 April 2009, solely for the purposes of working
capital. Interest is payable at a rate of 10% per annum on monies drawn. As at
31 December 2008 the Company had drawn down $281,496 (31 December 2007 : Nil) on
this facility. Refer to Note 22 for further information.
Loan from Atlantic Coal plc to Coal Contractors (1991) Inc
As at 31 December 2008 there are amounts receivable of $9,872,350 (31 December
2007: $8,217,677) due from Coal Contractors (1991) Inc to the Company. This loan
is interest free and is repayable in Sterling when sufficient cash resources are
available in the subsidiary.
All Group transactions were eliminated on consolidation.
Other Transactions
Included in Trade Creditors is a balance of $306,196 payable to Stephen Best,
who is a Director and shareholder of the Company, (31 December 2007: $274,148).
This relates to out of pocket expenses incurred by Mr Best relating to the
operations of the Stockton Coal Group.
Freeside Limited a company of which Gregory Kuenzel is a Director and beneficial
owner was paid a fee for company secretarial services and other corporate
consulting services provided to the Company. The total fees paid during the year
ended 31 December 2008 amounted to $89,160 (31 December 2007: $24,380).
22. Events after the Balance Sheet Date
Credit Facility
On 17 October 2007 the Company entered into an agreement with Stephen Best, who
is a Director and shareholder of the Company, ('Facility Letter'), whereby
Stephen Best has agreed to make available a credit facility of up to $1,000,000,
for a period of 18 months following Admission, solely for the purposes of
working capital. Interest is payable at a rate of 10% per annum on monies drawn
and an arrangement fee of $50,000 is payable on first draw down or maturity,
whichever is the earlier.
On 27 June 2008 this facility was extended by an additional $4,000,000 with a
maturity date of 31 December 2011, interest accruing at 9% per annum of on
monies drawn down, secured over the assets of the Coal Contractors Group.
On 17 April 2009, the balance outstanding on the $1,000,000 Facility Letter
agreement expired and the balance of $461,030 was transferred to the second
Facility maturing on 31 December 2011.
Share Issue
On 30 April 2009 the Company raised GBP500,000 through the issue of 100,000,000
new shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BRGDLUUDGGCC
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