RNS Number:2371I
Investika Ltd
30 August 2006
Investika Ltd
("Investika" or the "Company")
Results for the six month period to 30 June 2006
The Company is pleased to announce its results for the six month period ended 30
June 2006.
CONSOLIDATED RESULTS AND REVIEW OF OPERATIONS
The net profit after tax of the consolidated entity for the six months ended 30 June 2006 was $2,220,659 (30 June 2005:
$2,470,277). Of the profit, $3,045,125 relates to a gain arising on the dilution of the Company's interest in Belitung
Zinc Corporation plc from 100% to 42.5%, following that company raising #2,866,000, net of costs, from third party
investors.
During the period, the consolidated entity:
* Expended a further US$600,000 (A$808,537) on the Berong nickel project on the island of Palawan, Philippines.
Project activities were focused on infrastructure design, pit optimization & mine design, preparations for bulk
sampling, and seeking the necessary permits and clearances from the appropriate Philippine Government agencies.
Field activities associated with the major sampling program continued with the majority of the work related to new
test pitting and drilling. Infill drilling and new pitting has confirmed the continuity of the laterite
mineralization and continues to validate the higher nickel and cobalt grades within the 288 ha Mineral Production
Sharing Agreement (MPSA) area. Snowden Mining Industry Consultants has calculated an ore resource estimate for the
MPSA area but insufficient drill-hole assay results were available to compile a JORC compliant ore statement. On
the mining front, Snowden has completed the long term (life of mine) and short term (out to three years by
quarters) mine plans and schedules. Work in progress includes mine equipment sizing, estimation of operating and
capital costs, stockpiling and blending practices, and preparation of the 'mining contract' for tendering to the
market. Detailed engineering design and capital cost estimation of the coastal and mine infrastructure facilities
is continuing. The design of the temporary causeway has been completed and some 60,000 tonnes of gravel and
boulders excavated and stockpiled at the foreshore area in preparation for construction of the causeway. Safety
fencing has been erected along the main public road linking the mine site to the coastal stockpile area. An 11
hectare foreshore area has been leased and cleared and will be used for ore stockpiling and blending purposes.
Intertek has been commissioned to provide assay laboratory facilities and services during mining operations. The
location of the accommodation village has been selected and some temporary accommodation facilities erected.
Leighton Contractors (Phil) Inc. has been commissioned to provide engineering services and to manage all site
activities associated with the bulk sample extraction and commercial operations. The key shipping and
serviceability parameters for a typical barging/trans-shipment operation have been defined and the monitoring and
collection of wave and current data in the offshore anchorage area continues. Discussions have continued to be held
with potential customers in China, Japan, Europe and Australia. Negotiations are underway with BHP Billiton/QNI on
the long term supply of up to 350,000 tpa ore. Similarly, strong interest has been received from three potential
Chinese customers each wishing to purchase from 0.5mt to 1mt ore per year. Larco from Greece has also expressed a
strong interest in the supply of saprolite ore. A bulk metallurgical sample(s) up to a maximum of 30,000 dmt in
total is expected to be shipped in quarter 3 2006, with commercial operations expected to start in
November/December 2006. An export target of 80,000 to 90,000dmt of ore has been set for 2006, around 620,000dmt for
2007 and around 1,000,000dmt in 2008 and beyond. Actual sales will be dependent upon weather conditions. Present
indications are such that weather conditions have not been as wet as previously thought, with rainfall at the
coast being less than half of that at the mine site area. This is encouraging as it may allow mining and shipping
all year round rather than only mining during the dry season. Further rainfall data is however required to confirm
this. Permitting continues to be an area of considerable focus. The Environmental Clearance Certificate (ECC) was
issued during the period under review. A special tree cutting permit is being sought to allow the bulk
metallurgical sample to be extracted. The MPSA is awaiting signature.
* In respect of the Las Pascualas copper project in Chile, a reverse circulation drilling programme was
completed in the northern part of the property. As a result, the Company was able to announce on 23 June that the
drilling, supported by sampling of extensive tunneling, had defined a JORC compliant "inferred mineral resource" of
13.87 million tones at 1.01%Cu within the enrichment zone, which is located at about 80 metres depth. A cut-off
grade of 0.5% Cu and a specific gravity of 2.63 were used in the estimate. Infill and extension drilling is
currently in progress at 100m x 100m spacing. Further geological mapping suggests that the mineralized deposit has
been separated into three discrete areas, namely Pascualas North (the target of the drilling programme), Pascualas
East and Pascualas South, by post mineral faulting and subsequent intrusion. Work is in progress to define drilling
targets at the latter two areas. A comprehensive metallurgical testwork programme has commenced to define the
material's amenability to treatment. In addition, the joint venture has pegged additional ground, adjacent to the
optioned area, in its own right. These areas contain significant alteration with copper mineralization.
* In respect of the El Morado copper project in Chile, the results of a reverse drilling programme were
disappointing and are being further reviewed to ascertain if more work is justified.
* In respect of the Kelapa Kampit zinc/ lead project in Indonesia, preliminary activities for the Stage 1
drilling programme commenced with the arrival of geologists, surveyors and field assistants on site. Activities
included geological mapping, trenching and some rehabilitation of existing adits for mapping and metallurgical
sampling. Further mapping and trenching will need to be undertaken prior to drilling which is expected to commence
in quarter 3 2006. Work continued on tenure reorganization with both the federal and provincial government
authorities.
* Subscribed for 3,093,519 shares in Toledo Mining Corporation plc (Toledo) at a cost of $8,203,216, resulting
in the Company acquiring an interest in Toledo of 11.2%. Of this amount $4,602,500 was on deferred settlement terms
and is payable on or before 3 November 2006. The Company has granted call options over 1,363,704 of these shares;
the options have an exercise price of #1.30 each and an expiry date of 3 November 2006. Toledo owns interests in
three nickel development projects in the Philippines, viz a 56.1% economic interest in the Berong project; a 58%
economic interest in the Ipilan project; and a 52% economic interest in the Ulugan nickel project.
* Acquired 684,369 shares in Tarquin Resources plc (Tarquin) on market at a cost of $585,813, taking the Company's
interest in Tarquin to 29.9%. Tarquin holds a 51% interest in each of the Las Pascualas and El Morado copper
projects in Chile.
* Acquired 700,000 shares in UMC Energy plc (UMC) on market at a cost of $310,260, taking the Company's interest
in UMC to 19.6%. UMC has announced that it is in the advanced stages of negotiation to acquire an 80% interest in a
Madagascar corporation which owns eight permits to explore for uranium in Madagascar.
* Acquired 900,000 shares in Newland Resources Ltd on market at a cost of $100,312.
* Placed 80,650,000 pre-consolidation ordinary shares at $0.023 each with funds managed by RAB Capital Plc,
raising $1,762,202, net of costs.
* Completed a pro-rata non-renounceable issue of pre-consolidation ordinary shares at $0.02 per share resulting
in the allotment of 651,712,475 ordinary shares and raising $13,034,249.
* Consolidated its ordinary shares on the basis of 1 : 100, following resolution by shareholders at the
Company's Annual General Meeting held on 9 May 2006.
SUBSEQUENT EVENTS
Subsequent to 30 June 2006, the Company has:
* Expended a further $329,989 in respect of the Berong nickel project.
* Acquired a further 97,500 shares in Toledo at a cost of $240,178.
* Acquired a further 1,112,284 shares in Tarquin at a cost of $751,155.
* Subscribed for 3,333,333 ordinary shares and 3,333,333 #0.03 twelve month warrants in Cambrian Oil and Gas plc at
a cost of $245,234.
* Subscribed for 1,714,285 ordinary shares in Irvine Energy plc at a cost of $148,251.
* Granted to W.H. Ireland Ltd 136,547 options over ordinary shares. The options have an expiry date of 21 August
2009 and an exercise price of $3.15 each.
* Had its securities admitted to trading on the London Stock Exchange's AIM market.
Other than the matters discussed above, there has not arisen in the interval between the end of the half-year and the
date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the
Directors of the Company, to affect significantly the operations of the consolidated entity, the results of those
operations or the state of affairs of the consolidated entity, in subsequent financial years.
Condensed Consolidated Interim Income Statement
for the six months ended 30 June 2006
Note 30 June 30 June
2006 2005
$ $
Total revenue from services 8,063 54,250
Gain on sale of shares 35,145 3,547,153
Gross profit 43,208 3,601,403
Personnel cost (415,552) (726,995)
Exploration expenditure (43,217) (191,165)
Exploration expenditure recovered 193,469 -
Costs associated with placement and rights (59,910) (8,741)
issue
Costs associated with AIM admission (50,232) -
Depreciation and amortisation (2,067) (3,270)
Reversal of / (impairment) losses on other
receivables 64,772 (64,772)
Facilities (31,625) (31,625)
Other expenses (111,896) (118,252)
Total Expenses (456,258) (1,144,820)
Result from operating activities (413,050) 2,456,583
Financial income 126,801 34,325
Gain on dilution of subsidiary 5 3,045,125 -
Share of net losses of associates 5 (538,217) (20,631)
Profit before tax 2,220,659 2,470,277
Income tax expense 4 - -
Profit for the period 2,220,659 2,470,277
Cents Cents
Basic earnings per share 9 25.5 44.2
Diluted earnings per share 9 25.5 44.2
The above Condensed Consolidated Interim Income Statement should be read in
conjunction with the accompanying notes.
Condensed Consolidated Interim Statement of Recognised Income and Expense
for the six months ended 30 June 2006
30 June 30 June
2006 2005
$ $
Change in fair value of equity securities available
for sale, net of tax (899,021) 518,216
Net (loss) / income recognised directly in equity (899,021) 518,216
Profit for the period 2,220,659 2,470,277
Total recognised income and expense for the period 1,321,638 2,988,493
The above Condensed Consolidated Interim Statement of Recognised Income and
Expense should be read in conjunction with the accompanying notes.
Condensed Consolidated Interim Balance Sheet
as at 30 June 2006
Note 30 June 31 December
2006 2005
$ $
ASSETS
Current Assets
Cash and cash equivalents 10,188,239 1,151,422
Trade and other receivables 76,294 4,615
Total Current Assets 10,264,533 1,156,037
Non-Current Assets
Exploration and evaluation expenditure -
intangible - 2,405,553
Investments accounted for using the equity 5,049,841 1,771,019
method
Other investments 6 12,588,103 1,777,881
Plant and equipment 24,925 6,697
Total Non-Current Assets 17,662,869 5,961,150
Total Assets 27,927,402 7,117,187
LIABILITIES
Current Liabilities
Trade and other payables 4,798,921 175,804
Provisions 2,235 2,235
Total Current Liabilities 4,801,156 178,039
Non-current Liabilities
Deferred tax liabilities 128,350 146,742
Total Non-current Liabilities 128,350 146,742
Total Liabilities 4,929,506 324,781
NET ASSETS 22,997,896 6,792,406
EQUITY
Issued capital 8 18,129,240 3,332,788
Reserves 72,195 883,816
Retained earnings 10 4,796,461 2,575,802
TOTAL EQUITY 22,997,896 6,792,406
The above Condensed Consolidated Interim Balance Sheet should be read in
conjunction with the accompanying notes.
Condensed Consolidated Interim Statement of Cash Flows
for the six months ended 30 June 2006
30 June 30 June
2006 2005
$ $
Cash Flows From Operating Activities
Receipts in the course of operations 8,063 109,158
Cash payments in the course of operations (482,617) (611,125)
Cash from operations (474,554) (501,967)
Interest received 126,801 34,325
Net cash from operating activities (347,753) (467,642)
Cash Flows From Investing Activities
Recovery of / (loan to) other entities 64,772 (64,772)
Payments for exploration and evaluation expenditure - (561,664)
Purchase of interest in associate (665,246) (1,042,517)
Purchase of equity investments (4,840,329) (398,140)
Proceeds from sale of equity investments 49,215 4,210,489
Payments for purchases of plant and equipment (20,294) (1,715)
Net cash from investing activities (5,411,882) 2,141,681
Cash Flows From Financing Activities
Proceeds from the issue of share capital 14,796,452 -
Net cash from financing activities 14,796,452 -
Net increase in cash and cash equivalents 9,036,817 1,674,039
Cash at 1 January 1,151,422 759,487
Cash at 30 June 10,188,239 2,433,526
The above Condensed Consolidated Interim Statement of Cash Flows should be read
in conjunction with the accompanying notes.
1. Reporting entity
Investika Ltd (the "Company") is a company domiciled in Australia. The condensed consolidated interim
financial report of the Company as at and for the six months ended 30 June 2006 comprises the Company and its
subsidiaries (together referred to as the "consolidated entity") and the consolidated entity's interests in
associates and jointly controlled entities.
The consolidated annual financial report of the consolidated entity as at and for the year ended 31 December
2005 is available upon request from the Company's registered office at Suite 107, 109 Pitt Street Sydney NSW
2000 or at www.investika.com.
2. Statement of compliance
The condensed consolidated interim financial report is a general purpose financial report which has been
prepared in accordance with Australian Accounting Standards and the Corporations Act 2001.
The condensed consolidated interim financial report does not include all of the information required for a
full annual financial report, and should be read in conjunction with the consolidated annual financial report
of the consolidated entity as at and for the year ended 31 December 2005.
This condensed consolidated interim financial report was approved by the Board of Directors on 29 August 2006.
3. Significant accounting policies
The accounting policies applied by the consolidated entity in this condensed consolidated financial report are
the same as those applied by the consolidated entity in its consolidated financial report as at and for the
year ended 31 December 2005.
4. Income tax expense
30 June 2006 30 June 2005
$ $
Numerical reconciliation between income tax expense and
pre tax net profit
Profit before tax 2,220,659 2,470,277
Income tax using the domestic corporate income tax rate
of 30% (2005 : 30%) 666,198 741,083
Non-deductible expenditure - equity-settled transactions 26,220 -
Benefit of unrecorded income tax losses recognised (692,418) (741,083)
Income tax expense - -
As part of the transition to AIFRS, the Company has elected to classify its investments as available-for-sale
financial assets with movements in their fair value being recorded in an equity reserve. Increases in the fair
value of investments require the Company to record a deferred tax liability under AASB 112 Income taxes. This
standard requires, inter alia, the Directors to only recognise available tax losses when it is probable that the
consolidated entity will derive future taxable profits. The Directors have therefore decided not to recognise
available tax losses to offset this deferred tax liability until any gain on the shares is actually realised.
5. Investments in associates
30 June 30 June
2006 2005
Belitung Zinc Corporation plc 42.5% -
Share of associate's net loss for the period $159,375 -
Gain on dilution of interest from 100% to 42.5% $3,045,125 -
Tarquin Resources plc 29.9% 23.5%
Share of associate's net loss for the period $378,842 -
Tommy SA 49% -
Share of associate's net loss for the period - -
Metak Ltd 50.0% 50.0%
Share of associate's net loss for the period - $20,631
6. Other investments
30 June 31 December 2005
2006
$ $
Other investments comprise equity holdings in the
following entities:
Toledo Mining Corporation plc 7,347,108 -
Berong Nickel Corporation 3,214,090 -
UMC Energy plc 1,890,000 1,657,143
Other 136,905 120,738
12,588,103 1,777,881
The investment in Berong Nickel Corporation, which entity owns the Berong nickel project, was
transferred from exploration and evaluation expenditure as the Company has now been allotted shares in
that entity.
7. Commitments and contingent liabilities
Under the three year option arrangements entered into in respect of the Las Pascualas and El Morado
copper projects, the Company is responsible for its 49% share of the option fees payable and project
development expenditures arising after 1 December 2006. The option fees payable under the Las Pascualas
project which the Company must part fund to continue with the project are as follows: November 2007
US$1,000,000; and November 2008 US$5,250,000. The option fees payable under the El Morado project which
the Company must part fund to continue with the project are as follows: November 2007 US$500,000; and
November 2008 US$1,280,000.
Other than the items referred to above, the Company and consolidated entity have no commitments for
capital or revenue purchases other than those entered into in the ordinary course of business. The
Company and the consolidated entity have no commitments under non-cancellable leases.
The Company and the consolidated entity have no contingent liabilities.
8. Issued capital
30 June 31 December
2006 2005
$ $
Issued and paid up capital
13,034,709 (31 December 2005 : 571,062,475)
ordinary shares, fully paid 18,129,240 3,332,788
Reconciliation of issued capital
30 June 30 June
2006 2006
Number $
Balance at beginning of half-year 571,062,475 3,332,788
Private placement of 80,650,000 ordinary
shares at $0.023 each to funds managed by RAB Capital
Plc, net of commission paid 80,650,000 1,762,203
Pro-rata non-renounceable issue of ordinary
shares at $0.02 per share 651,712,475 13,034,249
Consolidation of ordinary share capital on
the basis of 1 for 100 (1,290,390,241) -
13,034,709 18,129,240
9. Earnings per share
30 June 30 June
2006 2005
Number Number
Weighted average number of ordinary shares, calculated
on a post-consolidated basis, included in calculation
of:
- basic earnings per share 8,695,789 5,583,958
- diluted earnings per share 8,695,789 5,583,958
10. Retained earnings
30 June 31 December
2006 2005
$ $
Opening balance of retained earnings 2,575,802 (10,026,522)
Profit for the period 2,220,659 2,575,807
Write off of accumulated losses to issued capital - 10,026,517
Closing balance of retained earnings 4,796,461 2,575,802
11. Options
30 June 2006
Number
30 June 2010 $2.50 options over ordinary shares
Opening balance - 1 January 52,000,000
Granted during the period 5,000,000
1 : 100 consolidation (56,380,000)
Closing balance - 30 June 620,000
The options are not considered to be dilutive at 30 June 2006 as the option strike price exceeded the
average share price of the Company during the period.
The Company's Participants Option Plan, approved at the 2005 annual general meeting allows directors,
employees and consultants to acquire shares in the Company. The principal terms of the options are that
they have an exercise price of $2.50 each and are exercisable at any time on or before the earlier of 30
June 2010 and 90 days after the date the participant ceases to be employed by the Company. During the
half-year ended 30 June 2006, 50,000 options (after the effect of the 1 : 100 consolidation) were granted
under the Plan.
The fair value of services received in return for share options granted to employees is measured by
reference to the fair value of the share options granted. The fair value of options granted is
recognised as an employee expense with a corresponding increase in equity. The fair value is measured at
grant date and spread over the period during which the participants become unconditionally entitled to
the options. The fair value is measured using the Black-Scholes option pricing model, taking into
account the terms and conditions upon which the options were granted. The amount recognised as an
expense is adjusted to reflect the actual number of share options that vest except where the forfeiture
is only due to the share price not achieving the threshold for vesting.
12. Segment information
Investment Mining Total
Services
$ $ $
2006
Segment revenue 8,063 - 8,063
Segment result 2,070,407 150,252 2,220,659
2005
Segment revenue 54,250 - 54,250
Segment result 2,746,846 (276,569) 2,470,277
13. Subsequent events
Subsequent to 30 June 2006, the Company has:
* Expended a further $329,989 in respect of the Berong nickel project.
* Acquired a further 97,500 shares in Toledo at a cost of $240,178.
* Acquired a further 1,112,284 shares in Tarquin at a cost of $751,155.
* Subscribed for 3,333,333 ordinary shares and 3,333,333 #0.03 twelve month warrants in Cambrian
Oil and Gas plc at a cost of $245,234.
* Subscribed for 1,714,285 ordinary shares in Irvine Energy plc at a cost of $148,251.
* Granted to W.H. Ireland Ltd 136,547 options over ordinary shares. The options have an expiry
date of 21 August 2009 and an exercise price of $3.15 each.
* Had its securities admitted to trading on the London Stock Exchange's AIM market.
Other than the matters discussed above, there has not arisen in the interval between the end of the
half-year and the date of this report any item, transaction or event of a material and unusual nature
likely, in the opinion of the Directors of the Company, to affect significantly the operations of the
consolidated entity, the results of those operations or the state of affairs of the consolidated entity,
in subsequent financial years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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