RNS Number:1396E
Neptune Minerals Plc
20 September 2007
FOR IMMEDIATE RELEASE 20 SEPTEMBER 2007
NEPTUNE MINERALS PLC
("Neptune" or the "Company")
PRELIMINARY RESULTS
For the year ended 30 June 2007
Neptune Minerals Plc (AIM: NPM.L), the AIM listed explorer and developer of
seafloor massive sulphide ("SMS") deposits, is pleased to announce its
preliminary results for the year ended 30 June 2007.
HIGHLIGHTS
Active exploration programs
* Kermadec 07, Neptune's second New Zealand exploration program, began in May
2007 and concluded in August 2007. Neptune discovered two hydrothermally
inactive SMS zones over which the Company intends to lodge a mining licence
application.
* In July 2007, Neptune commenced its third New Zealand exploration program,
Colville-Monowai 07, and participated in an international research program
in Neptune's Italian application areas.
Newmont Mining placement
* In June 2007 Neptune received an investment of #2.5 million from Newmont
Mining Corporation, the world's second largest gold mining company. This
placing represented a 10.85% holding in Neptune.
* Newmont may participate in exploration activities in a joint venture and may
place staff and provide technical expertise to assist Neptune's future
exploration activities.
* Neptune's cash position at 30 June 2007 was healthy with #5.92 million in
the bank.
Strong exploration portfolio
* During the 2007 financial year, Neptune was granted 200,326 km2 of new
exploration acreage and made new applications for 214,000 km2.
* The Company now has a tenement portfolio of 627,000 km2 under licence or
application.
Increased shareholder value
* Neptune's share price increased 155% in the year to 30 June 2007.
* Its market capitalisation increased from #9M to #24M during the financial
year.
Result and dividend
* The loss for the Group for the year ended 30 June 2007 amounted to
#649,000 (2006: #1,760,000). The Directors do not recommend payment of a
dividend.
Dr Simon McDonald, Neptune's Chief Executive Officer, said:
"Neptune has made significant progress towards its goal of undertaking trial
mining by 2010. The encouraging discovery of two new SMS zones in Neptune's New
Zealand tenements is an important step towards converting these tenements into
mining licences.
Investor confidence in Neptune has grown, as evidenced by the placement to
Newmont and the 155% share price increase in the past year. Securing the backing
of additional significant investors and industry partners will allow Neptune to
accelerate exploration and development of its projects."
CHAIRMAN AND CHIEF EXECUTIVE'S REPORT
The 2007 financial year was a busy and exciting time for Neptune and for SMS
commercialisation. When Neptune was formed in 1999, SMS deposits were relatively
unknown outside the research community as was still the case in 2005 when
Neptune became the only listed company focussed on exploration and development
of SMS deposits. Within two years, however, interest in the SMS industry has
grown considerably. There are now four companies exploring for SMS. Neptune aims
to be trial mining by 2010.
When it was listed on AIM in October 2005, Neptune had one granted prospecting
licence and two applications in the New Zealand Exclusive Economic Zone (EEZ).
Neptune undertook to perform two exploration programs within two years using the
funds raised at IPO.
By the end of August 2007, Neptune had been granted licences in New Zealand,
Papua New Guinea and Micronesia covering a total of 264,000 km2 and had
completed three exploration programs in New Zealand and one in Italy using IPO
funds. Neptune has a further 363,000 km2 under application in six
jurisdictions, all of which underline the robust pipeline of exploration
projects.
Commercialisation of SMS represents one of the few remaining frontier
opportunities for mining companies that need new sources to replace current
production and to meet growing demand. Major players in the mining industry have
invested in the developing SMS market, with Anglo American, Barrick Gold, Teck
Cominco and, most importantly for Neptune, Newmont Mining Corporation investing
in the sector. Newmont became a significant shareholder in June 2007 and Neptune
looks forward to Newmont's involvement and support in the New Zealand
exploration program as well as Neptune's other projects.
Neptune remains committed to a sustainable development strategy and will
continue to work cooperatively with government authorities on marine research
and environmental baseline studies in all of its projects. The Company has made
a strategic decision to operate in countries only where the appropriate
legislative system is in place to support responsible development of SMS
deposits.
Objectives
Neptune aims to be at the forefront of identifying and developing SMS deposits
and developing the technologies required to commercialise those deposits in a
safe and environmentally sustainable manner. Key to Neptune's success will be:
*A large and diverse exploration portfolio;
*An active and professionally managed exploration program;
*Entering into strategic partnerships with mining companies and marine
technology providers; and
*Undertaking additional fundraisings to accelerate SMS commercialisation
and maximise the return for investors.
Large and diverse exploration portfolio
Neptune has used its first mover advantage in defining and applying for a large
and diverse portfolio of SMS acreage. There is now a total of 627,000 km2 either
subject to granted exploration title or as applications in areas of known SMS
mineralisation. The focus is primarily in the Western Pacific Ocean.
During the 2007 financial year, Neptune was granted new exploration licences
totalling 200,326 km2 in the Exclusive Economic Zone of the Federated States of
Micronesia and within the territorial waters of Papua New Guinea.
Granting of these new tenements represents an important step in Neptune's
strategy to build a geographically diverse portfolio of quality exploration
tenements in countries where the appropriate legislative system is in place to
support responsible development.
Active exploration program
In May 2007 Neptune commenced Kermadec 07, its second New Zealand exploration
program. The program comprised high-resolution seafloor mapping and sampling of
SMS targets.
During the year, Neptune contracted the New Zealand National Institute for Water
and Atmospheric Research (NIWA) vessel RV Tangaroa to undertake ship-based
multi-beam bathymetry (swath) mapping over the Colville and Monowai tenements
offshore New Zealand. The 30-day program began in July 2007 and fulfills the
first term work and expenditure commitment for each licence at a cost of NZ$1.6M
(#620,000).
Neptune is considering a joint venture structure as the means of funding Project
Trident, a program of continuous exploration across Neptune's granted tenements.
The aim of Project Trident would be to utilise a dedicated survey and sampling
vessel with technical and geological staff for at least 24 months to explore
Neptune's New Zealand licences.
The Company plans to undertake resource development using existing marine
technologies that have been proven over decades in the offshore oil and gas,
diamond mining and the seafloor cable and trenching industries. Neptune is
concurrently forming technical partnerships that will support Neptune during
commercialisation. Partnerships with technology specialists and marine
contractors will undertake economic scoping studies, engineering studies and
provide logistical support to improve and optimise the systems used in SMS
commercialisation.
Additional funding
During the 2007 financial year, Neptune allocated 53% of its operating
expenditure on exploration and activities relating to increase in acreage. As at
30 June 2007, Neptune had cash in hand of #5.92 million. It is intended that
Neptune's future activities will be financed by a combination of joint venture
agreements, together with private and public capital raisings.
In June 2007, Neptune raised #2.5 million through a private placement with
Newmont Mining Corporation, the world's second largest gold mining company.
Newmont holds 10.85% of Neptune stock and has right of first refusal to take a
majority joint venture position on any of Neptune's exploration projects in New
Zealand, Japan and Papua New Guinea. Newmont will conduct metallurgical
test-work on the SMS samples that Neptune collects during Kermadec 07 and has
the right, at its cost, to allocate its technical staff to assist Neptune with
geological, engineering and metallurgical studies.
Seeking cornerstone investments by key mining industry players such as Newmont
was part of Neptune's initial business strategy. Newmont's investment and
participation, possibly together with others, will allow Neptune to accelerate
its activities and work towards a trial mining project in 2010.
RESULTS AND DIVIDEND
The loss for the Group for the year ended 30 June 2007 amounted to #649,000. The
loss incurred in the 15 months to 30 June 2006 amounted to #1,760,000.
The Directors do not recommend payment of a dividend.
EVENTS SUBSEQUENT TO THE END OF THE PERIOD
Neptune completed the Kermadec 07 exploration program on 12 August 2007,
announcing the discovery of two hydrothermally inactive SMS zones on the Rumble
II West seamount in the Company's prospecting licence PL39-195 (Kermadec). This
SMS field comprises relict sulphide "chimneys" standing up to 13m high and
mounds of SMS material including chimney fragments.
The Company's intention is that this area will form the basis of Neptune's first
mining licence application.
On 28 August 2007, Neptune concluded its Colville-Monowai 07 exploration
program, completing more than 20,000 km2 of ship-mounted multi-beam bathymetry
("swath") mapping over the Company's prospecting licence PL39-194 (Monowai).
Numerous SMS-prospective seafloor features were defined for the first time.
These will be further investigated during Neptune's proposed Project Trident,
which should commence in 2008.
On 30 August 2007, Neptune completed its participation in a multinational
scientific research program on board the German research vessel RV Meteor. The
Company collected samples from prospective areas on the Palinuro, Marsili and
Panarea Seamounts offshore Italy, over which Neptune has tenement applications.
OUTLOOK
Neptune's priorities for the next year are to commence Project Trident - with
full-time exploration activities in New Zealand - and to lodge a mining licence
application with the New Zealand Government over the inactive SMS zones
identified during the Kermadec 07 exploration program.
Neptune will also continue making applications in selected areas and undertaking
exploration programs in areas with tenements granted.
The Company is in the process of forging technical partnerships with specialised
industry groups, and is undertaking a scoping study of the mining and lifting
technologies required for commercialisation.
Neptune intends to set in place funding arrangements to underpin future core
activities, to accelerate the business of commercialising SMS and to maximise
shareholder returns.
Peter Vanderspuy Simon McDonald
Chairman Chief Executive
This announcement was approved by the Board of Directors on 19 September 2007.
END
For further information please contact:
Neptune MD and CEO info@nepmins.com
Simon McDonald
Blue Oar Securities Plc, Nomad and Broker T: +61 (0) 8 6430 1631
Olly Cairns
Cardew Group, PR T: +44 (0) 20 7930 0777
Nadja Vetter M: +44 (0) 7941 340 436
Sofia Rehman M: +44 (0) 7771 683 185
The Neptune Minerals Website is www.neptuneminerals.com
Year ended Period ended
Note 30 June 2007 30 June 2006
#'000 #'000
Administrative
expenses (864) (1,934)
Other operating
expenses (13) (6)
---------- -----------
Operating loss (877) (1,940)
Investment income 228 180
---------- -----------
Loss before
taxation (649) (1,760)
Taxation - -
---------- -----------
Loss for the period (649) (1,760)
========== ===========
Attributable to:
Equity holders of
the Company (649) (1,760)
========== ===========
Loss per share
Basic 3 (1.1p) (4p)
========== ===========
Diluted 3 (1.1p) (4p)
========== ===========
The income statement has been prepared on the basis that all operations are
continuing.
There are no recognised gains and losses other than those passing through the
income statement.
At 30 June 2007 At 30 June 2006
ASSETS Note #'000 #'000
Non-current assets
Intangible assets 4 4,336 2,360
Property, plant and equipment 17 18
--------- ---------
4,353 2,378
Current assets
Trade and other receivables 138 102
Cash and cash equivalents 5,927 5,197
--------- ---------
6,065 5,299
--------- ---------
Total assets 10,418 7,677
========= =========
EQUITY AND LIABILITIES
Capital and reserves
Share capital 323 288
Share premium 11,119 8,789
Share option reserve 392 392
Retained earnings (2,460) (1,946)
--------- ---------
Total equity 9,374 7,523
Current liabilities
Trade and other payables 1,044 154
--------- ---------
Total liabilities 1,044 154
--------- ---------
Total equity and liabilities 10,418 7,677
========= =========
Share Option Share Share Retained Total
Reserve Capital Premium Earnings
#'000 #'000 #'000 #'000 #'000
Balance at 20 - - - - -
April 2005
Exchange
differences on
translating
foreign
operations - - - (186) (186)
Loss for the
period - - - (1,760) (1,760)
Share option
benefit 392 - - - 392
Ordinary
shares issued - 288 - - 288
Premium on
shares issued - - 8,789 - 8,789
_______ _______ _______ _______ _______
Balance at 30
June 2006 392 288 8,789 (1,946) 7,523
Exchange
differences on
translating
foreign
operations - - - 135 135
Loss for the
year - - - (649) (649)
Share option - - - -
benefit
Ordinary
shares issued - 35 - - 35
Premium on
shares issued - - 2,330 - 2,330
_______ _______ _______ _______ _______
Balance at 30
June 2007 392 323 11,119 (2,460) 9,374
______ ______ ______ ______ ______
Year ended Period ended
30 June 2007 30 June 2006
#'000 #'000
OPERATING ACTIVITIES
Operating loss (877) (1,940)
Adjustment for:
Share option benefit - 392
Foreign exchange (194) (126)
Depreciation 13 6
--------- ---------
Operating cash flow
before changes in
working capital (1,058) (1,668)
Increase in trade and
other receivables (36) (102)
Increase in trade and
other payables 890 154
--------- ---------
Net cash used in
operating activities (204) (1,616)
--------- ---------
Investing activities
Purchase of property,
plant and equipment (9) (24)
Intangibles (1,581) (2,360)
--------- ---------
Net cash used in
investing activities (1,590) (2,384)
--------- ---------
Financing activities
Interest received 228 180
Issue of share capital 2,530 10,149
Cost of share issue (165) (1,072)
--------- ---------
Net cash from financing
activities 2,593 9,257
--------- ---------
Net increase in cash and
cash equivalents 799 5,257
Cash and cash
equivalents at start of
the year 5,197 -
Effect of foreign
exchange rate changes (69) (60)
--------- ---------
Cash and cash
equivalents at end of
the year 5,927 5,197
========= =========
1. BASIS OF PREPARATION
The preliminary results were approved by the Board of Directors on 18th
September 2007. The financial information set out above does not comprise the
Company's statutory accounts for the year ended 30 June 2007 or 30 June 2006,
but is derived from those accounts. The auditors have reported on the 2006
accounts; their report was unqualified. The auditors have yet to sign their
report on the 2007 accounts. The statutory accounts for the year ended 30 June
2007 will be finalised on the basis of the financial information presented by
the Directors in this preliminary announcement.
These preliminary results have been prepared in accordance with the accounting
policies normally adopted by the Company and which are consistent with those
adopted in the audited accounts for the year ended 30 June 2007. Where relevant
the provisions of International Financial Reporting Standards have been applied
in the preparation of these financial statements. The Annual Report and Accounts
will be mailed to shareholders on or before 19 October 2007.
2. TURNOVER
The Group's principal activity during the period was the exploration for SMS
deposits in the New Zealand held acreage and the identification of new SMS
environments.
Turnover for the period is #nil.
3. LOSS PER SHARE
The calculation of basic loss per share is based on the loss for the period
attributable to shareholders of the Company of #649,000 (period ended 2006:
#1,760,000) and the weighted average number of 57,857,181 (period ended 2006:
44,968,237) shares in issue during the year.
Diluted loss per share for the period ended 30 June 2007 is equal to the basic
loss per share as the exercise price of the share options granted by the Company
was higher than the average market price for shares during the period. In the
period ended 30 June 2007 there were no dilutive potential ordinary shares in
issue.
4. INTANGIBLE ASSETS
Exploration and evaluation
expenditure as at
30 June 2007
#'000
Cost and net book
value
At 1 July 2006 2,360
Foreign exchange
difference 395
Additions during
the year 1,581
---------
At 30 June 2007 4,336
=========
The group commenced active exploration in December 2005 within New Zealand
waters. As at 30 June 2007, the Group owned 100% of Prospecting Licences ("PL")
PL 39-194 (Monowai, 47,110 square kilometres). PL 39-195 (Kermadec, 3,447 square
kilometres) and PL 39-205 (Colville, 13,030 square kilometres). The Company
holds 100% of each licence through Neptune Resources New Zealand Limited.
Also, as at 30 June 2007, the Group owned 100% of four Exploration Licences
("EL") within Papua New Guinea waters, through Neptune Minerals (PNG) Limited:
EL 1425 (Conical, 151 square kilometres), EL 1449 (New World, 31 square
kilometres), EL 1457 (Dripela Maunten, 72 square kilometres), EL 1458 (Fopela
Susa, 72 square kilometres). The Group also owned 100% of a Foreign Investment
Permit ("FIP") in the waters of the Federated States of Micronesia, FIP-006-07,
allowing mineral exploration and development over an area of 200,000 square
kilometres. Active exploration had not commenced on the Papua New Guinea or
Federated States of Micronesia licences as at 30 June 2007.
The recoverability of the exploration expenditure is dependent upon economically
recoverable mineral reserves being discovered in the licence areas and
sufficient cash resources being available to enable the group to complete
exploration activity and access those mineral reserves. The exploration
expenditure relates to mineral exploration activities in the Kermadec, Monowai
and Colville licence areas.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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