TIDMRBD
RNS Number : 9830S
Reabold Resources PLC
29 June 2018
FOR IMMEDIATE RELEASE 29 June 2018
REABOLD RESOURCES PLC
Annual Report and Financial Statements
For the year ended 31 December 2017
The Company is pleased to announce the publication of its Annual
Report and Financial Statements for the year ended 31 December
2017, extracts from which are set out below, and which will be
posted to shareholders and made available on the website
www.reabold.com
For further information please contact:
Reabold Resources plc c/o Camarco
Stephen Williams +44 (0) 20 3757 4980
Sachin Oza
Beaumont Cornish Limited
Roland Cornish
James Biddle
Felicity Geidt +44 (0) 20 7628 3396
Camarco
James Crothers
Ollie Head
Billy Clegg +44 (0) 20 3757 4980
Whitman Howard Limited - Joint
Broker
Nick Lovering
Grant Barker +44 (0) 20 7659 1234
Turner Pope Investments (TPI)
Ltd - Joint Broker
Andy Thacker +44 (0) 20 3621 4120
Chairman's Statement
The year ended 31 December 2017 has been a transformational year
for Reabold Resources Plc ("Reabold" or "the Company"). In October
2017, the Company appointed Sachin Oza and Stephen Williams to the
Board as Co-Chief Executive Officers to lead the Company in
focusing on pre-cash flow upstream oil and gas projects. Sachin and
Stephen have worked in the energy sector for 14 and 15 years
respectively and have both worked as investment analysts with
M&G investments. Sachin and Stephen led fund raisings by the
Company in September and October 2017 totalling GBP5.7 million,
primarily from institutional investors, to support the Company's
focused investing policy.
The investing policy of the Company remains to acquire direct
and indirect interests in exploration and producing projects and
assets in the natural resources sector, and consideration is
currently given to investment opportunities globally. However,
under that policy, the Board is to concentrate on investments in
upstream oil and gas projects. Those projects have been in the form
of minority non-operating investments and interests in on-shore or
near-shore assets with low-cost drilling opportunities that can
provide medium term production and hence cashflow.
On 1 November 2017, the Company was pleased to announce its
first investment under its new executive team and focused
investment direction, entering share subscription agreements to
invest a total of GBP1.5 million in Corallian Energy Limited
("Corallian"), a private UK oil and gas appraisal and exploration
company. Corallian has a portfolio of UK oil & gas licences,
including the Colter appraisal project, that Corallian management
states has a high chance of success given the appraisal nature of
the project together with industry comparative low drilling costs.
An initial GBP0.5m subscription in Corallian was completed on
signing of the subscription agreement, with a further GBP1 million
subscription to be completed at the time of the authorisation for
expenditure by the joint venture partnership of P1918 in respect of
the Colter well, which was completed in May 2018. Subsquently in
February 2018, the Company announced that it was supporting a
further capital raising by Corallian and would invest an additional
GBP1.0 million, of which GBP0.5m was completed in February 2018 and
the balance of GBP0.5m was completed in April 2018. Completion of
the above subscriptions has resulted in Reabold investing a total
of GBP2.5m for a 32.9% interest in Corallian.
On 4 December 2017, the Company was pleased to announce its
second investment, entering into an agreement with Danube Petroleum
Limited ("Danube", a wholly owned subsidiary of ASX listed ADX
Energy Ltd, (ASX:ADX) to invest a total of GBP1.5 million for a 29%
interest in Danube. Danube is a newly-formed UK private oil and gas
company, which holds a 50% interest in the high impact Parta
licence ("Parta"), onshore Romania, and a 100% interest in a
low-risk appraisal campaign within Parta, comprising of two wells
planned in the second half of 2018 to test 33 Billion Cubic Feet
("BCF") prospective and contingent resources. The first tranche of
the Company's investment in Danube of GBP0.375 million was
completed in March 2018, with the second tranche of GBP1.125
million to be completed upon submission of an Authorisation for
Expenditure for the first appraisal well, which is anticipated in
Q3 2018. Reabold has an option to invest a further GBP0.375 million
in Danube, which can be actioned at the discretion of the Company
within 6 months after completion of the transaction.
On 14 June 2018, the Company was pleased to announce the
significant acquisition of 100% of the issued share capital of
Gaelic Resources Ltd ("Gaelic") for the issue of 420 million new
ordinary shares in Reabold ("Consideration Shares"), representing
GBP3.04 million at the closing price of 0.725p per share on AIM on
12 June 2018 (the "Gaelic Acquisition"). The Gaelic Acquisition
provides Reabold with options to participate in multiple near-term,
high-impact oil and gas leases in California, United States (the
"Leases").
Placings
In April 2017, the Company announced the arrangement of
subscriptions totalling GBP0.367 million for 73,500,000 new
ordinary shares at a price of 0.5p per share to fund the Company's
investment of AUD$0.5 million (approx. GBP0.3 million) in lithium
explorer Tonsley Mining Pty Ltd ("Tonsley") and for working capital
purposes. In July 2017 the Board announced that it did not believe
that its investment in Tonsley and its San Jose Lithium-Tin Project
in Spain represented a long term asset for the Comapny and that it
had delivered a Notice of Exercise of Put Option, which resulted in
a transfer of AUD$0.5 million back to the Company.
Following the divestment of Tonsley and the Board's decision to
focus on upstream oil and gas projects, in September 2017 the
Company undertook a placing of 792,000,000 new ordinary shares at a
price of 0.5 pence per share, raising GBP3.96 million (before
expenses) to support the Company's investment policy. Whitman
Howard and Turner Pope were appointed as the Company's joint
broker, and they were instrumental in the equity fund raise from a
mix of institutional and retail investors.
In view of the strong demand from investors to participate in
the September placing, which significantly exceeded the Directors'
existing authorities to allot shares on a non-pre-emptive basis,
the Company obtained approval from shareholders at a general
meeting ("GM") of the Company in October 2017 to enable a further
placing on a non-pre-emptive basis. Subsequent to shareholder
approval at the GM, the Company completed a further placing of
352,000,000 new ordinary shares at a price of 0.5 pence per share
raising GBP1.76 million (before expenses) in October 2017.
Subsequent to year end, and in further support of the Company's
investing strategy and executive team, the Company was delighted to
complete in March 2018 a significant fund raising of 1,291,750,000
new ordinary shares at a price of 0.6 pence per share, raising
GBP7.75 million (before expenses) to support the Company's
investment policy.
Corallian Energy Investment
On 1 November 2017, the Company signed two share subscription
agreements to acquire a total of 1,111,111 new shares at GBP1.35
per share in Corallian, for a total investment of GBP1.5 million
(the "Corallian Investment"). Corallian has a portfolio of UK oil
& gas licences, including the Colter appraisal project
("Colter"), that Corallian management states has a high chance of
success given the appraisal nature of the project together with
industry comparative low drilling costs.
The total subscription for GBP1.5 million would have given
Reabold a 35.4% interest in Corallian at that time, with the right
to appoint a director to the board of directors of Corallian. An
initial GBP0.5 million subscription in Corallian was completed in
October 2017, followed by the balance of GBP1.0 million in June
2018.
Corallian, at the time, held five licence interests in the UK,
one of which was a 60% in UK licence P1918 which includes the
Colter prospect. P1918 was held by a joint venture between
Corallian (60%), the operator and Corfe Energy Limited (40%).
The Corallian Investment was the first to be completed in line
with Reabold's strategy to identify strategic oil & gas
opportunities with the potential to create significant shareholder
value. The investment was funded from existing Reabold cash
reserves following the successful fund raises in September and
October 2017.
Highlights - Corallian's Colter Project:
-- Colter is offshore, adjacent to the Wytch Farm oil field,
which has produced in excess of 450 million barrels of oil;
-- A 1986 discovery well on Colter recovered 41.9 API oil on test from a 10.5m oil column;
-- Since the 1980's seismic technology has advanced
significantly such that Corallian has used modern techniques to
merge and reprocess 3D seismic datasets which have enabled the
identification of over 100m of mapped vertical relief up-dip of the
discovery well;
-- An appraisal well is planned to be drilled on Colter by Corallian (Operator) in 2018;
-- Corallian estimates gross mean prospective resources of 30
million barrels of recoverable oil for the Colter prospect; and
-- Corallian financial modelling based on the above prospective
resources forecasts a gross NPV (10) in the success case of GBP255
million.
Since Reabold's initial investment, we have been very pleased
with the significant progress that has been achieved within the
Corallian portfolio, including multiple farm-outs of both the
Colter and Wick prospects.
On 12 February 2018, Reabold announced that Corallian was
intending to raise additional capital ("the fundraise") in order to
increase its exposure to the Colter prospect from 40% to 50%, to
increase its exposure to the Wick prospect from 25% to 40%, and to
further progress additional assets including the Oulton prospect.
Following the fundraise Corallian is fully funded for all of this
activity.
Reabold was pleased to support and participate in the fundraise
and on 1 March 2018 announced that it had signed two subscription
agreements with Corallian Energy being made from existing cash
resources. The first agreement was an unconditional subscription
for 333,333 new Corallian shares at GBP1.50 per share for an
investment of GBP0.5 million, and was completed in February 2018 .
The second agreement gave Reabold the option to subscribe for an
additional 333,333 new Corallian shares at a price of GBP1.50 per
share for an investment of GBP0.5 million any point up to 6 April
2018, which was completed prior to the expiry date. Taking the full
Corallian fundraisings into account, Reabold has invested a total
of GBP2.5 million for a current interest in 32.9% of Corallian's
issued share capital.
Danube Petroleum Investment
In December 2017, the Company entered an agreement with Danube
Petroleum Limited ("Danube") to invest a total of GBP1.5 million
for a 29% interest in Danube. Danube holds a 50% interest in the
high impact Parta licence, onshore Romania, and a 100% interest in
a low-risk appraisal campaign within Parta, comprising of two wells
planned in H2 2018 / H1 2019 to test 33 BCF prospective and
contingent resources.
The Danube investment, which includes the right for Reabold to
appoint a director to the Board of Danube, was formed of an initial
375,940 new shares issued upon completion of the transaction at
GBP1.00 per share in March 2018. This will be followed by a further
1,127,819 new shares to be issued upon submission of an
Authorisation for Expenditure for the first appraisal well at
GBP1.00 per share anticipated in the third quarter of 2018. Reabold
has an option of a further 375,940 shares in Danube at GBP1.00 per
share, which can be actioned at the discretion of the Company
within 6 months after completion of the transaction.
Highlights - Danube Petroleum Limited's Parta Project:
-- Parta licence is situated onshore, within a proven and stable
hydrocarbon region that benefits from low drilling and operating
costs
-- The two well Parta appraisal programme will redrill 1980s gas
discoveries, including one that flowed gas to surface
-- Recently acquired 3D seismic data has delineated considerable
untapped gas resources of 33 BCF gross in the primary reservoir
targets, with additional upside in other horizons
-- Onshore Romania requires very low capital expenditure with
nearby infrastructure, which will ensure fast payback following
first gas
-- Economics are highly attractive based on current gas prices
of $6.2/mbtu and the Parta licence is considered profitable at
substantially lower gas prices
-- The Parta licence includes additional exploration and
appraisal upside on the block with the potential for further total
un-risked gross prospective resources of approximately 300 BCF of
gas and 45 MMbbl of oil respectively identified on existing 2D
seismic
-- Danube Petroleum Limited gives Reabold a foothold in Eastern
Europe, providing the Company the opportunity to consolidate other
licences in the area
The 33 BCF of prospective and contingent resource Parta
appraisal project will consist of two low-cost appraisal wells,
planned for drilling in 2018. The directors, based on financial
modelling of the prospective resources of the Parta appraisal
project, estimate an NPV (10) in the success case of up to USD$86
million gross for a multi-well development across the two appraisal
projects.
Tonsley Mining Pty Limited
On 19 April 2017, the Company announced that it had entered into
an agreement to buy an initial interest in the advanced San Jose
Lithium-Tin Project in Spain ("the San Jose Project") for a
consideration of AUD$0.5 million (approx. GBP0.3 million). The San
Jose Project is a Joint Venture between Plymouth Minerals Limited's
("Plymouth" ASX:PLH) subsidiary Tonsley Mining Pty Limited
("Tonsley") and Sacyr, S.A, the IBEX 35 Spanish listed
multinational infrastructures and services company. This investment
was in line with Reabold's strategy to identify strategic mineral
opportunities with the potential to add significant shareholder
value.
The initial investment in the San Jose Project was affected
through a share subscription agreement in the amount of AUD$0.5
million to acquire a minority interest of approx. 2.0% in Tonsley,
an Australian special purpose holding company which owns the rights
to earn up to a 75% interest in the San Jose Project. After an
agreed amount of time between the Parties or in the event no
interest is earned by Tonsley (or its subsidiary) in the San Jose
Project, there was an agreed contractual mechanism (by way of
options) for the AUD$0.5 million funds to be returned to the
Company.
Tonsley has the right to earn a 75% interest in the San Jose
Project by spending EUR1.5 million for a first stage 50%, then
EUR2.5 million for the additional 25%, which is being funded by
Plymouth.
On 17 July 2017, the Company announced that it had delivered to
Plymouth a Notice of Exercise of Put Option in respect of Reabold's
interest in Tonsley, whereby Reabold wouldtransfer back to Plymouth
its shares in Tonsley in consideration of receipt of AUD$0.5
million (approx. GBP0.3 million), payable on 18 July 2017. Whilst
the Tonsley investment represented an interesting opportunity for
Reabold, it was decided that this would not form a long term asset
for Reabold and therefore that Reabold should exercise its put
option and redeploy the money on other investments.
Mogul Ventures Corp. Investment
The Company acquired in June 2014 a 1.2% interest in Mogul
Ventures Corp. ("Mogul"), a private company focused on natural
resources in Mongolia, principally tin.
In September 2017 Mogul raised CAD$25,000 through a debenture
convertible at $0.25 per share to provide working capital. Mogul
management advise that Mogul is currently is discussion with two
potential investors/strategic partners from China for development
of the its tin project, as well as ongoing discussions with a TSX
Venture Exchange listed company for a financing and listing
transaction.
The Company's interest in Mogul is non-core to its investment
focus on pre-cash flow upstream oil and gas projects, and the
Company is evaluating its divestment.
Notwithstanding that Mogul management remain positive towards
Mogul's future in the public markets under improved market
conditions, the Company has impaired its 1.2% interest in Mogul
from GBP200,000 to GBP50,000, given Mogul's cash constrained
position and challenges to date in raising significant capital, and
the lack of sufficient clarity of its financial position.
Post year-end acquisition - Gaelic Resources Ltd
The proposed acquisition of 100% of Gaelic is considered by
management to be a perfect fit with the Reabold strategy, providing
high-impact drilling opportunities in California, with considerably
de-risked wells with low drilling costs and a fast path to
monetisation.
Following completion of the Gaelic Acquisition, Reabold, through
Gaelic, will have the right to earn-in to 50% of the Leases by
drilling up to five wells by the end of 2019. Reabold expects three
of these wells to be drilled before the end of 2018 with the first
two, on the West Brentwood and Monroe Swell Leases, anticipated to
be drilled in Q3. In a success case, these wells will be put onto
production, providing cashflow for further drilling activity. The
Leases are operated by Integrity Management Solutions (the
"Operator"), a California operating company that will direct
operational decisions pertaining to the licenses. The five-well
drilling programme is expected to cost Reabold up to approximately
USD$7 million for the five wells.
The Gaelic Acquisition is subject to the approval of a
Resolution to authorise the issue and allotment of the 420 million
Consideration Shares at a General Meeting of the Company to be held
on 29 June 2018. Application will be made in due course for the
Consideration Shares, which when issued, will rank pari passu with
the existing ordinary shares in issue, to be admitted to trading on
AIM. The vendors of Gaelic, who collectively will hold 12.86 per
cent. of Reabold's enlarged issued share capital, have agreed to a
lock-in period in respect of 75% of the Consideration Shares of six
months from the date of issue and thereafter to orderly market
arrangements for a further six months.
Consultants
We were delighted to appoint as a consultant to the Company, Dr
Peter Dolan, who has been involved in the oil and gas exploration
industry since 1965 and has considerable experience with a wide
range of pre-cash flow assets. He has an extensive network of
personal contacts in the industry and is an active member of the
Geological Society as well as various professional bodies and
charities. Peter co-founded Ophir Energy plc and Ikon Science
Limited and numerous other entities which have long since made
their exits. He has also invested in early stage companie,
including the oil and gas sector. Peter brings a wealth of
experience to the Company in his role as a consultant.
The Board looks forward to reporting further in due course.
Strategic Report
Much has been achieved in the several months since we joined
Reabold, including:
-- three rounds of fundraising attracting strong institutional support;
-- investments in Corallian and Danube funding an exciting (and
potentially transformational) drilling campaign;
-- the proposed acquisition of 100% of Gaelic; and
-- maturing a number of further exciting transactions.
These achievements are just the first part of executing our
differentiated strategy which is tailored to create shareholder
value against an industry backdrop that has caused widespread share
price underperformance in junior exploration and production
companies since 2012.
Our strong focus on this sector during our many years in the
asset management industry leaves us fully understanding the
frustration felt by investors experiencing falling share prices
despite sound underlying asset bases. At the core of the Reabold
strategy is the conversion of quality assets into positive share
price performance, and this mindset drives everything that we
do.
This is a very exciting time in the upstream oil & gas
industry; costs remain extremely low following the downturn, and
with a healthy commodity price outlook, project returns (for high
quality assets) are more robust than has been the case for quite
some time. As such, this is the ideal time to put capital into the
ground, and the lack of activity in conventional oil & gas over
the last half a decade has resulted in an abundance of interesting
projects in need of financing.
We are extremely excited by the return potential these
opportunities provide Reabold investors and look forward to
embarking on a multi-well transformational drilling campaign over
the next twelve months.
Business Model
Reabold is an investor in upstream oil and gas projects with an
aim to create value from each project by investing in undervalued,
low-risk, near-term upstream oil & gas projects and by
identifying realistic potential exit plans prior to investment. The
Company is focused on investment in pre-cash flow upstream oil and
gas projects, primarily as significant minority interests or
controlling interests in unlisted oil and gas companies.
The Company's long term strategy is to re-invest capital made
through its investments into larger projects in order to grow the
Company. Reabold aims to gain exposure to assets with limited
downside and high potential upside, capitalising on the value
created between the entry stage and exit point of its projects. The
Company invests in projects that have limited correlation to the
oil price.
Reabold has a highly-experienced management team, who possess
the necessary background, knowledge and contacts to carry out the
Company's strategy. Management believes the current distress in the
oil & gas industry presents an opportune time to deploy capital
in undervalued assets with huge potential.
The Company has made two initial investments in Corallian and
Danube and management continues to assess a number of other high
quality opportunities. As announced on 14 June 2018, the Company
announced the acquisition of 100% of the issued share capital of
Gaelic subject to shareholder approvals at the General Meeting of
the Company to be held on 29 June 2018. Gaelic has the right to
earn-in to 50% of multiple near-term, high-impact oil and gas
leases in California, United States by drilling up to five wells by
the end of 2019.
Corallian
Corallian management expects both the Colter and Wick prospects
to be drilled in 2018. According to Corallian management estimates,
the Colter project targets an NPV (net to Corallian at a 50% equity
interest) of GBP128M based on 15M barrels of oil and a $55/bbl oil
price. Corallian management estimates a 58% chance of success. The
Wick project targets an NPV (net to Corallian at a 40% equity
interest) of GBP84M based on 9.4M barrels of oil and a $55/bbl oil
price. Corallian management estimates a 30% chance of success.
Danube
Reabold's investment in Danube offers the Company exposure to
the low-risk, high-impact Parta license, onshore Romania. In line
with Reabold's strategy, and as previously announced, a two-well
appraisal campaign is scheduled for H2 2018. The objective of the
campaign is to test 33 BCF of prospective and contingent resources,
delieniated by 3D seismic data, gross to Danube Petroleum that will
generate $86m of NPV to Danube Petroleum.
Parta particularly stood out as an opportunity due to the low
drilling and operating costs which meant the time to invest in the
asset was now. The economics are extremely attractive based on
current gas prices and the license is considered profitable at
considerably lower gas prices.
As part of the planned work programme, the appraisal wells are
also intended to be producer wells. Danube can use the abundance of
nearby infrastructure to readily monetise gas, thereby creating
cashflow for Danube and subsequently Reabold. This cash can then be
used to target further upside on the licence on which prospective
resources of 300BCF of gas and 45 MMbbl of oil have been identified
by the operator. As part of the appraisal campaign, two gas
discoveries, one of which has previously flowed gas to surface,
will be re-drilled.
Principal Risks and Uncertainties
The Company continuously monitors its risk exposures and reports
to the board of directors ("The Board") on a regular basis. The
Board reviews these risks and focuses on ensuring effective systems
of internal financial and non-financial controls are in place and
maintained.
Risk Mitigation Magnitude & Likelihood
Exploration Risk, Reabold's Analysis of available Magnitude- High
investee companies fail technical information Likelihood - High
to locate and explore to determine work programme.
hydrocarbon bearing Risk sharing arrangements
prospects that have entered into to reduce
the potential to deliver downside risk.
commercially, e.g. key
wells are dry or less
successful than anticipated.
------------------------------- -----------------------
Permitting Risk, planning, Reabold's investee companies Magnitude- High
environmental, licensing have to date been successful Likelihood - Medium
and other permitting in obtaining the required
risks associated with permits to operate.
our investees operations Therefore, Reabold considers
particularly with exploration that such risks are
drilling partially mitigated
operations. through compliance with
regulations, proactive
engagement with regulators,
communities and the
expertise and experience
of the management teams.
------------------------------- -----------------------
Liquidity Risk, because The Board regularly Magnitude- High
of its investee's exploration reviews Reabold's cashflow Likelihood - Medium
and development activities. forecast and the availability
or adequacy of its current
facilities to meet Reabold's
cash flow requirements.
------------------------------- -----------------------
Financial Review
The loss of the Company for the 12 months ended 31 December 2017
was GBP1,152,000 (2016: loss of GBP115,000), including impairment
charge of GBP150,000 (2016: GBPnil) and share based payments
expense of GBP559,000 (2016: GBPnil). The net assets as at 31
December 2017 were GBP5,732,000 (2016: GBP509,000). As at 31
December 2017, the Company had cash of GBP5,307,000 (2016:
GBP340,000). Due to the relative limited time frame and activity of
the Company to date in respect to the current focused strategy, the
Board have not identified any key performance indicators of the
Company.
Outlook
We are highly encouraged by the success we have had so far in
the implementation of our strategy to invest in low-risk, high
impact upstream oil and gas projects. With a portfolio that now
contains the Danube and Corallian appraisal campaigns drilling in
2018, and the proposed acquisition of 100% of Gaelic and its
exciting programme in 2018, together with a number of other
projects currently under review, Reabold shareholders can look
forward to an exciting 2018 and beyond.
Statement of comprehensive income for the year ended 31 December
2017
_____________________________________________________________________________________
Notes 2017 2016
GBP'000 GBP'000
Administration expenses (342) (115)
Impairment 9 (150) -
Provision 11 (101) -
Share based payments expense 13 (559) -
Loss on ordinary activities before taxation 4 (1,152) (115)
Taxation on loss on ordinary activities 7 - -
Loss for the financial year (1,152) (115)
Other comprehensive income - -
Total comprehensive loss for the financial
year (1,152) (115)
Attributable to:
Equity holders (1,152) (115)
(1,152) (115)
Loss per share
Basic loss per share (pence) 8 (0.18) (0.04)
Diluted loss per share (pence) 8 (0.14) (0.04)
All amounts relate to continuing operations.
Statement of financial position as at 31 December 2017 Company
no. 3542727
_____________________________________________________________________________________
Notes 2017 2016
GBP'000 GBP'000
ASSETS
Non-current assets
Investments available for sale 9 550 200
550 200
Current assets
Cash and cash equivalents 5,307 340
Trade and other receivables 10 30 1
Prepayments 32 -
5,369 341
Total assets 5,919 541
EQUITY
Capital and reserves
Share capital 12 1,654 435
Share premium account 13,048 8,451
Capital redemption reserve 200 200
Share based payment reserve 559
Retained loss (9,729) (8,577)
Total equity 5,732 509
LIABILITIES
Current liabilities
Trade and other payables 14 65 4
Provisions 11 101 -
Accruals 14 21 28
Total liabilities 187 32
Total equity and liabilities 5,919 541
Statement of changes in equity for the year ended 31 December
2017
_____________________________________________________________________________________
Share Share Advance Capital Share Retained Total
capital premium received redemption based earnings
account for shares reserve payments
to be reserve
issued
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 31 December
2015 395 8,291 200 200 - (8,462) 624
-------- -------- ----------- ----------- --------- --------- -------
Total comprehensive
loss for the year - - -- - - (115) (115)
Changes in equity for
2016
Issue of share capital 40 160 - - - - 200
Advance received for
shares to be issued - - (200) - - - (200)
Balance as at 31 December
2016 435 8,451 - 200 - (8,577) 509
-------- -------- ----------- ----------- --------- --------- -------
Total comprehensive
loss for the year - - - - - (1,152) (1,152)
Changes in equity for
2017
Issue of share capital 1,219 4,597 - - - - 5,816
Share based payments - - - - 559 - 559
Balance as at 31 December
2017 1,654 13,048 - 200 559 (9,729) 5,732
-------- -------- ----------- ----------- --------- --------- -------
Statement of cash flows for the year ended 31 December 2017
_____________________________________________________________________________________
Notes 2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (1,152) (115)
Adjustments:
Impairment 9 150 -
Share based payments 13 559 -
Provisions 11 101 -
Realised foreign exchange gain (6) -
Operating cash flows before movement in
working capital (348) (115)
(Increase)/decrease in receivables (29) -
Increase/(decrease) in payables and accruals 54 (26)
(Increase)/decrease in prepayments (32) -
Net cash used in operating activities (355) (141)
Cash flows from investing activities
Purchase of available for sale investments 9 (795) -
Proceeds from divestment of available for
sale investments 9 302 -
Net cash used in investing activities (494) -
Cash flows from financing activities
Share placement net proceeds 12 5,816 -
Net cash generated from financing activities 5,816 -
Net increase/(decrease) in cash and cash
equivalents 4,967 (141)
Cash and cash equivalents at the beginning
of the period 340 481
Cash and cash equivalents at the end of
the period 5,307 340
Cash and cash equivalents comprises:
Cash and cash equivalents 5,307 340
Overdraft and borrowings - -
5,307 340
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER
2017
Reabold Resources Plc is a public limited company registered in
England and Wales under the Companies Act and limited by shares.
Registered in England number 3542727 at 20 Primrose Street, London
EC2A 2EW. The nature of the Company's operations and its principal
activities are set out in the Directors' report on pages 10 to
12.
1. Preparation of financial statements
Standards, amendments and interpretations in issue but not yet
effective
At the date of authorisation of these financial statements,
certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective, and have
not been adopted early by the Company.
Management anticipates that all of the pronouncements will be
adopted in the Company's accounting policies for the first period
beginning after the effective date of the pronouncement.
Information on new standards, amendments and interpretations that
are expected to be relevant to the Company's financial statements
is provided below. Certain other new standards and interpretations
have been issued but are not expected to have a material impact on
the Company's financial statements.
IFRS 9 "Financial Instruments"
The IASB have released IFRS 9 following completion of the
project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. The new standard introduces extensive changes to IAS
39's guidance on the classification and measurement of financial
assets and introduces a new 'expected credit loss' model for the
impairment of financial assets. IFRS 9 also provides new guidance
on the application of hedge accounting. IFRS 9 is effective for
annual reporting periods beginning on or after 1 January 2018 and
has been endorsed by the European Union.
IFRS 15, 'Revenue from Contracts with Customers'
IFRS 15 presents new requirements for the recognition of
revenue, replacing IAS 18 'Revenue', IAS 11 'Construction
Contracts', and several revenue-related interpretations. The new
standard establishes a control-based revenue recognition model and
provides additional guidance in many areas not covered in detail
under existing IFRSs. These include how to account for arrangements
with multiple performance obligations, variable pricing, customer
refund rights, supplier repurchase options, and other common
complexities. IFRS 15 is effective for reporting periods beginning
on or after 1 January 2018. This standard has been endorsed by the
European Union.
IFRS 16 "Leases"
The IASB has published IFRS 16 'Leases', completing its
long-running project on lease accounting. The new Standard, which
is effective for accounting periods beginning on or after 1 January
2019, requires lessees to account for leases 'on-balance sheet' by
recognising a 'right-of-use' asset and a lease liability. It will
affect most companies that report under IFRS and are involving in
leasing, and will have a substantial impact on the financial
statements of lessees of property and high value equipment. This
standard has been endorsed by the European Union.
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial
statements of the Company in future periods. The Company's
management will undertake a review of the impact on the Company of
the above new standards during 2018.
2. Summary of significant accounting policies
Basis of accounting
The 2017 financial statements are prepared under International
Financial Reporting Standards, as adopted for use by the European
Union.
The financial statements have been prepared on the going concern
basis and historical cost basis, except that the following assets
and liabilities are stated at their fair value: financial
instruments classified as fair value through the profit and
loss.
The financial statements are presented in sterling, the currency
of the primary economic environment in which the Company operates
and in which the majority of the Company's transactions are
denominated.
The principal accounting policies adopted are set out below.
Going concern
The financial statements have been prepared on the going concern
basis. The Directors have prepared cash flow forecasts for the
period ending 30 June 2019 which take account of the current cost
and operational structure of the Company and investment agreements.
These forecasts demonstrate that the Company has sufficient cash
funds available to allow it to continue in business for a period of
at least twelve months from the date of approval of these financial
statements. Accordingly, the financial statements have been
prepared on a going concern basis.
Taxation
The tax charge represents the sum of current and deferred
tax.
Current tax payable is based on taxable profits for the year.
Taxable profits differ from net profits as reported in the income
statement because it excludes items that are taxable or deductible
in other years and items that are not taxable or deductible. The
Company's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted at the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
liability method. Deferred tax liabilities are recognised for all
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax assets are
offset when there is a legally enforceable right to offset current
tax assets against current liabilities and when deferred tax assets
and deferred tax liabilities relate to income taxes levied by the
same tax authority on either the same taxable entity or different
taxable entity where there is an intention to settle on a net
basis.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability or the asset is
realised.
Currencies
Transactions in currencies other than Sterling are recorded at
the rates of exchange prevailing on the dates of the transactions.
Monetary items in the statement of financial position are
retranslated at the closing exchange rate at each statement of
financial position date, and the resulting translation differences
are recorded in profit or loss.
Impairment of investments available for sale
At each reporting date, if there is objective evidence that an
impairment loss has been incurred on an unquoted equity instrument
that is not carried at fair value because its fair value cannot be
reliably measured, the amount of the impairment loss is measured as
the difference between the carrying amount of the financial asset
and the recoverable amount, which is calculated using the Value in
Use method. Any impairment loss is recognised immediately in the
Statement of Comprehensive Income. Such impairment losses shall not
be reversed.
Share based payments
The Company has an equity-settled, share-based compensation
plan, under which the entity receives services from employees as
consideration for equity instruments (options) of the Company. The
fair value of the employee services received in exchange for the
grant of the options is recognised as an expense. The total amount
to be expensed is determined by reference to the fair value of the
options granted:
-- Including any market performance conditions;
-- Excluding the impact of any service and non-market
performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a
specified time period; and
-- Including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
Non-market vesting conditions are included in assumptions about
the number of options that are expected to vest. The total expense
is recognised over the vesting period, which is the period over
which all of the specified vesting conditions are to be
satisfied.
In addition, in some circumstances, employees may provide
services in advance of the grant date, and therefore the grant-date
fair value is estimated for the purposes of recognising the expense
during the period between service commencement period and grant
date.
At the end of each reporting period, the entity revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in profit or loss, with
a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares.
The proceeds received, net of any directly attributable transaction
costs, are credited to share capital (nominal value) and share
premium.
Financial instruments
Financial assets and financial liabilities are recognised in the
Company's statements of financial position when the Company has
become a party to the contractual provisions of the instrument.
Investments available for sale
Classification
The Company classified its investments in unlisted shares that
are not traded in an active market as available for sale at
inception. Available for sale financial assets are non-derivatives
that are either designated as available for sale or are not
classified as loans and receivables, held-to-maturity investments
or financial assets at fair value through profit or loss.
Recognition
Purchases and sales of investments are recognised on the trade
date - the date on which the Company commits to purchase or sell
the investments.
Measurement
Unlisted Investments are initially recognised at cost, being the
fair value of consideration given. Where the Company has
investments in equity instruments that do not have a quoted price
in an active market and whose fair value cannot be reliably
measured these are carried at historic cost less any identified
impairment losses at the end of each reporting period.
Fair value hierarchy
IFRS 13 requires disclosure of fair value measurements by level
of the following fair value hierarchy:
Level 1 - inputs are quoted prices (unadjusted) in active
markets for identical assets and liabilities that the entity can
readily observe;
Level 2 - inputs are inputs other than quoted prices included
within Level 1 that are observable for the asset, either directly
or indirectly; and
Level 3 - inputs that are not based on observable market data
(unobservable inputs).
Unlisted Investments are therefore classified at level 2 of the
fair value hierarchy when initially recognised.
Loans and other receivables
Loans and other receivables are recognised initially at fair
value and subsequently measured at amortised costs using the
effective interest rate method, as reduced by appropriate
provisions for estimated irrecoverable amounts less provision for
impairment. A provision for impairment is accounted for when
management deems the specific receivable balance not to be
collectable. The amount of the impairment loss is recognised in the
statement of comprehensive income.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, and other short-term deposits and liquid investments that
are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value.
Other financial liabilities
Other financial liabilities, including borrowings, are initially
measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at
amortised cost using the effective interest rate method, with
interest expense recognised on the expected yield basis. The
effective interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments through the
expect life of the expected financial liability, or, where
appropriate, a shorter period, to the net carrying amount on
initial recognition.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that creates a residual
interest in the assets of the Company.
Trade payables
Trade payables are stated at their amortised cost less any
discount or rebate received.
Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
Share premium
Representing the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the
share issue.
Capital redemption reserve
Where a company acquires its own shares out of free reserves,
then a sum equivalent to the nominal value is transferred to a
capital redemption reserve.
Share based payments reserve
Represents the value of equity benefits provided to employees
and directors as part of their remuneration and provided to
consultants and advisors hired by the Company from time to time as
part of the consideration paid.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The following are the critical accounting judgements, apart from
those involving estimations (which are dealt with separately
below), that the Directors have made in the process of applying the
Company's accounting policies and that have the most significant
effect on the amounts recognised in the financial statements.
(a) Critical judgements in applying the Company's accounting
policy
In assessing whether there have been any indicators of
impairment of assets, the Directors have considered both external
and internal sources of information such as market conditions.
(b) Key sources of estimation uncertainty
As the Company is an investing company, the key source of
estimation uncertainty is the impairment review of unlisted
investments. The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
A further key source of estimation uncertainty is the
calculation of share based payments. The Company uses the
Black-Scholes option-pricing model where applicable, with inputs,
in particular volatility, requiring significant judgement in
application.
3. Segment analysis
The segmental analysis relates to the operations of the Company,
as these are individual financial statements of the Company. The
Company has one reportable operating segment on the basis that it
incurs expenses from one business activity; being investing, and on
the basis that it currently operates in one geographical location;
being Europe. During the current year, the Company did not generate
any revenue from its investment activities.
4. Loss on ordinary activities before taxation
2017 2016
The loss on ordinary activities before taxation Note GBP'000 GBP'000
has been arrived at after charging/(crediting):
Auditor's remuneration - audit of Company 15 12
Auditor's remuneration - other taxation
advisory services 6 -
Impairment loss on available for sale investment 9 150 -
Provision for VAT non-claimable 11 101 -
Share based payments 13 599 -
Staff costs - Directors 5 121 55
Foreign exchange gain on disposal of available
for sale investment (6) -
5. Staff costs
Staff employment costs were: 2017 2016
GBP'000 GBP'000
Wages and salaries 111 50
Social security costs 10 5
Other pension costs - -
121 55
During the year there were no employees (2016: nil) employed by
the Company excluding four Directors in administration roles. The
staff costs during the year include the accrual of director fees in
the amount of GBP6,000 (2016: GBP16,000) which were not paid during
the reporting period.
6. Directors' remuneration
The emoluments paid to Directors during the year was as
follows:
Salary & fees Share based Pension 2017 2016
payments contribution Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Executive Directors
Jeremy Edelman 24 - - 24 24
Anthony Samaha 27 63 - 90 26
Sachin Oza 30 248 - 278 -
Stephen Williams 30 248 - 278 -
111 559 - 670 50
An accrual of GBP6,000 for director fees which were unpaid
during the reporting period has been made.
The directors are the key management personnel of the
Company.
As at 31 December 2017, no Director was accruing benefits under
a money purchase scheme (2016: none). The total options held by
directors as at 31 December 2017 was 190,000,000. Sachin Oza and
Stephen Williams each held 90,000,000 options which are exercisable
at 0.5p, 0.75p and 1.0p up until 19 October 2021. Anthony Samaha
held 10,000,000 options exercisable at 0.5p up until 19 October
2021.
7. Taxation on loss on ordinary activities
Factors affecting tax charge for the year:
The tax assessed for the year is higher than the standard rate
of corporation tax in the UK 20.0% from 1 January 2017 to 1 April
2017 and 19.0% from 1 April 2017 (2016: 20%).
2017 2016
GBP'000 GBP'000
Loss on ordinary activities before tax (1,152) (115)
Loss on ordinary activities multiplied by standard rate
of corporation tax in the UK (221) (23)
Effects of:
Unrelieved tax losses 221 23
Total tax for the year - -
No deferred tax assets have been recognised in the year (2016:
nil).
The corporation tax rate was 20.0% from 1 April 2014 to 1 April
2017 and 19.0% from 1 April 2017. Thus the corporation tax rate for
the year ended 31 December 2017 is 19.25%.
The Company has unused tax losses of GBP2.2 million and capital
losses of GBP2.5 million. The deferred tax asset for these losses,
amounting to GBP914,000 (2016: GBP835,000) has not been recognised
as the timing of profits is uncertain.
8. Loss per share
The calculations of the basic and diluted earnings 2017 2016
per share are based on the following data:
GBP'000 GBP'000
Loss for the year (1,152) (115)
Loss for the purpose of basic earnings per share (1,152) (115)
Number Number
Number of shares
Weighted average number of ordinary shares in issue
during the year 655,361,644 320,148,773
Effect of dilutive options 190,000,000 -
Diluted weighted average number of ordinary shares
in issue during the year 845,361,644 320,148,773
Loss per share
Basic loss per share (pence) (0.18) (0.04)
Diluted loss per share (pence) (0.14) (0.04)
9. Investments available for sale
2017 2016
GBP'000 GBP'000
At 1 January 200 200
Addition at cost - Tonsley 295 -
Divestment - Tonsley (295)
Addition at cost - Corallian 500
Impairment - Mogul (150) -
------- -------
At 31 December 550 200
------- -------
On 19 April 2017, the Company announced that it had entered into
an agreement to acquire an initial interest of approx. 2.0% in
Tonsley for a consideration of AUD$0.5 million (approx. GBP0.3
million). Tonsley owns rights to earn up to 75% of the San Jose
lithium project in Spain. Tonsley has the right to earn a 75%
interest in the Project by spending EUR1.5 million for a first
stage 50%, then EUR2.5 million for the additional 25%. After an
agreed amount of time between the Parties or in the event no
interest is earned by Tonsley (or its subsidiary) in the Project,
there was an agreed contractual mechanism (by way of options) for
the AUD$0.5 million funds to be returned to the Company. On 17 July
2017, the Company announced that it had delivered to Plymouth a
Notice of Exercise of Put Option in respect of Reabold's interest
in Tonsley, whereby Reabold wouldtransfer back to Plymouth its
shares in Tonsley in consideration of receipt of AUD$0.5 million
(approx. GBP0.3 million), payable on 18 July 2017. Whilst the
Tonsley investment represented an interesting opportunity for
Reabold, it was decided that this would not form a long term asset
for Reabold and therefore that Reabold should exercise its put
option and redeploy the money on other investments.
On 1 November 2017, the Company announced that it had entered
into two share subscription agreements with Corallian to subscribe
for 1,111,111 ordinary shares in the issued share capital of
Corallian representing 35.4% of the issued share capital of
Corallian for an aggregate subscription price of GBP1.5 million as
follows:
i) Reabold has entered into an unconditional share subscription
agreement to subscribe for 370,370 ordinary shares in the issued
share capital of Corallian ("Tranche A Shares") for an aggregate
subscription amount of GBP0.5 million which amount is payable
immediately against transfer to Reabold of the Tranche A Shares.
The Tranche A Shares represent 15.4% of the issued share capital of
Corallian.
ii) Reabold has entered into a conditional share subscription
agreement to subscribe for 740,741 ordinary shares in the issued
share capital of Corallian ("Tranche B Shares") for an aggregate
subscription amount of GBP1.0 million, representing 23.6% of the
enlarged issued share capital of Corallian and which subscription
is conditional upon the joint venture partners in licence P1918 in
respect of the Colter appraisal project approving an authorisation
for expenditure for the drilling of the Colter well prior to 30
April 2018 failing which Reabold's obligation to subscribe for the
Tranche B Shares terminates. On issue of the Tranche B Shares to
Reabold, and for so long as Reabold holds more than 30% of the
issued share capital of Corallian, Reabold has the right to appoint
a director to the board of directors of Corallian.
As outlined in the Chairman's Statement, the Directors have
impaired the Company's investment in Mogul by GBP150,000 from a
carrying value of GBP200,000 to GBP50,000, in view of Mogul's
difficulties in attracting material financing to progress its tin
project in Mongolia, despite the positive tin price trend. It is
noted that, in the opinion of the Directors, the fair value of the
Company's investment in Mogul is challenging to reliably measure
given the relatively early stage of development of the entity, and
the limited availability of financial and technical information.
Accordingly the available for sale investments in Mogul has been
measured at cost (less impairment) rather than fair value because
the fair value cannot be measured reliably.
The Company has assessed the fair value of its investment in
Corallian as at 31 December 2017 as GBP1.35 per share, applying the
subscription price of the Corallian equity raising announced in
November 2017. It is noted that in February 2018, the Company
announced that it was participating in a further fund raising by
Corallian at a subscription price of GBP1.50 per share, following
positive progress by Corallian in 2019.
10. Trade and other receivables
2017 2016
GBP'000 GBP'000
VAT receivable 30 1
30 1
The receivable is in respect of VAT receivable for the December
quarter. All receivables are due within one year. As outlined in
Note 11, the Company has made a provision for the recoverability of
the VAT receivable for the December 2017 quarter in the amount of
GBP29,957.
11. Provisions
2017 2016
GBP'000 GBP'000
At 1 January - -
Provisions - charge for the year 101 -
At 31 December 101 -
The Company has been advised by HRMC that following a review of
its activities, HMRC has assessed the Company's investment
activities is not a supply for consideration and as a result the
Company cannot claim any Input Tax related to its investment
activities. HMRC had assessed that all expenses claimed since
registration in December 2012 are related to investment activities
and that it would be disallowing claimed Input Tax in the amount of
GBP71,129 up to September 2017. The Company has made a further
provision for VAT receivable for the December 2017 quarter in the
amount of 29,957. The Company is in discussions with HMRC, in
consultation with its taxation advisors, towards HMRC reversing
this assessment and is awaiting a further response from HMRC.
12. Share capital
Number Nominal Total
of Value Value
ordinary GBP GBP'000
shares
Issued at 31 December 2015 280,915,896 GBP0.001 281
On 8 January 2016, placing for cash at 0.5p
per share 40,000,000 GBP0.001 40
-------------- --------- ---------
Issued at 31 December 2016 320,915,896 GBP0.001 321
On 18 April 2017, placing for cash at 0.5p
per share 73,500,000 GBP0.001 73
On 25 September 2017, placing for cash at
0.5p per share 792,000,000 GBP0.001 792
On 25 September 2017, debt for shares at
0.5p per share 2,000,000 GBP0.001 2
On 13 October 2017, placing for cash at
0.5p per share 352,000,000 GBP0.001 352
-------------- --------- ---------
Issued at 31 December 2017 1,540,415,896 GBP0.001 1,540
-------------- --------- ---------
"A" Deferred shares
The Company has in existence at 31 December 2016 and at 31
December 2017, 6,915,896 "A" deferred shares of 1.65p. These
deferred shares do not carry voting rights.
Total ordinary and "A" Deferred shares
The issued share capital as at 31 December 2017 is as
follows:
Number Nominal Total
of Value Value
ordinary GBP GBP'000
shares
Ordinary shares 1,540,415,896 GBP0.0010 1,540
"A" Deferred shares 6,915,896 GBP0.0165 114
---------
Issued at 31 December 2017 1,654
---------
The holders of ordinary shares are entitled to one vote per
share at the meetings of the Company and to dividends as declared
in proportion to the amounts paid up on the ordinary shares. No
shares are of the Company are currently redeemable or liable to be
redeemable at the option of the holder or the Company.
The holders of "A" Deferred shares do not have any right to
receive written notice of or attend, speak or vote at any general
meeting of the Company, or to any dividend declared by the Company.
They may however be redeemed by the Company at any time at its
option for one penny for all the "A" Deferred shares without
obtaining sanction of such holders.
12. Share capital (continued)
Share Options
During the year 190 million options were granted (2016:
nil).
Exercise Grant Date Vesting Date Expiry Date Options in
Price Issue
31 December
2017
19 October 19 October 19 October
0.50p 2017 2017 2021 70,000,000
19 October 19 October 19 October
0.75p 2017 2018 2021 60,000,000
19 October 19 April 19 October
1.00p 2017 2019 2021 60,000,000
-------------
190,000,000
-------------
At 31(st) December 2017 there were 190 million share options
outstanding (2016: nil).
13. Share based payments
Details of share options and warrants granted during the year to
Directors over the ordinary shares are as follows:
Lapsed
At 1 Issued / Exercised At 31
January during during December Exercise
2017 the year the year 2017 Price Vesting Expiry
Option Holder No. No. No. No. Pence Date Date
Sachin Oza - 30,000,000 - 30,000,000 0.50p 19/10/2017 19/10/2021
Sachin Oza - 30,000,000 - 30,000,000 0.75p 19/10/2018 19/10/2021
Sachin Oza - 30,000,000 - 30,000,000 1.00p 19/04/2019 19/10/2021
Stephen Williams - 30,000,000 - 30,000,000 0.50p 19/10/2017 19/10/2021
Stephen Williams - 30,000,000 - 30,000,000 0.75p 19/10/2018 19/10/2021
Stephen Williams - 30,000,000 - 30,000,000 1.00p 19/04/2019 19/10/2021
Anthony Samaha - 10,000,000 - 10,000,000 0.50p 19/10/2017 19/10/2021
---------- ------------ ------------- ------------
- 190,000,000 - 190,000,000
----------------------------- ------------ ------------- ------------
The number and weighted average exercise prices of share options
are as follows:
2017 2016
Weighted Weighted
average average
exercise Number exercise Number
price of options price of options
Outstanding at 1 - - - -
January
Granted during the
year 0.74 190,000,000 - -
Forfeited during - - - -
the year
Exercised during - - - -
the year
Outstanding at 31
December 0.74 190,000,000 - -
Exercisable at 31
December 0.74 70,000,000 - -
---------- ------------ ---------- ------------
The options outstanding at 31 December 2017 have a weighted
average contractual life of 3.80 years (2016: Nil).
The closing share price range during the year ended 31 December
2017 was 0.32p to 0.98p.
The options issued during the year were all granted on 19
October 2017 and vest in tranches upon grant, 12 months from grant
and 18 months from grant. Should the option holder leave the Board
prior to the vesting of their options, such options will be
forfeited.
For the options granted, IFRS 2 "Share-Based Payment" is
applicable, and the fair values were calculated using the
Black-Scholes model. The inputs into the model were as follows:
Risk free Share price Expected Share price
rate volatility life at date
of grant
Granted 19 October
2017 0.72% 120% 4 years 0.77p
Expected volatility was determined by calculating the historical
volatility of the Company's share price.
The Company recognised total expenses relating to equity-settled
share-based payment transactions during the year of GBP559,000
(2016: nil).
14. Trade and other payables
2017 2016
GBP'000 GBP'000
Trade and other payables 65 4
Accruals 21 28
86 32
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value. All liabilities
are due within one year.
15. Related party transactions
There were no loans from related party as at 31 December 2016
and 31 December 2017.
During the year ended 31 December 2017, the Company incurred
fees to Santannos Limited, a company associated with Anthony
Samaha, for provision of accounting services in the amount of
GBP3,000 (2016: nil). As at 31 December 2017, an amount of GBP3,000
was included in accounts payable in respect of these fees.
The directors are the key management of the Company (refer to
note 6).
16. Commitments
On 1 November 2017, the Company announced it had entered into a
conditional share subscription agreement to subscribe for 740,741
ordinary shares in the issued share capital of Corallian ("Tranche
B Shares") for an aggregate subscription amount of GBP1.0 million,
with the subscription conditional upon the joint venture partners
in licence P1918 in respect of the Colter appraisal project
approving an authorisation for expenditure for the drilling of the
Colter well prior to 30 April 2018 failing which Reabold's
obligation to subscribe for the Tranche B Shares terminates. As at
30 April 2018, no such authorisation for expenditure for the
drilling of the Colter well had been approved. Subsequently, on 25
May 2018, Reabold advised Corallian that it waived the condition
for the Tranche B Shares and proceeded to complete the Tranche B
subscription on 28 May 2018 in the amount of GBP1.0 million.
On 4 December 2017, the Company announced that it had signed an
agreement with Danube, a newly incorporated subsidiary of ASX
listed ADX Energy Ltd, to invest a total of GBP1.5 million for a
29% interest in Danube. The investment was conditional on
completion of a transaction between Danube and ADX Energy Ltd, by
28 February 2018, which would result in Danube holding a 50%
interest in the Parta licence in Romania, and a 100% interest in a
low-risk appraisal campaign within Parta. The investment comprised
an initial 375,940 new shares to be issued upon completion of the
transaction at GBP1.00 per share This will be followed by a further
1,127,819 new shares to be issued upon submission of an
Authorisation for Expenditure for the first appraisal well at
GBP1.00 per share. On 19 February 2018, the Company agreed to
extend the date for completion of the transaction to 31 March 2018,
with completion taking place on 23 March 2018.
17. Financial risk management
The Company's operations expose it to a limited level of credit,
foreign currency and liquidity risk. There is not any financial
risk arising from the effects of changes in market prices of
commodities based on its current activities.
The Company does not use derivative financial instruments to
manage interest rate costs, and no hedge accounting is thus
applied. Given the size of the Company, the Directors have not
delegated the responsibility of monitoring financial risk
management to a sub-committee of the Board.
Credit risk
The Company's credit risk is primarily attributable to its trade
receivables and cash balances. The credit risk on liquid funds is
limited because the counterparties are banks with high credit
ratings assigned by international credit-rating agencies.
Price risk
Price risk arises from uncertainty about the future prices of
financial instruments held within the Company's portfolio. It
represents the potential loss that the Company might suffer through
holding market positions in the face of market movements. The
investments in equity and fixed interest stocks of unlisted
companies are not traded and as such the prices are more uncertain
than those of more widely traded securities. The Board's strategy
in managing the market price risk inherent in the Company's
portfolio of equity investments is determined by the requirement to
meet the Company's investment objective. The Directors manage these
risks by regular reviews of the portfolio within the context of
current market conditions. Unlisted investments are valued as per
accounting policy in these financial statements.
Liquidity risk
The Company actively maintains a treasury system that maintains
a net credit position and is designed to ensure the Company have
sufficient available funds for operations and planned
expansions.
Maturity of financial liabilities
The following table shows details the Company's remaining
contractual maturity for its non-derivative financial liabilities.
The maturity of the financial liabilities table has been drawn up
based on the undisclosed cash flows based on the earliest date on
which the Company can be required to pay.
2017 2016
GBP'000 GBP'000
Within one year 65 32
Interest rate risk
The Company's exposure to changes in interest rate risk relates
primarily to interest-earning financial assets and interest-bearing
financial liabilities. Interest rate risk is managed by the Company
on an ongoing basis with the primary objective of limiting the
extent to which net interest expense could be affected by an
adverse movement in interest rates.
Foreign currency risk
The Company incurs foreign currency risk on investments that are
denominated in currencies other than Sterling. At present, the
Company does not have any formal policy for hedging against
exchange exposure. The Company may, when necessary, enter into
foreign currency forward contracts to hedge against exposure from
foreign currencies fluctuations. As at both 31 December 2017 and 31
December 2016 the Company has an investment denominated in Canadian
Dollar. Any movement in the Canadian Dollar against Sterling will
create a fair value gain or loss. The Company has assessed the
impact of changes in exchange rates as not being significant to the
Company.
Capital risk management
The Directors consider the Company's capital to comprise of
share capital and reserves stated on the statement of financial
position. The Company manages its capital to ensure the Company
will be able to continue on a going concern on a long term basis
while ensuring the optimal return to shareholders and other
stakeholders through an effective debt and equity balance. No
changes were made in the objectives, policies and processes during
the current or previous year.
The share capital, including share premium, and reserves
totalling GBP5,732,000 (2016: GBP509,000) provides the majority of
the working capital required by the Company. The Management reviews
the capital structure and makes adjustment to it in the light of
changes in economic conditions.
Other financial assets and liabilities
The notional amounts of financial assets and liabilities with a
maturity of less than one year (including trade and other
receivables, cash and cash equivalents and trade and other
payables) are assumed to approximate their fair value.
Categories of financial instruments
2017 2016
GBP'000 GBP'000
Financial assets:
Cash and cash equivalents 5,307 340
Receivables - 1
Available for sale investments 550 200
Total financial assets 541 541
Financial liabilities:
Other financial liabilities 65 32
Total financial liabilities 65 32
18. Post balance sheet events
On 1 March 2018, the Company announced it had signed two
subscription agreements with Corallian. The first agreement was an
unconditional subscription for GBP500,000 of new Corallian shares
completed in February 2018 . The second agreement gave Reabold the
option to subscribe for an additional GBP500,000 of new Corallian
shares at any point up to 6 April 2018, which was completed prior
to the expiry date.
On 19 March 2018, the Company announced the completion of a fund
raising of 1,291,750,000 new ordinary shares at a price of 0.6
pence per share, raising GBP7.75 million (before expenses) to
support the Company's investment policy.
On 14 March 2018, the Company announced the granting of
125,000,000 options of which 45,000,000 million have an exercise
price of 0.60p and vest immediately, 40,000,000 have an exercise
price of 0.90p and vest 12 months from grant; and 40,000,000 have a
exercise price of 1.2p and vest 18 months from grant.
On 28 March 2018, the Company announced the completion of the
first tranche of the investment in Danube, with Reabold receiving
an in initial 375,940 new shares in Danube on payment of the
consideration of GBP375,940.
On 30 May 2018, the Company announced the completion of the
final tranche of its investment in Corallian for GBP1,000,000, as
per the announcement on 1 November 2017. Including the GBP1,500,000
already invested as per the announcements on 1 March 2018 and 1
November 2017, Reabold has invested GBP2,500,000 in Corallian and
owns 32.9% of Corallian's issued share capital.
On 14 June 2018, the Company announced the acquisition of 100%
of the issued share capital of Gaelic for the issue of 420 million
new ordinary shares, representing GBP3,045,000 at the closing price
of 0.725p per share on AIM on 12 June 2018 ("Acquisition"). The
Acquisition is subject to shareholder approvals at the General
Meeting of the Company to be held on 29 June 2018. Gaelic has the
right to earn-in to 50% of multiple near-term, high-impact oil and
gas leases in California, United States by drilling up to five
wells by the end of 2019. Further information in respect to the
Acquisition is outlined in the Chairman's Statement.
19. Ultimate controlling party
In the opinion of the directors there is no controlling
party.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FPMBTMBBTTRP
(END) Dow Jones Newswires
June 29, 2018 02:01 ET (06:01 GMT)
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