TIDMSRO
RNS Number : 2275S
Spitfire Oil Limited
20 December 2016
20th December 2016
PRELIMINARY RESULTS
Financial
Spitfire Oil Limited ("the Company") and its wholly owned
subsidiary, Spitfire Oil Pty Ltd ("Spitfire"), together ("the
Group"), recorded a loss before tax for the year ended 30th June
2016 of A$623,614 (2015 A$596,094), after providing $275,194 (2015:
$288,217) for diminution in value of the Salmon Gums tenements. The
Group benefited from interest receivable of A$125,328 (2015
A$144,291). Operating costs of A$473,748 (2015 A$452,168) were
incurred. A$275,194 (2015 A$288,217) was incurred and capitalised
on licence fees and tenement management.
The auditors have opined that they have been unable to obtain
sufficient evidence to support the directors' assessment that the
recoverable amount of the mineral resources asset is at least equal
to its carrying value. As with any valuation an assessment of the
carrying value / recoverable amount of a mineral deposit yet to be
mined it is highly subjective issue. The directors, supported by
independent advice, remain of the opinion that the recoverable
amount of the Salmon Gums tenements is at least equal to the
carrying value in the financial statements, being the same as that
reported in the financial statements to 30(th) June 2015, upon
which the auditors opinion was not qualified, and in light of
increase in the oil price in 2016 of some $10 per barrel.
Operations
The Salmon Gums Lignite Project remains on hold and the
Retention Licence on which it occurs has been renewed for a further
year until September 2017.
The directors continue to pursue potential joint ventures for
the development of facilities to process the Salmon Gums
lignite.
Although a resource has been defined, and title to the Salmon
Gums mineral tenements has been secured for the foreseeable future,
with active exploration work now suspended and with due
consideration to market prices for fuel products the directors are
of the view that the carrying value of the Salmon Gums mineral
tenements continues to be $4,340,000, in conformity with a review
undertaken by independent consultants for the purposes of this
report.
The Company has continued to keep its running costs to a minimum
while reviewing possible new projects. A number have been
considered during the year but have so far not met
requirements.
Chairman's Statement
To say the Oil & Gas industry continues to suffer would be
an understatement and nowhere more so than in the junior listed
market. The prolonged drop in oil and gas prices has had a profound
effect on the junior exploration and production sector. With the
world turning ever more to renewable energy sources, the implicit
and explicit taxation of carbon by a larger number of governments
and the over supply of oil from the income strapped nations of
OPEC, Iran and fracked oil from the USA, there seems little hope of
a recovery in the foreseeable future. Nevertheless, for the moment,
we continue to retain our Salmon Gums project as a hedge against a
possible rise in the oil price, however unlikely that seems.
The Company has been investigating acquisitions and projects in
the oil and gas sector for some years now, with no success. The
projects have generally been uneconomic or unfinanceable. Now is
the time to be realistic, swallow our pride and focus the Company's
attention to projects in the hard rock mining sector which have a
looming supply side deficit or other compelling economic argument.
Even this task will be difficult. Real projects providing real
returns are extraordinarily difficult to find and even more
difficult to acquire. Your board has extensive expertise in this
area and will endeavour to focus all its efforts in finding a
project worthy of the patience and loyalty the shareholders have
shown over these many years. Hopefully, better news will be
forthcoming in 2017.
Further information
Spitfire Oil Ltd: Telephone: +44 (0)20 7629 7774
Mladen Ninkov - Chairman
Roger Goodwin - Director
Panmure Gordon (UK) Limited: Telephone: +44 (0)20 7886 2500
Dominic Morley
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No.596/2014.
Spitfire Oil Limited's shares are quoted on the Alternative
Investment Market (AIM) of the London Stock Exchange (symbol
SRO).
The Company's news releases are available on the Company's web
site: www.spitfireoil.com
Spitfire Oil Limited
Statement of Profit or Loss and Other Comprehensive
Income
YEARED 30 JUNE 2016 2016 2015
A$ A$
OTHER INCOME 125,328 144,291
EXPITURE
Corporate expenses (346,012) (369,325)
Other expenses (127,736) (82,843)
OPERATING LOSS (348,420) (307,877)
Impairment - exploration and evaluation
costs (275,194) (288,217)
LOSS BEFORE INCOME TAX (623,614) (596,094)
INCOME TAX - -
------------------ -------------------
LOSS AFTER INCOME TAX (623,614) (596,094)
OTHER COMPREHENSIVE INCOME, NET
OF TAX - -
------------------ -------------------
LOSS AND TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ATTRIBUTABLE TO OWNERS
OF SPITFIRE OIL LIMITED (623,614) (596,094)
================== ===================
Basic and diluted loss per share
for loss attributable to the ordinary
equity holders of the Company (cents
per share) (2.4) (2.3)
Spitfire Oil Limited
Consolidated Statement of Financial Position
AS AT 30 JUNE 2016 2016 2015
A$ A$
CURRENT ASSETS
Cash and cash equivalents 3,840,977 4,428,982
Trade and other receivables 798 1,733
Accrued revenues 63,887 94,347
Other current assets 19,533 17,341
TOTAL CURRENT ASSETS 3,925,195 4,542,403
------------ ------------
NON--CURRENT ASSETS
Capitalised exploration and evaluation
costs 4,340,000 4,340,000
Office equipment 164 164
Other non-current assets 45,000 45,000
TOTAL NON--CURRENT ASSETS 4,385,164 4,385,164
------------ ------------
TOTAL ASSETS 8,310,359 8,927,567
------------ ------------
CURRENT LIABILITIES
Trade and other payables 129,284 122,878
TOTAL CURRENT LIABILITIES 129,284 122,878
------------ ------------
TOTAL LIABILITIES 129,284 122,878
------------ ------------
NET ASSETS 8,181,075 8,804,689
============ ============
EQUITY
Issued capital 19,289,284 19,289,284
Reserves - -
Accumulated losses (11,108,209) (10,484,595)
------------ ------------
TOTAL EQUITY ATTRIBUTABLE TO THE
EQUITY HOLDERS OF THE PARENT 8,181,075 8,804,689
============ ============
Spitfire Oil Limited
Consolidated Statement of Changes in Equity
YEARED 30 JUNE 2016 Issued Accumulated
Capital Losses Total
A$ A$ A$
BALANCE AT 30 JUNE 2014 19,289,284 (9,888,501) 9,400,783
---------- ------------ ---------
Loss for the year - (596,094) (596,094)
---------- ------------ ---------
TOTAL COMPREHENSIVE INCOME - (596,094) (596,094)
---------- ------------ ---------
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Transaction with owners - - -
---------- ------------ ---------
BALANCE AT 30 JUNE 2015 19,289,284 (10,484,595) 8,804,689
---------- ------------ ---------
Loss for the year - (623,614) (623,614)
---------- ------------ ---------
TOTAL COMPREHENSIVE INCOME - (623,614) (623,614)
---------- ------------ ---------
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
---------- ------------ ---------
Transaction with owners - - -
---------- ------------ ---------
BALANCE AT 30 JUNE 2016 19,289,284 (11,108,209) 8,181,075
---------- ------------ ---------
Spitfire Oil Limited
Consolidated Statement of Cash Flows
YEAR ENDED 30 JUNE 2016 2016 2015
A$ A$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (463,010) (371,525)
Interest received 155,788 49,944
----------- -----------
NET CASH FLOWS USED IN OPERATING
ACTIVITIES (307,222) (321,581)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation
expenditure (275,194) (288,217)
Payments for equipment - -
----------- -----------
NET CASH FLOWS USED IN INVESTING
ACTIVITIES (275,194) (288,217)
----------- -----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (582,416) (609,798)
Cash and cash equivalents at the
beginning of the financial year 4,428,982 5,049,361
Effects of exchange rate changes
on cash and cash equivalents (5,589) (10,581)
----------- -----------
CASH AND CASH EQUIVALENTS AT THE
END OF THE FINANCIAL YEAR 3,840,977 4,428,982
=========== ===========
Spitfire Oil Limited
Independent Auditor's Report
To the Members of Spitfire Oil Limited
We have audited the financial report of Spitfire Oil Limited
(the "Company"), which comprises the consolidated statement of
financial position as at 30 June 2016, and the consolidated
statement of profit and loss and other comprehensive income,
consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, notes comprising a
summary of significant accounting policies and other explanatory
information to the financial report of the consolidated entity
comprising the Company and the entities it controlled at the year's
end or from time to time during the financial year.
Responsibility of the Directors for the financial report
The Directors of the Company are responsible for the preparation
and fair presentation of the financial report in accordance with
Australian Accounting Standards. This responsibility includes such
internal controls as the Directors determine are necessary to
enable the preparation of the financial report to be free from
material misstatement, whether due to fraud or error. The Directors
also state, in the notes to the financial report, in accordance
with Accounting Standard AASB 101 Presentation of Financial
Statements, the financial statements and notes, comply with
International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial
report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards which require us to comply with
relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial report. The
procedures selected depend on the auditor's judgement, including
the assessment of the risks of material misstatement of the
financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal
control relevant to the Company's preparation and fair presentation
of the financial report in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's
internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the Directors, as well as
evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion.
Independence
In conducting our audit, we have complied with the applicable
independence requirements of the Accounting Professional and
Ethical Standards Board.
Spitfire Oil Limited
Independent Auditor's Report
To the Members of Spitfire Oil Limited (continued)
Basis for Qualification Opinion
A limitation in scope of our audit work exists for the reasons
described below:
Carrying value of exploration and evaluation expenditure:
As set out in Note 11, the consolidated entity has reported
Capitalised Exploration and Evaluation Costs ("mineral resources")
totalling $4.3m in relation to the Salmon Gums Project.
The recoverability of the carrying value of the mineral
resources asset has been estimated based on available inputs and
assumptions. Australian Accounting Standard AASB 136 Impairment of
Assets requires an asset to be carried at no more than its
recoverable amount. We have been unable to obtain sufficient
appropriate audit evidence to support the Directors' assessment of
the recoverable amount of the mineral resources asset is at least
equal to its carrying value. In the event that the carrying value
of the asset exceeds its recoverable amount, it would be necessary
for the carrying value of the asset to be written down to its
recoverable amount.
Auditor's Opinion
In our opinion, except for the effects on the consolidated
financial report of the matter referred to in the qualification
paragraph:
a. the financial report of Spitfire Oil Limited
i presents fairly, in all material respects, the consolidated
entity's financial position as at 30 June 2016 and of its
performance and cash flows for the year then ended; and
ii complies with Australian Accounting Standards; and
the financial report also complies with International Financial
Reporting Standards as disclosed in the notes to the financial
statements.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Spitfire Oil Limited
Notes to the preliminary results to 30(th) June 2016
1. This statement has been prepared using accounting policies
and presentation consistent with those applied in the preparation
of the statutory accounts of the Group.
2. The summary accounts set out above do not constitute
statutory accounts as defined by Section 84 of the Bermuda
Companies Act 1981 or Section 435 of the UK Companies Act 2006. The
summarised consolidated statement of financial position at 30 June
2016 and the summarised consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes
in equity and the summarised consolidated statement of cash flows
for the year then ended have been extracted from the Group's 2016
statutory financial statements upon which the auditors' opinion is
qualified. In the opinion of the auditors they have been unable to
obtain sufficient evidence to support the directors assessment of
the recoverable amount the capitalised exploration and evaluation
costs. The statutory financial statements for the year to 30 June
2016 have been prepared in accordance with the requirements of
International Accounting Standard IAS1: Presentation of Financial
Statements as adopted in Australia. The results for the year ended
30 June 2015 have been extracted from the statutory accounts for
that period, which contain an unqualified auditors' report.
3. The annual report and accounts for 201 are being sent by post
to all registered shareholders. Additional copies of the annual
report and accounts are available from the Company's London
correspondent office, 8(th) Floor, 54 Jermyn Street, London, SW1A
6LX and on the Company's web site www.spitfireoil.com.
4. The calculation of the basic and diluted losses per share is
based on the loss attributable to ordinary shareholders of
A$623,614 divided by the weighted average number of shares in issue
during the year of 25,884,001. There is no dilutive effect of share
purchase options.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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