TIDMSVE
RNS Number : 6728V
Starvest PLC
06 November 2017
6 November 2017
Starvest Plc ("Starvest" or "the Company")
Results for the year ended 30 September 2017
Chairman's Statement
I am pleased to present my annual statement to Shareholders for
the year ended 30 September 2017 and the seventeenth since the
Company was formed in 2000.
Results for the year
The natural resource sector continues to make an encouraging
recovery with the AIM basic resource index companies out-performing
both gold and copper commodities and the FTSE 100 over the year.
Our portfolio value and cash generation through trading profits
reflects this.
Improvements in the sector and a more favourable global economic
outlook have provided confidence to global markets. While the
number of AIM listed mining companies has decreased, a sustained
recovery in the sector is apparent with total market cap up from
GBP3.8bn in June 2016 to GBP5bn year on year and secondary
fundraising proceeds more than doubling in the same period.
Following the improved conditions, we have seen a year on year
positive move in net asset value of approximately 48%. The majority
of our investee companies saw significant share price increases
during the period but have more recently settled to within 10% of
their share price year on year. The biggest gain was made through
our holding in Greatland Gold plc which has risen from 0.17p to
0.595p (3 Oct 2016 - 29 Sept 2017); a company which has seen a
significant agreement with Newmont and strategic project
acquisitions during the past year.
Other companies performing well are Ariana Resources plc which
saw its first gold and silver pour in March of this year, and
continues to develop its near mine and regional exploration
prospects, and KEFI Minerals plc has secured significant funding to
progress towards production at its Tulu Kapi gold project.
Improvement in our portfolio value has been reflected in the
Company's share price over the past 12 months. Recently we have
been experiencing an increased interest in our portfolio positions
and upside potential from the improving market. As such our year on
year rise in market capitalisation is at around 270%.
During this opportune time we continue to evaluate very good
investment opportunities and look to enhance our portfolio. There
still remains, we believe, many undervalued opportunities. It is at
this time we can benefit by employing our sector knowledge and
market experience in sourcing compelling investments.
Investing policy
The Company's investing policy is shown below. At our AGM this
year we will put before shareholders a proposal to add Direct
Investment in mining projects to our Investing Policy which will,
if approved, see the company take ownership of its own mining
projects and utilise these for stock positions in new and existing
investee companies.
Trading portfolio review
A brief review of the major portfolio companies is shown below;
other investee companies are listed with the websites from which
further information may be obtained.
Shareholder information
The Company's shares are traded on AIM. Announcements made to
the London Stock Exchange are available from the Company's website,
www.starvest.co.uk where historic reports and announcements are
also available.
Annual general meeting
We will hold our annual general meeting at 11.00 am on Friday 1
December at the City office of Grant Thornton UK LLP, our Nominated
Adviser, when we look forward to meeting those Shareholders able to
attend.
Callum N Baxter
Chairman & Chief Executive, 6 November 2017
Investing policy statement
About us
The Board, under the leadership of the previous Chairman, Bruce
Rowan, had managed the Company as an investment company since
January 2002. Collectively, the current Board has significant
experience over many years of investing in small company new issues
and pre-IPO opportunities in the natural resources and mineral
exploration sectors.
Following the appointment as Chairman of Callum Baxter, the
Board continues with a similar investment strategy, that is, with a
focus on the natural resources sector.
Company objective
The Company is established as a source of early stage finance to
fledgling businesses, to maximise the capital value of the Company
and to generate benefits for Shareholders in the form of capital
growth and modest dividends.
Investing strategy
Natural resources: Whilst the Company has no exclusive
commitment to the natural resources sector, the Board sees this as
having considerable growth potential in the medium term.
Historically, investments were generally made immediately prior to
an initial public offering, on AIM or ISDX/NEX as well as in the
aftermarket. As the nature of the market has changed since 2008, it
is more likely that the future investment portfolio will include a
spread of companies that generally have moved beyond the IPO stage
but remain in the early stages of identifying a commercial resource
and/or moving towards development with the appropriate finance.
Direct Project: The Company's investing policy is to hold shares
in companies. However, the Company believes there may be
opportunities to acquire shares in companies on favourable terms by
taking a direct interest in mining projects and using these
projects as consideration for shares in such companies; those
companies would therefore become Starvest investee companies. The
projects will be operated by the investee company; Starvest will
not manage any project. Prior to selling any projects to corporate
entities, Starvest may therefore have an interest in a number of
projects. The addition of the Direct Project strategy to the
Company's Investing Policy will be put before shareholders for
approval at the AGM of the Company to be held 1st December
2017.
Investment size: Initial investments are for varying amounts but
usually in the range of up to GBP100,000. These companies are
invariably not generating cash, but rather they have a constant
requirement to raise new equity in order to continue exploration
and development. Therefore, after appropriate due diligence, the
Company may provide further funding support and make later market
purchases, so that the total investment may be greater than
GBP100,000.
High risk: The business is inherently high risk and of a
cyclical nature dependent upon fluctuations in world economic
activity which impacts on the demand for minerals. However, it
offers the investor a spread of investments in an exciting sector,
which the Board believes will continue to offer the potential of
significant returns for the foreseeable future.
Lack of liquidity: The investee companies, being small, almost
invariably lack share market liquidity, even if they are quoted on
AIM, NEX, ASX, or TSX-V. Therefore, in the early years it is rarely
possible to sell an investment at the quoted market price with the
result that extreme patience is required whilst the investee
company develops and ultimately attracts market interest. If and
when an explorer finds a large exploitable resource, it may become
the object of a third party bid, or otherwise become a much larger
entity; either way an opportunity to realise cash is expected to
follow.
Success rate: Of the 25 to 30 investments held at any one time,
it is expected that no more than five will prove to be 'winners';
from half of the remainder we may expect to see modest share price
improvements. Overall, the expectation is that in time Shareholder
returns will be acceptable if not substantial. Accordingly, the
Board is unable to give any estimate of the quantum or timing of
returns.
Profit distribution: When profits have been realised and
adequate cash is available, it is the intention of the Board to
recommend the distribution of up to half the profits realised.
Other matters: The Company currently has investments in the
following companies, which themselves are investment companies:
Equity Investors plc and Equity Resources Limited.
The Company takes no part in the active management of investee
companies, although directors of the Company are, or have been,
non-executive directors on the boards of several such companies.
Callum Baxter, Chairman, is also an Executive Director of one such
company.
Review of trading portfolio
Introduction
During the year to 30 September 2017, the portfolio comprised
interests in the companies commented on below. In addition, several
other active companies were included but not commented on in this
review.
Market sentiment improved during the period and the Company
focussed attention on the changing opportunities which resulted in
the adjustment of several positions. Overall we trimmed marginal
stock holdings to increase our cash reserves which were
supplemented by a modest placing at the prevailing market price.
Net asset value increased 48% year on year while market
capitalisation increased 270%. The largest element of the increase
in value is in gold where there has been much activity of late.
Transactions
During the year the Company raised GBP170,000 through a placing
and subscription. 8,500,000 new ordinary shares of 1.0p each were
issued in the capital of Starvest at a subscription price of 2.0p.
The same number of warrants were issued at an exercise price of
4.0p per warrant within a 24 month exercise period.
The Company exercised warrants held in Greatland Gold, acquiring
50 million shares at 0.2p per share. These replaced 50 million
Greatland Gold shares that Starvest sold in the market, thus
retaining the Company's share holding in Greatland Gold while also
returning a profit.
The Company disposed of all its holdings in Kryptonite 1 plc.
Minor share sales were completed in Alba Mineral Resources plc,
Ariana Resources plc, BMR Group plc, Kefi Minerals plc, Oracle
Coalfields plc, Saltlake Potash plc, Sunrise Resources plc, Block
Energy plc and Marechale plc which raised cash adding to the
Company's working capital.
Trading portfolio valuation
An improved economic climate and increasing investor confidence
has been reflected in share price valuations throughout the year.
Since the lows of early 2016 we have seen a marked improvement in
stock levels and our portfolio valuation. The increase in portfolio
value was approximately 25% since 30 September 2016 and up by more
than 45% over the two years since 30 September 2015.
Against this background we continue to value our portfolio of
investments conservatively at the lower of cost or bid price or
lower directors' valuation, where we believe those facts of which
we are aware cast doubt on the market prices or where the Company's
interest is of such a size as to inhibit selling into a depressed
market. With one exception, we attribute no value to those of our
investments that do not enjoy a market quote. The exception is our
holding in Kuwait Energy plc where we use a value provided by that
company's broker based on actual trades in the company's stock.
The Directors are satisfied that this is the only significant
management estimate made within the financial statements.
This cautious approach has proved to be appropriate; net
provisions made in previous years totalling GBP311,211 were
released during the year (2016: GBP260,967).
A review of the leading portfolio companies follows. As last
year, we are not commenting on the smaller companies, although they
are listed at the end of the review.
Raising new finance, an essential requirement for any mineral
exploration business, has become less difficult over the past year
but has resulted in significant dilution of existing
shareholders.
As the net asset value has increased during the year to 30
September 2017 to GBP1.88m, the Company has achieved a profit of
GBP302,329 as compared with the modest profit of GBP81,113 in the
previous year. In addition, the Company:
-- has no debt other than a convertible loan from a shareholder
and a bank overdraft facility only;
-- continues to believe that it is in a strong position to
benefit from the emerging upturn in markets; and
-- believes that the fundamentals have not changed: the world is
becoming more affluent with an increasing number of people
expecting refrigerators, motor cars, air conditioning, laptop
computers and all other tools of 21st Century living which all
require natural resources in order to both produce and power.
Company statistics
The Company considers the following statistics to be its Key
Performance Indicators (KPIs) and is satisfied with the results
achieved in the year given the uncertain market conditions.
30 September 30 September Change
2017 2016 %
at BID at BID
values values
as adjusted as adjusted
GBP1.52 GBP1.37
* Trading portfolio value m m 11%
GBP1.88 GBP1.32
* Company asset value net of debt m m 48%
* Net asset value per share 3.56 p 3.21 p 11%
* Closing share price 4.62 p 2.25 p 205%
* Share price premium to net asset value 32% -30 % 207%
GBP2.44 GBP0.89
* Market capitalisation m m 274%
Since the year end, values have improved; as at the close of
business on 31 October 2017, the asset value net of debt was
GBP2.67m.
Review of the current market
Improvements in the natural resource sector and a more
favourable global economic outlook have provided confidence to
global markets over the last year. And while demand for raw
materials continues to fluctuate it is likely to increase steadily
over the next 5 years.
The gold price has seen highs of US$1,350 and lows of US$1,125
per oz, still some way off its peak in 2011 but similar to where it
was a year ago at approximately US$1,300 per oz. Other metals such
as copper, lead, nickel and zinc have all seen increases over the
year, while crude oil prices have risen from an average of
US$44/bbl to over US$50/bbl and coal up from an average of US$65/mt
to US$87/mt (World Bank 2017).
We and our investee companies have benefited from this upturn in
the commodities market over the past year with a recovery in the
sector expected and indeed a 'super-cycle' being forecast by some
in the industry.
While the number of AIM listed mining companies has decreased, a
sustained recovery in the sector is apparent with total market cap
up from GBP3.8bn in June 2016 to GBP5bn year on year and secondary
fundraising proceeds more than doubling in the same period.
The previous super-cycle in the early 2000's saw a slow response
to a dramatic increase in demand from the Chinese market, the
current upturn is forecast to stem from a falling Chinese supply
and once again a slow response from global mining companies.
Industry majors have been focused on returning capital and
providing dividends to shareholders rather than putting investment
into exploration and development of new mines; over 60% of the
global top 100 mining assets were commissioned in the last century
(Goldman Sachs 2017 report).
This lack of investment into exploration and development of
world-class mines opens the field to junior explorers and
developers to realise value and generate cash flow through
increasing interest in the sector and from majors in need of
replenishing diminishing reserves. While we are not yet seeing this
in the market, there has been an increase in investor interest in
the sector, with the AIM basic resource index companies
out-performing both gold and copper commodities and the FTSE 100
over the year.
The current market conditions allow for strategic investment in
undervalued, early stage natural resource projects.
Interests in Gold exploration
Our interests in gold exploration have improved during the
period.
Following a gold price of below US$1,100 per ounce in late 2015,
we have seen an increase to current levels of around US$1,300.
Amongst the Starvest investments, there are six with interests
in gold. Of these, we comment on four:
Ariana Resources plc (www.arianaresources.com)
Ariana Resources plc (Ariana) is a United Kingdom-based company
engaged in the exploration development and mining of epithermal
gold-silver and porphyry copper-gold deposits in Turkey.
Ariana's Kiziltepe mine (Red Rabbit JV) delivered its first
gold-silver pour in March 2017 and continued commissioning and
production ramp-up between March and June. During the commissioning
phase to end June a total of 1,929oz gold and 14,519oz silver were
reported generating a maiden revenue for the JV company. Commercial
production was declared in July with the mine operational for two
complete quarters and running in line with management
forecasts.
The company is focusing exploration efforts on a number of areas
in Turkey. As well as extending the area currently under
development at Kiziltepe (near mine exploration) they are also
looking at potential satellite open-pittable prospects slightly
further afield but still within range to utilise the mine
infrastructure.
The Tavsan project which is part of the Red Rabbit JV was
expanded during the last year with several mineralised zones and
high-grade drill intercepts reported adding considerable scope to
increasing resources at the project. Current resources stand at
204,000oz gold indicated and inferred. The company are targeting
300,000oz gold with over 60% of this open-pittable and will be
undertaking feasibility-related work to advance the project toward
production.
The Karakavak prospect also returned encouraging results with
initial drill testing on just 180m of a 2.15km strike length of
outcropping gold-bearing veins retuning up to 4m at 1.72g/t gold
within 10m of surface; showing potential in the area for several
shallow open-pittable resources as satellites to the Kiziltepe mine
operations.
Work is continuing on exploration and advancement of the 100%
owned Salinbas project. A recent scoping study reported a JORC
compliant resource of 1.09M oz gold averaging 2.0g/t Au and 10.2g/t
Ag. A mine life of 10 years is estimated with a 50,000 oz Au
equivalent per annum and a IRR of 28% with 3.3 years payback
period.
The company is well funded for the next year to 18 months after
a placement of approximately GBP2m during the year.
Kefi Minerals plc (www.kefi-minerals.com)
Kefi Minerals is an exploration and development company focused
on gold and copper deposits in the Arabian-Nubian Shield. Its main
projects are Tulu Kapi in Ethiopia and the Jibal Qutman project in
Saudi Arabia.
Kefi and the Government of Ethiopia have established a new
company to hold the Tulu Kapi mine project, Tulu Kapi Gold Mines
Share Company ltd (TKGM). This sees Kefi maintaining a 75-80% stake
in the project, based on capital spending and contributions, with
four of the six board members from Kefi. Kefi retains 100%
ownership of licence areas outside the mine project area. TKGM have
been engaged in mine construction preparations, with licence
applications from local and regional authorities for power, waste
and road works submitted as well as resolving resettlement
infrastructure and compensation plans.
Construction of the 1M oz gold resource open pit at Tulu Kapi
has been pushed back to late 2019. In July 2017 the company signed
a mandate and heads of terms for US$135m of project funding with
Oryx Management Ltd to finance and operate all the onsite
infrastructure at the Tulu Kapi project. The finance deal proposes
a 9-year tenor for repayment from drawdown, including a 30 month
grace period during construction and ramp-up.
In Saudi Arabia work is on-going on the open-pit heap leach gold
operation. Kefi's JV partner Gold and Minerals Ltd have submitted
mining licence applications to the Saudi Government and a staged
development plan has been established on a low capex start-up which
will be expanded in modular stages as additional mineralisation is
delineated.
The Company has made substantial progress towards mine
development during the year and should continue to do so over the
coming 12 months.
Greatland Gold plc (www.greatlandgold.com)
The AIM listed exploration company expanded its portfolio of
projects during the last year to six with the acquisition of the
Paterson gold project and Panorama cobalt and gold project both in
the Pilbara region of Western Australia. The company also increased
its land holdings of the Ernest Giles project to over 2,000 square
kilometres in the under-explored large greenstone belt.
In May 2017, Greatland Gold announced it had reached an
agreement with Newmont Exploration, a subsidiary of Newmont Mining
Corporation (NYSE:NEM), to grant access to the tenements and
exploration database for the Ernest Giles project for 6 months.
Newmont will be using industry leading proprietary exploration
techniques over the project area to further evaluate the project's
potential to be a multi-million-ounce gold province.
During the year the company has also continued to develop this
and its other projects.
Drilling at its Tasmanian Warrentinna project encountered gold
mineralisation in all holes highlighting the potential to extend
the zone of mineralisation to the north and east at the Derby North
prospect. Bromus drilling intersected silver, zinc and other
elements consistent with Volcanogenic Massive Sulphide ("VMS")
style systems, with a strike of 1.5 kilometres through the
area.
Historical data for the Havieron prospect of the Paterson
Project reports grades of up to 15.45g/t Au and 2.5% Cu. Regional
geophysics highlighted a new potential iron-oxide-copper-gold
district with multiple regional targets similar to the Havieron
prospect, prompting the company to acquire a further tenement to
the north. This is a welcome addition to the Greatland pipeline of
projects and sits in an area attracting increasing interest from
major mining companies such as Rio Tinto. On ground exploration
activities are scheduled to commence in Q4 2017.
Regional investigations of historic data highlighted a large
area anomalous in cobalt at its Panorama project in the Pilbara
region of Western Australia. Given the projected increase in demand
for this commodity, Greatland Gold staked the area and early stage
exploration activities are underway over the licences. Greatland
has recently confirmed the project is prospective for conglomerate
hosted gold deposits which are attracting much interest.
The company is well funded for the next year to 18 months with
many warrants exercised on the back of an increasing share price
and the potential of the Ernest Giles project area in particular.
We look forward to continued positive news about exploration
developments from the company over the next year.
Cora Gold Limited (www.coragold.com)
Post 30 September 2017 Starvest acquired a stake in AIM listed
Cora Gold Limited. Cora are a gold exploration company focussed on
advanced projects in the Yanfolila and Kenieba areas of Mali and
Senegal in West Africa. The projects are in a highly prospective
region with several relatively recent discoveries including Sadiola
(14Moz), Loulou (12Moz), Fekola (4.5Moz), Sabodala (4.4Moz), and
Kobada (2.4Moz). The region has attracted much interest from
several larger global gold miners.
Cora's projects cover more than 1,000 square kilometres with
many licences displaying multiple highly prospective drill ready
gold targets and a number of early grades over 40g/t gold.
Initial work includes drilling at Cora's Sanankoro gold
discovery in Mali to establish a mineral resource estimate over a
section of the 14km long mineralised zone. Additional exploration
activities include drilling across other licences, located adjacent
to existing gold mines, which have the potential to host
significant new gold discoveries.
Cora has a highly experienced and successful management team
with proven track records in multi-million ounce gold discoveries
in Africa, many of which have been developed into profitable mines.
With GBP3.45m raised at their admission to AIM, Cora Gold are well
funded for the next year to 18 months and have already engaged
drilling contractors to begin work. We look forward to following
their progress.
Interests in energy
We have three companies in the energy sector on which we comment
as follows:
Alba Mineral Resources plc (www.albamineralresources.com)
An explorer focused on oil and gas, graphite, uranium and base
metals with holdings in Greenland (graphite and heavy minerals),
Mauritania (uranium), UK (oil and gas) and Ireland (base
metals).
The Company's UK oil and gas focus is on Horse Hill-1 project
where Alba hold a stake in the HHDL consortium developing the
project, effectively giving them 9.75% stake in the project. During
2017 the licences were extended to 2021 and a planning application
for long term production testing and additional appraisal drilling
was to be determined during Sept 2017. As of 30 September 2017 no
determination had been made public. Alba also holds a 5% interest
in the Brockham oil and gas project just 5 miles from Horse Hill-1.
Operators, Angus Energy, intend to bring well BR-X4Z into
production as soon as Oil and Gas Authority approval is in place
and Field Development Plans have been submitted for production at
the PL235 site.
Their graphite project encompasses a former graphite mine with
additional exploration ground in Greenland. Alba increased its
holding to 90% in the Amitsoq project earlier this year.
Exploration work during the period has identified a total strike
length of 12km with potential for graphite. Metallurgical tests,
aimed at reopening the mine, reported a head grade of +25% graphite
and simple processing achieved +99% recovery of graphite from
gangue material, with the bulk of the flake graphite being
recovered in the medium range, essential for suppling the
lithium-ion battery market. The company also acquired heavy mineral
licence areas in Greenland during the year with a focus on
ilmenite. The projects are in early stage exploration with limited
windows for ground work given their northern location but the
company plans to advance the projects at the earliest opportunity
and has already carried out preliminary ground work.
Alba continued work on the Ireland base metal project with a
microgravity study and portable XRF programme on soil samples being
carried out. Results returned a Cu-Ag-As anomaly which the company
plans to follow up. Alba has reviewed data on the Mauritania
uranium project and relinquished ground outside the identified
uranium anomalies.
With a strong management team, the continued development of its
UK oil and gas assets and the addition of new licences we look
forward to continued positive news from Alba over the next few
years.
Kuwait Energy plc (www.kuwaitenergy.co)
Kuwait Energy are an independent oil and gas company involved in
exploration appraisal, development and production of hydrocarbons.
It was established in 2005 and maintains a diverse portfolio of
projects in Iraq, Egypt, Yemen and Oman. Of the ten exploration,
development and production assets they hold, Kuwait Energy directly
operates seven.
Operationally the Company is increasing production rapidly and
are developing reserves in excess of 800M barrels oil (equivalent),
up approximately 10% year-on-year and anticipates a first gas flow
from its Siba project (Iraq) in Q1 2018 where its gas plant
engineering, procurement and constructions works are ongoing and
near completion.
In Iraq the company has continued with oil production from
Block-9 wells Faihaa-1 and 2. Faihaa- 3 well was spudded in August
2016 and commenced production in February 2017 with 5,200 barrels
of oil per day (bopd). This increase in production in their Block-9
licences brings Kuwait Energy's total working interest to
approximately 10,000 bopd, where it holds a 60% interest and is
operator. Well 4 was spudded in April 2017 and as of June was at
60% of target depth.
The Company received a second Iraqi cargo payment of 350,000
barrels of Basra Light Crude Oil. The payment covers Block 9
production for 2H 2016 with a value of approximately US$17m. In
light of the 2H payment the company received a second drawdown of
US$20m from its Vitol Forward Sales Agreement (established in 2016
for a total of US$100m).
Funds will be used primarily to develop the Block-9 concessions
Faihaa wells 4 and 5, as well as continuing with the exploration
and development of wells at the Abu Sennan concessions in
Egypt.
During the year Kuwait Energy announced its intension to become
a public company via listing on the London Stock Exchange but did
not meet its target date of June 2017. However, Kuwait Energy have
stated that in light of positive feedback from potential investors
the Company remains committed to a London listing and continues to
explore its options. The Company is increasing production and
expanding its operations and is in a strong financial position. We
look forward to further positive news in the coming year.
Oracle Power plc (www.oraclepower.co.uk)
Oracle Power, previously Oracle Coalfields plc, continued to
develop its 529M tonne JORC compliant resource of lignite coal in
SE Pakistan. The company remains focused on development of the mine
for first production by end 2018 with the intension of supplying a
new 660MW mine-mouth power plant.
Work over the last 12 months has seen formal agreement for
allocation of water access with the Sindh government to it's almost
complete reservoir and pipeline. The Central Power Purchasing
Agency of Pakistan has issued a 'Letter of No Objection' for the
660MW power plant and the National Grid has confirmed that power
from the project will be accommodated in planned high voltage
transmission lines.
A loan agreement for GBP1m was agreed with Brandon Hill Capital
Ltd, allowing Oracle to move forward with negotiations for full
funding of the project without equity dilution and a recently
announced MOU has been agreed in principle with two Chinese
State-owned Enterprises for the full development and funding of the
Thar project.
As indicated by its change of name during the year, the Company
is also looking at diversification opportunities in the power
sector overall.
We expect the Company to continue its path towards mining and
power generation during the year and look forward to possible new
opportunities being brought on board.
Interests in Base Metals and Agricultural Products
BMR Group plc (www.bmrplc.com)
BMR's principal project is the historic Kabwe lead/zinc mine in
Zambia. The mine closed in the 1990's and BMR intends to process
tailings through an acid/brine leach.
The company expects the plant to be commissioned by the end of
2017, after minor delays in some supplies. Once in full production
it is expected the plant will produce 3,100 tonnes of zinc
(equivalent to 15,000 tonnes zinc sulphate heptahydrate) and 2,300
tonnes lead sponge per annum. The company hopes to be able to
recover vanadium from the tailing as a by-product with 250-300
tonnes per annum anticipated.
The operating costs are currently estimated at US$120/tonne of
tailing processed. There is a 5% royalty payment and 30%
corporation tax levied. Given the offtake agreement BMR hold with
African Compass International, profits are calculated to be at
least US$750,000 per month at current prices once in production.
Once fully operational the Company plans two further stages of
development. The first in late 2018 and again in 2020 both to
increase the plant feed tonnage.
Exploration of the Kashitu area has been ongoing with a view to
the potential exploitation of near surface ore which could be
processed at the Kabwe facilities. Three distinct surface
mineralised zones were delineated through auger soil sampling with
zinc associated in upper alluvial material and anomalous silver, up
to 16.8g/t, also reported in 10% of the holes.
BMR is continuing discussions with the Zambia Environmental
Management Agency regarding its Waelz Kiln Slag with the intention
of suppling the material for local road construction as well as
planning a JORC compliant survey for recovery of zinc and vanadium
from its Imperial Smelting Furnace Slag.
Away from Africa, BMR has an 80% interest in a tin-tungsten
project in Portugal with gold and silver reported in historic
workings. Field work highlighted five high-priority areas with
vein-style tungsten mineralisation plus possible gold, silver and
lithium credits. Future work includes detailed sampling of large
mine dumps to establish in-situ grades and detailed mineralogical
examination of rock samples as well as a structural survey of the
licence to aid future field exploration work.
Once plant commissioning is complete for the Zambia project BMR
Group should make strong headway towards increasing production in
the next 12 to 18 months.
Salt Lake Potash Limited (www.saltlakepotash.com.au)
Salt Lake Potash has concentrated on its Goldfields Salt Lake
Project, in Western Australia, over the past year. The company aims
to construct a pilot plant, the first salt-lake brine Sulphate of
Potash (SOP) production operation in Australia.
A scoping study on the Lake Wells prospect was completed which
confirmed the potential of a low-cost SOP by solar evaporation of
lake brines for domestic and international fertiliser markets. The
study outlined a two-stage development plan and an all-in capital
cost of A$268m for 400,000tpa production.
The company has now completed a surface aquifer exploration
programme and a deeper paleochannel aquifer drill programme. The
company has commenced construction of a number of test evaporation
ponds of differing design with the aim of developing a model for a
cost-effective on-lake evaporation pond. Process development test
work is also on-going and the company has commenced work on a
pre-feasibility study for Lake Wells and continues to explore the
potential of other brine lakes in the area.
Salt Lake potash has made significant progress towards mine
development over the past year and we expect this to continue over
the next 12 months.
Sunrise Resources plc (www.sunriseresourcesplc.com)
Sunrise Resources holds ground in Nevada (USA), Ireland and
Australia with commodities ranging from gold, silver and diamonds
through to copper, barite and diatomite. Sunrise Resources'
objectives are to generate cash flow from more advanced projects
and to add value through mineral discovery by drill testing more
speculative exploration targets.
The company is currently focusing on the development of its CS
Pozzolan-Perlite project in Nevada USA. Internal concept studies
were undertaken which envisage surface mining and a simple
production process and low capex and opex costs. Drilling in recent
months has confirmed commercial quality perlite and pozzolan
present in thick intervals and extensions of the main zone towards
a northeast zone. Meetings with domestic customers in the USA were
held and cooperative test programmes are in the planning stages.
The company is moving towards a feasibility study and starting the
mine permitting process.
The board are committed to concentrate both management time and
expenditure on the CS project and advance it towards production as
soon as possible. As a result they are looking to unlock value from
their other projects through JVs or other sale arrangements. Any
funds released will be used to progress the CS project towards
production.
The company's Junction Gold project in Nevada was recently sold
to VR Resources, a TSX-V listed company for a modest cash payment
and shares in VR Resources, with additional shares allocated should
drilling and compliant resource reports be undertaken as well as a
net smelter deal in place.
We look forward to continuing news on the development of their
CS project as well as strategic fund generation from their non-core
projects in the coming year.
Other investments
The remaining non-core investments are available for sale when
the conditions are deemed to be right. These include: Marechale
Capital plc (www.marechalecapital.com), and Regency Mines plc
(www.regency-mines.com). In addition, there are a number of failed
or almost failed ventures to which we attribute no value, although
we always hope and seek to crystallise value where possible.
Strategic report
Principal activities and business review
Since Bruce Rowan was appointed Chief Executive on 31 January
2002, the Company's principal trading activity was the use of his
expertise to identify and, where appropriate, support small company
new issues, pre-IPO and on-going fundraising opportunities with a
view to realising profit from disposals as the businesses mature in
the medium term. The directors expect this to continue in the
future under the leadership of Callum Baxter, appointed Chief
Executive in September 2015.
The Company's investing policy is stated above. The Company's
key performance indicators and developments during the year are
given in the Chairman's statement and in the trading portfolio
review, all of which form part of the Directors' report.
Finance Review
Over the past 12 months the Company recorded a profit of
GBP302,329, equating to a profit of 0.64 pence per share with net
cash inflow for the year of GBP422,926. This compares to a profit
of GBP81,113 in the previous year that equated to a profit of 0.21
pence per share. The Company's cash deposits stood at GBP432,782 at
the period end.
Starvest plc successfully raised GBP162,500 of new equity (net
of costs) during the year. These funds will be used to take
advantage of the exciting opportunities that we believe exist in
the market at this time, whilst maintaining a disciplined approach
towards capital allocation.
Key risks and uncertainties
This business carries with it a high level of risk and
uncertainty, although the rewards can be outstanding. The risk
arises from the very nature of early stage mineral exploration
where there can be no certainty of outcome. In addition, often
there is a lack of liquidity in the Company's trading portfolio,
most of which is, or in the case of pre-IPO commitments is expected
to be, quoted on AIM or NEX, formerly ISDX, such that the Company
may have difficulty in realising the full value in a forced sale.
Accordingly, a commitment is only made after thorough research into
both the management and the business of the target, both of which
are closely monitored thereafter. Furthermore, the Company limits
the amount of each commitment, both as to the absolute amount and
percentage of the target company.
INCOME STATEMENT
FOR THE YEARED 30 SEPTEMBER 2017
Year ended
Year ended 30 30 September
September 2017 2016
GBP GBP
Revenue 526,595 117,920
Cost of sales (266,466) (72,670)
--------------- -------------
Gross profit 260,129 45,250
Administrative expenses (274,506) (231,499)
Amounts written off against
trade investments (277,277) (382,594)
Amounts written back
against trade investments 588,398 643,561
--------------- -------------
Operating profit 296,744 74,718
Interest receivable 5,585 6,395
Profit on ordinary activities
before tax 302,329 81,113
Tax on profit on ordinary - -
activities
Profit for the financial
year attributable to
Equity holders of the
Company 302,329 81,113
=============== =============
Earnings per ordinary
share
Basic 0.64 pence 0.21 pence
Diluted 0.54 pence 0.21 pence
There are no other recognised gains and losses in either year
other than the result for the year. All operations are
continuing.
STATEMENT OF FINANCIAL POSITION
30 SEPTEMBER 2017
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
Current assets
Trade and other receivables 29,589 71,667
Trade investments 1,519,983 1,372,616
Cash and cash equivalents 432,782 9,856
------------- -------------
Total current assets 1,982,354 1,454,139
------------- -------------
Current liabilities
Trade and other payables (101,613) (132,227)
Total current liabilities (101,613) (132,227)
------------- -------------
Net current assets 1,880,741 1,321,912
============= =============
Capital and reserves
Called up share capital 528,982 396,185
Share premium account 1,640,876 1,514,673
Profit and loss account (291,617) (593,946)
Equity reserve 2,500 5,000
------------- -------------
Total equity shareholders'
funds 1,880,741 1,321,912
============= =============
These financial statements were approved and authorised for
issue by the Board of Directors on 6 November 2017.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2017
Equity reserve Total Equity
attributable to
Share capital Share premium Profit and loss account shareholders
GBP GBP GBP GBP GBP
At 1 October 2015 394,173 2,118,396 5,000 (1,326,270) 1,191,299
============= ============= ============== ======================= ======================
Profit for the period - - - 81,113 81,113
Total recognised income
and expenses for the
period - - - 81,113 81,113
------------- ------------- -------------- ----------------------- ----------------------
Shares issued 25,012 24,488 - - 49,500
Cancellation of
treasury shares (23,000) (628,211) - 651,211 -
------------- ------------- -------------- ----------------------- ----------------------
Total contributions by
and distributions to
owners 2,012 (603,723) - 651,211 49,500
At 30 September 2016 396,185 1,514,673 5,000 (593,946) 1,321,912
------------- ------------- -------------- ----------------------- ----------------------
Profit for the period - - - 302,329 302,329
Total recognised income
and expenses for the
period - - - 302,329 302,329
------------- ------------- -------------- ----------------------- ----------------------
Shares issued 132,797 133,703 - - 266,500
Cost of issue - (7,500) - - (7,500)
Equity component of
convertible loan - - (2,500) - (2,500)
------------- ------------- -------------- ----------------------- ----------------------
Total contributions by
and distributions to
owners 132,797 126,203 (2,500) - 256,500
At 30 September 2017 528,982 1,640,876 2,500 (291,617) 1,880,741
------------- ------------- -------------- ----------------------- ----------------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 SEPTEMBER 2017
1. Company Information
Starvest plc is a Public Limited Company incorporated in England
& Wales. The registered office is 55 Gower Street, London, WC1E
6HQ. The Company's shares are listed on the AIM market of the
London Stock Exchange. These Financial Statements (the "Financial
Statements") have been prepared and approved by the Directors on 6
November 2017 and signed on their behalf by Callum Baxter and Gemma
Cryan.
2. Basis of Preparation
These financial statements have been prepared in accordance with
applicable United Kingdom accounting standards, including Financial
Reporting Standard 102 - 'The Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland'
('FRS102'), and with the Companies Act 2006. The financial
statements have been prepared on the historical cost basis. There
are no fair value adjustments other than to the carrying value of
the Company's trade investments.
Going concern
The Company's day to day financing is via a bank overdraft and,
on occasion, by the use of short term loans. The Company's formal
overdraft facility was last confirmed by the bank in early
2017.
Whilst the Directors fully expect a sufficient overdraft
facility to remain in place for the foreseeable future, they are
confident that sufficient funding can be raised as required to meet
the Company's current and future liabilities, which has been
confirmed within the cash flow forecast prepared by the Board for
the 12 months ending 30 November 2018. In the very unlikely event
that such finance could not be raised, the Directors could raise
sufficient funds by disposal of certain of its current asset trade
investments, although such a 'forced' sale is to be avoided if at
all possible.
For the reasons outlined above, the Directors are satisfied that
the Company will be able to meet its current and future
liabilities, and continue trading, for the foreseeable future and,
in any event, for a period of not less than twelve months from the
date of approving the financial statements. The preparation of the
financial statements on a going concern basis is therefore
considered to remain appropriate.
3. Principal Accounting Policies
Revenue
Revenue represents amounts receivable for trade investment
sales. Revenue is recognised on the date of sale contract.
Cost of sales
Direct costs include the book cost of investments sold during
the year.
Administrative expenses
All administrative expenses are stated inclusive of VAT, where
applicable, as the company is not eligible to reclaim VAT incurred
on its costs.
Taxation
Corporation tax payable is provided on taxable profits at the
current rates enacted or substantially enacted at the balance sheet
date.
Deferred tax
Deferred tax is provided on an undiscounted full provision basis
on all timing differences which have arisen but not reversed at the
balance sheet date using rates of tax enacted or substantively
enacted at the balance sheet date.
Deferred tax assets are only recognised to the extent that it is
probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits, and are
recognised within debtors. The deferred tax assets and liabilities
all relate to the same legal entity and being due to or from the
same tax authority are offset on the balance sheet.
Trade Investments
Current asset trade investments are stated at the lower of cost
and net realisable value, excluding Kuwait Energy plc which has
been valued based on the value advised by the brokers to Kuwait
Energy plc. Net realisable value is the lower of bid price and
Directors' valuation. The lower Directors' valuation is applied
where the Company's interest in the investee company amounts to
typically 3% or more of the investee Company's issued share capital
or more than 7% of the investment portfolio or where there are
factors of which the Directors are aware which call for some
further adjustment. At 30 September 2017, these provisions totalled
GBP143,000 (2016: GBP131,000).
Investments in unlisted company shares, are remeasured to
available market values, or directors' valuations at each balance
sheet date. Gains and losses on remeasurement are recognised in the
income statement for the period.
Investments in listed company shares, are remeasured to market
value at each balance sheet date. Gains and losses on remeasurement
are recognised in the income statement for the period.
Financial instruments:
Trade and other receivables
Trade and other receivables are not interest bearing and are
recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method less provision
for impairment.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held
at call with banks.
Trade and other payables
Trade and other payables are not interest bearing and are
recognised initially at fair value and subsequently measured at
amortised cost.
Convertible debt
The proceeds received on issue of the convertible debt are
allocated into their liability and equity components and presented
separately in the balance sheet. The amount initially attributed to
the debt component equals the discounted cash flows using a market
rate of interest that would be payable on a similar debt instrument
that did not include an option to convert.
The difference between the net proceeds of the convertible debt
and the amount allocated to the debt component is credited direct
to equity and is not subsequently re-measured. On conversion, the
debt and equity elements are credited to share capital and share
premium as appropriate.
Financial liabilities
All financial liabilities are recognised initially at fair value
and are subsequently measured at amortised cost. There are no
financial liabilities classified as being at fair value through the
income statement.
Share capital
The Company's ordinary shares are classified as equity.
Treasury shares
Where the Company acquired its own shares ('treasury shares')
these are deducted from retained profits. No profit or loss is
recognised on purchase or subsequent sale of treasury shares. On
cancellation of treasury shares, the original purchase costs are
deducted from share capital and profit and loss account by a
reserve transfer within equity.
The share premium account
Represents premiums received on the initial issuing of the share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income
tax benefits.
4. Turnover and Segmental Analysis
Turnover
Turnover represents the sales of trade investments on recognised
listed stock exchanges. Turnover for the year to 30 September 2017
was GBP526,595 (2016: GBP117,920).
Segmental information
An operating segment is a distinguishable component of the
Company that engages in business activities from which it may earn
revenues and incur expenses, whose operating results are regularly
reviewed by the Company's chief operating decision maker to make
decisions about the allocation of resources and assessment of
performance and about which discrete financial information is
available.
The Company is to continue to operate as a single UK based
segment with a single primary activity to invest in businesses so
as to generate a return for the shareholders. No segmental analysis
has been disclosed as the Company has no other operating segments.
The Directors will review the segmental analysis on a regular
basis, and update accordingly.
The Company has not generated any revenues from external
customers during the period.
5. Operating Profit
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
This is stated after charging:
Auditor's remuneration
- audit services 14,400 15,600
Director's emoluments -
note 7 128,500 135,000
============= =============
6. Interest receivable
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
----------------------------- ------------- --------------------
Bank interest receivable 85 242
Interest on short term loans
to related parties 5,500 6,153
5,585 6,395
----------------------------- ------------- --------------------
7. Directors' Emoluments
There were no employees during the period apart from the
directors. No directors had benefits accruing under money purchase
pension schemes.
Amounts
paid Shares
to issued
third in lieu
parties of fees
- see - see
Year ended 30 September Fees note note Total
2017 GBP GBP GBP GBP
------------------------ ------ --------- -------- -------
C Baxter 3,000 57,000 20,000 80,000
J Watkins 9,000 14,000 9,000 32,000
G Cryan 7,000 6,500 3,000 16,500
------------------------ ------ --------- -------- -------
19,000 77,500 32,000 128,500
------------------------ ------ --------- -------- -------
Amounts
paid Shares
to issued
third in lieu
parties of fees
- see - see
Year ended 30 September Fees note note Total
2016 GBP GBP GBP GBP
------------------------ ------ --------- -------- -------
C Baxter - 40,000 40,000 80,000
A C R Scutt 8,000 - 8,000 16,000
J Watkins 18,000 - 18,000 36,000
G Cryan - 3,000 - 3,000
------------------------ ------ --------- -------- -------
26,000 43,000 66,000 135,000
------------------------ ------ --------- -------- -------
Amounts paid to third parties and shares issued in lieu of
fees
Included in the above are the following amounts paid to third
parties:
-- In respect of the management services of Callum Baxter,
GBP77,000 (2016: GBP80,000) is payable to Baxter Geological, a
company of which he is a director and shareholder. Of this amount,
GBP20,000 was settled in shares in the Company. At 30 September
2017, GBP19,000 (2016: GBP10,000) was outstanding.
-- In respect of the professional services of John Watkins, FCA,
GBP23,000 (2016: GBP18,000) of the above remuneration was payable
through his personal business of which GBP9,000 was settled by way
of shares in the Company. At 30 September 2017, GBP2,500 (2016:
GBP4,500) was outstanding.
-- In respect of the professional services of Gemma Cryan,
GBP9,500 (2016: GBP3,000) was payable to her personal business. At
30 September 2017 GBP2,500 (2016: GBPnil) remained outstanding.
8. Income Taxes
a) Analysis of charge in the period
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
United Kingdom corporation
tax at 19/20% (2016: 20.00%) - -
Deferred taxation - -
- -
============== ==============
b) Factors affecting tax charge for the period
The tax assessed on the loss on ordinary activities for the year
differs from the standard rate of corporation tax in the UK of
19/20% (2016: 20.00%). The differences are explained below:
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
Profit on ordinary activities
before tax 302,329 81,113
============= =============
Profit multiplied by standard
rate of tax 59,710 16,223
Effects of:
Utilised against carried forward
losses (59,710) (16,223)
Losses carried forward not recognised
as deferred tax assets - -
- -
============= =============
9. Earnings Per Share
The basic earnings per share is derived by dividing the profit
for the year attributable to ordinary shareholders by the weighted
average number of shares in issue.
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
------------------------------------ ------------- -------------
Profit for the year 302,329 81,113
------------------------------------ ------------- -------------
Weighted average number of Ordinary
shares of GBP0.01 in issue 47,287,952 38,876,323
Earnings per share - basic 0.64 pence 0.21 pence
------------------------------------ ------------- -------------
Warrants in issue 8,500,000 -
Weighted average number of Diluted
Ordinary shares of GBP0.01 in
issue 55,787,952 38,876,323
Earnings per share - diluted 0.54 pence 0.21 pence
------------------------------------ ------------- -------------
10. Trade and Other Receivables
Year ended Year ended
30 September 30 September
2017 2016
GBP GBP
------------------------------------ ------------- --------------------
Prepayments 29,589 28,014
Short term loans to related parties - 43,653
29,589 71,667
------------------------------------ ------------- --------------------
Short term loans to related parties
-- At 30 September 2017 loans to Equity Resources ltd ("EQR")
totalling GBP20,000 remain unpaid. The purpose of the loans was to
assist EQR meet its necessary operational costs during a period
when it seemed inappropriate that EQR should realise cash from its
investments. The advances were approved at 0% interest with no
formal agreement as to repayment date. The Company holds 28.41% of
the equity in EQR. However, the Company has made a full provision
for these loans, totalling GBP20,000.
-- At 30 September 2017, loans totalling GBP27,500 advanced to
Block Energy plc ("BEP") (formerly Goldcrest Resources plc
("GCRP")) at 20% pa interest in order to assist BEP in funding its
necessary operational costs prior to an expected AIM listing remain
unpaid. Interest totalling GBP11,653 has been accrued on these
loans at the year end. However, the Company has made a full
provision for these loans, totalling GBP39,153.
-- In 2014 a loan of GBP20,000 was advanced to Kryptonite 1 plc,
formerly Guild Acquisitions plc ("Guild") at 12% pa interest to
assist Guild in funding its necessary operational costs. In June
2016, Guild issued 25,000,000 new Ordinary shares in part
settlement of the loan; the remaining balance of GBP10,000 was
repaid in March 2017. In September 2016, the company was renamed
'Kryptonite 1 plc' to reflect its change of business to investing
in blockchain technology.
11. Current Trade Investments
30 September 30 September
2017 2016
GBP GBP
----------------------------------- ------------ ------------
Cost
At 30 September 2016 5,686,328 5,607,775
Additions at cost 100,000 150,390
Disposals (263,754) (71,837)
At 30 September 2017 5,522,574 5,686,328
----------------------------------- ------------ ------------
Market value movement & provisions
At 30 September 2016 4,313,712 4,574,679
Released during the year (588,398) (643,561)
Provided during the year 277,277 382,594
At 30 September 2017 4,002,591 4,313,712
----------------------------------- ------------ ------------
Fair value amount
At 30 September 2017 & 2016 1,519,983 1,372,616
----------------------------------- ------------ ------------
The fair value carrying values
of the investments above were
as follows:
Quoted on AIM 1,370,565 1,257,985
Quoted on NEX 10,692 44,424
Quoted on foreign stock exchanges 1,782 1,735
Unquoted at Directors' valuation 136,944 68,472
1,519,983 1,372,616
----------------------------------- ------------ ------------
The Company has holdings in the companies described in the
review of portfolio above. Of these, the Company has holdings
amounting to 20% or more of the issued share capital of the
following companies:
Capital
(Loss) and reserves
for the at last
Class Percentage last balance Accounting
Country of shares of issued financial sheet year
Name of incorporation held capital year date end
Equity Resources
Limited - England 31 May
see note [1] & Wales Ordinary 28.41% GBP(8,860) GBP(34,648) 2016
Treslow Limited
- England 30 April
see note [2] & Wales Ordinary 30.1% - - 2017
----------------- ----------------- ----------- ----------- ----------- -------------- -----------
Note [1]: Equity Resources Limited is considered to be an
associated undertaking. Equity accounting has not been used as
Equity Resources Limited has a written down value of GBPnil.
Note [2]: During 2008, the Company agreed to support Treslow
Limited through its pre-IPO processes. The Company has no
representation on the Board of Directors so it does not exert
significant influence over Treslow Limited and so it is not
considered to be an associated undertaking despite the holding
being in excess of 20% of the issued share capital. The carrying
value is GBPnil.
The Company's share of the gross liabilities of its Associates
at 30 September 2017 is GBP9,127. The share of gross assets has
been derived from the latest available financial information in
respect of the Associates. The company's share of the items making
up the profit and loss account and cash flow statements of its
Associates has not been disclosed as the numbers are not considered
material.
12. Trade and Other Payables: Amounts falling due within one year
30 September 30 September
2017 2016
GBP GBP
---------------- ------------ ------------
Trade creditors 33,243 20,242
Accruals 20,870 16,985
Loans 47,500 95,000
---------------- ------------ ------------
101,613 132,227
---------------- ------------ ------------
A bank overdraft facility is secured by a charge over certain of
the Company's investments having a market value at the balance
sheet date of GBP237,141.
In September 2015, the Company received a loan of GBP100,000
from a shareholder repayable in 12 months with an interest rate of
0% and with a conversion option at 3 pence per share. On 5 January
2017, GBP50,000 of the loan was satisfied by the issue of 2,500,000
new Ordinary shares at a price of 2 pence per share. In September
2017 the Company agreed with Mr Rowan to extend the existing loan
term to 1 November 2018.
13. Share Capital
The Called up share capital of the Company was as follows:
Called up, allotted, issued
and fully paid
Number of
Shares GBP
------------------------------------ ----------- ---------
As at 30 September 2015 39,417,259 394,173
------------------------------------ ----------- ---------
Issued 7 January 2016 in lieu
of fees 825,000 8,250
Treasury shares cancelled
15 March 2016 (2,300,000) (23,000)
Issued 12 May 2016 in lieu
of fees 733,332 7,333
Issued 8 July 2016 in lieu
of fees 942,855 9,429
------------------------------------ ----------- ---------
As at 30 September 2016 39,618,446 396,185
------------------------------------ ----------- ---------
Issued 17 October 2016 in
lieu of fees 725,000 7,250
Issued 5 January 2017 on conversion
of loan 2,500,000 25,000
Issued 5 January 2017 in lieu
of fees 800,000 8,000
Issued 11 May 2017 for cash
placing 8,500,000 85,000
Issued 17 May 2017 in lieu
of fees 754,717 7,547
------------------------------------ ----------- ---------
As at 30 September 2017 52,898,163 528,982
------------------------------------ ----------- ---------
Shares held in treasury
On 15 March 2016, the Company cancelled the 2.3 million treasury
shares held since 2007/8. The balance of the treasury shares was
accounted for via a reserve transfer as shown on the statement of
changes in equity.
Share Warrants
On 11 May 2017, as part of the Placing, the Company issued
8,500,000 warrants to subscribe for new Ordinary Shares in Starvest
at an exercise price of 4.0p per warrant, within a 24 month
exercise period. As at 30 September 2017, 8,500,000 warrants remain
outstanding (2016: nil).
14. Share options
The Company's share option scheme, established on 14 February
2005, expired on 31 January 2015. During the year ended 30
September 2017 no new options were granted.
15. Cash and Cash Equivalents
Year ended Year ended
30 September Cash flow 30 September
2016 GBP 2017
GBP GBP
------------------------------ ------------- ----------- -------------
Cash at bank 9,856 422,926 432,782
------------------------------ ------------- ----------- -------------
Net cash and cash equivalents 9,856 422,926 432,782
------------------------------ ------------- ----------- -------------
16. Capital Commitments
As at 30 September 2017 and 30 September 2016, the Company had
no commitments other than for expenses incurred in the normal
course of business.
17. Contingent Liabilities
There were no contingent liabilities at 30 September 2017 (2016:
GBPnil).
18. Related Party Transactions
There were no related party transactions during the year other
than those disclosed in notes 7 and 10.
The key management of the Company are considered to be the
Directors, the compensation for whom was GBP128,500 (2016:
GBP135,000).
19. Financial Instruments
The Company's financial instruments comprise investments, cash
at bank and various items such as other debtors, loans and
creditors. The Company has not entered into derivative transactions
nor does it trade financial instruments as a matter of policy.
Credit Risk
The Company's credit risk arises primarily from short term loans
to related parties and the risk the counterparty fails to discharge
its obligations. At 30 September 2017, these loans included
GBP59,153 (2016: GBP30,000) which have been provided for in
full.
Liquidity Risk
Liquidity risk arises from the management of cash funds and
working capital. The risk is that the Company will fail to meet its
financial obligations as they fall due. The Company operates within
the constraints of available funds and cash flow projections are
produced and regularly reviewed by management.
Interest rate risk profile of financial assets
The only financial assets (other than short term debtors) are
cash at bank and in hand, which comprises money at call. The
interest earned in the year was negligible. The directors believe
the fair value of the financial instruments is not materially
different to the book value.
Foreign currency risk
The Company has no material exposure to foreign currency
fluctuations.
Market risk
The Company is exposed to market risk in that the value of its
investments would be expected to vary depending on trading activity
of its shares.
Categories of financial instruments
Year ended 30 September Year ended 30 September
2017 2016
GBP GBP
Financial assets
Trade investments 1,519,983 1,372,616
Loans and receivables 29,589 71,667
1,549,572 1,444,283
======================= =======================
Financial liabilities
Loans and payables 101,613 132,227
101,613 132,227
======================= =======================
20. Capital Management
The Company's objective when managing capital is to safeguard
the entity's ability to continue as a going concern and develop its
investment activities to provide returns for shareholders. The
Company's funding comprises equity and debt. The directors consider
the Company's capital and reserves to be capital. When considering
the future capital requirements of the Company and the potential to
fund specific investment activities, the directors consider the
risk characteristics of all of the underlying assets in assessing
the optimal capital structure.
21. Events After the End of the Reporting Period
On 16 October 2017, the Company took part in the IPO of Cora
Gold Limited, an exploration company focused on West Africa.
303,030 new ordinary shares were purchased at a cost of 16.5p
equivalent to GBP50,000.
22. Ultimate controlling party
There is no ultimate controlling party.
Copies of the annual report and financial statements will be
posted to Shareholders on 8 November 2017 and will be available for
a period of one month thereafter from the Company's registered
office: 55 Gower Street, London, WC1E 6HQ or by email at
info@starvest.co.uk
Alternatively, from 8 November 2017 the report may be downloaded
from the Company's website at www.starvest.co.uk
Enquiries to:
Starvest PLC
Callum Baxter Chairman/CEO +44 7922 255 933
cbaxter@starvest.co.uk
Grant Thornton UK LLP (Nomad)
Colin Aaronson or Harrison Clarke +44 2073 835 100
SI Capital Ltd (Appointed Broker)
Nick Emerson +44 1483 413 500
This information is provided by RNS
The company news service from the London Stock Exchange
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November 06, 2017 08:17 ET (13:17 GMT)
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