TIDMSVE
RNS Number : 7997H
Starvest PLC
19 November 2018
19 November 2018
Starvest Plc ("Starvest" or "the Company")
Audited results for the year ended 30 September 2018
Chairman's Statement
I am pleased to present my annual statement to Shareholders for
the year ended 30 September 2018 and the eighteenth since the
Company was formed in 2000.
Results for the year
The natural resource sector made an encouraging recovery
throughout 2017 but then saw a decline in market sentiment from
January 2018. As a result, the Company's Net Asset Value per share
has decreased year on year by approximately 14%, however it is
pleasing to note the robustness of the Company's investment
portfolio with a current value of GBP1.5m, effectively the same
year on year (GBP1.52m to Sept 2017).
With interest in the sector declining during 2018, companies
with good projects and experienced teams have seen little to
encourage them to achieve a quotation on a recognised exchange when
their full valuation may not be met by the market. We have
restricted stock purchases during the year to 30 September 2018 to
preserve our cash resources. With the oil price recently rising
this may spur a renaissance in basic resources and our exposure to
oil and gas stocks will likely benefit the overall portfolio value
in the near term.
The majority of our investee companies have seen a small
decrease in share price year on year, reflecting the lack of
interest in the basic resource sector during the year. But despite
the poorer market sentiment several investee companies have
announced very encouraging exploration results and/or excellent
progress made towards production.
Greatland Gold plc remains one of our best preforming stocks and
while their share price fell back in early 2018 the company has
regained ground and seen an 80% share price increase year on year,
due to excellent results from field work on projects in Australia.
Other companies announcing very positive results are Cora Gold
which focused exploration on its flagship Sanankoro project which
has shown the potential for a sizeable greenfield gold discovery,
along with Ariana Resources releasing increased gold production
guidance for the 2018 period. Kefi Minerals have progressed gold
project development in Ethiopia and oil and gas explorer Block
Energy made a successful transition to AIM. Towards the year end an
all cash offer for Kuwait Energy was announced to the market with
an expected valuation of approximately US$490m.
It is our belief that there still remains many undervalued
opportunities in the natural resource sector and we can benefit by
employing our sector knowledge and market experience in sourcing
compelling investments.
Investing policy
The Company's investing policy is set out below and is also
available on our website, www.starvest.co.uk. At our December 2017
AGM we put before shareholders a proposal to add Direct Investment
in mining projects to our Investing Policy which was approved. This
allows the Company to take ownership of its own mining projects and
utilise these for stock positions in new and existing investee
companies. We continue to monitor the markets and may take on
projects when sentiment in the sector improves.
Trading portfolio valuation
A brief review of the Company's major portfolio companies can be
found later on in this announcement. 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.
Callum N Baxter
Chairman and Chief Executive, 19(th) November 2018
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 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 was put before shareholders for approval
at the AGM of the Company held 1st December 2017 and was
approved.
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 an investment in the
following company, which itself is an investment company: 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 2018, the portfolio comprised
interests in the companies commented on below. In addition, several
other active companies are included in the portfolio but not
commented on in this review.
Market sentiment declined during the period and the Company
focussed attention on rebalancing the existing portfolio which
resulted in the minor adjustment of several positions. The Trading
Portfolio Value declined by 1.3% year on year, Net Asset Value per
share declined 14% year on year and market capitalisation decreased
53% reflecting the negative sentiment within the basic resources
sector. The largest element of the decrease was attributed to gold
focussed companies.
Transactions
During the year the Company did not raise capital through
placings or subscriptions.
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 per share for
GBP50,000.
Trading portfolio valuation
A flat economic climate and decreased investor confidence in the
natural resources sector has been reflected in share price
valuations throughout the year. Since the highs of late 2017 we
have seen a minor decline in stock prices and our portfolio
valuation. The decrease in portfolio value was approximately 1.3%
since 30 September 2017 demonstrating the robustness of the
portfolio to weather the decline in sector sentiment.
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. However, we attribute no value to those of our investments
that do not enjoy a market quote. The only exception to this is our
holding in Kuwait Energy plc where we currently use a value
provided via a recent buyout offer for the company.
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 were increased by GBP71,924
during the year (released in 2017: GBP311,121).
A review of the leading portfolio companies follows. As last
year, we are not commenting on the less significant companies,
although they are listed at the end of the review.
The Company Asset Value net of debt decreased during the year to
30 September 2018 to GBP1.59m and the Company made a loss of
GBP316,242 compared with a profit of GBP302,329 in 2017. 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 sound position to
benefit from any 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 consumer items, motor cars, air conditioning, laptop
computers and all other tools of 21(st) 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
2018 2017 %
at Closing at BID values
values as as adjusted
adjusted
* Trading portfolio value GBP1.50 m GBP1.52 m -1.3%
* Company asset value net of debt GBP1.59 m GBP1.88 m -12%
* Net asset value per share 3.07 p 3.56 p -14%
* Closing share price 2.15 p 4.62 p -53%
* Share price discount to net asset value 30% -30 % -100%
* Market capitalisation GBP1.16 m GBP2.44 m -53%
Since the year end values have improved marginally. As at the
close of business on 31 October 2018 the Asset Value net of debt
was GBP1.67m.
Review of the current market
The basic resource sector saw a gradual decline in sentiment
throughout 2018 following a promising end to 2017. Demand for raw
materials continues to fluctuate and is likely to be volatile in
the near term.
The gold price peaked at around US$1,350 per oz in early 2018
but has since declined to lows of US$1,200 per oz. Other metals
such as copper, lead, nickel and zinc have all seen decreases over
the year. However, crude oil prices have risen over the period with
Brent Crude increasing from around $60/bbl to over US$70/bbl.
Within the current environment, industry majors have been
focused on returning capital and providing dividends to
shareholders rather than putting investment into exploration and
development of new mines.
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. The current market conditions
allow for measured, strategic investment in undervalued, early
stage, natural resource projects.
Interests in Gold exploration
A summary of our primary interests in gold exploration is
presented here:
Ariana Resources plc (www.arianaresources.com)
Ariana Resources (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. Gold production guidance for 2018
from Ariana's JV partner at Kiziltepe was around 20,000 oz Au per
year, an increase of some 47% on an annualised basis (2017: 10,191
oz Au). Gold production to the end of September 2018 totalled
19,625 ounces with annual production expected to exceed full year
guidance.
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 a distance to utilise existing mine
infrastructure.
The Tavsan project, which is part of the Red Rabbit JV, has seen
the resource updated to 3.98Mt at 1.32 g/t Au and 4.46 g/t Ag for
168,900 oz Au and 571,700 oz Ag. The company are targeting
300,000oz gold production, with over 60% of this open-pittable, and
will be undertaking feasibility-related work to advance the project
toward production.
Work is also continuing on exploration of the 100% owned
Salinbas project. During the year exploration work extended the
Salinbas main target by over 500m of strike to the north, and a
JORC exploration target of up to 2.7Moz gold and 16.1Moz silver has
been established at the project which excludes the current JORC
Indicated and Inferred Resource of approximately 1Moz gold.
The Kepez resource has also been updated to 0.37Mt at 2.0 g/t Au
and 14.0 g/t Ag for 23,900 oz gold and 164,300 oz silver.
Metallurgical testwork following trial mining at Kizilcukur
demonstrates high gold recoveries ranging from 83% to 92%.
Ariana's share of profits from Kiziltepe amounted to GBP1.8m in
the year ended 31 December 2017 and GBP1.1m in 6 months to 30 June
2018. A profit (before tax) of GBP0.3m was recorded for H1 2018
with operating costs in line with reported forecasts.
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.
During the year Kefi continued to progress development on the
Tulu Kapi Gold Project in Ethiopia. Pre-development costs of
approximately US$60m have been met and the Government of Ethiopia
has committed US$20m to fund construction of off-site
infrastructure during 2019 and 2020.
ANS Mining Share Company is committed to spending US$30-38m to
be released in stages based on government consents and finance
assurances. Numerous consents have been granted during the year
including development, operational, environmental and social.
Construction is scheduled to begin in early 2019 with
commissioning in the later parts of 2020. Production costs are
estimated at approximately US$700/oz with all-in sustaining costs
of around US$800/oz.
Greatland Gold plc (www.greatlandgold.com)
The AIM listed exploration company holds 100% of six exploration
areas in Western Australia and Tasmania in Australia. Greatland
Gold concentrated work on four of its project areas during the year
and together with share issues and warrant exercises the company is
in a strong financial position holding more than GBP4,000,000 in
cash for work on its exploration projects over the next 18-24
months.
Greatland continued to advance its exploration targets at
Firetower in Tasmania and Ernest Giles in central Western
Australia. Ernest Giles has an established target area, Meadows,
which saw large scale mineralised zones drilled at closer spacing
confirming gold mineralisation in basement greenstone lithologies.
The drill programme extended two previously identified large zones
of gold mineralisation, including the Western Zone which has been
extended to a strike length of approximately 6.2km and remains open
to the north, and the Eastern Zone with an extended strike length
of approximately 2.5km. Broad zones of consistently anomalous gold
were apparent in many holes for up to 40m metres down hole.
At Firetower a 3D induced polarisation (IP) geophysical survey
was conducted producing excellent 3D models which highlight a large
target, approximately 1,000 metres long, traversing east-west
across the Firetower prospect, which is open to the east and up to
depths of 400 metres. Significantly, the results illustrate the
existing sub-surface gold mineralisation identified in drilling to
date is spatially associated with the 3DIP chargeability
anomaly.
Greatland also began work on recently acquired ground in the
Paterson area of Western Australia. The first drilling campaign at
Havieron, carried out in Q2 2018, yielded excellent results of 121m
at 2.93g/t gold and 0.23% copper from 497m, including 11.5m at
21.23g/t gold and 0.67% copper from 568.5m (HAD001), and 21m at
3.79g/t gold 0.44% copper from 418m (HAD003). The company is
currently conducting a second drill programme at Havieron, with
plans for several more holes before the end of 2018 and have
already reported significant mineralisation visibly similar to that
of HAD001, in the first hole of the current drilling campaign.
In June 2018, Greatland Gold embarked on the first exploration
efforts at its Black Hills licence. Multiple gold nuggets were
found at surface in thin sand cover, illustrating the presence of
high-grade gold mineralization over a 200 metre strike length at
the Saddle Reefs prospect. In addition to collecting pieces of
gold, rock chip samples were taken over 800m of strike at the
Saddle Reefs prospect. Eleven of 28 rock chip samples collected
returned gold values over 10.0g/t gold with a maximum result of
81.7g/t Au, as well as high silver values up to 106.1g/t. The
company then conducted a 3D IP survey over the mineralised zone of
the Saddle Reefs area which produced a 1,000m long chargeability
anomaly spatially co-incident with surface gold mineralisation.
Drill testing of the resultant targets at Saddle Reefs is scheduled
for H1 2019.
Cora Gold Limited (www.coragold.com)
Cora Gold is an AIM listed gold exploration company focussing on
Southern and Western Mali and Eastern Senegal in West Africa. Their
licence portfolio covers nearly 1,500km(2) of prospective ground
across two of the most prolific gold belts in the region, Yanfolila
and Kenieba, from where more than 65moz gold has been discovered
over the last two decades.
During the year Cora Gold focused exploration work on its
flagship Sanankoro project area, extending identified zones of gold
mineralisation to 8km, with the remainder of a 14km long structural
corridor as yet untested. Geological setting and the scale of the
anomalies suggest the potential for a reasonably sized greenfield
gold discovery at Sanankoro. The management team are aiming for a
+1moz deposit and SRK Consulting confirmed an initial exploration
target of between 1.0-2.0moz gold.
The mineralisation has been delineated to a depth of 100m most
of which is hosted within soft weathered material. From surface
weathered material ranges from around 50m to in excess of 100m in
depth across the project area. The soft, weathered rock would
potentially allow for open cut mining and milling, potentially
providing a low cost source of ore to a processing plant.
At Tekeledougou, a short reconnaissance drill programme
intersected near surface gold mineralised quartz veins in weathered
material. The company plans to follow up on targets to evaluate the
potential for a low cost open pit mining operation with the
potential to supply ore feed to the recently commissioned Yanfolila
plant located 8km away and operated by Cora's major shareholder
Hummingbird Resources.
A limited amount of work was completed over other licence areas
including geological mapping, surface sampling and reconnaissance
drilling. Extensive areas of present and historic artisanal mining
works are apparent.
Interests in energy
We have three companies in the energy sector on which we comment
as follows:
Alba Mineral Resources plc (www.albamineralresources.com)
Alba Mineral Resource is a diversified mineral exploration
company focused on oil and gas, gold and base metals with holdings
in Greenland (heavy minerals and copper), UK (oil and gas, gold)
and Ireland (base metals).
The Company's UK oil and gas focus is on the Horse Hill-1
project where Alba hold an interest in the HHDL consortium
developing the project, with a 10% stake in the project. During
2018 significant progress was made towards obtaining regulatory
approvals for extending well tests. All planning conditions were
satisfied and the Oil and Gas Authority (UK) granted permission for
testing which commenced in June 2018. Test results were positive.
The operator HHDL is targeting the start-up of long term Portland
oil production during 2019 subject to the grant of necessary
regulatory consents.
Alba also hold a 5% stake in the Brockham project in the Weald
Basin and Angus Energy, the operator, announced in March 2018 that
continuous production at no.2 well had resumed with planning
approvals granted in August for appraisal of no.4 side-track
well.
In December 2017 Alba acquired a 49% interest in Gold Mines of
Wales (GMOW), owner of the Clogau Gold Project, and subsequently
acquired a further 41% stake in GMOW bringing their total holding
to 90%. The project comprises the Clogau Gold Mine and a number of
highly prospective targets and former gold workings. Their 2018
work represents the first modern exploration campaign in the area
and included surface geochemistry and geophysical surveys in order
to establish new gold targets within the existing mine area. Work
has already found potential extensions of mineralisation close to
the existing mine workings.
Alba's Greenland activities saw a field programme completed
across their Thule Black Sands ilmenite project, with mapping and
drilling completed which refined zones of interest over
approximately 10km of strike and some bulk sampling carried out for
metallurgical test work. Copper targets have also been identified
by field exploration activities at their Inglefield Project, with
drill programme preparations underway.
Alba continued work on the Ireland base metal project extending
tenure for a further two years. The company applied for drilling
permissions on targets at Limerick and once approved the company
intends to drill test one or more of these.
The Company raised over GBP1.5m (before expenses) during the
year and two senior oil and gas appointments were made to bring
additional expertise to the team.
Kuwait Energy plc (www.kuwaitenergy.co)
Kuwait Energy is an independent oil and gas company involved in
exploration, appraisal, development and production of hydrocarbons
in Iraq, Egypt, Yemen and Oman. Of the nine exploration,
development and production assets held Kuwait Energy directly
operates six.
The company reported average daily WI production for the
half-year to end June 2018 at 28.7kboepd. At Block 9 in Iraq,
Kuwait Energy saw the commencement of production from its 4th well,
Faihaa-4, enabling record exit production on 30 June 2018 of
approximately22 kboepd. Drilling of Faihaa-5 production well was
completed and is expected to come online in tandem with the nearly
complete Faihaa-6 before the end of 2018. Both new wells are
expected to increase production at Block 9 to approximately 30
kboepd. At the Iraq Siba gas field pre-commissioning activities
continued with commercial production of 25 mmscfd expected in H2
2018.
Kuwait Energy continued exploration on its Egypt ground with
over 50% of completed exploration wells encountering oil, including
a discovery at South Kheir-1X (SK-1X).
Kuwait Energy signed an Agreement with Dragon Oil in February
2018 for the transfer of a 15% participating interest in its Block
9 (Iraq) project. The Agreement composed of two different parts; a
sale of 8.57% interest for US$100 million cash and a transfer of
6.43% interest as settlement of a dispute with Dragon Oil.
In September 2018 Kuwait Energy announced an agreement with
United Energy Group Limited ("UEG") for the sale of its entire
issued share capital. Under the terms of the acquisition the
consideration comprises approximately US$490 million for all the
current issued share capital of Kuwait Energy (on a fully diluted
basis) which equates to approximately US$1.50 per share. The
consideration is subject to foreign exchange adjustments and the
price per share paid at completion may be more or less than US$1.50
per share.
Oracle Power plc (www.oraclepower.co.uk)
Over the last 12 months Oracle Power obtained a 'Letter of
Intent' conditionally issued by Private Power Infrastructure Board
('PPIB') and continued work with Chinese partners under a
Memorandum of Understanding (MOU). Pakistan elections saw an
orderly transition of power and indications are that the new
government remain in favour of the China-Pakistan Economic Corridor
("CPEC") initiative maintaining its momentum.
Oracle Power raised funds of GBP1,000,000 (gross) during the
year in order to meet working capital costs while due diligence was
continued by Chinese investment partners. The company acquired the
minority interest in its subsidiary Sindh Carbon Energy Limited
through the issue of 95,652,174 shares
In February 2018 the Company announced that the Private Power
Infrastructure Board approved the issue of conditional Notice to
Proceed ("NTP") and Letter of Intent ("LOI") to the Company's
subsidiary, Thar Electricity (Private) Limited, subject to an
increase in size of the power plant from 660 MW to 700 MW being
approved within the CPEC. Once achieved, Oracle will seek approval
to build, own and operate the 700MW power plant. Additional
approvals will still be required, such as Environmental and Social
Impact Assessments, and Electricity Tariff Petitions before a
Generation Licence can be sought.
The parties to the MOU are still proceeding with financial,
legal and commercial due diligence. On successful conclusion of
this work the parties will move forward to the second phase of the
project, drawing up definitive agreements and working towards
financial close.
Interests Agricultural Products
Salt Lake Potash Limited (www.saltlakepotash.com.au)
Salt Lake Potash is the owner of the Goldfields Salt Lakes
Project (GSLP), which comprises nine large salt lakes in the
northern Goldfields Region of Western Australia. The Company's aim
is to develop the first salt-lake brine Sulphate of Potash (SOP)
operation in Australia, starting with a demonstration plant
producing up to 50,000tpa of SOP.
The Company has made substantial progress during the year
entering into Memorandums of Understanding (MOU) with Blackham
Resources Limited (Blackham) and progressing with scoping studies
and resource estimates, as well as obtaining its first Mining Lease
at Lake Wells.
The MOU with Blackham is to investigate the potential
development of a SOP operation based at Lake Way, near Wiluna.
Under the MOU, Salt Lake Potash would construct an initial pond
system to dewater Blackham's Williamson Pit offering a shorter
development time due to the pits very high grade and salt
saturation.
Salt Lake Potash also entered into a MOU and Co-operation
Agreement with Australian Potash Limited to undertake a joint study
of the potential benefits of development cost sharing for each
Company's projects at Lake Wells.
The Company executed its first MOU for an Offtake Agreement with
Japan based Mitsubishi Corp. for the sale and offtake rights for up
to 50% of production from the demonstration plant at the GSLP for
distribution into Asia and Oceania and, potentially, other
markets.
Salt Lake Potash released an initial estimate of Exploration
Targets for eight of the nine lakes comprising the GSLP. The ninth
lake, Lake Wells, already having a Mineral Resource reported in
accordance with the JORC code. The total "stored" Exploration
Target for the GSLP is 290Mt - 458Mt SOP with an average grade of
4.4 - 7.1kg/m3 (including Lake Wells' Mineral Resource of 80-85Mt).
On a "drainable" basis the total Exploration Target ranges from
26Mt - 153Mt of SOP.
The Company completed a Scoping Study on the development of a
50,000tpa SOP Demonstration Plant at Lake Way that supports a low
capex, highly profitable, staged development model with total
capital costs of approximately A$49m and average cash operating
costs of approximately A$387/t. The Company's objective is to
commence construction in 2018, harvesting first salts in 2019, and
producing first SOP in 2020. Pilot scale crystalliser validation
testwork was completed in the United States, successfully producing
high quality SOP crystals representative of full-scale plant
product.
Surface aquifer exploration programs were completed at Lake
Ballard and Lake Irwin. This work provided preliminary data for the
geological and hydrological models for surface aquifers of the
Lakes, as well as brine, geological and geotechnical samples. The
Company undertook initial surface brine sampling of the near
surface aquifer and reconnaissance of access and infrastructure at
all remaining Lakes held under the GSLP.
Salt Lake Potash intends to progress with a PFS for the Lake Way
plant; and continue with other exploration and development work
across the Company's multi lake portfolio.
Sunrise Resources plc (www.sunriseresourcesplc.com)
Sunrise Resources interests lie in Nevada (USA) and Australia
with commodities including precious and base metals as well as
industrial minerals.
The company is currently focusing on the development of its 100%
owned CS Pozzolan-Perlite project in Nevada USA. First production
is targeted for the first half of 2019. During 2018 a drill
programme was completed to better define mineralisation of
commercial interest and assist in the preparation of mine
plans.
Pozzolan was intersected from surface of bedrock, directly
beneath shallow colluvium at the Main Zone and Tuff Zone prospects
and in step out holes. Thick perlite intersections were encountered
at Main Zone. Results of testwork on three composite samples of
pozzolan show that the product mitigates the impact of "concrete
cancer" and places it amongst the best natural pozzolans available
on the market. Perlite test results support multiple market
applications including horticulture, tiles, plaster and mortar.
Permitting work continued during the year, with the US Bureau of
Land Management appointing an interdisciplinary project permitting
team for the project.
Sunrise Resources signed two non-binding Memorandums of
Understanding with potential customers in respect of future sales
for perlite from the CS Project. The parties will negotiate Offtake
Agreements subject to satisfactory testing results and other
commercial terms.
The JV Junction Copper-Silver-Gold Project saw surface
exploration and gravity surveys completed. A large gravity anomaly
at Denio Summit suggests there is potential for down dip
copper-silver veins. Further exploration, including an IP
geophysical survey and airborne magnetic and radiometric survey,
have commenced with the aim of generating robust targets for a
first-pass drill programme.
A 1.5km trend of surface showings of copper-silver-gold quartz
veins and pegmatites has been reported. A potassium depletion
anomaly approximately 800m long has been defined by airborne
magnetic and radiometric survey coincident with the soil anomaly
(gold enrichment in 86 soil samples on 10 lines covering 1km of the
surface trend of showings), and coincident with an interior low in
the gravity high anomaly at the Denio Summit target.
The 100% owned Bakers Gold Project in Western Australia has had
mapping and chip sampling of gold bearing quartz-stockwork veins in
the Dicky Lee open pit; gold values averaged 1.7 g/t Au and peaked
at 32.1g/t Au. Infill soil sampling at DRL4 target confirms 500m
long gold-in-soil anomaly.
The company raised over GBP500,000 (before expenses) through
share issues during the 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' &
Strategic reports.
Finance Review
Over the past 12 months the Company recorded a loss of
GBP316,242, equating to a loss of 0.60 pence per share with net
cash outflow for the year of GBP278,933. This compares to a profit
of GBP302,329 in the previous year that equated to a profit of 0.64
pence per share. The Company's cash deposits stood at GBP153,849 at
the period end.
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, 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.
Statement of directors' responsibilities
Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Directors'
report, the Strategic report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under company law
the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs and profit or loss of the company for that period. In
preparing those financial statements, the directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and estimates that are reasonable and prudent;
-- state whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors confirm that so far as each of the Directors is
aware:
-- there is no relevant audit information of which the Company's auditor is unaware; and
-- the Directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the auditors are
aware of that information.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Corporate governance statement
The board of Starvest plc are committed to the principles of
good corporate governance and believe in the importance and value
of robust corporate governance and in our accountability to our
shareholders and stakeholders.
The AIM Rules for companies require AIM companies to apply a
recognised corporate governance code. Starvest has chosen to adhere
to the Quoted Company Alliance's Corporate Governance Code for
Small and Mid-Size Quoted Companies (the "QCA Code").
The Chairman's Statement on Corporate Governance, which is
included in the Annual Report and which is also available on the
website, provides more details on how the board itself operates as
well as the steps taken to ensure that its staff adhere to
principles such as compliance with the UK anti-bribery
legislation.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 SEPTEMBER 2018
Year ended
Year ended 30 30 September
Note September 2018 2017
GBP GBP
Revenue - 526,595
Cost of sales - (266,466)
--------------- -------------
Gross profit - 260,129
Administrative expenses (250,147) (274,506)
Amounts written off against trade
investments 11 (686,932) (277,277)
Amounts written back against trade
investments 11 615,008 588,398
--------------- -------------
Operating (loss)/profit 5 (322,071) 296,744
Interest receivable 6 5,829 5,585
(Loss)/profit on ordinary activities
before tax (316,242) 302,329
Tax on (loss)/profit on ordinary
activities 8 - -
(Loss)/profit for the financial
year attributable to
Equity holders of the Company (316,242) 302,329
=============== =============
(Loss)/earnings per ordinary share
Basic 9 (0.60) pence 0.64 pence
Diluted 9 (0.51) pence 0.54 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 2018
Year ended Year ended
30 September 30 September
Note 2018 2017
GBP GBP
Current assets
Trade and other receivables 10 55,992 29,589
Trade investments 11 1,498,059 1,519,983
Cash and cash equivalents 153,849 432,782
------------- -------------
Total current assets 1,707,900 1,982,354
------------- -------------
Current liabilities
Trade and other payables 12 (119,401) (101,613)
Total current liabilities (119,401) (101,613)
------------- -------------
Net current assets 1,588,499 1,880,741
============= =============
Capital and reserves
Called up share capital 13 539,649 528,982
Share premium account 1,654,209 1,640,876
Retained earnings (607,859) (291,617)
Equity reserve 2,500 2,500
------------- -------------
Total equity shareholders' funds 1,588,499 1,880,741
============= =============
These financial statements were approved and authorised for
issue by the Board of Directors on 19(th) November 2018.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2018
Equity reserve Total Equity attributable
Share capital Share premium Retained earnings to shareholders
GBP GBP GBP GBP GBP
At 1 October 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
------------- ------------- -------------- ----------------- -------------------------
Loss for the period - - - (316,242) (316,242)
Total recognised income
and expenses for the
period - - - (316,242) (316,242)
------------- ------------- -------------- ----------------- -------------------------
Shares issued 10,667 13,333 - - 24,000
Cost of issue - - - - -
Equity component of - - - - -
convertible loan
------------- ------------- -------------- ----------------- -------------------------
Total contributions by and
distributions to owners 10,667 13,333 - - 24,000
At 30 September 2018 539,649 1,654,209 2,500 (607,859) 1,588,499
------------- ------------- -------------- ----------------- -------------------------
STATEMENT OF CASH FLOWS
FOR THE YEARED 30 SEPTEMBER 2018
Note 30 September 30 September
2018 2017
GBP GBP
Cash flows from operating activities
Operating (loss)/profit (322,071) 296,744
Net interest receivable 5,829 5,585
Share based payment charge 24,000 46,500
(Increase)/decrease in debtors (26,403) 42,078
Increase in creditors 17,788 16,886
Net cash used in operating activities (300,857) 407,793
------------ ------------
Cash flows from investing activities
Purchase of current asset investments 11 (50,000) (100,000)
Sale of current asset investments - 523,883
Profit on sale of current asset investments - (260,129)
Increase in investment provisions 686,932 277,277
Decrease in investment provisions (615,008) (588,398)
Net cash used in investing activities 21,924 (147,367)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares - 170,000
Transaction costs of issue of shares - (7,500)
Net cash flows from financing activities - 162,500
------------ ------------
Net (decrease)/increase in cash and cash equivalents (278,933) 422,926
Cash and cash equivalents at beginning of period 432,782 9,856
Cash and cash equivalents at end of year 15 153,849 432,782
============ ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 SEPTEMBER 2018
1. Company Information
Starvest plc is a Public Limited Company incorporated in England
& Wales. The registered office is Salisbury House, London Wall,
London, EC2M 5PS. 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 19(th) November 2018 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 cash at bank, the use
of short term loans and, on occasion, may utilise a bank overdraft
facility. The Company's formal overdraft facility was last
confirmed by the bank in early 2018.
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 2019. 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 of a recent buyout offer for the
company. 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 2018, these provisions totalled
GBP142,000 (2017: GBP143,000).
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 2018
was GBPnil (2017: GBP526,595).
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
2018 2017
GBP GBP
This is stated after charging:
Auditor's remuneration
- audit services 14,400 14,400
- other services - -
Director's emoluments - note 7 137,035 128,500
============= =============
6. Interest receivable
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
---------------------------------------- ------------- --------------------
Bank interest receivable 329 85
Interest on short term loans to related
parties 5,500 5,500
5,829 5,585
---------------------------------------- ------------- --------------------
7. Directors' Emoluments
There were no employees during the period apart from the
directors. No directors had benefits accruing under money purchase
pension schemes.
Shares
issued
Amounts in lieu
paid to of fees
Pension third parties - see
Year ended 30 September Fees GBP - see note note Total
2018 GBP GBP GBP GBP
------------------------ ------ ---------- --------------- -------- -------
C Baxter 4,000 - 57,000 19,000 80,000
J Watkins (resigned
8 May 2018) 6,044 - 6,044 - 12,088
G Cryan 20,000 200 15,000 5,000 40,200
ACR Scutt (appointed
8 May 2018) 4,747 - - - 4,747
------------------------ ------ ---------- --------------- -------- -------
34,791 200 78,044 24,000 137,035
------------------------ ------ ---------- --------------- -------- -------
Shares
issued
Amounts in lieu
Pension paid to of fees
GBP third parties - see
Year ended 30 September Fees - see 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 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,
GBP76,000 (2017: GBP77,000) is payable to Baxter Geological, a
company of which he is a director and shareholder. Of this amount,
GBP19,000 was settled in shares in the Company. At 30 September
2018, GBP19,000 (2017: GBP19,000) was outstanding.
-- In respect of the professional services of John Watkins, FCA,
GBP6,044 (2017: GBP23,000) of the above remuneration was payable
through his personal business. At 30 September 2018, GBPnil (2017:
GBP2,500) was outstanding.
-- In respect of the professional services of Gemma Cryan,
GBP20,000 (2017: GBP9,500) was payable to her personal business. Of
this amount GBP5,000 was settled in shares in the Company. At 30
September 2018 GBP5,000 (2017: GBP2,500) remained outstanding.
8. Income Taxes
a) Analysis of charge in the period
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
United Kingdom corporation tax at 19%
(2017: 19/20%) - -
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%
(2017: 19/20%). The differences are explained below:
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
(Loss)/profit on ordinary activities
before tax (316,242) 302,329
============= =============
(Loss)/profit multiplied by standard
rate of tax (60,086) 59,710
Effects of:
Utilised against carried forward losses - (59,710)
Losses carried forward not recognised
as deferred tax assets 60,086 -
- -
============= =============
9. (Loss)/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
2018 2017
GBP GBP
-------------------------------------------- ------------- -------------
(Loss)/profit for the year (316,242) 302,329
-------------------------------------------- ------------- -------------
Weighted average number of Ordinary shares
of GBP0.01 in issue 53,012,136 47,287,952
(Loss)/profit per share - basic (0.60) pence 0.64 pence
-------------------------------------------- ------------- -------------
Warrants in issue 8,500,000 8,500,000
Weighted average number of Diluted Ordinary
shares of GBP0.01 in issue 61,512,136 55,787,952
(Loss)/profit per share - diluted (0.51) pence 0.54 pence
-------------------------------------------- ------------- -------------
10. Trade and Other Receivables
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
------------------------------------ ------------- --------------------
Prepayments 55,992 29,589
Short term loans to related parties - -
55,992 29,589
------------------------------------ ------------- --------------------
Short term loans to related parties
-- At 30 September 2018 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 2018, 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 its now completed AIM listing
remain unpaid. Interest totalling GBP17,153 has been accrued on
these loans at the year end. However, the Company has made a full
provision for these loans & interest charges, totalling
GBP44,653.
11. Current Trade Investments
30 September 30 September
2018 2017
GBP GBP
--------------------------------------- ------------ ------------
Cost
At 30 September 2017 & 2016 5,522,574 5,686,328
Additions at cost 50,000 100,000
Disposals - (263,754)
At 30 September 2018 & 2017 5,572,574 5,522,574
--------------------------------------- ------------ ------------
Market value movement & provisions
At 30 September 2017 & 2016 4,002,591 4,313,712
Released during the year (615,008) (588,398)
Provided during the year 686,932 277,277
At 30 September 2018 & 2017 4,074,515 4,002,591
--------------------------------------- ------------ ------------
Fair value amount
At 30 September 2018 & 2017 1,498,059 1,519,983
--------------------------------------- ------------ ------------
The fair value carrying values of the
investments above were as follows:
Quoted on AIM 1,373,783 1,370,565
Quoted on NEX 7,366 10,692
Quoted on foreign stock exchanges 367 1,782
Unquoted at Directors' valuation 116,543 136,944
1,498,059 1,519,983
--------------------------------------- ------------ ------------
The Company has holdings in the companies described in the
review of our portfolio earlier in this announcement. Of these, the
Company has holdings amounting to 20% or more of the issued share
capital of the following companies:
Capital
and reserves
Profit at last
Class Percentage for the balance
Country of shares of issued last financial sheet Accounting
Name of incorporation held capital year date year end
Equity Resources
Limited - see England 31 May
note [1] & Wales Ordinary 28.41% GBP3,045 (GBP31,823) 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.
The Company's share of the gross assets of its Associates at 30
September 2018 is GBP865. 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
2018 2017
GBP GBP
----------------- ------------ ------------
Trade creditors 20,791 33,243
Accruals 42,317 20,870
Employment costs 8,793 -
Loans 47,500 47,500
----------------- ------------ ------------
119,401 101,613
----------------- ------------ ------------
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 GBP467,074.
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. The terms of this loan are currently being
re-negotiated.
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 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
--------------------------------------- ---------------- --------
Issued 22 August 2018 in lieu of fees 1,066,666 10,667
As at 30 September 2018 53,964,829 539,649
--------------------------------------- ---------------- --------
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 2018, 8,500,000 warrants remain
outstanding (2017: 8,500,000).
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 2018 no new options were granted.
15. Cash and Cash Equivalents
Year ended Year ended
30 September Cash flow 30 September
2017 GBP 2018
GBP GBP
------------------------------ ------------- ------------- -------------
Cash at bank 432,782 (278,933) 153,849
------------------------------ ------------- ------------- -------------
Net cash and cash equivalents 432,782 (278,933) 153,849
------------------------------ ------------- ------------- -------------
16. Capital Commitments
As at 30 September 2018 and 30 September 2017, 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 2018 (2017:
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 GBP137,035 (2017:
GBP128,500).
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 2018, these loans included
GBP64,653 (2017: GBP59,153) 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
2018 2017
GBP GBP
Financial assets
Trade investments 1,498,059 1,519,983
Loans and receivables 55,992 29,589
1,554,051 1,549,572
======================= =======================
Financial liabilities
Loans and payables 119,401 101,613
119,401 101,613
======================= =======================
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
There are no events after the end of the reporting period to
disclose.
22. Ultimate controlling party
There is no ultimate controlling party.
Copies of the annual report and financial statements are being
posted to Shareholders shortly and will be available for a period
of one month thereafter from the Company's registered office:
Salisbury House, London Wall, London EC2M 5PS or by email at
info@starvest.co.uk
Alternatively, from 19(th) November 2018 the report may be
downloaded from the Company's website at www.starvest.co.uk
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries to:
Starvest PLC
Callum Baxter Chairman/CEO 07922 255 933
cbaxter@starvest.co.uk
Grant Thornton UK LLP (Nomad)
Colin Aaronson,Harrison Clarke and Seamus Fricker 02073 835
100
SI Capital Ltd (Broker)
Nick Emerson and Alan Gunn 01483 413 500
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 ZMMMMDLMGRZM
(END) Dow Jones Newswires
November 19, 2018 09:26 ET (14:26 GMT)
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