TIDMSVE
RNS Number : 1260O
Starvest PLC
28 May 2020
28 May 2020
Half-year report - six months ended 31 March 2020
Chairman's statement
Market performance in the latter half of calendar 2019 remained
as per the first half with little direction and minimal movement in
many of our portfolio stocks and commodity prices. But from January
2020 the market dynamic changed significantly following reduced oil
prices and the impact of COVID-19 which has resulted in major
changes across many sectors.
In our market sector focus (natural resources) precious metals
have seen much interest. We are fortunate that during the course of
2019 we refocussed our portfolio to reduce holdings in oil and gas
while increasing our exposure to precious metals. Through our
efforts we have benefitted significantly as reflected in our Net
Asset Value which has increased from GBP2.25m as at 30 Sept 2019 to
GBP4.66m as at 31 March 2020 an increase of more than 100%. This
increase in NAV continues into the current quarter largely
benefitted by the outstanding performance of Greatland Gold plc
(LON:GGP) and Ariana Resources plc (LON:AAU).
Accompanying the very pleasing increase in NAV, the Company made
an Operating Profit of GBP 2,532,834 during the six month period to
31 March 2020 mainly attributable to significant increases in
selected portfolio stocks such as Greatland Gold plc and Ariana
Resources plc. This Operating Profit resulted in a Profit per Share
of 4.53p for the period.
The Company continues its historic policy of investing in
companies with early stage resource projects but we also have the
mandate to invest directly in projects. We continue to review
promising projects, particularly with a precious metal focus. We
are also evaluating other commodities such as lithium and cobalt
which are forecast to increase in use and demand over the medium to
long term.
While COVID-19 has affected markets recently; mining and
exploration operations for several of our investee companies
remained largely unchanged. They have continued to provide very
positive news-flow while adapting to the pandemic situation and
take full consideration of both staff and stakeholders into
account. They are to be commended for their efforts under the
current circumstances.
Greatland Gold (LON:GGP) has seen continued exploration on its
Paterson project licences with drilling at the Havieron gold-copper
deposit producing more exciting results. The Newcrest Mining
Limited (ASX:NCM) operated Havieron project has expanded known
mineralisation to over 400m in length and 150m wide and up to 600m
below cover while remaining open to the northwest and at depth.
Newcrest currently have 9 drill rigs in operation at the site and
are undertaking a concept study investigating potential underground
mining techniques with completion targeted for H2 2020. Greatland
Gold have also been conducting their own exploration programmes and
continue to show encouraging drill results from their Tasmanian
licences. At Firetower, IP anomalies were drill tested and gold
mineralisation was proven coincident with further IP anomalies yet
to be drilled out, and at Warrentinna diamond drilling established
near surface high-grade gold. Geophysics and geochemical surveys in
the Paterson have established numerous high-priority targets for
drill testing, with signatures similar to those of the Havieron
target, and field work on these is set to commence once COVID-19
restrictions are lifted. Well funded and with a strong team in
place we look forward to further encouraging news from the
company.
Ariana Resources (LON:AAU) continues to report good silver-gold
production results from its Kiziltepe Mine. Annual production in
2019 exceed guidance by over 10% as well as reducing operating
costs in the last quarter from US$540 to US$500 and the Company has
now completed 100% repayment of its $33m capital loan on the mine
as reported on 1 May 2020. Q1 2020 preliminary results are
continuing to show strong results again with production exceeding
average annualised quarterly guidance by 14% at 5,129 oz at an
average grade of 3.22g/t gold. Ariana has also been continuing
exploration on its 100% owned Kizilcukur project with a view to
possibly developing the deposit as a satellite to the Kiziltepe
Mine.
Cora Gold (LON:CORA) has continued exploration activities on its
flagship Sanankoro gold project, with metallurgical testing and a
scoping study overseen by Wardell Armstrong International. The
Study based on a US$1,400 gold price sees an IRR of 84% and
US$30.9m NPV at 8% discount rate. With US$942 per oz all in
sustaining cost. Capex is estimated at a US$20.6m pre-production
with an 18-month pay-back period; based on the top 100m of known
mineralisation. The estimate is based on 25% of a total strike
length with a further approximate 30 linear km strike length of
potential mineralised zones yet to be drill tested. COVID-19
restrictions have curtailed the company's drilling on lower
priority projects in Senegal but exploration work on expanding the
resources at Sanankoro has not been affected. The company is well
funded with a recent equity raise of over GBP2.75m completed.
Kefi Minerals (LON:KEFI) are continuing with the construction of
the Tulu Kapi gold mine in Ethiopia and remain on target to start
full production in 2022 Off-site infrastructure construction
programmes are currently continuing for road and electricity
connections. The national Bank of Ethiopia approved the term sheet
for the project finance with two leading African banks and the
Central Bank registered $49m of past investment in the project with
further historical spending due to be registered. This will allow
for compliance with the 30/70 equity/debt capital ratio required
for foreign direct investment in the project which allows lenders
to trigger credit approvals and documentation to allow full
financial close of the project funding in October 2020.Kefi has
also seen significant advances in its exploration of the Hawiah
project in Saudi Arabia. Scout drilling targeted a volcanogenic
massive sulphide (VMS) system and intercepted anomalous gold,
silver, copper and zinc over a 4km section of a 5km long gossan
ridge and coincident geophysical anomaly. The company hopes to
delineate a JORC compliant maiden Mineral Resource Estimate by
mid-2020.
Other investee companies also continue to push ahead such as
Oracle Power (LOM:ORCP) with a new consortium established to help
see its proposed coal mine and power plant progress toward
development. Similarly, Sunrise Resources (LON:SRES) has continued
to advance a pozzolan-perlite project in Nevada, USA towards mine
permitting.
Overall, throughout the past year we moved our focus to precious
metals and trimmed our exposure to oil stocks: a strategy that is
now bearing fruit. We note the current market volatility but our
leverage to safe haven assets lets us feel confident that we can
retain value and continue to achieve a very positive outcome.
Callum N Baxter
Chairman & Chief Executive
28 May 2020
Income Statement
6 months 6 months Year ended
to 31 March to 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
GBP GBP GBP
Revenue 62,253 27,165 287,655
Cost of sales (40,044) (16,257) (235,442)
------------- ------------- --------------
Gross profit 22,209 10,908 53,213
Administrative expenses (150,337) (127,149) (251,225)
Amounts written off against
trade investments (86,103) (133,086) (383,612)
Amounts written back against
trade investments 2,747,065 889,741 968,387
Operating profit 2,532,834 640,414 386,763
Interest receivable 20 37 87
------------- ------------- --------------
Profit on ordinary activities
before tax 2,532,854 640,451 386,850
Tax on profit on ordinary activities - - -
------------- ------------- --------------
Profit attributable to equity
holders of the Company 2,532,854 640,451 386,850
============= ============= ==============
Earnings per share - see note
3 4.53 pence 1.18 pence 0.70 pence
Basic 4.53 pence 1.02 pence 0.70 pence
Diluted
Statement of Financial Position
6 months 6 months Year ended
ended 31 ended 31 30 September
March 2020 March 2019 2019
Unaudited Unaudited Audited
GBP GBP GBP
Current assets
Trade and other receivables 22,738 16,331 114,537
Trade investments 4,537,810 2,258,694 1,916,398
Cash and cash equivalents 118,078 36,429 60,167
------------ ------------ --------------
Total current assets 4,678,626 2,311,454 2,091,102
------------ ------------ --------------
Current liabilities
Trade and other payables (120,672) (44,504) (66,003)
------------ ------------ --------------
Total current liabilities (120,672) (44,504) (66,003)
------------ ------------ --------------
Net current assets 4,557,954 2,266,950 2,025,099
============ ============ ==============
Capital and reserves
Called up share capital 559,279 552,927 559,279
Share premium account 1,686,829 1,681,431 1,686,829
Profit and loss account 2,311,846 32,592 (221,009)
------------ ------------ --------------
Total equity shareholders'
funds 4,557,954 2,266,950 2,025,099
============ ============ ==============
Statement of Cash Flows
6 months 6 months Year ended
ended 31 ended 31 30 September
March 2020 March 2019 2019
Unaudited Unaudited Audited
GBP GBP GBP
Cash flows from operating activities
Operating profit 2,532,834 640,414 386,763
Net interest receivable 20 37 87
Share based payment charge - 40,500 52,250
Reversal of bad debt provision - (20,000) (20,000)
Decrease/(increase) in trade
and other receivables 91,800 39,660 (58,545)
Increase/(decrease) in trade
and other payables 54,669 (77,396) (5,897)
------------ ------------ --------------
Net cash flows from operating
activities 2,679,323 623,215 354,658
------------ ------------ --------------
Cash flows from investing activities
Purchase of current asset investments - - (47,000)
Sale of current asset investments 61,904 26,928 286,648
Profit on sale of current asset
investments (22,354) (10,908) (53,213)
Increase in investment provisions 86,103 133,086 383,612
Decrease in investment provisions (2,747,065) (889,741) (968,387)
------------ ------------ --------------
Net cash flows from investing
activities (2,621,412) (740,635) (398,340)
------------ ------------ --------------
Cash flows from financing activities
Proceeds from issue of shares - - -
Transaction costs of issue of - - -
shares
Loan repayment - - (50,000)
------------ ------------ --------------
Net cash flows from financing
activities - - (50,000)
------------ ------------ --------------
Net increase/(decrease) in cash
and cash equivalents 57,911 (117,420) (93,682)
Cash and cash equivalents at
beginning of period 60,167 153,849 153,849
------------ ------------ --------------
Cash and cash equivalents at
end of period 118,078 36,429 60,167
============ ============ ==============
Statement of Changes in Equity
Equity reserve Total Equity
attributable to
Share capital Share premium Profit and loss account shareholders
GBP GBP GBP GBP GBP
At 30 September 2018 539,649 1,654,209 2,500 (607,859) 1,588,499
============= ============= ============== ======================= ======================
Profit for the period - - - 640,451 640,451
------------- ------------- -------------- ----------------------- ----------------------
Total recognised income
and expenses for the
period - - - 640,451 640,451
Shares issued 13,278 27,222 - - 40,500
Equity component of
convertible loan - - (2,500) - (2,500)
Total contribution by
and distributions to
owners 13,278 27,222 (2,500) - 38,000
At 31 March 2019 552,927 1,681,431 - 32,592 2,266,950
============= ============= ============== ======================= ======================
At 30 September 2019 559,279 1,686,829 - (221,009) 2,025,099
============= ============= ============== ======================= ======================
Profit for the period - - - 2,532,854 2,532,854
Total recognised income
and expenses for the
period - - - 2,532,854 2,532,854
Shares issued - - - - -
Equity component of - - - - -
convertible loan
------------- ------------- -------------- ----------------------- ----------------------
Total contributions by - - - - -
and distributions to
owners
At 31 March 2020 559,279 1,686,829 - 2,311,846 4,557,954
============= ============= ============== ======================= ======================
Interim report notes
1. Interim report
The information relating to the six month periods to 31 March
2020 and 31 March 2019 is unaudited.
The information relating to the year ended 30 September 2019 is
extracted from the audited accounts of the Company which have been
filed at Companies House and on which the auditors issued an
unqualified audit report.
2. Basis of preparation
This report has 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. Although the information included herein does
not constitute statutory accounts within the meaning of section 435
of the Companies Act 2006, the accounting policies that have been
applied are consistent with those adopted for the statutory
accounts for the year ended 30 September 2019.
The Company will report again for the full year to 30 September
2020.
The Company's investments at 31 March 2020 are stated at the
lower of cost and net realisable value or the valuation adopted at
30 September 2019 or the current market value based on market
quoted prices at the close of business. The Chairman's statement
includes a valuation based on market quoted prices at 31 March
2020.
3. Profit per share
6 months 6 months Year ended
ended 31 ended 31 30 September
March 2020 March 2019 2019
Unaudited Unaudited Audited
GBP GBP GBP
Profit for the year: 2,532,854 640,451 386,850
------------- ------------- --------------
Weighted average number of
Ordinary shares of GBP0.01
in issue 55,927,832 54,460,957 55,057,197
Earnings per share - basic 4.53 pence 1.18 pence 0.70 pence
============= ============= ==============
Warrants in issue - 8,500,000 -
Weighted average number of
Diluted Ordinary shares of
GBP0.01 in issue 55,927,832 62,960,957 55,057,197
Earnings per share - diluted 4.53 pence 1.02 pence 0.70 pence
============= ============= ==============
Investment portfolio
Starvest now holds trade investments in the companies listed
below; of these the following companies comprised 99% of the
portfolio value as at 31 March 2020:
Exploration for oil in England,
* Alba Mineral Resources plc lead-zinc in Ireland, uranium in
Mauritania and graphite in Greenland
www.albamineralresources.com
Gold-silver production and exploration
* Ariana Resources plc in Turkey
www.arianaresources.com
Gold exploration in West Africa
* Cora Gold Limited www.coragold.com
Gold exploration in Australia
* Greatland Gold plc www.greatlandgold.com
Gold and copper exploration in Ethiopia
* Kefi Minerals plc and Saudi Arabia
www.kefi-minerals.com
Coal mining in Pakistan
* Oracle Coalfields plc www.oraclecoalfields.com
Other direct and indirect mineral exploration companies:
Oil and gas exploration in Bulgaria
* Block Energy plc (formerly Goldcrest Resources plc) www.goldcrestresourcesplc.com
Gold exploration in South America
* Minera IRL Limited www.minera-irl.com
Exploration for industrial minerals
* Sunrise Resources plc in United States, Finland, Australia
and Ireland
www.sunriseresourcesplc.com
Other investee companies are listed in the Company's 2019 annual
report available on request or from the Company web site -
www.starvest.co.uk
Copies of this interim report are available free of charge by
application in writing to the Company Secretary at the Company's
registered office, Salisbury House, London Wall, London EC2M 5PS,
by email to info@starvest.co.uk or from the Company's website -
www.starvest.co.uk
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries to:
Starvest PLC
Callum Baxter or Gemma Cryan 02077 696 876 or
info@starvest.co.uk
Grant Thornton UK LLP (Nomad)
Colin Aaronson, Harrison Clarke or Seamus Fricker 02073 835
100
SI Capital Ltd (Broker)
Nick Emerson or 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
IR PPUUWAUPUGAM
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