Final Results

RNS Number : 1357W

Alba Mineral Resources PLC

25 April 2016

 

25 April 2016

Alba Mineral Resources plc

("Alba" or "the Company")

Final Results for the year ended 30 November 2015

 

CHAIRMAN'S STATEMENT

The Board of Alba Mineral Resources plc (the "Company" or "Alba", and collectively with its Subsidiary Companies, the "Group") is pleased to report the results for the year ended 30 November 2015. They incorporate the results of its subsidiary companies Aurum Mineral Resources Limited ("AMR"), Mauritania Ventures Limited ("MVL") and Alba Mineral Resources Sweden AB ("Alba Sweden") (collectively the "Subsidiary Companies").

INTRODUCTION

Alba is an explorer with a commodity focus on oil & gas, graphite, uranium and base metals. Alba holds interests in the UK oil & gas exploration sector, plus hard rock exploration assets in Greenland (Graphite), Ireland (Base Metals) and Mauritania (Uranium).

The Group's overall technical and corporate strategy is to identify and acquire natural resource projects it believes to have good potential and to advance them expediently. This will be achieved by controlled design and execution of a cost-effective generative process utilising data acquisition, GIS data analysis and exploration programme planning, led by our internal technical team and where appropriate, through the support of external technical consultants. 

On 16 March 2016 Chade van Hatch resigned as the Company's Chief Financial Officer and Company Secretary.  I would like to take the opportunity to thank Chade for her contribution to the Alba Board and wish her well in her future career and also to welcome Manuel Lamboley to the Board as a Non-Executive Director.

 

REVIEW OF ACTIVITIES

Horse Hill

The Horse Hill-1 well ("HH-1") is located within onshore exploration licence PEDL 137, on the northern side of the Weald Basin near Gatwick Airport. Alba owns a 15% direct interest in Horse Hill Developments Limited ("HHDL"). HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin. The remaining 35% participating interests in the PEDL137 and PEDL246 licences are held by US-based Magellan Petroleum Corporation.

On 8 April 2015, the Company completed the acquisition of the 5% shareholding in HHDL held by Regency Mines Plc ("Regency") for a total cash consideration of £300,000. Additionally, on completion the Company paid the outstanding cash calls issued to Regency by HHDL, being a total of £60,000. During the period to 8 April 2015, a further cash call payment of £60,000 to HHDL was made by the Company to HHDL pursuant to the terms of the HHDL shareholders' agreement.

On 9 April 2015, US-based Nutech estimated that the HH-1 well indicates a total OIP of 158 mmbo per square mile.  The amount excluded the previously reported Upper Portland Sandstone oil discovery.  Nutech's report stated that this OIP lies within a 653 feet aggregate net pay section, primarily within three argillaceous (shale-rich) limestones and interbedded mudstones of the Kimmeridge Clay Formation, and also mudstones of the Oxford and Lias sections.  Nutech calculated that approximately 72% of the OIP, or 114 mmbo, lies within the shallower Upper Jurassic Kimmeridge interbedded limestone and mudstone sequence.

An independent study of the Portland Sandstone reservoir using petrophysics was conducted for HHDL by Xodus Group, an international energy consultancy based in the UK, and the results were published on 11 May 2015.  The results showed that the Upper Portland Sandstone conventional reservoir contains a "Best Estimate" (P50) gross STOIIP of 21.0 million barrels ("mmbbls") entirely within PEDL137 and encompasses both the HH-1 well and the historic CF-1 well.  This had previously been calculated at 12.8 mmbbls in December 2014.

On 13 May 2015, the Company announced that it had been informed by HHDL that the exploration stage of the PEDL137 licence had been extended by the Oil & Gas Authority ("OGA", formerly the Department of Energy & Climate Change) to 30 September 2016. The exploration stage of the PEDL246 licence expires on 30 June 2019.

On 5 June 2015 Schlumberger (one of the leading suppliers of technology, integrated project management and information solutions to customers working in the global oil and gas industry), acting in an advisory capacity to HHDL, independently evaluated the unconventional oil potential of HH-1 and estimated approximately 271 mmbbls per square mile for the Jurassic section.  A total of 255 mmbbls gross OIP was estimated to lie within the low-porosity limestone and mudstone plays of the Kimmeridge, Oxford Clay and Lias (Upper Portland Sandstone discovery). 

Nutech provided an additional independent report of the estimated OIIP contained within the Horse Hill licences (PEDL 137 and PEDL 246) on 18 June 2015.  The new study calculated a best estimate (P50) OIIP of 9,245 mmbbls within the Kimmeridge, Oxford and Lias formations, with a calculated best estimate total Kimmeridge OIP of 5,230 mmbbls.  The calculated OIIP figures estimated by Nutech do not include the OIIP for the Portland Sandstones.  It is stressed that these values should not be construed as contingent resources or reserves.

On 26 August 2015, Schlumberger provided HHDL with an independent report of the estimated oil in place contained within the HHDL Licence Area. The calculated gross OIIP at Horse Hill was 10,993 mmbbls, and is composed of 8,262 mmbbls within tight limestones and shales of the Kimmeridge Clay Formation, and 2,731 mmbbls associated with the shales of the Oxford Clay and Lias Formations.

On 23 October 2015 the Company announced the completion of the acquisition from Angus Energy Limited ("Angus") of:

·     5 per cent of the issued share capital of HHDL, being 50 fully paid ordinary shares in HHDL (the "Sale Shares"). Alba has accordingly increased its interest in HHDL from 10% to 15%; and

·     an option to farm into 5 per cent of Production Licence 235 ("PEDL 235"), which comprises the producing onshore Brockham Oil Field ("Brockham") (the "Brockham Option"). The Brockham Option shall be on a "two for one promote" basis, such that if Alba elects to exercise the Brockham Option, it must fund 10 per cent of the cost of the next well (from spudding to first oil) in order to earn its 5 per cent interest.

The Company settled the consideration payable by Alba for the Sale Shares and the Brockham Option as follows:

·     by the issue of 137,729,178 new ordinary shares in Alba;

·     by the payment of £365,000 in cash; and

·     by the issue of 45,909,726 warrants to subscribe for new ordinary shares in Alba at a price of 0.5p per share. These warrants are exercisable on or before the date falling 18 months from Completion.

Greenland Graphite

On 6 October 2015 the Company announced the signing of an agreement with Artemis Resources Ltd ("Artemis"), an Australian Securities Exchange quoted company (ASX:ARV), which grants Alba an option to earn up to 70% of a graphite project near Nanortalik in southern Greenland ("Agreement"). The licence area comprises the historic Amitsoq graphite mine and is prospective not only for graphite but also for gold, copper, nickel and platinum group elements.

Alba is in the process of re-negotiating its earn-in terms with Artemis under the agreement announced on 6 October 2015, and a further announcement on this will be made in due course.

On 30 November 2015 the Company announced that a field visit had been completed at the Amitsoq graphite project. Samples taken from historic workings at the Amitsoq mine were subjected to graphitic carbon analysis and a petrographic determination of flake size by the British Geological Survey ("BGS") at their laboratory in Keyworth, near Nottingham.

Several of the samples were dispatched to an independent assay laboratory to determine the presence of deleterious elements and to quantify the presence of sulphides.

Quotations are currently being reviewed for a high-resolution modern airborne electromagnetic (EM) and magnetic survey to identify graphitic horizons and sulphide bodies associated with ultramafic intrusions.  It is anticipated that this work will commence in the summer of 2016.  Follow-up work, if warranted, will consist of diamond drilling to provide a resource estimation.

Ireland

The exploration licence in the Limerick Basin is highly prospective for zinc, lead and silver and is only 10 km away from and part of the same target unit as the Pallas Green zinc discovery.  The Board intends to make an application to renew this licence.  It is intended that when the renewal is granted, the Company will initially undertake a geophysical survey, either Gravity or Induced Polarisation or both to help better understand the structural elements of the licence area that may be controlling the known sulphide mineralisation that is present within the licence boundaries.

Mauritania

The Group is in the process of submitting a new application to the Mauritanian Authorities to take out a new permit over a reduced area within the original permit area, which includes the centre of the previously discovered and announced high-tenor uranium anomalies. Alba and its joint venture partner will then consider their options with regards to funding the next stage of exploration.

The continued development of the Mauritania exploration activities is dependent on the grant of a new licence. An emphasis of matter has been included in the auditor's report on this point.

Other Development Projects

Alba continues to review and discuss other opportunities, which have been brought to us by contacts that may have value-enhancing potential.

Corporate

Our financial activities in the year have been primarily focused on securing additional funding for the Group.

On 16 February 2015 the Group raised £270,000 (before expenses) through the subscription of 108,000,000 new ordinary shares at a subscription price of 0.25 pence per share.

On 16 March 2015 the Group raised a further £500,000 (before expenses) through the subscription of 200,000,000 new ordinary shares at a price of 0.25 pence per ordinary share. 

On 1 May 2015, the Company announced that it issued 18,000,000 new ordinary shares at a price of 0.50 pence per ordinary share in settlement of fees for professional services.

On 12 June 2015 the Group raised a further £355,000 (before expenses) through the subscription of 71,000,000 new ordinary shares at a price of 0.50 pence per ordinary share.

On 19 October 2015 the Group raised a further £385,000 (before expenses) through the subscription of 154,000,000 new ordinary shares at a price of 0.25 pence per ordinary share. The Company also granted to the subscribers in the Placing warrants to subscribe for further ordinary shares on the basis of one ordinary share for every three new ordinary shares subscribed, resulting in the issue of warrants to subscribe for a total of 51,333,331 Ordinary Shares to the subscribers. The new warrants are exercisable at a price of 0.50 pence per share within 18 months following the date of grant.

On 5 November 2015 the Group raised a further £160,000 (before expenses) through the issue of 64,000,000 new ordinary shares at a price of 0.25 pence per ordinary share. The Company also granted to subscribers in the Placing warrants to subscribe for further ordinary shares on the basis of one ordinary share for every three new ordinary shares subscribed, resulting in the issue to the subscribers of warrants to subscribe for a total of 21,333,333 Ordinary Shares. The new warrants are exercisable at a price of 0.5 pence per share within 18 months following the date of grant.

EVENTS AFTER THE REPORTING PERIOD

A general meeting was held on 16 December 2015 seeking shareholder approval to grant additional authorities to issue new ordinary shares, at which all resolutions were unanimously passed.

On 4 January 2016 the Company announced that it had been notified by Horse Hill Developments Limited that the Oil and Gas Authority had granted consent for an extended flow test over three separate zones in the Horse Hill-1 oil discovery well. On 4 January 2016 Alba announced that all necessary permissions had been granted in order for the Horse Hill-1 well to be flow tested.  On 8 February 2016 Alba announced that flow tests had commenced.  The final flow test results were announced by Alba on 21 March 2016.  The final total aggregate stable dry oil flow rate from two Kimmeridge limestones plus the overlying Portland sandstone was measured at 1688 bopd.

On 4 February 2016 the Company announced that it had completed an iron oxide (FeO) alteration remote sensing (satellite) study on the Amitsoq graphite project (the "Project") near Nanortalik in southern Greenland. The interpreted results are highly encouraging and provide numerous target areas for follow-up ground work and geophysics, highlighted as follows:

·     Numerous and continuous graphitic horizons suggested along strike and proximal to the Amitsoq graphite mine.

·     FeO anomalies are coincident with known graphite occurrences at the former Amitsoq graphite mine.

·     Two zones contain multiple lenses of interpreted bedded graphite along strike 2.5 km and 5.8 km to the northeast of the Amitsoq mine.

·     Additional FeO anomalies are interpreted to be favourable targets for platinum group metals, orogenic lode gold and intrusion related copper-zinc mineralization.

·     Anomalies identified with geology similar to economic gold mineralization at the nearby Nalunaq gold mine (circa 340,000 ounces of gold produced to date).

OUTLOOK

During the past financial year, the Alba Board, determined to increase the Company's exposure to the highly prospective Horse Hill oil & gas project, acquired two further stakes in the project, giving it a 15 per cent interest in HHDL, and making it HHDL's second largest shareholder.  In addition, we identified and acquired an option over what we believe to be a highly prospective graphite project in Greenland.  These acquisitions, and Alba's funding of its commitments both at Horse Hill and its other projects, were achieved by a series of successful recent capital raisings completed by the Company during the year, despite what has been a consistently challenging investment market.  This is a testament to the dedication and resourcefulness of the management team at Alba.  In the coming year, your Board will continue to seek out further opportunities to build on the solid foundations established during the past financial year.

George Frangeskides

Chairman

Glossary of technical terms:

argillaceous limestone	a limestone containing a significant proportion of clay minerals
clastic	rocks composed of broken pieces of older rocks
core	a cylindrical sample of rock, obtained during drilling of wells and removed for inspection at surface
discovery	a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons
electric logs	tools used within the wellbore to measure the rock and fluid properties of surrounding rock formations
fault block	a very large subsurface block of rock, created by tectonic and localised stresses
limestone	a carbonate sedimentary rock predominantly composed of calcite of organic, chemical or detrital origin. Minor amounts of dolomite, chert and clay are common in limestones. Chalk is a form of fine-grained limestone
Geographic Information System or Geographical Information System (GIS)	a system designed to capture, store, manipulate, analyse, manage, and present all types of spatial or geographical data
MICP	mercury injection capillary pressure, a measure of rock porosity and permeability, from rock cores or cuttings, and a calibration of porosity logs
mudstone	an extremely fine-grained sedimentary rock consisting of a mixture of clay and silt-sized particles
oil initially in place ("OIIP") or oil in place ("OIP")	the quantity of oil or petroleum that is estimated to exist originally in naturally occurring accumulations before any extraction or production
petrophysical evaluation	the study of physical and chemical rock properties and their interactions with fluids; studies typically use well logs, well cores and seismic data
recoverable resources	those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations
reservoir	a subsurface rock formation containing an individual natural accumulation of moveable petroleum that is confined by impermeable rock/formations
sandstone	a clastic sedimentary rock whose grains are predominantly sand-sized. The term is commonly used to imply consolidated sand or a rock made of predominantly quartz sand
seismic	use of sound waves generated by controlled explosions to ascertain the nature of the subsurface geological structures.  2D seismic records a cross-section through the subsurface
STOIIP	stock tank oil initially in place
TVDSS	true vertical depth below a subsea datum
XRD	x-ray diffraction; scattering of x-rays by the atoms of a rock or crystal that gives information on the structure, composition and identity of the rock or crystal

Enquiries:

Alba Mineral Resources plc

Michael Nott, CEO                                           [phone]

Cairn Financial Advisers LLP

James Caithie / Liam Murray                      [phone]

Dowgate Capital Stockbrokers Limited

Jason Robertson / Neil Badger                  [phone]

Alba Mineral Resources plc

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 NOVEMBER 2015

		2015	2014
		£	£
Revenue		-	-
Cost of sales		-	-
Gross loss		-	-
Administrative expenses		(292,705)	(235,751)
Operating loss		(292,705)	(235,751)
Finance costs		-	-
Loss before tax		(292,705)	(235,751)
Taxation		-	-
Loss for the year		(292,705)	(235,751)
Attributable to:
Equity holders of the parent		(291,563)	(234,001)
Non-controlling interests		(1,142)	(1,750)
		(292,705)	(235,751)
Loss per ordinary share
Basic and diluted		(0.04) pence	(0.07) pence

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 NOVEMBER 2015

		2015	2014
		£	£
Loss after tax		(292,705)	(235,751)
Foreign exchange movements		5,204	49,688
Total comprehensive loss		(287,501)	(186,063)
Total comprehensive loss attributable to:
Equity holders of the parent		(286,359)	(184,313)
Non-controlling interests		(1,142)	(1,750)
		(287,501)	(186,063)

Alba Mineral Resources plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 NOVEMBER 2015

		2015	2014
		£	£
Non-current assets
Intangible fixed assets		662,874	611,265
Investments		1,838,222	365,000
Total non-current assets		2,501,096	976,265
Current assets
Trade and other receivables		96,942	16,509
Cash and cash equivalents		288,494	30,676
Total current assets		385,436	47,185
Current liabilities
Trade and other payables		80,000	50,355
Financial liabilities		254,073	254,073
Total current liabilities		334,073	304,428
Net assets		2,552,459	719,022
Capital and reserves
Called up share capital		1,993,171	1,232,178
Share premium account		2,586,286	1,532,373
Warrant reserve		446,291	129,851
Retained losses		(2,883,856)	(2,592,293)
Merger reserve		200,000	200,000
Foreign currency reserve		183,969	189,173
Equity attributable to equity holders of the parent		2,525,861	691,282
Non-controlling interests		26,598	27,740
Total equity		2,552,459	719,022

Alba Mineral Resources plc

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 NOVEMBER 2015

		2015	2014
		£	£
Cash flows from operating activities
Operating loss		(292,705)	(235,751)
Foreign exchange revaluation adjustment		(5,204)	52,152
Decrease in creditors		(13,599)	(5,041)
Increase / (decrease) in debtors		(88,190)	4,791
Net cash used in operating activities		(399,698)	(183,849)
Cash flows from investing activities
Payments for deferred exploration expenditure		(51,609)	(7,773)
Investments		(882,690)	(365,000)
Net cash used in investing activities		(934,299)	(372,773)
Cash flows from financing activities
Net proceeds from the issue of shares and warrants		1,654,315	601,466
Costs of issue		(62,500)	(28,866)
Proceeds from borrowings		-	20,250
Net cash generated from financing activities		1,591,815	587,082
Net increase in cash and cash equivalents		257,818	30,460
Cash and cash equivalents at beginning of period		30,676	216
Cash and cash equivalents at end of year		288,494	30,676

Non-cash transactions

Significant non cash transactions related to the purchase of investments of £539,532 which was settled by way of the issue of shares and warrants. There were no significant non-cash transactions in 2014.

NOTES

1.            Basis of preparation

The financial information set out in this announcement does not comprise the Group's statutory accounts for the year ended 30 November 2015 or 30 November 2014. The financial information has been extracted from the statutory accounts of the Company for the year ended 30 November 2015 and 30 November 2014. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006. The auditor's report for the year ended 30 November 2014 did include emphasis of matter paragraphs relating to uncertainty as to whether (a) the Group can raise sufficient funds to continue to develop the Group's exploration assets; (b) the Mauritania permit will be renewed beyond May 2015; (c) the Limerick licence that expires in May 2016 will be renewed; and (d) the value of the parent company's investment in its subsidiaries is supported by exploration activities. The auditor's report for the year ended 30 November 2015 did include emphasis of matter paragraphs relating to uncertainty as to whether (a) the Group can raise sufficient funds to continue to develop the Group's exploration assets; (b) the Mauritania permit will be renewed beyond May 2016; (c) the Limerick licence that expires in May 2016 will be renewed; and (d) the value of the parent company's investment in its subsidiaries is supported by exploration activities.

2.            Going Concern

Further to the fund raising completed after the year end, after making enquiries, the directors have a reasonable expectation that the Group has adequate resources to meet its current committed expenditure and recurring outgoings for the foreseeable future, although the current level of funding is not sufficient to enable the Company to significantly develop the Group's exploration assets. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements

3.            Continuation of exploration activities

The Group is dependent on securing further funds to continue to develop the Group's exploration assets which have a carrying value of £662,874 and which support the value of the Company's investment in its subsidiaries, which have a carrying value of £1,445,008. If it is not possible to raise sufficient funds, the carrying value of the exploration assets of the Group and the investment of the Company in its subsidiaries are likely to be impaired.

4.            Taxation

No charge for corporation tax for the period has been made due to the expected tax losses available.

5.            Earnings per share

Basic loss per share is calculated by dividing the loss attributed to ordinary shareholders of £291,563 (2014: £234,001 loss) by the weighted average number of shares of 692,258,595 (2014: 316,438,563) in issue during the year. The diluted earnings per share calculation is identical to that used for basic loss per share as warrants are "out of the money" and not considered dilutive.

6.            Report and accounts

The statutory accounts for the year ended 30 November 2014 have been delivered to the Registrar of Companies, whereas those for the year ended 30 November 2015 will be sent to shareholders of the Company in due course and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The report and accounts will also be made available on the Company's website: www.albamineralresources.com

 

END

 

 

FR EAKLAADXKEFF