2018 Financial Results

RNS Number : 1943T

Argos Resources Ltd

18 March 2019

 

18 March 2019

ARGOS RESOURCES LIMITED

("Argos" or "the Company")

2018 Financial Results

Highlights

Argos Resources Ltd (AIM: ARG.L), the Falkland Islands based exploration company focused on the North Falkland Basin, is pleased to announce its financial results for the year ended 31 December 2018.

·      US$406,000 profit (2017: US$118,000)

·      US$788,000 cash reserves at 31 December 2018 (2017: US$758,000)

·      The Working Interest in the Licence was transferred back to Argos in February 2019

·      The Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, for a period of 450 days after the notice to withdraw, until 27 December 2019 ·      The current Second Phase of the Licence expires in November 2019. Discussions about the licence term beyond that date are underway with the Falkland Islands Government

The full Annual Report and Consolidated Financial Statements can be read and downloaded from the Company website:  http://www.argosresources.com/news.php?page=regulatory-news 

Argos Resources Limited ([phone])

www.argosresources.com

Ian Thomson, Chairman

John Hogan, Managing Director

Cenkos Securities plc (Nomad & Broker)

Derrick Lee ([phone])

Neil McDonald ([phone])

Joint Chairman's statement and Managing Director's review

In October 2018 Noble Energy Falklands Limited ("Noble") and Edison International S.p.A ("Edison") served notice of their intention to withdraw from Production Licence PL001 (the Licence) in the North Falkland Basin, in which  Argos held a 5% Overriding Royalty Interest under a Participation Agreement.  The Licence covers an area of approximately 1,126 square kilometres in the North Falkland Basin.

On receipt of the notice Argos exercised the option under the Participation Agreement to have the Licence reassigned to it, which effectively terminated the Participation Agreement. Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, for a period of 450 days after the notice to withdraw. These payments, together with current cash balances of $788,000 at year end 2018, leave the Group adequately financed for at least twelve months beyond sign-off.

The current Second Phase of the Licence expires in November 2019 and discussions about the licence term beyond that date are underway with the Falkland Islands Government.  The Working Interest in the Licence was transferred back to Argos in February 2019 and the Company will seek to secure other partners to participate in its development.

Results and dividend

The results for the year and the Group's financial position as at the year-end are shown in the attached financial statements.  The directors have not recommended a dividend for the year (2017: $nil).

Business review

The Group has returned a profit for the year ended 31 December 2018 of $406,000 (2017: $118,000) which equates to a profit per share of 0.18 cents (2017: 0.05 cents). The increase in profit is due to the recognition of the full amount of the income due under the Participation agreement in the current year, as Argos are contractually entitled to the income under the termination clause of the agreement.

Administration expenses were $334,000 in 2018 compared to $329,000 in 2017.

Shareholders' equity has increased marginally from $29.46 million to $29.87 million in the year since 31 December 2017, as receipts under the Participation Agreement offset the administration costs leaving a small surplus.  Cash in the year increased from $758,000 to $788,000.

IFRS 9 requires the consideration of the risk attached intercompany loan between the parent and subsidiary companies.  This has resulted in an impairment provision in the accounts of the parent but it has no impact on the group accounts and does not affect the group's view of the outcome of the project.

Outlook for the next financial year

Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, which equates to $96,000 at the year-end exchange rate, for a period of 450 days after the notice to withdraw.

The Group is therefore fully funded for at least twelve months beyond sign-off.

Ian Thomson                                                                                                      John Hogan

Chairman                                                                                                            Managing Director

Consolidated statement of comprehensive income

Year ended 31 December 2018

			Year ended 31 December 2018 $'000	Year ended 31 December 2017 $'000
Other income			784	380
Administrative expenses			(334)	(329)
Finance income			4	1
Foreign exchange (losses)/gains			(48)	66
Profit for the year attributable to owners of the parent			406	118
Total comprehensive income for the period
attributable to owners of the parent			406	118
Basic and diluted earnings per share (cents)			0.18	0.05

Consolidated statement of financial position

As at 31 December 2018

			2018	2017
			$'000	$'000
Assets
Non-current assets
Exploration intangible assets and royalty interests			28,749	28,749
			28,749	28,749
Current assets
Other receivables			392	14
Cash and cash equivalents			788	758
Total current assets			1,180	772
Total assets			29,929	29,521
Liabilities
Current liabilities
Trade and other payables			61	59
Total liabilities			61	59
Total net assets			29,868	29,462
Capital and reserves attributable to
equity holders of the Company
Share capital			6,696	6,696
Share premium			30,071	30,071
Retained losses			(6,899)	(7,305)
Total shareholders' equity			29,868	29,462

Consolidated statement of cash flows

Year ended 31 December 2018

		Year ended 31 December 2018 $'000	Year ended 31 December 2017 $'000
Cash flows from operating activities
Profit for period before taxation		406	118
Adjustments for:
Finance income		(4)	(1)
Foreign exchange loss/(gain)		50	(67)
Net cash inflow from operating activities
before changes in working capital		452	50
Increase in other receivables		(378)	1
Increase/(decrease) in other payables		2	(89)
Net cash inflow/(outflow) from operating activities		76	(38)
Investing activities
Interest received		4	1
Net cash received from investment activities		4	1
Financing activities
Issue of ordinary shares (share options exercised)		-	27
Net cash from financing activities		-	27
Net increase/(decrease) in cash and cash equivalents		80	(10)
Cash and cash equivalents at beginning of period		758	701
Exchange (losses)/gains on cash and cash equivalents		(50)	67
Cash and cash equivalents at end of the year		788	758

Consolidated statement of changes in equity

Year ended 31 December 2018

		Share capital $'000	Share premium $'000	Retained losses $'000	Total equity $'000
At 1 January 2017		6,669	30,071	(7,423)	29,317
Total comprehensive income for the year		-	-	118	118
Shares issued (share options exercised)		27	-	-	27
At 31 December 2017 And 1 January 2018		6,696	30,071	(7,305)	29,462
Total comprehensive income for the year		-	-	406	406
At 31 December 2018		6,696	30,071	(6,899)	29,868

In preparing the financial information in this statement the Group, which consists of the Company Argos Resources Ltd, and its wholly owned subsidiary Argos Exploration Ltd, has applied policies in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").  The financial information has been prepared under the historical cost convention.

The financial information set out above does not constitute the company's statutory accounts for 2017 or 2018. Statutory accounts for 2017 and 2018 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2017 and 2018 were unqualified and did not draw attention to any matters by way of emphasis.

 

END

 

 

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