Licence PL001, Funding and Publication of Results

RNS Number : 1629Q

Argos Resources Ltd

24 June 2022

 

This announcement contains inside information

ARGOS RESOURCES LIMITED

("Argos", the "Group" or "the Company")

Update on Licence PL001, Funding and Publication of Results

Argos Resources Limited (AIM: ARG.L), the Falkland Islands based exploration company focused on the North Falkland Basin, is pleased to provide an update on the Company's PL 001 Licence, Argos' funding position and the anticipated timing for publication of the Company's financial results for the year ended 31 December 2021.

Licence PL001

Argos announced on 11 April 2022 t hat the Falkland Islands Government ("FIG") had extended the second term of the Company's PL001 Licence from 1 May 2022 to 31 December 2022, with no additional work commitments. 

The Company is currently in discussions with FIG regarding the terms on which a further extension of the PL001 Licence may be granted, to enable Argos to undertake the necessary technical work to progress the project. The Board expects that any extension beyond 31 December 2022 would be subject to certain technical commitments from the Company, which would require Argos to raise additional capital.

Update on Funding Position

Mr Ian Thomson, OBE, Chairman of Argos, has agreed to provide a loan facility of up to £110,000 to the Company (the "Loan Facility"). Drawdown from the Loan Facility can be made at the Company's request. The Loan Facility is available until 31 January 2023 with no interest accruing on borrowed amounts. If the Company carries out a share issue by way of fund-raising, the lender shall be entitled to convert the loan then outstanding into new shares issued on the same terms as those available to other participants in the issue.

The Loan Facility, along with the Company's existing resources of £100,000 as of 24 June 2022, will provide the Company with sufficient working capital until July 2023.

The provision of the Loan Facility is deemed to be a related party transaction for the purposes of the AIM Rules for Companies. The Independent Directors consider, having consulted with the Company's nominated adviser, Cenkos Securities plc, that the terms of the Loan Facility are fair and reasonable insofar as the Shareholders are concerned.

Publication of Results

Alongside the provision of the Loan Facility, the Company has been in discussions with its auditors to ascertain the basis on which its annual audited accounts for the year ended 31 December 2021 ("FY21 Accounts") should be prepared.  It is now expected that the FY21 Accounts will be prepared on a going concern basis as, in the opinion of the directors, there is a reasonable expectation that the Group and the Company will continue in operational existence for the foreseeable future.

Under Rule 19 of the AIM Rules for Companies, an AIM company must publish annual audited accounts which must be sent to its shareholders without delay and in any event not later than six months after the end of the financial year to which they relate.

As a result of the Company's extended discussions regarding its funding position, and the associated impact on the timing for the FY21 Accounts, the Company will not be in a position to publish its 2021 Financial Statements by the deadline of 30 June 2022. Consequently, the Company's shares will be temporarily suspended from trading on AIM as of 7.30 a.m. on 1 July 2022, pending publication of the FY21 Accounts. The Directors are endeavouring to complete the procedures required for audit completion and will publish the FY21 Accounts as soon as possible.

Notwithstanding the temporary suspension of trading in the Company's shares, the Company will continue to make announcements as and when there are any developments that require to be notified under the AIM Rules for Companies.

For further information:

Argos Resources Ltd ([phone])

www.argosresources.com

Ian Thomson, Chairman

John Hogan, Managing Director

Cenkos Securities plc (Nomad & Broker)

Derrick Lee ([phone])

Neil McDonald ([phone])

Notes to Editors

Argos Resources is an oil and gas exploration company  listed on AIM and based in the Falkland Islands. The Company's principal asset is a 100 per cent interest in production licence PL001 covering an area of approximately 1,126 square kilometres in the North Falkland Basin.

 A 3D seismic survey has been acquired over the entire licence area. The quality of the seismic data acquired is excellent and has led to the identification of 52 prospects and 40 leads within the licence area. An independent Competent Person's Report attributes to these prospects a total unrisked potential of 3.1 billion barrels of prospective recoverable resource in the most likely case and up to 10.4 billion barrels in the upside case.

The licence area is immediately adjacent to the giant Sea Lion oil discovery which contains over 500 million barrels of recoverable resource. A decision to proceed with the development of the Sea Lion field is pending.

The Company has a strong and experienced management team with extensive experience in both the oil and   gas   industry   and the Falkland Islands.

This statement has been approved by John Hogan, Managing Director of Argos Resources and a qualified geologist with over 40 years of experience in the petroleum industry.

 

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