Half Yearly Report

RNS Number : 2874A

Regency Mines PLC

29 March 2012

 



Regency Mines PLC

("Regency" or the "Company")

Half-yearly report for the period ended 31 December 2011

29 March 2012

Regency Mines plc ("Regency" or the "Company") is a  mineral exploration and development company and mining financier focused on exploring areas of copper and nickel potential in Western Australia, Queensland, and Papua New Guinea, announces its unaudited half-yearly results for the six months ended 31 December 2011.

Chairman's statement

In the next few weeks the Company expects to declare a maiden Mineral Resource at its Mambare nickel-cobalt project in Papua New Guinea, following a very successful drill programme which identified high grades, thick mineralised zones, and continuity of mineralisation. This will be the most significant milestone in the Company's short life, and the six month period for which we now report was the preparatory period in which the key exploration on this project was carried out.

The financial results do not tell this story; as Regency is an exploration company that may not be surprising. They do however track the changes in valuation of the two principal assets of the Company; its associate investment in Red Rock Resources plc ("Red Rock") and its investment in Oro Nickel Ltd (formerly Canopus No 83 Ltd)("Oro Nickel"), which owns the Mambare project.

The value of Investments in associates at 31 December 2011 showed a decrease to £3,517,654 from £8,473,996 at 31 December 2010. This reflected the attributable percentage of Red Rock's Total comprehensive income between these dates, which fell primarily because of a fall in the value of Red Rock's investment in Jupiter Mines Ltd in Australia (ASX:JMS) ("Jupiter"), whose share price fell from A$ 0.765 to A$ 0.27 over the year. Red Rock has stated that it expects these falls to be reversed as Jupiter moves towards production at its Tshipi mine.

Exploration assets over the same period increased from £2,439,012 to £4,143,683 as the costs of the drill programme carried out in the second half of the year were capitalised. Oro Nickel continued to be accounted for as a wholly owned subsidiary during the period.

As a result mainly of these two factors the Total Equity of the Company declined from £13,231,248 at the end of December 2010 to £11,440,645 at 31 December 2011.

Regency showed a loss before tax of £1,235,969 for the six months to 31 December 2011, which included a share in the loss of Red Rock.

Since the period end there has been a subsequent event of significance. On 26 January 2012 the formalities associated with the setting up of the joint venture between Regency and Direct Nickel Pty Ltd ("DNi") were completed, and Oro Nickel (Vanuatu) became the 50 per cent owned holding company for Regency's interest in Oro Nickel and in a licence to the DNi nickel treatment technology.  We believe that this technology has the potential to transform the nickel market.

Besides the Mineral Resource to JORC standards we expect to be declared at Mambare shortly, we anticipate the completion of DNi's planned 2012 listing on the Australian Stock Exchange. As a substantial shareholder in DNi we look forward to this, both as increasing the liquidity of our asset base, and in enabling DNi to develop more rapidly.

Our Australian exploration will test a number of key targets this year, and we currently await the results of some promising drilling recently carried out at our sulphide discovery at Pyramid Lake in Western Australia.

I wrote four months ago in the Annual Report for the year to 30 June 2011 that "we expect to look back in a year's time and describe this year as one that was transformative in the history of the company".  There is no reason for shading or amending that statement today. The transformation is well under way.

Andrew Bell

Executive Chairman

29 March 2012

Enquiries:

Andrew Bell	0207 402 4580 or 07766 474849	Regency Mines PLC	Chairman
Sandra Spencer	0207 402 4580 or 07757 660 798	Regency Mines PLC	Public and Investor Relations
David Porter/Philip Davies	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

Updates on the Company's activities are regularly posted on its website, www.regency-mines.com.

Consolidated statement of financial position

as at 31 December 2011

		31 December 2011		31 December 2010		30 June 2011
		Unaudited £		Unaudited £		Audited £
ASSETS
Non current assets
Property plant and equipment		150,527		35,758		169,211
Investments in associates		3,517,654		8,473,996		5,495,296
Goodwill		56,460		47,961		54,034
Available for sale financial assets		5,387,568		4,412,034		6,113,440
Exploration assets		4,143,683		2,439,012		3,119,718
Total non current assets		13,255,892		15,408,761		14,951,699
Current assets
Cash and cash equivalents		150,769		449,054		1,165,912
Trade and other receivables		876,847		813,824		1,035,885
Total current assets		1,027,616		1,262,878		2,201,797
TOTAL ASSETS		14,283,508		16,671,639		17,153,496
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital		639,849		543,387		611,952
Share premium account		11,671,181		8,069,862		11,248,428
Share based payment reserve		172,744		174,915		172,744
Other reserves		(235,841)		4,074,392		1,437,564
Retained earnings		(807,288)		368,692		667,360
Total Equity		11,440,645		13,231,248		14,138,048
LIABILITIES
Current liabilities
Trade and other payables		1,002,062		208,622		826,269
Short term borrowings		1,125,619		1,120,330		2,181,229
Total current liabilities		2,127,681		1,328,952		3,007,498
Non current liabilities
Long term borrowings		707,532		-		-
Deferred tax liabilities		7,650		2,111,439		7,950
Total non current liabilities		715,182		2,111,439		7,950
TOTAL EQUITY AND LIABILITIES		14,283,508		16,671,639		17,153,496

The accompanying notes form an integral part of these financial statements.

Consolidated statement of income

for the period ended 31 December 2011

	Notes	6 months to 31 December 2011		6 months to 31 December 2010
		Unaudited £		Unaudited £
Gain on dilution of interest in associate		9,988		641,172
Impairment of available for sale investment		(104,753)		(25,755)
Exploration expenses		(172,746)		(4,132)
Administrative expenses		(288,832)		(230,318)
Share of (losses)/profit of associates		(625,878)		2,154,449
Finance costs (net)		(53,748)		(827)
(Loss)/profit for the period before taxation		(1,235,969)		2,534,589
Tax expense		(238,679)		(688,100)
(Loss)/profit for the period attributable to owners of parent		(1,474,648)		1,846,489
Earnings per share
(Loss)/earnings per share - basic	3	(0.24) pence		0.39 pence
(Loss)/earnings per share - diluted	3	(0.24) pence		0.37 pence

All of the operations are considered to be continuing.

The accompanying notes form an integral part of these financial statements.

Consolidated statement of comprehensive income

for the period ended 31 December 2011

		6 months to 31 December 2011		6 months to 31 December 2010
		Unaudited £		Unaudited £
(Loss)/profit for the period		(1,474,648)		1,846,489
Revaluation of available for sale investments		(682,038)		1,007,348
Deferred taxation on revaluation of available for sale investments		93,598		(271,984)
Group's share of associates' other comprehensive (loss)/income		(1,361,752)		4,264,279
Deferred tax on associates		145,381		(1,151,355)
Unrealised foreign currency gain arising upon retranslation of foreign operations		131,406		162,470
Total comprehensive (loss)/income for the period		(3,148,053)		5,857,247

The accompanying notes form an integral part of these financial statements.

Consolidated statement of changes in equity

for the period ended 31 December 2011

The movements in equity during the period were as follows:

	Share capital	Share premium account	Retained earnings	Share based payment reserve	Other reserves	Total equity
	£	£	£	£	£	£
As at 30 June 2010	427,882	4,755,071	(1,477,797)	174,915	63,634	3,943,705
Changes in equity for 2010
Total comprehensive income for the period	-	-	1,846,489	-	4,010,758	5,857,247
Transactions with owners
Issue of shares	115,505	3,376,616	-	-	-	3,492,121
Share issue and fundraising costs	-	(61,825)	-	-	-	(61,825)
Total Transactions with owners	115,505	3,314,791	-	-	-	3,430,296
As at 31 December 2010	543,387	8,069,862	368,692	174,915	4,074,392	13,231,248
As at 30 June 2011	611,952	11,248,428	667,360	172,744	1,437,564	14,138,048
Changes in equity for 2011
Total comprehensive loss for the period	-	-	(1,474,648)	-	(1,673,405)	(3,148,053)
Transactions with owners
Issue of shares	27,897	472,753	-	-	-	500,650
Share issue and fundraising costs	-	(50,000)	-	-	-	(50,000)
Total Transactions with owners	27,897	422,753	-	-	-	450,650
As at 31 December 2011	639,849	11,671,181	(807,288)	172,744	(235,841)	11,440,645

	Available for sale trade investments reserve	Associate investments reserve	Foreign currency translation reserve	Consolidation reserve	Total other reserves
	£	£	£	£	£
As at 30 June 2010	(211,514)	(48,874)	171,101	152,921	63,634
Changes in equity for 2010
Total comprehensive income for the period	735,364	3,112,924	162,470	-	4,010,758
As at 31 December 2010	523,850	3,064,050	333,571	152,921	4,074,392
As at 30 June 2011	360,740	416,355	507,548	152,921	1,437,564
Changes in equity for 2011
Total comprehensive income/(loss) for the period	(588,440)	(1,216,371)	131,406	-	(1,673,405)
As at 31 December 2011	(227,700)	(800,016)	638,954	152,921	(235,841)

Consolidated statement of cash flows

for the period ended 31 December 2011

		6 months to 31 December 2011		6 months to 31 December 2010
		Unaudited £		Unaudited £
Cash flows from operating activities
(Loss)/Profit before taxation		(1,235,969)		2,534,589
Decrease/(increase) in receivables		159,038		(510,036)
Increase/(decrease) in payables		175,793		(132,831)
Share of losses/(profit) in associates		625,878		(2,154,449)
Interest receivable		(12,962)		(4)
Interest payable		30,351		831
Exploration expenses		-		4,132
Impairment of exploration properties		164,116		-
Currency adjustments		35,167		(14,555)
Impairment of available for sale investment		104,753		25,755
Gain on dilution of interest in associates		(9,988)		(641,172)
Loss on disposal of fixed assets		717		-
Depreciation		16,223		6,859
Net cash flows from operations		53,117		(880,881)
Cash flows from investing activities
Interest received		12,962		4
Interest paid		(30,351)		(831)
Payments to acquire available for sale investments		(60,919)		(3,017,857)
Exploration payments		(1,022,776)		(218,715)
Payments to acquire property plant and equipment		(11,395)		(14,120)
Net cash flows from investing activities		(1,112,479)		(3,251,519)
Cash flows from financing activities
Proceeds from issue of shares		500,650		3,492,121
Transaction costs of issue of shares		(50,000)		(61,825)
(Repayment)/proceeds of new borrowings		(406,431)		1,120,330
Net cash flows from financing activities		44,219		4,550,626
Net (decrease)/increase in cash and cash equivalents		(1,015,143)		418,226
Cash and cash equivalents at the beginning of period		1,165,912		30,828
Cash and cash equivalents at end of period		150,769		449,054

Half-yearly report notes

for the period ended 31 December 2011

1	Company and Group

As at 30 June 2011 and 31 December 2011 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively.

The Company will report again for the year ending 30 June 2012. The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2011 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2011, upon which the auditors gave an unqualified audit report which did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

2	Accounting Polices

Basis of preparation

The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting.'  The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2011, which have been prepared in accordance with IFRS.

3	Earnings per share	6 months to  31 December  2011		6 months to  31 December  2010
		£		£

	These have been calculated on (loss)/profit for the period after taxation of:	(1,474,648)		1,846,489
	Weighted average number of Ordinary shares of £0.001 in issue	616,769,746		475,087,544
	(Loss)/earnings per share - basic	(0.24) pence		0.39 pence
	Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options	616,769,746		503,962,544
	(Loss)/earnings per share fully diluted	(0.24) pence		0.37 pence

The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows:

		2011		2010
		Number		Number
	Earnings per share denominator	616,769,746		475,087,544
	Weighted average number of exercisable share options	-		28,875,000
	Diluted earnings per share denominator	616,769,746		503,962,544

Half-yearly report notes

for the period ended 31 December 2011, continued

4	Segmental analysis

Since the last annual financial statements the Group has not made any changes or additions to how it measures its segmental results.

		Investment in Red Rock Resources plc	Other investments	Australian exploration	Papua New Guinea exploration	Corporate and unallocated	Total
	For the 6 month period to 31 December 2011	£	£	£	£	£	£
	Revenue	-	-	-	-	-	-
	Result
	Segment results	(615,890)	(104,753)	(180,511)	(14,334)	(266,733)	(1,182,221)
	Loss before tax and finance costs						(1,182,221)
	Interest receivable						12,962
	Interest payable						(30,351)
	Finance costs						(36,359)
	Loss before taxation						(1,235,969)
	Taxation expense						(238,679)
	Consolidated loss for the period						(1,474,648)

		Investment in Red Rock Resources plc	Australian exploration	Corporate and unallocated	Total
	For the 6 month period to 31 December 2010	£	£	£	£
	Revenue	-	-	-	-
	Result
	Segment results	2,795,621	(13,926)	(246,279)	2,535,416
	Profit before tax and finance costs				2,535,416
	Interest receivable				4
	Interest payable				(831)
	Profit before taxation				2,534,589
	Taxation expense				(688,100)
	Consolidated profit for the period				1,846,489

A measure of total asset and liabilities for each segment is not readily available and so this information has not been presented.

Half-yearly report notes

for the period ended 31 December 2011, continued

5	Share Capital of the company

The authorised share capital and the called up and fully paid amounts were as follows:

	Authorised	Number		Nominal £
	At incorporation on 8 September 2004 and as at 31 December 2011, Ordinary shares of £0.001 each	10,000,000,000		10,000,000
	Called up, allotted and fully paid during the period
	As at 30 June 2011	611,951,585		611,952
	Issued 21 October 2011 at 1.96 pence per share	10,249,550		10,250
	Issued 22 December 2011 at 1.7 pence per share	17,647,059		17,647
	At 31 December 2011	639,848,194		639,849

6

Capital Management

Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market.  These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.

7       Subsequent events

On 15 June 2011, the Company announced a Purchase and Sale Agreement with Oro Nickel (Vanuatu), ('ONV'), a wholly owned subsidiary of DNi, under which the Company would sell its wholly owned Papua New Guinea subsidiary, Canopus No 83 Limited, which has changed its name to Oro Nickel Limited. The consideration would be the allotment to the Company of such number of fully paid Ordinary shares as will, on completion, represent 50% of ONV's outstanding share capital. The transfer of the shares of Oro Nickel Limited was completed on 26 January 2012.

 

END

 

 

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