Interim Results and Exploration Update

RNS Number : 5881A

Papua Mining Plc

30 September 2015

 



30 September 2015

Papua Mining plc

("Papua" or "the Company")

Interim Results and Exploration Update

Highlights:

·     New licence (EL2322) has been granted adjacent to exciting EL2051 Mt Visi target.  Initial prospecting in the new area has confirmed this as a significant porphyry target area.  

·       Mt Visi target now elevated to highest priority status.

·     Two additional new Exploration Licences in New Britain EL1804 and EL2353 were also granted in September.

·     Next phase of drilling at the Tripela target has been postponed until market conditions improve

Papua Mining plc ("Papua" or "the Company") a UK company focused on the exploration for and if commercially feasible, development of gold and copper deposits in Papua New Guinea ("PNG") presents its Interim Results for the period ending 30 June 2015 and an Exploration Update.

Tripela Drilling

Since the commencement of our drilling programme in the Tripela area, we have completed 6,980 m of drilling.

Geological mapping and sampling in 2011 and 2012 discovered significant copper and molybdenum soil anomalism at Tripela. Float and outcrop sampling and geological mapping delineated numerous occurrences of in situ, high grade copper and molybdenum mineralisation with grades up to 29% copper returned from outcrop assays. Subsequent shallow diamond drilling confirmed the presence of zoned argillic and phyllic alteration which we believed to be marginal to a porphyry body. Follow up, deeper drilling intersected high temperature, inner propylitic alteration, characteristic of nearby porphyry development.

The next phase of drilling at Tripela will be designed to test for the projected porphyry core which has been interpreted from the drill results to date.  However, that drilling programme has been postponed until market conditions improve.

EL2051 and EL2322 Mt. Visi, New Britain

EL2322 was granted by the Minister for Mining in September  2015. 

In May 2014 we reported the discovery of an exciting new mineralised zone at Mt Visi in EL2051.  Reconnaissance mapping carried out by our regional exploration team in April/May 2014 had discovered significant outcrops of gold and copper.  We reported assay results for the zone in June 2014 with gold grades up to 35.5g/t in outcrop and copper grades up to 9.2% in float.  The strongest mineralisation was concentrated close to the eastern boundary of the licence. This prompted an application for the adjacent ground to the east in May 2014.  Ongoing exploration on EL2051 has confirmed the exciting prospectivity of the Mt Visi area with several strands of evidence pointing to the potential for porphyry mineralisation.

·     alteration mapping places the mineralisation discovered at the eastern edge of EL2051 in the propylitic halo of a porphyry system; spectrometry has identified dickite, a significant porphyry alteration mineral, as present in a number of the mineralised samples.

·     epidote alteration identified in a number of samples close to the licence boundary is consistent with proximity to a porphyry centre.

·     a study by the Centre for Excellence for Ore Deposits (CODES) on the epidote chemistry for a single epidote bearing sample from EL2051 concluded that the chemical characteristics of the epidote were consistent with a sample location approximately 1,500 metres from a large, mineralised porphyry centre.

·     satellite imagery examination shows a 400 metre wide circular feature within EL2322, some 500 metres east of the discovery zone in EL2051; this probably represents a large intrusive centre.

·     Initial prospecting in the newly granted licence EL2322 has identified copper mineralisation within porphyritic diorite outcrop with potassic porphyry alteration containing both biotite and magnetite.

The new EL2322 licence covers an area of 88 square kilometers. The evidence that we have gathered to date now suggests that the new tenement is likely to host a significant portion of the mineralised system.   In addition, another newly granted licence EL1804 lies immediately south of the original Mt Visi discovery on EL2051.  This is a large licence covering 974 square kilometres and will ensure that all of the prospective ground immediately surrounding the exciting Mt Visi target is now under licence to the Company.

Other Licences

In addition to the two new licences granted in the Mt Visi area, a third licence, EL2353, was granted to the Group in September 2015. E2353 covers an area of 283 square kilometers immediately east of the Mt Nakru area.  The ground incorporates the area previously covered by the lapsed EL 2146 which included the Ainbul target area east of the Tripela target.

By end-September 2015 three licences EL1730, EL1731 and EL2049 will have been relinquished or will have expired. Exploration results on these licences, each on New Britain island, have not warranted further exploration expenditure.

Interim Results

Our Income Statement for the six months ended 30 June, 2015 shows a loss of $747,535 compared to $881,221 in the same period last year. The loss of $747,535 includes $41,571 relating to share based payments on share options issued to certain staff in Papua New Guinea last year.   During the six month period to 30 June 2015, the Group expended in excess of $1,038,763 on its exploration programmes, all of it on our exploration licences in West New Britain.  This compares with $2,171,160 during the same period last year.   This decrease in exploration expenditure primarily reflects the completion in March of the second phase of drilling at Tripela and the curtailment of exploration and other expenditures during the current negative market conditions. 

Corporate

Clearly, the raising of new equity funds is critical for the survival of the Company. The Board has reluctantly decided that the much anticipated deep drilling at Tripela should now be postponed until market conditions improve. The focus of the Board is now on securing sufficient finance to carry out an intensive programme on the high priority Mt Visi target, including a shallow drilling programme. We are in discussion with a number of parties in relation to such funding and an announcement will be made as soon as the discussions are concluded.  This more focused, targeted programme has the potential to deliver very positive results in a much quicker timeframe and with far less dilution for existing shareholders, due to the shallower nature of the initial target and consequently lower drilling costs. 

In the meantime, and as a cost controlling measure, the employment contracts for the three management executives, Hugh McCullough, Kieran Harrington and Chris Muller have not been renewed.  However, each of the three has agreed to continue to assist the Company in its exploration programme at Mt Visi, on a contract basis initially, but in the expectation that a renewal of their contracts of employment may be possible after successful refinancing.  Hugh McCullough and Kieran Harrington continue to serve as directors of the Company.

Conclusion

We have applied a rigorous exploration methodology using all available and appropriate technologies to arrive at the point where we believe that we are close to the discovery of a porphyry body or bodies. However, following on from the exploration success at Mt Visi in 2014, the recent grant of the new licences, EL2322 and EL1804 in the area is hugely significant and presents an immediate opportunity to delineate a high priority shallow target at much lower cost to our shareholders than would be the case with the proposed Tripela drilling.

In conclusion, I would like to thank all our team in PNG  for their persistent effort under very trying climatic and logistical conditions.

Hugh McCullough, EurGeol., PGeo, Director of Papua, is a member of the Institute of Geologists of Ireland.  He is a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, March 2006, of the London Stock Exchange.  He has reviewed and approved the technical information contained in this announcement.

Enquiries:

Papua Mining plc
Hugh McCullough, Director	[phone]
Cenkos Securities - Nominated Adviser & Broker
Derrick Lee/ Nick Tulloch	[phone] [phone]
Square1 Consulting - Financial Public Relations
David Bick/Mark Longson	[phone]

Papua Mining plc

Interim Results for the six months ended 30 June 2015

Financial Review

Financial Highlights

	6 months to	6 months to	12 months to
	30 June	30 June	31 December
	2015	2014	2014
	US$	US$	US$
	(unaudited)	(unaudited)	(audited)
(Loss) attributable to equity owners	(747,535)	(881,221)	(2,792,913)
Cash and cash equivalents	600,163	4,939,475	2,513,874
Exploration Assets	18,059,853	15,053,023	17,021,091
Net Assets	18,404,303	19,661,267	19,110,268

Papua Mining plc

Condensed Interim Consolidated Statement of Comprehensive Income 

For the six months ended 30 June 2015

     

____________________________________________________________________________

		6 months to	6 months to	12 months to
		30 June	30 June	31 December
		2015	2014	2014
		US$	US$	US$
	Note	(unaudited)	(unaudited)	(audited)
Administrative costs		(750,838)	(886,822)	(2,811,864)
Finance (charges)/income		3,303	5,601	18,951
(Loss) before tax		(747,535)	(881,221)	(2,792,913)
Income tax expense		0	0	0
(Loss) attributable to equity		(747,535)	(881,221)	(2,792,913)
owners for the period
Other comprehensive (loss)/income for the period		0	0	0
Total comprehensive (loss) attributable to equity owners		(747,535)	(881,221)	(2,792,913)
for the period
(Loss) per share attributable to equity owners
Basic & Diluted		(0.01)	(0.02)	(0.06)

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

Papua Mining plc

Condensed Interim Consolidated Statement of Financial Position

As at 30 June 2015

                   

____________________________________________________________________________

		6 months to	6 months  to	12 months  to
		30 June	30 June	31 December
		2015	2014	2014
		US$	US$	US$
	Note	(unaudited)	(unaudited)	(audited)
ASSETS
Non-current assets
Intangible assets	4	18,059,853	15,053,023	17,021,091
Total non-current assets		18,059,853	15,053,023	17,021,091
Current Assets
Cash and cash equivalents		600,163	4,939,475	2,513,874
Total current assets		600,163	4,939,475	2,513,874
Total assets		18,660,016	19,992,498	19,534,965
EQUITY
Equity attributable to owners
of the parent:
Share Capital	5	8,194,453	7,599,413	8,194,453
Share Premium		14,117,154	13,451,740	14,117,154
Other Reserves		3,087,062	3,087,062	3,087,062
Share Based Payment Reserve		1,392,747	1,250,938	1,351,176
Retained deficit		(8,387,112)	(5,727,886)	(7,639,577)
Total equity		18,404,303	19,661,267	19,110,268
LIABILITIES
Current liabilities
Trade and other payables		255,713	331,231	424,697
Total current liabilities		255,713	331,231	424,697
Total liabilities		255,713	331,231	424,697
Total equity and liabilities		18,660,016	19,992,498	19,534,965

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

Papua Mining plc

Condensed Interim Cash Flow Statement

For the six months ended 30 June 2015

______________________________________________________________________________

	6 months to	6 months to	12 months to
	30 June	30 June	31 December
	2015	2014	2014
	US$	US$	US$
	(unaudited)	(unaudited)	(audited)
Cash flow from operating activities
(Loss) for the period	(747,535)	(881,221)	(2,792,913)
Adjustments to reconcile net profit/(loss)
before tax to cash flow from operating activities
Impairment of intangible assets	0	0	746,451
Share Based Payments	41,571	177,496	277,734
Currency adjustments	0	0	380,378
Net (decrease)/increase in operating liabilities
-Other liabilities	(168,984)	84,476	174,188
Net cash flow from operating activities	(874,949)	(619,249)	(1,214,162)
Cash flow from investing activities
Purchase of intangible assets	(1,038,762)	(2,171,161)	(4,885,679)
Net cash used in investing activities	(1,038,762)	(2,171,161)	(4,885,679)
Cash flow from financing activities
Proceeds from issuance of ordinary shares	0	4,103,005	5,363,459
Net cash used in financing activities	0	4,103,005	5,363,459
Net increase/(decrease) in cash and cash
equivalents	(1,913,711)	1,312,595	(736,382)
Cash and cash equivalents at the
beginning of the period	2,513,874	3,626,880	3,626,880
Exchange difference on cash and cash equivalents	0	0	(376,624)
Cash and cash equivalents at the
end of the period	600,163	4,939,475	2,513,874

Papua Mining plc

Condensed Interim Statement of Changes in Equity

For the six months ended 30 June 2015

______________________________________________________________________________

		Share	Share	Other	Share Based	Retained	Total
		Capital	Premium	Reserves	Payment	Deficit	Equity
					Reserve
		US$	US$	US$	US$	US$	US$
	Balance at 31 December 2013	5,489,648	11,458,500	3,087,062	1,073,442	(4,846,664)	16,261,988
	(Loss) for the period	0	0	0	0	(881,222)	(881,222)
	Shares issued during the period	2,109,765	1,993,240	0	0	0	4,103,005
	Share based payments	0	0	0	177,496	0	177,496
	Balance at 30 June 2014 (unaudited)	7,599,413	13,451,740	3,087,062	1,250,938	(5,727,886)	19,661,267

(Loss) for the period	0	0	0	0	(1,911,691)	(1,911,691)
Shares issued during the period	595,040	665,414	0	0	0	1,260,454
Share based payments	0	0	0	100,238	0	100,238
Balance at 31 December 2014	8,194,453	14,117,154	3,087,062	1,351,176	(7,639,577)	19,110,268

(Loss) for the period	0	0	0	0	(747,535)	(747,535)
Shares issued during the period	0	0	0	0	0	0
Share based payments	0	0	0	41,571	0	41,571
Balance at 30 June 2015 (unaudited)	8,194,453	14,117,154	3,087,062	1,392,747	(8,387,112)	18,404,303

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

Papua Mining plc

Notes to the Condensed Interim Consolidated Financial Statements

For the six months ended 30 June 2015

__________________________________________________________________________________

1      Group and Principal activities

For the purposes of these financial statements, the term "PM plc Group" is defined as the companies Papua Mining plc (the "Company"), Papua Mining Limited, Aries Mining Limited and Sagittarius Mining Limited.

Papua Mining plc is a public limited company, admitted to trading on AIM, and is incorporated and domiciled in England and Wales.

Papua Mining plc acquired 100% of the share capital of Papua Mining Limited on 20 December 2011, however each of the companies of the PM plc Group have effectively operated as a group under common management for a number of years although they did not comprise a statutory group for the entire duration of the comparative period ended 31 December 2011 as defined by International Accounting Standards.

The PM plc Group's main activity is the exploration for gold and copper resources in Papua New Guinea, as set out in the Directors' Report.

2      Basis of preparation

This interim report on the unaudited consolidated financial statements is for the six month period ended 30 June 2015. It does not include all the information required for full annual financial statements and should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 31 December 2014, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").

The consolidated financial statements have been prepared under the historical cost convention except for share based payments which are valued at the date of grant.

These unaudited consolidated half-year financial statements have been prepared in accordance with accounting policies consistent with those set out in the Group's financial statements for the year ended 31 December 2014, which were prepared in accordance with IFRS as adopted by the EU.

The consolidated financial statements incorporate the financial statements of the Company and subsidiaries controlled by the Company as at 30 June 2015.

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2014, prepared under IFRS as adopted by the EU, have been filed with the Registrar of Companies. Those accounts have received an unqualified audit report and did not contain statements or matters to which the auditors drew attention under the Act.

The Group's consolidated financial statements are presented in US dollars.

3      Accounting policies

The Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2014.

 

4      Intangible assets

		30 June		30 June		31 December
Group		2015		2014		2014
		US$		US$		US$
Exploration costs
At beginning of period		17,021,091		12,881,863		12,881,863
Additions		1,038,762		2,171,160		4,139,228
At the end of year		18,059,853		15,053,023		17,021,091

The Group's principal subsidiary undertakings at 30 June 2015, all of which are included in the consolidation, were as follows:

	Proportion held	Class of shareholding	Nature of business	Country of incorporation
Name of Company
Subsidiary undertakings
Papua Mining Limited	100%	Ordinary	Exploration	British Virgin Islands
Aries Mining Limited	100%	Ordinary	Exploration	Papua New Guinea
Sagittarius Mining Limited	100%	Ordinary	Exploration	Papua New Guinea

5     Share capital

					30 June		30 June		31 December
Group					2015		2014		2014
					Number		Number		Number
Issued share capital
Ordinary shares of $0.16 each					51,215,534		47,496,334		51,215,534
					30 June		30 June		31 December
					2015		2014		2014
Issued share capital					US$		US$		US$
Fully paid					8,149,453		7,599,413		8,149,453
					8,149,453		7,599,413		8,149,453

Fully paid ordinary shares carry one vote per share and carry the right to dividends. There are no shares held by the entity or its subsidiaries or associates. There are no shares reserved for issue under options and contracts for the sale of shares at the year end.

On the 24th June 2014 Papua Mining plc issued 12,500,000 placing units comprising of one placing share and one placing warrant (the Placing Shares and the Placing Warrants together the "Placing Units") at a price of £0.20 per Placing Unit. The Placing Warrants are exercisable within 2 years of 27 June 2014 at a price of £0.30 per Placing Warrant.

On the 7th July 2014 Papua Mining plc issued 3,689,200 offer units comprising of one offer share and one offer warrant (the Offer Share and the Offer Warrant together the "Offer Units") at a price of £0.20 per Offer Unit. The Offer Warrants are exercisable within 2 years of 7 July 2014 at a price of £0.30 per Offer Warrant.

 

END

 

 

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