Interim Results

RNS Number : 1483Y

Tri-Star Resources PLC

17 December 2010

 



TRI-STAR RESOURCES PLC (Formerly Canisp plc)

("Tri-Star Resources" or the "Company")

Unaudited Interim Results

For the six month period ended 30 September 2010

Chairman's Statement

Introduction

Tri-Star Resources PLC (formerly Canisp Plc) (AIM: TSTR) is pleased to announce its interim results for the six months ended 30 September 2010.

On 27 August 2010, the Company completed the acquisition of 99 per cent. of the issued ordinary share capital of Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi ("Tri-Star") (the "Acquisition"). In view of the size and nature of the Acquisition, and its associated funding commitments, it was treated as a reverse takeover under the AIM Rules for Companies

In the period under review, the Company recorded a loss before and after tax of £879,000 (year ended 31 December 2009: loss before tax £4,000, loss after tax £7,000). Administrative expenses of £739,000 comprise non-recurring costs of £350,000 relating to professional fees in respect of the Acquisition and a further £389,000 of costs associated with the Company's admission to trading on AIM as a result of the Acquisition being a reverse takeover ("Re-Admission"). The board of directors of the Company (the "Board") does not recommend that a dividend is paid at this time.

Capital restructuring

During the period, the Company's capital base was restructured through the conversion of each former Ordinary Share of 0.1 pence each into one new ordinary share of 0.005 pence each ("New Ordinary Shares") and one deferred share of 0.095 pence each. A further 3,512,500,000 New Ordinary Shares were issued for cash during the period, raising £905,000, and 37,500,000 New Ordinary shares were issued in lieu of payment of fees to advisers. In addition, £383,500 of the Company's convertible debt was converted into 383,500,000 New Ordinary Shares.

Outlook

It has been a transformational period for the Company. In July 2010, the Company announced the proposed Acquisition of Tri-Star for a cash consideration of up to £300,000 of which £150,000 was funded through the issue of 3,100,000,000 New Ordinary Shares at 0.005 pence per share to raise £155,000 before expenses. The balance of £150,000 falls payable, subject to certain milestones being achieved. The Acquisition was approved by shareholders at the general meeting on 26 August 2010.

Tri-Star holds licences and permits in respect of the mining and exploitation of mineral rights for antimony at Goynuk, located in the Gediz district of Turkey and has an exploration concession over 783 hectares of land with a permit to mine antimony over a 24.62 hectare deposit area.

Following the Acquisition, the Company raised £750,000 before expenses through the placing of 375,000,000 New Ordinary Shares at 0.2 pence per share to fund a drilling program to evaluate the potential for additional antimony deposits within the licence area.

To date, the Company has drilled 20 diamond core holes and has received the assay results from 60 per cent. of the samples from the laboratory in Canada. The Board expects that the results of the drilling will have been fully evaluated by the end of January 2011 and a detailed update announcement will be released by the Company at that time.

It is worth noting that the price of antimony metal, of which the vast majority of production comes from China, has risen from U$9,250 per tonne at the time of the Acquisition to over U$12,000 per tonne currently. This provides support for the increase in the Company's share price to 1.07 pence as at close of business on 15 December 2010. Vehbi Eyi, an executive director of the Company who has been involved in the trading of antimony metal products for nearly 40 years, comments on the metal market in more detail below.

Finally, I would like to take this opportunity to thank our limited number of staff and consultants who have worked diligently over the past few months to bring the Company to the exciting position it is in today. 

Adrian Collins

Chairman

16 December 2010

Chief Executive's Statement

The Company's operations as a resource company commenced with the completion of the Acquisition and plans were immediately executed to prepare facilities at the Goynuk Mine site to manage, log, sample and store core from a diamond drill program. The Company has also appointed a drilling contractor, as stated in the update announcement made on 13 October 2010 and the contractor has now mobilised to site and commenced the drilling programme.

The budgeted geological reconnaissance drilling program was completed on 11 December 2010 having drilled 1,311 meters in 20 drill holes between 24 meters and 129 meters in true depth from 18 drill sites.

In conjunction with the diamond core drilling, surface mapping and sampling was undertaken of exposures created by the excavation and placement of drill roads and sites.

A total of 244 samples have been taken and results returned for 156 of them with the balance expected by calendar year end. The Company contracted ALS Laboratory Group in Canada to undertake its assays.

The best antimony assays were returned from the following holes drilled to the south east of the property:

DH 001 reported 5.71 per cent. Antimony (Sb) over 20cm at a true depth of 43m. Mineralisation continued for several meters with an average grade of 0.4 per cent. Sb;

DH 002 reported an average 7.05m section with 4.7 per cent. Sb including a 1m section at 20.8 per cent. Sb at a depth starting 58.6m below surface; and

DH 004  reported 1.7 per cent. Sb over 2.0m with a 2.5 per cent. Sb over a 0.5m zone.    

This mineralisation and additional intercepts in holes DH 007, DH 013, DH014 indicate the system is present in previously unexploited areas. Other holes, while not returning mineralisation, have led to an understanding of the geologic controls and limits of the mineralising systems in a region of numerous antimony deposits and outcrops. The operations have been visited and supervised by the Company's independent consulting geologists who have prepared reports to the Board.

These very preliminary results indicate that an internationally compliant resource may be established with further drilling and geological appraisal. The Board will review and assess the results of the drill and sampling program in its entirety and publish a relevant statement in the first quarter of 2011.

Brian Spratley

Chief Executive

16 December 2010

Executive Director's Statement

The Antimony Market

The price of antimony metal in European markets rose consistently in the last quarter from U$9,000 to over U$12,000 per tonne delivered to a warehouse in an ARA port. Available metal in the hands of traders and customers is believed to be in short supply and recent transactions have been conducted at U$12,650 per tonne.

The recent cold weather in Western Europe has resulted in a number of automotive battery manufacturers seeking inventory as the cold damages antimonal lead acid car batteries. With the approach of the calendar year end, and China heading for their New Year holiday in mid January, prompt shipments for metal to European customers may be delayed until late March /early April which will result in low inventories being maintained within Europe during the course of 2011.

Vehbi Eyi

Executive Director

16 December 2010

Strand Hanson Limited (Nomad) James Harris / Paul Cocker	Tel: [phone]
Keith, Bayley, Rogers & Co Limited (Broker) Simon Frost / Brinsley Holman	Tel: [phone]

Brian Spratley, the Company's Chief Executive Officer, has relevant experience within the sector and meets the criteria of a qualified person under the AIM note for mining, oil and gas companies and has reviewed and approved the technical information contained in this announcement. 

TRI-STAR RESOURCES PLC (FORMERLY CANISP PLC)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 SEPTEMBER 2010

	Note	Unaudited six months ended 30 September 2010		Unaudited year ended 31 December (restated)  2009
		£'000		£'000
Sales		-		68
Cost of Sales		-		(69)
Gross Loss		-		(1)
Administrative expenses		(873)		5
Amortisation of intangibles		(6)		(8)
Total administrative expenses		(879)		(3)
Loss from operations and loss before taxation		(879)		(4)
Taxation expense		-		(3)
Loss for the period		(879)		(7)
Loss after taxation and loss attributable to the equity holders of the company		(879)		(7)
Other  comprehensive income		4		-
Total comprehensive expenditure for the period		(875)		(7)
Basic and diluted loss per ordinary share (pence)
	4	(0.03)p		(0.00)p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER 2010

	Share capital	Other reserves	Share premium	Share based payment reserves	Retained earnings	Total equity
	£'000		£'000	£'000	£'000	£'000
At 1 January 2009 (restated)	212	15	-	-	(7)	220
Dividend paid	-	-	-	-	(13)	(13)
Transactions with owners	212	15	-	-	(20)	207
Exchange difference on translating foreign operations	-	(19)	-	-		(19)
Loss for the year	-	-	-	-	(7)	(7)
Total comprehensive expenditure for the year	-	(19)	-	-	(7)	(26)
At 31 December 2009 (Unaudited)	212	(4)	-	-	(27)	181
Share based payments	-	-	-	58	-	58
Arising on business combination	2,165	(6,169)	4,092	-	(143)	(55)
Issue of share capital	38	-	1,095	-	-	1,133
Transactions with owners	2,203	(6,169)	5,187	58	(143)	1,136
Exchange difference on translating foreign operations	-	4	-	-	4	8
Loss for the period	-	-	-	-	(879)	(879)
Total comprehensive expenditure for the period	-	-	-	-	(875)	(871)
At 30 September 2010 (unaudited)	2,415	(6,169)	5,187	58	(1,046)	445

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2010

		Unaudited 30 September 2010	Unaudited 31 December 2009 (restated)
		£'000	£'000
ASSETS
Non-current assets
Intangible assets	5	37	41
Property, plant and equipment		48	38
		85	79
Current assets
Cash and cash equivalents		307	59
Trade and other receivables	6	450	168
Total current assets		757	227
Total assets		842	306
EQUITY AND LIABILITIES
Current liabilities
Other financial liabilities		150	-
Loans		-	112
Trade and other payables		247	13
Total current liabilities and total liabilities		397	125
Equity
Share capital	8	2,415	212
Share premium		5,187	-
Share based payment reserve		58	-
Other reserves		(6,169)	(4)
Retained earnings		(1,046)	(27)
Total equity attributable to equity holders		445	181
Total equity and liabilities		842	306

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 SEPTEMBER 2010

		Unaudited six months ended  30 September 2010	Unaudited year ended 31 December 2009 (restated)
		£'000	£'000
Cash flows from operating activities
Loss after taxation		(879)	(7)
Amortisation of intangibles		6	8
Depreciation		8	9
Deemed cost of listing		389	-
Share based payments		58	-
(Increase)/ decrease in stock		-	2
(Increase)/ decrease in trade and other receivables		(338)	(7)
Increase/(decrease) in trade and other payables		111	(4)
Foreign exchange		2	(7)
Net cash outflow from operating activities		(643)	(6)
Cash flows from investing activities
Purchase of subsidiaries		(150)	-
Net cash acquired with subsidiary		146	-
Purchase of fixed assets		(16)	(3)
Net cash (outflow) from investing activities		(20)	(3)
Cash flows from financing activities
Proceeds from issue of share capital		907	-
Proceeds from share capital paid up		116	-
Dividend paid		-	(13)
Repayment of loans		(112)	-
Net cash inflow/(outflow) from financing activities		911	(13)
Net change in cash and cash equivalents		248	(22)
Cash and cash equivalents at beginning of period		59	81
Cash and cash equivalents at end of period		307	59

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 30 SEPTEMBER 2010

1. GENERAL INFORMATION

The information for the period ended 30 September 2010 does not constitute statutory accounts, as defined in Section 498 of the Companies Act 2006. The figures for the year ended 31 December 2009 have been extracted from financial statements of Üç Yildiz. These accounts were unaudited as they did not require an audit under Turkish law.

2. ACCOUNTING POLICIES

BASIS OF PREPARATION

Acquisition of Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi

On 27 August 2010, Tri-Star Resources plc (formerly Canisp plc) agreed to pay up to £300,000, in cash to acquire Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi (Üç Yildiz). After the acquisition the former shareholders of Üç Yildiz owned 77.6 per cent. of the Company. An initial £150,000 of cash was paid, and the remaining £150,000 has been deferred subject to certain milestones being met. The initial £150,000 was raised by the issue of shares to former shareholders, and the transaction has therefore been treated for accounting purposes as a share for share exchange, and as a reverse acquisition. The remaining £150,000 has been treated as a financial liability in the financial statements and recognised in reserves as a distribution to the former shareholders.

This transaction falls outside the scope of IFRS 3 ("Business Combinations") because the legal parent is a listed shell and is not considered to be carrying on a 'business' under IFRS 3. The accounting policy adopted has been set out below.

The consolidated financial statements are presented as a continuation of the financial statements of the private operating entity (Üç Yildiz). Any excess of the consideration transferred over the cash balances and other net assets (at carrying amounts) of the listed entity (Tri-Star) have been treated as a cost of obtaining the listing and recorded as an expense. All other transaction costs have been treated as post transaction costs in the income statement.

The consideration transferred has been measured at fair value and has been calculated as the deemed cost of the combination based on the number of shares that Üç Yildiz would have to issue to achieve the same ratio of ownership interest that exists in the combined group.  The assets and liabilities of Tri-Star have been recognised at carrying value at the acquisition date. The surplus of the consideration transferred over the fair value of the net identifiable assets of Tri-Star  arising on the acquisition has been recognised in the statement of comprehensive income as a cost of listing and no goodwill has been recognised.

The share capital and share premium at the period end represent the equity structure of the legal parent including the equity instruments issued by the legal parent to effect the transaction.

Accounting periods and comparative information

The comparatives represent those of Üç Yildiz with a restated capital structure of the legal parent.

Üç Yildiz has a year end of 31 December and as such Tri-Star has changed its year end to 31 December for future accounting periods.  Historically, Tri-Star had a year end of 31 March and produced full year financial statements at 31 March 2010.

Üç Yildiz has prepared financial statements at its financial year end of 31 December and therefore the only available financial information for Tri-Star to be included as a comparative is as at 31 December 2009. There is no financial information available for Üç Yildiz for the period ended 31 March 2010 or 30 September 2009 as these did not represent accounting period ends.  The directors believe therefore that the most appropriate information to include for comparative purposes is that available for 31 December 2009 which will be reproduced in the full year financial statements at 31 December 2010.

The results of Canisp plc for the year ended 31 March 2010 have not been reproduced in these interim financial statements, as Canisp plc was a non-operating investment company at that time.  Following the transaction, which has been treated as a reverse acquisition, the results of the group are now presented as a continuation of the financial statement of the private operating entity (Üç Yildiz), and therefore the directors are of the opinion that the results for Canisp plc for the year ended 31 March 2010 are not relevant to the ongoing business.

The Company's shares are listed on the AIM market of the London Stock Exchange and the Company applies the Companies Act 2006 when preparing its annual financial statements.

The annual financial statements will be prepared under IFRS and the principal accounting policies adopted remain unchanged from those adopted by Tri-Star in preparing its financial statements for the year ended 31 March 2010 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007), IFRS 8 Operating Segments and IFRS 3 ("Business Combinations").  

The adoption of IAS 1 (Revised 2007) does not affect the financial position or profits of the Group, but gives rise to additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged, however, some items that were recognised directly in equity are now recognised in other comprehensive income, for example gains/losses on available for sale financial assets. IAS 1 (Revised 2007) affects the presentation of owner changes in equity and introduces a 'Statement of comprehensive income'.

At the current time, the Group only has one segment and therefore the full provisions of IFRS8 were not applicable.

The adoption of IFRS 3 (revised 2008) has changed the accounting requirements for the business combination. The most significant changes that had an impact on the Group are as follows:

-           acquisition-related costs of the combination are recorded as an expense in the statement of comprehensive income. Previously, these costs would have been accounted for as part of the costs of the acquisition.

-           the assets acquired and liabilities assumed are generally measured at their acquisition-date fair values

-           any contingent consideration is measured at fair value at the acquisition date. If the contingent consideration arrangement gives rise to a financial liability, any subsequent changes are generally recognised in profit or loss. Previously, contingent consideration was recognised at the acquisition date only if its payment was probable.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.

3. SEGMENTAL REPORTING

As defined under International Financial Reporting Standard 8 (IFRS 8) the management have defined that the Group's only material business segment is mining.

		Unallocated unaudited  six months ended 30 September 2010	Mining operations unaudited six months ended 30 September 2010	Mining    year ended 30 December  2009 (restated)
		£'000	£'000	£'000
Sales		-	-	68
Cost of sales		-	-	(69)
Gross profit		-	-	(1)
Administrative expenses		(820)	(53)	5
Amortisation of intangibles		-	(6)	(8)
Total administrative expenses		(820)	(59)	(3)
Loss from operations		(820)	(59)	(4)
Finance income Finance costs		- -	- -	- -
Loss for the period before taxation		(820)	(59)	(4)
Taxation expense		-	-	(3)
Loss for the period from continuing activities		(820)	(59)	(7)
Loss after taxation and loss attributable to the equity holders of the company		(820)	(59)	(7)
Other  comprehensive income		-	4	-
Total comprehensive expenditure for the period		(820)	(55)	(7)
Segment assets		693	149	306
Segment liabilities		376	21	125

4 LOSS PER SHARE 

The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Under reverse accounting the weighted average number of shares in issue during the period reflects Üç Yildiz's weighted average pre-combination ordinary shares multiplied by the exchange ratio established in the acquisition, and the weighted average total actual shares of the legal parent in issue after the date of acquisition. For the comparative period the weighted average number of shares in issue during the period is Üç Yildiz's weighted average pre-combination ordinary shares multiplied by the exchange ratio established in the acquisition.

	Unaudited six months ended 30 September 2010	Unaudited year ended 31 December 2009 (restated)
	£'000	£'000
Loss attributable to equity shareholders	(879)	(7)
	2010 Number	2009 Number
Weighted average number of 0.1p ordinary shares	3,287,048,189	3,100,000,000
Loss per share - basic and diluted	(0.03)p	(0.00)p

5 intangible assets

	Unaudited Mining Licence
	£'000
Cost
At 1 January  2009	54
Exchange movement	(5)
At 31 December 2009	49
Exchange movement	2
At 30 September 2010	51
Amortisation and impairment
At 1 January 2009	-
Amortisation charge in the year	8
At 31 December 2009	8
Amortisation charge in the period	6
At 30 September 2010	14
Net book amount at 30 September 2010	37
Net book amount at 31 December 2009	41

6 TRADE AND OTHER RECEIVABLES

	Unaudited 30 September 2010	Unaudited 31 December  2010 (restated)
	£'000	£'000
Deposit to mining department	7	7
Other receivables	3	152
Unpaid share capital	375	-
VAT recoverable	51	9
Prepayments and accrued income	14	-
Trade and other receivables, net	450	168

Trade and other receivables are usually due within 30 - 60 days and do not bear any effective interest rate.

The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation of fair value.

                7 share based payments

The Group operates share option schemes for certain employees (including directors).  Options are exercisable at the option price agreed at the date of grant.  The options are settled in equity once exercised.  The expected life of the options is six months.  If the options remain unexercised after a period of ten years from the date of grant, the options expire.  Options are forfeited after 12 months if the employee leaves the Group.

Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:

	2010		2009
	Number	WAEP £	Number				WAEP £
Outstanding at the beginning of the year	-	-	-				-
Outstanding at the end of the year	90,000,000	0.0044	-				-

7 share based payments (continued)

The share options outstanding at the end of the period have a weighted average remaining contractual life of 9.92 years (2009: nil) and have the following exercise prices and fair values at the date of grant:

	Grant date	Exercise price	Fair value	2010	2009
		£	£	Number	Number
First exercise date (when vesting conditions are met)
27 February 2011	27 August 2010	0.00005	0.00039	90,000	-

The share options can be exercised up to 9.5 years after the date first exercisable. 

The fair values were calculated using the Black-Scholes.  The inputs into the model were as follows:

	2010
Risk fee rate	0.5%
Share price volatility	100%
Expected life	6 months
Market value at date of grant	£0.0039

Expected volatility was determined by calculating the historical volatility of the Tri-Star's share price.  The expected life used in the model has been adjusted, based on the management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The Group recognised total expenses of £58,000 (2009: nil) relating to equity-settled share-based payment transactions during the year.

9 SHARE CAPITAL

	Unaudited 30 September 2010	Unaudited 31 December  2010 (restated)
	£'000	£'000
Allotted, issued and fully paid
1,363,925,475 deferred shares of 0.1p (31 December 2009: nil)	1,364	-
856,547,275 deferred shares of 0.095p (31 December 2009: nil)	814	-
4,752,547,275  ordinary shares of 0.005p	237	-
(31 December 2009: 500 ordinary shares of 1,000 TYR)	-	212
	2,415	212

	Ordinary shares			Deferred 0.1p shares		Deferred 0.095p shares
	No.	£'000	No.		£'000		No.	£'000
Allotted, issued and fully paid At 1 January 2009	856,547,275	43	1,363,925,475		1,364		-	-
Impact of share split	-	-	-		-		856,547,275	814
Issue of shares	3,512,500,000	175	-		-		-	-
Conversion of loan	383,500,000	19	-		-		-	-
At 30 September 2010	4,752,547,275	237	1,363,925,475		1,364		856,547,275	814

Following the approval of its shareholders at the Company's annual general meeting on 26 August 2010 of the share division of all existing issued and unissued ordinary shares in the capital of the Company ('Ordinary Shares') of 0.1p each into one Ordinary Share of 0.005p each and one deferred share of 0.095p each, application was  made for 856,547,275 Ordinary Shares of 0.005p each to be admitted to trading on AIM. Admission of these 856,547,275 Ordinary Shares of 0.005p each occurred at 8.00 am on 27 August 2010. Following this issue and the issue of the 3,137,500,000 Ordinary Shares of 0.005p each announced on 27 August 2010, the issue of 375,000,000 shares announced on 27 August 2010 and the conversion of 383,500,000 shares announced on 27 August 2010 there were 4,752,547,275 Ordinary Shares of 0.1 pence each in issue (each of which are voting shares) at 30 September 2010.

The deferred shares have no voting rights and are not eligible for dividends.

10 REVERSE ACQUISITION

On 27th August 2010 Tri-Star Resources plc (formerly Canisp plc) completed a reverse acquisition of Üç Yildiz Antimon Madencilik İthalat Ve İhracat Sanayi ve Ticaret Anonim Şirketi, a company based in Turkey. The accounting entries for the transaction are set out in the accounting policies. The amounts recognised for each class of assets, liabilities and contingent liabilities recognised at the acquisition date were as follows:

	Carrying value	Fair value adjustments
	£'000	£'000
Cash and cash equivalents	146	-
Trade and other receivables	52	-
Total assets	198	-
Trade and other payables Loan	(111) (389)	-
Total liabilities	(500)	-
Net liabilities	(302)	-

	£'000
Consideration transferred	86
Net liabilities acquired	302
Cost of listing	388

 

END

 

 

IR FFMFAMFSSEIE