2019 Financial Results

RNS Number : 4200E

Argos Resources Ltd

28 February 2020

 

28 February 2020

ARGOS RESOURCES LIMITED

("Argos" or "the Company")

2019 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 2019.

· US$401,000 loss (2018: profit of US$406,000)

· US$768,000 cash reserves at 31 December 2019 (31 December 2018: US$788,000)

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

· The current Second Phase of the Licence, which was due to expire in November 2019, was extended by the Falkland Islands Government until 1 May 2021, with no additional work commitments

· The Group continued to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, which were recognised as income in 2018 until 27 December 2019, under the termination terms of the Participation Agreement

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. Noble and Edison's Working Interests in the Licence were transferred back to Argos in February 2019. The Licence covers an area of approximately 1,126 square kilometres in the North Falkland Basin.

Under the terms of a Participation Agreement between the Company, Noble and Edison, the Company continued to receive quarterly cash payments from Noble and Edison of £75,000 per quarter during 2019, up until 27 December 2019. These payments contributed to a cash balance of $768,000 at year end 2019, leaving the Group adequately financed for at least twelve months beyond sign-off. In order to continue as a going concern beyond that point the Company will need to raise further finance, either through a new partner or by raising funds in an equity issue. Further details on going concern are contained in the note below.

The Company has successfully extended the Second Phase of the Licence from November 2019 to 1 May 2021, thereby creating additional time to secure new partners in the Licence. A further extension may be sought to allow adequate time for drilling within the Licence area.

The Company is actively seeking other partners to participate in the development of the Licence.

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 (2018: $nil).

Business review

The Group has returned a loss for the year ended 31 December 2019 of $401,000 (2018: profit of $406,000) which equates to a loss per share of 0.18 cents (2018: profit of 0.18 cents). The loss in 2019 reflects the administration cost of operating the Group following the withdrawal of Noble and Edison.  The profit in 2018 was due to the recognition of the full amount of the income due under the termination terms of the Participation agreement.

Administration expenses were $433,000 in 2019 compared to $334,000 in 2018, due largely to the $88,000 share based payment charge for the extension of the options scheme.

Shareholders' equity has decreased from $29.9 million to $29.5 million in the year since 31 December 2018, reflecting the administration costs.  Cash in the year decreased from $788,000 to $768,000.

Outlook for the next financial year

Argos continued to receive quarterly cash payments from Noble and Edison until 27 December 2019, following their withdrawal from the Participation Agreement. The cash available will fund the Group in its search for a farmout partner.

Going concern

The financial statements have been prepared on the 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.

At 31 December 2019, the Group had sufficient cash resources to continue for a period in excess of 12 months beyond sign off.

The Company's ability to achieve its long term strategy of developing its exploration projects is dependent on finding an exploration partner and discussions are underway with interested parties to achieve that. In order to continue as a going concern beyond the 12 month horizon the company will also need to raise further finance either through such a partner or by raising funds in an equity issue.

As described above, the Directors expect to be able to find an exploration partner, given previous interest and the significant prospectivity within the Licence area, and the Company's history of raising funds through the issue of equity, the directors also consider that the Company is likely to be able to raise the required capital.  However, there are currently no binding agreements in place. Should the Directors be unable to raise sufficient funds or find an exploration partner, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business.

These factors indicate the existence of a significant material uncertainty which may cast doubt over the Group's and Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group or Company were unable to continue as a going concern.

Ian Thomson    John Hogan

Chairman    Managing Director

Consolidated statement of comprehensive income

Year ended 31 December 2019

			Year ended 31 December 2019 $'000	Year ended 31 December 2018 $'000
Other income			-	784
Administrative expenses			(433)	(334)
Finance income			4	4
Foreign exchange gains/(losses)			28	(48)
(Loss)/profit for the year attributable to owners of the parent			(401)	406
Total comprehensive (loss)/income for the
period attributable to owners of the parent			(401)	406
Basic and diluted (loss)/ earnings per share (cents)			(0.18)	0.18

Consolidated statement of financial position

As at 31 December 2019

			2019	2018
			$'000	$'000
Assets
Non-current assets
Exploration intangible assets			28,737	28,749
			28,737	28,749
Current assets
Other receivables			86	392
Cash and cash equivalents			768	788
Total current assets			854	1,180
Total assets			29,591	29,929
Liabilities
Current liabilities
Trade and other payables			58	61
Total liabilities			58	61
Total net assets			29,533	29,868
Capital and reserves attributable to
equity holders of the Company
Share capital			6,696	6,696
Share premium			30,071	30,071
Retained losses			(7,234)	(6,899)
Total shareholders' equity			29,533	29,868

Consolidated statement of cash flows

Year ended 31 December 2019

		Year ended 31 December 2019 $'000	Year ended 31 December 2018 $'000
Cash flows from operating activities
(Loss)/profit for period before taxation		(401)	406
Adjustments for:
Finance income		(4)	(4)
Foreign exchange (gain)/loss		(28)	50
Share based remuneration expensed		89	-
Net cash (outflow)/inflow from operating activities
before changes in working capital		(344)	452
Decrease/(increase) in other receivables		377	(378)
(Decrease)/increase in other payables		(3)	2
Net cash inflow from operating activities		30	76
Investing activities
Interest received		4	4
Exploration and development expenditure		(82)	-
Net cash (used)/generated in investment activities		(78)	4
Net (decrease)/increase in cash and cash equivalents		(48)	80
Cash and cash equivalents at beginning of period		788	758
Exchange (gains/losses) on cash and cash equivalents		28	(50)
Cash and cash equivalents at end of the year		768	788

Consolidated statement of changes in equity

Year ended 31 December 2019

		Share capital $'000	Share premium $'000	Retained losses $'000	Total equity $'000
At 1 January 2018		6,696	30,071	(7,305)	29,462
Total comprehensive income for the year		-	-	406	406
At 31 December 2018 And 1 January 2019		6,696	30,071	(6,899)	29,868
Total comprehensive income for the year		-	-	(401)	(401)
Share based income expense		-	-	89	89
Share based income adjustment for expired options		-	-	(23)	(23)
At 31 December 2019		6,696	30,071	(7,234)	29,533

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 2018 or 2019. Statutory accounts for 2018 and 2019 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2018 was unqualified and for 2019 was unqualified with an emphasis of matter paragraph included highlighting the material uncertainty relating to going concern.

 

END

 

 

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