Half Yearly Report

RNS Number : 9299D

Regency Mines PLC

30 March 2011

 



Regency Mines PLC

("Regency" or the "Company")

Half-yearly report for the period ended 31 December 2010

30 March 2011

Regency Mines plc ("Regency" or the "Company") the mineral exploration and mineral investment company with interests in nickel and other minerals in Western Australia, Queensland, Papua New Guinea and Pakistan, announces its unaudited half-yearly results for the six months ended 31 December 2010.

Key Points:

·      Profit before taxation                              £2.535m (2009: £0.388m)

·      Total comprehensive income                   £5.857m (2009: £0.649m)

·      Total equity                                             £13.231m (2009: £4.063m)

·      Earnings per share - basic                        0.39 pence (2009: 0.10 pence)

·      Earnings per shares - diluted                   0.37 pence (2009: 0.10 pence)

·      Significant contributions to profit (£2.154m) and comprehensive income (£4.264m) from 20.1% associate Red Rock Resources plc

·      Strategic investment in Oracle Coalfields PLC

·      Significant step-up in joint venture with Direct Nickel Ltd. with drill programme at the joint venture's Mambare copper/cobalt project in Papua New Guinea expected in 2Q2011

Chairman Andrew Bell commented: "The next twelve months are likely to be a transformative and stimulating period for the Company, with significant developments on several fronts".

A copy of the half-yearly report is being posted to shareholders and will be available shortly from the Company's website at www.regency-mines.com.

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
Peter Trevelyan-Clark/ Ben Jeynes	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.

Chairman's statement

Dear Shareholders,

The interim group pretax profit of £2,534,589 (2010 interim profit £388,164) included £2,154,449 share of profits in associates, reflecting associate profits from Red Rock Resources plc ("Red Rock").

Comprehensive income for the period was £5,857,247 (2009 £649,379) and included a share in the comprehensive income of its 20.1% associate Red Rock and a £1,007,348 surplus on revaluation of available for sale investments (2010 £96,369), partly due to a rise in value of the Company's recently acquired strategic holding in Oracle Coalfields PLC ("Oracle").

Shareholders' equity increased by 225.6% year on year to £13,231,248 (2009 £4,063,284) and by 235.5% since 30th June 2010. This is substantially due to the increase in the value of investments in associates and in available for sale financial assets.

Two key developments occurred in November 2010,  both facilitated by the rise in the Company's share price over the period which enabled the Company to raise £3,492,121 gross by the issue of new Regency shares, at an average issue price of 3.02p a share.

In the first development, Regency invested £1,017,500 in a new issue of 18,500,000 shares by Oracle, or approximately 10.04% of Oracle's issued share capital, which carried with it the right to take the Company's shareholding to 20% at the time of Oracle's anticipated admission to trading on AIM. Purchases since have raised the holding to 11.26% of Oracle's issued capital. The issue was at 5.5p per share, and the Oracle price traded on PLUS Markets has climbed steadily since and now stands at 10.125p. Oracle has recently announced that it expects its admission to trading on AIM to occur in April 2011.  This investment was financed by a US$2,000,000 loan repayable in tranches up to 26 November 2011 arranged by Yorkville Advisors UK LLP.

In a second development, the Company announced a significant step in its joint venture with nickel technology developer Direct Nickel Ltd ("DNi"). Regency agreed to invest AUD 6,000,000 to acquire 1,039,860 new shares in DNi in two equal tranches, making it with approximately 7.31% the largest shareholder after the founders. The second half of this investment completed in early 2011.

At the same time Regency and DNi agreed to fund jointly the next £2,000,000 phase in the drill exploration of the joint venture's Mambare copper/cobalt project in Papua New Guinea. A joint operating committee was set up and a 4,000m drill programme is expected to start at end-April or early May with the two objectives of proving up a Mineral Resource to JORC standard on the southern flanks of the plateau and establishing the extent of mineralisation potential on top of the plateau.

DNi itself, following a successful demonstration of the reagent recycling component of its nickel ore treatment technology in Charlotte, North Carolina in October 2010, is building a demonstration plant in Perth, Western Australia to pilot the technology later this year, and plans a stock market listing.

The Company expects the coming period to see further progress at Mambare and in the DNi relationship, and admission of Oracle to trading on AIM followed by completion of the bankable feasibility study on Oracle's Thar coal project.

In Australia, Regency expects to conduct airborne geophysics at the historic copper-gold Bundarra mining camp in Queensland, all of which is held and where two promising copper targets may be tested by drilling later in the year. Further exploration of the high grade sulphide occurrence encountered by aircore drilling at Munglinup, WA will also be undertaken, to delineate the discovery and test for base metal mineralisation.

The next twelve months are likely to be a transformative and stimulating period for the Company, with significant developments on several fronts.

Andrew Bell

Chairman

30 March 2011

Consolidated statement of income

for the period ended 31 December 2010

	Notes	6 months to 31 December 2010		6 months to 31 December 2009
		Unaudited £		Unaudited £
Revenue
Management services		-		19,027
Total revenue		-		19,027
Net gains from other sales
Gains/(losses) on sales of investments		-		-
Total net gains from other sales		-		-
Total revenue and net gains from sales		-		19,027
Gain on dilution of interest in associate		641,172		-
Impairment of available for sale investment		(25,755)		-
Exploration expenses		(4,132)		(5,729)
Administrative expenses		(230,318)		(256,032)
Share of profit of associates		2,154,449		634,001
Finance costs (net)		(827)		(3,103)
Profit for the period before taxation		2,534,589		388,164
Tax expense		(688,100)		-
Profit for the period attributable to owners of parent		1,846,489		388,164
Earnings per share
Earnings per share - basic	3	0.39 pence		0.10 pence
Earnings per share - diluted	3	0.37 pence		0.10 pence

All of the operations are considered to be continuing.

The accompanying notes form an integral part of this half-yearly report.

Consolidated statement of comprehensive income

for the period ended 31 December 2010

		6 months to 31 December 2010		6 months to 31 December 2009
		Unaudited £		Unaudited £
Profit for the period		1,846,489		388,164
Surplus on revaluation of available for sale investments		1,007,348		96,369
Deferred taxation on revaluation of available for sale investments		(271,984)		-
Group's share of associates' other comprehensive income		4,264,279		180,325
Deferred tax on associates		(1,151,355)		-
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations		162,470		(15,479)
Total comprehensive income for the period		5,857,247		649,379

The accompanying notes form an integral part of this half-yearly report.

Consolidated statement of financial position

as at 31 December 2010

	Notes	31 December 2010		31 December 2009		30 June 2010
		Unaudited £		Unaudited £		Audited £
ASSETS
Non current assets
Property plant and equipment		35,758		13,381		28,181
Investments in associates		8,473,996		1,619,935		1,414,096
Goodwill		47,961		43,507		47,273
Exploration assets		2,439,012		1,772,508		2,048,408
Total non current assets		10,996,727		3,449,331		3,537,958
Current assets
Cash and cash equivalents		449,054		126,217		30,828
Trade and other receivables		813,824		211,602		303,788
Available for sale financial assets	5	4,412,034		571,596		412,584
Total current assets		5,674,912		909,415		747,200
TOTAL ASSETS		16,671,639		4,358,746		4,285,158
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital		543,387		396,129		427,882
Share premium account		8,069,862		4,407,261		4,755,071
Share based payment reserve		174,915		117,748		174,915
Other reserves		4,074,392		750,171		63,634
Retained earnings		368,692		(1,608,025)		(1,477,797)
Total Equity		13,231,248		4,063,284		3,943,705
LIABILITIES
Current liabilities
Trade and other payables		208,622		295,462		341,453
Short term borrowings		1,120,330		-		-
Total current liabilities		1,328,952		295,462		341,453
Non current liabilities
Deferred tax liabilities		2,111,439		-		-
Total non current liabilities		2,111,439		-		341,453
TOTAL EQUITY AND LIABILITIES		16,671,639		4,358,746		4,285,158

The accompanying notes form an integral part of this half-yearly report.

Consolidated statement of changes in equity

for the period ended 31 December 2010

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 2009	352,808	3,775,578	(1,996,189)	117,748	488,956	2,738,901
Changes in equity for 2009
Total comprehensive income/(loss) for the period	-	-	388,164	-	261,215	649,379
Transactions with owners
Issue of shares	43,321	739,231	-	-	-	782,552
Share issue and fundraising costs	-	(107,548)	-	-	-	(107,548)
Total Transactions with owners	43,321	631,683	-	-	-	675,004
As at 31 December 2009	396,129	4,407,261	(1,608,025)	117,748	750,171	4,063,284
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/(loss) 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)
Share based payments	-	-	-	-	-	-
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

	Available for sale trade investments reserve	Associate investments reserve	Foreign currency translation reserve	Consolidation reserve	Total other reserves
	£	£	£	£	£
As at 30 June 2009	(217,072)	437,763	115,344	152,921	488,956
Changes in equity for 2009
Total comprehensive income/(loss) for the period	96,369	180,325	(15,479)	-	261,215
Transactions with owners
Share based payments	-	-	-	-	-
As at 31 December 2009	(120,703)	618,088	99,865	152,921	750,171
As at 30 June 2010	(211,514)	(48,874)	171,101	152,921	63,634
Changes in equity for 2010
Total comprehensive income/(loss) for the period	735,364	3,112,924	162,470	-	4,010,758
Transactions with owners
Share based payments	-	-	-	-	-
As at 31 December 2010	523,850	3,064,050	333,571	152,921	4,074,392

Consolidated statement of cash flows

for the period ended 31 December 2010

	Notes	6 months to 31 December 2010		6 months to 31 December 2009
		Unaudited £		Unaudited £
Cash flows from operating activities
Profit before taxation		2,534,589		388,164
Increase in receivables		(510,036)		(44,440)
(Decrease)/increase in payables		(132,831)		69,309
Share of profit in associates		(2,154,449)		(634,001)
Interest receivable		(4)		(622)
Interest payable		831		3,725
Exploration expenses		4,132		5,729
Currency adjustments		(14,555)		11,280
Impairment of associate		25,755		-
Gain on dilution of interest in associates		(641,172)		-
Depreciation		6,859		1,898
Net cash outflow from operations		(880,881)		(198,958)
Cash flows from investing activities
Interest received		4		622
Interest paid		(831)		(3,725)
Payments to acquire associate company investments		-		(80,075)
Payments to acquire available for sale investments		(3,017,857)		(255,643)
Exploration payments		(218,715)		(209,376)
Payments to acquire property plant and equipment		(14,120)		(5,191)
Net cash flows from investing activities		(3,251,519)		(553,388)
Cash flows from financing activities
Proceeds from issue of shares		3,492,121		782,552
Transaction costs of issue of shares		(61,825)		(107,548)
Proceeds of new borrowings		1,120,330		-
Net cash flows from financing activities		4,550,626		675,004
Net increase/(decrease) in cash and cash equivalents		418,226		(77,342)
Cash and cash equivalents at the beginning of period		30,828		203,559
Cash and cash equivalents at end of period		449,054		126,217

Half-yearly report notes

for the period ended 31 December 2010

1	Company and group

As at 30 June 2010 and 31 December 2010 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 2011. 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 2010 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2010, 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 condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2010, which have been prepared in accordance with IFRSs

3	Earnings per share	6 months to  31 December  2010		6 months to  31 December  2009
		£		£

	These have been calculated on profit for the period after taxation of:	1,846,489		388,164
	Weighted average number of Ordinary shares of £0.001 in issue	475,087,544		382,375,603
	Earnings per share - basic	0.39 pence		0.10 pence
	Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options	503,962,544		400,375,603
	Earnings per share fully diluted	0.37 pence		0.10 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:

		2010		2009
		Number		Number
	Earnings per share denominator	475,087,544		382,375,603
	Weighted average number of exercisable share options	28,875,000		18,000,000
	Diluted earnings per share denominator	503,962,544		400,375,603

Half-yearly report notes

for the period ended 31 December 2010, 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	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

		Investment in Red Rock Resources plc	Other investments	Australian exploration	Corporate and unallocated	Total
	For the 6 month period to 31 December 2009	£	£	£	£	£
	Revenue	-	-	-	19,027	19,027
	Result
	Segment results	634,001	-	-	(242,734)	391,267
	Profit before tax and finance costs					391,267
	Interest receivable					622
	Interest payable					(3,725)
	Profit before taxation					388,164
	Taxation expense					-
	Consolidated profit for the period					388,164

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 2010, continued

5	Available for sale financial assets

	Net book amount	£
	At 30 June 2010	412,584
	Additions during the period	3,017,857
	Revaluation during the period	1,007,348
	Impairment during the period	(25,755)
	Net book value at 31 December 2010	4,412,034
	The additions during the period relate to the company's £1,165,337 investment in Oracle Coalfields Plc and its £1,852,520 investment in Direct Nickel Pty Ltd, as detailed in the chairman's statement.
6	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 2010, 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 2010	427,881,777		427,882
	Issued 17 September 2010 at 1.10 pence per share	59,000,000		59,000
	Issued 24 September 2010 at 1.25 pence per share	10,000,000		10,000
	Issued 12 November 2010 at 3.00 pence per share	10,470,000		10,470
	Issued 30 November  2010 at 6.90  pence per share	26,841,114		26,841
	Issued 14 December 2010 at 6.00 pence per share	5,000,000		5,000
	Issued 23 December 2010 at 6.00 pence per share	4,193,850		4,194
	At 31 December 2010	543,386,741		543,387

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.

 

END

 

 

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