REG - Argos Resources Ltd - 2018 Financial Results
RNS Number : 1943TArgos Resources Ltd18 March 2019
18 March 2019
ARGOS RESOURCES LIMITED
("Argos" or "the Company")
2018 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 2018.
· US$406,000 profit (2017: US$118,000)
· US$788,000 cash reserves at 31 December 2018 (2017: US$758,000)
· The Working Interest in the Licence was transferred back to Argos in February 2019
· The Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, for a period of 450 days after the notice to withdraw, until 27 December 2019
· The current Second Phase of the Licence expires in November 2019. Discussions about the licence term beyond that date are underway with the Falkland Islands Government
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 (+500 22685)
www.argosresources.com
Ian Thomson, Chairman
John Hogan, Managing Director
Cenkos Securities plc (Nomad & Broker)
Derrick Lee (+44 131 220 9100)
Neil McDonald (+44 131 220 6939)
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. The Licence covers an area of approximately 1,126 square kilometres in the North Falkland Basin.
On receipt of the notice Argos exercised the option under the Participation Agreement to have the Licence reassigned to it, which effectively terminated the Participation Agreement. Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, for a period of 450 days after the notice to withdraw. These payments, together with current cash balances of $788,000 at year end 2018, leave the Group adequately financed for at least twelve months beyond sign-off.
The current Second Phase of the Licence expires in November 2019 and discussions about the licence term beyond that date are underway with the Falkland Islands Government. The Working Interest in the Licence was transferred back to Argos in February 2019 and the Company will seek to secure other partners to participate in its development.
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 (2017: $nil).
Business review
The Group has returned a profit for the year ended 31 December 2018 of $406,000 (2017: $118,000) which equates to a profit per share of 0.18 cents (2017: 0.05 cents). The increase in profit is due to the recognition of the full amount of the income due under the Participation agreement in the current year, as Argos are contractually entitled to the income under the termination clause of the agreement.
Administration expenses were $334,000 in 2018 compared to $329,000 in 2017.
Shareholders' equity has increased marginally from $29.46 million to $29.87 million in the year since 31 December 2017, as receipts under the Participation Agreement offset the administration costs leaving a small surplus. Cash in the year increased from $758,000 to $788,000.
IFRS 9 requires the consideration of the risk attached intercompany loan between the parent and subsidiary companies. This has resulted in an impairment provision in the accounts of the parent but it has no impact on the group accounts and does not affect the group's view of the outcome of the project.
Outlook for the next financial year
Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, which equates to $96,000 at the year-end exchange rate, for a period of 450 days after the notice to withdraw.
The Group is therefore fully funded for at least twelve months beyond sign-off.
Ian Thomson John Hogan
Chairman Managing Director
Consolidated statement of comprehensive income
Year ended 31 December 2018
Year
ended
31 December
2018
$'000Year
ended
31 December
2017
$'000Other income
784
380
Administrative expenses
(334)
(329)
Finance income
4
1
Foreign exchange (losses)/gains
(48)
66
Profit for the year attributable to owners of the parent
406
118
Total comprehensive income for the period
attributable to owners of the parent
406
118
Basic and diluted earnings per share (cents)
0.18
0.05
Consolidated statement of financial position
As at 31 December 2018
2018
2017
$'000
$'000
Assets
Non-current assets
Exploration intangible assets
and royalty interests
28,749
28,749
28,749
28,749
Current assets
Other receivables
392
14
Cash and cash equivalents
788
758
Total current assets
1,180
772
Total assets
29,929
29,521
Liabilities
Current liabilities
Trade and other payables
61
59
Total liabilities
61
59
Total net assets
29,868
29,462
Capital and reserves attributable to
equity holders of the Company
Share capital
6,696
6,696
Share premium
30,071
30,071
Retained losses
(6,899)
(7,305)
Total shareholders' equity
29,868
29,462
Consolidated statement of cash flows
Year ended 31 December 2018
Year
ended
31 December
2018
$'000Year
ended
31 December
2017
$'000Cash flows from operating activities
Profit for period before taxation
406
118
Adjustments for:
Finance income
(4)
(1)
Foreign exchange loss/(gain)
50
(67)
Net cash inflow from operating activities
before changes in working capital
452
50
Increase in other receivables
(378)
1
Increase/(decrease) in other payables
2
(89)
Net cash inflow/(outflow) from operating activities
76
(38)
Investing activities
Interest received
4
1
Net cash received from investment activities
4
1
Financing activities
Issue of ordinary shares (share options exercised)
-
27
Net cash from financing activities
-
27
Net increase/(decrease) in cash and cash equivalents
80
(10)
Cash and cash equivalents at beginning of period
758
701
Exchange (losses)/gains on cash and cash equivalents
(50)
67
Cash and cash equivalents at end of the year
788
758
Consolidated statement of changes in equity
Year ended 31 December 2018
Share
capital
$'000
Share premium
$'000Retained
losses
$'000
Total
equity
$'000At 1 January 2017
6,669
30,071
(7,423)
29,317
Total comprehensive income for the year
-
-
118
118
Shares issued (share options exercised)
27
-
-
27
At 31 December 2017
And 1 January 2018
6,696
30,071
(7,305)
29,462
Total comprehensive income for the year
-
-
406
406
At 31 December 2018
6,696
30,071
(6,899)
29,868
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 2017 or 2018. Statutory accounts for 2017 and 2018 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2017 and 2018 were unqualified and did not draw attention to any matters by way of emphasis.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDFR CKFDBQBKDPND
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