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REG - Argos Resources Ltd - 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 (+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. 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.


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.
 
END
 
 
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