REG - Starvest PLC - Half-year report - six months ended 31 March 2019

StarvestAnnouncement

17/06/2019 15:45

RNS Number : 5146C
Starvest PLC
17 June 2019
 


17 June 2019
 
Half-year report - six months ended 31 March 2019
 
Chairman's statement
The latter half of 2018 saw a marginal recovery in the mining and resources sector but a decline in commodity prices adversely affected share prices through Q1 2019. Despite this environment we saw a 39% increase in our Net Asset Value (NAV) from £1.65m at 30 September 2018 to £2.30m as at 31 March 2019. From March 2019, the company implemented a more transparent and objective valuation method for portfolio stocks, making use of market prices without an applied discount, and approximately 13 percentage points of the 39% increase in NAV is attributable to this change.
 
We saw an increase in Net Asset Value Per Share over the six months to 31 March 2019 from 3.33p per share to 4.15p per share. Over the same period the daily closing share price remained at a discount to NAV of approximately 35%.
 
The Company earned an operating profit of £640,414 during the reporting period mainly attributable to significant increases in selected portfolio stocks such as Greatland Gold plc (LON:GGP). This operating profit resulted in earnings per share of 1.02p on a fully diluted basis for the six-month period.
 
The Company continues its historical policy of investing in companies with early-stage mining resource projects, but we also have a mandate to invest directly in projects. Several projects are under review focused on precious and base metals. We are also evaluating other commodities such as lithium, cobalt and rare earth elements which are forecast to increase in use and demand over the medium to long term.
 
Several of our investee companies remain extremely active and have provided very positive news flow over the reporting period.
 
Greatland Gold (LON:GGP) continued exploration on its Paterson area licences with drilling at Havieron producing exciting results including 118m at 3.08g/t gold and 0.84% copper from 459m and 157m at 6.04g/t gold and 0.44% copper from 660m. Peak grades of 211.3g/t gold, 12.38% copper and 4,104ppm cobalt were established at Havieron. The Company has subsequently signed a US$65m farm-in deal with Newcrest with a minimum commitment of US$5m over an initial 12-month period with the potential for Newcrest to earn up to a 70% interest through total expenditure of US$65m over a six-year period. Newcrest may acquire an additional 5% interest at the end of the farm-in period at fair market value for cash. Greatland is well-funded to pursue its exploration work on the remaining parts of the Havieron licence and two other Paterson licences, as well as its five other project areas in Australia, with the potential to add other exciting mineral exploration discoveries.
 
Cora Gold (LON:CORA) has continued exploration activities on its flagship Sanankoro project, extending identified zones of gold mineralisation within a 14km long structural corridor yet to be fully tested. Independent consultants have calculated an initial exploration target of between 30-50mt of ore at an average grade of 1.0-1.3g/t for 1.0-2.0moz gold. To date mineralisation has been delineated to a depth of 100m, most of which is hosted within weathered material which ranges in depth from around 50m to in excess of 100m across the exploration target area. The relatively soft oxidised rock would potentially allow for a low-cost open pit operation.
Kefi Minerals (LON:KEFI) has taken significant steps toward mine construction with the Ethiopian government giving approval for the resettlement plan. The company has received all relevant consents from federal agencies, including an endorsement by the Prime Minster of the finance structure, with only minor aspects of the plan yet to be finalised. The principal project contractors have confirmed a 24-month development schedule set to commence in Q4 2019 while off-site project work such as power and roads construction have already commenced.
Ariana Resources (LON:AAU) continues to report good production results from its Kiziltepe Mine with 7,296oz extracted in Q1 2019, exceeding annualised quarterly guidance by 17%. The company also continues with exploration at its Kizilcukur, Tavsan and Salinbas projects.
Other investee companies push ahead such as Oracle Power (LOM:ORCP), which named a  new CEO and has progressed its proposed coal mine and power plant by securing the required capital to proceed with development. Salt Lake Potash (LON:SO4) continues with exploration at its Western Australia projects and is progressing with test scale processing at one of its sites. Similarly, Sunrise Resources (LON:SRES) has continued to test its pozzolan resource in the USA with encouraging results.
Whilst the commodities market remains flat the board of Starvest believes the Company is well positioned when the sector enters its next upcycle. We continue to expect robust demand for energy and metals over the medium and long term and look forward to providing further updates to investors and the market.
Callum N Baxter
Chairman & Chief Executive
17 June 2019




 Income Statement
 







6 months to 31 March 2019


6 months to 31 March 2018


Year ended
 30 September 2018








Unaudited
£


Unaudited
£


Audited
£
 




Revenue


27,165


-


-




Cost of sales


(16,257)


-


-




Gross profit


10,908


-


-




Administrative expenses


(127,149)


(128,922)


(250,147)




Amounts written off against trade investments


(133,086)


(415,421)


(686,932)




Amounts written back against trade investments


889,741


28,725


615,008




Operating profit / (loss)


640,414


(515,618)


(322,071)




Interest receivable


37


2,945


5,829




Profit / (loss) on ordinary activities before tax


640,451


(512,673)


(316,242)




Tax on profit on ordinary activities


-


-


-




Profit / (loss) / profit attributable to Equity holders of the Company


640,451


(512,673)


(316,242)






















Earnings/(loss) per share - see note 3
Basic
Diluted


 
1.18 pence
1.02 pence


 
(0.97) pence
(0.83) pence


 
(0.60) pence
(0.51) pence



 




Statement of Financial Position
 











6 months ended 31 March 2019


6 months ended 31 March 2018


Year ended
 30 September 2018












Unaudited
£


Unaudited
£


Audited
£




Current assets
Trade and other receivables
Trade investments
Cash and cash equivalents


 
 
 


 
16,331
2,258,694
36,429


 
18,552
1,183,287
270,995


 
55,992
1,498,059
153,849




Total current assets






2,311,454


1,472,834


1,707,900


























Current liabilities
Trade and other payables






 
(44,504)


 
(104,766)


 
(119,401)




Total current liabilities






(44,504)


(104,766)


(119,401)


























Net current assets






2,266,950


1,368,068


1,588,499




 
Capital and reserves
Called up share capital
Share premium account
Profit and loss account
Equity reserve






 
 
552,927
1,681,431
32,592
-


 
 
528,982
1,640,876
(804,290)
2,500


 
 
539,649
1,654,209
(607,859)
2,500




Total equity shareholders' funds






2,266,950


1,368,068


1,588,499











 




Statement of Cash Flows
 











6 months ended 31 March 2019


6 months ended 31 March 2018


Year ended
 30 September 2018












Unaudited
£


Unaudited
£


Audited
£


























Cash flows from operating activities




















Operating profit/(loss)






640,414


(515,619)


(322,071)




Net interest receivable






37


2,945


5,829




Share based payment charge






40,500


-


24,000




Decrease in trade and other receivables






39,660


11,037


(26,403)




(Decrease)/increase in trade and other payables






(77,396)


3,154


17,788




Net cash flows from operating activities






643,215


(498,483)


(300,857)


























Cash flows from investing activities




















Purchase of current asset investments






-


(50,000)


(50,000)




Loan converted to shares






(20,000)


-


-




Sale of current asset investments






26,928


-


-




Profit on sale of current asset investments






(10,908)


-


-




Increase in investment provisions






133,086


415,421


686,932




Decrease in investment provisions






(889,741)


(28,725)


(615,008)




Net cash flows from investing activities






(760,635)


336,696


21,924


























Net (decrease)/increase in cash and cash equivalents






(117,420)


(161,787)


(278,933)




Cash and cash equivalents at beginning of period






153,849


432,782


432,782




Cash and cash equivalents at end of period






36,429


270,995


153,849

































 




 
Statement of Changes in Equity







Share capital


Share premium






Profit and loss account


Total Equity attributable to shareholders










Equity reserve








£


£


£


£


£




As at 30 September 2017


528,982


1,640,876


2,500


(291,617)


1,880,741






























(Loss) for the period


-


-


-


(512,673)


(512,673)




Total recognised income and expenses for the period


-


-


 
-


(512,673)


(512,673)






























Shares issued


-


-


-


-


-




Total contribution by and distributions to owners


-


-


 
-


-


-






























As at 31 March 2018


528,982


1,640,876


2,500


(804,290)


1,368,068






























As at 30 September 2018


539,649


1,654,209


2,500


(607,859)


1,588,499






























Profit for the period


-


-


-


640,451


640,451




Total recognised income and expenses for the period


-


-


-


640,451


640,451






























Shares issued


13,278


27,222


-


-


40,500




Equity component of convertible loan


-


-


(2,500)


-


(2,500)




Total contributions by and distributions to owners


13,278


27,222


(2,500)


-


38,000






























As at 31 March 2019


552,927


1,681,431


-


32,592


2,266,950



 




Interim report notes
 
1.   Interim report
The information relating to the six-month periods to 31 March 2019 and 31 March 2018 is unaudited. 
The information relating to the year ended 30 September 2018 is extracted from the audited accounts of the Company which have been filed at Companies House and on which the auditors issued an unqualified audit report.
2.   Basis of preparation
This report has been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' ('FRS102'), and with the Companies Act 2006. Although the information included herein does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006, the accounting policies that have been applied are consistent with those adopted for the statutory accounts for the year ended 30 September 2018.
The Company will report again for the full year to 30 September 2019.
The Company's investments at 31 March 2019 are stated at the lower of cost and net realisable value or the valuation adopted at 30 September 2018 or the current market value based on market quoted prices at the close of business. The Chairman's statement includes a valuation based on market quoted prices at 31 March 2019.
3.   Earnings per share











6 months ended 31 March 2019


6 months ended 31 March 2018


Year ended
 30 September 2018












Unaudited
£


Unaudited
£


Audited
£


























Profit/(loss) for the period:


640,451


(512,673)


(316,242)




 
Weighted average number of Ordinary shares of £0.01 in issue


 
54,460,957


 
52,898,163


 
53,012,136




 
Earnings/(loss) per share - basic
 


 
1.18 pence


 
(0.97) pence


 
(0.60) pence




 
Warrants in issue
 


 
8,500,000


 
8,500,000


 
8,500.000




 
Weighted average number of Diluted Ordinary shares of £0.01 in issue


 
62,960,957


 
61,398,163


 
61,512,136




 
Earnings/(loss) per share - diluted
 


 
1.02 pence


 
(0.83) pence


 
(0.51) pence











 
 
 
 
 
 
 
 
Investment portfolio
Starvest now holds trade investments in the companies listed below, which in aggregate comprise 95% of the portfolio value as at 31 March 2019:
 



·      Alba Mineral Resources plc


Exploration for oil in England, lead-zinc in Ireland, uranium in Mauritania and graphite in Greenland www.albamineralresources.com




·      Ariana Resources plc


Gold-silver production and exploration in Turkey
www.arianaresources.com




·      Cora Gold Limited


Gold exploration in West Africa
www.coragold.com
 




·      Greatland Gold plc


Gold exploration in Australia
www.greatlandgold.com




·      Kefi Minerals plc


Gold and copper exploration in Ethiopia and Saudi Arabia
www.kefi-minerals.com




·      Oracle Coalfields plc


Coal mining in Pakistan
www.oraclecoalfields.com













Other direct and indirect mineral exploration companies:
 



·      Block Energy plc (formerly Goldcrest Resources plc)


Oil and gas exploration in Bulgaria
www.goldcrestresourcesplc.com




·      Marechale Capital plc


Investment banking and corporate finance www.marechalecapital.com




·      Minera IRL Limited


Gold exploration in South America
www.minera-irl.com 




·      Salt Lake Potash Limited


Potash in Australia
www.saltlaketpotash.com.au 




·      Sunrise Resources plc


Exploration for industrial minerals in United States, Finland, Australia and Ireland
www.sunriseresourcesplc.com













Other investee companies are listed in the Company's 2018 annual report available on request or from the Company web site - www.starvest.co.uk
Copies of this interim report are available free of charge by application in writing to the Company Secretary at the Company's registered office, Salisbury House, London Wall, London EC2M 5PS, by email to info@starvest.co.uk or from the Company's website - www.starvest.co.uk

 
 
Enquiries to:
Starvest PLC
Callum Baxter or Gemma Cryan  02077 696 876  info@starvest.co.uk
 
Grant Thornton UK LLP (Nomad)
Colin Aaronson, Harrison Clarke or Seamus Fricker  02073 835 100
 
SI Capital Ltd (Broker)
Nick Emerson or Alan Gunn  01483 413 500
 
 




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