TIDMPOL
RNS Number : 9215A
Polo Resources Limited
29 March 2017
29 March 2017
Polo Resources Limited
("Polo" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 31 DECEMBER 2016
Polo Resources Limited (AIM: POL), the multi-sector investment
company with interests in oil, gold, coal, copper, phosphate,
lithium, iron and vanadium, today announces results for the six
months ended 31 December 2016.
Financial Summary:
-- Total Net Assets of US$60.47 million as of 20 March 2017 (31
December 2016: US$59.99 million).
-- Net Asset Value per share as at 20 March 2017 was approximately 15.643 pence per share
(31 December 2016: 15.636 pence per share).
Investment Highlights:
-- Hibiscus Petroleum Berhad (HIBI: MK) (Oil & Gas, UK and Australia)
o On 31 May 2016, Hibiscus announced it had achieved a
significant milestone through Anasuria Cluster acquisition which
has allowed it to make the strategic shift from being exploration
focused to production with positive cashflow and profit. This was
reflected in the third quarter ended 31 March 2016 which returned a
profit after taxation of MYR80.5 million (approximately US$18.17
million at MYR/US$4.43).
o In July 2016, Polo increased its interest in Hibiscus to 10.20
per cent (since diluted to 9.62 percent) via the subscription of
48.9 million new shares at an issue price of MYR0.18 per share
following which Polo emerged as the second largest shareholder of
Hibiscus after the Hibiscus management team.
o In October 2016, Hibiscus announced that its indirect
wholly-owned subsidiary, SEA Hibiscus Sdn Bhd ("SEA Hibiscus") has
entered into a conditional sale and purchase agreement with Sabah
Shell Petroleum Company Limited and Shell Sabah Selatan Sdn Bhd
(collectively "Shell") to acquire Shell's entire 50 per cent
participating interest in the 2011 North Sabah Enhanced Oil
Recovery Production Sharing Contract ("PSC") for a purchase
consideration of US$25 million (excluding post completion
adjustments and reimbursements to Shell). Shell's interest also
includes operatorship responsibilities which would be transferred
to SEA Hibiscus through a transfer of operatorship program. This
acquisition is expected to complete in 2017 and is subject
primarily to obtaining regulatory approval of Petroliam Nasional
Berhad ("PETRONAS") and consent of Petronas Carigali Sdn Bhd
("Petronas Carigali"), a 50 per cent joint venture partner in the
PSC.
o In the October - December 2016 Quarter circa 300,000 barrels
of oil were produced from various fields within the Anasuria
Cluster contributing revenue of MYR61.8 million (US$13.96 million
at MYR/US$4.43) at a realised price of US$41.7 per barrel. On 22
February 2017, Hibiscus announced a profit after tax for 6 months
ending December 2016 in excess of MYR90 million (US$20.34 million
at MYR/US$4.43).
o Polo holds a 9.62 per cent equity interest in Hibiscus. On 28
March 2017, Hibiscus' share price closed at MYR0.40 with a market
capitalisation of US$130.99 million (MYR/US$4.409).
-- Blackham Resources (ASX:BLK) (Gold, Australia)
o In June 2016, Polo exercised its right to purchase a further
49 per cent of Perfectus Management Ltd for A$3 million satisfied
by the issue of 9,832,358 new ordinary shares in Polo at the price
agreed in 2014 of 15 pence per share (against Polo's share price
which closed at 4 pence on 4 June 2016). Polo's undiluted interest
in Blackham increased to approximately 8.11 per cent.
o Perfectus owns 5,888,495 ordinary shares (approximately 1.74
per cent) in Blackham's issued fully paid ordinary share capital.
Polo directly holds a further 14,761,905 (approximately 4.36 per
cent) Blackham ordinary shares.
o In October 2016, Blackham achieved a major milestone with the
first gold pour following the successful completion of the
refurbishment and commissioning of Stage 1 of the Wiluna Gold
Plant, which signalled the beginning of commercial production for
its Matilda/Wiluna Gold Operation.
o The Interim Financial Report for the half-year ended 31
December 2016 declared a profit after tax for the period of
A$3,233,000 delivered from 6,558 ozs of gold poured in the December
quarter and sold at an average of A$1,672/oz.
o The Matilda/Wiluna Gold Operation now includes JORC 2012
Measured, Indicated and Inferred Resources of 63Mt at 3.2g/t for
6.4Moz Au (48 per cent indicated) within a +1,000km(2) tenement
package which has historically produced more than 4.3 million
ounces. This represents an increase of some 25 per cent in
contained gold over this 6-month period (refer to ASX release 27
June 2016 stating the total resource to be 48Mt at 3.3g/t for
5.1Moz).
o To capitalise on the resource increase Blackham is moving
forward with mining and processing studies to increase gold
production and enhance returns to shareholders. Crucial to this
strategy is the Stage 2 capacity expansion of the Wiluna Processing
Plant aimed at lifting gold production to over 200,000ozpa.
o Blackham's FY17 production forecast is 60,000 to 70,000ozpa
with C1 Cash cost of A$840/oz and All-In Sustaining Cost of
A$1,140/oz.
o Post the reporting period, in February 2017, Blackham
announced it had raised A$35 million through a placement which
would enable it to fast track its growth strategy with the focus
being to:
-- expedite conversion of the large resource to reserves
-- extend mine life
-- accelerate the Stage 2 plant expansion studies
-- be in a position to commit to Stage 2 engineering and long
lead time items as soon as the feasibility study is completed
o Polo holds a combined direct and indirect of 6.06 per cent
equity interest in Blackham. On 28 March 2017, Blackham's share
price closed at A$0.54 with a market capitalisation of
US$139.42million (A$/US$1.311).
-- Nimini Holdings Limited (Gold, Sierra Leone)
o Nimini's Komahun Gold Project (the "Project") continues to be
constrained through not having a Mine Development Agreement ("MDA")
negotiated with the Government of Sierra Leone ("GoSL") with terms
commercially acceptable to Nimini.
o With the end of the Ebola crisis, the GoSL invited Nimini to
further negotiations which began in August 2015. Although these
negotiations were inconclusive, in early 2016 there were promising
signs when His Excellency, President Koroma, issued a mandate to
two senior persons to conclude a mutually acceptable MDA with
Nimini. However, despite this high-level intervention, progress
continues to be slow and consequently Nimini has pulled back on
activity in the country.
o Polo recognises that any return on its investment is dependent
on Nimini being able to move the Project forward and this primarily
is dependent on there being an acceptable MDA defining the fiscal
and commercial terms for project development.
o In view of the significant delays in achieving the MDA and
upon consideration of the overall risks in taking the Project
forward, Polo has prudently recorded an impairment on the carrying
value of its investment of US$14.3 million.
o Polo holds a 90 per cent equity interest in Nimini.
-- Weatherly International Plc (AIM: WTI) (Copper, Namibia)
o Tschudi production for the period under review was 8,137
tonnes Copper Cathode and C1 costs were US$4,603 per tonne. This
cost was elevated due to the unforeseen impact of groundwater
inflows on production.
o The groundwater situation was brought under control towards
the end of the September quarter reflected in the C1 costs for the
December quarter dropping to US$4,222 per tonne. Detailed work
continues to design a long-term groundwater solution to reduce
production risks and operating costs.
o As part of its cost reduction strategy, Weatherly is
evaluating a plan to expand Tschudi production capacity to 20,000
tonnes per annum in an attempt to realise economies of scale
benefits. Studies have shown the Solvent Extraction (SX) and
Electro-Winning (EX) plants can already operate at the expanded
production rate and that the capital requirement to implement is
much less than previously expected.
o Weatherly continues to investigate the opportunity to resume
production, at sustainable unit costs, at the Otjihase and
Matchless underground mines.
o Polo holds a [5.2] per cent equity interest in Weatherly. On
28 March 2017, Weatherly's share price closed at GBP0.00586 with a
market capitalisation of US$7.80 million (GBP/US$0.7966).
-- Ironstone Resources Limited (Lithium, Iron Ore, Vanadium, Precious Metals, Canada)
o Ironstone is in advanced development of its Clear Hills
Project located in the Peace Region of NW Alberta, Canada.
Featuring a large compliant poly-metallic iron and vanadium
resource, quality infrastructure, high value commodities, top tier
partners and local and institutional support - the Clear Hills
Project stands apart from traditional iron concentrate
producers.
o Post the reporting period, in January 2017, Ironstone signed a
Letter of Intent ("LOI") with Greatbanks Resources Ltd
('Greatbanks"), in connection with the establishment of a joint
venture company ("JVC"). Under the terms of the LOI, Ironstone and
Greatbanks will establish a newly incorporated JVC, to be held on a
50/50 basis, for the development of lithium carbonate extracted
from Devonian-age lithium bearing brines that will be
pre-concentrated using a patented and exclusively licensed
technology.
o Polo is excited by the venture by Ironstone to move into the
production of Lithium Carbonate from their Clear Hills Project,
which provides Polo with exposure to the technology metals market
at a time when significant and positive supply demand and pricing
fundamentals are at work in the sector as more and more consumers
switch towards electric vehicles, where lithium is a critical metal
within electric and hybrid powered vehicles.
o Polo holds an 18.84 per cent equity interest in Ironstone.
-- GCM Resources Plc (AIM: GCM) (Coal and Power, Bangladesh)
o GCM is planning to develop an integrated coal mine and
mine-mouth power project ("the Phulbari Project") based on a world
class deposit of 572Mt (JORC 2004 compliant) thermal and
metallurgical coal in North-West Bangladesh.
o The Government of Bangladesh has consistently reported its
intention to move the country's energy mix towards coal and
increase coal fired power generation from the current 250MW to
19,000MW by 2030. It has already established agreements for thermal
fired power plants, predominantly within a government-to-government
framework, with Chinese, Malaysian, Japanese and Singaporean
entities.
o Although there has been an initial focus on establishing power
plants based on imported coal, at a recent media conference the
highest level of Government also promoted the benefits of open pit
coal mining combined with mine mouth power plants.
o The Project's planned annual thermal coal production of 12
million tonnes would support some 6,000MW (previously 4,000MW)
based on the latest ultra-supercritical steam generation systems
which would facilitate significantly lower power tariff for the
country at the mine-mouth and being able to supply other power
projects coming onstream elsewhere in Bangladesh.
o GCM is also pursuing potential partners who may assist in
delivering Government approval and has recently agreed a Memorandum
of Understanding with China Gezhouba Group International
Engineering Co. Ltd to investigate the feasibility of establishing
up to 2,000MW of mine-mouth coal-fired power generation at the
Phulbari Coal and Power Project site. This initiative is now moving
to a preliminary feasibility study.
o Polo holds a 27.8 per cent equity interest in GCM. On 28 March
2017, GCM's share price closed at GBP0.1975 with a market
capitalisation of US$15.59 million (GBP/US$0.7966).
-- Universal Coal Resources Pte Ltd (Coal, Indonesia)
o Universal is a company incorporated in Singapore, which, in
turn, has entered into a conditional agreement to acquire an
indirect 75 per cent interest in PT Transcoal Minergy Coal Project
("TCM"), a company incorporated in Indonesia, from a Pan Asia
Corporation Ltd. (ASX: PZC) subsidiary ("PZC"). Polo's subsidiary,
Polo Investments Limited ("PIL"), holds a secured S$5,000,000
nominal value 15 per cent redeemable convertible note ("Note") from
Universal.
o TCM is the owner of a Production Operation Mining Business
Licence in respect of a coal mining concession area in Mantewe
District, Tanah Bumbu Regency, South Kalimantan Province,
Indonesia. The TCM Coal Project comprises of 3,440 hectares and has
a current JORC Resource of 129Mt (measured, indicated and inferred)
in the major coal producing province in Indonesia. Universal has
been coordinating with the relevant authority to procure a forestry
permit for the project, an important step in enabling work to
commence on site.
o Universal is targeting a Singapore Stock Exchange Catalist
Board listing. The Note entitles Polo to convert the principal
outstanding as well as any accrued interest into not less than 20
per cent of the share capital of Universal as enlarged by such a
conversion.
o Pursuant to the terms of the Note, Universal was required to,
amongst others, deliver the approval of the shareholders of Pan
Asia for the disposal of TCM to Universal within 3 months from the
date of the Note. As at the date hereof, this approval has not been
obtained and a default of the terms of the Note remains. PIL has
served notice on Universal and the parties who provided security,
namely PZC and Mr Boelio Muliadi, and is currently in discussions
with them on a without prejudice basis for an amicable
resolution.
-- Celamin Holdings NL ("ASX: CNL") (Phosphate, Tunisia)
o On 20 October 2016, Celamin issued an update regarding
arbitration to resolve the dispute between its wholly owned
subsidiary Celamin Limited and its joint venture partner Tunisian
Mining Services ("TMS") and Chaketma Phosphates SA ("CPSA") in
relation to the fraudulent transfer to TMS of Celamin's 51 per cent
shareholding in CPSA.
o The sole arbitrator appointed by the International Court of
Arbitration of the International Chamber of Commerce ("ICC") has
considered the jurisdictional challenges raised by TMS and has
issued an award confirming Celamin's position regarding
jurisdiction of the arbitrator and the ICC. This is a significant
outcome and allows the arbitration proceedings to recover Celamin's
interest in CPSA to continue. Celamin is also pursuing other legal
actions in Tunisia including criminal proceedings. This will also
pave the way for Celamin to return to being quoted on ASX and
progressing the world class Chaketma Phosphate Project.
o Polo holds a 33.23 per cent equity interest in Celamin.
Celamin requested a voluntary trading of its shares on the ASX on 4
March 2015. At that time Celamin had a market capitalisation of
approximately US$7.7 million. The shares remain suspended from
trading on the ASX.
Datuk Michael Tang, Executive Chairman of Polo, said:
"It is very pleasing to see clear evidence that both Polo and
our investment portfolio has strengthened considerably during the
period as we hoped. Polo is confident that further value enhancing
results from our investee companies will begin to emerge during
2017, helping to support the positive momentum which we have been
seeing across our portfolio during the last six months.
"The Board believes that Polo is well placed to react quickly to
add further opportunities and projects into the Company's
portfolio, that offer strong growth potential, in line with the
investment strategy recently approved by shareholders."
For further information, please contact:
Polo Resources Limited
Kudzayi Denenga, Investor
Relations ++27 (0) 787 312 919
ZAI Corporate Finance Ltd
(nominated adviser)
Ray Zimmerman, John Treacy ++44 (0) 20 7060 2220
Liberum Capital (broker)
Henry Freeman ++44 (0) 20 3100 2000
Blytheweigh (public relations)
Tim Blythe, Nick Elwes, Camilla
Horsfall ++44 (0) 207 138 3204
About the Company
Polo Resources Limited is a multi-sector investment company
focused on investing in undervalued companies and projects with
strong fundamentals and attractive growth prospects. For complete
details on Polo, refer to: www.poloresources.com.
CAUTIONARY STATEMENT
The AIM Market of the London Stock Exchange Plc does not accept
responsibility for the adequacy or accuracy of this release. No
stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. All
statements, other than statements of historical fact, in this news
release are forward-looking statements that involve various risks
and uncertainties, including, without limitation, statements
regarding the future plans and objectives of Polo. There can be no
assurance that such statements will prove to be accurate,
achievable or recognizable in the near term.
Actual results and future events could differ materially from
those anticipated in such statements. These and all subsequent
written and oral forward-looking statements are based on the
estimates and opinions of management on the dates they are made and
are expressly qualified in their entirety by this notice. Polo
assumes no obligation to update forward-looking statements should
circumstances or management's estimates or opinions change.
The Company's exploration and investment activities may also be
affected by a number of risks, including legal, political,
environmental, economic, financing, permitting, commodity,
exploration and development and other market risks which are normal
to the industry and referenced in greater detail in the Company's
2016 Annual Report for the period ending 30 June 2016, which may be
found on the Company's website at profile on
www.poloresources.com.
Chairman's Statement
The period under review has seen Polo's investee companies
continue to make considerable progress with the Company continuing
to grow its portfolio and asset value.
Overall the half year has seen several memorable milestones.
Blackham Resources Limited ("Blackham") has made very
significant progress achieving first gold pour in October 2016 at
its flagship Matilda Gold Project, having taken the project from
completion of a Definitive Feasibility Study ("DFS") in February
2016. Blackham are already working on an expansion plan to double
gold production to over 200,000oz pa. Since the half year end
Blackham has also announced that it has successfully raised A$35
million through a heavily oversubscribed placement which will be
used at Blackham's 100 per cent owned 6.4Moz Matilda/Wiluna Gold
Operation to fast track its existing growth strategy.
Hibiscus Petroleum Berhad ("Hibiscus") has also agreed to
acquire Shell's entire 50 percent participating interests in
Malaysia's North Sabah Enhanced Oil Recovery Production Sharing
Contract, a deal which is set to conclude, subject to regulatory
approval, in 2017. The Board believe that this will add significant
value to Hibiscus both in terms of production income, but also in
terms of infrastructure assets; further adding to its portfolio
multi-filed producing oil assets.
Celamin Holdings NL ("Celamin"), also provided an update in
October on its dispute with its local partner in the Chaketma
Phosphate Project ("CPSA") in Tunisia. The sole arbitrator
appointed by the International Court of Arbitration of the
International Chamber of Commerce ("ICC") issued an award
confirming Celamin's position regarding jurisdiction of the
arbitrator and the ICC. This means the arbitration proceedings to
recover Celamin's interest in CPSA will continue and the Board
believe this will also pave the way for Celamin to return to being
quoted on ASX.
In November 2016, our investee company GCM Resources Plc ("GCM")
the developer of the integrated Phulbari Coal and power project,
located in Bangladesh, signed a Memorandum of Understanding ("MOU")
with China Gezhouba Group International Engineering Co. Ltd
(CGGCINTL) a specialist engineering company. The MOU sets out the
process to investigate the feasibility of a joint venture for the
development of mine-mouth coal fired power plants generating up to
2,000 MW at the Phulbari mine development site. This news served to
re-rate the share price of GCM and also reflected positively on
Polo.
Post the reporting period, Ironstone Resources Ltd
("Ironstone"), signed a Letter of Intent ("LOI") with Greatbanks
Resources Ltd ('Greatbanks"), to establish a joint venture company
("JVC"). Under the terms of the LOI, Ironstone and Greatbanks will
establish a newly incorporated JVC, to be held on a 50/50 basis,
for the development of lithium carbonate extracted from
Devonian-age lithium bearing brines that will be pre-concentrated
using a patented and exclusively licensed technology.
Extracting minerals from oil-field waters to produce
eco-friendly products is a very appealing concept, especially in
today's market to meet high environmental sustainability
objectives. Devonian formation waters in parts of Alberta are noted
to contain relatively high concentrations of lithium, including
Ironstone's southern Clear Hills permits.
Ironstone also plans to manufacture advanced high-strength
steels for domestic consumption in western Canada and the Pacific
Northwest to serve markets including automotive, aerospace,
defence, infrastructure and renewable energy.
Polo's current portfolio includes gold assets: Blackham
Resources Limited (6.06%) and Nimini Holdings Limited (90%);
petroleum assets: Hibiscus Petroleum Limited (9.62%) and Regalis
Petroleum Limited (13.67%); coal and power assets: GCM Resources
Plc (27.8%) and Universal Coal Resources Pte Ltd (S$5,000,000
nominal value 15 per cent redeemable convertible note); lithium,
iron and vanadium: Ironstone Resources Limited (18.8%); a phosphate
asset: Celamin Holdings NL (33.23%); and a copper asset: Weatherly
International Plc (5.2%) and various liquid short term
investments.
Given the market conditions the Company has amended its
investment strategy, as we announced in our Annual Report and which
was ratified at the Company's Annual General Meeting in January
this year. To summarise, the Board believe that growth in Asia and
the Pacific will remain strong and that the Company's strategy
should be to focus more on direct and indirect investments in this
geographical location. This change in investment policy is
supported by analyses undertaken by Multilateral Organisations. As
an illustration of this, the Asian Development Bank states that
economic activity in Asia will continue to grow, with the region
expecting to contribute to about 60 per cent of global growth in
the next couple of years. Moving forward, the Company's strategy
will be to make direct and indirect investments in a portfolio of
businesses and assets with at least the majority of their
operations or early stage companies that intend to have at least
the majority of their operations in Asia Pacific.
The last six months have seen a significant turnaround in
sentiment and momentum in the natural resources sector. This
sentiment is being seen across our investments and their operations
and is underpinning our new investment strategy. We are confident
that as the impact of the results from our investee companies are
realised this will also feed through to Polo and its share price. I
would also like to take this opportunity to thank all our
shareholders for their continued support as we enter what we
believe will be an exciting period for Polo and its investee
companies.
Datuk Michael Tang, PJN
Executive Chairman
29 March 2017
Investment Update
Gold
Blackham Resources Limited (ASX: BLK)
-- Gold, Western Australia
-- Coal, Southwest Australia
-- Combined direct and indirect 6.06 per cent equity interest
Blackham's 100 per cent owned Wiluna Gold Plant has been
refurbished to a name plate 1.7Mtpa. In May 2016, Blackham
announced that it was on track to mobilise the mining contractors
for the Matilda open pit and Golden Age underground mine and it
expected gold production in the September Quarter 2016.
The expanded Matilda/Wiluna Gold Project now includes JORC 2012
Measured, Indicated and Inferred Resources of 63Mt @ 3.2g/t for
6.4Moz Au (48 per cent indicated) within a +1,000km(2) tenement
package which has historically produced in excess of 4.3 million
ounces. This represents a 25 per cent increase from the resource
announcement of June 2016.
First gold pour was achieved in the 3(rd) week of October 2016
and practical completion for the plant refurbishment was achieved
in November 2016. During the Quarter ended 31 December 2016,
Blackham continued to ramp up Stage 1 production. Quarterly gold
production totaled 8,773oz with 4,894oz produced in the month of
December. Management have now declared commercial production from
the Matilda/Wiluna Operation. Blackham's FY17 production forecast
is 60,000 to 70,000oz.
Growth in the open pit resources will underpin the base load
feed and growth in the underground resources will provide important
grade profile for Wiluna processing plant.
Open pit mining is currently focused on the Matilda M10 and M3
pits which are both through the depletion zone and into higher
grade ore.
Underground mining continues to be focused on access and ore
development to open up new stoping areas of the high grade Golden
Age quartz reef.
Expansion Study
During the period under review, Blackham continued its mill
expansion and mining studies aimed at increasing production above
200,000ozpa. The expansion study has targeted this as a production
goal in the next two years to be achieved mainly through the
treatment of the Wiluna sulphide ore which has current open pit and
underground Measured, Indicated and Inferred Resources of 37Mt @
4.0 g/t. Unlocking the value of the sulphide ore is a crucial part
of this strategy which involves increasing mining output and
increasing the capacity of the mill by running the sulphide circuit
in conjunction with the current operating free milling circuit.
Blackham has received a draft report on a recommended processing
flowsheet for an additional 1.5Mtpa in new crushing, grinding and
floatation circuit to feed the existing BIOX plant. The
commissioning of this additional capacity in addition to the
recently refurbished 1.7Mtpa oxide circuit would see total capacity
of 3.2Mtpa across the oxide and sulphide circuits, all located at
the Wiluna processing hub. The Expanded Wiluna plant would bring
significant economies of scale to the combined project with all the
resources sitting within a 20km radius of the processing plant.
Current mine planning is focused on the planned 1.5Mtpa sulphide
circuit being fed equally from both the open pits and the
underground. The Wiluna underground mine plan would have 2 of the
existing 5 declines in operation at any point in time.
The significant growth in Mineral Resources confirms the need to
expand the Wiluna gold plant production beyond 200kozpa. Blackham
is advancing its mining studies over the Wiluna open pit areas with
a view to updating its mine plan and publishing its maiden Wiluna
open pit reserves.
Investment Update
In June 2016, Polo's subsidiary, PIL, exercised its right to
purchase a further 49 per cent of Perfectus Management Limited
("Perfectus") (taking Polo's interest in Perfectus to 98 per cent)
for A$3.0 million satisfied by the issue of 9,832,358 new ordinary
shares in Polo at the price agreed in 2014 of 15 pence per share
(against Polo's share price which closed at 4 pence on 4 June
2016). Upon completion, Polo's undiluted interest in Blackham
increased to approximately 8.11 per cent.
Perfectus owns 5,888,495 ordinary shares (approximately 2.3 per
cent.) in Blackham's issued fully paid ordinary share capital. Polo
directly holds a further 14,761,905 (approximately 5.83 per cent.)
Blackham ordinary shares.
In January 2017, Blackham announced that it has raised A$35
million through a placement at a price of A$0.68 per share. The
placement proceeds will be used at the Matilda/Wiluna Gold
Operation to fast track its existing growth strategy. Having a
strengthened balance sheet will enable the Blackham to: expedite
the conversion of the large resource base into reserves; improve
and lengthen the mine life; accelerate studies to enhance the Stage
2 expansion economics; and commit to Stage 2 engineering and long
lead items immediately on finalisation of feasibility.
The funding allows for the Wiluna expansion studies aimed at
lifting plant throughput to 3.2Mtpa. Geological and mining studies
to date demonstrate strong grades for an operation of this size.
The initial expansion plan is expected to be completed in the near
term and having a strengthened balance sheet will allow Blackham to
expedite its sizeable growth plans.
The full details of Blackham's announcements can be found at
www.blackhamresources.com, including a competent person's statement
(JORC 2012) in respect of the Matilda Gold Project DFS Summary.
Nimini Holdings Limited
-- Gold, Sierra Leone
-- 90 per cent equity interest
Polo holds a 90 per cent interest in Nimini Holdings Limited
("Nimini"), which through its wholly owned Sierra Leone subsidiary,
holds 100 per cent of the Komahun Gold Project ("the Project")
situated in the Kono District.
In order to progress the Project, Nimini must first obtain a
satisfactory Mine Development Agreement ("MDA") involving
Ministerial execution and parliamentary ratification. The MDA sets
out, inter alia, the key fiscal/commercial terms under which the
Project will operate and is therefore essential to advancing the
Project to completion of a DFS.
Unfortunately the MDA process has become protracted; having
started in 2014 then interrupted by the Ebola crisis, recommencing
in late 2015 and continuing beyond the reporting period. After
careful consideration, the Nimini Board has taken a number of steps
to contain costs and at the same time apply as much pressure as
possible to obtain the MDA:
-- At the end of the reporting period local staff were notified
that employment contracts would be terminated;
-- Payment of the very considerable Mining Licence annual fees
have been withheld and instead a written commitment was presented
to Government that all outstanding payments would be paid upon
registration of a ratified MDA;
-- As a sign of good faith the Environmental Licence renewal fee
was paid, albeit at a significantly reduced amount relative to
prior years;
-- Nimini appointed two highly qualified Sierra Leone nationals
as directors of its subsidiary Nimini Mining Limited to refocus MDA
discussions with the Government.
Subsequent to the reporting period, notice was given to
terminate the Operator Agreement between Nimini and Plinian Capital
Limited effective from the 26 March 2017 anniversary date. After
that date, it was agreed that activities previously undertaken by
Plinian will be carried out by Nimini's shareholders.
It is reported that Sierra Leone's economy is suffering and that
the country needs to encourage investment, particularly in the
natural resources sector. Support for the country's first
large-scale gold mining operation through a ratified MDA for Nimini
would certainly encourage further investment in this sector,
particularly given the recent upward trend in commodity prices.
Also, with national elections scheduled for early 2018, observers
believe ratification of Nimini's MDA with implied employment and
investment benefits for the Kono District would give timely
positive political signals.
Given that none of the actions taken to conserve costs is
irreversible, Nimini therefore looks forward to a successful
conclusion to the MDA negotiations and the recommencement of its
site activities to enable the Project to advance to DFS.
Oil and Gas
Regalis Petroleum Limited
-- Oil, Republic of Chad
-- 13.67 per cent equity interest
Polo interest in the private and independent oil and gas
company, Regalis Petroleum Limited ("Regalis") increased to 13.67
per cent following an in-specie distribution by Polo's 42 per cent
owned associate, Signet Petroleum Nigeria Limited and transfers
from other Signet shareholders.
Regalis has interests in three highly prospective onshore
exploration blocks in the Republic of Chad. Regalis completed a
5,349km airborne gravity/magnetic survey over Blocks DOA and
WD2-2008 which are on trend with existing and recent
Glencore/Caracal discoveries.
However, Polo has recorded an impairment charge of US$14.7
million on the carrying value of its investment in Regalis as no
further progress has been made by Regalis in pursuing its
exploration strategy, and Regalis is actively seeking further
funding, but with no success currently.
Hibiscus Petroleum Berhad (HIBI: MK)
-- Oil and Gas, United Kingdom and Australia
-- 9.62 per cent equity interest
Hibiscus' strategy since listing its listing in 2011 has been to
invest in a balanced portfolio of assets across the spectrum of
upstream oil and gas exploration and production activities with key
focus on politically stable areas. On 2 December 2015, Polo
invested in Hibiscus, a Main Market of Bursa Malaysia Securities
Berhad listed company with a US$5 million cash subscription for 90
million new ordinary shares which represented a strategic 8.4 per
cent stake and was acquired at a price MYR0.235 per share (settled
in US$ at an agreed rate of MYR/US$4.238), a 4.08 per cent discount
to the Hibiscus closing price of MYR0.245 on 1 December 2015. At
that time Hibiscus had a market capitalisation of approximately
US$56 million.
On 10 March 2016, working under a 50:50 JV arrangement Hibiscus
and Ping Petroleum UK Limited completed the acquisition of the
Anasuria Cluster which a package of geographically focused
producing fields with associated enabling infrastructure in the
North Sea, UK. The Anasuria Cluster came with stable positive cash
flow from current production, in-field future development
opportunities and exploration upside.
Today, the five discovered oil fields within Anasuria Hibiscus'
licence boundaries include Guillemot A, Teal, Teal South, Cook and
Kite. Within these fields, there are: existing production which
remains cash flow positive at current oil prices; discovered but
undeveloped reserves; discovered but not, at this time,
commercially proven resources called Contingent Resources; and,
some potential oil and gas deposits which are yet to be proven,
called Prospective Resources.
The Guillemot A, Teal, Teal South and Cook fields have the
necessary infrastructure installed and have been producing to the
Anasuria FPSO since the late 1990's. Based on Hibiscus' (internal
and independent third party) assessment of these assets, Hibiscus
believes that - subject to oil price, capital investment and
operating expenditures - another 20 years of economic production is
feasible.
Operationally, Hibiscus reports that during the December
quarter, circa 300,000 barrels of oil were produced from various
fields within the Anasuria Cluster and were sold at a realised
price of US$41.7 per barrel contributing to a revenue of RM61.8
million for the quarter.
The average production rate for the quarter stood at
approximately 4,400 barrels of oil equivalent ("boe") per day.
Other significant performance indicators were that operating
expenditure per boe was circa US$13.0, under-pinned by strong
average facilities uptime of about 98 percent.
In July 2016, Polo's subsidiary, PIL, increased its interest in
Hibiscus to 10.20 per cent (since diluted to 9.90 per cent) via the
subscription of 48.9 million new shares at an issue price of
MYR0.18 per share. This increase in shareholding makes PIL the
second largest shareholder of Hibiscus after the Hibiscus
management team.
In October 2016, Hibiscus announced that its indirect
wholly-owned subsidiary, SEA Hibiscus Sdn Bhd ("SEA Hibiscus") has
entered into a conditional sale and purchase agreement with Sabah
Shell Petroleum Company Limited and Shell Sabah Selatan Sdn Bhd
(collectively "Shell") to acquire Shell's entire 50 percent
participating interests in the 2011 North Sabah Enhanced Oil
Recovery Production Sharing Contract ("PSC") for a purchase
consideration of US$25 million (excluding post completion
adjustments and reimbursements to Shell). Shell's interest also
includes operatorship responsibilities which would be transferred
to SEA Hibiscus through a transfer of operatorship program. This
acquisition is expected to complete in 2017 and is subject
primarily to obtaining regulatory approval of Petroliam Nasional
Berhad ("PETRONAS") and consent of Petronas Carigali Sdn Bhd
("Petronas Carigali"), a fifty percent joint venture partner in the
PSC.
The PSC comprises of four producing oil fields and associated
infrastructure; i.e. St Joseph, South Furious, SF30, and Barton
oilfields which are located in a key hydrocarbon province in
Malaysia and have delivered reliable production since coming on
stream in 1979. The PSC also contains pipeline infrastructure and
the Labuan Crude Oil Terminal, an onshore processing plant and oil
export terminal. The PSC also provides long-term production rights
until 2040 with identified future development opportunities which
are expected to add incremental 2P/2C resources up to 79 million
barrels. This bodes well for the increased trajectory of Hibiscus
Petroleum into the next milestones of its growth. The fields are
reported by independent technical valuer, RISC Operations Pty Ltd
to be producing over 16,000 barrels of oil per day and have an
estimated remaining developed reserves (2P) of 62 million barrels
as of April 2016.
Petronas Carigali is a wholly-owned subsidiary of PETRONAS which
is the national oil company of Malaysia. PETRONAS is a fully
integrated oil and gas multinational ranked among the largest
corporations on FORTUNE Global 500(R).
Some details of the PSC:
Units Total
-------------------------- --------- ------
Average Daily Production
20151 kstb/d3 18
-------------------------- --------- ------
Remaining Reserves
(2P) 2 MMstb4 62
-------------------------- --------- ------
Contingent Resources
(2C) 2 MMstb 79
-------------------------- --------- ------
Platforms/Structures1 19
------------------------------------- ------
Wells 135
------------------------------------- ------
1. Actuals (source: Shell).
2. Figures derived by independent technical valuer, RISC
Operations Pty Ltd, based on 1005 interest in the PSC, as of
January 2016.
3. Thousand stock tank barrels per day.
4. Million stock tank barrels.
On a macro-scale, OPEC and non-OPEC co-operation has resulted in
a resurgence of oil prices. Whilst Hibiscus did not immediately
benefit from the oil price spike that followed the 30 November 2016
OPEC meeting, Hibiscus hopes to do so in the following
quarters.
Coal
GCM Resources Plc (AIM: GCM)
-- Coal and Power Projects, Bangladesh
-- 27.8 per cent equity interest
AIM traded GCM Resources Plc ("GCM") is planning an integrated
coal mine and mine mouth power project ("the Phulbari Project")
based on the a world class deposit of 572 Mt (JORC 2004 compliant)
coal deposit. The GCM initiative dovetails well with the Bangladesh
Government's plan to increase coal-fired power generation to 19,000
MW by 2030. The Government's plan would result in over half of the
country's power being supported by coal and will offset the impact
of a diminishing gas reserve which is currently responsible for
over 60 per cent of the power generated.
On the 11(th) November 2016 GCM announced that it had signed a
Memorandum of Understanding ("MOU") with China Gezhouba Group
International Engineering Co. Ltd ("CGGCINTL") a specialist
engineering company. The MOU sets out the process to investigate
the feasibility of a joint venture for the development of
mine-mouth coal fired power plants generating up to 2,000 MW at the
Phulbari mine development site. GCM and CGGCINT have already passed
through an initial review phase for the power plant and are
mobilising to undertake a Pre-Feasibility Study ahead of a full
Feasibility Study and Engineering, Procurement and Construction
proposal.
The Phulbari Project will produce some 12 million tonnes of
thermal coal per year and consultants confirm that this could
support some 6,000 MW if the very the latest ultra-supercritical
power plant technology is employed. This would see the Phulbari
Project not only being able to support significant mine-mouth power
generation but also being able to support other Independent Power
Producers in Bangladesh. However, by not requiring coal
transportation, power generated at the Phulbari mine site will
result in a very competitive power tariff.
GCM can upon approval of the Phulbari Project therefore help the
Bangladesh Government meet about one-third of its planned 2030
coal-fired power generation.
In the period under review, no further impairment charge has
been taken to the carrying value of our investment.
Universal Coal Resources Pte Ltd
-- Coal Project, Indonesia
-- 15 per cent redeemable convertible note
In May 2016, Polo's subsidiary, PIL, has entered into a secured
S$5,000,000 nominal value 15 per cent redeemable convertible note
("Note") with Universal Coal Resources Pte Ltd ("Universal").
Universal is a company incorporated in Singapore, which, in
turn, has entered into a conditional agreement to acquire an
indirect 75 per cent interest in PT Transcoal Minergy Coal Project
("TCM"), a company incorporated in Indonesia, from a Pan Asia
Corporation Ltd. (ASX: PZC) subsidiary.
TCM is the owner of a Production Operation Mining Business
Licence (being an Indonesian business licence), in respect of a
mining concession area in Mantewe District, Tanah Bumbu Regency,
South Kalimantan Province, Indonesia. This comprises of 3,440
hectares ("TCM Coal Project") and is a major coal producing
province in Indonesia. The TCM Coal Project is focused on
developing a two million tonnes ("Mt") per annum underground mine
delivering a high quality Bituminous Coal saleable product of some
6,200 kcal/kg specific energy (GAR - Gross as Received). The
current JORC Resource of 129 Mt (measured, indicated and inferred)*
has been derived from the southern area of the concession and there
is potential to upgrade and increase the resource base through
drilling the northern area. TCM's production permit extends to
April 2028. Further drilling and a full final feasibility study are
required to be completed and forestry approval obtained prior to
commencement of mine development. The TCM Coal Project will utilise
existing coal transportation infrastructure including a 50
kilometre haul road to the river port at Batulicin, a major coal
shipping centre.
Universal is targeting a Singapore Stock Exchange ("SGX")
Catalist Board listing and the Note entitles Polo to convert the
principal outstanding plus any accrued interest into not less than
20 per cent of the share capital of Universal as enlarged by such
conversion at any time up to 18 months from draw-down, or earlier
upon the receipt of approval in principle to list. The Note is
repayable 18 months from draw-down unless previously converted.
Universal has been coordinating with relevant authority to
procure forestry permit for the TCM Coal Project and the company is
currently in the final stages and hopes to complete the process and
obtain the forestry license which is an important piece in enabling
work to commence on site. At the same time, Universal are also
engaging discussion with parties exploring the possibility of
contractual development of the coal mine. Upon receipt of the
forestry license, Universal will then proceed to appoint qualified
person to conduct an Independent Qualified Person Report and
valuation report which are required for approval of SGX. Universal
also intends to acquire a coal trading company prior to submission
on SGX.
Pursuant to the terms of the Note, Universal was required to,
amongst others, deliver the approval of the shareholders of Pan
Asia for the disposal of TCM to Universal within 3 months from the
date of the Note. As at the date hereof, this approval has not been
obtained and a default of the terms of the Note remains. PIL has
served notice on Universal and the parties who provided security,
namely PZC and Mr Boelio Muliadi, and is currently in discussions
with them on a without prejudice basis for an amicable
resolution.
Lithium, Iron, Vanadium and Precious Metals
Ironstone Resources Limited
-- Lithium, Iron, Vanadium and Precious Metals, Canada
-- 18.84 per cent equity interest
Ironstone Resources Limited ("Ironstone"), headquartered in
Calgary, Alberta is advancing development of its Clear Hills
Project located in the Peace Region of NW Alberta. Featuring a
large compliant poly-metallic iron and vanadium resource and
lithium-bearing brines, quality infrastructure, high value
commodities, top tier partners and local and institutional support
- the Clear Hills Project is designed to produce valuable
commodities for the advanced manufacturing and renewable energy
industries.
In April 2016, Ironstone completed its Strategic Plan designed
to guide the company through its Clear Hills Project
commercialization phase. Ironstone's partner, North American Coal,
an industry leader in cost-effective open pit mining, has completed
a Conceptual Mine Plan on the Clear Hills Project, featuring a
relatively low-cost open pit mine design and
environmentally-friendly electric drag-lines for overburden removal
and surface miners to strip the ore body.
Ironstone's strategic plan includes two significant initiatives
to be undertaken in parallel this year, to advance its Clear Hills
Project through feasibility (FS) stages in 2018, which are
highlighted below.
Production of Lithium Carbonate from Clear Hills lithium-rich
formation brines
With the burgeoning demand for lithium and vanadium "electric
metals" needed for batteries for use in electric cars, consumer
electronics and renewable energy storage, the spotlight has grown
on companies like Ironstone. In addition to owning a significant
resource of vanadium pentoxide in the Clear Hills (2.45 billion
pounds contained), Ironstone holds the mineral rights to lithium,
and other performance elements such as potash, bromine and boron,
in the Devonian-age reservoirs that underlie its permits. These
carbonate reservoirs that typically produce oil and gas, also
contain significant amounts of formation waters with elevated
concentrations of lithium, a key component of rechargeable
batteries.
Since solar evaporation is untenable in northern climates, a key
element in commercializing lithium production from formation brines
is to rapidly and economically pre-concentrate the lithium within a
short time period prior to refining the lithium into its marketable
carbonate form. Ironstone has been working with a Canadian company
with expertise in remediating waste and production waters, and has
successfully demonstrated that its patented technology is
well-suited to pre-concentrating lithium in brines. An exclusive
global license has been negotiated to between the companies to
implement the technology to process Ironstone's Clear Hills brines,
in addition to seeking potential third-party licensing
opportunities. The jointly-developed process will be known as
LiREC(R) .
Following the above, Ironstone entered into a Letter of Intent
with a junior TSX-V publicly traded resource company, Greatbanks
Resources Ltd, seeking to acquire a 50 per cent interest for C$2
million in a new company created by Ironstone to commercially
develop its lithium resource and technology assets. Subject to
executing a Definitive Agreement, the new jointly-owned Alberta
corporation, will fast-track the commercial development of the
Clear Hills lithium resource and LiREC(R) technology over an
18-month period. After additional pre-feasibility level evaluations
are conducted in March 2017, a LiREC(R) demonstration pilot test
will be conducted in the summer months in the Clear Hills leading
to completing a feasibility study in Q1 2018 for a commercial 2,500
tonne per year lithium carbonate plant.
Refined High-Purity Metal Powders - Iron, Vanadium and
Cobalt
Ironstone was approached by a Canadian company specializing in
the production and marketing of specialized metal powders for
unique vertical markets including the medical, additive
manufacturing (3D printing) and specialized automotive and
aerospace powder metallurgical parts manufacturing. Of keen
interest to the company is the close proximity of Ironstone's
large, compliant Clear Hills iron and vanadium resource in
business-friendly Alberta.
In order to determine the efficacy of the company's metal
refining technology, Ironstone submitted samples of its ore for
baseline tests in late 2016. Extremely positive test results with
high recoveries of high-purity iron were reported to Ironstone in
January 2017. Based on the successful evaluations, Ironstone will
be entering into a business relationship with the company, and will
then conduct pilot tests in Q2 2017 with the results to be reported
in a pre-feasibility study ("PFS") level report in Q3 this year.
Following the PFS, a large-scale demonstration project will be
conducted leading to a bankable feasibility study, with completion
anticipated in Q2 2018.
In addition to producing refined iron powders, recovery of
vanadium (and cobalt) will be determined using complementary
technologies developed by the company. Refined metal powders
typically sell for between C$5,000 to C$10,000 per tonne in the
world market today, and are highly sought after due to their high
purity and flexibility of application.
Phosphate
Celamin Holdings NL (ASX: CNL)
-- Phosphate, Tunisia
-- 33.23 per cent equity interest
On 20 October 2016, Celamin issued an update regarding the
arbitration to resolve the dispute between its wholly owned
subsidiary Celamin Limited and its joint venture partner Tunisian
Mining Services ("TMS") in relation to the fraudulent transfer to
TMS of Celamin's 51 per cent shareholding in Chaketma Phosphates SA
("CPSA").
The sole arbitrator appointed by the International Court of
Arbitration of the International Chamber of Commerce ("ICC") has
considered the jurisdictional challenges raised by TMS and has
issued an award confirming Celamin's position regarding
jurisdiction of the arbitrator and the ICC. The arbitration
proceedings on the merits to recover Celamin's interests will now
continue.
Celamin has already been granted certain emergency and later
interim orders from the sole arbitrator against TMS (refer to
Celamin's ASX release dated 14 April 2016) preserving the status
quo regarding CPSA's share and assets until the dispute is finally
determined. These orders were made without prejudice to the
decision of the sole arbitrator on the merits of the case. These
orders continue in force for the purpose of preventing TMS's
disposal of CPSA's shares and assets and ensuring a continuous
disclosure of information to Celamin in relation to CPSA activity
and the Chaketma Permit.
TMS has not complied with these orders to date and penalties
have been ordered for failure to comply.
The arbitrator did not accept jurisdiction over CPSA and CPSA
will not continue as a party to the arbitration on the merits of
the case. Celamin's board is of the view that this will not affect
either the relief sought or the enforceability of any orders
against TMS.
Polo believes both that Celamin will be sufficiently funded
through the period necessary to resolve the dispute and has been
advised by Celamin's management that the dispute will be resolved
in Celamin's favour. Polo further appreciates that the legal
process has restricted Celamin making announcements.
The full details of the background of the dispute can be found
at www.celaminnl.com.au and the Celamin Half Year Report for 31
December 2015.
Copper
Weatherly International Plc (AIM; WTI)
-- Copper, Namibia
-- 5.2 per cent equity interest
Weatherly's core asset is the Tschudi open pit heap leach SX/EW
copper mine. Production at its Otjihase and Matchless underground
mines ("Central Operations") remains suspended from 2015 when the
copper price dropped below US$5,000/tonne. The Central Operations
have potential and remain in project development status. Tschudi
open pit operation is based on:
o Resources (JORC): 49.7Mt at 0.8% Cu (0.3% Cu cut off)
o Open Pit Reserve: 22.7Mt at 0.85% Cu
o Mine life: 9 years
o Processing rate: 2.6MT/year ore
o Mining Strip Ratio: 6.3 to 1 (average over life of mine)
o Plant Design Capacity: 17,000 tonnes per annum copper
cathode
During Q2 2016 (in the lead-up to the reporting period) the
Tschudi open pit mine encountered unexpected excessive groundwater
inflows that negatively impacted mine production and Weatherly's
ability to maintain scheduled copper production rates. This serious
problem was brought under control during the reporting period.
Weatherly is now working on a long-term groundwater management
plan that aims to extract groundwater ahead of mine development
thus reducing risk of future mining production delays and at the
same time reducing the overall groundwater management cost.
Tschudi production for the half year to 31 December 2016 was
8,137 tonnes Copper Cathode with a Production C1 costs US$ 4,603
per tonne.
At Central Operations, safe and productive underground mining
skills developments are critical to unlocking the opportunity to
resume production at sustainable unit costs in future. Weatherly
has identified a low-risk and potentially incrementally
cash-generative opportunity to commence with its skills development
programme at Otjihase. Weatherly intends investigating the
potential for such skills development to support a strategic goal
of achieving 10-12ktpa of contained copper in concentrate from the
underground mines at C1 costs below US$4,400 per tonne (US$2/lb).
Weatherly plans to study the opportunity further before taking any
decisions to proceed.
Weatherly also announced during the reporting period that it has
entered into a Cooperation Agreement in respect to the Exclusive
Prospecting License 5772 covering the Ongombo prospect area within
25km of the Otjihase concentrator. The agreement clarifies the
intention of the two parties to work together to seek to develop
mining prospects in the vicinity of the Otjihase concentrator which
may otherwise not be viable. The parties will initially share
technical information on their respective projects. Previous
holders of prospecting licenses over the Ongombo project reported a
JORC compliant resource of 10.5Mt @ 1.6 per cent Cu in 2012.
While spot copper prices increased notably in December 2016
(hovered within the range US$5,500-6,000 per tonne), Weatherly
advised in January 2017 that certain hedges had been implemented
prior to that price increase and during the second half of the
financial year the Company currently has prices for 3,400 tonnes of
production fixed at US$5,077 per tonne. This hedging position is in
addition to the option (but not the obligation) to purchase up to
700 tonnes per month at US$5,000 per tonne until May 2017 held by
Orion Mine Finance (Master) Fund I LP (Orion). This was agreed and
announced on 2 June 2016 as a fee in consideration of deferred
repayment of loan amounts due. Beyond the current financial year
the Company has a hedging commitment of 450 tonnes of copper at
US$5,102 per tonne.
Weatherly announced on 23 February 2017 that a rescheduling of
repayments in relation to the facility agreement between Orion Mine
Finance and Weatherly's subsidiary, Ongopolo Mining Limited, had
been concluded.
Financial Position
The Group reported an operating loss of US$1.02 million for the
six months to 31 December 2016
(31 December 2015: US$3.04 million). As at 20 March 2017, the
Group had a net position of cash, receivables and short term
investments of US$18.96 million (31 December 2016: US$19.52
million). Listed and unlisted investments at marked to market
value, cost and valuation amounted to US$45.07 million (31 December
2016: US$44.02 million). The combined total of cash, receivables,
payables, listed and unlisted investments was US$60.47 million as
of 20 March 2017 (31 December 2016: US$59.99 million) which is
equivalent to a Net Asset value of approximately 15.643 pence per
Polo share (31 December 2016: 15.636 pence per share).
The Directors have reviewed the Group's budget for 2016, as well
as longer term financial cash flow projections and have considered
a range of different scenarios together with their associated risks
and uncertainties, and the impact of these scenarios on the
Company's cash balances. Additionally, the Directors have assessed
the likelihood of future funding requirements. Based on these
activities, the Directors are satisfied that the Company maintains
a healthy financial position from the date of the signing of these
financial statements, enabling Polo to take a flexible approach to
the acquisition and disposal of investments.
I would like to thank all our shareholders, partners and
advisers for their continuing support.
Datuk Michael Tang, PJN
Executive Chairman
Polo Resources Limited
("Polo", "Polo Resources" or the "Company")
Unaudited Interim Results for the six months ended 31 December
2016
POLO RESOURCES LTD
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 31 DECEMBER 2016
6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2016
2016 2015
Note (unaudited) (unaudited) (audited)
$ 000's $ 000's $ 000's
Gain / (Loss) on sale
of investments (4) - 25
Investment income 15 884 900
Impairment of AFS
investments - - (15,685)
Impairment of associates - (2,033) -
Administrative & exploration
expenses (1,040) (1,320) (2,917)
Share options expensed - (570) (727)
Expensed exploration
costs - - (1,275)
Impairment of exploration
and evaluation costs - - (13,000)
Currency exchange
gain 5 2 -
Group operating (loss) (1,024) (3,037) (32,679)
------------- ------------- -----------
Share of associates
results (333) (497) (822)
Negative goodwill
written-off - 1,615
Finance revenue 80 70 692
Other income - - 37
(Loss) before taxation (1,277) (3,464) (31,157)
Income tax expense - - -
Retained (loss) for
the financial period (1,277) (3,464) (31,157)
------------- ------------- -----------
Attributable to:
Equity holders of
the parent (1,276) (3,463) (29,723)
Non-controlling interests (1) (1) (1,434)
------------- -------------
(1,277) (3,464) (31,157) 7,154
Earnings per share: 2
Basic earnings per
share (US cents) (0.41) (1.23) (10.64)
Diluted earnings per
share (US cents) (0.40) (1.14) (10.49)
POLO RESOURCES LTD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHSED 31 DECEMBER 2016
6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2016
2016 2015
(unaudited) (unaudited) (audited)
$ 000's $ 000's $ 000's
Retained (loss) for
the period (1,277) (3,464) (31,157)
Gain/(loss) on market
value revaluation
of available for sale
investments 4,341 (2,363) 2,289
Currency translation
differences (249) (250) (162)
Other comprehensive
income for the period
net of taxation 4,092 (2,613) 2,127
------------- ------------- -----------
Total comprehensive
income 2,815 (6,077) (29,030)
------------- ------------- -----------
POLO RESOURCES LTD
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2016
31 December 31 December 30 June
2016 2015 2016
Note (unaudited) (unaudited) (audited)
$ 000's $ 000's $ 000's
Non-current assets
Intangible assets - - -
- licences and exploration
costs
Tangible assets 5,256 18,386 4,598
Interest in associates 3 4,550 5,099 4,883
Available for sale
investments 4 29,558 30,223 25,452
Trade and other receivables 3,678 3,542 3,603
Total non-current
assets 43,042 57,250 38,536
-------------- ------------- -----------
Current assets
Trade and other receivables 2,959 589 2,449
Available for sale
investments 4 6,528 2,767 5,167
Cash and cash equivalents 6,359 15,756 9,615
-------------- ------------- -----------
Total current assets 15,846 19,112 17,231
-------------- ------------- -----------
Total Assets 58,888 76,362 55,767
-------------- ------------- -----------
Current Liabilities
Trade and other payables (3,557) (3,331) (3,251)
-------------- ------------- -----------
Total Liabilities (3,557) (3,331) (3,251)
-------------- ------------- -----------
Net Assets 55,331 73,031 52,516
============== ============= ===========
Shareholders' equity
Share capital - - -
Share premium 306,714 304,549 306,714
Share based payment
reserve 908 2,983 908
Foreign exchange
reserve 17,437 17,598 17,686
Available for sale
investments reserve 2,355 (7,086) (2,434)
Retained earnings (269,049) (243,297) (267,325)
Minority interest (3,034) (1,716) (3,033)
-------------- ------------- -----------
Total Equity 55,331 73,031 52,516
============== ============= ===========
POLO RESOURCES LTD
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHSED 31 DECEMBER 2016
6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2016
2016 2015
(unaudited) (unaudited) (audited)
Cash flows from operating $ 000's $ 000's $ 000's
activities
Operating (loss) (1,024) (3,037) (32,679)
Decrease/ (increase)
in trade and other receivables (510) 418 (1,442)
Increase in trade and
other payables 306 81 1
(Increase) in available
for sale investments (1,122) (5,067) (8,771)
Foreign exchange (gain)/
loss (5) (2) (5)
Share options expensed - 570 727
Impairment of AFS investments - - 15,685
Impairment of associates - 2,033 -
Loss on sale of PPE - - -
Depreciation and impairment - - 13,731
------------- ------------- -----------
Net cash (outflow) from
operating activities (2,355) (5,004) (12,753)
------------- ------------- -----------
Cash flows from investing
activities
Finance revenue 80 70 692
Other income - - 37
Receipts/(Payments) from/to
sale/purchase of tangible
assets (716) (542) -
Loan (advanced)/repayments
to/from third party (75) (70) (131)
Net cash (outflow) from
investing activities (711) (542) 598
------------- ------------- -----------
Cash flows from financing
activities
Issue of ordinary share - - -
capital
Net cash (outflow) from - - -
financing activities
------------- ------------- -----------
Net (decrease) in cash
and cash equivalents (3,066) (5,546) (12,155)
Cash and cash equivalents
at beginning of period 9,615 21,550 21,550
Exchange (loss)/ gain
on cash and cash equivalents (190) (248) 220
------------- ------------- -----------
Cash and cash equivalents
at end of period 6,359 15,756 9,615
------------- ------------- -----------
POLO RESOURCES LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
FOR THE 6 MONTHSED 31 DECEMBER 2016
Available
for Foreign Share
sale currency based Non-
Equity investment translation payment Retained Controlling Total
Contribution reserve reserve reserve earnings Total Interest Equity
Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $000's $ 000's
(unaudited)
As at
1 July
2016 306,714 (2,434) 17,686 908 (267,325) 55,549 (3,033) 52,516
(Loss)
for the
period - - - - (1,276) (1,276) (1) (1,277)
Gain/(Loss)
on market
value
revaluation
of available
for sale
investments - 4,341 - - - 4,341 - 4,341
Transfer
to income
statement - 448 - - (448) - - -
Currency
translation
differences - (249) - - (249) - (249)
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
Total
Comprehensive
income - 4,789 (249) - (1,724) 2,816 (1) 2,815
Share - - - - - - - -
capital
issued
Share - - - - - - - -
based
payments
Share
options
expired
Total - - - - - - - -
contributions
by and
distributions
to owners
of the
Company
As at
31 December
2016 306,714 2,355 17,437 908 (269,049) 58,365 (3,034) 55,331
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
Available
for Foreign Share
sale currency based Non-
Equity investment translation payment Retained Controlling Total
Contribution reserve reserve reserve earnings Total Interest equity
Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $000's $ 000's
(unaudited)
As at
1 July
2015 303,059 (4,723) 17,848 2,413 (239,834) 78,763 (1,715) 77,048
(Loss)
for the
period - - - - (3,463) (3,463) (1) (3,464)
(Loss)
on
revaluation
of available
for sale
investments - (2,363) - - - (2,363) - (2,363)
Currency
translation
differences - - (250) - - (250) - (250)
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
Total
comprehensive
income - (2,363) (250) - (3,463) (6,076) (1) (6,077)
Share
capital
issued 1,490 - - - - 1,490 - 1.490
Share
based
payments - - - 570 - 570 - 570
Total
contributions
by and
distributions
to owners
of the
Company 1,490 - - 570 - 2,060 - 2,060
As at
31 December
2015 304,549 (7,086) 17,598 2,983 (243,297) 74,747 (1,716) 73,031
-------------- ------------ ------------- --------- ---------- -------- ------------- --------
POLO RESOURCES LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
(continued)
FOR THE 6 MONTHSED 31 DECEMBER 2016
Equity Available Foreign Share Retained Total Non- Total
Contribution for currency based earnings Controlling equity
sale translation payment Interest
investment reserve reserve
reserve
Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $000's $ 000's
(audited)
As at 1
July 2015 303,059 (4,723) 17,848 2,413 (239,834) 78,763 (1,715) 77,048
(Loss) for
the period - - - - (29,723) (29,723) (1,434) (31,157)
Gain on
market value
revaluation
of available
for sale
investments - 2,289 - - - 2,289 - 2,289
Currency
translation
differences - - (162) - - (162) - (162)
------------- ------------ ------------ --------- ---------- --------- ------------- ---------
Total
Comprehensive
income - 2,289 (162) - (29,723) (27,596) (1,434) (29,030)
Share based
payments - - - 727 - 727 - 727
Share options
expired - - - (2,232) 2,232 - - -
Share issued 3,655 - - - - 3,655 - 3,655
------------- ------------ ------------ --------- ---------- --------- ------------- ---------
Total
contributions
by and
distributions
to owners
of the
Company 3,655 - - (1,505) 2,232 4,382 - 4,382
------------- ------------ ------------ --------- ---------- --------- ------------- ---------
As at 30
June 2016 306,714 (2,434) 17,686 908 (267,325) 55,549 (3,033) 52,516
------------- ------------ ------------ --------- ---------- --------- ------------- ---------
POLO RESOURCES LTD
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE 6 MONTHSED 31 DECEMBER 2016
1. Basis of preparation
The consolidated financial statements have been prepared under
the historical cost convention and on a going concern basis and in
accordance with International Financial Reporting Standards and
IFRIC interpretations adopted for use in the European Union
("IFRS") and those parts of the BVI Business Companies Act
applicable to companies reporting under IFRS.
The financial information for the period ended 31 December 2016
has not been audited or reviewed in accordance with the
International Standard on Review Engagements 2410 issued by the
Auditing Practices Board. The figures were prepared using
applicable accounting policies and practices consistent with those
adopted in the statutory accounts for the period ended 30 June 2016
and as expected to be adopted in the statutory accounts for the
year ending 30 June 2017. The figures for the period ended 30 June
2016 have been extracted from the accounts for the period ended 30
June 2016, which are available on the Company's website at
www.poloresources.com, and contain an unqualified audit report.
The financial information contained in this document does not
constitute statutory financial statements. In the opinion of the
directors the financial information for this period fairly presents
the financial position, results of operations and cash flows for
this period.
Statement of compliance
These condensed consolidated interim financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union with the
exception of International Accounting Standard ('IAS') 34 - Interim
Financial Reporting. Accordingly the interim financial statements
do not include all of the information or disclosures required in
the annual financial statements and should be read in conjunction
with the Group's 2016 annual financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Polo Resources Limited and its controlled entities.
The financial statements of controlled entities are included in the
consolidated financial statements from the date control commences
until the date control ceases.
The financial statements of subsidiaries are prepared for the
same reporting period as the parent company, using consistent
accounting policies. All inter-company balances and transactions
have been eliminated in full.
Foreign currencies
(a) Functional and presentation currency
The functional currency of each entity is determined after
consideration of the primary economic environment of the entity.
The group's presentational currency is US Dollar ($).
(b) Group companies
The results and financial position of all the group entities are
translated into the presentation currency as follows:
-- Assets, liabilities and equity for each balance sheet
presented are translated at the closing rate at the date of that
balance sheet;
-- Income and expenses for each income statement are translated at average exchange rates; and
-- All resulting exchange differences are recognized as a separate component of equity.
(c) Rates of exchange
US$ to one unit of foreign currency were as follows:
Average Average
As at for the As at 30 for the
31 December 6 months June 2016 period
2016 to 31 December to 30 June
2016 2016
Pound Sterling 1.23016 1.27892 1.33949 N/A
Australian
Dollar 0.72261 0.75392 0.74173 N/A
Canadian
Dollar 0.74241 0.75825 0.76881 N/A
Singapore
Dollar 0.69139 0.72481 0.74056 N/A
-------------- ---------------- ------------ ------------
POLO RESOURCES LTD
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE 6 MONTHSED 31 DECEMBER 2016
2. Earnings per share
The calculation of earnings per share is based on the (loss)
after taxation divided by the weighted average number of shares in
issue during the period:
6 Months 6 Months
ended 31 ended 31
December December
2016 2015
(unaudited) (unaudited) Year 30
June 2016
(audited)
Net (loss) after
taxation ($000's) (1,277) (3,464) (31,157)
Weighted average
number of ordinary
shares used in calculating
basic earnings per
share (millions) 311.79 282.68 292.93
------------- ------------- ------------
Basic (loss) per
share (expressed
in US cents) (0.41) (1.23) (10.64)
------------- ------------- ------------
Weighted average
number of ordinary
shares used in calculating
fully diluted earnings
per share (millions) 315.79 304.18 296.93
------------- ------------- ------------
Diluted (loss) per
share (expressed
in US cents) (0.40) (1.14) (10.49)
------------- ------------- ------------
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The company
has one category of dilutive potential ordinary shares, namely
share options. For share options, a calculation is done to
determine the number of shares that could have been acquired at
fair value (determine as the average period market share price of
the company's shares) based on the monetary value of the
subscription rights attached to outstanding share options. The
number of shares calculated as above is compared with the number of
shares that would have been issued assuming the exercise of the
share options.
3. Interest in associates
2016
$ 000's
Group
At beginning of the period 4,883
Share of associates' loss
for the period (333)
Impairment charge -
As at 31 December 2016 4,550
-----------
The breakdown of the carrying values and fair
values at the balance sheet date of the Group's
interest in listed and unlisted associates
is as follows:
Non-current assets Carrying Fair Value
Value
$ 000's $ 000's
GCM Resources Plc (listed) 3,244 6,822
Celamin Holdings NL (listed) 1,306 2,385
4,550 9,207
--------- -----------
The breakdown of the fair values as at 20
March 2017 of the Group's interest in listed
and unlisted associates is as follows:
Non-current assets Fair Value
$ 000's
GCM Resources Plc (listed) 5,030
Celamin Holdings NL (listed) 2,541
7,571
-----------
4. Available for sale investments
Group - Listed & Unlisted $ 000's
Investments
At 1 July 2016 30,619
Acquired during the period 2,187
Disposal during the period (1,057)
Realised gain / (loss) on
disposal (4)
Movement in market value 4,341
--------
At 31 December 2016 36,086
--------
The available for sale investments
splits are as below:
Non-current assets - listed 19,960
Non-current assets - unlisted 9,598
Current assets - listed 5,731
Current assets - unlisted 797
--------
36,086
--------
Available-for-sale investments comprise investments in unlisted
and listed securities (which are traded on regulated stock markets)
and which are held by the Group as a mix of strategic and short
term investments.
5. Events after the end of the reporting period
There are no events after the end of the reporting period to
disclose.
6. Financial information
The financial information set out above does not constitute the
Group's statutory accounts for the period ended 30 June 2016, but
is derived from those accounts. Statutory accounts for the period
have been delivered to the shareholders, and the auditors made an
unqualified report thereon.
A copy of this interim financial report is available on the
Company's website: www.poloresources.com
Corporate Information
Registered number 1406187 registered in British Virgin Islands
Directors Datuk Michael Tang - Executive Chairman
Gary Lye - Non-Executive Director
Kian Meng Cheah - Non-Executive Director
Registered Office Craigmuir Chambers
Road Town, Tortola
British Virgin Islands VG 1110
Email: info@poloresources.com
Website: www.poloresources.com
Auditors Chapman Davis LLP
2 Chapel Court
London SE1 1HH, United Kingdom
Nominated Advisor ZAI Corporate Finance Ltd
Staple Court, 11 Staple inn
London Wc1V 7QH, United Kingdom
Broker Liberum Capital Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London EC2Y 9LY, United Kingdom
Principal Banker HSBC Bank Plc
Fenton House,
85-89 New London Road
Chelmsford, ESSEX CM2 0PP, United Kingdom
Registrars Computershare Investor Services (Jersey) Limited
Queensway House
Hilgrove Street
St Helier
Jersey JE1 1ES, Channel Islands
Depositary Interest Computershare Investor Services Plc
The Pavilions
Bridgwater Road
Bristol BS99 6ZY, United Kingdom
Solicitors for BVI Law Solicitors for United Kingdom Law
Harney Westwood & Riegels LLP Dentons UKMEA LLP
Third Floor, 7 Ludgate Broadway One Fleet Place
London EC4V 6DX London EC4M 7WS
United Kingdom United Kingdom
Walkers Solicitors for Australian Law
171 Main Street Hunt & Humphry
PO Box 92, Road Town 15 Colin Street, West Perth 6005
Tortola VG1110 Western Australia
British Virgin Islands
Solicitors for Canadian Law
Borden Ladner Gervais LLP
Scotia Plaza, 40 King Street West, 44th Floor
Toronto, Ontario, M5H 3Y4
Canada
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEUFDUFWSEED
(END) Dow Jones Newswires
March 29, 2017 09:32 ET (13:32 GMT)
Polo Resources (LSE:POL)
Historical Stock Chart
From Apr 2024 to May 2024
Polo Resources (LSE:POL)
Historical Stock Chart
From May 2023 to May 2024