TIDMGLR
RNS Number : 3876S
Galileo Resources PLC
20 December 2016
20 December 2016
Galileo Resources PLC
("Galileo" or "the Company" or "the Group")
Interim results for the six months ended 30 September 2016
Galileo, (AIM:GLR), the natural resource exploration and
development company focused on gold/copper in the USA and phosphate
/copper in South Africa , announces its unaudited interim results
for the six months ended 30 September 2016.
Overview
Period under review
South Africa Projects
o Independent modelling continued on a number of prospects on
the Concordia Copper (Cu) Project (Concordia) including Whyte's
West, Klondike, Wheal Julia and Homeep East.
o Desktop study of the modelling conceptualises a deposit of
potentially more than 750 million tonnes rock mass at a mean grade
0.57% Cu assuming 50% mineralisation.
o Geological information suggests that copper mineralisation on
Concordia is strongly associated with diorite rock type, which
previously was considered low grade and therefore uninteresting at
the time.
o Prospecting Right for Concordia was notarially executed and
renewed by the Department of Minerals Resources for a further three
years to 17 August 2019.
o In respect of the Glenover phosphate rare-earth project in the
Limpopo Province of South Africa, the option granted to Galileo's
JV partner Fer-Min-Ore (Pty) Ltd to acquire or otherwise
commercially collaborate with other third parties on the project
(as renewed on 26 February 2016) lapsed by mutual consent on 28
August 2016, with the parties agreeing to pursue alternative
strategic options jointly to advance the project.
USA Projects
o Galileo sold its Gabbs property in Nevada for USD2.5 million
cash
o Earn-In Agreement was executed with Orogen Gold Plc ("Orogen")
in respect of Galileo's Silverton gold-silver property in Nevada;
giving Orogen the right to earn an initial 51% interest in property
on spending USD400,000 over 18 months and the option to earn an
additional 24% interest in the property through a further
exploration spend of US$1.5 million over a subsequent 30 month
period. Galileo retains the right to participate pro rata after
Orogen's initial 51% earn-in
o Additional 210 unpatented claims acquired on Ferber gold
property in North Eastern Nevada
o All Nevada property claim fees paid to August 2017
Post period under review
o Induced polarity (IP) geophysics survey Phase 1 (of 2 phases),
commenced early October 2016 on the Homeep Trend comprising the
contiguous Homeep East, Koeƫlkop and Whyte's West prospects and
completed late November.
o Phase 2 geophysics survey followed in late November 2016 on
the Shirley Trend some 12 km west northwest of the Homeep Trend and
completed mid-December 2016. This last survey concluded Concordia's
geophysics and field exploration programme for year 2016.
o The total geophysics programme to date has covered partially
only two of the eleven priority ranked prospects on Concordia
o Summary report consolidating the geophysics of Homeep and
Shirley Trends and planning of an exploration programme including
drilling expected in January 2017.
o Orogen commenced drilling on the Silverton project in October
2016 with results anticipated early 2017.
o Initial rock-chip sampling (23 samples) carried out at Ferber.
Eleven samples returned gold values exceeding 0.2g/t and seven
exceeded 1g/t with a high of 10.8g/t.
Chairman's statement
In the opening remarks of last year's Chairman's report I
commented on the value erosion of all companies in the natural
resource sector, whether the companies were big or small. I am
pleased to say that financing activity improved significantly
during this review period but at the time of writing has slowed yet
again. I am however very pleased to report that the copper price
has responded to the long term prognosis that copper will be in
short supply as we approach 2020. This will impact on our key
project, Concordia.
The highlights above are detailed in announcements during the
period under review and post period all of which show significant
progress within the group activities.
The sale of the Gabbs property resulted in the Company being
able to progress its Concordia project at a rapid pace without
suffering the severe dilution that might have occurred had the
Company been required to make a significant placing. There remains
sufficient funds to advance the Company's mid-term business plan
without recourse to further placings.
Our geophysics work has produced very good results, which would
be very satisfactory in a Greenfield situation. In the case of
Concordia, where the geophysics signature is tested against
previous mining history then the results can only be described as
exciting. The summary report on this work will be presented in
early January and then we will move on to the necessary drill
programme, in order to confirm the veracity of the data against
historical mining. Of particular importance will be to tie the
geophysics to an approximate grade profile. The drill testing is
expected to commence by mid February 2017.
The Ferber project sits well in a Nevada renaissance, which
extends throughout Nevada but specifically in the Ferber area. We
are well placed in a trend which is described in terms of an
additional Carlin-type trend system. Whilst our focus is on
Concordia, we will progress Ferber during the coming year to add
understanding and value.
The Glenover Phosphate project in North West South Africa
continues to be of interest to the trade. We announced, on 30
August 2016, that the exclusive option to Fer-Min-Ore had expired
on the 28 August 2016 and the shareholders would work together
towards a mutual and beneficial business plan. This activity
continues and we are confident of a favourable outcome during the
early 2017.
The Group's loss for the six months, before and after taxation
and before taking items of other comprehensive income into account,
was GBP538,075 (2015: loss of GBP170,971). The Group's loss per
ordinary share was 0.3 pence (2015: loss of 0.1 pence).
I look forward to the Company advancing its projects and
prospects with the underlying criterion of shareholder return being
our key focus.
Colin Bird
Chairman
20 December 2015
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Colin Bird, Chairman & Tel +44 (0)20 7581 4477
CEO
Andrew Sarosi, Executive Tel +44 (0) 1752 221937
Director
www.galileoresources.com
Beaumont Cornish Limited Tel +44 (0)20 7628 3396
Nominated Advisor
Roland Cornish/James Biddle
Beaufort Securities Ltd Tel +44 (0)20 7382 8416
- Broker
Jon Belliss
Statement of Responsibility for the six months ended 30
September 2016
The directors are responsible for preparing the consolidated
interim financial statements for the six months ended 30 September
2016 and they acknowledge, to the best of their knowledge and
belief, that:
-- the consolidated interim financial statements for the six
months ended 30 September 2016 have been prepared in accordance
with IAS 34 - Interim Financial Reporting, as adopted by the
EU;
-- based on the information and explanations given by
management, the system of internal control provides reasonable
assurance that the financial records may be relied on for the
preparation of the consolidated interim financial statements.
However, any system of internal financial control can provide only
reasonable, and not absolute, assurance against material
misstatement or loss;
-- the going concern basis has been adopted in preparing the
consolidated interim financial statements and the directors of
Galileo have no reason to believe that the Group will not be a
going concern in the foreseeable future, based on forecasts and
available cash resources;
-- these consolidated interim financial statements support the viability of the Company; and
-- having reviewed the Group's financial position at the balance
sheet date and for the period ending on the anniversary of the date
of approval of these financial statements they are satisfied that
the Group has, or has access to, adequate resources to continue in
operational existence for the foreseeable future.
C Bird Chairman and Chief Executive Officer
A Sarosi Finance & Corporate Development Director
J R Wollenberg Non-Executive director
C Molefe Non-Executive Director
20 December 2016
CONSOLIDATED Six months Six months Year
STATEMENT ended ended ended
OF FINANCIAL 30 September 30 September 31 March
POSITION 2016 2015 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
ASSETS
2 295
Intangible assets 1 792 313 759 2 667 062
Investment in joint 1 907
ventures 2 190 153 780 1 868 370
Loans to joint
ventures 613 450 80 513 79 457
Other financial
assets 423 430 337 713 556 078
----------------------- ----------------------- --------------------
4 621
Non-current assets 5 019 346 770 5 170 967
----------------------- ----------------------- --------------------
Trade and other
receivables 43 183 32 528 20 453
Cash and cash
equivalents 1 404 096 220 802 135 086
----------------------- ----------------------- --------------------
Current assets 1 447 279 253 330 155 539
----------------------- ----------------------- --------------------
4 875
Total Assets 6 466 625 100 5 326 506
----------------------- ----------------------- --------------------
EQUITY AND
LIABILITIES
Share capital and
share 23 860 23 504 23 854
premium 957 707 957
Reserves 1 242 291 (160 320) 155 384
(19 073 (18 728 (18 977
Accumulated loss 443) 593) 249)
----------------------- ----------------------- --------------------
4 615
Equity 6 029 805 794 5 033 092
----------------------- ----------------------- --------------------
Liabilities
Other financial
liabilities 3 866 2 467 2 692
Non-current
liabilities 3 866 2 467 2 692
----------------------- ----------------------- --------------------
Trade and other
payables 432 954 256 839 290 722
----------------------- ----------------------- --------------------
Current liabilities 432 954 256 839 290 414
----------------------- ----------------------- --------------------
Total Liabilities 436 820
----------------------- ----------------------- --------------------
Total Equity and 4 875
liabilities 6 466 625 100 5 326 506
----------------------- ----------------------- --------------------
194 252 155 752
Shares in issue 721 721 193,752,721
Net asset value per
share
- pence 3.1 3.0 2.6
Net tangible asset
value
per share - pence 2.2 1.5 1.2
The statement of
financial
position has been
approved
by the board of
directors
and are signed off
by:
Colin Bird Andrew Sarosi
20 December 2016
Company number:
05679987
CONSOLIDATED Six months Six months Year
STATEMENT ended ended ended
OF COMPREHENSIVE 30 September 30 September 31 March
INCOME 2016 2015 2016
FOR THE SIX MONTHSED
30 SEPTEMBER 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue - - -
Operating expenses (515 923) (177 018) (435 862)
----------------------- ----------------------- --------------------
Operating loss (515 923) (177 018) (435 862)
Investment revenue 182 24 660 48 578
Finance costs - - (2)
Share of loss from
equity
accounted
investments (22 334) (18 613) (32 341)
Loss for the period (538 075) (170 971) (419 627)
Other comprehensive
income:
Exchange differences
on
translating foreign
operations 1 528 788 (680 576) (364 872)
----------------------- ----------------------- --------------------
Total comprehensive
income/(loss) 990 713 (851 547) (784 499)
----------------------- ----------------------- --------------------
Total comprehensive
income/(loss)
attributable to:
Owners of the parent 990 713 (851 547) (784 499)
Weighted average
number 193 996 124 783 146 992
of shares in issue 557 543 447
Loss per share -
pence
Basic and diluted
loss
per share (0.3) (0.1) (0.3)
STATEMENT OF CHANGES IN EQUITY as at 30 September 2016
Share Total Foreign Convertible Other Total Accumulated Total
capital share NDR reserves equity
Share
premium
capital currency instruments loss
Figures in Pound Sterling translation
reserve
reserve
-------------------------------------------------------------------------------- -------- ------------- ------------- ------- --------- ------------ --------
Group
Balance at 1
April 5 735 17 418 23 153 (1 314 1 047 (18 557 5 116
2015 137 570 707 704) 821 787 139 520 256 622) 341
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Loss for the 6 (419
months - - - - - - - (419 627) 627)
Other
comprehensive (364
income - - - (364 872) - - (364 872) - 872)
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Total
comprehensive
Loss for the (784
6 months - - - (364 872) - - (364 872) (419 627) 499)
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Issue of
shares 69 250 632 000 701 250 - - - - - 701 250
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Total
contributions
by and
distributions
to owners of
company
recognised
directly
in equity 69 250 632 000 701 250 - - - - - 701 250
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Balance at 1
April 5 804 18 050 23 854 (1 679 1 047 (18 977 5 033
2016 387 570 957 576) 821 787 139 155 384 249) 092
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Profit for the (538
6 months - - - - - - - (538 075) 075)
Other
comprehensive 1 528 1 528 1 528
income - - - 788 - - 788 - 788
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Total
comprehensive
income for 1 528 1 528
the 6 months - - - 788 - - 788 (538 075) 990 713
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Issue of
shares 500 5 500 6 000 - - - - - 6000
Transfer
between
reserves - - - (441 881) - - (441 881) 441 881 -
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Total
contributions
by and
distributions
to owners of
company
recognised
directly
in equity 500 5 500 6 000 (441 881) - - (441 881) 441 881 6,000
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
Balance at 30
September 5 804 18 056 23 860 1 047 1 242 (19 073 6 029
2016 887 070 957 (592 669) 821 787 139 291 443) 805
---------- ----------- ----------- ------------- --------- ----------- ------------- ----------- -----------
CONSOLIDATED STATEMENT OF Six months Six months Year
CASH FLOW FOR THE SIX MONTHS ended ended endedED 30 SEPTEMBER 2016 30 September 30 September 31 March
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Cash used in operations (350 441) (311 111) (459 601)
Interest income 182 45 45
Finance costs - - (2)
------------------------------- ----------------- ------------------
Net cash from operating
activities (350 259) (311 066) (459 558)
------------------------------- ----------------- ------------------
Sale of/(Addition to) intangible
assets 1 933 619 - (163 701)
Loans (advanced)/repaid (320 350) - 14 956
Sale of financial assets - - (138 732)
------------------------------- ----------------- ------------------
Net cash from investing
activities 1 613 269 - (287 477)
------------------------------- ----------------- ------------------
Proceeds on share issue 6 000 351 000 701 250
Repayment of other financial - - -
liabilities
------------------------------- ----------------- ------------------
Net cash flows from financing
activities 6 000 351 000 701 250
Total cash movement for the
6 months 1 269 010 39 934 (45 785)
Cash at the beginning of
the 6 months 135 086 180 871 180 871
------------------------------- ----------------- ------------------
Total cash at end of the
6 months 1 404 096 220 802 135 086
------------------------------- ----------------- ------------------
Notes to the Financial Statements
1. Status of interim report
The Group unaudited condensed interim results for the 6 months
ended 30 September 2016 have been prepared using the accounting
policies applied by the Company in its 31 March 2016 annual report,
which are in accordance with International Financial Reporting
Standards (IFRS and IFRC interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the EU("IFRS, including the SAICA financial reporting guides
as issued by the Accounting Practices Committee, IAS 34 - Interim
Financial Reporting, , the AIM rules of the London Stock Exchange
and the Companies Act 2006 (UK). This condensed consolidated
interim financial report does not include all notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 31 March 2016 and any public announcements by Galileo
Resources Plc. All monetary information is presented in the
presentation currency of the Company being Great British Pound. The
Group's principal accounting policies and assumptions have been
applied consistently over the current and prior comparative
financial period. The financial information for the year ended 31
March 2016 contained in this interim report does not constitute
statutory accounts as defined by section 435 of the Companies Act
2006. A copy of the statutory accounts for that year has been
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not contain a statement
under section 498(2)-(3) of the Companies Act 2006.
2. Basis of preparation
2.1. Basis of consolidation
The consolidated interim financial statements incorporate the
interim financial statements of the Company and all entities,
including special purpose entities, which are controlled by the
Company. Control exists when the Company has the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. The results of subsidiaries are
included in the consolidated interim financial statements from the
effective date of acquisition to the effective date of disposal.
Adjustments are made when necessary to the interim financial
statements of subsidiaries to bring their accounting policies in
line with those of the group. All intra-group transactions,
balances, income and expenses are eliminated in full on
consolidation.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified and recognised separately from the
group's interest therein, and are recognised within equity. Losses
of subsidiaries attributable to non-controlling interests are
allocated to the non-controlling interest even if this results in a
debit balance being recognised for non-controlling interest.
Transactions, which result in changes in ownership levels and/or
where the group has control of the subsidiary both before and after
the transaction, are regarded as equity transactions and are
recognised directly in the statement of changes in equity.
The difference between the fair value of consideration paid or
received and the movement in non-controlling interest for such
transactions is recognised in equity attributable to the owners of
the parent.
Where a subsidiary is disposed of and a non-controlling
shareholding is retained, the remaining investment is measured to
fair value with the adjustment to fair value recognised in profit
or loss as part of the gain or loss on disposal of the controlling
interest.
2.2 Accounting policies
The accounting policies and methods of computation have been
applied consistently throughout the Group and are consistent with
those for the financial year ended 31 March 2016.
2.3. Use of estimates and judgments
In preparing the interim financial statements, management is
required to make estimates and assumptions that affect the amounts
represented in the interim financial statements and related
disclosures. Use of available information and the application of
judgment are inherent in the formation of estimates. Actual results
in the future could differ from these estimates, which may be
material to the interim financial statements.
2.3.1 Options granted
Management used the intrinsic value model to determine the value
of the options issued at listing date and will use the
Black-Scholes formula for subsequent options being granted.
2.3.2 Fair value estimation
The fair value of financial instruments traded in active markets
(such as trading and available for sale securities) is based on
quoted market prices at the end of the reporting period. The quoted
market price used for financial assets held by the Group is the
current bid price.
The fair value of financial instruments that are not traded in
an active market (for example, over the counter derivatives) is
determined by using valuation techniques. The Group uses a variety
of methods and makes assumptions that are based on market
conditions existing at the end of each reporting period. Quoted
market prices or dealer quotes for similar instruments are used for
long-term debt. Other techniques, such as estimated discounted cash
flows, are used to determine fair value for the remaining financial
instruments. The fair value of interest rate swaps is calculated as
the present value of the estimated future cash flows. The fair
value of forward foreign exchange contracts is determined using
quoted forward exchange rates at the end of the reporting
period.
The carrying value less impairment provision of trade
receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the
Group for similar financial instruments.
2.4. Exploration and evaluation costs
Exploration and evaluation costs, including the costs of
acquiring licenses, are capitalised as exploration and evaluation
assets on an area of interest basis. Exploration and evaluation
assets are only recognised if the rights of the area of interest
are current and either:
-- the expenditures are expected to be recouped through
successful development and exploitation of the area of interest;
or
-- activities in the area of interest have not at the reporting
date, reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves and
active and significant operations in, or in relation to, the area
of interest are continuing.
No amortisation is recognised in respect of exploration and
evaluation expenditure. Amortisation of the exploration and
evaluation asset will start once mining commences on the related
exploration and evaluation asset.
Exploration and evaluation assets are assessed for impairment
if:
(i) sufficient data exist to determine technical feasibility and
commercial viability; and
(ii) facts and circumstances suggest that the carrying amount
exceeds the recoverable amount. For the purposes of impairment
testing, exploration and evaluation assets are allocated to cash
generating units ('CGU') to which the exploration activity
related.
Exploration and evaluation assets are carried forward in the
balance sheet under intangible assets.
2.5 Translation of foreign currencies
2.5.1 Functional and presentation currency
Items included in the interim financial statements of each of
the Group entities are measured using the currency of the primary
economic environment in which the entity operates (functional
currency).
The consolidated interim financial statements are presented in
Pound Sterling, which is the Group's functional and presentation
currency.
2.5.2 Foreign currency transactions
A foreign currency transaction is recorded, on initial
recognition by applying to the foreign currency amount the spot
exchange rate between the functional currency and the foreign
currency at the date of the transaction.
At the end of the reporting period:
-- foreign currency monetary items are translated using the closing rate;
-- non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate
at the date of the transaction; and
-- non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at the
date when the fair value was determined.
2.6 Going concern
The going concern basis has been adopted in preparing the
consolidated interim financial statements. The directors have no
reason to believe that the Group will not be a going concern in the
foreseeable future, based on forecasts and available cash
resources. These unaudited consolidated interim financial
statements support the viability of the Company. The directors have
reviewed the Group's financial position at the balance sheet date
and for the period ending on the anniversary of the date of
approval of these financial statements, and they are satisfied that
the Group has or has access to adequate resources to continue in
operational existence for the foreseeable future.
3. Segmental analysis
Business segments
The Group's business is the exploration and development of
copper and phosphate in South Africa and gold-copper in USA.
Geographical segments
An analysis of the loss on ordinary activities before taxation
is given below:
Six months Six months Year
ended ended
30 30
September September ended
2016 2015 31 March
(Unaudited) (Unaudited) 2016
(Audited)
GBP GBP GBP
Loss on ordinary activities
before taxation:
(172 (342
United Kingdom (323,203) 313) 629)
South Africa (21,895) 1 669 (32 341)
(192
USA 977) (327) (44 324)
(170 (419
(538 075) 971) 294)
------------ ------------ ----------
3. Taxation
The tax position for the period is estimated on the basis of the
anticipated tax rates applying for the full year and includes
adjustments to the prior year charge based upon final computations
for that period.
Deferred tax is recognised, without discounting, in respect of
all timing differences between the treatment of certain items for
taxation and accounting purposes, which have arisen, but not
reversed by, the balance sheet date, except as otherwise required
by IFRS 19.
Deferred tax assets are recognised to the extent that on the
basis of all available evidence, it can be regarded as more likely
than not that there will be suitable taxable profits from which the
future reversal of underlying timing differences can be
deducted.
No provision has been made for tax for the period under review
as the Company has no taxable income. The estimated tax loss
available for set off against future taxable income as 30 September
2016 GBP2 046 709 (2015: GBP1 578 545).
5. Earnings per share
The Group's loss for the six months, before and after taxation
and before taking items of other comprehensive income into account,
was GBP538 075 (2015: loss of GBP170 971). The Group's loss per
share was 0.3 pence (2015: loss of 0.1 pence).
Earnings per share has been calculated using a weighted average
number of shares in issue of 193 996 557 (2015: 124 783 543).
6. Intangible assets
As announced on 30 August 2016, the Company and its wholly owned
subsidiary St. Vincent Minerals US Inc (SVMUS) executed an Asset
Purchase Agreement (the "Agreement") with a subsidiary of Waterton
Precious Metals Fund II Cayman, LP (Waterton). Under the terms of
the Agreement, Waterton has purchased the Company's advanced Gabbs
gold-copper property in Nevada for a consideration of US$2.5
million cash. Included in operating expenses is a gain on the sale
of the Gabbs gold-copper property of GBP69 911. Realised foreign
currency translation reserves in an amount of GBP441 881 was
transferred directly in equity from the foreign currency
translation reserve to retained income.
The Company retains its greenfield Ferber copper-gold and Crow
Springs gold properties in Nevada.
7. Investment in joint venture
The total funding provided from inception of the project,
amounts to US$4.5 million, which results in Galileo's economic
interest in Glenover to be 33.99% as at 30 September 2016 (2015:
33.99%).
Galileo's portion of the loss in the joint venture for the
period under review amounted to GBP22 334 (2015: GBP18 613).
8. Availability of the Interim Results
Copies of the Interim Results for the six months ended 30
September 2016 will be posted on the Company's website
www.galileoresources.com and will be available to shareholders and
members of the public in hard copy and free of charge, from the
Company's London office at 1st Floor, 7-8 Kendrick Mews, South
Kensington, SW7 3HG, United Kingdom. Alternatively a downloadable
version is available from Company's website:
www.galileoresources.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FELFLSFMSEDE
(END) Dow Jones Newswires
December 20, 2016 09:43 ET (14:43 GMT)