Press releases
Results for the period ended 31 December 2008
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Chairman's Statement
I am pleased to present the first Annual Report of Obtala Resources Plc ("Obtala") for the period from 1 August 2007 to 31 December 2008.
Obtala is the holding company of a mineral exploration and development Group that was established on 1 August 2007 and which acquired Mindex Invest Ltd in November 2007, followed by the acquisition of Uragold Ltd. in February 2008.
The Group raised £6.0 million net of costs from investors during the period from 1 August 2007 to 31 December 2008, which included a share placing and admission to the AIM market in April 2008. The Group's loss before tax for the period amounted to £0.2 million and net equity attributable to shareholders of Obtala at 31 December 2008 amounted to £28.3 million inclusive of consolidated cash balances of £3.2 million, and a foreign exchange reserve of £7.5 million arising on retranslation of US$ denominated assets.
Exploration and development
The acquisition of Mindex and its 12 Tanzanian mineral licences at a cost of £15.0 million was settled by issue of 100 million new ordinary shares. The acquisition of Uragold and the 6 Tanzanian mineral licences held in its 75 per cent. subsidiary Uragold (T) Ltd, was for a cash consideration of US$1.86m. Atlas Africa Ltd, a local partner, holds the remaining 25 per cent. of the issued share capital of Uragold (T) but has granted to Uragold the exclusive option to purchase all or part of that 25 per cent. holding for cash of US$0.5 million. This option lapses after 2 years.
These acquisitions have been treated as a purchase of mining licences and provided the Group with an initial focus in gold, nickel, copper, iron ore and uranium opportunities in Tanzania, East Africa.
Our initial focus on Tanzania is primarily based upon recognition of Tanzania's stable geopolitical environment, established legal system and mining legislation, coupled with a fast growing mining industry with a relatively strong infrastructure to support this. Many of the Group's mineral licence assets have been primarily selected due to their proximity to large existing resources and producing assets which provides us with a favourable regional geology for exploration.
Since the AIM listing in April 2008, the Group has significantly increased its gold prospecting licence areas to 2,175 km2 following the award of 4 prospecting licences. The Group also subsequently acquired a Platinum exploration licence covering an area of 712 km2 as well as a further Uranium exploration licence which increased its Uranium holdings to 1,737 km2. As a result, the Group currently holds a portfolio of base metal mineral exploration licence assets in Tanzania comprised of exclusive or majority interests in a total of 24 licences as follows: 13 Gold; 2 Nickel; 3 Copper; 4 Uranium; 1 Platinum and 1 Iron ore.
In May 2008, the Group also acquired holdings of between 71 per cent. and 75 per cent. in 6 new emerald gemstone mining licences totaling 6 km2 in the Manyara area of Tanzania at a cost of US$450,000 and was subsequently granted a further 100 per cent. owned ruby gemstone licence in July 2008 covering an area of 2.77 km2 in the Morogoro District of Tanzania. These new gemstone licences provide Obtala with the foundations for creating a gemstone division and complement the Group's base metal licences portfolio as well as progressing the Group's strategy of working with local partners in the exploration and development of mineral assets, with an initial focus in Tanzania.
The Board
The Company's Board has been strengthened since our admission to the AIM market with the appointment of Simon Rollason as Managing Director and the appointment of Professor John Monhemius and Nicholas Clarke as Non-Executive Directors. Simon Rollason has over 18 years experience in mining and geological exploration having worked with both multi-nationals and junior resources companies on nickel, gold, copper, base metals and gemstone projects. Professor Monhemius is Professor of Mineral and Environmental Engineering at Imperial College, London and has over 40 years experience in gold, copper, nickel, zinc and other metals. Nicholas Clarke is a highly experienced Chartered Engineer and company director and is currently a Non-Executive Director to both Caledon Resources Plc and Sunkar Resources Plc.
Outlook and events subsequent to the year end
The Board was pleased to announce a placing of 9,450,000 new ordinary shares in February 2009, raising a gross cash amount of £1.6 million to fund potential investment opportunities for quality resource assets in Africa.
In March 2009, Obtala acquired a 23.0 per cent. interest in the ordinary shares of Kopane Diamond Developments, an AIM quoted diamond mining company with its main assets in Lesotho, through a private placing cash subscription of £1.75 million. In addition, the Company has made further market purchases of shares in Kopane to increase Obtala's current holding to 28.1 per cent. and I have been appointed to the role of Non-Executive Chairman of Kopane. The funds provided to Kopane under the share subscription will mainly be used to finance development and feasibility study work in respect of Kopane's main kimberlite pipe project at Liqhobong in Lesotho, in which it has a 75 per cent. interest and which has the potential to produce at a rate of over one million carats per annum for 20 years. I believe that this investment will be value enhancing for Obtala shareholders.
Furthermore, Obtala has completed an agreement with the AIM quoted company, Gemstones of Africa Limited ("GOA"), in March 2009 under which GOA purchased an initial 12.5 per cent. interest in the Group's 6 emerald gemstone mining licences in the Manyara area of Tanzania with an option to increase their interest by a further 12.5 per cent. to 25.0 per cent. in total. The purchase and option consideration was settled in exchange for issuing Obtala with shares equivalent to 5.0 per cent. of GOA's issued share capital equating to a value of £450,000. In order to exercise their option, GOA are required to have incurred exploration expenditures on these licence interests of not less than US$75,000 within 24 months of the agreement completion date. This deal complements the exploration activity currently being carried out by Obtala and allows the Group to benefit from the expertise offered by the GOA team to bring these assets in to production.
I am confident that Obtala will make considerable further progress in its development during 2009. We may use a number of strategies to enhance shareholder value such as developing mineral licence assets using our own team, development in partnership with other groups or by way of disposal of mineral licence assets where appropriate. Furthermore, the Group will continue to evaluate opportunities to acquire additional assets at the exploration, development and production stages both in Tanzania, and globally.
Finally, I would like to thank my colleagues and our employees for all their hard work in what has been a successful period in the development of the Group.
Francesco Scolaro
Executive Chairman
7 May 2009
Contact
| Simon Rollason - Managing Director Frank Scolaro - Chairman |
+44 (0) 20 7099 1940 |
| Obtala Resources plc | www.obtalaresources.co.uk |
| Ray Zimmerman/Jonathan Evans | +44 (0) 20 7060 1760 |
| Zimmerman Adams International Ltd- Nominated Adviser and Broker |
www.zimmint.com |
CONSOLIDATED INCOME STATEMENT
For the period from 1 August 2007 to 31 December 2008
| 2008 | |
| £000 | |
| Administrative expenses | (406) |
| OPERATING LOSS | (406) |
| Finance income | 207 |
| LOSS BEFORE TAXATION | (199) |
| Taxation | (16) |
| LOSS FOR THE PERIOD | (215) |
| ATTRIBUTABLE TO: | |
| Equity holders of the parent | (215) |
| LOSS PER SHARE | |
| Basic and diluted (pence) | (0.15) |
The loss for the period arises from the Group's continuing operations.
STATEMENTS OF CHANGES IN EQUITY
For the period from 1 August 2007 to 31 December 2008
The Group
| Attributable to the equity holders of the Parent | |||||||
| Share Capital | Share Premium | Merger Reserve | Foreign Exchange Reserve | Share Based Payment Reserve | Retained Deficit | Total Equity | |
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | |
| At 1 August 2007 | - | - | - | - | - | - | - |
| Loss for the period | - | - | - | - | - | (215) | (215) |
| Exchange gains on retranslation of foreign operations | - | - | - | 7,452 | - | - | 7,452 |
| Total recognised income and expense for the period | - | - | - | 7,452 | - | (215) | 7,237 |
| Issue of shares | 1,775 | 3,325 | 16,400 | - | - | - | 21,500 |
| Expenses on issue of shares | - | (497) | - | - | - | - | (497) |
| Share based payment expense | - | - | - | - | 23 | - | 23 |
| At 31 December 2008 | 1,775 | 2,828 | 16,400 | 7,452 | 23 | (215) | 28,263 |
The Company
| Attributable to the equity holders of the Parent | ||||||
| Share Capital | Share Premium | Merger Reserve | Share Based Payment Reserve | Retained Deficit | Total Equity | |
| £000 | £000 | £000 | £000 | £000 | £000 | |
| At 20 December 2007 | - | - | - | - | - | - |
| Loss for the period | - | - | - | - | (57) | (57) |
| Total recognised income and expense for the period | - | - | - | - | (57) | (57) |
| Issue of shares | 1,775 | 3,325 | 16,400 | - | - | 21,500 |
| Expenses on issue of shares | - | (497) | - | - | - | (497) |
| Share based payment expense | - | - | - | 23 | - | 23 |
| At 31 December 2008 | 1,775 | 2,828 | 16,400 | 23 | (57) | 20,969 |
BALANCE SHEETS
As at 31 December 2008
| Group | Company | |
| 2008 | 2008 | |
| £000 | £000 | |
| ASSETS | ||
| Non-current assets | ||
| Investments in subsidiaries | - | 19,805 |
| Intangible exploration and evaluation assets | 25,167 | - |
| Plant and equipment | 66 | 20 |
| Total non-current assets | 25,233 | 19,825 |
| Current assets | ||
| Trade and other receivables | 37 | 15 |
| Short-term investments | 15 | 15 |
| Cash and cash equivalents | 3,184 | 1,371 |
| Total current assets | 3,236 | 1,401 |
| TOTAL ASSETS | 28,469 | 21,226 |
| LIABILITIES | ||
| Current liabilities | ||
| Trade and other payables | (190) | (257) |
| Current tax liabilities | (16) | - |
| TOTAL LIABILITIES | (206) | (257) |
| NET ASSETS | 28,263 | 20,969 |
| EQUITY | ||
| Equity attributable to equity holders of the parent | ||
| Share capital | 1,775 | 1,775 |
| Share premium | 2,828 | 2,828 |
| Merger reserve | 16,400 | 16,400 |
| Foreign exchange reserve | 7,452 | - |
| Share based payment reserve | 23 | 23 |
| Retained deficit | (215) | (57) |
| TOTAL EQUITY | 28,263 | 20,969 |
Approved by the board and authorised for issue on 7 May 2009
| F Scolaro | M Bretherton |
| Executive Chairman | Finance Director |
CASH FLOW STATEMENTS
For the period from 1 August 2007 to 31 December 2008
| Group | Company | |
| 2008 | 2008 | |
| £000 | £000 | |
| OPERATING ACTIVITIES | ||
| Operating loss | (406) | (199) |
| Adjustment for non-cash items: | ||
| Depreciation of plant and equipment | 12 | 5 |
| Foreign exchange gains | 278 | - |
| Share based payments | 23 | 23 |
| Purchase of short-term investments | (15) | (15) |
| Increase in trade and other receivables | (37) | (15) |
| Increase in trade and other payables | 190 | 257 |
| Net cash inflow from operations | 45 | 56 |
| INVESTING ACTIVITIES | ||
| Purchases of plant and equipment | (78) | (25) |
| Purchase of mining licences* | (2,131) | - |
| Expenditure on mining licences | (862) | - |
| Loan to subsidiary undertakings | - | (1,805) |
| Finance income | 207 | 142 |
| Net cash outflow from investing activities | (2,864) | (1,688) |
| FINANCING ACTIVITIES | ||
| Proceeds from issue of share capital | 6,500 | 3,500 |
| Expenses of issue of share capital | (497) | (497) |
| Net cash inflow from financing activities | 6,003 | 3,003 |
| INCREASE IN CASH AND CASH EQUIVALENTS | 3,184 | 1,371 |
| Cash and cash equivalents at 1 August 2007/ 20 December 2007 | - | - |
| CASH AND CASH EQUIVALENTS AT 31 December 2008 | 3,184 | 1,371 |
*Excludes £15.0 million non cash element of acquisition consideration settled in shares, see note 5.