Press releases

Interim report for the six months to 30 June 2009

CHAIRMAN'S STATEMENT

I am pleased to present the interim report of Obtala Resources Plc (Obtala) for the first six months to 30 June 2009.  

Obtala is the holding company of a mineral exploration and development Group that currently holds a portfolio of base metal mineral exploration licence assets in Tanzania comprised of exclusive or majority interests in a total of 24 prospecting licences comprising 13 Gold; 2 Nickel; 3 Copper; 4 Uranium; 1 Platinum and 1 Iron ore. In addition, the Group has majority interests in 7 gemstone mining licences and an option agreement over 5 further gold licences in the Lake Victoria Goldfields.

Exploration and development expenditure during the first six months of this year amounted to £0.34 million and was heavily focused on our Gold licences and in particular the Buckreef licence for which strong gold results were reported from the trenching programme. The Buckreef licence is located in a world-class gold producing region, with operations nearby including AngloGold Ashanti. We remain fully funded to continue exploring this prospect and are confident of realising shareholder value in the future.

Obtala 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. gross 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. 

Obtala also has as a number of interests in listed equity securities in mining and exploration companies which are held as available for sale investments.

In March 2009, Obtala acquired a 23.0 per cent. interest in the ordinary shares of Kopane Diamond Developments "Kopane", an AIM quoted diamond mining company with its main assets in Lesotho, through a private placing cash subscription of £1.75 million and at which time I was also appointed 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.  Obtala subsequently made further market purchases of shares in Kopane as well as market disposals of shares with the result that the Company currently holds ordinary shares representing a direct interest of 14.7 per cent. In addition, Obtala has an indirect non voting interest of 14.6 per cent in Kopane held through a derivative financial instrument. I believe that these investments in Kopane, which are held as available for sale short-term investments, will be value enhancing for Obtala shareholders.

Other available for sale investments currently held by the Group include the 5.0 per cent. holding in Gemstones of Africa Limited referred to above as well as an indirect non voting interest of 3.1 per cent in Shanta Gold Limited which is held through a derivative financial instrument. Obtala also previously built up a 5.4 per cent. holding in Dwyka Resources Limited which was subsequently sold at a profit in the second quarter of this year.

Group profits before tax for the six months to June 2009 amounted to £1.27 million and include £1.53 million of realised gains on disposals of available for sale investments as well a profit of £0.30 million on the disposal of minority interests in gemstone mining licences. Cash balances increased by £0.74million during the half year inclusive of £1.60million raised from a placing of 9,450,000 new ordinary shares at 17p in February this year. Net equity attributable to shareholders of Obtala at 30 June 2009 amounted to £28.13 million inclusive of Group cash balances of £3.93 million.

In view of the prevailing global financial climate we have identified opportunities to promote growth from a corporate perspective, which supplements the organic growth developing through expenditure and increased levels of understanding of our existing mineral portfolio. In early July 2009, Obtala completed a placing of 5,772,223 new ordinary shares at 18p raising a cash amount of £1.03 million. These additional funds, together with existing cash balances, will be utilised to further develop and enhance the value of our portfolio of mineral licences in Tanzania as well as allow us to continue to evaluate opportunities to acquire additional assets at the exploration, development and production stages both in Tanzania, and globally.

I am confident that Obtala will make considerable further progress in its development during the second half of 2009 and will continue to prove up our own assets, in additional to building the company through consolidation with undervalued companies in the current economic climate.

Finally, I would like to thank my colleagues and our employees for all their hard work in the period and our shareholders for their continued support.

 

Francesco Scolaro
Executive Chairman
27 July 2009

 

For further information, please contact:

Simon Rollason	+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

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT
For the period from 1 January 2009 to 30 June 2009

	Notes	Six months to 30 June 2009 (Unaudited) £'000	Period from 1 August 2007 to 30 June 2008 (Unaudited) £'000	Period from 1 August 2007 to 31 December 2008 (Audited) £'000
Administrative expenses		(481)	(224)	(406)
Gain on disposals of available for sale investments	3	1,527	-	-
Unrealised loss on available for sale investments	3	(90)	-	-
Profit on disposal of interests in mining licences	8	305	-	-
Operating profit/(loss)		1,261	(224)	(406)
Finance income		10	129	207
Profit/(loss) before tax		1,271	(95)	(199)
Taxation	4	(223)	-	(16)
Profit/(loss) for the period		1,048	(95)	(215)
Attributable to:
Equity holders of parent		1,048	(95)	(215)
Profit/(loss) per share
Basic and diluted (pence)	5	0.6	(0.07)	(0.15)

The profit/(loss) for the period arises from the Group's continuing operations.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 January 2009 to 30 June 2009

 

	Attributable to equity holders of the company
	Share capital	Share premium	Merger reserve	Foreign exchange reserve	Share based payment reserve	Retained reserves/ (deficit)	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 August 2007	-	-	-	-	-	-	-
Loss for the period	-	-	-	-	-	(95)	(95)
Issue of shares	1,775	3,325	16,400	-	-	-	21,500
Expenses of issue of shares	-	(497)	-	-	-	-	(497)
At 30 June 2008	1,775	2,828	16,400	-	-	(95)	20,908
Loss for the period	-	-	-	-	-	(120)	(120)
Exchange gains on retranslation of foreign operations	-	-	-	7,452	-	-	7,452
Total recognised income and expense for the period	-	-	-	7,452	-	(120)	7,332
Share based expense	-	-	-	-	23	-	23
At 31 December 2008	1,775	2,828	16,400	7,452	23	(215)	28,263
Gain for the period	-	-	-	-	-	1,048	1,048
Unrealised gain on available for sale investments	-	-	-	-	-	669	669
Deferred tax on unrealised gain on available for sale investments	-	-	-	-	-	(174)	(174)
Exchange losses on retranslation of foreign operations	-	-	-	(3,272)	-	-	(3,272)
Total recognised income and expense for the period	-	-	-	(3,272)	-	1,543	(1,729)
Issue of shares	95	1,512	-	-	-	-	1,607
Expenses of issue of shares	-	(5)	-	-	-	-	(5)
Share based expense	-	-	-	-	33	-	33
At 30 June 2009	1,870	4,335	16,400	4,180	56	1,328	28,169

CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2009

	Notes	30 June 2009 (Unaudited)	30 June 2008 (Unaudited)	31 December 2008 (Audited)
		£'000	£'000	£'000
ASSETS
Non-current assets
Intangible exploration and evaluation assets	6	22,137	16,666	25,167
Plant and equipment		62	73	66
Total non-current assets		22,199	16,739	25,233
Current assets
Trade and other receivables		93	29	37
Available for sale investments	7	3,009	-	15
Cash and cash equivalents	9	3,928	4,269	3,184
Total current assets		7,030	4,298	3,236
TOTAL ASSETS		29,229	21,037	28,469
LIABILITIES
Current liabilities
Trade and other payables		(164)	(129)	(190)
Available for sale financial liabilities	7	(484)	-	-
Tax liabilities		(412)	-	(16)
TOTAL LIABILITIES		(1,060)	(129)	(206)
NET ASSETS		28,169	20,908	28,263
EQUITY
Share capital	10	1,870	1,775	1,775
Share premium	11	4,335	2,828	2,828
Merger reserve		16,400	16,400	16,400
Foreign exchange reserve		4,180	-	7,452
Share based payment reserve		56	-	23
Retained revenue/(deficit)		1,328	(95)	(215)
TOTAL EQUITY		28,169	20,908	28,263

Approved by the board and authorised for issue on 27 July 2009

F Scolaro					M Bretherton
Executive Chairman					Finance Director

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the period from 1 January 2009 to 30 June 2009

	Notes	Six months to 30 June 2009 (Unaudited)	Period from  1 August 2007 to 30 June  2008 (Unaudited)	Period from 1 August 2007 to 31 December 2008 (Audited)
		£'000	£'000	£'000
OPERATING ACTIVITIES
Operating profit/(loss)		1,261	(224)	(406)
Adjustment for non-cash items:
Gain on disposal of available for sale investments		(1,361)	-	-
Foreign exchange (losses)/gains		(41)	-	278
Depreciation of plant and equipment		14	5	12
Share based payments		33	-	23
Increase in trade and other receivables		(56)	(27)	(37)
(Decrease)/increase in trade and other payables		(29)	(175)	190
Net cash (outflow)/inflow from operations		(179)	(421)	60
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(10)	(78)	(78)
Purchase of mining licences*		-	(1,278)	(2,131)
Expenditure on mining licences	6	(344)	(86)	(862)
Purchase of available for sale investments**	7	(3,008)	-	(15)
Disposal of available for sale investment	7	2,888	-	-
Unrealised loss on available for sale financial liabilities	7	90	-	-
Gain on disposal of interest in mining licences	8	(305)	-	-
Finance income		10	129	207
Net cash outflow from investing activities		(679)	(1,313)	(2,879)
FINANCING ACTIVITIES
Proceeds from issue of share capital	9	1,607	6,500	6,500
Expenses of issue of share capital	10	(5)	(497)	(497)
Net cash inflow from financing activities		1,602	6,003	6,003
Increase in cash and cash equivalents		744	4,269	3,184
Cash and cash equivalents at start of period		3,184	-	-
Cash and Cash equivalents at end of period		3,928	4,269	3,184

*	Excludes £15.0 million non cash element of acquisition consideration settled in shares together with settlement of £0.3 million of net financial liabilities at acquisition which have been reflected in working capital movements.
**	Excludes £0.45 million non cash element in respect of available for sale investment received in settlement of the disposal of interests in mining licences referred to in note 8.