RNS Number : 3904N
Strategic Minerals PLC
28 September 2012
 



28 September 2012

 

Strategic Minerals Plc

("the Company")

 

Interim results for the six months ended 30 June 2012

 

Strategic Minerals Plc (AIM: SML; USOTC: SMCDY), the magnetite iron ore producer and exploration company is pleased to announce its interim results for the six months ended 30 June 2012.

 

Financial highlights

 

Operational highlights

 

Contact:

Company




Strategic Minerals plc


Paul Harrison, CEO

+44(0) 20 7930 6009

 

Nominated Adviser/Joint Broker




Allenby Capital Limited


Jeremy Porter / James Reeve

+44 (0) 20 3328 5656

 

Joint Broker




Daniel Stewart & Company Plc


Martin Lampshire / David Hart

+44 (0) 20 7776 6550

 

Financial Public Relations




GTH Communications Limited


Toby Hall / Suzanne Johnson Walsh

+44 (0) 20 3103 3903

 

 

Chairman's Statement

 

I am pleased to present our interim report for the 6-month financial period ended 30 June 2012, a period during which the Company generated its first revenues, albeit modest, from sales of its magnetite deposit at the Cobre Mine in New Mexico. These revenues were generated by sales at mine-gate to the USA domestic market and they have continued to grow strongly since 30 June 2012.

 

Financial Highlights

The Company incurred a loss for the financial period of £1,217k as compared to a loss of £1,584k for the 6-month period ended 31 May 2011, which included exceptional costs of £922k relating to share based payments and £407k relating to AIM admission costs. The financial report includes comparative information not only for the 6-month period ended 31 May 2011, but also for the period from 1 June 2011 to 31 December 2011. It is important to note that results for the 6-months ended 30 June 2012 include the CompanyÕs operations in New Mexico acquired in September 2011.

 

Basic and fully diluted loss per share for the period was 0.29 pence (0.96 pence for the six months ended 31 May 2011).

 

Cobre Mine, New Mexico

As announced on 25 June 2012, the Company completed the rehabilitation and upgrade of the rail link to the Cobre Mine in New Mexico which will enable rail shipments of its magnetite iron ore to begin. At full capacity the rail facility will be able to handle over 50,000 dry metric tonnes per month.

 

On 28 August we announced the successful completion of a test shipment by rail to the port of Guaymas in Mexico. The test, which comprised an eight rail car shipment, was undertaken to verify key processes and procedures ahead of commencement of 72-car unit train commercial shipments for the export market. This was a vital test ahead of full scale commercial rail shipments, essential to our fulfilment of export sales. We are delighted to have proved that our systems, procedures and equipment can deliver a robust and efficient rail freight operation and whilst some minor operational glitches and equipment problems were encountered, these were quickly resolved by the team.

 

Following the test shipment we have now commenced unit train rail shipments to port, an important milestone for the Company. The Company's rail freight operations include its loading facility inside the mine gate, railroad switching during the 900+ kilometre journey to port, border crossing from the United States into Mexico and unloading and storage at the port. Given our state of readiness to commence commercial shipments, the recent collapse in the iron ore price has been particularly disappointing. However, we have been exploring ways to operate and trade profitably in this volatile price environment and management are confident that the Company can commence exports shortly.

 

Australian Operations

Management has been working with its retained advisors with regard to its exploration properties in Australia. In June management embarked upon an extensive review of the Company's exploration assets to determine which are most promising. In that regard whilst the Iron Glen asset continues to show significant potential, some of the Company's other early stage exploration assets are still under review ahead of the Company committing exploration capital to the next stage of development. I look forward to reporting to you further going forward with regard to these assets.

 

The Company reported significant management changes during the financial period. Paul Harrison was appointed as Chief Executive Officer of the Company, whilst I accepted the role of Executive Chairman. The former Chairman of the Company, Steven Sanders, stepped down as Chairman but remains a non-executive director of the Company. Meanwhile former executive director, Matthew Bonthrone, and non-executive director, Alex Borrelli, did not offer themselves for re-election at the Company's Annual General Meeting in June 2012 in order to focus on their other business interests and therefore stood down at that time. On behalf of the Board I would like to thank Alex and Matthew for the contribution they both made in bringing the Company to the AIM market last year and its subsequent development. The Board wishes them well in their future endeavours.

 

Finally, I would like to take this opportunity to thank my fellow Directors, our management and staff in New Mexico and our advisers for their support and hard work on your behalf during the period.

 

James Fyfe

Executive Chairman

27 September 2012

 

 

 

Consolidated Comprehensive Income Statement

For the period to 30 June 2012

           

 

6 Months to

30 June 2012

 Unaudited

6 Months to

31 May 2011

Unaudited

7 Months to

31 Dec 2011

Audited

 

£'000s

£'000s

£'000s

 




Revenue

334

-

-

 




Cost of sales

(173)

-

-

 

                       

                           

                       

Gross Profit

161

-

-

 




-Recurring administrative expenses

(1,350)

(260)

(1,568)

-Share based payments

-

(922)

(1,062)

-AIM admission costs

-

(407)

(581)





Administrative expenses

(1,350)

(1,589)

(3,211)

 

                       

                           

                       

Operating Loss

(1,189)

(1,589)

(3,211)

 

 

 

 

Finance income

Finance cost 

-

(28)

5

-

24

(33)

 

                       

                           

                       

 




Loss before tax

(1,217)

(1,584)

(3,220)

 




Income tax charges

-

-

-

 

                       

                           

                       

Loss for the period

(1,217)

(1,584)

(3,220)

 




Other comprehensive income

-

-

-

 

                       

                           

                       

Total comprehensive loss for the period

(1,217)

(1,584)

(3,220)

 

                       

                           

                       

 




Attributable to:




 




-Owners of the parent

(1,217)

(1,584)

(3,220)

 

                       

                           

                       

 




Loss per share




 




From continuing operations:




 




Basic and diluted

(0.29p)

(0.96p)

(1.16p)

 

                       

                           

                       

 




 




 




 

Consolidated Statement of Financial Position as at 30 June 2012

 

 

As at

30 June 2012

 Unaudited

As at

31 May 2011

Unaudited

As at

31 Dec 2011

Audited

 

£'000s

£'000s

£'000s

Assets




 




Non-current assets




Goodwill   

Intangibles
Deferred exploration and evaluation expenditure                                                 

Property, plant and equipment

8,744

836
1,283

2,145

-

-
350

1

8,744

198
1,083

1,519

 

                       

                           

                       

 

13,008

351

11,544

 

                       

                           

                       

 




Current assets




Inventories

60

-

-

Trade and other receivables

470

278

503

Cash and cash equivalents         

789

491

299

 

                       

                           

                       


1,319

769

802

 

                       

                           

                       

 

 

 

 

Total assets

14,327

1,120

12,346

 

                       

                           

                       

 

 

 

 

Equity and liabilities

 

 

 

 

 

 

 

Capital and reserves




Issued capital

448

281

399

Share premium

30,272

15,549

26,408

Share based payment reserve

1,062

922

1,062

Other reserves

(14,363)

(14,297)

(14,363)

Currency translation reserve

(22)

(11)

(9)

Accumulated deficit

(4,617)

(1,765)

(3,400)

 

                       

                           

                       

Total equity

12,780

679

10,097

 

                       

                           

                       

 




Current liabilities




Borrowings

1,333

-

1,104

Trade and other payables

214

441

1,145

 

                       

                           

                       

 

1,547

441

2,249

 

                       

                           

                       

Total equity and liabilities

14,327

1,120

12,346

 

                       

                           

                       

 




 

 

Consolidated Statement of Cash Flows

For the period to 30 June 2012

 

 

 

6 Months to

30 June 2012

 Unaudited

6 Months to

31 May 2011

Unaudited

7 Months to

31 Dec 2011

Audited

 

£'000s

£'000s

£'000s

 




Operating activities

(2,177)

(532)

(1,703)

 




Investing activities




 

 

 

 

Acquisition of subsidiary , net of cash acquired



122

Payment for exploration expenditure

(200)

(143)

(876)

Purchases of plant and equipment

(637)

-

(1,436)





Financing activities




Proceeds from issue of shares

Net proceeds from Issue of loan notes

3,275

229

756

-

2,283

1,499

 

                       

                           

                       

Net cash inflow

490

81

(111)

 

 

 

 

Cash and cash equivalents at the beginning

of the period

 

299

 

410

 

410

 

                       

                           

                       

Bank balances and cash

789

491

299

 

                       

                           

                       

 




 

Reconciliation of operating loss to net cash outflow from operating activities.

 

 

6 Months to

30 June 2012

 Unaudited

6 Months to

31 May 2011

Unaudited

7 Months to

31 Dec 2011

Unaudited

 

£'000s

£'000s

£'000s

 




Loss for the period

(1,189)

(1,584)

(3,211)

Adjustments for:




Finance income

-

5

24

Finance cost

Foreign exchange

Share based payment reserve

(28)

(13)

-

-

-

  922

(33)

(9)

1,062

Depreciation and amortisation

11

1

1

(increase)/decrease in inventories

(60)



(increase)/decrease in receivables

33

(254)

(58)

Increase/(decrease) in payables

(931)

378

521


                       

                           

                       

Net cash outflow from operating activities

(2,177)

(532)

(1,703)

 

                       

                           

                       

 




 

Consolidated statement of changes in equity

For period to 30 June 2012

 


Share capital

Share premium

Share based payment reserve

Accumulated deficit

Other Reserve

Currency translation reserve

Total


£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

 

 

 

 

 

 

 

 

As at 30 November 2010

-

715

46

(181)

-

-

580

Share issued for period

281

14,834

-

-

-

-

15,115

Loss after tax

-

-

-

(1,584)

-

-

(1,584)

Share based payments

-

-

876

-

-

-

876

Currency translation reserve

-

-

-

-

-

(11)

(11)

Group reorganisation

-

-

-

-

(14,297)

-

(14,297)

 

           

           

           

           

           

           

           

Balance as at 31 May 2011

281

15,549

922

(1,765)

(14,297)

(11)

679

 

 

 

 

 

 

 

 

Share issued for period

118

10,859

-

-

-

-

10,977

Loss after tax

-

-

-

(1,635)

-

-

(1,635)

Share based payments

-

-

140

-

-

-

140

Currency translation reserve

-

-

-

-

-

2

2

Group reorganisation

-

-

-

-

(66)

-

(66)

 

           

           

           

           

           

           

           

Balance as at 31

December

2011

 

399

 

26,408

 

1,062

 

(3,400)

 

(14,363)

 

(9)

 

10,097

 

 

 

 

 

 

 

 

Shares issued for period

49

3,864

-

-

-

-

3,913

Loss after tax

-

-

-

(1,217)

-

-

(1,217)

Currency translation reserve

-

-

-

-

-

(13)

(13)

 

           

           

           

           

           

           

           

Balance as at 30 June 2012

448

30,272

1,062

(4,617)

(14,363)

(22)

(12,780)

 

           

           

           

           

           

           

           

 

 

Notes to the Interim Financial Information

 

1.   General Information

 

      Strategic Minerals Plc is a public limited company incorporated in England and Wales with       company number 07440902 and quoted on the AIM market of the London Stock Exchange Plc.

 

2.   Basis of Preparation

 

This interim report has been prepared using the historical cost convention, on a going concern basis and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, using accounting policies which are consistent with those set out in the financial statement for the period ended 31 December 2011. This interim financial information for the six months ended 30 June 2012 was approved by the Board on 27 September 2012.

 

      Taxes

 

      Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

 

Standards and Interpretations adopted with no material effect on financial statements

 

The following new and revised Standards and Interpretations have been adopted in these financial statements. Their adoption has not had any significant impact on the amounts reported in these financial statements but may effect the accounting for future transactions and arrangements.

 

Title

Issued

Effective date

 

IFRS 7 Financial instruments:

disclosures (amendment)

Oct 10

Accounting periods beginning on or after 1 July 2011

     

Standards and Interpretations issued but not effective on financial statements

 

The following new and revised Standards and Interpretations have not been adopted in these financial statements as they are not yet effective in the period being reported on.

 

     

Title

Issued

Effective date

IFRS 9 Financial instruments:

classification and measurement

Oct 10

Accounting periods beginning on or after 1 January 2015

IFRS 11 joint Arrangements

May 11

Accounting periods beginning on or after 1 January 2013

IFRS 12 Disclosures of Interests with

Other Entities

May 11

Accounting periods beginning on or after 1 January 2013

IFRS 13 Fair Value Measurement

May 11

 

Accounting periods beginning on or after 1 January 2013

IFRS 10 Consolidated Financial

Statements

 

May 11

Accounting periods beginning on or after 1 January 2013

IAS 1 Presentation of Items of Other Comprehensive Income Ð Amendments to IAS 1

June 11

Accounting periods beginning on or after 1 July 2012

IAS 19 Employee Benefits (Revised)

June 11

Accounting periods beginning on or after 1 January 2013

 

3.   Segmental Analysis

 

In the opinion of the Directors the group has one class of business, being the exploration for, and development and production of, Mineral, and other related activities.

 

The group's primary reporting format is determined by geographical segment according to the location of the exploration assets. There is currently two geographic reporting segments: Rest of the world involved in mineral exploration and development in Australia and USA, and the United Kingdom being the head office.

 

Mineral exploration and development





The segment information for the period ended 30 June 2012 is as follows:






United Kingdom


Rest of the

World


Total






£'000


£'000


£'000

Profit and loss account










Gross profit




-


161


161










Administrative expenses




(482)


(868)


(1,350)

Operating loss




(482)


(707)


(1,189)

Finance income





-


-


-

Finance costs





(28)


-


(28)

Loss on ordinary activities before taxation




(510)


(707)


(1,217)

Income tax benefit / (expense)




-


-


-

Loss for the year





(510)


(707)


(1,217)











Assets and liabilities










Segment assets





33


13,505


13,538

Cash and cash equivalents





737


52


789

Total assets





770


13,557


14,327

Segment liabilities





1,419


128


1,547

Total liabilities





1,419


128


1,547

 

 

4.    Operating loss for the period is stated after charging / (crediting)

      

           

6 months to

30 June 2012

 Unaudited

6 months to

31 May 2011

Unaudited

7 months to

31 Dec 2011

Audited

 

£'000s

£'000s

£'000s

 




 




Depreciation

0

1

2

Foreign Exchange

(7)

2

(12)

 

                       

                           

                       

 




 

      

5.       Remuneration of key management personnel

 

The fees paid in the period to 30 June 2012 were.

SM

IGH

Ebony Iron

Total


£

£

£

£

M Bonthrone

24,000

-

-

24,000

S Sanders

29,751

-

-

29,751

G Cardona

-

-

-

-

J Fyfe

20,000

-

-

20,000

P Griffiths

 

 

 

 

-

 

 

58,659

 

-

 

58,659

 

 

A Borrelli

17,500

-

-

17,500

J Peters

-

29,329

23,844

53,173

P Harrison

20,000

-

-

20,000


───────

───────

───────

───────

Total

111,251

87,988

23,844

223,083

 

6.    Loss per share

 

6 months to

30 June 2012

 Unaudited

6 months to

31 May 2011

Unaudited

7 months to

31 Dec 2011

Audited

 

£'000s

£'000s

£'000s

 




Loss per ordinary share




Basic- pence

(0.29p)

(0.96p)

(1.16p)

Diluted Ð pence

(0.29p)

(0.96p)

(1.16p)

 

                       

                           

                       

 




 

The loss per ordinary share is based on the Company's loss for the period of £1,217,000 (31 May 2011 - £1,584,000: 31 December 2011 - £3,219,647) and a basic and diluted weighted average number of shares in issue of 420,687,484 (31 May 2011 - 164,358,168: 31 December 2011 - 278,716,703).

 

7.   Called up Share Capital

 

    The issued share capital as at 30 June 2012 was 448,158,893 Ordinary Shares of 0.1p each.

   

    On 12th January 2012 3,700,000 shares were issued at a premium of 10p per share.

 

On 30th January 2012 5,000,000 shares were issued at a premium of 10.62p per share.

 

On 8th March 2012 1,000,000 shares were issued at a premium of 10.62p per share.

 

On 1st May 2012 7,500,000 shares were issued at a premium of 8p per share.

 

On 2nd May 2012 30,000,000 shares were issued at a premium of 8p per share.

 

On 3rd May 2012 1,562,500 shares were issued at a premium of 8p per share.

     

8.   Related-party transactions

 

    Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on  consolidation and are not disclosed in this note.

 

9.   Events subsequent to 30 June 2012

          

On 28 August 2012, the Company announced the successful completion of a test shipment by rail of its magnetite material which was undertaken before commercial shipments to ensure key processes and procedures were in order.

     

10.   The unaudited results for 6 months ended 30 June 2012 do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the period ended 31 December 2011 are extracted from the audited financial statements which contained an unqualified audit report and did not contain statements under Sections 498 to 502 of the Companies Act 2006.

 

11. This interim financial statement will be, in accordance with Rule 26 of the AIM Rules for Companies, available shortly on the Company's website at www.strategicminerals.co.uk.

 

 


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