TIDMALBA
RNS Number : 9763D
Alba Mineral Resources PLC
03 May 2017
Alba Mineral Resources plc
("Alba" or "the Company")
Final Results for the year ended 30 November 2016
CHAIRMAN'S STATEMENT
The Board of Alba Mineral Resources plc (the "Company" or
"Alba", and collectively with its subsidiary companies, the
"Group") is pleased to report the results for the year ended 30
November 2016.
INTRODUCTION
Alba is a natural resources exploration company with a commodity
focus on oil & gas, graphite, uranium and base metals. Alba
holds interests in the UK oil & gas exploration sector, as well
as in mining exploration assets in Greenland (Graphite), Ireland
(Base Metals) and Mauritania (Uranium). The Group's overall
technical and corporate strategy is to identify and acquire natural
resource projects it believes to have good potential and to advance
them expediently. This will be achieved by controlled design and
execution of a cost-effective generative process utilising data
acquisition, GIS data analysis and exploration programme planning,
led by our internal technical team and, where appropriate, through
the support of external technical consultants.
REVIEW OF ACTIVITIES
Horse Hill (Oil and Gas, United Kingdom)
The Horse Hill-1 well ("HH-1") is located within onshore
exploration licence PEDL 137, on the northern side of the Weald
Basin near Gatwick Airport. Alba owns a 15% direct interest in
Horse Hill Developments Limited ("HHDL"). HHDL is a special purpose
company that owns a 65% participating interest and operatorship of
Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald
Basin. The remaining 35% participating interests in the PEDL137 and
PEDL246 licences are held by US-based Magellan Petroleum
Corporation.
In Q1 2016 a flow test was carried out from the HH-1 Upper
Portland conventional oil pool and the Upper and Lower Kimmeridge
limestones in order to assess the recoverable volume of oil. The
final total aggregate stable dry oil flow rate from two Kimmeridge
limestones plus the overlying Portland sandstone was recorded at
1688 barrels of oil per day ("bopd"). Over the 30-90 hour flow
periods from each of the three zones, no clear indication of any
reservoir pressure depletion was observed. The final Portland test
of 323 bopd over an 8.5 hour period is the highest stable dry oil
flow rate from any onshore UK Portland well. The stable, natural
dry-oil flow rate of 464 bopd from the Lower Kimmeridge Limestone
is the first ever flow from this rock unit in the Weald Basin and
onshore UK. Based on the analysis of published reports from all
significant UK onshore discovery wells, the 901 bopd from the Upper
Kimmeridge zone is likely the highest stable natural dry oil flow
rate from a single reservoir in any UK onshore new field wildcat
discovery well.
High quality Brent Crude was produced: light, sweet oil (40
degrees API in Kimmeridge, 35-37 degrees API in Portland), with
1,940 barrels delivered to the Esso Fawley refinery. Preliminary
analysis confirms that the Lower and Upper Kimmeridge Limestone
units are naturally fractured reservoirs with high deliverability.
There is a strong possibility for further optimisation and
increased flow rates from all three zones in future development and
production wells, particularly through the use of horizontal
wells.
An application for long term production testing and further
appraisal drilling was submitted to Surrey County Council in
October 2016. Subject to the required regulatory approvals, the
first phase of the proposed development is planned to consist of
the extended production testing of four zones, designed to confirm
the commerciality of the discovery, and to examine a previously
untested Kimmeridge limestone. The planning application also seeks
permission for a two-well drilling phase the purpose of which,
contingent on successful production testing, would be further to
appraise the extent of the oil accumulations and the field's
production capabilities. The proposed drilling phase includes plans
for a deviated sidetrack, HH-1z, which would be drilled from the
existing HH-1 borehole, together with a new well, Horse Hill-2
("HH-2"). On completion of drilling, both HH-1z and HH-2 are
planned to be long-term production tested.
Amitsoq (Graphite, Ni-PGEs, Gold, Southern Greenland)
On 4 February 2016 the Company announced that it had completed
an iron oxide (FeO) alteration remote sensing (satellite) study on
the Amitsoq graphite project (the "Project") near Nanortalik in
southern Greenland. The interpreted results were highly encouraging
and provided numerous target areas for follow-up ground work and
geophysics, highlighted as follows:
-- Numerous and continuous graphitic horizons suggested along
strike and proximal to the Amitsoq graphite mine.
-- FeO anomalies are coincident with known graphite occurrences
at the former Amitsoq graphite mine.
-- Two zones contain multiple lenses of interpreted bedded
graphite along strike 2.5 km and 5.8 km to the northeast of the
Amitsoq mine.
-- Additional FeO anomalies are interpreted to be favourable
targets for platinum group metals, orogenic lode gold and intrusion
related copper-zinc mineralization.
-- Anomalies identified with geology similar to economic gold
mineralization at the nearby Nalunaq gold mine (circa 340,000
ounces of gold produced to date).
On 14 April 2016 Alba announced the completion of rock
geochemistry assays on samples from the former graphite mine at
Amitsoq. Analyses indicated that the geochemistry is substantially
in agreement with a petrographic study previously carried out by
the British Geological Survey (BGS). Two questions that the BGS
study had raised were the volume of pyrite present within the
samples and also the potential for this sulphide mineral to contain
potential credit and deleterious elements. Secondary testing was
therefore undertaken to test for those elements.
A total of eleven (11) samples were dispatched to the ALS
Minerals laboratory at Loughrea, Co. Galway, Republic of Ireland
for independent geochemical testing. Analysis included
major-element and trace-element geochemistry and total sulphur
analysis. The results of the major element analysis indicated that
the samples were dominated by phyllosilicate minerals (clay, mica
and chlorite), graphite, and pyrite (iron sulphide). The total
sulphur analysis varied from 0.22% to 10.2%, with a mean
concentration of 6.1% sulphur. The concentration of potentially
deleterious elements was found to be low. Overall the samples are
not considered to contain elements that could potentially make the
graphite at Amitsoq uneconomical based on impurities.
On 26 May 2016 Alba announced that it had exercised its option
to earn into the Amitsoq graphite project in southern Greenland. A
renegotiation of the earn-in terms was agreed at the same time.
In September 2016 the Company commissioned SRK Exploration
Services Ltd to sample one of the graphite-bearing veins at the
site of the former Amitsoq graphite mine. The vein was sampled
where it has been exposed in outcrop and in what appears to be an
old surface box cut that was created during previous mining
operations.
The particular vein selected for sampling appears to have been
exploited with a number of adits when the Amitsoq mine was
operational. At the location selected for sampling, the vein has a
true thickness of 16.58 metres. A total of 13 channel samples were
taken. The channel samples were offset from each other where
necessary in order to cover the outcrop morphology. They were
however geologically contiguous across dip, thus providing
continuity of sampling through the whole thickness of the vein, and
cover a strike distance of 48.5 metres.
Also in September 2016 the Company commissioned a specialist
airborne geophysical survey company to carry out an airborne
electro-magnetic and magnetic ("EM-Mag") survey at the Project. The
principal target of the survey was the southern portion of Amitsoq
island, which hosts the former graphite mine, as well as a target
to the north of the mine which hosts the nickel-platinum group
element anomalies known as Amitsoq Dyke and Craig's Dyke. The
objective was to identify electromagnetic and magnetic horizons
within the survey area. The interpretation of these horizons would
help Alba to assess the continuity along strike of the graphite
horizon and/or horizons, and also assist in identifying additional
structural geological elements which will assist in the
interpretation of the regional geology. The preliminary results of
the EM-Mag survey were announced after the end of the year (see
below, "Events after the Reporting Period").
On 1 November 2016 Alba announced that it had earned the right
to a 49 per cent interest in the Amitsoq Project and had further
agreed, subject to regulatory approvals from the Greenlandic
authorities, to acquire a further 41 per cent interest in the
Project for total consideration payable of GBP150,000. As from
Completion, Alba would also take over Artemis's rights and
obligations in respect of the existing put and call option over the
10 per cent free carried interest held by a minority shareholder in
the Project. Pending Completion, Alba would continue to act as the
operator and manager of the Project, and the previous farm-in
agreement would be terminated and superseded by these new terms.
Legal completion occurred after the end of the year (see below,
"Events after the Reporting Period"), although for accounts
purposes control was deemed to pass on 1 November 2016.
Brockham (Oil and Gas, United Kingdom)
Alba is earning a 5% interest in Production Licence 235 ("PL
235"), which comprises the producing onshore Brockham Oil Field,
which is located just to the north-west of the Horse Hill
licences.
The Brockham Oil Field is located on licence PL 235 in the Weald
Basin in Surrey, southern England. The field was discovered by BP
in 1987 with the drilling of the Brockham-X1 well. The field was in
production until early 2016, and had average daily production of
approximately 35 bopd from the Brockham-X2Y production well.
On 9 August 2016 Alba announced that, having exercised its
option to earn a five per cent interest in PL235, it had paid its
share of the cost of the first cash call issued by the Operator,
Angus Energy Weald Basin No.3 Limited ("Angus" or the "Operator"),
in respect of the proposed drilling of a side track well at
Brockham. The cash call issued related to the costs required to
effect certain required upgrades to the surface facilities at the
Brockham site.
Alba originally secured this option to earn a five per cent
interest in Brockham as part of its acquisition from Angus in
October 2015 of a 5 per cent interest in HHDL, the 65 per cent
owner of the Horse Hill oil and gas project (PEDLs 137 and 246)
(see above). Alba's earn in to Brockham was originally agreed to be
on a "two for one" promote basis, whereby Alba would pay a ten per
cent contribution to the cost of the drilling of the side-track
well (from spudding to first oil) in order to earn its 5 per cent
interest. Alba subsequently agreed with Angus, however, that Alba's
contribution to the cost of the side track well from spudding to
first oil shall be capped, for all dry hole costs, at a maximum of
GBP187,125, plus a maximum of a further 10 per cent of the
Agreement For Expenditure ("AFE") to be issued for production/well
testing, and Alba shall only be required to fund Brockham joint
account costs incurred and cash called thereafter in accordance
with its five per cent interest only, and no higher.
On 14 November 2016 Alba announced that Angus, as Operator, had
informed the Company that it had received permission from the
Environment Agency to drill the BR-X4Z side-track at licence PL
235.
Limerick (Base Metals, Ireland)
The exploration licence in the Limerick Basin is highly
prospective for zinc, lead and silver and is only 10 km away from
and part of the same target unit as the Pallas Green zinc
discovery. On 26 July 2016 Alba announced that it had received
confirmation from the Irish Department of Communications, Energy
& Natural Resources (Exploration and Mining Division) that the
Company's base metal prospecting licence in County Limerick,
Ireland (Area No. 3824) had been renewed for a further two years
until 26 May 2018.
On 25 October 2016 Alba announced that it had completed a
detailed gravity survey and soil sampling programme at the Limerick
Project. The objective of the survey was to identify possible
structural targets with associated gravity variations and soil
geochemistry anomalies that may be associated with the
concentration of base metal mineralisation, notably zinc and lead.
The results of the survey were announced after the end of the year
(see below, "Events after the Reporting Period").
Mauritania
During the year, the Group submitted an application to the
Mauritanian Authorities to take out a new permit over a reduced
area within the original permit area, which includes the centre of
the previously discovered and announced high-tenor uranium
anomalies. The application is currently being processed by the
Mauritania authorities. Once a new permit is issued, Alba and its
joint venture partner will then consider their options with regards
to funding the next stage of exploration.
The continued development of the Mauritania exploration
activities is dependent on the grant of a new licence. An emphasis
of matter has been included in the auditor's report on this
point.
Other Development Projects
Alba continues to review and consider other natural resources
opportunities which have value-enhancing potential for our
shareholders.
Corporate
Our corporate activities in the year have been primarily focused
on securing the Company's interests in its "earn in" projects,
namely securing the right to move to a majority interest at Amitsoq
and exercising the Company's option to earn 5 per cent of the
Brockham Oil Field (which matters are covered above under each of
those projects), as well as undertaking fund-raising activities to
enable the Company to progress its exploration and investment
programme.
On 26 February 2016 the Company announced that it had raised
GBP525,000 (before expenses) through the issue of 131,250,000 new
ordinary shares at a price of 0.4 pence per ordinary share.
On 27 May 2016 Alba held its Annual General Meeting. All
resolutions were duly passed.
On 18 August 2016 the Company announced that it had issued
16,059,957 fully paid ordinary shares to CEO Michael Nott, and
16,059,957 fully paid ordinary shares to Chairman George
Frangeskides, or to their respective nominees, in settlement of
accrued fees of GBP30,000 owed to each of them. Twenty million
share warrants (exercise price 0.3p per share, expiring 27 March
2021) have also been awarded to each of Messrs Nott and
Frangeskides pursuant to the Company's incentive plan. In addition,
5 million share warrants were awarded to Non-Executive Director
Manuel Lamboley on the same terms, subject to additional vesting
conditions. The Company has also agreed to settle certain fees owed
to consultants by the issue of 7,815,845 fully paid ordinary
shares, and to grant a total of 6 million share warrants (exercise
price 0.3p per share, expiring 27 March 2021) to certain advisers
and consultants of the Company, subject in certain cases to vesting
conditions.
On 19 September 2016 the Company announced that it had raised
GBP900,000 (before expenses) through the issue of 450,000,000 new
ordinary shares at a price of 0.2 pence per ordinary share.
EVENTS AFTER THE REPORTING PERIOD
Horse Hill (Oil and Gas, United Kingdom)
On 7 February 2017 it was announced that Xodus had upgraded the
Portland sandstone P50 Oil in Place (OIP) to 32 million barrels, a
53% increase on previous calculations. The base case Portland
initial oil rate was estimated at 350 barrels of oil per day per
well. The Operator, HHDL, indicated that ultimate recovery could be
increased by a further 8-14% of OIP via implementation of a water
re-injection scheme.
On 4 April 2017 the Company announced that it had been informed
by the operator, HHDL, that the Oil and Gas Authority ("OGA") has
consented to extend the current PEDL137 and PEDL246 Retention Areas
("RAs") until 2021. The PEDL137 and PEDL246 RAs, which cover the
entirety of the Horse Hill licences, will now expire on 30th
September and 30th June 2021, respectively.
The work programmes, now agreed with OGA, comprise: the planned
Horse Hill-1 ("HH-1") Kimmeridge and Portland production tests,
HH-1z Kimmeridge Limestone ("KL") and HH-2 Portland appraisal
wells, 50 km(2) of 3D seismic, 25 km of 2D seismic in PEDL246 and a
PEDL246 exploration step-out well. The RAs for each licence can be
further extended or modified subject to an ongoing minimum work
programme agreed by the OGA.
On 4 April 2017 it was announced that the application for long
term production testing and further appraisal drilling is scheduled
to be decided at the Council's planning committee meeting in July
2017. The Operator, HHDL, therefore envisages that these operations
will commence in the second half of 2017 upon grant of the
necessary remaining regulatory permissions. The Operator's
objective remains to move towards a declaration of commerciality
and stable long-term production from the Portland and Kimmeridge by
the end of 2018.
Amitsoq (Graphite, Ni-PGEs, Gold, Southern Greenland)
Preliminary results from the airborne electro-magnetic and
magnetic survey at Amitsoq were announced on 30 January 2017. The
most important features identified were as follows:
-- Several new faults and numerous EM anomalies associated with
potential graphite horizons were identified with a total strike
length of 12.05 kilometres.
-- Of that total, there are 11 anomalies in particular of
between 350 metres and 1300 metres each in length, for a total
strike length of 5.55 km. These will be priority targets for Alba
in the 2017 ground campaign.
-- Two shallow, moderate intensity EM anomalies associated with
a large ultramafic dyke (Craig's Dyke) known to contain magmatic
sulphides (pyrrhotite, pentlandite, chalcopyrite, and cubanite) of
up to 0.4 g/t platinum, 0.6 g/t palladium, 0.2 g/t gold and 7 g/t
silver (study published by The Geological Survey of Denmark and
Greenland, 1971).
Alba has grouped the EM anomalies into four distinct graphite
target areas, and within those four graphite areas Alba intends to
focus its efforts in the forthcoming ground campaign on what we are
calling Target Area 1, seeking to establish graphite extensions in
and around the known mine area. Alba also intends to explore the
non-graphite target referred to above at Craig's Dyke (Target Area
5).
On 27 February 2017, following the Government of Greenland
formally approving the indirect transfer to Alba of exploration
licence 2013/06, Alba completed the acquisition of the further 41
per cent interest in the Project for the balance of the purchase
price owed and thereby became the owner of 90 per cent of the
Project. Alba also took over the existing put and call option over
the 10 per cent free carried interest held by a minority
shareholder in the Project. This means that Alba can move in future
to 100 per cent ownership of the Project.
On 12 April 2017 the Company announced that it had completed the
preliminary evaluation of the metallurgical testing at Amitsoq. The
initial results were highly encouraging and provide confidence with
regard to the Company's objective of re-opening the graphite mine
at Amitsoq. Crushing, grinding, attrition and floatation test work
indicates the ore can be processed by a relatively low cost
processing route to produce a range of high grade products. The
head grade of +25% graphite confirms Amitsoq ore to be amongst the
highest grade of any graphite project in the world. Simple
processing was able to achieve +99% recovery of the graphite from
the gangue material, with the bulk of the flake graphite recovered
being in the +150<MU> category (medium flake), essential for
supply to the lithium-ion battery market, and the premium value
+300<MU> jumbo to super jumbo category.
Brockham (Oil and Gas, United Kingdom)
On 15 December 2016 Alba announced that it had been advised by
the Operator that work had commenced at Brockham, following receipt
of the final approvals required from the UK Government Oil and Gas
Authority ("OGA") and Health and Safety Executive ("HSE") to
commence work on the BR-X4Z well on Licence PL 235. Consequently,
Alba was advised that work had commenced to abandon the redundant
wells in the upper Portland formation and re-enter the original
Brockham-X1 well drilled by BP in 1987 down through the Portland,
Kimmeridge, Corallian and into the much deeper Great Oolite
formations. The Company's understanding is that all the original BP
wells at Brockham that passed through the Kimmeridge and Corallian
formations were drilled without properly assessing their
hydrocarbon potential.
In March 2017 Alba was advised by the Operator that, following
extensive analysis of the BR-X4Z sidetrack well, the Operator's
intention is to bring the Kimmeridge into production at the
existing Brockham production facility as soon as the necessary OGA
approval is in place. The Brockham X4Z well, drilled in Q1 2017 to
a total depth of 1,391m, was planned to evaluate the Portland,
Corallian and Kimmeridge formations at Brockham, including an
evaluation of the Kimmeridge reservoir that had been demonstrated
by the Horse Hill discovery 8 km to the South.
The Operator confirmed as follows:
-- The preliminary results from the Brockham X4Z well confirm
very similar thickness of reservoir and properties to those
reported at Horse Hill. The gross thickness of the Kimmeridge
formation in Brockham X4Z is some 385m.
-- The two limestone intervals (each around 30m) tested in Horse
Hill are also seen in the Brockham well.
-- The reservoir properties appear to be very similar to Horse
Hill, based on electrical logging evidence.
-- The information obtained has confirmed not only evidence of
natural fractures in the two main limestones intervals previously
tested at Horse Hill, but also confirmed abundant natural fractures
in sections of interbedded shales and limestones between and below
the two main limestones. Around 200m of the reservoir has this
potential.
The Operator took many samples during the drilling to use for
geochemical analysis. The initial results of this work show total
organic content through the Kimmeridge section between 2-12%,
exceeding Horse Hill in places. This supports the potential for
some 200m of reservoir of interest. Actual oil content depends on
the extent to which burial has resulted in pressures and
temperatures sufficient to generate oil. Since oil was produced
briefly at Horse Hill and as it is most likely that the oil in the
Portland Sandstone in Brockham is sourced from the Kimmeridge, the
evidence backs a similar oil content to Horse Hill. Therefore,
based on the evidence so far, the Operator has informed Alba that
it has confidence that the well will be similar to Horse Hill and,
perhaps, given that the reservoir is potentially much thicker in
zones not previously tested, the results could be even better.
On 10 March 2017 Alba announced that it had been advised by the
Operator that, in respect of a BBC London news item where claims
were made that the Brockham X4Z well drilling was 'unauthorised',
the Operator is of the firm opinion that the drilling of the BR-X4Z
well, which was approved by the OGA, EA and HSE, did not constitute
a breach of the planning consents. The Operator has advised the
Company that discussions with Surrey County Council are
ongoing.
Limerick (Base Metals, Ireland)
On 16 December 2016 Alba reported the results of a microgravity
study and portable XRF shallow soil sampling programme at the
Limerick base metal project in the Republic of Ireland.
Interpretation of the gravity data suggests the presence of gravity
anomalies consistent with brecciation of the host limestone, with
zinc and lead anomalism in shallow soil samples collected above or
adjacent to gravity anomalies. On 14 February 2017 the Company
announced that it had received the full laboratory assay results
from select soil samples taken during the recent programme. The
assay results confirm four main areas of anomalism. The most
pronounced anomalism for copper-silver-arsenic (Cu-Ag-As) is
similar to that found at former Gortdrum copper-silver (Cu-Ag) mine
25 km due east. Gortdrum was mined for copper-silver-mercury
(Cu-Ag-Hg) between 1967 and 1975, producing 3.8 million tonnes
containing 1.19% Cu and 25.1 g/t Ag. This target in particular will
be the focus of the next stage of work.
Corporate
On 13 January 2017 the Company announced that it had received
notices to exercise share warrants from a number of warrant holders
holding warrants with an exercise price of 0.3p per share. The
total number of share warrants exercised was 51,143,650 for total
proceeds to the Company of GBP153,430.95.
Also on 13 January 2017, the Company announced that it had
introduced a new Enterprise Management Incentive plan ("EMI
scheme") to strengthen its ability to attract and retain executives
and staff through ensuring participants receive competitive
incentives which align their interests with those of the Company's
shareholders. Following adoption of the EMI scheme, the
remuneration committee awarded to George Frangeskides (Executive
Chairman) 15 million share options vesting the day following 13
January 2017 ("date of grant"), with a further 15 million share
options vesting on each of the dates falling 6, 12 and 18 months
following the date of grant. These options are issued pursuant to
the EMI scheme, have an exercise price of 0.4p and expire on the
tenth anniversary of grant if not exercised. Fifteen million share
warrants were also awarded to Michael Nott (CEO) vesting
immediately at an exercise price of 0.4p and an expiration date of
27 March 2021. These share warrants were not issued pursuant to the
EMI scheme. Those share options granted pursuant to the EMI scheme
are subject to accelerated vesting in certain circumstances,
including pursuant to a change of control of the Company following
a completed takeover offer.
OUTLOOK
The past year has seen the Company make significant strides
forward in the development of our key assets. At Horse Hill, the
oil and gas project in the Weald Basin in Surrey in which Alba is
the second largest shareholder in the HHDL consortium, flow tests
undertaken in 2016 returned excellent results. We now await the
planning consents which will enable Alba and its partners to carry
out long term production testing and further appraisal drilling
commencing later this year, with the objective of moving towards a
declaration of commerciality and stable long-term production by the
end of 2018.
Alba's Board of Directors also took the decision in the past
year to exercise the Company's option to earn a 5 per cent interest
in the Brockham Oil Field. This decision was vindicated after the
end of the financial year, when in March 2017 the Operator
announced that, as a result of the drilling of a side-track well at
Brockham, it was confident that the Brockham well would be similar
to Horse Hill and possibly, given the thickness of the reservoir
zones encountered at Brockham, even better.
While these oil and gas investments at Horse Hill and Brockham
must inevitably pass through the normal regulatory processes in the
UK, which we understand can at times be a source of frustration for
shareholders, this is part and parcel of operating in the UK
onshore environment. At the same time, however, the Alba Board has
taken steps to ensure that as a diversified natural resources
exploration company, the Company and, by extension, its
shareholders are not solely reliant on the developments at Horse
Hill and Brockham to see value accretion in the Alba Group. It is
for this reason that, having identified an opportunity to invest
initially on a modest earn-in basis into the Amitsoq Graphite
Project in Southern Greenland, the Company's work in 2016 led it to
see the significant potential of the Project and, consequently, to
decide to negotiate to acquire outright a 90 per cent interest in
the Project, with the right to move to 100 per cent ownership in
the future. The results of the work announced after the end of the
financial year - in particular the identification of over 12 km of
strike length and the confirmation of graphite grades that are
amongst the highest of any graphite project in the world - have
given the Board cause for great encouragement as we look to
fast-track development at Amitsoq.
The coming year promises to be an exciting one for Alba, as we
seek to commercialise our UK oil and gas investments and at the
same time to push forward with the further work at Amitsoq that
will see the Project progress from the exploration into the
development phase.
We thank our shareholders for their continued support.
George Frangeskides
Executive Chairman
Change of Registered Office
Alba's registered office has changed to 6(th) Floor, 60
Gracechurch St, London EC3V 0HR.
Glossary of technical terms:
adit a horizontal passage leading into a
mine for the purposes of access or
drainage
------------------------ ------------------------------------------------
argillaceous a limestone containing a significant
limestone proportion of clay minerals
------------------------ ------------------------------------------------
breccia rock composed of broken fragments of
minerals or rock cemented together
by a fine-grained matrix
------------------------ ------------------------------------------------
brecciation the process of forming breccia
------------------------ ------------------------------------------------
clastic rocks composed of broken pieces of
older rocks
------------------------ ------------------------------------------------
core a cylindrical sample of rock, obtained
during drilling of wells and removed
for inspection at surface
------------------------ ------------------------------------------------
discovery a discovery is a petroleum accumulation
for which one or several exploratory
wells have established through testing,
sampling and/or logging the existence
of a significant quantity of potentially
moveable hydrocarbons
------------------------ ------------------------------------------------
electric logs tools used within the wellbore to measure
the rock and fluid properties of surrounding
rock formations
------------------------ ------------------------------------------------
fault block a very large subsurface block of rock,
created by tectonic and localised stresses
------------------------ ------------------------------------------------
limestone a carbonate sedimentary rock predominantly
composed of calcite of organic, chemical
or detrital origin. Minor amounts of
dolomite, chert and clay are common
in limestones. Chalk is a form of fine-grained
limestone
------------------------ ------------------------------------------------
Geographic Information a system designed to capture, store,
System or Geographical manipulate, analyse, manage, and present
Information all types of spatial or geographical
System (GIS) data
------------------------ ------------------------------------------------
MICP mercury injection capillary pressure,
a measure of rock porosity and permeability,
from rock cores or cuttings, and a
calibration of porosity logs
------------------------ ------------------------------------------------
mudstone an extremely fine-grained sedimentary
rock consisting of a mixture of clay
and silt-sized particles
------------------------ ------------------------------------------------
oil initially the quantity of oil or petroleum that
in place ("OIIP") is estimated to exist originally in
or oil in place naturally occurring accumulations before
("OIP") any extraction or production
------------------------ ------------------------------------------------
petrophysical the study of physical and chemical
evaluation rock properties and their interactions
with fluids; studies typically use
well logs, well cores and seismic data
------------------------ ------------------------------------------------
recoverable those quantities of petroleum estimated,
resources as of a given date, to be potentially
recoverable from known accumulations
------------------------ ------------------------------------------------
reservoir a subsurface rock formation containing
an individual natural accumulation
of moveable petroleum that is confined
by impermeable rock/formations
------------------------ ------------------------------------------------
sandstone a clastic sedimentary rock whose grains
are predominantly sand-sized. The term
is commonly used to imply consolidated
sand or a rock made of predominantly
quartz sand
------------------------ ------------------------------------------------
seismic use of sound waves generated by controlled
explosions to ascertain the nature
of the subsurface geological structures.
2D seismic records a cross-section
through the subsurface
------------------------ ------------------------------------------------
STOIIP stock tank oil initially in place
------------------------ ------------------------------------------------
TVDSS true vertical depth below a subsea
datum
------------------------ ------------------------------------------------
XRD x-ray diffraction; scattering of x-rays
by the atoms of a rock or crystal that
gives information on the structure,
composition and identity of the rock
or crystal
------------------------ ------------------------------------------------
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information please contact:
Alba Mineral Resources
plc
Michael Nott, CEO +44 20 7264 4366
Cairn Financial Advisers
LLP
James Caithie / Liam Murray +44 20 7213 0880
Dowgate Capital Stockbrokers
Limited
Jason Robertson / Neil
Badger +44 1293 517744
CONSOLIDATED INCOME STATEMENT
2016 2015
GBP GBP
Revenue - -
Cost of sales - -
------------ ---------
Gross loss - -
Administrative expenses (425,562) (292,705)
Operating loss (425,562) (292,705)
Finance costs - -
Loss before tax (425,562) (292,705)
Taxation - -
Loss for the year (425,562) (292,705)
============ =========
Attributable to:
Equity holders of the parent (425,390) (291,563)
Non-controlling interests (172) (1,142)
------------ ---------
(425,562) (292,705)
============ =========
Loss per ordinary share
(0.03) pence (0.04)
Basic and diluted pence
============ =========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2016 2015
GBP GBP
Loss after tax (425,562) (292,705)
Items that may subsequently
be reclassified to profit
or loss:
* Foreign exchange movements (5,190) 5,204
Total comprehensive loss (430,752) (287,501)
========= =========
Total comprehensive loss attributable
to:
Equity holders of the parent (430,580) (286,359)
Non-controlling interests (172) (1,142)
(430,752) (287,501)
========= =========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2016 2015
GBP GBP
Non-current assets
Intangible fixed assets 1,383,895 662,874
Investments 2,286,315 1,838,222
Available for sale assets 56,285 -
Total non-current assets 3,726,495 2,501,096
----------- -----------
Current assets
Trade and other receivables 15,261 96,942
Cash and cash equivalents 668,340 288,494
----------- -----------
Total current assets 683,601 385,436
----------- -----------
Current liabilities
Trade and other payables 377,212 80,000
Financial liabilities 253,073 254,073
Total current liabilities 630,285 334,073
----------- -----------
Net assets 3,779,811 2,552,459
=========== ===========
Capital and reserves
Called up share capital 2,654,703 1,993,171
Share premium account 3,472,671 2,586,286
Warrant reserve 546,098 446,291
Retained losses (3,309,246) (2,883,856)
Merger reserve 200,000 200,000
Foreign currency reserve 189,159 183,969
----------- -----------
Equity attributable to equity
holders of the parent 3,753,385 2,525,861
Non-controlling interests 26,426 26,598
Total equity 3,779,811 2,552,459
=========== ===========
CONSOLIDATED CASHFLOW STATEMENT
2016 2015
GBP GBP
Cash flows from operating activities
Operating loss (425,562) (292,705)
Consulting fees settled in shares 60,000 -
Share option charge 99,807 -
Foreign exchange revaluation adjustment 5,190 (5,204)
Increase/(decrease) in creditors 75,312 (13,599)
Decrease/(increase) in debtors 81,682 (88,190)
Net cash used in operating activities (103,571) (399,698)
--------- ---------
Cash flows from investing activities
Payments for deferred exploration expenditure (380,121) (51,609)
Payments for available for sale assets (56,285) -
Investments (433,494) (882,690)
Net cash used in investing activities (869,990) (934,299)
--------- ---------
Cash flows from financing activities
Proceeds from the issue of shares and warrants 1,425,001 1,654,315
Costs of issue (71,684) (62,500)
Proceeds from borrowings - -
Net cash generated from financing activities 1,353,317 1,591,815
--------- ---------
Net increase in cash and cash equivalents 379,846 257,818
Cash and cash equivalents at beginning of period 288,494 30,676
Cash and cash equivalents at end of year 668,340 288,494
========= =========
Non-cash transactions
Significant non cash transactions related to the purchase of
investments of GBP134,600 (2015 - GBP539,532) and consulting fees
of GBP60,000 (2015 - GBPnil) which were settled by way of the issue
of shares.
Accruals includes capital items of GBP220,900 (2015 -
GBPnil).
NOTES
1. Basis of Preparation
Alba Mineral Resources plc is a public limited company
incorporated and domiciled in England & Wales, whose shares are
publicly traded on the AIM market of the London Stock Exchange
plc.
The financial information set out in this announcement does not
constitute the statutory financial statements of the Group for the
years ended 30 November 2016 or 30 November 2015, but has been
extracted from the statutory financial statements for those
years.
The financial statements have been prepared on the historical
cost basis and in accordance with International Financial Reporting
Standards ("IFRS"), International Accounting Standards ("IAS") and
IFRS Interpretations Committee ("IFRIC") interpretations as adopted
by the European Union.
The auditor, Nexia Smith & Williamson, has reported on the
financial statements for the years ended 30 November 2016 and 2015;
the audit reports were unqualified and did not contain statements
under either section 498(2) or 498(3) of the Companies Act 2006.
However, as explained in note 3 below, the audit report for the
year ended 30 November 2016 did include "emphasis of matter"
paragraphs.
There were no changes to the Group's accounting policies for the
year ended 30 November 2016 as compared to those published in the
statutory financial statements for the year ended 30 November
2015.
This preliminary announcement was approved by the Board on 2 May
2017.
2. Going Concern
Based on financial projections prepared by the directors, the
Group's current cash resources are insufficient to enable the Group
to meet its recurring outgoings and projected exploration
expenditure for the entirety of the next twelve months, including
the funding of its share of any future exploration and development
activities in respect of the Company's oil and gas investments at
Horse Hill and Brockham. However, the directors have a reasonable
expectation that the Group will continue to be able to meet its
commitments for the foreseeable future by raising funds when
required from the equity capital markets. The Company may also
consider future joint venture funding arrangements in order to
share the costs of the development of its exploration assets,
though that is not currently the Company's preferred route.
In addition, these financial projections take no account of any
revenues to be directly received by the Company as a result of oil
production at the Brockham oil field or any revenues which may be
received by Horse Hill Developments Limited (HHDL) as a result of
production testing at Horse Hill, and which would reduce the
commitments of the shareholders of HHDL, including the Company.
The directors continue to adopt the going concern basis of
accounting in preparing the financial statements, but note that
there is a material uncertainty over the ability of the Company to
fund the recurring and projected expenditure, including development
of the Group's exploration assets. If the Company is unable to
raise necessary funds, the ability of the Company to continue as a
going concern would be in significant doubt and it may be unable to
realise its assets and discharge its liabilities in the normal
course of business. In particular, the inability to fund the
continued development of the Group's exploration assets may result
in them becoming impaired and any failure to contribute its share
of future exploration and development activities in respect of the
oil and gas investments would result in the dilution of the Group's
interests in those assets.
3. Emphasis of Matter
The auditor's report for the year ended 30 November 2016
includes emphasis of matter paragraphs relating to uncertainty as
to whether (a) further funding can be obtained to enable the
Company to continue as a going concern and to continue its
exploration activities; (b) the grant of a new licence for the
continued development of the Mauritania exploration activities; and
(c) the value of the parent company's investment in and loans to
the subsidiaries is supported by the respective exploration
activities.
4. Taxation
No charge for corporation tax for the period has been made due
to the expected tax losses available.
5. Loss per Share
Basic loss per share is calculated by dividing the loss
attributed to ordinary shareholders of GBP425,390 (2015: GBP291,563
loss) by the weighted average number of shares of 1,373,008,189
(2015: 692,258,595) in issue during the year. The diluted loss per
share calculation is identical to that used for basic loss per
share as warrants are "out of the money" and not considered
dilutive.
6. Report and Accounts
The statutory accounts for the year ended 30 November 2016 will
be sent to shareholders of the Company in due course and will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting. The report and accounts will also be made
available on the Company's website:
www.albamineralresources.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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May 03, 2017 02:01 ET (06:01 GMT)
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