TIDMOTC
RNS Number : 1033S
Ortac Resources Limited
16 December 2016
Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining
& Exploration
Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining
& Exploration
16 December 2016
ORTAC RESOURCES LIMITED ("ORTAC" OR "THE COMPANY")
Interim Results
Ortac Resources Limited, the AIM listed exploration and
development company, is pleased to announce its unaudited financial
results for the six months ended 30th September 2016.
Highlights
-- In the DRC, increased initial stake in Casa Mining Ltd
("Casa") to 21.25%; Casa looking to potentially double the 1.2Moz
resource at their Misisi Project;
-- Increased stake in Andiamo Exploration Limited ("Andiamo") to
27%; Andiamo expanded their land position in Eritrea and initiated
plans for an active 2017 exploration season;
-- Zamsort Limited ("Zamsort") continue to proceed with the
construction of their Copper and Cobalt processing plant at Kalaba;
the Company at present has an option on 19.35% equity ;
-- In Slovakia, the Company continues to engage with potential
local partners and assess developments in the alternate leaching
technologies coming to market;
-- Operating losses reduced by 19 % with continued cost reductions;
-- GBP670,000 before costs was raised from two private
placements during the reporting period and one subsequent placement
post period.
Anthony Balme, Chairman at Ortac commented: "The past six months
has seen an improvement in sentiment towards the sector, which is
partially reflected in the renewed interest in some of the
Company's projects and investments. We remain committed to keeping
costs under control and are hopeful that the value in the Company's
portfolio of projects and investments will soon be realised in its
share price."
The Interim Results are set out in full in the following
pages.
For further information, please contact:
Ortac Resources Ltd
Vassilios Carellas (CEO) +44 (0) 20 7389 9050
SP Angel (Nominated Adviser & Broker)
Ewan Leggat/Lindsay Mair +44 (0) 20 3470 0470
Joint Brokers
Beaufort Securities
Jon Belliss / Elliot Hance +44 (0)20 7382 8300
Peterhouse Corporate Finance Limited +44 (0) 20 7469 0930
Guy Miller www.pcorpfin.com
Lucy Williams
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
CHAIRMAN'S STATEMENT
Whilst there is a marked improvement in sentiment towards the
natural resource industry from the lows at the start of this year,
in particular over the last few weeks for base metals, the gold
market has suffered a slight setback which is a little
disappointing. This perhaps could all be put down to the "The Trump
Effect" and concerns about the rise in US interest rates that could
impact precious metals negatively.
Operationally, it can be seen from these interim results that we
have managed to trim our cost structures further. In such a frugal
environment, we have continued to press ahead where opportunities
have presented themselves, taking the view that the market will
ultimately see value in the company's flagship project in Slovakia
and diversified portfolio of investments in Africa.
In Slovakia, we continue to pursue the validation of our licence
through existing and new small scale mining applications. Although
the local court has recently revoked an underground mining permit
issued to the company by the Central Mining Bureau in 2014, we are
confident that between the Mining Bureau and Ministry of Economy,
they will be able to reverse this decision in their favour.
Meanwhile we continue to engage with potential local partners and
continue to assess the alternative gold leaching technologies that
are coming to market.
We recently increased our stake in Andiamo to around 27%, with
Andiamo now anticipating an active 2017 exploration season subject
to the conclusion of its refinancing. Andiamo has recently extended
its exploration licence by nearly 100sq km to the south, extending
its land holding over the western VMS trend, where some exciting
VMS targets have already been identified by the former licence
holder, along with a number of historic targets in the Haykota
licence that merit further investigation. Andiamo has an JORC
Mineral Resource of just under 85,000 near surface gold ounces and
21,000 t of copper at the Yacob Dewar project, and is in an
excellent location to the South of the highly successful Bisha mine
- which now holds the immediately adjacent licence to the north of
the Haykota licence where they recently announced their Ashelli
discover. Andiamo remains one of the few independent exploration
companies working in this highly prospective territory.'
Over the course of the year, we have gradually increased our
stake in CASA Mining Ltd to just under 22%. CASA were originally
looking to establish a small gold mining and processing operation,
but appear to be now swaying towards expanding the current inferred
JORC Mineral Resource of 1.2Moz, where they believe there is scope
to potentially more than double this resource. Both these
approaches require further investment and it is likely that the
source of this investment will ultimately determine the direction
in which the project moves forward.
In Zambia, we continue to hold an option over 19.35% of Zamsort
Limited, the holder of the Kalaba small-scale mining licence and a
highly prospective large scale exploration licence located on the
Kabopo Dome, which is also host to First Quantums' Trident Project.
Zamsort continue to push ahead with their aim of becoming a
producer of Copper and Cobalt from their commercial scale
demonstration plant, which is still under construction. Now the
rainy season has set in, it is anticipated that commissioning of
this plant is targeted during the first half of 2017.
Financial & Corporate Overview
During the period the Company raised GBP370,000 before share
issue costs at 0.025 pence per ordinary share. The primary use of
proceeds was to increase the Company's shareholding in Casa Mining
Limited. On 30 September 2016 the Company had 7,212 million shares
outstanding. A further 750 million shares were issued subsequent to
30 September at 0.040 pence per share to generate gross proceeds of
GBP300,000.
The Company continues to reduce costs and reduced its Operating
Loss for the six months ended 30 September 2016 by 19% to
GBP281,000 from GBP346,000 in 2015. Loss per share as at 30
September 2016 was 0.004 pence (2015: 0.11 pence).
During the period the Company reported an unrealised currency
gain of GBP897,000 resulting from the depreciation of GBP:Euro
Outlook
Against the backdrop of an improved outlook towards the resource
sector, the Company continues to make measured progress with its
project in Slovakia and will continue to be rational in its
approach to its operations and any further investments. The Company
expects that conditions for funding private exploration companies
will improve and that the companies that it has invested in during
the downturn will be able to raise additional funds at much higher
valuations, as recently demonstrated by CASA, to continue the
development of their respective projects.
Anthony Balme
Chairman
16 December 2016
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Group Statement of Comprehensive Income for the Interim Period
Ended 30 September 2016
Six Months Six Months
to to
30 September 30 September
Notes 2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
Other operating income 15 86
Administrative expenses (292) (432)
Share-based payments (4) -
------------- -------------
Operating loss (281) (346)
Interest received 38 20
Share of Loss of associates 10 (10) (16)
------------- -------------
Loss before tax (253) (342)
Income tax expense - -
Loss for the period from
continuing operations 3 (253) (342)
------------- -------------
Other comprehensive income
Items that may be reclassified
subsequently to profit or
loss:
Currency translation differences - 91
Other comprehensive income
for the period, net of tax (253) (251)
------------- -------------
Total comprehensive income
for the period (253) (251)
------------- -------------
Attributable to:
Owners of the parent (253) (251)
------------- -------------
Loss per share from continuing
and discontinued operations
attributable to the owners
of the parent during the
period
(expressed in pence per
share)
Basic 4 (0.004) (0.11)
Group Statement of Financial Position as at 30 September
2016
As at As at
30 September 30 September
Notes 2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
ASSETS
Non-current assets
Intangible assets 8 13,423 11,761
Property, plant and equipment 9 228 210
Investment in associates 10 914 888
Total non-current assets 14,565 12,859
Current assets
Inventories 38 33
Trade and other receivables 395 897
Available for sale financial
investments 11 1,008 -
Cash & cash equivalents 37 182
Total current assets 1,478 1,112
------------- ------------------------------------------
TOTAL ASSETS 16,043 13,971
------------- ------------------------------------------
LIABILITIES
Current liabilities
Loan from Director 12 (45) -
Trade and other payables (92) (82)
TOTAL LIABILITIES (137) (82)
------------- ------------------------------------------
NET ASSETS 15,906 13,889
------------- ------------------------------------------
SHAREHOLDERS' EQUITY
Share capital 5 - -
Share premium 32,431 31,284
Share based payments reserve 2,324 2,266
Foreign exchange reserve 671 (956)
Retained earnings (19,520) (18,705)
TOTAL EQUITY 15,906 13,889
------------- ------------------------------------------
Group Statement of Changes in Equity for the Interim Period
Ended 30 September 2016
Share Share Foreign Share Retained Total
capital premium exchange based earnings equity
reserve payment
reserve
GBP GBP GBP GBP GBP GBP
000's 000's 000's 000's 000's 000's
As at 1 April 2015 - 30,725 (1,043) 2,320 (18,414) 13,588
---------- -------------- ------------- --------- ---------- ---------------
Profit/ (Loss) for
the period - - - - (342) (342)
Items that may be
reclassified subsequently
to profit or loss
Currency translation
differences - - 87 - 87
Other comprehensive
income for the period - - - 51 51
---------- -------------- ------------- --------- ---------- ---------------
Total comprehensive
income for the period - - - (291) (291)
---------- -------------- ------------- --------- ---------- ---------------
Share capital issued - 559 - - - 559
Cost of share issue - - - (54) - (54)
Issue of warrants - - -
Share based payments - - - -
Total transactions
with owners, recognised
directly in equity 559 87 (54) (291) 301
-------------- ------------- --------- ---------- ---------------
As at 30 September
2015 - 31,284 (956) 2,266 (18,705) 13,889
---------- -------------- ------------- --------- ---------- ---------------
As at 1 April 2016 - 32,075 (226) 2,320 (19,267) 14,902
---------- -------------- ------------- --------- ---------- ---------------
Profit/ (Loss) for
the period - - - - (253)
Items that may be
reclassified subsequently
to profit or loss
Currency translation
differences - - 897 - 897
Other comprehensive
income for the period - - -
---------- -------------- ------------- --------- ---------- ---------------
Total comprehensive
income for the period - - - (253) (253)
---------- -------------- ------------- --------- ---------- ---------------
Share capital issued
net of share issue
costs - 356 - - - 356
Share based payments - - - 4 - 4
Total transactions
with owners, recognised
directly in equity - 356 897 4 (253) 1,004
---------- -------------- ------------- --------- ---------- ---------------
As at 30 September
2016 - 32,431 671 2,324 (19,520) 15,906
---------- -------------- ------------- --------- ---------- ---------------
Group Cash Flow Statement for the Interim Period Ended 30
September 2016
Six Months Six Months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
Cash flows from operating
activities
(Loss) before tax (253) (342)
Finance income (38) (20)
Share of loss from associates 10 16
Share based payments 4 -
Exchange differences - (28)
Depreciation 7 7
Operating loss before changes
in working capital (270) (367)
------------- -------------
Decrease in inventories - (4)
(Increase)/decrease in trade
and other receivables 7 (464)
(Decrease)/increase in trade
and other payables (70) (105)
Net cash used in operating
activities (333) (940)
------------- -------------
Cash flows used in investing
activities
Interest received 38 20
(Disposal)/purchases of
intangibles (17) 45
Purchases of property, plant
and equipment - -
Investment in available
for sale financial investments (79) -
Net cash used in investing
activities (58) 65
------------- -------------
Cash flows from financing
activities
Proceeds from issue of ordinary
shares net of share issue
costs and subscriptions
receivable - 559
Net cash inflow from financing
activities - 559
------------- -------------
Net decrease in cash and
cash equivalents (391) (316)
Cash and cash equivalents
at beginning of period 428 498
Cash and cash equivalents
at end of period 37 182
------------- -------------
NOTES TO THE INTERIM REPORT FOR SIX MONTHSED 30 SEPTEMBER
2016
1. Basis of preparation
The condensed consolidated interim financial statements has been
prepared under the historical cost convention and on a going
concern basis and in accordance with International Financial
Reporting Standards and IFRIC interpretations adopted for use in
the European Union ("IFRS") and those parts of the BVI Business
Companies Act applicable to companies reporting under IFRS.
The condensed consolidated interim financial statements
contained in this document do not constitute statutory accounts. In
the opinion of the directors, the condensed consolidated interim
financial statements for this period fairly presents the financial
position, result of operations and cash flows for this period.
The Board of Directors approved this Interim Financial Report on
07 December 2016
Statement of compliance
The condensed consolidated interim financial statements have
been prepared in accordance with the requirements of the AIM Rules
for Companies. As permitted, the Company has chosen not to adopt
IAS 34 "Interim Financial Statements" in preparing these interim
condensed consolidated interim financial statements. The condensed
interim financial statements should be read in conjunction with the
annual financial statements for the year ended 31 March 2016, which
have been prepared in accordance with IFRS as adopted by the
European Union.
Accounting policies
The condensed consolidated interim financial statements for the
period ended 30 September 2016 have not been audited or reviewed in
accordance with the International Standard on Review Engagements
2410 issued by the Auditing Practices Board. The figures were
prepared using applicable accounting policies and practices
consistent with those adopted in the statutory annual financial
statements for the year ended 31 March 2016.
Associates
Associates are entities over which the Group has significant
influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Investments in associates
are accounted for using the equity method of accounting. Under the
equity method, the investment is initially recognised at cost and
the carrying amount is increased or decreased to recognise the
investor's share of the profit or loss of the investee after the
date of acquisition. The Group's investment in associates includes
any goodwill identified on acquisition.
If the ownership interest in an associate is reduced but
significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income is
reclassified to profit or loss where appropriate.
The Group's share of post-acquisition profit or loss is
recognised in the statement of comprehensive income, and its share
of post-acquisition movements in other comprehensive income is
recognised in the other comprehensive income section of the
statement of comprehensive income with a corresponding adjustment
to the carrying amount of the investment. When the Group's share of
losses in an associate equals or exceeds its interest in the
associate, including any other unsecured receivables, the Group
does not recognise further losses, unless it has incurred legal or
constructive obligations or made payments on behalf of the
associate.
The Group determines at each reporting date whether there is any
objective evidence that the investment in the associate is
impaired. If this is the case, the Group calculates the amount of
impairment as the difference between the recoverable amounts of the
associate and its carrying value and recognises the amount adjacent
to 'share of profit/ (loss) of associates' in the statement of
comprehensive income.
Gains and losses resulting from upstream and downstream
transactions between the group and its associates are recognised in
the Group's financial statements only to the extent of unrelated
investor's interests in the associates. Unrealised losses are
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Dilution gains and losses arising in investments in associates
are recognised in the statement of comprehensive income.
2. Financial risk management and financial instruments
Risks and uncertainties
The Board continually assesses and monitors the key risks of the
business. The key risks that could affect the Group's medium term
performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2016 Annual
Report and Financial Statements, a copy of which is available from
the Group's website: www.ortacresources.com. The key financial
risks are market risk (including currency risk), credit risk and
liquidity.
3. Segmental analysis
Segment information has been determined based on the information
reviewed by the Board, being the Group's chief operating
decision-maker, for the purposes of allocating resources and
assessing performance. No revenue is currently being generated.
There are no transactions occurring during the year, or
comparative year, between reportable segments, that affect the
Income Statement. Head office activities are mainly administrative
in nature and are located in the UK/BVI, whilst the activities in
Slovakia relate to exploration and evaluation work.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
By geographical area UK/BVI Slovakia Eritrea Zambia/DRC Total
Six Months to 30 September
2016 GBP 000's GBP 000's GBP 000's GBP 000's(1) GBP 000's
Result
Operating loss (257) (24) - (281)
Finance income 38 - - - 38
Share of Loss of associates - - (10) - (10)
----------------------------- ---------- ---------- ---------- ------------- ----------
Loss before & after
taxation (219) (24) (10) - (253)
---------- ---------- ---------- ------------- ----------
Other information
Depreciation 7 - - - 7
Investment in associate - - - - -
Capital additions - - - - -
Assets
Non-current assets - 13,651 914 - 14,565
Current assets less
cash and cash equivalents 314 64 - 1,100 1478
Cash and cash equivalents 33 4 - - 37
Consolidated total
assets 347 13,719 914 1,100 13,176
---------- ---------- ---------- ------------- ----------
(1) Zambia - 883;
Democratic Republic
of Congo - 217
Liabilities
Non-current liabilities - - - - -
Current liabilities (89) (48) - - (137)
Consolidated total
liabilities (89) (48) - - (137)
---------- ---------- ---------- ------------- ----------
By geographical area UK/BVI Slovakia Eritrea Zambia Total
Six Months to 30 September
2015 GBP 000's GBP 000's GBP 000's GBP 000's GBP 000's
Result
Operating loss (268) (78) - (346)
Finance income 20 - - - 20
Share of (Loss) of
associates - - (16) - (16)
Loss before & after
taxation (248) (78) (16) - (342)
---------- ---------- ---------- ---------- ----------
Other information
Depreciation 4 3 - - 7
Investment in associate - - - - -
Capital additions (45) - - - (45)
Assets
Non-current assets 7 11,964 888 - 12,859
Current assets less
cash and cash equivalents 47 72 - 811 930
Cash and cash equivalents 178 4 - - 182
Consolidated total
assets 232 12,040 888 811 13,971
---------- ---------- ---------- ---------- ----------
Liabilities
Non-current liabilities - - - - -
Current liabilities (52) (30) - - (82)
Consolidated total
liabilities (52) (30) - - (82)
---------- ---------- ---------- ---------- ----------
4. Loss per share
The calculation of earnings per share is based on the loss
attributable to equity holders divided by the weighted average
number of share in issue during the period:
Six Months Six Months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
Net loss after taxation (253) (342)
Weighted average number
of ordinary shares used
in calculating basic
loss per share (millions) 5,764 3,179
Basic & diluted loss
per share (expressed
in pence) (0.004) (0.11)
------------- -------------
As the inclusion of the share options would result in a decrease
in the earnings per share, they are considered to be anti-dilutive,
and as such, a diluted loss per share is not included.
5. Share capital
The authorised share capital of the Company and the called up
and fully paid amounts at 30 September 2016 were as follows:
A) Authorised GBP 000's
Unlimited Ordinary shares
of no par value -
B) Called up, allotted,
issued and fully paid Number of shares Nominal value
--------------------------- ---------------------------------------- --------------------------------------
As at 1 April 2016 5,732,211,373 -
Additions:
26 September 2016 at
.025p 800,000,000
27 September 2016 at
.025p 680,000,000 -
As at 30 September 2016 7,212,211,373 -
---------------------------------------- --------------------------------------
6. Share based payments
Movements on the number of share options and their exercise
price during the period ended 30 September 2016 are as follows:
Weighted Weighted
Average Average
Exercise Exercise
Price 6 months to Price Year to
30 September 30 March
2016 2016
(Unaudited) (Audited)
Pence No of Options Pence No of Options
1 April 2016 0.94 279,300,000 0.94 279,300,000
Cancelled - -
Modified - - - -
Lapsed - - - -
Granted .05 135,000,000 - -
30 September
2016 0.65 414,300,000 0.94 279,300,000
-------------- --------------
The parameters used to ascertain the fair value of $4,000 of
share options issued during the period are:
Volatility -35%
Risk-free Interest Rate - 2%
Expected Exercise Period 3 years
Share Warrants
No warrants were granted during the period ended 30 September
2016. There are no warrants on issue; the details concerning
warrants which have expired can be found in the audited financial
statements for the year ended 31 March 2016.
7. Investment in group companies
At 30 September 2016, the Group held 100% of the share capital
of the following wholly owned subsidiary companies:
Company Country of Proportion Nature of business
Registration held
Ortac Resources England and 100% Holding Company
(UK) Limited Wales
St. Stephans Slovak Republic 100% Mineral Exploration
Gold s.r.o.*
Carpathian Soviet Republic 100% Mineral Exploration
Minerals s.r.o.*
Ortac s.r.o.* Slovak Republic 100% Mineral Exploration
* Wholly owned subsidiary of Ortac Resources (UK)
Limited
During the period the Company incorporated Carpathian
Minerals s.r.o. to apply for minerals licences
in the Slovak Republic. It is wholly-owned by Ortac
Resources (UK) Limited.
8. Intangible assets
Six Months Six Months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
Balance brought forward 12,516 11,688
Additions - (45)
Currency translation
adjustments 907 118
Amortisation - -
Balance carried forward 13,423 11,761
Net book value 13,423 11,761
------------- -------------
The net book value is
analysed as follows:
Deferred exploration
expenditure
-Exploration and development
costs- Slovakia 13,254 11,491
-Goodwill - Slovakia 169 270
13,423 11,761
------------- -------------
9. Tangible assets
Six Months Six Months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
Cost
Beginning of the period 355 319
Currency translation
adjustment 27 5
End of the period 382 324
Depreciation
Beginning of the period (139) (104)
Currency translation
adjustment (6) (3)
Charge for the period - (7)
End of the period (145) (114)
Net book value at beginning
of period 227 215
------------- -------------
Net book value at end
of period 210 210
------------- -------------
10. Investment in associates
As previously reported, on the 20 April 2014, Ortac Resources
Limited increased its investment in Andiamo Exploration Limited (a
private UK- registered company) from 18.47% to 25.37%, which
resulted in the investment being reclassified to an associated
company from an available for sale financial asset. During the
period ended 30 September 2016 the Company increased its interest
to 26.99%. In September 2016 Andiamo entered into an agreement with
its joint venture partner Environminerals East Africa Ltd ("EEA")
to acquire the EEA joint venture interest earned over a part of the
Andiamo licence in exchange for 25% of the issued share capital of
Andiamo. This transaction has not yet completed as of the date of
the approval of these interim accounts but when closed the interest
of the Company in Andiamo would be reduced to 20.24%
The carrying value of Andiamo is GBP914,000 determined as
follows:
Six months Six months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
------------------------- ------------- -------------
Beginning of the period 874 904
Purchase of shares 50 -
Share of (loss) from
associate (10) (16)
------------- -------------
End of the period 914 888
------------- -------------
Ortac's share of the results of Andiamo Exploration Limited are
shown below:
Six months Six months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
--------------- ------------- -------------
Revenues - -
------------- -------------
Share of loss (10) (16)
------------- -------------
Nature of investments in associates:
Name of Place of % of ownership Nature Measurement
entity business/country interest of the method
of incorporation relationship
------------- ------------------ --------------- -------------- ------------
Andiamo England 26.99% Strategic Equity
Exploration partnership
Limited
The latest available financial statements for Andiamo
Exploration Limited (December 2015) were included with the audited
accounts at 31 March 2016. There are no interim statements
available since that date. During the year ended 31 December 2015
Andiamo lost approximately US$200,000 and at 31 December 2015
Andiamo had net assets of US$10,888,000. Ortac's interest in the
loss and net assets was approximately US$54,000 and US$ 2,940,000
respectively. The Directors believe that at 30 September 2016 the
fair value of the Group's interest in Andiamo Exploration Limited
is equal to or greater than its carrying value.
Andiamo Exploration Limited is a private company and there is no
quoted market price available for its shares.
11. Available for sale financial assets
Six Months Six Months
to to
30 September 30 September
2016 2015
(Unaudited) (Unaudited)
GBP 000's GBP 000's
Beginning of the period 835 -
Additions 173 -
Disposals - -
Loss on disposals - -
Reclassification to - -
investment in associates
------------- -------------
End of the period 1,008 -
------------- -------------
The available for sale financial assets include:
(i) the Company's investment in Casa Mining Limited of
GBP217,000. During the period the Company increased its
shareholding from 12% to 19.63%. Subsequent to 30 September 2016
the Company purchased additional shares in Casa which increased its
shareholding to 21.25% and in future accounts Casa will be
accounted for as an associated company.
and
(ii) the Company's Secured Loan to Zamsort Limited of GBP791,000 described below.
September
2016 2015
Secured Loan,
8% secured convertible loan
note, Principal only 791 791
On 30 March 2015, Ortac Resources Limited announced that it had
entered into a US $600,000 (GBP405,405) 8% Secured Convertible Loan
Note (the "Convertible Loan") and a one note for one share Call
Option Agreement (the "Option") with Zamsort, a private company
registered in Zambia that holds a prospective Cu-Co mining and
exploration licence in the Zambian Copper Belt.
As at 31 March 2015, Ortac Resources Limited had advanced US$
450,000 (GBP304,000) to Zamsort as a first instalment of this loan,
with the balance of US$ 150,000 following due diligence, paid on 9
April 2015.
On 25 August 2015 the Company exercised its Option to purchase a
further US$ 600,000 of the Convertible Loan and now has a total
investment of US$ 1,200,000 convertible into 19.35% of Zamsort. The
Convertible Loan is carried at its original cost of GBP791,000.
Interest of GBP 92,000 (2015 - GBP 20,000) is included with Trade
and other receivables.
The loan notes are convertible at any time prior to the
redemption date.
12. Loan from Director
In September 2016 a Company associated with a Director made a
short term loan of GBP40,983 (US$51,400) to enable the Company to
complete a purchase of Casa shares.
In October upon completion of two share placements the Company
repaid the loan together with a service fee of GBP 4,098.
13. Contingent liability
As part of its acquisition of Kremnica Gold s.r.o. and Kremnica
Gold Mining s.r.o., Ortac Resources (UK) Limited (formerly Ortac
Resources plc) agreed to pay:
a) Vendor royalties of up to US$3,750,000 in either shares or
cash - being $15 per ounce on the first 250,000 ounces of gold
equivalent (gold plus silver) resource defined as proven and
probable reserve in the bankable feasibility study. Said royalty
will become payable within 60 days of all required permits being
obtained to allow commercial production at the Kremnica property;
and
b) A 2 per cent Net Smelter Royalty ("NSR") on gold and silver
production from the Kremnica Gold Project to a limit of the first
1,000,000 ounces produced, reduced to a 1 per cent NSR on the next
1,000,000 ounces and zero per cent thereafter. At any time prior to
the reduction of the NSR percentage to 1 per cent, Ortac may
acquire half of the 2 per cent NSR for US$1,000,000. After the
reduction of the NSR to 1 per cent, the Purchaser may acquire all
of the Vendor NSR for US$1,000,000.
On the basis of a third party resource study, updated in 2013,
the Directors are confident that proven and probable reserves will
significantly exceed 250,000 ounces of gold equivalent (gold)
resource. Notwithstanding this, until such time as it is clear that
all the required permits to achieve commercial production will be
secured, no provision for such amounts can be included in the Group
financial statements.
14. Post balance sheet events
(1) In October 2016, the Company increased its interest in Casa
Mining Limited to 21.25%. It issued 251,296,486 shares to a
Director with a stated value of GBP 81,672 (.0325 pence per share)
to acquire 124,722 Casa shares and also subscribed for an
additional 62,500 shares offered by Casa at a cost of US$ 50,000.
Since these transactions have increased its shareholding to 21.25%,
in future the Company will account for Casa Mining Limited as an
associated company;
(2) In October 2016 the Company announced that it had placed
750,000,000 shares at .04 pence and raised GBP300,000 before share
issue costs. The Company now has 8,213 million shares on issue.
15. Other matters
The condensed consolidated interim financial statements set out
above do not constitute the Group's statutory accounts for the
period ended 30 September 2016 or for earlier periods, but is
derived from those accounts where applicable.
A copy of this interim statement is available on the Ortac's
website: www.ortacresources.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFFFFALRLIR
(END) Dow Jones Newswires
December 16, 2016 07:31 ET (12:31 GMT)
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