TIDMCGO
RNS Number : 1811N
Contango Holdings PLC
20 September 2019
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
20 September 2019
Contango Holdings Plc
("Contango" or the "Company")
Audited Final Results for the year ended 31 May 2019
Overview
-- Entered into a Memorandum of understanding with Consolidated
Growth Holdings (CGH) in December 2017, to acquire the Lubu
Coalfield in Zimbabwe that hosts thermal and coking coal
-- Contango will acquire the Lubu Coalfield from CGH for gross
consideration of circa GBP6.45m through the issue of ordinary
shares at a price of 5p, subject to certain conditions being
met
-- Re-listing of the ordinary shares anticipated October 2019
-- Already working "on the ground" at the Lubu Coalfield;
Contango have advanced funds to accelerate drilling programme prior
to IPO for potential purchasers of the coal to review assays
Operating Review
In December 2017, we notified our shareholders that we had
entered into a Memorandum of understanding with Consolidated Growth
Holdings (CGH) to acquire a mining asset in Zimbabwe. During the
course of this financial year we have been working with our
professional advisers and various regulatory bodies to complete all
the due diligence and documentation necessary to finalise the
transaction that will see Contango Holdings acquire the Lubu
Coalfield in Zimbabwe. The transaction entails that Contango
acquires the Lubu Coalfield from CGH for gross consideration of
circa GBP6.45m through the issue of ordinary shares at a price of
5p. The shares last traded at 3.75p on 22 December 2017 whilst we
raised funds for the IPO at 3p.
The Board did not envisage that the transaction would take such
a lengthy period to finalise, however, we are now optimistic that
we can re-list in October 2019 having completed all the due
diligence and documentation that was subject to regulatory review.
Moreover, we have been working "on the ground" at the Lubu
Coalfield by advancing funds to the project so that we can commence
a drilling campaign designed to provide independent assays for
potential purchasers and off-takers to review with regard to coal
quality and composition. This work stream was accelerated given the
enquiries from potential customers.
Financial
Funding
The Company is funded through cash raised from the IPO.
Revenue
The Company has generated no revenue during the year, however is
focusing on acquisition targets that will ultimately generate
revenue for the Company.
Expenditure
The Company has low ongoing overheads and devoted its cash
resources to the transactions costs and advancing certain funds to
Consolidated Growth Holdings in order to progress activities on the
Lubu Coalfield site.
Liquidity, cash and cash equivalents
At 31 May 2019, the Company held GBP280,884 (2018:
GBP637,558).
Dividend
The Directors do not intend to declare a dividend in respect of
the period under review.
Outlook
The mining sector has continued to generally benefit from
improvements in commodity prices. However, these trends have not
led to an improvement in in the junior mining sector which
continues to be affected by risk averse investors seeking to avoid
companies that require development capital given the "financing
risk" faced in the sector. The major and mid-tier mining companies
have all enjoyed strong interest following the improvement of
certain commodities in their portfolio.
Against this background, Contango is looking forward to closing
the transaction and being able to fast track the Lubu Coalfield
into revenue especially given the recent work to engage with
potential customers by providing independent samples of the coal at
the Lubu Coalfield. The Board is acutely aware of the economic
environment in Zimbabwe, which presents both challenges and
opportunities, but they have not impacted on the rate of progress
at the Lubu Coalfield thus far. Also, we are mindful that the IMF
has now commenced a twelve month programme of monitoring the
economic policies of the country, before embarking on a decision to
provide funding. This would be a seminal moment in the country's
recent history and allow the sort of investment in the domestic
infrastructure to attract further foreign investment in future
years. We as a board have taken a long-term view that the country
will improve and that the discount on asset valuations will
diminish.
Finally, the company will raise further funds upon re-listing
and expects to outline the details of the transaction imminently
when the prospectus is launched in the very near future.
Oliver Stansfield
Executive Director
*S *
For further information, please visit
www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc E: info@contango-holdings-plc.co.uk
Brandon Hill Capital Limited T: +44 (0)20 3463 5000
Financial Adviser & Broker
Jonathan Evans
St Brides Partners Ltd T: +44 (0)20 7236 1177
Financial PR & Investor Relations
Catherine Leftley
Statements of comprehensive income
For the year ended 31 May 2019
Year ended Year ended
31 May 2019 31 May 2018
Notes GBP GBP
Administrative fees and other expenses 4 (320,229) (326,676)
-------------- -------------
Operating loss (320,229) (326,676)
Finance revenue - -
Finance expense -
-------------- -------------
Loss before tax (320,229) (326,676)
Income tax - -
Loss for the year and total comprehensive loss for the year (320,229) (326,676)
-------------- -------------
Basic and diluted loss per Ordinary Share (pence) 5 (0.75) (1.00)
The notes to the financial statements form an integral part of
these financial statements.
Statements of financial position
For the year ended 31 May 2019
As at As at
Notes 31 May 2019 31 May 2018
GBP GBP
Current assets
Other receivables 9 31,311 12,188
Cash and cash equivalents 10 280,884 637,558
Total current assets 312,195 649,746
Current liabilities
Trade and other payables 11 75,748 93,070
------------- -------------
Total current liabilities 75,748 93,070
Net assets 236,447 556,676
------------- -------------
Equity
Share capital 7 429,500 429,500
Share premium 7 368,978 368,978
Warrant reserve 7 84,874 84,874
Retained earnings 7 (646,905) (326,676)
----------------- -------------
Total equity 236,447 556,676
----------------- -------------
The notes to the financial statements form an integral part of
these financial statements.
Statements of changes in equity
For the year ended 31 May 2019
Warrant Total
Share Capital Share premium Reserve Retained earnings Equity
GBP GBP GBP GBP GBP
Balance as at 31 May 2017 1 - - 1
Loss for the year 31 May 2018 - - - (326,676) (326,676)
Ordinary Shares and warrants issued (note
7) 429,500 549,126 84,874 - 1,063,500
Ordinary Share issue costs (note 7) - (180,148) - - (180,148)
-------------- --------------
Balance as at 31 May 2018 429,500 368,978 84,874 (326,676) 556,676
-------------- -------------- --------- ------------------ ----------
Loss for the year (320,229) (320,229)
Balance as at 31 May 2019 429,500 368,978 84,874 (646,905) 236,447
-------- -------- ------- ---------- --------
The notes to the financial statements form an integral part of
these financial statements.
Statements of cash flows
For the year ended 31 May 2019
Year Year
ended ended
Notes 31 May 2019 31 May 2018
GBP GBP
Operating activities
Loss after tax (320,229) (326,676)
Changes in working capital
(Increase)/decrease in trade and other receivables (19,123) 4,812
Increase/(Decrease) in trade and other payables (17,322) 24,320
------------- -------------
Increase/(Decrease) in Net cash from operating activities (356,674) (297,544)
Financing activities
Ordinary Shares issued (net of issue costs) 7 - 883,352
------------- -------------
Net cash flows from financing activities - 883,352
(Decrease)/Increase in cash and short-term deposits (356,674) 585,808
Cash and short-term deposits as at the start of the period 637,557 51,750
Cash and short-term deposits at the end of the period 280,884 637,558
------------- -------------
The notes to the financial statements form an integral part of
these financial statements.
Notes to the Financial Statements
For the year ended 31 May 2019
1. General information
The Company was incorporated in England under the Laws of
England and Wales with registered number 10186111 on 18 May 2016.
All of the Company's Ordinary Shares were admitted to the London
Stock Exchange's Main Market and commenced trading on 1 November
2017. The company was re-registered as a public company under
Companies Act 2006 on 1 June 2017, by the name Contango Holdings
plc.
The Company's focus is to identify, acquire and scale projects
focused on mining. At present, the Company is looking to reverse a
mining asset into the Company. The Company had no employees during
the period other than the Directors.
2. Summary of Significant Accounting Policies
The Board has reviewed the accounting policies set out below and
considers them to be the most appropriate to the Company's business
activities.
a) Basis of Preparation
The Company Financial Information has been prepared in
accordance with and comply with IFRS as adopted by the European
Union, International Financial Reporting Interpretations Committee
interpretations and the Companies Act 2006. The financial
statements have been prepared under the historical cost convention
as modified for financial assets carried at fair value.
At the date of authorisation of these financial statements.
certain new standards, amendments and interpretations to existing
standards have been published but are not effective, and have not
been adopted early by the Company. The Directors anticipate that
all of the pronouncements will be adopted in the Company's
accounting policies for the first period beginning on or after the
effective date of the pronouncement.
The Company has not early adopted amended standards and
interpretations which are currently in issue but not effective for
accounting periods commencing from 1 June 2018 as adopted by the
EU. The Directors do not anticipate that the adoption of standards
and interpretations will have a material impact on the Company's
financial statements in the periods of initial application.
The financial information of the company is presented in British
Pound Sterling ("GBP").
b) Going concern
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable
future, which is defined as twelve months from the signing of this
report. The directors accept that there is a material uncertainty
in respect of going concern are confident that the Company will be
able to raise additional finance as and when required. For this
reason, the directors continue to adopt the going-concern basis of
accounting in preparing the financial statements.
c) Standards and interpretations issued but not yet applied
At the date of authorisation of this Document, the Directors
have reviewed the accounting standards in issue by the
International Accounting Standards Board and the International
Financial Reporting Interpretations Committee, which are effective
for annual accounting periods ending on or after the stated
effective date. In their view, none of these standards would have a
material impact on the financial reporting of the Company
d) Taxation
The tax currently payable is based on the taxable profit for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred income tax is provided for using the liability method
on temporary timing differences at the balance sheet date between
the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes. Deferred income tax liabilities
are recognised in full for all temporary differences. Deferred
income tax assets are recognised for all deductible temporary
differences carried forward of unused tax credits and unused tax
losses to the extent that it is probable that taxable profits will
be available against which the deductible temporary differences,
and carry-forward of unused tax credits and unused losses can be
utilised. The carrying amount of deferred income tax assets is
assessed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed
at each balance sheet date and are recognised to the extent that is
probable that future taxable profits will allow the deferred income
tax asset to be recovered.
e) Financial Instruments
The Company has applied IFRS 9 for the first time in these
financial statements. IFRS 9 sets out requirements for recognising
and measuring financial assets and financial liabilities and
replaces IAS 39 Financial Instruments: Recognition and
Measurement.
The company has applied the new standard with effect from 1
January 2018 [add comment here on impact on opening equity - if
none, state no impact]. This has not lead to any changes in the
basis of the measurement categories of either financial assets or
financial liabilities, [although it has led to changes in the
carrying amounts of certain financial assets arising from a change
in the measurement of impairment]. The comparative period have not
been restated and reflect the requirements of IAS 39.
Financial Assets
On initial recognition, a financial asset is classified as
measured at amortised cost, fair value through other comprehensive
income (FVTOCI) or fair value through profit or loss (FVTPL).
As at the reporting date the Company holds no financial assets
other than cash.
f) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the
company are classified according to the substance of the
contractual arrangements entered into and the definitions of a
financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the company after deducting all of its
liabilities. Equity instruments are recorded at the proceeds
received, net of direct issue costs.
Financial liabilities
Financial liabilities are classified as either financial
liabilities at fair value through profit or loss or financial
liabilities measured at amortised cost.
Financial liabilities are classified as at fair value through
profit or loss if the financial liability is either held for
trading or it is designated as such upon initial recognition
Other financial liabilities
Trade and other payables are initially measured at fair value,
net of transaction costs, and are subsequently measured at
amortised cost, where applicable, using the effective interest
method, with interest expense recognised on an effective yield
basis.
Warrants
Warrants classified as equity are recorded at fair value as of
the date of issuance on the Company's Balance Sheet and no further
adjustments to their valuation are made. Management estimates the
fair value of these liabilities using option pricing models and
assumptions that are based on the individual characteristics of the
warrants or instruments on the valuation date, as well as
assumptions for future financing, expected volatility, expected
life, yield, and risk-free interest rate.
g) Derecognition of financial liabilities
The company derecognises financial liabilities when, and only
when, the company's obligations are discharged, cancelled or they
expire.
h) Financial Risk Management Objectives and Policies
The Company's major financial instruments include bank balances,
trade payables and accruals. Details of these financial instruments
are disclosed in respective notes. The risks associated with these
financial instruments, and the policies on how to mitigate these
risks are set out below. The management manages and monitors these
exposures to ensure appropriate measures are implemented on a
timely and effective manner.
Liquidity Risk - the Company raises funds as required on the
basis of budgeted expenditure and inflows. When funds are sought,
the Company balances the costs and benefits of equity and debt
financing. When funds are received they are deposited with banks of
high standing in order to obtain market interest rates.
3. Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of income, expenditure, assets and
liabilities. Estimates and judgements are continually evaluated,
including expectations of future events to ensure these estimates
to be reasonable.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The Company's nature of operations is to act as a special
purpose acquisition company.
Going concern is assessed to be a significant judgement which is
detailed in accounting policy note 2 (b)
4. Loss before taxation
Loss before income tax is stated Year Year
after charging: ended ended
31 May 2019 31 May 2018
GBP GBP
Directors' remuneration 72,000 48,000
Fee payable to the Company's
auditor for the audit of the
company's annual accounts 16,800 15,000
Fee payable to the Company's
auditor in respect of all other
services 60,750 28,650
The Company did not employ any staff during the period under
review other than the Directors. The Directors are the only members
of key management and their remuneration related solely to
short-term employee benefits.
5. Loss per Ordinary Share
The calculation of the basic and diluted loss per Ordinary Share
is based on the following data:
Year Year
ended ended
31 May 31 May
2019 2018
Earnings
Loss from continuing operations for the period attributable to the equity holders of the
Company (320,229) (326,676)
Number of Ordinary Shares
Weighted average number of Ordinary Shares for the purpose of basic and diluted earnings
per
Ordinary Share (number) 42,949,987 32,596,294
----------- -----------
Basic and diluted loss per Ordinary Share (pence) (0.75) (1.00)
----------- -----------
There are no potentially dilutive Ordinary Shares in issue.
6. Income tax
Corporation tax is calculated at 19% of the estimated taxable
loss for the period.
As the Company continues to be non-trading, no account has been
made for Corporation Tax nor for Deferred Tax in the year ended 31
May 2019. The Company also believes there are no accumulated losses
to be carried forward. The Board believes that the previously
reported losses in the year ended 31 May 2018 may not be
recoverable against future gains.
7. Share capital
Number of Share Share Warrants Total
Ordinary Capital premium Reserve share capital
Shares issued
and fully
paid
GBP GBP GBP GBP
31 May 2017 1 - - - -
Subdivision
of GBP1 shares
into 99 - - - -
100 1p shares
Issue of Ordinary
Shares and
Warrants:
1 June 2017
26 October
2017
1 November
2017 4,999,900 50,000 - - 50,000
12,500,000 125,000 76,906 48,094 250,000
Share Issue
Cost 25,449,987
254,500 472,220 36,780 763,500
(180,148)
(180,148)
As at 31 May
2018 and 2019 42,949,987 429,500 368,978 84,874 883,352
--------------- ---------- ------------- --------- --- ---------------
The Ordinary Shares issued by the Company have par value of 1p
each and each Ordinary Share carries one vote on a poll vote. The
Authorised share capital of the company is GBP5,000,000 ordinary
shares at GBP0.01 per share resulting in 500,000,000 ordinary
shares.
8. Financial instruments
As at As at
31 May 31 May
2019 2018
GBP GBP
Financial assets
Cash and cash equivalents 280,884 637,558
Financial liabilities
At amortised cost 75,748 93,070
9. Other receivables
2019 2018
GBP GBP
Prepayments 31,311 12,188
31,311 12,188
====== ======
10. Cash and Cash Equivalents
2019 2018
GBP GBP
Cash at Bank 280,884 637,558
=================== ===================
11. Trade and other payables
2019 2018
GBP GBP
Trade payables 35,350 48,000
Accruals and other payables 40,398 45,070
75,748 93,070
================== ==========================
12. Events after the reporting date and Capital Commitments
The company advanced to Consolidated Growth Holdings Ltd (CGH)
$120,000, $130,000 and $24,000 in June 2019 August and September
2019 respectively. These advances were made in order to accelerate
the work programme at the Lubu Coalfield. In the event the proposed
acquisition of the Lubu Coalfield project in Zimbabwe does not
complete, CGH will be obliged to repay by 24(th) December 2019 the
funds advanced plus interest at 3% per month rising to 6% after
three months in the event that the transaction lapses.
There were no other significant subsequent events.
13. Related Party Transactions
All directors hold shares and warrants as disclosed on pages 11
and 12 in the Directors' Remuneration Report. Neal Griffiths and
Oliver Stansfield are Directors of both Brandon Hill Capital and
the Company. Brandon Hill Capital acts as the broker to the Company
and are paid an annual retainer of GBP25,000 per annum.
14. Warrants
No warrants were issued or exercised in the year ended 31 May
2019.
During the year ended 31 May 2018 the Company issued the
following warrants to subscribe for shares:
Warrant exercise Number of Vesting Expiry Fair value
Price warrants Date Date of individual
granted option
GBP0.03 18,666,667 26 Oct 31 Oct GBP0.0026
2017 2019
GBP0.05 11,666,650 1 Nov 31 Oct GBP0.0032
2017 2019
Total granted 30,333,317
during the year
ended 31 May
2018
The weighted average fair value of each warrant granted last
year was GBP0.0028.
No warrants have been exercised in the Company.
20 September 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEFFISFUSEEU
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