A-CAP Resources Limited HY 2014 resources

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A-CAP Resources Limited HY 2014 resources

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A-CAP Resources Limited HY 2014 resources

  1. 1. A-CAP RESOURCES LIMITED AND ITS CONTROLLED ENTITIES ACN 104 028 542 HALF-YEAR REPORT 31 DECEMBER 2013
  2. 2. CONTENTS 1 PAGE DIRECTORS’ REPORT 2 AUDITORS’ INDEPENDENCE DECLARATION 8 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 9 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 10 CONSOLIDATE STATEMENT OF CHANGES IN EQUITY 11 CONSOLIDATE STATEMENT OF CASH FLOWS 12 NOTES TO THE FINANCIAL STATEMENTS 13 DIRECTORS’ DECLARATION 18 INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS 19 CORPORATE DIRECTORY 21
  3. 3. DIRECTORS’ REPORT 2 Your Directors submit the financial report on the consolidated entity consisting of A-Cap Resources Ltd (“A-Cap”) and the entities it controlled (“the Group”) at the end of, or during the half-year ended 31 December 2013. DIRECTORS The following persons were Directors of A-Cap Resources Ltd during or since the end of the half-year and up to the date of this report: Robert James Pett Paul William Thomson (appointed 24th October 2013) Angang Shen (appointed 6th November 2013) Richard Lockwood Henry James Stacpoole Paul Anthony Ingram Paul Woolrich REVIEW OF OPERATIONS During the six month period up to the 31st December 2013, A-Cap has continued to progress work on the Letlhakane Uranium Project whilst evaluating our coal assets. LETLHAKANE URANIUM PROJECT Relative locations of the Letlhakane Uranium resources within PL45/2004. Also highlighted is the excellent infrastructure in the area, which includes a dual lane highway, railway and high tension power lines.
  4. 4. DIRECTORS’ REPORT 3 Feasibility Work Uranium Resource In July 2013, A-Cap announced a major upgrade of the uranium resource at its Letlhakane Uranium Project in Botswana. Highlights include (all grades and pounds are in units of U3O8): A significant new high grade resource has been identified using higher cut-off grades At cut-off grades of 250ppm and 300ppm the grade has increased to 378ppm and 447ppm for contained pounds of 115 million and 83 million respectively The previous high grade resource at 200ppm has increased by 80% to 168 million contained pounds at an increased grade of 8.5% to 308ppm The previous global resource at 100ppm has decreased by 10% but grade increased by 40% to 211ppm The resources at Serule, Gorgon South and Gorgon West remain open to the west This resource upgrade has significant implications for the economics of the project The new mineral resource estimates, at various cut-off grades between 100ppm and 300ppm, are as follows: Cut-off (U3O8 ppm) Total Indicated Total Inferred Global Total Mt U3O8 (ppm) Contained U3O8 (Mlbs) Mt U3O8 (ppm) Contained U3O8 (Mlbs) Mt U3O8 (ppm) Contained U3O8 (Mlbs) 100 131.9 198 57.5 530.5 215 250.9 662.4 211 308.1 200 49.4 269 29.4 198.6 319 139.7 248.1 309 168.9 250 23.4 322 16.6 114.9 390 98.7 138.3 378 115.2 300 11.3 376 9.4 72.4 458 73.2 83.7 447 82.5 2013 Mineral resource estimates for ALL DEPOSITS at various U3O8 cut-offs Metallurgical Testwork Solvent extraction (SX) testwork has been completed at ANSTO’s Lucas Heights facility using the pregnant liquor solutions (PLS) produced from the recent column leaches at SGS in Perth. Results indicate that SX will recover uranium from the PLS. Environmental Social Impact Assessment (ESIA) An amended ESIA Scoping Report including a Gap analysis has been submitted to and approved by the Department of Environmental Affairs.
  5. 5. DIRECTORS’ REPORT 4 Water Exploration Following the completion of a detailed water exploration program, applications to register water rights for each of the 17 boreholes have been approved by the Water Apportionment Board. Power Supply A system survey has been undertaken by Botswana Power Corporation (“BPC”). They have confirmed that they can supply the required power and recommendations and a quotation has been provided. It is planned to sign an MOU with BPC and start detailed design and construction of the infrastructure. COAL PROJECTS Plan view of the Mea Coal Project showing the location of all drill holes to date. The recently completed program focussed on the north-eastern area where an initial JORC-compliant resource is currently being estimated.
  6. 6. DIRECTORS’ REPORT 5 Mea Coal Project During the September quarter A-Cap commissioned Sedgman to complete an engineering and marketing study for the Mea Coal Project. The study examined the geological resource, potential product types available, market demands and mineability of the Mea Resource with respect to these parameters. Bolau Coal Project In December 2013 the Company commissioned Sedgman to complete an assessment of the Bolau Coal Project. Results from this work are expected to be received Q1, 2014. Planning of exploration programs to further assess the coal and uranium potential of the Bolau Project is ongoing. A-Cap’s Bolau Coal Project Letlhakane Coal As part of the ongoing feasibility work for exploitation of the uranium resource, consideration has been given to the potential economic value of this material and whether its extraction and sale could reduce the mining costs for any future Uranium mining operation.
  7. 7. DIRECTORS’ REPORT 6 TENEMENT STATUS In August 2013, A-Cap received confirmation that our application for extension of our prospecting licence for Letlhakane (PL45/2004) had been successfully approved by the Minister of Minerals, Energy & Water Resources for a further two years. The Company relinquished approximately 25% of the licence in areas that are considered unprospective for uranium, coal or base metals mineralisation. The two year extension will allow adequate time for A- Cap to complete all feasibility and environmental work necessary to enable the submission of a mining licence for the Letlhakane Uranium Project. This extension reflects the Government of Botswana’s recognition of A-Cap’s commitment to the development of the Letlhakane Uranium Project, the high quality of work undertaken on the project to date and importantly, A-Cap’s high standing with the communities in which it operates and all stakeholders in general. Applications for renewals of: PL72/2008 (Lebala) PL73/2008 (Diretse) PL74/2008 (Mmatshumo) are currently with the Department of Mines who have confirmed receipt and are in the process of assessing our applications. All other tenements held by A-Cap are in good standing, having carried out all proposed programmes and expenditure requirements. CORPORATE The following Board appointments were made during the period: Mr Paul Thomson, the company’s Chief Executive Officer was appointed as a director of the Company on 24 October 2013 following approval by the company’s members at the Company’s Annual General Meeting. On 6 November 2013 the Company appointed Mr Angang Shen as a director of the Company. Mr Shen is Chairman of both China Growth Minerals Limited and Ansheng Investment Co, Ltd which collectively hold a 19.8% interest in A-Cap. EVENTS SUBSEQUENT TO REPORTING DATE In February 2014, A-Cap announced positive results from an independent study conducted by Sedgman, South Africa, recommending that the Mea Coal Project proceeds to a definitive feasibility study.
  8. 8. DIRECTORS’ REPORT 7 AUDITORS’ DECLARATION The auditors’ independence declaration under section 307C of the Corporations Act 2001 is set out on page 8. This report is made in accordance with a resolution of the Directors made on the 14th of March 2014. R.J. PETT Chairman Dated this 14th day of March 2014 Perth, Australia
  9. 9. FINANCIAL REPORT 9 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2013 Dec 2013 Dec 2012 $ $ Revenue - - R&D tax credits received - 733,632 Other income 44,667 63,717 Administration (178,356) (172,536) Corporate (195,259) (275,554) Employment entitlements (486,721) (641,783) Impairment of capitalised exploration and evaluation - (23,457) Loss on financial assets at fair value through profit and loss (819,441) (48,241) Occupancy (76,741) (129,027) Travel (70,444) (144,073) Loss from ordinary activities before income tax expense (1,782,295) (637,322) Income tax expense - - Loss from ordinary activities after income tax expense attributable to the parent (1,782,295) (637,322) Other Comprehensive (loss) / income Items that may be reclassified subsequently to the profit or loss Exchange differences on translating foreign operations 804,930 (433,438) Other comprehensive (loss) / income for the period 804,930 (433,438) Total comprehensive loss for the half-year attributable to the parent (977,365) (1,070,760) Earnings per share : Basic loss per share (cents per share) (0.37) (0.28) Diluted loss per share (cents per share) (0.37) (0.28) The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
  10. 10. FINANCIAL REPORT 10 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 Dec 2013 Jun 2013 $ $ Assets Current Assets Cash and cash equivalents 1,023,516 3,218,588 Financial assets held at fair value through profit and loss 624,241 1,443,682 Trade receivables and other current assets 275,173 277,130 Total Current Assets 1,922,930 4,939,400 Non-Current Assets Plant & Equipment 451,628 559,747 Capitalised exploration and evaluation 36,156,858 34,125,950 Total Non-Current Assets 36,608,486 34,685,697 Total Assets 38,531,416 39,625,097 Current Liabilities Trade and other payables 595,436 711,752 Total Current Liabilities 595,436 711,752 Total Liabilities 595,436 711,752 Net Assets 37,935,980 38,913,345 Equity Issued capital 54,783,156 54,783,156 Reserves 1,202,618 397,688 Accumulated losses (18,049,794) (16,267,499) Total Equity 37,935,980 38,913,345 The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
  11. 11. FINANCIAL REPORT 11 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF- YEAR ENDED 31 DECEMBER 2013 Ordinary shares Option reserve Accumulated losses Foreign Currency Translation Reserve Total $ $ $ $ $ At 1 July 2013 52,022,147 2,761,009 (16,267,499) 397,688 38,913,345 Loss for the period - - (1,782,295) - (1,782,295) Other comprehensive income - - - 804,930 804,930 Total comprehensive loss for the year - - (1,782,295) 804,930 (977,365) Transactions with owners in their capacity as owners: Issued capital - - - - - At 31 December 2013 52,022,147 2,761,009 (18,049,794) 1,202,618 37,935,980 Ordinary shares Option reserve Accumulated losses Foreign Currency Translation Reserve Total $ $ $ $ $ At 1 July 2012 44,531,868 2,761,009 (14,077,484) (2,510,649) 30,704,744 Loss for the period - - (637,322) - (637,322) Other comprehensive loss - - - (433,438) (433,438) Total comprehensive loss for the year - - (637,322) (433,438) (1,070,760) Transactions with owners in their capacity as owners: Issued capital 4,125,000 - - - 4,125,000 At 31 December 2012 48,656,868 2,761,009 (14,714,806) (2,944,087) 33,758,984 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
  12. 12. FINANCIAL REPORT 12 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF- YEAR ENDED 31 DECEMBER 2013 Dec 2013 Dec 2012 $ $ Cash Flows from Operating Activities Payments to suppliers and employees (1,020,827) (1,464,865) Interest received 31,547 53,679 R&D tax credits received - 733,632 Other income received 11,455 22,123 Net cash flows (used in) operating activities (977,825) (655,431) Cash Flows from Investing Activities Purchase of non-current assets (1,025) (18,273) Exploration expenditure (1,216,222) (2,206,984) Net cash flow (used in) investing activities (1,217,247) (2,225,257) Cash Flows from Financing Activities Proceeds from issues of ordinary shares - 1,375,000 Net cash flows from financing activities - 1,375,000 Net decrease in cash and cash equivalents (2,195,072) (1,505,688) Cash and cash equivalents at beginning of period 3,218,588 3,157,814 Cash and cash equivalents at end of period 1,023,516 1,652,126 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
  13. 13. FINANCIAL REPORT 13 NOTES TO THE FINANCIAL STATEMENTS NOTE 1 BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT Statement of compliance The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half- year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report. Basis of preparation The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the valuation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise indicated. With the exception of the changes in accounting policy disclosed below, the accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company’s 2013 annual financial report for the financial year ended 30 June 2013. Going concern During the half year, the Group generated a loss after tax of $1,782,295 (31 December 2012: $637,322) and incurred net cash outflows from operations of $977,825 (31 December 2012: $655,431). As at 31 December 2013, A-Cap had $1,023,516 in cash (30 June 2013: $3,218,588), $624,241 of marketable securities (30 June 2013: $1,443,682) and net available working capital of $1,327,494 (30 June 2013: $4,227,648). Net investment outflow for the half year attributable to its exploration program were $1,216,222 (31 December 2012: $2,206,984). The Group anticipates future expenditure on its current rights of tenure to exploration and mining tenements up until the expiry of its current Prospecting Licences and on tenement renewals and extensions that have been applied for but not yet granted. In the event the Group does not meet the minimum exploration expenditure the licences may be cancelled or not renewed. The Group plans to continue to progress the Letlhakane Uranium Project’s feasibility studies to ensure the project is capable of early production, whilst continuing to evaluate our coal assets. In order to achieve these objectives, the Group’s continuing viability, its ability to continue as a going concern and to meet its debts and commitments and as they fall due, the Board of Directors of the Group:  Has a strong record of raising capital from existing and prospective investors and is contemplating further initiatives to raise further capital in order to continue its exploration program in the near future;  Have the ability to implement cost reductions where appropriate and will continue to monitor any cost reductions already implemented;  Hold marketable securities valued at $624,241 as at 31st December 2013 currently trading on the London Stock Exchange, and can be sold when required to bolster the Group’s cash position;  Continue to investigate commercial options with regards to our coal assets. Should the Group not successfully achieve these assumptions as described above, it may be unable to realise its assets, nor acquit its liabilities, in accordance with its basis of preparation of these financial statements.
  14. 14. FINANCIAL REPORT 14 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT (CONTINUED) Changes in accounting policy A-Cap had to change some of its accounting policies as the result of new or revised accounting standards which became effective for the annual reporting period commencing on 1 July 2013. The affected policies and standards are:  Principles of consolidation – new standards AASB 10 Consolidate Financial Statements and  Accounting for employee benefits – revised AASB 119 Employee Benefits Other new standards that are applicable for the first time for the December 2013 half-year report are AASB 13 Fair Value Measurement, AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities and AASB 1012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle. These standards have introduced new disclosure for the interim report but did not affect the entity’s accounting policies or any of the amounts recognised in the financial statements. (i) Principles of consolidation – subsidiaries and joint arrangements AASB 10 was issued in August 2011 and replaces the guidance on control and consolidation in AASB 127 Consolidate and Separate Financial Statements and in Interpretation 112 Consolidation – Special Purpose Entities. Under the new principles, the group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group have reviewed its investments in other entities to assess whether the consolidation conclusion in relation to these entities is different under AASB 10 than under AASB 127. No differences were found and therefore no adjustments to any of the carrying amounts in the financial statements are required as a result of the adoption of AASB 10. (ii) Employee benefits - Accounting for employee leave provisions The revised standard AASB 119 has changed the methodology that the Group uses to account for annual leave. Any annual leave expected to be taken in-excess of 12 months as at reporting date is now discounted to present values. As the Group expects all of its employees to take all of their outstanding annual leave balances within 12 months, this policy change did not affect these financial statements as the impact was immaterial. Impact of standards issued but not yet applied by the entity AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2015 but is available for early adoption. When adopted, the standard will affect in particular the Group’s accounting for its available-for- sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and losses on available-for-sale debt investments will therefore have to be recognised directly in profit or loss.
  15. 15. FINANCIAL REPORT 15 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 1 BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT (CONTINUED) Impact of standards issued but not yet applied by the entity (continued) There will be no impact on the Group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the Group does not have any such liabilities. The Derecognition rules have been transferred from AASB 139 Financial Instruments Recognition and Measurement and have not been changed. The Group has not decided when to adopt AASB 9. NOTE 2 CONTINGENT LIABILITIES The directors are not aware of any contingent liabilities or contingent assets existing at the date of this report (2012: Nil). The Group is not involved in any material, legal or arbitration proceedings and, so far as directors are aware, no such proceedings are pending or threatened against the Group. NOTE 3 EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD In February 2014, A-Cap announced positive results from an independent study conducted by Sedgman, South Africa, recommending that the Mea Coal Project proceeds to a definitive feasibility study. NOTE 4 COMMITMENTS Dec-2013 Jun-2013 $ $ Planned Exploration Expenditure Payable - not later than 12 months 7,312,929 3,001,889 - between 12 months and 5 years 4,679,443 899,442 11,992,372 3,901,331 These estimated figures include amounts submitted to the Department of Geological Survey in Botswana in order to maintain the Group’s current rights of tenure to exploration and mining tenements up until the expiry of the leases. The Group anticipates future expenditure on its current rights of tenure to exploration and mining tenements up until the expiry of its current Prospecting Licences and on tenement renewals and extensions that have been applied for but not yet granted, which are included in the above table. In the event the Group does not meet the minimum exploration expenditure the licences may be cancelled or not renewed.
  16. 16. FINANCIAL REPORT 16 Note 5 Issued Capital i) Ordinary shares 1 July to 31 December 2013 Number of Shares Issue Price $ $ Beginning of the reporting period 262,384,986 52,022,147 At the end of the reporting period 262,384,986 52,022,147 1 July to 31 December 2012 Number of Shares Issue Price $ $ Beginning of the reporting period 5 July 2012 17 July 2012 Placement of shares Placement of shares 200,104,986 18,333,333 9,166,667 0.15 0.15 44,531,851 2,750,000 1,375,000 At the end of the reporting period 227,604,986 48,656,851 ii) Options 1 July to 31 December 2013 Number of Options $ Beginning of the reporting period 14,210,000 2,761,009 At the end of the reporting period 14,210,000 2,761,009 1 July to 31 December 2012 Number of Options $ Beginning of the reporting period 14,210,000 2,761,009 At the end of the reporting period 14,210,000 2,761,009
  17. 17. FINANCIAL REPORT 17 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) NOTE 6 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets at fair value through profit or loss are all held for trading and include the following: Dec-13 Jun-13 $ $ Current assets London Stock Exchange listed equity securities * 624,241 1,443,682 *The securities consist of: No. of securities Unit price as at Exercise Expiry 31 Dec 2013 Price Date Praetorian Resources Limited (Ordinary fully paid shares) 3,536,750 £0.09 Praetorian Resources Limited (Options) 1,768,375 £0.01 £0.70 5th Jul-15 Financial assets at fair value through profit or loss are marketable securities held for the purposes of accessing cash when required. The fair values of the financial assets have been based on the quoted price in active markets at the reporting period (Level 1 of the fair value hierarchy).
  18. 18. DIRECTORS’ DECLARATION 18 In accordance with a resolution of the directors of A-Cap Resources Limited, the Directors of the company declare that: 1) The financial statements and notes, as set out on pages 9 to 17, are in accordance with the Corporations Act 2001, including: a. Complying with Accounting Standard AASB 134: Interim Financial Reporting; and b. Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the half-year ended on that date. 2) In the Directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable On behalf of the Directors R J PETT Chairman Dated this 14th day of March 2014 Perth, Western Australia
  19. 19. CORPORATE DIRECTORY 21 A-Cap Resources Limited and its Controlled Entities Registered Office Level 16, AMP Building 140 St Georges Terrace Perth WA 6000 Directors Mr Robert James Pett (Chairman) Mr Paul William Thomson (Managing Director) Dr Paul Woolrich (Executive Director) Mr Angang Shen (Non-executive Director) Mr Richard Lockwood (Non-executive Director) Mr Paul Anthony Ingram (Non-executive Director) Mr Henry James Stacpoole (Non-executive Director) Contact Details Telephone (08) 9220 9850 Facsimile (08) 9220 9820 Email: info@a-cap.com.au Website: www.a-cap.com.au Chief Executive Officer Mr Paul Thomson Company Secretary Mr Denis Ivan Rakich Share Registry Advanced Share Registry Services Limited 150 Stirling Highway Nedlands WA 6009 Telephone (08) 9389 8033 Facsimile (08) 9389 7871 Bankers Westpac Banking Corporation 109 St Georges Terrace Perth WA 6000 Auditors William Buck Level 20, 181 William St Melbourne VIC 3000 Solicitors Minter Ellison Level 49 Central Park 152 – 158 St Georges Terrace Perth WA 6000 Squire Sanders Level 21, 300 Murray St Perth WA 6000 Stock Exchange A-Cap Resources is listed on the Australian Securities Exchange (ASX code: ACB) and the Botswana Stock Exchange (BSE code: A-CAP).

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