30th Sep 2009 07:00
30 September 2009
Interim Results for the six months ended 30 June 2009
Alexander Mining plc ("Alexander", the "Company" or the "Group"), the AIM-listed mining and mineral processing technologies company, announces its interim results for the six months ended 30 June 2009.
Highlights
Agreement with RPT Resources to develop mining projects with MetaLeach's proprietary leaching technologies.
Several multinational companies are assessing the Company's leaching technologies. Included in the above are companies which have significant interests in the African copper belt (Zambia and the Democratic Republic of the Congo) and Southern Africa. This is becoming a focus as a result of advances made in using AmmLeach® to process copper/cobalt ores.
A notable amount of activity with other mid and small size mining companies continues, including involvement in distressed mining situations where Alexander's leaching technology could make a significant difference to the economic prospects of these situations.
Filing of AmmLeach® supplementary patents as research and development work progresses.
Based upon recent testwork the potential applicability of AmmLeach® has expanded to include some nickel laterites, with the potential for significant cost savings compared to conventional nickel processing methods.
The Company is in negotiations about the possible cash sale of its Leon asset in Argentina, which may or may not lead to a transaction.
Cash position totalling £4.18 million at the end of June, with net cash outflow in the period significantly reduced due to closure of the Argentina operations and other cost cutting measures.
The strong recovery in financial markets has been reflected in a sharp rally for metals' prices and a much improved outlook for the global mining industry.
Chairman's Review
I am pleased to report on Alexander Mining plc's interim results for the six months ended 30 June 2009.
MetaLeach
During the period, the Company has continued to devote its efforts to the commercialisation of its proprietary MetaLeach® mineral processing technologies. It is gratifying to report that we have made significant progress.
Firstly, the major effort in the global licensing of our technology with mining companies and which is aimed at generating a long term royalty stream has made excellent progress. In the course of these activities, confidentiality agreements have been signed with both majors and juniors. In particular, the Company has had significant interest from companies active or interested in the African copper belt (Zambia and the Democratic Republic of the Congo). This is due to the nature of the region's prevailing mineralogy, which is especially suited to AmmLeach®, and important advances made in using AmmLeach® to process copper/cobalt ores.
Secondly, the consultancy agreement with RPT Resources ("RPT"), announced on 27 August 2009, to develop mining projects with MetaLeach's proprietary leaching technologies is an excellent way of accelerating the commercialisation of our leaching technology for mutual benefit. It will allow the Company to participate in any future profits and gains via significant equity stakes in suitable properties/projects but with a negligible cost to Alexander. The Company has identified many attractive opportunities in different regions of the world suitable for acquiring direct equity interests in copper and zinc properties and development projects. In turn, RPT brings its valuable financial resources and equity capital markets experience to this exercise and we are already presenting properties, with excellent prospects, for their consideration.
Under the agreement, Alexander will be paid a consultancy fee of US$300,000 per annum for information regarding potential mineral properties which may be suitable for the use of MetaLeach's proprietary leaching technologies. RPT can select properties for acquisition and will be responsible for funding initial acquisition costs and the development of a selected property through to commercial production. MetaLeach will provide RPT with technical/testwork services on its normal commercial terms in relation to the application of the leaching technologies to each selected property. MetaLeach will provide a licence for the use of its leaching technologies on the selected property to enable the property to be developed and for commercial production to proceed. RPT and MetaLeach will share profits and gains from a selected property, after crediting RPT with all acquisition and subsequent development costs, in the ratio of 80 per cent. and 20 per cent. respectively.
As a result of our research and development activities the Company has filed important AmmLeach® supplementary patents. The Company is advancing discussions with third parties on collaboration to progress the HyperLeach® technology at a minimal cost. An additional opportunity for AmmLeach® has arisen with recent research and development testwork on its applicability for processing some nickel laterites, with the potential for significant cost savings compared to conventional nickel processing methods
Financial Review
The Company's cash balance at 30 June was £4.18m, with net expenditure in the period reducing from £2.6m in 2008 to £0.7m in 2009. This reduction in expenditure results from the focussing of the Group's activities on the MetaLeach technologies, which is a significantly lower cost business than the cash intensive mineral exploration activities previously undertaken.
In Argentina, following the effective closure of our operations, we have realised income for the period from the sale of assets of £86,000. In addition, our costs have fallen to a nominal level, albeit consistent with keeping our licences in good order. Separately, the Company is in negotiations about the possible cash sale of its Leon asset, which may or may not lead to a transaction.
Within administration, costs have been reduced wherever possible, such as the decision to prepare only electronic copies of the 2009 interim report, in order that the Group's cash balance can be focused on the commercialisation of the proprietary MetaLeach® mineral processing technologies.
Outlook
Since the end of the first quarter of the year, world financial markets have rallied strongly, including base metal prices, especially copper, as China adds to its strategic stockpiles. Notwithstanding the serious problems remaining in most Western World economies, the Company believes that the outlook for the international mining industry has greatly improved since the beginning of the year. Accordingly, it is in this environment, together with the excellent progress made to date, and the Company's sound financial health, that we are confident about Alexander's prospects and we look forward to reporting in due course.
Finally, as always, I would like to thank the Company's shareholders for their continuing support and our employees, directors, consultants and advisors for their dedicated hard work.
Matt Sutcliffe
Executive Chairman
29 September 2009
For further information please contact:
|
Martin Rosser |
Matt Sutcliffe |
|
Chief Executive Officer |
Executive Chairman |
|
Mobile: + 44 (0) 7770 865 341 |
Mobile: +44 (0) 7887 930 758 |
Alexander Mining plc
1st Floor
35 Piccadilly
London W1J 0DW
Tel: +44 (0) 20 7292 1300
Fax: +44 (0) 20 7292 1313
Email: [email protected]
Website: www.alexandermining.com
Nominated Adviser and Broker
John Prior/Alasdair Younie
Arbuthnot Securities Limited,
Arbuthnot House,
20 Ropemaker Street,London, EC2Y 9AR
Tel: +44 (0) 20 7012 2000 Public/Media Relations
Tim Blackstone
Britton Financial PR,62 Britton Street
London EC1M 5UY
Tel: +44 (0) 20 7251 2544
Mobile: +44 (0) 7957 140 416
Consolidated income statement
|
Six months ended 30 June 2009 |
Six months ended 30 June 2008 |
Year ended 31 December 2008 |
||
|
£'000 |
£'000 |
£'000 |
||
|
Continuing operations |
||||
|
Revenue |
95 |
- |
12 |
|
|
Cost of Sales |
(13) |
- |
- |
|
|
Gross Profit |
82 |
- |
12 |
|
|
Administrative expenses |
(558) |
(897) |
(1,618) |
|
|
Exploration and development expenses |
(134) |
(1,118) |
(10,575) |
|
|
Research and development expenses |
(167) |
(344) |
(597) |
|
|
Operating loss |
(777) |
(2,359) |
(12,778) |
|
|
Profit on disposal of fixed assets |
84 |
- |
22 |
|
|
Exchange gain on liquidation of subsidiaries |
- |
- |
20 |
|
|
Impairment of available for sale financial assets |
- |
- |
(68) |
|
|
Investment income |
20 |
198 |
749 |
|
|
Finance costs |
(79) |
- |
- |
|
|
Loss before taxation |
(752) |
(2,161) |
(12,055) |
|
|
Income tax expense |
- |
- |
- |
|
|
Loss for the period attributable to equity holders of the parent |
(752) |
(2,161) |
(12,055) |
|
|
Basic and diluted loss per share (pence) |
(0.56)p |
(1.61)p |
(8.96)p |
Consolidated statement of other comprehensive income
|
Six months ended 30 June 2009 |
Six months ended 30 June 2008 |
Year ended 31 December 2008 |
||
|
£'000 |
£'000 |
£'000 |
||
|
Loss for the period |
(752) |
(2,161) |
(12,055) |
|
|
Other comprehensive income |
||||
|
Exchange difference on translation of foreign operations |
(30) |
(18) |
1,746 |
|
|
Gain/(loss) on available for sale investments |
19 |
(24) |
(22) |
|
|
Total comprehensive income for the period attributable to equity holders of the parent |
(763) |
(2,203) |
(10,331) |
Consolidated balance sheet
|
As at 30 June 2009 |
As at 30 June 2008 |
As at 31 December 2008 |
||
|
£'000 |
£'000 |
£'000 |
||
|
Assets |
||||
|
Property, plant & equipment |
1 |
132 |
3 |
|
|
Intangible fixed assets |
- |
7,179 |
- |
|
|
Available for sale investments |
51 |
98 |
32 |
|
|
Total non-current assets |
52 |
7,409 |
35 |
|
|
Other receivables and prepayments |
156 |
172 |
144 |
|
|
Cash and cash equivalents |
4,175 |
5,809 |
4,986 |
|
|
Total current assets |
4,331 |
5,981 |
5,130 |
|
|
Total assets |
4,383 |
13,390 |
5,165 |
|
|
Equity |
||||
|
Issued share capital |
13,453 |
13,453 |
13,453 |
|
|
Share premium |
11,850 |
11,850 |
11,850 |
|
|
Merger reserve |
(2,487) |
(2,487) |
(2,487) |
|
|
Share option reserve |
695 |
918 |
703 |
|
|
Translation reserve |
1,359 |
(375) |
1,389 |
|
|
Fair value reserve |
19 |
(2) |
- |
|
|
Retained losses |
(20,753) |
(10,413) |
(20,048) |
|
|
Total equity |
4,136 |
12,944 |
4,860 |
|
|
Liabilities |
||||
|
Current liabilities |
||||
|
Trade and other payables |
194 |
405 |
211 |
|
|
Provisions |
6 |
- |
38 |
|
|
200 |
405 |
249 |
||
|
Non-current liabilities |
||||
|
Provisions |
47 |
41 |
56 |
|
|
Total liabilities |
247 |
446 |
305 |
|
|
Total equity and liabilities |
4,383 |
13,390 |
5,165 |
Consolidated statement of cash flows
|
Six months ended 30 June 2009 |
Six months ended 30 June 2008 |
Year ended 31 December 2008 |
||
|
£'000 |
£'000 |
£'000 |
||
|
Cash flows from operating activity |
||||
|
Operating loss |
(777) |
(2,359) |
(12,778) |
|
|
Depreciation and amortisation charge |
- |
9 |
15 |
|
|
Impairment of property, plant and equipment |
- |
- |
92 |
|
|
Increase in other receivables and prepayments |
(6) |
(21) |
(7) |
|
|
Decrease in trade and other payables |
(58) |
(298) |
(329) |
|
|
Share option charge |
39 |
31 |
75 |
|
|
Intangible fixed assets written-off or provided for |
- |
742 |
10,250 |
|
|
Net cash outflow from operating activities |
(802) |
(1,896) |
(2,682) |
|
|
Cash flows from investing activities |
||||
|
Interest received |
14 |
161 |
254 |
|
|
Interest paid |
- |
- |
- |
|
|
Acquisition of property, plant and equipment |
- |
(7) |
(7) |
|
|
Acquisition of intangible fixed assets |
- |
(911) |
(1,650) |
|
|
Proceeds from sale of property, plant and equipment |
86 |
- |
40 |
|
|
Net cash inflow/(outflow) from investing activities |
100 |
(757) |
(1,363) |
|
|
Net decrease in cash and cash equivalents |
(702) |
(2,653) |
(4,045) |
|
|
Cash and cash equivalents at beginning of period |
4,986 |
8,442 |
8,442 |
|
|
Exchange differences |
(109) |
20 |
589 |
|
|
Cash and cash equivalents at end of period |
4,175 |
5,809 |
4,986 |
Consolidated statement of changes in equity
|
Share capital |
Share premium |
Merger reserve |
Share option reserve |
Trans-lation reserve |
Fair value reserve |
Retained earnings |
Total equity |
||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||
|
At 1 January 2008 |
13,453 |
11,850 |
(2,487) |
1,005 |
(357) |
22 |
(8,370) |
15,116 |
|
|
Retained loss for period |
- |
- |
- |
- |
- |
- |
(2,161) |
(2,161) |
|
|
Exchange difference on translating foreign operations |
- |
- |
- |
- |
(18) |
- |
- |
(18) |
|
|
Valuation losses on available for sale investments |
- |
- |
- |
- |
- |
(24) |
- |
(24) |
|
|
Total comprehensive income for the period attributable to equity holders of the parent |
- |
- |
- |
- |
(18) |
(24) |
(2,161) |
(2,203) |
|
|
Share option costs |
- |
- |
- |
31 |
- |
- |
- |
31 |
|
|
Share options cancelled in period |
- |
- |
- |
(118) |
- |
- |
118 |
- |
|
|
At 30 June 2008 |
13,453 |
11,850 |
(2,487) |
918 |
(375) |
(2) |
(10,413) |
12,944 |
|
|
Retained loss for period |
- |
- |
- |
- |
- |
- |
(9,894) |
(9,894) |
|
|
Exchange difference on translating foreign operations |
- |
- |
- |
- |
1,784 |
- |
- |
1,784 |
|
|
Exchange differences recognised in income statement in period |
- |
- |
- |
- |
(20) |
- |
- |
(20) |
|
|
Impairment of available for sale investments recognised in income statement in period |
- |
- |
- |
- |
- |
2 |
- |
2 |
|
|
Total comprehensive income for the period attributable to equity holders of the parent |
- |
- |
- |
- |
1,764 |
2 |
(9,894) |
(8,128) |
|
|
Share option costs |
- |
- |
- |
44 |
- |
- |
- |
44 |
|
|
Share options cancelled in period |
- |
- |
- |
(259) |
- |
- |
259 |
- |
|
|
At 31 December 2008 |
13,453 |
11,850 |
(2,487) |
703 |
1,389 |
- |
(20,048) |
4,860 |
|
|
Retained loss for period |
- |
- |
- |
- |
- |
- |
(752) |
(752) |
|
|
Exchange difference on translating foreign operations |
- |
- |
- |
- |
(30) |
- |
- |
(30) |
|
|
Valuation gains on available for sale investments |
- |
- |
- |
- |
- |
19 |
- |
19 |
|
|
Total comprehensive income for the period attributable to equity holders of the parent |
- |
- |
- |
- |
(30) |
19 |
(752) |
(763) |
|
|
Share option costs |
- |
- |
- |
39 |
- |
- |
- |
39 |
|
|
Share options cancelled in period |
- |
- |
- |
(47) |
- |
- |
47 |
- |
|
|
At 30 June 2009 |
13,453 |
11,850 |
(2,487) |
695 |
1,359 |
19 |
(20,753) |
4,136 |
|
Notes to the interim financial information
1. Basis of preparation
The interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK. The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2008 except for IAS 1 - Presentation of financial statements (revised), the adoption of which is mandatory for 2009. This new standard relates to presentation only.
The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2009 and 30 June 2008 is unaudited. The comparative figures for the year ended 31 December 2008 were derived from the Group's audited financial statements for that period as filed with the Registrar of Companies. It does not constitute the financial statements for that period. Those accounts received an unqualified audit report which did not contain any statement under sections 237(2) or (3) of the Companies Act 1985.
2. Loss per share
The calculation of loss per share is based on a loss of £752,000 for the period ended 30 June 2009 (30 June 2008: £2,161,000; 31 December 2008: £12,055,000) and the weighted average number of shares in issue in the period to 30 June 2009 of 134,534,667 (30 June 2008 and 31 December 2008: 134,534,667). There is no difference between the diluted loss per share and the loss per share presented.
At 30 June 2009 there were 11,708,333 (30 June 2008: 13,858,333; 31 December 2008: 12,208,333) share options in issue that could have a potentially dilutive effect on the basic earnings per share in the future.
3. Post balance sheet events
On 15 July 2009 the Company cancelled 4,358,333 share options with exercise prices ranging from 17.25p to 30p per share and replaced these with the same number of new share options with an exercise price of 10p per share. At the same time an additional 1,816,667 share options with an exercise price of 10p per share were granted and on 14 August 2009 2,750,000 share options with an exercise price of 30p per share lapsed. Following these changes there are 10,775,000 share options in issue that could have a potentially dilutive effect on the basic earnings per share in the future.
On 27 August 2009 the Company issued 500,000 new ordinary shares of 10p each to settle a liability of £50,000. Following Admission of these shares to trading on AIM the enlarged issued share capital of the Company comprises 135,034,667 ordinary shares of 10p each.
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