TIDMPGR TIDMTTM
RNS Number : 5538I
Premier Gold Resources PLC
02 June 2014
Embargoed: 0700hrs, 2 June 2014
Premier Gold Resources plc
("Premier Gold" or the "Company")
Financial results for the year ended 31 December 2013
Premier Gold (AIM: PGR), the Central Asia-focused gold
exploration and development company, announces financial results
for the year ended 31 December 2013.
2013 Summary
-- Five year licence extension to Cholokkaindy Licence through to 31 December 2017
-- Licence area extended by 8 square kilometres adding to potential future resource
-- Convertible loan note for GBP1 million provided by new institutional investor
-- Subscription of GBP260,000 by institutional investor by way of equity swap agreement
-- Subscription for GBP200,000 worth of new ordinary shares by investor
-- Field work currently suspended as a result of resistance from local groups
-- Board working towards a resolution in country
Chairman's Statement
2013 was a frustrating year for Premier Gold as we were
prevented from engaging in any activity in the field. The Company
had substantially laid all the groundwork to commence drilling
operations during the 2013 field season only to be thwarted by
resistance from factions of local groups seeking to hold up the
work programme at Cholokkaindy illegally. Even more frustrating
than having a highly attractive asset but being unable to progress
its development, is the absence of any logical reason for being
prevented from doing so. At this stage the board considers the
local resistance which continues to prevent Premier Gold and
certain other operators from working safely in the Kyrgyz Republic
at present is as a result of a fundamental lack of understanding as
to the impact that the development of mining operation would have
upon local communities.
Notwithstanding Premier Gold's legal right, and support from the
government, to progress its work programme on Cholokkaindy, such
obstruction has caused us to delay the commencement of our work
programme several times. The Company's first priority must be the
safety of its employees and contractors and the board is doing
everything it can to work through the issues being encountered in
the Kyrgyz Republic in order to get the teams back out in the field
to progress the development of the asset.
The board's attention is focused on working with representatives
at all three of the relevant levels within Kyrgyz Government:
i. at leadership level through the office of the First Deputy
Prime Minister;
ii. at a regional level through the governor of Chui Valley (the
region in which the Company's licence is situated); and
iii. through the head of the local administration of Panfilov
(the immediate surrounding area of the Company's licence).
Progress, however, has been inhibited by changes in Government
at all three levels. In March 2014 the Ata-Meken party announced
its withdrawal from the Kyrgyz Government coalition, thereby
effectively dissolving the Government; while the positions of both
governor of Chui Valley and head of the local administration of
Panfilov were also unfilled for several weeks during the early part
of 2014.
I am pleased to observe that political progress in the Kyrgyz
Republic has since been made at all three levels pertinent to the
Company's situation, with a viable new Government having recently
been formed; and the appointments in February 2014 of a new
governor of Chui Valley and a new head of the local administration
(the "Akim") of Panfilov. The political transitions were, however,
highly disruptive to Premier Gold's efforts to resolve its local
issues.
What is apparent is the extent of the local influence held by
the disruptive factions within their community; and indeed the
unwillingness of the PanfilovAkim to simply ignore their
objections. Equally it is apparent that the governor's office is
cautious as to the extent to which it exerts political influence
over local communities.
We continue to press our case so that Premier Gold can implement
an exploration programme that will be of benefit to all
stakeholders. To achieve this objective the Company is working with
a broad range of professionals in the Kyrgyz Republic and in the
United Kingdom.
Licence Developments
In February 2013, Premier Gold was successful in achieving a
licence extension on Cholokkaindy through to 31 December 2017; and
in May 2013 the Company also announced the award of an 8 square
kilometre extension of the Cholokkaindy licence boundary, into an
area in which we believe the mineralised zone further extends. This
has obvious beneficial impacts on the size of the future potential
resource at Cholokkaindy.
During the year, London- and Bishkek-based staff continued to
work on the geological information and databases. In addition,
visits were made to the accredited laboratories where facilities
for drill core sampling and storage were reserved. Procedural
protocols for quality control of drilling, logging, sampling,
analysis, health and safety were also updated. The exploration team
is ready to implement the drill programme within two weeks of
returning to operations in the field.
Corporate Developments
In July 2013 Premier Gold entered into a convertible loan
agreement (the "Convertible Loan") with Tridevi Capital Partners
(I) L.P. ("Tridevi Capital") for the provision of GBP1 million to
advance the Company's exploration programme at the Cholokkaindy
gold licence in the Kyrgyz Republic.
In September 2013 the Company raised gross funds of GBP200,000
by way of a subscription for a total of 100,000,000 new ordinary
shares at a price of 0.2 pence per ordinary share.
In December 2013 the Company raised gross funds of GBP260,000 by
way of an equity swap agreement with an existing institutional
shareholder for a total of 200,000,000 new ordinary shares at a
price of 0.13 pence per share.
The board stated its intention in December 2012 to simplify the
share structure of the Company by cancelling all warrants. In
January 2013 approximately 84 per cent. of the warrants in issue
were purchased by the Company for a nominal consideration and duly
cancelled. In October 2013 the remaining warrants expired and were
duly cancelled.
Financial Results
Premier Gold is an early-stage exploration company and, as such,
has no revenues. The Company's expenditure relates predominantly to
the exploration-related costs and general and administrative
overhead. The Company recorded a loss before tax for the period of
GBP1,531,593 (2012: GBP1,528,360). The Company had cash and cash
equivalents at 31 December 2013 of GBP274,539 (2012:
GBP181,857).
Outlook
The Kyrgyz Government continues to indicate its commitment to
helping Premier Gold through to a resolution of its local issues,
such that the Company can resume operations. The new Government's
preferred approach is one of engagement and public dialogue with
local communities who, it seems, simply do not understand the
implication or future impact of a development such as Cholokkaindy.
The Company continues to express to the Government its
dissatisfaction with the pace at which it is progressing a
resolution. In parallel with the Government's efforts, Premier Gold
is proactively working with local communities to overcome the
educational barrier.
At the same time, the Company continues to consider assets
beyond Cholokkaindy where the Company believes it can deploy its
considerable geological expertise to create value for shareholders
in a shorter time frame than the Company may be able to achieve at
Cholokkaindy. The Company will report on any such developments as
and when appropriate.
I am acutely aware that the disruption caused at Cholokkaindy is
immensely frustrating for shareholders. We must however remind
ourselves of the prospective anomalies and structures already
recognised at Cholokkaindy which bear the hallmarks of a
substantial gold deposit which would, if developed, be a highly
valuable asset.
Colonel Robert Stewart DSO MP
Chairman
30 May 2014
Contacts:
Premier Gold Resources plc
Richard Nolan, CEO 020 7078 9566
WH Ireland Limited (Nominated Adviser and
Broker)
Katy Mitchell 0113 394 6600
Vigo Communications
Ben Simons / Alex Aleksandrov 020 7016 9570
For further information please visit:
www.premiergoldresources.com
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
GBP GBP
Administrative expenses (873,310) (1,232,234)
Share based payments (24,666) (69,655)
---------------- ----------------
Operating loss (897,976) (1,301,889)
Loss on disposal of subsidiary (150,724) -
Finance income 190 1,802
Fair value loss on derivative
financial assets (473,833) (193,750)
Finance expense (9,250) (34,523)
---------------- ----------------
Loss before income taxation (1,531,593) (1,528,360)
Income tax expense - -
---------------- ----------------
Loss on ordinary activities
after taxation (1,531,593) (1,528,360)
Non-controlling interests 52,771 54,618
---------------- ----------------
Loss for the year and
total comprehensive income
attributable to owners
of the parent (1,478,822) (1,473,742)
Loss per share - basic
and diluted
From continuing operations (0.14)p (0.22)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
2013 2012
GBP GBP
ASSETS
Non current assets
Intangible assets 3,752,241 3,780,831
Tangible assets 14,628 23,789
Derivative financial
assets 126,875 436,719
------------------ ------------------
3,893,744 4,241,339
Current assets
Inventories - 68
Trade and other receivables 16,445 117,699
Derivative financial
assets 236,250 369,531
Cash and cash equivalents 274,539 181,857
------------------ ------------------
527,234 669,155
LIABILITIES
Current liabilities
Trade and other payables (240,207) (218,145)
Borrowings (410,717) -
------------------ ------------------
Net current assets (123,690) 451,010
------------------ ------------------
Net assets 3,770,054 4,692,349
EQUITY
Share capital 2,288,898 1,951,415
Share premium account 6,059,750 5,932,983
Equity component - convertible loan
note 89,283 -
Capital redemption reserve 43,333 43,333
Merger reserve 2,416,667 2,416,667
Profit and loss account (7,722,515) (6,268,359)
Foreign currency reserve (3,874) 26,230
------------------ ------------------
3,171,542 4,102,269
Non-controlling interests 598,512 590,080
------------------ ------------------
Total equity 3,770,054 4,692,349
Approved by the Board and authorised for issue on .........................
.............................. ..............................
Richard Nolan Dr Reza Tabrizi
Director Director
Company Registration No. 03896382
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
-
Foreign Capital
Share Share Retained currency redemption Merger Non controlling Convertible
capital premium earnings reserve reserve reserve interests loan note Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2012 1,471,207 4,821,530 (4,864,272) - 43,333 - - - 1,471,798
Changes in equity for 2011 -
Total comprehensive
income
for the year - - (1,473,742) - - - (54,618) - (1,528,360)
On acquisition of
subsidiaries - - - - - - 642,950 - 642,950
Issue of shares 480,208 1,260,625 - - - - - - 1,740,833
Costs in respect of
shares issued - (149,172) - - - - - - (149,172)
On issue of shares for
acquisition of Central
Asia Resources Limited - - - - - 2,416,667 - - 2,416,667
Equity-settled
share-based
payments - - 69,655 - - - - - 69,655
Currency translation
differences
on foreign currency
net
investments - - - 26,230 - - 1,748 - 27,978
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Balance at 31 December
2012 1,951,415 5,932,983 (6,268,359) 26,230 43,333 2,416,667 590,080 - 4,692,349
Changes in equity in 2012
Total comprehensive
income
for the year - - (1,478,822) - - - (52,771) - (1,531,593)
On disposal of
subsidiaries - - - - - - 54,210 - 54,210
Issue of shares 337,483 147,517 - - - - - - 485,000
Costs in respect of
shares issued - (20,750) - - - - - - (20,750)
Convertible loan note
- equity component - - - - - - - 89,283 89,283
Equity-settled
share-based
payments - - 24,666 - - - - - 24,666
Currency translation
differences
on foreign currency
net
investments - - - (30,104) - - 6,993 - (23,111)
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Balance at 31 December
2013 2,288,898 6,059,750 (7,722,515) (3,874) 43,333 2,416,667 598,512 89,283 3,770,054
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
GBP GBP GBP GBP
Cash flows from operating activities
Operating loss (897,976) (1,301,889)
Depreciation of property, plant and
equipment 4,649 8,334
Amortisation of intangible assets 77 -
Decrease in inventories - 4,700
(Decrease)/increase in trade and other
receivables 53,244 659,899
Increase/(decrease) in trade and other
payables 35,291 (551,141)
Equity-settled share based payments 24,666 69,655
Other movement 10,723 39,093
------------------ ------------------
Net cash used in operating activities (770,366) (1,071,349)
Investing activities
Finance income 190 1,802
Finance expense (1,233) (34,523)
------------------ ------------------
Net cash used in investing
activities (1,043) (32,721)
Capital expenditure
Payments to acquire intangible
assets (51,479) (154,613)
Payments to acquire tangible
assets - (5,805)
------------------ ------------------
Net cash outflow for
capital expenditure (51,479) (160,418)
Acquisitions and disposals
Purchase of subsidiary
undertakings - (3,170)
Cash acquired on acquisition -
of subsidiary undertakings - 21,760
Cash on disposal of
subsidiary
undertaking (9,955) -
------------------ ------------------
Net cash (outflow)/inflow
for acquisitions and
disposals (9,955) 18,590
Financing activities
Issue of share capital 225,000 557,500
Proceeds received from
issue of derivative
financial
asset 221,275 -
Cost of share issue (20,750) (49,172)
Convertible unsecured loan
notes 500,000 -
------------------ ------------------
Net cash generated from
financing activities 925,525 508,328
------------------ ------------------
Net increase/(decrease)
in cash and cash equivalents
in year 92,682 (737,570)
Cash and cash equivalents
at beginning of the year 181,857 919,427
------------------ ------------------
Cash and cash equivalents at end of
the year 274,539 181,857
Annual Report and Accounts
Copies of the Annual Report and Accounts, together with a notice
of the annual general meeting, are being posted to all shareholders
today and will be available on the Company's website
www.premiergoldresources.com
Annual General Meeting
The annual general meeting of the Company will be held at the
offices of Nabarro LLP, Lacon House, 84 Theobald's Road, London
WC1X 8RW at 11 a.m. on 24 June 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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