18 April 2012 Starvest Plc Half-year report - six months ended 31 March 2012 Chairman's statement I am pleased to provide a portfolio valuation update as at 31 March 2012, the interim financial statements for the six months ended on 31 March 2012 and a commentary on the progress made during the period. Investment performance As I indicated in my annual report last October, 2010 was a year of two parts: from a high valuation point at the end of 2010, the portfolio saw a steady decline in the following nine months to 30 September 2011. This steady decline has continued to date. The decline has been across our portfolio. Our nine leading stocks have all fallen during the period, some to below cost. This is disappointing, although not entirely unexpected given the challenging conditions in world markets. We remain encouraged that each of the leading investee companies remain active and continue to develop their projects. We believe that these projects will translate into improved share prices and therefore into improved asset valuations but that it is currently advisable to take a long term view on these developments. In summary: * Company net asset value has fallen to £4.98m; * Starvest's mid share price has fallen to 10.0 pence; * Closing net asset value of 13.3 pence per share; * Mid share price on 31 March 2012 had a discount to net asset value of 25%; * There were no investment sales during the period. Basis of valuation Starvest uses closing bid prices or the Directors' lower valuation if deemed appropriate. In addition, a 10% discount is made against those investments where the Company holds either a large percentage of a given investee or where the investment constitutes 7% or more of the portfolio. These valuation discounts totalled £430,000 at 31 March 2012 (2011: £1.08m). Adjusting for this discount, the full value based on bid prices was 14.48 pence per share leading to a share price discount of 31%. Company statistics 31 March 31 December 2011 30 September 31 March 2011 2012 2011 Trading portfolio value £4.31m £4.75m £5.47m £10.03m Company asset value net £4.98m £5.42m £6.62m £10.10m of debt Net asset value - fully 13.33 pence 14.6 pence 17.57 pence 26.16 pence diluted per share Share price - mid 10.00 pence 12.00 pence 13.00 pence 11.75 pence Share price discount to 25% 17% 26% Premium 9% fully diluted net asset value Market capitalisation £3.71m £4.1m £4.77m £4.1m Portfolio comment During the period, Starvest added to its investment in Ariana Resources plc by exercising an option. Otherwise, there were no purchases during the period. Starvest's largest investments, comprising 86% of the declared valuation, in order of size were: * Oracle Coalfields plc * Ariana Resources plc * Regency Mines plc * Kefi Minerals plc * Centamin plc * Beowulf Mining plc * Red Rock Resources plc * Greatland Gold plc * Sunrise Resources plc Since the period end, the Company has supported a fundraising by Alba Mineral Resources plc and agreed to support two new exploration ventures both of which intend to seek admission to PLUS Markets. Other points of note during the half year The cautious basis of valuation has resulted in further impairments at the interim stage amounting to £237,000 net. Adding the overheads and taking credit for net interest results in a loss before taxation of £342,651 and a loss after taxation of £253,651 or 0.6 pence per share. Dividend payments A year ago, we announced the resumption of a dividend payment. In view of the more challenging conditions which currently prevail, the Board has decided to defer the announcement of a dividend for the current year until conditions improve but most likely until the year end. In early July, the Company expects to announce an update to the net asset value as at 30 June 2012. R Bruce Rowan Chairman & Chief Executive 18 April 2012 Profit & loss account 6 months to 31 6 months to 31 Year ended March 2012 March 30 September 2011 2011 Unaudited Unaudited Audited £ £ £ Operating income - 1,324,020 3,788,942 Direct costs - (234,241) (629,896) ------------------------------------------------------- Gross profit - 1,089,779 3,159,046 Administrative expenses (113,040) (88,791) (228,799) Amounts written off trade (301,523) (35,198) (399,799) investments 64,249 848,498 295,075 Amounts written back to trade investments ------------------------------------------------------- Operating profit/(loss) (350,314) 1,814,288 2,825,523 on ordinary activities Interest receivable 7,663 469 1,877 Interest payable - (1,837) (1,837) ------------------------------------------------------- Profit/(loss) on ordinary (342,651) 1,812,920 2,825,563 activities before taxation Tax on profit on ordinary 89,000 (490,000) (762,418) activities ------------------------------------------------------- Profit/(loss) on ordinary (253,651) 1,322,920 2,063,145 activities after taxation ------------------------------------------------------- Earnings/(loss) per share - see note 3 (0.6) pence 3.6 pence 5.6 pence Basic (0.6) pence 3.3 pence 5.1 pence Fully diluted ------------------------------------------------------- Balance sheet 6 months ended 6 months ended Year ended 31 March 2012 31 March 2011 30 September 2011 Unaudited Unaudited Audited £ £ £ Current assets Debtors 102,614 208,822 27,710 Trading investments 3,231,485 3,681,164 3,368,759 Cash at bank and in 1,488,275 407,539 1,893,536 hand ------------------------------------------------------ 4,822,374 4,297,525 5,290,005 Creditors - amounts falling due within one year (814,614) (522,960) (867,008) Other creditors ------------------------------------------------------ Net current assets 4,007,760 3,774,565 4,422,997 ------------------------------------------------------ Share capital and reserves 394,173 390,173 390,173 Called up share 2,118,396 2,100,396 2,100,396 capital 1,495,191 1,283,996 1,932,428 Share premium account Profit and loss account ------------------------------------------------------ Equity shareholders' 4,007,760 3,774,565 4,422,997 funds ------------------------------------------------------ Cash flow statement 6 months ended 6 months ended Year ended 31 March 2012 31 March 2011 30 September 2011 Unaudited Unaudited Audited £ £ £ Net cash (outflow)/inflow (251,338) 740,926 2,317,308 from operating activities Returns on investment and servicing of finance: Interest receivable 7,663 469 1,877 Interest payable - (1,837) (1,837) -------------------------------------------------- 7,663 (1,368) 40 -------------------------------------------------- Taxation recovered - 9,490 9,490 -------------------------------------------------- Dividend paid (183,586) - (91,793) -------------------------------------------------- Financing: Issue of new shares 22,000 - - -------------------------------------------------- 22,000 - - -------------------------------------------------- Increase/(decrease) in (405,261) 749,048 2,235,045 cash in the period Opening cash balance 1,893,536 - - brought forward - (341,509) (341,509) Net debt brought forward -------------------------------------------------- Closing cash balance 1,488,275 407,539 1,893,536 -------------------------------------------------- Movement on equity shareholders' funds 6 months ended 6 months ended Year ended 31 March 2012 31 March 2011 30 September 2011 Unaudited Unaudited Audited £ £ £ Total recognised (253,651) 1,322,920 2,063,145 (loss)/profits relating to the period 22,000 - 92,000 Shares issued (183,586) - (91,793) Dividends paid -------------------------------------------------- (Decrease)/increase in (415,237) 1,322,920 1,971,352 shareholders' funds 4,422,997 2,451,645 2,451,645 Opening shareholders' funds -------------------------------------------------- Closing shareholders' 4,007,760 3,774,565 4,422,997 funds -------------------------------------------------- Interim report notes 1. Interim report The information relating to the six month periods to 31 March 2012 and 31 March 2011 is unaudited. The information relating to the year ended 30 September 2011 is extracted from the audited accounts of the Company which have been filed at Companies House and on which the auditors issued an unqualified audit report. 2. Basis of accounting The report has been prepared using accounting policies that are consistent with those adopted by the Company in accordance with UK GAAP for the statutory accounts for the year ended 30 September 2011, although the information does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The Company will report again for the full year to 30 September 2012. The Company's investments at 31 March 2012 are valued at the lower of cost or the valuation adopted at 30 September 2011 or the current market value based on bid prices at the close of business. The Chairman's statement includes a valuation based on bid prices at 31 March 2012. 3. Earnings per share 6 months ended 31 6 months ended 31 Year ended March 2012 March 2011 30 September 2011 Unaudited Unaudited Audited £ £ £ These have been (253,651) 1,322,920 2,063,145 calculated on a profit/(loss) of: --------------------------------------------------------- The weighted average 36,818,358 36,717,259 36,717,259 number of shares used was: --------------------------------------------------------- Basic profit/(loss) (0.69) pence 3.6 pence 5.6 pence per share: --------------------------------------------------------- The weighted average 40,492,259 40,492,259 40,492,259 number of shares and outstanding options used was: --------------------------------------------------------- Fully diluted (0.63) pence 3.3 pence 5.1 pence profit/(loss) per share: --------------------------------------------------------- Investment portfolio Starvest now holds trade investments in the companies listed below; of these the following nine companies comprised 85% of the portfolio value as at 31 March 2012: * Oracle Coalfields plc Coal mining in Pakistan www.oraclecoalfields.com * Regency Mines plc Copper & nickel exploration in Australia and Papua New Guinea and investments in Red Rock Resources plc and Oracle Coalfields plc www.regency-mines.com * Kefi Minerals plc Gold and copper exploration in Turkey and Saudi Arabia www.kefi-minerals.com * Beowulf Mining plc Iron ore, gold, copper and uranium exploration in Sweden www.beowulfmining.com * Red Rock Resources plc Iron ore and manganese exploration in Australia, Greenland and Zambia; gold exploration in Kenya and Columbia with investments in other companies www.rrrplc.com * Ariana Resources plc Gold exploration in Turkey www.arianaresources.com * Centamin plc Gold exploration and mining in Egypt www.centamin.com * Greatland Gold plc Gold exploration in Western Australia and Tasmania www.greatlandgold.com * Sunrise Resources plc Mineral exploration in Finland, Australia and Ireland www.sunriseresourcesplc.com Other direct and indirect mineral exploration companies: * Equity Resources plc Investment holding company with interests in Regency Mines plc and Red Rock Resources plc * Alba Mineral Resources plc Nickel, uranium & gold in Scotland, Mauritania, Sweden and Ireland www.albamineralresources.com * Minera IRL Limited Gold exploration in South America www.minera-irl.com * Gippsland Limited Tantulum exploration in Egypt www.gippslandltd.com.au * International Mining & Investment holding company Infrastructure Corporation plc www.imicplc.com Other investee companies are listed in the Company's 2011 annual report available on request as below. Shareholders and others who wish to receive electronic copies of announcements are invited to register their email address on the home page of the Company website: www.starvest.co.uk. Copies of this interim report are available free of charge by application in writing to the Company Secretary at the Company's registered office, 55 Gower Street, London WC1E 6HQ, by email to email@starvest.co.uk or from the Company's website at www.starvest.co.uk. Enquiries to: * Bruce Rowan, telephone 020 7486 3997 * John Watkins, telephone 01483 771992, or to john@starvest.co.uk * Gerry Beaney, Colin Aaronson or David Hignell, Grant Thornton Corporate Finance, telephone 020 7383 5100 End This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Starvest plc via Thomson Reuters ONE [HUG#1603663]