Friday 30 October 2009
Starvest plc
Results for the year ended 30 September 2009
Chairman's statement
I am pleased to present my eighth annual statement to Shareholders
for the year ended 30 September 2009.
Results for the year
I am pleased to report that your Company's results for the past year
show that conditions in our chosen investment field have stabilised
after the shocks of the latter half of 2008. The values have
recovered sufficiently hence this year we have reinstated £295,884
net to the book value of our investments as required by the Companies
Act. After deducting administration costs, this results in a profit
before tax of £44,692.
A further positive result was the receipt earlier in 2009 of a refund
of taxation amounting to £1.1m thus enabling your company to repay a
£1m loan in full.
Trading portfolio valuation
In view of the economic challenges expected, last year we took the
opportunity to critically examine the valuations we place on all our
trading investments which were stated at the lower of cost or bid
price or lower where we believed those facts of which we are aware
cast doubt on the market prices or where the Company's interest was
of such a size as to inhibit selling into a depressed market. This
approach resulted in a trading portfolio valuation of £3.94m and a
loss of £3.73m before taxation for the year ended 30 September 2008.
Given the events of the past twelve months it is abundantly clear
that our cautious approach was warranted. Although some valuations
have improved, conditions for small mineral exploration companies
continue to be very tough; some require additional funds to continue
exploration or to advance their projects and although some have been
successful in this regard, it is by no means universal as many
excellent and potentially profitable projects languish for lack of
cash. Accordingly, we have continued with the same cautious policy
adopted last year, namely to value investments at bid value or, where
we are aware of specific factors, at a lower Directors' valuation.
As a result, the closing portfolio value was £4.72m, a 21% increase
in the year.
Review of the current market
A year ago, we took a long hard look at the values attributed to our
investment portfolio as a result of which we wrote down the book
values of many, but not all, of our investments by a total of £3.5m.
We believed this to be appropriate; subsequent events have
demonstrated this to be so.
As is shown in the table on the following page, the portfolio
valuation has recovered during the year by 21%, a welcome increase.
Within the portfolio we have some investments which we expect to be
real winners so anticipate further improvement during the coming
year. The state of the world economy and markets for natural
resources will continue to overshadow us, but we believe the
prospects in the medium to long term to be encouraging. Over the
next year or so, we will continue to contain our overheads to the
minimum, seek to use our limited cash resources to best advantage and
otherwise be patient as we await a full recovery.
It is encouraging to note that since the 30 September 2009 year end,
the Company has raised over £300,000 through the sale of investments
yielding a gross profit in excess of £150,000.
Trading activity
In furtherance of the stated trading objectives, during the year
Starvest has made modest additions to its investments in Alba Mineral
Resources plc, Greatland Gold plc, Red Rock Resources plc and Regency
Mines plc by subscriptions to new issue placings.
Company statistics
30 September 30 September Change
2009 2008 %
at BID at BID
values as values as
adjusted adjusted
* Trading portfolio value £4.72m £3.94m +20%
* Company asset value net of debt £4.02m £3.43m +17%
* Net asset value - fully diluted 10.72p 9.06p +18%
per share
* Closing share price 11.75p 12.25p -4%
* Share price premium to net asset 9% 35%
value
* Market capitalisation £4.10m £4.28m - 4%
The net asset values at 30 September 2008 and 2009 are based on bid
prices or the Directors' valuation, if lower. These values include
unrealised gains on elements of the trading portfolio that are not
reflected in the financial statements.
Dividends
Owing to the depletion of cash resources it is not our intention to
pay a dividend this year. For the future, your Board will keep the
matter under review.
Investment policy
As required by AIM, your Company has established an investment policy
reproduced on page 3 of the report and financial statements and made
available on its website, www.starvest.co.uk.
Shareholder information
The Company's shares are traded on AIM and PLUS.
Announcements made to the London Stock Exchange are sent to those who
register at the Company website, www.starvest.co.uk where historic
reports and announcements are also available.
Annual general meeting
We plan to hold our annual general meeting at 3.00 pm on Monday 14
December 2009 when we look forward to meeting those Shareholders able
to attend.
R Bruce Rowan
Chairman & Chief Executive
29 October 2009
Investing policy statement
About us
The Chairman, Bruce Rowan, has managed the Company since January
2002.
Bruce has a wealth of experience over many years of investing
primarily in small company new issues and pre-IPO opportunities in
the natural resources and mineral exploration sectors.
Company objective
The Company is established as a source of early stage finance to
fledgling businesses, to maximise the capital value of the Company
and to generate benefits for Shareholders in the form of capital
growth and modest dividends.
Investing strategy
Whilst the Company has no exclusive commitment to the natural
resources sector, the Board sees this as having considerable growth
potential for the foreseeable future. Investments are generally made
immediately prior to an IPO on the AIM or PLUS markets, at IPO and in
the aftermarket. Investments are for varying amounts but usually in
the range £100,000 - £300,000, although sometimes larger with the
addition of later market purchases or fundings.
The business is inherently high risk and of a cyclical nature
dependent upon fluctuations in world economic activity which impacts
on the demand for minerals.
The investee companies, being small, almost invariably lack share
market liquidity, even if they are quoted on AIM or PLUS. Therefore,
it is rarely possible to sell an investment at anything approaching
the quoted market price with the result that extreme patience is
required whilst the investee company develops. If and when an
explorer finds a large exploitable resource, it may become the object
of a third party bid, or otherwise become a much larger entity;
either way an opportunity to realise cash is expected to follow.
Of the thirty or so investments held at any one time, it is expected
that no more than five will prove to be 'winners'; the remainder will
either become total losses or may generate modest returns. Overall,
the expectation is that Shareholder returns will be acceptable if not
substantial.
Accordingly, the Board is unable to give any estimate of the quantum
of returns. That stated when profits have been realised and adequate
cash is available, it is the intention of the Board to recommend the
payment of a modest dividend.
A limited number of investments have been made outside the natural
resources sector. In each case, this arose by virtue of the personal
contacts of Bruce Rowan and the opportunity to support early stage
businesses being established by people competent in their field of
expertise.
The Company currently has investments in the following companies
which themselves are investment companies: Addworth plc, India Star
Energy plc, Equity Resources plc and Guild Acquisitions plc.
The Company takes no part in the active management of investee
companies, although directors of the Company are also non-executive
directors on the boards of seven such companies, with one director
being the executive chairman of an eighth.
Review of trading portfolio
As at 30 September 2009, the portfolio comprised interests in the
following companies:
Mineral exploration ventures
Agricola Resources plc - PLUS ticker: AGRI
Website: www.agricolaresources.com
Agricola Resources was previously focused on mineral exploration and
development in the Baltic Region with required levels of funding
which rapidly became unobtainable for essentially longer-term
projects in the prevailing capital markets. Agricola therefore
decided to sell off its Swedish licences, repay its outstanding loan,
and redirect its activities towards purely gold exploration by
applying for prospective licences being offered in Morocco. These
are currently being negotiated and Agricola sees its new
concentration on becoming a gold producer as more likely to generate
earlier returns to shareholders. Australian Energy Ventures Limited
continues to hold a 29.9% strategic equity stake.
Alba Mineral Resources plc - AIM ticker: ALBA
Website: www.albamineralresources.com
Alba Mineral Resources is a mineral explorer focusing on nickel,
uranium and gold prospects in Scotland, Mauritania, Sweden, and
Ireland. Additional fund-raising in July 2009 has been primarily
expended on ground exploration work in Mauritania where Alba has
established a jointly-owned company and acquired seven uranium
exploration licences covering 13,500 sq. km of prospective ground,
while still negotiating for five further permits in Southern
Mauritania for iron oxide-copper-gold style mineralisation. Several
companies have approached Alba towards establishing joint venture
operations in Mauritania and discussions are in progress.
Ariana Resources plc - AIM ticker: AAU
Website: www.arianaresources.co.uk
Ariana Resources is exploring for, acquiring and developing economic
gold deposits in Turkey, concentrating on the Tethyan metallogenic
belt, which is believed to host a multi-million ounce world-class
deposit. Its 100%-owned flagship project is the Western Turkey
Sindirgi encompassing three main prospects: Kiziltepe with a current
JORC resource of 186,000 oz gold equivalent; Kepez, and Karakavak,
over all of which Ariana holds two ten year renewable operating
licences. Also in Western Turkey, Ariana owns 100% at Ivrindi and
Demirci which have undergone initial drilling and of the Tavsan gold
project with an initial JORC resource of 215,000 oz of gold
equivalent and the longer term Muratdag project.
Ariana is a 49% joint venture partner with European Goldfields on
designated properties in North East Turkey with the latter fully
funding an exploration programme with significant projects to be
advanced to bankable feasibility, while also taking a near 20% equity
interest in Ariana. The joint venture company is targeting deposits
containing in excess of 1 million oz. of gold. Turkey is a
politically stable country with an established mining industry and
2.5% of the world's industrial mineral resources.
Belmore Resources (Holdings) plc - PLUS ticker: BEL
Website: www.belmoreresources.com
Belmore Resources is a minerals exploration company focusing solely
on projects in the Republic of Ireland, priority being given to its
zinc exploration properties in County Clare, where it has a current
100% interest in eleven prospecting licences covering 393 sq km.
Exploration activities have been accelerated following a joint
venture agreement with Lundin Mining in February 2009 whereby Lundin
has a right to earn a 70% interest in the County Clare licences if
some £14.7 million is expended over the coming years, of which
£700,000 had been spent as at end June: a very active drilling
programme is currently being carried out, while further tests will
also be run on targets identified on Belmore's other licences.
Beowulf Mining plc - AIM ticker: BEM
Website: www.beowulfmining.com
Beowulf's focus is on the exploration and development of mineral
deposits in Northern Sweden, where it has five separate projects
covering iron, gold, copper and uranium. With its shares now quoted
on both AIM and Stockholm's AktieTorget market, Beowulf's most
advanced project is its 100%-owned Ruoutevare iron titanium deposit,
with a JORC compliant inferred resource of 140 million tonnes,
grading 39.1% iron, 5.7% titanium dioxide, and 0.2% vanadium oxide.
Production is targeted at 10 million tonnes of ore, for which Beowulf
has obtained a letter of intent from the Chinese resource importer
Hua Dong Corporation for shipment of eventual production.
Beowulf also owns the nearby Kallak magnetite project which has total
target iron mineralisation of more than 120 million tonnes across two
deposits at grades varying between 35-42% iron, as well as
copper-gold-uranium interests at Ballek and Jokkmokk, and gold at
Grundtrask. It has newly acquired the various Swedish licences
previously held by Agricola Resources which included the Geddaur
uranium-gold-silver licences adjacent to Ballek as well as regaining
full control of the Ballek joint venture rights. Beowulf is now
negotiating more favourable terms with its new partner, Australian
Energy Ventures Limited.
Brazilian Diamonds plc - Toronto TSX ticker: BZD
Website: www.braziliandiamonds.com
Brazilian Diamonds is a leading Brazil-based exploration company
focusing on the discovery of kimberlites in its 190,000 hectare
properties in the States of Minas Gerais and Bahia, with the goal of
becoming a significant producer of diamonds. The Company has been
suffering from a net working capital deficiency that has forced it to
consider the sale or disposal of certain assets, relinquishment of
exploration licences, and the suspension and termination of its
exploration activities, while actively pursuing joint venture
partnering opportunities. This has led to the disposal of its
laboratory facilities so as to raise cash to advance its Canasta 1
kimberlite project, planned to become one of the first kimberlites in
Brazil to be mined economically. However the issue of a mining
licence for this project is delayed by a long-standing National Park
boundary issue with the Brazilian Congress. Meanwhile all the
Company's projects have been placed on a care and maintenance basis
so as to conserve its cash reserves; a one for ten share
consolidation was recently undertaken along with the cancellation of
its AIM listing as a further cash conservation measure.
CAP Energy Limited - PLUS ticker: CAPP - suspended
Website: www.capenergy.co.uk
CAP Energy seeks to invest in smaller oil and gas exploration and
production companies operating in North America. Initial investments
were in producing properties in Oklahoma and Texas requiring remedial
work to restore profitability, but this strategy was later abandoned
for cash conservation reasons. In late 2008 the Company acquired
from CSV Holdings interests in the Starks Dome Oilfield and the
Iberia Dome Prospect in Southern Louisiana, which offered potential
for many years' drilling and re-completion activity, albeit
necessitating further funding in the short term, and when this was
recently undertaken with a convertible loan note issue, the minimum
sought was not attained. The shares had already been suspended in
May pending clarification of the Company's financial position.
Carpathian Resources Ltd - AIM ticker: CPNR, and Sydney
ASX
Website: www.carpathian.com.au
Carpathian Resources is an Australian oil and gas explorer and
producer focusing on projects in Central Europe, especially the Czech
Republic and Slovakia, but which has recently undergone considerable
management change and announced a broadening of its investment
policies to take in start-up and second stage financing
opportunities.
This diversification has been applied to projects covering retail
fuel outlets, convenience stores, satellite and cable television, and
outdoor mobile advertising, and involved investments approaching $2
million, which on an annualised basis is already generating sales
revenues approaching the level being earned from its main producing
asset, the Janovice gas field in Northern Moravia. The OMV discovery
of an estimated 140 billion cubic feet gas field in the Vienna Basin,
only some 75 km from the Company's Morava permit (90% interest), has
clear exploration implications for Carpathian Resources for
developing a comprehensive exploration plan and budget and thereby
revitalising the Company's oil and gas sector activities.
Concorde Oil & Gas plc - PLUS quotation suspended
Concorde's focus is concentrated on exploring and developing oil and
gas properties and projects in the Komi Republic of Russia. Its
acquisition of Pechora Energy, ongoing exploration and production for
the Luzhkoye oilfield and the new Chikshinskoe exploration licence
was largely funded through substantial equity and loan injections by
both Altima Partners and Kuwait Energy giving them equity interests
of 47% and 37% respectively. Eight wells are now producing 750
barrels a day with over 1000 barrels a day targeted for the end of
this year, while plans envisage these rates being significantly
increased next year; capital expenditure this year and next of some
$20 million is expected to be met out of current cashflows.
Concorde's share listing was suspended in May 2006 and remains so to
this day; the original shareholders have suffered substantial
dilution over the years, but should eventually have an investment in
a much larger company if and when a market quote is restored
Franconia Minerals Corporation - Toronto TSX-V: FRA
Website: www.franconiaminerals.com
Franconia Minerals, an Alberta-formed corporation, is focused on the
development of the Birch Lake copper-nickel-platinum-palladium
project in the highly prospective Duluth complex in north-east
Minnesota, positioned to be one of the world's largest copper,
nickel, PGM resources. The project consists of three deposits (Birch
Lake, Maturi, and Spruce Road), with latest estimates giving an
indicated resource of 131 million tonnes plus an inferred 37 million
tonnes for Birch Lake, Maturi 120 million tonnes inferred and Spruce
Road 376 million tonnes indicated open pit resource or 124 million
tonnes inferred underground resources.
Fundy Minerals Limited - PLUS ticker: FUND
Website: www.fundyminerals.com
Fundy Minerals is actively involved in the exploration of gold,
diamonds and base metals in Canada and West Africa, along with the
development of a number of diversified mineral properties and a
high-grade limestone deposit in New Brunswick. In West Africa, Fundy
holds a minerals exploration licence over 1000 sq. km. of land in
Liberia, having received a licence permit for its Sehnkweh Cestos
claim. The Company's initial interest in Liberia was in gold
discoveries along the Cestos shear and Todi shear belts where
exploration work is continuing. However following its alluvial
diamond discovery in the southern area of its permit, and considering
the significant quantities of gem quality alluvial diamonds that have
been previously extracted by artisan miners, Fundy's main efforts
have been concentrated on locating the related kimberlitic source of
its discovery. Diamond discoveries have been made other than in
alluvial watercourses and wetland depressions, so an extensive
geophysical survey has been undertaken, successfully yielding 12 new
targets of interest for Kimberlitic intrusions and new gold targets.
Gippsland Limited - Sydney ASX ticker: GIP
Website: www.gippslandltd.com.au
Gippsland is an Australian-based international resource company that
focuses on projects that have been overlooked by major producers,
having undergone detailed exploration and offer the potential of
early production. Its Egyptian ventures are held 50:50 with the
Egyptian government but with its Board having a casting vote.
Its prime assets are tantalum-tin projects in the Central Eastern
desert of Egypt adjacent to the Red Sea, and notably include the 40
million tonne Abu Dabbab and the 98 million tonne Nuweibi projects.
The Abu Dabbab project, with an annual mill-feed rate of 2 million
tonnes for a production level in excess of 650,000 lbs of tantalum
pentoxide, a likely 20 year mine-life, and a resource base in excess
of 140 million tonnes, will rank Gippsland as the world's largest
producer of tantalum. Negotiations on the forecast project financing
need of US$173 million based on 80% debt and 20% equity have taken
longer than planned to complete. A 10 year off-take has been agreed
with the German HC Starck group for the future annual supply of
600,000 lbs. Gippsland has undertaken exploration drilling within
the Wadi Allaqi region where it has obtained highly encouraging gold
results, and a copper-nickel deposit. Gippsland also has a 40%
free-carried interest in the Tasmanian Queen Hill tin deposit, with
an indicated and inferred resource of 7.3 million tonnes, and its
wholly-owned subsidiary Nubian Resources has been granted three
prospecting licences covering 300 sq. km in North Eritrea, in an area
that has had minimal previous exploration but has the potential to
host high-grade gold and base metal deposits.
In March 2009 Gippsland withdrew from AIM following the resignation
of its Nomad and its joint brokers, and to be solely listed on the
Sydney ASX, thereby enabling clear cost savings.
Goliath Resources Inc - Pink Sheets OTC ticker -
GHRI
Website: www.goliathresources.com
Goliath Resources is a Vancouver-based mineral exploration company
with interests in copper, gold and molybdenum in Western Canada and
Zambia. Its main focus is centred on the Phelps Dodge-owned Mazenod
Lake, a largely unexplored property in the North-West Territories,
where under a joint venture agreement Goliath will ultimately earn a
75% interest. Previous drilling and geophysics identified project
areas of mineralisation prospective for large-scale copper, gold and
possibly uranium. Its second project is the Flume Licence in the
Yukon, again owned by Phelps Dodge, in which Goliath has the right to
earn a 100% interest under earn-in expenditure commitments and where
drilling commenced in August; large areas of this project are as yet
unexplored, but earlier geochemical studies indicated a high
potential for gold mineralisation. A third project is the Java
property in British Columbia, a copper-molybdenum porphyry prospect
formerly owned by Kennecott. In Zambia Goliath leads a consortium
which has been issued a 25 year mining licence covering tailing dumps
of 150 million tons in the Zambian Copper Belt; their treatment is
seen to have substantial near-term cash-flow potential.
Greatland Gold plc - AIM ticker: GGP
Website: www.greatlandgold.com
Greatland Gold has three gold projects in Tasmania, consisting of the
Firetower project in the north with an initial inferred
JORC-compliant resource of 90,000 oz. of gold, where surface sampling
has yielded encouraging results and test drilling is currently in
progress: the Warrentinna, Forester and Waterhouse field complex,
first mined early last century and which has yielded a substantial
amount of high grade gold at surface but where a current drilling
programme has been delayed due to heavy rainfall: and lastly the East
Lisle project where the Company will seek to determine the bedrock
source of the 250,000 oz of gold reputedly produced in the past from
alluvial workings in the area. In addition the Company has two gold
projects in Western Australia, the 200 sq km Lackman Rock site, and
its latest acquisition, the Ernest Giles project comprising two
unexplored contiguous tenements covering a 686 sq km area in a remote
desert region. The main focus of the Company until now has been on
Firetower, and deciding whether to mine an existing resource of
50,000 oz or whether to establish first a larger resource and then to
build its own mine. Greatland's aim to become a stand-alone producer
remains on course but will require the raising of significant extra
capital to bring Firetower into production.
Hidefield Gold plc - AIM ticker: HIF
Website: www.hidefieldgold.com
Hidefield has been focusing on the acquisition and development of
highly prospective gold projects in Argentina, Brazil, and Alaska
(held directly), and on projects in Canada, Nevada and Arizona held
in independent self-funded associate companies.
Because Hidefield has been unable to secure further finance for its
widely spread exploration work, it has reviewed its strategy to the
extent of seeking to sell off certain properties or projects and to
consolidate its exploration activities in Argentina, where it is
actively exploring the advanced stage Don Nicolas gold project in
Santa Cruz Province and working in joint venture with Minera Sud S.A.
in three Patagonia provinces. The Don Nicolas project has a JORC
compliant indicated resource of 200,700 ozs of gold with inferred
158,400 ozs using a high grade cut of 90 gpt gold. In Brazil, a sale
of the advanced stage Cata Preta gold project in Minas Gerais State
is being negotiated, while in Alaska Hidefield's 60/40% Golden Zone
project venture with Mines Trust Inc. has received notice from Fire
River Gold Corp. of its intention to acquire a full 100% of the
project for completion by end May 2013. The Golden Zone property has
a measured and indicated resource of 253,000 oz of gold, 1.2 million
oz of silver, and 6.1 million pounds of copper.
On 20 October 2009, a recommended all share offer was announced for
Hidefield by Minera IRL Limited.
Kefi Minerals plc - AIM ticker: KEFI
Website: www.kefi-minerals.com
Kefi Minerals, a spin-off from 29% holder EMED plc, is an early stage
gold and copper exploration company operating a joint venture in
Turkey with TSX-listed Centerra Gold and in Saudi Arabia where it is
operator of the 60:40 joint venture (GEMCO) with local conglomerate
ANTAR and enjoys a first-mover advantage into the field of Saudi
exploration, seeking to identify and develop local million ounce plus
gold deposits.
Kefi's two most advanced exploration projects are Artvin in the north
east and Derinin Tepe in the west of
Turkey, but it has already identified several other attractive
prospects to evaluate in other regions of the country. The Artvin
Project comprises fifteen contiguous exploration licences covering
253 sq. km. A gold discovery at its Yanikli Prospect has already
been announced. Kefi should be producing by 2013 and its strategy
already includes building a shareholder base in Turkey and actively
participating in the Government tender process so as to acquire
further quality tenure.
Lisungwe plc -PLUS ticker: LIS
Website: www.lisungwe.com
Lisungwe explores for minerals over various tenements in Malawi where
it has established a JORC compliant nickel resource, nickel
extraction techniques through leaching and an initial scoping study
for a mine. As a consequence and given the necessity of acquiring a
local source of sulphuric acid, during 2008 Lisungwe identified and
eventually acquired a source of pyrite used to manufacture acid.
However, before a JORC compliant resource could be established the
Company's cash resources became exhausted; it has struggled for most
of the past year to raise new funds, so far without success. In the
meantime, a draft study has demonstrated that the proposed project
would be profitable given the shortage of acid in south eastern
Africa.
Lotus Resources plc - PLUS ticker: LOTP
Website: www.lotus-resources.com
Lotus Resources is a UK holding company seeking to identify and
acquire mining and exploration assets in or close to production in
Mongolia, with particular focus on building an integrated fluorspar
business from the exploration stage through to mining, processing and
ultimate trading. Lotus sees Mongolia as offering exciting
possibilities for building profitable business in a sector ready for
consolidation with many small operators who are lacking access to
finance. The country is found to have a democratic,
business-friendly environment with foreign investment in its mining
sector suitably encouraged by the Government: the country's geology
is exciting with over 6,000 known showings/deposits covering 80
different minerals, and as a result of good quality exploration work
by the Russians in the past, extensive data is available and
accessible from the Geofund central library. Fluorspar is used as
flux in steel-making with Russia and Ukraine seen as likely main
markets, and as acid in the chemicals industry with eventual
world-wide clientele potential. The Company has commenced joint
venture open mining operations on a 170,000 tonnes resource, has a
second exploration licence covering a 290,000 tonnes resource
awaiting mining licence approval, and has a further exploration
licence area covering 1066 hectares; it has a 51% interest in each
related joint venture. Meanwhile Lotus is continuing to evaluate
other opportunities in Mongolia and in China.
Oracle Coalfields plc - PLUS ticker: ORCP
Website: www.oraclecoalfields.com
Oracle Coalfields is an emerging coal developer in Pakistan with an
80% interest in a JORC compliant measured resource of 1.4 billion
tonnes (371 million tonnes proven reserves) located in Block V1 of
the Thar Desert project in the Sindh province, 380 km east of Karachi
and further distant from the insecurity of the north western frontier
region. It benefits from past and ongoing major infrastructure
investment by the Pakistan Government, eager to open up the Thar
Desert region with its estimated lignite coal resource of 175 billion
tonnes. Work on a bankable feasibility study is already underway for
completion early next year and the mine development project will be
linked to the construction of a mine-mouth 300MWe power plant.
Initial mine production is planned for late 2010, and while the mine
design will allow for an annual production of 2.5 million tonnes,
this will only be achieved by 2014, by when the completed power plant
will be in operation. Oracle is in preliminary discussions with
potential power plant developers and operators. The power plant's
annual intake from the mine will be 1.75 million tonnes, any supply
balance being readily sold to local industry unless and until further
capacity is added to the power plant. Pakistan suffers from critical
shortages of electricity supply resulting in a proliferation of
disruptive power cuts and stunting the growth of the vibrant
economy. With such a major indigenous yet unexploited coal resource
to hand, the Pakistan Government sees Oracle as a key contributor to
the future development of the country's economy. Oracle is currently
assessing the benefits of a near-term admission to the AIM market.
Red Rock Resources plc - AIM ticker: RRR
Website: www.rrrplc.com
Red Rock, in which Regency Mines holds a 30% interest, operates as a
mineral exploration and development company, focusing on manganese,
iron ore and gold properties in Australia, Kenya and Zambia. In
addition, it has a 27% interest in Resource Star Ltd, expected to be
re-admitted to ASX soon, to which it sold its uranium portfolio in
exchange for shares and effective management control
The hugely significant event of the last year has been the joint
venture with Pallinghurst which has taken control of ASX quoted
Jupiter Mines Limited to which Red Rock has disposed of its iron ore
property interests consisting of the highly prospective Mt Alfred in
Western Australia. In turn, POSCO of South Korea has taken a stake
in Jupiter where Red Rock is the largest shareholder with 25% having
a current market value of A$18m.
More recently Red Rock has again shown its deal making expertise with
the acquisition of interests in the greenstone belt of south west
Kenya where it is expecting to develop a gold extraction project.
Regency Mines plc - AIM ticker: RGM
Website: www.regency-mines.com
For Regency Mines, apart from its 30% interest in Red Rock Resources,
the significant development during the past year has been the results
of its exploration at the Mambare Plateau in Papua New Guinea where
all the indications are that a world class nickel resource has been
identified. More recently, the company has announced a possible
joint venture deal with Direct Nickel Limited for the use of their
patented extraction technology. Otherwise Regency is focused on
exploring areas of copper and nickel potential at Bundarra in
Queensland, Yilgarn in Western Australia and, for gold at Mount Stone
in Queensland. As with its sister company, Red Rock, Regency has
demonstrated skill in the development of these assets by joint
venture, acquisition or disposal as well as a sound investment
portfolio in small mining companies, evidencing its well executed
strategy of converting licence interests into equity stakes.
Sheba Exploration (UK) plc - PLUS ticker: SHE
Website: www.shebagold.com
Sheba is a mineral exploration company operating and fully owns in
Northern Ethiopia five exclusive mineral licences covering 203 sq
km: at Mereto Sheba is exploring a 3km long gold soil anomaly in
detail; at Shehagne the Company has discovered and traced a 2.3km
long gold soil anomaly and has started detailed exploration; at Una
Deriam search is underway for an extension to the Mereto gold
anomaly; Finarwa and Winibo are both being explored for gold and base
metals. Joint venturing of mature properties, to raise capital for
resource estimation and new property acquisitions, and the initiation
of feasibility studies of small-scale opportunities for mining gold,
remain the strategic objectives for its operations. Sheba has newly
signed a joint venture letter of intent with Stratex International,
granting the latter an option to earn a 60% share in Shehagne for
£350,000 of exploration expenditures, and an option for the former to
earn a 50% share in a further joint exploration project with Stratex
in Northern Ethiopia. Stratex will take a 5.6% equity interest in
Sheba for a £40,000 cash injection.
Sunrise Diamonds plc - AIM ticker: SDS
Website: www.sunrisediamonds.com
Sunrise Diamonds is focused on the identification, acquisition,
exploration, and development of diamond projects in Finland. Its
exploration activities are focused on two geographically distinct
areas in the Karelian Craton, which extends over the border into
Russia where it notably yields a number of world-class diamondiferous
kimberlites: the first Sunrise area is at Kuusamo in north central
Finland where it controls 100% of its claims in a recently discovered
kimberlite cluster, the second is at at Kaavi-Kuopio which Sunrise
has newly acquired by earn-in under a joint venture agreement with
Canadian Nordic Diamonds Ltd. Sunrise has no debt, but is not as yet
in profit; its exploration field activities have been put on hold.
It continues to enjoy exclusive access to the valuable BHP Billiton
data base from its former Finnish diamond exploration activities.
Woburn Energy plc (formerly Black Rock Oil & Gas plc) - AIM ticker:
WBN
Website: www.woburnenergy.com
The new Woburn Energy remains focused on being active in oil and gas
exploration and seeking new acquisition opportunities. It inherited a
chequered past from Black Rock with cash-hungry projects in Colombia
and the UK, while facing a critical funding shortage. The take-over
of the original venture partner/operator Kappa Energy Colombia by
Canadian Pacific Rubiates led to improved relations for its Colombian
interests, and to the arrival of a Canadian private company, Prospero
Hydrocarbures, and a US$5 million purchase of 49% of its Colombian
interests. Its funding difficulties led to an abortive attempt to
sell its interest in North Sea block 49/8c. However by early 2009 a
rescue funding was made by Cetus Investment which injected £2 million
for an effective 86% stake in the Company with a commitment to
further funding in the range of £5-10 million. This recapitalisation
signified a 97% dilution for the original Black Rock shareholders,
and resulted in the decisions to cease further exploration work and
to relinquish remaining licences in Colombia, while assuming that the
development of the UK Monterey gas field would be unlikely, all of
which leaves Woburn in need of new acquisition prospects.
Investment companies with mineral exploration interests
Equity Resources plc (formerly Franchise Investment Strategies) -
PLUS ticker: EQRP
Following the total loss on its two investments in DTT and Myhome
International, Equity Resources has abandoned its investment
activities in franchise businesses in favour of the natural resource
sector. It was fortunate to have available cash to invest at the
bottom of the market in Red Rock Resources plc and Regency Mines plc,
see above. The company's recently announced 2009 results show that
this change of strategy was well timed.
India Star Energy plc - AIM ticker: INDY
Website: www.indiastarenergy.co.uk
India Star Energy is focused on investing in companies involved in
mining or alternative sources of fuel, with three current
investments. Firstly, New Fuels International Ltd (100% option) is a
Seychelles-based specialised development company involved in the
creation of renewable bio-fuels and bio-energy products, seeking to
replicate the Brazilian bio-fuel model in carefully selected African
countries. Secondly, Trillium North Minerals (11.5%) is a Toronto
TVX quoted company (formerly known as Canadian Dragon Company)
holding interests in resource properties as yet only in Ontario.
Lastly, East West Resource Corporation (1.9%) is a Toronto TVX quoted
company, exploring for copper, zinc, nickel, and precious metals in
northwest Ontario, with three flagship assets plus an active
portfolio of early stage projects.
Companies with other interests
Guild Acquisitions plc - PLUS ticker: GACQ
Guild Acquisitions is a fledgling investment trading company
established to grow early-stage small to medium-sized companies by
injecting seed capital, management support, and access to further
funds from capital markets for their development. A shortage of
available funds and the ongoing financial uncertainties of the
current market have however restricted opportunities for seed capital
investments over recent months. Its investments include a 7.33%
interest in Equity Resources plc, see above.
The Core Business plc, in administration - AIM ticker: CORE
Website: www.thecorebusiness.co.uk
The Core Business focuses primarily on the distribution of branded
cosmetics to major retailers. As a personal care and beauty
management group, it also provides consultancy services to companies
and individuals in the development of existing brands and the
creating of new ones. It has attracted considerable retailer
interest through dynamic presentation of its brands which range from
colour cosmetics, beauty and hair accessories, sun and skincare
products, to fragrances, distributing selected products through the
likes of Superdrug and Tesco. Funding concerns arose in the summer
as a result of retailer de-stocking, declining consumer demand and
the weakness of sterling impacting on gross margins: the shares are
currently suspended pending clarification of past accounting
discrepancies. An administrator was appointed on 12 October 2009.
St Helen's Capital plc - AIM ticker: SHCP
Website: www.sthelenscapital.com
St Helen's Capital has received shareholder approval to sell its
operating business to Whim Gully plc, comprising all its
institutional stockbroking, corporate finance, and PLUS advisory work
activities. In the past year the general global economic downturn led
to St Helen's Capital being unable to complete any fundraisings for
its clients which reflects on the lack of confidence pervading in the
junior markets. St Helen's Capital has therefore now become an
Investing Company for the purposes of the AIM rules and its name will
be shortly changed accordingly.
In addition to the above, Starvest has interests in the following
unquoted companies, neither of which are deemed to have significant
value at this present time:
* Addworth plc - general investment holding company
* Treslow Limited - a copper-nickel prospect near Armstrong in
North West Ontario, Canada.
Profit and loss account
for the year ended 30 September 2009
Year ended 30 Year ended 30
September 2009 September 2008
£ £
Operating income - 16,700
Direct costs - (15,430)
Gross profit - 1,270
Administrative expenses (189,398) (271,640)
Amounts written back to/(written 295,884 (3,461,919)
off) trade investments
Operating profit/(loss) 106,486 (3,732,289)
Interest receivable 29,933 105,054
Interest payable (91,727) (98,430)
Profit/(loss) on ordinary 44,692 (3,725,665)
activities before taxation
Tax on profit/(loss) on ordinary (8,600) 1,118,201
activities
Profit/(loss) on ordinary 36,092 (2,607,464)
activities after taxation
Earnings/(loss) per share - basic 0.1 pence (7.5) pence
Earnings/(loss) per share - fully 0.1 pence (7.5) pence
diluted
There are no recognised gains and losses in either year other than
the result for the year.
All operations are continuing.
Balance sheet
As at 30 September 2009
30 September 2009 30 September 2008
£ £
Current assets
Debtors 34,720 1,126,908
Trade investments 3,215,671 2,855,237
Cash at bank - -
3,250,391 3,982,145
Creditors - amounts falling (851,769) (1,619,615)
due within one year
Net current assets 2,398,622 2,362,530
Share capital and reserves
Called-up share capital 372,173 372,173
Share premium account 2,026,396 2,026,396
Profit and loss account 53 (36,039)
Equity shareholders' funds 2,398,622 2,362,530
Cash flow statement
for the year ended 30 September 2009
Year ended Year ended
30 September 2009 30 September
£ 2008
£
Net cash outflow from operating (244,420) (1,815,809)
activities
Returns on investment and
servicing of finance:
Interest receivable 29,933 105,054
Interest payable (91,727) (98,430)
(61,794) 6,624
Taxation recovered/(paid) 1,118,401 (1,509,413)
Equity dividends paid - (174,587)
Financing:
Company shares repurchased - (73,480)
Loan advanced 100,000 -
Short term loan repaid (1,000,000) -
(900,000) (73,480)
Decrease in cash in the year (87,813) (3,566,665)
The financial information set out above does not constitute statutory
accounts as defined in the Companies Act 2006.
The balance sheet at 30 September 2009, the profit and loss account,
and the cash flow statement for the year then ended have been
extracted from the Company's statutory financial statements upon
which the auditor's opinion is unqualified and does not include any
statement under Section 498 of the Companies Act 2006.
Copies of the report and financial statements will be posted to
Shareholders no later than 14 November and will be available for a
period of one month thereafter from the Company Secretary at the
registered office.
123 Goldsworth Road, Woking, Surrey, GU21 6LR
email: email@starvest.co.uk
Alternatively, the report may be downloaded from the Company's
website, 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 or Colin Aaronson, Grant Thornton Corporate Finance,
telephone 020 7383 5100
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