RNS Number : 9817LStarvest PLC18 May 202218 May 2022
Half-year report - six months ended 31 March 2022
Chairman's statement
Over the six months to 31 March 2022, Starvest (the "Company") benefited somewhat from the resilience of the natural resources sector against a backdrop of emerging inflation and global unrest due to the conflict in eastern Europe. Nonetheless, weakness in Greatland Gold's share price resulted in a decline in portfolio value and net asset value of 17% and 16%, respectively, over the six months to 31 March 2022, since the Company's financial year-end.
Our discount to net asset value remained consistent over the six-month period to 31 March 2022, being 34% on 30 September 2021 and 33% on 31 March 2022, while commodity prices, including gold have in general, remained relatively high, providing a solid foundation for our investee companies.
While many sectors have not yet recovered to pre-pandemic levels, the natural resources sector has made significant gains and is forecast to continue to do so in an economic recovery. We also expect large-scale infrastructure and climate-focused projects, at the forefront of government spending plans, will benefit the natural resource sector.
As part of routine operations, the Board regularly reviews its portfolio positions and may make adjustments to its holdings to take advantage of market conditions. The Board is currently considering opportunities more likely to better align the Company's stock price with what it regards as the intrinsic value of the Company's portfolio.
Continuing to advance its Paterson projects, Greatland Gold (LON:GGP), which makes up over 90% of our portfolio value, estimated its Havieron project at 6.5 Moz gold equivalent in an updated JORC compliant report. Its joint venture partner Newcrest Mining is continuing with mine development and growth drilling at Havieron, while Greatland Gold concentrates on early-stage exploration targets within its other licences.
Ariana Resources (LON:AAU) continues to focus on exploration in south-eastern Europe with a five-year, US$2.5 million strategic alliance recently announced with Newmont Corporation through Ariana's 75%-owned West Tethyan Resources, along with gold and silver production from its mining operations in Turkey.
Cora Gold (LON:CORA) has completed field work on a definitive feasibility study for its flagship Sanankoro gold project, the full report is due for completion in H2 2022. Cora has also started a 7,500m drill programme to continue expansion of the resource at the Sanankoro project.
Kefi Minerals (LON:KEFI) continues with construction of the Tulu Kapi gold mine in Ethiopia and remains on target to start full production in 2022. Kefi has also made significant advances in its exploration and resource calculations of the Jabil Qitman and Hawiah project in Saudi Arabia.
Other investee companies continue their efforts as well. Oracle Power (LON:ORCP) has continued its exploration in Western Australia as well as expanding into the green energy sectors with a new hydrogen energy project in Pakistan.
Sunrise Resources (LON:SRES) is advancing its pozzolan-perlite project in Nevada, USA towards mine permitting, while Alba (LON:ALBA) is continuing the development of its Welsh gold deposits.
Despite the inevitable increase in global interest rates to stem inflationary pressures, we believe that the effects of expansionary monetary policies, continued fiscal stimulus and geopolitical tensions favour a positive outlook for gold and precious metals in the longer term.
Callum N Baxter
Chairman & Chief Executive
18 May 2022
Statement of Comprehensive Income
6 months to 31 March 2022
6 months to 31 March 2021
Year ended
30 September 2021
Unaudited
£
Unaudited
£
Audited
£
Administrative expenses
(155,472)
(147,689)
(290,993)
(Loss)/gain on disposal of financial assets
(29,383)
19,313
19,339
Movement in fair value of financial assets through profit and loss
(2,195,966)
(1,088,092)
(3,645,360)
Investment income
29,628
-
56,000
Operating profit
(2,351,193)
(1,216,468)
(3,861,014)
Interest receivable
-
-
-
Profit on ordinary activities before tax
(2,351,193)
(1,216,468)
(3,861,014)
Tax on (loss) ordinary activities
587,798
-
332,532
(Loss) attributable to equity holders of the parent
(1,763,395)
(1,216,468)
(3,528,482)
Earnings per share - see note 3
Basic
Diluted
(3.04 pence)
(3.04 pence)
(2.11 pence)
(2.11 pence)
(6.11 pence)
(6.11 pence)
Statement of Financial Position
6 months ended 31 March 2022
6 months ended 31 March 2021
Year ended
30 September 2021
Unaudited
£
Unaudited
£
Audited
£
Non-current assets
Financial assets at fair value through profit or loss
11,625,035
16,596,261
14,038,887
Total non-current assets
11,625,035
16,596,261
14,038,887
Current assets
Trade and other receivables
Cash and cash equivalents
53,615
157,715
29,893
125,344
63,539
78,276
Total current assets
211,330
155,237
141,815
Current liabilities
Trade and other payables
(70,636)
(84,716)
(85,627)
Total current liabilities
(70,636)
(84,716)
(85,627)
Non-current liabilities
Provision for deferred tax
(1,083,288)
(2,003,618)
(1,671,086)
Total non-current liabilities
(1,083,288)
(2,003,618)
(1,671,086)
Net assets
10,682,441
14,663,164
12,423,989
Capital and reserves
Called up share capital
Share premium account
Retained earnings
581,144
1,868,696
8,232,601
575,740
1,779,414
12,308,010
579,820
1,848,173
9,995,996
Total equity shareholders' funds
10,682,441
14,663,164
12,423,989
Statement of Cash Flows
6 months ended 31 March 2022
6 months ended 31 March 2021
Year ended
30 September 2021
Unaudited
£
Unaudited
£
Audited
£
Cash flows from operating activities
Operating loss
(2,351,192)
(1,216,468)
(3,861,014)
Shares issued in settlement of salaries and fees
21,847
-
72,839
Movement in fair value of investments
2,195,966
1,088,092
3,645,360
(Loss)/profit on sale of current asset investments
29,383
(19,313)
(19,339)
Decrease/(increase) in debtors
9,923
1,154
(32,493)
(Decrease) in creditors
(14,991)
(8,499)
(7,587)
Net cash used in operating activities
(109,064)
(155,034)
(202,234)
Cash flows from investing activities
Sale of current asset investments
188,503
160,013
160,145
Net cash generated from investing activities
188,503
160,013
160,145
Net increase in cash and cash equivalents
79,439
4,979
(42,089)
Cash and cash equivalents at beginning of period
78,276
120,365
120,365
Cash and cash equivalents at end of period
157,716
125,344
78,276
Statement of Changes in Equity
Share capital
Share premium
Retained earnings
Total Equity attributable to shareholders
£
£
£
£
At 30 September 2020
575,740
1,779,414
13,524,478
15,879,632
Loss for the period
-
-
(1,216,468)
(1,216,468)
Total recognised income and expenses for the period
-
-
(1,216,468)
(1,216,468)
Shares issued
-
-
-
-
Total contribution by and distributions to owners
-
-
-
-
At 31 March 2021
575,740
1,779,414
12,308,010
14,663,164
Loss for the period
-
-
(3,528,482)
(3,528,482)
Total recognised income and expenses for the period
-
-
(3,528,482)
(3,528,482)
Shares issued
4,080
68,759
-
72,839
Total contribution by and distributions to owners
4,080
68,759
-
72,839
At 30 September 2021
579,820
1,848,173
9,995,996
12,423,989
Loss for the period
-
-
(1,763,395)
(1,763,395)
Total recognised income and expenses for the period
-
-
(1,763,395)
(1,763,395)
Shares issued
1,324
20,523
-
21,847
Total contributions by and distributions to owners
1,324
20,523
-
21,847
At 31 March 2022
581,144
1,868,696
8,232,601
10,682,441
Interim report notes
1. Interim report
The information relating to the six-month periods to 31 March 2022 and 31 March 2021 is unaudited.
The information relating to the year ended 30 September 2021 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 preparation
This report has been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' ('FRS102'), and with the Companies Act 2006. Although the information included herein does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006, the accounting policies that have been applied are consistent with those adopted for the statutory accounts for the year ended 30 September 2021.
The Company will report again for the full year to 30 September 2022.
The Company's investments at 31 March 2022 are stated at the current market value based on market quoted prices at the close of business on 31 March 2022. The Chairman's statement includes a valuation based on market quoted prices at the close of business on 31 March 2022.
3. Earnings per share
6 months ended 31 March 2022
6 months ended 31 March 2021
Year ended
30 September 2021
Unaudited
£
Unaudited
£
Audited
£
Loss for the year:
(1,763,395)
(1,216,468)
(3,528,482)
Weighted average number of Ordinary shares of £0.01 in issue
58,080,245
57,573,986
57,755,713
Earnings per share - basic and diluted
(3.04 pence)
(2.11 pence)
(6.11 pence)
Investment portfolio
Starvest now holds trade investments in the companies listed below; of these the following companies comprised 99% of the portfolio value as at 31 March 2022:
· Alba Mineral Resources plc
Exploration for oil in England, lead-zinc in Ireland, uranium in Mauritania and graphite in Greenland
www.albamineralresources.com
· Ariana Resources plc
Gold-silver production and exploration in Turkey, and precious metal exploration in Eastern Europe
www.arianaresources.com
· Cora Gold Limited
Gold exploration in West Africa
www.coragold.com
· Greatland Gold plc
Gold exploration and development in Australia
www.greatlandgold.com
· Kefi Minerals plc
Gold and copper exploration and development in Ethiopia and Saudi Arabia
www.kefi-minerals.com
· iOracle Power plc
Coal development in Pakistan and gold exploration in Australia
www.oraclepower.co.uk
Other direct and indirect mineral exploration companies:
· Block Energy plc (formerly Goldcrest Resources plc)
Oil and gas exploration in Bulgaria
www.blockenergy.co.uk
· Sunrise Resources plc
Exploration for industrial minerals in United States, Finland, Australia and Ireland
www.sunriseresourcesplc.com
Other investee companies are listed in the Company's 2021 annual report available on request or from the Company web site - 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, Salisbury House, London Wall, London EC2M 5PS, by email to info@starvest.co.uk or from the Company's website - www.starvest.co.uk
Enquiries to:
Starvest PLC
Callum Baxter or Gemma Cryan 02077 696 876 or info@starvest.co.uk
Grant Thornton UK LLP (Nomad)
Colin Aaronson, Harrison Clarke or Ciara Donnelly 02073 835 100
SI Capital Ltd (Broker)
Nick Emerson or Alan Gunn 01483 413 500
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