RNS Number : 7113BStarvest PLC06 June 2023
6 June 2023
Half-year report - six months ended 31 March 2023
Chairman's statement
Over the six months to 31 March 2023, Starvest (the "Company") benefited somewhat from the resilience of the natural resources sector in an atmosphere of continued inflation and economic effects of conflict in eastern Europe. Commodity prices, including gold, remained relatively high, providing a solid foundation for our investee companies.
The Company's portfolio value and net asset value increased 5% and 3% respectively during the six months to 31 March 2023, since the Company's financial year-end. Our discount to net asset value was 31% on 31 March 2023, compared to a discount of 29% on 30 September 2022.
The natural resources sector is forecast to continue to make gains in the post-pandemic economic recovery period. We also expect the sector to benefit from large-scale infrastructure and climate-focused projects at the forefront of government spending plans and private sector investment.
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 intrinsic value of the Company's portfolio with shareholder interests.
During the last six months, Greatland Gold (LON:GGP), which makes up substantially the largest part of our portfolio value, advanced its Paterson projects. Havieron, a joint venture with Newcrest Mining, continued to increase the resource base at the project through surface drilling, and decline development has accelerated over the period; a definitive feasibility study is expected before the end of calendar 2023. During May 2023, Havieron joint venture partner Newcrest Mining accepted a US$19.1 billion buyout offer from the world's largest gold miner, Newmont. We believe this will bring a positive new dynamic to the Paterson project area over the coming months. Greatland is also concentrating on early-stage exploration targets within its other licences and has reported significant drill results in 100%-owned Rudall tenement, as well as strong mineralisation pathfinders at 100%-owned Scallywag, and a new joint venture agreement with Rio Tinto allowing Greatland to explore an additional 1,884sq km of prospective terrain in the Paterson region.
Ariana Resources (LON:AAU) continues to focus on exploration and development in south-eastern Europe, in particular with work on the Tavsan mine infrastructure in Türkiye. Its 75%-held subsidiary, West Tethyan Resources, signed an earn-in agreement on a gold project in Kosova. West Tethyan currently has a strategic agreement with Ariana and Newmont stemming from the five-year, US$2.5 million strategic alliance Ariana has with Newmont.
Following the release of a definitive feasibility study in late November 2022, Cora Gold (LON:CORA) completed a capital raise of approximately US$20m in ordinary shares and convertible loans in early March 2023. Funds will be used primarily to commence development of the Company's flagship Sanankoro Gold Project in southern Mali.
Kefi Minerals (LON:KEFI) continued with development of the Tulu Kapi gold mine in Ethiopia and remains on target to start full production during 2023, with full financing near completion. Kefi has also made significant advances on its Saudi Arabia projects and expects to complete a definitive feasibility study this year at the Jabil Qitman gold project; and a pre-feasibility study is near completion at its Hawiah copper-gold project.
Other investee companies continue their efforts as well. Oracle Power (LON:ORCP) has recently revised its strategy to focus more on green hydrogen energy in Pakistan, advancing plans for the project with strategic partners in relation to land, fuel cell development and offtake agreements. It also recently signed an MoU to continue its coal power station plans in Pakistan; as well as entering a farm-in agreement on its gold exploration assets in Western Australia.
Sunrise Resources (LON:SRES) continues to advance its pozzolan-perlite project in Nevada, USA towards mine permitting, while Alba (LON:ALBA) is developing its Welsh gold deposits and its spin-out company GreenRoc, in which it holds a 45% stake, advances its Greenland graphite and ilmenite projects.
Despite the prolonged increases in global interest rates to stem inflationary pressures, we continue to 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
6 June 2023
Statement of Comprehensive Income
6 months to 31 March 2023
6 months to 31 March 2022
Year ended
30 September 2022
Unaudited
£
Unaudited
£
Audited
£
Administrative expenses
(154,040)
(155,472)
(305,944)
(Loss)/gain on disposal of financial assets
-
(29,383)
(53,398)
Movement in fair value of financial assets through profit and loss
308,500
(2,195,966)
(7,234,928)
Investment income
-
29,628
53,428
Operating profit/(loss)
154,460
(2,351,193)
(7,540,842)
Profit/(loss) on ordinary activities before tax
154,460
(2,351,193)
(7,540,842)
Tax on (loss) on ordinary activities
-
587,798
1,671,086
Profit/(loss) attributable to equity holders of the parent
154,460
(1,763,395)
(5,869,756)
Earnings per share - see note 3
Basic
Diluted
0.26 pence
0.26 pence
(3.04 pence)
(3.04 pence)
(10.09 pence)
(10.09 pence)
Statement of Financial Position
6 months ended 31 March 2023
6 months ended 31 March 2022
Year ended
30 September 2022
Unaudited
£
Unaudited
£
Audited
£
Non-current assets
Financial assets at fair value through profit or loss
6,464,672
11,625,035
6,156,173
Total non-current assets
6,464,672
11,625,035
6,156,173
Current assets
Trade and other receivables
Cash and cash equivalents
36,768
284,016
53,615
157,715
77,424
406,106
Total current assets
320,784
211,330
483,530
Current liabilities
Trade and other payables
(33,069)
(70,636)
(41,776)
Total current liabilities
(33,069)
(70,636)
(41,776)
Non-current liabilities
Provision for deferred tax
-
(1,083,288)
-
Total non-current liabilities
-
(1,083,288)
-
Net assets
6,752,387
10,682,441
6,597,297
Capital and reserves
Called up share capital
Share premium account
Retained earnings
582,824
1,888,863
4,280,700
581,144
1,868,696
8,232,601
582,824
1,888,863
4,126,240
Total equity shareholders' funds
6,752,387
10,682,441
6,597,927
Statement of Cash Flows
6 months ended 31 March 2023
6 months ended 31 March 2022
Year ended
30 September 2022
Unaudited
£
Unaudited
£
Audited
£
Cash flows from operating activities
Operating profit/(loss)
154,460
(2,351,192)
(7,540,842)
Shares issued in settlement of salaries and fees
-
21,847
43,694
Movement in fair value of investments
(308,499)
2,195,966
7,234,928
(Loss)/profit on sale of current asset investments
-
29,383
53,398
Decrease/(increase) in debtors
40,656
9,923
(13,885)
Decrease in creditors
(8,707)
(14,991)
(43,851)
Net cash used in operating activities
(122,090)
(109,064)
(266,558)
Cash flows from investing activities
Sale of current asset investments
-
188,503
594,388
Net cash generated from investing activities
-
188,503
594,388
Net (decrease)/increase in cash and cash equivalents
(122,090)
79,439
327,830
Cash and cash equivalents at beginning of period
406,106
78,276
78,276
Cash and cash equivalents at end of period
284,016
157,716
406,106
Statement of Changes in Equity
Share capital
Share premium
Retained earnings
Total Equity attributable to shareholders
£
£
£
£
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 contribution 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
Loss for the period
-
-
(4,106,361)
(4,106,361)
Total recognised income and expenses for the period
-
-
(4,106,361)
(4,106,361)
Shares issued
1,680
20,167
-
72,839
Total contribution by and distributions to owners
1,680
20,167
-
72,839
At 30 September 2022
582,824
1,888,863
4,126,240
6,597,927
Profit for the period
-
-
154,460
154,460
Total recognised income and expenses for the period
-
-
154,460
154,460
Shares issued
-
-
-
-
Total contributions by and distributions to owners
-
-
-
-
At 31 March 2023
582,824
1,888,863
4,280,700
6,752,387
Interim report notes
1. Interim report
The information relating to the six-month periods to 31 March 2023 and 31 March 2022 is unaudited.
The information relating to the year ended 30 September 2022 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 2022.
The Company will report again for the full year to 30 September 2023.
The Company's investments at 31 March 2023 are stated at the current market value based on market quoted prices at the close of business on 31 March 2023. The Chairman's statement includes a valuation based on market quoted prices at the close of business on 31 March 2023.
3. Earnings per share
6 months ended 31 March 2023
6 months ended 31 March 2022
Year ended
30 September 2022
Unaudited
£
Unaudited
£
Audited
£
Profit/(loss) for the period/ year:
154,460
(1,763,395)
(5,869,756)
Weighted average number of Ordinary shares of £0.01 in issue
58,282,493
58,080,245
58,181,646
Earnings per share - basic and diluted
0.27 pence
(3.04 pence)
(10.09 pence)
Investment portfolio
Starvest now holds trade investments in the companies listed below; of these the following companies comprise 99% of the portfolio value as at 31 March 2023:
· Alba Mineral Resources plc
Exploration for gold in Wales, oil in England, lead-zinc in Ireland, and investment in GreenRoc 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
· Oracle Power plc
Coal and green hydrogen 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 2022 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
Mark Badros 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 Sam Lomanto 01483 413 500
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