Last checked at 15 Aug 2011 07:00
15 August 2011
Orogen Gold Plc
("Orogen" or "the Company")
Interim Results
Orogen Gold Plc (AIM:ORE) the AIM listed mineral exploration company, focussed on gold exploration and development in Europe and near Asia, announces its Interim results for the six months ended 30 June 2011.
Corporate Highlights:
● Re-launch of the Company on 4th March 2011, re-admission to trading on AIM and the
commencement of exploration activity with our first project in Serbia - Deli Jovan
Operational Highlights at the Deli Jovan gold project
● Operational progress at Deli Jovan on target
● Shaft clearance work at the old Rusman mine now close to the first level at 24m
depthexposing a much larger mine shaft than anticipated. Access to first former mine
level at 30m is expected shortly
● Work on re-opening the Ginduša shaft has started and we anticipate to reach the first
mine level at 30m depth within 2 months
● Recent completion of a surface trenching programme confirmed the presence of gold
mineralisation in country rock adjacent to the main vein system indicating potential for
mineralisation beyond the main lode
● Recent completion of soil sampling exploration along 5km of the Deli Jovan gold belt
to detect possible 'blind' gold-bearing lodes, with laboratory results available in late
August / early September
Financial Summary:
● At end of period, £1,448,000 cash to support Phase 1 work programme (£1,546,000 at
31 December 2010)
● At end of period, Net Loss of £554,000 (£435,000 for 9 months ended 31 December
2010)
Ed Slowey, Chief Executive of Orogen Gold comments:
"We are delighted by the progress that we have made at Deli Jovan over the last few months and we are excited about the prospect of finally entering the old workings at Rusman. We are enthusiastic about the prospects for the Deli Jovan gold project and are looking forward to the results of our exploration programme over the coming months. We also continue to look for new gold projects in Europe geologically similar to Deli Jovan that meet our investment criteria and create value through leveraging our extensive management expertise."
Mr Ed SloweyPGeo, EurGeol., a Qualified Person as defined by Canadian National Instrument 43-101 and Managing Director of Orogen Gold Limited, is responsible for the preparation of the technical information in this release.
Enquiries:
Orogen Gold Plc
Ed Slowey, CEO
Alan Mooney, FD
+353 1662 8395
Zeus Capital Limited
Nominated Adviser and Joint Broker
Ross Andrews/Tom Rowley
+44 (0)161 831 1512
XCAP Securities Plc
Joint Broker
John Grant/Karen Kelly
+44 (0) 207 101 7070
Hansard
Financial PR
Nicholas Nelson/Guy McDougall
+44 (0) 207 245 1100
Orogen Gold plc (formerly Medavinci plc) | |||
Chairman's and Chief Executive's report | |||
We are pleased to present our first Interim Report since the re-launch of the Company on 4th March 2011, as Orogen Gold plc, re-admission to trading on AIM and the commencement of exploration activity with our first project in Serbia - the Deli Jovan gold project.
As part of our re-launch, Alan Mooney was appointed Finance Director in March replacing Paul Foulger, who stepped down from the Board and now continues as Company Secretary. In terms of our non-executive directors, Adam Reynolds stepped down as Chairman in March but remains on the board as a non executive director, Glyn Hirsh and Michael Hough stepped down from the board in March as envisaged when the acquisition of Orogen Gold Limited was completed and Michael Nolan who was appointed to the board in September 2010 continues as non executive director.
We have built a solid, constructive and positive relationship with the former Board of the Company and this is continuing. We now have a strong team in place, experienced in the mineral resource exploration business. The handover of responsibilities to the new management has been fully achieved and worked through in a positive manner that is supportive to the development of the new business.
Earn-in with Reservoir Capital
Orogen Gold has an option to earn into 55% of the Deli Jovan gold project in Serbia from Canadian Listed (TSXV) Reservoir Capital Corporation by financing CAD (Canadian Dollars)1.5 million exploration expenditures on the project. The Company can, by financing an additional CAD2 million exploration expenditure on the project, earn a further 20%, to bring the Group's total interest in Deli Jovan to 75%.
Work Programme
We have made good progress on Deli Jovan so far this year. Deli Jovan comprises a number of narrow, gold bearing quartz veins along an 8-10km shear zone containing bonanza grade zones which were mined intermittently prior to World War II. In order to gain access to the historic mines for mapping and sampling purposes a landowner access agreement was signed over the site of the Rusman mine and land was purchased over the Ginduša mine area. A contract was drawn up with an experienced Serbian underground mining contractor for the reopening of two of the old mine shafts. Shaft clearance work at Rusman is now down close to the first level at 30m depth. Water sampling and permitting are in progress prior to commencement of pumping to clear water from the first level. At the Ginduša mine, initial site preparation has commenced and the re-opening operation will continue over the coming weeks.
In addition to the re-opening work, a detailed soil geochemical sampling programme was completed over a strike length of about 5km along the main Deli Jovan shear zone between the Rusman and Ginduša mining centres. The programme is designed to identify additional hidden gold targets along the trend. The samples have been dispatched for analysis to the ALS Chemex analytical laboratory in Romania. Results will be reported in early September. Three surface trenches were also excavated over the Rusman vein structure to obtain information on the nature of the mineralisation at Deli Jovan. Mapping and sampling of the trenches was completed. Analytical results from chip/channel sampling show that the sheared and oxidised gabbro wall rock to the main vein contains low-order gold mineralisation which might be of economic interest at Rusman and Ginduša.
Anticipated Developments
The objective of the Orogen exploration programme is to demonstrate an initial 100,000 oz inferred gold resource at Deli Jovan which is envisaged to be sufficient to underpin two to three years of mine production. Once this is demonstrated our target will be to identify the potential for total gold resources in excess of 500,000 ozs. While there are several unknowns in re-entering the historic Deli Jovan mines and exploring the 10km mineralised belt, the schedule currently envisaged is:
Phase 1a (Staged programme to approximately March 2012)
- completion of the re-opening of access to the Rusman and Ginduša mines
- underground structural mapping and dense systematic sampling to characterize 3-D
grade distribution and identify high grade shoots
- follow-up of new targets generated by the regional programme
- periodic news releases as new data become available, including underground
sampling results - first results expected about November 2011
Phase 1b (to approximately December 2012):
- 300m of new underground drive development and detailed channel sampling to
confirm lateral continuity mineralisation
- 7,500m diamond drilling from surface to confirm further lateral and depth continuity
on mineralised structures - planned for Spring 2012
- 55% project earn-in achieved
Phase 2 (to approximately December 2013):
- 12,500m diamond drilling from surface to confirm further lateral and depth continuity
on mineralised structures and delineate maiden inferred resource
- 75% project earn-in achieved
- Decision on proceeding to scoping study for 30,000 to 50,000 oz/year gold mine
Within the main project phases outlined above there will be a number of project milestones and an ongoing series of results to report to shareholders.
Growth of the Business
As well as our Deli Jovan project we are seeking opportunities to introduce a new project or projects to the Company. We have negotiated options and conducted preliminary site visits in June to two Central Asian gold projects but neither passed our rigorous technical and financial due diligence. With the current high gold price, junior gold explorers are attracting greater investor focus which we expect will lead to a favourable realignment between gold equities and the surging price of bullion. We are seeking undervalued early-stage gold projects which have previously lacked management focus and an appropriate exploration programme and which have the technical merit to give us a high probability of a successful commercial discovery.
With any new venture we are conscious of the need to quickly advance Deli Jovan and deliver value to the Company shareholders. With frequent news flow expected from this project over the coming months, we intend to continue to seek out strong new gold projects, which can add value to the Company.
It is our aim to build Orogen Gold into a substantial gold exploration and production business over the next three to four years.
Corporate
We would like to thank our shareholders and advisors for their support and encouragement which was essential in completing the transformation of the business. We are also most grateful to the former directors and those continuing with the Company for their hard work and commitment and support in transforming the old Medavinci plc into the new and exciting gold exploration company, that Orogen Gold plc has become.
In 2010 the reporting year end was changed to 31 December (previously 31 March). Since the Company is now involved in a totally new business it is not really meaningful to compare the financial data for the first six months of the year 2011 with those of 2010. Therefore in the financial statements presented in this interim report for comparative / information purposes we have included the audited results for the 9 months period ended 31 December 2010 and balance sheet information at 31 December 2010.
The loss for the six months to 30 June 2011 amounted to £ 554,000. At 30 June 2011 the Group held cash resources of £ 1.448 million. We have already expended £ 200,000 (CAD 315,000) on the Deli Jovan project and a further expenditure commitment of £ 740,000 (CAD1,185,000) will be necessary by June 2012 to complete the Phase 1 earn-in to 55% of the project. On this basis we have sufficient cash resources to fund the Phase 1 earn-in to Deli Jovan, however any expansion in the business will require additional resources.
John Barry Ed Slowey
Chairman Chief Executive
15th August 2011
Orogen Gold plc (formerly Medavinci Plc)
Group statement of comprehensive income
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for the six months ended 30 June 2011 | ||||
Notes | Unaudited 6 months to 30 June 2011 | Audited 9 months to 31 December 2010 | ||
£'000 | £'000 | |||
- Recurring administrative expenses | (213) | (128) | ||
- Share based payments | (215) | (5) | ||
- AIM re-admission costs | (129) | - | ||
- Investment acquisition costs | - | (202) | ||
- Impairment of investments in subsidiaries & associates | - | (100) | ||
Administrative expenses | (557) | (435) | ||
Group operating loss | 3 | (557) | (435) | |
Interest received | 3 | - | ||
Loss on ordinary activities before taxation | (554) | (435) | ||
Tax on loss on ordinary activities | 4 | - | - | |
Total comprehensive income for the period | (554) | (435) | ||
Pence | Pence | |||
Loss per share - basic and diluted | 5 | (0.04) | (0.06) | |
Orogen Gold plc (formerly Medavinci plc) | ||||||
Group statement of financial position | ||||||
as at 30 June 2011 | ||||||
Notes | Unaudited 30 June 2011 | Audited 31 December 2010 | ||||
£'000 | £'000 | |||||
Assets | ||||||
Non-current assets | ||||||
Investments | 7 | 400 | 570 | |||
Goodwill | 8 | 3,158 | - | |||
Total non-current assets | 3,558 | 570 | ||||
Current assets | ||||||
Trade and other receivables | 9 | 14 | 246 | |||
Cash and cash equivalents | 10 | 1,448 | 1,546 | |||
Total current assets | 1,462 | 1,792 | ||||
Total assets | 5,020 | 2,362 | ||||
Equity and liabilities | ||||||
Equity attributable to owners of the company | ||||||
Share capital | 11 | 2,336 | 2,016 | |||
Share premium | 11 | 9,382 | 6,714 | |||
Share based payments reserve | 215 | - | ||||
Retained losses | (7,061) | (6,507) | ||||
Total equity | 4,872 | 2,223 | ||||
Current liabilities | ||||||
Trade and other payables | 148 | 139 | ||||
Total current liabilities | 148 | 139 | ||||
Total equity and liabilities | 5,020 | 2,362 | ||||
Orogen Gold plc (formerly Medavinci plc) | ||||||
Group cash flow statement | ||||||
for the six months ended 30 June 2011 | ||||||
Notes | Unaudited 6 months to 30 June 2011 | Audited 9 months to 31 December 2010 | ||||
£'000 | £'000 | |||||
Cash flows from operating activities | ||||||
Group operating loss | 3 | (557) | (435) | |||
(Increase)/decrease in trade and other receivables | 232 | (246) | ||||
Increase/(decrease) in trade and other payables | 9 | 65 | ||||
Impairment loss on investments | - | 100 | ||||
Share based expense | 215 | 5 | ||||
Net cash flow from operating activities | (101) | (511) | ||||
Cash flow from investing activities | ||||||
Payments to acquire investment in joint venture | 7 | (200) | - | |||
Net cash inflow on acquisition of subsidiary | 200 | - | ||||
Net cash outflow on acquisition of associate | - | (370) | ||||
Interest received | 3 | - | ||||
Net cash flow from investing activities | 3 | (370) | ||||
Cash flow from financing activities | ||||||
Net proceeds from issue of equity instruments | - | 2,267 | ||||
Net cash flow from financing activities | - | 2,267 | ||||
Net change in cash and cash equivalents | (98) | 1,386 | ||||
Cash and cash equivalents at beginning of period | 10 | 1,546 | 160 | |||
Cash and cash equivalents at end of period | 10 | 1,448 | 1,546 | |||
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Orogen Gold plc (formerly Medavinci plc)
Group statement of changes in equity
Notes | Share capital | Share premium | Share based payments reserve | Retained losses | Total equity | |||||
£'000 | £'000 | £'000 | £'000 | £'000 | ||||||
Balance at 1 April 2010 | 1,158 | 5,305 | - | (6,077) | 386 | |||||
Changes in period 1 April 2010 to 31 December 2010 | - | |||||||||
Total comprehensive income for the period | - | - | - | (435) | (435) | |||||
Issue of share capital | 11 | 858 | 1,609 | - | - | 2,467 | ||||
Share issue costs | 11 | - | (200) | - | - | (200) | ||||
Share based expense | 11 | - | - | - | 5 | 5 | ||||
Balance at 31 December 2010 | 2,016 | 6,714 | - | (6,507) | 2,223 | |||||
Changes in period 1 January 2011 to 30 June 2011 | ||||||||||
Total comprehensive income for the period | - | - | - | (554) | (554) | |||||
Issue of share capital | 11 | 320 | 2,699 | - | - | 3,019 | ||||
Share issue costs | 11 | - | (31) | - | - | (31) | ||||
Share based expense | 11 | - | - | 215 | - | 215 | ||||
Balance at 30 June 2011 | 2,336 | 9,382 | 215 | (7,061) | 4,872 | |||||
Orogen Gold plc (formerly Medavinci plc)
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Notes to the interim results | ||||||||||||||||||||||||||||||
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1 | General information | |||||||||||||||||||||||||||||
Orogen Gold plc is a company incorporated and domiciled in the UK. Details of the registered office, the officers and advisers to the Company are presented on the Company information page at the end of this report. The Company's offices are in London and Dublin. The Company is listed on the AIM market of the London Stock Exchange (ticker: ORE.L).
The principal activity of the Company is gold and mineral exploration and production in Europe. In prior years the Company was focused on investment in health and wellness based companies.
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2 | Basis of preparation | |||||||||||||||||||||||||||||
The financial information for the six months ended 30 June 2011 presented in this Interim Report is unaudited. Comparative audited information for the 9 months period ended 31 December 2010 is presented in the report. During 2010 the Company changed its reporting year to coincide with the calendar year (previously the reporting year ended 31 March).
The Interim Report has been prepared using the same accounting policies as were applied in the Group's audited financial statements to 31 December 2010, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). The Directors consider that the financial information presented in this Interim Report represents fairly the financial position, operations and cash flows for the period, in conformity with IFRS. The Interim Report for the six months ended 30 June 2011 was approved by the directors on 4 July 2011.
Comparative information for the 6 months to 30 June 2010 has not been presented in this Interim Report since the business of the Company in that period related to the prior years' activities of the business. The audited information for the 9 months ended 31 December 2010 is presented for comparative information purposes in the Interim Report. It should be noted that this prior year's information is not related to the new activities of the Company. The financial information presented for the period ended 31 December 2010 is an extraction from the Group's audited accounts on which the auditors issued an unqualified report, the information presented does not constitute full accounts for that period.
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3 | Group operating loss | |||||||||||||||||||||||||||||
Unaudited 6 months to 30 June 2011 | Audited 9 months to 31 December 2010 | |||||||||||||||||||||||||||||
£'000 | £'000 | |||||||||||||||||||||||||||||
Operating loss for the year is stated after charging / (crediting) | ||||||||||||||||||||||||||||||
AIM re-admission costs | 129 | - | ||||||||||||||||||||||||||||
Directors' emoluments | 79 | 21 | ||||||||||||||||||||||||||||
Directors' share based payments expense - see note 11 | 215 | - | ||||||||||||||||||||||||||||
Services provided by the company's auditors | ||||||||||||||||||||||||||||||
- Audit fees and expenses - statutory audit | 8 | 9 | ||||||||||||||||||||||||||||
- Tax compliance | 2 | 1 | ||||||||||||||||||||||||||||
Impairment of investments | - | 100 | ||||||||||||||||||||||||||||
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4 | Tax on loss on ordinary activities | |||||||||||||||||||||||||||||
No tax charge has been included for the six month period to 30 June 2011 (nor for the 9 month period to 31 December 2010) and no taxable profits are expected for the full year to 31 December 2011.
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5 | Loss per share - basic and diluted | |||||||||||||||||||||||||||||
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period:
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Unaudited 6 months to 30 June 2011 | Audited 9 months to 31 December 2010 | |||||||||||||||||||||||||||||
Loss after tax attributable to equity holders of the parent in £'000 | (554) | (435) | ||||||||||||||||||||||||||||
Weighted average number of ordinary shares in issue | 1,561,984 | 746,987 | ||||||||||||||||||||||||||||
Fully diluted average number of ordinary shares in issue | 1,746,916 | 746,987 | ||||||||||||||||||||||||||||
Basic and diluted loss per share (pence) | (0.04) | (0.06) | ||||||||||||||||||||||||||||
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6 | Dividends | |||||||||||||||||||||||||||||
No dividends were paid or proposed for the six months ended 30 June 2011 (9 months to 31 December 2010 Nil).
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7 | Investments | |||||||||||||||||||||||||||||
Unaudited 30 June 2011 | Audited 31 December 2010 | |||||||||||||||||||||||||||||
£'000 | £'000 | |||||||||||||||||||||||||||||
Reservoir Exploration (BVI) Ltd - Loan | 200 | - | ||||||||||||||||||||||||||||
Investment in Orogen Gold Limited | - | 370 | ||||||||||||||||||||||||||||
Emotion Fitness Mag Kft - cost to Group | 339 | 339 | ||||||||||||||||||||||||||||
Emotion Fitness Mag Kft - impairment | (139) | (139) | ||||||||||||||||||||||||||||
400 | 570 | |||||||||||||||||||||||||||||
Reservoir Exploration (BVI) Ltd - Loan | ||||||||||||||||||||||||||||||
The loan to Reservoir Exploration (BVI) Ltd. relates to payments totalling CAD 315,000 made to fund Phase I exploration expenditures on the Deli Jovan gold project in Serbia. The payments are made under the terms of a joint venture earn-in agreement with Reservoir Capital Corp. whereby the Group can earn a 55% interest in Deli Jovan by committing a total of CAD1.5 million by June 2012 to the Deli Jovan project.
The loan to Reservoir Exploration (BVI) Ltd. is to be applied to acquire a 55% interest in Deli Jovan d.o.o, the Serbian company operating the Deli Jovan project, once the Phase I CAD1.5 million earn-in has completed. The loan is non refundable.
Orogen has the right to earn-in to a further 20%, for a total of 75%, of the Deli Jovan project by committing a further CAD2.0 million to exploration of the project by December 2013.
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Investment in Orogen Gold Limited | ||||||||||||||||||||||||||||||
The investment in Orogen Gold Limited at 31 December 2010 represents the cost of 49% interest in that company. The remaining 51% of Orogen Gold Limited was acquired in March 2011 and the cost of the initial 49% investment was transferred to the cost of investments in subsidiaries in the Company which has been eliminated on consolidation of the Group's financial statements.
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Emotion Fitness Mag Kft | ||||||||||||||||||||||||||||||
The Group's investment in Emotion Fitness Mag Kft represents a 49% interest in that company which runs a fitness centre in Hungary. An impairment of £139,000 has been made against the costs of this investment in prior years.
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8 | Goodwill | |||||||||||||||||||||||||||||
Unaudited 30 June 2011 | Audited 31 December 2010 | |||||||||||||||||||||||||||||
£'000 | £'000 | |||||||||||||||||||||||||||||
Cost of initial investment of 49% interest in Orogen Gold Limited | 370 | - | ||||||||||||||||||||||||||||
Acquisition of 51% of Orogen Gold Limited by issue of 315,351,636 ordinary shares at market price £0.009513 being the share price of Medavinci plc (now Orogen Gold plc) at date of acquisition. | 3,000 | - | ||||||||||||||||||||||||||||
3,370 | ||||||||||||||||||||||||||||||
Less net book value of Orogen Gold Limited | 212 | - | ||||||||||||||||||||||||||||
3,158 | - | |||||||||||||||||||||||||||||
9 | Trade and other receivables | |||||||||||||||||||||||||||||
Unaudited 30 June 2011 | Audited 31 December 2010 | |||||||||||||||||||||||||||||
£'000 | £'000 | |||||||||||||||||||||||||||||
Other receivables | 17 | 246 | ||||||||||||||||||||||||||||
Trade and other receivables | 17 | 246 | ||||||||||||||||||||||||||||
The directors consider that the carrying amount of other receivables approximates their fair value.
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10 | Cash and cash equivalents | |||||||||||||||||||||||||||||
Unaudited 30 June 2011 | Audited 31 December 2010 | |||||||||||||||||||||||||||||
£'000 | £'000 | |||||||||||||||||||||||||||||
Cash at bank | 1,448 | 1,546 | ||||||||||||||||||||||||||||
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11 | Share capital | |||||||||||||||||||||||||||||
Ordinary shares of £0.001 each | Deferred shares of £0.009 each | |||||||||||||||||||||||||||||
Number | Nominal value | Number | Nominal value | Share Premium | ||||||||||||||||||||||||||
£'000 | £'000 | £'000 | ||||||||||||||||||||||||||||
Authorised | 5,000,000,000 | 5,000 | 73,599,817 | 662 | ||||||||||||||||||||||||||
Allotted, called up and fully paid | ||||||||||||||||||||||||||||||
At 1 April 2010 | 495,139,817 | 495 | 73,599,817 | 662 | 5,305 | |||||||||||||||||||||||||
Period 1 April 2010 to 31 December 2010 | ||||||||||||||||||||||||||||||
Issue of new shares during period | 858,521,000 | 859 | - | - | 1,609 | |||||||||||||||||||||||||
Share issue costs during period | (200) | |||||||||||||||||||||||||||||
At 31 December 2010 | 1,353,660,817 | 1,354 | 73,599,817 | 662 | 6,714 | |||||||||||||||||||||||||
Period 1 January 2011 to 30 June 2011 | ||||||||||||||||||||||||||||||
Issue of new shares during period | 320,351,636 | 320 | - | - | 2,699 | |||||||||||||||||||||||||
Share issue costs during period | (31) | |||||||||||||||||||||||||||||
At 30 June 2011 | 1,674,012,453 | 1,674 | 73,599,817 | 662 | 9,382 | |||||||||||||||||||||||||
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Issue of share capital - ordinary shares of £0.001 each
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On 4 March 2011, 315,351,636 new ordinary shares of £0.001 each were issued as consideration to acquire the remaining 51% of Orogen Gold Limited that the Group did not already own. In addition share options of 240,000,000 ordinary shares in the Company were issued to members of the board under the Company's Share Option Plan. These share options are exercisable at 0.95 pence per share during the period 7 March 2012 to 15 February 2021.
The shares and share options issued in March 2011 were issued in association with a readmission of the Company's shares to the AIM market of the London Stock Exchange. On 4 December 2010 the Company granted warrants over 5,000,000 ordinary shares of 0.1 pence each in respect of corporate finance activities. The warrants were exercised in March 2011 at the subscription price of 0.4 pence per share.
On 6 September 2010 the Company issued 421,021,000 ordinary shares of 0.1 pence each. The total cash consideration received amounted to £842,000.On 6 September 2010 the Company issued 62,500,000 ordinary shares of 0.1 pence each. The Company issued these shares to satisfy the purchase price of £370,000 to acquire 49% of Orogen Gold Limited.
Also on 6 September 2010 the Company granted warrants over 5,000,000 ordinary shares of 0.1 pence each in the Company in respect of corporate finance advice. The subscription price is 0.2 pence per ordinary share and the exercise period is five years from the date of grant. On 3 December 2010 the Company issued 375,000,000 ordinary shares of 0.1 pence each. The total consideration received amounted to £1.5 million.
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Share based expense | ||||||||||||||||||||||||||||||
Unexercised warrants and share options existed at the end of the period as set out above. These equity instruments were valued using the Black-Scholes option pricing model.
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12 | Subsequent events | |||||||||||||||||||||||||||||
| There are no subsequent events to report. | |||||||||||||||||||||||||||||
13 | Copy of Interim Report | |||||||||||||||||||||||||||||
Copies of the Interim Report are available to download from the Company's website at www.orogengold.com.
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