POLO RESOURCES LIMITED 30 March 2016
("Polo" or the "Company")
Polo Resources Limited (AIM: POL), the natural resources investment company with interests in oil, gold, coal, copper, phosphate, iron and vanadium, today announces results for the six months ended 31 December 2015.
Total Net Assets of US$73.53 million as of 16 March 2016 (31 December 2015: US$73.03 million).
Net Asset Value per share as at 16 March 2016 was approximately 17.23 pence per share (31 December 2015: 16.31 pence per share).
Investment HighlightsSignet Petroleum Limited and Regalis Petroleum Limited (Oil and Gas, Africa)
Signet, in which Polo held a 42 per cent interest, determined to wind down its affairs. Polo received a cash distribution of US$691,000 and an in-specie distribution of approximately
1.89 million shares in private Regalis Petroleum, which has interests in Blocks DOA and WD2-2008 onshore Southern Chad, and a further 1.23 million shares from certain other Signet shareholders, as part of the winding down, with a total value of approximately US$6.96 million. These shares are in addition to the 3.5 million shares held directly by Polo and bring Polo's total shareholding in Regalis to 13.67 per cent. In its year ended 31 December 2014, Regalis reported an unaudited loss from operations of US$7.5 million and had net assets as at that date of US$40.1 million.
Regalis completed a 5,349 km airborne gravity/magnetic survey over the blocks which are on trend with existing and recent Glencore/Caracal discoveries.
Hibiscus Petroleum Berhad (HIBI: MK) (Oil & Gas, UK and Australia)
Polo subscribed 90 million shares in Hibiscus, a Main Market of Bursa Malaysia listed company for US$5 million. The holding represented a strategic 8.4 percent stake (since diluted) in the enlarged fully paid capital of Hibiscus and was acquired at a price of MYR
0.235 per share.
On 6 August 2015, Hibiscus announced a proposed joint acquisition by Anasuria Hibiscus UK Limited, an indirect wholly-owned subsidiary of Hibiscus, and Ping Petroleum Limited ("Ping") to each acquire 50 per cent of the interests held by Shell U.K. Limited, Shell EP Offshore Ventures Limited and Esso Exploration and Production UK Limited in the relevant licenses of the Anasuria oil and gas fields in the UK Central North Sea for a total cash consideration of US$52.5 million.
Post reporting period, Hibiscus announced that its subsidiary Anasuria Hibiscus UK Limited and Ping had completed the Anasuria acquisition. This is a significant milestone for Hibiscus as it strives to become a major operating oil producer. Additional fundraising by Hibiscus resulted in a light dilution of Polo's shareholding to 8.16 percent.
Blackham Resources (ASX:BLK) (Gold, Australia)
In October 2015, Blackham released a Preliminary Feasibility Study ("PFS") demonstrating robust economics for its 4.7 million ounce ("Moz") resource Matilda Gold Project. Based on a Mining Inventory of 6 million tonnes ("Mt") at 2.8 grams/tonne ("g/t") for a total of 540,000 oz and an Ore reserve Estimate 3.4 Mt at 2.5 g/t for 270,300 oz, the PFS defined an initial mine life of 4.75 years delivering an average 98,000 oz/year. The start-up capital is low at some $28 million and based on a gold price A$1,550/ounce the Project had an NPV (pre- tax) A$124 million, payback 14 months and IRR (pre-tax) 105 per cent.
Post reporting period, on 24 February 2016, Blackham released a Definitive Feasibility Study ("DFS") which further verified the very strong economics for the Matilda Project. All key mining parameters improved: Mining Inventory 8.3 Mt at 2.9 g/t for a total 767,000 oz; Ore Reserve Estimate 6.1 Mt at 2.5 g/t for 481,000 oz; mine life over 7 years; and average production first five years 101,000 oz/year. Start-up capital is still low but slightly increased to $32 million and key economic indicators improved (based on A$1,550/ounce): NPV (pre- tax) A$170 million, payback 12 months and IRR (pre-tax) 150 per cent.
The Matilda project is capital efficient and because existing infrastructure such as the processing plant needs little refurbishment it can be rapidly brought into production. The initial mine plan has a very short payback period and will generate the cash necessary to grow the mining inventory from their very considerable gold resource.
Despite volatility in US dollar gold price, the Australian dollar gold price has remained relatively stable due to the Australian Dollar exchange rate. Australian gold producers with a local cost base and cashflows linked to Australian dollar gold price have reduced risk and continue to make good margins. Following the successful DFS, Blackham raised A$20.3 million through a placement and is committed to implement the Matilda Project with first production targeted for Q3 2016. Polo's total interest in Blackham currently sits at 7.08 per cent.
Weatherly International Plc (AIM: WTI) (Copper, Namibia)
AIM listed Weatherly, a mining, development and exploration company focusing on Copper in Namibia, achieved its designed production rate of 17,000 tonnes per annum of high grade copper cathode (average monthly production 1,420 tonnes) at its flagship Tschudi Project during December 2015.
Weatherly's Central Operations were converted to project development status in order to prepare the mines for future production of larger volumes of copper concentrate, at lower unit costs, when market conditions improve.
In December 2015, Weatherly announced a JORC (2012) reserve and processing update for its Tschudi mine. Tschudi ore reserves of 24.4 Mt at 0.85 per cent copper for 214,000 tonnes of contained copper metal after mining depletion of 8,000 tonnes.
Pit optimisation work has decreased Strip Ratio by 13 per cent from 7.5:1 (waste:ore) to 6.5:1. Life of mine C1 costs are expected to be reduced by 9 per cent to US$3,865 per tonne of copper cathode and there is an opportunity to increase processing capacity from 17,000 to 20,000 tonnes per annum.
The future looks promising for Weatherly with its Tschudi mine delivering planned output at lower than planned cost together with an opportunity to further enhance production. These are important achievements as it works towards securing the continued support of Orion
Mine Finance and positioning itself to capitalise on what industry perceives to be a period of rising copper price.
Ironstone Resources Limited (Iron Ore, Vanadium, Precious Metal, Canada)
During the period reported on, Ironstone raised C$1.04 million towards reduction of debt and completing an SRK Consulting Preliminary Economic Assessment ("PEA"), on its Clear Hills Iron/Vanadium project in Alberta, Canada. Polo participated and increased its interest in Ironstone to 18.8 per cent through an additional investment of C$101,000 and the operation of a price protection mechanism for certain early stage investors.
Polo takes a long-term view with its investment in Ironstone which it believes is on the cusp of a major breakthrough capable of making significant returns for investors. The Hatch- Ironstone Direct Reduced Iron Process if successful (able to operate at production scale and at an attractive cost) will open up vast hitherto untouched but readily available iron ore reserves. Ironstone has its own large iron ore reserves with significant Vanadium Pentoxide by-product. Planned outputs include: Hot Iron Briquettes for Electric Arc Furnaces and Vanadium which is important in mass storage batteries, e.g. Lithium-Vanadium batteries for hybrid cars and the Vanadium Flow Battery which is capable of powering single homes through to solving the power grid storage problems re accommodating solar and wind turbines.
Acknowledging the pending demand for steel products in the expanding western Canada economy, Ironstone anticipates that the provincial government will offer financial support for the commissioning of a steel market study to determine the supply and demand scenario for steel products in western Canada over the next 15 years. This study, expected to be conducted in Q3 2016, will provide important data to the company to consider moving up the value chain from producing iron metallics for export to producing finished steel products for domestic consumption.
The PEA, which was scheduled to be completed in late 2015, has been deferred due to the potential of re-aligning the production plan from metallics to steel, depending on the outcome of the aforementioned market study. Ironstone's revised plan is to conduct the PEA post pilot test at metallurgical equipment supplier FLSmidth's facilities, which Ironstone projects to conduct late 2016, dependent on available funding.
Polo Resources Limited Kudzayi Denenga, Investor Relations | + 27 (0) 787 312 919 |
ZAI Corporate Finance Ltd (nominated adviser) Ray Zimmerman, Peter Trevelyan-Clark | +44 (0) 20 7060 2220 |
Liberum Capital (broker) Christopher Britton | +44 (0) 20 3100 2000 |
Blytheweigh (public relations) | +44 (0) 207 138 3204 |
Tim Blythe, Camilla Horsfall
Polo Resources Limited is a natural resources investment company focused on investing in undervalued companies and projects with strong fundamentals and attractive growth prospects. For complete details on Polo, refer to: www.poloresources.com.
The AIM Market of the London Stock Exchange Plc does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future plans and objectives of Polo. There can be no assurance that such statements will prove to be accurate, achievable or recognizable in the near term.
Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Polo assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
The Company's exploration and investment activities may also be affected by a number of risks, including legal, political, environmental, economic, financing, permitting, commodity, exploration and development and other market risks which are normal to the industry and referenced in greater detail in the Company's 2015 Annual Report for the period ending 30 June 2015, which may be found on the Company's website at profile on www.poloresources.com
Polo Resources Ltd. issued this content on 30 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 30 March 2016 10:24:04 UTC
Original Document: http://ww1.investorrelations.co.uk/polo/uploads/pressreleases/files/polo-resources-ltd-interim-results-31-dec-2015.pdf
