TIDMORE
RNS Number : 2935M
Orogen Gold PLC
15 August 2011
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 4(th) 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 Gindusa 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, GBP1,448,000 cash to support Phase 1 work
programme (GBP1,546,000 at
31 December 2010)
-- At end of period, Net Loss of GBP554,000 (GBP435,000 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 4(th) 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 Gindusa 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 Gindusa 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 Gindusa
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 Gindusa.
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
Gindusa 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 GBP
554,000. At 30 June 2011 the Group held cash resources of GBP 1.448
million. We have already expended GBP 200,000 (CAD 315,000) on the
Deli Jovan project and a further expenditure commitment of GBP
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
15(th) August 2011
Orogen Gold plc (formerly Medavinci
Plc)
Group statement of comprehensive
income
for the six months ended 30 June
2011
Unaudited Audited
6 months 9 months
to 30 June to 31 December
Notes 2011 2010
GBP'000 GBP'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
Audited
Unaudited 31
30 June December
Notes 2011 2010
GBP'000 GBP'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
Unaudited Audited 9
6 months months to 31
to 30 June December
Notes 2011 2010
GBP'000 GBP'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
------------------------------------- ------ ----------- --------------
Orogen Gold plc (formerly Medavinci plc)
Group statement of changes in equity
Share
based
Share Share payments Retained Total
Notes capital premium reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'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)
Notes to the interim
results
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.
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.
3 Group operating loss
Audited 9
Unaudited months to
6 months 31
to 30 June December
2011 2010
GBP'000 GBP'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
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.
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:
Unaudited Audited
6 months 9 months
to 30 to 31
June December
2011 2010
Loss after tax attributable to equity holders of the
parent in GBP'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)
----------------------------------------------------------------------------------- ------------ ------------- ---------- ---------
6 Dividends
No dividends were paid or proposed for the six months ended 30 June 2011
(9 months to 31 December 2010 Nil).
7 Investments
Audited
Unaudited 31
30 June December
2011 2010
GBP'000 GBP'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.
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.
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
GBP139,000 has been made against the costs of this investment in prior
years.
8 Goodwill
Audited
Unaudited 31
30 June December
2011 2010
GBP'000 GBP'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 GBP0.009513 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
Audited
Unaudited 31
30 June December
2011 2010
GBP'000 GBP'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.
10 Cash and cash equivalents
Audited
Unaudited 31
30 June December
2011 2010
GBP'000 GBP'000
Cash at bank 1,448 1,546
--------------------------------------------------- ---------------------- ------------ ------------- ----------
11 Share capital
Ordinary shares of Deferred shares of GBP0.009
GBP0.001 each each
Nominal Nominal Share
Number value Number value Premium
GBP'000 GBP'000 GBP'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
--------------------------------------------------- ---------------------- ------------ ------------- ---------- ---------
Issue of share capital - ordinary shares of GBP0.001 each
On 4 March 2011, 315,351,636 new ordinary shares of GBP0.001 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 GBP842,000.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
GBP370,000 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 GBP1.5 million.
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.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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