Gladstone Pacific Nickel Limited - ACN 104 261 887 - Interim results for the
six months ended 31 December 2009
TORONTO, March 29 /CNW/ - Gladstone Pacific Nickel Limited ("GPN" or the "Company") today announces its unaudited interim results for the six months ended 31 December 2009.
Financial Results
The Company reported interim revenue from ordinary activities of A$448,494 ((pnds stlg)248,869*) and expenses of A$4,167,963 ((pnds stlg)2,312,803*), approximately half of which was made up of tenement costs of A$917,174 ((pnds stlg)508,939) and a foreign exchange loss of A$1,122,319 ((pnds stlg)622,775*). The loss for the period (after income tax benefits) was A$3,385,700 ((pnds stlg)1,878,725*) representing a loss of A$.0477 per share ((pnds stlg).0265 per share*).
Exploration and Evaluation Expenditure for the period of A$507,868 ((pnds stlg)281,817*) was capitalised as Deferred Exploration and Evaluation costs. The expenditure was predominantly costs associated with initial expenditure on the Marlborough Heap Leach Project ("MHLP").
In line with its accounting policies and the impairment of assets at 30 June 2009, the Company has reviewed the carrying value of its Deferred Exploration and Evaluation costs. Based on the current stage of the Gladstone Nickel Project and the MHLP, and the expected recoverability of historical costs, the Company estimates the fair value of its Deferred Exploration and Evaluation costs as at 31 December 2009 to be unchanged from the June 2009 value of A$18,222,910 ((pnds stlg)10,111,893*).
The carrying value, prior to impairment, of the Deferred Exploration and Evaluation costs was A$18,730,778 ((pnds stlg)10,393,708*) and thus the asset has been impaired to the extent of the Exploration and Evaluation Expenditure for the period of A$507,868 ((pnds stlg)281,817*), and an impairment loss equal to that amount has been recognised in the Statement of Comprehensive Income.
The Company remains in a strong cash position with A$12,218,252 ((pnds stlg)6,779,908*) in cash made up of cash on hand of $10,558,354 ((pnds stlg)5,858,831*) and $1,659,898 ((pnds stlg)921,077*) as a refundable deposit on the purchase of land at Gladstone which is recorded in the accounts as a Non Current Receivable. Total shareholder equity as at 31 December 2009 was $30,222,895 ((pnds stlg)16,770,684*).
GPN continues to review all activities and associated operating costs, and has reduced staff costs and other expenditures over the period to reflect current global economic conditions.
Operational Highlights
The Company executed a Memorandum of Understanding ("MOU") for the development of a heap leach project at Marlborough with China Tianchen Engineering Corp ("TCC") (as announced on AIM on 16 October 2009). The MOU is subject to a number of conditions including the satisfactory conclusion of a feasibility study, entering into an engineering procurement and construction contract with TCC, and the identification of an equity partner and an offtake partner for the Project. The Company is continuing its discussions with TCC and will provide an update to investors in due course.
Nickel Markets
Average nickel prices have stabilised over the half year averaging US$8.06/lb to US$7.89 /lb in the third and fourth quarter of 2009 respectively. Current prices have been trending upwards and are above US$10.00/lb. The buoyancy of the nickel price is particularly encouraging given that nickel LME stock levels are coming off their historically high levels and are currently around 156,000 tonnes of nickel metal. The long term drivers of nickel consumption continue to be the fast growing economies of China and India and these remain relatively strong.
Post Balance Sheet Events
The Company's major shareholder has called a general meeting of members to be held on 9 April 2010 to consider the removal of two Directors, including myself, and the appointment of two new Directors (as announced on AIM on 9 February 2010). A Notice of Meeting was mailed to shareholders and announced on AIM on 2 March 2010.
Company Value
The Global Financial Crisis has resulted in postponement of our Gladstone Nickel Project, a considerably lower market capitalisation of the Company and significant write off's of our Deferred Exploration and Evaluation Costs. However, your Company has a significant asset base for which it should be proud:
- Cash of over A$12 million - Our 100% owned Marlborough tenements have been valued at between A$18 to A$61 million by an independent expert. This is conservatively valued in our accounts at A$18.2 million. - Potential for a Heap Leach Project at Marlborough with test work that indicates favourable extraction rates and recoveries of nickel and cobalt. This project can be an add-on to our larger Gladstone Nickel Project. - The Gladstone Nickel Project which, as announced on 20th June 2008, can demonstrate a net present value of US$2.3 billion at similar commodity and exchange rates as those experienced today. - Significant funds of A$50.3 million have been spent on advancement of the Gladstone Nickel Project with historical expenditure indicated below: --------------------------------------------------------------------- Description A$ (millions) --------------------------------------------------------------------- Environmental studies 3.8 --------------------------------------------------------------------- Metallurgical test work 4.8 --------------------------------------------------------------------- Marlborough maintenance, drilling and purchases 12.0 --------------------------------------------------------------------- Engineering studies 19.5 --------------------------------------------------------------------- Ouinne deposit and drilling 10.2 --------------------------------------------------------------------- --------------------------------------------------------------------- Total 50.3 --------------------------------------------------------------------- - Our 49% contractual interest in the Ouinne tenements in New Caledonia has been valued at between $20 to 46 million by an independent expert. This agreement is subject to financing of the Gladstone Nickel Project and the valuation range does not include an offset for the purchase of Ouinne which will be the issue of 15 million ordinary shares in the Company to our New Caledonia Partner, Societe Miniere Georges Montagnat. - An agreement with the Queensland Government for the purchase of scarce industrial land at Gladstone which includes a cash deposit of $1.6 million (the deposit is currently is treated in the accounts as a non current receivable). - Environmental Approvals for both stages 1 & 2 of the Gladstone Nickel Project.
There is, in my opinion, a significant value base of the Company which is currently not reflected in the market capitalisation of the business. I would like to continue to serve the interests of all shareholders but if I am elected off the Board on the 9th April 2010 I hope that the new Board can realise this inherent value, which I am sure can be achieved.
James Henderson Chairman Gladstone Pacific Nickel Limited
* Exchange rate used A$1:(pnds stlg)0.5549
Extracts of the interim results for the six months ended 31 December 2009 appear below and a full version will be available on the Company's website www.gladstonepacific.com.au
Consolidated Statement of Comprehensive Income for the six months ended 31 December 2009 Notes Consolidated Dec 09 Dec 08 ($A) ($A) ------------ ------------ Interest Income 448,494 728,488 Foreign Exchange Gain - 2,347,566 ------------ ------------ TOTAL REVENUE 448,494 3,076,054 ------------ ------------ Evaluation Costs 103,827 472,230 China Representative - 140,133 Foreign Exchange Loss 1,122,319 3,502 Directors' Fees/ Remuneration 466,282 394,166 Directors' Option Expense - 26,292 Brokers' Option Expense 21,125 21,125 Professional Fees 52,901 965,493 Travel and Accommodation 69,446 213,029 Wages and On-costs 334,083 659,310 Office Rental 570,130 234,142 Public Relations and Ongoing Listing Fees 75,268 144,044 IT and Communication 62,495 129,753 Marketing - 23,675 Depreciation 133,591 93,945 Other 92,699 229,803 Tenement Expenses 917,174 - Impairment Loss 146,623 78,081,765 ------------ ------------ TOTAL EXPENSES 4,167,963 81,832,407 ------------ ------------ PROFIT/(LOSS) BEFORE INCOME TAX EXPENSE (3,719,469) (78,756,353) ------------ ------------ Income Tax Benefit/ (Expense) 333,769 804,964 ------------ ------------ PROFIT/(LOSS) AFTER INCOME TAX EXPENSE (3,385,700) (77,951,389) ------------ ------------ ------------ ------------ OTHER COMPREHENSIVE INCOME* Foreign Currency Translation 472,774 (54,036) Income Tax on Items of Other Comprehensive Income - - ------------ ------------ Other Comprehensive Income for the period (net of tax) 472,774 (54,036) ------------ ------------ TOTAL COMPREHENSIVE INCOME (2,912,926) (78,005,425) ------------ ------------ ------------ ------------ EARNINGS PER SHARE Basic Earnings (Loss) per Share (Cents per Share) 6 (4.77) (156.21) Basic Earnings (Loss) per Share (Cents per Share) 6 (4.77) (156.21) * Reported directly to Other Reserves In Equity. Consolidated Balance Sheet for the six months ended 31 December 2009 Notes Consolidated Dec 09 June 09 Dec 08 ($A) ($A) ($A) ----------------------------------------- CURRENT ASSETS Cash Assets 7 10,558,354 13,566,123 16,744,306 Trade and Other Receivables 153,692 194,815 172,146 Other Current Assets 14,612 898 192,046 ----------------------------------------- TOTAL CURRENT ASSETS 10,726,658 13,761,836 17,108,498 ----------------------------------------- NON CURRENT ASSETS Property Plant and Equipment 937,440 852,596 1,110,382 Investment in Subsidiaries 1,712 1,712 - Deferred Evaluation and Exploration Costs 4 18,222,910 18,222,910 46,084,800 Trade and Other Receivables 1,894,172 2,092,547 10,712,226 ----------------------------------------- TOTAL NON CURRENT ASSETS 21,056,234 21,169,765 57,907,408 ----------------------------------------- TOTAL ASSETS 31,782,892 34,931,601 75,015,906 ----------------------------------------- ----------------------------------------- CURRENT LIABILITIES Trade and Other Payables 637,435 811,489 718,521 Provisions 72,067 136,265 164,395 ----------------------------------------- TOTAL CURRENT LIABILITIES 709,502 947,754 882,916 ----------------------------------------- NON CURRENT LIABILITIES Trade and Other Payables 718,399 725,690 818,115 Deferred Tax Liabilities - - 1,624,287 Provisions 132,096 132,096 193,101 ----------------------------------------- TOTAL NON CURRENT LIABILITIES 850,495 857,786 2,635,503 ----------------------------------------- TOTAL LIABILITIES 1,559,997 1,805,540 3,518,419 ----------------------------------------- ----------------------------------------- ----------------------------------------- NET ASSETS 30,222,895 33,126,061 71,497,487 ----------------------------------------- ----------------------------------------- EQUITY Contributed Equity 127,456,754 127,456,754 108,035,294 Reserves 14,005,043 13,522,927 53,146,355 Retained Earnings/ (Accumulated Losses) (111,259,902) (107,874,620) (89,705,162) ----------------------------------------- Parent Interest 30,201,895 33,105,061 71,476,487 ----------------------------------------- Minority Interest 21,000 21,000 21,000 ----------------------------------------- TOTAL EQUITY 30,222,895 33,126,061 71,497,487 ----------------------------------------- ----------------------------------------- Consolidated Cash Flow Statement For the six months ended 31 December 2009 Notes Consolidated Dec 09 Dec 08 ($A) ($A) ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Payments to Suppliers and Employees (2,988,282) (4,909,638) Payments for Exploration and Evaluation (507,869) (2,697,346) Research and Development Rebate 333,460 - Interest Received 311,771 673,673 ------------ ------------ NET CASH FLOWS FROM (USED) IN OPERATING ACTIVITIES 7(a) (2,850,920) (6,933,311) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property plant and equipment (205,440) (370,452) Refund of Bank Guarantee - Bond Security 198,795 - Advances to Ouinne SAS (150,204) (2,035,006) ------------ ------------ NET CASH FLOWS (USED) FROM INVESTING ACTIVITIES (156,849) (2,405,458) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES ------------ ------------ NET CASH FLOWS FROM (USED) FINANCING ACTIVITIES - - ------------ ------------ Net Increase/(Decrease) in Cash Held (3,007,769) (9,338,769) Net Foreign Exchange Differences - 2,347,567 Opening Cash Brought Forward 13,566,123 23,735,508 ------------ ------------ CLOSING CASH CARRIED FORWARD 10,558,354 16,744,306 ------------ ------------ ------------ ------------ Statement of Changes in Equity for the six months ended 31 December 2009 ------------------------------------------------------------------------- Consolidated Notes Issued Retained Other capital Earnings Reserves ------------------------------------------------------------------------- AS AT 1 JULY 2008 84,259,743 (11,790,641) 36,012,711 ----------------------------------------- ----------------------------------------- Profit /( Loss) for the Period - (77,951,389) - Other Comprehensive Income - - (54,036) ----------------------------------------- Total Comprehensive Income - (77,951,389) (54,036) Ordinary Shares Issued During the Year 23,775,551 - - Movement in Minority Interest to date of purchase - 36,868 (2,443,893) Share Based Payment - Employees and Directors' Options - - 178,022 Share Based Payment - Director - - 9,443,247 Minority Interest acquired in MNPL - - - Other Equity - - 10,010,314 ----------------------------------------- AS AT 31 DECEMBER 2008 108,035,294 (89,705,162) 53,146,365 ----------------------------------------- ----------------------------------------- AS AT 1 JULY 2009 127,456,754 (107,874,202) 13,522,927 ----------------------------------------- ----------------------------------------- Profit/( Loss) for the Period - (3,385,700) - Other Comprehensive Income - - 472,774 ----------------------------------------- Total Comprehensive Income - (3,385,700) 472,774 Share Based Payment - Employees and Directors' Options - - 9,342 ----------------------------------------- AS AT 31 DECEMBER 2009 127,456,754 (111,259,902) 14,005,043 ----------------------------------------- ----------------------------------------- ----------------------------------------------------------- Consolidated Notes Minority Total Interest ----------------------------------------------------------- AS AT 1 JULY 2008 31,420,614 139,902,427 --------------------------- --------------------------- Profit /( Loss) for the Period - (77,951,389) Other Comprehensive Income - (54,036) --------------------------- Total Comprehensive Income - (78,005,425) Ordinary Shares Issued During the Year - 23,775,551 Movement in Minority Interest to date of purchase 2,428,025 21,000 Share Based Payment - Employees and Directors' Options - 178,022 Share Based Payment - Director - 9,443,247 Minority Interest acquired in MNPL (33,827,639) (33,827,639) Other Equity - 10,010,314 --------------------------- AS AT 31 DECEMBER 2008 21,000 71,497,487 --------------------------- --------------------------- AS AT 1 JULY 2009 21,000 33,126,061 --------------------------- --------------------------- Profit/( Loss) for the Period - (3,385,700) Other Comprehensive Income - 472,774 --------------------------- Total Comprehensive Income - (2,912,926) Share Based Payment - Employees and Directors' Options - 9,342 --------------------------- AS AT 31 DECEMBER 2009 21,000 30,222,895 --------------------------- ---------------------------
For further information: Enquiries to: Julien McInally, Gladstone Pacific Nickel, Tel: +61 (0) 7 3231 7100; Gerry Beaney/Robert Beenstock, Grant Thornton Corporate Finance, Tel: +44 (0) 20 7383 5100; John Prior, Arbuthnot Securities, Tel: +44 (0) 20 7012 2000
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