RNS Number : 1943T
Argos Resources Ltd
18 March 2019
 

 

18 March 2019

ARGOS RESOURCES LIMITED

("Argos" or "the Company")

 

2018 Financial Results

 

Highlights

 

Argos Resources Ltd (AIM: ARG.L), the Falkland Islands based exploration company focused on the North Falkland Basin, is pleased to announce its financial results for the year ended 31 December 2018.

·      US$406,000 profit (2017: US$118,000)

·      US$788,000 cash reserves at 31 December 2018 (2017: US$758,000)

·      The Working Interest in the Licence was transferred back to Argos in February 2019

·      The Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, for a period of 450 days after the notice to withdraw, until 27 December 2019

·      The current Second Phase of the Licence expires in November 2019. Discussions about the licence term beyond that date are underway with the Falkland Islands Government

 

The full Annual Report and Consolidated Financial Statements can be read and downloaded from the Company website:  http://www.argosresources.com/news.php?page=regulatory-news 

 

 

Argos Resources Limited (+500 22685)

www.argosresources.com

Ian Thomson, Chairman

John Hogan, Managing Director

 

Cenkos Securities plc (Nomad & Broker)

Derrick Lee (+44 131 220 9100)

Neil McDonald (+44 131 220 6939)



 

Joint Chairman's statement and Managing Director's review

 

In October 2018 Noble Energy Falklands Limited ("Noble") and Edison International S.p.A ("Edison") served notice of their intention to withdraw from Production Licence PL001 (the Licence) in the North Falkland Basin, in which  Argos held a 5% Overriding Royalty Interest under a Participation Agreement.  The Licence covers an area of approximately 1,126 square kilometres in the North Falkland Basin.

 

On receipt of the notice Argos exercised the option under the Participation Agreement to have the Licence reassigned to it, which effectively terminated the Participation Agreement. Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, for a period of 450 days after the notice to withdraw. These payments, together with current cash balances of $788,000 at year end 2018, leave the Group adequately financed for at least twelve months beyond sign-off.

 

The current Second Phase of the Licence expires in November 2019 and discussions about the licence term beyond that date are underway with the Falkland Islands Government.  The Working Interest in the Licence was transferred back to Argos in February 2019 and the Company will seek to secure other partners to participate in its development.

 

Results and dividend

The results for the year and the Group's financial position as at the year-end are shown in the attached financial statements.  The directors have not recommended a dividend for the year (2017: $nil).

 

Business review

The Group has returned a profit for the year ended 31 December 2018 of $406,000 (2017: $118,000) which equates to a profit per share of 0.18 cents (2017: 0.05 cents). The increase in profit is due to the recognition of the full amount of the income due under the Participation agreement in the current year, as Argos are contractually entitled to the income under the termination clause of the agreement.

 

Administration expenses were $334,000 in 2018 compared to $329,000 in 2017.

 

Shareholders' equity has increased marginally from $29.46 million to $29.87 million in the year since 31 December 2017, as receipts under the Participation Agreement offset the administration costs leaving a small surplus.  Cash in the year increased from $758,000 to $788,000.

 

IFRS 9 requires the consideration of the risk attached intercompany loan between the parent and subsidiary companies.  This has resulted in an impairment provision in the accounts of the parent but it has no impact on the group accounts and does not affect the group's view of the outcome of the project.

 



 

Outlook for the next financial year

Although the Participation Agreement has now terminated, under the terms of that agreement the Group will continue to receive quarterly cash payments from Noble and Edison of £75,000 per quarter, which equates to $96,000 at the year-end exchange rate, for a period of 450 days after the notice to withdraw.

 

The Group is therefore fully funded for at least twelve months beyond sign-off.

 

 

 

 

Ian Thomson                                                                                                      John Hogan

Chairman                                                                                                            Managing Director



Consolidated statement of comprehensive income

Year ended 31 December 2018

 





 


Year
ended
31 December
2018
$'000

Year
ended
31 December
2017
$'000

Other income

 


784

380

Administrative expenses



(334)

(329)




 


Finance income



4

1

Foreign exchange (losses)/gains



(48)

66




 


Profit for the year attributable to owners of the parent



406

118




 


Total comprehensive income for the period



 


attributable to owners of the parent 



406

118




 

 

Basic and diluted earnings per share (cents)



0.18

0.05

 



 

Consolidated statement of financial position

As at 31 December 2018

 




2018

2017




$'000

$'000

Assets





Non-current assets





Exploration intangible assets

and royalty interests

 

 

 

28,749

 

28,749

 

 

 

28,749

28,749

Current assets



 


Other receivables



392

14

Cash and cash equivalents



788

758

 



 


Total current assets



1,180

772




 


Total assets



29,929

29,521




 


Liabilities



 


Current liabilities



 


Trade and other payables



61

59




 


Total liabilities



61

59




 


Total net assets



29,868

29,462




 





 


Capital and reserves attributable to



 


equity holders of the Company



 


Share capital



6,696

6,696

Share premium



30,071

30,071

Retained losses



(6,899)

(7,305)




 


Total shareholders' equity



29,868

29,462

 



 

Consolidated statement of cash flows

Year ended 31 December 2018

 


 

 

 

 

 

Year
ended
31 December
2018
$'000

Year
ended
31 December
2017
$'000

Cash flows from operating activities




Profit for period before taxation


406

118

Adjustments for:


 


Finance income


(4)

(1)

Foreign exchange loss/(gain)

 

50

(67)



 


Net cash inflow from operating activities


 


before changes in working capital


452

50



 


Increase in other receivables


(378)

1

Increase/(decrease) in other payables


2

(89)



 


Net cash inflow/(outflow) from operating activities


76

(38)



 


Investing activities


 


Interest received


4

1



 


Net cash received from investment activities


4

1



 


Financing activities


 


Issue of ordinary shares (share options exercised)


-

27



 


Net cash from financing activities


-

27



 


Net increase/(decrease) in cash and cash equivalents


80

(10)

Cash and cash equivalents at beginning of period


758

701

Exchange (losses)/gains on cash and cash equivalents


(50)

67



 


Cash and cash equivalents at end of the year


788

758

 



 

Consolidated statement of changes in equity

Year ended 31 December 2018

 




Share
capital
$'000


Share premium
$'000

Retained
losses
$'000


Total
equity
$'000

At 1 January 2017


6,669

30,071

(7,423)

29,317

Total comprehensive income for the year


-

 

-

118

118

Shares issued (share options exercised)


27

 

-

-

27







At 31 December 2017

And 1 January 2018


6,696

 

30,071

(7,305)

29,462







Total comprehensive income for the year

 

-

 

-

406

406


 

 

 

 

 

At 31 December 2018

 

6,696

30,071

(6,899)

29,868

 

 

In preparing the financial information in this statement the Group, which consists of the Company Argos Resources Ltd, and its wholly owned subsidiary Argos Exploration Ltd, has applied policies in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").  The financial information has been prepared under the historical cost convention.

 

The financial information set out above does not constitute the company's statutory accounts for 2017 or 2018. Statutory accounts for 2017 and 2018 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2017 and 2018 were unqualified and did not draw attention to any matters by way of emphasis.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
FR CKFDBQBKDPND