News
Final Results
Lotus Resources Plc (PLUS: LOTP), today announces its final year results for the year ended 30 September 2008.
Chief Executive's Statement
I am pleased to announce the results of the Company for the year ended 30 September 2008.
Background
The Company was formed in 2006 to take advantage of the significant opportunities that existed in the Chinese mining sector. In particular, Lotus wanted to utilise the relevant experience of a number of the co-founders and shareholders.
On 21 December 2007, the Company successfully listed on the PLUS market having completed a fundraising at the time of listing of £225,000 from the issue of 7.5 million shares at 3p per share. During the next 9 months, the Company has successfully raised a further £468,092 net of expenses from the issue of 10.1 million shares at an average of 6p per share, thereby giving the Company working capital to pursue its strategy of identifying suitable mining investments.
The Company's main objective is to build a medium scale mining and exploration company with a balanced portfolio of properties and product commodities. During the period since the listing, the Company has investigated a number of opportunities in China, though to date none have met the Company's investment criteria. Therefore the decision has been taken to extend the search for suitable properties to include Mongolia where the co-founders also have extensive industry experience. In the opinion of the Directors, Mongolia offers a highly prospective geological environment, has a well established mining and exploration industry and has a favourable business environment.
Financial results for the year ended 30th September 2008
The Company made a loss before tax of (£323,634) (period ended 30 September 2007: Loss (£228,806)) with the expenditure primarily invested in investigating potential mining investments.
As at 30 September 2008, the Company had cash of £395,690 which is expected to cover the immediate needs of the Company. A further fundraising exercise is likely to be required later this year.
Current developments
Lotus has recently established a wholly owned Mongolian subsidiary company through which it intends to conduct its operations in Mongolia. The Company has been reviewing a number of potential mining projects in Mongolia including gold, copper, iron, coal and fluorspar.
An opportunity has been identified to develop an interest in the mining and processing of metallurgical grade fluorspar for use in the steel industry. The Company, through its Mongolian subsidiary, has signed two joint venture agreements with two separate Mongolian partners to conduct exploration for fluorspar. These two agreements will only proceed once the appropriate exploration licences have been transferred to the joint venture companies. It is hoped that the transfer of these licences will be completed in the next few weeks.
If the exploration programmes are successful and an economic reserve is identified, the joint venture companies will apply for mining licenses and will endeavour to bring the properties into early production during 2009. It is anticipated that the fluorspar mined during the course of exploration and subsequent mining will be sold to customers in Russia under an existing sales contract held by one of the Mongolian partners.
Lotus has a number of other exploration and mining licenses for fluorspar under active consideration and it is anticipated that further investments will be made in both mining and exploration to develop a profitable fluorspar business. These opportunities, together with the possible commitments under the mining phase of the joint ventures and need for additional working capital, will require the Company to raise additional funding. The scale and timing of the fundraising will be dependent on the requirements of the individual projects. Although the Board is hopeful this can be successfully completed over the next few months, the current economic conditions may mean that timescales have to be delayed.
I would like to thank the co-founders and shareholders who have been very supportive during these important initial stages in the Company's development and subject to my comments above, I look forward to the future with great confidence.
Simon Longworth
Chief Executive
30 January 2009
Consolidated Profit and Loss Account
For year ended 30 september 2008
| Note | Year to 30 September 2008 |
Period to 30 September 2007 |
|
| £ | £ | ||
| Administrative expenses | (326,540) | (229,098) | |
| Operating loss | (326,540) | (229,098) | |
| Interest receivable | 2,939 | 295 | |
| Interest payable | (33) | (3) | |
| Loss on ordinary activities before taxation | (323,634) | (228,806) | |
| Tax on loss on ordinary activities | - | - | |
| Loss on ordinary activities after taxation | (323,634) | (228,806) | |
| Loss per share (pence) | 3 | ||
| Basic | (1.02) | (1.67) | |
| Diluted | (0.77) | (1.67) |
Consolidated Balance Sheet
As at 30 September 2008
| 30 Sept 2008 |
30 Sept 2007 |
||
| £ | £ | ||
| Fixed assets | |||
| Tangible assets | 10,410 | - | |
| 10,410 | - | ||
| Current assets | |||
| Debtors | 10,359 | 39,319 | |
| Cash at bank | 395,690 | 10,907 | |
| 406,049 | 50,226 | ||
| Creditors: amounts falling due within one year | (54,615) | (57,841) | |
| Net current assets/(liabilities) | 351,434 | (7,615) | |
| Total assets less liabilities | 361,844 | (7,615) | |
| Capital and Reserves | |||
| Called up share capital | 409,841 | 219,674 | |
| Share premium account | 504,443 | 1,517 | |
| Profit & loss account | (552,440) | (228,806) | |
| Equity shareholders' funds | 361,844 | (7,615) |
The financial statements were approved and authorised for issue by the Board and were signed on its behalf on 29 January 2009.
Notes
1. ACCOUNTS
The above financial information does not amount to full accounts within the meaning of S240 of the Companies Act 1985. It has, however, been extracted from the statutory accounts for the year ended 30 September 2008, which include an unqualified auditor's report and will be delivered to the Registrar of Companies. These accounts were approved by the Board of Directors on 29 January 2009 and were signed on its behalf by James Benson, Director.
2. ACCOUNTING POLICIES
2.1 Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. During the period the group incurred a loss of £323,634. The financial statements have been prepared on the going concern basis which assumes that the group will continue in operational existence for the foreseeable future. The validity of this assumption is based on an anticipated successful fundraising exercise being undertaken in the latter part of the year.
2.2 Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the profit and loss account.
2.3 Basis of consolidation
The consolidated profit and loss account and balance sheet include the financial statements of the company and its subsidiary undertakings made up to 30 September 2008. The results of subsidiaries sold or acquired are included in the profit and loss account up to, or from the date control passes. Intra-group sales and profits are eliminated fully on consolidation.
2.4 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life as follows:
Fixtures, fittings & equipment straight line over 2 years
Motor vehicles straight line over 3 years
3. EARNINGS/(LOSS) PER SHARE
| 2008 | 2007 | ||
| £ | £ | ||
| Loss per share - basic | (1.02) | (1.67) | |
| Loss per share - diluted | (0.77) | (1.67) |
The basic earnings per ordinary share is calculated by dividing earnings for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year.
The calculation of basic earnings per ordinary share is based upon the following data:
Earnings
| 2008 | 2007 | ||
| £ | £ | ||
| Earnings for the purposes of earnings per share | (323,635) | (228,806) |
Number of shares
| 2008 | 2007 | ||
| £ | £ | ||
| Basic weighted average number of shares | 31,595,885 | 13,700,299 | |
| Dilutive effect of share warrants | 10,684,289 | - | |
| 42,280,174 | 13,700,299 |
The Directors of Lotus Resources Plc accept responsibility for this announcement.
For further information please contact:
Lotus Resources plc
Simon Longworth, Chief Executive
Tel: +976 88008983 +86 (0) 1350 107 0840
James Benson, Finance Director/Company Secretary
Tel: +44 (0) 7768 242 660
Mazars Corporate Finance Limited
Stephen Skeels
Tel: +44 (0) 20 7063 4000