Company Announcements

Interim Results

By September 29, 2014 No Comments

29 September 2014

Papua Mining plc

Interim Results and Exploration Update

Papua Mining plc (“Papua” or “the Company”) a UK company focused on the exploration for and if commercially feasible, development of gold and copper deposits in Papua New Guinea (“PNG”) announces interim results for the six months ended 30 June 2014 and presents an update in respect of its exploration activities on its licences.

 

Highlights:

  • Drilling programme at Tripela Prospect continuing with signs of increasing proximity to a porphyry target.
  • Recent independent consultants’ visit assists significant advance in our geological model for the Tripela area.
  • Initial geochemical soil sampling at Mt. Visi on EL2051 completed. Follow up geological mapping and trenching are planned prior to drilling.
  • Rock and soil sampling at Ainbul on EL2146 points to extension of mineralized zone eastwards from Mt Nakru area into EL2146.
  • Interim Results show US$4.9 million in cash at 30 June 2014.

 

Nakru Drilling

Since the commencement of our drilling programme in the Nakru area, we have completed 6,719 metres of drilling (See Table 1).

Hole_ID

Easting

Northing

Elevation

Azimuth

Dip

Length

N62DDH001

225500

9338125

980

315

-60

841.7 m

N62DDH002

224643

9338292

970

75

-70

736.7 m

N62DDH003

223379

9344502

619

57

-55

471.2 m

N62DDH004

228238

9337492

955

356

-45

251.5 m

N62DDH005

228206

9337689

929

0

-60

204.7 m

N62DDH006

228141

9337667

937

270

-45

330.5 m

N62DDH007

227986

9337964

919

90

-45

257.0 m

N62DDH008

228085

9337465

973

0

-60

306.1 m

N62DDH009

228053

9337771

922

125

-60

620.7 m

N62DDH010

228180

9337854

897

0

-75

199.3 m

N62DDH011

228099

9337448

980

0

-70

427.3 m

N62DDH012

228059

9337771

950

180

-70

1069.9 m

N62DDH013

228059

9337771

950

210

-65

1002.2 m

Table 1: Diamond drillhole parameters for Nakru drilling programme.

Background to the drilling programme at Tripela

Geological mapping and sampling in 2011 and 2012 discovered significant copper and molybdenum soil anomalism at Tripela. Float and outcrop sampling and geological mapping delineated numerous occurrences of in situ high grade copper and molybdenum mineralization with grades up to 29% copper returned from outcrop assays. Much of the mineralization in outcrop is interpreted as D veins occurring around the alteration halo of a buried porphyry deposit. This geological mapping, rock sampling and the drilling results already obtained confirm the potential for a copper porphyry deposit at depth in this area.

DDH004-DDH010

The initial drilling programme at Tripela completed between January and May 2014 was designed to test for confirmatory evidence of underlying porphyry emplacement. The principal aim was the recognition of the zonation of argillic, phyllic and propylitic alteration at Tripela that would lead us to an inner potassic alteration zone which is in turn believed to be at the core of the porphyry deposit. DDH010, the last of seven drillholes completed during the initial phase of drilling, was completed in May and we then collated and assessed the data obtained from the seven drillholes. Widespread phyllic and argillic alteration was recognized in most of the holes, in particular DDH004, DDH006 and DDH008.

Current drilling programme

The current drilling programme at Tripela, planned for approximately 4,000 metres, commenced on schedule in June and is testing for the deeper porphyry bodies interpreted from the shallower vector drilling programme. Hole DDH011, drilled behind and underneath DDH008, confirmed mineralization and alteration which had previously been intersected in DDH008 at shallower depths. The next hole, DDH012 has intersected a wide zone of intense epidote alteration which we think represents the most significant evidence so far that we are getting closer to a potentially mineralised porphyry. Petrographic work on samples from the hole confirm the host rock as a dioritic intrusion. DDH013, which was designed to test this zone some 120 metres to the west of DDH012, has just been completed and has encountered further evidence of inner propylitic alteration.

Dr. Greg Corbett and Doug Menzies of CMC Consulting Pty Limited (“CMC”) visited our project in PNG between 23rd June and 31st June 2014.  The visit included some three days of core logging alongside our technical team and proved very helpful in terms of the development of our geological model for the project. The resulting CMC report has informed and validated the thrust of our exploration programme at Tripela and its objectives.

In view of the positive results from the recent deeper drilling, we intend to continue the current drilling programme at Tripela through into 2015.

Previous Drilling Results at Junction Target 

Our initial drilling programme at Junction, carried out in mid-2013, comprised two holes, of 841 metres and 736 metres depth respectively.  These two diamond drillholes, the collars of which were some 440 metres apart, were directed at a strong combined chargeability and conductivity geophysical anomaly – a shallower chargeability anomaly which enclosed a deeper conductivity anomaly. While neither hole intersected economic grades or thickness of copper mineralization, important positive indicators of proximity to porphyry systems were observed in each hole and have also been verified by CMC. These indicators do point to the presence of a copper porphyry system at Junction, but possibly at a depth of up to 1,500 metres.  The very extensive and intense silica-sericite-pyrite (“Phyllic”) alteration and the exceptionally well developed pebble dykes which are seen in those two holes are diagnostic of such systems. However, in view of the positive results from the recent drilling at Tripela, we are concentrating our exploration efforts at Tripela and the deeper drilling warranted at Junction will remain on hold for the time being.

EL2051 Mt. Visi

EL2051 is a prospecting licence covering an area of 229 square kilometres in West New Britain Province, including the area around Mt. Visi.  Ridge and spur rock sampling carried out by our regional exploration team in April/May 2014 discovered significant outcrops of high-grade gold and copper.  Many of the high-grade samples were from an area close to the eastern boundary of the licence area.  Sampled rocks include argillic-altered feldspar porphyry and mineralised vein material consistent with an interpretation of porphyry related D veins.  Dickite, a high temperature version of the clay alteration mineral kaolin often found in porphyry systems, was recognised in several samples. A licence application for the ground immediately adjacent to and east of this area was lodged with the licencing authority in Port Moresby in May.

A soil sampling programme on a 400 metre x 200 metre grid over a total area of just over 4 square kilometres was then carried out, wholly within the existing EL2051 area. The soil sampling delineated patchy low-grade gold and copper anomalism.  Further infill soil sampling of four lines of 1,300 metres was then carried out, again wholly within EL2051 area to further define the anomalous zone. Results are awaited.

We expect that the newly applied for licence EL2322 will be issued to us in due course and future work is likely to span the border between the two licence areas. At this stage we anticipate extension of the soil geochemistry grid and subsequent trenching prior to any delineation of initial drilling targets.

EL2146  Ainbul

EL2146 is a prospecting licence covering an area of 283 square kilometres in West New Britain which is immediately contiguous with EL1462 and the Tripela target zone which is currently the subject of the exploration drilling programme described above.  In 2013, our regional exploration team carried out an initial reconnaissance ridge and spur soil sampling programme over approximately 45 square kilometres of the southern portion of EL2146.  The programme highlighted several anomalous zones between 3.5 kilometres and 7 kilometres northeast of the Tripela target. It is not yet clear whether these zones are connected structurally with the Tripela mineralized zone. Follow up rock sampling focused mainly on a series of north easterly running creeks cutting though the anomalous zone.  That fieldwork yielded a significant number of copper bearing in situ rock samples in several clusters.

A total of 262 samples were collected during the programme. Of these 50 returned assays greater than 1,000ppm copper of which 8 graded greater than 10,000 ppm (1%) copper. Highest grades occurred in gossanous andesitic outcrop. Just nine samples returned gold grades greater than 0.5 grams per tonne. The highest of these was 3.5 grams per tonne in a gossanous float sample.

Field work is ongoing at the time of writing with a view to delineating the extent of the surface mineralisation within the licence area and determining any structural link between it and the Tripela target area.

Other Licences

Since we have focused the bulk of our human and financial resources on the exploration programmes detailed above, especially at Tripela, we have carried out reduced exploration activity on our other licences.   We have recently surrendered Exploration Licence 2048, in West New Britain Province, as our preliminary exploration programmes there did not yield any positive results.

Interim Results

Our Income Statement for the six months ended 30 June 2014 shows a loss of $881,222 compared to a loss of $1,189,903 in the same period last year. The loss of $881,222 includes a gain of $53,492 relating to exchange rate differences between 31 December 2013 and 30 June 2014. The loss also includes $177,496 relating to share based payments on share options issued last year and this year.  During the six month period to 30 June 2014, the Group expended in excess of $2,170,000 on its exploration programmes, primarily in West New Britain, compared to $3,278,000 during the same period last year. This decrease in exploration expenditure primarily reflects a reduction in capital expenditure against the prior period and exploration cost savings resulting from a more focused exploration programme in this period. We have been drilling at Tripela virtually continuously since January of this year and expect to continue drilling there into 2015.

A Placing of new shares in the Company and an associated Offer for Subscription, carried out in June and July 2014, raised £3,237,840 before expenses in new equity financing and at 30 June 2014, we held US$4,939,475 in cash.

Conclusion

Our exploration programmes in Papua New Guinea are progressing satisfactorily.

We have established a series of positive indicators in the Tripela drilling area which are consistent with the presence nearby of a porphyry body.  In recently completed boreholes N62DDH012 and N62DDH013 the recognition of the inner propylitic alteration mineral assemblage gives the impetus for the ongoing drilling.  These features and the prospectivity of the Tripela area in general have been independently verified by the renowned porphyry experts, CMC Consultants Pty.

We continue to carry out focused exploration programmes on certain selected target areas on our other licences in New Britain and we have had some very promising early results from these areas which we plan to follow up with more detailed exploration with a view to defining drilling targets. Ground with less favourable initial results has been dropped.

Hugh McCullough, EurGeol., PGeo, Chief Executive Officer of Papua, is a member of the Institute of Geologists of Ireland.  He is a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, March 2006, of the London Stock Exchange. He has reviewed and approved the technical information contained in this announcement.

Enquiries:

Papua Mining plc
Hugh McCullough, Chief Executive Officer +353 1 532 9535
Cenkos Securities plc – Nominated Adviser & Broker
Derrick Lee

Alan Stewart+44 131 220 6939

Square1 Consulting – Financial Public Relations David Bick/Mark Longson+44 207 929 5599

 

 

Papua Mining plc

Interim Results for the six months ended 30 June 2014

Financial Review

Financial Highlights

6 months to

30 June 2014

6 months to

30 June 2013

12 months to

31 Dec 2013

US$

US$

US$

(unaudited)

(unaudited)

(audited)

(Loss) attributable to equity owners

(881,222)

(1,189,903)

(2,089,635)

Cash and cash equivalents

4,939,475

6,872,304

3,626,880

Exploration Assets

15,053,023

10,774,040

12,881,863

Net Assets

19,661,267

16,935,111

16,261,988

 

Papua Mining plc

Condensed Interim Consolidated Statement of Comprehensive Income

For the six months ended 30 June 201

__________________________________________________________________________________________

6 months

to

30 June 2014

6 months

to

30 June 2013

12 months

to

31 Dec 2013

US$

US$

US$

Note

(unaudited)

(unaudited)

(audited)

Administrative costs

(886,823)

(1,210,984)

(2,136,348)

Finance (charges)/income

5,601

21,081

46,713

(Loss) before tax  

(881,222)

(1,189,903)

(2,089,635)

Income tax expense

0

0

0

(Loss) attributable to equity  

(881,222)

(1,189,903)

(2,089,635)

owners for the period        
         
Other comprehensive (loss)/income for the period  

0

0

0

         
         
Total comprehensive (loss)attributable to equity owners

(881,222)

(1,189,903)

(2,089,635)

for the period        
(Loss) per share attributable to equity owners
Basic & Diluted

(0.02)

(0.04)

(0.06)

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

Papua Mining plc

Condensed Interim Consolidated Statement of Financial Position

As at 30 June 2014

 ____________________________________________________________________________

 

6 months

to

30 June 2014

6 months

 to

20 June 2013

12 months

 to

31 Dec 2013

US$

US$

US$

Note

(unaudited)

(unaudited)

(audited)

ASSETS
Non-current assets
Intangible assets

3

15,053,023

10,774,040

12,881,863

Total non-current assets  

15,053,023

10,774,040

12,881,863

Current Assets
Cash and cash equivalents

4,939,475

6,872,304

3,626,880

Total current assets  

4,939,475

6,872,304

3,626,880

Total assets  

19,992,498

17,646,344

16,508,743

EQUITY
Equity attributable to owners
of the parent:
Share Capital

4

7,599,413

5,489,648

5,489,648

Share Premium

13,451,740

11,458,500

11,458,500

Other Reserves

3,087,062

3,087,062

3,087,062

Share Based Payment Reserve

1,250,938

846,833

1,073,442

Retained deficit

(5,727,886)

(3,946,932)

(4,846,664)

Total equity  

19,661,267

16,935,111

16,261,998

LIABILITIES
Current liabilities
Trade and other payables

331,231

711,233

246,755

Total current liabilities  

331,231

711,233

246,755

         
Total liabilities  

331,231

711,233

246,755

         
Total equity and liabilities  

19,992,498

17,646,344

16,508,743

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

 

Papua Mining plc

Condensed Interim Statement of Changes in Equity

For the six months ended 30 June 2014

______________________________________________________________________________

6 months

to

30 June 2014

6 months

to

30 June 2013

12 months

to

31 Dec 2013

US$

US$

US$

(unaudited)

(unaudited)

(audited)

Cash flow from operating activities
(Loss) for the period

(881,222)

(1,189,903)

(2,089,635)

Adjustments to reconcile net profit/(loss)
before tax to cash flow from operating
activities:
Share Based Payments

177,496

262,374

488,983

Currency adjustments

0

0

368,553

Net (decrease)/increase in operating liabilities
-Other liabilities

84,476

183,595

(266,875)

Net cash flow from operating activities

(619,250)

(743,934)

(1,498,974)

Cash flow from investing activities
Purchase of intangible assets

(2,171,160)

(3,278,197)

(5,386,020)

Net cash used in investing activities

(2,171,160)

(3,278,197)

(5,386,020)

Cash flow from financing activities
Proceeds from issuance of ordinary shares

4,103,005

3,898,253

3,898,253

Net cash used in financing activities

4,103,005

3,898,253

3,898,253

Net increase/(decrease) in cash and cash      
equivalents

1,312,595

(123,878)

(2,986,741)

Cash and cash equivalents at the
beginning of the period

3,626,880

6,996,182

6,996,182

Exchange difference on cash and cash equivalents

0

0

(382,561)

Cash and cash equivalents at the      
end of the period

4,939,475

6,872,304

3,626,880

 

 

 

 

Papua Mining plc

Condensed Interim Statement of Changes in Equity

For the six months ended 30 June 2014

 ______________________________________________________________________________

Share

Share

Other

Share Based

Retained

Total

Capital

Premium

Reserves

Payment

Deficit

Equity

 

 

 

Reserve

 

 

US$

US$

US$

US$

US$

US$

 Balance at 31 December 2012

 

5,002,366

 

8,047,529

 

3,087,062

 

584,459

 

(2,757,029)

 

13,964,387

(Loss) for the period

0

0

0

0

(1,189,903)

(1,189,903)

Shares issued during the period

487,282

3,410,971

0

0

0

3,898,253

Share based payments

 0

0

0

262,374

0

262,374

 Balance at 30 June 2013 (unaudited)

 

5,489,648

 

11,458,500

 

3,087,062

 

846,833

 

(3,946,932)

 

16,935,111

(Loss) for the period

0

0

0

0

(899,732)

(899,732)

Shares issued during the period

0

0

0

0

0

0

Share based payments

 0

0

0

 226,609

0

226,609

 Balance at 31 December 2013

 

5,489,648

 

11,458,500

 

3,087,062

 

1,073,442

 

(4,846,664)

 

16,261,988

(Loss) for the period

0

0

0

0

(881,222)

(881,222)

Shares issued during the period

2,109,765

1,993,240

0

0

0

4,103,005

Share based payments

 0

0

0

177,496

0

177,496

 Balance at 30 June 2014 (unaudited)

 

7,599,413

 

13,451,740

 

3,087,062

 

1,250,938

 

(5,727,886)

 

19,661,267

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

 

Papua Mining plc

Notes to the Condensed Interim Consolidated Financial Statements

For the six months ended 30 June 2014

__________________________________________________________________________________

1          Group and Principal activities

For the purposes of these financial statements, the term “PM plc Group” is defined as the companies Papua Mining plc (the “Company”), Papua Mining Limited, Aries Mining Limited and Sagittarius Mining Limited.

 

Papua Mining plc is a public limited company, admitted to trading on AIM, and is incorporated and domiciled in England and Wales.

 

Papua Mining plc acquired 100% of the share capital of Papua Mining Limited on 20 December 2011, however each of the companies of the PM plc Group have effectively operated as a group under common management for a number of years although they did not comprise a statutory group for the entire duration of the comparative period ended 31 December 2011 as defined by International Accounting Standards.

The PM plc Group’s main activity is the exploration for gold and copper resources in Papua New Guinea, as set out in the Directors’ Report.

 

2          Basis of preparation

This interim report on the unaudited consolidated financial statements is for the six month period ended 30 June 2014. It does not include all the information required for full annual financial statements and should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 31 December 2013, which were prepared under International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”).

 

The consolidated financial statements have been prepared under the historical cost convention except for share based payments which are valued at the date of grant.

These unaudited consolidated half-year financial statements have been prepared in accordance with accounting policies consistent with those set out in the Group’s financial statements for the year ended 31 December 2013, which were prepared in accordance with IFRS as adopted by the EU.

The consolidated financial statements incorporate the financial statements of the Company and subsidiaries controlled by the Company as at 30 June 2014.

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2013, prepared under IFRS as adopted by the EU, have been filed with the Registrar of Companies. Those accounts have received an unqualified audit report and did not contain statements or matters to which the auditors drew attention under the Act.

The Group’s consolidated financial statements are presented in US dollars.

 

3          Accounting policies

The Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the Group’s last annual financial statements for the year ended 31 December 2013.

 

4          Intangible assets

 

30 June

2014

30 June 2013 31 Dec 2013
Group

US$

US$

US$

Exploration costs
 
At beginning of period

12,881,863

7,495,843

7,495,843

Additions

2,171,160

3,278,197

5,386,020

At the end of year

15,053,023

10,774,040

12,881,863

The Group’s principal subsidiary undertakings at 30 June 2014, all of which are included in the consolidation, were as follows:

Proportionheld

Class ofshareholding

Nature of business

Country of incorporation

Name of Company

 

 

 

 

Subsidiary undertakings
Papua Mining Limited

100%

Ordinary

Exploration

British Virgin Islands

Aries Mining Limited

100%

Ordinary

Exploration

Papua New Guinea

Sagittarius Mining Limited

100%

Ordinary

Exploration

Papua New Guinea

 

5     Share capital

 

30 June

2014

 

30 June

2013

  31 Dec

2013

Group

Number

Number

Number

 
Issued share capital
Ordinary shares of $0.16 each

47,496,334

34,996,334

34,996,334

30 June 2014

 

30 June 2013

  31 Dec 2013
Issued share capital

US$

US$

US$

Fully paid

7,599,413

5,489,648

5,489,648

7,599,413

5,489,648

5,489,648

Fully paid ordinary shares carry one vote per share and carry the right to dividends. There are no shares held by the entity or its subsidiaries or associates. There are no shares reserved for issue under options and contracts for the sale of shares at the year end.

On the 24th June 2014 Papua Mining plc issued 12,500,000 placing units comprising of one placing share and one placing warrant (the Placing Shares and the Placing Warrants together the “Placing Units”) at a price of £0.20 per Placing Unit. The Placing Warrants are exercisable within 2 years of 27 June 2014 at a price of £0.30 per Placing Warrant.

On the 7th July 2014 Papua Mining plc issued 3,689,200 offer units comprising of one offer share and one offer warrant (the Offer Share and the Offer Warrant together the “Offer Units”) at a price of £0.20 per Offer Unit. The Offer Warrants are exercisable within 2 years of 7 July 2014 at a price of £0.30 per Offer Warrant.

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