Your directors submit the audited financial statements of Aorere Resources Limited for the 12 months to 31 March 2015. The trading result for the period was a loss of $3.917 million. (2014 loss, $106,000).
As at 22 May 2015, our portfolio comprised the following investments
Mosman Oil and Gas
In late 2013 Aorere converted a 100% interest in onshore West Coast oil prospect (Petroleum Creek) into approximately 10% of AIM listed Mosman Oil and Gas Limited, which now holds the oil interest. We now hold an 8.7% shareholding in Mosman with a present market value of $857,000 at 4.6p.
Mosman holds the following broad portfolio of oil and gas interests and we look forward with confidence to seeing these projects progress.
Petroleum Creek - 100% of permit PEP 38526, a 143 sq. km low cost onshore exploration project located on the South Island.
Taramakau, Murchison and East Coast – awarded as part of the 2014 Block Offer, increased exploration area in NZ from 143 sq km to 2,317 sq km.
Officer Basin - 25% of permit, 22,527 sq. km with significant exploration potential.
Amadeus Basin - 100% two permits and one application in Central Australia, 5,458 sq. km one of the most prospective onshore areas in Northern Territory.
Otway Basin - 30% of VIC/P62 in the Otway Basin, relatively shallow water.
Chatham Rock Phosphate
Chatham Rock Phosphate (CRP) is the investment that we are most involved with operationally even though it presently represents only 22% of our assets. After taking up our full entitlement in the recent rights issue we are now the largest individual shareholder in CRP with 10.9%.
CRP holds a granted mining licence on the Chatham Rise and is pursuing five exploration licences offshore Namibia, first applied for in mid-2012.
Recently CRP’s marine (environmental) consent application was declined and CRP’s board has spent the past three months evaluating the decision to determine the most appropriate path forward. CRP has dramatically scaled down operations until such time as a resubmission of the marine consent application is deemed appropriate.
Regardless of the future of CRP’s Chatham Rise project, the CRP board has determined the company will evolve from its single project focus into a more diversified company, principally involving other phosphate projects, both on and offshore.
Accordingly, due diligence is being undertaken in respect of a number of phosphate assets based both on and offshore in Australasia, North Africa, Southern Africa, Canada, USA and South East Asia. They range from green-field exploration projects, to those in development and near-to-production. Other marine mining opportunities involving other commodities will also be evaluated by the CRP team.
The main drivers for this evolution in the CRP business strategy is not only the desire to reduce investor risk, but also to take advantage of (and therefore retain) the significant institutional knowledge and expertise within the Chatham management team and partner organisations. This knowledge spans marine and environmental science, the development of offshore mining projects, and extensive knowledge of the phosphate market, both locally and internationally.
Chatham directors consider (and we concur) that the company’s ability to finance the eventual resubmission of the marine consent application will be enhanced if both existing CRP shareholders and potential new investors don’t face the same binary EPA-decision risk as in the past.
The acquisition and development of these new projects within CRP would be significantly easier if CRP was listed on a more recognised and liquid overseas stock exchange. The Toronto stock exchange is the most logical one as it is a leading exchange for mining stocks and also has a major fertilizer component.
CRP directors considered various options for the most cost effective way of listing and identified a reverse takeover of an existing TSX.V listed stock as most effective. That process has started and CRP’s identified partner Antipodes Gold, is currently undertaking due diligence on CRP. Aorere is supportive of this reverse takeover as a means to list Chatham on the TSX.V
Asian Mineral Resources
Asian Mineral Resources’ nickel mine in northern Vietnam has now been operating for two years, after commissioning in May 2013. In April AMR announced that in the year to December 2014 it had beaten production and recovery targets and had achieved a strong cash flow and a maiden net profit. Significantly, AMR had also been awarded a mineral exploration licence in July, 2014, covering 49 square kilometres of highly prospective ground surrounding the existing Ban Phuc mine.
Commenting on the year-end performance, chief executive officer Evan Spencer said:
"We are extremely pleased with AMR's performance. The operations ramp-up is now complete and we have exceeded target production and sales. Also, despite a recent drop in nickel prices, our robust management of mining processes and cost reduction strategies will enable us to maintain solid cash flow going forward. At the same time, we are continuing to pursue multiple growth opportunities, with a particular focus on our advanced near-mine and regional exploration targets, including a study which is being conducted on the disseminated resource and the results are expected by June."
Aorere has 8% of Fiji oil explorer Akura, which is presently re-applying for oil exploration licences in Fiji
Earlier research and exploration by Akura has shown Fiji to have a high potential for the discovery of oil in onshore anticline traps associated with natural gas seepage, some dominated by butane. The main anticline target in the Nadi area has a projected length of 24 km, of which 12 km is coincident with natural gas seepage and such structures are capable of producing in excess of 100 million barrels of oil.
To complement our Mosman and CRP investments, your directors recently made an offer to Antipodes Gold to acquire their interests in two Waihi located exploration joint ventures with Newmont Waihi. Newmont itself has pre-emptive rights in respect of both JVs but has yet to advise whether or not these rights will be exercised.
If they do not, and Aorere is able to proceed with the acquisitions we will hold interests in two very interesting, strategically located exploration tenements within shouting distance of the existing mining operation. While there will be associated work programme commitments we believe that these should be able to be financed by further equity raises. This confidence is based upon published exploration results achieved to date.
After a pretty tough year, we believe Aorere is now has regaining momentum and prospects are improving on a number of fronts.
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