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Interim Report 6 months to 30 September 2016

The interim report to shareholders for the six months to 30 September 2016 isavailable as PDF (link)

Financial results 

Your directors submit the unaudited financial statements of Aorere Resources Limited for the six months to 30 September 2016. The trading result for the period was a loss of $521,000 (2015 - $149,000 loss). The increased loss arises after writing off the costs relating to the scoping, financing and acquisition of the Nevada gold project. Depending upon the outcome of that initiative some of these costs may be reversed and capitalised.

Operations Report 

As at 28 November 2016, the market value of our portfolio comprised the following investments.  
Portfolio 

Portfolio Analysis
Asian Minerals 261,332 0.02
Chatham Rock 370,766 0.03
Minor Investments 30,025 0.00
Akura 9,855 0.00
Cash 132,070 0.01
Accruals (10,000) (0.00)
794,038 0.07

Not included in the schedule above is a significant investment (in terms of both time and money) that has been committed by Aorere in putting together a deal whereby, Aorere could end up acquiring an investment in the various Nevada based gold assets presently held by American Innovative Minerals (“AIM”).  

The outcome of this project is expected to be known within a matter of weeks. There are two possible outcomes – one being that we were not able to secure the finance to exercise the option to buy AIM for USD2 million. The other outcome, which is still achievable, is that we have secured enough financial backing, not only to acquire the AIM assets but to also fund the work programme required to increase the size of the gold resources to a substantially larger number than historically measured. This outcome will likely be very positive for Aorere and its shareholders. Negotiations with funding providers are ongoing.    

Earlier this week we announced that Aorere Resources’ proposed Nevada gold investment is showing three times the gold resources previously estimated, following updated resource modelling. 
 
Aorere announced today a significant increase in the Mineral Resource estimate to 1,069,000 ounces at a gold grade of 6.3 grams per tonne on a combined indicated and inferred basis. 
 
The company has also secured an extension for the exclusive purchase agreement until the end of January 2017. 
The discussion below deals with our existing portfolio. 

Chatham Rock Phosphate

Chatham Rock Phosphate (“CRP”) remains the investment that we are most involved with operationally and it presently represents 46.7% of our assets. We are also the third largest shareholder in CRP with 5% and in conjunction with AOR and CRP directors the second largest holder with 8.5%. 

CRP was granted a mining permit in 2013 to develop New Zealand’s only significant source of environmentally friendly pastoral phosphate fertiliser and is now preparing for a revised environmental consent application. 

CRP’s role is focused on delivering a secure and sustainable local supply of low-cadmium phosphate that will reduce fertiliser run-off into waterways, produce healthier soils and shrink fertiliser needs over time.  

The resource has an estimated gross value of $5 to $7 billion, representing one of New Zealand’s most valuable mineral assets and is of huge strategic significance because phosphate is essential to maintain New Zealand’s high agricultural productivity. Local and international investors have contributed more than $40 million to develop the project’s financial viability, environmental benefits and impacts, technical and logistical requirements, local and international product uses. 

CRP proposes to extract up to 1.5 million tonnes of phosphate nodules from the top half metre of sand on identified parts of an 820km2 area on the Chatham Rise, 450km off the west coast of New Zealand, in waters of 400m. The earlier environmental consenting process has established extraction would have no material impact on fishing yields or profitability, marine mammals or seabirds. 
In progressing plans to submit a new application, CRP is working with government officials to seek improvement in the permitting process and iwi, academic, industry and central government input to ensure New Zealand can benefit from an environmentally superior phosphate source.  

Progress is continuing to achieve a Toronto Stock Exchange listing, to provide a more useful share-trading platform for overseas shareholders and facilitate the capital raising needed for the consenting process and beyond. 
CRP is also seeking to own other sustainable rock phosphate sources, to move from being a single project company. 

Asian Mineral Resources

Our investment in Asian Mineral Resources (AMR) dates back to 2000.  
AMR is TSX.V listed, was profitable in cash flow terms, employed until recently over 500 people and was said to be the largest tax payer in Hanoi. It came a long way from being effectively a privately owned exploration company with little cash and few prospects of finding any. Aorere was the catalyst that made the difference, funding the company for several years, introducing substantial investors, and arranging the TSX.V listing.      

AMR mined the Ban Phuc nickel deposit for the last three years at an accelerated production rate and has now exhausted the high grade massive sulphide deposit. The surrounding disseminated sulphide deposit is not economic to mine so, a decision was made to transition the operation into care and maintenance. Management are now continuing to secure the operational assets and establish on-site detailed care and maintenance compliance and reporting protocols and processes. 

AMR has commenced review and interpretation of its low level exploration activities which includes field mapping, trenching and soil sampling. Following the assimilation and interpretation of this new information AMR will be in a position to revise the project ranking and priorities of its 26 initial exploration prospects.  
 
Further design planning and analysis of the Ban Phuc disseminated resource will continue with AMR looking to conclude a preliminary economic assessment level report by end of QTR 2 2017.  

Akura

Akura holds certain oil and gas leases in Fiji that are presently in the process of being renegotiated. Aorere holds 7.5% of Akura and has board representation.  

The Future

We hold stakes in two companies that still have significant forward momentum. Depending on the outcome of the present Nevada gold negotiations we may have a new project, or we may not, in which case we will focus on supporting both Chatham and the new Asian Minerals.  

Chris Castle, Managing director
Peter Liddle,  Chairman
22 December 2016

Aorere Resources Limited extends option to acquire Nevada gold assets

7 November 2016

 
NZX Market Announcement

Aorere Resources Limited extends option to acquire Nevada gold assets 

In May 2016, Nevada Gold Limited (a wholly owned subsidiary of AOR) (NGL) entered into a conditional term sheet securing the exclusive right to acquire American Innovative Minerals LLC (AIM) of Nevada, USA for US$2 million.  

AIM holds the rights to the Fondaway Canyon Gold Project (the Fondaway Project), as well as a number of other advanced and early stage mining and exploration projects. The purchase of AIM was conditional upon the following:

(a)     Due diligence: NGL carrying out a due diligence assessment of AIM to the satisfaction of its board; and 

(b)     Finance: NGL securing financing of US$3 million to satisfy both the US$2 million purchase price and AIM’s immediate working capital requirements.  

NGL secured exclusivity until 31 October 2016 to acquire AIM (subject to the conditions noted above). Further details regarding AIM and the Fondaway Project were released to market on 16 and 26 May 2016 and are available on Aorere’s website: www.aorereresources.co.nz.”

AOR is pleased to advise that the exclusivity period has now been extended to 30 November 2016 with a view to the acquisition being completed on or before that date. While the above conditions remain outstanding, the due diligence assessment is virtually complete and steady progress is being made toward securing the funding required to satisfy the finance condition.

AOR will update the market on the transaction further in due course. 

Regards, 

Chris Castle
Managing Director

chris@aorereresources.co.nz

Aorere Resources Limited: Allotment of Shares

29 August 2016


NZX Market Announcement 

Aorere Resources Limited: Allotment of Shares 

Aorere Resources Limited (NZX: AOR) advises that it has issued 80,833,333 ordinary shares (Shares) to qualified investors at an issue price of $0.0009 per Share, raising $72,750 in new capital. 

One of the qualified investors has also committed to investing a further $62,250 into AOR under the Rights Issue Offer, which is scheduled to open on Wednesday this week.

Full details of the allotments are set out below. 

On behalf of the Board,

Chris Castle
Managing Director
chris@aorereresources.co.nz

NZX Market Announcement: Aorere Resources Limited: Rights Issue

9 August 2016

NZX Market Announcement

Aorere Resources Limited: Rights Issue

Aorere Resources Limited (NZX: AOR) advises that it intends to make a rights issue offer (Offer) to all AOR shareholders. The Offer price will be $0.0009 (0.09 cents) per share, to raise up to $685,000 (approx.) in aggregate. 

The pricing of the Offer is at a significant discount to recent AOR share trades which have ranged between 0.2 and 0.4 cents since the AOR private placement fundraising programme of .09 cents commenced.  The volume weighted average trading price during this fundraising period has been .224 cents, despite the fundraising at .09 cents, likely indicating strong investor support for the Company’s Nevada Gold strategy. The Offer gives all shareholders the same opportunity (at a 59.8 discount to recent trading prices) to support Aorere’s Nevada Gold project.

Shareholders recorded on the register as at the record date will receive renounceable rights to one new share for every existing share held. The rights will not be quoted on market.

Existing shareholder and retail investors may also apply for new shares subject to shortfall availability.

AOR intends to use the proceeds from the Offer, along with the capital raised from the recent placements, to finance costs in relation to the proposed acquisition of American Innovative Minerals LLC (AIM) through its wholly owned subsidiary Nevada Gold Limited (NGL) (including the compliance costs associated with the listing of NGL on the Toronto Stock exchange through a listed shell company).

The timetable for the Offer will be confirmed and advised to the market next week. It is intended that the Offer will be completed by the end of September.

On behalf of the Board,

 

Chris Castle
Managing Director
chris@aorereresources.co.nz

Aorere Resources Limited: Allotment of Shares

2 August 2016

 
NZX Market Announcement

Aorere Resources Limited: Allotment of Shares

Aorere Resources Limited (NZX: AOR) advises that it has issued 59,511,112 ordinary shares (Shares) to qualified investors at an issue price of $0.0009 per Share, raising $53,560 in new capital.

As previously announced to the market, the capital raised will be used to cover the compliance costs associated with the listing of Nevada Gold Limited, a wholly owned subsidiary of AOR, on the Toronto Stock exchange through a listed shell company. 

Full details of the allotments are set out below.

On behalf of the Board,

Chris Castle
Managing Director
chris@aorereresources.co.nz

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Intention to make Private Placements

9 July 2016

NZX Market Announcement

Intention to make Private Placements

Aorere Resources Limited (NZX: AOR) is intending to raise capital from qualified investors by way of placing approximately $126,000 of new shares (New Shares) at $0.0009 (0.09 cents) per share.

AOR intends to use the proceeds to finance costs in relation to the proposed acquisition of American Innovative Minerals LLC (AIM) through its wholly owned subsidiary Nevada Gold Limited (NGL). In particular, AOR has been closely investigating the listing of NGL on the Toronto Stock Exchange (TSX) to help finance the AIM acquisition and ongoing working capital requirements.

As first announced to market on 16 May 2016, AOR secured the exclusive right to purchase AIM which holds multiple exploration projects in resource-rich Nevada, including the flagship Fondaway Canyon Gold Project. AOR has been exploring a number of strategies to finance the acquisition of AIM and its initial working capital requirements.

Following two months testing of the investment market, AOR considers the best way to fund and develop the AIM project is to provide a listed company vehicle on a recognised stock market. A listing on TSX will provide further avenues of financing, with the TSX being a leading exchange for mining stocks, and exit opportunities for investors. Accordingly, AOR will use the raised capital to cover the compliance costs associated with the listing of NGL on TSX through a listed shell company (the TSX Listing).

Following the TSX Listing, NGL will move immediately to secure a financing to acquire AIM and proceed with the development of the project.

Extended Exclusivity Period

As announced to market on 16 May 2016, AOR signed a conditional term sheet securing the exclusive right to purchase AIM for the agreed purchase price of $2 million. The parties have agreed to extend the exclusivity arrangements to 31 October 2016. This will provide NGL with additional time to carry out due diligence, secure finance to fund the acquisition and finalise a sale and purchase agreement with the vendors.

 

On behalf of the Board, 

Chris Castle
Managing Director
chris@aorereresources.co.nz

Aorere Resources announces board changes

1 June 2016

Aorere Resources Limited (NZX:AOR) wishes to advise that Dene Biddlecombe has resigned as a director of AOR in order to pursue other opportunities. We acknowledge his outstanding contribution since he was appointed to the Board in September 2012 and wish him the best for the future.

The Board of AOR has resolved to appoint, as a new director, Peter Liddle. Peter is presently the CFO and Company Secretary of Antipodes Gold (previously Glass Earth Gold) and has over 35 year’s experience variously as a director and senior manager of a number of listed and unlisted resource sector companies.  Peter will be appointed chairman of directors at our next board meeting on 8 June 2016. The Board considers that Peter is an independent director for the purposes of the NZX Main Board Listing Rules.

On behalf of the Board,

 

Chris Castle

Managing Director

chris@aorereresources.co.nz

NZX Announcement: Final announcement for the year to 31 March 2016

Final announcement for the year to 31 March 2016
Financial Result

Your directors submit the audited financial statements of Aorere Resources Limited for the 12 months to 31 March 2016. The trading result for the period was a loss of $911,000 (2015 loss, $3.917 million). 

Portfolio Review
As at 20 May 2016, our portfolio comprised the following investments, with our Chatham Rock Phosphate shareholding presently the dominant investment representing 46% of total assets.

Portfolio Review

Chatham Rock Phosphate
 

Chatham Rock Phosphate (CRP) is the investment that we are most involved with operationally. After taking up our full entitlement in the recent rights issue, we are now the third largest individual shareholder in CRP with 6%. 

CRP holds a granted mining licence on the Chatham Rise and is pursuing five exploration licences which are located offshore Namibia.  These licenses were first applied for in mid-2012.

Corporate Milestones
 

As reported in CRP’s regular shareholder updates and other announcements made during the year, CRP is actively moving on a number of fronts despite the reduced size of the team.
Impressively CRP has continued to raise the money they needed to remain viable and to maintain their momentum.
Over the past few months there has been a steady stream of support from CRP shareholders and new investors keen to support their plans.  In total, Chatham has now sourced $3 million in the last 14 months.  This is a remarkable achievement given both the major setback in CRP’s circumstances in March last year and the weak resource market conditions prevailing during the past 12 months. 
CRP’s funds position will be improved further when they merge with cashed up Antipodes Gold, in order to list on the Canadian TSX-V market.  Antipodes is listed in New Zealand so CRP shareholders will enjoy the best of both worlds.
The merger is expected to proceed as soon as CRP completes its recently announced share purchase plan and is expected to be completed by 30 September 2016. 
 
Operational Focus
 
CRP executives have been steadily working through the steps required to resubmit their application for a Marine Consent. These include:
Ø  Reviewing the previous application to EPA, as part of this CRP commissioned a 360 degree review from the key players involved in the last application.

Ø  Working with officials in various government ministries to seek efficiencies in the permitting process – the recently announced Resource Legislation Amendment Bill has the potential to achieve these.

Ø  Keeping a close watch on the actions of Trans Tasman Resources (TTR). Encouragingly TTR has already announced it intends to reapply for a Marine Consent, and it appears likely this application will proceed under existing legislation.

Ø  Investigating and advancing trading relationships with other participants in the phosphate sector.

Ø  Advancing towards sourcing reactive rock phosphate from several well located on-shore deposits.

Ø  Continuing to build farming sector, academic, industry and central government support for the Chatham Rise project and for the use of Chatham rock phosphate as a sustainable, environmentally friendly phosphorous source.

Ø  As part of this CRP has commissioned further pot tests to be followed by field trials.

Ø  Attempting to resolve the fee dispute with EPA (unsuccessful so far).

Ø  Seeking a refund of overcharged mining permit fees (reportedly now very likely to succeed).

Ø  Being actively involved and frequently invited to present at fertiliser, resources sector and environmental conferences.

In summary, CRP is in very good heart, is well funded and has increasing forward momentum.

Asian Mineral Resources

AMR is one of the few new sources of nickel sulphide supply globally. AMR commenced commercial production from its Ban Phuc nickel project in Vietnam in mid-2013. The Ban Phuc project currently produces over 8,600 tonnes of nickel and 4,000 tonnes of copper per annum contained in concentrate, plus a cobalt by-product.
 
In addition to in and near-mine expansion projects, Ban Phuc provides a cash-generative operating platform from which AMR can continue to focus on developing a new nickel camp within its 150km sq of concessions located throughout the highly-prolific Song Da rift zone, where AMR has a number of advanced-stage nickel exploration targets.
 
Financial and Operating Results for Year Ended December 31, 2015
 
AMR recently reported the following financial and operational update for the full year ended December 31, 2015.
 
Operational Highlights
 
·       18% above target milled production of 447,746 tonnes (379,600 tonnes FY 2015 target)

·       8,607 tonnes of nickel contained metal in concentrate (FY2014: 6,854 tonnes)

·       4,011 tonnes of copper contained metal in concentrate (FY2014: 3,439 tonnes) and

·       Above target nickel mill recoveries of 87.4% (FY2014: 85.2%)

·       All mine capital development completed ahead of schedule in 2015

·       Tailings dam construction completed for full current life of mine

 
Health, Safely and Environment

 
·       Continued ongoing safety performance exceeding annual targeted rates

·       No reportable environmental incidents.

 
Exploration

 
·       Kingsnake geological mapping and trenching identifies 1.2km mineralized zone at surface with surface EM identifying the presence of EM conductors at depth.

Commenting on the year end performance, CEO Evan Spencer said:
·       “We are extremely pleased with AMR’s performance given the extremely low commodity pricing environment throughout 2015

·       Operational performance continued to achieve increased productivities enabling AMR to exceeded target production and sales volumes

·       Despite the sustained drop in nickel price throughout 2015, increased production levels combined with our strong focus on efficiencies and cost reductions strategies enabled us to maintain cash flow going forward

·       At the same time, AMR remains committed to pursuing growth opportunities, on our near-mine exploration and regional exploration targets with a priority focus on Kingsnake where exploration activities remain ongoing”

 
From our viewpoint, AMR is a very well managed company and remains a quality investment (if presently somewhat over-discounted by the market) with exciting prospects for the future.
 
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.  After selling a substantial part of our holding at higher prices prevailing before the oil price crash, we now hold a 2.6% shareholding in Mosman with a present market value of $72,000 at 0.72p.

Mosman is an Australia and New Zealand focused oil exploration and development company with a strategy to build a sustainable mid-tier oil and gas business by acquisition and organic growth. Current exploration projects include the following permits which are 100% owned:

·       Petroleum Creek Project, New Zealand - the project is a 143 sq. km project located near Greymouth on the South Island in the southern extension of the proven Taranaki oil system.

·       Taramakau Permit, New Zealand – the permit (990 sq. km onshore) surrounds the Petroleum Creek Project and shares similar geological characteristics and shares similar prospective play types. 

·       Murchison Permit, New Zealand – the permit (517 sq. km onshore) located approximately 100 kilometres north of Petroleum Creek has a 13 TCF contingent resource identified.

·       Amadeus Basin Projects, Australia. Mosman owns two granted permits and one application in Central Australia which total of 5,458 sq. km. The Amadeus Basin is considered one of the most prospective onshore areas in the Northern Territory of Australia for both conventional and unconventional oil and gas, and hosts the producing Mereenie, Palm Valley and Surprise fields.

In a recent news release, the Mosman chairman made the following comments:

 “2015 was a challenging year for the sector with continued oil price weakness and volatile equity capital markets, and as a result Mosman implemented a revised strategy and operational plan changing from its original focus on exploration (including drilling 3 wells) to seeking and securing a production asset. The revised plan was implemented to take advantage of the opportunity to purchase production assets, thereby providing cash flow and a medium term sustainable business model.  The revised strategy was actioned and in September Mosman signed a contract to acquire the South Taranaki Energy Project ("STEP"'), an existing producing asset in New Zealand. However, the further subsequent significant reduction in the oil price in late 2015 and early 2016, together with related difficulties in obtaining government approvals, led to the cancellation of that acquisition.

As a result of the Board's actions to mitigate against further expenditure, Mosman remains in a sound financial position.  Going forward, given the ongoing uncertainties associated with the current oil price and the lack of clarity on how long oil prices may remain at current depressed levels, and the continuing volatility in equity capital markets, the Board is also cognisant that it has a responsibility to continue to monitor and evaluate the effectiveness of its revised business strategy and plans over its current portfolio.  The Board has also determined that it is prudent to evaluate other suitable opportunities to enhance shareholder value and this process is underway”

Given its nominal market value we consider Mosman an investment well worth holding.

Akura

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.

Breaking News – Investment in Nevada gold project

In November last year, Aorere Resources Limited  through its relationship with local mining consultant Campbell McKenzie (Kenex Knowledge Systems) and Montana based Childs Geoscience Inc, happened across private group AIM (Nevada based American Innovative Minerals LLC), which was unexpectedly on the market sale due to the untimely deaths of its two geologist/prospector principals, Alan Branham and Don Decker.
Aorere, who invest in selected early stage minerals projects, subsequently undertook due diligence on the project.
AIM, and the flagship Fondaway Canyon Gold Project (“Fondaway”) in particular, fulfilled Aorere’s  requirements of an advanced gold project, defined high grade resources, excellent infrastructure, in a safe haven with no known environmental issues.
This encouraged Aorere to assemble a technical team to expedite the purchase of AIM, with the objective of creating value by overseeing the immediate development of Fondaway. Negotiations have been successful and Aorere (through a newly incorporated company, Nevada Gold Limited) now holds an option to the 100% ownership of AIM and Fondaway.  
Fondaway has indicated and inferred resources estimated to contain over 361,000 oz gold, averaging 7.1g/t gold, and showing growth potential estimates exceeding 1M oz gold, a net present value (8%) > $US 100M with possible gold production within three years.
Nevada is mining friendly, Fondaway has no identified environmental issues; infrastructure is simple in a district where access to professional and highly skilled labour and equipment is excellent.
The AIM purchase includes a portfolio of ten additional exploration projects in or adjacent to Nevada’s major gold districts, providing a pipeline for developing additional resource
Aorere is presently offering the opportunity to qualified investors to invest in Nevada Gold Limited, in a low sovereign risk major gold mining district, in Nevada USA.
Outlook

After a difficult year, we believe Aorere is now regaining momentum and prospects are improving on a number of fronts. 
 
Chris Castle                                                            Dene Biddlecombe
Managing Director                                             Chairman of Directors