Dear Aorere Resources shareholder,
This announcement was released by NZX earlier today.
Aorere Resources Limited
AORERE RESOURCES LIMITED (Formerly Widespread Portfolios)
Financial Result for the year to 31 March 2013
The after tax operating result, including unrealised losses on the share-trading portfolio, was a loss of $809,000 (2012 loss of $2,750,000).
The issued capital of 23,490,449 shares increased to 500,092,160 during the period due to a 20 for one split and shares issued for cash and services provided.
Shareholders’ Funds decreased during the period from $5,175,000 to $4,528,000. Notwithstanding that, the market value of the company increased during the same 12 month period from $2.6 million to $5.5 million. The discount to net assets of 65% became a premium of 14.7%. We believe much of that gain is based on the decision to split our shares.
2013 is a transformational year as Aorere Resources adopts a new name, new chairman and new direction. After nine years as a fully NZX listed company, and coinciding with the appointment of our new chairman Dene Biddlecombe, the board decided to undertake a full review of the company’s investments and its future direction.
Heartened by a more positive resources investment climate in New Zealand and stronger political will, directors decided to refocus the investment strategy on 5-6 early stage oil, gas and minerals projects, seeking investment value rises as those projects de-risk.
Aorere intends to reassess its investment focus from overseas to New Zealand based projects. Existing overseas-based investments (principally, Asian Mineral Resources and King Solomon Mines) will be realised over time. This investment approach recognises the more positive resources environment now evident in New Zealand and the stronger political support for resources that the Government has shown. New projects are intended to include both green-field and more advanced mineral opportunities.
Aorere will initially outsource for relevant expertise and resources to identify deals and manage involvement in these projects. The networks developed and experience gained from establishing and managing Chatham Rock Phosphate will be used to develop a revised investment portfolio.
The new investment focus is intended to result in greater investment diversity and can be implemented using existing infrastructure. It is hoped as a result of these changes there will be more of the kind of success experienced to date with Chatham Rock Phosphate.
Chatham Rock Phosphate
The past 12 months have been immensely satisfying for the progress achieved towards the CRP’s goal of starting mining operations in 2015. Its ongoing work continues to demonstrate the economic, financial and environmental benefits of the project:
It holds New Zealand’s only major rock phosphate deposit- providing at least 15 years supply.
- Based on present projections it is expected to generate annual earnings pre-tax of US92 million.
- It has significant environmental benefits – ultra low cadmium, low carbon footprint, low farm run-off characteristics.
- According to the NZ Institute of Economic Research, it will benefit the NZ economy by $900 million through import substitution, exports and increased economic activity.
Among the highlights achieved over the past year (including those since balance date) were:
- Submission of a draft marine consent application to the Environmental Protection Authority.
- Edison investment research increasing CRP’s valuation to $2 a share from $1.87.
- The Government bringing forward the start date of the EEZ legislation, which will enable CRP to submit a final marine consent application at the end of June.
- The early enactment of the Crown Minerals Act on 24 May 2013 to enable CRP’s mining licence application to be considered under the new law.
- The appointment of three new directors to the board – Boskalis senior executive Ko de Blaeij, marine expert Robert Goodden and CRP principal scientist Robin Falconer.
- The appointment of senior GNS scientist Ray Wood to the role of Chief Operating Officer.
- Continued capital raising of $15.8 million since April 2012, including continuing support by existing shareholders. A total of $21.9 million has now been raised for the project since the prospecting licence was granted in early 2010.
- Strong interest in the project at international conferences where team members are sought-after speakers.
- Regular media coverage of announcements and project progress by industry, national and international media.
- Preparation of numerous scientific reports by NIWA on a range of topics related to the marine environment, for use in the environmental impact assessment supporting the marine consent application to the EPA.
- Preparation of highly sophisticated plume models by world expert Deltares to measure and in assist in minimising the predicted influence of mining activities.
- Continued active progress with Royal Boskalis in the design of a mining system.
- Filing of our mining licence application in September 2012.
- Royal Boskalis investing in a 20% holding.
- Applying for five phosphate prospecting licences off the coast of Namibia.
- The appointment of Najib Moutia (a former senior executive of world leading phosphate producer OCP) as Vice President Strategy and Marketing.
The most significant achievement, from an investor perspective, was the rerating of the company’s share price following several key milestones. At its 46c peak on 9 October 2012, the company’s market value reached nearly $59 million, compared with $8.5 million in January 2012 and $22 million before the issue of shares on 24 September to Royal Boskalis and Subsea Investments.
Driving the rise in the price was CRP submitting its application for a mining licence and the release of the first Edison Research report assessing the company’s value at that stage at $1.87. The share price has since settled at around the 35c mark with a present total market capitalisation of $47.5 million.
A key part of the company’s operations involves building strong relationships with all stakeholders – informing them about the project, seeking their input and keeping them advised of progress; be they non-government organisations, politicians, officials and advisers, iwi and imi, the international scientific and mining and fertiliser industries, the media, and of course shareholders.
This consultation and communication works in tandem with ensuring the company has scientific evidence to support any claims made.
The primary focus in the 6-7 months ahead will be working through the consenting process needed for the marine consent. All going well, approval will be granted by early 2014, leading the way to completing engineering designs and modifying the ship Royal Boskalis will use for mining and transporting the rock phosphate deposit.
Oil & Gas
Aorere has entered into a heads of agreement with Perth based Mosman Oil and Gas relating to the company’s wholly owned interest in petroleum exploration permit 38526 over the Kotuku oil seeps near Greymouth. Mosman is currently undertaking due diligence enquiries on the permit which, if successful, will result in a formal farm-in agreement. Mosman describes Kotuku as “a demonstrated working petroleum system with near term positive cash flow potential from shallow onshore oil development, as well as multiple deeper exploration plays”.
Asian Mineral Resources
The renaissance of Asian Minerals continues with the company’s operations now principally funded by Pala Investments.
The Ban Phuc nickel mine is due to open in June.
The Annual General Meeting of shareholders will be held at 5pm Tuesday 9 July at Mac’s Function Centre (Odlin’s Building), Taranaki Street Wharf, Wellington.
For and on behalf of the Board
Dene Biddlecombe Chris D Castle
Wellington, 30 May 2013