Dear Aorere Resources shareholder,
This announcement was released by NZX earlier
today.
Regards,
Chris Castle
Director
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.
Group Overview
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.
Portfolio Review
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.
AGM
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
Chairman Director
Wellington, 30 May 2013
