TIDMCRHL
RNS Number : 4657A
Creat Resources Holdings Ltd
20 March 2013
20 March 2013
Creat Resources Holdings Limited
("CRHL" or "the Company")
Interim Results for the six months ended 31 December 2012
Creat Resources Holdings Limited ("CRHL") (AIM: CRHL)is pleased
to announce its interim results for the six months ended 31
December 2012 as shown below. The full Interim Report and Accounts
will be available on the Company's website (www.creatresources.com)
shortly.
For further information please visit www.creatresources.com or
contact:
Creat Resources Holdings Limited
Morris R. Hansen, Company Secretary: Tel +613 6471 6228
Daniel Stewart & Company
Paul Shackleton, David Hart: Tel +44 20 7776 6550
Directors' Report
The directors of Creat Resources Holdings Limited (CRHL) submit
herewith the financial report of Creat Resources Holdings Limited
and its subsidiaries (the 'Company') for the half-year ended 31
December 2012. This report is intended to be read in conjunction
with the 2012 Annual Report.
The Registered Office and principal place of business is 262
Main Street, Zeehan, Tasmania 7469 Australia.
In order to comply with the provisions of the Corporations Act
2001, the directors report as follows:
The names of the directors and company secretary in office
during or since the end of the half-year and up to the date of this
report are:
Directors and Company Secretary
Name Role Appointed
Mr Derek Leung Executive Chairman, 10 July 2012
Managing Director and Chief
Executive Officer
Mr Tad Ballantyne Deputy Chairman and Non-Executive
Director
Mr Philip Simpson Non-Executive Director
Mr Morris Hansen General Manager,
Company Secretary & Executive
Director
Ms Mei Chen Executive Director & Chief Financial 10 July 2012
Officer
The above named directors and company secretary have been in
office since the start of the half-year unless otherwise
stated.
Past Directors and Company Secretaries
Name Role Term
Dr Yuewen Zheng Executive Chairman, Resigned 10 July 2012
Managing Director
and Chief Executive
Officer
Mr Xiaojian Non-Executive Director Resigned 10 July 2012
Ren
Principal activities
The principal activities of the Consolidated Entity during the
financial period were minerals exploration and the acquisition,
exploration and operation of mineral properties in Australia. The
Company was admitted to trading on AIM on 6 March 2007. The Company
initially focused on zinc, lead and silver deposits in western
Tasmania, Australia. During the year the company entered into a
sale arrangement for its Tasmanian tenement package. Subsequent to
the deal being signed the company held an Extraordinary General
Meeting of its members on the 13(th) November, 2012 where the
members passed all resolutions relating to the sale of the
tenements and the adoption of a new investment policy. The company
is currently finalising the sale arrangement with the purchaser and
is awaiting signing of the transfer documents in accordance with
current local government policy.
Operating Results
The consolidated loss of the Company for the half-year after
providing for income tax amounted to $3,995,817, (2011 restated
loss: $1,963,783).
Review of Operations
Galaxy Resources Limited, Investment Asset
Galaxy's Mt Cattlin Mine in Western Australia.
Galaxy Resources Limited ("Galaxy") is a Western Australian
S&P / ASX 300 Index company which plans to become one of the
world's leading producers of lithium compounds - the essential
components of rechargeable batteries for powering manufactured
products like the world's fast expanding fleet of hybrid and
electric cars. Galaxy's Mt Cattlin mine plans to be the world's
second largest producer of lithium mineral concentrate globally,
and through the development of its 17,000 tpa lithium carbonate
plant in Jiangsu province, Galaxy expects to be one of the largest
lithium compound producers in China. Lithium compounds such as
lithium carbonate are forecast to be in short supply against high
future demand due to advances in long life batteries and their use
in sophisticated electronics including mobile phones and computers.
Galaxy has positioned itself to meet this lithium demand through
vertical integration, by not only mining the lithium, but also by
downstream processing to supply lithium carbonate to the expanding
Asian market. Galaxy is also positioning itself for growth via
mergers and acquisitions and in line with this completed the merger
with Lithium One of Canada early in the period.
The Company's shareholding in Galaxy at the start of the
half-year was 38,091,616 shares or 10.56% of issued shares. During
the term the company made the decision to sell up to 1,000,000
Galaxy shares to fund operations until the completion of the
tenement sale transaction. To date the company has affected the
sale of 506,704 shares. The company shareholding in Galaxy
Resources now stands at 37,584,912 shares or 6.43% of issued
shares. Substantial changes in the companies percentage of total
issued shares has occurred throughout the year due to Galaxy's
various placements completed during the period but had no effect on
the number so shares held by the company. CRHL still retains 2
director positions on Galaxy's board.
The market value of the Company's investment in Galaxy has
dropped during the half-year. The fair value for the investment in
Galaxy Resources Limited based on the Australian Stock Exchange
share price at 31 December 2012 is $14,846,040 (30 June 2012:
$22,283,595).
Galaxy's Jiangsu Lithium Carbonate Project in Jiangsu, PRC.
Galaxy Jiangsu is 100% owned by Galaxy and is intended to
provide lithium to the China market as well as internationally to
address the increasing demand for green energy. The Jiangsu plant
has continued to progress with its twelve month ramping process to
full production. During the period a serious incident occurred at
the Jiangsu plant which caused the plant to be shut down for
investigation, rectification and re-commissioning. The plant is
expected to be back in operation by early March 2013.
Galaxy's Sal De Vida Project
Sal De Vida was acquired through the Lithium One merger and is a
lithium brine deposit located in Argentina in the Lithium Triangle
in South America. Work has commenced on this project and is
expected to be a source of high grade low cost lithium for the
company and will become the company's flagship deposit.
Galaxy's Mt Cattlin Project
On the 12(th) July, the company announced a temporary closure of
the Mt Cattlin operations in Western Australia due to high levels
of internal stockpiles. The operations are to be shut down on a
temporary basis until the Jiangsu plant is operating at full
capacity and reduces existing stockpiles at which time Mt Cattlin
will recommence operations.
Mineral Assets, Zeehan, Western Tasmania
Exploration Activities
During the half year, the company entered into an agreement to
sell all of its Tasmanian mineral interests to Australian Hualong
Pty Ltd. These interests consist of four exploration licences and
three retention licences;
Exploration Licences Retention Licences
EL18/2003 RL1/2008
EL20/2002 RL3/2009
EL21/2004 RL4/2009
EL30/2002
At an Extraordinary General Meeting of the members all
resolutions relating to the sale of the tenements was passed. The
company has since taken the necessary steps to progress the deal
which is expected to be finalised in or shortly after the first
quarter of 2013.
The company continues to maintain the licences and meet its
commitments with regard to exploration and rehabilitation.
Proposed sale of the Company's mining assets
On 17 October 2012, the Company and its wholly owned subsidiary
ZZ Exploration Pty Limited, entered into a conditional agreement
with an unrelated third party to dispose of all the existing mining
assets, including all exploration and retention licences currently
held by the Group in Tasmania, Australia together with all
associated plant and equipment for a total consideration of AUD
$4million in cash. All commitments and obligations attaching to the
licences, including the decommissioning and rehabilitation
provision, transfer with the mining assets.
Events Subsequent to Balance Date
Proposed sale of the Company's mining assets
The sale of mining tenements was finalised on 21 December 2012
pending ministerial approval. Approval is expected in or shortly
after the first quarter of 2013.
Auditor's Independence Declaration
The auditor's independence declaration, as required under
section 307C of the Corporations Act 2001, is included on page 16
of the half-year report.
Signed in accordance with a resolution of directors made
pursuant to s.306(3) of the Corporations Act 2001.
On behalf of the Directors
Derek Leung
Executive Chairman, Managing Director
and Chief Executive Officer
Dated this 15(th) day of March 2013
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2012
Consolidated
Half-year Ended
----- --------------------------
Note 31 Dec 2012 31 Dec 2011
----- ------------ ------------
$ $
Continuing Operations Restated
Revenue 87,704 112,743
Other Gains and Losses 3 (7,747,200) 5,734,845
Gain on reversal of impairment 6,081,651 -
Exploration and Evaluation Costs
Expensed - (290,787)
Depreciation Expense (71,672) (137,944)
Finance Costs (1,669,121) (3,548,123)
Administration Expenses (163,025) (432,154)
Gain on Disposal of Assets 14,221 30,569
Employee Expenses (345,545) (887,665)
Site Operations (132,001) (746,773)
Other Expenses (50,829) (84,374)
Loss before Tax (3,995,817) (249,663)
Income Tax Benefit - -
Loss for the Period (3,995,817) (249,663)
============ ============
Other Comprehensive Income
Share of other comprehensive income
of associate - -
Reserve - AFS Investment - (1,714,123)
Other Comprehensive Income for
the Period
(net of tax) - (1,714,123)
------------ ------------
Total Comprehensive Loss for the
Period (3,995,817) (1,963,783)
============ ============
Earnings Per Share
Basic (cents per share) (0.60) (0.29)
Diluted (cents per share) (0.60) (0.29)
The accompanying notes form part of these condensed consolidated
financial statements which must also be read in conjunction
with the 2012 Annual Report.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2012
Consolidated
------ ----------------------------
Note 31 Dec 2012 30 June 2012
------ ------------- -------------
$ $
Assets Restated
Current Assets
Cash and Cash Equivalents 126,086 92,797
Trade and Other Receivables 34,120 61,269
Other Current Assets 113,106 103,497
Other Financial Assets 2,500,000 -
------------- -------------
2,773,312 257,563
Asset held for sale 7 6,854,474 -
------------- -------------
Total Current Assets 9,627,786 257,563
------------- -------------
Non-Current Assets
Property, Plant and Equipment 265,295 867,598
Exploration and Evaluation Asset - 250,000
Other Non-Current Assets 14,846,040 22,283,595
Other Financial Assets - 2,500,000
------------- -------------
Total Non-Current Assets 15,111,335 25,901,193
------------- -------------
Total Assets 24,739,121 26,158,756
------------- -------------
Liabilities
Current Liabilities
Trade and Other Payables 725,447 396,857
Financial Liabilities 4 41,695,958 39,448,365
Provisions 35,041 1,279,380
------------- -------------
42,456,446 41,124,602
Liabilities held for sale 7 2,854,474 -
Total Current Liabilities 45,310,920 41,124,602
------------- -------------
Non-Current Liabilities
Provisions - 1,610,136
------------- -------------
Total Non-Current Liabilities - 1,610,136
------------- -------------
Total Liabilities 45,310,920 42,734,738
------------- -------------
Net Liabilities (20,571,799) (16,575,982)
============= =============
Equity
Issued Capital 69,408,416 69,408,416
Reserves 344,531 344,531
Accumulated Losses (90,324,746) (86,328,929)
------------------- -------------------
Total Deficit (20,571,799) (16,575,982)
=================== ===================
The accompanying notes form part of these condensed consolidated
financial statements which must also be read in conjunction with
the 2012 Annual Report.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2012
Issued Accumulated Other Total
Capital Losses Reserves
----------- ------------- ------------ -------------
$ $ $ $
Balance at 1 July
2011 69,408,416 (76,812,378) 344,531 (7,059,431)
Loss for the Period
(restated) - (249,663) - (249,663)
Total comprehensive
income for the period - (249,663) - (249,663)
Reserve - AFS Investment - - (1,714,123) (1,714,123)
Balance at 31 December
2011 (restated) 69,408,416 (77,062,041) (1,369,592) (9,023,217)
=========== ============= ============ =============
Balance at 1 July
2012 (restated) 69,408,416 (86,328,929) 344,531 (16,575,982)
Loss for the Period - (3,995,817) - (3,995,817)
----------- ------------- ------------ -------------
Total comprehensive
income for the period - (3,995,817) - (3,995,817)
Reserve - AFS Investment - - - -
Balance at 31 December
2012 69,408,416 (90,324,746) 344,531 (20,571,799)
=========== ============= ============ =============
The accompanying notes form part of these condensed consolidated
financial statements which must also be read in conjunction with
the 2012 Annual Report.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2012
Consolidated
Half-year Ended
31 Dec 2012 31 Dec 2011
------------ ------------
$ $
Cash Flows from Operating Activities
Receipts from Customers 61,801 39,464
Payments to Suppliers and Employees (561,331) (2,559,700)
Net Cash used in Operating Activities (499,530) (2,520,236)
============ ============
Cash Flows from Investing Activities
Purchase of Property, Plant & Equipment - (5,294)
Purchase of Exploration Licence (10,000) -
Proceeds from the sale of Property, Plant
& Equipment 14,221 80,000
Proceeds from Deposit 200,000 -
Proceeds from Sale of Shares 225,551 -
Interest Received 53,052 76,961
Net Cash provided by Investment Activities 482,824 151,667
============ ============
Cash Flows from Financing Activities
Interest Paid (5) (9,529)
Proceeds from Borrowings 50,000 2,300,000
Net Cash provided by Financing Activities 49,995 2,290,471
============ ============
Net increase / (decrease) in Cash and
Cash Equivalents 33,289 (78,098)
Cash and Cash Equivalents at Beginning
of the Half-Year 92,797 263,714
Cash and Cash Equivalents at the End of
the Half-Year 126,086 185,616
============ ============
The accompanying notes form part of these condensed consolidated
financial statements which must also be read in conjunction with
the 2012 Annual Report.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2012
Note 1: Significant Accounting Policies
Statement of Compliance
The half-year financial report is a general purpose financial
report prepared in accordance with the Corporations Act 2001 and
AASB 134 Interim Financial Reporting. Compliance with AASB 134
ensures compliance with International Financial Reporting Standard
IAS 34 Interim Financial Reporting. The half-year report does not
include notes of the type normally included in an annual financial
report and shall be read in conjunction with the most recent annual
financial report and the public announcements made during the
half-year in accordance with the continuous disclosure requirements
of the Corporations Act 2001.
Basis of Preparation
The condensed consolidated financial statements have been
prepared on the basis of historical cost, except for the
revaluation of certain non-current assets and financial
instruments. Cost is based on the fair values of the consideration
given in exchange for assets. All amounts are presented in
Australian dollars, unless otherwise noted.
The accounting policies and methods of computation adopted in
the preparation of the half-year financial report are consistent
with those adopted and disclosed in the company's 2012 annual
financial report for the financial year ended 30 June 2012, except
for the impact of the Standards and Interpretations described
below. These accounting policies are consistent with Australian
Accounting Standards and with International Financial Reporting
Standards.
New and revised Standards
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet mandatory, have not
been early adopted by the consolidated entity for the annual
reporting period ended 31 December 2012. The consolidated entity
has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
Accounting policies, changes in accounting estimates and
errors
During the half year ended 31 December 2012, an assessment of
the terms and valuation methodology of convertible notes on
maturity resulted in a reclassification of these liabilities
between unsecured convertible notes and Loans from related party:
secured and unsecured.
The reclassification was retrospective and as such the prior
period comparatives presented the Company show a balance of
unsecured convertible notes of $4,482 thousand and loans from
related party: secured and unsecured of $35,991 thousand at 30 June
2012. The reassessment had the effect of overstating debt by $4,157
thousand for the year ended 30 June 2012 and overstating finance
costs by $888 thousand for the half year ended 31 December
2011.
In accordance with the requirements of AASB 134 Interim
Financial Reporting, the Company has not presented a third
statement of financial position which would otherwise be required
by AASB 108 Accounting Policies, Changes in Accounting Estimates
and Errors.
As Previously Restatement As Restated
Reported Adjustment
-------------------- ----------------------- ---------------------
($) ($) ($)
For the half year ended 31 December
2011
Statement of Comprehensive Income
Foreign exchange (loss)/gain arising
on translation of financial liabilities (125,078) (2,064) (127,142)
Total other income 5,736,910 (2,064) 5,734,845
-------------------- ----------------------- ---------------------
Finance costs (4,435,966) 887,843 (3,548,123)
Loss for the period (1,135,441) 885,779 (249,673)
==================== ======================= =====================
Statement of financial position as at 30 June
2012
Unsecured convertible notes 35,460,977 (30,978,742) 4,482,235
Loans from related party: secured and unsecured 8,133,803 26,821,312 34,955,115
Total Financial Liabilities 43,605,795 (4,157,430) 39,448,365
-------------------- ----------------------- ---------------------
Total current liabilities 45,282,032 (4,157,430) 41,124,602
-------------------- ----------------------- ---------------------
Net Liabilities (20,733,412) 4,157,430 (16,575,982)
==================== ======================= =====================
Statement of changes in equity
Accumulated Losses (90,486,359) 4,157,430 (86,328,929)
Total Equity (20,733,412) 4,157,430 (16,575,982)
==================== ======================= =====================
Going Concern
The financial report has been prepared on the going concern
basis, which assumes continuity of normal business activities and
the realisation of assets and the settlement of liabilities in the
ordinary course of business.
In line with the consolidated entity's revised investment policy
and the disposal of the tenement package in Western Tasmania the
company has substantially reduced its ongoing expenditure. It
expects to continue to incur losses for at least the next 12
months. The consolidated entity will finance its operations
primarily through cash and cash equivalents on hand, future
financing from the issuance of debt or equity instruments and
through the generation of revenues once a commercially viable
operation is identified. However, the consolidated entity has yet
to generate any significant revenues and has no assurance of future
revenues.
As disclosed in note 6, the Company has entered into an
agreement to dispose of all the existing mining assets currently
held in Tasmania, together with all associated plant and equipment,
for a total consideration of AUD $4 million in cash. The sale is
currently awaiting ministerial approval which is expected to be
finalised in or shortly after the first quarter of 2013.
On 15 March 2013 the Company received an undertaking from Creat
Group in that, for the purposes of assisting the company to achieve
its working capital forecast to 30 June 2014:
-- Creat Group will continue to provide further funding to CRHL
as required with interest rates based on market interest rates;
and
-- Creat Group will not call for or cause repayment of any loans
or convertible notes, including the payment of accrued interest on
such loans or convertible notes, held by Creat Group at 31 December
2012 or entered/acquired by Creat Group subsequent to that date,
and interest that will be due and payable on such loans or
convertible notes through to 30 June 2014.
At the date of this report and having considered the above
factors, the directors are confident that the consolidated entity
will be able to continue as a going concern.
Note 2: Segment Information
AASB 8 requires operating segments to be identified on the basis
of internal reports about components of the Company that are
regularly reviewed by the chief operating decision maker in order
to allocate resources to the segment and to assess its
performance.
The chief decision maker of the company is its Board of
Directors, and the system of internal reporting is such that there
is only one reportable segment under AASB 8.
Note 3: Disclosure of additional information
Other gains and losses
31 Dec 2012 31 Dec 2011
$ $
Restated
Foreign exchange (loss)/gain
arising on translation of financial
liabilities (527,387) (127,142)
Gain/(Loss) on convertible note
option valuation - 5,861,987
Impairment of Investment (7,219,813) -
Total other income (7,747,200) 5,734,845
------------ ------------
Available for sale Investment carried at fair value
The fair value of the investment in Galaxy Resources Limited at
31 December 2012 is $14,846,040 (30 June 2012; $22,283,595).
Note 4: Financial liabilities
Financial liabilities include the following loans and
convertible notes:
31 Dec 2012 30 Jun 2012
$ $
Restated
Current
Unsecured convertible notes
(ii) 4,770,445 4,482,235
Loans from related party: secured
and unsecured (i) 36,914,498 34,955,115
Withholding tax payable 11,015 11,015
------------ ------------
41,695,958 39,448,365
============ ============
The following loans and convertible notes are all held with the
ultimate parent entity, Creat Group.
(i) Six unsecured loans from a related party are currently due
for repayment. One of these unsecured loans has an interest rate of
0%, four have an interest rate of 10% and one has an interest rate
of 12%. Two cash advance facilities are in place and have an
interest rate of 0%. At 31 December 2012, $100,000 of a $400,000
facility was still available to the company.
(ii) Six unsecured convertible notes were due to mature in
February 2013 and have interest rates of 6%.
The above unsecured convertible notes and unsecured loans are
covered by a letter of financial support from Creat Group (refer
Note 1).
The movement in current financial liabilities is predominantly
due to movement in the fair value of convertible notes.
Note 5: Contingencies and commitments
There are no known contingent liabilities or contingent assets
since the end of the last annual reporting period.
Note 6: Subsequent events
Proposed sale of the Company's mining assets
The sale of mining tenements was finalised on 21 December 2012
pending ministerial approval. Approval is expected in or shortly
after the first quarter of 2013.
Note 7: Assets classified as held for sale
31 Dec 2012
$
Plant and equipment held for
sale 522,823
Exploration and evaluation assets
held for sale 250,000
Site works and other assets
held for sale (i) 6,081,651
------------
6,854,474
------------
(i) In October 2012 a contract was entered into for the sale of
assets associated with the mining tenements owned by the Company,
as part of the agreement the purchaser acquired the mining
licenses, fixed assets on the site and site works performed on the
tenements in the past.
Reversal of impairment
During the year, as a result of a sale contract being entered
into for the sale of mining tenements and associated assets the
impairment on properties previously recognised was reassessed and
the change in conditions gave rise to a reversal of this
impairment. The amount of the impairment reversal for the half year
ended 31 December 2012 was $6,081,651.
Provision for Restoration and Rehabilitation
31 Dec 2012
$
Liabilities held for sale (ii) 2,854,474
(ii) In accordance with Statement Government legislation , a
provision for rehabilitation of the Comstock mine site was required
to be recognised. As part of the contract for sale, the purchaser
assumes the responsibility for the terms and conditions of the
licences acquired which includes the responsibility for
rehabilitation. The provision for rehabilitation has been
classified as held for sale in accordance with the transfer of this
responsibility.
FOR THE HALF-YEAR ENDED 31 DECEMBER 2012
DIRECTORS' DECLARATION
The directors declare that:
(a) in the directors' opinion, there are reasonable grounds to
believe that the company will be able to pay its debts as and when
they become due and payable; and
(b) in the directors' opinion, the attached financial statements
and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true
and fair view of the financial position and performance of the
consolidated entity.
Signed in accordance with a resolution of the directors made
pursuant to section 303(5) of the Corporations Act 2001.
On behalf of the Directors
Derek Leung
Executive Chairman, Managing Director
And Chief Executive Officer
Dated this 15(th) day of March 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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