Creat Resources Hld (CRHL) - Final Results for year ended 30 June 2012 RNS Number : 3180Q Creat Resources Holdings Ltd 05 November 2012 5 November 2012 Creat Resources Holdings Limited ("CRHL" or "the Company") Final Results for year ended 30 June 2012 Creat Resources Holdings Limited ("CRHL") (AIM: CRHL) is pleased to announce its final results for the year ended 30 June 2012 as shown below. The full Annual Report and Accounts will be available on the Company's website (www.creatresources.com) shortly. The notice of the Annual General Meeting and posting of the Annual Report and Accounts will be announced in due course. 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, Emma Earl, Jamie Barklem: Tel +44 20 7776 6550 Chairman's Statement Dear Shareholders: I am pleased to present to you the Annual Report of Creat Resources Holdings Limited for the year ended 30 June 2012. The year just ended was, and the year ahead will be, filled with challenges. The European financial crisis deepening, rather than easing; the American economy remaining sluggish and the slowing down of developing countries, all contributed to the weak demand for lower end resources. Extraction of resources from our tenements would only be economically viable when such situations dramatically improve, and the low commodity prices rebound. During the year, as with other similar exploration companies, development at Creat Resources had been hindered by the shortage of working capital. The financial crisis worldwide made it difficult, if at all possible, to raise funds from the capital market. Despite the support we received from our major shareholder, Creat Group Company Limited, we have no alternative but to keep our exploration work to a level we could manage to best balance input and output. Towards the end of the financial year, your Board of Directors reconsidered the way forward for our exploration activities. By now, you would note that the Board has recommended for your approval the disposal of all the tenements we hold at Zeehan, Tasmania, Australia. By such move, I trust that it allows your Company to start afresh. Myself, and the rest of the Board, have long begun our search for new and even better opportunities to enhance the return on your investment. At the same time, our other major investment in Galaxy Resources Limited has made milestone progress. In March 2012, Jiangsu Lithium Carbonate Plant which is wholly owned by Galaxy and situated in the Zhangjiagang Free Trade Zone in China's Jiangsu Province was officially opened. Jiangsu Plant is the largest-capacity battery grade lithium carbonate plant in theAsia Pacific region and is one of the most technologically advancedplants of its kind in the world. Also in March 2012, Galaxy announced the merger with Lithium One Inc., Canada, which when completed, resulted in Galaxy becoming a much larger lithium resource supplier worldwide demonstrating Galaxy's understanding of the importance of this strategic green energy source. Following the merger, the effective shareholding of Galaxy by Creat Resources was inevitably diluted but we remain one of the substantial shareholders of Galaxy, leaving us, CRHL, set to realize a high return on our investment when the potential of Galaxy is unleashed. Please join me in expressing our gratitude to the Board, the management team and all the staff, in this time of challenge, their dedication is the envy of our competitors. We thank you for, and we look forward to receiving, your continuing support for a brighter future for your company. Derek Leung Executive Chairman Excerpts from Directors report Principal activities The principal activities of the Consolidated Entity during the financial year were minerals exploration and the acquisition, exploration and operation of mineral properties in both Australia and overseas. 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. Since July 2009 the Company has pursued a strategy of acquisitions and other transactions that has resulted in expansion of its mining operations within and outside Australia and resource diversification (including gold, nickel, and a continued focus on lead, zinc and silver) in order to spread the risk of commodity fluctuations and take advantage of the deals on offer. Operating results The loss of the Consolidated Entity for the year after providing for income tax amounted to$13,673,981 (2011 loss: $20,439,089). Review of operations The Company is pursuing a dual strategy of acquiring interests in strategic resource companies, the first of which is Galaxy Resources Limited, and resource diversification through its exploration activities. Galaxy Resources Ltd Investment 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 component for powering the world's fast expanding fleet of hybrid and electric cars. Galaxy's Mt Cattlin mine aims 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 and lowest cost 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 sophisticated electronics including mobile phones and computers. Galaxy has positioned itself to meet this lithium future by not only mining the lithium, but also by downstream processing to supply lithium carbonate to the expanding Asian market. The Company's shareholding in Galaxy remains at 38,091,616 shares. Whilst there has been no change in the number of shares held by the Company during the reporting period, as a result of the placement of shares to raise capital for the financing of the merger of Lithium One of Canada and Galaxy Resources, the Company's holding was diluted and is 10.45% as at 30June2012. Mt Cattlin Mt. Cattlin production continued throughout the year until July 2012 when Galaxy announced a temporary halt to production due to the large stockpiles of ore destined to Jiangsu plant in China which was in its early stages of ramping up to full production. It is expected that production at Mt. Cattlin will continue once Jiangsu is near full production. Jiangsu Lithium Carbonate Project in Jiangsu, PRC. The Jiangsu Lithium Carbonate plant continues to progress with lithium carbonate production in August totalling 350 tonnes, (25% of design output), slightly ahead of the ramp-up schedule according to the Galaxy announcement in September 2012. Galaxy announced that August sales totalled 268 tonnes generating revenue in excess of A$1.6 million (RMB10.5 million) for the month. Galaxy commenced battery grade lithium carbonate sales with overall product acceptance. August sales were still based predominantly on technical grade product. Going forward, battery grade sales revenue is expected to increase as more customer product qualifications are completed. Battery grade lithium carbonate samples were sent to over 30 potential customers in China for product qualification. Product testing continues and feedback regarding product quality to date has been extremely positive according to Galaxy. Product quality at Jiangsu continues to achieve at least the 99.5% purity criteria required to class the lithium carbonate as battery grade, with the product meeting all of the prescribed tolerances for impurities required by Galaxy's cathode producing customers. Exploration Activities This section should be read in conjunction with the Subsequent Events note and in note 33 to the financial statements. Retention Licences Creat Resources Holdings Limited ("CRHL") and its wholly owned subsidiary, ZZ Exploration Pty Ltd, hold three (3) Retention Licences (RL) as a portion of its tenement package situated in the mineral rich area around Zeehan in Western Tasmania. Re-assessment of the existing mineral resources and development of programs to increase reserves and/or extract ore grade material for all three licences has been ongoing over the last 12 months. Selective rehabilitation is being completed at the Comstock mine site and surrounding works in consultation with the EPA of Tasmania. Comstock RL4/2009 Comstock was granted on 01/02/2010 for an initial period of 2 years. This term was extended for a further 2 years and will expire on the1st February 2014 unless extended. Mineral Resources Tasmania (MRT) has for several years held an environmental bond of $2.5 million from CRHL to cover the decommissioning and rehabilitation of the Comstock site. Further to this, CRHL will be entitled to reimbursement in full, of the bond amount, upon successful completion of the decommissioning and rehabilitation process. Environmental Protection Notice (EPN) 7977/1 states that CRHL must develop and implement a Decommissioning and Rehabilitation Plan (DRP) for the site. A draft DRP has been developed by CRHL and has been submitted to the Environment Protection Authority (EPA) for review. This was done in September 2011. The current version of the DRP resides with the EPA. The version as it exists is only partially acceptable to the EPA and CRHL has been informed that further work is required for resubmission of the DRP after addressing the issues of concern to the EPA. Minimal rehabilitation work was completed during the year. A clay deposit was located and samples taken for analysis. The samples were analysed and now require review by an environmental consultant to report on the soil compatibility for the purposes required by the EPA in the capping of the Swansea Waste Rock dump and the now partially infilled dirty water dam. Quarterly water quality testing continues as well as continuous lime dosing to maintain water quality control on site as per our obligations with regard to the site and the EPA. Oceana RL3/2009 Oceana was granted on 01/02/2010 for an initial period of 2 years. An application was made and granted for an extension of term. This licence now expires on the 1^st February 2014 unless extended. There has been no development activity in the 12 months to 30 June 2012, however, quarterly water quality control samples continue to be carried out and assessment of the mineral resource potential continues. Mariposa There has been no development activity in the 12 months to 30 June 2012. Retention Licence RL1/2008 was renewed in February 2011 for a further period of 2 years, with the term of the licence extending until 1st February 2013.Continued assessment of the mineral resource potential was carried out during the term. Exploration Licences CRHL with its wholly owned subsidiary, ZZ Exploration Pty Ltd holds four (4) current and active Exploration Licences (EL) in the Zeehan area covering a total area of 109 square kilometres. Geological work programs, including drilling were completed on the various tenements during the year ended 30 June 2012. EL30 The primary focus at EL30/2002, Tenth Legion Prospect has been to evaluate the extent and quality of the long-known magnetite mineralisation present to determine the suitability as a Direct Shipping Ore (DSO). This work continues and will require further drilling to delineate a resource. Work was also undertaken to determine the continuity of strike from Comstock to the southeast of the RL within EL30 during the year with two of three planned diamond drill holes being completed. SY159 & SY160 were drilled to completion during the period. SY159 Intersected one minor mineralised zone at depth and SY160 intersected two minor mineralised zones. The results did not warrant the completion of the third diamond hole planned further to the southeast. Table 1 - Collar Information Hole No. Easting Northing Azimuth Dip Depth SY159 359008 5360418 205 -50 213.6 SY160 359235 5360354 205 -50 244.6 EL20 Two further diamond drill holes, AU002 and AU003 were completed during the period as a follow-up to AUD001 drilled in the previous year. AU002 was designed to test the continuity of the mineralised zone confirmed in AU001. AU002 was drilled to the northeast and from the opposite side of the structure as AU001. The results confirmed the extension of a broad low grade mineralised zone from AU001. A fourth diamond hole, AU004 was planned approved and awaits drilling. AU003 was designed to test a small historical zone above AU001. The drill results were disappointing and no further work was completed. Table 2 - Collar Coordinates Hole No Easting Northing Azimuth Dip Depth AU002 362271 5358975 250 -55 349.5 AU003 362036 5358886 250 -45 239.5 EL18 The geochemical grid was sampled during the period and the samples were subjected to onsite handheld XRF analysis. Results were mixed with no follow-up work planned in this area at present. During the period it was decided to plan and carry out a diamond drilling program in the southeast corner of the northern block of EL18. This section is due west of Zinc mineralisation located in the south portion of the Tenth Legion prospect on EL30. Three diamond drill holes were planned of which one has been completed. These drill holes were planned to test the western extent of the Zinc mineralisation of previous drilling programs carried out on the adjacent EL30. TLC44 was the first of the holes to be drilled and was completed at a depth of 201.9m. TLC43 and TLC45 are prepared, approved and await drilling. EL21 The company has committed to reviewing the existing data relating to the two tin prospects within the tenement. A pre-JORC resource exists on the Razorback mine and work is ongoing with regard to planning and completing further exploration that could lead to an up grading of the resource to JORC compliance. Consolidated statement of comprehensive income Year Ended Year Ended 30-Jun-12 30-Jun-11 Note $ $ Continuing Operations Revenue 6 275,196 211,627 Other Gains and Losses 7 (747,241) (364,768) Share of Loss of Associate 14 - (5,108,536) Exploration and Evaluation Costs Expensed 8 (325,448) (1,374,883) Depreciation Expense 8 (249,217) (310,977) Finance Costs 8 (9,693,129) (6,746,616) Administration Expenses (682,945) (547,557) Employee Expenses (1,372,422) (2,878,924) Site Operations (105,537) (117,942) Site Operations - Environment (605,083) (2,999,835) Other Expenses (168,155) (200,678) Loss before Income tax (13,673,981) (20,439,089) Income Tax Benefit 10 - - Loss for the Period (13,673,981) (20,439,089) Other Comprehensive Income Share of Other Comprehensive Income of Associate - 739,166 Other Comprehensive Income for the Period (Net of Tax) - - Total Comprehensive Income for the Period (13,673,981) (19,699,923) Earnings Per Share Basic (cents per share) (2.05) (3.06) Diluted (cents per share) (2.05) (3.06) The accompanying notes form part of these financial statements Consolidated statement of financial position as at 30 June 2012 30 Jun 12 30-Jun-11 Note $ $ Assets Current Assets Cash and Cash Equivalents 24 92,797 263,714 Trade and Other Receivables 11 61,269 28,043 Other Current Assets 12 103,497 126,542 Total Current Assets 257,563 418,299 Non-Current Assets Property, Plant and Equipment 16 867,598 1,164,990 Exploration and Evaluation Asset 250,000 250,000 Investment in Associate 14 - - Other Non-Current Assets 15 22,283,595 28,568,712 Other Financial Assets 13 2,500,000 2,500,000 Total Non-Current Assets 25,901,193 32,483,702 Total Assets 26,158,756 32,902,001 Liabilities Current Liabilities Trade and Other Payables 17 396,857 435,458 Financial Liabilities 18 43,605,795 32,533,017 Provisions 19 1,279,380 1,450,954 Total Current Liabilities 45,282,032 34,419,429 Non-Current Liabilities Financial Liabilities 18 - 4,225,628 Provisions 19 1,610,136 1,316,375 Total Non-Current Liabilities 1,610,136 5,542,003 Total Liabilities 46,892,168 39,961,432 Net Liabilities (20,733,412) (7,059,431) 30 Jun 12 30-Jun-11 Note $ $ Equity Issued Capital 20 69,408,416 69,408,416 Reserves 21 344,531 344,531 Accumulated Losses (90,486,359) (76,812,378) Equity attributable to owners of the Company (20,733,412) (7,059,431) Total Deficiency (20,733,412) (7,059,431) The accompanying notes form part of these financial statements Consolidated statement of cash flows for the year ended 30 June 2012 30-Jun-12 30-Jun-11 Note $ $ Cash Flows from Operating Activities Receipts from Customers 99,369 137,772 Payments to Suppliers and Employees (3,401,005) (6,336,365) Net Cash used in Operating Activities 24 (3,301,636) (6,198,593) Cash Flows from Investing Activities Purchase of Property, Plant & Equipment - (123,693) Proceeds from Sale of Property, Plant & Equipment 145,427 - Interest Received 142,601 220,857 Net Cash generated by Investment Activities 288,028 97,164 Cash Flows from Financing Activities Interest Paid (7,309) (136,042) Proceeds from Borrowings 2,850,000 3,882,666 Repayment of Borrowings - (378,588) Net Cash generated by Financing Activities 2,842,691 3,368,036 Net Decrease in Cash and Cash Equivalents (170,917) (2,733,393) Cash and Cash Equivalents at Beginning of the Period 263,714 2,997,107 Cash and Cash Equivalents at the End of the Period 24 92,797 263,714 The accompanying notes form part of these financial statements Issued Accumulated Share of Other Total Associate's Capital Losses Reserves Reserve $ $ $ $ $ Balance at 1 July 2010 69,408,416 (56,373,289) 462,415 344,531 13,842,073 Loss for the Period - (20,439,089) - - (20,439,089) Total comprehensive income for the period - (20,439,089) - - (20,439,089) Share of Associate's Reserves - - 739,166 - 739,166 Reclassification to AFS Investment - - (1,201,581) - (1,201,581) Balance at 30 June 2011 69,408,416 (76,812,378) - 344,531 (7,059,431) Issued Accumulated Share of Other Total Associate's Capital Losses Reserves Reserve $ $ $ $ $ Balance at 1 July 2011 69,408,416 (76,812,378) - 344,531 (7,059,431) Loss for the Period - (13,673,981) - - (13,673,981) Total comprehensive income for the period - (13,673,981) - - (13,673,981) Balance at 30 June 2012 69,408,416 (90,486,359) - 344,531 (20,733,412) The accompanying notes form part of these financial statements Note 1: General Information Creat Resources Holdings Limited (CRHL) is a company incorporated in Australia. The address of its registered office and principal place of business is disclosed in note 32 to the financial statements. The principal activities of CRHL and its subsidiaries (the 'Consolidated Entity' or the 'Company') during the financial year were minerals exploration and the acquisition, exploration and operation of mineral properties in Australia. Going Concern The financial report has been prepared on a 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. The Company is in a development stage and in the course of its activities has sustained operating losses. It expects such losses to continue for at least the next 12 months. The Company 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 commercial operations get underway. However, the Company has yet to generate any significant revenues and has no assurance of future revenues. Based on the Company's forecasted cash flows through to 31 December 2013, further funding of $400,000 is required, of which there is a further $150,000 available in a facility with the Company's parent entity, Creat Group. As disclosed in note 33, 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 $4million in cash. The following plan is in place by Management to support the going concern basis of the Company and the consolidated entity. On 31 October 2012 the Company received an undertaking from Creat Group in that, for the purposes of assisting the company in achieving its working capital forecast to 31 December 2013: · Creat Group will continue to provide further funding to CRHL as required with interest rates to be charged 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 30 June 2012 or entered into/acquired by Creat Group subsequent to that date, and interest that will be due and payable on such loans or convertible notes through to 31 December 2013. At the date of this report and having considered the above factors, the directors are confident that the Company and the consolidated entity will be able to continue as going concerns. Note 2: New Accounting Standards for Application in Future Periods The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Consolidated Entity. The Consolidated Entity has decided not to early adopt any of the new and amended pronouncements. The new and amended pronouncements that are relevant to the Consolidated Entity and applicable in future reporting periods are set out below: Note 2: Adoption of new and revised Accounting Standards (cont). Standard/Interpretation Effective for Expected to be annual reporting initially applied periods beginning in the financial on or after year ending AASB 2011-9 Amendments to Australian 1 July 2012 30 June 2013 Accounting Standards - Presentation of Items of Other Comprehensive Income AASB 2011-4 Amendments to Australian 1 July 2013 30 June 2014 Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements AASB 9 Financial Instruments 1 January 2015 30 June 2016 AASB 10 Consolidated Financial Statements 1 January 2013 30 June 2013 AASB 11 Joint Arrangements 1 January 2013 30 June 2013 AASB 12 Disclosure of Interests in Other 1 January 2013 30 June 2013 Entities AASB 13 Fair Value Measurement, AASB 1 January 2013 30 June 2013 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 AASB 119 Employee Benefits 1 January 2013 30 June 2013 The story has been truncated, [TRUNCATED]
Correct: S&P 500 Extends Gain to Biggest Since 2013
Creat Resources Hld CRHL Final Results for year ended 30 June 2012
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