Oriel Resources plc: Final Results for the Year Ended 31 December 2007
Wed May 28, 5:21 PMLONDON, UNITED KINGDOM--(Marketwire - May 28, 2008) - Oriel Resources plc, ("Oriel", or the "Company") (TSX: ORL.TO)(AIM: ORI) the London-based chrome and nickel mining and processing company, announces its unaudited results for the year ended 31 December 2007. All amounts are presented in US Dollars.
Financial highlights - Total of $60.0m drawn down from Voskhod funding. - Commencement of smelting at the Company's Tikhvin ferrochrome smelting plant Post year-end - Mechel cash offer for all of the shares in Oriel goes unconditional The annual general meeting of the Company will be held at Ground Floor, 1 Red Place, London W1K 6PL at 12.00 noon on Friday 29 August 2008. Executive Chairman, Dr Sergey V Kurzin commented: "2007 and the first five months of 2008 have proved to be yet another significant period of development for Oriel Resources. From the continuing development at the Voskhod chrome project, the successful commissioning of the four furnaces at the Tikhvin high carbon ferrochrome ("HC FeCr") smelter ("Tikhvin"), the completion of a US$96 million private share placement for the assessment, evaluation and engineering works for additional FeCr production and further progressing of the Shevchenko project, the choice of continuous atmospheric tank leach technology to process Shevchenko ores, the initial sale of HC FeCr product from Tikhvin and the signing of a chrome ore off take contract from Voskhod, the completion of a US$50 million secured debt facility for working capital requirements of Tikhvin to, of course, the wholly unconditional acceptance by Oriel's shareholders of the cash offer from Mechel for the entire issued share capital of Oriel." Executive Chairman's Statement Emergence of a new, integrated stainless steel industry supplier I am pleased to present Oriel Resources plc's financial results for the year ended 31 December 2007. Needless to say, the Company's directors and I are extremely pleased to confirm that the Cash Offer from Mechel for the entire issued share capital of Oriel has been accepted by the shareholders. The Offer values the entire issued and to be issued share capital of Oriel at approximately US$1,498 million (Pounds Sterling 749 million). In the four years since Oriel's formation, management has successfully built a valuable portfolio of significant ferroalloy assets and a platform to become a premier supplier to the stainless steel industry. It was against this background the Directors believed the Offer from Mechel provided an attractive opportunity for Oriel shareholders to realise their investment. In addition to negotiating and completing the Mechel Offer, this has been an immensely busy and challenging year for Oriel. Period and post period highlights include: - the on-going development of the Voskhod chrome project, - the commencement of high carbon ferrochrome production at the Tikhvin smelter and successful commissioning of all four furnaces, - the choice of atmospheric acid tank leach technology to process Shevchenko ores, - the completion of a US$96 million private placement for general working capital and for the assessment, evaluation and engineering works for additional FeCr production at Tikhvin and further progressing of Shevchenko project and; - the securing of a US$50 million loan for the continuing development of the Tikhvin plant. Mechel Offer On 26 March 2008, Mechel offered a cash payment of 219.86 US cents for each Oriel share. The Offer valued the entire issued and to be issued share capital of Oriel at approximately US$1,498 million (Pounds Sterling 749 million) and represented a premium of approximately 13.7% to the closing price of 96.75 pence per Oriel share on 29 February 2008 and a premium of approximately 90.2% to 57.83 pence, being the average closing middle market price of an Oriel share for the six-month period prior to the same date. Further to Mechel's announcement on 17 April which advised the market that the cancellation of admission to trading of Oriel shares on The London Stock Exchange was to take effect on or around 6 May 2008, Oriel released an update on 2 May, advising that the trading will not be cancelled on that date, but is now intended to take effect at or around the end of June 2008. Oriel is due to notify the market of the revised date once ongoing discussions relating to the Company's continuing financing arrangements have been concluded. Development continues at Voskhod I am very pleased to report that on-going development of the Voskhod chrome project is advancing exceptionally well. Subsequent to the completion of the box-cut in Q4 2006 and installation of supporting steel arches, development of the decline face has now reached 1,386m from the surface portal. Thanks to Central Asia Mining's aggressive work schedule, current decline advancement rates are in excess of scheduled forecasts. In that light the project is on track to achieve first production and sales during Q3 2008. The installation of power infrastructure as well as of temporary roads, offices, fuel tank farm and a concrete batching plant has been completed. Considerable progress is being made in the construction of process plant buildings, permanent roads, tailings dam, railhead and railhead access road. Construction of the plant is on schedule to start production in Q3 2008. Production and revenue generation commences at Tikhvin Following commencement of high carbon ferrochrome production at Tikhvin in April 2007 and subsequent generation of Oriel's first revenue, Tikhvin's management worked extremely hard to ensure that the operation's production successfully increased with construction completion on furnaces three and four and start up of furnace two during the year. As reported in 2007, the global chromite ore shortages made it difficult for the smelter to source at reasonable process, but by the end of Q1 2008, ore was procured and the last two furnaces started operation. Overall the operation is continuing its ramp up towards full capacity which should be reached when ore from the Voskhod mine arrives in Q3 2008. Shevchenko process technology chosen After extensive comparative analysis of all appropriate technologies for the processing of Shevchenko ores, the Board announced in October 2007 the decision to proceed with continuous atmospheric acid tank leach technology, as it provided significantly better economic and technical performance compared to other technologies. Leach tests indicated up to 90% nickel recovery on screened and upgraded Shevchenko ores. Management and Staff I would like to thank Oriel's staff, management and consultants for their hard work, dedication and drive during 2007 and 2008. Not only is the London team to be congratulated, but staff, management and contractors at Tikhvin and Voskhod have worked tirelessly and in some cases, under extremely tough conditions to have successfully brought the projects to the stages the market finds them at today. In particular, my thanks go to Nick Clarke, Randy Reichert, Dr Nic Barcza, Petro Mychalkiw and David Swan in London and to Takhir Baratov, Ray Oates and Chris Power at the Voskhod project in Kazakhstan and Yvgeny Neshcheret at the Tikhvin plant near St Petersburg.
Dr Sergey V Kurzin,
Executive Chairman
28 May, 2008
Oriel Resources Plc
Consolidated income statement for the year ended 31 December 2007
Year ended Year ended
31 December 31 December
2007 2006
Note
$'000 $'000
Revenues 36,328 -
Cost of Sales (37,282) -
----------------------------
Gross loss (954) -
Other income 5,328 407
Distribution costs (1,251) -
Administrative costs (32,152) (5,855)
Other expenses (11,895) (1,692)
----------------------------
Operating loss (40,924) (7,140)
Finance income 17,046 139
Finance expenses (9,858) (183)
----------------------------
Loss before taxation (33,736) (7,184)
Taxation (4,813) 1,843
----------------------------
Net loss for the year (38,549) (5,341)
----------------------------
----------------------------
Attributable to:
Equity shareholders of
the parent (36,048) (5,257)
Minority interest (2,501) (84)
----------------------------
(38,549) (5,341)
----------------------------
----------------------------
Loss per share
Basic and diluted 2 (6.000)c (1.882)c
All amounts above relate to continued operations.
Oriel Resources Plc
Consolidated statement of recognised income and expenditure for the year
ended 31 December 2007
Year ended Year ended
31 31
December December
2007 2006
$'000 $'000
Exchange translation differences on
consolidation of Group entities 2,047 (666)
-------------------------
Net income/(expense) recognised
directly in equity 2,047 (666)
Loss for the financial year (38,549) (5,341)
-------------------------
Total recognised income and expense
for the financial year (36,502) (6,007)
-------------------------
-------------------------
Attributable to:
Equity shareholders of the parent (34,001) (5,923)
Minority interest (2,501) (84)
-------------------------
(36,502) (6,007)
-------------------------
-------------------------
Oriel Resources Plc
Consolidated balance sheet at 31 December 2007
At 31 At 31
December December
2007 2006
$'000 $'000
ASSETS
Non-current assets
Property, plant and equipment 401,753 296,374
Intangible assets 35,993 38,221
Other non-current assets 9,208 15,722
-----------------------------
Total non-current assets 446,954 350,317
Current assets
Inventories 30,511 2,587
Trade and other receivables 77,574 21,382
Cash and cash equivalents 65,934 113,682
-----------------------------
Total current assets 174,019 137,651
-----------------------------
Total assets 620,973 487,968
-----------------------------
-----------------------------
EQUITY AND LIABILITIES
Non-current liabilities
Borrowings 149,226 89,754
Deferred tax liabilities 31,109 31,359
Trade and other payables 10,409 3,853
Provisions 714 407
-----------------------------
Total non-current liabilities 191,458 125,373
Current liabilities
Borrowings 17,689 12,353
Trade and other payables 31,501 34,844
Income tax payable 5,081 -
-----------------------------
Total current liabilities 54,271 47,197
-----------------------------
Total liabilities 245,729 172,570
-----------------------------
-----------------------------
Capital and reserves
Called up share capital 7,076 5,475
Share premium account 399,889 309,096
Foreign currency translation reserve 2,320 273
Retained earnings (35,190) (4,296)
-----------------------------
Equity attributable to shareholders
of the parent 374,095 310,548
Minority interests 1,149 4,850
-----------------------------
Total equity 375,244 315,398
-----------------------------
-----------------------------
-----------------------------
Total equity and liabilities 620,973 487,968
-----------------------------
-----------------------------
Oriel Resources Plc
Consolidated cash flow statement for the year ended 31 December 2007
Year ended Year ended
31
31 December December
2007 2006
$'000 $'000
Cash flows from operating activities
Operating loss (40,924) (7,140)
Adjustments for:
Depreciation of property, plant and
equipment 5,482 48
Amortisation of intangible assets 26 2
Taxation - (62)
Profit on disposal of subsidiary
undertaking (4,700) (264)
Loss on sale of property, plant and
equipment 1,900 -
Share based payments 5,154 424
Foreign exchange differences 6,567 151
----------------------
Operating loss before changes in working
capital (26,495) (6,841)
(Increase) in trade and other
receivables (49,770) (27,133)
(Increase) in inventories (27,925) (2,453)
Increase in trade and other payables 4,650 27,613
----------------------
Net cash used by operations (99,540) (8,814)
----------------------
Investing activities
Purchases of property, plant and
equipment and construction in
progress (103,570) (49,601)
Proceeds from sale of property, plant
and equipment and
construction in progress - 92
Purchases of intangible assets (4,022) (49)
Purchase of subsidiary undertaking (net
of cash acquired) - 11,956
Proceeds from sale of subsidiary (net of
cash disposed) 7,000 (1)
Interest income 4,115 89
----------------------
Cash flows from investing activities (96,477) (37,514)
----------------------
Financing activities
Issue of ordinary shares (net of issue
costs) 92,394 100,000
Proceeds from borrowings 64,808 59,972
Interest paid (8,898) (185)
Repayment of finance lease creditors (35) (68)
----------------------
Cash flows from financing activities 148,269 159,719
----------------------
(Decrease)/increase in cash (47,748) 113,391
Cash and cash equivalents at beginning
of the year 113,682 301
Effect of exchange rate changes on cash
and cash equivalents - (10)
----------------------
Cash and cash equivalents at end of the
year 65,934 113,682
----------------------
----------------------
Oriel Resources Plc Notes forming part of the financial statements for the year ended 31 December 2007 1. Authorisation of financial statements and statement of compliance with IFRS The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Group's financial statements have been prepared in accordance with IFRS as adopted by the European Union ("IFRS") and as applied in accordance with the provisions of the Companies Act 1985. 2. Loss Per Share The basic loss per share is calculated on the loss attributable to equity shareholders of the parent and on ordinary shares being the weighted average number of ordinary shares on issue during the period. The diluted loss per share is calculated on profit attributable to equity shareholders and on the weighted average diluted number of ordinary shares during the period.
2006 2006
Loss per share - basic and diluted (6.000)c (1.882)c
$'000 $'000
Loss attributable to equity shareholders
of the parent 36,048 5,257
Number Number
Weighted average number of ordinary
shares at 31 December 600,786,569 279,360,356
Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary equity holders by the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. There is no difference between the diluted loss per share and the loss per share presented as due to the loss for the year the potential shares are anti-dilutive. In line with IFRS 3 Appendix B, following the RTO the equity structure of the Group reflects the equity of the legal parent, including the shares issued by it to effect the business combination. In the year ended 31 December 2006, the weighted average number of ordinary shares has been calculated as follows: (a) Number of ordinary shares from beginning of period to date of RTO is the number of shares issued by the Company to the owners of IPH and Croweley. (b) from acquisition date to end of period the number of shares is the actual number of shares of the Company outstanding during the period. The full financial report & accounts are available on SEDAR ( www.sedar.com) or on the Company's website ( www.orielresources.com).and thereafter will be available from the Company's registered office: 1 Red Place, London W1K 6PL. Notes to Editors: Oriel Resources was formed in July 2003 with Dr Sergey V. Kurzin as Executive Chairman and CEO and is a London-based chrome and nickel mining and processing company with its Ordinary Shares and Warrants admitted to trading on London's Alternative Investment Market (AIM) and its Ordinary Shares listed on the Toronto Stock Exchange. The Company's primary focus is on the identification, acquisition, exploration and development of advanced chrome, nickel, and other alloying opportunities in the countries of the FSU, including The Republic of Kazakhstan and The Russian Federation. The Oriel group currently has three projects, namely the Tikhvin ferrochrome smelter project, Russia, the Voskhod chrome project and the Shevchenko nickel project, both situated in north-western Kazakhstan. Following the results of recent feasibility studies for the Russia and Kazakh-based projects and given the current high demand for chrome and nickel products, the directors are fast-tracking the Voskhod chrome project into production while further developing the Shevchenko nickel project. The Tikhvin ferrochrome smelter project near St Petersburg, Russia commenced operations in April 2007. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.ContactsDr Sergey V Kurzin Oriel Resources plc
Executive Chairman
+44 (0) 20 7514 0590
Nick Clarke
Oriel Resources plc
Managing Director
+44 (0) 20 7514 0590
David Swan
Oriel Resources plc
Company Secretary
+44 (0) 20 7514 0590
Gavin Dallas
Oriel Resources plc
Investor Relations
+44 (0) 20 7514 0590
Email: info@orielresources.com
Website: www.orielresources.com
Michael Padley / Michael Spriggs
Bankside Consultants
+44 (0) 20 7367 8888
Keith Schaefer
Vanguard Shareholder Solutions
(604) 608-0824
572.92 (5.30%)
