Final results for the period ended 31 December 2016

NQ Minerals PLC
(the “Company” or “NQ Minerals”; NEX:NQMI”)
Final results for the period ended 31 December 2016

31 May 2017

NQ Minerals (NEX:NQMI), an Australia-based exploration and mining company, today announces its final results for the period ended 31 December 2016.

Chairman’s statement

2016 welcomed a reversal of the negative sentiment which has dogged the minerals exploration sector for a number of years. Our investment in our exploration assets, our efforts to add value to our existing projects and search for value adding projects, along with improved market sentiment, provides us with great confidence in our progress and the direction upon which our Group is embarking. During 2016 we agreed to acquire Keen Pacific Limited. The acquisition completed on 18 May 2017 and will see NQ Minerals wholly own the prospective Hellyer Gold Mine in Tasmania, Australia (“Hellyer”). This is in line with the Company’s strategy of becoming a near-term revenue generating gold and base metal production company.

Projects

NQ is focused on three main projects being Hellyer in Tasmania which offers the prospects of significant short term cash flow, and it’s two exploration projects, Ukalunda and Square Post, in North Queensland, Australia. These two exploration projects are both located in prospective mining districts that form part of the well-known Charters Towers Gold Province, where more than 20 million ounces of gold has been mined.

Hellyer

The Board and management of NQ Minerals consider that the Hellyer Gold Mine in Tasmania represents a significant permitted project for the Company with life of mine revenues exceeding AUD$1.3 bn (US$1.033bn) and a post-tax NPV estimated by management of AUD$276 m (US$210m). The capital expenditure to start the project is low at only AUD$20m and the project is expected to have a 10 year mine life. The necessary plant and equipment exists on site including a large pre-existing mill facility and full supporting infrastructure, including a direct rail line to port with port concentrate housing, handling and loading facilities.

NQ Minerals’ acquisition of Hellyer allows the opportunity to fully process and bring the tailings to account. Held within four separate areas, the tailings total 11.24 mt, and comprise a JORC compliant resource estimated at 9.5 mt which is host to Gold at 2.61 g/t Au for 796,000 oz Au, Silver at 104 g/t Ag for 32 m oz Ag, Lead at 3.03% Pb for 287,800 tonnes and Zinc at 2.5% Zn for 237,900 tonnes.

Ukalunda

The Group continues to invest in the Ukalunda. The tenement, which lies midway between the Lake Dalrymple/Burdekin Dam and the historic Wirralie gold mine, which previously produced 1.1 million ounces of gold. The Ukalunda project area contains multiple shows of mineralisation that are the same as other mineralisation shows discovered in mining districts around the world that host major ore bodies. This suggests that a major ore body may be present in this district. Historic, wide-ranging exploration has been carried out at the Ukalunda permit area, which had discovered some areas of rich mineralisation of gold, silver and a number of associated base metals.

Square Post

Investment continues in the Square Post tenement lies close to the Flinders Highway, 10 kilometres north east of Mingela and 50 kilometres south of Townsville. The area is considered to be underexplored, principally due to its rugged terrain. The permit consists of 47 sub-blocks covering an area of around 168km2. Map to Mine has reported that the Square Post tenement is in good standing.

Outlook

The Hellyer Gold Mine will be a flagship project for NQ Minerals and is expected to see us transform into a near-term producer within a 12 month time-frame. First work will involve the refurbishment of the existing operating facilities in order to extract and treat the large high-grade tailings deposit on site and produce three marketable concentrates (lead, zinc, gold/silver/pyrite). The project is expected to be producing within a short time period and offers the potential for attractive returns with a quick payback of capital. The Board believes Hellyer is a world-class project that blends in well with our North Queensland assets and our long-term goal to become a significant gold and base metal producer in Australia. I am optimistic about the Group’s growth potential and we look to the future with significant confidence.

Brian Stockbridge
Chairman
31 May 2017

END

For further information, please contact:

NQ Minerals Plc    
Brian Stockbridge, Non – Executive Chairman
+ 44 (0) 7876 888011

Kris Kottmeier, VP Corporate Development
+ 44 (0) 20 3637 6522 (UK)
+ 1 (604) 506 6502 (North America)

Daniel Stewart & Company Plc    
Richard Potts
+ 44 (0) 20 7776 6596
Daphne Zhang
+ 44 (0) 20 7776 6550

Yellow Jersey PR    
Felicity Winkles
+ 44 (0) 776 932 5254
Joe Burgess
+ 44 (0) 776 932 5254

_________________________

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016

Year ended 31 December 2016 Period ended 31 December 2015
£’000s £’000s
Continuing operations
Revenue  –  –
Gross Profit  –  –
Administrative expenses (2,394) (316)
NEX admission costs  – (207)
Operating loss  (2,394)  (523)
Finance income  3  6
Loss on ordinary activities before taxation  (2,394)  (517)
Taxation  –  –
Loss for the period  (2,394)  (517)
Foreign exchange gains / (losses)  4  (1)
Total comprehensive loss for the period attributable to the owners of the Parent  (2387)  (518)
Loss per share (pence)  1.62  0.40

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016

As at 31 December 2016 As at 31 December 2015
£’000s £’000s
Assets
Non-current assets
Deferred exploration and evaluation expenditure  899  337
Property, plant and equipment  –  –
Deposits  239  –
 1,138  337
Current assets
Trade and other receivables  373  128
Cash and cash equivalents  2,084  617
 2,457  745
Total assets  3,595  1,082
Equity and liabilities
Equity attributable to owners of the Parent
Ordinary shares  159  144
Share premium  2,382  1,308
Share option reserve  231  –
Group reorganisation reserve  (6,983)  (6,983)
Translation reserve  91  6
Merger relief reserve  7,171  7,171
Accumulated losses (3,040) (653)
Total equity  11  993
Liabilities
Current liabilities
Trade and other payables 558 89
Financial liabilities 1926 0
Convertible notes 1100 0
Total liabilities  3,584  89
Total equity and liabilities  3,595  1,082

 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016

Year ended 31 December 2016 Period ended 31 December 2015
£’000s £’000s
Cash flows from operating activities  (1,185) (518)
Cash flows from investing activities
Payment for exploration expenditure  (562) (248)
Proceeds from disposal of tangible assets  – 17
Payment for share purchase acquisition (deposits)  (239)  –
Net cash flows from investing activities  (801)  (231)
Cash flows from financing activities
Increase / (decrease) in borrowings  2,364  –
Proceeds on issue of shares  1,089 1,331
Net cash flows from financing activities  3,453 1,331
Net increase in cash and cash equivalents  1,467 582
Cash and cash equivalents at the brought forward  617 35
Cash and cash equivalents carried forward  2,084 617

 

NOTES TO THE PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2016

1. The financial information set out above does not constitute statutory accounts for the purpose of Section 434 of the Companies Act 2006. The financial information has been extracted from the statutory accounts of NQ Minerals Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors gave an unqualified report on 31 May 2017.

The preliminary announcement of the results for the period ended 31 December 2016 was approved by the board of directors on 31 May 2017.

2. Earnings per share

2016 2015
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period:
Loss after tax attributable to equity holders of the Group £2,391,000 £517,000
Weighted average number of ordinary shares 147,576,361 130,765,481
Basic and diluted loss per share 1.62p 0.40p
Diluted loss per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Since the Group does not have any dilutive potential ordinary shares the diluted loss per share is the same as the basic loss per share.

Potentially convertible shares

The Group has convertible ordinary shares on issue as at 31 December 2016 as follows:
– 20,508,728 convertible ordinary shares in connection with the convertible notes on issue at year end. These convertible notes have a maturity date within the next 12 months; and

– 8,000,000 options on issue to two directors. These are options expire in the 2021 financial year.

The above have not been factored into the loss per share calculation as they do not dilute current earnings per share.