13 September 2012
B00B0GQJ825/GBP/PLUS-exn
Equity Resources plc
("Equity Resources" or the "Company")
Audited Results for the year ended 31 May 2012
Chairman's statement
I am pleased to present the Company's annual statement to Shareholders for the twelve month period
ended 31 May 2012.
Highlights
The investment climate, especially amongst small cap mineral exploration stocks has been particularly
harsh in recent months with values little more than one third of those announced as recently as
February 2012. The current uncertainties in world markets overshadow us.
Funding
During the year GBP40,000 was raised by the exercise of warrants at 1 penny per share by two major
shareholders, Guild Acquisitions plc and Starvest plc. The short term loan obtained in 2010 remains
outstanding.
Investment review
The Company's funds continue to be invested entirely in Regency Mines plc and Red Rock Resources plc,
two mineral exploration businesses, both of which are traded on the Alternative Investment Market of
the London Stock Exchange. As I am a non-executive director of these two companies, the investment
decisions were made by my colleagues, Simon McNeill-Ritchie and Arif Virani.
In both cases, in spite of significant progress during the year with their various projects, the
share prices have been severely challenged, a fact not uncommon amongst such mineral exploration
ventures. The net asset value has fallen from GBP1,069,800 at 31 May 2011 to GBP230,250 at 31 May
2012 and further to GBP153,000 at 11 September 2012.
Red Rock Resources plc - www.rrrplc.com - has become a gold explorer in Kenya and has gold mining
interests in Columbia. In Kenya, exploration activities continue successfully, whereas in Columbia
Red Rock has received an offer to acquire its 51% interest in a mine which is slowly being brought
into production. In addition to an interest in Ascot Mining plc (PLUS: ASMP www.ascotmining.com),
Red Rock is in its second season working with NAMA Greenland exploring for iron ore in north western
Greenland. It continues to hold a valuable stake in Jupiter Mines Limited (ASX quoted,
www.jupitermines.com) a major steel feed venture lead by Pallinghurst Resources,
www.pallinghurst.com, and in Resource Star Limited (ASX quoted, www.resourcestar.com.au)
The Board remain confident that the shareprice will recover in due course.
Regency Mines plc - www.regency-mines.com - has mineral exploration interests in Australia and Papua
New Guinea with a 16% equity interest in Red Rock Resources plc and an 11% equity interest in Oracle
Coalfields plc (AIM: ORCP, www.oraclecoalfields.com). The principle metal target in PNG is nickel
where it has a joint venture with Direct Nickel PTY Limited and where it has recently declared a
world class nickel resource. Meanwhile, it continues to work with Direct Nickel with a view to
exploiting the latter's innovative technology for extracting nickel from ore. Separately, it has
recently announced an opportunity to explore for minerals in Sudan.
In spite of the currently depressed market prices, the portfolio remains in profit.
Results for the year
The net loss for the year, consisting entirely of administrative costs, amounts to GBP36,950 (2011:
profit of GBP34,702) that is, 0.07 pence loss per share (2011: 0.07 pence profit per share).
Future plans
It remains the intention of the Board to take all reasonable steps to enhance Shareholder value,
taking profits as may be considered advisable to finally clear the Company's liabilities, to finance
necessary administrative overheads and to provide funds for further investments.
It is the Board's belief that the current prices at which the shares of the investee companies are
traded are substantially undervalued, but the Board is considering other options given the value of
the PLUS Markets quote we enjoy.
Shareholder information
So as to conserve resources, the Company does not maintain a website. However, announcements made to
PLUS Markets are available on www.plusmarketsgroup.com. Furthermore, the investee company websites
as previously noted are a valuable source of information.
Annual general meeting
We plan to hold our annual general meeting during October 2012 when we look forward to meeting those
Shareholders able to attend and will provide a portfolio update. A formal notice is enclosed.
John Watkins
Chairman
12 September 2012
Extracts from the Directors' report
Principal activities and business review
The principal activity of the Company is to invest in small companies including pre IPO opportunities
and to deal in and take profits from these investments as may be deemed appropriate. As described in
the Chairman's statement, the Company now holds investments in two mineral exploration companies
which have proved to be profitable and which the Directors believe show potential for future growth.
The Company's key performance indicators, developments during the period and future intentions are
given in the Chairman's statement.
Key risks and uncertainties
This business carries with it a high level of risk and uncertainty, although the rewards can be
outstanding. Often there is a lack of liquidity in the Company's investments, which are quoted on
AIM, such that the Company may have difficulty in realising the full value in a forced sale.
Accordingly, an investment is only made after thorough research into both the management and the
business of the investment target, both of which are closely monitored thereafter. Furthermore, the
Company limits the amount of each investment, both as to the absolute amount and percentage of the
investee company. Details of other financial risks and their management are given in Note 19 to the
financial statements.
Results and dividends
The Company's results are set out in the profit and loss account. The financial statements for the
year ended 31 May 2012 were audited by Ashings Limited.
The directors do not recommend the payment of a dividend for the year.
Profit and loss account
for the year ended 31 May 2012
Year ended Year ended
31 May 2012 31 May 2011
GBP GBP
Operating income - 83,240
Direct costs - 4,917
Gross profit - 78,423
Administrative expenses (35,750) (41,216)
Operating (loss)/profit (35,750) 37,107
Interest receivable - -
Other interest payable 1,200 2,405
(Loss)/profit on ordinary activities before (36,950) 34,702
taxation
Tax on profit on ordinary activities - -
Loss/profit on ordinary activities after taxation (36,950) 34,702
Loss/profit per share - basic (0.07) pence 0.07 pence
There are no recognised gains and losses in either period other than the profit/loss for the period.
All operations are continuing.
Balance sheet
As at 31 May 2012
31 May 2012 31 May 2011
GBP GBP GBP GBP
Current assets
Debtors 4,749 4,670
Investments 96,500 96,500
Cash at bank 18,165 16,322
119,414 117,492
Creditors - amounts due within (35,536) (36,664)
one year
Net current assets 83,878 80,828
Total assets less current 83,878 80,828
liabilities
Share capital and reserves
Called-up share capital 483,750 479,750
Share premium account 507,250 471,150
Profit and loss account (910,503) (873,553)
Share based payments reserve 3,381 3,381
83,878 80,828
Equity shareholders' funds 83,878 80,828
Cash flow statement
for the year ended 31 May 2012
Year ended Year ended
31 May 2012 31 May 2011
GBP GBP
Net cash from operating activities (36,957) 74,589
Returns on investment and servicing
of finance:
Interest payable (1,200) (2,405)
Cash (outflow)/inflow before (38,157) 72,184
financing
Financing:
Issue of new equity 40,000 -
Loans received, less repayments - (78,076)
Increase/(decrease) in cash in the 1,843 (5,892)
year
Earnings per share Year ended Year ended
31 May 31 May
2012 2011
GBP GBP
The basic earnings per share is derived by dividing the
profit for the year attributable to ordinary shareholders
by the weighted average number of shares in issue.
(Loss)/profit for the year (36,950) 34,702
Weighted average number of Ordinary shares of GBP0.001 in 50,524,180 47,975,000
issue (0.07) pence 0.07 pence
(Loss) earnings per share - basic
Earnings per share fully diluted for all options and (0.05) pence 0.05 pence
warrants
The balance sheet at 31 May 2012, the profit and loss account, and the cash flow statement for the
year then ended have been extracted from the Company's statutory financial statements upon which the
auditor's opinion is unqualified.
The financial statements were approved by the Board of Directors on 12 September 2012.
The auditors, Ashings Limited, signed their report without qualification on 12 September 2012.
Copies of the report and financial statements will be posted to Shareholders and will be available
for a period of one month from the Chairman's office: 67 Park Road, Woking, Surrey, GU22 7DH
email: email@equityresources.co.uk and also on the PLUS Stock Exchange website www.plus-sx.com.
The Directors of Equity Resources plc are responsible for the contents of this announcement.
ENQUIRIES:
Equity Resources plc
John Watkins, Chairman Tel: 01483 771992
Email: john@equityresources.co.uk
St Helens Capital Partners LLP
Corporate Adviser Tel: 020 7369 6959
Duncan Vasey Email: duncanvasey@sthcp.com