RNS Number:7378I
Tiger Resource Finance PLC
14 March 2003
TIGER RESOURCE FINANCE PLC ("Tiger")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER, 2002
CHAIRMAN'S STATEMENT
2002 was a good year for Tiger, with strong profits realised from investments
and a significant 26% increase in net asset value (NAV) per share. This was
achieved during a period of global market volatility and investor uncertainty.
Your Board took the view that the volatility presented good opportunities,
particularly on the selling side and consequently a number of investments were
sold at their peak or close to it. It was thought better to sell near the top
and await for buying opportunities at or nearer the market bottom, which your
directors felt was not reached during the year in review. This strategy has
resulted in your company holding significant cash reserves at the year end, with
a sound portfolio and generally good prospects. We are not unique in this
philosophy and the better performing investment companies in all sectors have
adopted this strategy.
Gold has enjoyed an excellent rally, which your board views with caution. Recent
history suggests that major gold price rallies are short lived, driven by
perception and not sustainable fundamentals. This view underpins our strategy
for disposals and has allowed us to maximise profits in 2002. Our view on gold
has not changed and we believe that the current price increase is driven by
short-term economic and political events and a strong correction could occur
when global economic conditions improve.
We feel that it is unfortunate that gold acts as the barometer for the entire
mining industry and as such affects investor decisions, resulting in short-term
views taken on a long-term business.
We believe the outlook is positive for the year 2003 and our investment strategy
will embrace all levels of operation across a range of commodities and
countries.
Improving global economic conditions will impact favourably on copper, nickel,
zinc and other metals. China and South East Asia are already showing rapid
recovery with China leading the demand. The thirst for raw materials in China
will benefit the mining industry two-fold: a) through metal demand and b)
through company investment within China targeted towards developing in situ
resources.
We also feel positive for Platinum Group Metals (PGM) and particularly platinum.
On the supply side, we foresee delays in new production and older producing
mines proving more difficult to operate. Demand continues to be positive with
catalytic converters being the main user of this metal. In the mid-term the
emergence of the fuel cell will create even greater demand for this commodity.
Our view on diamonds and industrial minerals is generally neutral and any
investment will be driven by the specific opportunity.
Tiger will continue to seek out investments, which match our aforementioned
beliefs and provide above average upside potential with a well-understood and
manageable risk profile.
I would like to thank my fellow Directors and administrative staff for their
advice, support and commitment throughout the year.
Finally, let me reiterate my confidence in the future for Tiger, where I foresee
rapid NAV growth following the solid platform built in 2002.
R B Rowan - Chairman
PORTFOLIO REVIEW
(2002 and 2003 to date)
Shareholdings Number Cost Valuation Number Cost Valuation
31/12/2002 31/12/2002 31/12/2002 27/02/2003 27/02/2003 27/02/2003
# # # #
African Eagle Resources plc 1,241,174 112,264 93,088 1,241,174 112,264 83,779
Cluff Mining plc 100,000 178,477 170,000 100,000 178,477 159,000
Formation Capital Corp 1,350,000 161,777 106,720 1,350,000 161,777 143,100
Gold Fields Ltd 10,500 32,759 90,626 10,500 32,759 82,908
Ivanhoe Mines Ltd 460,000 348,494 594,550 460,000 348,494 657,340
Minmet plc 13,500,000 150,735 270,000 31,478,488 434,358 670,492
National Gold Corp (1) 500,000 33,632 67,194 - - -
Pacific North West Capital Corp 566,500 107,682 123,153 566,500 107,682 125,196
Rio Narcea Gold Mines Ltd 620,000 181,622 526,882 - - -
1,307,442 2,042,213 1,375,811 1,921,815
In addition, the Company continues to hold 250,000 National Gold Corp warrants
exercisable at C$0.25 per share until 29 April 2003 and at C$0.35 after this
date but before 29 April 2004.
Cluff Mining plc: London Stock Exchange (LSE) - CLU www.cluff-mining.com
In 2001, Tiger purchased 249,000 shares in Cluff Mining plc ("Cluff") at an
average price of #1.57. During the current year, Tiger sold 149,000 shares at an
average price of #2.29 realising a profit of #129,914 against the original
investment.
Cluff have two platinum group projects in the Bushveld complex of South Africa.
The Blue Ridge project is advanced and feasibility studies are underway. A
further project, Sheba's Ridge, is progressing favourably and indications are
that this project could progress to a significant mineral resource.
Tiger currently holds 100,000 shares in Cluff valued at #170,000 at the
year-end. Whilst the Cluff share price has currently declined to #1.59, we are
of the opinion that mid-term share price appreciation is probable.
Formation Capital Corporation: Toronto Stock Exchange (TSE) - FCO
www.formcap.com
Tiger holds 1.35 million shares in Formation Capital Corporation Inc
("Formation") purchased at a price of 11.9p per share at a total consideration
of #161,777.
Formation is a company listed on the TSE. Formation fully owns a primary cobalt
project in the Idaho Cobalt Belt in the United States.
The deposit is one of the only primary cobalt deposits under development in the
world today and is unique in that it is not associated with nickel. The deposit
contains independently calculated reserves of 2.1million tons, grading 0.68%
cobalt, 0.54% copper and 0.64 grams/gold per ton.
The current share price of C$0.25 values this investment at #143,100. Whist this
investment continues to under perform, improving economic conditions may impact
favourably on the share price.
Gold Fields Limited: Johannesburg Stock Exchange (JSE) - GFI
www.goldfields.co.za
During the year, the company sold 70,000 shares realising a gain of #312,302
against the original cost of the investment. The average selling price was #7.77
within a range of #5.61 to #11.29.
Gold Fields Limited ("Gold Fields") is one of the world's largest unhedged gold
companies with production exceeding 4 million ounces per year. Reserves and
resources amount to some 265 million ounces with operations based in South
Africa, Australia and Ghana.
The earnings potential for the company is excellent against current gold prices
although vulnerability exists against the SA Rand/US Dollar exchange rate and
escalating labour rates in South Africa.
At year-end, Tiger held 10,500 shares in Gold Fields at a cost of #32,759. The
current market value of this investment is #82,908 representing an unrealised
gain #50,149 against cost.
Ivanhoe Mines Limited: Toronto Stock Exchange (TSE) - IVN www.ivanhoe-mines.com
Tiger held on to its investment of 460,000 shares in Ivanhoe Mines Limited
("Ivanhoe").
Ivanhoe has its key exploration assets in Mongolia. The Oyu Tolgoi project has
undergone a major drilling programme of some 90,000 metres and is now
sufficiently advanced for technical and financial modelling to take place.
Various sources suggest a world class gold/copper resource has been defined with
potential for a 20 year joint open pit and underground mine.
The Kharmagtai project located some 130km from Oyu Tolgoi has "stand alone"
potential and early results are very encouraging.
This investment was purchased in 2001 for #348,494. The current price per share
is C$3.36, valuing the investment at #657,340 currently reflecting an unrealised
gain of #308,846 against cost.
National Gold Corporation: Toronto Stock Exchange (TSE) - NGT
www.nationalgold.com
Tiger realised its investment in National Gold Corporation in January 2003 by
selling its holding of 500,000 shares in the company and crystallising a gain of
#41,149 against the cost of acquiring the position.
Tiger currently holds warrants on 250,000 shares exercisable at C$0.25 per share
until 29 April 2003 and at C$0.35 per share after this date but before 29 April
2004.
Pacific North West Capital Corp: Toronto Stock Exchange (TSE) - PFN
www.pfncapital.com
Pacific North West Capital Corp ("PFN") is exploring for platinum group metals
close to Sudbury, the nickel/copper mining region of Ontario, Canada. The
company has Anglo Platinum as partners who have spent over US$10 million on the
project to date.
The company has drilled over 200 drill holes and a significant resource is being
developed.
Despite the aforementioned positive news, the share price continues to
disappoint. It is considered that increasing the reserve base along with an
improving platinum group metal demand may result in an improved share price.
At year end, Tiger held 566,500 shares in PFN purchased at #107,682 (19p per
share) and valued at #123,153 on 31 December 2002. This stock is currently
valued at C$0.52 per share reflecting an unrealised gain of #17,514.
Rio Narcea Gold Mines Limited: Toronto Stock Exchange (TSE) - RNG
www.rionarcea.com
Tiger acquired its holding of 1,020,000 shares in Rio Narcea in January 2002 at
C$0.67 per share. 400,000 shares were sold in May 2002 crystallising a gain of
#187,990.
A further 620,000 shares were sold in January 2003 at an average price of C$2.36
realising a gain of #403,065 compared to the original cost of the investment.
Minmet plc: London Stock Exchange (LSE) - MNT www.minmet.ie
Tiger purchased 13.5 million shares in Minmet plc ("Minmet") during the year. In
January 2003, Tiger acquired a further 17.97 million shares taking its total
holding in Minmet to 31.47 million shares purchased at a total cost of #434,358
being an average price of 1.38p per share. This investment represents a 6.31%
interest in the equity of Minmet.
The company's projects include "Sungem" zinc and a diamond bulk sampling plant
in Coromandel - Brazil, El Aguila (silver-lead-zinc) - Peru, Minas de Oro
(copper-gold) - Honduras and copper gold concessions - Dominican Republic.
Minmet suffered a drastic decrease in its share price due to problems with a
gold operation in Brazil. The company has significant cash reserves and a
portfolio of promising exploration projects.
The current price of 2.13p per share results in an unrealised gain of #236,134
and a return of 54% against the original investment.
African Eagle Resources plc: Trading on OFEX (OFEX) - AER www.twigg.com
African Eagle Resources plc ("African Eagle") has base metal projects in
Tanzania, Mozambique and Zambia, with Tanzania being the most advanced. Gold
Fields are joint venturing the gold projects in Tanzania and Avmin are joint
venturing projects in Zambia.
Tiger has acquired 1.24 million shares in African Eagle (formerly Twigg Minerals
plc) representing 4.2% of the issued ordinary share capital of the company for a
consideration of #112,264. The current price of 6.75p values this investment at
#83,779 representing an unrealised loss of #28,485.
It is felt that African Eagle has good prospects, which will impact favourably
on the share price as exploration results emerge.
PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 DECEMBER 2002
Notes 2002 2001
# #
Administrative expenses (212,751) (121,048)
OPERATING LOSS 2 (212,751) (121,048)
Investment income 3 563,528 (96,641)
Interest receivable 72,594 96,390
OPERATING PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE TAXATION 423,371 (121,299)
Tax on profit/(loss) on ordinary activities 4 (72,943) (26,217)
PROFIT/(LOSS) ON ORDINARY 10
ACTIVITIES AFTER TAXATION
FOR THE YEAR 350,428 (147,516)
Basic earnings/(loss) per share 5 0.16p (0.07p)
Diluted earnings/(loss) per share 5 0.16p (0.07p)
All profits are derived from continuing operations
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
YEAR ENDED 31 DECEMBER 2002
Notes 2002 2001
# #
Profit/(loss) for the year 10 350,428 (147,516)
Unrealised gains on fixed asset investments 730,591 -
Unrealised losses on fixed asset investments (120,483) -
Tax on gains/losses on fixed asset investments 4 (15,124) -
Total recognised gains/(losses) 945,412 (147,516)
BALANCE SHEET
AS AT 31 DECEMBER 2002
Notes 2002 2001
# #
FIXED ASSETS
Investments 6 2,042,213 2,039,129
CURRENT ASSETS
Debtors 7 29,739 5,126
Cash at bank 2,378,708 1,269,195
2,408,447 1,274,321
CREDITORS: amounts falling due within one year 8 (137,390) (57,297)
NET CURRENT ASSETS 2,271,057 1,217,024
TOTAL ASSETS LESS CURRENT LIABILITIES 4,313,270 3,256,153
Represented by:
CAPITAL AND RESERVES
Called-up share capital 9 2,345,819 2,234,114
Share premium account 10 1,550,856 1,550,856
Revaluation reserve account 10 734,770 -
Profit and loss account 10 (318,175) (528,817)
EQUITY SHAREHOLDERS' FUNDS 11 4,313,270 3,256,153
CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2002
Notes 2002 2001
# #
Net cash outflow from operating activities 13 (224,038) (55,696)
Returns on investment and servicing of finance
Interest received 51,294 96,390
Other investment income received 10,805 -
Taxation
Corporation tax paid - -
Capital expenditure and financial investment
Payments to acquire fixed asset investments (736,247) (2,168,254)
Receipts from sale of fixed asset investments 2,007,699 32,583
Net cash inflow/(outflow) from capital expenditure 1,271,452 (2,135,671)
and financial investment
Financing 14
Proceeds from share issue - 3,474,889
Expenses paid in connection with share issue - (111,827)
Net cash inflow from financing - 3,363,062
Increase in cash in the year 15 1,109,513 1,268,085
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2002
1. ACCOUNTING POLICIES
Accounting convention
The financial statements are prepared under the historical cost convention as
modified to include the revaluation of fixed asset investments. They are
prepared in accordance with applicable accounting standards and are denominated
in Pounds Sterling (#).
Investments
Investments made by the Company are carried at market value.
Unrealised gains or losses on the revaluation of investments are reflected in
the statement of total recognised gains and losses, except where the unrealised
loss indicates a permanent diminution in the value of the investment, in which
case a current year loss is reflected in the profit and loss account and a loss
arising in previous years is dealt with by a transfer from the revaluation
reserve to the profit and loss reserve.
A gain or loss realised on the disposal of an investment is recorded in the
profit and loss account to the extent of the difference between the disposal
proceeds and the carrying value. In addition, any amount in the revaluation
reserve relating to the investment disposed of is transferred from the
revaluation reserve to the profit and loss account.
Foreign currency
Assets and liabilities denominated in foreign currency are translated into
sterling at the rates of exchange ruling at balance sheet date. Exchange gains
or losses are recorded in the profit and loss account.
Taxation
Taxation arising in relation to gains or losses recognised in the profit and
loss account is recognised in the profit and loss account. Taxation in relation
to other gains or losses is recognised in the statement of total recognised
gains and losses.
FRS 19, deferred tax, was adopted during the year, however, no restatement of
prior-period amounts resulted.
Deferred taxation is provided in full on timing differences that result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements.
Deferred tax is not provided on timing differences arising from the revaluation
of fixed asset investments, unless there is a binding contract to dispose of
these assets. Deferred tax assets are recognised to the extent that it is
regarded as more likely than not that they will be recovered. Deferred tax
assets and liabilities are not discounted.
2. OPERATING LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION
2002 2001
# #
This is stated after charging:
Auditors' remuneration - audit fees 9,000 1,000
Directors' emoluments 74,356 22,500
As Tiger Resource Finance plc has not carried out business in two or more
business classes or geographical areas which differ substantially from each
other, the directors have not presented segmented information.
There were no employees in the current or prior year.
3. INVESTMENT INCOME
2002 2001
# #
Profit/(loss) on sale of fixed asset investments 552,723 (23,267)
Unrealised loss on fixed asset investments - (73,374)
Other investment income 10,805 -
563,528 (96,641)
4. TAX
(i) Analysis of tax charge on profit on ordinary activities
2002 2001
# #
United Kingdom corporation tax at 30% (2001 - 30%)
Based on the profit/(loss) for the year (99,160) (26,217)
Adjustment in respect of prior years 26,217 -
(72,943) (26,217)
(ii) Factors affecting tax charge on profit for the current year
The tax assessed for the year is lower than that resulting from applying the
standard rate of corporation tax in the UK: 30% (2001 - 30%).
The differences are explained below:
2002 2001
# #
Profit on ordinary activities before tax 423,371 (121,299)
Tax at 30% thereon: (127,011) 36,390
Effects of:
Expenses not deductible for tax purposes - -62,607
Indexation allowances 11,170 -
Utilisation of tax losses not previously recognised 14,347 -
UK dividend income 2,334 -
Prior-year period adjustments 26,217 -
Current tax charge for year (72,943) (26,217)
(iii) Factors that may affect the future tax charge
Deferred tax has not been provided on revaluation of investments. This tax will
only become payable if the assets are sold. The estimated amount of tax that
would become payable in these circumstances based on the revalued carrying
amounts is #220,000.
(iv) Analysis of tax in statement of total recognised gains and losses
2002 2001
# #
United Kingdom corporation tax at 30%
(2001 - 30%) based on the profit for the year (15,124) -
Adjustment in respect of prior years - -
(15,124) -
5 EARNINGS PER SHARE
2002 2001
# #
Profit/(loss) for year after tax 350,428 (147,516)
Weighted average number of shares 225,273,132 223,411,371
Diluted weighted average number of shares 225,273,132 223,411,371
Basic earnings/(loss) per ordinary share 0.16p (0.07p)
Diluted earnings/(loss) per ordinary share 0.16p (0.07p)
The 20 million share options in issue (note 9) are not dilutive as these are
exercisable at prices in excess of the market price of the company's shares at
31 December 2002.
6. INVESTMENTS
2002 2001
Market Market
Cost Value Cost Value
# # # #
African Eagle Resources plc 112,264 93,088 - -
AuIron Energy Limited - - 230,000 143,152
Brancote Holdings plc - - 256,293 222,250
Cluff Mining plc 178,477 170,000 390,057 538,462
Formation Capital Corp 161,777 106,720 245,176 151,620
Gold Fields Limited 32,759 90,626 251,152 266,020
Ivanhoe Mines Limited 348,494 594,550 348,494 415,292
Minmet plc 150,735 270,000 - -
National Gold Corp 33,632 67,194 145,135 155,508
Pacific North West Capital Corp 107,682 123,153 246,196 146,825
Rio Narcea Ltd 181,622 526,882 - -
1,307,442 2,042,213 2,112,503 2,039,129
There were no unquoted investments held at 31 December 2002 (2001:None).
7. DEBTORS
2002 2001
# #
Other debtors 29,739 5,126
8. CREDITORS: amounts falling due within one year
2002 2001
# #
Trade creditors and accruals 19,610 31,080
Other taxes and social security 3,496 -
Corporation tax 114,284 26,217
137,390 57,297
9. CALLED UP SHARE CAPITAL
2002 2001
# #
Authorised:
1,000,000,000 ordinary shares 1p each 10,000,000 10,000,000
Allotted, called-up and fully paid:
234,581,939 ordinary shares of 1p each 2,345,819 2,234,114
(2001 - 223,411,371)
At 31 December 2002 and 27 February 2003, 2,750,000 ordinary shares are subject
to option at 2p per share and 300,000 ordinary shares are subject to option at
1.5p per share. These options expire on 31 December 2003.
A further 16,950,000 options are exercisable on ordinary shares at 1.25p per
share with an expiry date of 29 May 2012.
On 6 November 2002, 11,170,568 ordinary shares were issued at 1p to acquire
shares in African Eagle Resource plc (note 16).
10. RESERVES
Share Profit and Revaluation Total
Premium Loss Account Reserve
# # # #
At 1 January 2002 1,550,856 (528,817) - 1,022,039
Profit for the year - 350,428 - 350,428
Other recognised gains and losses - - 610,108 610,108
Tax on other previously recognised - (15,124) - (15,124)
gains and losses
Realised revaluation deficit - (124,662) 124,662 -
At 31 December 2002 1,550,856 (318,175) 734,770 1,967,451
The realised revaluation deficit relates to amounts included in the revaluation
reserve at 31 December 2001 which, together with the allocated tax charges, have
been realised in 2002 when the related investments were sold.
11. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2002 2001
# #
Profit/(loss) for the financial year 350,428 (147,516)
Net unrealised gains on investments 594,984 -
Issue of shares 111,705 -
Costs associated with placing and open offer - (111,827)
Net increase/(decrease) in shareholders' funds 1,057,117 (259,343)
Opening shareholders' funds 3,256,153 3,515,496
Closing shareholders' funds 4,313,270 3,256,153
12. CURRENCY EXPOSURES
The Directors manage the risk of the business with reference to prevailing
market conditions, however, the directors do not use financial instruments to
manage the financial risk posed to the company by adverse currency or interest
movements.
Interest rate and currency profile
Non-interest
bearing assets
Financial assets Floating rate
Total financial Equity
assets investments
# # #
At 31 December 2002
Sterling 2,911,796 2,378,708 533,088
SA Rand 90,626 - 90,626
C $ 1,418,499 - 1,418,499
4,420,921 2,378,708 2,042,213
At 31 December 2001
Sterling 2,173,059 1,269,195 903,864
SA Rand 266,020 - 266,020
C $ 869,245 - 869,245
3,308,324 1,269,195 2,039,129
All short-term debtors and creditors are denominated in Pounds Sterling.
There are no financial liabilities.
There are no hedging activities.
13. NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2002 2001
Operating loss (212,751) (121,048)
(Decrease)/increase in debtors (3,313) 45,971
(Increase)/decrease in creditors (7,974) 19,381
Net cash outflow from operating activities (224,038) (55,696)
14. MAJOR NON-CASH MOVEMENTS
During the year 11,170,568 shares were issued at par during the year as
consideration for the purchase of 1,274,174 shares in African Eagle Resources
plc. This transaction did not result in a movement of cash.
15. ANALYSIS OF NET CASH MOVEMENT IN THE YEAR
2002 2001
Increase in cash in the year 1,109,513 1,268,085
Net funds at 1 January 2002 1,269,195 1,110
Net funds at 31 December 2002 2,378,708 1,269,195
16. RELATED PARTY TRANSACTIONS
(1) On 6 November 2002, Tiger purchased 1,241,174 shares in African Eagle
Resources plc ("African Eagle") from Ronald Bruce Rowan (Director). The
investment represented approximately 4.2% of the issued share capital of the
company at that date.
The African Eagle shares were purchased at the prevailing market price of 9p per
share and the consideration was satisfied by issuing 11,170,568 new ordinary
shares in Tiger at its market value of 1p at that date. The new Tiger shares
commenced trading on 13 November 2002.
(2) As detailed in the director's report, Lion Mining Finance Limited, a
company in which Colin Bird is director and shareholder, has provided management
services to the company amounting to #31,500 plus VAT in the year.
(3) Michael Nolan is a director of Minmet plc. Minmet plc has provided
management services to the company amounting to #9,000 in the year.
For further information please contact:
Colin Bird
Tiger Resource Finance plc
Tel: + 44 20 7590 8806
14 March, 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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