Widespread Portfolios Market Announcement
Interim
Report
for the 6 months to 30
September 2012
Directors:
Dene Biddlecombe (Chair), Chris Castle, Jill
Hatchwell, Linda Sanders, Denis Kelly
Website:
www.widespread.co.nz <http://www.widespread.co.nz/>
Headquarters: Level 1, 93 The Terrace, Wellington, NZ
Postal: P O Box 231, Takaka 7142, NZ
Registered office: 1232 State Highway 60, Onekaka, Golden Bay 7172, NZ
Share registry: Link Market Services, 138 Tancred St, Ashburton
Auditors: WHK, 45
Knights Rd, Lower Hutt
Legal Advisers:
Duncan Cotterill, Tower Building 50 Customhouse Qy,
Wellington
Bankers: ANZ Banking Group (New Zealand) Ltd, 215-229 Lambton Qy, Wellington
Financial
Result
Your directors submit the unaudited
financial statements of Widespread Portfolios Limited for
the six months to 30 September 2012. The trading result for
the period was a loss of $484,000 (2011 loss $1,324,000).
Corporate Governance
We are
delighted to welcome Dene Biddlecombe to the Board as our
new Chairman.
Dene is a Chartered Accountant with an MBA
from Otago University. He has a wealth of experience in
senior management roles in the public and private
sectors.
Dene recently resigned as Chief
Executive Officer of NZAX listed Pulse Utilities New Zealand
Ltd after leading the company through four years of
tremendous growth, turning Pulse into a retail electricity
company with more than 32,000 customers and total annual
revenue of $55 million-plus. The company’s performance was
recently recognised by winning the 2012 Deloittes Fast-50
awards.
Dene has held a number of senior
executive positions including Chief Executive Officer of
NZX-listed Horizon Energy Distribution Ltd in Whakatane and
Chief Financial Officer and Company Secretary for NIWA where
he was also responsible for the coordination of research and
commercial activities in the United States. He was also
Chairman of Calgary Petroleum, which was sold to Tag Oil in
2006.
Share split effect on price
performance
The directors are delighted that the decision to split Widespread shares has proven to be successful. At the time when the share split was made (August 8, 2012) our shares had traded for the previous six months at an average discount of 72% to their net asset value. Since the split, the discount has steadily reduced, has averaged 20.3% for the last four weeks and is currently 13.6%.
Further, since late July the market capitalisation (total on-market value) of the company has increased from $2.8 million to $6.5 million.
Share liquidity has also increased with the monthly value of trades since the split -over nine times higher than for the previous 12 months.
While the split transformed our stock back into the
genuine penny stock it was for many years, the market value
now better reflects the value of the assets held by the
company, and increased volumes have made it easier for our
shareholders to turn these values into real cash.
Chatham Rock Phosphate
Operations Highlights
The Chatham Rock Phosphate team has made
huge strides over the past six months. Key achievements
include:
v Encouraging plume modeling results
v Beneficiation tests yield promising results
v CRP centre-stage at UMI conference
v Mining licence application filed
v Edison research report values CRP at unrisked $1.87 a share
v Major economic benefits for NZ from project says NZIER
v Royal Boskalis takes 20% holding
v TSX.V plans well advanced for dual listing
v Namibian phosphate ground pegged
v Najib Moutia joins team as VP Strategy & Marketing
v Extra money spent on environmental research
CRP’s shares reached a new high
price of 46c on 9 October – doubling in two weeks – on
the back of several key milestones, since settling around
the 40c level.
The turning point in our market value was
the issue of the Edison report. Share volumes in the
following month exceeded those of the previous 12 months by
30% and our community of shareholders increased by 90 to
393. At 46c, the company’s market value is nearly $59
million, compared with $8.5 million in January 2012 and $22
million before the issue of 30 million shares on 24
September to Royal Boskalis and Subsea Investments..
Since then the company has:
v applied for a mining
licence with New Zealand Petroleum and Minerals
v
received a favourable report by Edison Investment Research
stating the shares are worth $1.87 on an un-risked basis,
and
v spent several days on Chatham Island widely
consulting with a range of community and industry
groups
v updated key government Ministers on progress.
CRP is putting a lot of effort into building strong
relationships with all of its stakeholders – informing
them about the project, seeking their input and keeping them
advised of our project. These have included non-government
organisations, officials and advisers, Iwi, media, and our
shareholders.
For example, the visit to the Chatham
Islands was a great opportunity to provide the community
with information on our plans and to listen to their ideas.
We were also able to address any concerns they had and
provide information on a wide range of issues. We received a
warm welcome and were able to look at potential ways the
project could assist the Chatham community.
The re-rating
of CRP shares is one of the more satisfying outcomes of all
of the hard work put in by the team. We have generated a lot
of momentum for this project and remain on track to achieve
our ultimate goal of going into production on or before New
Year 2015.
To achieve that we need to:
v Raise the
last $US9.5 million needed to finance the work that will
take us to the start of production.
v Refine our mining system design so we can start detailed designs early in 2013.
v Complete our environmental consent application to submit as soon as the EEZ regulations are complete, hopefully in the first half of 2013.
v Modify the Royal Boskalis ship that will mine the rock phosphate (planned for 2013-14).
v Receive our mining licence and marine
consents (expected during 2013).
Asian Mineral
Resources
It is gratifying to see the
progress being achieved by Asian Mineral Resources..
Widespread has held shares in AMR for more than a decade and
the impacts of the 2008 global financial crisis and changes
to the Vietnamese export tariff regime seriously affected
the viability of the project for some time.
The company is now forging ahead with a revamped Board and a strong injection of new capital from Pala Investments and on-site development of the Ban Phuc nickel mine project is now in its advanced stages, with underground and surface infrastructure near completion and production planned to occur in June 2013.
Ban Phuc remains the only project of its kind in Vietnam and represents a unique platform to develop a significant nickel industry in Vietnam.
AMR recently commissioned Runge to carry out a conceptual study for a smelting operation. The results from the study indicated that the construction of a smelter would produce attractive economics for the project.
The
incorporation of a smelting operation is consistent with the
Government of the Socialist Republic of Vietnam’s desire
for more in-country processing and its national mineral
resources strategy to 2020, with a vision to 2030, adopted
in December 2011, where one of the key objectives is the
construction of a smelter in the Son La Province.
Oil and Gas Investments
Kotuku
We remain
excited by the possibilities of the West Coast Kotuku oil
seeps (PEP 38526) exploration permit that Widespread
holds.
In July we undertook a survey to measure the
resistivity of hydrocarbon-bearing rocks. The results of
the resistivity survey and re-processing of seismic data
will help identify drilling targets.
We are working with
New Zealand Petroleum and Minerals to seek to extend our
permit tenure and developing an exploration programme to
identify the best way of getting to the source of the
resource. Our work streams include data analysis and seismic
processing of information and a site visit in November.
We are also recently undertaken a site visit to meet
with local people and update them on our
plans.
Akura Widespread
holds approximately 8.3 % of Akura Limited, a Fijian-based
petroleum exploration company. Akura was granted three Oil
Exploration Licences (OELs) totalling ~17,000 km2 in August,
2009 and has carried out a detailed petroleum data recovery
exercise, reprocessing, digitising and reinterpretation of
previous seismic data and a review of past oil and gas
exploration data, including the drilled wells and reported
seeps.
The company is continuing to explore
possible funding options for Akura, including farm-in
partners.
King Solomon Mines
(KSO)
This summer’s drilling programme has
focused on the Mudhouse and Naogaoshandu prospects in Inner
Mongolia, China.
A drilling programme ending in November at Mudhouse has been assessing the continuity of the mineralisation required for a preliminary resource assessment. Past drilling assays have highlighted high-grade gold intercepts, resulting in an exploration target of 100-200koz Au (1-1.5Mt at 3-5 g/t Au).
At the Naogaoshandu Gold project, KSO identified rock chip containing high-grade and visible gold samples at the East Ridge prospect. A programme of trenching has been completed, followed by an IP survey and drill programme.
Assay results are awaited.
Widespread’s Outlook
The
outlook for Widespread Portfolios remains positive. We have
enough cash or near cash to sustain operations at present
levels without raising further capital. While our key focus
remains with advancing the Chatham Rise project, we also
have a sound portfolio and we are well overdue for good news
in respect of several of these investments. We are confident
that one or more of these events will occur during the
coming months.
For and on behalf of the
Board,
Dene Biddlecombe (Chairman) Chris Castle
(Chief Executive)
25 November 2012
NZX Format Result Summary
Results for announcement to the market
Reporting Period Six months to 30 September 2012
Previous Reporting Period Six months to 30 September
2011
Amount (000s) Percentage change
Revenue from ordinary activities $201, $250 (20%)
Profit (loss) from ordinary activities after tax
attributable to security holder. ($484), ($1,324) 63%
Net profit (loss) attributable to security holders.
($484), ($1,324) 63%
Interim/Final
Dividend Amount per security Imputed amount per security
It is not proposed to pay a dividend for the
reporting period. N/A N/A
Record Date
Not Applicable
Dividend Payment Date Not
Applicable
Comments: A brief There has been no major changes or trends in Widespread Portfolios’ business subsequent to 30 September 2012.
Widespread
Portfolios does not operate any dividend or distribution
reinvestment plan. Widespread Portfolios has not gained
or lost control over an entity during the Reporting Period.