Interim Results

Oracle Coalfields PLC

14 September 2016

ORACLE COALFIELDS PLC

("Oracle" or the "Company" or the "Group")

UNAUDITED INTERIM RESULTS FOR THE 6 MONTHS TO 30 JUNE 2016

Oracle Coalfields PLC (AIM:ORCP), the UK energy  developer of a combined lignite coal mine and mine mouth power plant located in the Thar desert in the south-eastern Sindh Province of Pakistan, today announces its unaudited interim results for the six months ended 30 June 2016.

Highlights

·    Notification by the Energy Department, Government of Sindh  for the extension of the applicability of US$ based 20% internal rate of return to all coal mining projects based on indigenous Thar coal to the companies which achieve financial close before 31 December 2016.

·    Determination by the Thar Coal and Energy Board following a coal price petition, based on feasibility studies, of a coal price of US$60.23/tonne.

·    The signing of a Shareholder Framework Agreement, subject to conditions precedent, whereby a consortium of new and existing Chinese partners will take 70% equity in the Company's subsidiaries in Pakistan, in order to advance the development of the project.

Shahrukh Khan, CEO of Oracle, said,

"The power shortage in Pakistan remains acute and the Government remains steadfast in its objective of dealing with the country's energy crisis. The Government continues to support the Company in the development of the coal mine and power project.

"Following the signing of the Shareholder Framework Agreement, we, with our Chinese partners, are currently in the process of agreeing a Shareholder Agreement and details of EPC contracts for both the mine and the power plant."

CHAIRMAN'S STATEMENT FOR THE 6 MONTHS TO 30 JUNE 2016

Chairman's Statement

I am pleased to present the Company's results for the six months ended 30 June 2016.

Operational Update and Looking Ahead

We continue to make progress towards bringing the Thar coalfield Block VI power project to a financial close  The power shortage in Pakistan continues and it is clear that development of Thar is the substantive medium-term solution. 

The Governments, federal and provincial, have put in place fiscal incentives and also a "cost-plus" arrangement under which holders of mining leases in the Thar desert are allowed a coal price and electricity tariff that give developers a project based internal rate of return ("IRR") of 20%, in US dollar terms.  The Thar Coal and Energy Board has now made an initial determination of our coal price according to the Rules promulgated in 2014.  This determination, based on our mine feasibility study, was at a coal price of US$60.23/tonne.  To ensure that the IRR is maintained at 20% throughout the life of the project, the Rules allow for further coal price petitions at contract stage, financial close, commercial operations date and periodically thereafter through the lifetime of the project, to reflect actual costs.

The electricity tariff is similarly determined.  Our power plant project is registered with the Private Power and Infrastructure Board, Ministry of Water and Power Government of Pakistan and we shall be submitting our initial electricity tariff petition shortly to the   National Electric Power Regulatory Authority.  We shall then open discussions with the National Transmission and Despatch Company ("NTDC"), who operate the National Grid, to conclude a Power Purchase Agreement ("PPA") and an Implementation Agreement with the Government of Pakistan which, inter alia, will guarantee payment for power delivery under the PPA. 

In addition to the various Government incentives, the China Pakistan Economic Corridor has been set up with the aim of Chinese banks providing finance along with Chinese governmental support in approved energy and infrastructure projects.  We understand the total financing to be made available is in the order of US$46 billion across a number of projects; our Thar Block VI project is included on the list of approved projects.  This will assist in expediting both Pakistani and Chinese Government approvals that are required for our project.    

The Environmental and Social Impact Assessment for the mine was approved in 2013 and for the power plant, it is near to completion.  Preparation of resettlement of project affected people has been initiated; and the land ownership survey is underway, in accordance with the Government of Sindh Resettlement Policy Framework issued in 2015.

NTDC are responsible for the construction and operation of high voltage transmission lines to link Thar power plants with the National Grid; approximately 80 kilometres are required to make the connection.  NTDC is expected to complete this transmission link within schedule.     

The power plant will require water for its operation and the mine will have a surplus of water from its dewatering operations.  The Government of Sindh, Energy Department, are responsible for the provision of water, where there is a shortage, and also for the evacuation of any surplus.  The construction of a fresh water supply from the River Indus is in progress. 

We signed a Shareholders Framework Agreement subject to conditions precedent, with new and existing Chinese partners in June 2016.  Under this Agreement, it is proposed that the Chinese partners will take a 70% equity interest in the project and will act as Engineering, Procurement and Construction (EPC) contractors for the mine and the power plant. We are now working towards finalising a Shareholder Agreement and details of EPC contracts for both the mine and the power plant.  Our Chinese partners are taking the lead in discussions on debt financing with Sinosure, the Chinese Export and Credit Insurance Corporation.

Summary of Results

As expected for a mining company at our stage of development, our financial results for the six months to 30 June 2016 show an operational loss for the Oracle Coalfields PLC Group of Companies after taxation of £448,139 (2015: loss of £528,476). At the period end, the Group had cash and cash equivalents of £1,098,594 (2015: £1,469,573) and net assets of £6,009,371 (2015: £6,706,723).  The basic loss per share was 0.05p (2015: loss 0.07p). 

Broader Outlook

Inevitably projects of this nature take time to bring to fruition.  The development of Thar is a significant and sustainable element in Pakistan's longer term solution to the country's present energy crisis; speedy implementation is in the national interest.

The Board extends its appreciation to the Thar Coal Energy Board, the Energy Department, the Coal Mines Department and Government of Sindh, as well as the Ministry of Water and Power (Government of Pakistan) for their continued support. The Board also continues to be very grateful for the patience and support of our shareholders.

Anthony Scutt

Chairman of the Board - Oracle Coalfields PLC

Date: 13 September 2016

CONSOLIDATED INCOME STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2016

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                             6 months to       6 months to       Year ended

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                                                           £                      £                      £

CONTINUING OPERATIONS

Revenue                                                                                 -                       -                       -

Other operating income                                                            -                   768                  768

Administrative expenses                                               (452,710)          (531,781)          (980,819)

OPERATING LOSS                                                     (452,710)          (531,013)          (980,051)

Finance costs                                                                         -                       -                       -

Finance income                                                                4,571                2,537                7,275

LOSS BEFORE TAX                                                    (448,139)          (528,476)          (972,776)

Tax                                                                                        -                       -                       -

LOSS FOR THE PERIOD                                             (448,139)          (528,476)          (972,776)

Loss attributable to:

Owners of the parent                                                    (447,972)          (528,476)          (972,190)

Non-controlling interests                                                     (167)                      -                 (586)

                                                                                  (448,139)          (528,476)          (972,776)

Loss per share attributable to the ordinary equity

 holders of the parent:

Basic and diluted (pence)                                                  (0.05)                (0.07)               (0.12)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE 6 MONTHS ENDED 30 JUNE 2016

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                             6 months to       6 months to       Year ended

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                                                           £                      £                      £

LOSS FOR THE PERIOD                                             (448,139)          (528,476)          (972,776)

OTHER COMPREHENSIVE INCOME                                                                                        

Item that may be reclassified subsequently

 to profit or loss:

Exchange difference arising on translation of foreign

 operations                                                                   157,012             (23,503)             11,572

Income tax relating to components of other

 comprehensive income                                                            -                       -                       -

OTHER COMPREHENSIVE INCOME/(LOSS)

 FOR THE PERIOD, NET OF INCOME TAX                    157,012             (23,503)             11,572

TOTAL COMPREHENSIVE LOSS

 FOR THE PERIOD                                                      (291,127)          (551,979)          (961,204)

Total comprehensive income attributable to:

Owners of the parent                                                    (305,283)          (551,979)          (960,618)

Non-controlling interests                                                  14,156                       -                 (586)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2016

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                                       As at                As at                As at

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                               Notes                    £                      £                      £

ASSETS

NON-CURRENT ASSETS

Intangible assets                                                        4,476,908          3,960,131         4,170,073

Property, plant and equipment                                         24,640                1,688              23,532

Loans and other financial instruments               3            377,266                       -            338,676

                                                                                4,878,814          3,961,819         4,532,281

CURRENT ASSETS

Trade and other receivables                                            114,342          1,020,411              87,604

Cash and cash equivalents                                          1,098,594          1,469,573         1,860,662

Restricted bank deposits                                 3                       -            360,000                       - 

                                                                                1,212,936          2,849,984         1,948,266

TOTAL ASSETS                                                        6,091,750          6,811,803         6,480,547

EQUITY

SHAREHOLDERS' EQUITY

Share capital                                                  4            911,783            911,783            911,783

Share premium                                                         10,900,723        10,897,723        10,900,723

Share scheme reserve                                                   120,194            149,782            149,782

Translation reserve                                                          24,079           (163,167)          (132,534)

Accumulated losses                                                  (5,960,348)        (5,095,127)       (5,534,399)

                                                                                5,996,431          6,700,994         6,295,355

Non-controlling interest                                                    12,940                5,729                5,143

TOTAL EQUITY                                                         6,009,371          6,706,723         6,300,498

LIABILITIES

CURRENT LIABILITIES

Trade and other payables                                                82,379            105,080            180,049

TOTAL LIABILITIES                                                      82,379            105,080            180,049

TOTAL EQUITY AND LIABILITIES                             6,091,750          6,811,803         6,480,547

CONSOLIDATED UNAUDITED STATEMENT OF CHANGES IN EQUITY

FOR THE 6 MONTHS ENDED 30 JUNE 2016

                                                                                                                                      Share

                                                               Share     Accumulated               Share            scheme

                                                              capital              losses           premium             reserve

                                                                   £                      £                      £                      £

Balance at 31 December 2014             389,009        (4,562,209)         8,346,733              63,070

Changes in equity

Issue of share capital                             522,774                       -          2,875,255                       -

Costs associated with share issue                    -                       -           (324,265)             86,712

Loss for the period                                           -           (528,476)                      -                       -

Other comprehensive income                            -               (4,442)                      -                       -

Balance at 30 June 2015                     911,783        (5,095,127)       10,897,723            149,782

Changes in equity

Issue of share capital                                       -                       -                       -                       -

Costs associated with share issue                    -                       -                3,000                       -

Loss for the period                                           -           (443,714)                      -                       -

Other comprehensive income                            -                4,442                       -                       -

Balance at 31 December 2015             911,783        (5,534,399)       10,900,723            149,782

Changes in equity

Release of charge for lapsed options                  -              29,588                       -             (29,588)

Further investment in subsidiary                        -               (7,565)                      -                       -

Loss for the period                                           -           (447,972)                      -                       -

Other comprehensive income                            -                       -                       -                       -

Balance at 30 June 2016                     911,783        (5,960,348)       10,900,723            120,194

                                                       Translation                          Non-controlling                 Total

                                                             reserve                 Total             interest               equity

                                                                   £                      £                      £                      £

Balance at 31 December 2014            (144,106)        4,092,497                5,729         4,098,226

Changes in equity

Issue of share capital                                       -         3,398,029                       -         3,398,029

Costs associated with share issue                    -           (237,553)                      -           (237,553)

Loss for the period                                           -           (528,476)                      -           (528,476)

Other comprehensive income                  (19,061)            (23,503)                      -             (23,503)

Balance at 30 June 2015                    (163,167)        6,700,994                5,729         6,706,723

Changes in equity

Issue of share capital                                       -                       -                       -                       -

Costs associated with share issue                    -                3,000                       -                3,000

Loss for the period                                           -           (443,714)                 (586)          (444,300)

Other comprehensive income                   30,633              35,075                       -              35,075

Balance at 31 December 2015            (132,534)        6,295,355                5,143         6,300,498

Changes in equity

Release of charge for lapsed options                  -                       -                       -                       -

Further investment in subsidiary               13,924                6,359               (6,359)                      -

Loss for the period                                           -           (447,972)                 (167)          (448,139)

Other comprehensive income                  142,689            142,689              14,323            157,012

Balance at 30 June 2016                       24,079         5,996,431              12,940         6,009,371

CONSOLIDATED CASHFLOW STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2016

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                             6 months to       6 months to       Year ended

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                               Notes                    £                      £                      £

Cash flows from operating activities

Cash generated from operations                       1           (614,822)          (590,188)          (958,952)

Net cash used in operating activities                              (614,822)          (590,188)          (958,952)

Cash flows from investing activities

Purchase of intangible fixed assets                                (155,004)          (175,869)          (351,000)

Purchase of tangible fixed assets                                      (1,158)                 (948)            (22,975)

Cash placed on restricted deposit                                             -           (360,000)          (332,116)

Interest received                                                               4,571                2,537                7,275

Net cash used in investing activities                               (151,591)          (534,280)          (698,816)

Cash flows from financing activities

Share issue                                                                            -          2,449,109         3,369,500

Cost of share issue                                                                  -           (237,553)          (234,553)

Net cash from financing activities                                              -          2,211,556         3,134,947

(Decrease)/Increase in cash

 and cash equivalents                                                (766,413)         1,087,088         1,477,179

Cash and cash equivalents at beginning

 of period                                                        2         1,860,662            383,063            383,063

Effect of foreign exchange rate changes                              4,345                  (578)                 420

Cash and cash equivalents at end of period            1,098,594          1,469,573         1,860,662

NOTES TO THE CASH FLOW STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2016

1. RECONCILIATION OF LOSS BEFORE TAX TO CASH GENERATED FROM OPERATIONS

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                             6 months to       6 months to       Year ended

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                                                           £                      £                      £

Loss before tax                                                            (448,139)          (528,476)          (972,776)

Depreciation                                                                       195                       -                       -

Shares issued in lieu of remuneration                                        -                       -              28,529

Gain on foreign exchange currency movement                  (37,828)                      -               (6,560)

Finance income                                                               (4,571)              (2,537)              (7,275)

                                                                                  (490,343)          (531,013)          (958,082)

Increase in trade and

 other receivables                                                           (26,737)              (4,729)            (20,735)

(Decrease)/Increase in trade and

 other payables                                                              (97,742)            (54,446)             19,865

Net cash used in operations                                      (614,822)          (590,188)          (958,952)

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the cash flow statement in respect of cash and cash equivalents are in respect of the statement of financial position amounts:

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                             6 months to       6 months to       Year ended

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                                                             £                      £                      £

Cash and cash equivalents                                          1,098,594          1,469,573         1,860,662 

Cash and cash equivalents consist of cash in hand and balances with banks.

NOTES TO THE FINANCIAL STATEMENTS UNAUDITED RESULTS

FOR THE 6 MONTHS ENDED 30 JUNE 2016

1. Basis of preparation

These interim financial statements for the six month period ended 30 June 2016 have been prepared using the historical cost convention, on a going concern basis and in accordance with applicable International Financial Reporting Standards as adopted by the European Union ("IFRS") and with those parts of the UK Companies Act 2006 applicable to companies reporting under IFRS as adopted by the European Union. They have also been prepared on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2016, and which are also consistent with the accounting policies applied for the year ended 31 December 2015 except for the adoption of any new standards and interpretations.

These interim results for the six months ended 30 June 2016 and the comparatives for the six months ended 30 June 2015 are unaudited and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2015 have been delivered to the Registrar of Companies and filed at Companies House and the auditors' report on those financial statements was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.

2. Loss per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares of 911,783,126 (30 June 2015 - 736,490,500 and 31 December 2015 - 824,857,193) outstanding during the period. There is no difference between the basic and diluted loss per share.

3. Restricted bank deposits

In February 2015, US$500,000 was placed on deposit with Habib Bank as security for a performance bond. The deposit is repayable on compliance with the conditions of the bond.

4. Called up share capital

                                                                              (Unaudited)       (Unaudited)           (Audited)

                                                                           30 June 2016     30 June 2015     31 Dec 2015

                                                                                           £                      £                      £

Allotted, called up and fully paid

911,783,126 Ordinary shares of 0.1p each                       911,783            911,783            911,783

The number of shares in issue was as follows:

                                                                                                                            Number                                                                                                                                                    of shares

Balance as 31 December 2014                                                                             389,009,493

Issued during the period                                                                                          522,773,633

Balance at 30 June 2015                                                                                      911,783,126

Issued during the period                                                                                                          -

Balance at 31 December 2015                                                                             911,783,126

Issued during the period                                                                                                          -

Balance at 30 June 2016                                                                                      911,783,126

5. Post balance sheet events

There are no post balance sheet events to report.

For further information:

The information contained within this announcement is considered to be inside information, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, prior to its release.

In accordance with the AIM Rules for Companies, a copy of this announcement will be made available on Oracle's website at: www.oraclecoalfields.com