Altona Mining: Report for the Half-Year ended 31 December 2015

(firmenpresse) -
Altona Mining: Report for the Half-Year ended 31 December 2015

Altona moves closer to realisation of Cloncurry Project value

· Sichuan Railway Investment Group (SRIG) have, subject to a number of conditions, agreed to form a joint venture to develop the Cloncurry Project by contributing US$214m for a 60% interest.
· The Cloncurry Project mine life will likely be extended by approximately two years to thirteen years by including the Turkey Creek discovery.
· Altona regained control of the Roseby South Project to the south of the Cloncurry Project which were subject to an earn in arrangement with a third party.
· Altona completed a tenement consolidation process, whereby 18 exploration tenements in Queensland have been combined to form 4 larger tenements.

Review and results of operations
Cloncurry Copper Project
Altona concluded a binding Framework Agreement with SRIG on 26 June 2015. The agreement is subject to certain conditions.

The parties have agreed to establish an incorporated joint venture holding Altonas Cloncurry Project located in north-west Queensland, with SRIG to contribute cash of US$214.46 million and to have a 60% interest in the joint venture. Altona will retain a 40% interest in the joint venture and is to contribute the Cloncurry Project and cash of US$38 million.

The cash to be contributed by the joint venture partners of US$252.46 million equates to A$355.6 million at an exchange rate of AUD:USD 0.71 and will exceed the estimated capital cost (A$294 million) for the Little Eva mine and provide a substantial allowance for working capital and overruns.

Altona will continue to husband its cash resources whilst seeking to finalise the conditions necessary to formalise the transaction with SRIG. It is anticipated that formal agreements will be executed in March of 2016, with completion of the transaction in August 2016.

Four new consolidated Exploration Permits for Minerals (EPMs 25757, 25759, 25760 and 25761) were granted in November 2015. This consolidation of 18 pre-existing mature EPMs with four fresh tenements simplifies and reduces the management cost of Altonas Cloncurry and Roseby South Projects and increases the life of the tenure.

The pre-existing overlaying EPMs were relinquished on grant of the new EPMs. The grant of these tenements was facilitated by the finalisation of a new Ancillary Agreement pertaining to the EPMs with the Kalkadoon Native Tile Aboriginal Corporation RNTBC in October 2015.

Roseby South Project
The Roseby South Project (Roseby South) is 100% owned by Altona, and operated by Altona.

Roseby South abuts Altonas 100% owned Cloncurry Copper Project but is not included in the SRIG Framework Agreement.

Roseby South covers an area of 475km² and covers the extension of the prospective stratigraphy which hosts both Altonas Cloncurry Copper Project and MMG Limiteds Dugald River Zinc mine immediately to the north.

A large mineralised system has been identified at Companion within Roseby South and offers a near-term prospect for resource definition. Highlights from previous drilling include the following:

26 metres at 0.68% copper, 0.25g/t gold from 63 metres; including 15 metres at 1.15% copper and 0.41g/t gold.
34 metres at 0.75% copper, 0.21g/t gold from 54 metres; including 4 metres at 1.86% copper and 0.21g/t gold.

Operating results

The current period results reflect Altonas status of having sold its Finland mining operations and therefore no operations. However the Finnish operations are reflected in the comparative period results.

During the current period, Altona expended funds to progress both the SRIG transaction and advance the Cloncurry Project. Under the arrangement with SRIG, funds expended ($1.3 million towards exploration and evaluation) towards the advancing the Cloncurry Project will be treated as a component of Altonas funding obligation in relation to the development of the Cloncurry Project. However, as the SRIG transaction is incomplete at this point of time, these activities continue to be treated as exploration and evaluation expenses within the Consolidated Statement of Profit or Loss and contribute to Altonas loss for the current period of $2.7 million.

Administrative expenses whilst having been significantly reduced for the period are inclusive of costs associated with the advancement of the SRIG transaction (eg. legal and travel).

Altona continues to have a strong balance sheet with no debt and $43.6 million of cash placing it in a strong financial position.

Directors

The names of the Companys Directors in office during the financial period and until the date of this report are:

Mr Kevin Maloney -Chairman
Dr Alistair Cowden -Managing Director
Mr Peter Ingram -Non-Executive Director (resigned 26 November 2015)
Mr Paul Hallam -Non-Executive Director
Mr Steve Scudamore-Non-Executive Director

Principal activity
The principal activities of the Company and its subsidiaries during the course of the half-year were exploration and evaluation of mineral resources.

Dividends paid or recommended
No dividends were paid or declared during the half-year.

Employees
Since the sale of its Finnish operations to Boliden in October 2014, the Company has sought to reduce corporate overheads where possible. This has resulted in the Company retaining 8 employees at the date of this report.

Significant changes in state of affairs
In the opinion of the directors there are no significant changes in the state of affairs of the Company that occurred during the half-year ended 31 December 2015 that are not disclosed elsewhere in this report, the financial statements or the attached notes.

Significant events after balance date
There have been no significant events since the 31 December 2015 to the date of this report.

Rounding
Under the option available to the Company under ASIC CO 98/0100, the amounts contained in this report and in the financial report have been rounded to the nearest $1,000.

Auditors independence declaration
Section 307 of the Corporations Act 2001 requires the auditor to the Group, Deloitte Touche Tohmatsu, to provide the directors of Altona Mining Limited with an Independence Declaration in relation to the review of this Half-Year Financial Report. The Auditors Independence Declaration on page 15 forms part of the Directors Report for the period ended 31 December 2015.

Directors resolution
Signed in accordance with a resolution of the Directors made pursuant to Section 306(3) of the Corporations Act 2001.

On behalf of the Directors.



KEVIN MALONEY
Corporate Directory

Chairman

Perth, Western Australia
Dated this 24th day of February 2016.


Directors:-
Mr Kevin Maloney
Non-Executive Chairman

Dr Alistair Cowden
Managing Director

Mr Paul Hallam
Non-Executive Director

Mr Steve Scudamore
Non-Executive Director

Company Secretary:
Mr Eric Hughes

Principal & Registered Office:
Level 1, 1 Altona Street
West Perth 6005 Western
Australia

Telephone: +61 8 9485 2929
Email: altona(at)altonamining.com

Auditor:
Deloitte Touche Tohmatsu
Level 14, Woodside Plaza
240 St Georges Terrace
Perth 6000 Western Australia
Telephone: +61 8 9365 7000

Bankers:
Westpac Banking Corporation
Level 6, 109 St Georges Terrace
Perth 6000 Western Australia

Share Registry:
Computershare Registry Services
Pty
Ltd

Level 2, Reserve Bank Building
45 St Georges Terrace
Perth 6000 Western Australia
Telephone: +61 8 9323 2000

Stock Exchanges:
Australia Securities Exchange
Frankfurt Stock Exchange

Company Codes:
ASX: -AOH
FSE:-A20

Issued Capital as at 26 February
2015:

534,800,592-Fully paid ordinary
shares

9,776,800-Employee share
rights

www.altonamining.com


Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the half-year ended 31 December 2015

31 31
December December
Note
2015 2014
$000 $000
Continuing operations
Other income - 5
Interest income 638 966
Foreign exchange gain/(loss) 93 (23)
Exploration and evaluation expense (1,710) (2,563)
Administration expense (1,699) (3,074)
Finance expense (3) (591)
Loss before income tax from (2,681) (5,280)
continuing
operations


Income tax expense - -
Loss after income tax from (2,681) (5,280)
continuing
operations


Profit from discontinued - 39,137
operations
, after income tax

Profit after income tax for the (2,681) 33,857
period attributable to owners of
the
Group


Other comprehensive income
Items that may be reclassified
subsequently to profit or
loss:

Net fair value loss on - 572
available-for-sale-financial
assets, net of
tax

Foreign currency translation (89) (9,081)
Total other comprehensive income (89) (8,509)
for the period, net of
tax


Total comprehensive income for (2,770) 25,348
the period attributable to
owners of the

Group

Earnings per share - continuing
operations
only

Basic (loss)/earnings per share (0.50) (0.99)
(in
cents)

Diluted (loss)/earnings per share (0.50) (0.99)
(in
cents)

Earnings per share
Basic earnings per share (in (0.50) 6.35
cents)

Diluted earnings per share (in (0.50) 6.20
cents)

The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.-

Condensed Consolidated Statement of Financial Position
As at 31 December 2015

Note 31 30 June2
December01
2015$05$000
00

Current assets
Cash and cash equivalents 43,595 46,838
Trade and other receivables 263 159
Other assets 776 300
Total current assets 44,634 47,297

Non-current assets
Property, plant and equipment 111 163
Exploration and evaluation assets 14,685 14,854
Other assets 486 469
Total non-current assets 15,282 15,486
Total assets 59,916 62,783

Current liabilities
Trade and other payables 199 386
Provisions 170 163
Total current liabilities 369 549

Non-current liabilities
Provisions 475 455
Total non-current liabilities 475 455
Total liabilities 844 1,004
Net assets 59,072 61,779

Equity
Contributed equity 5 94,122 94,123
Reserves (10,445) (9,999)
Accumulated losses (24,605) (22,345)
Total equity 59,072 61,779


The above Condensed Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Cash Flows
For the half-year ended 31 December 2015

31 31
December December

2015 2014
$000 $000
Cash flows from operating
activities


Receipts from customers - 24,997
Payments to suppliers and (3,786) (21,754)
employees

Interest and finance costs (3) (619)
Net GST / VAT cashflows 2 1,657
Other - 187
Net cash from operating activities (3,787) 4,468

Cash flows from investing
activities

Interest received 547 520
Payments for security deposits (10) (291)
Payments for property, plant and - (5,009)
equipment and mine development


Proceeds from sale of - 111,118
discontinued operation, net of
transaction
costs

Net cash from investing activities 537 106,338

Cash flows from financing
activities

Payments for finance leases - (128)
Net cash from financing activities - (128)

Net (decrease)/increase in cash (3,250) 110,678
and cash
equivalents

Cash and cash equivalents at the 46,838 18,076
beginning of period


Effects of exchange rate changes 7 (86)
on cash and cash
equivalents

Cash and cash equivalents at end 43,595 128,668
of the
period


The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Changes in Equity
For the half-year ended 31 December 2015

ContriShare ConverForeigRevaluProfAccumTotal
buted b ting n ation its .
ased p res equit
equityaymentnotes currenreservervelossey
$000 s r cy e $0s
eserve 00 $00$000
reserv$000 transl$000 0
e ation

$000 reserv
e
$00
0

At 1 July 94,1245,578 581 (118) - (16,(22,361,77
201 040)46 9
5 )
Profit for - - - - - - (2,68(2,68
the 1 1
period ) )

Foreign - - - (89) - - - (89)
currency
translatio
n

Total - - - (89) - - (2,68(2,77
comprehens 1 0
ive ) )
income

Share (2) - - - - - - (2)
issue
costs

Share - 65 - - - - - 65
based
payments

Expired (422) 422 -
share
rights

At 31 94,1225,221 581 (207) - (16,(24,659,07
December 040)05 2
201 )
5

At 1 July 158,295,317 581 8,939 (630) - (53,7118,7
201 0 67) 30
4
Profit for - - - - - - 33,8533,85
the 7 7
period

Foreign - - - (114) - - - (114)
currency
translatio
n


Transfer - - - (8,967858 - - (8,10
to profit ) 9)
and loss
on
disposal
of
subsidiari
es


Change in - - - - (286) - - (286)
value of
available-
for-sale
investment
s

Total - - - (9,081572 - 33,8525,34
comprehens ) 7 8
ive
income

Share (5) - - - - - - (5)
issue
costs

Share - 270 - - - - - 270
based
payments

At 31 158,285,587 581 (142) (58) - (19,9144,3
December 5 10) 44
201
4


The above Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.-

NOTE 1: BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of preparation

Altona Mining Limited (the Company) is domiciled in Australia. These general purpose consolidated financial statements for the half-year ended 31 December 2015 have been prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting and comprise the Company and its subsidiaries (the Group). Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.

These Financial Statements do not include all notes of the type normally included within the annual financial report, and as such it is recommended that the Financial Statements be read in conjunction with the annual financial report for the year ended 30 June 2015 and considered together with any public announcements made by Altona Mining Limited during the half-year ended 31 December 2015.

These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

Certain comparative figures have been adjusted to conform to changes in presentation for the current period.

NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
-
In preparing this consolidated half-year financial report, significant judgements made by management in applying accounting policies and the key estimates used were consistent with those applied at 30 June 2015.

NOTE 3: CHANGES IN ACCOUNTING POLICIES - NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

Except as described below, the accounting policies applied by the Group in these Financial Statements are consistent with those applied by the Group in its annual financial report for the year ended 30 June 2015. The following changes to accounting standards were required to be adopted by the Group during the current period:

§ AASB 2015-3 Withdrawal of AASB 1031 Materiality;
§ Recoverable Amount Disclosures for Non-Financial Assets (Amendments to AASB 136);
§ Defined Benefit Plans: Employee contributions (Amendments to AASB 119); and
§ Annual Improvements to AASBs 2010-2012 and 2011-2013 Cycles.

NOTE 4: SEGMENT INFORMATION

Operating segments have been identified as mineral projects in Australia (Australian projects), the Outokumpu Copper operations (Outokumpu project) and mineral exploration areas in Finland (Finnish projects). Unallocated amounts consist mainly of corporate revenues and expenses, and those assets that cannot be allocated to the reportable segments.

Discrete financial information about each of these operating segments, operating performance and assets are reported to the Board and Key Management Personnel on a monthly basis. Inter-segment revenues are not material and have not been reported below.

4. (a)-Performance of Operating Segments:
NotAustralOutokumFinnishUnallocTotal
e ian pu p ated $000
p p rojects
rojectsroject($000 $000
$000 1)
$000
31 December 201
5

Revenue
Other income - - - 638 638
Total revenue - - - 638 638

Segment result 4. (b(1,536)- (91) (1,054)(2,681)
before )
tax


Total assets 4. (c14,980 - 264 44,672 59,916
)


Capital - - - - -
expenditure


31 December 201
4

Revenue
Concentrate - 25,327 - - 25,327
sales

Gain on - 31,476 - - 31,476
disposal

Other income - 182 - 983 1,165
Total revenue - 56,985 - 983 57,968

Segment result 4. (b(2,207)40,738 (454) (2,641)35,436
before )
tax


Total assets 4. (c15,092 - 425 130,028145,545
)


Capital - 5,233 - - 5,233
expenditure


(1)-Discontinued operation, results are to 30 September 2014

4. (b)-A reconciliation from segment result to earnings before interest and tax (EBIT) is provided below:
AustralOutokumpuFinnishUnallocaTotal
ian p p ted $000
p roject(1)rojects
rojects$000 $000 $000
$000

31 December 2015
Segment result bef(1,536)- (91) (1,054) (2,681)
ore
tax

Interest income - - - (638) (638)
Finance expense - - - 3 3
Foreign exchange - - (86) (6) (92)
(gain)/loss

Segment EBIT (1,536)- (177) (1,695) (3,408)

31 December 2014
Segment result bef(2,207)40,738 (454) (2,641) 35,436
ore
tax

Interest income - - - (981) (981)
Other income - - - (2) (2)
Finance expense - 72 - 591 663
Foreign exchange - (404) - 23 (381)
(gain)/loss

Segment EBIT (2,207)40,406 (454) (3,010) 34,735
(1)-Discontinued operation, results are to 30 September 2014

4. (c)-Unallocated assets consist of the following:
31 30 June
December
2015
2015 $000
$000
Cash 43,595 46,838
Available-for-sale financial assets - -
Property, plant and equipment 64 59
Other receivables 237 159
Other assets 775 301
44,671 47,357

NOTE 5: CONTRIBUTED EQUITY

Number Total
of Date $000
s
hares
Contributed equity
Movements in fully paid
ordinary shares on
issue:

Balance at 1 July 2015 532,678,5 94,123
92

Shares issued on vesting of 122,000 1 July 2015 -
share
rights

Share issue costs - - (1)
Balance at 31 December 2015 534,800,5 94,122
92


Balance at 1 July 2014 532,234,7 158,290
04

Shares issued on vesting of 345,000 2 July 2014 -
share
rights

Shares issued on vesting of 2,098,8882 October -
share 2014
rights

Share issue costs - - (5)
Balance at 31 December 2014 534,678,5 158,285
92
NOTE 6: FINANCIAL INSTRUMENTS

6. (a)-Fair value hierarchy

There are various methods available in estimating the fair value of a financial instrument. These methods include:

Level 1-The fair value is calculated using quoted market prices.
Level 2-The fair value is estimated using inputs other than quoted prices (level 1), that are observable for the asset or liability, either directly (as prices), or indirectly (derived from prices).
Level 3-The fair value is estimated using inputs for the asset or liability that are not based on observable market data.

The Group does not have any financial instruments classified as level 2 or 3.

There were no transfers between levels during the period

NOTE 7: CONTINGENT LIABILITIES

As part of the sale of the Finnish Assets to Boliden on 1 October 2014, Vulcan Resources Pty Ltd, a wholly-owned subsidiary of Altona Mining Limited, has indemnified Boliden for any breach of the Agreement, including a breach of the warranties contained in the Agreement, environmental liabilities and for any taxes that should have been paid before closing. Altona guarantees the performance of Vulcans obligations under the Agreement, including its payment and indemnity obligations. All performance guarantees and warranties will expire on 1 October 2019.

NOTE 8: COMMITMENTS

Following the disposal of the Finnish assets on 1 October 2014, the Group no longer has any material commitments for capital or operating expenditure, other than for expenditure on Australian mineral tenements.

NOTE 9: KEY MANAGEMENT PERSONNEL

Remuneration arrangements of key management personnel are disclosed in the annual financial report. In addition, shareholders at the Annual General Meeting of 26 November 2015 approved the issue of 3,856,800 Share Rights to the Managing Director. These Share Rights were issued in January 2016. A further 1,815,000 Share Rights were issued to the Chief Financial Officer in January 2016 on the same terms and conditions as those approved by shareholders for issue to the Managing Director.

NOTE 10: EVENTS SUBSEQUENT TO BALANCE DATE

There are no material subsequent events that have occurred since 31 December 2015 to the date of this report.


NOTE 11: INVESTMENTS IN CONTROLLED ENTITIES


Equity
holding


Name of entity Incorporated 2015 2014
(%) (%)
Vulcan Resources Australia 100% 100%
Pty
Ltd
(1)
Roseby Copper Pty Australia 100% 100%
Ltd
(1)
Roseby Copper Australia 100% 100%
(South) Pty
Ltd
(1)
Kuhmo Nickel United Kingdom - 100%
Limited
(3)
Vulcan Finland British Virgin Islands 100% 100%
(BVI)
Ltd
(2)
Kylylahti Copper OFinland - 100%
y
(3)
Vulcan Hautalampi Finland 100% 100%
Oy
(2)
Vulcan Kotalahti OFinland 100% 100%
y
(2)
Kuhmo Metals Oy(3)Finland - 100%
Vulcan Netherlands - 100%
Exploration
BV
(3)
(1) Vulcan Resources Pty Ltd, Roseby Copper Pty Ltd and Roseby Copper (South) Pty Ltd are wholly owned subsidiaries of Altona Mining Limited and the investment is held by Altona Mining Limited.
(2) Vulcan Finland (BVI) Limited, Vulcan Hautalampi Oy and Vulcan Kotalahti Oy are wholly owned subsidiaries of Vulcan Resources Pty Ltd and the investment is held by Vulcan Resources Pty Ltd. In September 2015, the Finnish courts were petitioned by Altona to wind up Vulcan Kotalahti Oy. On 21 September 2015 Attorney Leif Hainen of Peltonen LMR Attorneys Ltd was appointed administrator to wind up Vulcan Kotalahti Oy. This process will result in a simplified corporate structure.
(3) The Boliden transaction for the purchase of the majority of Altonas Finland assets were effected by the sale of Kuhmo Nickel Limited. As a consequence, at 31 December 2015, Altona no longer has an interest in Kuhmo Nickel Limited, Kylylahti Copper Oy, Kuhmo Metals Oy or Vulcan Exploration BV.

The Group has no significant restrictions on its ability to access or use the assets and settle the liabilities of the group.
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In accordance with a resolution of the directors of Altona Mining Limited made pursuant to Section 303(5) of the Corporations Act 2001, I state that:

In the opinion of directors:

(a) The financial statements and notes of the Group:

-(i)-give a true and fair view of the financial position as at 31 December 2015 and the performance for the half-year ended on that date of the Group; and
-(ii)-comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001; and

(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.


On behalf of the Board


KEVIN MALONEY
Chairman

Perth, Western Australia
Dated this 24th day of February 2016

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