Oracle Coalfields plc
LSE : ORCP

April 19, 2011 05:00 ET

Results for the Year ended 31 December 2010

19th April 2011

GB00B23JN426/GBP/PLUS-exn

Oracle Coalfields PLC

("Oracle" or the "Company")

Results for the Year ended 31 December 2010

Oracle Coalfields (PLUS: ORCP), the UK developer of an estimtaed 1.4 billion tonne coal resource in the south-

eastern desert of Sindh Province, Pakistan, today announces results of the Company and the Group for the year

ended 31 December 2010.

Period Highlights

* Placing raised £2 million during the course of 2010. This includes an investment of over £1 million by

Regency Mines PLC (AIM:RGM), a mining explorer and developer with interests in Western Australia,

Queensland and Papua New Guinea, which now holds approximately 10% of the enlarged share capital of

Oracle Coalfields.

* Work continued throughout the year on the studies for the Bankable Feasibility Study (BFS) on the Block

VI licence, including the Environmental & Social Impact Assessment (ESIA).

* Appointment of internationally reputed independent consultants to oversee drilling programme and

completion of feasibility study to bankable standard.

* License extended by the Coal and Energy Development Department for an additional year.

Post Period Highlights

* Listing on the London Stock Exchange's Alternative Investment Market (AIM) on Wednesday 20th April 2011

* Successful Placing of £3 million.

Shahrukh Khan, Chairman and CEO of Oracle Coalfields, commented: "It has been a significant year for us where we

have continued to make good progress in the development of Block VI coal deposit in the Thar Coalfield of Southern

Pakistan. As a PLUS listed company we managed to raise funds and attract supporters of the stock and our vision

of building Pakistan's first coal producing mine. To this end, we have appointed internationally recognised and

respected consultants to work towards the Bankable Feasibility Study.

"In addition, and post results we have announced our intention to list on the Alternative Investment Market. This

has been one of our goals and we are delighted at the support we received, culminating in the company being

oversubscribed and raising £3 million. We look forward to the forthcoming year with optimism."

For further information contact:

Oracle Coalfields PLC

Shahrukh Khan, Chairman and CEO

Telephone: +44 (0) 1366500722

St Helens Capital Partners LLP

Duncan Vasey or Mark Anwyl

Telephone: +44 (0) 20 7368 6959

Blythe Weigh Communications

Ana Ribeiro or Matthew Neal

Telephone: +44 (0) 20 7138 3206 / (0) 20 7138 3224

The Directors present their report with the financial statements of the Company and the Group for the year ended 31

December 2010.

Review

Over the past year, Oracle Coalfields continued to make good progress towards meeting its objective of delivering a

cost-effective coal mine on the Block VI coal deposit in the Thar Coalfield of Southern Pakistan.

The Company's progress continues to attract public attention because of the pressing need to increase local fuel

production and address the deficit in power generation. This is particularly important for Karachi, an industrial

hub of more than 15 million people located in the Sindh Province, popular discontent and industrial disruption

resulting from the power deficit remains a key area of concern for the Pakistan authorities.

Block VI, Thar Coalfield, Sindh Province

Oracle Coalfields' 80% owned Pakistan subsidiary, Sindh Carbon Energy Limited, was granted the 66.1 square

kilometre Block VI licence of the Thar Coalfield by the Mines and Mineral Development Department, Government of

Sindh, in November 2007 for an initial period of three years. During 2010 the licence was extended for a further

year by the Coal & Energy Development Department (formerly the Mines & Mineral Development Department). It is

planned to convert this into a Mining Lease during 2011.

Block VI is located in the Sindh desert:

- Situated 380 km east from Karachi, Sindh Province

- Block VI is some 32 km from the small town of Islamkot with close proximity to roads and power networks

- In 2006 China NE Geological Survey Bureau (CNGB) drilled 35 boreholes, a total of 9,852 metres, of which

5,986 metres are cored, validated by independent consultants to take it to a JORC resource standard

- All boreholes have been geophysically logged - log suite: natural gamma, density, resistivity, and calliper

- Good infrastructure including roads and an electricity grid.

As per the pre-feasibility study, the coal at Block VI has an average calorific value of 3,537 kcal/kg, a moisture

content of 40%, which can be reduced to 14% by drying, a sulphur level of 1.2%, and an ash content of 7.5%, which

is low when compared with typical lignite coals. Coal tests were carried out by TES Bretby Ltd in the UK, and the

Fuel Research Centre, part of Pakistan Council of Scientific and Industrial Research (PCSIR), Karachi and rock

samples were tested by Strata Surveys Ltd of the UK. The coal quality is suitable for power plants and industry,

particularly in the cement sector.

The work programme for developing the 1.4bn tonnes Block VI coal deposit is proceeding, with the target of

completing the Definitive Feasibility Study and the Bankable Feasibility Study in 2011. Wardell Armstrong

International (WAI) was appointed to prepare the Environmental and Social Impact Statement which is now well

advanced. In addition the Company appointed SRK Consulting (UK) Ltd. (SRK) to carry out an independent review of

the technical work on the feasibility studies carried out by our main technical consultants, Dargo Associates Ltd.

(Dargo). In addition SRK will prepare a definitive feasibility study to bankable standard. Aquaterra, an

international water and environmental company is working with SRK on the hydrogeological assessment of the project.

The pre-feasibility study prepared by Dargo in 2008 confirmed that the proposed open pit mining operation will

require the dewatering of the two aquifers lying above the main coal seam in Block VI.

Prior to the start of the Definitive Feasibility Study the Company completed a drilling programme in 2008 to verify

previous work done on Block VI and also enable the Company to take the project to the internationally recognised

JORC standard, all of which was overseen by Dargo. Following is the summary resource table for Block VI:

Lignite coal resources/reserves for Block VI (JORC)

Note: Mt = Million tonnes

Overburden Lignite coal Lignite coal

measured resources proved reserves

Mm3 Mt Mt

Block VI total area 10,200 1,423 -

Total Mine area 3,673 653 -

Phase I Open pit area 885 - 128

Phase II Open pit area 1,685 - 243

Source: Dargo Associates Limited

During 2009 Oracle Coalfields entered into Memoranda of Understanding with the Karachi Electric Supply Company

(KESC) and Lucky Cement Limited. Supplies to the cement industry, especially to Lucky Cement Limited, of coal for

use as industrial fuel will facilitate early production. Coal production could be expanded to fuel one or more

power plants from the time that they are commissioned. This will also diversify the income sources for the Company.

Subject to the satisfactory completion of the feasibility studies, raising the necessary capital and taking a Final

Investment Decision, production levels for the coal mine are currently projected at 1.0 million tonnes from 2013 to

a target level of 4.0 million tonnes over a three year period.

The mine remains based on an open pit design and the most cost-effective way to operate the mine initially has been

projected as a truck and shovel operation.

The Company was able to raise additional funds of over £2 million on the London market to fund the on-going costs

of the feasibility studies during the year and at the close of the year had a balance of over £1.5 million cash in

hand.

Karachi Electric Supply Company (KESC)

Oracle Coalfields signed a Memorandum of Understanding in December 2009 under which KESC would develop a mine-mouth

power station which would be owned and operated by a separate power generating company. The intention would be for

KESC to take a Final Investment Decision on the power plant at the same time as the Company takes a Final

Investment Decision on the mine development.

KESC is a major local power utility in the Sindh Province and third largest power utility in Pakistan.

- A public listed power company

- Seeking to increase installed capacity to address demand growth of 7-8% pa

Lucky Cement Limited

In addition, Oracle Coalfields is looking for additional income with the intention to generate early cash flow for

the Company and shorten the lead time to coal production. The Company therefore explored the opportunity to enter

potential agreements with local cement companies. Pakistan's cement sector is large and is a major user of coal,

mainly imported, to support its cement works. A Memorandum of Understanding with Lucky Cement was executed in

December 2009.

Entering relationships with Lucky Cement and KESC is an essential step to our objective of becoming a leading

supplier of coal in Pakistan. Oracle Coalfields is also able to enter relationships with additional power and

cement companies as the Company would be able to increase coal supply from its Block VI mine to meet demand.

Drilling Programme

The programme of field work as part of the Bankable Feasibility Study (BFS) on Block VI Thar Coalfield has

progressed well.

A programme of 27 geological boreholes and 8 water boreholes have been drilled to further identify the nature of

the overburden, the thickness of the main lignite seam and dewatering requirements respectively for the purpose of

Mine Design, part of the feasibility study. During this period the Company appointed local drilling contractors,

Deep Rock Drilling (Pvt) Limited and for hydrogeology the local dewatering contractors, Geoscience Associates. The

drilling programme is overseen by Dargo in consultation with SRK and the hydrogeology programme is being overseen

by Aquaterra.

Since the start of the field work programme, visits have been made by the team of SRK, Dargo and Aquaterra. The

first was a preliminary visit held with project geologists appointed by Oracle, Deep Rock Drilling (Pvt) Limited

and Geoscience Associates. The purpose of the first visit was to obtain an understanding of the logistical and

general site conditions and project parameters, to discuss the planned drilling programme and sampling requirements

for the open pit geotechnical study and to discuss the integration of the geotechnical and hydrogeological

disciplines. On site, SRK inspected the location of all the Phase 1 geotechnical holes and the preferred site for

the dewatering test boreholes was also identified by Aquaterra.

Geotechnical and Sub-crop drilling

In the second visit, the drilling programme commenced and all geological boreholes have been completed as well as

lithologically and geophysically logged. Four fully cored boreholes for geotechnical testing were completed and

sampled as part of the 27 geological boreholes programme.

All past and current borehole locations and elevations are being surveyed and samples of the lignite obtained from

the boreholes have been sent for analysis to Bahria University in Karachi. The coal quality tests are under ASTM

standard.

Phase 1 - Mine area

Within the Block VI covering an area of 66.1 square kilometres, the most prospective mining area based on thickness

of coal seam and favourable stripping ratio for the opencast mining operation is to the south central and south

west part of the block covering an area of approximately 20 square kilometres. This mining area is in two phases

of development, Phase 1 and Phase 2. The focus at the moment is on Phase 1 covering an area of approximately 10

square kilometres where all the work programme is underway, i.e. the 27 geological boreholes (4 geotechnical

boreholes and 23 sub-crop drilling) and separately 8 water boreholes (4 test wells and 4 observation wells). The

mining in Phase 2 will commence after Phase 1 mining has been fully exhausted. This will be detailed in the

feasibility study.

Hydrogeology drilling

Water is an important element of the project, as dewatering will be required to enable mining to proceed and water

supply will be required for both the power station and mine. Hydrogeological studies have been commenced by

Aquaterra for both the feasibility study and ESIA.

Meetings were held with KESC and Non-Governmental Organisations (NGOs) representing local communities in the

project area to discuss the scope of work, agree the approach and volumes of water required for the power plant.

The first phase of work involves the drilling of boreholes to improve understanding of the hydrogeology of the

site. Four test wells and four observation wells have been drilled successfully in total. GeoScience Associates

had been commissioned to drill the boreholes under the supervision of Aquaterra.

A study on the local village water supplies is being undertaken simultaneously.

Once testing is complete analysis will be undertaken to confirm the rate of dewatering and the availability of

water for the power plant and mine supplies.

Environmental and Social Impact Assessment (ESIA)

During the period a visit was made by the team from Wardell Armstrong International for the purpose of the ESIA.

Wardell Armstrong is now working on the baseline study which is the second phase of the ESIA. All the aspects in

the baseline study identified and briefly dealt with in the scoping report is being comprehensively elaborated,

requiring a number of visits by personnel of Wardell Armstrong to have interaction with people, including Non-

Governmental Organisations operating in Tharparkar, relevant to their studies and to carry out further assessments

of the environment and the location.

Khorewah, Indus East, Sindh Province

In early February 2007 the Company's subsidiary, Sindh Carbon Energy Limited, was granted an exploration licence

over 100 square kilometres of the KhoreWah coalfield in the Indus East region of the Sindh Province of Pakistan.

The depth of the coal seam is such that underground mining would be necessary in order to make the project

economic.

The granting of the more advanced and geologically attractive Block VI project in the Thar Coalfield has seen the

development of the KhoreWah licence deferred in order to utilise available funds on the Thar Coalfield.

Other initiatives

Oracle Coalfields continue to monitor other possible industrial uses of Thar coal, in addition to power generation

and in the domestic cement industry.

The Pakistan Power Market

If the Gross Domestic Product (GDP) of the country grows as forecast by an average 6-8% per annum over the next 10

years, according to government sources, the country would require approximately 50,000 MW in the next 10 years.

There is certainly a major shortfall in electricity supply. Coal has an important role to play in the country's

energy mix in the coming years and it is forecast that coal would represent about 17% of all feedstock by 2025

(currently it is less than 1%).

Principal risks and uncertainties facing the Group

As the feasibility studies for the mine are now well advanced, the principal risks and uncertainties of the Company

include those summarised below:

- the ability to raise sufficient funds to continue to develop Block VI

- the conclusion of production off-take agreements at requisite commercial rates to justify the project

investment

- the prompt sourcing of specialist mining equipment to ensure earliest project realisation

- the stabilisation of the on-going political situation so as to ensure the vital interests and support of

major financial lenders for the project

- the maintenance of current government legislation and regulations that have so far favoured the development

of the project as a flagship foreign investment necessary to strengthen the country's economy

- infrastructure development plans for the Thar region being funded and completed by the relevant federal

and/or provincial government authorities

- the mitigation of environmental and social concerns

Financials

The financial results for the twelve months to 31 December 2010 show a loss for Oracle Coalfields Plc Group of

Companies after taxation of £221,589 (2009: £235,230) (Company: £217,614). At the period end, the Group had cash at

bank and in hand of £1,506,475 (Company: £1,457,680) and total assets less current liabilities of £2,345,171

(Company: £2,347,065). The basic loss per share was 0.15p (2009: loss 0.20p). The loss is attributable to the

development of the Company's coal licences in Pakistan and administrative expenses.

Post-Period Development

The Company has been able to complete the drilling programme on schedule as part of the feasibility study. A number

of studies are underway for completion of the definitive feasibility to bankable standard.

The Company is now considering listing on Alternative Investment Market (AIM) of the London Stock Exchange. The

purpose of the Company listing on AIM is to raise its profile and reach out to a wider institutional investor

audience in preparation for raising the larger investment required to bring the Block VI coal mine to development.

Outlook

The Board is pleased that the Block VI, Thar coal project Definitive Feasibility Study and the Bankable Feasibility

Study are progressing well. The objective is to reduce project risks through these international quality

feasibility studies. For this reason, independent international consultants have been appointed with experience in

developing coal mine operations of this nature.

The continued rises in world energy prices have strengthened the economic rationale for this project as the cost of

alternative imported supplies of oil and coal increase.

Although the security situation in Pakistan has remained fragile due to political and economic uncertainties, it is

important to note that the Company's project area in Tharparkar has remained peaceful throughout. Geographically,

the project area is distant from the north of the country where most of the unrest is concentrated. Furthermore,

the national economy is being strengthened by substantial foreign aid in support of the Government's efforts to

stabilise the political situation and boost investor confidence.

Finally, the Board is grateful for the patience shareholders have shown in supporting the Company's management team

during the feasibility phase. The Company also extends its thanks to the Mines and Minerals Development Department

and Coal & Energy Development Department, Government of Sindh, the Thar Coal Energy Board and the Sindh Coal

Authority for their continued assistance.

The Company will continue to update the market on its progress.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2010.

ON BEHALF OF THE BOARD:

S Khan - Director

Date: 4 April 2011

ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2010

2010 2009

£ £

CONTINUING OPERATIONS

Revenue - -

Other operating income - 111

Administrative expenses (222,674) (236,157)

OPERATING LOSS (222,674) (236,046)

Finance income 1,085 816

LOSS BEFORE INCOME TAX (221,589) (235,230)

Income tax - -

LOSS FOR THE YEAR (221,589) (235,230)

Loss attributable to:

Owners of the parent (221,589) (235,230)

Earnings per share expressed

in pence per share:

Basic -0.15 -0.20

Diluted -0.13 -0.16

ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2010

2010 2009

£ £

LOSS FOR THE YEAR (221,589) (235,230)

OTHER COMPREHENSIVE INCOME

Exchange difference on consolidation 1,724 (16,143)

Income tax relating to other comprehensive income - -

OTHER COMPREHENSIVE INCOME FOR THE YEAR,

NET OF INCOME TAX 1,724 (16,143)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR (219,865) (251,373)

Total comprehensive income attributable to:

Owners of the parent (219,865) (251,373)

Non-controlling interests - -

ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2010

2010 2009

£ £

ASSETS

NON-CURRENT ASSETS

Intangible assets 855,830 492,131

Property, plant and equipment 2,814 3,072

Investments - -

Loans and other financial assets 63,645 63,186

922,289 558,389

CURRENT ASSETS

Trade and other receivables 36,093 12,322

Cash and cash equivalents 1,506,475 5,859

1,542,568 18,181

TOTAL ASSETS 2,464,857 576,570

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 184,211 122,360

Share premium 3,284,291 1,309,043

Translation reserve (4,563) (6,287)

Retained earnings (1,134,797) (913,208)

2,329,142 511,908

Non-controlling interests 16,029 16,029

TOTAL EQUITY 2,345,171 527,937

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 119,686 48,633

TOTAL LIABILITIES 119,686 48,633

TOTAL EQUITY AND LIABILITIES 2,464,857 576,570

The financial statements were approved and authorised for issue by the Board of Directors on 4 April

2011 and were signed on its behalf by:

S Khan - Director

ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)

COMPANY STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2010

2010 2009

£ £

ASSETS

NON-CURRENT ASSETS

Intangible assets 370,184 241,399

Property, plant and equipment - -

Investments 64,115 64,115

Loans and other financial assets 479,365 244,365

913,664 549,879

CURRENT ASSETS

Trade and other receivables 48,826 21,652

Cash and cash equivalents 1,457,680 4,066

1,506,506 25,718

TOTAL ASSETS 2,420,170 575,597

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 184,211 122,360

Share premium 3,284,291 1,309,043

Retained earnings (1,121,437) (903,823)

TOTAL EQUITY 2,347,065 527,580

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 73,105 48,017

TOTAL LIABILITIES 73,105 48,017

TOTAL EQUITY AND LIABILITIES 2,420,170 575,597

The financial statements were approved and authorised for issue by the Board of Directors on 4 April 2011 and were

signed on its behalf by:

S Khan - Director

The above is an extract from the full financial statements. A full version of the Report and Accounts are available

on the PLUS website.

The Directors of Oracle are responsible for the contents of this announcement.

For further information contact:

Oracle Coalfields PLC

Shahrukh Khan, Chairman and CEO

Telephone: +44 (0) 1366500722

St Helens Capital Partners LLP

Duncan Vasey or Mark Anwyl

Telephone: +44 (0) 20 7368 6959

Blythe Weigh Communications

Ana Ribeiro or Matthew Neal

Telephone: +44 (0) 20 7138 3206 / (0) 20 7138 3224

Contact Information

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