News 07 December 2009

PRELIMINARY RESULTS

Spitfire Oil Limited (“Spitfire Oil” or the “Company”), has today published its results for the period ended 30 June 2009, a summary of which is attached.

The Group’s principal activity is the pursuance of the production of fuel oil and distillate from the Salmon Gums Lignite deposits in Western Australia.

The Group has reported a loss before tax of A$1,437,020 in the year to 30th June 2009. (A$2,828,901 in the period from incorporation to 30 June 2008.)

Chairman’s Statement

I think it is fair to say that the second half of 2008 and the beginning of 2009 will be remembered as a difficult and challenging year for all those involved in the natural resources, financial and industrial sectors. Spitfire has been well placed to weather this uncertain economic environment and hopefully prosper in the years ahead.

During the financial year to 30th June 2009, Spitfire continued to progress its proprietary L2VTM lignite-to-liquid process and extended its lignite resource at Salmon Gums. With additional data from drilling at Salmon Gums, Spitfire was able, on 16th July 2009, to report a 69% increase in the Salmon Gums JORC indicated and inferred resource from 519 million tonnes to 876 million tonnes, with a potential increase in the in situ oil from 200 million barrels to about 330 million barrels.

Significant progress was also made in advancing key environmental, hydro-geological, mining and other studies. This enabled Spitfire to update its economic models and continued its path towards a feasibility study for a pilot plant.

Unfortunately, in the third quarter of 2009, ongoing test work and investigations highlighted the expanding complexity and growth in the scope of research required in refining and finalising the proprietary L2VTM lignite-to-liquid process to extract an economic distillate from the Salmon Gums lignite. Consequently a complete re-appraisal of the project was instigated including the evaluation of processing the lignite at Salmon Gums with other coal to liquids technologies. All other options are also being canvassed including the acquisition of other energy related projects in which the Company has previous expertise. Discussions are also continuing with Curtin University and other parties as to how best to further progress and finance the future development of the project.

During the year, Spitfire noted a number of significant mining companies pegging ground in and around the area surrounding Salmon Gums. A geological assessment of the gold prospectively of Spitfire’s tenements has shown that the tenements host the intersection of two regional prospective gold trends and the intersection of two regional faults. Regional geological interpretations indicate a greenstone belt crossing the tenements. Consequently, the Company has recently commenced a gold exploration program including 171 air core holes into the granite basement on a 200m x 800m grid covering the intersection of the two faults. This program is expected to be completed early next year.

There is no question that the past few months have been challenging, but the Company will not rest until these challenges have been met and an economically successful way is found to move both Salmon Gums and the future of the Company forward.

SPITFIRE OIL LIMITED
Income Statement
For the year ended 30 June 2009
(expressed in Australian dollars)

Consolidated Group Parent Entity Consolidated Group Parent Entity
2009 2009 2008 2008
A$ A$ A$ A$
Other Revenue 1,208,333 356,519 1,251,885 949,590
Corporate expenses (1,651,427) (834,052) (1,410,557) (1,035,345)
Impairment of financial assets - (862,142) (534,439) (2,636,793)
Technology and development (697,216) - (1,883,681) -
Other expenses (296,710) (97,345) (252,109) (106,353)
Loss before income tax (1,437,020) (1,437,020) (2,828,901) (2,828,901)
Income tax expense - - -
Loss for the period (1,437,020) (1,437,020) (2,828,901) (2,828,901)
Basic loss per share (cents per share) (3.38) (7.06)
Diluted loss per share (cents per share) (3.38) (7.06)

Spitfire Oil Limited
Balance Sheet
As at 30 June 2009
(expressed in Australian dollars)

Consoliodated Group 2009 Parent Entity 2009 Consolidated Group 2008 Parent Entity 2008
A$ A$ A$ A$
ASSETS
CURRENT ASSETS
Cash and cash equivalents 10,019,229 58,013 14,100,639 14,037,046
Trade and other receivables 14,077 - 194,553 -
Other current assets 15,037 14,287 36,270 36,270
TOTAL CURRENT ASSETS 10,048,343 72,300 14,331,462 14,073,316
NON-CURRENT ASSETS
Trade and other receivables - 17,374,375 - 2,556,540
Other assets - 1,465 - 1,465
Property, plant and equipment 13,906 - 41,220 -
Intangible assets 7,590,913 - 3,416,172 -
TOTAL NON-CURRENT ASSETS 7,604,819 17,375,840 3,457,392 2,558,005
TOTAL ASSETS 17,653,162 17,448,140 17,788,854 16,631,321
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 202,299 14,377 1,172,319 14,786
Provisions 17,100 - - -
TOTAL CURRENT LIABILITIES 219,399 14,377 1,172,319 14,786
   
TOTAL LIABILITIES 219,399 14,377 1,172,319 14,786
NET ASSETS 17,433,763 17,433,763 16,616,535 16,616,535
EQUITY
Issued capital 20,854,412 20,854,412 20,854,412 20,854,412
Reserves 845,272 845,272 (1,408,976) (1,408,976)
Accumulated loss (4,265,921) (4,265,921) (2,828,901) (2,828,901)
TOTAL EQUITY 17,433,763 17,433,763 16,616,535 16,616,535

Spitfire Oil Limited
Statement of Changes in Equity
For the year ended 30 June 2009
(expressed in Australian dollars)

Consolidated Group
Issued Capital Foreign Currency Translation Accumulated Losses Share Based Remuneration Total
A$ A$ A$ A$ A$
Balance at 2 May 2007 - - - - -
Shares issued 23,300,973 - - - 23,300,973
Share issuance costs (2,446,561) - - - (2,446,561)
Share based remuneration - - - 592,667 592,667
Translation of Foreign currency - (2,001,643) - - (2,001,643)
Net (Loss) for the period - - (2,828,901) - (2,828,901)
Balance at 30 June 2008 20,854,412 (2,001,643) (2,828,901) 592,667 16,616,535
Share based remuneration - - - 197,334 197,334
Translation of Foreign currency - 2,056,914 - 2,056,914
Net (Loss) for the period - (1,437,020) - (1,437,020)
Balance at 30 June 2009 20,854,412 55,271 (4,265,921) 790,001 17,433,763
Parent Entity
Issued Capital Foreign Currency Translation Accumulated Losses Share Based Remuneration Total
A$ A$ A$ A$ A$
Balance at 2 May 2007 - - - - -
Shares issued 23,300,973 - - - 23,300,973
Share issuance costs (2,446,561) - - - (2,446,561)
Share based remuneration - - - 592,667 592,667
Translation of Foreign currency - (2,001,643) - - (2,001,643)
Net (Loss) for the period - - (2,828,901) - (2,828,901)
Balance at 30 June 2008 20,854,412 (2,001,643) (2,828,901) 592,667 16,616,535
Share based remuneration - - - 197,334 197,334
Translation of Foreign currency - 2,056,914 - 2,056,914
Net (Loss) for the period - (1,437,020) - (1,437,020)
Balance at 30 June 2009 20,854,412 55,271 (4,265,921) 790,001 17,433,763

Spitfire Oil Limited
Cash Flow Statement
For the year ended 30 June 2009
(expressed in Australian dollars)

Consolidated Group Parent Entity Consolidated Group Parent Entity
2009 2009 2008 2008
A$ A$ A$ A$
CASH FLOWS RELATED TO OPERATING ACTIVITIES
Payments to suppliers and employees (2,621,682) (712,490) (2,818,468) (570,515)
Interest received 551,708 356,519 965,664 949,590
R&D tax concession received 656,096 - 277,788 -
CASH FLOWS USED IN OPERATING ACTIVITIES (1,413,878) (355,971) (1,575,016) 379,075
CASH FLOWS RELATED TO INVESTING ACTIVITIES    
Advances to subsidiary - (15,679,976) - (5,193,333)
Proceeds from sales of plant and equipment 10,484 -
Payment for purchases of plant and equipment (2,976) - (45,262) -
Payment for purchases of equity investments - - - (1,465)
Exploration Expenditure (4,731,954) - (3,131,852) -
CASH FLOWS USED IN INVESTING ACTIVITIES (4,724,446) (15,679,976) (3,177,114) (5,194,798)
CASH FLOWS RELATED TO FINANCING ACTIVITIES    
Proceeds from issues of securities - - 20,854,412 20,854,412
CASH FLOW FROM FINANCING ACTIVITIES - - 20,854,412 20,854,412
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (6,138,324) (16,035,947) 16,102,282 16,038,689
Cash and cash equivalents at the beginning of the year 14,100,639 14,037,056 - -
Effects of exchange rate changes on cash and cash equivalents 2,056,914 2,056,914 (2,001,643) (2,001,643)
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 10,019,229 58,013 14,100,639 14,037,046

Notes:

  1. This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Group.
  2. The summary accounts set out above do not constitute statutory accounts as defined by Section 84 of the Bermuda Companies Act 1981 or Section 240 of the UK Companies Act 1985. The summarised consolidated and parent balance sheets at 30 June 2009 and the summarised consolidated and parent income statements, consolidated and parent statements of changes in equity and the summarised consolidated and parent cash flow statements for the period then ended have been extracted from the Group’s 2009 statutory financial statements upon which the auditors’ opinion is unqualified. The statutory financial statements for the year to 30 June 2009 have been prepared in accordance with the requirements of International Accounting Standard IAS1: Presentation of Financial Statements as adopted in Australia. The results for the period ended 30 June 2008 have been extracted from the statutory accounts for that period, which contain an unqualified auditors’ report.
  3. The annual report and accounts for 2009 are being sent by post to all registered shareholders. Additional copies of the annual report and accounts are available from the Company’s London correspondent office, 6th Floor, 60 St James’s Street, London, SW1A 1LE.
  4. The calculation of the basic losses per share is based on the loss attributable to ordinary shareholders of A$1,437,020 divided by the weighted average number of shares in issue during the year of 42,550,668. There is no dilutive effect of share purchase options.