News 08 November 2012

Preliminary Results

Financial

Spitfire Oil Limited ("the Company") and its wholly owned subsidiary, Spitfire Oil Pty Ltd ("Spitfire"), together ("the Group"), recorded a loss before tax for the year ended 30th June 2012 of $430,987 (2011 $478,844). The Group benefited from interest received of $332,569 (2011 $364,462). Operating costs were reduced to $763,556 (2011 $843,306). In addition, expenditure was incurred and capitalised on further exploration work on the Salmon Gums tenement licences amounting to $339,241 (2011 $134,232) whilst nothing was received on the refund of tenement rents (2011 $348,865). Cash balances at 30th June 2012 amounted to $7,367,957 (2011 $7,985,012).

Licence Status

During the year ended 30th June 2012, there was no change in Spitfire’s Exploration Licences over the Salmon Gums Project. However, an application was made for a Retention Licence covering the lignite resource area (see Map). This was granted on 4th September 2012 for a renewable five-year term. There are no annual exploration expenditure commitments attaching to this licence other than prescribed licence fees.

The segments of the Exploration Licences that occurred outside the Retention Licence area were relinquished and Surrender Reports lodged as required by the relevant regulations. Extension-of-Term applications were lodged to cover the intervening period between the expiry of the Exploration Licences and the grant of the Retention Licence. These remaining Exploration Licences will subsequently expire and the licence fees be refunded.

Lease

Status

Area Km2

Applied

Grant

Expiry Date

R63/3

Granted

4/09/12

3/09/17

E63/934

Expired

43.23

27/01/2005

7/07/2005

6/07/2012

E63/935

Expired

60.61

27/01/2005

7/07/2005

6/07/2012

E63/947

Expired

146.3

20/10/2005

7/07/2005

6/07/2012

E63/961

Granted

60.63

29/12/2005

6/10/2005

5/10/2012

Spitfire Oil Salmon Gums Project Licences as of 17/09/12

Process Technology

As part of its ongoing monitoring of any suitable process technologies for the Salmon Gums lignite resource, Spitfire conducted a review during the year of currently available technologies for gasification of the lignite. This review was undertaken by a world-renowned independent consulting firm specialising in the processing of lignite deposits, Higman Consulting GmbH. It concluded that due to the high water and salt content and the plastic physical nature of the material, the Salmon Gums lignite was unlikely to be economic with existing gasification processes and current capital and operating pricing structures. In light of these conclusions, Spitfire continues to maintain its investigation of developing processing technologies, particularly the many new developments to pyrolysis technology being undertaken at present for the biofuels industry.

Gold Program

Following the completion of the gold exploration program over the remainder of the Exploration Licences that had remained previously untested, it was concluded that the weak results did not merit further work for gold.

Other Business Opportunities

The Company continues to evaluate numerous alternative natural resources projects. Several alternative oil &/or gas projects were reviewed during the year but none were found to meet the necessary economic requirements of the Company. With the continuing global financial uncertainty, there has been a noticeable deterioration in equity markets for smaller companies and therefore there is an expectation that more robust projects may become available in the future.

Chairman’s Statement:

Although significant activity and opportunities were generated during the year, the progress generated by that activity led to very little immediate economic benefit.

The only tangible result achieved, which occurred subsequent to the end of the financial year, was the granting of the Retention Licence over the Salmon Gums project on the 4th September 2012 for a renewable 5 year term. This development will, at least, allow the Company to retain the Salmon Gums project until a viable, economic process can be verified to extract a distillate or gas from the vast lignite resource contained within the Salmon Gums project.

The Company has continued to investigate diligently and systematically a large number of possible acquisition opportunities. As is normally the case, the vast majority of these opportunities are uneconomic when taking into account capital costs, operating costs and return on equity. A very small number continue to have substantial interest and the Company continues to proceed with due diligence and commercial discussions to ascertain whether a viable transaction can be consummated. As always, the Company continues to evaluate these opportunities with its first and foremost goal to obtain an exceptional return for shareholders. It is with that, and only that, aim that the Company enters the new financial year.

SPITFIRE OIL LIMITED
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2012
(expressed in Australian dollars)

2012

2011

A$

A$

OTHER INCOME

332,569

364,462

EXPENDITURE

Corporate expenses

(656,805)

(691,630)

Other expenses

(106,751)

(151,676)

LOSS BEFORE INCOME TAX

(430,987)

(478,844)

INCOME TAX

-

206,417

LOSS AFTER INCOME TAX

(430,987)

(272,427)

OTHER COMPREHENSIVE INCOME, NET OF TAX

LOSS AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO OWNERS OF SPITFIRE OIL LIMITED

(430,987)

(272,427)

Basic and diluted loss per share for loss attributable to the ordinary
equity holders of the Company (cents per share)

(1.0)

(0.6)

SPITFIRE OIL LIMITED
Consolidated Statement of Financial position
For the year ended 30 June 2012
(expressed in Australian dollars)

2012

2011

A$

A$

CURRENT ASSETS

Cash and cash equivalents

7,367,957

7,985,012

Trade and other receivables

-

8,051

Other current assets

12,961

22,268

TOTAL CURRENT ASSETS

7,380,918

8,015,331

NON CURRENT ASSETS

Plant and equipment

-

2,432

Capitalised exploration and evaluation costs

8,373,897

8,034,656

Other non-current assets

45,000

45,000

TOTAL NON CURRENT ASSETS

8,418,897

8,082,088

TOTAL ASSETS

15,799,815

16,097,419

CURRENT LIABILITIES

Trade and other payables

45,800

44,333

TOTAL CURRENT LIABILITIES

45,800

44,333

TOTAL LIABILITIES

45,800

44,333

NET ASSETS

15,754,015

16,053,086

EQUITY

Issued capital

20,854,412

20,854,412

Reserves

281,853

149,937

Accumulated losses

(5,382,250)

(4,951,263)

TOTAL EQUITY

15,754,015

16,053,086

SPITFIRE OIL LIMITED
Consolidated Statement of Changes in Equity
For the year ended 30 June 2012
(expressed in Australian dollars)

Issued Capital

Options Reserve

Accumulated Losses

Total

A$

A$

A$

A$

BALANCE AT 1 JULY 2010

20,854,412

790,001

(5,468,837)

16,175,576

Loss for the year

-

-

(272,427)

(272,427)

TOTAL COMPREHENSIVE INCOME

-

-

(272,427)

(272,427)

TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS

Transfer of reserve upon expiry of options

-/p>

(790,001)

790,001

-

Issuance of employee share option

-

149,937

-

149,937

BALANCE AT 30 JUNE 2011

20,854,412

149,937

(4,951,263)

16,053,086

Loss for the year

-

-

(430,987))

(430,987)

TOTAL COMPREHENSIVE INCOME

-

-

(430,987)

(430,987)

TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS

Issuance of share options

-

131,916

-

131,916

BALANCE AT 30 JUNE 2012

20,854,412

281,853

((5,382,250)

15,754,015

SPITFIRE OIL LIMITED
Consolidated Statement of Cash Flows
For the year ended 30 June 2012
(expressed in Australian dollars)

2012

2011

A$

A$

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees

(602,466)

(720,027)

Interest received

332,569

364,757

Research and development tax concession received

-

206,417

NET CASH OUTFLOW FROM OPERATING ACTIVITIES

(269,897)

(148,853)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for exploration and evaluation expenditure

(348,213)

(119,711)

Refund of tenement rents

-

348,865

NET CASH (OUTFLOW) / INFLOW FROM INVESTING ACTIVITIES

(348,213)

229,154

NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS

(618,110)

80,301

Cash and cash equivalents at the beginning of the financial year

7,985,012

7,926,723

Effects of exchange rate changes on cash and cash equivalents

1,055

(22,012)

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR

7,367,957

7,985,012

SPITFIRE OIL LIMITED
Notes to the Preliminary Results to 30th June 2012

  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 435 of the UK Companies Act 2006. The summarised consolidated statement of financial position at 30 June 2012 and the summarised consolidated statement of comprehensive income, consolidated statement of changes in equity and the summarised consolidated statement of cash flows for the year then ended have been extracted from the Group’s 2012 statutory financial statements upon which the auditors’ opinion is unqualified. The statutory financial statements for the year to 30 June 2012 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 year ended 30 June 2011 have been extracted from the statutory accounts for that period, which contain an unqualified auditors’ report.

  3. The annual report and accounts for 2012 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 and diluted losses per share is based on the loss attributable to ordinary shareholders of A$430,987 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.