Basic Resources AG increases net profit significantly in 2010

Frankfurt am Main, 09th June 2011

Basic Resources AG (former YALTA AG) has left the impacts of financial crisis behind and achieved a significant improvement in earnings in 2010.

The business of the company provides services in connection with M & A, capital raising as well as listing and investor relations consultancy through its subsidiary YALTA advisory GmbH. In addition, Basic Resources AG participates in capital increases of its portfolio companies, but also with other companies in the resources sector. Originally the entire area of Emerging Markets was covered. Because of the diversity and the increasing scale of the natural resources sector, focusing was carried out on this field, which is one of the key growth sectors in emerging markets. Thus, the services of Basic Resources AG can be offered more selectively, contributing to raising the profile of the company and its perception in the market. This was also documented by the name change from Yalta AG into Basic Resources AG. This step has been received positively by the market. By this way, new mandates could be acquired. Furthermore are under negotiation.

To enable interested investors to a more recent, market-driven image of the business and development of results, the institutions of Basic Resources AG decided to publish from now on annual accounts based on IFRS, too. The financial statements are available on the company's website at www.basicresourcesag.de .

The accounting structure of the Basic Resources AG shows that earnings on the disposal of financial assets have increased in accordance with German HGB to k € 363 (prior year: k € 111) and other operating income to k € 371 (prior year: k € 84). IFRS shows (net) profits amounting to k € 356 (prior year: k € 109), arising from the disposal of long-term gains on financial assets. Due to the recovery in financial markets various elder stocks could be sold with significant profit, other investments, still contained in the portfolio, have made ​​up their interim losses or at least reduced them clearly.

In sum, the new focus of the company towards resources was very successful. The quality of investments, especially received by the capital increase by way of contribution in kind last year, is proving to be excellent. The exploration results, released so far, are supporting the positive expectations of these investments in a strong manner. A drop of bitterness is the devaluation of the old stake in Uranio AG. This has been necessary, as the company has not reached a positive decision to get an extension of its uranium licenses in the Central African Republic until today. As a consequence of the importance and value of this project a sharp depreciation of those shares on the stock exchange was caused. This is the main reason for the increase of German HGB depreciation of investments upto to k € 240 (previous year: k € 0).

According to HGB, net income rose to about k € 189 (previous year: k € - 43). On the basis of IFRS, the net income even increased to about k € 865 (previous year: k € 38). The significantly higher profits based on IFRS mainly result out of the "market to market valuation" of assets on the balance sheet date. The earnings per share (EPS) based on the weighted average number of outstanding shares during the financial year is 0.06 € in accordance with HGB and 0.28 € per share in accordance with IFRS. The equity ratio of Basic Resources AG is far more than 90% in both evaluation modes.

 

From the perspective of the Board the positive developments within the portfolio companies themselves, as well as the sharp rise in commodity prices, are not considered sufficiently by the market despite the caused price increases occurred in the investment portfolio. We therefore expect, on sight, further positive performance of our investments. In addition, as previously reported, also the business of listing advice and support for companies of the resources sector is running successfully. As one primary listing at Frankfurt Stock Exchange has already been completed and another one is being prepared, this activity develops encouraging. Here, our subsidiary YALTA advisory GmbH, offering these services, records positive effects.

The Board is looking optimistically to the current year, particularly as the bottom line in the first 5 months of this fiscal year, lies over the same period of last year based on IFRS measures. If there will be no significant disruption on the capital markets, we are presently confident to be able to exceed the results of 2010 significantly in the current fiscal year.

The Board