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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ecr Minerals Plc | LSE:ECR | London | Ordinary Share | GB00BYYDKX57 | ORD 0.001P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.02 | -6.25% | 0.30 | 0.29 | 0.31 | 0.32 | 0.30 | 0.32 | 6,220,927 | 16:06:21 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMECR
ECR MINERALS plc
("ECR Minerals", "ECR" or the "Company")
AIM: ECR
US OTC: MTGDY
AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED 30 SEPTEMBER 2014
AND NOTICE OF ANNUAL GENERAL MEETING
LONDON: 5 MARCH 2015 - ECR Minerals plc is pleased to announce its audited financial statements for the year ended 30 September 2014. The information presented below has been extracted from the Company's Annual Report and Accounts 2014.
Copies of the Annual Report and Accounts 2014 together with a notice of annual general meeting will be posted to shareholders on 6 March 2015 and will be available from that date on the Company's website www.ecrminerals.com and from the Company's registered office at 2nd Floor, Peek House, 20 Eastcheap, London EC3M 1EB. The text of the notice of annual general meeting is provided below.
FOR FURTHER INFORMATION PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0)20 7929 1010 Paul Johnson, Non-Executive Chairman Stephen Clayson, Director & CEO Richard (Dick) Watts, Technical Director Email: info@ecrminerals.com Website: www.ecrminerals.com Cairn Financial Advisers LLP Tel: +44 (0)207 148 7900 Nominated Adviser Jo Turner/Emma Earl Daniel Stewart & Company plc Tel: +44 (0)20 7776 6550 Broker Colin Rowbury
The directors of ECR Minerals plc (the "Directors" or the "Board") present their report and audited financial statements for the year ended 30 September 2014 for ECR Minerals plc
("ECR", the "Company or the "Parent Company") and on a consolidated basis (the "Group")
CHAIRMAN'S STATEMENT
In my statement last year I talked about the transition made by ECR from a phase of restructuring and refinancing to active operations. During the past year the Group has indeed been operationally focused and we have made much progress on the ground, most notably at our Itogon gold project in the Philippines, but also in respect of our evaluation of the concept of small scale gold production at the SLM project in Argentina.
As Chairman of the Company I take the time to discuss our business and how it is perceived with our investors and market participants generally. I note the frustration in some quarters with what may seem to be slower progress than anticipated.
Whilst we would have preferred to have undertaken even more operational activity, that desire for activity and progress on the ground has to be tempered by the availability of funding and as outlined by Stephen in his report, the environment for listed companies in the mineral sector is perniciously poor and has been increasingly so over recent years.
In addition, the practicalities of thorough exploration mean that time needs to be taken to carefully plan and execute work programmes. The price of such diligence is time taken in delivery, but the outcome should be a more cost effective operation. I believe this approach builds a stronger and more investable company going forward.
The ECR organisation is quite a small one as far as the number of individuals comprising the Board, field team and administrative staff is concerned. As a result all team members bear a great degree of responsibility. I would like to thank all members of the team for their work during the last year. In exploration companies, very often field staff are the unsung heroes. During my visit to the Philippines in October 2014, I observed the professionalism and capability of the team on the ground there. From a Board perspective we are fortunate to have Stephen Clayson as CEO. Stephen manages the vast array of plc matters and field operations extremely well and is key to the successful continuation of ECR's existing projects and the negotiation of new opportunities. Dick Watts as Technical Director brings not only a great deal of knowledge but also a tough, common sense approach to decision making; these are qualities which are much needed but oft lacking in small cap mineral companies.
ECR is an ambitious company, and whilst the Group is already active in the Philippines and Argentina we are seeking new opportunities that fit the project selection criteria we have discussed before, and in this regard we are working intensively to review a small number of projects and interests. Regrettably, for commercial and regulatory reasons, the specifics of the work we are undertaking cannot be disclosed unless a transaction is finalised. That makes it impossible for investors to see the full extent of the work the team are undertaking. I would however like to reassure investors that we will only engage with opportunities that could significantly enhance the ECR investment proposition, on terms that are not unreasonable given the Company's financial capabilities and available management time.
As a contrarian investor in the mineral sector I am excited by the opportunities a deep bear phase brings. I appreciate the support and commitment of private investors to this sector of the market in general and to ECR Minerals in particular. I remain available to investors at any time and can be reached via info@ecrminerals.com.
Paul Johnson
Non-Executive Chairman
4 March 2015
CHIEF EXECUTIVE OFFICER'S REPORT
Since my last report to shareholders, published on 27 June 2014, ECR's principal focus has remained on exploration at the Itogon and SLM gold projects in the Philippines and Argentina, respectively. Significant effort has also been devoted to the review of a small number of potential new opportunities. The work involved has been varied and often fascinating, and I would like to thank my fellow Directors, Paul Johnson and Richard (Dick) Watts, as well as our staff and consultants, for their valuable contributions to these activities.
I continue to look to ECR's future with optimism, notwithstanding the further deterioration which has occurred in financial market conditions for companies in the mineral sector. Perhaps the best bellwether of such conditions globally is found in the level of the TSX Venture Exchange Composite Index, which has declined approximately 30% since the beginning of September 2014, and is now at little over half the level at which it began 2013, and less than a third of its 2011 high.
This state of affairs is reflected in the valuation of virtually every company in the mineral sector, wherever its shares may be traded, and is ultimately dictated by the prices of mined commodities and expectations as to the most likely direction of those prices. These prices and expectations tend to be the single greatest influence on the valuation of both producing mines and exploration or development stage projects.
It is possible that conditions will worsen further, but it is also possible that a strong recovery is just around the corner. Either way, the world continues to demand mined commodities, and opportunities to create value in the mineral sector will remain for companies which take a disciplined and prudent approach to their activities. As such a company, it is the business of ECR to seek out and develop these opportunities.
It is not generally expected that mineral exploration and development companies will generate corporate profits. The classic exit from an investment in an exploration company is via a takeover, where a larger company acquires the explorer lock, stock and barrel in order to integrate the principal project of the latter into the wider business of the former. Projects can also be sold on a standalone basis, or may be developed all the way to production by the exploration company, which then graduates to the status of mining company. Much depends on the attributes of the project in question, but nothing is possible without exploration dollars first being spent on the ground, and accordingly, ECR's main focus is on advancing carefully selected exploration projects, with due regard to the innate risks but also with an eye to the significant rewards which may accompany exploration success.
ITOGON PROJECT, PHILIPPINES
The centre of ECR's activities remains the Itogon gold project in the northern Philippines. ECR is the operator of Itogon and has the right to earn a 50% interest in the project. The Company, in conjunction with its drilling contractor, is currently carrying out a 990m diamond drilling programme at Itogon.
The drilling programme has been designed in view of the results of reverse circulation (RC) drilling completed at Itogon in April 2014, and with the benefit of extensive surface and underground mapping and sampling which has taken place since then. The current drilling is primarily intended to provide information as to the orientation of the interpreted mineralised structures, the extent of near surface supergene enriched zones, and the continuity of certain zones of mineralisation intercepted by the RC drill holes.
SLM PROJECT, ARGENTINA
The SLM project is located in La Rioja Province, Argentina and is 100% held by ECR's wholly owned subsidiary Ochre Mining SA ("Ochre"). Following completion of the detailed geological mapping exercise carried out in the latter part of 2014, it is planned that bulk sampling will commence at the Maestro Agüero prospect in March 2015. The Directors consider Maestro Agüero to be the most promising prospect at SLM on the basis of exploration results to date.
Ochre's channel sampling at Maestro Agüero has demonstrated the presence of moderate to high gold grades in narrow mesothermal quartz veins over a strike length of up to approximately 300m. However, it is apparent that gold grades change abruptly along strike, which is indicative of a nugget gold effect. In order to obtain a more representative indication of grade, it is planned that a bulk sample will be taken at Maestro Agüero in March 2015. Collection of the bulk sample will also provide additional information on the morphology of the veins.
FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2014
For the year to 30 September 2014 the Group recorded a total comprehensive expense attributable to shareholders of the Company of GBP1,858,040, compared with GBP7,528,366 for the year to 30 September 2013. As with last year and indeed the year before that, much of this year's expense occurred as a result of changes in the estimated value of the Company's interest in THEMAC Resources Group Ltd ("THEMAC"), reflected in the line items "impairment of available for sale assets" and "loss on revaluation of financial assets at fair value through profit or loss". Other major contributors were the loss on disposal of shares in THEMAC, referred to as "loss on disposal of available for sale financial asset", and of course the costs of operating the Company and carrying out exploration, comprised in the line item "other administrative expenses".
The Group's net assets as at 30 September 2014 were GBP4,609,044, in comparison with GBP6,269,458 at 30 September 2013. This decrease in net assets is mainly due to a fall in the estimated value of the Company's interest in THEMAC, comprised in the line items "available for sale financial assets" and "other financial assets", but also due to the inclusion of "interest bearing borrowings", which, it should be noted, represent a convertible loan received under a facility with YA Global Master SPV Ltd. This loan is expected to be repaid in full via conversions of principal and interest into new ordinary shares of the Company. ECR is also entitled to prepay the loan in cash. The principal terms of the convertible loan facility were announced on 3 September 2014.
As the net assets of the Company, at GBP4,918,670 are slightly less than half its called-up share capital, the Directors are compelled by section 656 of the Companies Act 2006 to call a general meeting to consider whether any, and if so what, steps should be taken to deal with the situation. Relevant here is the fact that for most of its existence since incorporation in 2004, ECR has operated as a different business with a different board of directors.
Initially this was as Mercator Gold plc, under which name the Company funded development of a gold mine in Australia that commenced production in 2007, only to fall into administration in 2008. The operating company of the Group in Australia, Mercator Gold Australia Pty Ltd ("MGA") was released from administration in late 2014. The assets of MGA were sold several years ago for the benefit of MGA's creditors. These assets had been obtained primarily using the proceeds of loans from the Company, the total amount of which is considered unlikely to be recovered. The funding used by the Company in order to make such loans was raised via the issuance of shares and convertible loan notes of the Company from 2004-2008. This issuance of shares is today reflected in the Company's share capital, but the corresponding assets are much reduced.
A similar process was repeated by the Company between 2009 and 2010, again under substantially the same board of directors as had presided over the Meekatharra investments, with respect to the Copper Flat project in New Mexico, USA. After substantial investment by the Company, again financed by the issuance of shares, an option over the Copper Flat project was sold to THEMAC, in exchange for a holding of common shares and common share purchase warrants of THEMAC. While the Group recorded a large profit in the year ended 30 September 2011 as a result of this transaction, the value of the shares and warrants fell drastically thereafter. Once again, the shares issued by the Company to fund this investment continue to be reflected in the Company's share capital, but the corresponding assets are much reduced. In the final reckoning, the Company's investments in the Meekatharra and Copper Flat projects were not successful. The same can be said of other, more minor investments made under the same board of directors.
However, the Board of the Company has been completely reconstituted since the time those investments were initiated. The Directors are strongly of the opinion that the international mineral exploration and development sector, although it is inherently high risk, can offer attractive investments for the Company, even in light of the present day financial constraints discussed earlier in this report. Moreover, the Directors believe that the Board as presently constituted is well suited to manage the process of identifying and making such investments successfully. Accordingly, the Company continues to invest in the Itogon and SLM projects, and potential new opportunities continue to be evaluated. On this basis, the Directors do not consider that any steps should be taken in respect of the level of the Company's net assets in relation to its share capital. Nevertheless, this year's annual general meeting, which will be held on 31 March 2015, will serve as a venue for the consideration of this matter, in accordance with the Companies Act 2006.
MERCATOR GOLD AUSTRALIA
In December 2014, MGA was released from external administration, to which it had been subject, as explained above, in 2008. MGA is a wholly owned subsidiary of the Company. As at 30 June 2014, MGA's accumulated tax losses are estimated to total A$80 million. This deferred tax asset gives MGA its value. The Company has been advised that under certain circumstances, its shares in MGA may be sold without invalidating MGA's tax losses. Given the absence within the Group of any income producing assets located in Australia, the high cost base of that country, and the highly competitive nature of its mineral exploration and development industry, it is the Company's intent to sell its shares in MGA in due course. Finding a buyer for these shares is, though, a process which is likely to take some time. Hence, MGA continues to be held as a non-current asset.
Stephen Clayson
Director & Chief Executive Officer
4 March 2015
Consolidated Income Statement
For the year ended 30 September 2014
ECR Minerals plc company no. 05079979
Hot Features
Premium
Year ended Year ended
30 September 2014 30 September 2013
Note GBP GBP
Continuing operations
Other administrative expenses (824,639) (980,527)
Impairment of available for - (26,216)
sale financial assets
Impairment of available 9 (600,645) (2,317,004)
for sale assets
Currency exchange differences 9,609 (2,811)
Impairment of other - (38,282)
current assets
Total administrative expenses (1,415,675) (3,364,840)
Operating loss 3 (1,415,675) (3,364,840)
Loss on extinguishment 16 - (68,119)
of debt by equity
Loss on revaluation of 9 (202,618) (2,434,564)
financial assets
at fair value through
profit or loss
Loss on disposal of available (121,922) (327,739)
for sale financial asset
Reclassification of fair 9 14,750 (702,919)
value movements on
disposal of available
for sale assets
(1,725,465) (6,898,181)
Finance income 654 78
Finance costs (21,586) (622,769)
Finance income and costs 7 (20,932) (622,691)
Loss for the year (1,746,397) (7,520,872)
before taxation
Income tax 5 - -
Loss for the year from (1,746,397) (7,520,872)
continuing operations
Discontinued operations
Profit for the year from 13 - 200,276
discontinued operations
Loss for the year (1,746,397) (7,320,596)
Attributable to owners (1,746,397) (7,311,371)
of the parent
Attributable - (9,225)
to non-controlling
interests
(1,746,397) (7,320,596)
Loss per share - basic 4
and diluted
On continuing operations (0.05)p (0.49)p
On discontinued operations - 0.01p
On continuing and (0.05)p (0.48)p
discontinued
operations
The loss for the Parent Company for the year was GBP1,669,949 (2013: GBP7,467,371).
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2014
ECR Minerals plc company no. 05079979
Year ended Year ended
Note 30 September 2014 30 September 2013
GBP GBP
Loss for the year (1,746,397) (7,320,596)
Items that may be
reclassified
subsequently to
profit or loss
Fair value movements 9 - (3,093,554)
on available
for sale assets
Reclassification of fair
value movements
to Income Statement :
on disposal of available 9 (14,750) 702,919
for sale assets
on impairment of available 9 - 2,317,004
for sale assets
Reclassification of exchange
differences
to Income Statement:
on disposal of foreign - (135,518)
subsidiary
Loss on exchange translation (96,893) (7,846)
Other comprehensive expense (111,643) (216,995)
for the year
Total comprehensive expense (1,858,040) (7,537,591)
for the year
Attributable to:
Owners of the parent (1,858,040) (7,528,366)
Non-controlling interest - (9,225)
Total comprehensive expense (1,858,040) (7,537,591)
for the year
Consolidated & Company Statement of Financial Position
At 30 September 2014
ECR Minerals plc company no. 05079979
Group Company
30 September 30 September 30 September 30 September
2014 2013 2014 2013
Note GBP GBP GBP GBP
Assets
Non-current
assets
Property, 8 10,820 711 10,642 -
plant
and
equipment
Investments 9 - - 624,008 451,893
in
subsidiaries
Exploration 10 1,422,493 894,145 1,165,062 603,073
assets
Other 11 3,228,390 3,228,390 3,228,390 3,228,390
receivables
4,661,703 4,123,246 5,028,102 4,283,356
Current
assets
Trade 11 174,051 30,099 147,154 -
and
other
receivables
Available 9 178,866 978,453 178,866 978,453
for
sale
financial
assets
Other 9 26,196 228,814 26,196 228,814
financial
assets
Taxation 2,380 19,699 2,380 19,699
Other 2,672 2,672 2,672 2,672
current
assets
Cash 12 642,056 1,238,562 609,400 1,238,428
and
cash
equivalents
1,026,221 2,498,299 966,668 2,468,066
Total 5,687,924 6,621,545 5,994,770 6,751,422
assets
Current
liabilities
Trade 15 284,819 352,087 282,039 345,679
and
other
payables
Interest 16 794,061 - 794,061 -
bearing
borrowings
1,078,880 352,087 1,076,100 345,679
Total 1,078,880 352,087 1,076,100 345,679
liabilities
Net 4,609,044 6,269,458 4,918,670 6,405,743
assets
Equity
attributable
to
owners
of the
parent
Share 14 10,483,166 10,453,946 10,483,166 10,453,946
capital
Share 14 40,131,118 40,096,112 40,131,118 40,096,112
premium
Exchange (91,842) 5,051 - -
reserve
Other 485,160 351,760 485,160 351,760
reserves
Retained (46,398,558) (44,637,411) (46,180,774) (44,496,075)
losses
4,609,044 6,269,458 4,918,670 6,405,743
Total 4,609,044 6,269,458 4,918,670 6,405,743
equity
The notes are an integral part of these consolidated financial statements. The financial statements were approved and authorised for issue by the Directors on 4 March 2015 and were signed on its behalf by:
Paul Johnson Stephen Clayson
Non-Executive ChairmanDirector & Chief Executive Officer
Consolidated Statement of Changes in Equity
For the year ended 30 September 2014
ECR Minerals plc company no. 05079979
Share Share Exchange Other Retained Non-
capital premium reserves reserves reserves controlling
(Note 14) (Note 14) interest Total
Group GBP GBP GBP GBP GBP GBP GBP
Balance 8,104,909 38,894,900 148,415 473,733 (37,436,291) 38,461 10,224,127
at 1
October
2012
Loss for - - - - (7,311,371) (9,225) (7,320,596)
the year
Reclassification - - (135,518) - - - (135,518)
of exchange
differences
on disposal
of
subsidiary
Available - - - - (3,093,554) - (3,093,554)
for sale
financial
assets fair
value
movements
Reclassification
of fair
value
movements
to
Income
Statement
:
on disposal - - - - 702,919 - 702,919
of
available
for sale
assets
on - - - - 2,317,004 - 2,317,004
impairment
of
available
for sale
assets
Loss - - (7,846) - - - (7,846)
on exchange
translation
Total - - (143,364) - (7,385,002) (9,225) (7,537,591)
comprehensive
expense
Share - - - (154,440) 154,440 - -
options
lapsed
Conversion 629,168 97,533 - (97,533) - - 629,168
of
loan notes
Shares 198,327 347,273 - - - - 545,600
issued
for
loans
advanced
Shares 120,513 82,915 - - - - 203,428
issued
in payment
of
creditors
Share issue - (60,480) - - - - (60,480)
costs
Share-based - - - 130,000 - - 130,000
payments
Share 392,500 392,500 - - - - 785,000
warrants
exercised
Issue of 1,008,529 341,471 - - - - 1,350,000
shares
Adjustment - - - - 29,442 (29,236) 206
on
disposal
of
subsidiaries
Balance 10,453,946 40,096,112 5,051 351,760 (44,637,411) - 6,269,458
at 30
September
2013
Loss for - - - - (1,746,397) - (1,746,397)
the year
Reclassification
of fair
value
movements
to
Income
Statement:
on disposal - - - - (14,750) - (14,750)
of
available
for sale
assets
Loss - - (96,893) - - - (96,893)
on exchange
translation
Total - - (96,893) - (1,761,147) - (1,858,040)
comprehensive
expense
Share - - - - - - -
options
lapsed
Conversion 28,066 33,625 - - - - 61,691
of
loan notes
Warrants - - - 133,400 - - 133,400
issued
in lieu
of finance
cost
Shares 1,154 1,381 - - - - 2,535
issued
in payment
of
creditors
Balance 10,483,166 40,131,118 (91,842) 485,160 (46,398,558) - 4,609,044
at 30
September
2014
Company Statement of Changes in Equity
For the year ended 30 September 2014
ECR Minerals plc company no. 05079979
Share Share Retained Other Total
capital premium reserves reserves
(Note 14) (Note 14)
Company GBP GBP GBP GBP GBP
Balance 8,104,909 38,894,900 (37,109,513) 473,733 10,364,029
at 1
October
2012
Loss for - - (7,467,371) - (7,467,371)
the year
Available - - (3,093,554) - (3,093,554)
for sale
financial
assets fair
value
movements
Reclassification
of fair
value
movements
to
Income
Statement:
on disposal - - 702,919 - 702,919
of
available
for sale
assets
on - - 2,317,004 - 2,317,004
impairment
of
available
for sale
assets
Total - - (7,541,002) - (7,541,002)
comprehensive
expense
Share - - 154,440 (154,440) -
options
lapsed
Conversion 629,168 97,533 - (97,533) 629,168
of
loan notes
Shares 198,327 347,273 - - 545,600
issued
for
loans
advanced
Shares 120,513 82,915 - - 203,428
issued
in payment
of
creditors
Share issue - (60,480) - - (60,480)
costs
Share-based - - - 130,000 130,000
payments
Share 392,500 392,500 - - 785,000
warrants
exercised
Issue of 1,008,529 341,471 - - 1,350,000
shares
Balance 10,453,946 40,096,112 (44,496,075) 351,760 6,405,743
at 30
September
2013
Loss for - - (1,669,949) - (1,669,949)
the year
Reclassification
of fair
value
movements
to
Income
Statement:
on disposal - - (14,750) - (14,750)
of
available
for sale
assets
Total - - (1,684,699) - (1,684,699)
comprehensive
expense
Share - - - - -
options
lapsed
Conversion 28,066 33,625 - - 61,691
of
loan notes
Warrants - - - 133,400 133,400
issued
in lieu
of finance
cost
Shares 1,154 1,381 - - 2,535
issued
in payment
of
creditors
Balance 10,483,166 40,131,118 (46,180,774) 485,160 4,918,670
at 30
September
2014
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2014
ECR Minerals plc company no. 05079979
Group Company
Year ended Year ended Year ended Year ended
30 September 30 September 30 September 30 September
Note 2014 2013 2014 2013
GBP GBP GBP GBP GBP
Net cash 24 (846,274) (507,582) (782,833) (709,615)
used in
operations
Investing
activities
Purchase 13,8 (10,642) (8,345) (10,642) -
of
property
plant
and
equipment
Increase 10 (624,142) (148,336) (561,989) (127,268)
in
exploration
assets
Proceeds 24 - 76,030 - 76,030
from
sale
of
subsidiary
Cash 24 - (257,131) - -
disposed
with
subsidiary
Investment - - (172,115) -
in
subsidiaries
Proceeds 66,988 220,628 66,988 220,628
from
sale
of
available
for
sale
financial
assets
Interest 654 78 654 78
received
Net cash (567,142) (117,076) (677,104) 169,468
(used
in)/generated
from
investing
activities
Financing
activities
Proceeds - 2,135,000 - 2,135,000
from
issue
of share
capital
Transfer - 250,000 - 250,000
from
restricted
cash
Proceeds 830,909 - 830,909 -
from
issue of
convertible
loan
notes
Loan - 243,287 - 243,287
advances
received
Repayment - (392,500) - (392,500)
of
convertible
loan
notes
Finance - (60,480) - (60,480)
costs
on
fundraising
Bank - (286,946) - -
loan
repaid
Interest - (63,041) - (63,041)
paid on
convertible
loan
notes
Interest - (513,281) - (513,225)
paid
and
other
financing
costs
Net cash 830,909 1,312,039 830,909 1,599,041
from
financing
activities
Net (582,507) 687,381 (629,028) 1,058,894
change
in
cash and
cash
equivalents
Cash and 1,238,562 479,397 1,238,428 179,534
cash
equivalents
at
beginning
of the
year
Effect (13,999) 71,784 - -
of
change
in
exchange
rates
Cash and 12 642,056 1,238,562 609,400 1,238,428
cash
equivalents
at end
of
the year
Notes to the Financial Statements
For the year ended 30 September 2014
1General information
The Company and the Group operated mineral exploration and development projects. The Group's principal interests are located in Argentina, the Philippines and Australia.
The Company is a public limited company incorporated and domiciled in England. The registered office of the Company and its principal place of business is 20 Eastcheap, London EC3M 1EB. The Company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
2Accounting policies
Overall considerations
The principal accounting policies that have been used in the preparation of these consolidated financial statements are set out below. The policies have been consistently applied unless otherwise stated.
Basis of preparation
The financial statements of both the Group and the Parent Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) and Interpretations issued by the IFRS Interpretations Committee (IFRIC) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. These are the standards, subsequent amendments and related interpretations issued and adopted by the International Accounting Standard Board (IASB) that have been endorsed by the European Union at the year end. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial instruments. The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and have not prepared an Income Statement or a Statement of Comprehensive Income for the Company alone.
The Group and Parent Company financial statements have been prepared on a going concern basis as explained on page 9 of the Directors' Report.
New Accounting Standards and Interpretations
Effective during the year
During the year the Group has adopted the following standards and amendments:
-- Amendments to IFRS 7 Financial Instruments: Disclosures - Offsetting
Financial Assets and Financial Liabilities (effective from 1 January
2013)
-- IFRS 13 Fair Value Measurement (effective from 1 January 2013)
The adoption of these standards and amendments did not have any impact on the financial position or performance of the Group.
Not yet effective
At the date of authorisation of these Group Financial Statements and the Parent Company Financial Statements, the following Standards, amendments and interpretations were endorsed by the EU but not yet effective:
-- Amendments to IAS 32 Financial Instruments: Presentation - Offsetting
Financial Assets and Financial Liabilities (effective from 1 January
2014)
-- IFRS 10 Consolidated Financial Statements *
-- IFRS 11 Joint Arrangements *
-- IFRS 12 Disclosure of Interests in Other Entities *
-- IAS 27 Separate Financial Statements *
-- IAS 28 Investments in Associates and Joint Ventures *
-- Amendments to IFRS 10, IFRS 12 and IAS 27: Investment Entities
-- Amendments to IFRS 10, IFRS 11 and IFRS 12: Consolidated Financial
Statements, Joint Arrangements and Disclosure of Interests in Other
Entities - Transition Guidance
-- Annual Improvements to IFRSs 2009-2011 Cycle
-- Amendments to IAS 36: Recoverable Amount Disclosures for Non-Financial
Assets
-- IFRIC Interpretation 21 Levies
-- Annual Improvements to IFRSs 2010-2012 Cycle
-- Annual Improvements to IFRSs 2011-2013 Cycle
-- Amendments to IAS 19: Defined Benefit Plans: Employee Contributions
* Effective from 1 January 2013 but EU entities may apply these standards and amendments at the latest from the commencement date of their first financial year starting on or after 1 January 2014.
In addition to the above there are also the following standards and amendments that have not yet been endorsed by the EU:
-- IFRS 9 Financial Instruments
-- IFRS 14 Regulatory Deferral Accounts
-- IFRS 15 Revenue from Contracts with Customers
-- Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities:
Applying the Consolidation Exception
-- Amendments to IAS 1: Disclosure Initiative
-- Annual Improvements to IFRSs 2012-2014 Cycle
-- Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
-- Amendments to IAS 16 and IAS 41: Bearer Plants
-- Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods
of Depreciation and Amortisation
-- Amendments to IFRS 11: Accounting for Acquisitions of Interests in
Joint Operations
The Group intends to adopt these standards when they become effective. The introduction of these new standards and amendments is not expected to have a material impact on the Group or Company.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and one of its subsidiaries made up to 30 September 2014. Subsidiary undertakings acquired during the period are recorded under the acquisition method of accounting and their results consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date such control ceases. Two other subsidiaries have not been consolidated on the grounds of immateriality. As explained in the Chief Executive Officer's Report, Mercator Gold Australia Pty Ltd has not been treated as a subsidiary undertaking as at 30 September 2014 on the basis that it was subject to external administration.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts. Cash equivalents include short-term investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and any provision for impairment losses.
Depreciation is charged on each part of an item of property, plant and equipment so as to write off the cost or valuation of assets less the residual value over their estimated useful lives, using the straight-line method. Depreciation is charged to the income statement. The estimated useful lives are as follows:
Office equipment 3 years Furniture and fittings 5 years Machinery and equipment 5 years
Expenses incurred in respect of the maintenance and repair of property, plant and equipment are charged against income when incurred. Refurbishments and improvements expenditure, where the benefit is expected to be long lasting, is capitalised as part of the appropriate asset.
An item of property, plant and equipment ceases to be recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on cessation of recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset ceases to be recognised.
Exploration and development costs
All costs associated with mineral exploration and investments are capitalised on a project-by-project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If an exploration project is successful, the related expenditures will be transferred to mining assets and amortised over the estimated life of the commercial ore reserves on a unit of production basis. Where a licence is relinquished or a project abandoned, the related costs are written off in the period in which the event occurs. Where the Group maintains an interest in a project, but the value of the project is considered to be impaired, a provision against the relevant capitalised costs will be raised.
The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.
Impairment testing
Individual assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may exceed its recoverable amount, being the higher of net realisable value and value in use. Any such excess of carrying value over recoverable amount or value in use is taken as a debit to the income statement.
Provisions
A provision is recognised in the Statement of Financial Position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Leased assets
In accordance with IAS 17, leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term.
Discontinued operations
In the income statement, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations. Any profit or loss arising from the sale or re-measurement of discontinued operations is presented as part of profit or loss from discontinued operations.
Taxation
Current tax is the tax currently payable based on taxable profit for the period.
Deferred income taxes are calculated using the Statement of Financial Position liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible
temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity, in which case the related current or deferred tax is also charged or credited directly to equity.
Investments in subsidiaries
Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies so as to claim benefit from their activities.
The investments in subsidiaries held by the Company are valued at cost less any provision for impairment that is considered to have occurred, the resultant loss being recognised in the income statement.
Equity
Equity comprises the following:
* "Share capital" represents the nominal value of equity shares, both ordinary and deferred.
* "Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issues.
* "Other reserves" represent the equity component of convertible debentures issued, plus the fair values of share options and warrants issued.
* "Retained reserves" include all current and prior year results, including fair value adjustments on available for sale financial assets, as disclosed in the consolidated statement of comprehensive income.
* "Exchange reserve" includes the amounts described in more detail in the following note on foreign currency below.
Foreign currency translation
The consolidated financial statements are presented in pounds sterling which is the functional and presentational currency representing the primary economic environment of the Group.
Foreign currency transactions are translated into the respective functional currencies of the Company and its subsidiaries using the exchange rates prevailing at the date of the transaction or at an average rate where it is not practicable to translate individual transactions. Foreign exchange gains and losses are recognised in the income statement.
Monetary assets and liabilities denominated in a foreign currency are translated at the rates ruling at the Statement of Financial Position date.
The assets and liabilities of the Group's foreign operations are translated at exchange rates ruling at the Statement of Financial Position date. Income and expense items are translated at the average rates for the period. Exchange differences are classified as equity and transferred to the Group's exchange reserve. Such differences are recognised in the income statement in the periods in which the operation is disposed of.
Share-based payments
The Company operates equity-settled share-based remuneration plans for remuneration of some of its employees. The Company awards share options to certain Company Directors and employees to acquire shares of the Company. Additionally, the Company has issued warrants to providers of loan finance.
All goods and services received in exchange for the grant of any share-based payment which vested after the Company's transition to IFRSs are measured at their fair values. Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee.
The fair value is appraised at the grant date and excludes the impact of non-market vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
All equity-settled share-based payments are ultimately recognised as an expense in the income statement with a corresponding credit to "other reserves".
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior years if share options ultimately exercised are different to that estimated on vesting.
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital and, where appropriate, share premium.
Financial instruments
The Group's financial assets comprise cash and cash equivalents, investments and loans and receivables. Financial assets are assigned to the respective categories on initial recognition, depending on the purpose for which they were acquired. This designation is re-evaluated at every reporting date at which a choice of classification or accounting treatment is available.
The Group's loans, investments and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at fair value on initial recognition. After initial recognition they are measured at amortised cost using the effective interest rate method, less any provision for impairment. Any change in their value is recognised in profit or loss. The Group's receivables fall into this category of financial instruments. Discounting is omitted where the effect of discounting is immaterial. All receivables are considered for impairment on a case-by-case basis when they are past due at the Statement of Financial Position date or when objective evidence is received that a specific counterparty will default.
Investments that are held as available for sale financial assets are financial assets that are not classified in any other categories. After initial recognition, available for sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial asset are recognised in equity, except that impairment losses, foreign exchange gains and losses on monetary items and interest calculated using the effective interest method are recognised in the income statement.
Where there is a significant or prolonged decline in the fair value of an available for sale financial asset (which constitutes objective evidence of impairment), the full amount of the impairment, including any amount previously charged to equity, is recognised in the consolidated income statement. The Directors consider a significant decline to be one in which the fair value is below the weighted average cost by more than 25%. A prolonged decline is considered to be one in which the fair value is below the weighted average cost for a period of more than twelve months.
If an available for sale equity security is impaired, any further declines in the fair value at subsequent reporting dates are recognised as impairments. Reversals of impairments of available for sale equity securities are not recorded through the income statement. Upon sale, accumulated gains or losses are recycled through the income statement.
Other financial assets comprise warrants. After initial recognition, other financial assets are measured at fair value. Any gains or losses from changes in fair value of the other financial asset are recognised in the income statement.
Financial liabilities, which are measured at amortised cost, and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Any instrument that includes a repayment obligation is classified as a liability.
Where the contractual liabilities of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities, and are presented as such in the Statement of Financial Position. Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any features meeting the definition of a financial liability then such capital is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Compound financial instruments
Compound financial instruments comprise both liability and either equity components or embedded derivatives.
For compound instruments including equity components, at issue date the fair value of the liability component is estimated by discounting its future cash flows at an interest rate that would have been payable on a similar debt instrument without any equity conversion option. The liability component is accounted for as a financial liability. The difference between the net issue proceeds and the liability component, at the time of issue, is the residual or equity component, which is accounted for as an equity reserve.
Embedded derivatives included within compound instruments are calculated using the Black Scholes model and are also included within liabilities, but are measured at fair value in the Statement of Financial Position, with changes in the fair value of the derivative component recognised in the consolidated income statement. The amounts attributable to the liability components equal the discounted cash flows.
Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of the proceeds.
The interest expense on the liability component is calculated by applying the effective interest rate for the liability component of the instrument. The difference between any repayments and the interest expense is deducted from the carrying amount of the liability.
Upon conversion of loan note debt the corresponding carrying value of loan note liability and equity reserve is released, and the difference between these and the nominal value of the shares issued on conversion is recognised as a share premium.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.
The most critical accounting policies and estimates in determining the financial condition and results of the Group are those requiring the greater degree of subjective or complete judgement. These relate to:
* fair values and impairment of investments in THEMAC Resources Group Ltd (Note 9);
* impairment reviews covering other investments (Note 9);
* capitalisation of exploration costs (Note 10);
* recovery of amount due from former subsidiary (Note 11);
* share-based payments (Note 14);
* conversion of YA Global loan into ordinary shares (Note 16).
3 Operating loss Year ended Year ended
30 September 30 September
The operating loss is stated 2014 2013
after charging:
GBP GBP
Depreciation of property,
plant and equipment
- continuing operations 358 1,663
Operating lease expenses 13,815 13,815
Share-based payments - 130,000
Auditors' remuneration:
Fees payable to current auditor and 24,000 20,000
its associates for audit of
the Group's annual financial
statements (including GBP15,000
(2013: GBP15,000) in respect of
the Company and GBP9,000 (2013:
GBP5,000) in respect of subsidiary
undertakings)
4 Loss per share Year ended Year ended
30 September 30 September
2014 2013
Weighted number of shares 3,260,089,969 1,526,068,537
in issue during the year
GBP GBP
(Loss) from continuing operations (1,746,397) (7,520,872)
Profit from discontinued - 209,501
operations attributable
to owners of the parent
(Loss) from continuing and (1,746,397) (7,311,371)
discontinued operations
attributable to owners of the parent
For both the continuing operations and for the continuing and discontinued operations, the disclosure of the diluted loss per share is the same as the basic loss per share as the conversion of share options decreases the basic loss per share thus being anti-dilutive.
5Corporation tax expense
The relationship between the expected tax expense based on the corporation tax rate of 22% for the year ended 30 September 2014 (2013: 23.5%) and the tax expense actually recognised in the income statement can be reconciled as follows:
Year ended Year ended
30 September 30 September
2014 2013
GBP GBP
Group loss for the year (1,746,397) (7,320,596)
Loss on activities at effective rate of (384,207) (1,720,340)
corporation tax of 22% (2013: 23.5%)
Expenses not deductible for tax purposes 205,045 1,566,932
Income not taxable (144) (18)
Depreciation in excess of capital allowances 79 391
Loss carried forward 179,227 153,035
Tax income / expense, net - -
The Company has unused tax losses of GBP2,600,000 (2013: GBP1,850,000) and other temporary differences amounting to losses of GBPNil (2013: GBP3,000). The related deferred tax asset has not been recognised in respect of these losses as there is no certainty in regards to the level and timing of future profits. No deferred tax adjustment arises on the fair value movements on the available for sale investments as any gain/loss on disposal will be exempt from tax.
6Staff numbers and costs
Year ended Year ended
30 September 30 September
2014 2013
Number Number
Directors 3 3
Administration 2 2
Total 5 5
The aggregate payroll costs of these persons were as follows:
GBP GBP
Staff wages and salaries 48,468 69,292
Directors' cash based emoluments 333,315 247,507
Share-based payments - 130,000
381,783 446,799
The remuneration of the directors, who are the key management personnel of the Group, in aggregate for each of the categories specified in IAS 24 'Related Party Disclosures' was as follows:
GBP GBP
Directors' cash based emoluments 333,315 247,507
Employer's national insurance contributions 34,561 20,529
Short-term employment 367,876 268,036
Share-based payments - 102,386
367,876 370,422
Directors' remuneration
As required by AIM Rule 19, details of remuneration earned in respect of the financial year ended 30 September 2014 by each Director are set out below:
Year ended 30 September 2014
Director Salary Bonus Share-based payments Total
GBP GBP GBP GBP
S Clayson 141,667 35,799 - 177,466
P Johnson 70,833 17,900 - 88,733
R Watts 54,229 12,887 - 67,116
266,729 66,586 - 333,315
Year ended 30 September 2013
Director Salary Bonus Share-based payments Total
GBP GBP GBP GBP
P A Harford 5,833 - - 5,833
S Clayson 90,641 34,404 55,046 180,091
L Tenuta 5,000 - - 5,000
K Irons 12,000 - - 12,000
P Johnson 41,194 17,202 27,523 85,919
R Watts 28,844 12,389 19,817 61,050
183,512 63,995 102,386 349,893
The highest paid Director received remuneration of GBP177,466 (2013: GBP125,045), excluding share-based payments. R Watts received remuneration totalling GBP67,116 (2013 GBP61,050) via a service company.
Details of each Director's share options and interests in the Company's shares are shown in the Directors' Report.
7Finance income and costs
Year ended Year ended
30 September 30 September
Finance costs 2014 2013
GBP GBP
Issue costs of convertible loans amortised - 6,695
Interest on convertible loans 11,353 197,805
Fair value of warrants issued under the 10,233 -
loan finance agreement (Note 14)
Amounts payable under equity swap agreements - 418,269
21,586 622,769
Finance income 2014 2013
GBP GBP
Interest on cash and cash equivalents 654 78
Net finance costs 20,932 622,691
8Property, plant and equipment
Group Furniture
and Office Machinery &
fittings equipment equipment Total
Cost GBP GBP GBP GBP
At 1 October 2013 2,740 12,020 660 15,420
Additions 705 6,072 3,865 10,642
Exchange differences arising - (223) (218) (441)
on translation
At 30 September 2014 3,445 17,869 4,307 25,621
Depreciation
At 1 October 2013 2,740 11,599 370 14,709
Depreciation for the year - 181 177 358
Exchange differences arising - (14) (252) (266)
on translation
At 30 September 2014 2,740 11,766 295 14,801
Net book value
At 1 October 2013 - 421 290 711
At 30 September 2014 705 6,103 4,012 10,820
Company
Furniture and Office Machinery &
fittings equipment equipment Total
Cost GBP GBP GBP GBP
At 1 October 2,740 11,342 - 10,082
2013
Additions 705 6,072 3,865 10,642
At 30 September 3,445 17,414 3,865 20,724
2014
Depreciation
At 1 October 2,740 11,342 - 14,082
2013
Depreciation - - - -
for the year
At 30 September 2,740 11,342 - 14,082
2014
Net book
value
At 1 October - - - -
2013
At 30 September 705 6,072 3,865 10,642
2014
The Group's property, plant and equipment are free from any mortgage or charge.
The comparable table for 2013 is detailed below.
Group Furniture
and Office Machinery &
fittings equipment equipment Total
Cost GBP GBP GBP GBP
At 1 October 2012 2,740 11,407 1,542 15,689
Exchange differences arising - 613 (882) (269)
on translation
At 30 September 2013 2,740 12,020 660 15,420
Depreciation
At 1 October 2012 1,989 10,767 415 13,171
Depreciation for the year 751 912 - 1,663
Exchange differences arising - (80) (45) (125)
on translation
At 30 September 2013 2,740 11,599 370 14,709
Net book value
At 1 October 2012 751 640 1,127 2,518
At 30 September 2013 - 421 290 711
Company
Furniture and fittings Office equipment Total
Cost GBP GBP GBP
At 1 October 2012 2,740 11,342 14,082
At 30 September 2013 2,740 11,342 14,082
Depreciation
At 1 October 2012 1,989 10,430 12,419
Depreciation 751 912 1,663
for the year
At 30 September 2013 2,740 11,342 14,082
Net book value
At 1 October 2012 751 912 1,663
At 30 September 2013 - - -
9Investments
Investment in
subsidiaries
GBP
Cost as at 1 October 2013 451,893
Addition 172,115
Balance at 30 September 2014 624,008
The comparable table for 2013 is detailed below:
Investment in
subsidiaries
GBP
Cost as at 1 October 2012 581,328
Additions (79,435)
Impairment (50,000)
Balance at 30 September 2013 451,893
Investment in subsidiaries
At 30 September 2014, the Company had interests in the following subsidiary undertakings:
Description
Principal and effective
country of Principal country of Proportion of
Subsidiaries: incorporation activity operation shares held
Ochre Mining Argentina Mineral Argentina 100%
SA Exploration
Warm Springs USA Dormant USA 90%
Renewable
Energy
Corporation
Copper USA Dormant USA 100%
Flat
Corporation
(formerly
New Mexico
Copper
Corporation)
Available for sale financial assets
2014 2013
GBP GBP
Quoted investments
At 1 October 978,453 4,646,136
Disposals (198,942) (547,913)
Impairment (600,645) (26,216)
Fair value movements - (3,093,554)
At 30 September 178,866 978,453
The GBP178,866 represents the value of the Company's holding of shares of THEMAC Resources Group Ltd ("THEMAC"). The fair value is based on quoted market prices at the year end. The shares are listed on TSX Venture Exchange (TSX-V: MAC). Due to the significant and prolonged decline in the market price, it is considered that the holding is now impaired and accordingly the fair value movements charged to the consolidated statement of comprehensive income has been reclassified as impairment in the consolidated income statement.
At 30 September 2014, the Company beneficially held approximately12% (2013: 15%) of THEMAC's issued share capital. The Company also held warrants, as noted below, which if exercised would potentially increase the Company's shareholding to approximately 14% (2013: 16%) on a fully diluted basis. The Company does not have any representation on THEMAC's board of directors, does not have a right to participate in policy making decisions of THEMAC and has not entered into any material transactions or interchanged managerial personnel with THEMAC. Nor has the Company provided significant technical information to THEMAC since the sale of the Company's option to acquire Copper Flat project to THEMAC. The investment in THEMAC has therefore never been accounted for as an investment in an associate.
As stated in Note 1, fair value adjustments on available for sale financial assets are included in retained reserves. An analysis of the fair value adjustments is shown below:
2014 2013
GBP GBP
Cumulative adjustments included in 14,750 73,631
retained reserves at 30 September
Movements during the year (600,645) (3,093,554)
Cumulative adjustments before reclassifications (585,895) (3,019,923)
Reclassifications:
On disposals (14,750) 702,919
On assets considered impaired 600,645 2,317,004
(585,895) 3,019,923
Other financial assets
2014 2013
GBP GBP
Warrants in a listed entity
At 1 October 228,814 2,663,378
Fair value movements (202,618) (2,434,564)
At 30 September 26,196 228,814
The Company acquired warrants as part consideration for the disposal of its option to acquire the Copper Flat project to THEMAC in 2011. Changes in fair values of the warrants are recorded in other gains / (losses) on revaluation of investments in the income statement.
The fair value of these warrants is calculated using the Black Scholes model with reference to the listed share price of THEMAC at the Statement of Financial Position date. The inputs into the model and resulting fair values were as follows:
Share price (C$) 0.04 Exercise price (C$) 0.28 Expected volatility 123 % Average option life in years 1.43 Expected dividends - Weighted average risk-free interest rate 1.07% (based on national government bonds)
The expected volatility is based on the average historical volatility over the previous 17 months of THEMAC shares and those of two other similar entities.
10Exploration assets
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
At 1 October 894,145 800,411 603,073 475,805
Additions 624,142 148,336 561,989 127,268
Translation difference (95,794) (54,602) - -
At 30 September 1,422,493 894,145 1,165,062 603,073
Exploration assets comprise all costs associated with mineral exploration and capitalised pending determination of the feasibility of the project and include appropriate technical and administrative expenses.
11Trade and other receivables
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Non-current assets
Amount owed by a former 3,228,390 3,228,390 3,228,390 3,228,390
subsidiary
Current assets
Prepayments and 174,051 30,099 147,154 -
accrued income
174,051 30,099 147,154 -
The short-term carrying values are considered to be a reasonable approximation of the fair value.
Amount owed by a former subsidiary
The amount of GBP3,228,390 due from a former subsidiary, Mercator Gold Australia Pty Ltd ("MGA"), is the Directors' best estimate of the amount recoverable and is stated after an impairment provision made in previous years of GBP31,849,884 and in the context of the following:
At the year end, MGA was subject to a Deed of Company Administration ("DOCA") and has no tangible assets. Control of MGA passed back to the Group in December 2014.
It is estimated that the full amount of tax losses accumulated by MGA currently totals approximately A$80 million. Advice to date indicates that these tax losses are available for use against future profits of MGA subject to certain conditions. The success of work completed to date to confirm the tax losses leads the Directors to believe that in due course a business project will be identified with the capacity to generate surplus funds in MGA that would enable it to repay, in whole or in part (but not less than the amount due net of the current impairment), the amount due to the Company and the Group.
To recover the amount due from MGA, the Company and the Group are dependent on MGA being able to generate sufficient surplus funds from future projects. The amount that may ultimately be receivable by the Company and the Group may be more or less than that shown above and this balance represents management's best estimate of the amount that will be recoverable.
The financial statements do not include the adjustments that would result if MGA were to be unable to generate sufficient surplus funds to settle the net amount due to the Company and the Group.
12Cash and cash equivalents
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Cash and cash equivalents
consisted
of the following:
Deposits at banks 639,803 1,238,447 607,311 1,238,313
Cash on hand 2,253 115 2,089 115
642,056 1,238,562 609,400 1,238,428
13Discontinued operations
The Company's management made a decision in September 2012 to sell the Company's interest in Gold Crest Holdings Ltd. and the disposal was completed on 8 February 2013. The results of the metal products segment were presented as discontinued operations in 2012 and 2013.
Gold Crest Holdings Ltd contributed the following to the Group's net operating cash flows in 2013:
2013
GBP
Operating cash flows 261,058
Investing cash flows (8,345)
Financing cash flows (286,946)
Total cash flows (34,233)
Analysis of the result of discontinued operations in 2013 was as follows:
2013
GBP
Revenue 1,385,846
Cost of sales (944,249)
Administrative expenses (438,320)
Profit/(loss) on ordinary activities 3,277
before finance costs and tax
Financial expense (34,027)
Loss after tax of discontinued operations (30,750)
Gain on sale of assets of disposal group 95,508
Reclassification of cumulative exchange differences 135,518
Profit/(loss) for the year from discontinued operations 200,276
Profit/(loss) from a discontinued operation attributable to:
Owners of the Parent Company 209,501
Non-controlling interest (9,225)
200,276
14Share capital and share premium accounts
The share capital of the Company consists of two classes of shares: ordinary shares of 0.1 pence each which have equal rights to receive dividends or capital repayments and each of which represents one vote at shareholder meetings; and deferred shares of 9.9 pence each which have limited rights as laid out in the Company's articles: in particular deferred shares carry no right to dividends or to attend or vote at shareholder meetings and deferred share capital is only repayable after the nominal value of the ordinary share capital has been repaid.
a)Changes in issued share capital and share premium:
Number Ordinary Deferred Total Share
of
Shares shares shares shares premium Total
GBP GBP GBP GBP GBP GBP
At 1 October 3,259,129,317 3,259,130 7,194,816 10,453,946 40,096,112 50,550,058
2013
Shares 1,153,417 1,154 - 1,154 1,381 2,535
issued
in payment
of creditors
Loan 28,066,424 28,066 - 28,066 33,625 61,691
converted
into shares
Balance 3,288,349,158 3,288,350 7,194,816 10,483,166 40,131,118 50,614,284
at 30
September
2014
All the shares issued are fully paid up and none of the Company's shares are held by any of its subsidiaries.
b)Potential issue of ordinary shares
Share options
The number and weighted average exercise prices of share options valid at the year end are as follows:
Weighted Number of Weighted Number of
average options average options
exercise price exercise price
2014 2014 2013 2013
GBP GBP
Exercisable 0.004 141,200,000 0.025 19,000,000
at
the beginning
of the year
Granted - 0.002 130,000,000
during
the year
Lapsed during - 0.025 (7,800,000)
year
Exercisable 0.004 141,200,000 0.004 141,200,000
at the
end of the
year
The options outstanding at 30 September 2014 have an exercise price of GBP0.025 and GBP0.002 and a weighted average remaining contractual life of four years (2013: five years).
Share warrants
Weighted Number of Weighted Number of
average warrants average warrants
exercise price exercise price
2014 2014 2013 2013
GBP GBP
Exercisable 0.03 2,692,506 0.03 2,692,506
at
the beginning
of the year
Granted 0.003 94,500,000 0.002 392,500,000
during
the year
Exercised - - 0.002 (392,500,000)
during
the year
Expired in - - 0.03 -
the year
Exercisable 0.004 97,192,506 0.03 2,692,506
at the
end of the
year
All the warrants granted during the year were issued to YA Global Master SPV Ltd. These warrants, which represent a direct cost of entering into a loan financing agreement with YA Global Master SPV Ltd, have been valued and recognised in other reserves, with the corresponding amount included in finance costs (Note 7).
The assessed fair value of the warrants granted during the year was determined using the Black Scholes model. The following inputs to the model were used:
Share price at grant date GBP0.0024 Exercise price GBP0.0030 Expected volatility 104 % Life in years 3 Expected dividends - Weighted average risk-free interest rate 1.213% (based on national government bonds)
The expected volatility is based upon the historical volatility of the Company over the previous three years, and reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.
15Trade and other payables - short-term
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Trade payables 23,647 57,873 22,661 54,228
Social security and employee taxes 52,311 60,876 50,862 58,113
Other creditors and accruals 208,861 233,338 208,516 233,338
284,819 352,087 282,039 345,679
16Interest bearing liabilities
Group and Company 2014 2013
GBP GBP
YA Global Master SPV Ltd loan - unsecured 794,061 -
Total 794,061 -
YA Global Master SPV Ltd loan
On 3 September 2014 entered into an agreement in relation to a convertible loan facility (the "Facility") of up to US$10 million to be made available by YA Global Master SPV Ltd (the "Investor"), an investment fund managed by Yorkville Advisors Global, LP. The Facility, which will be available to the Company for three years, provides for an initial loan tranche of principal amount US$1.5 million (the "Initial Tranche") to be drawn down immediately by ECR, and for future tranches up to an aggregate principal amount of US$10 million.
The outstanding principal amount of a tranche (a "Loan") drawn down by ECR under the Facility is convertible at the Investor's option into ordinary shares of the Company of 0.1p ("Ordinary Shares") on the following terms: (a) at 92.5% of the average daily volume weighted average price (VWAP) of the Ordinary Shares during the ten trading days preceding the conversion date, conversion on this basis being restricted to a maximum amount of US$250,000 per calendar month; or (b) at GBP0.003735 (0.3735p) in the case of the Initial Tranche or 150% of the average daily VWAP of the Ordinary Shares during the five trading days preceding drawdown of any subsequent Loan, conversion on this basis being subject to no maximum amount.
On maturity of a Loan, which shall be two years from the date of drawdown (extendable by up to one year at the option of the Investor) any outstanding principal amount will be mandatorily converted to Ordinary Shares at the closing price of the Ordinary Shares on or immediately prior to the maturity date. Interest on the outstanding principal amount of a Loan will accrue at 10% per annum, payable in Ordinary Shares at 92.5% of the average daily VWAP of the Ordinary Shares during the ten trading days prior to the interest payment date. An implementation fee of 7.5% of the principal amount of each Loan is payable to the Investor upon drawdown of the relevant Loan.
The Company is entitled to prepay a Loan in cash, in whole or in part, by making a payment to the Investor equal to the principal amount to be prepaid plus any interest due and an additional amount of 10% of the principal amount to be prepaid. The Facility provides for customary events of default, and following an event of default the outstanding principal amount of a Loan plus interest may in certain circumstances become immediately due and payable in cash. If an event of default has been continuing for at least 30 calendar days, the outstanding principal amount of a Loan may at the Investor's option be converted in whole or in part to Ordinary Shares at 80% of the VWAP of the Ordinary Shares for the five trading days preceding the date of such a conversion.
In the event that the 30 day moving average closing price of the Ordinary Shares falls below the nominal value of an Ordinary Share for a period of five consecutive trading days, the outstanding principal amount of a Loan shall become repayable in cash on a monthly basis over the remaining term of the Loan, with interest also payable in cash. If the closing price of the Ordinary Shares were to subsequently cease to be less than the nominal value of an Ordinary Share for a period of ten consecutive trading days, the monthly cash repayments would no longer be required and the Loan would revert to being convertible into Ordinary Shares on the prior terms.
With respect to the Initial Tranche, the Investor has received 94,500,000 warrants, each exercisable to acquire one Ordinary Share for a price of GBP0.003 (0.3p) and valid for three years. In connection with any subsequent Loan, the Investor will receive a quantity of warrants equal to 25% of the principal amount of such Loan (converted to GBP) divided by the closing price of the Ordinary Shares on the trading day prior to the date of drawdown, each warrant to be valid for three years and exercisable to acquire one Ordinary Share for a price equal to 125% of the VWAP of the Ordinary Shares on the trading day prior to the date of drawdown.
Loan extinguishment of debt by equity
IFRIC 19 extinguishing financial liabilities with equity instruments provides guidance on the accounting for the extinguishment of a financial liability by the issue of equity instruments. Under IFRIC 19, equity instruments issued under such arrangement will be measured at their fair value, and any difference between carrying amount of the financial liability extinguished and the consideration paid will be recognised in the profit or loss. The settlement of the convertible loan notes and the YA Global Master SPV Ltd loan as well as a small number of other debts by the issue of shares resulted in an additional amount of 2014 GBPNil (2013: GBP68,119), being the difference between the fair value of shares and transaction value being recognised as a loss in the income statement.
17Capital management
The Group's objective when managing capital is to safeguard the entity's ability to continue as a going concern and develop its mineral exploration and development and other activities to provide returns for shareholders and benefits for other stakeholders.
The Group's capital structure comprises all the components of equity (all share capital, share premium, retained earnings when earned and other reserves). When considering the future capital requirements of the Group and the potential to fund specific project development via debt, the Directors consider the risk characteristics of the underlying assets in assessing the optimal capital structure.
18Related party transactions
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Amounts owed to a Director - 2,803 - 2,803
Amounts owed to former Directors 5,506 16,973 5,506 16,973
Details of Directors' emoluments are disclosed in Note 6.
The Directors are the only key management. Transactions with the Directors are disclosed in Note 19 and this note.
Amounts owed to former directors relate to overpayment in respect of subscription for warrants and balance owing on consultancy fees.
During the year the Company subscribed for new shares of Ochre Mining SA ("Ochre") to the value of GBP172,115 in order to provide funding for Ochre's exploration activities. Ochre is a wholly owned subsidiary of the Company and operates the SLM project in Argentina.
19Advances made to directors
2014 2013
GBP GBP
S Clayson
Advances - to cover business expenses 32,917 17,706
Repayments achieved through expense claims (22,618) (17,706)
Amount owed at the year end 10,299 -
20Commitments and contingencies
Capital expenditure commitment
As at 30 September 2014, the Group had no commitments (2013: GBPNil).
Operating lease commitments
Details of operating lease commitments are set out in Note 21 below.
21Operating leases
The total amounts payable under:
Non-cancellable operating lease liabilities of the Group and Company are as follows:
2014 2013
Payable: GBP GBP
Within 2 years 27,630 -
Between 2 - 5 years - 41,445
22Financial instruments
Categories of financial instrument
2014 2013
GBP GBP
Financial assets
Cash and cash equivalents 642,056 1,238,562
642,056 1,238,562
Available for sale financial assets 178,866 978,453
Other financial assets 26,196 228,814
205,062 1,207,267
Financial liabilities
Trade payables 23,647 57,873
23,647 57,873
Borrowings 794,061 -
794,061 -
Risk management objectives and policies
The Group's principal financial assets comprise cash and cash equivalents, trade and other receivables, investments and prepayments. In addition the Company's financial assets include amounts due from its former operating subsidiary, Mercator Gold Australia Pty Ltd, which is held at cost less a provision for impairment. The Group's liabilities comprise trade payables, other payables including taxes and social security, and accrued expenses.
The Board determines as required the degree to which it is appropriate to use financial instruments, commodity contracts or other hedging contracts to mitigate financial risks.
Credit risk
The Group's cash at bank is held with reputable international banks. Cash is held either on current account or on short-term deposit at floating rates of interest determined by the relevant prevailing base rate. The fair value of cash and cash equivalents at 30 September 2014 and 30 September 2013 did not differ materially from their carrying value.
The Company has material exposure to receivables risk in respect of the loan to its former subsidiary, Mercator Gold Australia Pty Ltd, until recently subject to external administration. Since Mercator Gold Australia Pty Ltd was subject to external administration and not under the Company's control during the year ended 30 September 2014, this risk could not be mitigated.
Market risk
The Group's financial instruments potentially affected by market risk include bank deposits, and trade payables. An analysis is required by IFRS 7, intended to illustrate the sensitivity of the Group's financial instruments (as at period end) to changes in market variables, being exchange rates and interest rates.
The Group's exposure to market risk is not considered to be material.
Interest rate risk
The Company has no material exposure to interest rate risk.
Since the interest accruing on bank deposits was relatively immaterial and the amount due from the former subsidiary was interest free, there is no material sensitivity to changes in interest rates.
Foreign currency risk
The Company is exposed to foreign currency risk in so far as some dealings with overseas subsidiary undertakings are in foreign currencies and in that certain of the Company's holdings of listed securities are denominated in foreign currencies, in particular Canadian and Australian dollars. The foreign currency exposure to the impaired former Australian subsidiary is not considered to be material in the context of the provision made against it.
Fair value of financial instruments
The fair values of the Company's financial instruments at 30 September 2014 and 30 September 2013 did not differ materially from their carrying values.
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
* Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
* Level 2: valuation techniques based on observable inputs either directly (i.e. as prices) or indirectly (i.e. derived from prices);
* Level 3: valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, by the level in the fair value hierarchy into which the measurement is categorised.
Group and Company
30 September 2014
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Available for sale financial assets 178,866 - - 178,866
Other financial assets - 26,196 - 26,196
178,866 26,196 - 205,062
Group and Company
30 September 2013
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Available for sale financial assets 978,452 - - 978,452
Other financial assets - 228,814 - 228,814
978,452 228,814 - 1,207,266
Liquidity risk
The Company finances its operations primarily through the issue of equity share capital and debt in order to ensure sufficient cash resources are maintained to meet short-term liabilities and future project development requirements. Management monitors availability of funds in relation to forecast expenditures in order to ensure timely fundraising. Funds are raised in discrete tranches to finance activities for limited periods.
Funds surplus to immediate requirements may be placed in liquid, low risk investments.
The Company's ability to raise finance is subject to market perceptions of the success of its projects undertaken during the year and subsequently. Due to the uncertain state of financial markets there can be no certainty that future funding will continue to be available.
The table below sets out the maturity profile of financial liabilities as at 30 September 2014.
2014 2013
GBP'000 GBP'000
Due in less than 1 month 175 352
Due between 1 and 3 months - -
Due between 3 months and 1 year 794 -
Due after 1 year - -
969 352
23Segmental report
The Company is engaged in mineral exploration and development. The undertaking disposed of during 2013 was involved in the manufacture of metal products. An analysis of the Group revenue, results, assets and liabilities, capital expenditure and depreciation is provided below.
Year ended 30 September 2014 Year ended 30 September 2013
Mining and Metal Mining and
exploration products exploration
continuing discontinued continuing
GBP GBP GBP
External revenue - 1,385,846 -
Interest income 654 - 78
Interest expense 21,586 34,027 622,769
Net profit / (loss) (1,746,397) 200,276 (7,520,872)
Total assets 5,687,924 - 6,621,546
Total liabilities 1,078,880 - 352,087
Capital expenditure 634,784 8,345 148,336
Depreciation & amortisation 358 - 1,662
Impairment of available - - (26,216)
for sale assets
Impairment of other - - (38,282)
current assets
Management does not segment the mineral exploration by geographical region when evaluating performance.
24Consolidated cash flow statement
Group Company
Year ended Year ended Year ended Year ended
30 September 30 September 30 September 30 September
Note 2014 2013 2014 2013
GBP GBP GBP GBP
Operating
activities
(Loss)/profit (1,746,397) (7,320,596) (1,669,949) (7,467,371)
for the
year before
tax
Adjustments:
Depreciation 8 358 1,662 - 1,662
expense,
property,
plant
and equipment
Recycling of - (135,518) - -
exchange
differences
on disposal of
subsidiary
Gain (95,508)
on disposal
of assets
in disposal
group
Provisions and 585,895 3,046,139 585,895 3,046,139
impairment
of investment
and loans
Impairment - 38,282 - 38,282
of other
current assets
Provision for - - - -
bad debts
Loss - 68,119 - 68,119
on
extinguishment
of debt
Loss 121,922 327,739 109,621 327,739
on available
for sale
financial
assets
Interest (654) (78) (654) (78)
income
Loss/(gain) on - - - -
derivative
Loss/(gain) on 202,618 2,434,564 202,618 2,434,564
revaluation
of investments
Issue costs 7 - 6,695 - 6,695
amortised
- convertible
loan
Interest 7 21,586 616,074 20,814 616,018
paid on
convertible
loans
Interest - - - -
expense
- other
Share-based - 130,000 - 130,000
payments
(Increase)/decrease (20,785) 607,807 (23,987) 60,699
in
accounts
receivable
(Increase)/decrease 17,319 - 17,319 -
in taxation
Increase/(decrease) (28,136) 93,523 (24,510) (61,315)
in
accounts
payable
(Increase)/decrease - (415,718) - -
in inventories
Shares issued - 89,232 - 89,232
in lieu
of expense
payments
Net cash flow (846,274) (507,582) (782,833) (709,615)
used
in operations
Non-cash transactions
During the year there were the following
significant non-cash transactions:
GBP
Loan notes converted into shares 64,226
Disposal of subsidiary - 2013
GBP
Property, plant and equipment 546,759
Inventories 877,736
Trade and other receivables 432,026
Cash and cash equivalents 257,131
Trade and other payables (1,661,801)
Interest bearing borrowings (52,696)
399,155
Non-controlling interests (29,236)
Net assets and non-controlling interests disposed of 369,919
Gain on disposal 94,706
Total disposal consideration receivable 464,625
Non-cash consideration (325,000)
Consideration receivable in cash 139,625
Transaction costs paid (25,313)
114,312
Impairment of amount receivable (38,282)
Cash received 76,030
Cash and cash equivalents disposed of (257,131)
25Post balance sheet events
-- On 24 November 2014, the Company announced it had purchased 358,000
common shares of Tiger International Resources, Inc. ("Tiger") for
consideration of C$0.20 per share. Tiger shares are listed on Canada's
TSX Venture Exchange with the symbol TGR. The purchase equated to
3.67% of Tiger's issued share capital.
-- On 4 December 2014, Mercator Gold Australia Pty Ltd ("MGA") was
released from external administration.
-- On 5 December 2014 the Company announced the issue of 102,905,100
ordinary shares of GBP0.1p each in the Company following the partial
conversion of convertible loan notes amounting to US$250,000 at a
price of GBP0.001549 per share.
-- On 16 December 2014 the Company announced the issue of 97,037,767
ordinary shares of GBP0.1p each in the Company following the partial
conversion of convertible loan notes amounting to US$264,288 at a
price of GBP0.001733 per share.
-- On 31 December 2014 the Company announced the grant to Directors,
staff and consultants of 208,940,427 share options exercisable to
acquire one ordinary share of the Company at a price of GBP0.00275
(0.275 pence) per share. The Options are valid for five years and will
vest immediately.
-- On 22 January 2015 the Company announced that the second phase of
drilling by the Company at the Itogon gold project, Philippines had
commenced.
-- On 9 February 2015 the Company announced an agreement of three further
tranches of US$250,000 under the convertible loan facility in place
with YA Global SPV Ltd. The first of the tranches has been drawn down,
the second will be drawn on or about 2 March 2015, and the third will
be drawn down on or around 1 April 2015.
-- On 27 February 2015 the Company announced updates on two projects: SLM
Gold Project, Argentina - Following completion of the detailed
geological mapping exercise carried out in the latter part of 2014,
bulk sampling is due to commence at the Maestro Agüero prospect in
March 2015; Itogon Gold Project, Philippines - Further to ECR's
announcement dated 22 January 2015, diamond drilling was proceeding
satisfactorily at the Itogon project, which is presently the Company's
main operational focus. Two of the seven holes planned had been
completed to date, and the third hole was underway.
ECR Minerals plc
(the "Company")
Company no. 05079979
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the annual general meeting of the Company will be held at the East India Club, 16 St James's Square, London SW1Y 4LH on 31 March 2015 at 9.30am in order to consider and, if thought fit, pass Resolutions 1 to 4 as ordinary resolutions and Resolution 5 as a special resolution:
Ordinary Resolutions
1 To receive, consider and adopt the directors' report and accounts of the Company for the year ended 30 September 2014.
2 To re-appoint Nexia Smith & Williamson Audit Ltd of 25 Moorgate, London EC2R 6AY, as auditors of the Company and to authorise the directors to determine their remuneration.
3 To re-elect as a director Stephen Clayson who is retiring in accordance with Article 29 of the Company's Articles of Association and who being eligible is offering himself for re-election.
4 That the directors be generally and unconditionally authorised pursuant to Section 551 of the Companies Act 2006 (the "Act") to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company ("Rights") up to an aggregate nominal amount of GBP3,000,000, provided that this authority shall, unless previously revoked or varied by the Company in general meeting, expire at the conclusion of the next annual general meeting of the Company following the date of the passing of this resolution or (if earlier) 15 months from the date of passing this resolution, but so that the directors may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of that offer or agreement as if the authority hereby conferred had not expired.
Special Resolution
5 That, subject to the passing of Resolution 4, the directors be given the general power to allot equity securities (as defined by Section 560 of the Act) for cash, either pursuant to the authority conferred by Resolution 4 or by way of a sale of treasury shares, as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to:
5.1 the allotment of equity securities in connection with an offer by way of a rights issue:
5.1.1 to the holders of ordinary shares in proportion (as nearly as may be practicable) to their respective holdings; and
5.1.2 to holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary, but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory body or stock exchange; and
5.2 the allotment (otherwise than pursuant to paragraph 5.1 above) of equity securities up to an aggregate nominal amount of GBP3,000,000. The power granted by this resolution will unless otherwise renewed, varied or revoked by the Company, expire at the conclusion of the next annual general meeting of the Company following the date of the passing of this resolution or (if earlier) 15 months from the date of passing this resolution, save that the Company may, before such expiry make offers or agreements which would or might require equity securities to be allotted after such expiry, and the directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted to the directors to allot equity securities as if Section 561(1) of the Act did not apply, but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities.
Section 656 Companies Act 2006 ("s656") has been brought to the attention of the directors of the Company; s656 requires that when the net assets of a public company are less than half of its called-up share capital, the directors of that company are required to convene a general meeting. Accordingly the annual general meeting of the Company will be held in addition for the purpose of considering, whether any, and if so what, steps should be taken to deal with this situation.
By order of the board of directors of ECR Minerals plc
Stephen Clayson
Director & Chief Executive Officer
Registered office:
ECR Minerals plc
Peek House
20 Eastcheap
London EC3M 1EB
4 March 2015
This information is provided by Business Wire
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