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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Q Resources | LSE:QRES | London | Ordinary Share | JE00B3MJTG49 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 16.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMQRES
RNS Number : 7083N
Q Resources Plc
06 September 2011
Q Resource plc
("Q Resources" or "Company")
Interim results for the six months ended 30 June 2011
Q Resources Plc ("Q Resources" or the "Company") today announces its unaudited interim results for the six months ended 30 June 2011.
A copy of the Interim Report will also be available on the Company's website shortly (www.qresourcesplc.com).
Contact details:
Q Resources plc +44 (0)20 7360 4900 Ivan Murphy, Non-Executive Chairman (c/o Alex Simmons at Smithfield) Fairfax I.S. PLC Nominated Adviser and Broker Ewan Leggat / Katy Birkin +44 (0)20 7598 5368 Smithfield Consultants Limited Financial PR Alex Simmons / John Kiely +44 (0)20 7360 4900
CHAIRMAN'S STATEMENT
We have continued our review of a large number of opportunities to date, which fall within our strategic focus, and we continue to have a selection of projects under evaluation. Our priority in the near term is to continue with our due diligence in relation to the potential purchase of the Montecristo Copper Mine and the Santo Domingo processing plant (together the "Montecristo Copper Project" or "MCP").
On 12 April 2011 we announced that we had entered into a Memorandum of Understanding and 12 week exclusivity undertaking (the "MOU") with HPC Maria Ltd, a wholly-owned subsidiary of Pentagon Bernini Fund Ltd, Gottex ABL (Cayman) Limited, and Antofagasta LLC, a wholly owned subsidiary of Quantek Master Fund SPC (together the "Vendors"), in relation to the potential purchase of the MCP, located in the Antofagasta Province of Chile, approximately 140km south of Antofogasta.
The MOU covers the potential acquisition of mining licences and all mining assets of the MCP for a consideration of US$110m (the "Potential Transaction"). The consideration for the acquisition of MCP will be satisfied by the issue of new ordinary shares of Q Resources PLC and the issue of loan notes in Q Resources PLC to the Vendors.
MCP operated as a copper mine for 11 years until 2008, at which point the mine was placed on care and maintenance as a result of the global financial crisis.
An exploration programme in 2008 provided a resource estimate and a project design for production of 10,000 tonnes per annum of copper in concentrate, and approximately 0.5 million tonnes of iron ore concentrate per annum at 68% Fe. The underground mine design comprises open stope mining with ore requiring conventional crushing, milling, floatation, and magnetic separation prior to delivery to the market. The existing Santo Domingo process plant would be acquired from the Vendors and comprises the substantial part of the required operating facilities. A dedicated small port will be required to be built to export the iron ore concentrate.
It is expected that early production of copper will be achievable and, subject to permitting and modifications to the plant, treatment of existing tailings at the MCP will assist with the environmental clean up of the site. An environmental impact statement for treatment of the tailings and construction of the port has already been submitted.
On 1 July 2011 an extension to the exclusivity period was agreed with the Vendors. The exclusivity period will now conclude on 31 October 2011. During this extended period we will continue with our due diligence in relation to the potential purchase of the MCP. Accordingly, trading in the Company's shares will continue to be suspended from trading on AIM until the Company is able to announce full details of the MCP acquisition, publish an admission document and convene a general meeting of shareholders, as required under Rule 14 of the AIM Rules for Companies.
We believe the Montecristo Copper Project continues to be a very exciting prospect which will bring clear and immediate financial benefits to Q Resources PLC.
We continue to work well with all our professional advisers and I would like to thank them on behalf of the Board.
Ivan Murphy
Chairman
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Hot Features
Premium
Six months Six months
ended ended Period ended
30 June 30 June 31 December
2011 2010 2010
Note Unaudited Unaudited Audited
------------
GBP GBP GBP
Operating expenses (1,163,117) (162,123) (944,764)
Start up costs - (188,796) (188,796)
Share based payment charge 13 (115,728) - (514,776)
------------ ----------- -------------
Operating loss 6 (1,278,845) (350,919) (1,648,336)
Finance income 2 - -
Finance cost (2,558) (458) (2,086)
------------ ----------- -------------
Net finance costs (2,556) (458) (2,086)
Loss for the period before
taxation (1,281,401) (351,377) (1,650,422)
Taxation 8 - - -
------------ ----------- -------------
Loss for the period after
taxation (1,281,401) (351,377) (1,650,422)
============ =========== =============
Total comprehensive loss
for the period attributable
to:
Owners (1,281,401) (351,377) (1,650,422)
============ =========== =============
Basic and diluted loss
per share 9 (0.03) (0.08) (0.05)
============ =========== =============
The above results are derived from continuing operations.
CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
Notes 30 June 2011 31 December 2010
Unaudited Audited
GBP GBP
ASSETS
Non current assets
Property, plant and equipment 10 11,041 8,129
-------------
Total non-current assets 11,041 8,129
Current assets
Trade and other receivables 11 103,501 97,390
Cash and cash equivalents 1,625,381 2,030,837
------------- -----------------
Total current assets 1,728,882 2,128,227
------------- -----------------
Total assets 1,739,923 2,136,356
=============
EQUITY AND LIABILITIES
Capital and reserves
Share capital 12 3,577,715 2,947,215
Share based payment reserve 630,504 514,776
Warrant reserve - 232,558
Retained deficit (2,690,386) (1,641,543)
-------------
Total equity 1,517,833 2,053,006
------------- -----------------
Current liabilities
Trade and other payables 14 222,090 83,350
------------- -----------------
Total liabilities 222,090 83,350
------------- -----------------
Total equity and liabilities 1,739,923 2,136,356
============= =================
CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Share
Share Retained based Warrant
Notes capital deficit payment reserve Total
---------- ------------ -------- ---------- ------------
GBP GBP GBP GBP GBP
Balance at 1
January 2011 2,947,215 (1,641,543) 514,776 232,558 2,053,006
---------- ------------ -------- ---------- ------------
Loss for the
period - (1,281,401) - - (1,281,401)
---------- ------------ -------- ---------- ------------
Total
comprehensive
income for the
period - (1,281,401) - - (1,281,401)
---------- ------------ -------- ---------- ------------
Transactions with
owners
Share based
payment charge 13 - - 115,728 - 115,728
Exercise of
warrants 12 630,500 232,558 - (232,558) 630,500
Total transactions
with owners 630,500 232,558 115,728 (232,558) 746,228
---------- ------------ -------- ---------- ------------
Balance at 30 June
2011
(Unaudited) 3,577,715 (2,690,386) 630,504 - 1,517,833
========== ============ ======== ========== ============
Balance at 1
January 2010 - - - - -
---------- ------------ -------- ---------- ------------
Loss for the
period - (351,377) - - (351,377)
---------- ------------ -------- ---------- ------------
Total
comprehensive
loss for the
period - (351,377) - - (351,377)
---------- ------------ -------- ---------- ------------
Transactions with
owners
Issue of shares
and warrants 12 3,275,002 - - - 3,275,002
Placing costs (117,580) - - - (117,580)
Total
transactions
with owners 3,157,422 - - - 3,157,422
---------- ------------ -------- ---------- ------------
Balance at 30
June 2010
(Unaudited) 3,157,422 (351,377) - - 2,806,045
---------- ------------ -------- ---------- ------------
CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Six months Six months
ended ended Period ended
30 June 30 June 31 December
2011 2010 2010
Unaudited Unaudited Audited
------------ ----------- -------------
GBP GBP GBP
Cash flows from operating
activities
Loss for the period before taxation (1,281,401) (351,377) (1,650,422)
Adjustments for:
Depreciation charge 1,381 32 1,044
Share based payments 115,728 - 514,776
Net finance costs 2,556 458 2,086
Increase in receivables (6,111) (21,000) (97,390)
Increase in payables 138,740 52,089 83,350
Net cash used in operating
activities (1,029,107) (319,798) (1,146,556)
------------ ----------- -------------
Cash flows from investing
activities
Purchase of property, plant and
machinery (4,293) (3,133) (12,141)
Net finance costs (2,556) (458) (2,086)
Proceeds from sale of property,
plant and machinery - - 2,968
------------ ----------- -------------
Net cash used in investing
activities (6,849) (3,591) (11,259)
------------ ----------- -------------
Cash flows from financing
activities
Proceeds from issue of shares and
warrants 630,500 3,275,002 3,305,112
Payment of transaction costs - (117,580) (116,460)
Net cash generated from financing
activities 630,500 3,157,422 3,188,652
------------ ----------- -------------
Net increase in cash and cash
equivalents (405,456) 2,834,033 2,030,837
Cash and cash equivalents at
beginning of the period 2,030,837 - -
------------ ----------- -------------
Cash and cash equivalents at end
of the period 1,625,381 2,834,033 2,030,837
============ =========== =============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2011
1. GENERAL INFORMATION
The Company is a public company limited by shares, incorporated in Jersey on 13 November 2009, whose registered office is 43/45 La Motte Street, St Helier, Jersey, JE4 8SD. The Company has been established to identify, acquire and make investments in resource assets with an initial focus on Africa and/or South America.
On 9 April 2010, the Company's ordinary shares were admitted to trading on AIM, a market operated by the London Stock Exchange plc ("AIM").
2. GOING CONCERN
The directors' report summarises the Company's activities, its financial performance and financial position together with any factors likely to affect its future development. In addition, it discusses the principal risks and uncertainties the Company faces. Note 5 to the financial statements summarises the Company's capital and risk management objectives and policies together with financial risks.
The directors are confident that the Company has adequate resources to continue in operational existence for the foreseeable future and for this reason they have adopted the going concern basis in preparing the financial statements.
3. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This condensed unaudited interim financial information for the six months ended 30 June 2011 has been prepared in accordance with IAS 34, 'Interim financial reporting'. The condensed unaudited interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2010, which have been prepared in accordance with IFRS.
(a) Foreign currencies
(i) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The financial statements are presented in Sterling (GBP), which is the Company's functional and presentation currency, as the directors consider GBP as the currency that most faithfully reflects the economic effects of the underlying transactions, events and conditions.
(i) Transactions and balances
Transactions denominated in foreign currencies are translated into the functional currency at the rates of exchange ruling at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss. Such balances are translated at period-end exchange rates.
(b) Taxation
The Company is resident for taxation purposes in Jersey and its income is subject to Jersey income tax, presently at a rate of zero.
The income tax expense for the period comprises current and deferred tax. Income tax is recognised in the profit and loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In that case, tax is also recognised in other comprehensive income or directly in equity, respectively. Taxable profit differs from accounting profit as reported in the profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Current tax expense is the expected tax payable on the taxable income for the period. It is calculated on the basis of the tax laws and rates enacted or substantively enacted at the reporting date, and including any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the asset can be utilised. This requires judgements to be made in respect of the availability of future taxable income
The Company's deferred tax assets and liabilities are calculated using tax rates that are expected to apply in the period when the liability is settled or the asset realised based on tax rates that have been enacted or substantively enacted by the reporting date.
Deferred income tax assets and liabilities are offset only when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
No deferred tax asset or liability is recognised in respect of temporary differences associated with investments in subsidiaries, branches and joint ventures where the Company is able to control the timing of reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.
(c) Property, plant and equipment
All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying value when it is considered probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Depreciation is calculated using the straight-line method to allocate the cost over the assets' estimated useful lives, as follows:
- Computer equipment: 4 years
- Furniture, fittings and equipment: 5 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at least at each financial year-end.
An asset's carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
(d) Financial instruments
Financial assets and liabilities are recognised at the reporting date when the Company has become a party to the contractual provisions of the instrument. The Company's policies in respect of the main financial instruments are as follows:
Trade and other receivables
Trade and other receivables are not interest bearing and are initially recognised at their fair value and are subsequently stated at amortised cost using the effective interest method as reduced by appropriate allowances for estimated irrecoverable amounts.
Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest method.
Cash and cash equivalents
Cash comprises of cash at bank. Cash equivalents are short term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
Financial instruments
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts the estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(e) Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. Currently the Company only operates in one geographical location and only has one operating segment.
(f) Share based payments
The Company has applied the requirements of IFRS 2 "Share Based Payments". As stated in note 12, the Company issued options and warrants at the time of the initial placement. The Company's share option scheme is recognised as an expense with a corresponding credit to the share based payment reserve. The warrants are split between Series 'A' and Series 'B'. The Series 'A' warrants were issued to investors as part of the fundraising and are shown separately in the warrant reserve. The Series 'B' were issued for a service to be provided to the Company and are expensed to the profit or loss over the vesting period. The fair value is measured at grant date.
Certain Company employees and consultants are rewarded with share based instruments. These are stated at fair value at the date of grant and are expensed to the profit and loss, over the vesting period of the instrument, or charged to share capital when the share based payment relates to the provision of fund raising services.
Fair value is estimated using the Black-Scholes or Monte Carlo option pricing model as appropriate. The estimated life of the instrument used in the model is adjusted for management's best estimate of the effects of non-transferability, exercise restrictions and behavioural considerations.
(g) Lease commitments
Leases where the lessor retains substantially all of the risks and rewards of ownership are classified as operating leases and the rental payments are charged to the profit and loss on a straight-line basis over the lease term.
The accounting policies adopted above are consistent with those of the previous financial period.
New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2011 and not early adopted
Standard Issued Effective EU Endorsement
Dates Expected
IFRS 7 Financial Instruments: 7 Oct 10 1 Jul 11 Q3 2011
Disclosures - Amendments;
Disclosures - Transfers of
Financial Assets
IFRS 1 First-time Adoption of 20 Dec 1 Jul 11 Q4 2011
IFRS - Amendment; Severe 10
Hyperinflation and Removal
of Fixed Dates for
First-Time Adopters
IAS 12 Income Taxes - Amendment; 20 Dec 1 Jan 12 Q4 2011
Deferred Tax: Recovery of 10
Underlying Assets
IFRS 9 Financial Instruments 12 Nov 1 Jan 13 Postponed
09
IFRS 10 Consolidated Financial 12 May 1 Jan 13 TBC
Statements 11
IFRS 11 Joint Arrangements 12 May 1 Jan 13 TBC
11
IFRS 12 Disclosure of Interests in 12 May 1 Jan 13 TBC
Other Entities 11
IFRS 13 Fair Value Measurement 12 May 1 Jan 13 TBC
11
IAS 27 Separate Financial 12 May 1 Jan 13 TBC
Statements (as amended 11
2011)
IAS 28 Investments in Associates 12 May 1 Jan 13 TBC
and Joint Ventures (as 11
amended 2011)
The Board is yet to assess the impact of the above standards on the Company's operations.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In preparing the financial statements the Company must select and apply various accounting policies. In order to apply its accounting policies the Company makes estimates and judgements concerning the future. The resulting accounting estimates will, by definition seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are as follows:
Share based payments
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and make assumptions about them.
5. FINANCIAL RISK MANAGEMENT
Financial risk factors
The Board has overall responsibility for the determination of the Company's risk management objectives and policies. The Company's overall risk management policies focus on the volatility of financial markets and seek to minimise potential adverse effects on the Company's financial performance and flexibility.
The Company's activities expose it to a variety of financial risks; credit risk, and market risk. The Company has financial instruments of other receivables, cash and cash equivalents and other items such as accruals, and other payables.
The interim condensed financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's financial statements as at 31 December 2010.
The Company held no derivative instruments during the period ended 30 June 2011.
There have been no changes in the risk management policies since the financial statements as at 31 December 2010.
6. OPERATING LOSS
Operating loss has been arrived at after charging:
30 June 30. June 31 December
2011 2010 2010
-------- --------- ------------
GBP GBP GBP
Depreciation of property, plant and
equipment 1,381 32 1,044
Net foreign exchange loss 719 52 1,188
Operating lease expense 31,877 - 28,474
Staff costs 234,821 - 150,453
-------- --------- ------------
As detailed in notes 12 and 13, the company had issued share options and warrants to the shareholders, directors and key employees. It is the Company's policy to apply a charge to the profit or loss for the period. The share options and warrants were issued for the following reasons;
- Series 'A' Warrants - These were granted as an incentive to subscribe for shares in the Company at the time of the Initial placing offer, these have now expired.
- Series 'B' Warrants - These were issued to Quantic Limited to incentivise them to identify acquisitions for the Company.
- Options - These were issued to directors and key employees, as part of their overall remuneration package.
For further information on the warrants and options refer to note 12.
Amounts payable to Baker Tilly UK Audit LLP and their associates in respect of both audit and non-audit services as follows:
30 June 30. June 31 December
2011 2010 2010
-------- --------- ------------
GBP GBP GBP
General advice on AIM admission - 25,113 25,113
Audit of financial statements 16,460 - 12,000
---------
16,460 25,113 37,113
======== ========= ============
7. STAFF COSTS
The average monthly number of employees (including executive officers) employed by the Company for the period was as follows:
30 June 30. June 31 December
2011 2010 2010
---------
Office and management 2 - 1
======== ========= ============
The aggregate remuneration comprised:
30 June 30 June 31 December
2011 2010 2010
-------- -------- ------------
GBP GBP GBP
Wages and salaries 234,821 - 137,500
Share based payment charge 115,728 - 224,944
-------- -------- ------------
350,549 - 362,444
======== ======== ============
Directors' remuneration:
30 June 30 June 31 December
2011 2010 2010
------- -------
Wages & salaries GBP GBP GBP
Stephen James Folland 15,000 7,500 22,500
Ivan James Bowen Murphy 15,000 7,500 22,500
Andrew Paul Richards 15,000 7,500 22,500
Joseph Philippe Cohen 15,000 7,500 22,500
Michael Allan Price 19,999 3,333 23,333
------- ------- -----------
79,999 33,333 113,333
======= ======= ===========
Directors' share based payments:
30 June 30 June 31 December
2011 2010 2010
------- -------
GBP GBP GBP
Stephen James Folland - - 7,750
Ivan James Bowen Murphy - - 69,750
Andrew Paul Richards - - 23,250
Joseph Philippe Cohen - - 54,250
Michael Allan Price - - 75,332
------- ------- -----------
- - 230,332
======= ======= ===========
See notes 12 and 13 for further details on the share based payments made during the period.
8. TAXATION
The Company is domiciled in Jersey, Channel Islands. Any profits arising in the company are subject to tax at the rate of 0%.
9. LOSS PER SHARE
30 June 30 June 31 December
2011 2010 2010
------------ ----------- ------------
GBP GBP GBP
Loss after tax for the period
attributable to owners (1,284,501) (351,377) (1,650,422)
Weighted average number of ordinary
shares 56,826,880 21,596,015 36,322,503
Basic loss per share (0.03) (0.08) (0.05)
============ =========== ============
The calculation of the basic and diluted loss per share is based on the following data:
Due to the loss incurred in the period, there is no dilutive effect of share options and warrants.
10. PROPERTY, PLANT AND EQUIPMENT
Furniture,
fittings
Computer equipment and equipment Total
------------------- --------------- -------
GBP GBP GBP
Cost
1 January 2011 8,333 840 9,173
Additions 4,293 - 4,293
Disposals - - -
------------------- --------------- -------
30 June 2011 12,626 840 13,466
=================== =============== =======
Accumulated depreciation
1 January 2011 976 68 1,044
Charge for the period 1,290 91 1,381
30 June 2011 2,266 159 2,425
=================== =============== =======
Net book value
30 June 2011 10,360 681 11,041
=================== =============== =======
31 December 2010 7,357 772 8,129
=================== =============== =======
11. TRADE AND OTHER RECEIVABLES
31 December
30 June 2011 2010
------------- ------------
GBP GBP
Other receivables 91,800 91,765
Prepayments 11,701 5,625
-------------
103,501 97,390
============= ============
The above trade and other receivables, in addition to cash and cash equivalents represent the financial assets of the company.
12. SHARE CAPITAL
Ordinary shares
of no par value
allotted and fully
Number paid
----------- --------------------
GBP
Formation shares 2 2
Additional shares - 1 April 2010 54,583,333 3,010,271
Share issue costs - (93,168)
Warrants exercised - 8 November 2010 501,833 30,110
As at 31 December 2010 55,085,168 2,947,215
----------- --------------------
Warrants exercised - 31 May 2011 10,508,332 630,500
----------- --------------------
As at 30 June 2011 65,593,500 3,577,715
=========== ====================
The formation shares of the Company were issued on 13 November 2009 upon incorporation and the Company has an unlimited authorised share capital. Pursuant to a placing on 1 April 2010 the Company issued 54,583,333 ordinary shares of no par value in the Company at six pence per ordinary share and warrants as detailed below to raise GBP3.275 million before expenses. On 8 November 2010, shareholders exercised a proportion of their warrants in accordance with the warrant instrument dated 31 March 2010. Subsequently an additional 501,833 shares were issued at six pence per share. On 31 May 2011 there were a further 10,508,332 shares issued at six pence per share following the exercise of the corresponding number of warrants.
At the time of the above placing the Company issued a total of 13,645,833 Series 'A' 2010 warrants. These were issued on the basis of one warrant for every four ordinary shares placed. The warrant subscription period commenced at admission and ran to the date of the first anniversary of the Company's admission to AIM. The subscription price was six pence per share. As noted above the Company had warrants exercised during the period and at the period end all Series 'A' 2010 warrants in issue were either exercised by 9 April 2011 or had lapsed in accordance with the warrant instrument dated 31 March 2010.
At the time of the above placement the Company also issued a total of 5,000,000 Series 'B' 2010 warrants. The warrants were issued on 9 April 2010. The warrant subscription period commenced at admission and runs to the earlier of the date 10 business days after an offer becomes or is declared unconditional in all aspects or the date which is 18 months from the date of admission to AIM.
The subscription price is 12 pence per share. All these warrants remained outstanding at the period end. The 5,000,000 Series 'B' 2010 warrants are exercisable by 9 October 2011.
The directors of the Company have been granted options in the Company. The total amount of options to acquire ordinary shares is 13,100,000; each option is the equivalent to one ordinary share. 5,000,000 of the options are exercisable from the date of a reverse takeover and ending three years thereafter, the option strike price being six pence per share. 8,100,000 of the options are exercisable in three tranches; 3,120,000 at completion of the first transaction, 2,490,000 12 months thereafter and 2,490,000 24 months thereafter, the option strike price being 20 pence per share, subject to adjustment under Rule 7 of the No. 2 Share Option Plan if the Company's share capital is subsequently altered or reorganised. Of these 8,100,000 options, share performance hurdles apply whereby the closing price per share shall be at least 20%, 25% & 30% higher then the option price for 10 days prior to the exercise of the option in respect of the first, second and third tranches detailed.
13. SHARE BASED PAYMENTS
Share option plan
As stated in note 12, the Company has issued the directors and the Chief Executive Officer, Bernard Pryor, with share options to purchase ordinary shares in the Company. During the period, the company issued additional share options to the Chief Financial Officer, Gavin Ferrar.
Number Weighted
of share average
options exercise
price
Balance at beginning of the financial period 11,800,000 GBP0.14
Granted during the period 1,300,000 GBP0.20
----------- ----------
Balance at end of the financial period 13,100,000 GBP0.15
=========== ==========
Exercisable at the end of the financial period - -
=========== ==========
The fair value of the share options issued is estimated at the date of the grant using the Monte Carlo valuation model, taking into account the terms and conditions upon which the share options have been granted. The table below lists the data used for the share options granted during the period.
GBP0.06 -
Share price at date of grant GBP0.21
----------------------------------- ------------
GBP0.03 -
Fair value at date of grant GBP0.10
----------------------------------- ------------
Expected volatility 80%
----------------------------------- ------------
Expected volatility - New options 53%
----------------------------------- ------------
Risk free interest rate 2.1% - 2.8%
----------------------------------- ------------
Annual dividend yield -
----------------------------------- ------------
Risk free interest rate is based on the gilt rates at the date of grant, which are commensurate with the term until exercise for those awards. Annual dividend yield is based on management's immediate intention to re-invest operating cash flows. Expected volatility was determined by calculating the mean and medium three year volatility of mining companies quoted on AIM with an average market capitalisation of between GBP10 million and GBP60 million. The expected period until exercise is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
Warrants
The company has issued 18,645,833 warrants; these were divided into Series 'A' and Series 'B'. The split is shown in the table below.
Series 'A' Series 'B'
Weighted Weighted
average average
Number exercise Number exercise
of warrants price of warrants price
Balance at beginning of
the financial period 13,144,000 GBP0.06 5,000,000 GBP0.12
Granted during the - - - -
period
Exercised during the (10,508,332) GBP0.06 - -
period
Lapsed during the (2,635,668) - - -
period
------------- ---------- ------------- ----------
Balance at end of the - - 5,000,000 GBP0.12
financial period
============= ========== ============= ==========
Exercisable at the end - - 5,000,000 GBP0.12
of the financial
period
============= ========== ============= ==========
The fair value of the warrants issued is estimated at the date of the grant using the Black Scholes valuation model, taking into account the terms and conditions upon which the warrants have been granted. The table below lists the data used for the warrants granted during the period.
Series Series
'A' 'B'
---------------------------------------- --------- ---------
Share price at date of grant GBP0.115 GBP0.115
---------------------------------------- --------- ---------
Fair value at date of grant GBP0.09 GBP0.12
---------------------------------------- --------- ---------
Expected period until exercised (days) 365 548
---------------------------------------- --------- ---------
Expected volatility 80% 80%
---------------------------------------- --------- ---------
Risk free interest rate 1.6% 1.6%
---------------------------------------- --------- ---------
Annual dividend yield - -
---------------------------------------- --------- ---------
The Series 'A' Warrants valuation was undertaken for the purpose of splitting the funding proceeds between the shares issued and the warrants issued to investors.
The calculated fair value of the options and warrants charge to the Statement of Total Comprehensive income is as follows:
31 December
30 June 2011 2010
------------- ------------
GBP GBP
Share options 115,728 455,276
Warrants - Series 'B' - 59,500
------------- ------------
115,728 514,776
============= ============
14. TRADE AND OTHER PAYABLES
31 December
30 June 2011 2010
------------- ------------
GBP GBP
Other payables 220,090 83,350
============= ============
The above trade and other payables represent the financial liabilities of the Company.
15. CONTINGENT LIABILITIES
At 30 June 2011, the Company had no material litigation claims outstanding, pending or threatened against, which could have a material effect on the Company's financial position or results of operations.
16. RELATED PARTY TRANSACTIONS
The following transactions were carried out with related parties:
Related parties
During the period consulting services of GBP3,702 (30 June 2010: GBPNil) were accrued for Mr Rui De Sousa, who is a 40% owner of Quantic Limited, which in turn is a substantial shareholder of the Company. At the period end GBP1,831 (31 December 2010: GBP5,807) remained outstanding.
During the period consulting services of GBP19,034 (30 June 2010: GBP98,655) were paid to Gazprombank Invest (MENA) S.A.L. This company is owned 50% by Quantic Limited, which in turn is a substantial shareholder of the Company. This consultancy agreement has since been terminated and all monies due to Gazprombank Invest (MENA) S.A.L have been fully paid.
Key management compensation
The remuneration of the directors and the Chief Executive and Financial Officer, who are the key management personnel of the Company, is set out below in aggregate for each of the categories specified in IAS 24 'Related Party Disclosures'. Further information about the remuneration of individual directors is provided in note 7.
30 June 2011 30 June 2010
------------- -------------
GBP GBP
Short-term employee benefits 314,821 -
Share-based payment 115,728 -
------------- -------------
430,549 -
============= =============
17. CONTROLLING PARTY
In the opinion of the directors, no one individual has control of the Company, and ultimate control rests with the board of directors.
18. FINANCIAL STATEMENTS
The financial information contained in this Interim Report does not constitute statutory accounts as defined by the Companies (Jersey) Law 1991. No statutory accounts for the period have been delivered to the Jersey Registrar of Companies. The financial information contained in this Interim Report has not been audited.
The statutory accounts for the year ended 31 December 2010 have been filed with the Jersey Registrar of Companies. The auditor's report on these accounts was unqualified. The financial information contained in this Interim Report has been presented and prepared in accordance with interim reporting standards, in a form consistent with the annual accounts and in accordance with accounting policies and standards applicable to those annual accounts. However, these interim accounts do not include all the disclosures required for those annual accounts. Both the annual accounts and these interim accounts have been prepared in accordance with International Financial Reporting Standards. There have been no changes in the company's accounting policies since 31 December 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSSFFMFFSESU
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