Share Name Share Symbol Market Type Share ISIN Share Description
Sovereign Mine LSE:SMA London Ordinary Share GB00B3P3XP06 ORD 0.01P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 0.255p 0.23p 0.28p - - - 0 06:31:42
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.0 -0.2 -0.0 - 2.20

Sovereign Mines of Africa PLC Interim Results for the 6 months ended 30 June 17

29/09/2017 7:00am

UK Regulatory (RNS & others)


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Sovereign Mines of Africa PLC

29 September 2017

29 September 2017

Sovereign Mines of Africa PLC

("SMA" or "the Company")

Interim Results for the six months ended 30 June 2017

Sovereign Mines of Africa PLC (AIM:SMA), is pleased to announced its interim results for the six months ended 30 June 2017.

Enquiries:

SOVEREIGN MINES OF AFRICA PLC

Giles Clarke - c/o Camarco

+44 20 3757 6983

SHORE CAPITAL - NOMINATED ADVISER & BROKER

Toby Gibbs / Jerry Keen

+44 207 408 4090

CAMARCO

Tom Huddart / Jane Glover / Billy Clegg

+44 20 3757 4980

SOVEREIGN MINES OF AFRICA PLC

CHAIRMAN'S STATEMENT

On 20 January 2017, the Company announced it had completed the farm-out of its 75% interest in the Mandiana Gold Project in the Republic of Guinea, West Africa to Volcanic Metals Corp. In connection with the farm-out Volcanic has changed its name to "Volcanic Gold Mines Inc." and now trades under its new name on the TSX Venture Exchange, under the symbol "VG". In consideration for the farm-out the Company received 2,502,489 common shares in Volcanic, as announced on 7 November 2016.

Having previously pursued a wider strategy of targeting assets in a number of sectors, the Company is now pursuing a more targeted strategy. A Memorandum of Understanding ("MOU") was signed on 28 September 2017 with an Indian business to acquire its specialist eyewear manufacturing company. Further announcements will be made in due course.

The Company is currently deemed a cash shell under AIM Rule 15, pursuant to which it is required to make an acquisition which constitutes a reverse takeover under AIM Rule 14. Trading in the Company's shares was suspended on 21 July 2017. Trading in the Company's shares will remain suspended until publication of a re-admission document and the approval of any transaction at a general meeting of the Company. If no transaction is completed the Company's shares are scheduled to be cancelled from trading on AIM on 21 January 2018 pursuant to AIM Rule 41.

We would like to thank all our shareholders for their continued support during this period of change within the Company and we look forward into the second half of 2017 with confidence.

Financial

The Company reports a loss from continuing operations of GBP95,433 for the six-month period ended 30 June 2017, compared to a loss of GBP43,795 for the corresponding period in 2016. The loss in the period represents the costs of running the Company during this transitional phase. The Company also reported a profit from discontinued operations in relation to the sale of its interest in the Mandiana Gold Project of GBP656,140, representing the market value of the Volcanic shares received as consideration for the disposal on 20 January 2017.

The Company had cash resources of GBP278,235 at 30 June 2017 which will provide sufficient finance to cover the Company's ongoing expenditure.

Post year end the Company has sold a total of 1,533,989 of its equity shares in Volcanic. The average share price for the sales is CAD$0.43, resulting in total consideration, net of commission, of GBP402,640.

Related Party Transaction

On 28 September 2017 the Company agreed a contract with Westleigh Investments Holdings Ltd to provide bookkeeping and other secretarial services for a fee of GBP19,000 per six months. The independent directors, being Jeremy Sparrow and Rupert Fraser, consider, having consulted with the Company's nominated adviser, Shore Capital, that the terms of the contract with Westleigh Investments Holdings Ltd are fair and reasonable insofar as the Company's shareholders are concerned.

C G Clarke

Chairman

29 September 2017

SOVEREIGN MINES OF AFRICA PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six months ended 30 June 2017

 
                                                 Six months           Six months           Year ended 
                                                      ended                ended          31 December 
                                  Note              30 June              30 June                 2016 
                                                       2017                 2016              Audited 
                                                  Unaudited            Unaudited                  GBP 
                                                        GBP                  GBP 
 Administrative costs 
  Other administrative 
  expenses                                         (95,433)             (44,976)            (207,683) 
 Finance income                                           -                1,181                6,136 
                                         ------------------   ------------------   ------------------ 
 Loss on ordinary activities 
  before taxation                                  (95,433)             (43,795)            (201,547) 
 
 Tax on loss on ordinary                                  -                    -                    - 
  activities 
                                         ------------------   ------------------   ------------------ 
 Loss for the financial 
  period from continuing 
  operations                                       (95,433)             (43,795)            (201,547) 
 
 Profit from discontinued 
  operation                       4                 656,140                    -                    - 
                                         ------------------   ------------------   ------------------ 
 Profit/(loss) for the 
  period attributable to 
  owners of the parent                              560,707             (43,795)            (201,547) 
 
 Other comprehensive                                      -                    -                    - 
  income 
 Items that may be reclassified 
  to profit or loss: 
 Revaluation of available-for-sale                  144,894                    -                    - 
  investments 
                                         ------------------   ------------------   ------------------ 
 Total comprehensive income/(loss) 
  for the period attributable 
  to owners of the parent                           705,601             (43,795)            (201,547) 
                                                ===========          ===========          =========== 
 Total comprehensive income/(loss) 
  attributable to owners of the parent 
  arising from: 
   Continuing operations                           (95,433)             (43,795)            (201,547) 
   Discontinued operation                           801,034                    -                    - 
                                         ------------------   ------------------   ------------------ 
                                                    705,601             (43,795)            (201,547) 
                                                ===========          ===========          =========== 
 
 Earnings/(loss) per ordinary 
  share (pence) 
 From continuing and 
  discontinued operations: 
  Basic and diluted               5                  0.065p             (0.005)p              (0.02)p 
                                                ===========          ===========          =========== 
 

SOVEREIGN MINES OF AFRICA PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2017

 
                                              As at               As at               As at 
                                            30 June             30 June         31 December 
                                               2017                2016                2016 
                           Note           Unaudited           Unaudited             Audited 
                                                GBP                 GBP                 GBP 
FIXED ASSETS 
Available for sale 
 financial assets           4               801,034                   -                   - 
Intangible assets                                 -                   -                   - 
                                 ------------------  ------------------  ------------------ 
                                            801,034                   -                   - 
                                 ------------------  ------------------  ------------------ 
 
CURRENT ASSETS 
Other receivables                            11,652                   -               2,438 
Cash at bank                                278,235             452,866             399,446 
Assets classified 
 as held for sale           4                     -                   -                   - 
                                 ------------------  ------------------  ------------------ 
                                            289,887             452,866             401,884 
CURRENT LIABILITIES 
Trade and other payables                   (27,348)            (27,131)            (49,883) 
                                  -----------------   -----------------  ------------------ 
NET CURRENT ASSETS                          262,538             425,735             352,001 
                                   ----------------    ----------------  ------------------ 
NET ASSETS                                1,063,573             425,735             352,001 
                                        ===========         ===========         =========== 
 
EQUITY ATTRIBUTABLE 
 TO EQUITY 
HOLDERS OF THE COMPANY 
Share capital               6             3,163,589           3,163,589           3,163,589 
Share premium account                     5,563,520           5,563,520           5,563,520 
Reconstruction reserve                    (586,100)           (586,100)           (586,100) 
Share-based payment 
 reserve                                    696,097             606,108             690,126 
Retained earnings                       (7,773,533)         (8,321,382)         (8,479,134) 
                                   ----------------    ----------------    ---------------- 
TOTAL EQUITY                              1,063,573             425,735             352,001 
                                        ===========         ===========         =========== 
 

SOVEREIGN MINES OF AFRICA PLC

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

Six months ended 30 June 2017

 
                                                Six months                                   Six months                                           Year ended 
                                                to 30 June                                   to 30 June                                     31 December 2016 
                                                      2017                                         2016 
                                                 Unaudited                                    Unaudited                                              Audited 
                                                       GBP                                          GBP                                                  GBP 
 
Net cashflow 
 used in 
 operating 
 activities   3                                  (121,211)                                     (49,485)                                            (101,724) 
 
Cash flows 
from 
financing 
activities 
Finance 
 income                                                  -                                        1,181                                                    - 
               -------------------------------------------  -------------------------------------------  --------------------------------------------------- 
                                                         -                                        1,181                                                    - 
Net decrease 
 in cash and 
 cash 
 equivalents                                     (121,211)                                     (48,304)                                            (101,724) 
 
Cash and 
 cash 
 equivalents 
 at 
 beginning 
 of period                                         399,446                                      501,170                                              501,170 
               -------------------------------------------  -------------------------------------------  --------------------------------------------------- 
Cash and 
 cash 
 equivalents 
 at end of 
 period                                            278,235                                      452,866                                              399,446 
                                               ===========                                  ===========                                          =========== 
 
 

All cashflows are from continuing operations.

SOVEREIGN MINES OF AFRICA PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 June 2017

 
                        Share       Share   Reconstruction      Retained   Share-based       Total 
                             capital     premium          reserve      earnings       payment 
                                                                                      reserve 
                     GBP               GBP              GBP           GBP           GBP         GBP 
                                             At 1 January 
     2016            3,163,589   5,563,520        (586,100)   (8,277,587)       600,305     463,727 
 
                                                Loss and 
                                                 total 
                                             comprehensive 
                                               income for 
                                               six months 
                                                ended 30 
     June 2016               -           -                -      (43,795)             -    (43,795) 
                                              Share-based 
                                                payment 
     expense                 -           -                -             -         5,803       5,803 
                      ________    ________         ________      ________       _______    ________ 
                                              At 30 June 
     2016            3,163,589   5,563,520        (586,100)   (8,321,382)       606,108     425,735 
 
                                                Loss and 
                                                 total 
                                             comprehensive 
                                               income for 
                                               six months 
                                                ended 31 
                                                December 
     2016                    -           -                -     (157,752)             -   (157,752) 
                                              Share-based 
                                                payment 
     expense                 -           -                -             -        84,018      84,018 
                      ________    ________         ________      ________      ________    ________ 
                                            At 31 December 
     2016            3,163,589   5,563,520        (586,100)   (8,479,134)       690,126     352,001 
 
                                                 Total 
                                             comprehensive 
                                               income for 
                                               six months 
                                                ended 30 
     June 2017               -           -                -       705,601             -     705,601 
 
                                              Share-based 
                                                payment 
     expense                 -           -                -             -         5,971       5,971 
                      ________    ________         ________      ________       _______    ________ 
                                              At 30 June 
     2017            3,163,589   5,563,520        (586,100)   (7,773,533)       696,097   1,063,573 
                       =======    ========         ========       =======       =======    ======== 
 

SOVEREIGN MINES OF AFRICA PLC

Notes to the interim consolidated financial information

Six months ended 30 June 2017

   1.    GENERAL 

These unaudited consolidated interim financial statements are for the six months ended 30 June 2017. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2016, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU"). A number of new standards, amendments to existing standards and interpretations were effective from 1 January 2017. The adoption of these amendments did not have an impact on the interim financial statements for the six months ended 30 June 2017.

The consolidated interim financial statements have been prepared under the historical cost convention except for certain fair value adjustments required by certain standards. These statements do not constitute statutory accounts under s434 of the Companies Act 2006 (the "Act").

The statutory accounts for the year ended 31 December 2016 have been filed with the Registrar of Companies. Those accounts have received an unqualified audit report and did not contain statements or matters to which the auditors drew attention under the Act.

The Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, these interim financial statements have been prepared on a going concern basis as the Directors are of the opinion that the Company has sufficient funds to meet their ongoing working capital and committed capital expenditure requirements

The interim financial information is unaudited. The Company's operations are not subject to seasonality or cyclicality. No dividend has been declared or paid in this interim period.

   2.    ACCOUNTING POLICIES 

The principal accounting policies and methods of computation have remained unchanged from those used in the preparation of the 2016 annual financial statements and are expected to be used for the 31 December 2017 annual financial statements.

SOVEREIGN MINES OF AFRICA PLC

Notes to the interim consolidated financial information

Six months ended 30 June 2017

   3.    CASH FLOWS FROM OPERATING ACTIVITIES 
 
                                          Six months           Six months            Year ended 
                                                  to                   to 
                                             30 June              30 June           31 December 
                                                2017                 2016                  2016 
                                           Unaudited            Unaudited               Audited 
                                                 GBP                  GBP                   GBP 
Loss before taxation from 
 continuing operations                      (95,433)             (43,795)             (201,547) 
Adjustments for: 
Finance income                                     -              (1,181)                     - 
Share-based payment expense                    5,971                5,803                89,821 
                                 -------------------  -------------------  -------------------- 
                                            (89,462)             (39,173)             (111,726) 
 
Increase in receivables                      (9,214)                    -               (2,438) 
(Decrease)/increase in 
 payables                                   (22,535)             (10,312)                12,440 
                                    ----------------     ----------------      ---------------- 
Net cashflow used in operating 
 activities                                (121,211)             (49,485)             (101,724) 
                                       =============        =============         ============= 
 

All cashflows are from continuing operations.

   4.       DISCONTINUED OPERATION 

On 20 January 2017, the Company sold its 75% interest in the Mandiana Gold Project ("Mandiana") in Republic of Guinea, West Africa to Volcanic Gold Mines Inc. ('Volcanic'), a Canadian publicly listed mining company. In consideration for the sale, the Company received 2,502,489 common shares in Volcanic representing 9.9% of the outstanding share capital of Volcanic at the time of transaction. The gain on disposal is presented in this interim report as a discontinued operation. At 31 December 2016, the intangible asset was classified as held for sale.

The gain on disposal of GBP656,140 is calculated is the difference between the fair value of the consideration and the book value at the date of disposal.

The fair value (the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction) of the Volcanic shares on 20 January was GBP656,140 (2,502,489 at CAD$ 0.43 per share translated at the exchange rate on the day of CAD$/GBP 1.64). The book value of the asset was nil as a result of it being fully written down in 2015.

The shares in Volcanic have been classified as an 'Available for Sale' financial asset in accordance with IAS 39 'Financial Instruments: recognition and measurement'. On initial recognition, the asset is recognised at fair value. The shares are revalued at each balance sheet date with movements being recognised through Other Comprehensive Income.

SOVEREIGN MINES OF AFRICA PLC

Notes to the interim consolidated financial information

Six months ended 30 June 2017

   5.       LOSS/EARNINGS PER SHARE 
 
                                        Six months              Six months                 Year ended 
                                                to                      to 
                                           30 June                 30 June                31 December 
                                              2017                    2016                       2016 
                                         Unaudited               Unaudited                    Audited 
 
 
Weighted average number 
 of ordinary shares in 
 issue                                 860,858,955             860,858,859                860,858,955 
                                   ===============  ======================        =================== 
 
Profit/(loss) after 
 taxation (GBP) 
 From continuing operations               (95,433)                (43,795)                  (201,547) 
 From discontinued 
  operations                               656,140                       -                          - 
                               -------------------  ----------------------  ------------------------- 
                                           560,707                (43,795)                  (201,547) 
                                   ===============  ======================        =================== 
Earnings/(loss) per share from continuing 
 and discontinued operations attributable 
 to equity holders of the parent during 
 the period: 
 
Basic earnings/(loss) 
 Per Share (pence) 
 From continuing operations                (0.011)                 (0.005)                     (0.02) 
 From discontinued 
  operations                                 0.076                       -                          - 
                               -------------------  ----------------------        ------------------- 
                                             0.065                 (0.005)                     (0.02) 
                                     =============     ===================        =================== 
 

Due to there being a loss during the period from continuing operations, the share options and warrants are anti-dilutive and therefore the diluted earnings/(loss) per share is the same as the basic earnings/(loss) per share.

   6.            SHARE CAPITAL 

Issued and fully paid:

 
                                    2017                    2016             2017            2016 
                                   No. of               No. of shares        GBP             GBP 
                                   shares 
 
       Ordinary shares of 
        GBP0.0001 each              860,859,050           860,859,050       3,163,589        3,163,589 
                             ==================    ==================   =============   ============== 
 

SOVEREIGN MINES OF AFRICA PLC

Notes to the interim consolidated financial information

Six months ended 30 June 2017

   7.    POST BALANCE SHEET EVENTS 

Post year end the Company has sold a total of 1,533,989 of its shares in Volcanic. The average share price for the sales is CAD$0.43, resulting in a total consideration, net of commission of GBP402,640.

A Memorandum of Understanding was signed on 28 September 2017 with an Indian business to acquire its specialist eyewear manufacturing company.

   8.    COPIES OF INTERIM REPORT 

Copies of the interim report are available to the public from the Company at Lakeside Fountain Lane, St Mellons, Cardiff, United Kingdom, CF3 0FB during normal office hours, Saturdays and Sundays excepted, for 14 days from today and are available on the website at www.sovmines.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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