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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tethyan Res | LSE:TETH | London | Ordinary Share | GB00BYVFRB16 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.00 | 2.50 | 3.50 | 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
TIDMTETH
RNS Number : 9808G
Tethyan Resources PLC
02 June 2017
Tethyan Resources plc
('Tethyan' or the 'Company')
Final Results
The Company is pleased to announce its final results for the 9 month period ended 31 December 2016.
Chairman's Statement
During 2016, the Company built on the strategic decision taken at the end of 2015 to focus on gold and base metal exploration in the Balkans Region of south east Europe, which is geologically part of the Western Tethyan Metallogenic Belt. The Company changed its name from Aurasian Minerals plc to Tethyan Resources plc to reflect this new regional focus.
The Western Tethyan Metallogenic Belt is an orogenic belt formed by closure of the Tethys palaeo-ocean and the subsequent collision of the African and Eurasian tectonic plates over the last 120 million years. This belt extends from Pakistan in the east through Iran, Turkey, Bulgaria and the Balkans into Romania and Central Europe. It is one of the great mineral belts of the world, being prospective for porphyry copper and epithermal gold deposits as well as numerous other styles of mineralisation. This belt contains a number of world class mines, and it is relatively under-explored especially in comparison with the similar magmatic belts and metallogenic provinces of North and South America.
Tethyan's country focus has been Serbia and in May 2016 the Company acquired a Jersey-based private company, Moroccan Minerals, which held an option over a polymetallic project, the Cadinje project, located in Western Serbia. In conjunction with the acquisition of Moroccan Minerals, Didier Fohlen, Chairman of Moroccan Minerals, became a non-executive director of the Company in May 2016 and was appointed an executive director in October 2016.
In mid-year, Tethyan drill tested the Cadinje project, but the results were not encouraging and local community issues proved challenging. The Company therefore decided to withdraw from this project.
During the year Tethyan acquired options over two new projects in Serbia, Suva Ruda and Gokcanica, which the company believes have considerable potential for porphyry copper-gold and epithermal gold styles of mineralisation. The first round of drilling at the priority target in the Suva Ruda licence, the Rudnitza Porphyry system, commenced in late 2016 with encouraging results. Exploration field work also commenced on Gokcanica.
Tethyan plans to advance both the Suva Ruda and Gokcanica projects during the remainder of 2017. The work will include drilling, deep penetration IP geophysics, geochemical sampling and geological mapping. Ideally, the Rudnitza porphyry system will be advanced to an initial resource estimate and Gokcanica to a decision on drilling.
Tethyan sees strong potential for additional acquisitions in the Balkans region and continues to identify and evaluate other opportunities.
Corporately, Tethyan was very active during the year.
The following steps were taken, following shareholder approval at the AGM in July 2016:
The Company changed its name to Tethyan Resources plc. The Company consolidated its stock on a 1 for 6 basis to reduce the number of shares in issue to a more manageable number and to raise the share price further above its par value. Since then, following encouraging results from Tethyan's exploration programme, the Company's share price has traded at around or above the price at the date of consolidation.
During the year, the Company completed the three financings listed below and brought on board a major shareholder and strategic partner, Southern Arc Minerals Inc, a Canadian junior exploration company listed on the Toronto Venture stock exchange (TSX-V).
April 2016: issued 43,000,000 shares at 0.38 pence, pre-consolidation, for GBP 163,400
November 2016: issued 16,500,000 shares at 2.18 pence, post consolidation, to Southern Arc Minerals in a non-brokered placement for GBP 360,000.
December 2016: issued 39,100,000 shares at 2.18 pence in a brokered placement for GBP 852,380.
Subsequent to the period end, in March 2017, the Company raised a further GBP1million at 4.5 pence a share.
During November 2016 Southern Arc Minerals Inc. agreed to make a strategic investment of up to 29.9 % of Tethyan's issued share capital. Southern Arc subsequently bought Newmont's block of 14,653,966 shares and participated in two of the three financings completed in 2016. At the end of 2016 Southern Arc owned 43,653,966 shares in Tethyan Resources, or approximately 29.9 % of the Company's issued share capital. As part of this transaction two Southern Arc directors were appointed to the Tethyan Board, John Proust and Dr Mike Andrews.
In addition, it was agreed that Southern Arc would:
- have a first right of refusal on any further fundraisings undertaken by the Company for a period of 2 years to enable it to increase its holding to and maintain its interest at 29.9% of the issued share capital of the Company; and
- use its commercially reasonable efforts to seek a listing on the TSX Venture Exchange in as soon as reasonably practicable following completion of the Southern Arc Subscription.
As of 31 December 2016, Tethyan Resources had 145,959,829 shares outstanding and was trading at approximately 2.25 pence, representing a market capitalisation of GBP 3.28 million. Subsequent to the period end, following the announcement of the results from the drilling at Rudnitza, the share price moved above 4 pence.
Tethyan plans to list its shares on the Toronto Venture exchange and it will then be dual listed on AIM and the TSX-V. This is to allow Tethyan access to North American capital markets and increase share trading liquidity.
Tim Coughlin resigned from the board of directors during 2016. The board would like to thank Tim for helping the Company during a challenging transition phase.
Over the last year, the risk appetite of investors for early stage exploration projects has improved. It is hoped this improvement will continue into 2017 to allow Tethyan to remain well-financed and to achieve its goals of acquiring and advancing quality exploration projects to increase the Company's value for shareholders.
Your board will continue to manage expenditure to maintain a secure cash balance. Tethyan ended 2016 with approximately GBP1 million in the bank. The involvement of Southern Arc, who have already made two substantial investments, increases our confidence that we will be able to advance our exploration programme as planned while maintaining a robust financial position.
Christopher Goss
Non-Executive Chairman
The Company's Annual General Meeting, notice of which has been posted to shareholders, will be held at the offices of Gowling WLG (UK) LLP, 4 More London Riverside, London, SE1 2AU on 26 June 2017 at 11:00am.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information please contact:
Tethyan Resources Plc Peter Mullens, Chief Executive +44 1534 881 885 Cairn Financial Advisers LLP James Caithie +44 (0)20 7213 0880 Sandy Jamieson
Consolidated income statement
For the 9 months ended 31 December 2016
Hot Features
Premium
Year ended
9 months ended 31 December 2016 31 March 2016
GBP'000 GBP'000
----------------------------------------------------------------- ------------------------------- --------------
Continuing operations
Revenue - -
Cost of sales - -
----------------------------------------------------------------- ------------------------------- --------------
Gross profit - -
Operating expenses (710) (441)
Impairment of related party receivables (192) -
Loss on asset acquisition (317) -
Share-based payments (76) (29)
------------------------------------------------------------------ ------------------------------- --------------
Operating loss (1,295) (470)
------------------------------------------------------------------ ------------------------------- --------------
Net finance (costs)/income (1) 5
------------------------------------------------------------------ ------------------------------- --------------
Loss before taxation (1,296) (465)
Income tax expense - -
----------------------------------------------------------------- ------------------------------- --------------
Loss for the period from continuing operations (1,296) (465)
------------------------------------------------------------------ ------------------------------- --------------
Loss for the period attributable to equity holders of the parent (1,296) (465)
------------------------------------------------------------------ ------------------------------- --------------
Loss per share
Basic and diluted loss per share (pence) (1.38)p (0.67)p ------------------------------------------------------------------ ------------------------------- --------------
Consolidated statement of comprehensive income
For the 9 months ended 31 December 2016
Year ended
9 months ended 31 December 2016 31 March 2016
GBP'000 GBP'000
--------------------------------------------------------------------- ------------------------------- --------------
Loss for the period (1,296) (465)
Other comprehensive income:
Exchange differences on translating foreign operations (6) -
--------------------------------------------------------------------- ------------------------------- --------------
Total comprehensive loss for the period attributable to equity
holders of the parent (1,302) (465)
--------------------------------------------------------------------- ------------------------------- --------------
Consolidated balance sheet
As at 31 December 2016
31 December 2016 31 March 2016
GBP'000 GBP'000
-------------------------------------------- ---------------- -------------
Assets
Non-current assets
Amounts receivable from related parties 348 -
Exploration and evaluation assets - -
-------------------------------------------- ---------------- -------------
348 -
-------------------------------------------- ---------------- -------------
Current assets
Trade and other receivables 338 6
Cash and cash equivalents 985 1,024
--------------------------------------------- ---------------- -------------
1,323 1,030
-------------------------------------------- ---------------- -------------
Total Assets 1,671 1,030
--------------------------------------------- ---------------- -------------
Equity attributable to owners of the parent
Share capital 3,910 3,735
Share premium 26,881 25,431
Share-based payment reserve 812 736
Currency translation reserve (6) -
Own shares held reserve (71) (71)
Retained losses (30,163) (28,867)
--------------------------------------------- ---------------- -------------
Total Equity 1,363 964
--------------------------------------------- ---------------- -------------
Liabilities
Current liabilities
Trade and other payables 308 66
--------------------------------------------- ---------------- -------------
Total Liabilities 308 66
--------------------------------------------- ---------------- -------------
Total Equity and Liabilities 1,671 1,030
--------------------------------------------- ---------------- -------------
Consolidated statement of cash flows
For the 9 months ended 31 December 2016
Year ended
9 months ended 31 December 2016 31 March 2016
GBP'000 GBP'000
----------------------------------------------------- ------------------------------- --------------
Cash flows from operating activities
Loss after tax (1,296) (465)
Share-based payments 76 29
Impairment of assets 458 -
Interest received (2) (3)
------------------------------------------------------ ------------------------------- --------------
Operating loss before changes in working capital (764) (439)
Increase in trade and other receivables (70) (19)
Increase in trade and other payables 237 21
------------------------------------------------------ ------------------------------- --------------
Net cash used in operating activities (597) (437)
------------------------------------------------------ ------------------------------- --------------
Investing activities
Proceeds from disposal of investment - 505
Loans to related parties (540)
Interest received 2 3
------------------------------------------------------ ------------------------------- --------------
Net cash (used in)/from investing activities (538) 508
------------------------------------------------------ ------------------------------- --------------
Financing activities
Cash proceeds from share issues 1,096 208
------------------------------------------------------ ------------------------------- --------------
Net cash from financing activities 1,096 208
------------------------------------------------------ ------------------------------- --------------
Net (decrease)/increase in cash and cash equivalents (39) 279
Cash and cash equivalents at beginning of period 1,024 745
------------------------------------------------------ ------------------------------- --------------
Cash and cash equivalents at end of period 985 1,024
------------------------------------------------------ ------------------------------- --------------
Consolidated statement of changes in equity
For the 9 months ended 31 December 2016
Share Own
based shares Currency
Share Share payment held translation Retained Total
capital premium reserve reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
At 1 April 2015 3,687 25,271 707 (50) 748 (29,150) 1,213
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
Total comprehensive income for the year - - - - - (465) (465)
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
Transfer from currency translation reserve - - - - (748) 748 -
Transactions with shareholders:
Shares held by EBT - - - (21) - - (21)
Share-based payments - - 29 - - - 29
New share issues 48 160 - - - - 208
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
At 31 March 2016 3,735 25,431 736 (71) - (28,867) 964
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
Total comprehensive income for the period - - - - (6) (1,296) (1,302)
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
Transactions with shareholders:
Shares held by EBT - - - - - - -
Share-based payments - - 76 - - - 76
New share issues 175 1,450 - - - - 1,625
------------------------------------------- ------- ------- ------- ------- ----------- -------- -------
At 31 December 2016 3,910 26,881 812 (71) (6) (30,163) 1,363 ------------------------------------------- ------- ------- ------- ------- ----------- -------- ------- 1 Reporting entity
Tethyan Resources plc (the "Company") is a public limited company incorporated and domiciled in England and its shares are traded on the AIM Market of London Stock Exchange plc. The address of the Company's registered office is 27/28 Eastcastle Street London W1W 8DH. The consolidated financial statements of the Company as at and for the period ended 31 December 2016 comprise the Company and its subsidiaries (together referred to as the 'Group' and individually as 'Group entities').
2 Going concern
The Group had cash balances of approximately GBP1.0 million as at 31st December 2016 with total liabilities at that date of GBP309,000. At 30 May 2017 the Group had cash balances of approximately GBP1.25 million with total liabilities at that date of GBP100,000.
The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.
The activities in the period and future prospects of the Group are discussed in the Chairman's Statement and Strategic Report. The Group has not yet earned revenue as it is still in the exploration phase of its business.
On 28 March 2017, Tethyan Resources plc announced an issue of 22,222,223 new ordinary shares at a subscription price of 4.5p per ordinary share, raising GBP1,000,000 from a combination of new and existing strategic shareholders and management. The proceeds will be used towards a 6,000 metre drilling programme at the Company's Suva Ruda project in addition to working capital requirements.
The Board has reviewed current cash balances and projected expenditure during the next 12 months, within the Group, and is confident that all liabilities can be met. As part of the ongoing development of the company in the event that new projects are identified careful consideration will be made as to their viability and, if deemed to fit in with the company aims, additional funding will be sought at that time.
The Directors have reviewed the Group's overall position and confirm that there is adequate working capital in the business to meet its liabilities for the next twelve months and beyond. Accordingly, the Directors believe that the use of the going concern basis is appropriate.
3 Basis of preparation a) Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The Company's individual statement of comprehensive income has not been presented in the Group's annual financial statements as the Company has taken advantage of the exemption not to disclose under Section 408(3) of the Companies Act 2006. The Company's comprehensive loss for the period ended 31st December 2016 was GBP948,000 (31 March 2016: GBP465,000) and is included in the consolidated statement of comprehensive income.
b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis and as a going concern.
c) Functional and presentation currency
These consolidated financial statements are presented in GBP Sterling, which is the Company's functional currency. All information presented in GBP Sterling has been rounded to the nearest thousand, except when otherwise indicated.
d) Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about critical judgements, estimates and assumptions in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are disclosed below.
-- The carrying values of balances due from subsidiaries and EBT in the Parent Company's balance sheet (note 14). The Directors consider that although the balances are recoverable in full they are not repayable on demand and so are regarded as long term in nature (i.e. due in more than one year).
-- The share options and JSOP shares have been valued using a simulation model and binomial model respectively. These models require assumptions around interest rates and share price movements, further details can be found in note 24 to these financial statements.
4 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.
a) Basis of consolidation
i) Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is recognised where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies into line with those used by the Group.
Investments in subsidiaries are included at cost less impairment in the financial statements of the parent Company.
ii) Transactions eliminated on consolidation
Intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions are eliminated in preparing the consolidated financial statements.
iii) Business combinations
For business combinations, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair value at the date of acquisition.
Any excess of the fair value of the consideration over the fair values of the identifiable net assets acquired is recognised as goodwill, which is subsequently tested for impairment rather than amortised. If the cost of the acquisition is less than the fair value of net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
b) Foreign currency
i) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Sterling at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.
Non-monetary assets carried at fair value and denominated in foreign currency are translated at the rate prevailing when the fair value was determined.
ii) Financial statements of foreign operations
On consolidation, the assets and liabilities of the Group's overseas operations that do not have a Sterling functional currency are translated at exchange rates prevailing at the balance sheet date. Income and expense items are translated at the dates of the transactions. Exchange differences arising are recognised in other comprehensive income and the Group's translation reserve. Such translation differences are reclassified to profit and loss in the period in which the operation is disposed of.
c) Intangible assets - Deferred exploration and evaluation costs
Exploration and evaluation (E&E) expenditure costs comprise costs associated with the acquisition of mineral rights and mineral exploration, including those incurred through joint operations, and are capitalised as intangible assets pending determination of the technical and commercial feasibility of the project. They also include certain administrative costs that are allocated to the extent that those costs can be related directly to operational activities.
If an exploration project is deemed successful based on feasibility studies, the related expenditures are transferred to development and production (D&P) assets and amortised over the estimated life of the ore reserves on a unit of production basis. Where a project is abandoned or considered to be no longer economically viable, the related costs are written off in the income statement.
To date the Group has not progressed to the development and production stage in any areas of operation.
d) Impairment testing of intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash- generating unit level.
Intangible assets with an indefinite useful life and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or cash- generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the assets or cash-generating unit's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
e) Financial instruments
i) Trade and other receivables
Trade and other receivables are not interest bearing and are recognised initially at their fair value plus transaction costs and subsequently at amortised cost. Provision is made if there is any objective evidence of impairment.
ii) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.
iii) Trade and other payables
Trade and other payables are not interest bearing and are recognised initially at their fair value less transaction costs and subsequently at amortised cost. Provision is made if there is objective evidence of impairment.
f) Share-based payments
The Group has applied the requirements of IFRS 2 'Share-based payments'. Directors, senior executives and consultants of the Group have been granted options to subscribe for ordinary shares. All options are equity settled.
The fair value of services received in return for share options granted is measured by reference to the fair value of the share options granted, at date of grant, and this is expensed on a straight line basis over the estimated vesting period with a corresponding credit in equity. The estimated fair value is determined using an appropriate valuation model considering the effects of the vesting conditions, expected exercise period and the payment of dividends by the Company.
If the share options lapse before being exercised a related portion of the share-based payment reserve is transferred to retained earnings. On cancellation any cost not yet recognised is expensed immediately in the profit and loss.
g) Operating lease payments
Operating lease payments are charged to the income statement on a straight line basis over the lease term. Lease incentives are spread over the term of the lease.
h) Share capital
The Company's ordinary shares are classified as equity. Costs directly attributable to the increase of new shares are shown in equity as a deduction from the proceeds.
i) Taxation
The charge for taxation is based on the profit or loss for the period and takes into account deferred tax. Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss, and is accounted for using the balance sheet method.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available in the foreseeable future against which the temporary differences can be utilised.
j) Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker.
The Chief Operating Decision Maker, responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.
5 New IFRS Standards and Interpretations not yet adopted
At the date of approval of these financial statements, the following IFRS Standards and Interpretations, which have not been applied in these financial statements, were in issue but not yet effective. These new Standards, Amendments and Interpretations are effective for accounting periods beginning on or after the dates shown below:
Standard Description Date -------- ------------------------------------- -------------- IFRS 9 Financial Instruments 1 January 2018 IFRS 15 Revenue from contracts with customers 1 January 2018 IFRS 16 Leases 1 January 2019 6 Segmental information
The following information is given about the Group's reportable segments for continuing operations.
The Chief Operating Decision Maker is the Board of Directors. The Board reviews the Group's internal reporting in order to assess performance of the business. Management has determined the operating segment based on the reports reviewed by the Board.
Although the board review the various exploration activities individually it considers the business has a single operating segment (as its knowledge and services are applied to a broad geographical spread of exploration interests). This incorporates the activities and services of the Head Office and the development and management of joint operations.
Head Office and
Exploration
Period to 31 December 2016 31st March 2016
GBP'000 GBP'000
-------------------------- -------------------------- ---------------
External segment revenues - -
Internal segment revenues - -
-------------------------- -------------------------- ---------------
Total segment revenues - -
-------------------------- -------------------------- ---------------
EBITDA (789) (470)
Interest revenue 2 5
Impairments of assets (509) -
Loss for the period (1,296) (465)
-------------------------- -------------------------- ---------------
Reconciliations
(i) Group revenues
31st December 2016 31st March 2016
GBP'000 GBP'000
------------------------------------- ------------------ ---------------
Total revenues for reportable segment - -
------------------------------------- ------------------ ---------------
Group's revenues - -
------------------------------------- ------------------ ---------------
(ii) Group loss before tax
2016 2015
GBP'000 GBP'000
--------------------------------------------------- ------- -------
Loss before tax for trading segment (1,296) (465)
--------------------------------------------------- ------- -------
Group's loss from continuing operations before tax (1,296) (465)
--------------------------------------------------- ------- -------
(iii) Group assets
31st December 2016 31st March 2016
GBP'000 GBP'000
--------------------------------- ------------------- ---------------
Amounts due from related parties 348 -
Group other receivables 338 6
Group cash and cash equivalents 985 1,024
--------------------------------- ------------------- ---------------
Group total assets 1,671 1,030
--------------------------------- ------------------- ---------------
(iv) Group liabilities
31st December 2016 31st March 2016
GBP'000 GBP'000
------------------------ ------------------- ---------------
Group other liabilities 308 66
------------------------ ------------------- ---------------
Group total liabilities 308 66
------------------------ ------------------- ---------------
7 Operating loss
31st December 2016 31st March 2016
GBP'000 GBP'000
------------------------------------------------------------------ ------------------- ---------------
Operating loss on continuing operations is stated after charging:
Employee and directors' benefit expense 115 169
------------------------------------------------------------------ ------------------- ---------------
8 Auditors' remuneration
31st December 2016 31st March 2016
GBP'000 GBP'000
-------------------------------------------------------------------------------- ------------------- ---------------
Fees payable to the Group auditors for the audit of the Group's annual financial
statements 20 15
Fees payable to the Group's auditor and its associates for other services:
Tax services 4 -
-------------------------------------------------------------------------------- ------------------- ---------------
24 15
-------------------------------------------------------------------------------- ------------------- ---------------
Auditors' remuneration in respect of the Company amounted to GBP24,000 (31 March 2016: GBP15,000).
9 Directors' remuneration
Directors' remuneration is set out below:
9 months to 31 December 2016 Year ended 31st March 2016 31st December 2016 31st March 2016
Salaries Share based Salaries & Share based
& Fees payments Fees payments Total Total
GBP'000 GBP'000 GBP'000 GBP000's GBP'000 GBP'000
-------------- ------------ ---------------- ------------- ------------- ------------------- ---------------
P Mullens 67 5 58 - 72 58
G Kantarcigil - 5 6 - 5 6
C Goss 14 5 22 3 19 22
S Bullock - - 5 - - 5
B Kay - - 10 - - 10
T Coughlin - - - 14
D Fohlen 18 5 14 - 23 -
-------------- ------------ ---------------- ------------- ------------- ------------------- ---------------
115 - 102 3 115 105
-------------- ------------ ---------------- ------------- ------------- ------------------- ---------------
Details of options and shares held under the JSOP are given in note 24.
10 Employees and Key Management
(a) Staff numbers
31st December 2016 31st March 2016
No. No.
-------------------------------------------------------------------------------- ------------------- ---------------
The average number of staff (excluding Non-Executive Directors) employed
throughout the period
was 4 1
-------------------------------------------------------------------------------- ------------------- ---------------
(b) Staff costs
GBP'000 GBP'000
---------------------- ------- -------
Salaries and benefits 115 169
Social Security costs 4 -
---------------------- ------- -------
119 169
---------------------- ------- -------
Staff costs consist of remuneration for the Board of Directors and further key management personnel who have the authority and responsibility for planning, directing and controlling the activities of the Group.
11 Finance income and finance costs
Recognised in profit or loss
31st December 2016 31st March 2016
GBP'000 GBP'000
-------------------------------------------------------- ------------------- ---------------
Interest on short term bank deposits 2 3
-------------------------------------------------------- ------------------- ---------------
Net foreign exchange (losses)/gains (3) 2
-------------------------------------------------------- ------------------- ---------------
Net finance (costs)/income recognised in profit or loss (1) 5
-------------------------------------------------------- ------------------- ---------------
12 Income taxes
No liability to income tax arises in the period.
The current tax charge for the period differs from that resulting from the loss before tax at the standard rate of corporation tax in the UK. The differences are explained below:
31st December 2016 31st March 2016
GBP'000 GBP'000
-------------------------------------------- ------------------- ---------------
Loss before tax (1,296) (465)
-------------------------------------------- ------------------- ---------------
Current tax at 20% (2016: 20%) (259) (93)
Effects of:
Expenses not deductible for tax purposes - 1
Unrelieved tax losses arising in the period 259 92
Income tax expense - -
-------------------------------------------- ------------------- ---------------
Temporary differences for which no deferred tax assets have been recognised
31st December 2016 31st March 2016
GBP'000 GBP'000
----------------------------------------------------- ------------------- ---------------
Cumulative tax losses (6,551) (5,858)
----------------------------------------------------- ------------------- ---------------
Corporation tax at 20% (2016: 20%) 1,311 1,172
Accelerated capital allowances - -
----------------------------------------------------- ------------------- ---------------
Unrecognised deferred tax asset at end of the period 1,311 1,172
----------------------------------------------------- ------------------- ---------------
Unrecognised deferred tax assets reflect only those of the United Kingdom based parent Company. No deferred tax asset has been recognised in respect of taxable overseas subsidiaries due to the relatively unsettled legal and tax codes of the countries in which they operate.
Deferred tax assets carried forward have not been recognised in these financial statements because there is insufficient evidence of the timing of suitable future taxable profits against which they can be recovered.
13 Loss per share
Basic loss per share
The calculation of basic loss per share for the period ended 31 December 2016 was based on the loss attributable to ordinary shareholders of GBP1,296,000 (2016: loss GBP465,000) and the weighted average number of ordinary shares in issue of 93,814,890 (31 March 2016: 69,384,745 adjusted for comparison), giving a basic loss per share of (1.38)p for the 9 months to 31 December 2016 and a basic loss per share of (0.67)p for the year ended 31 March 2016, calculated as follows:
Loss attributable to ordinary shareholder (basic)
31st December 2016 31st March 2016
Total Total
GBP'000 GBP'000
----------------------------------------------------------- ------------------- ---------------
Loss for the period, attributable to owners of the Company (1,296) (465)
----------------------------------------------------------- ------------------- ---------------
Weighted average number of ordinary shares (basic)
31st December 2016 31st March 2016
----------------------------------------------- ------------------ ----------------
Issued ordinary shares at 1 April 416,308,470 368,716,729
Shares issued in year pre-share division 118,850,508 47,591,741
----------------------------------------------- ------------------ ----------------
535,158,978 416,308,470
----------------------------------------------- ------------------ ----------------
Sub-division of ordinary shares on a 6:1 basis 89,193,163 -
Shares issued post sub-division 56,766,666 -
Issued ordinary shares at period end 145,959,829 416,308,470
----------------------------------------------- ------------------ ----------------
Diluted loss per share
There is no difference between the diluted loss per share and the basic loss per share presented. Share options granted to employees could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted earnings per share as they are anti-dilutive for the period presented.
The diluted weighted average number of shares in issue and to be issued is 145,959,829.
14 Non-current trade and other receivables
Group Company
31st December 2016 31st March 2016 31st December 2016 31st March 2016
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ ------------------ --------------- ------------------ ---------------
Due from Employee Benefit Trust (note 27) - - 71 71
------------------------------------------ ------------------ --------------- ------------------ ---------------
- - 71 71
------------------------------------------ ------------------ --------------- ------------------ ---------------
15 Exploration and evaluation assets held
Group Company
31st December 2016 31st March 2016 31st December 2016 31st March 2016
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------------------ --------------- ------------------ ---------------
At beginning of year - 505 - -
Disposals in the year - (505) - -
At end of year - - - -
---------------------- ------------------ --------------- ------------------ ---------------
16 Investment in subsidiaries
Tethyan Resources Jersey Ltd Acquisition
In May 2016 the Company acquired the entire issued share capital of Tethyan Resources Jersey Ltd (formerly Moroccan Minerals Ltd). The acquisition constitutes an asset acquisition as Tethyan Resources Jersey Ltd, at the time of the acquisition, did not meet the definition of a business, as defined in IFRS 3 'Business Combinations'. The Company acquired all of the issued and outstanding common shares of Tethyan Resources Jersey Ltd, being 17,974,054 shares, by issuing 75,850,508 shares of the Company in a 4.22 to 1 ratio. In addition 105,560 warrants were issued with a strike price of 0.348 p per share.
As the acquisition was deemed to be for an asset acquisition and not a business combination, the excess of the consideration over the net assets or liabilities acquired is expensed to the income statement and is not treated as goodwill arising on the acquisition. The 'loss on asset acquisition' expensed in the income statement is arrived at as follows:
Fair value of net assets of Tethyan Resources Jersey Ltd at acquisition date:
Plant & equipment 4,792 Bank 37,215 Prepaid expenses 11,787 Amounts due from related parties 85,727 Accounts payable (55,330) Amounts due to company (135,340)
------------
Net liabilities at acquisition (51,149)
Consideration for acquisition:
75,850,508 shares at 0.35p per share 265,477 (non-cash consideration) Loss on asset acquisition 316,626
Company's subsidiary undertakings
As at 31 December 2016, the Group owned interests in the following subsidiary undertakings, which are included in the consolidated financial statements:
Country of Class of Portion held Portion held by
Company Principal activity incorporation share held by the Group Parent Company
----------------------------- --------------------- ------------------ ----------- ------------ ---------------
Tethyan Resources Jersey Ltd Mineral Exploration Jersey (UK) Ordinary 100% 100%
Terenure Limited Mineral Exploration Papua New Guinea Ordinary 100% 100%
----------------------------- --------------------- ------------------ ----------- ------------ ---------------
17 Amounts receivable from subsidiary and related parties
Group Company
31st December 2016 31 March 2016 31st December 2016 31 March 2016
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------------- ------------- ------------------- -------------
Amounts due from Tethyan Resources Jersey Ltd - - 723 -
Amounts due from related parties 348 - - -
---------------------------------------------- ------------------- ------------- ------------------- -------------
348 - 723 -
---------------------------------------------- ------------------- ------------- ------------------- -------------
The amounts due from related parties are due from Global Mineral Resources d.o.o, and Tethyan Resources Serbia d.o.o, companies incorporated in Serbia which were incorporated under the ownership of F Baker, COO of the Company. These two companies became subsidiaries of the group subsequent to the period end (note 28). Both the amounts due from subsidiaries and related parties shown above are net of impairment charges of GBP192,000 against amounts not deemed to be recoverable in connection with funds spent on the unsuccessful Cadinje project.
18 Current trade and other receivables
Group Company
31st December 2016 31 March 2016 31st December 2016 31 March 2016
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------------- ------------- ------------------- -------------
Other taxes and social security 6 5 6 5
Unpaid share capital 263 - 263 -
Prepayments and accrued income 69 1 49 1
-------------------------------- ------------------- ------------- ------------------- -------------
338 6 318 6
-------------------------------- ------------------- ------------- ------------------- -------------
The unpaid share capital arose from a share issue near the period end and was received subsequent to the end of the period. The cash proceeds for share issues of GBP1,096,000 in the statements of cash flows therefore excludes the GBP263,000 unpaid share capital and also excludes shares issued as consideration (GBP266,000) for the acquisition of Tethyan Resources Jersey Ltd in the period.
19 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and short term fixed deposits. Cash and cash equivalents comprise the following:
Group Company
31st December 2016 31 March 2016 31st December 2016 31 March 2016
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ------------------ ------------- ------------------ -------------
Cash on hand and demand deposits 985 1,024 939 1,024
--------------------------------- ------------------ ------------- ------------------ -------------
20 Share capital
31st December 2016 31 March 2016
Number GBP'000 Number GBP'000
----------------------------------- ------------------ ------- ------------- -------
Allotted, called up and fully paid
Ordinary shares of 0.1p each 145,959,829 146 416,308,470 417
Deferred A shares of 0.9p each 368,716,729 3,318 368,716,729 3,318
Deferred B shares of 0.5p each 89,193,163 446
----------------------------------- ------------------ ------- ------------- -------
3,910 3,735
----------------------------------- ------------------ ------- ------------- -------
In July 2016 the Company's ordinary shares were sub-divided on a 1 for 6 basis.
The Deferred Shares are not listed on any Stock Exchange, and have no rights to vote at any meeting of the Company. Nor do they have any rights to dividends, nor any other form of distribution other than a maximum of 0.9 pence per share on a return of capital on a winding up of the Company (provided the Company has sufficient cash after the holders of the New Ordinary Shares have been paid an aggregate amount of the paid up capital thereon being 0.1 pence plus GBP10,000,000 for each such Ordinary Share).
Details of share options issued during the period and outstanding at 31st December 2016 are set out in the Directors' Report.
Changes in issued share capital and share premium:
Number Nominal value Share premium Total
of shares GBP'000 GBP'000 GBP'000
----------------------------------------------------- ------------ ------------- ------------- -------
At 31st March 2012 - Ordinary shares of 1p each 366,916,729 3,669 25,255 28,924
----------------------------------------------------- ------------ ------------- ------------- -------
JSOP Shares issued at GBP0.019 each in July 2012 1,800,000 18 16 34
At 31st March 2013 - Ordinary shares of 1p each 368,716,729 3,687 25,271 28,958
----------------------------------------------------- ------------ ------------- ------------- -------
At 31st March 2014 - Ordinary shares of 1p each 368,716,729 3,687 25,271 28,958
----------------------------------------------------- ------------ ------------- ------------- -------
13th May 2014 Share Reorganisation
Ordinary shares of 0.1p each 368,716,729 369 2,527 2,896
Deferred shares of 0.9p each 368,716,729 3,318 22,744 26,062
----------------------------------------------------- ------------ ------------- ------------- -------
At 31st March 2015 - Ordinary shares of 0.1p each 368,716,729 3,687 25,271 28,958
----------------------------------------------------- ------------ ------------- ------------- -------
Shares issued at GBP0.043 each in July 2015 47,591,741 47 160 207
----------------------------------------------------- ------------ ------------- ------------- -------
At 31st March 2016 - Ordinary shares of 0.1p each 416,308,470 3,734 25,431 29,165
----------------------------------------------------- ------------ ------------- ------------- -------
Shares issued at GBP0.038 each in April 2016 30,000,000 30 84 114
Shares issued at GBP0.038 each in May 2016 13,000,000 13 37 50
Shares issued at GBP0.043 each in May 2016 75,850,508 76 190 266
----------------------------------------------------- ------------ ------------- ------------- -------
Total Pre Share Reorganisation on 20 July 2016 535,158,978 3,853 25,742 29,595
Ordinary A shares of 0.1p each 89,193,163 89 2,998 3,087
Ordinary B shares of 0.9p each 368,716,729 3,318 22,744 26,062
Ordinary B shares of 0.5p each 89,193,163 446 - 446
Shares issued at 0.1p each in August 2016 1,166,666 1 - 1
Shares issued at 0.1p each in November 2016 55,600,000 56 1,139 1,195
----------------------------------------------------- ------------ ------------- ------------- -------
At 31st December 2016 - Ordinary shares of 0.1p each 145,959,829 3,910 26,881 30,791
----------------------------------------------------- ------------ ------------- ------------- -------
Subsequent to the period end, on 28 March 2017, Tethyan Resources plc announced an issue of 22,222,223 new ordinary shares at a subscription price of 4.5p per ordinary share, raising GBP1,000,000 from a combination of new and existing strategic shareholders and management.
Capital and reserves
The share-based payment reserve includes a charge for the period in respect of the fair value of share options issued in the period of GBP76,000. Details of the share options outstanding are set out in note 24.
21 Trade and other payables
Group Company
31st December 2016 31st March 2016 31st December 2016 31st March 2016
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------------------ ---------------- ------------------ ----------------
Trade payables 233 29 187 29
Accruals and deferred income 75 37 76 37
----------------------------- ------------------ ---------------- ------------------ ----------------
308 66 263 66
----------------------------- ------------------ ---------------- ------------------ ----------------
22 Financial risk management
The Group's and Company's principal financial assets comprise cash and cash equivalents, trade receivables and other receivables. In addition the Company's financial assets include amounts due from subsidiaries. The Group's and Company's financial liabilities comprise: trade payables and other payables.
The Board of Directors determines, as required, the degree to which it is appropriate to use financial instruments, commodity contracts or other hedging contracts or techniques to mitigate financial risks. The main risks for which such instruments may be appropriate are interest rate risk, liquidity risk and foreign currency risk, each of which is discussed below. All non-routine transactions require Board approval. During 2016 and 2015 the Group has not used derivative financial instruments.
The Board consider that the risk components detailed below apply to both Group and Company. Financial risks are managed at Group rather than Company level.
Credit risk
Credit risk refers to the risk that the Group's financial assets will be impaired by the default of a third party. The Group is exposed to credit risk on its cash and cash equivalents, as set out in note 18, and to other receivables as set out in notes 14 and 17. Credit risk is managed by ensuring that surplus funds are deposited only with well-established financial institutions of high quality credit standing.
The Group's maximum exposure to credit risk is limited to its bank balances and trade and other receivables.
Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial commitment, recognised asset or liability will fluctuate due to changes in foreign currency rates. The Group reports its financial results in Sterling and is therefore exposed to foreign currency risk as a result of financial assets and future transactions denominated in currencies other than Sterling.
Exchange gains and losses on financial assets or future transactions are recognised directly in profit or loss. A proportion of the Group's costs are incurred in US Dollars. Accordingly, movements in exchange rates could have a detrimental effect on the Group's results and financial condition.
The cash balances carried within the Group comprise the following currency holdings:
31st December 2016 31st March 2016
GBP'000 GBP'000
----------- ------------------- ---------------
Sterling 956 981
US Dollars 24 43
Euro 5 -
----------- ------------------- ---------------
985 1,024
----------- ------------------- ---------------
The Group operates within the UK and Europe. All transactions are denominated in Sterling, Euro or US Dollars. As such the Group is exposed to transactional foreign exchange risk. The mix of currencies and terms of trade are such that the Directors believe that the Company's exposure is minimal and consequently they do not specifically seek to hedge that exposure.
The table below demonstrates the sensitivity of the Group's consolidated loss before tax to illustrative changes in the value of the US dollar with respect to Sterling, all other variables held constant. The sensitivity analysis includes only US dollars because the effect of other currencies is not significant. The sensitivities reflect the effect on profit before tax and total equity respectively of 5% changes in the exchange rates of US dollars vs. GBP GBP's.
Effect on profit Effect on
before tax total equity
US$ vs. GBP US$ vs. GBP
GBP'000 GBP'000
----------------- ---------------- ------------
31 December 2016 2 2
----------------- ---------------- ------------
31 March 2016 4 4
----------------- ---------------- ------------
The table below shows an analysis of net monetary assets and liabilities by functional currency of the Group:
31 December 2016
Sterling Total
GBP'000 GBP'000
------------------------ -------- -------
Balances denominated in
Sterling 956 956
US Dollars 24 24
Euros 5 5
------------------------ -------- -------
985 985
------------------------ -------- -------
31 March 2016
Sterling Total
GBP'000 GBP'000
------------------------ -------- -------
Balances denominated in
Sterling 981 981
US Dollars 43 43
------------------------ -------- -------
1,024 1,024
------------------------ -------- -------
Liquidity risk
Liquidity risk relates to the ability of the Group to meet future obligations and financial liabilities. The Group monitors its risk to a shortage of funds using cash flow models, which consider existing financial assets, liabilities and projected cash inflows and outflows from operations.
The table below sets out the maturity profile of financial liabilities at 31st December:
31st December 2016 31st March 2016
GBP'000 GBP'000
-------------------------------------- ------------------- ---------------
Due in less than one month 308 49
Due between one and three months - -
Due between three months and one year - -
-------------------------------------- ------------------- ---------------
308 49
-------------------------------------- ------------------- ---------------
To date the Group has relied upon shareholder funding of its activities. Development of mineral properties, the acquisition of new opportunities, or the recovery of royalty income from third party assets, may be dependent upon the Group's ability to obtain further financing through joint ventures, equity or debt financing or other means. Although the Group has been successful in the past in obtaining equity financing there can be no assurance that the Group will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.
Interest rate risk profile of financial assets
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the Group uses. Interest bearing assets comprise cash and cash equivalents. It is the Group's policy to settle trade payables within the credit terms allowed and the Group does not therefore incur interest on overdue balances.
At 31st December 2016 the Group had cash balances and short term deposits which attracted interest as follows:
31st December 2016 31st March 2016
GBP'000 Interest rate GBP'000 Interest rate
----------- ------- ------------- ------- -------------
Sterling 980 0.05% 981 0.90%
US Dollars 24 0.00% 43 0.00%
----------- ------- ------------- ------- -------------
The value of the Group's assets at 31st December 2016 and the result for the period would not be materially affected by changes in interest rates.
The interest rate risk profile of the Company is materially the same as the Group.
Fair values of financial assets and liabilities
It is the Directors' opinion that the carrying values of the Group's and the Company's financial assets and liabilities as at 31st December 2016 and 31st March 2016 are not materially different from their fair values. They have therefore not been shown separately.
23 Capital management
The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern, and develop its activities to provide returns for shareholders and benefits for other stakeholders.
The Group's capital structure comprises all components of equity (i.e. ordinary share capital, share premium, retained earnings and other reserves). At 31 December 2016 the Group had no debt.
When considering the future capital requirements of the Group and the potential to fund specific project development the Group's preferred funding option is equity rather than debt.
24 Share-based payments
Share options
The Company and Group operate an unapproved share option plan for the benefit of employees.
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the period are as follows:
31st December 2016 31st March 2016
WAEP WAEP
Number Pence Number Pence
------------------------------------------- ------------- ----- ---------- -----
Outstanding at the beginning of the period 28,400,000 3.14
Cancelled during the period (28,400,000) 3.14
Issued during the period 11,100,000 0.29 28,400,000 3.14
------------------------------------------- ------------- ----- ---------- -----
Exercisable at the period end 11,100,000 0.29 28,400,000 3.14
------------------------------------------- ------------- ----- ---------- -----
The fair value of share options and warrants granted during the period was estimated using a Black Scholes pricing model, with a resulting expense of GBP76,000 for the period ended 31 December 2016, the inputs to which were as follows:
Share options outstanding at 31 December 2016 had a weighted average exercise price of 3.14 pence (2016: 3.14 pence) and a weighted average contractual life of 4.5 years (2015: 5.6 years). The expected volatility was 50% and the risk free rate used was 2.56%, giving a fair value at date of grant of GBP59,350.
To date no share options have been exercised. There are no market based vesting conditions attaching to any share options outstanding at 31st December 2016.
At 31st December 2016 the total number of options over ordinary shares outstanding was as follows:
Weighted
average
exercise
price
Exercise period Number (pence)
------------------------------ ---------- --------
Exercisable until 2019 7,700,000 5.00
Exercisable until 2021 3,400,000 2.40
------------------------------ ---------- --------
Exercisable at the period end 11,100,000 7.40
------------------------------ ---------- --------
The Directors' report, under the section "Share capital, options and warrants", provides further details.
Joint Share Ownership Plan ("JSOP")
The Employee Benefit Trust ("EBT") is administered by Equiom (Guernsey) Limited as trustees. The trustees hold the shares for the purpose of entering into incentive awards and other arrangements within the terms of its trust deed. The EBT has an interest free loan from the Company to buy shares.
Under the terms of the JSOP which the EBT has entered into, each participant enters into a joint ownership of the respective shares together with the EBT. The interest of the participant relates to the increase in value of the shares above a 'Hurdle Value'. The JSOP may be realised on certain events, including a 'change of control' of the Company, or after the earliest date for realisation set out below, but before the expiry date set out below. The amount that can be realised under the award depends on the nature of the event.
In the event that the JSOP award is realised by a sale of the shares, the difference between the Hurdle Value and the sales price will be held by the EBT and may be applied either to repay the loan outstanding with the Company or to provide further benefits to its beneficiaries.
References in the statement of financial position and changes in equity to own shares held by EBT relate to those shares issued as part of the JSOP.
Due to the conditions described above this is considered an equity settled share-based payment transaction.
The number of shares granted and outstanding as 31 December 2016 is as follows:
Weighted
average
exercise
price
Exercise period Number (pence)
--------------------------------------------------------- --------- --------
Outstanding as at 31st March 2016 and 31st December 2016 1,333,333 45.3
--------------------------------------------------------- --------- --------
Outstanding as at 31st December 2016 1,333,333 45.3
--------------------------------------------------------- --------- --------
The fair value of this incentive was measured at the date of the award using a binomial option valuation model and is considered the most appropriate method taking into account the effect of the vesting conditions, the expected exercise period and the dividend policy of the Company. There are no market vesting conditions attached to these awards.
The variables used in arriving at a fair value of the awards were as follows:
Awards as at Awards as at
31st March 31st March
Exercise period 2012 2013
-------------------------------- ------------ ------------
Number of shares awarded 6,500,000 1,800,000
Share price at 31st March 3.18 pence 2.58 pence
Weighted average exercise price 8.54 pence 4.00 pence
Expected volatility 50% 50%
Option life (years) 2 years 3 years
Expected dividends Nil Nil
Risk fee interest rate 2.8% 0.5%
Fair Value GBP161,870 GBP9,477
-------------------------------- ------------ ------------
The calculation of the volatility of the share price was based upon the FTSE All Share Gold Mining Index. The life of the embedded option is estimated in the light of relevant factors, including behavioural considerations.
Share Warrants
As at 31 December 2016 there were 2,447,060 warrants outstanding with a weighted average exercise price of 1.31 pence per share. Details were as follows:
Weighted
average
exercise
price
Exercise period Number (pence)
----------------------------------- --------- --------
Exercisable until 4 October 2018 105,560 3.48
Exercisable until 12 December 2019 2,341,500 2.20
----------------------------------- --------- --------
Exercisable at the period end 2,447,060 2.26
----------------------------------- --------- --------
25 Contingent liabilities
Deferred Consideration
Contingent deferred consideration, estimated at GBP100,000 (31 March 2016: GBP100,000), becomes payable if either of the following events crystallise:
a. the Group discovering a proven deposit of at least three million ounces of gold or gold equivalent at the Pu Sam Cap operation in Vietnam and such deposit having been proven to be capable of extraction by bulk-mining methods; or
b. a bona fide takeover offer having been made for the entire issued share capital of the Company which values the Company at no less than GBP133,333,333.
In the event either of the above events crystallise, any liability would be settled by further payment in the form of a share issue equal to the lesser of:
-- 33,333,333 Consideration Shares of 1p each issued at the market value at the date of issue; or
-- such number of Consideration Shares as will be equal to 7.5% of the number of Ordinary Shares in issue.
As the likelihood of these events happening is presently considered remote the deferred consideration has not been recognised as a liability. The contingency arose when the Company acquired the Larchland Group from the vendors in the year ended 31 March 2005 and was part of the terms of the sale and purchase agreement with Candice Holdings Limited.
26 Capital commitments and project options
As at 31 December 2016 the Group has not been notified of any capital commitments by its joint venture partners (31 March 2016: nil). Tethyan has long term option deals on two projects located in Serbia, Suva Ruda and Gokcanica. These are option deals and Tethyan is not obligated to continue with either deal should they desire to terminate the deals.
On the Suva Ruda deal the first 2000 meters of drilling was completed in December 2016 and the first payment of EUR100,000 was completed by 1 March 2017.
As of the date of approval of these financial statements both deals were in good standing.
Suva Ruda deal
Under the terms of the Agreement Tethyan is entitled to purchase 100% of the License or Deep Research (at Tethyan's discretion) for a cash payment of EUR6 million, plus a percentage of the eventual capital cost of building the mine (details set out below), at any time during the total duration of the License and any future extensions of the License (a minimum of 7 years from the date of the Agreement).
The decision whether or not to exercise the Option during this period is at the sole discretion of the Company. The percentage of the capital costs payable by Tethyan in relation to the building of the mine, will only become payable if Tethyan exercises the Option, secures the necessary financing and proceeds with the building of the mine. The percentage of these costs due to Deep Research will be calculated as follows:
-- 4% of CAPEX up to EUR200m; -- 2% of CAPEX between EUR200 - 500m; -- 1% of CAPEX in excess of EUR500m.
Pursuant to the terms of the Agreement, and in order to retain the Option, the Company will arrange to complete, at its sole discretion, the following work program on the License:
-- a minimum of 2,000m drilling before 28 December 2016; -- a minimum of 5,000m additional drilling before 28 December 2018;
-- complete a preliminary economic assessment before the sixth anniversary of the date of the Agreement; and
-- complete an economic feasibility study before the seventh anniversary of the Agreement.
The Company will also make certain milestone payments, at its sole discretion, in order to retain the Option:
-- EUR100,000 by 1 March 2017;
-- EUR100,000 on each anniversary of the signing the Agreement up until the third year (September 2017, September 2018, September 2019).
Gokcanica option agreement
Tethyan may earn up to an 80% interest in the Gokcanica project by completing the following:
(a) Stage 1:
In order to earn a 51% interest in the Gokcanica Permits, Tethyan must commit a minimum expenditure of USD 500,000 on an exploration program that will include a drilling of a minimum of 1,000m of either reverse circulation and/or diamond drilling within 2 years. This could include, but is not restricted to, mapping, trenching, rock-chip sampling, soil sampling, remote sensing, geophysics as well as other relevant items such as logistics and administration.
(b) Stage 2:
In order to earn a 70% interest in the Gokcanica Permits, in addition to the drilling commitment outlined above, Tethyan must complete a Pre-Feasibility Study ("PFS") within 5 years.
(c) Stage 3:
In order to earn an 80% interest in the Gokcanica Permits, in addition to the drilling commitment and PFS, Tethyan must complete a Bankable Feasibility Study ("BFS") within the time-frame of the exploration permits, their renewals or conversion to a mining permit.
Restoration commitments
The Group has no obligations at 31 December 2016 to undertake any rehabilitation or restoration activity on the licences currently held.
27 Related parties transactions
The Group's investments in subsidiaries have been disclosed in note 16.
The Group's Key Management Personnel remuneration is disclosed in note 9.
During the period ended 31 December 2016 the Group transferred GBP305,754 to Global Mineral Resources d.o.o and GBP260,000 to Tethyan Resources Serbia d.o.o, both companies are incorporated in Serbia. The owner of these companies is Fabian Baker, COO of Tethyan Resources Jersey Ltd, who was the nominated owner in order to incorporate the business locally to ensure permits were applied for in respect of Chadine and Gokinica exploration work.
During the period the Company financed exploration activity relating to the Cadinje project through a related party transaction. Of the GBP225,000 that was remitted the Board have considered that GBP192,000 related to exploration activities which have ceased and therefore came to the conclusion to fully impair that cost.
28 Subsequent events
On 24 February 2017 Tethyan Resources d.o.o a company incorporated in Serbia, which had been incorporated under the ownership of F Baker, COO of Tethyan Resources Jersey Ltd, formally became a wholly owned subsidiary of Tethyan Resources Jersey Ltd, and therefore part of the Group. The company, along with Global Mineral Resources d.o.o had been incorporated to secure permits within Serbia. Subsequently, Global Mineral Resources d.o.o also became a wholly owned subsidiary of Tethyan Resources Serbia d.o.o as of 3 April 2017.
Terenure Limited, a wholly owned subsidiary based in Papua New Guinea, was formally removed from the register on 2 March 2017. The company had been dormant for over 12 months and had no assets or liabilities.
On 28 March 2017, Tethyan Resources plc announced an issue of 22,222,223 new ordinary shares at a subscription price of 4.5p per ordinary share, raising GBP1,000,000 from a combination of new and existing strategic shareholders and management. The proceeds will be used towards a 6,000 metre drilling programme at the Company's Suva Ruda project in addition to working capital requirements.
29 Control
No one party is identified as controlling the Group.
30 Publication of Report & Accounts
The report and accounts for the period ended 31 December 2016 will be posted to shareholders shortly and will be available from the Company's website, https://tethyan-resources.com/
This information is provided by RNS
The company news service from the London Stock Exchange
END
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