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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wishbone Gold Plc | LSE:WSBN | London | Ordinary Share | GI000A2PX455 | ORD 0.1P (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.25 | 1.20 | 1.30 | 1.25 | 1.25 | 1.25 | 779,017 | 07:40:09 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Nonmtl Minrls, Ex Fuels | 0 | -1.14M | -0.0044 | -2.84 | 3.22M |
From Apr 2019 to Apr 2024
TIDMWSBN
RNS Number : 8938C
Wishbone Gold PLC
30 June 2016
30 June 2016
Wishbone Gold Plc
Wishbone Gold Plc / Index: AIM / Epic: WSBN / Sector: Natural Resources
Wishbone Gold PLC ("Wishbone Gold" or the "Company")
Final Results
Wishbone Gold Plc, the precious metals trading and exploration company, announced its final results for the year ended 31 December 2015.
Financial Overview
At the end of the period under review, Wishbone Gold held cash balances totalling US$263,741 (2014: US$303,790). Since then the Company agreed a loan facility with Sanderson. Administrative costs, including interest during the year totalled US$651,886 (2014: US$673,085).
General Highlights
-- Acquisition of Precious Metals International Ltd and Black Sand FZE, expanding the remit of the Company into precious metals trading with the main operations based in Dubai.
-- In June debt facility raised from Sanderson Capital of $3m.
-- Change of Advisor - Allenby as Nominated Adviser on 10(th) March, 2016.
-- On 27(th) August 2015 the Company raised GBP250,000 in a placing at 0.25p per share.
-- On 11(th) September the Company settled GBP992,123 of debts including outstanding directors' fees and expenses and repaid loans from the Black Swan group through the issue of 396,849,229 shares at a price of 0.25p per share.
Outlook
Gold prices gained more than 16 percent in the first four months of 2016 and tested the USD1,300 per ounce in May 2016. Though they have fallen back a little, the upward trend remains as China, India and Russia continue to shore up reserves. Margins in the trading business are essentially fixed so a rise in the gold price leads to a corresponding increase in profitability for the trading. This offers Wishbone Gold plc an increasingly optimistic outlook, as the dual approach of exploration and trading in precious metals offers additional options in terms of achieving profitability and cash flow.
Comment - Chairman Richard Poulden
"Wishbone Gold plc continued our exploration activities in Australia during the year and in particular benefited on our main properties of White Mountains and Wishbone II from the Industry Priorities Initiative of the Future Resources Program. This is a Queensland Government funded piece of work with a brief of correcting existing geological mapping and comparing like systems; for example, an exploration prospect might have comparable structures to an existing mine.
However, one of the most significant recent events for the Company occurred just after the year end, on 4(th) February 2016. This was the acquisition of Precious Metals International Ltd and Black Sand FZE. This takes our group into precious metals trading with the main operations based in Dubai and this new expansion of the business enhances both opportunity for the business, and increased options in terms of achieving profitability and cash flow."
Matters Raised by the Independent Auditors
The Directors wish to bring to shareholders' attention the following matters raised in the Independent Auditor's Report.
Basis for qualified opinion
Other administrative costs in the reporting year as per note 5 includes amounts totalling US$98,100 paid by the Company in relation to travel expenses. We were unable to obtain adequate assurance regarding whether these amounts paid relate to services duly received by the Group and Company. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.
Qualified opinion arising from limitation in audit scope
In our opinion, the financial statements:
-- give a true and fair view, except for any adjustments that might have been found to be necessary had we been able to obtain sufficient evidence concerning travel expenses, in accordance with IFRS, of the state of the Group's and Company's affairs as at 31 December 2015 and of the Group's and Company's loss and cash flows for the year then ended; and
-- have been properly prepared in accordance with the Companies Act.
However, in respect alone of the limitation on our work relating to other administrative expenses:
-- we were unable to determine whether proper accounting records had been maintained; and
-- we have not obtained all the information and explanations that we considered necessary the purpose of our audit.
For further information, please contact:
Wishbone Gold Plc
Richard Poulden, CEO Tel: +44 207 812 0645
Allenby Capital
Virginia Bull / James Thomas Tel: +44 20 3328 5656
Damson Communications
Abigail Stuart-Menteth Tel: +44 207 812 0645
Amelia Hubert
Wishbone Gold Plc
Chairman's Report
Dear Shareholders,
We continued our exploration activities in Australia during the year and in particular have benefited on our main properties of White Mountains and Wishbone II from the Industry Priorities Initiative of the Future Resources Program. This is a Queensland Government funded piece of work with a brief of correcting existing geological mapping and comparing like systems; for example, an exploration prospect might have comparable structures to an existing mine. I will discuss the implications of this for us below.
Expansion into gold trading
However, one of the most significant recent events for your company occurred just after the year end, on 4(th) February 2016. This was the acquisition of Precious Metals International Ltd and Black Sand FZE. This takes our group into precious metals trading with the main operations based in Dubai.
The UAE provides the ideal gold trading base as a high liquidity marketplace. In 2013 (the last year for which clear data is available), 40% of the world's physical gold was traded through Dubai. The UAE charges no company or personal tax, no import or export tax on gold or silver, and offers a politically stable climate from which to trade. It has become a key point in the global physical gold marketplace.
Black Sand is the operating trading company, which is a Free Zone Enterprise licensed in the Emirate of Ajman, but with its logistical and operating base in Dubai. It trades physical precious metals (primarily gold but some small quantities of silver) bringing this in as doré (a semi pure gold bar) or ore for smelting and assaying in Dubai.
The shipments are made against letters of credit for an estimated value of each shipment but the final purchase price of the gold is only established once the assay has been performed in Dubai. Both the sale and the purchase price are then fixed on the basis of that assay and thus Black Sand's positions are effectively continuously hedged.
Currently our contracts are mainly with South America but we intend in future to expand to other geographic areas.
In June we raised a debt facility from Sanderson Capital of $3m. The terms of this facility are:
-- Initial term of two years -- Interest at 2% per annum
-- Facility fee of 38,657,037 ordinary shares of 0.1 pence each, equivalent to 10% of the total amount of facility at the prevailing share price
-- A trading override of 0.5% of gold traded using the Sanderson facility
This new expansion of our business does not mean that we are giving up on exploration but it does mean that we have some other options in terms of achieving profitability and cash flow.
Industry Priorities Initiative of the Future Resources Program.
One of the projects in the program concerns prospectivity of north-east Queensland for intrusion-related hydrothermal mineral systems like that targeted in the Wishbone Gold tenements. The project aims to map and further define regional geology, addressing limitations in current published geological maps and providing a more comprehensive understanding of the metallogeny, geophysical and geochemical signatures of intrusion related deposits in the Charters Towers Region.
The project is managed by the Department of Natural Resources and Mines, through the Geological Survey of Queensland. The scope of the project was jointly defined by Terra Search (who are Wishbone's subcontract geological team) and Klondike Exploration Services, in consultation with the Geological Survey of Queensland (GSQ) and James Cook University (JCU), taking into account feedback from other parties.
One direct benefit to Wishbone from an exploration point of view was being able to link data from sites contiguous to White Mountains (EPM 18393). This included drilled gold prospects, most notably Granite Castle which has an identified JORC inferred resource and which has since progressed to a Mineral Development Licence (held by Mantle Mining Pty Ltd). Some of the trends associated with this resource were confirmed as extending along strike into the White Mountains EPM.
Further sections of the Initiative coincided with the Wishbone Gold tenement suite and spoke to the classification and interpretation of known mineral occurrences in the broader Charter Towers region. The Oaky Mill prospect (Wishbone II, EPM 18396) was one such occurrence. Geochemical thematic maps from neighbouring tenures were released as a result of the initiative and re-interpretation of this data will assist ongoing exploration.
Organisation and staff changes
Clive Hyman stopped working for the Company on 15(th) September 2015 following the cessation of his consultancy with Black Swan Plc, which had supplied his services to the Company. Following the acquisition of Black Sand FZE, we have moved all of the Company's accounting and administration to Dubai.
You will see that the accounts have been qualified due to a portion of the records being unavailable. I would emphasise that this qualification relates solely to the holding company and not to the Australian subsidiary where the accounting work is done by PKF and where all of the group's main assets are held. This relates only to a proportion of the expenses and as a board we can assure you that these were validly incurred on behalf of the Company. We have moved to address the issues with the finance function and the changes made will ensure that nothing similar happens in future.
For our exploration operations in Australia we will continue to subcontract the work to Terra Search and the accounting to PKF.
The Gold Market
Gold prices gained more than 16 percent in the first four months of 2016 and tested the US$1,300 per ounce in May 2016. Though they have fallen back a little, the upward trend remains as China, India and Russia continue to shore up reserves. Margins in the trading business are essentially fixed so a rise in the gold price leads to a corresponding increase in profitability for the trading.
Change of Advisors
On 11 March 2016, the Company appointed Allenby Capital Limited as its nominated adviser. This was in the light of Sanlam's decision to sell its London advisory business and the fact that their key employees moved to Allenby. However, on another note, I have worked with Allenby before and look forward to doing so again.
Financial Overview
At the end of the period under review, Wishbone Gold held cash balances totalling US$263,741 (2014: US$303,790). Since then we have agreed the loan facility with Sanderson described above. Acquisition costs of US$195,775 have been incurred during the year on acquisitions which were aborted. Accordingly, these have been written off. The Directors are all paid minimal salaries and, at the Company's option, these can be paid in ordinary shares. During the period under review and during the current year all directors' salaries have been paid in shares in this way. Administrative costs, including interest during the year totalled US$651,886 (2014: US$673,085).
During the financial year the following key events occurred:
-- On 27th August 2015 the Company raised GBP250,000 in a placing at 0.25p per share.
-- On 11th September the Company settled GBP992,123 of debts including outstanding directors' fees and expenses and repaid loans from the Black Swan group through the issue of 396,849,129 shares at a price of 0.25p per share.
-- On 5(th) February 2016, Wishbone acquired Precious Metals International Ltd ("PMI") and its wholly owned subsidiary, Black Sand FZE ("Black Sand") (together Black Sand and PMI and "the PMI Group") in an all share transaction.
In conclusion, I would like to thank the board, management team and all our advisers for their hard work during the year and to express all our thanks to you our shareholders for your continuing support. I am of the belief that this will be vindicated by performance in future.
___________________________
R O'D Poulden
Chairman
30 June 2016
Independent auditors' report to the shareholders of Wishbone Gold Plc
We have audited the consolidated financial statements ("the financial statements") of Wishbone Gold Plc ("the Company") and its subsidiaries ("the Group") for the year ended 31 December 2015 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the company statement of financial position, the consolidated statement of changes in equity, the company statement of changes in equity, the consolidated statement of cash flows, the company statement of cash flows and the related notes. These financial statements have been prepared under the accounting policies set out therein.
This report, including the opinion, has been prepared for and only for the Company's shareholders as a body in accordance with Section 257 of the Companies Act and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Directors' responsibilities for the financial statements
The directors are responsible for the preparation and true and fair presentation of these financial statements in accordance with applicable laws in Gibraltar and International Financial Reporting Standards, as adopted for use in the European Union ("IFRS"). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's responsibilities
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
Basis for qualified opinion
Other administrative costs in the reporting year as per note 5 includes amounts totalling US$98,100 paid by the Company in relation to travel expenses. This amount is only a proportion of the total travel costs. We were unable to obtain adequate assurance regarding whether these amounts paid relate to services duly received by the Group and Company. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.
Qualified opinion arising from limitation in audit scope
In our opinion, the financial statements:
-- give a true and fair view, except for any adjustments that might have been found to be necessary had we been able to obtain sufficient evidence concerning travel expenses, in accordance with IFRS, of the state of the Group's and Company's affairs as at 31 December 2015 and of the Group's and Company's loss and cash flows for the year then ended; and
-- have been properly prepared in accordance with the Companies Act.
Opinion on other matter prescribed by the Companies Act
In our opinion the information given in the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act requires us to report to you if, in our opinion:
-- if information specified by law regarding directors' remuneration and other transactions is not disclosed.
However, in respect alone of the limitation on our work relating to other administrative expenses:
-- we were unable to determine whether proper accounting records had been maintained; and
-- we have not obtained all the information and explanations that we considered necessary the purpose of our audit.
Samuel Vidal Moses Cohen (Statutory Auditor)
for and on behalf of Benady Cohen & Co Limited
Chartered Accountants
21 Engineer Lane
Gibraltar
30 June 2016
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Wishbone Gold PLC
Consolidated Income
Statement
for the year ended
31 December 2015
Notes 2015 2014
$ $
Abortive acquisition
costs 5 (195,775) (831,915)
Administrative expenses 5 (622,659) (663,083)
Operating loss 5 (818,434) (1,494,998)
Impairment of investments 12 (272,450) (1,086,395)
Interest expense (29,227) (10,002)
Loss before taxation (1,120,111) (2,591,395)
Taxation 7 - -
Loss for the financial
year (1,120,111) (2,591,395)
------------
Loss per share:
Basic and diluted (cents) 8 (0.273) (1.065)
------------ ------------
There are no recognised gains or losses other than disclosed above and there have been no discontinued activities or acquisitions in the year.
Wishbone Gold PLC
Consolidated Statement of
Comprehensive Income
for the year ended 31 December
2015
Notes 2015 2014
$ $
Loss for the year (1,120,111) (2,591,395)
Other Comprehensive loss
Exchange differences on translating
foreign operations 216,254 1,564
------------ ------------
Other comprehensive gain/(loss)
for the year, net of tax 216,254 1,564
Total comprehensive loss for
the year attributable to equity
------------ ------------
owners of the parent (903,857) (2,589,831)
------------ ------------
Wishbone Gold PLC
Consolidated Statement of Financial Position
as at 31 December 2015
Notes 2015 2014
$ $
Current assets
Trade and other
receivables 9 16,677 28,611
Cash and cash
equivalents 263,741 303,790
------------ ------------
280,418 332,401
------------
Non-current
assets
Intangible assets 10 404,179 409,409
Investments 11 91,152 384,537
------------ ------------
495,331 793,946
Total assets 775,749 1,126,347
------------ ------------
Current liabilities 13 200,661 1,250,467
Capital and
reserves
Share capital 15 1,128,351 419,146
Share premium 4,569,658 3,671,758
Share based
payment reserve 70,165 74,205
Accumulated
losses (5,311,437) (4,191,326)
Foreign exchange
reserve 118,351 (97,903)
------------ ------------
Total equity
and liabilities 775,749 1,126,347
------------ ------------
Wishbone Gold PLC
Company Statement of Financial Position
as at 31 December 2015
Notes 2015 2014
$ $
Current assets
Trade and other
receivables 9 511,077 452,888
Cash and cash
equivalents 215,750 300,719
------------ --------------
726,827 753,607
------------
Non-current
assets
Investments 11 255,287 558,122
------------ --------------
255,287 558,122
Total assets 982,114 1,311,729
------------ --------------
Current liabilities 13 182,778 1,232,390
Capital and
reserves
Share capital 15 1,128,351 419,146
Share premium 4,569,658 3,671,758
Share based
payment reserve 70,165 74,205
Foreign Exchange
Reserve 222,370 -
Accumulated
losses (5,191,208) (4,085,770)
------------ --------------
Total equity
and liabilities 982,114 1,311,729
------------ --------------
Wishbone Gold
PLC
Consolidated Statement
of Changes in Equity
for the year ended
31 December 2015
Share Foreign
Based Exchange
Share Share Payment Accumulated Translation Total
Capital Premium Reserve Losses Reserve Equity
$ $ $ $ $ $
Balance at
1 January 2014 286,351 1,535,399 29,449 (1,599,931) (99,467) 151,801
Shares issued
during the
year
(net of issue
costs) 132,795 2,136,359 - - - 2,269,154
Options issued
during the
year
(net of issue
costs) (note
16) - - 44,756 - - 44,756
Foreign
exchange - - - - 1,564 1,564
---------- ---------- -------- ------------- ------------ ---------------
Balance at
31 December
2014 419,146 3,671,758 74,205 (4,191,326) (97,903) (124,120)
Shares issued
during the
year
(net of issue
costs) 709,205 897,900 - - - 1,607,105
Loss for the
year - - - (1,120,111) - (1,120,111 )
Foreign
exchange - - (4,040) - 216,254 212,214
---------- ---------- -------- ------------- ------------ ---------------
Balance at
31 December
2015 1,128,351 4,569,658 70,165 (5,311,437) 118,351 575,088
---------- ---------- -------- ------------- ------------ ---------------
Wishbone Gold
PLC
Company
Statement
of Changes in
Equity DR
for the year
ended 31
December
2015
Share
Based
Foreign
Share Share Payment Accumulated Exchange Total
Capital Premium Reserve Losses Reserve Equity
$ $ $ $ $ $
Balance at 1
January 2014 286,351 1,535,399 29,449 (1,519,199) - 332,000
Shares issued
during the
year
(net of issue
costs) 132,795 2,136,359 - - - 2,269,154
Options issued
during the
year
(net of issue
costs) (note
16) - - 44,756 - - 44,756
Loss for the
year - - - (2,566,571) - (2,566,571)
---------- ---------- -------- -------------- ---------- ------------
Balance at 31
December 2014 419,146 3,671,758 74,205 (4,085,770) - 79,339
---------- ---------- --------- -------------- ---------- ------------
Shares issued
during the
year
(net of issue
costs) 709,205 897,900 - - - 1,607,105
Loss for the
year - - - (1,105,438) - (1,105,438)
Foreign
exchange - - (4,040) - 222,370 218,330
---------- ---------- -------- -------------- ---------- ------------
Balance at 31
December 2015 1,128,351 4,569,658 70,165 (5,191,208) 222,370 799,336
---------- ---------- -------- -------------- ---------- ------------
Wishbone Gold PLC
Consolidated Statement
of Cash Flows
for the year ended 31 December
2015
Notes 2015 2014
$ $
Cash flows from operating
activities
Loss before tax (1,120,111) (2,591,395)
Reconciliation to cash
generated from operations:
Foreign exchange loss 22,125 15,984
Interest expense 29,227 10,002
Impairment losses 272,450 1,086,395
Administrative expenses
converted into ordinary
shares 1,209,625 44,756
--------------- ------------
Operating cash flow before
changes in working capital 413,316 (1,434,258)
Decrease/(increase) in
receivables 11,934 13,744
(Decrease)/increase in
payables (816,781) 724,836
--------------- ------------
Cash outflow from operations (391,531) (695,678)
---------------
Cash flows from investing
activities
Expenditure/(income) on
exploration activities - (1,170)
---------------
Net cash flow from investing
activities - (1,170)
--------------- ------------
Cash flows from financing
activities
Issue of shares for cash 15 368,253 780,792
(Decrease)/increase in
borrowings 14 (233,025) 83,208
--------------- ------------
Net cash flow from financing
activities 135,228 864,000
---------------
Effects of exchange rates
on cash and cash equivalents 216,254 1,564
Net(decrease)/increase
in cash and cash equivalents (40,049) 168,716
Cash and cash equivalents
at 1 January 303,790 135,074
--------------- ------------
Cash and cash equivalents
at 31 December 263,741 303,790
--------------- ------------
Wishbone Gold PLC
Company Statement of Cash Flows
for the year ended 31 December
2015
2015 2014
$ $
Cash flows from operating activities
Loss before tax (1,105,438) (2,566,571)
Reconciliation to cash generated
from operations:
Foreign exchange loss 26,345 15,984
Interest expense 29,227 10,002
Impairment losses 272,450 1,086,395
Administrative expenses converted
into ordinary shares 1,209,625 44,756
---------------------------- ------------
Operating cash flow before
changes in working capital 432,209 (1,409,434)
(Increase)/decrease in receivables (58,189) 4,713
Decrease/(increase) in payables (816,587) 744,253
---------------------------- ------------
Cash outflow from operations (442,567) (660,468)
----------------------------
Cash flows from financing activities
Issue of shares for cash 368,253 780,792
(Decrease) / increase in borrowings (233,025) 83,208
---------------------------- ------------
Net cash flow from financing
activities 135,228 864,000
---------------------------- ------------
Effects of exchange rates on
cash and cash equivalents 222,370 -
Net (decrease)/increase in
cash and cash equivalents (84,969) 203,532
Cash and cash equivalents at
1 January 300,719 97,187
---------------------------- ------------
Cash and cash equivalents at
31 December 215,750 300,719
---------------------------- ------------
Wishbone Gold PLC
Notes to the Financial Statements for the year ended 31 December 2015
1. General information
The consolidated financial statements of Wishbone Gold Plc (the "Company") and its subsidiaries (the "Group") for the year ended 31 December 2015 were authorised for issue in accordance with a resolution of the Company's directors on 30 June 2016.
The Company was incorporated in Gibraltar under the name of Wishbone Gold Plc as a public company under the Gibraltar Companies Act. The authorised share capital of the Company is GBP1,000,000 divided into 1,000,000,000 shares of GBP0.001 each. The registered office is located at G1 Haven Court, 5 Library Ramp, Gibraltar. The principal activity of the Company is that of holding company of a group which is engaged in mineral exploration.
On 2 July 2013, the Company approved the conversion of GBP207,222 of expenses and debts into 11,841,307 ordinary shares to the Directors at a price of 1.75p to satisfy debts and expenses incurred on behalf of the Company.
On 18 December 2013 the Company approved the conversion of GBP7,500 of expenses into 272,727 shares at the price of 2.75p.
On 7 March 2014 the Company issued 45,772,693 ordinary shares in exchange for 1,031,360 ordinary shares in Global Resources Investment Trust, net of issue costs of US$34,450.
The Company undertook a conditional Placing and Open Offer on 4 April 2014. A total of new issues, including commission shares, of 33,677,181 new ordinary shares were admitted to trading AIM on 28 April 2014 which raised US$780,792 net of expenses of US$32,682.
On 17(th) July 2014, the Company approved the conversion of GBP7,500 of expenses into 500,000 new ordinary shares at the price of 1.5p.
On 1(st) September 2015, the Company approved the issue of 100,000,000 shares at a price of 0.25p per share to raise GBP250,000 gross.
On 11th September the Company settled GBP992,123 of debts including outstanding directors' fees and expenses and repaid loans from the Black Swan group through the issue of 396,849,129 shares at a price of 0.25p per share.
2. Accounting policies
Basis of preparation
The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") applied in accordance with the provisions of the Gibraltar Companies Act.
In accordance with the Gibraltar Companies Act, the individual statement of financial position of the Company has been presented as part of these financial statements. The individual statement of comprehensive income has not been presented as part of these financial statements as permitted by Section 288 of the Act. The individual statement of comprehensive income of the Company shows a loss for the year of US$1,105,438 (2014: US$2,566,571).
IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC") and there is an on-going process of review and endorsement by the European Commission. The accounts have been prepared on the basis of the recognition and measurement principles of IFRS that are applicable for the year commencing 1 January 2015.
The consolidated financial statements have been prepared under the historical cost convention. The principal accounting policies set out below have been consistently applied to all years presented other than changes from the new and amended standards and interpretations effective from 1 January 2015.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Report and Directors' Report. The financial position of the Group at the year end and its cash flows and liquidity position are included in the consolidated statement of financial position and the consolidated statement of cash flows. As at 31(st) December 2015 the Group cash balances amounted to US$263,741 and current liabilities, excluding directors and other fees (amounting to US$51,371), were US$149,290. The Group closely monitors and manages its capital position and liquidity risk regularly throughout the year to ensure that it has sufficient funds to meet forecast cash requirements and satisfy the working capital requirements and proposed acquisition and exploration activity.
On 3(rd) June 2016 the Company secured a loan facility of US$3,000,000 to fund the Group's continuing operations. Whilst this will primarily be utilised in the trading operations in Dubai it also provides sufficient funding to continue the exploration program in Australia.
Basis of consolidation
The Group's consolidated financial statements incorporate the financial statements of the Company and its subsidiary prepared to 31 December each year. Control is achieved where the company has power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.
All intra-group transactions and balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the consolidated accounts.
In the parent company financial statements the investment in the subsidiary is accounted for at cost.
Business combinations and goodwill
On acquisition, the assets and liabilities and contingent liabilities of subsidiaries are measured at their fair values at the date of acquisition. Any excess of cost of acquisition over the fair value of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.
Exploration and evaluation assets
Costs arising from exploration and evaluation activities are accumulated separately for each area of interest and only capitalised where such costs are expected to be recovered through successful development, or through sale, or where exploration and evaluation activities have not, at the reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves.
Expenditure capitalised comprises direct costs that have a specific connection with a particular area of interest. Capitalised expenditure in respect of areas of interest is written off in the income statement when the above criteria do not apply or when the directors assess that the carrying value may exceed the recoverable amount.
Capitalised costs in respect of an area of interest that is abandoned are written off in the period in which the decision to abandon is made.
Once production commences, capitalised expenditure in respect of an area of interest will be amortised on a unit of production basis by reference to the reserves of that area of interest.
Investments
Investments in group undertakings
Investments in group undertakings are measured at cost less any impairments arising should the fair value after disposal costs be lower than cost.
Investments held for resale
Investments held for resale are designated at fair value through profit or loss at inception. Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the asset. Investments are de-recognised when the rights to receive cash flows from the investments have expired or the Group has transferred substantially all risks and rewards of ownership. Investments held for resale are initially recognised at cost. Subsequent to initial recognition, these investments held for resale are measured at fair value in the statement of financial position. Gains and losses arising from changes in the fair value of these assets are presented in profit or loss in the period in which they arise. During the year the group and Company recognised impairments of US$272,450 (2014 : US$1,086,395).
Impairment
At each year end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is higher of fair value less cost to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset, for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior periods. A reversal of impairment loss is recognised in the income statement immediately.
Foreign currencies
The consolidated financial statements are presented in United States Dollars ("US$"), the presentation and functional currency of the Company. All values are rounded to the nearest US$. Transactions denominated in a foreign currency are translated into US$ at the rate of exchange ruling at the date of the transaction. At the year end date, monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at that date. All exchange differences are dealt with in the income statement.
On consolidation, the assets and liabilities of foreign operations which have a functional currency other than US$ are translated into US$ at foreign exchange rates ruling at the year end date. The revenues and expenses of these subsidiary undertakings are translated at average rates applicable in the period. All resulting exchange differences are recognised as a separate component of equity. Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation are recognised in the consolidated statement of comprehensive income and disclosed as a separate component of equity, such foreign exchange gains or losses are reclassified from equity to the income statement on disposal of the net foreign operation. The same foreign exchange gains or losses are recognised in the stand alone income statements of either the parent or the foreign operation.
In the statement of cash flows, cash flows denominated in foreign currencies are translated into the presentation currency of the Group at the average exchange rate for the year or the prevailing rate at the time of the transaction where more appropriate.
The closing exchange rate applied at the year end date was AUD 1.3735 per US$1 (2014: AUD 1.2258). The average exchange rate applied at the year end date was AUD 1.3319 per US$1 (2014: AUD 1.1094).
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.
The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment loss represents the loss incurred by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of loss that is reported to the Board of Directors for the purpose of the resource allocation and the assessment of the segment performance.
When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment assets and liabilities. For this purpose, all assets and liabilities are allocated to reportable segments (note 4).
Other receivables
Other receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment. Provision for impairment is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivable. The amount of the impairment is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at effective interest rate.
Cash and cash equivalents
Cash and cash equivalents comprise on demand deposits held with banks, with original maturity of three months or less.
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the income statement.
Trade and other payables
Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest rate method.
Taxation
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date.
Deferred taxation is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates and laws that have been enacted (or substantively enacted) by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its liabilities. Equity instruments issued by a group entity are recorded at the proceeds received, net of any direct issue costs.
Share based payments
The Company has historically issued warrants and share options in consideration for services. The Company issued share options as disclosed in note 16 in 2014. The fair value of the warrants/share options have been treated as part of the cost of the service received and is charged to share premium with a corresponding increase in the share based payment reserve. As the warrants have lapsed, unexercised as of 31(st) December 2015, they have been written back.
New standards and amendments adopted during the year
The following new standards and amendments became effective during the year:
IFRIC 21: Levies - effective for annual periods commenced on or after 1 January 2014
Amendments to IFRS 10, 12 and IAS 27: Investment Entities - effective for annual periods commenced on or after 1 January 2014
Amendments to IAS 32: Offsetting Financial Assets and Liabilities - effective for annual periods commenced on or after 1 January 2014
Amendments to IAS 36: Recoverable Amount Disclosures for Non-Financial Assets - effective for annual periods commenced on or after 1 January 2014
The adoption of the above new standards and amendments in the current year did not have material effect on the consolidated financial statements
New standards and interpretations in issue but not yet effective
At the date of authorisation of these consolidated financial statements, the following standards and interpretations were in issue but not yet mandatorily effective and have not been applied in the financial statements:
IFRS 9 - Financial Instruments - effective for annual periods commencing on or after 1 January 2018
IFRS 14 - Regulatory Deferral Accounts - effective for annual periods commencing on or after 1 January 2016
IFRS 15 - Revenue from Contracts with Customers - effective for annual periods commencing on or after 1 January 2017
Amendments to IFRS 7 - Financial instruments: disclosures - effective for annual periods commencing on or after 1 January 2016
Amendments to IFRS 11 - Joint Arrangements: Accounting for Acquisitions of Interests - effective for annual periods commencing on or after 1 January 2016
Amendments to IFRS 13 - Fair value measurement - effective for annual periods commencing on or after 1 July 2014
Amendments to IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation - effective for annual periods commencing on or after 1 January 2016
Amendments to IAS 24 - Related party transactions - effective for annual periods commencing on or after 1 July 2014
Amendments to IAS 27 - Equity Method in Separate Financial Statements - effective for annual periods commencing on or after 1 January 2016
The directors anticipate that the adoption of these standards and interpretations will not have a material impact on the consolidated financial statements in the period of initial adoption.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
In addition to the standards, interpretations and amendments noted above, the Government of Gibraltar passed into law the Companies Act 2014 ("the New Act") on 1 November 2014. The accounting and audit provisions of the New Act come into force for annual periods commencing on or after 1 November 2014. The adoption of the New Act by the Company has not had a significant impact on the Group's and Company's financial position or results.
3. Critical accounting estimates and judgements
The critical accounting estimates and judgements made by the Group regarding the future or other key sources of estimation, uncertainty and judgement that may have a significant risk of giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial year are:
Critical judgements in applying the group's accounting policies
Going concern
The preparation of the financial statements is based on the going concern assumption as disclosed in note 2. The Board of Directors, after taking into consideration the additional funding received, believe the going concern assumption is appropriate.
Impairment of exploration and evaluation assets
The Board of Directors continue to budget for the exploration and evaluation commitments noted in note 18 and continue to invest in these. The Board of Directors do not consider that the exploration and evaluation assets are impaired. The carrying value of these assets is dependent on the judgements reached in relation to going concern in order to fund and develop these assets.
Determination of functional currency
The Directors considers the US$ to be the currency that most faithfully represents the economic effect of the underlying transactions, cash flows, events and conditions of the Company. The US$ is the currency in which the Company measures its performance and reports its results, as well as the currency in which it assesses the viability of projects.
Parent company statement of financial position - impairment of the investment in and loan to the subsidiary
At the reporting date, the subsidiary had net liabilities of US$127,801 (AUD 175,535) (2014: US$117,227 (AUD 143,697)). As noted above, the Board of Directors do not consider that the exploration and evaluation assets are impaired and therefore there is no indication of impairment of the investment in and loan to the subsidiary of US$164,134 (2014: US$173,585) and US$495,588 (2014: US$424,970) respectively.
Key accounting estimates
Valuation of warrants and options
As described in note 16, the fair value of the warrants and options granted was calculated using the Black & Scholes model which requires the input of highly subjective assumptions, including volatility of the share price. Changes in subjective input assumptions may materially affect the fair value estimate.
4 Segmental analysis
Management has determined the operating segments by considering the business from both a geographic and product perspective. For management purposes, the Group is currently organised into one operating division: resource evaluation. The division is the business segment for which the Group reports its segment information internally to the Board of Directors. The Group's operations are predominantly in Australia.
5 Operating loss 2015 2014
$ $
This is stated after charging:
Abortive acquisition costs 195,775 831,915
Fees payable to the Company's
auditor for the audit of the Group
consolidated financial statements 37,567 23,303
Other assurance services 19,872 -
Accounting and tax compliance 19,984 35,828
Share based payments - 44,756
Other administrative costs 388,620 238,571
Remuneration of the directors
of the Group 147,853 190,963
Remuneration of the directors
of subsidiaries 8,763 10,649
Foreign exchange losses - 119,013
-------- ----------
818,434 1,494,998
-------- ----------
Abortive acquisition costs relate to costs incurred in exploring and evaluating potential acquisition targets which were later aborted by the directors.
Remuneration paid to the directors of the Group has historically been settled via the issue of equity in the Company, as disclosed in note 19.
6. Staff costs
The Group has no employees. Staff costs for the year ended 31 December 2015 were US$nil (2014: US$nil).
7 Taxation
The Company is subject to corporation tax in Gibraltar on any profits which are accrued in or derived from Gibraltar or any passive income which is taxable. The corporation tax rate in Gibraltar for the year ended 31 December 2015 is 10% (2014: 10%).
The Company has taxable losses to carry forward, consequently no provision for corporate tax has been made in these financial statements.
The Group's subsidiary is subject to corporate income tax in Australia. The corporate income tax rate in Australia for the year ended 31 December 2015 is 30% (2014: 30%).
This subsidiary has taxable losses to carry forward, consequently no provision for corporate tax has been made in these financial statements.
Note that there are no group taxation provisions under the tax laws of Gibraltar.
As at 31 December 2015 and as at 31 December 2014 the company has no deferred tax assets and no deferred tax liabilities.
8 Loss per share 2015 2014
$ $
Loss for the purpose of basic
loss per share being net loss
attributable to
equity owners of parent (1,120,111) (2,591,395)
------------ ------------
Loss for the purpose of diluted
earnings per share (1,120,111) (2,591,395)
------------
Number of shares:
Weighted average number of ordinary
shares for the purpose of the
basic
and diluted loss per share 409,955,753 243,387,111
------------ ------------
Basic and diluted (cents) (0.273) (1.065)
------------ ------------
Due to the Company and the Group being loss making, the share options and warrants (note 16) are anti-dilutive.
9 Trade and other receivables 2015 2014
$ $
Group
Debtors 10,395 693
Prepayments 6,282 27,918
16,677 28,611
-------- --------
Company 2015 2014
$ $
Amounts owed by subsidiary undertakings
(note 19) 495,589 424,970
Debtors 9,206 -
Prepayments and accrued income 6,282 27,918
-------- --------
511,077 452,888
-------- --------
The amount owed by subsidiary undertaking relates to an interest free loan to Wishbone Gold Pty, repayable on demand.
10 Intangible fixed assets Exploration &
evaluation
assets Total
Group $ $
Cost
At 1 January 2015 409,409 409,409
Foreign exchange revaluation (5,260) (5,260)
-------------- --------
At 31 December 2015 404,179 404,179
The Group holds Exploration Permits for Mining ("EPMs") to four tenements which have initial expiration dates ranging from April 2016 to September 2018. The renewal of the EPMs is for a maximum further period of 5 years. Permits are not automatically renewed but require an application to the Queensland Department of Natural Resources and Mines.
11 Investments Group: Company:
2015 2014 2015 2014
$ $ $ $
Shares in subsidiary
undertakings - - 164,135 173,584
Investments
held for resale 91,152 384,537 91,152 384,538
----------------------- --------- -------- --------
91,152 384,537 255,287 558,122
----------------------- --------- -------- --------
The movement in investments held for
resale during the year is as follows:
Group: Company:
2015 2014 2015 2014
$ $ $ $
At 1 January
2015 384,537 - 384,537 -
Additions 0 1,531,116 - 1,531,116
Impairment (272,450) (1,086,395) (272,450) (1,086,395)
Foreign exchange
losses (20,935) (60,184) 143,200 (60,184)
------------------------------- ------------ -------------- -------------
At 31 December
2015 91,152 384,537 255,287 384,537
------------------------------- ------------ -------------- -------------
110,000,000
Wishbone Gold ordinary
Pty Ltd shares of 100% AUD (143,697) AUD (41,142)
AUD 0.001
each
Wishbone Gold 1 ordinary
Tasmania Pty share of
100% AUD 1 AUD nil
Limited AUD 1 each
The movement in investments held for
resale during the year is as follows:
Group: Company:
2015 2014 2015 2014
$ $ $ $
At 1 January
2015 384,537 - 558,122 -
Additions 0 1,531,116 0 1,531,116
Impairment (272,450) (1,086,395) (272,450) (1,086,395)
Foreign exchange
losses (20,935) (60,184) (30,385) (60,184)
----------------------- ------------ -------------- -------------
At 31 December
2015 91,152 384,537 255,287 384,537
----------------------- ------------ -------------- -------------
110,000,000
Wishbone Gold ordinary
Pty Ltd shares of 100% AUD (143,697) AUD (41,142)
AUD 0.001
each
Wishbone Gold 1 ordinary
Tasmania Pty share of 100% AUD 1 AUD nil
Wishbone Gold Pty Ltd is an exploration company and Wishbone Gold Tasmania Pty Limited has remained dormant. Both companies are incorporated in Australia and the registered office address is PKF, RSL Centre Level 5, 9 Beach Road, Surfer's Paradise QLD 4217, Australia.
Investments held for resale
Investments held for resale of both the Group and the Company relate to Global Resources Investment Trust which was acquired as a result of a share-for-share exchange as disclosed in note 15. The investments held for resale are valued based on the market price of the shares. During the year, the directors have recognised an impairment loss of US$272,450 (2014: US$1,086,395) through the consolidated income statement.
12 Impairment of investments
As stated in note 11, the directors have recognised impairment on the investment held in Global Resources Investment Trust to reflect the fair value of the investment. The impairments recognised in both the Group and the Company accounts are as follows:
2015 2014
$ $
Impairments recognised during
the year (note 11) 272,450 1,086,395
13 Current liabilities 2015 2014
$ $
Group
Borrowings (note 14) - 233,025
Trade payables 106,073 428,992
Accruals and deferred income 43,217 295,766
Directors fees accrued and expenses
payable 51,371 292,684
-------- ----------
200,661 1,250,467
-------- ----------
2015 2014
$ $
Company
Borrowings (note 14) - 233,025
Trade payables 101,407 425,966
Accruals and deferred income 30,000 280,715
Directors fees accrued and expenses
payable 51,371 292,684
------------------- ----------
182,778 1,232,390
------------------- ----------
In addition to the directors' fees payable as disclosed in note 19, directors' expenses amounting to US$51,371 (2014: US$169,916) have been accrued and are expected to be settled via the issue of equity.
14 Borrowings - Group and Company 2015 2014
$ $
Loan from Black Swan FZE - 233,025
------- --------
A loan facility was entered into in the course of the year ended 31 December 2013 from Black Swan FZE for a maximum amount of GBP150,000. This loan carries an interest charge of 5% per annum, calculated on the principle and interest outstanding each month until redemption. The loan is repayable at any time at the option of the Black Swan FZE.
GBP100,000 (US$163,506) of the facility was drawn down on 6 November 2013. The remaining facility of GBP50,000 (US$83,208) was drawn down on 4 March 2014.
A loan facility was entered into in the course of the year ended 31 December 2015 from Black Swan FZE for a maximum amount of GBP200,000. This loan carries an interest charge of 5% per annum, calculated on the principle and interest outstanding each month until redemption. The loan is repayable at any time at the option of the Black Swan FZE.
GBP200,000 (US$294,602) of the facility was drawn down on 9(th) April 2015.
The entire loan amount was repaid on 11(th) September 2015, through the issue of Debt Settlement Shares, as noted in Note 15.
The Directors consider that the carrying amount of borrowings approximates to their fair value.
15 Share capital
- Group and Company 2015 2014
$ $
Authorised:
1,000,000,000 Ordinary shares
of GBP0.001 (US$0.0016) each 1,600,000 1,600,000
---------- ----------
2015 2014 2015 2014
No No $ $
Allotted and called
up:
Ordinary shares
of GBP0.001 (US$
0.0016) each 759,900,364 263,051,235 1,128,351 419,146
------------ ------------ ---------- ----------
On 2 July 2013, the company approved the conversion of GBP207,222.87 of expenses and debts into 11,841,307 ordinary shares to the directors at a price of 1.75p to satisfy debts and expenses incurred on behalf of the Company.
On 18 December 2013 the Company approved the conversion of GBP7,500 of expenses into 272,727 shares at a price of 2.75p.
On 7 March 2014 the Company issued 45,772,693 ordinary shares in exchange for 1,031,360 ordinary shares in Global Resources Investment Trust, net of issue costs of US$34,450.
The Company announced a conditional Placing and Open offer on 4 April 2014. A total of new issues, including commission shares, of 33,677,181 new ordinary shares were admitted to trading AIM on 28 April 2014 which raised US$780,792 net of expenses of US$32,682.
On 17 July 2014 the Company approved the conversion of GBP7,500 of expenses into 500,000 shares at a price of 1.5 p.
On 1(st) September 2015, the Company approved the issue of 100,000,000 shares at a price of 0.25p per share.
On 11(th) September 2015, the Company approved the issue of 396,849,129 Debt Settlement Shares at a price of 0.25p per share; in order settle all its debt as of that date.
Ordinary shares carry a right to receive notice of, attend, or vote at any Annual General and Extraordinary General Meetings of the company. The holders are entitled to receive dividends declared and paid by the Company.
16 Share based payments
Share options were issued to Clive Hyman, the former CFO, on 7 March 2014 over 5,000,000 new ordinary shares in the Company to vest as follows: 2,000,000 immediately on grant, 2,000,000 on 7 March 2015, and 1,000,000 on 7 March 2016. The fair value of the options as at the date of issue was US$44,756, which has been recognised within administrative expenses in the consolidated income statement. Clive Hyman ceased his consultancy on 15(th) September 2015. Under the terms of the option scheme he then had 90 days in which to exercise those options which had vested. Since he did not do this all these options have now lapsed.
Details of the warrants and share options in issue during the year ended 31 December 2014 are as follows:
Number Number
of of Average
warrants warrants
/ Average / exercise
exercise
options price options price
2015 2015 2014 2014
No GBP No GBP
Outstanding at
1 January 1,709,873 0.02000 1,709,873 0.02000
Issued/(Lapsed)
during the year (1,709,873) (0.02000) 5,000,000 0.02125
------------ ---------------------- ---------- ---------
Outstanding at
31 December - - 6,709,873 0.02093
------------ ---------------------- ---------- ---------
Fair value is measured by use of the Black & Scholes model with the assumption of 50% future market volatility and a future interest rate of 1% per annum based on the current economic climate. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability and exercise restrictions. The fair value of share options and warrants granted as at 31 December 2015 was US$nil (2014: US$29,449).
17 Financial Instruments
The Group's financial instruments comprise cash and cash equivalents, borrowings and items such as trade payables which arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group's operations.
The Group's operations expose it to a variety of financial risks including credit risk, liquidity risk, interest rate risk and foreign currency exchange rate risk. The Directors do not believe the Group is exposed to any material equity price risk. The policies are set by the Board of Directors.
Classification of financial instruments
All Group financial assets are classified as loans and receivables, and are held at amortised cost. All of the Group's financial liabilities classified as other financial liabilities are also held at amortised cost. The carrying value of all financial instruments approximates to their fair value.
Capital management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group defines capital as being share capital plus reserves. The Board of Directors monitor the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary, by issuing new shares. The Group is not subject to any externally imposed capital requirements.
Credit risk
The Group's credit risk is primarily attributable to its cash and cash equivalents. However, these are deposited at reputable financial institutions, therefore management do not consider the risk to be significant.
The carrying amount of financial assets represents the maximum credit exposure. The maximum credit exposure to credit risk at the reporting date was US$ 274,136 (2014: US$304,483).
The total of other receivables and cash and cash equivalents constitutes all of the financial assets within the IAS 39 category; loans and receivables held by the Group.
Interest rate risk
The Group's interest bearing assets comprise only cash and cash equivalents and earn interest at a variable rate. The Group has a policy of maintaining debt at fixed rates which are agreed at the time of acquiring debt to ensure certainty of future interest cash flows. The directors will revisit the appropriateness of the policy should the Group's operations change in size or nature.
The only Group borrowing at 31 December 2015 was US$nil (2014: US$233,025) owing to Black Swan FZE, 5% interest is payable on this borrowing and it is repayable any time at option of Black Swan FZE and cannot be converted into shares.
No sensitivity analysis for interest rate risk has been presented as any changes in the rates of interest applied to cash balances would have no significant effect on either profit or loss or equity.
The Group has not entered into any derivative transactions during the year under review.
Liquidity risk
The Group actively maintains cash balances that are designed to ensure that sufficient funds are available for operations and planned expansions. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. All of the Group's financial liabilities are measured at amortised cost. Details of the Group's funding requirements are set out in note 2.
Non-derivative financial liabilities, comprising borrowings, trade payables and accruals of US$200,661 (2014: US$1,250,467) are repayable within 1-3 months from the year end. The amounts represent the contractual undiscounted cash flows, balances due equal their carrying balances as the impact of discounting is not significant.
Foreign currency exchange rate risk
The Group undertakes certain transactions in foreign currencies. Hence, exposure to exchange rate fluctuations arises.
The Group and Company incurs foreign currency risk on transactions denominated in currencies other than their functional currencies. The principal currencies that give rise to this risk at Group level is United States Dollars. At the year end, the Group's exposure to currencies other than the functional currencies is minimal; accordingly any increase or decrease in the exchange rates relative to the functional currencies would not have a significant effect on the financial statements.
Fair values of financial instruments
In the opinion of the directors, the book values of financial assets and liabilities represent their fair values.
18 Commitments
Expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various authorities. These obligations are subject to periodic renegotiations. These obligations are not provided for in the financial statements and as at 31 December 2015 and 31 December 2014 are payable as follows:
2015 2014
$ $
Within one year 160,000 173,786
After one year but not more than
five years 40,678 276,532
-------- --------
200,678 450,318
-------- --------
19 Related parties
An outstanding balance of convertible loan notes issued by the Company to the Black Swan Group of GBP810,541 (US$1,267,168) were converted into 324,216,359 shares on 11 September 2015 as part of the conversion of directors' fees and expenses into equity (note 15). Richard Poulden, who is the Chairman of the Company, is also a director of Black Swan Plc and Black Swan FZE.
The Company wholly owns Wishbone Pty Ltd, an Australian entity that is engaged in the exploration of gold in Australia. The Company's investment in Wishbone Pty Ltd was US$ 164,135, as at 31 December 2015 (2014: US$ 173,584). The financial and operating results of this subsidiary have been consolidated in these financial statements.
Wishbone Pty Ltd, as at 31December 2015, has a loan outstanding from Wishbone Gold Plc of the following amounts:
2015 2014
$ $
Outstanding at 1 January 424,970 421,281
Additions during the year 70,619 3,689
-------- --------
Outstanding at 31 December 495,589 424,970
-------- --------
The following summarises the fees incurred in respect of directors and officers services for the year ended 31 December 2015 and 2014, and the amounts settled by the Company by way of share issues:
Balance Balance
31 December 2015: as at as at
Charge Settled
1 January for in 31 December
2015 the year shares 2015
$ $ $ $
Richard Poulden 57,692 36,949 (77,923) 16,718
Jonathan Harrison 34,641 19,091 (44,600) 9,132
George Cardona 28,846 18,433 (38,461) 8,819
Alan Gravett 28,846 18,433 (38,461) 8,818
Professor Michael
Mainelli 27,275 16,485 (35,874) 7,886
Clive Hyman 115,384 38,462 (153,846) -
---------- --------- ---------- ------------
Total 292,684 147,853 (389,165) 51,372
----------
Balance Balance
31 December 2014: as at as at
Charge Settled
1 January for in 31 December
2014 the year shares 2014
$ $ $ $
Richard Poulden 19,230 38,462 - 57,692
Jonathan Harrison 14,723 19,918 - 34,641
George Cardona 9,615 19,231 - 28,846
Alan Gravett 9,615 19,231 - 28,846
Professor Michael
Mainelli 10,076 17,199 - 27,275
Clive Hyman 38,462 121,678 (44,756) 115,384
---------- --------- ---------- ------------
Total 101,721 235,719 (44,756) 292,684
---------- --------- ---------- ------------
Richards Poulden's services are billed by Black Swan FZE, in which Richard Poulden, a director of the Company, has an interest for consultancy services. In addition, the services of the CFO, Clive Hyman, who is not a director of the Company, were also billed by Black Swan FZE to Wishbone Gold Plc. The company settled US$153,846 (2014: US$nil) of these fees in ordinary shares to Black Swan FZE, a company in which Richard Poulden has an interest. Travelling expenses of US$172,788 (2014: US$119,218) were incurred on behalf of the Company during the year. A total of US$nil (2014: US$169,916) is payable at the year end. US$ 172,788 (2014: US$nil) were settled through the issue of ordinary shares during the year.
Jonathan Harrison's services are billed by Easy Business Consulting Limited, in which Jonathan Harrison, a director of the Company, has an interest for consultancy services. Professor Michael Mainelli's services are billed by Z/Yen Group Limited, in which Professor Michael Mainelli, a director of the Company, has an interest for consulting services.
1. 20 Ultimate controlling party
The directors believe that there is no single ultimate controlling party.
21. Events after the reporting date
The following took place after the year end:
-- The investment in GRIT was sold on 27th May 2016 for GBP 61,882.
-- Wishbone Gold has secured a loan facility of US$3,000,000 to finance operations (the "Facility").
The terms of the Facility are that it can be drawn in multiples of US $100,000 at any time during the period of the facility and can be repaid at any time. It carries interest at 2% per annum and in addition 0.5% is payable on each trade of precious metals where the Facility is utilised either to support a letter of credit or in direct trading. The Facility expires on 6 June 2018 and is unsecured as long as no breach of the terms of the facility has occurred.
A 10% commitment fee is payable in ordinary shares of Wishbone. These shares will be issued at a price of 0.54 pence per ordinary share, being the closing mid-market price of the Company's shares on 3 June 2016.
-- On 5th February 2016 Wishbone acquired Precious Metals International Ltd ("PMI") and its wholly owned subsidiary, Black Sand FZE ("Black Sand") (together Black Sand and PMI are "the PMI Group") in an all share transaction.
Black Sand holds a gold, precious metals and gem trading licence to operate in the United Arab Emirates. Black Sand currently has agreements in place for importing gold from South America. Black Sand was established by its CEO Barret Kosh in 2014 as a successor company to Multinational Commodities FZE which had an established profitable trading record. The PMI Group is 100% owned by Solent Nominees ("Solent"), an independent Gibraltar based nominee company which holds these shares on behalf of Mr Kosh. Solent currently holds preference shares over the PMI Group which will continue to entitle them to 30% of any annual audited profits after tax in the PMI Group. These preference shares hold no voting rights and are effectively a management incentive plan.
The terms of the acquisition are an initial payment of 240,000,000 ordinary shares of 0.1p each in the Company ("Ordinary Shares") with a further payment of an additional 240,000,000 Ordinary Shares once the annual profit after tax of the PMI Group exceeds $1m. This values the initial consideration for the PMI Group at GBP648,000, based on the Company's closing mid-market. The net liabilities acquired were $5,110 leading to negative goodwill of $642,890 which would be recognised in the consolidated income statement in the next reporting year.
22. Availability of accounts
The full report and accounts are being posted on the Company's website, www.wishbonegold.com
23 Contingent Liability
There is some risk that native title, as established by the High Court of Australia's decision in the Mabocase, exists over some of the land over which Wishbone Gold Pty Limited holds tenements or over land required for access purposes.
Wishbone Gold Pty Limited is unable to determine the prospects for success or otherwise of the future claims and, in any event, whether or not and to what extent the future claims may significantly affect Wishbone Gold Pty or its projects.
There are no contingent liabilities outstanding at 31 December 2015 and 31 December 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
June 30, 2016 13:11 ET (17:11 GMT)
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