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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Emmerson Plc | LSE:EML | London | Ordinary Share | IM00BDHDTX83 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.725 | 0.70 | 0.75 | 0.738 | 0.725 | 0.725 | 3,099,575 | 08:00:26 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Crude Petroleum & Natural Gs | 18.37M | 13.22M | 0.0116 | 0.62 | 8.26M |
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TIDMEML
For Immediate Release: 7AM, 22 September 2010
EMERGING METALS LIMITED
("EML" or the "Company")
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2010
Emerging Metals Limited (AIM: EML), the mining company focused on minor and
emerging metals, today announces its final results for the year ended 31 March
2010.
Financial and Operational Highlights at Year-End:
* Equity shareholder funds increased to GBP35,867,184 (31 March 2009: GBP
26,652,271) - an increase of 34.6%;
* current assets valuation increased to GBP35,920,430 (31 March 2009: GBP
21,392,111);
* cash reserves have increased to GBP17,676,956 (31 March 2009: GBP3,757,960) -
an increase of 370%, following the receipt of GBP16,472,899 relating to the
sale of 8,917,647 Kalahari Minerals Plc shares on the 25 March 2010;
* net profit for the year was GBP8,408,770 (2009: GBP10,005,933);
* 4.53% of Kalahari Minerals Plc held at an average cost of 54.50 pence per
share (31 March 2009: 8.04% held at an average cost of 45.04 pence per
share) following sale of 8,917,647 shares at GBP1.85 on the 25 March 2010;
* 0.17% of Extract Resources Limited held at an average cost of A$1.0707 per
share (31 March 2009: 0.17% held at an average cost A$1.1945 per share);
* holdings in Kalahari Minerals and Extract Resources are valued at GBP
18,238,155 against a purchase price of GBP5,101,008;
* non-current assets valuation decreased to GBPnil (31 March 2009: GBP5,319,860)
following the directors decision to write off this investment;
* Tsumeb Option was written down to GBPnil at year end (31 March 2009: GBP
4,818,455) to anticipate the expiry at end July 2010;
* Operating expenses are below budget at GBP396,888 (2009: GBP973,230); and
* Net asset value per share at 31 March 2010 is 10.41 pence.
Post-period Highlights:
* A Special Dividend of 7.13 pence per share was paid on 18 May 2010 at a
total cost of GBP25,352,097;
* as of the 31 August 2010, the Company's cash balances were GBP10,050,679,
representing 2.83 pence per share.
Stephen Dattels, Co-Chairman of Emerging Metals, commented:
"I am extremely pleased to report such an outstanding year with a significant
return to shareholders. Your Board continues to look for similar investment
opportunities to provide comparable returns in the future."
Contact details
ENQUIRIES:
Emerging Metals Religare Capital Fox-Davies Capital GTH Communications
Limited Markets Daniel Fox-Davies Limited
Denham Eke Peter Trevelyan-Clark Toby Hall
Emily Staples Christian Pickel
+44(0)1624 639396 +44(0)207 444 0800 +44(0)207 936 5200 +44(0)203 103 3902
Chairmen's statement
Our results for the second year of operations are extremely pleasing, with a
positive comprehensive income for the year of GBP8,408,770 (2009: GBP10,005,933).
This figure includes an investment gain of GBP14,427,398 (2009: GBP10,259,493), an
exchange loss of GBP61,521 (2009: Profit GBP798,146) and impairment losses on the
write off of the Tsumeb land options and related capitalised intangible fixed
asset costs of GBP5,319,860 (2009: GBPnil). Following the implementation of
operating efficiencies, the expenses are below budget at GBP396,888 (2009: GBP
973,230).
As a result, equity shareholder funds have increased to GBP35,867,184 (2009: GBP
26,652,271), a rise of 34.6%. Investments stand at GBP18,238,155 (2009: GBP
22,947,634), which relates to our remaining holdings in Kalahari Minerals and
Extract Resources. The entire value of the Tsumeb Option was written off during
the period under review (2009: GBP5,319,860) due to the imminent expiry at end
July 2010.
Our cash reserves have increased to GBP17,676,956 (2009: GBP3,757,960) - a growth
of 370%, following the receipt of GBP16,472,899 relating to the sale of 8,917,647
Kalahari Minerals Plc shares on the 25 March 2010.
Our share premium has increased to GBP15,245,789 (2009: GBP14,560,530), which
includes the exercise of share options by Ambrian Investments for 13,705,179
shares at 5 pence per share on the 31 March 2010.
Tsumeb Project
During the past twelve months, Emerging Metals Limited ("EML") continued its
studies and test work on the Tsumeb Slag stockpiles to determine the viability
of extracting the contained metals, principally germanium but also zinc and
gallium. As the market conditions for these metals remained extremely weak
throughout the year, the Company minimised its evaluation and test work costs
and reassessed the market conditions on a monthly basis to evaluate the
continuing scope and viability of this project. During March 2010, the
Directors decided that because of the continuing weak market conditions, better
returns would be achievable in the short term by looking to build exposure in
Investment Metals and accordingly decided to exit the Tsumeb Slag Stockpiles
Project altogether.
The exit cost including the land option costs and all associated capitalised
survey, development and professional costs was GBP5,319,860.
Investments
During the period under review, the Company invested a further GBP2.6 million in
Kalahari Minerals, at an average cost of GBP1.287 per share.
On the 26 March 2010, your Board announced that it had entered into an
Agreement to sell 50% of the holding of Kalahari Shares to Nippon Uranium
Resources (Australia) Proprietary Limited, a wholly owned subsidiary of Itochu
Corporation of Japan. The number of shares sold was 8,917,647 at a price 185
pence per share, and the Company received gross proceeds of GBP16,497,647
resulting in an investment gain of GBP11,612,665.
Under the terms of the Agreement, the Directors conditionally agreed to sell
the remaining 50% holding at the same price of 185 pence per share, the balance
of the Company's holdings of Kalahari Shares subject to Shareholder approval
being obtained.
After the period under review and following approval from Shareholders at the
EGM held on the 16 April 2010, the Company completed the sale of the remaining
8,917,647 Kalahari Shares at 185p on the 26 April 2010, generating a further
investment gain of GBP11,612,665.
The Board declared a Special Dividend of 7.13 pence per share on 16 April 2010
which was paid on 18 May 2010, being an aggregate amount of GBP25,352,097.
The Company has subsequently also disposed of its holding in Extract Resources
Limited generating additional investment gains of GBP1,251,377.
Investing Policy
It remains the intention of the Board to continue to broadly pursue the
existing business strategy of the Company as approved by shareholders at the
general meeting of the Company on 10 April 2009. Following the sale of shares
in Kalahari Minerals, the Company has been reclassified as an "investing
company" (as defined by AIM Rules) and the effective business strategy of the
Company has since been re-named its Investing Policy.
The Board anticipates that the cash it has retained will provide sufficient
working capital for the Directors to continue to develop opportunities for
investment in situations which are, in their opinion, undervalued or capable of
producing a satisfactory return and the Board intends therefore to continue to
implement its Investing Policy.
The Company plans to target exposure to Investment Metals which include all
metals other than base metals (such as copper and lead, but excluding for these
purposes zinc) and bulk commodities metals (such as iron, potassium and
aluminium) in addition to minor metals. Exposure to Investment Metals will be
achieved by a number of methods, including but not limited to the acquisition
or purchasing of the following:
* physical quantities of Investment Metals commodities,
* interests in Investment Metals projects, such as direct licenses or rights
over such projects or licenses,
* strategic minority equity stakes in publicly traded or private companies
with a focus on Investment Metals, and
* positions in securities or any other interest (including but not limited to
loan capital, joint ventures, partnerships, convertibles or other financial
instruments as the Directors deem appropriate).
All of these opportunities may include interests in exploration permits and
licences, mining projects under development, operating mines, smelters, slag
stockpiles, refineries, and associated activities. Such activity may be
undertaken in the ordinary course of its business and as an alternative to
holding cash reserves on a day-to-day basis. The Directors continue to believe
that current market conditions will provide good opportunities for a positive
return from the above investments where prices of the Investment Metals to
which the Company has exposure increase. The Directors do not envisage that the
Company's investment portfolio will be leveraged initially; however, this
position may be reviewed should the Board become aware of available and
commercially prudent financing arrangements. The Company will consider cross
holdings of shares in circumstances that would benefit its broader investment
strategy.
In evaluating possible additional opportunities in Investment Metals the
Directors will take into account the goal of achieving a diversified exposure
to different Investment Metals as well as the market outlook for individual
elements, although there will be no maximum exposure limits. The Directors
estimate that investments will be held for periods of up to five years.
The Directors believe that their collective experience in the areas of mining,
acquisitions, accounting and corporate and financial management, together with
the opinion of expert consultants in the evaluation and exploitation of
Investment Metals opportunities, will enable the Company to achieve its
objectives. Furthermore the Directors intend to take an active role in the
management and development of any future projects.
Finally, we would like to express our appreciation to the shareholders for
their continued support.
Stephen Dattels James Mellon
Co-chairman Co-chairman
Statement of comprehensive income
For the year ended 31 March 2010 Notes 2010 2009
GBP GBP
Income
Exchange (losses)/gains (61,521) 798,146
Unrealised gains on investments 2,814,733 10,259,493
Realised gains on investments 11,612,665 -
------ ------
14,365,877 11,057,639
Operating expenses
Directors' fees 8 (241,005) (344,899)
Other costs 3 (396,888) (973,230)
Impairment losses 5 (5,319,860) -
------ ------
(5,957,753) (1,318,129)
------ ------
Profit before interest income 8,408,124 9,739,510
Interest income 1(e) 646 266,423
------ ------
Profit before taxation 8,408,770 10,005,933
Taxation 9 - -
------ ------
Profit for the year 8,408,770 10,005,933
------ ------
Other comprehensive income - -
------ ------
Total comprehensive income for the year 8,408,770 10,005,933
------ ------
Earnings per share 15 0.0254 0.0306
------ ------
Diluted earnings per share 15 0.0237 0.0285
------ ------
The Directors consider that the Company's results derive from continuing
activities.The notes on pages 14 to 26 form part of these financial statements.
Statement of financial position
as at 31 March 2010 Notes 2010 2009
GBP GBP
Assets
Non-current assets
Land options 1(f),4 - 4,818,455
Intangible fixed assets 1(c),5 - 501,405
------ ------
- 5,319,860
------ ------
Current assets
Investments 1(f) 18,238,155 17,627,774
Trade and other receivables 1(f) 5,319 6,377
Cash and cash equivalents 1(f) 17,676,956 3,757,960
------ ------
35,920,430 21,392,111
------ ------
Total assets 35,920,430 26,711,971
------ ------
Equity and liabilities
Capital and reserves
Share capital 6 - -
Share premium 6 15,245,789 14,560,530
Share option reserve 7,14 1,201,674 3,504,144
Equity share based payment reserve 1(j) 201,124 80,240
Accumulated profit 19,218,597 8,507,357
------ ------
Total equity 35,867,184 26,652,271
------ ------
Current liabilities
Trade and other payables 53,246 59,700
------ ------
Total liabilities 53,246 59,700
------ ------
------ ------
Total equity and liabilities 35,920,430 26,711,971
------ ------
The notes on pages 14 to 26 form part of these financial statements.
Statement of changes in equity
for the year ended 31 March 2010
Share Share Share Share Accumulated Total
Premium Option Based Capital Profits
Reserves Option
Payments
GBP GBP GBP GBP GBP GBP
Balance at 31 March 11,831,373 3,504,144 - - (1,498,576) 13,836,941
2008
--------- ---------- -------- ---- ------------ ----------
Total comprehensive
income for the year
- - - - 10,005,933 10,005,933
Profit
- - - - - -
Other comprehensive
income for the year - - - - - -
Transactions with
owners, recorded
directly in equity
Contributions by and
distributions to owners
Shares issued 2,729,157 - - - - 2,729,157
Share based payment - - 80,240 - - 80,240
reserve
------------ ------ --------- --------- ------- ---------
Total contributions by
and distributions to
owners 2,729,157 - 80,240 - 10,005,933 12,815,330
------------ ------ --------- --------- ---------- -----------
Balance at 31 March 14,560,530 3,504,144 80,240 - 8,507,357 26,652,271
2009
---------- --------- --------- ---------- --------- -----------
Share Share Share Share Accumulated Total
Premium Option Based Capital Profits
Reserves Option
Payments
GBP GBP GBP GBP GBP GBP
Balance at 31 March 14,560,530 3,504,144 80,240 - 8,507,357 26,652,271
2009
---------- --------- ---------- ---------- ---------- -----------
Total comprehensive
income for the year
- - - - 8,408,770 8,408,770
Profit
- - - - - -
Other comprehensive
income for the year
Transactions with
owners, recorded
directly in equity
Contributions by and
distributions to
owners
Exercise of share 685,259 (2,302,470) - - 2,302,470 685,259
options
Share based payment - - - 120,884 - 120,884
reserve
------- ----------- -------- ------------ ---------- --------
Total contributions by
and distributions to
owners 685,259 (2,302,470) 120,884 - 10,711,240 9,214,913
------- ----------- ------- ------------ ----------- ---------
Balance at 31 March 15,245,789 1,201,674 201,124 - 19,218,597 35,867,184
2010
---------- --------- ------- ------------ ----------- ----------
The notes on pages 14 to 26 form part of these financial statements.
Statement of cash flows
for the year ended 31 March 2010 Notes 2010 2009
GBP GBP
Net cash outflow from operating activities 10 (583,280) (157,672)
Cash flows from investing activities
Amount paid in cash for intangible fixed - (501,405)
assets
Amount paid in cash for investments (2,655,882) (7,368,281)
Proceeds on sale of investments 16,472,899 -
Net cash inflow/(outflow) from investing ------ ------
activities
13,817,017 (7,869,686)
------ ------
Cash flows from financing activities
Increase in share premium 685,259 2,729,157
Net cash inflow from financing activities ------ ------
685,259 2,729,157
------ ------
Increase / (decrease) in cash and cash 13,918,996 (5,298,201)
equivalents
Cash and cash equivalents at beginning of 3,757,960 9,056,161
year
------ ------
Cash and cash equivalents at the end of 17,676,956 3,757,960
year
------ ------
The notes on pages 14 to 26 form part of these financial statements.
Notes(forming part of the financial statements for the year ended 31 March 2010)
1 Accounting policies
Emerging Metals Limited is a Company domiciled in the British Virgin Islands.
The financial statements incorporate the principal accounting policies set out
below.
a. Statement of compliance
The financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) and the interpretations adopted by the
International Accounting Standards Board (IASB).
b. Basis of preparation
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision only affects that period or in the period
of the revision and future periods if the revision affects both current and
future periods. The key estimate and judgement made by the Directors is the
fair value of the land option.
A number of new standards, amendments to standards and interpretations are not
yet effective for the year, and have not been applied in preparing these
financial statements:
New/Revised International Accounting Standards / Effective date
International Financial Reporting Standards (IAS/
IFRS) (accounting
periods
commencing
after)
IAS 1 Presentation of Financial Statements (Revised 1 January 2010
2009)
IAS 7 Statement of Cash Flows (Revised 2009) 1 January 2010
IAS 36 Impairment of Assets (Revised 2009) 1 January 2010
IFRS 2 Share-based Payment - Amendments relating to 1 January 2010
group cash-settled share-based payment transactions
IFRS 5 Non-current Assets Held for Sale and 1 July 2009
Discontinued Operations (Revised 2008)
IFRS 5 Non-current Assets Held for Sale and 1 January 2010
Discontinued Operations (Revised 2009)
IFRS 8 Operating Segments (Revised 2009) 1 January 2010
IAS 24 Related Party Disclosures - Revised definition 1 January 2011
of related parties
IFRS 9 Financial Instruments 1 January 2013
IFRIC Interpretation
IFRIC 19 Extinguishing Financial Liabilities with 1 July 2010
Equity Instruments
The Directors do not expect the adoption of the other standards and
interpretations to have a material impact on the Company's financial statements
in the period of initial application.
c. Intangible assets
Exploration rights and associated survey costs are capitalised as incurred and
reviewed annually for impairment and are carried at cost less accumulated
impairment losses.
d. Impairment
The carrying amounts of the Company's assets not carried at fair value through
profit and loss are reviewed at least at each statement of financial position
date to determine whether there is any indication of impairment. If there is
any indication that an asset may be impaired, its recoverable amount is
estimated. The recoverable amount is the higher of its net selling price and
its value in use.
In assessing value in use, the expected future cash flows from the asset are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset.
An impairment loss would be recognised whenever evidence exists that the
carrying value is not recoverable. For purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately identifiable
cash flows.
An impairment loss is recognised and charged to earnings if the discounted
expected future cash flows are less than the carrying amount. Fair value is
estimated by discounting the expected future cash flows using a discount factor
that reflects the market rate for a term consistent with the period of expected
cash flows.
For an asset that does not generate cash inflows that are largely independent
of those from other assets, the recoverable amount is determined for the
cash-generating unit to which the asset belongs. An impairment loss is
recognised in the income statement whenever the carrying amount of the
cash-generating unit exceeds its recoverable amount.
A previously recognised impairment loss is reversed if the recoverable amount
increases as a result of a change in the estimates used to determine the
recoverable amount, but not to an amount higher than the carrying amount that
would have been determined (net of depreciation) had no impairment loss been
recognised in prior years.
e. Interest Income
Interest income is accrued on a time proportion basis, by reference to the
principal outstanding and the effective interest rate applicable.
f. Financial instruments
Measurement
Financial instruments are initially measured at cost, which includes
transaction costs. Subsequent to initial recognition these instruments are
measured as set out below.
Land options
Land options are stated at fair value, as estimated by the Directors. This is
estimated to be the current market value of the options. There will be no
amortisation of the premium paid.
Investments
Investments relate to holdings in two entities which were acquired to realise
gains from fluctuations in the prices or margins of traders and are accounted
for on a trading basis. These assets are valued at fair value based on quoted
bid prices. Any realised and unrealised gains and losses are presented within
`Other Income'.
Trade and other receivables
Trade and other receivables originated by the Company are stated at amortised
cost less impairment losses.
Cash and cash equivalents
Cash and cash equivalents are measured at amortised cost and due on demand.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost.
Non-derivative financial liabilities are recognised at amortised cost.
g) Provisions
Provisions are recognised when the Company has a present legal or constructive
obligation as a result of past events, for which it is probable that an outflow
of economic benefits will occur, and where a reliable estimate can be made of
the amount of the obligation.
Where the effect of discounting is material, provisions are discounted. The
discount rate used is a pre-tax rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the
liability.
h) Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the statement of
financial position date. All differences are taken to the statement of
comprehensive income.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date
of the transaction.
i) Share based payments
Under IFRS 2 `Share Based Payments', the Company determines the fair value of
options issued to Weatherly International plc as part consideration of the land
option (as per the Tsumeb Option Agreement (note 4)) share option reserves in
the statement of financial position.
The Company determines the fair value of options issued to Directors
remuneration and recognises the amount as an expense in the statement of
comprehensive income with a corresponding increase in equity.
j) Directors equity share based payments
The fair value of the incentive granted is recognised as an expense with a
corresponding increase in equity. The fair value is measured at the grant date
and spread over the period during which the directors become unconditionally
entitled to the incentives.
2 Operating segments
It is the Directors' opinion that the Company operates within a single segment.
3 Other costs
2010 2009
GBP GBP
Professional fees 305,560 824,854
Audit fee 19,025 15,000
Travel and transport expenses 3,045 43,618
Office expenses 69,258 89,758
------- -------
396,888 973,230
------- -------
4 Land option
The land option comprises the Tsumeb Option as described below and is stated at
fair value. Fair value, as estimated by the Directors, as at 31 March 2010 is GBP
nil (2009: GBP4,818,455). Please refer to note 5.
On 28 January 2008, the Company entered into an amended and restated option
agreement with Ongopolo Mining Limited (OML), a company incorporated in Namibia
(the "Tsumeb Option Agreement") under which the Company was granted an option
to acquire all right, title and interest in and to the Tsumeb Slag Stockpiles
(the "Tsumeb Option") in consideration of:
i. the payment by the Company to OML, or as it directs, of GBP1,421,000 in cash;
ii. the issue and allotment of 21,899,698 Ordinary Shares credited as fully
paid to Weatherly International plc (Weatherly); and
iii. the grant to Weatherly of an option over 13,705,179 Ordinary Shares.
The consideration paid for the Tsumeb Option comprised GBP1,421,000 in cash,
21,899,698 ordinary shares issued as at zero par value to Weatherly at a cost
of GBP0.05 per share. An option was also granted to Weatherly to subscribe for up
to 13,705,179 ordinary shares at GBP0.05 per share, exercisable at any time for
five years from the date of completion of the Tsumeb Option Agreement.
Land option consideration
GBP
Cash consideration 1,421,000
Shares issued at GBP0.05 per share 1,094,985
Fair value of share options 2,302,470
-------
4,818,455
-------
The grant of the Tsumeb Option was subject to a number of conditions, which
were satisfied on 28 January 2008. The exercise term of the Tsumeb Option (the
"Tsumeb Option Period") shall expire on the 30 month anniversary of the date of
the satisfaction of the conditions, such period comprising a total of 24 months
for completion of an initial programme of work, plus six months for a decision
by the Company to proceed with commercial production from any portion of the
Tsumeb Slag Stockpiles and announcement of that decision to AIM.
Under the Tsumeb Option Agreement, OML provides the Company with a number of
warranties regarding the Tsumeb Slag Stockpiles. In particular, OML warrants to
the Company that:
* it has the requisite power and authority to enter into and perform the
Tsumeb Option Agreement;
* it is, and will remain during the Tsumeb Option Period, the legal and
beneficial owner of 100 per cent of the Tsumeb Slag Stockpiles; and
* no further consent, approval or authorisation of any governmental agency or
other person is required by it for the entry into and performance of its
obligations under the Tsumeb Option Agreement.
Under the Tsumeb Option Agreement, OML was required to provide the Company with
a legal opinion from counsel duly qualified to practice in Namibia, confirming
OML's 100 per cent. ownership of the Tsumeb Slag Stockpiles (the "OML Legal
Opinion"). Under the Tsumeb Option Agreement, if OML was unable to supply the
OML Legal Opinion, OML and the Company would enter a new agreement, agreed in
good faith between the parties, establishing a contractual relationship between
OML and the Company that would ensure that the Company was placed in the same
economic position as was the intention under the Tsumeb Option Agreement - with
the Company bearing the cost incurred and receiving the profit or other benefit
arising out of the Tsumeb Slag Stockpiles. Under the Tsumeb Option Agreement,
OML and the Company agreed that, in the event of termination of the Tsumeb
Option Agreement, and in circumstances where
the parties could not legally enter or enforce the Toll Gate Agreement for
whatever reason, the parties agreed to take all such steps as necessary to
return each other to the legal and financial position each was in prior to the
execution of the Tsumeb Option Agreement. In particular, under the Tsumeb
Option Agreement it was agreed that:
* Weatherly and/or OML shall return to the Company all consideration paid
under the Tsumeb Option Agreement together with interest at 2 per cent
above the base rate from time to time of Barclays Bank PLC per annum
accruing monthly;
* Weatherly and/or OML shall return, transfer or cancel as directed by the
Company all Ordinary Shares issued and allotted to Weatherly or OML under
the Tsumeb Option Agreement;
* Weatherly and/or OML shall return, cancel and/or extinguish all and any
options over Ordinary Shares granted to Weatherly or OML pursuant to the
Tsumeb Option Agreement; and
* OML shall pay the reasonable costs of the Company incurred in the
preparation, negotiation and completion of the obligations under the Tsumeb
Option Agreement.
5 Impairment losses
The impairment losses recognised in the statement of comprehensive income, as a
separate line item within operating profit are as follows:
2010 2009
GBP GBP
Intangible fixed assets 501,405 -
Cost of land options 4,818,455 -
------ ------
5,319,860 -
------ ------
During the year ended 31 March 2010, land options acquired under an agreement
with Ongopolo Mining Limited (OML) on 28 January 2008 for mineral extraction
rights to the Tsumeb Slag Stockpiles in Namibia were tested for impairment
following a worldwide decrease in the market price of germanium. In addition
capitalised intangible fixed asset costs relating to development, survey and
consultancy costs along with associated professional fees for the Tsumeb site
were also tested for impairment. It was the Directors' opinion that as at 31
March 2010, the carrying value of these assets were not deemed recoverable and
exceeded their fair value and that the current carrying values be written off
at the year end anticipating the expiry at the end of July 2010.
6 Share capital and share premium
2010 2009
GBP GBP
Authorised
The Company is authorised to issue an - -
unlimited number of no par value shares of
a single class
Issued
344,464,479 (2009: 330,759,300 ordinary - -
shares of GBP0.00 each) ordinary shares of GBP
0.00 each.
Share premium
1 share at incorporation - -
71,528,234 shares at GBP0.0001 per share 7,153 7,153
214,584,704 shares at GBP0.0500 per share 10,729,235 10,729,235
21,899,698 shares at GBP0.0500 per share 1,094,985 1,094,985
22,746,663 shares at GBP0.1200 per share 2,729,157 2,729,157
13,705,179 shares at GBP0.0500 per share 685,259 -
-------- --------
Total 15,245,789 14,560,530
-------- --------
The shares issued during the year with share premium of GBP685,259 relate to the
exercise of share options. Please refer to note 7.
7 Share based payments
The following share options are in issue as at 31 March 2010:
* 21,899,698 shares at GBP0.05 per share to the Founders issued on 28 January
2008.
The following table lists the inputs to the models used for the year ended 31
March 2010:
2010 2009
Dividend yield (%) - -
Expected volatility (%) 65 65
Risk-free interest rate (%) 5 5
Share price at grant date 0.05 0.05
Share price (market value) 0.20 0.20
Exercise price 0.05 0.05
All options were issued in prior periods. No options lapsed or were cancelled
during the year.
On 29 March 2010 the Company issued 13,705,179 ordinary shares at no par value
to Ambrian Investments Limited in respect of an exercise of share options.
In summary, as at 31 March 2010, the value of the share options in issue is:
Name Options in Date Granted Vesting Option Value
issue Period Valuation
(Years) Per Share
GBP GBP
Founders 7,152,823 21 January - 0.168 1,201,674
2008
------
Total 1,201,674
------
8 Directors' Fees
2010 2009
GBP GBP
Mitchell Alland 70,676 180,586
Denham Eke 95,329 89,313
Stephen Dattels 25,000 25,000
James Mellon 25,000 25,000
Patrick Weller 25,000 25,000
------ ------
Total 241,005 344,899
------ ------
The Company has granted equity share-based payments following a resolution
passed in November 2008 for the Directors of the Company to accept 50% of their
remuneration in the form of new shares issued at mid-market prices.
To date no shares have been issued to the Directors under this scheme and as
such is accounted for in a share based payment reserve at the year end.
The Company has no employees other than the Directors.
9 Taxation
The Company is exempt from the provisions of the Income Tax Ordinance of the
British Virgin Islands.
10 Notes to the cash flow statement
Reconciliation of profit for the year to net outflow from operating activities
2010 2009
GBP GBP
Profit for the year 8,408,770 10,005,933
Adjustment for:
Decrease in trade and other receivables 1,058 29,978
Decrease in trade and other payables (6,454) (14,330)
Share based payment charge 120,884 80,240
Unrealised gains on investments (2,814,733) (10,259,493)
Impairment losses 5,319,860 -
Realised gains on investments (11,612,665) -
------- -------
Net cash outflow from operating activities (583,280) (157,672)
------- -------
11 Financial risk management
The Company's financial instruments are exposed to a number of risks as
detailed below:
Credit risk
Credit risk is the risk of financial loss to the Company if a counter party to
a financial instrument fails to meet its contractual obligations.
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
2010 2009
GBP GBP
Cash and cash equivalents 17,676,956 3,757,960
------ ------
The Company invests available cash and cash equivalents with an Isle of Man
licensed bank, which has a strong history on the Island.
The Company has a nominal level of debtors, and as such the Company is able to
determine that credit risk is considered minimal in relation to debtors.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset.
Liquidity risk is managed by the Company by means of cash flow planning to
ensure that future cash requirements are anticipated. All liabilities are due
within one month.
Market price risk
Market price risk is the risk that changes in market prices such as foreign
exchange rates, interest rates and equity price will affect the Company's
income or the value of its holdings of financial instruments.
The Company is exposed to market price risk to the extent that it holds a land
option for which no developed market exists. Therefore the Company might not be
able to sell such a stake quickly at close to estimated fair value.
All investments present a risk of loss of capital due to unexpected and
unforeseen events in the financial markets, and these can have a material and
unpredictable impact on the portfolio value. The maximum risk resulting from
the portfolio is equivalent to their fair value.
2010 2009
GBP GBP
Land option - 4,818,455
Intangible fixed assets - 501,405
Investments 18,238,155 17,627,774
------ ------
Interest rate risk
The Company holds current assets in the form of cash at bank. As a result, the
Company is subject to risk due to fluctuations in the prevailing level of
market interest rates. The weighted average interest rate at 31 March 2010 was
0.0152% (31 March 2009: 1.922%) and all balances are held on demand.
The Directors do not regard that interest income is a core revenue stream of
the Company and therefore fluctuations in interest rates will not adversely
impact the continuing operations of the Company.
Fair values of financial instruments
At 31 March 2010 the carrying amounts of cash resources, trade and other
receivables, and trade and other payables approximate their fair values due to
their short-term maturities.
12 Significant shareholdings
Except for the interests disclosed in this note, the Directors are not aware of
any holding of Ordinary Shares as at the date of these accounts representing 3%
or more of the issued share capital of the Company:
Number of Ordinary Percentage of
Shares Issued Capital
Vidacos Nominees Limited 103,256,500 29.98%
Roy Nominees Limited 54,087,204 15.70%
HSBC Global Custody Nominee (Uk) 36,420,833 10.57%
Lynchwood Nominees Limited 13,375,000 3.88%
Directors interests
Stephen Dattels 2 19,792,504 5.75%
James Mellon 1, 3 28,205,684 8.19%
Notes to Directors' Interests:
1 Denham Eke is a director of Galloway Limited, a company which is indirectly
wholly owned by the trustee of a settlement under which James Mellon has a
life interest.
2 Stephen Dattels' entire shareholding of 19,792,504 shares is held by Regent
Mercantile Holdings Limited, a company which is owned by the trustee of a
discretionary trust under which Stephen Dattels is a beneficiary
3 James Mellon's entire shareholding is held by Galloway Limited, a company
which is indirectly wholly owned by the trustee of a settlement under which
James Mellon has a life interest.
13 Related party transaction
The Company has entered into a service agreement with Burnbrae Limited for the
provision of administrative and general office services. Mr James Mellon and Mr
Denham Eke are both directors of Burnbrae Limited and the Company. During the
year the Company paid GBP32,162 (2009: GBP24,609) under this agreement and as at 31
March 2010 an amount of GBP8,488 (2009: GBPnil) was owed to Burnbrae Limited.
During the year the Company paid GBP55,872 (2009: GBP87,567) and issued 943,396
options to Mr James Mellon and Mr Denham Eke in respect of Directors fees.
14 Subsequent events
i. On 13 April 2010 the Company announced that it had received exercise
notices and payment in respect of all 7,152,823 outstanding 5p options and
has accordingly issued 7,152,823 new ordinary shares of nil par value for a
total consideration of GBP357,641.
ii. On 16 April 2010, and as a result of a Shareholders Meeting, it was
announced that the Company was to distribute a Special Dividend to
qualifying shareholders of 7.13 pence per qualifying share.
The Special Dividend was paid on 18 May 2010 to all Qualifying Shareholders on
the register of members of the Company at the Record Date, which was 30 April
2010.
iii. On 16 April 2010, and as a result of a Shareholders Meeting, it was
announced that the Completion of the sale of the Company's remaining
8,917,647 Kalahari Shares at 185p per share had been approved. Under an
agreement with Nippon Uranium Resources (Australia) Proprietary Limited
dated 25 March 2010 the Company had agreed terms for the disposal of the
second tranche of 8,917,647 Kalahari Minerals plc shares (being the entire
balance of Emerging Metals Limited's holding) for a gross cash
consideration of GBP16,497,647. The fair value of the Company's investment as
at 31 March 2010 was GBP16,497,647.
iv. On 20 April 2010 the Company allotted 3,952,084 new ordinary shares of nil
par value in lieu of salary and fee payments to Directors in accordance
with the announcement of final results made on 8 July 2009.
The new shares were issued in respect of 50% of Directors' remuneration at
month end mid-market prices/exchange rates (USD/GBP) in respect of the period
November 2008 to March 2010 inclusive. The volume weighted average issue price
in respect of each Director was approximately 5.089p.
v. On 19 July 2010 the Company disposed of its entire holding of 368,721
shares in Extract Resources Limited to Nippon Uranium Resources (Australia)
Proprietary Limited at a price of A$7.00 per share. The gross proceeds of
the sale were A$2,581,047, approximately GBP1.49 million.
vi. On 28 July 2010 the Tsumeb Option, as referred to in note 4, expired not
being exercised by the Company. As at 31 March 2010, the fair value of the
Tsumeb Option was GBPnil.
15 Basic and diluted earnings per share
The calculation of basic earnings per share of the Company is based on the net
profit attributable to shareholders for the year of GBP8,408,770 (2009: GBP
10,005,933) and the weighted average number of shares of 330,759,300 (2009:
326,833,164) in issue during the year.
The calculation of diluted earnings per share of the Company includes the
weighted average number of share options and shares to be issued in respect of
share based payments (see note 1(j)) for the year.
2010 2009
GBP GBP
Retained Earnings for basic and diluted 8,408,770 10,005,933
earnings per share:
------- -------
2010 2009
Weighted average number of shares for basic 330,759,300 326,833,164
earnings per share
Effect of dilutive share options 24,242,379 24,252,214
Weighted average number of shares for -------- --------
diluted earnings per share
355,001,679 351,085,378
-------- --------
END
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