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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| European Metals Holdings Limited | LSE:EMH | London | Ordinary Share | VGG3191T1021 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2.50 | 13.33% | 21.25 | 21.00 | 21.50 | 21.25 | 18.65 | 18.75 | 578,963 | 10:36:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Metal Ores,nec | 1.12M | -5.93M | -0.0286 | -7.43 | 44.06M |
From Apr 2019 to Apr 2024
TIDMEMH
RNS Number : 9637H
European Metals Holdings Limited
16 March 2018
16 March 2018 For immediate release
EUROPEAN METALS HOLDINGS LIMITED
Unaudited Interim Financial Report
For the six months ended 31 December 2017
The Directors of European Metals Holdings Limited ("European Metals" or "the Company") (ASX & AIM: EMH), the specialty lithium exploration and development company with assets in the Czech Republic, are pleased to release its interim unaudited financial report for the half year ended 31 December 2017.
A copy of the European Metals Half Year Report is also available on the Company's website at www.europeanmet.com.
ENQUIRIES:
Hot Features
Premium
European Metals Holdings
Limited Tel: +61 (0) 419 996
Keith Coughlan, Chief 333
Executive Officer Email: keith@europeanmet.com
Tel: +44 (0) 20 7440
Kiran Morzaria, Non-Executive 0647
Director
Tel: +61 (0) 8 6245 2057
Julia Beckett, Company Email: julia@europeanmet.com
Secretary
Beaumont Cornish (Nomad Tel: +44 (0) 20 7628
& Broker) 3396
Michael Cornish Email: corpfin@b-cornish.co.uk
Roland Cornish
The information contained within this announcement is considered to be inside information, for the purposes of Article 7 of EU Regulation 596/2014, prior to its release. The person who arranged for the release of this announcement on behalf of the Company was Keith Coughlan, Director.
DIRECTORS' REPORT
Your Directors submit the financial report of the consolidated group for the half year ended 31 December 2017.
Directors
The names of the directors who held office during or since the end of the half-year.
Mr Keith Managing Director, Appointed 6 September Coughlan CEO 2013 Mr David Non-Executive Appointed 6 March 2014 Reeves Chairman Mr Richard Executive Director Appointed 27 June 2017 Pavlik Mr Kiran Non-Executive Appointed 10 December Morzaria Director 2015
Results of Operations
The consolidated loss for the half year ended 31 December 2017 amounted to $1,877,730 (2016: $3,164,185 loss).
Review of Operations
During the period the Company focused on continued progress in the development of the globally significant Cinovec Lithium/Tin Project in Czech Republic ("the project" of "Cinovec").
Highlights in the period include:
Project Development
During the period the Company undertook a six core-hole infill drilling program at Cinovec.
A total of 2,697.1m was completed on time and without loss time accidents. Infill drilling was undertaken to the southwest section of the deposit, targeting two 'gaps' in the resource model that could potentially be targeted for mining in the initial years, and upgrading part of the resource from the Inferred category to the higher confidence Indicated category. The results exceeded expectations.
This drilling campaign culminated in the Company announcing a further upgrade of its JORC Compliant Indicated Mineral Resources at Cinovec on November 28(th) , confirming its status as the largest lithium resource in Europe.
On December 19(th) , the Company announced that the Cinovec NorthWest Resource had been added to the Czech State resource register. The NorthWest Resource now joins the Cinovec South Resource that was added to the resource register in February 2017. This is the first step in the process for the granting of a mining permit
Operations
Craig Reimer was appointed to the position of DFS Manager during the quarter ending September 2017. Craig has over 25 years' experience in project management, engineering management and business development, and has delivered successful international mining projects for previous clients. Craig is a Mechanical Engineer.
The Company also appointed Grant Harman as Metallurgical Consultant to the DFS. Grant is one of the world's foremost lithium metallurgists and played a significant role in the Company's successful Pre-Feasibility Study.
Significant Change in State of Affairs
On 27 June 2017 the Company announced the engagement of 6466 Investments Pty Ltd for an interim funding facility to maintain momentum in developing the Project. Following the first funding facility drawdown on 30 June 2017, the Company issued a further 1,463,676 CDIs, over 4 drawdowns of AUD 250,000 each, raising a total of AUD 1 million.
On 29 November 2017 the Company announced a capital raising of GBP 2,281,000 (approximately AUD 4 million (before costs) via subscriptions to predominantly UK based sophisticated investors. The raising was completed on 20 December 2017 through an issue of 6,517,142 CDIs at a price of 35p or 61.5 cents.
Following the approval by shareholders at the 2017 Annual General Meeting for the European Metals Holdings Limited Employee Securities Incentive Plan ("Plan"), 1,650,000 CDIs were issued to the Directors of the Company at A$0.725 per share. The CDIs issued under the Plan are in escrow until 14 December 2018.
Tenement Schedule
Tenement Interest Acquired/Disposed Interest
at beginning at end of
of Quarter Quarter
----------- -------------- ------------------ -----------
Cinovec 100% N/A 100%
----------- -------------- ------------------ -----------
Cinovec 2 100% N/A 100%
----------- -------------- ------------------ -----------
Cinovec 3 100% N/A 100%
----------- -------------- ------------------ -----------
Significant events after the reporting date
On 2 March 2018, the Company announced that it had received correspondence from Minister Industry and Trade of the Czech Republic, purporting to terminate the Memorandum of Understanding dated 2 October 2017 between the Company and the Ministry of Industry and Trade.
There were no other significant events after the reporting period.
Auditor's Independence Declaration
The auditor's independence declaration for the half year ended 31 December 2017 has been received and can be found on page 5 of the financial report.
This report of the Directors is signed in accordance with a resolution of the Board of Directors.
Keith Coughlan
MANAGING DIRECTOR
16 March 2018
AUDITOR'S INDEPENCE DECLARATION
16 March 2018
Board of Directors
European Metals Holdings Limited
Suite 12, Level 1
11 Ventnor Avenue
WEST PERTH WA 6005
Dear Sirs
RE: European Metals HOLDINGS LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of European Metals Holdings Limited.
As Audit Director for the review of the financial statements of European Metals Holdings Limited for the six months ended 31 December 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours faithfully
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir R Tirodkar
Director
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF YEARED 31 DECEMBER 2017
Note 31 December 31 December
2017 2016
$ $
Revenue - Interest income 1,592 8,484
Other Income - 852
Professional fees (167,288) (98,704)
Audit and compliance fees (13,175) (15,066)
Advertising and promotion (28,116) (84,146)
Share based payment expense 5 (1,179,212) (2,671,444)
Depreciation (267) (594)
Employee benefits (225,670) (142,285)
Travel and accommodation (62,485) (36,380)
Share registry fees (79,741) (60,317)
Insurance (11,668) (7,737)
Rent and utilities (39,619) (41,457)
Other administration expenses (72,081) (15,391)
------------ ------------
Loss before income tax (1,877,730) (3,164,185)
Income tax expense - -
------------ ------------
Loss for the period (1,877,730) (3,164,185)
Other comprehensive income
Items that will not be - -
reclassified to profit
or loss
Items that may be reclassified
subsequently to profit
or loss
- Exchange differences
on translating foreign
operations 431,736 (82,527)
------------ ------------
Other comprehensive income/(loss)
for the period, net of
tax 431,736 (82,527)
Total comprehensive loss
for the period (1,445,994) (3,246,712)
============ ============
Net Loss attributable to:
* members of the parent entity (1,877,730) (3,164,185)
(1,877,730) (3,164,185)
============ ============
Total Comprehensive loss
attributable to:
* members of the parent entity (1,445,994) (3,246,712)
(1,445,994) (3,246,712)
============ ============
Basic and diluted loss
per CDI 3 (0.01) (0.03)
The above statement should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
Note 31 December 30 June
2017 2017
$ $
CURRENT ASSETS
Cash and cash equivalents 3,432,475 446,112
Trade and other
receivables 51,647 236,103
Other assets 49,442 37,605
TOTAL CURRENT ASSETS 3,533,564 719,820
------------ -----------
NON-CURRENT ASSETS
Property, plant
and equipment 368,659 349,024
Exploration and
evaluation expenditure 4 11,707,658 9,752,757
Intangible assets 5,997 5,679
------------ -----------
TOTAL NON-CURRENT
ASSETS 12,082,314 10,107,460
------------ -----------
TOTAL ASSETS 15,615,878 10,827,280
------------ -----------
CURRENT LIABILITIES
Trade and other
payables 552,908 332,250
TOTAL CURRENT LIABILITIES 552,908 332,250
------------ -----------
TOTAL LIABILITIES 552,908 332,250
------------ -----------
NET ASSETS 15,062,970 10,495,030
============ ===========
EQUITY
Issued capital 5 20,422,378 15,587,656
Reserves 5,024,393 3,413,445
Accumulated losses (10,383,801) (8,506,071)
------------ -----------
TOTAL EQUITY 15,062,970 10,495,030
============ ===========
The above statement should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF changes in equity
FOR THE HALF YEARED 31 DECEMBER 2017
Issued Option, Foreign Accumulated
Capital loan Currency Losses Total
CDIs Translation
and performance Reserve
shares
Reserves
$ $ $ $ $
Balance at 1
July 2016 11,674,141 557,246 87,301 (4,360,199) 7,958,489
Loss attributable
to members of
the Company - - - (3,164,185) (3,164,185)
Other comprehensive
loss - - (82,527) - (82,527)
---------- ---------------- ------------ ------------ -----------
Total comprehensive
loss for the
period - - (82,527) (3,164,185) (3,246,712)
---------- ---------------- ------------ ------------ -----------
Transactions
with owners,
recognised directly
in equity
CDIs issued
during the period,
net of costs 2,590,350 - - - 2,590,350
Share based
payments - 2,671,444 - - 2,671,444
Exercise of
options 400,000 - - - 400,000
Exercise of
warrants 140,000 - - - 140,000
Balance at 31
December 2016 14,804,491 3,228,690 4,774 (7,524,384) 10,513,571
========== ================ ============ ============ ===========
Balance at 1
July 2017 15,587,656 3,087,801 325,644 (8,506,071) 10,495,030
Loss attributable
to members of
the Company - - - (1,877,730) (1,877,730)
Other comprehensive
income - 431,736 - 431,736
---------- ---------------- ------------ ------------ -----------
Total comprehensive
income/(loss)
for the period - - 431,736 (1,877,730) (1,445,994)
---------- ---------------- ------------ ------------ -----------
Transactions
with owners,
recognized directly
in equity
CDIs issued
during the period,
net of costs 4,834,722 - - - 4,834,722
Equity based
payment - 29,559 - - 29,559
CDIs issued
pursuant to
loan plan - 1,149,653 - - 1,149,653
Balance at 31
December 2017 20,422,378 4,267,013 757,380 (10,383,801) 15,062,970
========== ================ ============ ============ ===========
The above statement should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEARED 31 DECEMBER 2017
31 December 31 December
2017 2016
$ $
CASH FLOWS FROM OPERATING
ACTIVITIES
Payments to suppliers and
employees (733,290) (623,519)
Interest received 1,592 8,484
Interest paid - (15)
R&D Rebate 174,305 -
Net cash used in operating
activities (557,393) (615,050)
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Payments for exploration and
evaluation expenditure (1,290,091) (2,261,991)
Payments for property, plant
and equipment - (15,700)
----------- -----------
Net cash used in investing
activities (1,290,091) (2,277,691)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of CDIs 5,018,667 3,140,000
Proceeds from related party 200,000 -
Repayment of related party (200,000) -
Capital raising costs (186,632) (9,650)
Net cash from financing activities 4,832,035 3,130,350
----------- -----------
Net increase in cash and cash
equivalents 2,984,551 237,609
Cash and cash equivalents
at the beginning of the financial
period 446,112 3,134,661
Foreign currency translation 1,812 -
----------- -----------
Cash and cash equivalents
at the end of financial period 3,432,475 3,372,270
=========== ===========
The above statement should be read in conjunction with the accompanying notes.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF YEARED 31 DECEMBER 2017
NOTE 1: BASIS OF PREPARATION
Statement of compliance
The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.
Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost, except where applicable for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Group's 2017 annual financial report for the financial year ended 30 June 2017, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.
Changes in accounting policies, accounting standards and interpretations
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 June 2017. All applicable new standards and interpretations issued since 1 July 2017 have been adopted. There was no significant impact on the Group.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are discussed below.
Share-based payments
The value attributed to share options, performance shares, loan CDIs and remuneration shares issued is an estimate calculated using an appropriate mathematical formula based on Black-Scholes option pricing model. The choice of models and the resultant option value require assumptions to be made in relation to the likelihood and timing of the conversion of the options to shares and the value and volatility of the price of the underlying shares. Details of share-based payments assumptions are detailed in Note 6.
New and Revised Accounting Requirements Applicable to the Current Half-Year Reporting Period
The Company has adopted all of the new and revised Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current reporting period.
The adoptions of the new and revised standards have not had a material impact on this half year financial report.
NOTE 2: OPERATING SEGMENTS
The accounting policies used by the Group in reporting segments are in accordance with the measurement principles of Australian Accounting Standards.
The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors, according to AASB 8 Operating Segments.
The Group currently has one project which takes into account each of the above-mentioned aspects. The principal activities for the project are exploration of lithium, tin, tungsten and other commodities, and the development of the existing resources. The project is likely to use the same resources in future and the nature of the regulatory environment is the Czech Republic. This is expected to be the same for future projects. Accordingly, management has identified one operating segment based on the location of the projects, that being the Czech Republic.
NOTE 3: LOSS PER CDI 31 December 31 December
2017 2016
Basic and diluted loss per CDI ($0.01) ($0.03)
Loss attributable to members of
European Metals Holdings Limited ($1,877,730) ($3,164,185)
Weighted average number of CDIs
outstanding during the period 131,863,182 123,574,735
NOTE 4: EXPLORATION AND EVALUATION 31 December 30 June
EXPITURE 2017 2017
$ $
Exploration at cost
Balance at the beginning of the
year 9,752,757 4,940,613
Exploration of tenements 1,541,755 4,688,558
Foreign exchange movement 413,146 123,586
11,707,658 9,752,757
----------- ---------
NOTE 5: ISSUED CAPITAL
AND RESERVES
Number $
(a) Issued and paid up
capital
139,964,727 (30 June
2017: 130,333,909 CDIs) 139,964,727 20,422,378
Total issued capital 20,422,378
=================
(b) Movements in CDIs
Date Number $
Balance at the beginning
of the year 1 July 2016 121,417,126 11,674,141
7 October
CDI - exercise of warrants 2016 500,000 155,225
17 October
CDI - exercise of options 2016 2,000,000 400,000
22 November
CDI - exercise of warrants 2016 500,000 155,225
24 November
CDI capital raising 2016 5,000,000 2,600,000
CDI - exercise of options 1 June 2017 250,000 258,108
CDI - exercise of options 6 June 2017 250,000 258,107
30 June
CDI capital raising 2017 416,783 297,500
Capital raising cost - (210,650)
----------- -----------------
Balance at the end of 30 June
the year 2017 130,333,909 15,587,656
----------- -----------------
31 December 30 June
2017 2017
$ $
(b) Movements in CDIs
Balance at the beginning
of the period 1 July 2017 130,333,909 15,587,656
1 August
CDI capital raising 2017 364,679 257,500
10 August
CDI capital raising 2017 351,448 257,506
1 September
CDI capital raising 2017 375,905 257,495
10 October
CDI capital raising 2017 371,644 257,549
Issued capital - Loan 14 December
CDIs to related parties 2017 1,650,000 -
20 December
CDI capital raising 2017 6,517,142 4,008,042
Capital raising cost - (203,370)
----------- ----------
Balance at the end of 31 December
the period 2017 139,964,727 20,422,378
----------- ----------
(c) Loan CDIs Reserve Date Quantity Unit Value $ Total $
Loan CDIs 14 Dec 2017 1,650,000 $0.69676 1,149,653
Balance at 31 December 2017 1,650,000 1,149,653
---------- ------------- ----------
Employee securities incentive plan
During the half year ended 31 December 2017, remuneration in the form of Employee Securities Incentive Plan were issued to the Directors to attract, motivate and retain such persons and to provide them with an incentive to deliver growth and value to shareholders.
The Loan CDIs represent an option arrangement. Loan CDIs vested immediately. The key terms of the Employee Share Plan and of each limited recourse loan provided under the Plan are as follows:
i. The total loan equal to issue price multiplied by the number of Plan CDIs applied for ("Advance"), which shall be deemed to have been draw down at Settlement upon issued of the Loan Shares.
ii. The Loan shall be interest free. However, if the advance is not repaid on or before the Repayment date, the Advance will accrue interest at the rate disclosed in the Plan from the Business Day after the Repayment Date until the date the Advance is repaid in full.
iii. All or part of the loan may be repaid prior to the Advance repayment Date.
Repayment date
iv. Notwithstanding paragraph iii. above, ("the borrower") may repay all or part of the Advance at any time before the repayment date i.e. 15 years after the date the Loan Advance; and
v. The Loan is repayable on the earlier of: (a) The repayment date; (b) The plan CDIs being sold; (c) The borrower becoming insolvent; (d) The borrower ceasing to be employed by the Company; and
(e) The plan CDIs being acquired by a third party by way of an amalgamation, arrangement or formal takeover bid for not less than all the outstanding CDIs.
Loan Forgiveness
vi. The Board may, in its sole discretion, waive the right to repayment of all or any part of the outstanding balance of an Advance where:
(i) The borrower dies or becomes permanently disabled; or
(ii) The Board otherwise determines that such waiver is appropriate
vii. Where the Board waives repayment of the Advance in accordance with clause 6(a), the Advance is deemed to have been repaid in full for the purposes of the Plan in this agreement.
Sale of loan CDIs
viii. In accordance with the terms of the Plan and the Invitation, the Loan CDIs cannot be sold, transferred, assigned, charged or otherwise encumbered with the Plan CDIs except in accordance with the Plan.
(d) Movements B Class Performance
Shares
Date Number $
Balance at the beginning 1 July 2016 - -
of the year
24 November
Performance Shares issued 2016 5,000,000 2,671,444
Balance at the end of the
year period 30 June 2017 5,000,000 2,671,444
--------- ---------
Balance at the beginning
of the period 1 July 2017 5,000,000 2,671,444
Balance at the end of the 31 December
period 2017 5,000,000 2,671,444
--------- ---------
CDIs and Depositary Interests (CDIs') entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands every holder of a CDI and/or DI present at a meeting in person or by proxy, is entitled to one vote, and in a poll each share is entitled to one vote.
European Metals Holding is a company limited by shares incorporated in the British Virgin Islands with an authorised share capital, 200,000,000 no par value shares of a single class. Pursuant to the prospectus dated 26 April 2012, the company issued CDIs in July 2012. The holder of the CDIs has beneficial ownership in the underlying shares instead of legal title. In respect of CDIs, legal title and the underlying shares is held by Chess Depository Nominees Pty Ltd. Immediately prior to admission to AIM in December 2015, the Company created the DIs. In respect of DIs, legal title and the underlying shares is held by the UK Depositary, Computershare Investor Services PLC.
Holders of CDIs and/or DIs have the same entitlement benefits of holding the underlying shares. Each Share in the Company confers upon the Shareholder:
(a) the right to one vote at a meeting of the Shareholders of the Company or on any Resolution of Shareholders;
(b) the right to an equal share in any dividend paid by the Company; and
(c) the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
The terms of the performance shares are as follows:
The 5,000,000 B Class Performance Shares will convert in accordance with the below:
(i) 1,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the Company's Mineral Resource at Cinovec South and Cinovec Main being entered in the State Balance. The B Class Performance Shares shall convert into the number of Shares and equivalent number of CDIs equal to 1,000,000 multiplied by 0.5 and divided by the greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of CDIs (expressed as a decimal of $1.00) as calculated over the 5 ASX trading days prior to the date the Mineral Resource is entered. (Explanatory Note: Under Czech law a mineral resource must be registered and henceforth treated as a resource by the Czech Government before mining licenses can be granted. A mineral resource has to be calculated according to the Czech regulations, and defended in front of a committee of state certified experts);
(ii) 1,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the issuance of the preliminary mining licenses relating to the Cinovec Project. The B Class Performance Shares shall convert into the number of Shares and equivalent number of CDIs equal to 1,000,000 multiplied by 0.5 and divided by the greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of CDIs (expressed as a decimal of $1.00) as calculated over the 5 ASX trading days prior to the date the final preliminary mining license is issued; and
(iii) 3,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the completing of a definitive feasibility study (DFS). For clarity, the DFS must be: (i) of a standard suitable to be submitted to a financial institution as the basis for lending of funds for the development and operation of mining activities contemplated in the study; (ii) capable of supporting a decision to mine on the Permits; and (iii) completed to an accuracy of +/- 15% with respect to operating and capital costs and display a pre-tax net present value of not less than US$250,000,000. The B Class Performance Shares shall convert into the number of Shares and equivalent number of CDIs equal to 3,000,000 multiplied by 0.5 and divided by the greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of CDIs (expressed as a decimal of $1.00) as calculated over the 5 ASX trading days prior to date of receipt of the completed DFS,
(together the Milestones and each a Milestone). For the avoidance of doubt, the number of Shares and equivalent number of CDIs which will be issued on conversion of the B Class Performance Shares will not exceed a ratio of 1 for 1.
(iv) If the Milestone is not achieved or the Change of Control Event does not occur by the required date, then each B Class Performance Share held by a Holder will be automatically redeemed by the Company for the sum of $0.000001 within 10 ASX trading days of non-satisfaction of the Milestone.
$2,671,444 has been attributed to the Performance Shares and was fully expensed in prior periods.
NOTE 6: SHARE BASED PAYMENT EXPENSE
The following share-based payment arrangements existed as at 31 December 2017:
On 3 January 2017, 400,000 options with an exercise price of 58 cents and exercisable on or before the 3 January 2020 were granted to a Director of the Company. 250,000 of these options will vest at the completion of the Definitive Feasibility Study and the balance will vest 12 months thereafter. The options were valued under the Black and Scholes at $177,352. The value of the options has been pro-rated over the vesting period. Therefore, a fair value adjustment of $29,559 was recognised as a share based payment in the profit or loss.
On 14 December 2017, the Company issued 1,650,000 CDIs to the Directors under the Company's Employee Securities Incentive Plan as approved by Shareholders at the Annual General Meeting held on 30 November 2017. The subscription amounts for the new CDI's was accounted for by a limited recourse interest free loan provided by the Company to the Directors.
Recipient Class Quantity Grant Value recognised Value to
of SBP date during be recognised
Fair the period in future
Value years
Keith Coughlan Loan CDIs 850,000 $0.69676 $592,245 -
David Reeves Loan CDIs 300,000 $0.69676 $209,028 -
Richard
Pavlik Loan CDIs 300,000 $0.69676 $209,028 -
Kiran Morzaria Loan CDIs 200,000 $0.69676 $139,352 -
Richard Share
Pavlik Options 400,000 $0.44338 $29,559 $118,234
----------------- ---------------
$1,179,212 $118,234
================= ===============
Fair value of Loan CDIs
The fair value of the 1,650,000 loan CDIs granted have been valued using a Black Scholes Methodology, taking into account the terms and conditions upon which the loan CDIs were granted. The exercise price of the loan CDI's is equal to the market price of the underlying shares being the VWAP of shares traded on the ASX over the 5 trading days immediately preceding the date of grant.
A summary of the inputs used in the valuation of the loan CDIs are as follows:
Loan CDIs Keith Coughlan David Reeves Richard Kiran Morzaria
Pavlik
Exercise price $0.725 $0.725 $0.725 $0.725
Share price
at date of issue $0.70 $0.70 $0.70 $0.70
Grant date 30 November 30 November 30 November 30 November
2017 2017 2017 2017
Expected volatility 41.4% 41.4% 41.4% 41.4%
Expiry date 30 November 30 November 30 November 30 November
2032 2032 2032 2032
Expected dividends Nil Nil Nil Nil
Risk free interest
rate 2.47% 2.47% 2.47% 2.47%
Value per loan
CDI $0.69676 $0.69676 $0.69676 $0.69676
Number of loan
CDIs 850,000 300,000 300,000 200,000
Total value $592,245 $209,028 $209,028 $139,352
The following share-based payment arrangements existed as at 30 June 2017:
Instruments granted are as follow:
Grant Date Number
18 November 2016 - Class B Performance
i. Shares (related parties) 1,336,557
18 November 2016 - Class B Performance
ii. Shares (non-related parties) 3,663,443
-----------
Total 5,000,000
-----------
$2,671,444 has been attributed to the Performance Shares and was fully expensed in prior periods.
NOTE 7: RELATED PARTY TRANSACTIONS
The related party transactions of the half-year financial report are consistent with those adopted and disclosed in the Company's 2017 annual financial report for the financial year ended 30 June 2017 except the following.
On 14 December 2017, the Company issued 1,650,000 CDIs to the Directors under the Company's Employee Securities Incentive Plan as approved by Shareholders at the Annual General Meeting held on 30 November 2017, of which Mr Keith Coughlan was entitled for 850,000, Mr David Reeves was entitled for 300,000, Mr Richard Pavlik was entitled for 300,000 and Mr Kiran Morzaria was entitled for 200,000 respectively. A value of $1,149,653 has been attributed to the Loan CDIs at $0.725 per CDI, and has been fully expensed.
During the half year, Mr. David Reeves loaned $200,000 to the Company for a short term period with beared no interest. The full amount was repaid during the period.
NOTE 8: CONTINGENT LIABILITIES AND COMMITMENTS
There has been no change in contingent liabilities and commitments since the last annual reporting date.
NOTE 9: EVENTS SUBSEQUENT TO REPORTING DATE
On 2 March 2018, the Company received correspondence from Minister Industry and Trade of the Czech Republic, purporting to terminate the Memorandum of Understanding dated 2 October 2017 between the Company and the Ministry of Industry and Trade.
There have been no other significant events after the reporting date.
DIRECTORS' DECLARATION
The Directors of the Company declare that:
1. The financial statements and notes set out
on pages 6 to 16:
(a) comply with Accounting Standard AASB 134:
Interim Financial Reporting and the Corporations
Act 2001, and
(b) give a true and fair view of the Consolidated
entity's financial position as at 31 December
2017 and of its performance for the half-year
ended on that date.
2. In the Directors' opinion, there are reasonable
grounds to believe that the Company will be able
to pay its debts as and when they become due
and payable.
This declaration is made in accordance with a
resolution of the Board of Directors made pursuant
to section 303(5) of the Corporations Act 2001
and is signed for and on behalf of the Directors
by:
Keith Coughlan
MANAGING DIRECTOR
16(th) March 2018
INDEPENDENT AUDITOR'S REVIEW REPORT
TO THE MEMBERS OF
EUROPEAN METALS HOLDINGS LIMITED
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial
report of European Metals Holdings Limited, which
comprises the consolidated statement of financial
position as at 31 December 2017, the consolidated
statement of profit or loss and other comprehensive
income, consolidated statement of changes in
equity, and consolidated statement of cash flows
for the half-year ended on that date, condensed
notes comprising a summary of significant accounting
policies and other explanatory information, and
the directors' declaration for European Metals
Holdings Limited (the consolidated entity). The
consolidated entity comprises both European Metals
Holdings Limited (the Company) and the entities
it controlled during the half year.
Directors' Responsibility for the Half-Year Financial
Report
The directors of European Metals Holdings Limited
are responsible for the preparation of the half-year
financial report that gives a true and fair view
in accordance with Australian Accounting Standards
(including the Australian Accounting Interpretations)
and the Corporations Act 2001 and for such internal
control as the directors determine is necessary
to enable the preparation of the half-year financial
report that is free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion
on the half-year financial report based on our
review. We conducted our review in accordance
with Auditing Standard on Review Engagements
ASRE 2410 Review of a Financial Report Performed
by the Independent Auditor of the Entity, in
order to state whether, on the basis of the procedures
described, we have become aware of any matter
that makes us believe that the half year financial
report is not in accordance with the Corporations
Act 2001 including: giving a true and fair view
of the consolidated entity's financial position
as at 31 December 2017 and its performance for
the half-year ended on that date; and complying
with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001.
As the auditor of European Metals Holdings Limited,
ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual
financial report.
A review of a half-year financial report consists
of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying
analytical and other review procedures. A review
is substantially less in scope than an audit
conducted in accordance with Australian Auditing
Standards and consequently does not enable us
to obtain assurance that we would become aware
of all significant matters that might be identified
in an audit. Accordingly, we do not express an
audit opinion.
Whilst we considered the effectiveness of management's
internal controls over financial reporting when
determining the nature and extent of our procedures,
our review was not designed to provide assurance
on internal controls.
Our review did not involve an analysis of the
prudence of business decisions made by the directors
or management.
Independence
In conducting our review, we have complied with
the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration
required by the Corporations Act 2001, has been
provided to the directors of European Metals
Holdings Limited on 16 March 2018.
Conclusion
Based on our review, which is not an audit, we
have not become aware of any matter that makes
us believe that the half-year financial report
of European Metals Holdings Limited is not in
accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated
entity's financial position as at 31 December
2017 and of its performance for the half-year
ended on that date; and
(b) complying with Accounting Standard AASB 134
Interim Financial Reporting and Corporations
Regulations 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY
LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir R Tirodkar
Director
West Perth, Western Australia
16 March 2018
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GCGDXDGBBGIL
(END) Dow Jones Newswires
March 16, 2018 05:15 ET (09:15 GMT)
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