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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ironveld Plc | LSE:IRON | London | Ordinary Share | GB0030426455 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.0065 | -9.63% | 0.061 | 0.06 | 0.062 | 0.0675 | 0.0605 | 0.0675 | 3,914,035 | 15:28:12 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Scrap & Waste Materials-whsl | 103k | -435k | -0.0001 | -6.00 | 2.36M |
From May 2019 to May 2024
TIDMIRON
RNS Number : 6212Y
Ironveld PLC
07 December 2017
7 December 2017
IRONVELD PLC
("Ironveld" or the "Company")
Final results for the year ended 30 June 2017
Ironveld plc, the owner of a High Purity Iron ("HPI"), Vanadium and Titanium project located on the Northern Limb of the Bushveld Complex in Limpopo Province, South Africa (the "Project") is pleased to announce its final results for the 12 months ended 30 June 2017 ("the Period"). The Period saw the Company move towards the potential acquisition of a smelting business ("Middelburg Smelting") to enable early production.
Operational Highlights
-- Section 11 transfers of the mining licence for heavy minerals, iron and vanadium to the Company's subsidiaries HW Iron (Pty) Ltd and Lapon (Pty) Ltd effected
-- Planned acquisition of Middelburg Smelting facility and associated independent power plant that would provide a readymade smelter enabling early production of HPI, Vanadium and Titanium
-- Exclusive discussions continue with Ironveld Middelburg, a subsidiary of the Company, to acquire the Smelting facility. Considerable time has been spent by management on site preparing for the commencement of operations
-- Offtake agreements are in place for HPI, Vanadium and Titanium for the first five years of production
-- The water use licence application has been submitted to the Department of Water Affairs
-- Access agreements being negotiated with the communities and affected land owners for the areas to be mined in the first five years
-- The Air Emissions licence was granted by the Department of Economic Development and Tourism ("Ledet")
Financing
-- During the year, completed two successful placings, raising GBP2.1 million in June 2017 to fund working capital and repay the R15 million loan facility with Sylvania Metals Pty Limited as well as c.GBP1.8 million in October 2016
-- Post-period end, successfully completed a further placing, raising GBP1.765 million
Outlook
-- The Company remains in advanced discussions with a number of funding providers for the acquisition of the Middelburg Smelting facility that would allow for the necessary upgrades and subsequent processing of the Company's own magnetite
-- Subject to finalising funding arrangements the Company will seek to move to production within six months of financial completion
Peter Cox, CEO said:
"During the Period, we shifted our immediate focus from constructing a 15 MW smelter to securing the acquisition of the Middelburg Smelting facility, to enable early production and allow us to begin selling to offtake partners, generating revenue and cash flow for the Company. Although progress has been slower than we hoped, we remain confident in finalising funding arrangements that would allow for the necessary refurbishments to the Smelting Facility to be completed and for smelting and refining of our magnetite ore to commence.
"This is an extremely exciting period for the Company as we transition towards becoming a production led mining company. We continue to receive important support from our shareholders and consequently the Company is today in a position of strength with a stable balance sheet.
"We have made further progress post period and look forward to updating shareholders further in due course."
For further information, please contact:
Ironveld plc c/o Camarco Peter Cox, Chief Executive 020 3757 4980 Shore Capital and Corporate Limited Stephane Auton / Toby Gibbs (corporate finance) Jerry Keen (corporate broking) 020 7408 4090 Camarco Gordon Poole / Kimberley Taylor / Monique Perks 020 3757 4980
Notes to Editors:
Ironveld (IRON.LN) is the owner of a High Purity Iron, Vanadium and Titanium project located on the Northern Limb of the Bushveld Complex in Limpopo Province South Africa. Ironveld expects to mine its own VTM ore as feedstock for a 7.5 MW DC smelter which will produce speciality iron products including high purity iron powder as well as vanadium and titanium slag products.
The Definitive Feasibility Study published in April 2014 confirms the project's viability to deliver an exceptionally high grade iron product (99.5% Fe) called High Purity Iron which commands a premium in the market place. Vanadium and Titanium slag containing commercial grades of vanadium and titanium will also be produced and sold.
Ironveld's Board includes; Giles Clarke as Chairman, Peter Cox as CEO, Vred von Ketelhodt as CFO, Nick Harrison and Rupert Fraser as a Non-Executive Directors.
Ironveld is an AIM traded company. For further information on Ironveld please refer to www.ironveld.com.
CHAIRMAN'S STATEMENT - STRATEGIC REPORT
During the year, there have been a number of operational achievements that ensured the Company exited the period in a position of strength with highly deliverable goals focused on developing the HPI, Vanadium and Titanium Project.
During the Period, the Company acquired ownership of the magnetite resources via Section 11 transfer of the mining licences for heavy minerals, iron and vanadium. The Company now holds unfettered rights to 56.4 million tons of magnetite ore on the Main Magnetite Layer of the Bushveld Igneous Complex grading 48% Fe,14.7% TiO2 and 1.12% V2o% giving 27 million tons of in situ iron, 8.3 million tons of TiO2 and 632 thousand tons of V2O5. The mining licences are held by the Companies subsidiaries HW Iron (Pty) Ltd and Lapon (Pty) Ltd. Post year-end the prospecting right for the Luge (Pty) Ltd properties has been granted, which is expected to increase the magnetite ore available to the Company to feed the Middelburg smelter and eventual larger scale operations.
The Period also saw the granting of the Air Emissions licence by the Department of Economic Development and Tourism and the Water Use licence for HW Iron being submitted to the Department of Water Affairs, which is anticipated to be granted in the first quarter of 2018. The Company places significant importance on community engagement and engagement is ongoing to conclude access and lease agreements for the areas that will be mined in the first 5 years.
In line with the Company's intention of building and operating a 15MW smelter, during the Period, it successfully concluded a R 244.08m funding package with the Industrial Development Corporation (IDC), relating specifically to the 15MW smelter. To have the support of the IDC is a significant achievement as the organisation is owned by the South African government under the supervision of the Economic Development Department and its vision is aligned with ours in supporting and contributing to the creation of sustainable economic growth in South Africa.
In April 2017, the Board took the strategic decision to shift the immediate focus from constructing a 15 MW smelter to acquiring a 7.5 MW smelting facility and associated independent power plant in Middelburg, South Africa. This took effect through the signing of two non-binding memorandum of understanding ("MOUs"). The acquisition of the Middelburg facility would provide the Company with a readymade smelter, enabling early production of HPI, Vanadium and Titanium and facilitating supply into the offtake agreements, which have been agreed for the first five years of production with highly reputable partners. We also believe the acquisition would significantly de-risk the Project, whilst delivering attractive economic returns and cash flow.
Shortly after the year-end and following the signing of the two MOUs relating to Middelburg, the Company put down a R8.8m refundable deposit towards the potential acquisition in exchange for exclusivity. Although the negotiations and due diligence of the acquisition have taken longer than planned, the Directors remain confident of successfully concluding discussions and securing the required funding. Once the necessary upgrades and refurbishments have been made, the Company's own magnetite ore can be processed through the Middelburg smelting facility and the Company will then supply products to its offtake partners. Considerable time has been spent by management on site at the Middelburg Smelting facility, preparing for the commencement of operations. However, no further work will be done until the funding for the acquisition has been concluded and the necessary upgrades have been made.
The Company plans to produce High Purity Iron as a water atomised powder. This product is widely used in the automotive industry, and has applications in powder metallurgy and magnetic materials and in a variety of specialist applications. There is a growing market for this product driven by the continuous introduction of new materials and technologies. Vanadium has extensive applications including the grid energy storage market, where vanadium redox flow batteries are under development, being heralded as the "missing-link" in volume storage for clean energy. Titanium, which is used in the pigment industry as well as in the steel and alloying industries, is a key part of a new battery technology. The Company has also been investigating the possibility of producing titanium metal powders for the additive manufacturing industry and once production commences at the Middelburg facility this will be pursued further.
The continued support of our shareholders has enabled us to successfully complete two placings during the year. These have provided us with the working capital required to support ongoing project development, as well as repay the R15 million loan facility with Sylvania Metals Pty Limited. Furthermore, post-period end, we were able to close a third successful fundraise to strengthen our balance sheet and working capital position, as we remain focused on the potential acquisition of the Middelburg Smelting facility and moving towards commencing production.
We continue to work closely with the local communities to improve standards of living. We are incredibly proud of our Keep a Girl in School Programme, in which we work closely with our partners, the Imbumba Foundation and the Nelson Mandela Foundation, to provide hygiene support to some 600 female students at schools in the Project area. Work to introduce a support program to similarly encourage academic excellence amongst male students in the project area ongoing with the support of the Imbumba foundation.
Financial
The group recorded a loss before tax of GBP0.7 (2016: GBP0.6m) and cash balances of GBP0.8m (2016: GBP0.1m) at the end of the period. The Company does not plan to pay a dividend for the year ended 30 June 2017.
Going concern
The Directors are confident that the Company has sufficient working capital for the foreseeable future.
Outlook
The Board remains committed to successfully concluding negotiations for the potential acquisition of the Middelburg Smelting facility, which would fulfil the Company's aim of becoming a production led mining company through the early production of HPI, Vanadium and Titanium and significantly de-risking the Project.
We would like to thank all of our shareholders for their ongoing support for both the Company and the Project and we look forward to providing further updates in the near future.
Giles Clarke
Chairman
6 December 2017
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 30 JUNE 2017
Hot Features
Premium
Year Year
ended ended
2017 2016
Note GBP'000 GBP'000
Administrative expenses (553) (494)
-------- --------
Operating loss 4 (553) (494)
Investment revenues 6 1 -
Finance costs 7 (185) (91)
-------- --------
Loss before tax (737) (585)
Tax 8 - -
-------- --------
Loss for the year (737) (585)
-------- --------
Attributable to:
Owners of the Company (737) (584)
Non-controlling interests - (1)
-------- --------
(737) (585)
-------- --------
Loss per share - Basic
and diluted 9 (0.20p) (0.18p)
-------- --------
There is no difference between the results as disclosed above and the results on a historical cost basis. The income statement has been prepared on the basis that all operations are continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEARED 30 JUNE 2017
Year Year
ended ended
2017 2016
GBP'000 GBP'000
Loss for the period (737) (585)
Exchange differences on the translation
of foreign operations 2,380 (525)
-------- --------
Total comprehensive income
for the period 1,643 (1,110)
-------- --------
Attributable to:
Owners of the Company 1,057 (954)
Non-controlling interests 586 (156)
-------- --------
1,643 (1,110)
-------- --------
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2017
2017 2016
Note GBP'000 GBP'000
Non-current assets
Intangible assets 11 26,750 21,509
Property, plant and equipment 12 5 9
-------- ---------
26,755 21,518
Current assets
Trade and other receivables 14 780 234
Cash and cash equivalents 788 113
-------- ---------
1,568 347
Total assets 28,323 21,865
-------- ---------
Current liabilities
Trade and other payables 15 (331) (186)
Borrowings 16 (889) (992)
-------- ---------
(1,220) (1,178)
-------- ---------
Net-current liabilities
Deferred tax liabilities 17 (5,580) (4,699)
-------- ---------
Total liabilities (6,800) (5,877)
-------- ---------
Net assets 21,523 15,988
-------- ---------
Equity
Share capital 19 7,671 6,500
Share premium 20 18,211 16,136
Other reserves 20 - 21
Retained earnings 20 (8,282) (10,006)
-------- ---------
Equity attributable to
owners of the Company 17,600 12,651
Non-controlling interests 23 3,923 3,337
Total equity 21,523 15,988
-------- ---------
These financial statements were approved by the Board and authorised for issue on 6 December 2017.
Signed on behalf of the Board
P Cox Company Registration Director No: 04095614
PARENT COMPANY BALANCE SHEET
AS AT 30 JUNE 2017
2017 2016
Note GBP'000 GBP'000
Non-current assets
Investments 13 21,213 18,954
-------- --------
Current assets
Trade and other receivables 14 507 78
Cash and cash equivalents 260 74
-------- --------
767 152
-------- --------
Total assets 21,980 19,106
-------- --------
Current liabilities
Trade and other payables 15 (205) (179)
-------- --------
Total liabilities (205) (179)
-------- --------
Net assets 21,775 18,927
-------- --------
Equity
Share capital 19 7,671 6,500
Share premium 20 18,211 16,136
Other reserves 20 - 21
Retained earnings 20 (4,107) (3,730)
-------- --------
Total equity (Owners
of the Company) 21,775 18,927
-------- --------
The loss for the financial year dealt with in the financial statements of the parent Company was GBP458,000 (2016 - loss GBP424,000).
These financial statements were approved by the Board and authorised for issue on 6 December 2017.
Signed on behalf of the Board
P Cox Company Registration Director No: 04095614
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2017
Attributable to the owners of the Company:
Share Share Warrant Retained Total
Capital Premium Reserves Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 July 2015 6,474 16,056 21 (8,902) 13,649
Loss for the year - - - (584) (584)
Other comprehensive
income - - - (525) (525)
Issue of share
capital 26 80 - - 106
Credit for equity
settled share
based payments - - - 171 171
Adjustment arising
from changes
in non-controlling
interests - - - (166) (166)
At 30 June 2016 6,500 16,136 21 (10,006) 12,651
-------- -------- ---------- --------- --------
Loss for the year - - - (737) (737)
Other comprehensive
income - - - 2,380 2,380
Issue of share
capital 1,171 2,054 - - 3,225
Expiration of
share warrant - 21 (21) - -
Credit for equity
settled share
based payments - - - 81 81
Balance at 30
June 2017 7,671 18,211 - (8,282) 17,600
-------- -------- ---------- --------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
FOR THE YEARED 30 JUNE 2017
Owners Non-controlling Total
of the interest equity
Total equity Company
GBP'000 GBP'000 GBP'000
As at 1 July
2015 13,649 3,328 16,977
Loss for the
year (594) (1) (585)
Other comprehensive income (525) (156) (681)
Issue of share
capital 106 - 106
Credit for equity settled
share based payments 171 - 171
Adjustment for changes in
non-controlling interests (166) 166 -
At 30 June
2016 12,651 3,337 15,988
---------- ---------------- --------
Loss for the year (737) - (737)
Other comprehensive income 2,380 586 2,966
Issue of share
capital 3,225 - 3,225
Credit for equity settled
share based payments 81 - 81
At 30 June
2017 17,600 3,923 21,523
---------- ---------------- --------
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2017
Equity attributable to the equity holders of the Company:
Share Share Other Retained Total
Capital Premium Reserves Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 July 2015 6,474 16,056 21 (3,477) 19,074
Issue of share
capital 26 80 - - 106
Credit for equity
settled share
based payments - - - 171 171
Loss for the year - - - (424) (424)
-------- -------- ---------- --------- --------
At 30 June 2016 6,500 16,136 21 (3,730) 18,927
-------- -------- ---------- --------- --------
Issue of share
capital 1,171 2,054 - - 3,225
Expiration of
share warrant - 21 (21) - -
Credit for equity
settled share
based payments - - - 81 81
Loss for the year - - - (458) (458)
-------- -------- ---------- --------- --------
Balance at 30
June 2017 7,671 18,211 - (4,107) 21,775
-------- -------- ---------- --------- --------
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 30 JUNE 2017
2017 2016
Note GBP'000 GBP'000
Net cash from operating
activities 21 (641) (470)
-------- --------
Investing activities
Purchases of property,
plant and equipment (1) (4)
Purchase of exploration
and evaluation assets (914) (821)
Contribution to exploration
and evaluation assets - 187
Interest received 1 -
-------- --------
Net cash used in investing
activities (914) (638)
-------- --------
Financing activities
Proceeds on issue of shares
(net of costs) 2,552 6
Repayment of borrowings (312) (187)
-------- --------
Net cash generated / (used)
by financing activities 2,240 (181)
-------- --------
Net increase/(decrease)
in cash and cash equivalents 685 (1,289)
-------- --------
Cash and cash equivalents
at the beginning o of the
period 21 113 1,407
Effect of foreign exchange
rates (10) (5)
-------- --------
Cash and cash equivalents
at end of year 21 788 113
-------- --------
COMPANY CASH FLOW STATEMENT
FOR THE YEARED 30 JUNE 2017
2017 2016
Noted GBP'000 GBP'000
Net cash from operating
activities 21 (390) (231)
-------- --------
Investing activities
Payments to acquire investments (1,976) (1,082)
Net cash used in investing
activities (1,976) (1,082)
-------- --------
Financing activities
Proceeds on issue of shares
(net of costs) 2,552 6
Net cash generated by
financing activities 2,552 6
-------- --------
Net increase/(decrease)
in cash and cash equivalents 186 (1,307)
-------- --------
Cash and cash equivalents
at the beginning of the
period 21 74 1,381
-------- --------
Cash and cash equivalents
at end of year 21 260 74
-------- --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
1. General information
Ironveld Plc is a public company incorporated in the United Kingdom under the Companies Act 2006 whose shares are listed on the Alternative Investment Market of the London Stock Exchange. The address of the registered office is given on page 2. The nature of the Group's operations and its principal activities are set out in note 3 and in the Strategic Report on pages 3 to 4.
Adoption of new and revised Standards
There were no new or amended IFRS standards or IFRIC interpretations adopted for the first time in these financial statements that had a material impact on the financial statements.
At the date of authorisation of these financial statements, the following accounting standards, amendments to existing standards and interpretations are not yet effective and have not been adopted early by the Group.
IFRS 15 (Clarification) Revenue from Contracts with Customers
IFRS 9 (2014) IFRS 9 Financial Instruments (2014)
IFRS 10 &IAS 28 (amended) Sale or Contribution of Assets between investors and its Associates
IFRS 16 Leases
IAS 12 (amended) Recognition of Deferred Tax Assets for Unrealised Losses
IAS 7 (amended) Disclosure Initiative
IFRS 15 (Clarification) Revenue from Contracts with Customers
IFRS 2 (amended) Classification and Measurement of Share-based Payment Transactions
IFRS4 (amended) Applying IFRS9 Insurance contracts
IFRIC 22 Foreign currency transactions and advance consideration
IAS40 (amended) Transfer of Investment property
Annual Improvements to IFRSs 2014-2016 Cycle.
The adoption of these standards, amendments and interpretations is not expected to have a material impact on the Group and Company's result for the year or equity.
2.1 Significant accounting policies
The financial statements are based on the following policies which have been consistently applied:
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The financial statements have been prepared on the historical cost basis. The principal accounting policies are set out below:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by the Company (its subsidiaries) made up to the year end. 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.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control and ceases when the Company loses control of the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
2.1 Significant accounting policies (continued)
Basis of consolidation (continued)
Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders are initially measured at their proportionate share of the fair value of the acquirees identifiable net assets. Subsequent to acquisition, the carrying value of the non-controlling interests is the amount of initial recognition plus the non-controlling interests' share of the subsequent changes in equity.
Changes in the Group's interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.
Business combinations
Acquisitions of subsidiaries are accounted for using acquisition accounting. The consideration for each acquisition is measured at the fair value of assets given, liabilities incurred or assumed and equity instruments issued by the Group in exchange for control in the acquiree. Acquisition-related costs are recognised in the income statement as incurred.
Exploration and evaluation
Costs incurred prior to acquiring the rights to explore are charged directly to the income statement.
Licence acquisition costs and all other costs incurred after the rights to explore an area have been obtained, such as the direct costs of exploration and appraisal (including geological, drilling, trenching, sampling, technical feasibility and commercial viability activities) are accumulated and capitalised as intangible exploration and evaluation ("E&E") assets, pending determination. Amounts charged to project partners in respect of costs previously capitalised are deducted as contributions received in determining the accumulated cost of E&E assets.
E&E assets are not amortised prior to the conclusion of the appraisal activities. At completion of appraisal activities, if financial and technical feasibility is demonstrated and commercial reserves are discovered then, following development sanctions, the carrying value of the relevant E&E asset will be reclassified as a development and production asset in intangible assets after the carrying value has been assessed for impairment and, where appropriate adjusted. If after completion of the appraisal of the area it is not possible to determine technical and commercial feasibility or if the legal rights have expired or if the Group decide to not continue activities in the area, then the cost of unsuccessful exploration and evaluation are written off to the income statement in the relevant period.
The Group's definition of commercial reserves for such purposes is proved and probable reserves on an entitlement basis. Proved and probable reserves are the estimated quantities of minerals which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from the known reserves and which are considered to be commercially producible.
Such reserves are considered commercially producible if management has the intention of developing and producing them and such intention is based upon:
- a reasonable expectation that there is a market for substantially all of the expected production;
- a reasonable assessment of the future economics of such production;
- evidence that the necessary production, transmission and transportation facilities are available or can be made available; and
- agreement of appropriate funding; and
- the making of the final investment decision
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
2.1 Significant accounting policies (continued)
Exploration and evaluation (continued)
On an annual basis a review for impairment indicators is performed. If an indicator of impairment exists an impairment review is performed. The recoverable amount is then considered to be the higher of the fair value less costs of sale or its value in use. Any identified impairment is written off to the income statement in the period identified.
Development and production assets
Development and production assets, classified within property, plant and equipment, are accumulated generally on a field basis and represents the cost of developing the commercial reserves discovered and bringing them into production, together with the E&E expenditure incurred in finding the commercial reserves transferred from intangible assets.
Depreciation of producing assets
The net book values of producing assets are depreciated generally on the field basis using the unit or production method by reference to the ratio of production in the period and the related commercial reserves of the field, taking into account the future development expenditure necessary to bring those reserves to production.
Research and development
Research expenditure is recognised as an expense in the period in which it is incurred.
An internally-generated asset arising from any development is recognised only if all of the following conditions are met:
- an asset is created that can be identified;
- it is probable that the asset created will generate future economic benefits; and
- the development cost of the asset can be measured reliably.
Revenue
Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, net of discounts and value added tax.
Taxation
The tax expense represents the sum of the tax payable and deferred tax.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base used in the calculation of the taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised on all appropriate taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible timing differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date.
Deferred tax is calculated at the tax rates that are expected to be applicable in the period when the liability or asset is realised and is based on tax laws and rates substantially enacted at the balance sheet date. Deferred tax is charged in the income statement except where it relates to items charged/credited in other comprehensive income, in which case the tax is also dealt with in other comprehensive income.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
2.1 Significant accounting policies (continued)
Leases
Rentals payable under operating leases are charged to the income statement on a straight line basis over the lease term.
Property, plant and equipment
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less the estimated residual value of each asset over its expected useful life, as follows:
Plant and machinery 10% - 25% straight line basis or reducing balance basis
Foreign currencies
The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purposes of the consolidated financial statements, the results and financial position of each group company are expressed in pounds sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency are recognised at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in the income statement in the period in which they arise.
When presenting the consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at the exchange rates prevailing at the balance sheet date. Income and expense items are translated at average exchange rates for the period, unless exchange rates have fluctuated significantly in which case the rates at the date of the transactions are used. Exchange differences arising are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests where appropriate).
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated using the closing rate.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Other receivables
Other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method except for short-term receivables when recognition of interest would be immaterial. Appropriate allowances for the estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
2.1 Significant accounting policies (continued)
Financial instruments (continued)
Financial liability and equity
Interest bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the income statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are initially recognised at fair value and are subsequently amortised using the effective interest method. Fair value is estimated from available market data and reference to other instruments considered to be substantially the same.
Trade and other payables
Trade payables and other financial liabilities are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
The Group's activities expose it primarily to the financial risks of changes in interest rates on borrowings.
Investments
Investments in subsidiaries are stated at cost less any provision for the permanent diminution in value.
Share-based payments
The Group issues equity-settled share-based payments to certain employees and other parties. Equity settled share-based payments are measured at fair value at the date of grant. In respect of employee related share based payments, the fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. In respect of other share based payments, the fair value is determined at the date of grant and recognised when the associated goods or services are received.
Operating segments
The Group considers itself to have one operating segment in the year and further information is provided in note 3.
Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operating existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further details are provided in the note 2.2 and in the Strategic Report on pages 3 to 4.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
2.2 Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Fair value of acquisition
On acquisition of a subsidiary, the Company is required to estimate the fair value of the assets and liabilities acquired and the consideration paid. The estimate in respect of exploration and evaluation assets is affected by many factors including the future viability of commercial reserves which have been based on the judgement of directors supported by third party technical reports.
Going concern
The Group's present resources and existing facilities are only considered adequate to meet committed overhead expenditure for the foreseeable future being the period to 31 December 2018. The Directors are presently fully engaged with finance providers to raise the further funds which will allow them to commit to the next phase of the Project and the Directors are confident that sufficient funds can be raised for this additional planned activity.
The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being twelve months from the date of the approval of the financial statements and are optimistic that the Group will be able to raise further funds when required for the additional planned activities. The Company is committed to developing the Project and is actively engaged in raising finance to allow the development to proceed. For this reason, the Board continues to adopt the going concern basis in the preparation of the financial statements.
Fair value of share based payments
Calculation of the fair value of the share based payments issued requires estimates to be used for the share price volatility, the risk free rate and the model used to calculate the fair value.
Exploration and evaluation assets
The Group has adopted a policy of capitalising the costs of exploration and evaluation and carrying the amount without impairment assessment until impairment indicators exist (as permitted by IFRS 6). The directors consider that the Group remains in the exploration and evaluation phase and therefore, under IFRS 6, the directors have to make judgements as to whether any indicators of impairment exist and the future activities of the Group. No such indicators of impairment were identified and therefore no impairment review has been carried out.
Deferred tax assets
The directors must judge whether the future profitability of the Group is likely in making the decision whether or not to recognise a deferred tax asset in respect of taxation losses. No deferred tax assets have been recognised in the year.
Useful lives of property, plant and equipment
Property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based on the management's estimates of the period that the assets will generate revenue, which are based on judgement and experience and periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the carrying value and amounts charged to the consolidated income statement in specific periods.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
3. Business and geographical segments
Information reported to the Group Directors for the purposes of resource allocation and assessment of segment performance is focused on the activity of each segment and its geographical location. The directors consider that there is only one business segment, which is the activity of prospecting, exploration and mining based in South Africa.
4. Operating loss
Year Year
Operating loss for the year is ended ended
shown after charging:
2017 2016
GBP'000 GBP'000
Net foreign exchange
gains/(losses) 3 (5)
Depreciation on tangible
assets 6 8
Lease payments under
operating leases 34 25
-------- --------
Auditors remuneration
Fees payable to the auditors for
the audit of the Company's accounts 28 24
Fees payable to the Company's auditors
and its associates for other services:-
The audit of the Company's
subsidiaries 8 8
Tax compliance services 3 3
Other assurance services 8 9
--- ---
5. Staff costs
Year Year
ended ended
2017 2016
GBP'000 GBP'000
Wages and salaries 635 519
Social security costs 17 17
Share based payments 81 155
-------- --------
733 691
-------- --------
Directors remuneration
and fees 341 309
---- ----
The aggregate remuneration paid
to the highest paid Director was 132 118
---- ----
2017 2016
The average monthly number of employees, Number Number
including Directors, during the
period was as follows:
Administration and management 14 16
------- -------
Further details of the Directors' remuneration are given in the Directors' Remuneration Report on pages 9 and 10.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
6. Investment revenues
Year Year
ended ended
2017 2016
GBP'000 GBP'000
Interest on bank deposits 1 -
-------- --------
7. Finance costs
Year Year
ended ended
2017 2016
GBP'000 GBP'000
Loan interest and similar
charges 185 91
-------- --------
8. Tax
Year Year
ended ended
2017 2016
GBP'000 GBP'000
a) Tax charge for the
period
Corporation tax:
Current period - -
Deferred tax (note 17) - -
-------- --------
- -
-------- --------
b) Factors afftecting the tax charge
for the period
Loss on ordinary activities for
the period before taxation (737) (585)
-------- --------
Loss on ordinary activities for
the period before taxation multiplied
by effective rate of corporation
tax of 19.75% (2016 - 20%) (146) (117)
Non- deductible expenses 16 34
Unused tax losses not
recognised 130 83
-------- --------
Tax expense for the year - -
-------- --------
c) Factors that may affect future tax charges - The Group has estimated unutilised tax losses amounting to GBP3,100,000 (2016 - GBP2,460,000) the values of which are not recognised in the balance sheet. The losses represent a potential deferred taxation asset of GBP630,000 (2016 - GBP490,000) which would be recoverable should the Group make sufficient suitable taxable profits in the future.
In addition, the Group has pooled exploration costs incurred of GBP6,150,000 (2016 - GBP4,400,000) which are expected to be deductible against future trading profits of the Group.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
9. (Loss)/earnings per share
2017 2016
GBP'000 GBP'000
Loss attributable to
the owners of the Company (737) (584)
-------- --------
Loss per share - Basic
and diluted
Continuing operations (0.20p) (0.18p)
------------ --------
The calculation of basic earnings per share is based on 360,142,884 (2016 - 326,938,397) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
Where the Group reports a loss for the current period, then in accordance with IAS 33, the share options are not considered dilutive. Details of such instruments which could potentially dilute basic earnings per share in the future are included in note 19.
Under IAS 33, the share warrants in issue during the year were not considered to be diluting as the market price throughout the period was below the exercise price of the warrants in issue. Further details are provided in note 19.
10. Loss attributable to owners of the parent Company
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is not presented as part of these accounts. The parent Company's loss for the financial year amounted to GBP458,000 (2016 - GBP424,000).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
11. Intangible assets
Exploration
and
evaluation
assets
GBP'000
Group
Cost:
At 1 July 2015 21,743
Additions 927
Contributions received (187)
Exchange differences (974)
------------
At 30 June 2016 21,509
------------
Additions 1,120
Exchange differences 4,121
------------
At 30 June 2017 26,750
------------
Amortisation:
At 1 July 2015, 30 June -
2016 and 30 June 2017
------------
Net book value at 30
June 2017 26,750
------------
Net book value at 30
June 2016 21,509
------------
The Group's exploration and evaluation assets all relate to South Africa.
In respect of the exploration and evaluation assets which remain in the appraisal phase, the Group has performed a review for impairment indicators, as required by IFRS 6 and in the absence of such indicators no impairment review was carried out.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
12. Property plant and equipment
Plant
and
machinery
GBP'000
Group
Cost:
At 1 July 2016 32
Additions 1
Exchange differences 6
At 30 June 2017 39
Depreciation:
At 1 July 2016 23
Charge for the period 6
Exchange differences 5
-----------
At 30 June 2017 34
-----------
Net book value at 30
June 2017 5
-----------
Net book value at 30
June 2016 9
-----------
Plant
and
machinery
Cost: GBP'000
At 1 July 2015 29
Additions 4
Exchange (1)
At 30 June 2016 32
Depreciation:
At 1 July 2015 15
Charge for the period 8
Exchange differences -
-----------
At 30 June 2016 23
-----------
Net book value at 30
June 2016 9
-----------
Net book value at 30
June 2015 14
-----------
All non-current assets in 2017 and 2016 were located in South Africa.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
13. Investments
Company - subsidiary undertakings
Loans Shares Total
GBP'000 GBP'000 GBP'000
Cost:
As at 1 July 2015 - 17,776 17,776
Additions - 1,178 1,178
---------- -------- --------
At 30 June 2016 - 18,954 18,954
---------- -------- --------
Additions 861 1,398 2,259
---------- -------- --------
At 30 June 2017 861 20,352 21,213
---------- -------- --------
Net book value
30 June 2017 861 20,352 21,213
---------- -------- --------
Net book value
20 June 2016 - 18,954 18,954
---------- -------- --------
Additions in the year of GBP1,398,000 (2016 - GBP1,178,000) represent further shares issued, and fully paid, by Ironveld Mauritius Limited, the Company's wholly owned subsidiary.
The loans in the period represent loans to Ironveld Holdings (Propriety) Limited which incur interest at a rate not exceeding the base lending rate applicable in England and Wales and are repayable by 31 December 2019.
The Company has investments in the following principal subsidiaries. To avoid a statement of excessive length, details of the investments which are not significant have been omitted:
Name of company Shares Proportion Nature of business
of voting
rights
held
Ironveld Mauritius Ordinary *100% Holding Company
Limited
Ironveld Holdings Ordinary 100% Holdings Company
(Pty) Limited
Ironveld Mining Ordinary 100% Mining and exploration
(Pty) Limited
Ironveld Middelburg Ordinary 100% Ore processing
(Pty) Limited and smelting
Ironveld Smelting Ordinary 74% Ore processing
(Pty) Limited and smelting
HW Iron (Pty) Ordinary 68% Prospecting Limited and mining Lapon Mining (Pty) Ordinary 74% Prospecting Limited and mining Luge Prospecting Ordinary 74% Prospecting and Mining (Pty) and mining Limited
* Held directly by Ironveld Plc all other holdings are indirect.
All subsidiary undertakings are incorporated in South Africa, other than Ironveld Mauritius Limited, which is incorporated in Mauritius.
Further details of non-wholly owned subsidiaries of the Group are provided in note 23.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
14. Trade and other receivables
Group Company
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Amounts owed from Group
undertakings - - - 39
Other debtors 751 209 482 33
Prepayments and accrued
income 29 25 25 6
-------- ---------- -------- --------
780 234 507 78
-------- ---------- -------- --------
Credit risk
The Group's principal financial assets are bank balances, cash balances, and other receivables. The Group's credit risk is primarily attributable to its other receivables of which GBP249,000 (2016 - GBP171,000) is due from a third party financial institution and further information is provided in note 18. The amounts presented in the balance sheet are net of allowances for doubtful receivables. Other debtors also includes GBP450,000 (2016 - GBPNil) in respect of placing proceeds not received by the year end.
15. Trade and other payables
Group Company
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 61 14 61 14
Taxation and social
security costs 25 25 24 24
Other payables 113 5 5 5
Accruals and deferred
income 132 142 115 136
-------- -------------- -------- --------
331 186 205 179
Due within 12 months (331) (186) (205) (179)
-------- -------------- -------- --------
Due after more than - - - -
12 months
-------- -------------- -------- --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
16. Borrowings
Group Company
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Other loans 889 992 - -
-------- -------------- -------- --------
The borrowings are
repayable as follows:
On demand or within
one year 889 992 - -
-------- -------------- -------- --------
889 992 - -
Due for settlement
within 12 months (889) (992) - -
-------- -------------- -------- --------
Due for settlement - - - -
after more than 12
months
-------- -------------- -------- --------
Further details on loans are provided in note 18.
17. Deferred tax
Group
2017 2016
GBP'000 GBP'000
Balance at 1 July 4,699 4,930
Exchange differences 881 (231)
------------ --------
Balance at 30 June 5,580 4,699
------------ --------
The deferred tax liability
is made up as follows:
Group
2017 2016
GBP'000 GBP'000
Fair value adjustments
5,580 4,699
------------ --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
18. Financial instruments
The Group's policies as regards derivatives and financial instruments are set out in the accounting policies in note 2. The Group does not trade in financial instruments.
Capital risk management
The Group manages its capital to ensure that they will be able to continue as a going concern whilst maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group's overall strategy remains unchanged from 2016.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 16, cash and cash equivalents and equity attributable to equity holders of the parent Company.
The Group is not subject to any externally imposed capital requirements.
Interest rate risk profile
The Group is exposed to interest rate risk because the Group borrows funds at both fixed and floating interest rates. The Group's exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Group's exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of the transactions concluded is spread where possible.
Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Group's short, medium and long term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to manage liquidity are set out below.
Financial facilities
The Group did not have any secured bank loan or overdraft facilities during the current or comparative period.
Financial assets
The Group has no financial assets, other than short-term receivables and cash deposits of GBP788,000 (2016 - GBP113,000). The cash deposits attract variable rates of interest. At the year end the effective rate was 0.3% (2016 - 0.04%). The cash deposits held were as follows:-
2017 2016
GBP'000 GBP'000
Sterling - United Kingdom
banks 251 23
USD - United Kingdom
banks 3 47
South African Rand - United Kingdom
banks 6 3
South African Rand - South African
banks 528 40
-------- --------
787 113
-------- --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
18. Financial instruments (continued)
Financial liabilities
The Group's financial liabilities consist of other loans. Interest rates charged on these are as follows:
Weighted
average
effective
Interest Within
rate 1 year
(%) GBP'000
30 June 2017
Variable interest
rates - SA 14.50 889
--------
30 June 2016
Variable interest rates
- SA 5.14 992
--------
Other loans relate to a loan agreed on the acquisition of the Ironveld Group. The loan of GBP889,000 (2016 - GBP992,000) bears interest at 14.5%, was repayable by 30 June 2017 and was repaid shortly after the year end. The loan was secured against the assets of the Group and by share warrants as noted in note 19.
Currency exposures
The Group undertakes transactions denominated in foreign currencies and is consequently exposed to fluctuations in exchange rates.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities were as follows:-
As at 30 June 2017 Assets Liabilities
GBP'000 GBP'000
British Pound Sterling
(GBP) 740 204
USD ($) 3 -
South African Rand (R) 786 1,016
-------- ----------------
1,529 1,220
-------- ----------------
As at 30 June 2016 Assets Liabilities
GBP'000 GBP'000
British Pound Sterling
(GBP) 56 178
USD ($) 47 -
South African Rand (R) 218 1,000
-------- ----------------
321 1,178
-------- ----------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
18. Financial instruments (continued)
Financial commitments and guarantee
A rehabilitation guarantee of GBP711,000 (R 11,993,000) (2016 - GBP599,000 (R 11,993,000)) has been issued to the Department of Mineral Resources in South Africa from two subsidiaries, HW Iron Proprietary Limited and Luge Prospecting and Mining Company Proprietary Limited, in order to comply with Section 41 of the Mineral and Petroleum Resources Development Act, 202 (Act 28 of 2002). Under this agreement the Group will pay deposits to a third party financial institution to be held pending discharge of any potential claim on this guarantee. At 30 June 2017 GBP249,000 (R 4,206,000) (2016 - GBP171,000 (R 3,426,000)) had been deposited in respect of this agreement and is included in other receivables. This represents a concentration of credit risk and the Group is exposed to currency risks on these amounts. As the Project has not yet commenced then no liability is considered to exist at the reporting date and the amount remains repayable as a current asset.
19. Share capital
Group and Company
2017 2016
GBP'000 GBP'000
Allotted, called up and
fully paid
444,641,279 (2016 - 327,544,176)
ordinary shares of 1p each 4,447 3,276
322,447,158 (2016 - 322,447,158)
deferred shares of 1p each 3,224 3,224
-------- --------
7,671 6,500
-------- --------
In August 2016, the Company issued 743,513 ordinary shares at 5.75p in lieu of consultant and contractor expenses.
In October 2016, the Company completed a placing of 40,000,003 ordinary shares at a price of 4.5p. The costs in respect of this placing were settled by an additional issue of 2,266,667 ordinary shares.
In January 2017, the Company issued 3,801,341 ordinary shares at 4.75p in lieu of consultant and contractor expenses.
In February 2017, the Company issued 285,579 ordinary shares of 1pence each on the exercise of employee share options.
The Company completed a second placing in June 2017 placing 70,000,000 ordinary shares at 2p each
Since the year end, in November 2017, the Company completed a further placing of 88,250,000 ordinary shares of 1p each raising GBP1,765,000 before expenses.
Unlike ordinary shares, the deferred shares have no voting rights, no dividend rights and on a return of capital or winding up are entitled to a return of amounts credited as paid. The deferred shares are not transferrable and beneficial interest in the deferred shares can be transferred to such persons as the Directors may determine as custodian for no consideration without sanction of the holder.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
19. Share capital (continued)
Share options
The Company has a share option scheme for certain employees and former employees of the Group. The share options in issue during the period were as follows:
Exercise As at Granted Exercised Lapsed As at
Price 1 July in in year / Cancelled 30 June
Date Granted 2016 year 2017
GBP'000 GBP'000 No No No
21 May 2010 10p 1,600,000 - - - 1,600,000
16 August
2012 1p 6,235,137 - (285,579) - 5,949,558
14 November
2012 1p 6,663,505 - - - 6,663,505
16 April
2013 1p 1,033,334 - - - 1,033,334
7 November
2013 1p 2,086,667 - - - 2,086,667
1 May 2014 1p 200,000 - - - 200,000
1 October
2015 1p 2,500,000 - - - 2,500,00
27 January
2016 1p 445,545 - - - 445,545
---------- ----------------- ---------- ----------------- ----------
Date granted Expiry date Exercise
period
21 May 2010 21 May 2020 To May
2020
16 August 16 August
2012 2022
14 November 14 November The options are exercisable
2012 2022 1/3 on the first anniversary
of the grant, 1/3 on the
second anniversary of the
grant and the final 1/3
on third anniversary of
the grant
16 April 16 April
2013 2023
7 November 7 November
2013 2023
1 May 2014 1 May 2024
1 October 1 October
2015 2025
27 January 27 January
2016 2026
Of the options granted on 1 October 2015, 1,000,000 are exercisable following first commercial production from the proposed 15 MW smelter.
The Group recognised a share based payment expense of GBP81,000 (2016 - GBP171,000) in the period. No options were granted in the year
Share warrants
As at 1 July 2016 there were 8,399,966 warrants in issue issued at a price of 0.25p each. These warrants expired on 24 September 2016.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
19. Share capital (continued)
Share warrants continued
On the 1 November 2016 40,000,003 new share warrants were issued pursuant to a share warrant instrument dated 26 October 2016. One warrant was issued to each placee in respect of each placing share issued at that date and each warrant allowed the holder to subscribe for one ordinary share in Ironveld Plc and were exercisable at 6.75 pence at any time during the 12 months from the date of issue of the warrants. The Company shall procure that the ordinary shares issued pursuant to the exercise of warrants are admitted to trading on AIM. The warrants themselves will not be dealt with or admitted to trading on any market and are only transferable in limited circumstances by their holders. No placing proceeds were allocated to the issue of the warrants
Warrants may be exercised in whole or in part (and from time to time) prior to the final expiry date. The warrants are non-transferable.
In addition to the above warrants, Sylvania Metals Pty Limited entered into a loan facility of 15,000,000 South African Rand, in consideration for which the Company has undertaken to grant Sylvania warrants with effect from 16 August 2012 as a guarantee. Sylvania were entitled, pursuant to these warrants, to subscribe for such number of 1 pence Ordinary Shares as results from dividing GBP1,500,000 by the volume weighted average price of the Company's shares on AIM for the 90 business days ending on the business day immediately prior to the date of exercise, with such warrants being exercisable during the period commencing on 1 January 2017 and ending on the earlier of repayment in full of the loan facility monies or the fifth anniversary of admission.
Such warrants were only exercisable to the extent that any amount is then outstanding under the loan facility. The proceeds derived from the exercise of the warrants would be used only to repay the associated loan. The loan of 15,000,000 South African Rand was repaid after the year-end and no warrants were exercised.
20. Reserves
Warrant Share Retained
reserve premium earnings
Group account
GBP'000 GBP'000 GBP'000
At 1 July 2016 21 16,136 (10,006)
Loss for the period - - (737)
Exchange difference on translation
of foreign operations - - 2,380
Issue of share
capital - 2,054 -
Expiry of share
warrants (21) 21 -
Credit for equity settled
share based payments - - 81
---------- --------- ----------
At 30 June 2017 - 18,211 (8,282)
---------- --------- ------------
Retained earnings is made up of cumulative profits and losses to date, share based payments, adjustments arising from changes in non-controlling interests and exchange differences on translation of foreign operations.
IRONVELD PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
20. Reserves (continued)
Warrant Share Retained
reserve premium earnings
Company account
GBP'000 GBP'000 GBP'000
At 1 July 2016 21 16,136 (3,730)
Loss for the period - - (458)
Issue of share
capital - 2,054 -
Expiry of share
warrants (21) 21 -
Credit for equity settled
share based payments - - 81
---------- --------- ----------
At 30 June 2017 - 18,211 (4,107)
---------- --------- ----------
The balance classified as share premium is the premium on the issue of the Group's equity share capital, comprising 1p ordinary shares and 1p deferred shares less any costs of issuing the shares.
The warrant reserve represents the estimated fair value of share warrants issued in prior periods which expired in the year.
21. Cash generated from operations
Group 2017 2016
GBP'000 GBP'000
Operating loss (553) (494)
Depreciation on property, plant
and equipment 6 8
Share based payment
expense 21 171
-------- --------
Operating cash flows before movements
in working capital (526) (315)
Movement in receivables 20 (109)
Movement in payables 51 (46)
-------- --------
Cash used in operations (455) (470)
Interest paid (186) -
-------- --------
Net cash used
in operations (641) (470)
-------- --------
Cash and cash 2017 2016
equivalents
GBP'000 GBP'000
Cash and bank
balances 788 113
-------- --------
Included in cash and bank at the year end was South African Rand 8,800,000 (GBP522,000) which was held in a solicitors client account and which was paid out shortly after the year-end in respect of the potential acquisition of the Middelburg Smelting facility.
IRONVELD PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
21. Cash generated from operations (continued)
Company 2017 2016
GBP'000 GBP'000
Operating loss (458) (424)
Share based payment
expense 21 76
-------- --------
Operating cash flows before movements
in working capital (437) (348)
Movement in receivables 21 8
Movement in payables 26 109
Net cash used
in operations (390) (231)
-------- --------
Cash and cash 2017 2016
equivalents
GBP'000 GBP'000
Cash and bank
balances 260 74
-------- --------
22. Related party transactions
Group and Company
The key management personnel of the Group are the directors. Directors' remuneration is disclosed in Note 5.
During the year the Company paid GBP48,000 (2016 - GBP55,200) for accounting services to Westleigh Investments Holdings Limited, a company in which G Clarke and N Harrison are materially interested.
Other receivable include GBPNil (2016 - GBP2,800) due to Kennedy Ventures Plc, a company in which G Clarke and N Harrison are materially interested.
All transactions are considered to be on terms equivalent to those that prevail in arm's length transactions.
23. Non-controlling interest
2017 2016
GBP'000 GBP'000
At 1 July 3,337 3,328
Exchange adjustments 586 (156)
Adjustment arising from change in
non-controlling interest - 166
Share of loss
for the period - 1
-------- --------
At 30 June 3,923 3,337
-------- --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2017
23. Non-controlling interest (continued)
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling interests:
Proportion Profit/(loss) Accumulated
of oting allocated non-controlling
rights to non-controlling interests
and shares interests
held
2017 - 2017 2016 2017 2016
(2016)
GBP'000 GBP'000 GBP'000 GBP'000
HW Iron (Pty)
Limited 32% (32%) - - (1,221) 1,061
Lapon Mining (Pty)
Limited 26% (26%) - - 2,704 2,277
Other non-controlling
interests - (1) (2) (1)
--------- ----------- --------- --------
- (1) 3,923 3,337
--------- ----------- --------- --------
Summarised financial information in respect of each of the Group's subsidiaries that have material non-controlling interests is set out below. The summarised financial information below represents amounts before intragroup eliminations. The accounts of the subsidiaries have been translated from their presentational currency of South African Rand (R) using the R : GBP exchange rate prevailing at 30 June 2017 of 16.8652 (2016 - 20.0272).
HW Iron (Proprietary) Limited
2017 2016
GBP'000 GBP'000
Current assets 248 171
Non-current assets 7,125 5,817
-------- --------
Current liabilities (2,021) (1,480)
Non-current liabilities (1,534) (1,291)
-------- --------
Equity attributable to owners of
the Company 2,597 2,156
Non-controlling
interest 1,221 1,061
-------- --------
Revenue - -
Expenses - 1
-------- --------
Profit/(loss)
for the year - (1)
-------- --------
Attributable to the owners
of the Company - (1)
Attributable to non-controlling
interests - -
-------- --------
Dividends paid to non-controlling
interests - -
Net cash inflow from operating
activities (45) (252)
Net cash outflow from
investing activities (213) 7
Net cash inflow from financing
activities 258 245
-------- --------
Net cash inflow - -
-------- --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
23. Non-controlling interest (continued)
Lapon Mining (Proprietary) Limited
2017 2016
GBP'000 GBP'000
Current assets - -
Non-current assets 15,831 13,222
-------- --------
Current liabilities (1,384) (1,056)
Non-current liabilities (4,046) (3,407)
-------- --------
Equity attributable to owners of
the Company 7,697 6,482
Non-controlling
interest 2,704 2,277
-------- --------
Revenue - -
Expenses - 1
-------- --------
Profit/(loss)
for the year - (1)
-------- --------
Attributable to the owners
of the Company (1)
Attributable to non-controlling
interests - -
-------- --------
Dividends paid to non-controlling
interests - -
Net cash inflow from operating
activities - (1)
Net cash outflow from
investing activities (13) (26)
Net cash inflow from financing
activities 13 27
-------- --------
Net cash inflow - -
-------- --------
24. Control
The Directors consider that there is no overall controlling party.
25. Posting of accounts
The Report and Accounts for the period ended 30th June 2017 will shortly be available on the Company's website and will be sent to registered shareholders by post shortly together with notice of the Company's AGM.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KMMGZNVMGNZM
(END) Dow Jones Newswires
December 07, 2017 02:00 ET (07:00 GMT)
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