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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Okyo Pharma Limited | LSE:OKYO | London | Ordinary Share | GG00BD3FV870 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 91.00 | 1.20 | 1.60 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMWAFM
RNS Number : 6317S
West African Minerals Corporation
22 December 2016
For immediate release
22 December 2016
West African Minerals Corporation
("WAFM", the "Group" or the "Company")
Interim Report and Financial Statements for the Period Ended 30 September 2016
The Directors of West African Minerals Corporation (AIM: WAFM) are pleased to announce its unaudited consolidated interim financial statements for the period ended 30 September 2016.
Financial Highlights
-- Total Assets remained at GBP22.4 million (31 March 2016: GBP22.4 million, no impairment losses were recognised during the period).
-- Cash on hand equates to GBP3.44 million (31 March 2016: GBP3.57 million). -- Operational expenses continue to be rigorously controlled at all levels.
-- During the financial period under review, the Group reported a total comprehensive loss of GBP0.07 million (30 September 2015: GBP0.41 million).
-- Basic and diluted loss per share decreased to 0.030 pence per share (30 September 2015: 0.11 pence).
Operational Highlights
Scoping Study Commissioned for Sanaga
-- WAFM has appointed Royal Haskoning DHV to prepare a Scoping Study on the potential production of iron ore pellets from the Sanaga iron ore deposit. The Board has approved a budget of US$200,000 for the production of this Scoping Study and has requested significant shareholder, Plinian Capital, to provide its technical experts to manage the production of the study which should be completed during the second quarter of calendar 2017.
-- The company continues to evaluate suitable target businesses in the mineral resource sector for acquisition or investment.
Cash Preservation
-- Due to continuing uncertainty over the medium term evolution of iron ore prices WAFM has continued to focus on cash preservation.
-- This strategy will remain in place through 2017, until such time as the company makes a new investment or implements its regional steel production strategy, or sees a sustained improvement in market conditions.
Contacts:
West African Minerals Corporation Gerard Holden +44 (0)1624 639396 Beaumont Cornish (Nominated Advisor) Roland Cornish / Michael Cornish +44 (0)20 7628 3396 Beaufort Securities Limited (Broker) Jon Belliss +44 (0)20 7382 8300
A copy of the Interim Results as well as this announcement will be available on the Group's website at www.westafricanminerals.com
Chairman's statement
Dear Shareholders,
Outlook
2016 has seen a doubling of iron ore prices from a low around US$40 per tonne in January to recent highs just over US$80 per tonne, still down over 40% from its 2013 peak of over US$140 per tonne. Renewed confidence in the iron ore market has been mainly driven by Chinese re-stocking although market experts are not yet convinced that the price rally is sustainable, especially given President-elect Trump's apparent negative sentiment towards China - although his infrastructure plans could be steel intensive.
West African Minerals remains fortunate among its peers in that it has no debt, a healthy cash balance and a low maintenance cash burn rate of less than US$0.5 million per year. Our strategy remains to prudently advance our most mature and promising iron asset toward production by securing appropriate infrastructure and seeking out compelling new business opportunities in the mineral resource space outside of iron ore where there may be significant unrecognized value. Our long term view is that all mineral commodities are fundamentally cyclical and that those companies that can take advantage of periods of extremely low asset valuations to build their portfolio will be well place to benefit from the eventual market recovery.
We thus continue to focus significant effort on how best to utilize our existing assets, notably utilizing the Sanaga deposit as a low cost feed source for an iron ore pellet project and to the review and evaluate new business opportunities for advanced exploration or producing assets in mineral commodities other than iron ore. We will continue to preserve cash and only spend funds on compelling value generation opportunities.
2016 Operations in Review
Development of the Sanaga Mineral Deposit
In previous messages to shareholders we reported on the declared Maiden Inferred Mineral Resource Estimate (MRE) at Sanaga - 82.9 Mt @ 32.1% Fe at a 25% cut-off grade, including a higher grade oxidised cap of near-surface enriched mineralisation of 15.8 Mt @ 37.3% Fe at a 25% cut-off grade. Preliminary metallurgical test work has confirmed that we can produce a premium grade and quality concentrate (69% Fe at average mass recoveries of 40%) from this ore and this would be suitable as a local supply for a Cameroon-based steel industry.
We have recently appointed Royal Haskoning DHV to conduct a Scoping Study to an accuracy of +/-35%. The study is due to start in January 2017 and should be completed in the second quarter of calendar 2017. We have budgeted to spend US$200,000 on this study including a US$25,000 management fee to shareholder Plinian Capital. The study will focus on an open pit mine plan, process design, a market study for the appropriate iron ore pellet market, identification of potential relevant customers, review of available and likely required logistics and infrastructure, optimisation of production rate and a financial model to allow your Board to evaluate the sense of progressing further with this project.
Cash Preservation
Given the persisting weak iron ore market, WAFM continues to operate with a skeleton staff, cash preservation budget and has significantly reduced expenditure relating on its lease holding and service providers.
New Business
The company has reviewed and assessed a number of projects as suitable targets for acquisition or investment by WAFM. However none of these projects has yet met the company's value generation criteria when subjected to due diligence.
Results to September 2016
During the financial period under review, the Group reported a reduced total comprehensive loss of GBP0.07 million (2015: GBP0.41 million). This reduction in loss was expected following stringent cost cutting as a result of implementation of a new stream-lined budget for the Company to reduce expenditures at operational and corporate level.
The Company also assessed the carrying value of deferred mine costs relating to areas for which licenses were still held for impairment as at 30 September 2016 and considered that the recoverable amount of these assets exceeded the carrying amount and as such, no further impairment was recognised. There have been no indications of impairment since the last review and exploration activities to date have continued to be positive.
The Company's Shareholders' Equity reduced by GBP0.05 million primarily as a result of the operational costs incurred during the period.
Total costs capitalised to Deferred Mine Exploration costs stood at GBP11.96 million (31 March 2016: GBP11.83 million).
Cash stood at GBP3.44 million at the end of the period (31 March 2016: GBP3.57 million).
Total number of shares in issue as at the period end was 381.2 million, there were no new shares issued during the period.
Summary
Until market fundamentals stabilise and fundamental medium term demand from China strengthens, WAFM will continue to preserve cash while positioning itself for the eventual and, in the view of the Board, inevitable recovery. The cash preservation program has been in place for the last two years while the company continues to evaluate opportunities and has now decided to move forward with the Scoping Study for the Sanaga Iron ore Pellet Project.
The Company is cautiously optimistic in the medium term outlook for the future demand for iron ore and is committed to creating sustainable value for shareholders through cash flow generating assets with anticipated low operational and capital costs.
Gerard Holden
Chairman
22 December 2015
Directors' report
The Directors present their interim report and the unaudited consolidated interim financial statements for West African Minerals Corporation ("WAFM" or the "Company") for the six month period ended 30 September 2016.
Principal activity
The Company seeks investment opportunities across all types of natural resources projects. This investing policy permits the review and consideration of potential investments in not just metals and metals projects, but also investment in all types of natural resources projects, including but not limited to all metals, minerals and hydrocarbon projects, or physical resource assets on a worldwide basis.
Results and transfers to reserves
The results and transfers to reserves for the period are set out on pages 6 to 9.
The Group made a total comprehensive loss for the period after taxation of GBP68,659 (2015: GBP406,534).
Dividend
The Directors do not propose the payment of a dividend for the period (2015: GBPnil).
Directors
The Directors who served during the period and to date are:
Gerard Holden Bradford Mills* Andrew Gutmann * Willy Simon * James Mellon * * non-executive
By order of the Board
Gerard Holden
Director Craigmuir Chambers
Road Town
22 December 2016 Tortola
British Virgin Islands
Unaudited consolidated statement of comprehensive income
for the six-month period ended 30 September 2016
Notes Period Period ended ended 30 September 30 September 2016 2015 (unaudited) (unaudited) GBP GBP Continuing operations Income - - Operating expenses Directors' fees 18 (15,118) (11,719) Salaries and wages (4,743) (11,284) Consultants' fees (3,200) (57,373) Other professional fees (95,028) (202,902) Administration expenses (63,597) (80,202) Share option and warrants 16 (16,527) (39,132) Other costs (160) (18,045) -------------- -------------- Total operating expenses 4 (198,373) (420,657) Other gains - net 95,987 3,212 Profit on disposal of fixed assets - 18,387 Finance income 2,758 5,254 -------------- -------------- Loss before income tax (99,628) (393,804) Taxation 5 - - -------------- -------------- Loss from continuing operations (99,628) (393,804) Discontinued operations Loss from discontinued operations 8 - (14,871) -------------- -------------- Loss for the period (99,628) (408,675) Other comprehensive loss - foreign currency translation reserve 30,969 2,141 -------------- -------------- Total comprehensive loss for the period (68,659) (406,534) Basic and diluted loss per share - all operations 20 (0.0003) (0.0010) Basic and diluted loss per share - continuing operations 20 (0.0003) (0.0011)
The notes below form an integral part of these condensed consolidated interim financial statements.
The Directors consider that all results derive from continuing activities.
Unaudited consolidated statement of financial position
as at 30 September 2016
Notes At At 30 September 31 March 2016 2016 (unaudited) (audited) GBP GBP Assets Property, plant and equipment 7 83,746 116,390 Deferred mine exploration costs 6 11,962,642 11,827,633 Exploration permits 12 6,284,715 6,284,715 Goodwill 10 429,137 429,137 -------------- -------------- Total non-current assets 18,760,240 18,657,875 -------------- -------------- Current assets Cash and cash equivalents 3,443,235 3,568,800 Trade and other receivables 14 184,603 168,643 -------------- -------------- Total current assets 3,627,838 3,737,443 -------------- -------------- Total assets 22,388,078 22,395,318 Equity Share premium 9 66,192,355 66,192,355 Share options reserves 16 200,849 184,323 Share warrants reserves 16 1,114,454 1,114,454 Foreign currency translation reserve (161,464) (192,433) Retained deficit (45,129,197) (45,029,569) -------------- -------------- Shareholders' equity 22,216,998 22,269,130 -------------- -------------- Current Liabilities Trade and other payables 15 171,081 126,188 -------------- -------------- Total liabilities 171,081 126,188 -------------- -------------- Total equity and liabilities 22,388,078 22,395,318
The notes below form an integral part of these condensed consolidated interim financial statements.
These financial statements were approved by the board of Directors on 22 December 2016 and were signed on their behalf by:
Gerard Holden Willy Simon
Director Director
Unaudited consolidated statement of changes in equity
for the six-month period ended 30 September 2016
Foreign Share Share currency Total Share options warrants translation Retained shareholders' Notes premium reserve reserve reserves deficit equity GBP GBP GBP GBP GBP GBP Balance at 1 April 2016 (audited) 66,192,355 184,322 1,114,454 (192,433) (45,029,569) 22,269,129 Total comprehensive loss for the period Loss for the period - - - - (99,628) (99,628) Other comprehensive income for the period - - - 30,969 - 30,969 Transactions with owners, recorded directly in equity Contributions by and distributions to owners Options and warrants reserve charge 16 - 16,527 - - - 16,527 -------------- -------------- -------------- -------------- ---------------- -------------- Balance at 30 September 2016 (unaudited) 66,192,355 200,849 1,114,454 (161,464) (45,129,197) 22,216,997 Balance at 1 April 2015 (audited) 66,192,355 172,639 1,114,454 (72,859) (44,516,200) 22,890,389 Total comprehensive loss for the period Loss for the period - - - - (408,675) (408,675) Other comprehensive income for the period - - - 2,141 - 2,141 Transactions with owners, recorded directly in equity Contributions by and distributions to owners Options and warrants expired/cancelled 16 - (57,347) - - 57,347 - Options and warrants reserve charge 16 - 39,132 - - - 39,132 -------------- -------------- -------------- -------------- ---------------- -------------- Balance at 30 September 2015 (unaudited) 66,192,355 154,424 1,114,454 (70,718) (44,867,528) 22,522,987
The notes below form an integral part of these condensed consolidated interim financial statements.
Unaudited consolidated statement of cash flows
for the six-month period ended 30 September 2016
Period Period ended ended 30 September 30 September 2016 2015 Notes (unaudited) (unaudited) GBP GBP Cash flows from operating activities Loss for the period (99,628) (408,675) Adjusted for non-cash and non-operating items: Share options and warrants charge 16,527 39,132 Profit on sale of property, plant and equipment - (18,387) Loss on sale of discontinued operations 8 - 14,871 Finance income (2,758) (5,254) -------------- -------------- (85,859) (378,313) Change in trade and other receivables (15,960) 6,984 Change in trade and other payables 44,893 44,153 Disposal of trade and other payables on discontinued operations 8 - (14,871) -------------- -------------- Net cash used in operating activities (56,926) (342,047) Cash flows from investing activities Purchase of property, plant and equipment 7 (270) (300) Proceeds from sale of property, plant and equipment 7 - 47,161 Net cash inflow on disposal of discontinued operations 8 - 1 Amount paid for capitalised deferred mine exploration cost 6 (102,096) (136,419) -------------- -------------- Net cash used in investing activities (102,366) (89,557) Cash flows from financing activities Interest received 2,758 5,254 Exercise of share options and warrants 9, 18 - - -------------- -------------- Net cash generated from financing activities 2,758 5,254 Effect of foreign exchange movement on cash 30,969 2,141 Decrease in cash and cash equivalents (125,565) (424,209) Cash and cash equivalents at beginning of period 3,568,800 4,365,927 -------------- -------------- Cash and cash equivalents at end of period 3,443,235 3,941,718
The notes below form an integral part of these condensed consolidated interim financial statements.
Notes
forming an integral part of the condensed consolidated interim financial statements for the period ended 30 September 2016
1 Reporting Entity
West African Minerals Corporation (formerly Emerging Metals Limited) (the "Company" or "WAFM") is a company domiciled in the British Virgin Islands. These consolidated financial statements comprise the Company and its subsidiaries (collectively the "Group"). The Company's strategic objective is to acquire holdings in natural resources companies and/or physical resource assets which the Directors believe are undervalued and where such a transaction has the potential to create value for Shareholders. The Directors intend to take an active role in the management of such investments and estimate that they will be held for periods of up to five years.
2 Basis of preparation (a) Statement of compliance
The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and do not include all of the information required for full annual financial statements. The condensed consolidated interim financial statements were authorised for issue by the Board of Directors on 22 December 2016.
(b) Basis of measurement
Functional and Presentation Currency
The consolidated financial statements of the Group are presented in Pounds Sterling (GBP) which is the Company's functional currency. All financial information presented in Pounds Sterling has been rounded to the nearest pound.
Estimates
The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Significant estimates and assumptions include those related to recoverability of mineral properties and determination as to whether costs are expensed or deferred.
Going concern
The consolidated financial statements have been prepared on a going concern basis, taking into consideration the level of cash and cash equivalents presently held by the Group, in addition to the assessment of the Directors that the current status and plans for the current projects in Cameroon remain viable. The Directors therefore have a reasonable expectation despite the economic uncertainty that the Company will have adequate resources and liquidity management (note 13) for its continuing existence and projected activities for the foreseeable future, and for these reasons, continue to adopt the going concern basis in preparing the consolidated financial statements for the period ended 30 September 2016.
3 Significant accounting policies
The condensed consolidated interim financial statements of the Company for the period ending 30 September 2016 comprise the Company and its subsidiaries (together referred to as the "Group").
The accounting policies adopted by the Group in the preparation of these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 March 2016. There were no new accounting policies adopted during the period.
The audited consolidated financial statements of the Group as at and for the year ended 31 March 2016 are available at the Group's website http://westafricanminerals.com/content/investor-centre/annual-interim-filings.
4 Loss before finance income
Loss before finance income is stated after charging:
Period ended Period ended 30 September 30 September 2016 2015 Company and Group (unaudited) (unaudited) GBP GBP Auditors' Fees 21,289 17,778 Directors' Fees (note 17) 15,118 11,719 Depreciation (note 7) - - 5 Taxation
The British Virgin Islands under the International Business Companies Act 2004 imposes no corporate taxes or capital gains taxes. However, the Group may be liable for taxes in the jurisdictions where it is operating.
The corporate tax rate in Cameroon is 35% (taking into account the 10% surcharge, the effective rate is 38.5%). The basic rate is reduced to 30% for the first three years a company is listed on the national stock exchange. Losses may be carried over for utilisation for up to four years. The operating subsidiary in Cameroon incurred losses from inception to current period therefore it is not subject to tax liability.
Deferred tax assets in respect of the losses incurred for Cameroon operations have not been recognised due to insufficient evidence of the timing of suitable future profits against which they can be recovered. Deferred tax liabilities have also not been recognised.
6 Deferred mine exploration costs
The schedule below details the current projects of the Group and the related acquisition cost capitalised:
Cameroon Total GBP GBP Cost At 1 April 2016 (audited) 13,854,011 13,854,011 Costs capitalised during the period 102,096 102,096 Depreciation charges capitalised during the period (note 7) 32,913 32,913 -------------------- -------------------- At 30 September 2016 (unaudited) 13,989,020 13,989,020 -------------------- -------------------- Impairment At 1 April 2016 (audited) 2,026,378 2,026,378 Impairment recognised during - - the period
-------------------- -------------------- At 30 September 2016 (unaudited) 2,026,378 2,026,378 -------------------- -------------------- Net book value At 30 September 2016 (unaudited) 11,962,642 11,962,642 At 31 March 2016 (audited) 11,827,633 11,827,633
Deferred mine exploration costs represent intangible assets. Equipment and other assets used in exploratory activities are capitalised in Property, Plant and Equipment. Depreciation charges in respect of these assets are capitalised in deferred mine exploration costs.
Cameroon
The CMC Exploration Permits, held by Compagnie Minière du Cameroun ("CMC Cameroon") originally comprised six permits for the exclusive rights to explore for iron ore and associated minerals in each of the Dja, Djadom, Lélé, Binga, Minko and Sanaga zones in Cameroon. License permits for Dja and a large portion of Minko were relinquished during the course of license renewal in January 2014. Permits for the remaining licenses have been approved by the government of Cameroon for two additional years.
As a result of the surrender of the Dja and the majority of the Minko licenses (relating to areas within the national parks) in the course of license renewal negotiations in January 2014, the Group recognised a full impairment against the balances capitalised in relation to these two licences (with the exception of the remaining 50% retained balance of the Minko license).
The Group assessed the deferred mine costs, relating to areas for which licenses were still held, for impairment as at 30 September 2016 and considered that the recoverable amount of these assets exceeded the carrying amount and as such, no impairment was recognised. There have been no indications of impairment since the last review and exploration activities to date have continued to be positive.
7 Property, plant and equipment Geological tools Furniture Transportation Group & equipment & equipment equipment Total GBP GBP GBP GBP Cost At 1 April 2016 (audited) 69,364 67,595 168,503 305,462 Additions - 270 - 270 ------------ ------------ ------------ ------------ As at 30 September 2016 (unaudited) 69,364 67,865 168,503 305,732 ------------ ------------ ------------ ------------ Depreciation At 1 April 2016 (audited) 40,994 38,595 109,483 189,072 Charge for the period - capitalised 7,289 4,944 20,681 32,914 ------------ ------------ ------------ ------------ As at 30 September 2016 (unaudited) 48,283 43,539 130,164 221,986 ------------ ------------ ------------ ------------ Net book value As at 30 September 2016 (unaudited) 21,081 24,326 38,339 83,746 As at 31 March 2016 (audited) 28,370 29,000 59,020 116,390
Total proceeds received on the disposal of fixed assets during the period / year was GBPnil (31 March 2016: GBP49,311).
8 Discontinued operations
On 19 August 2015 the Group completed the sale of its entire interest in the share capital of its wholly-owned subsidiary, Ferrous Africa Limited ("FAL") for a cash consideration of US$1. FAL's subsidiaries ("FAL Group") held the Company's five licence interests in Sierra Leone.
The comparative Consolidated Statement of Comprehensive Income has been restated to show the discontinued operation separately from continuing operations.
(a) Results of discontinued operations
30 September 30 September 2016 2015 GBP GBP ---------------------------------------- ------------ ------------ Revenue - - Expenses - - Impairment charge - - ---------------------------------------- ------------ ------------ Results from operating activities - - Loss on sale on discontinued operations - (14,871) ---------------------------------------- ------------ ------------ Loss for the period - (14,871) Attributable to: Equity shareholders - 14,871 ---------------------------------------- ------------ ------------ Basic and diluted loss per share - 0.0000 ---------------------------------------- ------------ ------------ (b) Cash flows from/(used in) discontinued operations 30 September 30 September 2016 2015 GBP GBP Net cash used in operating activities - (14,871) Net cash generated from investing activities - 1 Net cash flow for the period - (14,870) (c) Effect of discontinued operations on the financial position of the Group 30 September 30 September 2016 2015 GBP GBP ---------------------------------------- ------------ ------------ Effect of discontinued operations on the net assets and liabilities of the Group - (14,872) Consideration received, satisfied in cash - 1 ---------------------------------------- ------------ ------------ Loss on sale of discontinued operations - (14,871) ---------------------------------------- ------------ ------------ 9 Capital and reserves
Capital Management
The Group manages its capital to maximize the return to the shareholders through the optimization of equity. The capital structure of the Group at 30 September 2016 consists of equity attributable to equity holders of the Company, comprising issued capital, reserves and retained deficit as disclosed.
The Group manages its capital structure and makes adjustments to it, in light of economic conditions and the strategy approved by shareholders. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares and release the Company's share premium account. No changes were made in the objectives, policies or processes during the period/year ended 30 September 2016 and 31 March 2016 or the period to date.
Share capital and premium
The Company is authorised to issue an unlimited number of nil par value shares of a single class. The Company may issue fractional shares and a fractional share shall have the corresponding fractional rights, obligations and liabilities of a whole share of the same class or series of shares. Shares may be issued in one or more series of shares as the Directors may by resolution determine from time to time.
Each share in the Company confers upon the shareholder:
-- the right to one vote at a meeting of the shareholders or on any resolution of shareholders; -- the right to an equal share in any dividend paid by the Company; and
-- the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
The Company may by resolution of the Directors redeem, purchase or otherwise acquire all or any of the shares in the Company subject to regulations set out in the Company's Articles of Incorporation.
Authorised The Company is authorised to issue an unlimited number of nil par value shares of a single class. Share Share Shares capital premium Issued ordinary shares GBP of US$0.00 each Number GBP At 1 April 2015 / 31 March 2016 (audited) 381,157,838 - 66,192,355 At 30 September 2016 (unaudited) 381,157,838 - 66,192,355
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translations of the financial statements of foreign operations for consolidation.
Share options and warrants reserve
These reserves comprise the fair value of options and warrants in issue as at 30 September 2016. A reconciliation and methodology used in determining the fair values are set out in note 16.
Dividends
No dividends were declared or proposed by the Directors during the period (31 March 2016: GBPNil).
10 Goodwill
Goodwill has been recognised as a result of the acquisition of Ferrum Resources Limited and its subsidiaries. The total balance as at the period end is analysed as follows:
Cameroon Total GBP GBP Cost At 31 March 2016 / 30 September 2016 643,706 643,706 ------------------------ ------------------------ Impairment At 31 March 2016 / 30 September 2016 214,569 214,569 ------------------------ ------------------------ Net book value At 31 March 2016 / 30 September 2016 429,137 429,137
The Company assessed the goodwill attributable to all remaining exploration permits for impairment as at 30 September 2016 and considered that the recoverable amount of these intangible assets exceeded the carrying amount and as such, no impairment was recognised. There have been no indication of impairment since the last review and exploration activities to date have continued to be positive.
11 Investment in subsidiary undertakings
As at 30 September 2016, the Group had the following subsidiaries:
Name of company Place Ownership Principal activity of incorporation interest Ferrum Resources Limited BVI 100% Holding company of (Ferrum) * CMC, Ferrous Africa, Ferrum Guinee, Ferrum Benin and Ferrum Mauritania CMC Guernsey Limited Guernsey 100% Holding company of (CMC) CMC Cameroon Compagnie Minière Cameroon 100% Holds exploration licenses du Cameroun (CMC Cameroon) in Cameroon Ferrum Resources Guinee Guinea 100% Holds exploration applications S.A. (Ferrum Guinee) in Guinea * Held directly by WAFM. All other holdings are indirect
The consolidated financial statements include the results of the subsidiaries from the date that control is obtained to 30 September 2016 or the date that control ceases.
12 Exploration permits
The Group recognised the fair value of intangible assets attributable to exploration permits (including those previously unrecognised) as a result of the following business combinations:
Cameroon Total GBP GBP Cost At 31 March 2016 / 30 September 2016 9,427,042 9,427,042 ------------------------ ------------------------ Impairment At 31 March 2016 / 30 September 2016 3,142,327 3,142,327 ------------------------ ------------------------ Net book value At 31 March 2016 / 30 September 2016 6,284,715 6,284,715
The Company assessed the exploration permits for impairment as at 30 September 2016 and considered that the recoverable amount of these intangible assets exceeded the carrying amount and as such, no impairment was recognised. There have been no indication of impairment since the last review and exploration activities to date have continued to be positive.
13 Financial instruments
Financial risk management
All aspects of the Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 March 2016.
Financial Instruments classification
Financial instruments comprise cash and trade and other receivables (classified as loans and receivables) and accounts payable and accrued expenses (classified as other financial liabilities). The carrying amounts of these financial instruments reported in the statement of financial position approximate their fair values due to the short-term nature of these accounts.
14 Trade and other receivables
30 September 31 March 2016 2016 GBP GBP Prepayments 60,312 54,850 VAT 119,095 108,806 Other debtors 5,196 4,987 ------------------------ ------------------------ 184,603 168,643
15 Trade and other payables
30 September 31 March 2016 2016 GBP GBP Trade payables 147,707 86,368 Accrued expenses 20,535 38,767 Other creditors 3,339 1,053 -------------------------- -------------------------- 171,081 126,188
16 Share options and warrants
Share warrants
The total number of share warrants in issue as at the period end is set out below:
FV of warrants in issue Expensed Term at during Grant in Exercise 1 April 30 September period the Recipient Date years Price 2016 Issued Exercised Lapsed 2016 end period GBP GBP Ferrum warrant holders 1, 3 09/01/12 5 24.40p 11,456,000 - - - 11,456,000 382,637 - Advisors 2, 3 09/01/12 5 10.00p 1,878,523 - - - 1,878,523 85,838 - Consultants 4 02/04/12 5 25.00p 1,400,000 - - - 1,400,000 68,740 - Shareholders 5 25/05/13 5 40.00p 1,000,000 - - - 1,000,000 43,244 - Shareholders 5 14/02/14 2-3 10.00p 43,820,473 - - - 43,820,473 533,995 - ------------------------------ -------------------------- ---------------------------- ---------------------------- ------------------------------ ------------------------ ------------------------
59,554,996 - - - 59,554,996 1,114,454 -
Notes
1. Issued as part of consideration paid by the Company to non-controlling shareholders of Ferrum Resources Limited in accordance with the terms of sale of Ferrum shares not yet owned by WAFM). These effectively replace the existing 8 million options issued to Ferrum non-controlling shareholders valued at and fully expensed prior to acquisition of GBP80,000 at the time of acquisition/issue.
2. In accordance with the terms of engagements, these warrants were granted to the Company's advisors following successful completion of the company's admission to AIM.
3. Ferrum warrants and warrants issued to Advisors on 09/01/12 vested immediately and as such the fair value in relation to these has been fully recognised. These warrants can be used anytime during the exercise period.
4. These warrants are subject to 3 years equal annual instalments vesting period
5. These warrants were issued in conjunction with the two fund raising exercises completed in February 2014.
The Company has utilised the Black Scholes Model for the purposes of estimating the fair value of the share warrants upon issue. The following table lists the inputs to the models used for warrants issued during the current and prior years.
14 February 29 May 02 April 9 January 2014 2013 2012 2012 Dividend yield - - - - (%) Expected volatility (%) 1 50% 50% 40% 90% Risk-free interest rate (%)2 0.97% 0.43% 0.7% 1.15% Share price at 7.12 35.9 21.6 11.5 pence grant date pence pence pence Share price (market 7.12 35.9 21.6 11.5 pence value) pence pence pence Exercise price 10.0 40.0 25.0 24.0/10.0 pence pence pence pence Expected exercise 2 years 2 years 3 years 1 year period
Notes
1. Annualised standard deviation of continuously compounded rates of return based on Company's historic share prices
2. Rate on 2 year Gilt Strips
Share options
The total number of share options in issue as at the period end is set out below.
Expensed Term 30 during Grant in Exercise 1 April Lapsed September the Fair Recipient Date years Price 2016 Issued /cancelled Exercised 2016 period value GBP GBP Directors and consultants 14/05/14 10 7.00p 9,650,000 - - - 9,650,000 16,527 200,849 ---------------- ------------------ ------------------ ------------------ ---------------------- -------------- ------------------ 9,650,000 - - - 9,650,000 16,527 200,849
The Company has utilised the Black Scholes Model for the purposes of estimating fair value of the share options upon issue. The following table lists the inputs to the models used for options in issue as at the period end.
14 May 2014 Dividend yield - (%) Expected volatility (%)1 40% Risk-free interest rate (%)2 0.63% Share price at 7 pence grant date Share price (market 7 pence value) Exercise price 7 pence Expected exercise 4 years period
Notes
1. Annualised standard deviation of continuously compounded rates of return based on Company's historic share prices
2. Rate on 2 year Gilt Strips
Share Option Scheme
In accordance with, and subject to the terms of the Company's Share Option Scheme, options issued during the year shall vest in equal instalments annually over a period of three years from the date of grant. Vested options are exercisable at the Exercise Price and may not be exercised later than the tenth anniversary of the Date of Grant. The Directors shall have an absolute discretion as to the selection of persons to whom an Option is granted by the Company. An option shall not be granted to any person unless he/she is a person/company who has provided or is providing services to the Group as a consultant or otherwise ("Approved Grantee") or an employee or any person nominated by such Approved Grantee or employee. The exercise price shall be determined by the Directors and shall be the market value of a Share on the date of the grant of the option to the option holder or shall be such greater or lesser price as the Directors shall determine in their discretion provided always that in the case of a subscription option, the price shall not be less than the nominal value of a Share.
Exercise of the option may be conditional upon satisfaction of performance-related conditions as shall be determined by the Directors and notified to the option holder on the date of the grant. They are not transferable and may not be exercised when to do so would contravene the provisions of the Company's code governing share dealings by directors and employees. In the event that a director/consultant resigns and ceases to be engaged by the Company in any role, pursuant to the Share Option Scheme rules, he or she may only exercise options which have vested and for a period of no later than six months from resignation.
17 Segment reporting
The Group operates in one industry segment: mineral exploration and development in Cameroon. The Company has separately identified two (2015: two) operating segments based on geographical location, being operations in Cameroon and operations at the holding level. The activities in Cameroon, alongside the holding Company are reported regularly to senior management and the board to make decisions about resources and assess its performance and discrete financial information is maintained for each. Below is the analysis of Group's exposures in these segments:
Cameroon Corporate Total GBP GBP GBP Deferred mine exploration costs (note 6) 11,962,642 - 11,962,642 Exploration permit (note 12) 6,284,715 - 6,284,715 Other non-current assets 512,883 - 512,883 Current assets 248,360 3,379,478 3,627,838 Total liabilities (4,853) (166,228) (171,081) Finance income - 2,758 2,758 Expenses (28,413) (73,973) (102,386) Net loss (28,413) (71,215) (99,628) Other comprehensive profit 30,969 - 30,969
18 Related party transactions
All related party transactions occurred on an arm's length basis and in the normal course of operations.
Key management personnel
Directors of the Group received the following remuneration during the period:
Expense recognised Outstanding at during the period the end of the period 30 September 30 September 30 September 30 September 2016 2015 2016 2015 GBP GBP GBP GBP Brad Mills 2,862 2,523 4,682 1,915 Anton Mauve (resigned 01 June 2015) - - 653 653 James Mellon 2,862 2,523 4,682 1,915 Gerard Holden 3,670 3,235 6,003 2,455 Willy Simon (appointed 01 June 2015) 2,862 1,719 3,627 859 Andrew Gutman (appointed 01 June 2015) 2,862 1,719 3,627 1,719 -------------------- -------------------- -------------------- -------------------- 15,118 11,719 23,274 9,516
Directors fee restructure:
As reported in previous year's financial statement, the Directors of the Company shall be paid 50% of their salary by the issue of new ordinary shares ("New Shares") in the Company in arrears at an implied monthly price equivalent to the volume weighted average price ("VWAP") of the Company's shares at the end of each relevant month. This structure was mutually agreed between the Company and the Directors as part of the cash-saving exercise implemented across the Group. The arrangements were to be with effect from 1 January 2014 and in respect of Gerard Holden from 1 May 2014.
As discussed in note 16, the Board of Directors may issue share options or warrants to persons/company who provide services to the Group. The following table is a reconciliation of warrants and options in issue to key personnel as at 30 September 2016. The value of these warrants/options is commensurate with the value of services provided to the Company.
at Name 01 At April Lapsed/ 30 September 2016 Granted Exercised Cancelled 2016 Brad Mills 4,700,000 - - - 4,700,000 Gerard Holden 2,350,000 - - - 2,350,000 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Totals 7,050,000 - - - 7,050,000
Directors' interests in the capital of the Company are the following:
Number Percentage of Ordinary of Issued Shares Capital Brad Mills (note 19) 43,655,233 11.45% James Mellon (note 19) 26,015,591 6.83% Gerard Holden (note 19) 142,869 0.04%
Burnbrae Limited
The Company has entered into a service agreement with Burnbrae Limited for the provision of administrative and general office services. Mr James Mellon is a director of Burnbrae Limited and the Company. During the period the Company incurred a total cost of GBP25,555 (30 September 2015: GBP32,418) under this agreement and a balance of GBP77,244 was due to Burnbrae at end of the period (30 September 2015: GBP38,256).
19 Significant shareholdings
Except for the interests disclosed in this note, the Directors are not aware of any holding of Ordinary Shares representing 3% or more of the issued share capital of the Company as at:
At 30 September 2016 -------------------------- Percentage Number of Total of Ordinary Issued Shares Capital Beaufort Nominees Limited 117,466,234 30.82% Panetta Partners Limited 57,559,775 15.10% Bradford Mills 1 43,655,233 11.45% Anton Mauve 2 43,056,704 11.30% Plinian Guernsey Limited 1,2 42,496,856 11.15% Rosy Mining Limited 35,889,079 9.42% Regent Mercantile Holdings Limited 32,672,906 8.57% James Mellon 3 26,015,591 6.83% Generation Resources Limited 14,360,340 3.77%
Notes:
1. Brad Mills' interest comprises 1,158,377 Shares that he owns directly; and a further 42,496,856 Shares that are owned by Plinian Guernsey Limited ("Plinian"), of which Brad Mills is the controlling shareholder, and includes 10,142,858 Shares that are owned by CE Mining, which is 50 per cent. owned by Plinian.
2. Anton Mauve's interest comprises 78,405 Shares that he owns directly; 481,443 Shares that are owned by Metallogenic Mining Limited ("MML"), a company in which Anton Mauve is beneficially interested and which provides services to the Company; and a further 42,496,856 Shares that are owned by Plinian, of which Anton Mauve is a shareholder, and includes 10,142,858 Shares that are owned by CE Mining, which is 50 per cent. owned by Plinian.
3. James Mellon's interest comprises 23,291,082 shares held by Galloway Limited (a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest) and 1,844,825 Shares held by Burnbrae Limited (a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest). The balance of James Mellon's shareholding (879,684) is held in Mr Mellon's own name
20 Basic and diluted loss per share
The calculation of basic loss per share of the Group is based on the net loss attributable to shareholders for the period of GBP99,628 (2015: GBP408,675) and the weighted average number of shares outstanding of 381,157,838 (2015: 381,157,838).
Weighted average number of ordinary shares
30 September 30 September 2016 2015 Issued ordinary shares at 01 April 381,157,838 381,157,838 Effect of shares issued - - for cash Effect of share options - - and warrants exercised Effect of shares issued to Directors in lieu of salary - - ---------------- ---------------- Weighted average number of ordinary shares 381,157,838 381,157,838
Diluted earnings per share are calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares such as warrants and options. As at 30 September 2016 and 2015, there is no dilutive effect because the Group incurred net losses in both periods. Therefore, basic and diluted earnings per share are the same.
21 Commitments and contingent liabilities
There are no known contingent liabilities as at the period end.
22 Subsequent events
There were no significant events that transpired subsequent to period end.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BDBDDCDDBGLD
(END) Dow Jones Newswires
December 22, 2016 07:34 ET (12:34 GMT)
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