TIDMAHG
RNS Number : 4335A
Athol Gold and Value Limited
20 March 2013
Athol Gold and Value Limited
("Athol" or "the Company")
Final Audited Results
For the year ended 31 December 2012
Dear Shareholders,
I am pleased to present the audited results of your Company for
the year ended 31 December 2012.
OVERVIEW
During the year in question the Company's Net Asset Value per
share declined from 0.33p as at 25 January 2012 to 0.14p as at 31
December 2012. This drop in value stemmed primarily from a decision
taken late in 2011 to change the Company's investment mandate from
a focus on metals and mining to a much broader and more general
mandate. The Company's name was also changed from Athol Gold to
Athol Gold & Value.
Following this decision, the investment portfolio became heavily
weighted in illiquid companies, many of which were listed on what
was then known as Plus Markets. There was also a disproportionate
holding in Ascot Mining, a company which faced some difficult
issues with its assets in Costa Rica, and which significantly
underperformed the wider market.
Then, in the spring of 2012, Athol made an opportunistic bid for
the assets of Commodity Watch, specifically Minesite.com and
Oilbarrel.com, two websites specialising in coverage of junior
resources companies. However, shortly after the bid was made, the
Company's investment manager resigned. The offer for Commodity
Watch was withdrawn, and the Company requested repayment of the
GBP575,000 refundable deposit that had been made to the owners of
Commodity Watch, Rivington Street Holdings.
In July, Alastair Ford, who has been a leading London-based
commentator on natural resources for more than ten years, and who
is currently the editor of Minesite.com, was appointed as chief
investment officer of Athol.
At that point it was agreed that a further change in the
investment mandate was required, to return the Company to its
earlier focus, and this was approved at an extraordinary general
meeting held at the beginning of September.
At the same time it was agreed that the substantial portion of
the illiquid stocks that had come into the Athol portfolio
following the change of mandate in 2011 should be transferred out
of the Company via an asset swap with Webb Capital, the Company's
major shareholder, and also the holder of a significant portion of
Athol Gold debt. Accordingly it was agreed that Athol would take
units in Webb funds in exchange for its illiquid assets, and on
redemption of those units on an agreed and staged basis would use a
substantial portion of the moneys raised to pay down that debt.
This agreement was implemented at the beginning of October.
In mid-September agreement was reached with Rivington Street
Holdings for the refundable deposit of GBP575,000, relating to the
aborted Commodity Watch acquisition, to be repaid in three
instalments, together with interest at 7% per annum, and in early
December, Athol received the third and final instalment from
Rivington to complete the repayments due.
Accordingly, although the decline in Net Assets was deeply
disappointing, Athol ended 2012 on a much surer footing than it
entered it.
FINANCIAL STATEMENTS
The Financial Statements are presented in the following
pages.
The Company recorded a loss for the year of GBP2,264,000 (2011:
GBP2,168,000).
The loss per share was 0.21p (2011: 0.38p)
During the year Athol's net assets declined from GBP3,147,000 to
GBP1,611,000
PROSPECTS FOR 2013
The Company has entered 2013 with renewed optimism. Markets in
the junior resources sector remain tough, but that also presents
opportunities. We were early into the platinum space, ahead of the
re-rating the sector enjoyed on the back of political and
industrial problems in South Africa. And there will be other such
opportunities. At the moment gold equities look oversold, as do
explorers right across the commodities spectrum.
And although the structural problems in Europe remain, the
economic news from China does seem to be brightening, albeit that
the world will have to get used to slower growth rates than those
we enjoyed in the last decade. Recent data showing increased
Chinese exports points to the likelihood of more demand for the
commodities in which Athol is invested, and in the long term that
bodes well for an uplift in our Net Asset Value.
In the short-term though, it remains a stock-picker's market,
and we are unlikely to see a major upturn across the board in
junior resources until at least the autumn.
In the meantime, the Company continues to receive approaches
from parties with unlisted vehicles looking for investment and/or
an Aim listing. The board of Athol will consider each such proposal
on its merits.
Finally, the Board of Athol has resolved that following the
turbulent year we had in 2012, it would be appropriate to change
the Company's name, and to adjust the share structure so that the
shares can be priced more appropriately for a quoted company.
Accordingly, resolutions will be put to the shareholders at the AGM
to approve the change of the Company's name to Mineral &
Financial Investments Limited, and a share consolidation on a
1-for-100 basis.
Jennifer Allsop,
Chairman
Chief Investment Officer's Review
Since I was appointed Chief Investment Officer in July, the
Company has commenced the process of reducing its exposure to
illiquid stocks. Athol is now well into the process of realising
cash from those assets via our agreement with Webb Capital, as
outlined in the Company's announcement of 17 August 2012.
In addition, the Company sought and achieved the return of
amounts owing from Rivington Street Holdings, with interest. This
money is now being invested in accordance with our updated
investment policy in the natural resources and energy sector, and
as a result the catastrophic declines in net asset value that Athol
suffered in 2011 and in the first half of 2012 have been
stemmed.
That is not to say that further shocks relating to legacy assets
may not be in store, but the Company's financial position is
certainly a great deal more stable than it was a year ago.
During the past six months Athol has invested in a number of new
opportunities. Sensing that the wind was changing in the platinum
space the Company participated in a placing of Jubilee Platinum
shares, and also took a position in Aquarius.
The Company also continues to be active in the gold space. We
are long-term believers in the strength of gold, as currency wars
continue to rage, paralysis in the Eurozone continues, Chinese
demand picks up, supply continues to lag demand, interest rates
remain low, and inflation looms.
With that in mind, Athol recently participated in a fundraising
for Nyota Minerals and is already sitting on a small gain. The
Company sees the current weakness in gold equities generally as
presenting a buying opportunity, albeit that there might still be
some weakness in the gold price ahead before strength returns to
the market.
In base metals the outlook is more favourable, and the Company
continues to be positive about our holdings in EMED mining and
other companies exposed to the space.
Athol is continuing to seek opportunities in the oil and gas and
uranium sectors.
A summary of the major holdings in Athol's portfolio
follows:
SF Webb Capital Smaller Companies Growth Fund
Athol took a large position in the Growth fund as a result of
the asset swap deal concluded with Webb Capital in October of last
year. As outlined at the time, the rationale for the deal was to
allow Athol to exit from non-core and illiquid investments,
principally outside of the resources space, in a reasonable and
orderly way. As a result, a series of staged redemptions of our
units in the Growth fund has now commenced, the proceeds of which
have been used to pay off substantial amounts of the debt that
Athol has carried on its balance sheet for some time. These
redemptions should complete in October of this year, as per our
agreement with Webb Capital, at which point it is anticipated that
Athol will no longer hold any units in the Growth Fund.
SF Webb Capital Smaller Companies Gold Fund
As a result of the October 2012 agreement with Webb Capital, the
Company also took a significant stake in the Webb Gold Fund. Since
it is in accordance with Athol's investment mandate to hold
investments in the gold space, it was agreed with Webb Capital that
Athol would be locked into its holding in the Gold Fund until
October 2013. Accordingly we are holders of the Webb Gold Fund at
least until then, and quite possibly for the longer-term too, as
the portfolio is currently comprised of some of the more robust
companies in the junior gold space.
Among the companies that Webb hold that look particularly
attractive to us are Condor Gold, Minera IRL, Amara Mining and
Archipelago Resources. Condor has just put out a positive
preliminary economic assessment on its La India project in
Nicaragua, Minera IRL has just raised C$15 million to continue work
on developing its Ollachea project in Peru, Amara is progressing
with work on all three of its major West African projects, and
Archipelago's ramp up into mid-tier producer status is now
complete. Also positioned strongly is Pan African Resources, which
represents 4.23 per cent of the fund, notwithstanding the recent
resignation of chief executive Jan Nelson.
Silvermere Energy
Athol holds a GBP330,000 loan note in Silvermere Energy and,
notwithstanding that Silvermere has had a harder time than
anticipated in bringing its I-1 well on stream, remains in close
dialogue with the company as to likely further developments.
Silvermere completed a small fundraising at the start of this year
to tide it over, and most recently has just announced that it sold
nearly 11.5 million cubic feet of gas in February alongside
production of 1,845 barrels of oil, increases of 32 per cent and
four per cent respectively month-on-month. The company understands
that it is the intention of Silvermere to attempt to acquire
another asset to give it critical mass, finance permitting, and
will follow any such development with close interest.
Aquarius Platinum
The acquisition of our stake in Aquarius Platinum came as part
of a wider appreciation that the platinum sector was oversold and
looked ripe for recovery. And so it proved as the massacre at
Lonmin's Marikana mine towards the end of last year reminded
everyone how precarious the supply of platinum really is.
Aquarius has been weighed down somewhat by the anticipation in
the market that it will need to raise new money at some stage, both
to bring a new project back on stream, and to re-finance existing
debt. Nonetheless, since we took our stake in Aquarius, just before
the resignation and replacement of chief executive Stuart Murray,
the value of our holding has increased by more than 10 per cent. We
would anticipate further strength in the platinum space looking
ahead.
Anglo Pacific
The value of our small investment in Anglo Pacific has improved
modestly since we bought the shares on market back in the autumn of
2012. Anglo Pacific is London's only listed royalty specialist, and
has a track record of success stretching back over two decades.
Recently, however, Rio Tinto was forced to declare force majeure at
the Kestrel mine in Australia, over which Anglo Pacific holds a
significant royalty. This has held back Anglo Pacific's shares in a
market that otherwise views the company as a safe haven in periods
of uncertainty. But operations at Kestrel are now beginning to
recover, and the benefits should flow through to Anglo Pacific.
Ascot Mining
Athol has now reduced the size of its stake in Ascot Mining by
more than 66 per cent from its peak holding of 5.1 million shares.
The decision to sell down our Ascot shares has largely been
vindicated by the uncertainty which has continued to surround the
company as it attempts to make a viable business of its projects in
Costa Rica. Recent news about a stalled funding has hurt sentiment
further, although investors will be pleased to know that the exit
price achieved by Athol was at an average higher than the current
price. Currently we hold 1.51 million Ascot shares, which comprises
approximately three per cent of the portfolio.
Amara Mining
In common with many gold companies, Amara Mining has had a
tricky few months as the gold price has fallen and investors have
wondered where the capital for big projects is likely to come from.
In Amara's case, the funding issue is less acute, partly because it
is already in production from one of its projects, Kalsaka in
Burkina Faso, and partly because a big backer has already made
itself known in the shape of Samsung. Nonetheless, Amara has set
itself a tight timetable as regards bringing a new source of ore
into the Kalsaka plant, and there has been some market scepticism
that it will achieve this, and hence a weaker share price. We
remain strong advocates of the company, however, and believe it has
one of the stronger management teams to be found on AIM.
Aureus Mining
Aureus has also suffered from negative sentiment in the gold
space as a consequence of a falling gold price. However, the
company is pressing on with development work at the New Liberty
gold project in Liberia, with a view to achieving first production
in 2014. Funding is not a pressing issue following the completion
of an US$80 million raise at the end of last year, and we fully
expect chief executive David Reading, a veteran in the space and in
the region, to make a success of this one.
Carpathian Gold
Carpathian Gold is pressing on with the development of its
Riacho dos Machados mine in Brazil, which is likely to come on
stream later this year. Initially this will be a 100,000 ounce per
year project with an eight year mine life, although the company is
continuing to drill and further increases in the resource seem
likely. If such increases do occur it could well be that output
increases as well as mine life, since the company is building spare
capacity into its plant. Meanwhile, in the background lies the
multi-million ounce Rovina project in Romania, from which news is
expected either at the end of the first quarter or in April. We
remain buyers of Carpathian, on the anticipation of a production
re-rating later in the year and positive progress at Rovina.
Chapel Down
Athol holds a GBP100,000 convertible loan note in Chapel Down,
which pays a coupon of eight per cent. Athol does not regard this
as a core holding, but will continue to retain the note either
until a reasonable offer is made for it, or until expiry and
conversion in 2014. The conversion price is currently in the
money.
EMED Mining
The value of Athol's investment in EMED Mining has increased by
around 25 per cent since we participated in a fundraising last
autumn. EMED continues to make progress with its redevelopment
plans for the famous old Rio Tinto mine in Spain, and nearly all
regulatory and administrative hurdles have now been cleared. EMED
plans to start plant construction this year, with a view to
delivering first production in 2014 and then ramping up to an
annualised 37,000 tonnes of copper-in-concentrate per year by the
end of 2015.
Jubilee Platinum
Our investment in Jubilee Platinum has improved modestly since
we participated in a fundraising last year, as part of a move into
platinum-focussed equities. Jubilee has plenty on its plate, and
has been apt to confuse investors with a plethora of different and
complex projects. However, the nub of it is that following the
acquisition of Platinum Australia, the company is now in the
position independently to go from mining ore to producing platinum
group metals, which is an almost unique position for a junior in
the platinum space to be in. It also has its own power supply, and
has been selling into the grid in South Africa for some months now.
We are holders of Jubilee on the prospect of further strength in
the platinum price.
Mwana Africa
Mwana's most recent news relates to an increased resource at its
Zani-Kodo gold project in the east of the Democratic Republic of
Congo. This looks good, but investors immediately discounted the
value of the 2.6 million ounces at 2.4 grams per tonne on the basis
of political risk. Having said that, other major gold projects are
being developed in the region. Meanwhile, production has now
resumed the Freda Rebecca mine in Zimbabwe, after a short hiatus
following a non-fatal accident. Freda Rebecca is a good little gold
mine that should provide Mwana with plenty of cash flow as it seeks
to develop Zani, and its other major undertaking, the restart of
the Bindura nickel mining and smelting complex, also in Zimbabwe.
Nickel may not be the flavour of the month right now, but most
analysts are agreed that the nickel price ought to strengthen in
around 18 months or so. If that's the case, the timing could prove
propitious for Mwana. We remain buyers of a company that has
consistently proved itself capable of operating in some of the
world's most difficult, and most discounted jurisdictions.
Northland Resources
Northland suffered a catastrophic cost blow-out at its
Kaunisvaara iron ore project in Sweden that sent its local
subsidiaries into administration. In a market that currently
favours iron ore and iron ore projects, this is particularly
disappointing, and our modest stake in Northland has now dropped
significantly in value. However, the company is now shipping
product out from the port of Narvik, so there is a real possibility
of recovery once the local financial issues are resolved.
Nyota Minerals
The company recently acquired 950,000 shares in Nyota Minerals,
after participating in a fundraising. Nyota is pressing ahead with
its Tulu Kapi gold project in Ethiopia, and is now optimising
feasibility work as it continues to negotiate with the Ethiopian
government for a mining licence. The recent placing put GBP4
million into Nyota's coffers, and was noteworthy because major
shareholders Centamin and Resource Capital Fund both participated
in a big way. Athol is already sitting on a gain of around five per
cent on this investment, less than one month on.
Sutherland Health
Around three per cent of the Athol portfolio is taken up with a
legacy investment in Sutherland Health Group. The company regards
this as non-core and will seek to dispose of this stake when a
suitable opportunity presents itself.
Toro Gold
Toro Gold is developing the Mako gold project in Senegal, and
has been adding ounces at a rapid rate. The company's management is
dynamic and consists of experienced industry players with access to
deep pools of capital. In due course Toro will list on a recognised
exchange, at which point Athol may choose either to crystallize
some value, or stay in for the development phase. Athol acquired
14,000 shares in Toro Gold, and the investment comprises around
three per cent of the portfolio.
ZincOx
Sentiment towards the base metals has been weak over the past
few months and shares in ZincOx have suffered accordingly. In
addition certain issues with the ramp up of the company's Korea
Recycling Plant knocked sentiment. But that ramp up is now
progressing well and the company is on course to hit design
capacity in the final quarter of 2013. Once the market sees clear
evidence that the plant works, we are confident the shares will
re-rate.
Alastair Ford
Chief Investment Officer
For further information please call:
Athol Gold and Value Limited
Jennifer Allsop +44 7788 451 744
Libertas Capital Corporate Finance
Limited
Sandy Jamieson +44 207 569 9650
Athol Gold and Value Limited
Statement of Comprehensive Income
for the year ended 31 December 2012
2012 2011
Notes GBP'000 GBP'000
----------------------------------------------- ------ -------- --------
Investment income 29 3
Net (losses)/gains on disposal of investments (1,428) 103
Net change in fair value of investments (622) (1,982)
(2,021) (1,876)
Operating expenses (197) (276)
----------------------------------------------- ------ -------- --------
Operating loss 3 (2,218) (2,152)
Finance cost 10 (46) (16)
Loss before taxation (2,264) (2,168)
Taxation expense 5 - -
Loss for the year from continuing operations
and total comprehensive income, attributable
to owners of the Company (2,264) (2,168)
Loss per share attributable to owners
of the Company during the year from 6 Pence Pence
continuing and total operations:
Basic (pence per share) (0.21) (0.38)
Diluted (pence per share) (0.21) (0.38)
Athol Gold and Value Limited
Statement of Financial Position
as at 31 December 2012
2012 2011
Notes GBP'000 GBP'000
-------------------------------------- ------ --------- ---------
CURRENT ASSETS
Financial assets 7 1,425 3,262
Trade and other receivables 8 17 73
Cash and cash equivalents 633 295
-------------------------------------- ------ --------- ---------
2,075 3,630
-------------------------------------- ------ --------- ---------
CURRENT LIABILITIES
Trade and other payables 9 29 49
-------------------------------------- ------ --------- ---------
29 49
-------------------------------------- ------ --------- ---------
NET CURRENT ASSETS 2,046 3,581
NON-CURRENT LIABILITIES
Convertible unsecured loan notes 10 435 434
435 434
-------------------------------------- ------ --------- ---------
NET ASSETS 1,611 3,147
-------------------------------------- ------ --------- ---------
EQUITY
Share capital 11 2,859 1,543
Share premium 4,423 3,658
Shares to be issued - 1,348
Loan note equity reserve 12 104 109
Capital reserve 15,736 15,736
Retained earnings (21,511) (19,247)
-------------------------------------- ------ --------- ---------
Equity attributable to owners of the
Company and total equity 1,611 3,147
-------------------------------------- ------ --------- ---------
Athol Gold and Value Limited
Statement of Changes in Equity
for the year ended 31 December 2011
Share Share Shares to Loan note Capital Accumulated Total
capital premium be issued reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- ---------- --------- -------- ----------- -------
At 1 January 2011 981 2,838 - 45 15,736 (17,088) 2,512
Loss for the year - - - - - (2,168) (2,168)
Total comprehensive
expense for the
year - - - - - (2,168) (2,168)
--------------------- -------- -------- ---------- --------- -------- ----------- -------
Share based payments - - - - - 9 9
Issue of loan notes - - - 100 - - 100
Conversion of loan
notes 145 - - (36) - - 109
Acquisition of
share portfolio - - 1,348 - - - 1,348
Share issues 417 888 - - - - 1,305
Share issue expenses - (68) - - - - (68)
At 31 December
2011 1,543 3,658 1,348 109 15,736 (19,247) 3,147
Loss for the year - - - - - (2,264) (2,264)
Total comprehensive
expense for the
year - - - - - (2,264) (2,264)
--------------------- -------- -------- ---------- --------- -------- ----------- -------
Repayment of loan
notes - - - (5) - - (5)
Share issues 1,316 765 (1,348) - - - 733
At 31 December
2012 2,859 4,423 - 104 15,736 (21,511) 1,611
--------------------- -------- -------- ---------- --------- -------- ----------- -------
Athol Gold and Value Limited
Statement of Cash Flows
for the year ended 31 December 2011
2012 2011
GBP'000 GBP'000
-------------------------------------------------- -------- --------
OPERATING ACTIVITIES
(Loss)/profit before taxation (2,264) (2,168)
Adjustments for:
Share based payment charge - 9
Shares issued in settlement of directors
remuneration - 23
Shares issued in settlement of professional
fees 35 93
Loss/(profit) on disposal of trading investments 1,428 (103)
Fair value loss/(gain) on trading investments 622 1,982
Investment income (29) (3)
Finance costs 46 16
-------------------------------------------------- -------- --------
Operating cashflow before working capital
changes (162) (151)
Decrease in trade and other receivables 64 20
Decrease in trade and other payables (20) (5)
-------------------------------------------------- -------- --------
Net cash outflow from operating activities (118) (136)
-------------------------------------------------- -------- --------
INVESTING ACTIVITIES
Continuing operations:
Purchases of investments (1,298) (1,773)
Disposals of investments 1,775 875
Investment income 29 3
-------------------------------------------------- -------- --------
Net cash inflow/(outflow) from investing
activities 506 (895)
-------------------------------------------------- -------- --------
FINANCING ACTIVITIES
Continuing operations:
Proceeds from share issues - 862
Share issue expenses - (68)
Proceeds from issue of convertible loan
notes - 490
Redemption of convertible loan notes (50) -
Net cash (outflow)/inflow from financing
activities (50) 1,284
-------------------------------------------------- -------- --------
Net increase in cash and cash equivalents 338 253
Cash and cash equivalents as at 1 January 295 42
Cash and cash equivalents as at 31 December 633 295
-------------------------------------------------- -------- --------
Athol Gold and Value Limited
Notes to the preliminary announcement
for the year ended 31 December 2012
1 general information
The Company was incorporated as a Corporation in the Cayman
Islands which does not prescribe the adoption of any particular
accounting framework. The Board has therefore adopted International
Financial Reporting Standards as adopted by the European Union
(IFRSs). The Company's shares are listed on the AIM market of
the London Stock Exchange.
The Company is an investment company, investing in natural resources,
minerals, metals, and oil and gas projects.
GOING CONCERN
The Directors have prepared cash flow forecasts through to 30
June 2014 which assume no significant investment activity is
undertaken unless sufficient funding is in place to undertake
the investment activity. The expenses of the Company's continuing
operations are minimal and the cash flow forecasts demonstrate
that the Company is able to meet these liabilities as they fall
due. On this basis, the Directors have a reasonable expectation
that the Company has adequate resources to continue operating
for the foreseeable future. For this reason they continue to
adopt the going concern basis in preparing the Company's financial
statements.
2 OPERATING LOSS
2012 2011
GBP'000 GBP'000
-------------------------------------------- -------- --------
Loss from operations is arrived at after
charging:
Investment management fee 8 106
Foreign exchange losses - 5
Auditors' remuneration:
- fees payable to the Company's auditors
and its
associates for the audit of the Company's
financial
statements 13 12
3 TAXATION
No provision has been made in respect of current taxation or
deferred taxation as the Company is domiciled in the Cayman
Islands and no corporation tax is applicable.
4 EARNINGS PER SHARE
The basic and diluted earnings per share is calculated by dividing
the profit/(loss) attributable to owners of the Company by
the weighted average number of ordinary shares in issue during
the year.
2012 2011
GBP'000 GBP'000
------------------------------------------- ---------------- --------------
(Loss)/profit attributable to owners
of the Company
- Continuing operations (2,264) (2,168)
- Discontinued operations - -
------------------------------------------- ---------------- --------------
(2,264) (2,168)
----------------------------------------------- ---------------- --------------
2012 2011
------------------------------------------- ---------------- --------------
Weighted average number of shares
for calculating basic earnings per
share 1,087,086,528 566,723,074
----------------------------------------------- ---------------- --------------
Weighted average number of shares
for calculating fully diluted earnings
per share* 1,087,086,528 566,723,074
----------------------------------------------- ---------------- --------------
2012 2011
pence pence
------------------------------------------- ---------------- --------------
(Loss)/earnings per share from continuing
and total operations
- Basic (pence per share) (0.21) (0.38)
- Fully diluted (pence per share) (0.21) (0.38)
----------------------------------------------- ---------------- --------------
* The weighted average number of shares used for calculating the
diluted loss per share for 2011 and 2012 was the same as that used
for calculating the basic loss per share as the effect of exercise
of the outstanding share options was anti-dilutive.
5 FINANCIAL ASSETS
2012 2011
GBP'000 GBP'000
------------------------------------------------- --------- --------
1 January 2012 - Investments at fair value 3,262 2,869
Cost of investment purchases 1,988 3,146
Proceeds of investment disposals (1,775) (875)
(Loss)/profit on disposal of investments (1,429) 103
Fair value adjustment (621) (1,981)
----------------------------------------------------- --------- --------
31 December 2012 - Investments at fair
value 1,425 3,262
----------------------------------------------------- --------- --------
Categorised as:
Level 1 - Quoted investments 981 3,073
Level 3 - Unquoted investments 444 189
1,425 3,262
The Company has adopted fair value measurements using the IFRS
7 fair value hierarchy
Categorisation within the hierarchy has been determined on
the basis of the lowest level of input that is significant
to the fair value measurement of the relevant asset as follows:
Level 1 - valued using quoted prices in active markets for
identical assets
Level 2 - valued by reference to valuation techniques using
observable inputs other than quoted prices included in Level
1.
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market criteria.
6 CONVERTIBLE UNSECURED LOAN NOTES
The outstanding convertible loan notes are zero coupon, unsecured
and unless previously purchased, redeemed or converted they
are redeemable at their principal amount between 31 December
2013 and 31 October 2015.
The net proceeds from the issue of the loan notes have been
split between the liability element and an equity component,
representing the fair value of the embedded option to convert
the liability into equity of the Company as follows:
2012 2011
GBP'000 GBP'000
----------------------------------------------------- --------- ---------
Liability component at 1 January 434 137
Nominal value of convertible loan notes
issued - 978
Equity component of convertible loan notes
issued during year - (100)
Repayment of loan notes (50) -
Loan notes converted into shares - (633)
Equity component of loan notes repaid or
converted 5 36
--------------------------------------------------------- --------- ---------
389 418
Interest charged 46 16
--------------------------------------------------------- --------- ---------
Liability component at 31 December 435 434
The interest charged during the period is calculated by applying
an effective average interest rate of 10% to the liability
component for the period since the loan notes were issued.
The Directors estimate the fair value of the liability component
of the loan notes at 31 December 2012 to be approximately GBP435,000
(2011: GBP434,000). This fair value has been calculated by
discounting the future cash flows at the market rate of 10%.
7 SHARE CAPITAL
Number of
ordinary Value
shares GBP'000
------------------------------------------- -------------- ---------
Authorised (par value of 0.25p):
At 31 December 2011 and 31 December 2012 4,000,000,000 10,000
----------------------------------------------- -------------- ---------
Issued and fully paid (par value of 0.25p
each):
At 31 December 2010 392,284,866 981
Shares issued in year 224,829,231 562
----------------------------------------------- -------------- ---------
At 31 December 2011 617,114,097 1,543
Shares issued in year 526.392.157 1,316
----------------------------------------------- -------------- ---------
At 31 December 1,143,506,254 2,859
----------------------------------------------- -------------- ---------
On 25 January 2012, 305,432,127 shares were issued at 0.444p
in respect of the acquisition of the share portfolio of Worship
Street Investments Limited.
On 8 February 2012, 1,515,152 shares were issued at 0.33p
each in respect of the acquisition of an investment.
On 21 February 2012, 207,622,728 shares were issued at 0.33p
in respect of the acquisition of the share portfolio of Agneash
Soft Commodities plc.
On 1 March 2012, 3,662,743 shares were issued at 0.37p each,
in settlement of investment management fees.
On 20 September 2012, 7,326,073 shares were issued at 0.25p
each, in settlement of professional fees.
8 SHARE OPTIONS
In November 2010 the Company granted 5,487,804 options to
directors and employees. The fair value of options granted
was determined using Black-Scholes valuation models. Significant
inputs into the calculations were as follows:
* 15% volatility based on expected share price
(ascertained by reference to historic share prices of
the Company for the 12 months prior to the date of
grant)
* share price of 0.82p per share at date of grant of
options
* exercise price of 0.82p per share
* a risk free interest rate of 3.5%
* 0% dividend yield
* estimated option life of five years.
At the year end all these options had vested and are exercisable
at any time prior to the fifth anniversary of the date of
grant. The share based payment charge for the year was nil
(2011: GBP9,000).
The movements on share options and their weighted average
exercise price are as follows:
2012 2011
Weighted Weighted
average average
exercise exercise
price price
Number (pence) Number (pence)
----------------------------- ---------- --------- --------- ---------
Outstanding at 1 January 5,487,804 0.82 5,487,804 0.82
Granted - - - -
Lapsed - - - -
Cancelled - - - -
----------------------------- ---------- --------- --------- ---------
Outstanding at 31 December 5,487,804 0.82 5,487,804 0.82
-------------------------------- ---------- --------- --------- ---------
9 POST BALANCE SHEET EVENTS
There have been no material post balance sheet events.
10 RELATED PARTY TRANSACTIONS
The chief investment officer and investment manager of the
Company, until his resignation in June 2012, was also at the
time responsible for the investment management of SF t1ps Smaller
Companies Gold Fund and SF t1ps Smaller Companies Growth Fund,
which have major shareholdings in the Company, as detailed
in the Directors' report. At 31 December 2011 management fees
of GBP13,552 were due and were settled on 1 March 2012 by the
issue of 3,662,743 shares at 0.37p each.
During the year Rivington Street Corporate Finance Limited
which was an associated company of t1ps Investment Management
(IOM) Ltd, charged the Company GBP18,315 for broking services
(2011: GBP5,000).
In January 2012 the Company made a loan of GBP25,000, by way
of a one year convertible loan, to Fast Bet Solutions plc,
a company of which Jennifer Allsop was a director.
The accounts for the year ended 31 December 2012 have been
posted to shareholders and will be laid before the Company at the
Annual General Meeting to be held on Friday 12 April 2013 at
11.00am. Copies will also available via the Company's website
www.atholgold.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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