TIDMGLR
RNS Number : 6307T
Galileo Resources PLC
17 December 2012
17 December 2012
Galileo Resources PLC
("Galileo" or "the Company" or "the Group")
Interim results for the six months ended 30 September 2012
Galileo, (AIM:GLR) the emerging African Phosphate/Rare Earth
Exploration company, announces its interim results for the six
months ended 30 September 2012.
Highlights
-- Flagship property Glenover advances into preliminary economic
assessment, with results due in Q1 2013
-- Acquired a 70% interest in Rare Earth International Limited ("REI")
-- REI's "Nkombwa Hill" project in Zambia demonstrates significant potential
-- Praetorian Resources Limited ("Praetorian") takes a strategic stake in Galileo
The directors of Galileo, the AIM listed emerging African
Phosphate/Rare Earth Exploration Company, are pleased to present
shareholders with its interim results for the six months ended 30
September 2012.
Chairman's report
This is my second interim report and I am pleased to be able to
report an excellent period between interims. An aggressive approach
to our flagship property Glenover in South Africa has brought us
closer to a production decision than we could have reasonably
expected at the time of our initial involvement with the
project.
The Rare Earth market is dominated by China and its approach to
exports. During the review period, Rare Earth product prices have
declined to more sustainable levels reflecting a more balanced
approach to marketing by all concerned. The Chinese approach to the
market has become more consistent with increased attention being
given to efficiencies and safety within its internal industry. The
Western response has included country alliances, company
partnerships and aggressive rhetoric targeted at China's
dominance.
There remains no doubt in my mind that a well-positioned
resource will have a strategic role to play in providing the West
with real alternative sources of supply of the critical Rare
Earths.
Galileo is a well-structured Rare Earth exploration and
development company. The Company has an exceptional management team
with proven technical and commercial background. The Group's
flagship property is the Glenover Phosphate concession, which was a
successful phosphate producer for many years. Phosphate, however,
is now subordinated to Rare Earth Elements ("REEs"). The project
area is known to contain significant REEs and Galileo has verified
that the grades and tonnages are potentially sufficient to justify
exploitation. With this in mind Galileo has appointed UK-based GBM
Minerals Engineering Consultants Limited ("GBM"), a British based
engineering company, to carry out a fully independent preliminary
economic assessment ('PEA') for the envisaged operation.
One of the key benefits of the project for a medium-sized
operation is the fact that a significant portion of the REE
resource is contained in stockpiles from the previous phosphate
operations. The availability of stockpiled material negates the
cost and associated risks of mining. Exploration performed by the
company has identified additional REE mineralisation outside of the
historical mining area: our aim is to investigate these mineralised
areas with the view to building a larger resource of REE.
As announced on 4 July 2012, Praetorian, a new resource focused
investment holding company, acquired a 9.03% interest in Galileo
through a share exchange and subscription agreement. Galileo is
pleased to participate in Praetorian's underlying investment model
and currently holds 4 million Praetorian shares.
Galileo has the potential, with its near term production, to
become a significant REE oxide concentrate producer. The project
has considerable potential for increasing the ore resource base.
Additionally there exists potential for other non-rare earth
contribution in the form of scandium and niobium.
Galileo is dedicated to sustainable and socially responsible
development and, as a company, to ensure that all its projects
adhere to the highest levels of environmental standards. The
Company is also a firm proponent for the role of foreign direct
investment as a key form of social development in developing
African countries.
Results
The Group reported a basic loss per share for the period under
review of 0.75 pence (2011: loss of 5.05 pence) calculated using a
basic loss of GBP584,409 (2011: GBP544,121).
During October 2012, Utafutaji Trading 112 Proprietary Limited
changed its name to Galileo Resources South Africa (Pty) Ltd
("GSA") to better reflect the company's operations and relation
with Galileo.
Glenover Rare Earth Project
The Glenover Rare Earth project ("the Glenover Project" or "the
Project"), housed by Glenover Phosphate (Pty) Ltd ("Glenover"), is
a joint venture with Fer-Min-Ore (Pty) Ltd ("FMO") and a Black
Economic Empowered partner.
Glenover has the rights to a large concession containing
phosphates in the Limpopo Province in the North West of South
Africa. Within the licence area is an open pit, formerly operated
for phosphates by Gold Fields of South Africa in the 1980s and
subsequently acquired by FMO. Historical data suggested that the
phosphate and surrounding rock minerals contained Rare Earth
Elements (REEs), which were confirmed by sampling of the previously
mined lower grade phosphate stockpiles on surface.
The presence of these stockpiles, which contain a significant
resource of REEs, represents a major potential benefit to the
Company, since these stockpiles represent potential feed to a
process plant without mining risk. The concession area is underlain
by a large carbonatite intrusion, a highly prospective geological
environment for hosting potential REE deposits.
Resource Estimate
During the period under review the Company completed its mineral
resource-definition drilling of the open pit surroundings and
issued a SAMREC compliant Mineral Resource on 14 April 2012, as
announced on 17 April 2012. The Resource Statement estimated the
remnant open pit breccia and surrounding carbonatite resource and
the stockpiles to contain a total Indicated + Inferred 28.9 million
tonnes grading 1.24% TREO + Y2O3 (total rare earth oxides and
yttrium oxide) of which 16.78 million tonnes were in the Indicated
Resource category grading at 1.45 % TREO + Y2O3. Of the Indicated
Resource, 7.41 million tonnes, grading 2.20% TREO Y2O3, are
contained in the apatite breccia and the balance of 9.37 million
tonnes grading 0.88% TREO + Y2O3 are in the carbonatite. The
Inferred Resource is estimated at 12.14 million tonnes grading 0.98
% TREO + Y2O3, of which 2.68 million tonnes are contained in the
stockpiles grading 1.94% TREO + Y2O3 and 8.74 million tonnes
grading 0.66%
TREO + Y2O3 are in the pyroxenite rocks.
Preliminary Economic Assessment ("PEA")
In August 2012, Glenover commissioned GBM as lead contractor to
undertake a compliant PEA of the Glenover Project. The PEA scope of
work includes a review of the Resource Estimate, an environmental
study, a preliminary open pit mine design and metallurgical test
work amalgamated to form an overall financial assessment. The PEA
report is anticipated in the first quarter of 2013.
New Business
On 25 July 2012 Galileo entered into an agreement with Rare
Earth International Limited ("REI") to earn-in to three rare earth
projects located in Zambia, Mozambique and Spain (the "Projects"),
in consideration for which REI will be issued with 5.25 million
Ordinary Shares in Galileo priced at the date of signing the
agreement and subject to satisfactory due diligence on title and
licence holder's standing.
REI holds the right to earn up to a 50% interest in the Zambian
"Nkombwa Hill" Project. Under the terms of the agreement, Galileo
will provide funding to REI of a minimum amount of US$1.2 million
to complete the specified exploration programme at "Nkombwa Hill"
to earn an effective 35% interest in the "Nkombwa Hill" Project.
Further funding of the project will be pro rata the interests held
by the parties to the agreement, with an option for REI to elect
that Galileo funds REI's interest by way of a loan to REI bearing
interest at Libor plus 2 % per cent and repayable from future cash
flows.
The Company's legal due diligence on title and standing of the
licence holder was recently completed and concluded that the
licence and the licence holder are in good standing save for final
letter of approval from the appropriate government department.
Following the completion of the earn-in, REI will have the
option (expiry date 31 December 2013) to sell its remaining
interest in the "Nkombwa Hill" Project to Galileo for a further
US$2 million in cash or Galileo shares.
Following the completion of a bankable feasibility study in
respect of the "Nkombwa Hill" Project, Galileo will have the option
to acquire REI's remaining interest at a price to be determined as
per the agreement.
Two boreholes historically drilled on the "Nkombwa Hill" Project
intersected 4 to 6 metres thick intervals, with elevated REEs. A
re-assay of the samples in 2010 returned values of 5% and 8% TREO.
Extensive surface sampling by REI during 2011 identified highly
prospective drilling targets one of which is 25 to 50 metres wide
zone, over which sample assays consistently report over 3% TREO -
including a high proportion assaying 5% to 10% TREO - over a
sampling strike length of 350 metres. Several outcrop samples have
been collected having in excess of 20% TREO.
The "Xiluvo" Project in Mozambique has a JORC compliant
Indicated Resource of 1.1 million tonnes of 2.05% TREO and 4.4%
phosphate (P2O5) (at a cut off 1% TREO).
Future Prospects
The PEA is progressing satisfactorily, within budget and on
time, and we are confident that we will receive a favourable
outcome allowing us to progress into a full feasibility study. The
key risk factors in a REE project are generally processing and the
work to date suggests that this will not be a fatal flaw to prevent
Galileo from progressing this project. Our scrutiny of competing
companies suggests that Glenover is extremely well positioned in
its mix of critical Rare Earths; recognising this Galileo is
committed to a fast track approach to developing the project.
Previous exploration on the "Nkombwa Hill" Project by REI
identified a number of drill ready REE targets. An initial drilling
programme has been designed to define the extent and continuity of
the REE mineralisation in the more attractive targets.
Recognising the complexity of the REE market together with
processing constraints, the Company is actively pursuing avenues
for corporate and strategic alliances in order to enhance the
overall value of the projects and to ensure a prime position in the
rapidly developing REE arena.
Colin Bird
Chairman
14 December 2012
For further information, please contact:
Colin Bird, Chairman & CEO Tel +44 (0)20 7581 4477
Andrew Sarosi, Executive Director Tel +44 (0) 1752 221937
Beaumont Cornish Limited Tel +44 (0)20 7628 3396
Nominated Advisor and Broker
Roland Cornish/James Biddle
Shore Capital Stockbrokers Limited Tel +44 (0)20 7408 4090
Joint Broker
Jerry Keen/Toby Gibbs
Gable Communications Tel +44 (0) 7193 7463
Justine James M +44 (0) 7525 324431
UNAUDITED INTERIM FINANCIAL
STATEMENTS
FOR THE 6 MONTHS ENDED 30
SEPTEMBER 2012
Six months Six months Year
ended ended ended
Notes 30 September 30 September 31 March
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
ASSETS
Non-current assets
Property, plant and equipment 851 1 065 988 897
Intangible assets 6 8 691 083 10 174 705 10 174 642
Investment in joint ventures 7 2 213 172 - 1 519 841
Loans receivable 320 827 238 310 1 015 912
Other financial assets 8 415 405 519 623 5
---------------- ---------------- -----------------
11 641 338 11 998 626 12 711 297
Current assets
Trade and other receivables - 16 438 -
Cash and cash equivalents 2 696 246 2 403 669 2 722 932
---------------- ---------------- -----------------
Total Assets 14 337 584 14 418 733 15 434 229
---------------- ---------------- -----------------
EQUITY AND LIABILITIES
Equity
Share capital 9 3 902 859 3 535 002 3 777 859
Share premium 9 13 489 511 11 219 309 12 614 511
Reserves 6,10 (670 380) - 791 761
Accumulated loss (2 410 924) (581 067) (1 826 515)
---------------- ---------------- -----------------
14 311 066 14 173 244 15 357 616
---------------- ---------------- -----------------
Liabilities
Current liabilities
Trade and other payables 26 518 245 489 76 613
---------------- ---------------- -----------------
Total Equity and liabilities 14 337 584 14 418 733 15 434 229
---------------- ---------------- -----------------
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Six months Six months Year
Notes ended ended ended
30 September 30 September 31 March
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue - - 19 164
Operating expenses (619 914) (550 932) (1 836 034)
---------------- ----------------- -----------------
Operating loss (619 914) (550 932) (1 816 870)
Investment income 22 446 6 811 10 295
Income/(loss) from equity
accounted investments 13 059 - (29 340)
Finance costs - - (20)
---------------- ----------------- -----------------
Loss for the period (584 409) (544 121) (1 835 935)
Other comprehensive income:
Exchange differences on translating
foreign operations 6 (1 462 141) (46 366) 4 623
---------------- ----------------- -----------------
Total comprehensive loss (2 046 550) (590 487) (1 831 312)
---------------- ----------------- -----------------
Total comprehensive loss
attributable to:
Owners of the parent (2 046 550) (590 487) (1 831 312)
Number of shares in issue 83 057 183 70 700 040 78 200 040
Weighted and diluted average
number of shares in issue 77 611 347 11 700 040 47 111 047
Loss per share - pence
Basic and diluted loss per
share 5 (0.75) (4.65) (3.90)
Headline loss per share 5 (0.75) (4.65) (3.90)
CONSOLIDATED
STATEMENT OF
CHANGES IN EQUITY
Share Capital Share Premium Total Share Foreign Share Total Accumulated Total equity
Capital currency based reserves loss
Figures in Pound translation payment
Sterling reserve reserve
Balance at 01
April 2011 585 002 599 309 1 184 311 - - - 9 420 1 193 731
Changes in equity
Total
comprehensive
income
for the 6 months - - - - - - (590 487) (590 487)
2 950 10 620 13 570
Share issues 000 000 000 - - - 13 570 000
---------------- ---------------- ---------------- ------------ ------------- ------------- ------------------ -------------------
2 950 10 620 13 570
Total changes 000 000 000 - - - (590 487) 12 979 513
---------------- ---------------- ---------------- ------------ ------------- ------------- ------------------ -------------------
Balance at 30 3 535 11 219 14 754
September 2011 002 309 311 - - - (581 067) 14 173 244
Changes in equity
Total
comprehensive
income (1 245
for the 6 months - - - 4 622 787 139 791 761 448) (453 687)
1 457
Share issues 242 857 143 1 700 000 1 700 000
Share issue and
other costs - (61 941) (61 941) (61 941)
1 395 (1 245
Total changes 242 857 202 1 638 059 4 622 787 139 791 761 448) 1 184 372
---------------- ---------------- ---------------- ------------ ------------- ------------- ------------------ -------------------
Balance at 31 3 777 12 614 16 392 (1 826
March 2012 859 511 370 4 622 787 139 791 761 515) 15 357 616
---------------- ---------------- ---------------- ------------ ------------- ------------- ------------------ -------------------
Changes in equity
Total
comprehensive
income (1 462 (1 462
for the 6 months - - - 141) - 141) (584 409) (2 046 550)
Share issues
(after conversion
to no par value 1 000
shares) - 000 1 000 000 - - - - 1 000 000
1 000
Total changes - 000 1 000 000 (1 462 141) - (1 462 141) (584 409) (1 046 550)
---------------- ---------------- ---------------- ------------ ------------- ------------- ------------------ -------------------
Balance at 30 3 777 13 614 17 392 (1 457 (2 410
September 2012 859 511 370 519) 787 139 (670 380) 924) 14 311 066
---------------- ---------------- ---------------- ------------ ------------- ------------- ------------------ -------------------
ABRIDGED CONSOLIDATED STATEMENT
OF CASH FLOW
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Cash used in operations (403 627) (367 707) (634 703)
Interest income 22 446 6 811 10 295
Finance costs - - (20)
---------------------- ---------------------- ------------
Net cash from operating activities (381 181) (360 896) (624 428)
---------------------- ---------------------- ------------
Purchase of property, plant
and equipment - - (897)
Increase in investments in associates
and joint ventures (680 271) (11 636 869) (1 549 186)
Decrease/(Increase) in loans
to group companies 695 085 - (1 015 912)
Sale of financial assets (660 319) - (104 802)
---------------------- ---------------------- ------------
Net cash from investing activities (645 505) (11 636 869) (2 670 797)
---------------------- ---------------------- ------------
Proceeds on share issue 1 000 000 13 570 000 5 186 723
---------------------- ---------------------- ------------
Net cash flows from financing
activities 1 000 000 13 570 000 5 186 723
Total cash movement for the
6 months (26 686) 1 572 235 1 891 498
Cash at the beginning of the
6 months 2 722 932 831 434 831 434
---------------------- ---------------------- ------------
Total cash at end of the 6 months 2 696 246 2 403 669 2 722 932
---------------------- ---------------------- ------------
Statement of Responsibility for the six months ended 30
September 2012
The directors are responsible for preparing the consolidated
interim financial statements for the six months ended 30 September
2012 and they acknowledge, to the best of their knowledge and
belief, that:
-- the consolidated interim financial statements for the six
months ended 30 September 2012 have been prepared in accordance
with IAS 34 - Interim Financial Reporting, as adopted by the
EU;
-- the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of interim financial statements and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the group during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Colin Bird Chairman and Chief Executive Officer
Dr Robin Edward Harmer Technical Director
Andrew Francis Sarosi Finance & Corporate Development Director
J Richard Wollenberg Non-Executive director
Christopher Molefe Non-Executive Director
14 December 2012
Notes to the Financial Statements
1. Status of interim report
The consolidated interim financial statements for the six months
ended 30 September 2012 and the comparative period have been
prepared using applicable International Financial Reporting
Standards adopted by the EU ("IFRS"), which include IAS 34 and
Interpretations issued by the International Accounting Standards
Board ("IASB") and its committees, which are expected to be
endorsed by the EU. The interim financial information has been
prepared in accordance with the Listing Rules of the Financial
Services Authority and was approved by the board on 14 December
2012. They are unaudited and do not comprise statutory accounts
within the meaning of section 435 (1) of the Companies Act
2006.
The comparative figures for the financial year ended 31 March
2012 are not the company's statutory accounts for that financial
year but the consolidated accounts. Those accounts have been
reported on by the company's auditors and delivered to the
registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not give any reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under sections 498 (2) or (3) of the Companies Act 2006, relating
to the accounting records of the company.
2. Basis of preparation
Basis of consolidation
The consolidated accounts comprise the accounts of the parent
company and all its subsidiaries and included the group's interest
in its associate until the date of its dissolution. They will
include the group's interest in its joint venture when its
formation is complete.
Entities over which the group has the ability to exercise
control are accounted for as subsidiaries. Entities that are not
subsidiaries or joint ventures but where the group has significant
influence (i.e. the power to participate in the financial and
operating policy decisions) are accounted for as associates.
The results and assets and liabilities of the associate were
included in the consolidated accounts using the equity method of
accounting.
The results and assets and liabilities of the joint venture will
be included in the consolidated accounts using the equity method of
accounting.
The results of businesses acquired or disposed of in the year
are consolidated from or up to the effective date of acquisition or
disposal respectively. The net assets of businesses acquired are
incorporated in the consolidated accounts at their fair values at
the date of acquisition.
Transactions and balances between group companies are
eliminated. No profit is taken on transactions between group
companies and the group's share of profits on transactions with its
associate was also eliminated.
In the parent company balance sheet, businesses acquired by the
parent company from other group companies are incorporated at book
value at the date of acquisition. Where the consideration given
exceeds the book value of the net assets acquired this difference
is accounted for as goodwill.
Accounting policies
The accounting policies and methods of computation have been
applied consistently throughout the group and are consistent with
those for the financial year ended 31 March 2012.
Use of estimates and judgments
The preparation of financial statements in conformity with IRFS
requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expense. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected. The key areas in which estimates have been used and the
assumptions applied are in valuing investments and in the
calculation of provisions.
Intangible assets - intellectual property rights
Separately acquired intellectual property rights are shown at
historical cost.
Intellectual property rights are regarded as having an
indefinite useful life. Based on all relevant information there is
effectively no limit to the period over which the asset is expected
to generate net cash inflows. Accordingly, amortisation is not
provided for on the intellectual property, but it is tested for
impairment annually and whenever there is an indication that the
asset may be impaired.
Intangible assets - exploration and evaluation assets
Exploration and evaluation costs, including the costs of
acquiring licences, are capitalised as exploration and evaluation
assets on an area of interest basis.
Exploration and evaluation assets are only recognised if the
rights of the area of interest are current and either:
-- the expenditures are expected to be recouped through
successful development and exploitation of the area of interest;
or
-- activities in the area of interest have not at the reporting
date, reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves and
active and significant operations in, or in relation to, the area
of interest are continuing.
Exploration and evaluation assets are assessed for impairment
if: (i) sufficient data exists to determine technical feasibility
and commercial viability and (ii) facts and circumstances suggest
that the carrying amount exceeds the recoverable amount. For the
purposes of impairment testing, exploration and evaluation assets
are allocated to cash-generating units to which the exploration
activity related.
Exploration and evaluation assets are carried forward in the
balance sheet under intangible assets.
Intangible assets - goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the group's share of the net identifiable
assets of the acquired subsidiary at the date of acquisition.
Goodwill on acquisitions of subsidiaries is included in 'intangible
assets'. Goodwill is tested annually for impairment and carried at
cost less accumulated impairment losses. Impairment losses on
goodwill are not reversed. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the
entity sold.
Goodwill is allocated to cash-generating units for the purpose
of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are
expected to benefit from the business combination in which the
goodwill arose, identified according to operating segment.
Investments
Investments are initially measured at cost. They are measured at
subsequent reporting dates at cost less provision for impairment
where they relate to unquoted equity investments where fair value
cannot be readily determined, and at fair value otherwise.
Foreign currency transactions
A foreign currency transaction is recorded, on initial
recognition in Pounds Sterling, by applying to the foreign currency
amount the spot exchange rate between the functional currency and
the foreign currency at the date of the transaction.
At the end of the reporting period, foreign currency monetary
items are translated using the closing rate. Exchange differences
arising on the settlement of monetary items or on translating
monetary items at rates different from those at which they were
translated on initial recognition during the period or in previous
periods are recognised as gains or losses in the period in which
they arise.
Any goodwill arising on the acquisition of a foreign operation
and any fair value adjustments to the carrying amounts of assets
and liabilities arising on the acquisition of that foreign
operation shall be treated as assets and liabilities of the foreign
operation. Thus they shall be expressed in the functional currency
of the foreign operation and shall be translated at the closing
rate
Share based payments
In accordance with IFRS 2 "Share-based payments", the company
reflects the economic cost of awarding shares and share options to
directors and employees by recording an expense in the statement of
comprehensive income equal to the fair value of the benefit
awarded, fair value being determined by reference to option pricing
models. The expense is recognised in the statement of comprehensive
income over the vesting period of the award.
Fair value of share options granted
The fair values of services received in return for share options
granted are measured by reference to the fair value of share
options granted. The estimate of the fair value of the option is
measured based on a Black Scholes model (with the contractual life
of the option built into the model).
Going concern
The group has sufficient financial resources to enable it to
continue in operational existence for the foreseeable future, to
continue the current development programme and meet its liabilities
as they fall due. Accordingly, the directors consider it
appropriate to continue to adopt the going concern basis in
preparing these interim financial statements.
3. Segmental analysis
Business segments
The Group's only business is the exploration and development of
Rare Earths and Aggregates.
Geographical segments
An analysis of the loss on ordinary activities before taxation
and net assets is given below:
Six months Six months Year
ended 30 ended 30
September September ended
2012 2011 31 March
(Unaudited) (Unaudited) 2012
(Audited)
GBP GBP GBP
Loss on ordinary activities
before taxation
United Kingdom (597,468) (574,047) (1,806,595)
South Africa 13,059 (16,440) (29,340)
(584,409) (590,487) (1,835,935)
------------ ------------ ------------
Net assets by location
United Kingdom 5,204,058 2,065,403 5,080,268
South Africa 9,107,008 12,107,841 10,277,348
------------ ------------ ------------
14,311,066 14,173,244 15,357,616
------------ ------------ ------------
4. Taxation
The tax position for the period is estimated on the basis of the
anticipated tax rates applying for the full year and includes
adjustments to the prior year charge based upon final computations
for that period.
Deferred tax is recognised, without discounting, in respect of
all timing differences between the treatment of certain items for
taxation and accounting purposes which have arisen but not reversed
by the balance sheet date, except as otherwise required by IFRS
19.
Deferred tax assets are recognised to the extent that on the
basis of all available evidence, it can be regarded as more likely
than not that there will be suitable taxable profits from which the
future reversal of underlying timing differences can be
deducted.
5. Earnings per share
Earnings per share has been calculated using the loss for the
period of GBP584,409 (September 2011: loss of GBP590,487; March
2012 a loss of GBP1,835,935) and the weighted average number of
shares as follows:
At 30 At 30 At 31
September September March
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
Basic and diluted 77,611,347 11,700,040 47,111,047
6. Intangible assets
The intangible asset of GBP8.7 million represents the value
attached to assets identified in a subsidiary of Skiptons, namely
Glenover, situated in South Africa.
The carrying amount of the exploration and evaluation asset
identified, on acquisition as part of the purchase price
allocation, is treated as assets of Glenover. The Rand amount
attached to the exploration and evaluation asset on acquisition was
ZAR116.8 million. The asset must be expressed in the functional
currency of the foreign operation and shall be translated at the
closing rate at the end of each reporting period. As at 30
September 2012 this amount represents GBP8.7 million. The
translation difference of R1,5 million was allocated to a foreign
currency translation reserve through other comprehensive income.
This reserve forms part of equity.
7. Investment in joint venture
In terms of a share subscription and funding agreement entered
into between GSA, FMO and Galagen, GSA would be able to earn in up
to a 51% interest in Glenover for an expenditure of US$7million
with further options to increase its interest to 74% at agreed
prices.
During the period under review, GSA provided funding in an
amount of GBP611,161. At 30 September 2012 the total funding
provided amounted to GBP1.2million which amount was converted into
Glenover ordinary shares, resulting in an increase in Galileo's
investment in Glenover. At 30 September 2012, Galileo owns an
effective interest of 22.26% in Glenover.
Galileo's portion of the loss in the joint venture for the
period under review amounted to GBP13,059.
8. Other financial assets
Included in other financial assets is a loan from GSA to
Brightwater Trade & Invest 55 (Pty) Limited of GBP320,827. This
loan is not repayable within the next twelve months.
9. Issue of ordinary shares
In July 2012 the Company entered into a Share Exchange Agreement
(the "Exchange Agreement") with AIM-quoted Praetorian Resources
Limited ("Praetorian") and a subscription agreement with Praetorian
for a placing of 2.5 million Galileo ordinary shares for GBP1
million cash, in terms of which Galileo agreed to exchange 5
million of its ordinary shares of GBP0.05 each at a strike price of
GBP0.40 ("Exchange Shares") for 4 million Praetorian ordinary
shares of nil par value with Subscription Shares of nil par value
attached on a 1 for 2 basis at a price of GBP0.50.
10. Share based payments
By option certificates dated 1 September 2011, each of the
following directors, key management and advisors was granted an
option to subscribe at a price of 23 pence per share for a number
of ordinary shares of 10 pence each:
Number of
Ordinary Shares
---------------------- -----------------
Colin Bird 500,000
Alex Andersson 250,000
Andrew Sarosi 250,000
Chris Molefe 250,000
J Richard Wollenberg 2,500,000
Beaumont Cornish 100,000
---------------------- -----------------
Total 3 850 000
---------------------- -----------------
No charge has been recognised in the Statement of Comprehensive
Income for the period under review, as the options vested on
Admission to trading on AIM on 26 September 2011.
11. Availability of the Interim Results
Copies of the Interim Results for the six months ended 30
September 2012 will be mailed to shareholders and will also be
available to shareholders and members of the public in hard copy
and free of charge, from the Company's London office at 4th floor 2
Cromwell Place, London SW7 2JE, United Kingdom. Alternatively a
downloadable version is available from Company's website:
www.galileoresources.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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