TIDMURU
RNS Number : 3157Y
URU Metals Limited
30 December 2019
URU Metals Limited
("URU Metals" or "the Company")
Interim Results
URU Metals is pleased to announce its interim results for the
period ended 30 September 2019.
Chairman's Statement
I am pleased to present to our shareholders and stakeholders the
consolidated financial statements of the Group for the period ended
30 September 2019.
The exciting Zebediela Project remains the focus of the
Company's activities. Geological modelling using historical data
and the information from surrounding projects has improved the
likelihood of proving up a resource with higher nickel grades and
associated platinum group metals mineralization close to surface,
helping with advancing the project to a mining stage.
Highlights
The highlights of our progress during the six months ended 30
September 2019 and to the date of this report can be summarised as
follows:
Zebediela Nickel Project
Good progress continues to be made on the various licensing
aspects of the project. An application for a mining right over the
Zebediela Project was made and accepted in August 2019. The mining
right application was submitted over the portions of the four farms
that comprise the Zebediela Project, namely portions of the farms
Uitloop 3 KS, Bloemhof 4 KS, Amatava 41 KS and Piet Potgietersrust
Town and Townlands 44 KS, totaling approximately 4,661
hectares.
A major component of the mining right application process is the
environmental authorization process, which consists of a scoping
phase and an environmental impact assessment phase. The public
consultation process for the scoping phase ended on 02 December
2019 and a public open day was held on 14 November 2019. Over 103
interested and affected parties ("I&AP's") attended the open
day and the comments received were incorporated into the Final
Scoping Report which was submitted to the South African Department
of Mineral Resources and Energy ("DMRE") for review on 10 December
2019. The scoping phase of the study is conducted in order to:
(a) Identify the relevant polices and legislation relevant to the activity;
(b) Motivate the need and desirability of the proposed activity,
including the need and desirability of the activity in the context
of the preferred location;
(c) Identify and confirm the preferred activity and technology
alternatives through an impact and risk assessment and ranking
process;
(d) Identify and confirm the preferred site, through a detailed
site selection process, which includes an impact and risk
assessment process inclusive of cumulative impacts and a ranking
process of all the identified alternatives focusing on the
geographical, physical, biological, social, economic, and cultural
aspects of the environment;
(e) Identify the key issues to be addressed in the assessment phase;
(f) Agree on the key issues addressed in the assessment phase,
including the methodology to be applied, the expertise required as
well as the extend of further consultation to be undertaken to
determine the impacts and risks the activity will impose on the
preferred site through the life of the activity, including the
nature, significance, consequence, extent, duration and probability
of the impacts to inform the location of the development footprint
within the preferred site; and
(g) Identify suitable measures to avoid, manage, or mitigate
identified impacts and to determine the extent of the residual
risks that need to be managed and monitored.
A positive response on the submitted scoping report is expected
from the DMRE in Q1 2020, whereby the Environmental Impact
Assessment phase of the Environmental Authorisation will commence.
This is then expected to take about 12 months to complete. The team
remains excited about the progress made on the project and
continues to strategically align the project for development on the
back of the high nickel and palladium prices.
Investment in Management Resource Solutions PLC (MRS)
On 1 March 2017, The Company acquired 7,550,000 shares of
Management Resource Solutions Plc ("MRS") from Scopn Pty Ltd.
("Scopn") at a price of GBP0.05 per share. As consideration the
Company issued to Scopn 25,166,666 new shares of the Company (each
at an implied price of GBP0.045). On 10 April 2017 the Company
subscribed for an additional 10,000,000 shares of MRS at a price of
GBP0.05 per share for total cash consideration of GBP500,000
bringing the Company's aggregate interest in MRS to 17,550,000
shares (representing 9.59% of its current issued share capital).
The Group believed operational efficiencies can be realised to
restore MRS' profitability and the potential exists for significant
revenue growth as a result of re-opening and/or expanding of mining
operations in New South Wales, coupled with the continual demand
for New South Wales coal from the Chinese, South Korean and
Japanese markets.
On 5 May 2017, trading in MRS shares resumed on the AIM market
of the London Stock Exchange.
On 04 September 2019, MRS requested a temporary suspension of
trading on AIM of its shares with immediate effect following
notification that an Australian firm providing insolvency
solutions, stating that certain of their officers have been
appointed as Voluntary Administrators of five of the Company's
operating subsidiaries pursuant to Section 436C of the Corporations
Act 2001. On 19 September 2019, MRS announced that two of its main
subsidiaries in Australia, Bachmann Plant Hire Pty Ltd ("BPH") and
MRS Subzero Pty Ltd (trading as MRS Services Group, "MRSSG"), were
put in voluntary administration. Accordingly, the Group impaired
the investment in MRS during the year ended 31 March 2019.
Subsequently MRS announced on 23 December 2019 that the
administrators have advised that at the concurrent meeting of
creditors on 19 December 2019, it was resolved that the companies
(Bachmann Plant Hire Pty Ltd, MRS Services Group Pty Ltd, MRS
Property No1 Pty Ltd, Holdings (MRS) Pty Ltd and Management
Resource Solutions Pty Ltd, the "companies") will be wound up
voluntarily and Jirsch Sutherland be appointed as Joint and Several
Liquidators. The MRS is continuing to explore options for a solvent
future for MRS in order to avoid liquidation and further
announcements will be made by MRS as appropriate.
Financial Position
As at 30 September 2019, the Company had cash and cash
equivalents of $78,000. The Company continues to manage its working
capital position carefully and will need to raise further capital
in the future.
Outlook
URU continues to believe that the long-term fundamentals of the
base minerals industries remain positive and will be working hard
in the coming year to unlock the value of our projects for our
shareholders. The Company maintains its core strategy to develop
its nickel assets, as the Board anticipates growing demand and
price appreciation for nickel in the short to medium term.
Jay Vieira
Non-executive Chairman
30 December 2019
Condensed Consolidated Interim Statement of Comprehensive Income
For the Period Ended 30 September 2019
(Unaudited)
----------------------------------------------------------------
Administrative expenses (263 ) (408 )
------------------------------------------------------ ----------- ---------
Operating loss (263 ) (408 )
Net loss for the period (263 ) (408 )
------------------------------------------------------ ----------- ---------
Other comprehensive income
Items that will be reclassified subsequently
to income
Unrealised loss on financial assets at
fair value through OCI - 143
Effect of translation of foreign operations 33 (17)
------------------------------------------------------ ----------- ---------
Other comprehensive income for the period 33 126
------------------------------------------------------ ----------- ---------
Total comprehensive loss for the period (230 ) (282 )
------------------------------------------------------ ----------- ---------
Basic and diluted net loss per share (USD
cents) (29.49 ) (52.27 )
------------------------------------------------------ ----------- ---------
Weighted average number of common shares outstanding 779,944 780,571
------------------------------------------------------ ----------- ---------
The loss per share calculation relates to both continuing and
total operations.
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
Condensed Consolidated Interim Statement of Financial Position
As at 30 September 2019
Unaudited
--------------------------------------------------------------
As at As at
30 September 31 March
2019 2019
$'000 $'000
---------------------------------------- ------------ --------
ASSETS
Non-current assets
Property, plant and equipment (note 8) 24 43
Intangible assets (note 9) 2,673 2,471
Long-term prepaid assets (note 7) 41 41
----------------------------------------- ------------ --------
Total non-current assets 2,738 2,555
Current assets
Trade and other receivables (note 11) 67 64
Cash and cash equivalents 78 475
----------------------------------------- ------------ --------
Total current assets 145 539
----------------------------------------- ------------ --------
Total assets 2,883 3,094
----------------------------------------- ------------ --------
EQUITY AND LIABILITIES
Equity
Share capital (note 12) 7,806 7,806
Share premium (note 12) 46,938 46,938
Other reserves 1,063 1,030
Accumulated deficit (54,102) (53,839)
----------------------------------------- ------------ --------
Total equity 1,705 1,935
----------------------------------------- ------------ --------
Current liabilities
Trade and other payables (note 14) 1,178 1,159
----------------------------------------- ------------ --------
Total liabilities 1,178 1,159
----------------------------------------- ------------ --------
Total equity and liabilities 2,883 3,094
----------------------------------------- ------------ --------
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
Condensed Consolidated Interim Statement of Cash Flows
For the Period Ended 30 September 2019
Unaudited
------------------------------------------------------
Cash flows from operating activities
Net loss for the period (263) (408)
Adjustments for:
Depreciation 20 20
Impairment of intangible asset -
Impairment of financial assets at fair value through OCI -
Unrealised foreign exchange gain (7) 124
Changes in non-cash working capital items:
Decrease/(increase) in receivables (3)3 (1)
Increase in trade and other payables 19 153
------------------------------------------------------------ ---- ------
Net cash used in operating activities (243) (112)
------------------------------------------------------------ ---- ------
Investing activities
Purchase of financial assets at fair value through OCI - -
Purchase of intangible assets (163) (229)
------------------------------------------------------------ ---- ------
Net cash used in investing activities (163) (1,056)
------------------------------------------------------------ ---- ------
Financing activities
Net proceeds from exercise of share options - -
----------------------------------------------------------- ---- ------
Net cash generated by financing activities - -
----------------------------------------------------------- ---- ------
Loss on exchange rate changes on cash and cash equivalents - (12)
------------------------------------------------------------ ---- ------
Net decrease in cash and cash equivalents (397) (353)
Cash and cash equivalents, beginning of period 475 1,317
------------------------------------------------------------ ---- ------
Cash and cash equivalents, end of period 78 964
------------------------------------------------------------ ---- ------
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity
30 September 2019
Unaudited
---------------------------------------------------------------------------
Equity attributable to shareholders
Share Foreign
Option Currency
Shares and
Share Share to be Warrants Translation Accumulated
Capital Premium Issued Reserve Reserve Deficit Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------- ------- ------- ------ ---------- ----------- ----------- -----
At 31 March
2018 7,806 49,938 - 2,344 (964) (50,672) 5,452
Net loss and
comprehensive
loss for the
period - - - - 126 (408) (282)
--------------- ------- ------- ------ ---------- ----------- ----------- -----
At 30 September
2018 7,806 46,938 - 2,344 (838) (51,080) 5,170
--------------- ------- ------- ------ ---------- ----------- ----------- -----
At 31 March
2019 7,806 46,938 - 2,344 (1,314) (53,839) 1,935
Net loss and
comprehensive
loss for the
period - - - - 33 (263) (230)
--------------- ------- ------- ------ ---------- ----------- ----------- -----
At 30 September
2019 7,806 46,938 - 2,344 (1,281) 54,102 1,705
--------------- ------- ------- ------ ---------- ----------- ----------- -----
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
Notes to Condensed Consolidated Interim Financial Statements
30 September 2019
Unaudited
------------------------------------------------------------
1. General information
URU Metals Limited (the "Company"), formerly known as Niger
Uranium Limited, and before that, as UraMin Niger Limited, was
incorporated in the British Virgin Islands ("BVI") on 21 May 2007.
The Company's shares were admitted to trading on AIM, a market
operated by the London Stock Exchange on 12 September 2007. The
address of the Company's registered office is Intertrust, P.O. Box
92, Road Town, Tortola, British Virgin Islands, and its principal
office is Suite 401, 4 King Street West, Toronto, Ontario, Canada,
M5H 1A1.
On 21 November, 2018, the Company resolved to re--organise the
Company's share capital by combining all of the Existing Ordinary
Shares on the basis of one new ordinary share of no par value ('New
Ordinary Share') for every 1,000 Existing Ordinary Shares, such
shares having the same rights and being subject to the same
restrictions as the Existing Ordinary Shares as set out in the
Articles of the Company ('Consolidation'). All references to common
shares, stock options and warrants have been fully retrospectively
restated to reflect the Consolidation.
The unaudited condensed consolidated interim financial
statements of the Group for the period ended 30 September 2019
comprise the Company and its subsidiaries.
2. Nature of operations
During the six months ended 30 September 2019, the Group's
principal business activities were the exploration and development
of mineral properties in South Africa.
The business of mining and exploring for minerals involves a
high degree of risk and there can be no assurance that planned
exploration and development programs will result in profitable
mining operations. The Group has not yet established whether its
mineral properties contain reserves that are economically
recoverable. Changes in future conditions could require material
write-downs of the carrying values of mineral properties.
The Group is in the exploration stage and is subject to the
risks and challenges similar to other companies in a comparable
stage of development. These risks include, but are not limited
to:
-- Dependence on key individuals;
-- receipt and maintenance of all required exploration permits and property titles;
-- successful development; and
-- as noted above, the ability to secure adequate financing to meet the minimum capital required
to successfully develop the Group's projects and continue as a going concern.
3. Basis of preparation
(a) Statement of compliance
The Company applies IFRS as issued by the International
Accounting Standards Board ("IASB"). These unaudited condensed
consolidated interim financial statements have been prepared in
accordance with International Accounting Standard 34, Interim
Financial Reporting. Accordingly, they do not include all of the
information required for full annual financial statements required
by IFRS as issued by the IASB.
3. Basis of preparation (continued)
(a) Statement of compliance (continued)
The policies applied in these unaudited condensed consolidated
interim financial statements are based on IFRSs issued and
outstanding as of 30 December 2019, the date the Board of Directors
approved the statements. The same accounting policies and methods
of computation are followed in these unaudited condensed
consolidated interim financial statements as compared with the most
recent annual consolidated financial statements as at and for the
year ended 31 March 2018. Any subsequent changes to IFRS that are
given effect in the Company's annual consolidated financial
statements for the year ending 31 March 2019 could result in
restatement of these unaudited condensed consolidated interim
financial statements.
(b) New accounting standards and interpretations
The Group adopted the following Standards and Interpretations on
1 April, 2019:
-- IFRS 16, 'Leases"
-- IFRS 10 and IAS 28 (amendments), 'Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture'
-- Amendments to IFRS 2, 'Classification and Measurement of
Share--based Payment Transactions'
-- Amendments to IAS 7, 'Disclosure Initiative'
-- Amendments to IAS 12, 'Recognition of Deferred Tax Assets for Unrealised Losses'
The adoption of these Standards listed above did not have a
material impact on the Group in future periods.
IFRS 16 is a significant change to lessee accounting and all
leases will require balance sheet recognition of a liability and a
right--of--use asset except short term leases and leases of low
value assets. The effect on the Group was immaterial as the Group
is currently not a party to any material operating leases as lessee
or lessor.
A number of IFRS and IFRIC interpretations are also currently in
issue which are not relevant for the Group's activities and which
have not therefore been adopted in preparing these consolidated
financial statements.
4. Financial risk management
The Group's Board of Directors monitors and manages the
financial risks relating to the operations of the Group. These
include credit risk, liquidity risk and market risk which includes
foreign currency and interest rate risks.
Credit risk
Credit risk is the risk of loss associated with a counterparty's
inability to fulfill its payment obligations. The Group's credit
risk is primarily attributable to the Group's cash and cash
equivalents and trade and other receivables. The Group has no
allowance for impairment that might represent an estimate of
incurred losses on other receivables. The Group has cash and cash
equivalents of $78,000 (31 March 2019 -- $475,000), which represent
the maximum credit exposure on these assets. As at 30 September
2019, the majority of the cash and cash equivalents were held with
a major Canadian chartered bank from which management believes the
risk of loss to be minimal.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
Typically the Group tries to ensure that it has sufficient cash
on demand to meet expected operational expenses for a period of
twelve months, including the servicing of financial obligations;
this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted. Management monitors the rolling
forecasts of the Group's liquidity reserve on the basis of expected
cash flows.
The following are the contractual maturities of financial
liabilities:
6 months
Carrying Contractual 6 months to 5
amount cash flows or less years
$'000 $'000 $'000 $'000
------------------------- -------- ----------- -------- --------
30 September 2019
Trade and other payables 1,178 1,178 1,178 -
-------------------------- -------- ----------- -------- --------
31 March 2019
Trade and other payables 1,159 1,159 1,159 -
-------------------------- -------- ----------- -------- --------
Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's loss or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
Foreign currency rate risk
The Group, operating internationally, is exposed to currency
risk on purchases that are denominated in a currency other than the
functional currency of the Group's entities, primarily Pound
Sterling ("GBP"), the Canadian Dollar ("CAD"), the South African
Rand ("ZAR"), Swedish Krona ("SEK") and the US Dollar ("USD").
The Group does not hedge its exposure to currency risk.
In respect of other monetary assets and liabilities denominated
in foreign currencies, the Group's policy is to ensure that its net
exposure is kept to an acceptable level by buying or selling
foreign currencies at spot rates when necessary to address short
term imbalances.
The Group's exposure to foreign currency risk, based on notional
amounts, was as follows:
USD GBP SEK CAD Total
$'000 $'000 $'000 $'000 $'000
---------------------------- ----- ----- ----- ----- ------
30 September 2019
Cash and cash equivalents - 54 - 24 78
Trade and other receivables - - - 67 67
Trade and other payables - (201) (53) (924) (1,178)
----------------------------- ----- ----- ----- ----- ------
31 March 2019
Cash and cash equivalents - 466 - 9 475
Trade and other receivables - - - 64 64
Trade and other payables - (201) (53) (905) (1,159)
----------------------------- ----- ----- ----- ----- ------
Interest rate risk
The financial assets and liabilities of the Group are subject to
interest rate risk, based on changes in the prevailing interest
rate. The Group does not enter into interest rate swap or
derivative contracts. The primary goal of the Group's investment
strategy is to make timely investments in listed or unlisted mining
and mineral development properties to optimise shareholder value.
Where appropriate, the Group will act as an active investor and
will strive to advance corporate actions that deliver value adding
outcomes. The Group will undertake joint ventures with companies
that have the potential to realise value through mineral project
development, and invest substantially in those joint ventures to
advance asset development over the near term.
Market risks
Sensitivity analysis
A 10% strengthening of the USD against the following currencies
at the year end would have increased/(decreased) equity and profit
or loss by the amounts shown below. This was determined by
recalculating the USD balances held using a 10% greater exchange
rate to the USD. This analysis assumes that all other variables, in
particular interest rates, remain constant.
30 September 2019 31 March 2019
Equity Profit or loss Equity Profit or loss
$'000 $'000 $'000 $'000
---- ------ -------------- ------ ------------------------
GBP - 15 - (27)
CAD - 83 - 83
SEK - 5 - 6
----- ------ -------------- ------ ------------------------
5. Capital risk management
The Group includes its share capital, share premium, reserves
and accumulated deficit as capital. The Group's objective is to
maintain a flexible capital structure which optimises the costs of
capital at an acceptable risk. In light of economic changes and
with the risk characteristics of the underlying assets, the Group
manages the capital structure and makes adjustments to it. As the
Group has no cash flow from operations and in order to maintain or
adjust the capital structure, the Group may issue new shares, issue
debt and/or find a strategic partner. The Group is not subject to
externally imposed capital requirements.
The Group prepares annual expenditure budgets to facilitate the
management of its capital requirements and updates them as
necessary depending on various factors such as capital deployment
and general industry conditions. During the six months ended 30
September 2019 there were no changes in the Group's approach to
capital management.
6. Earnings per Share
The calculation of basic and diluted earnings per share is based
on the result attributable to shareholders divided by the weighted
average number of ordinary shares in issue in the year.
Basic earnings per share amounts are calculated by dividing net
loss for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year.
The Company has potentially issuable shares which relate to
share options issued to directors and third parties. In the six
months ended 30 September 2019 and 30 September 2018 none of the
options had a dilutive effect on the loss.
Six months Six months
ended ended
30
30 September September
2019 2018
-------------------------------------------------------------------------------- ------------ ----------
Loss used in calculating basic and diluted earnings per share ($) (2,291) (408)
Number of shares
Weighted average number of shares for the purpose of basic earnings per share 779,944 780,571
--------------------------------------------------------------------------------- ------------ ----------
Weighted average number of shares for the purpose of diluted earnings per share 779,944 780,571
Basic loss per share (US dollars) (29.49) (52.27)
Diluted loss per share (US dollars) (29.49) (52.27)
--------------------------------------------------------------------------------- ------------ ----------
7. Long-term prepaid assets
As at As at
30 September 31 March
2019 2019
------------------------- ------------ --------
Long-term prepaid assets 41 41
-------------------------- ------------ --------
On determination that an impairment charge was required for the
Group's SSOAB Licences project, the Group identified a long-term
prepaid asset for future drilling costs that may be applied to
projects undertaken in other locations. Accordingly, the long-term
prepaid asset was transferred out of intangible assets.
8. Property, plant and equipment
Field
equipment
COST $'000
--------------------------- ---------
At 31 March 2019 118
Impact of foreign exchange 1
---------------------------- ---------
At 30 September 2019 119
---------------------------- ---------
Field
equipment
ACCUMULATED DEPRECIATON $'000
---------------------------- --------------
At 31 March 2019 75
Depreciation for the period 20
----------------------------- --------------
At 30 September 2019 95
----------------------------- --------------
Field
equipment
CARRYING VALUE $'000
--------------------- ---------
At 31 March 2019 43
At 30 September 2019 24
---------------------- ---------
9. Intangible assets
Exploration costs
--------------------- -----
COST $'000
--------------------- -----
At 31 March 2019 5,093
Additions 163
Foreign exchange (9)
---------------------- -----
At 30 September 2019 5,247
---------------------- -----
ACCUMULATED AMORTISATION AND IMPAIRMENT $'000
---------------------------------------- -----
At 31 March 2019 2,622
Foreign exchange (48)
----------------------------------------- -----
At 30 September 2019 2,574
----------------------------------------- -----
CARRYING VALUE $'000
--------------------- -----
At 31 March 2019 2,471
At 30 September 2019 2,673
---------------------- -----
The Group has operated three distinct projects, SSOAB Licences,
Nueltin Licence and the South African Projects as detailed
below:
The exploration costs, amortisation and impairment detailed in
the above table are in respect of the Group's South African
Projects only. The Group's exploration costs in respect of its
SSOAB Licences project of $1,145,000 were fully impaired at 31
March 2016 and the exploration costs in respect of its Nueltin
Licence project of $153,000 were fully impaired at 31 March 2015.
The Burgersfort South African project has been fully impaired in
these consolidated financial statements. At 30 September 2019 the
carrying value is solely in relation to the Zebediela Nickel
Project described below.
SSOAB Licences
Svenska Skifferoljeaktiebolaget ("SSOAB") had 100% ownership of
several exploration licences near the town of Örebro, Sweden. The
Swedish licences are considered to be a single project, and thus to
be one CGU. During the year ended 31 March 2016, due to the
continued decline of the prices of oil and uranium, the Group
decided not to pursue the development of SSOAB properties and
therefore determined that the recoverable amount of the intangible
assets under the SSOAB properties was estimated to be $nil. The
Group fully impaired the intangible assets in the consolidated
statement of financial position for the year ended 31 March 2016.
The foreign currency reserve of SSOAB was reclassified from equity
to the consolidated statement of comprehensive income in the year
ended 31 March 2017.
Nueltin Licence
8373825 Canada Inc. ("Nueltin") was party to an option agreement
with Cameco Corporation ("Cameco"), the holder of a licence located
in the Nunavut Territory of Canada. Under the agreement, Nueltin
could earn 51% interest in the project from Cameco in return for
exclusively funding CDN$2.5 million in exploration expenditure by
31 December 2016. The Cameco project was considered to be one CGU.
The Group fully impaired the intangible assets in the consolidated
statement of financial position in the year ended 31 March 2015 as
the Group had no plans to pursue the project in Nunavut Territory
and thus let the option expire.
South African Projects
In November 2013, the Group acquired (i) a 100% interest in
Southern Africa Nickel Limited ("SAN Ltd.") which had been the
Group's joint venture partner since 2010 on the Zebediela Nickel
Project and (ii) a 50% interest in the Burgersfort Project. SAN Ltd
in turn had a 74% interest in a joint operation (the "SAN-Umnex
Joint Venture"). The remaining 26% was held by Umnex Mineral
Holdings Pty ("UMH"), which had title to the Zebediela licences
through its subsidiary, UML. With the Group's acquisition of SAN
Ltd., the SAN-URU joint venture was dissolved and San Ltd. obtained
ownership of the JV's 50% interest in the Burgersfort Project with
BSC Resources as the other party to the agreement. On 10 April
2014, SAN Ltd. and UMH agreed that SAN Ltd. would purchase 100% of
Umnex Minerals Limpopo Pty ("UML") from UMH for consideration of
33,194,181 new Group shares and 8,000,000 bonus shares issued to
directors and officers for their services in the acquisition of
UML.
The Burgersfort Project extends over two adjacent prospecting
rights in Burgersfort North and Burgersfort South. The Group has no
plans to pursue the project and as announced on 31 May 2019 has
fully impaired the intangible assets related to Burgersfort Project
in the amount of $868,000 in the consolidated statement of
financial position as at 31 March 2019.
The Zebediela Nickel Project extends over three separate
adjacent prospecting rights in the Limpopo Province of South
Africa. All three rights are now held by Lesogo Platinum Uitloop
Pty ("LPU"), which in turn is 100% owned by UML.
All three rights are currently compliant with minimum
expenditure obligations, annual report submissions, annual
prospecting fees, and submitted prospecting work programs.
Under the terms of the acquisition agreement, UMH is permitted
to return the shares and take back the licences should the
Group:
-- fail to maintain adequate cash funds to meet its general and project expenditure obligations,
or
-- fail to meet the purchased rights' minimum statutory expenditure obligations
As at 30 September 2019, the "general and project expenditure
obligations" and the "minimum statutory expenditure obligations" of
the general and project expenditure obligations had not been
determined.
Additionally, conditional consideration of 12,000 free-trading
shares is payable if either 1) a transaction is consummated by the
Group to sell, farm-out, or similarly dispose of any portion of a
mineral project on some or all of the mining titles, or 2) a mining
right is obtained from the South African Department of Mines and
Resources in respect of some or all of the rights, or 3) an
effective change of control of the Group occurs. As at 30 September
2019 none of the above conditions have occurred.
On 19 April 2017, the Group entered into a Corporate and
Management Services Agreement (the "Agreement") with UMH. As per
the Agreement, UMH shall provide to UML services including project
management, coordination of mining rights application, mineral
rights management, finance and accounting, technical,
metallurgical, engineering and geological services and corporate
finance and capital raising. In exchange of the services, UMH will
earning the following fees:
1. Once the Bankable Feasibility Study commences a monthly
retainer of ZAR150,000 until then a monthly retainer of ZAR75,000
will be paid;
2. First right of offer for technical, metallurgical,
engineering and geological services at market related pricing;
3. Capital raising and corporate finance fees of 5% of the
transaction value of capital raised through UMH sources;
4. UMH will be issued a 1.5% royalty on all revenue generated
from the Zebediela project. 1% of the royalty can be purchased back
by the Company or its successor for the amount of $2 million
provided that the Company exercises this right within 24 months of
the Mining Right being issued by the Department of Mineral
Resources of South Africa.
On 4 December 2018 the Company announced that the South African
Department of Mineral Resources had formally approved and executed
the renewal of the primary prospecting right. The right will expire
on 2 December 2021.
10. Financial assets at fair value through other comprehensive income
As at As at
30 September 31 March
2019 2019
$'000 $'000
--------------------------------------------------------- ------------ --------
At beginning of the period 1,676 1,676
Fair value adjustment through other comprehensive income (876) (876)
Impairment (686) (686)
Foreign exchange (loss) (114) (114)
---------------------------------------------------------- ------------ --------
At end of the period - -
---------------------------------------------------------- ------------ --------
On 1 March 2017, the Group acquired 7,550,000 shares of
Management Resource Solutions Plc ("MRS") for GBP0.15 per share by
issuance of 25,166,666 ordinary shares of the Group. The fair value
of the MRS shares was determined to be the value of the shares of
the Group issued, as MRS was a public company whose shares were not
trading at the time and the market price was not available. On 5
May 2017, the MRS shares resumed trading on the AIM market of the
London Stock Exchange.
During the year ended 31 March 2018 the Group acquired an
additional 10,000,000 ordinary shares of MRS at GBP0.05 per share.
At 30 September 2019 and 31 March 2019 the Group held 17,550,000
ordinary shares.
On 4 September 2019, London Stock Exchange temporarily suspended the trading of MRS shares
as two of the company's principal subsidiaries were placed into administration. As a result,
the Group recorded a full impairment of the MRS shares which has been included as an exceptional
item in profit and loss.
Management have assessed whether the Group exercises significant influence over MRS in accordance
with the accounting policy. Management have taken into consideration the criteria as set out
in IAS 28 'Investments in Associates' and have determined that the Group did not exercise
significant influence over MRS during the year. J. Zorbas was a non-executive director of
MRS until his resignation on 30 August 2019.
11 Trade and other receivables
30 September 31 March
2019 2019
$'000 $'000
------------------ ------------ --------
Other receivables 67 64
------------------- ------------ --------
12. Share capital and share premium
Number of
shares Share capital Share premium Total
$'000 $'000 $'000
--------------------------------------- --------- ------------- ------------- -------
At 31 March 2019 and 30 September 2019 780,571 7,806 46,938 54,744
---------------------------------------- --------- ------------- ------------- -------
Issued shares
All issued shares are fully paid up.
Authorised: unlimited number of common shares. There are no
preferences or restrictions attached to any classes of common
shares.
Unissued shares
In terms of the BVI Business Companies Act, any unissued shares
are under the control of the Directors.
Dividends
Dividends declared and paid by the Group were $nil for the year
ended 30 September 2019 (2018 - $nil).
13. Reserves
(a) Share option and warrants reserve
The Share Option Plan is administered by the Board of Directors,
which determines individual eligibility under the plan for
optioning to each individual. Below is disclosure of the movement
of the Group's share options as well as a reconciliation of the
number and weighted average exercise price of the Group's share
options outstanding on 31 March 2019 and 31 March 2018.
The assessed fair value at grant date is determined using the
Black-Scholes Model that takes into account the exercise price, the
term of the option, the share price at grant date, the expected
price volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the
option.
(i) Reconciliation of share options outstanding as at 30
September 2019:
Weighted Number of
average options Number
Exercise prices (GBP) remaining life (years) outstanding exercisable
--------------------- ---------------------- ----------- -----------
60 2.65 15,050 15,050
90 2.65 15,150 15,150
49 1.06 2,633 2,633
--------------------- ---------------------- ----------- -----------
70 2.52 32,833 32,833
--------------------- ---------------------- ----------- -----------
(ii) Continuity and exercise price
The number and weighted average exercise prices of share options
are as follows:
Weighted
average
Number exercise price
of options per share (GBP)
--------------------------------------- ---------- ---------------
At 31 March 2019 and 30 September 2019 32,833 70
---------------------------------------- ---------- ---------------
The following is a summary of the Group's warrants granted under
its Share Incentive Scheme. As at 30 September 2019 the following
warrants, issued in respect of capital raising, had been granted
but not exercised:
Number of Exercise Expiry Fair value at
Name Date granted Date vested warrants price (GBP) date grant date (GBP)
--------- --------------- --------------- --------- ----------- -------------- ----------------
Beaumont 9 October 2009 9 October 2009 100 345 9 October 2019 345
--------- --------------- --------------- --------- ----------- -------------- ----------------
These warrants expired unexercised subsequent to 30 September
2019.
(b) Foreign Currency Translation Reserve
The Foreign Currency Translation Reserve represents foreign
currency differences recognised directly in other comprehensive
income when assets and liabilities of foreign operations are
translated to the Group's presentational currency at exchange rates
at the reporting date and income and expenses are translated to the
Group's presentational currency at average exchange rates.
14. Trade and other payables
As at As at
30 September 31 March
2019 2018 9
$'000 $'000
--------------- ------------ --------
Other payables 372 360
Accruals 806 799
---------------- ------------ --------
1,178 1,159
--------------- ------------ --------
15. Related party transactions
(a) Transactions with key management personnel
During the six months ended 30 September 2019, nil (six months
ended 30 September 2018 -- nil) share options were granted to key
management personnel as defined by IAS 24 'Related party
disclosures'. Key management personnel include J. Peng, a senior
employee of Marrelli Support Services Inc. (MSSI), a company which
provides financial accounting services to the Group. Below is the
listing of the stock options held by key management personnel and
the share expire on 19 April 2022.
The following share options, granted to current and past
directors and management, were outstanding as at 30 September
2019.
Number of
options Expiry
Directors/officers Exercise price (GBP) outstanding date
------------------- -------------------- ----------- -------------
Directors
J. Zorbas 60 5,000 19 April 2022
J. Zorbas 90 5,000 19 April 2022
J. Vieira 60 2,600 19 April 2022
J. Vieira 90 2,600 19 April 2022
Management
J. Peng 60 1,000 19 April 2022
J. Peng 90 1,000 19 April 2022
Former directors
D. Subotic 60 2,600 19 April 2022
D. Subotic 60 2,600 19 April 2022
H. Kloepper 60 1,000 19 April 2022
H. Kloepper 90 1,000 19 April 2022
-------------------- -------------------- ----------- -------------
(b) Directors' remuneration
Six months Six months
ended ended
30 September 30 September
2019 2018
$'000 $'000
------------------------------ ------------ ------------
Fees for services as director 15 16
Basic salary 90 92
------------------------------- ------------ ------------
Total 105 108
------------------------------- ------------ ------------
Included in trade and other payables in note 14 are amounts
accrued in respect of fees and salary of directors' of the Company
in the year totalling $785,000 being amounts due to J.Zorbas (31
March 2019:$761,000)); J Vieira ($40,000, (31 March 2019:$44,000));
K. Appleby $22,000 (31 March 2019: $16,000) and H. Kloepper
($12,000,(31 March 2019:$13,000)).
16. Segmental information
(a) Reportable segments
The Group has two reportable segments, as described below, which
are the Group's strategic business units. Both are determined by
the CEO, the Group's chief operating decision-maker, and have not
changed in the year. The strategic business units offer different
services, and are managed separately because they require different
strategies.
The following summary describes the operations in each of the
Group's reportable segments:
Exploration Includes obtaining licences and exploring these licence areas.
Corporate Office Includes all Group administration and procurement
There are no other operations that meet any of the quantitative
thresholds for determining reportable segments during the periods
ended 30 September 2019 and 2018.
There are varying levels of integration between the Exploration
and Corporate Office reportable segments. This integration includes
shared administration and procurement services.
Information regarding the results of each reportable segment is
included below. Performance is measured based on segmented results.
Any inter--segment transactions would be determined on an arm's
length basis. Inter--segment pricing for the periods ended 30
September 2019 and 2018 consisted of funding advanced from
Corporate Office to Exploration.
(b) Operating segments
Exploration Corporate office Total
2019 2018 2019 2018 2019 2018
Six months ended 30 September $'000 $'000 $'000 $'000 $'000 $'000
----------------------------------- ----- ----- -------- ------- ----- -----
Depreciation (20) (20) - - (20) (20)
Reportable segment loss before tax (20) (20) (243) (388) (263) (408)
------------------------------------ ----- ----- -------- ------- ----- -----
Exploration Corporate office Total
As at 30 September 2019 2018 2019 2018 2019 2018
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------- ----- ----- -------- ------- ------ ------
Reportable segment assets 2,713 3,499 170 2,801 2,883 6,300
Reportable segment liabilities (11) (10) (1,167) (1,120) (1,178) (1,130)
-------------------------------- ----- ----- -------- ------- ------ ------
(c) Geographical segments
During the period ended 30 September 2019 and 2018, business
activities took place in Canada and South Africa. In presenting
information based on the geographical segments, segment assets are
based on the physical location of the assets.
The following table presents segmented information on the
Group's operations and loss for the period ended 30 September 2019
and assets and liabilities as at 30 September 2019:
Canada Sweden South Africa Total
$'000 $'000 $'000 $'000
------------------- ------ ------ ------------ ------
Net loss (243) - (20) (263)
Total assets 170 - 2,713 2,883
Non-current assets 24 - 2,714 2,738
Liabilities (1,167) (11) - (1,178)
-------------------- ------ ------ ------------ ------
The following table presents segmented information on the
Company's operations and net loss for the period ended 30 September
2018 and assets and liabilities as at 30 September 2018:
Canada Sweden South Africa Total
$'000 $'000 $'000 $'000
------------------- ------ ------ ------------ ------
Net loss (388) - (20) (408)
Total assets 2,801 - 3,499 6,300
Non-current assets 65 - 3,508 3,573
Liabilities (1,120) (10) - (1,130)
-------------------- ------ ------ ------------ ------
17. Contingent liabilities
The Group is subject to the conditional consideration in respect
of the acquisition of UML as detailed in note 9.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFLRFDLIVIA
(END) Dow Jones Newswires
December 30, 2019 11:23 ET (16:23 GMT)
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