Final Results

North River Resources plc / Ticker: NRRP / Index: AIM / Sector: Mining

2 June 2015

North River Resources plc ("North River" or the "Company")

Final Results

North River Resources is pleased to announce its results for the year ended 31 December 2014 and that the Annual General Meeting ("AGM") will be held at the offices of SGH Martineau LLP, 5th Floor, One America Square, Crosswall, London EC3N 2SG on Thursday 25 June 2015 at 11.00 am.

A notice convening the AGM, proxy form and Report and Accounts for the year ended 31 December 2014 will be posted to shareholders today and will also be available to download from the Company's website at www.northriverresources.com.

Highlights

· Key milestones achieved in line with strategy to rapidly transform North River into a production company with the development of the stand-out brownfield Namib Lead-Zinc project in Namibia:

o Investment agreement signed with Greenstone Capital LLP for up to US$12 million

o DFS published demonstrating strong economics of developing a 250,000 tonne per annum operation at an average grade of 9% (Pb+Zn)

o 36% increase in total underground resources to 1,250,000 tonnes, increasing the reported zinc and lead grades to 6.5% and 2.5% respectively

o On-going dialogue with Namibian Ministry of Mines and Energy with respect to obtaining the Mining Licence

· Board and management team bolstered post period-end to prepare Namib for entering into construction phase. Immediate focus has been on defining the detailed mine plan and processing plant design to support the investment decision and a development programme to enhance the Resource/Reserve base of the asset

· A loss before taxation for the year of £3,320,477 (2013: loss of £2,195,891) - the increase reflects the ramping up of work to progress the Namib project towards development

· The Group's cash position as at 31 December 2014 was £1,904,860 (2013: £577,551)

· Long term vision to grow the business in Namibia following development of Namib - a first step in a longer term growth plan

The Company is also very pleased to announce that, subsequent to the approval of the accounts, the two pending EPLs in Licence Areas 3257 and 3258 have been renewed by the Ministry of Mines and Energy.

**ENDS**

For Further Information please contact:

Managing Director's Statement

It gives me great pleasure to provide my inaugural Managing Director's statement since being appointed Managing Director in January 2015.

My predecessor Martin French led the Company as Managing Director during the year to 31 December 2014 and advanced the Namib Lead Zinc Mine in Namibia ("Namib") through a number of early development stages. Key milestones during the period included definition of the resource base, attracting a strategic cornerstone investment partner in Greenstone Resources LP ("Greenstone"), and completion of the project Definitive Feasibility Study ("DFS") which was announced late last year.

I believe the Company's priority asset, the Namib project, is a stand-out brownfield project opportunity particularly in the current market environment. Against a backdrop of global economic uncertainty and softer commodity prices generally, we have seen the mining sector shift away from riskier large, long lead time, greenfield projects, to opportunities that are more manageable in terms of size and time horizon through to revenue recognition. Project quality in terms of the orebody, up front capital intensity, the technical, environmental, social, permitting and construction risk profile, and then operating margin through the commodity price cycle, is paramount. Considering that we are re-opening a previously operated underground mine, the Namib project is a good opportunity at the right time; it has the potential to enter production relatively quickly, and a capital and operating cost structure that benefits from an excellent location and supporting infrastructure.

The project is located in a country with a very well established mining industry, and where responsible mining is recognised as being a critical long term contributor to the economy. Namibia was ranked recently by the Fraser Institute as having the most favourable mining investment climate in Africa. Collectively, I believe these attributes make for an excellent first step towards creating real sustainable value and a platform for further growth for North River shareholders.

The project also attracted the attention of Greenstone, a private equity fund specialising in the mining sector, which agreed in July 2014 to invest up to US$12 million into the Company to progress Namib towards production subject to the achievement of certain milestones. This was a significant achievement for North River, and clearly differentiated us from many of our peers during this period of greater risk-averse investor sentiment. This cornerstone investment is testament to the potential of both the Namib project and, more broadly, North River building on this first project as a platform for future growth. This ambition is shared by Greenstone, and also our Board; recently strengthened through the appointment of two pre-eminent figures in the mining industry - Keith Marshall and Ken Sangster. With a uniquely qualified and experienced Board, a project-ready management team taking shape, and the support of a strategic investor such as Greenstone, I am confident that we are extremely well positioned to progress development of Namib and translate our exploration/development capital into production value in the near term.

Namib Lead Zinc Mine

The health and safety of our people is of paramount importance and is a key priority at Namib.

We recorded zero lost time injuries in 2014, and while this is very pleasing and testament to the importance already placed on safety, we remain committed to targeting a zero harm working environment with the workforce set to grow substantially as we transition through project construction and into full commercial production.

My first task on being appointed as Managing Director has been to gain a detailed understanding of the investment opportunity before us, and to ensure we have an optimal plant design and mine development plan and the right team in place. I am very impressed with the Namib mine site and how the site area and the underground mine have been cleaned up in anticipation of project development.

The constructive open dialogue between the Namibian authorities and the mining industry in the country is very pleasing to see, and we continue to engage with relevant authorities on the Mining Licence application for Namib. We remain confident that our licence application will be well received through this continued positive engagement. Additionally, by advancing the project technically, and actively recruiting and appointing key people on the Board and in management with significant mining, project and operations experience, the Company is demonstrating a serious intent on delivering its undertaking to construct and operate the Namib project as a first step to growing a business in Namibia.

As some long term shareholders may be aware, Namib was operated as the Deblin Mine between 1968 and 1991, and was abandoned by its owners in 1991 and it remained idle until its acquisition by Kalahari Minerals in 2007, apart from a small programme of tailings retreatment in 1996. In 2009, North River acquired Namib and commenced a technical and economic assessment of its potential reopening.

As previously mentioned, Namib benefits from well-established infrastructure. A 22kV power line extends to the mine site and only small refurbishments are required prior to re-energising the line. An 8km all-weather access road extends from the Trans Kalahari highway to the mine site. Water supply will come from the pre-existing take-off point of the pipeline administered by the Namibian parastatal, Namwater. A 7.5km HDP (high density polyethylene) pipeline is to be installed to replace the historic line and a tailings dam has also been constructed to support, initially, a six to seven year mine life.

Namib is also ideally situated 70km from Namibia's largest port, Walvis Bay, and 30km from the town of Swakopmund. The proximity of these towns, where mine services and suppliers are well established, reduces the requirement for reliance on auxiliary support from further afield in Namibia or from other nearby countries.

The Namib mine has been fully refurbished to allow access to all underground areas, which extend to 220m below surface. Pumping systems, primary ventilation and all services have been reinstalled, allowing exploration and development activities to recommence.

Geology

Namib is hosted within the thinly interbedded clastics and carbonates of the Arises Marble unit of the Karibib Formation of the Swakop Group, which in the vicinity of the mine displays complex folding and deformation. The mineralised massive "Mine Marble" unit within the Karibib Formation is a weakly banded and coarse grained marble.

Structurally, mineralisation occurs in NE-SW striking tabular lodes that occur in the axial zone and limbs of a ductile SW-plunging anticlinal fold closure. The lodes have similar orientation around the fold closure and are therefore not folded. They are stratabound within the host mine marble unit but are very oblique to this enclosing envelope. As a result, the lodes typically have short strike lengths but much greater down-plunge continuity. Lodes do occur which are elongated along the mine marble strike, but this is less common.

The lodes within the deposit are assigned to four zones relative to their position in the fold closure, the North, South, N20 and Junction.

In-situ Classified Mineral Resource Estimate (JORC 2012) for the Namib Lead and Zinc Mine, depleted, as at August 2014.

Tonnages have been rounded to the nearest 1000t to reflect that this is an estimate. Apparent differences may occur due to rounding.

Definitive Feasibility Study ('DFS')

The highlights of the DFS announced on 26 November 2014 include:

· Maiden Mineral Ore Reserve of 585,000 tonnes at 6.2% zinc, 2.9% lead, and 46ppm silver

· Robust project economics with an IRR >50% at consensus metal prices

· Annual throughput of 250,000 tonnes at an average grade of 9% (Pb+Zn) producing 19,100 tonnes of metal in concentrate

· 280,000 ounces per annum silver by-product

· Initial mine life of 3.5 years (including ramp up and ramp down) and resources equivalent to five years of mine life

· A life of mine ("LOM") plan, including some inferred resources, based on 814kt resources.

Project Optimisation and Resource Expansion

Following completion of the DFS in November 2014, a number of areas were identified where additional technical evaluation work was required to define a mine plan and processing plant design to a level of confidence to support a project investment decision. These issues have been actively addressed since the Board and management team were re-structured and we are now close to optimising a sustainable mine development plan and robust process flow sheet that will provide a sound basis from which to proceed to the design engineering phase. The project economics continue to look attractive and the market will be updated over the coming weeks as soon as this review has been completed.

The final investment decision by the Board remains subject to the economics of the final optimised project, and the granting of the Mining Licence by the Namibian Ministry of Mines and Energy. The application was submitted in April 2014 and we remain hopeful of its prompt issue, however there can be no guarantee of its approval within a specific timeframe.

In addition to the project development activities, the Company views the increase of the Mineral Resource at Namib as a key component to driving growth and overall shareholder value. Since January the Company has decided to bring the resource development and drilling programme in-house and pursue what the Board believes will be a much more time and cost efficient approach to increasing the classified Mineral Resource at Namib. In this regard, the priority now is to carry out the underground development required to create access for the next phases of drilling at depth in both the South and North sections of the orebody. In the North this involves completing the drive on level 5. This development will be incorporated into the overall mine development plan and timing and progress of drilling will depend on scheduling in this plan, and inevitably over time, receipt of the Mining Licence. Further updates will be shared with the market on a regular basis.

Post period end, the Company issued highly positive drill results that further increased management and Board confidence in the potential to significantly increase the resource/reserve base and consequently mine life.

Highlights included:

NLDD 054 8.6m @ 3.8% Pb, 15.9% Zn & 64 g/t Ag

NLDD 056 10.0m @ 5.9% Pb, 13.5% Zn & 105.3 g/t Ag, and 18.2m @ 3.7% Pb, 9.6% Zn & 96.7 g/t Ag

NLDD 061 13.0m @ 7.4% Pb, 18.0% Zn & 49.3 g/t Ag

NLDD 063 10.3m @ 2.6% Pb, 12.5% Zn (Ag Pending).

A full table of recent drilling results is shown in the following:

Notes on drilling:

All intervals are reported as down hole lengths and are not corrected to true widths for the mineralised intervals, as drill holes typically cut mineralisation at variable angles and geometries of mineralised zones remain speculative until further drilling is completed.

Holes NLDD056, NLDD061 and NLDD062, have intersected mineralisation that has not previously been identified or modelled, and lies between the known Central and Junction ore bodies.

Corporate Overview & Financial Highlights

Board & Management Team

The Chairman, Mr Zuyuan He, a representative of Taurus Mineral Limited, brings significant Namibian experience through his role at CGNPC-URC, the company involved in the development of the Husab Uranium Project, one of the largest Chinese investments in Africa.

Mr Brett Richards as the Senior Independent Non-Executive Director brings extensive experience of developing mining projects and mining M&A. Mr Mark Thompson also an Independent Non-Executive Director has significant experience in project evaluation and risk assessment in the junior mining sector.

During the year under review, the Company accepted the resignation of two of its Non-Executive Directors, Mr Zhiping Yu and Ms Qi Yu, both representatives of Taurus Mineral Limited and appointed Mark Sawyer, a representative from its new strategic investor, Greenstone Resources LP. Mark is one of two Senior Partners at Greenstone Capital LLP and has amassed an 18 year career in the mining sector, previously as co-head of group business development at Xstrata plc, and has held senior roles at Rio Tinto plc and Cutfield Freeman & Co Ltd. Mark brings a rigorous approach to corporate governance, mining investment evaluation and a strong strategic perspective of the sector to support the Company to meet its growth ambitions.

In January 2015, the Board had a further injection of high calibre expertise through the appointment of Keith Marshall and Ken Sangster as Independent Non-Executive Directors, both pre-eminent figures in the mining industry with extensive tracks records in the sector.

Keith is a mining engineer and has over 35 years' experience in the mining industry and has worked for extended periods of time in every continent specialising in underground mining. Keith has developed a wealth of technical and managerial experience and has spent the last 15 years in senior mine leadership roles with Rio Tinto plc as Managing Director of the Palabora Mining Company (copper) in South Africa, and President of the Oyu Tolgoi Project in Mongolia (copper/gold). Keith will play a critical role in reviewing the mine development plan.

Ken was trained as a metallurgist and has 49 years' experience in the mining industry in a number of highly successful project development and project management roles ranging in project size from US$20M to US$600M. He previously worked in numerous senior roles for Rio Tinto plc for over 15 years, as well having metallurgy focused project development roles for Anglo American plc, Consolidated Gold Fields, Outokumpu Metals and Resources, TVX Gold and Ivernia plc. Ken is actively involved in the review and optimisation of the processing plant flowsheet and recommending improvements to the Board. Ken's experience in the sector will also have him playing an important corporate governance role.

The profile of the senior management team also changed in January 2015 with Martin French stepping down from his position as Managing Director, and me being appointed as the incumbent Managing Director, although not on the Board. For the time being the Board has decided not have any executive representation on the Board. As Managing Director, I report directly to the Board and am responsible for execution of the Board's strategy. The Board intends to review this decision in due course following the award of the Mining Licence and securing project finance ready for construction of the mine.

We also appointed Andrew Little as Project Director for Namib. Andy is a graduate HNC Mechanical Engineer from the Bell College of Technology (Scotland), and is a Fellow of the Institute Of Mining, Minerals & Materials (UK) and a Registered Professional Engineer with the European Engineering Council. Andy has over thirty years' experience in Project Development, Field Engineering, Construction Management, Project Engineering, and Design Management, predominantly in the base metals sector. He has previous held senior project and operating roles with FLUOR (at Oyu Tolgoi); Kazakhmys Project LLC, Sino Mining and Freeport McMoRan. As well, Andy has been an independent consultant on project construction roles with: Caijiaying Zinc/Gold Mine in China; Wardrop Engineering; AngloGold Ashanti; and Griffin Mining. Andy is based in Swakopmund and will take responsibility for overall project execution.

Dominic Claridge has been appointed as Head of Business Development, and is tasked with identifying and assessing new opportunities in Namibia to build on the first phase Namib project in line with the strategy to grow the business in Namibia and regionally.

I believe that the Board and management team we now have in place is very well equipped to drive development of both Namib and then leverage this operating platform to explore and identify subsequent growth opportunities.

Corporate Communications

As we transition from our status as an exploration company to developer and mining operator, I am cognisant of the on-going need to keep investors abreast of developments. Over recent months, against a backdrop of a new management team engaged in detailed technical review of all aspects of the Namib project, from mine development plan to plant design and resource expansion drilling programme, there have been only limited opportunities to provide updates to shareholders. Going forward, the Board and I are keen to enhance our general shareholder communication so that investors have clear expectations of what news they can expect and when, and also provide shareholders with regular structured access to the management of North River.

As shareholders may well be aware, our first objective to fulfil this obligation is to hold regular conference calls for all shareholders. These conference calls will be announced in advance via RNS, and interested parties will be invited to submit questions before the call providing me and the Board and with an agenda for the call and an insight into what particular concerns or feedback our shareholder base has.

We also plan to supplement these calls with regular market updates on the revised project definition and economics, the development plan for increasing the Namib resource base, and funding plans.

Financial Review

The Company is reporting a loss before taxation for the year of £3,320,477 (2013: loss of £ 2,195,891). The increase in the loss reflects the ramping up of work carried out to progress the Namib project towards development.

The Group continues to focus on minimising administrative overheads.

As announced on 4 July 2014, North River has in place an investment agreement with Greenstone, whereby Greenstone committed to invest up to US$12.0 million in the Company in a series of tranches by way of equity subscriptions and one or more non-secured, non-redeemable, zero coupon convertible debentures. To date the Company has received two funding tranches from Greenstone, equating to total funds of US$6 million. The outstanding third and fourth tranches, equating to a further US$6 million, remain subject to completion of a number of project milestones. While the Company had previously anticipated having completed all preparations in readiness for the final investment decision on the Namib project by the end of the second quarter 2015, it is taking longer than expected to secure the mining licence, adding uncertainty to project implementation planning. In addition, and as already noted, further technical evaluation work has been required to define a mine plan and processing plant design to a level of confidence to support a project investment decision. As a consequence of the additional work performed and the on-going costs incurred in anticipation of the mining licence (which will benefit the project in the longer term), the Company has not been able to fully apply the proceeds of the second investment tranche received to all prescribed uses of that tranche under the investment agreement and so may not be able to satisfy all the conditions precedent for the next tranche before further funding is required, or within the agreed investment period which comes to an end on 4 October 2015, being 15 months following the date of the agreement. The Company is considering funding solutions from new and/or existing investors (both institutional and private where appropriate) to cover project development, resource expansion, and corporate costs under multiple scenarios as to when the mining licence will be received. The Company is also seeking to push ahead in the meantime with underground mine development work and potentially start sourcing second hand equipment, neither of which is contemplated at this pre-construction stage in the Greenstone agreement. 

The Group's cash position as at 31 December 2014 was £1,904,860 (2013: £577,551).

Outlook

While 2014 was a difficult year for most commodity prices, zinc rose to a 35-month high mid-year before easing in the second half on the back of downward revisions to economic growth in China, the EU and Japan. The refined zinc market remained in deficit in 2014, with improving demand and falling exchange warehouse stock levels. The average lead price for the year was marginally up on 2013 as the market remained in balance, with limited warehouse stock movements.

Looking ahead, both zinc and lead prices have recovered in the early part of 2015 and continue to demonstrate robust long-term fundamentals. The zinc market is expected to remain in deficit with forecast continued demand growth, while announced closures of the large Century and Lisheen mines, and no significant new sources of production scheduled to come on stream, will constrain supply. Market commentators point to potential production growth in China in reaction to higher zinc prices, but this potential is facing rising labour and other costs, falling ore grades and small operating scale.

Namib will very much continue to be our primary focus over the coming months as we look to secure our Mining Licence, finalise our mine optimisation studies and work on enhancing the Resource/Reserve base of the asset.

As mentioned earlier, North River is an ambitious company, and I see Namib as a first step in a longer term growth plan. By demonstrating our ability to unlock value at Namib, we will be well positioned to turn our attentions to identifying additional opportunities, in a country with excellent resource potential.

In Mozambique, where North River holds an effective 40% interest in the iron and phosphate Monte Muande project, we continue in discussion with our joint venture partner, Baobab Resources, on the best way forward. Baobab, who entered into the joint venture with North River in 2010 and has earned an effective 60% interest through exploration expenditure, continue in progress with technical studies on project options.

I would like to take this opportunity to thank our valued shareholders, the Board and the North River team for their continued support and dedication over recent years and during my short tenure as Managing Director, and I look forward to providing further news updates in due course as we look to deliver on our business strategy.

James Beams

Managing Director

29 May 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2014

1. ACCOUNTING POLICIES

The Group has adopted the accounting policies set out below in preparation of the financial statements. All of these policies have been applied consistently throughout the period unless otherwise stated.

1.1 Basis of preparation

The financial statements are prepared in accordance with the historical cost convention and in accordance with the International Financial Reporting Standards ("IFRS") including IFRS 6 'Exploration for and Evaluation of Mineral Resources' as adopted by the European Union ("EU") and in accordance with the provisions of the Companies Act 2006. The parent Company's financial statements have also been prepared in accordance with IFRS and Companies Act 2006.

The Group and Company financial statements are presented in UK pounds sterling.

In accordance with the provisions of Section 408 of the Companies Act 2006, the Parent Company has not presented a Statement of Comprehensive Income. The Parent Company's loss for the year ended 31 December 2014 of £1,043,971 (2013: loss of £985,983) has been included in the Group's Statement of Comprehensive Income.

1.2 Going concern

During the year ended 31 December 2014 the Group made a loss of £3,320,477 (2013: a loss of £2,195,891). At the year end date the Group had net assets of £10,083,685 (2013: net assets of £8,473,236) of which £1,904,860 (2013: £577,551) was cash at bank. The operations of the Group are currently being financed from funds which the Parent Company raised from private and public share placings.

The Group's capital management policy is to raise sufficient funding to finance the Group's near term exploration and development objectives. Upon completion of objectives, or identification of new projects, the Directors will seek new funding to finance the next stage of the development programme or the new projects.

The Group had a cash balance of £1,047,658 at 30 April 2015.

As set out in Note 22, the Group has estimated possible exploration expenditure of up to £1.5 million for its Namibian licences through 2015 and into 2016. Total capital cost, that is still under review, for the life of the mine, as announced on 26 November 2014 in the Definitive Feasibility Study on Namib, is estimated as $27.8 million (£17.9 million). The Group will therefore need to raise or obtain additional cash funding to support both working capital requirements and the next stage of its exploration and project development programme.

As set out in Note 5, applications for the Namib Lead Mining Licence (submitted in April 2014) and the renewal of several exploration and prospective licences ("EPLs") in the Licence Areas have been made and are awaiting confirmation. If the Mining Licence is not received or the EPLs are not renewed then the Directors would have to reconsider the position of the Group and the resulting ability to continue operations as planned. The Directors believe that all outstanding licence confirmations will be received within the normal timeframe for these applications.

Subject to receiving the Mining Licence, the Directors believe that the Group will be able to raise as required, sufficient cash to enable it to continue its operations, and continue to meet, as and when they fall due, its planned and committed exploration and development activities and liabilities for at least the next twelve months from the date of approval of these financial statements. For this reason the Directors continue to adopt the going concern basis in preparing the accounts.

However, there can be no guarantee that the required funds will be raised within the necessary timeframe or that the mining and EPL licences will be renewed. Consequently a material uncertainty exists that may cast doubt on the Group's ability to continue to operate as planned and to be able to meet its commitments and discharge its liabilities in the normal course of business for a period not less than twelve months from the date of this report.

The financial statements do not include the adjustments that would result if the Group was unable to continue in operation.

1.3 Basis of consolidation

The consolidated financial statements incorporate the accounts of the Company and its subsidiaries and have been prepared by using the principles of acquisition accounting ("the purchase method") which includes the results of the subsidiaries from their date of acquisition. Intra-group sales, profits and balances are eliminated fully on consolidation.

1.4 Goodwill

Goodwill is the difference between the amount paid on the acquisition of the subsidiary undertakings and the aggregate fair value of their separable net assets. Goodwill is capitalised as an intangible asset and in accordance with IAS 36 'Impairments of Assets' is not amortised but tested for impairment annually and when there are any indications that its carrying value is not recoverable. As such, goodwill is stated at cost less any provision for impairment in value. If a subsidiary undertaking is subsequently sold, goodwill arising on acquisition is taken into account in determining the profit or loss on sale.

1.5 Impairment of assets

Where appropriate the Group reviews the carrying amounts of its goodwill, plant and equipment, intangible assets and investments to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.

1.6 Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the costs of assets, over their estimated useful lives, using the straight line method, on the following basis:

Plant and machinery 4 years

Motor vehicles 4 years

Fixtures, fittings and equipment 4 years

Computers and software 3 years

1.7 Exploration and evaluation expenditure

The Group capitalises the fair value of the consideration paid for acquiring exploration and prospecting rights as intangible assets. All other exploration and evaluation costs incurred are expensed as they are incurred. The Group has taken into consideration the degree to which expenditure can be associated with finding specific mineral resources. The intangible assets are amortised over the length of the mining licences and the amortisation expense is included within the administration expenses in the statement of comprehensive income.

1.8 Revenue recognition

Revenue is measured at the fair value of consideration received or receivable from the sale of goods and services from the Group's ordinary business activities. Revenue is stated net of discounts, sales and other taxes. There was no revenue received in the current or prior year.

1.9 Interest income and expense

Interest income and expense are reported on an accrual basis.

1.10 Expenses

Operating expenses are recognised in the statement of comprehensive income upon utilisation of the service or at the date of their origin.

1.11 Investments in subsidiaries

The Parent Company's investments in subsidiary companies are stated at cost less provision for impairment in the Parent Company's Statement of Financial Position.

1.12 Associates

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost. The Group's share of post-acquisition profits and losses is recognised in the consolidated statement of comprehensive income, except that losses in excess of the Group's investment in the associate are not recognised unless there is an obligation to make good those losses. The Parent Company's investments in associated companies are stated at cost less provision for impairment in the Parent Company's Statement of Financial Position.

Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated investors' interests in the associate. The investors' share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate.

Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is objective evidence that the investment in an associate has been impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial assets.

1.13 Interests in joint ventures

The Group had an interest in a joint venture, which is a jointly controlled entity, whereby the venturers have a contractual arrangement that establishes joint control over the economic activities of the entity. The arrangement requires unanimous agreement for financial and operating decisions among the venturers. The Group recognises its interest in the joint venture company using the equity method.

Under the equity method, the investment in the venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group's share of net assets of the joint venture since the acquisition date. Goodwill relating to the venture is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in the joint venture company. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture company is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the venture and its carrying value, then recognises the loss as 'Impairment of investment in joint venture" in the income statement.

Upon loss of significant influence over the venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in the statement of comprehensive income.

1.14 Foreign currency translation

Items included in the Group's financial statements are measured using the currency of the primary economic environment in which the Group operates ("the functional currency"). The financial statements are presented in pounds sterling ("£"), which is the functional and presentational currency of the Parent Company and the presentational currency of the Group.

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the Statement of Financial Position date and the gains or losses on translation are included in the Statement of Comprehensive Income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the original transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The assets and liabilities of foreign operations are translated into sterling at the rate of exchange ruling at the Statement of Financial Position date. Income and expenses are translated at weighted average exchange rates for the period. The resulting exchange differences are recognised in other comprehensive income.

1.15 Deferred taxation

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the Statement of Financial Position date and are expected to apply when the related deferred tax is realised or the deferred liability is settled.

Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the temporary differences can be utilised.

No deferred tax assets are recognised in the financial statements.

1.16 Cash and cash equivalents

Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and short term deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

1.17 Receivables

Receivables are carried at original invoice amount less provision made for impairment of these receivables. A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets' carrying amount and the recoverable amount. Provisions for impairment of receivables are included in the Statement of Comprehensive Income.

1.18 Trade and other payables

Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

1.19 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the increase of new shares or options are shown in equity as a deduction from the proceeds.

1.20 Share-based payments

The Parent Company has granted equity settled options. The cost of equity settled transactions with employees is measured by reference to the fair value at the date on which they were granted and is recognised as an expense over the vesting period, which ends on the date the employee becomes fully entitled to the award. Fair value is determined by using the Black-Scholes option pricing model. In valuing equity settled transactions, no account is taken of any service and performance (vesting conditions), other than performance conditions linked to the price of the shares of the Parent Company (market conditions). Any other conditions which are required to be met in order for an employee to become fully entitled to an award are considered to be non-vesting conditions. Like market performance conditions, non-vesting conditions are taken into account in determining the grant value.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or non-vesting condition, which are vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance or service conditions are satisfied.

At each Statement of Financial Position before vesting, the cumulative expense is calculated; representing the extent to which the vesting period has expired and management's best estimate of the number of equity instruments that will ultimately vest. The movement in the cumulative expense since the previous Statement of Financial Position date is recognised in the Statement of Comprehensive Income, with a corresponding entry in equity.

When the exercise period for an option expires, the amount that has been charged through the Statement of Comprehensive Income is transferred from the share-based payments reserve to retained losses.

Where the terms of the equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if the difference is negative.

Where an equity based award is cancelled (including when a non-vesting condition within the control of the entity or employee is not met), it is treated as if it had vested on the date of the cancellation, and the cost not yet recognised in the Statement of Comprehensive Income for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the Statement of Comprehensive Income.

1.21 Critical accounting judgements and estimates

The preparation of financial statements in conformity with International Financial Reporting Standards requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates. IFRSs also require management to exercise its judgement in the process of applying the Group's accounting policies.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are as follows:

Impairment of goodwill and investments in and loans to subsidiaries

Management assess whether goodwill and investments in and loans to subsidiaries after taking into account potential ore reserves, and cash flows generated by estimated future production, sales and costs. If the assumed factors vary from actual occurrence, this will impact on the amount at which the assets should be carried on the Statement of Financial Position.

Factors which could impact the future recoverability of these assets include the level of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

Further detailed analysis of the critical judgements and estimates relating to goodwill and investments in and loans to subsidiaries is addressed in Notes 5, 8 and 15.

Share-based payments

The Group records charges for share-based payments. For option based share-based payments management estimate certain factors used in the option pricing model, including volatility, exercise date of options and number of options likely to be exercised. If these estimates vary from actual occurrence, this will impact on the value of the equity carried in the reserves.

Further detailed analysis of the critical judgements and estimates relating to share based payments is addressed in Note 16.

1.22 Financial instruments

IFRS7 requires information to be disclosed about the impact of financial instruments on the Group's risk profile, how the risks arising from financial instruments might affect the entity's performance, and how these risks are being managed.

Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

The Group's policies include that no trading in derivative financial instruments shall be undertaken.

The required disclosures have been made in Note 18 to the accounts.

1.23 Adoption of new and revised International Financial Reporting Standards

There were no IFRS standards or IFRIC interpretations adopted for the first time in these financial statements that had a material impact on the Group. The following standards have been adopted for the first time in this financial year.

The following standards, amendments and interpretations are not yet effective and have not been early adopted by the Group. The adoption of these standards, amendments and interpretations is not expected to have a material impact on the Group's financial statements in the periods of initial application.

2. SEGMENTAL REPORTING

For the purposes of segmental reporting, the operations and assets of the Group are focused in the United Kingdom, Namibia and Mozambique and comprise one class of business: the exploration and evaluation of mineral resources. The Parent Company acts as a holding company. At the end of 31 December 2014, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.

3. GROUP OPERATING LOSS

The Group's operating loss before tax is stated after charging:

4. LOSS PER SHARE

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued and has been kept the same as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

5. GOODWILL AND IMPAIRMENT REVIEW

The Company acquired, on 20 November 2009, the entire issued share capital in, and the shareholder loans to, West Africa Gold Exploration (Namibia) (Pty) Ltd ("WAGE") and Namib Lead and Zinc Mining (Pty) Ltd ("Namib Lead"). The consideration paid by the Company for these two Namibian entities and the shareholder loans was satisfied by the allotment of 266,666,667 Ordinary shares of £0.002 each at 3 pence per share. Goodwill arising on the acquisition was:

Goodwill impairment review

The Directors are of the opinion that the Goodwill acquired in respect of WAGE and Namib Lead in November 2009 represents the value of the Licence Areas held by WAGE and Namib Lead at 31 December 2014 with the exception of EPL 3139 in the Ubib area which was relinquished in April 2013 with a carrying value at 31 December 2012 of £92,782. A goodwill impairment charge of £92,782 was made as at 31 December 2012.

At the time of the acquisition of WAGE and Namib Lead, the Licence Areas were subject to an external review by MSA Geosciences of South Africa whose employee, Mike Venter, acted as a Competent Person, as disclosed in the AIM re-admission document dated 28 November 2009.

The goodwill has not been impaired as commercial reserves have not yet been established or the determination of the evaluation process is incomplete at the year end. The continued exploration and development work within the Licence Areas since acquisition has not revealed anything that would suggest that there has been a further impairment to the carrying value of the goodwill.

In reviewing the Goodwill value, it is noted that the commodity prices for the commodities that WAGE and Namib Lead are exploring for in Namibia have changed since November 2009. Market consensus copper prices have moved from approximately US$6,500 per tonne in November 2009 to an industry consensus long term price of approximately US$6,600 per tonne in January 2015.

It is further noted that the following EPLs in the Licence Areas have been renewed, or are awaiting confirmation of renewal, since acquisition thus providing additional security of tenure. As discussed in note 1.2, the renewal of two EPLs (3257 and 3258) and the application of the Mining Licence (2902) have not yet been confirmed which indicates an uncertainty over their renewal. If the pending EPLs are not renewed, or if the Mining Licence is not granted then the Directors would have to reconsider the position of the Group and the resulting ability to continue operations as planned. The Directors believe that all outstanding licence confirmations will be received within the normal timeframe for these applications and therefore this does not constitute an indication of impairment of the goodwill and associated assets.

In accordance with the Group's accounting policies the Directors review their opinion on impairments of goodwill annually, or sooner, where information comes to light that clarifies the size, quality and economics of the licences and ore bodies held/owned by WAGE and Namib Lead. In the opinion of the Directors, taking into account the expiry dates of those licences, the likelihood of their renewal, the availability of further funds, and the intention to continue exploration and evaluation in the licence areas, no indication of impairment of the current carrying value of the goodwill currently exists. No impairment of the goodwill has therefore been made in the year ended 31 December 2014. No such indications of impairment are evident up to the date of approval of these financial statements.

On the date the Licence Areas were acquired, the Goodwill was allocated to the exploration areas in proportion to the historic exploration costs associated with the areas, as shown below. Management consider this to be an appropriate basis on which to recognise the goodwill purchased and the continued carrying values.

6. INTANGIBLE ASSETS

7. PLANT AND EQUIPMENT