12th May 2010 07:00
AIM: EMED 12 May 2010
Final Results
EMED Mining Public Limited (the "Company"), the AIM quoted mining exploration and development company, today announces final audited results for the year ended 31 December 2009.
Highlights
100%-owned Rio Tinto Copper Mine in Spain
> EMED Mining maintains forward momentum towards becoming a major copper producer at the Rio Tinto Mine - an opportunity to produce copper at relatively low total cost.
> During 2009, the provincial Government of Andalucía, local municipalities, labour unions and regional business association in Huelva publicly expressed support for our plans to restart copper production.
> Based on the agreed permitting process and the responses from the relevant authorities, the Company is targeting the start of copper production in 2011, with the exact timing dependent upon the grant of permits and the conditions attached.
> Copper prices strengthened over the past 12 months with spot and average 10-year forward prices increasing to more than US$3.00/lb (€2.10/lb). At a US$3.00/lb copper price, projected net operating cash flow is estimated to average €67 million or £57 million per year under the current "base case" development plan.
> JORC Code-compliant Ore Reserve is estimated to total 123 million tonnes at 0.48% copper, containing 0.6 million tonnes of copper. Mineral Resource contains 0.9 million tonnes of copper.
> EMED Mining has planned many improvements to the project and is also progressing work needed to expand production and extend mine life. Exploration drilling is planned in due course to focus on the potential for the open pit to be expanded and one or more of underground mines on the property to be reactivated.
Gold Development Project in Slovakia
> The initial JORC-Code compliant Mineral Resource for the Biely Vrch porphyry gold deposit is estimated to be 41.7 million tonnes at 0.79g/t gold, containing 1.1 million ounces of gold.
> The Biely Vrch Scoping Study indicated attractive base-case economics for the development of an open-pit, heap-leach project producing approximately 60,000 ounces of gold per annum over a ten-year mine life.
> The focus of work at Biely Vrch during 2010 will be on refining the Scoping Study, completing a Preliminary Environmental Impact Assessment and on progressing permitting for development.
> Exploration activities in 2010 will be scheduled around project priorities at Biely Vrch.
Exploration in Turkey and Saudi Arabia: 25%-owned KEFI Minerals Plc
> KEFI Minerals expanded its exploration activities into the Kingdom of Saudi Arabia via the formation of the Gold and Minerals Joint Venture with ARTAR, a leading Saudi construction and investment group.
> In Turkey, KEFI Minerals is the operator of the Artvin and Bakir Tepe exploration joint ventures with Centerra Gold of Canada.
Corporate
> The start-up of the Rio Tinto Mine will require a total finance package of €70 million (plus bonds, insurances and guarantees). Discussions have commenced with potential product off-take customers and project finance lead-arranger Goldman Sachs.
> EMED Mining has a strong and supportive shareholder base that is dominated by a group of international mining industry specialists in mine development, operation and marketing.
> The proposed dual-listing of the Company's securities on a main mining stock exchange is being progressed towards taking place in the second half of 2010.
> The Company has taken a conservative approach in its accounting policy towards goodwill on acquisition, exploration expenditure and care and maintenance costs, as all such expenditures are written off on acquisition or when incurred pending a commitment to develop production operations. This policy is a major factor in the Company recording the net loss for the period.
The Notice of Meeting and form of proxy along with the Annual Report and Accounts 2009 will be posted to shareholders shortly and once posted will be available to download on the Investor Relations section of the Company's website at www.emed-mining.com.
EMED Mining Public Limited's Annual General Meeting will be held at 11am on 15 June 2010 at the Rio Tinto Mine, Minas de Rio Tinto, Andalucía, Spain. Shareholders wishing to attend the Annual General Meeting are requested to RSVP by emailing [email protected].
Shareholder Briefings will also be held in London at 6pm on the 21 June 2010 at the Andaz Liverpool Street Hotel, 40 Liverpool Street, London, EC2M 7QN and at 5pm on the 22nd June 2010 at City Hall room, Sheraton Centre Toronto Hotel, 123 Queen Street West, Toronto, M5H 2MP. Shareholders wishing to attend either of the briefings are requested to RSVP by emailing [email protected].
Enquiries
|
EMED Mining |
Fox-Davies Capital |
RFC Corporate Finance |
Bishopsgate Communications |
|
Harry Anagnostaras-Adams |
Daniel Fox-Davies |
Stuart Laing |
Michael Kinirons |
|
+357 9945 7843 |
+44 (0)207 936 5230 |
+618 9480 2500 |
+44 (0)207 562 3350 |
Chairman's Report
Dear Fellow Shareholder
During the past 12 months EMED Mining has made strong and consistent progress on its two major projects: the Rio Tinto copper mine in Spain and the Biely Vrch gold project in Slovakia.
At Rio Tinto, EMED Mining's main focus has been on the permitting for the re-start and improvement of the existing mine and processing plant. In early 2010 we received positive preliminary responses from each of the four relevant Authorities (departments) of the Junta de Andalucía: Industry, Environment, Culture & Heritage and the Water Authority.
While each Authority has sought certain supplementary reports or detailed documentation, EMED Mining has since been working on a co-operative basis with the public servants within these Authorities to complete final submissions by mid-year. We have been working to a clear roadmap agreed with the Junta and incorporating regulatory changes introduced in 2009, with the target of advancing permitting to a stage that enables site preparations to commence at the end of 2010.
Re-opening Rio Tinto has become an increasingly important cause in the context of high unemployment in southern Spain. The stature of EMED Mining has grown markedly in Andalucía over the past 12 months. Our Spanish management team has won the confidence of, and has been publicly supported by, the local communities in the Cuenca Minera region, the labour unions, the regional business associations and representatives of the Government of Andalucía.
Upon receipt of permitting for triggering the restart, we have allowed for a six month ramp-up to first production. We are targeting production in the second half of 2011. We are budgeting re-start costs (capital improvements, repairs and working capital combined) of €70M, which should be largely fundable from bank or off-take facilities. This is modest compared with the likely capital cost of over €700 million for a similar scale greenfields project.
At Biely Vrch in central Slovakia, the Scoping Study completed during 2009 indicated attractive economics for the development of a three million tonnes per annum heap-leach operation, producing some 60,000 ounces of gold annually over ten years, at a cash cost of US$500 to US$600 per ounce. As part of the Scoping Study, further metallurgical testwork confirmed that the low strip ratio, open-cut ore is not refractory and indicated gold recoveries averaging approximately 80%.
During 2010 EMED Mining will undertake further work on the siting of Biely Vrch infrastructure with the aim of reducing risks and enhancing project returns. We are also preparing a Preliminary Environmental Impact Assessment for submission to the regulatory authorities. Our policy is to seek formal confirmation of support before proceeding to a full Feasibility Study.
Since the depths of the global financial crisis, macroeconomics have moved in EMED Mining's favour. The market prices of our two key commodities have risen strongly during the past 12 months. Spot copper has risen from US$2.00 per pound at 30 April 2009 to US$3.13 today, an increase of 57%. Spot gold has risen from US$884 per ounce on 30 April 2009 to US$1,208 today, an increase of 37%. Also, most of EMED Mining's cost base will be in Euros, a currency that has depreciated significantly against the dollar in recent months.
EMED Mining has decided to pursue a dual listing on a leading mining stock exchange, to provide improved market liquidity in our shares for existing and new shareholders. In March 2010, Harry Anagnostaras-Adams and I conducted a roadshow to institutional investors in Australia, New York and in Toronto, following which EMED Mining completed a £8.8 million equity placing. Much of this funding was derived from Canada, where we found a ready appreciation of the revival of base metal mining in the Iberian Pyrite Belt, and a strong interest in Rio Tinto in particular.
I welcome Roger Davey, who joined the board in April 2010. Mr. Davey is a mining engineer with a distinguished career in precious and base metals mine development and operations, as well as in mining finance.
EMED Mining is a rare mining company in that all the management team - including the Managing Director - are based on the ground in Europe, rather than in a financial centre. Harry has built up a multi-national team at Rio Tinto to conduct the permitting effort, continue the extensive care and maintenance task and to prepare for production re-start. We have a smaller but dedicated team in Slovakia, and our two person "head office" in Nicosia which we will expand in due course to cover group treasury and product marketing functions. Most of our people have been on reduced salaries in consequence of the global financial crisis, and the Board thought it only fair to compensate them by the grant of additional stock options.
I would like to thank Harry and all our management, employees and their families for dealing with many frustrations during the year, for their successes and for all the long hours and dedication they have contributed.
We are holding our Annual General Meeting at Rio Tinto this year - on Tuesday 15 June. I hope as many shareholders as possible will be able to attend and visit our most significant asset.
Ronnie Beevor
Chairman
8 May 2010
Managing Director's Report
The maximum potential for adding value for shareholders and other stakeholders continues to be provided by focusing our efforts on bringing our two main projects into production.
In Spain, the established open-pit mine, copper-concentrator plant and other infrastructure at the Company's Rio Tinto Mine provide an excellent opportunity to bring a large copper mine into production at a relatively low total cost.
In Slovakia, the Biely Vrch Scoping Study indicated strong base-case economics from the development of an open-pit, heap-leach gold project producing approximately 60,000 ounces of gold per annum over a ten-year mine life.
Spain - Opportunity to Restart Major Copper Mine
The Rio Tinto Mine is our priority development project because it can potentially be brought into production relatively quickly and improved to comply with the standards of a 21st century project. The go-ahead decision depends upon completing commercial settlements either by negotiation or by regulatory process, having appropriate finance in place, and receiving all necessary government consents and shareholder approvals.
The restart process has taken longer than initially expected due to the following reasons:
> Since taking an option over the project in mid-2007, EMED Mining lost nine months following judicial intervention in December 2007 by the project vendor's financier MRI, with whom EMED Mining subsequently proceeded to renegotiate and clean-up the legal structure. Then the Company moved to 100% ownership of the Rio Tinto Mine in October 2008; and
> The global financial crisis stalled the project as the copper price dropped from circa US$9,000 per tonne in August 2008 to under US$3,000 per tonne in December 2008. The Company then refined the project by extending mine life and expanding planned annual output. Initial regulatory applications were then resubmitted to the authorities in May 2009. Prices have since recovered.
We are currently aiming to complete permitting required to trigger our decision to restart operations by the end of 2010, implement the improvements and commence copper production during 2011. Some of the required permits and licences are planned to be obtained subsequently during plant refurbishment and commissioning of production operations.
The reliability of the timetable rests foremost on the pace and conditions of permitting. Such processes are always long and complex and extra caution is required in this project due to its legacy of distrust created by the malpractice of past project controllers - people who failed some years ago to earn the support of authorities for a restart and who are now being prosecuted by several parties including their former colleagues, their financier and ourselves.
Nevertheless, timetable performance as regards permitting will essentially remain a function of the Company's ability to make the regulators' task straightforward.
The project team continues to progressively submit the required reports to the authorities and respond to their queries. This team is expanding in line with the growing activities at the mine site. Workforce training and selection programs are being planned for the significant personnel recruitment that will be required. The collective bargain negotiating process with the labor unions has also commenced.
We have successfully earned the trust of the relevant stakeholders. During 2009 the Government of Andalucía, local municipalities and labour union with site responsibility all publicly expressed support for the first time for our plans to restart copper production.
This public support has greatly helped the project develop real momentum. Our excellent team is working tirelessly and with good interaction with the authorities, communities and the labor union elected by site personnel.
We have also continued to prepare for the activities required to restart operations once the permits are received. This includes awarding of mining contracts, refurbishment of the processing plant and other infrastructure and project financing. Our product sales agent, MRI Trading, has started assembling letters of intent from planned customers in Europe and Asia, who have reacted positively.
The Rio Tinto Mine has substantial Ore Reserves and Mineral Resources. There is excellent potential to significantly increase reserves and resources as many areas on the mine property have not been drilled near surface or at depth. Even though Rio Tinto has long been recognised as one of the world's largest massive sulphide mineralisation systems, there has been virtually no drilling or mining at depths greater than 250 metres below surface.
This package of assets provides the base for a long-life mining operation that should produce strong cash flow and many benefits for stakeholders.
We expect the mine to operate for over 20 years and to be expanded beyond initial planned levels of annual output.
The region of Andalucía has the potential to once again become a metal producing region of international standing. It is notable that in recent years there have been more permits for major mining operations issued in the world-class Iberian Pyrite Belt than elsewhere in Europe.
Slovakia - Progressing 1.1 Million Ounce Gold Resource
Since discovery of Biely Vrch by EMED Mining in late 2006, our Slovakian team has carried out drilling programs and studies aimed at progressing this gold deposit into production in a cost-efficient and appropriate manner.
An initial JORC-Code compliant Mineral Resource of 41.7 million tonnes at 0.79g/t gold, containing 1.1 million ounces of gold was estimated in early 2009.
The Biely Vrch Scoping Study, undertaken by AMC Consultants during 2009, indicated attractive economics for the development of an open-pit, heap-leach gold project producing approximately 60,000 ounces of gold per annum over a ten-year mine life with an indicative cash cost in the range US$500 to US$600 per ounce.
Our goal for 2010 is to advance the project design and permitting process for Biely Vrch and justify triggering a Final Feasibility Study, which will hopefully lead to development and production.
In parallel, we will explore our large (695km2), 100%-owned licence area in central Slovakia for porphyry and other mineralisation styles in an area that historically yielded over 120 million ounces of silver and 3 million ounces of gold.
We are also looking at opportunities elsewhere in Europe that will allow us to capitalise on our in-depth experience with porphyry and other styles of gold deposits.
EMED Mining's exploration method is proven to be effective and low cost - now that we have confirmed the geological setting, the exploration model and the techniques that are most cost-effective there.
With our discovery cost to date of under US$7 per ounce, with gold prices now in the order of US$1,100 per ounce and a strong outlook for further increases in the gold price, Biely Vrch and our surrounding 100%-owned licences in Slovakia are becoming very valuable properties.
Strategy - Copper and Gold
EMED Mining has a strong commitment to responsible development of metal production operations in Europe, with an initial focus on copper and gold. EMED Mining was originally formed by Australian mining industry specialists and is based in Cyprus, the site of its first project, a location geographically central to the Company's area of interest and a country which is a member of both the European Union and the British Commonwealth.
EMED Mining's team now includes specialists from Spain, Slovakia, Cyprus, Australia and the Americas with most of our 40 personnel now being Spanish citizens and based at Rio Tinto. Upon triggering production at Rio Tinto, we would complete the assembly of the production management team and initiate the recruitment drive for more than 300 personnel to be based at Rio Tinto which would become our operational and technical headquarters.
Our regional strategy has not changed since EMED Mining listed on AIM in May 2005 and the key components of this strategy are to:
> focus on demonstrably well-endowed mineral areas and apply modern exploration techniques;
> use relationships in the region to provide a high level of technical, political and other expertise;
> demonstrate a commitment to the region by having the corporate office in Nicosia, the operational headquarters in Rio Tinto and establishing bases near the geographic centre of each project ; and
> integrate the practical experience gained in the world's leading metal-producing countries with local expertise in each country where EMED Mining is active.
This strategy has been successfully implemented to date with the Company now enjoying an early-mover advantage in the region. We have established a position of prominence within the industry in Spain, Slovakia and Cyprus.
Our core projects in Spain and Slovakia have such strong potential to add major value to the Company that new projects have not been added to the portfolio since 2007. However, we continue to monitor the Eurasian region for complementary opportunities with a view to selectively expanding the portfolio, if warranted. As new opportunities are identified, we assess the commercial and sovereign risks before investing further time and money.
Following an internal assessment of project risk, the Company suspended its activities in Georgia prior to the military hostilities which occurred in August 2008. EMED Mining's local 100%-owned subsidiary and licence holdings are preserved. Our associates in Georgia maintain a watching brief on opportunities there and within neighbouring countries.
Outlook for EMED Mining
We have the people and projects to achieve shareholder value significantly higher than that implied by EMED Mining's current stockmarket capitalisation.
The Company's key near-term priority is to safely and efficiently start copper production at the Rio Tinto Mine once EMED Mining has completed the regulatory approval process, financed the start-up and obtained shareholder approval.
Our excellent team at the Rio Tinto Mine integrates local expertise with international experience. By working very closely with the regulatory authorities, EMED Mining plans to bring this established mine up to the high standards of a 21st century operation.
Development of our Biely Vrch gold deposit in Slovakia would also create substantial value. Our Slovakian team is progressing further studies and permitting of Biely Vrch while continuing to test numerous prospects in a prolific district.
Commodity markets recovered strongly during 2009. The outlook for copper and gold prices is certainly among the strongest for all metals, which augurs well for the projected profitability of our operations.
We are determined to realise our Company's ambition of becoming a major European-based mining company that will employ many more people and provide long-term benefit to all our stakeholders. I greatly appreciate the support of our shareholders, personnel, our families and our communities and look forward to a very important productive next phase for our organisation.
Social Responsibility
EMED Mining focuses on sustainable development practices through compliance with European Union and other leading-edge international standards.
Our aim is to add value to our projects and create wealth for our stakeholders through the cost-effective discovery or acquisition and subsequent development of mineral resources.
Developing our "social licence to operate" at every step of the way is crucial to turning our projects into profitable mining operations capable of making long-term contributions to the communities they serve.
Operating in a socially responsible manner is central to our business model. Effective communication with a range of stakeholders is essential to ensuring that we fulfill these responsibilities.
We seek to reach consensus with local communities through a consultative and frank process at an early stage. Our major projects in Spain and Slovakia have regular newsletters aimed at keeping stakeholders informed of our activities. We work diligently in accordance with our corporate ethos founded on integrity, transparency and progress.
Our dedication to creating sustainable enterprises is demonstrated by the commitments made by the Company in relation to the Rio Tinto Mine. Following extensive consultation, the Company has committed to the implementation of the following projects aimed at encouraging local economic diversification:
> To develop an international laboratory service, operated by a global leader in such activities;
> To preserve and open for tourism various sites in the vicinity of the project;
> To transfer surplus rehabilitated land to alternative uses in collaboration with the Government;
> To establish a cultural exchange program with the town of Broken Hill in Australia;
> To set aside €300,000 per annum from profits for support of community aid programs and for seeding new small enterprises. This fund is to be administered transparently by a Board of Advisers comprising appropriate local community and business leaders.
The aim is to create enterprises that will continue long after the Rio Tinto orebody is mined out more than 20 years from now.
EMED Mining is committed to achieving development that provides enormous benefit today, without compromising the ability of future generations to meet their needs both economically and environmentally.
Harry Anagnostaras-Adams
Managing Director
8 May 2010
Competent Persons Statement
Information in this report as regards the Rio Tinto Mine that relates to Mineral Resource estimates is based on information compiled by Mr. Pat Stephenson, BSc (Geology) and Mr. Ron Cunneen, BSc (Geology), Mr. Stephenson taking responsibility for the Mineral Resource estimates and Mr. Cunneen taking responsibility for the data on which the estimates are based. Mr Stephenson is Regional Manager, Vancouver and Principal Geologist with AMC Mining Consultants (Canada) Ltd and a full-time employee of that company. He is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr. Cunneen is Head of Exploration for EMED Mining and a full-time employee of that company. He is a Member of The Australian Institute of Geoscientists. Mr. Stephenson and Mr Cunneen have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activities which they are undertaking to qualify as Competent Persons as defined in the JORC Code.
Information in this report as regards the Rio Tinto Mine that relates to Ore Reserve estimates is based on information compiled by Mr. Andy Robb, BSc (Mining Engineering). Mr. Robb is Principal Mining Consultant with AMC Consultants and a full-time employee of that company. He is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code.
References in this report as regards the Mineral Resources or exploration results and potential in Slovakia, Cyprus or elsewhere have been approved for release by Mr. Ron Cunneen.
Mr. Stephenson, Mr. Cunneen and Mr. Robb consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Financial Review
The continued funding support provided by our shareholders enabled EMED Mining to progress on many fronts during 2010. In particular, funding was secured from Resource Capital Funds and RMB Australia during a very difficult period in the global capital markets in early 2009.
The Company continues to tightly control costs and build its financial capacity as it progresses towards the restart of the Rio Tinto Mine.
2009 Financial Results
In 2009 EMED Mining reported exploration costs and maintenance expenditure of €5.0 million (2008 €6.5 million) after minority interests. The total reported loss for the period was €9.6 million (2008 €16.6 million).
The Company has taken a conservative approach in its accounting policy towards goodwill on acquisition and exploration expenditure, as all such expenditures are written off on acquisition or when incurred pending a commitment to develop production operations. This policy is a major factor in the Company recording the net loss for the period.
At year-end, EMED Mining had cash and listed investments totaling €5.2 million (2008 €2.0 million).
Proposed Dual Listing
EMED Mining is currently listed on AIM, the London Stock Exchange market for international growth companies.
The Company proposes a dual-listing of the Company's securities on a main mining board (ASX or TSX) in the second half of 2010. The Board believes that such a listing is a natural step for the Company within the international mining investment and metal production community. The response of the Australian and Canadian mining investment communities is encouraging.
Capital Structure
In March 2009, shareholders approved a US$8.5 million Convertible Loan facility provided by Resource Capital Funds and RMB Australia. The principal amount has a fixed conversion price of 4.1p, equating to the potential issuance of 144.2 million shares if the facility is fully drawn.
Two share placements were completed during 2009:
> The issue of 38.2 million new ordinary shares at 7.5p in August 2009, raising €3.3 million; and
> The issue of 27.7 million new ordinary shares at 11.0p in December 2009, raising €3.4 million.
The August 2009 placing was partially used for the early repayment of the convertible loan with YA Global Investments of approximately £1.4 million. Following repayment of the YA convertible loan, the Company is able to draw upon a £10 million standby facility with YA (standby equity distribution agreement, or "SEDA").
At 31 December 2009, EMED Mining had a total of 340 million shares on issue (550 million shares fully-diluted).
Major Shareholders
EMED Mining has a strong and supportive shareholder base. The ownership structure is dominated by a group of international mining industry specialists in mine development, operation and marketing. The following parties hold, between them, approximately 65% of the fully-diluted capital:
> Resource Capital Funds ("RCF") - a large development equity fund based in Australia and the USA which invests exclusively in the mining industry;
> RMB Holdings - a mining financier and banker based in Australia, South Africa, UK and USA;
> MRI Group - an international metal trading group based in Switzerland and China;
> OZ Minerals - a leading Australian copper and gold mining company which introduced EMED Mining to the Rio Tinto Mine opportunity; and
> Directors and Management - specialists who moved to Europe from Australia and the Americas in order to establish EMED Mining and its projects.
Other notable shareholders include institutions in the United Kingdom and Canada such as Goldman Sachs and Standard Life.
EMED MINING PUBLIC LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2009
|
|
|
2009 |
|
2008 |
|
|
Notes |
EUR 000 |
|
EUR 000 |
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
Exploration costs |
|
(2,161) |
|
(1,311) |
|
Care and maintenance expenditure |
|
(2,881) |
|
(5,146) |
|
Evaluation costs of Rio Tinto Mine |
11 |
- |
|
5,285 |
|
Gross loss |
|
(5,042) |
|
(1,172) |
|
Administration expenses |
|
(3,631) |
|
(1,825) |
|
Provision for impairment of goodwill |
|
- |
|
(9,333) |
|
Share of results of associates |
|
(288) |
|
(2,004) |
|
Operating loss |
4 |
(8,961) |
|
(14,334) |
|
Net foreign exchange transaction (loss) |
|
(528) |
|
(2,481) |
|
Finance income |
6 |
16 |
|
93 |
|
Finance costs |
7 |
(963) |
|
(336) |
|
Loss before tax |
|
(10,436) |
|
(17,058) |
|
Tax |
8 |
875 |
|
453 |
|
Net loss for the year |
|
(9,561) |
|
(16,605) |
|
Attributable to: Equity holders of the parent |
|
(9,557) |
|
(16,622) |
|
Minority interest |
|
(4) |
|
17 |
|
Net loss for the period |
|
(9,561) |
|
(16,605) |
|
|
|
|
|
|
|
Other comprehensive income: Exchange differences on translating foreign operations |
|
4 |
|
(34) |
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
|
(9,557) |
|
(16,639) |
|
|
|
|
|
|
|
Loss per share (cents) |
9 |
(3) |
|
(8) |
EMED MINING PUBLIC LIMITED
STATEMENT OF FINANCIAL POSITION
31 December 2009
|
|
|
The Group 2009 |
|
The Company 2009 |
|
The Group 2008 |
|
The Company 2008 |
|
|
Notes |
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Non‑current assets |
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
10 |
8,263 |
|
138 |
|
7,505 |
|
189 |
|
Intangible assets |
11 |
3,239 |
|
- |
|
2,009 |
|
- |
|
Deferred Tax |
8 |
2,685 |
|
- |
|
1,811 |
|
- |
|
Deferred financing expenses |
|
284 |
|
284 |
|
|
|
|
|
Investments in subsidiaries |
12 |
- |
|
4,245 |
|
- |
|
4,245 |
|
Investments in associates |
13 |
447 |
|
866 |
|
499 |
|
630 |
|
|
|
14,918 |
|
5,533 |
|
11,824 |
|
5,064 |
|
Current assets |
|
|
|
|
|
|
|
|
|
Trade and other receivables |
14 |
472 |
|
32,870 |
|
2,325 |
|
24,866 |
|
Deferred financing expenses |
|
284 |
|
284 |
|
|
|
|
|
Cash at bank and in hand |
15 |
3,561 |
|
3,090 |
|
1,420 |
|
967 |
|
|
|
4,317 |
|
36,244 |
|
3,745 |
|
25,833 |
|
Total assets |
|
19,235 |
|
41,777 |
|
15,569 |
|
30,897 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
|
|
|
Share capital |
16 |
1,078 |
|
1,078 |
|
795 |
|
795 |
|
Share premium |
16 |
48,531 |
|
48,531 |
|
40,680 |
|
40,680 |
|
Share options reserves |
17 |
3,471 |
|
3,471 |
|
1,843 |
|
1,843 |
|
Accumulated losses |
|
(41,667) |
|
(18,569) |
|
(32,110) |
|
(16,249) |
|
Total equity attributable to equity holders of the parent |
|
11,413 |
|
34,511 |
|
11,208 |
|
27,069 |
|
Non-controlling interest |
|
(96) |
|
- |
|
(92) |
|
- |
|
Total equity |
|
11,317 |
|
34,511 |
|
11,116 |
|
27,069 |
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
Borrowings |
19 |
6,876 |
|
6,876 |
|
308 |
|
308 |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Trade and other payables |
18 |
1,042 |
|
390 |
|
1,735 |
|
1,110 |
|
Borrowings |
19 |
- |
|
- |
|
2,410 |
|
2,410 |
|
|
|
1,042 |
|
390 |
|
4,145 |
|
3,520 |
|
Total liabilities |
|
7,918 |
|
7,266 |
|
4,453 |
|
3,828 |
|
Total equity and liabilities |
|
19,235 |
|
41,777 |
|
15,569 |
|
30,897 |
On 11 May 2010, the Board of Directors of EMED MINING PUBLIC LIMITED authorized these financial statements for issue.
|
………………………………. |
|
|
H. Anagnostaras-Adams |
|
|
Managing Director |
Company Number: 152217 |
|
|
|
EMED MINING PUBLIC LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2009
|
|
Share capital |
Share premium |
Share options reserve |
Accumulated losses |
Equity reserve |
Exchange Difference reserve |
Total |
Non- controlling interest |
Total equity |
|
|
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2008 |
507 |
18,054 |
1,110 |
(17,798) |
851 |
(79) |
2,645 |
(109) |
2,536 |
|
Total comprehensive income for the year |
- |
- |
- |
(16,605) |
- |
(34) |
(16,639) |
17 |
(16,622) |
|
Issue of share capital |
288 |
23,156 |
- |
- |
- |
- |
23,444 |
- |
23,444 |
|
Share issue costs |
- |
(530) |
- |
- |
- |
- |
(530) |
- |
(530) |
|
Recognition of share option based payments |
- |
- |
733 |
- |
- |
- |
733 |
- |
733 |
|
Share of equity adjustments in associates |
- |
- |
- |
- |
1,555 |
- |
1,555 |
- |
1,555 |
|
Transfer of equity reserve to retained earnings |
- |
- |
- |
2,406 |
(2,406) |
- |
- |
- |
- |
|
At 31 December 2008 / 1 January 2009 |
795 |
40,680 |
1,843 |
(31,997) |
- |
(113) |
11,208 |
(92) |
11,116 |
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
(9,561) |
- |
4 |
(9,557) |
(4) |
(9,561) |
|
Issue of share capital |
283 |
8,199 |
- |
- |
- |
- |
8,482 |
- |
8,482 |
|
Share issue costs |
- |
(348) |
- |
- |
- |
- |
(348) |
- |
(348) |
|
Recognition of share option based payments |
- |
- |
1,628 |
- |
- |
- |
1,628 |
- |
1,628 |
|
At 31 December 2009 |
1,078 |
48,531 |
3,471 |
(41,558) |
- |
(109) |
11,413 |
(96) |
11,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMED MINING PUBLIC LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2009
|
|
|
2009 |
|
2008 |
||||
|
|
Notes |
EUR 000 |
|
EUR 000 |
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|||
|
Loss before tax |
|
(10,436) |
|
(17,058) |
|
|||
|
Adjustments for: |
|
|
|
|
|
|||
|
Depreciation of property, plant and equipment |
10 |
77 |
|
85 |
|
|||
|
Provision for impairment of goodwill |
11 |
- |
|
9,333 |
|
|||
|
Share option based benefits |
17 |
1,628 |
|
733 |
|
|||
|
Reverse of provision for evaluation costs of Rio Tinto Mine |
|
- |
|
(5,285) |
|
|||
|
Purchase of services with settlement in shares |
|
1,601 |
|
- |
|
|||
|
Share of loss from associates |
|
288 |
|
2,004 |
|
|||
|
Loss on sale of associate |
|
89 |
|
- |
|
|||
|
Interest income Impairment of other receivables |
6 |
(16) 983 |
|
(93) - |
|
|||
|
Exchange difference on translation of subsidiaries |
|
(2) |
|
(34) |
|
|||
|
Operating loss before working capital changes |
|
(5,788) |
|
(10,315) |
|
|||
|
Changes in working capital: |
|
|
|
|
|
|||
|
Inventories |
|
- |
|
106 |
|
|||
|
Trade and other receivables |
|
1,853 |
|
589 |
|
|||
|
Trade and other payables |
|
(693) |
|
(3,607) |
|
|||
|
Cash flows used in operations |
|
(4,628) |
|
(13,227) |
|
|||
|
Tax paid |
|
- |
|
- |
|
|||
|
Net cash used in operating activities |
|
(4,628) |
|
(13,227) |
|
|||
|
|
|
|
|
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|||
|
Purchase of property, plant and equipment |
10 |
(836) |
|
(2,112) |
|
|||
|
Proceeds from disposal of property, plant and equipment |
10 |
1 |
|
- |
|
|||
|
Purchase of intangible assets |
11 |
(1,230) |
|
(162) |
|
|||
|
Acquisition of subsidiaries |
11 |
- |
|
689 |
|
|||
|
Acquisition of associate |
|
(551) |
|
(251) |
|
|||
|
Proceeds from disposal of associate |
|
227 |
|
- |
|
|||
|
Interest received |
|
16 |
|
93 |
|
|||
|
Net cash used in investing activities |
|
(2,373) |
|
(1,743) |
|
|||
|
|
|
|
|
|
|
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|||
|
Proceeds from issue of share capital |
|
6,931 |
|
13,112 |
|
|||
|
Listing and issue costs |
|
(348) |
|
(530) |
|
|||
|
Deferred financing expense |
|
(568) |
|
- |
|
|||
|
Repayment of borrowings |
|
(3,233) |
|
(630) |
|
|||
|
Proceeds from borrowings |
|
6,350 |
|
- |
|
|||
|
Net cash from financing activities |
|
9,142 |
|
11,952 |
|
|||
|
|
|
|
|
|
|
|||
|
Net increase in cash and cash equivalents |
|
2,141 |
|
(3,018) |
|
|||
|
Cash and cash equivalents: |
|
|
|
|
|
|||
|
At beginning of the period |
15 |
1,420 |
|
4,438 |
|
|||
|
At end of the period |
15 |
3,561 |
|
1,420 |
|
|||
EMED MINING PUBLIC LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 December 2009
1. Incorporation and principal activities
Country of incorporation
EMED Mining Public Limited (the "Company") was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the Companies Law, Cap. 113 and was converted to a public limited liability company at 26 January 2005. Its registered office is at, 1 Lampousas Street, Nicosia, Cyprus. The Company was listed on the Alternative Investment Market ("AIM") of the London Stock Exchange in May 2005.
Principal activities
The principal activity of the Company and its subsidiaries ("the Group") is to explore for and develop natural resources, with a focus on base and precious metals in the regions of Western and Central Europe, the Middle East and Western Asia.
2. Accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout the period presented in these financial statements unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The consolidated financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires management to exercise its judgement in the process of applying the Group's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.
Going concern
The Directors have formed a judgment at the time of approving the financial statements that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
The financial information has been prepared on the going concern basis, the validity of which depends principally on the discovery of economically viable mineral deposits, obtain the necessary mining licences and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Company's exploration activities. The financial information does not include any adjustment that would arise from a failure to complete either option.
Adoption of new and revised International Financial Reporting Standards (IFRSs)
During the year 2009 the Group adopted all the new and revised International Financial Reporting Standards (IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2009. This adoption did not have a material effect on the accounting policies of the Group, with the exception of the following:
(a) International Accounting Standard (IAS) 1 "Presentation of financial statements" (revised). As a result of the adoption of this revised standard, the Group presents in the statement of changes in equity all changes resulting from transactions with shareholders, whereas all changes in equity resulting from transactions with non-shareholders of the Group are presented in the statement of comprehensive income. The presentation of comparative information has been adjusted in conformity with the revised standard. The change had an impact only on the presentation of the financial statements.
At the date of approval of these financial statements the following financial reporting standards were issued by the International Accounting Standards Board but were not yet effective:
|
Standard / Interpretation |
Effective for annual periods beginning on or after |
|
|
(i) Adopted by the European Union |
|
|
|
|
|
|
|
·; IFRS 1 "First time adoption of International Financial Reporting Standards" (Revised) |
1 July 2009 |
|
|
|
|
|
|
·; IFRS 3 "Business combinations" (Revised) |
1 July 2009 |
|
|
|
|
|
|
·; International Accounting Standard (IAS) 27 "Consolidated and separate financial statements" (Amended) |
1 July 2009 |
|
|
|
|
|
|
·; International Financial Reporting Interpretation Committee (IFRIC) 17 "Distribution of non-cash assets to owners" |
1 July 2009 |
|
|
|
|
|
|
·; Amendments to IAS 39 "Eligible hedged items" |
1 July 2009 |
|
|
|
|
|
|
·; Improvements to IFRSs 2008 - Amendments to IFRS 5 "Non-current assets held for sale and discontinued operations" |
1 July 2009 |
|
|
|
|
|
|
·; Amendments to IAS 32 "Classification of rights issues" |
1 February 2010 |
|
|
|
|
|
|
(ii) Not yet adopted by the European Union |
|
|
|
|
|
|
|
·; Improvements to IFRSs - 2009 |
1 July 2009/1 January 2010 |
|
|
|
|
|
|
·; Amendments to IFRS 2 "Group cash-settled share-based payment transactions" |
1 January 2010 |
|
|
|
|
|
|
·; Amendments to IFRS 1 "Additional exemptions for first-time adopters" |
1 January 2010 |
|
|
|
|
|
|
·; IFRIC 19 "Extinguishing financial liabilities with equity instruments" |
1 July 2010 |
|
|
|
|
|
|
·; Amendments to IFRIC 14 "Prepayments of a minimum funding requirement" |
1 January 2011 |
|
|
|
|
|
|
·; IAS 24 "Related party disclosures" (Revised) |
1 January 2011 |
|
|
|
|
|
|
·; IFRS 9 "Financial instruments" |
1 January 2013 |
|
|
|
|
|
The Board of Directors expects that the adoption of the above financial reporting standards in future periods will not have a material effect on the financial statements of the Group
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The financial statements of all the Group companies are prepared using uniform accounting policies. All inter-company transactions and balances between Group companies have been eliminated during consolidation.
Business Combinations:
(i) Acquisitions
The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.
(ii) Goodwill
Purchased goodwill is capitalized and classified as an asset on the balance sheet. Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.
Goodwill is reviewed for impairment on an annual basis. When the directors consider the initial value of the acquisition to be negligible, the goodwill is written off to the Statement of Comprehensive Income immediately. Trading results of acquired subsidiary undertakings are included from the date of acquisition. Goodwill is deemed to be impaired when the present value of the future cash flows expected to be derived is lower than the carrying value. Any impairment is charged to the Statement of Comprehensive Income immediately.
Investments in subsidiary companies
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified.
Investments in associate companies
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are initially recognized at cost and are accounted for by the equity method of accounting.
Revenue recognition
Revenues earned by the Group are recognised on the following bases:
Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
Finance costs
Interest expense and other borrowing costs are charged to the statement of comprehensive income as incurred.
Foreign currency translation
|
(i) |
Functional and presentation currency |
|
|
Items included in the Group's financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Euros, which is the Group's functional and presentation currency.
|
|
(ii) |
Foreign currency translation |
|
|
Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
|
|
(iii) |
Foreign operations |
|
|
On consolidation, the assets and liabilities of the consolidated entity's overseas operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and recognised in profit or loss on disposal of the foreign operation. |
Tax
Current tax liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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. Currently enacted tax rates are used in the determination of deferred tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.
Acquisitions of assets
All assets acquired, including property, plant and equipment other than goodwill and intangibles, are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.
When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair value, except where the notional price at which they could be placed in the market is a better indication of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity subject to the extent of proceeds received, otherwise expensed.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on the straight‑line method to write off the cost of each asset to their residual values over their estimated useful life. The annual depreciation rates used are as follows:
|
Plant and machinery |
10%-20% |
|
Motor vehicles |
20% |
|
Furniture, fixtures and office equipment |
10%-20% |
|
|
|
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.
Expenditure for repairs and maintenance of property, plant and equipment is charged to the statement of comprehensive income of the year in which they were incurred. The cost of major renovations and other subsequent expenditure are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.
Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds with carrying amount and are included in statement of comprehensive income.
Share capital
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the Company and the nominal value of the share capital being issued is taken to the share premium account.
Exploration costs
The Group has adopted the provisions of IFRS6 "Exploration for and Evaluation of Mineral Resources". The Group's stage of operations as at the year end and as at the date of approval of these financial statements have not yet met the criteria for capitalization of exploration costs.
Share option‑based compensation benefits
IFRS 2 "Share‑based Payment" requires the recognition of equity‑settled share‑based payments at fair value at the date of grant and the recognition of liabilities for cash‑settled share‑based payments at the current fair value at each balance sheet date.
The fair value is measured using the Black Scholes pricing model. The inputs used in the model are based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
For 2009, the impact of share option-based payments was a net charge to income of EUR1,627,245 (2008: EUR732,687). At 31 December 2009, the equity reserve recognized for share based payments amounted to EUR3,470,488 (2008: EUR1,843,243).
Use and revision of accounting estimates
The preparation of the financial report requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise cash at bank and in hand.
Borrowings
Borrowings are recorded initially as the proceeds are received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any differences between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
Derecognition of financial assets and liabilities
Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
·; the rights to receive cash flows from the asset have expired;
·; the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or
·; the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.
Financial risk factors
The Group is exposed to interest rate risk, liquidity risk, currency risk and capital risk management arising from the financial instruments it holds. The risk management policies employed by the Group to manage these risks are discussed below:
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group's income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest-bearing assets. The Group is exposed to interest rate risk in relation to its non-current borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.
At the reporting date the interest rate profile of interest-bearing financial instruments was:
Fixed rate instruments
|
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
Financial liabilities |
6,876 |
|
2,718 |
Sensitivity analysis
An increase of 100 basis points in interest rates at 31 December 2009 would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and other equity.
|
|
Equity |
Profit or Loss |
||||
|
|
2009 |
|
2008 |
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
EUR 000 |
|
EUR 000 |
|
Financial liabilities |
(69) |
|
(27) |
(69) |
|
(27) |
3. Financial risk management
Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.
The following tables detail the Group's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.
|
31 December 2009 |
Carrying amounts |
Contractual cash flows |
3 or less months |
3 - 12 months |
1 - 2 years |
2 - 5 years |
More than 5 years |
|
|
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
|
Convertible Note |
6,876 |
8,320 |
- |
- |
8,320 |
- |
- |
|
Trade and other Payables |
1,042 |
1,042 |
1,042 |
- |
- |
- |
- |
|
|
7,918 |
9,362 |
1,042 |
- |
8,320 |
- |
- |
|
31 December 2008 |
Carrying amounts |
Contractual cash flows |
3 or less months |
3 - 12 months |
1 - 2 years |
2 - 5 years |
More than 5 years |
|
|
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
|
Other loans |
2,718 |
2,843 |
481 |
2,051 |
311 |
- |
- |
|
Trade and other Payables |
1,735 |
1,735 |
1,735 |
- |
- |
- |
- |
|
|
4,453 |
4,578 |
2,216 |
2,051 |
311 |
- |
- |
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group's measurement currency. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the US Dollar and the British Pound. The Group's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
|
|
Liabilities |
|
Assets |
||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|
United States Dollar |
6,876 |
|
2,718 |
|
55 |
|
86 |
|
Great Britain Pound |
- |
|
- |
|
486 |
|
754 |
|
Australian Dollar |
- |
|
- |
|
1 |
|
5 |
|
|
|
|
|
|
|
|
|
Sensitivity analysis
A 10% strengthening of the Euro against the following currencies at 31 December 2009 would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. For a 10% weakening of the Euro against the relevant currency, there would be an equal and opposite impact on the profit and other equity.
|
|
Equity |
|
Profit or Loss |
||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
EUR000 |
|
EUR000 |
|
United States Dollar |
682 |
|
263 |
|
682 |
|
263 |
|
Great Britain Pound |
(48) |
|
(75) |
|
(48) |
|
(75) |
|
Australian Dollar |
- |
|
(1) |
|
- |
|
(1) |
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group's overall strategy remains unchanged from last year.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Income taxes
Significant judgement is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
4. Expenses by nature
|
|
2009 |
|
2008 |
|
|
|
EUR 000 |
|
EUR 000 |
|
|
Exploration costs |
2,161 |
|
1,311 |
|
|
Care and maintenance expenditure |
2,881 |
|
5,146 |
|
|
Provision for impairment of goodwill (Note 11) |
- |
|
9,333 |
|
|
Evaluation costs of Rio Tinto Mine |
- |
|
(5,285) |
|
|
Depreciation of property, plant and equipment (Note 10) |
77 |
|
85 |
|
|
Share option-based employee benefits |
1,628 |
|
733 |
|
|
Auditors' remuneration |
35 |
|
35 |
|
|
Directors remuneration |
381 |
|
464 |
|
|
Loss on sale of associate |
89 |
|
- |
|
|
Other expenses |
1,421 |
|
508 |
|
|
Total expenses |
8,673 |
|
12,330 |
|
5. Business and geographical segments
Business segments
The Group has only one distinct business segment, being that of mineral exploration and development.
Geographical segments
The Group's exploration activities are located in Cyprus, Georgia, Greece, Spain and Slovakia and its administration and management is based in Cyprus.
|
|
Cyprus |
Spain |
Slovakia |
Georgia |
Europe |
Consol. |
Total |
|
|
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
|
2009 |
|
|
|
|
|
|
|
|
Operating loss |
(2,581) |
(3,562) |
(1,031) |
(15) |
(15) |
(1,997) |
(9,201) |
|
Financial income |
11 |
5 |
- |
- |
- |
- |
16 |
|
Financial costs |
(961) |
- |
(2) |
- |
- |
- |
(963) |
|
Loss for the year |
(3,531) |
(3,557) |
(1,033) |
(15) |
(15) |
(1,997) |
(10,148) |
|
Share of results from associates |
|
|
|
|
|
|
(288) |
|
Loss before tax |
|
|
|
|
|
|
(10,436) |
|
Tax |
|
|
|
|
|
|
875 |
|
Net Loss for the year |
|
|
|
|
|
|
(9,561) |
|
|
|
|
|
|
|
|
|
|
Total assets |
4,986 |
14,082 |
73 |
39 |
55 |
- |
19,235 |
|
Total liabilities |
(7,271) |
(638) |
(4) |
(2) |
(3) |
- |
(7,918) |
|
Depreciation of fixed assets |
51 |
12 |
14 |
- |
- |
- |
77 |
|
|
|
|
|
|
|
|
|
|
2008 |
|
|
|
|
|
|
|
|
Operating loss |
821 |
(1,356) |
(2,263) |
(176) |
(23) |
- |
(2,997) |
|
Financial income |
93 |
- |
- |
- |
- |
- |
93 |
|
Financial costs |
(2,347) |
(1) |
(5) |
- |
- |
(464) |
(2,817) |
|
Loss for the year |
(1,433) |
(1,357) |
(2,268) |
(176) |
(23) |
(464) |
(5,721) |
|
Share of results from associates |
|
|
|
|
|
|
(2,004) |
|
Impairment of Goodwill |
|
|
|
|
|
|
(9,333) |
|
Loss before tax |
|
|
|
|
|
|
(17,058) |
|
Tax |
|
|
|
|
|
|
453 |
|
Net Loss for the year |
|
|
|
|
|
|
(16,605) |
|
|
|
|
|
|
|
|
|
|
Total assets |
3,426 |
12,017 |
287 |
245 |
58 |
(464) |
15,569 |
|
Total liabilities |
(3,841) |
(593) |
(4) |
(7) |
(8) |
- |
(4,453) |
|
Depreciation of fixed assets |
58 |
1 |
9 |
17 |
- |
- |
85 |
|
6. Finance income |
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
Interest income |
16 |
|
93 |
|
|
16 |
|
93 |
|
7. Finance costs |
|
|
|
|
Sundry finance expenses |
48 |
|
60 |
|
Loan interest |
432 |
|
276 |
|
Loan expenses |
483 |
|
- |
|
|
963 |
|
336 |
|
8. Tax |
|
|
|
|
Current tax: |
|
|
|
|
Deferred tax due to tax losses |
875 |
|
453 |
|
Total charge for the period |
875 |
|
453 |
The tax on the Group's results before tax differs from the theoretical amount that would arise using the applicable tax rates as follows:
|
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
Loss before tax |
(9,561) |
|
(16,605) |
|
Tax calculated at the applicable tax rates |
(1,649) |
|
(1,403) |
|
Tax effect of expenses not deductible for tax purposes |
471 |
|
1,402 |
|
Tax effect of tax loss for the year |
1,380 |
|
566 |
|
Tax effect of allowances and income not subject to tax |
(107) |
|
(539) |
|
Tax effect of tax loss deferred over the next five years |
- |
|
12 |
|
Tax effect of utilization of tax losses brought forward that are deferred over the next five years |
(95) |
|
(38) |
|
Deferred tax |
875 |
|
453 |
|
Tax charge |
875 |
|
453 |
Due to tax losses sustained in the period, no tax liability arises on the Group. Under current legislation, tax losses may be carried forward and be set off against taxable income of the following years. As at 31 December 2009, the balance of tax losses which is available for offset against future taxable profits amounts to EUR35,218,320 (2008: EUR28,720,905).
|
|
Cyprus |
Georgia |
Greece |
Slovakia |
Spain |
Total |
|
|
|
Tax year |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
|
|
|
Losses b/f |
1,378 |
- |
- |
- |
- |
1,378 |
||
|
2005 |
2,016 |
- |
- |
451 |
- |
2,467 |
||
|
2006 |
2,149 |
216 |
13 |
632 |
- |
3,010 |
||
|
2007 |
7,939 |
168 |
9 |
1,948 |
- |
10,064 |
||
|
2008 |
2,964 |
164 |
21 |
3,243 |
5,410 |
11,802 |
||
|
2009 |
1,939 |
14 |
15 |
1,031 |
3,498 |
6,497 |
||
|
|
18,385 |
562 |
58 |
7,305 |
8,908 |
35,218 |
||
|
Deferred Tax Asset |
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
At 1 January |
1,811 |
|
- |
|
Deferred Tax through business combination |
- |
|
1,358 |
|
Charge for current year |
875 |
|
453 |
|
At 31 December |
2,686 |
|
1,811 |
Cyprus
The corporation tax rate is 10%. Under certain conditions interest may be subject to defence contribution at the rate of 10%. In such cases 50% of the same interest will be exempt from corporation tax, thus having an effective tax rate burden of approximately 15%. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 15%.
Caucasus
The corporation tax rate is 20%. Due to no profit and no losses sustained in the period, no tax liability arises in the Company. Under current legislation, tax losses may be carried forward and be set off against taxable income in the following five years.
Georgia
The corporation tax rate is 20%. Due to tax losses sustained in the period, no tax liability arises in the Company. Under current legislation, tax losses may be carried forward and be set off against taxable income in the following five years. Per local tax legislation, geological and associated administrative expenses are deferred for tax purposes over a period of 5 years. Therefore, there is a deferred expense of EUR664,240 (USD936,208) available for offsetting in future periods.
Greece
The corporation tax rate is 29%. Due to tax losses sustained in the period, no tax liability arises in the Company. Under current legislation, tax losses may be carried forward and be set off against taxable income in the following five years.
Slovakia
The corporation tax rate is 19%. Due to tax losses sustained in the period, no tax liability arises in the Company. Under current legislation, tax losses may be carried forward and be set off against taxable income in the following years.
Spain
The corporation tax rate is 30%. Due to tax losses sustained in the period, no tax liability arises in the Company. Under current legislation, tax losses may be carried forward and be set off against taxable income in the following years. Deferred tax has been fully recognised on tax losses.
9. Loss per share
The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the parent is based on the following data:
|
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
Net profit (loss) attributable to equity shareholders |
(9,557) |
|
(16,622) |
|
|
|
|
|
|
Weighted number of ordinary shares for the purposes of basic earnings per share (000's) |
280,615 |
|
196,788 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic and fully diluted profit (loss) per share (cents) |
(3) |
|
(8) |
|
10. Property, plant and equipment
2009 |
Land and buildings |
Plant and machinery |
Motor vehicles |
Furniture, fixtures and office equipment |
Total |
||
|
The Group |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
||
|
Cost |
|
|
|
|
|
||
|
At 1 January 2009 |
1,259 |
6,088 |
172 |
112 |
7,631 |
||
|
Additions |
- |
825 |
- |
11 |
836 |
||
|
Disposals |
- |
- |
(9) |
- |
(9) |
||
|
At 31 December 2009 |
1,259 |
6,913 |
163 |
123 |
8,458 |
||
|
Depreciation |
|
|
|
|
|
||
|
At 1 January 2009 |
- |
38 |
48 |
40 |
126 |
||
|
Charge for the year |
- |
31 |
32 |
14 |
77 |
||
|
Disposals |
- |
- |
(8) |
- |
(8) |
||
|
At 31 December 2009 |
- |
69 |
72 |
54 |
195 |
||
|
Net book amount at 31 December 2009 |
1,259 |
6,844 |
91 |
69 |
8,263 |
||
|
2008 |
|
|
|
|
|
||
|
Cost |
|
|
|
|
|
||
|
At 1 January 2008 |
- |
210 |
111 |
59 |
380 |
||
|
Exchange difference |
- |
(53) |
(50) |
(22) |
(125) |
||
|
Additions |
- |
1,993 |
111 |
8 |
2,112 |
||
|
Acquisition through business combination |
1,259 |
3,938 |
- |
67 |
5,264 |
||
|
At 31 December 2008 |
1,259 |
6,088 |
172 |
112 |
7,631 |
||
|
Depreciation |
|
|
|
|
|
||
|
At 1 January 2008 |
- |
12 |
45 |
46 |
103 |
||
|
Exchange difference |
- |
(2) |
(36) |
(24) |
(62) |
||
|
Charge for the year |
- |
28 |
39 |
18 |
85 |
||
|
At 31 December 2008 |
- |
38 |
48 |
40 |
126 |
||
|
Net book amount at 31 December 2008 |
1,259 |
6,050 |
124 |
72 |
7,505 |
||
|
2009 |
|
|
|
|
|
|
The Company |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
EUR 000 |
|
Cost At 1 January 2009 |
- |
158 |
101 |
38 |
297 |
|
Additions |
- |
- |
- |
1 |
1 |
|
Disposals |
- |
- |
(9) |
- |
(9) |
|
At 31 December 2009 |
- |
158 |
92 |
39 |
289 |
|
Depreciation |
|
|
|
|
|
|
At 1 January 2009 |
- |
38 |
39 |
31 |
108 |
|
Charge for the year |
- |
- |
(8) |
- |
(8) |
|
Disposals |
- |
31 |
18 |
2 |
51 |
|
At 31 December 2009 |
- |
69 |
49 |
33 |
151 |
|
Net book amount at 31 December 2009 |
- |
89 |
43 |
6 |
138 |
|
2008 |
|
|
|
|
|
|
Cost At 1 January 2008 |
- |
212 |
93 |
44 |
349 |
|
Exchange difference |
- |
(54) |
(31) |
(12) |
(97) |
|
Additions |
- |
- |
39 |
6 |
45 |
|
At 31 December 2008 |
- |
158 |
101 |
38 |
297 |
|
Depreciation |
|
|
|
|
|
|
At 1 January 2008 |
- |
12 |
34 |
36 |
82 |
|
Exchange difference |
- |
(8) |
(14) |
(10) |
(32) |
|
Charge for the year |
- |
34 |
19 |
5 |
58 |
|
At 31 December 2008 |
- |
38 |
39 |
31 |
108 |
|
Net book amount at 31 December 2008 |
- |
120 |
62 |
7 |
189 |
The above fixed assets are located in Cyprus, Spain and Slovakia.
The value to the company of the assets located in Spain all directly related to the ability of the Group to obtain a mining licence and restart mining operations. Should the Group not be able to do either, adjustments to the carrying value of assets (tangible and intangible) will have to be made. The value of the adjustments can not be estimated at present. Certain of the land assets acquired by EMED Tartessus had liens attached thereto as a result of debts incurred by previous owners of the project (see Note 23).
11. Intangible assets
|
The Group 2009 |
Permits of Rio Tinto Mine |
|
Evaluation costs of Rio Tinto Mine |
|
Goodwill |
|
Total |
|
Cost |
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|
On 1 January 2009 |
2,009 |
|
- |
|
10,023 |
|
12,032 |
|
Additions |
1,230 |
|
- |
|
- |
|
1,230 |
|
At 31 December 2009 |
3,239 |
|
- |
|
10,023 |
|
13,262 |
|
Provision for impairment |
|
|
|
|
|
|
|
|
On 1 January 2009 |
- |
|
- |
|
10,023 |
|
10,023 |
|
At 31 December 2009 |
- |
|
- |
|
10,023 |
|
10,023 |
|
Closing net book value |
3,239 |
|
- |
|
- |
|
3,239 |
|
2008 Cost |
|
|
|
|
|
|
|
|
On 1 January 2008 |
- |
|
5,285 |
|
890 |
|
6,175 |
|
Acquisition through business combination |
1,847 |
|
- |
|
- |
|
1,847 |
|
Additions |
162 |
|
- |
|
9,333 |
|
9,495 |
|
Transfer due to acquisition of EMED Tartessus S.L. |
- |
|
(5,285) |
|
- |
|
(5,285) |
|
At 31 December 2008 |
2,009 |
|
- |
|
10,223 |
|
12,232 |
|
Provision for impairment |
|
|
|
|
|
|
|
|
On 1 January 2008 |
- |
|
5,285 |
|
890 |
|
6,175 |
|
Provision for the year (Note 4) |
- |
|
- |
|
9,333 |
|
9,333 |
|
Reversal of provision |
|
|
(5,285) |
|
|
|
(5,285) |
|
At 31 December 2008 |
- |
|
- |
|
10,223 |
|
10,223 |
|
Closing net book value |
2,009 |
|
- |
|
- |
|
2,009 |
Proyecto Rio Tinto ("Rio Tinto Mine")
On 11 May 2007, EMED Mining announced an opportunity for the Company to acquire, in stages, 100% of Rio Tinto Mine through the Company's Spanish associate EMED Tartessus S.L.
The evaluation costs of Rio Tinto Mine consist of all expenditure incurred up to 31 December 2007 that were necessary to evaluate the project and include the incorporation costs of the Spanish subsidiary EMED Tartessus S.L. These amounts were fully provided for as at 31 December 2007 since the Group had no beneficial interest if it did not exercise its option to acquire Rio Tinto Mine. However, on 30 September 2008, the Company moved to 100% ownership by acquiring the remaining 49 per cent of the issued capital of its EMED Tartessus S.L. which owns 100% of the Rio Tinto Mine. EMED Tartessus S.L. is now a wholly owned subsidiary. This resulted in reversing the previous year's provision of initial evaluation costs and has formed part of the Group's cost of investment.
As part of the purchase consideration, 39,140,000 new ordinary shares of the Company were issued to MRI Investment AG, a member of the MRI Group at an issue price of 21 pence each. This resulted in goodwill amounting to EUR9,333,000 which the company has fully provided for since the mining licence has not yet been obtained.
Further deferred consideration totaling up to EUR43,883,382 is to be paid by the EMED Group on the occurrence of the following events:
·; EUR8,833,333 when both (a) the authorisation from the Junta de Andalucía to restart mining activities in the Rio Tinto Mine has been granted and (b) EMED Tartessus or another company in the EMED Group has secured senior debt finance and guarantee facilities for a sum sufficient for the acquisition and re-start of mining operations at the Mine. These milestones will effectively remain at the discretion of the Company and will not in practice be triggered until approval from the Company's shareholders has been received for the restart;
·; with the balance of the consideration being paid in equal annual or quarterly installments over the following six years (the "Payment Period"); and
·; in consideration for agreeing to defer the above installments over 6 years and for MRI's consent to the arrangements being entered into in connection with the Convertible Loan Facility, the Company agreed to potentially pay further deferred consideration of up to EUR15,900,000 in regular installments over the Payment Period depending upon the price of copper. Any such additional payment will only be made if, during the relevant period, the average price of copper per tonne is $6,613.86 or more. ($3.00/lb).
The Company also acquired the benefit of certain loans owed to members of the MRI Group which were incurred in relation to the operation of the Rio Tinto Mine amounting to EUR9,116,617. These loans have been acquired at their face value, such consideration to be paid once the authorisation from the Junta de Andalucía to restart mining activities in the Rio Tinto Mine has been granted and Restart has been achieved.
The funds required to make these payments, should EMED Mining proceed with the restart, would be sourced from planned banking facilities and from project cash flow.
The restart of mining operations remains subject to the following conditions:
·; Regulatory approvals by the Junta de Andalucía Government, support of the local community and approvals by the relevant statutory authorities in respect of performance bonds;
·; Settlement satisfactory to EMED Mining of the Rio Tinto Mine-vendor's liabilities, liens and contractual arrangements with a number of third parties including landholders. These various obligations arose over several years as a result of the funding of ongoing care and maintenance, bankruptcy and litigation amongst some parties;
·; Completion of technical due diligence for:
i. planning the restart of the mine, processing plant and product marketing operations;
ii. planning for a fast-track approach to site rehabilitation where reasonable to be undertaken concurrently with ongoing long-term production; and
iii. completion of all due diligence to EMED Mining's satisfaction including environmental considerations and infrastructure needs.
EMED Tartessus SL has submitted its proposals for the restart of production to the Government. A shareholder meeting will be called at the appropriate time to seek approval to proceed if all conditions precedent have been met to the satisfaction of the Government and the Company.
|
Goodwill on acquisition of 49% of EMED Tartessus S.L. on 30 September 2008 |
|
|
|
|
|
EUR 000 |
|
|
|
|
|
Property, plant and equipment |
|
5,264 |
|
Intangible assets |
|
1,847 |
|
Total non-current assets |
|
7,111 |
|
|
|
|
|
Trade and other receivables |
|
498 |
|
Deferred tax asset |
|
1,358 |
|
Cash and cash equivalents |
|
689 |
|
Total current assets |
|
2,545 |
|
|
|
|
|
Trade and other payables |
|
(7,099) |
|
Total current liabilities |
|
(7,099) |
|
|
|
|
|
Net identifiable assets and liabilities |
|
2,557 |
|
|
|
|
|
Attributable to 49% |
|
1,253 |
|
Goodwill on acquisition |
|
9,333 |
|
Cost of acquisition, satisfied in shares |
|
10,586 |
|
|
|
|
|
Cash and cash equivalents acquired |
|
(689) |
|
|
|
|
|
Net cash inflow on acquisition |
|
689 |
|
|
|
|
12. Investment in subsidiaries
|
|
2009 |
|
2008 |
|
The Group |
EUR 000 |
|
EUR 000 |
|
Opening amount at cost |
- |
|
- |
|
Exchange difference |
- |
|
- |
|
Additions/(Disposals) |
- |
|
- |
|
Closing amount at cost |
- |
|
- |
The Company
|
Opening amount at cost |
4,245 |
|
889 |
|
Exchange difference |
- |
|
(216) |
|
Additions/(Disposals) |
- |
|
3,572 |
|
Closing amount at cost |
4,245 |
|
4,245 |
|
Subsidiary Companies |
Date of incorporation/ acquisition |
Country of incorporation |
Effective proportion of shares held |
||
|
Eastern Mediterranean Minerals (Cyprus) Ltd |
28 Feb 2005 |
Cyprus |
95% |
||
|
Tredington Ventures Ltd |
28 Feb 2005 |
Cyprus |
95% |
||
|
Winchcombe Ventures Ltd |
28 Feb 2005 |
Cyprus |
95% |
||
|
Eastern Mediterranean Resources (Caucasus) Ltd |
11 Nov 2005 |
Georgia |
100% |
||
|
Georgian Mineral Development Company Ltd |
27 Dec 2005 /11 Feb 2006 |
Georgia |
100% |
||
|
Eastern Mediterranean Resources A.E. (Greece) |
21 June 2005 |
Greece |
100% |
||
|
Eastern Mediterranean Resources Armenia LLC |
26 May 2006 |
Armenia |
100% |
||
|
Eastern Mediterranean Resources Romania SRL |
21 Mar 2006 |
Romania |
100% |
||
|
Eastern Mediterranean Resources (Slovakia) S.R.O. |
10 July 2005 |
Slovakia |
100% |
||
|
Slovenske Kovy S.R.O. |
30 Mar 2007 |
Slovakia |
100% |
||
|
Slovenske Nerasty Spol S.R.O |
14 Apr 2007 |
Slovakia |
100% |
||
|
EMED Mining Spain S.L. |
12 Apr 2007 |
Spain |
100% |
||
|
EMED Tartessus S.L. |
12 Apr 2007 /30 Sep 2008 |
Spain |
100% |
|
|
|
EMED Marketing Ltd |
08 Sep 2008 |
Cyprus |
100% |
||
|
EMED Holdings (UK) Ltd |
10 Sep 2008 |
United Kingdom |
100% |
||
In 2008 the company incorporated two new fully owned subsidiaries. EMED Holdings (UK) Ltd was incorporated in United Kingdom and EMED Marketing Ltd was incorporated in Cyprus.
On 30 September 2008, the Company acquired the remaining 49% of the issued capital of its EMED Tartessus S.L. which owns 100% of the Rio Tinto Mine. EMED Tartessus S.L. is now a wholly owned subsidiary.
|
13. Investment in associates |
2009 |
|
2008 |
|
The Group |
EUR 000 |
|
EUR 000 |
|
At 1 January |
499 |
|
697 |
|
Additions at cost |
551 |
|
251 |
|
Disposals |
(315) |
|
- |
|
Share of results |
(288) |
|
(449) |
|
Closing amount based on equity accounting |
447 |
|
499 |
|
The Company At 1 January |
630 |
|
584 |
|
Additions |
551 |
|
251 |
|
Disposals |
(315) |
|
- |
|
Impairment |
- |
|
(205) |
|
Closing amount |
866 |
|
630 |
|
Company name |
Date of incorporation |
Country of incorporation |
Effective proportion of shares held |
|
Kefi Minerals Public Plc |
24 October 2006 |
United Kingdom |
28% |
|
Amounts relating to associates: |
2009 EUR 000 |
|
2008 EUR 000 |
|
Total assets |
497 |
|
450 |
|
Total liabilities |
(308) |
|
(666) |
|
|
189 |
|
(216) |
|
|
|
|
|
|
Loss for the period |
(1,017) |
|
(1,423) |
|
14. Trade and other receivables |
|
|
|
|
The Group Receivables from associates |
19 |
|
139 |
|
Deposits and prepayments |
136 |
|
1,317 |
|
VAT |
317 |
|
869 |
|
|
472 |
|
2,325 |
|
The Company |
|
|
|
|
Receivables from own subsidiaries |
32,597 |
|
23,265 |
|
Receivables from associates |
19 |
|
139 |
|
Other receivables |
- |
|
929 |
|
Deposits and prepayments |
60 |
|
344 |
|
VAT |
194 |
|
189 |
|
|
32,870 |
|
24,866 |
The fair values of trade and other receivables due within one year approximate to their carrying amounts as presented above.
|
15. Cash and cash equivalents |
|
|
|
|
The Group |
|
|
|
|
Cash at bank and in hand |
3,561 |
|
1,420 |
|
The Company |
|
|
|
|
Cash at bank and in hand |
3,090 |
|
967 |
|
16. Share capital
Authorised |
|
Number of shares 000 |
|
Share Capital EUR 000 |
|
Share premium EUR 000 |
|
Total EUR 000 |
|
||
|
Ordinary shares of GBP0.0025 each |
|
700,000 |
|
1,750 |
|
- |
|
1,750 |
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Issued and fully paid |
|
000 |
|
EUR 000 |
|
EUR 000 |
|
EUR 000 |
|||
|
At 1 January 2008 |
|
149,625 |
|
507 |
|
18,054 |
|
18,561 |
|||
|
Issue Date |
Price (GBP) |
|
|
|
|
|
|
|
|
|
|
|
7 May |
.200 |
|
a) |
50,000 |
|
159 |
|
12,553 |
|
12,712 |
|
|
21 May |
.246 |
|
b) |
104 |
|
- |
|
32 |
|
32 |
|
|
5 June |
.258 |
|
c) |
198 |
|
1 |
|
63 |
|
64 |
|
|
17 June |
.120 |
|
d) |
66 |
|
- |
|
10 |
|
10 |
|
|
1 July |
.100 |
Option exercise |
e) |
500 |
|
2 |
|
61 |
|
63 |
|
|
18 September |
.189 |
|
f) |
927 |
|
3 |
|
218 |
|
221 |
|
|
30 September |
.210 |
|
g) |
39,140 |
|
123 |
|
10,219 |
|
10,342 |
|
|
Share issue costs |
|
- |
|
- |
|
(530) |
|
(530) |
|||
|
At 31 December 2008/1 January 2009 |
|
240,560 |
|
795 |
|
40,680 |
|
41,475 |
|||
|
Issue Date |
Price (GBP) |
|
|
|
|
|
|
|
|
|
|
|
15 January |
.043 |
|
a) |
789 |
|
2 |
|
35 |
|
37 |
|
|
27 January |
.041 |
|
b) |
859 |
|
2 |
|
35 |
|
37 |
|
|
8 February |
.039 |
|
c) |
2,201 |
|
6 |
|
92 |
|
98 |
|
|
20 February |
.034 |
|
d) |
2,541 |
|
7 |
|
92 |
|
99 |
|
|
10 March |
.032 |
|
e) |
2,787 |
|
8 |
|
91 |
|
99 |
|
|
23 March |
.040 |
|
f) |
3,785 |
|
10 |
|
151 |
|
161 |
|
|
24 April |
.041 |
|
g) |
332 |
|
1 |
|
14 |
|
15 |
|
|
27 April |
.051 |
|
h) |
1,683 |
|
5 |
|
90 |
|
95 |
|
|
11 May |
.048 |
|
i) |
2,073 |
|
6 |
|
105 |
|
111 |
|
|
25 May |
.052 |
|
j) |
1,874 |
|
5 |
|
104 |
|
109 |
|
|
5 June |
.041 |
|
k) |
3,725 |
|
11 |
|
162 |
|
173 |
|
|
25 June |
.041 |
|
l) |
739 |
|
2 |
|
34 |
|
36 |
|
|
8 July |
.041 |
|
m) |
2,224 |
|
7 |
|
100 |
|
107 |
|
|
21 July |
.075 |
|
n) |
1,054 |
|
4 |
|
88 |
|
92 |
|
|
21 July |
.041 |
|
o) |
2,209 |
|
6 |
|
99 |
|
105 |
|
|
4 August |
.041 |
|
p) |
1,178 |
|
3 |
|
54 |
|
57 |
|
|
13 August |
.075 |
|
q) |
38,170 |
|
111 |
|
3,227 |
|
3,338 |
|
|
28 November |
.133 |
|
r) |
823 |
|
2 |
|
118 |
|
120 |
|
|
24 December |
.110 |
|
s) |
27,727 |
|
76 |
|
3,274 |
|
3,350 |
|
|
24 December |
.080 |
Option exercise |
t) |
1,000 |
|
3 |
|
85 |
|
88 |
|
|
24 December |
.070 |
Option Exercise |
u) |
2,000 |
|
6 |
|
149 |
|
155 |
|
|
Share issue costs |
|
- |
|
- |
|
(348) |
|
(348) |
|||
|
At 31 December 2009 |
|
340,333 |
|
1,078 |
|
48,531 |
|
49,609 |
|||
Authorised capital
Under its Memorandum the Company fixed its share capital at 1,000 ordinary shares of nominal value of CY£1 each.
On 23 March 2009 shareholders approved an increase in the authorised share capital of the Company from GBP1,000,000 to GBP1,750,000 by the creation of 300,000,000 new ordinary shares of GBP0.0025 each in the capital of the Company ranking pari passu with the existing ordinary shares of GBP0.0025 each in the capital of the Company.
On 26 May 2008 the Company passed the following special resolution:
That the authorized share capital of the Company be increased from GBP500,000 divided into 200,000,000 shares of GBP 0.0025 each, by GBP500,000 by the creation of 200,000,000 new ordinary shares of GBP0.0025 each, resulting to GBP1,000,000 divided into 400,000,000 shares of GBP0.0025 each.
Issued capital
2009
a) On 15 January 2009 788,778 shares at GBP 0.0025 were issued at a price of GBP 0.0425. Upon the issue an amount of EUR34,748 was credited to the Company's share premium reserve.
b) On 27 January 2009 859,350 shares at GBP 0.0025 were issued at a price of GBP 0.0406. Upon the issue an amount of EUR34,683 was credited to the Company's share premium reserve.
c) On 8 February 2009 2,200,556 shares at GBP 0.0025 were issued at a price of GBP 0.0391. Upon the issue an amount of EUR91,856 was credited to the Company's share premium reserve.
d) On 20 February 2009 2,540,720 shares at GBP 0.0025 were issued at a price of GBP 0.0344. Upon the issue an amount of EUR91,709 was credited to the Company's share premium reserve.
e) On 10 March 2009 2,787,304 shares at GBP 0.0025 were issued at a price of GBP 0.0318. Upon the issue an amount of EUR90,633 was credited to the Company's share premium reserve.
f) On 23 March 2009 3,785,274 shares at GBP 0.0025 were issued at a price of GBP 0.0397. Upon the issue an amount of EUR150,629 was credited to the Company's share premium reserve.
g) On 24 April 2009 331,756 shares at GBP 0.0025 were issued at a price of GBP 0.0408. Upon the issue an amount of EUR14,088 was credited to the Company's share premium reserve.
h) On 27 April 2009 1,682,944 shares at GBP 0.0025 were issued at a price of GBP 0.0506. Upon the issue an amount of EUR90,603 was credited to the Company's share premium reserve.
i) On 11 May 2009 2,073,209 shares at GBP 0.0025 were issued at a price of GBP 0.048. Upon the issue an amount of EUR105,577 was credited to the Company's share premium reserve.
j) On 25 May 2009 1,874,126 shares at GBP 0.0025 were issued at a price of GBP 0.0516. Upon the issue an amount of EUR103,891 was credited to the Company's share premium reserve.
k) On 5 June 2009 3,724,709 shares at GBP 0.0025 were issued at a price of GBP 0.0413. Upon the issue an amount of EUR161,861 was credited to the Company's share premium reserve.
l) On 25 June 2009 738,880 shares at GBP 0.0025 were issued at a price of GBP 0.0413. Upon the issue an amount of EUR33,542 was credited to the Company's share premium reserve.
m) On 8 July 2009 2,224,268 shares at GBP 0.0025 were issued at a price of GBP 0.0413. Upon the issue an amount of EUR100,110 was credited to the Company's share premium reserve.
n) On 21 July 2009 1,054,392 shares at GBP 0.0025 were issued at a price of GBP 0.0747. Upon the issue an amount of EUR88,356 was credited to the Company's share premium reserve.
o) On 21 July 2009 2,208,632 shares at GBP 0.0025 were issued at a price of GBP 0.0413. Upon the issue an amount of EUR98,978 was credited to the Company's share premium reserve.
p) On 4 August 2009 1,777,810 shares at GBP 0.0025 were issued at a price of GBP 0.0413. Upon the issue an amount of EUR53,696 was credited to the Company's share premium reserve.
q) On 13 August 2009 38,170,001 shares at GBP 0.0025 were issued at a price of GBP 0.075. Upon the issue an amount of EUR3,226,701 was credited to the Company's share premium reserve.
r) On 28 November 2009 823,056 shares at GBP 0.0025 were issued at a price of GBP 0.1331. Upon the issue an amount of EUR118,264 was credited to the Company's share premium reserve.
s) On 24 December 2009 27,727,273 shares at GBP 0.0025 were issued at a price of GBP 0.11. Upon the issue an amount of EUR3,273,981 was credited to the Company's share premium reserve.
t) On 24 December 2009, 1,000,000 shares at GBP 0.0025 were issued, upon exercise of share options, at the exercise price of GBP 0.08. Upon the issue an amount of EUR85,126 was credited to the Company's share premium reserve.
u) On 24 December 2009, 2,000,000 shares at GBP 0.0025 were issued, upon exercise of share options, at the average exercise price of GBP 0.0704. Upon the issue an amount of EUR149,053 was credited to the Company's share premium reserve.
2008
a) On 7 May 2008 50,000,000 shares at GBP 0.0025 were issued at a price of GBP 0.20. Upon the issue an amount of EUR12,553,396 was credited to the Company's share premium reserve.
b) On 21 May 2008 103,986 shares at GBP 0.0025 were issued at a price of GBP 0.2456. Upon the issue an amount of EUR32,357 was credited to the Company's share premium reserve.
c) On 5 June 2008 197,762 shares at GBP 0.0025 were issued at a price of GBP 0.2581. Upon the issue an amount of EUR63,942 was credited to the Company's share premium reserve.
d) On 17 June 2008, 66,000 shares at GBP 0.0025 were issued, upon exercise of share options, at the exercise price of GBP 0.12. Upon the issue an amount of EUR9,694 was credited to the Company's share premium reserve.
e) On 1 July 2008, 500,000 shares at GBP 0.0025 were issued, upon exercise of share options, at the exercise price of GBP 0.10. Upon the issue an amount of EUR60,986 was credited to the Company's share premium reserve.
f) On 18 September 2008 927,437 shares at GBP 0.0025 were issued at a price of GBP 0.188692. Upon the issue an amount of EUR217,991 was credited to the Company's share premium reserve.
g) On 30 September 2008 39,140,000 shares at GBP 0.0025 were issued at a price of GBP 0.21. Upon the issue an amount of EUR10,218,989 was credited to the Company's share premium reserve.
Standby Equity Distribution Agreement
On the 22 June 2007, the Company entered into a GBP10.0 million Standby Equity Distribution Agreement ("SEDA") with Yorkville Advisors, LLC, as the Investment Advisor to YA Global Investments, L.P. ("Yorkville"), which enables the Company, at its discretion during the subsequent 3 years, to draw down funds under the SEDA in tranches of GBP250,000 as and when it deems appropriate and in accordance with restrictions set by the terms of the Agreement.
The principal features of the SEDA are as follows:
·; The maximum aggregate amount of the equity line is GBP10,000,000 and EMED Mining is entitled to draw down the equity credit line in tranches of up to GBP250,000 at its option but not more frequently than every 21 days. This may increase to 35 days in certain circumstances.
·; The facility is for 36 months and is exercisable at any time other than when the Company is in possession of unpublished price sensitive information or monies were due and payable under the loan facility with Yorkville as described in Note 19.
·; The Company may at its option set a minimum floor price which it wishes to accept in relation to an advance under the SEDA. Subject to compliance with the minimum floor price set by the Company, Yorkville will subscribe for new Ordinary Shares (at a discount of five per cent) at the lowest volume-weighted average price (as derived from Bloomberg) (the "VWAP") of the five trading days following EMED Mining's notice to Yorkville for it to subscribe for new Ordinary Shares.
·; Yorkville has agreed that it will not during such a five day pricing period sell, transfer, grant any option over or otherwise deal in the legal, beneficial or any other interest in any Ordinary Shares.
·; Yorkville may not refuse a notice by EMED Mining to subscribe for new Ordinary Shares provided that each time notice is given the pre-conditions have been met, which includes a requirement that warranties given by the Company have not been materially breached.
17. Share Option Plan
Details of share options outstanding as at 31 December 2009:
|
Grant date |
Expiry date |
Exercise price |
Number of share options |
|
|
|
GBP |
000's |
|
9 May 2005 |
9 May 2011 |
0.080 |
8,589 |
|
11 August 2005 |
11 August 2011 |
0.100 |
200 |
|
28 April 2006 |
28 April 2012 |
0.135 |
3,530 |
|
28 June 2006 |
28 June 2012 |
0.135 |
150 |
|
8 September 2006 |
8 September 2012 |
0.090 |
1,000 |
|
8 September 2006 |
8 September 2012 |
0.110 |
1,000 |
|
25 January 2007 |
25 January 2013 |
0.120 |
1,500 |
|
26 February 2007 |
26 February 2013 |
0.135 |
3,784 |
|
11 May 2007 |
11 May 2012 |
0.120 |
1,000 |
|
11 May 2007 |
11 May 2013 |
0.150 |
2,500 |
|
26 June 2007 |
26 June 2013 |
0.187 |
500 |
|
26 June 2007 |
26 June 2013 |
0.170 |
625 |
|
23 July 2007 |
23 July 2013 |
0.200 |
1,000 |
|
21 September 2007 |
21 September 2012 |
0.170 |
911 |
|
18 December 2007 |
18 December 2011 |
0.500 |
1,000 |
|
31 December 2007 |
31 December 2013 |
0.220 |
4,865 |
|
15 January 2008 |
14 January 2014 |
0.200 |
1,000 |
|
7 May 2008 |
6 May 2013 |
0.200 |
1,712 |
|
1 September 2008 |
1 September 2014 |
0.200 |
1,050 |
|
23 March 2009 |
22 March 2011 |
0.050 |
750 |
|
23 March 2009 |
22 March 2011 |
0.245 |
1,000 |
|
23 March 2009 |
22 March 2011 |
0.280 |
1,000 |
|
23 March 2009 |
22 March 2013 |
0.041 |
9,500 |
|
9 June 2009 |
8 June 2013 |
0.080 |
6,250 |
|
|
|
|
|
|
Total |
|
54,416 |
|
|
|
|
Number of shares 000's |
|
Outstanding options at 31 December 2008: |
|
38,166 |
|
- granted during 2009 |
|
19,250 |
|
- exercised during 2009 |
|
(3,000) |
|
Outstanding options at 31 December 2009 |
|
54,416 |
The Company has issued share options to directors, employees and suppliers of the Group. All options, except those noted below, expire six years after grant date and are exercisable at the exercise price in whole or in part up to one third in the first year from the grant date, two thirds in the second year from the grant date and the balance thereafter.
2009
On 23 March 2009 MRI was granted (i) an option to subscribe at any time until 23 March 2011 for up to 1,000,000 Ordinary Shares at a subscription price per Ordinary Share of 24.5p; and (ii) an option to subscribe at any time until 23 March 2011 for up to 1,000,000 Ordinary Shares at a subscription price per Ordinary Share of 28 pence.
On 23 March 2009 a consultant was granted to subscribe at any time until 23 March 2011 for up to 750,000 new Ordinary Shares at an exercise price of 5p per Ordinary Share, expiring on 23 March, 2011 exercisable only after satisfactory settlement of certain commercial matters and successful project permitting in Spain.
On 23 March 2009, each of the Directors and certain of the management and employees have been or are to be granted options to subscribe at any time until 23 March 2013 for an aggregate total of 10,000,000 Ordinary Shares at an exercise price per Ordinary Share of 4.13 pence.
On 9 June 2009, each of the Directors and certain of the management and employees have been or are to be granted options to subscribe at any time until 8 June 2013 for an aggregate total of 6,500,000 Ordinary Shares at an exercise price per Ordinary Share of 8 pence.
2008
On 7 May 2008, 1.28 million options were issued to Fox Davies Capital which expire five years after the grant date, and are exercisable at any time within that period.
On 7 May 2008, 0.33 million options were issued to GMP Securities Europe LLP which expire five years after the grant date, and are exercisable at any time within that period.
On 7 May 2008, 0.1 million options were issued to Lewis Charles Securities Limited which expire five years after the grant date, and are exercisable at any time within that period.
The option agreements contain provisions adjusting the exercise price in certain circumstances including the allotment of fully paid Ordinary Shares by way of a capitalisation of the Company's reserves, a sub division or consolidation of the Ordinary Shares, a reduction of share capital and offers or invitations (whether by way of rights issue or otherwise) to the holders of Ordinary Shares.
The estimated fair values of the options were calculated using the Black & Scholes option pricing model. The inputs into the model and the results are as follows:
|
|
Weighted average share price |
Weighted average exercise price |
Expected volatility |
Expected life (years) |
Risk free rate |
Expected dividend yield |
Discount factor |
Estimated fair value |
|
09 Jun 2009 |
7.82p |
8.00p |
104.52% |
4 |
5.00% |
Nil |
30% |
4.00p |
|
23 Mar 2009 |
4.53p |
4.13p |
100.27% |
4 |
3.50% |
Nil |
Nil |
3.26p |
|
23 Mar 2009 |
4.53p |
28.00p |
100.27% |
2 |
2.75% |
Nil |
30% |
0.47p |
|
23 Mar 2009 |
4.53p |
24.50p |
100.27% |
2 |
2.75% |
Nil |
30% |
0.53p |
|
23 Mar 2009 |
4.53p |
5.00p |
100.27% |
2 |
2.75% |
Nil |
Nil |
2.31p |
|
1 Sep. 2008 |
21.50p |
20.00p |
68.16% |
6 |
5.00% |
Nil |
30% |
10.07p |
|
7 May 2008 |
23.75p |
20.00p |
69.36% |
5 |
4.98% |
Nil |
30% |
10.82p |
|
15 Jan. 2008 |
19.75p |
23.80p |
65.96% |
6 |
4.98% |
Nil |
30% |
8.35p |
|
31 Dec. 2007 |
22.00p |
22.00p |
65.96% |
6 |
4.27% |
Nil |
30% |
9.76p |
|
18 Dec. 2007 |
19.00p |
50.00p |
65.42% |
4 |
4.27% |
Nil |
30% |
3.85p |
|
21 Sept. 2007 |
17.00p |
17.00p |
61.93% |
5 |
5.00% |
Nil |
30% |
6.47p |
|
23 Jul. 2007 |
14.00p |
20.00p |
57.88% |
6 |
6.35% |
Nil |
30% |
5.13p |
|
26 Jun. 2007 |
13.50p |
18.66p |
57.88% |
6 |
6.32% |
Nil |
30% |
5.09p |
|
26 Jun. 2007 |
13.50p |
17.00p |
57.88% |
6 |
6.32% |
Nil |
30% |
5.30p |
|
11 May 2007 |
13.25p |
12.00p |
57.88% |
5 |
6.07% |
Nil |
30% |
5.43p |
|
11 May 2007 |
13.25p |
15.00p |
57.88% |
6 |
6.07% |
Nil |
30% |
5.37p |
|
26 Feb. 2007 |
11.83p |
13.50p |
60.00% |
6 |
5.85% |
Nil |
30% |
4.19p |
|
25 Jan. 2007 |
11.10p |
12.00p |
57.88% |
6 |
5.97% |
Nil |
30% |
4.56p |
|
8 Sept. 2006 |
9.00p |
11.00p |
46.% |
6 |
4.90% |
Nil |
20% |
5.51p |
|
8 Sept. 2006 |
9.00p |
9.00p |
46% |
6 |
4.90% |
Nil |
20% |
5.86p |
|
28 Jun. 2006 |
9.50p |
13.50p |
37% |
6 |
4.80% |
Nil |
20% |
3.30p |
|
28 Apr. 2006 |
9.50p |
13.50p |
37% |
6 |
4.70% |
Nil |
20% |
3.25p |
|
11 Aug. 2005 |
8.88p |
10.00p |
20% |
6 |
4.40% |
Nil |
20% |
3.18p |
|
9 May 2005 |
8.75p |
8.00p |
15% |
6 |
4.40% |
Nil |
20% |
2.50p |
Expected volatility was determined by calculating the historical volatility of the Company's share price over the period since the Company was admitted to trading on AIM.
18. Trade and other payables
|
|
2009 |
|
2008 |
|
The Group |
EUR 000 |
|
EUR 000 |
|
Trade payables |
974 |
|
1,639 |
|
Accruals |
68 |
|
96 |
|
|
1,042 |
|
1,735 |
|
The Company |
|
|
|
|
Trade payables |
338 |
|
1,098 |
|
Accruals |
35 |
|
12 |
|
Amount due to subsidiary |
17 |
|
- |
|
|
390 |
|
1,110 |
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented above.
19. Borrowings
|
Current borrowings |
|
|
|
|
Other loans |
- |
|
2,410 |
|
Non-current borrowings |
|
|
|
|
Other loans |
- |
|
308 |
|
Convertible Note |
6,876 |
|
- |
|
|
6,876 |
|
308 |
|
Maturity of non-current borrowings |
|
|
|
|
Between one to two years |
- |
|
308 |
|
Between two and five years |
6,876 |
|
- |
|
After five years |
- |
|
- |
|
|
6,876 |
|
308 |
Convertible Note Facility
On the 4 March 2009 the Company entered into a Convertible Loan Agreement with RCF and RMB to provide a borrowing facility of up to US$8.5 million (the 'Facility').
The Facility was arranged to provide funds for the Rio Tinto copper project in Spain, gold project in Slovakia and for general working capital purposes.
Loans made under the Facility are repayable on or prior to 31 December 2011. Amounts drawn down under the Facility may be converted at the discretion of each Lender into Ordinary Shares at the Conversion Price of 4.13 pence per Ordinary Share.
Interest is payable at a rate of 7.5% on funds drawn down with an annual commitment fee of 3.0 % on any undrawn amounts. The establishment fee was US$212,500 paid by the issue of 3,785,274 new Ordinary Shares.
The balance of the Convertible Note as at 31 December 2009 is EUR6,875,568 (US$8,662,917).
Interest can be paid in cash or shares at the election of the Company or the Lenders. In the case of shares, the price of such shares will be based upon the volume weighted average market price at the time of the payment. Interest for the period of US$162,916 was paid by the issue of 1,564,087 new Ordinary shares over the period.
Loans under the Facility are secured against the shares of the Company's subsidiaries, the Company's principal bank account, and certain assets of the Company's Slovakian subsidiaries.
The drawdown of the Facility is subject to the warranties made by the Company and certain of its subsidiaries, no event of default outstanding at the date of drawdown and the Company not suffering any material adverse effects.
YA Loan
On 18 December, 2007 the Company entered into an agreement with YA Global Investments L.P. ("YA") to provide a loan of US$5 million.
During 2009 the Company has repaid the YA loan in full, primarily from the proceeds of the August share placement.
20. Acquisition of subsidiaries
2009
There were no acquisitions during 2009.
2008
In 2008 the company incorporated two new fully owned subsidiaries EMED Holdings (UK) Ltd was incorporated in United Kingdom and EMED Marketing Ltd was incorporated in Cyprus.
The share capital for the incorporation of the three subsidiaries was paid in cash as follows:
|
|
EUR 000 |
|
EMED Marketing Ltd |
2 |
|
EMED Holdings (UK) Ltd |
3,570 |
|
|
3,572 |
21. Discontinued operations
There were no discontinued operations during 2009.
22. Related party transactions
The following transactions were carried out with related parties:
22.1 Compensation of key management personnel
The total remuneration of the Directors and other key management personnel was as follows:
|
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
Directors' fees |
381 |
|
464 |
|
Share option-based benefits to directors |
637 |
|
239 |
|
Other key management personnel fees |
347 |
|
405 |
|
Share option-based benefits to other key management personnel |
125 |
|
129 |
|
|
1,490 |
|
1,237 |
Share option-based benefits
The directors and key management personnel have been granted options as set out in Note 17.
22.2 Transactions with KEFI Minerals.
The company has an ongoing service agreement with KEFI Minerals plc for provision of management and other professional services.
|
|
2009 |
|
2008 |
|
|
EUR 000 |
|
EUR 000 |
|
Transactions with KEFI Minerals plc |
101 |
|
63 |
23. Contingent liabilities
As part of the acquisition cost of a 95% share in Eastern Mediterranean Minerals (Cyprus) Limited, an additional contingent consideration of EUR616,200 is payable by the Company one month after the date on which Eastern Mediterranean Minerals (Cyprus) Limited first receives revenue of EUR1,027,000 from or in respect of specific exploration tenements.
EMED Mining has initiated arbitration proceedings against Red Creek International ('Red Creek') in light of breaches committed by Red Creek of the terms of the Settlement Agreement signed between Red Creek and EMED Mining on 12 May 2008. The formal pleadings were presented 3 December 2009 and both parties provided written witness statements on 31 March 2010. The matter is proceeding under normal arbitration processes in Spain. The Company believes that it has a very strong case and will receive a favourable ruling. However, in the absence of such ruling it will be necessary for the Company to resume making payments that would otherwise have been payable under the Settlement Agreement including any amounts in arrears estimated to be EUR600,000 at the time of this report.
Certain of the land assets acquired by EMED Tartessus had liens attached thereto as a result of debts incurred by previous owners of the project. In the main, the liens relate to a debt in the amount of EUR16.9 million to Social Security de Andalucía. These liens are not the result of debt incurred by the Company and such debt is not recognised as a liability at the 31 December 2010. The company is currently in discussions with the relevant government body.
24. Capital commitments
The Group has undertaken a capital commitment, for exploration in Slovakia amounting to SKK29,300,000 (EUR972,467) over 2006 to 2009. The Group's exploration costs since 2006 and the budget for the following years exceed the amount of this capital commitment.
25. Events after the reporting period
EMED Mining Public Limited placed on the 3 May 2010 83,571,429 new ordinary shares of 0.25 pence each at an issue price of 10.5 pence each with a wide range of existing and new institutional investors principally in the UK and Canada. The Placing raised net proceeds of GBP8.3 million (gross proceeds of GBP8.775 million less expenses). The issue price represents a discount of 5.6 per cent to the closing mid-market price of 11.13 pence per Ordinary Share on 14 April 2010.
Related Shares:
Atalaya Mining