Half Yearly Report

patagonia gold plc

Condensed Consolidated Interim Financial Statements

(Expressed in U.S. dollars)

For the six months ended June 30, 2015

(Unaudited)

Chairman's introduction

I am pleased to present the Company's unaudited interim report for the six months ended 30 June 2015.

Raising equity in the current economic climate continues to be a challenge. Our Lomada heap leach project remains the primary source of income for the Company and despite lower production in the first six months of the year will generate cash through the fluctuations in the market price of gold.

Development works continue on our other core projects, full details of which are set out in the following Operations Report.

During the period Mr Christopher van Tienhoven was appointed to the Board as Chief Executive Officer. We welcome him and look forward to working with him and believe that his experience will significantly add to the Company going forward.

Our new management team continues to look to reduce costs both in the UK and in Argentina in the context of the current market conditions.

Carlos J Miguens

Non-Executive Chairman

OPERATIONS REPORT

Patagonia Gold Plc

Patagonia Gold Plc ("Patagonia" or the "Company") is a gold and silver mining and exploration company operating in Argentina. The Company's growth strategy aims to develop a number of projects located in the province of Santa Cruz in the southern Patagonia region of Argentina, a mineral-rich region that hosts several medium sized producing assets such as the Cerro Vanguardia Mine (AngloGold Ashanti), Manantial Espejo (Pan American Silver Corp.) and the world class Cerro Negro mine (Goldcorp Inc.) currently under development.

The Company holds, directly or indirectly through its subsidiaries or under option agreements, the mineral rights to over 220 property interests in Argentina and Chile. These include the mineral rights to 67 property interests in the province of Santa Cruz covering approximately 190,000 hectares held by the Company's 90%-owned Argentinian subsidiary, Patagonia Gold S.A. ("PGSA") and to 51 property interests covering approximately 156,000 hectares held by the 100%-owned Argentinian subsidiary Minera Minamalu S.A. ("Minamalu").

The Company's operations in Santa Cruz are managed and operated through PGSA and the land holdings in Santa Cruz include approximately 200,000 hectares acquired from Barrick Gold Corporation in 2007 and a further 100,000 hectares acquired from the Santa Cruz government's wholly-owned mining company, Fomento Minero de Santa Cruz Sociedad del Estado ("Fomicruz") in 2011.

Fomicruz acquired 10% of PGSA in return for the rights to explore, develop and mine 100,000 hectares of Fomicruz's prospective mining properties. Patagonia benefits from having the Santa Cruz government as a strategic partner in developing a number of PGSA's projects, including the four main properties discussed below.

Patagonia's Properties

The Lomada de Leiva gold project (the "Lomada Project") is located in the La Paloma property block approximately 120 kilometres to the north of the El Tranquilo property block. The Company successfully completed a heap leach trial at the Lomada Project and has now brought Lomada into full production.

Patagonia's flagship project is the Cap-Oeste gold and silver project (the "Cap-Oeste Project") located in the El Tranquilo property block approximately 65 kilometres southwest of the town of Bajo Caracoles in Santa Cruz. The Company's aim is to continue to expand the Cap-Oeste Project resource base and to develop the project towards production in 2016.

Two kilometres along strike from the Cap-Oeste Project is the smaller but strategically vital Cap-Oeste South-East Project (the "COSE Project"). The Company plans to commence development and mining of the COSE Project as a means of generating significant near-term cash flow to self-finance a sizeable portion of the development requirements for the Cap-Oeste Project.

The La Manchuria property block is located approximately 50 kilometres to the southeast of the El Tranquilo property block and hosts the La Manchuria Project. The Company also has a number of other highly prospective exploration leases within the Deseado Massif.

Several of the Company's properties host mineralisation that is not typical of epithermal vein systems. The properties are characterised by low and high sulphidation, epithermal style gold-silver deposits hosted within hydrothermal breccias or fault hosted breccias, with widths of up to 35 metres of Bonanza grade mineralisation being intersected. The Cap-Oeste Project falls into this category, as does the COSE Project.

Since the property acquisition from Barrick Gold Corporation ("Barrick") in 2007, the Company has rapidly grown its resource base through the implementation of a thorough and aggressive exploration and development programme.

Resources delineated as at 30 March 2015 are listed in the table below;

*Lomada resource to be depleted during Q3 2015, pending completion of third party estimation

Table 1: 2015 resource Statement Santa Cruz Properties

Lomada de Leiva Project

The Lomada Mine produced 29,347 ounces in 2014 with annual gross revenue of $34.87 million, with all-in costs for the Lomada project of $775/Oz. Total forecast production for 2015 has been estimated at 31,000Oz

Operational difficulties have been experienced throughout the last 12 months due to restrictions applied on the importation of spare parts and for this reason machine availability has suffered significantly with respect to the first 2 years of operation. An operational update will be provided in due course once forecasts can be revised and a schedule completed for the next 12 months of operation.

Exploration on the 40,000 hectare La Paloma block has commenced and detailed ground magnetics, and a geochemical, trenching and drilling programme will be ongoing throughout the remainder of the year and 2016. The objective is to replenish and expand the 30,000 ounces of production per annum and explore the previously under explored La Paloma block. Targets have already been defined with the objective to drill these targets during 2015 once a rig becomes available from the El Tranquilo and La Manchuria blocks

Cap-Oeste Project

The Cap-Oeste Project is the Company's flagship project and is located within a structural corridor extending six kilometres from the La Pampa prospect in the northwest to the Tango prospect in the southeast. The Cap-Oeste deposit to date has an identified and delineated strike extent of 1.2 kilometres.

Since acquiring the property from Barrick in 2007, the Company has drilled a total of 502 drill holes for 102,300m and all this data was utilised in the re-interpretation and modelling of the Cap-Oeste deposit during January 2015. Mineralisation was modelled in a broader envelope and included new holes not incorporated into the previously published resource dated 10 September 2012. In March 2015, an updated resource estimate was calculated with the Cap-Oeste mineralisation now hosting 1,295,000 AuEq ounces and a further 385,000 ounces contained in the Inferred category.

The Cap-Oeste mineralisation has now been intersected over a distance in excess of 1,200 metres along the Bonanza fault structure, the majority of which is concentrated within a strike length of 650 metres by 350 metres in depth and in excess of 12 metres in average true width. The thickening of the mineralisation is due to areas of dilation where two or more major structures intersect. These zones of structural complexity exhibit the most potential for future resource expansion and are now the focus of future exploration.

Development of the Cap-Oeste asset is seen as a critical and necessary step for the future of the Company in Argentina. Over the last two years several options have been investigated in depth and in March 2015 a detailed pre-feasibility study was completed on the oxide portion of the Cap-Oeste resource. The study included an updated and remodelled resource, a plant and heap leach pad design and exhaustive metallurgical test work carried out over an extended period to optimise the feed criteria for a heap leach operation. The economic returns from the project although positive were not sufficiently robust to give the Company the comfort to advance at this stage, the principal reason being that the life of mine is too short and additional tonnages of cyanide leachable material are needed to advance with the project development.

Test work continues on the sulphide material in search of a suitable solution to recover the gold trapped in the refractory portion and the non-refractory mineralisation. A mine design accessing only the super high grade portion of the Cap-Oeste mineralisation is underway. A mixture of very high grade COSE style mineralisation has been identified within areas previously classified as refractory sulphide, this mineralisation has abundant free gold and very high grade leachable silver sulphides present within the sulphide envelope. A 5 hole programme completed in February 2015 highlighted the potential for small tonnage high grade resource similar to COSE to be delineated within the existing sulphide material.

Table 2: Significant intersections from four holes:

# Hole CO-402-D suffered significant core loss in the highest grade interval hence results are considered conservative

## No upper cuts were applied to intervals during reporting

### Gold Equivalent (Au Eqv) was calculated at a Ag;Au ratio of 74:1

Drilling will commence again in early October 2015 with the objective of finalising geotechnical study work and collecting the final metallurgical composite sample. A detailed gold deportment study is currently being completed and this work will be utilised in conjunction with the final round of float and cyanidation test work to complete the process design and flow sheet for the installation of a small tonnage plant and Merrill Crowe metals recovery circuit.

COSE Project

The COSE Project, located two kilometres along strike from the Cap-Oeste Project, is currently planned to be the second project within the Company's portfolio to be developed. COSE is a fault breccia hosted quartz sulphide rich Au-Ag system hosted within the intersection of the steeply dipping COSE (extension of Bonanza) fault and cross cutting northeast and southwest trending structures. The mineralisation was discovered in early 2010 during exploration along the Bonanza fault towards the Tango prospect.

The COSE Project was previously undrilled and initial drilling results indicated that the grades intersected might lead to the delineation of a stand-alone resource for short-term development. This proved to be the case with a resource of slightly below 100,000 AuEq ounces being delineated in approximately 69,000 tonnes of material in the updated resource estimate prepared in March 2015. Wide low grade or diffuse zones of Ag rich low-grade Au mineralisation characterise the mineralisation outcrops at surface and within the first 130 metres vertically down dip. Below 130 metres and continuing to a currently delineated depth of 260 metres, the width of the fault hosted breccia decreases and the grade of both Au and Ag increase exponentially leading in turn to the overall resource grade being estimated in excess of 44 g/t Au Eq. The mineralised structure containing the COSE deposit remains open at depth and along strike. Future deeper drilling which is required in order to test the down dip potential of the deposit will be carried out from underground.

In 2010 the Company filed the maiden NI 43-101 resource estimate for the COSE Project. A preliminary economic assessment ("PEA") was completed to establish viability for the construction, mining and processing of the deposit. The PEA showed the project could be constructed and mined out in a 23-month period and to have very attractive financial characteristics that included a production rate of 3,600 tonnes per month at a cash cost of $167 per tonne, net revenue of $63.7 million (assuming gold price of $1,204 per ounce and Ag of $23.75 per ounce), net present value of $56.8 million at an 8% discount rate, an extraordinary internal rate of return of 870% and a payback period of only two months after the start of production.

Drilling continued in 2011 / 2012 and as at 30 June 2012, a total of 107 holes, including geotechnical and water monitoring totalling 22,638 metres had been completed on the COSE Project and the area directly surrounding the delineated resource. A further 10 diamond core HQ drill-holes totalling 2,475 metres were completed in the Q2-2013 programme targeting the wide mineralised area between Cap-Oeste and COSE along the Bonanza corridor and at depth to the NW of the existing mineralisation.

A resource model and pre-feasibility study has been completed. The updated resource estimate increased the contained resource in the Indicated category to 83,000 ounces AuEq with the overall resource tonnage increasing to 69,000 tonnes and overall average grade dropping to 44.8 g/t AuEq. The COSE project is to be included into the expanded Cap-Oeste high grade sulphide mine and development programme currently underway with no further work required on COSE at this stage, apart from 1 metallurgical drill hole which will be completed by mid-October 2015.

La Manchuria Project

The La Manchuria Project is located approximately 44 kilometres south-east of the Cap-Oeste and COSE deposits and represents a large system of low sulphidation style vein hosted gold-silver (Au-Ag) mineralisation which outcrops at surface. Shortly after acquisition from Barrick in 2007, the Company launched a three-year exploration programme that included soil geochemistry, mapping, trenching, petrographic analysis and topographic surveying. To date, the Company has completed three drilling campaigns for a total of 20,993 metres of diamond and reverse circulation drilling on this project.

An NI 43-101 resource estimate, released in September 2010, listed Indicated Resources at 55,684 ounces of AuEq and Inferred Resources of 90,682 ounces. High-grade gold and silver mineralisation is open along strike to northeast and southeast.

Exploration of the La Manchuria block has recommenced and drilling is due to start later this year on geophysical targets defined by a recently completed pole-dipole study, as results become available the market will be made updated.

El Tranquilo Project

Exploration at the El Tranquilo project over the past 12 months has focussed on developing a deeper understanding of the structural-stratigraphic architecture of the project area to better comprehend the controls on the mineralisation. The programme has incorporated detailed geological mapping, widespread application of ground magnetics, gradient array IP geophysics, soil geochemistry and reconnaissance RC drilling, culminating in an extensive and detailed Pole-Dipole Induced Polarisation (IP) geophysical survey to develop high priority targets that will be drill tested during the latter part of 2015.

The following volumes of work have been completed; (from 1/06/2014 to 31/08/2015)

Data from the programme of systematic geological mapping, geophysics, geochemistry trenching, and drilling has now been integrated into a comprehensive litho-structural model for the Cap Oeste - COSE corridor. This multi-faceted exploration programme has highlighted several high priority targets that are scheduled to be drill tested during October - November 2015. The highest priority targets include;

La Pampa. Located beneath 10-15m of periglacial gravels, 2.2km to the NW of Cap Oeste, along the Bonanza Fault - Esperanza fault corridor where very strong and coincident IP resistivity and chargeability anomalies have been defined. The large geophysical target has not been drill tested previously however isolated drilling nearby intersected gold grades up to 6.59ppm.

Cap Oeste. A 1.1km long, very strong chargeability anomaly located in the footwall of Bonanza fault, immediately north east of the Cap Oeste mineralisation that has never been tested by drilling

El Valle. The prospect hosts paleo hot-springs, silica sinter deposits and extensive hydrothermal eruption breccias overlying a deep IP geophysical target interpreted to be located on a graben bounding fault. Trenching has returned intersections up to 21m at 1.0ppm Au and extremely high pathfinder elements.

Alina. An IP chargeability anomaly coincident with an intense magnetic susceptibility low in a position interpreted to be located on a major tectonic feature dividing the Valle and Cap Oeste-COSE sectors.

Bonanza and Tango. Both prospects host untested, strong, coincident COSE style Chargeability-Resistivity anomalies associated with structures known to host mineralisation.

One of the important understandings coming from the development of the litho-stratigraphic model is the recognition of late to post mineralisation cover sequences that are interpreted to be masking deeper mineralisation. As a result, the next phase of drilling will evaluate deeper targets.

Social and economic responsibility

Patagonia maintains a strong awareness of its responsibilities towards the environment and existing social structures.

Careful attention is given to ensure that all exploration and development work is carried out strictly within the guidelines of the relevant mining and environmental acts. Patagonia attempts, where possible, to hire local personnel and use local contractors and suppliers.

Matthew Boyes

Chief Operating Officer

PATAGONIA GOLD PLC

Condensed Consolidated Interim Statement of Comprehensive Income

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PATAGONIA GOLD PLC

Condensed Consolidated Interim Statement of Financial Position

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PATAGONIA GOLD PLC

Condensed Consolidated Interim Statement of Changes in Equity

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PATAGONIA GOLD PLC

Condensed Consolidated Interim Statement of Cash Flows

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PATAGONIA GOLD PLC

Notes to Condensed Consolidated Interim Financial Statements

The financial information represents the results of the parent company Patagonia Gold Plc (the "Company") and its subsidiaries, collectively known as the "Group".

1. Basis of preparation

Patagonia Gold Plc is a company registered in England and Wales. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and with the Companies Act 2006 applicable to companies reporting under IFRS. The Group's condensed consolidated interim financial statements have also been prepared in accordance with IFRS as issued by the International Accounting Standards Board ("IASB"). This condensed consolidated financial information does not comprise statutory financial statements within the meaning of Section 434 of the Companies Act 2006. Statutory financial statements for the year ended 31 December 2014 were approved by the Board of Directors on 8 April 2015. These financial statements which contained an unqualified audit report under Section 495 of the Companies Act 2006, did not contain any statements under Section 498(2) or (3) of the Companies Act 2006, and have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

The accounting policies applied in these condensed consolidated interim financial statements are consistent with those used in the annual consolidated financial statements for the year ended 31 December 2014. These condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements. There has been no change in critical accounting estimates from year-end.

2. Going concern

These condensed consolidated interim financial statements are prepared on a going concern basis, which the Directors believe to be appropriate.

The Group is an advanced gold and silver exploration and development company which commenced commercial production of gold in July 2013 upon the successful commissioning of its new gold processing facility at the Lomada de Leiva Project. Gold production continues despite operation difficulties primarily arising from poor equipment availability due to import restrictions of spare parts. The Company embarked on an exploration programme in the 40,000ha Lomada tenement with a view to replacing the depleting ounces from operation thus extending the mine's life.

Patagonia Gold's growth strategy includes the development the flagship Cap-Oeste / COSE Project. Options are being considered to develop the project in two stages, the first stage being an oxide leach process from Cap Cap-Oeste resource together with the COSE project and the second stage being the development of the Cap Cap-Oeste sulphide mineralisation.

Regular monthly cash flow from the Lomada Project main heap leach together with short term financing facilities, are targeted to partly finance the Company's exploration programme for 2015 and continuing studies on the Cap Cap-Oeste / COSE project.

The Directors consider that the Group and parent company cash reserves as at 30 June 2015, together with expected operating cash inflows from Lomada, anticipated VAT recovery, proceeds from asset sales, and expected funding availability from existing open lines of credit, will enable the Group to meet all of its financial commitments, including loan repayments, as they fall due over a period of at least 12 months from the date of this report. Taking into account the nature of the Group's current and planned activities and the flexibility that this provides operationally and for cash flow purposes, the directors have therefore concluded that the condensed consolidated interim financial statements should be prepared on a going concern basis.

3. Recent accounting pronouncements

The following IFRS standards and amendments to existing standards have been published and are mandatory for the Company's accounting periods beginning on or after 1 January 2015 or later periods. The Company has not implemented early adoption:

· IFRS 2 (Annual Improvements for 2010-2012 Cycle), 'Share-based Payment', effective for annual periods beginning on or after 1 July 2014. The amendments to IFRS 2 clarify the definition of 'vesting condition' and 'market condition' and add definitions for 'performance condition' and 'service condition';

· IFRS 8 (Annual Improvements for 2010-2012 Cycle), 'Operating Segments', effective for annual periods beginning on or after 1 July 2014. The amendments require an entity to disclose the judgments made by management in applying the aggregation criteria to operating segments and clarifies that an entity shall only provide reconciliations of the total of the reportable segments' assets to the entity's assets if the segments' assets are reported regularly.;

· IFRS 9, 'Financial Instruments - Classification and Measurement', effective for annual periods beginning on or after 1 January 2015. The standard reflects the first phase of the IASB's three stage project to replace IAS 39. The first phase deals with the classification and measurement of financial assets and financial liabilities. The Company will also consider the impact of the remaining phases of IFRS 9 when completed by the IASB;

· IFRS 13 (Annual Improvements for 2010-2012 Cycle), 'Fair Value Measurement', effective for annual periods beginning on or after 1 July 2014. The amendment clarifies that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting if the effect of not discounting is immaterial;

· IAS 16 (Annual Improvements for 2010-2012 Cycle), 'Property, Plant and Equipment', effective for annual periods beginning on or after 1 July 2014. The amendment clarifies that when an item of PPE is revalued the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount;

· IAS 24 (Annual Improvements for 2010-2012 Cycle), 'Related Party Disclosures', effective for annual periods beginning on or after 1 July 2014. The amendment clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity;

· IAS 38 (Annual Improvements for 2010-2012 Cycle), 'Intangible Assets', effective for annual periods beginning on or after 1 July 2014. The amendment clarifies that when an intangible asset is revalued the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount.

The effect of the new standards and interpretations have been considered by management and are not expected to result in a material adjustment to the consolidated financial statements.

4. Segmental analysis

Management do not currently regard individual projects as separable segments for internal reporting purposes with the exception of the Lomada Project, which commenced commercial production in Q3 2013 and the COSE Project where construction work has commenced. All revenue in the period is derived from sales of gold and silver.

The Group's net loss and its geographic allocation of total assets and total liabilities may be summarised as follows:

(1) Segment represents other exploration projects.

(1) Segment represents other exploration projects.

(1) Segment represents other exploration projects.

(1) Segment represents exploration projects other than the Lomada Project and the COSE Project.

From 1 September 2010 onwards, expenditures incurred at the Lomada Project are capitalised and disclosed as mineral properties - mining assets (See Note 8). From 1 April 2011 certain costs are included in inventory.

From 1 March 2011 onwards, expenditures incurred at the COSE Project are capitalised and disclosed as mineral properties - assets in the course of construction (See Note 8).

Exploration costs incurred at all the other projects are written off to the statement of comprehensive income in the period they were incurred.

5. Other administrative costs

6. Remuneration of Directors and key management personnel

Parent company Directors' emoluments:

In the six months ended 30 June 2015, the highest paid Director received $57 thousand (six months ended 30 June 2014: $142 thousand). This amount does not include any share-based payments charge.

Key management personnel emoluments:

7. Loss per share

The calculation of basic and diluted earnings per share is based on the following data:

There is no difference between the diluted loss per share and the basic loss per share presented. Due to the loss incurred in the period the effect of the share options in issue is anti-dilutive.

At 30 June 2015, there were 95,258,000 (30 June 2014: 78,883,000; 31 December 2014: 85,383,000) share options and 24,705,000 warrants (30 June 2014 and 31 December 2014: 24,705,000) in issue, which would have a potentially dilutive effect on the basic profit per share in the future.

8. Mineral properties

Mining assets

The Lomada Project completed the trial heap leach phase and entered full commercial production in Q3 2013. From 1 September 2010 all development costs incurred in respect of the project have been capitalised as mineral properties - mining assets. The revenue received from the sale of gold and silver recovered from the Lomada trial heap phase was offset against the capitalised costs of Lomada Project development in compliance with IAS 16. Amortisation is charged based on the unit-of-production method.

Surface rights 

The Company owns the surface rights to over 63,000 hectares of land encompassing the Estancia La Bajada, Estancia El Tranquilo and the Estancia El Rincon.

The Company has clear title and outright ownership over Estancia La Bajada and Estancia El Tranquilo. There is a back in right granted to the sellers under Estancia El Rincon's title deed whereby the Company irrevocably committed to resell the estancia to its former owner in the event that two consecutive years elapse without mining activities. Current activity on this estancia includes the Lomada de Leiva project.

Assets in the course of construction

From 1 March 2011, exploration costs on the COSE Project have been capitalised as mineral properties - assets in the course of construction, prior to the receipt of full permitting for extraction of the mineralisation.

9. Property, plant and equipment

Improvements and advances at the year-end relate to the development and modification of software and plant, including advance payments. During the period, assets under development with a cost of $165 thousand came into use and were subsequently reclassified as plant.

10. Mining rights

On 14 October 2011, Patagonia Gold, PGSA and Fomicruz entered into a definitive strategic partnership agreement in the form of a shareholders' agreement ("Fomicruz Agreement") to govern the affairs of PGSA and the relationship between the Company, PGSA and Fomicruz. Pursuant to the Fomicruz Agreement, Fomicruz contributed to PGSA the rights to explore and mine approximately 100,000 hectares of Fomicruz's mining properties in Santa Cruz Province in exchange for a 10% equity interest in PGSA. The Fomicruz Agreement establishes the terms and conditions of the strategic partnership for the future development of certain PGSA mining properties in the Province. The Company will fund 100% of all exploration expenditures on the PGSA properties to the pre-feasibility stage, with no dilution to Fomicruz. After feasibility stage is reached, Fomicruz is obliged to pay its 10% share of the funding incurred thereafter on the PGSA properties, plus annual interest at LIBOR +1% to the Company. Such debt and interest payments will be guaranteed by an assignment by Fomicruz of 50% of the future dividends otherwise payable to Fomicruz on its shares. Over a five year period, the Company through PGSA is required to invest $5.0 million in exploration expenditures on the properties contributed by Fomicruz, whose rights to explore and mine were contributed to PGSA as part of the Fomicruz Agreement. The Company will manage the exploration and potential future development of the PGSA properties.

Fomicruz contributed to PGSA certain mining rights in exchange for a 10% equity interest in PGSA. Pursuant to IFRS 2 Share-based Payment, the mining rights acquired have been measured by reference to the estimated fair value of the equity interest given to Fomicruz. Management has estimated the fair value of the 10% interest in PGSA acquired by Fomicruz, on or about 14 October 2011 at $4.0 million. In determining this fair value estimate, management considered many factors including the net assets of PGSA and the illiquidity of the 10% interest. This amount has been recorded as an increase in the equity of PGSA and as a mining right asset. In the consolidated financial statements, the increase in equity in PGSA has been recorded as non-controlling interest. The initial share of net assets of PGSA ascribed to the non-controlling interest amounted to $4.0 million.

Management do not consider there to be any indications of impairment and no review of the carrying value has been undertaken.

The mining rights acquired by PGSA are for a forty-year period from the date of the agreement. As indicated above, these mining rights have been recorded as an intangible asset and are amortised on a straight-line basis over forty years commencing in 2012.

11. Other receivables

Non-current assets

The Directors consider Recoverable VAT at 30 June 2015 to be recoverable in full based on post period-end approvals set by the Mining Secretary in Argentina.

The Directors have considered post year-end approvals set by the Mining Secretary in Argentina and consider the Recoverable VAT as at 30 June 2015 to be recoverable in full and no provision is considered necessary. The VAT balances receivable are normally due to the Group in less than one year, but these amounts have been classified as a non-current asset as management's on-going dialogue with the government indicate approval by the Mining Secretary and receipt of the funds may require a timeframe of more than one year.

12. Trade and other receivables

Current assets

All trade and other receivable amounts are short-term.

The carrying value of all trade and other receivables is considered a reasonable approximation of fair value.

There are no past due debtors.

13. Available-for-sale financial assets and finance income

Available-for-sale financial assets

 The Company holds available-for-sale financial assets in listed equity securities that are publically traded on the AIM market. Fair values have been determined by reference to their quoted bid prices at the reporting date. The following unrealised losses are included in accumulated other comprehensive income.

The following table presents financial assets and liabilities measured at fair value in the statement of financial position in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.

The financial assets and liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy as follows: