Interim Results

24th Sep 2009 07:00



EMED MINING INTERIM RESULTS

TO 30 JUNE 2009

 

24 September 2009 AIM: EMED

EMED Mining Public Limited ("EMED Mining" or "the Company") announces its unaudited interim results for the half-year ended 30 June 2009.

Highlights

Rio Tinto Mine - Copper in Spain

Detva Gold Project - Gold in Slovakia

KEFI Minerals (29%-owned) - Separately listed on AIM

Corporate

Mr. Anagnostaras-Adams, EMED Mining's Managing Director, said: "We are pleased with the way in which the Company has withstood the ravages of the global financial crisis - our reinforcement and strengthening of core teams, our protection of core assets and most importantly our strengthening of relationships with the regulatory authorities and local governments in Spain and Slovakia. 

"Our two projects are very worthwhile for all stakeholders and we work carefully with the authorities to ensure due diligence in their planning and execution. The Company continues to work towards restarting copper production in Spain and progressing the gold project in Slovakia towards development. Our projects are located in regions that are economically depressed and are expected to make meaningful long term contributions to these regions upon proper implementation.

"Management greatly appreciates the patience and support of shareholders as well as the communities we serve." 

Mr. John Leach, the Company's Finance Director added: "The financial accounts of the Group at this stage reflect the Board's conservative stance of writing off all exploration expenditures until projects are fully permitted and production triggered. Once that occurs the subsidiaries will be duly capitalised, the projects financed and appropriate levels of metal price hedging will be arranged to protect the projects in their start-up years."

 

The Managing Director's Report and the Financial Statements follow.

EMED Mining	RFC Corporate	Fox-Davies	Bishopsgate
	Finance	Capital	Communications
Harry Anagnostaras-Adams	Stuart Laing	Daniel Fox-Davies	Nick Rome
+357 9945 7843	+61 8 9480 2500	+44 20 7936 5220	+44 207 562 3350

  

MANAGING DIRECTOR'S REPORT

Review of Operations

Activities in Spain

EMED Mining's wholly-owned subsidiary, EMED Tartessus S.L. is the 100% owner of the mining property and processing infrastructure at the Rio Tinto Mine. The regulatory authorities are required to formally consider the adequacy of our plans and our competencies and the Company has submitted formal requests for that to occur and has held detailed discussions with the authorities. In so far as the Company has been advised informally to date, it has submitted all information required and awaits a formal response.

Support for the Company and the plan to restart production at the mine is now evident. Public expressions of support were made during the period under review by the ruling political party, the civil service and the relevant labor union. The local communities and local governments are strong supporters of the Company and it is pleasing that recently many excellent former personnel of the project have offered their services and support to the Company now that project ownership and leadership has been cleaned up.

As part of the European Union unified environmental permitting process, a new Environmental Impact Assessment has also been submitted. The identification and evaluation of potential impacts of the project were more detailed than ever before and these assessments were updated to current European Union standards. The documentation also detailed the positive impact of the project on the current environmental condition of the site, the human resources of the local communities and the economic impact in this economically distressed region. Independent reviews certify that the project's go ahead under the proposed plans will improve the environmental condition of the site.

Subject to receiving the initial formal in-principle approval, EMED Mining will then need to obtain/renew the full set of environmental and normal operating licences and permits on the various aspects of operation such as dust emission, noise control, safety policies and procedures and blasting practices. As the mine previously operated for many years, the regulatory authorities and the Company's personnel have extensive familiarity with the specific issues and realities of the situation at the mine site. Therefore, these aspects of permitting should be more straightforward than would be the case for a new mining operation. Nevertheless full details will be provided and considered in every respect.

In due course compensation due to certain third party landholders will be determined. Some complexity exists due to past dealings by former controllers/managers who have been banned from the project by both the Company and the authorities and some of whom are now being prosecuted for criminal offences. The regulatory process provides a framework to facilitate a proper resolution and we will work with the authorities in these matters as appropriate.

Activities in Slovakia

EMED Mining is exploring large, 100%-owned tenement holdings in the Central Slovakian Volcanic Field. The licence holdings were upgraded during the last six months by replacing one licence (Badin) with applications for the Krupina and Prochot licence areas which are considered more prospective. The Hodrusa-Banska Stiavnica licence has received a four-year extension. The surface area of licences and applications now totals 1,189 km2. 

EMED Mining discovered the Biely Vrch porphyry gold deposit, which now has an initial Mineral Resource (JORC Code compliant) of 41.7 million tonnes at 0.79g/t gold, containing 1.1 million ounces of gold and is open at depth. In order to better assess the feasibility and economics of developing Biely Vrch, a Scoping Study by AMC Consultants (UK) Ltd has been completed.

The key conclusions emerging from the scoping study are that at current gold prices the project is attractive and warrants progressing the next stages of planning for development. The essence of the project plan is to mine by open cut methods the ore at the top of the Biely Vrch mineralised system. Estimated recovered grades from this near-surface zone is 0.6g/t -0.7g/t gold which is similar to the successful Kisladag gold mine in Turkey. The study identified key areas for particular focus in the Preliminary Feasibility Study including the conditions of regulatory permits, the selection of land for procurement, metallurgical recoveries, geotechnical ground conditions and environmental impacts. A permitting plan has also been drafted with local authorities that sets out the work required to obtain the necessary permits to develop a gold mine at Biely Vrch for production as from 2012. 

Separately from the project focussed on the open-cut mining of the near-surface zone at Biely Vrch, the Company will also proceed to examine the economic potential of the deeper underground mineralisation. The mineralisation at Biely Vrch appears to be widening and increasing in grade at depth with the potential for significant mineralisation below the current delineated resources.

In addition to advancing project plans and assessments at Biely Vrch, the Company will explore other gold porphyry systems identified in its tenements. 

A detailed technical update of progress on this activity will issue shortly.

Activities in Cyprus

EMED Mining's 95%-owned copper project in Cyprus holds the island's largest portfolio of exploration licences. The Company also owns the largest geological database including coverage of the large mines operated by once-multinational Cyprus Mines Corporation which stopped production in 1974 due to the military and political division of the island at that time.

This project is kept on care and maintenance due to current priorities elsewhere. Discussions take place with stakeholders over the entire island with a view to optimizing the future exploration and development potential for the benefit of all stakeholders. The Company works carefully to ensure its efforts assist re-unification efforts.

KEFI Minerals' Activities

A joint venture agreement was signed early in 2009 with Abdul Rahman Saad Al-Rashid & Sons Company Limited ("Artar") to explore in Saudi Arabia - targeting the discovery and development of large (+1 million ounce) gold deposits in the under-explored Precambrian Shield. The establishment of this strategic alliance is an important step towards any future success in Saudi Arabia. This is the third strategic alliance for KEFI Minerals, the first being that with EMED Mining and the second being the ongoing Artvin joint venture in Turkey with Canadian based Centerra Gold Inc. 

Financial Results

All exploration expenditure incurred by the Company is expensed until the projects are fully permitted and the Board makes a commitment to restart operations or develop a new mining operation. This conservative accounting policy is reflected in the Company's reported loss of €4.3 million for the period, which is primarily comprised of:

Financial Position

At 30 June 2009, EMED Mining had:

Capital Markets Support

In August 2009, the Company successfully raised £2.7 million (net of expenses) by a share issue at £0.075 per share. Shareholders have been supportive of the Company's funding requirements throughout the period since the admission to AIM in May 2005 and despite the recent global financial crisis.

The EMED Mining ownership structure remains characterised by a core group of international mining industry specialists in mine development, operation and marketing as follows:

Other shareholders include global financial institutions, Fidelity International, Goldman Sachs and Standard Life. Given the long term outlook for metal price and subject to regulatory consents, the Company's shareholders and Goldman Sachs, lead-arranger for the Rio Tinto Mine project finance and guarantees, remain ready to support EMED Mining to capitalize its subsidiaries for a target restart of copper-in-concentrate production in Spain at Rio Tinto next year.

Fully-diluted Share Capital

After the £2.7 million equity placing in August 2009, the Company's fully diluted share capital has remained relatively unchanged at approximately 520.8 million shares, comprised as follows after the placing is completed:

Outlook

EMED Mining is working towards commencing copper production at the Rio Tinto Mine in Q4 2010, with formal permitting to hopefully start imminently and the ancillary permits issuing in Q1-10. Concurrently, exploration and feasibility work will continue at Biely Vrch, with an ultimate goal of bringing this project into production by 2012. 

Copper has rebounded sharply from the low prices in early 2009 and is currently trading at approximately US$2.80/lb The outlook for copper remains strong due to growing demand from emerging countries (particularly China) and growth in copper supply is constrained.

The gold price is trading in the order of US$1,000/ounce.

-end-

Managing Director, Harry Anagnostaras-Adams

Competent Persons for Reporting of Mineral Resources and Ore Reserves

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.

 

 

EMED MINING PUBLIC LIMITED

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

for six months to 30 June 2009

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

for six months to 30 June 2009

 

 

	Note	Six months ended  30 June 2009 (Unaudited) € 000's	Six months ended  30 June 2008 (Unaudited) € 000's	Year  ended  31 Dec 2008   € 000's
Revenue		-	-	-
Exploration expenditure		(588)	(1,470)	(6,732)
Care and maintenance expenditure		(816)	-	-
Spain licensing expenses		(926)	-	-
Evaluation costs of Rio Tinto Mine	9	-	(4,453)	5,285
Provision for impairment of goodwill		-	-	(9,333)
Share of results of associates		(285)	(222)	(2,004)
Administration expenses		(728)	(782)	(817)
Share based payments		(1,062)	(344)	(733)
Net Foreign Exchange transaction gain/(loss)		403	-	(2,481)
Finance income		10	644	93
Finance costs		(283)	(203)	(336)
Loss before tax		(4,275)	(6,830)	(17,058)
Tax	4	427	-	453
Net loss for the period/year from continuing operations		(3,848)	(6,830)	(16,605)
Attributable to:
Equity holders of the parent		(3,848)	(6,822)	(16,622)
Minority interest		-	(8)	17
Net loss for the period		(3,848)	(6,830)	(16,605)
Earnings per share information
Basic and fully diluted loss per share (pence) 6		(1.52)	(3.72)	(8.0)

 

The Group has not any income or expense that is not included in the condensed consolidated statement of operations. 

 

 EMED MINING PUBLIC LIMITED

CONDENSED CONSOLIDATED BALANCE SHEET

As at 30 June 2009

	Note	30 June 2009 (Unaudited) € 000's	30 June 2008 (Unaudited) € 000's	31 Dec  2008 € 000's
Assets
Non current assets
Plant and equipment	8	7,789	296	7,505
Intangible assets	9	2,693	-	2,009
Deferred tax		2,238	-	1,811
Deferred financing expenses		434	-	-
Investment in associates	10	478	895	499
Total non current assets		13,632	1,191	11,824
Current assets
Inventories		-	49	-
Trade and other receivables	11	2,502	973	2,325
Bank and cash balances	12	1,148	9,301	1,420
Total current assets		3,650	10,323	3,745
Total assets		17,282	11,514	15,569
Equity and liabilities
Capital and reserves
Share capital	13	859	667	795
Share premium	13	41,685	30,152	40,680
Share options reserve		2,905	1,454	1,843
Other reserves		(35,853)	(24,363)	(32,110)
Total equity attributable to equity holders of the parent		9,596	7,910	11,208
Minority interest		(92)	(109)	(92)
Total capital and reserves		9,504	7,801	11,116
Non-current liabilities
Borrowings	14	4,339	2,701	308
Current liabilities
Trade and other payables	15	1,461	630	1,735
Borrowings	14	1,918	382	2,410
Tax payable		60	-	-
Total current liabilities		3,439	1,012	4,145
Total equity and liabilities		17,282	11,514	15,569

  

EMED MINING PUBLIC LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for six months to 30 June 2009

	Share capital	Share premium	Share options reserve	Accumulated losses	Equity reserve	Exchange Difference Reserve	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
At 1 January 2008	507	18,054	1,110	(17,798)	851	(79)	2,645
Net loss for the year	-	-	-	(6,830)	-	-	(6,830)
Minority interest	-	-	-	(8)	-	-	(8)
Issue of share capital	160	12,628	-	-	-	-	12,788
Share issue costs	-	(530)	-	-	-	-	(530)
Recognition of share based payments	-	-	344	-	-	-	344
Share of equity adjustments in associates	-	-	-	-	224	-	224
Exchange difference on translation of subsidiaries	-	-	-	-	-	(723)	(723)
At 30 June 2008	667	30,152	1,454	(24,636)	1,075	(802)	7910
Net loss for the period	-	-	-	(9,792)	-	-	(9,792)
Minority interest	-	-	-	25	-	-	25
Issue of share capital	128	10,528	-	-	-	-	10,656
Share issue costs	-	-	-	-	-	-	-
Recognition of share based payments	-	-	389	-	-	-	389
Share of equity  adjustments in  Associates	-	-	-	-	1,331	-	1,331
Transfer of equity reserve to retained earnings	-	-	-	2,406	(2,406)	-	-
Exchange difference on translation of subsidiaries	-	-	-	-	-	689	689
At 31 December 2008	795	40,680	1,843	(31,997)	-	(113)	11,208
Net loss for the period	-	-	-	(3,848)	-	-	(3,848)
Minority interest	-	-	-	-	-	-	-
Issue of share capital	64	1,005	-	-	-	-	1,069
Share issue costs	-	-	-	-	-	-	-
Recognition of share based payments	-	-	1,062	-	-	-	1,062
Share of equity  adjustments in  Associates	-	-	-	-	-	-	-
Exchange difference on translation of subsidiaries	-	-	-	-	-	105	105
As at 30 June 2009	859	41,685	2,905	(35,845)	-	(8)	9,596

EMED MINING PUBLIC LIMITED

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for six months to 30 June 2009

	Note	Six months ended  30 June 2009 (Unaudited) € 000's	Six months ended  30 June 2008 (Unaudited) € 000's	Year  ended  31 Dec 2008 € 000's
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) before tax		(4,275)	(6,830)	(17,058)
Adjustments for:
Depreciation of property, plant and equipment	8	37	30	85
Provision for impairment of goodwill		-	-	9,333
Share of loss from associates		285	222	2,004
Share based benefits		1,062	335	733
Reverse of provision for evaluation costs of   Rio Tinto Mine		-	-	(5,285)
Interest income		(10)	(31)	(93)
Exchange difference on translation of subsidiaries		553	(479)	(34)
		(2,348)	(6,753)	(10,315)
Changes in working capital:
(Increase)/decrease in inventories		-	49	106
(Increase)/decrease in receivables		(177)	179	589
Increase/(decrease)in trade creditors		(274)	(118)	(3,607)
Cash flows used in operations		(2,799)	(6,643)	(13,227)
Tax paid		-	-	-
Net cash (used in) operating activities		(2,799)	(6,643)	(13,227)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	8	(321)	(68)	(2,112)
Purchase of intangible assets		(684)	-	(162)
Acquisition of subsidiaries		-	-	689
Additional investment in associate	10	(434)	(249)	(251)
Proceeds from disposal of associate		226	-	-
Interest received		10	31	93
Net cash (used in) investing activities		(1,203)	(286)	(1,743)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital	13	-	12,650	13,112
Listing and issue costs	13	-	(530)	(530)
Deferred financing expenses		(434)	-	-
Repayment of borrowings		(96)	-	(630)
Proceeds from borrowings		4,260	-	-
Net cash from financing activities		3,730	12,120	11,952
Net increase in cash and cash equivalents		(272)	5,191	(3,018)
CASH AND CASH EQUIVALENTS:
At beginning of the period		1,420	4,110	4,438
At end of the period	12	1,148	9,301	1,420

 

 

 

 

 

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

 

1. General information

Country of incorporation 

EMED Mining Public Limited (the 'Company") was incorporated in Cyprus in 17 September 2004 as a private limited liability company in accordance with the provisions of the Cyprus Companies Law, Cap. 113 and was converted to a public limited liability company at 26 January 2005. Its registered office is at 1 Lambousa Street, Nicosia, Cyprus. The Company was listed on the AIM market of the London Stock Exchange ("AIM") 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 Western and Central Europe, Western Asia and the Middle East. 

 

2. Basis of preparation and accounting policies

Basis of preparation

The interim consolidated financial statements have been prepared in accordance with International Accounting Standards (IFRS) including International Accounting Standard 34 "Interim Financial Reporting" and using the historical cost convention. 

These interim consolidated financial statements ('the statements") are unaudited and include the financial statements of the Company and its subsidiary undertakings. They have been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of the Company and the Group for the year ended 31 December 2008. These statements do not include all of the disclosures required for annual financial statements, and accordingly, should be read in conjunction with the financial statements and other information set out in the Company's 31 December 2008 Annual Report.

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.

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.

 

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

 

2. Basis of preparation and accounting policies (continued)

Adoption of new and revised International Financial Reporting Standards (IFRSs) 

The Group has adopted all the new and revised IFRSs and International Accounting Standards (IAS), which are relevant to its operations and are effective for accounting periods commencing on 1 January 2008.

The adoption of these Standards did not have a material effect on the consolidated financial statements.

At the date of authorisation of these financial statements some Standards were in issue but not yet effective. The Board of Directors expects that the adoption of these Standards in future periods will not have a material effect on the consolidated financial statements of the Group.

Accounting policies

The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial 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.

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.

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 Income Statement 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 Income Statement immediately. 

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''). In 2008, the functional currency of the group changed from GBP to Euro. This has been accounted for on a prospective basis in accordance with IAS21. 

 

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

2. Basis of preparation and accounting policies (continued)

The change in the functional currency has been brought about by the increased significance to the group of the Spanish operations which, together with the operations in Slovakia, makes the functional currency of the group Euro. 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 income statement. 

(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.

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.

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 30 June 2009 and as at the date of approval of these financial statements have not yet met the criteria for capitalization of exploration costs.

Plant and equipment

Plant and equipment are stated at historical cost less depreciation. Depreciation is calculated on the straightߛline 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:

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 balance sheet date.

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

2. Basis of preparation and accounting policies (continued)

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 income statement of the period/year in which they were incurred. The cost of major renovations is 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 Company. Major renovations are depreciated over the remaining useful life of the related asset.

Gains and losses on disposal of plant and equipment are determined by comparing proceeds with carrying amount and are included in profit from operations. 

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).

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 of cash in hand and balance with banks. 

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 income statement over the period of the borrowings using the effective interest method.

Share capital

Ordinary shares are classified as equity.

Share 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 based payments was a net charge to income of €1,061,292 (2008: €732,687). At 30 June 2009, the equity reserve recognized for share based payments amounted to €2,904,535 (2008: €1,843,243).

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

3. Financial risk management 

Financial risk factors

The Group is exposed to interest rate risk, liquidity risk and currency risk arising from the financial instruments that it may hold. 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 is exposed to interest rate risk in relation to its bank deposits. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

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.

Currency risk 

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Australian Dollar and the Euro. The Group's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly. The Group's policy is not to enter into any currency hedging transactions.

Fair value estimation

The fair values of the Group's financial assets and liabilities approximate their carrying amounts at the balance sheet date. 

 

4. Tax

The Company is subject to corporation tax in Cyprus on its taxable profits at the rate of 10%. 

Companies which do not distribute 70% of their profits after tax, as defined by the relevant Cyprus tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for Cyprus defence at 15% will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year during the following two years. This special contribution for Cyprus defence is payable for the account of the shareholders.

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

5. Business and geographical segments

Business segments

The Group has only one distinct business segment, being that of mineral exploration.

Geographical segments

The Group's exploration activities are located in Cyprus, Georgia, Slovakia, Europe and Spain, and its administration and management is based in Cyprus.

Six months ended 30 June 2009

	Cyprus	Georgia	Slovakia	Europe	Spain	Consol.	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Operating loss	(1,894)	-	(471)	(13)	(1,742)	-	(4,120)
Foreign Transaction gains/(loss)	391	13	(3)	-	2		403
Financial income	10	-	-	-	-	-	10
Financial costs	(282)	-	(1)	-	-	-	(283)
Net loss for period	(1,775)	13	(475)	(13)	(1,740)	-	(3,990)
Share of results from associates							(285)
Loss before tax							(4275)
Tax							427
Net loss for the period							(3,848)
Total assets	34,465	1,312	127	14,210	12,866	(46,125)	16,855
Total liabilities	9,222	2,492	4,749	8,930	6,999	(24,614)	7,778
Depreciation of fixed assets	26		6	-	5	-	37

	Six months ended 30 June 2008
	Cyprus	Georgia	Slovakia	Europe	Spain	Consol.	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Operating loss	(1,471)	(125)	(986)	(14)	(4,453)	-	(7,049)
Financial income	91	-	505	11	37	-	644
Financial costs	(195)	(4)	(4)	-	-	-	(203)
Net loss for period	(1,575)	(129)	(485)	(3)	(4,416)	-	(6,608)
Share of results from associates							(222)
Net loss for the period							(6,830)
Total assets	15,838	938	211	48	211	(5732)	11514
Total liabilities	5,915	2,580	3,865	186	144	(8,977)	3,713
Depreciation of fixed assets	28	2	-	-	-	-	30

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

 

6. Loss per share

The calculation of the basic and diluted earnings per share attributable to the ordinary holders of the parent based on the following data:

		Six months ended  30 June 2009 (Unaudited) € 000's	Six months ended  30 June 2008 (Unaudited) € 000's	Year  ended  31 Dec 2008 € 000's
Net loss attributable to equity shareholders		(3,848)	(6,830)	(16,605)
Number of ordinary share for the purposes of basic earnings per share		253,609	183,182	196,788
Basic and fully diluted loss per share (pence)		(1.52)	(3.72)	(8.0)

The diluted loss per share has been kept the same as the basic loss per share as the conversion of the share option decreases the basic loss per share, thus being anti-dilutive.

 

7. Controlled entities

The Group has the following subsidiaries which have been consolidated in these financial statements.

Name of entity	Incorporation/  Date of acquisition	Country of incorporation	Effective proportion of shares held
Eastern Mediterranean Minerals (Cyprus) Ltd	28-Feb-05	Cyprus	95%
Tredington Ventures Ltd	28-Feb-05	Cyprus	95%
Winchcombe Ventures Ltd	28-Feb-05	Cyprus	95%
EMED Mining A.E (Greece)	21-Jun-05	Greece	100%
EMED Mining (Slovakia) S.R.O.	10-Jul-05	Slovakia	100%
EMED Mining (Caucasus) Ltd	11-Nov-05	Georgia	100%
Georgian Mineral Development Company Ltd	27-Dec-05	Georgia	100%
Eastern Mediterranean Resources Romania SRL	21-Mar-06	Romania	100%
EMED Mining Armenia LLC	26-May-06	Armenia	100%
Slovenske Kovy S.R.O.	30-Mar-07	Slovakia	100%
EMED Mining Spain S.L.	12-Apr-07	Spain	100%
Slovenske Nerasty Spol S.R.O	14-Apr-07	Slovakia	100%
EMED Tartessus S.L.	12-Apr-07/ 30-Sep-08	Spain	100%
EMED Marketing Ltd	08-Sep-08	Cyprus	100%
EMED Holding (UK) Ltd	10-Sep-08	United Kingdom	100%

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

 

8. Property, plant and equipment

	Land and buildings	Plant and machinery	Furniture, fittings & equipment	Motor vehicles	Total
	€ 000's	€ 000's	€ 000's	€ 000's	€ 000's
Cost
At 31 Dec. 2007/1 January 2008	-	210	59	111	380
Exchange difference	-	(16)	-	(4)	(20)
Acquisition through business combination	1,259	3,938	67	-	5,264
Addition		1,993	8	111	2,112
At 31 Dec. 2008/1 January 2009	1,259	6,125	134	218	7,736
Additions	-	321	-	-	321
30 June 2009	1,259	6,446	134	218	8,057
Depreciation
At 31 Dec. 2007/1 January 2008	-	12	46	45	103
Exchange difference	-	8	19	16	43
Charge for the year	-	28	18	39	85
At 31 Dec. 2008/1 January 2009	-	48	83	100	231
Charge for the period	-	18	9	10	37
30 June 2009	-	66	92	110	268
Net book value At 30 June 2009	1,259	6,380	42	108	7,789
At 31 Dec. 2008/1 January 2009	1,259	6,077	51	118	7,505

 

 

9. Intangible assets

	Permits of Rio Tinto Mine	Evaluation costs of Rio Tinto Mine (PRT)	Goodwill	Total
Cost	€'000	€'000	€'000	€'000
At 31 December 2007/1 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 2008/1 January 2009	2,009	-	10,223	12,232
Additions	684	-	-	684
At 30 June 2009	2,693	-	10,223	12,916
Provision for impairment
On 1 January 2008	-	5,285	890	6,175
Provision for the year	-	-	9,333	9,333
Reversal of provision	-	(5,285)	-	(5,285)
At 31 December 2008/1 January 2009	-	-	10,223	10,223
Provision for the period	-	-	-	-
At 30 June 2009	-	-	10,223	10,223
Closing net book amount
At 30 June 2009	2,693	-	-	2,693
At 31 December 2008/1 January 2009	2,009	-	-	2,009

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

9. Intangible assets (continued)

Proyecto Rio Tinto ("Rio Tinto Mine")

On 11 May 2007, EMED Mining announced an opportunity for the Company to acquire, in stages, 100% of the Rio Tinto Mine through the Company's Spanish associate EMED Tartessus S.L. The evaluation costs of the 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 the Rio Tinto Mine.

However on 30 September 2008, the Company moved to 100% ownership by acquiring the remaining 49% of the issued capital of EMED Tartessus S.L. which owns 100% of the Rio Tinto Mine. EMED Tartessus is now a wholly owned subsidiary. 

As part of the purchase consideration, 39,140,000 new ordinary shares of the Company were issued in 2008 to MRI Investment AG, a member of the MRI Group at an issue price of 21 pence each.

This resulted in goodwill amounting to €9,333,000 which the company fully provided for in the year ended 31 December 2008 since the mining licence had not yet been obtained.

Further deferred consideration totaling up to €53 million is to be paid by the EMED Group on the occurrence of the following events:-

€8,833,333 when both:-

the authorisation from the Junta de Andalucia to restart mining activities in the Rio Tinto Mine has been granted; and 

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 ("First Payment Date").

the balance being paid in equal annual or quarterly instalments starting 12 months from the First Payment Date. ("Payment Period")

In addition, the Company has agreed to potentially pay further deferred consideration of up to €15,900,000 in regular instalments 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 €9,116,617. These loans have been acquired at their face value, such consideration to be paid once the authorisation from the Junta de Andalucia 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 Andalucia 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;

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

9. Intangible assets (continued)

Completion of technical due diligence for:

planning the restart of the mine, processing plant and product marketing operations; 

planning for a fast-track approach to site rehabilitation where reasonable to be undertaken concurrently with ongoing long-term production; and

completion of all due diligence to EMED Mining's satisfaction including environmental considerations and infrastructure needs.

10. Investment in associates

	30 June 2009		31 December 2008
The Group	€'000		€'000
At 1 January	499		697
Additions at cost	434		251
Disposals	(170)		-
Share of results for the period/year	(285)		(449)
Closing amount based on equity accounting	478		499

Company name	Date of incorporation	Country of incorporation	Effective proportion of shares held
Kefi Minerals Public Plc	24 October 2006	United Kingdom	29%

Amounts relating to associate:	30 June 2009 €'000		31 December 2008 €'000
Total assets	1,002			450
Total liabilities	(1,036)			(666)
	(34)			(216)
Loss for the period/year	(953)			(1,423)

11. Trade and other receivables 

	30 June 2009 (Unaudited) € 000's		30 June 2008 (Unaudited) € 000's		31 Dec 2008 € 000's
Receivables from associates	65		124		139
Deposits and prepayments	1,381		466		1,317
Deferred Finance Expenses VAT receivable	299 757		- 383		- 869
	2,502		973		2,325

12. Cash and cash equivalents

Cash included in the cash flow statement comprise the following balance sheet amounts:

	30 June 2009 (Unaudited) € 000's	30 June 2008 (Unaudited) € 000's	31 Dec 2008 € 000's
Cash at bank and in hand	1,148	9,301	1,420

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

13. Share capital Authorised	Number of shares '000		Share Capital £'000		Share premium £'000		Total £'000
Ordinary shares of £0.0025 each	600,000		1,500		-		1,500
	000		€'000		€'000		€'000
Issued and fully paid
At 1 January 2008	149,625		507		18,054		18,561
Issued 7 May 2008 at £0.20	50,000		159		12,533		12,712
Issued 21 May 2008 at £0.2456	104		-		32		32
Issued 5 June 2008 at £0.2581	198		1		63		64
Issued 17 June 2008 at £0.12	66		-		10		10
Issued 1 July 2008 at £0.10 upon exercise of share options	500		2		61		63
Issued 18 September 2008 at £0.188692	927		3		218		221
Issued 30 September 2008 at £0.21	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
Issued 15 January 2009 at £0.0425	789		2		35		37
Issued 27 January 2009 at £0.0406	859		2		35		37
Issued 8 February 2009 at £0.0391	2,201		6		92		98
Issued 20 February 2009 at £0.0344	2,541		7		92		99
Issued 10 March 2009 at £0.0318	2,787		8		90		98
Issued 23 March 2009 at £0.0344	3,785		10		151		161
Issued 24 April 2009 at £0.0408	332		1		14		15
Issued 27 April 2009 at £0.0506	1,683		5		90		95
Issued 11 May 2009 at £0.048	2,073		6		105		111
Issued 25 May 2009 at £0.0516	1,874		5		104		109
Issued 7 June 2009 at £0.0413	3,725		10		162		172
Issued 25 June 2009 at £0.0413	739		2		34		36
At 30 June 2009	263,948		859		41,684		42,543

On 23 March 2009 shareholders approved an increase in the authorised share capital of the Company from £1,000,000 to £1,500,000 by the creation of 200,000,000 new ordinary shares of £0.0025 each in the capital of the Company ranking pari passu with the existing ordinary shares of £0.0025 each in the capital of the Company.

On 22 June 2007, the Company entered into a £10.0m Standby Equity Distribution Agreement ("SEDA") with Yorkville Advisors, LLC, as the Investment Advisor to YA Global Investments, L.P. ("YA"), which enables the Company, at its discretion, until 22 June 2010, to draw down funds under the SEDA in tranches of £250,000 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 £10,000,000 and EMED Mining is entitled to draw down the equity credit line in tranches of up to £250,000 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 are due and payable under the loan facility with YA as described in Note 14.

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

13. Share capital (continued)

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, YA 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.

YA 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. 

YA 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.

During 2007, £175,000 was raised under the SEDA from the issuance of 1,030,109 New Ordinary Shares at 16.99p per share and £250,000 from the issuance of 1,155,268 Shares at 21.64p per share.

 

14. Borrowings 

	30 June 2009 (Unaudited) € 000's	30 June 2008 (Unaudited) € 000's	31 Dec 2008 € 000's
Current borrowings
Convertible Note	-	-	-
Other loans	1,918	382	2,410
	1,918	382	2,410
Non-current borrowings
Convertible Note	4,339	-	-
Other loans	-	2,701	308
	4,339	2,701	308
Maturity of non-current borrowings
Between one to two years	-	2,287	308
Between two to five years	4,339	414	-
After five years	-	-	-
	4,339	2,701	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'). 

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

14. Borrowings (continued)

The Facility was arranged to provide funds for the Rio Tinto copper project in Spain and gold project in Slovakia; and (iii) 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 30 June 2009 is €4,338,676 (US$6,111,458) 

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$78,333 was paid by the issue of 741,030 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. Since then US$2.8 million has been repaid and the balance of the loan at 30 June 2009 was US$2.7 million. The repayments were made by issuing 23 million shares at an average price of 6.5 pence which is based upon a weighted market average at the time of each repayment. 

A condition of the loan was a requirement to obtain YA consent for any additional financing by the Company. YA consented to the Convertible Loan Facility subject to the amendment of its existing arrangements. Following the approval of shareholders on 23 March 2009, the amendments made granted YA:-

the right to convert any outstanding loan amounts into ordinary shares at 4.13 pence per ordinary share;

security equivalent to the Convertible Loan holders; and

certain cross-default provisions and 

changed the subscription price relating to its right to subscribe for one million ordinary shares from 50 pence per share to 5 pence per share.

Since 30 June 2009 the Company has repaid the YA loan in full, primarily from the proceeds of the August share placement (refer to Subsequent Event Note 19).

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

 

15. Trade and other payables 

	30 June 2009 (Unaudited) € 000's	30 June 2008 (Unaudited) € 000's	Year ended  31 Dec 2008 € 000's
Trade payables and accruals	1,461	630	1,735

16. Share option plan

Details of share options outstanding as at 30 June 2009:

Grant date	Expiry date	Exercise price	Number of  share options
		£	000's
9 May 2005	9 May 2011	0.080	10,839
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 23 July 2007	26 June 2013 23 July 2013	0.170 0.200	625 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	0.238	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	10,000
9 June 2009	8 June 2013	0.080	6,500
Total			57,416

		Number of  share options
		000's
Options:
- outstanding at 1 January 2009:		38,166
- granted during the reporting period		19,250
- cancelled during the reporting period		-
- exercised during the reporting period		-
		57,416

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

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.

2007

On 11 May 2007, 1 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 11 May 2007, 2.5 million options were issued to the Managing Director. These options vested when the company acquired 100% ownership of the Rio Tinto Mine. The options expire six years after the date of issue and can be exercised at any time during this period once they have vested. 

On 26 June 2007, 1.125 million options were issued that expire six years after the grant date, and are exercisable at any time within that period. 

On 23 July 2007, 1 million options were issued to the Finance Director. These options vested when the company acquired 100% ownership of the Rio Tinto Mine The options expire six years after the date of issue and can be exercised at any time during this period once they have vested. 

On 21 September 2007, 0.911 million options were to Fox Davies Capital which expire five years after the grant date, and are exercisable at any time within that period. 

On 18 December 2007, 1 million options were issued to YA Global Investments LP which expire four years after the grant date, and are exercisable at any time within that period. 

2008

On 15 January 2008, 1 million options were issued to the Chief Operating Officer. These options expire six years after grant date and have a vesting of one third at the end of six months from grant date, one third at the end of 12 months from grant date and the balance at the end of the second year.

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.

2009 

On 23 March 2009 MRI were 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 28p.

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.

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

16. Share option plan (continued)

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	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
07 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 Sep 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%	6	5.85%	Nil	30%	4.19p
25 Jan 2007	11.10p	12.00p	57.88%	6	5.97%	Nil	30%	4.56p
08 Sep 2006	9.00p	11.00p	46%	6	4.90%	Nil	20%	5.51p
08 Sep 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
09 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.

17. Acquisition of subsidiaries

There have been no acquisitions in the six months to 30 June 2009. However on 30 September 2008, the Company moved to 100% ownership of its Spanish associate, EMED Tartessus S.L. by acquiring the remaining 49 per cent it did not already own. EMED Tartessus S.L. owns 100% of the Rio Tinto Mine.

18. Contingent liabilities 

As part of the acquisition cost of a 95% share in Eastern Mediterranean Minerals (Cyprus) Limited, an additional contingent consideration of £600,000 is payable by the Company one month after the date on which Eastern Mediterranean Minerals (Cyprus) Limited first receives revenue of £1,000,000 from or in respect of specific exploration tenements.

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2009

19. Subsequent events

On 12 August 2009 shareholders approved the placement of 38,170,001 new ordinary shares of 0.25 pence each par value at an issue price of 7.5 pence each with existing and new shareholders (the "Placing"). Fox-Davies Capital Limited acted as broker to the Placing which raised £2.9 million gross (approximately £2.7 million net after expenses).

The proceeds of the Placing were used for the early repayment of the convertible loan with YA of approximately £1.4 million and the balance will be used to for permitting activities at the Rio Tinto Mine, drilling in Slovakia and general working capital requirements.

  

 

REVIEW REPORT TO THE MEMBERS OF 

EMED MINING PUBLIC LIMITED

Report on Review of Interim Financial Information

Introduction

We have reviewed the accompanying balance sheet of EMED MINING PUBLIC LIMITED at 30 June 2009 and the related statements of income and cash flows for the period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation of this interim financial information in accordance with International Financial Reporting Standards. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not give a true and fair view of the financial position of the entity as at 30 June 2009, and of its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards.

 

Nicosia, Cyprus 23 September 2009 MOORE STEPHENS STYLIANOU & CO

CERTIFIED PUBLIC ACCOUNTANTS - CY

ENDIR SEMFWDSUSEFU

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