Interim Results

RNS Number : 9263S

EMED Mining Public Limited

20 September 2010

 

20 September 2010 AIM: EMED 

EMED MINING INTERIM RESULTS

FOR HALF-YEAR ENDED 30 JUNE 2010

 

EMED Mining Public Limited ("EMED Mining" or "the Company"), the AIM-quoted mining, exploration and development company, announces its unaudited interim results for the half-year ended 30 June 2010.

Highlights

Rio Tinto Mine ("Proyecto Rio Tinto" or "PRT") - Copper in Spain 

·; All reports to support regulatory permission to commence production at the Rio Tinto Mine in 2011 have been submitted to the relevant authorities.

·; Several important commercial matters have been clarified, including:

o settlement with the Department of Social Security in relation to a debt owed by a previous owner of PRT (and secured against PRT's principal landholdings); and

o finalisation of independent assessment of the bonding required for regulatory compliance.

·; Various requirements relating to the tailings dams have been stipulated by the Department of Industry, specifically, the insurance requirements have now been set and the joint responsibilities of all relevant landholders have now been confirmed. Independent valuations of relevant landholdings underlying the tailings dam held by third parties have also been completed, should they be required.

·; The copper price outlook remains positive, with spot and average 10-year forward prices continuing to exceed US$3.00/lb or US$6,600/tonne(€2.10/lb or €4,620/tonne). At this copper price, projected net operating cash flow is estimated to average US$117 (€93) million per year under the current "base case" development plan.

·; Updated financial models, which show that, after taking into account the independently assessed amounts required for bonding, the initial capital required for PRT's start-up remains in the order of US$100 million, as previously reported.

Detva Gold Project - Gold in Slovakia

·; Updated Scoping Study confirms the attractive economics of developing a mine at Biely Vrch, with targeted gold production of 60,000 ounces per annum at ±US$530/ounce.

·; Slovakian regulators approved the Biely Vrch Mineral Resource estimate totalling 1.1 million ounces of contained gold, the first statutory step of the permitting process.

Corporate

·; Group loss before tax of €5.3 million for the six-month period, reflecting the write-off of care and maintenance costs at PRT and all exploration costs.

·; At 30 June 2010 cash and equivalents totalled €7.0 million.

·; The Company is preparing to dual-list on the Toronto Stock Exchange.

·; Detailed discussions in progress with potential PRT product customers/financiers.

·; EMED Mining welcomed Roger Davey as a Non-Executive Director and accepted the resignation of Gordon Toll as Non-Executive Director. Mr Davey is a highly experienced mining engineer and senior industry executive and has replaced Mr Toll as Chairman of the Physical Risks Commiteee. Mr Toll was the founding Chairman of the Company, for the past three years has served as a Non-Executive Director and has had to reduce his duties due to other activities. He remains a significant shareholder, friend and supporter of the Company.

 

Speaking from Toronto, Canada Harry Anagnostaras Adams, Managing Director of EMED Mining, commented:

"In Spain, the submission of detailed and independent reports marks another significant milestone in the permitting process for the Rio Tinto Mine. This has improved the project, deepened our local relationships, facilitated community consultation and complies with our timetable.

"In Slovakia, the revised Scoping Study for Biely Vrch has improved our development plan, facilitated the first phase of the permitting process, provided a platform for public dialogue and allowed the commencement of the Preliminary Environmental Impact Assessment."

 

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 expenditure until projects are fully permitted and production triggered.

"Based on our detailed planning and assuming the timely processing of regulatory applications and associated negotiations, the Rio Tinto Mine is on track to restart in late 2011. Thereafter, it will provide a substantial contribution to the regional economy and commensurate profits to the EMED Mining Group for many years to come.

"Importantly, the funding required to restart mining at Rio Tinto is relatively modest for a project of this type. The operating cash flows are predicted to support project finance facilities for the majority of the funding needed to restart production."

 

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

 

 

Enquiries

EMED Mining	Harry Anagnostaras-Adams	+357 9945 7843
RFC Corporate Finance	Stuart Laing	+61 8 9480 2500
Fox-Davies Capital	Daniel Fox-Davies	+44 20 7936 5220
Canaccord Genuity	Craig Warren	+1 416.869.7316
Bishopsgate Communications	Michael Kinirons	+44 207 562 3350

 

 

MANAGING DIRECTOR'S REPORT

Activities in Spain

EMED Mining, via its wholly owned subsidiary EMED Tartessus SL ("EMED Tartessus"), owns 100% of Proyecto Rio Tinto.

 

The established open-pit mine, copper-concentrator plant and other infrastructure at the Rio Tinto Mine provide an excellent opportunity to bring a large copper mine into production at a relatively low total cost and at a time of global copper shortage and high local unemployment.

 

In June 2009, an agreement was reached with Tesorería General de la Seguridad Social of Spain ("Department of Social Security") for extinguishing its liens against landholdings which underlie the entire mine, minerals title area and plant site of PRT. EMED Tartessus has always been aware of the liens and factored in full repayment of this debt as part of the cost of the restart of PRT. Under the terms of the settlement, the debt will be repaid in full over a five-year period: €1.3 million (paid in June 2010), followed by annual payments of €1.1 million, €2.9 million, €3.6 million, €4.2 million and €5.9 million.

 

The successful resolution of this obligation to the Department of Social Security is another important milestone in the re-opening of the Rio Tinto Mine and provides assurance that no other party can be approved by the Junta de Andalucía.

 

All required reports have been submitted to the Junta de Andalucía, after detailed due diligence and independent consultation and assessment.

 

Support for restarting the mine is now well established within all surrounding communities.

 

The restart is expected to be relatively straightforward from an operational perspective, with an established infrastructure and processing facility that can be readily restarted, albeit with aspects to be updated to incorporate industry improvements that have been developed over the past 20 years.

 

The Company's timetable remains that production be commissioning in 2011, the exact timing dependant on the pace of permitting and any conditions attached.

 

The estimated funding required to start copper production at the Rio Tinto Mine aggregates to approximately US$100 (€80) million. Therefore finance facilities of US$120 million are planned, to fulfill those requirements and provide ongoing group working capital and standby capacity. Planned sources are, for the most part, loan facilities from product customers and from banks specialising in mining finance.

 

Activities in Slovakia

EMED Mining is progressing towards the appropriate development of its 100%-owned 1.1 million ounce gold deposit (41.7 million tonnes at 0.79g/t gold) at Biely Vrch within the Detva Gold Project.

 

On 21 June 2010, the State Commission for Classification of Mineral Resources approved the initial Biely Vrch Mineral Resource, having received the requisite submissions by Eastern Mediterranean Resources Slovakia s.r.o., a wholly-owned subsidiary of EMED Mining.

 

In parallel with progressing the required permitting studies and approvals, EMED Mining is working towards reaching various agreements with local parties directly impacted by our proposed development.

 

In June 2010, AMC Consultants (UK) Ltd completed an updated Scoping Study which takes into account community consultation and project refinements by EMED Mining. The revised Scoping Study has confirmed the attractive economics of developing a mine at Biely Vrch, based on gold prices of >US$1,000/ounce (currently ~US$1,200/ounce).

 

The initial capital cost is estimated to be approximately US$64 million for a 3 million tonne per annum, heap-leach operation producing approximately 60,000 ounces of gold per annum at ±US$530/ounce.

 

The Company and its environmental consultants are now proceeding with the preparation of the Preliminary Environmental Impact Assessment.

 

On 1 July 2010, the European Commission announced the rejection of a proposed ban on the use of cyanide in mining activities in Europe. This decision reduces the permitting risks across the Company's projects in Europe.

 

Following completion of a geotechnical drilling program at Biely Vrch, exploration drilling commenced at the Company's 100%-owned Banska Stiavnica and Hodrusa exploration licences in central Slovakia. The Banska Stiavnica-Hodrusa exploration licences are located 38km west of the Detva Gold Project and cover an area of 188km2. This region is a prolific mining district that has historically yielded over 120 million ounces of silver and 3 million ounces of gold.

 

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 the 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 held under care and maintenance due to current priorities elsewhere. Discussions continue to be held with stakeholders over the entire island with a view to optimising the future exploration and development potential for the benefit of all stakeholders. The Company works carefully to ensure its work assists re-unification efforts.

 

KEFI Minerals' Activities

KEFI Minerals is the operator of an exploration joint-venture in Turkey with Centerra Gold Inc of Canada and in Saudi Arabia with local construction and investment group ARTAR. KEFI Minerals is 24%-owned by EMED Mining.

 

Financial Results

All expenditure incurred by the Company is expensed until projects reach the development stage 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 before tax of €5.3 million for the period, which is primarily comprised of:

·; exploration expenditure of €0.7 million;

·; care and maintenance expenditure incurred in relation to the Rio Tinto Mine of €2.1 million;

·; net operating and other expenditure of €2.0 million; and

·; finance costs of €0.5 million.

 

Financial Position

At 30 June 2010, EMED Mining had €7.0 million in cash, net current assets (including cash) of €6.0 million, and listed shares with a market value of €0.6 million.

 

Dual Listing on Toronto Stock Exchange ("TSX")

EMED Mining is currently listed on AIM, the London Stock Exchange market for international growth companies.

 

EMED Mining has decided to dual list on the Toronto Stock Exchange and has appointed Canaccord Genuity as lead broker in Canada. The listing is planned to take place during Q4-2010.

 

Fully-diluted Share Capital

Following completion of a £8.8 million equity placing in April 2010, the Company's fully diluted share capital totals 654.0 million shares, comprised as follows:

·; 425.9 million ordinary shares on issue;

·; 153.0 million ordinary shares upon conversion of the full Convertible Loan (RCF and RMB); and

·; 75.1 million ordinary shares upon exercise of all existing incentive options and warrants.

 

EMED MINING PUBLIC LIMITED

CONDENSED CONSOLIDATED STATEMENT

OF COMPREHENSIVE INCOME

for the six months ended 30 June 2010

 

 

 

	Note	Six months ended 30 June 2010 (Unaudited) € 000's			Six months ended 30 June 2009 (Unaudited) € 000's	Year ended 31 Dec 2009 (Audited) € 000'
Revenue (Expenditure)
Exploration		(742)			(588)	(2,161)
Care and maintenance		(2,139)			(1,742)	(2,881)
Gross loss		(2,881)			(2,330)	(5,042)
Share of results of associates		(135)			(285)	(288)
Administration expenses		(781)			(728)	(2,003)
Share based payments		(1,060)			(1,062)	(1,628)
Operating loss		(4,857)			(4,405)	(8,961)
Net foreign exchange gain/(loss)		(9)			403	(528)
Finance income		2			10	16
Finance costs		(483)			(283)	(963)
Loss before tax		(5,347)			(4,275)	(10,436)
Tax	4	586			427	875
LOSS FOR THE PERIOD/YEAR		(4,761)			(3,848)	(9,561)
Other comprehensive income:
Exchange differences on translating foreign operations		(211)			105	(101)
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD/YEAR		(4,972)			(3,743)	(9,662)
Attributable to:
Equity holders of the parent		(4,760)			(3,848)	(9,557)
Minority interest		(1)			-	(4)
Net loss for the period		(4,761)			(3,848)	(9,561)
Earnings per share information
Basic and fully diluted loss per share (pence) 6			(1.29)	(1.52)			(3.41)

 

 

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

 

 

 

EMED MINING PUBLIC LIMITED

CONDENSED CONSOLIDATED STATEMENT

OF FINANCIAL POSITION

As at 30 June 2010

 

	Note	30 June 2010 (Unaudited) € 000's	30 June 2009 (Unaudited) € 000's	31 Dec 2009 (Audited) € 000's
Assets
Non-current assets
Property, plant and equipment	8	25,661	7,789	8,263
Intangible assets	9	4,421	2,693	3,239
Deferred tax		3,271	2,238	2,685
Deferred financing expenses		142	434	284
Investment in associates	10	312	478	447
Total non-current assets		33,807	13,632	14,918
Current assets
Trade and other receivables	11	590	2,203	472
Deferred financing expenses		284	299	284
Cash and cash equivalents	12	6,952	1,148	3,561
Total current assets		7,826	3,650	4,317
Total assets		41,633	17,282	19,235
Equity and liabilities
Capital and reserves
Share capital	13	1,324	859	1,078
Share premium	13	57,949	41,685	48,531
Share options reserve		4,531	2,905	3,471
Other reserves		(46,638)	(35,853)	(41,667)
Total equity attributable to equity holders of the parent		17,166	9,596	11,413
Minority interest		(97)	(92)	(96)
Total capital and reserves		17,069	9,504	11,317
Non-current liabilities
Trade and other payables	15	15,195	-	-
Borrowings	14	7,557	4,339	6,876
Total non-current liabilities		22,752	4,339	6,876
Current liabilities
Trade and other payables	15	1,812	1,461	1,042
Borrowings	14	-	1,918	-
Tax payable		-	60	-
Total current liabilities		1,812	3,439	1,042
Total equity and liabilities		41,633	17,282	19,235

 

 

 

 

EMED MINING PUBLIC LIMITED

CONDENSED CONSOLIDATED

STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2010

 

 

	Share capital	Share premium	Share option reserve	Accumulated losses	Exchange Difference Reserve	Total	Non-controlling interest	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance as at 1 January 2009	795	40,680	1,843	(31,997)	(113)	11,208	(92)	11,116
Total comprehensive income for the period	-	-	-	(3,848)	105	(3,743)	-	(3,743)
Issue of share capital	64	1,005	-	-	-	1,069	-	1,069
Share issue costs	-	-	-	-	-	-	-	-
Recognition of share based payments	-	-	1,062	-	-	1,062	-	1,062
Balance as at 30 June 2009	859	41,685	2,905	(35,845)	(8)	9,596	(92)	9,504
Total comprehensive income for the period	-	-	-	(5,713)	(101)	(5,814)	(4)	(5,818)
Issue of share capital	219	7,194	-	-	-	7,413	-	7,413
Share issue costs	-	(348)	-	-	-	(348)	-	(348)
Recognition of share based payments	-	-	566	-	-	566	-	566
Balance as at 31 December 2009	1,078	48,531	3,471	(41,558)	(109)	11,413	(96)	11,317
Total comprehensive income for the period	-	-	-	(4,760)	(211)	(4,971)	(1)	(4,972)
Issue of share capital	246	10,107	-	-	-	10,353	-	10,353
Share issue costs	-	(689)	-	-	-	(689)	-	(689)
Recognition of share based payments	-	-	1,060	-	-	1,060	-	1,060
Balance as at 30 June 2010	1,324	57,949	4,531	(46,318)	(320)	17,166	(97)	17,069

 

 

  

 

EMED MINING PUBLIC LIMITEd

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2010

 

 

 

	Note	Six months ended 30 June 2010 (Unaudited) € 000's	Six months ended 30 June 2009 (Unaudited) € 000's	Year ended 31 Dec 2009 (Audited) € 000's
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) before tax		(5,347)	(4,275)	(10,436)
Adjustments for:
Depreciation of property, plant and equipment	8	34	37	77
Share based payments		1,060	1,062	1,628
Purchase of service with settlement in shares		-	-	1,601
Payment of interest with settlement in shares		257	-	-
Share of loss from associates		135	285	288
Loss on sale of associate		-	-	89
Interest Income		(2)	(10)	(16)
Unrealised exchange difference on borrowings		681	-	-
Impairment of other receivables		-	-	983
Exchange Difference on translation of subsidiaries		(206)	553	(2)
Operating Loss before working capital changes		(3,388)	(2,348)	(5,788)
Changes in working capital:
(Increase)/decrease in receivables		(118)	(177)	1,853
Increase/(decrease)in trade creditors		302	(274)	(693)
Cash flows used in operations		(3,204)	(2,799)	(4,628)
Tax paid		-	-	-
Net cash (used in) operating activities		(3,204)	(2,799)	(4,628)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	8	(1,769)	(321)	(836)
Proceeds from disposal of property, plant and equipment		-	-	1
Purchase of intangible assets		(1,182)	(684)	(1,230)
Acquisition of associate	10	-	(434)	(551)
Proceeds from disposal of associate		-	226	227
Interest received		2	10	16
Net cash (used in) investing activities		(2,949)	(1,203)	(2,373)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital	13	10,091	-	6,931
Listing and issue costs	13	(689)	-	(348)
Deferred financing expenses		142	(434)	(568)
Repayment of borrowings		-	(96)	(3,223)
Proceeds from borrowings		-	4,260	6,350
Net cash from financing activities		9,544	3,730	9,142
Net increase in cash and cash equivalents		3,391	(272)	2,141
CASH AND CASH EQUIVALENTS:
At beginning of the period		3,561	1,420	1,420
At end of the period	12	6,952	1,148	3,561

 

 

 

EMED MINING PUBLIC LIMITED

Notes to the condensed interim

consolidated financial statements

for the six months ended 30 June 2010

 

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 Alternative Investment Market ("AIM") of the London Stock Exchange in May 2005.

Principal activities

The principal activity of the Company and its subsidiaries (the "Group") is to explore for and develop natural resources, with a focus on base and precious metals in 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 2009. 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 2009 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.

 

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 2010.

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.

Investments in subsidiary companies

Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified.

Investments in associate companies

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights.

Investments in associates are initially recognized at cost and are accounted for by the equity method of accounting.

Revenue recognition

Revenues earned by the Group are recognised on the following bases:

Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

Finance costs

Interest expense and other borrowing costs are charged to the statement of comprehensive income as incurred.

Foreign currency translation

(i) Functional and presentation currency

Items included in the Group's financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Euros, which is the Group's functional and presentation currency.

 

(ii) Foreign currency translation

Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the 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.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.

Acquisitions of assets

All assets acquired, including property, plant and equipment other than goodwill and intangibles, are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.

When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair value, except where the notional price at which they could be placed in the market is a better indication of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity subject to the extent of proceeds received, otherwise expensed.

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 2010 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 straight‑line method to write off the cost of each asset to their residual values over their estimated useful life. The annual depreciation rates used are as follows:

Motor vehicles	20%
Plant and machinery	10%-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.

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.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate 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 2010, the impact of share based payments was a net charge to income of €1,060,361 (2009: €1,061,292). At 30 June 2010, the equity reserve recognized for share based payments amounted to €4,531,076 (2009: €2,904,535).

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.

Derecognition of financial assets and liabilities

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

·; the rights to receive cash flows from the asset have expired;

·; the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or

·; the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

 

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.

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.

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 2010

 

	Cyprus	Georgia		Slovakia		Europe	Spain	Consol.	Total
	€'000	€'000		€'000		€'000	€'000	€'000	€'000
Operating loss	(2,196)	(1)		(338)		(15)	(2,172)	-	(4,722)
Foreign exchange gains/(loss)	(207)	198		-		-	-	-	(9)
Financial income	-	-		2		-	-	-	2
Financial costs	(430)	-		(1)		-	(52)	-	(483)
Net loss for period	(2,833)	197		(337)		(15)	(2,224)	-	(5,212)
Share of results from associates									(135)
Loss before tax									(5,347)
Tax									586
Net loss for the period									(4,761)
Total assets	50,480	1,503		143		40,493	35,059	(86,045)	41,633
Total liabilities	10,161	2,686		5,854		35,218	28,128	(57,483)	24,564
Depreciation of fixed assets	23	-		7		-	4	-	34
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 exchange 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									(4,275)
Tax									427
Net Loss for the period									(3,848)
Total Assets	34,365	1,312	127		14,210		12,866	(45,598)	17,282
Total Liabilities	9,222	2,492	4,749		8,930		6,999	(24,614)	7,778
Depreciation of Fixed Assets	26	-	6		-		5	-	37

 

 

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 2010 (Unaudited) € 000's		Six months ended 30 June 2009 (Unaudited) € 000's		Year ended 31 Dec 2009 (Audited) € 000's
	Net loss attributable to equity shareholders				(4,760)		(3,848)		(9,557)
	Number of ordinary share for the purposes of basic earnings per share				369,392		253,609		280,615
	Basic and fully diluted loss per share (pence)				(1.29)		(1.52)		(3.41)

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%

 

 

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
Balance at 1 January 2009	1,259	6,088	172	112	7,631
Addition	-	825	-	11	836
Disposals	-	-	(9)	-	(9)
Balance at 1 January 2010	1,259	6,913	163	123	8,458
Additions	16,914	516	-	2	17,432
Balance at 30 June 2010	18,173	7,429	163	125	25,890
Depreciation
Balance at 1 January 2009	-	38	48	40	126
Charge for the year	-	31	32	14	77
Disposals	-	-	(8)	-	(8)
Balance at 1 January 2010	-	69	72	54	195
Charge for the period	-	16	14	4	34
Balance at 30 June 2010	-	85	86	58	229
Net book value 30 June 2010	18,173	7,344	77	67	25,661
31 December 2009	1,259	6,844	91	69	8,263

 

9 Intangible assets

 

	Permits of Rio Tinto Mine	Evaluation costs of Rio Tinto Mine (PRT)	Goodwill	Total
	€'000	€'000	€'000	€'000
Cost
Balance at 1 January 2009	2,009	-	10,023	12,032
Additions	1,230	-	-	1,230
Balance at /1 January 2010	3,239	-	10,023	13,262
Additions	1,182	-	-	1,182
Balance at 30 June 2010	4,421	-	10,023	14,444
Provision for impairment
Balance at 1 January 2009	-	-	10,023	10,023
Provision for the period	-	-	-	-
Balance at 1 January 2010	-	-	10,023	10,023
Provision for the period	-	-	-	-
Balance at 30 June 2010	-	-	10,023	10,023
Closing net book amount
30 June 2010	4,421	-	-	4,421
31 December 2009	3,239	-	-	3,239

 

 

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:-

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

(ii) 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;

·; Completion of technical due diligence for:

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

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

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

EMED Tartessus S.L. has settled the terms with Tesorería General de la Seguridad Social of Spain (Department of Social Securit) for extinguishing its liens against its principal landholdings which underlie the entire mine, minerals title area and plant site of Proyecto Rio. The liens had been granted as a form of security interest set against the landholdings to secure the payment of the debt owed to the Department of Social Security by previous owner - the now insolvent Minas de Rio Tinto ("MRT"). Under the terms of the settlement, the Department of Social Security will not enforce the liens it holds against the relevant assets owned by EMED Tartessus and the debt will be repaid in full over a five year period: €1.3 million initially, followed by annual payments of €1.1 million, €2.9 million, €3.6 million, €4.2 million and €5.9 million, including interest.

EMED Tartessus has always been aware of the liens and factored in full repayment of the past debt as part of the cost of the restart of the Rio Tinto Mine.

EMED Tartessus SL has submitted its proposals for the restart of production to the Government. A shareholder meeting will be called at the appropriate time to seek approval to proceed if all conditions precedent have been met to the satisfaction of the Government and the Company.

10 Investment in associates

	30 June 2010 €'000		31 Dec 2009 €'000
The Group
Opening balance	447		499
Additions at cost	-		551
Disposals	-		(315)
Share of results for the period/year	(135)		(288)
Closing amount based on equity accounting	312		447

 

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

 

Amounts relating to associate:	3 30 June 2010 €'000		31 Dec 2009 €'000
Total assets	1,013			497
Total liabilities	(503)			(308)
	510			(189)
Loss for the period/year	(561)			(1,017)

 

11 Trade and other receivables

	30 June 2010 (Unaudited) € 000's		30 June 2009 (Unaudited) € 000's		31 Dec 2009 (Audited) € 000's
Receivables from associates	42		65		19
Deposits and prepayments	50		1,381		136
VAT receivable	498		757		317
	590		2,203		472

 

12 Cash and cash equivalent

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

	30 June 2010 (Unaudited) € 000's	30 June 2009 (Unaudited) € 000's	31 Dec 2009 (Audited) € 000's
Cash at bank and in hand	6,952	1,148	3,561

 

13 Share capital   Authorised	Number of shares '000		Share Capital £'000		Share premium £'000		Total £'000
Ordinary shares of £0.0025 each	700,000		1,750		-		1,750
Issued and fully paid
At 1 January 2009	240,560		795		40,680		41,475
Issued 15 January 2009 at £0.043	789		2		35		37
Issued 27 January 2009 at £0.041	859		2		35		37
Issued 8 February 2009 at £0.039	2,201		6		92		98
Issued 20 February 2009 at £0.034	2,541		7		92		99
Issued 10 March 2009 at £0.032	2,787		8		91		99
Issued 23 March 2009 at £0.034	3,785		10		151		161
Issued 24 April 2009 at £0.041	332		1		14		15
Issued 27 April 2009 at £0.051	1,683		5		90		95
Issued 11 May 2009 at £0.048	2,073		6		105		111
Issued 25 May 2009 at £0.052	1,874		5		104		109
Issued 7 June 2009 at £0.041	3,725		11		162		173
Issued 25 June 2009 at £0.041	739		2		34		36
Issued 8 July 2009 at £0.041	2,224		7		100		107
Issued 21 July 2009 at £0.075	1,054		4		88		92
Issued 21 July 2009 at £0.041	2,209		6		99		105
Issued 4 August 2009 at £0.041	1,178		3		54		57
Issued 13 August 2009 at £0.075	38,170		111		3,227		3,338
Issued 28 November 2009 at £0.133	823		2		3,274		120
Issued 24 December 2009 at £0.110	27,727		76		118		3,350
Issued 24 December 2009 at £0.080	1,000		3		85		88
Issued 24 December 2009 at £0.070	2,000		6		149		155
Share Issue Costs	-		-		(348)		(348)
At 31 December 2009/1 January 2010	340,333		1,078		48,531		49,609
Issued 24 February 2010 at £0.1116	1,015		3		126		129
Issued 24 February 2010 at £0.12	34		-		5		5
Issued 3 May 2010 at £0.105	83,571		240		9,851		10,091
Issued 4 May 2010 at £0.1137	980		3		125		128
Share Issue Costs	-		-		(689)		(689)
At 30 June 2010	425,933		1,324		57,949		59,273

 

 

On 23 March 2009 shareholders approved an increase in the authorised share capital of the Company from £1,000,000 to £1,750,000 by the creation of 300,000,000 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.

Warrants

The Company has issued warrants to advisers to the Group. Warrants, noted below expire five years after grant date and are exercisable at the exercise price.

2009

On 13 August 2009, 1.83 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 24 December 2009, 1.243million options were issued to Fox Davies Capital which expire five years after the grant date, and are exercisable at any time within that period.

2010

On 4 May 2010, 4.55 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.

Details of share warrants outstanding as at 30 June 2010:

 

Grant date	Expiry date	Exercise price		Number of  share options
		£		000's
13 August 2009	12 August 2014	0.075	1,237
24 December 2009	23 December 2014	0.110	1,833
04 May 2010	03 May 2015	0.105	4,554 7,624
Warrants:- - outstanding at 1 January 2010:				3,070
- granted during the reporting period:				4,554
				7,624

 

14 Borrowings

			30 June 2010 (Unaudited) € 000's		30 June 2009 (Unaudited) € 000's		31 Dec 2009 (Audited) € 000's
	Current borrowings
Other loans		-		1,918		-
Non-current borrowings
Convertible Note		7,557		4,339		6,876
Maturity of non-current borrowings
Between one to two years		7,557		-		-
Between two to five years		-		4,339		6,876
After five years		-		-		-
		7,557		4,339		6,876

 

Convertible Note Facility

On 4 March 2009 the Company entered into a Convertible Loan Agreement with RCF and RMB to provide a borrowing facility of up to US$8.5 million (the 'Facility').

The Facility was arranged to provide funds for the Rio Tinto copper project in Spain and gold project in Slovakia and for general working capital purposes.

Loans made under the Facility are repayable on or prior to 31 December 2011. Amounts drawn down under the Facility may be converted at the discretion of each Lender into Ordinary Shares at the Conversion Price of 4.13 pence per ordinary share.

Interest is payable at a rate of 7.5% on funds drawn down with an annual commitment fee of 3.0 % on any undrawn amounts. The establishment fee was US$212,500 paid by the issue of 3,785,274 new Ordinary Shares.

The balance of the Convertible Note as at 30 June 2010 is €7,556,991 (US$8,661,146)

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 €128,135 was paid by the issue of 979,964 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 Global Investments L.P. ("YA")

On 18 December, 2007 the Company entered into an agreement with YA to provide a loan of US$5 million.

During 2009 the Company has repaid the YA loan in full, primarily from the proceeds of the August share placement.

15 Trade and other payables

	30 June 2009 (Unaudited) € 000's	30 June 2008 (Unaudited) € 000's	31 Dec 2008 Audited € 000's
Current trade and other payables
Trade payables and accruals	1,344	1,461	1,042
Fixed assets payables	468	-	-
	1,812	1,461	1,042
Non-current trade and other payables
Fixed assets payables	15,195	-	-

On 25 May 2010 EMED Tartessus S.L recognised a debt with the Social Security's General Treasury in Spain amounted to €16,914,617 incurred by a previous owner to stop the execution process by Public Auction of the Land initiated by that entity. (Refer to Note 9).

 

16 Share option plan

Details of share options outstanding as at 30 June 2010:

 

Grant date	Expiry date	Exercise price	Number of  share options
		£	000's
9 May 2005	9 May 2011	0.080	8,589
11 August 2005	11 August 2011	0.100	200
28 April 2006	28 April 2012	0.135	3,530
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	3,750
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	4,640
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	0.245	1,000
23 March 2009	22 March 2011	0.280	1,000
23 March 2009	22 March 2013	0.041	9,500
9 June 2009	8 June 2013	0.080	6,250
25 January 2010	24 January 2014	0.134	11,725
22 April 2010	21 April 2014	0.075	500
1 May 2010	30 April 2014	0.110	2,000
Total			67,482

 

 

		Number of  share options
		000's
Options:
- outstanding at 1 January 2010:		54,416
- granted during the reporting period		14,225
- cancelled during the reporting period		(1,125)
- exercised during the reporting period		(34)
		67,482

 

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

2010

On 25 January 2010, certain Directors, management and employees were granted options to subscribe at any time until 24 January 2014 for an aggregate total of 11,725,000 Ordinary Shares at an exercise price per Ordinary Share of 13.4 pence.

On 22 April 2010, a Director was granted options to subscribe at any time until 21 April 2014 for an aggregate total of 500,000 Ordinary Shares at an exercise price per Ordinary Share of 13.4 pence.

On 1 May 2010, an employee was granted options to subscribe at any time until 30 April 2014 for an aggregate total of 2,000,000 Ordinary Shares at an exercise price per Ordinary Share of 11 pence.

 

 

2009

On 23 March 2009 MRI was granted (i) an option to subscribe at any time until 23 March 2011 for up to 1,000,000 Ordinary Shares at a subscription price per Ordinary Share of 24.5p; and (ii) an option to subscribe at any time until 23 March 2011 for up to 1,000,000 Ordinary Shares at a subscription price per Ordinary Share of 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 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 management and employees have been or are to be granted options to subscribe at any time until 8 June 2013 for an aggregate total of 6,500,000 Ordinary Shares at an exercise price per Ordinary Share of 8 pence.

 

2008

On 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.

 

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.

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:

 

Grant date	Share price at grant date	Exercise price	Expected volatility	Expected life of options (years)	Risk free interest rate	Expected dividend yield	Discount factor	Estimated fair value at grant date
01 May 2010	11.12p	11.00p	81.00%	4	2.25%	Nil	50%	3.28p
22 Apr 2010	13.40p	7.50p	81.00%	4	2.25%	Nil	50%	3.48p
25 Jan 2010	13.40p	13.40p	88.00%	4	2.25%	Nil	50%	4.27p
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	0%	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	0%	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 ended 30 June 2010.

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.

19 Events after the reporting period

EMED Mining initiated arbitration proceedings against Red Creek International ('Red Creek') in light of breaches committed by Red Creek of the terms of the Settlement Agreement signed between Red Creek and EMED Mining on 12 May 2008. The formal pleadings were presented 3 December 2009 and both parties provided written witness statements on 31 March 2010. On 9 August 2010 the Court of Arbitration in Madrid found in favour of EMED Mining and all claims by Red Creek were dismissed and costs were awarded to EMED Mining.

 

 

EMED MINING PUBLIC LIMITED

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 2010 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 2010, and of its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards.

 

 

 

 

 

 

Nicosia, Cyprus 17 September 2010 MOORE STEPHENS STYLIANOU & CO

CERTIFIED PUBLIC ACCOUNTANTS - CY