Interim Results

22nd Sep 2008 12:23



EMED MINING INTERIM RESULTS

TO 30 JUNE 2008

22 September 2008 AIM: EMED

EMED Mining Public Limited ("EMED Mining" or "the Company") announces its unaudited interim results for the half-year ended 30 June 2008.

The Company significantly advanced its key projects in Spain and Slovakia during the half-year period, both of which have strong potential to add significant value in the near term. 

Highlights

In Spain, the Rio Tinto Mine is being systematically advanced towards the potential 100% acquisition and restart of this major copper mine and large processing facility. JORC-compliant Mineral Resources at Rio Tinto comprise 940,000 tonnes of contained copper and Ore Reserves comprise 585,000 tonnes of contained copper (100% of project). Copper has a spot market price over $6,600 per tonne ($3 per lb)

In Slovakia, a substantial exploration drilling program is being undertaken at the Biely Vrch porphyry gold deposit and also at similar nearby prospects in this previously unrecognised gold district. The Biely Vrch porphyry gold deposit is currently estimated to contain approximately 1.2 million ounces of gold. Further in-fill drilling is required in order to estimate a Mineral Resource compliant with the JORC Code. Gold has a spot market price over $800 per ounce.

All expenditure incurred by the Company is expensed until the Board makes a commitment to restart operations or develop a new mining operation. This conservative accounting policy has led to the Company reporting a loss of £5.4 million for the period and net assets of £6.2 million. Share market capitalisation is £36 million (18p per share).

At 30 June 2008, EMED Mining had £7.4 million in cash and net current assets of £7.4 million, Plus listed shares with a market value of £1.2 million.

Mr Anagnostaras-Adams, EMED Mining's Managing Director, said:

"We have developed EMED Mining to the fortunate position of having two key projects that are poised to deliver significant value. 

"The Rio Tinto Mine can be restarted relatively quickly and inexpensively following agreement being reached with the key stakeholders and receipt of regulatory approvals. The Rio Tinto Mine has great potential to create long-term value for all stakeholders and the strong outlook for the copper price provides an excellent opportunity to restart this major copper mine.

"Our gold prospects in Slovakia have already demonstrated their potential to be globally significant deposits each containing more than one million ounces of gold. The results from our substantial 2008 drilling program promise to be exciting, such as the recently reported intercept of 460m at 1.1g/t gold from surface at the Biely Vrch deposit."

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

Throughout the year EMED Mining has continued to work towards commencing copper production at the Rio Tinto Mine in Spain. This project involves restarting the existing open-pit mine and large processing facility. Selected key items in the processing have now been inspected and tested (such as grinding mills and floatation circuit) and repairs completed where necessary to avoid future delays. Remaining repairs are scheduled to be carried after the restart is triggered which can only occur when all regulatory consents are received. Various submissions continue to be made to the Andalucian regulatory authorities with a view to obtaining all approvals required to restart production. 

The permitting process has been enhanced by recent progress in clarifying the legal structure of the mine's ownership and by settling past disputes amongst key stakeholders. In this regard, EMED Mining conditionally holds 51% of the associate EMED Tartessus. EMED Tartessus holds the title to the Rio Tinto Mine and the associated industrial complex and full control of the site has been taken for purposes of the permitting process and restart plans. In April 2008, Company management and independent experts signed off on JORC-compliant Mineral Resources for Rio Tinto of 940,000 tonnes of contained copper and Ore Reserves of 585,000 tonnes of contained copper. Drilling programs are being designed with the objective of significantly increasing resources and reserves after the mine restart.

Activities in Slovakia

EMED Mining is undertaking a substantial exploration drilling program in Slovakia during 2008. The aims of that exploration program are to:

Confirm and extend the known mineralisation at the Biely Vrch porphyry gold deposit;

Follow-up initial drilling of the Kralova and Slatinske Lazy porphyry gold deposits; and

First-pass drilling of similar prospects in this previously unrecognised gold district.

The Biely Vrch porphyry gold deposit is currently estimated to contain approximately 1.2 million ounces of gold. Further in-fill drilling is required in order to estimate a Mineral Resource compliant with the JORC Code.

A recent drill-hole within known Biely Vrch mineralisation returned an impressive 460 metres at 1.1g/t gold. This is a better result than had been expected and the Company is now pattern diamond drilling at 100-metre spacing. 

During the 2008 field season, EMED Mining's geologists are inspecting numerous porphyry gold prospects within the Company's large (1,107km2), 100%-owned licences in Slovakia.

Exploration in Slovakia is at a very exciting stage and drilling is continuing..

Activities in Cyprus

EMED Mining's 95%-owned copper project in Cyprus holds the island's largest portfolio of exploration licences. EMED 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.

Discussions are taking place with stakeholders on both sides of the 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 are consistent with the island's re-unification efforts.

Activities in Georgia

Following an internal assessment of project risk, the Company suspended field work and closed its Tbilisi office in July 2008. No personnel were directly affected by the recent military hostilities in August 2008.

KEFI Minerals' Activities

EMED Mining is pleased with the rapid progress of 32%-owned, AIM-listed KEFI Minerals, which has established an exploration portfolio in Turkey and continually examines complementary opportunities.

Financial Results

All expenditure incurred by the Company is expensed until 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 £5.4 million for the period, which is primarily comprised of:

exploration expenditure of £1.2 million; 

expenditure incurred in relation to the Rio Tinto Mine of £3.5 million; and

net operating and other expenditure of £0.7 million.

At 30 June 2008, EMED Mining had £7.4 million in cash and net current assets of £7.4 million, plus listed shares with a market value of £1.2 million.

Capital Markets Support

EMED Mining's market capitalisation has increased from approximately £4 million upon admission to AIM in May 2005 to approximately £36 million currently. The Company's share price has increased from the IPO price of £0.08 per share to the current share price of £0.18 per share.

In May 2008, the Company successfully raised £10.0 million by a share issue at £0.20 per share. Shareholders have been very supportive of the Company's funding requirements and this is most appreciated.

A strong shareholder base has been developed, comprised as follows on a fully-diluted basis:

Management and Board (22%)

Resource Capital Funds (13%)

Oz Minerals (formerly Oxiana) (10%)

Fidelity International (5%)

Altima (4%)

RMB Australia Holdings (4%)

YA Global Investment is also a shareholder and provider of Standby Facilities. 

 EMED Mining is in discussions with various parties with regards to putting in place the financing required to restart the Rio Tinto Mine. The Company aims to structure the financing in a manner that minimises dilution and risk for shareholders.

Outlook

EMED Mining will continue to work towards commencing copper production at the Rio Tinto Mine in Spain. Once required approvals are received and other key agreements are in place, then copper production can be restarted relatively quickly from the existing open-pit mine and processing facility. 

Our substantial drilling program in Slovakia promises to deliver more significant gold intercepts. An initial JORC-compliant resource is targeted at Biely Vrch from the 2008 drilling program.

The EMED Mining team will continue its strong efforts to earn and retain the on-going support of shareholders, local communities and other stakeholders.

 

 

 

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

1. General information

Country of incorporation 

EMED Mining Public Limited (the 'Company") was incorporated in Cyprus 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 17 September 2004. 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.

The Company changed its name firstly to Mediterranean Minerals Public Limited on 1 March 2005, subsequently to Eastern Mediterranean Resources Public Limited on 11 March 2005 and on 20 September 2006 to EMED Mining Public Limited.

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 2007. 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 2007 Annual Report.

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 2008

 

2. Basis of preparation and accounting policies (continued)

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

During the current period the Group 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.

Consolidation

Controlled entities

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company as at 30 June 2008 and the results of all the controlled entities for the period then ended. The Company and its controlled entities together are referred to in this financial report as the Group.

Transactions eliminated on consolidation

Intercompany transactions, balances and unrealised gains on transactions between consolidated entities are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred.

 

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.

  

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

2. Basis of preparation and accounting policies (continued)

Exploration costs

The Group has adopted the provisions of IFRS6 "Exploration for and Evaluation of Mineral Resources". The Group's stage of operations as at the year end and as at the date of approval of these financial statements have not yet met the criteria for capitalization of exploration costs.

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%

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).

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.

Share capital

Ordinary shares are classified as equity.

  

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

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 2008

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 2008
	Cyprus	Georgia	Slovakia	Europe	Spain	Consol.	Total
	GBP'000	GBP'000	GBP'000	GBP'000	GBP'000	GBP'000	GBP'000
Operating loss	(1,167)	(99)	(783)	(11)	(3,535)	-	(5,595)
Financial income	72	-	401	9	29	-	511
Financial costs	(155)	(3)	(3)	-	-	-	(161)
Loss for period	(1,250)	(102)	(386)	(2)	(3,506)	-	(5,246)
Share of results from associates							(176)
Net loss for the period							(5,422)
Total assets	15,419	913	205	47	205	(7,709)	9,109
Total liabilities	4,679	2,041	3,058	147	114	(7,102)	2,937
Depreciation of fixed assets	22	2	-	-	-	-	24

	Six months ended 30 June 2007
	Cyprus	Georgia	Slovakia	Europe	Spain	Consol.	Total
	GBP'000	GBP'000	GBP'000	GBP'000	GBP'000	GBP'000	GBP'000
Operating loss	(973)	(97)	(624)	(251)	(1,112)	-	(3,057)
Financial costs	(6)	-	-	-	-	-	(6)
Net loss for period	(979)	(97)	(624)	(251)	(1,112)	(173)	(3,063)
Share of results from associates							(173)
Net loss for the period							(3,236)
Total assets	8,928	843	41	41	74	(6,241)	3,686
Total liabilities	1,771	1,725	1,304	359	1,181	(5,923)	417
Depreciation of fixed assets	(8)	(2)	-	-	(1)	-	(11)

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

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 2008 (Unaudited) GBP 000’s	Six months ended 30 June 2007 (Unaudited) GBP 000’s	Year ended 31 Dec 2007 GBP 000’s
Net loss attributable to equity shareholders		(5,422)	(3,236)	(8,374)
Number of ordinary share for the purposes of basic earnings per share		183,182	115,095	122,474
Basic and fully diluted loss per share (pence)		(2.96)	(2.81)	(6.84)

 

 

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.

Companies names	Date of acquisition/ incorporation	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%

In 2007, the Company incorporated four new fully owned subsidiaries. Slovenske Nerasty Spol S.R.O and Slovenske Kovy S.R.O. were incorporated in Slovakia, and EMED Mining Spain S.L. was incorporated in Spain.

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

8. Plant and equipment

	Plant & Machinery		Furniture & Fittings & Office Equipment		Motor Vehicles		Total
	GBP 000's		GBP 000's		GBP 000's		GBP 000's
Cost
At 31 Dec. 2006/1 January 2007	1		43		47		91
Additions	154		-		35		189
At 31 Dec. 2007/1 January 2008	155		43		82		280
Additions	-		6		48		54
30 June 2008	155		49		130		334
Depreciation
At 31 Dec. 2006/1 January 2007	1		18		20		39
Charge for the year	8		16		13		37
At 31 Dec. 2007/1 January 2008	9		34		33		76
Charge for the period	12		2		10		24
30 June 2008	21		36		43		100
Net book value At 30 June 2008	134		13		87		234
At 31 Dec. 2007/1 January 2008	146		9		49		204

 

9. Intangible assets

	Evaluation costs of Rio Tinto Mine (PRT)		Goodwill		Total
Cost	GBP'000		GBP'000		GBP'000
On 1 January 2007	-		585		585
Additions	3,894		71		3,965
At 31 December 2007/1 January 2008	3,894		656		4,550
Additions	3,534		-		3,534
At 30 June 2008	7,428		656		8,084
Amortisation
On 1 January 2007	-		585		585
Amortisation for the year	3,894		71		3,965
At 31 December 2007/1 January 2008	3,894		656		4,550
Amortisation for the period	3,534		-		3,534
At 30 June 2008	7,428		656		8,084
Closing net book amount
At 30 June 2008	-		-		-
At 31 December 2007/1 January 2008	-		-		-

Proyecto Rio Tinto ("Rio Tinto Mine")

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

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

9. Intangible assets (continued)

 

 

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.

Should the Company not proceed with Rio Tinto Mine it is obliged to pay for care and maintenance at the site for a period of 6 months from the date of notification of withdrawal. This gives rise to a contingent liability of €1.5 million. Should another party re-open Rio Tinto Mine, the care and maintenance and evaluation expenditure incurred by EMED Mining may be recoverable in part under certain circumstances.

 

10. Investment in associates

	2008		2007
The Group	GBP'000		GBP'000
At 1 January	514		793
Additions at cost	197		-
Share of results for the period/year	(176)		(512)
Share of equity adjustment for the period/year	173		233
Closing amount based on equity accounting	708		514

Company name	Date of incorporation	Country of incorporation	Effective proportion of shares held
Kefi Minerals Public Plc	24 October 2006	United Kingdom	32%
EMED Tartessus S.L.	12 April 2007	Spain	51%

The shares in EMED Tartessus S.L. are 'Privileged Shares' and will be returned to the vendor should the Company decide not to proceed with the Rio Tinto Mine project.

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

10. Investment in associates (continued)

Amounts relating to associate:	30 June 2006 GBP'000		31 December 2007 GBP'000
Total assets	642			592
Total liabilities	(179)			(119)
	464			473
Loss for the period/year	(557)			(690)

 

11. Debtors and other receivables 

	Six months ended  30 June 2008 (Unaudited) GBP 000's		Six months  ended  30 June 2007 (Unaudited) GBP 000's		Year  ended  31 Dec 2007 GBP 000's
Receivables from associates	98		77		57
Deposits and prepayments	369		139		719
VAT receivable	303		119		136
	770		335		912

 

12. Cash and cash equivalents

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

	Six months ended  30 June 2007 (Unaudited) GBP 000's	Six months ended  30 June 2007 (Unaudited) GBP 000's	Year  ended  31 Dec 2007 GBP 000's
Cash at bank and in hand	7,358	2,437	3,270

  

EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

13 Share capital Authorised	Number of shares '000		Share Capital GBP'000		Share premium GBP'000		Total GBP'000
Ordinary shares of GBP0.0025 each	400,000		1,000		-		1,000
Issued and fully paid
At 1 January 2007	92,727		232		6,261		6,493
Issued 10 May 2007 at GBP0.12	33,333		83		3,917		4,000
Issued 26 June 2007 at GBP0.1175 for purchase of services	250		1		29		30
Issued 21 September 2007 at GBP0.17	20,588		51		3,449		3,450
Issued 21 September 2007 at GBP0.1699 under SEDA	1,030		3		172		175
Issued 21 November 2007 at GBP0.08 upon exercise of share options	375		1		29		30
Issued 3 December 2007 at GBP0.08 upon exercise of share options	167		-		13		13
Issued 18 December 2007 at GBP0.2164 under SEDA	1,155		3		247		250
Share issue costs	-		-		(814)		(814)
At 31 December 2007/1 January 2008	149,625		374		13,303		13,677
Issued 8 May 2008 at GBP0.20	50,000		125		9,875		10,000
Issued 21 May 2008 - loan repayment	104		-		26		26
Issued 5 June 2008 - loan repayment	198		1		49		50
Issued 17 June 2008 upon exercise of share options	66		-		8		8
Share issue costs	-		-		(421)		(421)
At 30 June 2008	199,993		500		22,840		23,340

 

14. Borrowings 

	Six months ended  30 June 2008 (Unaudited) GBP 000's	Six months ended  30 June 2007 (Unaudited) GBP 000's	Year ended  31 Dec 2007 GBP 000's
Current borrowings
Other loans	302	-	302
Non-current borrowings
Other loans	2,137	-	2,216
Maturity of non-current borrowings
Between one to two years	1,809	-	302
Between two to five years	328	-	1,914
After five years	2,137	-	2,216

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

15. Trade and other payables 

	Six months ended  30 June 2008 (Unaudited) GBP 000's	Six months ended  30 June 2007 (Unaudited) GBP 000's	Year ended  31 Dec 2007 GBP 000's
Trade payables and accruals	498	417	591

 

16. Share option plan

Details of share options outstanding as at 30 June 2008:

Grant date	Expiry date	Exercise price	Number of  share options
		GBP	000's
9 May 2005	9 May 2011	0.080	10,839
11 August 2005	11 August 2011	0.100	700
28 April 2006	28 April 2012	0.135	3,530
28 June 2006	28 June 2012	0.135	150
8 September 2006	8 September 2012	0.090	1,000
8 September 2006	8 September 2012	0.110	1,000
25 January 2007	25 January 2013	0.120	1,500
26 February 2007	26 February 2013	0.135	3,784
11 May 2007	11 May 2012	0.120	1,000
11 May 2007	11 May 2013	0.150	2,500
26 June 2007	26 June 2013	0.187	500
26 June 2007	26 June 2013	0.170	625
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
Total			37,616

		Number of o share options
		000's
Options:
- outstanding at 1 January 2008:		34,970
- granted		2,712
- cancelled		-
- exercised		(66)
		37,616

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.

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. 

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

 

16. Share option plan (continued) 

On 11 May 2007, 2.5 million options were issued to the Managing Director. These options vest only if the Company exercises its option over 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, 1.25 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 vest only if the Company exercises its option over 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 issued that 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. 

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, 1.712 million options were issued that expire five years after the grant date, and are exercisable at any time within that period. 

The option agreements contain provisions adjusting the exercise price in certain circumstances including the allotment of fully paid Ordinary Shares by way of a capitalisation of the Company's reserves, a sub division or consolidation of the Ordinary Shares, a reduction of share capital and offers or invitations (whether by way of rights issue or otherwise) to the holders of Ordinary Shares.

The estimated fair values of the options were calculated using the Black Scholes option pricing model. The inputs into the model and the results are as follows:

	Weighted average share price	Weighted average exercise price	Expected volatility	Expected life (years)	Risk free rate	Expected dividend yield	Discount factor	Estimated fair value
7 May 2008	23.75p	20.00p	69.36%	5	4.98%	Nil	30%	10.82p
15 Jan. 2008	19.75p	23.80p	65.96%	6	4.98%	Nil	30%	8.35p
31 Dec. 2007	22.00p	22.00p	65.96%	6	4.27%	Nil	30%	9.76p
18 Dec. 2007	19.00p	50.00p	65.42%	4	4.27%	Nil	30%	3.85p
21 Sept. 2007	17.00p	17.00p	61.93%	5	5.00%	Nil	30%	6.47p
23 Jul. 2007	14.00p	20.00p	57.88%	6	6.35%	Nil	30%	5.13p
26 Jun. 2007	13.50p	18.66p	57.88%	6	6.32%	Nil	30%	5.09p
26 Jun. 2007	13.50p	17.00p	57.88%	6	6.32%	Nil	30%	5.30p
11 May 2007	13.25p	12.00p	57.88%	5	6.07%	Nil	30%	5.43p
11 May 2007	13.25p	15.00p	57.88%	6	6.07%	Nil	30%	5.37p
26 Feb. 2007	11.83p	13.50p	60%	6	5.85%	Nil	30%	4.19p
25 Jan. 2007	11.10p	12.00p	57.88%	6	5.97%	Nil	30%	4.56p
8 Sept. 2006	9.00p	11.00p	46%	6	4.90%	Nil	20%	5.51p
8 Sept. 2006	9.00p	9.00p	46%	6	4.90%	Nil	20%	5.86p
28 Jun. 2006	9.50p	13.50p	37%	6	4.80%	Nil	20%	3.30p
28 Apr. 2006	9.50p	13.50p	37%	6	4.70%	Nil	20%	3.25p
11 Aug. 2005	8.88p	10.00p	20%	6	4.40%	Nil	20%	3.18p
9 May 2005	8.75p	8.00p	15%	6	4.40%	Nil	20%	2.50p

Expected volatility was determined by calculating the historical volatility of the Company's share price over the period since the Company was admitted to trading on AIM.

  EMED MINING PUBLIC LIMITED

Notes to the condensed interim consolidated financial statements

for six months to 30 June 2008

17. Acquisition of subsidiaries

2008

There were no acquisitions in 2008.

2007

In 2007, the Company incorporated three new fully owned subsidiaries. Slovenske Nerasty Spol S.R.O and Slovenske Kovy S.R.O. were incorporated in Slovakia, and EMED Mining Spain S.L. was incorporated in Spain.

The share capital for the incorporation of the three subsidiaries was paid in cash as follows:

	GBP'000
Slovenske Nerasty Spol S.R.O	4
Slovenske Kovy S.R.O.	4
EMED Mining Spain S.L.	2
	10

 

18. Contingent liabilities 

In relation to Rio Tinto Mine, should the Company not proceed with its option to acquire an interest, it is obligated to pay for care and maintenance at the site for a period of 6 months from the date of the notification of withdrawal. This gives rise to a contingent liability of €1.5 million.

As part of the acquisition cost of a 95% share in Eastern Mediterranean Minerals (Cyprus) Limited, an additional contingent consideration of GBP600,000 is payable by the Company one month after the date on which Eastern Mediterranean Minerals (Cyprus) Limited first receives revenue of GBP1,000,000 from or in respect of specific exploration tenements.

 

 

19. Capital commitments

The Group has also undertaken a capital commitment, for exploration in Slovakia amounting to SKK29,300,000 (approximately GBP 593,000) over 2006 to 2009. 

 

20. Subsequent events

There were no material post balance sheet events, which have a bearing on the understanding of the financial statements other than:

On 15 July 2008 a payment of US$1 million was made against the loan facility with YA Global Investment ('YA'). The company is obliged to pay 20% of any amount over US$15 million of equity capital raised if requested by YA. The balance of the loan is repayable in cash or ordinary shares at prevailing market prices, at the election of the Company.

In addition, on 18 September 2008, 927,437 ordinary shares were issued to YA Global Investments L.P. for the payment of the second half of the £10 million SEDA Standby Facility establishment fee for GBP175,000.

  

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 2008 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 2008, and of its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards.

Nicosia, Cyprus 22 September 2008 MOORE STEPHENS STYLIANOU & CO CERTIFIED PUBLIC ACCOUNTANTS - CY

ENDIR SEEFSESASEDU

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