TIDMHUN
RNS Number : 2780C
Hunter Resources PLC
27 June 2016
27 June 2016
Hunter Resources plc
("Hunter" or the "Company")
(AIM: HUN)
Final Results for the year to 31 December 2015
and Notice of Annual General Meeting
The Board is pleased to announce the Company's annual results
for the year to 31 December 2014, which are published below.
Chairman's Statement
I am pleased to announce the results of the Hunter Resources Plc
('Hunter' or the 'Company') group (the 'Group') for the year ended
31 December 2015.
This is the second full set of audited financial statements
following the Company's successful re-admission to AIM on 4 July
2014. As set out in the Admission Document published on 6 June 2014
(available on the Company's website at www.hunter-resources.com)
the Company acquired 100% of the issued share capital of Gold
Hunter SAC in Peru through a reverse takeover. Gold Hunter had
entered into a Farm In agreement with the owners of the Pampamali
Project in Peru by which it could acquire up to 100% of the
Pampamali Project - full details of the Farm In agreement (as
amended) are provided in note 20.
The Pampamali Project consists of 8 exploration concessions with
a total area of 3,500 hectares and is located in central Peru in
the Department of Huancavelica, approximately 550 km by road from
the City of Lima. The Pampamali project is a potentially high grade
gold, silver and base metal project, consisting of 36 mineralised
veins identified to date from surface outcrops. Outcrops of between
100 and 2,000 metres in length exist with mineralised widths
ranging from 0.20 to over 3.00 metres.
On 1 July 2015 the Company announced the exercise of its option
to acquire a 51% interest in the Pampamali Project (the "Option")
under the terms of the Farm In agreement (as amended) (as announced
on 8 April 2015) with the owners of the Pampamali Project (the
"Vendors"). This was to satisfy the first two AIM Rule 9 Conditions
(as set out in the announcement of 3 July 2014) to which the
Company was subject following its re-admission to AIM. Under the
terms of the Farm In agreement (as amended), the Vendors are
legally obliged to transfer the title of the tenements to a new
locally incorporated company ("HOLDCO"), whose shares are to be
held 51% by Gold Hunter SAC and 49% by the Vendors.
On 2 March 2016 the Company announced that it had not yet
reached agreement with the Vendors following the Company legally
exercising the Option because the Vendors continued to obstruct the
legal process in Peru. As a consequence the Company commenced
formal arbitration proceedings through the American Chamber of
Commerce of Peru (the "Arbitration"). In addition to the
Arbitration the Company has continued to negotiate with the Vendors
to try to reach a settlement and thus complete the legal
formalities of the transfer of the title of the Pampamali tenements
to HOLDCO.
The Board has been working towards reaching an agreement with
the Vendors in connection with the exercise of the Option but the
Vendors have been delaying the legal process. The Company and the
Vendors currently have a draft agreement in hand to consider but
there is no guarantee that the draft agreement will be finalised
and the Board stresses that there can be no certainty that an
agreement will be executed as a binding contract, nor that any
agreement will be executed within the timeline outlined below.
In the event that:
i) the Vendors fail to transfer title of the tenements at Pampamali to HOLDCO; and
ii) Gold Hunter SAC does not own a 51% interest in HOLDCO
by 4 July 2016 the Company's Ordinary Shares will be suspended
from trading on AIM at 07.30 hrs on 5 July 2016.
If suspension occurs, trading in the Ordinary Shares will remain
suspended until the Vendors transfer title of the tenements at
Pampamali to HOLDCO and Gold Hunter SAC holds a 51% interest in
HOLDCO (together the "Conditions") or another transaction is
completed (which would require the Company to publish an admission
document). In the event that neither of these are concluded within
six months of suspension then the admission to trading on AIM of
the Ordinary Shares will be cancelled.
Shareholders should be aware that if no significant progress is
made with the Vendors in the near future the Board may conclude
that it is in the best interests of Shareholders to withdraw from
the Pampamali Project and the Company is considering its legal
options in this regard. Should the Board decide to withdraw from
the Pampamali Project then trading in the Company's Ordinary Shares
will immediately be suspended from trading on AIM.
Prospero
As announced on 19 June 2015, and following further regional
exploration in the Pampamali area, the Group acquired additional
tenements covering 5,000 hectares near and to the north west of the
Pampamali project within a prospective silver-gold-base metal belt.
The location of these tenements can be seen on the Company's
website at www.hunter-resources.com.
The acquisition of the Prospero tenements approximately doubled
the size of the Group's mining tenements in the area and provides
new geological targets over ground not previously subject to modern
geological exploration.
The Prospero area is directly along strike of the Pampamali
Project from which the trend of mineralisation continues into this
new area. Preliminary mapping of the Prospero area by the Group's
technical team identified prospective geological structures and
quartz veining with associated hydrothermal activity and breccias.
Numerous anomalies and prospect areas have been identified for
further assessment.
Funding
In June 2016 the board has secured additional unconditional
funding of GBP50,000 from Marine; a further GBP50,000 has been made
available, subject to the passing of certain resolutions at the
Company's forthcoming annual general meeting (refer to note 23.2)
to restructure the Company's share capital by removing the par
value of the Company's Ordinary Shares. This funding is sufficient
for the immediate needs of the Company and Group, but will be
insufficient to fund the ongoing development of the Group's
existing projects, or to acquire interests in new prospects. The
Company is currently in discussion with its major shareholders and
other investors on bringing in new funding through either equity or
convertible debt instruments.
Other projects
We are actively reviewing several alternative projects and will
provide updates in due course on any significant developments.
Financial Review
The Group's loss for the year ended 31 December 2015 was
GBP210,000 (2014: loss of GBP476,000) including share based
payments charge of GBPnil (2014: charge of GBP148,000).
Going Concern and Impairment of Assets
The Board wish to bring to shareholder's attention for following
sections from note 3 in the annual report and accounts.
Going concern
The Company and Group financial statements have been prepared on
a going concern basis, which contemplates the continuity of
business activity.
As at the date of this report the Company and Group has
available cash balances of approximately GBP53,000. The Group has
GBP50,000 of borrowing facilities which will become available to
it, subject to the passing of certain resolutions relating to the
Company's share capital structure at the Company's forthcoming
annual general meeting. Further details on these borrowing
facilities are included in note 23.2. The available cash balances
are insufficient to enable the Company to continue in operation for
a period of twelve months from the date of this report and to fund
the Group's ongoing activities in Peru. To remain a going concern,
the Company will need to access the conditional borrowing facility
of GBP50,000 (which requires the approval of certain resolutions at
the Company's forthcoming annual general meeting) and additional
sources of funding which in all likelihood will involve the issue
of additional new Ordinary Shares or convertible loan notes. The
attractiveness of the Company's Ordinary Shares or convertible loan
notes as an investment opportunity will depend on a number of
factors, including but not limited to, the quality and experience
of its management team, the nature of the existing or new projects
it identifies and the anticipated return available to Shareholders
once existing obligations are discharged.
The Directors have obtained non-binding expressions of interest
from existing and potential new investors to fund up to an
additional GBP200,000 which is expected to be sufficient for the
Company to continue in operation for a period of at least twelve
months from the date of this report. The Directors, having
consulted with the Company's financial advisers, believe that this
additional funding will be available under terms that are
acceptable to the Company and therefore believe that there is a
reasonable possibility that the Company will be able to access
funding in the short term to allow the Company to continue in
operation.
There can however be no certainty that funding will be
available, or if available, whether the terms will be acceptable to
the Company. The Directors acknowledge that there is therefore a
material uncertainty over the Company's ability to raise the
necessary funding in the timeframe required.
As a result of the above factors, the Directors acknowledge that
material uncertainties exist which may cast significant doubt on
the Company and the Group's ability to continue as a going concern
and, therefore, to realise its assets and discharge its liabilities
in the normal course of business. Nevertheless after making
enquiries, and considering the uncertainties described above, the
Directors have a reasonable expectation that the Group and the
Company have adequate resources to continue in operational
existence for the foreseeable future. For these reasons, they
continue to adopt the going concern basis in preparing the annual
report and financial statements.
Impairment of the Group's 'Exploration and evaluation assets',
and the Company's 'Investment in subsidiary undertakings' and
'Amounts due from subsidiary undertakings'
The recoverability of the Group's 'Exploration and evaluation
assets' (note 13), and the Company's 'Investment in subsidiary
undertakings' (note 12) and 'Amounts due from subsidiary
undertakings' (note 14) is currently dependent on the successful
economic development of the Pampamali Project and, to a lesser
extent, the Prospero Project. The development of the Pampamali
Project is dependent, inter alia, on the Group obtaining control of
the Pampamali Project, and obtaining funding for the exploration,
evaluation and subsequent development and mining activities on the
property (refer to note 3.2.1.1 for matters relating to the
Company's funding requirements). The process by which the Group can
obtain control of the Pampamali Project is summarised in note 20;
the next stage requires the Vendors to transfer ownership of the
Pampamali Project to a new company and to issue Hunter with 51% of
the ownership of this new company. Despite the Company complying
with all of the terms of the Farm in Agreement (as amended), as at
31 December 2015 and the date of this report, the Vendors have not
transferred the Pampamali Project into this new company, nor has
the 51% interest been issued to the Company. Subsequent to the year
end, and as more fully described in note 23.1, the Group has
initiated arbitration proceedings against the Vendors to enforce
the terms of the Farm in Agreement (as amended).
The Directors are confident that the Group has complied with all
requirements of the Farm in Agreement (as amended) and believe that
the Vendors will comply with the terms of this agreement.
Accordingly, the Directors believe that the Group's 'Exploration
and evaluation assets' (note 13), and the Company's 'Investment in
subsidiary undertakings' (note 12) and 'Amounts due from subsidiary
undertakings' (note 14) are recoverable and no provision for
impairment is required as at 31 December 2015. If the Group is
unsuccessful in its negotiation with the Vendors or through the
arbitration proceedings and any subsequent legal action that it may
take, then the Group will need to provide against the Group's
'Exploration and evaluation assets' (note 13) and, in all
likelihood, provide in full against the Company's 'Investment in
subsidiary undertakings' (note 12) and 'Amounts due from subsidiary
undertakings' (note 14). If this provision for impairment was
recorded as at 31 December 2015, the Group's loss for the year then
ended would increase by GBP495,000 and the Company's loss would
increase by GBP576,000.
Publication of Annual Report and Accounts
The Company's annual report and audited accounts for the year
have been published on the Company's website
http://www.hunter-resources.com in accordance with the Company's
articles of association, and are available to shareholders.
Notice of Annual General Meeting
The Annual General Meeting of the Company will be held on 12
July 2016 at 12noon at The Chambers, 5 Mount Pleasant, Douglas,
Isle of Man, IM1 2PU (the "AGM"). The notice of the AGM has been
published on the Company's website http://www.hunter-resources.com
in accordance with the Company's articles of association, and are
available to shareholders.
For further information, please contact:
Hunter Resources PLC Allenby Capital Limited
Simon Hunt (Nominated Adviser and
(Chairman) Broker)
+44 7733 337 755 John Depasquale/Nick Harriss/Nick
www.hunter-resources.com Naylor
+44 20 3328 5656
www.allenbycapital.com
------------------------- ----------------------------------
The Directors present their annual report on the affairs of the
Company and Group together with the financial statements and
Independent Auditor's Report thereon, for the year ended 31
December 2015.
Except where otherwise noted, amounts are presented in this
Directors' Report in Great British Pounds ('GBP' or GBP').
1. Listing details
Hunter is an Isle of Man company with Ordinary Shares quoted on
the AIM Market of the London Stock Exchange under symbol HUN.
2. Principal activity
The Company is the holding company for a group focussed on the
mining and natural resources sector in South America.
3. Result for year and review of operations
A review of the Group's operations in the period is provided in
the Report of the Executive Chairman.
The Group's loss for the year ended 31 December 2015 was
GBP210,000 (2014: loss of GBP476,000).
4. Going concern basis
Details of the Directors' review of the going concern status of
the Company (and by extension the Group) are provided in note
3.2.1.1. Based on the matters discussed therein, whilst material
uncertainties exist which may cast significant doubt on the
Company's and the Group's ability to continue as a going concern,
the Directors have a reasonable expectation that the Company and
the Group have, or will have, adequate resources to continue in
operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in
preparing the financial statements.
5. Directors
The Directors, who served throughout the year and to date, were
as follows:
Date of
appointment
---------------- ----------------------- -----------------
Simon Hunt Executive Chairman 15 October 2007
John Molyneux Non-Executive Director 28 December 2012
David Paull Non-Executive Director 28 December 2012
Andrew Richards Non-Executive Director 4 July 2014
5.1. Directors' interests
As at the date of this report, the Directors had the following
interests in the Company's Ordinary Shares:
Simon Hunt 433,333
John Molyneux 22,500,000
David Paull 1,278,599
Andrew Richards 350,000
-----------
5.2. Directors' emoluments
Details of the Directors' emoluments are provided in note 7.
5.3. Directors' Warrants
Details of warrants issued to the Directors and their related
entities who served during the year are as follows:
Director At
1 January
2015 and
31 December 2015
----------------- ------------------
Simon Hunt (1) 5,000,000
John Molyneux 2,000,000
David Paull 2,000,000
Andrew Richards 2,000,000
------------------
11,000,000
------------------
(1) These warrants are issued to Cornerstone Capital Limited,
a company of which Mr S Hunt is both a Director and
shareholder (refer to note 21.3).
Further details on the Directors' Warrants are provided in note
18.
6. Substantial shareholding interests
The following shareholdings of 3% or more of the Ordinary Share
capital of the Company are set out in the register of members of
the Company as at 17 June 2016:
Number %
----------------------------------------- ----------- ------
Marine Investments (WA) Pty Limited (1) 35,897,654 27.04
John Molyneux 22,500,000 16.95
Global Pearl Ltd 13,277,838 9.97
Hatfield Nominees Pty Limited (2) 5,000,383 3.75
----------- ------
(1) Includes 866,667 Ordinary Shares held by Mrs Diana
Lalor and 100,000 Ordinary Shares held by Mr Peter
Lalor and 60,000 Ordinary Shares held by Blackwood
Consolidated Pty Limited. Marine Investments (WA)
Pty and Blackwood Consolidated Pty Limited are both
controlled by Mr P Lalor.
(2) Includes 1,966,633 Ordinary Shares in the name of
Hatfield Nominees Pty Limited, 16,500 shares in the
name of Galgo Investments Pty Limited and 1,016,500
Ordinary Shares in the name of Finmont Pty Limited
and 3,750 Ordinary Shares in the name of Jacobs Ladder
Investments Pty Limited
7. Corporate governance
As an AIM-quoted company, the Company is not required to comply
with the UK Corporate Governance Code, issued by the Financial
Reporting Council in September 2012 (the 'Governance Code').
However, the Directors recognise the importance of sound corporate
governance and observe the guidance provided by the Quoted
Companies Alliance (the 'QCA Code') to the extent they consider it
appropriate in the light of the Company's size, stage of
development and resources.
The Company holds regular Board meetings at which reports
relating to the Group's operations, together with financial
reports, are considered. The Board is responsible for formulating,
approving and reviewing the Group's strategy, budgets, major items
of expenditure and senior personnel appointments. The Company has
formed certain sub-committees of the Board to deal with specific
matters as set out below.
Audit committee
The audit committee comprises the Executive Chairman and David
Paull and is chaired by the Executive Chairman. The audit committee
receives and reviews reports from management and from the auditor
relating to the interim and annual accounts and to internal
controls and risk management systems.
The audit committee reviews reports from management and the
Company's auditor on the financial accounts and internal control
and risk management systems used throughout the Group. The audit
committee monitors the Company's procedures for detecting and
preventing bribery and fraud.
AIM Rules Compliance committee
The committee comprises the Executive Chairman and John Molyneux
and is chaired by the Executive Chairman. The committee ensures
that procedures, resources and controls are in place with a view to
ensuring the Company's compliance with AIM rules.
The committee ensures that all announcements made have been
verified and approved by the Company's Nominated Adviser. The
committee has particular responsibility for questioning the
Directors in the event of any unusual, substantial movement in the
Company's share price.
Remuneration committee
The remuneration committee comprises two of the Company's
non-executive Directors being John Molyneux and Andrew Richards.
The purpose of the remuneration committee is to ensure that the
executive Directors are fairly rewarded for their individual
contributions to the overall performance of the Company, to
determine all elements of the remuneration of the executive
Directors and to demonstrate to the Company's Shareholders that the
remuneration of the executive Directors is set by a Board committee
whose members have no personal interest in the outcome of the
committee's decision and who will have appropriate regard to the
interests of the Shareholders.
Finance Committee
The finance committee comprises the Executive Chairman and David
Paull and is chaired by the Executive Chairman. The committee is
responsible for the integrity of the Company's financial reporting
and reviews and reports to the Board on any significant financial
reporting issues which they contain having regard to matters
communicated to it by the Company's auditors. The committee
implements any recommendations of the auditors and keeps under
review the adequacy and effectiveness of the Company's internal
financial controls and internal control and risk management
systems, oversees the Company's cash-flows, oversees the Company's
responses to cash calls in relation to the Company's mining
exploration project in Peru and oversees the extent to which the
Company is complying with or exceeding budgets for expenditure and
other items.
8. Dividends
The Directors do not recommend the payment of a dividend for the
year ended 31 December 2015 (2014: GBPnil).
9. Events subsequent to the balance sheet date
Details of events subsequent to the balance sheet date which are
considered by the Directors to be material and require disclosure
in these financial statements are provided in note 23.
10. Independent auditor and statement of provision of
information to the independent auditor
Mazars LLP have expressed their willingness to continue in
office as the independent auditor of the Company and a resolution
to re-appoint them will be proposed at the forthcoming Annual
General Meeting.
The Directors who held office at the date of approval of this
Directors' Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company's
auditor is not aware; and each Director has taken all the steps
that he ought to have taken as a Director to make himself aware of
any relevant audit information and to establish that the Company's
auditor is aware of that information.
11. Additional information
Additional information on the Company can be found on the
Company's website at www.hunter-resources.com.
Approved by the Board and signed on its behalf by:
_____________________
Simon Hunt
Director and Executive Chairman
Date: 24 June 2016
HUNTER RESOURCES Plc
Independent Auditor's Report
to the Members of Hunter Resources Plc
The Directors are responsible for preparing the Annual Report
comprising the Report of the Executive Chairman, the Directors'
Report, and Group and Company financial statements prepared in
accordance with applicable laws and regulations. The Directors have
elected to prepare the financial statements of the Company and the
Group in accordance with International Financial Reporting
Standards ('IFRSs') as issued by the IASB. Isle of Man company law
requires the Directors to prepare such financial statements in
accordance with relevant accounting standards and the Companies Act
2006.
In preparing these financial statements, the Directors are
required to:
-- Select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with IFRS as issued by IASB; and
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business; and
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time, the
financial position of the Company and the Group, for the system of
internal control, for safeguarding assets, for taking reasonable
steps for the prevention and detection of fraud, and other
irregularities and for the preparation of a Directors' Report which
complies with the requirements of the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the company website. Legislation in the Isle of Man governing
the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
We have audited the financial statements of Hunter Resources Plc
for the year ended 31 December 2015 which comprise the Consolidated
and Company Income Statements, the Consolidated and Company
Statements of Comprehensive Income, the Consolidated and Company
Statements of Financial Position, the Consolidated and Company
Statements of Changes in Equity, the Consolidated and Company Cash
Flow Statements, and the related notes 1 to 23. The financial
reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards as
issued by the IASB.
Respective responsibilities of Directors and auditor
As explained more fully in the Statement of Directors'
Responsibilities on page 7, the Directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view.
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors. This report is made solely to the
Company's members as a body. Our audit work has been undertaken so
that we might state to the Company's members those matters we are
required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company and the
Company's members as a body for our audit work, for this report, or
for the opinions we have formed.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of whether: the accounting policies are
appropriate to the Company circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors and the overall
presentation of the financial statements. In addition, we read all
the financial and non-financial information in the annual report to
identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group and the
parent Company's affairs as at 31 December 2015 and of the Group's
and the parent Company's loss for the year then ended; and
-- have been properly prepared in accordance with IFRSs as issued by the IASB.
Emphasis of matter - going concern
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 3.2.1.1 to the financial statements concerning the Group and
parent Company's ability to continue as a going concern. The Group
incurred a net loss of GBP210,000 during the year ended 31 December
2015. This, along with the requirement to obtain additional future
funding and other matters explained in note 3.2.1.1 to the
financial statements, indicate the existence of a material
uncertainty which may cast significant doubt about the Group and
parent Company's ability to continue as a going concern. The
financial statements do not include the adjustments that would
result if the Group and parent Company were unable to continue as a
going concern.
Mazars LLP
Chartered accountants
and Statutory Auditor
Tower Bridge House
St Katharine's Way
London
E1W 1DD
June 2016
HUNTER RESOURCES Plc
Consolidated and Company Income Statements
and Consolidated and Company Statements of Comprehensive
Income
for the year ended 31 December 2015
CONSOLIDATED AND COMPANY INCOME STATEMENTS
2015 2014 2015 2014
Group Group Company Company
Note GBP'000 GBP'000 GBP'000 GBP'000
---- ------- ------- -------- --------
CONTINUING OPERATIONS
Administrative expenses (213) (320) (162) (307)
Share based payments 18.2 - (148) - (148)
Investment revenues 8 3 - 18 3
Finance costs 9 - (8) - (8)
------- ------- -------- --------
Loss before taxation 5 (210) (476) (144) (460)
Taxation 10 - - - -
------- ------- -------- --------
LOSS FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY (210) (476) (144) (460)
------- ------- -------- --------
LOSS PER SHARE
Basic and diluted loss per share 11 (0.16) (0.56) (0.11) (0.54)
------- ------- -------- --------
CONSOLIDATED AND COMPANY STATEMENTS OF COMPREHENSIVE INCOME
2015 2014 2015 2014
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- -------- --------
Loss for the year (210) (476) (144) (460)
Items that will be reclassified subsequently to profit or loss:
Foreign exchange translation differences 17.5 (2) (1) - -
------- ------- -------- --------
Other comprehensive income for the year (2) (1) - -
------- ------- -------- --------
Total comprehensive income for the year attributable to owners of
the parent Company (212) (477) (144) (460)
------- ------- -------- --------
HUNTER RESOURCES Plc
Consolidated and Company Statements of Financial Position
as at 31 December 2015
2015 2014 2015 2014
Group Group Company Company
Note GBP'000 GBP'000 GBP'000 GBP'000
----- -------- -------- --------- ---------
ASSETS
Non-current assets
Investment in subsidiary undertakings 12 - - 199 199
Exploration and evaluation assets 13 495 353 - -
Amounts due from subsidiary undertakings 14 - - 377 172
-------- -------- --------- ---------
495 353 576 371
-------- -------- --------- ---------
Current assets
Prepayments 7 13 6 9
Other receivables 6 25 6 16
Cash and cash equivalents 96 478 95 471
--------
109 516 107 496
-------- -------- --------- ---------
TOTAL ASSETS 604 869 683 867
-------- -------- --------- ---------
LIABILITIES
Current liabilities
Trade and other payables 15 27 80 21 61
-------- -------- --------- ---------
TOTAL LIABILITIES 27 80 21 61
-------- -------- --------- ---------
NET CURRENT ASSETS 82 436 86 435
-------- -------- --------- ---------
NET ASSETS 577 789 662 806
-------- -------- --------- ---------
Share capital 17 2,170 2,170 2,170 2,170
Share premium 17 5,406 5,406 5,406 5,406
Currency translation reserve 17.5 468 470 471 471
Accumulated losses (7,467) (7,257) (7,385) (7,241)
-------- -------- --------- ---------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY 577 789 662 806
-------- -------- --------- ---------
These financial statements were approved by the Board of
Directors and authorised for issue on 24 June 2016. Signed on
behalf of the Board of Directors by:
Simon Hunt
Director and
Executive Chairman
24 June 2016
HUNTER RESOURCES Plc
Consolidated and Company Statement of Changes in Equity
for the year ended 31 December 2015
Convertible Currency
loan note translation Accumulated
Note Share capital Share premium reserve reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----- -------------- -------------- -------------- --------------- ------------ --------
GROUP
Balance at 1
January 2014 1,216 5,187 5 471 (6,899) (20)
Loss for the
year - - - - (476) (476)
Other
comprehensive
income:
Exchange
translation
loss on
foreign
operations - - - (1) - (1)
-------------- -------------- -------------- --------------- ------------ --------
Total
comprehensive
income for
the year - - - (1) (476) (477)
Share based
payments 18.2 - 93 - - 108 201
Issue of
Ordinary
Shares 17 954 464 - - - 1,418
Expenses
incurred in
issuing
Ordinary
Shares 17 - (338) - - - (338)
Allocation of
proceeds
received from
the issue of
convertible
loan notes 16 - - 5 - - 5
Transfer to
accumulated
loss on
conversion of
convertible
loan notes 16 - - (10) - 10 -
-------------- -------------- -------------- --------------- ------------ --------
Balance at 31
December 2014 2,170 5,406 - 470 (7,257) 789
Loss for the
year - - - - (210) (210)
Other
comprehensive
income:
Exchange
translation
loss on
foreign
operations - - - (2) - (2)
-------------- -------------- -------------- --------------- ------------ --------
Total
comprehensive
income for
the year - - - (2) (210) (212)
Balance at 31
December 2015 2,170 5,406 - 468 (7,467) 577
-------------- -------------- -------------- --------------- ------------ --------
COMPANY
Balance at 1
January 2014 1,216 5,187 5 471 (6,899) (20)
Loss and total
comprehensive
income for
the year - - - - (460) (460)
Share based
payments 18.2 - 93 - - 108 201
Issue of
Ordinary
Shares 17 954 464 - - - 1,418
Expenses
incurred in
issuing
Ordinary
Shares 17 - (338) - - - (338)
Allocation of
proceeds
received from
the issue of
convertible
loan notes 16 - - 5 - - 5
Transfer to
accumulated
loss on
conversion of
convertible
loan notes 16 - - (10) - 10 -
Balance at 31
December 2014 2,170 5,406 - 471 (7,241) 806
Loss and total
comprehensive
income for
the year - - - - (144) (144)
Balance at 31
December 2015 2,170 5,406 - 471 (7,385) 662
-------------- -------------- -------------- --------------- ------------ --------
HUNTER RESOURCES Plc
Consolidated and Company Cash Flow Statements
for the year ended 31 December 2015
2015 2014 2015 2014
Group Group Company Company
Note GBP'000 GBP'000 GBP'000 GBP'000
----- -------- -------- --------- ---------
Cash flows from operating activities
Loss for the year (210) (476) (144) (460)
Adjustments for:
Share based payments 18 - 148 - 148
Investment revenues 8 (3) - (18) (3)
Finance costs 9 - 8 - 8
Foreign exchange gain (13) (7) (13) (7)
Operating cash flows before movements in working capital (226) (327) (175) (314)
(Increase) / decrease in receivables 26 (26) 13 (13)
(Decrease) / increase in trade and other payables (50) 53 (37) 34
-------- -------- --------- ---------
Cash used in operating activities (250) (300) (199) (293)
-------- -------- --------- ---------
Cash flows from investing activities
Advances to subsidiary undertakings 14 - - (177) (159)
Acquisition of intangible exploration and evaluation assets (131) (154) - -
Net cash used in investing activities (131) (154) (177) (159)
-------- -------- --------- ---------
Cash flows from financing activities
Proceeds from the issue of new Ordinary Shares 17 - 883 - 883
Issue expenses of new Ordinary Shares 17 - (164) - (164)
Proceeds from the issue of Convertible loan notes 16 - 190 - 190
Issue expenses of Convertible loan notes 16 - - - -
Net cash provided by financing activities - 909 - 909
-------- -------- --------- ---------
Net (decrease) / increase in cash and cash equivalents (381) 455 (376) 457
Effects of exchange rate changes on the balance of cash held
in foreign currencies (1) 9 - -
Cash and cash equivalents at the beginning of the year 478 14 471 14
-------- -------- --------- ---------
Cash and cash equivalents at the end of the year 96 478 95 471
-------- -------- --------- ---------
HUNTER RESOURCES Plc
Notes to the Financial Statements
1. GENERAL INFORMATION
Hunter Resources Plc is a company incorporated and domiciled in
the Isle of Man, under the Companies Act 2006, with registered
number 011261V. Further details, including the address of the
registered office, are given in the section of this report entitled
'Company Information and Advisers'. The nature of the Company and
Group's operations and its principal activities are set out in the
Directors' Report. Details of the Company's subsidiary
undertakings, including the name, country of incorporation,
operation and ownership interest are given in note 12.
As permitted by the AIM Rules for Companies, the financial
statements have been prepared in accordance with IFRSs as issued by
the IASB as they apply to the financial statements of the Company
and Group for the year ended 31 December 2015.
The consolidated financial information is a consolidation of the
Company and its subsidiary. These financial statements are
presented in thousands of GBP. Foreign operations are included in
accordance with the policies set out in note 3.5.
2. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
2.1. New Standards and Interpretations adopted with no
significant effect on the financial statements
The following new and revised Standards and Interpretations have
been adopted in these financial statements. Their adoption has not
had any significant impact on the amounts reported in these
financial statements, but may impact the accounting for future
transactions and arrangements.
IAS 19 Amendment 2013 Defined benefit plans:
Employee contributions
Improvements to Amendments 2012 Annual improvements
IFRS 2010-2012
Improvements to Amendments 2013 Annual improvements
IFRS 2011-2013
2.2. New Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the
following Standards and Interpretations are in issue but not yet
effective:
IAS 12 Amendment 2016 Recognition of deferred
tax assets for unrealised
losses
IAS 16 Amendment 2014 Acceptable methods of
depreciation and bearer
plants
IAS 38 Amendment 2014 Acceptable methods of
amortisation
IAS 41 Amendment 2014 Amendment to bring bearer
assets into IAS 16
IFRS 9 New 2009, Amendment Financial instruments
2010, 2011, (Hedge Accounting and
2013 and 2014 amendments to IFRS 9,
IFRS 7 and IAS 39)
IFRS 10, IFRS 12, Amendment 2014 Sale or contribution
IAS 27 and IAS 28 of assets and application
of the consolidation
exemption
IFRS 11 Amendment 2014 Acquisition of an interest
in a joint operation
IFRS 14 New 2014 Regulatory deferral accounts
IFRS 15 New 2014 Revenue from Contracts
with Customers
IFRS 16 New 2016 Accounting for leases
Improvements to IFRS Amendments 2014 Annual improvements September
2014
Disclosure initiative Amendments 2014 Amendments resulting
from the disclosure initiative
The Directors do not anticipate that the adoption of these
Standards and Interpretations will have a material impact on the
Group's financial statements in the period of initial
application.
3. SIGNIFICANT ACCOUNTING POLICIES
3.1. Basis of preparation
The Group's and the Company's financial statements are prepared
on the historical cost basis. The Group's and the Company's
accounting policies have been consistently applied to the results,
gains and losses, assets, liabilities and cash flows of entities
included in the financial statements.
3.2. Critical accounting judgments and sources of estimation uncertainty
The preparation of financial statements in conformity with IFRSs
requires the Directors to make judgements, estimates and
assumptions that affect the application of policies and the
reported amounts of assets and liabilities, income and expenses.
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 judgements 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
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that year or in the year of the revision and future periods if
the revision affects both current and future years. Other than as
discussed below in this note there are no critical accounting
judgments that are considered to be material by the Directors.
There are also no critical accounting estimates as at 31 December
2015.
3.2.1.1. Going concern
The Company and Group financial statements have been prepared on
a going concern basis, which contemplates the continuity of
business activity.
As at the date of this report the Company and Group has
available cash balances of approximately GBP53,000. The Group has
GBP50,000 of borrowing facilities which will become available to
it, subject to the passing of certain resolutions relating to the
Company's share capital structure at the Company's forthcoming
annual general meeting. Further details on these borrowing
facilities are included in note 23.2. The available cash balances
are insufficient to enable the Company to continue in operation for
a period of twelve months from the date of this report and to fund
the Group's ongoing activities in Peru. To remain a going concern,
the Company will need to access the conditional borrowing facility
of GBP50,000 (which requires the approval of certain resolutions at
the Company's forthcoming annual general meeting) and additional
sources of funding which in all likelihood will involve the issue
of additional new Ordinary Shares or convertible loan notes. The
attractiveness of the Company's Ordinary Shares or convertible loan
notes as an investment opportunity will depend on a number of
factors, including but not limited to, the quality and experience
of its management team, the nature of the existing or new projects
it identifies and the anticipated return available to Shareholders
once existing obligations are discharged.
The Directors have obtained non-binding expressions of interest
from existing and potential new investors to fund up to an
additional GBP200,000 which is expected to be sufficient for the
Company to continue in operation for a period of at least twelve
months from the date of this report. The Directors, having
consulted with the Company's financial advisers, believe that this
additional funding will be available under terms that are
acceptable to the Company and therefore believe that there is a
reasonable possibility that the Company will be able to access
funding in the short term to allow the Company to continue in
operation.
There can however be no certainty that funding will be
available, or if available, whether the terms will be acceptable to
the Company. The Directors acknowledge that there is therefore a
material uncertainty over the Company's ability to raise the
necessary funding in the timeframe required.
As a result of the above factors, the Directors acknowledge that
material uncertainties exist which may cast significant doubt on
the Company and the Group's ability to continue as a going concern
and, therefore, to realise its assets and discharge its liabilities
in the normal course of business. Nevertheless after making
enquiries, and considering the uncertainties described above, the
Directors have a reasonable expectation that the Group and the
Company have adequate resources to continue in operational
existence for the foreseeable future. For these reasons, they
continue to adopt the going concern basis in preparing the annual
report and financial statements.
3.2.1.2. Exploration and evaluation activities
The application of the Group's accounting policy for exploration
and evaluation expenditure requires judgement to determine whether
future economic benefits are likely, from either future
exploitation or sale, or whether activities have not reached a
stage that permits a reasonable assessment of the existence of
reserves.
In addition to applying judgement to determine whether future
economic benefits are likely to arise from the Group's exploration
and evaluation assets or whether activities have not reached a
stage that permits a reasonable assessment of the existence of
reserves, the Group has to apply a number of estimates and
assumptions. The estimates directly impact when the Group defers
exploration and evaluation expenditure. The deferral policy
requires management to make certain estimates and assumptions about
future events and circumstances, particularly, whether an
economically viable extraction operation can be established. Any
such estimates and assumptions may change as new information
becomes available. If, after expenditure is capitalised,
information becomes available suggesting that the recovery of
expenditure is unlikely, the relevant capitalised amount is written
off to profit or loss in the period when the new information
becomes available.
No impairment has been recorded against the Group's Exploration
and evaluation assets as at 31 December 2015 or 31 December 2014
due to the early stage of exploration of those assets and the
initial work completed at Pampamali and Prospero which provides
comfort on the existence of economically viable resources, and the
reasons disclosed in note 3.2.1.3.
3.2.1.3. Impairment of the Group's 'Exploration and evaluation
assets', and the Company's 'Investment in subsidiary undertakings'
and 'Amounts due from subsidiary undertakings'
The recoverability of the Group's 'Exploration and evaluation
assets' (note 13), and the Company's 'Investment in subsidiary
undertakings' (note 12) and 'Amounts due from subsidiary
undertakings' (note 14) is currently dependent on the successful
economic development of the Pampamali Project and, to a lesser
extent, the Prospero Project. The development of the Pampamali
Project is dependent, inter alia, on the Group obtaining control of
the Pampamali Project, and obtaining funding for the exploration,
evaluation and subsequent development and mining activities on the
property (refer to note 3.2.1.1 for matters relating to the
Company's funding requirements). The process by which the Group can
obtain control of the Pampamali Project is summarised in note 20;
the next stage requires the Vendors to transfer ownership of the
Pampamali Project to a new company and to issue Hunter with 51% of
the ownership of this new company. Despite the Company complying
with all of the terms of the Farm in Agreement (as amended), as at
31 December 2015 and the date of this report, the Vendors have not
transferred the Pampamali Project into this new company, nor has
the 51% interest been issued to the Company. Subsequent to the year
end, and as more fully described in note 23.1, the Group has
initiated arbitration proceedings against the Vendors to enforce
the terms of the Farm in Agreement (as amended).
The Directors are confident that the Group has complied with all
requirements of the Farm in Agreement (as amended) and believe that
the Vendors will comply with the terms of this agreement.
Accordingly, the Directors believe that the Group's 'Exploration
and evaluation assets' (note 13), and the Company's 'Investment in
subsidiary undertakings' (note 12) and 'Amounts due from subsidiary
undertakings' (note 14) are recoverable and no provision for
impairment is required as at 31 December 2015. If the Group is
unsuccessful in its negotiation with the Vendors or through the
arbitration proceedings and any subsequent legal action that it may
take, then the Group will need to provide against the Group's
'Exploration and evaluation assets' (note 13) and, in all
likelihood, provide in full against the Company's 'Investment in
subsidiary undertakings' (note 12) and 'Amounts due from subsidiary
undertakings' (note 14). If this provision for impairment was
recorded as at 31 December 2015, the Group's loss for the year then
ended would increase by GBP495,000 and the Company's loss would
increase by GBP576,000.
3.3. Basis of consolidation and discontinued operations
The Consolidated financial statements (comprising the balances
and transactions identified as 'Group' within these financial
statements) incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries) made up to 31
December. Control is achieved where the Company has the power to
govern the financial and operating policies of an investee entity
so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the
year are included in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income from the effective date of
acquisition or up to the effective date of disposal, as
appropriate. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
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 value at the acquisition date, except
for non-current assets (or disposal groups) that are classified as
held for resale 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 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. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable
assets, liabilities and contingent liabilities exceed the cost of
the business combination, the excess is recognised immediately in
profit or loss.
3.4. Revenue recognition
The Group did not recognise any revenue from the sale of goods
or services in either period presented. Interest income is accrued
on a time basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset's net carrying
amount.
3.5. Foreign currencies
In preparing the financial statements of the individual
companies in the Group, transactions in currencies other than the
entity's functional currency (foreign currencies) are recorded at
the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Non-monetary items carried at
fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
year in which they arise.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's non GBP functional
currency entities are translated at exchange rates prevailing on
the balance sheet date. Income and expense items are translated at
the average exchange rates for the year, unless exchange rates
fluctuate significantly during that year, in which case the
exchange rates at the date of transactions are used. Exchange
differences arising, if any, are classified as other comprehensive
income and transferred to the Group's translation reserve. Such
translation differences are recognised as income or as expenses in
the year in which the operation is disposed of, or abandoned.
3.6. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
Income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the Income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
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 they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
3.7. Exploration and evaluation
3.7.1. Pre-licence costs
Pre-licence costs relate to costs incurred before the Group has
obtained legal rights to explore in a specific area. Such costs may
include the acquisition of exploration data and the associated
costs of analysing that data. These costs are expensed in the
period in which they are incurred.
3.7.2. Exploration and evaluation expenditure
Exploration and evaluation activity involves the search for
mineral resources, the determination of technical feasibility and
the assessment of commercial viability of an identified resource.
Exploration and evaluation activities include, inter alia:
i. Licence costs paid in connection with a right to explore in
an existing exploration area
ii. Researching and analysing historical exploration data
iii. Gathering exploration data through geophysical studies
iv. Exploratory drilling and sampling
v. Determining and examining the volume and grade of the resource
vi. Surveying transportation and infrastructure requirements
vii. Conducting market and finance studies
Once the legal right to explore a license areas has been
acquired, exploration and evaluation expenditure is capitalised,
and classified according to its nature as either a tangible or an
intangible asset.
Exploration and evaluation assets are subsequently assessed for
impairment when facts and circumstances indicate that the carrying
amount of the Exploration and evaluation asset may exceed its
recoverable amount. The impairment review is conducted in
accordance with the policy disclosed below in 3.9.
When the technical and commercial feasibility of a project is
determined, the related Exploration and evaluation asset is
transferred to property, plant and equipment and depreciated on a
units of production basis.
3.8. Investment in subsidiary
The investment in subsidiary undertakings in the Company only
financial statements is stated at cost, less any provision for
impairment.
3.9. Impairment of assets
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets (including Exploration and
evaluation assets), and the Company further reviews the carrying
amount of its investment in subsidiary undertakings, to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment annually
and whenever there is an indication that the asset may be
impaired.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in profit or
loss immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years. A
reversal of an impairment loss is recognised in profit or loss
immediately.
3.10. Financial instruments
Financial assets and financial liabilities are recognised on the
balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
3.10.1. Loans and other receivables
Trade receivables, loans and other receivables, including
amounts due from subsidiary undertakings, that have fixed or
determinable payments that are not quoted in an active market are
classified as 'loans and receivables'. Loans and receivables are
measured at amortised cost using the effective interest method,
less any impairment. Interest income is recognised by applying the
effective interest rate, except for short-term receivables when
recognition of interest would not be material.
All of the Group's financial assets are classified as 'loans and
receivables'.
3.10.2. Other financial liabilities
Trade payables and other payables are carried at amortised cost
and represent liabilities for goods and services provided to the
Group prior to the end of the financial year that are unpaid and
arise when the Group becomes obliged to make future payments in
respect of the purchase of these goods and services.
3.10.3. Compound instruments
The component parts of compound instruments, which comprised
convertible loan notes issued by the Company and converted into
Ordinary Shares during the year ended 31 December 2014, are
classified separately as financial liabilities and equity in
accordance with the substance of the contractual arrangement. At
the date of issue, the fair value of the liability component is
estimated. For convertible loan notes, this amount is recorded as a
liability on an amortised cost basis using the effective interest
method until extinguished upon conversion or at the instrument's
maturity date. The equity component is determined by deducting the
amount of the liability component on initial measurement from the
fair value of the compound instrument as a whole. This is
recognised and included in equity and is not subsequently
re-measured.
3.10.4. Impairment of financial assets
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset or a group of
financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of
one or more events that occurred after the initial recognition of
the asset (a 'loss event') and that loss event (or events) has an
impact on the estimated future cash flows of the financial asset or
group of financial assets that can be reliably estimated.
For the loans and receivables category, the amount of the loss
is measured as the difference between the asset's carrying amount
and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred) discounted at the
financial asset's original effective interest rate. If, in a
subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after
the impairment was recognised, the reversal of the previously
recognised impairment loss is recognised in the Consolidated income
statement.
3.11. Share-based payments
Equity-settled share-based payments with employees and others
providing similar services, which include share options, warrants
and other similar instruments, are measured at the fair value of
the equity instrument at the grant date. Fair value is measured by
use of an appropriate valuation model, generally Black-Scholes. The
expected life used in the model is adjusted, based on management's
best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
equity instruments that will eventually vest. Where there is no
vesting period, the fair value is expensed immediately.
At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest. The impact of the
revision of the original estimates, if any, is recognised in profit
or loss over the remaining vesting period, with corresponding
adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with other
parties are measured at the fair value of the goods and services
received, except where the fair value cannot be estimated reliably,
in which case they are measured at the fair value of the equity
instruments granted, measured at the date the entity obtains the
goods or the counterparty renders the service.
For cash-settled share-based payments, a liability equal to the
portion of the goods or services received is recognised at the
current fair value determined at each reporting date.
4. SEGMENT REPORTING
IFRS 8, Operating Segments, requires operating segments to be
identified on the basis of internal reports of the Group that are
regularly reviewed by the Group's chief operating decision maker
('CODM'). The CODM of the Group is considered to be the Board. The
Directors consider there to be one business segment, being the
exploration and evaluation of mineral resources, currently
undertaken exclusively in Peru through the Company's subsidiary
undertaking, Gold Hunter. All income and expenditure is allocated
to this activity which accounts for all of the Group's assets and
liabilities as at 31 December 2015 and 31 December 2014 and all of
the Group's results and cash flows for the 12 month periods then
ended.
5. LOSS BEFORE TAXATION
Loss before taxation is stated after (crediting) / charging:
2015 2014 2015 2014
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- --------- ---------
Exchange gain (13) (7) (13) (7)
Staff costs (note 6) 41 95 41 95
Operating lease rentals - 1 - -
Auditor's remuneration (1) 15 25 15 25
-------- -------- --------- ---------
(1) The auditor's remuneration relates to fees payable
for the audit of the Company's accounts. No fees were
payable in either period presented for the audit of
the Company's subsidiary companies, or for non-audit
services.
The Company's Ordinary Shares were re-admitted to trading on AIM
in the preceding financial year on 4 July 2014 following the
acquisition of Gold Hunter and the Company securing new funding of
GBP925,000 (before issue expenses) through the July 2014 Funding
(refer to note 17.3.1).
During 2014 the Company incurred expenditure of GBP345,000 in
connection with the Re-admission (excluding commissions related
directly to the funds raised), principally comprising legal,
geological, reporting accountants, corporate finance and other
related fees and expenses. Of this expenditure, GBP115,000 was
settled by the issue of 7,666,666 new Ordinary Shares in the
Company (note 17) and GBP10,000 represented the fair value of
1,327,784 warrants issued to Allenby (note 18.4.2). As required by
IFRS, this expenditure was allocated pro-rata to the issue of new
Ordinary Shares under the July 2014 Funding, and the re-admission
of the Ordinary Shares in issue immediately preceding the July 2014
Funding. Accordingly, GBP118,000 (of which GBP43,000 was settled
through the issue of new Ordinary Shares or warrants) was expensed
to profit and loss and GBP227,000 (of which GBP82,000 was settled
through the issue of new Ordinary Shares or warrants) was recorded
within the Share Premium account. No expenditure of this nature was
incurred in the current financial year.
6. STAFF NUMBERS AND COSTS
The average number of persons employed during the year, by
category, was as follows:
2015 2014
Group and Company Group and Company
No. No.
------------------- -------------------
Executive Directors 1 1
------------------- -------------------
The costs incurred in respect of this employee were:
2015 2014
Group and Company Group and Company
No. No.
------------------- -------------------
Wages and salaries 41 61
Share based payments (note 18.2) - 34
------------------- -------------------
41 95
------------------- -------------------
Staff costs exclude non-executive Director's emoluments.
Information on the remuneration of the Directors, including
executive and non-executive Directors is provided in note 7.
7. REMUNERATION OF DIRECTORS AND KEY MANAGEMENT
The Directors' remuneration (who are the key management
personnel) in respect of both the Group and the Company is as
follows:
Basic Total Total
Salary Fees 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- --------
Executive Director:
Simon D Hunt(1) 36 5 41 95
Non-executive Directors:
John Molyneux 12 - 12 25
David Paull 12 - 12 25
Andrew Richards 12 - 12 20
72 5 77 165
---------------- -------- -------- --------
(1) Of the amounts reported above, GBP36,000 (2014: GBP36,000)
was in respect of executive fees and GBP5,000 (2014:
GBP5,000) was in respect of additional days. During
the year ended 31 December 2014, an additional GBP20,000
was paid in respect of fees in connection with the
Company's re-admission to AIM in July 2014 and a
further GBP34,000 was recorded for the fair value
of share based payments granted and vested in that
financial year. All amounts were paid to Cornerstone
Capital Limited, a company of which Mr S Hunt is
both a Director and shareholder (refer to note 21.3).
8. Investment revenues
2015 2014 2015 2014
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- --------- ---------
Interest income on loans to subsidiary companies - - 15 3
Other interest income 3 - 3 -
3 - 18 3
---------------- -------- --------- ---------
9. FINANCE COSTS
2015 2014
Group and Company Group and Company
GBP'000 GBP'000
-------------------- -------------------
Interest expense on Convertible loan notes (note 16) - 8
--------------------- -------------------
10. INCOME TAX EXPENSE
10.1. Company
The Income Tax (Amendment) Act 2006 provides that a standard
zero rate of income tax applies to the Company in the Isle of Man
for 2006/07 and subsequent years of assessment. Therefore no
provision for liability to Isle of Man income tax has been included
in these accounts for the Company.
10.2. Group
2015 2014
Group Group
GBP'000 GBP'000
--------- ---------
Loss before tax (210) (476)
Tax credit at the Peru corporation tax rate of 32% applicable to extractive industries 67 152
Tax effect of different tax rates (46) (147)
Tax effect of losses not recognized (21) (5)
--------- ---------
Tax expense - -
--------- ---------
The tax reconciliation has been prepared using a 32% tax rate
(2014: 32%), the corporate income tax rate in Peru applicable to
mining and extractive industries, as this is where the Group's
principal assets are located. As at 31 December 2015, the Group has
unrecognised taxable losses in Peru which may be available for
offset against future taxable profits amounting to approximately
GBP81,000 (31 December 2014: GBP16,000), with a tax value of
approximately GBP26,000 (31 December 2014: GBP5,000). No deferred
tax asset has been recognised for these tax losses as the
requirements of IAS 12, 'Income taxes', have not been met.
11. LOSS PER ORDINARY SHARE
There is no difference between the diluted loss per share and
the basic loss per share presented as the Group and Company are
loss making in all periods presented and instruments that are in
issue which could result in the issue of new Ordinary Shares, being
the warrants disclosed in note 18, are anti-dilutive.
The calculation of basic and diluted loss per share is based on
the following data:
2015 2014 2015 2014
Group Group Company Company
Loss for the year - GBP'000 (210) (476) (144) (460)
Weighted average number of Ordinary Shares 133,195,035 84,800,486 133,195,035 84,800,486
------------ ----------- ------------ -----------
Basic and diluted loss per Ordinary Share - pence (0.16) (0.56) (0.11) (0.54)
------------ ----------- ------------ -----------
12. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS - COMPANY
As at 31 December 2015, the Company has the following direct
investments in subsidiary companies:
Subsidiary undertaking Proportion held Country of incorporation Nature of business
-----------------------------
Green Energy Madagascar sarl 100% Madagascar Dormant
Gold Hunter SAC 100% Peru Minerals exploration and evaluation
Movements in the carrying value of investments in subsidiary
undertakings during the year were as follows:
GBP'000
Cost
At 1 January 2014 2,169
Investment in the period in Gold Hunter SAC 199
At 31 December 2014 and 31 December 2015 2,368
--------
Provision for irrecoverable amounts
At 1 January 2014, 31 December 2014 and 31 December 2015 2,169
--------
Net book value
31 December 2015 199
--------
31 December 2014 199
--------
The investment in Gold Hunter SAC during the year ended 31
December 2014 was satisfied by the issue of 13,277,838 new Ordinary
Shares in the Company, with a fair value on the date of issue of
GBP199,000.
The Company's investment at cost in Green Energy Madagascar sarl
is GBP2,169,000. The investment is fully provided against in all
periods presented.
Further details on risks and uncertainties regarding the
recoverability of the Investment in subsidiary undertakings is
provided in note 3.2.1.3.
13. Exploration and evaluation assets - group
Intangible assets
GBP'000
------------------
COST AND NET BOOK VALUE
At 1 January 2014 -
Additions 353
At 31 December 2014 353
Additions 131
Foreign exchange gain 11
At 31 December 2015 495
------------------
Exploration and evaluation assets comprise the Group's initial
investments to participate in exploration and evaluation projects,
including the Pampamali Project and the Prospero Project, related
legal and other expenditure, and expenditure incurred by the Group
in the initial and ongoing exploration and evaluation of the
resource at these projects. Initial exploration and evaluation
expenditure includes, inter alia, the initial geological assessment
and environmental impact assessment of the project, geological
analysis, drilling, trenching, sample analysis and similar
expenditure. Ongoing exploration and evaluation expenditure is
expenditure which is directly attributable to the exploration and
evaluation of the Group's license sites, such as geological
analysis, drilling, trenching, sample analysis and similar
expenditure.
Expenditure incurred in the Group's general administrative
activities in Peru is expensed to profit and loss as incurred.
Further details on risks and uncertainties regarding the
recoverability of the Exploration and evaluation assets is provided
in note 3.2.1.3.
14. Amounts due from subsidiary UNDERTAKINGS - COMPANY
'Amounts due from subsidiary undertakings' represents amounts
due to the Company from Gold Hunter. The amounts due are unsecured,
bear interest at 5% per annum, and are repayable by 31 December
2019 (31 December 2014: repayable by 31 December 2016). Movements
in the carrying value during the period are as follows:
GBP'000
--------
At 1 January 2014 -
Advances made in the year 159
Interest income 3
Foreign exchange gain 10
At 31 December 2014 172
Advances made in the year 177
Interest income 15
Foreign exchange gain 13
--------
At 31 December 2015 377
--------
Further details on risks and uncertainties regarding the
recoverability of the Amounts due from subsidiary undertakings is
provided in note 3.2.1.3.
15. TRADE AND OTHER PAYABLES
2015 2014 2015 2014
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------
Trade payables 6 36 1 17
Other payables 1 8 - 8
Accrued expenses 20 36 20 36
--------- --------- --------- ---------
27 80 21 61
--------- --------- --------- ---------
The amounts reported above principally comprise amounts
outstanding for recurring expenditure of the Group, such as audit,
accounting and company secretarial fees. The amounts are stated at
their invoiced value, or amount payable based on the Directors
assessment of obligations incurred but not yet invoiced.
16. CONVERTIBLE LOAN NOTES
16.1. Carrying value
The following summarises the movements in the convertible loan
notes liability and equity components:
Liability Equity Total
GBP'000 GBP'000 GBP'000
---------- -------- --------
At 1 January 2014 26 5 31
Initial measurement 185 5 190
Interest charge 8 - 8
Interest transferred to accruals upon conversion (4) - (4)
Conversion of loan notes (215) (10) (225)
---------- -------- --------
At 31 December 2014 and 31 December 2015 - - -
---------- -------- --------
16.2. Convertible Loan Notes in Issue
During the year ended 31 December 2014, the Company had three
convertible loan notes in issue with Marine, the principal terms of
which are summarised below. The convertible loan notes were all
converted into Ordinary Shares of the Company on Re-admission
resulting in the issue of 15,223,601 new Ordinary Shares (refer to
note 17.3).
16.2.1. The First Loan Note
In January 2013, the Company secured the placing of The First
Loan Note raising gross proceeds of GBP26,000 before expenses. The
First Loan Note, as amended, carried no interest charge, was
unsecured and repayable by 31 December 2014 and was convertible (in
part or in full) into Ordinary Shares in the Company at the holders
request at any time and at a conversion price equal to the par
value per Ordinary Share.
Upon Re-admission the First Loan Note was converted in full into
2,586,800 new Ordinary Shares.
16.2.2. The Second Loan Note
In March 2014 the Company issued The Second Loan Note with a
face value of GBP100,000, which was drawn down in full during the
year ended 31 December 2014. The Second Loan Note, as amended,
carried interest at the rate of 8% per annum (such interest to be
accumulated and paid in cash upon conversion or repayment of The
Second Loan Note), was unsecured and repayable, if not converted,
on Re-admission. The Second Loan note was convertible in whole or
in part at the note holder's request into Ordinary Shares at the
price at which new Ordinary Shares were issued pursuant to the
fundraise completed upon Re-admission.
Upon Re-admission the Second Loan Note was converted into
6,666,667 new Ordinary Shares. In accordance with the terms of the
Second Loan Note, upon conversion, the Company issued the note
holder with warrants over one new Ordinary Share for every 1.25 new
Ordinary Shares issued on conversion of The Second Loan Note,
exercisable at a price per warrant equal to the price at which new
funds were raised on AIM upon Re-admission plus 15%, for three
years from the date of conversion of the New Loan Notes.
16.2.3. The Third Loan Note
In March 2014 the Company issued The Third Loan Note with a face
value of $150,000, which was drawn down in full during the year
ended 31 December 2014. Other than for the face value of the
instrument, The Third Loan Note, as amended, has the same terms as
The Second Loan Note.
Upon Re-admission $150,000 of the Third Loan Note was converted
into 5,970,134 new Ordinary Shares at an agreed exchange rate of
$1.675 per GBP1.0. Warrants were also issued under the same basis
as for The Second Loan Note.
16.3. Measurement and conversion
While in legal form the Loan Notes were liabilities of the
Group, the Loan Notes included components with liability and equity
features as defined under IFRS. IAS 32, 'Financial Instruments:
Presentation', required the Group to identify the equity and
liability component parts of the instruments and assign a value to
each. In each of the Loan Notes the material components were
identified as the host debt contract and a holder call option to
convert to Ordinary Shares. The fair value of the host debt
component was determined for each Loan Note based on the present
value of the contractual stream of future cash flows (being the
redemption amount and interest due where applicable) discounted at
the market rate of interest that would have applied to an
instrument of comparable credit quality with substantially the same
cash flows, on the same terms, but without the conversion feature.
The relevant market interest rate applicable to the Company was
estimated at 25%. The balance of the gross proceeds received was
established as the equity component of the Loan Notes. Where
applicable, issue expenses were allocated pro-rata to the initial
carrying value of each component. The liability component was
subsequently measured at amortised cost using the effective
interest rate method and an effective interest rate of between 25%
and 31.58%. The equity component was not re-measured.
Upon conversion, the carrying value of the Loan Notes liability
at that date (which equated to the face value of the Loan Notes)
was transferred to the share capital and share premium accounts.
The balance on the Convertible loan note reserve was reclassified
to accumulated losses.
17. SHARE CAPITAL, SHARE PREMIUM AND RESERVES
There have been no changes to the Company's share capital during
the year, nor have any new Ordinary Shares been issued. Details on
changes during the year ended 31 December 2014 are included
below.
17.1. Share consolidation
On 30 June 2014 the Company completed the Share Consolidation
pursuant to which the Company's:
1. 377,296,778 issued Ordinary Shares of GBP0.001 each at that
date were consolidated into 37,729,678 Ordinary Shares of GBP0.01
each on a one for ten basis; and
2. 93,164,834 issued Deferred Shares of GBP0.009 each at that
date were consolidated into 9,316,483 Deferred Shares of GBP0.09
each on a one for ten basis.
17.2. Authorised share capital and rights attaching to shares
The authorised share capital of the Company is comprised of the
following:
At 31 December 2014
and 31 December 2015
------------------------
No. GBP
------------ ----------
Ordinary Shares of GBP0.01 each 300,000,000 3,000,000
Deferred Shares of GBP0.09 each 20,000,000 1,800,000
------------ ----------
320,000,000 4,800,000
------------ ----------
The Company's Ordinary Shares carry no right to fixed income.
Each Ordinary Share carries the right to one vote at the general
meetings of the Company. The Company's Deferred Shares do not carry
voting rights or a right to receive a dividend. The holders of
Deferred Shares do not have the right to receive notice of any
general meeting of the Company, nor have any right to attend, speak
or vote at any such meeting. In addition, holders of Deferred
Shares will only be entitled to a payment on a return of capital or
on a winding up of the Company after each of the holders of
Ordinary Shares has received a payment of GBP100,000 in respect of
each Ordinary Share. Accordingly, the Deferred Shares have no
economic value. The Deferred Shares are not admitted to trading on
any stock exchange.
17.3. Shares in issue, Share capital and Share premium
The table below presents a reconciliation of the Company's
Ordinary Shares and Deferred Shares in issue and the Company's
Share capital and Share premium accounts, adjusted for the share
consolidation:
Number of Deferred Shares Share
Number of Ordinary Shares Issued and Fully Paid capital Share premium
Issued and Fully Paid GBP'000 GBP'000
Balance at 1 December 2014 37,729,678 9,316,483 1,216 5,187
New Ordinary Shares
issued in July 2014:
Subscription 36,408,467 - 364 182
Placing 22,472,133 - 225 112
Conversion of the Loan
Notes 15,223,601 - 152 63
Marine Mandate 5,333,333 - 53 27
Commission and other
Re-admission fees
settled in Ordinary
Shares 2,749,985 - 27 15
Acquisition of Gold
Hunter 13,277,838 - 133 66
Cost of capital raising,
net of share based
payments credits - - - (246)
Balance at 31 December
2014 and 31 December 2015 133,195,035 9,316,483 2,170 5,406
-------------------------- -------------------------- --------- --------------
17.3.1. The Subscription and Placing
On 4 July 2014 the Company's Ordinary Shares were re-admitted to
trading on AIM. On that date the Company completed the Subscription
of 36,408,467 new Ordinary Shares at GBP0.015 each and the Placing
of 22,472,133 new Ordinary Shares at GBP0.015 each raising gross
proceeds before issue expenses of GBP883,000. At the same time, the
Company, by agreement with Marine, completed the final drawdown on
the Third Loan Note providing additional funds of GBP42,000
bringing the total for the July 2014 Funding to GBP925,000 of new
monies. Total fees and expenses incurred in connection with the
Re-admission and the July 2014 Funding, including fees due to
Marine under the Marine Mandate Agreement (refer below) were
approximately GBP479,000 of which GBP121,000 was settled through
the issue of 8,083,333 new Ordinary Shares, GBP112,000 represents
the fair value of warrants issued to Allenby and Marine, and
GBP246,000 was settled in currency. The total fees and expenses
were allocated directly to equity or profit and loss where
appropriate, with common fees and expenses allocated pro-rata to
equity and profit and loss as more fully described in note 5.
17.3.2. Conversion of Loan Notes
On 4 July 2014, at Marine's election and in accordance with the
terms of the Loan Notes (refer to note 16):
1. the First Loan Note, the Second Loan Note and the Third Loan
Note were converted into new Ordinary Shares in the Company
resulting in the issue of 15,223,601 new Ordinary Shares to
extinguish the outstanding amounts on the Loan Notes, excluding
accrued interest, of GBP215,000 at that date; and
2. the Company issued Marine with warrants over 7,880,596 new
Ordinary Shares at a price of GBP0.01725 per Ordinary Share (being
the price equal to the price at which new funds were raised under
the Subscription and Placing plus 15%) for a period of three
years.
17.3.3. Marine Mandate
On 4 December 2012, the Company had entered into an agreement
with Marine under which the Company agreed (i) to pay a fee of
GBP50,000 to Marine, and (ii) to issue 2,000,000 Ordinary Shares
(as adjusted for the Share Consolidation) to Marine, if Marine
introduced a project or transaction to the Company which resulted
in:
a) the acquisition by the Company of an asset considered by the
Board to be valued at GBP500,000 or more; or
b) a reverse takeover by the Company (as defined in Rule 14 of the AIM Rules).
Given the terms of the acquisition of Gold Hunter, the Company's
obligations under this agreement with Marine were triggered at
Re-admission. The Company issued an aggregate of 5,333,333 Ordinary
Shares to Marine at the Subscription Price in settlement of such
obligations being (1) 2,000,000 new Ordinary Shares contractually
due and (2) 3,333,333 new Ordinary Shares through mutual agreement
with Marine to pay the GBP50,000 referred to above in Ordinary
Shares rather than in cash.
17.3.4. Acquisition of Gold Hunter
On 4 July 2014 the Company acquired the entire issued share
capital of Gold Hunter SAC through the issue of 13,277,838 new
Ordinary Shares in the Company, with a fair value on the date of
issue of GBP199,000. Refer to note 12 and 20.
17.4. Share Premium reserve
The Share Premium reserve represents the premium over the
nominal value of Ordinary Shares raised on the issue of Ordinary
Shares by the Company, less expenses incurred directly in
connection with the issue of new Ordinary Shares.
17.5. Currency translation reserve
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's non GBP functional
currency entities are translated at exchange rates prevailing at
the balance sheet date. Income and expense items are translated at
the average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the
exchange rates at the date of the transactions are used. Exchange
differences arising are taken to the 'Currency translation
reserve'.
18. SHARE-BASED PAYMENTS
18.1. Equity-settled share options and warrants
The Company and Group have two share option schemes for
Directors and executives of the Group. Options and warrants over
Ordinary Shares in the Company are also issued to Directors for
services rendered and certain service providers. These instruments
are not granted under the terms of the Share Plan. There are no
share options in issue as at 31 December 2014 and 31 December
2015.
18.2. Charge in the period
The total charge recorded in profit and loss for share based
payments in the year ended 31 December 2015 was GBPnil (31 December
2014: GBP148,000) of which GBPnil (31 December 2014: GBP74,000)
arises in respect of the Directors Warrants (refer to note 18.4.3
below), GBPnil (31 December 2014: GBP6,000) arises in respect of
the Allenby Warrants and the pro-rata allocation of the Allenby
Re-admission Warrants (refer to note 18.4.2 below), GBPnil (31
December 2014: GBP29,000) arises in respect of the Marine
Consultancy Warrants, and GBPnil (31 December 2014: GBP39,000)
arises in respect of the allocation to profit and loss of expenses
incurred in relation to the Re-Admission which were settled in
Ordinary Shares. A further GBPnil was charged to the Share premium
account (31 December 2014: GBP185,000, representing GBP109,000 for
the fair value of the Underwriting Warrants, the Marine Convertible
Warrants and the pro-rata allocation of the Allenby Re-admission
Warrants, and GBP76,000 for the allocation to profit and loss of
expenses incurred in relation to the Re-admission which were
settled in Ordinary Shares.
18.3. Summary of share options and warrants accounted for as share based payments
Details of the number of Ordinary Shares that may be issued to
satisfy warrants which are accounted for as share based payments
are as follows:
Weighted average exercise price
No.(1) GBp
------------- --------------------------------
At 1 January 2014 10,100,000 4.822
Issued in the period 32,937,224 1.725
Terminated in the period (10,100,000) 4.822
At 31 December 2014 and 31 December 2015(2) 32,937,224 1.725
------------- --------------------------------
(1) Where applicable, the number of Ordinary Shares that
may be issued to satisfy warrants has been adjusted
for the Share Consolidation (refer to note 17.1).
(2) As at 31 December 2014 and 31 December 2015, all
warrants are exercisable at the price of GBP0.01725
per Ordinary Share until 3 July 2017
18.4. Warrants issued during the year ended 31 December 2014
18.4.1. Warrants issued to Marine
On 4 December 2012, the Company entered into an underwriting
agreement with Marine in accordance with which, on 28 February
2013, the Company issued Marine with the Underwriting Warrants,
being 6,200,000 warrants (as adjusted for the Share Consolidation)
over new Ordinary Shares. Each Underwriting Warrant conferred the
right (but not the obligation) to subscribe for one new Ordinary
Share prior to 8 January 2018 at a price of GBP0.05 per Ordinary
Share (as adjusted for the Share Consolidation).
Pursuant to an agreement dated 6 June 2014, and conditional upon
Re-admission, the Company agreed with Marine that with effect from
Re-admission the Underwriting Warrants would be cancelled and
replaced with 6,200,000 warrants over New Ordinary Shares
exercisable at a price of GBP0.01725 per Ordinary Share (being the
price equal to the price at which new funds were raised under the
Subscription and Placing plus 15%) for a period of three years from
Re-admission.
In addition, in June 2014, the Company entered into an agreement
with Marine to (1) procure the services of Mr Peter Lalor to
conduct due diligence on new projects and acquisitions, (2) review
the Company's exploration and production programs, (3) assist the
Board in all matters relating to exploration for and production of
and marketing of minerals designated by the Company, (4) provide
the Board with the benefit of his knowledge of the mining industry
and (5) evaluate the performance of Global Pearl (and the
Management Team), including monitoring when payment milestones have
been achieved and when payments should be made as against the
agreed budget. In consideration for providing these services to the
Company, and following Re-admission, the Company granted Marine
4,000,000 warrants (the 'Marine Consultancy Warrants') to subscribe
for new Ordinary Shares at a price of GBP0.01725 per Ordinary Share
(being the price equal to the price at which new funds were raised
under the Subscription and Placing plus 15%) for a period of three
years.
Further, and in connection with the conversion of the Loan Notes
(refer to note 16), the Company issued Marine with warrants over
10,109,440 new Ordinary Shares at a price of GBP0.01725 per
Ordinary Share (being the price equal to the price at which new
funds were raised under the Subscription and Placing plus 15%) for
a period of three years (the 'Marine Convertible Warrants').
18.4.2. Warrants issued to Allenby
On 25 February 2013 the Company issued Allenby the Allenby
Warrants, being 300,000 warrants (as adjusted for the Share
Consolidation) over new Ordinary Shares, as part of the fee
agreement between the Company and Allenby. The Allenby Warrants had
the same terms as the Underwriting Warrants.
Pursuant to an agreement dated 6 June 2014, and conditional upon
Re-admission, the Company agreed with Allenby that with effect from
Re-admission the Allenby Warrants would be cancelled and replaced
with 300,000 warrants over New Ordinary Shares exercisable at a
price of GBP0.01725 per Ordinary Share (being the price equal to
the price at which new funds were raised under the Subscription and
Placing plus 15%) for a period of three years from
Re-admission.
In addition to the above warrants, the Company issued Allenby
with warrants over 1,327,784 new Ordinary Shares, being equal to 1%
of the Company's issued Ordinary Share capital immediately
following Re-admission, exercisable at a price of GBP0.01725 per
Ordinary Share (being the price equal to the price at which new
funds were raised under the Subscription and Placing plus 15%) for
a period of three years (the 'Allenby Re-admission Warrants').
18.4.3. Directors' Warrants
On 25 February 2013 the Company issued 3,600,000 warrants (as
adjusted for the Share Consolidation) to the Directors (the
'Directors Warrants'), as follows:
a) Simon Hunt (through Cornerstone Capital Limited) - 2,000,000 warrants;
b) David Paull - 800,000 warrants; and
c) John Molyneux - 800,000 warrants.
Each Directors Warrant conferred the right (but not the
obligation) to subscribe for one Ordinary Share prior to 28
February 2018 at a price of GBP0.045 (as adjusted for the Share
Consolidation). Half of the Directors Warrants could only be
exercised if, in addition, (i) the Company had first completed
either a reverse takeover (as defined in Rule 14 of the AIM Rules)
or acquired an asset valued in excess of GBP500,000 (at the date of
the acquisition), and (ii) the 30-day average VWAP of the Ordinary
Shares (as calculated in accordance with the warrant instrument)
was equal to or in excess of GBP0.0625 pence per share at the time
of exercise (as adjusted for the Share Consolidation).
Pursuant to an agreement dated 6 June 2014, and conditional upon
Re-admission, the Company agreed with each of the Directors that
with effect from Re-admission the Directors Warrants would be
cancelled and replaced with 9,000,000 warrants over new Ordinary
Shares exercisable at a price of GBP0.01725 per Ordinary Share
(being the price equal to the price at which new funds were raised
under the Subscription and Placing plus 15%) for a period of three
years from Re-admission (the 'New Directors Warrants'), allocated
as follows:
a) Simon Hunt (through Cornerstone Capital Limited) - 5,000,000 warrants;
b) David Paull - 2,000,000 warrants; and
c) John Molyneux - 2,000,000 warrants.
In addition, 2,000,000 warrants were issued to Andrew Richards
with effect from Re-admission, with the same terms as the New
Directors Warrants.
18.5. Fair value
The cancellation and replacement of the Underwriting Warrants,
the Allenby Warrants and the Director Warrants was accounted for in
the year ended 31 December 2014 as a modification to the terms of
those warrant instruments. Accordingly, the fair value of the
modified instruments was determined at the date of effective
modification (being the Re-admission date) and compared to the fair
value, at that date, of the instruments had they not been modified.
The difference was expensed immediately to profit and loss for the
Allenby Warrants and the Director Warrants, and to Share Premium
for the Underwriting Warrants. This reflects the nature of the
services provided and the fact that all service vesting conditions
had been met.
The fair value of the Marine Consultancy Warrants, the Marine
Convertible Warrants and the Allenby Re-admission Warrants was
determined at the date of grant (i.e. the Re-admission date) and
expensed immediately to the Share Premium account for the Marine
Convertible Warrants, to profit and loss account for the Marine
Consultancy Warrants and pro rata allocated between profit and loss
and Share Premium for the Allenby Re-admission Warrants. This
reflects the nature of the services provided and the fact that all
service vesting conditions had been met.
The fair value of the warrants granted, or modified, in the year
ended 31 December 2014, and the fair value of the Director's
Warrants immediately preceding the change under the original
conditions, has been determined using a Black-Scholes valuation
model with the following inputs:
Warrants granted or modified Directors' Warrants under
original conditions
----------------------------- --------------------------------
Weighted average share price - GBp 1.60 5.00
Weighted average exercise price - GBp 1.73 1.60
Expected volatility - %(2) 70.9 89.1
Expected life - years(1) 3 1.65
Risk free rate - % 1.49 0.91
Expected dividend yield - % - -
----------------------------- --------------------------------
(1) Where relevant, the expected life used in the model has been adjusted based on management's
best estimate for the effects of non-transferability, exercise restrictions and behavioural
considerations.
(2) The volatility assumption has been determined based on the historical volatility of the Company's
Ordinary Share price, where applicable adjusted for periods of abnormal volatility.
19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
19.1. Financial risk management objectives
The Company and Group manage the risks arising from their
operations, and financial instruments at Board level. The Board has
overall responsibility for the establishment and oversight of the
risk management framework and to ensure that the Company and Group
have adequate policies, procedures and controls to manage
successfully the financial risks that they face.
While the Group does not have a written policy relating to risk
management of the risks arising from any financial instruments
held, the close involvement of the Executive Chairman in the day to
day operations of the Group ensures that risks are monitored and
controlled in an appropriate manner for the size and complexity of
the Group. Financial instruments are not traded, nor are
speculative positions taken. The principal risks that the Group
faces as at 31 December 2015 and 31 December 2014 with an impact on
financial instruments are summarised below.
19.2. Risk exposure
The principal risks arising from financial instruments that
affect the Group and Company are credit risk on its balances held
at bank and liquidity risk. The Group and Company have no
significant exposure to market risk, where market risk is the risk
that changes in interest rates, foreign exchange rates, equity
prices and other rates, prices, volatilities, correlations or other
market conditions, will have an adverse impact on the Group and
Company's financial position or results.
19.2.1. Credit risk
The Group and the Company's principal financial assets are bank
balances and cash, and recoverable VAT assets. In addition the
Company has receivable balances from its subsidiary companies. The
Group and Company has two significant concentrations of credit risk
being (1) cash balances held with its bank and, (2) recoverable VAT
assets from Her Majesty's Revenue and Customs in the United
Kingdom. Credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by
international credit-rating agencies. Credit risk on VAT
recoverable assets is limited because of the credit standing of the
counterparty. The Company has further concentration of credit risk
on its balances with its subsidiary companies - the Company does
not hedge this risk which is considered limited as the Company
controls its subsidiaries.
19.2.2. Liquidity risk and managing capital
Liquidity risk is the risk that the Company and Group will not
be able to meet their financial obligations as they fall due. The
Company raises funds as and when required on the basis of forecast
expenditure and inflows. When funding is required, the Company
balances the costs and benefits of equity and debt financing. When
funds are received they are deposited with banks of high standing
in order to obtain competitive market interest rates. The Company
aims to optimise the Group's capital structure by holding an
appropriate level of debt relative to equity in order to maximise
shareholder value. The appropriate level of debt is set with
reference to a number of factors and financial ratios including
expected operating and capital expenditure cash flows, contingent
liabilities and the level of unrestricted cash as well as the
general economic environment. The Company aims to control its
capital structure by issuing new Ordinary Shares and raising debt
finance to the extent that it is possible on commercially
acceptable terms. The Group's developing nature and the economic
conditions prevailing are restricting the Company's ability to
raise traditional bank debt finance and exert any significant
degree of control over its gearing ratio. As a result, the Company
has been financed using a combination of equity and debt
instruments that are convertible into equity.
As at 31 December 2015, the Group and Company have limited
liquidity risk with net current assets in excess of the current and
short term forecast cash requirements. However, this situation will
change in the event that future expenditure is not covered by the
proceeds of future fund raisings. The Group and Company's
liabilities are due as follows:
Group Group Company Company
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------
1 month 7 77 1 58
2 to 3 months 1 - 1 -
3 to 6 months 19 3 19 3
-------- -------- -------- --------
27 80 21 61
-------- -------- -------- --------
Note 3.2.1.1 provides further information on the planned future
liquidity and the Going Concern basis of the Company and Group.
19.2.3. Currency risk
On its on-going trading activities the Company and Group
undertake a number of transactions in currencies other than GBP. At
the end of both periods presented, all of the Group's material
financial assets and liabilities are denominated in the functional
currency of the relevant group entity and accordingly the Group has
no material exposure to currency risk. The Company's balance
receivable from subsidiary undertakings is denominated in US$ and
accordingly the Company is subject to currency risk on fluctuations
in the US$ to GBP exchange rate on this balance. As at 31 December
2015, a 10% increase / decrease in the US$ to GBP exchange rate
would result in a foreign exchange loss / gain of GBP34,000 (31
December 2014: GBP16,000) and a corresponding decrease / increase
in equity of GBP34,000 (31 December 2014: GBP16,000).
19.2.4. Interest rate risk
Interest rate risk arises when interest rates move. Neither the
Group nor the Company have any interest bearing borrowings (refer
to note 16 for details on the Company's convertible loan notes
outstanding during the prior year). The Group and Company hold cash
balances on deposit but do not hedge or fix these rates given the
scale and nature of the Group and the Company's operations. All
amounts are carried at amortised cost, and, other than cash in
hand, are interest bearing assets, with interest rates arranged
with counterparty financial institutions based on commercial
negotiations, reflecting the term, currency and amount of each
deposit. As at 31 December 2015 and 31 December 2014 all bank
balances were held in current accounts or deposit accounts with a
maturity of less than one month. Interest income or expense and the
related changes in interest rates are accordingly insignificant to
the carrying value of the Company and Group's financial instruments
and interest rate risk is not material to the Company or Group.
19.3. Categories and classes of financial instruments
--
19.3.1. Financial assets
The Group's financial assets comprise the amounts disclosed in
the Statement of Financial Position as 'Cash and cash equivalents'
and 'Other receivables'. The Company has further financial assets
in the balance of 'Amounts due from subsidiary undertakings'. Based
on the application of the accounting policies with respect to
financial instruments, these financial assets are accounted for as
loans and receivables. The financial assets are considered one
class of financial instrument based on the risk profile to which
they expose the Company and Group, being credit risk. The maximum
exposure to credit risk is the carrying value of the class. Further
details are provided in note 19.2.1. None of the Group's and
Company's financial assets are past due, or impaired, nor has the
Group or Company provided against any financial assets.
19.3.2. Financial liabilities
The Company's and Group's financial liabilities comprise the
amounts disclosed in the Statement of Financial Position as 'Trade
and other payables'. Based on the application of the accounting
policies with respect to financial instruments, these financial
liabilities are accounted for as financial liabilities at amortised
cost.
'Trade and other payable' are considered one class of financial
instrument based on the risk profile to which they expose the
Company and Group, being liquidity risk. Further details are
provided in note 19.2.2.
19.3.3. Fair value of financial assets and financial liabilities
The carrying amount of the Company's and Group's financial
instruments approximates to their fair value due to their short
maturity.
20. ACQUISITION OF GOLD HUNTER IN THE YEARED 31 DECEMBER 2014
On 4 July 2014 and pursuant to a sale and purchase agreement
dated 2 June 2014 and Re-admission, the Group acquired 100 per cent
of the issued share capital of Gold Hunter S.A.C.. Gold Hunter is
registered and operates in Peru, and was acquired to provide the
Group with access to the Pampamali Project through the Farm In
agreement between Gold Hunter, Compania Minera Pampamali ('CMP'),
H&P Contratistas Mineros S.A.C. ('H&P), American Gold
S.A.C. and Sociedad Minera de Responsibilidad Limitada Desiree
(collectively the 'Farm In agreement parties'). Gold Hunter was
established by Global Pearl for the sole purpose of entering into
the Farm In agreement and as at 4 July 2014 had no assets or
liabilities, other than the right to participate in the Pampamali
project through the Farm In agreement (refer below). The
consideration paid for the acquisition of Gold Hunter was
13,277,838 new Ordinary Shares in the Company which, at the
acquisition date, had a fair value of GBP199,000 based on the
market price of the Company's Ordinary Shares on Re-admission,
being a Level 1 fair value measurement in the IFRS 13 fair value
hierarchy. For Group purposes, this fair value was reported within
Exploration and Evaluation Assets. There were no direct cash flows
pertaining to the acquisition of Gold Hunter. Gold Hunter
contributed GBP13,000 to the Group's loss in the year ended 31
December 2014. Had the acquisition been completed on 1 January
2014, the contribution would have been unchanged.
The Farm In agreement
The Farm In agreement provides Gold Hunter with the right, but
not the obligation, to obtain an interest in the Pampamali Project.
The Farm in agreement was renegotiated by the Group in March 2015.
Under the terms of the initial Farm In agreement and in the first
year, Gold Hunter was granted the right to earn a 20 per cent.
interest in the mining concessions comprising the Pampamali
Project. To exercise this option, Gold Hunter was required to pay
$40,000 to CMP and H&P (which was paid during the year ended 31
December 2014) and incur aggregate expenditure of not less than
$150,000 during the first year of operations, to include at least
one thousand metres of drilling. Due to delays in completing the
necessary environmental impact assessment, reflecting delays in
obtaining the necessary community approvals to permit access by the
Group, the drilling activities have not yet started. Due to this,
and other factors, the Farm In agreement was amended in March 2015.
Under the Farm In agreement (as
amended), Gold Hunter has the option to acquire a 51% in a new
company ('HOLDCO') into which the mining concessions comprising the
Pampamali Project would be transferred, in one further step by
paying CMP and H&P $90,000 in aggregate and agreeing to take on
the obligation to pay $34,000 by way of outstanding 2014 tenement
costs. This is in addition to showing that it has incurred at least
$150,000 in expenditure on the project but without the commitment
for one thousand metres of drilling. Once Gold Hunter owns 51% of
HOLDCO it has the option to acquire an additional 49% on completion
of a feasibility study and a payment of $1,500,000 to CMP and
H&P as before.
Gold Hunter will be the operator at the Pampamali Project
concessions during the period covered by the Farm In agreement (as
amended) afterwards so long as it is the largest shareholder in
HOLDCO. If Gold Hunter, CMP or H&P wishes to dispose of an
interest in the JV Agreement or shares in HOLDCO, it must first
give the others a right to purchase before offering such interest
or shares to any third party. Should CMP's, Gold Hunter's or
H&P's shareholding in HOLDCO fall below five per cent., that
shareholder shall be deemed to have transferred its shares in
HOLDCO to the other shareholders pro rata to their respective
holdings and in return it will receive a net smelter royalty. The
royalty is for one per cent. of gross proceeds received from the
sale of minerals less any deductions for the costs associated with
further processing of those minerals. In the event that more than
one party becomes entitled to the royalty, the aggregate amount of
the royalty will remain at one per cent. and it will be shared
between those parties pro rata to their respective shareholdings in
HOLDCO before they transferred them.
Gold Hunter exercised its option to acquire the 51% of HOLDCO on
30 June 2015 and the $34,000 payment for outstanding tenement costs
was made during the year ended 31 December 2015, and is included
within Exploration and Evaluation Assets of the Group. Despite all
efforts by the Group, the vendors of the Pampamali Project have
not, as of the date of this report, complied with their obligations
and in particular, the title for the Pampamali tenements has not as
yet been transferred to HOLDCO, nor has HOLDCO been incorporated.
No funds are due to the vendors until such transfer has taken
place. The Group has now initiated formal arbitration proceedings
through the American Chamber of Commerce in Peru to resolve the
matter while continuing to attempt a resolution directly with the
vendors - refer to note 23.1.
21. RELATED PARTIES
21.1. Subsidiary undertakings
Details of the Company's subsidiary undertaking are provided in
note 12. Details of the advances made to subsidiary undertakings
are provided in note 14. Details of interest charged to subsidiary
undertakings are provided in notes 8 and 14.
21.2. Remuneration of key management personnel
--
Remuneration of key management personnel of the Company and
Group, which comprise the Directors of the Company, is provided in
note 7. Details of warrants issued to the Directors' are provided
in note 18.
21.3. Other transactions with related parties
Trading transactions
The Company paid GBP41,000 (2014: GBP61,000), by way of salary
and fees for Mr S Hunt's services under an agreement with
Cornerstone Capital Limited ('Cornerstone'), a company in which Mr
S Hunt is a shareholder and a director. The contract is based on
normal commercial terms. As at 31 December 2015, the Company owed
Cornerstone Capital Limited GBPnil (2014: GBP4,000).
The Company paid GBP3,000 (2014: GBP8,000) to ARC Resources
(Pty) Ltd for geological services rendered in connection with the
Pampamali project, and GBPnil (2014: GBP6,000) for the
re-imbursement of expense incurred. ARC Resources (Pty) Ltd is a
company in which Mr A Richards is a shareholder and director. The
transaction was on normal commercial terms. The balance due to ARC
Resources (Pty) Ltd at 31 December 2015 was GBPnil (31 December
2014: GBP2,000).
Loans and Subscription of Ordinary Shares
There are no outstanding loans granted or guarantees provided by
the Company to or for the benefit of any of the Directors, nor are
there any outstanding loans or guarantees provided by the Directors
to or for the benefit of the Company.
During the year ended 31 December 2014 and as more fully
described in notes 16 and 17, Marine subscribed for GBP190,000 of
Convertible Loan Notes under the Second and Third Loan Notes.
Collectively with the First Loan Note, GBP215,000 outstanding under
the Loan Notes were converted into 15,223,601 new Ordinary Shares
on 4 July 2014. As at 31 December 2014 and 31 December 2015,
GBP3,000 is outstanding to Marine in respect of interest due in
cash on the Loan Notes. In addition to the conversion of the Loan
Notes, Marine subscribed for an additional 1,000,000 new Ordinary
Shares for GBP15,000, and the Diana Lalor Superannuation Fund
subscribed for an additional 666,667 new Ordinary Shares for
GBP10,000 in the July 2014 Subscription. Diana Lalor is a close
family member of Peter Lalor who controls Marine. Further, the
Company issued the Marine Consultancy Warrants and the Marine
Convertible Warrants, as well as modifying the terms of the
Underwriting Warrants, with a collective fair value of GBP115,000
(refer to note 18).
In the year ended 31 December 2014, in July 2014 and as part of
the Subscription, Mr Simon Hunt, Mr J Molyneux, Mr D Paull and Mr A
Richards subscribed for respectively 433,333, 22,500,000, 1,278,599
and 350,000 new Ordinary Shares.
22. ULTIMATE CONTROLLING PARTY
As at the date of this report, the Directors are of the opinion
that there is no ultimate controlling party of the Company.
23. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
23.1. Initiation of arbitration proceedings in Peru
--
On 2 March 2016 the Company announced that that it had not yet
reached agreement with the Vendors following the Company legally
exercising the Option because the Vendors continued to obstruct the
legal process in Peru. As a consequence the Company commenced
formal arbitration proceedings through the American Chamber of
Commerce of Peru (the 'Arbitration'). In addition to the
Arbitration the Company has continued to negotiate with the Vendors
to try to reach a settlement and thus complete the legal
formalities of the transfer of the title of the Pampamali tenements
to HOLDCO.
23.2. New convertible loan facility
On 14 June 2016 the Company agreed a new financing facility with
Marine to provide an interim funding facility to the Company. The
Facility comes in two parts. The terms of the first part of the
Facility (the 'Initial Facility') are as follows:
-- an initial loan amount of GBP50,000;
-- interest payable at 8% per annum on the amount of the Initial Facility;
-- it is unsecured; and
-- the Initial Facility is for a term of 3 months.
The Initial Facility was drawn in full on 22 June 2016.
Subject to the approval by shareholders of certain resolutions
relating to the share capital of the Company at its forthcoming
annual general meeting, details of which will be published and sent
to shareholders during June 2016, then the second part of the
Facility will be entered into on the day following the annual
general meeting. The terms of the second part of the Facility are
as follows:
-- a total loan amount of GBP100,000, including a rolling over of the Initial Facility;
-- interest payable at 8% per annum on the full amount of the Facility;
-- it is unsecured;
-- for a term of 2 years;
-- the Facility is convertible into new ordinary shares in the
Company at a price of 0.157 pence per ordinary share (being a 15%
discount to the closing mid-market price on 14 June 2016) at any
time up until maturity; and
-- warrants to be issued on the basis of one warrant for every
two ordinary shares issued on conversion. The warrants will entitle
Marine to subscribe for new ordinary shares in the Company at a
price of 0.157 pence per ordinary share during the 3-years
following conversion.
'2014 Financial Statements' the Group and Company audited financial statements for the year ended 31 December
2014;
'AIM' the market of that name operated by the London Stock Exchange;
'AIM Rules' the rules which set out the obligations and responsibilities in relation to
companies whose
shares are admitted to AIM as published and amended from time to time by the
London Stock
Exchange;
'Allenby' Allenby Capital Limited, the Company's nominated advisor and broker;
'Allenby Re-admission Warrants' warrants issued to Allenby over 1,327,784 new Ordinary Shares as more fully
described in note
18.4.2;
'Allenby Warrants' warrants issued to Allenby over 300,000 new Ordinary Shares as more fully
described in note
18.4.2;
'Board' or 'Directors' the directors of the Company;
'Company' or 'Hunter' Hunter Resources plc;
'Deferred Shares' Deferred shares of GBP0.009 each in the share capital of the Company, or,
following the Share
Consolidation, Deferred shares of GBP0.09 each in the share capital of the
Company;
'Directors Warrants' warrants issued to the Directors over 11,000,000 new Ordinary Shares as more fully
described
in note 18.4.3;
'Facility' The convertible loan note facility as more fully described in note 23.2;
'Farm In agreement' the agreement dated 26 May 2014, full details of which are provided in the
Admission Document
dated 6 June 2014) and note 20;
'Farm In agreement (as amended)' the Farm In agreement as amended in March 2015, full details of which are provided
in note
20;
'First Loan Note' the GBP26,000 loan note issued by the Company to Marine, further details of which
are provided
in note 16.2.1;
'Global Pearl' Global Pearl Limited, a company incorporated in the British Virgin Islands, with
company number
1744814 and controlled by the Management Team;
'Gold Hunter' Gold Hunter S.A.C., a company incorporated in Peru with certificate number
13164856;
'Group' the Company and its subsidiary undertakings;
'July 2014 Funding' the new funding obtained by the Company in July 2014 through the Subscription,
Placing and
final drawdown on the Third Loan Note;
'Loan Notes' collectively the First Loan Note, the Second Loan Note and the Third Loan Note;
'Management Team' the Global Pearl team comprising David Fowler, Sam Pierce and Tim Adams (further
details of
whom are given in the Admission Document dated 6 June 2014);
'Marine' Marine Investments (WA) Pty Limited, a company incorporated in Western Australia,
with ABN
number 57 315 206 483;
'Marine Consultancy Warrants' warrants issued to Marine over 4,000,000 new Ordinary Shares as more fully
described in note
18.4.1;
'Marine Convertible Warrants' warrants issued to Marine over 7,880,596 new Ordinary Shares as more fully
described in note
18.4.1;
'Ordinary Shares' ordinary shares of GBP0.001 each in the share capital of the Company, or,
following the Share
Consolidation, ordinary shares of GBP0.01 each in the share capital of the
Company;
'Pampamali Project' the 8 Pampamali mineral exploration concessions located in central Peru in the
department
of Huancavelica;
'Prospero Project' additional mineral exploration concessions covering approximately 5,000 hectares
to the North
West of Pampamali;
'Placing' the July 2014 placing of 22,472,133 new Ordinary Shares at 1.15 pence per new
Ordinary Shares,
such new Ordinary Shares admitted to trading on AIM on 4 July 2014;
'Re-admission' re-admission of the Company's Ordinary Shares to trading on AIM becoming effective
in accordance
with Rule 6 of the AIM Rules, on 4 July 2014;
'Second Loan Note' the GBP100,000 loan note issued by the Company to Marine, further details of which
are provided
in note 16.2.2;
'Share Consolidation' the one for ten consolidation of the Company's Ordinary Shares and Deferred
Shares, effective
30 June 2014;
'Shareholders' holders of the Company's Ordinary Shares and / or Deferred Shares;
'Subscription' the July 2014 subscription of 36,408,467 new Ordinary Shares at 1.15 pence per new
Ordinary
Shares, such new Ordinary Shares admitted to trading on AIM on 4 July 2014;
'Third Loan Note' the $150,000 loan note issued by the Company to Marine, further details of which
are provided
in note 16.2.3;
'Underwriting Warrants' warrants issued to Marine over 6,200,000 new Ordinary Shares as more fully
described in note
18.4.1;
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FFMPTMBITBAF
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