TIDMGPM
RNS Number : 3175L
Golden Prospect Precious Metals Ltd
18 April 2018
Golden Prospect Precious Metals Limited
Annual Report and Audited Financial Statements
for the year ended 31 December 2017
Contents Page
_________________________________________________________________________________
Chairman's Statement 2
Board Members 3
Directors' Report 4
Investment Manager's Report 11
Independent Auditor's Report 13
Financial Statements
Statement of Comprehensive Income 17
Statement of Changes in Equity 18
Statement of Financial Position 19
Statement of Cash Flows 20
Notes to the Financial Statements 21
Unaudited Portfolio Statement 40
Management and Administration 43
Unaudited Report of the UK Investment Adviser Relating to
Matters under the
45
Alternative Investment Fund Managers' Directive
Notice of AGM 47
Form of Proxy 50
Chairman's Statement
For the year ended 31 December 2017
In my June 2017 report I set out my views on the global impacts
influencing precious metals and in the interest of brevity I would
encourage shareholders to revisit these comments as the situation
is little changed (the report remains available on our web-site). I
believe precious metals currently sit as an attractive investment
asset class in relation to today's geo-political and macro-economic
climate. The salient factors currently in play include peak gold,
inflation, China and Russia Central Bank buying, Fed policies on
interest rates, mounting debt issues, equity bubbles, global
conflicts and more recently the emergence of super power trade
wars.
With gold performing well the immediate focus has switched to
the micro situations which offers a very compelling case for
significantly adding to the undervalued gold and silver equities
sector.
There is some extremely interesting punditry by international
specialist newsletters and commentators which point to the deep
value opportunities that many well-known mining companies currently
offer in the Australian, USA and Canadian markets which have rarely
been in better shape in terms of cash flows and profit margins. I
do not wish to duplicate, repeat or compete with our own investment
managers very professional and informed views of the present
attractions that exist and on which they are currently taking full
advantage. Their report is on page 11 and is a must read for
interested followers of our specialist sector. Our message is to
continually increase investor weightings to both gold and silver
stocks while both the fundamental and technical picture remains so
strong.
Shares are truly languishing, trading at prices only seen when
gold was half or even a quarter of current levels.
During the year shareholders were offered a subscription share
which we believe provides an opportunity to participate in
potential growth in the precious metals sector. Further details on
the subscription shares can be found under note 11.
As part of our continuing corporate governance oversight the
Directors have undertaken an evaluation of the Board of Directors,
the Investment Manager and our Auditor. As part of these
evaluations it has been decided that Kaare Foy will step down as
Chairman of the Audit Committee and he is resigning as a Director
with effect from today, 17 April 2018. I would like to thank Kaare
for his input and support over the years; he has been my trusted
ally since the launch of the Company. I would like to wish Kaare
well in the future.
I would at the same time like to welcome Graeme Ross, who joins
the Board today. Graeme will assume the role of the Chairman of the
Audit Committee. Graeme's details are set out on page 3.
Malcolm Burne
Chairman
Board Members
For the year ended 31 December 2017
__________________________________________________________________________________
The Directors have overall responsibility for the Company's
activities including the review of its activities and
performance.
The Directors of the Company at the date of signing the
accounts, all of whom are non-executive, are listed below. Kaare
Foy resigned from and Graeme Ross was appointed to the Board after
the signing of the accounts.
Malcolm Burne, is a former stockbroker and financial journalist
with The Financial Times. He has controlled and managed fund
management, venture capital and investment banking companies in
London, Australia, Hong Kong and North America. He has been a
director of more than 20 companies, many of which have been in the
mineral resource and gold exploration fields. In 1997, he founded
Golden Prospect plc and was executive chairman until 2007 when the
company changed its name to Ambrian Capital plc. In addition, he
was executive chairman of the Australian Bullion Company (Pty)
Limited, which at the time was Australia's leading gold dealer and
member of the Sydney Futures Exchange.
Kaare Foy, was an executive director of Great Panther Silver
Limited, a silver exploration and mining company based in
Vancouver, from 1994 until the beginning of 2012 and was its
Executive Chairman when it reached a market capitalisation of more
than US$600 million in 2011. He is currently chairman of Viscount
Mining Limited, and has been heavily involved with silver and gold
projects in North America, and worked with Malcolm Burne at the
Australian Bullion Company (Pty) Limited during the 1980s. Kaare
Foy is resigning as a Director on 17 April 2018.
Robert King, is a non-executive director of a number of open and
closed ended investment funds and companies including Chenavari
Capital Solutions Limited, Tufton Oceanic Assets Limited and Weiss
Korea Opportunities Fund Ltd. He was a director of Cannon Asset
Management Limited and its associated companies from October 2007
to February 2011. Prior to this, he was a Director of Northern
Trust International Fund Administration Services (Guernsey) Limited
(formerly Guernsey International Fund Managers Limited) where he
had worked from 1990 to 2007. He has been in the offshore finance
industry since 1986 specialising in administration and structuring
of offshore open and closed ended investment funds. Rob is British
and resident in Guernsey.
Toby Birch, is a non-executive director of a number of
investment funds and companies, including BullionRock which merged
with Guernsey Gold during 2014. Previously he was managing director
of Oppenheim & Co Limited in Guernsey and Blackfish Capital
Holdings, the private investment arm of a single family office. He
was also investment manager of the Blackfish Capital Exodus Fund
trading in commodities, precious metals and real asset themes and
was a director of the Blackfish-Investec Resources Special
Situations Fund, investing in mining companies. He is a Chartered
Fellow, and committee member, of the Chartered Institute for
Securities and Investments, who have appointed him a Chartered
Wealth Manager. He is a regular public speaker on the conference
circuit and in the media, covering financial megatrends, precious
metals, agricultural investment and monetary reform.
Graeme Ross, was educated at Perth Academy and Dundee College of
Technology in Scotland and qualified as a Chartered Accountant with
Arthur Young McClelland, Moores in 1984. He then moved to Jersey in
the Channel Islands and spent two years with KPMG on financial
services audits before joining the embryonic fund administration
arm of Rawlinson & Hunter, Jersey in 1986. He was admitted to
the Partnership of Rawlinson & Hunter, Jersey in 1995 and was
the Managing Director of the fund administration division from then
until his retiral at the end of 2016. Graeme has significant
experience of the management, administration and oversight of all
types of collective investment vehicles and has served as a
Director on open ended, closed ended and limited partnership
vehicles investing in a wide variety of asset classes and sectors
including many listed funds. Graeme is a resident of Jersey. Graeme
will be appointed to the Board on 17 April 2018.
Directors' Report
For the year ended 31 December 2017
__________________________________________________________________________________
The Directors present their Report and the Audited Financial
Statements of Golden Prospect Precious Metals Limited (the
'Company') for the year ended 31 December 2017.
The Company
The Company was registered in Guernsey on 16 October 2006 and is
an authorised closed-ended investment scheme under the Protection
of Investors (Bailiwick of Guernsey) Law 1987. The Company's
Ordinary Shares were admitted to the Official List of the Channel
Islands Stock Exchange ('CISX') on 24 June 2008.The Channel Islands
Security Exchange rebranded to The International Securities
Exchange ('TISE') on 6 March 2017. Effective 21 September 2009, the
Ordinary Shares trade on the London Stock Exchange Electronic
Trading Service SETS QX with code GPM.
Subscription Shares
On 22 December 2017 the Company issued, by way of bonus issue
and on a one subscription share for every two ordinary shares,
28,500,995 Subscription Shares. These were admitted to listing on
The International Stock Exchange trading on SETS QX. The
subscription price is equal to the published unaudited net asset
value per ordinary share as at the close of business on 20 December
2017 plus a premium depending on the year in which they are
exercised. See note 6 and 11 for further details.
Shareholder information
Up to date information regarding the Company, including a daily
announcement of Net Asset Value, can be found on the Company's
website, which is www.ncim.co.uk/gppm_top.php
Results and dividends
The Company's performance during the year is discussed in the
Investment Manager's Report on page 11. The results for the year
are set out in the Statement of Comprehensive Income on page 17.
The Directors do not recommend the payment of a dividend for the
year ended 31 December 2017 (2016: GBPnil).
Directors' responsibilities statement
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have elected to prepare the Financial Statements in accordance with
International Financial Reporting Standards as adopted by the
European Union ('IFRS').
The Directors are required by the Companies (Guernsey) Law, 2008
to prepare Financial Statements for each financial period which
give a true and fair view of the state of affairs of the Company
and of the surplus or deficit of the Company for that period.
Directors' responsibilities statement (continued)
In preparing those 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 applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the Financial Statements; and
-- prepare the Financial Statements on a going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors confirm that they have complied with the above
requirements in preparing the Financial Statements.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and which enable them to ensure
that the Financial Statements comply with the Companies (Guernsey)
Law, 2008. The Directors are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Directors
The Directors of the Company who served during the year and to
date are set out on page 3.
Directors' interests
The Directors held the following interests in the share capital
of the Company either directly or beneficially as at 31 December
2017, and as at the date of signing these Financial Statements:
Ordinary Subscription Ordinary Subscription
Shares Shares Shares Shares
Director 2017 2017 2016 2016
M Burne 437,500 218,750 437,500 -
K Foy 25,000 12,500 25,000 -
R King 20,000 10,000 20,000 -
T Birch 50,000 25,000 50,000 -
The Directors who served in the year received the following
fees:
2017 2016
Director GBP GBP
M Burne * 15,000 12,000
K Foy ** 15,000 12,000
R King 15,000 12,000
T Birch 15,000 12,000
60,000 48,000
The amounts paid by the Company to the Directors were for
services as non-executive Directors.
* Chairman
** Chairman of the Audit Committee
Directors' authority to buy back shares
As agreed at the Company AGM on 23 May 2017, and in accordance
with the Articles of Association of the Company and the Companies
(Guernsey) Law, 2008, as amended (the 'Law'), the Company is
authorised to make market purchases of up to a maximum of 15 per
cent of its existing issued ordinary Share Capital. This authority
is renewable annually. At the Annual General Meeting to take place
on 23 May 2018 the Company will seek to renew such authority and
will seek to renew such authorities at annual general meetings
thereafter.
Any buy back of shares will be made subject to Guernsey law and
within any guidelines established from time to time by the Board
and the making and timing of any buy backs will be at the absolute
discretion of the Board and not at the option of the
Shareholders.
Purchases of shares will only be made through the market for
cash. The minimum price (exclusive of expenses) which may be paid
for the shares is GBP0.001 per share. The maximum price (exclusive
of expenses) payable by the Company for the shares will be no more
than 5% above the average of the middle closing market quotations
taken from the London Stock Exchange Daily Official List on each of
the five business days before the closing purchase is made.
During the year no shares (2016: no shares) were acquired by the
Company under the above authority.
Board responsibilities and corporate governance
The Board has determined that no Director shall be considered
non-independent as a consequence of their length of tenure, as long
as there are no other issues which would impact their independent
status.
Although Mr Burne and Mr King have served on the Board for more
than nine years they are considered independent Directors as they
do not have any contract for services or any other connection, paid
or otherwise, with any related party of the Company.
The Board of Directors is responsible for the corporate
governance of the Company. The Board will ensure that the Company's
operations are conducted reasonably and within the framework of all
applicable laws, regulations, rules, guidelines and codes as well
as established policies and procedures. The Directors will
regularly assess and document whether the Board's approach to
corporate governance achieves its objectives and, consequently,
whether the Board itself is fulfilling its own responsibilities.
The Board will review through its board evaluation the
effectiveness of its overall approach to governance and make
changes where that effectiveness needs to be enhanced.
The Board meets at least four times a year. Between these formal
meetings there is regular contact with the Investment Manager and
the Secretary. The Directors are kept fully informed of investment
and financial controls and other matters that are relevant to the
business of the Company and which should be brought to the
attention of the Directors. The Directors also have access to the
Administrator and, where necessary in the furtherance of their
duties, to independent professional advice at the expense of the
Company. The Board is responsible for the appointment and
monitoring of all service providers to the Company.
As an investment company, most of the Company's day to day
responsibilities are delegated to third parties and all of the
Directors are non-executive. As a Guernsey incorporated company,
the Company is required to comply with the Finance Sector Code of
Corporate Governance issued by the Guernsey Financial Services
Commission ('the Code').
The Directors have taken the action that they consider
appropriate to ensure that the appropriate level of corporate
governance, for an investment company incorporated in Guernsey
whose securities are listed on The
Board responsibilities and corporate governance (continued)
International Stock Exchange, is attained and maintained. The
Company does not, nor intends to, adopt the UK Code of Corporate
Governance.
For the purposes of assessing compliance with the Code, the
Board considers all of the Directors as independent of the
Investment Manager.
Audit Committee: K Foy (Chairman)
The Audit Committee has been established with written terms of
reference and comprises all of the Board members. The Audit
Committee members have recent and relevant financial experience.
The terms of reference of the Audit Committee are reviewed and
re-assessed for their adequacy on an annual basis.
Role of the Audit Committee
A summary of the Committee's main audit review functions is
shown below:
-- to review and monitor the effectiveness of the internal
control systems and risk management systems on which the Company is
reliant;
-- to monitor the integrity of the interim and annual financial
statements of the Company by reviewing, and challenging where
necessary, the actions and judgements of the Manager, the Company
Secretary and the Administrator;
-- to review and monitor the effectiveness of the Company's
other third party service providers;
-- overseeing the Company's relationship with the external
auditor BDO Limited and to review their proposed audit programme of
work and their findings;
-- approval of the remuneration and terms of engagement of the external auditor;
-- to develop and implement policy on the engagement of the
external auditor to supply non-audit services; and
-- to monitor and review annually the external auditor's
independence, objectivity, effectiveness, resources and
qualification.
To assess the effectiveness of the external auditor, the Audit
Committee reviewed:
-- the external auditor's fulfilment of the agreed audit plan and variations from it;
-- the Audit Committee Report from the auditor highlighting the
major issues that arose during the course of the audit; and
-- feedback from the Investment Manager and Administrator
evaluating the performance of the audit team.
The Audit Committee has assessed the performance of the external
auditor, as described above, and is satisfied with its
effectiveness and as such no change in auditor is proposed.
Auditor
The Audit Committee is responsible for overseeing the Company's
relationship with the external auditor, including making
recommendations to the Board on their appointment of the external
auditor and their remuneration. BDO Limited has been the Company's
external auditor since the Company's inception. The lead audit
director, Mr Justin Hallett was initially appointed for the year
end 31 December 2013 audit. In accordance with normal audit
director rotation arrangements, Mr Hallett will rotate off the
audit of the Company at the conclusion of the audit of these
Financial Statements. The Board has noted recommendations to put
the external audit out to tender at least every ten years and
during the year undertook a review of the audit services provided
by our Auditors and concluded that there was currently no
requirement to make any changes to their appointment.
Auditor (continued)
The Board has noted the review undertaken by the Audit Committee
of the audit services provided to the Company by its auditor, BDO
Limited as they have been appointed as the Company's auditor for
over 10 years.
The Directors are of the opinion that BDO Limited remain
independent and provide experience and knowledge in the audit of
the Company's accounts which the Board considers to be in the best
interest of the Shareholders.
The auditor, BDO Limited, has indicated its willingness to
continue in office. Accordingly, a resolution for its reappointment
will be proposed at the forthcoming Annual General Meeting.
Annual Report and Financial Statements
The Board of Directors is responsible for preparing the Annual
Report and Financial Statements. The Audit Committee advises the
Board on the form and content of the Annual Report and Financial
Statements, any issues which may arise and any specific areas which
require judgement.
Investment policy
The Company's investment objective is to generate above average
returns for Shareholders primarily through the capital appreciation
of its investments. The Directors believe that such returns can be
obtained by investing in a selective portfolio of securities and
other instruments in the precious metals, diamond and uranium
sectors.
Anti-bribery and corruption
The Board acknowledges that the Company's international
operations may give rise to possible claims of bribery and
corruption. In consideration of the UK Bribery Act the Board
reviews the perceived risks to the Company arising from bribery and
corruption to identify aspects of the business which may be
improved to mitigate such risks. The Board has adopted a zero
tolerance policy towards bribery and has reiterated its commitment
to carry out business fairly, honestly and openly.
Alternative Investment Fund Managers Directive ('AIFMD')
Our Investment Manager, CQS (UK) LLP, has been authorised by the
UK Financial Conduct Authority ('FCA') as an Alternative Investment
Fund Manager ('AIFM') under the Alternative Investment Fund
Managers Directive ('AIFMD'). The funds managed by the AIFM are now
defined as Alternative Investment Funds ('AIFs') and are subject to
the relevant articles of the AIFMD. Further AIFM disclosures are
shown on pages 45 and 46. The Board has appointed INDOS Financial
Limited as the Company's Depositary.
Internal control and financial reporting
The Board is responsible for establishing and maintaining the
Company's system of internal controls. Internal control systems are
designed to meet the specific needs of the Company and the risks to
which it is exposed, and, by their very nature, provide reasonable,
but not absolute, assurance against material misstatement or
loss.
The key procedures which have been established to provide
effective internal controls include:
-- Maitland Administration (Guernsey) Limited (formerly R&H
Fund Services (Guernsey) Limited) is responsible for the provision
of administration and company secretarial duties;
-- The duties of investment management, accounting and the
custody of assets are segregated. The procedures are designed to
complement one another;
-- The Board clearly defines the duties and responsibilities of
the Company's agents and advisers in the terms of their
contracts;
Internal control and financial reporting (continued)
-- The Board receives assurances from the Company's agents and
advisers that any amendments required as a result of regulatory
change, including the General Data Protection Regulations
(effective 25 May 2018), are actioned accurately and timeously;
-- The Board reviews financial information and compliance
reports produced by the Administrator on a regular basis and;
-- The Custodian holds all assets of the Company, in the name of the Company.
The Board and Audit Committee have reviewed the Company's risk
management and internal control systems and believe that the
controls are satisfactory, given the size and nature of the
Company.
Environment
The Company seeks to conduct its affairs responsibly and
environmental factors are, where appropriate, taken into
consideration with regard to investment decisions taken on behalf
of the Company. The Investment Manager considers socially
responsible investment and actively engages with investee
companies.
The Directors recognise that their first duty is to act in the
best financial interests of the Company's shareholders and to
achieve good financial returns against acceptable levels of risk,
in accordance with the objectives of the Company.
In asking the Company's Investment Manager to deliver against
these objectives, they have also requested that the Investment
Manager take into account the broader social, ethical and
environmental issues of companies within the Company's portfolio,
acknowledging that companies failing to manage these issues
adequately run a long term risk to the sustainability of their
businesses. More specifically, they expect companies to demonstrate
ethical conduct, effective management of their stakeholders'
relationships, responsible management and mitigation of social and
environmental impacts, as well as due regard for wider societal
issues.
Going concern
The Directors believe that it is appropriate to continue to
adopt the going concern basis in preparing the Financial Statements
since:
-- the assets of the Company consist mainly of securities which are readily realisable and;
-- the Company has an agreed overdraft facility provided by its
Custodian for which margin requirements are monitored and reported
on a monthly basis. There were no breaches of these requirements
during the year or prior year.
Accordingly, the Company has adequate financial resources to
continue in operational existence for the foreseeable future.
Shareholders' significant interests
The following shareholders had a substantial interest of 5% or
more of the Company's issued share capital as at 31 December 2017,
and as at the date of the signing of these Financial
Statements:
% of issued share
capital
Clients of HSBC Global Custody Nominee
(UK) 14.28%
Clients of Hargreaves Lansdown (Nominees)
Limited 12.67%
Clients of the Bank of New York (Nominees)
Limited 10.81%
Material contracts
The Company's material contracts are with New City Investment
Managers (a trading name of CQS (UK) LLP), to provide investment
management services, Maitland Administration (Guernsey) Limited
(formerly R&H Fund Services (Guernsey) Limited), which acts as
Secretary and Administrator for the Company, Credit Suisse AG
Dublin Branch, which acts as Custodian, INDOS Financial Limited,
which acts as Depositary and Computershare Investor Services
(Guernsey) Limited, which acts as Registrar for the Company.
Details of the fees payable under these contracts are as
detailed in note 5 to the Financial Statements.
Relations with Shareholders
The Directors place a great deal of importance on communication
with shareholders. The Annual Report and Financial Statements are
distributed to other parties who have an interest in the Company's
performance. Additional information on the Company can be obtained
through the Investment Manager's website www.ncim.co.uk.
The Notice of the Annual General Meeting included within the
Annual Report and Financial Statements is sent out at least 20
working days in advance of the meeting. All shareholders have the
opportunity to put questions to the Board or the Investment Manager
formally at the Company's Annual General Meeting.
The Company Secretary and Investment Manager are available to
answer general shareholder queries at any time throughout the
year.
Disclosure of information to the auditor
The Directors confirm that, so far as each of the Directors is
aware, there is no relevant audit information of which the
Company's auditor is unaware, having taken all the steps the
Directors ought to have taken to make themselves aware of any
relevant audit information and to establish that the Company's
auditor is aware of that information.
Approved by the Board of Directors on 17 April 2018 and signed
on behalf of the Board by:
Robert King Toby Birch
Investment Manager's Report
For the year ended 31 December 2017
__________________________________________________________________________________
2017 saw a 13% gain in the gold price and 6% increase in silver,
whilst equities lagged this marked improvement in underlying
fundamentals. The valuations of smaller cap miners continue to look
relatively attractive, especially given their improved earnings.
M&A within the sector remains elusive with only a few smaller
deals, despite the widening gap in valuations, whether measured on
an NAV or earnings basis, and increasing need for large cap
producers to replenish reserves. We believe underlying stock
liquidity remains the key factor behind this relative valuation
gap, as fund flows have increasingly rotated into passive
strategies such as ETFs, which prioritise liquidity over
valuation.
Gold remains an important portfolio diversifier and in this
context geopolitical risks continue to exert an important influence
on gold prices. Latterly these have been dominated by Trump trade
tariffs, a shift from North Korea's sabre rattling during 2017.
This has caused some reversal in investor risk appetite in 2018
with funds flowing back from cyclical assets preferred in 2017 into
safe haven gold and at the time of writing gold has gained
approximately 3% versus a 7% decline for copper during 2018.
Holdings of gold by physically backed ETFs showed healthy 7.4Moz
additions over 2017 with recent trade risks providing further
support in the current year. Tellingly, physical gold held by ETF's
have continued to climb and now exceed the level reached prior to
Trump's election testament to wider caution to his pro-US policy
making which has seen considerable turnover in White House advisory
staff. Another, less favoured outcome of Trump policy may be an
increase in tax rates, most recently mooted in the technology
sector which has been a significant driver of equity market
performance. This may act as a drag to broader US equity market
earnings growth and cause some rotation into safer assets given
relatively extended equity market valuations.
Performance commentary
The rebalance of the GDXJ (Van Eck Junior Gold Miners ETF)
weighed heavily on the small cap end of the precious metal sector
in 2017. The shift in fund flows into passive strategies over the
last few years has resulted in an outsized influence from passive
strategies such as ETF's. This has led to a growing valuation
differential between smaller and large capitalised producers. The
moves in the funds NAV were also exacerbated by volatile currency
fluctuations. Following the Brexit announcement in June 2016
sterling declined 16% versus the USD over the year which
significantly benefited the Fund NAV. However, this reversed in
2017 with sterling gaining 9% against the dollar, weighed on Fund
returns and the headwind of sterling's strengthening trend has
continued in 2018.
Portfolio themes
One of the most striking sector features, as referenced above,
is the extreme valuation disparity between the large precious metal
stocks and the smaller capitalised stocks to which the Fund is
primarily exposed. Indeed despite gold's price rise related
equities, especially smaller capitalised stocks, remained out of
favour and the Fund's NAV declined 10% over the year. However, over
time we believe this situation will correct either via merger of
like sized entities or as larger companies seek to replace reserves
via acquisition or joint venture and that anomalous small-cap
valuation differentials offer investors significant opportunity.
Despite a valuation gap that would support accretive acquisitions
the market continues to shun acquisitive companies, leading to
reticence in management teams pushing for transactions. The sector
has increasingly shifted to the larger producers paying significant
premiums for 10-20% stakes in developers or late stage explorers
such as Goldfield's acquisitions of an 11.5% stake in Cardinal
Resources and Newcrest's 19.9% farm-in to Continental
Resources.
Exchange rate movements led to some shift in regional and metal
exposure within the Fund during 2017. Direct silver exposure was
reduced as the Mexican Peso, like other currencies, strengthened
against the US dollar pressuring operating margins of mining groups
in this dominant producing region. In order to maintain exposure to
industrial metal by-products produced with silver such as zinc,
which has seen considerable improvement in price due to China's
environmental reforms that have removed significant domestic
production the Fund increased exposure to zinc heavy silver miners,
such as Americas Silver, which we expect to generate over 40% of
its revenues from zinc at current prices. The Fund's exposure to
platinum group metals was mixed with disappointing performance from
South African producer Platinum Group Metals offset by exposure to
rhodium, whose price rose 100% during the year. Rhodium price rise
bears testament to its wider use in reducing nitrogen fossil fuel
vehicles exhaust and has benefitted from supply constraints from
South Africa's dominant PGM
Investment Manager's Report (continued)
For the year ended 31 December 2017
__________________________________________________________________________________
industry following changes in the country's mining code.
Exposure to this metal has been reduced following further strong
performance in the current year.
But background support remains in place
Despite investors' preference for risk we believe some macro
aspects remain supportive to gold. While US inflation has remained
relatively manageable we note that hourly wages increased by 2.6%
at the end of 2017 and have continued to rise at a more appreciable
rate than the 2.2% rise of broader consumer prices. With little
slack in the US labour market we believe inflationary pressures are
currently building. This should provide a more supportive backdrop
for gold prices. Importantly, the latest extension to the US debt
ceiling, in February, acts as a useful reminder of a potential
limitation to FED interest rate policy and the extent to which
interest rates can be increased.
Elsewhere, the improving economic outlook in Europe has allowed
perceptions of risks to become more sanguine though regional
inequalities and increasing nationalism within the Eurozone remain
a threat which could undermine this stance. The success of the Five
Star Movement in the recent Italian election highlights this as
Italy still looks to create a coalition government.
Current demand pull inflation has heralded an interest rate
tightening cycle and following an initial 25bp rise by the US
Federal Reserve Bank in December 2017 and another in March 2018,
consensus expectations are for at least another two 25bp interest
rate increases in the US over the remainder of the year. However,
this has not been matched by US dollar strength with central bank
policy elsewhere having a more meaningful effect on exchange rates.
In particular, the prospect of removing ultra-loose quantitative
easing in Europe and Japan has driven relative strength in those
currencies versus the US dollar. Sterling has been a no exception
to this trend and despite protracted Brexit negotiations it
strengthened a significant 10% versus the dollar over the financial
year, resulting in a more muted sterling gold price rise of around
3% during the year.
A longer-term influence on US reserve currency is an underlying
trend of de-dollarisation as evidenced by China's recent
development of a domestic oil futures market, as it seeks to trade
oil for Yuan with the likes of Russia, diluting the need for it and
some other trading partners such as Russia, to hold dollars as a
trading currency. The pull-back of crypto currencies, following the
ground swell of 2017, may also free up funds for investment in more
traditional precious metals providing some short-term relief to the
sector.
New City Investment Managers
(a trading name of CQS (UK) LLP)
Independent Auditor's Report to the Members of
Golden Prospect Precious Metals Limited
_________________________________________________________________________________
Opinion
We have audited the financial statements of Golden Prospect
Precious Metals Limited ("the Company") for the year ended 31
December 2017 which comprise the Statement of Comprehensive Income,
the Statement of Changes in Equity, the Statement of Financial
Position, the Statement of Cash Flows and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards as endorsed by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 December 2017 and of its loss for the year then
ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards; and
-- have been properly prepared in accordance with the
requirements of the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with Section 262 of the Companies (Guernsey) Law,
2008. 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the Directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the Directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the Company's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
Key Audit Matter Audit Response
--------------------------------------- ------------------------------------------------
Investments (note 7) The investment We agreed the existence of the
portfolio at 31 December 2017 investment portfolio holdings
comprised either listed investments to the Custodian confirmation.
and warrants whose price is We tested the valuation of all
readily available but also listed investments held by agreeing
unlisted warrants. Unlisted the prices used in the valuation
warrants are valued using valuation to independent third party sources.
models. We focused on the valuation For the unlisted warrants we
and existence of investments utilised the audit team's valuation
because investments represent experts to value these instruments
the principal element of the and then compared this to the
net asset value as disclosed valuations prepared by management.
in the Statement of Financial
Position in the financial statements.
--------------------------------------- ------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgment, we determined materiality
for the financial statements as a whole to be GBP488,000 (2016:
GBP515,000), which is based on a level of 1.75% of total assets. We
considered total assets to be the most appropriate benchmark due to
the Company being an investment fund with the objective of long
term capital growth.
Performance materiality for the company has been set at
GBP341,000 which is 70% of materiality (2016: GBP360,000). This has
been set based upon the control environment in place, the
directors' assessment of risk and our past experience of
adjustments.
International Standards on Auditing (UK) also allow the auditor
to set a lower materiality for particular classes of transaction,
balances or disclosures for which misstatements of lesser amounts
than materiality for the financial statements as a whole could
reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements. In this context, we
set a lower level of materiality to apply to investment income and
sensitive fees including: investment management fees,
administration fees, directors' fees, legal and professional fees;
audit fees, financial advisers' fees, depository fees, registrar's
fees and custodian fees. We determined materiality for these areas
to be GBP50,000.
We agreed with the audit committee that we would report to the
committee all individual audit differences identified during the
course of our audit in excess of GBP12,200 (2016: GBP15,450). We
also agreed to report differences below these thresholds that, in
our view, warranted reporting on qualitative grounds.
There were no misstatements identified during the course of our
audit that were individually, or in aggregate, considered to be
material in terms of their absolute monetary value or on
qualitative grounds.
An overview of the scope of our audit
We carried out a full scope audit of the Company which was
tailored to take into account the nature of the Company's
investments, involvement of the Investment Manager, the Company's
Administrator and Custodian, the accounting and reporting
environment and the industry in which the Company operates.
In designing our overall audit approach, we determined
materiality and assessed the risk of material misstatement in the
financial statements.
This assessment took into account the likelihood, nature and
potential magnitude of any misstatement. As part of this risk
assessment we considered the Company's interaction with the
Investment Manager and the Company's Administrator and Custodian.
We assessed the control environment in place at the Investment
Manager and the Company's Administrator to the extent that it was
relevant to our audit.
Following this assessment, we applied professional judgement to
determine the extent of testing required over each balance in the
financial statements.
Other information
The Directors are responsible for the other information. The
other information comprises the information included in the annual
report other than the financial statements and our auditor's report
thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law, 2008 requires us to report to
you if, in our opinion:
-- proper accounting records have not been kept by the Company; or
-- the financial statements are not in agreement with the accounting records; or
-- we have failed to obtain all the information and explanations
which, to the best of our knowledge and belief, are necessary for
the purposes of our audit.
Responsibilities of Directors
As explained more fully in the Directors' report, the Directors
are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view and for
such internal control as the Directors determines is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located at the Financial Reporting
Council's website at:
https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
The engagement director on the audit resulting in this
independent auditor's report is Justin Hallett.
BDO Limited
Chartered Accountants
Place du Pré
Rue du Pré
St Peter Port
Guernsey
Statement of Comprehensive Income
For the year ended 31 December 2017
__________________________________________________________________________________
2017 2016
Revenue Capital Total Total
Notes GBP GBP GBP GBP
Income
Income from investments designated
at fair value through profit or
loss 7 87,530 - 87,530 208,890
Net capital (losses)/gains on
investments at fair value through
profit or loss 7 - (1,924,424) (1,924,424) 13,475,134
Net investment (losses)/gains 87,530 (1,924,424) (1,836,894) 13,684,024
------------- --------------- --------------- --------------
Expenses
Investment management fees 5 (306,142) - (306,142) (312,889)
Exchange loss (99,913) - (99,913) (233,168)
Administration fees 5 (65,000) - (65,000) (65,000)
Directors' fees 5 (60,000) - (60,000) (48,000)
Legal and professional fees (23,219) - (23,219) (9,757)
Audit fees (22,245) - (22,245) (20,000)
Other expenses (19,331) - (19,331) (20,238)
Financial advisers fees 5 (17,500) - (17,500) (17,354)
Sponsor fees (17,282) - (17,282) (8,601)
Depositary fees 5 (16,800) - (16,800) (16,850)
Registrar's fees 5 (14,905) - (14,905) (10,563)
Custodian fees 5 (14,294) - (14,294) (12,165)
Total operating expenses (676,631) - (676,631) (774,585)
------------- --------------- --------------- --------------
Operating (loss)/profit (589,101) (1,924,424) (2,513,525) 12,909,439
Finance cost
Finance income 16,201 - 16,201 1,406
Overdraft interest 8 (112,532) - (112,532) (64,693)
(Loss)/profit for the year before tax (685,432) (1,924,424) (2,609,856) 12,846,152
Withholding tax (13,458) - (13,458) (37,651)
------------- --------------- --------------- --------------
(Loss)/profit for the year after
tax (698,890) (1,924,424) (2,623,314) 12,808,501
Other comprehensive income - - - -
------------- --------------- --------------- --------------
Total comprehensive (loss)/income
for the year (GBP698,890) (GBP1,924,424) (GBP2,623,314) GBP12,808,501
============= =============== =============== ==============
Basic and diluted (loss)/earnings
per Ordinary share (pence) 6 (4.60p) 22.47p
=============== ==============
The 'Total' column of this statement represents the Company's
Income Statement, prepared in accordance with IFRS as endorsed by
the European Union. The supplementary 'Revenue' and 'Capital'
columns are both prepared for information purposes only.
All the items in the above statement derive from continuing
operations.
The notes on pages 21 to 39 form an integral part of these
Financial Statements.
Unrealised
Share Revenue Distributable Realised Capital
Capital Reserve Reserve Capital Reserve Reserve Total Equity
GBP GBP GBP GBP GBP GBP
Balance as at 1
January 2016 57,002 (3,916,365) 43,995,959 (20,402,470) (7,322,650) 12,411,476
Total
comprehensive
(loss)/income
for the year - (666,633) - 3,900,219 9,574,915 12,808,501
Balance as at
31 December
2016 GBP57,002 (GBP4,582,998) GBP43,995,959 (GBP16,502,251) GBP2,252,265 GBP25,219,977
========== =============== ============== ================ =============== ==============
For the year
ended 31
December 2017
Balance as at 1
January 2017 57,002 (4,582,998) 43,995,959 (16,502,251) 2,252,265 25,219,977
Total
comprehensive
(loss)/income
for the year - (698,890) - 2,038,414 (3,962,838) (2,623,314)
Transactions
with owners:
Subscription
share issue
costs (note
11) - - (93,000) - - (93,000)
Balance as at
31 December
2017 GBP57,002 (GBP5,281,888) GBP43,902,959 (GBP14,463,837) (GBP1,710,573) GBP22,503,663
========== =============== ============== ================ =============== ==============
The notes on pages 21 to 39 form an integral part of these
Financial Statements
Statement of Financial Position
As at 31 December 2017
__________________________________________________________________________________
2017 2016
Notes GBP GBP
Current Assets
Investments at fair value through profit or loss 7 26,324,365 29,352,529
Cash and cash equivalents 8 1,609,584 61,400
Receivables 9 8,461 16,602
-------------- --------------
Total Assets 27,942,410 29,430,531
-------------- --------------
Current Liabilities
Payables and accruals 10 (207,754) (115,955)
Bank overdraft 8 (5,230,993) (4,094,599)
-------------- --------------
Total Liabilities (5,438,747) (4,210,554)
-------------- --------------
Net Assets GBP22,503,663 GBP25,219,977
============== ==============
Equity
Share capital 11 57,002 57,002
Revenue reserve 12 (5,281,888) (4,582,998)
Distributable reserve 12 43,902,959 43,995,959
Realised capital reserves 12 (14,463,837) (16,502,251)
Unrealised capital reserves 12 (1,710,573) 2,252,265
-------------- --------------
Total Equity GBP22,503,663 GBP25,219,977
============== ==============
Number of Ordinary Shares in issue 11 57,002,026 57,002,026
============== ==============
Net Asset Value per Ordinary Share (pence) 17 39.48p 44.24p
============== ==============
The Financial Statements on pages 17 to 39 were approved by the
Board of Directors and authorised for issue and signed on 17 April
2018 on its behalf by:
Robert King Toby Birch
The notes on pages 21 to 39 form an integral part of these
Financial Statements.
Statement of Cash Flows
For the year ended 31 December 2017
__________________________________________________________________________________
2017 2016
Note GBP GBP
Cash flows from operating activities
(Loss)/profit for the year (2,623,314) 12,808,501
Adjustment for:
Capital loss/(gain) on investments at fair value through profit or loss 1,924,424 (13,475,134)
Operating cash flows before movements in working capital (698,890) (666,633)
Decrease in receivables 8,141 13,148
(Decrease)/increase in payables and accruals (1,201) 32,830
Purchase of investments 7 (10,778,884) (18,412,394)
Proceeds from sale of investments 7 11,882,624 15,984,763
--------------- ---------------
Net cash generated from/(used in) operating activities 411,790 (3,048,286)
Net increase/(decrease) in cash and cash equivalents 411,790 (3,048,286)
Net cash and cash equivalents at beginning of year (4,033,199) (984,913)
Cash and cash equivalents at year end 8 (GBP3,621,409) (GBP4,033,199)
=============== ===============
Supplementary cash flow information
Net cash generated from/(used in) operating activities include: GBP GBP
Interest received on cash balances 15,015 1,406
Interest paid on cash balances (113,571) (64,693)
Income received from investments 98,528 224,047
========== =========
The notes on pages 21 to 39 form an integral part of these
Financial Statements.
Notes to the Financial Statements
For the year ended 31 December 2017
__________________________________________________________________________________
1. COMPANY INFORMATION
Golden Prospect Precious Metals Limited (the 'Company') was
incorporated in Guernsey on 16 October 2006 as an authorised
closed-ended investment scheme under the Protection of Investors
(Bailiwick of Guernsey) Law 1987, as amended. The Company's
registered office is shown on page 43.
The Company's Ordinary Shares are traded on London Stock
Exchange SETS QX with code GPM.
During the year, the Company issued 28,500,995 Subscription
Shares. For further details see note 11.
The Company's Ordinary Shares were admitted to the Official List
of the Channel Islands Stock Exchange ('CISX') on 24 June 2008. The
Channel Islands Securities Exchange rebranded to The International
Securities Exchange ("TISE") on 6 March 2017.
The Company's investment objective is to generate above average
returns for Shareholders primarily through the capital appreciation
of its investments. The Directors believe that such returns can be
obtained by investing in a selective portfolio of securities and
other instruments in the precious metals, diamond and uranium
sectors.
2. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently
in dealing with items which are considered to be material in
relation to the Company's Financial Statements:
Basis of preparation
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as endorsed by
the European Union which comprise standards and interpretations as
issued and approved by the International Accounting Standards Board
('IASB'), and International Financial Reporting Standard
Interpretations ('IFRIC's') that remain in effect, and to the
extent that they have been adopted by the European Union, and
reflect the following policies, which have been adopted and applied
consistently.
Items included in the Company's Financial Statements are
measured using the currency of the primary economic environment in
which it operates ('the functional currency'). The currency in
which the Company's shares are denominated, and in which its
operating expenses are incurred, is Sterling. The Company's
investments are denominated in many different currencies.
Accordingly, the Directors regard Sterling as the functional
currency. The Company has also adopted Sterling as its
presentational currency.
The Financial Statements have been prepared on a historical cost
basis except for the measurement of certain financial assets at
fair value through profit or loss.
Accounting judgements and estimates
The preparation of the Financial Statements in conformity with
IFRS requires management 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.
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounting judgements and estimates (continued)
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of revision and future periods if
the revision affects both current and future periods.
The most significant accounting judgements made by management
are deemed to be the fair value estimation of non-listed
investments described below.
The valuation techniques used by the Company include inputs that
are not based on the observable market data to estimate the fair
value of its unlisted investments. Significant judgement has been
applied by the Directors when valuing these investments.
The Directors believe that the applied valuation techniques and
assumptions used are appropriate in determining the fair value of
unlisted investments. Further details are provided in note 7.
Adoption of new and revised standards
The accounting policies adopted in the year are consistent with
those of the previous financial period, with the exception of new
standards that have become effective during the year. Although
there were a number of new standards and interpretations that apply
for the first time in 2017, none of these had any significant
impact of the Company's Financial Statements.
Standards and interpretations in issue and not yet effective
At the date of authorisation of these Financial Statements, the
following standards and interpretations, which will become relevant
to the Company but have not been applied in these Financial
Statements, were in issue but not yet effective:
- IFRS 9, 'Financial Instruments - Classification and
Measurement' (effective 1 January 2018, as set by the IASB).
- IFRS 7, Financial Instruments Disclosures - Amendments
regarding initial application of IFRS 9* - effective for when IFRS
9 is applied.
- IFRS 15, Revenue from contracts with customers - effective for
periods commencing on or after 1 January 2018.
The Directors have considered the impact of IFRS 9. IFRS 9 will
replace the existing guidance in IAS 39. It includes revised
guidance on the classification and measurement of financial
instruments based on the Company's business model. All of the
existing investments are already fair valued, using either listed
prices or Black Scholes models, in accordance with IAS 39 and the
Company does not issue any debt. On this basis there will be no
material impact on the financial statements with the adoption of
IFRS 9.
These above standards and interpretations will be adopted by the
Company when they become effective. The Directors anticipate that
the adoption of these standards and interpretations in future
periods will not have a material impact on the Financial Statements
of the Company.
The Company has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments
Financial assets and financial liabilities are recognised in the
Statement of Financial Position when the Company becomes a party to
the contractual provisions of the instrument. Financial assets and
financial liabilities are only offset and the net amount reported
in the Statement of Financial Position and Statement of
Comprehensive Income when there is a currently enforceable legal
right to offset the recognised amounts and the Company intends to
settle on a net basis or realise the asset and liability
simultaneously.
Financial assets
The classification of financial assets at initial recognition
depends on the purpose for which the financial asset was acquired
and its characteristics. All financial assets are initially
recognised at fair value. All purchases of financial assets are
recorded at trade date, being the date on which the Company became
party to the contractual requirements of the financial assets. The
Company has not classified any of its financial assets as Held to
Maturity or as Available for Sale. The Company's financial assets
fall within the loans and receivables and financial assets at fair
value through profit or loss categories.
Loans and receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
principally comprise of other receivables and cash balances held
with financial institutions. These are subsequently measured at
amortised cost using the effective interest rate method, less
provisions for impairment. The effect of discounting is
immaterial.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, bank overdrafts
and demand deposits and other short-term highly liquid investments
with an original maturity of three months or less that are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. Bank overdrafts that are
repayable on demand and form an integral part of the Company's cash
management are included as a component of cash and cash equivalents
for the purpose of the Statement of Cash Flows.
Financial assets at fair value
Classification
All investments are classified as 'financial assets at fair
value'. These financial assets are designated by the Board of
Directors at fair value through profit or loss at inception.
Financial assets designated at fair value through profit or loss
at inception are those that are managed and their performance
evaluated on a fair value basis in accordance with the Company's
documented investment strategy. The Company's policy is for the
Investment Manager and the Board of Directors to evaluate the
information about these financial assets on a fair value basis
together with other related financial information.
Recognition
Purchases and sales of investments are recognised on the trade
date, the date on which the Company commits to purchase or sell the
investment.
Derecognition of financial assets
A financial asset (in whole or in part) is derecognised either
(i) when the Company has transferred substantially all the risks
and rewards of ownership; or (ii) when it has neither transferred
nor retained substantially all the risks and rewards and when it no
longer has control over the assets or a portion of the asset; or
(iii) when the contractual right to receive cash flow has expired.
Any gain or loss on derecognition is taken to the Statement of
Comprehensive Income as appropriate.
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial assets at fair value (continued)
Derecognition of financial assets (continued)
Sales of investments awaiting settlement are sales of securities
transacted before the year end with a post year end settlement
date.
Measurement
Financial assets at fair value are initially recognised at fair
value. Subsequent to initial recognition, all financial assets at
fair value through profit or loss are measured at fair value. Gains
and losses arising from changes in the fair value of the 'financial
assets at fair value' category are presented in the Statement of
Comprehensive Income in the period in which they arise.
Fair value estimation
The fair value of financial assets traded in active markets is
based on quoted market prices at the Statement of Financial
Position date. The quoted market price used for the financial
assets held by the Company is the bid price at the close of the
respective market at the Statement of Financial Position date. Debt
securities are carried at fair value using discounted cash flow
techniques/models. Warrants are carried at fair value using
standard Black Scholes valuation models. Further details are
disclosed in note 7. Unlisted investments are carried at such fair
value as the Directors consider appropriate given the performance
of each investee company and after considering the financial
position of the entity, latest news and developments.
Fair value measurement hierarchy
IFRS 13 requires disclosure of fair value measurements by level
of the following fair value measurement hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2).
- Inputs for the asset or liability that are not based on
observable market data (unobservable inputs) (Level 3).
The level in the fair value hierarchy within which the financial
asset or financial liability is categorised is determined on the
basis of the lowest input that is significant to the fair value
measurement. Financial assets and financial liabilities are
classified in their entirety into one of the three levels.
For financial instruments that are recognised at fair value on a
recurring basis, the Board determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each
reporting period.
Financial liabilities
The classification of financial liabilities at initial
recognition depends on the purpose for which the financial
liability was issued and its characteristics. All financial
liabilities are initially recognised at fair value net of
transaction costs incurred. The Company's financial liabilities
only consist of financial liabilities measured at amortised
cost.
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial liabilities (continued)
Financial liabilities measured at amortised cost
These include payables and other short-term monetary
liabilities, which are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
rate method. Bank borrowings are initially recognised at fair value
net of attributable transactions costs incurred. Such interest
bearing liabilities are subsequently measured at amortised cost
using the effective interest rate method.
Derecognition of financial liabilities
A financial liability (in whole or in part) is derecognised when
the Company has extinguished its contractual obligations, it
expires or is cancelled. Any gain or loss on derecognition is taken
to the Statement of Comprehensive Income.
Interest income and expense
Interest income and interest expense are recognised within the
Statement of Comprehensive Income using the effective interest rate
method.
Income
All other income is accounted for on an accrual basis and is
recognised in the Statement of Comprehensive Income.
Expenses
Expenses are accounted for on an accrual basis and are
recognised in the Statement of Comprehensive Income. Expenses in
relation to share issues are treated as a component of equity
within the Distributable Reserve.
Capital reserves
Gains and losses recorded on the realisation of investments are
accounted for in the Realised Capital Reserve. Unrealised gains and
losses recorded on the revaluation of investments held at the year
end and unrealised exchange differences on investments are
accounted for in the Unrealised Capital Reserve.
Revenue reserves
All income and expenses are accounted for in the Revenue
Reserve.
Translation of foreign currency
Transactions in currencies other than the functional currency
are recorded using the exchange rate prevailing at the transaction
date. Foreign exchange gains and losses resulting from the
settlement of such transactions and those from the translation at
period end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement
of Comprehensive Income.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board. The chief operating
decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been
identified as the Board of Directors of the Company.
For management purposes, the Company is organised into one main
operating segment, which invests in precious metals securities
which are principally listed on the stock exchanges of London,
Toronto and Sydney. All of the Company's activities are
interrelated, and each activity is based upon analysis of the
Company as one segment.
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Segmental reporting (continued)
On a day to day basis investment decisions have been delegated
to the Investment Manager, New City Investment Managers.
The Company does not hold any non-current assets which require
disclosure under IFRS 8. The Company also does not have any
external customers and therefore the disclosure of customers
geographically required under IFRS 8 is not applicable. However,
for additional information, the fair value of each geographical
base and the respective percentages of the total value of the
Company can be found in the Portfolio Statement beginning on page
40.
3. TAXATION
The Company has been granted exemption from Guernsey taxation
and has paid an annual exemption fee for the year of GBP1,200
(2016: GBP1,200). It should be noted, however, that interest and
dividend income accruing from the Company's investments may be
subject to withholding tax in the country of origin.
The Company has suffered withholding tax in the year under
review of GBP14,916 (31 December 2016: GBP37,651).
4. DISTRIBUTION TO SHAREHOLDERS
The Directors do not expect income (net of expenses) to be
significant and do not currently expect to declare any cash
dividends. In the event that net income is significant, the
Directors may consider the distribution of net income in the form
of cash dividends. To the extent that any cash dividends are paid,
they will be paid in accordance with any applicable laws and the
regulations of the TISE.
5. RELATED PARTY TRANSACTIONS AND OTHER SIGNIFICANT AGREEMENTS
Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
Directors' Fees
The Directors are responsible for the determination of the
investment policy of the Company and have overall responsibility
for the Company's activities. Up until 31 March 2017 all Directors
were entitled to remuneration for their services of GBP12,000 per
annum. From 1 April 2017 all Directors are entitled to remuneration
for their services of GBP16,000 per annum. During the year
Directors' fees of GBP60,000 were charged to the Company (2016:
GBP48,000) and GBP12,000 was payable at the year end (31 December
2016: GBP12,000). All Directors are non-executive.
Other significant agreements
Investment Manager
The Investment Manager, New City Investment Managers (a trading
name of CQS (UK) LLP, previously CQS Asset Management Limited) is
entitled to an annual management fee, payable monthly in arrears,
of 1.25% of the Company's Net Asset Value. The Investment Manager
is also entitled to reimbursement of certain expenses incurred by
it in connection with its duties. During the year investment
management fees of GBP306,142 were charged to the Company (2016:
GBP312,889) and GBP45,996 was payable at the year end (2016:
GBP54,005).
5. RELATED PARTY TRANSACTIONS AND OTHER SIGNIFICANT AGREEMENTS (continued)
Investment Manager (continued)
The Investment Manager is also entitled to receive an annual
performance fee equal to 20% of the increase in the Company's Net
Asset Value on the last Trading Day of each calendar period, above
an annual hurdle for growth of 8% and subject to a high water mark.
During the year no performance fees had accrued to the Investment
Manager (2016: GBPnil).
Administrator
The Company's Administrator is Maitland Administration
(Guernsey) Limited (formerly R&H Fund Services (Guernsey)
Limited). In consideration for the services provided by the
Administrator under the Administration Agreement, the Administrator
is entitled to receive from the Company an annual fee of GBP65,000
per annum payable quarterly in arrears. During the year
administration fees of GBP65,000 were charged to the Company (2016:
GBP65,000) and GBP16,250 was payable at the year end (2016:
GBP16,250).
Custodian Fees
The Company's Custodian is Credit Suisse AG Dublin Branch.
Custodian fees are charged monthly at 5 basis points based on the
Company's assets under management. During the year custodian fees
of GBP14,294 were charged to the Company (2016: GBP12,165) and
GBP1,037 was payable at the year end (2016: GBPnil).
Depositary Fees
The Company's Depositary is INDOS Financial Limited. In
consideration for the services provided by the Depositary under the
Depositary Agreement, the Depositary is entitled to receive from
the Company an annual fee of 0.02% of the Company's Net Asset Value
up to GBP150 million; 0.015% up to GBP300 million; 0.0125% up to
GBP450 million and 0.015% thereafter, subject to a minimum fee of
GBP1,400 per month. During the year depositary fees of GBP16,800
were charged to the Company (2016: GBP16,850) and GBP5,512 was
payable at the year end (2016: GBP1,476).
Financial Adviser and Corporate Broker
The Company's Financial Adviser and Corporate Broker ('Financial
Adviser') is Cantor Fitzgerald. Under the agreement, the Financial
Adviser is entitled to receive from the Company an annual fee of
GBP17,500 per annum payable quarterly in advance. During the year
financial adviser fees of GBP17,500 (2016: GBP17,374) were charged
to the Company and GBPnil (2016: GBPnil) was payable at the year
end.
Registrar Fees
The Company's Registrar is Computershare Investor Services
(Guernsey) Limited. In consideration for the services provided by
the Registrar under the Registrars Agreement, the Registrar is
entitled to receive from the Company an annual fee of GBP8,100 per
annum payable monthly in arrears as well as all reasonable
out-of-pocket expenses. During the year registrar fees of GBP14,905
were charged to the Company (2016: GBP10,563) and GBP1,878 was
payable at year end (2016: GBP849).
6. BASIC AND DILUTED (LOSS)/EARNINGS PER ORDINARY SHARE
Basic (loss)/earnings per Ordinary Share is calculated by
dividing the comprehensive loss for the year of GBP2,623,314 (2016:
gain GBP12,808,501) by the weighted average number of Ordinary
Shares outstanding during the year. The weighted average number of
Ordinary Shares for the year is 57,002,026 (2016: 57,002,026). The
28,500,995 Subscription Shares are non-dilutive as at 31 December
2017 as the average share price for the period was below the
exercise price together with the Company making a loss. Assuming
all Subscription Shares are exercised at the first possible
opportunity, being the last business day in November 2018, and
given no further changes in share capital of the Company, the
(loss)/earnings per Ordinary Share is expected to be diluted by
4%.
7. INVESTMENTS AT FAIR VALUE
Details of the significant accounting policies and methods
adopted by the Company, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are
recognised, in respect of its financial assets and liabilities are
disclosed in note 2. The following table analyses the fair value of
the Company's financial assets and liabilities by category as
defined in IFRS 13.
Fair Value Fair Value Fair Value Fair Value
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Opening fair value at 1 January 2017 28,211,439 1,141,090 - 29,352,529
Purchases 10,653,853 125,031 - 10,778,884
Sales (11,005,965) (876,659) - (11,882,624)
Transfers - - -
Gain/(loss)
- realised 1,930,072 108,342 - 2,038,414
- unrealised (4,173,853) 211,015 - (3,962,838)
-----------
Closing fair value at 31 December 2017 25,615,546 708,819 - 26,324,365
============= =========== =========== =============
Split by:
Listed equities 25,615,546 - - 25,615,546
Bonds - - - -
Warrants - 708,819 - 708,819
----------- -------- -----------
25,615,546 708,819 - 26,324,365
=========== ======== ===========
During the year ended 31 December 2017 there were no transfers
of fair value measurements between the levels. There are two
investments held at Level 3 with a total value of nil.
7. INVESTMENTS AT FAIR VALUE (continued)
Please refer to pages 40 to 42 for an analysis of financial
assets at fair value through profit or loss which are disclosed
above.
Fair Value Fair Value Fair Value Fair Value
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Opening fair value at 1 January 2016 12,949,568 500,196 - 13,449,764
Purchases 18,016,120 396,274 - 18,412,394
Sales (15,984,763) - - (15,984,763)
Transfers - - - -
Gain/(loss)
- realised 3,900,219 - - 3,900,219
- unrealised 9,330,295 244,620 - 9,574,915
-----------
Closing fair value at 31 December 2016 28,211,439 1,141,090 - 29,352,529
============= =========== =========== =============
Fair Value Fair Value Fair Value Fair Value
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Split by:
Listed equities 28,211,439 - - 28,211,439
Bonds - 754,562 - 754,562
Warrants - 386,528 - 386,528
----------- ----------- ----------- -----------
28,211,439 1,141,090 - 29,352,529
=========== =========== =========== ===========
During the year ended 31 December 2016 there were no transfers
of fair value measurements between the levels. There were two
investments held at Level 3 with a total value of nil.
Net (losses)/gains on financial assets at fair value through
profit or loss:
2017 2016
GBP GBP
Realised gain on financial assets
designated as at fair value through profit or loss 2,038,414 3,900,219
Net unrealised (losses)/gain on financial assets
designated as at fair value through profit or loss (3,962,838) 9,574,915
--------------- --------------
Net capital (losses)/gains on financial assets (1,924,424) GBP13,475,134
Dividend income and interest on bonds 87,530 208,890
Total net (losses)/gains on financial assets (GBP1,836,894) GBP13,684,024
=============== ==============
7. INVESTMENTS AT FAIR VALUE (continued)
Valuation techniques used in the determination of fair values,
including the key inputs used, are as follows:
Fair value
hierarchy
Item level Valuation techniques
Financial assets at fair Level 1 Fair value is the quoted
value through profit or bid price
loss - Listed equity securities
Financial assets at fair Level 2 The fair value of prior
value through profit or year debt securities was
loss - Debt securities calculated as the present
value of the estimated future
cash flows based on observable
gold price, time value and
discount rates.
Financial assets at fair Level 2 The fair value of warrants
value through profit or has been calculated using
loss - Warrants the underlying listed prices,
expiry dates and observable
future volatility.
The Directors believe that the use of reasonable possible
alternative assumptions for its two Level 3 holdings would not
result in a valuation materially different from the valuation of
nil included in these financial statements.
8. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise the following:
2017 2016
GBP GBP
Cash at bank 1,609,584 61,400
Bank overdraft (5,230,993) (4,094,599)
(GBP3,621,409) (GBP4,033,199)
=============== ===============
Credit Suisse AG Dublin Branch ('CSAGDB') may determine from
time to time the overdraft limit it will provide to the Company and
may provide reasonable notice in writing of such an amount.
Overdraft interest is calculated on a daily basis using the one
month Libor rate plus 175 basis points and is charged to the
Company on a monthly basis. In order to satisfy CSAGDB of
liquidity, a margin requirement is calculated to establish a net
equity and cash position that must be maintained as collateral. If
the Company falls into deficit then more funds are called. If the
margin calls are not met then CSAGDB can call in all outstanding
funds. At no point during the year did the Company fall into
deficit and at the year end the Company held an excess over the
margin requirement of GBP11,453,570 (2016: GBP13,764,177 ).
The overdraft interest during the year of GBP112,532 (2016:
GBP64,693) represents the only gain or loss on financial
liabilities measured at amortised cost.
In addition to the above there is a provision for an event of
default where the NAV changes from the previous highest NAV of the
previous calendar year by more than 50%, 40% for the previous 3
months and 20% for the previous month. These are monitored on a
monthly basis and the Directors confirm there were no breaches in
the year.
9. RECEIVABLES
2017 2016
GBP GBP
Bond interest receivable - 9,540
General expenses prepaid 6,999 6,786
Bank interest receivable 1,462 276
GBP8,461 GBP16,602
========= ==========
The Directors consider that the carrying amount of receivables
approximates their fair value due to their short term nature.
10. PAYABLES AND ACCRUALS
2017 2016
GBP GBP
Subscription share issue costs (note 11) 93,000 -
Investment management fee payable (note 5) 45,996 54,005
Audit fee 20,000 20,000
Administration fee payable (note 5) 16,250 16,250
Directors' fees payable (note 5) 12,000 12,000
Bank overdraft interest (note 8) 10,080 11,119
Depositary fee payable (note 5) 5,512 1,476
Sundry creditor 3,038 256
Registrar fee payable (note 5) 1,878 849
GBP207,754 GBP115,955
=========== ===========
The Directors consider that the carrying amount of payables and
accruals approximates their fair value due to their short term
nature.
11. SHARE CAPITAL
Authorised Share Capital as at 31 December 2017 and 31 December
2016
No. of shares GBP
Ordinary Shares of GBP0.001 par value 200,000,000 GBP200,000
Subscription Shares of no par value 28,500,995 -
-------------- -----------
No. of Shares Share Capital
2017 2016 2017 2016
Issued and Fully Paid Share Capital GBP GBP
Equity Shares
Ordinary Shares of GBP0.001 each at inception
As at 1 January 57,002,026 57,002,026 57,002 57,002
Issued during the year - - - -
-------------- ----------- ------- -------
As at 31 December 57,002,026 57,002,026 57,002 57,002
-------------- ----------- ------- -------
11. SHARE CAPITAL (continued)
Ordinary Shareholders are entitled to one vote for each Ordinary
Share held and are entitled to receive any distributions declared
by the Company. On a winding-up, the Ordinary Shareholders shall be
entitled, pro rata to their holdings, to all the assets of the
Company available for distribution to Shareholders.
On 22 December 2017, the Company issued Subscription Shares for
nil consideration to all registered shareholders, by way of bonus
issue, on the basis of one Subscription Share for every two
existing ordinary shares held on the 20 December 2017. No fractions
of Subscription Shares were issued so the actual number issued was
28,500,995. Each Subscription Share confers the right, but not the
obligation, to subscribe for one Ordinary Share. The subscription
rights may be exercised annually on the last business day in
November 2018 for 40.37p; in November 2019 for 42.30p and in
November 2020 for 46.14p, after which time the subscription rights
will lapse.
The costs incurred in relation to the issue of Subscription
Shares of GBP93,000 are accounted for as a component of equity
through the Distributable Reserve.
12. RESERVES
Revenue Reserve
Any surplus/(deficit) arising from total comprehensive income is
taken to this reserve, which may be utilised for the buy-back of
shares and payments of dividends.
Distributable Reserve
The Distributable Reserve can be used for all purposes permitted
under Guernsey company law, including the buy-back of shares and
payment of dividends.
Realised Capital Reserve
The Realised Capital Reserve contains realised gains and losses
on the disposal of investments, together with any expenses
allocated to capital.
Unrealised Capital Reserve
The Unrealised Capital Reserve contains unrealised increases and
decreases in the fair value of the Company's investment
portfolio.
13. FINANCIAL RISK MANAGEMENT
The Company is exposed to a variety of financial risks as a
result of its activities. These risks include credit risk,
liquidity risk and market risk (including currency risk, fair value
interest rate risk and price risk). The Company's risk management
policies, approved by the Board of Directors, seek to minimise the
potential adverse effects of these risks on the Company's financial
performance.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Company.
As at the date of the Statement of Financial Position, financial
assets exposed to credit risk comprise bank balances and
receivables. It is the opinion of the Board of Directors that the
carrying amount of these
13. FINANCIAL RISK MANAGEMENT (continued)
Credit risk (continued)
financial assets represents the maximum credit risk exposure as
at the date of the Statement of Financial Position.
As at 31 December 2017 there was no financial assets which were
past due or impaired (31 December 2016: none).
The Board of Directors is satisfied that the Company's
transactions are concluded with a suitably approved counterparty
with an appropriate credit quality, CSAGDB currently has a Standard
and Poor's credit rating of A-1/A (31 December 2016: A-1/A). The
Investment Manager carefully selects debt securities with
counterparties displaying the necessary experience and financial
stability. The Company's exposures to these counterparties, and
their credit rating or financial results, are monitored by
management. The following table illustrates the credit
concentration by category:
2017 2016
GBP GBP
Debt securities - 754,562
Cash and cash equivalents:
Credit Suisse AG Dublin Branch 1,609,584 61,400
Receivables 1,462 9,816
Total assets at credit risk GBP1,611,046 GBP825,778
============= ===========
Liquidity risk
Liquidity risk is the risk that the Company will encounter in
realising assets or otherwise raising funds to meet financial
commitments.
Whilst most of the Company's financial assets are listed
securities which are considered readily realisable as they are
listed on major recognised stock exchanges, some of the financial
assets held by the Company may not be listed on recognised stock
exchanges and so will not be readily realisable and their
marketability may be restricted. The Company might only be able to
liquidate these positions at disadvantageous prices, should the
Investment Manager determine, or it become necessary, to do so. The
fair value of these financial assets as at 31 December 2017 amounts
to GBP708,819 (2016: GBP1,141,090).
13. FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk (continued)
The following table details the Company's liquidity analysis for
its financial liabilities. The table has been drawn up based on the
undiscounted net cash flows on the financial liabilities that
settle on a net basis and the undiscounted gross cash flows on
those financial liabilities that require gross settlement.
1 year 2017
Less than 1 month 1-3 months 3 months to 1 year to 5 years Total
GBP GBP GBP GBP GBP
Gross settled:
Bank overdraft 5,230,993 - - - 5,230,993
Bank overdraft interest 10,080 - - - 10,080
Investment management fee
payable 45,996 - - - 45,996
Subscription share issue costs - - 93,000 - 93,000
Administration fee payable 16,250 - - - 16,250
Directors' fees payable 12,000 - - - 12,000
Audit fee - - 20,000 - 20,000
Depositary fee payable 5,512 - - - 5,512
Sundry creditor 4,916 - - - 4,916
GBP5,325,747 GBP- GBP113,000 GBP- GBP5,438,747
------------------ ----------- ------------------- ------------ -------------
1 year 2016
Less than 1 month 1-3 months 3 months to 1 year to 5 years Total
GBP GBP GBP GBP GBP
Gross settled:
Bank overdraft - 4,094,599 - - 4,094,599
Bank overdraft interest 11,119 - - - 11,119
Investment management fee
payable 54,005 - - - 54,005
Administration fee payable 16,250 - - - 16,250
Directors' fees payable 12,000 - - - 12,000
Audit fee - - 20,000 - 20,000
Depositary fee payable 1,476 - - - 1,476
Sundry creditor 1,105 - - - 1,105
GBP95,955 GBP4,094,599 GBP20,000 GBP- GBP4,210,554
------------------ ------------- ------------------- ------------ -------------
CSAGDB as Custodian has a fixed charge on all the Company's cash
and investments held by Credit Suisse in return for services
provided including execution of transactions, custody of
investments and financing. As per note 8 CSAGDB also calculates a
margin requirement to establish a net cash and equity position that
must be maintained as collateral. As at the year end the Company
had a significant excess over this requirement. Should there be a
deficit at any point CSAGDB is entitled to call in all outstanding
funds.
13. FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk (continued)
The Investment Manager manages liquidity and margin on a daily
basis. The Company's overall exposure to liquidity risk is
monitored by the Board of Directors on a quarterly basis.
Market Risk
The Company's activities expose it primarily to the market risks
of changes in market prices, interest rates and foreign currency
exchange rates.
Price risk
Price risk is the risk that the fair value of future cash flows
of a financial instrument will adversely fluctuate because of
changes in market prices (other than those arising from interest
rate risk or currency risk).
The Company is exposed to market price risk arising from its
financial assets designated as at fair value through profit or
loss. The performance of these financial assets will be affected by
the performance of the investee companies. The exploration,
development and production of metal and mineral deposits involve
significant uncertainties and the investee companies will be
subject to all the hazards and risks normally encountered in such
activities. Many of these are difficult to predict and are outside
the control of the investee companies. They include, amongst
others, issues relating to the environment, the climate, the
geographical environment, local and international regulatory
requirements, licensing terms, planning permission, unexpected
geological formations, rock falls, flooding, pollution, legal
liabilities, the availability and reliability of plant and
equipment, the scaling-up of operations, the reliance on key
individuals, local finance and tax regimes, foreign currency
repatriation, capital and budget constraints, contractors and
suppliers, local employment regulations and practices, employment
unions and the availability of suitable labour. In addition, there
is often no guarantee that the estimates of quantities and grades
of metals and minerals disclosed by investee companies will be
available for extraction.
The Company's financial assets are exposed to market price
fluctuations which are monitored by the Investment Manager in
pursuance of the Company's investment objectives and policies.
Adherence to investment guidelines and to investment and borrowing
powers set out in the Placing and Offer for Subscription document
mitigates the risk of excessive exposure to any particular type of
security or issuer. However, with respect to the investment
strategy utilised by the Company there is always some, and
occasionally some significant, degree of market risk.
Price sensitivity
The value of the Company's financial assets had a sensitivity of
GBP7,897,310 (2016: GBP8,805,759 ) to a 30% (2016: 30%) increase or
decrease in the market prices with other variables being held
constant as at 31 December 2017. A 30% change is the sensitivity
rate currently used when reporting price risk internally to key
management personnel.
13. FINANCIAL RISK MANAGEMENT (continued)
Interest rate risk
Interest rate risk is the risk that the fair value of future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
The Company is directly exposed to interest rate risk as it
holds cash and cash equivalents which are invested at short term
rates and debt securities, when held, which receive interest at a
fixed rate and on the bank overdraft. The Investment Manager
manages the Company's exposure to interest rate risk on a daily
basis in accordance with the Company's investment objectives and
policies. The Company's overall exposure to interest rate risk is
monitored on a quarterly basis by the Board of Directors.
Returns from debt securities are fixed at the time of purchase,
as the fixed coupon payments are known, as are the final redemption
proceeds. Consequently, if such a debt security is held until its
redemption date, the total return achieved is unaltered from its
purchase date. However over its life the market price at any given
time will depend on the market environment at that time. Therefore,
a debt security sold before its redemption date is likely to have a
different price from its purchase level and a profit or loss may be
generated. Interest rate risk on fixed interest debt securities is
considered to be part of market price risk as disclosed above.
The following table analyses the Company's interest rate risk
exposure. The Company's assets and liabilities are included at fair
value and categorised by the earlier of contractual re-pricing or
maturity dates. There are no assets or liabilities maturing within
four to twelve months of the year end.
0-3 Months 1-5 Years Total
As at 31 December 2017 GBP GBP GBP
Variable rate assets
Cash and cash equivalents 1,609,584 - 1,609,584
Fixed rate assets
Debt securities - - -
------------ ---------- ------------
Total interest bearing assets 1,609,584 - 1,609,584
------------ ---------- ------------
Variable rate liabilities
Bank overdraft (5,230,993) - (5,230,993)
------------ ---------- ------------
Total interest bearing liabilities (5,230,993) - (5,230,993)
------------ ---------- ------------
13. FINANCIAL RISK MANAGEMENT (continued)
Interest rate risk (continued)
0-3 Months 1-5 Years Total
As at 31 December 2016 GBP GBP GBP
Variable rate assets
Cash and cash equivalents 61,400 - 61,400
Fixed rate assets
Debt securities - 754,562 754,562
------------ ---------- ------------
Total interest bearing assets 61,400 754,562 815,962
------------ ---------- ------------
Variable rate liabilities
Bank overdraft (4,094,599) - (4,094,599)
------------ ---------- ------------
Total interest bearing liabilities (4,094,599) - (4,094,599)
------------ ---------- ------------
All other assets and liabilities of the Company are non-interest
bearing.
Interest rate sensitivity
The sensitivity analysis has been determined based on the
Company's exposure to interest rates for interest bearing assets
and liabilities at the date of the Statement of Financial Position
and the stipulated change taking place at the beginning of the
financial period and held constant throughout the reporting period
in the case of instruments that have floating rates.
If interest rates had been 25 basis points higher or lower and
all other variables had been held constant, the Company's net
assets attributable to holders of Ordinary Shares at the year end
would have been GBP8,253
(2016: GBP7,412) lower or higher due to the change in the
interest payable on the bank overdraft and the interest receivable
on cash and cash equivalents.
Currency risk
Currency risk is the risk that the fair value of future cash
flows of a financial instrument will fluctuate because of changes
in foreign currency exchange rates. The presentation currency of
the Company is Sterling. The majority of the Company's financial
assets are currently denominated in various currencies other than
Sterling and the Company may hold other financial instruments, the
price of which may be determined with reference to currencies other
than Sterling.
To the extent that these financial instruments are unhedged, or
are not adequately hedged, the value of the Company's financial
instruments may fluctuate with exchange rates as well as with price
changes in various local markets and currencies. The value of the
financial assets may therefore be affected unfavourably by
fluctuations in currency rates and exchange control regulations.
The Investment Manager has the power to manage exposure to currency
movements by using hedging instruments.
There were no hedging instruments held at the year end or used
in the year (2016: None).
13. FINANCIAL RISK MANAGEMENT (continued)
Currency risk (continued)
The carrying amounts of the Company's foreign currency
denominated financial assets and financial liabilities at the date
of the Statement of Financial Position were as follows:
2017 2016
Assets Liabilities Assets Liabilities
GBP GBP GBP GBP
Australian Dollar (AUD) 8,520,437 - 7,108,510 (2,355,916)
Canadian Dollar (CAD) 15,285,299 (65,590) 18,244,469 (1,023,205)
United Stated Dollar (USD) 4,124,953 - 2,765,826 (706,780)
Swiss Franc (CHF) 218 - 228 -
Mexican Peso (MXN) 4,504 - 1,304,713 -
27,935,411 (65,590) 29,423,746 (4,085,901)
----------- ------------ ----------- ------------
Foreign currency sensitivity
The Company is mainly exposed to AUD, CAD and USD.
The following table details the Company's sensitivity to a 10%
(2016: 10%) increase or decrease in Sterling against the relevant
foreign currencies. A 10% change is the sensitivity rate currently
used when reporting foreign currency risk internally to key
management personnel. The sensitivity analysis includes only
outstanding foreign currency denominated financial assets and
financial liabilities and adjusts their translation at the year end
for a 10% change in the foreign currency rates. A positive number
indicates an increase in net assets attributable to holders of
Ordinary Shares where Sterling weakens against the relevant
currency and a negative number indicates a decrease in net assets
where Sterling strengthens against the relevant currency.
AUD CAD USD MXN
31 December 2017 GBP GBP GBP GBP
Change in net assets in response to a 946,715 1,691,679 458,328 500
10% change in foreign currency rates (774,585) (1,383,610) (374,996) (409)
---------- ------------ ---------- ----------
31 December 2016
Change in net assets in response to a 528,066 1,913,474 228,783 144,968
10% change in foreign currency rates (432,054) (1,565,569) (187,186) (118,610)
---------- ------------ ---------- ----------
13. FINANCIAL RISK MANAGEMENT (continued)
Capital management
The primary objective of the Company's capital management is to
ensure that it maintains shareholder value and that it is able to
continue as a going concern. The Company manages its capital
structure and, where necessary, makes adjustments to it in light of
changes in economic conditions. The Company's overall strategy
remains unchanged from the prior year.
The capital structure of the Company consists of net debt, as
disclosed in note 8 and equity as per note 11.
The Company is not exposed to any externally imposed capital
requirements.
The Company expects to meet its other obligations for operating
cash flows at the Statement of Financial Position date. The Company
expects to maintain its current debt to equity security ratio of
30%.
14. EVENTS AFTER THE FINANCIAL REPORTING DATE
Mr Kaare Foy resigned from the Board of Directors and as
Chairman of the Audit Committee with effect from 17(th) April 2018.
Mr Graeme Ross was appointed to the Board of Directors and as
Chairman of the Audit Committee with effect from 17(th) April
2018.
15. CONTROLLING PARTY
The issued Ordinary Shares of the Company are owned by numerous
parties and therefore, in the opinion of the Directors, there is no
immediate or ultimate controlling party of the Company.
16. NAV RECONCILIATION
2017 2016
GBP GBP
Net Asset Value per financial statements GBP22,503,663 GBP25,219,977
Number of Ordinary Shares in issue at the year end 57,002,026 57,002,026
IFRS NAV per Ordinary Share 39.48p 44.24p
Issued NAV per Ordinary Share 40.03p 44.76p
The difference in IFRS NAV per Ordinary Share to the Issued NAV
per Ordinary Share relates to the pricing of the Investment
Portfolio which is valued at a bid price for accounting purposes
under IFRS and mid price for the Issued NAV purposes.
Unaudited Portfolio Statement
As at 31 December 2017
__________________________________________________________________________________
Fair
Value % of Total
Description Holding GBP Net Assets
Equities
Australia
Amani Gold 17,263,141 219,478 0.98
Ausgold Ltd 3,375,000 60,462 0.27
Cardinal Resources 2,807,991 811,361 3.61
Doray Minerals 3,769,418 446,557 1.98
Independence Group 484,176 1,331,860 5.92
Lachlan Star Ltd * 600,000 - -
Metals X 535,836 320,495 1.42
Oklo Resources 250,000 58,512 0.26
S2 Resources 628,898 79,956 0.36
Troy Resources 7,821,268 438,427 1.95
West African Resources 10,782,920 2,461,399 10.93
Westgold Resources 2,072,258 2,095,706 9.31
8,324,213 36.99
-------------------- ---------------------
Canada
Americas Silver 575,799 1,541,953 6.85
Asanko Gold 1,554,583 805,166 3.58
Ascendant Resources 1,980,087 827,430 3.68
Bluestone Resources 275,000 178,039 0.79
Columbus Gold 367,000 164,160 0.73
Continental Gold 570,000 1,127,205 5.01
Dalradian Resources 301,879 230,975 1.03
First Majestic Silver Corp 28,140 140,114 0.62
Fortuna Silver Mines 473,118 1,823,894 8.09
Guyana Goldfields 521,610 1,553,407 6.90
Integra Resources (Placement) 588,333 380,894 1.69
Klondex Mines 303,455 582,238 2.59
Liberty Gold 1,251,000 323,965 1.44
Lydian International 3,058,000 665,929 2.96
Mandalay Resources 2,660,396 414,936 1.84
Pretium Resources 30,000 251,961 1.12
Pure Gold Mining (Placement) 962,000 317,068 1.41
Roxgold 1,833,859 1,489,477 6.62
Sabina Gold & Silver 388,435 516,673 2.30
Santacruz Silver Mining 1,828,243 107,603 0.48
Fair
Value % of Total
Description Holding GBP Net Assets
Equities - continued
Canada - continued
Tahoe Resources Inc 168,700 598,716 2.66
Trevali Mining 416,667 370,301 1.65
West African Resources 1,273,381 284,794 1.27
-------------------- ---------------------
14,696,898 65.31
-------------------- ---------------------
United Kingdom
DB Physical Rhodium 7,904 830,952 3.69
Sovereign Bauxite of Guinea Ltd * 100,000 - -
830,952 3.69
-------------------- ---------------------
United States
First Majestic Silver 95,000 473,347 2.10
MAG Silver 35,000 319,501 1.42
Platinum Group Metals 571,556 127,877 0.57
Pretium Resources 99,852 842,758 3.74
1,763,483 7.83
-------------------- ---------------------
Total Equities 25,615,546 113.82
-------------------- ---------------------
Warrants
American Silver 10/02/2019 *(2) 250,000 492,917 2.19
American Silver 09/06/2021*(2) 1,148,279 - -
American Silver 16/06/2021*(2) 364,060 - -
Ascendant Resources 09/03/2022 514,043 69,585 0.31
Condor Gold 16/109/2018 *(2) 277,777 - -
Liberty Gold Equity 16/05/2019 677,000 25,899 0.12
Santacruz Silver Mining 493,750 - -
Westgold Resources 926,106 120,418 0.54
Total Warrants 708,819 3.16
-------------------- ---------------------
Fair
Value % of Total
Description GBP Net Assets
Total investments 26,324,365 116.98
Other current assets less payables and accruals 1,410,291 6.27
Bank overdraft (5,230,993) (23.25)
---------------- -----------------
Total Net Assets 22,503,663 100.00
================ =================
* Level 3 unlisted equities
*(2) Level 2 unlisted warrants
Management and Administration
_______________________________________________________________________
Directors
Malcolm Burne
Toby Birch
Kaare Foy (resigned 17 April 2018)
Robert King
Graeme Ross (appointed 17 April 2018)
Details available at - www.ncim.co.uk
Secretary and Administrator
Maitland Administration (Guernsey) Limited
(formerly R&H Fund Services (Guernsey) Limited)
1 Le Truchot
St Peter Port
Guernsey
GY1 1WD
Registered office
1 Le Truchot
St Peter Port
Guernsey
GY1 1WD
Investment Manager
CQS Cayman Limited Partnership
P.O. Box 242
45 Market Street
Gardenia
Camana Bay
Grand Cayman KY1-1104
Cayman Islands
Note: the Company has appointed CQS as its investment manager.
However, CQS has, with the agreement of the Board, delegated that
function to NCIM.
New City Investment Managers
(a trading name of CQS (UK) LLP, previously CQS Asset Management
Limited)
1 Strand
London
WC2N 5HR
AIFM
CQS (UK) LLP
1 Strand
London
WC2N 5HR
Independent Auditor to the Company
BDO Limited
P.O. Box 180
Rue du Pré
St Peter Port
Guernsey
GY1 3LL
Depositary
INDOS Financial Limited
25 North Row
London
W1K 6DJ
Principal Bankers and Custodian
Credit Suisse AG Dublin Branch
Kilmore House
Park Lane, Spencer Dock
Dublin 1
Financial Adviser and Broker to the Company
Cantor Fitzgerald Europe L.P.
One Churchill Place
Canary Wharf
London
EH14 5RD
TISE Sponsor
Ogier Corporate Finance Limited
44 Esplanade
St Helier
Jersey
JE4 9WG
Registrar and CREST Agent
Computershare Investor Services (Guernsey) Limited
c/o Queensway House
Hilgrove Street
St Helier
Jersey JE1 1ES
Advocates to the Company as to Guernsey Law
Babbé
18-20 Smith Street
St Peter Port
Guernsey
GY1 4BL
Solicitors to the Company as to English Law
Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
Market Makers
Nplus 1 Singer Limited
One Bartholomew Lane
London EC2N 2AX
Winterflood Securities
25 Dowgate Hill
London EC4R 2GA
Shore Capital
Bond Street House
14 Clifford Street
London W15 4JU
KBC Peel Hunt
111 Old Broad Street
London EC2N 1PH
Cantor Fitzgerald Europe
17 Crosswall
London EC3N 2LB
Golden Prospect Precious Metals Limited
Registered Office Address: 1 Le Truchot, St. Peter Port,
Guernsey, GY1 1WD
Registration Number: 45676
Golden Prospects Precious Metals Limited
Unaudited Report of the UK Investment Adviser Relating to
Matters under the Alternative Investment Fund Managers'
Directive
For the year ended December 31, 2017
Risk management systems
The Company's Offering Memorandum sets out the risks to which
the Company is exposed. The UK Investment Adviser employs risk
management disciplines which monitor the Company's portfolio and to
quantify and manage the associated market and other risks. A
permanent independent department has been established by the UK
Investment Adviser to perform the risk management function. The
risk management and performance analysis team ("RMPA") is led by
the Chief Risk Officer and is functionally and hierarchically
separate from the operating units of the portfolio managers of the
Company.
RMPA is a dedicated control function over the operating units of
the Investment Adviser and is not involved in the performance
activities of the Company. RMPA has designed, documented and
implemented effective risk management policies, processes and
procedures in order to identify, quantify, analyse, monitor, report
on and manage all material risks relevant to the Company's
investment strategy. The systems include third party vendor
applications such as Tradar, Sungard Front Arena and MSCI Risk
Metrics, complemented with a number of proprietary
applications.
Material changes to information required to be made available to
investors of the Company
The following limit has been implemented effective 12 July 2017
in response to Regulation (EU) 2015/2365 of the European Parliament
and of the Council of 25 November 2015 on transparency of
securities financing transactions and of reuse and amending
Regulation (EU) No 648/2012:
Limit type % of Net assets
----------------------------- ----------------
Margin lending transactions 25%
----------------------------- ----------------
Assets of the Company subject to special arrangements arising
from their illiquid nature
There are no assets of the Company which are subject to special
arrangements arising from their illiquid nature.
Remuneration
The AIFM has adopted a remuneration policy which meets the
requirements of the Directive and has been in place for the current
financial year of the Company. The variable remuneration period of
the AIFM ended on 30 September 2017.
The remuneration process is overseen by the remuneration
committee (comprised predominately of independent non-executive
parties). An internal working group encompassing senior management
is responsible for gathering relevant information (both
quantitative and qualitative) to evaluate the performance (both
short and long term) of individuals, teams and the AIFM as a whole,
against external market benchmarks and to utilise this to develop
proposals for fixed and variable remuneration for all staff. The
remuneration committee receives these proposals and the supporting
information and is responsible for independently reviewing and
scrutinising the proposals and evidence provided in line with the
AIFM's stated objectives and developing its final recommendations
for delivery to the governing body of the AIFM and other entities
associated with the AIFM.
The variable remuneration of all staff in excess of a threshold,
which includes those individuals categorised as remuneration code
staff ("code staff"), is subject to the following:
-- deferred payment of up to 50% of the variable remuneration for a period of 3 years,
-- deferred remuneration is linked to funds managed by the AIFM ,
-- the breaching of certain covenants may lead to forfeiture of deferred remuneration, and
-- a claw-back provision of deferred remuneration in certain
circumstances including future performance issues by the
individuals.
The below information provides the total remuneration paid by
the AIFM during the year to September 30, 2017. This has been
presented in line with the information available to the Company.
There is no allocation made by the AIFM to each AIF and as such the
disclosure reflects the remuneration paid to individuals who are
partly or fully involved in the AIF.
Of the total remuneration paid of $92.5m for the year ended
September 30, 2017 to 172 individuals (full time equivalent),
$26.1m has been paid as fixed remuneration determined based upon
the FCA guidance with the remainder being paid as variable
remuneration.
The AIFM has assessed the members of staff whom it determines to
be code staff in line with AIFMD as reflected in SYSC 19b.3.4R.
Senior management and staff engaged in the control functions are
identified based upon their roles and responsibilities within the
AIFM. With respect to investment professionals, in determining
whether such staff are code staff, due consideration is taken of
the allocated capital and trading limits that apply to the Company
managed and whether the individuals report into and seek consent
for investment decisions from others who are themselves code staff.
There are 13 individuals (full time equivalent) who meet this
definition and these individuals have collectively been compensated
$25.4m.
Not all individuals are directly remunerated by the AIFM due to
the structure of the AIFM entity, however in the interests of
meeting the underlying requirement of this disclosure all staff
involved have been assessed as if directly remunerated by the
AIFM.
The Fund is subject to the Regulation (EU) 2015/2365 on
Transparency of Securities Financing Transactions and of Reuse and
Amending Regulation (EU) No 648/2012 of the European Parliament
("SFTR"). The regulation was issued on November 25, 2015 effective
for all alternative investment funds from January 12, 2016. The
disclosure requirements accompanying this regulation are effective
for annual reports published after January 13, 2017.
A Securities Financing Transaction ("SFT") is defined per
Article 3(11) of the SFTR as;
-- a repurchase transaction or a reverse repurchase transaction;
-- a securities or commodities lending and securities or commodities borrowing;
-- a buy-sell back transaction or sell-buy back transaction;
-- a margin lending transaction.
The regulation also covers transactions that are commonly
referred to as total return swaps ("Swaps"). As at December 31,
2017, there were no SFT's or Swaps held by the Fund and as such
there are no disclosure requirements in respect of these
securities. The Fund did however incur margin lending fees during
the year and these have been disclosed below.
Data on return and cost for each type of SFT and Swap
The following table reflects the return and cost for each type
of SFT and Swap broken down between the Fund, the Investment
Manager and third parties for the year ended December 31, 2017.
Fund Manager Third parties
GBP GBP GBP
Repurchase transaction - - -
Securities or commodities lending and securities or commodities borrowing - - -
Buy-sell back transactions or sell-buy back transactions - - -
Margin lending transactions 128,374 - -
Total return swaps - - -
-------- --------- ---------------
Total 128,374 - -
-------- --------- ---------------
These disclosures have been prepared by the Investment Manager
and reflect the Investment Managers data as at December 31,
2017.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of
Members of Golden Prospect Precious Metals Limited (the 'Company')
will be held at 1 Le Truchot, 3rd Floor, St. Peter Port, Guernsey
on 23 May 2018 at 11:00 BST to transact the business set out in the
Resolutions below.
ORDINARY RESOLUTIONS
1. To receive the Company's Annual Report and Audited Financial
Statements for the year ended 31 December 2017.
2. To re-appoint BDO Limited as auditor to the Company until the
conclusion of the next general meeting at which accounts are laid
before the Company.
3. To authorise the Directors of the Company to determine the remuneration of the auditor.
4. To re-elect Mr Graeme Ross as a Director of the Company who
retires by rotation in accordance with Article 18.3 of the Articles
of Association of the Company.
5. To re-elect Mr Malcolm Burne as a Director of the Company who
retires by rotation in accordance with Article 18.3 of the Articles
of Association of the Company.
6. To re-elect Mr Robert King as a Director of the Company who
retires by rotation in accordance with Article 18.3 of the Articles
of Association of the Company.
7. To re-elect Mr Toby Birch as a Director of the Company who
retires by rotation in accordance with Article 18.3 of the Articles
of Association of the Company.
SPECIAL BUSINESS
8. To authorise the Company, in accordance with Article 4.8 of
the Articles of Association of the Company and The Companies
(Guernsey) Law, 2008, as amended (the 'Law'), to make market
purchases of its own ordinary shares of GBP0.001 each ('Ordinary
Shares'), such authorisation conditional upon the Ordinary Shares
of the Company continuing to be admitted to listing on the Official
List of The International Securities Exchange ('TISE') and, with
the exception of a tender offer or partial offer being made to all
holders of Ordinary Shares on the same terms:-
8.1 the maximum number of Ordinary Shares hereby authorised to
be purchased shall be up to 15% of the Company's existing issued
ordinary share capital;
8.2 the minimum price (exclusive of expenses) which may be paid
for the Ordinary Shares to be GBP0.001 per Ordinary Share;
8.3 the maximum price (exclusive of expenses) payable by the
Company for the Ordinary Shares to be 5% above the average of the
closing middle market quotations (as derived from Bloomberg) of an
Ordinary Share for the five (5) consecutive dealing days preceding
the date on which the purchase is made;
8.4 the authority (unless previously renewed or revoked) will
expire at the end of the annual general meeting of the Company to
be held in 2019 or, if earlier, the date being fifteen months from
the date of this resolution;
8.5 the Company may make a contract to purchase its own Ordinary
Shares under the authority hereby conferred prior to the expiry of
such authority which will or may be executed or wholly or partly
executed after the expiry of such authority, and may make a
purchase of its own Ordinary Shares in pursuance of any such
contract; and
8.6 the purchase price for any Ordinary Shares may be paid by
the Company out of distributable profits or out of capital and
share premium or otherwise to the fullest extent permitted by The
Companies (Financial Assistance for Acquisition of Own Shares)
Ordinance, 1998.
By order of the Board
Maitland Administration (Guernsey) Limited
1 Le Truchot
St Peter Port
Guernsey
GY1 1WD
17 April 2018
NOTES
1. Members entitled to attend and vote at the Meeting are
entitled to appoint one or more proxies to attend, speak and vote
instead of him or her, provided that each proxy is appointed to
exercise the rights attached to a different share or shares held by
such member. A proxy need not be a member of the Company. A form of
proxy accompanies this notice. Completion and return of the form of
proxy will not preclude members from attending or voting at the
Meeting, if they so wish. The fact that members may have completed
forms of proxy will not prevent them from attending and voting at
the Meeting in person should they afterwards decide to do so.
2. To be valid, the form of proxy, together with the power of
attorney or the authority, if any, under which it is executed (or a
notarially, certified copy of such power of attorney) must be
deposited with Computershare Investor Services (Guernsey) Limited,
c/o The Pavillons, Bridgewater Road, Bristol, BS99 6ZY by no later
than 11:00 BST on 19(th) May 2018 before the time for holding the
Meeting or adjourned Meeting or the taking of a poll at which the
person named in the instrument proposes to vote.
3. A member must first have his or her name entered on the
register of members not later than 11:00 BST on 19(th) May 2018. If
the Meeting is adjourned, members entered on the register not later
than 11:00 BST on 19(th) May 2018 before the time fixed for the
adjourned Meeting shall be entitled to attend and vote at the
Meeting. Changes to entries in the register after that time shall
be disregarded in determining the rights of any holders to attend
and vote at the Meeting.
4. If you do not intend to attend the Meeting please complete
and return the form of proxy as soon as possible.
FORM OF PROXY
For use at the Annual General Meeting of Golden Prospect
Precious Metals Limited (the 'Company') to be held on 23 May 2018
at 11:00 BST
I/We (block capitals please)
___________________________________________________________________
of
(address)_______________________________________________________________________________
_________________________________________________________________________________________being
(a) member(s) of the Company appoint the Chairman of the meeting or
(see note 1)
_________________________________________________________________________________________--
As my/our proxy and, on a poll, to vote for me/us on my/our
behalf at the Annual General Meeting of the Company to be held at 1
Le Truchot, 3(rd) Floor, St. Peter Port, Guernsey on 23 May 2018 at
11:00 BST and any adjournment thereof.
Please indicate with an 'X' in the spaces provided how you wish
your votes to be cast on the resolutions specified.
ORDINARY RESOLUTIONS
For Against Abstain
-------------------------------------------- ---- -------- --------
1. To receive the Company's Annual Report
and Audited Financial Statements for
the year ended 31 December 2017.
-------------------------------------------- ---- -------- --------
2. To re-appoint BDO Limited as auditor
to the Company until the conclusion of
the next general meeting at which accounts
are laid before the Company.
-------------------------------------------- ---- -------- --------
3. To authorise the Directors of the
Company to determine the remuneration
of the auditor.
-------------------------------------------- ---- -------- --------
4. To re-elect Mr Graeme Ross as a Director
of the Company who retires by rotation
in accordance with Article 18.3 of the
Articles of Association of the Company.
-------------------------------------------- ---- -------- --------
5. To re-elect Mr Malcolm Burne as a
Director of the Company who retires by
rotation in accordance with Article 18.3
of the Articles of Association of the
Company.
-------------------------------------------- ---- -------- --------
6. To re-elect Mr Robert King as a Director
of the Company who retires by rotation
in accordance with Article 18.3 of the
Articles of Association of the Company.
-------------------------------------------- ---- -------- --------
7. To re-elect Mr Toby Birch as a Director
of the Company who retires by rotation
in accordance with Article 18.3 of the
Articles of Association of the Company.
-------------------------------------------- ---- -------- --------
SPECIAL BUSINESS
For Against Abstain
------------------------------------------------------- ---- -------- --------
8. To authorise the Company, in accordance
with Article 4.8 of the Articles of Association
of the Company and The Companies (Guernsey)
Law, 2008, as amended (the 'Law'), to
make market purchases of its own ordinary
shares of GBP0.001 each ('Ordinary Shares'),
such authorisation conditional upon the
Ordinary Shares of the Company continuing
to be admitted to listing on The International
Stock Exchange ('CISEAL') and, with the
exception of a tender offer or partial
offer being made to all holders of Ordinary
Shares on the same terms:-
8.1 the maximum number of Ordinary Shares
hereby authorised to be purchased shall
be up to 15% of the Company's existing
issued ordinary share capital;
8.2 the minimum price (exclusive of expenses)which
may be paid for the Ordinary Shares to
be GBP0.001 per Ordinary Share;
8.3 the maximum price (exclusive of expenses)
payable by the Company for the Ordinary
Shares to be 5% above the average of
the closing middle market quotations
(as derived from Bloomberg) of an Ordinary
Share for the five (5) consecutive dealing
days preceding the date on which the
purchase is made;
8.4 the authority (unless previously
renewed or revoked) will expire at the
end of the annual general meeting of
the Company to be held in 2018 or, if
earlier, the date being fifteen months
from the date of passing of this resolution;
8.5 the Company may make a contract to
purchase its own Ordinary Shares under
the authority hereby conferred prior
to the expiry of such authority which
will or may be executed or wholly or
partly executed after the expiry of such
authority, and may make a purchase of
its own Ordinary Shares in pursuance
of any such contract; and
8.6 the purchase price for any Ordinary
Shares may be paid by the Company out
of distributable profits or out of capital
and share premium or otherwise to the
fullest extent permitted by The Companies
(Financial Assistance for Acquisition
of Own Shares) Ordinance, 1998.
-------------------------------------------------------
Subject to any voting instructions so given, the proxy will
vote, or may abstain from voting, on any resolution as he/she may
think fit.
Signature__________________________________________________________________________________
Dated this _________________________day of
______________________________________________2018
PROXY NOTES
1. If you so desire you may delete the words 'Chairman of the
meeting' and insert the name of your own choice of proxy, who need
not be a member of the Company. Please initial such alteration.
2. A corporation must execute the proxy under its common seal or
under the hand of an officer or attorney duly authorised.
3. In the case of joint holders, the signature of any one holder
will be sufficient, but the names of all the joint holders should
be stated. Joint holders are not permitted to vote independently of
each other and must vote as one.
4. To appoint more than one proxy to vote in relation to
different shares within your holding, you may photocopy this form.
Please indicate on each copy of the form the proxy's name and the
number of shares in relation to which they are authorised to act as
your proxy (which, in aggregate, should not exceed the number of
shares held by you).
Please also indicate if the appointment of a proxy is one of
multiple appointments being made. All such forms should be signed
and returned together in the same envelope. Appointing a proxy
shall not preclude a member from attending and voting in person at
the meeting.
5. If this form is returned without indication as to how the
person appointed proxy shall vote, he will exercise his discretion
as to how he votes or whether he abstains from voting.
6. To be valid, this form of proxy, duly executed together with
the power of attorney or other authority (if any) under which it is
signed, or a notarially certified copy of that power or authority,
must be deposited at Computershare Investor Services (Guernsey)
Limited, c/o The Pavillions, Bridgewater Road, Bristol, BS99 6ZY by
no later than 11:00 BST on 19(th) May 2018 before the time for
holding the meeting or adjourned meeting or the taking of a poll at
which the person named in the instrument proposes to vote.
7. No member shall be entitled to be present or take part in any
proceedings or vote either personally or by proxy at any meeting
unless all calls due from him have been paid.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GCGDSUBBBGII
(END) Dow Jones Newswires
April 18, 2018 07:30 ET (11:30 GMT)
Golden Prospect Precious... (LSE:GPM)
Historical Stock Chart
From Apr 2024 to May 2024
Golden Prospect Precious... (LSE:GPM)
Historical Stock Chart
From May 2023 to May 2024