TIDMREM
RNS Number : 5459A
Rare Earth Minerals PLC
02 April 2012
2(nd) April 2011
Further to the announcement on 30 March 2012 of the Company's
final results, the RNS contained one inconsistency with the
published final results, relating to the fair valuation of the
marketable securities. The numbers and text which have been changed
as a result of the inconsistency have been underlined in the
corrected RNS. The corrected RNS set out below is now consistent
with the final result sent to the shareholders after published
final results.
Rare Earth Minerals plc (formerly Zest Group plc)
Final Results
for the fifteen months ended 31 December 2011
Chairman's Statement
I present the results of the Group for the 15 months ended 31
December 2011.
Rare Earth Minerals ('The Company') has continued to pursue its
investment strategy, as approved by the shareholders in November
2010, to acquire a diverse portfolio of direct and indirect
interests in exploration and producing Rare Earth Minerals and/or
Metals projects and assets. In light of the nature of the assets
and projects which are the focus of the investment strategy, the
Company has considered investment opportunities anywhere in the
world. The period has seen substantial progress and the Company has
now implemented the investment policy adopted by shareholders.
A copy of the Report and Accounts are being sent to shareholders
today and a copy is available on the Company's website at
www.rareearthmineralsplc.com.
INVESTMENTS
Acquisition of Interest in Greenland Minerals and Energy Ltd
In December 2011, the Company announced that it had acquired
1.27m shares in Greenland Minerals and Energy Ltd ('Greenland
Minerals'), the ASX listed company. The shares were acquired for
cash through the market and the purchase consideration was
GBP515,427 and represent approximately 0.31% of the share capital
of Greenland Minerals.
Greenland Minerals and Energy Ltd, is a mineral exploration and
development company, focused on unlocking the mineral riches of
Greenland, one of the world's last natural resource frontiers. Its
flagship project is Kvanefjeld, a giant multi-element deposit (Rare
Earth Elements-uranium-zinc) located near the southwest tip of
Greenland. Pre-feasibility studies indicate that the vast resources
could sustain a large-scale, economically-robust mining
operation.
Greenland Minerals announced a JORC compliant resource update on
the Kvanefjeld project with a total resource of 619 Mt including
indicated resources of 437 Mt (U3O8 cut-off 150 ppm). Total
resource contained metal inventory is 6.6 Mt TREO (Total Rare Earth
Oxide - including 0.24 Mt heavy REO, 0.53 Mt Y2O3), 350 Mlbs U3O8
and 1.36 Mt Zn. Near surface, higher grade zones were defined (350
ppm U3O8 cut-off), including 122 Mt @ 1.4% TREO (0.05% heavy REO,
0.12% Y2O3) and U3O8 resource of 404ppm.
Acquisition of Interest in Western Australian Properties
The Company announced in early December 2011 that it had
completed an agreement (the "Agreement") with Camelot Trust
Corporation Limited ("Camelot") whereby the Company has acquired
the entire issued share capital of Mojito Resources Limited which
owns a 30% interest in the Yangibana rare earth project ("the
Project") situated in the Gascoyne region of Western Australia.
The Project is centred on narrow, discontinuously outcropping
ironstone dykes that have been shown to carry anomalous rare earths
associated with monazite mineralisation. The rare earths comprise
15 elements with atomic numbers between 57 and 71, plus scandium
and yttrium. The heavy rare earth oxides comprise the oxides of
europium, gadolinium, terbium, dysprosium, holmium, erbium,
thulium, ytterbium, lutetium and yttrium. The light rare earth
oxides comprise the oxides of lanthium, cerium, praseodymium,
neodymium and samarium.
Hastings Rare Metals Limited is the manager of the Project and
holds a 60% interest. The Project has the potential to increase
possible resources by additional drilling along strike in the oxide
zone at selected sites and at depth in the as yet largely untested
primary zone of the dykes. The ironstone dykes at Yangibana are the
weathered surface expressions of ferrocarbonatite dykes which along
with the associated fenitic alteration are considered to be sourced
from an as yet undiscovered carbonatite intrusion which might have
significant rare earth potential.
The consideration payable under the Agreement for the
acquisition is GBP380,000 payable in cash and 250,000,000 ordinary
shares in the issued share capital of the Company representing
17.3% of the issued share capital of the Company as at the date of
their issue.
Acquisition of Interest in Cup Lake Rare Earth Project in
Canada
The Company announced in July 2011 that it had completed the
conditions precedent under the agreement announced on 4 May 2011
and now had a 51% beneficial interest in 5 claims comprising the
Cup Lake Project in Saskatchewan, Canada.
The claims are situated in the Mudjatik domain, an area which
has seen several periods of intensive exploration activity and
hosts many interesting mineral showings. The claims consist of 3
separate groups totalling approximately 4,855 hectares in area.
They are located in north central Saskatchewan and range from 5 to
16 kilometres west of a major highway and power facilities.
During the 1950's exploration was concentrated only on the
accessible and mapped areas of the time. The focus was solely for
uranium and was met with some success as uraninite showings were
identified in numerous instances. In the 1960's exploration surged
again, this time prospecting centered around the search for base
metals and much of the area was flown with geophysical surveys.
Drilling was undertaken and some anomalous nickel assays were
obtained in core assays.
It was during these periods of exploration for other minerals
that the potential for rare earth elements ("REE") was revealed.
Monazite and allanite bearing porphyry dykes and irregular masses
up to 30 feet wide were discovered, both have the potential for
hosting heavy rare earth elements. Occurrences such as these
suggest there may be sufficient mineralization in the area to
support complex pegmatites hosting many types of rare earths. Drill
and assay results seeking uranium and base metals also reported
niobium and tantalum mineralization associated with uranium
occurrences in pegmatites.
The Company announced in October 2011 that it had received
results from detailed follow-up sampling undertaken in August on
one of the rare earth mineral showings located by its initial
exploration program conducted in July on the Cup Lake Rare Earth
Project located in Saskatchewan, Canada.
Initial work conducted during July, 2011 was successful in
locating two areas of rare earth mineralization on the claims at
Cup Lake and at Schmitz Lake.
The Cup Lake occurrence consists of a varied succession of
Aphebian age metasediments and intercalated metavolcanics. A grab
sample from an old trench at this site analysed 7.5% weight total
rare earth elements ("TREE"), equivalent to 8.78% total rare earth
oxides* ("TREO"), i.e. lanthanum 1.94%; cerium 3.56%; praseodymium
0.393%; neodymium 1.28%; samarium 0.173%; europium 0.005%;
gadolinium 0.091%; terbium 0.009%; dysprosium 0.03% and erbium
0.017%.
The August follow-up work focused on the Cup Lake occurrence. A
diamond saw was utilized to cut samples out of bedrock. The samples
were taken over 0.5 metre intervals and the saw cuts were
approximately 10 centimetres wide and 10 centimetres deep. A total
of 20 samples were collected from the trench sampled in July and
known as the "Rod" trench. In addition, another trench, known as
the "George" trench and located 75 metres south of the Rod trench,
was also systematically sampled by saw-cutting (14 samples).
Samples were taken to Saskatchewan Research Council's laboratory
in Saskatoon for processing and analysis. Analysis was performed
using ICP-MS technique with analyses reported in parts per million
(ppm); these were then converted into weight present and these in
turn converted rare earth oxide equivalent percentages. Analytical
results indicate that for the Rod trench total rare earth oxides
range from 0.006 to 1.27%. Out of the 20 samples, 6 have
significant concentrations of rare earths with TREO ranging from
0.12 to 1.27%, in particular 3 contiguous samples average 0.68%
TREO. For the George trench, results range from 0.005 to 1.23%
TREO's. Out of these 14 samples, 4 have significant TREO values
that range from 0.15 to 1.23% TREO's; two contiguous samples
average 0.98% TREO's.
Trench No of Samples Average
TREO%
ROD 20 0.17
Including 3 0.67
including 1 1.27
GEORGE 14 0.18
Including 2 0.98
including 1 1.23
ROD & GEORGE 34 0.18
The sample results are consistent with previous results.
Although the erratic high value of one of the grab samples was not
duplicated by the more systematic saw-cut sampling, results do
indicate a significant rare earth mineralized zone occurs at the
Cup Lake showing.
*TREO or total rare earth oxides consist of: La2O3, Ce2O3,
Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Tm2O3,
Yb2O3, Lu2O3 and HfO2 for the purposes of this release.
FINANCIAL RESULTS
The Group's loss for the period is GBP 1.4 million (2010: GBP
0.3 million). The increase in losses was due to increase
administrative, legal and due diligence expenses associated with
the Groups investments and other activities during the period.
OUTLOOK
Your Board is confident that the three investments made by the
Company since it changed its investment strategy are both
encouraging and potentially very rewarding. We will look to realise
this potential over the future years in addition to continuing to
review further investment opportunities.
The directors would like to take this opportunity to thank our
shareholders, staff and consultants for their continued
support.
INVESTING POLICY
The Company's investing policy is to acquire a diverse portfolio
of direct and indirect interests in exploration and producing Rare
Earth Minerals and/or Metals projects and assets. In light of the
nature of the assets and projects which will be the focus of the
Proposed Investing Policy, the Company will consider investment
opportunities anywhere in the world.
The Directors have considerable experience investing, both in
structuring and executing deals and in raising funds. The Directors
will use this experience to identify and investigate investment
opportunities, and to negotiate acquisitions. Wherever necessary
the Company will engage suitably qualified technical personnel to
carry out specialist due diligence prior to making an acquisition
or an investment. For the acquisitions which they expect the
Company to make, the Directors may adopt earn-out structures, with
specific performance targets being set for the sellers of the
businesses acquired, and with suitable metrics applied.
The Company may invest by way of outright acquisition or by the
acquisition of assets, including the intellectual property, of a
relevant business, partnerships or joint venture arrangements. Such
investments may result in the Company acquiring the whole or part
of a company or project (which in the case of an investment in a
company may be private or listed on a stock exchange, and which may
be pre-revenue), and such investments may constitute a minority
stake in the company or project in question. The Company's
investments may take the form of equity, joint venture, debt,
convertible instruments, licence rights, or other financial
instruments as the Directors deem appropriate.
The Company may be both an active and a passive investor
depending on the nature of the individual investments in its
portfolio. Although the Company intends to be a long-term investor,
the Directors will place no minimum or maximum limit on the length
of time that any investment may be held. There is no limit on the
number of projects into which the Company may invest, nor the
proportion of the Company's gross assets that any investment may
represent at any time and the Company will consider possible
opportunities anywhere in the world.
The Directors may offer new Ordinary Shares by way of
consideration as well as cash, thereby helping to preserve the
Company's cash for working capital and as a reserve against
unforeseen contingencies including by way of example, and without
limit, delays in collecting accounts receivable, unexpected changes
in the economic environment and unforeseen operational problems.
The Company may in appropriate circumstances, issue debt securities
or otherwise borrow money to complete an investment. There are no
borrowing limits in the Articles. The Directors do not intend to
acquire any cross-holdings in other corporate entities that have an
interest in the Ordinary Shares.
There are no restrictions in the type of investment that the
Company might make nor on the type of opportunity that may be
considered other than set out in this policy.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
15 months
ended Year ended
31 December 30 September
2011 2010
Note GBP000 GBP000
Administrative expenses (1,438) (284)
------------- --------------
Total administrative expenses (1,438) (284)
Loss from operations (1,438) (284)
Loss before taxation (1,438) (284)
Taxation 3 - -
Loss for the period from continuing activities (1,438) (284)
Loss after taxation and loss attributable to the equity holders of the company (1,438) (284)
Other comprehensive income
Foreign exchange 25 -
Decrease in value of available for sale asset (137) -
Total comprehensive expenditure for the period (1,550) (284)
============= ==============
Loss per ordinary share (pence)
------------- --------------
Basic and diluted 4 (0.14)p (0.06)p
============= ==============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
based Available
Share Share payment for sale Exchange Retained Total
capital premium reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2009 434 3,598 177 - - (4,342) (133)
Share based payments - - 38 - - - 38
Issue of share capital 30 270 - - - - 300
-------- ---------- ---------- ----------- ---------- ----------- ---------
Transactions with
owners 30 270 38 - - - 338
Loss for the period - - - (284) (284)
-------- ---------- ---------- ----------- ---------- ----------- ---------
Total comprehensive
expenditure for the
period - - - - - (284) (284)
-------- ---------- ---------- ----------- ---------- ----------- ---------
At 30 September 2010 464 3,868 215 - - (4,626) (79)
Share based payments - - 411 - - - 411
Issue of share capital 97 3,158 - - - - 3,255
Share issue costs - (160) - - - - (160)
-------- ---------- ---------- ----------- ---------- ----------- ---------
Transactions with
owners 97 2,998 411 - - 3,506
Loss for the period - - - - - (1,438) (1,438)
Foreign exchange - - - - 25 - 25
Decrease in value
of available for
sale asset - - - (137) - - (137)
-------- ---------- ---------- ----------- ---------- ----------- ---------
Total comprehensive
income/(expenditure)
for the period - - - (137) 25 (1,438) (1,550)
At 31 December 2011 561 6,866 626 (137) 25 (6,064) 1,877
======== ========== ========== =========== ========== =========== =========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 30 September
2011 2010
Note GBP000 GBP000
ASSETS
Non-current assets
Intangible assets 5 1,030 -
Available for sale assets 379 -
----------- -------------
1,409 -
----------- -------------
Current assets
Trade and other receivables 266 17
Cash and cash equivalents 243 306
----------- -------------
Total current assets 509 323
Total assets 1,918 323
=========== =============
LIABILITIES
Current liabilities
Trade and other payables 41 402
----------- -------------
Total liabilities 41 402
----------- -------------
EQUITY
Share capital 561 464
Share premium 6,866 3,868
Share based payment reserve 626 215
Available for sale reserve (137) -
Exchange reserve 25
Retained earnings (6,064) (4,626)
Total capital /(deficiency) attributable to equity holders of the Company 1,877 (79)
Total equity and liabilities 1,918 323
=========== =============
CONSOLIDATED CASH FLOW STATEMENT
Year
15 months ended ended
31 December 30 September
2011 2010
GBP000 GBP000
Cash flows from operating activities
Loss after taxation (1,438) (284)
Depreciation of property plant and equipment - 1
Amortisation of intangibles 43
Equity settled share based payments 411 38
(Increase)/decrease in trade and other receivables (249) (5)
(Decrease)/increase in trade and other payables (361) 251
Net cash (outflow)/inflow from operating activities (1,594) 1
================= =================
Cash flows from investing activities
Purchase of licences (73) -
Purchase of subsidiary (380) -
Investment in AFS assets (516) -
Investment in exploration (70) -
----------------- -----------------
Net cash inflow from investing activities (1,039) -
Cash flows from financing activities
Proceeds from issue of share capital 2,730 300
Share issue costs (160) -
----------------- -----------------
Net cash inflow from financing activities 2,570 300
----------------- -----------------
Net change in cash and cash equivalents (63) 301
Cash and cash equivalents at beginning of period 306 5
Cash and cash equivalents at 31 December 243 306
================= =================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 bAsis of preparation
The Group financial statements have been prepared under the
historical cost convention and in accordance with International
Financial Reporting Standards as adopted by the European Union
(IFRS). The Company's shares are listed on the AIM market of the
London Stock Exchange.
The principal accounting policies of the Group, which have been
applied consistently, are set out in the annual report and
financial statements.
2 segmental information
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group's chief operating decision maker to make decisions
about the allocation of resources and assessment of performance and
about which discrete financial information is available.
The chief operating decision maker has defined that the Group's
only reportable operating segment during the period is mining.
Subject to further acquisitions the Group expects to further
review its segmental information during the forthcoming financial
year.
The Group has not generated any revenues from external customers
during the period.
In respect of the non-current assets, GBP589k (2010: GBP323k)
arise in the UK, and GBP584k (2010: nil) arise in Greenland and
GBP960k (2010: nil) arise in Australia.
3 Taxation - continuing operations
There is no tax credit on the loss for the current or prior
period.
The tax assessed for the period differs from the standard rate
of corporation tax in the UK as follows:
15 months ended Year ended
31 December 30 September
2011 2010
GBP000 GBP000
Loss before tax (1,438) (284)
=============== =============
Loss multiplied by standard rate of corporation tax in the UK of 26% (2010: 28%) 374 (80)
Effect of:
Disallowable expenses - 1
Overseas losses not recognised (10)
Deferred tax asset not recognised 384 79
Current tax charge for period - -
=============== =============
The Group has tax losses in the UK, subject to Her Majesty's
Revenue and Customs approval, of approximately GBPnil (30 September
2010: GBP3,763,000) available for offset against future operating
profits. The Group has not recognised any deferred tax asset in
respect of these losses, which would amount to GBPnil (30 September
2010: GBP1,016,000) due to there being insufficient certainty
regarding its recovery.
Following the operational decision to exit the music business
and focus on investing in mining operations, all brought forward
tax losses relating to the music business are no longer available
for offset against future operating profits.
4 LOSS PER SHARE
The calculation of the basic loss per share is calculated by
dividing the consolidated loss attributable to the equity holders
of the Company by the weighted average number of ordinary shares in
issue during the period.
15 months ended Year ended
31 December 30 September
2011 2010
GBP000 GBP000
Loss attributable to equity holders of the Group
Continuing operations (1,438) (284)
(1,438) (284)
=============== =============
2011 2010
Number Number
Weighted average number of shares for calculating loss per share 1,046,704,389 442,208,091
============= ===========
The impact of the share options are anti dilutive.
5 INTANGIBLE ASSETS
Exploration
costs Goodwill Licences Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 October 2009 and 30 September 2010 - - - -
Additions 70 691 73 834
Acquisition - - 214 214
Foreign exchange gains - 20 5 25
------------ ----------- --------- ------
At 31 December 2011 70 711 292 1,073
------------ ----------- --------- ------
Amortisation
At 1 October 2009 and 30 September 2010 - - - -
Charged in the period - - (43) (43)
------------ ----------- --------- ------
At 31 December 2011 - - (43) (43)
------------ ----------- --------- ------
Net book value at 31 December 2011 70 711 249 1,030
============ =========== ========= ======
Net book value at 1 October 2009 and 30 September 2010 - - - -
============ =========== ========= ======
On 4 May 2011 the group entered into an agreement to acquire
interests in 5 claims in Saskatchewan, Canada, as part of the Cup
Lake Syndicate. Consideration paid totalled GBP37k.
During the period the Group incurred expenses which were in
relation to the application of several prospecting licenses in
Greenland, these costs have been capitalised under IFRS 6 and
amount to GBP33k.
On 1 December 2011 the Group acquired 100% of the shares in
Mojito Resource Limited, a Company registered in British Virgin
Islands, which has a 30% interest in the Yangibana rare earth
project in Western Australia. Further information is given in note
16.
Goodwill of GBP691k arose on this acquisition, being the
difference in the purchase price of GBP905k and the provisional
fair value (GBP214k) of the licences within Mojito Resources
Limited, being the only asset in the company. The directors are
continuing to review their provisional assessment of the fair value
of the licences acquired although do not expect any material
adjustment.The directors have therefore identified only one cash
generating unit to which the goodwill is allocated.
As set out in the accounting policies on page 14 goodwill is
reviewed annually or in the event of an indication of impairment.
The recoverable amount of goodwill has been determined by the fair
value less costs to sell. The directors consider that there have
been no changes in circumstances between acquisition on 1 December
2011 and 31 December 2011 that would give rise to an impairment
charge.
At this stage the Feasibility Study has not been completed to
fully assess the potential future cash flows of developing the area
under licence. The directors, however, having given consideration
to the past exploration of the Project which has identified nine
individual occurrences of rare earth elements known to occur within
the Project area consider that the goodwill is not impaired.
Management's review of the recoverable amount is most sensitive to
changes in the commodity prices of the underlying minerals and the
existence of the rare earth elements within the Project Area. Since
the acquisition date there has been no significant fluctuation in
the commodity prices of the underlying minerals or any material
changes to the Project Area. The directors consider that no
impairment is required at 31 December 2011. Further information in
relation to the projects is contained within the Chairman's
statement on pages 1 to 5.
Deferred tax has not been recognised on the intangible assets
acquired as it is not material to the financial statements.
6 ACQUISITIONS
On 1 December 2011, the group acquired the entire issued share
capital of Mojito Resources Limited, a company registered in the
British Virgin Islands, from Camelot Trust Corporation Limited for
consideration of GBP905k. The consideration was settled by GBP380k
of cash and 250 million ordinary shares in Rare Earth Minerals plc,
at a fair value of GBP0.0021 per share, being the market value of
the shares at the date of acquisition. Following the transaction,
Camelot Trust Corporation Limited owned 17.3% of the share capital
of Rare Earth Minerals plc. Mojito Resources Limited owns a 30%
interest in the Yangibama Rare Earth Project situated in the
Gascoyne region of Western Australia.
At acquisition Mojito Resources Limited owned 30% of 6
exploration licences relating to the Yangibama Rare Earth Project,
there were no other identifiable assets or liabilities of the
Company acquired.
In addition there is deferred contingent consideration of
AUS$500,000. At the date of acquisition the directors consider that
this is unlikely to be paid and have therefore not provided for
this in the financial statements.
Mojito Resources Limited has not contributed any profits or
losses to the Group financial statements since acquisition.
Details of the Project and the background to the acquisition by
the Group are included within the Chairman's statement on pages
1-5.
7 PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006.
The summarised consolidated statement of financial position at
31 December 2011 and the summarised consolidated statement of
comprehensive income, consolidated statement of changes in equity,
consolidated cash flow statement and associated notes for the
period then ended have been extracted from the Group's 2011
statutory financial statements upon which the auditor's opinion is
unqualified and does not include any statement under Section 498 of
the Companies Act 2006.
The accounts for the period ended 31 December 2011 will be
posted to shareholders and laid before the company at the Annual
General Meeting the date of which will be advised shortly. Copies
will also be available from Rare Earth Minerals plc's Registered
Office: Princes House Suite 3B, 38 Jermyn Street, London, SW1Y 6DN
and via the website (www.rareearthmineralsplc.com) in accordance
with AIM Rule 26.
Enquiries:
Rare Earth Minerals plc
David Lenigas
+44 (0) 207 440 0640
W.H. Ireland
James Joyce / Nick Field
+44 (0) 207 220 1666
This information is provided by RNS
The company news service from the London Stock Exchange
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