TIDMPERE
RNS Number : 4789M
Pembridge Resources plc
30 April 2018
30 April 2018
Pembridge Resources Plc
("Pembridge" or "the Company")
Results for the Year Ended 31 December 2017
Pembridge Resources plc (LSE: PERE) ("Pembridge" or the
"Company"), the mining focussed Special Purpose Acquisition Company
listed on the main market for listed securities of the London Stock
Exchange plc ("LSE"), is pleased to announce its results for the
year ended 31 December 2017.
Highlights:
-- Change of name to Pembridge Resources Plc;
-- David Linsley, formerly the Executive Director of Behre
Dolbear, appointed as Chief Executive Officer;
-- Francis McAllister, formerly Chairman, CEO and a Director at
Stillwater Mining Company, appointed as Non-Executive Director and
Chairman;
-- Gati Al-Jebouri, Managing Director at LUKOIL Mid East Ltd and
Guy Le Bel, former Quadra and Capstone Mining executive, appointed
as Non-Executive Directors;
-- Seamless transition from AIM to a Standard Listing on the London Stock Exchange; and
-- Successful GBP2.5 million equity raising
Post Year End
-- Completion of Sale and Purchase Agreement with Capstone
Mining Corp to acquire the Minto copper mine in Yukon Canada.
-- New additions to the management team - Chief Financial
Officer, Paul Fenby and Thomas Horton, Vice President Project
Development.
Frank McAllister, Chairman of Pembridge Resources,
commented:
"During 2017, Pembridge underwent a number of important changes.
New management saw the Company successfully transition into a
Special Purpose Acquisition Company listed on the main market of
the London Stock Exchange.
"Since the start of the year, Pembridge announced its first
acquisition, agreeing to buy the Minto Mine in Canada.
"This marks a transformational opportunity for Pembridge and
fulfils the Company's goals of acquiring a producing and profitable
mining operation. The Minto Mine will be the Company's primary
asset and we look forward to working with the Selkirk First Nation,
Yukon Government and the significant established workforce."
A copy of the annual report and accounts will be posted to
shareholders 4 May 2018 and will be available on the Company's
website - www.pembridgeresources.com
For further information please contact:
Pembridge Resources PLC
David Linsley, Chief Executive Officer
Paul Fenby, Chief Financial Officer
T: +44 (0)207 917 2968
Joint Brokers
GMP Securities L.P. - Canada
Michael Barman
T: +1 416 367 8600
Arden Partners - United Kingdom
Fraser Marshall
T: +44 20 7614 5900
SI Capital Limited
Nick Emerson
T: +44 (0)1483 413 500
Financial Public Relations
Tavistock Communications
Jos Simson / Charles Vivian / Gareth Tredway
T: +44 (0)207 920 3150
About Pembridge Resources plc
Pembridge Resources is a mining focussed SPAC listed on the main
market for listed securities of the London Stock Exchange plc. The
Company's management is composed of a team of senior leaders with
experience in various board and executive positions with a
complementary mix of expertise in geology, engineering, project
appraisal, and commercial development across a wide range of
commodity groups and mining jurisdictions.
The Company recently announced that it had signed a Share
Purchase Agreement with Capstone Mining Corp to acquire a 100%
interest in the Minto copper mine in Canada's Yukon territory
through the purchase of Capstone Mining Corp's 100% interest in
Minto Explorations Ltd.
Strategic Report
Chairman's and Chief Executive's statement
We are pleased to present the report and Financial Statements of
Pembridge Resources Plc's ("Pembridge" or "the Company") results
for the year ended 31 December 2017.
Introduction
The past 12 months saw the old China Africa Resources plc
convert from an AIM rule 8 cash shell into a main board listed
Special Purpose Acquisition Company ("SPAC") seeking to invest in
the base and precious metals sectors.
Given the macro outlook for mining and mining investment, the
Directors believed an opportunity existed for the Company to take
advantage of cyclically low asset and project valuations,
particularly in base and precious metals which were, and still,
offer significant opportunities to invest in orphaned projects
where existing management teams have been restricted of
capital.
In order to help achieve the goals a strong team was assembled
by the new CEO with experience in various board and executive
positions in the mining area spanning several decades, with a
complementary mix of expertise in geology, engineering, project
appraisal, and commercial development.
Successful execution of this strategy would offer exposure to
the next forecast "up cycle" and compete with other capital pools
including private equity.
Additionally, given the unique strategy being pursued by
Pembridge it was felt that an LSE standard listing would be more in
line with our strategic objectives and ultimately more advantageous
to the Company and our shareholders.
Our transition from AIM to a standard listing on the London
Stock Exchange was delivered seamlessly and on time by our legal
advisors putting us in a position to fully exploit our stated aims
to build a portfolio of compelling investments with our uniquely
qualified team.
We are also pleased to report that, post year end, we were able
to announce our first transaction under this strategy, signing a
Sale and Purchase Agreement with Capstone Mining Corp. ("Capstone")
to acquire the Minto copper-gold-silver mine "Minto".
Minto is located in the mining friendly Yukon territory in
Canada and has a 10-year production history with all key
infrastructure, facilities and operating teams in place.
The asset was sourced from within our board, and historic
relationships meant we could agree on the acquisition without any
tender process.
Minto fits perfectly with the Company's stated goal to acquire a
producing and profitable mining operation to which our team can add
further value. This acquisition will represent a core asset to
Pembridge and will be used as a platform for future growth.
As we move towards deal close and becoming a producing mining
Company, we have once again made an effort to attract the right
personnel to achieve all our targets going forward.
In January we welcomed Thomas Horton as Vice President Project
Development. Thomas is a mining professional with a range of work
experience across Canada, Middle East, Europe and the UK. He joined
Pembridge from Private Equity firm Duke Street Capital, where he
was involved in deal execution and origination, following the
completion of his Masters in Business Administration (MBA).
Within the past month, we announced the appointment of Paul
Fenby as Chief Financial Officer. Paul has over 25 years'
experience in natural resources, most recently as Group CFO at Asia
Resource Minerals Plc, a UK listed, Indonesia focussed coal mining
Company, with responsibility for both the London and Jakarta listed
entities.
Financials
During the year the Company made a loss of US$1.92 million (2016
- loss of US$3.8 million). The closing cash and cash equivalents
balance is US$2.027 million compared to US$1.163 million in 2016
due to proceeds from the placing and subscription in August
2017.
Principal risks and Uncertainties
Nature of Risk How we manage it
----------------------------------- -----------------------------------
Funding Risk The Company has the capability
The Company will need to raise funds required
to secure additional funding to complete the transaction
to complete its acquisition via its brokers, GMP Securities,
of the Minto mine and Arden Partners and SI Capital.
cover working capital.
Impact
Shortage of cash for acquisition
costs.
----------------------------------- -----------------------------------
Regulatory Risk Pembridge is currently
The Company will not be undertaking a process to
able to reverse or acquire raise sufficient funds
a project into the Company to complete the Minto Mine
before the deadline or Acquisition.
raise sufficient capital
to become a SPAC. This process is being facilitated
by the assembled team outlined
Impact in the Chairman's and Chief
The Company will cease Executive's Statement who
to be traded on the Main have engaged with the necessary
Board of the London Stock advisors, including brokers
Exchange. to raise capital within
the required timeframe.
----------------------------------- -----------------------------------
Human Resources Risk The Company has attracted
The achievement of the and will retain a qualified
Company's objectives will team by providing a competitive
be dependent on the Company remuneration policy, which
attracting and retaining includes financial performance
qualified and motivated incentives so as to align
staff. the team with the shareholders
of the Company.
Impact
The efficiency of a particular
aspect of the Company's
operations could be affected
leading to reduced profitability.
----------------------------------- -----------------------------------
Investment Risk Pembridge has a comprehensive
The investments the Company investment policy and strategy,
makes fail to be of any as outlined in its Financial
value. Prospects Policy ("FPP")
procedures, that will assist
Impact in prudent measures being
The investments are written made to identify and perform
off. due diligence on the investments
that the Company makes.
----------------------------------- -----------------------------------
Business Review & Development
A review of the business and its operations can be found in the
Chairman's and Chief Executive's statement on page 2.
Key Performance indicators
KPI Measure Performance
-------------------- ------------------------ -------------------------
Shareholder returns Share price performance The Company's
share price dropped
from 2.45p to
1.45p in a year
that was generally
punishing for
the mining sector.
-------------------- ------------------------ -------------------------
Cash flows Cash balances Cash balances
increased from
US$1.163m to US$2.027m.
-------------------- ------------------------ -------------------------
Francis McAllister
Non-Executive Director and Chairman of the Board
27 April 2018
Corporate and Social Responsibility Report (CSR)
Pembridge is committed to complying with all Health and Safety,
environmental and social legislation and protecting the health and
general wellbeing of its employees. It is committed to preserving
the environment.
Environment
Concern for the environment is of upmost importance to
Pembridge. It is our policy to reduce to a minimum the potential
environmental impact of our activities and have a positive impact
on the areas in which we operate.
Health, Safety and Security
The health, safety and security of the personnel and communities
in which we operate takes priority in the management of our
operations. Our goal is to prevent injury and ill health to
employees and contractors by providing a safe and healthy working
environment and by minimising risks associated with occupational
hazards.
Business Ethics
Pembridge is committed to carrying out all its operations with
high moral and legal standards. Pembridge has an anti-corruption
and anti-bribery policy which are in line with the requirements of
the UK Bribery Act. Staff and contractors are made aware of their
obligations both on recruitment and by periodical updates.
The Strategic Report (comprising the Chairman's and Chief
Executive's statement and principal risks and uncertainties) on
pages 2-3 was approved by the Board of Directors and was signed on
its behalf by Francis McAllister, Chairman of the Board.
Francis McAllister
Non-Executive Director and Chairman of the Board
27 April 2018
Directors' Report
The Directors present their report and the audited Financial
Statements of the Company for the year ended 31 December 2017.
General information about the Company is provided in note 1 to
the Financial Statements.
Principal activity
The principal activity of Pembridge is to operate as a base and
precious metals focussed holding Company. The Company name was
changed from China Africa Resources Plc on 7 April 2017.
Business review and future development
A review of the business and future developments of the Company
is included within the Chairman's and Chief Executive's statement
on pages 2 and 3, which form part of the Strategic Report. The
Board has announced that it has commenced a fundraising roadshow
with the intention of raising funds from new and existing
shareholders to enable the purchase of the Minto mine from
Capstone. The proposed acquisition constitutes a reverse takeover
for the purposes of the Listing Rules of the FCA.
Results and dividends
During the year the Company made a loss of US$1.9 million (2016
- loss of US$3.8 million). The loss incurred during the year
consists of costs of running the head office in London, associated
listing and regulatory requirements, legal and professional costs
in connection with the move from AIM onto the Standard Segment,
together with investment acquisition related costs. No dividends
were paid during the year and the Directors do not recommend
payment of a final dividend (2016: $nil).
Going concern
The Company's ability to continue to adopt the going concern
basis of preparation will depend upon a number of matters including
future successful capital raisings for necessary funding or loans
from third parties.
The Company has sufficient funds to meet its working capital
needs over the going concern period, however a significant
fundraise will be required in order to complete the acquisition of
the Minto mine and associated working capital requirements.
Completion of the acquisition at the date of these Financial
Statements is, in addition to raising the necessary funds, subject
to shareholder and regulatory approvals. In the event that the
Company is unable to secure finance either through third parties or
capital raising, it may not be able to complete the acquisition.
Excluding the impact of completing the acquisition in the future,
the Company has sufficient funds in order to meet its contracted
and committed liabilities for at least 12 months from the date of
approval of the Financial Statements. If the proposed fundraise and
acquisition are delayed, the Company will introduce cost reductions
or undertake a small fundraise to meet working capital
commitments.
Post reporting date events
Since the end of the year the Company has entered into a
definitive Sale and Purchase agreement with Capstone to acquire the
Minto copper mine in the Yukon territory, Canada.
Directors
The Directors who served during the year ended 31 December 2017
and up to the date of signing the Financial Statements were as
follows:
Francis McAllister Chairman and Director (appointed 18 August 2017)
David Charles Linsley Chief Executive Officer and Director
(appointed 17 February 2017)
Guy Le Bel Non-Executive Director (appointed 18 August 2017)
Gati Al-Jebouri Non-Executive Director (appointed 27 September
2017)
Roderick Webster (resigned 27 September 2017)
John Bryant (resigned 27 September 2017)
Paul Johnson (resigned 17 February 2017)
Nicholas John O'Reilly (resigned 17 February 2017)
Directors' indemnities
Pembridge maintained liability insurance for its Directors and
officers during the period and also as at the date of the
Directors' Report.
Financial instruments
The financial risk management policies and objectives are set
out in detail in Notes 20 and 22 of the Financial Statements.
Information on exposure to risks
Principal risks and uncertainties are discussed in the Strategic
Report on page 3, while liquidity risks are covered in Note 20.
Greenhouse gas emissions
The Company has as yet minimal greenhouse gas emissions to
report from the operations of the Company and does not have
responsibility for any other emission producing sources under the
Companies Act 2006 (Strategic Report and Directors report)
Regulations 2014.
Statement as to disclosure of information to auditor
The Directors who were in office on the date of approval of
these Financial Statements have confirmed, as far as they are
aware, that there is no relevant audit information of which the
auditors are unaware. Each of the Directors have confirmed that
they have taken all the steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit
information and to establish that it has been communicated to the
auditor.
Auditor
The auditors, PKF Littlejohn LLP, have expressed their
willingness to continue in office and a resolution that they be
re-appointed will be proposed at the annual general meeting.
By order of the Board
David Linsley
Director and Chief Executive Officer
27 April 2018
Directors' Remuneration Report
For the year ended 31 December 2017 salaries and fees, bonuses
and share based payments were the sole components of remuneration.
The Board will consider the components of Directors' remuneration
during the year and following this review these are likely to
consist of:
Set out below are the emoluments of the Directors for the year
ended 31 December 2017:
Share
based
2017 Fees Bonus payments Total
US$'000 US$'000 US$'000 US$'000
Roderick Webster* 22 - - 22
Paul Johnson** - - - -
John Bryant* 11 - - 11
Nicholas O'Reilly** - - - -
Francis McAllister - - - -
David Charles
Linsley 75 160 64 299
Gati Al-Jebouri - - - -
Guy Le Bel - - - -
Total 108 160 64 332
*resigned 27
September 2017
**resigned 17
February 2017
Share
based
2016 Fees payments Total
US$'000 US$'000 US$'000
Roderick Webster - 15 15
Francis Lewis 21 8 29
James Richards 21 - 21
Paul Johnson - 15 15
John Bryant - 15 15
Nicholas O'Reilly - 15 15
Total 42 68 110
Directors' responsibilities
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 Company Financial Statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union. Under Company law the Directors
must not approve the Financial Statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that
period.
In preparing these Financial Statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the Financial Statements; and
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Financial Statements comply with the requirements of the
Companies Act 2006. They 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.
Website publication
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the Financial Statements may
differ from legislation in other jurisdictions.
Independent Auditor's Report to the Members of Pembridge
Resources Plc
Opinion
We have audited the Financial Statements of the Company for the
year ended 31 December 2017 which comprise the Statement of
Comprehensive Income, the Statement of Financial Position, the
Statement of Changes in Equity, the Cash Flow Statement 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 (IFRSs) as adopted by
the European Union.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
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.
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 IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
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 public interest
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.
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.
Our application of materiality
The materiality applied to the Financial Statements was
US$70,000, based on thresholds for net assets and the loss before
tax. The performance materiality was US$49,000.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the Financial
Statements. In particular, we looked at areas involving significant
accounting estimates and judgement by the Directors and considered
future events that are inherently uncertain. We also addressed the
risk of management override of internal controls, including among
other matters consideration of whether there was evidence of bias
that represented a risk of material misstatement due to fraud.
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.
We have determined that there are no key audit matters to
communicate in our report.
Other information
The other information comprises the information included in the
Annual Report, other than the Financial Statements and our
auditor's report thereon. The Directors are responsible for the
other information. 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.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the Directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the
Directors' report for the financial year for which the Financial
Statements are prepared is consistent with the Financial
Statements; and
-- the Strategic Report and the Directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or
the Directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the Financial Statements and the part of the Directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' responsibilities
statement, 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
determine 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 on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Board of Directors on 10 February 2017
to audit the Financial Statements for the year ended 31 December
2016. Our total uninterrupted period of engagement is two years,
covering the years ended 31 December 2016 to 31 December 2017.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Company and we remain independent of the
Company in conducting our audit.
As part of our audit procedures, we gained an understanding of
the legal and regulatory framework applicable to the Company and
considered the risk of acts by the Company which were contrary to
applicable laws and regulations, including fraud. We designed audit
procedures to respond to the risk, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or
intentional misrepresentations or through collusion. Our tests
included making enquiries of management, as well as inspecting
underlying supporting documentation and calculations.
As in all of our audits, we also addressed the risk of
management override of internal controls, including evaluating
whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
Procedures designed and executed to address these risks included
the review and testing of journal entries during the period,
testing and evaluating management's key accounting estimates for
reasonableness and consistency, review of transactions through the
bank statements, and undertaking cut-off procedures to verify
proper cut-off of expenses.
Our audit opinion is consistent with the additional report to
the Board.
David Thompson
(Senior statutory auditor)
For and on behalf of PKF Littlejohn LLP 1 Westferry Circus
Statutory auditor Canary Wharf
London E14 4HD
27 April 2018
Statement of comprehensive income
For the year ended 31 December 2017
Year Year
ended ended
31 December 31 December
2017 2016
Note US$'000 US$'000
Administrative, legal
and professional expenses (1,768) (744)
Impairment of investment
in and amounts due
from subsidiary undertaking 13 - (3,263)
Loss on disposal of
investments 14 (157) -
Other income 6 - 192
Operating loss 7 (1,925) (3,815)
Finance income - -
Finance cost - -
Loss before income
tax (1,925) (3,815)
Income tax 10 - -
Loss for the year attributable
to the equity holders
of the Company (1,925) (3,815)
Other comprehensive
income - -
Total comprehensive
income for the year (1,925) (3,815)
============ ============
Year Year
ended ended
Earnings per share 31 December 31 December
expressed in US cents 2017 2016
Basic and diluted loss
per share attributable
to the equity holders
of the Company 11 (1.4c) (14.9c)
All amounts relate to continuing activities.
The notes on pages 27 to 39 form part of these Financial
Statements.
Statement of financial position
As at 31 December 2017
Company number: 07352056
31 December 31 December
2017 2016
Note US$'000 US$'000
Assets
Non-current assets
Property, plant and
equipment 12 2 3
Investment in subsidiary 13 - -
Available-for-sale
financial assets 14 - -
Total non-current assets 2 3
Current assets
Trade and other receivables 15 354 38
Cash and cash equivalents 16 2,027 1,163
2,381 1,201
Total assets 2,383 1,204
Current liabilities
Trade and other payables 17 (213) (184)
Total liabilities (213) (184)
Net assets 2,170 1,020
Equity
Share capital 18 1,306 1,048
Share premium 18 2,902 138
Merger relief reserve - -
Other reserve 165 112
Retained deficit (2,203) (278)
Equity attributable
to shareholders of
the Company 2,170 1,020
The Financial Statements were approved and authorised for issue
by the Board on 27 April 2018 and signed on behalf of the Board
by:
David Linsley Francis McAllister
Director and Chief Executive Officer Non-Executive Director and Chairman
The notes on pages 27 to 39 form part of these Financial
Statements.
Statement of changes in equity
For the year ended 31 December 2017
Share Share Merger Other Retained Total
capital premium relief reserve deficit
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January
2016 377 6,556 4,052 - (7,024) 3,961
--------- --------- --------- --------- --------- --------
Loss for the year - - - - (3,815) (3,815)
Other comprehensive - - -
income for the year - - -
Total comprehensive
income for the year - - - - (3,815) (3,815)
--------- --------- --------- --------- --------- --------
Cancellation of
share premium via
Court Order - (6,556) - - 6,556 -
Proceeds from shares
issued 586 216 457 - - 1,259
Direct cost of shares
issued - (80) - - - (80)
Value of placing
warrants - (97) - 97 - -
Value of share options - - - 15 - 15
Share based payments 85 99 - - - 184
Realisation of merger
reserve on distribution
of subsidiary undertaking - - (4,509) - 4,509 -
Distribution of
subsidiary via dividend
in specie - - - - (504) (504)
--------- --------- --------- --------- --------- --------
Total transactions
with owners recognised
directly in equity 671 (6,418) (4,052) 112 10,561 874
--------- --------- --------- --------- --------- --------
Balance at 31 December
2016 1,048 138 - 112 (278) 1,020
========= ========= ========= ========= ========= ========
Balance at 1 January
2017 1,048 138 - 112 (278) 1,020
--------- --------- --------- --------- --------- --------
Loss for the year - - - - (1,925) (1,925)
- - -
Other comprehensive
income for the year - - -
Total comprehensive
income for the year - - - - (1,925) (1,925)
--------- --------- --------- --------- --------- --------
Proceeds from shares
issued 182 2,772 - - - 2,954
Direct cost of shares
issued - (153) - - - (153)
Share based payments 76 151 - - - 227
Value of placing
warrants - (6) - 6 - -
Value of share options - - - 47 - 47
Total transactions
with owners recognised
directly in equity 258 2,764 - 53 - 3,075
Balance at 31 December
2017 1,306 2,902 - 165 (2,203) 2,170
========= ========= ========= ========= ========= ========
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Nominal value of shares issued.
Share premium Amount subscribed for share capital
in excess of nominal value, less share
issue costs.
Merger relief Reserve created on issue of shares
reserve on acquisition of its subsidiary in
accordance with Companies Act 2006
provisions.
Other reserve Cumulative fair value of warrants
and share options granted.
Retained deficit Cumulative net gains and losses recognised
in the statement of comprehensive
income.
The notes on pages 27 to 39 form part of these Financial
Statements.
Cash flow statement
For the year ended 31 December 2017
Year Year
ended ended
Notes 31 December 31 December
2017 2016
US$'000 US$'000
Cash flows from operating
activities
Loss for the year (1,925) (3,815)
Adjusted for:
Depreciation 1 -
Share option charge 47 15
Share based payments - 184
Impairment of investment
in subsidiary - 3,063
Loss on disposal of
investments 157 -
(1,720) (553)
Movements in working
capital
Increase in trade and
other receivables 15 (316) (21)
Increase in trade and
other payables 17 29 116
------------ ------------
Net cash used in operating
activities (2,007) (458)
Cash flows from investing
activities
Purchase of property,
plant and equipment - (3)
Purchases of available-for-sale
financial assets (199) -
Proceeds from sale
of available-for-sale
financial assets 269 -
Net cash generated
from investing activities 70 (3)
Cash flows from financing
activities
Repayment of borrowings - (200)
Proceeds from issuance
of shares 2,954 1,259
Direct cost of share
issue (153) (80)
Net cash generated
from financing activities 2,801 979
Net increase in cash
and cash equivalents 864 518
Cash and cash equivalents
at beginning of year 1,163 645
Cash and cash equivalents
at end of year 16 2,027 1,163
The notes on pages 27 to 39 form part of these Financial
Statements.
Notes to the Financial Statements
For the year ended 31 December 2017
1. NATURE OF OPERATIONS AND GENERAL INFORMATION
The principal activity of the Company is to operate as a mining
focussed holding Company.
Pembridge Resources Plc is incorporated and domiciled in
England. The address of the Company's registered office is Suite A,
6 Honduras Street, London EC1Y 0TH. Pembridge Resources Plc's
shares are listed on the Standard Segment of the Official List of
the London Stock Exchange.
The Company's Financial Statements are presented in United
States dollars (US$), which is also the functional currency of the
Company, and rounded to the nearest thousand.
These Financial Statements were approved for issue by the Board
of Directors on 27 April 2018.
2. STANDARDS AND INTERPRETATIONS NOT YET APPLIED BY THE COMPANY
2.1 New and amended standards adopted by the Company
There were no IFRSs or IFRIC interpretations relevant to the
Company that were effective for the first time for the financial
year beginning 1 January 2017 that had a material impact on the
Company.
2.2 Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the Company
At the date of authorisation of these Financial Statements,
certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective, and have
not been adopted early by the Company.
Management anticipates that all of the pronouncements will be
adopted in the Company's accounting policy for the first period
beginning after the effective date of the pronouncement. The new
standards and interpretations are not expected to have a material
impact on the Company's Financial Statements.
-- IFRS 2 - Amendments to classification and measurement of
Share Based Payments (effective 1 January 2018)
-- IFRS 9 - Financial Instruments (effective 1 January 2018)
-- IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2018)
-- IFRS 15 - Revenue from Contracts with Customers (Clarifications) (effective 1 January 2018)
-- IFRS 16 - Leases (effective 1 January 2019)
-- Annual Improvements - Annual Improvements to IFRSs 2014 -
2016 Cycle (effective 1 January 2018)
-- IFRIC 22 - Foreign Currency Transactions and Advance
Consideration (effective 1 January 2018)
-- IFRIC 23 - Uncertainty over Income Tax Treatments (1 January 2019*)
-- Annual Improvements - Annual Improvements to IFRSs 2015 - 2017 Cycle (1 January 2019*)
*Subject to EU endorsement
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) and IFRIC
interpretations (IFRS IC) as adopted by the European Union, and
with the Companies Act 2006 applicable to companies reporting under
IFRS. The Financial Statements have been prepared under the
historical cost convention.
The preparation of Financial Statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
high degree of judgement or complexity, or areas where assumptions
and estimates are significant to the Financial Statements are
disclosed in Note 4.
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Going concern
The Company meets its working capital and investment
requirements from its cash and cash equivalents. The Company raises
finance for its activities in discrete tranches. The Company did
not generate revenues from operations during 2017. As such, the
Company's ability to continue to adopt the going concern
assumptions will depend upon a number of matters including future
successful capital raisings for necessary funding or loans from
third parties.
Proceeds from the issue of shares during the year amounted to
$2.954m and cash and cash equivalents at 31 December 2017 amounted
to $2.027m. The Company has sufficient funds to meet its working
capital needs, whilst further funding will be required either
through equity raisings or other financial arrangements to fund the
acquisition of the Minto Mine. This cannot be guaranteed and there
are no legally binding agreements in place at the date of approval
of these Financial Statements relating to the raising of additional
funds. Completion of the acquisition is also subject to the normal
shareholder and regulatory approvals.
Excluding the effect of raising the requisite funds to enable
completion of the Minto Mine acquisition, the Company should be
able to meet its contracted and committed expenditure for at least
the next 12 months from existing cash and cash equivalents. If the
proposed fundraise and acquisition are delayed, the Company will
introduce cost reductions or undertake a small fundraise to meet
working capital requirements. The Company's Directors have a
reasonable expectation that the Company will be able to continue in
operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in
preparing these Financial Statements.
Property, plant and equipment
Property, plant and equipment are recorded at cost, net of
accumulated depreciation and any provision for impairment.
Depreciation is provided using the straight-line method to write
off the cost of the asset less any residual value over its useful
economic life as follows:
Furniture and office equipment - 3 years
Foreign currency translation
In preparing the Financial Statements, transactions in
currencies other than the entity's functional currency (foreign
currencies) are recorded at the rates of exchange prevailing on the
dates of the transactions. At each reporting date, monetary assets
and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting date.
Non-monetary items carried at fair value that are denominated in
foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are
not retranslated. Exchange differences arising, if any, are
recognised in profit or loss.
Taxes
Income tax represents the sum of the tax currently payable and
deferred tax.
The tax currently payable is based on taxable result for the
period. Taxable profit or loss differs from reported profit or loss
because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are
never taxable or deductible. The Company's liability for current
tax is calculated using tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the Financial Statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences, and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in profit or loss,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity. Tax relating to items recognised in other comprehensive
income is recognised in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to taxes levied by the
same taxation authority and the Company intends to settle its
current tax assets and liabilities on a net basis.
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments, assets and liabilities
The Company uses financial instruments comprising cash and cash
equivalents, trade and other receivables and trade and other
payables that arise from its operations.
Financial assets
The only financial assets currently held by the Company are
classified as loans and receivables and cash and cash equivalents.
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
are initially recognised at fair value plus transaction costs that
are directly attributable to their acquisition or issue, and are
subsequently carried at amortised cost using the effective interest
rate method, less provision for impairment.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Company will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable.
Loans and receivables comprise trade and other receivables and
cash and cash equivalents in the statement of financial
position.
During the year the Company acquired and disposed of
available-for-sale financial assets. These assets are
non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in
non-current assets unless the investment matures or management
intends to dispose of the investment within 12 months of the end of
the reporting period.
Derecognition of financial assets
The Company derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire; or it
transfers the asset and substantially all the risk and rewards of
ownership of the asset to another entity.
Financial liabilities
Trade payables and other short-term monetary liabilities are all
classified as other financial liabilities. At present, the Company
does not have any liabilities classified as fair value through
profit or loss.
Trade payables and other short-term monetary liabilities are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method. All interest
and other borrowing costs incurred in connection with the above are
expensed as incurred and reported as part of financing costs in the
statement of comprehensive income.
Derecognition of Financial liabilities
The Company derecognises financial liabilities when, and only
when, the Company's obligations are discharged, cancelled or they
expire.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand and deposits
held at call with banks. Any interest earned is accrued monthly and
classified as finance income. For the purposes of the statement of
cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above.
Investment in subsidiary
The Company recognises its previous investments in subsidiaries
at cost, less any provision for impairment. The cost of acquisition
includes directly attributable professional fees and other expenses
incurred in connection with the acquisition. It also includes share
based payments issued to employees of the Company for services
provided to subsidiaries.
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new ordinary shares are shown
in equity as a deduction from proceeds.
Merger Relief
The difference between the fair value of an acquisition and the
nominal value of the shares allotted in a share exchange has been
credited to a merger relief reserve account, in accordance with the
merger relief provisions of the Companies Act 2006 and accordingly
no share premium for such transactions has been recognised.
Following the write down in investment for impairment and
distribution of the subsidiary undertaking via a dividend in
specie, the reserve became realised and consequently transferred
into retained earnings.
Share based payments
The fair value of services received from employees and third
parties in exchange for the grant of share options and warrants is
recognised as an expense, except for those granted in connection
with the issue of new ordinary shares which are shown as a
deduction in equity. A corresponding increase is recognised in
other reserves in equity. The fair value of the share options and
warrants is calculated using an appropriate valuation model. At
each reporting period end the Company revises its estimate of the
number of options that are expected to become exercisable. The
proceeds received net of any attributable transaction costs are
credited to share capital (nominal value) and share premium when
exercised.
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company's accounting policies,
described in Note 3, the Directors are required to make judgments,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical estimates in applying the Company's accounting
policies
The following are the critical estimates that the Directors have
made in the process of applying the Company's accounting policies
and that have the most significant effect on the amounts recognised
in Financial Statements.
Share based payments
Estimating fair value for share based payment transactions
requires determination of the most appropriate valuation model,
which is dependent on the terms and conditions of the grant of
share options and warrants. This estimate also requires
determination of the most appropriate inputs to the valuation model
including the expected life, volatility and dividend yield and
making assumptions about them. The assumptions used for estimating
fair value for share based payment transactions are disclosed in
Note 19.
5. OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board, who are responsible for
allocating resources and assessing performance of the operating
segment.
The Company currently has one operating segment, being a holding
Company, therefore all IFRS 8 disclosures are incorporated within
other notes to the Financial Statements.
6. OTHER INCOME
Year ended Year ended
31 December 31 December
2017 2016
US$'000 US$'000
Management charge to
former subsidiary undertaking - 192
7. EXPENSES BY NATURE
Year ended Year ended
31 December 31 December
This is stated after charging: 2017 2016
US$'000 US$'000
Staff costs 366 44
Share options granted to Directors 19 15
Share based payments 9 184
Auditor's remuneration (note 8) 38 13
Management fee - 126
8. AUDITOR'S REMUNERATION
Year ended Year ended
31 December 31 December
2017 2016
US$'000 US$'000
Remuneration receivable by the
Company's auditors for the audit
of the Financial Statements 14 13
Fees payable to the Company's
auditor and its associates 24 -
for other
services
Total remuneration 38 13
9. EMPLOYEES AND KEY MANAGEMENT
The total Directors' emoluments for the year, including share
based payments, were US$351,000 (2016 - US$110,000) and social
security payments were US$Nil (2016 - US$2,000). Detailed
disclosure of Directors' remuneration is disclosed in the
Directors' remuneration report on page 14.
The average number of employees was 2 (2016 - 2).
Key management personnel as defined under IAS 24 have been
identified as only the Board of Directors.
10. INCOME TAX
Year ended Year ended
31 December 31 December
2017 2016
US$'000 US$'000
Current tax:
UK corporation tax on the
result for the year - -
------------ ------------
Total current taxation - -
Deferred taxation - -
Income tax - -
Differences explained below:
Loss before tax (1,925) (3,815)
------------ ------------
Loss before tax multiplied by
the standard rate 19.25% (2016:
20%) (371) (763)
Effect of:
Expenses not deductible
for tax 102 665
Tax losses for which no
deferred income tax asset
was recognised 269 98
Tax for the year - -
Unrecognised deferred tax
asset
Tax losses UK - excess management
expenses 526 299
526 299
The deferred tax assets are currently unrecognised as the
likelihood of sufficient future taxable profits does not yet meet
the definition of "probable".
The unrecognised deferred tax asset has no expiry period.
11. EARNINGS PER SHARE
The calculation of basic and diluted loss per ordinary share is
based on the following data:
Year ended Year ended
31 December 31 December
2017 2016
Basic and diluted loss per share
(US cents) (1.4c) (14.9c)
Weighted average number of shares
for basic and diluted loss per
share 133,409,358 25,671,810
The basic and diluted loss per share have been calculated using
the loss attributable to shareholders of the Company of
US$1,925,000 (2016: US$3,815,000) as the numerator, i.e. no
adjustment to loss was necessary. The basic and dilutive loss per
share are the same as the effect of the exercise of share options
and warrants would be anti-dilutive.
Details of share options and warrants that could potentially
dilute earnings per share in future periods are set out in Note
19.
12. PROPERTY PLANT AND EQUIPMENT
Furniture
and office
equipment
US$'000
Cost
At 1 January 2017 3
Additions -
At 31 December 2017 3
Depreciation
At 1 January 2017 -
Charge for the year (1)
At 31 December 2017 (1)
Net book value at
31 December 2017 2
Net book value at
31 December 2016 3
13. INVESTMENT IN SUBSIDARY
31 December 31 December
2017 2016
US$'000 US$'000
China Africa Resources
Namibia (pty) Ltd
Opening balance - 3,567
Impairment - (3,063)
Distribution to ordinary
shareholders via dividend
in specie - (504)
- -
China Africa Resources Namibia (pty) Ltd was 100% owned by the
Company and incorporated in the Republic of Namibia. The principal
activity of China Africa Resources Namibia (pty) Ltd was
exploration and evaluation of mining assets in Namibia. The Company
was acquired on 11 August 2011 by the issue of 6,326,923 ordinary
1p shares at a price of 40p, being the market price on the date of
acquisition. The acquisition price was converted to US dollars at
an exchange rate of 1.642, being the exchange rate at the date of
the transaction. The principal reason for this acquisition was to
develop the Berg Aukas Mine project in Namibia.
On 14 December 2016 the Company disposed of its sole interest,
the Berg Aukus Mine project, held through its wholly owned
subsidiary, China Africa Resources Namibia (pty) Ltd, through the
completion of an in specie distribution. The special dividend was
independently valued at 1.75 pence per share and totalled
GBP403,846 (equivalent to US$504,000).
14. AVAILABLE-FOR-SALE FINANCIAL ASSETS
31 December 31 December
2017 2016
US$'000 US$'000
At 1 January - -
Additions 426 -
Disposals (426) -
At 31 December - -
15. TRADE AND OTHER RECEIVABLES
31 December 31 December
2017 2016
US$'000 US$'000
Other receivable 118 26
Prepayments 41 10
VAT recoverable 195 2
354 38
16. CASH AND CASH EQUIVALENTS
31 December 31 December
2017 2016
US$'000 US$'000
Cash and short-term deposits 2,027 1,163
17. TRADE AND OTHER PAYABLES
31 December 31 December
2017 2016
US$'000 US$'000
Trade payables 97 162
Other payables
and accruals 116 22
------------ ------------
213 184
Trade and other payables are non-interest bearing and normally
settled in the month following date of invoice.
18. SHARE CAPITAL AND PREMIUM
Share Share
Number Number Capital Capital
Allotted, called of ordinary of deferred - ordinary - deferred Share
up and fully paid shares shares shares shares premium Total
US$000 US$000 US$000 US$000
At 1 January 2017 75,839,596 - 1,048 - 138 1,186
Shares issued as
consideration for
acquisition of
investments 6,003,599 - 76 - 151 227
Proceeds from share
issue at 1.6p per
share 142,006,062 - 182 - 2,772 2,954
Cost of share issue - - - - (153) (153)
Value of placing
warrants - - - - (6) (6)
Share split (see
below) - 81,843,195 (1,011) 1,011 - -
At 31 December
2017 223,849,257 81,843,195 295 1,011 2,902 4,208
On 18 August 2017 the Company passed a special resolution to
sub-divide 81,843,195 ordinary shares of GBP0.01 each into one new
ordinary share of 0.1p each and one deferred share of 0.9p
each.
Ordinary shares have attached to them full voting, dividend and
capital distribution rights (including on a winding up). Deferred
shares are not entitled to vote and do not confer a right to
receive a dividend. The deferred shares are entitled to participate
on a winding up once the ordinary shares have received GBP1,000,000
per ordinary share.
19. SHARE BASED PAYMENTS
As part of the fundraise on 20 August 2017, whereby 142,006,062
ordinary shares were issued for cash, each new ordinary share
issued had a warrant attached to acquire an additional ordinary
share at an exercise price of 3.02 pence with an exercise life of
two years. The fair value of the placing warrants, amounting to
$5,531, has been deducted from the share premium arising from the
fundraise on the basis they were issued for services relating to
the placing.
In addition, the Company issued a total of 22,050,000 share
options, in accordance with the rules of the Company's Share Option
Plan 2016 as approved by shareholders on 18 August 2017.
The awards were approved by the Board on 30 October 2017 (the
"Award Date").
All of the options awarded are for ten years and each award will
vest 33.3% on the first, second and third anniversary of the Award
Date. The exercise price for each award is set at 2 pence per share
in respect of the one third vesting on the first anniversary of the
Award Date; 4 pence per share in respect of the one third vesting
on the second anniversary of the Award Date; and 8 pence per share
in respect of the one third vesting on the third anniversary of the
Award Date. The fair value of these options was determined using
the Black-Scholes valuation model at GBP0.0038 per option. The
significant inputs into the model were a share price of GBP0.0145
at the grant date, volatility of 29%, a dividend yield of GBPNil
and an annual risk-free interest rate of 0.5%. Volatility was based
upon the standard deviation of movement in daily share prices over
the three months prior to date of grant.
Share options issued to the Directors were as follows:
David Linsley 7,200,000
Guy Le Bel 1,350,000
Francis McAllister 1,350,000
Gati Al-Jebouri 1,350,000
The balance of 10,800,000 options were awarded to consultants
and members of the management team.
The fair value of the options, amounting to $38,158, has been
included within administrative expenses within the statement of
comprehensive income.
Two consultants each received a 1,500,000 share options
(3,000,000 options in total) during 2017. The options have an
exercise price of 4.34 pence per share with a three-year exercise
life. The options vested immediately upon grant. The fair value of
these options was determined using the Black-Scholes valuation
model at GBP0.00233 per option. The significant inputs into the
model were a share price of GBP0.02625 at the grant date,
volatility of 27%, a dividend yield of GBPNil and an annual
risk-free interest rate of 0.5%. Volatility was based upon the
standard deviation of movement in daily share prices over the six
months prior to date of grant.
The fair value of the options, amounting to $8,733, has been
included within administrative expenses within the statement of
comprehensive income.
Movements in the number of share options and warrants and their
related weighted average exercise prices are as follows:
2017 2016
Average Average
Options exercise Options exercise
and warrants price and warrants price
Number (pence) Number (pence)
At 1 January 53,082,948 4.34 - -
Granted 167,056,062 3.26 53,082,948 4.34
At 31 December 2017 220,139,010 3.52 53,082,948 4.34
Out of the 220,139,010 (2016: 53,082,948) outstanding options
and warrants, 198,089,010 (2016: 53,082,948) were exercisable at
the year-end. No options or warrants were exercised or forfeited
during the year.
Share options and warrants outstanding at the end of year have
the following expiry date and exercise prices:
Expiry Exercise
Grant-Vest date price 2017 2016
Number (pence) Number Number
2016 2018 4.34 47,082,948 47,082,948
2016 2019 4.34 6,000,000 6,000,000
2017 2019 3.02 142,006,062 -
2017 2020 4.34 3,000,000 -
2017-2018 2027 2.00 7,350,000 -
2017-2019 2027 4.00 7,350,000 -
2017-2020 2027 8.00 7,350,000 -
In addition, 6,003,599 new ordinary shares were issued during
the year as consideration for the acquisition of available for sale
assets. The fair value of the shares was $227,000.
20. FINANCIAL INSTRUMENTS
Significant accounting policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument, are disclosed in note 3.
The only financial assets currently held by the Company are
classified as loans and receivables and cash and cash
equivalents.
Categories of financial instruments
The carrying amounts presented in the statement of financial
position relate to the following categories of assets and
liabilities.
Carrying value
31 December 31 December
2017 2016
US$'000 US$'000
Financial assets
Current
Loans and receivables
Trade and other
receivables 354 26
Cash and cash equivalents 2,027 1,163
2,381 1,189
============ ============
Financial liabilities
Current- amortised
cost
Trade and other
payables (213) (184)
Borrowings - -
(213) (184)
============ ============
As at 31 December 2017, trade and other receivables are all
considered to be recoverable.
All financial liabilities are repayable within one year.
The fair value is equivalent to book value for current assets
and liabilities.
The main risks arising from the Company's financial instruments
are liquidity risk, interest rate risk and foreign currency risk.
The Directors review and agree policies for managing these risks
and these are summarised below.
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Company will encounter difficulty
in meeting its financial obligations as they fall due. The
Directors are current assessing the Company's options in respect of
raising additional finance for the business.
The Directors monitor cash flow on a daily basis and at
quarterly Board meetings in the context of their expectations for
the business, in order to ensure sufficient liquidity is available
to meet foreseeable needs.
Interest rate risk
The interest rate profile of the Company's cash and cash
equivalents as at 31 December was as follows:
US Pound
As at 31 December
2017 Dollars Sterling Total
$'000 $'000 $'000
Cash at bank with
no interest rate 38 1,989 2,027
38 1,989 2,027
US Pound
As at 31 December
2016 Dollars Sterling Total
$'000 $'000 $'000
Cash at bank with
no interest rate 1 1,162 1,163
1 1,162 1,163
The Company's cash at bank is held with an institution with an
A+ credit rating (Fitch).
Foreign currency risk management
The carrying amounts of the Company's foreign currency
denominated monetary assets and monetary liabilities at the
reporting date are as follows:
31 December 31 December
2017 2016
US$'000 US$'000
Cash and cash
equivalents
Pound Sterling 1,989 1,162
1,989 1,162
The following table details the Company's sensitivity to a 10%
increase and decrease in the US dollar against the relevant foreign
currencies. 10% is the sensitivity rate used when reporting foreign
currency risk internally and represents Management's assessment of
the reasonably possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the
year-end for a 10% change in foreign currency rates. A positive
number below indicates an increase in profit and equity where the
US dollar strengthens 10% against the relevant currency. For a 10%
weakening of the US dollar against the relevant currency, there
would be an equal and opposite impact on the profit and equity, and
the balances below would be negative.
British British
pound currency pound currency
impact impact
31 December 31 December
2017 2016
US$'000 US$'000
Effect on
loss +10% 199 116
-10% 199 116
Effect on
equity +10% 199 116
-10% 199 116
21. RELATED PARTY TRANSACTIONS
31 December 31 December
2017 2016
US$'000 US$'000
The Company had the following
transactions with
Weatherly International Plc,
a Company in which Roderick
Webster and John Bryant are
non executive Directors
Management Fee paid - 126
The Company had the following
transactions with
HK ECE a shareholder of the
Company.
Loans repaid during the year - (200)
Loans outstanding at the end
of the year - -
The Company had the following
transactions with Value Generation
Limited, a Company controlled
by Paul Johnson
Consultancy services paid - 96
22. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Company considers its capital to comprise its ordinary share
capital, share premium and accumulated retained losses as well as
loans and reserves (consisting of share based payments reserve and
merger relief reserve).
The Company's objective when maintaining capital is to safeguard
the entity's ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other
stakeholders.
The Company meets its capital needs by equity financing.
Capital for the reporting period under review is summarised as
follows:
31 December 31 December
2017 2016
US$'000 US$'000
Total equity 2,170 1,020
23. EVENTS SUBSEQUENT TO THE REPORTING DATE
The Company signed a Share Purchase Agreement dated 14 February
2018 with Capstone Mining Corp. to acquire 100% of Minto
Exploration Ltd, which operates the Minto Mine. The consideration
for the proposed acquisition is comprised of US$37.5 million in
cash plus new ordinary shares such that, subsequent to completion,
Capstone Mining Corp. will own 9.9% of the Company. The Minto Mine
is an open pit and underground copper-gold-silver mine located in
central Yukon, Canada.
Company information
Directors Francis Ralph McAllister (Non-Executive Director and
Chairman)
David Charles Linsley (Director and Chief Executive Officer)
Guy Le Bel (Non-Executive Director)
Gati Al-Jebouri (Non-Executive Director)
Secretary London Registrars Ltd
Registered office Suite A, 6 Honduras Street
London EC1Y 0TH
Registered number 07352056 (England and Wales)
Auditor PKF Littlejohn LLP
Statutory Auditor
1 Westferry Circus
Canary Wharf
London E14 4HD
Bankers Bank of Scotland
St James's Gate
14-16 Cockspur Street
London SW1Y 5BL
Solicitors Cooley (UK) LLP
Dashwood
69 Old Broad Street
London EC2M 1QS
Joint Brokers SI Capital Limited
46 Bridge Street
Godalming, Surrey GU7 1HL
GMP Securities L.P
300-145 King St W
Toronto, ON M5H 1J8
Arden Partners
25 Old Broad Street
London EC2N 1AR
Registrars Link Asset Management
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Website www.pembridgeresources.com
TDIM PERE
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKCDBKBKBDQB
(END) Dow Jones Newswires
April 30, 2018 02:01 ET (06:01 GMT)
Pembridge Resources (LSE:PERE)
Historical Stock Chart
From Apr 2024 to May 2024
Pembridge Resources (LSE:PERE)
Historical Stock Chart
From May 2023 to May 2024