TIDMURU
RNS Number : 7732L
URU Metals Limited
31 December 2018
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
31 December 2018
URU Metals Limited
("URU" or "the Company")
Interim Results
URU is pleased to announce its interim results for the six
months ended 30 September 2018.
Chairman's Statement
I am pleased to present to our shareholders and stakeholders the
condensed consolidated interim financial statements of the Company
for the six months ended 30 September 2018 ("the Period").
During the Period, the equity market for the mining industry
showed signs of improvement, due to improved commodity prices on
the back of concerns relating to long term supply. Nickel in
particular reached a high of over US$7/lb. Although prices have
subsequently softened, the long term outlook for nickel remains
bullish.
Highlights
The highlights of our progress during the six months ended
September 30, 2018 and to the date of this report can be summarised
as follows:
Consolidation
On 21 November 2018, the Company resolved to re organise the
Company's share capital by combining all of the Existing Ordinary
Shares on the basis of one new ordinary share of no par value ('New
Ordinary Share') for every 1,000 Existing Ordinary Shares, such
shares having the same rights and being subject to the same
restrictions as the Existing Ordinary Shares as set out in the
Articles of the Company ('Consolidation'). All references to common
shares, stock options and warrants in this report have been fully
retrospectively restated to reflect the Consolidation.
Zebediela Nickel Project
The Zebediela Nickel Project remains an exciting Ni-Cu-PGE
exploration play that continues to deliver positive results. During
August 2018, GAP Geophysics carried out a ground geophysical
programme comprising of a time-domain Induced Polarization (IP)/
Resistivity (Res) and ground magnetometer surveys over the
Zebediela Project Area on the Farm Uitloop 3KS, which forms the
core of the project area.
Some 19.6km of survey lines over 11 traverses have mapped up to
5 individual IP chargeability anomalies per traverse, reflecting
wide causative sources at depths of around 10m to 80m
(exceptionally 140m) with an average depth of 50m.
The survey has allowed for a better understanding of the local
geology of the project. In addition to this, the company has
embarked on an extensive review of publicly available data for
neighbouring Ni-PGE projects, which has resulted in an exploration
model that places Critical Zone rocks of the Bushveld Complex,
which host the economic Platreef, Merensky Reef and UG2 Chromitite
reefs, squarely on the Project area at depths of between 30 to 100
m.
Anglo American's operating Mogalakwena Mine mines the Platreef
at surface, and is the world's largest open pit platinum operation,
and Ivanhoe Mines Platreef Project, currently under construction,
targets the Platreef, at depths of about 780 m below surface.
Uitloop is located adjacent to, and updip of, Ivanhoe Mines
Platreef Project.
In all, some ten IP targets have been recommended for
drill-testing, possibly correlating with up dip extensions of
Critical Zone material.
On the 3 December 2018, The Department of Mineral Resources
formally approved and executed the renewal of prospecting right
148PR (the "Right"), which covers the farm Uitloop. The Right will
expire on 23 December 2021. An application in terms of Section 102
of the Mineral and Petroleum Resources Development Act of 2002 (the
MPRDA) has been made to append licences 1074PR and 11921PR to
148PR.
Investment in Management Resource Solutions PLC
On 1 March 2017 the Company acquired 7,550,000 shares of
Management Resource Solutions Plc ("MRS") from Scopn Pty Ltd.
("Scopn") at a price of GBP0.05 per share. As consideration the
Company issued to Scopn 25,166,666 new shares of the Company (each
at an implied price of GBP0.045). On 10 April 2017 the Company
subscribed for an additional 10,000,000 shares of MRS at a price of
GBP0.05 per share for total cash consideration of GBP500,000
bringing the Company's aggregate interest in MRS to 17,550,000
shares (representing 8.91% of its current issued share capital).
The Group believes operational efficiencies can be realised to
restore MRS' profitability and the potential exists for significant
revenue growth as a result of re-opening and/or expanding of mining
operations in New South Wales, coupled with the continual demand
for New South Wales coal from the Chinese, South Korean and
Japanese markets. The Board believes the investment in MRS provides
the Group with a liquid investment with potential near-term
upside.
As at 30 September 2018 the aggregate investment in MRS shares
was valued at $1,695,000 based on share price of GBP0.074 per
share.
MRS has two subsidiaries: Bachmann Plant Hire Pty Ltd ("BPH")
and MRS Subzero Pty Ltd (trading as MRS Services Group, "MRSSG").
The markets which BPH and MRSSG service are the strongest they have
been in years. BPH is currently working at fully capacity and has a
strong pipeline of work to complete. MRSSG is experiencing strong
demand, with revenues now exceeding $4.0m per month. The Hunter
Valley thermal coal price has been strong and stable providing
confidence for the coal mines to commit to repairs and maintenance
and Yancoal / Glencore has recently completed the acquisition of
the Rio Tinto assets in the Hunter Valley. Both BPH and MRSSG were
run as separate operations with little interaction or utilisation
of shared services and group purchasing during the financial years
2015-16 and 2016-17. During late 2016-17 and 2017-18 the Group
prioritised significant cost cutting and restructuring, and has
restructured the senior management. The cost cutting and
restructuring programme is now substantially complete. Further
progress is anticipated in 2018-19 as debt continues to be repaid
from the strong operational cashflow generated by the major
changes, which are now taking effect.
We are pleased in our investment in MRS and look forward to its
future growth in value for our shareholders.
Outlook
URU continues to believe that the long-term fundamentals of the
base minerals industries remain positive and will be working hard
in the coming year to unlock the value of our projects for our
shareholders. The Company maintains its core strategy to develop
its nickel assets, as the Board anticipates growing demand and
price appreciation for nickel in the short to medium term.
Jay Vieira
Non-executive Chairman
28 December 2018
For further information, please contact:
URU Metals Limited
John Zorbas
(Chief Executive Officer) +1 416 504 3978
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker)
Ewan Leggat + 44 (0) 203 470 0470
SVS Securities Plc
(Joint Broker)
Tom Curran +44 (0) 203 700 0093
Notice to Reader
The accompanying unaudited condensed consolidated interim
financial statements of URU Metals Limited (the "Company") have
been prepared by and are the responsibility of management. The
unaudited condensed consolidated interim financial statements have
not been reviewed by the Company's auditors.
URU Metals Limited
Condensed Consolidated Interim Statements of Comprehensive Income
For the Period Ended 30 September 2018
Unaudited
---------------------------------------------------------------------------------------------------
Six months Six months
ended ended
30 September 30 September
2018 2017
$'000 $'000
------------------------------------------------------------------ ------------ ------------
Administrative expenses (408) (537)
------------------------------------------------------------------- ------------ ------------
Operating loss (408) (537)
------------------------------------------------------------------- ------------ ------------
Other comprehensive income (loss)
Items that will not be reclassified subsequently to income (loss)
Unrealised gain (loss) on available-for-sale financial assets 143 (768)
Items that will be reclassified subsequently to income (loss)
Effect of translation of foreign operations (note 9) (17) 328
------------------------------------------------------------------- ------------ ------------
Other comprehensive income (loss) for the period 126 (440)
------------------------------------------------------------------- ------------ ------------
Total comprehensive loss for the period (282) (977)
------------------------------------------------------------------- ------------ ------------
Basic and diluted net loss per share (USD cents) (52.27) (68.91)
------------------------------------------------------------------- ------------ ------------
Weighted average number of common shares outstanding 780,571 779,320
------------------------------------------------------------------- ------------ ------------
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
URU Metals Limited
Condensed Consolidated Interim Statement of Financial Position
30 September 2018
Unaudited
-------------------------------------------------------------------------
As at As at
30 September 31 March
2018 2018
$'000 $'000
----------------------------------------------- ------------ --------
ASSETS
Non-current assets
Property, plant and equipment (note 8) 65 85
Intangible assets (note 9) 3,467 3,243
Long-term prepaid assets (note 7) 41 41
------------------------------------------------ ------------ --------
Total non-current assets 3,573 3,369
Current assets
Available-for-sale financial assets (note 10) 1,695 1,676
Trade and other receivables (note 11) 68 67
Cash and cash equivalents 964 1,317
------------------------------------------------ ------------ --------
Total current assets 2,727 3,060
------------------------------------------------ ------------ --------
Total assets 6,300 6,429
------------------------------------------------ ------------ --------
EQUITY AND LIABILITIES
Equity
Share capital (note 12) 7,806 7,806
Sharepremium (note 12) 46,938 46,938
Reserves (note 13) 1,506 1,380
Accumulated deficit (51,080) (50,672 )
------------------------------------------------ ------------ --------
Total equity 5,170 5,452
------------------------------------------------ ------------ --------
Current liabilities
Trade and other payables (note 14) 1,130 977
------------------------------------------------ ------------ --------
Total liabilities 1,130 977
------------------------------------------------ ------------ --------
Total equity and liabilities 6,300 6,429
------------------------------------------------ ------------ --------
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
Approved on behalf of the Board:
"Jay Vieira", Chairman
"Kyle Appleby", Director
URU Metals Limited
Condensed Consolidated Interim Statement of Cash Flows
30 September 2018
Unaudited
--------------------------------------------------------------------------------------------
Six months Six months
ended ended
30 September 30 September
2018 2017
$'000 $'000
----------------------------------------------------------- ------------ ------------
Operating activities
Net loss for the period (408) (537)
Items not involving cash:
Share-based payments - 127
Depreciation 20 13
Unrealised foreign exchange gain 124 (15)
Changes in non-cash working capital items:
(Increase)/decrease in receivables (1) 30
------------------------------------------------------------ ------------ ------------
Increase in trade and other payables 153 214
------------------------------------------------------------ ------------ ------------
Net cash used in operating activities (112) (168)
Investing activities
Purchase of available-for-sale financial assets - (648)
Purchase of intangible assets (229) (179)
------------------------------------------------------------ ------------ ------------
Net cash used in investing activities (229) (827)
------------------------------------------------------------ ------------ ------------
Financing activities
Proceeds from exercise of stock options - 127
------------------------------------------------------------ ------------ ------------
Net cash provided by financing activities - 127
------------------------------------------------------------ ------------ ------------
Gain on exchange rate changes on cash and cash equivalents (12) 25
------------------------------------------------------------ ------------ ------------
Net decrease in cash and cash equivalents (353) (843)
Cash and cash equivalents, beginning of period 1,317 2,678
------------------------------------------------------------ ------------ ------------
Cash and cash equivalents, end of period 964 1,835
------------------------------------------------------------ ------------ ------------
The accompanying notes to the unaudited condensed consolidated
interim financial statements are an integral part of these
statements.
URU Metals Limited
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
30 September 2018
Unaudited
----------------------------------------------------------------------------
Equity attributable to shareholders
Share Foreign
Option Currency
Shares and
Share Share to be Warrants Translation Accumulated
Capital Premium Issued Reserve Reserve Deficit Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
----------------- ------- ------- ------ -------- ----------- ----------- -----
At 31 March 2017 7,726 46,723 - 2,307 (1,123) (49,476) 6,157
Shares-based
compensation - - - 54 - - 54
Shares issued upon
exercise of stock
options 80 - 123 - - - 203
Reclassification
of fair value of
stock options
exercised - 92 - (92) - - -
Net loss and
comprehensive
loss for the
period - - - - (440) (537) (977)
At 30 September
2017 7,806 46,938 - 2,269 (1,563) (50,013) 5,437
------------------ ------- ------- ------ -------- ----------- ----------- -----
At 31 March 2018 7,806 46,938 - 2,344 (964) (50,672) 5,452
Net loss and
comprehensive
loss for the
period - - - 126 (408) (282)
At 30 September
2018 7,806 46,938 - 2,344 (838) (51,080) 5,170
------------------ ------- ------- ------ -------- ----------- ----------- -----
URU Metals Limited
Notes to Condensed Consolidated Interim Financial Statements
30 September 2018
Unaudited
--------------------------------------------------------------
1. General information
URU Metals Limited (the "Company"), formerly known as Niger
Uranium Limited, and before that, as UraMin Niger Limited, was
incorporated in the British Virgin Islands ("BVI") on 21 May 2007.
The Company's shares were admitted to trading on AIM, a market
operated by the London Stock Exchange on 12 September 2007. The
address of the Company's registered office is Intertrust, P.O. Box
92, Road Town, Tortola, British Virgin Islands, and its principal
office is Suite 401, 4 King Street West, Toronto, Ontario, Canada,
M5H 1A1.
On 21 November, 2018, the Company resolved to re-organise the
Company's share capital by combining all of the Existing Ordinary
Shares on the basis of one new ordinary share of no par value ('New
Ordinary Share') for every 1,000 Existing Ordinary Shares, such
shares having the same rights and being subject to the same
restrictions as the Existing Ordinary Shares as set out in the
Articles of the Company ('Consolidation'). All references to common
shares, stock options and warrants have been fully retrospectively
restated to reflect the Consolidation.
The unaudited condensed interim consolidated financial
statements of the Company for the period ended 30 September 2018
comprise the Company and its subsidiaries.
2. Nature of operations
During the six months ended 30 September 2018, the Group's
principal business activities were the exploration and development
of mineral properties in South Africa.
The business of mining and exploring for minerals involves a
high degree of risk and there can be no assurance that planned
exploration and development programs will result in profitable
mining operations. The Company has not yet established whether its
mineral properties contain reserves that are economically
recoverable. Changes in future conditions could require material
write-downs of the carrying values of mineral properties.
These unaudited condensed consolidated interim financial
statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") applicable to a going
concern which assumes that the Company will be able to realise its
assets and settle its liabilities in the normal course as they come
due for the foreseeable future. As of 30 September, 2018, the
Company has no source of revenues or operating cash flows, incurred
losses of $408,000 for the six months ended 30 September 2018, has
accumulated losses of $51,080,000 (31 March 2018 - $50,672,000) and
expects to incur further losses in the development of its business.
Management is aware, in making its assessment to continue as a
going concern, of material uncertainties related to events or
conditions that may cast significant doubt about the Company's
ability to continue as a going concern. The Company's ability to
continue as a going concern is dependent upon the Company obtaining
additional equity or debt financing and/or new strategic partners.
There is no assurance that management will be successful in
obtaining such financings and this may result in the Company not
meeting its operational and capital requirements.
The Group is in the exploration stage and is subject to the risks and challenges similar to
other companies in a comparable stage of development. These risks include, but are not limited
to:
-- Dependence on key individuals;
-- receipt and maintenance of all required exploration permits and property titles;
-- successful development; and
-- the ability to secure adequate financing to meet the minimum capital required to successfully
develop the Company's projects and continue as a going concern.
3. Basis of preparation
(a) Statement of compliance
The Company applies IFRS as issued by the International
Accounting Standards Board ("IASB"). These unaudited condensed
consolidated interim financial statements have been prepared in
accordance with International Accounting Standard 34, Interim
Financial Reporting. Accordingly, they do not include all of the
information required for full annual financial statements required
by IFRS as issued by the IASB.
The policies applied in these unaudited condensed consolidated
interim financial statements are based on IFRSs issued and
outstanding as of 28 December 2018, the date the Board of Directors
approved the statements. The same accounting policies and methods
of computation are followed in these unaudited condensed
consolidated interim financial stap;tements as compared with the
most recent annual consolidated financial statements as at and for
the year ended 31 March 2018. Any subsequent changes to IFRS that
are given effect in the Company's annual consolidated financial
statements for the year ending 31 March 2018 could result in
restatement of these unaudited condensed consolidated interim
financial statements.
(b) New accounting standards and interpretations
During the six months ended 30 September 2018, the Group adopted
the following IFRS standards:
IFRS 2 - Share-based Payment ("IFRS 2")
IFRS 2 was amended by the IASB in June 2016 to clarify the
accounting for cash-settled share-based payment transactions that
include a performance condition, the classification of share-based
payment transactions with net settlement features and the
accounting for modifications of share-based payment transactions
from cash-settled to equity-settled. On 1 April 2018, the Group
adopted this amendment and has determined that the adoption of this
new amendment does not have a significant impact on its financial
statements.
IFRS 15 - Revenue From Contracts With Customers ("IFRS 15")
IFRS 15 replaces IAS 18 - Revenue, IAS 11 - Construction
Contracts, and some revenue-related interpretations. The standard
contains a single model that applies to contracts with customers
and two approaches to recognising revenue: at a point in time or
over time. The model features a contract-based five-step analysis
of transactions to determine whether, how much and when revenue is
recognised. New estimates and judgmental thresholds have been
introduced, which may affect the amount and/or timing of revenue
recognised. On 1 April2018, the Company adopted IFRS 15 and has
determined that the adoption of this new standard does not have a
significant impact on its financial statements.
IFRS 9 Financial Instruments ("IFRS 9")
On 24 July2014, the IASB issued the completed IFRS 9, Financial
Instruments, (IFRS 9) effective on 1 January 2018 with early
adoption permitted.
IFRS 9 includes finalised guidance on the classification and
measurement of financial assets. Under IFRS 9, financial assets are
classified and measured either at amortised cost, fair value
through other comprehensive income ("FVOCI") or fair value through
profit or loss ("FVTPL") based on the business model in which they
are held and the characteristics of their contractual cash flows.
IFRS 9 largely retains the existing requirements in IAS 39
Financial Instruments: recognition and measurement, for the
classification and measurement of financial liabilities.The Group
adopted IFRS 9 in its consolidated financial statements on 1 April
2018. Due to the nature of its financial instruments, the adoption
of IFRS 9 had no impact on the opening accumulated deficit balance
on 1 April 2018. The impact on the classification and measurement
of its financial instruments is set out below.
All financial assets not classified at amortised cost or FVOCI
are measured at FVTPL. On initial recognition, the Company can
irrevocably designate a financial asset at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch.
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated at FVTPL:
It is held within a business model whose objective is to hold
the financial asset to collect the contractual cash flows
associated with the financial asset instead of selling the
financial asset for a profit or loss; Its contractual terms give
rise to cash flows that are solely payments of principal and
interest.
All financial instruments are initially recognised at fair value
on the consolidated statement of financial position. Subsequent
measurement of financial instruments is based on their
classification. Financial assets and liabilities classified at
FVTPL are measured at fair value with changes in those fair values
recognized in the consolidated statement of loss and comprehensive
loss for the year. Financial assets classified at amortised cost
and financial liabilities are measured at amortised cost using the
effective interest method.
The following table summarises the classification and
measurement changes under IFRS 9 for each financial instrument:
Classification IAS 39 IFRS 9
---------------------------------------- -------------------------------------------- --------------
Cash and cash equivalents Loans and receivables (amortised cost) Amortised cost
Trade and other receivables Loans and receivables (amortised cost) Amortised cost
Marketable securities (i) Available for sale FVOCI
Accounts payable and accrued liabilities Other financial liabilities (amortised cost) Amortised cost
---------------------------------------- -------------------------------------------- --------------
(i) The Company made an irrevocable election upon adoption of
IFRS 9 to classify the marketable securities at FVOCI, with all
subsequent changes in fair value being recognised in other
comprehensive income (loss). FVOCI is a new measurement category
with which the cumulative changes in fair value will remain in OCI
and is not reclassified to profit or loss upon disposal of the
investment.
The original carrying value of the Company's financial
instruments under IAS 39 has not changed under IFRS 9.
The following IFRS and IFRIC Interpretations have been issued
but have not been applied by the Group in preparing these financial
statements as they are not as yet effective and in some cases had
not yet been adopted by the EU.
The Group intends to adopt these Standards and Interpretations
when they become effective, rather than adopt them early.
-- IFRS 16, 'Leases"
-- IFRS 10 and IAS 28 (amendments), 'Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture'
-- Amendments to IAS 7, 'Disclosure Initiative'
-- Amendments to IAS 12, 'Recognition of Deferred Tax Assets for Unrealised Losses'
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the Group in future
periods.
IFRS 16 is a significant change to lessee accounting and all
leases will require balance sheet recognition of a liability and a
right-of-use asset except short term leases and leases of low value
assets. The effect on the Group cannot be accurately quantified at
this stage.
A number of IFRS and IFRIC interpretations are also currently in
issue which are not relevant for the Group's activities and which
have not therefore been adopted in preparing these financial
statements.
4. Financial risk management
The Company's Board of Directors monitors and manages the
financial risks relating to the operations of the Group. These
include credit risk, liquidity risk and market risk which includes
foreign currency and interest rate risks.
Credit risk
Credit risk is the risk of loss associated with a counterparty's
inability to fulfill its payment obligations. The Group's credit
risk is primarily attributable to the Group's cash and cash
equivalents and trade and other receivables. The Group has no
allowance for impairment that might represent an estimate of
incurred losses on other receivables. The Group has cash and cash
equivalents of $964,000 (31 March 2018 - $1,317,000), which
represent the maximum credit exposure on these assets. As at 30
September 2018, the majority of the cash and cash equivalents were
held with a major Canadian chartered bank from which management
believes the risk of loss to be minimal.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
Typically the Group tries to ensure that it has sufficient cash
on demand to meet expected operational expenses for a period of
twelve months, including the servicing of financial obligations;
this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted. Management monitors the rolling
forecasts of the Group's liquidity reserve on the basis of expected
cash flows.
The following are the contractual maturities of financial
liabilities:
Carrying Contractual 6 months 6 months to
amount cash flows or less 5 years
$'000 $'000 $'000 $'000
------------------------- -------- ----------- -------- -------------
30 September 2018
Trade and other payables 1,130 1,130 1,130 -
-------------------------- -------- ----------- -------- -------------
31 March 2018
Trade and other payables 977 977 977 -
-------------------------- -------- ----------- -------- -------------
Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's loss or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
Foreign currency rate risk
The Group, operating internationally, is exposed to currency
risk on purchases that are denominated in a currency other than the
functional currency of the Company's entities, primarily Pound
Sterling ("GBP"), the Canadian Dollar ("CAD"), the South African
Rand ("ZAR"), Swedish Krona ("SEK") and the US Dollar ("USD").
The Group does not hedge its exposure to currency risk.
In respect of other monetary assets and liabilities denominated
in foreign currencies, the Group's policy is to ensure that its net
exposure is kept to an acceptable level by buying or selling
foreign currencies at spot rates when necessary to address short
term imbalances.
The Group's exposure to foreign currency risk, based on notional
amounts, was as follows:
USD GBP SEK CAD Total
$'000 $'000 $'000 $'000 $'000
---------------------------- ----- ----- ----- ----- -------
30 September 2018
Cash and cash equivalents - 949 - 15 964
Trade and other receivables - - - 68 68
Trade and other payables - (217) (58) (855) (1,130)
----------------------------- ----- ----- ----- ----- -------
31 March 2018
Cash and cash equivalents - 1,294 - 23 1,317
Trade and other receivables - - - 67 67
Trade and other payables - (217) (58) (702) (977)
----------------------------- ----- ----- ----- ----- -------
Interest rate risk
The financial assets and liabilities of the Group are subject to
interest rate risk, based on changes in the prevailing interest
rate. The Group does not enter into interest rate swap or
derivative contracts. The primary goal of the Company's investment
strategy is to make timely investments in listed or unlisted mining
and mineral development properties to optimise shareholder value.
Where appropriate, the Group will act as an active investor and
will strive to advance corporate actions that deliver value adding
outcomes. The Group will undertake joint ventures with companies
that have the potential to realise value through mineral project
development, and invest substantially in those joint ventures to
advance asset development over the near term.
Sensitivity analysis
A 10% strengthening of the USD against the following currencies
at 30 September 2018 would have increased/(decreased) equity and
profit or loss by the amounts shown below. This was determined by
recalculating the USD balances held using a 10% greater exchange
rate to the USD. This analysis assumes that all other variables, in
particular interest rates, remain constant.
30 September 2018 31 March 2018
Equity Profit or loss Equity Profit or loss
$'000 $'000 $'000 $'000
---- ------ -------------- ------ --------------
GBP - (73) - (108)
CAD - 77 - 61
SEK - 6 - 6
----- ------ -------------- ------ --------------
5. Capital risk management
The Group includes its share capital and premium, reserves and
accumulated deficit as capital. The Group's objective is to
maintain a flexible capital structure which optimises the costs of
capital at an acceptable risk. In light of economic changes and
with the risk characteristics of the underlying assets, the Group
manages the capital structure and makes adjustments to it. As the
Group has no cash flow from operations and in order to maintain or
adjust the capital structure, the Group may attempt to issue new
shares, issue debt and/or find a strategic partner. The Group is
not subject to externally imposed capital requirements.
The Group prepares annual expenditure budgets to facilitate the
management of its capital requirements and updates them as
necessary depending on various factors such as capital deployment
and general industry conditions. During the six months ended 30
September 2018, there were no changes in the Group's approach to
capital management.
6. Earnings per Share
The calculation of basic and diluted earnings per share is based
on the result attributable to shareholders divided by the weighted
average number of ordinary shares in issue in the period.
Basic earnings per share amounts are calculated by dividing net
loss for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the period.
The Company has potentially issuable shares which relate to
share options issued to directors and third parties. In the periods
ended 30 September 2018 and 30 September 2017 none of the options
had a dilutive effect on the losses.
Six months Six months
ended ended
30 September 30 September
2018 2017
$'000 $'000
------------------------------------------------------------------------------- ------------ ------------
Loss used in calculating basic and diluted earnings per share (408) (537)
-------------------------------------------------------------------------------- ------------ ------------
Number of shares
Weighted average number of common shares outstanding for the purpose of basic
earnings per
share 780,571 779,320
Weighted average number of common shares outstanding for the purpose of diluted
earnings per
share 780,571 779,320
-------------------------------------------------------------------------------- ------------ ------------
Basic net loss per share (USD cents) (52.27) (68.91)
Diluted net loss per share (USD cents) (52.27) (68.91)
-------------------------------------------------------------------------------- ------------ ------------
7. Long-term prepaid assets
As at As at
30 September 31 March
2018 2018
$'000 $'000
------------------------- ------------ --------
Long-term prepaid assets 41 41
-------------------------- ------------ --------
On determination that an impairment charge was required for the
Group's SSOAB Licences project, the Group identified a long-term
prepaid asset for future drilling costs that may be applied to
projects undertaken in other locations. Accordingly, the long-term
prepaid asset was transferred out of intangible assets.
8. Property, plant and equipment
Field
equipment
COST $'000
--------------------------------------- ----------
At 31 March 2018 and 30 September 2018 121
---------------------------------------- ----------
Field
equipment
ACCUMULATED DEPRECIATON $'000
---------------------------- ----------
At 31 March 2018 36
Depreciation for the period 20
----------------------------- ----------
At 30 September 2018 56
----------------------------- ----------
Field
equipment
CARRYING VALUE $'000
--------------------- ----------
At 31 March 2018 85
At 30 September 2018 65
---------------------- ----------
9. Intangible assets
Exploration costs
--------------------- -----
COST $'000
---------------------- -----
At 31 March 2018 5,061
Additions 230
Foreign exchange (13)
---------------------- -----
At 30 September 2018 5,278
---------------------- -----
ACCUMULATED AMORTISATION AND IMPAIRMENT $'000
---------------------------------------- -----
At 31 March 2018 1,818
Foreign exchange (7)
----------------------------------------- -----
At 30 September 2018 1,811
----------------------------------------- -----
CARRYING VALUE $'000
--------------------- -----
At 31 March 2018 3,243
At 30 September 2018 3,467
---------------------- -----
9. Intangible assets (continued)
The Group operates three distinct projects, SSOAB Licences,
Nueltin Licence and the South African Projects as detailed
below:
The exploration costs, amortisation and impairment detailed in
the above table are in respect of the Group's South African project
only. The Group's exploration costs in respect of its SSOAB
Licences project of $1,145,000 were fully impaired at 31 March 2016
and the exploration costs in respect of its Nueltin Licence project
of $153,000 were fully impaired at 31 March 2015.
SSOAB Licences
Svenska Skifferoljeaktiebolaget ("SSOAB") had 100% ownership of
several exploration licences near the town of Örebro, Sweden. The
Swedish licences are considered to be a single project, and thus to
be one CGU. During the year ended 31 March 2016, due to the
continued decline of the prices of oil and uranium, the Group
decided not to pursue the continued development of SSOAB properties
and therefore determined that the recoverable amount of the
intangible assets under SSOAB properties was estimated to be $nil.
The Group fully impaired the intangible assets in the consolidated
statement of comprehensive income for the year ended 31 March 2016.
The foreign currency reserve of SSOAB was reclassified from equity
to the consolidated statement of comprehensive income in the year
ended 31 March 2017.
Nueltin Licence
Nueltin was party to an option agreement with Cameco Corporation
("Cameco"), the holder of a licence located in the Nunavut
Territory of Canada. Under the agreement, Nueltin could earn 51%
interest in the project from Cameco in return for exclusively
funding CDN$2.5 million in exploration expenditure by 31 December
2016. The Cameco project was considered to be one CGU. During the
year ended 31 March 2015 the Company fully impaired the intangible
asset as the Group had no plan to pursue the project in Nunavut
Territory and thus let the option expire.
South African Projects
In November 2013, the Group acquired (i) a 100% interest in
Southern Africa Nickel Limited ("SAN Ltd.") which had been the
Group's joint venture partner since 2010 on the Zebediela Nickel
Project and (ii) a 50% interest in the Burgersfort Project. SAN Ltd
in turn had a 74% interest in a joint operation (the "SAN-Umnex
Joint Venture"). The remaining 26% was held by Umnex Mineral
Holdings Pty ("UMH"), which had title to the Zebediela licences
through its subsidiary, UML. With the Group's acquisition of SAN
Ltd., the SAN-URU joint venture was dissolved and San Ltd. obtained
ownership of the JV's 50% interest in the Burgersfort Project with
BSC Resources as the other party to the agreement. On 10 April
2014, SAN Ltd. and UMH agreed that SAN Ltd. would purchase 100% of
Umnex Minerals Limpopo Pty ("UML") from UMH for consideration of
33,194,181 new Group shares and 8,000,000 bonus shares issued to
directors and officers for their services in the acquisition of
UML.
The Zebediela Nickel Project extends over three separate
adjacent prospecting rights in the Limpopo Province of South
Africa. All three rights are now held by Lesego Platinum Uitloop
Pty ("LPU"), which in turn is 100% owned by UML.
All three rights are currently compliant with minimum
expenditure obligations, annual report submissions, annual
prospecting fees, and submitted prospecting work programs.
Under the terms of the acquisition agreement, UMH is permitted
to return the shares and take back the licences should the
Company:
-- fail to maintain adequate cash funds to meet its general and project expenditure obligations,
or
-- fail to meet the purchased rights' minimum statutory expenditure obligations
As at 30 September 2018, the "general and project expenditure
obligations" and the "minimum statutory expenditure obligations" of
the general and project expenditure obligations had not been
determined.
Additionally, conditional consideration of 12,000,000
free-trading shares is payable if either 1) a transaction is
consummated by the Company to sell, farm-out, or similarly dispose
of any portion of a mineral project on some or all of the mining
titles, or 2) a mining right is obtained from the South African
Department of Mines and Resources in respect of some or all of the
rights, or 3) an effective change of control of the Company occurs.
As at 30 September 2018 none of the above conditions have
occurred.
On 19 April 2017, the Company entered into a Corporate and
Management Services Agreement (the "Agreement") with UMH. As per
the Agreement, UMH shall provide to UML services including project
management, coordination of mining rights application, mineral
rights management, finance and accounting, technical,
metallurgical, engineering and geological services and corporate
finance and capital raising. In exchange of the services, UMH will
earning the following fees:
1. Once the Bankable Feasibility Study commences a monthly
retainer of ZAR150,000 until then a monthly retainer of ZAR75,000
will be paid;
2. First right of offer for technical, metallurgical,
engineering and geological services at market related pricing;
3. Capital raising and corporate finance fees of 5% of the
transaction value of capital raised through UMH sources;
4. UMH will be issued a 1.5% royalty on all revenue generated
from the Zebediela project. 1% of the royalty can be purchased back
by URU or its successor for the amount of $2 million provided that
URU exercises this right within 24 months of the Mining Right being
issued by the Department of Mineral Resources of South Africa.
10. Available-for-sale financial assets
As at As at
30 September 31 March
2018 2018
$'000 $'000
--------------------------------------------------------- ------------ --------
At 1 April 2018/1 April 2017 1,676 1,173
Addition - 650
Fair value adjustment through other comprehensive income 143 (334)
Foreign exchange (loss)/gain (124) 187
---------------------------------------------------------- ------------ --------
At 30 September 2018/31 March 2018 1,695 1,676
---------------------------------------------------------- ------------ --------
On 1 March 2017, the Group acquired 7,550,000 shares of
Management Resource Solutions Plc ("MRS") for GBP0.15 per share by
issuance of 25,166,666 ordinary shares of the Group. The fair value
of the MRS shares was determined to be the value of the shares of
the Group issued, as MRS was a public company whose shares were not
trading at the time and the market price was not available. On 5
May 2017, the MRS shares resumed trading on the AIM market of the
London Stock Exchange.
During the year ended 31 March 2018 the Group acquired an
additional 10,000,000 ordinary shares of MRS at GBP0.05 per share.
At 30 September 2018 and 31 March 2018 the Group held 17,550,000
ordinary shares representing 9.59% of the issued share capital of
MRS.As at 30 September 2018 the investments in MRS shares were
valued at $1,695,000 based on share price of GBP0.074 per
share.
Management have assessed whether the Group exercises significant
influence over MRS and have taken into consideration the criteria
as set out in IAS28 'Investments in Associates' and have determined
that the Group did not exercise significant influence over MRS
during the period.
11. Trade and other receivables
31 March 31 March
2018 2018
$'000 $'000
------------------- ---------------- ---------------
Other receivables 68 67
------------------- ---------------- ---------------
12. Share capital and share premium
Number of Share capital Share premium Total
shares $'000 $'000 $'000
--------------------------------------------------- --------- ------------- ------------- -------
At 31 March 2017 772,571 7,726 46,723 54,449
Shares issued upon exercise of stock options (vii) 8,000 80 123 203
Reclassification of fair value of stock options
exercised (vii) - - 92 92
At 30 September 2017, 31 March 2018 and 30 September
2018 780,571 7,806 46,938 54,744
---------------------------------------------------- --------- ------------- ------------- -------
Issued shares
All issued shares are fully paid up.
Authorised: unlimited number of common shares. There are no
preferences or restrictions attached to any classes of common
shares.
(i) During the year ended 31 March 2018 8,000,000 shares were
issued upon exercise of stock options. These are shown as 8,000 to
reflect the post year end share consolidation.
Unissued shares
In terms of the BVI Business Companies Act, any unissued shares
are under the control of the Directors.
Dividends
Dividends declared and paid by the Company were $nil for the
period ended 30 September 2018 (30 September 2017 - $nil).
13. Reserve
(a) Share option and warrants reserve
The Share Option Plan is administered by the Board of Directors,
which determines individual eligibility under the plan for
optioning to each individual. Below is disclosure of the movement
of the Company's share options as well as a reconciliation of the
number and weighted average exercise price of the Company's share
options outstanding on 30 September 2018.
The assessed fair value at grant date is determined using the
Black-Scholes Model that takes into account the exercise price, the
term of the option, the share price at grant date, the expected
price volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the
option.
During the year ended 31 March 2018 30,200 share options were
granted. The options vested on grant and 15,050 options are
exercisable at a price of GBP0.06 and 15,150 options are
exercisable at GBP0.09.
The inputs into the option pricing model for the 15,050 options
granted in April 2017 are as follows:
Weighted average exercise price GBP0.06
Expected volatility 92.88%
Expected life 5 years
Risk-free interest rate 0.91%
Expected dividends 0.0%
The inputs into the option pricing model for the 15,150 options
granted in April 2017 are as follows:
Weighted average exercise price GBP0.09
Expected volatility 92.88%
Expected life 5 years
Risk-free interest rate 0.91%
Expected dividends 0.0%
(i) Reconciliation of share options outstanding as at 30
September 2018:
Weighted Number of
average options originally Number
Exercise prices (GBP) remaining life (years) granted exercisable
--------------------- ---------------------- ------------------ -----------
60 3.65 15,050 15,050
90 3.65 15,150 15,150
49 2.06 2,633 2,633
--------------------- ---------------------- ------------------ -----------
70 3.52 32,833 32,833
--------------------- ---------------------- ------------------ -----------
(ii) Continuity and exercise price
The number and weighted average exercise prices of share options
are as follows:
Weighted
average
Number exercise price
of options per share (GBP)
----------------------------------------------------------- ---------- ---------------
At 31 March 2017 11,133 30.00
Options exercised (8,000) 34.00
Options expired unexercised (500) 34.00
Options granted 30,200 80.00
------------------------------------------------------------ ---------- ---------------
At 30, September 2017, 31 March 2018 and 30 September 2018 32,833 70.00
------------------------------------------------------------ ---------- ---------------
The following is a summary of the Company's warrants granted
under its Share Incentive Scheme. As at 30 September 2018, the
following warrants, issued in respect of capital raising, had been
granted but not exercised:
Number of Exercise Expiry Fair value at
Name Date granted Date vested warrants price (GBP) date grant date (GBP)
--------- --------------- --------------- --------- ----------- -------------- ----------------
9 October
Beaumont 9 October 2009 2009 100 345.000 9 October 2019 0.345
--------- ----------------- ------------- --------- ----------- -------------- ----------------
(b) Foreign currency translation reserve
The foreign currency translation reserve represents foreign
currency differences recognised directly in other comprehensive
income when assets and liabilities of foreign operations are
translated to the Group's presentation currency at exchange rates
at the reporting date and income and expenses are translated to the
Group's presentation currency at average exchange rates.
14. Trade and other payables
As at As at
30 September 31 March
2018 2018
$'000 $'000
--------------- ------------ --------
Other payables 433 358
Accruals 697 619
---------------- ------------ --------
1,130 977
--------------- ------------ --------
15. Related party transactions
(a) Transactions with key management personnel
During the six months ended 30 September 2018, nil (six months
ended 30 September 2017 - 24,400) share options were granted to key
management personnel as defined by IAS 24 'Related party
disclosures'. Key management personnel include J. Peng, a senior
employee of Marrelli Support Services Inc. (MSSI), a company which
provides financial accounting services to the Group. The share
options expire on 19 April 2022.
The following share options, granted to current and past
directors and management, were outstanding as at 30 September
2018.
Weighted Number of
average options originally Expiry
Directors/officers exercise price (GBP) granted date
---------------------- -------------------- ------------------ -------------
Directors
J. Zorbas 0.06 5,000 19 April 2022
J. Zorbas 0.09 5,000 19 April 2022
J. Vieira 0.06 2,600 19 April 2022
J. Vieira 0.09 2,600 19 April 2022
Management
J. Peng 0.06 1,000 19 April 2022
J. Peng 0.09 1,000 19 April 2022
Former director
D. Subotic 0.06 2,600 19 April 2022
D. Subotic 0.06 2,60 19 April 2022
H. Kloepper 0.06 1,000 19 April 2022
H. Kloepper 0.09 1,000 19 April 2022
---------------------- -------------------- ------------------ -------------
(b) Directors' remuneration
Six months Six months
ended ended
30 September 30 September
2018 2017
$'000 $'000
------------------------------ ------------ ------------
Fees for services as director 16 13
Basic salary 92 92
------------------------------- ------------ ------------
Total 108 105
------------------------------- ------------ ------------
Included in trade and other payables in note 14 are amounts
accrued in respect of fees and salary of directors' of the Company
in the period totalling $675,000 being amounts due to J.Zorbas
($618,000,(31 March 2018:$527,000)); J Vieira ($36,000, (31 March
2018:$32,000)); K. Appleby $8,000 (31 March 2018: $nil) and H.
Kloepper ($13,000,(31 March 2018:$13,000)).
16. Segmental information
(a) Reportable segments
The Company has two reportable segments, as described below,
which are the Company's strategic business units. Both are
determined by the CEO, the Company's chief operating
decision-maker, and have not changed in the year. The strategic
business units offer different services, and are managed separately
because they require different strategies.
The following summary describes the operations in each of the
Company's reportable segments:
Exploration: Includes obtaining licences and exploring these licence areas
Corporate Office: Includes all Company administration and procurement
There are no other operations that meet any of the quantitative
thresholds for determining reportable segments during the periods
ended 30 September 2018 or 2017.
There are varying levels of integration between the Exploration
and Corporate Office reportable segments. This integration includes
shared administration and procurement services.
Information regarding the results of each reportable segment is
included below. Performance is measured based on segmented results.
Any inter-segment transactions would be determined on an arm's
length basis. Inter-segment pricing for the periods ended 30
September 2018 and 2017 consisted of funding advanced from
Corporate Office to Exploration.
(b) Operating segments
Exploration Corporate office Total
2018 2017 2018 2017 2018 2017
Six months ended 30 September $'000 $'000 $'000 $'000 $'000 $'000
----------------------------------- ----- ----- -------- ------- ----- -----
Depreciation (20) (13) - - (20) (13)
Reportable segment loss before tax (20) (13) (388) (524) (408) (537)
------------------------------------ ----- ----- -------- ------- ----- -----
Exploration Corporate office Total
As at 30 September 2018 2017 2018 2017 2018 2017
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------- ----- ----- --------- ------ ------ -----
Reportable segment assets 3,499 3,207 2,801 3,137 6,300 6,344
Reportable segment liabilities (10) (10) (1,120) (881) (1,130) (891)
-------------------------------- ----- ----- --------- ------ ------ -----
(c) Geographical segments
During the periods ended 30 September 2018 and 2017, business
activities took place in Canada and South Africa.
In presenting information based on the geographical segments,
segment assets are based on the physical location of the
assets.
The following table presents segmented information on the
Company's operations and net loss for the period ended 30 September
2018 and assets and liabilities as at 30 September 2018:
Canada Sweden South Africa Total
$'000 $'000 $'000 $'000
------------------- ------ ------ ------------ ------
Net loss (388) - (20) (408)
Total assets 2,801 - 3,499 6,300
Non-current assets 65 - 3,508 3,573
Liabilities (1,120) (10) - (1,130)
-------------------- ------ ------ ------------ ------
The following table presents segmented information on the
Company's operations and net loss for the six months ended 30
September 2017 and assets and liabilities as at 30 September
2017:
Canada Sweden South Africa Total
$'000 $'000 $'000 $'000
------------------- ------ ------ ------------ -----
Net loss (524) - (13) (537)
Total assets 3,137 - 3,207 6,344
Non-current assets 148 - 3,168 3,316
Liabilities (881) (10) - (891)
-------------------- ------ ------ ------------ -----
17. Contingent liabilities
The Group is subject to the conditional consideration in respect
of the acquisition of UML as detailed in note 9.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FEAFIUFASESE
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