Interim Financial Statements
For immediate release: 0700hrs 23rd December 2008
Emerging Metals Limited
("EML", "Emerging Metals" or "the Company")
Unaudited interim financial statements for the six month period ended 30
September 2008
Emerging Metals Limited (AIM: EML), the mining company focused on minor and
emerging metals, today announces its interim results for the six month period
ended 30th September 2008.
CHAIRMEN'S STATEMENT
Dear Shareholders,
Since admission to the AIM on 11 July 2008 Emerging Metals Limited has
continued work on the feasibility study for the Tsumeb Slag Stockpiles Project,
specifically the completion of drilling and trenching of the stockpiles and is
continuing with metallurgical testing designed to determine the optimum
processing method for the project, as previously planned. The feasibility study
is on schedule and on budget to be completed as required by the EML Weatherly
agreement.
Additionally the Company has been active in reviewing in depth numerous
possible opportunities in a wide range of minor metals throughout the world, in
Africa, Asia, Europe, and North and South America. Opportunities reviewed have
included exposure to both physical quantities of minor metals and to additional
minor metals projects.
With the recent dramatic negative developments in world equity markets the
Company's prudent approach to investment has proved to be fortuitous. In
particular, the values of share prices in the natural resources sector are at a
fraction of their former levels and many companies are trading well below their
net asset value. This situation is providing the Company with attractive
opportunities to gain exposure to additional minor metals projects by way of
acquiring stakes in certain other quoted companies In its current situation,
the Company, with its US$20 million cash and marketable securities balance, and
with no debt, is in a strong position to acquire interests on attractive terms
that can be translated into excellent returns in the future. Accordingly, in
the coming months we expect to be looking at gaining exposure to more
additional minor metals opportunities through acquisition of stakes in listed
companies as well as projects that we would develop ourselves.
It is in this spirit that EML has invested US$5.85 million in acquiring 6.28
percent of Kalahari Minerals Plc, an AIM traded exploration and development
company whose principal asset is a 39.1 per cent interest in Extract Resources
Limited, an ASX listed uranium exploration and development company with
significant uranium assets in Namibia, namely the Husab uranium project
comprising the Rossing South, Ida Dome and Hildenhof deposits. Recent
exploration results reinforce the Company's belief that the area has the strong
potential to host an economic uranium deposit. The acquisition of this interest
in Kalahari Minerals gives Emerging Metals exposure to a world class uranium
resource, an emerging metal with a very favourable supply-demand outlook. It
also leverages on Emerging Metals existing platform and operations at Tsumeb in
Namibia.
The coming year should provide excellent opportunities for the Company to
acquire holdings at unprecedented low cost with outstanding prospects for the
future. With the extensive industry knowledge and contacts of the Board and of
major shareholders EML is well placed to capitalize on the current situation
and to build the basis for the future of the Company.
We would like to express our appreciation to the shareholders for their
continued support.
Stephen Dattels James Mellon
Co-chairman Co-chairman
23rd December 2008
Income statement
Notes For the period For the period
from 1 April 2008 from 4 July 2007
to 30 September (date of
2008 incorporation) to
31 March 2008
(Unaudited)
£ £
Income 1(f) - -
Operating expenses
Personnel expenses (153,526) (66,141)
Other costs 2 (976,986) (1,684,688)
Exchange gains 446,036 78,222
────── ──────
Net loss before interest (684,476) (1,672,607)
Interest received 1(f) 193,591 174,031
────── ──────
Loss before taxation (490,885) (1,498,576)
Taxation - -
****** ******
Net loss for the period (490,885) (1,498,576)
Basic loss per share ****** ******
Diluted loss profit per £0.0015 £0.0049
share
£0.0014 £0.0046
In the current and preceding periods, there were no recognised gains or losses
other than those dealt with in the income statement.
Balance sheet
Notes Unaudited at 30 Audited at 31
September 2008 March 2008
£ £
Assets
Non-current assets
Intangible Fixed Assets 1(c),3 98,553 -
Land options 1(d),4 4,818,455 4,818,455
──────── ────────
4,917,008 4,818,455
Current assets
Receivables and 1(g) 6,277 36,355
prepayments
Cash and cash equivalents 1(g) 11,229,118 9,056,161
──────── ────────
Total assets 16,152,403 13,910,971
â•â•â•â•â•â•â•â• â•â•â•â•â•â•â•â•
Equity and liabilities
Capital and reserves
Called up share capital 5 - -
Share premium 5 14,560,530 11,831,373
Share Option Reserve 5 3,504,144 3,504,144
Accumulated loss (1,989,461) (1,498,576)
──────── ────────
Total equity 16,075,213 13,836,941
Current liabilities
Trade and other payables 77,190 74,030
──────── ────────
Total equity and 16,152,403 13,910,971
liabilities
â•â•â•â•â•â•â•â• â•â•â•â•â•â•â•â•
Statement of changes in equity
Share Share Share Accumulated Total
Premium Option Capital Losses
Reserve
£ £ £ £ £
Balance at 4 July 2007 - - - - -
Net loss for the period - - - (1,498,576) (1,498,576)
Shares issued 11,831,373 3,504,144 - - 11,831,373
─────── ─────── ────── ─────── ********
Balance at 31 March 11,831,373 3,504,144 - (1,498,576) (13,836,941)
2008
â•â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â• â•â•â•â•â•â•â• ********
Share Share Share Accumulated Total
Premium Option Capital Losses
Reserve
£ £ £ £ £
Balance at 31 March 11,831,373 3,504,144 - (1,498,576) (13,836,941)
2008
Net loss for the period - - - (490,885) (490,885)
Shares issued 2,729,157 - - - 2,729,157
─────── ─────── ────── ─────── ********
Balance at 30 September 14,560,530 3,504,144 - (1,989,461) (16,075,213)
2008
â•â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â• â•â•â•â•â•â•â• ********
Cash flow statement
Notes For the For the period
period from from 4 July
1 April 2008 2007 (date of
to 30 incorporation)
September to 31 March 2
2008 008
(Unaudited)
£ £
Cash flows from operating activities
Operating loss including interest 7(a) (490,885) (1,498,576)
Decrease / (increase) in receivables 7(b) 30,078 (36,355)
Increase in payables 7(b) 3,160 74,030
──────── ────────
Net cash outflow from operating activities (457,647) (1,460,901)
Cash flows from investing activities
Intangible fixed asset additions 3 (98,553) -
Land options acquired 4 - (1,421,000)
Cash flows from financing activities 5 2,729,157 15,335,517
Increase in share premium 4 - (2,302,470)
Ordinary shares issued in regard to land
options acquired
Share options issued in regard to land 4 - (1,094,985)
options acquired
──────── ────────
Increase in cash and cash equivalents 2,172,957 9,056,161
Cash and cash equivalents at beginning of 9,056,161 -
period
──────── ────────
Cash and cash equivalents at the end of 11,229,118 9,056,161
period
â•â•â•â•â•â•â•â• â•â•â•â•â•â•â•â•
Notes
(forming part of the financial statements for the six months ended 30 September
2008)
1 Accounting policies
Emerging Metals Limited ("The Company") is a company domiciled in the British
Virgin Islands. The condensed consolidated interim statements are as at and for
the six months ended 30 September 2008.
The consolidated financial statements of the Company as at and for the period
from 7 July 2007 (date of incorporation) to 31 March 2008 are available on
request from the Company's registered office at Craigmuir Chambers, Road Town,
Tortola, British Virgin Islands.
The financial statements incorporate the principal accounting policies set out
below.
a) Statement of compliance
These condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS") IAS 34
Interim Financial Reporting. They do not include all of the information
required for full annual financial statements, and should be read in
conjunction with the consolidated financial statements of the Company as at and
for the period from 7 July 2007 (date of incorporation) to 31 March 2008.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 19 December 2008.
b) Basis of preparation
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision only affects that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
c) Exploration & Evaluation Assets
Exploration & evaluation assets are derived from the fair value paid as
consideration for the investment. An annual impairment review is carried out
each year with any impairments going through the income statement.
d) Land options
In the opinion of the Directors, land options should be and thus are stated at
cost. This is estimated to be the current market value of the options. There
will be no amortisation of the premium paid.
e) Impairment
The carrying amounts of the Company's assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If there is
any indication that an asset may be impaired, its recoverable amount is
estimated. The recoverable amount is the higher of its net selling price and
its value in use.
In assessing value in use, the expected future cash flows from the asset are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset.
An impairment loss is recognised whenever the carrying amount of an asset
exceeds
it's recoverable amount.
For an asset that does not generate cash inflows that are largely independent
of those from other assets, the recoverable amount is determined for the
cash-generating unit to which the asset belongs. An impairment loss is
recognised in the income statement whenever the carrying amount of the
cash-generating unit exceeds its recoverable amount.
A previously recognised impairment loss is reversed if the recoverable amount
increases as a result of a change in the estimates used to determine the
recoverable amount, but not to an amount higher than the carrying amount that
would have been determined (net of depreciation) had no impairment loss been
recognised in prior years.
f) Revenue
There is no revenue to date as the Company has not commenced trading.
Interest income has been earned during the period, which is accrued on a time
apportion basis, by reference to the principal outstanding and the effective
interest rate applicable.
g) Financial instruments
Measurement
Financial instruments are initially measured at cost, which includes
transaction costs. Subsequent to initial recognition these instruments are
measured as set out below.
Trade and other receivables
Trade and other receivables originated by the Company are stated at amortised
cost less impairment losses.
Cash and cash equivalents
Cash and cash equivalents are measured at fair value and due on demand.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost,
comprising original debt less principal payments and amortisations.
h) Provisions
Provisions are recognised when the Company has a present legal or constructive
obligation as a result of past events, for which it is probable that an outflow
of economic benefits will occur, and where a reliable estimate can be made of
the amount of the obligation.
Where the effect of discounting is material, provisions are discounted. The
discount rate used is a pre-tax rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the
liability.
i) Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet
date. All differences are taken to the income statement.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date
of the transaction.
2 Other costs
For the period For the period
from 1 April from 4 July
2008 to 30 2007 (date of
September 2008 incorporation)
to 31 March
(Unaudited) 2008
£ £
Share option charge - 1,201,674
Professional fees 898,530 437,996
Travel and transport 32,237 37,020
Office expenses 46,219 7,998
****** ******
976,986 1,684,688
â•â•â•â•â•â• â•â•â•â•â•â•
The Company has no employees other than the Directors.
3 Intangible Fixed Assets
Exploration and Total
evaluation
assets
Cost £ £
At 1 April 2008 - -
Additions 98,553 98,553
At 30 September 2008 ****** ******
98,553 98,553
â•â•â•â•â•â• â•â•â•â•â•â•
Amortisation
At 1 April 2008 - -
Amortisation for period - -
At 30 September 2008 ****** ******
- -
â•â•â•â•â•â• â•â•â•â•â•â•
Net book value
At 30 September 2008 98,553 98,553
â•â•â•â•â•â• â•â•â•â•â•â•
At 31 March 2008 - -
â•â•â•â•â•â• â•â•â•â•â•â•
4 Land options
The consideration paid for the Tsumeb Option comprised £1,421,000 in cash,
21,899,698 ordinary shares issued at zero par value to Weatherly at a cost of £
0.05 per share. An option was also granted to Weatherly to subscribe for up to
13,705,179 ordinary shares at £0.05 per share, exercisable at any time for five
years from the date of completion of the Tsumeb Option Agreement.
Tsumeb Option Agreement
On 28 January 2008, the Company entered into an amended and restated option
agreement with Ongopolo Mining Limited ("OML") under which the Company was
granted an option to acquire all right, title and interest
The Company was granted an option to acquire all right, title and interest in
and to the Tsumeb Slag Stockpiles (the "Tsumeb Option") in consideration of:
i. the payment by the Company to Ongopolo Mining Limited, or as it directs, of
£1,421,000 in cash;
ii. the issue and allotment of 21,899,698 Ordinary Shares credited as fully
paid to Weatherly; and
iii. the grant to Weatherly of an option over 13,705,179 Ordinary Shares.
The grant of the Tsumeb Option was subject to a number of conditions, which
were satisfied on 29 January 2008. The exercise term of the Tsumeb Option (the
"Tsumeb Option Period") shall expire on the 30 month anniversary of the date of
the satisfaction of the conditions, such period comprising a total of 24 months
for completion of an initial programme of work, plus six months for a decision
by the Company to proceed with commercial production from any portion of the
Tsumeb Slag Stockpiles and announcement of that decision to AIM.
Under the Tsumeb Option Agreement, OML provides the Company with a number of
warranties regarding the Tsumeb Slag Stockpiles. In particular, OML warrants to
the Company that:
- it has the requisite power and authority to enter into and perform the Tsumeb
Option Agreement;
- it is, and will remain during the Tsumeb Option Period, the legal and
beneficial owner of 100 per cent. of the Tsumeb Slag Stockpiles; and
- no further consent, approval or authorisation of any governmental agency or
other person is required by it for the entry into and performance of its
obligations under the Tsumeb Option Agreement.
Under the Tsumeb Option Agreement, OML was required to provide the Company with
a legal opinion from counsel duly qualified to practice in Namibia, confirming
OML's 100 per cent. ownership of the Tsumeb Slag Stockpiles (the "OML Legal
Opinion"). Under the Tsumeb Option Agreement, if OML was unable to supply the
OML Legal Opinion, OML and the Company would enter a new agreement, agreed in
good faith between the parties, establishing a contractual relationship between
OML and the Company that would ensure that the Company was placed in the same
economic position as was the intention under the Tsumeb Option Agreement - with
the Company bearing the cost incurred and receiving the profit or other benefit
arising out of the Tsumeb Slag Stockpiles. Under the Tsumeb Option Agreement,
OML and the Company agreed that, in the event of termination of the Tsumeb
Option Agreement, and in circumstances where the parties could not legally
enter or enforce the Toll Gate Agreement for whatever reason, the parties
agreed to take all such steps as necessary to return each other to the legal
and financial position each was in prior to the execution of the Tsumeb Option
Agreement. In particular, under the Tsumeb Option Agreement it is agreed that:
* Weatherly and/or OML shall return to EML all consideration paid under the
Tsumeb Option Agreement together with interest at 2 per cent. above the
base rate from time to time of Barclays Bank PLC per annum accruing
monthly;
* Weatherly and/or OML shall return, transfer or cancel as directed by EML
all Ordinary Shares issued and allotted to Weatherly or OML under the
Tsumeb Option Agreement;
* Weatherly and/or OML shall return, cancel and/or extinguish all and any
options over Ordinary Shares granted to Weatherly or OML pursuant to the
Tsumeb Option Agreement; and
* OML shall pay the reasonable costs of EML incurred in the preparation,
negotiation and completion of the obligations under the Tsumeb Option
Agreement.
5 Share capital
For the period For the period
from 1 April from 4 July 2007
2008 to 30 (date of
September 2008 incorporation)
(Unaudited) to 31 March 2008
Authorised
The Company is authorised to issue an
unlimited number of no par value shares of a
single class.
Issued
330,759,300 ordinary shares of £0.00 each
Share premium
1 share issued at incorporation 7,153 7,153
71,528,234 shares at £0.0001 per share
214,584,704 shares at £0.0500 per share 10,729,235 10,729,235
21,899,698 shares at £0.0500 per share 1,094,985 1,094,985
21,956,663 shares at £0.12 per share 2,729,157 -
Total ******** ********
14,560,530 11,831,373
â•â•â•â•â•â•â•â• â•â•â•â•â•â•â•â•
Share Based Payments
A number of share options are in issue as at 30 September 2008, but no
additional options were issued in the period from 1 April to 30 September 2008.
The value of the share options in issue has been calculated, and this expense
was recognised in the accounts to year end 31 March 2008.
6 Taxation
The Company is exempt from the provisions of the Income Tax Ordinance of the
British Virgin Islands.
7 Notes to the cash flow statement
a) Operating loss before working capital changes
For the period For the period
from 1 April from 4 July
2008 to 30 2007 (date of
September 2008 incorporation)
to 31 March
(Unaudited) 2008
£ £
Loss before taxation (490,885) (1,498,576)
Adjustment for:
Depreciation - -
────── ──────
(490,885) (1,498,576)
â•â•â•â•â•â• â•â•â•â•â•â•
b) Working capital changes
For the period For the period
from 1 April from 4 July
2008 to 30 2007 (date of
September 2008 incorporation)
(Unaudited) to 31 March
2008
£ £
Decrease/(increase) in trade and other 30,078 (36,355)
receivables
Increase in trade and other payables 3,160 74,030
────── ──────
33,238 (37,675)
â•â•â•â•â•â• â•â•â•â•â•â•
8 Financial instruments
Credit risk
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
Carrying amount
Notes 30 September 2008
(Unaudited)
£
Intangible Fixed Assets 3 98,553
Land options 4 4,818,455
Cash and cash equivalents 1(g) 11,229,118
â•â•â•â•â•â•â•â•
The Company invests available cash and cash equivalents with an Isle of Man
licensed bank, which has a strong history on the Island.
The Company has a nominal level of debtors, and as such the Company is able to
determine that credit risk is considered minimal in relation to debtors.
The risk is managed by the Company by means of cash flow planning to ensure
that future cash requirements are anticipated and, where financial instruments
have to be sold to meet these requirements, the process is carried out in a
controlled manner intended to minimise the liquidity risk involved.
Cash flow and funding risk
The Company is exposed to liquidity risk to the extent that it holds a land
option for which no developed market exists. Therefore the Company might not be
able to sell such a stake quickly at close to fair value.
Interest rate risk
The majority of the Company's current assets are cash held at bank. As a
result, the Company is subject to risk due to fluctuations in the prevailing
level of market interest rates.
Fair values of financial instruments
At 30 September 2008 the carrying amounts of cash resources, trade and other
receivables, and trade and other payables approximate their fair values due to
their short-term maturities.
- ends -
Contact details
Emerging Metals Blomfield Corporate Fox-Davies Capital GTH
Limited Finance Limited Limited
Communications
Mitch Alland Toby Howell Daniel Fox-Davies Toby Hall
Peter
Trevelyan-Clark
+44 (0) 1624 639396 +44 (0) 20 7489 +44 (0) 20 7936 +44 (0) 20 7153
4500 5200 8035
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP