Half-yearly Report
AIM: KEFI 28 September 2007
KEFI Minerals Plc
("KEFI Minerals" or "the Company")
Interim Results for the Period from 24 October 2006 to 30 June 2007
KEFI Minerals, the gold and copper exploration company focused on projects in
Turkey, is pleased to announce interim results for the period from 24 October
2006 to 30 June 2007.
HIGHLIGHTS
* KEFI Minerals now has six projects in Turkey (following the addition of
Derinin Tepe, Meyvali, Muratdag and Karalar early in 2007). It's tenement
in Bulgaria is in the process of relinquishment as it did not satisfy the
Company's criteria.
* The Company owns an extensive exploration database which contains
information regarding approximately 100 further prospective sites in
Turkey.
* Since admission to AIM in December 2006, the Company has established field
offices in Turkey and exploration has begun on all projects.
* Diamond drilling commenced in late June targeting gold in epithermal quartz
veins at the Derinin Tepe Prospect. Subsequent to 30 June the Company
announced a gold discovery at the Yanikli Prospect in the 100% owned Artvin
Project area. Channel sampling has returned 12m at 5.0g/t gold within a
broader zone containing 37m at 1.8g/t gold. Mapping has revealed this zone
at Yanikli has a strike of at least 1km and a width of 40m to 100m.
KEFI Minerals' Managing Director, Jeff Rayner, commented: "The primary
objective for 2007 is to rapidly assess the Company's current projects and to
identify the most prospective areas in Turkey and Bulgaria for further
evaluation.
"We will continue to use our proprietary database to monitor opportunities so
that KEFI Minerals can acquire further exploration opportunities as soon as
they become available. We look forward to further growing our portfolio and
updating shareholders in due course."
Enquiries
KEFI Minerals WH Ireland Bishopsgate Communications
Jeffrey Rayner Laurie Beevers Maxine Barnes
Katy Mitchell Nick Rome
+905 36963 0111 +44 161 832 2174 +44 20 7562 3350
www.kefi-minerals.com
CHAIRMAN'S STATEMENT
KEFI Minerals made very good progress over the first half of 2007. Our
exploration portfolio has been significantly expanded with the addition of four
new project areas in Turkey. Exploration has commenced at these projects and
the Company's first drilling program commenced in June 2007 at Derinin Tepe.
We continue to actively evaluate further acquisitions and potential joint
ventures, primarily gold and copper exploration assets in Turkey and Bulgaria
in 2007.
Finance
KEFI Minerals Plc was formed on 24 October 2006 and commenced trading on AIM
(Code "KEFI") on 18 December 2006 following the successful placing of
46,666,667 shares at 3p to raise £1.4 million.
In February 2007, the Company raised a further £350,000 by placing a total of
11,666,667 ordinary shares at 3p.
Subsequent to 30 June the Company placed 6,000,000 shares at 3.2p to raise £
192,000. The purpose of this small placing was to introduce to the Company the
firm of Loeb Aron & Company Ltd, a London based brokerage firm highly active in
the resources sector.
The loss for the period of £0.9 million reflects the Company's conservative
accounting policy. All expenditure is written off until the Board decides to
commence development of a project, from which point development costs would be
capitalized.
Exploration Strategy
KEFI Minerals' exploration assets comprise exploration licences in Turkey and
Bulgaria and the ownership of a database containing information about further
prospective sites in Turkey. The growth strategy will focus on continuing to
develop portfolios in those areas as the Company utilizes its exploration
database and strong domestic relationships.
In Turkey, KEFI Minerals now has six projects (following the addition of
Derinin Tepe, Muratdag, Meyvali and Karalar early in 2007), while it is in the
process of relinquishing one project in Bulgaria.
Moving forward we hope to continue to take advantage of recent changes to the
Turkish Mining Law and the progressive development attitude of the Turkish
Government, which have generated a current positive environment for exploration
and mining activities.
Recent progress on structural reforms in Bulgaria has led to an improved
business environment since 2000 and an increase in foreign investment. It
joined the European Union in January 2007.
Our exploration strategy for operating in Turkey and Bulgaria is based on the
following concepts:
* selecting areas within prospective stratigraphic and structural settings
with a high potential for base metal or gold mineralisation;
* acquisition of exploration licences are inexpensive to acquire and explore;
* exploring projects as a package rather than individual isolated prospects;
* rapidly identifying, prioritising and assessing targets;
* rapidly progressing targets for further work or relinquish the licences;
* creating new contacts and further developing knowledge using an established
local team; and
* utilising technical, commercial and political support from EMED Mining as
required.
KEFI Minerals owns an extensive exploration database which contains information
regarding approximately 100 further prospective sites in Turkey. This database
provides a competitive advantage in identifying prospective areas for project
generation in Turkey.
Exploration Overview
KEFI Minerals now has six exploration projects in Turkey, having already added
four new areas since admission to AIM in December 2006:
* At Artvin in northeastern Turkey, areas of extensive hydrothermal
alteration have been recognised in the project area, and there is evidence
of historical workings indicating potential for economic mineralisation.
Stream-sediment sampling has been completed over the entire tenement areas.
This is the first time systematic sampling for gold and associated metals
has been conducted in the area. and on 12 September the Company announced a
gold discovery at the Yanikli Prospect. Channel sampling has returned 12m
at 5.0g/t gold within a broader zone containing 37m at 1.8g/t gold. Mapping
has revealed this zone at Yanikli has a strike of at least 1km and a width
of 40m to 100m.
* At Gumushane in eastern Turkey, areas of extensive hydrothermal alteration
have been recognised in the project area, as well as coincident areas of
interest identified through interpretation of Aster data.
* At Derinin Tepe in Western Anatolia, epithermal quartz veins have been
identified with gold and silver mineralisation. This licence covers an area
of 12km2 and hosts a series of parallel quartz veins that trend northwest
and extend for at least one kilometre. Extensive ancient workings of the
veins has been revealed by trenching. Over 500m of continuous stoping in
three veins has been exposed by the trenches. A 600m diamond drilling
programme commenced in June.
* At Karalar in Central Anatolia, highly anomalous gold in stream sediments
has been identified in an area of historic base metal mines.
* Muratdag, in Western Anatolia, is prospective for Carlin-style epithermal
gold mineralisation. Stream sediment sampling and geological mapping is
underway.
* Meyvali, in Western Anatolia, is prospective for epithermal and skarn
related mineralisation. Soil sampling and geological mapping is underway.
KEFI Minerals is targeting large epithermal gold or porphyry gold-copper
systems analogous to several +1 million ounce deposits recently discovered and
developed in the Western Anatolia Region of Turkey.
Outlook for 2007
The Company has established itself quickly. The Company's initial assets
comprised the interests of EMED Mining Public Limited's ("EMED Mining") in
Turkey and Bulgaria. EMED Mining retains a 34% interest in KEFI Minerals and
has agreed to provide technical and administrative systems and personnel on a
cost-recovery basis.
Since admission to AIM, the Company has opened a field office in Turkey,
started field work and added four new exploration licences to its portfolio.
The primary objective for 2007 is to rapidly assess the Company's current
projects and to identify the most prospective areas in Turkey and Bulgaria for
further evaluation. We will continue to monitor the exploration licence status
of geologically prospective areas on an ongoing basis so that KEFI Minerals can
acquire further exploration opportunities as soon as they become available. We
look forward to further growing our portfolio and updating shareholders in due
course.
Harry Anagnostaras-Adams
Chairman
References in this report to exploration results and potential have been
approved for release by Mr Jeff Rayner, B.Sc. (Honours). Mr Rayner is a
geologist and has more than 20 years' relevant experience in the field of
activity concerned. He is a member of The Australian Institute of Mining and
Metallurgy (AUSIMM) and has consented to the inclusion of the material in the
form and context in which it appears.
BOARD OF DIRECTORS AND OTHER OFFICERS
Board of Directors: Aristidis Eleftherios Anagnostaras-Adams Non
executive - Chairman
Jeffrey Guy Rayner Managing Director
Ian Rutherford Plimer Non executive Director
John Edward Leach Finance Director
Company Secretary: Cargil Management Services Limited
22 Melton Street
London
NW1 2WB
Registered Office: 27/28 Eastcastle Street
London
W1W 8DH
Auditors: Moore Stephens LLP
St. Paul's House
Warwick Lane
EC4M 7BP
London
KEFI MINERALS PLC
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
Note 24.10.06- 24.10.06-
30.6.07 31.12.06
GBP'000 GBP'000
Exploration costs (620) (122)
Other income 21 -
Administration expenses (169) -
Share-based benefits (122) (79)
_____ _____
Operating loss (890) (201)
Finance costs (1) -
_____ _____
Loss before tax 4 (891) (201)
Taxation - -
_____ _____
Loss after tax (891) (201)
_____ _____
Earnings per Share Information
Basic loss per share (pence) (0.88) (0.23)
_____ _____
Diluted loss per share (pence) (0.82) (0.21)
_____ _____
KEFI MINERALS PLC
CONDENSED BALANCE SHEET
30 JUNE 2007
Notes The The
Group Company
30.6.07 30.6.07
GBP'000 GBP'000
ASSETS
Non current assets
Property, plant and equipment 74 27
Goodwill 14 366 -
Investment in subsidiaries 8 - 2
_____ _____
440 29
_____ _____
Current assets
Trade and other receivables 9 40 748
Bank and cash balances 12 841 784
_____ _____
881 1,532
_____ _____
Total assets 1,321 1,561
_____ _____
EQUITY AND LIABILITIES
Capital and reserves
Share capital 10 1,028 1,028
Share premium 867 867
Share options reserve 122 122
Other reserves (874) (588)
_____ _____
1,143 1,429
_____ _____
Current liabilities
Trade and other payables 11 178 132
_____ _____
Total liabilities 178 132
_____ _____
Total equity and liabilities 1,321 1,561
_____ _____
KEFI MINERALS PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
Share Share Accumulated Share Exchange Total
premium Options Difference
capital losses Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Issue of share 1,028 1,263 - - - 2,291
capital
Share issue costs - (396) - - - (396)
Loss for the period - - (891) - - (891)
Exchange difference - - - - 17 17
on translation of
subsidiaries
Recognition of - - - 122 - 122
share-based payments
_____ _____ _____ _____ _____ _____
Balance at 30 June 1,028 867 (891) 122 17 1,143
2006
_____ _____ _____ _____ _____ _____
KEFI MINERALS PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
Notes 24.10.06-
30.6.07
GBP'000
Cash flows from operating activities
(Loss) for the period (891)
Share-based benefits 125
Exchange difference on translation of subsidiaries (14)
_____
Operating loss before working capital changes (780)
Changes in working capital:
Trade and other receivables (40)
Trade and other payables 178
_____
Net cash from operations 138
_____
Cash flows form investing activities:
Purchase of property, plant and equipment (82)
Acquisition of subsidiaries 14 (330)
_____
Net cash used in investing activities (412)
_____
Cash flows from financing activities:
Proceeds from issue of share capital 2,291
Share issue and listing costs (396)
_____
Net cash from financing activities 1,895
_____
Net increase in cash 841
Cash at beginning of period -
_____
Cash at end of period 12 841
_____
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
1. General information
Country of incorporation
The Company was incorporated in United Kingdom as a public limited company on
24 October 2006. Its registered office is at 27/28 Eastcastle Street, London
W1W 8DH.
Principal activities
The principal activities of the Group for the period are:
* To explore for mineral deposits of precious and base metals and other
minerals that appear capable of commercial exploitation, including
topographical, geological, geochemical and geophysical studies and
exploratory drilling.
* To evaluate mineral deposits determining the technical feasibility and
commercial viability of development, including the determination of the
volume and grade of the deposit, examination of extraction methods,
infrastructure requirements and market and finance studies.
* To develop, operate mineral deposits and market the metals produced.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these condensed
interim consolidated financial statements are set out below. These policies
have been applied consistently throughout the period presented in these
financial statements unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRs) as adopted by the EU and
International Financial Reporting Standards (IFRs) as issued by the IASB. The
financial statements comply with both these reporting frameworks because at the
time of their preparation all applicable IFRs issued by the IASB have been
adopted by the EU through the endorsement procedure established by the
European. The financial statements have been prepared under the historical cost
convention.
The preparation of financial statements in conformity with IFRs as adopted by
the EU requires the use of certain critical accounting estimates and requires
management to exercise its judgement in the process of applying the Company's
accounting policies. It also requires the use of assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although these
estimates are based on management's best knowledge of current events and
actions, actual results ultimately may differ from those estimates.
This interim financial information for the period from incorporation to 30 June
2007 has not been audited.
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 30 JUNE 2007
2. Summary of significant accounting policies-cont'd
Adoption of new and revised IFRSs
As from 24 October 2006, the Group adopted all the IFRSs and International
Accounting Standards (IAS), which are relevant to its operations.
The adoption of these standards did not have a material effect on the
consolidated financial statements.
At the date of authorisation of these financial statements some standards were
in issue but not yet effective. The Board of Directors expects that the
adoption of these standards in future periods will not have a material effect
on the consolidated financial statements of the Group.
Consolidation
The consolidated financial statements incorporate the assets and liabilities of
all entities controlled by the Company as at 30 June 2007 and the results of
all the controlled entities for the period then ended. The Company and its
controlled entities together are referred to in this financial report as the
Group.
Control is achieved where the Company has power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
The financial statements of all the Group companies are prepared using uniform
accounting policies.
Transactions eliminated on consolidation
Intercompany transactions, balances and unrealised gains on transactions
between consolidated entities are eliminated on consolidation. Unrealised
losses are also eliminated unless the transaction provides evidence of
impairment of the asset transferred.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of the acquisition is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree, plus
any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair values at
the acquisition date, except for non-current assets (or disposal groups) that
are classified as held for sale in accordance with IFRS 5 Non-Current Assets
held for sale and discontinued operations, which are recognised and measured at
fair value less costs to sell.
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
2. Summary of significant accounting policies-cont'd
Business combinations (cont'd)
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination over
the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised. If, after reassessment, the
Group's interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities exceeds the cost of the business
combination, the excess is recognised immediately in profit or loss.
The interest of minority shareholders in the acquiree is initially measured at
the minority's proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of the Group's share of the net identifiable assets of the acquired
undertaking at the date of acquisition. Goodwill on acquisition of subsidiaries
is included in "intangible assets". Goodwill on acquisitions of associates is
included in "investments in associates".
Goodwill is tested annually for impairment and carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an undertaking include
the carrying amount of goodwill relating to the undertaking sold. Goodwill is
allocated to cash generating units for the purpose of impairment testing.
Any excess of the interest in the net fair value of acquiree's identifiable
assets, liabilities and contingent liabilities over cost is recognised
immediately in the profit and loss.
Revenue recognition
Revenue consists of the amounts receivable from exploration tenements,
technical data, precious and base metals sold.
The Group had no sales/revenue during the period under review.
Exploration costs
The Group adopted the provisions of IFRS6 "Exploration for and Evaluation of
Mineral Resources". The Group's stage of operations as at the period end and as
at the date of approval of these financial statements have not yet met the
criteria for capitalisation of exploration costs.
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
2. Summary of significant accounting policies-cont'd
Foreign currency translation
(1) Measurement currency
The financial statements are prepared in British Pounds (measurement currency)
which is the currency that best reflects the economic substance of the
underlying events and circumstances relevant to the Company.
(2) Transactions and balances
Foreign currency transactions are translated into the measurement currency
using the exchange rates prevailing at the date of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary rates of
monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
Tax
Income tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax liabilities and assets for the current and prior periods are
measured at the amount expected to be paid to or recovered from the taxation
authorities, using the tax rates and laws that have been enacted, or
subsequently enacted, by the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax is determined using
tax rates and laws that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary differences
can be utilised.
Share capital
Ordinary shares are classified as equity.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise
of cash in hand and balances with banks.
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
3. Financial risk management
Financial risk factors
The Company's activities expose it to currency risk arising from the financial
instruments it holds. The risk management policies employed by the Company to
manage the risk are discussed below:
Currency risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates. Currency risk arises when
future commercial transactions and recognised assets and liabilities are
denominated in a currency that is not the Company's measurement currency. The
Company is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the Euro, Bulgarian Lev and Turkish Lira.
The Group's management monitors the exchange rate fluctuations on a continuous
basis and acts accordingly.
Fair values
The fair values of the Groups financial assets and liabilities approximate
their carrying amounts at the balance sheet date.
4. Operating profit/(loss)
The following items have been included in arriving at operating (loss):
24.10.06-30.6.07 24.10.06-31.12.06
GBP'000 GBP'000
Recognition of share-based benefits 122 79
Professional services 20 3
_____ _____
5. Tax
Due to tax losses sustained in the period, no tax liability arises on the
Group. Under current legislation, tax losses may be carried forward and be set
off against taxable income of the following years.
The Company is anticipated that it will be resident in Cyprus for tax purposes.
Cyprus
The corporation tax rate is 10%. Under certain conditions interest may be
subject to defence contribution at the rate of 10%. In such cases 50% of the
same interest will be exempt from corporation tax, thus having an effective tax
rate burden of approximately 15%. In certain cases, dividends received from
abroad may be subject to defence contribution at the rate of 15%.
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 30 JUNE 2007
5. Tax - cont'd
Bulgaria
Mediterranean Minerals (Bulgaria) EOOD, the 100% subsidiary of the Company, is
resident in Bulgaria for tax purposes.
The corporation tax rate is 15%. Due to tax losses sustained in the period, no
tax liability arises on the Mediterranean Minerals (Bulgaria) EOOD. Under
current legislation, tax losses may be carried forward and be set off against
taxable income of the following five years.
Turkey
Dogu Akdeniz Mineralleri Ltd, the 100% subsidiary of Mediterranean Minerals
(Bulgaria) EOOD, and ultimately 100% subsidiary of the Company, is resident in
Turkey for tax purposes.
The corporation tax rate is 20%.
Due to tax losses sustained in the period, no tax liability arises on the Dogu
Akdeniz Mineralleri Ltd. Under current legislation, tax losses may be carried
forward and be set off against taxable income of the following five years.
6. Deferred tax
No provision for deferred taxation has been made as there are no differences
between the amounts attributed to assets and liabilities for tax purposes and
their corresponding carrying amounts in the balance sheet.
7. Loss per share
The calculation of the basic and diluted earnings per share attributable to the
ordinary holders of the parent based on the following data:
24.10.06 - 24.10.06 -
31.12.06
30.6.07
(Unaudited)
(Unaudited)
GBP 000's
GBP 000's
Net loss attributable to equity (891) (201)
shareholders
_____ _____
Number of ordinary share for the purposes 100,882 88,667
of basic earnings per share
Effect of dilutive potential ordinary 8,325 5,333
shares:
Share options
_____ _____
109,207 94,000
_____ _____
Basic loss per share (pence) (0.88) (0.23)
_____ _____
Diluted loss per share (pence) (0.82) (0.21)
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 30 JUNE 2007
8. Investment in subsidiaries
On 8 November 2006, the Company entered into an agreement to acquire from EMED
Mining Public Limited (formerly Eastern Mediterranean Resources Public Limited)
the whole of the issued share capital of Mediterranean Minerals (Bulgaria)
EOOD, a company incorporated in Bulgaria, in consideration for the issue of
29.999.998 ordinary shares in the Company.
Mediterranean Minerals (Bulgaria) EOOD owns 100% of the share capital of Dogu
Akdeniz Mineralleri Limited, a private limited liability company incorporated
in Turkey, engaging in activities for exploration and developing of natural
resources.
30.6.07
The Company GBP'000
Cost of investment 2
_____
Company name Date of Country of % of
acquisition incorporation shareholding
Mediterranean Minerals 8/11/06 Bulgaria 100%-Direct
(Bulgaria) EOOD
Dogu Akdeniz Mineralleri Ltd 8/11/06 Turkey 100%-Indirect
Significant aggregate amounts in respect of subsidiaries:
GBP'000
Net liabilities 1 January 2006 (156)
Net loss for the year (299)
_____
Net liabilities at 31 December 2006 (455)
Loss for the period to 30 June 2007 (204)
_____
Net liabilities at 30 June 2007 (659)
_____
Pre-acquisition reserves, mainly, exploration costs incurred by the
subsidiaries prior to acquisition amounted to GBP364,000.
The movement in the net assets of subsidiaries is based on their audited
financial statements which have been prepared on the basis of International
Financial Reporting Standards (IFRSs) as adopted by the EU and the IFRSs as
issued by IASB.
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
9. Trade and other receivables
30.6.07
The Group GBP'000
Amounts receivable from stockbroker in relation to issue of -
share capital
Deposits and other prepayments 27
Other amounts receivable 13
_____
40
_____
The Company
Amounts receivable from stockbroker in relation to issue of -
share capital
Deposits and other prepayments 10
Other amounts receivable -
Receivables from subsidiary undertakings 738
_____
748
_____
10. Share capital
No. of Share Share Total
shares capital premium
Authorised '000 '000 '000 '000
Ordinary shares of £0.01 each 200,000 2,000 - 2,000
_____ _____ _____ _____
Issued and fully paid
Seed round 42,000 420 36 456
IPO round 46,667 467 933 1,400
Share issue costs - - (383) (383)
Shares issued on 19 February 11,667 117 233 350
2007 at GBP0.03
Share issue costs on share issue (13)
19 Feb. 2007
Share issued on 12 March 2007 250 2 5 7
Shares issued on 4 June 2007 1,000 10 25 35
Shares issued on 4 June 2007 1,250 12 31 43
under provisions of database
purchase agreement (note 15)
_____ _____ _____ _____
102,834 1,028 867 1,895
_____ _____ _____ _____
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
11. Trade and other payables
30.6.07
The Group GBP'000
Trade payables 93
Accruals 8
Amounts due to EMED Mining Public Ltd 77
_____
178
_____
The Company
Trade payables 55
Amounts due to EMED Mining Public Ltd 77
_____
132
_____
12. Cash and cash equivalents
Cash included in the cash flow statement comprise the following balance sheet
amounts:
30.6.07
The Group GBP'000
Bank balances and cash 841
The Company
Bank balances and cash 784
13. Share option plan
Details of share options outstanding as at 31 December 2006:
Grant date Expiry date Exercise price Number of shares
GBP '000
18/12/2006 18/12/2012 0.030 16,000
12/03/2007 11/03/2013 0.035 250
18/04/2007 17/04/2013 0.035 1,200
04/06/2007 03/06/2013 0.035 500
Number of
shares
'000
Outstanding options at 24 October 2006 -
-granted 17,950
-cancelled -
-exercised -
_____
Outstanding options at 30 June 2007 17,950
_____
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
13. Share option plan-cont'd
The Company has a share option scheme for employees and other parties of the
Group. The options expire six years after grant date and are exercisable at the
exercise price in whole or in part no more than one third form at grant date,
two thirds after one year from the grant date and the balance after two years
from the grant date. The option agreement contain provisions adjusting the
exercise price in certain circumstances including the allotment of fully paid
ordinary shares by way of a capitalisation of the Company's reserves, a sub
division or consolidation of the ordinary shares, a reduction of share capital
and offers or invitations (whether by way of rights issue or otherwise) to the
holders of ordinary shares.
The estimated fair values of the options were calculated using the Black
Scholes option pricing model. The inputs into the model and the results are as
follows:
4 June 18 12 March 18 Dec.
2007 April 2007 2006
2007
Closing share price at issue 3.62p 3.88p 3.30p 3.88p
date
Weighted average exercise 3.50p 3.50p 3.50p 3.00p
price
Average expected volatility 68.06% 68.06% 68.06% 50%
Expected life 6 yrs 6 yrs 6 yrs 6 yrs
Risk free rate 6.08% 5.95% 5.73% 5.97%
Expected dividend yield Nil Nil Nil Nil
Discount factor 30% 30% 30% 30%
Estimated fair value 1.71p 1.85p 1.50p 1.427p
Expected volatility was estimated based on the likely range of volatility of
the share price.
14. Acquisition of subsidiaries
On 8 November 2006, the Company entered into an agreement to acquire from EMED
Mining Public Limited (formerly Easter Mediterranean Resources Public Ltd) the
whole of the issued share capital of Mediterranean Minerals (Bulgaria) EOOD, a
company incorporated in Bulgaria, in consideration for the issue of 29.999.998
ordinary shares in the Company. This issue of shares was also partly in
satisfaction of indebtedness due to EMED Mining Public Ltd.
The consolidated net assets of Bulgaria and Turkey at the date of acquisition
and at 31 December 2005 were as follows:
8.11.06 31.12.05
GBP'000 GBP'000
Cost of investment 2
Less: Fair values of net liabilities 364
acquired
_____
Goodwill 366
_____
The net liabilities acquired were as
follows:
Cash at bank and in hand 6 12
Payable to EMED Mining Public Ltd (334) (167)
Payable to Kefi Minerals Plc (36) -
_____ _____
(364) 155
_____ _____
Consideration - shares issued at premium 336
Cash and cash equivalents acquired (6)
_____
Net consideration in shares on 330
acquisition
_____
KEFI MINERALS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM 24 OCTOBER 2006 TO 30 JUNE 2007
15. Contingent liabilities
During the six months ended 30 June 2006, EMED Mining Public Ltd acquired a
proprietary geological database that covers extensive parts of Turkey and
Greece. The cost of obtaining the database was shared equally by the Company
and Eastern Mediterranean Resources A.E. (Greece) a wholly owned subsidiary of
EMED.
Under the terms of the original agreement, an additional contingent
consideration of approximately €320,000 (£216,000) was to be settled by the
issuance of 1,728,984 ordinary shares in EMED at 12.5p each if EMED secured at
least four tenements in Turkey or Greece identified from the database.
Under the revised agreement of 22 November 2006, EMED transferred to Dogu
Akdeniz Minerally Ltd that part of the geological database that relates to
areas in Turkey. Consequently, EMED has been discharged from the original
contingent consideration in respect of Turkey.
Under the agreement, Dogu Akdeniz Mineralleri Ltd has undertaken to make a
payment of approximately €63,000 (AUD105,000) for each tenement it is
subsequently awarded in Turkey and which was identified from the database. The
maximum number of such payments required under the agreement is four, resulting
in a contingent liability of up to €252,000. These payments are to be settled
by issuing shares in KEFI Minerals plc. The first tranch of shares was issued
under this agreement in June 2007 for €43,750, the equivalent of AUD105,000
(note 10).
16. Capital commitments
The Group has no capital or other commitments as at 30 June 2007.
17. Relationship deed
A Relationship Deed between EMED and the Company dated 7 November 2006, by
which EMED agrees not to operate in Bulgaria and Turkey, and the Company agrees
not to operate in Albania, Armenia, Azerbaijan, Cyprus, Greece, Hungary, Iran,
Oman, Romania, Saudi Arabia, Serbia or Slovakia the "EMED Area". The
Relationship Deed provides that EMED has the right to appoint one non-executive
director of the Company. It also provides EMED with a right of first refusal in
respect of funding any proposed mining or exploration project of the Company.
The Relationship Deed provides that the Company shall refer any opportunity to
conduct mining or exploration activity in the EMED Area to EMED, and EMED shall
refer any such opportunity in Bulgaria or Turkey to the Company.
18. Post balance sheet events
The Group's tenement in Bulgaria is in the process of relinquishment as it did
not satisfy the Company's criteria.
On 12 September the Company announced a gold discovery at the Yanikli Prospect.
Channel sampling has returned 12m at 5.0g/t gold within a broader zone
containing 37m at 1.8g/t gold. Mapping has revealed this zone at Yanikli has a
strike of at least 1km and a width of 40m to 100m.
Subsequent to 30 June the Company placed 6,000,000 shares at 3.2p to raise £
192,000.
Independent Review Report to KEFI Minerals Plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 5 to 19 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the AIM
rules which require that the accounting policies and presentation applied to
the interim figures should be consistent with those applied in preparing the
preceding annual accounts except where any changes, and the reasons for them,
are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4 issued by the Auditing Practices Board. A review consists principally of
making enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with International Auditing Standards (UK and Ireland) and therefore
provides a lower level of assurance than an audit. Accordingly we do not
express an audit opinion on the financial information. 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.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the period from 24
October 2006 to 30 June 2007.
St Paul's House
Warwick Lane Moore Stephens LLP
LONDON EC4M 7BP Registered Auditors
Chartered Accountants
28 September 2007
Wednesday, 22nd January 2025
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