Final Results

RNS Number : 5326O

Equatorial Mining & Exploration PLC

28 May 2015

 

EQUATORIAL MINING AND EXPLORATION PLC

AUDITED FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

Chairman's Statement

I have pleasure in reporting our final results for the year ended 31^st December 2014, a year of continued progress.

Nigeria has the largest economic output in Africa and is enjoying a period of wide scale infrastructure development. The country's need for natural resources is great and just as important is the need for electricity to power the industrial plants driving the aforementioned development.  The purpose of our company's existence is to capitalise on Nigeria's burgeoning demand for coal to fuel its power stations and factories. We believe we have an abundance of easily and cheaply accessible coal, ready for transportation, sitting within the heart of Nigeria.

Alyn Evans and I have now visited Nigeria and our exploration assets in Afikpo and Afuze, on 19 separate occasions over the last three years.  We have made it our business to secure close local ties with the range of contacts and individuals one is required to know in order to make progress in the country. This span includes officials in the Ministry of Mining and Steel Development at state and local level,  local Governmental officers, key academics and businessmen and the traditional Tribal leaders in the towns and villages close to our operating areas. I am delighted to report that EME is looked upon most favourably by all of these parties.

In our September interim results announcement we reported that of our nine exploration licences covering 600 sq. km, six had come up for renewal and indeed, since that time the other three had also expired.  I am delighted to report that all nine have been renewed for a further three years which maintains our position as, we believe, the largest coal exploration company in Nigeria.

Moreover, we revealed the presence of an abandoned coal mine within one of our smaller licences which contains significant quantities of high calorific thermal coal at extremely shallow depths.  Last month our exploration contractors moved their drills to this location and have started examining the extent of the coal seams around the mine.  The resulting information will enable us to design a mining plan for the start of contract mining.  Furthermore, we have started discussions with large cement manufacturers and were enthused at their interest in buying as much coal as we could supply.

We continue with our long held view that with the right financial support, our unique position could deliver huge financial returns and to this end, we remain in discussions with potential investors. Indeed, we have entered into an agreement with Lagos based GTI Capital Limited as the lead adviser to a significant fund raise targeted at the end of August.  Should funds arrive as expected, our immediate plan is to commence the production and sale of coal to the cement industry and to continue large scale JORC accredited exploration across our very large properties.

I look forward to announcing further developments as they arise.

N C P Nelson

Chairman

INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2014

			2014	2013
	Note		£'000	£'000
Administrative expenses			(351)	(198)
Share based payments			(680)	(4)
Exceptional costs			-	(305)
OPERATING LOSS FROM OPERATIONS			(1,031)	(507)
Investment income			-	2
Interest paid			(1)	-
Loss before taxation			(1,032)	(505)
Taxation			-	-
LOSS FROM CONTINUING OPERATIONS			(1,032)	(505)
Loss per share
- basic (pence)  - diluted (pence)	4 4		(0.047) (0.047)	(0.024) (0.024)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

			2014	2013
			£'000	£'000
Loss for the period			(1,032)	(505)
Total comprehensive income			(1,032)	(505)

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

	Share capital	Share premium	Share-based compensation reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2013	214	926	161	(692)	609
Loss for the year	-	-	-	(505)	(505)
Share-based compensation	-	-	-	-	-
Balance as at 31 December 2013	214	926	161	(1,197)	104
Total comprehensive loss for the year	-	-	-	(1,032)	(1,032)
Share based compensation	-	-	680	-	680
Exercise of share options	-	-	(643)	643	-
Issue of new shares	24	244	-	-	268
Shares to be paid	35	468	-	-	503
Balance as at 31 December 2014	273	1,638	198	(1,586)	523

Reserves

Reserve	Description and purpose
Share capital	Amount of the contributions made by shareholders in return for the issue of shares.
Share premium	Amount subscribed for share capital in excess of nominal value.
Share-based compensation reserve	Cumulative fair value of share options granted and recognised as an expense in the Income Statement.

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2014

			2014	2013
			£'000	£'000
ASSETS
CURRENT ASSETS
Trade and other receivables			569	53
Cash and cash equivalents			58	94
TOTAL ASSETS			627	147
EQUITY AND LIABILITIES
Share capital			273	214
Share premium account			1,638	926
Share-based compensation reserve			198	161
Retained earnings			(1,586)	(1,197)
TOTAL EQUITY			523	104
CURRENT LIABILITIES
Trade and other payables			104	43
TOTAL EQUITY AND LIABILITIES			627	147

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

			2014	2013
			£'000	£'000
Loss before income tax			(1,032)	(505)
Share-based compensation			680	-
Finance cost			1
Finance income			-	(2)
Operating cash flows before movement in working capital and provisions			(351)	(507)
Increase in trade and other receivables			(13)	(23)
Increase in trade and other payables			61	23
NET CASH USED IN OPERATING ACTIVITIES			(303)	(507)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received			-	2
Interest paid			(1)	-
NET CASH GENERATED FROM INVESTING ACTIVITIES			(1)	2
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issue of shares			268	-
NET CASH GENERATED FROM FINANCING ACTIVITIES			268	-
Net (decrease)/increase in cash and cash equivalents			(36)	(505)
Net cash and cash equivalents at beginning of period			94	599
NET CASH AND CASH EQUIVALENTS AT END OF PERIOD			58	94

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2014

1.   General information

      Equatorial Mining and Exploration plc ("the Company") is an investment vehicle, established to invest in or acquire businesses or assets in the mining sector.

      The Company is a public limited company which is quoted on ISDX and is incorporated and domiciled in the UK.  The address of its registered office is Finsgate, 5-7 Cranwood Street, London EC1V 9EE.

      The registered number of the company is 07496976.

      The audit report was signed on 28^th May 2015 and contained the following paragraph:

      "Emphasis of Matter - Going Concern

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 3 concerning the Company's ability to continue as a going concern. In order to continue operations for the next 12 months the Company is dependent upon raising additional finance. This condition indicates the existence of a material uncertainty which may cast significant doubt as to the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern."

2.   Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting standards ("IFRS") as adopted by the European Union, International Financial Reporting Interpretations Committee ("IFRIC") interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The functional and presentational currency for the financial statements is Sterling.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.

      Issued International Financial Reporting Standards (IFRS's) and interpretations (IFRICS) relevant to company operations

      There are no IFRS or IFRIC interpretations that are effective for the first time in this financial period that would be expected to have a material impact on the Company.

      Standards, interpretations and amendments to published standards that are not yet effective

      There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

3.   Accounting Policies

      Basis of accounting

     The financial statements have been prepared under the historical cost convention, as modified by the accounting for financial instruments at fair value.

      The Directors note that the company would require finance to continue as a going concern and to implement the targeted investment strategy over the next 12 months. The directors have secured a commitment to finance the company from an investment bank who have agreed to invest £250,000 as well as initiate a stock placing that could raise up to £2.7 million. The receipt of these funds is not guaranteed but the directors are confident that the funds will be forthcoming. The company currently has around £100,000 in the bank, of which roughly £40,000 is due to be paid to creditors. The directors have also agreed to suspend their fees until there are adequate funds to pay these. Given this, the directors believe that preparing the accounts on the going concern basis is appropriate.
 

      Share options

     When shares, share options and warrants are granted to employees and investors, a charge is made to the profit and loss account and a reserve created in capital and reserves to record the fair value of the awards at the date of grant in accordance with IFRS 2 (share based payments).  This charge is spread over the vesting period.  When shares and share options are granted to employees of subsidiary companies, the fair value of the awards is treated as a capital contribution and spread over the period of performance relating to the grant.  The corresponding entry is made in reserves.

      Segment reporting

     A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.  A geographic segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.

      In the opinion of the Directors, in year ended 31 December 2014, the Company does not have any separate business or geographical segments.

      Cash and cash equivalents

      Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

      Trade payables

     Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

      Share capital

     Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

      Income taxes

      Current income tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date.

      Deferred income tax is recognised using the balance sheet liability method, providing for temporary differences between the tax bases and the accounting bases of assets and liabilities.  Deferred income tax is calculated on an undiscounted basis at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

      Income taxes

      Deferred income tax liabilities are recognised for all temporary differences, except where the deferred income tax liability from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

      Deferred income tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.  Deferred income tax assets and liabilities are offset against each other only when the Company has a legally enforceable right to do so.

      Deferred income tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilised.

      Use of assumptions and estimates

      The Company makes judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.  The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events.  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 effects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

      The estimates and assumptions that had a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are discussed below.

      Share based payments

      The fair value of share-based payments recognised in the income statement is measured by use of the Black Scholes model, which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted; based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share price volatility percentage factor used in the calculation is based on management's best estimate of future share price behaviour based on past experience, future expectations and benchmarked against peer companies in the industry.

4.   Loss per share

The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue during the year. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The company had three classes of dilutive potential shares, being those share warrants and share options detailed within note 14.

The diluted loss per share is the same as the basic loss per share as the loss for the year has an antidilutive effect.

The calculation of basic and diluted earnings per share is based on the following figures:

	2014	2013
	£'000	£'000
Total loss for the period	(1,032)	(505)
	──────────	──────────
Weighted average number of shares - basic	2,172,110,503	2,141,666,667
Diluting effect of warrants in issue	-	-
	──────────	──────────
Weighted average number of shares - diluted	2,172,110,503	2,141,666,667
Basic loss per share	(0.047)p	(0.024)p
Diluted loss per share	(0.047)p	(0.024p

5.   Share Capital

	2014	2013
	£'000	£'000
Allotted, called up and fully paid: 2,726,406,667  (2013 - 2,141,666,667) Ordinary Shares of £0.0001 each	273	214
	═══════	═══════

      On 24 October 2014 share options and warrants were exercised, resulting in 350,740,000 new Ordinary Shares being issued. The options and warrants were exercised for an average exercise price of £0.0001; the share price at this date was £0.00425. These shares were then cancelled on the 20 April 2015, as described in note 14.

      On 12 November 2014, 150,000,000 warrants were exercised, resulting in 150,000,000 new Ordinary Shares being issued. The exercise price of these warrants was £0.0001; the share price at this date was £0.00425

      On 17 November 2014, 84,000,000 new Ordinary Shares were placed at a price of £0.003 per share.

 

END

 

 

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