AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2011

RNS Number : 5684M

Emerging Metals Limited

18 August 2011

 



For Immediate Release: 0700hrs Thursday 18 August 2011

Emerging Metals Limited

("EML" or the "Company")

AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2011

Emerging Metals Limited (AIM: EML) today announces its audited final results for the year ended 31 March 2011.

Operational and Financial Highlights during the Year:

·     Holding in Kalahari Minerals Plc reduced to £nil (31 March 2010: £16,497,647) following sale of remaining 8,917,647 shares at £1.85 on 16 April 2010;

·     Special Dividend of 7.13 pence per share paid on 18 May 2010 (total cost of £25,352,097);

·     Holding in Extract Resources Limited reduced to £nil (31 March 2010: £1,740,508) following sale of 368,721 shares at AUD7.00 on 19 July 2010;

·     Equity shareholder funds at year-end of £9,963,996 (31 March 2010: £35,867,184);

·     Current assets valuation: £10,012,847 at year-end (31 March 2010: £35,920,430);

·     Healthy cash reserves of £10,000,643 at year-end (31 March 2010: £17,676,956);

·     Below budget operating expenses for period of £669,897 of which £329,953 related to a commission payment on the sale of Kalahari shares (Operating expenses 31 March 2010:£396,888);

·     Net loss for the year £1,006,037 (2010: profit £8,408,770);

·     Net asset value per share at 31 March 2011 is 2.80 pence (31 March 2010: 10.41 pence).

 Post Period Highlights

·      On 3^rd June 2011, the Company announced that it had subscribed for 26,228,570 new ordinary shares in the capital of Ferrum Resources Limited ("Ferrum") representing 37.23% of Ferrum's enlarged share capital;

·      Option agreement entered into by the Company with the holders of all remaining issued Ferrum ordinary shares giving the Company the right, but not the obligation, to acquire all of the issued Ferrum ordinary shares through the issue of EML shares;

·      In July 2011, Ferrum secured a 63.53% interest in CMC Guernsey Limited which, through its 95% owned subsidiary, holds six iron ore licenses covering approximately 6,000 square kilometres in Cameroon.

Stephen Dattels, Co-chairman of EML, commented:

"Ferrum is a private British Virgin Islands company which aims to become a major international iron ore mining and exploration group. Together with its recently acquired interests in Cameroon through CMC Guernsey, Ferrum holds a reconnaissance permit in Guinea and has a 75% interest in five exploration licenses in Sierra Leone. In addition, Ferrum has applied for two iron ore exploration permits for the Topa Iron Ore Project in the CAR in which it holds a 75 per cent. interest, with the other 25 per cent. interest held by AXMIN Inc. We are therefore delighted with the progress being made by the Company through our interests in Ferrum."

Copies of the Directors' Report and financial statements for the year ended 31 March 2011 together with notice of the Company's annual general meeting to be held at The Claremont Hotel, 18-22 Loch Promenade, Douglas, Isle of Man, IM1 2LX at 10:00 am on 29^h September 2011 will be posted to shareholders no later than 30^th August 2011 and be available from the Company's website at www.emergingmetals.com.

-Ends-

For further information

Emerging Metals Limited	Religare Capital Markets (UK) Limited	Evolution Securities          Limited	GTH Communications
Denham Eke	Peter Trevelyan-Clark Emily Staples	Romil Patel Tim Redfern	Toby Hall Christian Pickel
[phone]	[phone]	[phone]	[phone]

Chairmen's statement

Dear Shareholders,

Investing Policy

Since last writing to you in the Company's annual accounts published on 22^nd September 2010, your Board has continued to seek investment opportunities as approved by shareholders at the Meeting of Shareholders of the Company on 8th April 2011. We believe that this expanded investing policy reflects the preferred strategy of the Company providing greater flexibility to utilise our existing cash reserves to take advantage of investment opportunities across all types of natural resources projects. This investing policy permits the review and consideration of potential investments in not just metals and metals projects, but also investment in all types of natural resources projects, including but not limited to all metals, minerals and hydrocarbon projects, or physical resource assets on a worldwide basis.

Your Board continues to believe that current market conditions will provide good opportunities for a positive return and its collective experience in the areas of mining, acquisitions, accounting and corporate and financial management, together with the opinion of expert consultants in the evaluation and exploitation of opportunities, will enable us to achieve extremely profitable outcomes. Furthermore, we continue to take an active role in the management and development of future projects.

Investments

On the 26th April 2010, following shareholder approval, our remaining shareholding of Kalahari Minerals plc shares was sold to Nippon Uranium Resources (Australia) Proprietary Limited, a wholly owned subsidiary of Itochu Corporation of Japan. The number of shares sold was 8,917,647 at a price 185 pence per share, and we received gross proceeds of £16,497,647 resulting in a realised investment gain of £11,612,665. Thus the sales of the entire holding of Kalahari Minerals shares produced gross realised proceeds of £32,995,294.

In July 2010, we also disposed of our entire holding in Extract Resources Limited for approximately £1.8 million generating additional realised investment gains of £1,499,735.

Dividend payment

The Board declared a Special Dividend of 7.13 pence per share on 16th April 2010 which was paid on 18th May 2010, being an aggregate amount of £25,352,097.

March 2011 Year End Results

As expected, our year end results to 31 March 2011 show a loss for the year of £1,006,037 (31 March 2010: profit £8,408,770 - including a realised investment gain of £14,427,398).

By implementing operating efficiencies during the year, on a like-for-like basis, our operating expenses were below budget at £669,897 of which £329,953 related to a commission payment on the sale of Kalahari shares (31 March 2010: operating expenses £396,888).

Following the payment of a dividend of £25,352,097 on 18th May 2010, our equity shareholder funds had decreased to £9,963,996 (31st March 2010: £35,867,184) and our cash reserves had decreased to £10,000,643 (31st March 2010: £17,676,956).

Investments stand at £nil (31st March 2010: £18,238,155).

Acquisition and Option over Uranium Concentrates

On the 12th November 2010, we announced that we had contracted for the physical delivery of 25,000 lbs triuranium octocide ("U3O8") and had entered into an option agreement for the physical delivery of a further 200,000 lbs U3O8. The physical delivery contract was priced at US$58.00 for each pound of U3O8 delivered. Delivery to a facility in Canada was completed on 17th January 2011 with cash payment of approximately £898,723. The option contract was in respect of 200,000 lbs U3O8 for physical delivery and expired on 31st January 2011. We sold both the physical delivery and the option on the 30th November 2010 at a net price of US$3.00 for settlement on the 15th December 2010, generating a net US$100,000 profit on the sale.

Subsequent Events - Ferrum Resources Limited Investment

On 10 May 2011, we announced the execution of a put and call option agreement with Ferrum Resources Limited, an iron ore exploration and development company with interests in Sierra Leone, Guinea and Central African Republic. Under the terms of the agreement, Ferrum Resources granted the Company a call option, for a consideration of US$1 and the Company granted Ferrum Resources a put option, for a consideration of US$1.

On 3 June 2011, we announced that we had subscribed for 26,228,570 new ordinary shares in the capital of Ferrum Resources at a price of US$0.305 per share for an aggregate consideration of US$7,999,714 (US$7,247,214 net of repayment of an existing US$752,500 loan) pursuant to the agreement. The new Ferrum Resources shares represent 37.23% of that company's enlarged issued share capital. In accordance with the terms of the option agreement, Jim Mellon and Denham Eke were appointed to the board of Ferrum Resources with Mr Mellon assuming the interim role of Chairman. We also advanced US$7,000,000 as bridging finance for a proposed acquisition by Ferrum Resources of 63.5% of the issued share capital of CMC Guernsey; a Guernsey registered company with iron ore licenses in Cameroon. This bridging loan, which is secured against assets of Ferrum Resources, is immediately repayable together with interest (charged at a rate of 9% per annum) on 31 December 2011.

Concurrent with advancing the loan, the Company has entered into an option agreement with the holders of all the remaining issued Ferrum Resources ordinary shares (the "Ferrum Option") giving the Company the right, but not the obligation, to acquire all the issued shares of Ferrum Resources not already owned by the Company for a consideration of US$0.305 per share, to be satisfied by the issue of 7.16 new ordinary shares in Emerging Metals at an effective issue price of 2.6369 pence per share (the "Consideration Shares") for each Ferrum Resources share acquired. In addition, subject to exercise of the Ferrum Option by EML, holders of options over 8 million unissued shares of Ferrum Resources, each with an exercise price of GBP0.35, shall be granted options over new shares in EML on substantially the same look through terms as their existing option entitlement, in consideration of the waiver of their rights to acquire shares in Ferrum Resources.

In aggregate, if the Ferrum Option is exercised, EML will issue 316,574,266 new ordinary shares based on the current issued share capital of Ferrum Resources and will grant warrants over a further 57,280,000 new ordinary shares, each for a term of five years and with an exercise price per share of 4.88 pence.

The Ferrum Option was granted in consideration of a payment to each of the Ferrum Resources shareholders of GBP1.00 and is exercisable for a period of 180 days from the date of grant (unless agreed otherwise in writing by the parties). Since the acquisition of a controlling stake in a company with a trading activity would represent a fundamental change in the Company's business, any exercise of the Ferrum Option will be conditional, amongst other things, on the approval of Emerging Metals' shareholders as well as on admission of the Consideration Shares to trading on AIM. A further announcement will be made should the Company decide to exercise the Ferrum Option.

On 11 July 2011 the Company announced that the agreement by Ferrum Resources to subscribe for new shares in CMC Guernsey Limited constituting 63.53% of its issued shares for a consideration of US$13.5 million had completed. Regulatory approval in Cameroon approving the transfer of shares to CMC Guernsey has now been granted and CMC Guernsey owns, through a 95 per cent. owned subsidiary, six iron ore licenses in Cameroon. These licenses comprise six permits for the exclusive rights to explore for iron ore and related substances in each of the Djadom, Dja, Lele, Minko, Sanaga and Binga zones in Cameroon covering a total area of approximately 6,000 square kilometres.  The licenses were granted in September/October 2010 and are valid for three years, renewable for two additional periods of up to two years each.  The permit area must be reduced by 50 per cent. at each renewal. 

Subsequent Events - Payment of Shares to Directors in Lieu of Salary

On 8 June 2011, we announced that the Company had allotted 4,618,173 new ordinary shares in lieu of salary and fee payments to directors. The new shares have been issued in respect of 100% of Directors' remuneration at month end mid-market prices / exchange rates (USD/GBP) in respect of the eight month period October 2010 through May 2011. The volume weighted average issue price in respect of each director was approximately 2.8113p.

Finally, we would like to express our appreciation to the shareholders for their continued support.

Stephen Dattels Co-chairman                                  James Mellon Co-chairman

Directors' report

The Directors' present their annual report and the financial statements for Emerging Metals Limited ("EML" or the "Company") for the year ended 31 March 2011.

Principal activity and Investing Policy

The Company's strategic objective is to acquire holdings in natural resources companies and/or physical resource assets which the Directors believe are undervalued and where such a transaction has the potential to create value for Shareholders. The Directors intend to take an active role in the management of such investments and estimate that they will be held for periods of up to five years.

The Company is seeking to acquire interests in natural resources projects (including but not limited to all metals, minerals and hydrocarbon projects) or physical resource assets on a worldwide basis. Projects may include (without limit) exploration permits and licences, processing plants, mines or oil and gas fields, which may be achieved through acquisitions, partnerships or joint venture arrangements. Such investments may result in the Company acquiring the whole or part of a company or project, and may include the Company taking strategic equity stakes in both public and private companies.

The Company's investments may take the form of equity, debt, convertible instruments, licence rights, options or other financial instruments as the Directors deem appropriate. Forward transactions and derivatives (including puts and call options on individual positions or physical resource assets) may be used to gain exposure to resources or the securities of companies falling within the Company's investment policy or to seek to generate income from the Company's position in such resources or companies, as well as for efficient portfolio management. The Company may hedge exposure to foreign currencies if considered appropriate for efficient portfolio management. The Company would not however contemplate investments or acquisitions that carry a high degree of contingent risk or liability that is capable of imposing financial obligations upon the Company that it could not reasonably expect to meet.

The Company intends to continue to search for and review a number of opportunities which the Directors believe would benefit from a degree of further investment, the expertise of the Directors and access to the UK's capital markets. The Company will review project opportunities at all stages from early stage exploration to later stage extraction and processing.

The Directors believe that their broad collective experience in the areas of acquisitions, accounting, corporate and financial management together with the opinion of consultant experts in the evaluation and exploitation of natural resources projects who will assist them in the identification and evaluation of suitable opportunities, will enable the Company to achieve its strategic objective. Where necessary, internationally recognised competent persons will be commissioned to prepare reports on the projects being considered by the Company.

The Directors may undertake initial project assessments themselves with additional independent technical advice as required. There is no limit on the number or size of projects into which the Company may invest.

Strategic equity investments may be undertaken in the ordinary course of the Company's business and as an alternative to holding cash reserves on a day-to-day basis. The Directors do not envisage that the Company's investment portfolio will be leveraged initially; however, this position may be reviewed should the Board become aware of available and commercially prudent financing arrangements. The Company will consider cross holdings of shares in circumstances that would benefit its broader strategic objective.

The Directors will consider distribution of any future returns to Shareholders by way of dividend, share repurchases, demergers, schemes of arrangement, liquidation or other means in the light of prevailing circumstances at the time of any such distribution.

Results and transfer to reserves

The results and transfers to reserves for the year are set out on page 8.

The Company made a loss for the year after taxation of £1,006,037 (2010: profit £8,408,770).

Dividend

On 16 April 2010 the Directors proposed the payment of a dividend of 7.13 pence per share, totalling £25,352,097 (2010: £nil).

Directors

The Directors who served during the year and to date were:

Mitchell Alland Denham Eke Stephen Dattels James Mellon Patrick Weller

Directors' Remuneration

	2011	2010
	£	£
Mitchell Alland	25,007	70,676
Denham Eke	96,488	95,329
Stephen Dattels	25,000	25,000
James Mellon	25,000	25,000
Patrick Weller	25,000	25,000
	──────	──────
Total	196,495	241,005
	══════	══════

From October 2010 the Directors passed a resolution for 100% of Directors' remuneration to be settled by way of shares issued in the Company (see note 1(g)).

Share capital

The Company is authorised to issue an unlimited number of no par value shares of a single class. The Company may issue fractional shares and a fractional share shall have the corresponding fractional rights, obligations and liabilities of a whole share of the same class or series of shares.

355,569,386 (2010: 344,464,479) shares are in issue as at 31 March 2011 with a share premium value of £15,804,554 (2010: £15,245,789).

Directors' Interests

As at 31 March 2011, the interests (all of which are beneficial unless otherwise stated) of the Directors and their immediate families and the persons connected with them (within the meaning of Section 346 of the UK Companies Act 1985 ("Connected Person")) are as follows:

	Number of Ordinary Shares	Percentage of Issued Capital
Mitchell Alland	5,687,811	1.60%
Denham Eke1	3,525,163	0.99%
Stephen Dattels2	21,224,263	5.97%
James Mellon3	30,737,443	8.64%
Patrick Weller	3,872,734	1.09%

Notes to Directors' Interests:

1          Denham Eke is a director of Galloway Limited, a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest.

2          Stephen Dattels' entire shareholding of 21,224,263 shares is held by Regent Mercantile Holdings Limited a company itself owned by trustees of a trust under which Stephen Dattels and members of his family may become beneficiaries.

3          James Mellon's shareholding is held in part by himself and in part by Galloway Limited, a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest.

Auditors

Our Auditors, KPMG Audit LLC, being eligible, have expressed their willingness to continue in office.

By order of the Board

Secretary                                                                                                                                       Craigmuir Chambers

                                                                                                                                                                             Road Town

                                                                                                                                                                                     Tortola

                                                                                                                                                         British Virgin Islands

Statement of comprehensive income

For the year ended 31 March 2011	Notes	2011	2010
		£	£
Income
Exchange losses		(34,345)	(61,521)
Unrealised (losses) / gains on investments		(13,074,226)	2,814,733
Realised gains on investments		12,880,877	11,612,665
		──────	──────
		(227,694)	14,365,877
Operating expenses
Directors' fees	7	(196,495)	(241,005)
Other costs	3	(669,897)	(396,888)
Impairment losses	4	-	(5,319,860)
		──────	──────
		(866,392)	(5,957,753)
		──────	──────
(Loss) / profit before interest income		(1,094,086)	8,408,124
Interest income	1(c)	88,049	646
		──────	──────
(Loss) / profit before taxation		(1,006,037)	8,408,770
Taxation	8	-	-
		──────	──────
(Loss) / profit for the year		(1,006,037)	8,408,770
		──────	──────
Other comprehensive income		-	-
		──────	──────
Total comprehensive (loss) / income for the year		(1,006,037) ══════	8,408,770 ══════
Earnings per share	14	(0.0028)	0.0254
		══════	══════
Diluted earnings per share	14	(0.0028)	0.0237
		══════	══════

The notes form part of these financial statements.

Statement of financial position

as at 31 March 2011	Notes	2011	2010
		£	£
Assets
Current assets
Investments	1(d)	-	18,238,155
Trade and other receivables	1(d)	12,204	5,319
Cash and cash equivalents	1(d)	10,000,643	17,676,956
		──────	──────
		10,012,847	35,920,430
		──────	──────
Total assets		10,012,847	35,920,430
		══════	══════
Equity and liabilities
Capital and reserves
Share capital	5	-	-
Share premium	5	15,804,554	15,245,789
Share option reserve	6	-	1,201,674
Equity share based payment reserve	1(g),(h)	97,305	201,124
Accumulated (loss) / profit		(5,937,863)	19,218,597
		──────	──────
Equity attributable to owners of the company		9,963,996	35,867,184
		──────	──────
Current liabilities
Trade and other payables		48,851	53,246
		──────	──────
Total liabilities		48,851 ──────	53,246 ──────
		──────	──────
Total equity and liabilities		10,012,847	35,920,430
		══════	══════

Denham Eke

Chief Financial Officer

The notes form part of these financial statements.

Statement of changes in equity

for the year ended 31 March 2011

	Share Premium	Share Option Reserves	Equity Share Payments	Share Capital	Accumulated Profits	Total
	£	£	£	£	£	£
Balance at 31 March 2009	14,560,530	3,504,144	80,240	-	8,507,357	26,652,271
Total comprehensive income for the year Profit Other comprehensive income for the year Transactions with owners, recorded directly in equity Contributions by and distributions to owners	────── - -	─────── - -	─────── - -	────── - -	─────── 8,408,770 -	─────── 8,408,770 -
Shares issued	685,259	(2,302,470)	-	-	2,302,470	685,259
Increase in share based payment reserve	-	-	120,884	-	-	120,884
Total contributions by and distributions to owners	────── 685,259	─────── (2,302,470)	───────                120,884	────── -	─────── 10,711,240	─────── 9,214,913
	──────	───────	───────	──────	───────	───────
	──────	───────	───────	──────	───────	───────
Balance at 31 March 2010	15,245,789	1,201,674	201,124	-	19,218,597	35,867,184
	══════	═══════	═══════	══════	═══════	═══════

	Share Premium	Share Option Reserves	Equity Share Based Payment Reserve	Share Capital	Accumulated Profits / (Losses)	Total
	£	£	£	£	£	£
Balance at 31 March 2010	15,245,789	1,201,674	201,124	-	19,218,597	35,867,184
Total comprehensive income for the year Loss Other comprehensive income for the year Transactions with owners, recorded directly in equity Contributions by and distributions to owners	────── - -	─────── - -	─────── - -	────── - -	─────── (1,006,037) -	─────── (1,006,037) -
Shares issued in lieu of directors fee (note 7)	201,124	-	(201,124)	-	-	-
Increase in share based payment reserve (note 7) Exercise of share options (note 6)	- 357,641	- (1,201,674)	97,305 -	- -	- 1,201,674	97,305 357,641
Dividend payments	-	-	-	-	(25,352,097)	(25,352,097)
Total contributions by and distributions to owners	────── 558,765	─────── (1,201,674)	───────                (103,819)	────── -	─────── (25,156,460)	─────── (25,903,188)
	──────	───────	───────	──────	───────	───────
	──────	───────	───────	──────	───────	───────
Balance at 31 March 2011	15,804,554	-	97,305	-	(5,937,863)	9,963,996
	══════	═══════	═══════	══════	═══════	═══════

The notes form part of these financial statements.

Statement of cash flows

for the year ended 31 March 2011	Notes		2011	2010
			£	£
Net cash outflow from operating activities	9		(726,663)	(583,280)
Cash flows from investing activities
Amount paid in cash for purchase of investments			(316,285)	(2,655,882)
Proceeds on sale of investments			18,361,091	16,472,899
Net cash inflow from investing activities			────── 18,044,806	────── 13,817,017
			──────	──────
Cash flows from financing activities
Exercise of share options Dividends paid to equity holders	6		357,641 (25,352,097)	685,259 -
Net cash (outflow) / inflow from financing activities			────── (24,994,456) ──────	────── 685,259 ──────
(Decrease) / increase in cash and cash equivalents			(7,676,313)	13,918,996
Cash and cash equivalents at beginning of year			17,676,956	3,757,960
			──────	──────
Cash and cash equivalents at the end of year			10,000,643	17,676,956
			══════	══════

The notes form part of these financial statements.

Notes

(forming part of the financial statements for the year ended 31 March 2011)

1          Accounting policies

          Emerging Metals Limited is a Company domiciled in the British Virgin Islands.

The financial statements incorporate the principal accounting policies set out below.

a)        Statement of compliance

                         The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the interpretations adopted by the International Accounting Standards Board (IASB). 

b)        Basis of preparation

Measurement currency

                         The financial statements of the Company are presented in Sterling pounds, which is the Company's functional currency.

                         Use of Estimates and Judgment

                         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 on-going 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.

A number of new standards, amendments to standards and interpretations are not yet effective for the year, and have not been applied in preparing these financial statements:

New/Revised International Financial Reporting Standards (IAS/IFRS)	Effective date (accounting periods commencing  on or after)
IAS 1 Presentation of Financial Statements*	1 January 2011
IAS 12 Income Taxes - Limited scope amendment (recovery of underlying assets) (December 2010)	1 January 2012
IAS 24 Related Party Disclosures -  Revised definition of related parties	1 January 2011
IAS 27 Consolidated and Separate Financial Statements*	1 July 2010
IAS 27 Consolidated and Separate Financial Statements - Reissued as IAS 27              Separate Financial Statements (as amended in May 2011)	1 January 2013
IAS 28 Investments in Associates - Reissued as IAS 28 Investments in         Associates and Joint Ventures (as amended in May 2011)	1 January 2013
IAS 34 Interim Financial Reporting*	1 January 2011
IFRS 3 Business Combinations*	1 July 2010
IFRS 7 Financial Instruments: Disclosures*	1 January 2011
IFRS 7 Financial Instruments: Disclosures - Amendments enhancing disclosures about transfers of financial assets (October 2010)	1 July 2011
IFRS 9 Financial Instruments - Classification and Measurement	1 January 2013
IFRS 10 Consolidated Financial Statements**	1 January 2013
IFRS 11 Joint Arrangements**	1 January 2013
IFRS 12 Disclosure of Interests in Other Entities**	1 January 2013
IFRS 13 Fair Value Measurement**	1 January 2013
IFRIC Interpretation
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments	1 July 2010

*Amendments resulting from May 2010 Annual Improvements to IFRSs

** Original issue May 2011

The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application. However, IFRS 9 Financial Instruments issued in November 2009 will change classification of financial assets.

c)         Interest Income

Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable.

d)        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 amortised cost and due on demand.

                         Financial liabilities

                         Non-derivative financial liabilities are recognised at amortised cost.

             e)         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.                                                                    

             f)         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 end of the reporting date. All differences are taken to the statement of comprehensive income.

                         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.

             g)        Share based payments

The Company determines the fair value of options issued to Directors in lieu of remuneration and recognises the amount as an expense in the statement of comprehensive income with a corresponding increase in equity.      

   h)          Directors equity share based payments

                         The fair value of the shares granted is recognised as an expense with a corresponding increase in equity. The fair value is measured at each qualifying month end and spread over the period during which the directors become unconditionally entitled to the shares.

2          Operating segments

             It is the Directors' opinion that the Company operates within a single segment.

3          Other costs

		2011	2010
		£	£
Professional fees		241,726	305,560
Audit fee		16,501	19,025
Commission on sale of investments Travel and transport expenses		329,953 604	- 3,045
Office expenses		81,113	69,258
		────────	────────
		669,897	396,888
		════════	════════

4          Impairment losses

The impairment losses recognised in the statement of comprehensive income, as a separate line item within operating profit are as follows:

	2011 £	2010 £
Intangible fixed assets	-	501,405
Cost of land options	-	4,818,455
	───────	───────
	-	5,319,860
	═══════	═══════

On 31 March 2010 the Directors' opinion was that the carrying value of these assets were not deemed recoverable and exceeded their fair value and that the carrying values be written off anticipating the expiry at the end of July 2010. The option has now expired.

5          Share capital and share premium

		2011	2010
		£	£
Authorised
The Company is authorised to issue an unlimited number of no par value shares of a single class		-	-
Issued
355,569,386 (2010: 344,464,479 ordinary shares of £0.00 each) ordinary shares of £0.00 each.		-	-
Share premium
1 share at incorporation		-	-
71,528,234 shares at £0.0001 per share		7,153	7,153
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
22,746,663 shares at £0.1200 per share 13,705,179 shares at £0.0500 per share 3,952,084 shares at £0.05089 per share (see note 7) 7,152,823 shares at £0.0500 per share (see note 6)		2,729,157 685,259 201,124 357,641	2,729,157 685,259 - -
		────────	────────
Total		15,804,554	15,245,789
		════════	════════

The shares issued during the period with share premium of £558,765 relate to the exercise of share options (please refer to note 6) and equity share-based payments following a resolution passed for the Directors of the Company to accept remuneration in the form of new shares issued at mid-market prices (please refer to note 7).

6          Share options

On 6 April 2010 the Company issued 7,152,823 (31 March 2010: 13,705,179) ordinary shares at no par value for a total consideration of £357,641 in respect of an exercise of the outstanding founder share options.

As at 31 March 2011, the value of the share options in issue is £nil (31 March 2010: £1,201,674).

7          Directors' fees

Mitchell Alland		2011 £ 25,007	2010 £ 70,676
Denham Eke		96,488	95,329
Stephen Dattels		25,000	25,000
James Mellon		25,000	25,000
Patrick Weller		25,000	25,000
		──────	──────
Total	196,495		241,005
	══════		══════

In November 2008 the Company granted equity share-based payments following a resolution passed for the Directors of the Company to accept 50% of their remuneration in the form of new shares issued at monthly mid-market prices.

On 20 April 2010 the Company allotted 3,952,084 (31 March 2010: nil) new ordinary shares of nil par value in lieu of salary and fee payments to Directors in accordance with the announcement of final results made on 22 September 2010. The new shares were issued at month end mid-market prices/exchange rates (USD/GBP) in respect of the period November 2008 to March 2010 inclusive. The volume weighted average issue price in respect of each Director was approximately 5.089p.

Following the 2010 share allotment, Directors fees reverted to being settled by way of cash payment. However, subsequent to the year end, the Directors resolved that amounts outstanding to the Directors in respect of fees (reflecting the period from 1 October 2010 to 31 May 2011) should be settled via issue of new ordinary shares in the Company, issued at month end mid-market prices, in order to conserve cash for post year end activities (see Note 13).

	Period	Share issue date	Shares issued	2010 £
Directors fees paid in cash at 50%	April 2009 to March 2010	-	-	120,121
Shares in lieu	April 2009 to March 2010	20 April 2010	1,960,444	120,884
				──────── 241,005 ══════

	Period	Share issue date	Shares issued	2011 £
Directors fees paid in cash at 100%	April 2010 to September 2010	-	-	99,190
Shares in lieu	October 2010 to March 2011	7 June 2011	3,401,304	97,305
				──────── 196,495 ══════

             The Company has no employees other than the Directors.

8          Taxation

The Company is exempt from the provisions of the Income Tax Ordinance of the British Virgin Islands.

9          Notes to the cash flow statement

Reconciliation of (loss) / profit for the year to net outflow from operating activities

			2011	2010
		£		£
(Loss) / profit for the year		(1,006,037)		8,408,770
Adjustment for:
(Increase) / decrease in trade and other receivables		(6,885)		1,058
Decrease in trade and other payables		(4,395)		(6,454)
Share based payment charge		97,305		120,884
Unrealised losses/(gains) on investments		13,074,226		(2,814,733)
Impairment losses		-		5,319,860
Realised gains on investments		(12,880,877)		(11,612,665)
		───────		───────
Net cash outflow from operating activities		(726,663)		(583,280)
		═══════		═══════

10              Financial risk management

The Company's financial instruments are exposed to a number of risks as detailed below:

Credit risk

Credit risk is the risk of financial loss to the Company if a counter party to a financial instrument fails to meet its contractual obligations.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:       

		2011	2010
		£	£
Cash		10,000,643	17,676,956
		══════	══════

The Company invests available cash with an Isle of Man licensed bank, which has a strong history on the Island. The bank accounts are held under a fiduciary agreement and funds are available on demand.

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.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk is managed by the Company by means of cash flow planning to ensure that future cash requirements are anticipated. All liabilities are due within one month and all cash maintained in call accounts.

             Market price risk

Market price risk is the risk that changes in market prices such as foreign exchange   rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments.

All investments present a risk of loss of capital due to unexpected and unforeseen events in the financial markets, and these can have a material and unpredictable impact on the portfolio value. The maximum risk resulting from the portfolio is equivalent to their fair value.

		2011	2010
		£	£
Investments		-	18,238,155
		══════	══════

                Interest rate risk

The Company holds current assets in the form of cash at bank. As a result, the Company is subject to risk due to fluctuations in the prevailing level of market interest rates. The weighted average interest rate at 31 March 2011 was 0.7473% (31 March 2010: 0.0152%) and all balances are held on demand.

The Directors do not regard that interest income is a core revenue stream of the Company and therefore fluctuations in interest rates will not adversely impact the continuing operations of the Company.

      Fair values of financial instruments

At 31 March 2011 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.

11         Significant shareholdings

Except for the interests disclosed in this note, the Directors are not aware of any holding of Ordinary Shares as at 31 October 2011 representing 3% or more of the issued share capital of the Company:

	Number of Ordinary Shares	Percentage of Issued Capital
Vidacos Nominees Limited	121,570,500	34.19%
Bruce Rowan	25,000,000	7.03%
Goldman Sachs Securities (Nominees) Limited	21,224,263	5.97%
Ambrian Nominees Limited	12,705,179	3.57%
Lynchwood Nominees Limited	11,047,811	3.11%
Barclayshare Nominees Limited	10,883,368	3.06%
Directors' interests
Stephen Dattels2	21,224,263	5.97%
James Mellon3	30,737,443	8.64%

Notes to Directors' Interests:

1   Denham Eke is a director of Galloway Limited, a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest.

2   Stephen Dattels' entire shareholding of 21,224,263 shares is held by Regent Mercantile Holdings Limited a company itself owned by trustees of a trust under which Stephen Dattels and members of his family may become beneficiaries.

3   James Mellon's shareholding consists of 28,737,443 shares which are held by Galloway Limited, a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest and a further 2,000,000 shares held in James Mellon's own name. Denham Eke is also a Director of Galloway Limited.

12         Related party transaction

The Company has entered into a service agreement with Burnbrae Limited for the provision of administrative and general office services. Mr James Mellon and Mr Denham Eke are both directors of Burnbrae Limited and the Company. During the year the Company paid £37,125 (2010: £32,162) under this agreement and as at 31 March 2011 an amount of £nil (2010: £8,488) was owed to Burnbrae Limited.

13    Subsequent events

·     On 8 April 2011 the Company announced that at its Meeting of Shareholders held earlier that day, that a resolution to approve the expansion of the Company's existing investing policy was duly passed.

·     On 8 April 2011 the Company announced the appointment of Evolution Securities Limited as sole Broker to the Company with immediate effect.

·     On 20 April 2011 the Company announced that under the terms of a convertible loan agreement entered into between the Company and Ferrum Resources Limited, the Company had advanced US$752,500, repayable in full in cash on 31 October 2011, or at any time earlier by conversion into 2,467,213 new ordinary shares in the capital of Ferrum Resources Limited at an effective price of US$0.305 each.

·     On 24 April 2011 the Company announced that, further to the approval of its expanded investing policy on 8 April 2011 and after consultation with the Exchange, the Company became an investing company for the purposes of the AIM Rules on 19 July 2010 (following completion of its disposal of shares in Extract Resources) and hence had twelve months from that date to make any acquisition(s) which constitute(s) a reverse takeover or otherwise implement its investing policy to the satisfaction of the Exchange.

·     On 10 May 2011 the Company announced that it had executed a put and call option agreement with Ferrum Resources Limited, an iron ore exploration and development company with interests in Sierra Leone, Guinea and Central African Republic. Under the terms of the Option Agreement,

-      Ferrum Resources Limited has granted the Company a call option, for a consideration of US$1;

-      the Company has granted Ferrum Resources Limited a put option, for a consideration of US$1;

-      under the Put Option, Ferrum Resources Limited can require the Company to subscribe for the Option Shares (at the Subscription Price) at any time within 60 days of the date the Option Agreement save that the Put Option can only be exercised if Ferrum Resources Limited has received a legal opinion from its Sierra Leone counsel confirming its interests in, and the good standing of, five exploration licenses in the country;

-      in each case the aggregate Subscription Price shall be US$7,999,714;

-      in aggregate, the Option Shares will, if issued, constitute 37.5% of the enlarged issued share capital of Ferrum.

·     On 3 June 2011 Emerging Metals Limited announced that it had subscribed for 26,228,570 new ordinary shares in the capital of Ferrum Resources Limited at a price of US$0.305 per share for an aggregate consideration of US$7,999,714 (US$7,247,214 net of repayment of an existing US$752,500 loan from the Company to Ferrum Resources Limited) pursuant to the option agreement with Ferrum Resources Limited announced on 10 May 2011. The New Ferrum Shares represent 37.23% of Ferrum's enlarged issued share capital. In accordance with the terms of the option agreement, Jim Mellon and Denham Eke were appointed to the board of Ferrum with Mr Mellon assuming the interim role of Chairman. The Company had in addition advanced to Ferrum US$7,000,000 as bridging finance for a proposed acquisition by Ferrum of 63.5% of the issued share capital of a Guernsey registered company with Iron Ore licenses in Cameroon. The Bridging Loan, which is secured against assets of Ferrum, is immediately repayable together with interest (charged at a rate of 9% per annum) on 31 December 2011. Concurrent with advancing the Bridging Loan, the Company has entered into an option agreement with the holders of all the remaining issued Ferrum ordinary shares (the "Ferrum Option") giving the Company the right, but not the obligation, to acquire all the issued shares of Ferrum not already owned by the Company for a consideration of US$0.305 per share, to be satisfied by the issue of 7.16 new ordinary shares in Emerging Metals at an effective issue price of 2.6369 pence per share (the "Consideration Shares") for each Ferrum share acquired.

·      On 8 June 2011 the Company announced that its 37.23% associate Ferrum Resources Limited had entered into an agreement to subscribe for new shares in CMC Guernsey Limited constituting 63.53% of its issued shares for a cash consideration of US$13.5 million.

·     On 8 June 2011 the Company announced that, following a board meeting on 27 May 2011, it had allotted 4,618,173 new ordinary shares of nil par value in lieu of salary and fee payments to directors. The new shares have been issued in respect of 100% of Directors' remuneration at month end mid-market prices / exchange rates (USD/GBP) in respect of the eight month period October 2010 through May 2011. The volume weighted average issue price in respect of each director was approximately 2.8113p.

·     On 11 July 2011 the Company announced that the agreement by its 37.23% associate Ferrum Resources Limited to subscribe for new shares in CMC Guernsey Limited constituting 63.53% of its issued shares for a consideration of US$13.5 million had completed.

14   Basic and diluted earnings per share

The calculation of basic earnings per share of the Company is based on the net loss attributable to shareholders for the year of £1,006,037 (2010: profit of £8,408,770) and the weighted average number of shares of 355,098,075 (2010: 330,759,300) in issue during the year.   

Diluted earnings per share are calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. As at 31 March 2011 there is no dilutive effect, because the Company incurred net losses. Therefore, basic and diluted earnings per share for the year are equal.

			2011	2010
			£	£
Retained Earnings for basic and diluted earnings per share:			(1,006,037) ═══════ 2011 No. of shares	8,408,770 ═══════ 2010 No. of shares
Weighted average number of shares for basic earnings per share			355,098,075	330,759,300
Diluted effect of weighted average shares to be issued to Directors in lieu of fees (note 7)			979,071	24,242,379
Weighted average number of shares for diluted earnings per share			──────── 356,077,146	──────── 355,001,679
			════════	════════

 

END

 

 

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