Final Results

RNS Number : 2230E

Eurasia Mining PLC

28 May 2012

 



Eurasia Mining plc

("Eurasia" or the "Company")

Final Results for the Twelve Months Ended 31 December 2011

Chairman's Statement

This time last year we reported to you on steady progress in advancing our West Kytlim project, as well as introducing our plans to expand into new projects in the Former Soviet Union. Now, at the time of writing, we are confident that the protracted efforts to begin a platinum mining project are bearing fruit.

West Kytlim

During 2011 we continued to add new areas of potential alluvial platinum resources through ongoing drilling, pitting and bulk sampling. We announced an 81% increase in C2 reserves, as defined under the Russian classification system. In September 2011 the Company received confirmation that the Urals Branch of the Federal Agency for Natural Resources had approved two further areas of additional reserves of C2 classification as defined by the Russian Standard within the Tylai-Kosvinsky (the "TK") Placer. The approval of these new reserve areas is confirmation of the extent of the TK Placer well beyond Bolshaya Sosnovka Creek, the area of our original discovery and reserve area.

These new areas have been submitted as supplemental applications to our original production licence application. Multiple approved reserve areas should permit expanding annual production levels within the eventual mining operation at West Kytlim and  lengthen the mine life of the project.

Monchetundra

During the last twelve months no new exploration work has been carried out on this area and the Company is assessing its future options for the area. The other Kola exploration licence, Volchetundra, was not renewed on its expiry at the end of 2011.

Kamushanovsky

Early in 2011 the Company announced that it had executed a legally binding Memorandum of Understanding ("MOU") to acquire an interest in the Kamushanovsky Uranium Project in Kyrgyzstan. The project is located 60 kilometres northwest of the capital Bishkek. The MOU was assigned to Energy Resources Asia Limited ("ERA"), a new private company currently managed and controlled by Eurasia; it was co-founded with Afrasia Mining & Energy Investment Holdings Ltd which has access to a number of other uranium exploration licences in Kyrgyzstan. Financing was arranged for this project through ERA and has largely been used at Kamushanovsky, pending formal offer by the government of Kyrgyzstan of the other licence applications.

The project involves the mining and concentration of peat containing uranium for subsequent transport to a nearby uranium processing plant at Kara Balta, some 60 kilometres to the southwest. A number of different processes were examined in detail during the year, with the final option not yet selected. The aim is to have this work completed by the third quarter of 2012.

In parallel, further exploration has continued with the objective of adding to the measured and indicated resources currently estimated at 1,775 tonnes of uranium oxide.

Other activities

The Company continues to pursue other opportunities in Russia, particularly gold in the Far East. This work has led to the definition of projects with separate financing and in which the Company expects to participate in the near future.

In the difficult market conditions in the extractive industries which have prevailed over the last 12 months, we are pleased that we raised GBP 3.4 mln by way of private placements. We value greatly that shareholders continue to support our strategy to build the Company into a successful platinum producer and minerals developer in the Former Soviet Union.  I would like to thank you for your support and also my fellow directors and our excellent staff. The professionalism and dedication of our team give us the confidence to believe in success for Eurasia.

Michael Martineau

Chairman

For more information please contact:

Eurasia Mining
Christian Schaffalitzky / Michael de Villiers	Tel: [phone]
Katy Mitchell, WH Ireland Limited	Tel: [phone]

Directors' report

The Directors present their report and the audited financial statements for the year ended 31 December 2011 prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK

Principal activities

The principal activity of the Group is mineral exploration for platinum group metals and gold. A review of the Group's activities and future prospects are set out in the Chairman's statement.

Key performance indicators

At this stage of the Group business activities the Directors think it appropriate to limit the Key Performance Indicators (KPIs) used to monitor progress in the delivery of the Group's strategic objectives, to assess actual performance against targets and to aid management of the business, other than the monitoring of licences and stages of exploration.

The Board monitors relevant KPIs which it considers appropriate for a company at Eurasia's stage of development, are focussed on managing the activities inherent in exploration and appraisal operations. The KPIs for the Group are as follows:

Financial KPIs

Shareholder return - the performance of the share price;

Exploration expenditure - funding and development costs.

Non financial KPIs

Environment management - strict environmental policies in place;

Operational success - The number of successful exploration drilling ventures added.

Principal risks and uncertainties

The risks inherent in an exploration business are kept under constant review by the Board and the Executive Committee. The going concern risk and the key financial risks affecting the Group are set out respectively in the notes to the Report and Accounts and the principal operating risks affecting the Group are detailed below:

Project development risks

The Group's mineral property licences and/or permits do not currently provide for the development of a mine. Consequently, the Company will be required to obtain further licences and/or permits (mining, environmental and otherwise) from the respective government departments in the applicable countries of operation.

Political risk

The Group's assets are located in Russia which is still undergoing a substantial transformation from a centrally controlled command economy to a market-driven economy. In addition, in view of the legal and regulatory regime in Russia, legal inconsistencies may arise.

Environmental issues

The Group's operations are subject to environmental regulation, including environmental impact assessments and permitting. Russian environmental legislation comprises numerous federal and regional regulations which are not fully harmonised and may not be consistently interpreted.

The regulatory environment

The Group's activities are subject to extensive federal and regional laws and regulations governing various matters, including licensing, production, taxes, mine safety, labour standards, occupational health and safety and environmental protections. Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation or interpretation of these laws and regulations can have a material adverse impact on the Group and/or delay or prevent the development or expansion of the Group's properties in Russia.

Directors

The Directors who served during the period were:

Michael Martineau - Non-Executive Chairman

Christian Schaffalitzky - Managing Director

Gary FitzGerald - Non-Executive Director

Dmitry Suschov - Non-Executive Director

Directors' interests

Share interests

The Directors of the Company held the following beneficial interests (including interests held by spouses and minor children) in the ordinary shares of the Company:

	31 Dec 2011	31 Dec 2010
	No. of shares	No. of shares
M. Martineau	12,618,625	7,051,025
C. Schaffalitzky	22,686,168	12,911,168
G. FitzGerald	15,326,994	8,835,686
D. Suschov*	234,500,000	225,000,000
Total	285,131,787	253,797,879

*as sole shareholder and director of Deloan Investment Limited

Share options

The Directors of the Company held share options granted under the Company's Executive share option scheme, as indicated below. No share options were exercised during the year.

	31 Dec 2011	31 Dec 2010
	No. of shares	No. of shares
M Martineau	3,700,000	700,000
C Schaffalitzky	9,200,000	1,200,000
G FitzGerald	3,225,000	225,000
D. Suschov	3,000,000	nil
Total	19,125,000	2,125,000

Share capital

Issued capital of the Company as at 31 December 2011 was:

	Number of shares	Nominal value
Fully paid ordinary shares at 0.1 pence	676,968,701	676,969
Deferred shares 4.9 pence	143,377,203	7,025,483

Section 561 of the Companies Act 2006 (the "Act") provides that any shares being issued for cash must in general be issued to all existing shareholders pro-rata to their holding. However, where Directors had a general authority to allot shares, they may be authorised by the Articles or by a special resolution to allot shares pursuant to the authority as if the statutory pre-emption rights did not exist.

At the General Meeting, held on 30 June 2011, the Board was given authority to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount of £1,000,000, such authority to expire on the date of the next Annual General Meeting.

The Board has utilised this authority of up to a nominal amount of £1,000,000 pursuant to:

(i)            October 2011 issue of 46,850,000 ordinary shares for the nominal value of £46,850 by way of placing and grant of 46,850,000 warrants to subscribe for shares for the nominal value of £46,850;

(ii)           April 2012 issue of 288,500,000 ordinary shares for the nominal value of £288,500 by way of placing.

It will be proposed at the Annual General Meeting as an ordinary resolution to renew the Directors' general authority to issue relevant securities up to an aggregate nominal amount of £1,000,000.

It will also be proposed at the Annual General Meeting as a special resolution for the renewal of the Directors' authority to allot relevant securities for cash, without first offering them to shareholders pro rata to their holdings, pursuant to section 561 of the 2006 Act up to an aggregate nominal amount of £1,000,000.

Substantial share interests

The Company had been notified of the following interests in shares in excess of 3 per cent of the issued share capital at 21 May 2012:

	No of shares held	% of share capital
Queeld Ventures Ltd	288,500,000	29.88%
Deloan Investments Limited	225,000,000	23.30%
Fitel Nominees Limited	49,289,198	5.11%
Barclayshare Nominees Limited	30,446,701	3.15%
	593,235,899	61.44%

Share Analysis

As at 21 May 2012

Holdings	No of accounts	No of shares held	% of share capital
1 - 50,000	1,156	12,242,882	1.27%
50,001 - 100,000	115	9,439,675	0.98%
100,001 - 500,000	194	48,168,382	4.99%
500,001 - 1,000,000	40	31,618,444	3.27%
1,000,001 - 5,000,000	35	66,966,324	6.94%
5,000,001 - 10,000,000	11	82,944,569	8.59%
10,000,000 - 100,000,000	12	200,588,425	20.78%
Over 100,000,000	2	225,000,000	53.19%
Totals	1,565	965,468,701	100%

Statement of Directors' responsibilities

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have to prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company and group for that period. In preparing these financial statements, the directors are required to:

•               select suitable accounting policies and then apply them consistently;

•               make judgments and accounting estimates that are reasonable and prudent;

•               state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;

•               prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each of the directors is aware: 

•               there is no relevant audit information of which the Company's auditors are unaware; and

•               the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Corporate Governance

The Board of Directors

The Directors are responsible for the Group's system of internal control and for reviewing its effectiveness. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of failure to achieve the Company's objectives. Any such system of internal financial control can only provide reasonable but not absolute assurance against material misstatement or loss.

Full Board meetings are held quarterly to review Group strategy, direction and financial performance. The executive Directors meet regularly to review operational reports from all the Group's areas of operations. The process is used to identify major business risks and evaluate their financial implications and ensure an appropriate control environment. Certain control over expenditure is delegated to on site project managers subject to Board control by means of monthly budgetary reports. Internal financial control procedures include:-

•               Preparation and regular review of operating budgets and forecasts

•               Prior approval of all capital expenditure

•               Review and debate of treasury policy

•               Unrestricted access of non-executive Directors to all members of senior management.

The Board, in conjunction with members of the Audit Committee, has reviewed the effectiveness of the system of internal control for the period from 1st January 2011 to the date of this report.

Audit Committee

The Chairman of the Audit Committee is Gary FitzGerald. The Audit Committee may examine any matters relating to the financial affairs of the Group and the Group's audits, this includes reviews of the annual financial statements and announcements, internal control procedures, accounting procedures, accounting policies, the appointment, independence, objectivity, terms of reference and fees of external auditors and such other related functions as the Board may require.

The membership of the Audit Committee comprises two non-executive Directors, Michael Martineau and Gary FitzGerald. The external auditors have direct access to the members of the Committee, without the presence of the executive Directors, for independent discussions.

Remuneration Committee

The Chairman of the Remuneration Committee is Michael Martineau. The committee comprises two non-executive Directors, Michael Martineau and Gary FitzGerald. It determines the terms and conditions of employment and annual remuneration of the Executive Directors. It consults with the Managing Director, takes into consideration external data and comparative third party remuneration and has access to professional advice outside the Company.

The key policy objectives of the Remuneration Committee in respect of the Company's executive Directors and other senior executives are:-

a)             to ensure that individuals are fairly rewarded for their personal contribution to the Company's overall performance, and

b)            to act as an independent committee ensuring that due regard is given to the interests of the Company's Shareholders and to the financial and commercial health of the Company.

Remuneration of executive Directors comprises basic salary, discretionary bonuses, participation in the Company's share option scheme and other benefits. The Company's remuneration policy with regard to options is to maintain an amount of not more than 10% of the issued share capital in options for the Company's management and employees which may include the issue of new options in line with any new share issues.

Total Directors' emoluments are disclosed in the notes to the Report and Accounts and the Directors' options are disclosed above. During 2011 17,000,000 options were granted to the Directors (2010: nil).

Dividends and profit retention

No dividend is proposed in respect of the year (2010: £nil) and the retained loss for the year of £949,652 (2010: £522,555) has been taken to reserves.

Research and development

The Group's research and development activities during the year continued to be concentrated principally on mineral exploration programmes and the improvement of mining techniques and metallurgical processes.

Policy on payment of suppliers

The Company's policy is to settle terms of payment with its suppliers when agreeing the terms of each transaction, ensuring that suppliers are made aware of the terms of payment, and abiding by the agreed terms. There were no trade creditors at the year-end.

Financial instruments

Details of the financial risk management objectives and policies of the Group and the exposure of the Group to currency risk and liquidity risk are set out in the notes to the Report and Accounts.

Auditors

Grant Thornton UK LLP are willing to continue in office and a resolution proposing their re-appointment as auditors of the Company and a resolution authorising the Directors to fix their remuneration will be put to shareholders at the Annual General Meeting.

By order of the Board

M J de Villiers

Secretary

25 May 2012

Eurasia Mining plc

Consolidated statement of comprehensive income

For the year ended 31 December 2011

		Year to 31 December 2011	Year to 31 December 2010
		£	£
Revenue		79,580	-
Administrative costs		(938,076)	(558,918)
Share of results from equity accounted investments		(29,625)	(353)
Other financial result		(61,531)	36,716
Loss before tax		(949,652)	(522,555)
Income tax expense		-	-
Loss for the period		(949,652)	(522,555)
Other comprehensive income/(loss):
Exchange differences on translation of foreign operations		72,234	(36,500)
Other comprehensive income/(loss) for the period, net of tax		72,234	36,500
Total comprehensive loss for the period		(877,418)	(559,055)
Loss for the period attributable to:
Equity holders of the parent		(934,273)	(522,555)
Non-controlling interest		(15,379)	-
		(949,652)	(522,555)
Total comprehensive loss for the period attributable to:
Equity holders of the parent		(875,862)	(559,055)
Non-controlling interest		(1,556)	-
		(877,418)	(559,055)
Loss per share
Basic and diluted loss (pence per share)		(0.15)	(0.12)

In accordance with section 408(3) of the Companies Act 2006, Eurasia Mining plc is exempt from the requirement to present its own income statement. The amount of the loss for the financial year recorded within the financial statements of Eurasia Mining plc is £991,490 (2010: £562,353)

Eurasia Mining Plc

Consolidated statement of financial position

As at 31 December 2011

		31 December 2011	31 December 2010
		£	£
ASSETS
Non-current assets
Property, plant and equipment		24,598	25,166
Investments in equity accounted investees		-	31,485
Other financial assets		2,544,321	1,148,586
Total non-current assets		2,568,919	1,205,237
Current assets
Inventories		376	926
Trade and other receivables		32,907	44,803
Cash and cash equivalents		171,098	943,636
Total current assets		204,381	989,365
Total assets		2,773,300	2,194,602
EQUITY
Issued capital		19,442,527	18,461,150
Reserves		3,209,594	3,037,083
Accumulated losses		(20,335,117)	(19,480,722)
Equity attributable to equity holders of the parent		2,317,004	2,017,511
Non-controlling interest		298,404	-
Total equity		2,615,408	2,017,511
LIABILITIES
Current liabilities
Trade and other payables		157,892	177,091
Total current liabilities		157,892	177,091
Total liabilities		157,892	177,091
Total equity and liabilities		2,773,300	2,194,602

Eurasia Mining Plc.

Consolidated statement of changes in equity

	Note	Share capital	Share premium	Deferred shares	Capital redemption and other reserves	Foreign currency translation reserve	Accumulated losses	Total attributable to owners of parent	Minority interest	Total
		£	£	£	£	£	£	£	£	£
Balance at 1 January 2010		356,337	8,858,724	7,025,483	3,767,933	(690,410)	(18,973,243)	344,824	-	344,824
Issue of ordinary shares on exercise of warrants		81,434	786,652	-	(53,752)	-	-	814,334	-	814,334
Issue of ordinary shares for cash		145,575	1,310,175,	-	-	-	-	1,455,750	-	1,455,750
Share issue cost		-	(103,230)	-	-	-	-	(103,230)	-	(103,230)
Cancellation of options by forfeiture		-	-	-	(15,076)	-	15,076	-	-	-
Recognition of share-based payment		-	-	-	64,888	-	-	64,888	-	64,888
Transactions with owners		227,009	1,993,597	-	(3,940)	-	15,076	2,231,742	-	2,231,742
Loss for the period		-	-	-	-	-	(522,555)	(522,555)	-	(522,555)
Exchange differences on translation of foreign operations		-	-	-	-	(36,500)	-	(36,500)	-	(36,500)
Total recognised income and expense for the period		-	-	-	-	(36,500)	(522,555)	(559,055)	-	(559,055)
Balance at 31 December 2010		583,346	10,852,321	7,025,483	3,763,993	(726,910)	(19,480,722)	2,017,511	-	2,017,511

Eurasia Mining Plc.

(Company number 3010091)

Consolidated statement of changes in equity - continued

	Note	Share capital	Share premium	Deferred shares	Capital redemption and other reserves	Foreign currency translation reserve	Accumulated losses	Total attributable to owners of parent	Minority interest	Total
		£	£	£	£	£	£	£	£	£
Balance at 1 January 2011		583,346	10,852,321	7,025,483	3,763,993	(726,910)	(19,480,722)	2,017,511	-	2,017,511
Issue of ordinary shares on exercise of warrants		46,773	492,279	-	(71,323)	-	-	467,729	-	467,729
Issue of ordinary shares for cash		46,850	421,650	-	-	-	-	468,500	-	468,500
Share issue cost		-	(26,175)	-	-	-	-	(26,175)	-	(26,175)
Cancellation of options by forfeiture		-	-	-	(79,878)	-	79,878	-	-	-
Recognition of share-based payment		-	-	-	265,301	-	-	126,199	-	126,199
Non-controlling interest		-	-	-	-	-	-	-	299,960	299,960
Transactions with owners		93,623	887,754	-	114,100	-	79,878	1,175,355	299,960-	1,475,315
Loss for the period		-	-	-	-	-	(934,273)	(934,273)	(15,379)	(949,652)
Exchange differences on translation of foreign operations		-	-	-	-	58,411	-	58,411	13,823	72,234
Total recognised income and expense for the period		-	-	-	-	58,411	(934,273)	(875,862)	(1,556)	(877,418)
Balance at 31 December 2011		676,969	11,740,075	7,025,483	3,878,093	(668,499)	(20,335,117)	2,317,004	298,404	2,615,408

Eurasia Mining Plc.

Consolidated statement of cash flows

For the year ended 31 December 2011

	Note	Year to 31 December 2011	Year to 31 December 2010
		£	£
Cash flows from operating activities
Loss for the period		(949,652)	(522,555)
Adjustments for:
Depreciation of non-current assets		1,039	1,345
(Profit)/loss on disposal of investments		-	162
Share of loss of associates		29,625	353
Net foreign exchange loss		61,531	(36,878)
Expense recognised in income statement in respect of   equity-settled share-based payments		265,301	64,888
		(592,156)	(492,685)
Movement in working capital
Decrease in inventories		550	449
Decrease/(Increase) in trade and other receivables		12,184	(18,778)
(Increase)/Decrease in trade payables		(19,427)	32,317
Cash outflow from operations		(598,849)	(478,697)
Net cash flow from operating activities		(598,849)	(478,697)
Cash flows from investing activities
Advanced to joint venture		(1,006,261)	(882,323)
Advanced to non-related party		(389,392)	-
Purchase of property, plant and equipment		(513)	-
Contributed by non-controlling party		299,960	-
Net cash (used)/generated in investing activities		(1,096,206)	(882,323)
Cash flows from financing activities
Proceeds from issue of equity shares		910,054	2,166,854
Net cash proceeds from financing activities		910,054	2,166,854
Net increase/(decrease) in cash and cash equivalents		(785,001)	805,834
Effects of exchange rate changes on the balance of cash held in foreign currencies		12,463	45
Cash and cash equivalents at beginning of period		943,636	137,757
Cash and cash equivalents at end of period		171,098	943,636

Notes to the consolidated financial statements

1.  General information

Eurasia Mining Plc (the "Company") is a public limited company incorporated and domiciled in Great Britain with its registered office and principal place of business at Suite 139, Grosvenor Gardens House, 35-37 Grosvenor Gardens, London SW1W 0BS. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.

Eurasia Mining Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.

The financial information contained in this document does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The figures for the year ended 31 December 2010 have been extracted from the audited statutory financial statements.  The financial statements for the year ended 31 December 2010 received a qualified auditors' report in relation to the 2009 comparative consolidated statement of comprehensive income only. It did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. 

2. Annual Report and Notice of Annual General Meeting

The Annual Report and Accounts will be dispatched to shareholders on 31 May 2012 and will also be available on the Company's website from that date: www.eurasiamining.co.uk .

The Annual General Meeting of the Company has been convened at 11.00am, on 28 June 2012, at The East India Club, 16 St. James's Square, London SW1Y 4LH.

 

 

END

 

 

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