Unaudited Interim Results

RNS Number : 3888D

Golden Prospect Precious Metals Ltd

15 September 2008

 



15 September 2008

Golden Prospect Precious Metals Limited

(the 'Company')

Re:    Unuadited Interim Results for the period 1 January to 30 June 2008

All Enquiries:

Gillian Newton/Andrew Maiden

Northern Trust International Fund Administration Services (Guernsey) Limited

Company Secretary

Tel: [phone]

Hugh Field 

Collins Stewart Europe Limited

Nomad 

[phone] 

  GOLDEN PROSPECT PRECIOUS METALS LIMITED

for the period from 1 January 2008 to 30 June 2008

Summary Information

Structure

Golden Prospect Precious Metals Limited ('the Company') was incorporated in Guernsey on 16 October 2006 under The Companies Law (Guernsey) 1994 to 1996 (as amended), as a limited liability closed-end investment company.

The Company's shares and warrants were listed on the Alternative Investment Market ('AIM') in the London Stock Exchange on 28 November 2006 and on the Channel Islands Stock Exchange ('CISX') on 24 June 2008.

Investment Objective and Policy

The Company's investment objective is to generate above average returns for Shareholders primarily through the capital appreciation of its investments. The Directors believe that such returns can be obtained by investing in a selective portfolio of securities and other instruments in the precious metals, diamond and uranium sectors.

Financial Highlights
Total Net Assets						£11,611,369
Net Assets per Ordinary Share as previously reported						89.78p
Net Assets per Ordinary Share as per accounting						89.82p

Investment Manager's Report

Introduction

Golden Prospect Precious Metals Limited ('the Company') experienced a turbulent ride during the first six months of 2008, the period under review. The Net Asset Value ('NAV') of the Company fell from 111.22 pence per share as at 31 December 2007 to 89.78 pence per share as at 30 June 2008, a decline of 19.3%. The period was characterised by considerable volatility which saw the monthly change in NAV (positive or negative) average 9.0%. This compares to a figure of 2.7% for the same period in 2007. Unfortunately, the period since 30 June 2008 has seen equity markets deteriorate further and with it the Company's NAV.

Six months to 30 June 2008

During the six months to 30 June 2008, the period under review, world markets became increasingly depressed as fears grew over the scale of the credit crisis and its impact on the major economies. US and UK interest rates were cut in a bid to free up the financial system. Despite this, lenders sought to preserve cash and made the terms of their loans unattractive, reducing investment activity. Equity markets suffered as sentiment declined and many of the US and European equity indices fell back to levels last seen around two years previously. The resulting drive for liquidity further compounded the issue as many institutional fund managers were forced to sell holdings in order to meet redemptions.

The underlying prices of gold, silver and platinum all rose during the period (11.1%, 17.6% and 35.7% respectively), as investors sought to hedge against a weak US dollar and the threat of rising inflation on the back of strong commodity and energy prices. Gold and platinum reached all-time highs in March and, while precious metals prices did ease thereafter, they were all strong for the remainder of the period. 

The impact of these events on precious metals equities was mixed. At one end, large multinational companies with strong positive cash flows generally saw their share prices stay flat or return modest gains. At the other end, small pre-production companies typically witnessed a share price decline, sometimes a dramatic one, in response to concerns that they may find it difficult to secure development funding for their projects in the future.

Within the Company's portfolio, the holdings that delivered the better positive returns during the period were typically supported by encouraging news-flow, for example a significant resource upgrade or a substantial step forward in the development of their operations. Such companies included Mano River Resources Inc, Kingsgate Consolidated Limited and Resolute Mining Limited. Elsewhere, the negative sentiment in the market caused the share prices of many of the Company's holdings to decline despite the companies themselves delivering good operational performances. Examples included Great Panther Resources Limited, Olympus Pacific Minerals Inc and Mintails Limited.

Portfolio and Top Ten Holdings

As at 30 June 2008, the portfolio comprised equity holdings in 45 companies, option/warrant positions in four companies (of which three were quoted) and one convertible loan note holding. The unaudited top ten equity holdings at the same date were:  

Company				Value (£)		% Gross Assets
Resolute Mining Limited				1,240,604		8.90%
Mano River Resources Inc				1,140,571		8.10%
Lihir Gold Limited				1,054,411		7.50%
Coeur d'Alene Mines Corporation				874,306		6.20%
Great Panther Resources Limited				755,285		5.40%
Jubilee Platinum PLC				715,500		5.10%
Centamin Egypt Limited				575,000		4.10%
Gold Eagle Mines Limited				441,780		3.20%
Pan African Resources PLC				420,000		3.00%
Geiger Counter Limited				410,000		2.90%
				7,627,457		54.40%

Note: In addition to the equity position above, the Company held Subscription Shares (a form of warrant) in Geiger Counter Limited with a value of £71,250, representing 0.5% of the Gross Assets, as at 30 June 2008.

At 30 June 2008, the Company's portfolio by sector (allocating each investment entirely to the company's primary resource, except as noted below) was:

Investment					% of Portfolio
Gold					63%
Silver					15%
Platinum and Palladium					6%
Diamonds					6%
Uranium					6%
Cash					4%
					100%

Note: The allocation of Coeur d'Alene Mines Corporation, Mano River Resources Inc and Mintails Limited was divided between their respective two main resources.

Gearing

On 20 March 2008, the Company renewed its existing £3.0 million loan agreement with Allied Irish Banks plc for a further year subject to revised terms which are set out in Note 10. The funds drawn down remain at £2.4 million. 

Period since 30 June 2008 and outlook

Precious metals prices have fallen dramatically since 30 June 2008. The first to succumb was the price of platinum which reacted to falling demand from the automotive sector. Later gold, silver and platinum all fell in response to a sharp decline in the oil price (triggered by speculators unwinding their forward positions) and the strengthening of the US Dollar as Sterling and the Euro weakened over fears about inflation and the true extent of the credit crisis in Europe. At the time of writing, the prices of gold, silver and platinum are all lower than their respective levels at the start of 2008. This sharp downturn has in turn knocked precious metal equity prices and, unfortunately with it, the Company's NAV which by 31 August 2008 had fallen to 63.65 pence per share.

The Company's investment performance during the first half of 2008 and since then has been frustrating, but reflects the wider economic downturn. The Board of Directors and the Investment Manager continue to believe that the medium term outlook for precious metals equities is good and that this will drive an increase in the Company's NAV as the credit crises abates and gives rise to a general re-rating of the sector.

Ambrian Asset Management Limited

15 September 2008

Board of Directors' Report

The Company has undergone a number of significant structural changes since the start of 2008. Two of these, changes to the terms of the Warrant Instrument and the Channel Islands Stock Exchange listing, were completed during the period covered by these accounts. In late July 2008, Ambrian Capital plc, which was instrumental in the formation of the Company in 2006, sold its shareholding and significantly reduced its warrant holding.  Most recently, on 15 September 2008, the Investment Management Agreement was novated from Ambrian Asset Management Limited to CQS Cayman Limited Partnership and New City Investment Managers Ltd.

Further details regarding these events is provided below.

Changes to the terms of the Warrant Instrument

The Warrants are constituted by the Warrant Instrument. Warrant holders agreed at a Warrant holders meeting held on 27 May 2008 to change the terms of the Warrant Instrument as follows:

1. Extend the subscription period by one year to 14 November 2009;

2. Reduce the subscription price from 120 pence to 105 pence per Ordinary Share; and

3. Reduce the closing price condition on the Ordinary Shares at which the accelerated call feature can be exercised by the Company from 140 pence or more to 122.5 pence or more. The requirement that the closing price condition must be met for any 20 or more trading days out of a period of 30 consecutive trading days before the accelerated call feature can be exercised was not changed.

The first and second amendments will improve the likelihood of the Warrants expiring in the money (i.e. the Warrant subscription price being less than the then prevailing market price of an Ordinary Share) and with it the Company increasing its funds under management. If all the Warrants were to be so exercised, the gross proceeds received by the Company would be approximately GBP13.6 million and would lead to a reduction of the Company's expense ratio. The third amendment provides holders of Ordinary Shares with a level of dilution protection to reflect the lower subscription price.

Full details of the changes to the Warrant Instrument can be found in the Circular to Warrant holders dated 2 May 2008 and which is available from the documents section of the company's website at: www.gppm.co.uk.

Channel Islands Stock Exchange Listing

The Company's Ordinary Shares and Warrants were admitted to the Official List of the Channel Islands Stock Exchange on 24 June 2008. These new listings will enable purchases of the Ordinary Shares and Warrants in the secondary markets to be qualifying investments for UK ISAs. The Directors hope that this will assist in diversifying the Company's shareholder base. 

The Company filed a wrapper document with the Channel Islands Stock Exchange as part of its admission process. A copy of the wrapper document, which updates the original AIM admission document dated 15 November 2006, is available from the documents section of the company's website at: www.gppm.co.uk.

Ambrian Capital plc's shareholding

Ambrian Capital plc ('Ambrian') was the Company's largest shareholder and warrant holder throughout the first half of 2008 when it owned almost 50 percent of the issued Ordinary Shares and Warrants. On 28 July 2008, Ambrian sold its entire shareholding and over half its warrant holding to a number of new investors. Following the sale, Ambrian held only 2,900,000 Warrants (22.4%) while the largest shareholder held 1,176,064 Ordinary Shares (9.1%). It is hoped that this broader and potentially more liquid investor base will benefit the secondary market for the Company's Ordinary Shares and Warrants. 

Novation of Investment Management Agreement

On 15 September 2008, the Investment Management Agreement was novated from Ambrian Asset Management Limited, a wholly owned subsidiary of Ambrian, to CQS Cayman Limited Partnership and New City Investment Managers Ltd of the CQS Group. CQS Group is a leading alternative asset manager with assets of $9.7bn under management and advice as at 1 September 2008.  New City Investment Managers Limited manages or advises three investment companies specialising in resources.

The Board of Directors would like to thank Ambrian Asset Management Limited for all its work since the Company's launch in November 2006 and to welcome CQS Cayman Limited Partnership as the Company's new Investment Manager. A full statement regarding the Company's progress following this change will be included with the Annual Report and Audited Financial Statements for the year to 31 December 2008.

Board of Directors

15 September 2008

Board Members

Directors of the Company

The Directors have overall responsibility for the Company's activities including the review of its activities and performance. 

The five Directors of the Company, all of whom are non-executive and served during the period under review are listed below:

Malcolm Burne (Chairman), is a former stockbroker and financial journalist with The Financial Times. Malcolm Burne has controlled and managed fund management, venture capital and investment banking companies in London, Australia, Hong Kong and North America. Malcolm has been a director of over 20 companies, many of which have been in the mineral resource and gold exploration fields. In 1997, he founded Golden Prospect plc and was executive chairman until 2007 when the company changed its name to Ambrian Capital plc. In addition, he was executive chairman of the Australian Bullion Company (Pty) Ltd., which at the time was Australia's leading gold dealer and member of the Sydney Futures Exchange. He is currently a director of several other resources companies in Australia, the UK and Canada. 

Kaare Foy, has been a director of Great Panther Resources Limited, a silver exploration and mining company based in Vancouver, since 1994. He is currently chairman of Great Panther and has been heavily involved with its silver and gold projects in North America. He also serves as chief financial officer for Canadian exploration companies Cangold Limited and Monarch Energy Limited. Kaare has been a director of several other gold exploration and gold mining companies over the past 8 years and worked with Malcolm Burne at the Australian Bullion Company (Pty) Ltd. during the 1980's.

Robert King, is a Director of Cannon Asset Management Limited, which he joined in February 2007. Prior to this he was a director of Northern Trust International Fund Administration Services (Guernsey) Limited where he worked from 1990 until February 2007, specialising in the administration of offshore open and closed ended investment funds. He has been in the offshore fund administration industry since 1986. He holds a number of board appointments in other investment companies.

Colin Bird is CEO of Jubilee Platinum PLC, a mining exploration company, director of Tiger Resources Finance plc and chairman of Kiwarra plc - all of which are AIM listed. He has also been chairman of Pan African Resources PLC, an AIM listed gold exploration company, and a director of several other mining exploration companies in Canada. Colin is a chartered mining engineer with mine and technical management experience in Africa, the Middle East and Latin America with commodities such as gold, nickel, copper, platinum and coal.

Dr John Bowles, FGS, FIMMM, FMinSoc, CEng, CGeol, CSci, PGeo, EurGeol, has been a director of Mineral Science Ltd, his geological consultancy business, since 1986, and has also been a director of several other companies including mining exploration company Golden Prospect Mining Co Ltd. Prior to this, John spent 12 years with the British Geological Survey which he left in 1985 after 6 years as a Principal Scientific Officer. John has a PhD from University College London where he spent 6 years as a student and research assistant, having returned to his studies after starting his career as a broadcasting engineer. John specialises in the assessment of platinum, gold and uranium projects.  

All the Directors are independent of the Investment Manager. Ambrian Asset Management Limited is a wholly owned subsidiary of Ambrian Capital plc.

The Directors of the Company announced on 11 September that Mr Colin Bird and Dr John Bowles had resigned from the board of the Company as Independent Non-Executive Directors with effect from 8 September 2008.

Dr John Bowles was Appointed as Consultant to the Company with effect from 9 September 2008.

  Income Statement (Unaudited)

For the period from 1 January 2008 to 30 June 2008

								01.01.08	16.10.06
								to 30.06.08	to 30.06.07
					Notes	Revenue	Capital	Total	Total
Income						£	£	£	£
Investment income						16,928	-	16,928	13,362
Bank interest income					1	9,737	-	9,737	39,200
						26,665	-	26,665	52,562
Net (losses)/gains on financial assets at fair value
through profit or loss					1,6	-	(2,460,147)	(2,460,147)	3,030,700
Gains on foreign exchange					1	-	14,511	14,511	3,703
Total income/(expense)						26,665	(2,445,636)	(2,418,971)	3,086,965
Expenses
Performance fees						-	-	-	(341,904)
Investment Management fees					4	(98,735)	-	(98,735)	(128,858)
Administration fees					4	(32,550)	-	(32,550)	(36,457)
Custodian fees					4	(9,895)	-	(9,895)	(4,029)
Directors' fees					4	(30,000)	-	(30,000)	(35,220)
Audit fees						(4,987)	-	(4,987)	(5,000)
Transaction costs						(6,031)	-	(6,031)	(25,164)
Brokerage fees						(22,500)	-	(22,500)	(26,568)
Directors insurance costs						(2,513)	-	(2,513)	-
Registrar's fees						(6,042)	-	(6,042)	-
CISX fees						(2,900)	-	(2,900)	-
Legal fees						(2,677)	-	(2,677)	-
Printing						(9,853)	-	(9,853)	-
Other expenses						(31,177)	-	(31,177)	(44,589)
Total operating expenses						(259,860)	-	(259,860)	(647,789)
(Loss)/profit before finance costs and tax						(233,195)	(2,445,636)	(2,678,831)	2,439,176
Loan interest						(81,084)	-	(81,084)	(42,789)
Loan commitment fee						(4,338)	-	(4,338)	(732)
Total (loss)/profit for the period before tax						(318,617)	(2,445,636)	(2,764,253)	2,395,655
Withholding tax						(1,745)	-	(1,745)	(2,870)
(Loss)/profit for the period						(£320,362)	(£2,445,636)	(£2,765,998)	£2,392,785
Basic (loss)/earnings per Ordinary Share (pence)					5	(2.48p)	(18.92p)	(21.40p)	18.51p
Diluted (loss)/earnings per Ordinary Share (pence)					5			(10.70p)	9.26p

The 'Total' column of this statement represents the Company's Income Statement, prepared in accordance with IFRS. The supplementary 'Revenue' and 'Capital' columns are both prepared for information purposes only.

All the items in the above statement derive from continuing operations.

Statement of Changes in Equity

For the period from 1 January 2008 to 30 June 2008

					Realised	Unrealised		Other
		Notes	Share	Share	Capital	Capital	Revenue	Distributable
			Capital	Premium	Reserve	Reserve	Reserve	Reserve	Total
			£	£	£	£	£	£	£
Balance as at 31 December 2007			12,927	-	1,458,022	1,158,426	(674,963)	12,422,955	14,377,367
Gain/(loss) on Securities designated at
fair value through profit or loss		12	-	-	130,454	(2,590,601)	-	-	(2,460,147)
Gain on Foreign Exchange		12	-	-	7,128	7,383	-	-	14,511
Loss for the period		12	-	-	-	-	(320,362)	-	(320,362)
Total recognised income and expense
for the period			12,927	-	1,595,604	(1,424,792)	(995,325)	12,422,955	11,611,369
Issue of Ordinary Shares		11	-	-	-	-	-	-	-
Issue costs relating to the
issue of Ordinary Shares		1,11	-	-	-	-	-	-	-
Transfer to Other
Distributable Reserve		11	-	-	-	-	-	-	-
Balance as at 30 June 2008			£12,927	£-	£1,595,604	(£1,424,792)	(£995,325)	£12,422,955	£11,611,369

  For the period from 16 October 2006 to 30 June 2007

					Realised	Unrealised		Other
		Notes	Share	Share	Capital	Capital	Revenue	Distributable
			Capital	Premium	Reserve	Reserve	Reserve	Reserve	Total
			£	£	£	£	£	£	£
Balance as at 16 October 2006			-	-	-	-	-	-	-
Gain on Securities designated at
fair value through profit or loss		12	-	-	810,137	2,220,563	-		3,030,700
Gain on Foreign Exchange		12	-	-	3,275	428	-	-	3,703
Loss for the period		12	-	-	-	-	(641,618)	-	(641,618)
Total recognised income and expense
for the period			-	-	813,412	2,220,991	(641,618)	-	2,392,785
Issue of Ordinary Shares		11	12,927	12,913,779	-	-	-	-	12,926,706
Issue costs relating to the issue of		1,11							-
Ordinary Shares			-	(490,824)	-	-	-	-	(490,824)
Transfer to Other		11
Distributable Reserve			-	(12,422,955)	-	-	-	12,422,955	-
Balance as at 30 June 2007			£12,927	£-	£813,412	£2,220,991	(£641,618)	£12,422,955	£14,828,667

  Balance Sheet (Unaudited)

As at 30 June 2008

				Notes	£	£	£	£
						30.06.2008		31.12.2007
Current Assets
Financial assets at fair value through profit or loss				1,6		13,450,584		16,748,178
Cash and cash equivalents				1,7	880,759		188,464
Receivables				8	1,594		3,254
					882,353		191,718
Current Liabilities
Payables and accruals				9	(321,568)		(162,529)
Loan payable				10	(2,400,000)		(2,400,000)
					(2,721,568)		(2,562,529)
Net Current Liabilities						(1,839,215)		(2,370,811)
Total Assets less Current Liabilities						£11,611,369		£14,377,367
Equity
Ordinary Share Capital				11		12,927		12,927
Share Premium				11		-		-
Revenue Reserve				12		(995,325)		(674,963)
Other Distributable Reserve				11		12,422,955		12,422,955
Other Reserves				12		170,812		2,616,448
Total Equity						£11,611,369		£14,377,367
Number of Ordinary Shares in issue				11		12,926,706		12,926,706
Net Assets Value per Ordinary Share (pence)						89.82 p		111.22 p

The Unaudited Financial Statements on pages 8 to 12 were approved by the Board of Directors on 15 September 2008 and signed on its behalf by:

Director  Malcolm Alec Burne        Director  Robert Paul King

  Cash Flow Statement (Unaudited)

For the period from 1 January 2008 to 30 June 2008

								01.01.2008	16.10.2006
								to 30.06.2008	to 30.06.2007
							Notes	£	£
Cash flows from operating activities
(Loss)/profit for the period								(2,765,998)	2,392,785
Adjustment for:
Losses/(gains) on financial assets at fair value through profit or loss								2,460,147	(3,030,700)
Gain on foreign exchange								(14,511)	(3,703)
Withholding tax								1,745	2,870
Operating cash flows before movements in working capital								(318,617)	(638,748)
Decrease/(Increase) in receivables							8	1,660	(10,573)
Increase in payables and accruals							9	159,039	430,047
Purchase of financial assets at fair value								(1,169,355)	(16,271,288)
Sale of financial assets at fair value								2,006,802	2,118,877
Withholding tax								(1,745)	(2,870)
Net cash used in operating activities								677,784	(14,374,555)
Cash flows from financing activities
Proceeds from issue of Ordinary Shares							11	-	12,926,706
Issue costs relating to issue of Ordinary Shares							11	-	(490,824)
Loan advanced							10	-	2,400,000
Net cash generated from financing activities								-	14,835,882
Net increase in cash and cash equivalents								677,784	461,327
Net cash and cash equivalents at beginning of period								188,464	-
Effect of foreign exchange rate changes								14,511	3,703
Cash and cash equivalents at end of period								880,759	£465,030

Notes to the Unaudited Financial Statements

For the period from 1 January 2008 to 30 June 2008

1. PRINCIPAL ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered to be material in relation to the Company's Financial Statements:

Statement of Compliance

The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) which comprise standards and interpretations by the International Accounting Standards Board (IASB) and the additional disclosures required regarding income and capital within the Income Statement and in accordance with the Investments Trusts Statement of Recommended Practice (SORP) 2005 (Revised).

The same accounting policies have been adopted in these Financial Statements as in the Annual Report and Audited Financial Statements

Adoption of new and revised Standards

In the current period, the Company has adopted all of the new and revised Standards and Interpretations issued by the IASB and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 January 2006. The adoption of these new and revised Standards throughout the period has not resulted in any change to the Company's accounting policies. The Company's early adoption of IFRS 7 Financial Instruments: Disclosures in the previous period led to the expansion of the disclosures provided in the Financial Statements regarding the Company's financial instruments.

At the date of authorisation of these financial statements, the following standards and interpretations, which have not been applied in these financial statements, were in issue but not yet effective:

-	IFRS 2 - Share Based Payments - Amendment relating to vesting conditions and cancellations
	(Effective date - 1 January 2009)
-	IFRS 3 - Business Combinations - Comprehensive revision on applying the acquisition method
	(Effective date - 1 July 2009)
-	IFRS 8 - Operating Segments (Effective date - 1 January 2009)
-	IAS 1 - Presentation of Financial Statements - Comprehensive revision including requiring a
	statement of comprehensive income (Effective date - 1 January 2009)
-	IAS 23 - Borrowing costs - Comprehensive revision to prohibit immediate expensing
	(Effective date - 1 January 2009)
-	IAS 27 - IAS 28 and IAS 31 - Consequential amendments arising from amendments to IFRS 3
	(Effective date - 1 July 2009)
-	IAS 32 - Financial instruments presentation - Amendments relating to puttable instruments and
	obligations arising on liquidation (Effective date - 1 January 2009)
-	IFRIC 13 - Customer Loyalty Programmes (Effective date - 1 July 2008)

The Directors anticipate that the adoption of these Standards in future periods will have no material financial impact on the Financial Statements of the Company.

Basis of preparation

The Financial Statements are presented in Sterling which is also the functional currency of the Company. The Financial Statements have been prepared on a historical cost basis except for the measurement of financial assets and financial liabilities at fair value through profit or loss.

The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

Financial assets

The classification of financial assets at initial recognition depends on the purpose for which the financial asset was acquired and its characteristics.

All financial assets are initially recognised at fair value. All purchases of financial assets are recorded on trade date, being the date on which the Company becomes party to the contractual requirements of the financial asset.

Fair value through profit or loss

A financial asset is classified in this category if it was acquired principally for the purpose of selling in the short term. Derivates are classified as held for trading unless they are designed as hedges. In this case, the derivatives are classified as current assets. These financial assets are carried in the Balance Sheet at fair value with changes in fair value recognised in the Income Statement. 

De-recognition of financial assets

A financial asset (in whole or in part) is derecognised either (i) when the Group has transferred substantially all the risks and rewards of ownership, or (ii) when it has neither transferred nor retained substantially all the risks and rewards and when it no longer has control over the asset or a proportion of the asset, or (iii) when the contractual right to receive cash flows has expired. Any gain or loss on de-recognition is taken to the Income Statement as appropriate.

Impairment of financial assets

An assessment is made at each Balance Sheet Date to determine whether there is objective evidence that a specific financial asset or a group of financial assets may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined by publicly available information such as quoted market prices or by calculating the net present value of future anticipated cash flows. In estimating these cash flows, management makes judgements about a counterparty's financial situation and the net realisable value of any underlying collateral.

Financial assets are grouped on the basis of similar credit risk characteristics that are indicative of the debtors' ability to pay all amounts due according to the contractual terms and the collective impairment provision is estimated for any such group where credit risk characteristics of the group of financial assets has deteriorated. Factors such as any deterioration in country risk, industry performance, technological obsolescence as well as identified structural weaknesses or deterioration in cash flows are taken into consideration and the amount of the provision is based on the historical loss pattern within each group, adjusted to reflect current economic change.

Financial liabilities

The classification of financial liabilities at initial recognition depends on the purpose for which the financial liability was issued and its characteristics. All financial liabilities are initially recognised at fair value net of transaction costs incurred. All purchases of financial liabilities are recorded on trade date, being the date on which the Company becomes party to the contractual requirements of the financial liability.

Fair value through profit or loss

This category comprises only 'out of the money' interest rate and foreign exchange derivatives. They are carried in the Balance Sheet at fair value with changes in fair value recognised in the Income Statement. 

Other financial liabilities

After initial measurement these liabilities are subsequently measured at amortised cost using the effective interest rate method. The amortisation is included in 'Other expenses' in the Income Statement.

De-recognition of financial liabilities

A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires or is cancelled. Any gain or loss on de-recognition is taken to the Income Statement.

Determination of fair value

The fair value of financial assets and liabilities that are quoted in an active market is determined by reference to market bid and offer prices respectively at the close of business on the Balance Sheet date. The fair value of liabilities with a demand feature is the amount payable on demand. The fair value of interest-bearing financial assets and liabilities that are not quoted in an active market and are not payable on demand is determined by discounting expected cash flows using the current market interest rates for financial instruments with similar terms and risk characteristics. For equity investments that are not quoted in an active market, a reasonable estimate of the fair value is determined by reference to the current market value of other instruments that are substantially similar, or is determined using net present value techniques. The fair value of unquoted derivatives is determined either by discounted cash flows or option-pricing models.

Offsetting financial instruments

Financial assets and financial liabilities are only offset and the net amount reported in the Balance Sheet and Income Statement when there is a currently enforceable legal right to offset the recognised amounts and the Company intends to settle on a net basis or realise the asset and liability simultaneously.

Interest income and expense

Interest income and interest expense are recognised within the Income Statement using the effective interest rate method. The effective interest rate is the rate that exactly discounts the future cash inflows and outflows of a financial instrument through its expected life.

The calculation includes all incidental fees, discounts and transaction costs, these cash flows are integral in calculating the Income Statement charge. Transaction costs are incremental costs that are directly attributable to the purchase or disposal of a financial instrument.

Income

All income is accounted for on an accruals basis and is recognised in the Income Statement. 

Expenses

Expenses are accounted for on an accruals basis. Expenses are charged to the Income Statement as items of a revenue nature. Expenses incurred on the acquisition of investments at fair value through the profit or loss are also charged to the Income Statement, as items of a capital nature.

Share Issue Expenses

There are no share issue costs during the period (30 June 2007: £490,824). These have been treated as a deduction from equity in the Statement of Changes in Equity, and written off against the Share Premium Account.

Cash and cash equivalents

Cash comprises cash in hand, overdrafts and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant changes in value.

Capital Reserves

Gains and losses recorded on the realisation of investments and realised exchange differences of a capital nature are accounted for in the Realised Capital Reserve. Unrealised gains and losses recorded on the revaluation of investments held at the period end and unrealised exchange differences of a capital nature are accounted for in the Unrealised Capital Reserve.

Translation of foreign currency 

Items included in the Company's Financial Statements are measured using the currency of the primary economic environment in which it operates ('the functional currency'). The currency in which the Company's Shares are denominated and in which its operating expenses are incurred is Sterling. The Company's investments are denominated in many different currencies. Accordingly the Directors regard Sterling as the functional currency. The Company has also adopted Sterling as its presentational currency.

Transactions in currencies other than the functional currency are recorded using the exchange rate prevailing at the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and those from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement. Translation differences on non-monetary items such as financial assets held at fair value through profit or loss are reported as part of net gains or losses on financial assets through profit or loss in the Income Statement.

Transactions in currencies other than the functional currency are recorded using the exchange rate prevailing at the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and those from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement.

Translation differences on non-monetary items such as financial assets held at fair value through profit or loss are reported as part of net gains or losses on financial assets through profit or loss in the Income Statement.

Segmental reporting

A business segment is a distinguishable component of the Company that is engaged in providing products and services and that is subject to risks and returns that are different from those of other business segments. The Board of Directors is of the opinion that the Company is organised in one main business segment, namely the management of the Company's investments in order to achieve the Company's objectives.

2. TAXATION

The amounts disclosed as taxation in the Statement of Total Return of the Company relate solely to withholding tax suffered at source on income. The Company is exempt from taxation in Guernsey under the provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 and has paid an annual exemption fee of £600.

3. DISTRIBUTION TO SHAREHOLDERS

The Directors do not expect income (net of expenses) to be significant and do not currently expect to declare any cash dividends. In the event that net income is significant, the Directors may consider the distribution of net income in the form of cash dividends. To the extent that any cash dividends are paid, they will be paid in accordance with any applicable laws and the regulations of the Alternative Investments Market of the London Stock Exchange and of the Channel Islands Stock Exchange.

4. RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

The Directors are responsible for the determination of the investment policy of the Company and have overall responsibility for the Company's activities. All Directors are entitled to remuneration for their services of £12,000 per annum. During the period ended 30 June 2008, directors fees of £30,000 were charged to the Company (30 June 2007: £35,220) and £15,000 was payable at the period end (31 December 2007: £15,000). All Directors are non-executive.

Malcolm Burne holds 75,000 Ordinary Shares and 25,000 Warrants (31 December 2007: 25,000 Ordinary Shares and 25,000 Warrants), Robert King holds 20,000 Ordinary Shares (31 December 2007: 20,000 Ordinary Shares) and John Bowles holds 2,814 Ordinary Shares (31 December 2007: None). 

No other Director holds any Ordinary Shares or Warrants in the company.

The following contracts, not being contracts in the ordinary course of business, have been entered into by the Company and are, or may be material:

Investment Manager

The Company's investment manager for the period under review was Ambrian Asset Management Limited (the 'Investment Manager'). The Investment Manager is entitled to an annual management fee, payable monthly in arrears, of 1.5 per cent. of Net Asset Value.

The Investment Manager is also entitled to reimbursement of certain expenses incurred by it in connection with its duties. During the period ended 30 June 2008 investment management fees of £98,735 were charged to the Company (30 June 2007: £128,858) and £14,333 was payable at the period end (31 December 2007: £18,442).

The Investment Manager is also entitled to receive an annual Performance Fee equal to 20% of the increase in the Company's Net Asset Value on the last Trading Day of each calendar year, above an annual hurdle for growth of 8% and subject to a high water mark. During the period ended 30 June 2008 no performance fees had accrued to the Company (31 December 2007:£92,400).

Administrator

The Company's administrator is Northern Trust International Fund Administration Services (Guernsey) Limited (the 'Administrator'). In consideration for the services provided by the Administrator under the Administration and Secretarial Agreement, the Administrator is entitled to receive from the Company an annual fee of 0.10 per cent of the average monthly Net Asset Value of the Company calculated at each month end and paid quarterly, subject to a minimum fee of £37,500 per annum. The Company will also pay a corporate governance fee of £25,000 per annum. During the period ended 30 June 2008 administration fees of £32,550 were charged to the Company (30 June 2007: £36,457) and £15,582 was payable at the period end (31 December 2007: £15,625).

Custodian

The Company's custodian is Northern Trust (Guernsey) Limited (the 'Custodian'). In consideration for the services provided by the Custodian under the Custodian Agreement, the Custodian is entitled to receive an annual custody fee of 0.10% of the average Net Asset Value of the Company calculated at each month end and paid quarterly. In addition the Company will pay custody transaction charges at rates depending on the number of trades affected and the location of securities held. During the period ended 30 June 2008 custodian fees of £9,895 were charged to the Company (30 June 2007: £4,029) and £956 was payable at the period end (31 December 2007: £1,811).

5. BASIC AND DILUTED EARNINGS PER ORDINARY SHARE

Basic earnings per Ordinary Share is calculated by dividing the net profit for the period of (£2,765,998) (30 June 2007: £2,392,785) by the weighted average number of Ordinary Shares outstanding during the period. As there has been no additional issue of Ordinary Shares during the period, the weighted average number of Ordinary Shares is 12,926,706.

Diluted earnings per Ordinary Share is calculated by dividing the net profit for the period of (£2,765,998) (30 June 2007: £2,392,785) by the weighted average number of Ordinary Shares outstanding during the period adjusted for the effects of the dilutive Warrants. The diluted weighted average number of Ordinary Shares as at 30 June 2008 was 25,853,412 Shares (30 June 2007: 25,853,412).

6. FINANCIAL INSTRUMENTS

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of its financial assets and liabilities are disclosed in Note 1. The following table analyses the carrying amounts of the financial assets and liabilities by category as defined in IAS 39.  

Categories of financial instruments:																						30.06.2008
																						% of net assets
																		Fair Value				attributable to
																		£				shareholders
Financial assets designated as at fair value through profit or loss
		Listed equity securities																13,345,103				114.93
		Listed debt securities																105,481				0.91
																		£13,450,584				115.84
Financial instruments designated as loans and receivables
		Cash and cash equivalents																880,759				7.59
		Receivables																1,594				0.01
																		£882,353				7.60
Financial instruments designated as other financial liabilities
		Payables																(321,568)				(2.77)
		Loan payable																(2,400,000)				(20.67)
																		(£2,721,568)				(23.44)
Net gains and losses on financial assets at fair value through profit or loss:
																						01.01.08
																						to 30.06.08
																						£
Realised gains on financial assets
designated as at fair value through profit or loss																						130,454
Net unrealised losses on financial assets
designated as at fair value through profit or loss																						(2,590,601)
Net losses on financial assets
at fair value through profit or loss																						(£2,460,147)
																							31.12.2007
																							% of net assets
																			Fair Value				attributable to
																			£				shareholders
Financial assets designated as at fair value through profit or loss
				Listed equity securities															16,538,656				115.03
				Listed debt securities															209,522				1.46
																			£16,748,178				116.49
Financial instruments designated as loans and receivables
				Cash and cash equivalents															188,464				1.31
				Receivables															3,254				0.02
																			£191,718				1.33
Financial instruments designated as other financial liabilities
				Payables															(162,529)				(1.13)
				Loan payable															(2,400,000)				(16.69)
																	(£2,562,529)						(17.82)

Net gains and losses on financial assets at fair value through profit or loss:

16.10.2006 to

30.06.2007

£

Realised gains on financial assets

designated as at fair value through profit or loss

810,137

Net unrealised gains on financial assets

designated as at fair value through profit or loss

2,220,563

Net gains on financial assets

at fair value through profit or loss

£3,030,700

7. CASH AND CASH EQUIVALENTS

For the purpose of the Cash Flow Statement, cash and cash equivalents comprise the following

					30.06.2008		31.12.2007
					£		£
Cash at bank					£880,759		£188,464

8. RECEIVABLES

					30.06.2008		31.12.2007
					£		£
Dividend income receivable					-		1,527
Bank Interest receivable					1,594		1,727
					£1,594		£3,254

The Directors consider that the carrying amount of receivables approximate their fair value.

9. PAYABLES AND ACCRUALS

							30.06.2008	31.12.2007
							£	£
Due to broker							260,000	-
Administration fee payable (Note 4)							15,582	15,625
Directors' fees payable (Note 4)							15,000	15,000
Investment management fee payable (Note 4)							14,333	18,442
Other accruals							9,671	8,198
Audit fee payable							5,287	5,700
Custodian fee payable (Note 4)							956	1,811
Loan commitment fee payable							739	747
Performance fee accrual (Note 4)							-	92,400
Loan interest payable							-	4,606
							£321,568	£162,529

The Directors consider that the carrying amount of payables approximate their fair value.

10. LOAN PAYABLE

						30.06.2008		31.12.2007
						£		£
Loan amount drawn						£2,400,000		£2,400,000

Allied Irish Banks plc has made available to the Company a multicurrency revolving loan facility of up to £3 million. The Company withdrew £2,400,000 on 23 March 2007. Loan interest is charged at Libor plus a margin of 1.1% per annum plus mandatory cost (if any) which is the percentage rate per annum calculated by the Bank. The interest rate as at 30 June 2007 was 6.45%. The loan incurs a commitment fee of 0.45% per annum on the daily unutilised portion of the loan facility, payable quarterly in arrears. 

An arrangement fee of £3,000 was also charged. Each amount withdrawn is repayable on the last day of its interest period which is agreed between the Company and the Bank. If the Company fails to select an interest period for a withdrawal, the interest period is 3 months.

The Company shall ensure that at all times net borrowings will not exceed 30% of adjusted Net Asset Value and borrowings will not exceed 100% of the value of its Eligible Assets. Eligible Assets are investments in companies that have a market capitalisation of more than £100 million and are listed on the leading stock exchanges of countries with long term foreign currency credit ratings of at least AA by Standard & Poor's or its equivalent by Moody's or Fitch.

11. SHARE CAPITAL, SHARE PREMIUM AND DISTRIBUTABLE RESERVE

Authorised Share Capital														£
200,000,000 Ordinary Shares of £0.001 par value														£200,000
200,000,000 Warrants of no par value														£-
																Other
								No. of				Share			Share	Distributable
								Shares				Capital			Premium	Reserve
Issued and Fully Paid Share Capital												£			£	£
Equity Shares
Ordinary Shares of £0.001 each at inception
As at 1 January 2007								12,926,706				12,927			-	12,422,955
Issue costs								-				-			-	-
Transferred to Other Distributable Reserves -												-			-	-
As at 30 June 2008								12,926,706				£12,927			£-	£12,422,955
																	Other
												Share			Share		Distributable
									No. of			Capital			Premium		Reserve
Issued and Fully Paid Share Capital Shares												£			£		£
Equity Shares
Ordinary Shares of £0.001 each at inception
Issued during the period									12,926,706			12,927			12,913,779		-
Issue costs									-			-			(490,824)		-
Transferred to Other Distributable Reserve -												-			(12,422,955)		12,422,955
As at 31 December 2007									12,926,706			£12,927			£-		£12,422,955

The Company is a closed ended investment company with an unlimited life. The Ordinary Shares are not puttable instruments. As such they are not required to be classified as debt under IAS 32 because redemption is conditional upon certain market conditions and/or Board approval.

IFRIC Interpretation 2: 'Members' Shares in Co-operative Entities and Similar Instruments' paragraph 7 states 'Members' share is equity if the entity has an unconditional right to refuse redemption of the members' share.' 

As defined in the Articles of Association, redemption of Ordinary Shares is at the discretion of the Directors, therefore the Ordinary Shares have been classified as equity.

Ordinary Shareholders are entitled to one vote for each Ordinary Share held and are entitled to receive any distributions declared by the Company. On a winding up, the Ordinary Shareholders shall be entitled, pro rata to their holdings, to all the assets of the Company available for distribution to shareholders.

No additional Warrants were issued during the period (31 December 2007: 12,926,706). Warrant holders are entitled to subscribe for Ordinary Shares on any Subscription Date at a subscription price of 105p per Ordinary Share. All Warrants can be exercised at any time within a thirty-six month period of the date of the Warrant Agreement which was 15 November 2006.

By way of a special resolution passed on 8 November 2006, it was resolved that the amount standing to the credit of the share premium account of the Company be cancelled and the amount so cancelled be credited to Distributable Reserve. This resolution was approved by the Royal Court of Guernsey on 17 November 2006.

No distributions were made from the Distributable Reserve during the period.

12. RESERVES

				01.01.2008		Movement		30.06.2008
				£		£		£
Gains on investments sold				1,455,345		130,454		1,585,799
Movement in unrealised
losses on investments				1,159,447		(2,590,601)		(1,431,154)
Gains on foreign exchange				1,656		14,511		16,167
Net expenditure for the period				(674,963)		(320,362)		(995,325)
				£1,941,485		(£2,765,998)		(£824,513)
				16.10.2006		Movement		31.12.2007
				£		£		£
Gains on investments sold				-		1,455,345		1,455,345
Movement in unrealised
gains on investments				-		1,159,447		1,159,447
Gains on foreign exchange				-		1,656		1,656
Net expenditure for the period				-		(674,963)		(674,963)
				£-		£1,941,485		£1,941,485

13. STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES

										30.06.2008	31.12.2007
										£	£
Movement due to issues and redemptions of shares
Issue of Ordinary Shares										-	12,926,706
Costs of issue of Ordinary Shares										-	(490,824)
										-	12,435,882
(Decrease)/Increase in net assets attributable to Holders of Ordinary Shares										(2,765,998)	1,941,485
Net Assets attributable to Holders of Ordinary Shares as at beginning of period										14,377,367	-
Net Assets attributable to Holders of Ordinary Shares as at end of period										£11,611,369	£14,377,367

14. FINANCIAL RISK MANAGEMENT

The Company is exposed to a variety of financial risks as a result of its activities. These risks include credit risk, liquidity risk and market risk (including currency risk, fair value interest rate risk and price risk). The Company's risk management policies, approved by the Board of Directors, seek to minimise the potential adverse effects of these risks on the Company's financial performance. 

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

As at the date of the Balance Sheet, financial assets exposed to credit risk comprise a single debt instrument as disclosed in Note 6 as well as bank balances and receivables. It is in the opinion of the Board of Directors that the carrying amount of these financial assets represents the maximum credit risk exposure as at the date of the Balance Sheet.   

As at 30 June 2008 there were no debt instruments past due.

The Board of Directors has a policy in place of spreading the aggregate value of transactions concluded amongst approved counterparties with an appropriate credit quality. The Company's exposure and the credit ratings of its counterparties are continuously monitored by management. The following table illustrates the credit concentration by institution:

							30.06.2008	31.12.2007
							£	£
Debt securities:
Crescent Gold Convertible loan							105,481	209,522
Cash and cash equivalents:
Northern Trust (Guernsey) Limited							880,759	188,464
Other receivables							1,594	3,254
Total assets at credit risk							£987,834	£401,240

Liquidity risk

Whilst most of the Company's financial assets are listed securities which are considered readily realisable as they are listed on major recognised stock exchanges, some of the financial assets held by the Company may not be listed on recognised stock exchanges and so will not be readily realisable and their marketability may be restricted. The Company might only be able to liquidate these positions at disadvantageous prices, should the Investment Manager determine, or it become necessary, to do so.

The following table details the Company's liquidity analysis for its financial liabilities. The table has been drawn up based on the undiscounted net cash flows on the financial liabilities that settle on a net basis and the undiscounted gross cash flows on those financial liabilities that require gross settlement.

			Less than		3 months	1 year	30.06.2008
			1 month	1-3 months	to 1 year	to 5 years	Total
			-	-	-	-	-
Gross settled:
Borrowings			-	2,400,000	-	-	2,400,000
Performance fee accrual			-	-	-	-	-
Investment management
fee payable			14,333	-	-	-	14,333
Administration fee payable			15,582	-	-	-	15,582
Directors' fees payable			15,000	-	-	-	15,000
Audit fee payable			-	-	5,287	-	5,287
Due from broker			260,000	-	-	-	260,000
Other payables			1,695	-	9,671	-	11,366
			£306,610	£2,400,000	£14,958	£-	£2,721,568

			Less than		3 months	1 year	31.12.2007
			1 month	1-3 months	to 1 year	to 5 years	Total
			£	£	£	£	£
Gross settled:
Borrowings			-	2,400,000	-	-	2,400,000
Performance fee accrual			-	92,400	-	-	92,400
Investment management
fee payable			18,442	-	-	-	18,442
Administration fee payable			15,625	-	-	-	15,625
Directors' fees payable			15,000	-	-	-	15,000
Audit fee payable			-	-	5,700	-	5,700
Other payables			1,811	-	13,551	-	15,362
			£50,878	£2,492,400	£19,251	£-	£2,562,529

The Investment Manager manages liquidity on a daily basis. The Company's overall exposure to liquidity risk is monitored by the Board of Directors on a quarterly basis.

The Company expects to meet its other obligations for operating cash flows at the Balance Sheet date. The Company expects to maintain current debt to equity ratio within 30% of NAV. 

Market risk

The Company's activities expose it primarily to the market risks of changes in market prices, interest rates and foreign currency exchange rates.

Price risk

Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The Company is exposed to market price risk arising from its financial assets designated as at fair value through profit or loss. The performance of these financial assets will be affected by the performance of the investee companies. The exploration, development and production of metal and mineral deposits involves significant uncertainties and the investee companies will be subject to all the hazards and risks normally encountered in such activities. Many of these are difficult to predict and are outside the control of the investee companies. They include, amongst others, issues relating to the environment, the climate, the geopolitical environment, local and international regulatory requirements, licensing terms, planning permission, unexpected geological formations, rock falls, flooding, pollution, legal liabilities, the availability and reliability of plant and equipment, the scaling-up of operations, the reliance on key individuals, local finance and tax regimes, foreign currency repatriation, capital and budget constraints, contractors and suppliers, local employment regulations and practices, employment unions and the availability of suitable labour. In addition, there is often no guarantee that the estimates of quantities and grades of metals and minerals disclosed by investee companies will be available for extraction.

The Company's financial assets are exposed to market price fluctuations which are monitored by the Investment Manager in pursuance of the investment objectives and policies. Adherence to investment guidelines and to investment and borrowing powers set out in the Placing and Offer for Subscription document mitigates the risk of excessive exposure to any particular type of security or issuer. However, with respect to the investment strategy utilised by the Company there is always some, and occasionally some significant, degree of market risk.

Price sensitivity

The value of the Company's financial assets had a sensitivity of £672,529 (31 December 2007: £837,409) to a 5% increase or decrease in the market prices with other variables being held constant as at 30 June 2008. A 5% change is the sensitivity rate used when reporting price risk internally to key management personnel.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company is exposed to interest rate risk as it has a loan, the drawn down component of which is subject to interest calculated as a function of LIBOR (see Note 10), and cash and cash equivalents which are invested at short term rates. The Investment Manager manages the Company's exposure to interest rate risk on a daily basis in accordance with the Company's investment objective and policies. The Company's overall exposure to interest rate risk is monitored on a quarterly basis by the Board of Directors.

Interest rate sensitivity

The sensitivity analysis below has been determined based on the Company's exposure to interest rates for interest bearing assets and liabilities at the date of the Balance Sheet and the stipulated change taking place at the beginning of the financial period and held constant throughout the reporting period in the case of instruments that have floating rates. 

If interest rates had been 25 basis points higher or lower and all other variables had been held constant, the Company's net assets attributable to holders of Ordinary Shares for the period to 30 June 2008 would have been £2,579 (31 December 2007: £2,851) lower or higher due to the change in the interest payable on the bank loan and the interest receivable on cash and cash equivalents.

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. The presentation currency of the Company is Sterling. The Company's financial assets are currently denominated in various currencies other than Sterling and the Company may hold other financial instruments, the price of which may be determined with reference to currencies other than Sterling. 

To the extent that these financial instruments are unhedged, or are not adequately hedged, the value of the Company's financial instruments may fluctuate with exchange rates as well as with price changes in various local markets and currencies. The value of the financial assets may therefore be affected unfavourably by fluctuations in currency rates and exchange control regulations. The Investment Manager has the power to manage exposure to currency movements by using hedging instruments. The Investment Manager's treatment of currency transactions is set out in Note 1 to the Financial Statements under 'Translation of foreign currency'.

There were no hedging instruments held at 30 June 2008 (31 December 2007: None).

The carrying amount of the Company's foreign currency denominated financial assets and financial liabilities at the date of the Balance Sheet is as follows:

			30.06.2008			31.12.2007
			Assets		Liabilities	Assets		Liabilities
			£		£	£		£
Australian Dollar (AUD)			4,972,126		-	5,505,547		-
Canadian Dollar (CAD)			4,079,675		-	4,655,825		(382)
United States Dollar (USD)			1,210,383		-	2,992,876		-
Euros (EUR)			5		-	3		-
			10,262,189		-	13,154,251		(382)

Foreign currency sensitivity

The Company is mainly exposed to AUD, CAD and USD.

The following table details the Company's sensitivity to a 5% increase or decrease in Sterling against the relevant foreign currencies. A 5% change is the sensitivity rate used when reporting foreign currency risk internally to key management personnel. The sensitivity analysis includes only outstanding foreign currency denominated financial assets and financial liabilities and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number indicates an increase in net assets attributable to holders of Ordinary Shares where Sterling weakens against the relevant currency and a negative number indicates a decrease in net assets where Sterling strengthens against the relevant currency.

							30.06.2008
						AUD	CAD		USD
						£	£		£
Change in net assets in response to a						261,691	214,720		63,704
5% change in foreign currency rates						(236,768)	(194,270)		(57,637)
							31.12.2007
						AUD	CAD		USD
						£	£		£
Change in net assets in response to a						289,766	245,023		157,520
5% change in foreign currency rates						(262,169)	(221,688)		(142,518)

15. CONTINGENT LIABILITIES

There were no contingent liabilities at the Balance Sheet date.

16. SUBSEQUENT EVENTS

No significant events have occurred in respect of the Company that may be deemed relevant to the accuracy of these Financial Statements. 

17. CONTROLLING PARTY

The issued shares of the Company are owned by numerous parties and therefore, in the opinion of the Directors, there is no immediate or ultimate controlling party of the Company

Substantial Interests

Significant Shareholders

The Company has received notification that the following Shareholders had a substantial interest of 3% or more of the Company's issued share capital as at 6 August 2008:

						% of issued share capital
City Natural Resources High Yield Trust PLC						9.10%
City of Bradford Metropolitan District Council						8.51%
South Yorkshire Pensions Authority						8.51%
AXA Investment Managers UK Limited						8.25%
Artemis Investment Management Limited						7.74%
New Star Asset Management						5.80%
Clients of the Bank of New York (Nominees) Limited						4.48%
Clients of Pershing Keen Nominees Limited KSCLT Account						3.82%
Allianz Cornhill Insurance PLC						3.09%

Significant Warrant Holders

The Company has received notification that the following Shareholders had a substantial interest of 3% or more of the Company's warrants as at 29 July 2008:

						% of warrants
Clients of Pershing Keen Nominees Limited PSL981 Account						23.59%
Ambrian Capital plc						22.43%
AXA Investment Managers UK Limited						8.25%

Directors

Registered Office

Malcolm Alec Burne (Chairman)

Trafalgar Court

Kaare Glenne Foy

Les Banques

Robert Paul King

St Peter Port

Colin Bird (resigned 08/09/2008)

Guernsey

John Frederick William Bowles (resigned 08/09/2008)

(All Directors were appointed on 16 October 2006 and are non-executive)

Management and Administration

Investment Manager

Legal Adviser (Guernsey)

Ambrian Asset Management Limited

Ogier

Old Charge House

Ogier House

128 Queen Victoria Street

St Julian's Avenue

London EC4V 4BJ

St Peter Port

Guernsey GY1 1WA

Auditors

Channel Islands

BDO Novus Limited

PO Box 180

Legal Adviser (UK)

Elizabeth House

Lawrence Graham LLP

St. Peter Port

4 More London Riverside

Guernsey GY1 3LL

London SE1 2AU

Administrator, Secretary and Registrar

Custodian and Principal Bankers

Northern Trust International Fund

Northern Trust (Guernsey) Limited

Administration Services (Guernsey) Limited

PO Box 71

PO Box 255

Trafalgar Court

Trafalgar Court

Les Banques

Les Banques

St. Peter Port

St. Peter Port

Guernsey GY1 3DA

Guernsey GY1 3QL

Nominated Adviser and Joint Broker

CREST Agent

to the Company

Capita Registrars (Guernsey) Limited

Collins Stewart Europe Limited

1 Le Truchot

9th Floor

St. Peter Port

88 Wood Street

Guernsey GY1 4AE

London EC2V 7QR

Joint Broker to the Company

Ambrian Partners Limited

Old Charge House

128 Queen Victoria Street

London EC4V 4BJ

Further details are available on the Company's website - www.gppm.co.uk

 

END

 

 

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