Half Yearly Report

RNS Number : 7933T

URU Metals Limited

25 November 2013

 



25 November 2013

URU Metals Limited

("URU" or "the Company")

Report and Accounts for the six months ended 30 September 2013

URU Metals Limited, (AIM:URU), an explorer and developer of base metals and uranium, today announces its consolidated interim results for the six months ended 30 September 2013.  

Financial Highlights for the period:

·      Total comprehensive loss reduced to US$242,000 (2012: US$5.7 million)

·      Administrative expenses reduced to US$445,000 (2012: US$860,000)

·      Net cash used in investing facilities increased to US$1.5million (2012: US$226,000)

·      Basic Loss per share 0.012 cents (2012: 4.91 cents)

Operational Highlights

·      Acquisition of Swedish Company, Svenska Skifferoljeaktiebolaget ("SSOAB") in Sweden

·      Announced Competent Person's Report ("CPR") for Närke Oil-Uranium project confirms projects potential to become  one of the world's top 5 uranium producers

·      Disposed of non-core assets and rebalanced portfolio

·      SAN-Nickel JV - Entered into an agreement with Southern African Nickel

Commenting on the Company's interims, Mr. Roger Lemaitre, CEO and Executive Director of URU said:

"We have reduced our administrative expenses by half, streamlining our operations whilst increasing the money spent on investments. We now have three quality projects in our portfolio and look forward to updating the market on their progress in the not too distant future."

The Interim Report and Accounts will be posted to shareholders shortly and will be available from the company's website: www.urumetals.com .

For more information, please contact:

URU Metals Limited Roger Lemaitre, CEO	Telephone: + 1 416 892 2870
WH Ireland Limited (Nominated Adviser and Broker) Adrian Hadden/James Bavister	[phone]
Ribeiro Communications Ana Ribeiro	[phone]

Chairman's Statement

I am pleased to present to our shareholders, the condensed consolidated interim report of the Group for the six months ended 30 September 2013 (the "Period").

The past six months have continued to be very difficult for the mineral industry. However, URU has been able to take advantage of the challenging operating environment to re-organize the Company and acquire new quality assets for the future benefit of shareholders.

HIGHLIGHTS

The highlights of our progress during the period, and to the date of this report, can be summarised as follows:

ACQUISITION OF THE NÄRKE OIL-URANIUM PROJECT

In May, URU acquired 100% of the Swedish Company, Svenska Skifferoljeaktiebolaget ("SSOAB"), the holders of six exploration licenses covering Alum Shale rocks approximately 150 km west of Stockholm, Sweden for a US$300,000 cash payment and the issuing of 17 million shares of URU to the vendors.

The Närke Oil-Uranium Project licenses overlie oil shale rocks that are known to contain substantial quantities of uranium. A small portion of the Närke Project was mined for oil by the Swedish government between the 1940s and 1960s. The project has the potential to become a significant oil producer, and through by-product extraction one of the largest uranium deposits in the world today.

A small sampling program in June that collected samples from the old government quarries indicated that significant quantities of uranium, molybdenum, and vanadium are present in the host rocks. In addition , URU was pleased to learn that the laboratory results indicated higher than expected hydrocarbon yields from our samples.

URU has initiated a preliminary metallurgical test ("PMT") program under which 200 kg of rock will be collected from the old quarries for oil recovery and metallurgical testing at SGS Lakefield laboratories. The goal of the PMT program is to identify the optimal economic method for recovering oil and metals from the Närke Project rocks in advance of the Company investing in a large resource delineation program.

Nueltin Lake Gold-Uranium Project

After acquiring an option in the Nueltin Lake Gold-Uranium Project in February, your Company has been working hard to acquire the necessary permits to conduct exploration activities. Despite our best efforts, the last necessary permit was only received on 30 September 2013. Due to the onset of winter conditions at Nueltlin Lake, URU will be unable to mount our proposed drill program until April or June 2014.

Due to these permitting delays, URU and Cameco have agreed to extend the first option work expenditure of CAD $550,000 from the original deadline on 31 December 2013 to 31 August, 2014, which will allow us to complete the necessary field work to satisfy requirements of the option agreement.

SAN Nickel Joint Venture

Our joint venture partner Southern African Nickel continued to work through the arbitration process with its joint venture partner Umnex Mineral Holdings. This arbitration has delayed development at the Zebediela Nickel Project. URU is not involved directly in this arbitration. Each party has completed its pre-hearing legal procedures, and the arbitration will be heard by the arbitrator prior to year-end.

Negotiations between URU, Southern African Nickel, and Umnex Mineral Holdings have restarted with the objective of coming to a mutually-beneficial solution prior to the commencement of the arbitration hearings.

Niger

Over the past year, URU has been rebalancing its portfolio of assets. With the addition of the Närke Oil-U Project in Sweden, the Nueltin Gold-Uranium Project in Canada, and our continued involvement in the SAN Nickel Joint Venture in South Africa, the Company has three significant projects that are poised to increase shareholder value as they are developed.

TheBoard believes that all of URU's current resources should be steered towards the development of these three projects. For the past year, URU has been actively searching for a partner to share the risk of exploration on our Niger uranium assets, and have even contemplated an outright sale of our Niger subsidiary to several parties. This extensive search has failed to yield any potential partners or purchasers. Thus, the Company has closed its Niger operations, and returned our exploration licenses back to the Niger Ministry of Mines.

UrAmerica Sale

On 4 April 2013 the Company's sold its entire share holdings of UrAmerica Plc. for £200,000 to Huntress (CI) Nominees Limited.

UrAmerica is a private company exploring for uranium in Argentina. The Company's shareholding, purchased in 2008, represented approximately a 7.36% equity interest in UrAmerica.

Annual General Meeting

The Group held its Annual General Meeting on 26 August 2013 and we were pleased to announce that all resolutions were duly passed.

Outlook

At the reporting date, the Group had cash resources of US$ 874,000, and no borrowings.

During the period under review URU's share price declined from just over 2.62p to 1.88p, a trend in keeping with many other junior exploration companies.

Despite the challenging environment, URU continues to believe that the long-term fundamentals of the base minerals industries remains positive and will be working hard in the coming year to unlock the value of our three projects to our shareholders. URU believes that supply-demand fundamentals of the uranium industry are out of equilibrium and that a positive correction is required in uranium prices to meet future nuclear demand. URU is well-positioned to take advantage of the upturn in uranium.

Principal Risks and Uncertainties
The group considers strategic, operational and financial risk and identifies actions to mitigate those risks. These risk profiles are updated at least annually. The principal risks and uncertainties facing the Group have not changed from those described in our most recent annual report, for the year ended 31 March 2013, and are summarised below:

Category	Risk
Strategic	Mineral Reserve and Resource estimates
Financial	Commodity Prices
	Costs and capital expenditure
	Liquidity
Operational	Project Execution
Personnel	Management
	Skills Availability
	Health and Safety
Environmental	Remediation
External	Political, Legal and Regulatory Development
	Community Relations

The Group does not expect these risks and uncertainties to differ materially in the next six months.

Related Party Transactions

Transactions with related parties in the period have been limited to salary paid to the CEO, fees paid to officers and directors of the company, office rent to a shareholder at market rates, and amounts advanced to subsidiaries to fund their operations as set out in Note 22. No share options have been issued in the period.

There have been no changes in the related parties transactions described in the last annual report that could have a material effect on the financial position or performance of the enterprise in the period.

Forward Looking Statements

Certain statements in this interim report are forward-looking. Although the group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

The group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

David Subotic

Non-Executive Chairman

19 November 2013

Consolidated Statements of Financial Position

Unaudited US$'000	Note	As at 30 September 2013	As at 31 March 2013
ASSETS
Non-current assets
Plant and equipment		24	12
Intangible assets	11	1,579	-
Investment in jointly controlled asset	12	1,580	1,527
		3,183	1,539
Current assets
Receivables	8, 13	61	35
Cash and cash equivalents	21	874	1,882
		935	1,917
Assets of disposal group	9b	1	-
Total assets		4,119	3,456
EQUITY AND LIABILITIES
Equity and reserves
Share capital and premium	14	47,524	46,857
Reserves	15	2,241	2,121
Accumulated deficit		(46,041)	(45,688)
		3,724	3,290
Current liabilities
Trade and other payables		374	166
Liabilities of disposal group	9b	21	-
Total liabilities		395	166
Total equity and liabilities		4,119	3,456

Going concern                                                                                 2

Commitments and Contingencies                                       19, 20

The notes on pages 11 to 24 are an integral part of these unaudited condensed consolidated interim financial statements.

Consolidated Statements of Comprehensive Income

Unaudited US$'000	Note	Six months ended 30 September 2013	Six months ended 30 September 2012
Administrative expenses		(445)	(860)
Operating Loss		(445)	(860)
Gain on disposal of investment	9a	298	-
Loss before income tax	17	(147)	(860)
Income tax expense		-	-
Loss for the period from continuing operations		(147)	(860)
Loss for the period from discontinued operations	9b	(206)	(4,892)
Loss for the period		(353)	(5,752)
Other comprehensive income
Foreign currency translation differences on consolidation of foreign operations
of operating subsidiaries		112	-
of discontinued operations		(1)	(3)
Other comprehensive income (loss) for the period		111	(3)
Total comprehensive loss for the period		(242)	(5,755)
Total comprehensive loss attributable to:
Owners of the company		(242)	(5,755)
Basic and diluted loss per share (in US cents)	18
From continuing operations		(0.12)	(0.76)
From discontinued operations		(0.17)	(4.32)
		(0.29)	(5.08)

The notes on pages 11 to 24 are an integral part of these unaudited condensed consolidated interim financial statements.

Consolidated Statements of Changes in Equity

Unaudited US$'000	Share Capital	Share premium	Foreign currency translation reserve	Share and warrant option reserve	Accumulated deficit	Total
Note	14	14	15	15, 16b
Balance at 1 April 2012	1,133	45,724	(125)	3,737	(38,185)	12,284
Loss for the period	-	-	-	-	(5,752)	(5,752)
Total comprehensive income for the period attributable to owners of the company	-	-	(3)	-		(3)
Total contributions by and distributions to owners for the period
Share-based payment transactions	-	-	-	(1,858)	1,946	88
Total	-	-	-	(1,858)	1,946	88
Balance at 30 September 2012	1,133	45,724	(128)	1,879	(41,991)	6,617
Balance at 1 April 2013	1,133	45,724	(259)	2,380	(45,688)	3,290
Loss for the period					(353)	(353)
Total comprehensive income for the period attributable to owners of the company	-	-	111	-	-	111
Total contributions by and distributions to owners for the period
Issuance of shares	195	472	-	-	-	667
Share-based payment transactions	-	-	-	9	-	9
Total	195	472	-	9	-	676
Balance at 30 September 2013	1,328	46,196	(148)	2,389	(46,041)	3,724

The notes on pages 11 to 24 are an integral part of these unaudited condensed consolidated interim financial statements.

Consolidated Statements of Cash Flows

 

Unaudited US$'000	Note	Six months ended 30 September 2013	Six months ended 30 September 2012
Net cash used in operating activities	21	(620)	(1,057)
Cash flows from investing activities
Proceeds of sale of UrAmerica	9a	298	-
Investment in jointly controlled asset			(226)
Additions to plant and equipment		(23)	-
Capitalisation of exploration costs	11	(214)	-
Purchase of subsidiary, SSOAB	10	(453)	-
Cash flows from discontinued operations		-	-
Net cash used in investing activities		(392)	(226)
Net decrease in cash and cash equivalents		(1,012)	(1,283)
Cash and cash equivalents at beginning of period		1,882	4,035
Effect of exchange rate fluctuations on cash held		4	21
Cash and cash equivalents at end of period		874	2,773

The notes on pages 11 to 26 are an integral part of these unaudited condensed consolidated interim financial statements.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements

1)    Reporting Entity

URU Metals Limited (the "Company"), formerly known as Niger Uranium Limited, and before that UraMin Niger Limited, was incorporated in the British Virgin Islands on 21 May 2007. The Company's shares were admitted to trading on AIM, a market operated by the London Stock Exchange on 12 September 2007. The address of the Company's registered office is Intertrust, P.O. Box 92, Road Town, Tortola, British Virgin Islands.

The condensed consolidated interim financial statements of the Group as at and for the six months ended 30 September 2013 comprises the results of the Company and its subsidiaries (together referred to as the "Group").

The Group is primarily involved in seeking out mining opportunities around the world as an active investor and project developer.

These condensed consolidated interim financial statements were approved for issue on 19 November 2013. These statements have been reviewed, and not audited.

2)    Going Concern

The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that planned exploration and development programs will result in profitable mining operations. The Company has not yet established whether its mineral properties contain reserves that are economically recoverable. Changes in future conditions could require material write-downs of the carrying values of mineral properties.

These consolidated financial statements have been prepared using International Financial Reporting Standards ("IFRS") applicable to a going concern, which assumes continuity of operations and realization of assets and settlement of liabilities in the normal course of business. In assessing whether or not there are material uncertainties that may lend doubt as to the ability of the Company to continue as a going concern, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity's ability to continue as a going concern, as described in the following paragraph. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption inappropriate. These adjustments could be material.

The Group has reported the following figures:

US$'000		Period ended 30 September 2013	As at 31 March 2013
Net loss for the period		(353)	(9,080)
Accumulated deficit		(46,041)	(45,688)
Liabilities		395	166
Cash balance		874	1,882

Although it has a cash balance of $874,000, and no long-term debt, URU has not generated cash flow from operations. As a result, the Group will need to raise additional financing within the next twelve to eighteen months in order to meet its liabilities as they come due.

As part of the Group's normal procedures, the Board and management continually evaluate the going concern premise and as an exploration Group, use budgets and cash flow forecasts to evaluate requirements in ensuing periods.

The Company is in the exploration stage and is subject to the risks and challenges similar to other companies in a comparable stage of development. These risks include, but are not limited to, dependence on key individuals, successful development and, as noted above, the ability to secure adequate financing to meet the minimum capital required to successfully develop the Company's projects and continue as a going concern. There is no assurance that these initiatives will be successful and, as a result, there is significant doubt regarding the ultimate applicability of the going concern assumption.

 

3)    Basis of preparation

a)    Statement of compliance

The condensed consolidated interim financial statements for the six months ended 30 September 2013 have been prepared in accordance with International Accounting Standard IAS 34 Interim Financial Reporting.

The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2013, which have been prepared in accordance with IFRS.

The accounting policies adopted are consistent with those of the previous financial year, except as described in Note 4, below.

b)    Basis of measurement

The condensed consolidated interim financial statements for the six months ended 30 September 2013 have been prepared on a historical cost basis.

c)    Functional and presentation currency

Items included in the consolidated interim financial statements for each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the "functional currency"); the Group, as a consolidated entity, does not have a functional currency). Similarly, each entity reports its results in a specified currency (the "reporting currency"). The functional and reporting currencies for the individual entities (which are not separately reported in these Group statements) and for the Group are set out in the table below:

Entity	Sept 30, 2013		March 31, 2013
	Functional	Presentation	Functional	Presentation
Group	-	USD	-	USD
Subsidiaries:
URU Metals Limited ("URU")	CAD	CAD	CAD	CAD
Niger Uranium Societe Anonyme ("NUSA")	CFA	CFA	CFA	CFA
8373825 Canada Inc	CAD	CAD	-	-
Svenska Skifferoljeaktiebolaget ("SSOAB")	SEK	SEK	-	-

URU Metals Limited's functional currency was changed to CAD effective 31 January 2013. This change was effected because the Company's function and strategic focus moved from South Africa to Canada as of that date.

These condensed consolidated interim financial statements are presented in US Dollars, rounded to the nearest thousand.

d)    Use of estimates and judgements

The preparation of the condensed consolidated interim financial statements in conformity with International Financial Reporting Statements (IFRS) requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The Group makes estimations and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant risk and effect on the carrying amounts recognised in the condensed consolidated interim financial statements within the next financial year, are included in the following notes:

Note 11 - Intangible assets and impairments

Note 16 - Measurement of share-based payment

4)    Significant accounting policies

The accounting policies adopted are consistent with those described in the annual financial statements for the year ended 31 March 2013, except as noted below:

a)    Change in accounting policies

The company has adopted the following new and revised standards, along with any consequential amendments, effective April 1, 2013. These changes were made in accordance with the applicable transitional provisions.

IFRS 10, Consolidated Financial Statements, replaces the guidance on control and consolidation in IAS 27, Consolidated and Separate Financial Statements, and SIC-12, Consolidation - Special Purpose Entities. IFRS 10 requires consolidation of an investee only if the investor possesses power over the investee, has exposure to variable returns from its involvement with the investee and has the ability to use its power over the investee to affect its returns. Detailed guidance is provided on applying the definition of control.

The Company assessed its conclusions on April 1, 2013 and determined that the adoption of IFRS 10 did not result in any change in the consolidation status of any of its subsidiaries and investees.

IFRS 11, Joint Arrangements, supersedes IAS 31, Interests in Joint Ventures, and requires joint arrangements to be classified either as joint operations or joint ventures depending on the contractual rights and obligations of each investor that jointly controls the arrangement. For joint operations, a company recognizes its share of assets, liabilities, revenues and expenses of the joint operation. An investment in a joint venture is accounted for using the equity method as set out in IAS 28, Investments in Associates and Joint Ventures (amended in 2011).

The Company's investment in its jointly controlled asset is still in the earn-in stage, and has been accounted for based on the Company's share of expenditures on the property.

The Company has adopted the amendments to IFRS 12 Disclosure of Interests in Other Entities effective January 1, 2013, which will require certain additions to its note disclosure with respect to its subsidiaries in the annual consolidated financial statements for the year ending March 31, 2014.

IFRS 13, Fair value measurement, provides a single framework for measuring fair value. The measurement of the fair value of an asset or liability is based on assumptions that market participants would use when pricing the asset or liability under current market conditions, including assumptions about risk. The Company adopted IFRS 13 on April 1, 2013 on a prospective basis. The adoption of IFRS 13 did not require any adjustments to the valuation techniques used by the Company to measure fair value and did not result in any measurement adjustments as at April 1, 2013.

The Company has adopted the amendments to IAS 1 Amendment, Presentation of Items of Other Comprehensive Income effective April 1, 2013. These amendments required the Company to group other comprehensive income items by those that will be reclassified subsequently to profit or loss and those that will not be reclassified. The Group's Other Comprehensive Income is limited to the latter category, and its Other Comprehensive Income items have been split out in the relevant statement for both the current and comparative figures. These changes did not result in any adjustments to other comprehensive income or comprehensive income.

5)    Seasonality

The Group is engaged in exploration and evaluation of mineral deposits. The timing and extent of exploration activities and expenditures will be curtailed by winter in Northern latitudes.

6)    Segment information

The Group has two reportable segments:

Exploration                    Includes obtaining licenses and exploring these license areas

Corporate office            Includes all Group administration and procurement

Exploration is subdivided by Geography for decision-making: Canada, Niger, South Africa, and Sweden.

For the period ended 30 September 2012, exploration activities were conducted in both South Africa and Niger and administration was conducted from the South African office. For the period ending 30 September 2013, exploration activities were conducted in Canada, Sweden, South Africa, and (up until being discontinued) Niger, and administration was conducted from the Canadian head office. In presenting information based on the geographic information, segment assets are based on the geographical location of the assets.

There are varying levels of integration between the Exploration and Corporate Office reportable segments. This integration includes shared administration and procurement services.

Information regarding the results of each reportable segment is included below. Performance is measured based on segmented results as compared to budgets. Inter-segment transactions consisted of funding advanced from Corporate Office to Exploration.

	Discontinued Operations Niger		Exploration Sweden		Exploration South Africa		Corporate Exploration Canada		Office Canada		Subtotal Canada		Total
US$’000	2013	2012	2013	2012	2013	2012	2013	2012	2013	2012	2013	2012	2013	2012
Six months ended 30 September:
Revenues	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Depreciation	(1)	(3)	-	-	-	-	-	-	(2)	(24)	(2)	(24)	(3)	(27)
Reportable segment loss before tax	(206)	(4,892)	-	-	-	-	-	-	(147)	(860)	(147)	(860)	(353)	(5,752)
Other material non-cash items:
Share-based payments expense	-	-	-	-	-	-	-	-	9	88	9	88	9	88
Impairment of intangibles	-	(4,705)	-	-	-	-	-	-	-	-	-	-	-	(4,705)
Capital expenditures including intangible assets	-	-	(35)	-	-	-	(199)	-	(1)	-	(200)	-	(235)	-
As at:	30 Sept 2013	31 Mar 2013	30 Sept 2013	31 Mar 2013	30 Sept 2013	31 Mar 2013	30 Sept 2013	31 Mar 2013	30 Sept 2013	31 Mar 2013	30 Sept 2013	31 Mar 2013	30 Sept 2013	31 Mar 2013
Reportable segment assets	1	14	1,421	-	1,580	3,442	207	-	910	-	1,117	-	4,119	3,456
Non-Current assets	-	8	1,400	-	1,580	1,531	199	-	4	-	203	-	3,183	1,539
Reportable segment liabilities	(21)	(37)	-	-	-	-	-	-	(374)	(129)	(374)	(129)	(395)	(166)

7)    Financial Risks

 

The group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group's annual financial statements Year ended 31 March 2013.

There have been no changes in any risk management policies since the year end.

8)    Financial Instruments

a)    Credit risk

Exposure to credit risk

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

USD '000	Note	Carrying amount 30 September 2013	Carrying amount 31 March 2013
Cash and Cash Equivalents		874	1,882
Receivables	13	61	35

b)    Liquidity risk

The Group's liquidity risk is limited to i) its Trade and Other Payables balances, which settle within six months, and accordingly are held at the amount of the contractual cash outflows; and ii) its funding requirements to pay contingent consideration (Note 10).

c)    Market risk

The Group's exposure to market risk is limited to currency risk described in the audited financial statements for the year ended 31 March 2013.

The fair values of the following financial assets and financial liabilities approximate carrying values due to the short maturities of these instruments: cash, accounts receivable, and accounts payable.

9)    Disposed Investments and Discontinued Operations

a)    Sale of UrAmerica

On 4 April 2013, the Company elected to sell its entire holdings (4,421,000 shares) in UrAmerica, an Argentina-based private uranium exploration company, for GBP 200,000, resulting in a gain of US$ 298,000. This investment had previously been written off in the consolidated financial statements.

b)    Decision to close the Niger Operations

The closure of the Niger operations was effective 30 September 2013, and have been treated as a Discontinued Operation in these interim financial statements.

i)     Income statement and cash flows

US$'000		Period ended 30 September 2013	Period ended 30 September 2012
Revenues		-		-
Operating Expenditures		206		187
Impairment of intangible asset				(4,705)
Loss before income tax		(206)		(4,892)
Income tax expense		-		-
Loss for the period from discontinued operations		(206)		(4,892)
Cash flows from discontinued operations
Used in Operations		(199)		(190)
Change in working capital		13		11
		(186)		(179)

i)     Assets and Liabilities of Discontinued Operations

US$'000		As at 30 September 2013	As at 31 March 2013
Cash		1		-
Total Assets of discontinued operations		1		-
Accrued Expenses		21		-
Total Liabilities of discontinued operations		21		-

10) Purchase of Svenska Skifferoljeaktiebolaget ("SSOAB")

On 23 May, 2013, the Company announced that it had acquired all the outstanding ordinary shares of a Swedish company, Svenska Skifferoljeaktiebolaget ("SSOAB") from a private company. SSOAB holds title to six exploration licenses in Sweden, located in Örebro County.

URU paid the vendors US$ 300,000 and issued 17 million ordinary shares as consideration to the vendors for the purchase of SSOAB. An additional 2.5 million ordinary shares, plus a cash payment of US$ 25,000, were paid as a finder's fee on the transaction. A deferred payment of US$ 200,000 will be paid by URU to the vendors upon the completion of the first exploration drill program on the property in the future.

The Group has treated the transaction as a purchase of assets. As it was not a business combination, transaction costs have been capitalised, and, as the transaction affected neither accounting nor taxable profit, deferred taxes do not arise.

The following table summarises the consideration paid for SSOAB, and the amounts of the assets acquired at the acquisition date:

Consideration	USD '000s
Cash	300
Shares issued to vendor	582
Shares issued as part of acquisition costs	85
Cash-based acquisition costs	163
Future consideration	200
Total Consideration	1,330
Cash	10
Receivables	10
Exploration Licenses	1,310
Recognized amounts of identifiable assets assumed	1,330

11) Intangible assets

US$'000		Six months ended 30 September 2013	Year ended 31 March 2013
Opening balance		-	4,705
Acquisition of SSOAB licenses	10	1,310	4,705
Foreign exchange		55	-
Exploration Licenses		1,365	4,705
Capitalised exploration expenses		214	-
Impairments		-	(4,705)
Balance at end of period		1,579	-

In the year ended 31 March 2013, URU impaired the Niger assets in full based on the estimated recoverable amount of these assets.

12) Investment in jointly controlled asset

US$'000	Six months ended 30 September 2013	Year ended 31 March 2013
Reconciliation of the movement in the Nickel Joint Venture
Opening balance	1,527	3,703
Increase in investment	-	233
Foreign exchange	53	(64)
Impairment	-	(2,345)
Balance at end of period	1,580	1,527

On 5 October 2010, the Group announced that it had entered into a joint arrangement (the "Nickel Joint Venture") with Southern African Nickel ("SAN"), the joint owner and current developer of a portfolio of large nickel projects in Southern Africa. Under the agreement, the Company committed to provide funding to the Nickel Joint Venture of, in aggregate, up to US$3.6 million over a period of 20 months from 5 October 2010.

In fiscal 2012, URU Metals satisfied all its obligations under the Nickel Joint Venture Agreement and has now a fully vested a 50 per cent interest in the Nickel Joint Venture. In fiscal 2013, a dispute arose between the two other joint venture partners, i.e. the Group is not party to the dispute, related to the assets underlying the Nickel Joint Venture. Both parties alleged that the other party has failed in its obligations under their separate agreement. Those two partners entered into a formal arbitration process in the second half of calendar 2013, and URU is anticipating resolution of the dispute between these two partners by the end of calendar 2013.

13) Receivables

US$'000	As at 30 September 2013	As at 31 March 2013
Deposits	-	25
Other prepayments	31	9
Other receivables	30	1
	61	35

14) Share capital and premium

Ordinary shares		Number of shares	Share capital US$'000	Share premium US$'000	Total US$'000
Authorised share capital:
300 000 000 shares of US$ 0.01 each		300,000,000	3,000	-	3,000
Issued share capital:
Balance at 1 April 2012 and 30 September 2012
113,276,722 shares of US$ 0.01 each		113,276,722	1,133	45,724	46,857
Opening balance as at 1 April 2013		113,276,722	1,133	45,724	46,857
Shares issued to purchase SSOAB	11	19,500,000	195	472	667
Balance at 30 September 2013		132,776,722	1,328	46,196	47,524

Issued shares

All issued shares are fully paid up.

Unissued shares

In terms of the BVI Business Companies Act, the unissued shares are under the control of the directors.

15) Reserves

US$'000		As at 30 September 2013	As at 31 March 2013
Foreign currency translation reserve		(148)	(259)
Share and warrant option reserve	16	2,389	2,380
		2,241	2,121

16) Share and warrant option reserve

a)    Share Options - Administration

The Share Option Plan 2008 is administered by the Board of Directors, which determines individual eligibility under the plan the number of shares reserved for optioning to each individual.

Movements in options in the relevant reporting periods are set out in the table below:

Period ending	Granted	Lapsed	Cancelled
30 September 2012	-	2,502,400	-
30 September 2013	-	-	-

b)    Share Options - Movement in Reserve

The movement in the share and warrant option reserve is detailed below:

US$'000		Share Options	Warrant options	Total
Balance at 1 April 2012		3,687	50	3,737
Share and warrant option reversal on cancellation and expiry		(1,946)	-	(1,946)
Share and warrant option expense		88	-	88
Balance at 30 September 2012		1,829	50	1,879
Balance at 1 April 2013		2,330	50	2,380
Share and warrant option reversal on cancellation and expiry		-	-	-
Share and warrant option expense		9	-	9
Balance at 30 September 2013		2,339	50	2,389

c)    Warrant Options

In the periods to 30 September 2013 and to 30 September 2012, no warrant options were issued, nor did any lapse.

17) Operating loss

The following items have been recognised in arriving at the operating loss for the period:

US$'000	Note	Six months to 30 September 2013	Six months to 30 September 2012
Auditors' remuneration		40	48
Directors' fees	18	152	22
Fees for services as director		29	22
Basic salary		123
Legal fees		13	61
Operating lease payments	19
Continuing operations		64	26
Discontinued operations		9	7
Depreciation
Continuing operations		2	20
Discontinued operations		1	7
Foreign exchange loss/(gain)
realised		-	6
unrealised		(5)	(21)
Salaries and wages		137	349
Share options expensed - directors (equity settled)		5	88
Share options expensed - staff (equity settled)		4	-
Staff cost - salaries
Continuing operations		-	158
Discontinued operations		128	103

18) Loss per share

US$'000	Six months to 30 September 2013	Six months to 30 September 2012
The basic loss per share is calculated using:
Loss for the period (US$'000), continuing operations	(147)	(860)
Loss for the period (US$'000), discontinued operations	(206)	(4,892)
Weighted average number of shares in issue	127,342,296	113,249,325
Basic loss per share (US cents), continuing operations	(0.12)	(0.76)
Basic loss per share (US cents), discontinued operations	(0.17)	(4.32)
Reconciliation of the weighted average number of ordinary shares in issue:
Number of ordinary shares at beginning of the period	113,276,722	113,249,325
Issuance of shares to purchase SSOAB	14,065,574	-
	127,342,296	113,249,325

The calculation of fully diluted loss per share has not been detailed in the Notes as the effect of the conversion of outstanding share and warrant options would be anti-dilutive.

19) Commitments

The future minimum lease payments under non-cancellable operating leases are:

US$'000	As at 30 September 2013	As at 31 March 2013
Less than 1 year	-	41
Later than 1 year but less than 5 years	-	-
	-	41

The operating lease commitments related to the Company's headquarters in Johannesburg, SA. This lease was terminated effective 31 August 2013 at no penalty to the Company.

Upon completion of successful drilling, the Company must pay a success fee of US$ 200,000 to the vendor of SSOAB. This amendment has been accrued as part of the acquisition cost of SSOAB (note 10).

20) Contingent liabilities

Nueltin Agreement

On 5 February, 2013, the Group signed an exclusive option agreement with Cameco Corporation ("Cameco") to earn a majority interest in Nueltin Lake Gold-Uranium Project ('the Project"), in the Kivalliq Region of the Territory of Nunavut, Canada.

Under the terms of the option agreement, URU Metals will fund a total of CAD$ 2.5 million on exploration expenditures over a three-year period in return for a 51 per cent stake in the Project ("the First Option"). The Group committed to spend a minimum of CAD$ 550,000 by 31 December 2013, at which point the Group has the ability to decide whether to satisfy the remaining exploration requirement to satisfy the First Option in full. This minimum spend requirement was substantially extended to 31 August 2014.

On completion of the First Option, URU has the option to earn an additional 19 per cent interest in the project by funding a further CAD 8.0 million in exploration over a four-year period ("the Second Option").

On successful completion of both options, the Company would have earned a 70 per cent interest in the Project by completing CAD 10.5 million in exploration expenditures over a seven-year period. URU will be the project operator over the option earn-in period.

After URU completes its earn-in requirement under the Option Agreement, the parties will enter into a standard joint venture agreement, the form of which has already been agreed to and appended to the Option Agreement.

21) Notes to the statement of cash flows

Cash flows from operating activities

US$'000		As at 30 September 2013	As at 30 September 2012
Loss before income tax from continuing operations		(147)	(860)
Adjusted for:
-       Depreciation		2	24
-       Share-based payments expense	16	9	88
-       Gain on sale of UR America	9a	(298)	-
Unrealised foreign exchange (gain)/loss		(5)	(21)
Cash flows from discontinued operations		(186)	(179)
		(625)	(948)
Movements in working capital:
(Increase) in receivables		(31)	(23)
Increase/(decrease) in trade and other payables		49	(75)
Movements in working capital from discontinued operations		(13)	(11)
Cash flows from operating activities		(620)	(1,057)

22) Related parties

a)    Subsidiaries

The Group financial statements incorporate the assets, liabilities and results of the following subsidiaries:

		Year End	Country of incorporation	As at 30 September 2013	As at 30 September 2012
				%	%
Niger Uranium S.A.		31 December	Niger	100	100
8373825 Canada Inc incorporated December 2012)		31 March	Canada	100	-
SSOAB (purchased in May 2013)		31 December	Sweden	100	-
URU (Management) Limited	*	31 March	British Virgin Islands	100	100
URU (Africa) Limited	*	31 March	British Virgin Islands	100	100
Namaqua Uranium (Proprietary) Limited	*	31 March	Namibia	100	100
URU Metals (Zambia) Ltd	*	31 March	Zambia	100	100

*- dormant

As all subsidiaries are 100% owned by URU Metals, the Company has control over all the subsidiaries.

The Company currently rents office space on a month-to-month basis at market rates from a majority shareholder at a cost of US$1,640 per month.

b)    Transactions with key management personnel

No share options were issued in the period to 30 September 2012 and 2013. During the period to 31 March 2012, 3,250,000 share options were issued to directors of the Company. The options were granted under recommendation of the Remuneration Committee and were granted at an exercise price of £0.03375 each.

No warrant options were issued, exercised or cancelled in the periods ending 30 September 2012 and 2013.

c)    Directors' remuneration

US$'000		Six months to 30 September 2013	Six months to 30 September 2012
Fees for services as director		29	22
Basic salary		123	-
Expense allowance		-	-
Share-based payment expense		5	88
Total		157	110

23) Events after the Reporting Date

Purchase of Southern African Nickel Limited - Partner on the SAN JV Nickel Joint Venture

Subsequent to the half-year end, on November 15, 2013, URU has signed an agreement with its joint venture partner, Southern African Nickel ("SAN") to increase its interest in the South African Nickel Joint Venture ("SAN JV") (see Note 12) . At the final closure of this transaction, through its 100% ownership of the SAN JV, URU will have a 74% direct interest in the Zebediela Nickel Project and 50% direct interest in the Burgersfort Project. Prior to the transaction, URU owned a 37% interest in the Zebediela Project and a 25% interest in the Burgersfort Project.

URU will acquire 100% interest in the SAN JV by purchasing 100% of the stock of its JV partner's Southern African Nickel Limited ("SAN L"), a BVI-registered company, for US$1 and paying the JV's current outstanding obligations of approximately US$185,000 to its operating consultant, Pangea Exploration, a privately-held non-arm's length company to SAN L. Currently, activities at the Zebediela Project are suspended pending the results of the current arbitration dispute between the SAN JV and Umnex Mineral Holdings Ltd. By purchasing SAN, URU will be assuming SAN L's position in this arbitration process.

 

END

 

 

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