Unaudited Condensed Interim Financial Statements

RNS Number : 6637U

URU Metals Limited

28 December 2011

 



For immediate release

28 December 2011

URU Metals Limited

("URU" or the "Company")

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 September 2011

CHAIRMAN'S STATEMENT

I am delighted to present to our shareholders and stakeholders, the interim report and accounts of the Group for the six months ended 30 September 2011 (the "Period").

Whilst in the prior year the Group distributed shares in Kalahari Minerals, by way of a dividend in specie, this period, we have added to the underlying value of your Group by investing in projects with the potential to host world-class nickel and uranium deposits. 

HIGLIGHTS

The highlights of our progress during the six months ended 30 September 2011, and to the date of this report, can be summarised as follows:

NIGER - URANIUM EXPLORATION

The drilling and exploration programme at our In Gall and Irhazer licensed areas continued into the start of the rainy season in June and then re-commenced on 18 November 2011. Whilst we look forward to receiving positive results from these operations, the Group continues to evaluate the security risks within that country and remains ever mindful of the safety of our employees and contractors whilst in the field. 

SOUTHERN AFRICA - NICKEL EXPLORATION JOINT VENTURE

Last year the announcement of the Group's diversification into a nickel joint venture signalled our intention to diversify our exploration efforts into metals and minerals outside uranium. In January 2011 the joint venture announced the acquisition of a further target area of which we hope to shortly announce further positive results. To date, we have spent almost all the required funding to meet our obligations under the joint venture and look forward to these projects delivering further value to shareholders during 2012.

MANAGEMENT AND BOARD

As announced, the Group's Finance Director and Company Secretary Mr. Gordon Cassidy passed away suddenly on 14 September 2011. The Board was deeply saddened by the news, as Gordon had made a substantial contribution to the development of the Group almost from its inception and he will be missed by the URU Metals team. Mr. Russel Swarts who has been with the Group from June 2008 has been appointed as chief financial officer.

OUTLOOK

Since incorporation, the Company has sought to widen its strategy in the field of metals exploration and development and continues to seek to develop a diverse portfolio of exploration and development projects either organically or through acquisition.

The Company intends to advance its projects in Niger, particularly our In Gall and Irhazer projects, where the investment climate in uranium remains positive.

During the period the spot price of uranium continues to vacillate and is currently around the US$50/lb level.

The nickel joint venture is progressing well and we look forward to positive results from our metallurgical and geophysical testing. 

At the reporting date, the Group had cash resources of US$ 5.251 million and no borrowings.

Whilst at the end of April 2011, the share price almost reached 16p, in line with the global pessimism it has decreased to trade around the 6.5p level. 

We continue to believe that the fundamentals of the uranium and base minerals industries remain positive and the Board is satisfied with the progress made by the Group and remains confident about the opportunities for its future development.

Paul Loudon

Non-Executive Chairman

28 December 2011

For further information:

URU Metals

Paul Loudon (Chairman)

Tel: [phone]

Beaumont Cornish Limited (Nominated Adviser)

Michael Cornish

Tel: [phone]

Daniel Stewart & Company (Broker)

Sean Lunn

Tel: [phone]

Brand: Mining IR

Dr Iestyn Adams / André Morrall

Tel: [phone]

Forward-Looking Statements:

This press release contains statements that are 'forward-looking'. Generally, the words 'expect,' 'intend,' 'estimate,' 'will' and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Group's business or proposed business, which are not historical facts, are 'forward looking' statements that involve risks and uncertainties, such as estimates and statements that describe the Group's future plans, objectives or goals, including words to the effect that the Group or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

These forward-looking statements speak only as of the date they are made.

Independent Auditor's Review Report

To the Members of URU Metals Limited

Introduction

We have reviewed the accompanying condensed consolidated interim financial statements of URU Metals Limited (formerly Niger Uranium Limited), which comprise the condensed consolidated statement of financial position at              30 September 2011, and the condensed consolidated statements of comprehensive income, changes in equity and cash flows for the six months then ended, and notes to the condensed consolidated financial statements. The directors are responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with IAS 34, Interim Financial Reporting. Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of the condensed consolidated interim financial statements consists of making enquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements of URU Metals Limited (formerly Niger Uranium Limited) for the six months ended 30 September 2011 is not prepared, in all material respects, in accordance with IAS 34.  

KPMG Inc.

Per Nick van Niekerk

Chartered Accountant (SA)

Registered Auditor

Director

28 December 2011

85 Empire Road

Parktown

South Africa

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

US$'000	Note	Reviewed at 30 September 2011	Reviewed at 30 September 2010	Audited  at 31 March 2011
ASSETS
Non-current assets
Plant and equipment		99	185	136
Intangible assets	6	4 705	4 705	4 705
Investment in jointly controlled asset	7	3 318	-	1 775
		8 122	4 890	6 616
Current assets
Investments	8	-	6 694	-
Receivables	9	164	508	174
Cash and cash equivalents		5 251	1 425	7 964
		5 415	8 627	8 138
Total assets		13 537	13 517	14 754
EQUITY AND LIABILITIES
Equity and reserves
Share capital and premium	10	46 852	46 852	46 852
Reserves	11	3 505	9 562	3 502
Accumulated deficit		(37 011)	(43 158)	(35 794)
		13 346	13 256	14 560
Current liabilities
Trade and other payables		191	261	194
Total equity and liabilities		13 537	13 517	14 754

The condensed consolidated interim financial statements were approved by the Board of Directors on 28 December 2011 and signed on its behalf by:

PAUL LOUDON

Director

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

US$'000	Note		Reviewed 6 months ended 30 September 2011	Reviewed 6 months ended 30 September 2010	Audited Year   ended 31 March 2011
Expenses			(1 217)	(1 070)	(514)
Administrative expenses			(820)	(785)	(1 256)
Exploration expenditure			(244)	(4)	(335)
Other (expenses)/income			(153)	(281)	1 077
Fair value reserve realised on disposal of available-for-sale investment			-	19 255	26 063
Operating (loss)/profit		12	(1 217)	18 185	25 549
Net finance income			-	1	1
(Loss)/profit before income tax			(1 217)	18 186	25 550
Income tax expense		13	-	-	-
(Loss)/ profit for the period			(1 217)	18 186	25 550
Other comprehensive income/(loss)
Foreign currency translation differences from foreign operations			3	(17)	(1)
Net change in the value of available-for-sale assets			-	(2 142)	-
Transfer to profit on realisation of fair value of available-for-sale investment			-	(19 255)	(26 063)
Other comprehensive income/(loss) for the period, net of income tax			3	(21 414)	(26 064)
Total comprehensive loss for the period			(1 214)	(3 228)	(514)
Total comprehensive loss attributable to:
Owners of the company			(1 214)	(3 228)	(514)
Basic (loss)/ earnings per share (in US cents)	14		(1.08)	16.1	22.6
Diluted (loss)/ earnings per share (in US cents)	14		(0.98)	15.4	20.6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

US$'000	Share Capital			Share premium		Foreign currency translation reserve	Share option reserve	Fair value reserve	Accumulated deficit	Total
Balance at 1 April 2010	1 132			45 720		(123)	5 126	26 063	(34 063)	43 855
Income for the period
Profit for the period	-		-			-	-	-	18 186	18 186
Other comprehensive income
Foreign currency translation differences		-	-			(17)	-	-	-	(17)
Net change in fair value of available-for-sale financial assets, net of tax		-	-			-	-	(21 397)	-	(21 397)
Total other comprehensive income		-	-			(17)	-	(21 397)	-	(21 414)
Total comprehensive income for the period		-	-			(17)	-	(21 397)	18 186	(3 228)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Dividends to equity holders	-		-		-		-	-	(27 281)	(27 281)
Share-based payment transactions	-		-		-		(90)	-	-	(90)
Total contributions by and distributions to owners for the period	-		-		-		(90)	-	(27 281)	(27 371)
Balance at 30 September 2010	1 132		45 720		(140)		5 036	4 666	(43 158)	13 256
Income for the period
Profit for the period	-		-		-		-	-	7 364	7 364
Other comprehensive income
Foreign currency translation differences		-	-		16		-	-	-	16
Net change in fair value of available-for-sale financial assets, net of tax		-	-		-		-	(4 666)	-	(4 666)
Total other comprehensive income		-	-		16		-	(4 666)	-	(4 650)
Total comprehensive income for the period		-	-		16		-	(4 666)	7 364	2 714
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions	-		-		-		(1 410)	-	-	(1 410)
Total contributions by and distributions to owners for the period	-		-		-		(1 410)	-	-	(1 410)
Balance at 31 March 2011	1 132		45 720		(124)		3 626	-	(35 794)	14 560

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
US$'000	Share Capital			Share premium			Foreign currency translation reserve	Share option reserve	Fair value reserve	Accumulated deficit	Total
Balance at 1 April 2011	1 132			45 720			(124)	3 626	-	(35 794)	14 560
Loss for the period
Loss for the period	-		-			-		-	-	(1 217)	(1 217)
Other comprehensive income
Foreign currency translation differences		-		-		3		-	-	-	3
Total other comprehensive income		-		-		3		-	-	-	3
Total comprehensive loss for the period		-		-		3		-	-	(1 217)	(1 214)
Balance at 30 September 2011	1 132				45 720		(121)	3 626	-	(37 011)	13 346

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

US$'000	Note	Reviewed 6 months ended 30 September 2011	Reviewed 6 months ended 30 September 2010	Audited Year ended 31 March 2011
Cash flows from operating activities
Cash flows from operating activities	16.1	(1 044)	(1 076)	(1 869)
Finance income		-	1	1
Net cash used in operating activities		(1 044)	(1 075)	(1 868)
Cash flows from investing activities
Additions to plant and equipment		-	-	(14)
Investment in jointly controlled asset	7	(1 543)		(1 775)
Proceeds from the sale of investment	8	-	-	8 801
Proceeds on sale of plant and equipment		-	22	18
Net cash (used in)/from investing activities		(1 543)	22	7 030
Net (increase)/decrease in cash and cash equivalents		(2 587)	(1 053)	5 162
Cash and cash equivalents at beginning of period		7 964	2 522	2 522
Effect of exchange rate fluctuations on cash held		(126)	(44)	280
Cash and cash equivalents at end of period		5 251	1 425	7 964

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.             Reporting Entity

URU Metals Limited (the "Company"), formerly known as Niger Uranium Limited, and before that UraMin Niger Limited, originally 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 Walkers Chambers, P.O. Box 92, Road Town, Tortola, British Virgin Islands. The condensed consolidated financial statements of the Group as at and for the six months ended 30 September 2011 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.

2.             Basis of preparation

a)             Statement of compliance

The condensed consolidated financial statements have been prepared in accordance with the recognition, measurement, presentation and disclosure requirements of IAS 34 Interim Financial Reporting (IAS 34).

b)            Basis of measurement

The condensed consolidated financial statements have been prepared on a historical cost basis except in previous periods where available-for-sale financial assets were measured at fair value.

c)             Functional and presentation currency

Items included in the condensed consolidated financial statements of 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"). These condensed consolidated financial statements are presented in United States Dollars, which is the Company's functional and presentation currency.  All financial information presented in United States Dollars has been rounded to the nearest thousand.

d)            Use of estimates and judgements

The preparation of the condensed consolidated 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. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing 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 financial statements within the next financial year, are included in the following notes:

·    Note 6 - intangible assets

·    Note 11 - measurement of share options

3.            Significant accounting policies

                         The accounting policies adopted are consistent with those described in the annual financial statements for the year ended 31 March 2011. With effect from 1 January 2011 the Group adopted IAS 24 Related Party Disclosures.

                         4.             Financial risk management

The Group has exposure to the following risks resulting from the Group's financial instruments:

·    Credit risk

·    Liquidity risk

·    Market risk.

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these condensed consolidated interim financial statements.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. Risk management is carried out by the finance department under policies approved by the Board of Directors and reports regularly to the Board of Directors.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The finance department oversees and monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group does not have an Internal Audit department.  

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's deposits, prepayments and other receivables.

Deposits, prepayments and other receivables

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However management also considers the demographics of the customer base, including the default risk of the industry and country in which the customers operate, as these factors have an impact on credit risk. There is no significant concentration of credit risk.

The Group has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered.

More than 85 per cent. of the Group's customers have been transacting with the Group since its establishment, and no impairment loss has been recognised against these customers.

The Group has no allowance for impairment that might represent an estimate of incurred losses on deposits, prepayments or other receivables.

The Group held cash and cash equivalents of US$ 5.251 million on 30 September 2011 (US$ 7. 964 million on 31 March 2011 and US$1.425 million at 30 September 2010) which represents the maximum credit exposure on these assets. The majority of the cash and cash equivalents are held with Citibank N.A. 

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

 Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 18 months, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Management monitors the rolling forecasts of the Group's liquidity reserve on the basis of expected cash flows.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group, operating internationally, is exposed to currency risk on purchases that are denominated in a currency other than the respective functional currencies of the Group entities, primarily the US Dollar (US$), Pound Sterling (GBP), the  CFA Franc BEAC (CFA)  and the South African Rand (ZAR).

The Group does not hedge its exposure to currency risk, but purchases foreign currency as and when required.

The Group's investment in its Nigerien subsidiary is not hedged.

 Interest rate risk

As interest rates on cash holdings in the predominant currencies approximate zero, the Group does not enter into interest rate swaps.

Other market price risk

The primary goal of the Group's investment strategy is to make timely investments in listed or unlisted mining and mineral development companies to optimise shareholder value. Where appropriate the Group will act as an active investor and will strive to advance corporate actions that deliver value adding outcomes. The Group will undertake joint ventures with companies that have the potential to realise value through mineral project development, and invest substantially in those joint ventures to advance asset development over the near term.

Capital risk management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of share capital and share premium and retained earnings. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Board's target is for all employees and directors of the Group to hold a maximum of 10% the Company's ordinary shares. As at 30 September 2011 the directors and key employees held 7 874 313 ordinary shares or 6.4 per cent. assuming that all outstanding options vest and are exercised. Directors and employees are awarded share options in terms of the Share Option plan.

The Group's income and operating cash flows are substantially independent of changes in market interest rates. At the six month reporting date the Group had no debt (31 March 2011 and 30 September 2010: Nil).  Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

The Group does not have a defined share buy-back plan.

In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets to generate cash.

There were no changes in the Group's approach to capital management during the period.

5.             Segment information

The Group has three reportable segments, as described below, which are the Group's strategic business units. The strategic business units offer different services, and are managed separately because they require different strategies. For each of the strategic business units, the Group's CEO reviews internal management reports on at least a quarterly basis.

The following summary describes the operations in each of the Group's reportable segments:

-       Exploration.                          Includes obtaining licenses and exploring these license areas.

-       Investment.                           Includes making investments based on group investment criteria

-       Corporate office.                  Includes all group administration and procurement

There are no other operations that meet any of the quantitative thresholds for determining reportable segments in 2011 or 2010.

There are varying levels of integration between the Exploration, Investment and Corporate Office reportable segments. This integration includes shared administration and procurement services. The accounting policies of the reportable segments are the same as described in notes 2 and 3.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Group's CEO. Segment profit or loss is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.

Operating segments
US$'000
	Exploration			Investment			Corporate Office			Total
	Reviewed	Reviewed	Audited	Reviewed	Reviewed	Audited	Reviewed	Reviewed	Audited	Reviewed	Reviewed	Audited
	6 months ended 30 Sept 2011	6 months ended 30 Sept 2010	Year ended 31 March 2011	6 months ended 30 Sept 2011	6 months ended 30 Sept 2010	Year ended 31 March 2011	6 months ended 30 Sept 2011	6 months ended 30 Sept 2010	Year ended 31 March 2011	6 months ended 30 Sept 2011	6 months ended 30 Sept 2010	Year ended 31 March 2011
Finance income	-	-	-	-	-	-	-	1	1	-	1	1
Depreciation	(11)	(51)	(77)	-	-	-	(27)	(36)	(72)	(38)	(87)	(149)
Reportable segment (loss)/ profit before tax	(469)	(308)	(893)	-	19 255	26 063	(748)	(761)	380	(1 217)	18 186	25 550
Other material non-cash items:
-       Share-based payments expense	-	-	-	-	-	-	-	-	(109)	-	-	(109)
-       Share-based payments reversal on cancellation	-	-	-	-	-	-	-	-	1 448	-	-	1 448
-       Warrant option reversal on expiry	-	-	-	-	-	-	-	(90)	(161)	-	(90)	(161)
-       Impairment of intangibles	-	-	-	-	-	-	-	-	(120)	-	-	(120)
Reportable segment assets	4 804	4 911	6 633	-	6 694	-	8 733	1 912	8 121	13 537	13 517	14 754
Capital expenditure	-	-	(2)	-	-	-	-	-	(12)	-	-	(14)
Reportable segment liabilities	(131)	(150)	(160)	-	-	-	(60)	(77)	(34)	(191)	(227)	(194)

Geographic information
For the period ended 30 September 2011, exploration activities were conducted in both South Africa and Niger, the investment activities are controlled in the British Virgin Islands and administration is conducted from the South African office. In presenting information based on the geographic information, segment assets are based on the geographical location of the assets.
US$'000																		-
		Reviewed 6 months ended 30 September 2011						Reviewed 6 months ended 30 September 2010			Audited Year ended 31 March 2011
		Revenue				Non-current assets		Revenue		Non-current assets	Revenues			Non-current assets
British Virgin Islands		-				-		-		-	-			-
Niger		-				4 729		-		4 756	-			4 841
South Africa		-				3 393		-		134	-			1 775
		-				8 122		-		4 890	-			6 616
6. Intangible assets
US$'000			Reviewed at 30 September 2011				Reviewed at 30 September 2010					Audited at 31 March 2011
Balance at beginning of period			4 825				4 825					4 825
Amortisation and impairments			(120)				(120)					(120)
Balance at end of period			4 705				4 705					4 705
With regards to its intangible assets held in Niger, and given the past security issues within that country, the Group considers that it has fully complied with its commitments under the terms of the licences that it currently holds. The Group has already received prolongation confirmation from the Ministry of Mines in respect of the two licences it holds at In Gall and Irhazer, the effects of which mean that the Company is still considered to be in the second year of its exploration programme. Whilst it still awaits similar approval for the six licences held at Kamas and Dabala, the Group remains confident that such confirmations will be forthcoming. Until such time as the Group either fails to meet its financial commitments or elects to forfeit any or all of the licences, intangible assets will continue to be reviewed for impairment as described in the accounting policies. The Irhazer and Ingall licences initially carried at a total acquisition cost of US$ 4. 705 million were registered in the name of NWT Uranium Corporation ("NWT"). The  Kamas 1, Kamas 2, Kamas 3, Kamas 4, Dabala 3 and Dabala 4 licences initially carried at an acquisition cost of US$ 120 000 were registered in the name of UraMin. In terms of the policy these licences have been impaired in full. All of the Niger exploration licences were acquired from NWT and UraMin Inc. in terms of the asset purchase agreement. 7. Investment in jointly controlled asset US$'000 Reviewed at 30 September 2011 Reviewed at 30 September 2010 Audited at 31 March 2011 Non-current Asset Ownership Non-current asset Ownership Non-current asset Ownership Investment in jointly controlled asset 3 318 45% - - 1 775 45% Capital commitments in respect of the jointly controlled asset Total URU Metals share Total URU Metals share Total URU Metals share URU Metals incurred 282 282 - - 1 825 1 825 On 5 October 2010, the Group announced that it had entered into a joint venture (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 Group committed to provide funding to the Joint Venture of, in aggregate, up to US$3.6 million over a period of 20 months from 5 October 2010. On 6 April 2011 the Group announced the satisfactory and successful conclusion of all due diligence activities between SAN and Umnex Mineral Holdings (Proprietary) Limited in relation to the acquisition of the Zebediela Nickel Project close to the mining town of Mokopane in the Limpopo province of South Africa. The Zebediela project is an addition to the portfolio of nickel assets held by the Nickel Joint Venture. The acquisition involved no additional cash consideration to be made by either the Group or SAN and did not increase the Group's original committed contribution to the Joint Venture of US$3.6 million.
8. Investments
US$'000					Reviewed at 30 September 2011				Reviewed at 30 September 2010				Audited at 31 March 2011
Financial assets available-for-sale
Listed securities: Kalahari Minerals plc					-				6 694				-
Carrying amount					-				6 694				-
Current portion					-				6 694				-
Non-current portion					-				-				-

The summary of financial assets available-for-sale is as follows: US$'000	Reviewed at 30  September 2011			Reviewed at 30 September 2010	Audited at 31 March 2011
Balance at beginning of period			-	36 082	36 082
Disposal			-	(29 388)	(36 082)
-       Cost			-	(7 992)	(10 019)
-       Fair value adjustments			-	(21 396)	(26 063)
Carrying  amount			-	6 694	-
Fair value adjustments
-       Realised			-	(19 255)	(26 063)
-       Unrealised			-	(2 141)	-
			-	(21 396)	(26 063)

Listed securities - Kalahari Minerals Plc ("Kalahari Minerals")

In the previous financial year, the available-for-sale financial assets - listed securities comprised 13. 68 million ordinary shares in Kalahari Minerals Plc (which equated to approximately 7.8 % (and voting power) of the shares in issue) and are traded on AIM, a market operated by the London Stock Exchange. Kalahari Minerals Plc has a portfolio of uranium, copper and base metal interests in western and eastern central Namibia. Its key investment is its 40% holding in Australian Stock Exchange and Toronto Stock Exchange listed Extract Resources Limited ("Extract"), which is developing the Husab Uranium Project, strategically located directly south of Rio Tinto's producing Rossing Mine.

The value of Kalahari Minerals Plc continued to increase during the year under review and on 7 May 2010 the shareholders of URU Metals approved an in specie dividend 10.912 million of the Kalahari Minerals Plc shares to its shareholders registered at that date. In November 2010, in order to provide working capital and to further invest in the nickel and uranium projects, the Board approved the disposal of the remaining Kalahari Minerals shares. Accordingly the Group holds no shares in Kalahari Minerals at 30 September 2011 (2010: 13.68 million).   

The movement in the listed securities - Kalahari Minerals is summarised as follows:
US$'000		Reviewed at 30  September 2011	Reviewed at 30 September 2010	Audited at 31 March 2011
Balance at beginning of period		-	36 082	36 082
Fair value adjustment		-	(1 923)	(1 923)
Carrying amount before dividend		-	34 159	34 159
Dividend in specie - 10.912 million Kalahari Minerals Plc shares		-	(27 281)	(27 281)
Cost		-	(7 992)	(7 992)
Realised fair value adjustment		-	(19 289)	(19 289)
Carrying value after dividend		-	6 878	6 878
Fair value adjustment		-	-	1 923
Carrying amount before disposal		-	-	8 801
Disposal of 2.768 million Kalahari Minerals plc shares		-	-	(8 801)
Cost		-	-	(2 027)
Realised fair value adjustment		-	-	(6 774)
Carrying value after disposal		-	6 878	-
Fair value adjustment		-	(184)	-
Balance at the end of period		-	6 694	-

The value of the listed securities available-for-sale financial assets is estimated by reference to the published closing price quotation of the London Stock Exchange at the reporting date.

After approval by shareholders on 7 May 2010 a dividend in specie of 10.912 million Kalahari Minerals shares was paid to shareholders at that date (30 September 2010; nil). In the financial year ended 31 March 2010, a cash dividend was paid from the proceeds of the disposal of 14 million shares at a value of $36.193 million.

On 11 November 2010, the Group announced that it had disposed by way of sale through the market of its remaining non-controlling interest in Kalahari Minerals Plc ("Kalahari Minerals") for a total cash consideration net of expenses of £5.646 million. The disposal proceeds will be used by the Group for general working capital purposes and to fund the development of its main projects.

Unlisted securities: UrAmerica Limited

The movement in the unlisted securities is summarised as follows:
US$'000		Reviewed at 30  September 2011	Reviewed at 30 September 2010	Audited at 31 March 2011
Cost		4 299	4 299	4 299
Impairment		(4 299)	(4 299)	(4 299)
Carrying amount		-	-	-

The Group continues to hold a 9.2 per cent. (31 March 2011 and 30 September 2010: 20.54 per cent.) interest in UrAmerica Limited which it acquired in April 2008 at a cost of US$ 4. 299 million. In the year ended 31 March 2010, based on UrAmerica Limited's latest financial statements and its reflected financial viability, the Group impaired the carrying amount in full. This impairment, combined with an applicable unrealised foreign exchange differences, has resulted in the unlisted financial asset continuing to be measured at zero value.  

On 21 June 2011 the Group announced that it had been informed that UrAmerica has obtained 100% of the rights to conduct exploration activities on an extensive and prospective land holding in Chubut Province, Argentina (the "Chubut Agreement"). This exploration area is situated close to UrAmerica's existing exploration license areas and adjacent to Argentina's National Commission of Atomic Energy's (CNEA) 15.4 Mlbs Cerro Solo Deposit. Pursuant to the Chubut Agreement, UrAmerica issued 26.5 million shares in consideration such that the total number of shares now in issue in UrAmerica stands at 48 118 685. Accordingly, URU Metals' shareholding of 4 421 000 shares in UrAmerica has been diluted from 20.54 per cent. to approximately 9.2 per cent. of UrAmerica's issued share capital.

A further dilution of the Group's interest is shown in note 17, "Events after the Reporting Date".

9. Receivables
US$'000	Reviewed at 30  September 2011		Reviewed at 30 September 2010		Audited at 31 March 2011
Deposits	88		152		139
Other prepayments	9		32		11
Other receivables	67		51		24
Loan to Pangea Exploration (Proprietary) Limited	-		273		-
		164		508	174

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

As reported in the period to 30 September 2010, as a result of a delay in establishing the nickel joint venture and in order to continue the initial work programme, the Group had advanced a loan of ZAR 2 million (US$273 045) to Pangea Exploration (Proprietary) Limited. In terms of the Joint Venture Agreement, the loan amount will form part of the initial contribution to the joint venture.

The investment in the joint venture has been treated as an investment in a jointly controlled asset as disclosed in note 7 herein.

10. 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:
113 210 056 shares of US$ 0.01 each		113 210 056	1 132	45 720	46 852
Balance at 30 September 2011, 31 March 2011 and 30 September 2010		113 210 056	1 132	45 720	46 852

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.

Dividends
The following dividends were declared and paid by the Group:
US$'000		Reviewed 6 months ended 30  September 2011	Reviewed 6 months ended 30 September 2010	Audited Year ended 31 March 2011
Dividend in specie of 10.912 million Kalahari Minerals Plc shares		-	27 281	27 281

At the Annual General Meeting held on 7 May 2010, the shareholders approved a dividend in specie of 9.63 Kalahari Minerals Plc shares per 100 URU Metals Limited (formerly Niger Uranium Limited) shares held at that date.

11. Reserves
US$'000			Note			Reviewed at 30  September 2011	Reviewed at 30 September 2010	Audited at 31 March 2011
Foreign currency translation reserve						(121)	(140)	(124)
Share option reserve			11.1			3 626	5 036	3 626
Fair value reserve			11.2			-	4 666	-
						3 505	9 562	3 502
11.1 Share option reserve
US$'000
The movement in the share option reserve is detailed below:					Share Options		Warrant options	Total
Balance at 1 April 2010					4 915		211	5 126
Warrant option reversal on expiry					-		(90)	(90)
Balance at 30 September 2010					4 915		121	5 036
Share and warrant option reversal on cancellation and expiry					(1 448)		(71)	(1 519)
Share and warrant option expense					109		-	109
Balance at 31 March 2011 and 30 September 2011					3 576		50	3 626

Share Options

The URU Metals Limited (formerly Niger Uranium Limited) 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. In the period ended 30 September 2011, no options were granted, cancelled or forfeited. During the year ended 31 March 2011, 7 950 000 options were granted (30 September 2011 and 30 September 2010: nil) whilst 3 200 000 options were forfeited and cancelled (31 March 2010 and 30 September 2010: nil)

Warrant Options

In the period to 30 September 2011, no warrant options were issued nor did any lapse. During the year ended 31 March 2011 a total of 250 000 warrant options lapsed. As a result of these lapses a reversal of the expense in the previous years of US$ 161 000 was recognised in profit or loss.

11.2 Fair value reserve
US$'000	Reviewed at 30  September 2011	Reviewed at 30 September 2010	Audited at 31 March 2011
The fair value reserve includes the cumulative net change in fair value of available-for-sale investments until the investment is derecognised.
Opening balance	-	26 063	26 063
Movement for the period	-	(21 397)	(26 063)
Closing balance	-	4 666	-

12. Operating (loss) /profit
US$'000		Reviewed 6 months ended 30  September 2011	Reviewed 6 months ended 30 September 2010	Audited Year ended 31 March 2011
The following items have been recognised in arriving at the operating (loss)/profit for the period
Auditors remuneration		50	50	64
Directors fees		135	136	339
-       Fees for services as director		28	35	56
-       Basic salary		93	88	179
-       Expense allowance		14	13	41
-       Share-based payment expense		-	-	63
Legal fees		11	101	110
Operating lease payments		51	39	86
Depreciation		38	87	149
Fair value reserve realised on disposal of available-for-sale investment		-	(19 255)	(26 063)
Foreign exchange loss/(gain)
-       realised		17	-	7
-       unrealised		126	(44)	(280)
Impairment of intangible assets		-	120	120
(Gain)/loss on disposal of plant and equipment		-	(3)	4
Salaries and wages		232	172	(698)
-       Share options expensed - directors (equity settled)		-	-	63
-       Share options expensed - staff (equity settled)		-	-	46
-       Share options reversal - directors		-	-	(1 245)
-       Share options reversal - staff		-	-	(203)
-       Staff cost - salaries		232	172	641
Warrant options reversal on expiry		-	(90)	(161)

13. Income tax expense and deferred taxation

No taxation has been provided due to the calculated losses incurred in the current and prior year.

The British Virgin Islands under the IBC imposes no corporate taxes or capital gains. However the Group may be liable for taxes in the jurisdictions where it is develops mining properties.

No deferred tax asset has been recognised because there is insufficient evidence of the timing of suitable future profits against which it can be recovered.

14. (Loss)/earnings per share		Reviewed 6 months ended 30 September 2011	Reviewed 6 months ended 30 September 2010	Audited Year ended 31 March 2011
The basic (loss)/earnings per share is calculated using:
(Loss)/profit for the period (US$'000)		(1 217)	18 186	25 550
Weighted average number of shares in issue		113 210 056	113 210 056	113 210 056
Basic (loss)/earnings per share (US cents)		(1.08)	16.1	22.6
Reconciliation of the weighted average number of ordinary shares in issue:
Number of ordinary shares at beginning and end of the period		113 210 056	113 210 056	113 210 056
The diluted (loss)/earnings per share is calculated using:
(Loss)/profit for the period (US$'000)		(1 217)	18 186	25 550
Reconciliation of the diluted weighted average ordinary shares in issue:
Weighted average number of shares in issue		113 210 056	113 210 056	113 210 056
Effect of share options on issue		10 452 400	4 969 067	10 452 400
Effect of warrant options on issue		100 000	100 000	100 000
Weighted average diluted number of ordinary shares		123 762 456	118 279 123	123 762 456
Diluted (loss)/earnings per share (US cents)		(0.98)	15.4	20.6

15.Contingent liabilities and commitments
US$'000		Reviewed 6 months ended 30 September 2011	Reviewed 6 months ended 30 September 2010	Audited Year ended 31 March 2011
Operating lease commitments
The future minimum lease payments under non-cancellable leases are:
Less than 1 year		60	82	78
Later than 1 year but less than 5 years		76	155	123
More than 5 years		-	-	-
		136	237	201

The operating lease commitments relate to a property leases in Sandton, both of which commenced in December 2010. The lease expires in November 2013, with an option to negotiate an extension. The initial lease payment amounted to US$ 4,916 per month and escalates at 8% per annum. In the prior period the lease commitments included a Morningside property, whose initial lease payment amounted to US$ 1,603 per month, and expired in September 2011.  

16. Notes to the statement of cash flows
16.1 Cash flows from operating activities
US$'000		Reviewed 6 months ended 30 September 2011		Reviewed 6 months ended 30 September 2010	Audited Year ended 31 March 2011
(Loss)/profit before income tax		(1 217)		18 186	25 550
Adjusted for:
-        Depreciation		38		87	149
-        Realised fair value adjustment			-	(19 255)	(26 063)
-        Share-based payments expense		-		-	109
-         Share based payments expense reversal on cancellation		-		-	(1 448)
-        Warrant option reversal on expiry		-		(90)	(161)
(Gain)/loss on disposal of property and equipment		-		(3)	4
Impairment of intangible assets		-		120	120
Net finance income		-		(1)	(1)
Unrealised foreign exchange loss/(gain)		126		(5)	(280)
		(1 053)		(961)	(2 021)
Movements in working capital:
Decrease/(increase) in receivables		11		(289)	45
(Decrease)/increase in trade and other payables		(2)		174	107
Cash flows from operating activities		(1 044)		(1 076)	(1 869)

17. Events after the Reporting Date

UrAmerica Limited

On 3 November 2011, the Group announced that UrAmerica has entered into a strategic alliance agreement with Cameco Global South America Inc. ("Cameco"), which has subscribed US$10 million for a 19.9 per cent. interest in UrAmerica. Following completion of the Cameco subscription, the Group's interest in UrAmerica has been diluted to approximately 7.36 per cent.

18. Other

The unaudited condensed consolidated interim financial statements for the six months ended 30 September 2011 and 30 September 2010 does not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements.

The unaudited condensed consolidated interim financial statements for the six months ended 30 September 2011 and 30 September 2010 does not constitute statutory accounts and have been drawn up using accounting policies and presentation consistent with those applied in the audited accounts for the year ended 31 March 2011.

The financial information for the year ended 31 March 2011 has been extracted from the statutory accounts for that period.  The auditor's report for the year ended 31 March 2011 was unqualified.

A copy of this announcement is available from the Company's website, being www.urumetals.com.

ENDS

 

END

 

 

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