TIDMBMR
RNS Number : 3967A
BMR Group PLC
28 December 2017
BMR Group PLC
("BMR" or the "Company")
2017 Final Results
The Company releases its full year results for the year ended 30
June 2017 ("Results"). The Results will be available on the
Company's website, www.bmrplc.com, shortly.
For further information:
BMR Group PLC 020 7734 7282
Alex Borrelli, CEO and Chairman
WH Ireland Limited 020 7220 1666
NOMAD and Joint Broker
Chris Fielding, Head of Corporate Finance
Alex Bond, Executive
Peterhouse Corporate Finance 020 7469 0930
Joint Broker
Lucy Williams/ Duncan Vasey/ Heena Karani
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Note: This announcement has been reviewed by Geoff Casson, B.Sc.
(Hons), PhD, R Eng (Zambia), Member Engineering Institute of Zambia
(Metallurgy), General Manager of the Company's Zambian subsidiary,
Enviro Processing Ltd, who is a Qualified Person in accordance with
the guidance note for Mining, Oil & Gas Companies issued by the
London Stock Exchange in respect of AIM Companies.
CHAIRMAN'S STATEMENT
I am pleased to present below the financial statements of the
Company for the year ended 30 June 2017.
On one level, we are making good progress towards our principal
strategic objective of completing the construction of the Kabwe
plant. On another level, we are disappointed with the delay in
securing funds from African Compass International ("ACI"), further
to the agreement reached last year. This delay has significantly
impacted upon our timing for construction, our working capital
position and therefore our market valuation. I have previously
alerted shareholders to construction delays. However, we expect to
make up ground in recovering our shareholder value as we conclude
the agreements which are under advanced discussions relating to the
Kabwe plant with Jubilee Platinum Plc (Jubilee) and to Star Zinc
with Galileo Resources Plc (Galileo).
Despite these challenges, the BMR team has successfully
completed the design of the five tonnes per hour plant and started
plant construction with the intention of producing, initially, zinc
sulphate heptahydrate and lead sponge. Later additions to the plant
are intended to add capacity to produce zinc cathodes and vanadium
pentoxide.
Kabwe plant and Agreement with Jubilee
We concluded during the year that the construction of the Kabwe
plant would be best secured for the benefit of the Company by
finding an appropriate partner which would in effect underwrite
both the cost and contribute to the construction of the plant and
complement our processing methodology and operating capability.
Accordingly, we reached an agreement in October 2017 with Jubilee,
a c.GBP40 million market value AIM company engaged in mining
exploration and development with an African focus, which has a high
degree of technical, operational and managerial experience. Jubilee
is currently undertaking a technical due diligence review and we
were pleased to note the positive comments made by Jubilee in
November as to its confidence in the prospects for the Kabwe plant
and its successful completion, commissioning and subsequent
operation.
Under the terms agreed with Jubilee, BMR retains its 100%
interest in the Kabwe Large Scale Mining Licence and the mine
tailings assets, while Jubilee has the option to provide up to
GBP2.3 million of debt finance towards the construction of the
Kabwe plant upon agreement of the work programme and legal
documentation, to be completed by no later than 28 February 2018.
BMR will retain a minimum of 60% of the economic interest in the
long term post-tax profits of Kabwe operations. BMR and Jubilee are
targeting completion of the construction and commissioning of the
Kabwe plant by 30 June 2018 and commencement of operations and
revenue generation thereafter.
At the same time, included in the agreement with Jubilee will be
the processing for selective recovery and production of vanadium
pentoxide at the Kabwe plant. The design of the recovery circuit
for vanadium pentoxide is well advanced; however, this addition to
the plant will require approval from the Zambia Environmental
Management Agency (ZEMA), The Company has been advised by ZEMA that
approval by way of an Environmental Project Brief (EPB) would be
considered acceptable, being less onerous than a full Environmental
Social and Impact Assessment study (ESIA). Historic records for the
Kabwe mine indicate substantial tonnages of contained vanadium
pentoxide are present in the Wash Plant Tailings (WPT), the Leach
Plant Residues (LPR) and the Imperial Smelting Furnace Slag (ISFS)
which are amenable to recovery.
Facility agreement with ACI
We have given considerable latitude to ACI to fulfil its
commitments to the Company under the terms of the facility
agreement in terms of timing, while Jeremy Hawke has made, and
continues to make, extensive efforts on an almost daily basis to
secure the funding from our drawdown requests, without success.
This delay has significantly impacted upon our timing for plant
construction, our working capital position and therefore other
areas of our business.
Although BMR reserves all rights against ACI for its significant
breach of the terms of the facility agreement, the Board will
evaluate and monitor the progress of getting the required funding
from ACI in the coming months.
In the event that a significant proportion of ACI's funding
materialises and before we have entered into the agreements with
Jubilee, we would be in a position to consider financing for adding
capacity to the processing plant and the production of vanadium
pentoxide, once ZEMA's approval is obtained, as well as having
necessary working capital for the Company. Furthermore, we would
then be in a position to reconsider the off take agreement for zinc
sulphate heptahydrate after entering into the agreements with
Jubilee.
Agreements relating to the Large Scale Prospecting Licence 19653
- HQ - LPL ("Star Zinc") and Galileo
In August 2017, we entered into a binding term sheet with
Galileo, a UK based resource company quoted on AIM, which
established the framework for an agreement to process the resource
from Star Zinc at the Kabwe plant.
Under the terms agreed, Galileo advanced to BMR $591,600 which
was applied in the acquisition of Star Zinc and which will be
converted by Galileo into 51% in a joint venture company. We expect
to conclude a formal joint venture agreement with Galileo following
the transfer of the mining licence. Galileo will then undertake an
18 month work programme at a cost of $250,000, (in respect of which
it has placed $100,000 in escrow) using reasonable endeavours to
complete a preliminary economic assessment of Star Zinc ("PEA"),
following which further new shares will be issued to Galileo to
increase its aggregate equity interest in the joint venture company
to 85%. BMR has the right to increase its interest in the joint
venture company back to 25% on payment of $150,000 to Galileo
within 90 days of the date of completion of the joint venture
agreement (failing which the $100,000 in escrow is released to
BMR).
We have also agreed to enter into the proposed off take
agreement referred to above for ore from Star Zinc to be processed
at Kabwe, such terms to be determined as soon as reasonably
practicable following completion of the PEA to reflect capacity
requirements for the production of zinc from Star Zinc, as well as
relevant grade and resource life of the project set out in the PEA.
BMR intends to process Star Zinc ore in conjunction with its Leach
Plant Residues.
We have to pay the outstanding instalment of $170,000 for the
Star Zinc acquisition by 28 February 2018.
Kashitu Exploration, Zambia
We were pleased to announce in October 2017 a positive update on
our exploration work in the Kashitu section of our Large Scale
Mining Licence. Four phases of auger drilling were successfully
completed, resulting in a total of 450 soil samples being assayed
primarily for zinc, lead and silver mineralisation. Our combined
data base of results has enabled the Company to identify a central,
mineralised 'core' in the south east of Kashitu, approximately 300
metres x 400 metres with Zn grades between 1% and 40%, Pb between
1% and 18%, and Ag up to 16.8 grams/tonne.
Based on these encouraging results, the exploration campaign has
now been extended into an area further east, designated the
'Dambo', to investigate any potential accumulated mineralisation
from the central mineralised 'core', into which it drains. We also
intend to undertake a RAB drilling programme to investigate the
extent of near surface mineralisation.
Waelz Kiln Slag ("WKS"), Zambia
Following ZEMA's rejection of the Environmental Project Brief
application and a lack of progress with the Company's subsequent
appeal to sell WKS for block making, discussions were held with
ZEMA to explore alternative, acceptable solutions for the use of
WKS. As a result, the Company has now successfully completed
preliminary investigative test work to incorporate WKS into the
production of high performance cement for civil engineering
structures. Negotiations are currently being held with a major
cement manufacturer in Zambia to undertake a joint engineering
study to pursue this option.
Imperial Smelting Furnace Slag ("ISFS"), Zambia
We expect to finalise our metallurgical test work designed to
blend the ISFS with the processing of the leach plant residues at
the Kabwe plant, following execution of the joint venture agreement
with Jubilee.
ISFS and Vanadium JORC Compliant Resource Studies
We have previously stated the Company will commission a
full-JORC compliant survey of the ISFS.
As part of this survey, it is also intended to add vanadium as a
JORC compliant resource to the WPT, LPR and ISFS. This entails
establishing the ability to recover economically vanadium from
these residues for which we have now submitted a scope of works to
Alfred Knight Laboratories and await their fee estimates.
Ester Project, Portugal
The Ester licence hosts the historic Regoufe and Rio Frades
tungsten/tin mines. During the past 12 months, BMR and our partner,
Mineralia Minas, Geotecnia E Construcoes, LDA ("Mineralia") have
successfully completed a geological field campaign focused
particularly on the area close to the Regoufe Mine. Scoping
metallurgical test work carried out by Grinding Solutions using 80
kgs of samples collected during the first field campaign has
successfully defined a conceptual flow sheet, recovering WO3
(tungsten trioxide), Sn (tin), Au (gold) and Ag (silver), using a
combination of heavy media separation, gravity separation,
flotation and leaching. Fresh samples which have now been delivered
will be used to refine the flow sheet and further investigate the
effects on recovery of grind size, extended rate kinetics, open
circuit trials and cyanide leach for the recovery of Au.
We have fulfilled our EUR140,000 (c.GBP120,000) financial
obligation on the project and have informed Mineralia that we
intend to exercise shortly the option to secure 80% in a new joint
venture company. Further consideration will be due to Mineralia of
EUR100,000 (c.GBP90,000) upon the application and granting of a
preliminary exploitation licence by no earlier than 2019 and
EUR1,000,000 (c.GBP880,000) upon the application and granting of a
definitive exploitation licence thereafter.
Working capital, fund raisings and other matters
BMR remains under very tight financial control with minimal
overhead as our focus continues to be to deploy the required cash
primarily to the Kabwe plant construction.
During the year, while experiencing significant delays in
securing the funding from ACI, we entered into discussions with
alternative funders but concluded their terms were too onerous for
the Company.
In order to secure funds for our ongoing construction at the
Kabwe plant, we raised GBP620,000 before expenses in October 2016,
a further GBP414,000 before expenses from the exercise of warrants
in February 2017 and a further GBP800,000 in November 2017 to
secure funding for the Star Zinc acquisition and for working
capital purposes.
We continue the litigation pursuit against former associates and
advisers to the Company and believe we are close to achieving a
successful outcome.
We remain in discussions with HMRC on our appeal against the
de-registration of the Company for VAT purposes.
Results for the year
The Company reported a loss before taxation for the year of
GBP1.6 million (2016: GBP1.1 million) after administrative expenses
of GBP1.5 million (2016: GBP1.1 million). Exchange translation
differences on foreign operations were GBP158,000 (2016: GBP1.76
million).
Consolidated net assets at 30 June 2017 amounted to GBP10.23
million (2016: GBP10.35 million) including cash and cash
equivalents of GBP155,000 (2016: GBP1.01 million).
AGM and Resolutions
The resolutions for the forthcoming Annual General Meeting will
be contained in a separate Notice which will be made available to
shareholders in early January 2018 and on the website
www.bmrplc.com. The Directors recommend shareholders to vote in
favour of all the resolutions and a form of proxy is being
despatched to all shareholders for this purpose.
The AGM will be held at 11.00 a.m. on Wednesday 31 January
2018.
Outlook
We remain very positive about prospects for the successful
completion and commissioning of the Kabwe plant in 2018,
particularly having secured the interest of a major partner in
Jubilee and we look forward to successful conclusion of the joint
venture and operating agreements with Jubilee.
In addition, we have successfully secured the Star Zinc
acquisition together with our partner, Galileo. We expect to
conclude terms with Galileo for a joint venture agreement for the
mining of the ore and also an off take agreement for the processing
of the ore from Star Zinc to enrich our production at Kabwe.
We have also completed our financial commitments to secure the
majority interest in the Ester project in Portugal which we believe
has the potential for significant long-term value creation.
We have been particularly disappointed with ACI's lack of
deliverability which inter alia has resulted in us having to secure
equity funding at valuations well below what we believe to be an
appropriate valuation of the Company.
We remain committed to the success of the Kabwe plant and our
efforts will remain focused on delivering positive results for our
shareholders.
Alex Borrelli
Executive Chairman
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF
BMR GROUP PLC
Opinion
We have audited the financial statements of BMR Group plc (the
"Parent Company") and its subsidiaries (the "Group") for the year
ended 30 June 2017, which comprise:
-- the Group statement of comprehensive income for the year ended 30 June 2017;
-- the Group and parent company statements of financial position as at 30 June 2017;
-- the Group and parent company statements of cash flows for the year then ended;
-- the Group and parent company statements of changes in equity for the year then ended; and
-- the notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 30
June 2017 and of the Group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European Union
as applied in accordance with the provisions of the Companies Act
2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 3 which indicates that further funding
will be required to finance the Group's pre-production programme in
Zambia and the other office overheads. The Directors are confident
that the Company will be able to raise these funds however there is
no binding agreement in place to date.
These conditions indicate the existence of a material
uncertainty and may cast doubt on the Group and Company's ability
to continue as a going concern. Our opinion is not modified in
respect of this matter. The financial statements do not include the
adjustments that would result if the Group and Company were unable
to continue as a going concern.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the Group financial statements as a whole to be
GBP280,000 (2016: GBP220,000), based on 2% of Group total
assets.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of GBP8,400 (2016: GBP6,600). Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
Whilst the Parent Company's activity and accounting is in
London, the main activity of the Group are accounted for from its
main operating location in Kabwe, Zambia.
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be undertaken at each of
the components by us, as the primary audit engagement team. For the
full scope components in Kabwe, Zambia, where the work was
performed by component auditors, we determined the appropriate
level of involvement to enable us to determine that sufficient
audit evidence had been obtained as a basis for our opinion on the
Group as a whole.
The primary team led by the Senior Statutory Auditor was
ultimately responsible for the scope and direction of the audit
process. The primary team interacted regularly with the component
teams where appropriate during various stages of the audit,
reviewed key working papers and were responsible for the scope and
direction of the audit process. This, together with the additional
procedures performed at Group level, gave us appropriate evidence
for our opinion on the Group financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the 'Material uncertainty
related to going concern' section, we have determined that the key
audit matter was.
Key audit matter How the scope of our audit
addressed the key audit matter
===================== =====================================
Carrying value of The carrying value of development
development assets assets as at 30 June 2017
is GBP11million.
The assessment of the carrying
value requires management
to exercise judgement as
described in the 'critical
accounting judgements' section
of the financial statements
on page 41. Management's
assessment requires consideration
of a number of factors, including
but not limited to, the group's
intention to proceed with
a construction of Kabwe processing
activity and the funding
requirements to undertake
this construction. Recoverability
of non-current assets is
dependent on macroeconomic
assumptions and estimates
about future metal price,
inflation, discount and exchange
rates as well as forecast
assumptions related to future
production levels, reserves
and operating costs.
We evaluated management's
assessment of indicators
of impairment and recoverability
assessment for the Group's
non-current assets.
We are satisfied that the
recoverability of the assets
has been assessed in accordance
with the requirements of
impairment of assets, subject
to the matter noted in respect
of going concern assumption.
===================== =====================================
Our audit procedures in relation to this matter were designed in
the context of our audit opinion as a whole. They were not designed
to enable us to express an opinion on this matter individually and
we express no such opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the directors' report and strategic report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the
parent company and their environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement [set out on page xx], the directors are responsible for
the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and parent company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Leo Malkin
Senior Statutory Auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
St Bride's House
10 Salisbury Square
London EC4Y 8EH
27 December 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 June 2017
2017 2016
Notes GBP GBP
Administrative expenses 6 (1,515,868) (1,096,658)
Share based payment 19 - (31,714)
Total administrative expenses (1,515,868) (1,128,372)
Finance expense 6 (86,753) (2,078)
Finance income 6 430 2,759
Loss before tax (1,602,191) (1,127,691)
Taxation 9 - -
Loss for the year (1,602,191) (1,127,691)
Other comprehensive loss
Items that may be reclassified
subsequently to profit and
loss:
Exchange translation differences
on foreign operations 158,061 1,762,673
Total comprehensive (loss)/income
for the year attributable
to equity holders of the
parent company (1,444,130) 634,982
Loss per ordinary share
Basic and diluted (pence) 10 (0.88)p (0.75)p
The note on page 34to 60 form part of these of financial
statements
All amounts are derived from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
Company No. 02401127
2017 2016
Notes GBP GBP
Assets
Non-current assets
Intangible assets 11a 1,390,267 11,957,768
Development assets 11b 11,003,391 -
Property, plant and equipment 12 491,553 91,242
12,885,211 12,049,010
Current assets
Trade and other receivables 14 417,078 52,569
Cash and cash equivalents 15 154,969 1,014,354
572,047 1,066,923
Total assets 13,457,258 13,115,933
Liabilities
Current liabilities
Trade and other payables 17 947,860 537,819
Total current liabilities 947,860 537,819
Non current liabilities
Deferred tax 16 2,275,314 2,226,035
Total non current liabilities 2,275,314 2,226,035
Total liabilities 3,223,174 2,763,854
Net assets 10,234,084 10,352,079
Equity
Share capital 18 21,556,030 21,310,951
Share premium 18 22,841,009 21,759,953
Share based payment reserve 19 84,500 84,500
Merger reserve 1,824,000 1,824,000
Translation reserve 1,657,248 1,499,187
Retained earnings (37,728,703) (36,126,512)
Total equity 10,234,084 10,352,079
The financial statements were approved by the Board of Directors
and authorised for issue on 27 December 2017 and were signed on its
behalf by
M A Borrelli
Executive Chairman
CONSOLIDATED STATEMENT OF CASH FLOW
Year ended 30 June 2017
2017 2016
GBP GBP
Cash flows from operating
activities
Loss before tax (1,602,191) (1,127,691)
Adjustments to reconcile
net losses to cash utilised
:
Amortisation of exploration
and evaluation assets 102,443 98,870
Depreciation of property,
plant and equipment 28,775 39,604
Finance income (430) (2,759)
Share based payments - 31,714
Operating cash outflows before
movements in working capital (1,471,403) (960,262)
Changes in:
Trade and other receivables (364,509) 401,401
Trade and other payables 410,495 (211,032)
Net cash outflow from operating
activities (1,425,417) (769,893)
Investing activities
Interest received 430 2,759
Purchases of property, plant
and equipment (428,886) (67,605)
Disposals of property, plant
and equipment - 18,095
Purchases of development
and E&E assets (328,049) (411,054)
Net cash outflow from investing
activities: (756,505) (457,805)
Cash flows from financing
activities
Proceeds from issue of shares
and warrants 1,384,455 1,559,724
Share issues costs (58,320) (78,923)
Net cash inflow from financing
activities 1,326,135 1,480,801
Net (decrease)/increase in
cash and cash equivalents (855,787) 253,103
Effect of foreign exchange
rate changes (3,598) (24,630)
Cash and cash equivalents
at beginning of year 1,014,354 785,881
Cash and cash equivalents
at end of year 154,969 1,014,354
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 30 June 2017
Share Share Share Merger Translation Retained Total
capital premium based reserve reserve earnings equity
payment
reserve
GBP GBP GBP GBP GBP GBP GBP
----------------
As at 1 July
2015 20,892,288 20,697,815 52,786 1,824,000 (263,486) (34,998,821) 8,204,582
Total comprehensive
profit for
the year - - - - 1,762,673 (1,127,691) 634,982
Issue of shares 418,663 1,141,061 - - - - 1,559,724
Share issue
costs - (78,923) - - - - (78,923)
Share based
payment - - 31,714 - - - 31,714
As at 30 June
2016 21,310,951 21,759,953 84,500 1,824,000 1,499,187 (36,126,512) 10,352,079
Total comprehensive
loss for the
year - - - - 158,061 (1,602,191) (1,444,130)
Issue of shares 245,079 1,139,376 - - - - 1,384,455
Share issue
costs - (58,320) - - - - (58,320)
As at 30 June
2017 21,556,030 22,841,009 84,500 1,824,000 1,657,248 (37,728,703) 10,234,084
Reserves Description and purpose
Share capital - amount subscribed for share capital at nominal
value
Share premium - amounts subscribed for share capital in excess
of nominal value
Share based payment reserve - amount arising on the issue of
warrants and share options during the year
Merger reserve - amount arising from the issue of shares for
non-cash consideration
Translation reserve - amounts arising on re-translating the net
assets of overseas operations into the presentational currency
Retained earnings - cumulative net gains and losses recognised
in the consolidated income statement
COMPANY STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
Company No. 02401127
2017 2016
Notes GBP GBP
Assets
Non-current assets
Property, plant and equipment 12 12,477 7,601
Development assets 11b 194,220 -
Investment in subsidiaries 13 10,202,494 10,031,706
10,409,191 10,039,307
Current assets
Trade and other receivables 14 381,381 30,850
Cash and cash equivalents 15 11,205 954,260
392,586 985,110
Total assets 10,801,777 11,024,417
Liabilities
Current liabilities
Trade and other payables 17 930,207 517,325
Total liabilities 930,207 517,325
Net assets 9,871,570 10,507,092
Equity
Share capital 18 21,556,030 21,310,951
Share premium 18 22,841,009 21,759,953
Share based payment reserve 19 84,500 84,500
Merger reserve 1,824,000 1,824,000
Retained earnings (36,433,969) (34,472,312)
Total equity 9,871,570 10,507,092
The loss for the financial year dealt with in the financial
statements of the parent Company was GBP1,961,657 (2016: profit of
GBP841,259).
The financial statements were approved by the Board of Directors
and authorised for issue on 27 December 2017 and were signed on its
behalf by
M A Borrelli
Executive Chairman
COMPANY CASH FLOW STATEMENT
for the year ended 30 June 2017
2017 2016
GBP GBP
Cash flows from operating
activities
(Loss)/profit before tax (1,961,657) 841,259
Adjustments to reconcile
net losses to cash utilised
:
Foreign exchange gains on
foreign subsidiary loans (175,784) (1,615,588)
Depreciation of property,
plant and equipment 6,056 3,724
Impairment of investment
in subsidiaries 1,000,000 -
Finance income (430) (2,759)
Share based payments - 31,714
Operating cash outflows before
movements in working capital (1,131,815) (741,650)
Changes in:
Trade and other receivables (350,531) 151,172
Trade and other payables 412,882 (215,905)
Net cash outflow from operating
activities (1,069,464) (806,383)
Investing activities
Interest received 430 2,759
Loans to subsidiaries (995,004) (446,738)
Purchases of property, plant
and equipment (10,932) (8,555)
Disposals of property, plant
and equipment - 18,095
Purchases of development
and E&E assets (194,220) -
Net cash outflow from investing
activities: (1,199,726) (434,439)
Cash flows from financing
activities
Proceeds from issue of shares
and warrants 1,384,455 1,559,724
Share issue costs (58,320) (78,923)
Net cash inflow from financing
activities 1,326,135 1,480,801
Net (decrease)/increase in
cash and cash equivalents (943,055) 239,979
Cash and cash equivalents
at beginning of year 954,260 714,281
Cash and cash equivalents
at end of year 11,205 954,260
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 30 June 2017
Share Share premium Share based Merger Retained Total
capital payment reserve earnings equity
reserve
GBP GBP GBP GBP GBP GBP
As at 1 July
2015 20,892,288 20,697,815 52,786 1,824,000 (35,313,571) 8,153,318
Total comprehensive
profit for
the year - - - - 841,259 841,259
Issue of shares 418,663 1,141,061 - - - 1,559,724
Share issue
costs - (78,923) - - - (78,923)
Share based
payment - - 31,714 - - 31,714
As at 30 June
2016 21,310,951 21,759,953 84,500 1,824,000 (34,472,312) 10,507,092
Total comprehensive
loss for the
year - - - - (1,961,657) (1,961,657)
Issue of shares 245,079 1,139,376 - - - 1,384,455
Share issue
costs - (58,320) - - - (58,320)
As at 30 June
2017 21,556,030 22,841,009 84,500 1,824,000 (36,433,969) 9,871,570
Reserves Description and purpose
Share capital - amount subscribed for share capital at nominal
value
Share premium - amounts subscribed for share capital in excess of nominal value
Share based payment reserve - amount arising on the issue of
warrants and share options during the year
Merger reserve - amount arising from the issue of shares for
non-cash consideration
Translation reserve - amounts arising on re-translating the net
assets of overseas operations into the presentational currency
Retained earnings - cumulative net gains and losses recognised
in the consolidated income statement
NOTES TO THE ACCOUNTS
Year ended 30 June 2017
1. GENERAL INFORMATION
BMR Group PLC (the 'Company' or "BMR") is incorporated and
domiciled in the United Kingdom. The address of the registered
office is 35 Piccadilly, London W1J 0DW.
The consolidated financial statements include the financial
information of the Company and its subsidiary undertakings
(together, the "Group"). The nature of the Group's operations and
its principal activity is that of the acquisition, evaluation and
development of mineral stockpiles, in particular tailings. The
Group's projects are located in Zambia and Portugal.
2. ADOPTION OF NEW AND REVISED STANDARDS
The directors have considered those Standards and
Interpretations, which have not been applied in the financial
information but are relevant to the Group's operations, that are in
issue but not yet effective and do not consider that any will have
a material impact on the future results of the Group.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRSs') as issued by
the International Accounting Standards Board ('IASB') and as
adopted by the European Union ('EU') and those parts of the
Companies Act 2006 applicable to companies reporting under
IFRSs.
The principal accounting policies adopted are set out below.
The financial statements are presented in Pounds Sterling
("GBP"). For reference the year end exchange rate from Pounds
Sterling to US Dollar ("US$") was 1.31 (2016: 1.339) where the
functional currency of Zambian subsidiaries are accounted for in
US$.
As permitted by Section 408 of the Companies Act 2006, the
Company has elected not to present its Income Statement for the
year. The Company reported a loss for the financial year ended 30
June 2017 of GBP1,961,657 (2016: profit of GBP841,259).
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 30 June each year. Control is
achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the financial statements of subsidiaries to bring accounting
policies used into line with those used by the Group. All
intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the Board
of Directors.
Going concern
After making enquiries, the Directors have a reasonable
expectation that the Company has adequate resources with a
combination of its cash balances and expected funding from Jubilee
Platinum PLC for the Kabwe plant following completion of its
technical review to continue in operational existence for the
foreseeable future. In the event that a significant proportion of
ACI's funding materialises for the benefit of BMR and before the
Company enters into the agreements with Jubilee, BMR would be in a
position to consider financing for adding capacity to the
processing plant for generating vanadium pentoxide, once ZEMA's
approval is obtained, as well as having necessary working capital
for the Company. For this reason, they continue to adopt the going
concern basis in preparing the financial statements.
The operational requirements of the Company comprise maintaining
a Head Office in the UK with a Board comprising two executive
directors and one non-executive Director with two consultants for,
amongst other things, determining and implementing strategy and
managing operations. In addition, the Group has a team in Kabwe,
Zambia for establishing facilities for the processing of its
tailings into zinc and lead concentrates and a geologist and
consultants for the project in Portugal, all under the over-sight
of the Board.
The Directors have considered the current level of cash
balances, the facility with ACI and the operational requirements of
the Group in the UK, Zambia and Portugal over the next 12 months
and the commencement of the establishment, and commissioning, of a
plant in Zambia in Q2 2018. The Directors believe that the process
methodology for the plant in Zambia being developed by the Group
working with technical partners is capable of being patented. The
Directors expect the plant to be capable of processing at the rate
of five tonnes per hour and operating on a 24/7 basis once fully
operational.
In the longer term, the Directors expect the Group to generate
revenues from its WKS, subject to the successful outcome of
engineering studies for its use in high performance cement and
subject to ZEMA approval.
In considering the appropriateness of this basis of preparation,
the Directors have reviewed the Group and the Company's working
capital forecasts. They believe that the funds raised recently,
together with further options being considered, will be sufficient
for the Group's purposes for a minimum of 12 months from the date
of the approval of the financial statements. The financial
statements have been prepared on a going concern basis.
However, the Group's ability to continue as a going concern is
reliant upon successfully obtaining funds as it moves towards
production and to finance its ongoing working capital requirements.
The directors have therefore considered this to be an uncertainty
which may cast significant doubt about the Group's ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the Group was unable
to continue as a going concern.
Foreign currencies
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency).For the purpose of the
consolidated financial statements, the results and financial
position of each Group company are expressed in GBP, which is the
functional currency of the Company, and the presentation currency
for the consolidated financial statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the functional
currency of each Group company ('foreign currencies') are recorded
in the functional currency at the rates of exchange prevailing on
the dates of the transactions. At each balance sheet date, monetary
assets and liabilities that are denominated in foreign currencies
are retranslated into the functional currency at the rates
prevailing on the balance sheet date. Non-monetary assets and
liabilities carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences are recognised in the income statement in
the period in which they arise except for exchange differences on
monetary items receivable from or payable to a foreign operation
for which settlement is neither planned nor likely to occur, which
form part of the net investment in a foreign operation, and which
are recognised in the foreign currency translation reserve and
recognised in the income statement on disposal of the net
investment.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly
during that period, in which case the exchange rates at the date of
transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation
reserve. Such translation differences are recognised as income or
as expenses in the period in which the operation is disposed
of.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Property, plant and equipment
Property, plant and equipment are carried at cost less
accumulated depreciation and any recognised impairment loss.
Depreciation and amortisation is charged so as to write off the
cost or valuation of assets, other than land, over their estimated
useful lives, using the straight-line method, on the following
bases:
Motor vehicles 25%
Other 25%
The gain or loss arising on disposal or retirement of an asset
is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in income.
Impairment of property, plant and equipment (including
development assets)
At each balance sheet date, the Group reviews the carrying
amounts of its property, plant and equipment to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of the fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value for money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
Intangible assets
Intangible assets comprise land use rights, mining licences and
exploration & evaluation assets.
The land use rights and mining licences are stated at cost less
accumulated amortisation and impairment losses. They are amortised
using the straight line basis over the unexpired period of the
rights.
Exploration and evaluation costs
All costs of E&E are initially capitalised as E&E
assets. Payments to acquire the legal right to explore, costs of
technical services and studies, seismic acquisition, exploratory
drilling and testing are capitalised as intangible E&E
assets.
The Group applies the full cost method of accounting for E&E
costs, having regard to the requirements of IFRS 6 Exploration for
and Evaluation of Mineral Resources. Under the full cost method of
accounting, costs of exploring for and evaluating mineral resources
are accumulated by reference to appropriate cost centres being the
appropriate licence area, but are tested for impairment on a cost
pool basis as described below.
E&E assets comprise costs of (i) E&E activities that are
ongoing at the balance sheet date, pending determination of whether
or not commercial reserves exist and (ii) costs of E&E
activities associated with adding to the commercial reserves of an
established cost pool, did not result in the discovery of
commercial reserves.
Such costs include directly attributable overheads, including
the depreciation of property, plant and equipment utilised in
E&E activities, together with the cost of other materials
consumed during the exploration and evaluation phases.
Costs incurred prior to having obtained the legal rights to
explore an area are expensed directly to the income statement as
they are incurred.
Treatment of E&E assets at conclusion of appraisal
activities
Intangible E&E assets related to each exploration
licence/prospect are carried forward, until the existence (or
otherwise) of commercial reserves has been determined. If
commercial reserves have been discovered, the related E&E
assets are assessed for impairment on a cost pool basis as set out
below, and any impairment loss of the relevant E&E assets is
then reclassified as development and production assets.
Development assets
Cost is the fair value of consideration required to acquire and
develop the asset and includes the purchase price, acquisition of
mineral rights, costs directly attributable to bring the asset to
its location and condition necessary for it to be capable of
operating in the manner intended by management, the initial
estimate of any decommissioning obligation and, for assets that
take a substantial period of time to get ready for their intended
use, borrowing costs.
Development assets are amortised to their residual values using
the unit of production method when the products are ready for sale
or use. In the event that the expected future economic benefits are
no longer probable of being recovered, the development assets are
written down to its recoverable amount.
Impairment of assets
E&E assets are assessed for impairment when facts and
circumstances suggest that the carrying amount may exceed its
recoverable amount. Such indicators include, but are not limited
to, those situations outlined in paragraph 20 of IFRS 6 Exploration
for and Evaluation of Mineral Resources and include the point at
which a determination is made as to whether or not commercial
reserves exist.
Where there are indications of impairment, the E&E assets
concerned are tested for impairment. Where the E&E assets
concerned fall within the scope of an established full cost pool,
the E&E assets are tested for impairment together with all
development and production assets associated with that cost pool,
as a single cash generating unit.
The aggregate carrying value is compared against the expected
recoverable amount of the pool, generally by reference to the
present value of the future net cash flows expected to be derived
from production of commercial reserves. Where the E&E assets to
be tested fall outside the scope of any established cost pool,
there will generally be no commercial reserves and the E&E
assets concerned will generally be written off in full.
Any impairment loss is recognised in the income statement as
additional depreciation and amortisation, and separately
disclosed.
The Group considers the whole of Zambia to be one cost pool and
therefore aggregates all Zambian assets for the purpose of
determining whether an impairment of E&E assets has
occurred.
Investment in subsidiaries
In the Company's financial statements, investment in
subsidiaries are stated at cost and reviewed for impairment if
there are any indications that the carrying value may not be
recoverable.
Financial instruments
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
De-recognition of financial assets and financial liabilities
The Group derecognises a financial asset only when the
contractual rights to cash flows from the asset expire; or it
transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another entity. If the Group
neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and
an associated liability for the amount it June have to pay. If the
Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues to recognise
the financial asset and also recognises a collateralised borrowing
for the proceeds received. The Group derecognises financial
liabilities when the Group's obligations are discharged, cancelled
or expired.
Trade and other receivables
Trade and other receivables are measured at initial recognition
at fair value, and are subsequently measured at amortised cost less
any provision for impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash with three months or
less remaining to maturity and are subject to an insignificant risk
of changes in value.
Impairment of financial assets
The Group assesses at each reporting date whether there is
objective evidence that a financial asset or a group of financial
assets is impaired. In the case of a financial asset classified as
available for sale, a significant or prolonged decline in the fair
value of the financial asset below its cost is considered as an
indicator that the financial asset is impaired. If any such
evidence exists for available-for-sale financial assets, the
cumulative loss - measured as the difference between the
acquisition cost and the current fair value, less any impairment
loss on that financial asset previously recognised in profit or
loss - is removed from equity and recognised in the income
statement. Impairment losses recognised in the income statement on
financial assets are not reversed through the income statement.
Trade and other payables
Trade and other payables are initially measured at fair value,
and are subsequently measured at amortised cost, using the
effective interest rate method.
Provisions
Provisions are recognised when the Group has a legal or
constructive obligation, as a result of past events, for which it
is probable that an outflow of economic resource will result and
that outflow can be reliably measured.
Rehabilitation
Provisions are made for the estimated rehabilitation costs
relating to areas disturbed during exploration activities up to
reporting date but not yet rehabilitated. Changes in estimate are
dealt with on a prospective basis as they arise.
Share-based payments
The Group has applied IFRS 2 Share-based Payment for all grants
of equity instruments.
The Group issues equity-settled share-based payments to its
employees. Equity-settled share-based payments are measured at fair
value at the date of grant. The fair value determined at the grant
date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of the shares that will eventually vest.
Fair value is measured using the Black Scholes model. The
expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations. The inputs to
the model include: the share price at the date of grant, exercise
price expected volatility, risk free rate of interest.
Share capital
Financial instruments issued by the Group are treated as equity
only to the extent that they do not meet the definition of a
financial liability. The Group's ordinary shares are classified as
equity instruments.
For the purposes of the disclosures given in note 18, the Group
considers its capital to be total equity. There have been no
changes in what the Group considers to be capital since the
previous period.
The Group is not subject to any externally imposed capital
requirements.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's accounting policies, which are
described in note 3, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of the assets
and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
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 the revision and future
periods if the revision affects both the current and future
periods.
The following are the critical judgements and estimations that
the Directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in the financial statements:
i) Impairment of development assets
Processing operations are large, scarce assets requiring
significant technical and financial resources to operate. Their
value may be sensitive to a range of characteristics unique to each
asset and key sources of estimation uncertainty include mineral
reserve estimates, future cash flow expected to arise from the
cash-generating unit and a suitable discount rate.
In performing impairment reviews, the Group assesses the
recoverable amount of its operating assets principally with
reference to fair value less costs of disposal, assessed using
discounted cash flow models. There is judgement in determining the
assumptions that are considered to be reasonable and consistent
with those that would be applied by market participants as outlined
above.
The carrying amount of the Group's development assets at 30 June
2017 was GBP11,003,391 (2016: GBP10,552,405). No impairments were
made during the year.
The methods and key assumptions in relation to the calculation
of the estimates are detailed in note 11.
ii) Going concern
As disclosed in note 3 the Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. For this reason,
the Company continues to adopt the going concern basis in preparing
the financial statements.
iii) Provisions for liabilities
As a result of exploration activities the Group is required to
make provision for rehabilitation. Signi cant uncertainty exists as
to the amount of rehabilitation obligations which may be incurred
due to the impact of possible changes in environmental legislation.
Due to the early stage of exploration activity no signi cant damage
has been caused and, therefore, no provision has been recognised at
30 June 2017 (2016: GBPnil) in the Group and the Company balance
sheets.
5. SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments and making strategic decision, has been identified as the
Board of Directors. The Board of Directors considers there to be
only one operating segment, the exploitation and development of
mineral resources and only three (2016: two) geographical segments
being Zambia, Portugal and the UK.
The geographical split of loss and assets and liabilities is as
follows:
UK Zambia Portugal Total
GBP GBP GBP GBP
2017
Loss before tax (965,366) (473,722) (163,103) (1,602,191)
Non-current assets
Intangible exploration
and evaluation assets 194,220 12,199,438 - 12,393,658
Property, plant
and equipment 12,477 479,076 - 491,553
206,697 12,678,514 - 12,885,211
UK Zambia Total
GBP GBP GBP
2016
Loss before tax (781,818) (345,871) (1,127,689)
Non-current assets
Intangible exploration
and evaluation assets - 11,957,768 11,957,768
Property, plant and
equipment 7,601 83,641 91,242
7,601 12,041,409 12,049,010
6. LOSS FOR THE YEAR
The loss for the year has been arrived at after charging /
(crediting):
2017 2016
GBP GBP
Depreciation of property, plant
and equipment (note 12) 28,775 39,604
Amortisation of intangibles 102,443 98,870
Operating lease costs (Office
rental costs) 32,234 72,184
Staff costs (note 8) 307,309 229,304
Share based payment charge - 31,714
Finance charge 86,753 2,078
Finance income (430) (2,759)
-------- --------
7. AUDITORS' REMUNERATION
The remuneration of the auditors can be analysed as follows:
2017 2016
GBP GBP
Fees payable to the company's
auditor for the audit of the
company and group's financial
statements 23,500 22,500
Fees payable to the company's
auditor for other services:
Other services relating to VAT
advice 39,000 13,500
Other services relating to taxation
work 3,675 2,750
------------------------ ------------------------
66,175 38,750
------------------------ ------------------------
8. STAFF COSTS
2017 2016
Number Number
Directors 3 3
Consultant 2 2
Support staff (including Zambia
employees) 35 31
------- -------
The average monthly number of
employees 40 36
------- -------
Their aggregate remuneration
comprised:- GBP GBP
Fees 153,012 139,504
Wages and salaries 154,297 89,800
Share based option charges - 23,961
307,309 253,265
-------- --------
Included within staff costs GBP153,012 (2016: GBP139,504)
relates to amounts in respect of Directors.
The highest paid director's emoluments were GBP72,000 (2016:
GBP64,500)
9. TAXATION
2017 2016
GBP GBP
Current tax
UK corporation tax - -
Overseas taxation - -
----- -----
- -
----- -----
Deferred tax
UK corporation tax - -
Overseas taxation - -
----- -----
- -
----- -----
The taxation credit for each year can be reconciled to the loss
per the consolidated income statement as follows:
2017 2016
GBP GBP
Loss before tax (1,602,191) (1,127,691)
------------ ------------
Tax credit at the standard rate
of tax in the UK 320,438 225,538
Tax effect of non-deductible
expenses (32,436) (27,671)
Deferred tax asset not recognized (288,002) (197,867)
------------ ------------
Tax for the year - -
------------ ------------
The standard rate of corporation tax in the UK applied during
the year was 20% (2016: 20%).
At 30 June 2017, the Company and Group are carrying forward
estimated tax losses of GBP10.7m (2016: GBP9.1m) in respect of
various activities over the years. No deferred tax asset was
recognized in respect to these accumulated tax losses as there is
insufficient evidence that the amount will be recovered in future
years.
The Group has incurred indefinitely available tax losses of
GBP4.60m (2016: GBP3.99m) to carry forward against future taxable
income of the subsidiaries in which the losses arose and they
cannot be used to offset taxable profits elsewhere in the
Group.
10. LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the
consolidated net loss for the year attributable to ordinary equity
holders of the parent company by the weighted average number of
ordinary shares outstanding during the year. The calculation of the
basic and diluted loss per share is based on the following
data:
2017 2016
GBP GBP
Loss before tax
Loss for the purpose of basic
loss per share being consolidation
net loss attributable to equity
holders of the Company 1,602,191 1,127.689
------------ ------------
2017 2016
Number Number
Number of shares
Weighted average number of ordinary
shares for the purpose of basic
loss per shares 182,267,931 150,964,537
------------ ------------
Loss per ordinary share
Basic and diluted 0.88p 0.75
------------ ------------
At the balance sheet date there were 24,526,029 (2016:
66,392,305) potentially dilutive Ordinary Shares. Potentially
dilutive ordinary shares relate to warrants and share options
issued to directors, consultants and third parties. In 2017 and
2016, the potential Ordinary shares are anti-dilutive and therefore
the diluted loss per share has not been calculated.
11a. INTANGIBLE ASSETS
Land Small Large Exploration Total
use Rights scale scale and evaluation GBP
GBP licence licence assets
GBP GBP GBP
GROUP
Cost
At 30 June 2015 2,769,918 499,841 1,696,484 9,292,115 14,258,358
Additions - - - 411,054 411,054
Foreign exchange
difference 303,389 246,985 - 1,373,236 1,923,610
At 30 June 2016 3,073,307 746,826 1,696,484 11,076,405 16,593,022
Additions - - - 295,069 295,069
Foreign exchange
difference 93,159 16,533 - 155,917 265,609
Transfer to development
assets - - - (11,527,391) (11,527,391)
At 30 June 2017 3,166,466 763,359 1,696,484 - 5,626,309
Accumulated depreciation
At 30 June 2015 (1,953,879) (272,468) (1,696,484) (524,000) (4,446,831)
Charge for the year (31,466) (67,404) - - (98,870)
Disposals - (89,553) - - (89,553)
At 30 June 2016 (1,985,345) (429,425) (1,696,484) (524,000) (4,635,254)
Charge for the year (23,600) (78,843) - - (102,443)
Foreign exchange
difference (15,346) (6,999) - - (22,345)
Transfer out - - - 524,000 524,000
At 30 June 2017 (2,024,291) (515,267) (1,696,484) - (4,236,042)
Carrying amount
At 30 June 2017 1,142,175 248,092 - - 1,390,267
At 30 June 2016 1,087,962 317,401 - 10,552,405 11,957,768
At 30 June 2015 816,039 227,373 - 8,768,115 9,811,527
Depreciation of the small scale licence is applied by reference
to the period of the licence granted and the large scale licence
has been fully impaired.
During the year, the Group incurred capital expenditure of
GBP295,000 as an addition to exploration & exploration
(E&E) asset, of which the Company paid approximately GBP194,000
associated to the acquisition of Star Zinc. The Group considered
these E&E assets to be proven and commercial viable and they
are reclassified to development assets.
11b. DEVELOPMENT ASSETS
Group Company
GBP GBP
Cost
At 1 July 2016 - -
Transfer from intangible
assets 11,527,391 194,220
At 30 June 2017 11,527,391 194,220
Accumulated depreciation
At 1 July 2016 - -
Transfer in (524,000) -
Foreign exchange - -
difference
At 30 June 2017 (524,000) -
Carrying amount
At 30 June 2017 11,003,391 194,220
At 30 June 2016 - -
Incorporated in the development assets is a fair value
adjustment of GBP6,885,175 as a result of the acquisition of Enviro
Mining Limited on 20 June 2011 and its two subsidiary companies,
Enviro Processing Limited and Enviro Props Limited (together
"Enviro Group"). The Enviro Group owns the leasehold rights and
title to Stand 5187 containing the stockpiles at Kabwe and the
contents of the washplant and leachplant tailings. No impairment
has been made on the fair value this year on the basis that third
party reports and internal evaluation of future income streams
allied with the associated production costs generate net present
values, using conservative discount rates, which are well in excess
of the costs capitalised as development assets in the balance
sheet.
Net Book
Value
of Assets Fair Value
Acquired Adjustment Fair Value
GBP GBP GBP
Development assets 2,514,728 8,561,678 11,076,406
Other net assets acquired 295,069 - 295,069
Foreign exchange difference (33,616) 189,532 155,916
----------- ------------ -----------
2,776,181 8,751,210 11,527,391
Impairment provision (274,000) (250,000) (524,000)
----------- ------------ -----------
2,502,181 8,501,210 11,003,391
Deferred tax (note 16) - (2,275,314) (2,275,314)
2,502,181 6,225,896 8,728,077
On the basis of third party reports incorporating values derived
from JORC classifications and internal evaluation of future income
streams allied with the associated production costs, net present
values, using conservative discount rates, have been generated
which are well in excess of this figure and the overall costs
capitalised as intangible assets in the balance sheet. The
impairment assessment carried out relates to the exploitation and
development of mineral resources, as the one cash generating unit
("CGU") representing the only operating segment. The recoverable
amount is determined from value in use calculations based on cash
flow projections from revenue and expenditure forecasts covering a
5 year period to 2022. The growth rate is assumed to be zero and
the level of production is constant on the basis the main plant is
assumed to be at the most efficient capacity over the period of
extraction., The key assumptions used are as follows:
2017 2016
Discount rate 20% 20%
Prevailing Metal prices**
(per tonne)
* Zinc $2,510 $2,377
* Lead $3,169 $2,105
Metal recovery rate from
processing as follow:
* Zinc 80% 80%
* Lead 86% 85%
Estimated monthly tonnage
of Zinc and Lead for
the main plant (JORC
Compliant) 31,000 29,200
** Prevailing metal prices extracted from London Metal Exchange
as at 6 November 2017
The discount rate is based on the specific circumstances of the
Group and its operating segments and is derived from its WACC, with
appropriate adjustments made to reflect the risks specific to the
CGU and to determine the pre-tax rate. In considering the discount
rates applying to the CGUs, the directors have considered the
relative sizes, risks and the inter-dependencies of its CGUs. No
reasonably possible change in a key assumption would produce a
significant movement in the carrying value of the CGUs and
therefore no sensitivity analysis is presented.
12. PROPERTY PLANT AND EQUIPMENT
Construction Land and Motor
in Progress Buildings Vehicles Other Total
GBP GBP GBP GBP GBP
GROUP
Cost
At 30 June 2015 - 23,707 65,197 63,733 152,637
Additions - - - 59,774 59,774
Disposals - - - (36,190) (36,190)
Foreign exchange
difference - 13,355 41,830 11,597 66,782
At 30 June 2016 - 37,062 107,027 98,914 243,003
Additions 399,728 12,576 - 14,730 427,034
Disposals - - - - -
Foreign exchange
difference - 820 1,046 1,586 3,452
At 30 June 2017 399,728 50,458 108,073 115,230 673,489
Accumulated depreciation
At 30 June 2015 - - (51,810) (34,903) (86,713)
Charge for the
year - (2,613) (15,760) (21,231) (39,604)
Disposals - - - 18,095 18,095
Foreign exchange
difference - - (34,862) (8,677) (43,539)
At 30 June 2016 - (2,613) (102,432) (46,716) (151,761)
Charge for the
year - (698) (2,369) (25,708) (28,775)
Disposals - - - - -
Foreign exchange
difference - (454) (977) 31 (1,400)
At 30 June 2017 - (3,765) (105,778) (72,393) (181,936)
Carrying amount
At 30 June 2017 399,728 46,693 2,295 42,837 491,553
At 30 June 2016 - 34,449 4,595 52,198 91,242
At 30 June 2015 - 23,707 13,387 28,830 65,924
Other Total
GBP GBP
COMPANY
Cost
At 30 June 2015 42,532 42,532
Additions 8,555 8,555
Disposals (36,190) (36,190)
At 30 June 2016 14,897 14,897
Additions 10,932 10,932
Disposals - -
At 30 June 2017 25,829 25,829
Accumulated depreciation
At 30 June 2015 (21,667) (21,667)
Charge for the year (3,724) (3,724)
Disposals 18,095 18,095
At 30 June 2016 (7,296) (7,296)
Charge for the year (6,056) (6,056)
Disposals - -
At 30 June 2017 (13,352) (13,352)
Carrying amount
At 30 June 2017 12,477 12,477
At 30 June 2016 7,601 7,601
At 30 June 2015 20,865 20,865
13. INVESTMENT IN SUBSIDIARIES
Cost of Long Term
Investment Loans Total
GBP GBP GBP
COMPANY
Cost at 30 June 2015 4,676,701 3,292,679 7,969,380
Advance to subsidiary
undertakings - 446,738 446,738
Effect of forex exchange
rate charges - 1,615,588 1,615,588
At 30 June 2016 4,676,701 5,355,005 10,031,706
Advance to subsidiary
undertakings - 995,004 995,004
Effect of forex exchange
rate charges - 175,784 175,784
Impairment loss (1,000,000) - (1,000,000)
At 30 June 2017 3,676,701 6,525,793 10,202,494
The Company had investment in the following subsidiary
undertakings at 30 June 2017 and 30 June 2016:
Country of Ordinary Ordinary
incorporation Shares shares
held held
Name Activity and operation Company Group
Enviro Mining Holding Company
Limited Mauritius 100% 100%
Enviro Processing Tailings processing
Limited Zambia - 100%
Enviro Props Property holding
Limited Zambia - 100%
The Group holding of 100% in the Zambian subsidiaries is held as
to 99% by Enviro Mining Limited and 1% by a nominee on behalf of
the Company.
The Group holding of 100% in the Mauritius subsidiary is held as
to 95% by the Company and 5% by a nominee on behalf of the
Company.
14. TRADE AND OTHER RECEIVABLES
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Group and Company
Prepayment 34,716 34,955 30,567 30,850
Other receivables 350,840 2,356 350,814 -
Vat receivable 31,522 15,258 - -
417,078 52,569 381,381 30,850
========= ======== ========= ========
As outlined in note 17, a provision has been made in respect of
a VAT assessment received from HM Revenue & Customs
("HMRC").
The fair value of trade and other receivables is not
significantly different from the carrying value and none of the
balances are past due.
15 CASH AND CASH EQUIVALENTS
The Group's cash and cash equivalents as at 30 June 2017 of
GBP154,969 (2016: GBP1,014,354) comprise cash at bank and in
hand.
The Company's cash and cash equivalents as at 30 June 2017 of
GBP11,205 (2016: GBP954,260) comprise cash at bank and in hand.
The Directors consider that the carrying amount of these assets
approximates their fair value.
16. DEFERRED TAX
Differences between IFRS and statutory tax rules (in the United
Kingdom and elsewhere) give rise to temporary differences between
the carrying values of certain assets and liabilities for financial
reporting purposes and for income tax purposes.
GBP
Deferred tax liabilities
At 30 June 2016 and 1 July
2016 2,226,035
Foreign exchange difference
At 49,279
-----------
At 30 June 2017 2,275,314
-----------
The deferred tax liabilities arose on the acquisition of
exploration and evaluation assets in 2011. These will be released
to the income statement as the fair value of the related
exploration and evaluation assets is amortised.
17. TRADE AND OTHER PAYABLES
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Trade payables 494,328 119,395 494,328 119,395
Other taxes and
social security 10,223 - 7,379 -
Vat payable 374,350 374,350 374,350 374,350
Accruals 68,959 44,074 54,150 23,580
--------- --------- --------- ---------
947,860 537,819 930,207 517,325
========= ========= ========= =========
BMR was de-registered for VAT with effect from 1 August 2015 on
the basis there was no effective consideration for any services
provided as no invoices had been raised by BMR and issued to its
subsidiaries and that management services were not considered
supplies for VAT purposes. A provision has been made for GBP374,350
(2016 - GBP374,350) in relation to VAT previously claimed including
interest. The Company has appealed and submitted its case for
continued registration after having sought professional advice.
18. SHARE CAPITAL AND SHARE PREMIUM
2017 2016
Issued equity share
capital Number GBP Number GBP
Issued and fully
paid
Ordinary shares
of GBP0.01 each 198,339,565 1,983,396 173,831,727 1,738,317
Deferred shares
of GBP0.009 each 1,346,853,817 12,121,684 1,346,853,817 12,121,684
Deferred shares
of GBP0.01 each 19,579,925 195,799 19,579,925 195,799
Deferred shares
of GBP0.04 each 181,378,766 7,255,151 181,378,766 7,255,151
============ ============
21,556,030 21,310,951
============ ============
The deferred shares of GBP0.01 each and GBP0.009 each confer no
rights to vote at a general meeting of the Company or to a
dividend. On a winding-up the holders of the deferred shares are
only entitled to the paid up value of the shares after the
repayment of the capital paid on the ordinary shares and
GBP5,000,000 on each ordinary share.
The deferred shares of GBP0.04 each have no rights to vote or to
participate in dividends and carry limited rights on return of
capital.
Shares issued during the year:
Number of Nominal value Share Premium
shares
GBP GBP
At 30 June
2015 131,965,451 1,319,654 20,697,815
Ordinary shares
issued during
the year 41,866,276 418,663 1,141,061
Share issue
costs - - (78,923)
At 30 June
2016 173,831,727 1,738,317 21,759,953
------------ -------------- --------------
Ordinary shares
issued during
the year 24,507,838 245,079 1,139,376
Share issue
costs - - (58,320)
At 30 June
2017 198,339,565 1,983,396 22,841,009
------------ -------------- --------------
Shares Issued Number of Shares Nominal Value Share Premium
28 October 2015 at GBP0.01 each 18,750,000 187,500 562,500
28 February 2016 at GBP0.01 each 13,817,453 138,175 276,349
22 April 2016 at GBP0.01 each 9,298,823 92,988 302,212
At 30 June 2016 41,866,276 418,663 1,141,061
28 October 2016 at GBP0.01 each 9,253,731 92,537 527,463
16 February 2017 at GBP0.01 each 5,920,774 59,208 355,246
28 June 2017 at GBP0.01 each 9,333,333 93,334 256,667
At 30 June 2017 24,507,838 245,079 1,139,376
19. SHARE BASED PAYMENTS
Equity settled share-based payments
The Company has a share option scheme for directors, employees
and consultants.
30 June 30 June
2016 or Cancelled Granted Exercised 2017 or
date of or during during date of
appointment Lapsed the year the year resignation
Name Price Note Number Number Number Number Number
----------------- ----- ---- ------------ ------------ --------- --------- ------------
SHARE OPTIONS
M A Borrelli 6p A 8,210,243 - - - 8,210,243
J N Hawke 6p A 3,926,637 - - - 3,926,637
Consultants 6p A 5,246,292 - - - 5,246,292
Total share
options 17,383,172 - - - 17,383,172
SHARE WARRANTS
Novum Securities 28p B 7,142,857 - - - 7,142,857
Others 7p C 41,866,276 (45,199,233) 9,253,731 5,920,774 -
Total Share
Warrants 49,009,133 (45,199,233) 9,253,731 5,920,774 7,142,857
============ ============ ========= ========= ============
Total Share
Options and
Warrants 66,392,305 (45,199,233) 9,253,731 5,920,774 24,526,029
============ ============ ========= ========= ============
Note A - Exercisable at any time before 12 June 2020
Note B - Exercisable at any time before 7 July 2017
Note C - Exercisable in the 42 days following publication of
BMR's results for the year ending 30 June 2016.
Share Options
There were no share options granted in the year and as a result
the share option charge was nil (2016: GBP31,714).
20. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern, while maximising
the return to shareholders.
The capital resources of the Group comprises issued capital,
reserves and retained earnings as disclosed in the Consolidated
Statement of Changes in Equity. The Group's primary objective is to
provide a return to its equity shareholders through capital growth.
Going forward the Group will seek to maintain a yearly ratio that
balances risks and returns of an acceptable level and also to
maintain a sufficient funding base to the Group to meet its working
capital and strategic investment needs.
Categories of financial instruments
2017 2016
Group GBP GBP
Financial assets
Cash and cash equivalents 154,969 1,014,354
Other receivables classified
as loan
and receivables at amortised
cost 382,362 17,614
--------- -----------
537,331 1,031,968
========= ===========
Financial liabilities classified
as held at amortised cost
Trade and other payables 937,637 537,819
--------- -----------
937,637 537,819
========= ===========
Company
Financial assets
Cash and cash equivalents 11,205 954,260
Other receivables classified
as loan
and receivables at amortised
cost 350,814 -
--------- -----------
362,019 954,260
========= ===========
Financial liabilities classified
as held at amortised cost
Trade and other payables 922,828 517,325
922,828 517,325
========= ===========
Fair value of financial assets and liabilities
Fair value is the amount at which a financial instrument could
be exchanged in an arm's length transaction between informed and
willing parties, other than a forced or liquidation sale and
excludes accrued interest. Where available, market values have been
used to determine fair values.
Fair value hierarchy
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments which are
measured at fair value by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for
identical assets or liabilities
Level 2: Other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly;
Level 3: Techniques which use inputs that have a significant
effect on the recorded fair value that are not based on observable
market data
Management assessed that the fair values of cash and short-term
deposits, trade receivables, trade payables, bank overdrafts and
other current liabilities approximate their carrying amounts
largely due to the short-term maturities of these instruments.
The Directors' assessment of the development assets at fair
value, are disclosed in note 11b.
Financial risk management objectives
Management provides services to the business, co-ordinates
access to domestic and international financial markets, monitors
and manages the financial risks relating to the operations of the
Group through internal risks reports which analyse exposures by
degree and magnitude of risks. These risks include foreign currency
risk, credit risk, liquidity risk and cash f low interest rate
risk. The Group does not enter into or trade financial instruments,
including derivative financial instruments, for speculative
purposes.
As the Group has no committed borrowings, the Group is not
exposed to any risks associated with fluctuations in interest rates
on loans. Fluctuation in interest rates applied to cash balances
held at the balance sheet date would have minimal impact on the
Group.
Foreign exchange risk and foreign currency risk management
Foreign currency exposures are monitored on a monthly basis.
Funds are transferred between the Sterling and US Dollar accounts
in order to minimise foreign exchange risk. The Group holds the
majority of its funds in Sterling.
The carrying amounts of the Group's and Company's foreign
currency denominated financial assets and monetary liabilities at
the reporting date are as follows:
Financial liabilities Financial assets
2017 2016 2017 2016
Group GBP GBP GBP GBP
US Dollars 2,844 - 175,885 180,143
Company
US Dollars - - 573 102,434
Foreign currency sensitivity analysis
The Group is exposed primarily to movements in Sterling against
the US Dollar. Sensitivity analyses have been performed to indicate
how the profit or loss would have been affected by changes in the
exchange rate between the US Dollar and Sterling. The analysis is
based on a weakening and strengthening of Sterling by 10 per cent
against the US Dollar in which the Group has assets and liabilities
at the end of each respective period.
A movement of 10 per cent reflects a reasonably possible
sensitivity when compared to historical movements over a three to
five year timeframe. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts
their translation at the period end for a ten per cent change in
foreign currency rates.
A positive number below indicates an increase in profit where
the US Dollar strengthens ten per cent. against Sterling. For a ten
per cent. weakening of the US Dollar against Sterling, there would
be an equal and opposite impact on the profit, and the balance
below would be negative.
The following table details the Group's sensitivity to a ten per
cent. strengthening in the US Dollar against Sterling
2017 2016
GBP GBP
(Decrease)/increase in income
statement and net assets (US $) (16,108) (16,751)
Credit risk management
Credit risk refers to the risk that a counter party will default
on its contractual obligations resulting in financial loss to the
Group. The Group does not have any significant credit risk exposure
on trade receivables.
The Group makes allowances for impairment of receivables where
there is an identified event which, based on previous experience,
is evidence of a reduction in the recoverability of cash f
lows.
The credit risk on liquid funds (cash) is considered to be
limited because the counterparties are financial institutions with
high credit ratings assigned by international credit-rating
agencies.
The carrying amount of financial assets recorded in the
financial statements represents the Group's maximum exposure to
credit risk.
Liquidity risk management
Liquidity risk is the risk that the Group and Company will not
be able to meet its financial obligations as they fall due.
Management monitor forecasts of the Group's liquidity reserve,
comprising cash and cash equivalent, on the basis of expected cash
flow. At 30 June 2017, the Group held cash and cash equivalent of
GBP154,969 (2016: GBP1,014,354) and the directors assess the
liquidity risk as part of their going concern assessment (see note
3)
Liquidity risk management (continued)
The Group and Company aim to maintain appropriate cash balances
in order to meet its liabilities as they fall due.
Maturity analysis
Group Between Between Between
2017 On In 1 and 6 6 and 12 1 and
3
Total demand 1 month months months years
GBP GBP GBP GBP GBP GBP
Trade and
other payables 947,860 315,797 188,754 44,959 398,350 -
Company Between Between Between
2017 On In 1 and 6 6 and 12 1 and
3
Total demand 1 month months months years
GBP GBP GBP GBP GBP GBP
============= =============== ============== ============ ============ =============
Trade and
other payables 930,207 315,797 185,910 30,150 398,350 -
Group
2016
Between Between Between
On In 1 and 6 6 and 12 1 and
Total demand 1 month months months 3
years
GBP GBP GBP GBP GBP GBP
Trade and
other payables 537,819 35,819 83,576 44,074 374,350 -
Company
2016 Between Between Between
On In 1 and 6 6 and 12 1 and
3
Total demand 1 month months months years
GBP GBP GBP GBP GBP GBP
Trade and
other payables 517,325 35,819 83,576 44,074 374,350 -
------------- --------------- -------------- ------------ ------------ -------------
21. OPERATING LEASE ARRANGEMENT
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
2017 2016
GBP GBP
Land and buildings
Within one year 5,250 5,250
Within 2-5 years - -
------ ------
Total 5,250 5,250
====== ======
Operating lease payments represent rentals payable by the
Company for its office properties.
22. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
Directors' transactions
Transactions with the Directors are shown in the Directors'
Report.
Remuneration of key management personnel
The key management personnel of the Group are considered to be
the Directors. Details of their remuneration are covered in note 8
and the Report of the Remuneration Committee within the Corporate
Governance section.
23. CONTINGENT LIABILITIES AND PROVISIONS
BMR is currently de-registered for VAT with effect from 1 August
2015 on the bases there was no effective consideration for any
services provided as no invoices had been raised by BMR and issued
to its subsidiaries and that management services were not
considered as supplies for VAT purposes. The Company has received
assessments and has provided for GBP374,500 (2016: GBP374,500) in
back VAT claimed including interest. . The Company has appealed and
submitted its case for continued registration after having sought
professional advice. The Directors do not expect any resulting
assessment to be materially different from this provision taking
into account consideration of any possible compliance penalty.
24. EVENTS AFTER THE REPORTING DATE
On 4 September 2017 the Company, on behalf of its newly
incorporated wholly owned subsidiary Enviro Zambia, entered in to
an agreement with Bushbuck Resources Limited to complete the
acquisition of Star Zinc for a cash consideration of $1,000,000 of
which $130,000 has already been paid. The first tranche of the
remaining consideration of $400,000 was paid on 4 September 2017
and a further $300,000 has now been paid with the remaining balance
of $170,000 being due by 28 February 2018.
On 14 November 2017, the Company announced that it had informed
Mineralia-Minas, Geotecnia E Construcoes, LDA ("Mineralia") that it
intended to exercise its option to acquire an 80% interest in the
327 sq km Ester exploration licence having fulfilled its EUR140,000
(c.GBP120,000) financial obligation. Upon exercise of the option,
the Ester licence will be transferred into a new joint venture
company to be incorporated in Portugal and owned as to 80% by BMR
and as to 20% by Mineralia after which BMR is contracted to pay
deferred consideration to Mineralia of EUR100,000 (c.GBP90,000)
upon the application and granting of a preliminary exploitation
licence by no earlier than 2019 and EUR1,000,000 (c.GBP880,000)
upon the application and granting of a definitive exploitation
licence thereafter. T
On 20 November 2017, the Company issued 40,000,000 ordinary
shares of 1p each at a price of 2p per share raising gross proceed
of GBP800,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BIBDDIBDBGRR
(END) Dow Jones Newswires
December 28, 2017 02:00 ET (07:00 GMT)
BMR Mining (LSE:BMR)
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