TIDMAUR
RNS Number : 3190P
Aurum Mining PLC
18 August 2014
News Release
18 August 2014
AURUM MINING PLC
("Aurum" or "the Company")
Preliminary Results for the year ended 31(st) March 2014
Aurum Mining plc (AIM: AUR), the Spanish focused gold and
tungsten explorer, is pleased to report its preliminary audited
financial results for the year ended 31(st) March 2014.
The Company is pleased to announce that in accordance with AIM
Rules 20 and 26, the Annual Report and Financial Statements for the
year ended 31 March 2014 and the Notice of Annual General Meeting
will be posted to shareholders shortly and will be available on the
Company's website www.aurummining.net. The Annual General Meeting
will be held at 12 noon on 29 September 2014 at the offices of the
Company's solicitors, Wragge Lawrence Graham & Co LLP, 4 More
London Riverside, London SE1 2AU.
Contacts:
Aurum Mining plc www.aurummining.net
Chris Eadie, Chief Executive
Officer +44 (0) 20 7499 4000
WH Ireland Limited Nominated Adviser & Broker
Mike Coe, Ed Allsopp +44 (0) 117 945 3470
Notes to Editors:
Aurum Mining is an AIM listed exploration and development
company focused on its highly prospective portfolio of gold and
tungsten assets in North West Spain.
Gold
Through its joint venture agreement with Ormonde Mining plc
(AIM: ORM), Aurum currently has a 60% interest in the Pino de Oro
project in Zamora Province and a 54% interest in the Peralonso and
Cabeza projects in Salamanca Province.
Tungsten
Aurum's 20% owned Morille Tungsten project is located
approximately 15km south west of Salamanca in North West Spain and
covers an area of 5,796 hectares. The permit area is a 'brownfield'
site with historical data indicating production from the site of
high quality tungsten concentrates.
review of activities
The period under review has been a time of restructuring and
transformation for Aurum as the Board looks to adapt the strategy
and direction of the Company to ensure its growth and development
in spite of the very challenging market conditions that continue to
adversely impact the junior mining sector.
As outlined in the Company's Interim financial results
announcement, which was released in December 2013, the prevailing
market conditions have provided the Board with an extremely
frustrating backdrop against which to operate and as a result, and
despite the strength and prospectivity of the Company's gold and
tungsten portfolio, the Board took the difficult decision to change
the strategic direction of the Company to give it the optimal
chance of achieving its strategic objectives.
Initially, and as a direct result the lack of availability of
commercial funding, the Board adopted a strategy of looking for
strategic investors and partners to help fund the Company's asset
portfolio. The first step in this process was completed in October
2013, when the Company completed a deal with Plymouth Minerals
Limited ("Plymouth") (ASX: PLH) as partner for Aurum on the Morille
tungsten project. While disappointed that the Company could not
develop the Morille project on a standalone basis, the Board felt
that the 'farmout' deal negotiated with Plymouth fulfilled the key
criteria and objectives - it raised some upfront cash for the
Company, gave the Company a healthy ongoing carry in the project
while reducing the Company's need to fund the asset, and gives
Aurum a healthy share in the upside of the project should Plymouth
dispose of the project in the next two years.
More recently, and following detailed engagement with the
Company's key stakeholders the Board has taken the view that it
must take further action in order to ensure that the Company can
grow and develop. As a result, the Board, while working closely in
conjunction with the Company's major Shareholder, is now looking at
identifying and completing a transformational deal that will
guarantee the future of the Company. Given the precarious state of
the junior natural resources sector, the Board is looking at both
natural resource and non-natural resource deals and this will be
the focus of the next period. The key is to find a deal that will
give the Company a sustainable and long-term future, freeing the
Company from the structural change occurring in the junior mining
market. The Board is in discussions with a number of parties about
potential deals and very much hopes that it will be in a position
to complete a deal by the end of the calendar year. It is probable
that the completion of a deal will require the approval of
shareholders in accordance with the AIM rules.
In tandem with this approach, the Company will seek to derive
value from the successful exploration work done on the gold
projects to date. Aurum is working closely with its joint venture
partner Ormonde Mining plc ("Ormonde") (AIM: ORM) to achieve this.
There have been a number of discussions with interested parties
around structuring a deal for Aurum's interest and participation in
the gold projects and a number of these discussions are on-going.
Currently activity on the gold projects is at a very low level, and
during this transitional period Aurum will not be funding the
projects - this will lead to a small immaterial dilution in its
interest on the gold projects. To date, Aurum's interests in the
three gold projects have been diluted by just over a half of one
percent.
Shareholders in AIM listed junior mining companies have faced a
long period of falling valuations and increased dilution with no
end in sight for the ongoing downturn. The future for many juniors
is bleak. Aurum however, has significant support from its major
shareholder who is aligned with the Board's strategy.
Morille tungsten project
As highlighted above, the Company was very pleased to have
identified and completed a deal with Plymouth as the partner for
Aurum on the Morille tungsten project.
The Board felt that, in addition to the deal structure giving
Aurum what it wanted to get out of the partnering arrangement, most
importantly a sizeable carried interest in the project, that
Plymouth also had the necessary capital to drive the project
forward and a management team who have the necessary skill set to
deliver on the project and to therefore realise value from Aurum's
residual stake in the project. Plymouth is looking to aggressively
pursue its exploration programme at Morille, something that Aurum
was not able to achieve given its financial limitations.
The Board has, to date, been impressed by the energy and
enthusiasm of Plymouth and the exploration work carried out by
Plymouth to date has yielded some very promising results. The Board
looks forward to updating the market with further exploration
updates in the near future.
The key terms of Aurum's 'farmout' deal with Plymouth were as
follows:
-- Plymouth paid Aurum EUR300,000 to acquire an 80% interest in
the Morille project of which EUR250,000 was paid upfront and the
balance is payable in October 2014 when Plymouth will issue Aurum
shares in Plymouth with a value of EUR50,000.
-- Aurum retains a 20% carried interest in the Morille project.
Plymouth have retained the right to acquire this 20% at any stage
for GBP2,500,000 in cash, until the decision to mine is made.
-- Once a decision is reached to proceed with a mining project
at Morille, Aurum can choose to dispose of its interest, fund its
20% percentage, or convert to a 0.5% net smelter return
("NSR").
-- Should Plymouth dispose of its interest in the Morille
project within the first 24 months of owning it, Aurum will be
eligible for a 30% share of Plymouth's profits from the
disposal.
In conclusion the Board was frustrated that Aurum could not
pursue the Morille project itself, but it feels the deal with
Plymouth gives the Company a large residual stake in a project in
which it believes there is significant potential, a point already
proved by the initial exploration success that Plymouth has already
had.
The first phase drilling programme at Morille has been completed
and 61 Reverse Circulation ("RC") holes were drilled as part of the
programme, totalling 3,982 metres ("m"). Numerous significant
near-surface scheelite intercepts were identified and the programme
has identified multiple follow-up targets for future exploration
and resource definition drilling, which will be tackled as part of
the second phase drilling programme.
Significant assay results from drilling programme include;
o 4m @ 1.29% WO(3) from 61m and 4m @ 0.31% WO(3) from 68m
(MAC-RC 046)
o 2m @ 0.30% WO(3) from 18m (MAC-RC-045)
o 7m @ 1.28% WO(3) from 67m (WES-RC-040)
o 6.25m @ 0.29% WO(3) from 26.75m (DDH M010)
o 1.45m @ 0.95% WO(3) from 19.35m (DDH M001)
o 5m @ 0.24% WO3 (incl 2m @ 0.42% WO(3) )from 28m
(MAC-RC-009)
One of the really encouraging aspects of the first phase
drilling programme is that shallow high-grade scheelite
mineralisation has been proven in situ both outside of, and as
extensions to, the historic operating mines on the Morille project
area. Results validate that historic mining at Morille was
constrained by landholders and not mineralisation/mine
depletion.
The Morille project covers a large geographical area (57 km(2) )
and there are multiple exploration targets - the first phase of
drilling targeted only 6 of 16 known historic mine areas within the
57 project area. While highly prospective, the Board was cognisant
of how much drilling, and hence financial resource will be required
to gain a comprehensive understanding of the opportunity of the
project and for resource drilling and this was one of the key
attractions of the deal with Plymouth.
A second phase drilling programme is planned over coming months
and this will be supported by follow up geophysical and
metallurgical work. The Board looks forward to keeping the market
updated on progress at Morille.
Gold projects
Over the last couple of years, the joint venture between Ormonde
and Aurum has made substantial progress on each of its three gold
projects and has raised the prospect that the joint-venture could
be on the brink of three considerable new gold discoveries in North
West Spain. The near surface mineralisation identified at the
Peralonso and Cabeza license areas are of particular interest as
both have the potential for high grade resource and for rapid and
low cost development. The recent work carried out at Pino
highlights that, as hoped, the project may have considerable
scale.
All three gold projects are highly prospective and have clearly
defined follow up targets for exploration drilling - as mentioned
the Board is now looking at a number of options to facilitate the
funding of these.
During the recent period, a majority of the exploration work has
been carried out at the Cabeza, and this remains one of the key
follow up targets for the joint venture. The Board very much hopes
that a mechanism to fund exploration work at Cabeza and the other
permit areas can be found.
Initial exploration work at Cabeza has indicated it to be an
exploration target of great promise and the Board is extremely
optimistic about its potential. Soil geochemistry, prospecting,
geophysics and trenching work carried out have all indicated that
the permit area has the potential to host a large, previously
unrecognised, near surface gold system but a comprehensive follow
up drilling campaign is required.
Key financials
For the twelve months to 31 March 2014, the Group reported a
loss of GBP530,000 compared to a loss of GBP690,000 for the same
period in 2013. The loss for the current year includes a GBP52,000
accounting loss resulting from discontinued operations.
Cash at the end of March 2014 was circa GBP214,000.
During this period of transition, cash management and cost
control have remained key priorities for the Company. During the
period, administrative costs have been materially reduced,
including significant reductions in Directors' salaries. The full
impact of these cost reductions will be visible in the 2015
financial year numbers
Corporate
The Board would like to extend its thanks to Ormonde who
continue to be a strong joint venture partner for Aurum. The Board
recognises the value of a joint venture with a Company who have a
well-established footprint in Spain and a logistical strength from
which the joint venture benefits.
The Board would also like its Shareholders and advisers for
their on-going support during this challenging period.
Sean Finlay
Chairman
Chris Eadie
Chief Executive Officer
18 August 2014
Qualified Person
Sean Finlay, Professional Geologist, Chartered Engineer,
Chairman of Aurum Mining plc, and a qualified person as defined in
the Guidance Note for Mining, Oil and Gas Companies, June 2009, of
the London Stock Exchange, has reviewed and approved the technical
information contained in this report.
CONSOLIDATED INCOME STATEMENT
year ended 31 march 2014
2014 2013
GBP'000 GBP'000
Note
Administrative expenses (479) (624)
-------- -----------------
Operating loss (479) (624)
Finance income 1 9
-------- -----------------
Loss for the year before taxation (478) (615)
Taxation - -
-------- -----------------
Loss for the year from continuing operations (478) (615)
Loss for the year from discontinued operations (52) (75)
-------- -----------------
Loss attributable to the equity shareholders
of the parent company (530) (690)
-------- -----------------
Loss per share expressed in pence per
share
From continuing operations
Basic and Diluted 2 (0.34)p (0.49)p
From discontinued operations
Basic and Diluted 2 (0.03)p (0.06)p
Total operations
Basic and Diluted 2 (0.37)p (0.55)p
CONSOLIDATED statement of COMPREHENSIVE INCOME
year ended 31 march 2014
2014 2013
GBP'000 GBP'000
Loss after taxation for the financial year (530) (690)
-------- --------
Items that will or may be reclassified to
P&L:
Exchange translation differences on consolidation - -
of Group entities
-------- --------
Other comprehensive income - -
Total comprehensive expense attributable
to the equity shareholders of the parent
company (530) ( 690)
-------- --------
ConSOLIDATED AND COMPANY statement of financial position
as at 31 march 2014
Group Company
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 899 1,000 899 740
Investments in subsidiaries - - - 2
Investments 64 - 64 -
Amounts owed by subsidiaries - - - 282
--------- --------- --------- ---------
Total non-current
assets 963 1,000 963 1,024
--------- --------- --------- ---------
Current assets
Receivables 62 57 62 33
Cash and cash equivalents 214 698 214 694
--------- --------- --------- ---------
Total current assets 276 755 276 727
--------- --------- --------- ---------
Total assets 1,239 1,755 1,239 1,751
--------- --------- --------- ---------
Liabilities
Current liabilities
Trade and other payables 113 99 113 95
--------- --------- --------- ---------
Total current liabilities 113 99 113 95
--------- --------- --------- ---------
Total liabilities 113 99 113 95
--------- --------- --------- ---------
Net assets 1,126 1,656 1,126 1,656
--------- --------- --------- ---------
Capital and reserves
attributable to the
equity holders of
the company
Share capital 1,413 1,413 1,413 1,413
Share premium 11,585 11,585 11,585 11,585
Retained deficit (11,872) (11,342) (11,872) (11,342)
--------- --------- --------- ---------
Total Equity 1,126 1,656 1,126 1,656
--------- --------- --------- ---------
CONSOLIDATED statement of Changes in equity
year ended 31 march 2014
Share premium Retained
Share capital deficit Total Equity
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2012 1,182 11,172 (10,665) 1,689
Total comprehensive expense
for the year - - (690) (690)
Share based payments - - 13 13
Issue of shares net of issue 231 413 - 644
At 31 March 2013 1,413 11,585 (11,342) 1,656
-------------- ----------------- ----------------- ----------------
Total comprehensive expense
for the year - - (530) (530)
At 31 March 2014 1,413 11,585 (11,872) 1,126
------ ------- --------- ------
COmpany statement of Changes in equity
year ended 31 march 2014
Share premium Retained
Share capital deficit Total Equity
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2012 1,182 11,172 (10,665) 1,689
Total comprehensive expense
for the year - - (690) (690)
Share based payments - - 13 13
Issue of shares net of issue 231 413 - 644
At 31 March 2013 1,413 11,585 (11,342) 1,656
-------------- ----------------- ----------------- ----------------
Total comprehensive expense
for the year - - (530) (530)
At 31 March 2014 1,413 11,585 (11,872) 1,126
------ ------- --------- ------
COmpany statement of Changes in equity (continued)
year ended 31 march 2014
The Company has taken advantage of the exemption provided under
Section 408 of the Companies Act 2006 not to publish its individual
income statement, statement of comprehensive income and related
notes. The Company's loss for the year was GBP530,000 (2013: loss
of GBP690,000).
CONSOLIDATED AND COMPANY STATEMENTS of cash flows
year ended 31 march 2014
Group Company
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss for the year before tax (530) (690) (530) (690)
Adjustments for:
Depreciation of property, plant
and equipment - 1 - 1
Finance income (1) (9) (1) (9)
Impairment losses - - - 75
Disposal of subsidiaries 30 - 52 -
Share based payments - 13 - 13
Exchange differences 1 8 1 8
--------- -------- -------- --------
Cash flow from operating activities
before changes in working capital (500) (677) (478) (602)
Increase in other receivables 37 - 13 24
Increase / (decrease) in trade
and other payables 14 (22) 18 (26)
--------- -------- -------- --------
Net cash flow used in operating
activities (449) (699) (447) (604)
--------- -------- -------- --------
Investing activities
Ormonde joint venture payments (159) (305) (159) (305)
Expenditure on tungsten project - (260) - -
Disposal of subsidiary net
of cash 124 - 186 -
Increase in loans to subsidiaries - - (60) (357)
Investment in subsidiaries - - - (2)
Interest income - 1 - 1
--------- -------- -------- --------
Net cash flow used in investing
activities (35) (564) (33) (663)
--------- -------- -------- --------
Group Company
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
Financing activities
Proceeds from issue of share
capital - 694 - 694
Expenses paid in connection
with share issues - (50) - (50)
Net cash flow from financing
activities - 644 - 644
-------- ------------ ----------- ----------------------
Net decrease in cash and cash
equivalents (484) (619) (480) (623)
-------- ------------ ----------- ----------------------
Cash and cash equivalents at
the beginning of the year 698 1,317 694 1,317
Effect of exchange rate changes -
on cash and cash equivalents - - -
-------- ------------ ----------- ----------------------
Cash and cash equivalents at
the end of the year 214 698 214 694
-------- ------------ ----------- ----------------------
NOTES
1. Basis of preparation
The financial information set out above, which was approved by
the Board on 15 August 2014, has been compiled in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS"), but does not contain sufficient
information to comply with IFRS. The Company expects to distribute
its full financial statements that comply with IFRS shortly. The
financial statements have been prepared on the historic cost basis
and on a consistent basis with the accounting policies adopted in
the prior year.
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 March 2014 but
is extracted from those accounts. The Company's statutory accounts
for the year ended 31 March 2014 will be filed with the Registrar
of Companies following the Company's annual general meeting. The
independent auditors' report on those accounts was unqualified
although an emphasis of matter was included in the accounts to draw
attention to going concern. The financial statements have been
prepared on a going concern basis.
Following a review of the Group's and Company's operations, its
current financial position and cash flow forecasts, the Directors
do not believe that the Group and Company currently has sufficient
cash resources to continue in operational existence for the next
twelve months. However in addition to having assets for potential
sale and further consideration from the part disposal of the
Morille tungsten project falling due as well as the option of
issuing further equity, the Directors have also been provided with
a Letter of Support from the Group's major Shareholder which
commits to underwrite the Group's and Company's underlying
operating costs for a period of twelve months from the signing of
these financial statements.
Based on the above the Directors have formed a view that the
Group and Company will have financial resources available to it, in
the twelve months from the date of signing these financial
statements, to enable the Group and Company to meet its financial
commitments as they arise. Accordingly, the Directors continue to
adopt the going concern basis for the preparation of these
financial statements.
No statement was included under section 498(2) or (3) of the
Companies Act 2006. The Company's statutory accounts for the year
ended 31 March 2013 have been filed with the Registrar of
Companies. The independent auditors' report on those accounts was
unqualified, but did although an emphasis of matter was included in
the accounts to draw attention to going concern but did not contain
any statement under section 498(2) or (3) of the Companies Act
2006.
2. loss per share
Basic loss per share is calculated by dividing the loss
attributable to the ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
For diluted loss per share, the weighted average number of
shares in issue is adjusted to assume conversion of all the
dilutive potential ordinary shares. The potential dilutive shares
are anti-dilutive in 2013 and 2014 as the Company is loss
making.
At the reporting date there were 4,450,000 (2013: 4,450,000)
potentially dilutive ordinary shares. Dilutive potential ordinary
shares include share options and warrants.
2014 2013
GBP'000 GBP'000
Net loss attributable to equity holders
of the parent:
From continuing operations (478) (615)
From discontinued operations (52) (75)
From total operations (530) (690)
------------------------ --------
2014 2013
Number Number
Weighted average number of shares:
Weighted average number of shares 141,291,930 125,086,829
------------ ------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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