TIDMGLR
RNS Number : 4675P
Galileo Resources PLC
31 August 2017
Galileo Resources Plc
("Galileo" or the "Company" or the "Group")
31 August 2017
Audited Results for the year ended 31 March 2017
Notice of AGM
Galileo (AIM: GLR), the exploration and development mining
company, announces its audited results for the year ended 31 March
2017.
Highlights for the period under review
-- The Company undertook modelling of historical data and ground
geophysics on Concordia and commenced drilling on 16 February 2017
on selected targets
-- Gabbs gold-copper property in Nevada USA sold for US$2.5
million cash to a subsidiary of Waterton Precious Metals Fund II
Cayman LP
-- The Group reported a net loss of GBP1,388,697 (2016: loss of
GBP419,627) before and after taxation. Basic and diluted loss
reported is 0.7 pence (2016: loss of 0.3 pence) per share
Highlights post balance sheet
-- All Nevada property claim payments have been paid and the
properties are in good title standing until the end of August
2018
-- Drilling on Concordia was completed and drilling results are under review
-- 6 June 2017, the Company's 34 % owned Glenover Phosphate
(Pty) Ltd and a major phosphate producer executed a proposal
agreement, which could lead to the possible development of the
Glenover project
A copy of this announcement is available on the Company's
website www.galileoresources.com. and is being posted to
shareholders tomorrow 1 September 2017.
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
You can also follow Galileo on Twitter: @GalileoResource.
For further information,
please contact: Colin Tel +44 (0) 20 7581
Bird, Chairman 4477
Andrew Sarosi, Technical Tel +44 (0) 1752 221937
Director
Beaumont Cornish Limited
- Nomad Tel +44 (0) 20 7628
Roland Cornish 3396
Beaufort Securities
Limited - Broker Tel +44 (0) 20 7382
Jon Belliss / Elliot 8416
Hance
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of
Galileo will be held at at Fladgate LLP, 16 Great Queen Street,
London, WC2B 5DG on 26 September 2017 at 14:00.
Chairman's Report
Dear Shareholder,
On 30 August 2016 the Company announced the sale of its Gabbs
Gold/Copper property in Nevada, USA for USD$2.5 million in cash.
This sale negated the need for short term placings and allowed the
Company to progress the other assets in its portfolio, particularly
the Concordia Copper project in the Northern Cape Province of South
Africa.
The Concordia project, over the past year, underwent initial
modelling, scope potential assessment, ground IP geophysical
investigation and on 15 February 2017 we announced the commencement
of drilling on the Concordia project.
The IP geophysics demonstrated diverse promising signatures in
the small area tested, which represented less than 15% of the
entire Concordia concession. The test drilling was to confirm the
reliability of IP to identify disseminated copper ore. The results
were inconclusive and together with our partners we decided to
drill further holes against traditional data i.e. surface outcrops
and magnetics geophysics. The programme took longer than expected
because of the re-iterative requirement for siting bore holes
against the physical results of previous holes. Our difficulties
were compounded in no small way by assay result interpretation and
the fact that data being assessed came from various co-ordinate
sources, thus making assessment on a common basis difficult. All of
this by the end of July 2017 had been largely resolved and we
announced on 11 August 2017 a suite of results which on close
examination put some doubt as to the reliability of IP as a
targeting tool but at the same time tabled some interesting,
reasonable copper values within close proximity to surface and
sometimes a little deeper. We have held discussions with SHIP, our
JV partner, and Minxcon, our contracted consulting geological
company, on the results from the drilling and possible ways
forward.
In the 11 August 2017 announcement, we also advised that our JV
partner SHIP was intending to dilute the Company to a 15% interest
in terms of the Co-Operation and Joint Venture Agreement, which
they are not able to do and we have advised them accordingly. We
have also informed SHIP that in our opinion, the Company owns 51%
of the Concordia project and has not yet had the opportunity to
make a decision on the most appropriate way forward in terms of
Galileo's options. This is fully provided for in the agreement as
are other matters, which give Galileo full protection on its
current 51% interest in the project.
On 30 August 2016 we agreed with Fer-Min-Ore (Pty) Ltd
("Fer-Min-Ore") that their option right to sell our interest in
Glenover Phosphate (Pty) Ltd ("Glenover") would terminate and we
would work together to add value and either develop or dispose of
the project. In mid-2017 a major phosphate producer agreed to
undertake significant expenditure (USD$300,000) to test our
Glenover phosphate project for suitability as raw feed to its
various value add phosphate operations. Together with Fer-Min-Ore
we carried out many desktop studies against various off take
agreements and possible hybrid agreements of part sales and of off
take. We have now concluded that the phosphate core of the Glenover
phosphate project could produce a viable operation for up to 20
years and therefore should be pursued aggressively. Galileo, being
the mining partner, agreed to finance the application for a mining
license and satisfy the various environmental requirements in order
to be able to make an offer to the industry of its phosphate
upgraded material. The various applications are being supervised on
a turn-key basis by Minxcon, a South African consultant company in
Johannesburg.
At the commencement of the year 2017 our joint venture partner
Orogen Gold Plc on the Silverton Gold property in Nevada, USA
announced the results of their drilling programme. Whilst the
assays showed gold in every hole, the overall results did not lead
to a conclusion better than before the drill programme and no
further work was carried out on the property.
During the latter part of 2016 we undertook an extensive survey
of our Ferber property and during this investigation took many chip
samples. The results of the samples were very encouraging to the
extent that we acquired further ground to enlarge the size of our
concession. Our confidence is such on the Ferber project that we
paid for the original license plus extension during the round of
license renewals in August 2017 and the project is now in good
standing with the intent to carry out drilling during the coming
year. The resource industry in general has experienced relatively
improved circumstances in most cases i.e. commodity prices, major
company market capitalisations, junior company ability to raise
finance and a much improved appetite from the investment community.
At the time of writing, this appetite is still limited to, in
general, the retail sector and institutional shareholders have yet
to enter the market with any significance. We look forward to this
changing over the coming year and we remain committed in our quest
to identify a large resource, which will be transformational for
the Company and its shareholders.
I would like to thank my fellow directors and management for
their support and efforts during a year, which has progressed our
portfolio in varied ways adding that we are all very confident
about meeting the challenges of the coming year.
Colin Bird
Chairman
Operations Summary
South Africa
Concordia Copper Project ("Concordia" or "Project")
Period under review
The Company concluded its desktop modelling by independent
consultant Minxcon (Pty) Ltd ("Consultant") of historical
exploration data with the modelling on Whyte's West, Klondike,
Wheal Julia and Homeep East prospects. The study conceptually
identified eleven prospect areas with a combined potential rock
mass of more than 750 million tonnes with a mean grade of 0.57% Cu
assuming 50% mineralisation (Table 1). Five of the eleven
prospective area studied, indicated conceptually, considerable
near-surface mining potential. The Consultant based its modelling
on historical geological core logging and drill assay generated by
the O'Okiep Copper Company and others.
Following a strategic joint review of the study and the
Consultant's assessment of exploration potential on 34
possible prospects on the Concordia property, and their ranking
in terms of prospectivity, the Company prioritised 4 main areas for
exploration activities, commencing with an Induced Polarity ("IP")
geophysical survey. The areas selected were the Homeep Trend
(comprising the Homeep East, Homeep West, Koeƫlkop and Whyte's West
prospects), the Shirley Trend (comprising Hoogkraal East, Hoogkraal
Central and Hoogkraal West areas), Henderson Prospect and the
Klondike Prospect (south of Hoogkraal West). IP geophysics survey
commenced in October 2016, using South African-based Geospec
Instruments (Pty) Ltd as the contractor utilizing distributed
(electrode) array ("DA") design, which enabled direct 3D (three
dimensional) modeling of the data. The IP survey was completed in
December 2016. The geophysics programme covered partially only two
of the eleven priority ranked prospects. 3D-wire frame modelling of
the IP survey data and its interpretation, which were carried out
during January 2017, identified a number of both shallow and deeper
high-chargeability(a) zones (IP anomalies) in both the Homeep and
Shirley geological Trends. These anomalies were used for the
selection of targets for drilling, the main focus of which was to
test the reliability of IP, between delineating geophysical
signature with underlying geology signatures, in identifying and
discovering possible copper sulphide mineralisation associated with
these physical features.
The Company developed an initial 1800-metre reverse circulation
("RC") drilling programme with up to six angled drill holes
targeting five geophysics anomalies: four on the Homeep Trend and
one on the Shirley Trend. Drilling commenced on 16 February 2017.
As drilling progressed, inspection of the drill chips (composited
every one-metre intersection down the hole) suggested that
targeting IP anomalies alone was not as precise and less reliable
than anticipated. In August 2016, SHIP notarially executed the
renewed prospecting right for a further three years to 17 August
2019.
Post period under review
Following the early appraisal of the drilling, which targeted IP
anomalies alone, the Company refocused its drilling strategy to
include local geology, basic rock surface outcrops and magnetic
geophysics criteria in addition to IP anomaly criterion in location
of drill targets. The Company increased the holes to be drilled to
14 from the initial 6-hole programme, the effect of which added
significantly to the time scheduled for completion of the programme
including assaying. This strategy change showed visually an
increased reliability in intersecting sulphide mineralisation. The
14-hole drilling programme was completed on 15 May 2017. During
this period the Company carried out further mapping of outcrops and
a limited programme of ground magnetic geophysics to establish a
correlation. Interpretation of the results is pending but initial
indications are that there is a good correlation with the geology
and basic rock outcrops. Whilst these non IP geophysics method are
not suitable in identifying of metal sulphide mineralisation, they
have application in differentiating rock types with differing rock
mineralogies. Historically, copper sulphide mineralisation in the
area has been associated with basic rock types (diorite and
norite). However, the opposite is that not all these basic rock
types in the host significant copper mineralisation, which is where
IP anomalism has a role. Preliminary results of the drilling
programme have been received and are shown in Table 2. The best
holes (in basic rock) numbers GDSP 008, 011 and 014 intersected
respectively, 6 metres "m") assaying weighted average 0.90% Cu from
23m to 29m downhole, 10m assaying weighted average 0.85% Cu from
28m to 38m and 8m assaying weighted average 1.06% Cu, from 3m to
11m downhole.
The Consultant has modelled the data but its formal release is
pending final sign off on the quality control and assurance checks
with the analytical laboratory responsible for the assays. With due
regard to the fact that objective of this initial drilling, which
was to establish the relationship, if any, and reliability between
the IP anomalies, with underlying geology and to possible copper
grades associated with these physical metrics the preliminary
interpretation suggests that:
-- the testing (by means of drilling) of the IP survey anomalies
which was conducted in a scientifically unbiased fashion yielded
mixed results and was not conclusive;
-- IP anomalies which were drilled blind and steeply into IP
anomalies without geological outcrop or supporting geophysical
evidence did not intersect significant mineralisation; and
-- drilling into IP anomalies which had supporting surface
outcrop, in conjunction with regional and limited ground
geo-magnetic surveys yielded the best results by intersecting
encouraging potentially mineable
near-surface copper mineralisation with good grade.
The Cooperation and Joint Venture Agreement (the
"Agreement")
On 15 May 2017, Galileo committed the necessary funding to earn
a 51% interest in the company owning the
Concordia project, Shirley Hayes - ipk (Pty) Ltd ("SHIP"),
having deposited into the Project's account the funds
required to fulfil the commitment in terms of the Agreement.
SHIP claimed that the Company should dilute to a 15% interest in
the SHIP Project. The Company has refuted the claim on the grounds
that it has not yet made the election and could not make it in the
time available and on the basis of the information obtained and
modelled, which was inconclusive. SHIP is a South African
registered privately held company controlled by Shirley Hayes. The
company was incorporated to hold the Concordia Project and its
prospecting right. SHIP's
sole asset is the Concordia Project.
Glenover Rare-Earth Phosphate Project ("Glenover Project" or
"Project")
The Glenover Project is situated in the Limpopo Province of the
Republic of South Africa.
Period under review
The exclusive option for the disposal of the Company's 34%
ownership in Glenover Phosphate (Pty) Ltd, ("Glenover") the holding
company of the Glenover Project to Fer-Min-Ore (Pty) Ltd ("FMO"),
its partner in the Project for USD$4 million lapsed by mutual
consent at the end of August 2016. The parties agreed jointly to
advance the Project.
Post Period under Review
On 6 June 2017, Glenover and a major phosphate producer ("MPP")
executed a proposal agreement (the "Agreement") whereby MPP intends
to undertake upward of USD$300,000 in expenditure on a two-phase,
pilot plant phosphate flotation study ("PPFS"), which could lead to
the possible development of the Project. Under this Agreement, MPP
has elected to continue and undertake Phase 1 of the PPFS; being
Water and Ore variability Study.
Phase 2 of the PPFS is intended to produce phosphate concentrate
for testing by MPP in its phosphate production process. The
ultimate objectives of the undertaking include either developing
the Project or selling the Project in whole or in part to MPP.
Pursuant to the Agreement, Glenover will, concurrent with the PPFS,
fund the application for a mining right for the Project, for which
its existing renewed prospecting right expires in November 2017.
Rare-earths from the tailings of any future phosphate processing of
the ore by MPP, would be returned and available for further
beneficiation by Glenover. Extensive related test work and
negotiations have taken place prior to this Agreement. On 6 July
2017 the Company executed a term sheet ("Term Sheet") with FMO,
pursuant to which the Company applies for and obtains a mining
right from the Department of Mineral Resources ("DMR") to mine and
produce phosphate. The terms of the Term Sheet, include amongst
other things, Galileo funding the execution of the mining right
application ("MRA") by way of an interest free
convertible loan note to FMO, convertible to 4% of the equity in
Glenover. Conversion would increase the
Company's interest to 38% in Glenover. The Company has engaged
the Consultant to execute the MRA, the
submission of which is scheduled for later this calendar year.
The MRA will include an environmental impact assessment and
relevant Water Usage Licence application, in accordance with the
Minerals and Petroleum Resources Development Act 2002 (as amended).
Existing Glenover shareholder loans will be written down:
Galileo's loan (ZAR1.9m) will be netted off against FMO's loan
(ZAR10.6m) and FMO's remaining agreed outstanding loan to Glenover
will be ZAR4m. The Term Sheet is valid for 24 months or until
formal grant of the Mining Right. The funding will also include a
monthly payment ZAR35,000 (GBP2,058) into Glenover's account to
support the funding of the administration of the Project.
USA Nevada
Period under Review
Gabbs Property
On 30 August 2016, the Company closed an Asset Purchase
Agreement (the "Agreement") with a subsidiary
of Waterton Precious Metals Fund II Cayman, LP ("Waterton"), in
terms of which Agreement Waterton purchased the Company's advanced
Gabbs gold-copper property in Nevada for a consideration of USD$2.5
million cash. The reason behind the sale, amongst other things, was
the Company's strategic decision to reduce exposure to exploration
and focus instead on exploration and funding on its projects in
South Africa and base metals.
Ferber Property
The Ferber property is a historic producer of gold and copper
and hosts widespread gold and copper
mineralisation.
The Company acquired further land position on Ferber following a
quitclaim by another mining company of 210 unpatented claims around
the perimeter of the concession. The Company undertook a sampling
campaign comprising an initial suite of 23 samples, collected over
an area of 6 km by 2 km. These samples yielded significant gold
assay results shown in Table 3 below. Seven of the samples exceeded
1 g/t gold (Au) reaching 10.8 g/t. The highestgrade sample
contained greater than 1% Bismuth and 167 ppm Tellurium, elements
indicative of the mineral hedleyite. Hedleyite is a characteristic
mineral in productive gold skarn deposits, such as those at McCoy
and Fortitude in north-central Nevada, which also flank Late Eocene
intrusions. Preliminary analysis of the data, together with
historic results, indicated a geochemical zoning from more
copper-rich gold mineralisation with a high silver Ag-to-Au ratio
("Ag:Au") marginal to the central stock to distal, copper-poor,
gold mineralisation with relatively low silver and a lower Ag:Au.
One sample of jasperoid from this distal setting , yielded 9.8 g/t
Au with a Ag:Au of only 1:3; an historic sample from the same area
assayed 11.7 g/t Au with a Ag:Au of 1:5. A sample of jasperoid over
1 km from the central stock yielded 325 ppb Au. The Ferber
intrusion-centered gold system is broadly similar to productive
gold deposits elsewhere in northcentral Nevada, where Carlin-style
gold mineralisation and gold skarn mineralisation are genetically
related to Late Eocene intrusions similar in age to the Ferber
stock. This large district requires a broad approach aimed at
recognizing geochemical zoning, delineating district-scale
structure and understanding the stratigraphy. Integrating these
three components should serve as a vector to quality exploration
targets.
CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE PERIODED 31
MARCH 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS 31 MARCH
2017
Figures in Pound Sterling 2017 2016
========================================= ================ ============
Assets
Non-current assets
Intangible assets 1,473,494 2,667,062
Investment in joint ventures 2,325,144 1,868,370
Loans to joint ventures and subsidiaries 640,030 79,457
Other financial assets 454,604 556,078
================ ============
4,893,272 5,170,967
================ ============
Current assets
Trade and other receivables 30,522 20,453
Cash and cash equivalents 1,110,821 135,086
================ ============
1,141,343 155,539
================ ============
Total assets 6,034,615 5,326,506
========================================== ================ ============
Equity and liabilities
Equity
Share capital 23,883,494 23,854,957
Reserves 890,060 155,384
Accumulated loss (19,136,926) (18,977,249)
================ ============
5,636,628 5,033,092
================ ============
Liabilities
Non-current liabilities
Other financial liabilities 4,016 2,692
Current liabilities
Trade and other payables 393,971 292,722
================ ============
Total liabilities 397,987 293,414
================ ============
Total equity and liabilities 6,034,615 5,326,506
------------------------------------------ ---------------- ------------
These financial statements were approved by the directors and
authorised for issue on 31 August 2017 and are signed on their
behalf by:
Colin Bird Andrew Sarosi
Company number: 05679987
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31
MARCH 2017
Figures in Pound 2017 2016
Sterling
======================= ============================== ===========
Revenue - -
Operating expenses (871,776) (435,862)
============================== ===========
Operating loss (871,776) (435,862)
Investment revenue 781 48,578
Finance costs - (2)
Loss on disposal
of non-current asset (469,259) -
Loss from equity
accounted investments (48,443) (32,341)
============================== ===========
Loss for the year (1,388,697) (419,627)
============================== ===========
Other comprehensive
income:
Foreign exchange
movements for the
year 1,372,022 (364,872)
============================== ===========
Total comprehensive
loss for the year (16,675) (784,499)
============================== ===========
Loss per share in
pence (basic) (0.7) (0.3)
============================== ===========
All operating expenses and operating losses relate to continuing
activities.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 MARCH
2017
Foreign
currency Share
based
Share Share Total share Transaction Merger payment Total Accumulated Total
Figures in capital premium capital reserve reserve reserve reserves loss equity
Pound
Sterling
============== =================== =============== =============== ============ ============== =============== =============== ================ ==============
Balance at 1
April
2015 5,735,137 17,418,570 23,153,707 (1,314,704) 1,047,821 787,139 520,256 (18,556,522) 5,116,341
=================== =============== =============== ============ ============== =============== =============== ================ ==============
Loss for the
year - - - - - - - (419,627) (419,294)
Other
comprehensive
income - - - (364,872) - - (364,872) - (365,205)
=================== =============== =============== ============ ============== =============== =============== ================ ==============
Total
comprehensive
loss for the
year - - - (364,872) - - (364,872) (419,627) (784,499)
=================== =============== =============== ============ ============== =============== =============== ================ ==============
Issue of
shares 69,250 632,000 701,250 - - - - - -
=================== =============== =============== ============ ============== =============== =============== ================ ==============
Total
contributions
by and
distributions
to owners of
company
recognised
directly
In equity 69,250 632,000 701,250 - - - - - 701,250
=================== =============== =============== ============ ============== =============== =============== ================ ==============
Balance at 31
March
2016 5,804,387 18,050,570 23,854,957 (1,679,576) 1,047,821 787,139 155,384 (18,977,249) 5,033,092
=================== =============== =============== ============ ============== =============== =============== ================ ==============
Loss for the - - - - -
year -- - - - -- - - (1,388,697) (1,388,697)
Other
comprehensive
income - - - 1.813,903 - - 1,813,903 - 1,813,903
=================== =============== =============== ============ ============== =============== =============== ================ ================
Total
comprehensive
loss for the
year - - - 1,813,903 - - 1,813,903 (1,388,697) 425,206
=================== =============== =============== ============ ============== =============== =============== ================ ================
Issue of share
options - - - - - 149,793 149,793 - 149,793
Share options
expired - - - - - (787,139) (787,139) 787,139 -
Issue of
shares 2,121 26,416 28,537 - - - - - 28,537
Transfer
between
reserves - - - (441,881) - - (441,881) 441,881 -
=================== =============== =============== ============ ============== =============== =============== ================ ================
Total
contributions
by and
distributions
to owners of
company
recognised
directly
in equity 2,121 26,416 28,537 1,372,022 - (637,346) 584,883 (159,677) 603,536
=================== =============== =============== ============ ============== =============== =============== ================ ================
Balance at 31
March
2017 5,806,508 18,076,986 23,883,494 (307,554) 1,047,821 149,793 890,060 (19,136,926) 5,636,628
=================== =============== =============== ============ ============== =============== =============== ================ ================
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEARED 31 MARCH
2017
Figures in Pound 2017 2016
Sterling
======================== ========= ==========
Cash flows from
operating activities
Cash used in operations (654,067) (459,601)
Interest income 781 45
Finance costs - (2)
--------- ----------
Net cash from operating
activities (653,286) (459,558)
========================= ========= ==========
Cash flows from
investing activities
Additions to intangible
assets (23,969) (163,701)
Sale of intangible
asset 1,957,587 -
Net movement on
group company loans (333,134) 14,956
Loans and receivables - (138,732)
========= ==========
Net cash flows from
investing activities 1,600,484 (287,477)
========================= ========= ==========
Cash flows from
financing activities
Proceeds on share
issue 28,537 701,250
Net cash flows from
financing activities 28,537 701,250
========================= ========= ==========
Total cash movement
for the year 975,735 (45,785)
Cash at the beginning
of the year 135,086 180,871
========= ==========
Total cash at end
of the year 1,110,821 135,086
------------------------- --------- ----------
Statement of Directors' Responsibilities for the year ended 31
March 2017
-- The directors are required in terms of the Companies Act 2006
to maintain adequate accounting records and are responsible for the
content and integrity of the consolidated annual financial
statements and related financial information included in this
report. It is their responsibility to ensure that the consolidated
annual financial statements fairly present the state of affairs of
the Group as at the end of the financial year and the results of
its operations and cash flows for the period then ended, in
conformity with the applicable UK laws.
-- The consolidated annual financial statements are prepared in
accordance with International Financial reporting standards (IFRS)
and are based upon appropriate accounting policies consistently
applied and supported by reasonable and prudent judgments and
estimates. The directors acknowledge that they are ultimately
responsible for the system of internal financial control
established by the Group and place considerable importance on
maintaining a strong control environment. To enable the directors
to meet these responsibilities, the board sets standards for
internal control aimed at reducing the risk of error or loss in a
cost effective manner. The standards include the proper delegation
of responsibilities within a clearly defined framework, effective
accounting procedures and adequate segregation of duties to ensure
an acceptable level of risk. These controls are monitored
throughout the Group and all employees are required to maintain the
highest ethical standards in ensuring the Group's business is
conducted in a manner that in all reasonable circumstances is above
reproach. The focus of risk management in the Group is on
identifying, assessing, managing and monitoring all known forms of
risk across the Group. While operating risk cannot be fully
eliminated, the Group endeavours to minimise it by ensuring that
appropriate infrastructure, controls, systems and ethical behaviour
are applied and managed within predetermined procedures and
constraints.
-- The directors are of the opinion, based on the information
and explanations given by management that the system of internal
control provides reasonable assurance that the financial records
may be relied on for the preparation of the consolidated annual
financial statements. However, any system of internal financial
control can provide only reasonable, and not absolute, assurance
against material misstatement or loss.
-- The going concern basis has been adopted in preparing the
consolidated annual financial statements. The directors have no
reason to believe that the Group will not be a going concern in the
foreseeable future, based on forecasts and available cash
resources. These consolidated annual financial statements support
the viability of the company. the directors have reviewed the
Group's financial position at the balance sheet date and for the
period ending on the anniversary of the date of approval of these
financial statements and they are satisfied that the Group has, or
has access to, adequate resources to continue in operational
existence for the foreseeable future.
Colin Bird Chairman
Andrew Francis Sarosi Finance & Technical Director
J Richard Wollenberg Non-Executive director
Christopher Molefe Non-Executive Director
NOTES TO THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated annual financial statements have been prepared
in accordance with International Financial Reporting Standards
IFRIC interpretations issued by the International Accounting
Standards Board and the Companies Act 2006. The consolidated annual
financial statements have been prepared on the historical cost
basis, except for certain financial instruments at fair value, and
incorporate the principal accounting policies set out below. Cost
is based on the fair values of the consideration given in exchange
for assets and they are presented in Pound Sterling. The accounting
policies applied are consistent with those of the previous
period.
The comparative figures for the financial year ended 31 March
2017 are not the Company's statutory accounts for that financial
year but the consolidated accounts. Those accounts have been
reported on by the Company's auditors and delivered to the
registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not give any reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under sections 498 (2) or (3) of the Companies Act 2006, relating
to the accounting records of the company.
2. Basis of consolidation
The consolidated annual financial statements incorporate the
annual financial statements of the Company and all entities,
including special purpose entities, which are controlled by the
Company. Control exists when the Company has the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. The results of subsidiaries are
included in the consolidated annual financial statements from the
effective date of acquisition to the effective date of disposal.
Adjustments are made when necessary to the annual financial
statements of subsidiaries to bring their accounting policies in
line with those of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation. Non-controlling interests in
the net assets of consolidated subsidiaries are identified and
recognised separately from the Group's interest therein, and are
recognised within equity. Losses of subsidiaries attributable to
non-controlling interests are allocated to the non-controlling
interest even if this results in a debit balance being recognised
for non- controlling interest. Transactions which result in changes
in ownership levels, where the Group has control of the subsidiary
both before and after the transaction, are regarded as equity
transactions and are recognised directly in the statement of
changes in equity. The difference between the fair value of
consideration paid or received and the movement in non-controlling
interest for such transactions is recognised in equity attributable
to the owners of the parent.
3. Financial review
The Group reported a net loss of GBP1,388,697 (2016: loss of
GBP419,627) before and after taxation. Basic and diluted loss
reported is 0.7 pence (2016: loss of 0.3 pence) per share. Basic
earnings per share was based on a weighted average number of
ordinary shares of 194,525,720 (2016: 148,691,077).
The ZAR stood its ground against the GBP during the period under
review as did the USD. Operating expenses were GBP871,776 compared
to GBP435,862 in 2016. The increase is mainly attributable to the
Company's increased exploration expenditure in its assets in the
USA amounting to GBP630,044 (2016: GBP44,324).
Corporate costs amounted to GBP240,951 compared to GBP342,962 in
2016. The Group continues to tighten its cost management. Included
in the loss of GBP1,388,697 is a loss in an amount of GBP469,259 in
relation to the sale of the Company's Gabbs asset in the USA. The
loss is mainly attributable to the uplift of the foreign exchange
movement in the value of the asset up to the point of disposal.
4. Segmental analysis
The Company's investments in subsidiaries and associates, that
were operational at year-end, operate in two geographical locations
being South Africa and USA, and are organised into two business
units from which the Group's expenses are incurred and future
revenues are expected to be earned. This being the exploration for
and extraction of its mineral assets through direct and indirect
holdings. The reporting on these investments to the board focuses
on the use of funds towards the respective projects and the
forecasted profit earnings potential of the projects. Following the
acquisition of the Gabbs project the Group has another segment to
report on, that being gold and copper.
Business segments
The Group's business is the exploration and development of gold,
copper, rare-earth aggregates and potentially iron ore and
manganese.
Geographical segments
An analysis of the loss on ordinary activities before taxation
is given below:
31 March 2016 31
2017 March 2016
Figures in pound Loss from Loss from
sterling Country of operating operating
operations activities activities
======================== ------------------- -------------------- ===================
Rare earths, aggregates
and iron ore and
manganese South Africa (48,443) (32,341)
Gold, Copper USA (630,044) (44,324)
South Africa
and United
Corporate costs Kingdom (240,951) (342,962)
Loss on sale of USA (469,259) -
non-current asset
=================== ==================== ===================
Total (1,388,697) (419,627)
--------------------------------------------- -------------------- -------------------
5. Taxation
No provision has been made for 2017 tax as the Group has no
taxable income. The estimated tax loss available for set off
against future taxable income is GBP1,756,243 (2016: GBP1,602,315).
The Group has not reflected a deferred tax asset in respect of the
losses carried forward as the Group is not expected to generate
taxable profits in the foreseeable future.
5. Earnings per share
Basic earnings per share is determined by dividing profit or
loss attributable to the ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during
the year.
Basic earnings per share was based on a loss of GBP1,388,697
(2016: loss of GBP419,627) and a weighted average number of
ordinary shares of 147,485,598 (2016: 148,691,077).
6. Intangible assets
On 30 August 2016, the Company executed an Asset Purchase
Agreement (the "Agreement") with a subsidiary of Waterton Precious
Metals Fund II Cayman, LP ("Waterton"). Under the terms of the
Agreement, Waterton has purchased the Company's advanced Gabbs
gold-copper property in Nevada for a consideration of USD$2.5
million cash (GBP1.9 million) in cash.
The Group reported a loss on the sale of the property of GBP0.47
million which is mainly attributable to the uplift of the foreign
exchange currency movements prior to the disposal. The proceeds
will be directed towards aggressive exploration of the South
African Concordia Copper project. This aligns with the Company's
strategic decision to reduce exposure to gold exploration and focus
instead on exploration and funding of its Concordia copper project
in Namaqualand, Northern Cape Province in South Africa. The Company
retains its greenfield Ferber coppergold property in Nevada.
During the latter part of 2016 the Company undertook an
extensive survey of its Ferber property and during this
investigation took many chip samples. The results of the samples
were very encouraging to the extent that the Company acquired
further ground to enlarge the size of its concession. The Company's
confidence is such on the Ferber project that it paid for the
original license plus extension during the round of license
renewals in August 2017 and the project is now in good standing
with the intent to carry out drilling during the coming year.
7. Auditors' Report
The comparative figures for the financial year ended 31 March
2017 are not the Company's statutory accounts for that financial
year but the consolidated accounts. Those accounts have been
reported on by the Company's auditors and delivered to the
registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not give any reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under sections 498 (2) or (3) of the Companies Act 2006, relating
to the accounting records of the company.
8. Availability of the Annual Report
This information has been extracted from the Company's Audited
Annual Report for the year ended 31 March 2017, copies of which
will be mailed to shareholders on 1 September 2017 and a copy will
also be available to shareholders and members of the public in hard
copy and free of charge, from the Company's London office at 1st
Floor, 7/8 Kendrick Mews, London, SW7 3HD. Alternatively a
downloadable version will be available from 1 September 2017 from
Company's website: www.galileoresources.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR WGUGGRUPMGPG
(END) Dow Jones Newswires
August 31, 2017 08:15 ET (12:15 GMT)
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