TIDMURA
RNS Number : 7245P
Uranium Resources PLC
21 November 2016
21 November 2016
Uranium Resources Plc / Market: AIM / Epic: URA / Sector:
Exploration
Uranium Resources plc
("Uranium Resources" or the "Company")
Final Results and Notice of AGM
Uranium Resources plc, the AIM listed uranium exploration
company operating in Tanzania, announces its results for the year
ended 30 June 2016.
The Annual Report for the year ended 30 June 2016 will be posted
to shareholders shortly along with a notice of the Company's Annual
General Meeting ("AGM").
The AGM will be held at the offices of Shakespeare Martineau
LLP, 6(th) Floor, 60 Gracechurch Street, London EC3V 0HR on
Wednesday 21(st) December 2016 at 11.00 am
The Annual Report and Notice of AGM can also be viewed on the
Company's website at
http://www.uraniumresources.co.uk/index.php?cid=0065.
For further information please visit www.uraniumresources.co.uk
or contact:
Alex Gostevskikh Uranium Resources Tel: +44 (0) 7997 713377
plc
Matthew Johnson/ Northland Capital Tel: +44 (0) 20 3 861 6625
David Hignell Partners Ltd
Notes to editors
Uranium Resources plc is an AIM listed exploration and
development company. It is the Company's strategy to advance its
existing assets and strengthen its portfolio via opportunistic
acquisition. Uranium Resources has uranium licences in the highly
prospective Karoo Basin in Southern Tanzania.
URANIUM RESOURCES PLC
MANAGING DIRECTOR'S STATEMENT
FOR THE YEARED 30 JUNE 2016
The Company is a uranium explorer with its principal focus on
the Mtonya Project and various exploration prospects within the
Project area ('Mtonya' or 'the 'Project') in the United Republic of
Tanzania. The Mtonya Project area hosts roll-front uranium
mineralisation and is expected to be amenable to in-situ recovery
('ISR'), the most cost-effective and environmentally safe method of
uranium extraction.
In May 2013, the Company announced a maiden uranium resource for
its flagship Mtonya project. The Project achieved this major
milestone in one of the most challenging times for the uranium
industry as uncertainty the uranium market continues to persist
amidst the declining prices.
During the reporting period, the Mtonya Project remained on care
and maintenance although the Company continued to review its
exploration and development strategy, including the possibility of
corporate transactions, to advance and unlock Mtonya's
potential.
The Company's Board believes that Mtonya has the potential to
become a world-class uranium deposit and that the Company will
benefit from increased global demand for uranium in the future as
any profound solution to climate change is not possible without a
prominent role for nuclear power generation. Mtonya's ISR potential
could become even more attractive as the uranium industry attempts
lower production costs and seeks targets for ISR.
Following the definition of Mtonya's maiden resource, the
Company reached a loan agreement with Estes Limited ('Estes'), its
cornerstone investor and strong supporter of the Project. As at the
date of the signing Financial Statements, the Estes loan agreements
of 15 March 2013 and 18 March 2014 were fully drawn and amounted to
a total of US$1,300,000 excluding the interest and were extended to
31 December 2016. On 30 September 2016 the Company announced that
the bridging loan facility had been increased to US$500,000 and
extended to 31 January 2017, thus reaffirming Estes' ongoing
support for the Company as management explore opportunities to
finance a new drilling programme with the objective of expanding
Mtonya's footprint.
Uranium Resources remains committed to developing Mtonya and
advancing it to the development stage with a focus on ISR projects.
The Company also continues to identify and assess new resource
opportunities which complement its existing assets.
Mtonya
The Company's 100%-owned flagship Mtonya project is located
approximately 60 km south of the significant Mkuju River deposit,
which is owned by ARMZ and operated by Uranium One, and has an
indicated and measured resource of 93.3 Mlb U3O8 grading 257 ppm
U3O8.
The Company's exploration model is based on the premise that the
neighbouring Mkuju River project to the north of Mtonya is a small
segment of a regional mineralised roll-front feature, most of which
has no surface exposure.
The Company believes that the Mkuju River is an uplifted and
eroded part of a regional roll-front roughly following a regional
normal fault, forming narrow, thin, and disconnected pods and
lenses of uranium ore that are dominated by secondary uranium
minerals such as metaautunite and metauranocircite. The
near-surface uranium mineralisation at Mtonya remains a valid
exploration target, but its significance is viewed as a lesser
priority in contrast with deeper mineralisation that may yield a
high class uranium deposit, which is amenable to ISR.
The completion of the 26,485 m resource-definition drilling
programme in 2012 allowed the Company to delineate a maiden
CIM-compliant Inferred Resource of 2.014 Mlb U3O8 grading 255 ppm
U3O8. On a 250x50 m grid the resource drilling remains fairly
coarse and significant upside potential remains untested along
strike of the roll-front feature and at depth. Volumetrically, only
1/6 of prospective lithologies have been systematically drilled at
Mtonya.
The Company's Board has spent much of the last two years
refining plans for an extensive in-fill and step-out drilling
programme for Mtonya to test the deeper redox tiers and extend the
known uranium mineralization along strike. The Company intends to
undertake this drilling programme at Mtonya when it has raised
sufficient funds in order to complete the programme and the uranium
market fundamentals have improved to the extent that the potential
of the Project can be recognised by the wider market.
Some of the Company's licences will have reached the end of
their term within 12 months of the date of the group financial
statements. This includes the main Mtonya licence. In such cases
license renewal, extension, or conversion of the licence has been
or will be applied for. While management currently expect that each
renewal, extension or conversion will be granted this cannot be
guaranteed. Interests in exploration and mining tenements in
Tanzania are governed by Tanzanian legislation and are evidenced by
the granting of leases or licences. Each lease or licence is for a
specific term and carries with it work commitments and reporting
conditions as well as other conditions requiring compliance. These
conditions include the requirement, for exploration licences, for
reduction in the area held under licence from time to time unless
it is considered that special circumstances apply. They also
include that at the end of the exploration licence period
application be made for extension of the exploration licence or for
conversion to a mining licence.
With respect to the pending application for extension of one of
the Company's key licenses, the Directors note that delays in
processing such applications are not unusual in Tanzania and that
this is reflected in the fact that the Tanzanian government
continues to allow the company to enjoy full access to the
site.
Financial Results
Uranium Resources is at the exploration stage of its
development. It is not producing revenue and as such the Company is
reporting a loss of US$15,447,000 for the year ended 30 June 2016
mainly due to the impairment of the Exploration and evaluation
assets (2015: loss US$393,000).
Funding and going concern
In March 2013, March 2014 and February 2015 (with Supplementary
agreement dated April 19, 2016) the Company entered into a US$1
million, US$300,000 and US$500,000 loan facility agreements ('the
Loans') respectively with its major shareholder and strategic
investor Estes Limited ('Estes'). The Loans are unsecured and bear
interest at LIBOR.
At 30 June 2016, the Company had drawn down US$1,689,610
(excluding interest) against these facilities. Estes continues to
show its support in providing this flexible funding option to the
Company. The Group plans to continue its work programme in the next
twelve months and beyond as it develops and evaluates its Uranium
project pipeline. The undrawn funds available from the loan
facility, in conjunction with the Group's current cash resources,
do not provide the Group with sufficient available resources to
meet all of its commitments for the next twelve months; the Group
will therefore need to raise additional funds. The Company has
received a confirmation of interest from Estes Limited in providing
additional finance. Consequently the directors consider it
appropriate to prepare the financial statements on a going concern
basis.
Pursuant to the requirements of IFRS 6 and IFRS 13, the
Directors assessed the Company's assets for impairment in the
current market for exploration uranium properties. The Directors,
drawing on their skills, knowledge, and experience and taking into
account external geological consultants reports, aggregate past
expenditures on the project, its state of development, its rarity
and large potential size, lack of active market for exploration
uranium properties, as well as the range of prices that would be
considered in a non-distressed sale in the current market, have
determined the fair market value of the Company's E&EA in the
amount of USD 2,800,000 thus resulting in impairment charge of
after recognition of an impairment charge of US$14,901,000 to the
evaluation and exploration assets.
The Directors remain confident that Mtonya's potential, together
with the Group's historic track record of raising additional funds
and the interest being shown from potential partners, will enable
the Group to fully finance its obligations beyond a period of at
least twelve months from the date of this report, including meeting
future capital and working capital requirements and also settling
the Estes loan facilities, which are due for repayment in full on
31 January 2017. Estes remains very supportive of the Company and
acknowledges the challenges that continue to impact the market for
uranium exploration and may consider extending its outstanding
loans on an ongoing basis while the Company continues its
discussions with potential strategic partners and seeks additional
sources of finance.
Outlook
Negative conditions continue to persist in the uranium market
and they adversely affect the Company's ability to fund further
exploration and development at Mtonya. The Company is currently
reviewing a number of strategic alternatives including, but not
limited to, joint ventures, strategic partnerships, and mergers or
other corporate transactions to enhance shareholder value.
Major shareholder Estes continues to be supportive of the
Company and, at this stage, has indicated it intends to invest
alongside a suitable strategic investor.
Despite the challenging conditions the Company is currently
facing, management believe the uranium market has the potential to
make a sustained recovery. The recent announcement by Mantra
Tanzania Limited, a subsidiary of Uranium One Holdings, regarding a
new mining programme at the Mkuju River Project, has given the
Board grounds for some cautious optimism as we look ahead to
2017.
Alex Gostevskikh
Managing Director
21 November 2016
URANIUM RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2016
2016 2015
US$'000 US$'000
Notes
Administrative expenses (218) (292)
Share options expense 16 - (47)
Impairment of exploration assets 9 (14,901) -
----------- ----------
Group operating loss 3 (15,119) (339)
Interest payable 4 (11) (8)
Foreign exchange (losses)/gains 4 (317) (46)
----------- ----------
Loss before taxation (15,447) (393)
Taxation 5 - -
----------- ----------
Loss for the year (15,447) (393)
Other comprehensive income
Exchange differences on translating
foreign operations 220 52
----------- ----------
Total comprehensive loss attributable
to the equity holders of the
parent (15,227) (341)
=========== ==========
Loss per share (cents)
Basic and Diluted 6 (203.89) (0.05)
The results shown above related entirely to continuing
operations and are attributable to equity shareholders of the
Company.
URANIUM RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
2016 2015
Notes US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 9 2,800 17,651
---------- ----------
Current assets
Receivables 11 - 10
Cash and cash equivalents 22 21
---------- ----------
22 31
---------- ----------
Total Assets 2,822 17,682
---------- ----------
Liabilities
Non-current liabilities
Borrowings 14 - (111)
---------- ----------
Current liabilities
Borrowings 13 (1,715) (1,305)
Trade and other payables 12 (348) (280)
---------- ----------
(2,063) (1,585)
---------- ----------
Total Liabilities (2,063) (1,696)
---------- ----------
Net Assets 759 15,986
========== ==========
Equity
Capital and reserves attributable
to equity holders
Share capital 15 1,225 1,225
Share premium 21,776 21,776
Foreign exchange reserve (106) (326)
Retained losses (22,136) (6,689)
Total Equity 759 15,986
========== ==========
The financial statements were approved by the Board of Directors
on 21 November 2016 and signed on its behalf by:
Alex Gostevskikh
Managing Director
Company Registration Number: 05329401
URANIUM RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
2016 2015
Notes US$'000 US$'000
Assets
Non-current assets
Investments in subsidiaries 10 2,621 18,184
---------- ----------
Current assets
Receivables 11 - 10
Cash and cash equivalents 14 4
---------- ----------
14 14
---------- ----------
Total Assets 2,635 18,198
---------- ----------
Liabilities
Non-current liabilities
Borrowings 14 - (111)
---------- ----------
Current liabilities
Borrowings 13 (1,715) (1,305)
Trade and other payables 12 (305) (251)
---------- ----------
(2,020) (1,556)
---------- ----------
Total Liabilities (2,020) (1,667)
---------- ----------
Net Assets 615 16,531
========== ==========
Equity
Capital and reserves attributable
to equity holders
Share capital 15 1,225 1,225
Share premium 21,776 21,776
Foreign exchange reserve (2,934) (334)
Retained losses (19,452) (6,136)
Total Equity 615 16,531
========== ==========
The financial statements were approved by the Board of Directors
on 21 November 2016 and signed on its behalf by:
Alex Gostevskikh
Managing Director
Company Registration Number: 05329401
URANIUM RESOURCES PLC
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2016
Consolidated statement of changes in equity
Foreign
currency
Share Share translation Retained Total
capital premium reserve losses equity
US$'000 US$'000 US$'000 US$'000 US$'000
At 1 July 2014 1,206 21,713 (378) (6,343) 16,198
Issue of share capital 19 63 - - 82
Share based payment - - - 47 47
Total comprehensive
income/(loss) - - 52 (393) (341)
At 30 June 2015 1,225 21,776 (326) (6,689) 15,986
Total comprehensive
income/(loss) - - 220 (15,447) (15,227)
At 30 June 2016 1,225 21,776 (106) (22,136) 759
=========== ========= ============= =========== ==========
Company statement of changes in equity
Foreign
currency
Share Share translation Retained Total
capital premium reserve losses equity
US$'000 US$'000 US$'000 US$'000 US$'000
At 1 July 2014 1,206 21,713 987 (6,802) 17,104
Issue of share capital 19 63 - - 82
Share based payment - - - 47 47
Total comprehensive
income/(loss) - - (1,321) 619 (702)
At 30 June 2015 1,225 21,776 (334) (6,136) 16,531
Total comprehensive
income/(loss) - - (2,600) (13,316) (15,916)
At 30 June 2016 1,225 21,776 (2,934) (19,452) 615
============= ============== ============= ============= =============
URANIUM RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2016
2016 2015
US$'000 US$'000
Cash flows from operating activities
Loss for the year (15,447) (393)
Impairment of exploration and 14,901 -
evaluation assets
Interest expense 11 8
Share Options Expense - 47
Foreign exchange loss/(gain) 319 44
Decrease / (Increase) in receivables 10 (9)
Increase in payables 5 134
--------- --------
Net cash used in operating activities (201) (169)
--------- --------
Investing activities
Funds used for exploration and evaluation (87) (150)
--------- --------
Net cash used in investing activities (87) (150)
--------- --------
Financing activities
Borrowings 288 306
Net cash inflow from financing 288 306
--------- --------
Decrease in cash and cash equivalents - (13)
Foreign exchange movements on 1 -
cash
Cash and cash equivalents at beginning
of the year 21 34
--------- --------
Cash and cash equivalents at the
end of the year 22 21
========= ========
URANIUM RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2016
2016 2015
US$'000 US$'000
Cash flows from
operating activities
Profit/(Loss) for
the year (13,316) 619
Impairment loss 14,901 -
Interest expense 11 8
Share Options Expense - 47
Foreign exchange (gain)/loss (1,787) (925)
Decrease / (Increase)
in receivables 10 (9)
Increase in payables 20 122
Net cash used in operating activities (161) (138)
--------- --------
Investing activities
Investments and loans granted to
subsidiaries (118) (177)
--------- --------
Net cash used in
investing activities (118) (177)
--------- --------
Financing activities
Borrowings 288 306
Net cash inflow
from financing 288 306
--------- --------
Decrease in cash and cash equivalents 9 (9)
Foreign exchange 1 -
retranslation
Cash and cash equivalents at beginning
of the year 4 13
--------- --------
Cash and cash equivalents at the
end of the year 14 4
========= ========
URANIUM RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2016
1. Background and accounting policies
The Company is registered in England and Wales, having been
incorporated on 11 January 2005 under the Companies Act with
registered number 05329401 as a public company limited by shares.
The Company's shares are traded on the AIM Market ("AIM") of The
London Stock Exchange plc.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been applied to all years presented, unless otherwise stated
below.
The Company's and Group's financial statements for the year
ended 30 June 2016 and for the comparative year ended 30 June 2015
have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union ("IFRS") and
IFRIC (International Financial Reporting Interpretations Committee)
interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
1.1 Basis of preparation
The Group financial statements are prepared on the going concern
basis, under the historical cost convention as modified for fair
value accounting, if applicable, and in accordance with IFRS,
including IFRS6 'Exploration for and Evaluation of Mineral
Resources'. The Parent Company's financial statements have also
been prepared in accordance with IFRS and the Companies Act
2006.
The Group and Parent Company financial statements are presented
in US$ and have been rounded to the nearest US$'000.
The consolidated financial statements incorporate the accounts
of the Company and its subsidiaries and have been prepared by using
the principles of acquisition accounting ("the purchase method"),
which includes the results of the subsidiaries from their dates of
acquisition. Intra-group sales, profits and balances are eliminated
fully on consolidation.
1.2 Going concern
In April 2016, the company increased its loan facilities with
Estes by US$220,000 to a total of US$1,740,000. The facilities,
which are unsecured and bear interest at LIBOR, are for working
capital. At 30 June 2016, the Company had drawn down $1,689,610
against the available facilities and had incurred $10,825 interest
accrued for the reporting period (US$25,733 - accumulated amount of
interests). At 30 June 2015, the Company had drawn down
US$1,401,000 against the available facilities (US$14,908 -
accumulated amount of interests).
Estes continues to show its support in providing this flexible
funding option to the Company. As stated above the Group plans to
continue its work programme in June 2016, however the undrawn funds
available from the loan facility, in conjunction with the Group's
current cash resources, do not provide the Group with sufficient
available resources to meet all of its commitments for the next
twelve months; the Group will therefore need to raise additional
funds. The Company has received a confirmation that Estes shall
continue to provide debt funding to the Company should the Company
be unable to raise funds on the market or source funds by other
means including but not limited to entering into joint-venture
agreements, disposal of assets, restructuring or re-assignment of
debt etc.
The Directors remain confident that Mtonya's potential, together
with the Group's historic track record of raising additional funds
and the interest being shown from potential partners, will enable
the Group to fully finance its obligations beyond a period of at
least twelve months from the date of this report, including meeting
future capital and working capital requirements and also settling
the Estes loan facilities, which are due for repayment in full at
the amount of US$1,313,158 on or before 31 December 2016, at the
amount of US$402,185 on or before 31 January 31 2017 accordingly
these accounts are prepared on a going concern basis. In March
2013, March 2014 and February 2015 (with Supplementary agreement
dated April 19, 2016) the Company entered into a US$1 million,
US$300 thousands and US$440 thousands loan facility agreements
('the Loans') respectively with its major shareholder and strategic
investor Estes Limited ('Estes'). The Loans are unsecured and bear
interest at LIBOR.
At 30 June 2016, the Company had drawn down $1,689,610
(excluding interest) against these facilities. Estes continues to
show its support in providing this flexible funding option to the
Company. The Group plans to continue its work programme in the next
twelve months and beyond as it develops and evaluates its Uranium
project pipeline. The undrawn funds available from the loan
facility, in conjunction with the Group's current cash resources,
do not provide the Group with sufficient available resources to
meet all of its commitments for the next twelve months; the Group
will therefore need to raise additional funds.
Some of the Company's licenses will have reached the end of
their term within 12 months of the date of the group financial
statements. This includes the main Mtonya licence. In such cases
license renewal, extension, or conversion of the licence has been
or will be applied for. While management currently expect that each
renewal, extension or conversion will be granted this cannot be
guaranteed even though the company has received no indication of
regulatory non-compliance and has fully complied with required
aggregate expenditure to date. Interests in exploration and mining
tenements in Tanzania are governed by Tanzanian legislation and are
evidenced by the granting of leases or licences. Each lease or
licence is for a specific term and carries with it work commitments
and reporting conditions as well as other conditions requiring
compliance. These conditions include the requirement, for
exploration licences, for reduction in the area held under licence
from time to time unless it is considered that special
circumstances apply. They also include that at the end of the
exploration licence period application be made for extension of the
exploration licence or for conversion to a mining licence.
The Company has plans to continue further exploration for and
evaluation of mineral resources, although these plans are
contingent upon the Company's ability to obtain external funding.
For the last two years, the Company has been in nearly continuous
discussions with several potential investors but is yet to
transact.
The Board plans a modest exploration campaign with varied
objectives depending on the size of financing available. Such an
exploration campaign would require US$1.0-1.5 million. The Company
shall continue testing its ability to raise funds on the public
market or otherwise. While there are several indicators that
demonstrate the nascent investors' interest to uranium exploration
companies, uncertainty persists.
The Directors believe that the Company continue to meet its
liabilities as they fall due, and for at least the next twelve
months from the date of approval of the Financial Statements.
1.3 New IFRS standards and interpretations
The accounting policies adopted in the preparation of these
financial statements are consistent with those followed in the
preparation of the prior year's financial statements except for the
adoption of new standards and interpretations effective as of 1
July 2015. The Company has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective
New and amended standards and interpretations
There were a number of new standards and interpretations,
effective from 1 July 2015 that the Company applied for the first
time in the current year.
The nature and the impact of each new standard and amendment
that may have an impact on the Company now or in the future, is
described below. A few other amendments apply for the first time in
2016; however, they do not impact the annual financial statements
of the Company.
Other than the changes described below, the accounting policies
adopted are consistent with those of the previous financial
year.
Following relevant revisions and amendments
to existing standards were issued by the IASB,
which are effective for the accounting period
beginning on or after January 1, 2016 and have
been adopted by the Company:
-----------------------------------------------
Standard
number Title Effective
date
--------- ------------------------------------ -----------
IAS 16 January
& Property, Plant and Equipment 1, 2016
IAS 38 and Intangible Assets - Amendments
IFRS 11 January
Joint Arrangements - Amendments 1, 2016
IAS 1 January
Disclosure Initiative - Amendments 1, 2016
IFRS 10 Sale or Contribution of Assets January
& between an Investor and its 1, 2016
IAS 28 associate or Joint Venture -
Amendments
Annual Improvements 2012 - 2014
IAS 19 January
Employee Benefits - Amendments 1, 2016
IAS 34 Interim Financial Reporting January
- Amendments 1, 2016
IFRS 5 Non-current Assets Held for January
Sale and Discontinued Operations 1, 2016
- Amendments
IFRS 7 Financial Instruments: Disclosures January
- Amendments 1, 2016
The revisions and amendments have been applied
in accordance with the transitional provisions
and do not have a material impact on the Company's
individual financial statements.
Standards issued but not yet effective
Standards issued but not yet effective up to the date of
issuance of the Company's financial statements are described below.
This description is of standards and interpretations issued, which
the Company reasonably expects to be applicable at a future date.
The Company intends to adopt those standards when they become
effective. The Company expects that adoption of these standards,
amendments and interpretations in most cases not to have any
significant impact on the Company's financial position or
performance in the period of initial application. In cases where it
will have an impact, the Company is still assessing the possible
impact.
IFRS 9 "Financial Instruments" (2014)
The IASB released IFRS 9 "Financial Instruments" (2014),
representing the completion of its project to replace IAS 39
"Financial Instruments: Recognition and Measurement". The new
standard introduces extensive changes to IAS 39's guidance on the
classification and measurement of financial assets and introduces a
new "expected credit loss" model for the impairment of financial
assets. IFRS 9 also provides new guidance on the application of
hedge accounting.
The new standard is required to be applied for annual reporting
periods beginning on or after
1 January 2018.
IFRS 15 "Revenue from Contracts with Customers"
IFRS 15 presents new requirements for the recognition of
revenue, replacing IAS 18 "Revenue", IAS 11 "Construction
contracts", and several revenue-related Interpretations. The new
standard establishes a control-based revenue recognition model and
provides additional guidance in many areas not covered in detail
under existing IFRSs, including how to account for arrangements
with multiple performance obligations, variable pricing, customer
refund rights, supplier repurchase options, and other common
complexities.
IFRS 15 is effective for reporting periods beginning on or after
1 January 2018.
IFRS 16 "Leases"
IFRS 16 "Leases" brings most leases on-balance sheet for lessees
under a single model, eliminating the distinction between operating
and finance leases. Lessor accounting however remains largely
unchanged and the distinction between operating and finance leases
is retained. IFRS 16 supersedes IAS 17 "Leases" and related
interpretations and is effective for periods beginning on or after
1 January 2019, with earlier adoption permitted if IFRS 15 "Revenue
from Contracts with Customers" has also been applied.
1.4 Exploration and evaluation expenditure
Once a licence has been obtained, all costs associated with
exploration and evaluation are capitalised on a project-by-project
basis, where a project may be a collection of geographically and
geologically similar licences. The costs are carried forward on a
project-by-project basis until it has been established that
commercial reserves do not exist or are insufficiently supported by
the potential carrying value of the project. Costs incurred include
appropriate technical and administrative expenses but not general
overheads.
Where possible, general Tanzanian costs attributable to projects
are allocated to each project. However, where this is impractical,
these general costs are held in a separate cost pool and are
carried forward in one general pool of assets until it has been
established that commercial reserves do not exist or are
insufficiently supported by the potential carrying value of all
Tanzanian projects.
When production commences, the accumulated costs for the
relevant area of interest are transferred from intangible assets to
tangible assets as "Developed Uranium Assets" and amortised over
the estimated life of the commercial reserves on a unit of
production basis, as discussed in note 1.7 below.
1.5 Impairment of exploration and evaluation expenditure
The carrying value of unevaluated areas is assessed on at least
an annual basis or when there has been an indication that
impairment in value may have occurred. The impairment of
unevaluated prospects is assessed as based on the Directors'
intention with regard to future exploration and development of
individual significant areas and the ability to obtain funds to
finance such exploration and development.
An impairment loss is reversed if, and only if, there has been a
change in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognized. A reversal of
an impairment loss for an assets is recognized in profit or loss,
unless the asset is carried at revalued amount, in which case, such
reversal is treated as revaluation reserve. However, to the extent
that an impairment loss on the same revalued asset was previously
recognized in profit or loss, a reversal of impairment is also
recognized in profit or loss.
1.6 Impairment of developed uranium assets
When events or changes in circumstances indicate that the
carrying amount of developed uranium assets included within
tangible assets may not be recoverable from future net revenues
from uranium reserves attributable to that asset, a comparison
between the net book value of the asset and the discounted future
cash flows from the estimated recoverable uranium reserves is
undertaken. To the extent that the carrying amount exceeds the
recoverable amount, the asset is written down to its recoverable
amount, with the write off charged to the statement of
comprehensive income.
1.7 Amortisation of developed uranium assets
Developed uranium assets are amortised on a unit of production
basis using the ratio of uranium production in the period to the
estimated quantity of commercial reserves at the end of the period
plus production in the period. Changes in estimates of commercial
reserves or future development costs are dealt with
prospectively.
1.8 Decommissioning costs
Where a material liability for the removal of production
facilities and site restoration at the end of the field life
exists, a provision for decommissioning is recognised. The amount
recognised is the present value of estimated future expenditure
determined in accordance with local conditions and requirements. An
asset of an amount equivalent to the provision is also created and
depreciated on a unit of production basis. Changes in estimates are
recognised prospectively, with corresponding adjustments to the
provision and the associated asset.
1.9 Cash and cash equivalents
Cash and cash equivalents are carried in the statement of
financial position at cost and comprise cash in hand, cash at bank,
deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less. Bank
overdrafts are included within borrowings in current liabilities on
the statement of financial position. For the purposes of the
statement of cashflows, cash and cash equivalents also includes any
the bank overdrafts.
1.10 Investments in subsidiaries
Investments in subsidiary companies are stated at cost less
provision for impairment in the Company's statement of financial
position.
1.11 Share based payments
The Company has made share-based payments to certain directors
and employees by way of share options. The fair value of these
payments is calculated by the Company using the Black Scholes
option pricing model, as the Directors believe that the options are
likely to be exercised nearer their expiry dates. The expense is
recognised on a straight line basis over the period from the date
of award to the date of vesting, based on the Company's best
estimate of shares that will eventually vest.
1.12 Foreign currencies
(i) Functional and presentational currency
Items included in the Group's and Parent Company's financial
statements are measured using the currency of the primary economic
environment in which the Group operates ("the functional
currency"). The Directors consider the Pound Sterling to be the
Parent Company's functional currency. The Group and Company
financial statements are presented in US$.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of
comprehensive income. The yearend rate applied was GBP1: US$1.33898
(2015: GBP1: US$1.5717)
Transactions in the accounts of individual Group companies are
recorded at the rate of exchange ruling on the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the statement of
financial position date. All differences are taken to the statement
of comprehensive income.
1.13 Deferred taxation
Deferred income taxes are provided in full, using the liability
method, for all temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
financial statements. Deferred income taxes are determined using
tax rates that have been enacted or substantially enacted and are
expected to apply when the related deferred income tax asset is
realised or the related deferred income tax liability is settled.
The principal temporary differences arise from depreciation or
amortisation charged on assets and tax losses carried forward.
Deferred tax assets relating to the carry forward of unused tax
losses are recognised to the extent that it is probable that future
taxable profit will be available against which the unused tax
losses can be utilised.
1.14 Receivables
Receivables are carried at original invoice amount less
provision made for impairment of these receivables. A provision for
impairment of receivables is established when there is objective
evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. The amount of
the provision is the difference between the assets' carrying amount
and the recoverable amount. Provisions for impairment of
receivables are included in the statement of comprehensive
income.
1.15 Payables
Payables are recognised initially at fair values and
subsequently measured at amortised cost using the effective
interest method.
1.16 Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the increase of new shares or options are
shown in equity as a deduction from the proceeds.
1.17 Critical accounting judgements and estimates
The preparation of financial statements in conformity with
International Financial Reporting Standards requires the use of
accounting estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during
the reporting period. Although these estimates are based on
management's best knowledge of current events and actions, actual
results ultimately may differ from those estimates. IFRS also
require management to exercise its judgement in the process of
applying the Group's accounting policies. The prime areas involving
a higher degree of judgement or complexity, where assumptions and
estimates are significant to the financial statements, are as
follows:
Impairment of exploration and evaluation of assets
The Group determines whether exploration and evaluation assets
are impaired when facts and circumstances suggest that the carrying
amount may exceed its recoverable amount. Such indicators include
the point at which a determination is made as to whether or not
commercial reserves exist. The carrying amount of exploration and
evaluation assets at 30 June 2016 is included in note 9 to the
financial statements.
Share based payments
The Group measures the cost of equity settled transactions by
reference to the fair value of the equity instruments at the date
at which they are granted. The fair value is determined using a
Black-Scholes model. Refer to Note 16 for variables entered into
the model.
2. 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
segment and that make strategic decisions, has been identified as
the Board of Directors.
The Group had no operating revenue during the period.
The Group operates in one segment, the exploration and
evaluation of uranium. The Parent Company operates a head office
based in the United Kingdom which incurred certain administration
and corporate costs. The Group's operations span two countries,
Tanzania and the United Kingdom.
Segment results Segment results
2016 2015
US$'000 US$'000
Uranium (Tanzania) (25) (42)
Administration and Corporate
(UK) (193) (250)
Share Options Expense
(UK) - (47)
Uranium (Tanzania) Impairment (14,901) -
--------- --------
Total operating loss
of all segments (15,119) (339)
--------- --------
Finance expense (11) (8)
Foreign exchange (losses)/gains (317) (46)
Loss before and after
tax (15,447) (393)
========= ========
The Group's depreciation, amortisation and capital expenditure
is incurred entirely within the Tanzanian segment.
Segment assets and liabilities Non-Current Non-Current
Assets Liabilities
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Uranium (Tanzania) 2,800 17,651 - -
Administration and Corporate
(UK) - - - 111
--------- --------- --------- ---------
Total of all segments 2,800 17,651 - 111
========= ========= ========= =========
Total Assets Total Liabilities
Segment assets and liabilities 2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Uranium (Tanzania) 2,808 17,668 43 29
Administration and Corporate
(UK) 14 14 2,020 1,667
--------- --------- --------- ---------
Total of all segments 2,822 17,682 2,063 1,696
========= ========= ========= =========
3. Group operating loss
2016 2015
US$'000 US$'000
The Group's operating loss is
stated after charging / (crediting):
Accounting and audit fees 35 57
Broker / Nomad fees 59 66
Consulting fees - -
Directors' remuneration (excluding
share-based payments) 80 101
Listing costs 16 18
Public relations - 12
General expenses 28 38
Share Options Expense - 47
Impairment charge 14,901 -
======== ========
4. Interest
2016 2015
US$'000 US$'000
Foreign exchange (losses)/gains (317) (46)
Loan interest payable (11) (8)
======== ========
5. Taxation
2016 2015
US$'000 US$'000
UK corporation tax - -
Overseas tax - -
Deferred tax - -
--------- --------
Total tax charge - -
========= ========
The tax charge can be reconciled
to the loss for the year as follows:
Loss for the year (15,227) (341)
--------- --------
Tax at the standard rate of UK
corporation tax of 20.75% (3,205) (82)
Effects of:
Disallowed expenses - 10
Tax losses carried forward not
yet recognised as a deferred tax
asset 3,205 72
--------- --------
Total tax charge - -
========= ========
At the year end date, the Group has unused tax losses of
US$19,452,000 (2015: US $6,136,000) available for offset against
suitable future profits. A deferred tax asset has not been
recognised in respect of such losses due to the uncertainty of
future profit streams. The deferred tax asset at 18% (2015: 20%) is
estimated to be US$3,501,360 (2015: US$ 1,227,000).
6. Loss per share
The basic loss per ordinary share is 203.89 cents (2015: 0.05
cents) and has been calculated using the loss for the financial
year of US$15,447,000 (2015: loss US$ 393,000) and the weighted
average number of ordinary shares in issue of 757,632,495 (2015:
746,790,767).
The diluted loss per share has been kept the same as the basic
loss per share as the conversion of share options decreases the
basic loss per share, thus being anti-dilutive. Details of
potentially diluted shares are discussed in notes 15, 16.
7. Holding company profit and loss account
In accordance with the provisions of the Section 408 of the
Companies Act 2006, the Parent Company has not presented a
statement of comprehensive income. A loss for the year ended 30
June 2016 of US$13,316,000 (2015: profit US$619,000) has been
included in the consolidated statement of comprehensive income.
8. Staff costs (including Directors)
2016 2015
US$'000 US$'000
Wages, salaries and fees 107 129
Social security costs (including - -
refunds)
107 129
-------- --------
Transferred to intangible assets (27) (28)
-------- --------
80 101
======== ========
Key management of the Group are considered to be the Directors
of the Company and their accrued remuneration was as follows:
2016 (US$'000s) 2015 (US$'000s)
--------------------- ------------------ ------
Fees/ Total Fees/ allowances/ Total
allowances/ salaries
salaries
Ross Warner - - 18 18
James Pratt - - 7 7
Alex Gostevskikh
(1) 80 80 113 113
Andrew Lewis - - (8) (8)
forex - - (1) (1)
------------- ------ ------------------ ------
Total Key Management 80 80 129 129
============= ====== ================== ======
(1) During the period 25% (2015: 25%) of Alex Gostevskikh's
salary was capitalised to intangibles. In 2016 this amounted to
US$26,704 (2015: US$28,359), and is included in the amount
disclosed above.
9. Exploration and evaluation assets
Group Exploration
and evaluation
expenditure
Cost and net book value US$'000
At 1 July 2014 17,521
Additions 178
Foreign exchange (48)
Impairment -
At 30 June 2015 17,651
Additions 142
Foreign exchange (92)
Impairment (14,901)
---------------
At 30 June 2016 2,800
===============
The Group's intangible asset consists entirely of capitalised
exploration and evaluation expenditure. The exploration and
evaluation ("E&E") asset represents costs incurred in relation
to the Group's Tanzanian licences. These amounts have not been
written off to the statement of comprehensive income as exploration
expenses because commercial reserves have not yet been established
nor has the determination process been completed.
In accordance with the Group's accounting policy, the Group's
exploration and evaluation assets are reviewed for impairment when
there have been circumstances suggesting that there has been the
possibility of an impairment. The Directors, drawing on their
skills, knowledge, and experience and taking into account external
geological consultants reports, aggregate past expenditures on the
project, its state of development, its rarity and large potential
size, lack of active market for exploration uranium properties, as
well as the range of prices that would be considered in a
non-distressed sale in the current market, have determined the fair
market value of the Company's Exploration and evaluation assets in
the amount of US$2,800,000.
The total impairment charge for the period is US$14,901,000 (30
June 2015: US$Nil). The remaining carried value relates entirely to
the Company's flagship project Mtonya. This impairment can be
modified or reversed once the situation changes and the estimates
used to determine the asset's recoverable value is reassessed.
Currently management believe that the restart of exploration
activities on the site would be one of the main factors considered
for the reversal
The outcome of ongoing exploration and evaluation, and therefore
whether the carrying value of E&E assets will ultimately be
recovered, is inherently uncertain. The Directors have assessed the
value of the remaining uranium exploration and evaluation
expenditure and, in their opinion, no further impairment is
necessary. This assessment includes a review of the expiry dates of
licenses and the likelihood of their renewal.
10. Investments in subsidiary undertakings
Loans Investments
to subsidiary in subsidiary
undertakings undertakings Total
US$'000 US$'000 US$'000
Company
Cost
At 1 July 2014 14,294 4,137 18,431
Loans granted/Investments 177 28 205
Foreign exchange on
loans (133) (319) (452)
At 30 June 2015 14,338 3,846 18,184
=============== =============== =========
Loans granted/Investments 118 27 145
Impairment (14,220) (681) (14,901)
Foreign exchange (236) (571) (807)
At 30 June 2016 - 2,621 2,621
=============== =============== =========
The Company's subsidiary undertakings as at 30 June 2016 were as
follows:
Principal Percentage of ordinary
Subsidiary undertakings activities share capital held
Direct
Deep Yellow Tanzania
Limited Uranium exploration 100%
URA (St Henri) Limited Dormant 100%
WML Uranium Holdings
Limited Holding company 100%
Indirect
Western Metals Tanzania
Limited Uranium exploration 100%
Western Metals Exploration
Limited Dormant 100%
Western Metals Uranium
Limited Dormant 100%
The Directors have assessed the carrying value of the
investments in subsidiaries, and decided to recognize an impairment
charge for the period at the amount of $681,000 (30 June 2015:
$Nil). The total impairment charge for the period is $14,901,000
(30 June 2015: $Nil) including the impairment of Loans to
subsidiary undertakings.
11. Receivables
2016 2015
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Other receivables - - 10 10
========= ========= ======== ========
12. Trade and other 2016 2015
payables
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Trade payables 287 287 235 224
Accruals and other
payables 61 18 45 27
-------- -------- -------- --------
348 305 280 251
======== ======== ======== ========
13. Borrowings -current
2016 2015
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Borrowings in period 1,715 1,715 1,305 1,305
Borrowings carried
forward 1,715 1,715 1,305 1,305
======== ======== ======== ========
On 15 March 2013, the Company entered into a US$1 million loan
facility agreement with its major shareholder and strategic
investor Estes Limited. The Loan facility, which is unsecured, has
been fully utilised. The Loan bears interest at LIBOR. As of the
date of signing of the Financial Statements the loan agreement was
extended until December 31, 2016.
On 18 March 2014, the Company entered into a US$300,000 loan
facility agreement with its major shareholder and strategic
investor Estes Limited. The Loan facility is unsecured. As of 30
June 2016 the Company had drawn down $290,000 against the available
facility. The Loan bears interest at LIBOR. As of the date of
signing of the Financial Statements the loan agreement was extended
until December 31, 2016.On 19 February 2015, the Company entered
into a US$200,000 loan facility agreement with its major
shareholder and strategic investor Estes Limited. Subsequently the
total principle amount was increased to US$500,000. The Loan
facility is unsecured. As of 30 June 2016 the Company had drawn
down US$399,610 against the available facility. The Loan bears
interest at LIBOR. As of the date of signing of the Financial
Statements the loan agreement was extended until January 31,
2017.
14. Borrowings - non-current
2016 2015
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Borrowings in period - - 111 111
Borrowings carried
forward - - 111 111
========= ========= ======== ========
15. Share capital and share options
2016 2015
US$'000 US$'000
Allotted, called up and fully paid
share capital
757,632,495 (2015 - 745,493,750)
ordinary shares of 0.1p each 1,225 1,225
======== ========
During the year ended June 30, 2016 there were no changes in the
Share capital of the Company.
16. Share-based payments
Company and Group
Details of the Company's share options at 30 June 2015 are as
follows
Options outstanding at 30 June 2015:
Date of grant Number of Exercise
options price Exercisable between
30 November Up to 15 April
2011 18,000,000 0.7p 2017
30 November Up to 15 April
2011 20,000,000 1.5p 2017
30 November Up to 15 April
2011 10,000,000 3.0p 2017
48,000,000
===========
Options outstanding at 30 June 2016:
Date of grant Number of Exercise
options price Exercisable between
30 November Up to 15 April
2011 18,000,000 0.7p 2017
30 November Up to 15 April
2011 20,000,000 1.5p 2017
30 November Up to 15 April
2011 10,000,000 3.0p 2017
48,000,000
===========
All of the unexpired options were modified as part of the
repricing exercise carried out on 18 May 2015 in order to bring the
strike price of the share options more in line with the current
market price of the Company's shares and to deliver a viable
incentive and reward package to the Directors of the Company.
On 30 June 2016, the Company had 48,000,000 share options with
exercise prices of 0.7p, 1.5p, 3.0p. The details of FV calculations
of the options are as follows:
Grant Share Exercise Volatility Option Dividend Risk-free Fair
date price price life yield investment value
at date rate per
of grant option
18/05/2015 0.5p 0.7p 74% 15/04/2017 0% 1.19% 0.151p
18/05/2015 0.5p 1.5p 74% 15/04/2017 0% 1.19% 0.062p
18/05/2015 0.5p 3.0p 74% 15/04/2017 0% 1.19% 0.020p
Expected volatility was determined by calculating the historical
volatility of the Group's share price for the
past four years. The share option charge was calculated using the Black-Scholes model.
As a result of repricing, a share option expense of US$ 47,080
was recognised and is included within retained losses at the year
ended June 30, 2015.
The Company's share price ranged between 0.18p and 0.60p (2015:
0.35p and 0.90p) during the year. The closing share price as at 30
June 2016 was 0.28p (2015: 0.60p).
17. Decommissioning expenditure
The Directors have considered the need for any necessary
provision for the cost of rectifying any environmental damage, as
might be required under local legislation and the Group's licence
obligations. In their view, no provision is necessary at 30 June
2016, for any future costs of decommissioning or any environmental
damage.
18. Financial instruments
Interest rate risk
The Company's exposure to interest rate risk, which is the risk
that a financial instrument's value will fluctuate as a result of
changes in market interest rates on classes of financial assets and
financial liabilities, was as follows:
Floating Fixed Floating Fixed
interest interest interest interest
rate rate rate rate
30 June 30 June 30 June 30 June
2016 2016 2015 2015
Financial liabilities US$'000 US$'000 US$'000 US$'000
and assets:
Borrowings 1,715 - 1,416 -
Cash at bank 22 - 21 -
The effective weighted average interest rate was 0.69% (2015:
0.63%) on financial liabilities.
The net fair value of financial assets and financial liabilities
approximates to their carrying amount as disclosed in the statement
of financial position and in the related notes.
Currency risk
The functional currency for the Group's operating activities is
the British Pound and for drilling activities the US Dollar. The
Group's objective in managing currency exposures arising from its
net investment overseas is to maintain a low level of borrowings.
The Group has not hedged against currency depreciation but
continues to keep the matter under review. At 30 June 2016, the
Group held the following US Dollar equivalent:
30 June 30 June
2016 2015
US$'000 US$'000
Great British Pounds - -
United States Dollars 6 21
6 21
======== ========
Financial risk management
The Directors recognise that this is an area in which they may
need to develop specific policies should the
Group become exposed to further financial risks as the business
develops.
Capital risk management
The Group considers capital to be its equity reserves. At the
current stage of the Group's life cycle, the Group's
objective in managing its capital is to ensure funds raised meet
the exploration expenditure commitments.
The Group ensures it is meeting its objectives by reviewing its
KPIs to ensure its exploration activities are progressing in line
with expectations, controlling costs and placing unused funds on
deposit to conserve resources and increase returns on surplus cash
held.
19. Events after the year end date
On September 27, 2016 the Company entered into a further
supplementary agreement which extended the US$1 million loan
facility agreement until December 31, 2016.
On September 27, 2016 the Company entered into a further
supplementary agreement which extended the US$300,000 loan facility
agreement until December 31, 2016.
On September 27, 2016 the Company entered into a further
supplementary agreement which increased the loan facility dated 19
February 2015 to US$500,000 and the term has been extended to 31
January 2017.
20. Related party transactions
Key management of the Group are considered to be the Directors
of the Company. There are no transactions with the Directors other
than the above, and their remuneration and interests in shares and
share options. The remuneration of individual Directors is shown in
the Directors' Report.
Estes Limited, the Company's ultimate controlling party,
provided an additional loan facility during the period. As at 30
June 2016, the outstanding balance and the maximum outstanding
during the year was US$1,715,000 (2015: US$1,416,000). During the
year, interest of US$10,825 was charged. Further details of the
loan facility are included in note 13 and 14 to the financial
statements.
21. Future exploration expenditure
Other than annual tenement rentals totalling approximately
US$100,000 per annum, the Group does not have any contractual
commitments required to maintain the Group's licences. At 30 June
2016, the Group has outstanding commitments of approximately
US$100,000 relating to its Tanzanian exploration activities.
22. Ultimate controlling party
As at 30 June 2016, the Company's ultimate controlling party is
Estes Limited which owns 55.1% of the
Company's issued share capital. Details of transactions with
Estes are included in note 20.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGGAPGUPQGPG
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November 21, 2016 07:36 ET (12:36 GMT)
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