TIDMMTR
31 May 2019
Metal Tiger Plc
("Metal Tiger", the "Company" or the "Group")
Audited results for the year ended 31 December 2018 and Notice
of Annual General Meeting
Metal Tiger plc (LON: MTR), the London Stock Exchange AIM listed
investor in strategic natural resource opportunities, is pleased to
announce its audited results for the year ended 31 December
2018.
Highlights:
-- Sale of the Group's 30 per cent. interest in the T3 Copper Project in
Botswana to MOD Resources Limited ("MOD") for shares, options
and
royalty interests amounting to GBP16.8million, generating a
profit of
GBP12.5 million.
-- Increased interest in the Kalahari Copper Belt through a GBP859,000
investment into Kalahari Metals Limited ("KML") in exchange for
a 34
per cent. interest in KML, with an option to increase its
interest to
50 per cent. for a further US$500,000 which was exercised post
the
year end.
-- In August 2018, successfully raised GBP6.1million, including GBP2.6million
from the Sprott Group of Companies.
-- Significant progress achieved in our joint ventures with our partners,
MOD and KML, through exploration workflows around the Kalahari
Copper
Belt, leading to the identification of multiple potential
high-grade
exploration targets.
-- Thai Government's Minerals Management Master Plan completed in
December 2018, giving clarity for forward planning for the
Group's
interests in the Boh Yai lead-zinc-silver mine.
-- Continued investment across both Direct Projects and Direct Equites,
creating a balanced portfolio of opportunities with varied
exposure to
several strong management teams and commodity classes, with
the
potential for significant returns.
-- The Group recorded a loss for 2018 of approximately GBP4.0million before
tax despite the recorded gain on the sale of its interest in
T3,
partially due to the decline in the MOD share price between
the
recorded gain and the financial year end.
-- Net asset value of the Company increased to GBP18,951,000 (2017:
GBP15,443,000) equating to 1.40p per share on a fully diluted
basis
(2017: 1.33p per share).
Post Period
-- Raised GBP1million through a private placing conducted by SI Capital
Limited.
-- Raised GBP2million through a non-brokered private placement conducted by
Sprott Capital Partners LP and one of its affiliates, Sprott
Global
Resource Investments Ltd.
-- Definitive Feasibility Study for the T3 Copper Project completed in
March 2019. MOD expects to update the T3 Resource Model during
the
third quarter of 2019, following the completion of the ongoing
T3
infill drilling programme and ongoing metallurgical recovery
test
work. MOD expects these workstreams will also permit the
upgrading of
part of production within the first two stages of the T3 open
pit into
the higher confidence JORC compliant Measured Resource
category.
-- Significant operational progress achieved by KML at the Okavanago and
Ngami Copper Projects, with several potentially high-value
targets
identified by airborne electromagnetic surveys and diamond
drilling of
2,100m planned to commence shortly.
-- Exploration work began at the Logrosán Project, Spain, with
encouraging results that could significantly add value to the
project,
with five high grade tungsten intersections averaging 3m @ 0.3%
WO3,
plus associated tin credits, confirmed at depth. Logrosán also
yielded
three high grade, one metre wide, gold intersections (ranging
between
9.7g/t and 96.2g/t Au), across two separate targets,
delineating
subsurface gold for the first time in the Logrosán area.
Michael McNeilly CEO of Metal Tiger stated:
"The Board believes that 2018 was a transformational year for
the Group with significant progress being achieved across our
investment portfolio thanks to the hard work of the Metal Tiger
team, as well as the continued support of its shareholders. Most
notably, the sale of the T3 Project has set the Group up for
potential future success through the Group's increased footprint in
the highly prospective Kalahari Copper Belt, whilst eliminating the
cash exposure associated with funding the development of the T3
project. We have continued to make good progress in 2019 across
both our Direct Projects and Direct Equities Divisions and look
forward to further value realisation across our portfolio."
The Annual Report and Accounts for the year ended 31 December
2018 will be available shortly to view and download from Metal
Tiger's website (www.metaltigerplc.com), along with a notice of
Annual General Meeting. The Company has implemented electronic
voting and full instructions, including how to request a paper
proxy form, are set out in the notice of AGM. The AGM is scheduled
to take place at 10.00 a.m. on 28 June 2019 at the Oriental Club,
Stratford House, Stratford Place, London, W1C 1ES. Copies of the
abovementioned documents will be posted next week to
shareholders.
Competent Person's Statement
The technical information contained in this announcement has
been read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM,
FGS), who is a qualified geologist and acts as the Competent Person
under the AIM Rules - Note for Mining and Oil & Gas Companies.
Mr O'Reilly is a Principal consultant working for Mining Analyst
Consulting Ltd which has been retained by Metal Tiger PLC to
provide technical support.
For further information on the Company, visit:
www.metaltigerplc.com:
Enquiries:
Michael McNeilly (Chief Executive Officer) Tel: +44 (0)20 7099 0738
Mark Potter (Chief Investment Officer)
Richard Tulloch Strand Hanson Limited Tel: +44 (0)20 7409 3494
James Dance (Nominated Advisor)
Jack Botros
Nick Emerson SI Capital Limited Tel: +44 (0)1483 413 500
(Joint Broker)
Paul Shackleton Arden Partners plc Tel: +44 (0)20 7614 5900
Steve Douglas (Joint Broker)
Gordon Poole Camarco Tel: +44 (0)20 3757 4980
James Crothers (Financial PR)
Monique Perks
Notes to Editors:
Metal Tiger plc is listed on the London Stock Exchange AIM
Market ("AIM") with the trading code MTR and invests in high
potential mineral projects with a base, precious and strategic
metals focus.
The Company's target is to deliver a high return for
shareholders by investing in significantly undervalued and/or high
potential opportunities in the mineral exploration and development
sector. The Company's key strategic objective is to ensure the
distribution to shareholders of major returns achieved from
disposals. Metal Tiger has two investment divisions: Direct
Equities and Direct Projects.
The Direct Equities division invests in undervalued natural
resource companies listed on AIM, the ASX and the TSX, which
includes its 10.48% interest in MOD Resources Limited ("MOD").
Through the trading of equities and warrants, Metal Tiger seeks to
generate cash for investment in the Direct Projects division.
Metal Tiger's Direct Projects division is focused on the
development of its key project interests in Botswana, Spain and
Thailand. In Botswana, Metal Tiger, through its JV with MOD and its
interest in Kalahari Metals Limited, has a growing interest in the
large and highly prospective Kalahari copper/silver belt. In Spain,
the Company has tungsten and gold interests in the highly
mineralised Extremadura region. In Thailand, Metal Tiger has
interests in two potentially near-production stage lead/zinc/silver
mines as well as licences, applications and critical historical
data covering antimony, copper, gold, lead, zinc and silver
opportunities.
The Company actively assesses new investment opportunities on an
on-going basis and has access to a diverse pipeline of new
opportunities in the natural resources and mining sectors. For
pipeline opportunities deemed sufficiently attractive, Metal Tiger
may invest in the project or entity by buying publicly listed
shares, by financing privately and/or by entering into a joint
venture.
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2018
I am pleased to present the Group's annual report and audited
financial statements for the year ended 31 December 2018.
In July 2018, we were delighted to announce the sale of the
Group's 30% interest in the T3 Copper Project in Botswana, which we
held in a joint venture with MOD Resources Limited ("MOD") of
Australia to MOD. In consideration for the sale of its 30%
interest, Metal Tiger received shares, options and royalty
interests amounting to GBP16.8million and generating a profit of
GBP12.5million. The sale has increased the opportunity for the
Group to invest in other projects, to reduce its cash exposure to
funding the development of the T3 resource whilst continuing to
benefit from the potential upside in those assets as reflected in
our resulting enlarged stake in MOD. The Group retains its
interests in the remaining exploration assets through a new joint
venture company where the Group holds a 30% interest and MOD holds
70%.
The Group also invested GBP859,000 during the year to acquire
34% of Kalahari Metals Limited ("KML") with interests in the
Kalahari Copper Belt in Botswana close to the MOD property. The
acquisition agreement provided for an option to increase this
interest to 50% for a further US$500,000, which was exercised
following the year end.
As reported last year, development of the Group's interests in
Thailand were delayed pending the Thai Government's ratification of
its new Minerals Management Master Plan, which was only effectively
completed in December 2018. We believe there is the potential to
increase significantly the resources at the Boh Yai
lead-zinc-silver mine through a modest exploration drill campaign
and we, in conjunction with our joint venture partner, continue to
determine the optimal path forward.
The drilling programme at our Spanish sites, held via a 50%
interest in Logrosán Minerals in Spain, during 2018 and early 2019,
has provided some exciting results with high grade tungsten and
gold intersections.
The profits made in the sale of the T3 interests have been
offset by a decline in the price of MOD shares during the course of
the year and by a more general reduction in the market price of our
quoted equity portfolio. The decline, across the market, has been
caused by a number of external factors, including but not limited
to, US-China trade tensions and, closer to home, Brexit. With that
said, and in spite of some negative sentiment with regard to the
global economy, demand for copper is anticipated to remain strong
and we would hope to see the price start to recover in 2019.
The Group also incurred a loss on the sale of its equity stake
in Kingsgate Consolidated Limited although the majority of this
loss, as reflected in these financial statements, represents an
unwinding of a gain reported as at 31 December 2017 on marking to
market at that date.
Whilst we have reduced our operating costs during the year, the
overall effect of these gains and losses is to record a loss for
the year, before tax, of GBP3.96million, although it should be
appreciated that this is after recording GBP12.4million of
unrealised losses in our Direct Equities portfolio, which may
reverse during the holding period.
We are continuing to work hard in realising value from the
Group's investments and to make new strategic investments in the
market. Shareholders will appreciate, however, that investments in
early stage mining projects and companies which carry out such
projects are not short term players and may take some years to
realise their full potential.
On corporate governance, shareholders will note that we have
joined the Quoted Company Alliance and we have included in our
Report and Accounts this year a detailed description of our
corporate governance practices and how it aligns with the QCA code.
We have also taken the opportunity this year to introduce on-line
voting for the Annual General Meeting, which will both make it
easier for shareholders to vote and cut down on our use of paper.
Full details of how to vote on-line are given in the notes at end
of the Annual General Meeting Notice which is included with this
Report and Accounts. Shareholders who are unable to take advantage
of on-line voting may still vote by paper and details of how to do
this are also included in the Annual General Meeting notes.
I should like to take this opportunity to thank all our
shareholders, business partners and staff for their continued
support of the Company and look forward to our future together.
Charles HallChairman30 May 2019
CHIEF EXECUTIVE OFFICER'S COMMENTARY
FOR THE YEARED 31 DECEMBER 2018
I am pleased to present the audited results for the year ended
31 December 2018.
Alongside the financial statements and supporting notes, a full
review of business activities during the year is provided within
the Strategic Report.
Given that the results are for the period ended 31 December
2018, they reflect a historical position in terms of the Group's
progress and indeed its financial position. Accordingly, to assist,
therefore, we have included within the Strategic Report further
information on the key events post year end.
This highlights the substantial progress achieved by the Group's
copper/silver investments in Botswana and, in particular, the sale
of its 30% interest in the T3 Copper Project in Botswana to MOD
Resources Limited ("MOD").
This sale represented a shift in direction for the Company in
relation to one of its key Direct Project investments. The Board
was cognisant of the complexities that would have been faced trying
to fund and co-develop the T3 Copper Project. The structure of the
deal set pre-defined terms for MOD to acquire exploration assets
along pre-determined valuation guidelines from Metal Tiger, further
details of which are set out in the Strategic Report.
The first half of 2018 saw renewed enthusiasm for copper, with
prices reaching peak levels in June 2018, followed by a sharp drop
and sustained suppression thereafter. Many pundits have blamed the
US-China trade war for the falls in several commodity prices,
especially copper, and yet this drastic drop seems to be decoupled
from the medium to long term supply demand story, which, in the
Board's opinion, remains very strong. As such, the Board believes
that its opportune repositioning to one which is more likely to be
rewarded by the increased M&A activity that is typical where a
disconnect between short term price and long term forecasts and
supply and demand fundamentals establishes itself.
The Board considers the Kalahari Copper Belt to remain largely
under-explored and believes that the T3 discovery has resulted in a
paradigm shift in terms of exploration which opens up the
possibility that the tonnage required for larger copper producers
may exist in a form in the ground that can be mined economically
and with vast scale. This conviction actively led the Board and its
technical consultants to identify in Kalahari Metals Limited
("KML") an investable operational team with a significant land
package in the Kalahari Copper Belt. In 2018, this investment bore
fruit as the money invested was spent rigorously identifying drill
targets, progressing environmental permissions and strategic
opportunities to double KML's land package in the Kalahari Copper
Belt.
2018 saw some important management changes, with a reduction in
Board size and the transition of Mark Potter from a Non-Executive
Director to Chief Investment Officer. Furthermore, the Company
switched from having a full-time technical director to using
technical consultants on an as-needed basis to assist the existing
technical knowledge of the Board and team at Metal Tiger.
In early 2018, Metal Tiger attempted unsuccessfully to remove
certain members of the board of Kingsgate Consolidated Limited and
subsequently exited its position in the company.
The Board made the tough but necessary decision to cut back
costs and staff in Thailand in 2018 whilst waiting for the
implementation of the new Minerals Act and associated regulations.
The Board believes that the work undertaken by the team in Thailand
has created significant value and looks forward to progressing the
project as the opportunity arises.
In 2018, the Company made several investments with a view to the
future and to generating substantial returns for the Group, which
are set out in the Strategic Report. It is our belief that the
Group has a diverse and varied exposure to several strong
management teams, commodity classes, some excellent geology and a
diverse range of jurisdictions, with the potential for significant
returns from several of the investments. A key challenge of the
Company remains finding suitable Direct Project investments where
it can properly implement its strategy given its relative size and
limited access to finance on suitable terms.
In 2018, we continued to be active in Direct Equities, making a
number of investments over the year, as well as three further
investments post year end. We continue to seek opportunities, be
that through new or further investments or divestments of existing
investments, to create shareholder value. Further details of our
Direct Equities activity are set out in the Strategic Report.
We have continued to make good progress in 2019 across both our
Direct Project and Direct Equities Divisions and further details of
our activities post year end are set out in the "Post Year End
Developments" section of the Strategic Report.
I would like to place on record my thanks to all the team at
Metal Tiger and its advisors who have worked incredibly hard to
bring the Company to its present strong position.
And finally, but most importantly, my thanks to the shareholders
who have continued to support the Company and to those investors
who helped finance the Company. We continue to deliver our
strategic objectives of generating value in the resource sector for
the benefit of Metal Tiger shareholders.
Michael McNeillyChief Executive Officer30 May2019
STRATEGIC REPORT
FOR THE YEARED 31 DECEMBER 2018
RESULTS
The results of the Group for the year ended 31 December 2018 are
set out the Consolidated Statement of Comprehensive Income and show
a loss before taxation for the year ended 31 December 2018 of
GBP3,958,000 (2017: loss GBP347,000).
The net asset value of the Company rose to GBP18,951,000 from
GBP15,443,000 being 1.40p per share from 1.33p per share in 2017 on
a fully diluted basis.
REVIEW OF THE BUSINESS DURING THE YEAR
The Group's operations are carried out within two divisions.
Direct Projects are direct investments into mineral exploration
and development projects either through subsidiaries, associates or
joint venture companies, operated by the Group's in-country
partners who have the requisite knowledge and expertise to advance
projects.
Direct Equities are either strategic investments or part of an
on-market portfolio. Strategic investments are those where Metal
Tiger seeks to influence positively the management of investee
companies to enhance shareholder value. The on-market portfolio
investments in listed mining equities and warrants, with a view to
making capital gains both in the short and long term as a result of
market mispricing or an increase in underlying commodity prices.
The on-market portfolio consists of investments in listed mining
equities and warrants where the Board believes the underlying
investments are attractive. The goal is to make capital gains both
in the short and long term as a result of market mis-pricing or an
increase in underlying commodity prices.
The following sections of the review cover the operations of
both divisions during the year, the Group's general investment
policy and central operations including administrative costs and
working capital.
Direct Projects
BOTSWANA
Joint venture operations with MOD Resources Limited
Having announced binding terms in July 2018, in November 2018,
Metal Tiger completed a transaction with its 70% joint venture
partner and operator, ASX-listed MOD Resources Limited ("MOD") to
sell its 30% interest in the T3 Copper Project (circa 24km2 within
prospecting licence PL190) for 17,090,000 MOD shares and unquoted
options to receive a further 40,673,566 new ordinary shares for nil
consideration, exercisable under certain conditions for a total
value equivalent to GBP15.57million as at the date of the deal. In
addition, Metal Tiger obtained a US$2million capped net smelter
royalty over the T3 Project as part of the transaction.
Furthermore, Metal Tiger and MOD established a new exploration
joint venture company, Metal Capital Exploration Limited ("Metal
Capital Exploration"), held 30% by Metal Tiger and 70% by MOD, and
operated by Metal Capital Exploration's wholly owned subsidiary
Tshukudu Exploration Botswana (Pty) Limited ("Tshukudu
Exploration").
Metal Tiger is restricted from holding more than 12.5% of MOD's
issued share capital until 16 November 2021 ("Prohibited Voting
Restriction").
Following completion of the transaction, Metal Tiger's direct
interest in MOD, consisting of the shares and options, falls within
Direct Equities, whilst the new joint venture remains within Direct
Projects.
Metal Tiger granted MOD contractual rights over the new joint
venture company, exercisable under certain conditions, including
the rights (subject to any requisite shareholder and regulatory
approvals/waivers) to purchase:
-- 100% of further discoveries on Prospecting Licences held by Tshukudu
Exploration, which progress to an announced scoping study
(the
"Mineral Resource Option");
-- Metal Tiger's 30% interest in Tshukudu Exploration as a one-time
election on the third anniversary of the transaction (the "JV
Roll-up
Option"); and
-- Metal Tiger's 30% interest in Tshukudu Exploration in the event of a
board endorsed change of control of MOD (the "JV
Consolidation
Option").
Mineral Resource Option
MOD has a right to purchase any asset held by Tshukudu
Exploration that is the subject of a scoping study announced to the
ASX. MOD may exercise the option by paying cash, issuing ordinary
shares or cashless options or any combination of cash, shares and
cashless options at MOD's election and subject to any applicable
laws (including the ASX and LSE Listing Rules). The contract
includes provisions to ensure that appropriate waivers are made
should MOD's choice of consideration place Metal Tiger in a
position where it would breach Metal Tiger's Prohibited Voting
Restriction. The consideration to be paid on such exercise of the
Mineral Resource Option is to be calculated according to the
relative proportion of MOD's enterprise value that independent
brokers attribute to the value of the asset, the subject of the
Mineral Resource Option at the time of exercise, multiplied by
MOD's actual trading enterprise value based on its 20-day VWAP and
applied to Metal Tiger's percentage ownership in the asset. All
Mineral Resource Options will lapse following a bidder acquiring at
least 51% of MOD pursuant to a change of control offer to acquire
100% of MOD.
Each Mineral Resource Option may be exercised by MOD at any time
between 60 and 150 days following the announcement of the results
of the scoping study. A Mineral Resource Option not exercised
within this time period will lapse but will not affect the
Company's right to exercise a future Mineral Resource Option
arising from:
-- a different scoping study; or
-- a materially revised scoping study based on the same exploration
asset, as defined, always provided that there shall be a maximum
of
two relevant scoping study results announcements for the same
asset.
JV Roll-up Option
For the three years following completion of the sale of T3 and
the establishment of the new JV, (for a period of 90 days), MOD has
a one-off right to acquire Metal Tiger's 30% interest in Tshukudu
Exploration (held via Metal Capital Exploration). MOD may exercise
this option by paying cash, issuing ordinary shares, cashless
options or any combination of cash, shares and cashless options at
MOD's election and subject to any applicable laws (including ASX
and LSE Listing Rules). The consideration to be paid by MOD on
exercise of the JV Roll-Up Option will be calculated based on the
relative proportion of MOD's enterprise value that independent
brokers attribute to the value of Tshukudu Exploration at the time
of exercise multiplied by MOD's trading enterprise value based on
its 20-day VWAP and applied to Metal Tiger's percentage ownership
in the asset. Metal Tiger will receive a 2% net smelter return
royalty in respect of any future production from the assets of
Tshukudu Exploration (excluding those assets already acquired under
a Mineral Resource Option). The JV Roll-up Option will lapse
following a bidder acquiring at least 51% of MOD pursuant to a
change of control offer to acquire 100% of MOD.
JV Consolidation Option
In the event of any MOD board-recommended change of control
offer to acquire 100% of the shares of MOD, then MOD will have a
right to acquire Metal Tiger's 30% stake in Tshukudu Exploration at
any time prior to the bidder acquiring 51% of MOD pursuant to the
change of control. If the change of control event fails to
complete, the completion of the JV Consolidation Option will not
occur but the JV Consolidation Option will not be extinguished for
any future change of control events. Consideration on exercise can
only be paid in cash. Consideration will be calculated according to
the relative proportion of MOD's enterprise value that independent
brokers attribute to the value of Tshukudu Exploration at the time
of exercise multiplied by the implied enterprise value of the
change of control offer and applied to Metal Tiger's percentage
ownership in the asset. Metal Tiger will also receive a 2% net
smelter royalty in respect of any future production from the assets
which are the subject of the JV Consolidation Option (excluding
those assets already acquired under a Mineral Resource Option).
Unquoted MOD Options
The unquoted options have:
-- no voting or dividend rights until they are converted into ordinary
shares;
-- may be exercised at any time following completion for nil
consideration provided that it will not cause the Company to
have
voting power in excess of 12.5% of the issued ordinary shares in
MOD
upon issue of the resulting ordinary shares;
-- may not be exercised unless the number of ordinary shares to be issued
to the Company upon exercise would be at least 2% of the
issued
ordinary shares, provided that if the Company only holds
unquoted
options which are capable of exercise into less than 2% of
MOD's
issued ordinary shares, such restriction will not apply; and
-- have an expiry date which is three years from the date of completion,
being 16 November 2021.
Operation of New Exploration Joint Venture
The New Joint Venture is governed by a shareholders' agreement
entered into between MOD and the Company in respect oftheir
shareholdings in Metal Capital Exploration and Metal Capital
Exploration's 100% interest in Tshukudu Exploration, incorporating
the following key terms:
a) the board of Metal Capital Exploration comprises two
directors nominated by MOD and one nominated by Metal Tiger;
and:
i) if the Company's shareholding in Metal Capital Exploration is
reduced to 10% or less then the Company shall not be entitled to
nominate any directors (and its representatives on the board shall
immediately resign as directors of Metal Capital Exploration);
ii) if the Company's shareholding in Metal Capital Exploration
is reduced to 30% or less then the Company shall only be entitled
to nominate one director (and any other of its directors on the
board shall immediately resign as directors of Metal Capital
Exploration); and
iii) if the Company's shareholding in Metal Capital Exploration
is reduced to 10% or less then the Company shall not be entitled to
nominate any Metal Capital Exploration directors (and its
representatives on the board shall immediately resign as directors
of Metal Capital Exploration);
b) MOD is the manager of all operations and activities
pertaining to the exploration assets;
c) all funding required will be by way of equity contributions
and/or shareholders' loans and contributed to pro rata by MOD and
Metal Tiger in accordance with their shareholding in Metal Capital
Exploration, with:
i) a standard dilution formula for a non-contributing party to
apply until any right granted in respect of the exploration assets
has lapsed; and
ii) following the lapse of any right granted in respect of the
exploration assets, the dilution for a non-contributing party shall
be determined by two experts based on the value of the assets of
the joint venture;
d) if Metal Tiger's or MOD's shareholding in Metal Capital
Exploration is diluted to less than 10% then Metal Tiger or MOD, as
the case may be, must transfer their shares in Metal Capital
Exploration to the non-diluting shareholders (on a pro-rata basis)
in consideration for the grant by Metal Capital Exploration of a 2%
NSR royalty in favour of the diluting Metal Capital Exploration
shareholder; and
e) the sale or transfer of a shareholder's shares in Metal
Capital Exploration is subject to customary pre-emptive rights and
drag and tag rights.
The Company has appointed Michael McNeilly as its MOD board
representative, and maintains the right to an MOD board
representative provided that the Group owns at least a 10% interest
in MOD (including shares and MOD options).
The Company has committed to support MOD Board recommendations
until November 2021, with certain restrictions also having been
placed on the Company's ability to sell MOD shares. The lock up on
Metal Tiger's 17,090,000 MOD shares no longer applies from 16
November 2019.
The Company is restricted from holding over 12.5% of MOD's
issued share capital until 16 November 2021, except that waivers
will be made should MOD's choice of consideration on the exercise
of Mineral Resource Option cause a breach of this restriction.
Strategically, the transaction placed the Group with an
effective 47% interest in the new exploration JV, whilst removing
the requirement to fund the T3 Copper Project.
The Definitive Feasibility Study ("DFS") for the T3 Copper
Project was completed and announced by MOD Resources at the end of
March 2019. Further details of this are given in the review of post
year end developments later in this report. Upon completion,
results of the T3 infill programme will be incorporated into an
updated resource model during the third quarter of 2019, when MOD
expects to upgrade a significant proportion of production within
the first two stages of the open pit into the higher confidence
JORC compliant Measured Resource category. This may result in
upgrading part of the current Probable Ore Reserve to the Proved
Ore Reserve category.
Regional Exploration (Metal Tiger 30%)
The Kalahari Copper Belt is one of seven sediment hosted copper
belts that have demonstrated potential to host deposits with over
2,000,000 tonnes of contained copper.
During the last quarter of 2018, the Minister for the Department
of Mineral Resources, Green Technology and Energy Security renewed
18 key licences for a minimum of two years and transferred these
licences from Tshukudu Metals Botswana (Pty) Ltd to Tshukudu
Exploration.
Tshukudu Exploration's extensive landholding in the Kalahari
Copper Belt includes several regional soil and Airborne
Electromagnetic ("AEM") anomalies that occur scattered within a
zone extending over >140km along the Central Structural
Corridor. This includes the 50km long T3 Dome hosting the T3
deposit and the interpreted 60km long anomalous soil zone within
the T20 Dome. This land package increased in 2018 when Tshukudu
Metals Botswana (Pty) Ltd, acquired a 100% interest in two
exploration licences PL126/2013 and PL127/2013 over the centre of
T20 Dome.
In Q2 2018 and Q3 2018, Tshukudu Exploration received
long-awaited Environmental Management Permits, which provide the
necessary permission to commence drill testing, for 680km2 around
T3 and for 700km2 at the T20 "dome complex", respectively. Since
then, the company drilled three regional targets (A4, A1, T23)
within trucking distance of a nearby processing plant and
encountered significant copper (plus silver) mineralisation in all
three, hitting 52m at 1.5% Cu in A4, 130m at 0.52% Cu in A1, and
25m at 0.36% Cu in T23 (Figure 1). Economic tonnages and grades
have yet to be demonstrated, however the technical success rate is
considered to be impressive, especially as numerous similar targets
remain to be tested.
During 2018, the joint venture completed exploration activities
on selected targets within two well defined areas, the T3 Expansion
Project and the T20 Exploration Project. At the T3 Expansion
Project the priority targets drilled during 2018 were at the A4
Dome and the A1 Dome. Minor drilling was completed within the T20
Exploration Project area.
The A4 Dome is located 8km from the T3 Copper Project, with 20
holes having been drilled in 2018. It remains a high priority
target with 18 of the completed holes being successful in
identifying both vein hosted and Ngwako Pan Formation ("NPF")
contact mineralisation. It is believed by the joint venture that
the A4 Dome could represent future underground mine potential as
feed for the T3 Copper Project. Therefore, viewed in the context of
the Company's deal with MOD, the A4 Dome represents a highly
strategic project for drilling.
The A1 Dome is located 22km to the northeast of the T3 Copper
Project. In 2018, six widely spaced holes were drilled,
intersecting copper and NPF contact mineralisation with one drill
hole intersecting 52m at 0.61% Cu from 624m and included two
individual assays of 3.66% Cu and 4.29% Cu on the NPF contact from
673m down-hole.
T20 Exploration Area
The T20 Exploration Area, located approximately 100km west of
the T3 Dome and interpreted to occur within the same structural
corridor, remains a high priority for future drilling. T20 Dome
includes multiple copper and zinc soil anomalies, several with
similar or higher values to those associated with the original T3
discovery. More than 80,000 soil samples were taken across the T20
Exploration Area, identifying multiple copper and zinc anomalies
displaying similar or higher values to those associated with the
original T3 discovery. These samples occur in a 60km long zone
extending from the T20 Dome to the T4 Copper Prospect. These
results were announced on 25 January 2018.
The T20 Exploration Area is interpreted to be underlain by
shallow dipping sediments including the prospective D'Kar Formation
("D'Kar") and NPF contact. This contact hosts high grade,
structurally related, copper deposits in the eastern part of the
Kalahari Copper Belt. The combined strike length of the zone that
hosts the T20 soil anomalies and the T3 AEM anomalies is
interpreted to extend >140km.
A surface calcrete layer covers large areas of the T20 Area and
there is no known previous exploration drilling apart from at the
adjacent T4 Copper Prospect. From experience gained at T3, it
appears that zinc is more mobile than copper in the weathering
profile and may be detected above the calcrete layer more readily
than copper. The peak soil value that led to the discovery of T3 at
shallow depth below calcrete was 28ppm Cu, with 27ppm Zn.
During 2018, the joint venture drilled three holes within the
T23 Dome, a priority target within the T20 Exploration Area, at
600m sections to test the potential of the prospective NPF contact
interpreted from AEM to occur at shallow depth. Drill results
intersected disseminated copper mineralisation supporting the
potential of the structural corridor to host further copper
mineralisation.
Kalahari Metals Limited
On 6 June 2018, Metal Tiger announced that it had entered into
an investment agreement to acquire up to 50% of Botswanan focused
explorer, Kalahari Metals Limited ("KML"). At the time of the
investment, KML owned 100% of two licences in the Kalahari Copper
Belt situated along strike of Cupric Canyon Capital's (exploration)
projects (circa 50km) and our joint venture projects with MOD
covering 1,996km2. In addition, KML had a binding earn-in agreement
with Triprop Holdings (Pty) Limited ("Triprop") in relation to five
exploration licences covering a combined area of 2,067km2. KML has
a right to earn up to 80% of Triprop and has the right to purchase
the remaining 20% of Triprop at an independent valuation. As part
of the Stage 1 Earn-in with Triprop, KML was entitled to earn 51%
of Triprop (through Triprop issuing new shares to KML) if KML
completed US$600,000 of spend in respect of agreed work programmes
and budgets by 25 May 2019. As noted in the "Post Year End
Developments", the Stage 1 Earn-in requirement has been met and
Triprop has exercised its rights to acquire this interest since the
year end.
The initial acquisition resulted in Metal Tiger investing
US$600,000 and issuing 1,188,118 new shares in Metal Tiger to the
shareholders of Triprop for 18% of the shares in KML previously
held by Triprop.
Details of Exploration Licences in the KML Joint Venture
Licence ID Holder KML Earn-in Valid for Valid from Valid to Duration(years) Licence Area(km") Work Area Block
PL148/2017 KML 100% Prospect Metals 1/7/2017 30/6/2020 3 998 Eastern
PL149/2017 KML 100% 1/7/2017 30/6/2020 3 998
Sub-total: 1,996
PL035/2012 Triprop 100% Base Metal, Precious Metals & PGMs 1/4/2018 31/3/2020 2 756 Western
PL036/2012 Triprop 100% 1/1/2018 31/12/2019 2 252
PL041/2012 Triprop 100% 1/4/2018 31/3/2020 2 103 Eastern
PL042/2012 Triprop 100% 1/4/2018 31/3/2020 2 483
PL043/2012 Triprop 100% 1/4/2018 31/3/2020 2 473
Sub-total: 2,067
Total Area 4,063
In July 2018, KML commenced its Phase 1 exploration programme
for Cu-Ag mineralisation. New Resolution Geophysics was contracted
to conduct airborne high resolution heliborne magnetic and
electromagnetic surveys ("AEM") on the prospective Okavango Copper
Project ("OCP") and Ngami Copper Project ("NCP"). The surveys
covered a total of 16,700 line-km of magnetics and 1,982 line-km of
AEM. This phase of work was followed up with an additional 1,830
line-km of high resolution magnetics and 1,830 line-km of detailed
AEM completed in December 2018.
Airborne geophysical data has been successfully used in the
Kalahari Copper Belt for targeting the basin wide NPF/D'Kar
contact, the basin-wide REDOX change from oxidised below to reduced
above, near where copper sulphides potentially precipitate. The
NPF/D'Kar contact undulates, along a NE-SW axis, implying NW-SE
compression and folding (orientation of the Pan African orogeny).
In addition, it can be inferred that a NW-SE compression has also
occurred, resulting in a classic 'dome and basin' fold interference
pattern. The superposition of these two approximately perpendicular
folding events produces domes that are ideal basinal fluid traps.
Magnetic data provide a means for mapping the contact due to the
magnetic susceptibility contrast between D'Kar and underlying,
weakly magnetic, NPF. Marker conductors in the lower D'Kar can be
mapped in 3D using a combination of inversion methods applied to
AEM data.
High resolution magnetic surveys were carried out at a 75m line
spacing, providing the necessary detail to map subtle structure,
NNW trending Karoo dyke swarms, estimate cover thickness and,
importantly, distinguish between magnetic units in the lower D'Kar
and weakly magnetic NPF ultimately providing a detailed
lithostructural map of the geology under Kalahari Group cover.
AEM surveys were flown in two parts. Initially, licence wide
regional surveys were completed at 2km or 4km spacing to estimate
Kalahari cover thickness and to exclude regions where perched
saline water or conductive cover may limit the effectiveness of the
method before embarking on detailed surveys. Detailed 400m surveys
were then flown over priority areas in both the OCP and NCP.
Processing of AEM data included layered earth inversions which
proved highly successful in mapping out folded targets where lower
D'Kar stratigraphy is preserved, providing potential trapsites for
mineralisation. In addition, weak conductors associated with the
lower D'Kar contact were effectively mapped from known deposits
(Zones 5 and 5N) into the OCP licence area. Results from the AEM
surveys have been used to generate drill targets on both the OCP
and NCP.
On 31 October 2018, the Company elected to invest a further
US$500,000 bringing the Group's holding up to 34% (from 18%) and
agreed a second phase of exploration.
The board of KML was initially of the opinion that it would have
been in a position, following Metal Tiger's investment, to test
drill new copper targets at the end of Q1 2019. This has been
delayed later into 2019.
Furthermore, Loci Environmental (PTY) Ltd, a Botswanan-based
environmental consultancy, was engaged to prepare and obtain
environmental permitting over both projects.
On 30 November 2018, KML signed an Earn-in Agreement with
Resource Exploration and Development Ltd ("RED") to acquire an
interest in five recently granted exploration licences (Figure 2),
with a total area of 4,661km2. Since the year end, KML has entered
into a binding agreement with RED to acquire 100% of Kitlanya (Pty)
Ltd (its 100% subsidiary) and has executed a conditional Share
Purchase Agreement which terminates the Earn-in Agreement and
allows for KML to purchase Kitlanya (Pty) Ltd for US$700,000 to be
satisfied by the issue of shares representing approximately 13.4%
of KML as enlarged by the acquisition. Post completion, the
transaction will value KML at US$5,200,000. The acquisition is
conditional on approval of the change of control of Kitlanya being
granted by the authorities in Botswana and receipt of an updated
letter of good standing for the licences.
Work completed over the Kitlanya ground includes a compilation
of historical exploration data, reprocessing and interpretation of
available geophysical data, and a short soil sampling programme
totalling 3,240 samples. Results highlight the potential for
further 'dome' targets on this licence package.
THAILAND
The new Minerals Act in Thailand came into effect in August
2017, but certain provisions of the Act required interpretation and
implementation. Core among these were the determination of Mineral
Deposit Areas ("MDAs") within which mining leases can be granted,
the creation of a five year Minerals Management Master Plan, the
appointment of members to the National Board of Mineral Resource
Policy and Administration ("NBMRPA"), and the making of downstream
bureaucratic changes at the various agencies affected. The Master
Plan confirming that the mining lease applications for the Thai
lead-zinc-silver mines ("Kemco") are considered MDAs was ratified
by the Thai Cabinet early in 2018 but the entire implementation
process, allowing for the resumption of licence and lease
application processing, was only completed in December 2018.
Evidence of bureaucratic functionality in this context became
apparent at the first monthly meeting of the NBMRPA in January
2019, with the granting of highest priority applications first.
In order to minimise costs at the Bangkok office during this
period of government inactivity and uncertainty, field exploration
programmes, environmental work at the Kemco site and engagement
with third parties for studies necessary for the advancement of
mining lease applications were put on hold. Staff was reduced and
technical activities were limited to those that could be conducted
at the desktop level with data already accumulated or readily
available. These activities included:
-- creation of detailed drilling plans aimed at increasing the resource
at the Boh Yai mine at various budget levels and for alternate
land
access scenarios using 3D modelled grade shells for the
existing
resource, structural interpretations and historical drill core
data
coverage;
-- modelling of temporal historical Kemco production from ore extraction
to concentrate production incorporating tonnes, grades,
recoveries,
reagent consumption and energy usage for analysis of
variations
according to ore type/location and concentrate type
produced;
-- spatial trend and correlation analyses for geological features
identified from historical drill core logs and interpretive
cross
sections;
-- creation of comprehensive Thailand-wide exploration plans to act as
the basis for potential future exploration programmes in
Thailand
unrelated to the Kemco project; and
-- performance of due diligence assessments of geological datasets and
economic models for several exploration projects in Thailand, in
the
gold and tin spaces.
The Company is very confident about the potential to increase
significantly the resource at the Boh Yai mine through a modest
drill campaign targeting modelled ore extensions and gaps in the
data (Figure 3).The joint venture partner is currently exploring
legal options which allow the implementation of exploration plans
at Boh Yai before formally restarting the mining licence
application process for which the next step will be holding public
hearings. The Board is in active discussions with our joint venture
partner about renegotiating the joint venture agreement terms and
the Company will update the market in due course should these
discussions bear fruit. At the same time, Metal Tiger Thailand is
exploring downstream processing options which could potentially
have a positive impact on the economics of the project.
SPAIN
Logrosán Minerals Limited ("LML" or "Logrosán Minerals") is the
joint venture operating company for the Logrosán Exploration
Project ("Logrosán Project") and Maria Gold & Antimony Project
("Maria Project"). It is held 50/50 by Metal Tiger and its joint
venture partner, Mineral Exploration Network (Finland) Ltd ("MEN"),
and has four exploration concessions and two exploration licence
applications held through LML's wholly-owned Spanish subsidiary
Logrosán Minera S.L. as set out in the table below. The licences
cover all Group C minerals including Au, Ag, Pb, Sn, W, Pt and
Cu.
Licences held by Logrosán Minera S.L.
Asset Status Licence Expiry Licence Area Comments
Date (km2)
Antonio Caño Exploration 6 December 37.22 Renewable
Exploration 2019 three
Licence (#10C times
10314-00) to maximum
of nine
years
from
2/12/2013.
Zorita Exploration 18 June 2021 85.08 Renewable
Exploration to
Licence maximum
(#10C nine
10332-00) years from
18/06/2015
San Cristóbal Exploration 16 June 2019 43.81 Renewable
(#10C to
10321-00) maximum
nine
years from
10/6/2016
"Maria Exploration 14 November 40.09 Renewable
Project"Mari 2019 to
Hernández maximum
Permit nine
(#10313-00) years from
31/10/2013
San Cristóbal Exploration 10 April 2022 28.11 Renewable
Sur to
(#10358-00) maximum
nine
years from
10/04/2019
Logrosán Norte Exploration n/a 30.72 Exploration
(#10C10367-00) Licence Licence
Application Application
stamped
11/9/2017
Metal Tiger announced that it had completed the proposed
EUR500,000 of exploration funding into the Logrosán Project on 15
March 2016, to earn the 50% holding in LML. On 31 May 2016, Metal
Tiger announced it had concluded negotiations to include the Maria
Gold and Antimony Project ("Maria" or "Maria Project") licence
(40.09km2) into the Logrosán Minerals JV. Maria is located
approximately 15km north of the Logrosán Project.
During the 18 months prior to the joint venture commencing,
Metal Tiger's joint venture partner, MEN, had carried out more than
40,000 soil samples, hundreds of pan-concentrate samples, covered
thousands of linear kilometres with ground magnetic survey and
assessed electro-magnetic tomography. The presence of tungsten
mineralisation had been confirmed by soil sampling, outcrop
sampling, trenching and historical drill holes. Gold mineralisation
had been indicated by pan-concentrate sampling which delineated
three areas with anomalous gold.
Prior to concluding the Maria deal, Metal Tiger's due diligence
Rotary Air Blast ("RAB") drilling had indicated that the area has
high prospectivity for antimony-gold style mineralisation; six RAB
drill holes had returned intersections between 1g/t Au and 3.94g/t
Au and nine drill holes with antimony intersections >1% Sb (with
grades up to 2.6% Sb and the largest Sb intersection 4m at 1.2%
Sb).
Under the Maria deal, Metal Tiger provided EUR500,000 over the
balance of 2016 and first quarter of 2017 in exploration
expenditure, split over the Maria and Logrosán Project areas.
On 19 July 2016, Metal Tiger announced that the San Cristóbal
Exploration Licence (43.81km2) certificate had been received.
Between 24 April 2015 and 12 November 2016, the joint venture
drilled 384 RAB drill holes totalling 6,879m to an average depth of
17.9m and analysed over 2,500 drill samples, spread across the
licence holdings. The drilling had the purpose of confirming the
presence and indicative scale of sub-surface mineralisation
intersections only, and not for the purposes of Resource
definition, but as a minimal environmental impact alternative to
deep trenching. The drill holes were arranged on profiles set
across the soil geochemistry and ground magnetic anomalies with the
azimuth of each drill hole perpendicular to the perceived
mineralised trend.
During the 2017 spring season, work focused on the delineation
of gold anomalies at the Logrosán licence group. With the shallow
RAB drilling on hold, the field programme concentrated on soil
sample gold analysis, with infill soil sampling and mapping to
laterally delineate the existing gold anomalies as part of target
generation for a potential deep drill programme planning and
costing. A total of 7,345 samples were assayed for gold comprising
the infill soil samples and analysis of XRF sample pulps from
samples not previously analysed for gold.
This infill sampling helped to delineate a new regional scale
gold anomaly and a new tungsten anomaly at Logrosán East. The
infill soil sampling and gold analysis effectively joined El
Seranillo North and El Seranillo East into a single, 5km long gold
anomaly. The new tungsten anomaly has been named "W Target 3", it
measures 2.3km long and 0.9km wide, with up to 466ppm W in the
soil, and is located 3km NE and along strike from the La Dehesa
Target deposit which was RAB drilled during 2015.
It is noteworthy that a large scale, 19km long, arsenic anomaly
coincides with a regional magnetic structure linking Logrosán South
in the southwest of the Project area to the north of Logrosán East,
in the northeast of the Project area passing through both the
existing La Dehesa Target and the new W Target 3.
Field operations during the autumn of 2017 consisted of infill
soil sampling in the north of Logrosán East (3,117 samples) and
systematic sampling from road cuttings across this anomaly (total
of 780m sampled at 5m intervals).
In the autumn of 2018, work at the Logrosán Project focused on
planning a Reconnaissance Drilling Programme with the objective to
show whether mineralisation continues to depth ahead of deciding
next steps. No further work was conducted at the Maria Project in
2018.
The Reconnaissance Drilling Programme commenced in December
2018, before the Christmas break, completing in February 2019. The
programme comprised 12 diamond drill ("DD") holes, for a total
2,283m, drilled with the objective of determining the potential
extent and tenor of mineralisation at depth within an initial four
broad mineralised targets qualified at near surface depths by
geochemistry, geophysics, trenching and the previous RAB drilling.
Two of these four targets were selected for gold, one target for
gold and tungsten and one target for tungsten. Individual DD holes
varied between 30m-300m in depth, with an average of 190m and
between 40-50 degrees inclination. The programme utilised a single
Geomachine Oy GM-200 diamond core drilling rig with a Finnish WL-56
size drilling bit to produce a 39mm diameter core. Core was
geologically logged and photographed in detail. As this was a
reconnaissance drilling programme, core sample intervals were
submitted to accredited ALS Laboratory ("ALS") in Seville as whole
core. Pulps from selected high grade samples were re-analysed and
ALS ran their own internal QA/QC. Results received since the year
end have been encouraging and further details are given in "Post
Year End Developments" below.
Reconnaissance Diamond Drill Programme Results
The objective of the Reconnaissance Drill Programme was to show
mineralisation continues to depth at four of eight specific target
areas ahead of deciding next steps for the Logrosán Project.
Details of the various target areas were originally announced 27
June 2017.
The four broad targets, selected on the basis of existing work
permits, were:
Logrosán East Targets (gold) consisting of a 5km long, 50m-80m
wide gold anomaly (formerly El Seranillo North and El Seranillo
East). The current diamond drilling has tested the anomaly at two
points (El Serranillo North and El Serranillo East - approximately
2.5km separation) below prospective results in surface trenches (up
to 1.88g/t Au and 7.16g/t Au).
In the El Serranillo North target area a total of 22 chip
samples had previously confirmed anomalous gold background over an
area of 0.3km2 ranging up to a maximum of 4.45g/t Au. Two deep
holes (LDD001 and LDD002) targeted the southern limb of this
anomaly with a single 1m intersection above 1g/t Au, but with four
separate 3m-4m wide zones averaging 0.06g/t Au that could possibly
vector to higher mineralisation in the vicinity.
At the El Serranillo East target a single drill hole LDD009
intersected 1m at 96.2g/t Au in a 1.5m wide vuggy, oxidised,
quartz-carbonate vein, which also contained traces of the copper
oxide malachite. Previous soil sampling in this area also
delineated anomalous copper (Au-Cu-As soil association).
On a regional scale the Logrosán East anomaly also marks the
eastern most edge of a strontium depletion front emanating from the
San Cristobal intrusion.
Logrosán East Targets (for gold) key intersections:
-- Hole LDD009 (El Serranillo South)
1m at 96.2g/t Au from 54m
-- Hole LDD002 (El Serranillo North)
1m at 1.65g/t Au from 200m
Zorita Target (previously called W Target 1 / Logrosán South RAB
target) is a 1.2km long by 200m wide soil tungsten anomaly.
Previous RAB drilling, 17 holes (268m), on two profiles drilled
perpendicular to the tungsten anomaly strike at a 380m separation
confirmed near surface high-grade tungsten mineralisation in the
north and the centre of the target. The anomaly remains open
(untested by drilling) for 700m to the south and for 120m to the
north.
The diamond drilling (totalling three holes) has shown the high
grade tungsten mineralisation continues to at least 44m down-hole
depth (hole LDD011), with narrow high grade gold mineralisation
intersected (hole LDD012) beneath the Logrosán South arsenic soil
anomaly to the east of the tungsten anomaly.
Zorita Target (for gold and tungsten) key intersections:
-- Hole LDD011
3m at 0.35% WO3 from 44m including:
2m at 0.45% WO3 and 0.01% SnO2 from 45m
-- Hole LDD012
1m at 23.2g/t Au from 191m
1m at 9.73g/t Au from 237m
La Dehesa Target (previously called W Target 2) consists of a
700m long by up to 150m wide soil anomaly orientated NE-SW. It
coincides with a 1.6km long geophysical structure and three further
weaker anomalies associated with parallel structures.
Previous RAB drilling, 65 holes with average 20m depth (1,300m
in total), returned 8m at WO3 0.32% near surface.
The diamond drilling, totalling six holes between 30m-300m
depth, has shown that the high grade tungsten mineralisation has
the potential to extend from surface to at least 99m down-hole
depth (hole LDD004), possibly past 262m down-hole depth (hole
LDD007). Intersections from four diamond holes show significant
potential to build out a deposit over at least 400m strike
length.
La Dehesa Target (for tungsten) key intersections:
-- Hole LDD004
6m at 0.29% WO3 and 0.05% SnO2 from 61m
including:
1m at 0.52% WO3 & 0.08% SnO2 from
61m and
2m at 0.51% WO3 and 0.06% SnO2 from 65m
3m at 0.30% WO3 and 0.05% SnO2 from 85m
4m at 0.38% WO3 and 0.07% SnO2 from 95m
including:
2m at 0.64% WO3 and 0.07% SnO2 from 97m
-- Hole LDD007
1m at 0.40% WO3 and 0.04% SnO2 from 249m
3m at 0.42% WO3 and 0.05% SnO2 from 259m
Location and Region
The Logrosán Project and Maria Project areas are located
approximately three hours' drive west of Madrid, in a geologically
prospective, under-explored and mining-friendly jurisdiction in
west-central Spain within the province of Cáceres in the
Extremadura autonomous region. The projects are served by a
well-developed and maintained road network, with good power, water
and telecommunications infrastructure and enjoys the full support
of the regional and local government and administration.
Neighbouring Properties
There are two publicly listed exploration and pre-production
development companies located within the surrounding region. W
Resources Plc's La Parrilla tungsten mine (49Mt at 0.1% WO3) and
mill which is currently under development, is 43km southwest of the
project areas and Berkeley Energia's Gambuta uranium deposit is
30km north.
Summary
Work during 2018 and Q1 2019 centred on a short Reconnaissance
Drilling Programme designed to support a decision on further work
at the Logrosán tungsten and gold project. The work was conducted
in a cost-effective manner, utilising spare drill rig capacity and
with direct staffing by our joint venture partner, MEN.
Metal Tiger believes that the drill findings have added
significantly to the value of the project with five high grade
tungsten intersections averaging 3m at 0.3% WO3, plus associated
tin credits, confirmed at depth. As a comparison, commercial
tungsten deposits typically grade from 0.1% WO3.
Drilling also yielded three high grade, one metre wide, gold
intersections (ranging between 9.7g/t and 96.2g/t Au), across two
separate targets which have delineated subsurface gold for the
first time in the Logrosán area.
Metal Tiger will be considering the next steps for the project
with its JV partner and will provide further updates during the
course of 2019.
Direct Equities
During the period 1 January to 31 December 2018, the Direct
Equities Division increased its net assets to GBP12,241,000 from
GBP9,345,000 but reported a loss of GBP12,946,000 before finance
and administrative costs, primarily driven by unrealised losses
relating to its listed equity investments in MOD Resources Limited
and Thor Mining plc. The unrealised losses were the result of
deteriorating macro-economic conditions for metals markets
primarily the result of the US-China trade war and a general lack
of investor interest in small cap mining companies.
The Direct Equities Division continues to invest in high
potential mining exploration and development companies during these
difficult market conditions for junior miners. The focus is to
invest in mining companies that are significantly undervalued by
the market and where there is substantial upside potential through
exploration success and/or development of a mining project towards
commercial production.
Equity investments are generally comprised of companies that are
at exploration, pre-feasibility and definitive feasibility study
stage. No mining companies in the investment portfolio are
currently at production stage. The portfolio is therefore
considered high risk as the future value of investments is often
dependent on financing and/or exploration success.
Key events during 2018
The division acquired a significant interest in MOD shares
during the year as a result of the sale of the MOD T3 interests
outlined above. During the period from 18 July 2018 to 31 December
2018 the MOD share price declined from A$0.48 to A$0.25, a decline
of approximately 48%, which has had a significant impact on the
value of Metal Tiger's investment in MOD, reducing the value of the
listed equity stake by GBP7,597,000 and offsetting the gain of
GBP12,530,000 recorded on sale.
Six non-core minority equity investments were partially or
completely exited in 2018 raising gross proceeds of GBP4million.
The majority of disposal proceeds related to the sale of an
activist minority investment in ASX-listed Kingsgate Consolidated
Limited in January 2018, which realised gross proceeds of
GBP3,504,000 and realised a gross loss of GBP168,000 on original
investment cost. A reported loss of GBP1,136,000 has been recorded
in the 2018 results from the Kingsgate disposal reflecting the
unwinding of the gain against market value of GBP830,000 in 2017
recorded at 31 December 2017 and the loss on sale, plus associated
costs, of GBP306,000 in 2018.
Along with the acquisition of additional stock in MOD, three new
listed minority equity investments were made in 2018 at a total
investment cost of GBP503,000. Two new minority private equity
investments were made in 2018 at a total investment cost of
GBP562,000. In addition, an investment of US$150,000, shown in the
financial statements as a non-current investment within the
division, was made to acquire a 10% interest in Sita Capital
Partners LLP, a UK based investment advisor that is seeking to
raise a private equity fund to invest in mining companies. Metal
Tiger has been granted beneficial co-investment rights.
Outlook
The majority of Metal Tiger's investment portfolio is invested
in MOD Resources Limited. MOD completed a definitive feasibility
study on the T3 Copper Project at the end of March 2019 and is
currently considering all strategic and financing options in order
to advance the project to commercial production.
Metal Tiger also has a number of Direct Equity Division
investments in early stage, exploration-focused mining companies.
These investments are higher risk and may result in substantial
gains or a significant loss of value. Many of these companies are
actively pursuing exploration drilling campaigns and we look
forward to reporting significant results during the course of
2019.
Summary of listed investments held at 31 December 2018
Investment Listing Description No. Value at
of securities year end GBP
held
MOD Resources LSE/ASX T3 Copper Project 31,064,220 4,288,000
Limited and exploration ordinary 5,615,000-
shares
40,673,566
options(nil
exercise
price, expiry
15/11/2021)
154,167
warrants(A$0.6,
expiry
15/4/2019)
Thor Mining plc AIM/ASX Molyhil tungsten 80,100,000 1,041,000
project ordinary 13,000
shares
10,000,000
warrants(5p,
expiry
29/1/2020)
Greatland AIM Gold exploration 14,700,000 266,000
Gold plc ordinary
shares
Sable Resources TSX-V Gold and silver 650,000 75,000
Limited exploration ordinary
shares
Arkle Resources AIM Zinc exploration 4,869,952 75,000
plc ordinary -
(was Connemara shares
Mining plc) 4,819,277
warrants(7p,
expiry
9/3/2020)
Summary of unlisted investments held at 31 December 2018
Investment Listing Description No. of securities Value at
held year end GBP
Pan Asia Metals Private Lithium and 7,627,447 ordinary 460,000
Limited tungsten shares
exploration
Veta Resources Private Gold 1,666,667 ordinary 144,000
Inc. exploration shares
Tally Limited Private Gold currency 3,840,909 ordinary 102,000
(was Lionsgold shares -
Limited) 9,090,909
warrants(2.2p,
expiry 29/1/19)
Investment Policy
Proposed investments to be made by the Group may be: either
quoted or unquoted; made by direct acquisition or through farm-ins;
may be in companies, partnerships, joint ventures; or direct
interests in mining projects. Target investments will generally be
involved in projects in the exploration and/or development stage
and/or producing mines.
The Group's Direct Projects Division currently remains focused
on projects located in South East Asia, Australia, Africa and
Europe but will also consider investments in other geographical
regions. The Directors identify and assess potential investment
targets and, where they believe further investigation is required,
appoint appropriately qualified advisors to assist.
The Group carries out a comprehensive and thorough project
review process in which all material aspects of any potential
investment are subject to appropriate due diligence.
The Group's Direct Equities Division invests in both strategic
and on-market investments. In considering acquisitions and
hold/sell decisions the Group considers the commodity price
outlook, the track record of management, the ability for the Metal
Tiger management team to "add value" through corporate governance,
financial and technical expertise, the potential to increase
substantially the value of any mining asset through exploration and
development regardless of commodity price performance, and the
ability to exist. Investments are made in low and medium risk
geographic jurisdictions.
The Company intends to deliver shareholder returns principally
through capital growth rather than income distribution via
dividends and actively manages its investment portfolio to achieve
this aim. Given the nature of the investing policy, the Company
does not intend to make regular periodic disclosures or
calculations of net asset value. The Board considers that, in due
course, the Company may require additional funding as investments
are made and new investment opportunities arise.
Administrative Expenses
Administrative costs in the year can fluctuate significantly
depending on the level of activity as regards the work carried out
on acquisitions and disposals, in managing Direct Project
investments, in our subsidiaries on Direct Project operational
costs and on the level of professional costs, principally legal
costs, involved with project acquisition and with direct equity
purchases and sales. Direct Project operational costs are included
within administrative costs and expensed unless they comply with
the Group's capitalisation policy as set out in note 2 to the
financial statements.
The administrative costs for the year have also been affected by
the Company's VAT position. During the year HMRC challenged the
approach the Company has been using in respect of its partial
exemption calculations for VAT recovery. We have opposed, and are
continuing to oppose, HMRC's position on this. Whilst we would hope
for a positive outcome, in view of the uncertainty we have fully
provided against VAT incurred in the year of GBP207,000 and against
GBP150,000 of claims in respect of past years. Of the total charge
GBP140,000 relates to costs incurred on the T3 MOD joint venture
and has been included within the calculation of the profit on the
sale of those interests, with GBP216,000 being included as an
increase in administrative expenses.
After taking VAT provisions into account, administrative expense
in 2018 amounted to GBP3,431,000 compared to GBP4,783,000 in 2017,
a decrease of 39%.
The reduction in expenses principally arose as a result of the
reduction in direct costs relating to the Group's Thai operations
(GBP771,000 reduction in total, of which GBP144,000 related to
staff costs) for the reasons more fully explained on page 14 of the
annual report and the absence of expenditure on the proposed IPO of
the Thai assets which in 2017 amounted to GBP712,000. There was an
increase in remuneration costs in the year as set out in note 6 to
the financial statements reflecting changes in the board and
responsibilities but this was primarily offset by a reduction in
other administrative expenses including external legal and
professional costs.
Finance and Working Capital
During 2018, Metal Tiger received a net GBP6,547,000 through
placings undertaken with third-party investors and the exercise of
warrants and options by Directors and others (2017: GBP7,642,000).
GBP3,967,000 (2017: GBP5,402,000) was raised from the disposal of
Direct Equities investments.
Of the total cash generated from operating activities,
principally overhead costs including expensed exploration costs
relating to Thailand, consumed GBP3,652,000 (2017: GBP3,889,000),
GBP946,000 was incurred in the disposal of the T3 assets in
Botswana, GBP3,466,000 (2017: GBP5,939,000) on new Direct Equity
Division investments and GBP3,438,000 (2017: GBP1,750,000) on
funding Direct Projects Division operations.
POST YEAR DEVELOPMENTS
Direct Projects
Botswana - Joint venture with MOD
On 7 May 2019, the joint venture announced planned work for the
T20 Exploration Project with drilling to start in May 2019, with
nine wide spaced reverse circulation ("RC") holes planned and four
diamond drill holes, following up shallow copper and silver
mineralisation intersected in three previous holes. Where the
proposed T23 Prospect re-drilling is successful, it is planned to
extend the drilling eastwards to the T4 West target approximately
7km east of T23. T4 West shows similar geophysical signatures to
the T4 Copper Prospect and is located intermediately between the
T23 and T4 prospects.
A programme for proposed drilling at the A4 Dome, which is
expected to start during the second half of 2019, will seek to test
for the widespread NPF contact mineralisation below the A4 Dome and
comprises:
-- six shallow RC holes to follow up shallow vein hosted mineralisation
in hole MO-A4-019D (announced on 20 December 2018); and
-- one deep DD hole to follow up the high-grade vein hosted
mineralisation intersected in holes MO-A4-003D and
MO-A4-008D
(announced on 20 December 2018).
If successful, it is expected that a further drilling programme
would follow on with the objective of delineating a maiden JORC
Resource on the A4 Dome. Given the proximity to T3, it is envisaged
that such a JORC Resource could potentially feed into the planned
T3 Processing Plant.
Botswana - Kalahari Metals Limited
On 11 March 2019, Metal Tiger exercised its option to acquire a
further 16% of the voting rights and ordinary share capital in KML
for US$500,000 bringing its total investment to US$1.6million and
increasing its holding in the company to 50%. As announced on 23
May 2019, KML exercised its rights to acquire 51% of Triprop. This
is subject to receiving change of control approval from the
Botswanan Government. Upon receiving this approval, KML and Triprop
will enter into a joint venture agreement which, inter alia, will
give KML the right to appoint two of the four directors to the
Triprop Board, one of whom will be the Chairman.
Also on 23 May 2018, it was announced that, following the
approval of the Environmental Management Plan for the Ngami Copper
Project by the Botswana Department of Environmental Affairs,
diamond drilling can now commence with mobilisation scheduled for
the first week of June 2019. This first phase of diamond drilling,
with an initial 2,100m planned, will test priority fold hinge
targets at NCP.
Spain
On 25 April 2019, the results of diamond drilling at the
Logrosán gold tungsten project in Spain completed during the winter
work programme of 2018/2019 confirmed high grade tungsten
intersections and significant gold intersections at depth. We
consider that the findings have added significantly to the value of
the project with five high grade tungsten intersections averaging
3m at 0.3% WO3, plus associated tin credits, confirmed at depth.
Drilling also yielded three high grade, one metre wide, gold
intersections (ranging between 9.7g/t and 96.2g/t Au), across two
separate targets, delineating subsurface gold for the first time in
the Logrosán area. We are currently considering the next steps for
the project with our JV partner.
New opportunity pipeline
Opportunities continue to grow and Metal Tiger is considering
ways to capture value from pipeline opportunities within Metal
Tiger and also from third parties.
Direct Equities
On 28 March 2019, MOD Resources announced the results of the
completed feasibility for the T3 Copper Project which includes a
proposed 11.5-year open pit mine, 3Mt per annum conventional
processing plant and all associated infrastructure. The feasibility
study has demonstrated the opportunity to develop a copper mine
that is expected to generate revenue of US$2.3billion at a margin
of over 47% across the 11.5 year mine life using a long-term
consensus copper price of US$3.08/lb. Over the life of the mine,
average all-in sustaining costs ("AISC") are expected to be in the
lowest quartile of the cost curve at a very competitive US$1.56/lb
of copper produced, after silver credits. The current estimated
direct and indirect capital cost for the establishment of the mine,
the construction of the process plant and associated infrastructure
is US$142million (excluding mining pre-strip costs).
In Q1 2019 the value of the listed minority equity stake in MOD
recovered in value as a result of an indicative offer from Sandfire
Resources NL at A$0.38 per share.
Three minority equity investments have been made subsequent to
the year end in Barkerville Gold Mines Ltd. (GBP124,000 investment
cost), iMetal Resources Inc. (GBP54,000 investment cost) and
Aurelius Minerals Inc. (GBP57,000 investment cost), all gold
exploration companies operating in Canada.
ACCOUNTING TREATMENT
Given the nature of our investments, the tendency is for
investors to look at the Group's net assets and compare this to
market capitalisation. For Metal Tiger this simplistic valuation
metric does not work as the Group is focused on investment in major
resource projects where the value of an interest can increase very
rapidly with successful ground exploration or corporate
developments.
Where a project or investment has been made to acquire
commercially valuable interests, or where the Group has acquired
valuable project data and strategic positioning in exploration
licences, mining licences and licence applications, then the costs
of investment will be capitalised in the Statement of Financial
Position at the period end.
Shareholders should note therefore that at present the published
net asset position of the Group will largely comprise the working
capital representing predominantly cash, investments in joint
ventures and associates and liquid tradeable resource shares. Metal
Tiger carries no material debt or trade creditors.
KEY PERFORMANCE INDICATORS
The key performance indicators
are set out below:
31 December2018 31 December Change
2017 %
Net asset value GBP18,951,000 GBP15,443,000 +23%
Net asset value - fully 1.40p 1.33p +6%
diluted per share1
Closing share price 1.25p 2.33p -46%
Share price premium/(discount) to (11)% 75% -114%
net asset value - fully diluted
Market capitalisation GBP16,874,000 GBP25,326,000 -335%
1 Fully diluted net asset value is calculated on the aggregate
number of shares in issue at the year end and the number of
warrants and options in the money at the year end. There were no
warrants or options in the money at the year end (2017: 32,199,000
and 43,780,000 respectively).
PRINCIPAL RISKS AND UNCERTAINTIES
The main business risk is considered to be investment risk.
The Company faces external risks which are those that can
materially impact or influence the investment environment within
which the Company operates and can include changes in commodity
prices and the numerous factors which can influence those changes,
including economic recession and investor sentiment.
The Company's Direct Projects are located in jurisdictions other
than the UK and therefore carry with them country risk,
regulatory/permitting risk and environmental risk. Direct Project
investments tend to be at different stages of development and each
stage within the mining exploration and development cycle can carry
its own risks. These risks are mitigated by the Metal Tiger Board,
Executive Board, senior management and where needed consultants
actively working as the operators of projects.
It should be noted that the Company does not operate its Direct
Projects on a day-to-day basis and whilst the Board looks to
structure investments in a format in which Metal Tiger's senior
management and the Board can influence, obtain high level oversight
(often at board level) and use legal agreements to provide control
mechanisms (often negative control) to protect the Company's
investments, there is a risk that the operator does not meet
deadlines or budgets, fails to propose or pursue the appropriate
strategy, or does not provide accurate or sufficient information to
Metal Tiger. There is always the risk that an operator does not
adhere to the legal agreements in place.
The Company's Direct Equities Division is exposed to interest
rate changes, liquidity risk and volatility particularly in
Australia, the UK and Canada.
The Directors intend to mitigate risk by carrying out a
comprehensive and thorough project review of any potential
investment in which all material aspects will be subject to
rigorous due diligence. The Directors believe that the Company has
sufficient cash resources to pursue its investment strategy.
GOING CONCERN
As disclosed in note 2, after making enquiries, the Directors
have a reasonable expectation that the Company will have adequate
resources to continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
On behalf of the BoardMichael McNeillyChief Executive Officer30
May 2019
CHAIRMAN'S CORPORATE GOVERNANCE STATEMENT
FOR THE YEARED 31 DECEMBER 2018
In September 2018, the Company adopted the 2018 Quoted Companies
Alliance Corporate Governance Code (the "QCA Code") in line with
the London Stock Exchange's changes to the AIM Rules requiring all
AIM quoted companies to adopt and comply with a recognised
corporate governance code and to explain how it complies with that
code or, where it departs from its chosen corporate governance
code, to explain the reasons for so doing.
The Board is fully committed to a high standard of corporate
governance based on practices which are proportional to the size,
risks and operation of the business. In adopting the QCA Code, the
Board recognises its principles which seek to focus on the creation
of medium to long term value for shareholders without stifling the
entrepreneurial spirit in which small to medium sized companies,
such as Metal Tiger, have been created.
In this section of the Report and Accounts we detail the
approach the Board takes to corporate governance and set out how
the Company complies with the majority of principles within the QCA
Code. It also explains where we have decided that the
recommendations in the Code in relation to evaluating board
performance are not appropriate to our size and operations at
present.
My role as Chairman is to provide leadership of the Board and
ensure its effectiveness on all aspects of its remit to maintain
control of the Group. I am also responsible for the implementation
and practice of sound corporate governance. As an independent
non-executive director, I maintain an adequate degree of separation
from the day-to-day management of the Company in performing that
role.
In the spirit of the QCA Code it is the Board's job to ensure
that the Group is managed for the long term benefit of all
shareholders and other stakeholders with effective and efficient
decision-making. Corporate governance is an important part of that
job, reducing risk and adding value to the Group. The Board will
continue to monitor the governance framework of the Group as it
grows.
Charles HallChairman30 May 2019
REPORT OF THE DIRECTORS
FOR THE YEARED 31 DECEMBER 2018
The Directors present their report together with the audited
financial statements for the year ended 31 December 2018.
A review of the business and principal risks and uncertainties
has been included in the Strategic Report.
DIVIDS
No interim dividend was paid (2017: GBPnone) and the Directors
do not propose a final dividend (2017: GBPnone) for the 12 months
ended 31 December 2018.
DIRECTORS
The Directors of the Company who held office during the year and
to the date of this report were as follows:
Charles Patrick Stewart Hall (Chairman)
Terrence Ronald Grammer
David Michael McNeilly
Mark Roderick Potter
Neville Keith Bergin appointed 1 March 2018
Geoffrey Stephen McIntyre resigned 1 March 2018
Alistair Middleton resigned 27 June 2018
Keith Springall resigned 1 October 2018
Further details of the Directors' remuneration are given in note
6, details of Directors' share options are given in note 25 and the
Directors' interests in transactions of the Group and the Company
are given in note 27.
FUTURE DEVELOPMENTS
The future developments of the business are set out in the
Strategic Report under "Post Year End Developments" and are
incorporated into this report by reference.
FINANCIAL INSTRUMENTS
Details of the Group's financial instruments are given in note
26.
SIGNIFICANT SHAREHOLDERS
As at 30 May 2019 the following were, as far as the Directors
are aware, interested in 3% or more of the issued share capital of
the Company
Name Number of ordinary shares % of issued ordinary
share capital
Exploration Capital 206,361,942 13.25%
Partners
Michael Joseph 95,979,890 6.16%
Terry Grammer 80,963,426 5.20%
RIBO 60,000,000 3.85%
Trust (beneficially
owned by Rick Rule)
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Group's financial risk management objectives and
policies are set out in note 26 to these financial statements.
POST YEAR EVENTS
Since 31 December 2018, the following post year end events have
taken place.
On 11 February 2019, the Company announced the placing of
70,010,345 new ordinary shares at a price of 1.45p raising
approximately GBP1million. The participants in the placing also
received one warrant for every two placing shares subscribed at an
exercise price of 2p and valid for a period of two years from the
date of admission of the placing shares.
On 11 March 2019, the Company announced a further placing of
137,162,552 new ordinary shares at a price of 1.45p raising
approximately GBP2million. The participants in the placing also
received one warrant for every two placing shares subscribed at an
exercise price of 2p and valid for a period of two years from the
date of admission of the placing shares. In addition, a further
9,629,960 warrants were issued on the same terms to advisors for
services related to the fundraising.
On 5 April 2019, the Company announced the issue of a further
384,615 new ordinary shares in lieu of cash for professional
services provided to the Company.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's
system of internal control and for reviewing the effectiveness of
these systems. The risk management process and systems of internal
control are designed to manage rather than eliminate the risk of
the Group failing to achieve its strategic objectives. It should be
recognised that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss. The
Company has well established procedures which are considered
adequate given the size of the business.
DIRECTORS' INDEMNITY INSURANCE
As permitted by Section 233 of the Companies Act 2006, the
Company has purchased insurance cover on behalf of the Directors
indemnifying them against certain liabilities which may be incurred
by them in relation to the Group.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare Group and Company financial statements in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and of the Company and of the profit or loss
of the Group for that period. The Directors are also required to
prepare financial statements in accordance with the rules of the
London Stock Exchange for companies quoted on AIM. In preparing
these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and
prudent;
-- state whether they have been prepared in accordance with IFRS as
adopted by the European Union, subject to any material
departures
disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and Company will
continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and the Company and enable them to
ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the
Group and the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
In the case of each person who was a Director at the time this
report was approved:
-- so far as that Director is aware there is no relevant audit
information of which the Company's auditor is unaware; and
-- that Director has taken all steps that the Director ought to have
taken as a Director to make himself aware of any relevant
audit
information and to establish that the Company's auditor is aware
of
that information.
The Directors are responsible for ensuring that the annual
report and the financial statements are made available on a
website. Financial statements are published on the Company's
website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website are the
responsibility of the Directors. The Directors' responsibilities
also extend to the on-going integrity of the financial statements
contained therein.
AUDITOR
Crowe Clark Whitehill LLP changed its name to Crowe U.K. LLP on
25 June 2018.
A resolution to re-appoint Crowe U.K. LLP as auditor of the
Company for the year ended 31 December 2018 will be proposed at the
forthcoming annual general meeting.
By order of the Board
Malcolm BacchusSecretary30 May 2019
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF METAL TIGER PLC
FOR THE YEARED 31 DECEMBER 2018
OPINION
We have audited the financial statements of Metal Tiger plc (the
"Parent Company") and its subsidiaries (the "Group") for the year
ended 31 December 2018, which comprise:
-- the Group statement of comprehensive income for the year ended 31
December 2018;
-- the Group and Parent Company statements of financial position as at 31
December 2018;
-- the Group and Parent Company statements of cash flows and statements
of changes in equity for the year then ended; and
-- the notes to the financial statements, which include a summary of
significant accounting policies and other explanatory
information.
The financial reporting framework that has been applied in the
preparation of the Group and Parent Company financial statements is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion:
-- the financial statements give a true and fair view of the state of the
Group's and of the Parent Company's affairs as at 31 December
2018 and
of the Group's loss for the period then ended;
-- the Group's financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted
by the European Union;
-- the Parent Company's financial statements have been properly prepared
in accordance with International Financial Reporting Standards
as
adopted by the European Union as applied in accordance with
the
requirements of the Companies Act 2006; and
-- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in
relation to which ISAs (UK) require us to report to you when:
-- The Directors' use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate;
or
-- The Directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant
doubt
about the Group's and the Parent Company's ability to continue
to
adopt the going concern basis of accounting for a period of at
least
twelve months from the date when the financial statements
are
authorised for issue.
OVERVIEW OF OUR AUDIT APPROACH
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified. Based on our professional judgement, we determined
overall materiality for the Group financial statements as a whole
to be GBP300,000, which represents approximately 2% of the Group's
net assets.
We use a different level of materiality ("performance
materiality") to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration. We agreed with the Audit Committee to
report to it all identified errors in excess of GBP10,000. Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
The Parent Company is accounted for from one central operating
location, the group's registered office. Our audit was conducted
from this main operating location.
The Group also has significant components accounted for in
Thailand where the audit was undertaken by a local audit firm.
Audit instructions were issued to the component auditor, the
instructions detailed the significant risks to be addressed through
the audit procedures and indicated the information we required to
be reported back to the Group audit team. As part of our audit we
reviewed component auditor working papers. Telephone conference
meetings were then held with the component auditors.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters. This is not a complete list of all risks identified by our
audit.
Key audit matter How the scope of our audit addressed
the key audit matter
Income recognition Our procedures included:
There is a presumption that
there is always a risk of Agreeing of a sample of the disposal
material misstatement due of investments during the year to
to improper recognition. supporting documentation
Given the nature of the business and re-performing
the key group income generated the gain or loss arising;
relates to the gain on Reviewing disposals
investments primarily either side of the
composing of gain on investments year end ensuring that the income
and movements in has been appropriately accounted
fair value of investments for within the correct period.
held for trading. Movements in fair value were also
considered and are discussed
within 'Measurement and valuation
of investments' below.
Key AuditMatters (continued)
Key audit matter How the scope of our audit addressed
the key audit matter
Measurement and valuation of investments Our procedures included:
The group holds a number of different types
of investment where judgement is For a sample of investments during
required when determining the accounting the year considering
treatment and whether they are the classification determined by
accounted for as investments in subsidiaries, management, which included consideration of
investments in joint ventures, their structure, legal form, contractual
investments in associates or Direct agreement and any other fact and circumstances
Equities Division investments. available. Reviewing the value stated in
In addition certain investments cannot be agreed the financial statements for
to third party market data, in particular a sample of investments.
investments in the associates, investments Where this information cannot be
in joint ventures and the investments agreed to market information we have discussed
held in share warrants. For these investments the assumptions determined by management in
management has determined alternative assessing the value, challenging
approaches to ensure that these are appropriately where appropriate,
valued at the year end. as well considering whether there
is any evidence investments may be impaired.
Considering the adequacy of the disclosures
made in the financial statements over this
as a significant area of judgement.
Our audit procedures in relation to these matters were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matt ers
individually and we express no such opinion.
OTHER INFORMATION
The Directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. In connection with our audit of the
financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this
regard.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the Strategic Report and the Directors'
Report for the financial year for which the financial statements
are
prepared is consistent with the financial statements; and
-- the Directors' Report and Strategic Report have been prepared in
accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION:
In light of the knowledge and understanding of the Company and
its environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic Report or the
Directors' Report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the Parent Company,
or returns adequate for our audit have not been received from
branches
not visited by us; or
-- the Parent Company financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are
not made; or
-- we have not received all the information and explanations we require
for our audit.
RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL
STATEMENTS
As explained more fully in the Directors' Responsibilities
Statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error. In preparing the financial statements, the
directors are responsible for assessing the Group's and Parent
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements. A further description of our responsibilities for the
audit of the financial statements is located on the Financial
Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor's report.
USE OF OUR REPORT
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Stephen Bullock (Senior Statutory Auditor)for and on behalf
ofCrowe U.K. LLP Statutory AuditorLondon30 May 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
Note 2018 2017
GBP'000 GBP'000
Sale of interests in exploration 4 12,530 -
operations in Botswana
(Loss)/Gain on disposal of investments 18 (511) 3,916
Movement in fair value of Direct 18 (12,434) 1,541
Equities Division investments
Share of post-tax (losses)/profits 14 (176) 79
of equity accounted associates
Share of post-tax losses of equity 15 (33) (100)
accounted joint ventures
Investment income - 1
Net (loss)/gain before administrative expenses (624) 5,437
Administrative expenses (3,647) (4,927)
OPERATING (LOSS)/PROFIT 3,5 (4,271) 510
Finance income 7 313 1
Finance costs 8 - (164)
(LOSS)/PROFIT FOR THE YEAR BEFORE TAXATION (3,958) 347
Tax on (loss)/profit on ordinary activities 9 545 (545)
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION 5 (3,413) (198)
OTHER COMPREHENSIVE INCOME
ITEMS WHICH MAY BE SUBSEQUENTLY RECLASSIFIED
TO PROFIT OR LOSS:
Exchange differences on translation (152) (8)
of foreign operations
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (3,565) (206)
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION
IS ATTRIBUTABLE TO:
Owners of the Company (3,404) (180)
Non-controlling interests (9) (18)
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (3,413) (198)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
IS ATTRIBUTABLE TO:
Owners of the Company (3,554) (188)
Non-controlling interests (11) (18)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (3,565) (206)
LOSS PER SHARE
Basic loss per share 11 (0.28p) (0.02p)
Fully diluted loss per share 11 (0.28p) (0.02p)
All amounts relate to continuing activities.
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION
AT 31 DECEMBER 2018
Note 2018GroupGBP'000 2018CompanyGBP'000 2017GroupGBP'000 2017CompanyGBP'000
NONCURRENT
ASSETS
Intangible 12 33 - 34 -
assets
Property, plant 17 - 31 -
and equipment
Deferred tax 9 - - 97 97
asset
Investment in 13 - 564 - 536
subsidiaries
Investment in 14 1,668 1,668 2,203 2,203
associates
Investment 15 2,049 2,049 1,224 1,224
in joint
ventures
Other fixed 16 107 107 - -
asset
investments
Royalties 17 1,285 1,285 - -
receivable
5,159 5,673 3,589 4,060
CURRENT ASSETS
Direct Equities 18 12,079 12,079 10,062 10,062
Division
investments
Trade and other 19 339 102 482 242
receivables
Amounts due 27 - 2,743 - 2,111
from
related parties
Cash and cash 20 1,859 1,831 2,845 2,835
equivalents
14,277 16,755 13,389 15,250
CURRENT
LIABILITIES
Trade and other 21 162 143 725 666
payables
Amounts due 27 146 146 - -
to related
parties
Loans 22 52 - 49 -
and borrowings
360 289 774 666
NET CURRENT 13,917 16,466 12,615 14,584
ASSETS
NON-CURRENT
LIABILITIES
Deferred tax 9 - - 642 642
liability
Contingent 23 125 125 119 119
consideration
125 125 761 761
NET ASSETS 18,951 22,014 15,443 17,883
EQUITY
Share capital 24 135 135 109 109
Share premium 24 10,639 10,639 6,125 6,125
account
Share based 1,484 1,484 928 928
payment
reserve
Warrant reserve 5,173 5,173 3,348 3,348
Translation (137) - 13 -
reserve
Retained 1,565 4,583 4,912 7,373
profits*
TOTAL 18,859 22,014 15,435 17,883
SHAREHOLDERS'
FUNDS
Equity 92 - 8 -
non-controlling
interests
TOTAL EQUITY 18,951 22,014 15,443 17,883
*Retained profits/losses include the Company 's loss for the
year after taxation of GBP2,942,000 (2017: profit
GBP1,010,000).
These Financial Statements were approved by the Board of
Directors on 30 May 2019
and were signed on its behalf by:
Michael McNeilly, DirectorCompany number: 04196004
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
2018 2018 2017 2017
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
CASH FLOWS FROM OPERATING
ACTIVITIES
(Loss)/Profit before taxation (3,958) (3,487) 347 1,555
Adjustments for:
Net (profit) on sale (12,530) (12,530) - -
of exploration
operations in Botswana
Loss/(Profit) on disposal 511 511 (3,916) (3,916)
of Direct
Equities Division investments
Movement in fair value 12,434 12,434 (1,541) (1,541)
of investments
Share of post-tax 176 176 (79) (79)
losses/(profits)
of equity accounted associates
Share of post-tax 33 33 100 100
losses of equity
accounted joint ventures
Share based payment 708 708 468 445
charge for year
Cost of warrant extension - - 263 263
Equity settled trading 119 119 63 63
liabilities
Issue of KEMCO Mining (59) (59) 59 59
plc warrants
Depreciation and amortisation 19 - 19 -
Write off of assets - - 2 -
Investment income - - (1) (1)
Finance income (313) (301) (1) -
Finance costs - - 164 161
Operating cash flow before (2,860) (2,396) (4,053) (2,891)
working capital changes
Increase in trade and (146) (162) (76) (36)
other receivables
(Decrease)/Increase in trade (676) (522) 284 336
and other payables
Increase in amounts due - (656) - (1,099)
from subsidiaries
Unrealised foreign exchange 30 68 (44) (39)
gains and losses
Net cash outflow from (3,652) (3,668) (3,889) (3,729)
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from investment 3,967 3,967 5,402 5,402
disposals
Purchase of intangible assets - - (11) -
Purchase of fixed assets - - (1) -
Purchase of investment - - - (174)
in subsidiary
Purchase of investment in, (2,579) (2,579) (1,522) (1,522)
and loans to, associates
Purchase of investment in, and (859) (859) (228) (228)
loans to, joint ventures
Purchase of other fixed (107) (107) - -
asset investments
Purchase of investments (3,359) (3,359) (5,939) (5,939)
Costs relating to the disposal (946) (946) - -
of exploration
operations in Botswana
Finance income 1 - 1 1
Net cash outflow from (3,882) (3,883) (2,298) (2,460)
investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares 6,992 6,992 8,028 8,028
Share issue costs (445) (445) (386) (386)
Net cash inflow from 6,547 6,547 7,642 7,642
financing activities
NET (DECREASE)/INCREASE IN (987) (1,004) 1,455 1,453
CASH AND CASH EQUIVALENTS
Cash and cash equivalents 2,845 2,835 1,390 1,382
brought forward
Effect of exchange rate changes 1 - - -
CASH AND CASH EQUIVALENTS 1,859 1,831 2,845 2,835
CARRIED FORWARD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share Share Share based Warrant Translation Retained Total equity Non-controlling Total
capital premium payment reserve reserve profits/ shareholders' interests equity
reserve (losses) funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
BALANCE AT 1 78 1,275 532 1,087 (68) 4,527 7,431 26 7,457
JANUARY 2017
Loss for the - - - - - (180) (180) (18) (198)
year ended
31 December
2017
Other - - - - 81 (89) (8) - (8)
comprehensive
income
TOTAL - - - - 81 (269) (188) (18) (206)
COMPREHENSIVE
INCOME
Share issues 31 4,592 - 2,965 - - 7,588 - 7,588
Warrant - - - 522 - - 522 - 522
issues
Share issue - (386) - - - - (386) - (386)
expenses
Cost of share - - 468 - - - 468 - 468
based
payments
Transfer of - 644 (72) (1,226) - 654 - - -
reserves
relating to
exercise
and expiry
of options
and warrants
TOTAL CHANGES 31 4,850 396 2,261 - 654 8,192 - 8,192
DIRECTLY
TO EQUITY
BALANCE AT 31 109 6,125 928 3,348 13 4,912 15,435 8 15,443
DECEMBER
2017
Loss for the - - - - - (3,404) (3,404) (9) (3,413)
year ended
31 December
2018
Other - - - - (150) - (150) (2) (152)
comprehensive
income
TOTAL - - - - (150) (3,404) (3,554) (11) (3,565)
COMPREHENSIVE
INCOME
Share issues 26 4,835 - 2,135 - - 6,996 - 6,996
Warrant - - - 73 - - 73 - 73
issues
Share issue - (445) - - - - (445) - (445)
expenses
Cost of share - - 708 - - - 708 - 708
based
payments
Transfer of - 124 (152) (383) - 152 (259) - (259)
reserves
relating to
exercise
and expiry
of options
and warrants
Change of - - - - - (95) (95) 95 -
interest
without
loss
of control
TOTAL CHANGES 26 4,514 556 1,825 - 57 6,978 95 7,073
DIRECTLY
TO EQUITY
BALANCE AT 31 135 10,639 1,484 5,173 (137) 1,565 18,859 92 18,951
DECEMBER
2018
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share Share premium Share based Warrant Retained Total
capital account payment reserve profits/ equity
reserve (losses)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
BALANCE 78 1,275 532 1,087 5,709 8,681
AT 1
JANUARY
2017
Profit - - - - 1,010 1,010
for
the
year and
total
comprehensive
income
for the
year
ended
31
December
2017
Share 31 4,592 - 2,965 - 7,588
issues
Warrant - - - 522 - 522
issues
Share - (386) - - - (386)
issue
expenses
Cost of - - 468 - - 468
share
based
payments
Transfer - 644 (72) (1,226) 654 -
of
reserves
relating
to
exercise
and
expiry
of
options
and
warrants
TOTAL 31 4,850 396 2,261 654 8,192
CHANGES
DIRECTLY
TO
EQUITY
BALANCE 109 6,125 928 3,348 7,373 17,883
AT 31
DECEMBER
2017
Loss for - - - - (2,942) (2,942)
the year
and
total
comprehensive
income
for the
year
ended
31
December
2018
Share 26 4,835 - 2,135 - 6,996
issues
Warrant - - - 73 - 73
issues
Share - (445) - - - (445)
issue
expenses
Cost of - - 708 - - 708
share
based
payments
Transfer - 124 (152) (383) 152 (259)
of
reserves
relating
to
exercise
and
expiry
of
options
and
warrants
TOTAL 26 4,514 556 1,825 152 7,073
CHANGES
DIRECTLY
TO
EQUITY
BALANCE 135 10,639 1,484 5,173 4,583 22,014
AT 31
DECEMBER
2018
NOTES TO THE FINANCIAL STATEMENTS
1 GENERAL INFORMATION
Metal Tiger plc is a public limited company incorporated in the
United Kingdom. The shares of the Company are listed on the AIM
market of the London Stock Exchange. The Group's principal
activities are described in the Report of the Directors.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and IFRIC
interpretations as adopted by the European Union and the Companies
Act 2006 applicable to companies reporting under IFRS. The
Financial Statements have also been prepared under the historical
cost basis, except for investments in the Direct Equities Division,
share options and warrants which are recognised at fair value.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial
Statements, are disclosed later in these accounting policies.
The financial statements are presented in UK pounds, which is
also the Company's functional currency.
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied throughout all periods presented in the
financial statements.
A number of amendments to IFRS became effective for the
financial year beginning on 1 January 2018:
-- IFRS 9 Financial Instruments
-- IFRS 15 Revenue from Contracts with Customers
-- IFRIC 22 Foreign Currency Transactions and Advance Consideration
-- Annual Improvements to IFRS 2014-2016.
IFRS 9 Classification and measurement of financial assets and
liabilities
The classification of financial assets under IFRS 9 allows such
assets to be measured at amortised cost, fair value through the
profit and loss account or fair value through other comprehensive
income. The Group's existing accounting policies provide for
investments in the Direct Equities Division as accounted for at
fair value through the profit and loss account and for trade
receivables and loans to be carried at amortised cost.
Trade and other receivables are held at amortised cost in line
with IAS 39 and IFRS 9 which replaces it.
IFRS 9 also requires an "expected credit loss" model to be
applied to financial assets measured at amortised cost other than
those held as investments in equity instruments. The financial
instruments held by the Group at amortised cost consist of short
term trade receivables mainly relating to tax recoverable and
prepayments, cash and cash equivalents. The nature of these assets
is such that the change in the model does not affect the amount at
which they are held in the financial statements.
Accordingly no re-classification or changes to the current or
prior year results, assets or liabilities shown in these financial
statements are required in order to comply with IFRS 9.
IFRS 15 Revenue from Contracts with Customers
The Group has no revenue from customers which falls to be
accounted for under the new standard and the introduction of the
standard has no effect on current or prior year results, assets or
liabilities shown in these financial statements. The value
attributed to future royalty payments receivable under the
agreement for the sale of the Group's interests in certain
exploration operations in Botswana has been treated in accordance
with the principles underlying IFRS 15 (see "Royalties Receivable"
below and note 4).
IFRIC 22 Foreign Currency Transactions and Advance Consideration
and the Annual Improvements to IFRS 2014-2016
The adoption of IFRIC 22 and the Annual Improvements 2014-2016
have no effect on the current or prior year results, assets or
liabilities shown in these financial statements.
An overview of standards, amendments and interpretations to IFRS
issued but not yet effective, and which have not been adopted early
by the Company, is presented below under "Statement of
Compliance".
GOING CONCERN
The financial statements are required to be prepared on the
going concern basis unless it is inappropriate to do so. At the
year end the Group had net current assets of GBP13,917,000
including cash balances of GBP1,859,000 and quoted investments of
GBP11,360,000 compared with borrowings of GBP52,000. Since the year
end the Company has raised a further GBP3million, before costs,
from placings. The Directors have prepared cash flow forecasts
through to 31 December 2020 which demonstrate that the Group is
able to meet its commitments as they fall due. On this basis, the
Directors have a reasonable expectation that the Group has adequate
resources to continue operating for the foreseeable future. For
this reason, they continue to adopt the going concern basis in
preparing the Group's financial statements.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting year. These estimates and assumptions
are based upon management's knowledge and experience of the
amounts, events or actions. Actual results may differ from such
estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
In certain circumstances, where fair value cannot be readily
established, the Directors are required to make judgements over
carrying value impairment and evaluate the size of any impairment
required.
SALE OF INTERESTS IN EXPLORATION OPERATIONS IN BOTSWANA
The calculation of the proceeds from the sale of interests in
exploration operations in Botswana includes an estimate of the
value of share options received in MOD Resources Limited, the
acquirer of those interests, and the value of the royalty payments
that the acquirer is contractually obliged to make to the Group
when those interests come into production. The assumptions used in
making those estimates are set out in note 4.
SHARE BASED PAYMENTS AND SHARE WARRANTS
The calculation of the fair value of equity-settled share based
awards and warrants issued in connection with share issues and the
resulting charge to the Statement of Comprehensive Income or
reserves requires assumptions to be made regarding future events
and market conditions. These assumptions include the future
volatility of the Company's share price. These assumptions are then
applied to a recognised valuation model in order to calculate the
fair value of the awards at the date of grant.
FAIR VALUE OF INVESTMENTS
The Group's investments in the Direct Equities Division require
measurement at fair value. Investments in shares in quoted entities
traded in an active market and unquoted shares are valued as set
out in "Current Assets Investments" below. The unquoted share
warrants (Level 3) are shown at Directors' valuation based on a
value derived from either Black-Scholes or Monte Carlo pricing
models depending on the suitability of the method to the specific
warrant taking into account the terms of the warrant and
discounting for the non-tradability of the warrants where
appropriate. Both pricing models use inputs relating to expected
volatility that require estimations. No value is ascribed to
warrants which include terms which cause the exercise price to be
dependent on events outside the control of the Group and outcomes
which are unable to be predicted with any certainty. The nil price
options to acquire shares in MOD Resources Limited received as part
of the disposal for certain of the Group's exploration interests in
Botswana are valued at the open market value of the shares in MOD
Resources Limited as the shares and options are considered to be
intrinsically equivalent (see note 4).
CLASSIFICATION OF JOINT ARRANGEMENTS
For all joint arrangements structured in separate vehicles the
Group must assess the substance of the joint arrangement in
determining whether it is classified as a joint venture or joint
operation. This assessment requires the Group to consider whether
it has rights to the joint arrangement's net assets (in which case
it is classified as a joint venture), or rights to and obligations
for specific assets, liabilities, expenses, and revenues (in which
case it is classified as a joint operation). Factors the Group must
consider include:
-- structure;
-- legal form;
-- contractual agreement; and
-- other facts and circumstances.
Upon consideration of these factors, the Group has determined
that all its joint arrangements structured through separate
vehicles give it rights to the net assets and are therefore
classified as joint ventures.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE INVESTMENTS
In arriving at the carrying value of investments in
subsidiaries, associates and joint ventures, the Group determines
the need for impairment based on the level of geological knowledge
and confidence of the mineral resources (as further described in
its accounting policy). Such decisions are taken on the basis of
the exploration and research work carried out in the period
utilising expert reports.
BUSINESS COMBINATIONS
Contingent consideration on acquisitions is recognised at fair
value.
STATEMENT OF COMPLIANCE
The Financial Statements comply with IFRS as adopted by the
European Union.
Details of new standards applied during the year and their
effect on the financial statements are set out under "Basis of
Preparation" above.
At the date of authorisation of these financial statements, a
number of Standards and Interpretations were in issue but not yet
effective. The adoption of these standards and interpretations, or
any of the amendments made to existing standards as a result of the
annual improvements cycle, including the introduction of IFRS 16
will not have a material effect on the financial statements in the
year of initial application nor will require restatement of prior
year results, assets or liabilities.
BASIS OF CONSOLIDATION
The Consolidated Statement of Comprehensive Income and Statement
of Financial Position include the financial statements of the
Company and its subsidiary undertakings made up to 31 December
2018.
Subsidiaries are all entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Profit or loss and each component of other comprehensive income
are attributed to the equity holders of the parent of the Group and
to non-controlling interests, even if this results in
non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group's
accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on
consolidation.
A change in ownership interest of a subsidiary without a loss of
control is accounted for as an equity transaction. If the Group
loses control over a subsidiary, it:
-- derecognises the assets (including goodwill) and liabilities of the
subsidiary;
-- derecognises the carrying amount of any non-controlling interests;
-- derecognises the cumulative translation differences recorded in equity;
-- recognises the fair value of the consideration received;
-- recognises the fair value of any investment retained;
-- recognises any surplus or deficit in the Statement of Comprehensive
Income; and
-- reclassifies the parent's share of components previously recognised in
other comprehensive income to profit or loss or retained
earnings, as
appropriate, as would be required if the Group had directly
disposed
of the related assets or liabilities.
When the Group ceases to have control, any retained interest in
the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised in
profit or loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
require that the amounts previously recognised in other
comprehensive income be reclassified to profit or loss.
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at fair value at the date
of acquisition and the amount of any non-controlling interest in
the acquired entity. Non-controlling interests ("NCI") may be
initially measured either at fair value or at the NCI's
proportionate share of the recognised amounts of the acquiree's
identifiable net assets. The choice of measurement basis is made on
a transaction-by-transaction basis. Acquisition costs incurred are
expensed and included in administrative expenses except where they
relate to the issue of debt or equity instruments in connection
with the acquisition, in which case they are included in finance
costs.
When the business combination is achieved in stages, any
previously held equity interest is re-measured at its acquisition
date fair value and any resulting gain or loss is recognised in
profit or loss. It is then considered in determination of
goodwill.
Any contingent consideration to be transferred by the acquirer
is recognised at fair value at the acquisition date. Any subsequent
changes to the fair value of the contingent consideration are
adjusted against the cost of the acquisition if they occur within
the measurement period of twelve months following the date of
acquisition. Any subsequent changes to the fair value of the
contingent consideration after the measurement period are
recognised in the Income Statement. Contingent consideration that
is classified as equity is not re-measured and subsequent
settlement is accounted for within equity.
SEGMENTAL REPORTING
The accounting policy for identifying segments is based on
internal management reporting information that is regularly
reviewed by the chief operating decision maker, which is identified
as the Board of Directors. In identifying its operating segments,
management generally follows the Company's service lines which
represent the main products and services provided by the
Company.
EXPLORATION COSTS
Exploration costs incurred by Group companies, associates and
joint ventures are expensed in arriving at profit or loss for the
period.
Investments made are capitalised as an asset where the
underlying projects have mineral resources which are compliant with
internationally recognised mineral resource standards (JORC and NI
43-101) or where the investment is to acquire an interest in an
investment or associate that holds commercial information, assets
or strategic features against which a current commercial value can
be reasonably assessed.
The JORC Code, the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, is a
professional code of practice that sets minimum standards for
public reporting of mineral exploration results, mineral resources
and ore reserves. NI 43-101 is a national instrument for the
Standards of Disclosure for Mineral Projects within Canada which
provides a codified set of rules and guidelines for reporting and
displaying information related to mineral properties owned by, or
explored by, companies which report these results on stock
exchanges within Canada.
TAXATION
Current taxation is the taxation currently payable on taxable
profit for the year.
Deferred income taxes are calculated using the liability method
on temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on the
initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting
profit. Temporary differences include those associated with shares
in subsidiaries and joint ventures and are only not recognised if
the Company controls the reversal of the difference and it is not
expected for the foreseeable future. In addition, tax losses
available to be carried forward as well as other income tax credits
to the Company are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the Statement of Financial Position date. Changes in deferred tax
assets or liabilities are recognised as a component of tax expense
in the Statement of Comprehensive Income, except where they relate
to items that are charged or credited to equity in which case the
related deferred tax is also charged or credited directly to
equity.
FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies are translated at the
exchange rate ruling at the date of the transaction.
The results of overseas operations are translated at rates
approximating to those ruling when the transactions took place.
Monetary assets and liabilities denominated in foreign currencies
are translated at the rates of exchange ruling at the Statement of
Financial Position reporting date. All exchange differences are
dealt with through the Statement of Comprehensive Income as they
arise.
INTANGIBLE ASSETS
Software Licences
Expenditure is stated at cost, less amortisation and provision
for any impairment. Amortisation is provided at rates calculated to
write off the cost of the software over its expected useful life as
follows:
Software 10 years straight line
Gains and losses on disposals are determined by comparing the
disposal proceeds with the carrying amount and are included in the
Statement of Comprehensive Income in arriving at profit or loss for
the year.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Associates are entities, other than subsidiaries or joint
ventures, over which the Company has significant influence.
Significant influence is the power to participate in the financial
and operating policy decisions of the investee but does not amount
to control or joint control of the investee.
A joint venture is a contractual arrangement whereby two or more
parties undertake an economic activity that is subject to joint
control. Joint control is the contractually agreed sharing of
control such that significant operating and financial decisions
require the unanimous consent of the parties sharing control. In
some situations, joint control exists even though the Company has
an ownership interest of more than 50% because joint venture
partners have equal control over management decisions. The
Company's joint venture interests are held through one or more
Jointly Controlled Entities (a "JCE"). A JCE is a joint venture
that involves the establishment of a corporation, partnership or
other entity in which each venturer has a long term interest.
Exploration costs in respect of investments in associates and
joint ventures are capitalised or expensed according to the policy
set out above in respect of Group exploration costs. For associates
and joint ventures which are equity accounted for, any share of
losses are offset against cost of investment or loans advanced.
FINANCIAL ASSETS
The Company's financial assets comprise investments held in the
Direct Equities Division, royalties receivable, trade receivables
and cash and cash equivalents.
OTHER FIXED ASSET INVESTMENTS
Other fixed asset investments comprise equity interests which
are primarily held for strategic purposes and not for short term
trading. The method of accounting for these assets is set out below
under "Accounting for Direct Equity Division investments".
ROYALTIES RECEIVABLE
Royalties receivable are stated at the expected amounts to be
received based on existing committed contracts and discounted at an
appropriate discount rate which reflects the estimated
risk-weighted cost of capital relevant to that asset. The
amortisation of the discount over the period to the receipt of the
royalty payments is credited to the Statement of Comprehensive
Income as finance income.
The expected amounts to be received, the period over which they
will be received and the appropriate discount rate are assessed on
the date of acquisition of the royalty interests and re-assessed at
each reporting date.
CURRENT ASSET INVESTMENTS
All investments, except those primarily held for strategic
purposes or not for short term trading, are designated as current
asset investments. The method accounting for these assets is set
out below under "Accounting for Direct Equity Division
investments".
ACCOUNTING FOR DIRECT EQUITY DIVISION INVESTMENTS
Investment transactions are accounted for on a trade date basis.
Incidental acquisition costs are expensed. Assets are derecognised
at the trade date of the disposal. Where investments are traded in
a liquid market, the fair value of the financial instruments in the
balance sheet is based on the quoted bid price at the balance sheet
date, with no deduction for any estimated future selling cost.
Non-traded investments are valued by the Directors using primary
valuation techniques such as, where possible, comparable
valuations, recent transactions, last price and net asset
value.
Changes in the fair value of investments held at fair value
through profit or loss and gains and losses on disposal are
recognised in the Statement of Comprehensive Income.
TRADE AND OTHER RECEIVABLES
Trade and other current asset receivables are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method, less any provision for
impairment. The amount of any impairment provided is based on the
expected loss on an item-by-item basis for significant receivables
and using a risk-based provision matrix where appropriate.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
IMPAIRMENT OF FINANCIAL ASSETS
The carrying values of the Company's assets are reviewed
annually for any indicators of impairment. Where the carrying value
of an asset exceeds the recoverable amount (i.e. the higher of
value in use and fair value less cost to sell), the asset is
written down accordingly. Impairment charges are included in profit
or loss, except to the extent they reverse gains previously
recognised in other comprehensive income.
FINANCIAL LIABILITIES
The Company's financial liabilities comprise trade and other
payables. Financial liabilities are obligations to pay cash or
other financial assets and are recognised when the Company becomes
a party to the contractual provisions of the instruments.
Trade and other payables are recognised initially at their fair
value and subsequently measured at amortised cost less settlement
payments.
SHARE BASED PAYMENTS
All share based payments are accounted for in accordance with
IFRS 2 - "Share based payments". The Company issues equity-settled
share based payments in the form of share options and warrants to
certain Directors, employees and advisors. Equity-settled share
based payments are measured at fair value at the date of grant. The
fair value determined at the grant date of equity-settled share
based payments is expensed on a straight line basis over the
vesting period, based on the Company's estimate of shares that will
eventually vest. At each balance sheet date, the Company revises
its estimate of the number of equity instruments expected to vest
as a result of the effect of non-market based vesting conditions.
The impact of the revision of the original estimates, if any, is
recognised in profit or loss such that the cumulative expense
reflects the revised estimate, with a corresponding adjustment to
retained earnings.
Equity-settled share based payments are made in settlement of
professional and other costs. These payments are measured at the
fair value of the services provided which will normally equate to
the invoiced fees and charged to the Statement of Comprehensive
Income, share premium account or are capitalised according to the
nature of the fees incurred.
Fair value is estimated using the Black-Scholes valuation model.
The expected life used in the model has been adjusted on the basis
of management's best estimate for the effects of
non-transferability, exercise restrictions and behavioural
considerations.
WARRANTS
Share warrants issued to shareholders in connection with share
capital issues are measured at fair value at the date of issue and
treated as a separate component of equity. Fair value is determined
at the grant date and is estimated using the Black-Scholes
valuation model. Share warrants issued separately to Directors,
employees and advisors are accounted for in accordance with the
policy on share based payments above.
EQUITY
Equity comprises the following:
"Share capital" representing the nominal value of equity
shares;
"Share premium" representing the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue;
"Share based payment reserve" representing the cumulative cost
of share based payment;
"Warrant reserve" representing the outstanding cost of warrants
issued in connection with share capital issues; and
"Retained losses" representing retained losses.
3 SEGMENTAL INFORMATION
DIVISIONAL SEGMENTS
Year ended 31 Direct Direct Central costs Inter- Total
December Equities Projects GBP'000 company GBP'000
2018 GBP'000 GBP'000 GBP'000
Group
COMPREHENSIVE
INCOME
Net (12,945) 12,321 - - (624)
(loss)/gain
on investments
Intercompany - 152 - (152) -
sales
Administrative (434) (1,436) (1,929) 152 (3,647)
expenses
Net (39) 380 (28) - 313
finance
income/expense
(Loss)/gain (13,418) 11,417 (1,957) - (3,958)
for
the year
before
taxation
Taxation 642 - (97) - 545
(Loss)/gain (12,776) 11,417 (2,054) - (3,413)
for
the year
after taxation
FINANCIAL
POSITION
Intangible - 33 - - 33
assets
Property, - 17 - - 17
plant
and equipment
Investment in - 1,668 - - 1,668
associates
Investment - 2,049 - - 2,049
in joint
ventures
Other fixed 107 - - - 107
asset
investments
Royalties - 1,285 - - 1,285
receivable
Total 107 5,052 - - 5,159
non-current
assets
Current assets 12,134 3,013 1,873 (2,743) 14,277
Current - (3,007) (96) 2,743 (360)
liabilities
Non-current - (125) - - (125)
liabilities
Net assets 12,241 4,933 1,777 - 18,951
CASH FLOWS
Net cash flows 69 (5,793) 4,737 - (987)
Direct Equities include strategic investments in resource
exploration and development companies including equity and warrant
holdings. Direct Projects are mainly by way of joint venture
arrangements and include interests in precious, strategic and
energy metals, with projects located in Botswana, Thailand and
Spain. Central costs comprise those costs which cannot be allocated
directly to either operating division and include office rent,
audit fees, AIM costs and a proportion of employee and Directors'
remuneration relating to managing the business as a whole.
Year ended 31 Direct Direct Central costs Inter- Total
December Equities Projects GBP'000 company GBP'000
2017 GBP'000 GBP'000 GBP'000
Group
COMPREHENSIVE
INCOME
Net 5,457 (21) 1 - 5,437
gain/(loss)
on investments
Intercompany - 256 - (256) -
sales
Administrative (585) (3,120) (1,478) 256 (4,927)
expenses
Net (7) (132) (24) - (163)
finance
income/expense
Gain/(loss) 4,865 (3,017) (1,501) - 347
for
the year
before
taxation
Taxation (642) - 97 - (545)
Gain/(loss) 4,223 (3,017) (1,404) - (198)
for
the year
after taxation
FINANCIAL
POSITION
Intangible - 34 - - 34
assets
Property, - 31 - - 31
plant
and equipment
Deferred tax - - 97 - 97
asset
Investment in - 2,203 - - 2,203
associates
Investment - 1,224 - - 1,224
in joint
ventures
Total - 3,492 97 - 3,589
non-current
assets
Current assets 10,089 2,360 3,050 (2,110) 13,389
Current (102) (2,602) (180) 2,110 (774)
liabilities
Non-current (642) (119) - - (761)
liabilities
Net assets 9,345 3,131 2,967 - 15,443
CASH FLOWS
Net cash flows (1,045) (4,454) 6,954 - 1,455
GEOGRAPHICAL SEGMENTS
Year ended 31 December 2018
Group UK EMEA Asia- Austral-asia Americas Inter-company Total
GBP'000 GBP'000 Pacific GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
GBP
COMPREHENSIVE
INCOME
Net (2,223) 12,497 46 (10,914) (30) - (624)
(loss)/gain
on
investments
Intercompany - - 152 - - (152) -
sales
Administrative (2,820) (24) (650) (296) (9) 152 (3,647)
expenses
Net 1 23 148 139 2 - 313
finance
income/expense
(Loss)/gain (5,042) 12,496 (304) (11,071) (37) - (3,958)
for
the year
before
taxation
Taxation 545 - - - - - 545
(Loss)/gain (4,497) 12,496 (304) (11,071) (37) - (3,413)
for
the year
after
taxation
FINANCIAL
POSITION
Intangible - - 33 - - - 33
assets
Property, - - 17 - - - 17
plant
and
equipment
Investment - 1,668 - - - - 1,668
in
associates
Investment - 1,318 731 - - - 2,049
in joint
ventures
Other 107 - - - - - 107
fixed
asset
investments
Royalties - 1,285 - - - - 1,285
receivable
Total 107 4,271 781 - - - 5,159
non-current
assets
Current 3,428 - 3,472 9,902 218 (2,743) 14,277
assets
Current (130) (150) (2,817) (6) - 2,743 (360)
liabilities
Non-current (125) - - - - - (125)
liabilities
Net 3,280 4,121 1,436 9,896 218 - 18,951
assets
Year ended 31 December 2017
Group UK EMEA Asia- Austral-asia Americas Inter-company Total
GBP'000 GBP'000 Pacific GBP'000 GBP'000 GBP'000 GBP'000
GBP'000 GBP
COMPREHENSIVE
INCOME
Net 4,313 (21) - 1,145 - - 5,437
gain/(loss)
on
investments
Intercompany 256 - - - - (256) -
sales
Administrative (3,181) (118) (1,663) (221) - 256 (4,927)
expenses
Net (11) (144) 13 (21) - - (163)
finance
income/expense
Gain/(loss) 1,377 (283) (1,650) 903 - - 347
for
the year
before
taxation
Taxation (545) - - - - - (545)
Gain/(loss) 832 (283) (1,650) 903 - - (198)
for
the year
after
taxation
FINANCIAL
POSITION
Intangible - - 34 - - - 34
assets
Property, - - 31 - - - 31
plant
and
equipment
Deferred 97 - - - - - 97
tax
asset
Investment - 2,203 - - - - 2,203
in
associates
Investment - 493 731 - - - 1,224
in joint
ventures
Total 97 2,696 796 - - - 3,589
non-current
assets
Current 5,848 - 2,360 7,291 - (2,110) 13,389
assets
Current (566) (6) (2,237) (75) - 2,110 (774)
liabilities
Non-current (761) - - - - - (761)
liabilities
Net 4,618 2,690 919 7,216 - - 15,443
assets
4 SALE OF INTERESTS IN EXPLORATION OPERATIONS IN BOTSWANA
2018 2017
GBP'000 GBP'000
Equity interest acquired 4,607 -
Options acquired 10,963 -
Royalty rights acquired 1,200 -
Sale proceeds 16,770 -
Book value of net assets sold 3,294 -
Direct costs of sale 946 -
Costs attributable to sale 4,240 -
Profit on sale 12,530 -
In July 2018, the Company entered into a binding agreement to
sell its interests in certain exploration operations in Botswana,
known as the T3 Copper Project, held in a joint venture with MOD
Resources Limited of Australia ( "MOD"), through the sale of the
Company's 30% interest in Metal Capital Limited.
The sale was conditional, inter alia, on the approval of MOD's
shareholders and certain approvals from the Government of Botswana.
Those conditions were met on 16 November 2018. The sale of the
interests was achieved by the establishment of a new associated
company, Metal Capital Exploration Limited, and the transfer of the
remaining interests in the original joint venture to a subsidiary
of that company, Tshukudu Exploration Botswana (Pty) Limited. The
Group's interest in Metal Capital Limited, which then held only the
interests in the T3 Dome, was then sold to MOD Resources
Limited.
In consideration for the disposal of the T3 Copper Project,
Metal Tiger was issued with 17,090,000 shares in MOD (the
"Consideration Shares"), and 40,673,566 unquoted MOD options with a
nil exercise price and expiring on 15 November 2021 (the "Options")
and was granted a 2% smelter royalty, up to a maximum of
US$2,000,000 on production from the T3 resource when brought into
production. Following the issue of the Consideration Shares, Metal
Tiger was interested in 31,064,220 MOD shares, representing 12.5%
of MOD's then enlarged share capital. Metal Tiger is restricted
from disposing of any of the Consideration Shares, as well as any
MOD shares issued pursuant to the conversion of the Options, for a
period of 12 months from completion. The Options represent
approximately 16% of MOD's enlarged share capital (as enlarged by
the Consideration Shares). Metal Tiger may exercise the Options by
converting them into one MOD share each, provided Metal Tiger owns
equal to or less than 12.5% of MOD after completing such conversion
in order to comply with ownership limits for issued shares (if such
conversion occurs before 16 November 2021). In arriving at the fair
value of the consideration for the disposal of the T3 Copper
Project management considers the Consideration Shares and the
Options to be intrinsically equivalent and has therefore attributed
a fair value of A$0.47 to each of the Consideration Shares and the
Options. No discount has been applied to the Options because in the
opinion of the Directors any such discount which might
appropriately be applied would be immaterial. The option price is
equivalent to the valuation that would be obtained using the
Black-Scholes methodology with a nil option price.
The royalty has been valued on a discounted cash flow basis
assuming an 8% discount rate and recovery in the second half of
2021.
5 OPERATING LOSS/PROFIT
2018 2017
GBP'000 GBP'000
Loss/Profit from operations is
arrived at after charging:
Wages and salaries (see note 6) 1,481 1,120
Share based payment expense - options 708 468
Share based payment expense - warrants - 263
Amortisation of intangible assets 4 4
Depreciation 15 15
During the year the Group obtained the following
services from the Company's auditor:
2018 2017
GBP'000 GBP'000
Fees payable to the Company's
auditor for:
the audit of the Group's 45 40
financial statements
tax services 12 6
other assurance services - 140
6 EMPLOYEE AND DIRECTORS' REMUNERATION
The expense recognised for employee benefits for continuing
operations is analysed below:
2018 2017
GBP'000 GBP'000
Short term employee benefits (including Directors) 1,343 1,022
Pension costs 6 11
Social security costs 132 87
1,481 1,120
Share based remuneration 708 731
2,189 1,851
DIRECTORS' REMUNERATION
2018 2017
GBP'000 GBP'000
Remuneration 610 448
Consultancy fees 43 46
Bonuses 318 182
Pension costs 3 10
Other benefits 11 9
985 695
Share based remuneration 636 716
1,621 1,411
Social security costs 113 73
1,734 1,484
Details of Directors' employment benefits expense are as
follows:
Name Remuneration Consultancy Bonuses Pension Other Total Total
of GBP '000 fees GBP'000 costs benefits 2018 2017
Director GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Charles 50 - 25 - 1 76 47
Hall
Terry - 40 20 - - 60 36
Grammer
Michael 172 - 150 - 1 323 247
McNeilly
Mark 90 - 73 - 2 165 47
Potter
Neville 29 - - - - 29 -
Bergin
Keith 145 - 25 - 5 175 153
Springall
Alastair 124 - 25 3 2 154 127
Middleton
Geoffrey - 3 - - - 3 38
McIntyre
610 43 318 3 11 985 695
Details of share options and warrants granted to Directors
during the year are given in note 25.
Average number of persons employed during the year:
2018 2017
Number Number
Direct Projects operations 4 10
Office and management 12 10
16 20
Key management are the Directors of the Company.
7 FINANCE INCOME
2018 2017
GBP'000 GBP'000
Bank interest 1 1
Amortisation of discount on royalties 39 -
receivable (see note 4)
Foreign exchange gains 273 -
313 1
8 FINANCE COSTS
2018 2017
GBP'000 GBP'000
Bank interest - -
Foreign exchange losses - 164
- 164
9 TAXATION
2018 2017
GBP'000 GBP'000
Current tax on income for the year - -
Deferred tax 545 (545)
Total tax charge for the year 545 (545)
The tax on the Group's (loss)/profit before tax differs from the
theoretical amount that would arise using the weighted average rate
applicable to profits of the Group or Company as follows:
2018 2017
Factors affecting the tax charge GBP'000 GBP'000
(Loss)/profit before tax (3,958) 347
(Loss)/profit before tax multiplied by rate 752 (67)
of corporation tax in the UK of 19%
(2017: 19.25%)
Overseas profits/losses taxed at different rates (1) (54)
Changes in rate at which deferred tax is provided (288) 72
Income not chargeable to tax 2,415 -
Expenses not allowable for tax (288) (414)
Other permanent timing differences 3 (20)
Unprovided prior year deferred tax - 104
Tax losses carried forward (2,048) (166)
Total tax 545 (545)
Movements in deferred tax assets and liabilities during the year
and the amounts outstanding at the year end are as follows:
Assets Liabilities Net
Deferred tax asset/(liability) GBP'000 GBP'000 GBP'000
At 1 January 2017 - - -
Year ended 31 December 2017:
Share based payments 17 - 17
Direct Equities Division investments - (642) (642)
unrealised gains
Tax losses carried forward 80 - 80
Charge for the year 97 (642) (545)
At 31 December 2017 97 (642) (545)
Year ended 31 December 2018:
Credit for the year (97) 642 545
At 31 December 2018 - - -
The deferred tax assets and liabilities and the credit/charge
for the year relate to Metal Tiger plc.
No deferred tax asset or liability is provided at 31 December
2018 owing to the availability of losses carried forward and the
uncertainty of the timing of future profits. As at 31 December 2018
the Group has unprovided tax losses carried forward of
approximately GBP4,400,000 (2017: GBP2,400,000) of which
GBP2,400,000 relate to subsidiaries in Thailand and expire over the
period to 31 December 2023 (2017: GBP2,400,000 over the period to
31 December 2022).
10 PROFIT/(LOSS) ACCOUNTED FOR IN THE PARENT COMPANY
As permitted under Section 408 of the Companies Act 2006, a
Statement of Comprehensive Income for the Company is not presented
as part of these financial statements.
11 (LOSS)/EARNINGS PER SHARE
The basic earnings per share is based on the profit or loss for
the year divided by the weighted average number of shares in issue
during the year. The weighted average number of ordinary shares for
the year assumes that all shares have been included in the
computation based on the weighted average number of days since
issue.
2018 2017
GBP'000 GBP'000
Loss attributable to equity
holders of the Company:
Continuing and total operations (3,404) (180)
No of shares No of shares
Weighted average number of ordinary shares 1,199,134,506 930,169,942
in issue for basic earnings
Weighted average of exercisable n/a n/a
share options and warrants
Weighted average number of ordinary shares n/a n/a
in issue for fully diluted earnings
No share options and warrants outstanding at 31 December 2018 or
31 December 2017 were dilutive in view of the loss for the year and
all such potential ordinary shares were excluded from the weighted
average number of ordinary shares in calculating diluted earnings
per share.
2018 2017
Pence per Pence per
share share
Loss per ordinary share - basic:
Continuing and total operations (0.28p) (0.02p)
Loss per ordinary share - fully diluted:
Continuing and total operations (0.28p) (0.02p)
12 INTANGIBLE ASSETS
Group Software
GBP'000
COST
At 1 January 2017 27
Acquisitions in the year 11
At 31 December 2017 38
Translation differences 3
At 31 December 2018 41
AMORTISATION
At 1 January 2017 -
Charge for the year 4
At 31 December 2017 4
Charge for the year 4
At 31 December 2018 8
NET BOOK VALUE
At 31 December 2016 27
At 31 December 2017 34
At 31 December 2018 33
13 SUBSIDIARY UNDERTAKINGS
The following were subsidiary undertakings at the end of the
year. All subsidiaries have year ends which are coterminous with
that of the parent Company. Except where indicated all companies
are engaged in mineral exploration. Metal Tiger plc controls those
companies where its proportion of voting rights is less than 50% by
virtue of shareholder agreements.
Name Registered office Country of incorporation or registration Effective dividend rights held Type of shares held Proportion of voting rights and
ordinary share capital held
KEMCO Mining plc* 107 Cheapside England and Wales 100% Ordinary 100%
(non-trading) London
EC2V 6DN
Metal Tiger Australia Pty Limited* Level 2 Australia 100% Ordinary 100%
(non-trading) 267 St Georges Terrace
West Perth
WA 6000
Australia
Metal Tiger Exploration 75/32 Richmond Office Building Thailand 100% Ordinary 49%
and Mining Co. Ltd. 12th Floor Preference 100%
Soi Sukhumvit 26 Sukhumvit Road
Klongton
Klongtoey Bangkok, Thailand
Metal Tiger IHQ Co. Ltd.* 100% Ordinary 100%
Metal Group Co. Ltd. 99% Ordinary 49%
Metal Tiger Resources Co. Ltd. 100% Ordinary 88%
* Directly owned by the Company.
As part of a reorganisation of the Company's interests in
Thailand, Metal Holdings Co. Ltd., Metal Tiger Ventures Co. Ltd.
and Metal Tiger Resources Co. Ltd., subsidiaries of Metal Tiger
plc, were dissolved during the year. The effect attributable to the
members of the Group has been reflected in the Statement of Changes
in Equity.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS 2018 2017
Company GBP'000 GBP'000
At 1 January 536 339
Increase in capital 28 174
Share based payments - 23
At 31 December 564 536
14 INVESTMENT IN ASSOCIATES
The Group and the Company held the following interests in
associates at the end of the year:
Name Registered office Country of incorporation or registration Proportion of voting rights and ordinary share capital held Nature of business
Held directly:
Metal Capital Exploration Limited * 107 Cheapside England and Wales 30% Mineral exploration
London EC2V 6DN
Held indirectly through Metal Capital Exploration Limited:
Tshukudu Exploration Botswana (Pty) Limited Plot 64518 Fairground Botswana 30% Mineral exploration
Gaborone, Botswana
*ASX and LSE listed MOD Resources Limited owns the remaining 70%
of Metal Capital Exploration Limited.
Group and Company Cost of investment Loan advances Total
GBP'000 GBP'000 GBP'000
At 1 January 2017 45 699 744
Additions in the year 249 1,273 1,522
Share of comprehensive income 79 - 79
Translation differences - (142) (142)
At 31 December 2017 373 1,830 2,203
Additions in the year 290 2,498 2,788
Share of comprehensive losses (176) - (176)
Transfers (see note 4) 1,312 (1,312) -
Disposals (see note 4) (373) (2,921) (3,294)
Translation differences - 147 147
At 31 December 2018 1,426 242 1,668
As more fully explained in note 4, Metal Tiger sold its
interests in Metal Capital Limited during the year and acquired a
30% interest in Metal Capital Exploration Limited, which holds
those licences previously owned by Metal Capital Limited which were
not sold. The effects of the transfer of assets, the disposal of
Metal Capital Limited and the acquisition of Metal Capital
Exploration Limited are set out below.
Metal Capital Limited Cost of investment Loan advances Total
GBP'000 GBP'000 GBP'000
At 1 January 2017 45 699 744
Additions in the year 249 1,273 1,522
Share of comprehensive income 79 - 79
Translation differences - (142) (142)
At 31 December 2017 373 1,830 2,203
Additions in the year 284 2,278 2,562
Share of comprehensive losses (169) - (169)
Transfers (see note 4) (115) (1,312) (1,427)
Disposals (see note 4) (373) (2,921) (3,294)
Translation differences - 125 125
At 31 December 2018 - - -
The consolidated results and net assets of Metal Capital Limited
were as follows:
2018 2017
GBP'000 GBP'000
Revenue - -
Operating costs (200) (109)
Finance (expense)/income (362) 374
(Loss)/Profit before taxation (562) 265
Tax on loss on ordinary activities - -
(Loss)/Profit for the year (562) 265
- 2017
- GBP'000
Non-current assets - 6,478
Current assets - 365
Current liabilities - (6,675)
Net assets - 168
Metal Capital Exploration Cost of investment Loan advances Total
Limited
GBP'000 GBP'000 GBP'000
At 31 December 2017 - - -
Transfers (see note 4) 1,427 - 1,427
Additions in the year 6 220 226
Share of comprehensive (7) - (7)
losses
Translation differences - 22 22
At 31 December 2018 1,426 242 1,668
The consolidated results and net assets of Metal Capital
Exploration Limited were as follows:
2018
GBP'000
Revenue -
Operating costs (1)
Finance expense (4)
Loss before taxation (5)
Tax on loss on ordinary activities -
Loss for the year (5)
2018
GBP'000
Non-current assets 4,957
Current assets 286
Current liabilities (809)
Net assets 4,434
15 INVESTMENT IN JOINT VENTURES
The companies in which Metal Tiger's joint venture interests are
held are set out below. All are engaged in mineral exploration.
Joint venture Registered Country of incorporation Principal place of business Proportion of ownership interest and voting rights held by the Group/Company
office or
registration
31 Dec 2018 31 Dec 2017
Held directly:
Boh Yai Mining Company Ltd. 89/2 Soi Rajvithee Thailand Thailand Option to acquire 80% Option to acquire 80%
2 Rajvithee Road
Kwaeng Samsen Nai
Khet Payathai
Bangkok 10400
Kalahari Metals Limited 25-29 Maddox Street UK UK 34% * -
London W1S 2PP
Logrosán Minerals Limited 28 Fidlas Avenue UK UK 50% 50%
Cardiff CF14 0NY
Held indirectly through Logrosán Minerals Limited:
Logrosán Minera SL Calle Dr. Reiro de Sorapán 2 Spain Spain 50% 50%
10120 Logrosán Cáceres, Spain
* At 31 December 2018, Metal Tiger held an option to acquire a
further 16% of the voting rights and ordinary share capital in
Kalahari Metals Limited for US$500,000. This option was exercised
on 11 March 2019.
Group and Company Cost of investment Loan advances Total
GBP'000 GBP'000 GBP'000
At 1 January 2017 1,098 - 1,098
Additions in the year - 228 228
Share of losses (100) - (100)
Provisions - (2) (2)
At 31 December 2017 998 226 1,224
Additions in the year 859 - 859
Share of losses (33) - (33)
Translation differences - (1) (1)
At 31 December 2018 1,824 225 2,049
The fair value of investments in joint ventures at the year end
is considered by the Directors not to be materially different to
the carrying amounts.
Boh Yai Cost of investment Loan advances Total
GBP'000 GBP'000 GBP'000
At 1 January 2017 731 - 731
Additions - - -
At 31 December 2017 731 - 731
Additions - - -
At 31 December 2018 731 - 731
The Boh Yai joint venture has yet to start operations and the
above amounts represent the cost of investment to the year end. The
Group has an option to acquire 80% of the issued share capital of
Boh Yai Mining Company Ltd. and a hire purchase agreement with
Kanchanaburi Exploration and Mining Company Limited to use
equipment at the mine site in Kanchanaburi Province, Thailand.
Kalahari Metals Limited Cost of investment Loan advances Total
GBP'000 GBP'000 GBP'000
At 31 December 2017 - - -
Additions in the year 859 - 859
Share of comprehensive losses (26) - (26)
Translation differences - - -
At 31 December 2018 833 - 833
The consolidated results and net assets of Kalahari Metals
Limited were as follows:
2018
GBP'000
Revenue 19
Operating costs (88)
Finance expense (4)
Loss before taxation (73)
Tax on loss on ordinary activities -
Loss for the year (73)
2018
GBP'000
Non-current assets 653
Current assets 161
Current liabilities (18)
Net assets 796
Logrosán Minerals Limited Cost of investment Loan advances Total
GBP'000 GBP'000 GBP'000
At 1 January 2017 367 - 367
Share of losses (100) - (100)
Additions in the year - 228 228
Translation differences - (2) (2)
At 31 December 2017 267 226 493
Share of losses (7) - (7)
Translation differences - (1) (1)
At 31 December 2018 260 225 485
Metal Tiger owns 50% of Logrosán Minerals Ltd ("LML"). Metal
Tiger's joint venture partner in LML is Mineral Exploration Network
(Finland) Ltd. LML owns 100% of a subsidiary in Spain, Logrosán
Minera SL, which owns exploration licences in Logrosán, San
Cristobal and Zorita in the Extremadura autonomous region of Spain
for gold and tungsten.
The consolidated results and year end position of Logrosán
Minerals Ltd and its subsidiary were as follows:
2018 2017
GBP'000 GBP'000
Revenue - -
Operating costs (14) (200)
Loss before taxation (14) (200)
Tax on loss on ordinary activities - -
Loss and total comprehensive income for the year (14) (200)
2018 2017
GBP'000 GBP'000
Non-current assets 303 -
Current assets - 8
Current liabilities (804) (495)
Net assets (501) (487)
16 OTHER FIXED ASSET INVESTMENTS
Other non-current fixed asset investments comprise an investment
in Sita Capital Partners LLP, an asset management partnership which
is not held for short term trading and is valued under the IFRS 13
fair value hierarchy by reference to valuation techniques using
inputs that are not based on observable market data. Mr Mark
Potter, a director of the Company, is the controlling partner of
Sita Capital Partners LLP.
17 ROYALTIES RECEIVABLE
Group and Company Royalties
GBP'000
At 1 January 2017 and 31 December 2017 -
Acquisitions in the year 1,200
Amortisation of discount on acquisition 39
Translation differences 46
At 31 December 2018 1,285
Further details are given in note 4 to the financial
statements.
18 DIRECT EQUITIES DIVISION INVESTMENTS
2018 2017
Group and Group and
Company Company
GBP'000 GBP'000
At 1 January - investments at fair value 10,062 4,068
Acquisitions 18,929 5,939
Disposal proceeds (3,967) (5,402)
Gain on disposal of investments (511) 3,916
Movement in fair value of investments (12,434) 1,541
At 31 December - investments at fair value 12,079 10,062
Categorised as:
Level 1 - Quoted investments 11,360 9,342
Level 2 - Unquoted investments - -
Level 3 - Unquoted investments - equity 706 -
Level 3 - Unquoted investments 13 720
- share warrants
12,079 10,062
The table of investments sets out the fair value measurements
using the IFRS 13 fair value hierarchy. Categorisation within the
hierarchy has been determined on the basis of the lowest level of
input that is significant to the fair value measurement of th e
relevant asset as follows:
Level 1 - valued using quoted prices in active markets for
identical assets and includes the options in MOD Resources Limited
acquired as a result of the sale of the exploration operations in
Botswana for the reasons set out in note 4;
Level 2 - valued by reference to valuation techniques using
observable inputs other than quoted prices included within Level 1;
and
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data.
The maximum credit risk as regards these investments is not
considered to be materially different from the carrying value of
those investments.
LEVEL 3 FINANCIAL ASSETS
Reconciliation of Level 3 fair value
measurement of financial assets:
2018 2017
Group and Company Group and Company
GBP'000 GBP'000
At 1 January 720 1,547
Purchases 764 19
Transfer from/(to) Level 1 393 (28)
Disposal proceeds (240) -
Warrants exercised (20) (262)
Loss on disposal (272) -
of investments
Movement in fair value (626) (556)
At 31 December 719 720
Level 3 valuation techniques used by the Group are explained in
note 2 (Fair value of investments). The following key input has
been used in the valuation model: volatilities ranging between 51%
and 103% depending on the investment (2017: 43% to 107%). A 20%
increase in the volatility estimate would result in a GBP10,000
increase in the fair value (2017: GBP91,000) and a 20% decrease
would result in a GBP17,000 decrease in fair value (2017:
GBP182,000).
19 TRADE AND OTHER RECEIVABLES
2018 2018 2017 2017
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
Tax and social security 157 1 326 182
Other receivables 23 6 53 50
Prepayments and accrued income 159 95 103 10
339 102 482 242
The fair value of trade and other receivables, using the
expected credit loss model, is considered by the Directors not to
be materially different to carrying amounts. Included in other
receivables at 31 December 2017 was GBP42,000 in respect of share
capital called up but not fully paid at the year end, received in
full in 2018. Also included in other receivables at 31 December
2018 and 31 December 2017 is an amount of GBP179,000 (2017:
GBP179,000) which has been fully provided against.
20 CASH AND CASH EQUIVALENTS
2018 2018 2017 2017
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
Cash at investment brokers 55 55 27 27
Cash at bank 1,804 1,776 2,818 2,808
1,859 1,831 2,845 2,835
The fair value of cash and cash equivalents is considered by the
Directors not to be materially different to carrying amounts.
21 TRADE AND OTHER PAYABLES
2018 2018 2017 2017
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 40 40 263 260
Tax and social security 6 - 27 23
Other payables 12 11 18 15
Accrued charges 104 92 417 368
162 143 725 666
The fair value of trade and other payables is considered by the
Directors not to be materially different to carrying amounts.
22 LOANS AND BORROWINGS
2018 2018 2017 2017
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 49 - 48 -
Translation differences 3 - 1 -
At 31 December 52 - 49 -
The loan is non-interest bearing and is repayable on demand.
23 CONTINGENT CONSIDERATION
On 16 February 2016, the Company exercised its option to acquire
the remainder of the Thai based assets of SouthEast Asia Mining
Corporation ("SEAM"), comprising its investment in SouthEast Asia
Exploration and Mining Co. Ltd (now called Metal Tiger Exploration
and Mining Co. Ltd.) and certain fellow subsidiaries, to provide an
increased portfolio of base metal interests in Thailand through
joint venture interests with Boh Yai Mining Company Ltd. in
Thailand. The consideration was a cash payment of US$200,000 and a
payment of US$300,000 in 23,799,000 new ordinary shares of the
Company. A potential further cash payment of US$100,000, a
US$60,000 working capital contribution and issue of 23,799,000
warrants over the Company's ordinary shares at an exercise price of
1.74p per share may be issued to SEAM subject to the grant of the
primary target prospecting licence 1/2557 in the Kanchanaburi
province in Western Thailand.
24 SHARE CAPITAL
Number of Share Share
CALLED UP, ISSUED AND FULLY PAID ordinary shares capital premium
GBP'000 GBP'000
At 1 January 2017 774,655,180 78 1,275
Share issues 312,277,354 31 4,592
Warrant reserve release - - 644
Share issue expenses - - (386)
At 31 December 2017 1,086,932,534 109 6,125
Share issues 263,023,531 26 4,835
Warrant reserve release - - 124
Share issue expense - - (445)
At 31 December 2018 1,349,956,065 135 10,639
SHARE ISSUES
The following issues of ordinary shares of 0.01p took place
during the year:
Date Issue price Number issued Amount gross
(p) GBP'000
22 February KEMCO Mining 1.627 12,259,617 200
2018 plc warrants
converted (see
note 25)
7 August Placing 2.800 125,573,737 3,516
2018
30 August Placing 2.800 93,425,714 2,616
2018
Various Warrants 2.000 8,399,999 167
dates exercised
(see note 25)
Various Options 2.856 * 18,330,000 388
dates exercised
(see note 25)
Total 257,989,067 6,887
issued
for cash
Various For 2.157 * 5,034,464 109
dates remuneration,
professional
and other
fees
and acquisition
of investments
263,023,531 6,996
* Average price.
Details of warrants issued with the placing and further details
of warrants and options exercised during the year are given in note
25.
Details of share issues since the year end are given in note
28.
Share issues in the year ended 31 December 2017 were as
follows:
Date Issue price (p) Number issued Amount gross
GBP'000
21 April Placing 3.000 161,666,666 4,850
2017
Various Placing 1.814 * 128,096,150 2,324
dates warrants
exercised
13 October KEMCO Mining 1.950 16,174,279 315
2017 plc warrants
exercised
Various Options 1.000 3,670,000 37
dates exercised
Total 309,607,095 7,526
issued
for cash
Various For 2.338 * 2,670,259 62
dates remuneration
and
professional
and other
fees
312,277,354 7,588
*Average price.
25 SHARE OPTIONS AND WARRANTS
SHARE OPTIONS
2018 2017
Number Weighted average Number Weighted average
exercise price (p) exercise price (p)
At 1 January 104,530,000 3.57 48,700,000 2.05
Issued in year 78,000,000 4.10 59,500,000 4.66
Exercised (18,330,000) 2.12 (3,670,000) 1.00
in year
Cancelled or (4,000,000) 2.00 - -
expired
in year
At 31 December 160,200,000 4.03 104,530,000 3.57
Exercisable at 82,200,000 3.98 45,030,000 2.15
31 December
Average life 4.13 years 3.37 years
remaining at
31 December
The Company issued further shares under the existing Directors
and Staff Share Option Schemes during the year to enable Directors
and staff to subscribe for ordinary shares in the Company. The fair
values of the options granted were determined using the
Black-Scholes pricing model. The significant inputs to the model in
respect of the options were as follows:
Grant date and vesting date 21 July 2018 21 July 2018
Share price at date of grant 2.97p 2.97p
Exercise price per share 3.50p 4.50p
No. of options 31,500,000 46,500,000
Risk free rate 1% 1%
Expected volatility 88% 88%
Life of option 3 years 3 years
Calculated fair value per share option 1.952p 1.825p
The following schemes remain in existence from prior years:
Grant date and 18 January 2017 18 January 2017 11 May 2017
vesting date
Share price at 1.65p 1.65p 2.175p
date of grant
Exercise price 3.00p 2.00p 6.00p
per share
No. of options 26,000,000 500,000 33,000,000
Risk free rate 1% 1% 1%
Expected volatility 95% 95% 93%
Life of option 3 years 3 years 5 years
Calculated fair value 0.770p 0.914p 1.181p
per share option
Grant date and 3 March 2016 22 June 2016 22 June 2016
vesting date
Share price at 1.175p 3.25p 3.25p
date of grant
Exercise price 2.00p 1.70p 2.00p
per share
No. of options originally 10,000,000 7,500,000 5,750,000
granted
Risk free rate 1% 1% 1%
Expected volatility 87% 98% 98%
Life of option 3 years 3 years 3 years
Calculated fair value 0.507p 2.365p 2.275p
per share option
Options outstanding to Directors at 31 December 2018 are as
follows:
Current Directors at the year end:
Exercise At Granted Exercised At
price 1 January Number Number 31 December
(p) Number Number
Charles 3.00 3,000,000 - (3,000,000) -
Hall
3.50 - 3,000,000 - 3,000,000
4.50 - 4,500,000 - 4,500,000
6.00 5,000,000 - - 5,000,000
Terry 2.00 8,330,000 - (3,330,000) 5,000,000
Grammer
3.00 2,000,000 - - 2,000,000
3.50 - 2,000,000 - 2,000,000
4.50 - 3,000,000 - 3,000,000
6.00 2,000,000 - - 2,000,000
Michael 2.00 2,000,000 - - 2,000,000
McNeilly
3.00 7,500,000 - - 7,500,000
3.50 - 10,000,000 - 10,000,000
4.50 - 15,000,000 - 15,000,000
6.00 10,000,000 - - 10,000,000
Mark Potter 3.00 1,000,000 - - 1,000,000
3.50 - 10,000,000 - 10,000,000
4.50 - 15,000,000 - 15,000,000
6.00 4,000,000 - - 4,000,000
Neville 3.50 - 2,000,000 - 2,000,000
Bergin
4.50 - 3,000,000 - 3,000,000
44,830,000 67,500,000 (6,330,000) 106,000,000
Based on the difference between the price of the share options
and the share price on the date of exercise, the options exercised
by Directors during the year would have given rise to a gain of
GBP28,000 on exercise (2017: GBPnil).
Directors ceasing during the year in respect of their period as
Directors:
Exercise Held at 1 January 2018
price and on cessation
(p) as Director
Number
Keith Springall 2.00 2,500,000
3.00 5,000,000
6.00 5,000,000
Geoffrey McIntyre 3.00 3,000,000
6.00 2,000,000
7.50 1,750,000
Alistair Middleton 2.00 500,000
3.00 4,500,000
6.00 5,000,000
29,250,000
The total share based payment expense recognised in the income
statement for the year ended 31 December 2018 in respect of options
granted was GBP708,000 (2017: GBP468,000).
PLACING WARRANTS
2018 2017
Number Weighted average Number Weighted average
exercise price (p) exercise price
(p)
At 1 January 260,621,468 4.001 308,064,104 2.472
Issued in year 235,175,341 5.000 166,516,666 5.913
(see below)
Exercised in year (8,399,999) (2.000) (128,096,150) (1.814)
Expired in year (23,799,000) (1.740) (85,863,152) (5.899)
At 31 December 463,597,810 4.660 260,621,468 4.001
Exercisable at 463,597,810 4.660 246,158,301 3.023
31 December
Average life 2.6 years 3.2 years
remaining at
31 December
In addition, up to 4,850,000 Secondary warrants are potentially
issuable on a one for one basis to existing holders of Brokers'
warrants when the Brokers' warrants are exercised. These warrants
will have, on issue, an exercise price of 6p per share and will be
valid for a further 5 years from the date of issue. A value
attributable to these Secondary warrants was included in arriving
at the fair value of the Brokers' warrants issued on 27 April 2017
in connection with the placing on 26 April 2017.
Warrants exercised in the year included the remaining warrants
in respect of those issued by the Company on 7 March 2017 in
connection with the potential initial public offer ("IPO") for
KEMCO Mining plc intended to be the listing vehicle for the Group's
Thai operations. Following the announcement of the postponement of
the IPO on 2 February 2018, the 199,500 outstanding warrants
converted into 12,259,617 ordinary shares in the Company on 28
February 2018 equivalent to an issue price of approximately 1.63p
per ordinary share.
The warrants issued during the year were in connection with the
placings of the Company's ordinary shares as detailed in note 24
and have been charged as a component of equity. The fair values of
the warrants were determined using the Black-Scholes pricing model.
The significant inputs to the model were as follows:
Placing warrants Placing warrants For fees
Grant date 13 August 2018 30 August 2018 1 November 2018
Share price at 2.825p 2.35p 1.875p
date of grant
Exercise price 5.00p 5.00p 5.00p
per share
No. of options 128,250,067 93,425,714 13,499,560
originally
granted
Risk free rate 1% 1% 1%
Expected 80% 81% 80%
volatility
Life of option 5 years 5 years 5 years
Calculated 1.083p 0.799p 0.541p
fair value
per share option
26 FINANCIAL INSTRUMENTS
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising the return to
shareholders through the optimisation of debt and equity funding.
Currently the Company's capital structure consists entirely of
shareholders' equity, comprising issued share capital and
reserves.
The Company uses financial instruments, other than derivatives,
to provide funding for its operations.
The main risks arising from the Company's financial instruments
are credit risk, liquidity risk, market risk and foreign exchange
risk. The Company does not have any significant other risks. The
Directors agree policies for managing these risks and they are
summarised below.
CREDIT RISK
The Group's exposure to credit risk is limited to the carrying
amounts of trade and other receivables, and cash and cash
equivalents recognised at the balance sheet date, as follows:
2018 2017
GBP'000 GBP'000
Trade and other receivables 23 53
Cash and cash equivalents 1,859 2,845
1,882 2,898
The Group's management considers that all the above financial
assets that are not impaired for each of the reporting dates under
review are of good credit quality, including those that are past
due.
No impairment provision was required against trade and other
receivables in the year (2017: none). None of the Group's financial
assets are secured by collateral or other credit enhancements.
The credit risk for cash and cash equivalents is considered
negligible, since the counterparties are reputable banks with high
quality external credit ratings.
26 FINANCIAL INSTRUMENTS
LIQUIDITY RISK
The Group makes both short term and long term investments. Short
term investments are all quoted investments and such investments
may be sold to meet the Group's funding requirements. However, the
market in small capitalised companies can be illiquid. Long term
investments are joint ventures through unquoted investment vehicles
and are subject to greater liquidity risk. Directors perform
extensive due diligence prior to investment.
As the Group has no significant interest bearing assets, the
Group's income and operating cash flows are substantially
independent of changes in market interest rates.
The following table shows the contractual maturities of the
Group's financial liabilities, including repayments of both
principal and interest where applicable:
2018 2017
GBP'000 GBP'000
Six months or less:
Trade and other payables 58 308
Loans and borrowings 52 49
Total contractual cash flows 110 357
MARKET RISK
The Company is exposed to market risk as a result of investing
in listed resource companies. The fair value of each investment
will fluctuate as a result of factors specific to the investment.
The Company actively reviews its portfolio of investments to manage
this risk. An increase of 10% in the valuation of investments held
at the year end would increase the profit before tax for the year
by GBP1,208,000 (2017: GBP1,006,000).
FOREIGN CURRENCY RISK
The Group is exposed to movements in exchange rates in respect
of direct equity investments, overseas subsidiaries, investments in
joint ventures and associates, and cash held in foreign
currencies..
The following table illustrates the sensitivity of net assets to
changes in exchange rates at the year end:
CHANGE IN EQUITY 2018 2017
GBP'000 GBP'000
5% Increase in AUD fx rate against GBP 495 304
5% Decrease in AUD fx rate against GBP (495) (304)
5% Increase in BWP fx rate against GBP 74 73
5% Decrease in BWP fx rate against GBP (74) (73)
5% Increase in CAD fx rate against GBP 11 -
5% Decrease in CAD fx rate against GBP (11) -
5% Increase in EUR fx rate against GBP (30) (1)
5% Decrease in EUR fx rate against GBP 30 1
5% Increase in THB fx rate against GBP 13 (3)
5% Decrease in THB fx rate against GBP (13) 3
5% Increase in USD fx rate against GBP 111 (3)
5% Decrease in USD fx rate against GBP (111) 3
Exposure to foreign exchange rates varies during the year
depending on the volume and nature of foreign transactions.
Nonetheless, the analysis above is considered to be representative
of the Group's exposure to currency risk.
CATEGORIES OF FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
The IFRS 9 categories of financial asset included in the
Statement of Financial Position and the headings in which they are
included are as follows:
2018 2017
GBP'000 GBP'000
HELD AT AMORTISED COST
Cash and bank balances 1,859 2,845
Loans and receivables 180 379
HELD AT FAIR VALUE
Other fixed asset investments 107 -
Royalties receivable 1,285 -
Direct Equities Division current asset investments 12,079 10,062
FINANCIAL LIABILITIES HELD AT AMORTISED COST
The IFRS 9 categories of financial liabilities included in the
Statement of Financial Position and the headings in which they are
included are as follows:
2018 2017
GBP'000 GBP'000
Trade and other payables 162 725
Trade and other payables - amounts due to related companies 146 -
Loans and borrowings 52 49
27 RELATED PARTY TRANSACTIONS
GROUP AND PARENT COMPANY
A list of significant shareholders is included in the Report of
the Directors. No ultimate controlling party has been identified by
the Directors.
Details of the Directors' remuneration and consultancy fees are
disclosed in note 6 and share options granted to Directors are
disclosed in note 25. In the opinion of the Board, only the
Directors of the parent Company fall to be regarded as key
employees.
During the year the Company acquired a 10% equity interest in
Sita Capital Partners LLP, of which Mr Mark Potter is the
controlling partner, for US$150,000 (see note 16). Other than the
investment there have been no transactions with the partnership
during the year.
No amounts were owed by any Director to the Group at 31 December
2018 or 31 December 2017.
The following amounts were owed by the Group to Directors at the
year end in respect of expenses and outstanding salaries:
2018 2017
GBP'000 GBP'000
Charles Hall - -
Terry Grammer 12 14
Michael McNeilly 1 -
Mark Potter - -
Neville Bergin 3 -
PARENT COMPANY TRANSACTIONS WITH SUBSIDIARIES
The Company charged Metal Tiger Exploration and Mining Co. Ltd.
GBP157,000 (2017: GBP256,000) during the year in respect of fees
for consultancy services and for travel and similar costs incurred
in respect of their operations.
In addition, the Company has funded the operations of
subsidiaries during the year.
Amounts due to the Company at 31 December 2018 Amounts due to the Company at 31 December 2017
Subsidiary GBP'000 GBP'000
KEMCO Mining plc - -
Metal Horse Limited - -
Metal Partners Co. Ltd. - 3
Metal Tiger Exploration and Mining Co. Ltd. 1,379 1,034
Metal Tiger IHQ Co. Ltd. 1,018 789
Metal Ventures Co. Ltd. - -
Metal Group Co. Ltd. 311 222
Metal Holdings Co. Ltd. - 30
Metal Tiger Resources Co. Ltd. 35 33
Metal Tiger Australia Pty Limited - -
2,743 2,111
No amounts were due by the Company to its subsidiary companies.
Amounts due from subsidiary companies included within current
assets and current liabilities represent amounts advanced for
operational activities and repayable on demand and interest free or
for management fees and interest thereon and are repayable on
normal commercial terms.
PARENT COMPANY TRANSACTIONS WITH ASSOCIATES AND JOINT
VENTURES
Details of transactions with associates and joint ventures are
given in notes 14 and 15 respectively.
Company and Group 2018 2017
GBP'000 GBP'000
Amounts due by the Company and Group at 31 December:
Kalahari Metals Limited (146) -
The amount outstanding represented uncalled amounts relating to
the investment made during the year which has been called and paid
since the year end.
28 POST YEAR END EVENTS
On 11 February 2019 the Company announced the placing of
70,010,345 new ordinary shares at a price of 1.45p raising
approximately GBP1.0million. The participants in the Placing also
received one warrant for every two placing shares subscribed at an
exercise price of 2p and valid for a period of two years from the
date of admission of the placing shares.
On 11 March 2019, the Company announced a further placing of
137,162,552 new ordinary shares at a price of 1.45p raising
approximately GBP2.0million. The participants in the Placing also
received one warrant for every two placing shares subscribed at an
exercise price of 2p and valid for a period of two years from the
date of admission of the placing shares. In addition, a further
9,629,960 warrants were issued on the same terms to advisors for
services related to the fundraising.
On 11 March 2019, the Company exercised its option to acquire a
further 16% of the voting rights and ordinary share capital in
Kalahari Metals Limited for US$500,000 bringing its total interests
to 50%.
On 5 April 2019, the Company announced the issue of a further
384,615 new ordinary shares in lieu of cash for professional
services provided to the Company.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190530005749/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
May 31, 2019 02:00 ET (06:00 GMT)
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