TIDMURU
RNS Number : 2114O
URU Metals Limited
30 September 2019
URU Metals Limited
("URU Metals" or "the Company")
Final Results
URU Metals is pleased to announce its final results for the year
ended 31 March 2019. The full Report & Accounts are available
on the Company's website and are expected to be posted to
shareholders today.
Chairman's Statement
For the Year Ended 31 March 2019
I am pleased to present to our shareholders and stakeholders the
consolidated financial statements of the Group for the year ended
31 March 2019.
Excellent progress has been made at our flagship Zebediela
Project, and the technical team are confident in their ability to
prove up the strike length of the recently discovered Ni-Cu-PGE
mineralisation at Zebediela, and develop the project into a world
class Ni-PGE project.
The past financial year has been a fruitful year for URU, with
achievements in fulfilling investment strategies. We are now well
positioned to take advantage of potential positive movements in the
nickel market.
To view the Full Report & Accounts with the illustrative
figures and tables please use the following
link:http://www.rns-pdf.londonstockexchange.com/rns/2114O_1-2019-9-30.pdf
Jay Vieira
Non-executive Chairman
Chief Executive Officer's Report
For the Year Ended 31 March 2019
Below are the major events in the year ended 31 March 2019 and
major events after the reporting period.
Zebediela Nickel Project
Major advances have been made in the past twelve months in the
understanding of the geology of the Zebediela Project in a regional
context. The Zebediela Project is located on the Northern Limb of
the Bushveld Complex, one of the most exciting and profitable
nickel, copper and platinum group elements, (Ni-Cu-PGE) mining and
exploration areas globally. The project shares similar geology to
Anglo American Platinum's Mogalakwena Mine, the world's best PGE
mine, as well as the adjacent Ivanhoe Mines' Platreef Project,
where shaft sinking on two shafts is progressing to a depth of in
excess of 980m.
A thorough review of all data was undertaken, which included the
relogging of core from historical drillholes on the Zebediela
Project, plus the interrogation of historical reports from the area
around the Zebediela Project. This has led the technical team to
conclude that there is potentially 5 km of strike length of
Platreef related Ni-Cu-PGE mineralisation, hidden beneath a veneer
of cover rocks on the project location. The Platreef is the same
horizon that both Anglo American Platinum and Ivanhoe Mines exploit
and are aiming to exploit at their respective mines.
A comparison of the grades and basket prices of recent drilling
by URU with that of Anglo Platinum and Ivanplats, as well as that
of the operational Nkomati Nickel Mine, also located in South
Africa on the Bushveld Complex, indicates that the target Ni-Cu-PGE
is of a higher Nickel grade than that being mined at both
Mogalakwena and Nkomati mines, and, although it is lower than
Ivanplat's Platreef Project grade, it is near surface as opposed to
being in excess of 800 m deep at the Platreef Project.
The figure below shows the location of known drillholes that
intersect Platreef (Critical Zone rocks), and from this image, it
becomes clear that the potential exists for Platreef material to be
found to the west of the historically mapped outcrop of the
Platreef, shown by the red dashed line in the image below.
When these drill results listed in the table above are taken
into a regional context, it is evident that the potential for over
5 km of strike length of Platreef on the Zebediela Project exists,
at grades with a superior basket price to that being mined at
Mogalakwena mine, as well as Nkomati Nickel mine.
The geophysical surveys conducted in 2018 assisted with detailed
mapping of the geology of the area, and the target horizon, in
close proximity to the shale - hornfels contact of the Transvaal
Supergroup metasediments, has been identified.
The Department of Mineral Resources (now the Department of
Minerals and Energy) (DMRE) in December 2018 issued the renewal for
Prospecting Right LP148PR over Uitloop 3 KS, which forms the core
license of the Zebediela Project. An application in terms of
Section 102 of the Mineral and Petroleum Resources Development Act
of 2002 (the MPRDA) has been made to append licenses LP1074PR and
LP1787 to LP148PR.
An application to the DMRE for a mining right over the Zebediela
Project was made and accepted in August 2019. The mining right
application will secure the tenure of the project for 30 years once
it is granted. The basis of the Mine Works Program which
accompanies the application was made on the existing NI43-101
compliant resource, which contains an Indicated Resource of 485.4
million tonnes at 0.245% Ni and an Inferred Resource of 1,115.1
million tonnes at 0.248% Ni. The Company, however, has the right to
amend the Mine Works Program via Section 102 of the MPRDA, to
incorporate a mine plan to exploit any Ni-Cu-PGE resource that may
be defined by further planned exploration drilling.
As part of the Mining Right application process, the Company has
submitted an application for Environmental Authorisation for the
Zebediela Project and commenced with environmental impact
assessment studies and a public consultation process.
Based on recent discoveries in other geological terrains that
host similar ultramafic rocks to those found on the Zebediela
Project, the potential exists for the area to host massive
sulphides nickel deposits.
The high nickel and palladium to platinum ratio in the Platreef
mineralisation, found at shallow depths, coupled with the increase
in nickel and palladium prices over the past 12 months, make the
Zebediela Project an exciting Ni-PGE targets. The close proximity
to existing road, rail, power and mining infrastructure bode well
for the potential to develop the project into a world-class
Ni-Cu-PGE mine and URU remains committed to the responsible
development of the project.
Burgersfort Nickel Project
After a decision was taken to focus on the Zebediela Nickel
Project, the Company wrote down its 50% interest in the Burgersfort
nickel assets in South Africa.
Investment in Management Resource Solutions PLC (MRS)
On 1 March 2017 The Company acquired 7,550,000 shares of
Management Resource Solutions Plc ("MRS") from Scopn Pty Ltd.
("Scopn") at a price of GBP0.05 per share. As consideration the
Company issued to Scopn 25,166,666 new shares of the Company (each
at an implied price of GBP0.045). On 10 April 2017 the Company
subscribed for an additional 10,000,000 shares of MRS at a price of
GBP0.05 per share for total cash consideration of GBP500,000
bringing the Company's aggregate interest in MRS to 17,550,000
shares (representing 9.59% of its current issued share capital).
The Group believes operational efficiencies can be realised to
restore MRS' profitability and the potential exists for significant
revenue growth as a result of re-opening and/or expanding of mining
operations in New South Wales, coupled with the continual demand
for New South Wales coal from the Chinese, South Korean and
Japanese markets. The Board believes the investment in MRS provides
the Group with a liquid investment with potential near-term
upside.
On 5 May 2017, trading in MRS shares resumed on the AIM market
of the London Stock Exchange. The closing middle market share price
was GBP0.075 per MRS share on 27 September 2018 representing an
overall value of $1,726,780 based on 17,550,000 shares held.
On 19 September 2019, MRS announced that two of its main
subsidiaries in Australia, Bachmann Plant Hire Pty Ltd ("BPH") and
MRS Subzero Pty Ltd (trading as MRS Services Group, "MRSSG"), were
put in voluntary administration. This announcement resulted in the
suspension of the trading of MRS shares. Accordingly, the Group
impaired the investment in MRS during the year ended 31 March 2019.
Subsequently MRS announced that it's working on a finance solution
to restart the trading of its shares.
Strategy for 2019/2020
Zebediela Nickel project
Based on the improved understanding of the geology of the
Zebediela Project, the company will continue to focus its efforts
on understanding and defining the Platreef Ni-Cu-PGE
mineralisation, and apply modern sound geological principles to
developing an exploration strategy to explore for massive sulphide
nickel associated with the ultramafic rocks found on the project
area.
The Group remains committed to its strategy of acquiring mineral
assets, through:-
-- direct investments in companies with prospects with medium to
long term production potential;
-- partnership with other industry participants to develop
projects with production forecast in the near to medium term;
and
-- Investment of 100% equity in earlier stage projects with the
potential to develop world class sized mineral resources that could
be brought to market over the long term.
The Group would not rule out investing in longer term, 100%
equity projects, or in other prospective junior companies should
the right opportunity arise. However, this would be dependent on
investor appetite at the time.
The Nickel Market
Nickel is used in numerous products including, industrial,
consumer, military, transport/aerospace, marine, and stainless
steel. 78% of the world's nickel is consumed by the stainless steel
industry. Growing quite rapidly is the use of nickel in electric
vehicle batteries, although at this stage it only accounts for
about 3% of the nickel demand. With the growth in electric vehicles
expected to continue, the demand for nickel will increase too. At
this stage the main demand for nickel is still from the
stainless-steel industry to meet specific industry requirements for
heat resistance and corrosion. Nickel-containing materials are also
needed to modernize infrastructure, for industry and to meet the
material aspirations of their populations.
Overall positive trend - At the end of 2018, the average nickel
price was approximately $10,791.00 per metric ton, with the highest
nickel price recorded in 2018 at approximately $15635.00 per metric
ton. The nickel price has increased by $ 7,347.50 per metric ton or
69.29 % since the beginning of 2019, with the nickel price
currently at $ 17,952.00 per metric ton. The Group believe the
nickel price has been lifted by sustained demand growth and
decreasing supply.
Outlook - The Group has a positive outlook on the nickel market.
The nickel price reached a maximum value of $18,153.00 per metric
ton on 12 September 2019 in the World Bank Commodity Markets
Outlook Report published in April 2018, forecast was that nickel
would reach $18,000 a metric ton by 2030.
Your Management believes that our current projects have the
potential to deliver shareholder value and look forward to updating
shareholders on the development of its Nickel projects in South
Africa.
John Zorbas
Chief Executive Officer
30 September 2019
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2019
----------------------------------------------
2019 2018
$'000 $'000
-------------------------------------------------------------------- ------ --------
Administrative expenses (737) (862)
Exceptional items (note 18) (1,554) -
--------------------------------------------------------------------- ------ --------
Operating loss (2,291) (862)
Net loss for the year (2,291) (862)
--------------------------------------------------------------------- ------ --------
Other comprehensive income
Items that will be reclassified subsequently to income
Unrealised loss on financial assets at fair value through OCI (876) (334)
Effect of translation of foreign operations (350) 159
--------------------------------------------------------------------- ------ --------
Other comprehensive loss for the year (1,226) (175)
--------------------------------------------------------------------- ------ --------
Total comprehensive loss for the year (3,517) (1,037)
--------------------------------------------------------------------- ------ --------
Basic and diluted net loss per share (USD dollars) (note 8) (2.94) (1.10)
--------------------------------------------------------------------- ------ --------
The loss per share calculation relates to both continuing and
total operations.
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
Consolidated Statement of Financial Position
As at 31 March 2019
--------------------------------------------
As at As at
31 March 31 March
2019 2018
$'000 $'000
----------------------------------------------------- -------- --------
ASSETS
Non-current assets
Property, plant and equipment (note 10) 43 85
Intangible assets (note 11) 2,471 3,243
Long-term prepaid assets (note 9) 41 41
------------------------------------------------------ -------- --------
Total non-current assets 2,555 3,369
Current assets
Financial asset at fair value through OCI (note 12) - 1,676
Trade and other receivables (note 13) 64 67
Cash and cash equivalents 475 1,317
------------------------------------------------------ -------- --------
Total current assets 539 3,060
------------------------------------------------------ -------- --------
Total assets 3,094 6,429
------------------------------------------------------ -------- --------
EQUITY AND LIABILITIES
Equity
Share capital (note 14) 7,806 7,806
Share premium (note 14) 46,938 46,938
Other reserves 1,030 1,380
Accumulated deficit (53,839) (50,672)
------------------------------------------------------ -------- --------
Total equity 1,935 5,452
------------------------------------------------------ -------- --------
Current liabilities
Trade and other payables (note 16) 1,159 977
------------------------------------------------------ -------- --------
Total liabilities 1,159 977
------------------------------------------------------ -------- --------
Total equity and liabilities 3,094 6,429
------------------------------------------------------ -------- --------
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2019
------------------------------------
2019 2018
$'000 $'000
----------------------------------------------------------- ------ --------
Cash flows from operating activities
Net loss for the year (2,291) (862)
Adjustments for:
Share-based payments - 203
Depreciation 40 33
Impairment of intangible asset 868 (145)
Impairment of financial assets at fair value through OCI 686 -
Unrealised foreign exchange gain 114 -
Changes in non-cash working capital items:
Decrease/(increase) in receivables 33 (37)
Increase in trade and other payables 182 300
------------------------------------------------------------ ------ --------
Net cash used in operating activities (398) (508)
------------------------------------------------------------ ------ --------
Investing activities
Purchase of financial assets at fair value through OCI - (650)
Purchase of intangible assets (401) (406)
------------------------------------------------------------ ------ --------
Net cash used in investing activities (401) (1,056)
------------------------------------------------------------ ------ --------
Financing activities
Net proceeds from exercise of share options - 203
------------------------------------------------------------ ------ --------
Net cash generated by financing activities - 203
------------------------------------------------------------ ------ --------
Loss on exchange rate changes on cash and cash equivalents (43) -
------------------------------------------------------------ ------ --------
Net decrease in cash and cash equivalents (842) (1 ,361)
Cash and cash equivalents, beginning of year 1,317 2,678
------------------------------------------------------------ ------ --------
Cash and cash equivalents, end of year 475 1,317
------------------------------------------------------------ ------ --------
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
Consolidated Statement of Changes in Shareholders' Equity
For the Year Ended 31 March 2019
---------------------------------------------------------
Equity attributable to shareholders
Share Foreign
Option Currency
Shares and
Share Share to be Warrants Translation Accumulated
Capital Premium Issued Reserve Reserve Deficit Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
----------------- ------- ------- ------ -------- ----------- ----------- ------
At 31 March 2017 7,726 46,723 - 2,307 (1,123) (49,476) 6,157
Share-based
compensation - - - 129 - - 129
Shares issued
upon exercise
of stock options 80 123 - - - - 203
Reclassification
of fair value
of stock options
exercised - 92 - (92) - - -
Net loss and
comprehensive
loss for the year - - - - 159 (1,196) (1,037)
------------------ ------- ------- ------ -------- ----------- ----------- ------
At 31 March 2018 7,806 46,938 - 2,344 (964) (50,672) 5,452
------------------ ------- ------- ------ -------- ----------- ----------- ------
Net loss and
comprehensive
loss for the year - - - - (350) (3,167) (3,517)
------------------ ------- ------- ------ -------- ----------- ----------- ------
At 31 March 2019 7,806 46,938 - 2,344 (1,314) (53,839) 1,935
------------------ ------- ------- ------ -------- ----------- ----------- ------
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
Notes to Consolidated Financial Statements
For the Year Ended 31 March 2019
------------------------------------------
1. General information
URU Metals Limited (the "Company"), formerly known as Niger
Uranium Limited, and before that, as UraMin Niger Limited, was
incorporated in the British Virgin Islands ("BVI") on 21 May 2007.
The Company's shares were admitted to trading on AIM, a market
operated by the London Stock Exchange on 12 September 2007. The
address of the Company's registered office is Intertrust, P.O. Box
92, Road Town, Tortola, British Virgin Islands, and its principal
office is Suite 401, 4 King Street West, Toronto, Ontario, Canada,
M5H 1A1.
On 21 November, 2018, the Company resolved to re--organise the
Company's share capital by combining all of the Existing Ordinary
Shares on the basis of one new ordinary share of no par value ('New
Ordinary Share') for every 1,000 Existing Ordinary Shares, such
shares having the same rights and being subject to the same
restrictions as the Existing Ordinary Shares as set out in the
Articles of the Company ('Consolidation'). All references to common
shares, stock options and warrants have been fully retrospectively
restated to reflect the Consolidation.
The consolidated financial statements of the Group for the year
ended 31 March 2019 comprise the Company and its subsidiaries.
2. Nature of operations
During the year ended 31 March 2019, the Group's principal
business activities were the exploration and development of mineral
properties in South Africa.
The business of mining and exploring for minerals involves a
high degree of risk and there can be no assurance that planned
exploration and development programs will result in profitable
mining operations. The Group has not yet established whether its
mineral properties contain reserves that are economically
recoverable. Changes in future conditions could require material
write-downs of the carrying values of mineral properties.
The Group is in the exploration stage and is subject to the
risks and challenges similar to other companies in a comparable
stage of development. These risks include, but are not limited
to:
-- Dependence on key individuals;
-- receipt and maintenance of all required exploration permits and property titles;
-- successful development; and
-- as noted above, the ability to secure adequate financing to meet the minimum capital required
to successfully develop the Group's projects and continue as a going concern.
3. Basis of preparation
The annual consolidated financial statements of the Group have
been prepared in accordance with International Financial Reporting
Standards ("IFRS") and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations. The Group has
consistently applied the accounting policies detailed below
throughout all periods presented.
The consolidated financial statements have been prepared on a
historical cost basis convention, as modified by the revaluation of
financial assets at fair value through other comprehensive
income.
Items included in the consolidated financial statements for each
entity in the Group are measured using the currency that best
reflects the economic substance of the underlying events and
circumstances relevant to that entity (the "functional currency").
Similarly, the Group reports its results in a specified currency
(the "presentation currency"). The functional currencies of the
Company and its subsidiaries (with their abbreviation defined in
note 4) are set out in the table below:
URU Metals Limited ("URU") CAD
Niger Uranium Societe Anonyme ("NUSA") CFA
8373825 Canada Inc. ("Nueltin") CAD
Svenska Skifferoljeaktiebolaget ("SSOAB") SEK
Southern Africa Nickel Ltd. ("SAN Ltd") USD
Umnex Minerals Limpopo Pty ("UML") USD
Lesogo Platinum Uitloop Pty ("LPU") USD
All of the Company's subsidiaries were dormant in the year.
The Group's consolidated financial statements are presented in
US Dollars, rounded to the nearest thousand.
In accordance with IAS 21, Effects of Changes in Foreign
Exchange Rates ("IAS 21"), Group entities and operations whose
functional currencies differ from the presentation currency are
translated into US dollars.
-- Monetary assets and liabilities are translated at the closing rate as at the date of the statement
of financial position;
-- Income and expenses are translated at the average rate of exchange for the reporting period;
-- Equity balances are initially translated at closing exchange rates and subsequent balances
are translated at historical rates; and
-- Translation gains and losses are recognised in consolidated other comprehensive income and
are reported as such in accumulated other comprehensive income.
4. Summary of significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements.
(a) Going concern
These consolidated financial statements have been prepared based
on accounting principles applicable to a going concern, which
assume that the Group will continue in operation for the
foreseeable future and will be able to realise its assets and
discharge its liabilities in the normal course of business. As at
31 March 2019 the Group had net current liabilities of $620,000
(2018:$2,083,000 net current assets) and had not yet achieved
profitable operation and expects to incur further losses in the
development of business. The Group will therefore need further
financing to operate over the next 12 months.
Management acknowledges that uncertainty remains over the
ability of the Group to meet its funding requirements but believes
that financing will be available and continues to explore debt and
equity financing options that would provide the Group with
sufficient cash to continue with its exploration activities. In
assessing whether the going concern assumption is appropriate,
management takes into account all available information about the
future, which is at least, but is not limited to, twelve months
from the end of the reporting period. These circumstances indicate
the existence of material uncertainties that may cast significant
doubt as to the Group's ability to continue as a going concern.
There is, however, no assurance that the sources of funding
described above will be available to the Group, or that they will
be available on terms and a timely basis that are acceptable to the
Group. Accordingly, these consolidated financial statements do not
reflect the adjustments to the carrying values of assets and
liabilities, the reported expenses and the statement of financial
position classifications used that would be necessary should the
Group be unable to continue as a going concern. These adjustments
could be material.
As part of their going concern review, the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on the Going Concern Basis of Accounting
and Reporting on Solvency and Liquidity Risk" issued in April
2016.
The Directors have prepared detailed financial forecasts and
cashflows for the twelve months from the date of signing these
financial statements. In developing these forecasts, the Directors
have made assumptions based upon their view of current and future
economic conditions over the forecast period.
(b) Basis of consolidation
Subsidiaries
Subsidiaries are all entities that are controlled by the Group.
The definition of control involves three elements; power over the
investee, exposure or rights to variable returns and the ability to
use power over the investee to affect the amount of the investors'
returns. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated from
the date that control ceases.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39 either in profit or loss or other comprehensive loss.
Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted for within
equity.
Associates
Associates are entities over which the Group exercises
significant influence but does not exercise control. Investments in
associates are accounted for using the equity method of accounting
and are initially recognised at cost, which includes goodwill
identified on acquisition, net of any accumulated impairment loss.
The Group's share of its associate's profits or losses after
acquisition of its interest is recognised in profit or loss and
cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. Where the Group's share of
losses of an associate equals or exceeds the carrying amount of the
investment, the Group only recognises further losses where it has
incurred obligations or made payments on behalf of the
associate.
Financial asset at fair value through other comprehensive
income
Financial assets consist of equity investments in other
companies or limited partnerships where the Group does not exercise
either control or significant influence.
Financial assets are shown at fair value at each reporting date
with changes in fair value being shown in Other Comprehensive
Income, or at cost less any necessary provision for impairment
where a reliable estimate of fair value is not able to be
determined.
Joint arrangements, joint operations and joint ventures
A joint arrangement is a contractual arrangement in which two or
more parties have joint control. Joint control only exists when
decisions require unanimous consent of the parties sharing that
control. A joint arrangement is either a joint operation, where the
parties have rights to the assets and obligations of the operation
and thus recognise its share of the assets, liabilities, and
operations, or a joint venture, where the parties have rights to
the net assets or the obligation, and thus recognise their interest
as an investment using the equity method.
Transactions eliminated on consolidation
Intra-group balances and transactions and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.
(c) Foreign currency transactions
i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies
of Group entities at exchange rates at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies are recognised in profit
or loss.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date. Non-monetary assets
and liabilities denominated in foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in consolidated statement
of other comprehensive income.
ii) Foreign operations
The assets and liabilities of operations, including goodwill and fair value adjustments arising
on acquisition, are translated to the Group presentation currency (where different) at exchange
rates at the reporting date. The income and expenses of foreign operations are translated
to the Group presentation currency at average exchange rates, unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the rate on the dates of the transactions.
Equity balances are translated to presentation currency at historical exchange rates.
Foreign currency differences are recognised directly in other comprehensive income and such
differences have been recognised in the foreign currency translation reserve (FCTR). When
a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is
transferred to profit or loss.
Foreign exchange gains and losses arising from a monetary item receivable from or payable
to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable
future, are considered to form part of a net investment in a foreign operation and are recognised
directly in other comprehensive income in the FCTR.
(d) Property, plant and equipment
Items of property, plant and equipment are measured at
historical cost less accumulated depreciation and accumulated
impairment losses. The cost of property, plant and equipment was
determined by reference to the cost at the date of acquisition.
Historical cost includes expenditure that is directly
attributable to the acquisition of the asset. The cost of replacing
part of an item of plant and equipment is recognised in the
carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Group
and its cost can be measured reliably. The carrying amount of the
replaced part is derecognised. The costs of the day-to-day
servicing of plant and equipment are recognised in profit or loss
as incurred.
Gains and losses on disposal of an item of plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of plant and equipment, and are recognised
net within the statement of comprehensive income.
Depreciation is calculated over the depreciable amount, which is the cost of the asset, less
its residual value. If the useful lives and depreciation methods are the same for significant
parts of assets, these are not depreciated on a component basis. Depreciation methods, useful
lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful
lives of each part of an item of plant and equipment as follows:Field equipment 3 years
(e) Exploration costs and intangible assets
Exploration and evaluation costs are capitalised on a project-by-project basis, pending determination
of the technical feasibility and the commercial viability of the project. In accordance with
IFRS 6, 'Exploration for and Evaluation of Mineral Resources', the Group allocates costs incurred
to cash generating units (CGUs), which are projects, or groups of projects, which share a
consistent profile and proximity. Exploration costs are presented in intangible assets in
the Statement of Financial Position.
Capitalised costs include costs directly related to the
exploration and evaluation activities in the CGU.
General and administrative costs are allocated to the
exploration property to the extent that the costs are directly
related to activities in the relevant areas of interest. Costs
incurred before the legal rights are obtained to explore an area
and costs relating to a relinquished or abandoned licence are
recognised in profit or loss.
Exploration and evaluation assets shall be assessed for
impairment at each reporting period in accordance with IFRS 6, and
any impairment loss is recognised in profit or loss.
Once technical feasibility and commercial viability have been
established, exploration assets attributable to those projects are
tested for impairment and reclassified from exploration properties
to development properties.
Mineral property acquisition costs, and exploration and
development expenditures incurred subsequent to the determination
of the feasibility of mining operations and approval of development
by the Group, are capitalised until the property to which they
relate is placed into production, sold, allowed to lapse or
abandoned.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held
at call with banks and other short-term highly liquid investments
with original maturities of three months or less from inception
which are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value.
(g) Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
(i) Financial assets and financial liabilities
Financial assets and financial liabilities are classified into
one of three categories as summarised in the table below:
Derivative Initial Subsequent to initial URU's assets
Category status measurement recognition, held at: in the
category
Amortised cost Non--derivative Fair value Amortised cost using
Trade and other receivables
The effective interest
method
Amortised cost Non--derivative Fair value Same as above Cash and cash
equivalents
Other financial liabilities Non--derivative Fair value Same as
above Trade and other payables
Fair value through profit
Other financial liabilities Non--derivative Fair value and loss Contingent consideration
Fair value through other
comprehensive income Non--derivative Fair value Fair value
through profit Marketable securities
and loss
The classification is determined at initial recognition and
depends on the nature and the purpose of the financial asset.
Financial assets are recognised when the Group becomes a party to
the contractual provisions of the instrument.
Fianncial assets at amortised cost
A financial asset shall be classified as amortised cost if both
of the following conditions are met: (a) the financial asset is
held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows and (b) the
contractual terms of the financial asset give rise on specified
dates to cash cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Other financial liabilities
The Group initially recognises financial liabilities on the
trade date at which the Group becomes a party to the contractual
provisions of the instrument.
Financial liabilities are recognised initially at fair value
plus any directly attributable transaction costs.
Financial assets at fair value
Fair value determination
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
hierarchy establishes three levels to classify the inputs to
valuation techniques used to measure fair value. Level 1 inputs are
quoted prices (unadjusted) in active markets for identical assets
or liabilities. Level 2 inputs are quoted prices in markets that
are not active, quoted prices for similar assets or liabilities in
active markets, inputs other than quoted prices that are observable
for the asset or liability, or inputs that are derived principally
from or corroborated by observable market data or other means.
Level 3 inputs are unobservable (supported by little or no market
activity). The fair value hierarchy gives the highest priority to
Level 1 inputs and the lowest priority to Level 3 inputs. The
Company has no financial instruments carried at fair value as at 31
March 2019 other than the investment in Management Resource
Solutions Plc (MRS) which is a Level 2 financial asset at fair
value.
Financial assets at fair value through profit or loss are
financial assets held for trading. A financial asset is classified
in this category if acquired principally for the purpose of selling
in the short term, or if it is a derivative financial instrument.
Assets in this category are classified as current assets if
expected to be settled within 12 months, otherwise, they are
classified as non--current. Securities in privately held companies
are initially recorded at cost, being the fair value at the time of
acquisition. At the end of each financial reporting period, the
Company's management estimates the fair value of investments based
on the criteria below and reflects such valuation in the
consolidated financial statements. These are included in Level 1 as
disclosed in note 6.
A financial asset shall be measured at fair value through other
comprehensive income if both of the following conditions are met:
(a) the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows and
selling financial assets and (b) the contractual terms of the
financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount
outstanding.
Changes in fair values of financial assets through other
comprehensive income are presented as fair value gain or loss on
investment in the consolidated statement of comprehensive income,
and within operating activities in the statement of cash flows.
(ii) Derecognition of financial assets and financial
liabilities
A financial asset is derecognised when the contractual right to
the asset's cash flows expire or if the Group transfers the
financial asset and substantially all risks and rewards of
ownership to another entity. Any interest in transferred financial
assets that is created or retained by the Group is recognised as a
separate asset or liability.
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled or expire.
(iii) Offset
Financial assets and financial liabilities are offset and the
net amount presented in the statement of financial position only
when the Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise the asset and settle
the liability simultaneously.
(h) Impairment of assets
(i) Financial assets
Financial assets are assessed for indicators of impairment at
each reporting period end. Financial assets are impaired when there
is objective evidence that the estimated future cash flows of the
financial assets have been affected by one or more events that
occurred after the initial recognition of the financial asset.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the assets original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance
account against receivables. Interest on the impaired asset
continues to be recognised. When an event occurring after the
impairment was recognised causes the amount of impairments loss to
decrease, the decrease in impairment loss is reversed through
profit or loss.
(ii) Non-financial assets
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less cost of
disposal. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For the purpose
of impairment testing, assets are grouped together into the
smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of
other assets or groups of assets. Fair value less cost of disposal
is determined as the amount that would be obtained from the
disposal of the assets in an arm's length transaction between
knowledgeable and willing parties.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
(i) Income tax
Income tax expense comprises current and deferred tax. Income
tax expense is recognised in profit or loss except to the extent
that it relates to items recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for the following
temporary differences: the initial recognition of assets or
liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss, and
differences relating to investments in subsidiaries to the extent
that it is probable that they will not reverse in the foreseeable
future. In addition, deferred tax is not recognised for taxable
temporary differences arising on the initial recognition of
goodwill. Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted
by the reporting date. Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset current
tax liabilities and assets, and they relate to income taxes levied
by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the associated unused tax losses and deductible temporary
differences can be utilised. Deferred tax assets are reduced to the
extent that it is no longer probable that the related tax benefit
will be realised.
(j) Loss per share
The Group presents basic and diluted loss per share ("EPS") data
for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Group
by the weighted average number of ordinary shares in issue during
the period. Diluted earnings or loss per share is similar to basic
earnings or loss per share, except that the denominator is adjusted
to include the dilutive potential ordinary shares that would have
been outstanding assuming that options and warrants with an average
market price for the year greater than their exercise price are
exercised and the proceeds used to repurchase ordinary shares.
(k) Segmental reporting
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. All
operating segments' operating results are reviewed regularly by the
Group's chief operating decision maker, the CEO, to make decisions
about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is
available.
(l) Employee benefits
Pension obligations and other post-employment benefits
The Group does not offer any pension and/or post-employment
benefits to employees.
Short-term employee benefits
Short-term employee benefits obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be
paid under short-term cash bonuses if the Group has a present legal
or constructive obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be
estimated reliably.
Share-based compensation
The Group operates an equity-settled, share-based compensation
plan, The Niger Uranium Limited Share Option Plan 2008. The grant
date fair value of the employee services received in exchange for
the grant of the options is recognised as an expense with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The total
amount to be expensed over the vesting period is determined by
reference to the fair value of the options granted, excluding the
impact of any non-market vesting conditions. Non-market vesting
conditions, such as forfeiture rates, are included in assumptions
about the number of options that are expected to vest. At each
reporting date, the entity revises its estimates of the number of
options that are expected to vest. It recognises the impact of the
revision of original estimates, if any, in profit or loss, with a
corresponding adjustment to equity.
(m) New accounting standards and interpretations
During the year ended 31 March 2019 the Group adopted the
following IFRS standards:
IFRS 2 - Share--based Payment ("IFRS 2")
IFRS 2 was amended by the IASB in June 2016 to clarify the
accounting for cash--settled share--based payment transactions that
include a performance condition, the classification of share--based
payment transactions with net settlement features and the
accounting for modifications of share--based payment transactions
from cash--settled to equity--settled. On 1 April, 2018, the Group
adopted this amendment and has determined that the adoption of this
new amendment does not have a significant impact on its
consolidated financial statements.
IFRS 15 -- Revenue From Contracts With Customers ("IFRS 15")
IFRS 15 replaces IAS 18 -- Revenue, IAS 11 -- Construction
contracts, and some revenue--related interpretations. The standard
contains a single model that applies to contracts with customers
and two approaches to recognising revenue: at a point in time or
over time. The model features a contract--based five--step analysis
of transactions to determine whether, how much and when revenue is
recognised. New estimates and judgmental thresholds have been
introduced, which may affect the amount and/or timing of revenue
recognised. On 1 April 2018, the Company adopted IFRS 15 and has
determined that the adoption of this new standard does not have a
significant impact on its consolidated financial statements.
IFRS 9 Financial Instruments ("IFRS 9")
On 24 July 2014 the IASB issued the completed IFRS 9, Financial
Instruments, (IFRS 9) effective on 1 January 2018 with early
adoption permitted.
IFRS 9 includes finalised guidance on the classification and
measurement of financial assets. Under IFRS 9, financial assets are
classified and measured either at amortised cost, fair value
through other comprehensive income ("FVOCI") or fair value through
profit or loss ("FVTPL") based on the business model in which they
are held and the characteristics of their contractual cash flows.
IFRS 9 largely retains the existing requirements in IAS 39
Financial Instruments: recognition and measurement, for the
classification and measurement of financial liabilities.
The Group adopted IFRS 9 in its consolidated financial
statements on 1 April 2018. Due to the nature of its financial
instruments, the adoption of IFRS 9 had no impact on the opening
accumulated deficit balance on 1 April 2018. The impact on the
classification and measurement of its financial instruments is set
out below.
All financial assets not classified at amortised cost or FVOCI
are measured at FVTPL. On initial recognition, the Company can
irrevocably designate a financial asset at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch.
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated at FVTPL:
It is held within a business model whose objective is to hold
the financial asset to collect the contractual cash flows
associated with the financial asset instead of selling the
financial asset for a profit or loss; Its contractual terms give
rise to cash flows that are solely payments of principal and
interest.
All financial instruments are initially recognised at fair value
on the consolidated statement of financial position. Subsequent
measurement of financial instruments is based on their
classification. Financial assets and liabilities classified at
FVTPL are measured at fair value with changes in those fair values
recognised in the consolidated statement of loss and comprehensive
loss for the year. Financial assets classified at amortised cost
and financial liabilities are measured at amortised cost using the
effective interest method.
The following table summarises the classification and
measurement changes under IFRS 9 for each financial instrument:
Classification IAS 39 IFRS 9
Cash and cash equivalents Loans and receivables (amortised
cost)
Amortised cost
Trade and other receivables Loans and receivables (amortised
cost)
Amortised cost
Marketable securities Available for sale FVOCI
Accounts payable and accrued liabilities Other financial
liabilities (amortised cost)
Amortised cost
IFRS 9 Financial Instruments ("IFRS 9") (continued)
(i) The Company made an irrevocable election upon adoption of
IFRS 9 to classify the marketable securities at FVOCI, with all
subsequent changes in fair value being recognised in other
comprehensive income. FVOCI is a new measurement category with
which the cumulative changes in fair value will remain in OCI and
is not reclassified to profit or loss upon disposal of the
investment.
The original carrying value of the Company's financial
instruments under IAS 39 has not changed under IFRS 9.
The following IFRS and IFRIC Interpretations have been issued
but have not been applied by the Group in preparing these financial
statements as they are not as yet effective and in some cases had
not yet been adopted by the European Union.
The Group intends to adopt these Standards and Interpretations
when they become effective, rather than adopt them early.
-- IFRS 16, 'Leases"
-- IFRS 10 and IAS 28 (amendments), 'Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture'
-- Amendments to IFRS 2, 'Classification and Measurement of
Share--based Payment Transactions'
-- Amendments to IAS 7, 'Disclosure Initiative'
-- Amendments to IAS 12, 'Recognition of Deferred Tax Assets for Unrealised Losses'
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the Group in future
periods.
IFRS 16 is a significant change to lessee accounting and all
leases will require balance sheet recognition of a liability and a
right--of--use asset except short term leases and leases of low
value assets. The effect on the Group cannot be accurately
quantified at this stage but is expected to be immaterial on the
Group is currently not a party to any material operating leases as
lessee or lessor.
A number of IFRS and IFRIC interpretations are also currently in
issue which are not relevant for the Group's activities and which
have not therefore been adopted in preparing these consolidated
financial statements.
5. Critical Accounting Estimates and Judgements
The preparation of the consolidated financial statements in
conformity with IFRSs requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgement and make estimates and assumptions that affect the
application of the Group's accounting policies and the reported
amounts of assets, liabilities, income and expenses.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected. The Group makes estimations and assumptions concerning
the future. The resulting accounting estimates may not equal the
related actual results.
The estimates, assumptions and judgements which have a
significant risk of causing material adjustment to the carrying
amount of assets and liabilities are:
Determination of the Functional Currency
The Group comprises several entities in three different
countries; Canada, South Africa and Sweden. The statutory financial
statements of each entity, where required, are prepared using the
functional currency of the country where it is registered to do
business except where management have chosen a more appropriate
currency as the functional currency. On preparation of the
consolidated financial statements management chooses an appropriate
exchange rate to translate each of the functional currencies to the
presentational currency. The consolidated financial statements are
presented in USD. These judgements may change if future events
dictate that a more appropriate presentational currency should be
adopted.
Impairment of exploration and evaluation expenditure (intangible
assets)
At 31 March 2019 the carrying value of intangible assets of the
Group were $2,471,000 (2018: $3,243,000). The Group capitalises
expenditure relating to exploration and evaluation where it is
considered likely to be recoverable or where the activities have
not yet reached a stage that permits a reasonable assessment of the
existence of reserves. The directors have carried out an assessment
of the carrying value of exploration and evaluation expenditure and
any required impairment in accordance with the accounting policy in
note 4.
Assessment of significant influence
The Group holds 7.85% of the issued share capital of Management
Resource Solutions Plc ('MRS') which is below the 20% assumed
threshold for significant influence. However as J. Zorbas was
appointed as the Non-executive Chairman of MRS on 10 April 2017
management have reviewed the criteria detailed in IAS 28
'Investments in Associates' of potential indication of the
existence of significant influence. Management judgement is
therefore required to assess whether significant influence is
exercised over MRS in the year and have concluded that the Group
did not exercise significant influence over MRS in the year. J.
Zorbas resigned as Non-executive Chairman of MRS on 30 August
2019.
Valuation of financial assets at fair value through other
comprehensive income
The Group has adopted a policy of the revaluation of financial
assets through other comprehensive income. Management therefore
need to determine fair value and thus need to exercise judgement in
their assessment of the fair value hierarchy.
In respect of the carrying value of the shares held in MRS
management have assessed the current suspension of the company's
shares on AIM, due to two of its principal subsidiaries being
placed into administration, and the likelihood that the refinancing
will be completed and that the company's shares will be re admitted
to trading on AIM.
Share based payments
The Company has issued share options to Directors and advisors.
The Black Scholes model is used to calculate the appropriate charge
for these options. The use of this model to calculate a charge
involves a number of estimates and judgements to establish the
appropriate inputs to be entered into the model, including areas
such as the use of appropriate interest and dividend rates,
exercise restrictions and behavioural considerations. A significant
element of judgement is therefore involved in the calculation of
the charge.
Calculation and recognition of contingent consideration
The Group is exposed to potential contingent consideration from
previous acquisitions as detailed in note 11. Management exercises
judgement in assessing whether the contingent consideration should
be recognised in the consolidated financial statements.
6. Financial risk management
The Group's Board of Directors monitors and manages the
financial risks relating to the operations of the Group. These
include credit risk, liquidity risk and market risk which includes
foreign currency and interest rate risks.
Credit risk
Credit risk is the risk of loss associated with a counterparty's
inability to fulfill its payment obligations. The Group's credit
risk is primarily attributable to the Group's cash and cash
equivalents and trade and other receivables. The Group has no
allowance for impairment that might represent an estimate of
incurred losses on other receivables. The Group has cash and cash
equivalents of $475,000 (31 March 2018 -- $1,317,000), which
represent the maximum credit exposure on these assets. As at 31
March 2019, the majority of the cash and cash equivalents were held
with a major Canadian chartered bank from which management believes
the risk of loss to be minimal.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
Typically the Group tries to ensure that it has sufficient cash
on demand to meet expected operational expenses for a period of
twelve months, including the servicing of financial obligations;
this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted. Management monitors the rolling
forecasts of the Group's liquidity reserve on the basis of expected
cash flows.
The following are the contractual maturities of financial
liabilities:
6 months
Carrying Contractual 6 months to 5
amount cash flows or less years
$'000 $'000 $'000 $'000
------------------------- -------- ----------- -------- --------
31 March 2018
Trade and other payables 1,159 1,159 1,159 -
-------------------------- -------- ----------- -------- --------
31 March 2018
Trade and other payables 977 977 977 -
-------------------------- -------- ----------- -------- --------
Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's loss or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
Foreign currency rate risk
The Group, operating internationally, is exposed to currency
risk on purchases that are denominated in a currency other than the
functional currency of the Group's entities, primarily Pound
Sterling ("GBP"), the Canadian Dollar ("CAD"), the South African
Rand ("ZAR"), Swedish Krona ("SEK") and the US Dollar ("USD").
The Group does not hedge its exposure to currency risk.
In respect of other monetary assets and liabilities denominated
in foreign currencies, the Group's policy is to ensure that its net
exposure is kept to an acceptable level by buying or selling
foreign currencies at spot rates when necessary to address short
term imbalances.
The Group's exposure to foreign currency risk, based on notional
amounts, was as follows:
USD GBP SEK CAD Total
$'000 $'000 $'000 $'000 $'000
---------------------------- ----- ----- ----- ----- ------
31 March 2019
Cash and cash equivalents - 466 - 9 475
Trade and other receivables - - - 64 64
Trade and other payables - (201) (53) (905) (1,159)
----------------------------- ----- ----- ----- ----- ------
31 March 2018
Cash and cash equivalents - 1,294 - 23 1,317
Trade and other receivables - - - 67 67
Trade and other payables - (217) (58) (702) (977)
----------------------------- ----- ----- ----- ----- ------
Interest rate risk
The financial assets and liabilities of the Group are subject to
interest rate risk, based on changes in the prevailing interest
rate. The Group does not enter into interest rate swap or
derivative contracts. The primary goal of the Group's investment
strategy is to make timely investments in listed or unlisted mining
and mineral development properties to optimise shareholder value.
Where appropriate, the Group will act as an active investor and
will strive to advance corporate actions that deliver value adding
outcomes. The Group will undertake joint ventures with companies
that have the potential to realise value through mineral project
development, and invest substantially in those joint ventures to
advance asset development over the near term.
Market risks
Sensitivity analysis
A 10% strengthening of the USD against the following currencies
at the year end would have increased/(decreased) equity and profit
or loss by the amounts shown below. This was determined by
recalculating the USD balances held using a 10% greater exchange
rate to the USD. This analysis assumes that all other variables, in
particular interest rates, remain constant.
31 March 2019 31 March 2018
Equity Profit or loss Equity Profit or loss
$'000 $'000 $'000 $'000
---- ------ -------------- ------ ------------------------
GBP - (27) - (108)
CAD - 83 - 61
SEK - 6 - 6
----- ------ -------------- ------ ------------------------
7. Capital risk management
The Group includes its share capital, share premium, reserves
and accumulated deficit as capital. The Group's objective is to
maintain a flexible capital structure which optimises the costs of
capital at an acceptable risk. In light of economic changes and
with the risk characteristics of the underlying assets, the Group
manages the capital structure and makes adjustments to it. As the
Group has no cash flow from operations and in order to maintain or
adjust the capital structure, the Group may issue new shares, issue
debt and/or find a strategic partner. The Group is not subject to
externally imposed capital requirements.
The Group prepares annual expenditure budgets to facilitate the
management of its capital requirements and updates them as
necessary depending on various factors such as capital deployment
and general industry conditions. During the year ended 31 March
2019 there were no changes in the Group's approach to capital
management.
8. Earnings per Share
The calculation of basic and diluted earnings per share is based
on the result attributable to shareholders divided by the weighted
average number of ordinary shares in issue in the year.
Basic earnings per share amounts are calculated by dividing net
loss for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year.
The Company has potentially issuable shares which relate to
share options issued to directors and third parties. In the years
ended 31 March 2019 and 31 March 2018 none of the options had a
dilutive effect on the loss in the two years.
As at As at
31 March 31 March
2019 2018
$'000 $'000
-------------------------------------------------------------------------------- -------- --------
Loss used in calculating basic and diluted earnings per share ($) (2,291) (862)
Number of shares
Weighted average number of shares for the purpose of basic earnings per share 779,944 779,944
--------------------------------------------------------------------------------- -------- --------
Weighted average number of shares for the purpose of diluted earnings per share 779,944 779,944
Basic loss per share (US dollars) (2.94) (1.10)
Diluted loss per share (US dollars) (2.94) (1.10)
--------------------------------------------------------------------------------- -------- --------
9. Long-term prepaid assets
31 March 31 March
2019 2018
$'000 $'000
------------------------- -------- --------
Long-term prepaid assets 41 41
-------------------------- -------- --------
On determination that an impairment charge was required for the
Group's SSOAB Licences project, the Group identified a long-term
prepaid asset for future drilling costs that may be applied to
projects undertaken in other locations. Accordingly, the long-term
prepaid asset was transferred out of intangible assets.
10. Property, plant and equipment
Field
equipment
COST $'000
--------------------------- ---------
At 31 March 2017 119
Impact of foreign exchange 2
---------------------------- ---------
At 31 March 2018 121
Impact of foreign exchange (3)
---------------------------- ---------
At 31 March 2019 118
---------------------------- ---------
Field
equipment
ACCUMULATED DEPRECIATON $'000
--------------------------- --------------
At 31 March 2017 3
Depreciation for the year 33
---------------------------- --------------
At 31 March 2018 36
Depreciation for the year 40
Impact of foreign exchange (1)
---------------------------- --------------
At 31 March 2019 75
---------------------------- --------------
Field
equipment
CARRYING VALUE $'000
----------------- ---------
At 31 March 2018 85
At 31 March 2019 43
------------------ ---------
11. Intangible assets
Exploration costs
------------------ -----
COST $'000
------------------ -----
At 31 March 2017 4,557
Additions 406
Foreign exchange 98
------------------- -----
At 31 March 2018 5,061
Additions 401
Foreign exchange (369)
------------------- -----
At 31 March 2019 5,093
------------------- -----
ACCUMULATED AMORTISATION AND IMPAIRMENT $'000
---------------------------------------- -----
At 31 March 2017 1,761
Foreign exchange 57
----------------------------------------- -----
At 31 March 2018 1,818
Impairment (note 18) 868
Foreign exchange (64)
----------------------------------------- -----
At 31 March 2019 2,622
----------------------------------------- -----
CARRYING VALUE $'000
----------------- -----
At 31 March 2018 3,243
At 31 March 2019 2,471
------------------ -----
The Group has operated three distinct projects, SSOAB Licences,
Nueltin Licence and the South African Projects as detailed
below:
The exploration costs, amortisation and impairment detailed in
the above table are in respect of the Group's South African
Projects only. The Group's exploration costs in respect of its
SSOAB Licences project of $1,145,000 were fully impaired at 31
March 2016 and the exploration costs in respect of its Nueltin
Licence project of $153,000 were fully impaired at 31 March 2015.
The Burgersfort South African project has been fully impaired in
these consolidated financial statements. At 31 March 2019 the
carrying value is solely in relation to the Zebediela Nickel
Project described below.
SSOAB Licences
SSOAB (as defined in note 3) had 100% ownership of several
exploration licences near the town of Örebro, Sweden. The Swedish
licences are considered to be a single project, and thus to be one
CGU. During the year ended 31 March 2016, due to the continued
decline of the prices of oil and uranium, the Group decided not to
pursue the development of SSOAB properties and therefore determined
that the recoverable amount of the intangible assets under the
SSOAB properties was estimated to be $nil. The Group fully impaired
the intangible assets in the consolidated statement of financial
position for the year ended 31 March 2016. The foreign currency
reserve of SSOAB was reclassified from equity to the consolidated
statement of comprehensive income in the year ended 31 March
2017.
Nueltin Licence
Nueltin (as defined in note 3) was party to an option agreement
with Cameco Corporation ("Cameco"), the holder of a licence located
in the Nunavut Territory of Canada. Under the agreement, Nueltin
could earn 51% interest in the project from Cameco in return for
exclusively funding CDN$2.5 million in exploration expenditure by
31 December 2016. The Cameco project was considered to be one CGU.
The Group fully impaired the intangible assets in the consolidated
statement of financial position in the year ended 31 March 2015 as
the Group had no plans to pursue the project in Nunavut Territory
and thus let the option expire.
South African Projects
In November 2013, the Group acquired (i) a 100% interest in
Southern Africa Nickel Limited ("SAN Ltd.") which had been the
Group's joint venture partner since 2010 on the Zebediela Nickel
Project and (ii) a 50% interest in the Burgersfort Project. SAN Ltd
in turn had a 74% interest in a joint operation (the "SAN-Umnex
Joint Venture"). The remaining 26% was held by Umnex Mineral
Holdings Pty ("UMH"), which had title to the Zebediela licences
through its subsidiary, UML. With the Group's acquisition of SAN
Ltd., the SAN-URU joint venture was dissolved and San Ltd. obtained
ownership of the JV's 50% interest in the Burgersfort Project with
BSC Resources as the other party to the agreement. On 10 April
2014, SAN Ltd. and UMH agreed that SAN Ltd. would purchase 100% of
Umnex Minerals Limpopo Pty ("UML") from UMH for consideration of
33,194,181 new Group shares and 8,000,000 bonus shares issued to
directors and officers for their services in the acquisition of
UML.
The Burgersfort Project extends over two adjacent prospecting
rights in Burgersfort North and Burgersfort South. The Group has no
plans to pursue the project and as announced on 31 May 2019 has
fully impaired the intangible assets related to Burgersfort Project
in the amount of $868,000 in the consolidated statement of
financial position as at 31 March 2019.
The Zebediela Nickel Project extends over three separate
adjacent prospecting rights in the Limpopo Province of South
Africa. All three rights are now held by Lesogo Platinum Uitloop
Pty ("LPU"), which in turn is 100% owned by UML.
All three rights are currently compliant with minimum
expenditure obligations, annual report submissions, annual
prospecting fees, and submitted prospecting work programs.
Under the terms of the acquisition agreement, UMH is permitted
to return the shares and take back the licences should the
Group:
-- fail to maintain adequate cash funds to meet its general and project expenditure obligations,
or
-- fail to meet the purchased rights' minimum statutory expenditure obligations
As at 31 March 2019, the "general and project expenditure
obligations" and the "minimum statutory expenditure obligations" of
the general and project expenditure obligations had not been
determined.
Additionally, conditional consideration of 12,000,000
free-trading shares is payable if either 1) a transaction is
consummated by the Group to sell, farm-out, or similarly dispose of
any portion of a mineral project on some or all of the mining
titles, or 2) a mining right is obtained from the South African
Department of Mines and Resources in respect of some or all of the
rights, or 3) an effective change of control of the Group occurs.
As at 31 March 2019 none of the above conditions have occurred.
On 19 April 2017, the Group entered into a Corporate and
Management Services Agreement (the "Agreement") with UMH. As per
the Agreement, UMH shall provide to UML services including project
management, coordination of mining rights application, mineral
rights management, finance and accounting, technical,
metallurgical, engineering and geological services and corporate
finance and capital raising. In exchange of the services, UMH will
earning the following fees:
1. Once the Bankable Feasibility Study commences a monthly
retainer of ZAR150,000 until then a monthly retainer of ZAR75,000
will be paid;
2. First right of offer for technical, metallurgical,
engineering and geological services at market related pricing;
3. Capital raising and corporate finance fees of 5% of the
transaction value of capital raised through UMH sources;
4. UMH will be issued a 1.5% royalty on all revenue generated
from the Zebediela project. 1% of the royalty can be purchased back
by the Company or its successor for the amount of $2 million
provided that the Company exercises this right within 24 months of
the Mining Right being issued by the Department of Mineral
Resources of South Africa.
On 4 December 2018 the Company announced that the South African
Department of Mineral Resources had formally approved and executed
the renewal of the primary prospecting right. The right will expire
on 2 December 2021.
12. Financial assets at fair value through other comprehensive income
As at As at
31 March 31 March
2019 2018
$'000 $'000
--------------------------------------------------------- -------- --------
At 1 April 1,676 1,173
Additions - 650
Fair value adjustment through other comprehensive income (876) (334)
Impairment (note 18) (686) -
Foreign exchange (loss)/gain (114) 187
---------------------------------------------------------- -------- --------
At 31 March - 1,676
---------------------------------------------------------- -------- --------
On 1 March 2017, the Group acquired 7,550,000 shares of
Management Resource Solutions Plc ("MRS") for GBP0.15 per share by
issuance of 25,166,666 ordinary shares of the Group. The fair value
of the MRS shares was determined to be the value of the shares of
the Group issued, as MRS was a public company whose shares were not
trading at the time and the market price was not available. On 5
May 2017, the MRS shares resumed trading on the AIM market of the
London Stock Exchange.
During the year ended 31 March 2018 the Group acquired an
additional 10,000,000 ordinary shares of MRS at GBP0.05 per share.
At 31 March 2019 and 31 March 2018 the Group held 17,550,000
ordinary shares representing 9.59% of the issued share capital of
MRS. As at 31 March 2019 the investments in MRS shares were valued
at $686,000 based on share price of GBP0.03 per share.
On 4 September 2019, London Stock Exchange temporarily suspended
the trading of MRS shares as two of the company's principal
subsidiaries were placed into administration. As a result, the
Group recorded a full impairment of the MRS shares which has been
included as an exceptional item in profit and loss.
Management have assessed whether the Group exercises significant
influence over MRS in accordance with the accounting policy as per
note 4. Management have taken into consideration the criteria as
set out in IAS 28 'Investments in Associates' and have determined
that the Group did not exercise significant influence over MRS
during the year. J. Zorbas was a non-executive director of MRS
until his resignation on 30 August 2019.
13. Trade and other receivables
31 March 31 March
2019 2018
$'000 $'000
------------------ -------- --------
Other receivables 64 67
------------------- -------- --------
14. Share capital and share premium
Number of
shares Share capital Share premium Total
$'000 $'000 $'000
--------------------------------------------------- --------- ------------- ------------- -------
At 31 March 2017 772,571 7,726 46,723 54,449
Shares issued upon exercise of share options 8,000 80 123 203
Reclassification of fair value of share options
exercised - - 92 92
---------------------------------------------------- --------- ------------- ------------- -------
At 31 March 2018 and 2019 780,571 7,806 46,938 54,744
---------------------------------------------------- --------- ------------- ------------- -------
Issued shares
All issued shares are fully paid up.
Authorised: unlimited number of common shares. There are no
preferences or restrictions attached to any classes of common
shares.
During the year ended 31 March 2018 8,000 shares were issued
upon exercise of share options by J. Vieira (3,000 shares); J.
Zorbas (3,000 shares) and D. Subotic (2,000 shares), all at an
exercise price of GBP20 per share.
On 20 November 2018 the Company completed a share consolidation
by combining all of the existing ordinary shares on the basis of
one new ordinary share of no par value for 1,000 existing ordinary
shares of no par value, such shares having the same rights as the
existing ordinary shares.
Unissued shares
In terms of the BVI Business Companies Act, any unissued shares
are under the control of the Directors.
Dividends
Dividends declared and paid by the Group were $nil for the year
ended 31 March 2019 (2018 - $nil).
15. Reserves
(a) Share option and warrants reserve
The Share Option Plan is administered by the Board of Directors,
which determines individual eligibility under the plan for
optioning to each individual. Below is disclosure of the movement
of the Group's share options as well as a reconciliation of the
number and weighted average exercise price of the Group's share
options outstanding on 31 March 2019 and 31 March 2018.
The assessed fair value at grant date is determined using the
Black-Scholes Model that takes into account the exercise price, the
term of the option, the share price at grant date, the expected
price volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the
option.
During the year ended 31 March 2018 30,200 share options were
granted. The options vested on grant and 15,050 options are
exercisable at a price of GBP0.60 and 15,150 options are
exercisable at GBP90.
The inputs into the option pricing model for the 15,050 options
granted in April 2017 are as follows:
Weighted average exercise price GBP60
Expected volatility 92.88%
Expected life 5 years
Risk-free interest rate 0.91%
Expected dividends 0.0%
The inputs into the option pricing model for the 15,150 options
granted in April 2017 are as follows:
Weighted average exercise price GBP90
Expected volatility 92.88%
Expected life 5 years
Risk-free interest rate 0.91%
Expected dividends 0.0%
(i) Reconciliation of share options outstanding as at 31 March
2019:
Weighted Number of
average options Number
Exercise prices (GBP) remaining life (years) outstanding exercisable
--------------------- ---------------------- ----------- -----------
60 3.15 15,050 15,050
90 3.15 15,150 15,150
49 1.56 2,633 2,633
--------------------- ---------------------- ----------- -----------
70 3.02 32,833 32,833
--------------------- ---------------------- ----------- -----------
The share options detailed in the above table have been adjusted
to reflect the share consolidation in the year.
(ii) Continuity and exercise price
The number and weighted average exercise prices of share options
are as follows:
Weighted
average
Number exercise price
of options per share (GBP)
---------------------------- ---------- ---------------
At 31 March 2017 11,133 30
Options exercised (8,000) 34
Options expired unexercised (500) 34
Options granted 30,200 80
----------------------------- ---------- ---------------
At 31 March 2018 and 2019 32,833 70
----------------------------- ---------- ---------------
The following is a summary of the Group's warrants granted under
its Share Incentive Scheme. As at 31 March 2019 the following
warrants, issued in respect of capital raising, had been granted
but not exercised:
Number of Exercise Expiry Fair value at
Name Date granted Date vested warrants price (GBP) date grant date (GBP)
--------- --------------- --------------- --------- ----------- -------------- ----------------
Beaumont 9 October 2009 9 October 2009 100 345 9 October 2019 345
--------- --------------- --------------- --------- ----------- -------------- ----------------
(b) Foreign Currency Translation Reserve
The Foreign Currency Translation Reserve represents foreign
currency differences recognised directly in other comprehensive
income when assets and liabilities of foreign operations are
translated to the Group's presentational currency at exchange rates
at the reporting date and income and expenses are translated to the
Group's presentational currency at average exchange rates.
16. Trade and other payables
As at As at
31 March 31 March
2019 2018
$'000 $'000
--------------- -------- --------
Other payables 360 358
Accruals 799 619
---------------- -------- --------
1,159 977
--------------- -------- --------
17. Related party transactions
(a) Transactions with key management personnel
During the year ended 31 March 2019, nil (2018 -- 30,200) share
options were granted to key management personnel as defined by IAS
24 'Related party disclosures'. Key management personnel include J.
Peng, a senior employee of Marrelli Support Services Inc. (MSSI), a
company which provides financial accounting services to the Group.
The share options granted in the year ended 31 March 2018 expire on
19 April 2022.
The following share options, granted to current and past
directors and management, were outstanding as at 31 March 2019.
Number of
options Expiry
Directors/officers Exercise price (GBP) outstanding date
------------------- -------------------- ----------- -------------
Directors
J. Zorbas 60 5,000 19 April 2022
J. Zorbas 90 5,000 19 April 2022
J. Vieira 60 2,600 19 April 2022
J. Vieira 90 2,600 19 April 2022
Management
J. Peng 60 1,000 19 April 2022
J. Peng 90 1,000 19 April 2022
Former directors
D. Subotic 60 2,600 19 April 2022
D. Subotic 60 2,600 19 April 2022
H. Kloepper 60 1,000 19 April 2022
H. Kloepper 90 1,000 19 April 2022
-------------------- -------------------- ----------- -------------
(b) Directors' remuneration
Year Year
ended ended
31 March 31 March
2019 2018
$'000 $'000
------------------------------ -------- --------
Fees for services as director 32 30
Basic salary 183 187
Share-based payments - 74
------------------------------- -------- --------
Total 215 291
------------------------------- -------- --------
Included in trade and other payables in note 16 are amounts
accrued in respect of fees and salary of directors' of the Company
in the year totalling $761,000 being amounts due to J.Zorbas
($688,000,(31 March 2018:$527,000)); J Vieira ($44,000, (31 March
2018:$32,000)); K. Appleby $16,000 (31 March 2018: $nil) and H.
Kloepper ($13,000,(31 March 2018:$13,000)).
18. Loss before income tax
The following items have been charged in arriving at the loss
before income tax for the year:
Year ended Year ended
31 March 31 March
2019 2018
$'000 $'000
----------------------------- ---------- ----------
Auditors' remuneration 87 40
Directors' fees 32 31
Share-based payment charge 37 128
Operating lease charges 17 16
Depreciation 40 33
Exceptional items 1,554 -
Foreign exchange loss/(gain) 120 (220)
------------------------------ ---------- ----------
The exceptional items in the year relate to the impairment of
the shares in MRS of $686,000 (note 12) which have been fully
impaired at the year end, and the impairment of the Group's 50%
interest in the Burgersfort project of $868,000 which has also been
fully impaired at the year end (note 11).
19. Income tax expense and deferred taxation
The Group is incorporated in the British Virgin Islands (BVI).
The BVI Business Companies Act imposes no corporate or capital
gains taxes and the Group's losses will also not result in an
income tax recovery in the BVI. However, the Group may be liable
for taxes in the jurisdictions where it operates or develops mining
properties.
Effective 13 July 2012, the Group became resident in Canada, and
is subject to income taxes at a combined federal and provincial
statutory tax rate of 26.5% (2018 - 26.5%).
Income tax expense from the amount that would be computed by
applying the Canadian federal and provincial statutory income tax
rates to the loss for the year is as follows:
2019 2018
$'000 $'000
---------------------------------- ------ -----
Loss for the year before taxation (2,291) (862)
Expected income tax recovery (607) (228)
Benefit of losses not recognised 607 228
----------------------------------- ------ -----
A deferred tax asset has not been recognised in respect of the
losses because there is insufficient evidence of the timing of
future taxable profits against which it can be recovered.
The significant components of the Group's unrecognised
deductible temporary differences as at 31 March 2019 and 2018 are
as follows:
2019 2018
$'000 $'000
--------------------- ------- -------
Loss carry-forward 13,696 11,338
Share issuance costs 164 232
Other 982 982
---------------------- ------- -------
20. Segmental information
(a) Reportable segments
The Group has two reportable segments, as described below, which
are the Group's strategic business units. Both are determined by
the CEO, the Group's chief operating decision-maker, and have not
changed in the year. The strategic business units offer different
services, and are managed separately because they require different
strategies.
The following summary describes the operations in each of the
Group's reportable segments:
Exploration Includes obtaining licences and exploring these licence areas.
Corporate Office Includes all Group administration and procurement
There are no other operations that meet any of the quantitative
thresholds for determining reportable segments during the years
ended 31 March 2019 or 31 March 2018.
There are varying levels of integration between the Exploration
and Corporate Office reportable segments. This integration includes
shared administration and procurement services.
Information regarding the results of each reportable segment is
included below. Performance is measured based on segmented results.
Any inter--segment transactions would be determined on an arm's
length basis. Inter--segment pricing for the periods ended 31 March
2019 and 2018 consisted of funding advanced from Corporate Office
to Exploration.
(b) Operating segments
Exploration Corporate office Total
2019 2018 2019 2018 2019 2018
$'000 $'000 $'000 $'000 $'000 $'000
----------------------------------- ----- ----- --------- ------ ------ -----
Depreciation (40) (33) - - (40) (33)
Reportable segment loss before tax (908) (33) (1,383) (829) (2,291) (862)
------------------------------------ ----- ----- --------- ------ ------ -----
Exploration Corporate office Total
As at 31 March 2019 2018 2019 2018 2019 2018
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------- ----- ----- --------- ------ ------ -----
Reportable segment assets 2,509 3,396 585 3,033 3,094 6,429
Reportable segment liabilities (11) (10) (1,148) (967) (1,159) (977)
-------------------------------- ----- ----- --------- ------ ------ -----
(c) Geographical segments
During the years ended 31 March 2019 and 31 March 2018, business
activities took place in Canada and South Africa. In presenting
information based on the geographical segments, segment assets are
based on the physical location of the assets.
The following table presents segmented information on the
Group's operations and loss for the year ended 31 March 2019 and
assets and liabilities as at 31 March 2019:
Canada Sweden South Africa Total
$'000 $'000 $'000 $'000
------------------- ------ ------ ------------ ------
Net loss (1,383) - (908) (2,291)
Total assets 566 - 2,528 3,094
Non-current assets 43 - 2,512 2,555
Liabilities (1,148) (11) - (1,159)
-------------------- ------ ------ ------------ ------
The following table presents segmented information on the
Group's operations and loss for the year ended 31 March 2018 and
assets and liabilities as at 31 March 2018:
Canada Sweden South Africa Total
$'000 $'000 $'000 $'000
------------------- ------ ------ ------------ -----
Net loss (829) - (33) (862)
Total assets 3,033 - 3,396 6,429
Non-current assets 85 - 3,284 3,369
Liabilities (967) (10) - (977)
-------------------- ------ ------ ------------ -----
21. Contingent liabilities
The Group is subject to the conditional consideration in respect
of the acquisition of UML as detailed in note 11.
22. Subsequent event
On 4 September 2019 the London Stock Exchange temporarily
suspended the trading of MRS shares as two of the company's
principal subsidiaries were placed into administration. As a
result, the Group recorded an impairment of MRS shares which has
been included as an exceptional item in profit and loss.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
For further information, please contact:
URU Metals Limited
John Zorbas
(Chief Executive Officer) +1 416 504 3978
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker)
Ewan Leggat + 44 (0) 203 470 0470
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKKDDPBKDCCN
(END) Dow Jones Newswires
September 30, 2019 11:42 ET (15:42 GMT)
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