going concern25 Sep 2018 09:05
from previous RNS....
The Group operates as a natural resources exploration and development group. To date, the Group has not earned significant revenues and is considered to be in the exploration stage.
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On 12 February 2018, the Group entered into a US$10 million convertible loan facility with Cuart Investments PCC and YA II PN Ltd ('the investors'). Under the agreement, the Group received a US$4 million advance and will receive further advances of US$2 million payable within 121 days and up to US$4million payable within 240 days after the initial advance, subject to the meeting of project advancement and market trading milestones. Each advance is fully repayable in 12 monthly instalments and the Group can elect to make monthly repayments of interest and principal in accordance with repayment schedule. Should the Group not make the repayments, the investors can elect to convert the amounts into shares or receive full repayment at the end of the 12 month period.
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At the date of the approval of this report, the Group had not met the required milestones for receipt of the next advance of US$2 million. The Directors are currently in discussions with the investors to amend the terms to allow drawdown of the remaining amounts under the convertible loan facility however, the outcome of these discussions and the timing of the additional funding is uncertain.
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The Directors have reviewed the Group's cash flow forecast for the period to 31 December 2019 and plan to continue advancing the project to DFS stage in 2018-2019. Should funds not be forthcoming in a reasonable timescale the expenditure plans could be adapted to prolong current cash resources. However, should the revised terms not be agreed and the repayment of the US$4 million initially advance is required, additional funds will be needed within twelve months from the date of the approval of these financial statements.
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Based on the on-going discussions with various interested parties, the Directors are confident that alternative funding could be secured should the revised terms of the convertible loan not be agreed. Accordingly, the Directors continue to adopt the going concern basis for the preparation of these financial statements.
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At the date of the approval of these financial statements, an amended convertible loan facility has not been agreed and there is no legally binding agreement in place relating to alternative funding. There can be no certainty that further advances or other funds will be forthcoming in the required timescale which indicates the existence of a material uncertainty which may cast doubt over the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
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