ALO.L Regulatory News (ALO)

Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: Exploration & Development

12 May 2015

Alecto Minerals plc ('Alecto' or the 'Company')

Final Results for the year ended 31 December 2014

and Notice of AGM

Alecto Minerals plc (AIM: ALO), the AIM quoted mineral exploration company focussed on West and East Africa, is pleased to announce its audited final results for the year ended 31 December 2014. In addition, the Company's Annual General Meeting ('AGM') will be held at the Washington Mayfair Hotel, 5 Curzon Street, London W1J 5HE, on Wednesday, 3 June 2015 at 11.00 a.m. The Company's Annual Report and Financial Statements and Notice of AGM will be posted to shareholders today and will shortly be available to view and download on the Company's website at www.alectominerals.com.

Highlights:

· Demonstrated ability to create value via strategic acquisitions followed by low cost exploration

· Over-arching strategy to become a gold producer in Africa with relevant project and partnership opportunities continually being identified and evaluated

· Completion of a successful field season across the Kossanto East Gold Project ('Kossanto East') and the Kossanto West Gold Project ('Kossanto West') in Mali

· 131% increase to the pre-existing independent JORC inferred resource estimate for Kossanto East

· Discovery of multiple high grade gold targets at Kossanto West

· Low cost all share acquisition of the Kerboulé Gold Project ('Kerboulé') in Burkina Faso

· Independent assessment of in situ mineralisation (non-JORC) completed post acquisition: 6.2Mt grading at 1.16g/t Au for 230,758 oz Au, at a cut-off grade of 0.5g/t Au

· Subject to completion in due course of a JORC Mineral Resource estimate for Kerboulé, the Company has the potential to approximately double its existing independent JORC inferred resource estimate when combining it with the inferred JORC resource estimate for Kossanto East of 247,000 oz Au at an average grade of 1.14g/t Au

Alecto's CEO, Mark Jones, commented:

"The progress made during 2014 was pleasing having significantly increased our resource base across our portfolio at a low cost, both through exploration and acquisition initiatives. We have a vision to establish Alecto as a gold producer and continue to identify and evaluate appropriate additional projects in this vein whilst seeking joint venture partners to advance our current portfolio. We have decided to minimise expenditure on additional drilling across our portfolio until this objective is achieved and whilst recent developments in relation to Centamin at our Ethiopian acreage were unfortunate, our focus remains on seeking to advance our projects through establishing joint venture opportunities or early monetisation as appropriate. I am pleased that our financial position was strengthened via the fundraise successful completed in January 2015 and I look positively to the year ahead."

For further information, please visit www.alectominerals.com or contact:

Chairman's Statement

As a gold and base metal exploration and development company focussed on West and East Africa, Alecto has demonstrated its ability to create value via a combination of strategic acquisitions and low cost exploration.

Our strategy remains focussed on establishing joint venture opportunities for the advancement of our projects or early monetisation of opportunities, as we believe our current portfolio consists of a number of attractive assets and accordingly, we have decided to minimise drilling expenditure as we evaluate such opportunities. This renewed focus will allow us to seek to create value across our current portfolio without incurring further non-essential expenditure. In addition, our over-arching strategy continues to be that of becoming a gold producer in Africa in the near term and we continue to identify and evaluate a number of appropriate projects.

Key Project Developments

In 2014, our exploration efforts were focused on seeking to expand our knowledge of and to increase our resource base across Alecto's portfolio.

At our 100% owned Kossanto East, following completion of the 2013/2014 field season, we were particularly pleased to have been able to increase the pre-existing independent JORC inferred resource estimate for the project by 131% at an average direct cost of approximately US$4.70 per ounce. Accordingly, the JORC inferred resource for Kossanto East is now 6.72Mt at an average grade of 1.14g/t Au, representing 247,000 oz Au at a 0.5g/t Au cut-off. In line with our strategy, post the period end we signed a co-operation agreement with Desert Gold Ventures Inc., a TSX.V quoted mineral exploration company and titleholder of the Farabantourou Gold Permit which is situated adjacent to Kossanto East, with a view to jointly developing both deposits to bring them into potential future production.

Following the acquisition of Kerboulé in Burkina Faso in November 2014, for an initial consideration of £350,000 settled through the issue of new ordinary shares, we proceeded to undertake an analysis of the historic drilling results for the project. Post the period end, we announced that Wardell Armstrong International ('WAI') had compiled an independent assessment of the in situ mineralisation (non-JORC) of 6.2Mt grading at 1.16g/t Au for 230,758 oz Au, at a cut-off grade of 0.5g/t Au. This (non-JORC) resource estimate was based on the results obtained from modelling historical drilling work conducted by the previous owners of the project and implies an initial acquisition cost to Alecto for Kerboulé, prior to any deferred consideration, of approximately US$2.25 per resource ounce of gold.

Accordingly, subject to completion of a JORC Mineral Resource estimate for Kerboulé in due course, the Company has the potential to approximately double its existing independent JORC inferred resource estimate when combining it with the inferred JORC resource estimate of 247,000 oz Au at an average grade of 1.14g/t Au for Kossanto East.

During 2014, we also discovered multiple high grade gold targets at our wholly owned Kossanto West. Significant high-grade intercepts were encountered from 761 metres of scout RAB drilling, completed across 38 holes, on the Toukwatou prospect within the Massakama target. Intercepts from the drill programme included 6 metres @ 4.23 g/t Au from 9 metres depth on hole TRABL01/1, 12 metres @ 3.34 g/t Au from 6 metres depth on hole TRABL05/3 and 6 metres @7.835 g/t Au from 24 metres depth on hole TRABL06/8. The mineralisation encountered is associated with an intensely quartz veined felsic intrusive. Encouragingly, we have attracted interest from a number of possible joint venture partners for this asset.

In February 2015, it was disappointing to report that Centamin plc ('Centamin') had served formal notice to terminate its earn-in joint venture agreement in respect of our promising Ethiopian properties; the Wayu Boda and Aysid Metekel licences. Centamin's investment was insufficient to trigger any equity rights, Alecto therefore continue to hold 100% ownership. We continue to believe in the prospectivity of the blocks and are actively seeking a new partner to continue the planned exploration programmes.

The Company continues to seek a joint venture partner for its Wad Amour iron, oxide, copper, gold project in Mauritania following the renewal of its permits in August 2014.

Financial Review

The loss before taxation for the Group for the year ended 31 December 2014 amounted to £962,148 (31 December 2013: £1,242,540). The Group's cash position as at 31 December 2014 was £114,258 (2013: £624,155).

During the period, we announced that the equity swap agreement between ourselves and YA Global Master SPV Ltd ('Yorkville') had been terminated by mutual consent. No further payments are due between Yorkville and the Company and Yorkville remains interested in 33,875,003 ordinary shares.

In January 2015, we successfully raised a further £600,000 (before expenses) by way of placing, via the Company's broker, of 200 million new ordinary shares at 0.3 pence per share. The net proceeds augmented our working capital and are enabling us to progress discussions with potential joint venture partners for the advancement or early monetisation of opportunities across our gold portfolio.

Outlook

In response to the depressed gold market, management has taken steps to reduce the Group's monthly burn rate and thus preserve the optionality of our current portfolio. Whist it has been a challenging year in respect of the gold price performance and operating constraints in the countries in which we do business, your Board is confident that the current 'exploration drought' will come to an end and the potential value of our assets will once again be reflected in the Company's share price.

The Board also continues to seek to identify and evaluate potential attractive opportunities to expand the Company's asset base and thereby exploit the currently depressed sector valuations, including working towards securing a more advanced stage project that can potentially be funded through to near term production.

I would like to take this opportunity to thank shareholders for their support in these difficult times and our management team for their hard work on shareholders' behalf.

Mark Wellesley-Wood

Chairman

11 May 2015

STATEMENT OF FINANCIAL POSITION

As at 31 December 2014

The Financial Statements were approved and authorised for issue by the Board on 11 May 2015 and were signed on its behalf by:

Mark Jones

Chief Executive Officer

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended December 2014

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2014

CASH FLOW STATEMENTS

For the year ended 31 December 2014

Major non-cash transactions

On 23 January 2014, the Company issued 7,000,000 options valid for three years from, and exercisable six months after, the date of grant at an exercise price of 1.58 pence.

On 30 January 2014, the Company issued 79,113,924 new ordinary shares of 0.01 pence each fully paid ("Ordinary Shares") at a price of 1.58 pence per share as deferred consideration for a business acquisition made in a prior period.

On 24 February 2014, the Company issued the following warrants to advisers as consideration for services provided to the Company:

· 3,000,000 warrants exercisable for 2.7 years from the date of grant at an exercise price of 1 pence each;

· 5,000,000 warrants exercisable for 3 years from the date of grant at an exercise price of 1.5 pence each; and

· 7,730,327 warrants exercisable for 5 years from the date of grant at an exercise price of 1.925 pence each.

On 28 March 2014, the Company issued 20,000,000 new Ordinary Shares at a price of 1.25 pence per share as consideration for business acquisitions. See Note 26.

On 23 July 2014, the Company issued 32,045,742 new Ordinary Shares on conversion of a convertible loan note and associated interest.

On 16 November 2014 the Company issued 54,996,857 new Ordinary Shares at 0.6364 pence per share as consideration for a business acquisition. See Note 26.

On 24 November 2014 the Company issued a further 4,714,016 Ordinary Shares at 0.6364 pence per share as payments to a consultant in lieu of cash fees.

On 16 December 2014 the Company issued 2,777,143 new Ordinary Shares at 0.63 pence per share as payment to a consultant of the Company in lieu of cash fees.

1. General information

The principal activity of Alecto Minerals plc ("the Company") and its subsidiaries (together "the Group") is the exploration and development of precious and base metals. The Company's shares are quoted on the AIM market of the London Stock Exchange plc. The Company is incorporated and domiciled in the UK.

The address of its registered office is 47 Charles Street, London, W1J 5EL.

2. Summary of Significant Accounting Policies

The principal Accounting Policies applied in the preparation of these Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1. Basis of Preparation of Financial Statements

The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. The Consolidated Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets at fair value through profit or loss.

The Financial Statements are presented in UK Pounds Sterling rounded to the nearest pound.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 4.

2.2. Basis of Consolidation

The Consolidated Financial Statements consolidate the Financial Statements of the Company and the audited management accounts of all of its subsidiary undertakings made up to 31 December 2014.

Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

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 as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the identifiable net assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss in the Income Statement.

Investments in subsidiaries are accounted for at cost less impairment.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All intercompany transactions and balances between Group enterprises are eliminated on consolidation.

2.3. Going Concern

The Group's business activities together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement on pages 3 to 4. In addition, Note 3 to the Financial Statements include the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and its exposure to credit and liquidity risk.

The Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating steady revenue streams, an operating loss has been reported and an operating loss is expected in the 12 months subsequent to the date of these financial statements, the Directors believe, having considered all available information including cash flows prepared by management, that the Group, having raised £600,000 (gross) in January 2015, has sufficient funds to meet its expected committed and contractual expenditure through to the end of 2015, and are confident that they will be able to raise additional funding to provide additional working capital to continue its current exploration programme as well as additional works.

Based on the Board's assessment that the cash flow budgets can be achieved and that the necessary funds will be raised, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements for the year ended 31 December 2014.

Should the Group be unable to continue trading, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities which might arise and to classify fixed assets as current.

The Financial Statements do not include any adjustments that may be required should the Group be unable to continue as a going concern. If the Group were unable to continue as a going concern, then adjustments would be necessary to write assets down to their recoverable amounts, non-current assets and liabilities would be reclassified as current assets and liabilities and provisions would be required for any costs associated with closure.

Going concern is referred to in the auditor's report starting on page 12 as an emphasis of matter.

2.4. New and Amended Standards

(a) New and amended standards and interpretations issued

A number of new standards and amendments to standards and interpretations are effective for the financial year beginning on or after 1 January 2014 and have been applied in preparing these Financial Statements.

IFRS 10, 'Consolidated financial statements', builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess.

IAS 27, 'Separate Financial Statements', replaces the current version of IAS 27, 'Consolidated and Separate Financial Statements' as a result of the issue of IFRS 10. The revised standard includes the requirements relating to separate financial statements. 

Amendments to IAS 36, 'Impairment of Assets', require additional information about the fair value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposal. The amendments also incorporate the requirement to disclose the discount rate used in determining impairment (or reversals) where recoverable amount (based on fair value less costs of disposal) is determined using a present value technique.

All other new standards and amendments to standards and interpretations effective for the financial year beginning on or after 1 January 2014 are not material to the Group and Company and therefore not applied in preparing these financial statements.

(b) New and amended standards and interpretations issued but not yet effective for the financial year beginning on or after 1 January 2014 and not early adopted

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Financial Statements are listed below. The Company and Group intend to adopt these standards, if applicable, when they become effective. Unless stated below, there are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

* Subject to EU endorsement

The Group is evaluating the impact of the new or amended standards above. The new or amended standards are not expected to have a material impact on the Group's results or shareholders' funds.

2.5. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

2.6. Foreign Currencies

(a) Functional and presentation currency

Items included in the Financial Statements of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the UK parent entity is Pounds Sterling and the functional currency of the BVI subsidiary is US Dollars. The currency of Mauritania is the Mauritanian Ouguiya; however all material contracts with the Mauritanian subsidiary are denominated in Euros which is, therefore, its functional currency. The currency of Ethiopia is the Ethiopian Birr, which is therefore the functional currency of the Ethiopian subsidiaries. The currency of Mali is the Central African Franc, which is therefore the functional currency of the Malian subsidiary. The currency of Burkina Faso is the Central African Franc, which is therefore the functional currency of the Burkina Faso subsidiary. The Financial Statements are presented in Pounds Sterling, rounded to the nearest pound, which is the Company's functional and Group's presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within 'finance income or costs'. All other foreign exchange gains and losses are presented in the income statement within 'Other (losses)/gains - net'.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets measured at fair value, such as equities classified as available for sale, are included in other comprehensive income.

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position sheet;

· income and expenses for each Income Statement are translated 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 dates of the transactions); and

· all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Statement of Comprehensive Income as part of the gain or loss on sale.

2.7. Intangible assets

(a) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group's interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.

(b) Exploration and evaluation

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Exploration and evaluation assets are recorded and held at cost.

Exploration and evaluation assets are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas.

Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.

2.8. Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the Income Statement during the financial period in which they are incurred.

Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates:

Field equipment - 20% straight line

Motor vehicles - 20% straight line

Computer equipment - 20-50% straight line

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Income Statement.

2.9. Impairment of non-financial assets

Intangible assets that have an indefinite useful life, for example, exploration and evaluation intangible assets not ready to use, are not subject to amortisation and are tested annually for impairment.

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.10. Financial Assets

Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss; loans and receivables; and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value 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. Derivatives are also categorised as held for trading unless they are designated as hedges.

Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise, they are classified as non-current.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the Statement of Financial Position date. These are classified as non-current assets. The Group's loans and receivables comprise trade and other receivables, restricted assets and cash and cash equivalents in the Statement of Financial Position.

(iii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period.

Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Group commits to purchasing or selling the asset. Financial assets carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the Income Statement. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership.

Available-for-sale financial assets are subsequently carried at fair value unless the Group is precluded from doing so as, in the case of unlisted equity securities, the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. In such circumstances available-for-sale financial assets are held at cost and reviewed annually for impairment.

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the Income Statement within 'Other (Losses)/Gains - Net' in the period in which they arise.

Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the Income Statement as "gains and losses from investment securities."

Interest on available-for-sale securities calculated using the effective interest method is recognised in the Statement of Comprehensive Income as part of other income. Dividends on available-for-sale equity instruments are recognised in the Income Statement as part of other income when the Group's right to receive payments is established.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event"), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

· significant financial difficulty of the issuer or obligor;

· a breach of contract, such as a default or delinquency in interest or principal repayments;

· the disappearance of an active market for that financial asset because of financial difficulties;

· observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio; or

· for assets classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost.

(i) Assets carried at amortised cost

The amount of impairment is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced, and the loss is recognised in the Income Statement. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the Income Statement.

(ii) Assets classified as available-for-sale

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired.

The cumulative impairment loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the Income Statement - is removed from equity and recognised in the Income Statement.

For equity investments, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement.

2.11. Trade and Other Receivables

Trade and other receivables are amounts due from third parties in the ordinary course of business. If collection is expected in one year or less they are classified as current assets. If not they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.12. Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value.

2.13. Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and in hand, and are subject to an insignificant risk of changes in value.

2.14. Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.15. Share Based Payments

The Group operates a number of equity-settled, share-based schemes, under which the entity receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:

· including any market performance conditions;

· excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

· including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

2.16. Trade Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

2.17. Taxation

There has been no tax credit or expense for the period relating to current or deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax assets and liabilities are not discounted.

2.18. Operating leases

Leases of assets under which a significant amount of the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are charged to the income statement on a straight-line basis over the period of the respective leases.

2.19. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods or services supplied in course of ordinary business, stated net of discounts, returns and value added taxes. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for the Group's activities described below.

Revenue is recognised in respect of amounts recharged to project strategic partners in accordance to their contractual terms.

2.20. Finance income

Interest income is recognised using the effective interest method.

2.21. Borrowings

Compound Financial Instruments

Compound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at the option of the holder. The number of shares to be issued does not vary with changes in their fair value.

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to their initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequent to initial recognition, except on conversion or expiry.

3. Financial Risk Management

3.1. Financial Risk Factors

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and price risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the London based management team under policies approved by the Board of Directors.

Market Risk

(a) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Central African Franc, Ethiopian Birr, Mauritanian Ouguiya and the Pound Sterling. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group negotiates all material contracts for activities in relation to its subsidiaries in either Pounds Sterling or Euros which in the Directors' opinion are more stable than the respective local currencies. The Group also holds minimal liquid assets in Central African Franc, Mauritanian Ouguiya and Ethiopian Birr. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts. The Group has not sensitised the figures for fluctuations in foreign exchange rates as the Directors are of the opinion that these fluctuations would not have a significant impact on the financial statements of the Group at the present time. The Directors will continue to assess the effect of movements in exchange rates on the Group's financial operations and initiate suitable risk management measures where necessary.

(b) Price risk

The Group is exposed to equity securities price risk because of investments held by the Group as available-for-sale and fair value through the profit or loss.

The Group's investments in equity of other entities that are publicly traded are quoted on AIM. There is a limited volume of shares traded in the Group's investee and if the Group was to dispose of a significant percentage of its shares this could have a substantial impact on the realisable value of these shares.

The Group does not have a substantial portfolio of shares and manages its price risk by undertaking specific company research prior to investing. The Group's quoted equity investment is held for long term growth which the Directors believe mitigates the risk of crystallising short term speculative reductions in value.

The table below summarises the impact of increases/decreases in the AIM index on the Group's other comprehensive income for the year. The analysis is based on the assumption that the AIM index had increased/decreased by 10% with all other variables held constant and all the Group's quoted equity investments moved according to the historical correlation with the index.

Other comprehensive income would increase/decrease as a result of gains/losses on listed equity securities classified as available-for-sale. Post tax losses would increase/decrease as a result of the utilisation of tax losses arising from the movement in fair value of listed equity securities classified as available-for-sale.

(c) Interest rate risk

As the Group has no borrowings other than compound financial instruments, it is not exposed to interest rate risk on financial liabilities. The Group's interest rate risk arises from its cash held on short-term deposit, which is not significant.

Credit Risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables.

The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

Liquidity Risk

In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Directors are confident that adequate funding will be forthcoming with which to finance operations (see Note 2.3). Controls over expenditure are carefully managed.

3.2. Capital Risk Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.

At 31 December 2014 the Group had borrowings of £nil (2013: £350,000) and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.

3.3. Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

· Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

· Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2); and

· Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table presents the Group's assets that are measured at fair value. The Group does not have any liabilities measured at fair value.

(i) Financial instruments in Level 1

The fair value of financial instruments traded in an active market is based on quoted market prices at the Statement of Financial Position date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise AIM quoted equity investments classified as available-for-for sale financial assets.

(ii) Financial instruments in Level 2

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available, and rely as little possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Specific valuation techniques used to value financial instruments include:

· quoted market prices or dealer quotes for similar instruments; and

· the fair value of derivative financial instrument is calculated based on the Company's quoted market price and a prescribed formula in accordance with the respective equity swap agreement.

4. Critical Accounting Estimates and Judgements

The preparation of the Financial Statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant items subject to such estimates and assumptions include, but are not limited to:

Estimated Impairment of Goodwill

Goodwill has a carrying value of £423,785 (2013: £383,057). The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.7 to the Financial Statements.

Management has concluded that no impairment charge is necessary to the carrying value of goodwill. See Note 7 to the Financial Statements.

Impairment of exploration and evaluation costs

Exploration and evaluation costs have a carrying value at 31 December 2014 of £7,217,039 (2013: £5,581,135). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 2.7 to the Financial Statements. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the year warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration. The Directors have reviewed the estimated value of each project prepared by management and have concluded that no impairment would be required and provided against the exploration assets.

Share based payment transactions

The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received.

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 17 to the Financial Statements.

Fair value of derivative financial instruments

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The fair value of the equity swaps is calculated using the prescribed formula in the equity swap agreement and the Company's prevailing market price at the year end.

The Equity swaps have been fully satisfied during the year. They have no carrying value at the year end (2013: £250,000). The other income amount, representing the gain on re-measuring to fair value was deemed immaterial and therefore not recognised in the Income Statement.

Available-for-sale financial assets

Available-for-sale financial assets have a carrying value at 31 December 2014 of £14,400 (2013: £21,000). The Group holds listed equity securities as available-for-sale financial assets.

The Group follows the guidance of IAS 39 to determine when an available-for-sale equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow.

Management has concluded that there is no impairment charge necessary to the carrying value of available-for-sale financial assets.

Compound financial instruments

In order to calculate the split for convertible loans between the financial liability and equity components, management is required to discount the contractual stream of future cash flows under the convertible loan note instrument at an estimated rate of interest applicable to instruments which do not have any associated conversion option.

The values of the liability and equity conversion component were determined at the date the loan notes were issued. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible loan. The residual amount, representing the value of the equity conversion option was deemed immaterial and therefore not included in shareholders' equity.

Contingent consideration

As part of the acquisition of Gazelle Resources Inc, the Group has entered into a contractual arrangement with Swala Resources Inc ('Swala'), in which, under certain milestones being reached, would result in the Group paying further consideration of $1.5m. For full details on the arrangement, please see Note 27.

The Directors have reviewed the progress of the project and consider reaching the milestones unlikely. Given this, the Directors have assessed the fair value of the contingent consideration to be nil; it is unlikely that the Company will have any additional liability arising.

5. Segment Information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the year the Group had interests in five geographical segments; the United Kingdom, Mauritania, Ethiopia, Burkina Faso and Mali. Activities in the UK are mainly administrative in nature whilst the activities in Ethiopia, Mauritania, Burkina Faso and Mali relate to exploration and evaluation work.

A reconciliation of adjusted loss from operations per reportable segment to loss before tax is provided as follows:

6. Property, Plant and Equipment

Depreciation expense of £69,945 (2013: £27,403) has been charged in administration expenses (Note 18).

7. Intangible Assets

Exploration and evaluation assets are all internally generated.

Exploration projects in Burkina Faso, Mali, Ethiopia and Mauritania are at an early stage of development and, with the exception of the JORC Code compliant inferred resource estimate of 247,000 oz Au for the Kossanto Project in Mali as at 31 December 2014, no JORC or non-JORC compliant resource estimates were available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:

• The Group's right to explore in an area has expired, or will expire in the near future without renewal;

• No further exploration or evaluation is planned or budgeted for;

• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; and

• Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

An impairment review of exploration and evaluation assets is carried on out an annual basis in order to ensure that it is valued at the lower of cost and recoverable amount. Following their assessment, the Directors concluded that no impairment charge was necessary at the year end. This included the Group's two gold exploration licences in Mauritania for which no significant exploration activity has been conducted over the past two years.

8. Investments in Subsidiary Undertakings

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

Details of Subsidiary Undertakings

9. Available-for-Sale Financial Assets

All available-for-sale financial assets are UK listed equity securities denominated in Pounds Sterling.

Losses of £6,600 (2013: £29,000) were due to a change in fair value.

10. Trade and Other Receivables

Trade and other receivables are all due within one year. The fair value of all receivables is the same as their carrying values stated above.

The Group has provided bank guarantees as security for the minimum spend requirements on the Mauritanian exploration licences. The guarantees are not released until the end of the licence period. The balance held via bank guarantee at 31 December 2014 is £21,601 (31 December 2013: £20,192) and is included within restricted assets.

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security. At 31 December 2014 all trade and other receivables were fully performing.

11. Derivative Financial Instruments

Derivative financial instruments of £250,000 in 2013 related to amounts receivable pursuant to an equity swap agreement. On 16 December 2014 the equity swap agreement was terminated and settled, resulting in a net loss to the Company for the period of £180,542.

12. Cash and Cash Equivalents

All of the Company's cash at bank is held with institutions with an AA credit rating.

13. Trade and Other Payables

Trade payables include amounts due of £5,019 (2013: £13,771) in relation to exploration and evaluation activities.

14. Borrowings

On 4 October 2013, the Company issued 350,000 convertible loan notes at a par value of £1 per loan note accruing interest daily at a rate of 7% per annum. On 23 July 2014, the loan notes and accrued interest of £18,526 were converted into 32,045,742 new Ordinary Shares in the Company.

15. Deferred tax

An analysis of deferred tax liabilities is set out below.

The gross movement on the deferred tax account is as follows:

The movement in the deferred tax liability during the year is as follows:

The Group has additional capital losses of approximately £440,000 (2013: £440,000) and other losses of approximately £5,126,000 (2013: £4,293,000) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.

16. Share Capital

Group and Company

(1) Includes issue costs of £60,000

(2) Includes an implementation fee of £50,000

(3) Includes issue costs of £98,380

On 8 January 2014 at a General Meeting of the Company shareholders approved a share capital reorganisation to sub-divide and re-designate each of the issued ordinary shares of 0.7 pence in the capital of the Company into sixty-nine deferred shares of 0.01 pence each and one Ordinary Share of 0.01 pence each.

On 17 January 2014 the Company raised £1,500,000 (gross) through the issue of 100,000,000 new Ordinary Shares of 0.01 pence each fully paid ('Ordinary Shares') at a price of 1.5 pence per share.

On 30 January 2014, the Company issued 79,113,924 new Ordinary Shares at a price of 1.58 pence per share as deferred consideration for a business acquisition made in a prior period.

On 28 March 2014, the Company issued 20,000,000 new Ordinary Shares at a price of 1.25 pence per share as consideration for business acquisitions.

On 23 July 2014, the Company issued 32,045,742 new Ordinary Shares on conversion of the convertible loan note and associated interest.

On 16 November 2014 the Company issued 54,996,857 new Ordinary Shares at 0.6364 pence per share as consideration for business acquisitions. See Note 26.

On 24 November 2014 the Company issued a further 4,714,016 Ordinary Shares at 0.6364 pence per share as payments to a consultant in lieu of cash fees.

On 16 December 2014 the Company issued 2,777,143 new Ordinary Shares at 0.63 pence per share as payment to a consultant of the Company in lieu of cash fees.

17. Share Based Payments

Share options and warrants outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:

The Company and Group have no legal or constructive obligation to settle or repurchase the options in cash.

The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below:

The expected volatility is based on historical volatility for the six months prior to the date of granting. The risk free rate of return is based on zero yield government bonds for a term consistent with the option life.

A reconciliation of options and warrants granted is shown below:

No options or warrants were exercised during the period. The total fair value has resulted in a charge to the Income Statement for the year ended 31 December 2014 of £42,337 (2013: £7,148) and a charge to Share Premium of £23,380 (2013: £nil).

18. Expenses by Nature

During the year the Group (including its overseas subsidiaries) obtained the following services from the Company's auditors and its associates:

19. Directors' Remuneration

(1) Resigned 20 June 2013.

(2) Appointed 2 October 2013.

(3) Resigned 4 April 2013.

(4) Appointed 4 April 2013. Resigned 30 September 2014.

(5) Resigned 8 July 2014.

(6) Appointed 8 July 2014.

(7) Appointed 30 September 2014.

The Directors of the Company are considered to be key management personnel.

No pension benefits are provided for any Director.

Of the above Directors' remuneration costs, £51,480 (2013: £43,500) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.

Included in Directors' Remuneration is £nil (2013: £25,525) relating to termination benefits.

20. Employees

The average monthly number of employees during the year was 21 (2013: 5).

Of the above staff costs, £255,978 (2013: £143,262) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.

21. Other Net Losses

22. Finance Income

23. Income Tax

No income tax charge to the Income Statement arises due to the losses incurred. No deferred tax asset has been recognised on accumulated tax losses, as the recoverability of any assets is not likely in the foreseeable future.

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follows:

The tax charge relating to components of other comprehensive income is as follows:

No deferred tax asset was recognised on the fair value loss attributable to the available-for-sale financial asset as this was deemed immaterial.

24. Earnings per Share

The calculation of earnings per share of (0.120) pence (2013: (0.306) pence) is calculated by dividing the loss attributable to shareholders of £962,148 (2013: £1,242,540) by the weighted average number of Ordinary Shares of 801,201,925 (2013: 406,179,049) in issue during the period.

In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of share options would be to decrease the earnings per share. Details of share options that could potentially dilute earnings per share in future periods are set out in Note 17.

The Company is committed to the issuance of ordinary shares to a consultant should certain conditions be met in future periods. The issuance of these Ordinary Shares could potentially dilute earnings per share. Further details of this arrangement are set out in Note 28.

25. Financial Instruments by Category

26. Business Combinations

NewMines Holdings Limited

On 28 March 2014, the Group acquired 100% of the share capital of NewMines Holdings Limited ('NewMines') for £250,000. NewMines is registered in Nevis and via its wholly owned subsidiary Tobon Tondo S.U.A.R.L. holds 250 sq. km. of gold exploration licences in western Mali. As a result of this acquisition the Group is expected to increase its presence in this market and commodity.

The goodwill of £9,182 arising from the acquisition is attributable to the expected upside potential of developing the licence areas through further exploration. None of the goodwill is expected to be deductible for tax purposes.