Arc Minerals Regulatory News (ARCM)

16 September 2016

ORTAC RESOURCES LTD

("Ortac" or the "Company")

Final Results

The Board of Ortac Resources Ltd, the AIM listed exploration and development company focussed on natural resource projects, announces its Final Results for the year ended 31 March 2016.

Highlights

· A pre-tax loss of £853,000 (2015: £1.33m) and a loss per share of 0.02 pence (2015: 0.05 pence), in line with expectations and reflecting further cost rationalisation implemented during the year; 

· Issued a further 2,906,000,000 ordinary shares of no par value between April 2015 and March 2016 at prices of 0.085, 0.050 and 0.025 pence per share for a total cash consideration of £1,350,000 before share issue costs;

· Discussions with potential partners continue at the Šturec project in Slovakia, where it has been scientifically proven that 873koz of gold can be mined at a relatively low cost;;

· Andiamo continues to develop its licenses in Eritrea in partnership with EEA with a further VMS discovery confirmed at Hoba being the highlight for the period. Exploration programme for the winter 2016-2017 currently being planned;

· In Zambia, Zamsort continue to progress their processing plant and have started working on their highly prospective exploration area;

· Investment into CASA Mining Ltd who hold the mining license to the Misisi project in the South Kivu Province of the DRC. Current resource of over 1.2Moz @ 1.7 g/t Au with a scoping study completed showing good economics for a 100,000oz per annum operation. 

Anthony Balme, Chairman at Ortac, commented: "Your company has positioned itself well to benefit from a recovery in the mining sector. We now have a low cost structure and whilst we will need to raise further finance over the next 12 months, which could be by the issue of new equity or the sale of an asset, we believe that we are well positioned to grow fro here. Our diversified portfolio of projects continue to develop positively and we anticipate further progress over the coming year, developments at a project level together with greater enthusiasm for mining stocks will hopefully be reflected in the Company's share price going forward."

ENDS

For further enquiries:

CHAIRMAN'S STATEMENT AND OPERATIONS AND FINANCE REVIEW

Chairman's Statement

Despite the continued challenging market conditions faced by junior exploration and development companies over the last five years and in particular this last period, your Company has continued to progress with its current portfolio of projects and has added a new exciting opportunity to the portfolio of investments in this period.

In Slovakia, whilst discussions with potential local partners and supporters continue, the emphasis has been to continue to secure our rights over the 873 koz Au Eq. reserve that we believe and the technical studies to date have demonstrated a potential low cost operation when measured against its peers.

In Eritrea, Andiamo Exploration Limited ("Andiamo"), in co-operation with its Joint Venture partner, Envirominerals East Africa Ltd ("EEA), confirmed the Volcanogenic Massive Sulphide ("VMS") occurrence at the Hoba prospect, which is located along the same trend and approximately 15km to the south of Nevsun Mining's new Ashelli VMS discovery. At Yacob Dewar, Andiamo released its maiden JORC resource estimate for gold and copper, which provides a solid platform from which to explore and develop further resources in the southern part of the license area. Following the end of the reporting period, Andiamo has begun discussions in relation to a merger of interests with EEA, which has earned a 50% interest in the northern area of the Andiamo Licence by expenditure of $2.3M. EEA has a strong shareholder base which could provide support to further funding in Andiamo to finance future exploration.

In Zambia, we are pleased with the progress Zamsort has made against the backdrop of a dull copper market. They are on the cusp of getting their commercial scale demonstration plant operational which is anticipated to produce copper, cement and cobalt hydroxide cake. At the same time they continue to maintain interest from some of the larger copper players in their highly prospective exploration tenement located in the domes region in the western part of the copper belt.

Following the end of the reporting period, the Company exercised its right and issued a request to Zamsort Limited ('Zamsort') to convert the Secured Convertible Loan Notes and the No.2 Loan Notes into 19.35% of the issued share capital of Zamsort. Zamsort has advised the Company that they may wish to make changes to their share capital structure in order to facilitate further funding. Ortac has advised Zamsort that it would be cooperative should a reorganisation be of benefit to the financing of Zamsort, and in the best interests of Ortac.

Towards the end of the period, the Company announced its strategic investment into CASA Mining Limited ("CASA"), which holds the rights to three contiguous mining licenses totalling 133km2 located in the South Kivu province in the eastern Congo gold belt of the Democratic Republic of Congo ("DRC"). CASA has an initial inferred resource of 1.2 Moz @1.7 g/t Au at its Akyanga Deposit, which is still open ended along strike and down dip and has had a scoping study completed on it that demonstrates the potential viability of a 100,000oz gold per year operation. Post the end of the period CASA provided an update to shareholders on an initial smaller operation requiring a substantially lesser amount of upfront capital. Additionally, it provided a resource update that demonstrated the potential for its project to host a resource well in excess of 2 million ounces.

On a more general note we are pleased to see a turn in the gold market towards the end of our financial year and to see its price increase by c. 25% from its low point of $1,058 per oz in December 2015. We believe the outlook for the precious metal is positive and that it can continue to increase. Copper, the other metal of note that we have a stake in, has been less buoyant but we believe it has probably seen its low point at $4,500 per ton.

On the matter of staff we have continued to reduce our head count. We should thank Hugo Green for his sterling efforts for the Company as CFO and we hope to continue to consult with him from time to time at his base in Bratislava. Owen Mihalop was also a great support for the Company in his role as Technical Director and we continue to call on his assistance as a consultant to the Company.

Chuck Forrest has now taken on the role of interim CFO and we would like to welcome him to the team.

Financial & Corporate Overview

During the year ended 31 March 2016 the Company issued the following shares for consideration of £1,350,000:

(i) On 1 July 2015, 705,882,353 ordinary shares of no par value were issued at a price of 0.085 pence per share for a cash consideration of £600,000 before share issue costs; 

(ii) On 21 October 2015, 800,000,000 ordinary shares of no par value were issued at a price of 0.050 pence per share for a cash consideration of £400,000 before share issue costs; 

(iii) On 8 March 2016, 1,400,000,000 ordinary shares of no par value were issued at a price of 0.025 pence per share for a cash consideration of £350,000 before share issue costs. 

During the year ended 31 March 2016, the Directors acquired a further 233.0 million shares in the Company (2015: 98.8 million) with their holdings now representing 8.44% (2015: 9.76%) of the issued share capital of Ortac.

In line with expectations and reflecting cost cutting measures, we report a loss of £ 0.853m (2015: loss of £1.333m) and a loss per share of 0.02 pence (2015: 0.05 pence).  

As at 31 August 2016, the Group held £140,000 in cash. As a result, the Company will need to raise money either through the additional issue of shares or through the sale of assets.

Outlook

Even though market conditions have improved in 2016, the Company will continue to run a tight ship in Slovakia and expects the companies it has invested in to do the same.

Having completed the rationalisation of the business in Slovakia, the turn in the gold market has created positive interest from parties in the vicinity of Slovakia which it is hoped will develop into a constructive partnership.

With respect to the investments in Andiamo, Zamsort and CASA, the Company expects this recent turn in optimism, particularly in the gold space, to enable these respective companies to obtain further investment and continue progressing with their projects. 

Anthony Balme

Chairman

[15] September 2016

FINANCIAL STATEMENTS

Group Statement of Comprehensive Income for the year ended 31 March 2016

Company Statement of Comprehensive Income for the year ended 31 March 2016

Group Statement of Financial Position as at 31 March 2016

These financial statements were approved by the Board of Directors on 15 September 2016 and signed on its behalf by:

Company Statement of Financial Position as at 31 March 2016

These financial statements were approved by the Board of Directors on 15 September 2016 and signed on its behalf by:

Group Statement of Cash Flows for the Year ended 31 March 2016

There were no material non-cash items.

Company Statement of Cash Flows for the Year Ended 31 March 2016

Group Statement of Changes in Equity for the year ended 31 March 2016

Share capital: This represents the nominal value of equity shares in issue and is nil as the shares have a nil par value.

Share premium: This represents the premium paid above the nominal value of shares in issue.

Foreign exchange reserve: This reserve represents exchange differences arising from the translation of the financial statements of foreign subsidiaries and the retranslation of monetary items forming part of the net investment in those subsidiaries.

Share-based payments reserve: This represents the value of share-based payments provided to employees and Directors as part of their remuneration and provided to consultants and advisors hired from time to time as part of the consideration paid. The reserve represents the fair value of options and performance share rights recognised as an expense. Upon exercise of options or performance share rights, any proceeds received are credited to share capital and share premium.

Retained earnings: This represents the accumulated profits and losses since inception of the business and adjustments relating to options and warrants.

Company Statement of Changes in Equity for the year ended 31 March 2016

Share capital: This represents the nominal value of equity shares in issue and is nil as the shares have a nil par value.

Share premium: This represents the premium paid above the nominal value of shares in issue.

Share-based payments reserve: This represents the value of share-based payments provided to employees and Directors as part of their remuneration and provided to consultants and advisors hired from time to time as part of the consideration paid. The reserve represents the fair value of options and performance share rights recognised as an expense. Upon exercise of options or performance share rights, any proceeds received are credited to share capital and share premium.

Retained earnings: This represents the accumulated profits and losses since inception of the business and adjustments relating to options and warrants.

NOTES TO THE FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

a. General Information and Authorisation of Financial Statements

The Company is registered in the British Virgin Islands under the BVI Business Companies Act 2004 with registered number 1396532. The Company's ordinary shares are traded on the AIM Market operated by the London Stock Exchange.

The principal activity of the Company during the year was that of a holding company for a group engaged in the identification, evaluation, acquisition and development of natural resource projects.

The Group Financial Statements of Ortac Resources Limited for the year ended 31 March 2016 were authorised for issue by the Board on 15 September 2016 and the Balance Sheets were signed on the Board's behalf by Mr. Anthony Balme and Mr. Vassilios Carellas.

b. Statement of Compliance with IFRS and new standards, amendments and interpretations adopted during the year

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 Group and Company 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.

Standard Effective Date

IAS 1 (Amendments) Presentation of Financial Statements: Disclosure Initiative 1 January 2016

IAS 7 (Amendments) Results of the Disclosure Initiative *1 January 2017

IAS 12 (Amendments) Recognition of Deferred tax assets for Unrealised Losses *1 January 2017

IAS 16 (Amendments) Clarification of Acceptable methods of Depreciation and 1 January 2016

Amortisation

IAS 27 (Amendments) Separate Financial Statements *1 January 2016

IAS 28 (Amendments) Investment Entities: Applying the Consolidation Exception *1 January 2016

IFRS 2 (Amendments) Clarification of Measurement of Share Based *1 January 2018

Payment Transactions

IFRS 9 (Amendments) Financial Instruments *1 January 2018

IFRS 10 (Amendments) Investment Entities: Applying the Consolidation Exception *1 January 2016

IFRS 12 (Amendments) Investment Entities: Applying the Consolidation Exception *1 January 2016

IFRS 15 Revenue from Contracts with Customers *1 January 2018

IFRS 16 Leases 1 January 2019

Annual Improvements 2012 - 2014 Cycle *1 January 2016

*Subject to EU endorsement

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group or the Company.

Whilst the Directors do not anticipate the adoption of these standards and interpretation in future reporting periods will have a material impact on the Group's or Company's financial statements, they have yet to complete their full assessment in relation to the impact of IFRS 9 and IFRS 15.

No additional standards were adopted by the Group or the Company during the year.

c. Basis of Preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) as adopted by the European Union. 

The consolidated financial statements have been prepared on the historical convention, as modified by the measurement to fair value of available-for-sale financial assets as described in the accounting policies below. 

The financial information is presented in Pounds Sterling (£) and all values are rounded to the nearest thousand Pounds Sterling (£000's) unless otherwise stated. 

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied unless otherwise stated. 

d. Basis of Consolidation

The consolidated financial statements consolidate the financial statements of Ortac Resources Limited and the audited financial statements of its subsidiary undertakings made up to 31 March 2016.

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 de-consolidated from the date that control ceases.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

e. Associates

Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The Group's investment in associates includes any goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group's share of post-acquisition profit or loss is recognised in the statement of comprehensive income, and its share of post-acquisition movements is recognised in the other comprehensive income section of the statement of comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. 

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amounts of the associate and its carrying value and recognises the amount adjacent to 'share of profit/loss of associate' in the group statement of comprehensive income. 

Gains and losses resulting from upstream and downstream transactions between the group and its associates are recognised in the Group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. 

Impairment gains and losses arising in investments in associates are recognised in the statement of comprehensive income. 

f. 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; in addition note 22 to the financial statements includes 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. The Group's assets are not generating revenues, an operating loss has been reported and an operating loss is expected in the 12 months subsequent to the date of these financial statements and as a result the Company will need to raise funding to provide additional working capital to finance their ongoing activities and non-discretionary expenditures.

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 has access to 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 March 2016.

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. 

Going concern is referred to in the auditor's report as an emphasis of matter without any modification of their opinion. 

g. Business combinations

The acquisition of subsidiaries in a business combination is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 "Non Current Assets Held for Sale and Discontinued Operations", which are recognised and measured at fair value less costs to sell. 

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of noncontrolling 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.

Any interest of non-controlling interests in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised. There are no non- controlling shareholders of subsidiaries.

h. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Board, being the Group's chief operating decision-maker ("CODM").

i. Contingent consideration

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. 

j. Foreign currencies

The Group and Company's functional and presentational currency is Pounds Sterling. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. At present the functional currency of all of the Slovakian subsidiaries is the Euro. 

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· monetary assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

· income and expenses for each statement of comprehensive income presented are translated at average exchange rates during the accounting year; and

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

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 cumulative exchange differences are subsequently reclassified in the income statement as part of the gain or loss on sale.

k. Taxation

Tax is recognised in the Statement of Comprehensive Income, 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 Company 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. 

There has been no tax credit or expense for the year relating to current or deferred tax.

l. Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets, liabilities and contingent liabilities of the acquired subsidiary at the date of acquisition. Goodwill arising on the acquisition of subsidiaries is included in 'intangible assets'. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. 

Exploration and evaluation assets

Exploration and development costs are carried forward in respect of areas of interest where the consolidated entity's rights to tenure are current and where these costs are expected to be recouped through successful development and exploration, or by sale. Alternatively, these costs are carried forward while active and significant operations are continuing in relation to the areas of interest and it is too early to make reasonable assessment of the existence or otherwise of economically recoverable reserves. When the area of interest is abandoned, exploration and evaluation costs previously capitalised are impaired. 

In accordance with the full cost method, costs incurred by the Company on behalf of its subsidiaries and associated with mining development and investment are capitalised on a project-by-project basis pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If a mining development project is successful, the related expenditures will be written-off over the estimated life (useful economic life) of the commercial ore reserves on a unit of production basis. Impairment reviews are carried out regularly by the Directors of the Company. Where a project is abandoned, or is considered to be of no further commercial value, the related costs will be written off to the Statement of Comprehensive Income. 

The recoverability of deferred mining costs and mining interests is dependent upon the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposal of recoverable reserves. 

m. Significant accounting judgements, estimates and assumptions

Critical Accounting Estimates and Judgements

The preparation of financial statements using accounting policies consistent with IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of income and expenses. The preparation of financial statements also requires the Directors to exercise judgement in the process of applying the accounting policies. Changes in estimates, assumptions and judgements can have a significant impact on the financial statements.

Critical accounting estimates and judgements

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively from the period in which the estimates are revised. The following are the key estimate and assumption uncertainties that have a significant risk of resulting in a material adjustment within the next financial year:

i) Impairment of Intangible assets

Exploration and evaluation costs have a carrying value at 31 March 2016 of £12,347,000 (2015: £11,418,000). Management tests annually whether exploration projects have future economic value in accordance with the accounting policy stated in note u. below. Each exploration project is subject to an annual review. When there are indications that an asset may be impaired, the Group is required to estimate the asset's recoverable amount. Recoverable amount is the greater of value in use and fair value less costs to sell. 

Determining the value in use requires the Group to estimate expected future cash flows associated with the asset and a suitable discount rate in order to calculate present value. If this proves to be incorrect and the project does not have any value, the exploration and evaluation costs will be written off to the statement of comprehensive income. 

ii) Contingent Liability

As referred to in note 24, the contingent consideration arrangement requires Ortac Resources (UK) Limited to pay a vendor royalty to Tournigan Energy Limited of up to US$3,750,000 (£2,611,000 at 31 March 2016 and 2015: £2,414,000) in either shares or cash, being $15 per ounce on the first 250,000 ounces of gold equivalent resource defined as proven and probable reserve in the bankable feasibility study. This will become payable within 60 days of all required permits being obtained to allow commercial production at the Kremnica property.

The fair value of the royalty has been determined using year-end exchange rates on the basis that the resource threshold referred to above will be exceeded.

The contingent consideration would be £130,000 lower/higher if the US$ exchange rate varies 5% from the rate at 31 March 2016. 

n. Finance income

Finance income consists of bank interest on cash and cash equivalents which is recognised as accruing on a straight line basis, over the period of the deposit. 

o. Cash and cash equivalents

Cash and Cash Equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. 

p. Inventories

Inventories largely consist of operational and maintenance consumables held and are stated at the lower of cost and net realisable value ("NRV"). Cost is determined using the first-in, first-out ("FIFO") method. NRV is the estimated selling price in the ordinary course of business, less applicable selling expenses. 

q. Trade and other receivables

Receivables are recognised initially at cost, being their initial fair value. These are classified as loans and receivables, and so are subsequently carried at cost using the effective interest method. The Directors are of the view that such items are collectible and no provisions are required. 

r. Investments

Investments in subsidiary undertakings are stated at cost less any provision for impairment in value, prior to their elimination on consolidation. 

s. Financial instruments

The Group's financial instruments are classified as loans and receivables and available for sale financial assets. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, and comprise trade and other receivables and cash and cash equivalents (see separate accounting policies for these items). 

Available-for-sale financial assets are non-derivatives that are not included in any other category, and comprise current asset investments. They are initially recognised at fair value plus transaction costs, and are subsequently carried at fair value with changes in fair value being recognised in other comprehensive income.

Trade and other payables are classified as financial liabilities, and are initially recognised a cost, being their fair value, and subsequently measured at amortised cost using the effective interest method. Any interest is recognised as a finance cost within the statement of comprehensive income.

There is no material difference between the carrying values and fair value of the Group's financial instruments. 

t. Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. 

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:

· Office equipment 20% or straight line over the period of the lease- whichever is the lesser;

· Field equipment - between 5% and 25%.

All assets are subject to annual impairment reviews.

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 replacement part is derecognised. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred.

The asset's residual value and useful economic lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying value is written down 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 the Statement of Comprehensive Income.

u. Impairment of assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. 

An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use. This is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, and the asset's value in use cannot be estimated to be close to its fair value. In such cases, the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, it is considered impaired and is written down to its recoverable amount. 

In assessing value in use, 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. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset, unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). 

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement of Comprehensive Income unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. 

v. Trade and other payables

Trade and other payables are carried at amortised cost under the effective interest method and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. 

w. Share-based payments

The Group provides benefits to senior personnel, consultants and advisors of the Group in the form of share-based payments, whereby such parties render services in exchange for shares or rights over shares (equity-settled transactions). 

The cost of these equity-settled transactions with such parties is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black-Scholes model. 

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Ortac Resources Limited (market conditions) if applicable. 

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant party become fully entitled to the award (the vesting period). 

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

(i) the extent to which the vesting period has expired and;

(ii) the Group's best estimate of the number of equity instruments that will ultimately vest. 

No adjustment is made for the likelihood of market performance conditions being met, as the effect of these conditions is included in the determination of fair value at grant date. The charge to the Income Statement for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. 

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. 

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings/ (loss) per share. 

x. Earnings per share

Basic Earnings per share is calculated as profit attributable to equity holders of the parent for the period, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. 

2. Segmental analysis

Segment information has been determined based on the information reviewed by the Board, being the Group's chief operating decision-maker, for the purposes of allocating resources and assessing performance. No revenue is currently being generated.

Head office activities are mainly administrative in nature and are located in the UK/BVI whilst the activities in Slovakia relate to exploration and evaluation work. 

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 

3. Other operating income

4. Expenses by nature

Establishment expenses includes £46,731 (2015: £46,731) relating to operating lease payments in connection with the Group's rental of office space in London which expires in August 2016. 

5. Employee information

The average number of persons employed in the Group, including Executive Directors, was:

6. Taxation

Taxation reconciliation

The charge for the year can be reconciled to the loss per the consolidated statement of comprehensive income:

The deferred tax asset has not been provided for in accordance with IAS 12. The Group does not have a material deferred tax liability at the year end.

The weighted average applicable tax rate used is a combination of the rates used in the BVI, UK and Slovakia.

7. Dividends

No dividends were paid or are proposed (2015: nil). 

8. Directors' remuneration

No pension benefits are provided for any Directors (2015: nil). 

9. Earnings per share

The calculation of Earnings per share is based on the loss attributable to equity holders divided by the weighted average number of shares in issue during the year. 

As the inclusion of potential Ordinary shares would result in an increase in the earnings per share, they are considered to be anti-dilutive. As such, diluted and basic earnings per share are the same. 

10. Interest income

11. Intangible assets

 Exploration projects carried out by the subsidiaries are at an early stage of development and can be split into two categories:

1. Those based upon JORC or JORC compliant resource estimates which enable value in use calculations to be prepared: A reclassification of resource estimates undertaken in 2012 by a leading group of mining consultants led to the announcement of maiden JORC Ore Reserves for the Šturec Deposit with 13.97Mt of ore at a grade of 1.70g/t Au and 14.22g/t Ag (1.90g/t Au Equivalent) classified in the Proven and Probable categories, giving an open pit Ore Reserve of 873,000oz of gold equivalent (28 tonnes). Subsequently, a Pre-Feasibility Study, carried out by a leading practice of mining consultants, of the Šturec Project announced on 8 April 2013 further confirmed the economic feasibility of the Šturec project: which based upon a metals price of (at US$1,343/oz Au Eq net price) and a discount rate of 8% gave an NPV of US$195m (post tax US$145m) and Internal Rate of Return ('IRR') of 30%. Gold prices are presently close to this price.

As regards the status of the mining license, as previously reported in2014 and following an application which was approved by the Slovak Authorities, a program of trial underground mining was started, which plans to extract 4,000 tonnes of ore over the three year period till 2017, and this in the context of its Mining License Area, which remain valid until 2018 and confirmation from the relevant authorities that Ortac holds both underground and surface mining rights to the Kremnica Mining License Area. 

To date some 500 tonnes of ore has been successfully mined and from this, bulk samples have been extracted and tested using non cyanide processing technologies, with encouraging results. At the same time Ortac has paid royalties to the Slovak State on the ore extracted. 

With the Slovak Republic having now banned the use of cyanide leaching technology in the processing of minerals, Ortac's work on alternative processing is opportune and indeed as previously announced, 20 tonnes of material mined from the Šturec Deposit was sent for pilot scale tests utilising a potential alternative gold recovery process, with encouraging results, that the Board believes will be economic. Ortac is therefore optimistic that a more eco-friendly process will be developed. 

2. Those other projects, for which no JORC or non-JORC compliant resource estimates, are available to enable value in use calculations to be prepared. Given that these projects are at an early stage, and are unlikely to be pursued and with preliminary results indicating modest returns, the Directors have continued with the policy of expensing the exploration costs incurred on these projects during the year. 

12. Property, plant and equipment

Depreciation charges for the year ended 31 March 2016 of £14,000 (2015: £32,000) have been charged to "administrative expenses". 

13. Investment in subsidiaries

At 31 March 2016 the Company held 100% of the share capital of the following wholly owned subsidiary companies:

* Wholly owned subsidiary of Ortac Resources (UK) Limited. 

On 1 April 2014, the Bellmin s.r.o, and G.B.E s.r.o both previously 100% owned by Ortac Resources (UK) Limited were merged into St. Stephans Gold s.r.o. On the same day Kremnica Gold s.r.o also previously 100% owned by Ortac Resources (UK) Limited was merged into Ortac s.r.o. 

14. Investment in associate

Andiamo is involved in the exploration of gold and other minerals in Eritrea. The investment in this company is part of a move to diversify Ortac's project portfolio. In accordance with IAS 28 the figures used in respect of Andiamo relate to the 31 December 2015 as the year end is not co-terminous with that of Ortac. Subsequent to 31 December 2015 a third party has earned a 50% interest in the northern part of the Andiamo exploration licence by expenditure of US$2,300,000 which is reflected in the Non-Current Assets of Andiamo in the table below.

The carrying value of the associate is £874,000 and it is determined as follows:

Ortac's share of the results in Andiamo are shown below:

Nature of investment in associate:

As at the year end, the fair value of the Group's interest in Andiamo equated to its carrying value. Andiamo is a private company and there is no quoted market price available for its shares.

Summarised statement of financial position for associate, as at 31 December 2015:

Summarised statement of comprehensive income for associate:

The information above reflects the amounts presented in the financial statements of the associates (and not Ortac Resources Limited's share of those amounts) adjusted for differences in accounting policies between the Group and the associates.

Reconciliation of summarised financial information: