Atalaya Mining Regulatory News (ATYM)

27 MARCH 2014

FINAL RESULTS FOR 12 MONTHS ENDED 31 DECEMBER 2013

EMED Mining Public Limited (AIM: EMED, TSX: EMD) ("EMED Mining" or "the Company"), the Europe-based minerals development and exploration company, announces its audited results for the year ended 31 December 2013.

The full audited report (as required by Toronto Stock Exchange), including consolidated Financial Statements and the Management Discussion and Analysis relating to the Company, which appear below, are also available under the Company's profile on SEDAR at www.sedar.comand on the Company's website at www.emed-mining.com.

Key Highlights for 2013 

Spain - Rio Tinto copper project (RPT)

o In April 2013 the Andalusian Government's Department of Industry formally notified the Company of the remaining conditions necessary for the transfer on mineral rights and the granting of Administrative Standing. These conditions required a report from the Government's independent technical agency - CEDEX, on the viability of the Project taking into account a proposed new tailings management system.

o The CEDEX Report supporting the new tailings management system was received in July 2013. The Report included the formal issuance of an "independent opinion of viability" by the Government's independent technical expert CEDEX.

o The Company completed and lodged the reports requested by the Andalusian Government's Departments of Industry and Environment reflecting proposed changes to the Tailings Management System. These changes were the subject of a thirty day public viewing in September/October 2013.

o Post period end, in January 2014, the Department of Environment (CAPMA) issued the Environmental Compatibility Report of the PRT, addressed to the Department of Industry, indicating that the Project is compatible with applicable environmental legislation.

o In February 2014, CAPMA issued the corresponding DICTAMEN AMBIENTAL, which is the preliminary step towards the final resolution on the Unified Environmental Authorisation ("AAU") and opened another public viewing period, which closed on 17 March 2014.

o CAPMA is currently studying the allegations presented and is drafting the definite resolution on the AAU, which is anticipated to be received in the coming weeks.

o The Department of Industry is now waiting for the AAU to be issued by CAPMA. The issuance of the AAU will then clear the way for the grant of Administrative Standing which will allow the Project to move forward.

Spain - Other projects

o The Andalusian Government completed the public comment period for the "Class B Resources" - the recycling of precious-metal rich tailings via the Company's joint venture with local investment group Rumbo.

o EMED acquired the Aguilas Two Exploration Licence located 8 kilometres from the PRT. Combined with the Company's other ancillary local mineral concessions, this reinforces the Company's 100%-ownership of the tenements for the PRT and surrounding district.

Slovakia - Detva Gold Project

o Following a successful and cost-effective exploration programme which led to the gold discovery at Biely Vrch, Central Slovakia, in late 2006, the Ministry of Economy in 2010 officially recognised the national significance of this discovery by declaring it a protected deposit area and in early 2011, EMED Slovakia submitted an application for the designation of a Mining Lease Area ("MLA") over the Biely Vrch Gold Deposit. The Company has since been requested to submit further documentation, including a full Environmental Impact Assessment. Given that these requirements are beyond the lawful procedures of the legislation in force, the Company is reviewing its options. The permitting process has now been suspended and activity in Slovakia has been reduced to essentially an administrative level pending resolution of these matters.

Corporate

o On 12 July 2013, the Company issued Convertible Notes in the amount of £9,582,000, of which £7,026,800 was subscribed by XGC and £2,555,200 was subscribed by Orion.

o On 12 August 2013, Mr Jasper Bertisen resigned as a Director of the Company.

o On 19 September 2013, Mr Harry Anagnostaras-Adams resigned as Managing Director and CEO of the Company and Mr Rodney Halliday was appointed as interim Managing Director and CEO of the Company. On the same day, Dr Jose Sierra Lopez, non-executive Director of EMED, was appointed as the Chairman of EMED Tartessus.

o On 17 December 2013, the Company raised £5.5 million (before expenses) by way of a private placement of 68,750,000 new ordinary shares of 0.25 pence each at an issue price of 8 pence each.

o The Company is taking steps towards the dissolution of non-strategic subsidiaries in Georgia and Greece.

o The Company replaced the proposed copper pre-sale funding arrangement to pursue a more traditional project financing arrangement with a consortium of banks to provide finance of up to $200 million. Such finance will be subject to finalisation of definitive documentation, receipt of all permitting for the Rio Tinto Copper Project and the usual lender due diligence, among other things.

Post Period Events, other than any forementioned:

o Administrative procedures for the additional ancillary permits, such as plant inspections to check all existing plant and equipment to ensure compliance for certification purposes with safety and other standards, have commenced. The Company has put in place the required civil liability insurance policy for the tailings facility;

o On 20 March 2014, following changes to the board of directors took place:

- Mr Isaac Querub was appointed as Managing Director and CEO of the Company and Vice President of EMED Tartessus

- Mr Alberto Lavandeira was appointed as CEO of EMED Tartessus and COO and Executive Director of EMED with effect from 14 April 2014.

- Messrs Rodney Halliday and John Leach resigned as interim Managing Director/CEO and Executive Director of the Company respectively. Mr Leach continues as the Company's Chief Financial Officer.

Enquiries:

EMED Mining Ronnie Beevor +61 409326184

RFC Ambrian Stuart Laing +61 8 9480 2500

Fox-Davies Capital Simon Leathers +44 203 463 5022

Bishopsgate Communications Nick Rome +44 207 107 1890

Proconsul Capital Andreas Curkovic +1 416 577 9927

Report of the board of directors

For the year ended 31 December 2013

(All amounts in Euro thousands unless otherwise stated)

The board of directors presents its report for EMED Mining Public Limited ("EMED Mining" and or the "Company") and its subsidiaries ("EMED" and or the "Group") together with the consolidated financial statements of the Group for the year ended 31 December 2013.

Incorporation and principal activity

EMED Mining was incorporated in Cyprus on 17 September 2004 and is a limited liability company under the Companies Law of Cyprus, Cap. 113. The Company was listed on the Alternative Investment Market ("AIM") of the London Stock Exchange in May 2005 and on the Toronto Stock Exchange ("TSX") in December 2010.

The principal activity of the Group is to explore for and develop natural resources, with a focus on base and precious metals in certain belts of mineralization spanning Europe, the Middle East and Central Asia.

EMED Mining is led by international mining industry specialists and has a strong commitment to the responsible development of metal production operations in Europe, with an initial focus on copper and gold.

Review of operations

During the past twelve months EMED has continued to focus on the restart of the mines at the Rio Tinto Copper Project in Spain.

Rio Tinto Copper Project

At Rio Tinto, EMED's primary effort has been on planning and permitting the restart of the Cerro Colorado open pit copper mine and existing processing plant at the Rio Tinto Copper Project ("PRT").

Capital and Operating Cost Estimates

An updated NI 43-101 Independent Technical Report was published in February 2013, reporting that capital and operating cost estimates were consistent with recent guidance published by the Company. These estimates now form the basis for detailed finance planning with principal financiers.

Permitting

In April 2013 the Andalusian Government's Department of Industry formally notified the Company of the remaining conditions necessary for the transfer on mineral rights and the granting of Administrative Standing. These conditions required a report from the Government's independent technical agency - CEDEX, on the viability of the Project taking into account a proposed new tailings management system. The CEDEX Report supporting the new tailings management system was received in July 2013. The Report included the formal issuance of an "independent opinion of viability" by the Government's independent technical expert CEDEX. 

The Company completed and lodged the reports requested by the Andalusian Government's Departments of Industry and Environment reflecting proposed changes to the Tailings Management System. These changes were the subject of a thirty day public viewing in September/October 2013.

In January 2014, the Department of Environment (CAPMA) issued the Environmental Compatibility Report of the PRT, addressed to the Department of Industry, indicating that the Project is compatible with applicable environmental legislation. In February 2014, CAPMA issued the corresponding DICTAMEN AMBIENTAL, which is the preliminary step towards the final resolution on the Unified Environmental Authorisation ("AAU") and opened another public viewing period, which closed on 17 March2014. CAPMA is currently studying the allegations presented and is drafting the definite resolution on the AAU, which is anticipated to be received in the coming weeks.

The Department of Industry is now waiting for the AAU to be issued by CAPMA . The issuance of the AAU will then clear the way for the grant of Administrative Standing which will allow the Project to move forward.

For the year ended 31 December 2013 Administrative procedures for the additional ancillary permits, such as plant inspections to check all existing plant and equipment to ensure compliance for certification purposes with safety and other standards, have commenced. The Company has put in place the required civil liability insurance policy for the tailings facility.

 Other Rio Tinto Projects

The Company has put in place the required civil liability insurance policy for the tailings facility. The Andalusian Government completed the public comment period for the "Class B Resources" - the recycling of precious-metal rich tailings via the Company's joint venture with local investment group Rumbo 5-Cero S.L.("Rumbo"). In regards to exploration potential, the Company reported its successful application for the Aguilas Two Exploration Licence located 8 kilometres from the PRT. Combined with the Company's other ancillary local mineral concessions, this reinforces the Company's 100%-ownership of the tenements for the PRT and surrounding district.

Project Finance

The Company replaced the proposed copper pre-sale funding arrangement to pursue a more traditional project financing arrangement with a consortium of banks to provide finance of up to $200 million. Such finance will be subject to finalisation of definitive documentation, receipt of all permitting for the Rio Tinto Copper Project and the usual lender due diligence, among other things.

Corporate

On 12 July 2013, the Company issued Convertible Notes (the "Notes") in the amount of £9,582,000 of which £7,026,800 was subscribed by Yanggu Xiangguang Copper Co. Ltd ("XGC") and £2,555,200 was subscribed by Orion Resource Partners ("Orion") (formerly RK Mine Finance (Master) Fund II LP ("Red Kite")). The Notes have a term of 18 months to 12 January 2015 (the "Maturity Date") and can be repaid at the election of the Note holder or converted into new ordinary shares of 0.25 pence each in the Company ("Ordinary Shares") at a conversion price of 9 pence per share (the "Conversion Price"). The Notes carry a coupon of 9% per annum in the first 12 months and 11% thereafter.

All outstanding principal and accrued interest of the Notes will automatically convert into new Ordinary Shares at the Conversion Price at the time the Company (or any of its subsidiaries) makes its first drawdown (the "Drawdown Date") from the facility to be made available by senior financial institutions for the restart of operations at the Company's Rio Tinto Copper Project in Andalucía, Spain. If the Notes have not already been converted at 9p and on the Drawdown Date, the volume weighted average price of the Ordinary Shares on AIM over the period of 20 consecutive trading days immediately prior to the Drawdown Date (the "Market Price") is less than the Conversion Price, the Conversion Price will be the Market Price. The Notes are also convertible into Ordinary Shares or redeemable prior to the Maturity Date in other limited circumstances, including a change of control of the Company.

EMED may elect to redeem for cash the principal and accrued interest of the Notes at any time between 12 July 2014 (first anniversary of the date of issue) and the first to occur of the Drawdown Date or Maturity Date upon giving the holders of the Notes not less than 15 business days' notice. A Note holder may choose to convert their Notes into Ordinary Shares rather than have them redeemed but if they do so it will be at a price of 9 pence per share and is not conditional on the Drawdown Date occurring. The Notes benefit from security interests granted by EMED Mining over the share capital of EMED Holdings (UK) Limited and EMED Marketing Limited as well as certain intra-group debts owing to EMED Mining. In addition, EMED Mining and certain of its subsidiaries have undertaken not to further encumber their assets or share capital, save in certain circumstances, including in connection with the proposed senior debt facility required in order to restart operations at the Rio Tinto Copper Project. The Notes are subject to certain standard events of default following which Note holders may elect to immediately redeem their Notes and accrued interest. Assuming that the Notes convert in full at the conversion price (including the conversion of 18 months' accrued interest) the Note Holders would receive 122,865,679 shares.

On 12 August 2013, Mr Jasper Bertisen resigned as director of the Company. On 19 September 2013, Mr Harry Anagnostaras-Adams resigned as Managing Director and CEO of the Company and Mr Rodney Halliday was appointed as interim Managing Director and CEO of the Company. On the same day, Dr Jose Sierra Lopez, non-executive Director of EMED, was appointed as the Chairman of EMED Tartessus.

On 23 December 2013, the Company raised £5.5 million (€6.6 million) by way of a private placement of 68,750,000 new ordinary shares of 0.25 pence each at an issue price of 8 pence each.

On 20 March 2014, Mr Isaac Querub was appointed as Managing Director and CEO of the Company and Vice President of EMED Tartessus. In addition, Mr Alberto Lavandeira was appointed as CEO of EMED Tartessus and COO and Executive Director of EMED with effect from 14 April 2014.

On the same day, Messrs Rodney Halliday and John Leach resigned as interim Managing Director/CEO and Executive Director of the Company respectively. On the same day, Mr Isaac Querub was appointed as Managing Director and CEO of the Company. Mr Leach continues as the Company's Chief Financial Officer.

Detva Gold Project

Following a successful and cost-effective exploration program which led to the gold discovery at Biely Vrch, Central Slovakia, in late 2006, the Ministry of Economy in 2010 officially recognised the national significance of this discovery by declaring it a protected deposit area and in early 2011, EMED Slovakia submitted an application for the designation of a Mining Lease Area ("MLA") over the Biely Vrch Gold Deposit. The Company has since been requested to submit further documentation, including a full Environmental Impact Assessment. Given that these requirements are beyond the lawful procedures of the legislation in force, the Company is reviewing its options. The permitting process has now been suspended and activity in Slovakia has been reduced to essentially an administrative level pending resolution of these matters.

Cyprus

The permits the Company holds in Cyprus represent an advanced grass roots exploration opportunity and we have established good exploration targets, a comprehensive data base and good governmental/community relationships. We continue to hold the relevant tenements and are looking for appropriate joint venture partners to take the project to the next stage.

Results

As at 31 December 2013, the Group had cash of €8.6 million (2012: €7.6 million), receivables of €0.7 million (2012: €4.3 million) and listed shares that had a market value of €1.4 million (2012: €2.9 million). During 2013, the Group incurred a loss of €18.9 million (2012: €11.5 million), of which exploration and care and maintenance expenses were €4.2 million (2012: €6.8 million) and administration expenses were €5.5 million (2012: €4.5 million). The tax charge of €6.4 million was principally a result of the derecognition of the deferred tax asset on 31 December 2013 (2012: credit €0.5 million) with finance costs increasing from €0.5 million in 2012 to €2.5 million in 2013.

EMED Mining continues to take a conservative approach in its accounting policy towards exploration expenditure. All such expenditures are written off when incurred pending a decision by the Company to commence project development. Expenditure considered to be development costs are being capitalised to the Rio Tinto Copper Project.

The net loss for the year is summarised as follows:

The Group's full results for the year are set out on page 15.

The increase in assets during 2013 is mainly due to an increase in property, plant and equipment of €3.7 million (2012: €21.1 million) and an increase in intangible assets of €3.0 million (2012: €3.4 million) at the Rio Tinto Copper Project. The increase in property, plant and equipment is primarily due to the professional services and other development costs necessary to renew the mining installations in readiness for the start up. The increase in intangible assets is the result of work completed by technical and other consultants to develop the necessary technical evaluation and plans for operational and environmental requirements, including the project restart, tailings dams and water management.

Share capital

Details on authorized and issued share capital are disclosed in Note 20 of the consolidated financial statements. At31 December 2013, EMED Mining had a total of 1,255 million shares on issue (1,296 million shares fully-diluted).

Future developments

The Group's key near-term priority is to safely and efficiently start copper production at the Rio Tinto Copper Project, initially focusing on the Cerro Colorado Open Pit Mine. Preliminary research also indicates the potential to rapidly expand mineral resources and ore reserves at the Cerro Colorado Open Pit Mine and to report mineral resources at the adjacent underground mines. In addition, a feasibility study will commence in respect of the potential to recover a significant amount of precious metals in the tailings deposit.

Board of directors

The names and particulars of the qualifications and experience of each director are set out below. All directors held office from the start of the financial year to the date of this report, except Mr Bertisen, Mr Anagnostaras-Adams and Mr John Leach who resigned from the board on 13 August 2013, 19 September 2013 and 20 March 2014 respectively. Mr Rodney Halliday was appointed as interim Managing Director and CEO of the Company on 19 September 2013 and resigned both positions on 20 March 2014. Mr Isaac Querub was appointed as Managing Director and CEO of the Company and Vice President of EMED Tartessus on 20 March 2014. In addition, Mr Alberto Lavandeira was appointed as CEO of EMED Tartessus and COO and Executive Director of EMED with effect from 14 April 2014. In accordance with the Company's Articles of Association, one third of the board of directors must resign each year. All the directors will retire at the AGM and offer themselves for re-election.

Ronald (Ronnie) Beevor, BA (Hons)

Non-Executive Chairman, British and Australian citizen based in Australia.

Mr Beevor serves as the chairman of the board. He is chairman of the Corporate Governance, Nominating and Compensation Committee and a member of the Audit and Financial Risk Committee.

Mr Beevor is an investment banker with extensive involvement in the natural resources industry globally. He was head of investment banking at NM Rothschild & Sons (Australia) Limited between 1997 and 2002 and is currently a senior advisor to Standard Chartered Gryphon Partners. He is also chairman of Bannerman Resources Limited and a director of Bullabulling Gold Limited, Riversdale Resources Limited, Unity Mining Limited and Wolf Minerals Limited. Mr Beevor has an honours degree in Philosophy, Politics and Economics from Oxford University and qualified as a Chartered Accountant in London in 1972.

Isaac Querub, CAFAIM, FAICD

Managing Director and CEO for EMED, Vice President of EMED Tartessus, Spanish citizen based in Spain

Mr. Querub has previously run a number of successful businesses in Spain, including being the Managing Director of Glencore Spain from 1990 to 2003. Mr Querub is currently also a director or partner of Incogas SA and Moka Consulting SA.

He is a graduate from Instituto Católico de Administración y Dirección de Empresas (ICADE)/Universidad Pontificia de Comillas, Madrid, with a Bachelor's degree in Business Administration, and a Master's degree in Law, 1980.

Alberto Lavandeira (with effect from 14 April 2014)

Executive Director and Chief Operating Officer for EMED Mining, Managing Director and CEO of EMED Tartessus, Spanish citizen based in Spain

Mr. Lavandeira brings to EMED Mining experience of over 35 years operating and developing mining projects. As a Director of Samref Overseas S.A from 2007 to early 2014, he represented the one of the shareholder's interests in the JV that developed the world-class Mutanda Copper-Cobalt Mine in the Democratic Republic of Congo. From 1995 to 2007, he worked for Rio Narcea Gold Mines starting as COO and later working as President and CEO and Director. During this period, RNG built three projects from exploration stages to production. Prior to that, Mr Lavandeira worked in different positions within Spanish mining subsidiaries of Rio Tinto, Anglo American and Cominco.

He is a graduate of the University of Oviedo, Spain with a degree in Mining Engineering.

Roger Davey, ACSM, MSc., C.Eng., Eur.Ing., MIMMM.

Non-Executive Director, British citizen based in the UK.

Mr Davey serves as a non-executive director of the Company. Mr Davey is also chairman of the Physical Risk Committee and is a member of the Audit and Financial Risk Committee.

Mr Davey has over thirty years' experience in the mining industry. Previous employment included assistant director and senior mining engineer at NM Rothschild & Sons; director, vice-president and general manager of AngloGold's subsidiaries in Argentina; operations director of Greenwich Resources Plc, London; production manager for Blue Circle Industries in Chile; and various production roles from graduate trainee to mine manager, in Gold Fields of South Africa (1971 to 1978). Mr Davey is a director of Orosur Mining Inc. Alexander Mining Plc, Condor Gold Plc and Master Drilling Group Limited.

Mr Davey is a graduate of the Camborne School of Mines, England (1970), with a Master of Science degree in Mineral Production Management from Imperial College, London University, (1979) and a Master of Science degree from Bournemouth University (1994). He is a Chartered Engineer (C.Eng.), a European Engineer (Eur. Ing.) and a Member of the Institute of Materials, Minerals and Mining (MIMMM).

Robert Francis, BASc. (MechEng), CA.

Non-Executive Director, Canadian citizen based in Canada.

Mr Francis is a retired senior partner of the Toronto office of Deloitte & Touche LLP, having enjoyed an extensive career in public accounting in Canada, 30 years as a partner. Mr Francis led the Deloitte & Touche Resource Sector Mining Group practice providing a complete range of service to the metals/mining sector.

Mr Francis is a non-executive director of TSX and JSE listed Forbes & Manhattan Coal Corp and a director of the William Osler Health Services Foundation and was previously a director of Volta Resources Inc. and Augen Gold Corp.

Mr Francis holds a Bachelor's degree in Mechanical Engineering and is a Chartered Professional Accountant, member of the Chartered Professional Accountants Canada. He is also a graduate of the Institute of Corporate Directors program.

Harry Liu, BSc. Economics

Non-Executive Director, Chinese citizen based in China.

Mr Liu is a vice president of Yanggu Xiangguang Copper Co. Ltd ("XGC"), one of the world's largest copper smelting, refining and processing groups located in the Shandong province of China. XGC is a significant shareholder in EMED Mining.

Mr Liu has held a number of senior management and marketing positions in the mineral and financial industries in Shanghai and Hong Kong, including roles as marketing manager at BHP Billiton Marketing AG and Director at BNP Paribas Asia. Mr Liu graduated with a Bachelor´s Degree in Economics from Zhejiang University in Zhejiang Province, China. Mr Liu has no other directorships.

Dr. Jose Nicolas Sierra Lopez, Ph.D., D.I.C., MBA.

Non-Executive Director, Non-Executive Chairman of EMED Tartessus, Spanish citizen based in Spain.

Dr. Sierra brings to the Company extensive experience as a mining and energy leader in the business and government sectors. His experience includes being Spain's national Director General of Mines and Construction Industries and EU Director for Fossil Fuels for the European Commission. Most recently he was Commissioner at the National Energy Commission of Spain and Deputy Independent Member of the SEMC (Single Electricity Market Committee of the Island of Ireland). He was member of the Board of TIGF (Transport et Infrastructures Gaz France).

Dr. Sierra holds a Ph.D. in Mining Engineering from the University of Madrid. He is an elected member of the Royal Academy of Doctors of Spain.

Ashwath Mehra, BSc. (Econ)

Non-Executive Director, British citizen based in Switzerland.

Mr Mehra is the chief executive officer of Astor Management AG ("Astor"). Astor is a holding company in the natural resources sector. Mr Mehra has worked in the minerals industry for 28 years, starting his career with Philipp Brothers (now Phibro LLC) after which he spent 10 years with Glencore International AG, where he was a senior partner and ran the Nickel and Cobalt Divisions. He has substantial experience in projects and project finance and has worked on equity and bond issues.

Mr Mehra holds a Bachelor's degree in Economics and Philosophy from the London School of Economics and Political Science. Mr Mehra is a director of publicly listed Northern Iron Limited and Fancamp Exploration Limited.

Directors' interests

The interests of the Directors and their immediate families, (all of which are beneficial unless otherwise stated) and of persons connected with them, in Ordinary Shares, as at the date of this report are as follows:

* Personal shareholding / ** Shares held by the companies the directors represent

(1) Yanggu Xiangguang Copper Co. Ltd

(2) Astor Management AG

The Directors to whom options over Ordinary Shares have been granted and the number of Ordinary Shares subject to such Options as at the date of this report are as follows:

Options, except those noted below, expire between four and six years after grant date and are exercisable at the exercise price in whole or in part up to one third in the first year from the grant date, two thirds in the second year from the grant date and the balance thereafter.

On 25 January 2010, 600,000 options were issued to Mr R. Beevor (Chairman) and 367,000 to Mr A. Mehra, Non-Executive Director. These options are exercisable at 13.4p and expire four years after the date of issue.

On 22 April 2010, 500,000 options were issued to Mr R. Davey, a Non-Executive Director. These options are exercisable at 13.4p and expire four years after the date of issue.

On 20 December 2010, 800,000 options were issued to Mr R. Beevor (Chairman) and 400,000 each to Messrs A. Mehra and R. Davey, Non-Executive Directors. These options are exercisable at 12p and expire four years after the date of issue.

On 1 October 2011, 1 million options were issued to Dr. J. S. Lopez, a Non-Executive Director. These options are exercisable at 9p and expire five years after the date of issue.

On 1 December 2011, 1 million options were issued to Mr R. Francis, a Non-Executive Director. These options are exercisable at 9p and expire five years after the date of issue.

On 28 December 2011, 800,000 options were issued to Mr R. Beevor (Chairman) and 400,000 each to Messrs A. Mehra and R. Davey, Non-Executive Directors. These options are exercisable at 10p, expire five years after the date of issue, vest in equal instalments from the date of grant of administrative standing over the lesser of three years or the time remaining to the expiry of the option.

On 17 March 2014, 6,000,000 options were issued to Mr I. Querub (Managing Director). These options are exercisable at 12p, expire 5 years after the date of issue and vest in three equal instalments from the date of grant.

Directors' emoluments

In compliance with the disclosure requirements of the listing requirements of AIM and TSX, the aggregate remuneration paid to the directors and executive officers of EMED Mining for the year ended 31 December 2013 is set out below.

(1) Mr Anagnostaras-Adams retired during the year and this was, in the main, his contractual entitlement upon his resignation.

(2)Other component for the year ended 31 December 2012 includes short term incentive payments in respect of 2011.

Shareholders holding more than 3% of share capital

The Shareholders holding more than 3% of the share capital of the Company as at 31 December 2013 were:

Following the issue of the Notes in July 2013 to XGC and Orion and assuming that the Notes convert in full at the conversion price (including the conversion of 18 months' accrued interest), the Note Holders would receive 122,865,679 shares, in addition to their existing shareholding (90,101,498 for XGC and 32,764,181 for Orion) -Note 22.

Corporate governance

The Directors comply with TSX and AIM regulations and Cyprus Company Law. The Board remains accountable to the Company's shareholders for good corporate governance.

Board of directors

The Board is responsible for approving Company policy and strategy. The Board holds at least ten formal meetings in each calendar year and is supplied with appropriate and timely information and the Directors are free to seek any further information they consider necessary. All Directors have access to advice from the Company Secretary and independent professionals at the Company's expense. Training is available for new Directors and other Directors as necessary. A number of the Group's key strategic and operational decisions are reserved exclusively for the decision of the Board.

The Board currently consists of one executive director who holds an operating position in the Company (the Managing Director ) and six non-executive Directors, who bring a breadth of experience and knowledge, all of whom are independent of management and four of whom are independent of any business or other relationship which could interfere with the exercise of their independent judgment. The Board regularly reviews key business risks including the financial risks facing the Group in the operation of its business.

The Company has adopted a model code for Directors' dealings which is appropriate for a TSX and AIM listed company. The Directors intend to comply with Rules 21 and 31 of the AIM Rules relating to Directors' dealings and will take all reasonable steps to ensure compliance by the Group's applicable employees as well.

Board committees

The Company's Audit and Financial Risk Management Committee ("AFRC") comprises Mr R. Francis (Chair), Mr R. Beevor and Mr R. Davey. The AFRC is responsible for ensuring that appropriate financial reporting procedures are properly maintained and reported on, for meeting with the Group's auditors and reviewing their reports on the Group's financial statements and the internal controls and for reviewing key financial risks.

The Company's Corporate Governance, Nominating and Compensation Committee, comprises Mr R. Beevor (Chair), Mr R. Davey, Mr H. Liu and Mr A. Mehra. The Committee is, among other things, responsible for reviewing the performance of the executives, setting their remuneration, determining the payment of bonuses, considering the grant of options under any share option scheme and, in particular, the price per share and the application of performance standards which may apply to any such grant.

The Company's Physical Risk Management Committee comprises Mr R. Davey (Chair), Dr. J. Sierra Lopez and Mr A. Mehra. The Physical Risk Management Committee is responsible for reviewing the compliance with regulatory and industry standards for environmental performance and occupational health and safety of personnel and the communities affected by the Company.

Directors' responsibilities for the financial statements

Cyprus company law states that the Directors are responsible for the preparation of financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period. In the preparation of those financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and estimates that are reasonable and prudent; and

• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for maintaining proper accounting records, for safeguarding the assets of the Group and for taking reasonable steps for the prevention and detection of fraud and other irregularities. Legislation in Cyprus governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

Creditors' payment terms

The Company does not have a specific policy towards our suppliers and does not follow any code or standard practice. However, terms of payment with suppliers are settled when agreeing overall terms of business, and the Company seeks to abide by the terms of the contracts to which it is bound.

Political donations

No political donations were made during the 2013 financial year.

Subsequent events

The Ministry of Environment of the Government of Andalusia (the "Ministry") issued the Dictamen Ambiental on 19 February 2014. The release of the Dictamen is a significant milestone in the completion of the approval process for the Unified Environmental Plan ('Autorizacion Ambiental Unificada' or the 'AAU'). The Dictamen Ambiental contains the draft conditions which may be included in the final AAU subject to final review by the Ministry.

The Company and its consulting experts completed their review of the Dictamen conditions and have made a submission to the Ministry of Environment on certain aspects. The Ministry are considering this submission along with any others they may have received prior to issuing the AAU in the coming weeks. The issue of the AAU will then clear the way for the grant of Administrative Standing which will allow the Project to move forward. As at the date of this report, the AAU and conditions attached thereto have not been released.

On 20 March 2014, Mr Isaac Querub was appointed as Managing Director and CEO of the Company and Vice President of EMED Tartessus. In addition, Mr Alberto Lavandeira was appointed as CEO of EMED Tartessus and COO and Executive Director of EMED with effect from 14 April 2014.

On the same day, Messrs Rodney Halliday and John Leach resigned as interim Managing Director/CEO and Executive Director of the Company respectively. Mr Leach continues as the Company's Chief Financial Officer.

Messrs Querub and Lavandeira have each been granted options over six million ordinary shares under the Company's share option plan which are exercisable at 12p per share and expire 5 years from the date of grant. The options vest in three equal tranches on the first, second and third anniversaries of the date of grant. In addition, it is proposed that, subject to shareholder approval and the approval of the TSX, Mr Querub and Mr Lavandeira will each be issued two million ordinary shares in the Company at par (0.25p per share). These shares will be held in escrow and released to Mr Querub and Mr Lavandeira once they have been employed by the Company for two years or if their service agreements are terminated for certain specified reasons. Shareholder approval for the above proposed issues of shares will be sought at the Company's Annual General Meeting to be held in 2014.There were no other events after the reporting period, which would have a material effect on the consolidated financial statements.

Auditors

The statutory auditors, MOORE STEPHENS STYLIANOU & CO, have expressed their willingness to continue in office and a resolution approving their reappointment and giving authority to the board of directors to fix their remuneration will be proposed at the next Annual General Meeting.

The auditors for the purposes of Canadian securities laws, MNP LLP (formerly MSCM LLP), have expressed their willingness to continue in office and a resolution approving their appointment and giving authority to the board of directors to fix their remuneration will be proposed at the next Annual General Meeting.

By order of the board

Inter Jura CY (Services) Limited,

Secretary

Nicosia, Cyprus

27 March 2014

Independent Auditor's Report

To the shareholders ofEMED Mining Public Limited

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of EMED Mining Public Limited, which comprise the consolidated statement of financial position as at 31 December 2013, and the consolidated income statement, statement of changes in equity and statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of EMED Mining Public Limited as at 31 December 2013 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Other matters

The consolidated financial statements as at 31 December 2012 and for the year then ended were audited by MSCM LLP of Toronto, Canada, prior to its merger with MNP LLP. MSCM LLP expressed an unmodified opinion on those consolidated financial statements in their audit report dated 22 March 2013.

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Ontario

TBD

To the Members of EMED MINING PUBLIC LIMITED

Report on the consolidated financial statements

We have audited the accompanying consolidated and Company's separate financial statements of EMED MINING PUBLIC LIMITED (the ''Company'') and its subsidiaries (together with the Company, the ''Group'') on pages 15 to 53 which comprise the consolidated statement of financial position as at 31 December 2013, and the consolidated statements of comprehensive income, changes in equity and cash flows of the Group and the Company for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board of Directors' responsibility for the consolidated financial statements

The board of directors is responsible for the preparation of consolidated and Company's separate financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these consolidated and Company's separate financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated and Company's separate financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board of directors as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated and the Company's separate financial statements give a true and fair view of the financial position of the Group and the Company as at 31 December 2013, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.

Emphasis of matter

Without qualifying our opinion we draw attention to the fact that the financial statements have been prepared on a going concern basis. The validity of this basis depends principally on obtaining the necessary mining licenses and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Group's exploration activities. The financial information does not include any adjustment that would arise from failure to complete either option. Changes in future conditions could require write downs of the carrying values of property, plant and equipment and/or intangible assets. Our opinion is not qualified in this respect of this matter.

Report on other legal requirements

Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Law of 2009 and 2013, we report the following:

· We have obtained all the information and explanations we considered necessary for the purposes of our audit.

· In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of these books.

· The consolidated financial statements are in agreement with the books of account.

· In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required.

· In our opinion, the information given in the report of the board of directors is consistent with the consolidated financial statements.

Other matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Law of 2009 and 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

Consolidated income statements

(All amounts in Euro thousands unless otherwise stated)

Statements of financial position

The consolidated financial statements were authorised for issue by the board of directors on 27 March 2014 and were signed on its behalf.

Consolidated statements of changes in equity

Years ended 31 December 2013 and 2012

Company statements of changes in equity

Years ended 31 December 2013 and 2012

Consolidated statements of cash flows

Years ended 31 December 2013 and 2012

Company statement of cash flows

Years ended 31 December 2013 and 2012

Notes to the consolidated financial statements

Years ended 31 December 2013 and 2012

1. Incorporation and principal activities

Country of incorporation

EMED Mining Public Limited (the "Company") was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office is at, 1 Lampousa Street, Nicosia, Cyprus. The Company was listed on AIM of the London Stock Exchange in May 2005 and on the TSX on 20 December 2010.

Principal activities

The principal activity of the Company and its subsidiaries (together, "the Group") is to explore for and develop natural resources, with a focus on base and precious metals in certain belts of mineralisation spanning Europe, the Middle East and Central Asia.

2. Summary of significant accounting policies

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

2.1 Basis of preparation

The consolidated financial statements of EMED Mining Public Limited have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The consolidated financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment 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 consolidated financial statements are disclosed in Note 3.3.

The Directors have formed a judgment at the time of approving the financial statements that there is a reasonable expectation that the Company and the Group have adequate available resources to continue in operational existence for the foreseeable future.

The financial information has been prepared on the going concern basis, after taking into account the risks identified in Note 3.

Changes in accounting policy and disclosures

During the current year the Company adopted all the new and revised International Financial Reporting Standards (IFRS) as adopted by EU that are relevant to its operations and are effective for accounting periods beginning on 1 January 2013. This adoption did not have a material effect on the accounting policies of the Company. At the date of approval of these financial statements, standards and interpretations were issued by the International Accounting Standards Board (IASB) which were not yet effective. Some, but not all of these were adopted by the European Union. The board of directors expects that the adoption of these accounting standards in future periods will not have a material effect on the financial statements of the Company.

At the date of approval of these financial statements the following accounting standards were issued by the IASB but were not yet effective:

(i) Standards and Interpretations adopted by the EU

New standards

· IFRS 10 ''Consolidated Financial Statements'' (effective for annual periods beginning on or after 1 January 2014).

· IFRS 11 ''Joint Arrangements'' (effective for annual periods beginning on or after 1 January 2014).

· IFRS 12 ''Disclosure of Interests in Other Entities'' (effective for annual periods beginning on or after 1 January 2014).

Amendments

IFRS Interpretations Committee

· IAS 27 (Revised): ''Consolidated and Separate Financial Statements'' (effective for annual periods beginning on or after 1 January 2014).

· IAS 28 (Revised): ''Investments in Associates'' (effective for annual periods beginning on or after 1 January 2014).

· Amendment to IAS32 ''Offsetting Financial Assets and Financial Liabilities'' (effective for annual periods beginning on or after 1 January 2014).

· Amendment to IAS 36 ''Recoverable Amount ‑ Disclosures for Non‑Financial Assets'' (effective for annual periods beginning on or after 1 January 2014).

· Amendment to IAS 39 ''Financial Instruments: Recognition and Measurement'', Novation of Derivatives and Continuation of Hedge Accounting (effective for annual periods beginning on or after 1 January 2014).

· Transition Guidance for IFRS 10, 11 & 12 (effective for annual periods beginning on or after 1 January 2014).

· Investment Entities amendments to IFRS 10, IFRS 12, and IAS 27 (effective for annual periods beginning on or after 1 January 2014).

(ii) Standards and Interpretations not adopted by the EU

New standards

· IFRS 9 ''Financial Instruments'' issued in November 2009 and amended in October 2010 introduces new requirements for the classification and measurement of financial assets and financial liabilities and for derecognition. (effective for annual periods beginning on or after 1 January 2018).

· IFRS 14 ''Regulatory Deferral Accounts'' (effective for annual periods beginning on or after 1 January 2016).

Amendments

· Amendments to IAS 19 ‑ ''Defined Benefit Plans: Employee Contributions'' (effective for annual periods beginning on or after 1 July 2014).

· IFRS 9 ''Financial Instruments'' (issued 12 November 2009) and subsequent amendments (amendments to IFRS 9 and IFRS 7 issued 16 December 2011) (effective for annual periods beginning on or after 1 January 2015).

· Annual Improvements to IFRSs 2010-2012 Cycle (issued on 12 December 2013) (effective for annual periods beginning on or after 1 July 2014).

· Annual Improvements to IFRSs 2011-2013 Cycle (issued on 12 December 2013) (effective for annual periods beginning on or after 1 July 2014).

New IFRICs

· IFRIC 21 ''Levies'' (effective as from the latest of the commencement date of its first annual period beginning on or after 1 January 2014).

The Company expects that the adoption of these standards or interpretations in future periods will not have a material effect on the financial statements of the Company.

2.2 Consolidation

(a) Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control.

De-facto control may arise in circumstances where the size of the Group's voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.

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.

The Group applies the acquisition method 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. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.

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 in profit or loss. 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 net identifiable 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.

Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Associates

Associates are all 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 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 income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other 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 other 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 amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of associates' in the income statement.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate 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. Dilution gains and losses arising in investments in associates are recognised in the income statement.

2.3 Investments in subsidiary companies

Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified. This policy only applies to the "Company" financial statements.

2.4 Interest in joint ventures

A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control that is when the strategic, financial and operating policy decisions relating to the activities the joint venture require the unanimous consent of the parties sharing control.

Where a group entity undertakes its activities under joint venture arrangements directly, the Group's share of jointly controlled assets and any liabilities incurred jointly with other ventures are recognised in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group's share of the output of jointly controlled assets, and its share of joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured reliably.

The Group undertakes joint venture arrangements that involve the establishment of separate entity in which each venturer has an interest (jointly controlled entity). The Group reports its interests in jointly controlled entities using the proportionate consolidation method of accounting.

Any goodwill arising on the acquisition of the Group's interest in a jointly controlled entity is accounted for in accordance with the Group's accounting policy for goodwill arising on the acquisition of a subsidiary.

Where the Group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the extent of the Group's interest in the joint venture.

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 steering committee that makes strategic decisions.

2.6 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in 'Euro' which is the 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 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, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. 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'.

 (c) Group companies

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

I. 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;

II. 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 rate on the dates of the transactions); and

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

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

2.7 Property, plant and equipment

Property, plant and equipment are stated at historical 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.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

· Plant and machinery 5-10 years

· Motor vehicles 5 years

· Furniture, fixtures and office equipment 5-10 years

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 disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains - net' in the income statement.

2.8 Intangible assets

(a) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the acquired interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

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) Permits and rights

Permits and rights are capitalised as intangible assets which relate to mineral rights acquired and permits in respect of projects that are at the pre-development stage. No depreciation charge is recognised in respect of these intangible assets. Once the Group receives those permits, the intangible assets relating to permits will be depreciated over the time the Group has the right to use them.

2.9 Impairment of non-financial assets

Assets that have an indefinite useful life - for example, goodwill or intangible assets not ready to use - are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation 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 other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.10 Financial assets

2.10.1 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.

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

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. 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.

(b) 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 end of the reporting period. These are classified as non-current assets. The Group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the statement of financial position (Notes 2.13 and 2.14).

(c) 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 it within 12 months of the end of the reporting period.

2.10.2 Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are 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 investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. 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 the 'financial assets at fair value through profit or loss' category are presented in the income statement within 'other (losses)/gains - net' in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income statement as part of other income when the Group's right to receive payments is established.

Changes in the fair value of 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 income statement as part of finance 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.

2.11 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

2.12 Impairment of financial assets

(a) Assets carried at amortised cost

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

Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For the loans and receivables category, the amount of the loss 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 carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. 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 consolidated income statement.

(b) 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. For debt securities, the group uses the criteria referred to in (a) above. In the case of equity investments classified as available for sale, 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 for available-for-sale financial assets, 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. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the income statement, the impairment loss is reversed through the income statement.

2.13 Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), 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.

2.14 Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand and in bank including deposits held at call with banks.

2.15 Share capital

Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the Company and the nominal value of the share capital being issued is taken to the share premium account.

Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds in the share premium account.

2.16 Trade and other payables

Trade and other 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 (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.17 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extend there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised over the period of the facility to which it relates.

Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premium relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings, finance lease charges and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.

Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

2.18 Derivatives

Derivative financial instruments are initially accounted for at cost and subsequently measured at fair value. Fair value is calculated using the Black Scholes valuation method. Derivatives are recorded as assets when their fair value is positive and as liabilities when their fair value is negative. The adjustments on the fair value of derivatives held at fair value through profit or loss are transferred to profit or loss.

2.19 Current and deferred income tax

The tax expense for the period comprises current and 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.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is also not recognised 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. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income 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 income tax assets and liabilities relate to income 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.

2.20 Share-based payments

The Group operates a share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The fair value is measured using the Black Scholes pricing model. The inputs used in the model are based on management's best estimates for the effects of non-transferability, exercise restrictions and behavioural considerations.

Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

2.21 Provisions

Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.22 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in other long term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term.

2.23 Revenue recognition

Sales of services

The Group sells services in relation to maintenance of accounting records, management, technical, administrative support and other services to other companies. Revenue is recognised in the accounting period in which the services are rendered.

2.24 Interest income

Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognised using the original effective interest rate.

2.25 Dividend income

Dividend income is recognised when the right to receive payment is established.

2.26 Dividend distribution

Dividend distributions to the Company's shareholders are recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders. No dividend has been paid by the Company since its incorporation.

2.27 Exploration costs

The Company expenses exploration expenditure as incurred.

Under the Group's accounting policy, exploration expenditure is not capitalised until the point is reached at which there is a high degree of confidence in the project's viability and it is considered probable that future economic benefits will flow to the Group. Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. If a project does not prove viable, all irrecoverable costs associated with the project net of any related impairment provisions are written off.

2.28 Amendment of financial statements after issue

The board of directors have the power to amend the financial statements after issue.

3. Financial Risk Management

3.1 Financial risk factors

Risk management is overseen by the audit and financial risk committee (AFRC) under the board of directors. The AFRC oversees the risk management policies employed by the Group to identify, evaluate and hedge financial risks, in close co-operation with the Group's operating units. The Group is exposed to liquidity risk, credit risk, interest rate risk, operational risk, compliance risk, litigation risk, reputation risk and currency risk arising from the financial instruments it holds.

The risk management policies employed by the Group to manage these risks are discussed below:

(a) Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash to meet liabilities when due. Cash flow forecasting is performed in the operating entities of the Group in and aggregated by Group finance. Group finance monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs.

The financial information has been prepared on the going concern basis, the validity of which depends principally on the availability of subsequent funding to extract the resource or alternatively on the availability of funding to extend the Group's exploration activities. The financial information does not include any adjustment that would arise from a failure to complete the above.

The following tables detail the Group's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes principal cash flows. A breakdown of the balances is shown in Notes 22 and 23.

 (b) Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group's measurement currency. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the US Dollar, the Canadian Dollar and the British Pound. The Group's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Sensitivity analysis

A 10% strengthening of the Euro against the following currencies at 31 December 2013 would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. For a 10% weakening of the Euro against the relevant currency, there would be an equal and opposite impact on profit or loss and other equity.

(c) Credit risk

Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The Company has no significant concentration of credit risk. The Company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and monitors on a continuous basis the ageing profile of its receivables. The Company has policies to limit the amount of credit exposure to any financial institution.

Except as detailed in the following table, the carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the maximum credit exposure without taking account of the value of any collateral obtained:

There are no collaterals held in respect of these financial instruments and there are no financial assets that are past due or impaired as at 31 December 2013.

(d) Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's Management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

At the reporting date the interest rate profile of interest‑ bearing financial instruments was:

Sensitivity analysis

An increase of 100 basis points in interest rates at 31 December 2013 would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and other equity.

(e) Operational risk

Operational risk is the risk that derives from the deficiencies relating to the Company's information technology and control systems as well as the risk of human error and natural disasters. The Company's systems are evaluated, maintained and upgraded continuously.

The financial information has been prepared on the going concern basis, the validity of which depends principally on obtaining the necessary mining licences. The financial information does not include any adjustment that would arise from a failure to complete the above. Changes in future conditions could require write downs of the carrying values of property, plant and equipment and/or intangible assets.

(f) Compliance risk

Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non‑compliance with laws and regulations. The Company has systems in place to mitigate this risk, including seeking advice from external legal and regulatory advisors in each jurisdiction.

(g) Litigation risk

Litigation risk is the risk of financial loss, interruption of the Company's operations or any other undesirable situation that arises from the possibility of non‑execution or violation of legal contracts and consequentially of lawsuits. The risk is restricted through the contracts used by the Company to execute its operations.

3.2 Capital risk management

The Group considers its capital structure to consist of share capital, share premium and share options reserve. The Group's objectives when managing capital are to safeguard the group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group is not subject to any externally imposed capital requirements.

In order to maintain or adjust the capital structure, the Group issues new shares. The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimisation of the debt and equity balance. The AFRC reviews the capital structure on a continuing basis.

3.3 Critical accounting estimates and judgements

The fair values of the Groups' financial assets and liabilities approximate to their carrying amounts at the reporting date. Estimates and judgments 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.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(a) Income taxes

Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Capitalisation of exploration and evaluation costs

Under the Group's accounting policy, exploration and evaluation expenditure is not capitalised until the point is reached at which there is a high degree of confidence in the project's viability and it is considered probable that future economic benefits will flow to the Group.

Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. If a project does not prove viable, all irrecoverable costs associated with the project net of any related impairment provisions are written off.

(b) Impairment review of asset carrying values

Events or changes in circumstances can give rise to significant impairment charges or reversals of impairment in a particular year. Where the recoverable amounts of Group cash generating units are assessed by analyses of discounted cash flows, the resulting valuations are particularly sensitive to changes in estimates of long term commodity prices, exchange rates, operating costs, the grouping of assets within cash-generating units and discount rates.

(c) Contingencies

Material contingencies facing the Group are set out in Note 27 of the consolidated financial statements. A contingent liability arises where:

i) a past event has taken place for which the outcome will be confirmed only by the occurrence or non-occurrence of one or more uncertain events outside of the control of the Group; or

ii) a present obligation exists but is not recognised because it is not probable that an outflow of resources will be required to settle the obligation.

A provision is made when a loss to the Group is likely to crystallise. The assessment of the existence of a contingency and its likely outcome, particularly if it is considered that a provision might be necessary, involves significant judgment taking all relevant factors into account.

(d) Share-based compensation benefits

Share-based compensation benefits are accounted for in accordance with the fair value recognition provisions of IFRS 2 'Share-based Payment'. As such, share-based compensation expense for equity-settled share-based payments is measured at the grant date based on the fair value of the award and is recognized as an expense over the vesting period. The fair value of such share-based awards at the grant date is measured using the Black Scholes pricing model. The inputs used in the model are based on management's best estimates for the effects of non-transferability, exercise restrictions, behavioural considerations and expected volatility.

4. Business and geographical segments

Business segments

The Group has only one distinct business segment, being that of mineral exploration and development.

Geographical segments

The Group's exploration activities are located in Cyprus, Spain and Slovakia and its administration is based in Cyprus.

2013