Atalaya Mining Regulatory News (ATYM)

EMED Mining Public Limited

("EMED" or the "Company")

FINAL RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2014

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 2014.

The full audited report (as required by Toronto Stock Exchange), including consolidated Financial Statements, which appears below, is also available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.emed-mining.com.

Operational Highlights

· EMED rapidly progressed site development.

· The Company completed selection and hiring of operational personnel. In total, there are currently over 250 EMED employees and over 250 contractors on site.

· The Company initiated a detailed review of options to expand production with the goal of maximizing use of existing infrastructure.

· Ongoing infill drilling campaigns with over 10,000 m drilled to date targeting a significant increase in open pittable reserves.

· On 11 April 2014, the President of the Government of Andalucía authorised the transfer of the Riotinto Mineral Rights thus granting Administrative Standing (AS) for the project. This followed the receipt of the Unified Environmental Authorisation ("AAU") on 28 March 2014.

· Ronnie Beevor, Isaac Querub, Ashwath Mehra and Bob Francis resigned from the Board. Roger Davey was appointed Chairman and Alberto Lavandeira was appointed Managing Director and CEO of the Company.

Financing Highlights

· On 24 December 2014, the Company agreed to a Loan for up to US$30 million with Trafigura Beheer BV ("Trafigura"), Orion Mine Finance (Master) Fund I LP ("Orion") and Hong Kong Xiangguang International Holdings Limited ("Hong Kong Xiangguang"), an affiliate of Yanggu Xiangguang Copper Co. Limited ("XGC").

· In June 2014, the Government of Andalucía announced the awarding of an €8.8 million grant to EMED Tartessus, in order to support the modernisation of Proyecto Riotinto facilities.

· On 15 August 2014, the Company completed a £13.1 million subscription with two cornerstone investors, XGC and Orion. The investors provided additional financing to the Company by way of the issue of in aggregate 181,200,000 new ordinary shares of 0.25 pence of the Company at 7.25 pence per share.

· Potential start-up capital expenditure savings for Phase 1 in the order of US$50M identified.

Post Period Events

· The Resolution containing the granting of the Mining Permit for the Proyecto Riotinto was signed on 23 January 2015.

· This global Mining Permit included the approval of the Restoration Plan.

· The granting of the Mining Permit and approval of the Restoration Plan were the last significant regulatory approvals required to be obtained by the Group before normal mining and processing operations could commence at Proyecto Riotinto.

· The application for the license to initiate mining activities was submitted to Minas de Riotinto town hall in March 2015.

· On 5 May 2015, the Company announced that it was in discussion with its three largest shareholders, Trafigura, Orion and Hong Kong Xiangguang (an affiliate of XGC), regarding a long term financing solution for the continued development of the Rio Tinto Copper Project and has agreed non-binding terms for an equity financing structure with several parties, principally including these investors. It is the intention of entering into binding documentation by mid-May 2015.

Enquiries

For further information on the Company's activities, visit www.emed-mining.com.

Report of the board of directors

For the year ended 31 December 2014

(All amounts in Euro 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 2014.

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 AIM Market 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 metals production operations in Europe, with an initial focus on copper. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in the European region.

Review of operations

During the period covered by this report, EMED has continued to focus on the restart of the mines at the Rio Tinto Copper Project ("Proyecto Riotinto") in Spain.

Proyecto Riotinto

EMED Mining, via its wholly-owned subsidiary EMED Tartessus, owns 100% of Proyecto Riotinto in Andalucía, Spain. The Group is the owner of the mine, the mineral rights and the processing plant and has now been awarded all the permits necessary to commence construction and ultimately the restart of operations.

Operations

EMED continues to rapidly progress site development. The Company has completed selection and hiring of operational personnel. In total, there are currently over 250 EMED employees and over 250 contractors on site. Project activities have focused on:

· Engineering, which is now complete.

· Procurement, which is also complete. New equipment has either arrived on site or is in transit.

· Refurbishment activities have been concentrated on primary crushing, screening area, milling and the flotation area.

· Refurbishment is expected to be completed during second quarter of 2015.

· Control and instrumentation equipment has arrived on site with installation activities progressing.

· Preliminary works at the tailings storage facilities are in progress to be fully operational before commissioning activities.

In addition, the infrastructure development is progressing according to plan:

· Site is now connected to the power grid and construction power is available.

· Permanent operating power is under development.

· Main substation works are largely completed.

· Medium voltage switchgear has been delivered to site. Low voltage switchgear development is also in progress.

· Fresh and process water supplies are largely completed.

Phase 2 - Expansion Project

The Company has initiated a detailed review of options to expand production with the goal of maximizing use of existing infrastructure while capital intensity is maintained at similar levels to those achieved in Phase 1. Engineering studies will be reported once finalised and the Company believes similar low capital intensity can be maintained with the application of Phase 1 philosophy.

Exploration, geology and mining activities

Infill drilling campaigns are in progress with over 10,000 m drilled to date targeting a significant increase in open pittable reserves. The exploration department is now fully operational following the recruitment of the Company's exploration manager who brings over 30 years of practical experience.

Near-mine exploration activities are progressing with deep hole drilling and down hole geophysics targeting high grade extensional deposits at depth which were not contemplated in any previous estimates. Grass-root regional exploration is similarly initiated with specific attention to gravimetric anomalies identified in the Company's exploration licences.

Mining

The mining contractor is now fully mobilised on site and ready to operate and has acquired a new mining fleet that will be utilised for Phase 1 operations.

Permitting

The Mining Permit and approval of the rehabilitation plan were received by EMED during the first quarter of 2015. The application for the license to initiate mining activities was submitted to Minas de Riotinto town hall in March 2015. The approval process is regulated and it is not expected to interfere with site development activities. In addition, the Company has received the relevant permits for the use of explosives and the first blast since 2001 took place on 17 April 2015.

Grant approval

In June 2014, the Government of Andalucía announced the awarding of an €8.8 million grant to EMED Tartessus, in order to support the modernisation of Proyecto Riotinto facilities. The grant is constituted with EU funds and administered by the Junta de Andalucía through the Agencia IDEA ("Andalusian Innovation and Development Agency") and is aimed at supporting investment initiatives in Andalucía that show strong potential for innovation and job creation. The grant will be payable as a reimbursement of EMED's expenditure as project execution progresses and after due process is completed, which is expected to be during the last quarter of 2015.

Corporate

Unsecured bridge finance facility

On 24 December 2014, the Company agreed to an unsecured bridging finance facility for up to US$30 million (the "Loan") with Trafigura Beheer BV ("Trafigura"), Orion Mine Finance (Master) Fund I LP ("Orion") and Hong Kong Xiangguang International Holdings Limited ("Hong Kong Xiangguang"), an affiliate of Yanggu Xiangguang Copper Co. Limited ("XGC") (Trafigura, Orion and Hong Kong Xiangguang being the "Lenders"). The proceeds of the Loan provide sufficient working capital for the Company to continue with its development of Proyecto Riotinto whilst it finalises its negotiations with key stakeholders in relation to funding the Phase 1 development plans for the Project.

The initial instalment of the Loan of US$24 million was drawn down on 30 December 2014, with the remaining $6m drawn down in early April 2015. The Loan was repayable on the earliest of three months following the receipt of the initial Loan funds (the "maturity Date"), a change of control of the Company or the Company raising debt or equity funding in an amount equal to or greater than the amounts outstanding under the loan agreement. The Company pays interest on the outstanding amount of the Loan at a rate of 10% per annum and there are no penalties for early repayment of the Loan, but in the event of a payment default the interest rate would rise to 12% per annum. Each Lender was paid an arrangement fee of 2.5% of the amount of the Loan advanced by that Lender and the Company reimbursed the due diligence and associated costs of the Lenders in connection with the Loan and other historic costs up to an aggregate amount of US$1.5 million, of which US$1 million will be paid out of the proceeds of the Loan and the balance of US$ 0.5 million will be added to the Loan and repaid at the time the Loan is repaid. Any additional costs of the Lenders will be deferred until such time as further finance is raised in excess of amounts outstanding under the loan agreement. Trafigura was also granted the right to appoint an observer to attend meetings of the Board of Directors of EMED for such time as Trafigura holds not less than 15% of the issued share capital of the Company. This is in addition to the existing rights of Orion and XGC who each have the right to appoint a Director to the Board.

On 27 March 2015, the Company agreed with the Lenders to extend the Maturity Date of the Loan (and therefore the Convertible Notes) by three months to 30 June 2015. In consideration for extending the term of the Loan, should a meeting of shareholders not be called by 30 April 2015 in order to approve a long term funding package, the Company has agreed to pay an extension fee of 0.5% on all outstanding amounts (including accrued interest and costs) owed to the Lenders pursuant to the Loan and the Convertible Notes. Additionally, a further fee equal to 1% would be payable should a meeting of shareholders not be called by 31 May 2015. All other repayment terms of the Loan and Convertible Notes remain unchanged.

Convertible Notes

As part of the Loan agreed on 24 December 2014 and its extension on 27 March 2015, the Company agreed with Orion and XGC that the maturity date of the Convertible Note is extended to 30 June 2015 to be consistent with the date for repayment of the Loan.

Funding

On 15 August 2014, the Company completed a £13.1 million subscription with two cornerstone investors, XGC and Orion. The agreement set out the basis on which XGC, through its wholly owned subsidiary Hong Kong Xiangguang International Holdings Limited, and Orion, provided additional financing to the Company by way of the issue of in aggregate 181,200,000 new ordinary shares of 0.25 pence of the Company ("Subscription") at 7.25 pence per share. The funding was for general working capital purposes and to continue activities on site.

Board Changes

On 20 March 2014, Mr Isaac Querub was appointed as Managing Director and CEO of the Company. In addition, Mr Alberto Lavandeira was appointed as 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.

On 24 December 2014, and as a condition of the Loan, as the Company moves towards a new phase from the development to the operation of a major copper mine, a number of Board changes were affected to reflect this change. Accordingly Ronnie Beevor, Isaac Querub, Ashwath Mehra and Bob Francis resigned from the Board. Roger Davey was appointed Chairman and Alberto Lavandeira was appointed Managing Director and CEO of the Company.

Shareholder Changes

On 31 July 2014, the Company was notified that Trafigura Beheer B.V. ("Trafigura"), through its wholly owned indirect subsidiary Urion Holdings (Malta) Limited ("Urion"), acquired 202,022,016 ordinary shares ("Ordinary Shares") of EMED effective 30 July 2014, pursuant to private transactions. Trafigura exercised control or direction over an aggregate of 228,173,516 Ordinary Shares on the date of the acquisition. On 6 November 2014, the Company was notified that Trafigura had, through its wholly owned subsidiary Urion, acquired 19,565,000 ordinary shares of the Company on 3 November 2014. Trafigura currently exercises control or direction over an aggregate of 278,594,997 ordinary shares, representing approximately 19.35% of the outstanding ordinary shares.

Slovakia - Detva Gold Project

The permitting process has been suspended since December 2013 and EMED Slovakia has been requested to submit further documentation, including a full Environmental Impact Assessment. In September 2014, the Slovak Parliament approved the ban of cyanide use in gold processing. The Company continues to review its options, which include the sale and/or joint venture of its interests in Slovakia and is currently in discussions with interested parties.

In December 2014, EMED entered into a conditional Earn-in Agreement with Prospech Ltd ("Prospech"), a private Australian exploration company, in relation to two exploration licences held by EMED's 100% owned Slovakian subsidiary, Slovenske Kovy s.r.o. Prospech will invest up to a €1 million over a three-year period in return for an 81% interest in Slovenske Kovy.

Cyprus

In Cyprus, EMED holds ten exploration licences totalling 32.7sq.km. They comprise Cu-Zn resources and prospective zones. Currently, the Company is in joint venture discussions with interested parties.

Results

During 2014, the Group incurred a loss of €11.2 million (2013: €18.9 million), of which exploration and care and maintenance expenses were €5.9 million (2013: €4.2 million) and administration expenses were €5.6 million (2013: €5.5 million). Tax charge in 2014 was € 0.02 million (2013: €6.4 million, as a result of the derecognition of the deferred tax asset on 31 December 2014) with net finance costs decreasing from €2.5 million in 2013 to €0.5 million in 2014, as a result of the gain on fair value on conversion of the convertible note of €1.9m. Furthermore, as a result of the transfer of investment in associate to available-for-sale investments a gain of €1.2 million was incurred this year (2013: €NIL).

The net loss for the year is summarised as follows:

Total assets were €107.2 million as at 31 December 2014, compared to €77.2 million as at 31 December 2013. The Group's significant assets are its mineral properties and mining plant, property and equipment at Proyecto Riotinto. The increase is mainly due to increase in property, plant and machinery of €12.2 million, increase in intangibles of €2.8 million, and an increase in cash and cash equivalents of €12.5 million, and increase in debtors by €1.5 million. Additionally this year, there was a transfer from the investment of associate to available-for-sale investment amounting €1.0 million.

The increase in property, plant and equipment is primarily due to the execution of works for the restart of activities at Proyecto Riotinto: machinery, equipment, improvement of facilities, 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, permitting and other consultants to develop the necessary technical evaluation and plans for operational and environmental requirements, for the project restart, including restoration and water management.

Non-current liabilities stood at €4.6 million on 31 December 2014 compared to €21 million on 31 December 2013. The decrease is due to the reduction in the non-current element of the debt with the Department of Social Security in Spain 31 December 2014: €4.6 million (2013: €7.7 million), and the reclassification of the Convertible Note liability from non-current to current 31 December 2014: € Nil (2013: €13.3 million).

Current liabilities stood at €45.7 million as at 31 December 2014 (2013: €4.5 million). The increase of €41.2 million relates to the Convertible Note liability amounting to €14.1 million (2013: € Nil), the bridge loan facility amounted €18.6 million, an increase of €1.2 million in the current portion of the debt with the Department of Social Security in Spain, an increase by €1.2 million in accruals, and an increase by €6.1 million in trade and other payables.

Share capital

Details on authorized and issued share capital are disclosed in Note 21 of the consolidated financial statements. At31 December 2014, EMED Mining had a total of 1,440 million shares on issue (1,474 million shares fully-diluted).

Future developments

The Group's key near-term priority is to safely and efficiently start copper production at Proyecto Riotinto, 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.

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 Alberto Lavandeira who was appointed as Executive Director on 14 April 2014 and Managing Director and CEO of EMED on 24 December 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.

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

Non-Executive Chairman, 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 and Condor Gold Plc.

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).

Alberto Lavandeira

Managing Director and CEO, Spanish citizen based in Spain

Mr. Lavandeira brings to EMED Mining experience of over 36 years operating and developing mining projects. As a Director of Samref Overseas S.A from 2007 to early 2014, he represented 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.

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, 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.

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:

* 2m shares held in escrow

** Shares held by the companies the directors represent

 (1) Yanggu Xiangguang Copper Co. Ltd

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

On 28 December 2011, 400,000 options were issued to R. Davey, Non-Executive Chairman. 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 14 April 2014, 6,000,000 options were issued to A. Lavandeira, 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 2014 is set out below.

(1) Mr Isaac Querub retired during 2014 and this was his contractual entitlement upon his resignation.

(1) Mr Anagnostaras-Adams retired during 2013 and this was, in the main, his contractual entitlement upon his resignation.

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 2014 were:

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 three non-executive Directors, who bring a breadth of experience and knowledge, all of whom are independent of management and two 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 Committee ("AFRC") comprises Mr R. Davey (Chair) (appointed Chairman 24 December 2014), Mr Harry Liu (appointed 24 December 2014) and Dr. J. Sierra Lopez (appointed 24 December 2014). Messrs R. Francis (former Chairman) and A. Mehra resigned on 24 December 2014. 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. Davey (Chair) (appointed Chairman 24 December 2014), Mr H. Liu and Dr. J. Sierra Lopez (appointed 24 December 2014). Messrs R. Beevor (former Chairman) and A. Mehra resigned on 24 December 2014. 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 Risks Committee comprises Mr R. Davey (Chair), Mr H. Liu (appointed 24 December 2014) and Dr. J. Sierra Lopez. ). Mr A. Mehra resigned on 24 December 2014. 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 2014 and 2013 financial years.

Subsequent events

On 21 January 2015, EMED completed the purchase of the remaining 5% of the issued share capital of Eastern Mediterranean Minerals (Cyprus) Ltd ("EMM"), held by Hellenic Mining Public Company Ltd, for a consideration of €7,500. EMED now holds 100% of the issued share capital of EMM.

The Resolution containing the granting of the Mining Permit for the Proyecto Riotinto was signed on 23 January 2015. This global Mining Permit included the approval of the Restoration Plan. The granting of the Mining Permit and approval of the Restoration Plan were the last significant regulatory approvals required to be obtained by the Group before normal mining and processing operations could commence at Proyecto Riotinto.

In March 2015, the restoration bond of €13 million was presented to, and approved by, the relevant regulatory authority at the Junta de Andalucía. The successful lodging of this bond was a condition precedent to be fulfilled at least one month prior to the start of production activities at Proyecto Riotinto. The bond did not require any use of the cash reserves of the Company as originally been anticipated in earlier capital cost estimates.

On 27 March 2015, the Company agreed with the Lenders that the Loan repayment terms be extended to 30 June 2015. In consideration for extending the term of the Loan, should a meeting of shareholders not be called by 30 April 2015 in order to approve a long term funding package, the Company has agreed to pay an extension fee of 0.5% on all outstanding amounts (including accrued interest and costs) owed to the Lenders pursuant to the Loan and the Convertible Notes. Additionally, a further fee equal to 1% would be payable should a meeting of shareholders not be called by 31 May 2015. All other repayment terms of the Loan and Convertible Notes remain unchanged.

As announced on 5 May 2015, the Company remains in dialogue with its three largest shareholders, Trafigura, Orion and Hong Kong Xiangguang, an affiliate of XGC with regard to a long term financing solution for the continued development of the Rio Tinto Copper Project. The Company has agreed non-binding terms with regards to an equity financing structure with several parties, principally including these investors and intends to enter into binding documentation by mid-May 2015.

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, 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

8 May 2015

Independent Auditor's Report

To the shareholders of EMED Mining Public Limited

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of EMED Mining Public Limited (the "Company") and its subsidiaries (together with the Company, the "Group"), which comprise the consolidated statements of financial position as at 31 December 2014 and 2013, and the consolidated income statements, statements of changes in equity and statements of cash flows for the years 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 audits. We conducted our audits 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 and its subsidiaries as at 31 December 2014 and 2013 and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Ontario

8 May 2015

Independent auditor's report

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 14 to 51 which comprise the consolidated statement of financial position as at 31 December 2014, 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 2014, 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.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

Statements of financial position

The consolidated financial statements were authorised for issue by the board of directors on 8 May 2015 and were signed on its behalf.

Consolidated statements of changes in equity

Years ended 31 December 2014 and 2013

Company statements of changes in equity

Years ended 31 December 2014 and 2013

Consolidated statements of cash flows

Years ended 31 December 2014 and 2013

Company statements of cash flows

Years ended 31 December 2014 and 2013

Notes to the consolidated financial statements

Years ended 31 December 2014 and 2013

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 metals production operations in Europe, with an initial focus on copper. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in the European region.

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 and continuation of operations

The Company is primarily engaged in the exploration, development and permitting of its mineral properties. The Company is considered to be in the exploration and development stage given that its mineral properties are not yet in production and, to date, have not earned any significant revenues. The recoverability of amounts shown for exploration and evaluation assets is dependent on maintaining the necessary permits to operate a mine, obtaining the financing to complete development, and future profitable production.

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes that the Company will realize its assets and discharge its liabilities in the normal course of business. Management has carried out an assessment of the going concern assumption and has concluded that the Company's available cash and cash equivalents plus the funds to be obtained from the financing, disclosed in Note 31, will be sufficient for the Company to continue operating for the ensuing twelve months. These consolidated financial statements do not give effect to any adjustment, which would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different than those reflected in the consolidated financial statements.

Changes in accounting policy and disclosures

During the current year the Company adopted all the new and revised International Financial Reporting Standards (IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2014. This adoption did not have a material effect on the accounting policies of the Company. At the date of approval of these consolidated financial statements, standards and interpretations were issued by the International Accounting Standards Board which were not yet effective. Some of them were adopted by the European Union and others not yet.

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

(i) Standards and Interpretations adopted by the EU

There were new standards, amendments or IFRS interpretations adopted by the EU by the date of approval of the consolidated financial statements.

(ii) Standards and Interpretations not adopted by the EU

New standards

Amendments

The Company expects that the adoption of these standards or interpretations in future periods will not have a material effect on the consolidated 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 consolidated financial statements only to the extent of unrelated investors' 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 arrangements

A joint arrangement 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 arrangement require the unanimous consent of the parties sharing control.

Where a group entity undertakes its activities under joint 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 arrangement 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 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 equity method of accounting.

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 arrangement.

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 functional and 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 subsequently reversed. 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 extent 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. 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 tax asset is realised or the deferred income tax liability is settled. Deferred 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 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.

As at 31 December 2014, the Company had a cash and cash equivalents balance of €21.1M (31 December 2013 - €8.6M) to settle trade and other payables of €13M (31 December 2013 - €4.5M) and current portions of convertible notes and a bridge loan facility totalling €32.6M (31 December 2013 - €Nil). It is the Company's intention to mitigate this risk by raising financing as described in Note 31.

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 23, 24 and 25.

 (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 2014 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 2014.

(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 2014 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.

(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.

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

The Group monitors capital on the basis of the gearing ratio. The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.

The increase in the gearing ratio during 2014 resulted primarily from the bridge loan obtained in December. The proceeds of the loan provide sufficient working capital for the Company to continue with its development of Proyecto Riotinto whilst it finalises its negotiations with key stakeholders in relation to funding the Phase 1 development plans for the Project.

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.

(b) 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. a project does not prove viable, all irrecoverable costs associated with the project net of any related impairment provisions are written off.

(c) 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.

(d) Contingencies

Material contingencies facing the Group are set out in Note 29 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.

(e) 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.

(f) Going Concern

Determining whether there exists material uncertainty that casts significant doubt about the Company's ability to continue as a going concern requires management to exercise its judgement, in particular about its ability to obtain funds to continue operations.

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 and Spain and its administration is based in Cyprus.

2014

5. Other income

6. Expenses by nature

7. Employee benefit expense

8. Finance income

9. Finance costs

10. Tax

The tax on the Group's results before tax differs from the theoretical amount that would arise using the applicable tax rates as follows:

Due to tax losses sustained in the current and previous years, no tax liability arises on the Group. Under current legislation, tax losses may be carried forward and be set off against taxable income of the following years. As at 31 December 2014, the balance of tax losses which is available for offset against future taxable profits amounts to €52.6 million (2013: €50.9 million).