Atalaya Mining Regulatory News (ATYM)

EMED MINING HALF YEARLY REPORT11 August 2011

EMED Mining Public Limited (AIM: EMED, TSX: EMD) ("EMED Mining" or "the Company"), the Europe-based minerals development and exploration company, announces its unaudited financial results for the three months ended 30 June 2011 and its unaudited interim results for the half-year ended 30 June 2011.

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

Enquiries:

EMED MINING` PUBLIC LIMITED

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

for the six months ended 30 JuNE 2011

(uNAUDITED)

The accompanying notes form part of these condensed interim consolidated financial statements.

EMED MINING PUBLIC LIMITED

CONDENSED interim CONSOLIDATED STATEMENTs OF FINANCIAL POSITION

As at 30 JUNE 2011

(UNaudited)

The accompanying notes form part of these condensed interim consolidated financial statements.

EMED MINING PUBLIC LIMITED

CONDENSED interim CONSOLIDATED STATEMENTs OF CHANGES IN EQUITY

For the six months ended 30 JUNE 2011

(UNAUDITED)

The accompanying notes form part of these condensed interim consolidated financial statements.

EMED MINING PUBLIC LIMITED

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended 30 june 2011

(unaudited)

The accompanying notes form part of these condensed interim consolidated financial statements

EMED MINING PUBLIC LIMITED

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2011

(UNAUDITED)

1 General information

Country of incorporation

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

Principal activities

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

2 Basis of preparation and accounting policies

Basis of preparation

The condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standards (IFRS) including International Accounting Standard 34 "Interim Financial Reporting" and using the historical cost convention.

These condensed interim consolidated financial statements ('the statements") are unaudited and include the financial statements of the Company and its subsidiary undertakings. They have been prepared using accounting bases and policies consistent with those used in the preparation of the consolidated financial statements of the Company and the Group for the year ended 31 December 2010. These condensed interim consolidated financial statements do not include all of the disclosures required for annual financial statements, and accordingly, should be read in conjunction with the consolidated financial statements and other information set out in the Company's 31 December 2010 Annual Report.

Going concern

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

The financial statements have been prepared on a going concern basis, the validity of which depends principally on the discovery of economically viable mineral deposits, obtaining the necessary mining licences and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Company's exploration activities. The financial statements do not include any adjustment that would arise from a failure to complete either option. Changes in future conditions could require write downs of the carrying values of property, plant and equipment, intangible assets and deferred tax.

Use and revision of accounting estimates

The preparation of the condensed interim consolidated financial statements requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Adoption of new and revised International Financial Reporting Standards (IFRSs)

The Group has adopted all the new and revised IFRSs and International Accounting Standards (IAS) which are relevant to its operations and are effective for accounting periods commencing on 1 January 2011.

The adoption of these Standards did not have a material effect on the condensed interim consolidated financial statements.

At the date of authorisation of these condensed interim consolidated financial statements some Standards were in issue but not yet effective. The Board of Directors expects that the adoption of these Standards in future periods will not have a material effect on the consolidated financial statements of the Group.

Accounting policies

The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial of the Group.

Basis of consolidation

The condensed interim consolidated financial statements incorporate the interim financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The interim financial statements of all the Group companies are prepared using uniform accounting policies. All inter-company transactions and balances between Group companies have been eliminated during consolidation.

Business Combinations:

(i) Acquisitions

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

(ii) Goodwill

Purchased goodwill is capitalized and classified as an asset on the interim condensed consolidated statement of financial position. Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.

Goodwill is reviewed for impairment on an annual basis. When the directors consider the initial value of the acquisition to be negligible, the goodwill is written off to the consolidated statement of comprehensive income immediately. Trading results of acquired subsidiary undertakings are included from the date of acquisition. Goodwill is deemed to be impaired when the present value of the future cash flows expected to be derived is lower than the carrying value. Any impairment is charged to the condensed interim consolidated statement of comprehensive income immediately.

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.

Investments in associate companies

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 initially recognized at cost and are accounted for by the equity method of accounting.

Revenue recognition

Revenues earned by the Group are recognised on the following basis:

Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

Finance costs

Interest expense and other borrowing costs are charged to the statement of comprehensive income as incurred.

Foreign currency translation 

Tax

Current tax liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Currently enacted tax rates are used in the determination of deferred tax.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.

Acquisitions of assets

All assets acquired, including property, plant and equipment other than goodwill and intangibles, are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.

When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair value, except where the notional price at which they could be placed in the market is a better indication of fair value.

Transaction costs arising on the issue of equity instruments are recognised directly in equity subject to the extent of proceeds received, otherwise expense.

Exploration costs

The Group has adopted the provisions of IFRS 6 "Exploration for and Evaluation of Mineral Resources" for expenses and exploration costs. The Group's stage of operations as at the year end and as at the date of approval of these condensed interim consolidated financial statements have not yet met the criteria for capitalization of exploration costs. Care and maintenance costs are expensed in the statement of comprehensive income.

Property, plant and equipment

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

Depreciation is calculated on the straight‑line method to write off the cost of each asset to their residual values over their estimated useful life. The annual depreciation rates used are as follows:

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

Expenditure for repairs and maintenance of property, plant and equipment is charged to the statement of comprehensive income of the year in which they were incurred. The cost of major renovations and other subsequent expenditures are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.

Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds with carrying amount and are included in the condensed interim consolidated statement of comprehensive income.

Intangible assets

Intangible assets relate to mineral rights acquired and permits in respect of projects that are at the pre-development stage. Intangible assets acquired through a business combination or an asset acquisition are capitalised separately from goodwill if the asset is separable or arises from contractual or legal rights, and the fair value can be measured reliably on initial recognition. No depreciation charge is recognised in respect of intangible assets.

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation or 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).

Financial instruments

Financial assets and financial liabilities are recognised on the Group's statements of financial position when the Group becomes a party to the contractual provisions of the instrument.

Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise of cash at bank and on hand.

Investments

The Group classifies its investments in equity and debt securities in the following categories: financial assets at fair value through profit or loss, held‑to‑maturity investments and available for‑sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of investments at initial recognition and re‑evaluates this designation at every reporting date.

Trade and other receivables

Trade receivables are measured on initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Impairment of trade receivables is established when there is objective evidence as a result of a loss event that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The impairment is recognised in the statements of comprehensive income.

Available‑for‑sale financial assets

Investments intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, are classified as available‑for‑sale; these are included in non‑current assets unless management has the express intention of holding the investment for less than 12 months from the reporting date or unless they will need to be sold to raise operating capital, in which case they are included in current assets.

Regular way purchases and sales of investments are recognised on the trade date which is 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. Investments 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 carried at amortised cost using the effective interest method.

Realised and unrealised gains and losses arising from changes in the fair value of financial assets at fair value through profit or loss are included in the condensed interim consolidated statement of comprehensive income in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of available‑for‑sale financial assets are recognised in the condensed interim consolidated statement of comprehensive income and then in equity. When available‑for‑sale financial assets are sold or impaired, the accumulated fair value adjustments are included in the condensed interim consolidated statement of comprehensive income.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same and discounted cash flow analysis, making maximum use of market inputs and relying as little as possible on entity specific inputs. Equity investments for which fair values cannot be measured reliably are recognised at cost less impairment.

The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities 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 and loss. Impairment losses recognised on equity instruments are not subsequently reversed.

Borrowings

Borrowings are recorded initially as the proceeds are received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any differences between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.

Trade payables

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

Share capital

Ordinary shares are classified as equity.

Share based compensation benefits

IFRS 2 "Share‑based Payment" requires the recognition of equity‑settled share‑based payments at fair value at the date of grant and the recognition of liabilities for cash‑settled share‑based payments at the current fair value at each balance sheet date.

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, behavioural considerations and expected volatility.

Derecognition of financial assets and liabilities

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

·; the rights to receive cash flows from the asset have expired;

·; the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or

·; the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.

Provisions

Provisions are recognised when the Group has a present obligation, whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

Critical accounting estimates and judgements

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

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:

Income taxes

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

Capitalisation of exploration and evaluation costs

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

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

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.

Contingencies

Material contingencies facing the Group are set out in Note 19 of the condensed interim 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 judgement taking all relevant factors into account.

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.

Fair value estimation

The fair values of the Group's financial assets and liabilities approximate their carrying amounts at the balance sheet date.

Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current period.

3 Financial risk management

Financial risk factors

The Group is exposed to interest rate risk, liquidity risk and currency risk arising from the financial instruments that it may hold. The risk management policies employed by the Group to manage these risks are discussed below:

Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to interest rate risk in relation to its bank deposits. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

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 and other highly liquid current assets and by having available an adequate amount of committed credit facilities.

Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Canadian Dollar, United States Dollar, and Great Britain Pound. The Group's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly. The Group's policy is not to enter into any currency hedging transactions.

Capital risk management

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 optimization of the debt and equity balance. The Group's overall strategy remains unchanged from last year.

4 Tax

The Company is subject to corporation tax in Cyprus on its taxable profits at the rate of 10%. Under certain conditions interest income may be subject to defence contribution at the rate of 10%. In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 15%.

5 Business and geographical segments

Business segments

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

Geographical segments

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

Six months ended 30 June 2011

6 Loss per share

The calculation of the basic and diluted earnings per share attributable to the ordinary share holders of the parent is based on the following data:

The diluted loss per share is the same as the basic loss per share as the exercise of the share options would decrease the basic loss per share, thus being anti-dilutive.

7 Controlled entities

The Group has the following subsidiaries which have been consolidated in these condensed interim consolidated financial statements.

Eastern Mediterranean Resources Romania SRL was deregistered on 23 August 2010.

EMED Mining Armenia LLC was sold on 30 July 2010.

8 Property, plant and equipment

In May 2010, EMED Tartessus entered into an agreement with the Department of Social Security in Spain. Under the terms of the agreement, the Department of Social Security has agreed not to enforce the liens held by it against the relevant assets now owned by EMED Tartessus provided that the outstanding debt of €16.9 million is repaid in full over a five year period.

9 Intangible assets

Proyecto Rio Tinto ("Rio Tinto Mine")

On 11 May 2007, EMED Mining announced an opportunity for the Company to acquire, in stages, 100% of the Rio Tinto Mine through the Company's Spanish associate EMED Tartessus S.L.

The evaluation costs of the Rio Tinto Mine consist of all expenditures incurred up to 31 December 2007 that were necessary to evaluate the project and include the incorporation costs of the Spanish subsidiary EMED Tartessus S.L. These amounts were fully provided for as at 31 December 2007 since the Group had no beneficial interest if it did not exercise its option to acquire the Rio Tinto Mine. However, on 30 September 2008, the Company moved to 100% ownership by acquiring the remaining 49 per cent of the issued capital of EMED Tartessus S.L. which owns 100% of the Rio Tinto Mine. EMED Tartessus S.L. is now a wholly owned subsidiary. This resulted in reversing the previous year's provision of initial evaluation costs and has formed part of the Group's cost of investment.

EMED Tartessus SL has submitted its proposals for the restart of production to the Government. A shareholder meeting will be called at the appropriate time to seek approval to proceed if all conditions precedent have been met to the satisfaction of the Government and the Company.

As part of the purchase consideration, 39,140,000 new ordinary shares of the Company were issued to MRI Investment AG, a member of the MRI Group at an issue price of 21 pence each. This resulted in goodwill amounting to €9,333,000 which the Company has fully provided for since the mining licence has not yet been obtained.

Further deferred consideration totalling up to €43,883,382 is to be paid by the Group on the occurrence of the following events:

·; €8,833,333 when both (a) the authorisation from the Junta de Andalucía to restart mining activities in the Rio Tinto Mine has been granted and (b) EMED Tartessus or another company in the Group has secured senior debt finance and guarantee facilities for a sum sufficient for the acquisition and re-start of mining operations at the Mine. These milestones will effectively remain a matter of discretion of the Company and will not in practice be triggered until approval from the Company's shareholders has been received for the restart;

·; with the balance of the consideration being paid in equal annual or quarterly instalments over the following six years (the "Payment Period"); and

In consideration for agreeing to defer the above instalments over 6 years and for MRI's consent to the arrangements being entered into in connection with the Convertible Loan Facility, the Company agreed to potentially pay further deferred consideration of up to €15,900,000 in regular instalments over the Payment Period depending upon the price of copper. Any such additional payment will only be made if, during the relevant period, the average price of copper per tonne is $6,613.86 or more ($3.00/lb).

The Company also acquired the benefit of certain loans owed to members of the MRI Group which were incurred in relation to the operation of the Rio Tinto Mine amounting to €9,116,617. These loans have been acquired at their face value, such consideration to be paid once the authorisation from the Junta de Andalucía to restart mining activities in the Rio Tinto Mine has been granted and Restart has been achieved.

The funds required to make these payments will be sourced from planned banking facilities and from project cash flow.

The restart of mining operations remains subject to the following conditions:

·; Regulatory approvals by the Junta de Andalucía Government, support of the local community and approvals by the relevant statutory authorities in respect of performance bonds;

·; Settlement satisfactory to EMED Mining of the Rio Tinto Mine vendor's liabilities, liens and contractual arrangements with a number of third parties including landholders. These various obligations arose over several years as a result of the funding of ongoing care and maintenance, bankruptcy and litigation amongst some parties;

·; Completion of technical due diligence for:

i. planning the restart of the mine, processing plant and product marketing operations;

ii. planning for a fast-track approach to site rehabilitation where reasonable, to be undertaken concurrently with ongoing long-term production; and

iii. completion of all due diligence to EMED Mining's satisfaction including environmental considerations and infrastructure needs.

Carrying Value of Intangible Assets

The ultimate recoverability of balances carried forward in relation to areas of interest or all such assets including intangibles is dependent on successful development, and commercial exploitation or, alternatively sale of the respective areas. The Company conducts impairment testing on an annual basis unless indicators of impairment are present at the reporting date.

In considering the carrying value of the assets at the Rio Tinto Copper Project, including the intangible assets and any impairment thereof, the Company assessed the carrying values having regard to (a) the current recovery value (less costs to sell) and (b) the net present value of potential cash flows from operations. In both cases, the estimated net realisable values exceeded current carrying values and thus no impairment has been recognised.

Regua Tungsten Deposit in Portugal

On 21 September 2010, the Company announced that it had entered into an option agreement dated 15 September 2010, pursuant to which Iberian Resources Portugal Minerais Unipessoal LDA ("Iberian Portugal") has granted the Company an option to acquire a 100% interest in all of the assets (including the mineral licence and assets located thereon and all mining information) held by it in respect of the Regua Tungsten Deposit in Portugal. As consideration for the grant of the option, the Company has issued 2,500,000 Ordinary Shares at a deemed issue price of £0.105. The option may be exercised by the Company at any time prior to 31 December 2011 (the "Option Period") upon a further payment by the Company to Iberian Portugal of €750,000, in cash or Ordinary Shares at the Company's election. The Company will also make a cash payment of €100,000 or such higher amount to cover costs incurred by Iberian Portugal during the Option Period. In order to earn an interest in the Regua Tungsten Deposit, the Company must spend: (i) a minimum of €250,000 on the project during the Option Period, and (ii) a further €1,500,000 over the three years following the exercise of the option.

The acquisition of mineral rights consists of all expenditures incurred up to 31 December 2010 for the purchase of the above option. These amounts were impaired as at 31 December 2010 since the Company has no beneficial interest in the Regua Tungsten Deposit in Portugal until it exercises its option.

10 Investment in associates

11 Available‑for‑sale financial assets

Available‑for‑sale financial assets, comprising principally investment in funds, are fair valued annually at the end of each reporting period. For investments traded in active markets, fair value is determined by reference to Stock Exchange quoted bid prices. For other investments, fair value is estimated by reference to the current market value of similar instruments or by reference to the discounted cash flows of the underlying assets. Equity investments for which fair values cannot be measured reliably are recognised at cost less impairment.

Available‑for‑sale financial assets are classified as non‑current assets, unless they are expected to be realised within twelve months from the end of the reporting period or unless they will need to be sold to raise operating capital.

12 Trade and other receivables

13 Cash and cash equivalents

 Cash included in the cash flow statement comprise the following balance sheet amounts:

14 Share capital