Atalaya Mining Regulatory News (ATYM)

21 Sep 2006 07:02

Eastern Mediterranean Res. Pblc LD21 September 2006 AIM: EMED 21 September 2006 INTERIM RESULTS TO 30 JUNE 2006 The Board of EMED Mining Public Limited (formerly Eastern MediterraneanResources Public Limited) ("EMED Mining" or the "Company") today announces itsunaudited interim results for the six months to 30 June 2006. The shareholdersof the Company yesterday approved the change of its name from EasternMediterranean Resources Public Limited to EMED Mining Public Limited. The Managing Director's Report and the Financial Statements follow. Ends Enquiries: EMED Mining Nabarro Wells Parkgreen CommunicationsAristidis (Harry) Anagnostaras-Adams Richard Swindells Ana Ribeiro+357 9945 7843 +44 (0)20 7710 7400 +44 (0)20 7493 3713www.emed-resources.comwww.emed.tv EMED MINING PUBLIC LIMITEDInterim Results for the Six Months to 30 June 2006 Report From The Managing Director Finance EMED Mining Public Limited ("EMED Mining") was incorporated in Cyprus inSeptember 2004 and listed on the Alternative Investment Market ("AIM") of theLondon Stock Exchange in May 2005. This followed the successful initial publicoffering of 28,155,555 shares at 8p to raise £2.25 million. Since incorporation EMED Mining has raised £4.25 million of which £1.25 millionwas still held as cash at 30 June 2006 which was in compliance with theCompany's budget. Market capitalisation was £6.8 million. For the six months to 30 June 2006, EMED Mining has incurred explorationexpenditure of £1,105,593 and net operating expenditure of £456,556. EMED Mining has taken a very conservative approach in its accounting policytowards exploration expenditure: all such expenditures are written off onacquisition or when incurred. This policy is a major factor in EMED Miningrecording a net loss for the period of £1,562,149. This loss is after havingtaken into account the write-off of the acquisition cost to EMED Mining ofdatabases, tenements and historical exploration costs carried in the books ofany acquired subsidiaries. - Acquisition cost of database £380,000- Exploration Expenditure to 30 June 2006 £725,593- Net Operating Expenditure for the period £456,556 - Loss for the period £1,562,149 The interim financial information is unaudited and does not constitute statutoryfinancial statements within the meaning of the Companies Law of Cyprus, Cap.113. Operational Update Cyprus: Copper Exploration Programmes: proceeding in accordance with thepublished schedule and the Company has commenced a Preliminary Feasibility Studyfor the development of the Klirou Copper-Zinc Project. This production proposalcould potentially start up in 2008 and generate sufficient cash flow to fund forsome years the Company's expanding exploration and other growth activities.Resources identified to date contain in-situ metal content of £100 million.Deep-penetrating geophysics has identified additional target zones. Slovakia: Gold exploration is at the stage of drilling the currently rated "top3 targets" Georgia: Gold exploration is at the stage of channel sampling to confirm RussianResources of 2.4 million ounces. Other areas targeted with the Eurasian Region: EMED Mining will continue to reinforce its position and support the mission ofestablishing operations in several different locations in Eurasia. Local teamsare based in each of Cyprus, Slovakia and Georgia. Reconnaissance andprospecting activities are advancing throughout Central Europe, Eastern Europe,Turkey, the Caucasus and the Middle East, pursuing specific belts ofmineralisation. Turkey and Bulgaria: Turkey and Bulgaria, are considered to be best served by the establishment of aseparately listed associate company. Accordingly, EMED Mining has formed KeffiMinerals Plc as a UK-registered holding company for the purposes of holding itsinterests in Turkey and Bulgaria. EMED Mining has 71% and intends to retain asignificant stake in the Company. Starvest, a natural resources investment fundholds 24% and Keffi Directors and management hold 5%. A proprietary database hasbeen acquired and clusters of tenements have been acquired. A separate management team is in place. EMED Mining will bring its technicalsupport and mining expertise into Keffi. Starvest has contributed seed capitalto Keffi and has confirmed its intention to support the Company's IPO. Subject to future stockmarket conditions, Keffi will seek admission to AIMwithin the next 12 months. Detailed announcements will be made with respect to each region as and whenrequired. Harry Anagnostaras-Adams +357 9945 7843 EMED MINING PUBLIC LIMITEDInterim Results for the Six Months to 30 June 2006 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Six Months Ended Six Months Ended Year 30 June 2006 30 June 2005 Ended (Unaudited) (Unaudited) 31 Dec 2005 Note GBP 000's GBP 000's GBP 000's Revenue - - - Amortisation of Goodwill (71) (585) (585)Exploration expenditure (1,034) (292) (1,120)Administration expenses (452) (205) (513)Finance income - - 23Finance costs (5) 15 (13) (Loss) before tax (1,562) (1,067) (2,208)Tax 5 - - (1) (Loss) after tax (1,562) (1,067) (2,209) Attributable to:Equity holders of the parent (1,548) (1,060) (2,142)Minority interest (14) (7) (67) Net (loss) for the period (1,562) (1,067) (2,209) Loss per share (pence) 13 (2.27) (1.89) (3.91) Diluted loss per share (pence) 13 (2.04) N/A N/A EMED MINING PUBLIC LIMITEDInterim Results for the Six Months to 30 June 2006 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1CONDENSED CONSOLIDATED BALANCE SHEET Six Months Ended Six Months Ended Year 30 June 2006 30 June 2005 Ended (Unaudited) (Unaudited) 31 Dec 2005 Note GBP 000's GBP 000's GBP 000's AssetsNon current assetsPlant and equipment 7 71 38 41 Total non current assets 71 38 41 Current assetsTrade and other receivables 9 41 284 46Bank and cash balances 10 1,277 1,660 971 Total current assets 1,318 1,944 1,017 Total assets 1,389 1,982 1,058 Equity and liabilitiesCapital and reservesShare capital 11 4,800 2,968 3,027Share options reserve 185 - 108Accumulated losses (3,687) (1,060) (2,142) Total equity attributable to 1,298 1,908 993equity holders of the parentMinority interest (39) (7) (65) Total capital and reserves 1,259 1,901 928 Current liabilitiesOther payables 12 130 81 130 Total current liabilities 130 81 130 Total equity and liabilities 1,389 1,982 1,058 EMED MINING PUBLIC LIMITEDInterim Results for the Six Months to 30 June 2006 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS C0NDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Option Share Share Option Forfeited Accum. Capital Premium Reserve Reserve Losses Total Note GBP 000's GBP 000's GBP 000's GBP 000's GBP 000's GBP 000's Balance at 31 Dec 2005 141 2,886 108 - (2,142) 993 Net loss for the period - - - - (1,562) (1,562)Minority interest - - - - 17 17Issue of shares 11 38 1,842 - - - 1,880Share issue costs - (107) - - - (107)Recognition of share based - - 77 - - 77payments Reserve transfer on shareoptions forfeited - - (6) 6 - - Balance at 30 June 2006 179 4,621 179 6 (3,687) 1,298 EMED MINING PUBLIC LIMITEDInterim Results for the Six Months to 30 June 2006 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATED CASH FLOW STATEMENT Six Months Ended Six Months Ended Year 30 June 2006 30 June 2005 Ended (Unaudited) (Unaudited) 31 Dec 2005 Note GBP 000's GBP 000's GBP 000'sCASH FLOWS FROM OPERATING ACTIVITIES (Loss) before tax (1,562) (1,067) (2,209)Adjustments for:Depreciation of property, plant and equipment 6 4 8Amortisation of goodwill 71 585 585Share based benefits 77 - 108Acquisition of data with settlement in shares 380 - 100Other 25 - -Interest income - - (10) (1,003) (478) (1,418) Changes in working capital:Increase (decrease) in receivables (5) (14) (24) Increase (decrease)in trade creditors - 68 118Cash flows used in operations (1,008) (424) (1,324)Tax paid - - (1) Net cash (used in) operating activities (1,008) (424) (1,325) CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of subsidiary (42) 5 5Purchase of property, plant and equipment 7 (37) (38) (46)Interest received - - 10 Net cash (used in) investing activities (79) (33) (31) CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of share capital 1,500 2,542 2,792Listing and issue costs (107) (425) (465) Net cash from financing activities 1,393 2,117 2,327 Net increase in cash and cash equivalents 306 1,660 971 CASH AND CASH EQUIVALENTS: At beginning of the period 971 - - At end of the period 10 1,277 1,660 971 EMED MINING PUBLIC LIMITED Interim Results for the Six Months to 30 June 2006 Notes to the condensed interim consolidated financial statements 1 General information Country of incorporation EMED Mining Public Limited (the 'Company") was incorporated in Cyprus as aprivate limited liability company in accordance with the provisions of theCyprus Companies Law, Cap. 113 and was converted to a public limited liabilitycompany at 17 September 2004. Its registered office is at 1 Lambousa Street,Nicosia, Cyprus. The Company was listed on the Alternative Investment Market ("AIM") of the London Stock Exchange in May 2005. The Company changed its name to, firstly, Mediterranean Minerals Public Limitedon 1 March 2005 and, subsequently, to Eastern Mediterranean Resources PublicLimited on 11 March 2005 and to EMED Mining Public Limited on 20 September 2006. Principal activities The principal activity of the Company and its subsidiaries (the "Group") is toexplore for and develop natural resources, with a focus on base and preciousmetals in the regions of Central and Eastern Europe, Western Asia and the MiddleEast. 2 Basis of preparation and accounting policies Basis of preparation The consolidated financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRS) and the provisions of theCompanies Law of Cyprus, Cap. 113. The financial statements have been preparedunder the historical cost convention and on the basis of the principleaccounting policies set out below. These policies are consistent with thoseadopted for the preparation of the Group's financial statements for the yearended 31 December 2005 except as stated below: Adoption of new and revised International Financial Reporting Standards (IFRS)and Interpretations by the International Financial Reporting InterpretationsCommittee (IFRIC): During the current period the Company has adopted the new and revised IFRS'sthat are relevant to its operations and are applicable for periods beginning onor after 1 January 2006. This adoption had not a material effect on theCompany's accounting policies. The revised International Accounting Standards (IAS) and the new InternationalFinancial Reporting Standards (IFRS) that were applicable in the current periodfrom 1 January to 30 June 2006 are the following: • IAS 1 (revised) "Presentation of Financial Statements - Additional Disclosures on Equity" • IAS 19 (revised) "Employee Benefits" • IAS 21 (revised) "The effects of Changes in Foreign Exchange Rates - Translation of Foreign Operation" • IAS 39 and IFRS 4 (revised) "Financial Instruments: Recognition and Measurement" and "Insurance Contracts" • IFRS 1 (revised) "First time adoption of International Financial Reporting Standards" in relation to IFRS 6 "Exploration for and Evaluation of Mineral Resources" • IFRS 6 (issue 2004) "Exploration for and Evaluation of Mineral Resources" • IFRIC 4 "Determining whether an Arrangement contains a Lease" • IFRIC 5 "Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds" • IFRIC 6 "Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment" Additionally, at the date of approval of these interim financial statements, thefollowing IFRS's and IFRIC's have been issued but were not yet effective: • IFRIC 7 "Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies" (effective for annual periods beginning on or after 1 March 2006) • IFRIC 8 "Scope of IFRS 2" (effective for annual periods beginning on or after 1 May 2006) • IFRIC 9 "Reassessment of Embedded Derivative" (effective for annual periods beginning on or after 1 June 2006) • IFRIC 10 "Interim Financial Reporting and Impairment" (effective for annual periods beginning on or after 1 November 2006) Accounting policies The following accounting policies have been used consistently in dealing withitems which are considered material in relation to the financial of the Group. Accounting convention The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards. The accounts have been prepared under thehistorical cost convention. These unaudited interim consolidated financial statements ('the statements")include the financial statements of the Company and its subsidiary undertakings. These statements do not include all of the disclosures required for annualfinancial statements, and accordingly, should be read in conjunction with thefinancial statements and other information set out in the Company's Placing andAdmission Document to AIM issued in May 2005. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Although theseestimates are based on management's best knowledge of current events andactions, actual results ultimately may differ from those estimates. Consolidation Controlled entities The consolidated financial statements incorporate the assets and liabilities ofall entities controlled by the Company as at 30 June 2006 and the results of allthe controlled entities for the period then ended. The Company and itscontrolled entities together are referred to in this financial report as theconsolidated entity. Transactions eliminated on consolidation Intercompany transactions, balances and unrealised gains on transactions betweenconsolidated entities are eliminated on consolidation. Unrealised losses arealso eliminated unless the transaction provides evidence of impairment of theasset transferred. Foreign currency translation (1) Measurement currency The financial statements are prepared in Great Britain Pounds (the measurementcurrency), which is the currency that best reflects the economic substance ofthe underlying events and circumstances relevant to the Company. (2) Foreign currency translation Foreign currency transactions are translated into the measurement currency usingthe exchange rates prevailing at the date of the transactions. Gains and lossesresulting from the settlement of such transactions and from the translation ofmonetary assets and liabilities denominated in foreign currencies are recognisedin the income statement. Tax Current tax liabilities and assets for the current and prior periods aremeasured at the amount expected to be paid to or recovered from the taxationauthorities using the tax rates and laws that have been enacted or substantivelyenacted by the balance sheet date. Deferred tax is provided in full, using the liability method, on temporarydifferences arising between the tax bases of assets and liabilities and theircarrying amounts in the financial statements. Currently enacted tax rates areused in the determination of deferred tax. Deferred tax assets are recognised to the extent that it is probable that futuretaxable profit will be available against which the temporary differences can beutilised. Exploration costs Initially the Group adopted a policy of capitalizing development costs and thecosts of exploration tenements, application for exploration tenements andaccumulated technical data and knowledge from previous exploration activity,where it was anticipated that these costs would be recovered. In October 2005, the Group adopted a conservative approach to explorationexpenditure and writes these expenditure off to profit and loss as and whenincurred. Plant and equipment Plant and equipment are stated at historical cost less depreciation. Depreciation is calculated on the straight-line method to write off the cost ofeach asset to their residual values over their estimated useful life. Theannual depreciation rates used are as follows: Motor vehicles 20%Furniture, fixtures and office equipment 10% The assets residual values and useful lives are reviewed, and adjusted ifappropriate, at each balance sheet date. Where the carrying amount of an asset is greater than its estimated recoverableamount, it is written down immediately to its recoverable amount. Expenditure for repairs and maintenance of property, plant and equipment ischarged to the income statement of the year in which they were incurred. Thecost of major renovations is included in the carrying amount of the asset whenit is probable that future economic benefits in excess of the originallyassessed standard of performance of the existing asset will flow to the Company. Major renovations are depreciated over the remaining useful life of therelated asset. Gains and losses on disposal of plant and equipment are determined by comparingproceeds with carrying amount and are included in profit from operations. Impairment of long-lived assets Property, plant and equipment and other non-current assets are reviewed forimpairment losses whenever events or changes in circumstances indicate that thecarrying amount may not be recoverable. An impairment loss is recognised forthe amount by which the carrying amount of the asset exceeds its recoverableamount, which is the higher of an asset's net selling price and value in use.For the purposes of assessing impairment, assets are grouped at the lowestlevels for which there are separately identifiable cash flows. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents compriseof cash in hand and balance with banks. 3. Financial Risk Management Financial risk factors The Group is exposed to interest rate risk, liquidity risk and currency riskarising from the financial instruments that it may hold. The risk managementpolicies 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 willfluctuate due to changes in market interest rates. The Group is exposed tointerest rate risk in relation to its bank deposits. The Group's managementmonitors the interest rate fluctuations on a continuous basis and actsaccordingly. Liquidity risk Liquidity risk is the risk that arises when the maturity of assets andliabilities does not match. An unmatched position potentially enhancesprofitability, but can also increase the risk of losses. The Group hasprocedures with the object of minimising such losses such as maintainingsufficient cash and other highly liquid current assets and by having availablean adequate amount of committed credit facilities. Currency risk Currency risk is the risk that the value of financial instruments will fluctuatedue to changes in foreign exchange rates. The Group is exposed to foreignexchange risk arising from various currency exposures primarily with respect tothe Australian Dollar and the Cyprus Pounds. The Group's management monitors theexchange rate fluctuations on a continuous basis and acts accordingly. TheGroup's policy is not to enter into any currency hedging transactions. Fair value estimation The fair values of the Group's financial assets and liabilities approximatetheir carrying amounts at the balance sheet date. 4. Tax The Company is subject to corporation tax in Cyprus on its taxable profits atthe rate of 10%. Companies which do not distribute 70% of their profits after tax, as defined bythe relevant Cyprus tax law, within two years after the end of the relevant taxyear, will be deemed to have distributed as dividends 70% of these profits.Special contribution for defence at 15% will be payable on such deemed dividendsto the extent that the shareholders (companies and individuals) are Cyprus taxresidents. The amount of deemed distribution is reduced by any actual dividendspaid out of the profits of the relevant year during the following two years.This special contribution for defence is payable for the account of theshareholders. 5. Business and geographical segments Business segments The Group has only one distinct business segment, being that of mineralexploration. Geographical segments The Group's exploration activities are located in Cyprus, Georgia, Bulgaria,Greece, Slovakia, and Turkey, and its administration and management is based inCyprus. Cyprus Georgia Greece Slovakia Turkey Europe Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Operating loss (803) (261) (109) (102) (138) (144) (1,557)Financial income - - - - - - -Financial costs (5) - - - - - (5)Net loss for the (808) (261) (109) (102) (138) (144) (1,562)period Total assets 1,291 42 41 4 5 6 1,389Total liabilities 119 11 - - - - 130Depreciation offixed assets 15 - - - - - 15 6. Plant and equipment Furniture and Office Motor Vehicles Total Fittings Equipment GBP 000's GBP 000's GBP 000's GBP 000's CostAt 31 December 2005 3 20 26 49Additions 14 6 17 37 At 30 June 2006 17 26 43 86 DepreciationAt 31 December 2005 - 3 5 8Charge for the period 1 3 3 7 At 30 June 2006 1 6 8 15 Net book valueAt 30 June 2006 16 20 35 71 7. Controlled entities The Company and the Group have the following subsidiaries which have beenconsolidated in these financial statements. Companies names Date of Country of Effective acquisition/ incorporation proportion of incorporation shares held Dogu Akdeniz Mineralli Ltd 7 July 2005 Turkey 100%Eastern Mediterranean Minerals (Cyprus) Ltd 28 Feb 2005 Cyprus 95%Eastern Mediterranean Resources A.E (Greece) 21 June 2005 Greece 100%Eastern Mediterranean Resources Armenia LLC 26 May 2006 Armenia 100%Eastern Mediterranean Resources (Caucasus) Ltd 11 Nov 2005 Georgia 100%Eastern Mediterranean Resources (Slovakia) S.R.O. 10 July 2005 Slovakia 100%Mediterranean Minerals (Bulgaria) EOOD 11 Mar 2005 Bulgaria 100%Georgian Mineral Development Company Ltd 27 Dec 2005 Georgia 100%Tredington Ventures Ltd 28 Feb 2005 Cyprus 95%Winchcombe Ventures Ltd 28 Feb 2005 Cyprus 95% On 27 March 2006 the wholly owned subsidiary, Eastern Mediterranean Resources(Caucasus) Ltd, acquired an additional 20% of Georgian Mineral DevelopmentCompany Ltd reaching to a shareholding of 100% in the subsidiary Company (Note15). Eastern Mediterranean Resources Armenia LLC has been incorporated by EMED on 26May 2006. 8. Debtors and other receivables Six Months Six Months Ended Year Ended 30 June 2005 Ended 30 June 2006 (Unaudited) 31 Dec 2005 (Unaudited) GBP 000's GBP 000's GBP 000's Prepayments and other receivables 41 34 46Receivable on share subscription - 250 - 41 284 46 9. Cash and cash equivalents Cash included in the cash flow statement comprise the following balance sheetamounts: Six Months Six Months Ended Year Ended 30 June 2005 Ended 30 June 2006 (Unaudited) 31 Dec 2005 (Unaudited) GBP 000's GBP 000's GBP 000's Bank balances 1,277 1,660 971 10. Share capital and share premium Number Issued of Capital Share Premium Shares Total 000's GBP 000's GBP 000's GBP 000'sAuthorisedOrdinary shares of GBP0.0025 100,000 250 - 250each Issued and fully paidBalance 31 December 2005 56,556 141 2,886 3,027 Issued March 2006 at GBP 0.125for cash 12,000 30 1,470 1,500Issued March 2006 at GBP0.125for database purchase 1,889 5 231 236Issued June 2006 at GBP0.125 for 1,153 3 141 144database purchaseWrite off share issue costs - - (107) (107) Balance as at 30 June 2006 71,598 179 4,621 4,800 11. Other payables Six Months Ended Six Months Ended Year Ended 30 June 2006 30 June 2005 31 Dec 2005 (Unaudited) (Unaudited) GBP 000's GBP 000's GBP 000's Creditors 130 81 130 12. Loss per share The calculation of the basic and diluted earnings per share attributable to theordinary holders of the parent based on the following data: Six Months Ended Six Months Ended Year 30 June 2006 30 June 2005 Ended (Unaudited) (Unaudited) 31 Dec 2005 GBP 000's GBP 000's GBP 000's Net loss attributable to equity shareholders (1,559) (1,067) (2,209) Number of ordinary share for the purposes of basic 68,803 56,556 56,556earnings per shareEffect of dilutive potential ordinary shared: Share options 7,726 12,790 12,790 76,529 69,346 69,346 Basic loss per share (pence) (2.27) (1.89) (3.91) Diluted loss per share (pence) (2.04) N/A N/A 13. Share option plan Details of share options outstanding as at 30 June 2006: Grant date Expiry date Exercise price Number of shares GBP 000's 9 May 2005 9 May 2011 0.08 11,38111 August 2005 11 August 2011 0.10 70028 April 2006 28 April 2012 0.135 4,53028 June 2006 28 June 20012 0.135 150 Total 16,761 The options expire six years after grant date and are exercisable at theexercise price in whole or in part no more than one third after one year fromthe grant date, two thirds after two years from the grant date and the balanceafter three years from the grant date. Number of shares 000's Outstanding options at the year end: 12,790- granted 4,680- cancelled (709)- exercised - 16,761 The Company has a share option scheme for employees and other parties of theGroup. The options expire six years after grant date and are exercisable at theexercise price in whole or in part no more than one third after one year fromthe grant date, two thirds after two years from the grant date and the balanceafter three years from the grant date. The option agreements contain provisions adjusting the exercise price in certaincircumstances including the allotment of fully paid Ordinary Shares by way of acapitalisation of the Company's reserves, a sub division or consolidation of theOrdinary Shares, a reduction of share capital and offers or invitations (whetherby way of rights issue or otherwise) to the holders of Ordinary Shares. The estimated fair values of the options were calculated using the Black Scholesoption pricing model. The inputs into the model and the results are as follows: 28 June 2006 28 April 2006 11 August 9 May 2005 2005 Weighted average share price 9.50p 9.50 8.88p 8.75pWeighted average exercise price 13.5p 13.5p 8.00 8.00pExpected volatility 37% 37% 20% 15%Expected life 6 years 6 years 6 years 6 years 6 yearsRisk free rate 4.8% 4.7% 4.4% 4.4%Expected dividend yield nil nil nil nilDiscount factor 20% 20% 20% 20%Estimated fair value 3.30p 3.25p 3.18p 2.50p Expected volatility was determined by calculating the historical volatility ofthe Company's share price over the period post AIM admission trading. 14 Acquisition of subsidiary In March 2006, the Company acquired an additional 20% of the issued sharecapital of Georgian Mineral Development Company Ltd incorporated in Georgia,reaching to 100% shareholding. The principal activity of the acquired company isthe exploration for mineral deposits, evaluation thereof and marketing theresources. The consideration for the acquisition was 1,000 shares with a valueof USD50,000 (£27,459). Details of net assets acquired and goodwill are as follows: Purchase consideration '000 Shares in the capital of the purchaser 1 GBP'000 Total Purchase consideration 27Fair Value of assets acquired (41) Goodwill on acquisition 68 The fair value of the assets and liabilities arising from the acquisition are asfollows: GBP'000 Bank and cash balances 3Equipment -Related company balances (223)Other payablesTotal fair values (220) Fair value of assets acquired (20%) (44)Goodwill 71Purchase price 27Consideration in cash 27 15 Capital Commitments The Group has undertaken capital commitments for exploration in Georgiaamounting to US$1 million (around £500,000) over 2006 and 2007, in order to keepthe licence for exploration on the agreed ground. The Group's budget exceeds theamount of capital commitment mentioned above. 16 Contingent liabilities As part of the acquisition cost of a 95% in Eastern Mediterranean Minerals(Cyprus) Limited, an additional contingent consideration of GBP600,000 will bepaid by the Company one month after the date on which Eastern MediterraneanMinerals (Cyprus) Limited first receives revenue of GBP1,000,000 from or inrespect of specific exploration tenements. 17 Subsequent events Turkey and Bulgaria, are considered to be best served by the establishment of aseparately listed associate company. Accordingly, EMED Mining has formed KeffiMinerals Plc on 13 July 2006 as a UK-registered holding company for the purposesof holding its interests in Turkey and Bulgaria. EMED has 71% and intends toretain a significant stake in the Company. Starvest, a natural resourcesinvestment fund holds 24% and Keffi Directors and management hold 5%. Aproprietary database has been acquired and clusters of tenements have beenacquired. A separate management team is in place. EMED Mining will bring its technicalsupport and mining expertise into Keffi. Starvest has contributed seed capitalto Keffi and has confirmed its intention to support the Company's IPO. Subject to future stockmarket conditions, Keffi will seek admission to AIMwithin the next 12 months. This information is provided by RNS The company news service from the London Stock Exchange