Bluejay Regulatory News (JAY)

FinnAust Mining plc / EPIC: FAM / Market: AIM / Sector: Mining

26 August 2014

FinnAust Mining plc ("FinnAust" or the "Group")

Final Results

FinnAust Mining plc, the AIM listed exploration company with a portfolio of copper, zinc and nickel projects in Finland and Austria, announces its final results for the period ended 30 June 2014. Additionally, the Group's Annual General Meeting will be held at The Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE on 22 October 2014 at 10:00 a.m. A notice convening the AGM, proxy form and Report and Accounts for the year ended 30 June 2014 will be posted to shareholders today and will also be available to download from the Group's website at www.finnaust.com.

Overview

· Successful acquisition of three high grade copper, zinc and nickel projects in Finland by way of a reverse-takeover from Western Areas Limited

· Immediate commencement of a 10,300m rolling drilling campaign focussed on identifying extensions from historical mines at each asset

· Discovery of a new high grade polymetallic ore lode at the Hammaslahti Project which encouragingly is relatively shallow and proximal to the historic pit and underground drives

· Upside potential demonstrated - Board believes that the main Hammaslahti mine structure hosts possibly four separate plunging lodes now open to the north of the old zinc pit with 5.6m at 3.2% Cu and down dip extensions to the south with 3.5m at 11.5% Cu, equating to a 1.8km strike

· Proven Board and management team with extensive experience in identifying and developing quality resource assets

· Solid cash position of £1.5 million and fully funded for rolling drill campaign

Alastair Clayton, Executive Director of FinnAust, said, "This has been a highly productive year for FinnAust during which we have transformed our future prospects through the acquisition of an excellent portfolio of high grade copper, zinc and nickel projects in Finland. Our fully funded drill programme has already identified a new mineralised area at the Hammaslahti Project and we believe that the follow up holes will extend the known mineralised zone to the south and north as we focus on targeting the high-grade portions to better define overall grade and tonnes. These assets have already been subject to significant investment by Western Areas, which previously owned the portfolio and invested further on our admission to AIM as FinnAust, and with two of the Western Areas management team having joined our Board, we benefit from their strength of understanding and commitment to the licences. I am confident that the year ahead will be characterised by growth as further drill results demonstrate the scale of the opportunity at Hammaslahti and our portfolio as a whole."

Chairman's Statement

FinnAust Mining Plc (formerly Centurion Resources Plc) ("FinnAust" or the "Group") is committed to the creation of shareholder value through exploration. In this vein the Group's focus during the period has centred on advancing our portfolio of high grade copper, zinc and nickel assets in Finland where three high priority projects have been identified: Hammaslahti, Outokumpu and Enonkoski (the "Projects"). Our prospective portfolio was acquired by way of a reverse-takeover of Finland Investments Plc (formerly FinnAust Mining Plc) in December 2013 from Western Areas Limited ("Western Areas") which controlled 84% and minority Finnish investors that controlled 16%. Western Areas is an ASX 200 company with a proven track record in acquiring and developing quality resource assets, and with Western Areas came the addition of highly experienced management personnel. Our strengthened Board immediately oversaw the implementation of a rolling 10,300m drilling campaign and this has already led to the discovery of a new potential high grade ore lode of copper ('Cu'), zinc ('Zn'), lead ('Pb'), silver ('Ag') and gold ('Au') mineralisation at the Hammaslahti Project. Our operations team's commitment to FinnAust's prospective portfolio, located in a premier mining district, as well as our defined development strategy, places FinnAust on the right path to realise value from its multi-asset portfolio.

The Projects cover approximately 4,710sq km and are located in a prolific geological belt in Southern Finland. Importantly, they are located in a prime exploration region where local operators, such as ASX listed Altona Mining Limited ("Altona"), have delivered positive results. Altona's nearby Kylylahti mine was recently the subject of a conditional offer of approximately US$100 million from Swedish mining company Boliden AB.

The exploration focus to date has largely centred on Hammaslahti, where the Group is looking to identify extensions to and structural repeats of the previously mined copper-gold-zinc ore body interpreted to be part of a re-mobilised volcanogenic massive sulphide ("VMS") type deposit. FinnAust considers both the wider area around the mine and the down plunge extensions of the known ore body to be under-explored and in some cases, untested. Consequently, the Group has to date drilled a total of 27 diamond drill holes for 5,870m on below pit targets as well as several regional geophysical targets between 500m and 800m north, east and south-east of the Hammaslahti open pits to improve our understanding of the mineralisation.

Importantly, results from recent drilling have highlighted that the main Hammaslahti mine structure hosts possibly four separate plunging lodes now open to the north of the old zinc pit with 5.6m at 3.2% Cu and down dip extensions to the south with 3.5m at 11.5% Cu. This equates to a strike length of approximately 1.8 km. We are encouraged by the fact that the mineralisation discovered is relatively shallow and proximal to the historic pit, underground drives and historical mine infrastructure.

At Outokumpu we conducted an on-ice drilling programme at Lake Juojärvi to test for Outokumpu-style massive copper and polymetalic mineralisation. The section of untested inferred Outukumpu geology under the lake is approximately 5km long. A total of four holes for 1,461m were completed in February 2014 across a drill traverse roughly equidistant from previously drilled traverses. A further hole located at the south-west end of the belt extending an existing drill traverse was also completed. Importantly, all four holes intercepted varying thicknesses of known Outokumpu geology; one drill hole intercepted approximately 50m of iron sulphides. Whilst not a discovery in itself, our geologists believe this may represent some kind of feeder structure or sulphidic "tail" that may be part of a larger multi metal system. Work on the significance of this or otherwise is continuing.

In addition, at Enonkoski, we have identified possible extensions and repeats of high-grade nickel-copper mineralisation at and near the historical Enonkoski mine, where a previous drill intercept returned 15m at 6.9% nickel and 2.0% copper. Target generation and the interpretation of new geochemical and geophysical data sets is well underway at this project and we will look to further advance this asset in due course as part of our 10,300m drill programme.

The Group also maintains an 80% interest in the Mitterberg Copper Project ("Mitterberg"), a previously producing tenure in the Mitterberg district of Salzburg, Austria, where approximately 120,000 tonnes copper was extracted between 1829 and ceased in 1977. The project, which is comprised of 47 licences over 33 sq km, sits in the Mitterberg district, which arguably contains the largest copper concentration in the Eastern Alps, and has an estimated exploration target of 11.0Mt to 11.7Mt with a grade range of 1.0% to 1.15% Cu. FinnAust will continue to seek the best possible way of realising value from Mitterberg, but the Group's primary focus is on advancing our Finnish portfolio.

Financial Review

The loss before taxation of the Group for the period ended 30 June 2014 amounted to £2,394,934 (30 June 2013: £400,786).

The Group's cash position at 30 June 2014 was £1,706,137 (30 June 2013: £101,551) and currently stands at approximately £1.5 million.

Outlook

FinnAust has transformed during the period, having acquired a suite of distinctive and highly prospective assets in Finland; a country rated the number one mining destination worldwide in the Fraser Institute Global Mining Survey Results 2012/2013. We are ideally located in a prolific geological belt, which includes the famous Outokumpu copper mine and other high-grade mines, and our three assets have already been subject to significant investment from their previous owners, providing us with an excellent base from which to commence our work. Our programme has already been highly productive, having led to the possible discovery of at least four separate plunging lodes at the Hammaslahti Project and with drilling on-going, we are excited to receive further results in the coming months, which we are confident will add value to our portfolio for the benefit of shareholders.

I would like to take this opportunity to thank our shareholders, advisers and management team for their support during this transitional time for the Group and look forward to the year ahead.

Daniel Lougher

Chairman

22 August 2014

For further information, please visit www.finnaust.com or contact:

STATEMENTS OF FINANCIAL POSITION

As at 30 June 2014

CONSOLIDATED INCOME STATEMENT

For the year ended 30 June 2014

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent Company Income Statement and Statement of Comprehensive Income.

The loss for the Company for the 16-month period ended 30 June 2014 was £1,203,743 (year ended 28 February 2013: £497,183).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2014

STATEMENTS OF CASH FLOWS

For the periods ended 30 June 2014

Major non-cash transactions

On 2 December 2013 the Company's shares were admitted to trading on AIM (the "Admission"). In connection with the Admission the Company issued the following:

· 154,000,000 new ordinary shares of 2 pence per share fully paid as consideration for the purchase of Finland Investments Plc (previously FinnAust Mining Plc); £3,080,000 (Note 14);

· 6,000,000 options to board and management valid for 3.5 years from the date of issue and exercisable at 15 pence per option (Note 15); and

· 6,000,000 options to board and management valid for 5.5 years from the date of issue and exercisable at 20 pence per option (Note 15).

At 30 June 2014 £82,310 of exploration and evaluation additions remained outstanding and unpaid.

NOTES TO THE FINANCIAL STATEMENTS

For the period ended 30 June 2014

1. General information

The principal activity of FinnAust Mining Plc (the "Company") and its subsidiaries (together the "Group") is the exploration and development of precious and base metals. The Company's shares are listed on the AIM market of the London Stock Exchange. The Company is incorporated and domiciled in England.

On 29 November 2013 Centurion Resources Plc changed its name to Finnaust Mining Plc.

The address of its registered office is 47 Charles Street, London, W1J 5EL.

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 periods presented, unless otherwise stated.

2.1. Basis of Preparation of Financial Statements

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee ("IFRS IC") as adopted by the European Union, the Companies Act 2006 that applies to Companies reporting under IFRS and IFRS IC interpretations. The Consolidated Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.

The Financial Statements are presented in Pound Sterling rounded to the nearest pound.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Consolidated Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

2.2. New and Amended Standards

(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 March 2013

The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period. The following new standards, interpretations and amendments to published standards effective in the period have been adopted by the Group:

*1 Effective date 1 January 2013 for the EU

The above pronouncements have been adopted for the first time this period and have not resulted in any material changes in the financial statements other than additional disclosures to the financial statements.

(b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted

*1 Not yet endorsed by the EU

The Group is evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the Group's results or shareholders' funds.

2.3. Basis of Consolidation

The Group Financial Statements consolidate the Financial Statements of FinnAust Mining Plc and the audited management accounts of all of its subsidiary undertakings made up to 30 June 2014.

Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group obtains and exercises control through 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. 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.

Investments in subsidiaries are accounted for at cost less impairment within the parent company financial statements.

The acquisition by FinnAust Mining Plc of Finland Investments Plc has been accounted for under reverse acquisition accounting. Although the Consolidated Financial Statements have been prepared in the name of the legal parent, FinnAust Mining Plc, they are in substance a continuation of the financial statements of the legal subsidiary, Finland Investments Plc. The results of FinnAust Mining Plc are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition of Finland Investments Plc. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

The following accounting treatment has been applied in respect of the reverse acquisition:

· The assets and liabilities of the legal subsidiary, Finland Investments Plc, are recognised and measured in the Consolidated Financial Statements at their pre-combination carrying amounts, without restatement to fair value;

· The equity structure appearing in the Consolidated Financial Statements reflects the equity structure of the legal parent, FinnAust Mining Plc, including the equity instruments issued to effect the business combination;

· Comparative numbers presented in the Consolidated Financial Statements are those reported in the financial statements of the legal subsidiary, Finland Investments Plc; and

· The cost of acquisition is measured as the fair value of the assets acquired, equity instruments issued and liabilities incurred or assumed at the date of exchange.

2.4. Going Concern

The Group's business activities together with the factors likely to affect its future development, performance and position are set out in the Chairman's Report on pages 3 and 4. In addition, Note 3 to the Consolidated Financial Statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to market, credit and liquidity risk.

The Consolidated Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating revenues and an operating loss has been reported, the Directors believe that the Group has sufficient funds to undertake its operating activities over the next 12 months including any additional payment required in relation to its current exploration projects. The Group has financial resources which, the Directors believe, will be sufficient to fund the Group's committed expenditure both operationally and on various exploration projects for this time period. However, in order to complete other exploration work over the life of existing projects and as additional projects are identified additional funding will be required. The amount of funding is unforeseen at the point of approval of these Financial Statements and the Group will be required to raise additional funds either via an issue of equity or through the issuance of debt. The Directors are confident that funds will be forthcoming if and when they are required. Should additional funding not be forthcoming the Directors have agreed, if circumstances require, to defer payment of their fees until such time as adequate funding is received.

The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the Group and Company financial statements.

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 Board of Directors that makes strategic decisions. No revenue is currently being generated.

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

2.6. Foreign Currencies

(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 functional currency of the UK parent entity and UK subsidiary is Pound Sterling and the functional currency of the Finnish and Austrian subsidiaries is Euros. The Financial Statements are presented in Pound Sterling, rounded to the nearest pound, which is the Company's functional and Group's presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such 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.

(c) Group companies

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

· assets and liabilities for each year end date presented are translated at the closing rate at the date of the Statement of Financial Position;

· 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 dates of the transactions); and

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

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale.

2.7. Intangible assets

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group's interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

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.

Exploration and evaluation assets

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Exploration and evaluation assets are recorded and held at cost.

Exploration and evaluation assets are not subject to amortisation, but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas.

Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the income statement.

2.8. Investments in subsidiaries

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

2.9. Property, Plant and Equipment

Property, Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates:

Office Equipment - 20% straight line

Machinery and Equipment - 10% straight line

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.

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

2.10. Impairment of non-financial assets

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

2.11. Financial Assets

(a) Classification

The Group classifies its financial assets in the following categories: 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.

(i) 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.

(ii) 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 the investment within 12 months of the end of the reporting period.

(b) Recognition and measurement

Financial assets are initially recognised at fair value plus transaction costs. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value unless the Group is precluded from doing so as, in the case of unlisted equity securities, the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. In such circumstances available-for-sale financial assets are held at cost and reviewed annually for impairment. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Changes in the fair value of monetary and non-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 other 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.

(c) Impairment of financial assets

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. 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.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

· significant financial difficulty of the issuer or obligor;

· a breach of contract, such as a default or delinquency in interest or principal repayments;

· the disappearance of an active market for that financial asset because of financial difficulties;

· observable data indicating that there is a measureable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio; or

· for assets classified as available-for-sale, a significant or prolonged decline in fair value of the security below its cost.

For loans and receivables, the amount of the impairment 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 asset's carrying amount is reduced, and the loss is recognised in the Income Statement.

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 Income Statement.

For assets classified as available-for-sale, the Group assesses at each reporting period whether there is objective evidence that a financial asset is impaired. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below it cost is one example that the asset is 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 the financial previously recognised in profit or loss, is removed from equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments are not reversed through profit or loss. 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 profit or loss, the impairment loss is reversed through the Income Statement.

2.12. Financial Liabilities

Financial liabilities comprise trade and other payables and borrowings in the Statement of Financial Performance, and are held at amortised cost.

Trade 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. If not, they are presented as non-current liabilities.

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

Borrowings in the statement of financial position are also classified as financial liabilities and are held at amortised cost. Borrowings are classified as current liabilities if repayment is due within one year or less. If not, they are presented as non-current liabilities.

2.13. Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and in hand.

2.14. Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defersettlement of the liability in cash for at least 12 months after the end of the reporting period.

2.15. Share capital and share premium

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, net of tax, from the proceeds provided there is sufficient premium available. Should sufficient premium not be available placing costs are recognised in the Income Statement.

Deferred shares are classified as equity. Deferred shares have no rights to receive dividends, or to attend or vote at general meetings of the Company and are only entitled to a return of capital after payment to holders of new ordinary shares of £100,000 per each share held.

2.16. Share Based Payments

The Group operates a number of equity-settled, share-based schemes, under which the entity receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:

· including any market performance conditions;

· excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

· including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

2.17. Taxation

Current tax is the tax currently payable based on the taxable profit for the year. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or recognised in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the Statement of Financial Position date in the respective countries where the tax liability is realised and settled.

Deferred tax is recognised for using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to 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.

Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets and liabilities are not discounted.

2.18. Operating leases

Leases of assets under which a significant amount of the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are charged to the income statement on a straight-line basis over the period of the respective leases.

2.19. Finance income

Interest income, relating to cash and cash equivalents, is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates applicable.

Interest income in relation to interest earned on available for sale financial assets is recognised in the Income Statement on an effective interest basis.

2.20. Retirement benefit costs

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

3. Financial Risk Management

3.1. Financial Risk Factors

The Group's activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. None of these risks are hedged.

Risk management is carried out by the London based management team under policies approved by the Board of Directors.

Market Risk

(a) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro and the British Pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds or Euros. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts. The Group has not sensitised the figures for fluctuations in foreign exchange rates as the Directors are of the opinion that these fluctuations would not have a significant impact on the financial statements of the Group at the present time. The Directors will continue to assess the effect of movements in exchange rates on the Group's financial operations and initiate suitable risk management measures where necessary.

(b) Price risk

The Company was exposed to equity securities price risk because of investments held by the Company, classified as available-for-sale financial assets. These assets were disposed of during the period hence there is no exposure to the Company or the Group at the period end.

The Group is not exposed to commodity price risk. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.

(c) Interest rate risk

As the Group's borrowings are non-interest bearing it is not exposed to interest rate risk on financial liabilities. The Group's interest rate risk arises from its cash held on short-term deposit, which is not significant.

Credit Risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

Liquidity Risk

In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Directors are confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.

Financial liabilities are all due within one year.

3.2. Capital Risk Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.

At 30 June 2014 the Group had borrowings of £125,000 (30 June 2013: £nil) and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.

Given the Group's level of debt versus its cash at bank and cash equivalents, the gearing ratio is immaterial.

3.3. Fair Value Estimation

The table below analyses financial instruments carried at fair value, by valuation method. The level at which a financial instrument can be defined is as follows:

· Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

· Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2); and

· Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table presents the Company's financial assets that are measured at fair value. The Company does not have any financial liabilities measured at fair value.

The Group has no such available for sale financial assets.

As the available-for-sale asset is non-quoted and the inputs to calculate the above value are not based on observable market data, the instrument is included in Level 3.

The following table presents the changes in Level 3 instruments for the periods ended:

4. Critical Accounting Estimates and Judgements

The preparation of the Financial Statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.

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.

Items subject to such 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 years, include but are not limited to:

Impairment of intangible assets - exploration and evaluation costs

Exploration and evaluation costs have a carrying value at 30 June 2014 of £8,101,446 (2013: £7,190,919). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests for impairment annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 2.7. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the year warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration; an impairment charge will then be recognised in the Income Statement. The Directors have reviewed the estimated value of each project prepared by management and have concluded that an adjustment of £312,831 is required and provided against the exploration assets.

Impairment of prepayments

Prepayments have a carrying value at 30 June 2014 of £30,275 (30 June 2013: £558,271). During the period £541,177 of prepayments carried by previous management in relation to an ultimately unsuccessful London Stock Exchange Listing in 2012 were impaired on the basis that they no longer represent a future benefit to the Group.

Estimated impairment of goodwill

Goodwill has a carrying value of £nil (2013: £nil). The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.7 to the Consolidated Financial Statements.

Management has concluded that goodwill does not reflect an increase in the Group's assets and therefore have impaired goodwill in full. See Note 7 to the Consolidated Financial Statements.

Write-off of trade & other payables and borrowings

During the period ended 30 June 2014 management wrote-off £36,433 (30 June 2013: £nil) in trade & other payables and £74,816 (30 June 2013: £nil) in borrowings on the basis that these amounts no longer represent a legal financial obligation by the Group.

Share based payment transactions

The Group has made awards of options and warrants over its unissued share capital to certain Directors as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received.

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 15.

Available-for-sale financial assets

Available-for-sale financial assets of the Company have a carrying value at 30 June 2014 of £nil (28 February 2013: £375,000). These were disposed of during the period ended 30 June 2014 prior to the date of the reverse acquisition.

The fair value of financial instruments that are not traded in an active market (for example un-listed equity securities) is determined, where possible, by using valuation techniques. The Group follows the guidance of IAS 39 to determine when an available-for-sale equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow.

Management has concluded that there is no impairment charge necessary to the carrying value of available-for-sale financial assets on the basis that all available-for-sale financial assets have been disposed during the period.

5. Segment Information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the year the Group had interests in three geographical segments; the United Kingdom, Austria, and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Austria and Finland relate to exploration and evaluation work.

The Group had no turnover during the year.

6. Property, Plant and Equipment

Depreciation expense of £2,729 (30 June 2013: £2,236) for the Group has been charged in administration expenses.

Depreciation expense of £842 (28 February 2013: £729) for the Company has been charged in administration expenses.

7. Intangible Assets

Intangible assets comprise exploration and evaluation costs and goodwill. Exploration and evaluation assets are all internally generated.

Exploration projects in Finland and Austria are at an early stage of development and no JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates are available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:

• The Group's right to explore in an area has expired, or will expire in the near future without renewal;

• No further exploration or evaluation is planned or budgeted for;

• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; and

• Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

Following their assessment the Directors concluded that an impairment charge of £312,831 was necessary at the end of the period in respect of certain Finnish exploration licences that were not renewed during the period and which have therefore been fully impaired, and treated as an exceptional item. For more information see Note 4.

The Directors do not consider goodwill reflects an increase in the Group's assets and therefore have impaired goodwill in full, which is considered to be an exceptional item. For more information see Note 17.

8. Investments in Subsidiary Undertakings

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

Principal subsidiaries

Group and Company:

All subsidiary undertakings are included in the consolidation.

The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.

9. Available-for-Sale Financial Assets

During the previous period the Company acquired a 10% investment in North Mining D.O.O ("North Mining") for £375,000. North Mining is a Montenegrin base metals exploration company and wholly owned subsidiary of ASX listed Balamara Resources Limited ("Balamara"). On 2 July 2013 the Company exercised its option under the terms of the investment agreement to have Balamara repurchase the Company's 10% investment in North Mining at a 10% premium to the original purchase price.

10. Trade and Other Receivables

The fair value of all receivables is the same as their carrying values stated above.

Non-current receivables relate to security deposits held against service accounts and do not have a defined due date, they are receivable upon closure of the respective accounts.

At 30 June 2014 all trade and other receivables were fully performing.

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

11. Cash and Cash Equivalents

All of the Group and Company's cash at bank is held with institutions with an AA- credit rating.

12. Trade and Other Payables

Trade payables include amounts due of £25,802 and accrued expenses £56,508 in relation to exploration and evaluation activities.

13. Borrowings

Non-interest bearing loans arose during the period as unsecured cash advances to the Group from the ultimate controlling party Western Areas Limited ("Western Areas") as disclosed in Note 26. The agreed facility was £250,000, denominated in Pound Sterling, for which further funds were advanced totalling £74,816.This additional funding was subsequently forgiven by Western Areas. The balance of the non-interest bearing loan is repayable upon demand by Western Areas.

There are no undrawn borrowings as at the year end.

The fair value of the borrowings as at the year end equates to its carrying value above.

14. Share capital and premium

Company

Group

(1) Includes issue costs of £125,835

(2) Includes issue costs of £72,625

On 29 November 2013 the shareholders approved the consolidation of the Company's equity whereby each existing ordinary share of 0.2p was converted into new ordinary shares of 2p each on the basis of one new ordinary share for every existing ten ordinary shares.

On 2 December 2013 the Company raised £3,405,000 via the issue and allotment of 68,100,000 new ordinary shares of 2 pence each fully paid at a price of 5 pence per share. On the same date the Company issued 154,000,000 new ordinary shares of 2 pence each fully paid at 5 pence per share as consideration for a business acquisition, being £7,700,000.

15. Share Based Payments

Share options and warrants outstanding and exercisable at the end of the period have the following expiry dates and exercise prices:

The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.

The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below: