Kazera Global Regulatory News (KZG)

Kennedy Ventures plc

020 3757 4983

Peter Hibberd c/o Billy Clegg

Cenkos Securities (Nominated Adviser and Joint Broker)

0131 220 6939

Derrick Lee / Nick Tulloch

Shore Capital (Joint Broker)

020 7408 4090

Mark Percy / Toby Gibbs (corporate finance)

Jerry Keen (corporate broking)

Peterhouse Corporate Finance (Joint Broker)

Duncan Vasey

020 7469 0935

Camarco

Billy Clegg / Georgia Mann / Tom Huddart

020 3757 6983

Notes

Year ended

30 June

2015

£'000

Year ended

30 June

2014

£'000

Administrative expenses

Impairment of available for sale investments

-

(55)

Administrative expenses

(219)

(131)

Operating loss and loss before tax

6

(219)

(186)

Taxation

9

-

-

Loss for the year and total comprehensive loss

(219)

(186)

Loss attributable to owners of the Company

(199)

(186)

Loss attributable to non-controlling interests

(20)

-

(219)

(186)

Earnings per share attributable to owners of the Company

From continuing operations:

Basic and diluted(pence)

10

(0.5)p

(0.5)p

Year ended

30 June

2015

£'000

Year ended

30 June

2014

£'000

Loss for the year

(219)

(186)

Other comprehensive income:

Items that may be subsequently reclassified to profit and loss:

Exchange differences on translation of foreign operations

(4)

-

Other comprehensive income/(expense) for the period

(4)

-

Total comprehensive loss for the year attributable to equity holders of the parent

(223)

(186)

GROUP

COMPANY

Notes

30 June

2015

£'000

30 June

2014

£'000

30 June

2015

£'000

30 June

2014

£'000

Non-Current assets

Intangible assets

11

452

-

-

-

Property, plant and equipment

12

395

-

-

-

Investment in subsidiaries

13

-

-

758

-

Available for sale investments

14

-

22

-

22

847

22

758

22

Current assets

Trade and other receivables

15

13

10

10

10

Cash and cash equivalents

16

26

531

7

531

39

541

17

541

Current liabilities

Trade and other payables

17

98

85

87

85

Short term borrowings

18

142

-

142

-

240

85

229

85

Net assets

646

478

546

478

Equity

Share capital

19

763

711

763

711

Share premium account

19

7,849

7,673

7,849

7,673

Capital redemption reserve

2,077

2,077

2,077

2,077

Currency translation reserve

(4)

-

-

-

Retained earnings

(10,182)

(9,983)

(10,143)

(9,983)

Equity attributable to owners of the Company

503

478

546

478

Non-controlling interests

143

-

-

-

Total equity

646

478

546

478

Share capital

£'000

Share premium account

£'000

Capital redemption reserve

£'000

Currency translation reserve

£'000

Retained earnings

£'000

Equity shareholders' funds

£'000

Non-controlling interests

£'000

Total

£'000

Balance at 1 July 2013

271

7,571

2,077

-

(9,820)

99

-

99

Loss for the year and total comprehensive expense

-

-

-

-

(186)

(186)

-

(186)

Issue of share capital

440

110

-

-

-

550

-

550

Share issue costs

(8)

-

-

-

(8)

-

(8)

Share based payment expense

-

-

-

-

23

23

-

23

Balance at 30 June 2014

711

7,673

2,077

-

(9,983)

478

-

478

Comprehensive income Loss for the year

-

-

-

-

(199)

(199)

(20)

(219)

Other comprehensive income

-

-

-

(4)

-

(4)

-

(4)

Total comprehensive income

-

-

-

(4)

(199)

(203)

(20)

(223)

Issue of share capital

52

176

-

-

-

228

-

228

Acquisition of subsidiary undertakings

-

-

-

-

-

-

163

163

Balance at 30 June 2015

763

7,849

2,077

(4)

(10,182)

503

143

646

Share

 capital

Share

 Premium

Capital redemption reserve

Retained

earnings

Total

£'000

£'000

£'000

£'000

£'000

Balance at 1 July 2013

271

7,571

2,077

(9,820)

99

Loss for the financial period

-

-

-

(186)

(186)

Issue of share capital

440

110

-

-

550

Share issue costs

(8)

-

-

(8)

Share based payment expense

-

-

-

23

23

Balance at 30 June 2014

711

7,673

2,077

(9,983)

478

Total comprehensive expense for the year

-

-

-

(160)

(160)

Issue of share capital

52

176

-

-

228

Balance at 30 June 2015

763

7,849

2,077

(10,143)

546

GROUP

COMPANY

Year ended

30 June

2015

Year ended

30 June

2014

Year ended

30 June

2015

Year ended

30 June

2014

Notes

£'000

£'000

£'000

£'000

OPERATING ACTIVITIES

Net cash used in operating activities

24

(186)

(67)

(137)

(67)

INVESTING ACTIVITIES

Loans to subsidiary undertakings

-

-

(536)

-

Acquisition of subsidiary undertakings

(464)

-

-

-

Net cash used in investing activities

(464)

-

(536)

-

FINANCING ACTIVITIES

Net proceeds from share issues

7

542

7

542

Loans from associates

142

-

142

-

Repayment of loan notes

-

(150)

-

(150)

Net cash from financing activities

149

392

149

392

Net (decrease)/increase in cash and cash equivalents

(501)

325

(524)

325

Exchange rate translation adjustment

(4)

-

-

-

Cash and cash equivalents at beginning of year

531

206

531

206

Cash and cash equivalents at end of year

16

26

531

7

531

1

GENERAL INFORMATION

Kennedy Ventures Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The nature of the Group's operations and its principal activities are set out in the Strategic Report and the Directors' Report.

2

STATEMENT OF COMPLIANCE

The financial statements have been prepared and approved by the Directors in accordance with all relevant IFRSs as issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the IFRS Interpretations Committee, endorsed by the European Union ("EU").

At the date of authorisation of this document, the following Standards and Interpretations, which have not been applied in these financial statements, were in issue, but not yet effective:

· IFRS 9 Financial Instruments

· IFRS 11 (amendments) Accounting for Acquisitions of Interests in Joint Operations

· IFRS 14 Regulatory Deferral accounts

· IFRS 15 Revenue from Contracts with Customers

· IAS 16 and IAS 38 (amendments) Clarification of Acceptable Methods of Depreciation and Amortisation

· IAS 19 (amendments) Defined Benefit Plans: Employee Contributions

· IAS 27 (amendments) Equity Method in Separate Financial Statements

· IAS 1 (amendments) Disclosure initiatives

· IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

· Annual Improvements to IFRSs: 2010-2012 cycle

· Annual Improvements to IFRSs: 2011-2013 cycle

· Annual Improvements to IFRSs: 2012-2014 Cycle

The Directors anticipate that the adoption of the above Standards and Interpretations in future periods will have little or no impact on the financial statements of the Company when the relevant Standards come into effect for future reporting periods, although they have yet to complete their full assessment in relation to the impact of IFRS 9 and IFRS 15.

3

Accounting Policies

The principal accounting policies adopted and applied in the preparation of the Group and Company Financial statements are set out below.

These have been consistently applied to all the years presented unless otherwise stated:

BASIS OF ACCOUNTING

The consolidated financial statements are prepared in accordance with applicable International Financial Reporting Standards ("IFRS") including standards and interpretations issued by the International Accounting Standards Board as adopted by the EU.

The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

In the application of IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. 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 judgments. 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.

Judgments made by management in the application of IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustment in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

GOING CONCERN

The financial statements have been prepared on the going concern basis.

The Directors have prepared cash flow forecasts to 31 December 2016, which show that the Company will have sufficient available cash resources to provide for its future requirements. In preparing their forecasts the Directors have given due regard to the risks and uncertainties affecting the business as set out in the Strategic report.

On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Company's financial statements.

BASIS OF CONSOLIDATION

The Group's consolidated financial statements incorporate the financial statements of Kennedy Ventures Plc (the "Company") and entities controlled by the Company (its subsidiaries). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

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.

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

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business Combinations

The acquisition of subsidiaries is accounted for using the acquisition method under IFRS 3. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of the fair value of the consideration transferred over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the date of acquisition. Acquisition costs are expensed as incurred.

GOODWILL

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition and is included as a non-current asset.

Goodwill is tested annually, or more regularly should the need arise, for impairment and is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Goodwill is allocated to cash generating units for the purpose of impairment testing.

On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

In accordance with IAS 36 the Group values Goodwill at the lower of its carrying value or its recoverable amount, where the recoverable amount is the higher of the value if sold and its value in use. In addition IAS38 requires intangible assets with finite useful lives to follow the same impairment testing as Goodwill including the use of value in use calculations.

AVAILABLE FOR SALE INVESTMENTS

All investments are classified as available for sale investments on initial recognition. Investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value in accordance with IAS 39. In respect of quoted investments, this is either the bid price at the period end date or the last traded price, depending on the convention of the exchange on which the investment is quoted, with no deduction for any estimated future selling cost. Unquoted investments are valued by the directors using primary valuation techniques such as recent transactions, last price or net asset value.

Gains and losses on measurement are recognised in other comprehensive income except for impairment losses and foreign exchange gains and losses on monetary items denominated in a foreign currency, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.

The Company assesses at each period end date whether there is any objective evidence that a financial asset or group of financial assets classified as available for sale has been impaired. An impairment loss is recognised if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. A significant or prolonged decline in the fair value of a security below its cost shall be considered in determining whether the asset is impaired.

When a decline in the fair value of a financial asset classified as available for sale has been previously recognised in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss is removed from other comprehensive income and recognised in profit or loss. The loss is measured as the difference between the cost of the financial asset and its current fair value less any previous impairment

The Company determines the fair value of its Investments based on the following hierarchy:

LEVEL 1 - Where financial instruments are traded in active financial markets, fair value is determined by reference to the appropriate quoted market price at the reporting date. Active markets are those in which transactions occur in significant frequency and volume to provide pricing information on an on-going basis.

LEVEL 2 - If there is no active market, fair value is established using valuation techniques, including discounted cash flow models. The inputs to these models are taken from observable market data including recent arm's length market transactions, and comparisons to the current fair value of similar instruments; but where this is not feasible, inputs such as liquidity risk, credit risk and volatility are used

LEVEL 3 - Valuations in this level are those with inputs that are not based on observable market data.

foreign currencies

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the Group financial statements, the results and financial position of each group company are expressed in Pounds Sterling, which is the functional currency of the Company, and the presentation currency for the Group financial statements.

In preparing the financial statement of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each year end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the year end date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting Group financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the year end date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

taxation

The tax currently payable is based on taxable profit or loss for the period. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

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 they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and equipment are recorded at cost, less depreciation, less any amount adjustments for impairment, if any.

Significant improvements are capitalised, provided they qualify for recognition as assets. The costs of maintenance, repairs and minor improvements are expensed when incurred.

Tangible assets retired or withdrawn from service are removed from the balance sheet together with the related accumulated depreciation. Any profit or loss resulting from such an operation is included in the income statement.

Tangible and intangible assets are depreciated on straight-line method based on the estimated useful lives from the time they are put into operations, so that the cost diminished over the lifetime of consideration to estimated residual value as follows:

Land and buildings - Over 15 years

Plant and equipment- Between 5 and 10 years

IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS EXCLUDING GOODWILL

Assets that have an indefinite useful life are not subject to amortisation but are reviewed for impairment annually and where there are indications that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the carrying value exceeds the recoverable amount.

TRADE RECEIVABLES, loans and other receivables

Trade and other 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 those with maturities greater than 12 months after the balance sheet date, which are classified as non-current assets and are measured at amortised cost less an allowance for any uncollectible amounts. The net of these balances are classified as "trade and other receivables" in the balance sheet.

Trade and other receivables are assessed for indicators of impairment at each balance sheet date and are impaired where there is objective evidence that the recovery of the receivable is in doubt.

Objective evidence of impairment could include significant financial difficulty of the customer, default on payment terms or the customer going into liquidation.

The carrying amount of trade and other receivables is reduced through the use of an allowance account. When a trade or other receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement.

Loans and receivables, as categorised above, are measured at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash at bank and in hand, deposits at call with banks, other short-term highly liquid investments with original maturity at acquisition of three months or less that are readily convertible to cash, net of bank overdrafts. For the purpose of the cash flow statement, cash and cash equivalents consist of the definition outlined above.

FINANCIAL LIABILITIES

All non-derivative financial liabilities are classified as other financial liabilities and are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Other financial liabilities consist of borrowings and trade and other payables.

Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

OTHER FINANCIAL LIABILTIES, BANK AND SHORT TERM BORROWINGS

Other financial liabilities, as categorised above, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. Other financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL

Equity instruments consist of the Company's ordinary share capital and are recorded at the proceeds received, net of direct issue costs.

SEGMENTAL ANALYSIS

Under IFRS 8 operating segments are considered to be components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Board of Directors. At present, and for the period under review, the Company's sole reporting segment is the tantalite mining operation in Namibia.

4

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS

In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. 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 judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The carrying value of assets is determined based on their fair value as supported by a management valuation less costs to sell. This estimate and assumption can present a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.

The valuation of the options 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. The estimate and assumptions could materially affect the Income Statement.

5

SEGMENTAL REPORTING

The business consists of a single investment activity being the tantalite mining operation in Namibia. As a result the segmental financial information is the same as that set out in the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and the Statement of Cash Flows.

6

OPERATING LOSS

Year ended

30 June 2015

 £'000

Year ended

 30 June 2014

 £'000

Loss for the period has been arrived at after charging:

Staff costs as per Note 8 below

47

40

Auditors remuneration

15

9

7

auditors' remuneration

The analysis of auditors' remuneration is as follows:

Year ended 30 June 2015

£'000

Year ended 30 June 2014

£'000

Fees payable to the Group's auditors for the audit of the Group's annual accounts

15

8

Total audit fees

15

8

Fees payable to the Group auditor and their associates for other services to the Group:

Tax services

1

1

16

9

8

staff costs

The average monthly number of employees (including executive directors) for the continuing operations was:

Year ended

30 June 2015

Number

Year ended

30 June 2014

Number

Group total staff

5

4

£'000

£'000

Wages and salaries

20

37

Directors' compensation for loss of office

24

-

Social security costs

3

3

47

40

Directors' emoluments

An analysis of the directors' emoluments and pension entitlements and their interest in the share capital of the Company is contained in the Report of the Board on remuneration accompanying these financial statements.

9

taxation

Year ended

30 June 2015

£'000

Year ended

30 June 2014

£'000

Loss on continuing operations before tax

(219)

(186)

Tax at the UK corporation tax rate of 20% (2014: 21.5%)

(44)

(40)

Effects of:

Effect of unrealised investment losses not deductible for tax purposes

-

12

Expenses not deductible for tax purposes

5

2

Unutilised tax losses carried forward

39

26

Tax charge for period

-

-

The total taxation charge in future periods will be affected by any changes to the corporation tax rates in force in the countries in which the Group operates.

10

LOSS PER SHARE

The calculation of basic loss per share is based on the following data:

Year ended

 30 June 2015

Year ended

 30 June 2014

£'000

£'000

Loss for the financial period

(219)

(186)

Loss for the year attributable to owners of the Company

(199)

(186)

Weighted average number of ordinary shares in issue for basic and fully diluted earnings*

43,084,226

38,791,151

LOSS PER SHARE (PENCE PER SHARE)

BASIC AND FULLY DILUTED*:

- from continuing and total operations

(0.5)

(0.5)

11

INTANGIBLE ASSETS

Goodwill

Mining

licences

2015

£'000

£'000

£'000

At 1 July 2013 and 2014

-

-

-

Arising on acquisition of African Tantalum (Pty) Ltd

442

10

452

At 30 June 2015

442

10

452

12

PROPERTY, PLANT AND EQUIPMENT

Land & buildings

Plant & equipment

Total

£'000

£'000

£'000

Cost

At 1 July 2013 and 2014

-

-

-

On acquisition of African Tantalum (Pty) Ltd

125

270

395

Cost at 30 June 2015

125

270

395

Depreciation

At 1 July 2013 and 2014

-

-

-

Charge for the year

-

-

-

Depreciation at 30 June 2015

-

-

-

Net book value at 30 June 2015

125

270

395

Net book value at 30 June 2014

-

-

-

13

INVESTMENT IN subsidiarY UNDERTAKINGS

The Company invests in its subsidiary and associated undertakings

COMPANY

2015

£'000

2014

£'000

Cost and net book value

At 1 July

-

-

Acquisition of African Tantalum (Pty) Ltd

686

-

Additional advances to African Tantalum (Pty) Ltd

72

-

As at 30 June

758

-

All principal subsidiaries of the Group are consolidated into the financial statements. At 30 June 2015 the subsidiaries were as follows:

Subsidiary undertakings

Country of registration

Principal activity

Holding

%

African Tantalum (Pty) Ltd

Namibia

Intermediate holding company

Ordinary shares

75

*Namibia Tantalite Investments (Pty) Ltd

Namibia

Tantalite mining

Ordinary shares

60

\* Tameka Shelf Company Four (Pty) Ltd

Namibia

Mining licence holder

Ordinary shares

60

*Held through subsidiary undertaking.

COMPANY

2015

£'000

2014

£'000

At 1 July

-

-

Shares issued in respect of acquisition of Aftan

222

-

Loan to Aftan

536

-

As at 30 June

758

-

14

AVAILABLE-FOR-SALE INVESTMENTS

GROUP

COMPANY

2015

£'000

2014

£'000

2015

£'000

2014

£'000

Balance brought forward

22

77

22

77

Disposals

(22)

-

(22)

-

Provision for impairment

-

(55)

-

(55)

Balance carried forward

-

22

-

22

Categorised as:

Level 3 - Unquoted investments

-

22

-

22

15

TRADE AND OTHER RECEIVABLES

GROUP

COMPANY

2015

2014

2015

2014

£'000

£'000

£'000

£'000

Other receivables

7

5

4

5

Prepayments and accrued income

6

5

6

5

13

10

10

10

16

CASH AND CASH EQUIVALENTS

GROUP

COMPANY

2015

2014

2015

2014

£'000

£'000

£'000

£'000

Cash and cash equivalents

26

531

7

531

17

TRADE AND OTHER PAYABLES

GROUP

COMPANY

2015

2014

2015

2014

£'000

£'000

£'000

£'000

Trade payables

44

46

36

46

Other payables

3

22

-

22

Accruals

51

17

51

17

98

85

87

85

The Directors consider the carrying amount of trade payables approximates to their fair value.

18

SHORT TERM BORROWINGS

GROUP

COMPANY

2015

2014

2015

2014

£'000

£'000

£'000

£'000

Westleigh Investments Holdings Ltd loan

142

-

142

-

142

-

142

-

On 13 November 2014 the Company agreed a £200,000 loan facility, under which the Company had drawn down £142,000 at the year end. See note 26, Related party transactions, for further details.

Subsequent to the year end, in July 2015, the loan was repaid, £42,000 in cash and £100,000 through the issue of shares.

19

share capital AND SHARE PREMIUM

Number of shares

Nominal value

£'000

Share premium

£'000

ISSUED AND FULLY PAID:

At 30 June 2013, shares of 1p each

27,098,000

271

7,571

Share issue

44,000,000

440

110

Share issue expenses

-

-

(8)

At 30 June 2014, shares of 1p each

71,098,000

711

7,673

Share issues

5,211,748

52

176

At 30 June 2015

76,309,748

763

7,849

Share issues

On 2 February 2015, the Company issued 4,523,113 ordinary shares of 1p each at 4.9p per share in respect of the acquisition of African Tantalum (Pty) Ltd.

On 25 March 2015 the Company issued 688,635 ordinary shares of 1p each at par on the exercise of options.

20

Share-based payments

Equity-settled share option scheme

The Company operates share-based payment arrangements to incentivise directors by the grant of share options. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

On 25 March 2014 the Board resolved to grant options over up to 8,531,760 new ordinary shares exercisable at 1.25p per share and granted 1,599,705 such options each to G Clarke and N Harrison. The options are exercisable at any time up to 25 March 2018.

The significant inputs to the model in respect of the options granted were as follows:

Share price at date of grant

Exercise price

No. of share options

Expected volatility

Option life

Risk free rate

Calculated fair value per share

1.50 pence

1.25 pence

3,199,410

50%

4 years

2.5%

0.517 pence

Number of

options at

1 July 2014

Issued in the year

Exercised in the year

Number of options at

30 June 2015

Exercise price

Vesting Date

Expiry date

3,199,410

-

-

3,199,410

1.25p

25.03.2014

25.03.2018

21

ACQUISITION OF SUBSIDIARY UNDERTAKINGS

On 2 February 2015 the Company completed the acquisition of 75% of African Tantalum (Pty) Ltd, which simultaneously completed its acquisition of 60% of Namibia Tantalite Investments (Pty) Ltd ("NTI") and Tameka Shelf Company Four (Pty) Ltd. The net assets acquired in these two transactions are summarised below:

Net assets acquired:

Book

value

Fair value adjustments

Fair

value

£'000

£'000

£'000

Property, plant and equipment

-

395

395

Intangible assets

-

10

10

Trade and other receivables

2

-

2

2

405

407

Non-controlling interest

(163)

Goodwill

442

Total consideration

686

Satisfied by:

Cash

454

Issue of 4,523,113 shares at 4.9p per share

221

Directly attributable costs

11

686

22

FINANCIAL INSTRUMENTS

The Group's financial instruments comprise borrowings, cash and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations.

FINANCIAL ASSETS BY CATEGORY

The IAS 39 categories of financial assets included in the Statement of financial position and the headings in which they are included are as follows:

2015

2014

£'000

£'000

Financial assets:

Cash and cash equivalents

26

531

Available for sale investments

-

22

Loans and receivables

7

5

33

558

FINANCIAL LIABILITIES BY CATEGORY

The IAS 39 categories of financial liability included in the Statement of financial position and the headings in which they are included are as follows:

2015

2014

£'000

£'000

Financial liabilities at amortised cost:

Trade and other payables

47

68

Short term borrowings

142

-

189

68

The following table details the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest repayment date on which the Company can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from the interest rate curves at the balance sheet date. The contractual maturity is based on the earliest date on which the Company may be required to pay.

Less than

1 month

1-3 months

3 months

to 1 year

1-5 years

Over 5 years

£'000

£'000

£'000

£'000

£'000

30 June 2015

Non-interest bearing:

Trade and other payables

-

47

-

-

-

Short term borrowings

-

142

-

-

-

30 June 2014

Non-interest bearing:

Trade and other payables

-

68

-

-

-

Short term borrowings

-

-

-

-

-

23

RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group's risk management is coordinated by the Board of Directors, and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets.

The main risks the Group are exposed to through its financial instruments and the operations of the Group are credit risk, foreign currency risk, liquidity risk and market price risk. These risks are managed by the Group's finance function together with the Board of Directors.

Capital risk management

The Group's objectives when managing capital are:

· to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

· to support the Group's growth; and

· to provide capital for the purpose of strengthening the Group's risk management capability.

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.

Credit risk

The Group's financial instruments, which are subject to credit risk, are cash and cash equivalents. The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable financial institutions.

The Group's maximum exposure to credit risk is £26,000 (2014: £531,000) comprising cash and cash equivalents.

Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations.

Foreign Currency risk

The Group undertakes transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Following the acquisition of African Tantalum (Pty) Ltd. Ltd, the Group's major activity is now in Namibia, bringing exposure to the exchange rate fluctuations of GBP/£ Sterling with the Namibian Dollars and South African Rand, the currencies in which most of the operating costs are denominated. At the year end the value of assets denominated in these currencies was such that the resulting exposure to exchange rate fluctuations was not material to the Group's operations. Going forwards the Group is exposed to the US$ as it has entered into an off-take agreement for the major part of its production, priced in US$.

Exchange rate exposures are managed within approved policy parameters. The Group has not entered into forward exchange contracts to mitigate the exposure to foreign currency risk.

The Directors consider the assets most susceptible to foreign currency movements to be the Investment in Subsidiaries. Although these investments are denominated in Namibian Dollars their value is dependent on the global market value of the available Tantalite resources.

Market Price risk

Going forwards the Group's exposure to market price risk mainly arises from potential movements in the market price of Tantalite. The Group is managing this price risk by completing a fixed price off-take agreement in respect of the major part of its planned production.

24

NOTES TO THE CASHFLOW STATEMENT

GROUP

COMPANY

2015

2014

2015

2014

£'000

£'000

£'000

£'000

Operating loss

(219)

(186)

(160)

(186)

Fair value movements in investments

-

55

-

55

Share based payment expense

-

23

-

23

Operating cash flows before movement in working capital

(219)

(108)

(160)

(108)

(Increase)/decrease in receivables

(3)

15

-

15

Increase in payables

36

26

23

26

Net cash used in operating activities

(186)

(67)

(137)

(67)

25

EVENTS AFTER THE REPORTING PERIOD

On 8 July 2015 the Company announced that it had raised £1.4 million before expenses through the placing of 26,666,667 new ordinary shares in the Company at a price of 5.25p per share. The proceeds of the placing will be used to bring the Tantalite Valley Mine back into production, to conduct due diligence on other potential tantalite projects, and for investment and general working capital purposes.

On 16 July 2015, under the Company's option scheme 1,599,705 options were granted, each to Giles Clarke and Nick Harrison, exercisable at 1.25p per share, and 1,066,470 options were granted to each of Peter Redmond and Colin Weinberg on the same terms.

It was agreed that in respect unsecured loan from Westleigh Investment Holdings Limited ("WIHL") for £142,000, £100,000 of the loan facility would be repaid by the issue to WIHL of 1,904,762 ordinary shares of 1p at 5.25p per share, and the balance of £42,000 would be repaid in cash from the proceeds of the recent share placing.

It was announced that Peter Redmond and Colin Weinberg had agreed to convert accrued fees amounting to £10,000 each into new ordinary shares of 1p at 5.25p per share, resulting in the issue of 380,952 new ordinary shares.

On 24 July 2015 the Company agreed to make a conditional award of 1,400,000 ordinary shares of 1p each to Peter Hibberd. The shares granted under the award will be issued as certain performance criteria are met, including inter alia the completion of the initial shipments of tantalite pursuant to its recent off-take agreement and the on-going profitability of the Company.

On 1 September 2015 the Company announced that it had entered into a purchase agreement with Magnum Mining and Exploration Limited to acquire the remaining 40% interest in the Tantalite Valley Project in Namibia for a cash consideration of ZAR 7 million (c. GBP 0.35million).

26

Related party tranSactions

The remuneration of the Directors, who are the key management personnel of the Company, is set out in the report of the Board on remuneration accompanying these financial statements.

During the year the Company was in receipt of an interest free loan from Westleigh Investment Holdings Ltd ("WIHL") for £142,000. Subsequent to the year end it was agreed that this loan would be repaid, £42,000 in cash and £100,000 through the issue of shares. Also during the year WIHL received £12,500 in respect of accounting services provided to the Company. WIHL is a substantial shareholder in the Company and is controlled by Giles Clarke and Nick Harrison.

There have been no other material transactions with related parties.

27

OPeRATING LEASES

The Group has an operating lease over the land for which it has a mining licence which endures until the mining operations permanently cease. The rent is approximately £150 per annum.

28

CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

There were no capital commitments authorised by the Directors or contracted for at 30 June 2015 (2014: £nil).

29

ULTIMATE CONTROLLING PARTY

The Directors do not consider there to be one single ultimate controlling party.