MMS.L Regulatory News (MMS)

RNS Number : 5625Q

Maghreb Minerals PLC

05 August 2010

 

 

 

MAGHREB MINERALS plc

 

Preliminary Results for the year ended 30 June 2010.

 

Maghreb Minerals plc ("Maghreb" or "the Company"), the AIM-quoted mineral exploration company exploring for, and developing base metals and industrial minerals in Tunisia, announces its unaudited results for the year ended 30 June 2010.

 

Highlights and Outlook

 

• A detailed strategic review of the Company's exploration properties in Tunisia was completed in April 2010.

• Active exploration fieldwork recommenced in May 2010 with the commencement of drilling activities at the Zriba Fluorspar exploration permit.

• New discussions with regards to partners in the lead and zinc assets have been initiated.

• A programme of identifying and evaluating additional potential investment opportunities, with a focus on acquiring assets in the fluorspar sector internationally is being actively pursued by management with the support of its major shareholders, Firebird Global Master Fund Ltd and Firebird Global Master Fund II Ltd (together "Firebird").

• The Board was restructured with effect from 31 March 2010 and a new CEO was appointed with effect from 10 May 2010.

• Cash at bank of £461,000 as at 30 June 2010.

• The Board is actively exploring funding options with the support of Firebird.

 

 

Commenting, Richard Linnell, Chairman, said:

 

"The past year has been one of significant change for the Company. These changes have placed Maghreb in a good position to proactively pursue its strategy of acquiring assets in the fluorspar sector internationally and to continue with the development of its Tunisian exploration properties. The Company, with the full support of its major shareholder, Firebird, is actively exploring funding options to further finance these activities"

 

 

 

ENQUIRIES:

 

Maghreb Minerals plc  

Richard Linnell, Chairman Tel +44 (0) 20 7556 0940

Dunbar Dales, CEO Tel +27 (0) 83 258 9062

 

Westhouse Securities Limited Tel +44 (0) 20 7601 6100

Tim Metcalfe / Martin Davison

 

CHAIRMAN'S STATEMENT

 

The year ending 30 June 2010 has been one of significant change for Maghreb Minerals Plc ("Maghreb" or the "Company") on the Operational, Management and Corporate fronts. These changes have positioned the Company to further develop its core projects in Tunisia and to take advantage of developments in the international fluorspar sector, which the Directors believe will add significant value to the Company.

 

Operations

 

In the period July 2009 to April 2010, the Company managed the operations at its 10 exploration permits ("EP") in Tunisia on a "care and maintenance" basis. This was done to preserve cash as the Board reviewed the commerciality of its permits.

 

In April 2010, the Company completed a detailed technical review of its exploration permits, which concluded that six of the permit areas contained insufficient resources to justify further expenditure and should therefore be dropped. This has been done and those permits have been formally relinquished. Since then, Maghreb has focused on developing the remaining four exploration permits. They are the Bou Jabeur Pb/Zn (lead/zinc) Mine, the Fej Lahdoum Pb/Zn Mine, together with the surrounding exploration area and the Zriba-Guebli CaF2 (fluorspar) deposit.

 

Active exploration activities were resumed in May 2010 following the successful mobilisation of the exploration team. The exploration programme has been broken into distinct phases separated by decision points so that no monies are spent on unnecessary work. The Company is currently busy with phase one which involves drilling the Zriba South and Zriba North CaF2 orebodies to test for projected extensions of the main (mined out) Zriba orebody and to verify the results of old boreholes drilled by Tunisian Office National des Mines (ONM) in the area.

 

It is anticipated that the Zriba drilling programme will be completed by the end of October 2010 after which the drill rig will be moved to the Bou Jabeur EP. The Bou Jabeur drill programme is anticipated to be completed by the calendar year end and a drilling programme at Fej Lahdoum has been scheduled to start early in 2011.

 

 

Board and Management Changes

 

The Structure of the Board and Senior Management changed significantly during the period. Mr Richard Collier, the chief executive, and Mr Anthony Allen, a non-executive director, resigned from the Company with effect from with effect from 31 March 2010. Dunbar Dales was appointed as Chief Executive Officer and a Director of the Company with effect from 10 May 2010.

 

Corporate Changes

 

The capital structure of the Company changed significantly over the reporting period.

 

An Extraordinary General Meeting was held on 12 November 2009, which resulted in the conversion of the £500,000 convertible loan note into convertible preference shares and the raising of an additional £300,000 in equity finance. The convertible preference shares were then converted into 22,222,222 ordinary shares on 31 March 2010.

 

The Company subsequently raised a further £700,003 in three tranches through the issue new ordinary shares:

 

·; £400,000 on was raised on 9 April 2010, through subscriptions for 26,666,668 new ordinary shares of 0.6 pence each in the Company at a price of 1.5 pence per share.

·; £100,000.99 on was raised on 15 June 2010, through subscriptions for 6,666,732 new ordinary shares of 0.6 pence each in the Company at a price of 1.5 pence per share.

·; £200,002.20 was raised on 28 June 2010, through subscriptions for 13,333,480 new ordinary shares of 0.6 pence each in the Company at a price of 1.5 pence per share.

 

The number of shares in issue after the completion of these placings and the conversion of the preference shares is 179,923,083. Firebird holds 80,125,193 of these shares (44.5%).

 

 

Financial

 

The Group made a consolidated loss for the year ended 30 June 2010 of £914,000 (2009 - £1,437,000).

 

The financial highlights are tabled below:

 

 

	2010	2009
	£'000	£'000
Fixed assets purchased	-	2
Exploration expenditure	275	747
Administration expenditure	639	704
Total expenditure	914	1,453

 

At 30 June 2010, the Group had £461,000 in cash which at the date of this report had decreased to £388,000 in cash. The Group, with the support of its major shareholder, Firebird, is actively exploring further financing.

 

Outlook

 

Having completed a strategic review, the Maghreb management team with the support of the Company's major shareholders, are:

 

·; actively pursuing a programme of identifying and evaluating additional potential investment opportunities, with a focus on acquiring assets in the fluorspar sector internationally.

 

·; continuing to implement an active exploration programme in Tunisia to add value to its four core Tunisian properties, as discussed above, by delineating additional resources at each of them. In addition, management is continuing with its endeavours to find an industry partner to assist in advancing Maghreb's two prospective Pb/Zn projects, namely Bou Jabeur and Fej Lahdoum.

 

The statutory accounts for the year ended 30 June 2010 are still subject to the auditors report. At this time the auditors have indicated that the statutory accounts may include an emphasis of matter paragraph in relation to the Group's ability to continue as a going concern but this cannot be determined until the audit process is complete.

 

In the year ended 30 June 2010 the unaudited financial statements show that the Group had incurred a net loss of £914,000 and at that date the Group's net assets were £474,000. The Group is reliant on future funding from existing investors. This condition indicates the existence of a material uncertainty, which may cast significant doubt about the Group and the Company's ability to continue as going concerns. The unaudited financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern

 

 

Richard Linnell

Chairman

4 August 2010

 

  

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

For the year ended 30 June 2010

 

	Unaudited 2010	Audited 2009
	£'000	£'000
Revenue	-	-
Exploration expenses	(275)	(747)
Gross loss	(275)	(747)
Administrative expenses	(639)	(704)
Operating loss	(914)	(1,451)
Investment income	-	14
Income tax expense	-	-
Total loss for the year attributable to the equity holders of the parent     Other comprehensive income	(914)       -	(1,437)       -
Total comprehensive loss for the year attributable to the equity holders of the parent	(914)	(1,437)
Earnings per share
Basic and diluted loss per share from operations after tax (pence)	(0.79)	(1.58)

 

 

CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

 

Company Registration Number: 5146673

 

As at 30 June 2010

 

	Group		Company
	2010	2009	2010	2009
	£'000	£'000	£'000	£'000
Non-current assets	Unaudited	Audited	Unaudited	Audited
Intangible assets Property, plant and equipment	- 43	82 84	- -	- 6
Investments	-	-	-	84
	43	166	-	90
Current assets
Trade and other receivables	44	26	38	100
Cash and cash equivalents	461	237	454	237
Current liabilities	505	263	492	337
Convertible Loan Note	-	(500)	-	(500)
Trade and other payables	(74)	(42)	(59)	(33)
	(74)	(542)	(59)	(533)
Net current assets/(liabilities)	431	(279)	433	(196)
Net assets/(liabilities)	474	(113)	433	(106)
Equity
Share capital	1,079	546	1,079	546
Share premium account	7,441	6,474	7,441	6,474
Share option reserve	48	229	48	229
Retained loss	(8,094)	(7,362)	(8,135)	(7,355)
Total equity	474	(113)	433	(106)

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

 

For the year ended 30 June 2010

 

	Ordinary Share Capital	Preference Share Capital	Share Premium	Share Option Reserve	Retained Earnings	Total
	£'000		£'000	£'000	£'000	£'000
Balance at 1 July 2008	546	-	6,474	210	(5,925)	1,305
Total comprehensive loss for the year	-	-	-	-	(1,437)	(1,436)
Share based payments	-	-	-	19	-	19
Balance at 1 July 2009	546	-	6,474	229	(7,362)	(113)
Total comprehensive loss for the year	-		-	-	(914)	(914)
Issue of convertible preference shares in the year	-	133	367	-	-	500
Conversion of preference shares in the year	133	(133)	-	-	-	-
Issue of ordinary shares in the year	400	-	600	-	-	1,000
Share based payments	-	-	-	1	-	1
Transfer from share option reserve	-	-	-	(182)	182	-
Unaudited Balance at 30 June 2010	1,079	-	7,441	48	(8,094)	474

 

CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

 

For the year ended 30 June 2010

 

	Group		Company
	2010	2009	2010	2009
	£'000	£'000	£'000	£'000
	Unaudited	Audited	Unaudited	Audited
Cash flows from operating activities
Operating loss before interest and tax	(914)	(1,451)	(962)	(1,535)
Add : Depreciation charges for the year	41	55	6	7
Add : Share option reserve charge	1	19	1	19
Add: Write-off of intangibles	82	-	84	-
Operating loss before working capital change	(790)	(1,377)	(871)	(1,509)
(Increase) Decrease in trade and other receivables	(18)	10	62	78
Increase (Decrease) in trade and other payables	32	(117)	26	(49)
(Decrease) in provisions	-	(10)		-
Net cash flow from operating activities	(776)	(1,494)	(783)	(1,480)
Cash flows from investing activities
Purchases of plant and equipment	-	(2)	-	-
Interest income received	-	14	-	14
Net cash from investing activities	-	12	-	14
Cash flows from financing activities
Proceeds on issue of share capital	1,000	-	1,000	-
Proceeds from convertible loan note	-	500	-	500
Net cash from financing activities	1,000	500	1,000	500
Net increase (decrease) in cash and cash equivalents	224	(982)	217	(966)
Cash and cash equivalents at the beginning of the year	237	1,219	237	1,203
Cash and cash equivalents at the end of the year	461	237	454	237

NOTES TO THE ACCOUNTS

 

1. General information

 

Maghreb Minerals Plc is a public limited company and was incorporated in England and Wales on 7 June 2004. The principal activities of the Company and its subsidiaries (the Group) are described in the Chairman's Statement.

 

The financial information has been prepared using the recognition and measurement principles of IFRS.

 

The financial information is presented in pounds sterling, prepared on a historical cost basis and, unless otherwise stated, rounded to the nearest thousand. The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 30 June 2010 or 30 June 2009.

 

The auditors' opinion on the statutory accounts for the year ended 30 June 2009 was unqualified and did not contain a statement made under s495 of the Companies Act 2006. However, it did contain an emphasis of matter paragraph in relation to the Group's ability to continue as a going concern. The auditors considered the adequacy of the disclosure made in the notes to those financial statements concerning the Group's ability to continue as a going concern. In the year ended 30 June 2009, the Group incurred a net loss of £1,437,000 and at that date the Group's net current liabilities were £279,000. As explained in the notes to those financial statements, the Group was reliant on future funding from existing investors. This condition indicated the existence of a material uncertainty, which may cast significant doubt about the Group and the Company's ability to continue as going concerns. The financial statements did not include the adjustments that would result if the Group was unable to continue as a going concern.

 

The Chairman's Statement contains information on the material uncertainty relating to going concern in the current year.

 

There is no material seasonality associated with the Group's activities.

 

The statutory accounts for the year ended 30 June 2010 have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them.

 

The preliminary results were authorised for issue by the board of directors on 3 August 2010.

 

Consolidated financial statements

The consolidated financial statements from which this information has been extracted have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") and the Companies Act 2006 as applicable to companies reporting under IFRS.

 

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below. The preparation of the financial statements require the use of estimates and assumptions that affect the reported amount of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results may differ from those estimates.

 

2. International Financial Reporting Standards

 

The Group follows the Standards and Interpretations issued by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee of the IASB and endorsed by the European Union that are relevant to its operations.

 

During the year, the Group has applied the following standard which is effective for the period beginning on or after January 1, 2009. The adoption of this standard only impacts the presentation and the extent of the disclosures presented in the financial statements:

 

- IAS 1 revised, Presentation of Financial Statements

 

IAS 1(revised) has introduced a number of changes in terminology and as a consequence the balance sheet has been renamed the "statement of financial position", the cash flow statement has been renamed the "statement of cash flows" and the income statement, in the case of the Group's accounting policy, has been renamed the "combined statement of comprehensive income".

 

At the date of authorisation of these financial statements, the Group is aware of the following International Financial Reporting Standards ("IFRSs") which were in issue but have not been applied in these financial statements as they are not mandatorily effective:

 

- Amendments to IFRS 2 - Group cash-settled share-based payment transactions (effective 1st January 2010)

- IFRS 9 - Financial Instruments (effective 1st January 2013 - not yet endorsed by EU)

- IAS 24 - Related Party Transactions (effective 1st January 2011 - not yet endorsed by EU)

- IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments (effective 1st July 2010 - not yet endorsed by EU)

 

The Directors anticipate that the adoption of IFRIC 19 may have a material impact on the Group's future financial statements, however that it will not have an effect this year.

 

IFRS 6 Exploration for and Evaluation of Mineral Resources permits an entity on adopting IFRS to change its accounting policies for exploration and evaluation expenditures if the change makes the financial statements more relevant to the economic decision making needs of the users. Equally, IFRS 6 permits an entity to continue to use the accounting policies applied immediately before adopting the IFRS if this is considered more relevant. The Directors believe it was and is more relevant to continue with the accounting policies then prevailing and apply United Kingdom generally accepted accounting practices for exploration and evaluation expenditures.

 

3. Significant accounting policies

 

The financial statements have been prepared in accordance with IFRS as adopted for use in the European Union. The financial statements have been prepared on the historic cost basis.

 

The critical accounting policies set out below have been applied consistently by Group entities:

 

Basis of consolidation

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

 

The results of subsidiaries acquired during the year are included in the consolidated Statement of Comprehensive Income from the effective date of acquisition.

 

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

 

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

 

Going concern

The Group had approximately £461,000 in gross cash resources as at 30 June 2010 (2009 - £237,000).

 

The Directors have formed a judgment at the time of approving the financial statements that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the next twelve months. However for reasons disclosed in the Chairman's Statement, a material uncertainty still may exist.

 

The financial information has been prepared on the going concern basis, the validity of which is dependent on the successful conclusion of the matters described in the Chairman's Statement. The future of the Group depends on the discovery of economically viable mineral deposits and the availability of subsequent funding to extract the resource or alternatively the availability of funding to extend the Group's exploration activities. If these are unsuccessful, the Group is likely to face severe financial difficulty and may be obliged to cease trading. The financial information does not include any adjustment that would arise from a failure to complete either option.

 

Revenue Recognition

The Group has not generated any revenue in the year ended 30 June 2010.

 

4. Consolidated operating loss for the year

 

Operating loss for the year is stated after charging:	2010	2009
	£'000	£'000
Depreciation of plant and equipment owned by the Group	41	55
Directors' fees and salaries	144	255
Foreign exchange losses Operating lease charges Write-off of intangibles	- 33 82	(1) 35 -

 

5. Earnings per ordinary share (basic and diluted)

 

The calculation of the basic loss per share attributable to the ordinary equity holders of the parent has been calculated on the net loss after tax of £914,000 (2009 - £1,437,000), using the weighted average number of ordinary shares of 115,247,075 (2009 - 91,033,981).

 

Share options in issue decrease the loss per share for the year, and as such are deemed anti-dilutive. Therefore the diluted loss per share is the same as the basic loss per share for both 2010 and 2009.

 

The total number of share options outstanding at the year end which could potentially become dilutive in the future is 19,100,000 (2009 - 9,100,000).

	Unaudited 2010	Audited 2009
	Pence	Pence
Total basic and diluted loss per share from operations	(0.79)	(1.58)

 

 

 

6. Consolidated Share capital

 

	Number		Nominal Value
	Unaudited	Audited	Unaudited	Audited
Authorised	2010	2009	2010	2009
	('000)	('000)	£'000	£'000
Ordinary shares of 0.6p each	300,000	150,000	1,800	900
Called up, allotted and fully paid
Ordinary shares of 0.6p each	179,923	91,034	1,079	546

 

The Group has one class of ordinary shares which carry no right to fixed income.

 

7. Consolidated Share Option Reserve

 

	Share Option Reserve
	Unaudited	Audited
	2010	2009
	£'000	£'000
Balance on 1 July 2009/2008	229	210
Share based payments - share option scheme	34	41
Decrease required for forfeited share options	(33)	(22)
Reserve transfer for expired share options	(182)	-
Balance at 30 June 2010/2009	48	229

 

The share option reserve arises as a result of the expense recognised in the income statement for the cost of share-based employee compensation arrangements.

 

 

8. Retained loss

 

	Group		Company
	Unaudited	Audited	Unaudited	Audited
	2010	2009	2010	2009
	£'000	£'000	£'000	£'000
At 1 July 2008 and 1 July 2007	(7,362)	(5,925)	(7,355)	(5,834)
Loss for the financial year	(914)	(1,459)	(962)	(1,521)
Transfer from share option reserve	182	22	182	22
At 30 June 2010 and 2009	(8,094)	(7,362)	(8,135)	(7,355)

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