30 Jun 2017 07:00
Audited results for the year ended 31 December 2016
Metal Tiger Plc
30 June 2017
Metal Tiger Plc
("Metal Tiger" or the "Company")
Audited results for the year ended 31 December 2016
Metal Tiger (LON: MTR), the natural resources investing company is pleased to announce its audited results for the year ended 31 December 2016.
Highlights:
Investment gains, both realised and unrealised total £2,643,110 for 2016 Reinvestment focused on Thailand and Botswana Increase in net cash in year of £1,035,019 (after net proceeds from share issues of £5,700,293 and proceeds of investment sales of £1,153,399 reinvested in Joint Ventures and Associates £1,617,680 and Direct Equity investments £1,734,711) Net Asset Value up 389% and Net Assets per fully diluted share up 135% Net Current Assets of £5,675,276 up from £1,058,333 in the Company in prior year Market capitalisation up 243% Increased costs from first time consolidation of the Thailand subsidiaries and general expansion of the businessMichael McNeilly CEO of Metal Tiger stated: "I am pleased to present the report and accounts for the year ended 31 December 2016 during which the value of Metal Tiger interests in Thailand and Botswana grew substantially and its investments in Direct Equities yielded strong results.
We closed the year concentrating on advancing our core projects with a stronger working capital position.
Progress in the first half of 2017 has been encouraging with: a capital raise from Sprott Capital Partners and others totalling £4.85m; excellent progress in the technical and environmental workstreams for the Pre-feasibility study in Botswana with our JV partners MOD Resources; and the completion of the PEA and CPR on the lead, zinc, silver mine in Thailand, which provides progress towards it achieving operating status. The Board believes that Metal Tiger is in a strong position to take advantage of a recovery in the natural resource sector.”
The Annual Report and Accounts for the year ended 31 December 2016, along with an explanatory note for shareholders, will be available shortly to view and download from Metal Tiger's website (www.metaltigerplc.com) in accordance with rule 26 of the AIM Rules for Companies along with a notice of Annual General Meeting and form of Proxy. The AGM is scheduled to take place at East India Club, 16 St James’s Square, London, SW1Y 4LH at 10.00 a.m. on 27 July 2017.
For further information on the Company, visit: www.metaltigerplc.com:
| Michael McNeilly (Chief Executive Officer) | Tel: +44 (0)20 7099 0738 | |||
| Keith Springall (Finance Director & Company Secretary) | Tel: +44 (0)20 7099 0738 | |||
| Sean Wyndham-Quin Neil Baldwin | Spark Advisory Partners Limited (Nominated Adviser) | Tel: +44 (0) 2033 683 555
www.sparkadvisorypartners.com | ||
| Nick Emerson Andy Thacker | SI Capital (Joint Broker) | Tel: +44 (0)1483 413 500 | ||
| Andrew Monk Andrew Raca | VSA Capital Limited (Joint Broker) | Tel: +44 (0)20 3005 5000 | ||
| Gordon Poole Sean Blundell | Camarco (Financial PR) | Tel: +44 (0)203 757 4980 |
Notes to Editors:
Metal Tiger plc is listed on the London Stock Exchange AIM Market (“AIM”) with the trading code MTR and invests in high potential mineral projects with a precious and strategic metals focus.
The Company’s target is to deliver a very high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector timed to coincide, where possible, with a cyclical recovery in the exploration and mining markets. The Company’s key strategic objective is to ensure the distribution to shareholders of major returns achieved from disposals.
Metal Tiger’s Metal Projects Division is focused on the development of its key project interests in Botswana, Spain and Thailand. In Botswana Metal Tiger has a growing interest in the large and highly prospective Kalahari copper/silver belt. In Spain Metal Tiger has tungsten and gold interests in the highly-mineralised Extremadura region. In Thailand Metal Tiger has interests in two potentially near-production stage lead, zinc, silver mines as well as licences, applications and critical historical data covering antimony, copper, gold, silver, lead and zinc opportunities.
The Company has access to a diverse pipeline of new opportunities focused on the natural resource sector including physical resource projects, new natural resource centred technologies and resource sector related fintech opportunities. Pipeline projects deemed commercially viable may be undertaken by Metal Tiger or by an AIM or NEX Exchange (formerly ISDX) partner with whom the Company is engaged.
Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 December 2016
I am pleased to report on the Company’s audited results for the year ended 31 December 2016 which proved to be another major period of growth and development for Metal Tiger.
During the year, Metal Tiger continued to invest in undervalued AIM listed companies holding stakes in eleven listed companies following its money in all cases. Its investments generated gains, realised and unrealised, in the year of £2.64million.
The improvement in commodity prices in 2016 held back the disposal of assets in the mining industry in 2016 but, with the Q1 2017 falls in commodity prices, the Board envisages there will be a restructuring of corporate balance sheets creating opportunities for companies such as Metal Tiger in 2017.
| Year End Commodity Prices December 2015-2016(US$) | December2016 | December2015 | Change | ||||
| Copper | per tonne | $5,500 | $4,636 | +19% | |||
| Lead | per tonne | $1,983 | $1,667 | +19% | |||
| Zinc | per tonne | $2,562 | $1,528 | +68% | |||
| Silver | per ounce | $16.04 | $14.57 | +10% | |||
| Gold | per ounce | $1,156 | $1,079 | +7% | |||
An indicative offer was made for Metal Tiger on 25 November 2016 which significantly undervalued the Group. Interest in this takeover subsequently fell away. The Board and management of the Company were restructured on 5 December 2016, and critically we believe that the new Board and management team have the requisite complimentary skill sets to allow for successful investment and management of the Group’s investments, in particular with regard to the two key projects in Botswana and Thailand.
Improved market confidence post Board and management restructuring saw the share price rise from a low of 1.375p on 16 December 2016 to a high of 3.25p on 29 March 2017. Despite the share price falling back at the time of writing, the Board has full confidence that the Company has excellent prospects going forward.
The long term outlook for the metals in which Metal Tiger is invested (copper, lead, zinc, silver and gold) are expected to be positive in the years ahead. The consolidation of the rebound in copper prices, that began in November 2016, is expected to continue with the copper market forecast to experience a couple of years of balance before a supply deficit kicks in.
As for lead and zinc, industrial metal prices are expected to remain supported in 2017 due to strong demand from China, and supply constraints in Chile, Indonesia and Peru. Zinc is expected to be one of the strongest performers in 2017, following the 60% rise in 2016.. Lead is also expected to continue to perform strongly as a result of mine exhaustions as battery and industrial demand rises.
Metal Tiger was very active for the second year in a row, with substantial progress with respect to its projects in Botswana and Thailand, extensive assessment of new opportunities and active management of the equities portfolio. The Board is now focused on maximising its returns from its two key projects in Thailand and in Botswana and the Company will continue to grow into a more robust natural resources investing company.
Furthermore, on 21 April 2017 a successful placement of new shares to Sprott Capital Partners and existing shareholders raised gross proceeds of £4.85million at 3p. This is an endorsement of the Company’s existing projects and the potential opportunities of value creation in the year ahead.
Charles Hall
Chairman
29 June 2017
CHIEF EXECUTIVE OFFICER COMMENTARY
FOR THE YEAR ENDED 31 December 2016
I am pleased to present the audited results for the year ended 31 December 2016.
Alongside the financial statements and supporting notes, a full review of business activities during the year is provided within the Strategic Report commencing on page 5.
Given that the results are for the period ended 31 December 2016, they reflect a historical position in terms of the Company’s progress and indeed its financial position. To assist therefore we have included within the Strategic Report further information which details key events after the Financial Statement date of 31 December 2016.
The information supplied highlights the material progress achieved in Botswana and Thailand in 2016 and between 31 December 2016 and the date of this report. Furthermore, we also highlight the near quadrupling in Company working capital that has occurred over the same periods.
Metal Tiger is an active company, and has been so since it first came to AIM in mid-2014. We have built very rapidly during the last two years and expect the rate of growth to continue for the foreseeable future.
When we started in mid-2014 we had a small portfolio of interests and a small amount of working capital. Now we have a robust and diverse portfolio across our two divisions with the strongest working capital position the Company has experienced.
The Metal Tiger Board believes that whilst the commodity sector remains somewhat volatile, it has slowly started to emerge from the bottom of the cycle and so, with projects and material financial resources, we are well placed to deliver on our key objectives, namely, to generate material value through the projects in Botswana and Thailand and, at a suitable future point, to distribute gains to shareholders.
I should like to place on record my thanks to all the team at Metal Tiger who have worked incredibly hard to bring the Company so far in difficult market conditions. Furthermore, we are grateful to the advisers who have helped the Company to implement its business plan in an efficient and compliant manner.
And finally, but most importantly, my thanks to the shareholders who have continued to support the Company and to those investors who helped finance the Company. We continue to deliver our strategic objectives, by generating value in the resource sector to maximise gains for shareholders.
Michael McNeilly
Chief Executive Officer
29 June 2017
STRATEGIC REPORT
FOR THE YEAR ENDED 31 December 2016
RESULTS
The results of the Group for the year ended 31 December 2016 are set out on page 23 and show a loss before taxation for the year ended 31 December 2016 of £720,300 (2015 – Company loss £599,084).
REVIEW OF THE BUSINESS DURING THE YEAR
Investment Strategy
On 9 December 2016, we announced that no additional funds would be allocated to making further investments in quoted companies unless they were derived from the profits of the Direct Equities Division and in any event should only be allocated to investments of strategic importance. As a general rule, profits generated by the Direct Equities Division will be aimed towards financing existing and future Direct Projects.
The Direct Equities Division was formed to generate medium-term cash flow and long term asset growth by investing in listed resource companies where the years of sector decline had presented the potential for material gains in undervalued shares.
The Direct Projects Division targets direct investment by the Company in low-entry cost, high-value potential resource projects, working with experienced local teams which are able to deploy Metal Tiger’s finance with efficient and productive ground operations.
Since the restructuring of Metal Tiger’s Board on 4 December 2016, the focus has been on the most successful Direct Projects and to exit those Direct Projects with lower growth potential thereby maximising returns for shareholders. This has accelerated following the share placing of £4.85million made to Sprott Capital Partners and other existing and new shareholders, announced on 21 April 2017.
Finance and Working Capital
During 2016, Metal Tiger was able to raise £4,143,431 through placings and subscriptions undertaken in January, February, March, April, August and December 2016.
In all cases during 2016, secondary placings were undertaken at or around the mid-price of the Company and without heavy discounting.
Metal Tiger has continually demonstrated its ability to raise additional working capital during 2016 to increase existing resources and the money generated from the Direct Equities Division.
Direct Equities
Investments are made through Board level negotiations between companies and in 2016 have included Connemara Mining Company plc, Greatland Gold plc and Red Rock Resources plc. The most noteworthy investment was a holding of 50.9million shares in MOD Resources Ltd (“MOD”). MOD is Metal Tiger’s ASX quoted Botswanan joint venture partner. All these investments have been in the form of share and warrants package.
The Company had more than 3 per cent notifiable interests in 2016, those being: Orsu Metals Corporation, which was fully exited in 2016, Conroy Gold and Natural Resources plc, Connemara Mining Company plc, Goldstone Resources Ltd, Greatland Gold plc, Lionsgold Limited, Red Rock Resources plc and Thor Mining plc.
The final results for the year ended 31 December 2016 crystallised gains on disposal of investment in its Direct Equities Division of £296,280 (2015: £1,149,465). After marking the investments at the year end to their market values on 31 December 2016, there was an overall net gain of £2,643,110 (2015: £420,407) reported for the division in this year’s figures. This gain was achieved in a recovering natural resource sector and £1,251,049 of the net gain resulted from a rise in MOD’s share price.
The gains achieved were mainly reinvested into the Direct Projects division with a portion utilised to continue building the Company’s Direct Equities portfolio of listed resource company shares.
Direct Projects
Metal Tiger‘s Direct Projects are operated by Metal Tiger’s in-country partners who have the requisite knowledge and expertise to invest Metal Tiger’s capital in project advancement, with appropriate oversight from the Board and management of Metal Tiger as a material investor.
Thailand
Metal Tiger’s interest in Thailand evolved out of the team’s longstanding experience in the Thailand resource sector. This experience was effected with our first joint venture agreement announced on 27 October 2014, enabling the Company to earn up to a 75 per cent interest in respect of certain gold, copper and antimony licence applications.
Despite concerns from third parties over licensing in Thailand, the joint venture was granted its first Exclusive Prospecting Licence (“EPL”) with a one year validity in December 2014 and set about exploration work in 2015.
The work included airborne geophysics, surface geological mapping and sampling, deep soil sampling and chemical analysis for gold and pathfinder elements. Antimony mineralisation was identified in line with expectations however anomalous gold mineralisation was also identified prompting the extension of the exploration campaign in the area and consideration of additional licence acquisitions.
The ability of our joint venture partners to operate in Thailand and the team’s belief in the extensive in-country prospectivity, as validated through exploration to date, resulted in a decision to accelerate and increase our Thailand interests by acquiring 90 per cent of the original joint venture, as announced on 7 October 2015.
In addition, as announced on 24 November 2015, Metal Tiger also had an option to expand and acquire 90 per cent of a wider portfolio of Thai interests, including one further EPL, various additional licence applications and an extensive exploration and mining database in relation to the Boh Yai and Song Toh lead, zinc and silver mines (including an NI 43-101 resource and Preliminary Economic Assessment).
The progress made in the Thailand Joint Venture has been constant throughout the year starting with the exercise of the option to acquire all of SouthEast Mining Corporation’s (“SEAM”) Thailand’s interests in Thailand on 16 February 2016.
Metal Tiger elected to exercise its option to acquire the remainder of SEAM's Thailand interests (the "SEA Option") with an initial consideration of US$500,000 (the "Consideration"). This was satisfied by a combination of cash and shares. A payment of US$200,000 in cash (the "Cash Payment") was funded from existing cash resources and US$300,000 through the issue of 23,799,000 new ordinary shares in Metal Tiger (the "Share Payment") at a price of 0.87p, calculated per new ordinary share being the volume weighted average price for the 14-day calendar period immediately prior to SEA shareholder approval of the SEA Option which occurred at a General Meeting of the SEAM shareholders on 12 January 2016.
In addition, Metal Tiger also agreed that subject to Metal Tiger Exploration and Mining Co. Ltd. being granted its primary target prospecting licence 1/2557 in the Kanchanaburi province in Western Thailand, it will pay SEAM shareholders a further US$100,000 in cash and grant to SEAM shareholders 23,799,000 warrants equal to the number of new ordinary shares issued as part of the satisfaction of the Share Payment element of the Consideration (the "SEAM Warrants"). The SEAM Warrants will be subject to a three year term from the date of exercise of the SEA Option and will be subject to an exercise price of twice the share price per ordinary share at which the Share Payment is issued (1.74p).
Following the exercise of the SEA option, Metal Tiger’s interests are as set out below.
Eight Special Prospecting Licence Applications ("SPLAs") surrounding the historical mining operations at Boh Yai and Song Toh mines in Western Thailand. Between 1978 and the cessation of operations in 2002, a total of 5,237,800 tonnes of ore was produced and milled at the flotation plant located near Song Toh to produce 648,760 tonnes of lead and zinc concentrates. In 2008, a total of 60,000 tonnes of ore was produced and milled from a stockpile. This plant is a standard Pb-Zn flotation circuit and can be operated at between 25 and 50 tonnes per hour depending on the type of feed. Exploration and Mining database specifically relating to Boh Yai and Song Toh mines. This includes local/regional mapping, soil and rock chip sampling and three geophysics programmes. Furthermore, the dataset includes material utilised to produce an NI 43-101 resource and Preliminary Economic Assessment extending to mine planning, geology and micro mine files, economic modelling and conceptual tailings planning. Two Mining Lease Applications overlaying historical Kanchanaburi mining lease applications. One Exclusive Prospecting Licence Application ("EPLA") in respect of a gold-antimony focused project in the Chanthaburi province, in the south-east of Thailand where the Company has published findings from initial work undertaken by the joint venture during 2015 including the identification of gold anomalies requiring further investigation. One Mining Lease Application in the Chanthaburi province situated in what is known locally as the Gold-Antimony Belt. Two SPLAs covering 31km2 and relating to projects in the Nakon Sawan and Lopburi provinces within the Loei-Phetchabun part of what is known locally as the Copper-Gold Belt.During August 2016 a new Thailand joint venture office was opened with a formal Merit Ceremony performed by Buddhist monks. The new office staffed by mainly Thai employees has expanded to service the growing joint venture.
On 20 August 2016 Metal Tiger concluded commercial negotiations and a Joint Venture Agreement (“JVA”) was signed in respect of the Song Toh and Boh Yai mines in Western Thailand. The JVA governs the process and ownership elements of a transaction where the principal objective is to permit and bring back into production the lead-zinc-silver mines at Boh Yai (“BYMC”) and Song Toh (“KEMCO”).
KEMCO and BYMC hold several historical Mining Lease Applications and the physical mining and processing plant assets at the centre of this transaction.
Since its formation, the JVA has been pursuing the various stages of the permitting process and the structure of the transaction is such that near term transactional costs are modest, with the larger payments scheduled for post permitting approvals when the value of the project should have increased materially.
This is an exciting project that will provide hundreds of jobs in Kanchanaburi and be of major benefit to the local Thai economy as well as the Thai people in general. It is the Directors’ belief that this JVA will lead to further investment opportunities for Metal Tiger in the natural resources sector in Thailand.
The Group has agreed a right for its Thai joint venture companies to acquire 80% of the shares of BYMC which holds several Mining Lease Applications. In addition, the transactional rights include the transfer of granted licences from KEMCO into BYMC thereby centralising the mineral property interests into one operating company. All activities in respect of operations are managed on behalf of the parties by various joint venture management committees. Metal Tiger provides finance against an agreed budget. All operational matters are solely in the hands of the local joint venture team.
The transaction is based on defined payments set against a defined delivery schedule and a commitment from Metal Tiger to fund up to US$1,500,000 in respect of permitting costs. Payments are focused on the key stages of project development with most payable only on the achievement of permitting, construction/refurbishment and production milestones over an estimated two year period.
The JVA option has cost a total of US$130,000 on signing the SLA payable as US$50,000 in cash and US$80,000 in Metal Tiger shares (US$130,000 already paid) then a total of US$800,000 was paid on signing the JVA payable as US$400,000 in cash and US$400,000 in Metal Tiger shares.
Reflecting the acquisition of ownership rights, the following milestone payments are to be made to the mine vendors:
a total of US$500,000 payable in cash on the granting of BYMC Mining Lease Applications; a total of US$500,000 payable in cash on the granting of the Song Toh Mining Lease Applications; a total of US$625,000 payable as US$250,000 in cash and US$375,000 in Metal Tiger plc shares on the commencement of construction (plant, housing, water treatment and some mine refurbishment); a total of US$625,000 payable as US$250,000 in cash and US$375,000 in Metal Tiger plc shares on the commencement of commercial mineral production; and a further US$500,000 is due 20 days after the Song Toh mining licence is granted with an additional US$1,000,000 due 20 days after commercial production starts.On 8 December 2016 the Thai National Legislative Assembly approved a draft Minerals Act 2017 which was signed ahead of the Board’s expectations and has removed a key element in the uncertainty over the timetable in the permitting process.
Updates on the post balance sheet developments in Thailand are set out later in this report.
Spain
Logrosán Minerals Limited (“LM” or “Logrosán Minerals”) is the joint venture operating company for the Logrosán Exploration Project (“Logrosán Project”) and Maria Gold & Antimony Project (“Maria Project”). It is held 50/50 by Metal Tiger and joint venture partners Mineral Exploration Network (Finland) Ltd (“MEN”) and has four exploration concessions and one exploration licence application held through the wholly owned Spanish subsidiary Logrosán Minera S.L. as set out in the table below.
| Asset | Status | Licence Expiry Date | LicenceArea(km2) | Comments | ||||
| Antonio Caño Exploration Licence (#10C 10314-00) | Exploration | 1 December 2016; renewal application lodged | 37.22 | Renewable three times to a maximum of nine years | ||||
| Zorita Exploration Licence (# 10C 10332-00) | Exploration | 18 June 2018 | 85.08 | Renewable to maximum nine years | ||||
| San Cristóbal (#10C 10321-00) | Exploration | 16 June 2019 | 43.81 | Renewable to maximum nine years | ||||
| “Maria Project”Mari Hernández Permit (#10313-00) | Exploration | 30 October 2016; renewal application lodged | 40.09 | Renewable to maximum nine years | ||||
| San Cristóbal(#10358-00) | Exploration Licence Application | n/a | 31.74 |
* Applications have been lodged to change the name on the certificates to Logrosán Minerals Ltd. These licences are included in the existing joint venture.
During the 18 months prior to the joint venture commencing, Metal Tiger's joint venture partner, MEN, had carried out more than 40,000 soil samples, hundreds of pan-concentrate samples, covered thousands of linear kilometres with ground magnetic survey and assessed electro-magnetic tomography. The presence of tungsten mineralisation had been confirmed by soil sampling, outcrop sampling, trenching and historical drill holes. Gold mineralisation had been indicated by pan-concentrate sampling which delineated three areas with anomalous gold.
Logrosán Minerals was incorporated in the United Kingdom on 13 March 2015. Metal Tiger announced that it had completed the proposed €500,000 of exploration funding into the Logrosán Project on 15 March 2016, to earn the 50% holding in LM. On 31 May 2016 Metal Tiger announced it had concluded negotiations to include the Maria Gold (Au) and Antimony (Sb) Project ("Maria" or "Maria Project") licence (40.09km2) into the Logrosán Minerals JV. Maria is located approximately 15km north of the Logrosán Project.
Prior to concluding the Maria deal, Metal Tiger’s due diligence Rotary Air Blast (RAB) drilling had indicated the area has high prospectivity for antimony-gold style mineralisation; six RAB drill holes had returned intersections between 1g/t Au and 3.94g/t Au and nine drill holes with antimony intersections >1% Sb (with grades up to 2.6% Sb and the largest Sb intersection 4m @ 1.2% Sb).
Under the Maria deal Metal Tiger was to provide up to €500,000 over the balance of 2016 and first quarter of 2017 in exploration expenditure, to be split over the Maria and Logrosán Project areas.
On 19 July 2016 Metal Tiger announced that the San Cristóbal Exploration Licence (43.81km2) certificate had been received, bringing the total area of prospective ground under exploration licence held by Logrosán Minerals Ltd to 278.5km2, and covers all Group C Minerals including Au, Ag, Pb, Zn, Sn, W, Pt and Cu.
On 25 August 2016 an application was lodged for a new exploration licence, San Cristóbal Sur (31.7km2), immediately to the south and adjoining the current Zorita and San Cristóbal exploration licence areas.
Between 24 April 2015 and 12 November 2016 the joint venture drilled 384 RAB drill holes totalling 6,879m to an average depth of 17.9m and analysed over 2,500 drill samples, spread across the licence holdings. The drilling has the purpose of confirming the presence and indicative scale of sub-surface mineralisation intersections only, it is not for the purposes of Resource definition, but as a minimal environmental impact alternative to deep trenching. The drill holes are arranged on profiles set across the soil geochemistry and ground magnetic anomalies with the azimuth of each drill hole perpendicular to the perceived mineralised trend.
Tungsten: Logrosán Project: Major 2015-2016 Q1 Programme Findings
The exploration for tungsten (W) in the Logrosán Project centred on two distinct target areas which were identified on the basis of previous soil geochemistry and ground magnetic surveys. These targets are separated by a distance of 12km: Target 1 is near the centre of the Zorita Licence (in the west of the Logrosán Project area) and Target 2 is located in the south-west of the Antonio Licence (in the central Logrosán project area).
During 2015 both targets were subject to first-pass RAB drilling to confirm the near surface tungsten mineralisation and grade. The results of this preliminary drilling were very encouraging, with significant strike length tungsten mineralisation and high-grade tungsten intersections outlined.
Tungsten Target 1 contains the larger of the two tungsten-in-soil anomalies (up to 636ppm W), measuring 1.2km long by 200m wide and trending NNE-SSW. Drilling, consisting of a total of 17 holes (268m) drilled, to an average depth of 16m, on two profiles drilled perpendicular to the anomaly strike at a 380m separation. Drill sample assays confirmed high-grade tungsten mineralisation in the north and the centre of the target soil anomaly and the soil anomaly remains open (untested by drilling) for a distance of 700m to the south and for 120m to the north.
Drill assay results, conducted by ALS Laboratories, returned a maximum WO3 grade above the analytical detection limit of 0.63% (5000ppm) and an average grade across all Target 1, drill samples submitted, of WO3 0.09%. The highest intersections in holes MW003 (10m WO3 >0.24%, including 2m >0.63%) on profile 2 and MW010 (with total intersections of 10m >0.2% and 2m WO3 0.37%) on profile 1, are separated by up to 400m of potentially continuous mineralisation. It should be noted that the tungsten concentration of workable ores typically starts from 0.10% WO3.
Tungsten Target 2 is located over a central, distinct, tungsten-in-soil anomaly ranging up to 565ppm W and measuring 700m long by up to 150m wide. This central soil anomaly is orientated in a NE-SW direction, and coincides with a 1.6km long geophysical structure. There are three further weaker anomalies associated with structures running parallel to it, one 250m to the north-west and two to the south-east, at 325m and 700m separation to the central anomaly.
Target 2 has been investigated with a total of 65 holes to an average of 20m depth, 1,300m in total. The central W anomaly has good drill coverage with a total of 26 holes on eight profiles over a total strike length of 570m. Two further profiles have been drilled along strike at 560m NE and 500m SW of the outlying profiles (on the central zone drilling). Both these profiles are located on the same 1.6km geophysical structure, but coincide with continuous strong Cr, Cu, Sn, As and weak W anomalies. Assays from all analysed drill samples on Target 2 average WO3 0.04% and a maximum of WO3 >0.63% (above upper detection limit) located in the central anomaly.
There is a 400m on-structure strike distance between hole LM014 (on profile 3) with 2.70m WO3 >0.32% (including 2m @ > 0.63%) and hole LM08 (on profile 7) with 8m at WO3 0.32% (including 2m @ 0.49%WO3 & 0.1% SnO2).
Gold: Logrosán Project & Maria Project: 2016 Programme Findings
With the tungsten targets delineated for future deeper drilling, the exploration focus switched to targeting gold in 2016. On 5 April 2016 it was announced that alteration mapping peripheral to the central Logrosán granitic intrusion had highlighted an initial two new areas for more detailed investigation. The assay results from infill soil sampling and outcrop sampling from one of the new target areas, El Seranillo North, confirmed the area as prospective for gold.
A second new gold target area, Logrosán South, consisting of a soil gold anomaly (up to 0.89g/t Au) approximately 6km long and up to 950m wide, trending NE-SW from the south of the Antonio Caño licence, through the San Cristóbal licence and into the San Cristóbal Sur application area.
By December 2016, a further discovery of two new significant gold anomalies (Logrosán West and El Seranillo East) in the Logrosán Project brought the number of qualified gold targets to four. RAB Drilling in the Maria Project produced downhole intersections of up to 4.0m @ 1.47 g/t Au and 7.0m @ 1.0% Sb (announced 12 December 2016).
Logrosán West consists of a 2.5km long gold anomaly within a 4km long arsenic anomaly and El Seranillo East consists of a 500m long gold anomaly within a 1km by 500m wide As anomaly. At both anomalies, soil sampling was ongoing at the end of December 2016.
New Gold Camp
The discovery of four previously unknown gold anomalies is exciting and points to the discovery of a potential new gold camp in the centre of Spain. The results bear testament to the application of modern exploration techniques and the investment in systematic soil geochemistry, geophysics and alteration mapping.
The addition of deep-drill ready gold targets to the two tungsten deposits outlined during 2015 adds significantly to the potential of the licence holdings.
Additional exploration potential is provided by: the gold and antimony and (hitherto untested) historical lead-zinc mines in the Maria licence area; and the historical phosphate mine and tin workings in the Logrosán licence group.
Location and Region
The Logrosán Project and Maria Project areas, are located approximately three hours’ drive west of Madrid, in a geologically prospective, under-explored and mining-friendly jurisdiction in west-central Spain within the province of Cáceres in the Extremadura autonomous region. The projects are served by a well-developed and maintained road network, with good power, water and telecommunications infrastructure and enjoys the full support of the regional and local government and administration.
Neighbouring Properties
There are three public listed exploration and pre-production development companies located within the surrounding region. The W Resources Plc La Parrilla tungsten mine is 43km south-west of the LM project areas; the Emerita Resources Corporation Las Morras Gold Project is 6km to the south; and the Berkeley Energia PLC Gambuta uranium deposit is 30km north.
Botswana
Metal Tiger announced on 16 December 2015 its 30% joint venture interest with MOD Resources Ltd (ASX:MOD) in 16 licences within the Kalahari Copper Belt which runs for circa 1,000km through Botswana and Namibia. Throughout 2016 extensive exploratory drilling was undertaken and a JORC compliant resource was defined at the T3 prospect which covers just 1km2.
The JORC Resource was announced on 26 September 2016 and considering that the deposit was only discovered in March of 2016, in a previously under-explored region, it was a real credit to the exploration team and contractors that the project was taken from the grassroots stage to defined JORC compliant resource in only six months and at a cost of US$0.22/lb Cu.
With the release of this resource the project has taken a big step towards our objective of it becoming a low cost, long life Botswanan copper producer.
Highlights of the JORC Resource:
Total (Indicated & Inferred) Mineral Resource Estimate of 28.36Mt @ 1.24% Cu & 15.7g/t Ag for T3 Prospect, containing approximately 350,200t copper and 14.27Moz silver (at 0.5% copper cut-off grade). JORC compliant, maiden resource, resulting from the Phase 1 Resource Drilling Programme. Includes high grade core of 8.48Mt @ 2.16% Cu & 30.6g/t Ag, containing approximately 182,900t copper and 8.34Moz silver (at 1.5% Cu cut-off grade), see T3 Phase 1 Mineral Resource table below. 64% of the total resource tonnes classified as Indicated Resource with the remainder as Inferred category. Resource potential remains open down dip to the north-east of the current resource envelope and along strike to the south-west. Mineral Resource has been defined along a 1.4km long strike length with the copper and silver sulphide mineralisation best described as a sheeted vein deposit dipping at 25 degrees to the north with a shallow north-east plunge. Copper sulphide mineralisation dominated by mainly chalcopyrite with chalcocite and bornite occurring in lesser amounts, is very continuous extending from shallow depth (~35m depth) to the limit of drilling at ~274m depth. Minor copper oxide mineralisation occurs near surface between ~10-25m depth as malachite and chrysocolla. Geometry of the deposit, with wide zones of continuous shallow dipping mineralisation provides the potential for low cost open pit mining. If the deposit is mined the central core of high grade vein hosted mineralisation may provide an opportunity for early payback of capital. The high silver content should provide significant concentrate credits. T3 Phase 1 Mineral Resource table:| JORC Category | Cut-off | Tonnes | Grade | Grade | Contained | Contained | ||||||
| Cu% | Cu% | Ag g/t | Cu (tonnes) | Ag (oz) | ||||||||
| Indicated | 0.5 | 18,071,000 | 1.35 | 16.7 | 244,320 | 9,724,550 | ||||||
| 1.0 | 10,103,000 | 1.84 | 24.2 | 186,198 | 7,848,794 | |||||||
| 1.5 | 6,773,906 | 2.12 | 29.6 | 143,675 | 6,450,935 | |||||||
| Inferred | 0.5 | 10,287,000 | 1.03 | 13.7 | 105,853 | 4,546,534 | ||||||
| 1.0 | 3,162,296 | 1.82 | 26.0 | 57,396 | 2,640,127 | |||||||
| 1.5 | 1,706,001 | 2.30 | 34.5 | 39,221 | 1,892,814 | |||||||
| TOTAL | 0.5 | 28,358,000 | 1.24 | 15.7 | 350,221 | 14,271,083 | ||||||
| (Indicated | 1.0 | 13,265,000 | 1.84 | 24.6 | 243,678 | 10,488,664 | ||||||
| & Inferred) | 1.5 | 8,479,907 | 2.16 | 30.6 | 182,912 | 8,343,592 |
Geology and Geological Interpretation
The copper and silver mineralisation which is the basis for the T3 Phase 1 Mineral Resource is interpreted to be a Proterozoic or early Paleozoic age, vein related sediment hosted deposit which is different to other known deposits and mines in the central Kalahari Copper Belt in Botswana.
The Mineral Resource has been defined along a 1.4km long strike length at T3 and the copper and silver sulphide mineralisation occurs in veins and disseminations within mudstone, siltstone, sandstone and marls as host rocks.
The resource occurs in sediments and veins, considered part of the D’Kar Formation. The footwall to the resource is generally defined by lower grade disseminated Pb and Zn mineralisation within the host rocks, still considered part of the D’Kar Formation.
Mineralisation is very continuous at T3 and is dominated by mainly chalcopyrite with chalcocite and bornite copper sulphides occurring in lesser amounts. Mineralisation from the Phase 1 Mineral Resource drilling extends from shallow depth (~35m depth) to the limit of drilling at ~274m depth. Minor malachite and chrysocolla oxide mineralisation occurs near surface between approximately 10-25m depth.
Mineralisation can be best described as a sheeted vein deposit dipping at 25 degrees to the north. Interpretation of the drilling data has defined a shallow north-east plunge. The thickness throughout the deposit may represent multiple stacked, mineralised horizons, thrusted one upon the other.
A Scoping Study was then released on 6 December 2016, which showed that the preliminary base case NPV amounted to approximately US$180m and the preliminary upside case model NPV amounts to US$297million at US$2.53 lb/cu and US$3.00 lb/cu. This data is exceptionally positive particularly given the short period since the original discovery in March 2016, and given the low cost of US$2.5million expended by the Joint Venture partners to get to this point. In just over 11 months from first drilling the team has delivered, at very low cost, a maiden JORC Resource and Scoping Study for an open pit mine at T3. Also of significance, the T3 Deposit is only the first of a series of high profile targets within the highly prospective region covered by the Joint Venture Licences, with the T3 Deposit only 1km2 of the approximately 1,000km2 constituting the prospective T3 Dome Structure.
Highlights of T3 Scoping Study:
T3 Scoping Study is the first detailed study to be completed for the T3 Copper-Silver Deposit. Total cost from discovery to completion of the scoping study is only circa US$2.5million over eleven months.
The Scoping Study is equivalent to a Preliminary Economic Assessment, being a low level technical and economic assessment that is not sufficient to support the estimation of ore reserves. Further work will be required before ore reserves can be outlined or to provide any assurance of an economic development case.
Optimised design for a 220m deep open pit mining operation with on-site processing plant to treat 2Mtpa of ore with low cost expansion optionality if required. Pre-stripping of the first stage of the planned open pit is modelled to commence in 2019 with ore processing modelled to commence later in 2019. Preliminary Base Case Model indicates robust financial metrics assuming consensus pricing (US$2.53/lb Cu). Estimated pre-tax NPV at a 10% discount rate (“NPV10%”) is approximately US$180million and internal rate of return of 31%. Average annual pre-tax cash flow approximately US$44million per annum. Estimated life-of-mine production average 21.8ktpa Cu and 665kozpa Ag. Mine life of 10 years with 9.25 years of production. Estimated total project cost (+/-35%) circa US$135million (Metal Tiger share US$40.5million) including US$18million pre-strip and US$18.3million contingency. Life-of-mine C1 costs of US$1.29/lb Cu including silver credits. Expected payback of 2.6 years. Preliminary Upside Case Model indicates stronger financial metrics assuming elevated Cu price (US$3.00/lb): Estimated pre-tax NPV10% approximately US$297million and IRR of 42%. Average pre-tax annual cash flow approximately US$65million per annum. C1 costs are estimated at US$1.31/lb Cu including silver credits. Expected payback period approximately 2 years. Each US10 cent/lb rise in Cu price estimated to add approximately US$25million to NPV. Mineralised sequence which hosts T3 resource largely untested along strike and down dip. T3 is ideally located within 12km of the Ghanzi Highway in an area of freehold farms. MOD has been advised by Botswana Power Corporation that grid power is planned to be extended along the Ghanzi Highway in mid 2019.Next Steps:
Progress to a Pre-feasibility Study (“PFS”) in 2017. Build on the findings of the Scoping Study and initiate the following additional studies as part of the PFS. Detailed Environmental Studies. Hydrological testing and modelling of potential aquifer in area surrounding T3. Geotechnical testing in area of planned pit. Metallurgical testwork to firm up process plant design criteria. Investigate availability of second hand plant and equipment to potentially reduce plant capital. Drill for potential resource extensions at the western end of the current planned pit. Pre-feasibility Study work is estimated to cost a total of US$1.43million, with an additional US$2.71million to take to a definitive or bankable Feasibility Study level.In parallel with the PFS, in early 2017 exploration work will test a large area (~250km2) within the T3 Dome directly north of T3 for similar type sediment hosted deposits. The T3 Dome is interpreted to extend over 50km in length and is covered by MOD and Metal Tiger joint venture prospecting licences.
Test drilling has already commenced for shallow mineralisation along strike from T3 and a 3D Inverse Polarisation survey will start in early 2017 to help define targets for deeper drilling.
OVERVIEW OF THE SCOPING STUDY
The T3 Scoping Study is the first detailed study to be completed for the T3 Copper-Silver Deposit. It has been undertaken to determine the potential viability of an open pit mine and sulphide flotation processing plant constructed on-site at T3 and to reach a decision to proceed to pre-feasibility studies commencing in early 2017. As the Scoping Study, equivalent to a Preliminary Economic Assessment, is the precursor to the more detailed Prefeasibility Study.
Sensitivity Analysis
The sensitivity of the NPV10% to copper price, silver price and operating costs is set out below:
| Sensitivityto change in | NPV (US$m) | |||||||
| -10% | Current | +10% | +20% | |||||
| Copper Price | 116 | 180 | 244 | 308 | ||||
| Silver Price | 174 | 180 | 186 | 192 | ||||
| Operating Cost | 200 | 180 | 160 | 140 | ||||
Tanzania
On 21 November 2014 the Company announced a 50/50 joint venture with Kibo Mining PLC (LON:KIBO) in respect of Kibo’s Pinewood Uranium portfolio, a deal ratified after due diligence and confirmed to market on 14 January 2015.
On 19 January 2015, the Company announced a second 50/50 joint venture with Kibo Mining in respect of Kibo’s Morogoro Gold project. On 24 February 2017, Metal Tiger and Kibo announced that they had ceased joint venture activities at the Pinewood and Morogoro Joint Ventures with immediate effect and that they had relinquished the licences back to the local authorities and accordingly the Directors have decided to make a full provision against the cost of the investment as at 31 December 2016.
Russia
Metal Tiger announced on 16 November 2015 an option to work with Eurasia Mining PLC (LON:EUA) in respect of a gold tailings production opportunity in Russia.
The option extended for three months and provided sufficient time for the Company to conduct relevant due diligence and also identify from its connection base the best mechanism through which this interest could be managed.
The opportunity is the first such transaction to emerge from the new project collaboration agreement signed with Eurasia Mining and announced to market on 29 December 2014.
On 8 May 2017, Metal Tiger opted not to pursue its interest in the Semenovsky Tailings Project (“STP”), which was financed 50/50 with Eurasia Mining PLC (AIM:EUA). This leaves EUA in a better position to fund its interests in STP with new project finance. The Company will no longer have an interest in STP and will concentrate its resources on its core project interests. The Directors have decided to make a full provision against the cost of the option.
Investing Policy Implementation 2016
During late 2016, Metal Tiger strategically invested circa £1.88million in resource company strategic investments and on-market purchases of resource company shares and warrants of companies listed on AIM. All Direct Projects interests have received funding in 2016 and Metal Tiger has been active in five countries.
Administrative expenses
Administrative expenses in 2016 amounted to £3,238,114. This compares with an expense of £886,551 in 2015.
The increase of £2,351,563 reflects the inclusion of the administration costs of the Thai subsidiaries of £540,794 acquired in 2016. There was an increase in Directors’ and employees’ emoluments in the year as set out in note 6 to the financial statements including a full provision of £475,740 for share based payments (2015: £83,701) and to a general increase in overheads particularly professional and consulting fees of £466,937 (2015: £143,094) relating to the significantly increased level of business within the Direct Projects division.
ACCOUNTING TREATMENT
Given the nature of our investments, the tendency is for investors to look at the Company’s net assets and compare this to market capitalisation. For Metal Tiger, this simplistic valuation metric does not work as the Company is focused on investment in major resource projects where the value of an interest can increase very rapidly with successful ground exploration or corporate developments.
Where a project or investment has been made to acquire commercially valuable interests, or where the Group has acquired valuable project data and strategic positioning in exploration licences, mining licences and licence applications, then the costs of investment will be capitalised on the Group’s Statement of Financial Position at the period end. Metal Tiger plc acquired a controlling interest in SouthEast Asia Exploration and Mining Co. Ltd and its subsidiaries, Tiger Minerals Co. Ltd. and Tiger Resources Co. Ltd. during the year ended 31 December 2016 and consolidated financial statements for the Metal Tiger Group have accordingly been prepared for the year ended 31 December 2016.
At 31 December 2015, the Company had two subsidiaries, Metal Horse Limited and Thai Star Resources Co., Ltd. Since incorporation, Metal Horse Limited has not commenced operations and has no material assets or liabilities. At that date the activities, assets and liabilities of Thai Star Resources Co., Ltd were not considered material and consequently consolidated financial statements for the Group were not prepared at 31 December 2015 on the basis that in accordance with section 405 of the Companies Act 2006 the inclusion of these companies was not material for the purpose of giving a true and fair view. For this reason, the comparative figures for the year ended 31 December 2015 are those of the Company.
Shareholders should note therefore that at present the published net asset position of the Group largely comprises the working capital representing predominantly cash and investments.
BUSINESS MODEL AT THE YEAR END
Metal Tiger closed 2016 with Direct Equity investments in a number of UK AIM resource companies, cash at bank, no debt and a range of Direct Project interests.
The share price of Metal Tiger started 2016 at 0.875p per share and ended at 1.4265p per share. Metal Tiger’s share price performance was strong and ahead of the mid-tier mining market. To put this in context the FTSE 350 Mining Index (NMX1770) started 2016 at circa 7,345 but closed the year at 14,799 representing a more than 200 per cent increase amongst the mid-tier miners.
At the year’s close, Metal Tiger has valuable core Direct Project interests in Thailand, Spain and Botswana.
OPPORTUNITY PIPELINE
Metal Tiger continued to receive and review new opportunities in the resource sector throughout 2016. However, consequent on a review by the Board following the changes to personnel made in December 2016, the main focus will continue to be investment into the Direct Projects of Botswana and Thailand, whilst seeking corporate targets which will create material value to Metal Tiger’s shareholders.
POST YEAR END DEVELOPMENTS
Metal Projects
The Group has seen an acceleration in Metal Projects investing activities and accomplishments in 2017. In summary, these include:
Botswanan joint ventureOn 17 February 2017, Metal Tiger announced the discovery of a new zone of mineralisation located directly beneath the T3 Resource. This new zone consists of multiple intervals of copper sulphide mineralisation over 75m. The results could be the most significant since the T3 discovery hole last March: 52m @ 2% copper and 32g/t silver. This previously unknown new zone of mineralisation was discovered during the T3 Resource infill drilling being conducted as part of the current Pre-feasibility Study works. The decision to extend the second and third drill holes to a depth well below the current T3 Resource base seems to have really paid off and we think that this new discovery has the potential to significantly improve the dynamics and economics of the T3 Deposit.
New Zone of Mineralisation outlined by Infill Drilling
Three diamond drill holes (MO-G-63D, MO-G-64D and MO-G-65D) which are part of the T3 Resource infill drilling were completed. Two of these holes, MO-G-64D and MO-G-65D, were terminated at a depth significantly below the current T3 Resource and have identified a new mineralised zone.
On 6 March 2017, Metal Tiger announced the confirmation of a substantial new zone of copper mineralisation located directly beneath the T3 Resource. This new zone consists of over 72m of 1.5% copper, including over 18m at 2.7% Cu and 52g/t silver. The new mineralisation extends the Project potential to over 100m below the current T3 Resource sequence with mineralisation in MO-G-65D potentially still open at depth. Furthermore, hole MO-G-66D intersected a separate zone of disseminated Cu, approximately 250m below the T3 Resource.
Drill rigs were on a break during April and May 2017 whilst planning work was undertaken. The Department of Environmental Affairs in Botswana agreed an Environmental Management Plan to permit further resource drilling at T3 after a public review period of the EMP in July 2017.
On 13 June 2017, Metal Tiger announced that its latest assay results confirmed significant copper intersections from geotechnical drill holes around the perimeter of the planned T3 open pit with the stand-out results including 46.6m @ 2.1%Cu & 32g/t Ag from 96m downhole. During July 2017, it is expected that an upgrade to the Zone 1 and Zone 2 Mineral Resource Estimate will be completed which will result in an improved economic outlook for the pre-feasibility study which is being prepared by the Joint Venture.
Thai InterestsOn 10 February 2017, Metal Tiger announced that it was considering an initial public offering of its Thai interests on AIM in a new holding company called KEMCO Mining PLC. To this end the Company completed a pre-IPO private placing of £514,500 with high net worth and sophisticated investors on 7 March 2017.
On 13 June 2017, Metal Tiger announced that it had received the final draft Competent Persons Report for Song Toh and Boh Yai which provides an update to the findings of the Preliminary Economic Assessment undertaken for the project in 2013.
Spanish joint ventureThe exploration work undertaken to date in the Logrosán and Maria project areas, has delineated at least five specific targets which warrant investigation by Reverse Circulation (“RC”) or diamond core drilling.
RAB drilling and surface sampling has shown the Zorita and Antonio tungsten targets to be both laterally extensive (up to 1.2km long) and high grade (10m WO3 >0.24% & 8m at WO3 0.32% respectively). Deep drilling is now required to ascertain whether vein widths and grades at depth are sufficient to be potentially viable, accepting that they could constitute satellite feed deposits for a regional development.
Targeting gold, the soil sampling, trenching, geophysics and RAB drilling has delineated deep drill ready targets at Maria, Logrosán South and the now merged Logrosán East deposits.
The joint venture partners are currently considering options for a first-pass reverse circulation and diamond core drilling programme, which will seek to test ranked targets at depth with the objective of determining their potential for further exploration investment and resource development.
New opportunity pipelineMetal Tiger continues to find new opportunities to grow and is considering ways to capture value from pipeline opportunities within Metal Tiger plc and third parties.
Direct Equities
A programme of selective divestment has been underway since the change of Board in December 2016. Divestments have included Connemara Mining Company plc and Conroy Gold and Natural Resources plc, where the opportunity to maximise value for the Company’s shareholders was apparent. Disposals in Greatland Gold plc followed but funds from this sale were arbitraged into exercising warrants held at a lower than market price and for the long term.
| KEY PERFORMANCE INDICATORS | ||||||
| The key performance indicators are set out below: | ||||||
| COMPANY STATISTICS | 31 December2016 | 31 December2015 | Change% | |||
| Net asset value | £7,457,894 | £1,525,246 | +389% | |||
| Net asset value – fully diluted per share 1 | 0.96p | 0.41p | +135% | |||
| Closing share price | 1.450p | 0.875p | +66% | |||
| Share price premium/(discount) to net asset value – fully diluted | 51% | 115% | -55% | |||
| Market capitalisation | £11,233,000 | £3,278,000 | +243% | |||
| 1 | Fully diluted net asset value is calculated on the number of shares in issue at the year end, the number of warrants in the money at the year end (2016 and 2015: Nil) and the number of options in the money at the year end (2016: 4,170,000; 2015: Nil). |
PRINCIPAL RISKS AND UNCERTAINTIES
The main business risk is considered to be investment risk. The Directors intend to mitigate this risk by carrying out a comprehensive and thorough project review of any potential investment in which all material aspects will be subject to rigorous due diligence. The Directors believe that the Group has sufficient cash resources to pursue its investment strategy.
GOING CONCERN
As disclosed in note 2, after making enquiries, the Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
By order of the Board
Michael McNeilly
Chief Executive Officer
29 June 2017
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 December 2016
The Directors present their report together with the audited financial statements for the year ended 31 December 2016.
A review of the business and principal risks and uncertainties has been included in the Strategic Report commencing on page 5.
DIVIDENDS
No interim dividend was paid (2015: £none) and the Directors do not propose a final dividend (2015: £none) for the 12 months ended 31 December 2016.
DIRECTORS
The Directors of the Company who held office during the year and to the date of this report were as follows:
| Terrence Ronald Grammer | |||
| Paul Johnson | resigned 17 October 2016, | ||
| re-appointed 4 December 2016, resigned 16 January 2017 | |||
| David Michael McNeilly | appointed 4 December 2016 | ||
| Keith John Springall | appointed 4 December 2016 | ||
| Charles Patrick Stewart Hall | appointed 4 December 2016 | ||
| Alastair James Middleton | appointed 5 January 2017 | ||
| Geoffrey Stephen McIntyre | appointed 5 January 2017 | ||
| Mark Roderick Potter | appointed 16 January 2017 | ||
| Jordan Ashton Luckett | appointed 1 September 2016, resigned 4 December 2016 | ||
| Cameron John Parry | resigned 29 July 2016 | ||
| Michael Alexander Borrelli | resigned 4 December 2016 |
Further details of the Directors’ remuneration are given in note 6, details of Directors’ share options are given in note 24 and the Directors' interests in transactions of the Group and the Company are given in note 26.
FUTURE DEVELOPMENTS
The future developments of the business are set out in the Strategic Report under the headings “Opportunity Pipeline” and “Post Year End Developments” and are incorporated into this report by reference.
FINANCIAL INSTRUMENTS
Details of the Group’s financial instruments are given in note 25.
SIGNIFICANT SHAREHOLDERS
As at 29 June 2017 the following were, as far as the Directors are aware, interested in three per cent or more of the issued share capital of the Company:
| Name | Number ofOrdinary Shares | % of Issued OrdinaryShare Capital | ||
| Exploration Capital Partners | 100,000,000 | 10.38% | ||
| Terry Grammer | 38,150,667 | 3.96% | ||
| Michael Joseph | 29,484,950 | 3.06% |
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Group's financial risk management objectives and policies are set out in note 24 to these financial statements.
POST YEAR END EVENTS
Since 31 December 2016, the following post year end events have taken place:
On 11 February 2017, the Company announced that it had commenced an IPO process with regard to seeking admission to AIM of its interests in Thailand. On 21 April 2017, the Company announced the placing of 161,666,666 new ordinary shares in the Company at a placing price of 3p per ordinary share, raising gross proceeds of £4,850,000 together with the issue of 161,666,666 warrants to subscribe for 161,666,666 new ordinary shares in the Company at an exercise price of 6p per warrant, within a five year exercise period. In addition, 4,850,000 Finder Warrants were issued in connection with the placing. Each Finder Warrant permits the purchase of one warrant for five years at a price of £0.03 per unit. Upon exercise of a Finder Warrant, the holder will be entitled, on a 1 for 1 basis, to a 6p warrant with a five year validity. The net proceeds of this Offering will be used to fund Metal Tiger’s portion of its commitment to the 2017 budget for its Joint Venture project with partners MOD Resources Limited (ASX:MOD) in the Kalahari Copper Belt in Botswana (30% Metal Tiger / 70% MOD Resources) as well as for working capital and general corporate purposes. A further 690,886 ordinary shares have been issued since the year end in settlement of various fees payable by the Company. Warrant conversions exercised since the year end and up to 29 June 2017, have been as follows:| Pricep | WarrantsexercisedNumber | Amountraised£ | New sharesissuedNumber | |||
| 1.60 | 8,875,000 | 142,000 | 8,875,000 | |||
| 2.00 | 16,466,663 | 329,333 | 16,466,663 | |||
| 23,341,663 | 471,333 | 25,341,663 |
In addition, 1,170,000 options were exercised in the period raising a further £11,700.
On 30 May 2017, the Company announced the extension of the expiry dates of 30,000,000 1.6p warrants granted to Terry Grammer, a non-Executive Director, which were due to expire on 22 June 2017 to 22 June 2018.CORPORATE GOVERNANCE
The Group is not required to comply with the principles of corporate governance. This report sets out how the Group incorporates good corporate governance practice where appropriate to its business.
BOARD OF DIRECTORS
The Company supports the concept of an effective Board leading and controlling the Group. The Board is responsible for approving Group policy and strategy. It meets regularly and has a schedule of matters specifically reserved to it for decision. Management supply the Board with appropriate and timely information and the Directors are free to seek any further information they consider necessary. All Directors have access to advice from the Company Secretary and independent professionals at the Company's expense. Training is available for new Directors and other Directors as necessary. Given the size of the Board, there is no separate Nomination Committee. All Director appointments are approved by the Board as a whole. Mark Potter is the senior independent Director.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Group failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Company has well established procedures which are considered adequate given the size of the business.
The Audit Committee, which comprises two Non-Executive Directors, Charles Hall and Mark Potter, is responsible for ensuring that the financial performance of the Group is properly monitored and reported upon and that any such reports are understood by the Board. The Committee meets at least twice each year.
REMUNERATION
The remuneration of the Executive Directors is fixed by the Remuneration Committee which comprises two Non-Executive Directors, Charles Hall and Mark Potter. The Remuneration Committee is responsible for reviewing and determining the Company policy on executive remuneration and the allocation of long term incentives to executives and employees. The remuneration of Non-Executive Directors is determined by the Board as a whole. In setting remuneration levels, the Company seeks to provide appropriate reward for the skill and time commitment required so as to retain the right calibre of director at a cost to the Company which reflects current market rates.
Details of Directors’ fees and of payments made for professional services rendered are set out in note 6 to the financial statements.
DIRECTORS INDEMNITY INSURANCE
As permitted by Section 233 of the Companies Act 2006, the Company has purchased insurance cover on behalf of the Directors indemnifying them against certain liabilities which may be incurred by them in relation to the Group.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Strategic Report, Report of the Directors and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare Group and Company financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on AIM. In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether they have been prepared in accordance with IFRS as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
In the case of each person who was a Director at the time this report was approved:
so far as that Director is aware there is no relevant audit information of which the Company’s auditor is unaware; and that Director has taken all steps that the Director ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.The Directors are responsible for ensuring that the annual report and the financial statements are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
AUDITORS
The Directors have appointed Crowe Clark Whitehill LLP as auditors of the Company to fill a casual vacancy. A resolution to appoint Crowe Clarke Whitehall as auditors of the Company for 2017 will be proposed at the forthcoming annual general meeting.
By order of the Board
Keith Springall
Secretary
29 June 2017
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF METAL TIGER PLC
FOR THE YEAR ENDED 31 December 2016
We have audited the financial statements of Metal Tiger plc for the year ended 31 December 2016 which comprise the Group Statement of Comprehensive Income, the Group and Parent Company Statements of Financial Position, the Group and Company Statements of Cash Flows, the Group and Parent Company Statement of Changes in Equity and the related notes.
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2016 and of the Group’s loss for the year then ended; the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2006; and the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion based on the work undertaken in the course of our audit
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the Directors’ Report and Strategic report have been prepared in accordance with applicable legal requirements.MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of Directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.Stephen Bullock
Senior statutory auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
St. Bride’s House,
10 Salisbury Square
London EC4Y 8EH
29 June 2017
Crowe Clark Whitehill is a limited liability partnership registered in England and Wales (with registered number OC307043).
The accompanying accounting policies and notes are an integral part of these financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 December 2016
|
| Note | 2016Group£ | 2015Company£* | |||
| Commissions received | - | 31,682 | ||||
| Gain on disposal of investments | 18 | 296,280 | 1,149,465 | |||
| Movement in fair value of Direct Equities Division investments | 18 | 2,346,830 | (729,058) | |||
| Share of post-tax losses of equity accounted associates | 16 | (21,077) | (8,771) | |||
| Share of post-tax losses of equity accounted joint ventures | 17 | (233,724) | (72,837) | |||
| Provision against cost of joint venture investments | 17 | (156,981) | (83,089) | |||
| Investment income | 4 | 321 | 75 | |||
| Net gain on investments | 2,231,649 | 287,467 | ||||
| Administrative expenses | (3,238,114) | (886,551) | ||||
| Bargain purchase on acquisition of subsidiary | 14 | 155,628 | - | |||
| OPERATING LOSS | 3,5 | (850,837) | (599,084) | |||
| Finance income | 7 | 130,591 | - | |||
| Finance costs | 8 | (54) | - | |||
| LOSS FOR THE YEAR BEFORE TAXATION | (720,300) | (599,084) | ||||
| Tax on loss on ordinary activities | 9 | - | - | |||
| LOSS ON ORDINARY ACTIVITIES AFTER TAXATION | (720,300) | (599,084) | ||||
| OTHER COMPREHENSIVE INCOME | ||||||
| ITEMS WHICH MAY BE SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS: | ||||||
| Exchange differences on translation of foreign operations | (207,376) | - | ||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | (927,676) | (599,084) | ||||
| LOSS ON ORDINARY ACTIVITIES AFTER TAXATIONIS ATTRIBUTABLE TO: | ||||||
| Owners of the Company | (651,447) | (599,084) | ||||
| Non-controlling interests | (68,853) | - | ||||
| LOSS ON ORDINARY ACTIVITIES AFTER TAXATION | (720,300) | (599,084) | ||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIODIS ATTRIBUTABLE TO: | ||||||
| Owners of the Company | (719,039) | (599,084) | ||||
| Non-controlling interests | (208,637) | - | ||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | (927,676) | (599,084) | ||||
| EARNINGS PER SHARE | ||||||
| Basic loss per share | 11 | (0.12p) | (0.21p) | |||
| Fully diluted loss per share | 11 | (0.12p) | (0.21p) | |||
| All amounts relate to continuing activities. |
*See note 2.
The accompanying accounting policies and notes are an integral part of these financial statements
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION
AT 31 December 2016
| 2016Group£ | 2016Company£ | 2015Company*£ | ||||||
| NONCURRENT ASSETS | ||||||||
| Intangible assets | 12 | 26,693 | - | - | ||||
| Property, plant and equipment | 13 | 46,271 | - | - | ||||
| Investment in subsidiaries | 15 | - | 338,788 | - | ||||
| Investment in associates | 16 | 743,418 | 743,418 | 58,374 | ||||
| Investment in joint ventures | 17 | 1,097,602 | 1,097,602 | 408,539 | ||||
| 1,913,984 | 2,179,808 | 466,913 | ||||||
| CURRENT ASSETS | ||||||||
| Direct Equities Division investments | 18 | 4,067,371 | 4,067,371 | 692,949 | ||||
| Trade and other receivables | 19 | 705,508 | 509,887 | 104,136 | ||||
| Amounts due from related parties | 26 | - | 1,002,322 | - | ||||
| Cash and cash equivalents | 20 | 1,389,784 | 1,382,115 | 353,881 | ||||
| 6,162,663 | 6,961,695 | 1,150,966 | ||||||
| CURRENT LIABILITIES | ||||||||
| Trade and other payables | 21 | 439,012 | 329,557 | 92,633 | ||||
| Amounts due to related parties | 26 | - | 59 | - | ||||
| Loans and borrowings | 22 | 48,375 | - | - | ||||
| 487,387 | 329,616 | 92,633 | ||||||
| NET CURRENT ASSETS | 5,675,276 | 6,632,079 | 1,058,333 | |||||
| NON-CURRENT LIABILITIES | ||||||||
| Contingent consideration | 14 | 131,366 | 131,366 | - | ||||
| 131,366 | 131,366 | - | ||||||
| NET ASSETS | 7,457,894 | 8,680,521 | 1,525,246 | |||||
| EQUITY | ||||||||
| Share capital | 23 | 77,466 | 77,466 | 650,330 | ||||
| Share premium account (2015: restated see note 24) | 23 | 1,274,650 | 1,274,650 | 4,283,196 | ||||
| Share based payment reserve | 532,509 | 532,509 | 155,260 | |||||
| Warrant reserve (2015: restated see note 24) | 1,087,516 | 1,087,516 | 414,997 | |||||
| Translation reserve | (67,592) | - | - | |||||
| Retained profits/(losses)** | 4,527,154 | 5,708,380 | (3,978,537) | |||||
| TOTAL SHAREHOLDERS’ FUNDS | 7,341,703 | 8,680,521 | 1,525,246 | |||||
| Equity non-controlling interests | 26,191 | - | - | |||||
| TOTAL EQUITY | 7,457,894 | 8,680,521 | 1,525,246 |
* See note 2.
** Retained losses include the Company’s loss for the year after taxation of £456,050 (2015: loss £599,084).
These Financial Statements were approved by the Board of Directors on 29 June 2017 and were signed on its behalf by:
Keith Springall, Director
Company number: 04196004
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 December 2016
| 2016Group | 2016Company | 2015Company* | ||||||
| £ | £ | £ | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Loss before taxation | (720,300) | (456,050) | (599,084) | |||||
| Adjustments for: | ||||||||
| Profit on disposal of Direct Equities investments | (296,280) | (296,280) | (1,149,465) | |||||
| Movement in fair value of investments | (2,346,830) | (2,346,830) | 729,058 | |||||
| Share of post-tax losses of equity accounted associates | 21,077 | 21,077 | 8,771 | |||||
| Share of post-tax losses of equity accounted joint ventures | 233,724 | 233,724 | 72,837 | |||||
| Movement in provision against joint venture investments | 156,981 | 156,981 | 83,089 | |||||
| Share based payment charge for year | 475,740 | 457,428 | 83,701 | |||||
| Equity settled trading liabilities | 331,544 | 331,544 | - | |||||
| Depreciation and amortisation | 6,528 | - | - | |||||
| Bargain purchase on acquisition | (155,628) | - | - | |||||
| Net acquired non-controlling interests on change of control | 111,476 | - | - | |||||
| Investment income | (321) | (321) | (75) | |||||
| Finance income | (130,591) | (130,384) | - | |||||
| Finance costs | 54 | 40 | - | |||||
| Operating cash flow before working capital changes | (2,312,826) | (2,029,071) | (771,168) | |||||
| Increase in trade and other receivables | (188,602) | (60,752) | (80,784) | |||||
| Increase/(decrease) in trade and other payables | 298,685 | 236,925 | (5,985) | |||||
| Increase in amounts due from subsidiaries | - | (493,237) | - | |||||
| Unrealised foreign exchange gains and losses | (31,897) | 93,491 | - | |||||
| Net cash outflow from operating activities | (2,234,640) | (2,252,644) | (857,937) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from investment disposals | 1,153,399 | 1,153,399 | 1,812,359 | |||||
| Purchase of intangible asset | (25,668) | - | - | |||||
| Purchase of fixed assets | (47,395) | - | - | |||||
| Purchase of investment in subsidiary | (164,207) | (220,704) | - | |||||
| Purchase of investment in, and loans to, associates | (669,228) | (669,228) | (67,136) | |||||
| Purchase of investment in, and loans to, joint ventures | (948,452) | (948,452) | (529,207) | |||||
| Purchase of investments | (1,734,711) | (1,734,711) | (1,199,401) | |||||
| Finance income | 528 | 321 | 75 | |||||
| Cash acquired with subsidiary undertakings | 5,154 | - | - | |||||
| Net cash (outflow)/ inflow from investing activities | (2,430,580) | (2,419,375) | 16,690 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issue of shares | 5,848,456 | 5,848,456 | 1,051,700 | |||||
| Share issue costs | (148,163) | (148,163) | (42,000) | |||||
| Interest paid | (54) | (40) | - | |||||
| Net cash inflow from financing activities | 5,700,239 | 5,700,253 | 1,009,700 | |||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,035,019 | 1,028,234 | 168,453 | |||||
| Cash and cash equivalents brought forward | 353,881 | 353,881 | 185,428 | |||||
| Effect of exchange rate changes | 884 | - | - | |||||
| CASH AND CASH EQUIVALENTS CARRIED FORWARD | 20 | 1,389,784 | 1,382,115 | 353,881 |
* See note 2.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2016
| Sharecapital | Sharepremium | Share basedpaymentreserve | Warrantreserve | Translationreserve | Retainedprofits/(losses) | Total equityshareholders’funds | Non-controllinginterests | Totalequity | ||||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | £ | ||||||||||
| BALANCE AT 1 JANUARY 2015 | ||||||||||||||||||
| As previously stated | 637,905 | 3,700,918 | 71,559 | - | - | (3,379,453) | 1,030,929 | - | 1,030,929 | |||||||||
| Restatement (see note 24) | - | (145,711) | - | 145,711 | - | - | - | - | - | |||||||||
| AS RESTATED | 637,905 | 3,555,207 | 71,559 | 145,711 | - | (3,379,453) | 1,030,929 | - | 1,030,929 | |||||||||
| Loss for the year and total comprehensive income for the year | - | - | - | - | - | (599,084) | (599,084) | - | (599,084) | |||||||||
| Cost of share based payments | - | - | 83,701 | - | - | - | 83,701 | - | 83,701 | |||||||||
| Share issues | 12,425 | 769,989 | - | 269,286 | - | - | 1,051,700 | - | 1,051,700 | |||||||||
| Share issue expenses | - | (42,000) | - | - | - | - | (42,000) | - | (42,000) | |||||||||
| BALANCE AT 31 DECEMBER 2015 | 650,330 | 4,283,196 | 155,260 | 414,997 | - | (3,978,537) | 1,525,246 | - | 1,525,246 | |||||||||
| Adjustment to incorporate previously unconsolidated subsidiaries (see note 2) | - | - | - | - | - | (13,513) | (13,513) | - | (13,513) | |||||||||
| 650,330 | 4,283,196 | 155,260 | 414,997 | - | (3,992,050) | 1,511,733 | - | 1,511,733 | ||||||||||
| Loss for the year | - | - | - | - | - | (651,447) | (651,447) | (68,853) | (720,300) | |||||||||
| Other comprehensive income | - | - | - | - | (67,592) | - | (67,592) | (139,784) | (207,376) | |||||||||
| TOTAL COMPREHENSIVE INCOME | - | - | - | - | (67,592) | (651,447) | (719,039) | (208,637) | (927,676) | |||||||||
| Acquisition of subsidiary (see note 14) | - | - | - | 91,197 | - | - | 91,197 | (848,964) | (757,767) | |||||||||
| Change in non-controlling interests without change in control (see note 14) | - | - | - | - | - | (972,316) | (972,316) | 1,083,792 | 111,476 | |||||||||
| Cost of share based payments | - | - | 475,740 | - | - | - | 475,740 | - | 475,740 | |||||||||
| Exercise of options and warrants | - | 373,019 | (98,491) | (373,019) | - | 98,491 | - | - | - | |||||||||
| Share issues | 40,003 | 6,198,207 | - | 954,341 | - | - | 7,192,551 | - | 7,192,551 | |||||||||
| Share issue expenses | - | (148,163) | - | - | - | - | (148,163) | - | (148,163) | |||||||||
| Capital reduction (see note 23) | (612,867) | (9,431,609) | - | - | - | 10,044,476 | - | - | - | |||||||||
| TOTAL CHANGES DIRECTLY TO EQUITY | (572,864) | (3,008,546) | 377,249 | 672,519 | - | 9,170,651 | 6,639,009 | 234,828 | 6,873,837 | |||||||||
| BALANCE AT 31 DECEMBER 2016 | 77,466 | 1,274,650 | 532,509 | 1,087,516 | (67,592) | 4,527,154 | 7,431,703 | 26,191 | 7,457,894 |
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2016
| Sharecapital | Share premiumaccount | Share basedpaymentreserve | Warrantreserve | Retainedprofits/(losses) | Totalequity | |||||||
| £ | £ | £ | £ | £ | £ | |||||||
| BALANCE AT 1 JANUARY 2015 | ||||||||||||
| As previously stated | 637,905 | 3,700,918 | 71,559 | - | (3,379,453) | 1,030,929 | ||||||
| Restatement (see note 24) | - | (145,711) | - | 145,711 | - | - | ||||||
| AS RESTATED | 637,905 | 3,555,207 | 71,559 | 145,711 | (3,379,453) | 1,030,929 | ||||||
| Loss for the year and total comprehensive incomefor the year | - | - | - | - | (599,084) | (599,084) | ||||||
| Cost of share based payments | - | - | 83,701 | - | - | 83,701 | ||||||
| Share issues | 12,425 | 769,989 | - | 269,286 | - | 1,051,700 | ||||||
| Share issue expenses | - | (42,000) | - | - | - | (42,000) | ||||||
| BALANCE AT 31 DECEMBER 2015 | 650,330 | 4,283,196 | 155,260 | 414,997 | (3,978,537) | 1,525,246 | ||||||
| Loss for the year and total comprehensive incomefor the year | - | - | - | - | (456,050) | (456,050) | ||||||
| Acquisition of subsidiary | - | - | - | 91,197 | - | 91,197 | ||||||
| Cost of share based payments | - | - | 475,740 | - | - | 475,740 | ||||||
| Exercise of options and warrants | - | 373,019 | (98,491) | (373,019) | 98,491 | - | ||||||
| Share issues | 40,003 | 6,198,207 | - | 954,341 | - | 7,192,551 | ||||||
| Share issue expenses | - | (148,163) | - | - | - | (148,163) | ||||||
| Capital reduction (see note 23) | (612,867) | (9,431,609) | - | - | 10,044,476 | - | ||||||
| BALANCE AT 31 DECEMBER 2016 | 77,466 | 1,274,650 | 532,509 | 1,087,516 | 5,708,380 | 8,680,521 |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2016
1 GENERAL INFORMATION
Metal Tiger plc is a public limited company incorporated in the United Kingdom. The shares of the Company are listed on the AIM stock exchange. The Group’s principal activities are described in the Report of the Directors.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and IFRIC interpretations as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. The Financial Statements have also been prepared under the historical cost basis, except for investments in the Direct Equities Division, share options and warrants which are recognised at fair value.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements, are disclosed later in these accounting policies.
The financial statements are presented in UK pounds, which is also the Company’s functional currency.
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout all periods presented in the financial statements.
Metal Tiger plc acquired a controlling interest in SouthEast Asia Exploration and Mining Co. Ltd and its subsidiaries, Tiger Minerals Co. Ltd. and Tiger Resources Co. Ltd. during the year ended 31 December 2016 and consolidated financial statements for the Metal Tiger Group have accordingly been prepared for the year ended 31 December 2016.
At 31 December 2015 the Company had two subsidiaries, Metal Horse Limited and Thai Star Resources Co., Ltd. Since incorporation, Metal Horse Limited has not commenced operations and has no material assets or liabilities. At that date the activities, assets and liabilities of Thai Star Resources Co., Ltd were not considered material and consequently consolidated financial statements for the Group were not prepared for the year ended 31 December 2015 on the basis that in accordance with section 405 of the Companies Act 2006 the inclusion of these companies was not material for the purpose of giving a true and fair view. For this reason, the comparative figures for the year ended 31 December 2015 are those of the Company.
Further details of the acquisition during the year are given in note 14 and information on all subsidiary companies is given in note 15.
An overview of standards, amendments and interpretations to IFRS issued but not yet effective, and which have not been adopted early by the Company, is presented below under ‘Statement of Compliance’.
GOING CONCERN
The financial statements are required to be prepared on the going concern basis unless it is inappropriate to do so. At the year end the Group had net current assets of £5,675,276 including cash balances of £1,389,784 and quoted investments of £2,470,724 compared with borrowings of £48,375. Since the year end the Company has raised a further £4,850,000 (before expenses) from a placing and £483,033 from the exercise of warrants and share options. The Directors have prepared cash flow forecasts through to 30 March 2019 which demonstrate that the Group is able to meet its commitments as they fall due. On this basis, the Directors have a reasonable expectation that the Group has adequate resources to continue operating for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the Group’s financial statements.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. These estimates and assumptions are based upon management’s knowledge and experience of the amounts, events or actions. Actual results may differ from such estimates.
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.
In certain circumstances, where fair value cannot be readily established, the Directors are required to make judgements over carrying value impairment, and evaluate the size of any impairment required.
BUSINESS COMBINATIONS
Contingent consideration on acquisitions is recognised at fair value.
SHARE BASED PAYMENTS AND SHARE WARRANTS
The calculation of the fair value of equity-settled share based awards and warrants issued in connection with share issues and the resulting charge to the Statement of Comprehensive Income or reserves requires assumptions to be made regarding future events and market conditions. These assumptions include the future volatility of the Company’s share price. These assumptions are then applied to a recognised valuation model in order to calculate the fair value of the awards at the date of grant.
FAIR VALUE OF INVESTMENT
The Group’s investments in the Direct Equities Division require measurement at fair value. For the quoted entities traded in an active market the fair value is based on their quoted price. The unquoted share warrants (level 3) are shown at Directors’ valuation based on a value derived from either Black-Scholes or Monte Carlo pricing models depending on the suitability of the method to the specific warrant taking into account the terms of the warrant and discounting for the non-tradability of the warrants where appropriate. Both pricing models use inputs relating to expected volatility that require estimations. No value is ascribed to warrants which include terms which cause the exercise price to be dependent on events outside the control of the Group and outcomes which are unable to be predicted with any certainty.
CLASSIFICATION OF JOINT ARRANGEMENTS
For all joint arrangements structured in separate vehicles the Group must assess the substance of the joint arrangement in determining whether it is classified as a joint venture or joint operation. This assessment requires the Group to consider whether it has rights to the joint arrangement’s net assets (in which case it is classified as a joint venture), or rights to and obligations for specific assets, liabilities, expenses, and revenues (in which case it is classified as a joint operation). Factors the Group must consider include:
structure; legal form; contractual agreement; and other facts and circumstances.Upon consideration of these factors, the Group has determined that all of its joint arrangements structured through separate vehicles give it rights to the net assets and are therefore classified as joint ventures.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE INVESTMENTS
In arriving at the carrying value of investments in subsidiaries, associates and joint ventures, the Group determines the need for impairment based on the level of geological knowledge and confidence of the mineral resources (as further described in its accounting policy). Such decisions are taken on the basis of the exploration and research work carried out in the period utilising expert reports.
STATEMENT OF COMPLIANCE
The Financial Statements comply with IFRS as adopted by the European Union.
New standards, interpretations and amendments to IFRS which are effective as of 1 January 2016 and adopted by the Group are as follows:
Annual Improvements to IFRSs 2012–2014 Cycle – Various Standards; IFRS 11 (amendments) – Accounting for Acquisitions of Interests in Joint Operations; IAS 1 (amendments) – Disclosure Initiative; IAS 16 and IAS 38 (amendments) - Clarification of Acceptable Methods of Depreciation and Amortisation; IAS 16 and IAS 41 (amendments) – Agriculture: Bearer Plants; and IAS 27 (amendments) – Equity Method in Separate Financial Statements.None of these standards affected the amounts reported in the financial statements. Other standards, interpretations and amendments not shown above are either not relevant or not material to the Group.
At the date of authorisation of these financial statements, a number of Standards and Interpretations were in issue but not yet effective. The Directors do not anticipate that the adoption of these standards and interpretations, or any of the amendments made to existing standards as a result of the annual improvements cycle, will have a material effect on the financial statements in the year of initial application.
BASIS OF CONSOLIDATION
The Consolidated Statement of Comprehensive Income and Statement of Financial Position include the financial statements of the Company and its subsidiary undertakings made up to 31 December 2016.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to non-controlling interests, even if this results in non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
A change in ownership interest of a subsidiary without a loss of control is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
derecognises the assets (including goodwill) and liabilities of the subsidiary; derecognises the carrying amount of any non-controlling interests; derecognises the cumulative translation differences recorded in equity; recognises the fair value of the consideration received; recognises the fair value of any investment retained; recognises any surplus or deficit in the Statement of Comprehensive Income; and reclassifies the parent’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may require that the amounts previously recognised in other comprehensive income be reclassified to profit or loss.
As explained above, at 31 December 2015 the Company’s subsidiaries either had not commenced operations or had no material assets or liabilities. Consequently, no consolidated financial statements were prepared for that period and figures for that year included in these financial statements have not been restated for the same reasons.
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at fair value at the date of acquisition and the amount of any non-controlling interest in the acquired entity. Non-controlling interests (‘NCI’) may be initially measured either at fair value or at the NCI’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Acquisition costs incurred are expensed and included in administrative expenses except where they relate to the issue of debt or equity instruments in connection with the acquisition, in which case they are included in finance costs.
When the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss. It is then considered in determination of goodwill.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Any subsequent changes to the fair value of the contingent consideration are adjusted against the cost of the acquisition if they occur within the measurement period of twelve months following the date of acquisition. Any subsequent changes to the fair value of the contingent consideration after the measurement period are recognised in the Income Statement. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity.
SEGMENTAL REPORTING
The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker, which is identified as the Board of Directors. In identifying its operating segments, management generally follows the Company's service lines which represent the main products and services provided by the Company.
EXPLORATION COSTS
Exploration costs incurred by Group companies, associates and joint ventures are expensed in arriving at profit or loss for the period.
Investments made are capitalised as an asset where the underlying projects have mineral resources which are compliant with internationally recognised mineral resource standards (JORC and NI 43-101) or where the investment is to acquire an interest in an investment or associate that holds commercial information, assets or strategic features against which a current commercial value can be reasonably assessed.
The JORC Code, the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, is a professional code of practice that sets minimum standards for public reporting of mineral exploration results, mineral resources and ore reserves. NI 43-101 is a national instrument for the Standards of Disclosure for Mineral Projects within Canada which provides a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges within Canada.
TAXATION
Current taxation is the taxation currently payable on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Temporary differences include those associated with shares in subsidiaries and joint ventures and are only not recognised if the Company controls the reversal of the difference and it is not expected for the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date. Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Statement of Comprehensive Income, except where they relate to items that are charged or credited to equity in which case the related deferred tax is also charged or credited directly to equity.
FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.
The results of overseas operations are translated at rates approximating to those ruling when the transactions took place. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the Statement of Financial Position reporting date. All exchange differences are dealt with through the Statement of Comprehensive Income as they arise.
INTANGIBLE ASSETS
Intangible assets comprise software licences held in connection with exploration operations. Expenditure is stated at cost, less amortisation and provision for any impairment. Amortisation is provided at rates calculated to write off the cost of the software over its expected useful life as follows
| Software | 10 years straight line |
Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the Statement of Comprehensive Income in arriving at profit or loss for the year.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, net of depreciation and provision for any impairment. Depreciation is calculated to write down the cost of all tangible fixed assets to estimated residual value over their expected useful lives as follows:
| Building improvements | 5 years straight line (or length of lease if shorter) | ||||
| Mining equipment | 5 years straight line | ||||
| Vehicles | 5 years straight line | ||||
| Office equipment | 3 to 5 years straight line |
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each year end. An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying value is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the Statement of Comprehensive Income in arriving at profit or loss for the year.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Associates are entities, other than subsidiaries or joint ventures, over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not amount to control or joint control of the investee.
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions require the unanimous consent of the parties sharing control. In some situations, joint control exists even though the Company has an ownership interest of more than 50 per cent because joint venture partners have equal control over management decisions. The Company’s joint venture interests are held through a Jointly Controlled Entity (JCE). A JCE is a joint venture that involves the establishment of a corporation, partnership or other entity in which each venturer has a long term interest.
Exploration costs in respect of investments in associates and joint ventures are capitalised or expensed according to the policy set out above in respect of Group exploration costs. For associates and joint ventures which are equity accounted for, any share of losses are offset against loans advanced.
FINANCIAL ASSETS
The Company's financial assets comprise investments held in the Direct Equities Division, trade receivables, loans and cash and cash equivalents.
CURRENT ASSET INVESTMENTS
All investments are determined upon initial recognition as held at fair value through profit or loss and are designated as current asset investments. Investment transactions are accounted for on a trade date basis. Incidental acquisition costs are expensed. Assets are de-recognised at the trade date of the disposal. The fair value of the financial instruments in the balance sheet is based on the quoted bid price at the balance sheet date, with no deduction for any estimated future selling cost. Unquoted investments are valued by the Directors using primary valuation techniques such as, where possible, recent transactions, last price and net asset value. Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income.
TRADE RECEIVABLES
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.
LOANS
Loans and receivables from third parties are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method.
Impairment provisions are recognised where there is objective evidence that the Company will be unable to collect all of the amounts due under the terms receivable, the amount of such provision being the difference between the net carrying amount and the present value of the expected future cash flows.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
IMPAIRMENT OF FINANCIAL ASSETS
The carrying values of the Company’s assets are reviewed annually for any indicators of impairment. Where the carrying value of an asset exceeds the recoverable amount (i.e. the higher of value in use and fair value less cost to sell), the asset is written down accordingly. Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income.
FINANCIAL LIABILITIES
The Company’s financial liabilities comprise trade and other payables. Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Company becomes a party to the contractual provisions of the instruments.
Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.
SHARE BASED PAYMENTS
All share based payments are accounted for in accordance with IFRS 2 – “Share based payments”. The Company issues equity-settled share based payments in the form of share options and warrants to certain Directors, employees and advisers. Equity-settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date of 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. At each balance sheet date, the Company revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to retained earnings.
Equity-settled share based payments made in settlement of professional and other costs. These payments are measured at the fair value of the services provided which will normally equate to the invoiced fees and charged to the Statement of Comprehensive Income, share premium account or are capitalised according to the nature of the fees incurred.
Fair value is estimated using the Black-Scholes valuation model. The expected life used in the model has been adjusted, on the basis of management’s best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.
WARRANTS
Share warrants issued to shareholders in connection with share capital issues are measured at fair value at the date of issue and treated as a separate component of equity. Fair value is determined at the grant date and is estimated using the Black-Scholes valuation model. Share warrants issued separately to Directors, employees and advisers are accounted for in accordance with the policy on share based payments above.
EQUITY
Equity comprises the following:
“Share capital” representing the nominal value of equity shares;
“Share premium” representing the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue;
“Share based payment reserve” representing the cumulative cost of share based payment;
“Warrant reserve” representing the outstanding cost of warrants issued in connection with share capital issues; and
“Retained losses" representing retained losses.
OPERATING LEASES
Where substantially all of the risks and rewards incidental to ownership are not transferred to the Company (an “operating lease”), the total rentals payable under the lease are charged to the Statement of Comprehensive Income on a straight line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight line basis.
3 SEGMENTAL INFORMATION
DIVISIONAL SEGMENTS
| Year ended 31 December 2016Group | DirectEquities£ | DirectProjects£ | Centralcosts£ | Inter-company£ | Total£ | |||||
| COMPREHENSIVE INCOME | ||||||||||
| Net gain/(loss) on investments | 2,643,110 | (411,782) | 321 | - | 2,231,649 | |||||
| Administrative expenses | (30,784) | (1,438,467) | (1,768,863) | - | (3,238,114) | |||||
| Bargain purchase on acquisition of subsidiary | - | 155,628 | - | - | 155,628 | |||||
| Net finance income/expense | 1,999 | 127,747 | 791 | - | 130,537 | |||||
| Gain/(loss) for the year before taxation | 2,614,325 | (1,566,874) | (1,767,751) | - | (720,300) | |||||
| Taxation | - | - | - | - | - | |||||
| Gain/(loss) for the year after taxation | 2,614,325 | (1,566,874) | (1,767,751) | - | (720,300) | |||||
| FINANCIAL POSITION | ||||||||||
| Intangible assets | - | 26,693 | - | - | 26,693 | |||||
| Property, plant and equipment | - | 46,271 | - | - | 46,271 | |||||
| Investment in associates | - | 743,418 | - | - | 743,418 | |||||
| Investment in joint ventures | - | 1,097,602 | - | - | 1,097,602 | |||||
| Total non-current assets | - | 1,913,984 | - | - | 1,913,984 | |||||
| Current assets | 4,127,920 | 9,711,710 | 1,831,453 | (9,508,420) | 6,162,663 | |||||
| Current liabilities | - | (9,762,991) | (232,816) | 9,508,420 | (487,387) | |||||
| Non-current liabilities | - | (131,366) | - | - | (131,366) | |||||
| Net assets | 4,127,920 | 1,731,337 | 1,598,637 | - | 7,457,894 | |||||
| CASH FLOWS | ||||||||||
| Net cash flows | (610,097) | (1,630,578) | 3,275,694 | - | 1,035,019 |
Direct Equities include strategic investments in fellow AIM quoted resource exploration and development companies including equity and warrant holdings. Direct Projects are mainly by way of joint venture arrangements and include interests in precious, strategic and energy metals, with projects located in Spain, Thailand and Tanzania. Central costs comprise those costs which cannot be allocated directly to either operating division and include office rent, audit fees, AIM costs and a proportion of employee and Directors’ remuneration relating to managing the business as a whole.
| Year ended 31 December 2015Company (see note 2) | DirectEquities£ | DirectProjects£ | Centralcosts£ | Total£ | ||||
| COMPREHENSIVE INCOME | ||||||||
| Net gain/(loss) on investments | 420,407 | (133,015) | 75 | 287,467 | ||||
| Administrative expenses | (38,636) | (440,132) | (407,783) | (886,551) | ||||
| Gain/(loss) for the year before taxation | 381,771 | (573,147) | (407,708) | (599,084) | ||||
| Taxation | - | - | - | - | ||||
| Gain/(loss) for the year after taxation | 381,771 | (573,147) | (407,708) | (599,084) |
| Year ended 31 December 2015Company (see note 2) | DirectEquities£ | DirectProjects£ | Centralcosts£ | Total£ | ||||
| FINANCIAL POSITION | ||||||||
| Investment in associates | - | 58,374 | - | 58,374 | ||||
| Investment in joint ventures | - | 408,539 | - | 408,539 | ||||
| Total non-current assets | - | 466,913 | - | 466,913 | ||||
| Current assets | 768,386 | 6,677 | 375,903 | 1,150,966 | ||||
| Current liabilities | (282) | (5,360) | (86,991) | (92,633) | ||||
| Net assets | 768,104 | 468,230 | 288,912 | 1,525,246 | ||||
| CASH FLOWS | ||||||||
| Net cash flows | 578,173 | (1,027,538) | 617,818 | 168,453 |
GEOGRAPHICAL SEGMENTS
| Year ended 31 December 2016Group | UK£ | EMEA£ | Asia-Pacific£ | Australasia£ | Inter-company | Total£ | ||||||
| COMPREHENSIVE INCOME | ||||||||||||
| Net gain/(loss) on investments | 1,165,604 | (411,588) | (194) | 1,477,827 | - | 2,231,649 | ||||||
| Administrative expenses | (2,230,854) | (122,426) | (884,834) | - | - | (3,238,114) | ||||||
| Bargain purchase of subsidiary | - | - | 155,628 | - | - | 155,628 | ||||||
| Net finance income | 791 | - | 92,551 | 37,195 | - | 150,537 | ||||||
| Gain/(loss) for the year before taxation | (1,064,459) | (534,014) | (636,849) | 1,515,022 | - | (700,300) | ||||||
| Taxation | - | - | - | - | - | - | ||||||
| Gain/(loss) for the year after taxation | (1,064,459) | (534,014) | (636,849) | 1,515,022 | - | (700,300) | ||||||
| FINANCIAL POSITION | ||||||||||||
| Intangible assets | - | - | 26,693 | - | - | 26,693 | ||||||
| Property, plant and equipment | - | - | 46,271 | - | - | 46,271 | ||||||
| Investment in associates | - | 743,418 | - | - | - | 743,418 | ||||||
| Investment in joint ventures | - | 366,900 | 730,702 | - | - | 1,097,602 | ||||||
| Total non-current assets | - | 1,110,318 | 803,666 | - | - | 1,913,984 | ||||||
| Current assets | 4,229,286 | - | 9,711,770 | 1,730,027 | (9,508,420) | 6,162,663 | ||||||
| Current liabilities | (232,817) | (10,228) | (9,698,316) | (54,446) | 9,508,420 | (487,387) | ||||||
| Non-current liabilities | (131,366) | - | - | - | - | (131,366) | ||||||
| Net assets | 3,865,103 | 1,100,090 | 817,120 | 1,675,581 | - | 7,457,894 |
In the year ended 31 December 2015, all revenues were derived from the UK. Non-current assets primarily related to the Company’s investments in Thailand and Spain (see notes 16 and 17).
4 INVESTMENT INCOME
|
|
2016 |
2015 | ||
| £ | £ | |||
| Bank interest | 321 | 75 |
5 OPERATING LOSS
|
|
2016 |
2015 | ||
| £ | £ | |||
| Loss from operations is arrived at after charging: | ||||
| Wages and salaries (see note 6) | 906,595 | 352,636 | ||
| Share based payment expense – options | 475,740 | 83,701 | ||
| Amortisation of intangible assets | 372 | - | ||
| Depreciation | 6,156 | - | ||
| Operating lease expense - property | 91,758 | 35,486 |
During the year the Group obtained the following services from the Company’s auditor:
|
| ||||
| 2016 | 2015 | |||
| £ | £ | |||
| Fees payable to the Company’s auditor for: | ||||
| the audit of the Group’s (2015: Company’s) financial statements | 28,500 | 40,000 | ||
| prior year under-provision | - | 10,116 | ||
| the audit of the Company’s subsidiaries | - | - | ||
| tax services | - | - | ||
| other services | - | - | ||
The amount shown for fees payable to the auditor in respect of the Group financial statements for 2016 includes £14,000 in respect of the Company’s own audit.
6 EMPLOYEE AND DIRECTORS’ REMUNERATION
The expense recognised for employee benefits for continuing operations is analysed below:
| 2016 | 2015 | |||
| £ | £ | |||
| Short term employee benefits (including Directors) | 882,558 | 320,586 | ||
| Pension costs | 3,746 | - | ||
| Social security costs | 20,291 | 32,050 | ||
| 906,595 | 352,636 | |||
| Share based remuneration | 475,740 | 83,701 | ||
| 1,382,335 | 436,337 |
DIRECTORS’ REMUNERATION
| £ | £ | |||
| Remuneration | 217,058 | 176,000 | ||
| Consultancy fees | 116,202 | 48,822 | ||
| Bonuses | 126,875 | 94,396 | ||
| Short term employee benefits | 460,135 | 319,218 | ||
| Share based remuneration | 217,970 | 83,701 | ||
| 678,105 | 402,919 | |||
| Social security costs | 41,322 | 31,819 | ||
| 719,427 | 434,738 |
Directors exercised options over 3,335,000 (2015: 4,670,000) ordinary shares in the Company during the year (see note 24). Based on the difference between the exercise price and market price of the Company’s shares on the date of exercise, a loss of £1,668 (2015 gain: £1,168) would have arisen on exercise.
Details of Directors’ employee benefits expense are as follows:
| Name of Director | Remuneration£ | Consultancyfees£ | Bonuses£ | Total2016£ | Total2015£ | |||||
| Terry Grammer | - | 116,202 | - | 116,202 | 48,822 | |||||
| Paul Johnson | 95,077 | - | 61,250 | 156,327 | 118,161 | |||||
| Michael McNeilly | 9,032 | - | - | 9,032 | - | |||||
| Keith Springall | 7,527 | - | - | 7,527 | - | |||||
| Charles Hall | 3,077 | - | - | 3,077 | - | |||||
| Jordan Luckett | 25,780 | - | - | 25,780 | - | |||||
| Cameron Parry | 34,427 | - | 35,000 | 69,427 | 118,161 | |||||
| Alex Borrelli | 42,138 | - | 30,625 | 72,763 | 34,074 | |||||
| 217,058 | 116,202 | 126,875 | 460,135 | 319,218 |
Details of share options granted to Directors during the year are given in note 24.
Average number of persons employed during the year:
| 2016 | 2015 | |||
| Number | Number | |||
| Direct Projects operations | 10 | - | ||
| Office and management | 5 | 3 | ||
| 15 | 3 |
Key management are the Directors of the Company.
7 FINANCE INCOME
|
|
2016 |
2015 | ||
| £ | £ | |||
| Bank interest | 207 | - | ||
| Exchange gains | 130,384 | - | ||
| 130,591 | - |
8 FINANCE COSTS
|
|
2016 |
2015 | ||
| £ | £ | |||
| Bank interest | 54 | - |
9 TAXATION
|
|
2016Group |
2015Company | ||
| £ | £ | |||
| Current tax on income for the year | - | - |
The tax on the Group’s (2015: Company's) profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to profits of the Group or Company as follows:
| 2016 | 2015 | |||
| £ | £ | |||
| FACTORS AFFECTING THE TAX CHARGE | ||||
| Loss before tax | (720,300) | (599,084) | ||
| Loss before tax multiplied by rate of corporation tax in the UK of 20%(2015: 20%) | (144,060) | (119,817) | ||
| Income not chargeable to tax | (31,124) | - | ||
| Expenses not allowable for tax | 21,763 | 10,001 | ||
| Other permanent timing differences | (2,794) | - | ||
| Short term timing differences not recognised | (18,031) | - | ||
| Relieved against tax losses brought forward | - | (219,907) | ||
| Tax losses carried forward | 174,246 | 329,723 | ||
| Total tax | - | - |
No deferred tax asset has been recognised as Directors cannot be certain that future profits will be sufficient for this asset to be realised. As at 31 December 2016 the Group has tax losses carried forward of approximately £3,250,000 (2015: £1,606,000) of which £1,280,000 relates to the acquired subsidiaries in Thailand and expire over the period to 31 December 2021 (2015: £nil).
10 PROFIT ACCOUNTED FOR IN THE PARENT COMPANY
As permitted under Section 408 of the Companies Act 2006, a Statement of Comprehensive Income for the Company is not presented as part of these financial statements.
11 EARNINGS/(LOSS) PER SHARE
The basic earnings per share is based on the profit or loss for the year divided by the weighted average number of shares in issue during the year. The weighted average number of ordinary shares for the year assumes that all shares have been included in the computation based on the weighted average number of days since issue.
| 2016 | 2015 | |||
| £ | £ | |||
| Loss attributable to equity holders of the Company: | ||||
| Continuing and total operations | (651,447) | (599,084) | ||
| No of shares | No of shares | |||
| Weighted average number of ordinary shares in issue for basic earnings | 556,449,818 | 291,007,385 | ||
| Weighted average of exercisable share options and warrants | n/a | n/a | ||
| Weighted average number of ordinary shares in issue for fully diluted earnings | n/a | n/a |
No share options or warrants outstanding at 31 December 2016 or 31 December 2015 were dilutive in view of the loss for t he year and all such potential ordinary shares are excluded from the weighted average number of ordinary shares in calculating diluted earnings per share.
| 2016 | 2015 | |||
| Pence pershare | Pence pershare | |||
| Loss per ordinary share - basic: |
|
| ||
| Continuing and total operations | (0.12p) | (0.21)p | ||
| Loss per ordinary share - fully diluted: | ||||
| Continuing and total operations | (0.12p) | (0.21)p |
Details of shares and warrants issued since the year end, together with details of conversions of warrants and options into shares since the year end, which may have a prospective dilutive impact are given in note 28.
12 INTANGIBLE ASSETS
| Year ended 31 December 2016Group | Software£ | |||
| COST | ||||
| At 1 January 2016 | - | |||
| Acquisitions in the year | 25,668 | |||
| Translation differences | 1,417 | |||
| At 31 December 2016 | 27,085 | |||
| AMORTISATION | ||||
| At 1 January 2016 | - | |||
| Charge for the year | 372 | |||
| Translation differences | 20 | |||
| At 31 December 2016 | 392 | |||
| NET BOOK VALUE | ||||
| At 1 January 2016 | - | |||
| At 31 December 2016 | 26,693 |
The Company holds no intangible assets.
13 PROPERTY, PLANT AND EQUIPMENT
| Year ended 31 December 2016Group | Buildingimprovements £ | Miningequipment £ | Officeequipment £ | Vehicles£ | Total£ | |||||
| COST | ||||||||||
| At 1 January 2016 | - | - | - | - | - | |||||
| Acquired with subsidiaries | 114 | 422 | 1,852 | - | 2,388 | |||||
| Acquisitions in the year | 19,733 | - | 27,204 | 458 | 47,395 | |||||
| Translation differences | 1,107 | 66 | 1,786 | 26 | 2,985 | |||||
| At 31 December 2016 | 20,954 | 488 | 30,842 | 484 | 52,768 | |||||
| DEPRECIATION | ||||||||||
| At 1 January 2016 | - | - | - | - | - | |||||
| Charge for the year | 1,484 | 307 | 4,333 | 32 | 6,156 | |||||
| Translation differences | 82 | 17 | 240 | 2 | 341 | |||||
| At 31 December 2016 | 1,566 | 324 | 4,573 | 34 | 6,497 | |||||
| NET BOOK VALUE | ||||||||||
| At 1 January 2016 | - | - | - | - | - | |||||
| At 31 December 2016 | 19,388 | 164 | 26,269 | 450 | 46,271 |
The Company holds no property, plant or equipment.
14 ACQUISITION OF SUBSIDIARY UNDERTAKINGS
On 16 February 2016, the Company exercised its option to acquire the remainder of the Thai based assets of SouthEast Asia Mining Corporation (“SEAM”), comprising its investment in SouthEast Asia Exploration and Mining Co. Ltd and certain fellow subsidiaries, to provide an increased portfolio of base metal interests in Thailand through joint venture interests with Boh Yai Mining Company Ltd. in Thailand. The consideration was a cash payment of US$200,000 and a payment of US$300,000 in 23,799,000 new ordinary shares of the Company. A potential further cash payment of US$100,000, a US$60,000 working capital contribution and issue of 23,799,000 warrants over the Company’s ordinary shares at an exercise price of 1.74p per share may be issued subject to SEAM being granted its primary target prospecting licence 1/2557 in the Kanchanaburi province in Western Thailand.
As a result of this acquisition, the Company acquired the following interests in subsidiaries, all of which are based and operate in Thailand:
| Effective interest onacquisition | ||
| SouthEast Asia Exploration and Mining Co. Ltd. (subsequently renamed Metal TigerExploration and Mining Co. Ltd.) | 90% | |
| SouthEast Asia Mining Co. Ltd. (subsequently renamed Metal Tiger Ventures Co. Ltd.) | 78.4% | |
| SouthEast Asia Resources Co. Ltd. (subsequently renamed Metal Group Co. Ltd.) | 94.9% | |
| Tiger Minerals Co. Ltd. (subsequently renamed Metal Holdings Co. Ltd.)** | 91% | |
| Tiger Resources Co. Ltd. (subsequently renamed Metal Tiger Resources Co. Ltd.)** | 91% |
* Reorganisation of interests since acquisition has changed the effective ownership of certain companies. The resultant ownership at the year end is shown in note 15 and the effect of this change shown in the Statement of Changes in Equity.
*\* Tiger Minerals Co. Ltd. and Tiger Resources Co. Ltd were, prior to 16 February 2016, joint venture interests of the Company in which the Company had a 10% interest.
The following table summarises the recognised amounts of assets and liabilities assumed on acquisition:
| At 16 February 2016 | ||||||
| Book value£ | Acquisitionadjustments£ | Consolidated£ | ||||
| NON‐CURRENT ASSETS | ||||||
| Property, plant and equipment | 2,388 | - | 2,388 | |||
| Investment in joint ventures | 18,632 | - | 18,632 | |||
| 21,020 | - | 21,020 | ||||
| CURRENT ASSETS | ||||||
| Trade and other receivables | 100,996 | - | 100,996 | |||
| Cash and cash equivalents | 5,154 | - | 5,154 | |||
| Total current assets | 106,150 | - | 106,150 | |||
| CURRENT LIABILITIES | ||||||
| Trade and other payables | (5,591) | - | (5,591) | |||
| Short term loans and borrowings | (41,910) | - | (41,910) | |||
| Total current liabilities | (47,501) | - | (47,501) | |||
| NET CURRENT ASSETS | 58,649 | - | 58,649 | |||
| NON-CURRENT LIABILITIES | (7,369,356) | 7,369,356 | - | |||
| NET ASSETS/(LIABILITIES) | (7,289,687) | 7,369,356 | 79,669 | |||
| Less: | ||||||
| Equity non-controlling interests | 848,964 | - | 848,964 | |||
| Interests already held through joint ventureinvestments | (172,044) | - | (172,044) | |||
| NET ASSETS/(LIABILITIES) ACQUIRED | (6,612,767) | 7,369,356 | 756,589 | |||
The adjustment on acquisition relates to a long term payable to the vendor which has no commercial value.
| Consideration for the acquisition was as follows: | £ | |
| Cash paid | 164,207 | |
| Shares issued | 214,191 | |
| Provision for future cash payment | 131,366 | |
| Provision for issue of warrants | 91,197 | |
| Consideration paid | 600,961 |
The provision for future cash payments and issue of warrants relating to the Kanchanaburi prospecting licence has been valued at the amount of the cash consideration which would be made if the licence is granted plus the value of the warrants at the date of acquisition on the assumption set out in note 24. No value has been assigned to the licence as any value is contingent on the grant of the licence. Costs are expensed until such time as the legal rights to explore have been obtained.
The premium on purchase recognised in the Statement of Comprehensive Income is as follows:
| £ | ||
| Net assets acquired | 756,589 | |
| Consideration | (600,961) | |
| Bargain purchase recognised in arriving at the profit for the year | 155,628 |
The premium of acquisition arose as a result of the vendor taking a corporate decision to exit their operations in Thailand and concentrating on other strategic investments enabling the Company to negotiate a bargain price. No material expenses were incurred relating to the acquisition.
The results of the acquired interests since acquisition were as follows:
| £ | ||
| Administrative expenses | (561,573) | |
| Loss for the year before taxation | (561,573) | |
| Taxation | - | |
| Loss for the year after taxation | (561,573) |
If the acquisition of the above interests had occurred on 1 January 2016, the Group’s profit on continuing activities before taxation would have been reduced by £35,000. There would be no impact on reported income.
The cash flows of the acquired interests since acquisition:
| £ | ||
| Net cash absorbed by operating activities | (493,660) | |
| Net cash absorbed by investing activities | (72,856) | |
| Net cash from financing activities | 568,147 | |
| Net increase in cash and cash equivalents | 1,631 | |
| Cash and cash equivalents on acquisition | 5,154 | |
| Effect of exchange rate changes | 884 | |
| Cash and cash equivalents at the end of the year | 7,669 |
The net cash from financing activities principally relates to financing provided by the ultimate parent company.
15 SUBSIDIARY UNDERTAKINGS
The following were subsidiary undertakings at the end of the year. All subsidiaries have year ends which are coterminous with that of the parent Company. Except where indicated all companies are engaged in mineral exploration. Metal Tiger plc controls those companies where its proportion of voting rights is less than 50% by virtue of shareholder agreements.
| Name | Country ofincorporation orregistration | Effectivedividendrights held | Type ofshares held | Proportion ofvoting rights andordinary sharecapital held | ||||
| Metal Horse Limited* (non-trading) | England and Wales | 100% | Ordinary | 100% | ||||
| Metal Tiger Australia Pty Limited(non-trading) | Australia | 100% | Ordinary | 100% | ||||
| Metal Partners Co. Ltd. | Thailand | 87% | OrdinaryPreference | 49%49% | ||||
| Metal Tiger Exploration and Mining Co. Ltd | Thailand | 100% | OrdinaryPreference | 49%100% | ||||
| Metal Tiger IHQ Co Ltd* | Thailand | 100% | Ordinary | 100% | ||||
| Metal Tiger Ventures Co. Ltd. * | Thailand | 49% | Ordinary | 49% | ||||
| Metal Group Co. Ltd. | Thailand | 99% | Ordinary | 49% | ||||
| Metal Holdings Co Ltd. | Thailand | 74% | Ordinary | 49% | ||||
| Metal Tiger Resources Co. Ltd. | Thailand | 100% | Ordinary | 88% |
* Directly owned by the Company.
| INVESTMENT IN SUBSIDIARY UNDERTAKINGS | 2016 | 2015 | ||
| Company | £ | £ | ||
| At 1 January | - | - | ||
| Costs previous accounted for as joint venture interests | 172,044 | - | ||
| Acquisition of interests in Thailand | 600,961 | - | ||
| Acquisition of Metal Tiger IHQ Co. Ltd. | 56,497 | - | ||
| Acquisition of Metal Tiger Australia Pty Ltd. | 59 | - | ||
| Interests previously held by the Company transferred to subsidiary undertakings on Group re-organisation | (509,085) | - | ||
| Share based payments | 18,312 | - | ||
| At 31 December | 338,788 | - |
Metal Tiger IHQ Co. Ltd and Metal Tiger Australia Pty Ltd. were established during the year. The acquisition costs shown represent the initial capital investment in each company by the Company.
The assets and liabilities of Thai Star Resources Co. Ltd. (now Metal Partners Co. Ltd.) at 31 December 2015 incorporated in the consolidation as at 1 January 2016 (see note 2) were as follows:
| 2015 | ||
| £ | ||
| Current assets | 170 | |
| Current liabilities | (13,683) | |
| Net liabilities | (13,513) |
16 INVESTMENT IN ASSOCIATES
The Group and the Company held the following interest in an associate at the end of the year:
| Name | Country of incorporation or registration | Proportion ofvoting rights andordinary sharecapital held | Nature ofbusiness | |||
| Metal Capital Limited | England and Wales | 30% | Mineral exploration |
| Cost of investment | Loan advances | Total | ||||
| £ | £ | £ | ||||
| At 1 January 2015 | - | - | - | |||
| Additions | 9 | 67,136 | 67,145 | |||
| Share of comprehensive losses | (9) | (8,762) | (8,771) | |||
| At 31 December 2015 | - | 58,374 | 58,374 | |||
| Additions in the year | 64,940 | 604,288 | 669,228 | |||
| Share of comprehensive losses | (21,077) | - | (21,077) | |||
| Translation differences | - | 36,893 | 36,893 | |||
| At 31 December 2016 | 43,863 | 699,555 | 743,418 |
Metal Capital Limited owns 100 per cent of Tshukudu Metals Botswana (Proprietary) Limited which acquired Discovery Mines (Proprietary) Limited on 27 November 2015. ASX listed MOD Resources Limited (“MOD”) owns the remaining 70 per cent of Metal Capital Limited. Discovery Mines (Proprietary) Limited holds 14 prospecting licences of varying status adjacent to MOD’s Mahumo Project and covering the prospective 100km long Mahumo Corridor in the Kalahari Copper Belt in Botswana.
The consolidated results and net assets of Metal Capital Limited were as follows:
| 2016 | 2015 | |||
| £ | £ | |||
| Revenue | - | - | ||
| Operating costs | (104,242) | (29,237) | ||
| Loss before taxation | (104,242) | (29,237) | ||
| Tax on loss on ordinary activities | - | - | ||
| Loss for the year | (104,242) | (29,237) |
| 2016 | 2015 | |||
| £ | £ | |||
| Non-current assets | 2,202,487 | 37,898 | ||
| Current assets | 116,867 | 30 | ||
| Current liabilities | (2,418,849) | (67,135) | ||
| Net assets | (99,495) | (29,207) |
17 INVESTMENT IN JOINT VENTURES
The companies through which Metal Tiger’s joint venture interests are set out below. All are engaged in mineral exploration.
| Joint venture | Country ofincorporation | Principalplace ofbusiness | Proportion of ownershipinterest and voting rights heldby the Group/Company | |||||
| 31 Dec 2016 | 31 Dec 2015 | |||||||
| Logrosán Minerals Limited | Spain | Spain | 50% | 28% | ||||
| Boh Yai Mining Company | Thailand | Thailand | Option to acquire 80% | - | ||||
| Kibo Mining (Cyprus) Limited | Cyprus | Tanzania | 50% | 50% | ||||
| Kibo Jubilee (Cyrus) Resources Limited | Cyprus | Tanzania | 50% | 50% | ||||
| Eurasia Mining plc joint venture | Russia | Russia | 50% | 50% | ||||
At 31 December 2015 the Company also had the following interests in other joint ventures; additional interests in these joint ventures were acquired on 16 February 2016 as set out in note 14 and, as a result, the companies concerned are now consolidated entities within the Metal Tiger Group.
| Joint venture | Country ofincorporation | Principalplace ofbusiness | Proportion of ownershipinterest and voting rights heldby the Group/Company | |||||
| 16 Feb 2016 | 31 Dec 2015 | |||||||
| SouthEast Asia Mining Corp joint ventures | Thailand | Thailand | Option to acquire 75% | Option to acquire 75% | ||||
| Tiger Minerals Ltd | Thailand | Thailand | 10% | 10% | ||||
| Tiger Resources Ltd | Thailand | Thailand | 10% | 10% | ||||
| Investment in Joint Ventures | Cost of investment | Loan advances | Total | |||
| Group and Company | £ | £ | £ | |||
| At 31 December 2015 | 15,655 | 19,603 | 35,258 | |||
| Year ended 31 December 2015: | ||||||
| Additions in the year | 496,633 | 32,574 | 529,207 | |||
| Share of losses | (72,837) | — | (72,837) | |||
| Provisions | (83,089) | — | (83,089) | |||
| At 31 December 2015 | 356,362 | 52,177 | 408,539 | |||
| Year ended 31 December 2016: | ||||||
| Share of losses | (233,724) | - | (233,724) | |||
| Additions in the year | 1,251,812 | - | 1,251,812 | |||
| Provisions | (156,981) | - | (156,981) | |||
| Acquired as subsidiary undertaking | (119,867) | (52,177) | (172,044) | |||
| At 31 December 2016 | 1,097,602 | - | 1,097,602 |
The fair value of investments in joint ventures at the year end is considered by the Directors not to be materially different to the carrying amounts.
| Thailand – acquired joint venture interest | Cost of investment | Loan advances | Total | |||
| £ | £ | £ | ||||
| Year ended 1 January 2015: | 15,655 | 19,603 | 35,258 | |||
| Additions in the year | 104,406 | 32,574 | 136,980 | |||
| At 31 December 2015 | 120,061 | 52,177 | 172,238 | |||
| Year ended 31 December 2016: | ||||||
| Share of losses to 16 February 2016 | (194) | - | (194) | |||
| Acquired as subsidiary undertaking | (119,867) | (52,177) | (172,044) | |||
| At 31 December 2016 | - | - | - |
The results of the Thailand joint ventures for the year ended 31 December 2015 and the period to 16 February 2016 and the position of ventures at that those dates were as follows:
| 16 February 2016 | Full Year 2015 | |||
| £ | £ | |||
| Revenue | - | 18,920 | ||
| Operating costs | (1,939) | (40,640) | ||
| Loss before taxation | (1,939) | (21,720) | ||
| Tax on loss on ordinary activities | - | (700) | ||
| Loss and total comprehensive income for the period | (1,939) | (22,420) |
| £ | £ | |||
| Current assets | 15,855 | 24,713 | ||
| Current liabilities | (30,616) | (37,116) | ||
| Net assets | (14,761) | (12,403) |
| Boh Yai | Cost of investment | Loan advances | Total | |||
| £ | £ | £ | ||||
| At 31 December 2015 | - | - | - | |||
| Year ended 31 December 2016: | ||||||
| Additions | 730,702 | - | 730,702 | |||
| At 31 December 2016 | 730,702 | - | 730,702 |
The Boh Y ai joint venture has yet to start operations and the above amounts represent the cost of investment to the year end. The Group has an option to acquire 80% of the issued share capital of Boi Yai Mining Company Ltd. and a hire purchase with Karnchanaburi Exploration and Mining (Kemco) Company Limited to use plan and equipment at the mine site in Karnchanaburi Province, Thailand.
| Spain | Cost of investment | Loan advances | Total | |||
| £ | £ | £ | ||||
| Year ended 31 December 2015: | ||||||
| Additions in the year | 309,138 | - | 309,138 | |||
| Share of losses | (72,837) | - | (72,837) | |||
| At 31 December 2015 | 236,301 | - | 236,301 | |||
| Year ended 31 December 2016: | ||||||
| Share of losses | (233,530) | - | (233,530) | |||
| Additions in the year | 364,129 | - | 364,129 | |||
| At 31 December 2016 | 366,900 | - | 366,900 |
Metal Tiger's joint venture partner in Logrosán Minerals Ltd (“LML”) is Mineral Exploration Network (Finland) Ltd. LML owns 100 per cent of a subsidiary in Spain, Logrosán Minera S.L., which owns exploration licences in Logrosán, San Cristobal and Zorita in the Extremadura autonomous region of Spain for gold and tungsten which have not been valued in the above table. Metal Tiger acquired a further 28% of LML during the year and owns 50% of that company as at 31 December 2016.
The consolidated results and year end position of Logrosán Minerals Ltd and its subsidiary at 31 December 2016 and 31 December 2015 were as follows:
| 2016 | 2015 | |||
| £ | £ | |||
| Revenue | - | - | ||
| Operating costs | (467,059) | (260,131) | ||
| Loss before taxation | (467,059) | (260,131) | ||
| Tax on loss on ordinary activities | - | - | ||
| Loss and total comprehensive income for the year | (467,059) | (260,131) |
| £ | £ | |||
| Current assets | 4,118 | 18,488 | ||
| Current liabilities | (290,957) | - | ||
| Net assets | (286,890) | 18,488 |
| Tanzania and Russia | Cost of investment | Loan advances | Total | |||
| £ | £ | £ | ||||
| Year ended 31 December 2015: | ||||||
| Additions in the year | 83,089 | - | 83,089 | |||
| Provisions | (83,089) | - | (83,089) | |||
| At 31 December 2015 | - | - | - | |||
| Year ended 31 December 2016: | ||||||
| Additions in the year | 156,981 | - | 156,981 | |||
| Provisions | (156,981) | - | (156,981) | |||
| At 31 December 2016 | - | - | - |
The interests in these joint ventures have been surrendered since the year end for no consideration.
18 DIRECT EQUITIES DIVISION
INVESTMENTS
|
|
2016 |
2016 |
2015 | |||
| Group | Company | Company | ||||
| £ | £ | £ | ||||
| At 1 January – Investments at fair value | 692,949 | 692,949 | 885,500 | |||
| Acquisitions | 1,884,711 | 1,884,711 | 1,199,401 | |||
| Disposal proceeds | (1,153,399) | (1,153,399) | (1,812,359) | |||
| Gain on disposal of investments | 296,280 | 296,280 | 1,149,465 | |||
| Movement in fair value of investments | 2,346,830 | 2,346,830 | (729,058) | |||
| At 31 December – Investments at fair value | 4,067,371 | 4,067,371 | 692,949 | |||
| Categorised as: | ||||||
| Level 1 – Quoted investments | 2,470,724 | 2,470,724 | 524,293 | |||
| Level 2 – Unquoted investments | 50,000 | 50,000 | - | |||
| Level 3 – Unquoted investments - equity | 28,328 | 28,328 | - | |||
| Level 3 – Unquoted investments – share warrants | 1,518,319 | 1,518,319 | 168,656 | |||
| 4,067,371 | 4,067,371 | 692,949 |
The table of investments sets out the fair value measurements using the IFRS 13 fair value hierarchy. Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets;
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1;
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
The maximum credit risk as regards these investments is not considered to be materially different from the carrying value of those investments.
LEVEL 3 FINANCIAL ASSETS
Reconciliation of Level 3 fair value measurement of financial assets:
| 2016 | 2016 | 2015 | ||||
| Group | Company | Company | ||||
| £ | £ | £ | ||||
| At 1 January | 168,656 | 168,656 | 56,000 | |||
| Purchases | 554,980 | 554,980 | 130,286 | |||
| Transfer from level 1 | 28,328 | 28,328 | - | |||
| Warrants exercised | - | - | (56,000) | |||
| Movement in fair value | 794,683 | 794,683 | 38,370 | |||
| At 31 December | 1,546,647 | 1,546,647 | 168,656 |
Level 3 valuation techniques used by the Group are explained in note 2 (Fair value of investments). The following key input has been used in the valuation model: volatilities ranging between 56 per cent and 484 per cent depending on the investment (2015: 68% to 93%). A 20 per cent increase in the volatility estimate would result in a £104,000 increase in the fair value (2015: £120,000) and a 20 per cent decrease would result in a £161,000 decrease in fair value (2015: £62,000).
No value has been ascribed to certain warrants held by the Company as their exercise price is dependent on events outside the control of the Company and have outcomes which are unable to be predicted with any certainty. The number of such warrants held at the year end were as follows:
| Expiry date | Exercise price | Number | ||||
| ECR Minerals PLC (ECR.L) | 18 November 2018 | 8.0p | 2,500,000 | |||
| Ariana Resources plc (AAU.L) | 5 February 2018 | 1.8p | 8,333,333 | |||
| Ariana Resources plc (AAU.L) | 1 July 2018 | 1.8p | 8,333,333 |
19 TRADE AND OTHER RECEIVABLES
|
| ||||||
| 2016 | 2016 | 2015 | ||||
| Group | Company | Company | ||||
| £ | £ | £ | ||||
| Tax and social security | 256,011 | 141,524 | 44,442 | |||
| Other receivables | 410,706 | 347,630 | 47,017 | |||
| Prepayments and accrued income | 38,791 | 20,733 | 12,677 | |||
| Total | 705,508 | 509,887 | 104,136 | |||
The fair value of trade and other receivables is considered by the Directors not to be materially different to carrying amounts. Included in other receivables at 31 December 2016 is £345,000 in respect of share capital called up but not fully paid at the year arising from the placing made on 13 December 2016. This amount has been received in full since the year end. Also included in other receivables at 31 December 2015 and 31 December 2016 is an amount of £178,626 (2015: £178,626) which has been fully provided against.
20 CASH AND CASH EQUIVALENTS
| 2016 | 2016 | 2015 | ||||
| Group | Company | Company | ||||
|
| £ | £ | £ | |||
| Cash at investment brokers | 60,549 | 60,549 | 75,438 | |||
| Cash at bank | 1,329,235 | 1,321,566 | 278,443 | |||
| Cash and cash equivalents | 1,389,784 | 1,382,115 | 353,881 |
The fair value of cash and cash equivalents at 31 December 201 6 and 31 December 2015 is considered by the Directors not to be materially different to carrying amounts.
21 TRADE AND OTHER PAYABLES
|
| ||||||
| 2016 | 2016 | 2015 | ||||
| Group | Company | Company | ||||
| £ | £ | £ | ||||
| Trade payables | 224,447 | 224,099 | 24,133 | |||
| Tax and social security | 36,757 | 34,722 | 6,402 | |||
| Other payables | 47,875 | 40,122 | 11,398 | |||
| Accrued charges | 129,933 | 30,624 | 50,700 | |||
| Total | 439,012 | 329,557 | 92,633 | |||
The fair value of trade and other payables is considered by the Directors not to be materially different to carrying amounts.
22 LOANS AND BORROWINGS
| 2016 | 2016 | 2015 | ||||
| Group | Company | Company | ||||
| £ | £ | £ | ||||
| At 1 January | - | - | - | |||
| Acquired with subsidiary | 41,910 | - | - | |||
| Translation differences | 6,465 | - | - | |||
| At 31 December | 48,375 | - | - |
The loan is non-interest bearing and is repayable on demand.
23 SHARE CAPITAL
|
| Number of shares | Share capital | Share | |||||||
| CALLED UP, ISSUED AND FULLY PAID | Ordinary | Deferred | Ordinary | Deferred | premium | |||||
| £ | £ | £ | ||||||||
| At 1 January 2015 | 250,372,466 | 61,905,803 | 25,038 | 612,867 | 3,700,918 | |||||
| Restatement (see note 24) | - | - | - | - | (145,111) | |||||
| Share issues | 124,253,329 | - | 12,425 | - | 769,989 | |||||
| Share issue costs | - | - | - | - | (42,000) | |||||
| At 31 December 2015 | 374,625,795 | 61,905,803 | 37,463 | 612,867 | 4,283,196 | |||||
| Share issues | 400,029,385 | - | 40,003 | - | 6,198,207 | |||||
| Warrant reserve released | - | - | - | - | 373,019 | |||||
| Share issue costs | - | - | - | - | (148,163) | |||||
| Capital reduction | - | (61,905,803) | - | (612,867) | (9,431,609) | |||||
| At 31 December 2016 | 774,655,180 | - | 77,466 | - | 1,274,650 | |||||
The amount standing to the credit of the share premium on 21 December 2016 together with the deferred share capital of the Company was cancelled on application to High Court on 21 December 2016 and has been offset against the retained equity losses of the Company. The deferred shares had restricted rights such that they had no economic value and arose as a result of a share reorganisation on 16 June 2014.
SHARE ISSUES
The following issues of ordinary shares of 1p took place during the year:
| Date | Issue price(p) | Number issued | Amount gross£ | |||||
| 25 January 2016 | Placing | 0.800 | 40,125,000 | 321,000 | ||||
| 30 March 2016 | Subscription | 2.750 | 4,815,667 | 132,431 | ||||
| 26 April 2016 | Placing | 4.500 | 22,222,218 | 1,000,000 | ||||
| 17 August 2016 | Placing | 3.850 | 28,571,428 | 1,100,000 | ||||
| 13 December 2016 | Placing | 1.500 | 105,999,988 | 1,590,000 | ||||
| Various dates | For professional and other fees | 1.616* | 13,523,651 | 218,571 | ||||
| Various dates | For payment of other costs relating to Metal Projects division | 4.222* | 9,860,919 | 416,333 | ||||
| 16 February 2016 | Acquisition of Thai interests (see note 14) | 0.900 | 23,799,000 | 214,191 | ||||
| 29 April 2016 | Acquisition of investments in the Direct Equities Division | 5.500 | 1,818,182 | 150,000 | ||||
| Various dates | Warrants exercised (see note 24) | 1.357* | 142,958,332 | 1,940,000 | ||||
| Various dates | Options exercised (see note 24) | 1.737* | 6,335,000 | 110,025 | ||||
| 400,029,385 | 7,192,551 |
* Average price.
Details of warrants issued with each of the above placings are given in note 24.
The total amount raised was allocated as follows:
| £ | ||
| Share capital | 40,003 | |
| Share premium | 5,835,328 | |
| Warrant reserve | 1,317,220 | |
| Total | 7,192,551 |
Details of share issues since the year end are given in note 28.
Share issues in the year ended 31 December 2015 were as follows:
| Date | Issueprice(p) | Number issued | Amount raised,gross£ | |||||
| 23 April 2015 | Placing | 0.875 | 19,999,996 | 175,000 | ||||
| 23 June 2015 | Placing | 0.900 | 33,333,333 | 300,000 | ||||
| 10 July 2015 | Exercise of share options | 1.000 | 4,670,000 | 46,700 | ||||
| 3 November 2015 | Placing | 0.800 | 36,250,000 | 290,000 | ||||
| 14 December 2015 | Placing | 0.800 | 30,000,000 | 240,000 | ||||
| 124,253,329 | 1,051,700 |
The total amount raised was allocated as follows:
| £ | ||
| Share capital | 12,425 | |
| Share premium | 769,989 | |
| Warrant reserve | 269,286 | |
| Total | 1,051,700 |
24 SHARE OPTIONS AND WARRANTS
SHARE OPTIONS
| 2016 | 2015 | |||||||
| Number | Weightedaverageexercise price(p) | Number | Weightedaverageexercise price(p) | |||||
| At 1 January | 25,335,000 | 1.74 | 11,675,000 | 1.14 | ||||
| Issued in year | 34,700,000 | 2.47 | 18,330,000 | 1.95 | ||||
| Exercised in year | (6,335,000) | 1.74 | (4,670,000) | 1.11 | ||||
| Cancelled or expired in year | (5,000,000) | 7.50 | - | - | ||||
| At 31 December | 48,700,000 | 2.05 | 25,335,000 | 1.74 | ||||
| Average life remaining at31 December | 2.96 years | 2.35 years | ||||||
All options were able to be exercised at the year end.
The Company established new share option schemes during the year to enable Directors and staff to subscribe for ordinary shares in the Company. The fair values of the options granted were determined using the Black-Scholes pricing model. The significant inputs to the model in respect of the options were as follows:
| Directorsand staffnon-EMIscheme | Directors and staff EMIscheme | Directors and staff non-EMIscheme | ||||||||
| Grant date | 3 March 2016 | 22 June 2016 | 22 June 2016 | 19 August 2016 | 19 August 2016 | |||||
| Vesting date | 3 March 2016 | 22 June 2016 | 22 June 2016 | 19 Nov 2016 | 19 August 2017 | |||||
| Share price at date of grant | 1.175p | 3.250p | 3.250p | 4.030p | 4.030p | |||||
| Exercise price per share | 2.00p | 1.70p | 2.00p | 7.50p | 2.00p | |||||
| No. of options | 10,000,000 | 7,500,000 | 5,750,000 | 5,000,000 | 6,450,000 | |||||
| Risk free rate | 1% | 1% | 1% | 1% | 1% | |||||
| Expected volatility | 87% | 98% | 98% | 95% | 95% | |||||
| Life of option | 3 years | 3 years | 3 years | 3.25 years | 3 years | |||||
| Calculated fair value per share option | 0.507p | 2.365p | 2.275p | 1.970p | 0.770p | |||||
The 5,000,000 options issued under the 19 August 2016 7.50p scheme lapsed during the year.
The following schemes remain in existence from prior years:
| Directors | Directors | Directors | Directors | |||||
| Grant date | 11 July 2014 | 15 December 2014 | 3 July 2015 | 3 July 2015 | ||||
| Share price at date of grant | 0.5p | 0.8p | 0.95p | 0.95p | ||||
| Exercise price per share | 1.0p | 1.5p | 1.75p | 2.00p | ||||
| No. of options originally granted | 8,340,000 | 3,350,000 | 3,330,000 | 15,000,000 | ||||
| Risk free rate | 1.2% | 0.7% | 2% | 2% | ||||
| Expected volatility | 67% | 107% | 100% | 100% | ||||
| Life of option | 3 years | 3 years | 3 years | 3 years | ||||
| Calculated fair value per share option | 0.131p | 0.426p | 0.48p | 0.45p |
Options outstanding to Directors at 31 December 2016 are as follows:
Current Directors at the year end:
| Exerciseprice(p) | At1 JanuaryNumber | Held onappoint-mentNumber | GrantedNumber | ExercisedNumber | At31 DecemberNumber | |||||||
| Terry Grammer | 1.50 | 3,335,000 | - | - | (3,335,000) | - | ||||||
| 2.00 | 3,330,000 | - | - | - | 3,330,000 | |||||||
| Paul Johnson | 1.75 | 3,330,000 | - | - | - | 3,330,000 | ||||||
| 1.70 | - | - | 7,500,000 | - | 7,500,000 | |||||||
| 2.00 | 5,000,000 | - | - | - | 5,000,000 | |||||||
| 2.00 | - | - | 5,000,000 | (3,000,000) | 2,000,000 | |||||||
| Michael McNeilly | 2.00 | - | 2,000,000 | - | - | 2,000,000 | ||||||
| Keith Springall | 2.00 | - | 2,500,000 | - | - | 2,500,000 | ||||||
| 14,995,000 | 4,500,000 | 12,500,000 | (6,335,000) | 25,660,000 |
Directors ceasing during the year in respect of their period as Directors:
| Exerciseprice(p) | At1 JanuaryNumber | Held onappoint-mentNumber | GrantedNumber | ExpiredorCancelledNumber | Held oncessationas DirectorNumber | |||||||
| Alex Borelli | 1.00 | 1,670,000 | - | - | - | 1,670,000 | ||||||
| 2.00 | 1,170,000 | - | - | - | 1,170,000 | |||||||
| Cameron Parry | 1.00 | 2,500,000 | - | 3,000,000 | - | 5,500,000 | ||||||
| 2.00 | 5,000,000 | - | - | - | 5,000,000 | |||||||
| Jordan Luckett | 7.50 | - | 5,000,000 | - | (5,000,000) | - | ||||||
| 10,340,000 | 5,000,000 | 3,000,000 | (5,000,000) | 13,340,000 |
The total share based payment expense recognised in the income statement for the year ended 31 December 2016 in respect of options granted was £475,740 (2015: £83,701). The weighted average contractual life of options outstanding at the year end is 3.0 years (2015: 2.4 years).
Further details of options issued since the year end are given in note 28.
WARRANTS
| 2016 | 2015 | |||||||
| Number | Weightedaverageexercise price(p) | Number | Weightedaverageexercise price(p) | |||||
| At 1 January as previously stated | 123,583,329 | 1.675 | 4,000,000 | 1.500 | ||||
| Restatement (see below) | 101,905,803 | 101,905,803 | ||||||
| At 1 January - restated | 225,489,132 | 1.007 | 105,905,803 | 0.246 | ||||
| Issued in year | 225,533,301 | 3.320 | 119,583,329 | 1.681 | ||||
| Exercised in year | (142,958,329) | (1.357) | - | - | ||||
| At 31 December | 308,064,104 | 2.472 | 225,489,132 | 1.007 | ||||
| Exerciseable at 31 December | 246,158,301 | 3.023 | 123,583,329 | 1.675 | ||||
| Average life remaining at31 December | 1.2 years | 1.8 years | ||||||
On 16 June 2014 40,000,000 warrants, with a three year life and an exercise price of 0.5p per warrant (“Black Star warrants”), were issued to a third party in respect of fees connected with the issue of ordinary shares in the year. No value was attributed to the warrants at the time and no warrant reserve established. In addition, 61,905,803 warrants were issued at the same date, with a five year life (“Brady warrants”). The Brady warrants have an exercise price equivalent to the nominal value of the Company’s ordinary shares but the number that may be exercised is dependent on the Company’s share price on the 30 days prior to the receipt of certain funds by the Company. None of the Brady warrants were exercisable at 31 December 2015 or 31 December 2016 as the relevant condition had not been met.
The financial statements have been restated to reflect the additional warrants in the number of outstanding warrants and, in the case of the Black Star warrants, to transfer £145,711 from the share premium account to the warrant reserve. The Black Star warrants were exercised on 13 October 2016 and the equivalent amount re-credited to the share premium account from the warrant reserve on that date.
The fair value of the Black Star warrants was determined using the Black-Scholes pricing model. The inputs to the model were as follows:
| Date of issue | 16 June 2014 | |
| Share price at date of grant | 0.625p | |
| Exercise price per share | 0.500p | |
| Risk free rate | 1% | |
| Expected volatility | 82% | |
| Life of warrants | 3 years | |
| Calculated fair value per share warrant | 0.364p |
Warrants were issued during the year ended 31 December 2016 in connection with the following:
| Number issued | ||
| Placing of the Company’s ordinary shares, as detailed in note 23 and charged as a component of equity | 201,734,301 | |
| Acquisition of the Group’s interests in Thailand (see note 14) | 23,799,000 | |
| 225,533,301 |
WARRANTS ISSUED AS A COMPONENT OF EQUITY
| Date of grant | Issueprice(p) | Number issued | Expires | |||||
| 25 January 2016 | Placing | 1.600 | 40,125,000 | 14 August 2017 | ||||
| 30 March 2016 | Placing | 5.500 | 4,815,667 | 13 October 2017 | ||||
| 26 April 2016 | Placing | 9.000 | 22,222,218 | 10 May 2017 | ||||
| 17 August 2016 | Placing | 7.700 | 28,571,428 | 1 September 2017 | ||||
| 13 December 2016 | Placing | 1.500 | 105,999,988 | 12 December 2017 | ||||
| Charged as a component of equity | 201,734,301 | |||||||
The allocation of the consideration received for the issue of shares and warrants in the year is set out in note 23. The fair values of the warrants have been determined using the Black-Scholes pricing model. The significant inputs to the model were as follows:
| Date of grant | 25 January2016 | 30 March2016 | 26 April2016 | 17 August2016 | 13 December2016 | |||||
| Share price at date of grant | 0.825p | 3.55p | 4.675p | 4.0p | 1.52p | |||||
| Exercise price per share | 1.6p | 5.5p | 9.0p | 7.7p | 2.0p | |||||
| Risk free rate | 1% | 1% | 1% | 1% | 1% | |||||
| Expected volatility | 83% | 96% | 100% | 89% | 88% | |||||
| Life of warrants | 1.5 years | 1.5 years | 1 year | 1 year | 1 year | |||||
| Calculated fair value per share warrant | 0.178p | 1.183p | 0.990p | 0.664p | 0.392p |
Details of those warrants exercised since the year end are given in note 28.
WARRANTS ISSUED IN CONNECTION WITH THE ACQUSITION OF SUBSIDARIES
| Date | Issueprice(p) | Number issued | Expires | |||||
| 19 February 2016 | 1.7400 | 23,799,000 | 2 October 2018 | |||||
| Capitalised as part of cost of acquisition | 23,799,000 | |||||||
The fair values of the warrants have been determined using the Black-Scholes pricing model. The significant inputs to the model were as follows:
| Date of grant | 19 February2016 | |
| Share price at date of grant | 1.05p | |
| Exercise price per share | 1.74p | |
| Risk free rate | 1% | |
| Expected volatility | 81% | |
| Life of warrants | 2.5 years | |
| Calculated fair value per share warrant | 0.384p |
The transfer between the warrant reserve and share premium account arises as a result of the issue of ordinary shares on the exercise of warrants during the year to recognise the original cost of the warrants as a cost of the share issue.
25 FINANCIAL INSTRUMENTS
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of debt and equity funding. Currently the Company’s capital structure consists entirely of shareholders’ equity, comprising issued share capital and reserves.
The Company uses financial instruments, other than derivatives, comprising cash to provide funding for its operations.
The main risks arising from the Company’s financial instruments are credit risk, liquidity risk and foreign exchange risk. The Company does not have any significant other risks. The Directors agree policies for managing these risks and they are summarised below.
CREDIT RISK
The Group's exposure to credit risk is limited to the carrying amounts of trade and other receivables, and cash and cash equivalents recognised at the balance sheet date, as follows:
| 2016£ | 2015£ | |||
| Trade and other receivables | 410,706 | 47,017 | ||
| Cash and cash equivalents | 1,389,784 | 353,881 | ||
|
| 1,800,490 | 400,898 |
The Group's management considers that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due.
No impairment provision was required against trade and other receivables in the year (2015: none). None of the Company's financial assets are secured by collateral or other credit enhancements.
The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high quality external credit ratings. Of the amount shown at 31 December 2016 in respect of trade and other receivables, £345,000 arises in respect of share capital called up but not fully paid at the year end and which was subsequently received in full.
LIQUIDITY RISK
The Group makes both short term and long term investments. Short term investments are all quoted investments and such investments may be sold to meet the Group’s funding requirements. However, the market in small capitalised companies can be illiquid. Long term investments are joint ventures through unquoted investment vehicles and are subject to greater liquidity risk. Directors perform extensive due diligence prior to investment.
As the Group has no significant interest bearing assets, the Group's income and operating cash flows are substantially independent of changes in market interest rates.
The following table shows the contractual maturities of the Group's financial liabilities, including repayments of both principal and interest where applicable:
|
| 2016 £ | 2015 £ | ||
| Six months or less: | ||||
| Trade and other payables | 309,079 | 41,933 | ||
| Loans and borrowings | 48,375 | - | ||
| Total contractual cash flows | 357,454 | 41,933 |
MARKET RISK
The Company is exposed to market risk as a result of investing in listed resource companies. The fair value of each investment will fluctuate as a result of factors specific to the investment. The Company actively reviews its portfolio of investments to manage this risk. An increase of 10% in the valuation of investments held at the year end would increase the profit before tax for the year by £406,737 (2014: £52,429).
FOREIGN CURRENCY RISK
The Group is exposed to movements in exchange rates in respect of its overseas subsidiaries and investments.
The following table illustrates the sensitivity of the value of investments in investments joint ventures with regard to these exchange rates.
| CHANGE IN EQUITY | 2016£ | 2015£ | ||
| 5% Increase in AUD fx rate against GBP | (85,051) | n/a | ||
| 5% Decrease in AUD fx rate against GBP | 86,501 | n/a | ||
| 5% Increase in BWP fx rate against GBP | 33,456 | 3,072 | ||
| 5% Decrease in BWP fx rate against GBP | (30,270) | (2,780) | ||
| 5% Increase in EUR fx rate against GBP | 19,311 | 12,384 | ||
| 5% Decrease in UR fx rate against GBP | (17,471) | (11,205) | ||
| 5% Increase in THB fx rate against GBP | 5,854 | 2,340 | ||
| 5% Decrease in THB fx rate against GBP | (5,287) | (2,340) |
Exposure to foreign exchange rates varies during the year depending on the volume and nature of foreign transactions. Nonetheless, the analysis above is considered to be representative of the Company’s exposure to currency risk.
CATEGORIES OF FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
The IAS 39 categories of financial asset included in the Statement of Financial Position and the headings in which they are included are as follows:
| 2016 | 2015 | |||
| £ | £ | |||
| HELD AT AMORISED COST | ||||
| Cash and bank balances | 1,389,784 | 353,881 | ||
| Loans and receivables | 666,717 | 91,459 | ||
| HELD AT FAIR VALUE | ||||
| Direct Equities Division investments | 4,067,371 | 692,949 |
FINANCIAL LIABILITIES HELD AT AMORTISED COST
The IAS 39 categories of financial liabilities included in the Statement of Financial Position and the headings in which they are included are as follows:
| 2016 | 2015 | |||
| £ | £ | |||
| Trade and other payables | 439,012 | 92,633 | ||
| Loans and borrowings | 48,375 | - |
26 RELATED PARTY TRANSACTIONS
GROUP AND PARENT COMPANY
A list of significant shareholders is included in the Report of the Directors. No ultimate controlling party has been identified by the Directors.
Details of the Directors’ remuneration and consultancy fees are disclosed in note 6 and share options granted to Directors are disclosed in note 24. In the opinion of the Board, only the Directors of the parent Company fall to be regarded as key employees.
At 31 December 2015 an amount of £10,000 was owed by Terry Grammer to the Group. The maximum amount outstanding during that year was £10,000. No amounts were owed by any Director to the Group at 31 December 2016.
The following amounts were owed by the Group to Directors at the year end in respect of expenses and outstanding salaries:
| 2016 | ||
| £ | ||
| Terry Grammer | 12,701 | |
| Paul Johnson | 3,714 | |
| Charles Hall | 3,077 |
No amounts we re outstanding by the Group to Directors at 31 December 2015.
Details of transactions with associates and joint ventures are given in notes 16 and 17 respectively.
PARENT COMPANY TRANSACTIONS WITH SUBSIDIARIES
The Company has funded the operations of subsidiaries during the year. All transactions have been undertaken at arm’s length.
| At 31 December 2016 | ||||
| Amounts due to theCompany | Amounts due bythe Company | |||
| Subsidiary | £ | £ | ||
| Metal Horse Limited | - | - | ||
| Metal Partners Co Ltd. | 2,653 | - | ||
| Metal Tiger Exploration and Mining Co Ltd. | 505,934 | - | ||
| Metal Tiger IHQ Co. Ltd. | 211,316 | - | ||
| Metal Ventures Co Ltd. | - | - | ||
| Metal Group Co. Ltd. | 219,942 | - | ||
| Metal Holdings Co. Ltd. | 30,238 | - | ||
| Metal Tiger Resources Co. Ltd. | 32,239 | - | ||
| Metal Tiger Australia Pty. Ltd. | - | 59 | ||
| 1,002,322 | 59 | |||
Amounts due to and from subsidiary companies included within current assets and current liabilities are repayable on demand and are interest free.
27 OPERATING LEASE COMMITMENTS
At the year end the Group and the Company had the following outstanding commitments for future minimum lease payments under a non-cancellable lease, in respect of office premises, that fall due as follows:
|
| 2016Group£ | 2016Company£ | 2015Company£ | |||
| Within 1 year | 20,250 | - | 15,000 | |||
| Within 2-3 years | 30,375 | - | - | |||
| Total | 50,625 | - | 15,000 |
28 POST YEAR END EVENTS
PROPOSED DISPOSAL OF EQUITY INTERESTS IN THAILAND
On 11 February 2017, the Company announced that it had commenced an IPO process with regard to seeking admission to AIM of its interests in Thailand.
SHARE AND WARRANT ISSUES
On 21 April 2017, the Company announced the placing of 161,666,666 new ordinary shares in the Company at a placing price of 3p per ordinary share, raising gross proceeds of £4,850,000 together with the issue of 161,666,666 warrants to subscribe for 161,666,666 new ordinary shares in the Company at an exercise price of 6p per warrant, within a five year exercise period.
In addition, 4,850,000 Finder Warrants were issued in connection with the placing. Each Finder Warrant permits the purchase of one warrant for five years at a price of 3p per unit. Upon exercise of a Finder Warrant, the holder will be entitled, on a 1 for 1 basis, to a 6p warrant with a five year validity.
The net proceeds of this offering will be used to fund Metal Tiger’s portion of its commitment to 2017 budget for its joint venture project with partner MOD Resources (ASX:MOD) in the Kalahari Copper Belt in Botswana (30% Metal Tiger / 70% MOD Resources) as well as for working capital and general corporate purposes.
In addition a further 690,886 ordinary shares have been issued since the year end in settlement of various fees payable by the Company.
SHARE OPTIONS ISSUED
On 18 January 2017, the Company issued 26,500,000 options over ordinary shares to Directors of the Company. The options vest immediately on grant but are only exercisable whilst the Director is employed by the Company and expire on 18 January 2020. The options are exercisable at the following prices:
| Price(p) | Number | |
| 3.00 | 26,000,000 | |
| 2.00 | 500,000 |
On 11 May 2017, the Company issued 33,000,000 options over ordinary shares to Directors of the Company with an exercise price of 6p per option. The options vest immediately on grant but are only exercisable whilst the Director remains in the employment of the Company or any time after 12 months’ service from the vesting date. The options expire on 11 May 2022.
WARRANT CONVERSIONS AND SHARE OPTIONS EXERCISED
Warrant conversions and share options exercised since the year end and up to 29 June 2017, have been as follows:
| Price(p) | WarrantsexercisedNumber | Amountraised£ | New sharesissuedNumber | |||
| 1.60 | 8,875,000 | 142,000 | 8,875,000 | |||
| 2.00 | 16,466,663 | 329,333 | 16,466,663 | |||
| 23,341,663 | 471,333 | 25,341,663 |
| Price(p) | OptionsexercisedNumber | Amountraised£ | New sharesissuedNumber | |||
| 1.00 | 1,170,000 | 11,700 | 1,170,000 | |||
| 1,170,000 | 11,700 | 1,170,000 |
On 30 May 2017, the Company announced the extension of the expiry dates of 30,000,000 1.6p warrants granted to Terry Grammer, a non-Executive Director, which were due to expire on 22 June 2017 to 22 June 2018.
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