ROSE.L Regulatory News (ROSE)

Rose Petroleum plc ("Rose", the "Company" or the "Group")

Final results and notice of AGM

Rose Petroleum plc, the AIM-listed (AIM: ROSE) natural resources company, is pleased to announce its audited results for the year ended 31 December 2014 together with notice of its Annual General Meeting ("AGM").

HIGHLIGHTS

• The Group's key focus continues to be its 75% working interest in over 263,000 gross acres of two very exciting unconventional opportunities in the Uinta and Paradox basins, in Utah, U.S.A.

• Independent consultants, Ryder Scott Company LP have calculated potential resources of 1.8 billion barrels of oil and 6.5 trillion cubic feet of gas across both basins in Mean Un-Risked Recoverable Prospective Resources

• During the year, the Group completed the purchase of the producing Cisco Dome Field with 76 mile mid-stream gathering system, gas processing plant, compressor station and main pipeline tap and meter into Williams 26" natural gas pipeline

• Drilled first well, the State 1-34 well, in the Uinta basin

• The results from core samples taken from the State 1-34 well post year exceed the parameters used by Ryder Scott in their resource estimate calculations which substantiates the resource base

• Six further Mancos wells currently being prepared for permitting to drill - subject to permitting, drilling of first well expected to commence in late 2015

• Commencement of permitting programme for 61sq mile 3-D seismic shoot in the Paradox basin

• Mining commenced on the Mina Charay gold/silver project in Mexico - positive contribution to revenues anticipated in 2015 as mine moves into full production post period

Richard Kilmorey, Group Chairman, commented: "2014, and the period since, have been a time of sustained progress and intense activity for Rose. We have made important advances across our asset portfolio and we look forward to keeping the market updated with news on our future progress. I have full confidence in our highly competent operations team to deliver the utmost value from our asset portfolio throughout 2015 and beyond."

Rose also announces that the Annual General Meeting of the Company will be held at the offices of Allenby Capital Limited, 3 St Helen's Place, London, EC3A 6AB at 10.00 am on 30 June 2015. The Company's Annual Report and Accounts will be posted to shareholders shortly and will be available to view and download on the Company's website at www.rosepetroleum.com in accordance with AIM Rule 20.

**ENDS**

For further information please visit www.rosepetroleum.com or contact:

CHAIRMAN'S STATEMENT

My statement in last year's Annual Report outlined that your Board had begun to shift the direction and focus of the Group away from mining and towards oil and gas ("O&G") exploration and production, and that we had built a strong momentum to implement this strategy.

This momentum has continued both throughout the year under review and into 2015, and the Group continues to make sustained progress in spite of the challenging market conditions that continue to impact both the junior end of the market and, more specifically, the O&G industry.

Operational activity has continued on many fronts. The O&G division is operating a very large leasehold acreage in two very exciting unconventional opportunities in Utah which have significant potential resources as calculated by our independent qualified person, Ryder Scott Company LP. We have drilled our first well and we have assembled a very strong management and technical team with extensive experience in the region to move our operations forward. The Mining division commenced operations at the Mina Charay gold and silver project and we are scheduled to commence drilling on the Tango copper and molybdenum project in Q4 2015, after the rainy season has ended. In Q1 2015, we completed the disposal of the Wate Uranium project and this activity is helping move the Group forward to a situation where it can deliver on its key corporate objectives.

During the year we carried out two successful equity placings which raised gross proceeds of £10 million and, in May 2015, we announced that we had raised additional gross proceeds of £3.1 million by way of a conditional placing and subscription which is conditional upon shareholder approval at a forthcoming General Meeting. In the current market environment, this is a considerable achievement and a strong endorsement of the Group's new strategy. The executive team, led by Matthew Idiens, was pleased by the response they received during the fundraising presentations which is a good indicator of the value that the market places on our O&G properties.

In order to achieve the highest level of success in our Utah projects it was essential to build an experienced operations team, the importance of which cannot be underestimated, and I want to emphasise the significant experience the team has in the U.S. unconventional resources sector including operating in the Bakken, Marcellus, Niobrara and Arkansas-Fayetteville Shale. The team are based at our office in Denver under the strong leadership of Ty Watson. Ty has worked across the vast majority of the premiere basins in the U.S., and, most importantly he has a track record of transforming historic vertical well plays into more efficient horizontal well plays which we anticipate will be of significant value to us in respect of the Mancos Shale opportunity.

Operations in Utah commenced in earnest during the year under review, and although we suffered some setbacks in the completion of the State 16-42 well in the Paradox Basin (where the cement casing of the previous well owner was inadequate), and the conventional target at the State 1-34 well in the Uinta Basin (where we were not able to capitalise on a potential cash generating conventional opportunity as a result of the existence of a fault), the main focus of the Uinta basin is the Mancos Shale and the results from the core have been extremely encouraging and look to be validating the key criteria used by Ryder Scott in their calculation of the resources. We believe that we are very well positioned for future development and growth. Our work to date on the Mancos Shale, the prime operational focus, has yielded a considerable amount of supporting technical information on the opportunity, and this will be our key focus over the next period. We are currently in the process of permitting six well locations and we look forward to commencing drilling on the first of these as soon as we are able.

The prospectivity of our Paradox acreage is very significant but, by virtue of the costs of drilling in this area (circa US$8.5 million per well) and the need to undertake a 3-D seismic survey of the area prior to drilling, the drilling targets at the Mancos remain our initial target. The encouraging results from the core analysis on the Mancos Shale, reiterates the strong potential of the Mancos, which benefits from a low breakeven price considering the excellent infrastructure and low entry price.

As outlined above, we have now commenced mining at the Mina Charay Mine in Mexico, in which we have a 60% profit share arrangement in favour of the Group. The mine is nearing target operational capacity and development is currently advancing towards the high-grade gold and silver drill intercepts in the veins. We anticipate that this project will make a positive contribution to the Group's revenue in 2015.

During this period of transformation, cash management and internal control have remained key priorities for the Group and I was delighted to welcome Chris Eadie to the Board as Chief Financial Officer in early 2015.

I would like to thank our shareholders and advisers for their continuing support throughout the period and our employees for their continued efforts. I look forward to updating you with our progress throughout the rest of the year.

Rt Hon Earl of Kilmorey PC

3 June 2015

STRATEGIC REVIEW

The Directors present their strategic report on the Group for the year ended 31 December 2014.

Rose Petroleum plc is a diversified O&G and Mining Company with both exploration and production assets. The key strategic objective is to deliver shareholder returns through the enhancement of these assets.

This key objective will be achieved by various strategies:

· continuing development of a Board consisting of highly experienced professionals covering O&G, mineral exploration, mine development, financing and financial control of public companies;

· strong and experienced management teams to maximise returns from the Company's underlying O&G and Mining assets;

· the potential acquisition of further O&G and Mining interests through acquisition, farm-in agreements and joint arrangements; and

· consideration of the capital and financing required to achieve our objectives and market perception.

The Company's Annual Report for 2013 stated the Group's intention to focus its activity primarily in the O&G sector. More specifically, it intended to do so with a significant transaction in the U.S. unconventional resource arena. This strategy was fully realised in 2014.

In Q1 2014, the Group entered into an agreement under which it is able to earn into a 75% interest in approximately 230,000 gross acres in Utah. Throughout the remainder of 2014 and continuing into Q1 2015, the Group has added additional gross acres bringing the Group's current total gross leasehold position to over 263,000 gross acres.

The acreage is located in two highly prospective adjacent basins, the Uinta Basin and the Paradox Basin, with two separate target formations. The focus of exploration is on two unconventional O&G resource plays. The Uinta Basin targets the Mancos Shale at a maximum depth of approximately 3,200ft, and the Paradox Basin targets the Paradox Clastics at a maximum depth of approximately 10,500ft. Under the terms of the agreement the Group carries the seller, Rockies Standard Oil Company LLC, who retain a 25% interest in the leasehold, for the first US$17 million spend on the projects, US$9.5 million in the Uinta Basin and US$7.5 million in the Paradox Basin.

Production is well established around both the Mancos and the Paradox acreage. The leading operator to date in the Paradox play is Fidelity Exploration and Production Company ("Fidelity") which is a wholly owned subsidiary of MDU Resources Group (NYSE: MDU). Since 2012, Fidelity has taken production from the Paradox Clastics from less than 100 barrels of oil per day ("BOPD") to over 4,500 BOPD on their acreage to the south of the Group's leasehold.

The Mancos, which is stratigraphically equivalent to the Niobrara in north-eastern Colorado and to the Eagle Ford in south Texas, produces from hundreds of wells in Utah. Most of the Mancos production is in the gas window of the Uinta Basin where the Mancos has produced over 1.5 trillion feet of cubic gas ("TCFG"). The Group's Mancos acreage is in the O&G condensate window of the Uinta Basin with individual vertical wells having produced as much as 120,000 barrels of oil ("BO").

In early Q2 2014, Ryder Scott Company LP completed a Reserve Report on the Utah leasehold which was subsequently updated in Q4 2014, to include the additional leasehold that had been acquired. Based on the current Reserve Report, the Group's Mean Un-Risked Recoverable Prospective Resources total 1.8 billion BO and 6.5 TCFG, as illustrated in tables 1 and 2 below:

Table 1: Estimated 100% Gross Volumes Unrisked Undiscovered Original Hydrocarbon In-Place (OOIP & OGIP) in the Mancos Shale (Uinta Basin) and Paradox Formation (Paradox Basin):

(MMBO = million barrels oil, BCFG = billion cubic feet gas)

Table 2: Estimated 100% Gross Volumes Unrisked Prospective Recoverable Hydrocarbon Resources (Estimated Ultimate Recoverable Reserves -EUR) in the Mancos Shale (Uinta Basin) and Paradox Formation (Paradox Basin):

(Full Report available on the website: www.rosepetroleum.com)

In Q4 2014, the Group made an important add-on acquisition with the purchase of the Cisco Dome Field, 76 miles of mid-stream gathering system, gas processing plant, compressor station and main pipeline tap and meter into Williams 26" natural gas pipeline. This asset acquisition gives the Group some minimal cash flow from existing production and the associated proven reserves but, most significantly, added over 11,000 acres in the heart of the Group's Mancos holdings and control of our own mid-stream gathering and processing in the area.

In Q3 2014, the Group began permitting a 61 square mile 3-D seismic survey over its Paradox leasehold. Pending completion of permitting and the availability of sufficient funding, the Group hopes to begin the survey in Q4 2015. Once the seismic data is in-hand and interpreted, the Group will select its first Paradox well location with plans to begin drilling operations in H2 2016.

As part of the Group's initial acreage acquisition, it acquired an interest in an existing Paradox well, the State 16-42, which had been drilled, logged and cased. In Q4 2014, the Group attempted to complete the well, to test the various Clastics, but unfortunately the casing cement bond in the well bore was not sufficient to enable a successful completion.

In Q4 2014, the Group spudded the State 1-34 well on its Mancos acreage. The well was designed primarily to evaluate the Mancos Shale as well as the deeper conventional reservoirs that produce from over 400 wells in the area. The well was successfully drilled to 3,200ft total depth and mud logs indicated the presence of O&G throughout both the Mancos Shale and conventional sands. Well logs, conventional cores and side wall cores were taken across the Mancos and deeper conventional reservoirs.

Two whole cores were taken and analysed in the Mancos with extremely encouraging results reiterating the potential of this opportunity which benefits from a low breakeven price when considering the excellent infrastructure and low entry price. The core results matched or surpassed Ryder Scott's parameters for the Mancos Shale resource calculation of 709MMBO and 4.26 TCF gas for key criteria. Specifically:

· Total Organic Content ("TOC") used by Ryder Scott were 1.5-2%. The State 1-34 has an average background of 1.5-2% with a 150' "kitchen" interval in the Ferron member of TOC over 2.75% and up to 4.5%;

· potential target reservoir or "carrier" beds identified in the same four Ryder Scott defined Mancos intervals with porosities in the 6-9% range;

· state 1-34 average porosities 0.5-1% higher than Ryder Scott study (P50 values);

· state 1-34 hydrocarbon (oil) saturations both in core and in situ are in line with the Ryder Scott study;

· net potential "carrier" beds to Gross ratios are comparable with Ryder Scott; and

· Thermal maturity ("Tmax") confirms that the State 1-34 is within the "Intensive Generation Expulsion" window for the Ferron member.

In consideration of the potential for quick revenue and cash flows from the conventional opportunity, it was decided to carry out a completion on the conventional intervals below the Mancos. Four intervals were perforated and flow tested and none were deemed to be commercial by virtue of intersection of vertical fault breached with water. The well is currently shut-in pending completion of the Mancos core analysis, which was the primary objective of this well.

On the basis of the work undertaken on the State 1-34 well, the Group has begun the permitting application process in relation to six new Mancos wells, with the intention of submitting the 'APD - authority for permit to drill' to the Bureau of Land Management ("BLM") imminently. HRL Compliance Solutions and Uintah Engineering have completed the internal location site evaluation in respect of the Environmental Assessment ("EA") requirements and are completing reports to submit to the BLM. Subject to approval, the Group anticipates commencing drilling the first of these new wells in late 2015.

It is intended that the first horizontal well will be drilled at one of the six new Mancos wells. Detailed geological and engineering assessments suggest that the Mancos in the Cisco Dome field will deliver the best results given the better well control in the area and the excellent surface infrastructure of the gathering system and processing plant nearby.

In April 2015, it was announced that John Blair was stepping down from his role in the Company and would be replaced by Ty Watson who previously held the position of Vice President of Operations. Ty has extensive experience in the region has a track record of converting vertical plays to horizontal with significant success. A factor which we anticipate will play a major part in the development of the Mancos acreage in particular.

The Group is currently evaluating various proven reserve development opportunities in the U.S. although a transaction would only be considered if the asset acquisition came as part of a fully funded deal.

On 20 January 2014, the Group completed the acquisition of Parkyn Energy Holdings plc and its subsidiary Parkyn Energy (Germany) Limited, the sole owner of two hydrocarbon licences in south-western Germany, covering approximately 635,000 acres.

On 31 January 2014, the Group was granted a licence in respect of hydrocarbon exploration for an initial period of three years. The concession covers circa 657,000 acres (2,662.4 km2) in the Weiden Basin, located in the State of Bavaria, south-eastern Germany and the Group is committed to carry out a programme of works at an estimated cost of approximately €0.9 million.

During 2014, the political situation for exploring unconventional hydrocarbons in Germany became increasingly unclear and the Directors considered that this will likely remain the case for the foreseeable future. In addition, despite promising preliminary results, it was considered that with only 15 months remaining on the licence term, there would be insufficient time to complete the required work programme and, as a result, in Q4 2014, the Group announced that it was withdrawing from the Parkyn licences.

The Group will retain its Weiden Licence since the Directors consider that the project has prospective conventional O&G targets which the current regulatory environment supports and the licence term is sufficient for Rose to perform the required work programme.

The Group's mining projects in Mexico continue to be operated by its wholly owned subsidiary, Minerales VANE S.A. de C.V. ("MV"), which is headquartered in Acaponeta, Nayarit. Mill production is carried out at its nearby mill in San Dieguito de Arriba ("SDA") where it also operates an analytical facility.

During 2014, production was focused primarily on ore from the Group's 100% owned Diablito Mine and from the La Colorada and Maria Fernanda Mines, which were operated under a profit share arrangement with Met-Sin. However, by Q4 2014 the Diablito Mine had been closed and reclaimed, having been mined out, and production from both Met-Sin mines had ceased with the La Colorada Mine having been mined out to the property boundary, and the decision taken to cease production at Maria Fernanda as economic grades could not be maintained. As a result, production during 2014 was lower than in previous years with a corresponding reduction in revenue, and the Group looked for alternative sources of production for its mining operations.

In Q3 2014, the Group entered into a profit share agreement with Minera Pafex S.A. de C.V. ("Pafex") in respect of gold and silver mining activities in Mexico at the Charay and San Luis concessions owned by Pafex. The Charay, Charay 2 and San Luis concessions, located near the town of Los Mochis in western Sinaloa, host the high-grade Mina Charay gold and silver mine where MV drilled 27 holes during 2004 and 2005 under an earlier option agreement with Pafex. Under the terms of the new agreement MV will operate all mining activities and provide the capital necessary to acquire, explore and develop the mining project. Thereafter, the gross margin earned after all operating expenses are deducted would be allocated on the basis of 60% to MV and 40% to Pafex. Development work at Mina Charay commenced in Q4 2014, test ore was being shipped to SDA by the year end and the mine is expected to reach full production in Q2 2015.

In Q3 2014, the Group added a potential producing property to its portfolio, the Tango project, consisting of the Tango, Tango 2, Tango 3 and Tango 5 concessions located in southern Sinaloa. The project was acquired by means of a profit share and option agreement with Minera Camargo S.A. de C.V. ("Camargo"). The Tango property covers a classic base and precious metals porphyry system. The property hosts two porphyries, one containing copper and the other, molybdenum mineralization as well as several historic high-grade, narrow-vein gold and silver mines on the margin of and associated with the porphyries which could provide near-term production to SDA. The four Tango concessions cover 3,954 hectares (39.54km²).

Under the terms of the agreement, MV will operate all mining activities and gross margin from the precious metals veins would be allocated on the basis of a 50:50 profit split. In addition, MV holds an option to earn a 75% ownership of the base metals (the porphyries) by investing US$5 million in work expenditures over a period of five years. 

The Group's U.S. porphyry copper programme is operated by its wholly owned subsidiary AVEN Associates LLC with offices located in Tucson, Arizona.

The exploration programme continues on a care and maintenance basis with the property positions being kept current while third-party financing is sought to continue the programme. AVEN met with a number of interested parties during the year and interest continued through the end of the year and into the current year.

The Group's uranium assets continue to be held and managed in its wholly owned subsidiary VANE Minerals (US) LLC ("VANE"), and the programme is led by the joint operation with Uranium One Americas Inc. ("U1").

The most significant asset is the Wate Project located on State of Arizona lands and operated under Wate Mining Company LLC. ("Wate"). During the year, the Board resolved to dispose of the Group's 50% interest in Wate and the assets met the requirement to be classified as non-current assets held for sale at the year end. The Group completed the sale of its interest in Wate to EFR Arizona Strip LLC. ("EFR") in Q1 2015 (the "Closing"). A total consideration of US$1.75 million was agreed, consisting of an immediate cash payment of US$0.25 million, a US$0.5 million non-interest bearing promissory note, payable in two equal instalments of US$0.25 million on each of the first and second anniversaries of Closing, a further US$0.5 million conditional cash, and a 2% production royalty on EFR's stake in the project.

All of the Group's remaining uranium assets are currently held on a care and maintenance basis and the Group continues to seek opportunities to sell its remaining uranium assets.

The U.S. District Court upheld the withdrawal of federal lands in northern Arizona in their decision handed down in Q3. The American Mining and Exploration Association and National Mining Association announced in Q4 that they plan to appeal the decision on the U.S. District Court ruling. Their appeal has been entered and since then the Attorney's General of the States of Arizona, Utah, Nevada and Montana have joined in support of the appeal. The Group has standing assuming a reversal of the ruling on appeal in the form of reinstatement of mining claims held in the joint venture with Uranium One Americas Inc.

Revenue for the year was generated primarily from the Group's gold mining and milling operations in Mexico. The Income Statement reports total revenue for the year ended 31 December 2014 of £1.9 million (2013: £5.7 million). The reduction in revenues was primarily a result of the closure of historic mines during the year, the inability of the Group to sustain consistent economic grades from these mines during the year and lower metal prices.

The Group reports a net loss after tax of £3.6 million or 0.33p per share for the year ended 31 December 2014 (2013: net loss after tax of £3.3 million or 0.57p per share).

An impairment of part of the Group's German exploration and evaluation assets resulted in a charge of £0.6 million (2013: £2.9 million) during the year.

Total investment in intangible assets at 31 December 2014 was £6.4 million (2013: £2.4m) reflecting investment into the Utah O&G assets.

Property, plant and equipment at 31 December 2014 was £0.5 million (2013: £0.6m) reflecting the continued depreciation of the ore processing mill.

Trade and other receivables of £0.6 million (2013: £1.4 million) represent amounts due in relation to trade receivables and VAT recoverable. VAT and tax recoverable in Mexico make up £0.5 million of the current outstanding.

Cash and cash equivalents at 31 December 2014 were £5.4 million (2013: £1.2 million). During the year the Company raised gross proceeds of £10 million through the placing of the Company's Ordinary Shares.

On 20 June 2014, the Company completed a placing of 433 million Ordinary Shares of 0.1p each at a price of 1.5p per share, raising gross proceeds of £6.5 million.

On 1 December 2014, the Company completed a placing of 200 million Ordinary Shares of 0.1p each at a price of 1.75p per share, raising gross proceeds of £3.5 million.

In May 2015, the Company announced that it proposed to raise gross proceeds of £3.1 million by way of a conditional placing and a subscription of 1,040,000,007 Ordinary Shares of 0.1p each at a price of 0.3p per share. The Placing is subject, amongst other things, to approval by shareholders at a General Meeting to be held on 16 June 2015.

The Directors have set out in note 3 to the financial statements their consideration of the future financing requirements of the Group and, having made appropriate enquiries and having examined the major areas which could affect the Group's financial position, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, they consider it appropriate to adopt the going concern basis in preparing the financial statements. This assessment has been carried out in the light of the guidance issued to the Directors by the Financial Reporting Council.

Your Board, management and dedicated teams continue to investigate and evaluate new opportunities designed to improve share price and, ultimately, shareholder value. The Company will continue to operate its existing O&G and Mining assets and will continue to look to enhance the value from these.

We would like to thank all shareholders for their continued support.

MC Idiens

Chief Executive Officer

3 June 2015

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2014

CONSOLIDATED BALANCE SHEET

As at 31 December 2014

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2014

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2014

1. GENERAL INFORMATION

Rose Petroleum plc (the 'Company' and, together with its subsidiaries, the 'Group') is domiciled and incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is 145-157 St John Street, London, EC1V 4PW.

The nature of the Group's operations and its principal activities are the exploration and development of O&G resources together with the evaluation and acquisition of other mineral exploration targets, principally gold, silver, uranium and copper, and the development and operation of mines in Mexico.

The financial statements are presented in pounds sterling as this is the currency in which funds from financing are generated and in which receipts are usually retained. Foreign operations are included in accordance with the policies set out in note 3.

As permitted by section 408 of the Companies Act 2006, the parent company's income statement and statement of other comprehensive income have not been included in these financial statements.

2. BASIS OF PREPARATION

The financial information set out above is abridged and does not constitute the Company's statutory financial statements for the year ended 31 December 2014. The financial information has been extracted from the financial statements for the year ended 31 December 2014, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and were approved by the Board on 3 June 2006 and on which the auditors have reported without qualification.

The statutory financial statements for the year ended 31 December 2014 will be posted no later than 5 June 2015 to shareholders and, once approved, will be delivered to the Registrar of Companies following the Annual General Meeting on 30 June 2015.

3. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union ("EU").

The financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The principal accounting policies adopted are set out below.

GOING CONCERN

These financial statements have been prepared on the going concern basis. The Group currently generates small amounts of cash through its mining and milling operations in Mexico which the group intends to continue for the foreseeable future. The group has also commenced O&G exploration and development programmes in United States.

The Group has no bank facilities and meets its working capital requirements from cash resources. In December 2014 the group raised £3.5 million in order to finance the O&G exploration. At the year end the Group had cash and cash equivalents amounting to £5.4 million.

The Directors have prepared cash flow forecasts for the Group for the period to June 2016 based on their assessment of the prospects of the Group's operations. The cash flow forecast includes £3.0 million from a share placing that the Company undertook in May 2015 which is conditional upon shareholder approval at a forthcoming General Meeting. The placing, for 1,040,000,007 Ordinary Shares, has identified potential shareholders and will, if approved, raise net proceeds of £3.0 million. These cash flow forecasts, which include the normal mining and milling operating costs for the Group over the period together with the necessary and specific expenditure to meet the minimum O&G operational and exploration licence expenditure, indicate that if the exploration is successful and if the Group chooses to continue into the development stage will require the Group to raise additional funds.

Despite challenging capital markets, the Company and Group have been successful historically in raising equity finance and consider that they have reasonable grounds for believing these past successes and operational progress will, if required, continue and so enable the Group to take advantage of any new exploration opportunities that arise. For these reasons, they continue to adopt the going concern basis in preparing the consolidated financial statements.

In preparing these financial statements the Directors have given consideration to the above matters and on that basis they believe that it remains appropriate to prepare the financial statements on a going concern basis.

BASIS OF CONSOLIDATION

The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings (together, 'the Group') made up to 31 December each year.

Subsidiary undertakings are those entities controlled directly or indirectly by the Company. Control is achieved when the Company 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.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the date on which control is transferred to the Group or, up to the date that control ceases, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with those used by the Group.

The Group applies the acquisition method to account for business combinations. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquire.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant IFRSs. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Acquisition-related costs are recognised in profit or loss as incurred.

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of the acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition.

Where a business combination is achieved in stages, the Group's previously-held interests in the acquired entity are re-measured at fair value at the acquisition date and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

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

JOINT ARRANGEMENTS

The Group has applied IFRS 11 to all joint arrangements as of 1 January 2014. The Group identifies joint arrangements as those arrangements in which two or more parties have joint control, where joint control is evidenced by the contractually agreed sharing of control of an arrangement, which exists where the decisions about the relevant activities require the unanimous consent of the parties sharing control.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor.

 Joint operations are identified as those agreements whereby the parties have rights to the assets and obligations for liabilities relating to the arrangement. Joint operations are accounted for by recognising the operator's relevant share of assets, liabilities, revenues and expenses.

Joint ventures are identified as those agreements whereby the parties have rights to the net assets of the arrangement and are accounted for using equity accounting in accordance with IAS 28. Interest in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group's share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group's share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that form part of the Group's net investment in the joint ventures), the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture.

 The Group has assessed the nature of its joint arrangements and determined them to be joint operations. The Group's share of the assets, liabilities, income and expenses of jointly controlled entities is combined with the equivalent items in the consolidated financial statements on a line-by-line basis.

There has been no impact of the adoption of IFRS 11 on the financial position, comprehensive income and the cash flows of the Group in any of the periods reported.

NON-CURRENT ASSETS HELD FOR SALE

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.

INVESTMENTS

Long term investments representing interests in subsidiary undertakings are stated at cost less any provision for impairment in the value of the non-current investment.

INTANGIBLE EXPLORATION AND EVALUATION ASSETS

The Group applies the full cost method of accounting for Exploration and Evaluation ("E&E") costs, having regard to the requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources. Under the full cost method of accounting, costs of exploring for and evaluating mineral resources are accumulated by reference to appropriate cost centres being the appropriate licence area, but are tested for impairment on a cost pool basis as described below.

E&E assets comprise costs of (i) E&E activities that are on-going at the balance sheet date, pending determination of whether or not commercial reserves exist and (ii) costs of E&E that, whilst representing part of the E&E activities associated with adding to the commercial reserves of an established cost pool, did not result in the discovery of commercial reserves.

Costs incurred prior to having obtained the legal rights to explore an area are expensed directly to the income statement as they are incurred.

Exploration and evaluation costs

All costs of E&E are initially capitalised as E&E assets. Payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling and testing are capitalised as intangible E&E assets.

Intangible costs include directly attributable overheads together with the cost of other materials consumed during the exploration and evaluation phases.

Treatment of E&E assets at conclusion of appraisal activities

Intangible E&E assets related to each exploration licence/project are carried forward until the existence (or otherwise) of commercial reserves has been determined. If commercial reserves have been discovered, the related E&E asset are assessed for impairment on a cost pool basis as set out below and any impairment is recognised in the income statement. The carrying value, after any impairment loss, of the relevant E&E assets is then reclassified as development and production assets.

Intangible E&E assets that related to E&E activities that are determined not to have resulted in the discovery of commercial reserves remain capitalised as intangible E&E assets at cost less accumulated amortisation, subject to meeting a pool-wide impairment test in accordance with the accounting policy for impairment of E&E assets set out below. Such E&E assets are amortised on a unit-of-production basis over the life of the commercial reserves of the pool to which they relate.

IMPAIRMENT OF INTANGIBLE EXPLORATION AND EVALUATION ASSETS

E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral Resources and include the point at which a determination is made as to whether or not commercial reserves exist.

Where there are indications of impairment, the E&E assets concerned are tested for impairment. Where the E&E assets concerned fall within the scope of an established full cost pool, the E&E assets are tested for impairment together with all development and production assets associated with that cost pool, as a single cash generating unit.

The aggregate carrying value is compared against the expected recoverable amount of the pool, generally by reference to the present value of the future net cash flow expected to be derived from production of commercial reserves. Where the E&E assets to be tested fall outside the scope of any established cost pool, there will generally be no commercial reserves and the E&E assets concerned will generally be written off in full.

If the recoverable amount of a cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

The Group considers each area of exploration, gold and silver, uranium, copper and oil & gas on a geographical basis to be a separate cost pool and therefore aggregates all specific assets for the purposes of determining whether impairment of E&E assets has occurred.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset into use.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives at the following rates:

Diablito Mine over the life of the mine

Ore processing mill over 10 years

Plant and machinery over 5 to 10 years

The estimated useful lives, residual value and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss. 

IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets with finite lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately.

INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

REVENUE RECOGNITION

Revenue from the sale of minerals is recognised when persuasive evidence of an arrangement exists, usually in the form of an executed sales agreement, indicating that there has been a transfer of risks and rewards to the customer, no further work or processing is required by the Group, the quantity and quality of the goods has been determined with reasonable accuracy and the goods have been delivered. This is when title is determined to pass. Revenue is measured at the fair value of the consideration received or receivable.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

OPERATING EXPENSES

Costs incurred prior to obtaining the legal rights to explore an area together with any costs which cannot be allocated to a specific exploration project are expensed directly to the income statement and included as operating expenses.

DEVELOPMENT EXPENSES

Costs incurred in respect of mining activities, prior to the commencement of production, are expensed directly to the income statement and included as development expenses.

LEASING

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense.

FOREIGN CURRENCIES

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

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

Foreign exchange differences are recognised in the profit or loss in the period in which they arise, except for foreign exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur and which, therefore, form part of the net investment in the foreign operation. Foreign exchange differences arising on the translation of the Group's net investment in foreign operations are recognised as a separate component of shareholders' equity via the statement of other comprehensive income. On disposal of foreign operations and foreign entities, the cumulative translation differences are recognised in the income statement as part of the gain or loss on disposal. 

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Foreign exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation or loss of joint control over a jointly controlled entity that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Where there is no change in the proportionate percentage interest in an entity then there has been no disposal or partial disposal and accumulated exchange differences attributable to the Group are not reclassified to profit and loss.

Fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in equity. The Group has elected to treat fair value adjustments arising on acquisitions before the date of transition to IFRS as pound sterling denominated assets and liabilities.

RETIREMENT BENEFITS

The Group makes contributions to the personal pension schemes for some of its employees and Directors. Payments to these schemes are charged as an expense in the income statement in respect of pension costs payable in the year. There were no unpaid contributions at the period end.

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

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

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

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probably that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interest are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted at the reporting date.

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

FINANCIAL INSTRUMENTS

Recognition of financial assets and financial liabilities

Financial assets and financial liabilities are recognised on the Group's Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.

Derecognition of financial assets and financial liabilities

The Group derecognises a financial asset only when the contractual rights to cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for the amount it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or expired.

Financial Assets

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost less any provision for impairment.

Cash and cash equivalents comprise cash-in-hand and on-demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash with three months or less remaining to maturity and are subject to an insignificant risk of changes in value.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

The costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that would otherwise have been avoided.

Tradeand other payables are initially measured at their fair value,and are subsequently measured at amortised cost using the effective interest rate method.

The component parts of compound instruments (convertible loan notes) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company's own equity instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently re-measured.

Transaction costs that relate to the issue of the convertible loan notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognised directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortised over the lives of the convertible loan notes using the effective interest method.

PROVISIONS

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic resources will result and that outflow can be reliably measured.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receipt can be measured reliably.

Provision for decommissioning is recognised in full when the related facilities are installed. The decommissioning provision is calculated as the net present value of the Group's share of the expenditure expected to be incurred at the end of the producing life of the facility in the removal and decommissioning of the production, storage and transportation facilities currently in place. The cost of recognising the decommissioning provision is included as part of the cost of the relevant asset and is thus charged to the income statement in accordance with the Group's policy for depreciation of property, plant and equipment. Period charges for changes in the net present value of the decommissioning provision arising from discounting are included in finance costs.

SHARE-BASED PAYMENTS

The Group has applied the requirements of IFRS 2 Share-based Payment for all grants of equity instruments.

The Group operates an equity-settled share option plan and a share-based compensation plan in respect of certain Directors, employees and consultants. The fair value of the service received in exchange for the grant of options and equity is recognised as an expense. Equity-settled share-based payments are measured at fair value (excluding the effect non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of equity-settled share-based payment is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

Fair value of option grants is measured by use of the Black Scholes model for non-performance based options. The expected life used in the model has been adjusted, based on management's best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations.

The grant by the Company of options and share-based compensation plans over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.

SEGMENTAL REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments and making strategic decisions, has been identified as the Board of Directors.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of the assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both the current and future periods.

The following are the critical judgements and estimations that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

RECOVERABILITY OF INTANGIBLE EXPLORATION AND EVALUATION ASSETS

Determining whether an exploration and evaluation asset is impaired requires an assessment of whether there are any indicators of impairment, including by reference to specific impairment indicators prescribed in IFRS 6 Exploration for and Evaluation of Mineral Resources. If there is any indication of potential impairment, an impairment test is required based on the recoverable amount of the asset. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. At 31 December 2014 the Directors determined that there were indicators of impairment in respect of the Group's intangible O&G exploration and evaluation assets held in Germany, on the basis that the carrying amount of these assets may not be recovered in full. The Directors therefore considered that it was appropriate to make a provision for impairment in respect of these assets at the year end.

The carrying amount of intangible exploration and evaluation assets at the balance sheet date was £6.4 million (2013: £2.4 million) and an impairment of £0.6 million (2013: £2.9 million) was identified and recognised in the year to 31 December 2014.

RECOVERABILITY OF LOANS TO SUBSIDIARY UNDERTAKINGS

The Company has outstanding loans from its directly held subsidiaries which have then made a number of loans to their own subsidiaries as the primary method of financing the activity of those subsidiaries. The principal loans are shown in the Company balance sheet on the basis that the loans incur interest at a commercial rate according to the Group's inter-company loan policy, which is being rolled up until such time as the subsidiaries are in a position to settle. However, there is a risk that the indirectly held subsidiaries will not commence revenue-generating activities and that the carrying amount of the Company's investment will, therefore, exceed the recoverable amount. The Board have assessed the recoverability of its loans based on this risk and, whilst the Mexican subsidiary, Minerales VANE S.A. de C.V., has generated revenues and commenced repayment of its loan, the Directors consider that, in consideration of the losses currently being generated in the US and the impairment of the Group's intangible exploration and evaluation assets which was recognised at 31 December 2014, a provision of £0.4 million (2013: £3.7 million) should be recognised by the Company in the year to 31 December 2014.

JOINT ARRANGEMENTS

Upon adoption of IFRS 11 Joint Arrangements, the Directors applied judgement when assessing whether its joint arrangements represent a joint operation or a joint venture. The Directors determined the type of joint arrangement in which it is involved by considering its rights and obligations arising from the arrangement, including the assessments of the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstance.

5. SEGMENTAL INFORMATION

For management purposes, the Group is organised into three operating divisions based on its principal activities of gold and silver mining, research and evaluation of potential uranium and copper properties and the exploration and development of O&G resources. These divisions are the basis on which the Group reports its segment information.

Segment information about these divisions is presented below.

Employees

The average numbers of employees for the year for each of the Group's principal divisions were as follows:

6. IMPAIRMENT OF INTANGIBLE EXPORATION AND EVALUATION ASSETS

During 2014, the political situation for exploring unconventional hydrocarbons in Germany became increasingly unclear and the Directors considered that this was likely to remain the case for the foreseeable future. In addition, it was considered that with only 15 months remaining on the Group's licences in south-western Germany, acquired on the acquisition of Parkyn Energy Holdings plc, there would be insufficient time to complete the required work programme. The Directors therefore considered it was appropriate to make a provision for impairment in respect of these assets at the year end.

The remaining intangible exploration and evaluation assets have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. These assets are not amortised until technical feasibility and commercial viability is established.

7. LOSS BEFORE TAXATION

The loss for the year has been arrived at after charging/(crediting):

8. LOSS PER ORDINARY SHARE

Basic loss per Ordinary Share is calculated by dividing the net loss for the year attributable to owners of the parent company by the weighted average number of Ordinary Shares in issue during the year. The calculation of the basic and diluted loss per Ordinary Share is based on the following data:

Due to the losses incurred in the years reported, there is no dilutive effect from the existing share options, share based compensation plan or convertible loan notes.