Last checked at 26 Mar 2012 07:00
RED ROCK RESOURCES PLC
("Red Rock" or the "Company")
Half-yearly report for the period ended 31 December 2011
26 March 2012 |
Red Rock Resources plc ("Red Rock" or the "Company") the mineral exploration and development company focused on iron ore and manganese, and gold, and operating in Greenland, Colombia, and East Africa, announces its unaudited half-yearly results for the six months ended 31 December 2011. |
Chairman's statement |
Dear Shareholders We present the Company's interim report for the six months to 31 December 2011. Two milestones were achieved in the period; sales of minerals from operations for the first time rose to a significant sum, as we consolidated Mineras Four Points SA for the whole period; and the segment results for that company's Colombian gold mining activities showed a pre-tax and finance profit of £798,756 for the six months as production volumes reached a profitable level. This was not the most significant factor impacting these results, however. That was the result of a less welcome development, the substantial though we believe temporary decline in the carrying value of our 74,200,832 shares in Jupiter Mines Ltd ("Jupiter")(ASX:JMS). At 31 December 2010 the Jupiter price per share was 76.5c, at 30 June 2011 it was 44.5c, and at 31 December 2011 it was 27c. At one point in the first quarter of the current calendar year it fell below 20c. We expect confidence in Jupiter to return, as 2012 will see the results of the three important projects on which that company has been quietly engaged over the last year: the imminent completion of the bankable feasibility study on the Mt Mason haematite project, the opening of the large open-pit manganese mine at Tshipi in the second half of the year, and the completion of the bankable feasibility study on the Mt Ida magnetite project at year end. The Tshipi mine we expect to be one of the world's most important and lowest cost sources of metallurgical grade manganese for decades to come . The quality and strategic importance of this asset is not in our view reflected in the Jupiter share price. As a result principally of the decline in the Jupiter share price, Available for sale financial assets declined from £46,207,258 at end 2010 to £24,472,120 at end June 2011, and to £14,703,416 at the end of 2011. In consequence of this, and after writing back some associated deferred tax provision, total equity declined from £49,812,064 at 31 December 2010 to £32,843,858 at 30 June 2011 and £23,520,952 at 31 December 2011. A pre-tax loss of £3,807,704 was booked for the period. The principal factor in this loss is a fair value adjustment of the holding in Ascot Mining plc ("Ascot") convertible loan notes and options, which reverses the profit previously booked under IFRS accounting. None of the Ascot convertible loan notes and options were sold during the period, and the trading price of Ascot was above the relevant conversion and exercise prices at the end of the period. Ascot has announced its intention to obtain a listing on the AIM market. Our project pipeline contains advanced iron ore and manganese assets, held through Jupiter and through a royalty interest, and early stage exploration in Greenland. Since the end of 2011 we have announced a partial sale (subject to due diligence) of our royalty, and our intention to continue with our farm-in exploration in Greenland, where we are preparing for a new field season when we shall drill some of the iron ore bodies identified by exploration last year, with a view to identifying a resource. 2012 is likely to be a critical and exciting year for our Greenland project. Our gold pipeline consists of production with exploration potential in Colombia, and resource delineation and expansion in Kenya, where we expect to announce new mineral resources and are applying for a mining licence. In Colombia we hope to increase production levels and lower cash costs and total costs per ounce through operating efficiencies and increased production. As with Jupiter, so with Red Rock, we expect the remainder of 2012 and early 2013 to be a period where the Company can show the results, and gain the reward, for many months of solid effort. We continue to search for strong partnerships that can accelerate our growth and the development of our projects.
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Andrew Bell | ||||||||||||||||
Executive Chairman | ||||||||||||||||
26 March 2012
Enquiries:
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Consolidated statement of financial position
as at 31 December 2011
Notes | 31 December 2011 | 31 December 2010 | 30 June 2011 | 30 June 2010 | ||||
Unaudited £ | Unaudited £ | Audited £ | Audited £ | |||||
As restated | ||||||||
ASSETS | ||||||||
Non current assets | ||||||||
Property plant and equipment | 6 | 13,059,824 | 13,561,968 | 13,327,546 | 5,100 | |||
Investments in associates | 815,616 | 1,214,217 | 975,732 | 7,332,533 | ||||
Available for sale financial assets | 7 | 14,703,416 | 46,207,258 | 24,472,120 | 1,373,680 | |||
Other financial assets | 1,386,819 | 5,184,472 | 4,095,696 | - | ||||
Exploration assets | 1,263,399 | 335,182 | 501,062 | 295,616 | ||||
Total non current assets | 31,229,074 | 66,503,097 | 43,372,156 | 9,006,929 | ||||
Current assets | ||||||||
Cash and cash equivalents | 58,964 | 111,251 | 268,788 | 563,198 | ||||
Trade and other receivables | 9,157,962 | 2,735,301 | 6,658,183 | 1,126,897 | ||||
Inventories | 115,496 | 294,287 | - | - | ||||
Total current assets | 9,332,422 | 3,140,839 | 6,926,971 | 1,690,095 | ||||
TOTAL ASSETS | 40,561,496 | 69,643,936 | 50,299,127 | 10,697,024 | ||||
EQUITY AND LIABILITIES | ||||||||
Equity attributable to owners of the parent | ||||||||
Called up share capital | 8 | 738,658 | 682,439 | 723,983 | 583,908 | |||
Share premium account | 13,441,921 | 9,971,707 | 13,041,125 | 6,347,920 | ||||
Other reserves | (3,915,375) | 17,115,115 | 2,751,616 | (350,069) | ||||
Retained earnings | 10,604,577 | 14,680,656 | 13,988,004 | 2,017,768 | ||||
20,869,781 | 42,449,917 | 30,504,728 | 8,599,527 | |||||
Non controlling interest | 2,651,171 | 7,362,147 | 2,339,130 | - | ||||
Total equity | 23,520,952 | 49,812,064 | 32,843,858 | 8,599,527 | ||||
LIABILITIES | ||||||||
Current liabilities | - | |||||||
Trade and other payables | 3,588,577 | 2,028,016 | 4,032,785 | 235,058 | ||||
Short term borrowings | 3,164,736 | 1,740,388 | 1,750,450 | 760,323 | ||||
Current tax liabilities | 113,102 | 909,030 | 84,085 | 909,030 | ||||
Total current liabilities | 6,866,415 | 4,677,434 | 5,867,320 | 1,904,411 | ||||
Non current liabilities | ||||||||
Long-term borrowings | 4,557,919 | - | 2,817,500 | - | ||||
Deferred tax liabilities | 5,616,210 | 15,154,438 | 8,770,449 | 193,086 | ||||
Total non current liabilities | 10,174,129 | 15,154,438 | 11,587,949 | 193,086 | ||||
TOTAL EQUITY AND LIABILITIES | 40,561,496 | 69,643,936 | 50,299,127 | 10,697,024 | ||||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2011
Notes | 6 months to 31 December 2011 | 6 months to 31 December 2010 | ||
Unaudited £ | Unaudited £ | |||
As restated | ||||
Revenue | ||||
Management services | - | 1,002 | ||
Sale of minerals | 2,997,634 | 507,472 | ||
Total revenue | 2,997,634 | 508,474 | ||
Net gains from other sales | ||||
(Losses)/gains on sales of investments | (22,343) | 54,291 | ||
Financial assets at fair value through profit and loss | (2,708,877) | 4,867,279 | ||
Profit on transfer of investment from/to associate | - | 13,978,109 | ||
Total net (loss)/gains from other sales | (2,731,220) | 18,899,679 | ||
Total revenue and net gains from sales | 266,414 | 19,408,153 | ||
Cost of sale of minerals | (1,330,755) | (588,297) | ||
Gain on dilution of interest in associate | - | 257,159 | ||
Impairment of investment in associate | - | (70,298) | ||
Impairment of available-for-sale investments | (501,847) | - | ||
Impairment of exploration assets | (29,030) | - | ||
Exploration expenses | (175,515) | (157,916) | ||
Administrative expenses | (1,507,673) | (1,769,026) | ||
Share of losses of associates | (160,116) | (163,195) | ||
Finance costs (net) | (369,182) | (439,910) | ||
(Loss)/profit for the period before taxation | (3,807,704) | 16,476,670 | ||
Tax credit/(expense) | 714,001 | (4,630,231) | ||
(Loss)/profit for the period | (3,093,703) | 11,846,439 | ||
(Loss)/profit for the period attributable to: | ||||
Equity holders of the parent | (3,405,744) | 12,625,022 | ||
Non controlling interest | 312,041 | (778,583) | ||
(3,093,703) | 11,846,439 | |||
(Loss)/earnings per share | ||||
(Loss)/earnings per share - basic | 3 | (0.47) pence | 1.96 pence | |
(Loss)/earnings per share - diluted | 3 | (0.46) pence | 1.87 pence |
All of the operations are considered to be continuing.
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2011
6 months to 31 December 2011 | 6 months to 31 December 2010 | |||
Unaudited £ | Unaudited £ | |||
As restated | ||||
(Loss)/profit for the period | (3,093,703) | 11,846,439 | ||
Revaluation of available for sale investments | (9,272,849) | 23,852,353 | ||
Deferred taxation on revaluation of available for sale investments | 2,410,941 | (6,440,135) | ||
Other comprehensive effects of investments transferred to the income statement on sale or reclassification |
- |
(5,867) | ||
Group's share of associates' other comprehensive income | - | 51,801 | ||
Deferred tax on group's share of associates other comprehensive income | - | (12,402) | ||
Exchange gains on subsidiary's converting to presentational currency | - | 212,906 | ||
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations |
130,793 |
(123,114) | ||
Total comprehensive (loss)/income for the period | (9,824,818) | 29,381,981 | ||
Total comprehensive (loss)/income for the period attributable to: | ||||
Equity holders of the parent | (9,824,818) | 29,947,658 | ||
Non controlling interest | - | (565,677) | ||
(9,824,818) | 29,381,981 | |||
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2011
The movements in equity during the period were as follows:
Share capital | Share premium account | Retained earnings | Non controlling interest | Other reserves | Total equity | |
Unaudited | £ | £ | £ | £ | £ | £ |
As restated | As restated | As restated | As restated | |||
As at 30 June 2010 | 583,908 | 6,347,920 | 2,017,768 | - | (350,069) | 8,599,527 |
Changes in equity for 2010 | ||||||
On acquisition of subsidiary | - | - | - | 7,927,824 | - | 7,927,824 |
Total comprehensive income/(loss) for the period |
- |
- |
12,625,022 |
(565,677) |
17,322,636 |
29,381,981 |
Transactions with owners | ||||||
Issue of shares | 98,531 | 3,974,335 | - | - | - | 4,072,866 |
Share issue and fundraising costs | - | (350,548) | - | - | - | (350,548) |
Share based payments | - | - | 37,866 | - | 142,548 | 180,414 |
Total Transactions with owners | 98,531 | 3,623,787 | 37,866 | - | 142,548 | 3,902,732 |
As at 31 December 2010 | 682,439 | 9,971,707 | 14,680,656 | 7,362,147 | 17,115,115 | 49,812,064 |
As at 30 June 2011 | 723,983 | 13,041,125 | 13,988,004 | 2,339,130 | 2,751,616 | 32,843,858 |
Changes in equity for 2011 | ||||||
Total comprehensive income/(loss) for the period |
- |
- |
(3,405,744) |
312,041 |
(6,731,115) |
(9,824,818) |
Transactions with owners | ||||||
Issue of shares | 14,675 | 588,575 | - | - | - | 603,250 |
Share issue and fundraising costs | - | (187,779) | - | - | - | (187,779) |
Share based payments charge | - | - | - | - | 86,441 | 86,441 |
Share based payments transfer | - | - | 22,317 | - | (22,317) | - |
Total Transactions with owners | 14,675 | 400,796 | 22,317 | - | 64,124 | 501,912 |
As at 31 December 2011 | 738,658 | 13,441,921 | 10,604,577 | 2,651,171 | (3,915,375) | 23,520,952 |
Available for sale trade investments reserve | Associate investments reserve | Foreign currency translation reserve | Share based payment reserve | Total other reserves | |
Unaudited | £ | £ | £ | £ | £ |
As at 30 June 2010 | (353,517) | (126,226) | (2,589) | 132,263 | (350,069) |
Changes in equity for 2010 | |||||
Total comprehensive income/(loss) for the period |
17,412,218 |
33,532 |
(123,114) |
- |
17,322,636 |
Transactions with owners | |||||
Share based payments | - | - | - | 142,548 | 142,548 |
As at 31 December 2010 | 17,058,701 | (92,694) | (125,703) | 274,811 | 17,115,115 |
As at 30 June 2011 | 2,667,162 | (126,226) | (56,367) | 267,047 | 2,751,616 |
Changes in equity for 2011 | |||||
Total comprehensive income/(loss) for the period |
(6,861,908) |
- |
130,793 |
- |
(6,731,115) |
Transactions with owners | |||||
Share based payments charge | - | - | - | 86,441 | 86,441 |
Share based payments transfer | - | - | - | (22,317) | (22,317) |
As at 31 December 2011 | (4,194,746) | (126,226) | 74,426 | 331,171 | (3,915,375) |
Consolidated statement of cash flows
for the period ended 31 December 2011
6 months to 31 December 2011 | 6 months to 31 December 2010 | |||
Unaudited £ | Unaudited £ As restated | |||
Cash flows from operating activities | ||||
Profit before taxation | (3,807,704) | 16,476,670 | ||
Increase in receivables | (2,499,779) | (508,903) | ||
(Decrease)/increase in payables | (444,207) | 665,312 | ||
Increase in inventories | (115,496) | (294,287) | ||
Share of losses in associates | 160,116 | 163,195 | ||
Interest receivable | (208,273) | (1,012) | ||
Interest payable | 212,820 | 52,307 | ||
Finance costs | - | 388,615 | ||
Exploration expenses | - | 157,916 | ||
Share based payments | 86,441 | 180,414 | ||
Currency adjustments | 209,842 | 94,679 | ||
Impairment of associate | - | 70,298 | ||
Impairment of available-for-sale investments | 501,847 | - | ||
Gain on dilution of interest in associates | - | (257,159) | ||
Loss/(gains) on sales of investments | 22,343 | (54,291) | ||
Profit on transfer of available for sale investment to associate | - | (13,978,109) | ||
Financial assets at fair value through profit and loss | 2,708,877 | (4,867,279) | ||
Depreciation | 352,801 | 420,731 | ||
Exploration properties written-off | (2,342) | - | ||
Income taxes paid | (281) | (1,741) | ||
Net cash flows from operations | (2,822,995) | (1,292,644) | ||
Cash flows from investing activities | ||||
Interest received | 208,273 | 1,012 | ||
Interest paid | (212,820) | (52,307) | ||
Proceeds of sale of investments | 160,005 | 385,462 | ||
Payments to acquire investments | (188,340) | (2,514,972) | ||
Exploration expenditure | (762,336) | (160,884) | ||
Net cash acquired on gain of control of subsidiary | - | 4,974 | ||
Payments to acquire property plant and equipment | (130,887) | (1,136,356) | ||
Net cash flows from investing activities | (926,105) | (3,473,071) | ||
Cash flows from financing activities | ||||
Proceeds from issue of shares | 603,250 | 4,072,866 | ||
Transaction costs of issue of shares | (187,779) | (350,548) | ||
Finance costs | - | (388,615) | ||
Proceeds of new borrowings | 3,934,775 | 980,065 | ||
Repayments of borrowings | (810,970) | - | ||
Net cash flows from financing activities | 3,539,276 | 4,313,768 | ||
Net decrease in cash and cash equivalents | (209,824) | (451,947) | ||
Cash and cash equivalents at the beginning of period | 268,788 | 563,198 | ||
Cash and cash equivalents at end of period | 58,964 | 111,251 | ||
Half-yearly report notes
for the period ended 31 December 2011
1 | Company and group |
As at 30 June 2011 and 31 December 2011 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively. |
The Company will report again for the year ending 30 June 2012.
The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2011 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 30 June 2011, upon which the auditors gave an unqualified audit report which did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies. |
2 | Accounting Polices |
Basis of preparation | |
The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting.' The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2011, which have been prepared in accordance with IFRS. |
3 | Earnings per share | 6 months to 31 December 2011 | 6 months to 31 December 2010 | |
Unaudited £ | Unaudited £ | |||
As restated |
These have been calculated on (loss)/profit for the period after taxation of: |
(3,405,744) |
12,625,022 | ||
Weighted average number of Ordinary shares of £0.001 in issue | 726,477,115 | 644,355,471 | ||
(Loss)/earnings per share - basic | (0.47) pence | 1.96 pence | ||
Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options |
742,419,040 |
674,805,743 | ||
(Loss)/earnings per share fully diluted | (0.46) pence | 1.87 pence | ||
The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows: |
2011 | 2010 | |||
Number | Number | |||
Earnings per share denominator | 726,477,115 | 644,355,471 | ||
Weighted average number of exercisable share options | 15,941,925 | 30,450,272 | ||
Diluted earnings per share denominator | 742,419,040 | 674,805,743 |
Half-yearly report notes
for the period ended 31 December 2011, continued
4 | Segmental analysis |
Since the last annual financial statements the group has added an additional segment to its operations. This segment relates to its operational mine in Columbia held by its newly acquired subsidiary Mineras Four Points S.A. |
Ascot Mining plc | Other investments | Australian exploration | Columbian mining | African exploration | Corporate and unallocated | Total | ||
For the 6 month period to 31 December 2011 | £ | £ | £ | £ | £ | £ | £ | |
Revenue | ||||||||
Total segment external revenue | - | - | - | 2,997,634 | - | - | 2,997,634 | |
Result | ||||||||
Segment results | (3,045,842) | (187,225) | (177,265) | 798,756 | (22,741) | (804,204) | (3,438,521) | |
Loss before tax and finance costs | (3,438,521) | |||||||
Interest receivable | 208,273 | |||||||
Interest payable | (212,820) | |||||||
Finance costs | (364,636) | |||||||
Loss before taxation | (3,807,704) | |||||||
Taxation credit | 714,001 | |||||||
Consolidated loss for the period | (3,093,703) |
Jupiter Mines Limited | Other investments | Australian exploration | Columbian mining | Corporate and unallocated | Total | ||
For the 6 month period to 31 December 2010 As restated | £ | £ | £ | £ | £ | £ | |
Revenue | |||||||
Total segment external revenue | - | - | - | 507,472 | 1,002 | 508,474 | |
Result | |||||||
Segment results | 14,047,613 | 4,739,896 | (16,646) | (871,850) | (982,433) | 16,916,580 | |
Profit before tax and finance costs | 16,916,580 | ||||||
Interest receivable | 1,012 | ||||||
Interest payable | (52,307) | ||||||
Finance costs | (388,615) | ||||||
Profit before taxation | 16,476,670 | ||||||
Taxation expense | (4,630,231) | ||||||
Consolidated profit for the period | 11,846,439 |
A measure of total asset and liabilities for each segment is not readily available and so this information has not been presented. |
Half-yearly report notes
for the period ended 31 December 2011, continued
5 | Prior period adjustment |
Ascot Mining plc In the interim financial statements for the period to 31 December 2010 the Group's investment in Ascot Mining plc ("Ascot") had been treated as an available for sale asset. At the year end in accordance with IAS 39 it was concluded that this investment should be separately classified as Other Financial Asset and accounted for at fair value through profit and loss.
The interim financial statements for the year ended 31 December 2010 have been restated to correct this. The effect of the restatement on those financial statements is summarised below: |
Effect on the 6 month period to 31 December 2010 | ||||
£ | ||||
Decrease in gains from sale of investments | (20,203) | |||
Increase in financial assets at fair value through profit and loss | 4,867,279 | |||
Decrease in gain on recognition of Ascot contracts | (950,135) | |||
Increase in deferred tax charge | (1,052,174) | |||
Increase in profit for the period | 2,844,767 | |||
Decrease in available for sale investments | (5,189,125) | |||
Increase in other financial assets | 5,184,472 | |||
Increase in trade and other receivables | 602,816 | |||
Decrease in other reserves | 2,408,108 | |||
Decrease in deferred tax liabilities | (161,504) | |||
Decrease in equity | 2,844,767 | |||
| Mineras Four Points SA In the interim financial statements for the period to 31 December 2010 the Group recognised the subsidiary Mineras Four Points SA ("MFP") that has been acquired in that period. At the interim date, the fair value of the MFP mine had not been determined and this was included in the financial statements for the year to 30 June 2011. An adjustment is needed to account for the fair value of this mine and the resulting deferred tax liability.
The interim financial statements for the year ended 31 December 2010 have been restated to correct this. The effect of the restatement on those financial statements is summarised below: | |||
Effect on the 6 month period to 31 December 2010 | ||||
£ | ||||
Increase in depreciation charge | (287,903) | |||
Decrease in deferred tax charge | 95,008 | |||
Decrease in profit for the period | (192,895) | |||
Attributable to non-controlling interest | 192,895 | |||
Profit effect on equity holders of the parent | - | |||
Increase in property, plant and equipment | 11,228,233 | |||
Increase in deferred tax liability | (3,785,317) | |||
Increase in non-controlling interest | (7,442,916) | |||
Decrease in equity | - | |||
6 | Property plant and equipment |
Mines | Field equipment and machinery |
Fixtures and fittings |
Assets under construction |
Total | ||
£ | £ | £ | £ | £ | ||
Cost | ||||||
As at 1 July 2011 | 12,855,012 | 669,905 | 95,140 | 435,039 | 14,055,096 | |
Additions in the period | - | 97,912 | 11,201 | 21,774 | 130,887 | |
Exchange differences | (21,775) | 11,943 | (29,031) | (4,775) | (43,638) | |
At 31 December 2011 | 12,833,237 | 779,760 | 77,310 | 452,038 | 14,142,345 | |
Depreciation | ||||||
As at 1 July 2011 | 657,213 | 61,504 | 8,834 | - | 727,551 | |
Charge for the period | 321,375 | 27,387 | 4,039 | - | 352,801 | |
Exchange differences | (6,498) | 13,084 | (4,417) | - | 2,169 | |
At 31 December 2011 | 972,090 | 101,975 | 8,456 | - | 1,082,521 | |
Net book value | ||||||
At 31 December 2011 | 11,861,147 | 677,785 | 68,854 | 452,038 | 13,059,824 | |
At 30 June 2011 | 12,197,799 | 608,401 | 86,306 | 435,039 | 13,327,545 |
Depreciation expense of £352,801 (2010: £420,731) has been charged to administration expenses. |
7 | Available for sale financial assets |
31 December 2011 £ | 31 December 2010 £ | ||
At 1 July | 24,472,120 | 1,373,680 | |
Additions | 188,340 | 499,336 | |
Disposals | (182,348) | - | |
Revaluation | (9,272,849) | 23,852,353 | |
Transfer from associate | - | 20,481,889 | |
Impairment | (501,847) | - | |
At 31 December | 14,703,416 | 46,207,258 |
8 | Share Capital of the company |
The authorised share capital and the called up and fully paid amounts were as follows: |
Authorised | Number | Nominal £ | ||
At incorporation on 8 September 2004 and as at 31 December 2011, Ordinary shares of £0.001 each | 10,000,000,000 | 10,000,000 | ||
Called up, allotted and fully paid during the period | ||||
As at 30 June 2011 | 723,983,283 | 723,983 | ||
Issued 15 November 2011 at 4.62 pence per share | 6,777,690 | 6,778 | ||
Issued 5 December 2011 at 3.50 pence per share | 1,150,000 | 1,150 | ||
Issued 14 December 2011 at 3.71 pence per share | 6,746,910 | 6,747 | ||
As at 31 December 2011 | 738,657,883 | 738,658 | ||
Half-yearly report notes
for the period ended 31 December 2011, continued
9 | Capital Management |
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the group can fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the group's capital by assessing the group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior period. |
10 Subsequent events
As at 31 December 2011, the Company has an existing Earn-in agreement with North Atlantic Mining Associates Limited ("NAMA") wherein it funded the 2011 exploration programme of NAMA's subsidiary, NAMA Greenland Limited ('NGL'), in exchange for 25% interest in NGL. Under the agreement, it may elect to continue funding the 2012 exploration programme for a further 35% interest in NGL. On 6th January 2012 the Company executed the option to fund the 2012 exploration programme. In addition, the Company and NGL entered into certain new agreements regarding the conduct of joint venture business activities ('JV') relating to the Melville Bugt Project, including a joint venture agreement that supplements the provisions of the March 2011 Agreement as amended. The objectives of the JV include to (a) undertake the exploration, delineation and definition of resources to NI 43-101 or JORC standard for the purposes of undertaking development studies, (b) commission a scoping study, pre-feasibility study, bankability study, or other relevant assessment as appropriate, and (c) other activities as agreed.