Eurasia Mining PLC
Annual Report and Accounts 2017
PGM AND GOLD
PRODUCTION AND
DEVELOPMENT
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3
4
10
12
13
16
20
27
51
53
Highlights
Chairman’s Statement
Operations Update
Strategic Report
Directors’ Biographies
Directors’ Report
Independent Auditor’s Report
Financial Statements
Notes to the Financial Statements
Notice of Annual General Meeting
Proxy Form
Company Information
Front cover, material exiting the trommel, a device
used at the West Kytlim mine to separate platinum
bearing sands from larger rock fragments. The
picture shows washed gravels exiting the trommel
in June 2018
2017 Highlights
Monchetundra
(cid:0) 2 million ounce, 80% owned,
state-approved reserves +
resources (Palladium + Platinum)
(cid:0) Au, Cu & Ni add significantly
to revenue
(cid:0) EPCF (EPC+Finance) in place
with Sinosteel
(cid:0) Mine operator negotiations in
progress; draft off-takes from
Glencore and Sinosteel.
A
(cid:43)
Pd
Pt
Palladium
Platinum
Cu
Copper
Ni
Nickel
Au
Gold
MOSCOW
(cid:43)
(cid:43)
EKATERINBURG
Semenovsky
(cid:0) Gold and silver tailings project
in pre-production stage with
feasibility approved.
Ag
Silver
Au
Gold
West Kytlim
(cid:0) Second largest, 75% owned,
global alluvial PGM mine in
production in Ural Mountains
(cid:0) Currently contracted with
increases in capacity expected
in 2018
(cid:0) 69.5kg raw platinum (2,250 oz)
produced in first 7 weeks of
operation.
Pd
Pt
Palladium
Platinum
Rh
Rhodium
Ir
Iridium
Au
Gold
C
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
1
P L AT I N U M S U M M A R Y
(cid:0)
A U T O M O T I V E
I N D U S T R I A L
J E W E L L E RY
I N V E S T M E N T
There is general
consensus amongst
industry commentators
(notably SFA Oxford
Platinum Standard,
May 2018 [1] and World
Platinum Investment
Council, Platinum
Quarterly May 2018 [2])
that automotive demand
for platinum declined
through 2017 due to
continued, legislation-led
disincentives to owning
diesel engines. Some
Original Equipment
Manufactirer’s have
already responded to
this pressure including
Bosch Technologies
diesel solution which can
reduce NOx emissions to
one tenth of the legal
limit set for 2020 [3].
Increased industrial
demand is forecast for
platinum for 2018 led
through increases in
petroleum refining
capacity, glass fabrication
and chemical catalysis [4].
Holdings in Platinum
ETF’s increased by 94k
oz in 2017 [4] with the
majority of increased
demand from US
investors [4]. Predicted
to be firm through 2018
with strong bar and coin
demand [4].
Increases in platinum
jewellery demand are
expected in 2018 in
Western Europe, North
America and India with
Chinese demand (the
largest region) remaining
largely flat [4]. Platinum
Guild International,
an industry funded
organisation, continue
to promote platinum
jewellery internationally
[5].
Sources
[1] http://www.sfa-oxford.com
[2] https://www.platinuminvestment.com
[3] Bosche-presse.de https://www.bosch-presse.de/pressportal/de/en/breakthrough-new-bosch-
diesel-technology-provides-solution-to-nox-problem-155524.html
[4] SFA Oxford Platinum standard May, 2018 page 60
[5] http://www.platinumguild.com/sphome
[6] Johnson Matthey PGM Market report May 2018 –
http://www.platinum.matthey.com/documents/new-
item/pgm%20market%20reports/pgm_market_report_may_2018.pdf
5 year Palladium
High 1122 Low 467
Palladium prices
Palladium prices continue to show resistance
at the $1,000 level, having pushed through
$1,100 in January 2018, their premium to
platinum a function of reduced supply (down
6% year on year [6]) and increased demand
(up 8% year on year[6]). The market saw a
deficit of 801,000oz in 2017 with a record
8.39M oz used in the automotive industry,
against a 13% fall in Russian primary
supplies [6].
1200
1100
1000
900
800
700
600
500
400
300
e
c
n
u
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r
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p
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June 2013
2014
2015
2016
2017
June 2018
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ANNUAL REPORT & ACCOUNTS 2017
Chairman’s Statement
As Chairman of the board, I am pleased to confirm that full production is
ongoing at our West Kytlim mine in the Urals. The new contractor is working
very well as demonstrated in a video available through our website. At our
much larger Monchetundra development project on the Kola Peninsula, the
mining licence application is progressing somewhat ahead of schedule, after
a provisional Rosnedra approval in early February 2018.
2017 was a hugely important year for the Company, as we stepped up to production at the West Kytlim
mine. Production remained inconsistent throughout 2017, as our contractor struggled financially, and was
ultimately replaced by a more experienced contractor with a stronger balance sheet. However, during 2017,
a foundation of knowledge was established, while also progressing important infrastructural elements at the
mine site, and this created a solid base from which to launch the 2018 mining season. A new contractor,
Techstroy was appointed in March 2018 and we believe their professional attitude was demonstrated early
on with the deployment of largely new diesel plant. The choice of equipment is different from that utilised
through 2017 and is based on the more reliable trommel washing system with concentrate recovery using
sluice boxes. We look forward to a full season’s production from this washplant, with the possibility of a
second being installed within the year. We also look forward to the significant revenues from the mine,
which will support our team in other developments.
At the time of writing we are well ahead of expectations, with 69.5kg (2,250 oz) produced from start-up on
3 May to 22 June 2018, and the run-rate is scaling up with a record amount of 6.9kg (221 oz) standing as the
maximum produced over the course of a day. Grades for the period averaged 0.81g/m3 . The directors, our
staff in London and Russia, and our partner Techstroy, believe the mine is already a great success in 2018.
At Monchetundra we are expecting the completion of the application process for a mining permit on the
two million ounce PGM deposit defined by the Company. However, we are not sitting still, and plans are
being made to allow us to move forward once permitting has been completed. We are optimistic that the
permit will be granted over the coming months and thereafter development work can commence. We have
often referred to this project as a potential ‘company maker’ and we believe that the surrounding region,
the Kola Peninsula, will become a major centre for the production of PGMs in the coming years.
PGMs are key metals for future technologies, which make use of catalysts to facilitate and improve
performance and reaction times of complex processes. The burgeoning development of electric vehicles
and fuel cell technology relies on PGMs and demand will continue to grow for these metals. Eurasia has
concentrated on these metals and is one of the few companies actively developing such projects, notably in
Russia where there is excellent potential for all commodities due to 30 years of little or no exploration activity.
We look forward to having opportunities to further develop our business there over the coming years.
Finally, once again I would like to thank the board, management and staff for strong and loyal support
through several years of effort. This has culminated in the opening of the West Kytlim mine and the
advancement of the Monchetundra project. We, the directors, feel that with the West Kytlim mine truly
delivering, and our Monchetundra project advancing through permitting, this year and the forthcoming
years will be transformational for the company. Also, I would thank shareholders for their support and
look forward to delivering results for all our benefit.
Christian Schaffalitzky
Executive Chairman
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
3
Operations update
W E S T K Y T L I M
West Kytlim is Eurasia’s 75% owned and fully operational Platinum, PGM and
Gold mine in the Ural Mountains, 200km north of the company’s regional office in
Ekaterinburg. The mine operates from spring to late autumn and is managed by
Eurasia with the majority of mine operations, including excavation, transportation
and gravel washing contracted for a 65%/35% split on gross revenue (with 65%
attributable to the contractor to cover the operational risks and costs).
Above, two Komatsu excavators loading a fleet of four trucks at Malaya Sosnovka in May 2018.
At the washplant, visible in the background, a third excavator loads material into the trommel.
4
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Operations update continued
2017 Operational Summary
2018 Operational Summary
Operations at site were continuous
to the end of November 2017;
however, continuous and consistent
production was not achieved. The
contractor appointed for work in
2017, Region Metall, elected to use
a vibrating screen as the key
mechanism for gravel disintegration
and washing and the system proved
prone to mechanical breakdown.
The washplant owned and operated
by Eurasia through the exploration
phase of the project was
commissioned by the end of
November 2017 and produced
3.8kg (122 oz) in a few days. The
total amount of platinum produced
by both washplants throughout the
2017 season was approximately 10kg
(320 oz). Infrastructural elements at
site such as a process water pond,
a tailings dam and site roads were
constructed early in the season, and
the 2017 season was also useful in
furthering knowledge on the nature
of the platinum bearing gravels.
In September 2017, applications
were made for exploration licences
adjacent to the West Kytlim license,
namely, Tipil (23.14km2) and Malaya
Kosva (9.42km2).
A decision was taken in January
2018 to appoint a new contractor
to manage the mining and gravel
washing process and the West Kytlim
mine is now fully operational for the
2018 mining season. The operation
was reinvigorated by the
appointment of the new contractor,
Techstroy, who are experienced
alluvial operators, and the directors
believe their experience and
knowledge have been invaluable
in driving the mine’s performance.
The flow sheet was redesigned
to include a trommel as the main
tool for washing and disintegrating
platinum bearing sands and gravels.
A trommel is a rotating cylindrical
screen driven by diesel-generated
electricity. Oversize material is
rejected through the trommel as
finer grained material passes to a
sluice arranged perpendicular to
and underneath the trommel. Higher
density platinum nuggets collect on
the sluice mats, which are emptied
once a day. This material is further
upgraded to a raw platinum black
sand concentrate, the mine’s
product, at the on-site laboratory
operated by staff from Eurasia’s
subsidiary Kosvinsky Kamen.
A refining and sales contract is
in place with the Precious Metals
refinery in Ekaterinburg, and
shipments of raw platinum by
armed courier are now occurring
on a weekly basis.
Washing commenced with
an initial first fill on 3 May 2018
and more continuous operations,
ramping up and increasing the
run-rate.
Quantities of raw platinum
produced in 2018 to date have
exceeded expectations, largely due
to both higher production volumes
and higher than anticipated average
grades. Measuring the total amount
of gravel processed is a key to
calculating grades in ore, and is
best done on longer timescales, as
it involves a volume measurement
of material removed from the open
pit. Our surveying team measure
progress in the pit by using laser
levels and GPS instruments to
ascertain the total amount of gravel
moved. This measurement can then
be correlated with the total amount
of Raw Platinum produced to arrive
at an average grade.
At the time of writing the total
amount of gravel washed from 3 May
Proposed Mine Schedule - Multiple concurrent sites
2018
2019
2020
2021
2022 2023 2028
Q 1 Q 2 Q 3 Q 4
Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4
Malaya Sosnovka
Bolshaya Sosnovka
Kluchiki
Ust Tylai
Omutoshnaya
Ust Tylai Right Bank
Tylai Levy
Mining operations
Infill Reserves Drilling - Upgrade to C2 to C1 Category
Resource drilling - Upgrade of Resources to Reserves
Development
2026 -2028
Development
2026 -2028
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
5
Operations update continued
2018 to 22 June 2018 inclusive was
56,600m3, against a total amount of
raw platinum produced of 69.5 kg
(2,231 oz), which yields a total
average grade for the period of
0.81g/m3.
Boulder content is a further
strong control on plant through-put.
Parts of the Malaya Sosnovka Area
currently being worked are
considered relatively high in boulder
content and this has been a limiting
factor on plant throughput, however
this has been more than offset by
high grades in ore. With reduced
boulder content going forward the
plant throughput and the run-rate
will increase accordingly.
Processing of one stockpiled ore
reserve is now complete, and mining
has progressed to further stockpiles
and later the main reserves of the
Malaya Sosnovka Area. Stripping of
overburden from the main reserve
blocks has been contiguous with
the gravel washing operation. Site
preparation including stripping of
forestry has also now commenced
on the Kluchiki Area which is being
prepared to be developed alongside
Malaya Sosnovka. Kluchiki is more
than twice as large as Malaya
Sosnovka and is an opportunity to
ramp up production to more than
double current rates.
A full team of personnel are now
on site including 20 to 22 persons
from Eurasia’s contractor Techstroy
and 7 to 8 people from Eurasia’s
subsidiary Kosvinsky Kamen
providing geological support and
operating the onsite laboratory
upgrading sluice concentrate to
mine product.
Waste Stockpile 2
132,000m3
3
C2
21
C2
22
C2
12
C2
5
C2
4
C2
11
C2
12
C2
Water
Reservoir
13
C2
421,1
Waste Stockpile I
120,000m3
Malaya Sosnovka Area
MINE LA YOU T 2018
Ore Stockpile
12,000m3
LEGEND
22
C2
Reserve block no.
Reserve category
Malaya Sosnovka land allotment
Reserves block outline
2017/18 Ore stockpiles
Waste stockpiles
N
0
100m
Ore Stockpile
44,000m3
Ore Stockpile
19,000m3
Base Camp
Buildings
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ANNUAL REPORT & ACCOUNTS 2017
Operations update continued
M O N C H E T U N D R A
Monchetundra is Eurasia’s 80% owned 2 million ounce PGM (Reserve +
Resource) project near the town of Monchegorsk on Kola Peninsula.
Feasibility study and reserves report have been approved and a mining
permit application is well advanced and indeed proceeding ahead of
expectations. Eurasia was issued a discovery certificate for the reserves and
resources contained within two open pittable locations, Loipishnune and
West Nittis, in July of 2017. The discovery certificate represents a major
milestone for the project as it guarantees mining rights to the holder. A
mining permit application proceeded directly on receipt of the discovery
certificate and later achieved provisional approval from Rosnedra, the Russian
ministry for subsoil use. This provisional approval was achieved just 3 months
after submission of the mining license application, at which point the
application was forwarded by Rosnedra to the Ministry of Defence (MOD)
and Federal Securities Service (FSB) for their approval. These agencies later
approved the application in June 2018. The Federal Anti-Monopoly Service
also approved the application before forwarding to the MOD and FSB.
Above, tundra vegetation typical of the mine area at West Nittis and Loipishnune with the Moncheozoro lake in the background
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
7
Operations update continued
(cid:85)
(cid:85)
(cid:85)
(cid:85)
(cid:85)
PK
At the time of writing the Company
believes that the mining application
is in good standing with no major
obstacles to overcome. The
application now moves to the
Ministry of Economic Development
and the Ministry of the Natural
Resources before being forwarded
to government ministry level for a
final sign off by the office of Prime
Minister Dmitry Medvedev.
Currently state approved reserves
and resources within the
Monchetundra Project comprise
Russian standard C1 and C2
categories of 55.9 tonnes (about 2
million ounces) palladium equivalent
(predominantly palladium) at two
open-pittable locations, West Nittis
and Loipishnune. These open pits
also contain significant gold and
base metal credits including 28,124
tonnes of copper, 30,410 tonnes of
nickel and 2 tonnes of gold.
Proposed Mine Schedule - Monchetundra
Engineering Procurement
Construction and Financing
(EPCF) Contract
NKT
massif
An EPCF contract to develop the
mine at Monchetundra is already in
place with Sinosteel, a state owned
Chinese engineering group focused
on mining, which was agreed in
October of 2016. The contract
provides for Sinosteel to undertake
the mine and processing plant
construction and commissioning
on a turnkey, commercial arms-
length basis. 85 per cent (or
US$149,600,000) of the contract
value has been arranged as debt-
based by Sinosteel – this element of
plant construction costs will remain
on the Sinosteel balance sheet until
such time as the plant is operating
at full capacity (about 130,000oz of
PGM per annum) and to designed
specification.
Discussions continue with
other third-party service providers
regarding the running of the mine
at Monchetundra. The Company
hopes to emulate the contract
mining arrangement utilised at
West Kytlim by contracting the
mining operation to a reputable
international specialist company
with experience in Russia, while
maintaining control of the project,
for a percentage of gross revenue.
2017
2021 2022 2030
Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4
2018
2020
2019
Receipt of Discovery Certificate
Mining License Application
Receipt of Mining License
Project Design/Process Flow
EPC contract commences
Pre-stripping
Mining start up
Full production
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ANNUAL REPORT & ACCOUNTS 2017
Operations update continued
S E M E N O V S K Y
Eurasia continues to maintain close working relations
with the owners of the Semenovsky Tailings Project.
Both parties agree that commercial arrangements
regarding the projects development can be arranged
at short notice should a suitable funding mechanism
become available. The Directors are reluctant to dilute
the equity of the Company further in pursuit of the
projects development but continue to believe that the
project represents a viable opportunity for commodity
diversification, and fits well with the company’s strategy
to focus on near term cash generating projects, while
also progressing the much larger scale Monchetundra
Project. Due to present uncertainty with project
development £44,495 of the Group investment in to
Semenovsky joint operations were written off in 2017.
B L O C K C H A I N T E C H N O L O G Y
D E V E L O P M E N T S
Eurasia continues to pay close attention to
developments in the Blockchain space, particularly
with regard to the impact of this emerging technology
on the resource industry. Instability in cryptocurrency
prices has long been regarded as inhibiting their wider
application. It is recognised that a potential solution
to this problem lies in creating a cryptocurrency
backed by precious metal. Several solutions and
products have emerged in the much larger gold
market, and Eurasia continues to pursue the goal to
be the first to offer a Platinum backed cryptocurrency.
We are currently working in close partnership with
Bankex an established fin tech company which
successfully raised about $70m in late 2017. Eurasia
are currently working on establishing a Blockchain
partner within the Company structure, to further
pursue these goals and feel that developing a
Platinum backed cryptocurrency has the potential
to stimulate significant Platinum investment demand.
Christian Schaffalitzky
Executive Chairman
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
9
Strategic report
Eurasia Mining plc Company No. 3010091
Eurasia Mining Plc (“Eurasia” or the “Company”) is a public
limited company incorporated and domiciled in Great Britain
with its registered office and principal place of business at 2nd
Floor, 85-87 Borough High Street, London SE1 1NH. The
Company’s shares are quoted on AIM, a market operated by
the London Stock Exchange Group plc.
capitalised as part of the project costs and higher financing
expenses. The high cost of financing is caused by complexity
of accounting for convertible loans the Group entered into in
the course of 2017, and result in the effective interest charge
to profit and loss being significantly higher compare to the
conventional debt financing.
The principal activities of the Company and its subsidiaries (the
“Group”) are related to production of platinum group metals
(the “PGM”), gold and other minerals.
Shareholder return – the performance of the share price. The
Company’s shares are quoted on AIM and the shares have traded
at 0.2-0.738p (2016: 0.43-1.3p) during the year under review.
The Group currently has two key operations in Russia – (1) West
Kytlim, which is an operating platinum group metals and gold
mine in the Central Urals and (2) the Monchetundra Project on
the Kola Peninsula in Russia, at which the company has feasibility
study and state approved reserves and resources in PGM and
base metals, and at which a mining licence application is
underway. At the same time the Group is continuing to assess
the potential of resource projects in various commodities in other
regions in Russia and other countries of the former Soviet Union.
At West Kytlim, the Group made several PGM discoveries of
resources suitable for commercial mining and secured a mining
licence in 2015. The Group carried out a pilot mining operation
and ran a commercial operation in 2017, which was limited by
the subcontractor’s capacity to perform undertaken
commitments. A new subcontractor has been appointed and
production resumed in May 2018.
On the Kola Peninsula the Group discovered PGM
mineralisation in the Monchetundra area and following the
exploration work completed in 2016 the Group initiated the
procedure of obtaining a mining licence.
More details on both projects are contained in the Operations
update.
The Group also maintains an active interest in non-core,
innovative mining solutions including the Kamushanovsky
Uranium Project in Kyrgyzstan.
The Company’s aim is to deliver value to its shareholders
by leveraging the significant experience of its directors and
management team to advance our licences and to acquire
new projects.
Key performance indicators
At this stage of the Group’s business activities the Directors
believe it appropriate to limit the Key Performance Indicators
(KPIs) used to monitor progress in the delivery of the Group’s
strategic objectives, to assess actual performance against
targets and to aid management of the business, other than
the monitoring of licences and stages of exploration and
development.
The Board monitors relevant KPIs which it considers
appropriate for a company at Eurasia’s stage of development.
The KPIs for the Group are as follows:
Financial KPIs
Results for the year – the Group has made a loss of £2,139,130
for the year ended 31 December 2017 (2016: a profit of
£994,240). The loss of 2017 resulted from higher administration
costs at subsidiaries level, which previously would have been
Exploration expenditure – funding and development costs.
The group has incurred £175,737 (2016: £225,708) of
development costs at West Kytlim, which were required to carry
out additional drilling works under the programme of upgrading
resources to reserves.
The availability of sufficient cash to facilitate continued
investment and funding of exploration programmes and project
development is essential. The Group monitors the availability of
sufficient cash to fund work. In May 2017 the Group raised gross
funds of £1.6 million, including a $1,250,000 convertible loan
facility entered into YA II PN Ltd and arranged through Riverfort
Global Capital Ltd, a £250,000 debt facility entered into with
Sanderson Capital Partners, and a further $500,000 loan
agreement with company non-executive director Dmitry Suschov.
£181,135 was also raised through an equity placing in December
2017. At 31 December 2017 the Group had a cash balance of
£89,819 (2016: £154,674) which allowed it to continue its
Monchetundra project development, and to prepare for the 2018
Mining season at West Kytlim. It was intended that the majority
of debt funding entered into in 2017 would be repaid from
revenue generated from the 2017 mining operation at West
Kytlim, however this revenue stream did not materialise. In May
2018, the Company appointed a new lead broker, First Equity
Ltd, and successfully raised a further £500,000, $400,000 of
which was immediately used to significantly reduce YA II PN Ltd
outstanding loan, with the remainder used for working capital
purposes in the lead up to production at the West Kytlim mine.
The company is assessing other means of bringing cash reserves
to the required level, including increasing West Kytlim mine
revenues. This was demonstrated in the appointment of a new
contractor to the mining operation in early 2018. For more
details see the operations update herewith.
Non financial KPIs
Environment management – the Group has environmental
policies in place. Performance against environmental policies is
continuously monitored. The Company did minimum fieldwork
in 2017, due to West Kytlim subcontractor’s non-performance,
which would not have any environmental impact. The Directors
consider that this has served to minimize any negative impact
of current exploration activities on the environment.
Health and Safety – the Group has occupational health and
safety policies and procedures in place ensuring that all efforts
are made to minimise adverse personal and corporate outcomes,
through best practice training, implementation and monitoring.
Operational – the number of additional exploration licences
and exploration successes. There has been limited exploration
activity in the year, and the Directors are encouraged by the
prospectivity of the Group’s exploration licenses and by the
exploration results obtained to date. During the year the Group
10
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Strategic report continued
Eurasia Mining plc Company No. 3010091
has applied for a mining licence for a platinum mine at
Monchetundra area in the Kola Peninsula region in Russia.
The Directors consider that performance against all KPIs in 2017
was acceptable except for the mining operations at West Kytlim
due to subcontractor’s non-performance that was successfully
rectified in 2018 by changing the contractor and with the
production run-rate hitting the record of 6.9kg (221 oz) per 1 day.
Principal risks and uncertainties
The risks inherent in an exploration business are kept under
constant review by the Board and the Executive Committee.
The risks affecting the Group and the Company are set out
respectively in the Directors’ report and Notes 2 and 27 to the
financial statements and the principal operating risks affecting
the Group are detailed below:
Exploration and project development risks
Inherent risks associated with the failure to discover or develop
an economically recoverable ore reserve, to conclude a
definitive feasibility study, and to obtain the necessary consents
and approvals for the conduct of exploration and mining.
The Group engages in close discussion with respective
government departments to have a better understanding of the
requirements and to make sure all requirements are implemented
and duly reported to boost the prospects of the grant of permits
and licences. The Group made significant progress successfully
applying for the Monchetundra mining permit.
Run of the mine risks
The Group relies on the contractor to perform mining
operations for a share of revenue. Contractor performance
including noncompliance with agreed mining and production
schedules, machinery break down and others risks have
significant impact on the Group’s performance. The Directors
believe these risks have been considerably mitigated by the
appointment of a new contractor to the West Kytlim Mine in
January 2018 operating brand new Komatsu equipment and
brand new processing plant.
Political risk
The Group’s assets are located in Russia, in view of sanctions
imposed to certain individuals and companies in Russia from
2014 until present time, legal and economic inconsistencies
may arise. There has been no impact on the Group’s activity,
but the Group closely monitors all regulatory requirements
and changes to the laws, rules and regulation taking steps
whenever necessary to comply with regulation.
Environmental issues
The Group’s operations are subject to environmental regulation,
including environmental impact assessments and permitting.
Russian environmental legislation comprises numerous federal
and regional regulations, which are not fully harmonised and
may not be consistently interpreted. The Group makes an
assessment of the environmental impact at the time it applies
for permits and licences, which are subject to such assessment.
There is no immediate risk to the Group’s operation arising
from environmental issues, but the Group monitors
environmental regulation, to assess potential impact.
The regulatory environment
The Group’s activities are subject to extensive federal and
regional laws and regulations governing various matters, including
licensing, production, taxes, mine safety, labour standards,
occupational health and safety and environmental protections.
Amendments to current laws and regulations governing
operations and activities of mining companies or more stringent
implementation or interpretation of these laws and regulations
can have a material adverse impact on the Group and/or delay or
prevent the development or expansion of the Group’s properties
in Russia. The Group closely monitors all regulatory requirements
and changes to the laws, rules and regulation taking steps
whenever necessary to comply with regulation.
Commodity risk
A potential fall in commodity prices could lead to it becoming
uneconomic for the Group to mine its assets. The Group closely
monitors the markets for the platinum group metals, changes in
demand and supply and effect they have on the metal prices
with a view to taking necessary measures in response to such
changes, this may include stockpiling when prices are low, price
hedging when prices rise above expectation, and commodity
diversification. Also it is important to note the Group’s cost of
production is at the lower end of the global cost curve as
opposed to South Africa that produces 70% of global platinum
production. A quote from Bloomberg of 16 April 2018 states:
«“Ramaphoria” boosted the rand and revived investor sentiment
on South Africa. But deep underground in the country’s
platinum mines, there’s very little cause for optimism. Producers
in South Africa, which accounts for about 70 percent of the
world’s mined platinum, are closing shafts and cutting thousands
of jobs as a stronger rand combines with stagnating prices for
the metal in squeezing profit margins». With commodity prices
being below the cost of the majority of the production in South
Africa for several years, further declines seem unlikely.
Loss of key personnel risk
The loss of the key personnel consists of the departure
(voluntary or otherwise) of an important employee, which will,
in all likelihood, results in a financial loss or increased expense
to a small business. The expenses may be of a temporary or
a permanent nature. These increased expenses relate to the
search and hiring of a new employee, training costs for the
new hire, possible “signing” bonus and higher remuneration
packages. These types of risks cannot be avoided. While the
Group can take measures to motivate and retain existing
employees, it has limited powers in dealing with departures
by natural or legislative reasons. However, the Group is using
outsourcing to professional contractors to mitigate this risk.
Financing risk
This is the risk of running out of working and investment
capital. The Group has been relying primarily on the issue
of share capital and other financial arrangements, which due
to the risk factor require high returns to the creditors at the
Group’s expense. The Group maintains tight financial and
budgetary control to keep its operations cost effective.
Forward planning helps ensure it is adequately funded to reach
its objectives. Launch of full scale platinum and gold production
in 2018 is also of a great help to mitigate the financial risk.
By order of the Board
Alexandr Agaev
Secretary
28 June 2018
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
11
Directors’ Biographies
Eurasia Mining plc Company No. 3010091
CHRISTIAN SCHAFFALITZKY
Christian Schaffalitzky, BA(Mod), FIMMM, PGeo, CEng, age 64, is
Managing Director. With over 40 years experience in minerals
exploration, Christian Schaffalitzky was a founder of Ivernia West
PLC, where he led the exploration, discovery and development of
the Lisheen world class zinc deposit in Ireland. More recently, he
was Managing Director of Ennex International PLC, an Irish
quoted mineral exploration company, focused on zinc
development projects. He has also been engaged in precious and
base metals minerals exploration and development in Russia and
the former Soviet Union. He is Chairman of Kibo Mining plc and
on the board of two other listed companies.
GARY FITZGERALD
Gary Fitzgerald, age 64, is a Non-Executive Director. He was
previously a Director of Framlington Investment Management
Limited and has over 30 years experience in investment
management. He has diverse experience of emerging markets
including the launch of the first fund for investing in Russia in the
early 1990’s.
DMITRY SUSCHOV
Dmitry Suschov, age 40, is a Non-Executive Director and also a
major shareholder of Eurasia. Dmitry is a commodities trading
veteran (primarily various grades of metallurgical and thermal
coals) and has successfully built a major Pulverized Coal Injection
(PCI) franchise throughout Asia, Europe and America with an
annual turnover of up to $100 million, thus accumulating around
2.5% of the global PCI market share. He is also an investment
banker with extensive experience in the Russian resources
industry and has previously worked with IG Capital, MDM Bank,
PricewaterhouseCoopers and Ernst&Young as mining & metals
leader in corporate finance for Russia and CIS.
12
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ANNUAL REPORT & ACCOUNTS 2017
Directors’ report
Directors
The Directors who served during the period were:
aggregate nominal amount of £1,000,000, such authority to
expire on the date of the next Annual General Meeting.
Michael Martineau Non-Executive Chairman
(resigned on 1 July 2017)
Christian Schaffalitzky Executive Chairman
(Managing Director until 1 July 2017)
Gary FitzGerald Non-Executive Director
Dmitry Suschov Non-Executive Director
Company Secretary
Michael de Villiers (resigned 5 October 2017)
Alexandr Agaev (appointed 5 October 2017)
Directors’ interests
Share interests
The active Directors of the Company held the following
beneficial interests (including interests held by spouses and
minor children) in the ordinary shares of the Company:
M. Martineau
(resigned on 1 July 2017)
C. Schaffalitzky
G. FitzGerald
D. Suschov
31 Dec 2017
No. of shares
31 Dec 2016
No. of shares
-
17,831,403
68,475,270
20,394,101
435,357,129
49,696,674
18,608,387
284,877,066
Total
524,226,500
371,013,530
Share options
No share options were held by the Directors of the Company
at 31 December 2017 (31 December 2016 – nil).
No share options were exercised during 2017 (2016 – nil).
Share capital
Issued capital of the Company as at 31 December 2017 was:
Number
of shares
Fully paid ordinary shares at 0.1 pence 1,847,847,150
143,377,203
Deferred shares 4.9 pence
Nominal
value
£
1,847,847
7,025,483
Section 561 of the Companies Act 2006 (the “Act”) provides
that any shares being issued for cash must in general be issued
to all existing shareholders pro-rata to their holding. However,
where Directors had a general authority to allot shares, they
may be authorised by the Articles or by a special resolution to
allot shares pursuant to the authority as if the statutory pre-
emption rights did not exist.
At the General Meeting, held on 30 June 2017, the Board was
given authority for the purposes of section 551 of the Act to
allot shares in the Company or grant rights to subscribe for or
to convert any security into shares in the Company up to an
The Board has utilised authority to allot shares and issue
warrants as follows:
Date
shares issued
18 Aug 2017
09 Sep 2017
20 Nov 2017
20 Nov 2017
11 Dec 2017
11 Dec 2017
12 Dec 2017
28 Feb 2018
10 May 2018
10 May 2018
Total
Transaction
No of shares issued/ Nominal
warrants granted
value £
Issue of ordinary shares
under term of financing
arrangements
Issue of ordinary shares
under term of financing
arrangements
Issue of ordinary shares
by way of placing
Issue of ordinary shares
by way of placing
Issue of ordinary shares
under terms of a loan
conversion
Issue of ordinary shares
under term of financing
arrangements
Extra warrants to those
granted in May 2017
Issue of ordinary shares
under term of financing
arrangements
Issue of ordinary shares
by way of placing
8,900,820
8,901
10,868,449
10,868
27,262,814
27,263
37,428,550
37,429
144,076,124
144,076
76,259,904
76,260
28,447,285
28,447
10,522,058
10,522
172,166,666
172,167
Warrants granted to the
subscribers to the shares
166,666,666
166,667
682,599,336
682,600
The Board has not utilised authority to purchase the
Company’s own shares.
Risk Management
The Directors consider that assessing and monitoring the
inherent risks in the exploration business, as well as other
financial risks, is crucial for the success of the Group. Risk
assessment is essential in the Group’s planning processes.
The Board regularly reviews the performance of projects
against plans and forecasts. Further detail on management
of financial risks which includes foreign currency, interest rate,
credit, liquidity and capital risks are set out in note 27.
Going Concern
As outlined above, the Group was successful in raising
proceeds of £1.6 million in May 2017 as a convertible loan
facility maturing in May 2018. At 31 December 2017 the
Group’s net current liabilities amounted to £861,629 (2016:
£148,524). At the same time the Group had a cash balance of
£89,819 (2016: £154,674). A further gross £181,135 was raised
through an equity placing in December 2017 and £500,000
through an equity placing in May 2018.
By end of May 2018 on completion of the first three weeks of
mining operations at West Kytlim it became apparent to the
Group, that platinum revenues from the mine may exceed
expectations. The Group now expects revenues from the 2018
mining operations to contribute significantly to borrowing
commitments and to run the Group companies; however the
Group also expects to have to secure further funding in order
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
13
Directors’ report continued
to be able to continue to expand its mining operations. The
Group’s largest creditor, YA II PN Ltd, has demonstrated a
willingness to work with the Company
in restructuring their loan facility, in December of 2017, and
again in May 2018. The outstanding amount of £351,000 on
this facility has been rearranged to fall due on 18th September
2018. The Sanderson Capital Partners facility, principal amount
of £250,000, has also been re-structured and now falls due at
30th September 2018.
In June 2018 the Group entered into a loan agreement with a
company controlled by a non-executive director D. Suschov, to
borrow up to $1 million from June 2018. Once drawn down,
the loan bears interest at 9% per annum payable quarterly. The
loan is repayable in full in five years from the first drawdown
date.
In addition, a £0.5m debt facility remains in place with Darwin
Ltd which can be utilised at a short notice.
Since going into production at West Kytlim, the Group has
received considerable industry interest, especially locally.
However the Board believes this asset should continue to be
developed by the Company while the excellent relationship
between the contractor and local management team
demonstrates much higher rates of return than anticipated.
A more thorough reassessment of the project’s value will
be undertaken in due course in light of actual production
information and grades in ore. Furthermore, a discussion on
potential capital expansion including the addition of a second
wash-plant funded by our partner Techstroy is taking place now.
The Group has implemented tighter controls to minimise its
cash outflows by reducing its fixed costs and overheads and
by subletting part of the office premises. The Directors took
personal steps in conserving the Group’s cash by taking the
Company shares in lieu of payment for their remuneration and
costs.
The Directors have concluded that the combination of these
circumstances represents a reasonable expectation that the
Group has adequate resources to continue in operational
existence for the foreseeable future. For these reasons, they
continue to adopt the going concern basis in preparing the
annual report and accounts.
By order of the Board
Alexandr Agaev
Secretary
28 June 2018
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Strategic report
and the Directors’ report.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under company law the Directors must
not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs and
profit or loss of the Company and Group for that period. In
preparing these financial statements, the Directors are required
to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable IFRS, as adopted by the European
Union, have been followed, subject to any material
departures disclosed and explained in the financial
statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and Group and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and Group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors confirm that so far as each Director is aware:
• there is no relevant audit information of which the
company’s auditor is unaware; and
• the Directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware
of any relevant audit information and to establish that the
company’s auditor is aware of that information.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
14
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ANNUAL REPORT & ACCOUNTS 2017
Directors’ report continued
Corporate Governance
The Board of Directors
The Directors are responsible for the Group’s system of internal
control and for reviewing its effectiveness. The risk management
process and systems of internal control are designed to manage
rather than eliminate the risk of failure to achieve the Company’s
objectives. Any such system of internal financial control can only
provide reasonable but not absolute assurance against material
misstatement or loss.
Full Board meetings are held quarterly to review Group strategy,
direction and financial performance. The executive Directors
meet regularly to review operational reports from all the Group’s
areas of operations. The process is used to identify major
business risks and evaluate their financial implications and ensure
an appropriate control environment. Certain control over
expenditure is delegated to on site project managers subject to
Board control by means of monthly budgetary reports. Internal
financial control procedures include:
• preparation and regular review of operating budgets and
forecasts
• prior approval of all capital expenditure
• review and debate of treasury policy
• unrestricted access of non-executive Directors to all members
of senior management.
The Board, in conjunction with members of the Audit Committee,
has reviewed the effectiveness of the system of internal control for
the period from 1 January 2017 to the date of this report.
Audit Committee
The Chairman of the Audit Committee is Gary FitzGerald.
The Audit Committee may examine any matters relating to
the financial affairs of the Group and the Group’s audits.
This includes reviews of the annual financial statements and
announcements, internal control procedures, accounting
procedures, accounting policies, the appointment,
independence, objectivity, terms of reference and fees of
external auditors and such other related functions as the
Board may require.
The membership of the Audit Committee comprises the
executive Chairman Christian Schaffalitzky and a non-executive
Director, Gary FitzGerald. The external auditors have direct
access to the members of the Committee, without the presence
of the executive Directors, for independent discussions.
The membership of the Audit Committee comprises two non-
executive Directors, Michael Martineau and Gary FitzGerald.
The external auditors have direct access to the members of the
Committee, without the presence of the executive Directors, for
independent discussions.
Remuneration Committee
The Chairman of the Remuneration Committee is Gary
FitzGerald. The committee comprises two non-executive
Directors, Gary FitzGerald and Dmitry Suschov. It determines the
terms and conditions of employment and annual remuneration of
the Executive Directors. It consults with the Executive Chairman,
takes into consideration external data and comparative third
party remuneration and has access to professional advice outside
the Company.
The key policy objectives of the Remuneration Committee in
respect of the Company’s executive Directors and other senior
executives are:
a) to ensure that individuals are fairly rewarded for their
personal contribution to the Company’s overall
performance, and
b) to act as an independent committee ensuring that due
regard is given to the interests of the Company’s
Shareholders and to the financial and commercial health
of the Company.
Remuneration of executive Directors normally comprises basic
salary; under circumstances it may include discretionary
bonuses, participation in the Company’s share option scheme
and other benefits. The Company’s remuneration policy with
regard to options is to maintain an amount of not more than
10% of the issued share capital in options for the Company’s
management and employees which may include the issue of
new options in line with any new share issues.
Total Directors’ emoluments are disclosed in notes 8 and 23
to the financial statements and the Directors’ options are
disclosed above. During 2017 no options were granted to the
Directors (2016: nil).
Dividends and profit retention
No dividend is proposed in respect of the year (2016: £nil) and
the retained loss for the year attributable to the equity holders
of the parent of £2,119,657 (2016 profit of £740,265) has been
taken to reserves.
Research and future development
The Group’s activities during the year continued to be
concentrated principally on mineral exploration programmes
and the improvement of mining techniques and metallurgical
processes. While developing its core projects disclosed in the
Operations update the Group will continue studying and
searching for new “near production” projects in the
geographical areas it gained its experience in.
Auditors
Grant Thornton UK LLP are willing to continue in office and a
resolution proposing their re-appointment as auditors of the
Company and a resolution authorising the Directors to agree
their remuneration will be put to shareholders at the Annual
General Meeting.
By order of the Board
Alexandr Agaev
Secretary
28 June 2018
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
15
Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF EURASIA MINING PLC
not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you where:
• the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is not
appropriate; or
• the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the group’s or the parent company’s ability to
continue to adopt the going concern basis of accounting for
a period of at least twelve months from the date when the
financial statements are authorised for issue.
Overview of our audit approach
• Overall group materiality: £119,000 which represents 2% of
the group’s preliminary total assets;
• Key audit matters identified are the recoverability of mining
assets along with the accounting for convertible loan notes;
and
• We performed full scope audit procedures on Eurasia
Mining Plc; targeted audit procedures on Urals Alluvial
Platinum Limited, ZAO Terskaya Mining Company, ZAO
Kosvinsky Kamen: and analytical audit procedures on Eurasia
Mining (UK) Limited, Eurasia Resources Ltd, ZAO Eurasia
Mining Service and ZAO Yuksporskaya Mining Company.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most
significant assessed risks of material misstatement (whether or
not due to fraud) that we identified. These matters included
those that had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Opinion
Our opinion on the group financial statements is
unmodified
We have audited the financial statements of Eurasia Mining Plc
for the year ended 31 December 2017 which comprise the
consolidated statement of profit or loss and other
comprehensive income, the consolidated and parent company
statements of financial position, the consolidated and parent
company statements of cash flow, the consolidated and parent
company statements of changes in equity and the related
notes. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union
and, as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies
Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state
of the group’s and of the parent company’s affairs as at 31
December 2017 and of the group’s loss for the year then
ended;
• the group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Who we are reporting to
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do
16
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Independent Auditor’s Report continued
Key Audit Matters - Group
How the matter was addressed in the audit – Group
Recoverability of Mining assets
Our audit work included, but was not restricted to:
The Group has mining assets in the
production stage and exploration stage.
There is the risk that long term cash
flows will not be sufficient to realise the
value attributed to capitalised
expenditure on development of sites to
date, £4,339,633 held in property, plant
and equipment for the producing mine
and £840,793 held in intangible assets
for the mine in the exploration phase.
This could result in the impairment of
the assets. We therefore identified
recovery of mining and exploration
assets as a significant risk, which was
one of the most significant assessed
risks of material misstatement.
• Challenging management’s assertions relating to indicators of impairment for
the mining assets.
• We corroborated management’s considerations on assets where there was no
indicator for impairment, by obtaining mining license applications, reserve &
resource reports and agreeing to Group announcements.
• For the mining assets where indicators were present, we examined the fair value
less costs to dispose calculation performed by management:
• We performed arithmetical checks on the calculation.
• We challenged the appropriateness of managements’ key assumptions which
included – Discount rate, recovery rate and ore quantity used in the model
• We used valuation specialists as part of the audit team to evaluate and challenge
the discount rate used in calculating the discounted cash flows
• We assessed cash flows to current production reports, which were considered more
relevant than historical 2017 production rates due to the issues incurred in that year
• We agreed the amounts of Ore production, recovery and quantity to third party
reserve reports and into the cash flow forecast
The group's accounting policy on recoverability of mining assets is shown in note 4
to the financial statements and related disclosures are included in notes 11 and 12.
Sensitivities have been disclosed in note 5.2.4.
Key observations
Our testing did not identify any material misstatements in the recoverability of assets.
Key Audit Matters - Group
How the matter was addressed in the audit – Parent and Group
Accounting for convertible loan notes
– valuation
The parent company, Eurasia Mining
plc, entered into loan facilities with
options to convert all or part of the
loan, both principal and interest, into
shares. Some of their loans were also
issued with warrants. Management
did not use an independent valuation
expert for the conversion valuation
derivatives and developed an internally
generated model to mimic the Monte
Carlo methodology. Due to the
judgements involved in valuing the
warrants and conversion options this
could result in the incorrect accounting
treatment of embedded derivatives
which could impact the statement of
profit and loss and other comprehensive
income, statement of changes in equity
and statement of financial position. We
therefore identified convertible loan
notes as a significant risk, which was
one of the most significant assessed
risks of material misstatement.
Our audit work included, but was not restricted to:
• Agreeing the loans to underlying agreements and agreeing management views on
embedded derivatives through to contracts.
• Challenging management as to the use of the relevant valuation models to ensure
it was relevant to the situation.
• Recalculating management’s Black Scholes model used to value the warrants and
conversion options for loans with a fixed conversion rate and verifying the inputs
used.
• Using specialist valuation experts as part of the audit team to assess the
appropriateness of internally generated Monte Carlo models used by management
for valuation purposes of the convertible loan with the variable conversion rate.
• Developing our own estimate of fair value of convertible instruments and comparing
to those performed by management
• Ensure the financial statements have adequate disclosures to enable the reader of
the financial statements to understand the transaction.
The group's accounting policy on debt is shown in note 4 to the financial statements
and related disclosures are included in note19.
Key observations
We have assessed that the values produced by the internal models for the conversion
options and warrants are not materially misstated. The loans, conversion options and
warrants have been appropriately recognised in the financial statements and
adequately disclosed.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
17
Independent Auditor’s Report continued
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature,
timing and extent of our audit work and in evaluating the results of that work.
Materiality was determined as follows:
MATERIALITY MEASURE
GROUP
PARENT
Financial statements as a whole
We determined materiality for the audit
of the group financial statements as a
whole to be £119,000, which is 2% of
the group’s preliminary total assets.
This benchmark is considered the most
appropriate because the entity holds
investments and mineral assets only.
Mining operations have only just
commenced in 2016 and there has been
insignificant mining revenues earned,
therefore the key metric and focus area
for this entity is their assets.
We determined materiality for the
audit of the parent company to be
£107,000, which is based on 2%
of total assets. This benchmark is
considered the most appropriate as
the entity is an exploration entity
meaning a significant amount of
assets, coupled with minimal revenue.
We capped the parent company
materiality to 90% of the group
materiality, rounded to the nearest
£’000, as parent materiality cannot
be greater than group.
Performance materiality used to
drive the extent of our testing
We used a different level of materiality,
performance materiality, to drive the
extent of our testing and this was set at
75% of financial statement materiality
for the audit of the group financial
statements.
We used a different level of
materiality, performance materiality,
to drive the extent of our testing
and this was set at 75% of financial
statement materiality for the audit
of the company financial statements.
Communication of misstatements to
the audit committee
We determined the threshold at which
we will communicate misstatements
to the audit committee to be £6,000.
In addition we will communicate
misstatements below that threshold
that, in our view, warrant reporting on
qualitative grounds.
We determined the threshold at
which we will communicate
misstatements to the audit committee
to be £5,400. In addition we will
communicate misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
An overview of the scope of our audit
Our audit approach was a risk-based approach founded
on a thorough understanding of the group's business, its
environment and risk profile and in particular included:
Limited, ZAO Terskaya Mining Company, ZAO Kosvinsky
Kamen: and analytical audit procedures on Eurasia Mining
(UK) Limited, Eurasia Resources Ltd, ZAO Eurasia Mining
Service and ZAO Yuksporskaya Mining Company.
• Evaluation by the group audit team of identified components
• As part of the planning process, assessing the group’s
to assess the significance of that component and to
determine the planned audit response based on a measure
of materiality. Significance was determined by considering
each as a percentage of the group's total assets, revenues
and profit before taxation;
• We performed full scope audit procedures on Eurasia Mining
Plc; targeted audit procedures on Urals Alluvial Platinum
internal processes and control environment. Eurasia Mining
Plc has centralised processes and controls over the key areas
of our audit focus. Group management are responsible for all
judgements and significant risk areas. A centralised finance
team performs all accounting processes and we tailored our
audit response accordingly with all audit work being
undertaken by the group audit team.
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ANNUAL REPORT & ACCOUNTS 2017
Independent Auditor’s Report continued
• The total percentage coverage of full scope or targeted
• the parent company financial statements are not in
procedures over group revenue was 100% and loss before
tax was 99%
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• The total percentage coverage of full scope or targeted
• we have not received all the information and explanations
procedures over total assets was 92%
we require for our audit.
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities
statement set out on pages 13 to 15 the directors are
responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to
enable the preparation of group financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis
of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Christopher Raab
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
28 June 2018
• Our audit approach was fully substantive in nature and
consistent with the 2016 approach.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the
annual report set out on pages 3 to 15, other than the financial
statements and our auditor’s report thereon. Our opinion on
the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial
statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report under
the Companies Act 2006
In the light of the knowledge and understanding of the group
and the parent company and its environment obtained in the
course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
19
Consolidated statement of profit or loss and
Eurasia Mining plc
Company No. 3010091
other comprehensive income
For the year ended 31 December 2017
Sales
Cost of sales
Gross (loss)/ profit
Administrative costs
Finance cost
Other gains and losses
(Loss)/profit before tax
Income tax expense
(Loss)/profit for the period
Other comprehensive income:
Items that will not be reclassified subsequently to profit and loss:
NCI share of foreign exchange differences on translation of foreign operations
Items that will be reclassified subsequently to profit and loss:
Parent’s share of foreign exchange differences on translation of foreign operations
Other comprehensive income for the period, net of tax
Total comprehensive (loss)/ profit for the period
(Loss)/profit for the period attributable to:
Equity holders of the parent
Non-controlling interest
Total comprehensive (loss)/profit for the period attributable to:
Equity holders of the parent
Non-controlling interest
(Loss)/profit per share attributable to equity holders of the parent:
Basic (loss)/profit (pence per share)
Diluted (loss)/profit (pence per share)
Year to
31 December
2017
£
Year to
31 December
2016
£
Note
183,998
(217,540)
139,862
(130,688)
(33,542)
9,174
(1,022,664)
(1,113,318)
30,394
(2,139,130)
-
(654,263)
(224,814)
1,864,143
994,240
-
(2,139,130)
994,240
(13,768)
(132,190)
(79,996)
(248,650)
(93,764)
(380,840)
(2,232,894)
613,400
(2,119,657)
(19,473)
740,265
253,975
(2,139,130)
994,240
(2,199,653)
(33,241)
491,615
121,785
(2,232,894)
613,400
(0.14)
(0.09)
0.05
0.05
9
10
13
13
22
22
In accordance with section 408(3) of the Companies Act 2006, Eurasia Mining plc is exempt from the requirement to present its own
statement of profit or loss. The amount of loss for the financial year recorded within the financial statements of Eurasia Mining plc is
£1,480,763 (2016: loss of £655,352).
The accompanying notes are an integral part of these financial statements.
20
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Consolidated statement of financial position
Eurasia Mining plc
Company No. 3010091
As at 31 December 2017
ASSETS
Non-current assets
Property, plant and equipment
Assets in the course of construction
Intangible assets
Investments in joint operations
Other financial assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Issued capital
Other reserves
Accumulated losses
Equity attributable to equity holders of the parent
Non-controlling interest
Total equity
LIABILITIES
Current liabilities
Borrowings
Trade and other payables
Other financial liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
31 December
2017
£
31 December
2016
£
Note
11
11
12
13
14
15
16
18
13
19
20
21
4,370,475
37,814
840,793
-
445,596
4,402,272
39,216
813,135
44,131
489,312
5,694,678
5,788,066
5,605
93,387
89,819
23,844
149,146
154,674
188,811
327,664
5,883,489
6,115,730
26,623,034
3,403,368
(24,484,719)
25,577,993
3,281,842
(22,544,900)
5,541,683
(708,634)
6,314,935
(675,393)
4,833,049
5,639,542
588,810
236,630
225,000
318,314
157,874
-
1,050,440
476,188
1,050,440
476,188
5,883,489
6,115,730
These financial statements were approved by the board on 28 June 2018 and were signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial statements.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
21
Company statement of financial position
As at 31 December 2017
Eurasia Mining plc
Company No. 3010091
ASSETS
Non-current assets
Property, plant and equipment
Investments in subsidiaries
Investments in joint operations
Total non-current assets
Current assets
Trade and other receivables
Other financial assets
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Issued capital
Other reserves
Accumulated losses
Total equity
LIABILITIES
Current liabilities
Borrowings
Trade and other payables
Other financial liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
31 December
2017
31 December
2016
restated
31 December
2015
restated
Note
£
£
£
11
13
13
15
14
27
16
18
19
20
21
44
1,277,489
-
238
1,277,489
44,131
705
1,277,489
-
1,277,533
1,321,858
1,278,194
46,703
6,306,204
61,500
80,040
5,765,654
116,428
70,921
4,915,081
83,444
6,414,407
5,962,122
5,069,446
7,691,940
7,283,980
6,347,640
26,623,034
3,744,216
(23,763,393)
25,577,993
3,542,694
(22,462,468)
24,185,436
3,542,694
(21,807,116)
6,603,857
6,658,219
5,921,014
539,156
323,927
225,000
318,314
307,447
-
-
426,626
-
1,088,083
625,761
426,626
1,088,083
625,761
426,626
7,691,940
7,283,980
6,347,640
These financial statements were approved by the board on 28 June 2018 and were signed on its behalf by:
C. Schaffalitzky
Executive Chairman
The accompanying notes are an integral part of these financial statements.
22
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Consolidated statement of changes in equity
For the year ended 31 December 2017
Eurasia Mining plc
Company No. 3010091
Share
capital
£
Share
premium
£
Deferred
shares
£
Capital
redemption
and other
reserves
£
Foreign
currency
translation
reserve
£
Accumulated
losses
£
Total
attributable
to owners
of parent
£
Non-
controlling
interest
£
Total
£
Balance at 1 January 2016
Issue of ordinary share capital for cash
Shares issued in lieu of loan note interest
Issue of shares for professional services
Share issue cost
1,269,043 15,890,910 7,025,483 3,542,694
-
-
-
-
723,207
458,542
20,063
(50,000)
145,350
90,458
4,937
-
-
-
-
-
Transactions with owners
240,745
1,151,812
Profit for the period
Exchange differences on translation of
foreign operations
Total comprehensive income
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(12,202)
-
-
-
-
(23,285,165)
-
-
-
-
4,430,763
868,557
549,000
25,000
(50,000)
(797,178) 3,633,585
868,557
549,000
25,000
(50,000)
-
-
-
-
-
-
-
1,392,557
-
1,392,557
740,265
740,265
253,975
994,240
(248,650)
-
(248,650)
(132,190)
(380,840)
(248,650)
740,265
491,615
121,785
613,400
Balance at 31 December 2016
1,509,788 17,042,722 7,025,483 3,542,694
(260,852) (22,544,900) 6,314,935
(675,393) 5,639,542
1,509,788 17,042,722 7,025,483 3,542,694 (260,852) (22,544,900) 6,314,935 (675,393) 5,639,542
389,422
655,619
248,471
458,511
389,422
655,619
140,951
197,108
-
-
-
-
-
-
-
-
-
-
Balance at 1 January 2017
Issue of ordinary share capital for cash
Shares issued in lieu of loan note interest
Recognition of warrants issued with
convertible loan notes
De-recognition of warrants due to
restructure of convertible loan notes
Recognition of equity element of
convertible loan notes
-
-
-
-
-
-
Transactions with owners
338,059
706,982
Loss for the period
Exchange differences on translation of
foreign operations
Total comprehensive income
-
-
-
-
-
-
-
-
-
-
-
-
-
307,075
(179,838)
74,285
201,522
-
-
-
-
-
-
-
-
-
307,075
179,838
-
-
74,285
-
-
-
307,075
-
74,285
179,838
1,426,401
- 1,426,401
(2,119,657)
(2,119,657)
(19,473)
(2,139,130)
(79,996)
-
(79,996)
(13,768)
(93,764)
(79,996)
(2,119,657)
(2,199,653)
(33,241)
(2,232,894)
Balance at 31 December 2017
1,847,847 17,749,704 7,025,483 3,744,216 (340,848) (24,484,719) 5,541,683 (708,634) 4,833,049
The accompanying notes are an integral part of these financial statements.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
23
Company statement of changes in equity
For the year ended 31 December 2017
Eurasia Mining plc
Company No. 3010091
Share
capital
£
Share
premium
£
Deferred
shares
£
Other
reserves
£
Retained
loss
£
Total
£
Balance at 1 January 2016
Issue of ordinary share capital for cash
Shares issued in lieu of loan note interest
Issue of shares for professional services
Share issue cost
1,269,043 15,890,910
723,207
458,542
20,063
(50,000)
145,350
90,458
4,937
-
7,025,483
-
-
-
-
3,542,694 (21,807,116)
-
-
-
-
-
-
-
-
5,921,014
868,557
549,000
25,000
(50,000)
Transactions with owners
240,745
1,151,812
Profit and total comprehensive income
-
-
-
-
-
-
-
1,392,557
(655,352)
(655,352)
Balance at 31 December 2016
1,509,788 17,042,722
7,025,483
3,542,694
(22,462,468)
6,658,219
Balance at 1 January 2017
Issue of ordinary share capital for cash
Shares issued under terms of the loan agreements
Recognition of warrants issued with convertible
loan notes
De-recognition of warrants due to restructure of
convertible loan notes
Recognition of equity element of convertible
loan notes
1,509,788 17,042,722
248,471
458,511
140,951
197,108
7,025,483
-
-
3,542,694
-
-
(22,462,468)
-
-
6,658,219
389,422
655,619
-
-
-
-
-
-
-
-
-
-
-
307,075
-
307,075
(179,838)
179,838
-
74,285
-
74,285
201,522
179,838
1,426,401
-
(1,480,763)
(1,480,763)
Transactions with owners
338,059
706,982
Loss and total comprehensive income
-
-
Balance at 31 December 2017
1,847,847
17,749,704
7,025,483
3,744,216 (23,763,393)
6,603,857
The accompanying notes are an integral part of these financial statements.
24
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Consolidated statement of cash flows
For the year ended 31 December 2017
Eurasia Mining plc
Company No. 3010091
Cash flows from operating activities
(Loss)/profit for the period
Adjustments for:
Depreciation of non-current assets
Finance costs recognised in profit or loss
Impairment loss recognised on trade and other receivables
Loss on disposal of investment in joint operations
Gain on valuation of derivative financial instrument
Gain on a loan settlement
Net foreign exchange loss/(gain)
Expense recognised in consolidated statement of profit or loss in
respect of equity-settled share-based payment
Movement in working capital
Decrease/(increase)/ in inventories
Decrease in trade and other receivables
Increase/(decrease)/ in trade and other payables
Cash outflow from operations
Income tax paid
Net cash used in operating activities
Cash flows from investing activities
Contributed to joint operations
Purchase of property, plant and equipment
Invested into assets under construction
Payment for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of equity shares
Proceeds from borrowings
Repayment of borrowings
Net cash proceeds from financing activities
Net decrease in cash and cash equivalents
Effects of exchange rate changes on the balance of cash held in foreign currencies
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
The accompanying notes are an integral part of these financial statements.
Note
11
19
9
9
9
9
11
11
12
16
19
19
Year to
31 December
2017
£
Year to
31 December
2016
£
(2,139,130)
994,240
15,413
1,113,318
-
44,495
(76,863)
(167,088)
169,062
17,635
224,814
95,215
-
-
-
(1,959,358)
-
25,000
(1,040,793)
(602,454)
17,387
52,567
81,117
(23,530)
46,371
(203,036)
(889,722)
(782,649)
-
(889,722)
-
(782,649)
(364)
(179,873)
-
(69,290)
(44,131)
(3,578)
(39,216)
(620,416)
(249,527)
(707,341)
389,422
1,664,157
(960,550)
818,557
892,500
(250,000)
1,093,029
1,461,057
(46,220)
(18,635)
154,674
(28,933)
78,682
104,925
89,819
154,674
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
25
Company statement of cash flows
For the year ended 31 December 2017
Cash flows from operating activities
(Loss)/profit for the period
Adjustments for:
Depreciation of non-current assets
Finance costs recognised in profit or loss
Gain on valuation of derivative financial instrument
Gain on debt settlement
Loss on disposal of investment in joint operations
Net foreign exchange (gain)/loss
Expense recognised in statement of profit or loss in respect of equity-settled
share-based payment
Note
19
9
9
9
9
Movement in working capital
(Decrease)/increase in trade and other receivables
Increase /(decrease) in trade and other payables
Cash outflow from operations
Income tax paid
Net cash used in operating activities
Cash flows from investing activities
Contributed to joint operations
Amounts advanced to related party
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of equity shares
Proceeds from borrowings
Repayment of borrowings
Net cash proceeds from financing activities
Eurasia Mining plc
Company No. 3010091
Year to
31 December
2017
£
Year to
31 December
2016
£
(1,480,763)
(655,352)
194
1,113,234
(76,863)
(167,088)
44,495
(32,047)
467
224,814
-
-
-
1,818
-
25,000
(598,838)
(403,253)
33,337
10,480
(549,021)
-
(549,021)
(9,119)
(121,762)
(534,134)
-
(534,134)
(364)
(540,550)
(44,131)
(850,573)
(540,914)
(894,704)
16
19
19
389,422
1,610,663
(956,630)
818,557
892,500
(250,000)
1,043,455
1,461,057
Net decrease in cash and cash equivalents
Effects of exchange rate changes on the balance of cash held in foreign currencies
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(46,480)
(8,448)
116,428
32,219
765
83,444
61,500
116,428
The accompanying notes are an integral part of these financial statements.
26
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements
For the year ended 31 December 2017
1 General information
Eurasia Mining Plc (the “Company”) is a public limited
company incorporated and domiciled in Great Britain with its
registered office and principal place of business at 2nd Floor,
85-87 Borough High Street, London SE1 1NH. The Company’s
shares are listed on the AIM Market of the London Stock
Exchange plc. The principal activities of the Company and its
subsidiaries (the “Group”) are related to the exploration for
and development of platinum group metals, gold and other
minerals in Russia.
Eurasia Mining Plc’s consolidated financial statements are
presented in Pounds Sterling (£), which is also the functional
currency of the parent company.
2 Going concern
As outlined above, the Group was successful in raising
proceeds of £1.6 million in May 2017 as a convertible loan
facility maturing in May 2018. At 31 December 2017 the
Group’s net current liabilities amounted to £861,629 (2016:
£148,524). At the same time the Group had a cash balance of
£89,819 (2016: £154,674). A further gross £181,135 was raised
through an equity placing in December 2017 and £500,000
through an equity placing in May 2018.
By end of May 2018 on completion of the first three weeks of
mining operations at West Kytlim it became apparent to the
Group, that platinum revenues from the mine may exceed
expectation. The Group now expects revenues from the 2018
mining operations to contribute significantly to borrowing
commitments and to run the Group companies; however the
Group also expects to have to secure further funding in order
to be able to continue to expand its mining operations. The
Group’s largest creditor, YA II PN Ltd, has demonstrated a
willingness to work with the company in restructuring their
loan facility, in December of 2017, and again in May 2018.
The outstanding amount of £351,000 on this facility has been
rearranged to fall due on 18th September 2018. The Sanderson
Capital Partners facility, principal amount of £250,000, has also
been re-structured and now falls due at 30th September 2018.
In June 2018 the Group entered into a loan agreement with a
company controlled by a non-executive director D. Suschov, to
borrow up to $1 million from June 2018. Once drawn down, the
loan bears interest at 9% per annum payable quarterly. The loan
is repayable in full in five years from the first drawdown date.
In addition, a £0.5m debt facility remains in place with Darwin
Ltd which can be utilised at a short notice.
Since going into production at West Kytlim, the Group has
received considerable industry interest, especially locally.
However the Board believes this asset should continue to be
developed by the Company while the excellent relationship
between the contractor and local management team
demonstrates much higher rates of return than anticipated.
A more thorough reassessment of the project’s value will
be undertaken in due course in light of actual production
information and grades in ore. Furthermore, a discussion on
potential capital expansion including the addition of a second
wash-plant funded by our partner Techstroy is taking place now.
The Group has implemented tighter controls to minimise its
cash outflows by reducing its fixed costs and overheads and
by subletting part of the office premises. The Directors took
personal steps in conserving the Group’s cash by taking the
Company shares in lieu of payment for their remuneration
and costs.
The Directors have concluded that the combination of these
circumstances represents a reasonable expectation that the
Group has adequate resources to continue in operational
existence for the foreseeable future. For these reasons, they
continue to adopt the going concern basis in preparing the
annual report and accounts.
3 Changes in accounting policies
3.1 New and revised relevant standards that are effective
for annual periods commencing on or after 1 January
2017
Amendments to IAS 7 Disclosure Initiative
(effective 1 January 2017)
The amendments require an entity to provide disclosures
that enable users of financial statements to evaluate changes
in liabilities arising from financing activities.
Amendments to IAS 12 Recognition of Deferred Tax Assets
for Unrealised Losses (effective 1 January 2017)
The amendments clarify the following:
1. Decreases below cost in the carrying amount of a fixed-rate
debt instrument measured at fair value for which the tax
base remains at cost give rise to a deductible temporary
difference, irrespective of whether the debt instrument’s
holder expects to recover the carrying amount of the debt
instrument by sale or by use, or whether it is probable that
the issuer will pay all the contractual cash flows;
2. When an entity assesses whether taxable profits will be
available against which it can utilise a deductible temporary
difference, and the tax law restricts the utilisation of losses to
deduction against income of a specific type (e.g. capital losses
can only be set off against capital gains), an entity assesses a
deductible temporary difference in combination with other
deductible temporary differences of that type, but separately
from other types of deductible temporary differences;
3. The estimate of probable future taxable profit may include
the recovery of some of an entity’s assets for more than their
carrying amount if there is sufficient evidence that it is
probable that the entity will achieve this; and
4. In evaluating whether sufficient future taxable profits are
available, an entity should compare the deductible
temporary differences with future taxable profits excluding
tax deductions resulting from the reversal of those deductible
temporary differences.
The adoption of these Standards and Interpretations has had
no material impact on the financial statements of the Group
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
27
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
3.2 Standards, amendments and interpretations to existing
standards that are not yet effective and have not been
adopted early by the Group
At the date of authorisation of these financial statements,
certain new standards, amendments and interpretations to
existing standards have been published by the IASB but are not
yet effective, and have not been adopted early by the Group.
Management anticipates that all of the relevant pronouncements
will be adopted in the Group’s accounting policies for the first
period beginning after the effective date of the pronouncement.
Information on new standards, amendments and interpretations
that are expected to be relevant to the Group’s financial
statements is provided below. Certain other new standards and
interpretations have been issued but are not expected to have
a material impact on the Group’s financial statements.
IFRS 9 Financial Instruments (effective 1 January 2018)
IFRS 9 represents the completion of its project to replace
IAS 39 ‘Financial Instruments: Recognition and Measurement’.
The new standard introduces extensive changes to IAS 39’s
guidance on the classification and measurement of financial
assets and introduces a new ‘expected credit loss’ model for
the impairment of financial assets. IFRS 9 also provides new
guidance on the application of hedge accounting.
IFRS 15 Revenue from contracts with customers
(effective 1 January 2018)
The IASB has issued a new standard for the recognition of
revenue. This will replace IAS 18 which covers contracts for
goods and services and IAS 11 which covers construction
contracts.
The new standard is based on the principle that revenue is
recognised when control of a good or service transfers to a
customer – so the notion of control replaces the existing notion
of risks and rewards.
IFRS 16 Leases (effective 1 January 2019)
IASB released IFRS 16 ‘Leases’, which will require lessees to
account for leases ‘on-balance sheet’ by recognising a ‘right-
of-use’ asset and a lease liability.
IFRS 16 also:
• changes the definition of a lease;
• sets requirements on how to account for the asset and
liability, including complexities such as non-lease elements,
variable lease payments and option periods;
• provides exemptions for short-term leases and leases of
low value assets;
• changes the accounting for sale and leaseback
arrangements;
• largely retains IAS 17’s approach to lessor accounting;
• introduces new disclosure requirements.
Amendments to IFRS 2 Classification and Measurement
of Share-based Payment Transactions
(effective 1 January 2018)
The amendments clarify the following:
1. In estimating the fair value of a cash-settled share-based
payment, the accounting for the effects of vesting and non-
vesting conditions should follow the same approach as for
equity-settled share-based payments.
2. Where tax law or regulation requires an entity to withhold
a specified number of equity instruments equal to the
monetary value of the employee’s tax obligation to meet
the employee’s tax liability which is then remitted to the tax
authority, i.e. the share-based payment arrangement has
a ‘net settlement feature’, such an arrangement should be
classified as equity-settled in its entirety, provided that the
share-based payment would have been classified as equity-
settled had it not included the net settlement feature.
3. A modification of a share-based payment that changes the
transaction from cash-settled to equity-settled should be
accounted for as follows:
• the original liability is derecognised;
• the equity-settled share-based payment is recognised at the
modification date fair value of the equity instrument granted
to the extent that services have been rendered up to the
modification date; and
• any difference between the carrying amount of the liability
at the modification date and the amount recognised in
equity should be recognised in profit or loss immediately.
Amendments to IFRS 10 and IAS 28 Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture (effective on or after the date to be determined)
The amendments to IFRS 10 and IAS 28 deal with situations
where there is a sale or contribution of assets between an
investor and its associate or joint venture. Specifically, the
amendments state that gains or losses resulting from the
loss of control of a subsidiary that does not contain a business
in a transaction with an associate or a joint venture that is
accounted for using the equity method, are recognised in
the parent’s profit or loss only to the extent of the unrelated
investors’ interests in that associate or joint venture. Similarly,
gains and losses resulting from the re-measurement of
investments retained in any former subsidiary (that has become
an associate or a joint venture that is accounted for using the
equity method) to fair value are recognised in the former
parent’s profit or loss only to the extent of the unrelated
investors’ interests in the new associate or joint venture.
The directors of the Company do not anticipate that the
application of these amendments will have a material impact
on the Group’s consolidated financial statements.
4 Summary of significant accounting policies
4.1 Basis of preparation
The consolidated financial statements of the Group and the
Company financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards
Board (IASB) as adopted by the EU.
These financial statements have been prepared under the
historical cost convention. The accounting policies have been
applied consistently throughout the Group for the purposes
of preparation of these consolidated financial statements.
4.2 Presentation of financial statements
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements.
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ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
The Group has elected to present the “Consolidated Statement
of Profit or Loss” in one statement.
or loss, if any, in profit or loss or other comprehensive income,
as appropriate.
4.3 Basis of consolidation
4.5 Interests in joint arrangements
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the
Company. Control is achieved where the Company has all of
the following:
• Power over investee;
• Exposure, or rights, to variable returns from its involvement
with the investee;
• The ability to use its power over the investee to affect the
amount of investor’s returns.
The results of subsidiaries acquired or disposed of are included
in the Consolidated Statement of Profit or Loss from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
in line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses
are eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group’s equity
therein. Non-controlling interests consist of the amount of
those interests at the date of the original business combination
and the non-controlling party’s share of changes in equity since
the date of the combination.
4.4 Business combinations
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the sum
of the acquisition-date fair values of assets transferred, liabilities
incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are
expensed as incurred.
The Group recognises identifiable assets acquired and liabilities
assumed in a business combination regardless of whether they
have been previously recognised in the acquiree’s financial
statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their acquisition-
date fair values.
Goodwill is stated after separate recognition of identifiable
intangible assets. It is calculated as the excess of the sum of
a) fair value of consideration transferred, b) the recognised
amount of any non-controlling interest in the acquiree and
c) acquisition-date fair value of any existing equity interest in
the acquiree, over the acquisition-date fair values of identifiable
net assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (ie gain on a bargain
purchase) is recognised as a profit or loss immediately.
A joint venture is a type of joint arrangement whereby the
parties that have joint control of the arrangement have rights
to the net assets of the joint venture. Joint control is the
contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
The considerations made in determining significant influence
or joint controls are similar to those necessary to determine
control over subsidiaries.
The Group reports its interests in jointly controlled entities
using the equity method of accounting, except when the
investment is classified as held for sale.
Under the equity method, investments in joint ventures are
carried in the consolidated statement of financial position at
cost as adjusted for post-acquisition changes in the Group’s
share of the net assets of the joint venture, less any impairment
in the value of individual investments. Losses of a joint venture
in excess of the Group’s interest in that joint venture are not
recognised, unless the Group has incurred legal or constructive
obligations or made payments on behalf of the joint venture.
Any excess of the cost of acquisition over the Group’s share
of the net fair value of the identifiable assets, liabilities and
contingent liabilities of the joint venture recognised at the date
of acquisition is recognised as goodwill.
The goodwill, if any is included within the carrying amount of
the investment and is assessed annually for impairment as part
of the investment. Any excess of the Group’s share of the net
fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of acquisition, after reassessment, is
recognised immediately as a profit or loss.
Unrealised gains on transactions between the Group and
its joint venture are eliminated to the extent of the Group’s
interest in the joint venture. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
4.6 Foreign currencies
Functional and presentation currency
The individual financial statements of each group entity are
prepared in the currency of the primary economic environment
in which the entity operates (“the functional currency”). The
consolidated financial statements are presented in GBP, which
is the functional and the presentation currency of the Company.
Transaction and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the profit
or loss.
In a business combination achieved in stages, the Group
re-measure its previously held equity interest in the acquiree
at its acquisition-date fair value and recognise the resulting gain
Non-monetary items that are measured in terms of historical
cost in a foreign currency are not retranslated.
ANNUAL REPORT & ACCOUNTS 2017
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29
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
Group companies
The results and financial position of all the group entities (none
of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
• assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of
that statement of financial position;
• income and expenses for each Statement of Profit or Loss are
translated at average exchange rates (unless this average is
not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates
of the transactions); and
• all resulting exchange differences are recognised as a
separate component of other comprehensive income.
4.7 Share-based payments
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instrument at the grant date. Fair value is measured by
use of Black Scholes model. The expected life used in the
model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
The fair value determined at the grant date of the equity-
settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate
of shares that will eventually vest.
Equity-settled share-based payment transactions with other
parties are measured at the fair value of the goods and services
received, except where the fair value cannot be estimated
reliably, in which case they are measured at the fair value of
the equity instruments granted, measured at the date the entity
obtains the goods or the counterparty renders the service.
All equity-settled share-based payments are ultimately
recognised as an expense in the profit or loss with a
corresponding credit to “Share-based payments reserve".
Upon exercise of share options the proceeds received net of
attributable transaction costs are credited to share capital,
and where appropriate share premium. No adjustment is made
to any expense recognised in prior periods if share options
ultimately exercised are different to that estimated on vesting
or if the share options vest but are not exercised.
When share options lapse or are forfeited the respective
amount recognised in the Share-based payment reserve is
reversed and credited to accumulated profit and loss reserve.
4.8 Revenue
Goods sold
Revenue is measured at the fair value of the consideration
received or receivable (excluding VAT), net of returns, trade
discounts and volume rebates.
Revenue is recognised when persuasive evidence exists, usually
in the form of an executed sales agreement, that the significant
risks and rewards of ownership have been transferred to the
customer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated
reliably, there is no continuing management involvement with the
goods, and the amount of revenue can be measured reliably.
The timing of the transfers of risks and rewards varies depending
on the individual terms of the sales agreement. For sales of the
platinum group and other metals, the transfer usually occurs
upon receipt by the customer.
Services
Revenue comprises of project management services to external
customers (excluding VAT). Consideration receivable from
customers is only recorded as revenue to the extent that the
Company has performed its contractual obligations in respect
of that consideration.
4.9 Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Current tax
The tax payable is based on taxable profit for the year.
Taxable profit differs from profit as reported in the statement
of comprehensive income because it excludes items of income
or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the statement
of financial position date.
Deferred tax
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, the deferred
income tax is not accounted for if it arises from initial
recognition of goodwill, initial recognition of an asset or liability
in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable
profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantively enacted by
the statement of financial position date and are expected to
apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that
it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences
arising on investments in subsidiaries and associates, except
where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
4.10 Property, plant and equipment
Mining assets
Mining assets are stated at cost less accumulated depreciation.
Mining assets include the cost of acquiring and developing
mining assets and mineral rights, buildings, vehicles, plant and
machinery and other equipment located on mine sites and
used in the mining operations.
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ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
Mining assets, where economic benefits from the asset are
consumed in a pattern which is linked to the production level,
are depreciated using a unit of production method based on
the volume of ore reserves. This results in a depreciation charge
proportional to the depletion of reserves. Where the mining
plan anticipates future capital expenditure to support the
mining activity over the life of the mine, the depreciable
amount is adjusted for such estimated future expenditure.
Other assets
Freehold properties held for administrative purposes, are stated
in the statement of financial position at cost.
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
it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs. Where
a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified.
Fixtures and equipment are stated at cost less accumulated
depreciation and any accumulated impairment losses.
Depreciation is charged so as to write off the cost or valuation
of assets over their estimated useful lives, using the straight-line
method. The estimated useful lives, residual values and
depreciation method are reviewed at each year end, with the
effect of any changes in estimate accounted for on a
prospective basis.
The estimated useful lives are as follows:
Property
Office equipment
Furniture and fittings
30 years
3 years
5 years
The 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 or loss.
4.11 Intangible assets
Exploration and evaluation of mineral resources
Exploration and evaluation expenditure comprises costs that
are directly attributable to:
• researching and analysing existing exploration data;
• conducting geological studies, exploratory drilling and
sampling;
• examining and testing extraction and treatment methods;
and/or
• compiling prefeasibility and feasibility studies.
Exploration expenditure relates to the initial search for deposits
with economic potential. Evaluation expenditure arises from
a detailed assessment of deposits that have been identified
as having economic potential. Such capitalised evaluation
expenditure is reviewed for impairment at each statement of
financial position date. The review is based on a status report
regarding the Group’s intentions for development of the
undeveloped property. Subsequent recovery of the resulting
carrying value depends on successful development of the area
of interest or sale of the project. If a project does not prove
viable, all irrecoverable costs associated with the project net
of any related impairment provisions are written off.
4.12 Impairment testing intangible assets and property,
plant and equipment
At each statement of financial position date, the Group
reviews the carrying amounts of the assets to determine
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment
annually, and whenever there is an indication that the asset
may be impaired.
In assessing whether an impairment is required, the carrying
value of the asset is compared with its recoverable amount.
The recoverable amount is the higher of the fair value less
costs of disposal (FVLCD) and value in use (VIU). The FVLCD
is estimated based on future discounted cash flows expected
to be generated from the continued use of the asset,
including any expansion prospects and eventual disposal,
using market based commodity prices, exchange
assumptions, estimated quantities of recoverable minerals,
production levels, operating costs and capital requirements
based on the latest Life of mine plans. These cash flows were
discounted using a real post-tax discount rate that reflect the
current market assessments of time value of money.
Value in use is determined as the present value of the
estimated cash flows expected to arse from continued use in
its current form and eventual disposal. Value in use cannot
take into consideration future development. The assumptions
used in the calculation are often different than those used in
a FVLCD and therefore is likely to yield a different result.
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
immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment
loss is treated as a revaluation decrease.
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 of the assets is recognised
immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of
the impairment loss is treated as a revaluation increase.
4.13 Inventories
Inventories are measured at the lower of cost and net realisable
value. The cost of inventories is based on the first-in first-out
principle, and includes expenditure incurred in acquiring the
inventories, production or conversion costs and other costs
ANNUAL REPORT & ACCOUNTS 2017
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31
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
incurred in bringing them to their existing location and condition.
In the case of manufactured inventories and work in progress,
cost includes an appropriate share of production overheads
based on normal operating capacity.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and selling expenses.
4.14 Financial instruments
Financial assets and liabilities are recognised on the group’s
statement of financial position when the group has become
a party to the contractual provisions of the instrument.
Financial assets
Loans and receivables
Trade receivables, loans, cash and cash equivalents, and other
receivables that have fixed or determinable payments that are
not quoted in an active market are classified as ‘loans and
receivables’. Loans and receivables are measured initially fair
value plus transaction costs and subsequently at amortised
cost using the effective interest method less any impairment.
Interest income is recognised by applying the effective interest
rate, except for short-term receivables where the recognition
of interest would be immaterial.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on
deposit with banks.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at
each statement of financial position date. Financial assets are
impaired where there is objective evidence that, as a result of
one or more events that occurred after the initial recognition
of the financial asset, the estimated future cash flows of the
investment have been impacted. For financial assets carried at
amortised cost, the amount of the impairment is the difference
between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective
interest rate.
The carrying amount of the financial asset is reduced by
the impairment loss directly for all financial assets with the
exception of trade receivables where the carrying amount
is reduced through the use of an allowance account.
When a trade receivable is uncollectible, it is written off against
the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance
account. Changes in the carrying amount of the allowance
account are recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed through
profit or loss to the extent that the carrying amount of the
investment at the date the impairment is reversed does not
exceed what the amortised cost would have been had the
impairment not been recognised.
Impairment losses recognised in the Statement of Profit or Loss
on equity instruments are not reversed through the Statement
of Profit or Loss. Impairment losses recognised previously on
debt securities are reversed through the Statement of Profit or
Loss when the increase can be related objectively to an event
occurring after the impairment loss was recognised in the
Statement of Profit or Loss.
Revision in timing of cash flows
Where there is a change in the planned timing of repayment
of loans or receivables the carrying amount of these financial
assets or liabilities are adjusted to reflect the revised estimated
cash flows. The present value of the estimated future cash flows
is computed by reference to the effective interest rate of the
item, the adjustment is recognised in profit or loss as income
or expense.
Financial liabilities and equity instruments issued
by the Group
Classification as debt or equity
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 entity after
deducting all of its financial liabilities.
Where the contractual liabilities of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities, and are presented as such in the consolidated
statement of financial position. Finance costs and gains or
losses relating to financial liabilities are included in the
Statement of Profit or Loss. Finance costs are calculated so as
to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any
features meeting the definition of a financial liability then such
capital is classed as an equity instrument. Dividends and
distributions relating to equity instruments are debited direct
to equity.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net
of transaction costs.
Other financial liabilities are subsequently measured at
amortised cost using the effective interest method, with interest
expense recognised on an effective yield basis.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability, or, where
appropriate, a shorter period.
Embedded derivatives
Derivatives embedded in non-derivative host contracts are
treated as separate derivatives when they meet the definition
of a derivative, their risks and characteristics are not closely
related to those of the host contracts and the contracts are not
measured at fair value through profit and loss.
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Notes to the consolidated financial statements continued
For the year ended 31 December 2017
4.15 Segmental reporting
5.2.3 Recoverability of other financial assets
The majority of other financial assets represent loans provided
to subsidiary and joint venture, which are associated with
funding of mineral exploration and development projects.
The recoverability of such loans is dependent upon the
discovery of economically recoverable reserves, obtaining of
regulatory approval for the extraction of such reserves, the
ability of the Company to maintain necessary financing to
complete the development of reserves and future profitable
production or proceeds from the disposition thereof.
5.2.4 Impairment review of the mining assets
The impairment assessment of the mining asset was based
on lower of a book value and the value in use. Projected cash
flows from 2018 to 2029 were used to assess the value in
use. The chosen period is consistent with the quantity of the
approved reserves and resources and available for mining
operations. No impairment has been recognised.
Assumptions used:
• Gross revenues from the West Kytlim mine is split with
the contractor on a 65/35 basis in favour of the contractor.
• Pt grade 0.35g/tonne
• Process recovery 88%
• Platinum/Gold price $930/oz / $1,330/oz
• Post-tax discount rate 13.4%
Management has performed a sensitivity analysis on the key
variable, such as platinum and production levels and the model
is robust up to 16% on platinum price and 3.4 % on production
level.
5.2.5 Non-recognition of an environmental liability provision
No provision for an environmental liability in respect of the
West Kytlim running mine has been recognised yet as at the
current stage of the operations the subcontractor has assumed
commitment to rehabilitate the mining sites to their original
state.
No contaminant is used in an alluvial operation; therefore
environmental liability is limited to restoring of the landscape
and planting of trees, which management has estimated to be
immaterial at this time.
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, has been identified as the executive
directors of the Group that make the operating decisions.
4.16 Prior year restatement
In prior years, the intercompany loans receivable have been
classified as non-current assets. As these loans are repayable
on demand, the prior period accounts have been restated to
reflect these amounts as current assets. This only impacts the
Parent company financial statements.
5 Critical accounting judgements and key sources
of estimation uncertainty
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances.
5.1 Investments in subsidiaries
The Company has a holding of 48.33% in the BVI registered
company Energy Resources Asia Limited (the “ERA”).
Directors consider the ERA to be a subsidiary of the Company
despite holding less than 50% of the voting power of the entity
based on the fact that the Company has the ability to use its
power over the investee to affect the amount of the investor’s
returns.
5.2 Key sources of estimation uncertainty
The following are the key assumptions / uncertainties at the
statement of financial position date, which have a significant
risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year.
5.2.1 Share-based payments
The estimation of share-based payment costs requires the
selection of an appropriate valuation model and consideration
as to the inputs necessary for the valuation model chosen. The
Group has made estimates as to the volatility of its own shares,
the probable life of options granted and the time of exercise of
those options. The model used by the Group is the Black-
Scholes valuation model.
5.2.2 Valuation of derivative embedded into convertible
loan note
The estimation of embedded derivative (conversion options
embedded into US dollar denominated loan) - requires the
selection of an appropriate valuation model and consideration
as to the inputs necessary for the valuation model chosen. The
Group has made estimates as to the volatility of its own shares,
the probable life of options granted and the time of exercise of
those options. The Group used the Monte Carlo valuation
model to fair value the options.
ANNUAL REPORT & ACCOUNTS 2017
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33
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
6 Segmental information
During the year under review management identified the group as one operating segment being investing in exploration for and
development of platinum group metals, gold and other minerals in Russia. This one segment is monitored and strategic decisions
are made based upon it and other non-financial data collated from the on-going exploration activities.
The company is developing two key assets, West Kytlim and Monchetundra, their geography outlined in the following table. Further
non-core interests include the Semenovsky Project in the Republic of Bashkiria in the Southern Ural Mountains, Southwest Russia, and
the Kamushanovsky Uranium Project in northern Kyrgyzstan.
Geographical location
Activity
2017
Non-current assets
Revenue
2016
Non-current assets
Revenue
7 Employees
West Kytlim
Urals Mountains, Russia
Monchetundra
Kola Peninsula, Russia
Operating mine and
revenue generating unit
Exploration project
undergoing application
for the mining licence
£
4,023,018
177,022
£
4,001,272
139,862
£
803,703
-
£
760,534
-
Average number of staff (excluding non-executive directors) employed throughout the year was as follows:
By the Company
By the Group
2017
2
23
2016
4
19
8 Profit/(loss) for the year
Profit/(loss) for the year has been arrived at after charging:
Staff benefits expense:
Wages, salaries and directors fees (note 23)
Social security costs
Other short term benefits
Audit fees payable to the company’s auditor for
the audit of the Group’s annual accounts
Year to 31 December 2017
Group
£
Company
£
Year to 31 December 2016
Company
£
Group
£
421,950
73,631
18,951
189,287
3,266
18,500
250,644
24,848
18,500
180,724
7,476
18,500
514,532
211,053
293,992
206,700
36,000
36,000
36,000
36,000
33,553
33,553
33,553
33,553
34
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
8 Profit/(loss) for the year (continued)
Wages and salaries and social security cost charged to profit and loss in 2017 are higher than in previous period and mostly
attributable to charges by subsidiary. Reason for the increase is that in prior periods all these charges were capitalised as an intangible
asset. In late 2016 West Kytlim project was transferred from exploration to active mining mode and since that time expenses including
wages and salaries had no longer been qualified for capitalisation and had been charged to the cost of sales and the administration
costs accounts in profit and loss.
9 Other gains and losses
Loss on disposal of investment in joint operations
Change in fair value of derivative instrument
Gain on debt settlement
VAT written off
Net foreign exchange (loss)/profit
Year to 31 December 2017
Group
£
(44,495)
76,863
167,088
-
(169,062)
Company
£
(44,495)
76,863
167,088
-
32,047
Year to 31 December 2016
Company
£
Group
£
-
-
-
(95,215)
1,959,358
-
-
-
-
(1,818)
(1,818)
32,081
231,503
1,864,143
10 Income taxes
Year to 31 December 2017
Group
£
Company
£
Year to 31 December 2016
Company
£
Group
£
(Loss)/profit before tax
(2,139,130)
(1,480,763)
994,240
(655,352)
Current tax at 19% (2016: 20%)
Adjusted for the effect of:
Expenses not deductible for tax purposes
Profits not subject to tax
(407,752)
(281,345)
198,848
(131,070)
-
-
-
-
-
-
-
-
Tax losses utilised/(carried forward)
(407,752)
(281,345)
198,848
(131,070)
Tax liability
-
-
-
-
There was no tax payable for the year ended 31 December 2017 (2016: £nil) due to the Group and the Company having
taxable losses.
The Group’s business operations currently comprise mining projects in Russia, which are either at an exploration stage or in an active
production stage. The Group has tax losses of £19,290,391 (2016: £18,878,752) carried forward on which no deferred tax asset is
recognised. These losses may affect the future tax position by way of offset against profits as and when mining projects reach a full
scale production.
The deferred asset arising from the accumulated tax losses has not been recognised due to insufficient evidence of timing of suitable
taxable profits against which it can be recovered.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
35
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
11 Property, plant and equipment
a) Group property, plant and equipment
Cost
Balance at 31 December 2015
Additions
Transfer from intangible assets
Exchange differences
Balance at 31 December 2016
Additions
Disposals
Exchange differences
Balance at 31 December 2017
Depreciation
Balance at 31 December 2015
Depreciation expense
Exchange differences
Balance at 31 December 2016
Disposals
Depreciation expense
Exchange differences
Balance at 31 December 2017
Carrying amount:
at 31 December 2017
at 31 December 2016
(b) Assets in the course of construction
Cost
Balance at 1 January
Exchange differences
Balance at 31 December
Mining
asset
-
-
4,388,797
-
4,388,797
175,737
-
(196,371)
4,368,163
-
(15,712)
-
(15,712)
(13,379)
561
(28,530)
Property
£
22,648
-
-
2,707
25,355
-
-
(317)
25,038
(408)
(117)
(180)
(705)
-
(114)
26
(793)
Plant and
machinery
£
Office fixture
and fittings
£
Total
£
132,760
3,578
4,388,797
33,584
4,558,719
179,873
(953)
(200,429)
51,538
690
-
5,112
57,340
-
(953)
(624)
55,763
4,537,210
(50,146)
(599)
(4,809)
(108,385)
(17,635)
(30,427)
58,574
2,888
-
25,765
87,227
4,136
-
(3,117)
88,246
(57,831)
(1,207)
(25,438)
(84,476)
(55,554)
(156,447)
-
(1,502)
3,018
953
(418)
567
953
(15,413)
4,172
(82,960)
(54,452)
(166,735)
4,339,633
4,373,085
24,245
24,650
5,286
2,751
1,311
4,370,475
1,786
4,402,272
2017
£
39,216
(1,402)
37,814
2016
£
-
39,216
39,216
Assets in the course of construction represent the group investment in the powerline to deliver electricity to the West Kytlim mining
site. At 31 December 2017 the power line had not been commissioned yet.
(c) Company’s office fixture and fittings
Cost
Balance at 1 January
Additions
Disposal
Balance at 31 December
Depreciation
Balance at 1 January
Depreciation expense
Disposals
Balance at 31 December
Carrying amount
2017
£
39,918
-
-
39,918
2016
£
39,918
-
-
39,918
(39,680)
(194)
-
(39,213)
(467)
-
(39,874)
(39,680)
44
238
The Group’s and Company’s property, plant and equipment are free from any mortgage or charge.
36
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
12 Intangible assets
In 2017 intangible assets represented only capitalised costs associated with the Group’s exploration, evaluation and development of
mineral resources.
Cost
Balance at 1 January
Additions
Transferred to mining asset
Exchange differences
Balance at 31 December
2017
£
2016
£
813,135
69,290
-
(41,632)
3,200,726
620,416
(4,388,797)
1,380,790
840,793
813,135
At 31 December 2017 and 31 December 2016 the intangible assets were represented by the cost capitalised in respect of
Monchetundra project.
The Company did not directly own any intangible assets at 31 December 2017 (2016 – nil)
13 Subsidiaries
Details of the Company’s subsidiaries at 31 December 2017 are as follows:
Name of subsidiary
Urals Alluvial Platinum Limited
ZAO Eurasia Mining Service
ZAO Kosvinsky Kamen
ZAO Terskaya Mining Company
ZAO Yuksporskaya Mining Company
Eurasia Mining (UK) Limited
Energy Resources Asia limited*
Place of
incorporation
Proportion of
ordinary shares held
Cyprus
Russia
Russia
Russia
Russia
UK
BVI
100%
100%
75%
80%
100%
100%
48.33%
Principal activity
Holding Company
Holding Company
Mineral Evaluation
Mineral Evaluation
Mineral Evaluation
Holding Company
Holding Company
* In 2011 the Group signed the Memorandum of Understanding (the “MOU") to acquire an interest in the Kamushanovsky uranium
project in Kyrgyzstan. To facilitate the MOU, the Group has nominated Energy Resources Asia Limited (the “ERA”), a British Virgin
Islands registered company. During 2011 the Group raised $486,000 (£299,960) net of expenses on the market to fund acquisition
and during the same period the Group invested $602,000 (£389,392) towards the acquisition of an interest in the company holding
the Kamushanovsky licence. Following this investment work has continued on completing a feasibility study for the mining of this
project. The legal holder of the Kamushanovsky licence is negotiating a sale of all or part of the deposit and it is expected that the
investment made by the Group will be refunded to the Group at profit.
The Directors consider ERA to be a subsidiary of the Company despite holding only 48.33% of the voting power of the entity based
on the fact that the Company has the ability to use its power over the investee to affect the amount of the Company’s returns.
The Company’s investments in subsidiaries presented on the basis of direct equity interest and represent the following:
Investment in subsidiaries (i)
Investment in joint operations (ii)
2017
£
2016
£
1,277,489
-
1,277,489
44,131
1,277,489
1,321,620
(i) Investment in subsidiaries represents the Company investments made into its 100% subsidiary Urals Alluvial Platinum Limited (the
“UAP”), which in turn controls other subsidiaries within the Group.
(ii) Investments in joint operations to develop Semenovsky project were written off in 2017 due to uncertain status of the project,
which requires additional funding and/or a partner capable to bring such funding. Unless funding situation is resolved or a suitable
partner identified the project has no value to the Company, and as such, has been impaired during the year.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
37
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
13 Subsidiaries (continued)
Subsidiaries with material non-controlling interests (“NCI”)
Summary of non-controlling interest
As at 1 January
NCI arising on the acquisition of subsidiary
(Loss)/profit attributable to NCI
Exchange differences
As at 31 December
Non-controlling interest on subsidiary basis
Energy Resources Asia Limited
ZAO Kosvinsky Kamen
ZAO Terskaya Mining Company
Energy Resources Asia Limited
Non-current assets
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity attributable to owners of the parent
Non-controlling interests
Loss for the year attributable to owners of the parent
Loss for the year attributable to NCI
Loss for the year
Total comprehensive income for the year attributable to owners of the parent
Total comprehensive income for the year attributable to NCI
Total comprehensive income for the year
ZAO Kosvinsky Kamen
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net assets
Equity attributable to owners of the parent
Non-controlling interests
(Loss)/profit for the year attributable to owners of the parent
(Loss)/profit for the year attributable to NCI
(Loss)/profit for the year
Total comprehensive income for the year attributable to owners of the parent
Total comprehensive income for the year attributable to NCI
Total comprehensive income for the year
38
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
2017
£
(675,393)
2016
£
(797,178)
(19,473)
(13,768)
253,975
(132,190)
(708,634)
(675,393)
£
£
305,219
(430,353)
(583,500)
326,194
(436,518)
(565,069)
(708,634)
(675,393)
£
445,596
-
£
489,312
-
445,596
489,312
(3,228)
(3,228)
442,368
137,149
305,219
-
-
-
(3,545)
(3,545)
485,767
159,573
326,194
-
-
-
(22,424)
(20,975)
(43,399)
42,375
39,636
82,011
£
4,023,018
75,501
£
4,001,272
71,104
4,098,519
4,072,376
(5,682,491)
(122,770)
(5,824,503)
(15,602)
(5,805,261)
(5,840,105)
(1,706,742)
(1,767,729)
(1,276,389)
(430,353)
(1,709)
(570)
(1,331,211)
(436,518)
682,134
227,378
(2,279)
909,512
59,710
6,165
65,875
85,093
58,092
143,185
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
13 Subsidiaries (continued)
ZAO Terskaya Mining Company
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net assets
Equity attributable to owners of the parent
Non-controlling interests
(Loss)/profit for the year attributable to owners of the parent
(Loss)/profit for the year attributable to NCI
(Loss)/profit for the year
Total comprehensive income for the year attributable to owners of the parent
Total comprehensive income for the year attributable to NCI
Total comprehensive income for the year
2017
£
2016
£
803,703
7,510
760,534
58,534
811,213
819,068
(797,793)
(81,215)
708,917
86,091
(879,008)
795,008
(67,795)
24,060
515,705
(583,500)
589,129
(565,069)
(75,613)
(18,903)
106,388
26,597
(94,516)
132,985
(78,749)
(18,431)
193,378
24,057
(97,180)
217,435
14 Other financial assets
Non-current
Advanced to acquire interest in
uranium project
Current
Loans to subsidiaries
2017
Group
£
Company
£
2016
Group
£
Company
£
445,596
-
489,312
-
-
6,306,204
-
5,765,654
445,596
6,306,204
489,312
5,765,654
The monies advanced to the subsidiary enterprises by the Company are repayable on demand. As such these amounts represent a
net investment in the other members of the Group and are recognised at their full value as there are no indications of impairment.
In prior years the Group advanced $602,000 with the intention to acquire an interest in the Kyrgyzstan company holding the
Kamushanovsky uranium exploration licences (note 13 ). This amount is equivalent to £445,696 using the prevailing rate of exchange
at the year-end (2016: £489,312).
The maximum exposure to credit risk at the reporting date is the carrying value of each class of assets mentioned above.
Recoverability of the loans is dependent on the borrower’s ability to (i) transform them into cash generating units through discovery
of economically recoverable reserves and their development into profitable production or (ii) to complete a sale of all or part of the
deposit.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
39
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
15 Trade and other receivables
Trade receivables
Prepayments
Other receivables
Due from subsidiaries
2017
2016
Group
£
254
22,917
70,216
-
93,387
Company
£
-
21,238
11,124
14,341
46,703
Group
£
-
44,130
105,016
-
149,146
Company
£
-
41,724
21,073
17,243
80,040
The fair value of trade and other receivables is not materially different to the carrying values presented. None of the receivables are
secured or past due.
16 Issued capital
Issued and fully paid ordinary shares with a nominal value of 0.1p
Number
Nominal value(£)
Issued and fully paid deferred shares with a nominal value of 4.9p
Number
Nominal value (£)
Share premium
Value (£)
Total issued capital (£)
2017
2016
1,847,847,150 1,509,787,583
1,509,788
1,847,847
143,377,203
7,025,483
143,377,203
7,025,483
17,749,704
17,042,782
26,623,034
25,578,053
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Deferred shares have attached to them the following rights and restrictions:
- they do not entitle the holders to receive any dividends and distributions;
- they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;
- on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such
shares after the holders of the ordinary shares have received the sum of 0.1p for each ordinary share held by them and do not
have any other right to participate in the assets of the Company.
Issue of ordinary share capital in 2017:
Price in pence
per share
Number
Nominal value
£
As at 1 January 2017
03 February 2017
21 February 2017
29 March 2017
26 April 2017
19 May 2017
18 August 2017
09 September 2017
20 November 2017
11 December 2017
As at 31 December 2017
0.575
0.55
0.525
0.5
0.475
0.3974
0.3619
0.28
0.28
,509,787,583
15,652,174
2,727,273
2,857,143
1,500,000
10,526,316
8,900,820
10,868,449
64,691,364
220,336,028
1,509,788
15,652
2,727
2,857
1,500
10,526
8,901
10,869
64,691
220,336
338,059,567
338,059
1,847,847,150
1,847,847
40
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
17 Share based payments
Share options and warrants outstanding at the end of the year have the following expiry date and exercise prices:
Expiry date
Share options
21 December 2017 (expired)
Weighted average exercise price
Warrants
11 July 2017 (expired)
12 November 2018
15 May 2020
15 May 2020
15 May 2020
Weighted average exercise price
Total contingently issuable shares at 31 December
Exercise
price in
pence per
share
Number of
options as at
31 December
2017
Number of
options as at
31 December
2016
7.00
-
-
-
-
1.50
0.57
950,000
0.34 109,196,618
20,000,000
1.00
10,000,000
1.00
250,000
250,000
7.00
500,000
950,000
-
-
-
140,146,618
1,450,000
0.49
0.89
140,146,618
1,700,000
All listed options and warrants were exercisable as at 31 December 2017 and 2016 respectively.
Share options
No share options had been granted by the Group in 2017 (2016: nil).
The last 250,000 options lapsed on 21 December 2017.
There were no outstanding share options at 31 December 2017 (31 December 2016: 250,000 options exercisable at 7p).
Warrants
139,196,618 warrants were granted by the Group in 2017 (2016: nil).
Movement in number of warrants outstanding and their related weighted average exercise prices are as follows:
(Price expressed in pence per share)
Warrants
At 1 January
Granted*
Expired
At 31 December
2017
2016
Average
exercise price
No. of
warrants
Average
exercise price
No. of
warrants
0.89
1,450,000
0.48 139,196,618
(500,000)
1.50
0.49 140,146,618
0.89
-
-
0.89
1,450,000
-
-
1,450,000
139,196,618 warrants represent net amount of warrants granted. Such in May 2017 80,749,333 warrants with the exercise price of
0.6p per warrant were granted under the terms of the loan agreement with YA II PN Ltd (note 19). In December 2017 loan was
restructured and original warrants were cancelled and replaced with 109,196.618 warrants with the exercise price of 0.34p per
warrant. Issue and cancellation of 80,749,333 warrants were excluded from the statement above.
All listed warrants were exercisable as at 31 December 2017 and 2016 respectively.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
41
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
18 Other reserves
Capital redemption reserve
3,539,906
3,539,906
3,539,906
3,539,906
2017
Group
£
Company
£
2016
Group
£
Company
£
Foreign currency translation reserve:
At 1 January
Recognised in the period
At 31 December
Share-based payments reserve:
At 1 January
Recognised in the period
De-recognised in the period
At 31 December
Equity component of convertible loan notes:
At 1 January
Recognised in the period
At 31 December
(260,852)
(79,996)
(340,848)
-
-
-
(12,202)
(248,650)
(260,852)
2,788
307,075
(179,838)
2,788
307,075
(179,838)
130,025
130,025
-
74,285
74,285
-
74,285
74,285
2,788
-
-
2,788
-
-
-
-
-
-
2,788
-
-
2,788
-
-
-
3,403,368
3,744,216
3,281,842
3,542,694
The capital redemption reserve was created as a result of a share capital restructure in earlier years.
The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of
the Group’s foreign subsidiaries into GBP.
The share-based payments reserve represents (i) reserve arisen on the grant of share options to employees under the employee share
option plan and (ii) reserve arisen on the grant of warrants under terms of professional service agreements and/or issued under terms
of financing arrangements.
The equity component of convertible loan notes reserve represents a value of the lenders option to convert loan note into shares in
accordance with the terms of the convertible loan agreement.
19 Borrowings
Convertible loan notes
Unsecured loan
2017
2016
Group
£
539,156
49,654
Company
£
539,156
-
Group
£
-
318,314
Company
£
-
318,314
588,810
539,156
318,314
318,314
42
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
19 Borrowings (continued)
i) On 17 May 2017 the Company repaid £750,000 of the then existing £1,000,000 loan entered into with Sanderson Capital Partners
Limited in December 2016. The balance of £250,000 was rolled over into the new convertible loan facility entered into with
Sanderson Capital Partners Limited on 10 May 2017. Under the terms of the agreement the total fees of 20% of the principal
amount was payable to the lender at the inception. Fees payment was satisfied by the issue of shares. No interest to be accrued
on the principal. The loan maturity date is 10 May 2018.
The lender has an option to convert any part of the loan into the Company’s shares at 0.475p per share.
Carrying value of the liability component of loan at 31 December 2017 was £194,772, and the equity component was £74,285.
ii) On 15 May 2017 the Company entered into a loan agreement with YA II PN Ltd to borrow US$1,250,000. An implementation
fee of US$112,900 was deducted from the principal amount on transfer of funds. Interest applies on the loan at the rate of 14%.
The loan was repayable in 10 instalments with the final due on 15 May 2018.
As per the agreement the lender could elect, at its discretion, to convert all or part of the loan, including accrued interest, into
shares in the Company, at a price being the lower of 0.60p per share and 90% of the Company's lowest daily volume weighted
average price (the “VWAP”) during the five days prior to conversion.
In addition, the agreement includes the issue of the warrants to the lender at 50% cover of the principal amount, and at a 20%
premium to the VWAP in the 30 days preceding the agreement. Consequently the Company issued 80,749,333 warrants at an
exercise price of 0.6p per warrant. The warrants issued had a subscription period of three years.
In addition, the agreement includes the issue of the warrants to the lender at 50% cover of the principal amount, and at a 20%
premium to the VWAP in the 30 days preceding the agreement. Consequently the Company issued 80,749,333 warrants at an
exercise price of 0.6p per warrant. The warrants issued had a subscription period of three years.
In December 2017 the repayment schedule for the then outstanding amount of the loan was revised and the final maturity date
was changed to 15 September 2018.
Following the revision the lender may elect, at its discretion, to convert all or part of the loan, including accrued interest, into
shares in the Company, at a price being the lower of 0.34p per share and 90% of the Company's lowest daily VWAP during the
five days prior to conversion.
The company also incurred a restructure fee of $99,500 being 10% of the then outstanding principal, payable at maturity date.
In addition the previously issued warrants were cancelled and replaced with 109,196,618 warrants at a 20% premium to the VWAP
in the 30 days preceding the agreement, which priced at 0.34p. The subscription period of new warrants remained unchanged.
It was determined that the restructuring of the loan meet the definition of a significant modification. As a result, the original loan
was treated as extinguished, with the new loan being recorded in its place. As a result a gain on extinguishment was recorded in
the P&L of £245,912.
Carrying value of the loan at 31 December 2017 was £344,385.
iii) On 24 May 2017 the Company entered into a loan agreement with Deloan Investments Limited, a company controlled by Dmitry
Suschov, a non-executive director of the Company for a convertible loan of up to US$500,000. The loan was convertible at any
time into Ordinary Shares in the Company, at a price of 0.475p per Ordinary Share.
Under the terms of the agreement interest accrues on the loan at a rate of 15% which is to be satisfied by either cash payments
or shares in the Company at a price of 0.475p per ordinary share.
10,000,000 warrants at 1p were issued to the lender under terms of the loan agreement.
By agreement the loan and accrued interest were converted into 144,076,124 shares at 0.28p per share on 11 December 2017.
iv) On 3 February 2017 the Group entered into unsecured loan facility to borrow up to 57 million Russian Rubles (RR) at 14% per
annum, from Region Metal, the subcontractor and the West Kytlim mine operator. The Group had drawn RR 4.18 million and
repaid RR0.3 million in 2017. As the subcontractor’s arrangements had been discontinued the Group has no intention to utilise
any more funds from this facility.
The loan maturity date is 31 December 2019.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
43
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
19 Borrowings (continued)
Combined movement of the loans:
Balance at 1 January
Loan proceeds
Arrangement fees
Fair value of warrants attached
Fair value of embedded conversion options
Interest accrued
Payments made in shares
Payments made in cash
Gain on loans restructure
Cost of redeeming of a loan
Exchange differences
Less:
Equity component of convertible loan notes
Add back:
Loan arrangement fees allocated to warrants and
embedded conversion options
2017
Group
£
Company
£
318,314
1,751,070
(136,913)
(216,177)
(576,245)
1,113,318
(605,618)
(960,550)
(156,842)
118,080
(40,500)
318,314
1,697,576
(136,913)
(216,177)
(576,245)
1,113,234
(605,618)
(956,630)
(156,842)
118,080
(40,496)
(74,285)
(74,285)
55,158
55,158
Group
£
-
900,000
(7,500)
-
-
224,814
(549,000)
(250,000)
-
-
-
-
-
2016
Company
£
-
900,000
(7,500)
-
-
224,814
(549,000)
(250,000)
-
-
-
-
-
Balance at 31 December
588,810
539,156
318,314
318,314
20 Trade and other payables
Trade payables
Accruals
Social security and other taxes
Other payables
Due to related party
2017
2016
Group
£
109,425
74,832
19,862
32,511
-
Company
£
-
61,620
3,825
59,899
198,583
Group
£
-
65,832
12,375
79,667
-
Company
£
-
60,467
5,064
43,333
198,583
236,630
323,927
157,874
307,447
The fair value of trade and other payables is not materially different to the carrying values presented. The above listed payables were
all unsecured.
21 Other financial liabilities
Embedded conversion options into a convertible loan note
denominated in US dollars (note 28)
2017
Group
£
Company
£
2016
Group
£
Company
£
225,000
225,000
225,000
225,000
-
-
-
-
Embedded conversion options represents the fair value of the conversion options attached to $1,250,000 convertible loan note (notes
19 and 28).
44
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
22 Profit per share
Basic profit/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
(Loss)/profit attributable to equity holders of the company
Weighted average number of ordinary shares in issue
Basic profit/(loss) per share (pence)
2017
£
2016
£
(2,119,657)
740,265
1,562,952,662 1,382,366,350
(0.14)
0.05
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares.
(Loss)/profit attributable to equity holders of the company
Reversal of interest expense on qualifying convertible debt
(Loss)/profit used to determine diluted earnings per share
Weighted average number of ordinary shares in issue
Adjusted for:
Assumed conversion of qualifying convertible debt
Share options and warrants
2017
£
(2,119,657)
494,236
2016
£
740,265
1,625,421
740,265
1,562,952,662 1,382,366,350
343,718,934
1,700,000
Weighted average number of ordinary shares for diluted earnings per share
1,906,671,596 1,384,066,350
Diluted (loss)/profit per share (pence)
(0.09)
0.05
23 Related party transactions
Transactions with subsidiaries
In the normal course of business, the Company provides funding to its subsidiaries for reinvestment into exploration projects and
manages funds received from partners in joint venture.
Receivables from subsidiaries
Loans provided to subsidiaries
Payables to subsidiaries
Service charges to subsidiary
2017
£
14,341
6,306,204
(198,583)
120,000
2016
£
17,243
5,765,654
(198,583)
120,000
The amounts owed by subsidiaries are unsecured and receivable on demand but are not expected to be fully received within the next
twelve months but when the project reaches such an advanced stage of development that it can be repaid out of the proceeds of
either the project’s cash flow or through the direct or indirect disposal to a third party of an interest in the project.
Transactions with key management personnel
The Group considers that the key management personnel are the Directors of the Company.
The following amounts were paid and/or accrued to the Directors of the Company who held office at 31 December 2017:
Short-term benefits
2017
£
2016
£
151,537
153,512
153,537
153,512
The remuneration of the Directors is determined by the remuneration committee having regard to the performance of individuals and
market trends. No pension contribution has been made for the Directors in 2017 (2016: nil).
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
45
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
23 Related party transactions (continued)
An analysis of remuneration for each director of the company in the current financial year:
Name
Position
M. Martineau
C. Schaffalitzky
G. FitzGerald
D. Suschov
Ex non-Executive Chairman
Executive Chairman
Non-Executive Director
Non-Executive Director
Salaries and
allowances
£
-
103,512
-
-
103,512
Amounts of the Directors remuneration and allowances accrued and remaining unpaid/(overpaid) at 31 December 2017:
Name
Position
M. Martineau
C. Schaffalitzky
G. FitzGerald
D. Suschov
Non-Executive Chairman
Executive Chairman
Non-Executive Director
Non-Executive Director
2017
£
-
21,668
6,150
-
27,818
Directors fees
£
18,025
-
15,000
15,000
48,025
2016
£
11,341
(247)
1,990
3,595
16,679
Director’s loan
On 24 May 2017 the Company entered into a loan agreement with Deloan Investments Limited, a company controlled by Dmitry
Suschov, a non-executive director of the Company for a convertible loan of up to US$500,000. The loan was convertible at any time
into Ordinary Shares in the Company, at a price of 0.475p per Ordinary Share.
Under the terms of the agreement interest accrues on the loan at a rate of 15% which is to be satisfied by either cash payments or
shares in the Company at a price of 0.475p per ordinary share.
By agreement the loan and accrued interest were converted into 144,076,124 shares at 0.28p per share on 11 December 2017.
24 Operating lease arrangements
Operating leases relate to the office premises with lease terms up to one year. The Group does not have an option to purchase the
leased asset at the expiry of the lease period.
Payments recognised as an expense:
Minimum lease payments
Non-cancellable operating lease commitments:
No longer than one year
Longer than one year and not longer than five years
Longer than five years
2017
Group
£
Company
£
2016
Group
£
Company
£
40,863
10,625
14,701
9,625
40,863
9,083
-
49,946
27,250
9,083
-
36,333
33,457
36,333
-
69,790
27,250
36,333
63,583
The minimum lease payment was adjusted for the office premises sub-lease receipts received by the Company in 2017.
The operating lease commitments represent full commitment by the Company under office lease arrangements. The expected sub-
lease receipts are not included and hence do not reduce the amount of the Company’s commitments.
46
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
25 Commitments
The Group has no material commitments.
26 Contingent liabilities and contingent assets
The Group has no material contingent liabilities and assets (2016 - £nil).
27 Risk management objectives and policies
Financial risk management objectives
The Group’s operations are limited at present to investing in entities that undertake mineral exploration. All investments in exploration
are capitalised on project basis, which are funded by shareholders funds, fixed rate borrowings and contributions from the partners in
joint ventures. The Group’s activities expose it to a variety of financial risks including currency, fair value and liquidity risk. The Group
seeks to minimise the effect of these risks on a daily basis, though due to its limited activities the Group has not applied policy of
using any financial instruments to hedge these risks exposures.
Risk management is carried out by the Company under close board supervision.
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to US Dollars and Russian Roubles. Foreign exchange risk arises from future commercial transactions, recognised assets and
liabilities and net investments in foreign operations. The Group’s policy is not to enter into currency hedging transactions.
The following significant exchange rates have been applied during the year:
GBP
USD
RUB
Average rate
Reporting date spot rate
2017
1.289
75.230
2016
1.364
92.132
2017
1.351
78.140
2016
1.230
75.347
Sensitivity analysis
A reasonably possible strengthening (weakening) of the USD and RUB, as indicated below, against GBP at 31 December would have
affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss before
taxes by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant and
ignores any impact of forecast sales and purchases.
31 December 2017
USD (5% movement)
RUB (5% movement)
31 December 2016
USD (5% movement)
RUB (5% movement)
Strengthening
Weakening
Equity
Profit or loss
Equity
Profit or loss
£
£
£
£
70,509
(89,286)
(26,661)
(6,142)
(63,791)
80,785
24,120
5,557
106,294
(87,336)
38,858
54,278
(96,169)
79,012
(35,158)
(49,109)
Interest rate risk
As the Group has no significant interest-bearing assets, the group’s operating cash flows are substantially independent of changes in
market interest rates.
The Group has significant interest bearing loans disclosed in the note 19. All loans are at a fixed rate of interest.
Fair values
In the opinion of the Directors, there is no significant difference between the fair values of the Group’s and the Company’s assets and
liabilities and their carrying values.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
47
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
27 Risk management objectives and policies (continued)
Credit risk
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the consolidated statement of
financial position date, as summarised below:
Non-current loans and advances
Current loans and advances
Trade and other receivables
Cash and cash equivalents
2017
Group
£
Company
£
445,596
-
93,387
89,819
-
6,306,204
46,703
61,500
Group
£
489,312
-
149,146
154,674
2016
Company
£
5,765,654
-
80,040
116,428
628,802
6,414,407
793,132
5,962,122
The Group’s risk on cash at bank is mitigated by holding of the majority of funds at “A” rated bank.
No significant amounts are held at banks rated less than “B”. Cash is held either on current account or on short-term deposit at
floating rate. Interest is determined by the relevant prevailing base rate. The fair value of cash and cash equivalents at 31 December
2017 are not materially different from its carrying value.
Recoverability of the loans is dependent on the borrower’s ability to transform them into cash generating units through discovery of
economically recoverable reserves and their development into profitable production.
The Company continuously monitors defaults by the counterparties, identified either individually or by group, and incorporates this
information into its credit risk control. Management considers that all of the above financial assets that are not impaired are of good
credit quality.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of Directors, which has built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, borrowing facilities, cash and cash equivalent
by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities.
2017
Borrowings
Trade and other payables
2016
Borrowings
Trade and other payables
within
6 months
£
588,810
236,630
825,440
318,314
157,874
476,188
Current
Non-current
6 to 12
months
£
1 to 5
years
£
later than
5 years
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities.
2017
Borrowings
Trade and other payables
2016
Borrowings
Trade and other payables
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ANNUAL REPORT & ACCOUNTS 2017
Current
Non-current
within
6 months
£
539,156
125,344
6 to 12
months
£
-
198,583
664,500
198,583
318,314
105,864
-
198,583
424,178
198,583
1 to 5
years
£
later than
5 years
£
-
-
-
-
-
-
-
-
-
-
-
-
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
27 Risk management objectives and policies (continued)
The tables above have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay. The table includes both interest and principal cash flows.
The contractual maturities reflect the gross cash flows, which may differ to the carrying values of the liabilities at the consolidated
statement of financial position date.
Capital risk
At present the Group’s capital management objective is to ensure the Group’s ability to continue as a going concern.
Capital is monitored on the basis of its carrying amount and summarised as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing
2017
2016
Group
£
588,810
(89,819)
498,991
5,541,683
6,040,674
8%
Company
£
539,156
(61,500)
477,656
6,603,857
7,081,513
7%
Group
£
318,314
(154,674)
163,640
6,314,935
6,478,575
3%
Company
£
318,314
(116,428)
201,886
6,658,219
6,860,105
3%
Capital structure is managed depending on economic conditions and risk characteristics of underlying assets. In order to maintain
or adjust capital structure, the Group may issue new shares and debt financial instruments or sell assets to reduce debt.
28 Fair value measurement
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels
of fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly.
• Level 3: inputs for the asset or liability that are not based on observable market data.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis
at each period end:
Level 2
Embedded conversion options into a convertible
loan note denominated in US dollars
Total liability
2017
Group
£
Company
£
2016
Group
£
Company
£
225,000
225,000
225,000
225,000
-
-
-
-
Measurement of fair value of financial instruments
Management performs valuations of financial items for financial reporting purposes, including Level 2 fair values. Valuation techniques
are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market based
information.
The valuation techniques used for instruments categorised in Level 2 are described below.
Embedded conversion options (Level 2)
The Group entered into debt agreements to borrow $1,250,000 and $500,000 by issue the convertible loan notes that had
embedded conversion options that met the criteria for derivative instruments. See note 19. These options have been fair valued using
observable inputs such as volatility, risk fee rates and the Group’s share price using a Monte Carlo pricing model. The effects of non-
observable inputs are not significant for these options.
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
49
Notes to the consolidated financial statements continued
For the year ended 31 December 2017
29 Events after the consolidated statement of financial position date
Subsequent to the reporting date the following transactions took place:
a. On 24 January 2018 the Group sold 7% of its shareholding in ZAO Kosvinsky Kamen. As a result of this transaction proportion of
ordinary shares held by the Group was reduced from 75% to 68%.
b. Issue of shares:
Date
Transaction
28 February 2018
10 May 2018*
10 May 2018
Total
Issue of ordinary shares under term of financing arrangements
Issue of ordinary shares by way of placing
Warrants granted to subscribers to shares
* Net proceed from the issue amounted to £463,420.
No of shares
issued
10,522,058
172,166,666
166,666,666
Nominal
value
£
10,522
172,167
166,667
349,355,390
349,356
c. In May 2018 the group made $400,000 payment to YA II PN Ltd to reduce the outstanding loan amount.
d. In June 2018 it was agreed to defer repayment of £250,000 of loan provided by Sanderson Capital Partners Limited to 30
September 2018 at a fee of £20,000 and the issue of 10,000,000 shares.
e. In June 2018 the Group entered into a loan agreement with a company controlled by a non-executive director D. Suschov, to
borrow up to $1 million from June 2018. Loan bears interest at 9% per annum payable quarterly. The loan is repayable in full in five
years from the first drawdown date.
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ANNUAL REPORT & ACCOUNTS 2017
PLEASE NOTE THAT THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE
IN ANY DOUBT AS TO THE ACTION TO BE TAKEN, PLEASE CONSULT AN INDEPENDENT ADVISER IMMEDIATELY.
If you have sold or transferred or otherwise intend to sell or transfer all of your holding of ordinary shares in the
Company prior to the record date (as described in Note 4) for the Annual General Meeting of the Company on
24 July 2018 at 11am, you should send this document, together with the accompanying Form of Proxy, to the
(intended) purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer
was or is to be effected for transmission to the (intended) purchaser or transferee.
Company No. 3010091
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Eurasia Mining Plc (the "Company”) will be held at
The East India Club, 16 St James’s Square, London SW1Y 4LH on 24 July 2018 at 11am for the following purposes.
Ordinary Resolutions
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:
1. To receive and consider the audited accounts for the period ended 31 December 2017 together with the Directors’
and the auditors’ reports thereon.
2. To re-appoint Grant Thornton UK LLP as auditors of the Company to hold office until the conclusion of the next
general meeting at which accounts are laid before the Company.
3. To authorise the Directors to determine the remuneration of the auditors of the Company.
4. To re-appoint as a Director Dmitry Suschov, who is required under the Articles of Association of the Company to
retire by rotation and who is eligible for re-election.
5. That, in accordance with section 551 of the Companies Act 2006, the Directors be generally and unconditionally
authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in
the Company (“Rights”) up to an aggregate nominal amount of £1,000,000 provided that this authority shall, unless
renewed, varied or revoked by the Company, expire at the end of the next Annual General Meeting of the Company
to be held after the date on which this resolution is passed, save that the Company may, before such expiry, make
an offer or agreement which would or might require shares to be allotted or Rights to be granted and the Directors
may allot shares or grant Rights in pursuance of such offer or agreement notwithstanding that the authority
conferred by this resolution has expired. This authority is in substitution for all previous authorities conferred on the
Directors in accordance with section 551 of the 2006 Act.
Special Resolution
To consider and, if thought fit, pass the following resolution as a special resolution:
6. THAT, subject to the passing of resolution 5, the Directors be given the general power to allot equity securities (as
defined by section 560 of the 2006 Act) for cash, either pursuant to the authority conferred by resolution 6 or by way
of a sale of treasury shares, as if section 561(1) of the 2006 Act did not apply to any such allotment, provided that
this power shall be limited to:
a.
the allotment of equity securities in connection with an offer by way of a rights issue to the holders of ordinary
shares in proportion (as nearly as may be practicable) to their respective holdings but subject to such exclusions
or other arrangements as the Board may deem necessary or expedient in relation to treasury shares, fractional
entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of
any regulatory body or stock exchange; and
ANNUAL REPORT & ACCOUNTS 2017
E U R A S I A M I N I N G P L C
51
b.
the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal
amount of £1,000,000.
The power granted by this resolution will expire on the conclusion of the Company’s next annual general meeting (unless
renewed, varied or revoked by the Company prior to or on such date) save that the Company may, before such expiry
make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors
may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this
resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted to the Directors to allot equity securities
as section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made
or agreed to be made pursuant to such authorities.
The authority conferred by this resolution shall expire at the conclusion of the Company's next annual general meeting
save that the Company may, before the expiry of the authority granted by this resolution, enter into a contract to purchase
ordinary shares which will or may be executed wholly or partly after the expiry of such authority.
Dated 28 June 2018
BY ORDER OF THE BOARD
A. Agaev
Secretary
Notes
1. A member of the Company entitled to attend and vote at the meeting
convened by this Notice may appoint one or more proxies to attend
and vote on a poll in his stead. A proxy need not be a member of the
Company.
2. To be valid, the enclosed Form of Proxy must be completed and lodged
together with the Power of Attorney or other authority (if any) under
which it is signed, or a notarially certified copy thereof, at the office
of the Company’s Registrars, Link Asset Services, Pxs1, 34 Beckenham
Road, Beckenham, Kent BR3 4ZF not less than forty eight hours before
the time appointed for holding the meeting.
3. Completion of the Form of Proxy does not preclude a member from
attending and voting at the meeting if they so wish.
4. The Company, pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, specifies that only shareholders registered in the
register of members of the Company as at 11am on 22 July 2018 (being
48 hours prior to the time fixed for the meeting), or, if the meeting is
adjourned such time being not more than 48 hours prior to the time
fixed for the adjourned meeting, shall be entitled to attend and vote,
whether in person or by proxy, at the Annual General Meeting in
respect of the number of shares registered in their name at that time.
Changes to entries in the register of members after that time shall be
disregarded in determining the rights of any person to attend or vote
at the Annual General Meeting.
5. By attending the meeting, members agree to receive any
communication at the meeting.
6. Biographical details of the Director who is being proposed for re-
election by shareholders are set out in the Directors Biographies.
7. The total number of ordinary shares of 0.1p in issue as at 29 June 2018,
the last practicable day before printing this document was
2,030,535,874, ordinary shares and the total level of voting rights was
2,030,535,874, none of which were attached to shares held in treasury
by the Company.
8. Any corporation, which is a member, can appoint one or more corporate
representatives who may exercise on its behalf all of its powers as a
member provided that they do not do so in relation to the same shares.
9. CREST members who wish to appoint a proxy or proxies through the
CREST electronic proxy appointment service may do so for the Annual
General Meeting to be held on 24 July 2018 at 11am and any
adjournment(s) thereof by using the procedures described in the CREST
Manual. CREST personal members or other CREST sponsored members,
52
E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
and those CREST members who have appointed a voting service provider
should refer to their CREST sponsors or voting service provider(s), who
will be able to take the appropriate action on their behalf.
10. In order for a proxy appointment or instruction made by means of
CREST to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with
Euroclear UK & Ireland Limited’s specifications and must contain the
information required for such instructions, as described in the CREST
Manual. The message must be transmitted so as to be received by the
Company’s agent, Link Asset Services (CREST Participant ID: RA10), no
later than 48 hours before the time appointed for the meeting. For this
purpose, the time of receipt will be taken to be the time (as determined
by the time stamp applied to the message by the CREST Application
Host) from which the Company’s agent is able to retrieve the message
by enquiry to CREST in the manner prescribed by CREST.
11. CREST members and, where applicable, their CREST sponsor or voting
service provider should note that Euroclear UK & Ireland Limited does
not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has
appointed a voting service provider, to procure that his CREST sponsor
or voting service provider takes) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and, where
applicable, their CREST sponsor or voting service provider are referred
in particular to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings. The Company may treat
as invalid a CREST Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
12. Copies of the service contracts and letters of appointment of each of
the Directors will be available for inspection at the registered office of
the Company during usual business hours on any weekday (Saturdays
and public holidays excluded) and at the place of the Annual General
Meeting from at least 15 minutes prior to and until the conclusion of
the Annual General Meeting.
13. Copies of the Articles of Association will be available for inspection at
the Company’s registered office during usual business hours until the
date of the Annual General Meeting.
PLEASE COMPLETE IN BLOCK CAPITALS
I/We
of
FORM OF PROXY
(Please insert full name(s) and address(es) in block letters - see Note 1 below)
being (a) member(s) / a person nominated by (a) member(s) of the above-named Company to exercise the right to appoint a proxy, pursuant
to Articles of Association of the Company, hereby appoint the Chairman of the meeting or
of
(See Note 3 below)
as my/our proxy or proxies to vote for me/us and on my/our behalf at the annual general meeting of the Company to be held on 24 July
2018 at 11am and at any adjournment of that meeting and to vote at that meeting as indicated below. Please indicate how you wish your
proxy or proxies to vote by inserting “X” in the box below. Where no “X” is inserted, and on any other resolutions proposed at the meeting,
your proxy will vote or abstain from voting as he/she thinks fit.
RESOLUTIONS
FOR
AGAINST
VOTE
WITHHELD
1. To approve Accounts for the year ended 31 December 2017
2. To re-appoint Grant Thornton LLP as auditors of the Company
3. To authorise the Directors to determine the remuneration of the auditors of the Company
4. To re-appoint Mr. Dmitry Suschov as a Director
5. To authorise the Directors to allot relevant securities pursuant to section 551 of the
Companies Act 2006
6. To authorise the Directors to allot equity securities pursuant to section 571 of the
Companies Act 2006
Please tick here if this proxy appointment is one of multiple appointments being made
Signed
Full name and address
PLEASE COMPLETE IN BLOCK CAPITALS
NOTES
Dated
1. To appoint as a proxy a person other than the Chairman of the meeting insert the full
3. The Form of Proxy below must arrive not later than 48 hours before the time set for the
name in the space provided. A proxy need not be a member of the Company. You can
also appoint more than one proxy provided each proxy is appointed to exercise the
rights attached to a different share or shares held by you. The following options are
available:
(a) To appoint the Chairman as your sole proxy in respect of all your shares, simply fill in
any voting instructions in the appropriate box and sign and date the Form of Proxy
(b) To appoint a person other than the Chairman as your sole proxy in respect of all your
shares, delete the words ‘the Chairman of the meeting (or)’ and insert the name of your
proxy in the spaces provided. Then fill in any voting instructions in the appropriate box
and sign and date the Form of Proxy
(c) To appoint more than one proxy, you may photocopy this form. Please indicate the
proxy holder’s name and the number of shares in relation to which they are authorised
to act as your proxy (which, in aggregate, should not exceed the number of shares held
by you). Please also indicate if the proxy instruction is one of multiple instructions being
given. If you wish to appoint the Chairman as one of your multiple proxies, simply write
‘the Chairman of the Meeting’. All forms must be signed and should be returned
together in the same envelope
2. Unless otherwise indicated the proxy will vote as he thinks fit or, at his discretion,
abstain from voting.
meeting at to Asset Services, Pxs1, 4 Beckenham Road, Beckenham, Kent BR3 ZF during
usual business hours accompanied by any Power of attorney under which it is executed
(if applicable)
4. A corporation must execute the Form of Proxy under either its common seal or the hand
of a duly authorised officer or attorney.
5. The Form of Proxy is for use in respect of the shareholder account specified above only
and should not be amended or submitted in respect of a different account.
6. The ‘Vote Withheld’ option is to enable you to abstain on any particular resolution.
Such a vote is not a vote in law and will not be counted in the votes ‘For’ and ‘Against’
a resolution.
7. Shares held in uncertificated form (i.e. in CREST) may be voted through the CREST
Proxy Voting Service in accordance with the procedures set out in the CREST manual.
8. Completion and return of the Form of Proxy will not preclude you from attending and
voting in person at the Meeting should you subsequently decide to do so
9.
If you prefer, you may return the proxy form to the Registrar in an envelope addressed
to FREEPOST Link Asset Services, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF.
ANNUAL REPORT & ACCOUNTS 2017
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ANNUAL REPORT & ACCOUNTS 2017
ANNUAL REPORT & ACCOUNTS 2017
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E U R A S I A M I N I N G P L C
ANNUAL REPORT & ACCOUNTS 2017
Company Information
Directors
C. Schaffalitzky (Executive Chairman)
G. FitzGerald (Non-Executive Director)
D. Suschov (Non-Executive Director)
Company Secretary
Alexandr Agaev
Head Office and Registered Office
2nd Floor, 85-87 Borough High Street
London SE1 1NH
Telephone: +44 (0) 20 7932 0418
E-mail: info@eurasiamining.co.uk
www.eurasiamining.co.uk
Russian Office
194 Lunacharsky Street
Ekaterinburg
Russia
Telephone: +7 3432 615187
Facsimile: +7 3432 615924
Company Number 3010091
ADVISERS
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Auditors
Grant Thornton UK LLP
30 Finsbury Square
London EC2A 1AG
Bankers
Barclays Bank plc
Town Gate House
Church Street East
Woking, Surrey
GU21 6AE
Solicitors
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
Nominated Adviser and Stockbrokers
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
and
11 St. James’s Square
Manchester M2 6WH
First Equity Ltd
Salisbury House
London Wall
London EC2M 5QQ
2nd Floor, 85-87 Borough High Street
London SE1 1NH
Telephone: +44 (0)20 7932 0418
E-mail: info@eurasiamining.co.uk
www.eurasiamining.co.uk