AnnuAl
RepoRt
2016
OrmOnde
Annual Report & Accounts 2016
Contents
Our business
our business 2
ormonde at a glance 3
Chairman’s Review
Review
of Activities
6
8
Report
of the Directors 12
Independent
Auditors’ Report 18
Consolidated Statement of
Comprehensive Income 20
Consolidated Statement
of Financial position
Company Statement
of Financial position
Consolidated Statement
of Cashflows
Company Statement
of Cashflows
Consolidated Statement
of Changes in equity
21
22
23
24
25
Company Statement
of Changes in equity 26
notes to
the Financial Statements 27
notice of
Annual General Meeting 50
Form
of proxy
Directors and
other Information
53
55
2
1
Barruecopardo
Tungsten Project:
Having successfully defined, designed,
permitted and funded the Project,
or m o n d e
i s n ow a d va n c i n g t h e
development of a low cost tungsten
mining project. the funding for the
project was agreed with oaktree Capital
Management in 2015 and consists of a
robust package of equity – uS$44.4
million and debt – $55.5 million. ormonde
retains 30% with oaktree holding 70%.
2
Gold Projects:
ormonde holds various exploration
licenses in Spain which are prospective
for Gold (most of which are held in joint
venture with Shearwater plc.)
3
La Zarza Copper
Project:
la Zarza is a large “massive sulphide”
deposit containing significant copper,
gold and zinc resources, located in
the Iberian pyrite Belt mining district
of southwest Spain. the project is no
longer seen as core to the Company’s
growth strategy and therefore ormonde
is seeking to realise value through
divestment.
OrmOnde
Annual Report & Accounts 2016
Ormonde at a glance
ormonde Mining plc is a mineral resource company currently developing a world-class
tungsten mining project and carrying out other mineral exploration in Spain.
is as manager
ormonde’s key activity
(30%) of the
transformational Barruecopardo tungsten project alongside
its partner oaktree Capital Management (70%). the mine is
estimated to account for ~11% of current non-Chinese global
supply of tungsten concentrate once operational from 2018.
the Company also has a participation in several highly
prospective areas of gold exploration in western Spain and
has rights to the la Zarza copper-gold project which has
significant copper, gold and zinc potential.
ormonde Mining plc is listed on the Alternative Investment
Market (AIM) in london and the enterprise and Securities
Market (eSM) in Dublin. ormonde operates its tungsten
interests through a project company Saloro Slu. the
ormonde Group is headquartered in the Republic of Ireland.
Salamanca & Zamora
Salamanca & Zamora
Salamanca & Zamora
Gold Project
Gold Exploration
Gold Exploration
2
1
Barruecopardo
Barruecopardo
Barruecopardo
Tungsten Project
Tungsten Project
Tungsten Project
Madrid
Madrid
Madrid
Lisbon
Lisbon
SpAIn
SPAIN
SPAIN
3
la Zarza
La Zarza
La Zarza
Copper Project
Copper-Gold Project
Copper-Gold Project
3
About Tungsten
tungsten is among the toughest elements found
in nature. possessing the highest melting point
and highest tensile strength ensures it is the
strongest and most durable of metals.
these exceptional properties make tungsten an
ideal element for use in alloys and composite
hard metals.
woodworking, mining, petroleum, construction
and electronics industries.
So from the mobile phones we use to
communicate, to the cars and planes in which
we journey in, from sports and leisure equipment
to the ball point pen, Tungsten plays a largely
unseen but vital role in our everyday lives.
tungsten carbide is an essential component of
drills, circular saws, welding, milling and turning
tools that are used extensively in the metalworking,
Tungsten is also inert, helping to ensure there is an
environmentally sustainable path to its mining and
ultimate end-uses.
~80%
Chinese share
of global primary
production (2016)
W
183.84
tungsten
3,422°
melting point
4.2%
Decrease in global
primary supply
2016 v’s 2015
53%
of consumption (2016)
was in hardmetals/
cemented carbides
Tungsten in numbers
Source: Roskill Tungsten Market Report 2017
OrmOnde
Annual Report & Accounts 2016
e
u
h
g
o
n
o
D
.
J
l
e
a
h
c
M
i
non-executive Chairman
6
Chairman’s Review
We are pleased to report that during 2016 your Company
successfully advanced the Barruecopardo project through
the compulsory land acquisition stage and into the
construction stage. As guided during the year, progress
was somewhat reduced compared to original schedules
with construction contracts having been rescheduled to
run consecutively rather than concurrently. this strategy
has proved timely as metal markets are now showing signs
of a sustained recovery, leading in June 2017 to the Project
company, Saloro SLU (“Saloro”), authorising the issuance
of outstanding approvals on various equipment and plant
construction contracts, such that Barruecopardo should
now be coming on stream into a more favourable global
economic environment.
Barruecopardo
During 2016, the Barruecopardo operating subsidiary Saloro SLU completed
the acquisition of land for which title was clear and for which lease with option
to purchase arrangements were in place. Most of the remaining land blocks
required for construction had title or boundary were required to be addressed
through the court compulsory acquisition procedures. As this could be a lengthy
process, Saloro sought to expedite matters by requesting the Administration
in Castilla y leon to declare the remaining blocks of land as required for the
common good and in need of “urgent occupation”. this process required a vote of
the Regional Legislative Assembly, which was forthcoming. It was most satisfying
to see this strong commitment and support from the Government for the project.
A few procedural steps remained after this vote, but by December 2016, Saloro
was the legal owner of all of the land required for the development of a mine at
Barruecopardo.
As this land acquisition process was being pursued, activity on the engineering
design, equipment manufacture contracts and construction contracts was being
advanced, albeit at a pace to match the expected land acquisition process.
All main, longer lead time, processing plant has been identified and sized and
contracts let for manufacture. procurement of most of the secondary items of
plant is similarly well advanced. Fairport Engineering, the company expediting the
plant design and procurement, has also been awarded the Plant Construction
Management Contract. These activities, when synchronised with the recent
decision by Saloro to issue the outstanding approvals on various equipment and
plant construction contracts, advances the Project into an accelerated construction
and implementation phase, which sees mine plant commissioning during Q3 2018.
this timing leaves a healthy interval in which to allow the commodity markets to
consolidate their recent gains and move onwards.
A short five-hole exploratory drilling programme around the northern and central
section of the proposed Barruecopardo open pit was completed during 2016.
The main objective of this programme was to confirm extension to the tungsten
mineralisation at depth beneath the main central part of the planned open pit,
whilst also following up on a potentially expanded zone of mineralisation under
the shallow northern end of the open pit. the results of this initial drilling program
were most encouraging, lending support to the concept of a future Stage 2
underground mine at the project
OrmOnde
Annual Report & Accounts 2016
Tungsten market
Other Projects
the focus of your Company during the year has been the
advancement of the Barruecopardo project. the Company’s
Gold projects are being maintained, whilst the La Zarza
project remains under a review of disinvestment options with
the directors deciding it appropriate for the holding value of
this asset to be impaired by €2 million, to a book value of
€3 million, to reflect their current assessment of the asset’s
present value.
Corporate and Financials
The Company has reported a loss for the year of €2.41M,
compared with a profit of €2.07M for 2015. Although the
Group made a small operating profit for the year, however the
effects of the €2M impairment of its La Zarza asset and the
share of loss in its associate investment (the Barruecopardo
Joint Venture B.V., in which the Barruecopardo Project is held,
and which is incurring losses during the project’s developed
stage), resulted in the reported loss for the period.
Finally, I would like to thank shareholders, management, staff
and other stakeholders for your support during the last year;
we believe there is long-term value to be realised through
the Barruecopardo asset and we thank you for your patience
as we journey towards First production.
Michael J. Donoghue
Chairman
As the impediments to mine development are progressively
removed and we advance construction, it is perhaps timely
to look forward at the commodity markets and pricing.
tungsten pricing has traditionally followed the business
cycle and, given the long lead times for mining projects,
the base metal market may be a useful guide to the market
place. Copper had undergone a long decline from $10,000/t
in 2011 to around $4,500/t in late 2015, but a recovery kicked
in during 2016 and pricing is now approaching the $6,000/t
level. there has also been recoveries in the prices of other
base metals including zinc, lead, tin, and to a lesser extent
nickel and aluminium.
Clearly, the overall story is that Barruecopardo is now being
developed in a time of metal price recovery.
In looking at the standalone tungsten market, the situation
at the start of 2016 was somewhat confusing. the largest
tungsten producer in the west, the Canadian mine Cantung,
closed in 2015 and a number of the larger tungsten mines
were clearly struggling with limited reserves, technical
issues and profitability. Moreover, practically all advanced or
resource based tungsten projects, previously being touted
for development, were either abandoned or effectively
mothballed. Against this background, there was an upswing
in tungsten Apt prices from $160/mtu early in 2016 to $220/
mtu in May before dropping back to around $180/mtu during
August 2016. the reason for this became more evident as the
year progressed. the forecast primary supply shortage was
indeed developing, with tungsten concentrates very clearly
being sought as feedstock by the main APT producers, but
it was equally clear that there was a surplus of Apt in the
market place, depressing prices. As industry practice is that
mine produced concentrates are priced relative to the Apt
prices, anomalies in the latter are imposed on the former.
It became clear that until the surplus of APT, presumably
largely produced pre-2016 from China, is consumed, that the
fundamental true market supply-demand realities, based
on primary mine production, would not dictate pricing. This
process appears to be underway; tungsten Apt prices have
seen a slow but steady increase to its current level of $223/
mtu, with many indicators now pointing towards a sustained
increase in the tungsten price into the future. What is clear is
that tungsten concentrates are in tight supply and are likely
to become tighter as global economic activity increases
and no new tungsten mines are developed. China’s efforts
to tighten up its tungsten industry, to enforce a crackdown
on illegal mining and to ensure cut-backs in tungsten mine
production, will also tend to reinforce this trend. In summary,
tungsten supply-demand dynamics and pricing now look
more favourable in advance of Barruecopardo coming on
stream.
7
OrmOnde
Annual Report & Accounts 2016
Review of activities
2016 was a year of significant progress across a range of activities at the Barruecopardo
tungsten project.
Following the successful completion in 2015 of a robust $100 million financing package for
the Project with OCM Luxembourg Tungsten Holdings S.À.R.L., funds managed by Oaktree
Capital Management, L.P. (“Oaktree”), the Project was advanced into the engineering and
procurement, and pre-construction preparatory stages.
In parallel, the Project Company “Saloro” was also heavily focused on the critical area of land
acquisition of the remaining plots required to enable full development of the project. We were
pleased to be in a position to announce by year end that Saloro had achieved full access to
and ownership of all lands necessary to construct the project and commence production.
Land Access – a Key Priority
With virtually all of the land blocks that were under option-
to-purchase agreements (75% of required blocks) having
been acquired by Saloro by early 2016, attention then
focused on obtaining the remaining lands required to enable
development of the project.
this involved the requirement to complete the compulsory
acquisition process commenced by Saloro in early 2015.
Spanish law allows for either a ‘normal’ or a ‘Fast track’
compulsory acquisition route to be applied for, with the Fast
track option enabling Saloro to own and occupy the required
lands prior to the details and pricing of such compulsory
acquisition being finalised. Saloro had requested, in its
submissions and through continued lobbying, for the second
option to be applied.
Early in 2016, whilst the compulsory acquisition process was
advancing, notification was received of an appeal lodged by a
third party against an administrative step in the process. After
careful consideration and following detailed legal advice, it
was decided to optimise the project construction schedule
to one that balanced the most likely scenarios with regard
to compulsory acquisition timelines, whilst also aligning the
Project targeted first production date with expectations for a
more favourable Apt price environment.
the third party appeal was subsequently rejected at the initial
administrative level, reinforcing the Company’s belief that the
basis of the appeal had always been entirely without merit.
Shortly after this rejection, Saloro received the final major
approval relating to the Fast-Track process, being the
Declaration of urgent occupation. this step required a
vote of the Regional Government of Castilla y leon and
the fact that it was approved promptly, and ahead of the
date expected, reflects the support that the Barruecopardo
Project enjoys, both publicly and politically, in the region. This
legal declaration represented the completion of the main
legal prerequisite required to allow for immediate access to,
and use of, the lands without having to await the completion
8
of the compulsory purchase process. There were, however,
still a few procedural steps remaining to be completed prior
to physical access to the lands being achieved.
these steps in the process included a public meeting with
parties interested in the process, the placement by Saloro
of financial bonds equal to the estimated value of the lands
to be compulsory purchased, and the subsequent issue of
the Final Acts of occupation for the lands concerned by
the Salamanca Provincial Industry Department, all of which
were completed in the second half of the year. this enabled
the Company to report towards the end of 2016 that Saloro
had become the legal owner of these land blocks, resulting
in it having full rights to access and utilise all of the lands
necessary to develop the project. ownership of these
remaining lands was achieved well ahead of forecast.
This was a significant achievement and an
important
milestone to reach, representing as it did the removal of
the final obstacle to Saloro being in a position to advance
the full construction development schedule for the project
on a timeline determined to be in the best interests of all
stakeholders.
Certain appeals were also commenced against
the
Administration in Castilla y leon in relation to the completed
Fast-track land access process. these appeals are not
lodged against Ormonde or Saloro, although Saloro has
been included in the appeal process as an interested party.
Saloro’s lawyers do not consider these appeals to represent
any material risk to the project.
Preparations for First Production
An extensive range of activities are required to be conducted
and completed prior to commissioning a mining plant. In
2015, Fairport Engineering Limited (‘’Fairport’’) commenced
detailed construction engineering design works for the
process plant and infrastructure, and significant further
progress was achieved in 2016.
OrmOnde
Annual Report & Accounts 2016
these activities included the placing of orders for priority
equipment for the Project, including the award of the turnkey
crushing and screening plant supply and Install contract to
Metso Minerals portugal; the award of the turnkey water
treatment plant contract to the Spanish subsidiary of Veolia
Water technologies; and the award of the contract for supply
of the jig pre-concentration circuit. orders were also placed
for the tungsten dryer and cooler, dewatering units, rod and
ball mill, and the fines filter press, followed by orders for the
pre-concentrate screen (a most critical component for the
correct functioning of the processing plant) as well as for the
thickeners. Placement of these orders enabled finalisation of
the construction civils designs, by Fairport.
During this period, Saloro also awarded the Construction
Management Contract for the Project to Fairport, whose
performance and professionalism had impressed during the
basic and detailed engineering stages of the project.
included
Key onsite activities completed during 2016
completion of final geotechnical site
investigations,
preparation of the construction designs for the water
management system, completion of dams compaction trials,
installation of the potable waterline and HV powerline conduit,
completion of a compensating by-pass road, installation of
a site perimeter road and perimeter fencing, construction of
all site access roads, laydown areas and principle drainage
controls, in addition to advancing all of the pre-construction
environmental works as required by project environmental
approvals. the latter included the establishment of rabbit
breeding colonies and alternative white stork nesting sites, the
removal of old overhead power poles and lines, the removal
of existing contaminations at the site, the reconstruction of
existing stone fences, and the continuation of annual wildlife
breeding period monitoring and census activities in the areas
surrounding the project site.
Later in the year, construction site clearing and levelling
activities were also commenced.
there were also many important secondary permissions
received during the year, notable amongst which was the
water-use license, required for pumping and use of the
historical pit lake waters, whilst all required environmental
bonds were also put in place.
Revised Construction Schedule
in mid-2011 and
tungsten prices peaked
thereafter
prices suffered similar declines to that seen in most other
commodities, reaching a low of US$162 per metric tonne
unit (“mtu”) in January 2016. However, a sustained recovery
appears now to be taking hold, with prices having recently
reached uS$223 per mtu by mid-June 2017. the prognosis
reported by independent metal research firms is for this
recovery to continue during 2017, with many indicators now
pointing towards continued increases in the tungsten price
over the coming years.
In light of the above, and following a period of review of
the construction schedule, the Board of Saloro has now
authorised the
issuance of outstanding approvals on
various equipment and plant construction contracts, thus
advancing the project into an accelerated construction and
9
OrmOnde
Annual Report & Accounts 2016
Review of activities
implementation phase, with an updated schedule allowing
for mine commissioning in the third quarter of 2018. Against
the backdrop of rising tungsten APT prices, and increasing
demand for tungsten concentrates, this updated timeline
should result in lower risk, when compared with the timing
of prior schedules.
In line with these adjustments to the Project schedule, Saloro
has agreed amendments to the project’s debt facility with
the debt provider to reflect the new schedule, thus ensuring
continued compliance with this agreement.
Enhancing Value at Barruecopardo
the Barruecopardo project has always displayed clear
potential for increased resources and mine life, with drilling
prior to 2015 having been focused near surface above
a depth of c. 250 metres, but with potentially economic
tungsten mineralisation having been encountered in many of
the deeper holes.
Given the above, Saloro decided in late 2015 to initiate a
limited (5 hole, 2000m) drilling program with the objective
of confirming extensions to the mineralisation at depth
beneath the main central zone of the planned nine year
open pit, whilst also following up a potentially expanded
zone of mineralisation under the shallow northern end of the
pit, which was identified by drilling in 2012. Results from the
program completed in early 2016 were very encouraging,
with the main objective being realised, showing the central
zone mineralisation continuing with depth, suggesting that
the objective of the Saloro partners to eventually develop
Barruecopardo into a longer life underground mine appears
well based.
Excellent results obtained from 2,000m drilling program
commenced during Q4 2015 (as reported in May 2016),
including:
BAR
83
BAR
83
BAR
85
BAR
86
23m @ 0.26% WO3 from 172m
(including 4m @ 1.23% Wo3)
5m @ 1.95 % WO3 from 404m
25m @ 0.21% WO3 from 334m
(including 5m @ 0.59% Wo3)
6m @ 2.59% WO3 from 253m
These results support the current resource interpretation,
whilst continuing to confirm the significant potential to extend
mineralisation at depth.
Saloro remains committed to the objective of increasing the
value of the Barruecopardo asset through both extensions
to the mine life and/or increases in the eventual production
rate. Further drilling to pursue this objective will be carried
out during the development and early production stages,
with the ultimate aim of extending the Barruecopardo mine
life substantially through the development of a “Stage 2”
underground mine at the project.
10
OrmOnde
Annual Report & Accounts 2016
Under the terms of the Joint Venture, Ormonde can elect to
contribute or not to any particular 6-month work program,
with dilution ensuing in the case of non-contribution.
At the end of 2016, Ormonde’s interest in the Joint Venture
was 42% in the Zamora permits and 47% in the Salamanca
permits.
La Zarza
no work activities were carried out at la Zarza during the
year. the Company continues to seek to obtain value from a
divestment of its interest in the project.
Gold Projects
An independent geological review of the Aurum (now
Shearwater Group plc.) – ormonde Joint Venture gold
properties was commissioned by the Joint Venture in early
2016, aimed at taking a fresh look at the results of past
exploration work on these gold exploration projects and in
particular the nature of the controlling structures and the
general geological models, to assist in developing new ideas
aimed at:
(a) adding significant project value; and
(b) advancing each project towards initial reportable
resource estimation.
This review both reaffirmed the potential of these projects to
host significant gold mineralisation, whilst at the same time
identifying potential new drilling targets. Follow-up work has
been planned on the JV properties and is awaiting finalisation
of renewals of the associated investigation permits by the
Regional Government to enable works to commence.
11
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Directors’ Report
The Directors present their Annual Report and Audited Financial Statements, for the year ended 31 December 2016, of Ormonde
Mining plc (“the Company”) and its subsidiaries (collectively “the Group”).
Principal Activity
the Company is listed on the enterprise Securities Market (eSM) of the Irish Stock exchange and the Alternative Investment
Market (AIM) on the london Stock exchange.
The principal activity of the Company and its subsidiaries comprises acquisition, exploration, and development of mineral resource
projects in Spain.
Review of Business and Future Developments
A detailed review of activities for the year and future prospects of the Group is contained in the Chairman’s Review and Review
of Activities section of this report.
Principal Risks and Uncertainties
the Group’s activities are carried out in Spain and Ireland. Accordingly the principal risks and uncertainties are considered to be
the following:
Exploration Risk
exploration and development activities may be delayed or adversely affected by factors outside the Group’s control, in particular;
climatic conditions, performance of joint venture partners or suppliers, availability, delays or failures in installing and commissioning
plant and equipment; unknown geological conditions; remoteness of location; actions of host governments or other regulatory
authorities (relating to, inter alia, the grant, maintenance or renewal of any required authorisations, environmental regulations or
changes in law).
Commodity Price Risk
The demand for, and price of, tungsten, gold, copper, base metals and other minerals is dependent on global and local supply
and demand, actions of governments or cartels and general global economic and political developments.
Political Risk
As a consequence of activities in different parts of the world, the Group may be subject to political, economic and other
uncertainties, including but not limited to terrorism, war or unrest, changes in national laws and energy policies and exposure to
different legal systems.
Financial Risk
Financial risk is explained in greater detail in note 24.
12
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Share Price
the share price movement in the year ranged from a low of €0.01130 to a high of €0.0300 (2015 : €0.0100 to €0.0500). the share
price at the year end was €0.0175 (2015 : €0.0180).
Results and Dividends
the results for the year ended 31 December 2016 are set out in the Consolidated Statement of Comprehensive Income on page
20 of this Annual Report.
no dividends are recommended.
Directors
the names of the current Directors are set out on the inside back cover.
In accordance with the Articles of Association, John Carroll retires from the Board and being eligible offers himself for re-election.
Details of Executive Directors
Mr. Stephen J. Nicol is a mining engineer with some 30 years experience in the mining industry, initially in operations and
subsequently in mine evaluation and development projects. He has held production supervisory roles in various underground
and open pit mines in Australia and Europe, culminating in a two year period as Managing Director of an Italian based gold mining
and exploration operation. Prior to joining Ormonde, he had been operating as an independent consultant working on gold
and base metal mine evaluation projects in Romania, Greece, Italy, Guinea, Kazakhstan, Canada and the Congo. Stephen was
appointed to the Board in April 2008, and served as Chief Operating Officer until September 2015 when he was appointed to the
position of Managing Director.
Details of Non-Executive Directors
Mr. Michael J. Donoghue is a mining engineer by profession and has wide experience in the evaluation, funding, development
and operation of mines in Europe, Africa, South-East Asia, Australia and the Americas. His executive management experience
includes an eight-year period as General Manager - Operations for Delta Gold NL, Australia. Michael was appointed Chairman of
ormonde in April 2004 and he is a member of the Audit Committee and Remuneration Committee.
Mr. John A. Carroll is a chartered secretary by profession, and has over 30 years experience including seven years as a manager
with KPMG in the Investment Company Department. He has widespread business contacts in Ireland and significant experience
in the resource sector. He was appointed Company Secretary in March 2005 and is a member of the Audit Committee.
Mr. Jonathan Henry is currently President and Chief Executive Officer of TSX-listed Gabriel Resources Ltd. Between 1994 and
2010 he worked with Avocet Mining plc, now a West African gold mining and exploration company operating the Inata Gold
Mine in Burkina Faso, in a variety of senior management capacities including Finance Director and Chief Executive Officer of the
Company. During his tenure at Avocet he oversaw successful exploration, feasibility study, mine development and capital funding
activities, plus a number of acquisitions and disposals of mine assets in Portugal, Peru, USA, Tajikistan, Burkina Faso, Malaysia
and Indonesia. Avocet’s activities during Mr Henry’s tenure also included the redevelopment and operation of tungsten mining
and processing operations in Portugal, Peru and USA. Mr Henry has an honours degree in Natural Sciences from Trinity College,
Dublin. Jonathan is on the Remuneration Committee.
Directors
John Carroll
Michael Donoghue
Jonathan Henry
Stephen nicol
19/06/16
31 Dec ‘16
1 Jan ‘16
Ordinary Shares
Ordinary Shares
Ordinary Shares
2,184,251
3,595,233
-
192,105
2,184,251
3,595,233
-
192,105
2,184,251
3,595,233
-
192,105
13
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Directors’ Report
Directors
John Carroll
John Carroll
John Carroll
Michael Donoghue
Michael Donoghue
Michael Donoghue
Stephen nicol
Stephen nicol
Stephen nicol
19/06/17
31/12/16
01/01/16
Shares Options
Shares Options
Shares Options
- +
750,000 #
750,000 \
- ^
750,000 #
1,000,000 \
1,000,000 “
2,000,000 \
3,000,000 *
- +
750,000 #
750,000 \
- ^
750,000 #
1,000,000 \
1,000,000 “
2,000,000 \
- *
750,000 +
750,000 #
750,000 \
300,000 ^
750,000 #
1,000,000 \
1,000,000 “
2,000,000 \
- *
No change in the above share options has occurred between 31 December 2016 and the date of approval of these financial
statements.
+ - Share options were exercisable at a price of €0.041 and expired on 11 May 2016
^ - Share options were exercisable at a price of €0.21 and expired on 26 october 2016
# - Share options are exercisable at a price of €0.034 at any time up to 13 August 2018.
“ - Share options are exercisable at a price of €0.109 at any time up to 14 April 2018.
\ - Share options are exercisable at a price of €0.068 at any time up to 3 october 2020.
* - Share options are exercisable at a price of €0.025 at any time up to 4 october 2025.
All the above shareholdings are beneficially held. No Director, Secretary or any member of their immediate families had an
interest in any subsidiary.
See Note 21 for details of the share option scheme. In addition, the rules of the Company’s share option schemes are available
for inspection at the registered office of the Company.
Transactions Involving Directors
There have been no contracts or arrangements of significance during the year in which Directors of the Company were interested
other than as disclosed in Note 22 to the financial statements.
Significant Shareholders
The Company has been informed or is aware that, in addition to the interests of the Directors, at 31 December 2016 and the date
of this report, the following shareholders own 3% or more of the issued share capital of the Company:
M & G Investment Managers
thomas Anderson
Goodbody Stockbrokers nominees limited
Rathbone Brothers plC
Percentage of issued share capital
19/06/17
31/12/16
8.97%
8.38%
6.75%
4.98%
8.97%
8.38%
6.45%
4.98%
the Directors are not aware of any other holding of 3% or more of the share capital of the Company.
Subsidiary Undertakings
Details of the Company’s subsidiaries are set out in Note 14 to the financial statements.
Political Donations
There were no political donations during the year (31 December 2015 : Nil) as defined by the Electoral Act 1997.
14
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Directors’ Responsibility Statement
The Directors are responsible for preparing the Annual Report and the Group and Company financial statements, in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. As
required by AIM and ESM rules and as permitted by company law, the Directors have prepared the Group financial statements
in accordance with International Financial Reporting Standards (IFRSs) as adopted by the eu (eu IFRS) and have elected to
prepare the Company financial statements in accordance with EU IFRS, as applied in accordance with the provisions of the Irish
Companies Act, 2014 (“the Companies Acts”).
The Group and Company financial statements are required by law and EU IFRS to present fairly the financial position and
performance of the Group; the Companies Acts provide, in relation to such financial statements, that references in the relevant
part of the Acts to financial statements giving a true and fair view are references to their achieving a fair presentation.
In preparing each of the Group and Company financial statements, the Directors are required to:
- select suitable accounting policies and apply them consistently;
- make judgements and estimates that are reasonable and prudent; and
- state whether the financial statements have been prepared in accordance with IFRS as adopted by the european
union and as regards the Company as applied in accordance with the Companies Act 2014; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and
Company will continue in business.
the Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time
the assets, liabilities, financial position and profit or loss of the Company and which enable them to ensure that the financial
statements of the Group are prepared in accordance with IFRS, as adopted by the EU and comply with the provisions of the
Companies Act 2014. they have a general responsibility for taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and other irregularities. Under applicable law, the Directors are also
responsible for preparing a director’s report that complies with the Companies Act 2014.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Going Concern
As further disclosed in Note 2 the Directors have reviewed budgets, projected cash flows and other relevant information, and on
the basis of this review, are confident that the Company and the Group should be in a position to have adequate financial resources
to continue in operational existence for a period of twelve months from the date the financial statements were approved by the
Directors.
the Group is in receipt of revenue relating to services provided to the Barruecopardo Joint Venture BV Group (which holds the
Barruecopardo Tungsten Project). The revenue provides sufficient cash flow to meet the Group’s annual operating costs. To
the extent that revenue no longer provided sufficient cashflow to meet the Group’s annual operating costs, the Group may be
required to seek alternative sources of funding such as equity finance.
the future of the Company and the Group is also dependent on the successful future outcome of its exploration interests and of
the availability of further funding to bring these interests to production.
The Directors consider that in preparing the financial statements they have taken into account all information that could reasonably
be expected to be available. Consequently, they consider that it is appropriate to prepare the financial statements on the going
concern basis.
15
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Directors’ Report
Corporate Governance
The Directors are committed to maintaining the highest standards of corporate governance commensurate with the size, stage
of development and financial status of the Group.
the Board is responsible for the supervision and control of the Company and is accountable to the shareholders. the Board
has reserved decision-making on a variety of matters, including determining strategy for the Group, reviewing and monitoring
executive management performance and monitoring risks and controls.
The Board currently has four Directors, comprising one executive director and three non-executive directors. The Board met
formally on eight occasions during the year ended 31 December 2016. An agenda and supporting documentation was circulated
in advance of each meeting. All the Directors bring independent judgement to bear on issues affecting the Group and all have full
and timely access to information necessary to enable them to discharge their duties. non-executive directors are not appointed
for specific terms, with one third of non-executive directors up for re-election each year and each new director is subject to
election at the next Annual General Meeting following the date of appointment.
The following committees deal with the specific aspects of the Group affairs:
Audit Committee
this Committee comprises two non-executive directors. the external auditors have the opportunity to meet with members of the
Audit Committee without executive management present at least once a year. the duties of the Committee include the review of
the accounting principles, policies and practices adopted in preparing the financial statements, external compliance matters and
the review of the Group’s financial results.
Nominations Committee
Given the current size of the Group a nominations Committee is not considered necessary. the Board reserves to itself the
process by which a new director is appointed.
Remuneration Committee
This Committee comprises two non-executive directors. This Committee determines the contract terms, remuneration and other
benefits of the executive Directors, Chairman and non-executive Directors. Further details of the Group’s policies on remuneration,
service contracts and compensation payments are given in the Remuneration Committee Report below.
the Group’s policy on senior executive remuneration is designed to attract and retain individuals of the highest calibre who
can bring their experience and independent views to the policy, strategic decisions and governance of the Group. In setting
remuneration levels, the Remuneration Committee takes into consideration the remuneration practices of other companies of
similar size and scope. A key philosophy is that staff must be properly rewarded and motivated to perform in the best interests
of the shareholders.
Total remuneration to Directors during the year ended 31 December 2016 was €305,607 (31 December 2015: €442,720):
Executive Directors
Stephen nicol
Kerr Anderson (deceased 31 July 2015)
Total Executive Directors' remuneration
Non-Executive Directors
Michael Donoghue
John Carroll
Jonathan Henry
Total Non-executive Directors' remuneration
Total Directors' remuneration
16
31/12/16
31/12/15
€
€
159,880
-
159,880
75,524
35,203
35,000
145,727
305,607
180,607
116,346
296,953
99,642
37,375
8,750
145,767
442,720
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Communications
the Group maintains regular contact with shareholders through publications such as the annual and interim report via press
releases and the Group’s website, www.ormondemining.com. Management is responsive to shareholder telephone and e-mail
enquiries throughout the year. the Board regards the Annual General Meeting as a particularly important opportunity for
shareholders, Directors and management to meet and exchange views.
Internal Control
the Board is responsible for maintaining the Group’s system of internal control to safeguard shareholders investments and Group
assets.
the Directors have overall responsibility for the Group’s system of internal control and have delegated responsibility for the
implementation of this system to Executive Management. This system includes financial controls that enable the Board to meet
its responsibilities for the integrity and accuracy of the Group’s accounting records.
The Group’s system of internal financial control provides reasonable, though not absolute, assurance that assets are safeguarded,
transactions authorised and recorded properly and that material errors or irregularities are either prevented or detected within
a timely period. Having made appropriate enquiries, the Directors consider that the system of internal financial, operational and
compliance controls and risk management operated effectively during the period covered by the financial statements and up to
the date on which the financial statements were signed.
The internal control system includes the following key features, which have been designed to provide internal financial control
appropriate to the Group’s businesses:
- budgets are prepared for approval by the Board;
- expenditure and income are compared to previously approved budgets;
- a detailed investment approval process which requires Board approval of all major capital projects and regular review of the
physical performance and expenditure on these projects.
- all commitments for expenditure and payments are compared to previously approved budgets and are subject to approval
by personnel designated by the Board of Directors.
- cash flow forecasting is performed on an ongoing basis to ensure efficient use of cash resources.
- the Directors, through the Audit Committee, review the effectiveness of the Group’s system of internal financial control.
Accounting Records
the measures taken by the Directors to ensure compliance with the requirements of Sections 281 to 285 of the Companies Act
2014 with regard to the keeping of accounting records, are the employment of appropriately qualified accounting personnel
and the maintenance of computerised accounting systems. the Company’s accounting records are maintained at Bracetown
Business Park, Clonee, Co Meath, Ireland.
Auditor
The Auditors, LHM Casey McGrath Limited have indicated their willingness to continue in office.
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
__________________
Michael Donoghue
director and
non executive Chairman
17
OrmOnde
Annual Report & Accounts 2016
Independent Auditors’ Report
We have audited the financial statements of Ormonde Mining plc, for the year ended 31 December 2016, which comprise
the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement
of Financial Position, Consolidated Statement of Cash Flows, Company Statement of Cash Flows, Consolidated Statement of
Changes in Equity, Company Statement of Changes in Equity and related notes. The financial reporting framework that has been
applied in their preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the european union
and, as regards the company financial statements, as applied in accordance with provisions of the Companies Act 2014.
this report is made solely to the Company’s members as a body in accordance with the requirements of Section 391 of the
Companies Act 2014. our audit work has been undertaken so that we might state to the Company’s members those matters that
we are required to state to them in the Audit Report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company or the Company’s members as a body for our audit work, for
this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the
financial statements giving a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in
accordance with Irish law and International Standards on Auditing (uK and Ireland). those standards require us to comply with the
Financial Reporting Council’s ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statement sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to the Company’s circumstances and have been consistently
applied and adequately disclosed: the reasonableness of significant accounting estimates made by the Directors; and the overall
presentation of the financial statements and to identify any information that is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of performing the audit. In addition, we read all the financial and
non-financial information in the Chairman’s Report, Review of Activities and Directors Report to identify material inconsistencies
with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider
the implications for our report.
Opinion
In our opinion
- The Group financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union, of the
state of the Group’s affairs as at 31 December 2016 and of its profit and cash flows for the year then ended; and
- The Company financial statements give a true and fair view of the state of the Company’s affairs as at 31 December 2016 ; and
- The Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; and
- the Company statement of financial position has been properly prepared in accordance with IFRS as adopted by the
european union and as applied in accordance with the provision of the Companies Act 2014; and
- The Group and Company financial statements have been properly prepared in accordance with the Companies Act 2014.
18
OrmOnde
Annual Report & Accounts 2016
Matters on which we are required to report by the Companies Act 2014.
- We have obtained all the information and explanations which we considered necessary for the purpose of our audit.
- In our opinion the accounting records of the parent company were sufficient to permit the financial statements to be
readily and properly audited.
- the parent Company Statement of Financial position is in agreement with the books of account.
- In our opinion the information given in the Directors Report is consistent with the financial statements
Matters on which we are required to report by exception
We have nothing to report, in respect of the provisions, in the Companies Act 2014, to you if, in our opinion, the disclosures of
directors’ remuneration and transactions specified by section 305 to 312 of the Act are not made.
_____________________
Brendan Murtagh
Statutory auditor
For and on behalf of
LHM Casey McGrath Limited
Chartered Certified Accountants
Statutory Audit Firm
6 Northbrook Road, Dublin 6, Ireland.
Date: 19 June 2017
19
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Consolidated Statement of Comprehensive Income
Continuing Operations
turnover - Continuing operations
Administrative expenses
Investment income
Amounts written off intangible assets
Finance costs
Profit/(loss) for the year before taxation
Income tax expense
Profit/(loss) on ordinary activities after taxation
Group share of loss on associate investment
Total comprehensive income/(loss) for the year
(Loss)/Profit attributable to:
owners of the Company
Total comprehensive income/(loss) attributable to:
owners of the Company
Earnings/(loss) per share from continuing operations
Basic (loss)/profit per share (in cent)
Diluted (loss)/profit per share (in cent)
Notes
2016
€ 000's
2015
€ 000's
1,000
(856)
-
(2,000)
-
(1,856)
(1)
(1,857)
(552)
(2,409)
(2,409)
(2,409)
(2,409)
(2,409)
(0.51)
(0.51)
527
(1,443)
3,397
-
(42)
2,439
-
2,439
(368)
2,071
2,071
2,071
2,071
2,071
0.44
0.44
5
6
7
11
14
10
10
All activities derive from continuing operations. All profits/ losses and total comprehensive profit/ loss for the year are attributable
to the owners of the Company.
the Company had no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income.
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
__________________
Michael Donoghue
director and
non executive Chairman
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
20
Consolidated Statement of Financial Position
Notes
2016
€ 000's
2015
€ 000's
OrmOnde
Annual Report & Accounts 2016
as at 31 December 2016
ASSetS
Non-Current Assets
Intangible assets
Property, plant and equipment
Financial assets
Total Non-Current Assets
Current Assets
trade and other receivables
Cash and cash equivalents
Total Current Assets
Total Assets
EQUITy AND LIABILITIES
Capital and Reserves
Issued capital
Share premium account
Share based payment reserve
Capital conversion reserve fund
Capital redemption reserve fund
Foreign currency translation reserve
Retained loss
Equity Attributable to Owners of the Company
Total Equity
Current Liabilities
trade and other payables
total Current liabilities
Total Liabilities
Total Equity and Liabilities
12
13
14
15
16
18
18
19
19
19
18
20
17
3,300
-
16,026
19,327
36
694
730
20,057
13,485
29,932
837
29
7
1
(24,497)
19,795
19,795
264
264
264
20,057
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
__________________
Michael Donoghue
director and
non executive Chairman
5,279
1
16,579
21,859
35
653
688
22,547
13,485
29,932
837
29
7
1
(22,089)
22,202
22,202
345
345
345
22,547
21
OrmOnde
Annual Report & Accounts 2016
as at 31 December 2016
Company Statement of Financial Position
Notes
2016
€ 000's
2015
€ 000's
ASSetS
Non-Current Assets
Property, plant and equipment
Investment in subsidiaries
Total Non-Current Assets
Current Assets
trade and other receivables
Cash and cash equivalents
Total Current Assets
Total Assets
EQUITy AND LIABILITIES
Capital and Reserves
Issued capital
Share premium account
Share based payment reserve
Capital conversion reserve fund
Capital redemption reserve fund
Retained loss
Equity Attributable to Owners of the Company
Total Equity
Current Liabilities
trade and other payables
total Current liabilities
Total Liabilities
Total Equity and Liabilities
13
14
15
16
18
18
19
19
19
20
17
-
8,780
8,780
8,295
520
11,068
17,595
13,485
29,932
837
29
7
(26,905)
17,385
17,385
210
210
210
1
5,965
5,966
13,207
423
13,630
19,596
13,485
29,932
837
29
7
(24,919)
19,371
19,371
225
225
225
17,595
19,596
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
__________________
Michael Donoghue
director and
non executive Chairman
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
22
Consolidated Statement of Cashflows
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes
2016
€ 000's
2015
€ 000's
(1,856)
2,439
Cashflows from operating activities
Profit for the year before taxation
Adjustments for:
Depreciation
Write down of intangible assets
Finance costs recognised in profit or loss
Cashflow from operating activities
Movement in working capital
Movement in debtors
Movement in creditors
Net cash generated by operating activities
Cashflows from financing activities
Interest paid
other equity movement
Cashflow from financing activities
Cashflows from investing activities
net expenditure on intangible assets
Interest received
Acquisitions and disposals
Net cash generated by / (used in) investing activities
Share of loss in associate
Cashflow from investing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
15
15
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
__________________
Michael Donoghue
director and
non executive Chairman
1
2,000
-
145
(1)
(82)
62
-
-
62
(21)
-
552
465
(552)
(21)
41
653
694
-
42
2,481
186
133
2,800
(42)
1,074
3,832
(16)
-
(3,306)
(3,322)
(368)
(3,690)
142
511
653
23
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Company Statement of Cashflows
Notes
2016
€ 000's
2015
€ 000's
Cashflows from operating activities
loss for the year before taxation
Adjustments for:
Depreciation
Finance costs recognised in profit or loss
Cashflow from operating activities
Movement in working capital
Movement in debtors
Movement in creditors
Net cash generated by / (used in) operating activities
Cashflows from investing activities
Investment in subsidiary undertakings
Interest received
taxation
Net cash generated by investing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
16
16
(1,986)
1
-
(1,985)
2,097
(15)
97
-
-
-
-
97
423
520
(849)
-
41
(808)
(1,868)
132
(2,544)
2,613
(41)
(1)
2,571
27
396
423
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
__________________
Michael Donoghue
director and
non executive Chairman
24
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Consolidated Statement of Changes in Equity
Share
Capital
Share
Premium
Share
Based
Payment
Reserve
Other
Reserves
Retained
Losses
Total
€ 000's
€ 000's
€ 000's
€ 000's
€ 000's
€ 000's
Balance at 1 January 2015
13,485
29,932
Profits for the year
Derecognition of subsidiaries
-
-
-
-
Balance at 31 December 2015
13,485
29,932
Balance at 1 January 2016
loss for the year
13,485
29,932
-
-
Balance at 31 December 2016
13,485
29,932
837
-
-
837
837
-
837
37
-
-
37
37
-
37
(25,234)
19,057
2,071
1,074
2,071
1,074
(22,089)
22,202
(22,089)
(2,409)
(24,498)
22,202
(2,409)
19,793
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
__________________
Michael Donoghue
director and
non executive Chairman
25
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Company Statement of Changes in Equity
Share
Capital
Share
Premium
Share
Based
Payment
Reserve
Other
Reserves
Retained
Losses
Total
€ 000's
€ 000's
€ 000's
€ 000's
€ 000's
€ 000's
Balance at 1 January 2015
13,485
29,932
loss for the year
Recognition of share based payments
-
-
-
-
Balance at 31 December 2015
13,485
29,932
Balance at 1 January 2016
13,485
29,932
loss for the year
Recognition of share based payments
-
-
-
-
Balance at 31 December 2015
13,485
29,932
837
-
-
837
837
-
-
837
36
-
-
36
36
-
-
36
(24,070)
(849)
-
20,220
(849)
-
(24,919)
19,371
(24,919)
(1,986)
-
19,371
(1,986)
-
(26,905)
17,385
The accompanying notes on pages 27 - 49 form an integral part of of these financial statements.
on behalf of the Board
__________________
John Carroll
director and
Company Secretary
Date: 19 June 2017
__________________
Michael Donoghue
director and
non executive Chairman
26
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
1. Statement of accounting policies
Ormonde Mining plc (“the Company”) is a company incorporated in Ireland. The Group financial statements consolidate those of
the Company and its subsidiaries (together referred to as the “Group”).
The Group and Company financial statements were authorised for issue by the Directors on (19 June 2017).
Basis of preparation
The Group and Company financial statements (together the “financial statements”) have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU. The financial statements have been prepared on the
historical cost basis. The accounting policies have been applied consistently to all financial periods presented in the Consolidated
Financial Statements.
Statement of Compliance
As permitted by the European Union and in accordance with AIM and ESM Rules, the Group financial statements have been
prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations issued by the International
Accounting Standards Board (IASB) as adopted by the EU (IFRS). The individual financial statements of the Company (“Company
Financial Statements”) have been prepared in accordance with IFRS as adopted by the eu and as applied in accordance with
the Companies Act, 2014 which permits a company, that publishes its company and group financial statements together, to
take advantage of the exemption in Section 304(2) of the Companies Act, 2014, from presenting to its members its Company
Statement of Comprehensive Income and related notes that form part of the approved Company Financial Statements.
The IFRS adopted by the EU as applied by the Company and the Group in the preparation of these financial statements are those
that were effective on or before 31 December 2016.
New accounting standards and interpretations for the year ending 31 December 2016
The following standards, amendments and interpretations apply from 1 January 2016:
- IFRS 2 Share Based Payments - effective for periods beginning on or after 1 February 2015
- IFRS 8 Operating Segments - effective for periods beginning on or after 1 February 2015
- IAS 16 Property Plant and Equipment - effective for periods beginning on or after 1 January 2016
- IAS 24 Related Party Disclosures - effective for periods beginning on or after 1 February 2015
- IAS 38 Intangible Assets - Acceptable methods of depreciation and amortisation - effective for periods beginning on
or after 1 January 2016
There was no material impact to the financial statements in the current year from these standards, amendments and interpretations.
The following standards, amendments and interpretations are not yet required and have not been adopted early by the Group:
- IFRS 9 Financial Instruments - effective for periods beginning on or after 1 January 2018
- IFRS 15 Revenue from Contracts with Customers - effective for periods beginning on or after 1 January 2018
- IFRS 16 Leases - effective for periods beginning on or after 1 January 2019
- IAS 12
Income Tax - effective for periods beginning on or after 1 January 2017
- IAS 39 Financial Instruments: Recognition and Measurement - effective for periods beginning on or after 1 January 2018
There would not have been a material impact on the financial statements if these standards had been applied in the current year.
27
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
Functional and Presentation Currency
These Consolidated Financial Statements are presented in Euro (€), which is the Company’s functional currency.
Use of Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
the estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets
and liabilities that are not readily apparent from other sources.
In particular, there are significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have
the most significant effect on the amounts recognised in the financial statements in the following areas:
- note 10 - Income tax expense - Deferred tax
- note 11 - Intangible Assets
Consolidation
The Consolidated Financial Statements comprise the financial statements of Ormonde Mining plc and its subsidiaries for the year
ended 31 December 2016.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting
rights that are currently exercisable or convertible are taken into account. Subsidiaries are fully consolidated from the date that
control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Group.
Intragroup balances and transactions including any unrealised gains or losses or income or expenses arising from intragroup
transactions are eliminated in preparing the Group financial statements, except to the extent that they provide evidence of
impairment.
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, and non-controlling interests and
the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the
income statement. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the
date control is lost. Subsequently, it is accounted for an equity-accounted investee or as an available for sale financial asset,
depending on the level of influence retained.
The statutory financial statements of subsidiary companies have been prepared under the accounting policies applicable in their
country of incorporation with adjustments made to the results and financial position of such companies to bring their accounting
policies into line with those of the Group for consolidation purposes.
Accounting for associates
Associates are all entities over which the group has significant influence but not control, generally accompanying a shareholding
of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting.
Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to
recognise the investor’s share of the profit or loss of the investee after the date of acquisition.
The Group’s share of post-acquisition profit or loss is recognised in the Statement of Comprehensive Income, and its share of
post-acquisition movements in the Statement of other Comprehensive Income is recognised in the Group Statement of other
Comprehensive Income with a corresponding adjustment to the carrying amount of the investment.
the Group determines at each reporting date whether there is any objective evidence that the investment in the associate is
impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of
the associate and its carrying value and recognises the amount adjacent to ‘share of profit/(loss)’ of associates in the Statement
of Comprehensive Income.
Investment in associates is shown separately on the Statement of Financial position.
Investment in subsidiaries are shown in the Company’s own Statement of Financial position. Investments in subsidiaries are stated
at cost less provisions for any permanent diminution in value.
28
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Exploration and Evaluation Assets
In accordance with International Financial Reporting Standard 6 - Exploration for and Evaluation of Mineral Resources, the Group
uses the cost method of recognition. Exploration costs include licence costs, survey, geophysical and geological analysis and
evaluation costs, costs of drilling and project-related overheads.
exploration expenditure in respect of properties and licences not in production is capitalised and is carried forward in the
Statement of Financial position under intangible assets in respect of each area of interest where:-
(i) the operations are ongoing in the area of interest and exploration or evaluation activities have not reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves; or
(ii) such costs are expected to be recouped through successful development and exploration of the area of interest or
alternatively by its realisation.
Exploration costs include licence costs, survey, geographical and geological analysis on evaluation costs, costs of drilling and
project related overheads.
When the Directors decide that no further expenditure on an area of interest is worthwhile, the related expenditure is written off
or down to an amount which it is considered representative of the residual value of the Group’s interest therein.
Impairment
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is
estimated. For intangible assets that have indefinite lives or that are not yet available for use, recoverable amount is estimated at
each reporting date.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A
cash-generating unit is the smallest identifiable asset group that is expected to generate cash flows that largely are independent
from other assets and groups. Impairment losses are recognised in the Statement of Comprehensive Income. Impairment losses
recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the
units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
the recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
Property, Plant and Equipment
Property, Plant and Equipment are stated at cost or valuation, less accumulated depreciation. Subsequent costs are included
in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group. Depreciation is provided at rates calculated to write off the cost less
residual value of each asset over its expected useful life, as follows:
Computer equipment - 33% Straight line
Fixtures and fittings - 33% Straight line
Motor vehicles - 20% Straight line
The residual value and useful lives of the property, plant and equipment are reviewed annually and adjusted if appropriate at
each Statement of Financial position date.
On disposal of property, plant and equipment the cost and the related accumulated depreciation and impairments are removed
from the financial statements and the net amount, less any proceeds, is taken to the Statement of Comprehensive Income.
29
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
Taxation
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Statement of Comprehensive
Income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for
the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments
in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates
that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend is recognised.
Foreign Currencies
Monetary assets and liabilities denominated in a foreign currency are translated into euro at the exchange rate ruling at the
Statement of Financial Position date. Revenues, costs and non monetary assets are translated at the exchange rates ruling at the
dates of the transactions. All exchange differences are dealt with through the Statement of Comprehensive Income.
Share Based Payments
the fair value of share options granted to directors and employees under the Company’s share option scheme is recognised as
an expense with a corresponding credit to the share based payment reserve. the fair value is measured at grant date and spread
over the period during which the awards vest. the fair value is measured using the Black-Scholes-Merton formula.
the options issued by the Group are subject to both market-based and non-market based vesting conditions. Market conditions
are included in the calculation of fair value at the date of the grant. non-market vesting conditions are not taken into account
when estimating the fair value of awards as at grant date; such conditions are taken into account through adjusting the equity
instruments that are expected to vest.
the proceeds received net of any directly attributable transaction costs will be credited to share capital (nominal value) and share
premium when options are converted into ordinary shares.
Share Capital
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a reduction in equity.
Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing the profit
or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible
notes and share options granted to employees.
Operating Leases
operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight line basis over
the lease term.
30
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Financial Instruments
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial position comprise of cash at bank and in hand and short term deposits
with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s cash
management are included as a component of cash and cash equivalents for the purposes of Statement of Cashflows.
Trade and other receivables and payables
Trade and other receivables and payables are stated at cost less impairment, which approximates fair value given the short dated
nature of these assets and liabilities.
Provisions
provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Where the Group
expects some or all of a provision to be reimbursed, for example, under the insurance contract, the reimbursement is recognised
as a separate asset but only when the reimbursement is virtually certain. the expense relating to any provision is presented in the
Consolidated Statement of Comprehensive Income net of any reimbursement. If the effect of the time value of money is material,
provisions are discounted using current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingencies
A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events or where the
amount of obligation cannot be measured with reasonable reliability. Contingent assets are not recognised, but are disclosed
when an inflow of economic benefit is probable.
31
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
2. Going Concern
The Group made a loss of €2,409,351 and has cash and cash equivalents of €694,216 as at 31 December 2016. The Company
entered into a management services agreement in connection with Barruecopardo Joint Venture BV which provides for an annual
fee of €1,000,000 (€750,000 in 2017, with €250,000 deferred). The Directors are in a position to manage the activities of the Group
such that existing funds available to the Group together with contracted income will be sufficient to meet the Group’s obligations
and continue as a going concern for a period of at least 12 months from the date of approval of the financial statements.
On that basis, the Directors do not consider that a material uncertainty exists in relation to going concern and have deemed it
appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments
that would result if the Group was unable to continue as a going concern.
3. Segment Information
In the opinion of the Directors the operations of the Group comprise one class of business, being the exploration and development
of mineral resources. The Group’s main operations are located in Spain. The information reported to the Group’s Managing Director,
who is the chief operating decision maker, for the purposes of resource allocation and assessment of segmental performance is
specifically focussed on the exploration areas in Spain.
It is the opinion of the Directors, therefore, that the Group has only one reportable segment under IFRS 8 Operating Segments,
which is exploration carried out in Spain. other operations “Corporate” includes cash resources held by the Group and other
operational expenditure incurred by the Group. These assets and activities are not within the definition of an operating segment.
Information regarding the Group’s reportable segment is presented below.
Segment Revenues and Results
the following is an analysis of the Group’s revenue and results from continuing operations by reportable segment:
Segment Revenue
Segment Profit/(Loss)
Exploration - Spain
total for continuing operations
Finance Income
Profit on disposal of subsidiaries
Amounts written off intangible assets
Profit/(loss) before tax (continuing operations)
Segment assets and liabilities
Segment Assets
Corporate - Group Asset
exploration - Spain
Consolidated assets
Segment Liabilities
Corporate - Group liabilities
exploration - Spain
Consolidated liabilities
32
2016
€ 000's
1,000
1,000
2015
2016
2015
€ 000's
€ 000's
€ 000's
527
527
143
143
-
-
(2,000)
(1,857)
(916)
(916)
-
3,397
-
2,439
2016
2015
€ 000's
€ 000's
537
19,520
20,057
210
54
264
444
22,103
22,547
225
120
345
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Other segment information
exploration - Spain
Depreciation and
amortisation
Additions to
non-current assets
2016
€ 000's
1
2015
2016
2015
€ 000's
€ 000's
€ 000's
-
21
16
Revenue from major products and services
Substantially all revenue that the Group received during the period related to the Barruecopardo tungsten project in Spain.
Geographical information
the Group operates in two principal geographical areas - Ireland (country of residence of ormonde Mining plc) and Spain (country
of residence of Ormonde Espana S.L., Ormonde Mineria Iberica S.L.U., Valomet S.L.U. (currently non operational) and Orillum
S.l.u.). ormonde Mining B.V. which is incorporated in the netherlands and the holding company for an associate investment with
operations in Spain.
Information about its non-current assets by geographical location are detailed below:
Ireland
Spain
4. Statutory Information
Auditors' remuneration
Auditors' remuneration from non-audit work
and after crediting:
Profit on foreign currencies
Non-Current Assets
2016
2015
€ 000's
€ 000's
-
19,327
19,327
1
21,858
21,859
2016
2015
€ 000's
€ 000's
25
3
28
3
3
25
12
37
46
46
As permitted by Section 304 of the Companies Act 2014, the Company Income Statement and Statement of Other Comprehensive
Income have not been separately presented in these financial statements.
33
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
5. Income from Investments
Profit on disposal of subsidiaries
6. Amounts written off intangible assets
Amounts written off intangible assets
7. Interest Payable and Similar Charges
on loans and overdrafts
8. employees
Number of employees
the average monthly numbers of employees (including the Directors) during the year were:
Directors
Administration / technical
Employment costs (Including Directors)
Wages and salaries
Social welfare
2016
2015
€ 000's
€ 000's
-
3,397
2016
2015
€ 000's
€ 000's
2,000
2016
2015
€ 000's
€ 000's
-
-
42
42
2016
2015
€ 000's
€ 000's
4
3
7
4
7
11
2016
2015
€ 000's
€ 000's
494
21
515
743
52
795
During the year wages and salaries of €25,070 (2015 : €67,200) were capitalised as intangible assets.
34
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
9. Key management Compensation
Key management includes the Directors of the Company, all members of the company management, and the Company Secretary.
the compensation paid or payable to key management for employee service is shown as below:
Salaries and other short-term employee benefits
10. earnings per share
31/12/16
31/12/15
€ 000's
€ 000's
381
381
570
570
Basic earnings per share
the basic and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
2016
2015
Profit / (loss) for the year attributable to equity holders of the parent
€ 000’s
(2,409)
2,071
Weighted average number of ordinary shares for the purposes of basic earnings
per share
Shares
472,507,482
472,507,482
Basic profit / (loss) per ordinary share (in cent)
€
(0.51)
0.44
Diluted earnings per share
the earnings used in the calculation of the diluted earnings per share are the same as those for the basic earnings per share as
outlined above.
the weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted
average number of ordinary shares used in the calculation of basic earnings per share as follows:
2016
2015
Weighted average number of shares used in the calculation of basic earnings per share
472,507,482
472,507,482
Shares deemed to be issued for no consideration in respect of:
employee options
-
-
Weighted average number of ordinary shares used in the calculation of diluted earnings per share
472,507,482
472,507,482
Diluted profit / (loss) per ordinary share (in cent)
€ (0.51)
0.44
the following potential ordinary shares are not dilutive and are therefore excluded from the weighted average number of ordinary
shares for the purposes of diluted earnings per share:
2016
2015
employee options
15,500,000
12,250,000
35
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
11. Income Tax expense
Current tax
Profit on disposal of subsidiaries
total tax charge
2016
2015
€ 000's
€ 000's
-
-
-
-
The difference between the total current tax shown above and the amount calculated by applying the standard rate of Irish
corporation tax of 12.5% to the loss before tax is as follows:
Profit/(loss) from continuing operations
Income tax expense calculated at 12.5% (31 December 2015: 12.5%)
Effects of:
Impairment on intangible assets
tax relief granted at source on medical insurance
Profit on disposal of investments
Investment income taxable at a different rate
expenses not allowable
unused tax losses not recognised as deferred tax assets
Income tax expense recognised in the profit or loss
2016
2015
€ 000's
€ 000's
(1,856)
(232)
250
1
-
(100)
-
82
1
2,439
305
-
-
(425)
(43)
-
163
-
the tax rate used for the year end reconciliations above is the corporate rate of 12.5% payable by entities in Ireland on taxable
profits under tax law in that jurisdiction.
At 31 December 2016, the Company had unused tax losses of €10,016,697 (2015 : €9,606,518) available for offset against future
profits which equates to a deferred tax asset of €1,252,087 (2015 : €1,200,815). No deferred tax asset has been recognised due to
the unpredictability of the future profit streams. Losses may be carried forward indefinitely.
36
12. Intangible Assets - Group
Cost
Cost
At 1 January 2015
Additions
Disposals
Impairment
At 31 December 2015
Additions
Disposals
Impairment
At 31 December 2016
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
31/12/16
31/12/15
01/01/15
€ 000's
€ 000's
€ 000's
3,300
3,300
5,279
5,279
18,535
18,535
Exploration
& evaluation
assets
€ 000's
18,535
16
(13,272)
-
5,279
21
-
(2,000)
3,300
expenditure on exploration and evaluation activities is deferred on areas of interest until a reasonable assessment can be
determined of the existence or otherwise of economically recoverable reserves. no amortisation has been charged in the period.
the Directors have reviewed the carrying value of the exploration and evaluation assets and consider it to be fairly stated at 31
December 2016.
the Directors have recorded an impairment during the year in the amount of €2 million (nil - 2015).
the recoverability of the intangible assets is dependent on the future realisation or disposal of the mineral resources.
37
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
13. Property, Plant and Equipment
Property, Plant and equipment - Group
Cost or Valuation
At 1 January 2015
Additions
Disposals
At 31 December 2015
Disposals
At 31 December 2016
Accumulated Depreciation and Impairment
At 1 January 2015
Disposals
Depreciation expense
At 31 December 2015
Disposals
Depreciation expense
At 31 December 2016
Net Book Value
Cost or Valuation
Accumulated depreciation and impairment
Net Book Value
Fixtures & fittings
Computer equipment
Net Book Value
Fixtures &
Fittings
Computer
Equipment
Motor
Vehicles
Total
€ 000's
€ 000's
€ 000's
€ 000's
26
-
(6)
20
(12)
8
26
(6)
-
20
(12)
-
8
29
-
-
29
-
29
27
-
1
28
-
1
29
18
-
(18)
-
-
-
18
(18)
-
-
-
-
-
73
-
(24)
49
(12)
37
72
(24)
-
48
(12)
1
37
31/12/16
31/12/15
€ 000's
€ 000's
37
(37)
-
-
-
-
49
(48)
1
-
1
1
38
Property, Plant and equipment - Company
Cost or Valuation
At 1 January 2015
Additions
At 31 December 2015
Additions
At 31 December 2016
Accumulated Depreciation and Impairment
At 1 January 2015
Depreciation expense
At 31 December 2015
Depreciation expense
At 31 December 2016
Net Book Value
Cost or Valuation
Accumulated depreciation and impairment
Net Book Value
Fixtures & fittings
Computer equipment
Net Book Value
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Fixtures &
Fittings
Computer
Equipment
Total
€ 000's
€ 000's
€ 000's
20
-
20
-
20
20
-
20
-
20
20
-
20
-
20
18
1
19
1
20
40
-
40
-
40
38
1
39
1
40
31/12/16
31/12/15
€ 000's
€ 000's
40
(40)
-
-
-
-
40
(39)
1
-
1
1
39
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
14. Financial Assets
Financial Assets - Group
Cost
At 1 January 2016
Additions
Group’s share of losses in the associate
At 31 December 2016
31/12/16
31/12/15
€ 000's
€ 000's
16,579
-
(552)
16,027
-
16,947
(368)
16,579
the Group’s investment in Barruecopardo Joint Venture BV is deemed to be an associate investment under IFRS and is accounted
for using equity accounting. A summary of the Group’s associate is set out below :-
Associate
Activity
Incorporated in
Proportion of ownership
held
Barruecopardo Joint Venture BV
Mineral exploration
the netherlands
30%
Summarised financial information of the associate has been set out below. The summarised financial information shown represents
amounts from the associate’s financial statements. The statutory financial statements of the associate have been prepared under
the accounting policies applicable in the country of incorporation with adjustments made, as appropriate, to the results and
financial position to bring their accounting policies into line with those of the Group for consolidation purposes.
non current assets
Current assets
Current liabilities
non current liabilities
The following amounts have been included in the amounts above
Cash and cash equivalents
Current financial liabilities
Non current financial liabilities
loss from continuing operations
total comprehensive loss
The following amounts have been included in the amounts above
Depreciation and amortisation
Interest income
Interest expense
taxation credit carried forward
31/12/16
31/12/15
€ 000's
€ 000's
37,742
20,515
(1,404)
(1,359)
24,246
31,911
(964)
-
2,498
11,405
-
-
(1,840)
(1,840)
10
9
0
173
-
-
(1,226)
(1,226)
18
10
8
98
The summarised financial information is not the entity’s share but the actual amount included in the separate IFRS financial
statements of the associate.
the main risks arising from the Group investment in the Associate are as follows:-
40
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
Investment valuation risk
the value of the investment is dependent on the successful development of evaluation and exploration assets. Should the
development of the evaluation and exploration assets prove unsuccessful, the carrying value in the Statement of Financial
position of the Group’s investment in the associate will reduce accordingly.
Financial Assets - Company
Cost
At 1 January 2015
Additions
Disposals
At 31 December 2015
Additions
Disposals
At 31 December 2016
Accumulated Amortisation and Impairment
At 1 January 2015
Impairment losses recognised in profit and loss
At 31 December 2015
Impairment losses recognised in profit and loss
At 31 December 2016
Net Book Values
At 31 December 2016
At 31 December 2015
Subsidiary
undertakings
shares
€ 000's
14,949
-
(2,612)
12,337
2,815
-
15,152
(6,372)
-
(6,372)
-
(6,372)
8,780
5,965
Subsidiary
Activity
Incorporated in
Proportion of ownership
interest and voting power held
Ormonde Espana, S.L.U.
Mineral exploration
orillum S.l.u.
Mineral exploration
Ormonde Minerica Iberica, S.L.U.
Mineral exploration
Valomet S.l.u.
Mineral exploration
Spain
Spain
Spain
Spain
ormonde Mining B.V.
Holding Company
the netherlands
2016
100%
100%
100%
100%
100%
2015
100%
100%
100%
100%
100%
the value of the investments is dependent on future realisation or disposal. Should the future realisation or disposal prove
unsuccessful, the carrying value in the Statement of Financial Position will be written off. In the opinion of the Directors’ the
carrying value of the investments at 31 December 2016 is appropriate. no impairment was recognised in 2016 or 2015 in respect
of the above investments.
41
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
15. Trade and Other Receivables
Amounts falling due within one year:
Amounts owed by Group undertakings
other debtors
prepayments and accrued income
16. Cash and Cash equivalents
Cash at bank
Group
2016
Group
Company
Company
2015
2016
2015
€ 000's
€ 000's
€ 000's
€ 000's
-
-
36
36
-
17
18
35
8,254
13,187
4
37
2
18
8,295
13,207
Group
2016
Group
Company
Company
2015
2016
2015
€ 000's
€ 000's
€ 000's
€ 000's
694
694
653
653
520
520
423
423
42
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
17. Trade and Other Payables
trade creditors
other taxes and social welfare costs
Accruals and deferred income
Group
2016
Group
Company
Company
2015
2016
2015
€ 000's
€ 000's
€ 000's
€ 000's
28
24
212
264
62
53
230
345
25
8
177
210
49
52
124
225
Some trade creditors had reserved title to goods supplied to the Company. Since the extent to which such creditors are effectively
secured depends on a number of factors and conditions, some of which are not readily determinable, it is not possible to indicate
how much of the above amount is secured under reservation of title.
Other taxes and social welfare costs:
V.A.t.
P.A.y.E./P.R.S.I.
Corporation tax
Group
2016
Group
Company
Company
2015
2016
2015
€ 000's
€ 000's
€ 000's
€ 000's
16
8
-
24
-
53
-
53
-
8
-
8
-
53
(1)
52
the Group’s exposure to currency and liquidity risks related to trade and other payables is set out in note 24.
43
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
18. Share capital - Group and Company
Authorised equity
650,000,000 Ordinary shares of 2.5 cent each
100,000,000 Deferred shares of 3.809214 cent each
Issued capital
Share capital
Share premium
Issued capital comprises:
472,507,483 ordinary shares of 2.5 cent each
(31/12/15 : 472,507,483 and 01/01/15 : 472,507,483)
43,917,841 fully paid deferred shares
(31/12/15 : 43,917,841 and 01/01/15 : 43,917,841)
Fully paid ordinary shares
Balance at 1 January 2015
Issue of shares for cash
Share issue costs
Balance at 31 December 2015
Issue of shares for cash
Share issue costs
Balance at 31 December 2016
31/12/16
31/12/15
01/01/15
€ 000's
€ 000's
€ 000's
16,250
3,809
20,059
13,485
29,932
43,417
16,250
3,809
20,059
13,485
29,932
43,417
16,250
3,809
20,059
13,485
29,932
43,417
11,812
11,812
11,812
1,673
13,485
1,673
13,485
1,673
13,485
Number of
shares
Share
Capital
Share
Premium
‘000's
472,507
€ 000's
€ 000's
11,812
29,932
-
-
-
-
-
-
472,507
11,812
29,932
-
-
-
-
-
-
472,507
11,812
29,932
Fully paid ordinary shares, which have a par value of €0.025, carry one vote and carry a right to dividends.
44
Deferred shares
Balance at 1 January 2015
Issue of shares for cash
Balance at 31 December 2015
Issue of shares for cash
Balance at 31 December 2016
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Number of
shares
Share
Capital
Share
Premium
‘000’s
3,809
-
3,809
-
3,809
€ 000's
€ 000's
1,673
-
1,673
-
1,673
-
-
-
-
-
The holders of the Deferred Shares shall not have the right to receive notice of any general meeting of the Company, or the
right to attend, speak or vote at any general meeting. The holders of the deferred shares shall not be entitled to any dividend
or other distribution. The Deferred Shares shall, on a return of assets in a winding up, entitle the holder only to the repayment
of the amounts paid up on such shares after repayment of the capital paid on the ordinary shares plus the payment of €12,697
per ordinary share. The Company may, at its option at any time purchase all or any of the Deferred Shares in issue, at a price not
exceeding €0.0127 for all the Deferred Shares so purchased.
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor and market confidence and to sustain future
developments of the business. there were no changes in the Group’s approach to capital management during the year. the
Group deems its shareholders’ funds to be its capital.
It is Group Policy to incentivise the Directors through the award of share options. At the year end, the Directors hold 1.05% of
ordinary shares, or 2.16% assuming that all outstanding share options vest and are exercised. The upper limit on the number of
share options that can be granted, including options granted under the existing scheme (see Note 21), is 10% of issued share
capital.
neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
45
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
19. Other reserves - Group and Company
Balance at 1 January 2015
Recognition of share based payments
Balance at 31 December 2015
Recognition of share based payments
Balance at 31 December 2016
20. retained Losses
Deficit at beginning of year
Profit/(Loss) for the year
Derecognition of subsidiary
Deficit at end of year
Share
Based
Payment
Reserve
Capital
Conversion
Reserve
Capital
Redemption
Reserve
Foreign
Currency
Translation
Reserve
€ 000's
€ 000's
€ 000's
€ 000's
837
-
837
-
837
29
-
29
-
29
7
-
7
-
7
1
-
1
-
1
Group
2016
€ 000's
(22,089)
(2,409)
-
Group
Company
Company
2015
2016
2015
€ 000's
(25,234)
2,071
1,074
€ 000's
€ 000's
(24,919)
(1,986)
-
(24,070)
(849)
-
(24,498)
(22,089)
(26,905)
(24,919)
In accordance with the provisions of the Companies Act 2014, the Company has not presented the Company Statement of
Comprehensive Income. The Company loss for the period of €1,986,000 (2015 - loss of €849,000) has been dealt with in the
Statement of Comprehensive Income of the Group.
46
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
21. Share-based payments
Employee share option plan
the Group has an ownership-based compensation scheme for executives and senior employees of the Group. In accordance
with the provisions of the plan, as approved by shareholders at a previous general meeting, executives and senior employees
may be granted options to purchase ordinary shares.
each share option converts into one ordinary share of ormonde Mining plc on exercise. no amounts are paid or payable by the
recipient on receipt of the option. the options carry neither rights to dividends nor voting rights. options may be exercised at any
time from the date of vesting to the date of their expiry.
the following reconciles the outstanding share options granted under the employee share option plan at the beginning and end
of the financial year:
Balance at beginning of the financial year
Expired during the financial year
extended during the year
Granted during the year
Forfeited during the financial year
Exercised during the financial year
Balance at the end of the financial year
Exercisable at the end f the financial year
During the year 2,700,000 options were forfeited.
option series 2
option series 5
option series 6
option series 7
31 December 2016
31 December 2015
Number
of options
Weighted
average
exercise
price
000's
12,250
(2,700)
-
5,950
-
-
15,500
15,500
€0.076
€0.11
-
€0.025
-
-
€0.049
€0.049
Number
of options
000's
12,250
Weighted
average
exercise
price
€0.076
-
-
-
-
-
-
-
-
-
-
12,250
12,250
€0.076
€0.076
Number of Share
Options Outstanding
000's
2,550
1,000
6,000
5,950
Exercise
Price
€0.034
€0.109
€0.068
€0.025
the options outstanding at 31 December 2016 had a remaining average contractual life of 5.6 years.
47
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Notes to the Financial Statements
22. related party transactions
The Details of subsidiary undertakings are shown in Note 14. Related Party Disclosures, transactions between Group entities that
have been eliminated on consolidation are not disclosed.
The Group hold a 30% shareholding in Barruecopardo Joint Venture B.V. In the year, an amount of €1,000,000 (2015: €527,070)
was invoiced to Barruecopardo Joint Venture B.V and paid in full.
Stephen Nicol is a director of Simprenta S.L. At 31 December 2015, Ormonde Mining plc owed €70,240 to Simprenta S.L. During
the year Simprenta S.L provided services and expenses to the value of €98,968 to the Ormonde Mining Group. At 31 December
2016 Simprenta S.L was owed €46,875 by the Ormonde Mining Group.
23. events after the reporting date
On 2nd June 2017, Ormonde announced that, following a period of review of the construction schedule for the Barruecopardo
Tungsten Project, the Board of the Project company, Saloro SLU, authorised the issuance of outstanding approvals on various
equipment and plant construction contracts, thus advancing the Project into an accelerated construction and implementation
phase, with an updated schedule allowing for mine commissioning in the third quarter of 2018.
As part of facilitating the advancement of the Project, Ormonde has agreed, subject to the latest development schedule being
implemented as planned, for the remaining component of the equity investment owed by Oaktree to the Project group, of circa
€16 million, to be drawn on a pro rata basis with the debt (rather than ahead of the debt draws) during the development period,
with any residual equity amounts being drawn on commissioning.
In addition, Ormonde announcement that Steve Nicol, its current Managing Director, would step down at its upcoming AGM to
focus fully on the implementation and initial operating stages of the Barruecopardo project.
24. Financial Instruments and Financial risk management
The Group and Company’s principal financial instruments comprise cash and cash equivalents. The main purpose of these
financial instruments is to provide finance for the Group and Company’s operations. The Group has various other financial assets
and liabilities such as receivables and trade payables, which arise directly from its operations.
It is, and has been throughout 2016 and 2015, the Group and Company’s policy that no trading in derivatives be undertaken.
The main risks arising from the Group and Company’s financial instruments are foreign currency risk, credit risk, liquidity risk, interest
rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations
arise. exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts where
appropriate. The exposure to exchange rate fluctuations is limited as the Company’s subsidiaries operate mainly within the Euro
Zone.
At the years ended 31 December 2016 and 31 December 2015, the Group had no outstanding forward exchange contracts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group and Company’s financial assets comprise receivables and cash and cash equivalents. The credit risk on cash and
cash equivalents is limited because the counterparties are banks with high credit-ratings assigned by international credit rating
agencies. The Group and Company’s exposure to credit risk arise from default of its counterparty, with a maximum exposure
equal to the carrying amount of cash and cash equivalents in its Consolidated Statement of Financial position.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having
similar characteristics. The Group defines counterparties as having similar characteristics if they are connected entities.
48
OrmOnde
Annual Report & Accounts 2016
For the Year Ended 31 December 2016
Liquidity risk management
Liquidity risk is the risk that the Group will not have sufficient funds to meet liabilities. 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 and Company’s short-, medium- and long-term funding and liquidity management requirements. The
Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows
and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity
requirements of the Group.
The Group and Company’s financial liabilities as at 31 December 2016 and 31 December 2015 were all payable on demand.
The expected maturity of the Group and Company’s financial assets (excluding prepayments) as at 31 December 2016 and 31
December 2015 was less than one month.
The Group expects to meet its other obligations from operating cash flows. The Group further mitigates liquidity risk by maintaining
an insurance programme to minimise exposure to insurable losses.
The Group had no derivative financial instruments as at 31 December 2016 and 31 December 2015.
Interest rate risk
the Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the Group and Company’s
holdings of cash and short term deposits.
It is the Group and Company’s policy as part of its disciplined management of the budgetary process to place surplus funds on
short term deposit in order to maximise interest earned.
Capital risk management
the Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance. the Group manages its capital structure and
makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may
adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the years ended
31 December 2016 and 31 December 2015. the capital structure of the Group consists of equity attributable to equity holders of
the parent, comprising issued capital, reserves and retained losses, as disclosed in the Consolidated Statement of Changes in
equity.
Fair values
The carrying amount of the Group and Company’s financial assets and financial liabilities is a reasonable approximation of the fair
value.
Hedging
At the year ended 31 December 2016 and 31 December 2015, the Group had no outstanding contracts designated as hedges.
25. Approval of Financial Statements
The financial statements were approved by the Board on 19 June 2017.
49
OrmOnde
Annual Report & Accounts 2016
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of ormonde Mining plc (the “Company”) will be held at the Crowne
Plaza Hotel, The Blanchardstown Centre, Blanchardstown, Dublin 15 on 18 September 2017 at 11am for the purpose of considering
and, if thought fit, passing the following resolutions of which Resolutions numbered 1 to 6 inclusive will be proposed as Ordinary
Resolutions and Resolutions 7 and 8 will be proposed as Special Resolutions.
Ordinary Business
1) To receive and consider the accounts for the year ended 31 December 2016, together with the reports of the Directors and
Auditors thereon (Resolution 1).
2) to re-elect Mr. John Carroll as a Director who is recommended by the Board for re-election as a Director and who retires in
accordance with the Articles of Association (Resolution 2).
3) To authorise the Directors to fix the remuneration of the auditors for the year ending 31 December 2016 (Resolution 3).
4) As an ordinary resolution (Resolution 4):
that the Directors be and are hereby generally and unconditionally authorised pursuant to Section 1021 of the Companies
Act 2014 (the “2014 Act”) to exercise all powers of the Company to allot relevant securities (as defined by Section 1021 of the
2014 Act) up to an amount equal to the authorised but as yet unissued share capital of the Company from time to time. the
authority hereby conferred shall expire at the close of business on the earlier of the date of the next annual general meeting of
the Company held after the date of the passing of this Resolution 4 and 18 December 2018 unless previously renewed, varied
or revoked by the Company in general meeting, provided however that the Company may make an offer or agreement before
the expiry of this authority which would or might require relevant securities to be allotted after this authority has expired and
the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby
had not expired. the authority hereby conferred shall be in substitution for any such existing authority.
5) As an ordinary resolution (Resolution 5):
That the issued, and authorised but unissued, share capital of the Company be amended by the subdivision and re-designation
of each issued and unissued ordinary Share of €0.025 into two (2) ordinary Shares of €0.005 each (the “ordinary Subdivided
Shares”) and three (3) “A” Deferred Shares of €0.005 each in the capital of the Company (the “A Deferred Subdivided Shares”).
6) As an ordinary resolution (Resolution 6):
That, subject to the passing of Resolution 5 in the notice convening this meeting, every two (2) Ordinary Subdivided Shares
be consolidated into one (1) ordinary Share of €0.01 each in the capital of the Company and every three (3) “A” Deferred
Subdivided Shares be consolidated into one (1) “A” Deferred Share of €0.015 each in the capital of the Company.
Special Business
7) As a special resolution (Resolution 7)
That, subject to the passing of Resolutions 5 and 6 in the notice convening this meeting,
(a) the memorandum of association of the Company be and is hereby altered by the deletion of the existing clause 5 and the
substitution therefor of the following new clause 5:
“The authorised share capital of the Company is €20,059,200 divided into 650,000,000 Ordinary Shares of €0.01 each,
100,000,000 Deferred Shares of €0.038092 each and 650,000,000 “A” Deferred Shares of €0.015 each.”
(b) the articles of association produced to the meeting (a copy of which has been initialled “A” for identification by the Chairman)
be adopted as the new articles of association of the Company in substitution for and to the exclusion of the existing articles
of association of the Company;
50
OrmOnde
Annual Report & Accounts 2016
8) As a special resolution (Resolution 8):
That, subject to the passing of Resolution 4 in the notice convening this meeting, the Directors be and are hereby empowered
pursuant to Section 1023 of the 2014 Act to allot equity securities (as defined by Section 1023 of the 2014 Act) for cash pursuant
to the authority conferred by Resolution 4 above as if Subsection (1) of Section 1022 of the 2014 Act did not apply to any such
allotment provided that this power shall be limited to the allotment of equity securities:
(a) in connection with the grant of any options or warrants by the Company or the exercise thereof; and
(b) (in addition to the authority conferred by paragraph (a) of this Resolution 8), up to an aggregate nominal value of ten per
cent of the issued share capital of the Company at the date of passing of this Resolution,
which power shall expire at the close of business on the earlier of the date of the next annual general meeting of the Company
held after the date of the passing of this Resolution 8 and 18 December 2018, save that the Company may before such expiry
make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors
may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
28 June 2017
By ORDER OF THE BOARD
John Carroll
Secretary
Registered Office:
6 northbrook Road
Dublin 6
Ireland
51
OrmOnde
Annual Report & Accounts 2016
Notice of Annual General Meeting
Notes
1. Any member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend, speak and vote on his/
her behalf. A proxy need not be a member of the Company.
2. The instrument of proxy, to be valid, must be received by the Company’s Registrars, Computershare Investor Services
(Ireland) Limited, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland not less than 48 hours before the
time appointed for the holding of the meeting.
3.
4.
In the case of a corporation this instrument may be either under the common seal or under the hand of an officer or attorney
authorised in that behalf.
In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other registered holders and for this purpose seniority shall be determined by the order in which
the name stands in the Register of Members in respect of the joint holding.
5.
If a proxy is executed under a Power of Attorney such Power of Attorney must be deposited at the Registrar’s office along with
the instrument of proxy.
6. Completing and returning a Form of proxy shall not preclude a member from attending and voting at the meeting should he
/she so wish.
52
OrmOnde
Annual Report & Accounts 2016
FORM OF PROXY
FOR USE AT THE ANNUAL GENERAL MEETING TO BE HELD AT 11AM ON 18 SEPTEMBER 2017 AT THE CROWNE PLAZA HOTEL,
THE BLANCHARDSTOWN CENTRE, BLANCHARDSTOWN, DUBLIN 15 AND AT ANy ADJOURMENT THEREOF
ORMONDE MINING PUBLIC LIMITED COMPANY (THE “COMPANY”)
For*
Against*
I/We..............................................................................................
1
2
3
4
5
6
7
8
to receive and consider the accounts for the
year ended 31 December 2016, together with the
reports of the Directors and Auditors thereon
to re-elect Mr. John Carroll as a Director who is
recommended by the Board for re-election as a
Director
To authorise the Directors to fix the remuneration
of the auditors for the year ended 31 December
2016
to authorise the Directors to allot relevant
securities
to authorise the sub-division of share capital of
the Company
to authorise the consolidation of share capital of
the Company
to approve the amendments to and adopt the
new Memorandum and Articles of Association of
the Company
to authorise the Directors to allot equity securities
for cash and to dis-apply Section 1022 (1) of the
Companies Act 2014
o f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
being (a) member(s) of the above Company HEREBY APPOINT:
__________________of__________________or failing him
__________________of__________________or failing him,
the Chairman of the meeting to be my / our proxy to vote for
me / us and on my / our behalf at the Annual General Meeting
of the Company convened for the 18 September 2017 at
11am, at the Crowne Plaza Hotel, The Blanchardstown Centre,
Blanchardstown, Dublin 15 and at any adjournment thereof.
I / We direct the proxy to vote for / against* the resolutions to be
proposed thereat by indicating with an “X” in the boxes below as
to how my / our vote for each resolution is to be cast.
*please indicate with an ‘x’ in the boxes below how you wish your
votes to be cast, i.e. for or against the resolution. If you do not do
so, the proxy will vote or abstain as he/she thinks fit
DATED THIS .......................................................................................................................... day of ................................................................................................ 2017
SIGNATURE ..............................................................................................................................................................................................................................................................
NAME IN FULL
(BloCK letteRS) ......................................................................................................................................................................................................................................................
Notes
1. Any member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend, speak and vote on his/her behalf.
A proxy need not be a member of the Company.
2. The instrument of proxy, to be valid, must be received by the Company’s Registrars, Computershare Investor Services (Ireland) Limited,
Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland not less than 48 hours before the time appointed for the
holding of the meeting.
3.
4.
In the case of a corporation this instrument may be either under the common seal or under the hand of an officer or attorney authorised
in that behalf.
In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion
of the votes of the other registered holders and for this purpose seniority shall be determined by the order in which the name stands in
the Register of Members in respect of the joint holding.
5. If a proxy is executed under a Power of Attorney such Power of Attorney must be deposited at the Registrar’s office along with the
instrument of proxy.
6. Completing and returning a Form of proxy shall not preclude a member from attending and voting at the meeting should he/she so wish.
53
FolD 2
The Company Registrar,
Ormonde Mining Plc,
Computershare Investor Services (Ireland) Ltd.,
Heron House, Corrig Road,
Sandyford Industrial Estate,
Dublin 18,
Ireland.
1
D
l
o
F
FolD 3
Directors and other information
Directors
Registered Office
Stephen nicol
(managing director)
Michael Donoghue
(non-executive Chairman)
John Carroll
(non-executive director)
Jonathan Henry
(non-executive director)
6 northbrook Road
Dublin 6
Ireland
Secretary
John Carroll
Group Auditors
Business Address
Bankers
Solicitors
lHM Casey McGrath limited
Chartered Certified Accountants
Statutory Audit Firm
6 northbrook Road
Dublin 6
Ireland
Bracetown Business park
Clonee
Co. Meath
Ireland
DI5 yN2p
Allied Irish Bank plc
Market Square
navan
Co. Meath
Ireland
la Caixa
Centro de empresas de Salamanca
C. Rector Lucena, 11 B
37002 Salamanca
Spain
Mason Hayes & Curran Solicitors
South Bank House
Barrow Street
Dublin 4
Ireland
Brokers
Registrars
Financial PR
OrmOnde
Annual Report & Accounts 2016
Argali Abogados
Paseo De La Castellana, 21
28046 Madrid
Spain
Dominic Dowling Solicitors
37 Castle Street
Dalkey
Co. Dublin
Ireland
NOMAD, ESM Adviser, Joint Broker
& Financial Advisor
Davy
Davy House
49 Dawson Street
Dublin 2
Ireland
uK Joint Broker
Sp Angel Corporate Finance llp
prince Frederick House
35 Maddox Street
london
W1S 2pp
uK
Computershare Investor Services
(Ireland) ltd
Heron House
Corrig Road
Sandyford Industrial estate
Dublin 18
Ireland
Capital M Consultants
1 Royal exchange Avenue
london
eC3V 3lt
uK
Registered Number
96863 Republic of Ireland
Date of Incorporation 13 September 1983
Website
www.ormondemining.com
ORMONDE MINING PLC
B17, Bracetown Business Park,
Clonee, Co. Meath, Ireland
phone: +353 (0)1 8014184
email: info@ormondemining.com
www.ormondemining.com