PEMBRIDGE RESOURCES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2017
Pembridge Resources Plc
Company No. 07352056
Contents
Strategic Report
Chairman’s and Chief Executive’s statement ...................................................................................... 2
Principal Risks and Uncertainties and Key Performance Indicators .................................................... 3
Corporate and Social Responsibility Report ................................................................................................ 4
Board of Directors and Senior Management……………………………… ………………………………………5
Directors’ Report ............................................................................................................................................. 7
Governance Report ....................................................................................................................................... 10
Directors’ Remuneration Report .................................................................................................................. 14
Directors’ Responsibilities ........................................................................................................................... 18
Independent Auditor’s Report to the members of Pembridge Resources Plc ......................................... 19
Financial Statements
Statement of comprehensive income ................................................................................................ 22
Statement of financial position .......................................................................................................... 23
Statement of changes in equity ......................................................................................................... 24
Cash flow statement.......................................................................................................................... 26
Notes to the Financial Statements .................................................................................................... 27
Company Information
Company information ........................................................................................................................ 40
1
Strategic Report
Chairman’s and Chief Executive’s statement
We are pleased to present the report and Financial Statements of Pembridge Resources Plc’s (“Pembridge” or “the
Company”) results for the year ended 31 December 2017.
Introduction
The past 12 months saw the old China Africa Resources plc convert from an AIM rule 8 cash shell into a main board
listed Special Purpose Acquisition Company (“SPAC”) seeking to invest in the base and precious metals sectors.
Given the macro outlook for mining and mining investment, the Directors believed an opportunity existed for the
Company to take advantage of cyclically low asset and project valuations, particularly in base and precious metals
which were offering, and still offer, significant opportunities to invest in orphaned projects where existing management
teams have been restricted of capital.
In order to help achieve the goals a strong team was assembled by the new CEO with experience in various board and
executive positions in the mining area spanning several decades, with a complementary mix of expertise in geology,
engineering, project appraisal, and commercial development.
Successful execution of this strategy would offer exposure to the next forecast ‘‘up cycle’’ and compete with other capital
pools including private equity.
Additionally, given the unique strategy being pursued by Pembridge it was felt that an LSE standard listing would be
more in line with our strategic objectives and ultimately more advantageous to the Company and our shareholders.
Our transition from AIM to a standard listing on the London Stock Exchange was delivered seamlessly and on time by
our legal advisors putting us in a position to fully exploit our stated aims to build a portfolio of compelling investments
with our uniquely qualified team.
We are also pleased to report that, post year end, we were able to announce our first transaction under this strategy,
signing a Sale and Purchase Agreement with Capstone Mining Corp. (“Capstone”) to acquire the Minto copper-gold-
silver mine (“Minto”).
Minto is located in the mining friendly Yukon territory in Canada and has a 10-year production history with all key
infrastructure, facilities and operating teams in place.
The asset was sourced from within our board, and historic relationships meant we could agree on the acquisition without
any tender process.
Minto fits perfectly with the Company’s stated goal to acquire a producing and profitable mining operation to which our
team can add further value. This acquisition will represent a core asset to Pembridge and will be used as a platform for
future growth.
As we move towards deal close and becoming a producing mining company, we have once again made an effort to
attract the right personnel to achieve all our targets going forward.
In January we welcomed Thomas Horton as Vice President Project Development. Thomas is a mining professional with
a range of work experience across Canada, Middle East, Europe and the UK. He joined Pembridge from Private Equity
firm Duke Street Capital, where he was involved in deal execution and origination, following the completion of his
Masters in Business Administration (MBA).
Within the past month, we announced the appointment of Paul Fenby as Chief Financial Officer. Paul has over 25 years'
experience in natural resources, most recently as Group CFO at Asia Resource Minerals Plc, a UK listed, Indonesia
focussed coal mining company, with responsibility for both the London and Jakarta listed entities.
Financials
During the year the Company made a loss of US$1.92 million (2016 – loss of US$3.8 million). The closing cash and
cash equivalents balance is US$2.027 million compared to US$1.163 million in 2016 due to proceeds from the placing
and subscription in August 2017.
2
Principal risks and Uncertainties
Nature of Risk
Funding Risk
The Company will need to secure additional funding to
complete its acquisition of the Minto mine and cover
working capital.
Impact
Shortage of cash for acquisition costs.
Regulatory Risk
The Company will not be able to reverse or acquire a
project into the Company before the deadline or raise
sufficient capital to become a SPAC.
Impact
The Company will cease to be traded on the Main Board
of the London Stock Exchange.
Human Resources Risk
The achievement of the Company’s objectives will be
dependent on the Company attracting and retaining
qualified and motivated staff.
Impact
The efficiency of a particular aspect of the Company’s
operations could be affected
to reduced
profitability.
Investment Risk
The investments the Company makes fail to be of any
value.
leading
Impact
The investments are written off.
Business Review & Development
How we manage it
The Company has the capability to raise funds required
to complete the transaction via its brokers, GMP
Securities, Arden Partners and SI Capital.
Pembridge is currently undertaking a process to raise
sufficient funds to complete the Minto mine acquisition.
in
This process is being facilitated by the assembled team
outlined
the Chairman’s and Chief Executive’s
Statement who have engaged with the necessary
advisors, including brokers to raise capital within the
required timeframe.
The Company has attracted and will retain a qualified
team by providing a competitive remuneration policy,
which includes financial performance incentives so as to
align the team with the shareholders of the Company.
Pembridge has a comprehensive investment policy and
strategy, as outlined in its Financial Prospects Policy
(“FPP”) procedures, that will assist in prudent measures
being made to identify and perform due diligence on the
investments that the Company makes.
A review of the business and its operations can be found in the Chairman’s and Chief Executive’s statement on page
2.
Key Performance indicators
KPI
Shareholder returns
Measure
Share price performance
Cash flows
Cash balances
Performance
The Company’s share price dropped
from 2.45p to 1.45p in a year that
was generally punishing for the
mining sector.
Cash balances increased from
US$1.163m to US$2.027m.
Francis McAllister
Non-Executive Director and Chairman of the Board
27 April 2018
3
Corporate and Social Responsibility Report (CSR)
Pembridge is committed to complying with all Health and Safety, environmental and social legislation and protecting the
health and general wellbeing of its employees. It is committed to preserving the environment.
Environment
Concern for the environment is of upmost importance to Pembridge. It is our policy to reduce to a minimum the potential
environmental impact of our activities and have a positive impact on the areas in which we operate.
Health, Safety and Security
The health, safety and security of the personnel and communities in which we operate takes priority in the management
of our operations. Our goal is to prevent injury and ill health to employees and contractors by providing a safe and
healthy working environment and by minimising risks associated with occupational hazards.
Business Ethics
Pembridge is committed to carrying out all its operations with high moral and legal standards. Pembridge has an anti-
corruption and anti-bribery policy which are in line with the requirements of the UK Bribery Act. Staff and contractors
are made aware of their obligations both on recruitment and by periodical updates.
The Strategic Report (comprising the Chairman’s and Chief Executive’s statement and principal risks and uncertainties)
on pages 2-3 was approved by the Board of Directors and was signed on its behalf by Francis McAllister, Chairman of
the Board.
Francis McAllister
Non-Executive Director and Chairman of the Board
27 April 2018
4
Board of Directors and Senior Management
Frank McAllister, Chairman
With over 50 years' industry experience, Frank McAllister has held various senior and Board positions in a number of
metals and mining companies. He worked with ASARCO Incorporated for 33 years during which he became Chief
Financial Officer in 1982 and then Executive Vice President of Copper Operations in 1993. Eventually became
ASARCO's President and Chief Operating Officer before becoming Chairman and Chief Executive Officer in 1999. In
1996 he became an Independent Director of Cliffs Natural Resources Inc and its Lead Director from 2004 to 2013.
During the same period, he was also Chairman, CEO and a Director at Stillwater Mining Co, and served as President
of the National Mining Association during 2012 and 2013. Frank holds an MBA from New York University, Bachelor of
Science in Finance from the University of Utah and attended the Advanced Management Program at Harvard Business
School.
David Linsley, Chief Executive Officer
David Charles Linsley is a former Executive Director of Behre Dolbear. Prior to his work with BD he was a co-founder
of Northern Zinc, a group formed to acquire a near production zinc asset in upstate New York. Mr Linsley founded Sirius
Investment Management LLP in 2005, a Gibraltar based multi strategy fund management group specialising in fund of
funds and hedge fund products. The most notable fund launched was the Sirius Resource Fund which invested in global
mining and resource transactions. Previously, in 1998, Mr Linsley was a co-founder and CEO of Cross Asset
Management Ltd, a UK- based hedge fund management Company which managed $500 million in assets across
multiple strategies including Event Driven Equity and Credit. As a multi-strategy Europe-focused arbitrage firm, Cross
was involved in mergers, corporate restructurings, IPOs and private placements across Europe. In 2005, Cross Asset
Management was sold to RAB Capital, a specialist asset manager focusing on natural resource and long/short equity
investments. Mr Linsley started his career at Lehman Brothers International in the prime brokerage and equity finance
group, where he was involved with numerous hedge fund structures as an early participant in the London based hedge
fund community. Mr Linsley has developed strong relationships with institutional funds internationally, including in
Europe and the US. In addition, Mr Linsley has been involved in numerous financings in the mining and natural resource
sectors around the world and has sat on the board of several mining companies.
Guy Le Bel, Non-Executive Director
Guy brings more than 30 years of international experience in strategic and financial mine planning to the Pembridge
team. He is currently CFO of Golden Queen Mining Ltd, and was previously Vice President Evaluations for Capstone
Mining Corp, Director of Golden Queen Mining, RedQuest Capital Corp and was VP, Business Development at Quadra
Mining Ltd. He also held business advisory, strategy and planning, business valuation, and financial planning
management roles at BHP Billiton Base Metals Ltd., Rio Algom Ltd. and Cambior Inc. He has extensive experience
across precious and base metals industries in the Americas. Guy holds an MBA Finance from École des Hautes Études
Commerciales, a Master Applied Sciences, Mining Engineering - University of British Columbia and a B.Sc. Mining
Engineering from Université Laval.
Gati Al-Jebouri, Non-Executive Director
Mr Al-Jebouri, who was born in Bulgaria in 1969, graduated from the University of Bristol with a Civil Engineering degree
in 1990 and from the Institute of Chartered Accountants as a chartered accountant in 1994. In 2001 he was appointed
Deputy Minister of Energy of Bulgaria and in 2002 Bulgaria's First Deputy Minister of Finance. His varied career has
included working for the accountancy firm KPMG in London and Bulgaria until being recruited to LUKOIL, where he
soon became Director of investment and Finance in the London office. In 2003 he became Chief Financial Officer of
LITASCO (LUKOIL International Trading and Supply Company), where he rose to Chief Executive Officer two years
later. In 2010 he became Executive Director for Finance and Marketing of LUKOIL Mid East Ltd and in 2017 was
promoted to Managing Director of the Company.
Peter Bojitos, President
Peter Bojtos is a professional Engineer with over 40 years of experience in the mining industry and a strong background
in corporate management; including all facets of the industry from exploration through the feasibility study stage to mine
construction, operations and decommissioning. He Graduated from the University of Leicester in 1972, following which
he worked at a number of open-pit iron-ore and underground base-metal and uranium mines in West Africa, the United
States and Canada. From 1990 to 1995 he was President & CEO of RFC Resource Finance Corp, President & CEO of
Consolidated Nevada Goldfields Corp and was Chairman & CEO of Greenstone Resources Ltd. He has also been an
independent Director of numerous Canadian, US, Australian, London or European listed mining and exploration
companies over the past 18 years. These include Birim Goldfields Inc., Desert Sun Mining Corp., Queenstake
Resources Ltd., European Uranium Inc., US Gold Corp., Vaaldiam Resources Ltd.
5
During the course of his career he has visited and evaluated properties in over 70 countries carrying out approximately
20 significant corporate acquisitions, mergers or sales that involved 24 operating mines; participating in the financing,
development, building or reopening of 19 mines and has had a hand in the operation of 24 producing mines.
Paul Fenby, Chief Financial Officer
Paul has over 25 years' experience in natural resources, most recently as Group CFO of UK listed Asia Resource
Minerals Plc between 2013 and 2015. There he was responsible for both the London and Jakarta listed entities of the
Indonesia focussed coal mining Company. Immediately prior to joining Pembridge he was the Interim CFO at Smiths
Detection, a division of Smiths Group Plc. After qualifying in 1990 as an accountant in public practice he joined
ExxonMobil where he held roles in finance, strategic planning, sales & marketing and external affairs. He then held
senior international finance roles at BG Plc and Petrofac Plc, and has lived and worked in Egypt, Kazakhstan, Malaysia
and Indonesia. Paul holds a degree from the University of Leicester, and is a Fellow of the Institute of Chartered
Accountants in England and Wales.
Adam Melnik, Vice President Corporate Development & Strategy
Adam has significant breadth of experience gained in the past 12 years within the natural resources industry, Before
joining Pembridge, Adam worked with Vedanta Resources Plc in Strategy and Corporate Development in the office of
its Founder and Chairman, Anil Agarwal. Adam has significant with experience in strategic planning, M&A, operations
management, organization building, outsourcing and partnerships. He has worked alongside Anil Agarwal and his two
strategic advisors, Cynthia Carroll (former CEO Anglo American Plc) and Kuldip Kaura (former CEO Vedanta
Resources Plc), and Vedanta's CEO, Tom Albanese (former CEO Rio Tinto Plc). Prior to his engagement at Vedanta
Resources, Adam was a Metals and Mining Research Analyst with Canaccord Genuity in Toronto and London focused
primarily on precious metals producers and developers. Adam holds an MBA in Finance from the Lazaridis School of
Business and Economics at Wilfrid Laurier University and a BASc in Geological Engineering from the University of
Waterloo.
Thomas Horton, Vice President Project Development
Thomas Horton is a mining professional with a range of work experience across Canada, Middle East, Europe and the
UK. He joins Pembridge from Private Equity firm Duke Street Capital, where he was involved in deal execution and
origination, following the completion of his MBA. Prior to this, Thomas was business development manager for
MineARC Systems, where he successfully expanded the business across Europe and Middle East. Before MineARC,
Thomas was at RFC Ambrian where he worked with a number of London and ASX listed mining and oil & gas clients
in a corporate broking and capital markets capacity. Prior to RFC Ambrian, Thomas was as a project engineer in the
Canadian mining industry working for AMEC and Fluor Corp, where he worked on Vale’s Long Harbour nickel
processing plant construction, Freeport McMoran’s El Abra SX EW plant expansion, and the feasibility studies for BHP’s
Jansen project and Agrium’s Vanscoy expansion project. Thomas holds a Masters in Business Administration (MBA)
from London Business School, and has a Master’s degree (MEng) in Mechanical Engineering from the University of
Manchester. Thomas is also Co-Chairman and Secretary for the Association of Mining Analysts.
6
Directors’ Report
The Directors present their report and the audited Financial Statements of the Company for the year ended 31
December 2017.
General information about the Company is provided in note 1 to the Financial Statements.
Principal activity
The principal activity of Pembridge is to operate as a base and precious metals focussed holding Company. The
Company name was changed from China Africa Resources Plc on 7 April 2017.
Business review and future development
A review of the business and future developments of the Company is included within the Chairman’s and Chief
Executive’s statement on pages 2 and 3, which form part of the Strategic Report. The Board has announced that it has
commenced a fundraising roadshow with the intention of raising funds from new and existing shareholders to enable
the purchase of the Minto mine from Capstone. The proposed acquisition constitutes a reverse takeover for the
purposes of the Listing Rules of the FCA.
Results and dividends
During the year the Company made a loss of US$1.9 million (2016 – loss of US$3.8 million). The loss incurred during
the year consists of costs of running the head office in London, associated listing and regulatory requirements, legal
and professional costs in connection with the move from AIM onto the Standard Segment, together with investment
acquisition related costs. No dividends were paid during the year and the Directors do not recommend payment of a
final dividend (2016: $nil).
Going concern
The Company’s ability to continue to adopt the going concern basis of preparation will depend upon a number of matters
including future successful capital raisings for necessary funding or loans from third parties.
The Company has sufficient funds to meet its working capital needs over the going concern period, however a significant
fundraise will be required in order to complete the acquisition of the Minto mine and associated working capital
requirements. Completion of the acquisition at the date of these Financial Statements is, in addition to raising the
necessary funds, subject to shareholder and regulatory approvals. In the event that the Company is unable to secure
finance either through third parties or capital raising, it may not be able to complete the acquisition. Excluding the impact
of completing the acquisition in the future, the Company has sufficient funds in order to meet its contracted and
committed liabilities for at least 12 months from the date of approval of the Financial Statements. If the proposed
fundraise and acquisition are delayed, the Company will introduce cost reductions or undertake a small fundraise to
meet working capital commitments.
Post reporting date events
Since the end of the year the Company has entered into a definitive Sale and Purchase agreement with Capstone to
acquire the Minto copper mine in the Yukon territory, Canada.
Directors
The Directors who served during the year ended 31 December 2017 and up to the date of signing the Financial
Statements were as follows:
Chairman and Director (appointed 18 August 2017)
Chief Executive Officer and Director (appointed 17 February 2017)
Francis McAllister
David Charles Linsley
Guy Le Bel Non-Executive Director (appointed 18 August 2017)
Gati Al-Jebouri
Roderick Webster
John Bryant
Paul Johnson
Nicholas John O’Reilly
Non-Executive Director (appointed 27 September 2017)
(resigned 27 September 2017)
(resigned 27 September 2017)
(resigned 17 February 2017)
(resigned 17 February 2017)
7
Substantial shareholders
As at 31 December 2017, the total number of issued ordinary shares with voting rights in the Company was 223,849,257.
Details of the Company’s capital structure and voting rights are set out in Note 18 to the Financial Statements.
The Company has been notified of the following interests of 3 per cent or more in its issued share capital as at 31 December
2017.
Party Name
Mark Lancaster
East China Exploration
Gati Al-Jebouri
Hargreaves Lansdown Asset Management
Darren Hazelwood
Directors’ shareholding
Grant Stevens
Capital structure
Number of Ordinary
Shares
% of Share
Capital
18,813,656
15,000,000
12,500,000
11,384,168
9,670,288
9,506,917
7,032,163
8.4
6.7
5.6
5.1
4.3
4.2
3.1
The Company’s capital consists of ordinary shares which rank pari passu in all respects which are traded on the Standard
segment of the Main Market of the London Stock Exchange. There are no restrictions on the transfer of securities in the
Company or restrictions on voting rights and none of the Company’s shares are owned or controlled by employee share
schemes. There are no arrangements in place between shareholders that are known to the Company that may restrict
voting rights, restrict the transfer of securities, result in the appointment or replacement of Directors, amend the Company’s
articles of association or restrict the powers of the Company’s Directors, including in relation to the issuing or buying back
by the Company of its shares or any significant agreements to which the Company is a party that take effect after or
terminate upon, a change of control of the Company following a takeover bid or arrangements between the Company and
its Directors or employees providing for compensation for loss of office or employment (whether through resignation,
purported redundancy or otherwise) that may occur because of a takeover bid.
Directors’ indemnities
Pembridge maintained liability insurance for its Directors and officers during the period and also as at the date of the
Directors’ Report.
Financial instruments
The financial risk management policies and objectives are set out in detail in Notes 20 and 22 of the Financial Statements.
Information on exposure to risks
Principal risks and uncertainties are discussed in the Strategic Report on page 3, while liquidity risks are covered in Note
20.
Greenhouse gas emissions
The Company has as yet minimal greenhouse gas emissions to report from the operations of the Company and does not
have responsibility for any other emission producing sources under the Companies Act 2006 (Strategic Report and
Directors report) Regulations 2014.
Corporate Governance
The Governance Report is disclosed on pages 10 to 13.
Statement as to disclosure of information to auditor
The Directors who were in office on the date of approval of these Financial Statements have confirmed, as far as they are
aware, that there is no relevant audit information of which the auditors are unaware. Each of the Directors have confirmed
that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that it has been communicated to the auditor.
8
Auditor
The auditors, PKF Littlejohn LLP, have expressed their willingness to continue in office and a resolution that they be re-
appointed will be proposed at the annual general meeting.
By order of the Board
David Linsley
Director and Chief Executive Officer
27 April 2018
9
Governance Report
Introduction
Pembridge Resources Plc recognises the importance of, and is committed to, high standards of Corporate Governance.
At the date of this Report, and whilst the Company is not formally required to comply with the UK Corporate Governance
Code, the Company will try to observe, where practical, the requirements of the UK Corporate Governance Code. The UK
Corporate Governance Code can be found at frc.org.uk/our-work/publications/Corporate-Governance.
The Company will comply with QCA Code, as published by the Quoted Companies Alliance, to the extent they consider
appropriate in light of the Company’s size, stage of development and resources.
The Company is currently a small company with a modest resource base. The Company has a clear mandate to optimise
the allocation of limited resources to support its development plans. As such, the Company strives to maintain a balance
between conservation of limited resources and maintaining robust corporate governance practices. As the Company
evolves, the Board is committed to enhancing the Company’s corporate governance policies and practices deemed
appropriate for the size and maturity of the organisation.
Set out below are the Company’s corporate governance practices for the year ended 31 December 2017.
Leadership
The Company is headed by an effective Board which is collectively responsible for the long-term success of the Company.
The role of the Board - The Board sets the Company’s strategy, ensuring that the necessary resources are in place to
achieve the agreed strategic priorities, and reviews management and financial performance. It is accountable to
shareholders for the creation and delivery of strong, sustainable financial performance and long-term shareholder value.
To achieve this, the Board directs and monitors the Company’s affairs within a framework of controls which enable risk to
be assessed and managed effectively. The Board also has responsibility for setting the Company’s core values and
standards of business conduct and for ensuring that these, together with the Company’s obligations to its stakeholders,
are widely understood throughout the Company.
Board Meetings - The core activities of the Board are carried out in scheduled meetings of the Board. These meetings are
timed to link to key events in the Company’s corporate calendar and regular reviews of the business are conducted.
Additional meetings and conference calls are arranged to consider matters which require decisions outside the scheduled
meetings. During the year, the Board met on 13 occasions.
Outside the scheduled meetings of the Board, the Directors maintain frequent contact with each other to discuss any issues
of concern they may have relating to the Company or their areas of responsibility, and to keep them fully briefed on the
Company’s operations.
Matters reserved specifically for Board - The Board has a formal schedule of matters reserved that can only be decided by
the Board. The key matters reserved are the consideration and approval of;
The Company’s overall strategy;
Financial Statements and dividend policy;
-
-
- Management structure including succession planning, appointments and remuneration; material acquisitions and
disposal, material contracts, major capital expenditure projects and budgets;
- Capital structure, debt and equity financing and other matters;
- Risk management and internal controls;
-
- Corporate policies.
The Company’s corporate governance and compliance arrangements; and
Summary of the Board’s work in the year – During the year, the Board considered all relevant matters within its remit, but
focused in particular on the establishment of the Company and the identification of a suitable investment opportunity for
the Company to pursue. Certain other matters are delegated to the Board Committees, namely the Audit and Remuneration
Committees.
10
Governance Report (continued)
Attendance at meetings:
Member
Francis McAllister
David Charles
Linsley
Guy Le Bel
Gati Al-Jebouri
Roderick Webster
John Bryant
Paul Johnson
Nicholas John
O’Reilly
Chairman and Director (appointed 18 August 2017)
Chief Executive Officer and Director (appointed 17
February 2017)
Non-Executive Director (appointed 18 August 2017)
Non-Executive Director (appointed 27 September
2017)
Chairman (resigned 27 September 2017)
Non-Executive Director (resigned 27 September
2017)
Chief Executive Officer (resigned 27 September
2017)
Non-Executive Director (resigned 27 September
2017)
Meetings
attended
3
7
3
2
12
13
9
9
All Directors attended 100% of Board meetings they were entitled to attend during the period. The Board is pleased with
the high level of attendance and participation of Directors at Board and committee meetings.
The Chairman, Francis McAllister, sets the Board Agenda and ensures adequate time for discussion.
Non-executive Directors - The non-executive Directors bring a broad range of business and commercial experience to
the Company and have a particular responsibility to challenge independently and constructively the performance of the
Executive management (where appointed) and to monitor the performance of the management team in the delivery of the
agreed objectives and targets.
Non-executive Directors are initially appointed for a term of three years, which may, subject to satisfactory performance
and re-election by shareholders, be extended by mutual agreement.
Other governance matters - All of the Directors are aware that independent professional advice is available to each Director
in order to properly discharge their duties as a Director. In addition, each Director and Board Committee has access to the
advice of the Company Secretary.
The Company Secretary - The Company Secretary role is carried out by London Registrars Ltd.
Effectiveness
For the period under review the Board comprised of a Chief Executive Officer, a non-executive Chairman and two
independent non-executive Directors. Biographical details of the Board members are set out on pages 5 and 6 of this
report.
The Directors are of the view that the Board and its committees consist of Directors with an appropriate balance of skills,
experience, independence and diverse backgrounds to enable them to discharge their duties and responsibilities
effectively.
Independence - The Board considers each of the non-executive Directors to be independent in character and judgement.
Appointments – the Board is responsible for reviewing and the structure, size and composition of the Board and making
recommendations to the board with regards to any required changes.
11
Governance Report (continued)
Commitments – All Directors have disclosed any significant commitments to the Board and confirmed that they have
sufficient time to discharge their duties.
Induction - All new Directors received an induction as soon as practical on joining the Board.
Conflicts of interest - A Director has a duty to avoid a situation in which he or she has, or can have, a direct or indirect
interest that conflicts, or possibly may conflict with the interests of the Company. The Board had satisfied itself that there
is no compromise to the independence of those Directors who have appointments on the Boards of, or relationships with,
companies outside the Company. The Board requires Directors to declare all appointments and other situations which
could result in a possible conflict of interest.
Board performance and evaluation – The company has a policy of appraising Board performance annually. Having
reviewed various approaches to Board appraisal, the Company has concluded that for a Company of its current scale,
an internal process of regular face to face meetings is most appropriate, in which all Board members discuss any issues
as and when they arise in relation to the Board or any individual member’s performance.
Although the Board consists of only male Directors, the Board supports diversity in the Boardroom and the Financial
Reporting Council’s aims to encourage such diversity. The following table sets out a breakdown by gender at 31
December 2017:
Directors
Senior Managers
Other employees
Accountability
Male
4
4
-
Female
-
3
The Board is committed to providing shareholders with a clear assessment of the Company’s position and prospects.
This is achieved through this report and as required other periodic financial and trading statements.
Going concern - The Company’s business activities, together with factors likely to affect its future operations, financial
position, and liquidity position are set out in the Directors’ Report and the Principle risks and Uncertainties sections of
the Strategic Report. In addition, the notes to Financial Statements discloses the Company’s financial risk management
practices with respect to its capital structure, liquidity risk, foreign exchange risk, and other related matters.
The Directors, having made due and careful enquiry, are of the opinion that the Company has adequate working capital
to execute its operations and has the ability to access additional financing, if required, over the next 12 months. The
Directors, therefore, have made an informed judgement, at the time of approving Financial Statements, that there is a
reasonable expectation that the Company has adequate resources to continue in operational existence for the
foreseeable future. As a result, the Directors have continued to adopt the going concern basis of accounting in preparing
the annual Financial Statements.
Internal controls - The Board of Directors reviews the effectiveness of the Company’s system of internal controls in line
with the requirement of the Code. The internal control system is designed to manage the risk of failure to achieve its
business objectives. This covers internal financial and operational controls, compliances and risk management. The
Company has necessary procedures in place for the year under review and up to the date of approval of the Annual
Report and Financial Statements. The Directors acknowledge their responsibility for the Company’s system of internal
controls and for reviewing its effectiveness. The Board confirms the need for an ongoing process for identification,
evaluation and management of significant risks faced by the Company. The Directors carry out a risk assessment before
signing up to any commitments.
12
Governance Report (continued)
The Audit Committee regularly reviews and reports to the Board on the effectiveness of the system of internal control.
Given the size of the Company and the relative simplicity of the systems, the Board considers that there is no current
requirement for an internal audit function. The procedures that have been established to provide internal financial control
are considered appropriate for a Company of its size and include controls over expenditure, regular reconciliations and
management accounts.
The Directors are responsible for taking such steps as are reasonably available to them to safeguard the assets of the
Company and to prevent and detect fraud and other irregularities.
Remuneration
Currently due to the size of the Company there is no Remuneration Committee. This will be established following an
acquisition. Remuneration paid to Directors in the period under review is disclosed in the Directors’ Remuneration Report.
Nomination
Currently due to the size of the Company there is no Nomination Committee. This will be established following an
acquisition.
Shareholder relations
Communication and dialogue – Open and transparent communication with shareholders is given high priority and there is
regular dialogue with institutional investors, as well as general presentations made at the time of the release of the annual
and interim results. All Directors are kept aware of changes in major shareholders in the Company and are available to
meet with shareholders who have specific interests or concerns. The Company issues its results promptly to individual
shareholders and also publishes them on the Company’s website: www.pembridgeresources.com. Regular updates to
record news in relation to the Company are included on the Company’s website. Shareholders and other interested parties
can subscribe to receive these news updates by email by registering online on the website free of charge.
The Directors are available to meet with institutional shareholders to discuss any issues and gain an understanding of the
Company’s business, its strategies and governance. Meetings are also held with the corporate governance representatives
of institutional investors when requested.
Annual General Meeting - At every AGM individual shareholders are given the opportunity to put questions to the Chairman
and to other members of the Board that may be present. Notice of the AGM is sent to shareholders at least 21 working
days before the meeting. Details of proxy votes for and against each resolution, together with the votes withheld are
announced to the London Stock Exchange and are published on the Company’s website as soon as practical after the
meeting.
Francis McAllister
Chairman and Non-Executive Director
27 April 2018
13
Directors’ Remuneration Report
Until an acquisition is made the Company will not have a separate remuneration committee. The Board as a whole will
instead review the scale and structure of the Directors’ fees, taking into account the interests of shareholders and the
performance of the Company and Directors. Following the completion of an acquisition, the Board intends to put in place
a remuneration committee.
The items included in this report are unaudited unless otherwise stated.
Statement of Pembridge Resources Plc’s policy on Directors’ remuneration
The Company’s policy is to maintain levels of remuneration so as to attract, motivate, and retain Directors and Senior
Executives of the highest calibre who can contribute their experience to deliver industry leading performance with the
Company’s operations. Currently Director’s remuneration is not subject to specific performance targets.
In future periods the Company intends to implement a remuneration policy so that a meaningful proportion of Executive
and Senior Management’s remuneration is structured so as to link rewards to corporate and individual performance, align
their interests with those of shareholders and to incentivise them to perform at the highest levels. No Director takes part in
any decision directly affecting their own remuneration.
Directors’ remuneration
The Directors who held office at 31 December 2017 and who had beneficial interests in the ordinary shares of the Company
are summarised as follows:
Name of Director
Position
No. of shares held
Francis McAllister
David Linsley
Guy Le Bel
Gati Al-Jebouri
Chairman, Non-Executive Director
Chief Executive Officer
Non-Executive Director
Non-Executive Director
4,687,500
3,125,000
468,750
12,500,000
Each of the Directors entered into service agreements at the time of the Company’s admission to the main market in August
2017. Details of Directors’ emoluments and of payments made for professional services rendered are set out below.
Remuneration components
For the year ended 31 December 2017 salaries and fees, bonuses and share based payments were the sole components
of remuneration. The Board will consider the components of Directors’ remuneration during the year and following this
review these are likely to consist of:
•
•
•
•
•
Salaries and fees
Annual bonus
Taxable benefits
Pensions
Share Incentive arrangements
14
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the year ended 31 December 2017:
2017
Share
based
Bonus payments
US$'000
US$’000
Total
US$'000
Fees
US$'000
Roderick Webster*
Paul Johnson**
John Bryant*
Nicholas O’Reilly**
Francis McAllister
David Charles Linsley
Gati Al-Jebouri
Guy Le Bel
22
-
11
-
-
75
-
-
-
-
-
-
-
160
-
-
-
-
-
-
-
64
-
-
22
-
11
-
-
299
-
-
Total
108
160
64
332
*resigned 27 September 2017
**resigned 17 February 2017
2016
Roderick Webster
Francis Lewis
James Richards
Paul Johnson
John Bryant
Nicholas O’Reilly
Total
Share
based
payments
US$'000
Fees
US$'000
Total
US$'000
-
21
21
-
-
-
42
15
8
-
15
15
15
68
15
29
21
15
15
15
110
15
Directors beneficial share interests (audited)
The interests of the Directors who served during the year in the share capital of the Company at 31 December
2017 and at the date of this report or their resignation (if earlier) were as follows:
Name of Director
Francis McAllister
David Linsley
Guy Le Bel
Gati Al-Jebouri
Number of
ordinary shares
held at 31
December 2017
4,687,500
3,125,000
468,750
As at the date
of this report
4,687,500
Number of
options /
warrants
6,037,500
3,125,000
10,325,000
468,750
1,818,750
Number of share
options / warrants
vested but
unexercised
4,687,500
3,125,000
468,750
12,500,000
12,500,000
13,850,000
12,500,000
Roderick Webster*
552,995
552,995
1,500,000
Paul Johnson**
John Bryant*
Nicholas O'Reilly**
2,857,143
2,857,143
3,804,147
552,995
187,500
552,995
187,500
1,500,000
1,687,500
1,500,000
3,804,147
1,500,000
1,687,500
*resigned 27 September 2017
**resigned 17 February 2017
Total pension entitlements (audited)
The Company does currently not have any pension plans for any of the Directors and does not pay pension amounts in
relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors or past Directors.
Payments to past Directors (audited)
The Company has not paid any compensation to past Directors.
Payments for loss of office (audited)
No payments were made for loss of office during the year.
Consideration of shareholder views
The Board considers shareholder feedback received and guidance from shareholder bodies. This feedback, plus any
additional feedback received from time to time, is considered as part of the Company’s annual policy on remuneration.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s experience
and their current base salary. Where an individual is recruited at below market norms, they may be re-aligned over time
(e.g. two to three years), subject to performance in the role. Benefits will generally be in accordance with the approved
policy.
For external and internal appointments, the Board may agree that the Company will meet certain relocation and/or
incidental expenses as appropriate.
16
Policy on payment for loss of office
Payment for loss of office would be determined by the remuneration committee once appointed, taking into account
contractual obligations.
Other matters
The Company does not currently have any annual or long-term incentive schemes in place for any of the Directors and as
such there are no disclosures in this respect.
Unaudited information
Performance graph
The following graph compares the total shareholder return of an ordinary share in the Company against the total
shareholder return of the FTSE All-share index, and specifically the mining industry, which is considered the most
appropriate comparable industry for the Company given it is a mining focussed holding Company. The Company was listed
in August 2017 and therefore no historical share price data exists prior to this period.
Approved on behalf of the Board
Francis McAllister
Chairman and Non-Executive Director
27 April 2018
17
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors
have elected to prepare the Company Financial Statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under Company law the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss
of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
•
•
state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material
departures disclosed and explained in the Financial Statements; and
prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the requirements of the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Website publication
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the Financial
Statements may differ from legislation in other jurisdictions.
18
Independent Auditor’s Report to the Members of Pembridge Resources Plc
Opinion
We have audited the Financial Statements of the Company for the year ended 31 December 2017 which comprise the
Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Cash
Flow Statement and notes to the Financial Statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone, other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
In our opinion, the Financial Statements:
•
•
•
give a true and fair view of the state of the Company’s affairs as at 31 December 2017 and of its loss for the year
then ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the ethical requirements that
are relevant to our audit of the Financial Statements in the UK, including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you
where:
•
•
the Directors’ use of the going concern basis of accounting in the preparation of the Financial Statements is not
appropriate; or
the Directors have not disclosed in the Financial Statements any identified material uncertainties that may cast
significant doubt about the Company’s ability to continue to adopt the going concern basis of accounting for a
period of at least twelve months from the date when the Financial Statements are authorised for issue.
Our application of materiality
The materiality applied to the Financial Statements was US$70,000, based on thresholds for net assets and the loss before
tax. The performance materiality was US$49,000.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the Financial
Statements. In particular, we looked at areas involving significant accounting estimates and judgement by the Directors
and considered future events that are inherently uncertain. We also addressed the risk of management override of internal
controls, including among other matters consideration of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
Financial Statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of the engagement team.
We have determined that there are no key audit matters to communicate in our report.
19
Other information
The other information comprises the information included in the Annual Report, other than the Financial Statements and
our auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the Financial
Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. In connection with our audit of the Financial Statements, our
responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the Financial Statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ report for the financial year for which the Financial
Statements are prepared is consistent with the Financial Statements; and
the Strategic Report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the Strategic Report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
the Financial Statements and the part of the Directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the
Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether
due to fraud or error.
In preparing the Financial Statements, the Directors are responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these Financial Statements.
A further description of our responsibilities for the audit of the Financial Statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
20
Other matters which we are required to address
We were appointed by the Board of Directors on 10 February 2017 to audit the Financial Statements for the year ended
31 December 2016. Our total uninterrupted period of engagement is two years, covering the years ended 31 December
2016 to 31 December 2017.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain
independent of the Company in conducting our audit.
As part of our audit procedures, we gained an understanding of the legal and regulatory framework applicable to the
Company and considered the risk of acts by the Company which were contrary to applicable laws and regulations, including
fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations or through collusion. Our tests included making
enquiries of management, as well as inspecting underlying supporting documentation and calculations.
As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether
there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud. Procedures
designed and executed to address these risks included the review and testing of journal entries during the period, testing
and evaluating management’s key accounting estimates for reasonableness and consistency, review of transactions
through the bank statements, and undertaking cut-off procedures to verify proper cut-off of expenses.
Our audit opinion is consistent with the additional report to the Board.
David Thompson
(Senior statutory auditor)
For and on behalf of PKF Littlejohn LLP
Statutory auditor
27 April 2018
1 Westferry Circus
Canary Wharf
London E14 4HD
21
Statement of comprehensive income
For the year ended 31 December 2017
Note
13
14
6
7
Administrative, legal and professional expenses
Impairment of investment in and amounts due
from subsidiary undertaking
Loss on disposal of investments
Other income
Operating loss
Finance income
Finance cost
Year
ended
31 December
2017
US$'000
Year
ended
31 December
2016
US$'000
(1,768)
-
(157)
-
(744)
(3,263)
-
192
(1,925)
(3,815)
-
-
-
-
Loss before income tax
(1,925)
(3,815)
Income tax
10
-
-
Loss for the year attributable to the equity
holders of the Company
Other comprehensive income
Total comprehensive income for the year
Earnings per share expressed in US cents
(1,925)
(3,815)
-
(1,925)
-
(3,815)
Year
ended
31 December
2017
Year
ended
31 December
2016
Basic and diluted loss per share attributable to
the equity holders of the Company
11
(1.4c)
(14.9c)
All amounts relate to continuing activities.
The notes on pages 27 to 39 form part of these Financial Statements.
22
Statement of financial position
As at 31 December 2017
Company number: 07352056
Assets
Non-current assets
Property, plant and equipment
Investment in subsidiary
Available-for-sale financial assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger relief reserve
Other reserve
Retained deficit
Note
31 December
2017
US$'000
31 December
2016
US$'000
12
13
14
15
16
17
18
18
2
-
-
2
354
2,027
2,381
2,383
(213)
(213)
3
-
-
3
38
1,163
1,201
1,204
(184)
(184)
2,170
1,020
1,306
2,902
-
165
(2,203)
1,048
138
-
112
(278)
Equity attributable to shareholders of the
Company
2,170
1,020
The Financial Statements were approved and authorised for issue by the Board on 27 April 2018 and signed on behalf of
the Board by:
David Linsley
Director and Chief Executive Officer
Francis McAllister
Non-Executive Director and Chairman
The notes on pages 27 to 39 form part of these Financial Statements.
23
Statement of changes in equity
For the year ended 31 December 2017
Share
capital
Share
premium
US$'000
US$'000
Merger
relief
reserve
US$'000
Other
reserve
Retained
deficit
Total
US$'000
US$'000
US$'000
(6,556)
-
-
6,556
-
Balance at 1 January 2016
377
6,556
4,052
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Cancellation of share premium via Court Order
Proceeds from shares issued
Direct cost of shares issued
Value of placing warrants
Value of share options
Share based payments
Realisation of merger reserve on distribution of
subsidiary undertaking
Distribution of subsidiary via dividend in specie
-
-
-
-
586
-
-
-
85
-
-
-
-
-
-
-
-
216
(80)
(97)
-
99
-
-
457
-
-
-
-
(4,509)
-
Total transactions with owners recognised
directly in equity
671
(6,418)
(4,052)
Balance at 31 December 2016
1,048
138
Balance at 1 January 2017
1,048
138
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
-
-
-
-
-
-
Proceeds from shares issued
182
2,772
Direct cost of shares issued
Share based payments
Value of placing warrants
Value of share options
-
76
-
-
(153)
151
(6)
-
Total transactions with owners recognised
directly in equity
258
2,764
Balance at 31 December 2017
1,306
2,902
-
-
-
-
-
-
-
-
-
-
-
-
24
-
-
-
(7,024)
3,961
(3,815)
(3,815)
-
-
-
(3,815)
(3,815)
-
-
97
15
-
-
-
-
-
-
-
-
1,259
(80)
-
15
184
4,509
-
(504)
(504)
112
112
10,561
874
(278)
1,020
112
(278)
1,020
-
-
-
-
-
-
6
47
53
(1,925)
(1,925)
-
-
(1,925)
(1,925)
-
-
-
-
-
-
2,954
(153)
227
-
47
3,075
165
(2,203)
2,170
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve
Share capital
Share premium
Merger relief reserve
Other reserve
Retained deficit
Description and purpose
Nominal value of shares issued.
Amount subscribed for share capital in excess of nominal value, less share issue costs.
Reserve created on issue of shares on acquisition of its subsidiary in accordance with
Companies Act 2006 provisions.
Cumulative fair value of warrants and share options granted.
Cumulative net gains and losses recognised in the statement of comprehensive income.
The notes on pages 27 to 39 form part of these Financial Statements.
25
Notes
Year
ended
31 December
2017
US$'000
Year
ended
31 December
2016
US$'000
(1,925)
(3,815)
1
47
-
-
157
(1,720)
(316)
29
(2,007)
-
(199)
269
70
-
2,954
(153)
2,801
864
1,163
2,027
-
15
184
3,063
-
(553)
(21)
116
(458)
(3)
-
-
(3)
(200)
1,259
(80)
979
518
645
1,163
Cash flow statement
For the year ended 31 December 2017
Cash flows from operating activities
Loss for the year
Adjusted for:
Depreciation
Share option charge
Share based payments
Impairment of investment in subsidiary
Loss on disposal of investments
Movements in working capital
Increase in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
15
17
Cash flows from investing activities
Purchase of property, plant and equipment
Purchases of available-for-sale financial assets
Proceeds from sale of available-for-sale financial
assets
Net cash generated from investing activities
Cash flows from financing activities
Repayment of borrowings
Proceeds from issuance of shares
Direct cost of share issue
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
16
The notes on pages 27 to 39 form part of these Financial Statements.
26
Notes to the Financial Statements
For the year ended 31 December 2017
1. NATURE OF OPERATIONS AND GENERAL INFORMATION
The principal activity of the Company is to operate as a mining focussed holding Company.
Pembridge Resources Plc is incorporated and domiciled in England. The address of the Company's registered office is
Suite A, 6 Honduras Street, London EC1Y 0TH. Pembridge Resources Plc's shares are listed on the Standard Segment
of the Official List of the London Stock Exchange.
The Company’s Financial Statements are presented in United States dollars (US$), which is also the functional currency
of the Company, and rounded to the nearest thousand.
These Financial Statements were approved for issue by the Board of Directors on 27 April 2018.
2. STANDARDS AND INTERPRETATIONS NOT YET APPLIED BY THE COMPANY
2.1 New and amended standards adopted by the Company
There were no IFRSs or IFRIC interpretations relevant to the Company that were effective for the first time for the financial
year beginning 1 January 2017 that had a material impact on the Company.
2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not been
adopted early by the Company
At the date of authorisation of these Financial Statements, certain new standards, amendments and interpretations to
existing standards have been published but are not yet effective, and have not been adopted early by the Company.
Management anticipates that all of the pronouncements will be adopted in the Company’s accounting policy for the first
period beginning after the effective date of the pronouncement. The new standards and interpretations are not expected
to have a material impact on the Company’s Financial Statements.
•
•
•
•
•
IFRS 2 – Amendments to classification and measurement of Share Based Payments (effective 1 January 2018)
IFRS 9 – Financial Instruments (effective 1 January 2018)
IFRS 15 – Revenue from Contracts with Customers (effective 1 January 2018)
IFRS 15 – Revenue from Contracts with Customers (Clarifications) (effective 1 January 2018)
IFRS 16 – Leases (effective 1 January 2019)
• Annual Improvements – Annual Improvements to IFRSs 2014 – 2016 Cycle (effective 1 January 2018)
•
•
IFRIC 22 – Foreign Currency Transactions and Advance Consideration (effective 1 January 2018)
IFRIC 23 – Uncertainty over Income Tax Treatments (1 January 2019*)
• Annual Improvements – Annual Improvements to IFRSs 2015 – 2017 Cycle (1 January 2019*)
*Subject to EU endorsement
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs)
and IFRIC interpretations (IFRS IC) as adopted by the European Union, and with the Companies Act 2006 applicable to
companies reporting under IFRS. The Financial Statements have been prepared under the historical cost convention.
The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The
areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to
the Financial Statements are disclosed in Note 4.
27
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Going concern
The Company meets its working capital and investment requirements from its cash and cash equivalents. The Company
raises finance for its activities in discrete tranches. The Company did not generate revenues from operations during 2017.
As such, the Company’s ability to continue to adopt the going concern assumptions will depend upon a number of matters
including future successful capital raisings for necessary funding or loans from third parties.
Proceeds from the issue of shares during the year amounted to $2.954m and cash and cash equivalents at 31 December
2017 amounted to $2.027m. The Company has sufficient funds to meet its working capital needs, whilst further funding
will be required either through equity raisings or other financial arrangements to fund the acquisition of the Minto Mine.
This cannot be guaranteed and there are no legally binding agreements in place at the date of approval of these Financial
Statements relating to the raising of additional funds. Completion of the acquisition is also subject to the normal shareholder
and regulatory approvals.
Excluding the effect of raising the requisite funds to enable completion of the Minto Mine acquisition, the Company should
be able to meet its contracted and committed expenditure for at least the next 12 months from existing cash and cash
equivalents. If the proposed fundraise and acquisition are delayed, the Company will introduce cost reductions or undertake
a small fundraise to meet working capital requirements. The Company’s Directors have a reasonable expectation that the
Company will be able to continue in operational existence for the foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing these Financial Statements.
Property, plant and equipment
Property, plant and equipment are recorded at cost, net of accumulated depreciation and any provision for impairment.
Depreciation is provided using the straight-line method to write off the cost of the asset less any residual value over its
useful economic life as follows:
Furniture and office equipment
- 3 years
Foreign currency translation
In preparing the Financial Statements, transactions in currencies other than the entity’s functional currency (foreign
currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date,
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the
reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated. Exchange differences arising, if any, are recognised in profit or
loss.
Taxes
Income tax represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable result for the period. Taxable profit or loss differs from reported profit or loss
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit, and is
accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable
temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset
is realised. Deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited directly
to equity, in which case the deferred tax is also dealt with in equity. Tax relating to items recognised in other comprehensive
income is recognised in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to taxes levied by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
28
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments, assets and liabilities
The Company uses financial instruments comprising cash and cash equivalents, trade and other receivables and trade
and other payables that arise from its operations.
Financial assets
The only financial assets currently held by the Company are classified as loans and receivables and cash and cash
equivalents. These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision
for impairment.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part
of the counterparty or default or significant delay in payment) that the Company will be unable to collect all of the amounts
due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and
the present value of the future expected cash flows associated with the impaired receivable.
Loans and receivables comprise trade and other receivables and cash and cash equivalents in the statement of financial
position.
During the year the Company acquired and disposed of available-for-sale financial assets. These assets are non-
derivatives that are either designated in this category or not classified in any of the other categories. They are included in
non-current assets unless the investment matures or management intends to dispose of the investment within 12 months
of the end of the reporting period.
Derecognition of financial assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or
it transfers the asset and substantially all the risk and rewards of ownership of the asset to another entity.
Financial liabilities
Trade payables and other short-term monetary liabilities are all classified as other financial liabilities. At present, the
Company does not have any liabilities classified as fair value through profit or loss.
Trade payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method. All interest and other borrowing costs incurred in connection with the
above are expensed as incurred and reported as part of financing costs in the statement of comprehensive income.
Derecognition of Financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled
or they expire.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand and deposits held at call with banks. Any interest earned is accrued
monthly and classified as finance income. For the purposes of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above.
Investment in subsidiary
The Company recognises its previous investments in subsidiaries at cost, less any provision for impairment. The cost of
acquisition includes directly attributable professional fees and other expenses incurred in connection with the acquisition.
It also includes share based payments issued to employees of the Company for services provided to subsidiaries.
29
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are
shown in equity as a deduction from proceeds.
Merger Relief
The difference between the fair value of an acquisition and the nominal value of the shares allotted in a share exchange
has been credited to a merger relief reserve account, in accordance with the merger relief provisions of the Companies
Act 2006 and accordingly no share premium for such transactions has been recognised. Following the write down in
investment for impairment and distribution of the subsidiary undertaking via a dividend in specie, the reserve became
realised and consequently transferred into retained earnings.
Share based payments
The fair value of services received from employees and third parties in exchange for the grant of share options and warrants
is recognised as an expense, except for those granted in connection with the issue of new ordinary shares which are
shown as a deduction in equity. A corresponding increase is recognised in other reserves in equity. The fair value of the
share options and warrants is calculated using an appropriate valuation model. At each reporting period end the Company
revises its estimate of the number of options that are expected to become exercisable. The proceeds received net of any
attributable transaction costs are credited to share capital (nominal value) and share premium when exercised.
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company’s accounting policies, described in Note 3, the Directors are required to make judgments,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
Critical estimates in applying the Company’s accounting policies
The following are the critical estimates that the Directors have made in the process of applying the Company’s accounting
policies and that have the most significant effect on the amounts recognised in Financial Statements.
Share based payments
Estimating fair value for share based payment transactions requires determination of the most appropriate valuation model,
which is dependent on the terms and conditions of the grant of share options and warrants. This estimate also requires
determination of the most appropriate inputs to the valuation model including the expected life, volatility and dividend yield
and making assumptions about them. The assumptions used for estimating fair value for share based payment transactions
are disclosed in Note 19.
5. OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the internal reporting provided to the Board, who are
responsible for allocating resources and assessing performance of the operating segment.
The Company currently has one operating segment, being a holding Company, therefore all IFRS 8 disclosures are
incorporated within other notes to the Financial Statements.
6. OTHER INCOME
Year ended
31 December 2017
US$'000
Year ended
31 December 2016
US$'000
Management charge to former subsidiary
undertaking
-
192
30
7. EXPENSES BY NATURE
This is stated after charging:
Staff costs
Share options granted to Directors
Share based payments
Auditor's remuneration (note 8)
Management fee
8. AUDITOR’S REMUNERATION
Remuneration receivable by the Company’s auditors for the audit of the
Financial Statements
Fees payable to the Company’s auditor and its associates
for other services
Total remuneration
9. EMPLOYEES AND KEY MANAGEMENT
Year ended
31 December
2017
US$'000
Year ended
31 December
2016
US$'000
366
19
9
38
-
44
15
184
13
126
Year ended
31 December
2017
US$'000
Year ended
31 December
2016
US$'000
14
24
38
13
-
13
The total Directors’ emoluments for the year, including share based payments, were US$351,000 (2016 - US$110,000)
and social security payments were US$Nil (2016 – US$2,000). Detailed disclosure of Directors’ remuneration is disclosed
in the Directors’ remuneration report on page 14.
The average number of employees was 2 (2016 – 2).
Key management personnel as defined under IAS 24 have been identified as only the Board of Directors.
31
10. INCOME TAX
Current tax:
UK corporation tax on the result for the year
Total current taxation
Deferred taxation
Income tax
Differences explained below:
Loss before tax
Loss before tax multiplied by the standard rate 19.25% (2016: 20%)
Effect of:
Expenses not deductible for tax
Tax losses for which no deferred income tax asset was
recognised
Tax for the year
Unrecognised deferred tax asset
Tax losses UK – excess management expenses
Year ended
31 December
2017
US$'000
Year ended
31 December
2016
US$'000
-
-
-
-
-
-
-
-
(1,925)
(371)
(3,815)
(763)
102
269
-
526
526
665
98
-
299
299
The deferred tax assets are currently unrecognised as the likelihood of sufficient future taxable profits does not yet meet
the definition of “probable”.
The unrecognised deferred tax asset has no expiry period.
32
11. EARNINGS PER SHARE
The calculation of basic and diluted loss per ordinary share is based on the following data:
Year ended
31 December
2017
Year ended
31 December
2016
Basic and diluted loss per share (US cents)
(1.4c)
(14.9c)
Weighted average number of shares for basic and diluted loss per share
133,409,358
25,671,810
The basic and diluted loss per share have been calculated using the loss attributable to shareholders of the Company of
US$1,925,000 (2016: US$3,815,000) as the numerator, i.e. no adjustment to loss was necessary. The basic and dilutive
loss per share are the same as the effect of the exercise of share options and warrants would be anti-dilutive.
Details of share options and warrants that could potentially dilute earnings per share in future periods are set out in Note
19.
12. PROPERTY PLANT AND EQUIPMENT
Cost
At 1 January 2017
Additions
At 31 December 2017
Depreciation
At 1 January 2017
Charge for the year
At 31 December 2017
Net book value at 31 December 2017
Net book value at 31 December 2016
Furniture and
office equipment
US$'000
3
-
3
-
(1)
(1)
2
3
33
13. INVESTMENT IN SUBSIDARY
China Africa Resources Namibia (pty) Ltd
Opening balance
Impairment
Distribution to ordinary shareholders via
dividend in specie
31 December
2017
US$'000
31 December
2016
US$'000
-
-
-
-
3,567
(3,063)
(504)
-
China Africa Resources Namibia (pty) Ltd was 100% owned by the Company and incorporated in the Republic of Namibia.
The principal activity of China Africa Resources Namibia (pty) Ltd was exploration and evaluation of mining assets in
Namibia. The Company was acquired on 11 August 2011 by the issue of 6,326,923 ordinary 1p shares at a price of 40p,
being the market price on the date of acquisition. The acquisition price was converted to US dollars at an exchange rate
of 1.642, being the exchange rate at the date of the transaction. The principal reason for this acquisition was to develop
the Berg Aukas Mine project in Namibia.
On 14 December 2016 the Company disposed of its sole interest, the Berg Aukus Mine project, held through its wholly
owned subsidiary, China Africa Resources Namibia (pty) Ltd, through the completion of an in specie distribution. The
special dividend was independently valued at 1.75 pence per share and totalled £403,846 (equivalent to US$504,000).
14. AVAILABLE-FOR-SALE FINANCIAL ASSETS
31 December
2017
US$'000
31 December
2016
US$'000
-
426
(426)
-
-
-
-
-
31 December
2017
US$'000
31 December
2016
US$'000
118
41
195
354
26
10
2
38
At 1 January
Additions
Disposals
At 31 December
15. TRADE AND OTHER RECEIVABLES
Other receivable
Prepayments
VAT recoverable
34
16. CASH AND CASH EQUIVALENTS
Cash and short-term deposits
2,027
1,163
31 December
2017
US$'000
31 December
2016
US$'000
17. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
31 December
2017
US$'000
31 December
2016
US$'000
97
116
213
162
22
184
Trade and other payables are non-interest bearing and normally settled in the month following date of invoice.
18. SHARE CAPITAL AND PREMIUM
Allotted, called up and fully paid
Number of
ordinary
shares
Number of
deferred
shares
Share
Capital –
ordinary
shares
US$000
Share
Capital –
deferred
shares
US$000
Share
premium
US$000
Total
US$000
At 1 January 2017
Shares issued as consideration for
acquisition of investments
Proceeds from share issue at 1.6p per
share
Cost of share issue
Value of placing warrants
Share split (see below)
75,839,596
6,003,599
-
-
142,006,062
-
-
-
-
-
- 81,843,195
1,048
76
182
-
-
(1,011)
-
-
-
-
-
1,011
138
151
2,772
(153)
(6)
-
1,186
227
2,954
(153)
(6)
-
At 31 December 2017
223,849,257 81,843,195
295
1,011
2,902
4,208
On 18 August 2017 the Company passed a special resolution to sub-divide 81,843,195 ordinary shares of £0.01 each into
one new ordinary share of 0.1p each and one deferred share of 0.9p each.
Ordinary shares have attached to them full voting, dividend and capital distribution rights (including on a winding up).
Deferred shares are not entitled to vote and do not confer a right to receive a dividend. The deferred shares are entitled to
participate on a winding up once the ordinary shares have received £1,000,000 per ordinary share.
19. SHARE BASED PAYMENTS
As part of the fundraise on 20 August 2017, whereby 142,006,062 ordinary shares were issued for cash, each new ordinary
share issued had a warrant attached to acquire an additional ordinary share at an exercise price of 3.02 pence with an
exercise life of two years. The fair value of the placing warrants, amounting to $5,531, has been deducted from the share
premium arising from the fundraise on the basis they were issued for services relating to the placing.
In addition, the Company issued a total of 22,050,000 share options, in accordance with the rules of the Company’s Share
Option Plan 2016 as approved by shareholders on 18 August 2017.
The awards were approved by the Board on 30 October 2017 (the "Award Date").
35
All of the options awarded are for ten years and each award will vest 33.3% on the first, second and third anniversary of
the Award Date. The exercise price for each award is set at 2 pence per share in respect of the one third vesting on the
first anniversary of the Award Date; 4 pence per share in respect of the one third vesting on the second anniversary of the
Award Date; and 8 pence per share in respect of the one third vesting on the third anniversary of the Award Date. The fair
value of these options was determined using the Black-Scholes valuation model at £0.0038 per option. The significant
inputs into the model were a share price of £0.0145 at the grant date, volatility of 29%, a dividend yield of £Nil and an
annual risk-free interest rate of 0.5%. Volatility was based upon the standard deviation of movement in daily share prices
over the three months prior to date of grant.
Share options issued to the Directors were as follows:
David Linsley 7,200,000
Guy Le Bel 1,350,000
Francis McAllister 1,350,000
Gati Al-Jebouri 1,350,000
The balance of 10,800,000 options were awarded to consultants and members of the management team.
The fair value of the options, amounting to $38,158, has been included within administrative expenses within the statement
of comprehensive income.
Two consultants each received a 1,500,000 share options (3,000,000 options in total) during 2017. The options have an
exercise price of 4.34 pence per share with a three-year exercise life. The options vested immediately upon grant. The fair
value of these options was determined using the Black-Scholes valuation model at £0.00233 per option. The significant
inputs into the model were a share price of £0.02625 at the grant date, volatility of 27%, a dividend yield of £Nil and an
annual risk-free interest rate of 0.5%. Volatility was based upon the standard deviation of movement in daily share prices
over the six months prior to date of grant.
The fair value of the options, amounting to $8,733, has been included within administrative expenses within the statement
of comprehensive income.
Movements in the number of share options and warrants and their related weighted average exercise prices are as follows:
At 1 January
Granted
2017
2016
Options and
warrants
Number
53,082,948
167,056,062
Average
exercise price
(pence)
Options and
warrants
Number
Average
exercise price
(pence)
4.34
3.26
-
53,082,948
-
4.34
At 31 December 2017
220,139,010
3.52
53,082,948
4.34
Out of the 220,139,010 (2016: 53,082,948) outstanding options and warrants, 198,089,010 (2016: 53,082,948) were
exercisable at the year-end. No options or warrants were exercised or forfeited during the year.
Share options and warrants outstanding at the end of year have the following expiry date and exercise prices:
Grant-Vest
2016
2016
2017
2017
2017-2018
2017-2019
2017-2020
Expiry date
Number
Exercise
price
(pence)
2018
2019
2019
2020
2027
2027
2027
4.34
4.34
3.02
4.34
2.00
4.00
8.00
2017
Number
2016
Number
47,082,948
6,000,000
142,006,062
3,000,000
7,350,000
7,350,000
7,350,000
47,082,948
6,000,000
-
-
-
-
-
In addition, 6,003,599 new ordinary shares were issued during the year as consideration for the acquisition of available for
sale assets. The fair value of the shares was $227,000.
36
20. FINANCIAL INSTRUMENTS
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument, are disclosed in note 3.
The only financial assets currently held by the Company are classified as loans and receivables and cash and cash
equivalents.
Categories of financial instruments
The carrying amounts presented in the statement of financial position relate to the following categories of assets and
liabilities.
Financial assets
Current
Loans and receivables
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Current- amortised cost
Trade and other payables
Borrowings
Carrying value
31 December 2017
US$'000
31 December 2016
US$'000
354
2,027
2,381
(213)
-
(213)
26
1,163
1,189
(184)
-
(184)
As at 31 December 2017, trade and other receivables are all considered to be recoverable.
All financial liabilities are repayable within one year.
The fair value is equivalent to book value for current assets and liabilities.
The main risks arising from the Company’s financial instruments are liquidity risk, interest rate risk and foreign currency
risk. The Directors review and agree policies for managing these risks and these are summarised below.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Company will encounter difficulty
in meeting its financial obligations as they fall due. The Directors are current assessing the Company’s options in respect
of raising additional finance for the business.
The Directors monitor cash flow on a daily basis and at quarterly Board meetings in the context of their expectations for
the business, in order to ensure sufficient liquidity is available to meet foreseeable needs.
Interest rate risk
The interest rate profile of the Company’s cash and cash equivalents as at 31 December was as follows:
As at 31 December 2017
Cash at bank with no interest rate
US
Dollars
$'000
38
38
37
Pound
Sterling
$'000
1,989
Total
$'000
2,027
1,989
2,027
As at 31 December 2016
Cash at bank with no interest rate
US
Dollars
$'000
1
1
Pound
Sterling
$'000
1,162
Total
$'000
1,163
1,162
1,163
The Company’s cash at bank is held with an institution with an A+ credit rating (Fitch).
Foreign currency risk management
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:
Cash and cash equivalents
Pound Sterling
31 December 2017
US$'000
31 December 2016
US$'000
1,989
1,989
1,162
1,162
The following table details the Company’s sensitivity to a 10% increase and decrease in the US dollar against the relevant
foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally and represents
Management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 10%
change in foreign currency rates. A positive number below indicates an increase in profit and equity where the US dollar
strengthens 10% against the relevant currency. For a 10% weakening of the US dollar against the relevant currency, there
would be an equal and opposite impact on the profit and equity, and the balances below would be negative.
British pound
currency impact
British pound
currency impact
31 December 2017
US$'000
31 December 2016
US$'000
Effect on loss
+10%
-10%
Effect on equity
+10%
-10%
116
116
116
116
199
199
199
199
38
21. RELATED PARTY TRANSACTIONS
The Company had the following transactions with
Weatherly International Plc, a Company in which Roderick Webster
and John Bryant are non executive Directors
31 December 2017
US$'000
31 December 2016
US$'000
Management Fee paid
The Company had the following transactions with
HK ECE a shareholder of the Company.
Loans repaid during the year
Loans outstanding at the end of the year
The Company had the following transactions with Value Generation
Limited, a Company controlled by Paul Johnson
Consultancy services paid
22. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
-
-
-
-
126
(200)
-
96
The Company considers its capital to comprise its ordinary share capital, share premium and accumulated retained losses
as well as loans and reserves (consisting of share based payments reserve and merger relief reserve).
The Company’s objective when maintaining capital is to safeguard the entity's ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders.
The Company meets its capital needs by equity financing.
Capital for the reporting period under review is summarised as follows:
31 December 2017
US$'000
31 December 2016
US$'000
Total equity
2,170
1,020
23. EVENTS SUBSEQUENT TO THE REPORTING DATE
The Company signed a Share Purchase Agreement dated 14 February 2018 with Capstone Mining Corp. to acquire 100%
of Minto Exploration Ltd, which operates the Minto Mine. The consideration for the proposed acquisition is comprised of
US$37.5 million in cash plus new ordinary shares such that, subsequent to completion, Capstone Mining Corp. will own
9.9% of the Company. The Minto Mine is an open pit and underground copper-gold-silver mine located in central Yukon,
Canada.
39
Company information
Directors
(Non-Executive Director and Chairman)
Francis Ralph McAllister
(Director and Chief Executive Officer)
David Charles Linsley
Guy Le Bel
(Non-Executive Director)
Gati Al-Jebouri (Non-Executive Director)
Secretary
London Registrars Ltd
Registered office
Suite A, 6 Honduras Street
London EC1Y 0TH
Registered number
07352056 (England and Wales)
Auditor
Bankers
Solicitors
PKF Littlejohn LLP
Statutory Auditor
1 Westferry Circus
Canary Wharf
London E14 4HD
Bank of Scotland
St James’s Gate
14-16 Cockspur Street
London SW1Y 5BL
Cooley (UK) LLP
Dashwood
69 Old Broad Street
London EC2M 1QS
Joint Brokers
SI Capital Limited
46 Bridge Street
Godalming, Surrey GU7 1HL
GMP Securities L.P
300-145 King St W
Toronto, ON M5H 1J8
Arden Partners
25 Old Broad Street
London EC2N 1AR
Link Asset Management
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Registrars
Website
www.pembridgeresources.com
TDIM
PERE
40