Aurum Mining Plc
Company No. 05059457
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
Annual Report and financial statements
for the year ended 31 March 2016
Contents
Page
2
3
5
6
8
9
Company information
Review of activities
Strategic report
Report of the Directors
Corporate governance statement
Statement of Directors’ responsibilities
10
Report of the independent auditors
12
Statement of comprehensive income
13
Statement of financial position
14
Statement of changes in equity
15
Statement of cash flows
16 Notes to the financial statements
35 Notice of Annual General Meeting
38
Form of Proxy
1
Aurum Mining Plc
Company information
Chairman
Directors David Williams
Sean Finlay
Non-Executive Director
Haresh Kanabar Non-Executive Director
Company Secretary and Haresh Kanabar
Registered Office 22 Great James Street
London
WC1N 3ES
Company Number 05059457
Nominated Adviser WH Ireland Limited
and Broker 24 Martin Lane
London
EC4 0DR
Auditors BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
Registrars Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Website www.aurummining.net
2
Aurum Mining Plc
Review of activities
for the year ended 31 March 2016
The Company’s Interim results statement, published on 19 November 2015, outlined that the Board was
in the process of changing the direction of the Company in response to the challenging market conditions
that continue to blight the Natural Resources sector. The statement went on to say that in order to
maximise potential returns for Shareholders the Board would be pursuing a twin strategy of identifying a
transformational deal for the Company while looking to deliver value from the Company’s highly
prospective gold and tungsten portfolio.
The Board continues to be optimistic about the Company’s exploration assets in North-West Spain. In
recent months the Company and its joint venture partner, Ormonde Mining plc (“Ormonde”) (AIM: ORM),
have commissioned a report to review all the work that has been undertaken on the gold projects to date
and to propose the optimal next steps for the joint venture. The findings of the report, written by a highly
regarded third party Professional Geologist Kieran Harrington, were extremely encouraging, with an overall
conclusion that “exploration work carried out on the projects to date supports the view that there is
potential for discovery of an economic gold deposit.” The report also identifies very clear targets for follow
up exploration work and sets out a high-impact, low cost work programme which has the potential to
rapidly and more fully demonstrate the prospectivity and potential of these assets.
Given that the mining sector for small companies is likely to be difficult for some time to come, and in spite
of the fact that the gold projects provide the Company with some hope for the coming period, the Board
will continue to actively look at other opportunities. The Board will consider opportunities both within and
outside of the mining sector in order to maximise the Company’s potential as a listed company. The Board
is currently appraising funding options to enable the Company to secure opportunities and to finance due
diligence and transaction costs.
The Board feels that the Company has done well to withstand the severe shake out in the junior mining
sector but it will now be looking at different sectors in its efforts to provide the upside that our
Shareholders require.
During this challenging period, the Board has continued to keep operational costs to a bare minimum.
Key financials
For the twelve months to 31 March 2016, the Group reported a loss of £243,000 compared to a loss of
£317,000 for the same period in 2015.
The loss for the year includes a £64,000 impairment charge on the Morille tungsten project (refer to Note
9 for further details of the impairment charge). The Board took the decision to impair its Morille tungsten
asset due to the current low tungsten price and due to the fact that the current operator of the project,
Plymouth Minerals Limited (ASX: PLH) (“Plymouth) is not currently undertaking any exploration work on
the project. The Company continues to have a residual shareholding in Plymouth and is encouraged by its
recent strong share price performance.
Administrative costs for the period were £179,000 compared to £290,000 for the same period in 2015.
During this period of transition, cash management and cost control have remained key priorities for the
Company.
3
Aurum Mining Plc
Review of activities
continued
Corporate
The Board would like to thank its Shareholders and advisers for their input during this transitional period.
To facilitate the transformation process and to reduce costs, the Company announced various Directorate
changes during the period. David Williams, the Company’s major Shareholder, was appointed to the Board
as Chairman, and Mark Jones stepped down from the Board.
Sean Finlay stepped down as Chairman on David’s appointment but remains on the Board as a Non-
Executive Director along with Haresh Kanabar who also remains on the Board as a Non-Executive Director.
Chris Eadie continues to assist the Company as a consultant on a part-time basis.
In order to preserve cash and keep operating costs to a minimum, David Williams has agreed to take no
salary until a transformational deal is completed.
Qualified person
Sean Finlay, Professional Geologist, Chartered Engineer, Non-Executive Director of Aurum Mining Plc, and
a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the
London Stock Exchange, has reviewed and approved the technical information contained in this report.
On behalf of the Board
David Williams
Chairman
24 August 2016
4
Aurum Mining Plc
Strategic report
for the year ended 31 March 2016
Principal activity
Aurum Mining Plc is a mining Company with a portfolio of gold and tungsten exploration projects in North-
West Spain. The gold projects are held through a joint arrangement with Ormonde.
The Company currently retains a 20% carried interest in the Morille tungsten project.
Business review and future developments
A detailed review of activities for the year and future prospects of the Company are included in the Review
of Activities Report on pages 3 and 4.
Principal risks and uncertainties
The Company’s activities are carried out in Spain and the United Kingdom. Accordingly, the principal risks
and uncertainties are considered as follows:
Exploration risk
Exploration activities are high risk undertakings and there can be no guarantee that exploration will result
in the discovery of an economically viable ore body. Exploration activities may be delayed or adversely
affected by factors outside the Company’s control. In particular, climatic conditions, performance of joint
arrangement partners or suppliers, unknown geological conditions, actions of host governments or other
regulatory authorities relating to the grant, maintenance or renewal of any required authorizations,
environmental regulations or changes in law.
Financing risk
The Board is currently looking at a number of options to secure a long-term sustainable future for the
Company. The Board is cognisant of difficult market conditions facing AIM quoted junior exploration
companies but is confident of securing a transformational transaction that will secure the Company both
operationally and financially.
Key performance indicators (KPIs)
Costs: The Board and management monitor actual against budgeted costs on a monthly basis.
Finance: Control of bank and cash balances is a priority for the Company and these are budgeted and
monitored closely to ensure that the Company maintains adequate liquidity to meet financial commitments
as they arise.
On behalf of the Board
David Williams
Chairman
24 August 2016
5
Aurum Mining Plc
Report of the Directors
for the year ended 31 March 2016
The Directors present their annual report together with the audited financial statements for the year
ended 31 March 2016.
Dividends
The Directors do not recommend payment of a dividend for the year (2015: £nil).
Strategic report
A review of the business and future developments of the Company are included within the Strategic Report
and the Review of Activities Report on pages 3 to 5.
Directors
The Directors of the Company who held office during the year and their beneficial interests, at the
beginning and end of the year and at the date of signing the financial statements are as follows:
Name of Director
David Williams
S Finlay
H Kanabar
M Jones
Appointed as Chairman on 20 April 2015
Resigned as Chairman and appointed as Non-Executive Director on 20 April 2015
Remains as Non-Executive Director
Resigned as Non-Executive Director on 15 April 2015
Directors’ indemnities
Aurum Mining Plc maintained liability insurance for its Directors and officers during the period and also as
at the date of the report of the Directors.
Directors’ interests
Number of Number of
shares held at shares held at
31 March 2016 31 March 2015
D Williams 51,083,994 50,083,994
S Finlay 666,055 666,055
H Kanabar 841,668
841,668
M Jones- resigned 15 April 2015 N/A 2,746,946
David Williams who was appointed to the Board on 20 April 2015, held 50,083,994 shares at that
date. David Williams purchased an additional 1,000,000 shares on 11 February 2016 at an average of
0.76 pence per share taking his total holding to 51,083,994 ordinary shares representing a beneficial
interest of 29.30% of the current issued share capital of the Company.
The Directors’ who held office during the year and their interests in the share options of the Company as
at 31 March 2016 and 1 April 2015 are as follows:
Number of Number of
Number of options options Number of
options at granted exercised options at First Final
1 April during during 31 March Exercise Date of date of date of
2015 the year the year 2016 Price grant exercise exercise
S Finlay 650,000 – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
H Kanabar 650,000 – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
M Jones –
resigned
15 April 2015 650,000 – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
Since 26 April 2016, all outstanding options held by the above Directors have lapsed as they were not
exercised by the final date.
The remuneration of Directors during the year is disclosed in Note 5.
6
Aurum Mining Plc
Report of the Directors
continued
Going concern
Following a review of the Company’s operations, its current financial position and cash flow forecasts, the
Directors have formed a view that the Company will have sufficient financial resources available to it to
continue in operational existence and meet its financial commitments as they arise in the next twelve
months. The Directors have formed this view based on the amount of available cash within the Company,
the Company’s historical track record of raising funds from the AIM market, the recent additional post
reporting date funding through the issue of further convertible loan notes and the assets and investments
that the Company holds which could be made available for potential sale, should the need arise.
Based on the above the Directors have concluded that the Company can continue as a going concern for
a period of at least twelve months from the date of signing these financial statements. Accordingly, the
Directors continue to adopt the going concern basis for the preparation of these financial statements.
At the date of approval of these financial statements there are no legally binding agreements in place
relating to either fundraising or to the sale of any of the Company's assets or investments.
Further disclosure is provided in Note 1 of the financial statements.
Events after the reporting date
Details of this are included in the notes to the financial statements per Note 18: Events after the reporting
period.
Financial instruments
Details of the use of financial instruments by the Company are contained in Note 15 of the financial
statements.
The financial risk management policies and objectives are set out in detail in Note 15 of the financial
statements.
Statement as to disclosure of information to auditors
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 has confirmed that they have taken all steps that he 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.
Auditor
BDO LLP has expressed its willingness to continue in office as auditors and a resolution to re-appoint BDO
will be proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The Company proposes to convene the Annual General Meeting for 12.00 noon on 29 September 2016
at the offices of Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU. Notice of the Annual
General Meeting is attached at the end of this document.
On behalf of the Board
David Williams
Chairman
24 August 2016
7
Aurum Mining Plc
Corporate governance statement
for the year ended 31 March 2016
The Company, being listed on the AIM, is not required to comply with the UK Corporate Governance Code
(“the Code”) as amended in October 2014. However, the Company has given consideration to the
provisions set out in the Code. The Directors support the objectives of the Code and intend to comply with
those aspects that they consider relevant to the Company’s size and circumstances but do not consider it
necessary to comply with the Code in its entirety. Details of these are set out below. A statement of the
Directors’ responsibilities in respect of the financial statements is set out on page 9. Below is a brief
description of the role of the Board and its committees, including a statement regarding the Company’s
system of internal financial control.
The Board of Directors
The Board currently comprises a Chairman and two Non-Executive Directors.
The Board meets approximately every one to two months and is responsible, inter alia, for setting and
monitoring Company strategy, reviewing trading performance, ensuring adequate funding, examining
major acquisition opportunities, formulating policy on key issues and reporting to the shareholders.
Internal Financial Control
The Board is responsible for establishing and maintaining the Company’s system of internal financial
controls. Internal financial control systems are designed to meet the particular needs of the Company and
the risk to which it is exposed, and by its very nature can provide reasonable, but not absolute, assurance
against material misstatement or loss.
The Directors are conscious of the need to keep effective internal financial control. Due to the relatively
small size of the Company’s operations, the Directors are very closely involved in the day-to-day running of
the business and as such have less need for a detailed formal system of internal financial control. The
Directors have reviewed the effectiveness of the procedures presently in place and consider that they are
appropriate to the nature and scale of the operations of the Company.
The Audit Committee
An Audit Committee has been established which comprises two Non-Executive Directors – Sean Finlay
(who chairs the Committee) and Haresh Kanabar. The Committee is responsible for ensuring that the
financial performance of the Company is properly reported on and monitored, and for meeting the
auditors and reviewing the reports from the auditors relating to accounts and internal controls. The
Committee also reviews the Company’s annual and interim financial statements before submission to the
Board for approval. The role of the Audit Committee is also to consider the appointment of the auditors,
audit fees, scope of audit work and any resultant findings.
The Remuneration Committee
The Remuneration Committee comprises two Non-Executive Directors – Haresh Kanabar (who chairs the
Committee) and Sean Finlay. It is responsible for reviewing the performance of the Executive Directors and for
setting the scale and structure of their remuneration, paying due regard to the interests of Shareholders as a
whole and the performance of the Company. The remuneration of the Chairman and the Non-Executive
Directors is determined by the Board as a whole, based on a review of the current practices in other
companies.
The Nomination Committee
The Nomination Committee comprises two Non-Executive Directors – Sean Finlay (who chairs the Committee)
and Haresh Kanabar. The Committee is responsible for reviewing the size, structure and composition of the
Board of Directors, succession planning and identifying and monitoring candidates for all Board vacancies.
8
Aurum Mining Plc
Statement of Directors’ responsibilities
for the year ended 31 March 2016
The Directors are responsible for preparing the Strategic Report, 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 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 for that period. The Directors are also required to prepare
financial statements in accordance with the rules of the London Stock Exchange for companies trading
securities on the Alternative Investment Market.
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 they have been prepared in accordance with IFRSs as adopted by the European Union,
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 ensuring the Annual Report and the Financial Statements are made
available on a website. Financial statements are published on the Company’s website in accordance with
legislation in the United Kingdom governing the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing
integrity of the financial statements contained therein.
9
Aurum Mining Plc
Report of the independent auditors
To the members of Aurum Mining Plc
We have audited the financial statements of Aurum Mining Plc for the year ended 31 March 2016 which
comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of
Changes in Equity, the Statement of Cash Flows and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the
Companies Act 2006.
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.
Respective responsibilities of directors and auditors
As explained more fully in the statement of Directors’ Responsibilities, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with
the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at
www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
●
●
●
give a true and fair view of the state of the Company’s affairs as at 31 March 2016 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.
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which is not modified, we have considered the
adequacy of the disclosures made in Note 1 to the financial statements concerning the Company’s ability
to continue as a going concern. As set out in Note 1 the Directors have reviewed the financial position of
the Company. The Directors’ conclusion on the Company’s ability to continue as a going concern is reliant
on the Company raising further funds through the issue of equity, further convertible loan notes or the
potential sale of assets or investments held by the Company. As there are no legally binding agreements
in place relating to either of these at the date of approval of these financial statements this indicates the
existence of a material uncertainty, which may cast significant doubt on the Company’s ability to continue
as a going concern.
The financial statements do not include the adjustments that would result if the Company were unable to
continue as a going concern.
10
Aurum Mining Plc
Report of the independent auditors
To the members of Aurum Mining Plc
continued
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 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 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.
Anne Sayers (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
24 August 2016
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
11
Aurum Mining Plc
Statement of comprehensive income
for the year ended 31 March 2016
2016 2015
Notes £’000 £’000
Impairment charge 9 (64) (27)
Administrative expenses (179) (290)
Operating loss 3 (243) (317)
Loss for the year before taxation (243) (317)
Taxation 6 – –
Loss for the year after taxation (243) (317)
Loss after taxation (243) (317)
Other comprehensive income:
Items that may be reclassified to profit or loss:
Change in fair value of available-for-sale financial assets 9 27 –
Total comprehensive loss for the year (216) (317)
Loss per share expressed in pence per share
Basic and Diluted 7 (0.14p) (0.22p)
The notes on pages 16 to 34 form part of these financial statements.
12
Aurum Mining Plc
Statement of financial position
as at 31 March 2016
2016 2015
Notes £’000 £’000
Assets
Non-current assets
Intangible assets 8 926 899
Investments 9 42 79
Total non-current assets 968 978
Current assets
Receivables 10 11 13
Cash and cash equivalents 15 45 106
Total current assets 56 119
Total assets 1,024 1,097
Liabilities
Current liabilities
Convertible Loan 11 50 –
Trade and other payables 12 67 89
Total current liabilities 117 89
Total liabilities 117 89
Net assets 907 1,008
Capital and reserves attributable to
the equity holders of the company
Share capital 13 1,719 1,461
Shares to be issued 13 – 140
Share premium 11,593 11,596
Available for sale reserve 9 27 –
Retained deficit (12,432) (12,189)
Total equity 907 1,008
The financial statements were approved by the Board of Directors and authorised for issue on 24 August
2016. They were signed on its behalf by:
David Williams
Chairman
Company number: 05059457
The notes on pages 16 to 34 form part of these financial statements.
13
Aurum Mining Plc
Statement of changes in equity
for the year ended 31 March 2016
Available
Share Shares to for sale Share Retained Total
capital be issued reserve premium deficit equity
£’000 £’000 £’000 £’000 £’000 £’000
At 1 April 2014 1,413 – – 11,585 (11,872) 1,126
Total comprehensive expense
for the year – – – – (317) (317)
Issue of shares net of issue
costs (Note 13) 48 – – 11 – 59
Shares to be issued (Note 13) – 140 – – – 140
At 31 March 2015 1,461 140 – 11,596 (12,189) 1,008
Total loss for the year – – – – (243) (243)
Other comprehensive income
Fair value adjustment on
available for sale investment – – 27 – – 27
Total comprehensive loss
for the year – – 27 – (243) (216)
Issue of shares net of issue
costs (Note 13) 118 – – (3) – 115
Shares to be issued (Note 13) 140 (140) – – – –
At 31 March 2016 1,719 – 27 11,593 (12,432) 907
The following describes the nature and purpose of each reserve within owners’ equity.
Reserve
Share capital
Share premium
Shares to be issued
Available for sale reserve
Retained deficit
Description and purpose
Amounts subscribed for share capital at nominal value.
Amounts subscribed for share capital in excess of nominal
value.
Shares for which consideration has been received, but
which are not issued yet.
Unrealised gains or losses on fair value re-measurement on
available for sale investments.
Cumulative net gains and losses recognised in the income
statement less distributions made.
The notes on pages 16 to 34 form part of these financial statements.
14
Aurum Mining Plc
Statement of cash flows
for the year ended 31 March 2016
2016 2015
£’000 £’000
Cash flows from operating activities
Loss for the year before tax (243) (317)
Adjustments for:
Impairment charge 64 27
Cash flow from operating activities before changes
in working capital (179) (290)
Decrease in other receivables 2 7
Decrease in trade and other payables (22) (24)
Net cash flow used in operating activities (199) (307)
Investing activities
Ormonde joint arrangement payments (27) –
Net cash flow used in investing activities (27) –
Financing activities
Proceeds from issue of share capital 118 60
Expenses paid in connection with share issues (3) (1)
Proceeds from convertible loan 50 –
Cash received in respect of shares to be issued – 140
Net cash flow from financing activities 165 199
Net decrease in cash and cash equivalents (61) (108)
Cash and cash equivalents at the beginning of the year 106 214
Cash and cash equivalents at the end of the year 45 106
The notes on pages 16 to 34 form part of these financial statements.
15
Aurum Mining Plc
Notes to the financial statements
for the year ended 31 March 2016
1 Accounting policies
The Company is a public limited Company incorporated and domiciled in the United Kingdom. The
address of its registered office is 22 Great James Street, London, WC1N 3ES. The principal accounting
policies applied in the preparation of these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These financial statements for the year ended 31 March 2016 have been prepared in accordance with
International Financial Reporting Standards, International Accounting Standards and Interpretations
(collectively IFRSs).
Functional and presentational currency
The financial statements are presented in Great Britain Pounds Sterling, and all values are rounded to
the nearest thousand Pounds (£’000) except when otherwise indicated.
Basis of accounting and adoption of new and revised standards
No new standards were issued for mandatory adoption by the Company for its financial year
beginning 1 April 2015.
No other IFRS issued and adopted but not yet effective are expected to have an impact on the
Company’s financial statements
Standards, amendments and interpretations, which are effective for reporting periods beginning after
the date of these financial statements which have not been adopted early:
Standard Description Effective date
IAS 19 Defined Benefit Plans: Employee Contributions: 1 Feb 2015
Amendments to IAS 19
IFRSs Annual Improvements to IFRSs (2010 – 2012 Cycle) 1 Feb 2015
IFRSs Annual Improvements to IFRSs (2011 – 2013 Cycle) 1 Jan 2015
IFRS 11 Accounting for Acquisitions of Interests in Joint 1 Jan 2016
Operations: Amendments to IFRS 11
IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation 1 Jan 2016
and Amortisation
IAS 16 and IAS 41 Agriculture: Bearer Plants: Amendments to IAS 16 1 Jan 2016
and IAS 41
IAS 27 Equity Method in Separate Financial Statements 1 Jan 2016
(Amendments to IAS 27)
IFRSs Annual Improvements to IFRSs (2012–2014 Cycle) 1 Jan 2016
IAS 1 Disclosure Initiative: Amendments to IAS 1 1 Jan 2016
IFRS 10*, IFRS 12* and Investment Entities: Applying the Consolidation 1 Jan 2016
IAS 28* Exception (Amendments to IFRS 10, IFRS 12 and IAS 28)
IAS 12* Recognition of deferred tax assets for unrealised losses
(Amendments to IAS 12) 1 Jan 2017
IAS 7* Disclosure Initiative: Amendments to IAS 7 1 Jan 2017
IFRS 15 Clarifications to IFRS 15 revenue from Contracts 1 Jan 2018
with Customers
*not yet been endorsed by the European Union at the date that these financial statements were approved and
authorised for issue by the Board.
The Company is evaluating the impact of the above pronouncements but they are not expected to
have a material impact on the Company’s income or equity.
16
Aurum Mining Plc
Notes to the financial statements
continued
1 Accounting policies (continued)
Going concern
Following a review of the Company’s operations, its current financial position and cash flow forecasts,
the Directors have formed a view that the Company will have sufficient financial resources available
to it to continue in operational existence and meet its financial commitments as they arise in the next
twelve months. The Directors have formed this view based on the amount of available cash within the
Company, the Company’s historical track record of raising funds from the AIM market, the recent
additional post reporting date funding through the issue of further convertible loan notes and the
assets and investments that the Company holds which could be made available for potential sale,
should the need arise.
Based on the above the Directors have concluded that the Company can continue as a going concern
for a period of at least twelve months from the date of signing these financial statements. Accordingly,
the Directors continue to adopt the going concern basis for the preparation of these financial
statements.
The base case forecasts prepared by the Directors reflect the requirement for the Company to continue
to contribute to the joint arrangement with Ormonde in order to retain the Company’s interest in the
gold assets, to raise further funds over the next twelve months and to dispose of both of the key assets
of the Company. Following the year end £125,000 of funds have been raised through the issue of
further convertible loan notes and equity instruments however, further funding is still required to allow
the Company to continue in operational existence for at least 12 months from the date of these
financial statements. Given that at the date of approval of these financial statement there are no
legally binding agreements in place relating to either fundraising or to the sale of any of the
Company’s assets or investments, there can be no certainty relating to the Directors proposed courses
of action to ensure the Company is sufficiently funded for the next twelve months, despite the
Company’s track record of raising funds or completing asset transactions. This position indicates the
existence of a material uncertainty which may cast significant doubt about the Company’s ability to
continue as a going concern. The financial statements do not include the adjustments that would
result if the Company was unable to continue as a going concern, which would principally relate to
the impairment of intangible assets and investments.
Foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying the spot
exchange rate ruling at the date of transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the functional currency rate of exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at
the fair value in a foreign currency are translated using exchange rates at the date when the fair value
was determined.
Operating leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are
classified as operating leases and rentals payable are charged to the income statement on a straight
line basis over the term of the lease.
17
Aurum Mining Plc
Notes to the financial statements
continued
1 Accounting policies (continued)
Impairment of non-financial assets
The Company’s non-financial assets are subject to impairment tests whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable. Where the carrying amount
of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to
sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment loss
is carried out on the smallest group of assets to which it belongs for which there are separately
identifiable cash flows; its cash generating units (‘CGUs’).
Impairment charges are included in profit and loss, except to the extent they reverse gains previously
recognised in other comprehensive income.
Financial instruments
Financial assets and financial liabilities are recognised in the Company’s statement of financial position
when the Company becomes a party to the contractual provisions of the instrument.
Financial assets
The Company’s financial assets fall into two categories, loans and receivables and available for sale
financial assets which are discussed below. The Company does not have any held to maturity or fair
value through profit and loss financial assets.
(a) Loans and receivables
Receivables are measured at initial recognition at fair value, and are subsequently measured at
amortised cost using the effective interest rate method. Appropriate allowances for estimated
irrecoverable amounts are recognised in profit or loss when there is objective evidence that the
asset is impaired. The allowance recognised is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the effective
interest rate computed at initial recognition.
(b) Available for sale financial assets
These comprise of the Company’s investments in entities not qualifying as subsidiaries, associates
or jointly controlled entities. After initial measurement, available for sale financial assets are
subsequently measured at fair value, with unrealised gains or losses recognised in other
comprehensive income in the available for sale reserve (equity).
Investments in equity instruments that do not have a quoted market price in an active market and
whose fair value cannot be readily measured, which are measured at cost.
Where there is a significant or prolonged decline in the fair value of an available-for-sale financial
asset (which constitutes objective evidence of impairment), the full amount of the impairment,
including any amount previously recognised in other comprehensive income, is recognised in
profit and loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly
liquid investments with less than three months’ original maturity that are readily convertible to a
known amount of cash and are subject to an insignificant risk of changes in value.
18
Aurum Mining Plc
Notes to the financial statements
continued
1 Accounting policies (continued)
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in
the assets of the Company after deducting all of its liabilities. The Company’s financial liabilities fall
into one category, financial liabilities held at amortised cost, which is discussed below.
Financial liabilities held at amortised cost
Financial liabilities are initially measured at fair value, and are subsequently measured at amortised
cost, using the effective interest rate method. The Company’s financial liabilities are trade payables,
other short term liabilities and convertible loans/debt.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue
costs.
Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, and
it is probable that the Company will be required to settle that obligation. Provisions are measured at
the Directors’ best estimate of the expenditure required to settle the obligation at the reporting date,
and are discounted to present value where the effect is material.
Finance income and expense
Finance income comprises interest income on funds invested and foreign exchange gains. Interest
income is recognised as it accrues, calculated in accordance with the effective interest rate method.
Finance costs comprise interest expense on borrowings, the accumulation of interest on provisions and
foreign exchange losses.
Income taxes
The charge for taxation is based on the profit or loss for the year and takes into account deferred tax.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the
carrying amounts of assets and liabilities in the financial statements and the corresponding tax based
in the computation of taxable profit or loss, and is accounted for using the balance sheet method.
Deferred tax assets are only recognised to the extent that it is probable that future tax profit will be
available in the foreseeable future against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are measured at the rates that are expected to apply when
the related asset is realised or liability settled, based on tax rates and laws enacted or substantively
enacted at the reporting date.
National Insurance on share options
To the extent that the share price as at the reporting date is greater than the exercise price of
outstanding options, provision for any National Insurance contributions has been made based on the
prevailing rate. The provision is accrued over the performance period attaching to the award.
Pension contribution
The Company does not enter into any pension scheme arrangements. The Company does make
payments in lieu of pensions for certain individuals; these costs are expensed as incurred.
19
Aurum Mining Plc
Notes to the financial statements
continued
1 Accounting policies (continued)
Share-based payments
In order to calculate the charge for share-based payments as required by IFRS2, the Company makes
estimates principally relating to assumptions used in its option-pricing model as set out in Note 14.
The cost of equity-settled transactions with suppliers of goods and services is measured by reference
to the fair value of the good or service received, unless that fair value cannot be estimated reliably.
The fair value of the good or service received is recognised as an expense as the Company receives the
good or service. The cost of equity-settled transactions with employees, and transactions with
suppliers where fair value cannot be estimated reliably, is measured by reference to the fair value of
the equity instrument. The fair value of equity-settled transactions with employees is recognised as an
expense over the vesting period. The fair value of the equity instrument is determined at the date of
grant, taking into account market based vesting conditions. The fair value is determined using an
option pricing model.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition, which are treated as vesting irrespective of whether or not the
market condition is satisfied, provided that all other performance conditions are satisfied.
At each reporting date before vesting, the cumulative expense is calculated, representing the extent
to which the vesting period has expired and management’s best estimate of the achievement or
otherwise of non-market conditions, the number of equity instruments that will ultimately vest, or in
the case of an instrument subject to a market condition, be treated as vesting as described above. The
movement in cumulative expense since the previous reporting date is recognised in the income
statement, with a corresponding entry in equity.
Joint arrangements
The Company is party to a joint arrangement when there is a contractual arrangement that confers
joint control over the relevant activities of the arrangement to the Company and at least one other
party.
The Company classifies its interests in joint arrangements as either:
●
●
Joint ventures: where the Company has rights only to the net assets of the joint arrangement
Joint operations: where the Company has both the rights to assets and obligations for the
liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Company considers:
●
●
●
●
The structure of the joint arrangement
The legal form of joint arrangements structured through a separate vehicle
The contractual terms of the joint arrangement agreement
Any other facts and circumstances.
The Company only had joint operations during the year, and at year end. The Company accounts for
its interests in joint operations by recognising its share of assets, liabilities, revenues and expenses in
accordance with its contractually conferred rights and obligations.
20
Aurum Mining Plc
Notes to the financial statements
continued
1 Accounting policies (continued)
Pre-production assets
Pre-production assets are categorized as intangible assets on the statement of financial position. Pre-
licence expenditure is expensed as directed by IFRS 6. Expenditure on licence acquisition costs,
geological and geophysical costs, costs of drilling exploration, appraisal and development drilling, and
an appropriate share of overheads are capitalised in the relevant cash-generating unit. These costs
which relate to the exploration, appraisal and development of mining interests are initially held as
intangible non-current assets pending determination of commercial viability. On commencement of
production these costs are transferred to production assets.
Convertible loan notes
Convertible notes are separated into liability and equity components based on the terms of the
contract.
On issuance of the convertible notes, the fair value of the liability component is determined using a
market rate for an equivalent non-convertible instrument. This amount is classified as a financial
liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or
redemption.
The remainder of the proceeds is allocated to the conversion option that is recognised and included
in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying
amount of the conversion option is not re-measured in subsequent years.
Where the convertible fails the fixed-for-fixed criteria of IAS 32 the conversion feature is valued first
with the balance being treated as the liability component which is recognised at fair value and
subsequently at amortised cost using the effective interest rate method.
Transaction costs are apportioned between the liability and equity components of the convertible
notes, based on the allocation of proceeds to the liability and equity components when the
instruments are initially recognised.
2 Accounting estimates and judgements
The preparation of financial information in conformity with IFRS requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of financial information
and the reported amounts of expenses during the reporting periods. Although these estimates are based
on management’s best knowledge of the amounts, event or actions, actual results ultimately may differ
from those estimates. The key accounting estimates and judgments are set out below:
(a) Carrying value of mineral properties and pre-production assets
The Company assesses at each reporting period whether there is any indication that there may be
facts or circumstances relating to these assets which may be impaired. If such indication exits, the
Company estimates the recoverable amount of the asset. In the early stages of exploration an
indication of impairment may arise from drilling and assay results or from management’s decision
to terminate the project. The recoverable amount is assessed by reference to the higher of ‘value
in use’ where a project is still expected to be developed into production and ‘fair value less cost to
sell’. No impairment has been booked in either this year, or the prior year. See Note 8 for further
discussion.
21
Aurum Mining Plc
Notes to the financial statements
continued
2 Accounting estimates and judgements (continued)
(b) Carrying value of investments
The Company regularly reviews its investments for impairment based on both quantitative and
qualitative criteria that include the extent to which cost exceeds market value, the duration of any
market decline and the financial position of and specific prospects for the issuer. See Note 9 for
further discussion.
(c) Exploration and evaluation expenditure
The Company has to apply judgement in determining whether exploration and evaluation
expenditure should be capitalised within intangible assets as an exploration and evaluation asset,
or expensed. The Company has a policy of capitalising all applicable exploration and evaluation
costs. Management therefore exercises judgement based on the nature, type and purpose of the
exposure incurred. The total value of such costs capitalised as at each of the reporting dates is set
out in Note 9.
(d) Share-based payments
In determining the fair value of share-based payments made during the period, a number of
assumptions have been made by management. The details of these assumptions are set out in
Note 14.
(e) Going concern
In assessing whether the Company is a going concern and confirming the basis of preparation for
the year a number of judgements have been made. The details of these judgments are set out in
Note 1.
(f)
Fair value measurement
A number of assets and liabilities included in the Company’s financial statements require
measurement at, and/or disclosure of, fair value. The fair value measurement of the Company’s
financial and non-financial assets and liabilities utilises market observable inputs and data as far as
possible. Inputs used in determining fair value measurements are categorised into different levels
based on how observable the inputs used in the valuation technique utilised are (the ‘fair value
hierarchy’):
●
●
●
Level 1: Quoted prices in active markets for identical items (unadjusted)
Level 2: Observable direct or indirect inputs other than Level 1 inputs
Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that
has a significant effect on the fair value measurement of the item. Transfers of items between levels
are recognised in the period they occur. The Company measures its available for sale financial assets
at fair value. See Note 15 for further information.
22
Aurum Mining Plc
Notes to the financial statements
continued
3 Operating loss
Operating loss is stated after charging:
2016 2015
£’000 £’000
Operating lease expense – 13
External auditors’ remuneration
– Audit fee for the annual audit of the Company and
financial statements 20 24
– Other taxation compliance services 3 3
The Company has a policy in place for the award of non-audit work to the auditors, which requires
the approval of the Audit Committee.
4
Staff costs 2016 2015
£’000 £’000
Wages and salaries 58 133
Social security costs (1) 12
Pension costs 2 6
59 151
Staffs costs comprise both Directors’ and staff salaries, fees and benefits and share based payments
and are shown gross.
The share-based payment charge for the year was £nil (2015: £nil).
The weighted average monthly number of employees, including Directors, employed by the Company
during the year was:
2016 2015
Administration 4 4
Total 4 4
23
Aurum Mining Plc
Notes to the financial statements
continued
5 Directors’ emoluments 2016 2015
£’000 £’000
Directors’ emoluments 33 133
Social security costs – 12
Pension costs – 6
Total Directors’ emoluments 33 151
The remuneration of Directors during the year was as follows:
Directors’ Pension
emoluments costs Total Total
2016 2016 2016 2015
£ £ £ £
Executive Directors
D Williams – – – –
C Eadie (resigned) – – – 91,473
Non-Executive Directors
M Jones (resigned) 625 – 625 15,000
S Finlay 17,496 – 17,496 17,496
H Kanabar 15,000 – 15,000 15,000
Total 2016 33,121 – 33,121 –
Total 2015 132,587 6,382 – 138,969
No share options were granted to the Directors during the year (2015: nil) and no share options were
exercised during the year (2015: nil). For further information, refer to the Directors’ report or Note14.
The highest paid Director received emoluments (excluding share based payments) totalling £17,496
(2015: £91,473).
Chris Eadie resigned from the board effective 20 March 2015 but continues to assist the Company as
a consultant on a part-time basis (Total salary 2016: £26,868). No other employment benefit payments
were made to Chris Eadie for the year ended 31 March 2016. In order to keep operating costs to a
minimum, David Williams has agreed not to take a salary until a transformational deal is completed.
M Jones was paid via J Cubed Ventures Ltd, a private service company.
S Finlay is paid via Mostop Ltd, a private service company.
H Kanabar is paid via Poonam & Roshni Ltd, a private service company.
Directors’ interests and share options are disclosed in the Directors’ Report.
In 2016 and 2015 key management personnel is considered to comprise of the Directors and Chris
Eadie as consultant.
24
Aurum Mining Plc
Notes to the financial statements
continued
6
Taxation
No current or deferred tax charge has arisen in the current year.
The Company has incurred tax losses for the year and a corporation tax charge is not anticipated.
At 31 March 2016, the Company had tax losses of £7.2m (2015: £7.1m) carried forward which can
be used against future profits. However, these losses are only recoverable against future profits, the
timing of which is uncertain and as a result no deferred tax asset is being recognized in relation to
these losses.
The total of potential deferred tax assets relating to tax losses which have not been recognised for in
the financial statements amount to £1.3m (2015: £1.4m).
Current taxation
The tax assessed for the year is different from the standard rate of Corporation tax in the UK. The
differences are explained below:
2016 2015
£’000 £’000
Loss before taxation (243) (317)
Loss at the standard rate of Corporation tax
in the UK of 20% (2015: 21%) (48) (67)
Effects of:
Expenses not deductible for tax purposes 12 6
Deferred tax asset not recognised 36 61
Current tax charge – –
The Company did not recognise any deferred tax assets or liabilities at 31 March 2016 or 2015.
The Directors believe that there have been no breaches of foreign tax regulations and that all necessary
provisions have been made in these accounts.
7
Loss per share
Basic loss per share is calculated by dividing the loss attributable to the ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year.
For diluted loss per share, the weighted average number of shares in issue is adjusted to assume
conversion of all the dilutive potential ordinary shares. The potential dilutive shares are anti-dilutive in
2015 and 2016 as the Company is loss making.
At the reporting date there were 3,950,000 (2015: 3,950,000) potentially dilutive ordinary shares.
Dilutive potential ordinary shares include share options and warrants.
2016 2015
Net loss attributable to equity holders of the parent: £’000 £’000
From total operations (243) (317)
2016 2015
Weighted average number of shares: Number Number
Weighted average number of shares 170,580,011 145,296,862
25
Aurum Mining Plc
Notes to the financial statements
continued
8
Intangible assets Gold
exploration
£’000
Cost
At 1 April 2015 899
Additions 27
At 31 March 2016 926
Net book value
At 31 March 2016 926
At 31 March 2015 899
At 31 March 2014 899
On 14 March 2011 the Company entered into a joint arrangement with Ormonde Mining plc and
since entering into the joint arrangement Aurum has a 56.5% (2015: 57.8%) interest in two permit
areas in the Zamora province (Pino) and a 51.4% (2015: 52.5%) interest in the two permit areas in
the Salamanca province (Cabeza and Peralonso). The Company has assessed that it holds joint control
over the licences, due to the fact that the key strategic decisions are made by the unanimous consent
of both parties. The joint arrangement was not structured through a separate entity, and is therefore
classified as a joint operation.
Under the terms of the joint operation, funding of the projects is now carried out on a pro-rata basis
by Aurum and Ormonde in line with each party’s interest in the various projects.
Given the challenging market conditions and after taking into account the available cash resources of
the Company the Board is not currently funding on a pro-rata basis to the gold projects. This has
resulted in a dilution of Aurum’s interest in these projects, which is expected to be further diluted over
time due to cash constraints. However, given the current low levels of activity by the joint operation
this dilution is not expected to result in a significant change in the interest currently held. The Board
will keep this situation under constant review and is looking at other ways of funding the joint
operation including strategic partnerships and corporate alliances.
The decision taken to not commit to future funding of the gold assets is an indicator of impairment
under IFRS 6. As a result, the Directors have reviewed the carrying value of the exploration assets and
consider them to be fairly stated and not impaired at 31 March 2016. Impairment has been assessed
through analysis of publically available technical reports, and sensitized market data, including gold
prices, which indicate a recoverable amount greater than cost. This analysis included evaluating the
potential decline in fair value as a result of reasonable falls in the worldwide gold price. Due to the
early stage of the project, there is naturally uncertainty over the recoverable amount, however the
Directors consider that the pre-production asset is fairly stated at cost, and should not be impaired.
The recoverability of the intangible assets is dependent upon future realisation through production or
disposal of the gold resources.
26
Aurum Mining Plc
Notes to the financial statements
continued
9
Investments Investment in Investment in
Morille Plymouth
Mining Minerals Ltd Total
£’000 £’000 £’000
Cost
As at 1 April 2014 64 – 64
Additions – 42 42
Impairment – (27) (27)
At 31 March 2015 64 15 79
Impairment (64) – (64)
Fair value gain – 27 27
At 31 March 2016 – 42 42
Net book value
At 31 March 2016 – 42 42
At 31 March 2015 64 15 79
Morille Mining
Following the disposal of an 80% stake in the Morille tungsten project to Plymouth in 2014, the
Company retained a 20% interest in the project through Aurum’s 20% shareholding in Morille
Mining SLU.
Given that the Company is unable to exert any operational influence over the Morille tungsten project,
the Directors have determined to account for the Company’s residual interest in the Morille project as
an Investment rather than as an Associate. The Directors consider that accounting for the asset as an
investment rather than an Associate is appropriate given the substance of the transaction and the
difference between the definitions of an associate and an investment under IFRS.
The investment is held at cost, as it is an investment in an equity instrument that does not have a
quoted market price in an active market and the fair value of which cannot be readily measured.
Impairment has been assessed through analysis of publically-available technical information regarding
the main licence area being explored by Morille. In addition, calculations of the implied market value
based on the market capitalisation of Plymouth have been made. Following Plymouth’s decision to
place the Morille tungsten project in Spain into hibernation due to very low tungsten prices and from
an assessment of these and other factors, the Directors have determined that the investment is fully
impaired.
Plymouth Minerals Limited
On 4 November 2014 the Company received 715,000 ordinary shares in Plymouth Minerals Limited
(ASX:PLH) listed on the Australian Securities Exchange as the deferred payment of €50,000 (£42,000)
worth of shares under the Morille project share purchase agreement, as final consideration for the
acquisition of the project. The share price on 31 March 2016 was AUS $0.10 (31 March 2015:
AUS $0.04) resulting in a fair value gain of £27,000 (2015: loss of £27,000).
27
Aurum Mining Plc
Notes to the financial statements
continued
10 Receivables 2016 2015
£’000 £’000
VAT recoverable 4 7
Prepayments 7 6
11 13
The fair value of receivables approximates their carrying value and none are overdue.
11 Convertible loan 2016 2015
£’000 £’000
Loan 50 –
The Company received a loan of £50,000 from David Williams, Chairman of Aurum. The loan is
considered a financial liability measured at amortised cost. The loan is unsecured, accrues no interest
and has no fixed repayment date. Additionally, the loan may be converted into ordinary shares of the
Company at the price at which equity in the Company is next issued.
Mr Williams’ participation in the convertible loan agreement constituted a related party transaction in
accordance with AIM Rule 13. The Independent Directors, having consulted with the Company’s
nominated adviser WH Ireland Limited, considered the terms of the transaction with David Williams to
be fair and reasonable insofar as its Shareholders are concerned.
The fair value of the loan is not materially different from the carrying value.
12 Trade and other payables 2016 2015
£’000 £’000
Current
Trade payables 31 47
Other taxation and social security 1 2
Accruals 35 40
67 89
The fair value of trade and other payables is not materially different from the carrying value.
28
Aurum Mining Plc
Notes to the financial statements
continued
13 Share capital
2015
£’000 £’000
2016
Authorised
200,000,000 Ordinary shares of £0.01 2,000 2,000
£0.01 ordinary shares £0.01 ordinary shares
Number £’000 Number £’000
2016
2015
Allotted, issued and fully paid
ordinary shares
At beginning of year 146,091,930 1,461 141,291,930 1,413
Issue of shares 25,758,356 258 4,800,000 48
At end of year 171,850,286 1,719 146,091,930 1,461
Share capital
The following issues of shares were undertaken in the year ended 31 March 2016:
On 15 April 2015, 25,758,356 new ordinary shares of 1p were issued by way of placing to new and
existing Shareholders at a price of 1p per ordinary share for a total cash consideration of £257,584.
David Williams, a long term Shareholder in the Company acquired 14,000,000 new Ordinary shares
taking his total holding to 50,083,994 ordinary shares which now represents 28.73% of the current
issued share capital of the Company. The Company received the payment of £140,000 in respect of
the placing in advance before the year end 31 March 2015 and before the shares were issued. The
Directors decided to account for this amount as equity, and consequently created a reserve in equity,
‘shares to be issued’, to record this amount. This amount was transferred to share capital following
the above placing.
David’s participation in the placing constitutes a related party transaction in accordance with AIM
Rule 13. The Directors, having consulted with the Company’s nominated adviser WH Ireland Limited,
consider the terms of the transaction with David Williams to be fair and reasonable insofar as its
Shareholders are concerned.
The following issues of shares were undertaken in the year ended 31 March 2015:
On 28 August 2014, 4,800,000 new ordinary shares of 1p were issued at 1.25p by way of placing, a
premium of 0.25p for a total cash consideration of £60,000.
Of these shares issued, 4,000,000 ordinary shares of 1p each were allotted to Mr David Williams
(through an intermediary company D. W. Pension Fund Ltd.). Mr Williams is a long term Shareholder,
and this issue took his total shareholding to 36,083,994 ordinary shares representing 24.7% of the
enlarged share capital. His participation in the placing constituted a related party transaction in
accordance with AIM Rule 13. The Independent Directors, having consulted with the Company’s
nominated adviser WH Ireland Limited, considered the terms of the transaction with D. W. Pension
Fund Ltd. to be fair and reasonable insofar as its Shareholders are concerned.
29
Aurum Mining Plc
Notes to the financial statements
continued
14 Share Options
The following options over ordinary shares remained outstanding at 31 March 2016:
Options Options Options Options Options
at issued exercised lapsed at First Final
1 April during during during 31 March Exercise Date of date of date of
2015 the year the year the year 2016 price grant exercise exercise
Options –
Directors:
M Jones 650,000 – – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
S Finlay 650,000 – – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
H Kanabar 650,000 – – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
Options –
Employees
and consultants:
C Eadie 2,000,000 – – – 2,000,000 3.5p 27/04/11 27/04/11 26/04/16
Total 3,950,000 – – – 3,950,000
The following options over ordinary shares remained outstanding at 31 March 2015:
Options Options Options Options Options
at issued exercised lapsed at First Final
1 April during during during 31 March Exercise Date of date of date of
2014 the year the year the year 2015 price grant exercise exercise
Options –
Directors:
M Jones 650,000 – – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
S Finlay 650,000 – – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
H Kanabar 650,000 – – – 650,000 3.5p 27/04/11 27/04/11 26/04/16
Options –
Employees
and consultants:
S Beardsmore 500,000 – – 500,000 – 3.0p 07/12/12 07/12/12 06/12/17
C Eadie 2,000,000 – – – 2,000,000 3.5p 27/04/11 27/04/11 26/04/16
Total 4,450,000 – – 500,000 3,950,000
S Beardsmore ceased to be an employee of the company on 30 September 2013 and his share options
lapsed six months after cessation.
The following illustrates the number and weighted average exercise prices (WAEP) of, and movements
in, share options during the year.
2016 2016 2015 2015
Number WAEP Number WAEP
Pence Pence
Outstanding at beginning of year 3,950,000 3.5 4,450,000 3.4
Issued – – – –
Exercised – – – –
Lapsed during the year – – 500,000 3.0
Outstanding at 31 March 3,950,000 3.5 3,950,000 3.5
Exercisable at 31 March 3,950,000 3.5 3,950,000 3.5
The expense recognised for share-based payments in respect of Employees, Directors and consultant
services received during the year ended 31 March 2016 was £nil (2015: £nil).
30
Aurum Mining Plc
Notes to the financial statements
continued
15 Financial instruments
The Company uses financial instruments, other than derivatives, comprising cash at bank and various
items such as trade and other payables that arise directly from its operations. The main purpose of
these financial instruments is to raise finance for the Company’s operations.
Categories of financial assets and financial liabilities:
2016 2015
£’000 £’000
Available-for-sale financial assets
Investment in Morille – 64
Investment in Plymouth Ltd 42 15
Loans and receivables
Cash and cash equivalents 45 106
Total financial assets 87 185
Financial liabilities at amortised cost
Convertible loan 50 –
Trade and other payables 67 89
Total financial liabilities 117 89
General objectives, policies and processes
The Board has overall responsibility for the determination of the Company’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Company’s Finance function. The Board receives monthly reports from
the Consultant (Chris Eadie) through which it reviews the effectiveness of the processes put in place
and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Company’s competitiveness and flexibility.
The main risks arising from the Company’s financial instruments are liquidity risk, credit risk, market
price risk, currency risk, and interest rate risk. Further details regarding these policies are set out
below:
Liquidity risk
The Company mainly finances its operations through the issue of equity share capital and is also
financed through a convertible loan which was issued during the year. The Company seeks to manage
financial risk, to ensure sufficient liquidity to meet foreseeable requirements and to invest cash
profitably at low risk.
The Company holds investments in bank deposits as a liquid resource to fund the projects of the
Company. The Company also hold shares in Plymouth Minerals Ltd (see Note 9), which are quoted on
the Australian Stock Exchange and considered to be readily realised into cash. The Company’s strategy
for managing cash is to maximise interest income whilst ensuring its availability to match the profile
of the Company’s expenditure. Liquidity risk is further managed by tight controls over expenditure.
31
Aurum Mining Plc
Notes to the financial statements
continued
15 Financial instruments (continued)
Market price risk
The Company holds some strategic equity investments in other companies where those complement
the Company’s operations (see Note 9). The Directors believe that the exposure to market price risk
from this activity is acceptable in the Company’s circumstances. The effect of a 10% increase in the
value of the listed equity instruments measured at fair value (i.e. the shares in Plymouth Minerals Ltd)
would have increased net assets, by £4,200. A 10% decrease in their value would have decreased net
assets by the same amount.
Maturity analysis of financial liabilities:
2016 2015
£’000 £’000
Less than 3 months 67 89
Less than 12 months 50 –
117 89
Credit risk
The Company’s credit risk is primarily attributable to the cash held on deposit at financial institutions.
It is the Company’s policy to only use recognised financial institutions for these deposits. The Company
does not have any trade receivables. Please also refer to going concern disclosures in the Report of the
Directors on pages 6 and 7.
Currency risk
The Company does not hedge its exposure of foreign investments held in foreign currencies. The
Company is exposed to translation and transaction foreign exchange risk and takes profits or losses
on these as they arise. The Company is continually reviewing its strategy towards currency risk.
Currency of net monetary asset
The net monetary assets of the Company are denominated as follows:
2016 2015
£’000 £’000
UK Pounds:
Cash and cash equivalents 45 106
Trade and other payables (66) (87)
Other taxation and social security (1) (2)
(22) 17
Interest rate risk
The Company’s exposure to changes in interest rates relates primarily to cash at bank. Cash is held
either on current or on short-term deposits at floating rates of interest determined by the relevant
bank’s prevailing base rate.
The Company has financed its operations through the issue of equity share capital and a convertible
loan.
The Company earned interest on its cash assets at rates between 0% and 0.50% (2015: 0% and
0.50%).
A movement of 0.5% in the interest rates is anticipated to result in a negligible movement on the net
cash balance for the current and prior period.
32
Aurum Mining Plc
Notes to the financial statements
continued
15 Financial instruments (continued)
Cash and cash equivalents
2016 2015
£’000 £’000
Floating interest rate 45 106
Capital disclosures
As described in note 13 and in the statement of changes in equity, the Company considers its capital
to comprise its ordinary share capital, share premium, available for sale reserve and accumulated
retained deficit as its capital reserves. In managing its capital, the Company’s primary objective is to
ensure its continued ability to provide a consistent return for its equity Shareholders through capital
growth. In order to achieve this objective, the Company seeks to maintain a sufficient funding base to
enable it to meet its working capital and strategic investment needs. In making decisions to adjust its
capital structure to achieve these aims through new share issues and convertible loan notes, the
Company considers not only its short-term position but also its long-term operational and strategic
objectives.
There have been no significant changes to the Company’s capital management objectives, policies and
processes in the year nor has there been any change in what the Company considers to be its capital.
Fair value disclosures
The fair values of the Company’s financial instruments are considered not materially different from the
book value. The investment in Morille is however impaired, as disclosed in Note 9. The investment in
Morille represents an equity instrument that does not have a quoted price in an active market. Fair
value information has not been disclosed in the accounts, as the fair value cannot be reliably
measured.
The company’s only financial assets and liabilities held at fair value is the available for sale financial
asset for the Plymouth shares, this is classified as level 1 financial instrument, by virtue of its shares
being publicly listed. The company has no level 2 and 3 financial instruments. There have been no
transfers during the year. Details of the fair value technique applied can be found in Note 9.
16 Financial commitments
The Company does not have any capital or contractual commitments at 31 March 2016 (2015: nil).
33
Aurum Mining Plc
Notes to the financial statements
continued
17 Related party transactions
Mr David Williams
On 15 April 2015, 25,758,356 new ordinary shares of 1p were issued to new and existing
Shareholders at a price of 1p per share raising £257,584 before expenses.
David Williams, a long term Shareholder in the Company acquired 14,000,000 new Ordinary shares
taking his total holding to 50,083,994 ordinary shares which represents 28.73% of the current issued
share capital of the Company. The Company received the payment of £140,000 in respect of the
placing in advance before the year end 31 March 2015 and before the shares were issued, as
explained further in Note 13. David’s participation in the placing constitutes a related party transaction
in accordance with AIM Rule 13. The Directors, having consulted with the Company’s nominated
adviser WH Ireland Limited, consider the terms of the transaction with David Williams to be fair and
reasonable insofar as its Shareholders are concerned.
The Company also received a loan for £50,000 from David Williams, Chairman of Aurum. The loan is
unsecured, accrues no interest and has no fixed repayment date. Additionally, the loan may be
converted into ordinary shares of the company at the price at which equity in the Company is next
issued.
In addition, David Williams purchased 1,000,000 shares on 11 February 2016 at an average price of
0.76 pence per share. Following this purchase, David Williams has a beneficial interest of 29.30% of
the current issued share capital of the Company.
Other than disclosed in Notes 5 and 13, there were no related party transactions for the Company
during the current and prior period.
18 Events after the reporting period
Details of significant changes in the state of affairs of the Company or events after the reporting
period are included within the Review of Activities Report on pages 3 and 4.
On 17 June 2016 the Company announced that it has raised £100,000 through a convertible loan (the
“loan”). The loan is unsecured, accrues no interest and is not repayable. The loan will be converted at
the price at which equity is next issued. If so converted, the loan providers are also entitled to a
warrant for every share they receive. Each warrant would be exercisable at 2 pence per share.
The loan will be used to provide on-going working capital for the Company.
David Williams, Chairman of Aurum, is providing £50,000 of the convertible loan finance. His
participation in the loan constitutes a related party transaction in accordance with AIM Rule 13. The
independent Directors, being the Directors other than David Williams, having consulted with the
Company’s nominated adviser WH Ireland Limited, consider the terms of the loan transaction with
David Williams to be fair and reasonable insofar as its shareholders are concerned. Mr Williams has a
beneficial interest of 29.30% of the current issued share capital of the Company.
On 21 July 2016, the Company announced that it has completed a subscription of 2,500,000 New
Ordinary Shares to a new strategic investor at a price of 1 pence per share to raise £25,000 before
expenses which will be used to fund working capital requirements.
In addition, the Company has granted 31,500,000 share options to subscribe for New Ordinary Shares
of 1 pence each in the Company to the new investor. The options are exercisable until 19 July 2017
and shall have an exercise price of 1 pence per share. There are no conditions attaching prior to the
vesting of the options.
The Company also has received an undertaking from the providers of the convertible loan on 17 June
2016 that this issue of these options will not trigger the conversion of their respective loans.
34
Aurum Mining Plc
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of Aurum Mining Plc (the “Company”) will be
held at 12.00 noon on 29 September 2016 at the offices of the Company’s solicitors, Gowling WLG (UK)
LLP, 4 More London Riverside, London SE1 2AU to consider and if thought fit to pass the following
resolutions, which in the case of resolutions 1 to 4 will be proposed as ordinary resolutions and in the case
of resolutions 5 and 6 will be proposed as special resolutions:
Ordinary Business
1.
To receive and adopt the financial statements of the Company for the year ended 31 March 2016
together with the directors’ report and auditors’ report thereon.
2.
3.
To re-elect Sean Finlay, who retires by rotation as a Director under article 89 of the Company’s articles
of association and, being eligible, offers himself for re-election as a Director.
To re-appoint BDO LLP as auditors to the Company until the conclusion of the next annual general
meeting of the Company and to authorise the Directors to fix their remuneration.
Special Business
4.
THAT the Directors be and are hereby generally and unconditionally authorised (in substitution for any
existing such authority) for the purposes of section 551 of the Companies Act 2006 (the “Act”) to
exercise all the powers of the Company to allot shares in the Company or grant rights to subscribe
for or convert any securities into shares (“Rights”) up to a maximum aggregate nominal amount of
£1,743,502.86, provided that this authority shall expire (unless previously revoked, varied or extended
by the Company in a general meeting) on the earlier of the conclusion of the next annual general
meeting of the Company or 31 October 2017, save that the Company may before such expiry make
an offer or agreement which would or might require shares to be allotted or Rights to be granted
after such expiry and the Directors may allot shares or grant Rights in pursuance of such offer or
agreement notwithstanding that the authority conferred hereby has expired.
5.
THAT (subject to the passing of Resolution 4 above) in accordance with section 570 and 573 of the
Act, the Directors be and they are hereby empowered (in substitution for any existing such powers)
to allot equity securities (as defined in section 560 of the Act) pursuant to the authority conferred by
the Resolution 4 above and/or sell ordinary shares held by the Company as treasury shares (“Treasury
Shares”) for cash as if section 561(1) of the Act did not apply to any such allotment or sale, provided
that this power shall be limited to the allotment of equity securities and the sale of Treasury Shares:
(a)
in connection with an offer of such securities by way of rights to holders of ordinary shares in
proportion (as nearly as may be practicable) to their respective holdings of such shares, but
subject to such exclusions or other arrangements as the Directors may deem necessary or
expedient in relation to Treasury Shares, fractional entitlements or any legal or practical problems
under the laws of any territory, or the requirements of any regulatory body or stock exchange;
(b)
otherwise than pursuant to sub-paragraph (a) above, up to a maximum aggregate nominal
amount of £1,743,502.86;
and such power shall expire (unless previously revoked, varied or extended by the Company in a
general meeting) on the earlier of the conclusion of the next annual general meeting of the Company
or 31 October 2017, save that the Company may, before such expiry allot equity securities or sell
Treasury Shares in pursuance of any such offer or agreement notwithstanding that the power
conferred hereby has expired.
35
Aurum Mining Plc
Notice of Annual General Meeting
continued
6.
THAT the Company be and is hereby generally and unconditionally authorised pursuant to section
701 of the Act to make market purchases (as defined by section 693(4) of the Act) on the London
Stock Exchange of ordinary shares of 1 pence each in the capital of the Company (“Ordinary
Shares”) provided that:
(a)
(b)
(c)
(d)
the maximum aggregate number of shares authorised to be purchased is 26,135,108 Ordinary
Shares;
the minimum price which shall be paid for the Ordinary Shares is 1 pence for each share, and
the maximum price (exclusive of expenses) which may be paid for such shares is five per cent.
above the average of the middle market quotations derived from the London Stock Exchange
Daily Official List for the five business days before the purchase is made;
unless previously renewed, varied or revoked, the authority hereby conferred shall expire on the
earlier of the conclusion of the next annual general meeting of the Company or 31 October
2017; and
the Company may, before such expiry, make a contract to purchase its own shares under the
authority hereby conferred which will or may be executed wholly or partly after the expiry of
such authority, and may make a purchase of its own shares in pursuance of such a contract.
By Order of the Board
Haresh Kanabar
Secretary
Registered Office:
22 Great James Street
London WC1N 3ES
Dated: 24 August 2016
36
Aurum Mining Plc
Notice of Annual General Meeting
continued
Notes:
1. A member entitled to attend and vote at the meeting is also entitled to appoint one or more proxies
to attend, speak and vote instead of him/her. The proxy need not be a member of the Company but
must attend the meeting to represent you.
2. Members may appoint more than one proxy provided each proxy is appointed to exercise rights
attached to different shares. You may not appoint more than one proxy to exercise rights attached to
any one share. To appoint more than one proxy, please contact the Company’s Registrars, Neville
Registrars on +44 (0) 121 585 1131.
3. A Form of Proxy is enclosed. To be valid, the Form of Proxy, together with a power of attorney or other
authority, if any, under which it is executed or a notarilly certified copy thereof, must be deposited at
the Company’s Registrars, Neville Registrars, Neville House, 18 Laurel Lane, Halesowen, West Midlands
B63 3DA 48 hours before the time fixed for the meeting (or adjournment thereof) excluding non-
working days.
4.
5.
In the case of a corporation, the Form of Proxy must be executed under its common seal or signed on
its behalf by a duly authorised attorney or duly authorised officer of the corporation.
In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy,
will be accepted to the exclusion of the votes of any other joint holders. For these purposes, seniority
shall be determined by the order in which the names stand in the register of members in respect of
the joint holding.
6. A vote withheld option is provided on the Form of Proxy to enable you to instruct your proxy not to
vote on any particular resolution. However, it should be noted that a vote withheld in this way is not
a “vote” in law and will not be counted in the calculation of the votes ‘For’ and ‘Against’ a resolution.
7. A corporation which is a member can appoint one or more corporate representatives who may
exercise, on its behalf, all its powers as a member provided that no more than one corporate
representative exercises powers over the same share.
8.
The Company, pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, specifies
that only those shareholders registered in the register of members of the Company as at 6.00 p.m. on
27 September 2016 shall be entitled to attend and vote, whether in person or by proxy, at the Annual
General Meeting, in respect of the number of ordinary shares in the capital of the Company registered
in their name at that time. Changes to entries in the register of members after 6.00 p.m. on
27 September 2016 shall be disregarded in determining the rights of any person to attend or vote at
the Annual General Meeting.
9. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy
appointment service may do so for the meeting and any adjournment(s) of it by using the procedures
described in the CREST Manual. CREST personal members, sponsored CREST members and CREST
members who have appointed a voting service provider(s) should refer to their CREST sponsor or
voting service provider(s) who will be able to take the appropriate action for them.
37
Aurum Mining Plc
Notice of Annual General Meeting
continued
10. To complete a valid proxy appointment or instruction using the CREST service, the CREST message (a
“CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK &
Ireland Limited’s specifications and must contain the information required for such instructions, as
described in the CREST Manual. The message, regardless of whether it constitutes the appointment
of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order
to be valid, be transmitted and received by Neville Registrars (Participant ID: 7RA11) 48 hours (save
that weekends and any bank holiday within the UK shall not count in the 48 hour period) before the
time fixed for the meeting (or adjournment thereof) excluding non-working days. The time of receipt
of the instruction will be the time (as determined by the timestamp applied to the message by the
CREST Applications Host) from which Neville Registrars is able to retrieve the message by enquiry to
CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies
appointed through CREST should be communicated to the appointee through other means.
11. CREST members and, where applicable, CREST sponsors or voting service providers should note that
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will apply to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting service provider(s) to ensure that his CREST
sponsor or voting service provider(s) take(s) the necessary action) to ensure that a message is
transmitted by means of the CREST system by a particular time. CREST members and, where
applicable, their CREST sponsors or voting service provider(s) should refer to the sections of the CREST
Manual concerning practical limitations of the CREST system and timings.
12. The Company may treat a CREST Proxy Instruction as invalid as set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
13. Completion and return of a Form of Proxy will not preclude members from attending or voting in
person at the meeting if they so wish.
14. As at 24 August 2016, the total issued share capital of the Company comprises 174,350,286 ordinary
shares of 1 pence each (“Ordinary Shares”). The Company does not hold any shares as treasury
shares. Accordingly, the total number of Ordinary Shares in the Company with voting rights is
174,350,286 and this figure may be used by shareholders as the denominator for calculations to
determine if they have a notifiable interest in the Company under the Disclosure Guidance and
Transparency Rules, or if such interest has changed.
38
Aurum Mining Plc
Notice of Annual General Meeting
continued
Explanatory Notes to the Notice of Annual General Meeting
The notes below given an explanation of the proposed ‘special business’ resolutions to be considered at
the annual general meeting to be held at 12.00 noon 29 September 2016 at the offices of the Company’s
solicitors, Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU. Resolution 4 is to be
proposed as an ordinary resolution; this means that for the resolution to be passed, more than half of the
votes cast must be in favour. Resolutions 5 and 6 will be proposed as special resolutions; this means that
for each of those resolutions to be passed, at least three-quarters of the votes cast must be in favour.
Resolution 4
The current authority of the Directors to issue shares will expire at the Company’s 2016 Annual General
Meeting. Resolution 4, which is to be proposed as an ordinary resolution, is to provide the Directors with
authority to issue new Ordinary Shares up to an aggregate nominal value of £1,743,502.86 representing
100 per cent. of the current issued share capital of the Company.
This authority will expire on the earlier of the next annual general meeting of the Company or 31 October
2017.
Resolution 5
The current power of the Directors to issue shares for cash on a non pre-emptive basis will expire at the
Company’s 2016 Annual General Meeting. Resolution 5, which is to be proposed as a special resolution,
is to approve a disapplication of statutory pre-emption rights in respect of the issue of new Ordinary Shares
or sale of treasury shares for cash limited to allotments or sales in connection with pre-emptive offers
(subject to such exclusions as the Directors deem necessary or expedient) or otherwise up to an aggregate
nominal value of £1,743,502.86 representing 100 per cent. of the current issued share capital of the
Company.
The Directors have no current intention to issue shares pursuant to this power but consider that it is
prudent to have this power so as to be able to act at short notice if circumstances change. This power will
expire on the earlier of the next annual general meeting of the Company or 31 October 2017.
Resolution 6
This resolution, which is to be proposed as a special resolution, is to authorise the Company to purchase
up to 26,135,108 Ordinary Shares in the market, representing approximately 14.99 per cent. of the current
issued ordinary share capital of the Company, at a price not less than the nominal value of the Ordinary
Shares (being one pence) and not more than 5 per cent. above the average of the middle market
quotations of the Company’s Ordinary Shares derived from the London Stock Exchange Daily Official List
for the five business days before the purchase is made.
The Company may either cancel any shares that it purchases under this authority or transfer them into
treasury (and subsequently sell or transfer them out of treasury or cancel them). This authority will expire
on the earlier of the next annual general meeting of the Company or 31 October 2017. The Directors have
no present intention of making such purchases, but consider that it is prudent for the Company to have
this authority so as to be able to act at short notice if circumstances change.
39
Aurum Mining Plc
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