240669 Orogen Gold plc - Annual Report 2015 - Cover 04/05/2016 13:54 Page 1
Orogen Gold plc
Annual Report
for year ended
31 December 2015
Contents
Company Overview
Chairman’s Statement
Strategic Report
Corporate Governance
Board of Directors
Group Directors’ Report
Consolidated Financial Statements
Independent Auditors’ Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Company Statement of Financial Position
Company Statement of Cash Flows
Company Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Company Information
Page
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41
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Annual Report 2015
CHAIRMAN’S STATEMENT
An initial bull run in gold at the beginning of 2015 quickly ran out of steam and by the end of the
year it was trading around its lowest level since late 2009, with other commodities being hit even
harder. However, we saw welcome signs of a recovery in the price of gold in late 2015 and
continuing into 2016, with the bullion price rallying some $200.
With the uncertainty in the price of gold, we sought to conserve cash reserves as much as possible
and to focus our expenditure on the promising Mutsk gold project in Armenia. We also welcomed
Mr Colin Bird to the Board as CEO, with a view to positioning the Company to take advantage of
project opportunities resulting from the recent difficult market conditions.
Mutsk, Armenia
The development of the mining industry in Armenia was given a boost towards the end of 2015 after
our neighbour, Lydian International announced $325m of construction financing for its Amulsar Gold
mine just north of our Mutsk project, with construction expected to commence in 2016. Our
optimism on Mutsk was given a further boost early in the year after an independent geological
review concluded that this is a large hydrothermal system of which only a small portion has been
explored to date. The report added that 2014 drilling indicated potential for higher grade
mineralized zones.
Mutsk is proving to be a potentially large, shallow, low-medium grade gold discovery, with some
similarities to the Amulsar project, requiring further exploration and drilling to bring it to resource
stage. Following thorough review and modelling of the deposit we recommenced drilling in the third
quarter and succeeded in locating some higher than average grades as well as demonstrating that
the gold zones remain open in several directions.
Deli Jovan, Serbia
As indicated in the Interim Report, continuity of the gold-bearing veins at Deli Jovan has proven
difficult to establish and further detailed infill drilling would be required to demonstrate continuity.
With significantly more encouraging results from the Mutsk project, Orogen, together with our
partners at Deli Jovan, sought to find a new partner to take on the work on the project. Given the
weak commodity market, no suitable partner could be found so the decision was made to withdraw
from the project.
Corporate
In the third quarter, highly experienced mining engineer Colin Bird accepted our invitation to
become Chief Executive Officer and Ed Slowey assumed the role of Operations Director allowing him
more time to manage the extensive amount of data on our projects and possible new targets.
Despite continuing difficult stock market conditions we also managed to bulk up our cash reserves
with a £450,000 placing in the third quarter.
Post Year End
Recently we announced the expansion of our portfolio with an exclusive agreement signed with AIM
listed Galileo Resources where Orogen has the right to earn-in to a 51% stake in Galileo’s Silverton
gold-silver project in Nevada by spending $400,000 within 18 months. This project compliments the
Mutsk property and provides investors with a balanced gold/exploration portfolio.
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Annual Report 2015
CHAIRMAN’S STATEMENT
Outlook
A steady rise in the gold price so far this year is encouraging though as we saw last year that
situation can turn very quickly. As such we are determined to utilise our cash reserves in the most
efficient way possible while at the same time growing our understanding of our high potential
projects on both sides of the Atlantic.
______________
Adam Reynolds
Chairman
Date: 6 May 2016
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Annual Report 2015
STRATEGIC REPORT
STRATEGY AND OBJECTIVES
The principal activity of Orogen Gold plc (“Orogen” or the “Company”) is the development of mineral
exploration and production projects, with an emphasis on gold exploration and project
development. Orogen’s strategy is to acquire prospective early-stage growth opportunities at a low
entry cost. The three steps in the Orogen strategy are to:
(1) Identify and secure low entry cost gold projects,
(2) Undertake an efficient cost controlled programme of project evaluation and appraisal,
(3) Move to establish gold resources at an early stage and/or seek a mining partner to take the
project forward towards production.
Orogen currently operates the Mutsk Gold Project (“Mutsk”), which is located in the Syunik Province
in southern Armenia, 210km southeast of the capital city Yerevan. Orogen has an exclusive Joint
Venture agreement with Georaid CJSC (“Georaid”), an Armenia registered company, to earn an 80%
interest in Mutsk by incurring a total of US$2.5m in exploration expenditure on the project by the
end of August 2016. Orogen’s work to date at Mutsk has delineated a gold deposit in two zones
within a 2.5km x 1km area of hydrothermal alteration. Further drilling and follow-up work is required
to bring the project to resource status.
In April 2016, the Company signed a term sheet with Galileo Resources plc to earn a minimum 51%
interest in the Silverton gold-silver project in Nevada, USA (“Silverton”). Orogen will focus initially on
drilling a shear zone that may contain high grade gold and silver deposits, while also reviewing the
potential for large, lower grade gold and silver resources within the wider property area.
REVIEW OF BUSINESS
Mutsk Gold Project
Orogen has discovered a new, low-sulphidation epithermal gold deposit through its exploration at
Mutsk. The alteration and pyrite mineralisation ‘footprint’ is substantial, covering an area of at least
2.5km x 1km. This confirms that there has been a large hydrothermal system operating at Mutsk.
Gold mineralisation discovered so far appears to be focussed on a north-south trending structure,
which locally contains high grades up to 10g/t Au. However, the bulk of the gold occurs at lower
grades within hydrothermally altered and brecciated andesitic volcanics peripheral to this structure.
So far two distinct gold-bearing zones have been identified covering a minimum strike length of
550m. The intervening area between the zones appears relatively unaltered and unmineralised, with
probable cross-cutting faulting.
The occurrence of gold in several distinct zones within the overall target area is quite typical for such
deposits and the nearby Amulsar deposit shows similar characteristics. Amulsar now has a total
resource of 5Moz Au and targeted production of 200,000 ounces annually with an average grade of
0.78g/t Au. Lydian International plans to commence construction at Amulsar in Spring 2016 – this
will represent the first new gold mine development in Armenia under the current mining
regulations.
At Mutsk, gold grades within the wider mineralised sections generally range from 0.5-2.0g/t,
averaging close to 1g/t Au, with some higher grade intervals – see examples from Table 1 below -
including holes 46 and 47 from the 2015 drilling programme. Many of the intervals are from shallow
depths.
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Annual Report 2015
STRATEGIC REPORT
Table 1 - Mutsk diamond drilling - selected gold assay intervals*
Hole No.
Hole direction
From (m) To (m)
Interval (m)
OG13-01
Vertical
37.00
48.00
OG14-25
-50 degrees to E
108.00 132.00
OG14-27
-50 degrees to E
12.00
72.00
incl.
19.00
29.00
OG15-46
-50 degrees to E
29.00
50.00
OG15-47
-50 degrees to E
20.00
42.40
incl.
and
20.00
26.20
36.00
43.00
11.00
24.00
60.00
10.00
21.00
22.40
6.20
7.00
Au
g/t
5.56
1.25
1.21
3.11
2.68
1.08
2.17
1.53
* Downhole intervals reported - true widths to be confirmed; OG13-01 may be drilled along
a high-angle structure
The 2015 drilling programme succeeded in confirming potentially significant extensions to the
previously discovered gold zones. In the northern zone, OG15-46 provided lateral dimension to the
gold intercepts on profile 3950N, as well as intersecting higher than average grades. In the main
zone, OG15-47 demonstrated that alteration and gold mineralisation continues to the south where it
remains open. OG15-48 confirmed extension of the main zone to the east, beyond any hole
previously drilled. While the intercepts in this hole were limited in scale and grade, this could
represent an important continuation of the target zone to the east, beyond what had previously
been understood to be a north-south trending boundary structure.
Encouragingly, an initial core sample tested by SGS Mineral Services for gold deportment in 2015
suggested that the gold is potentially recoverable by standard processes.
Deli Jovan Gold Project
It has been concluded that the individual gold-bearing veins at Deli Jovan, while high grade in places,
are not sufficiently continuous to be amenable to economic evaluation and mining at current gold
prices. The exploration data was reviewed by several interested parties during 2015 with a view to a
farm-in or purchase arrangement, but no firm proposal was forthcoming. Orogen considers that it
has better options available to it at Mutsk and elsewhere and therefore it has been decided to
terminate the project and relinquish the exploration permit.
Financial
The loss for the year amounted to £890,000 (2014: £1,859,000). The loss for the year comprises an
impairment charge of £534,000 (2014: £1,318,000), general and administrative expenses of
£356,000 (2014: £548,000), share based payment charge of £5,000 (2014: nil) and finance income of
£5,000 (2014: £7,000). The impairment charge is as a result of a review performed on the carrying
value of the exploration and evaluation assets related to the Deli Jovan Gold Project.
FUTURE DEVELOPMENTS
Silverton, Nevada
In April 2016, Orogen Gold, announced that it had signed an exclusive Term Sheet with Galileo
Resources Plc, a UK AIM-listed company, covering a highly prospective epithermal gold-silver project
at Silverton in Nevada, USA, which is one of the best-endowed gold districts in the world.
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Annual Report 2015
STRATEGIC REPORT
Orogen will have an exclusive right to earn an initial 51% interest in the Silverton project over the
6km² claim area through exploration spend of US$400,000 over 18 months. Subsequently the
Company can earn an additional 24% interest in the project through an additional exploration spend
of US$1.5 million over a further 30 month period.
Based on analogy with other gold-silver deposits in the Nevada region, the project has potential for
discovery of zones of high grade structurally-hosted gold-silver mineralisation and/or a large, low
grade, open-pittable deposit.
The property is located in Nye County in the Basin and Range structural province of east-central
Nevada, with ready access from the Ely-Tonopah highway. Mineralization and hydrothermal
alteration at Silverton occurs in narrow, steep-to-shallow dipping veins and horizons, as well as
disseminated in porous and permeable rhyolite tuffs. Surface rock chip sampling shows widespread
low-order gold mineralisation over several square kilometres. Historic non-core drilling at Silverton
also cut extensive low-grade gold intervals, much of it at shallow depths. However, several zones in
excess of 1g/t Au were intersected, such as 15.24m @ 1.05g/t Au (hole 88-13), 7.62m @ 2.29g/t
(hole S-3), 10.66m @ 1.10g/t Au (hole S-11) and 1.52m @ 5.97g/t Au (hole S-4).
In addition, in the south of the property, a one kilometre north-south zone along the Silverton Shear
with a 0.1-1.5g/t Au anomaly at surface remains untested by drilling. Vertical drill holes marginal to
the shear reportedly returned several gold and silver-mineralized intervals, including 10.67m @ 1g/t
Au (hole 81-10) from 79.2-89.9m depth. Shallow holes 81-12 and 81-13 also both bottomed in gold
mineralisation. In addition, several strong silver intercepts are recorded up to 604g/t Ag over 1.52m
from 18.29m to 19.81m depth in hole 81-12 and 280g/t Ag over 3.04m from 1.52m to 4.57m depth
in hole 81-5. Small scale mining was carried out here from 1930 to 1937 and in 1953. Total
production for the district is reported as <100,000oz silver, <2,000oz gold and <1 ton of antimony.
The Silverton Shear Zone represents a particular target of interest to Orogen. The Company plans to
complete due diligence and to prepare a programme of drilling of angled holes to test the shear and
vein system for high grade gold-silver beneath and along strike from the workings.
Mutsk Gold Project
Orogen will continue to advance the Mutsk project, with the aim of completing earn-in to an 80%
interest in the property during 2016. The work plan proposed for 2016 includes further drilling to
extend the footprint of the known mineralisation as a step towards building an initial mineral
resource. Particular attention will focus on the southern and eastern margins of the main gold zone
which currently remain open. Further drilling will also seek out pockets of higher grade gold,
including extensions to the OG15-46 intercept in the northern zone.
Deli Jovan Gold Project
It has been concluded that the individual gold-bearing veins at Deli Jovan, while high grade in places,
are not sufficiently continuous to present an economic mining opportunity at current gold prices.
The exploration data was reviewed by several interested parties during 2015 with a view to a farm-in
or purchase arrangement, but no firm proposal was forthcoming. Orogen considers that it has better
options available to it and therefore it has decided to terminate the project and relinquish the
exploration permit.
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Annual Report 2015
STRATEGIC REPORT
KEY PERFORMANCE INDICATORS
The key indicators of performance for the Group is its success in identifying, acquiring and
developing and divesting of investment in exploration projects so as to create shareholder value. The
Group carries out its operations by way of execution of operational plans that are approved and
budgeted in advance by the Board. Operational progress is reviewed by the Board on a regular basis
and actual costs are compared to budgets.
Control of bank and cash balances is a priority for the Group and these are budgeted and monitored
closely to ensure that the Group maintains adequate liquidity to meet financial commitments as
they arise. At 31 December 2015 the Group held £921,000 of cash resources.
The Company initially secured an exclusive option to earn-in the Mutsk Gold Project in January 2013
and has subsequently signed a full joint venture earn-in agreement in February 2014. During the
current year the Company incurred £266,000 of exploration costs on Mutsk. The Company remains
on track to complete the project earn-in by incurring US$2.5m of exploration expenditure on the
project by 20 August 2016. At year-end 2015, approximately 89% of qualifying earn-in expenditure
has been incurred.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group considers that the principal risks to the achievement of its business plans are as follows:
Operational
In common with other businesses operating in gold exploration, the Group's activities are
speculative and are inherently subject to a high degree of risk.
The Group's operational work involves geological exploration and the implementation of geological
work programmes. Interpretation of the results of these programmes is dependent upon
judgements and assessments that by their very nature are speculative; these interpretations are
applied in designing further work programmes to which the Group can commit significant resources.
Work programmes often involve excavation of former mine workings, drilling operations and other
geological work that present significant engineering challenges which are subject to unexpected
operational problems. The actual cost of programmed operations can vary significantly from planned
levels as a result of unexpected issues arising.
Climate
The Group's activities take place in remote locations that can be subject to severe climate events,
particularly during the winter season. Severe winter weather can cause delays in implementation of
planned programmes and can have cost consequences in recovering from damage caused by
climatic events.
Political, economic, legal, regulatory and social
The Group operates in different countries where political, economic, legal, regulatory and social
uncertainties are potential risk factors. The Group has restricted its activities to Europe and the USA
where such risks could be considered to be less than in many developing countries in other parts of
the world.
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Annual Report 2015
STRATEGIC REPORT
Tax risk
The Group endeavours to be fully tax compliant and to manage its tax affairs efficiently in every
jurisdiction in which it operates. In a complex and ever changing taxation environment, some
uncertainty is inherent in estimating the Group’s liabilities. The Group is exposed to changes in
legislation and interpretation of existing policies across the countries in which operations take place.
The Company exercises judgement in assessing the required level of provision for taxes arising.
Organisational
The Group is dependent on the experience and skills of the Directors and senior management to
successfully execute its strategy; the loss of such key contributors would present a risk to the
business. Staffing levels and development of business processes and policies are kept under regular
review to ensure that they are appropriate and adequate for the scale and growth of the Group's
business.
Financial
The Group’s projects are at an early stage and currently do not generate any cash flow to support
the exploration activities. The valuation and future earnings of the Company are exposed to
movements in the market price of gold which is sold in US$. Orogen is also subject to exchange rate
risk with the Company’s accounts in GBP while the Company’s projects require funding in US$. The
operating entities of the projects to which Orogen has earn-in agreements incur substantial costs in
Armenian Dram and in US$.
Insurance
The Group has in place insurance protection, including a directors and officers liability policy, to
insure against risks of loss where management deems appropriate and cost effective; however in
some cases risks cannot be effectively covered by insurance and the cover in place may not be
sufficient to cover the extent of potential liabilities.
Health and safety
Health and safety of all those working in and visiting the Group's installations is a priority. The
Group's operations can take place in dangerous environments particularly where underground
mining and exploration activities are being pursued. The Group has in place a comprehensive health
and safety policy alerting all concerned to the risks involved and to the required precautions that
staff and visitors to the Group’s operations must take. Staff and authorised visitors are only
permitted access to underground facilities when safety inspection has been completed and
certificates issued by the appropriate and competent authority.
Environment and community
The Company recognises its social responsibilities and seeks to adopt the best contemporary
practice applicable to each country and region of operation. To ensure this standard is met the
Company aims to:
• plan and conduct exploration activities in a manner that complies with legislation pertaining
•
to the protection of the environment and employees;
in the absence of legislation, apply best contemporary practice relating to the protection of
the environment;
• undertake internal environmental reviews associated with operational fieldwork;
•
• engage in research to study the impact of mining activities on the locality and implement
train staff to apply best contemporary practices;
technologies that are environmentally friendly;
• participate in the development of environmental legislation to ensure a balance is attained
between protecting the environment and developing practical laws;
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Annual Report 2015
STRATEGIC REPORT
•
inform government, employees, local communities and other stakeholders of our activities,
and encourage joint venture partners and suppliers to adopt the principles of this statement.
_________________
Ed Slowey
Director
Date: 6 May 2016
_____________________
Alan Mooney
Director
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Annual Report 2015
BOARD OF DIRECTORS
Biographical details of the Directors
Adam Reynolds – Non-Executive Chairman
Adam began his career as a stockbroker before moving into investor relations. In 2000, he
established Hansard Group plc, a financial PR firm, admitting its shares to trading on AIM in
November 2000, before jointly leading a management buy-out of the business in 2004. Adam is also
a non-executive director of EKF Diagnostics plc, Optibiotix Health plc, Premaitha Health plc, Verdes
Management plc and HubCo Investments plc and a director of Autoclenz Holdings Limited.
Colin Bird – Chief Executive Officer
Colin Bird is a chartered mining engineer with extensive multi-commodity mine management
experience in Africa, Europe, Latin America and the Middle East. He has been involved in a number
of public listings in the UK, Canada and South Africa, including as founder of Kiwara plc which
discovered the large Kalumbila copper project in Zambia, which was sold to First Quantum Minerals
Ltd in 2009 for US$260 million.
Ed Slowey – Operations Director
Ed Slowey has worked throughout his career as an economic geologist in the minerals sector. Apart
from his role with Orogen Gold, he was previously responsible as Managing Director of Silvrex
Limited for the acquisition and initial gold discovery at the Dalafin project in Senegal and also acted
as technical consultant to Stratex International Plc on the same project. He was attached for several
years to the CSA Consultancy Group working out of London and Dublin as Project Manager
responsible for independent review, valuation and due diligence in mining and exploration, covering
base metals, bulk commodities, precious metals and diamonds in Europe, Africa, Asia and America.
Work included completion of Competent Person’s Reports and 43-101 independent reports for the
AIM, ISDX and TSX markets. Other roles undertaken in a consultancy capacity include Exploration
Manager, Russia for AIM-listed Eurasia Mining Plc, as well as minerals project management through
feasibility studies, including at the giant Sukhoi Log gold deposit in Siberia (>12Moz). He has also
worked in the Balkans on a range of minerals projects, primarily in Macedonia and Kosovo.
Previously, he managed the Irish exploration arm of Rio Tinto over a 12-year period, focussing on
base and precious metals in carbonate, volcanic and metamorphic terrain. This work led to the
discovery of the small, high-grade Cavanacaw gold deposit in Northern Ireland. Prior to that, he
worked as an exploration geologist in Ireland for a Canadian junior company and as an underground
mine geologist at the world-class Navan zinc-lead deposit. Ed holds a geology degree from University
College, Dublin and is a professional member of the Institute of Geologists of Ireland and the
European Federation of Geologists.
Alan Mooney – Finance Director
Alan Mooney has worked in the natural resource sector since 2001. He has worked with Fastnet Oil
& Gas Plc, Cove Energy Plc, Tiger Resource Finance plc, GoldQuest Mining Corp, Rathdowney
Resources Limited and Aventine Resources Plc. He was previously divisional CFO at Sonae SA,
Portugal’s largest commercial group. Prior to that he worked with Continental AG the German tyre
manufacturer, and was Finance Director of their operations in the UK and in Portugal. He also
worked as Head of Group Accounting in Mergers and Acquisitions at Continental AG’s headquarters
in Hanover, Germany and formally as Chief Accountant at their Irish tyre manufacturing plant. He
trained with PWC in Dublin and is a Chartered Accountant and MBA.
Michael Nolan – Non-Executive Director
A director since 2010, Michael Nolan is a Chartered Accountant having worked in practice with
Deloitte in Dublin. He is currently CFO and a Director of Discover Exploration Limited an international
oil and gas exploration company with operations in East Africa and New Zealand. From 2009 to 2012
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Annual Report 2015
BOARD OF DIRECTORS
he was a Director and a member of the management team of Cove Energy plc which was sold to
PTTEP of Thailand in August 2012. He acts as a non-executive director of Vancouver based,
Rathdowney Resources Limited, a private natural resource company operating in Europe and
supported by the Hunter Dickinson group and listed on TSX-V. He is also a Director of AIM quoted
companies, Tiger Resource Finance plc and Fastnet Oil & Gas plc. He acted as chief executive officer
of AIM listed, mining company, Minmet plc from 1999 to 2007. He also serves on the Board of
several resource exploration and investment companies.
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Annual Report 2015
GROUP DIRECTORS’ REPORT
The Directors present their report and the consolidated financial statements for the year ended 31
December 2015.
Results and dividends
The Group loss after tax for the year ended 31 December 2015 amounts to £890,000 (2014:
£1,859,000). The Directors are not recommending payment of a final dividend for the year (2014
£nil).
Directors
The Directors of the Company are:
Adam Reynolds
Colin Bird
Ed Slowey
Alan Mooney
Michael Nolan
Colin Bird was appointed as Chief Executive Officer and a Director of the Company on 30 September
2015. On the same date Anthony Venus resigned from the Board.
Under the terms of the articles of association all Directors must retire by rotation every three years
and may seek re-election to the Board at the Annual General Meeting of the Company. The articles
also provide for one-third of the Directors to retire by rotation. All new Directors appointed since the
previous Annual General Meeting must seek re-election at the next Annual General Meeting in order
to ratify their appointment to the Board by the members.
Michael Nolan and Ed Slowey retire from the board by rotation and offers themselves for re-election
at the next Annual General Meeting of the Company. Colin Bird as a new Director appointed since
the previous Annual General Meeting is seeking re-election at the next Annual General Meeting.
Shares and listing
The Company's ordinary shares are listed on the AIM of the London Stock Exchange (ticker: ORE.L).
Details of the nominated advisor and brokers are presented on the Company Information at the end
of this annual report. The closing mid-price of the Company's shares at 31 December 2015 was 0.03
pence (2014: 0.05 pence).
Substantial shareholdings
As at 21 March 2016 the following held 3% or more of the share capital of the Company:
Rank
1
2
3
4
5
6
7
8
Shareholder
Jim Nominees Limited
HSDL Nominees Limited
Barclayshare Nominees Limited
Hargreaves Lansdown (Nominees)
TD Direct Investing Nominees
Investor Nominees Limited
Fitel Nominees Limited
Ed Slowey
1 Based on 5,507,669,337 ordinary shares at 21 March 2016
No of shares at
21 March 2016
1,507,804,574
539,843,767
456,079,890
332,647,188
312,561,781
243,644,706
227,500,000
165,896,071
% Issued
Capital1
27.38
9.80
8.28
6.04
5.68
4.42
4.13
3.01
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Annual Report 2015
GROUP DIRECTORS’ REPORT
Corporate governance
The Directors are committed to maintaining a high standard of corporate governance. The Quoted
Companies Alliance Code (“QCA Code”) adopts key elements of the UK Corporate Governance Code,
current policy initiatives and other relevant guidance and then applies these to the needs and
particular circumstances of small and mid-size quoted companies on a public market. Focusing on 12
principles and a set of minimum disclosures, the QCA Code encourages companies to consider how
or whether they should apply each principle to achieve good governance and provide quality
explanations to their shareholders about what they have done. Orogen Gold’s application of the
QCA code is detailed on the Company’s website: www.orogengold.com.
Remuneration policy
The Board has established a remuneration committee. The Remuneration Committee comprises of
Adam Reynolds as Chairman and Michael Nolan who review the performance of the executive
Directors and determine their terms and conditions of service, including their remuneration and the
granting of options, having due regard to the interests of shareholders.
The Remuneration Committee meets no less than once every year.
Other than the Directors of the Group, the Group has no employees. Operational services are
provided by competent suppliers on a contract basis the terms of which are negotiated in advance
and approved by the executive Directors.
Directors’ remuneration
Details of emoluments received by Directors of the Company for the year ended 31 December 2015
are as follows:
Ed Slowey
Adam Reynolds
Alan Mooney
Michael Nolan
Anthony Venus
Colin Bird
Total
Base
emoluments
£
79,750
29,625
21,875
21,875
10,500
5,000
168,625
Contracted
notice
payments
£
—
—
—
—
3,375
—
3,375
2015 Total
£
79,750
29,625
21,875
21,875
13,875
5,000
172,000
2014 Total
£
112,500
57,500
85,000
47,500
17,177
—
319,677
Directors and their interests
The Directors of the Company held the following beneficial interests in the shares and share options
of Orogen Gold plc at 31 December 2015 and at the date of this report:
Share Options
Ed Slowey
Michael Nolan
Alan Mooney
Colin Bird
Adam Reynolds
Ordinary
Ordinary
shares of
shares of
£0.0001 each
£0.0001 each
165,896,071 40,000,000
135,110,907 40,000,000
129,610,907 40,000,000
100,000,000 180,000,000 0.035p
87,040,580
Option
exercise
price
0.60p
0.60p
0.60p
40,000,000
0.60p
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Annual Report 2015
GROUP DIRECTORS’ REPORT
The share options exercisable at £0.006 expire on 15 February 2021. The share options with an
exercise price of £0.00035 are subject to performance based vesting conditions over the 7 year
period to 30 September 2022.
Going concern
After making appropriate enquires, the Directors consider that the Company has adequate resources
to continue in operational existence for the foreseeable future. As part of their enquiries the
Directors have reviewed cash forecasts for the company’s operations for the 12 months from the
date of approval of the financial statements. The Company has adequate cash to cover its corporate
overheads and management costs over this period. The Group has earn-in options on exploration
projects in Armenia and the USA. The Group acts as operator on its projects, which gives it flexibility
in managing the Group’s resources and exploration programmes.
Events after the reporting period
Further information on events after the reporting period is set out in note 19.
Principal risks and uncertainties
The principal risks and uncertainties of the business are discussed in the Strategic Report and in note
20.
Directors' responsibilities
The Directors are responsible for preparing the Group Directors' report and financial statements in
accordance with applicable law and International Financial Reporting Standards.
Company law requires the Directors to prepare financial statements for each financial period. Under
that law the Directors have elected to prepare the financial statements in accordance with
International Financial Reporting Standards as adopted for use in the European Union that give a
true and fair view of the state of the affairs of the Group and the Company and of the profit or loss
of the Group for that period.
In preparing these financial statements the Directors are required to:
• Select suitable accounting policies and apply them consistently; and
• make judgements and estimates that are reasonable and prudent; and
•
state whether the Company financial statements have been prepared in accordance with
IFRS 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 which disclose with
reasonable accuracy at any time the financial position of the Company and to enable them to ensure
that the financial statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website.
Orogen Gold plc
P a g e | 14
Annual Report 2015
GROUP DIRECTORS’ REPORT
Auditors
The Board are recommending Jeffreys Henry LLP for re-appointment as auditors of the Company.
Jeffreys Henry LLP have expressed their willingness to accept this appointment and a resolution re-
appointing them will be submitted to the forthcoming Annual General Meeting.
Disclosure of information to the auditors
Each Director confirms that, so far as that he is aware, there is no relevant audit information of
which the Company’s auditors are unaware and he has taken all the steps that he ought to have
taken as a director in order to make himself aware of any relevant audit information and to establish
that the Company’s auditors are aware of that information.
_____________________
Ed Slowey
Director
Date: 6 May 2016
_____________________
Alan Mooney
Director
Orogen Gold plc
P a g e | 15
Annual Report 2015
INDEPENDENT AUDITORS’ REPORT
Independent Auditors’ report to the members of Orogen Gold plc
We have audited the financial statements of Orogen Gold plc for the year ended 31 December 2015,
which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income,
in Equity,
Consolidated Statement of Changes
Consolidated Statement of Financial Position, Company Statement of Financial Position,
Consolidated Statement of Cash Flows, Company 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
regards the parent Company financial statements, as applied in accordance with the provisions of
the Companies Act 2006.
in Equity, Company Statement of Changes
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 auditors' 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 set out in the Group Directors’
Report, 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 Auditing Practices Board's Ethical
Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the Group’s and the parent Company's circumstances and
have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the financial
statements. In addition we read all financial and non-financial information in the Chairman’s
Statement, the Strategic Report and Group Directors’ Report to identify material inconsistencies
with the audited financial statements and to identify any information that is apparently materially
incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of
performing the audit.
If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
•
•
the financial statements give a true and fair view, of the state of the Group’s and Parent
Company's affairs as at 31 December 2015 and of the Group’s loss and Group’s and Parent
Company’s cash flows for the year then ended;
the financial statements have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union;
Orogen Gold plc
P a g e | 16
Annual Report 2015
INDEPENDENT AUDITORS’ REPORT
•
•
the parent Company financial statements have been properly prepared in accordance with
IFRS’s as adopted by the European Union and as applied in accordance with the provisions of
the Companies Act 2006; and
the financial statements have been properly prepared in accordance with the Companies Act
2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and in the Group 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 by the Parent Company, or returns
•
adequate for audit have not been received from branches not visited by us; or
the Company’s 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.
David Warren BA FCA
SENIOR STATUTORY AUDITOR
For and on behalf of Jeffreys Henry LLP, Statutory Auditor
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
United Kingdom
Date: 6 May 2016
Orogen Gold plc
P a g e | 17
Annual Report 2015
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
Continuing operations
Revenue
Operational costs
Gross profit
General and administrative expenses
Share based payments
Impairment of exploration and evaluation assets
Group operating loss
Finance income
Loss on ordinary activities before taxation
Tax on loss on ordinary activities
Loss for the year from continuing operations
Attributable to:
Equity holders of the parent
Non-controlling interests
Group loss for the year
Exchange translation differences
Total comprehensive loss for the year
Attributable to:
Owners of the parent
Non-controlling interests
Notes
15
9
4
5
7
2015
£’000
—
—
—
(356)
(5)
(534)
(895)
5
(890)
—
(890)
(677)
(213)
(890)
(2)
(892)
(679)
(213)
(892)
2014
£’000
—
—
—
(548)
—
(1,318)
(1,866)
7
(1,859)
—
(1,859)
(1,657)
(202)
(1,859)
(3)
(1,862)
(1,660)
(202)
(1,862)
Loss per share:
Loss per share – basic and diluted, attributable to ordinary
equity holders of the parent (pence)
8
(0.02)
(0.06)
Orogen Gold plc
P a g e | 18
Annual Report 2015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Assets
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Other reserves
Retained earnings
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2015
£’000
2014
£’000
9
10
12
13
14
16
17
1,577
2
1,579
22
921
943
2,522
1,811
3
1,814
58
1,118
1,176
2,990
4,418
12,181
625
(14,765)
2,459
—
2,459
4,222
11,827
760
(14,088)
2,721
200
2,921
63
63
63
2,522
69
69
69
2,990
The financial statements were approved and authorised for issue by the Board of Directors on 6 May
2016 and were signed on its behalf by:
_____________________
Ed Slowey
Director
Company Number: 5379931
_____________________
Alan Mooney
Director
Orogen Gold plc
P a g e | 19
Annual Report 2015
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
Cash flows from operating activities
Group operating loss
Decrease in trade and other receivables
(Decrease)/Increase in trade and other payables
Impairment of exploration and evaluation assets
Share based payments
Net cash flow from operating activities
Cash flow from investing activities
Expenditure on exploration and evaluation assets and
project earn-ins
Bank interest received
Net cash flow from investing activities
Cash flow from financing activities
Net proceeds from issue of equity instruments
Net cash flow from financing activities
Net change in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
9
15
5
13
13
2015
£’000
(895)
36
(4)
534
5
(324)
(292)
5
(287)
411
411
(200)
3
1,118
921
2014
£’000
(1,866)
35
18
1,318
—
(495)
(893)
7
(886)
1,288
1,288
(93)
3
1,208
1,118
Orogen Gold plc
P a g e | 20
Annual Report 2015
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O
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Assets
Non-current assets
Investments
Loans to subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Other reserves
Retained earnings
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2015
£’000
2014
£’000
11
11
12
13
14
16
17
—
2,063
2,063
61
301
362
2,425
—
1,850
1,850
177
340
517
2,367
4,418
12,181
597
(14,860)
2,336
4,222
11,827
730
(14,514)
2,265
89
89
89
2,425
102
102
102
2,367
The financial statements were approved and authorised for issue by the Board of Directors on 6 May
2016 and were signed on its behalf by:
_____________________
Ed Slowey
Director
Company Number: 5379931
_____________________
Alan Mooney
Director
Orogen Gold plc
P a g e | 22
Annual Report 2015
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
Cash flows from operating activities
Operating loss
(Increase)/decrease in trade and other receivables
Decrease in trade and other payables
Impairment of investments and loans to subsidiaries
Share based payments
Net cash flow from operating activities
Cash flow from investing activities
Bank interest received
Net cash flow from investing activities
Cash flow from financing activities
Net proceeds from issue of equity instruments
Funds advanced to subsidiary companies
Net cash flow from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
12
17
11
15
13
13
2015
£’000
(346)
116
(13)
200
5
(38)
—
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549
(550)
(1)
(39)
340
301
2014
£’000
(2,528)
(153)
56
2,500
—
(125)
—
—
1,288
(866)
422
297
43
340
Orogen Gold plc
P a g e | 23
Annual Report 2015
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 General information
Orogen Gold plc (the “Company”) is a company incorporated and domiciled in England and Wales.
Details of the registered office, the officers and advisers to the Company are presented on the
Company Information page at the end of this report. The Company's offices are in London and
Dublin. The Company is listed on the AIM market of the London Stock Exchange (ticker: ORE.L). The
principal activity of the Company is gold and mineral exploration and production in Europe.
2 Significant accounting policies
Basis of preparation
The consolidated financial statements consolidate those of the Company and its subsidiaries
(together the “Group” or “Orogen”). The consolidated financial statements of the Group and the
individual financial statements of the Company are prepared in accordance with applicable UK law
and International Financial Reporting Standards ("IFRS") as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006. The Directors consider that
the financial information presented in these Financial Statements represents fairly the financial
position, operations and cash flows for the period, in conformity with IFRS.
Consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiaries and associated undertakings. All consolidated subsidiaries have a reporting date of 31
December.
Subsidiaries are all entities over which Orogen Gold plc has the power to govern the financial and
operating policies generally accompanying a shareholding of more than one half of the voting rights.
The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Company. They are de-
consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the
Group. The cost of an acquisition is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair
value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost
of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is
recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated but considered an impairment
indicator of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the
primary economic environment in which the entity operates (the functional currency). The financial
statements are presented in Pounds Sterling (£), which is the Group’s presentation currency and the
Company’s functional currency.
Foreign currency transactions are translated into the functional currency using exchange rates
Orogen Gold plc
P a g e | 25
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
The results and financial position of all Group entities (none of which has the currency of a hyper-
inflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities for each statement of financial position presented are translated at the
•
closing rate at the date of that statement of financial position;
income and expenses for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the
rate on the dates of the transactions); and
• all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations, and of borrowings and other currency instruments designated as hedges of such
investments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or
sold, exchange differences that were recorded in equity are recognised in the income statement as
part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the closing rate.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year. New
standards and amendments to IFRS effective as of 1 January 2015 have been reviewed by the Group
and there has been no material impact on the financial statements as a result of these standards and
amendment. The Group has not early adopted any amendment, standard or interpretation that has
been issued but is not yet effective.
Standards issued but not yet effective
There were a number of standards and interpretations which were in issue at 31 December 2015
but were not effective at 31 December 2015 and have not been adopted for these Financial
Statements. The Directors have assessed the full impact of these accounting changes on the
Company. To the extent that they may be applicable, the Directors have concluded that none of
these pronouncements will cause material adjustments to the Group’s Financial Statements. They
may result in consequential changes to the accounting policies and other note disclosures. The new
standards will not be early adopted by the Group and will be incorporated in the preparation of the
Group Financial Statements from the effective dates noted below.
The new standards include:
IFRS 9
IFRS 11 (Amendments)
IFRS 14
IFRS 15
IFRS 16
IAS 1 (Amendments)
IAS 16 (Amendments)
IAS 27 (Amendments)
Financial Instruments2
Accounting for Acquisitions of Interests in Joint Operations1
Regulatory Deferral Accounts1
Revenue from Contracts with Customers2
Leases3
Disclosure Initiative1
Clarification of Acceptable Methods of Depreciation and
Amortisation1
Equity Method in Separate Financial Statements1
Orogen Gold plc
P a g e | 26
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
IAS 38 (Amendments)
Improvements to IFRSs
Clarification of Acceptable Methods of Depreciation and
Amortisation1
Annual Improvements 2012-2014 Cycle1
1 Effective for annual periods beginning on or after 1 January 2016
2 Effective for annual periods beginning on or after 1 January 2018
3 Effective for annual periods beginning on or after 1 January 2019
Accounting policies
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at acquisition date fair value
and the amount of any non-controlling interest in the acquiree. In the consolidated Financial
Statements, acquisition costs incurred are expensed and included in general and administrative
expenses.
Exploration and evaluation assets
Exploration and evaluation assets are measured using the cost method of recognition. Exploration
and evaluation expenditure is capitalised and recognised as an exploration and evaluation asset
when the rights to an area of interest are current, the expenditures are expected to be recouped
through successful development and exploitation activities and the operations are current and have
not reached such a stage that a reasonable assessment of recoverable reserves can be made.
Exploration and evaluation expenditure includes:
researching, analysing and collating of historical data
• acquisition of rights to explore
•
• exploratory drilling, sampling and trenching
• evaluation of technical feasibility and commercial viability
• administrative and general overheads related to an area of interest
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses. Property, plant and equipment comprises office and field equipment and
freehold land. Freehold land is not depreciated. Office and field equipment are depreciated over 3 to
10 years.
Equity
Equity instruments issued by the Company are recorded at the value of the proceeds received, net
of direct issue costs, allocated between share capital and share premium.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share
of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition.
Goodwill on acquisitions of subsidiaries is included in ‘intangible assets’. Separately recognised
goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.
Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to
benefit from the business combination in which the goodwill arose. The Group allocates goodwill to
each business segment in each country in which it operates.
Orogen Gold plc
P a g e | 27
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Impairment of non-financial assets
At each statement of financial position date, the Company reviews the carrying amounts of its
investments to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Company estimates the recoverable amount
of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful
life is tested for impairment annually and whenever there is an indication that the asset may be
impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to
the asset for which the estimates of future cash flows have not been adjusted. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a re-
valued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation
increase.
Taxation
Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax. The tax
currently payable is based on taxable profit for the year. Taxable profit differs from profit as
reported in the same income statement 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 statement of financial position date.
Deferred tax
Deferred tax is recognised 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 statement of financial position 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. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor
the accounting profit.
The carrying amount of deferred tax is reviewed at each statement of financial position date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Orogen Gold plc
P a g e | 28
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability
is settled or the asset realised. Deferred tax is charged or credited to the income statement, except
when it relates to items charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
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 income taxes levied by the
same taxation authority and the Company intends to settle its current tax assets and liabilities on a
net basis.
Share based compensation
The fair value of the employee and suppliers services received in exchange for the grant of the
options is recognised as an expense. The total amount to be expensed over the vesting year is
determined by reference to the fair value of the options granted, excluding the impact of any non-
market vesting conditions (for example, profitability and sales growth targets). Non-market vesting
conditions are included in assumptions about the number of options that are expected to vest. At
each statement of financial position date, the entity revises its estimates of the number of options
that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the
income statement, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital
(nominal value) and share premium when the options are exercised.
The fair value of share based payments recognised in the income statement is measured by use of
the Black Scholes model, which takes into account conditions attached to the vesting and exercise of
the equity instruments. The expected life used in the model is adjusted; based on management’s
best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations. The share price volatility percentage factor used in the calculation is based on
management’s best estimate of future share price behaviour and is selected based on past
experience, future expectations and benchmarked against peer companies in the industry.
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
statement of financial position date, and are discounted to present value where the effect is
material.
Financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and
other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at
fair value through profit or loss, any directly attributable transactions costs, except as described
below. Subsequent to initial recognition non-derivative financial instruments are measured as
described below.
A financial instrument is recognised when the Group becomes a party to the contractual provisions
of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash
flows from the financial assets expire or if the Group transfers the financial assets to another party
without retaining control or substantially all risks and rewards of the asset. Regular purchases and
sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself
Orogen Gold plc
P a g e | 29
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified
in the contract expire or are discharged or cancelled.
Fair values
The carrying amounts of the financial assets and liabilities such as cash and cash equivalents,
receivables and payables of the Company at the statement of financial position date approximated
their fair values, due to relatively short term nature of these financial instruments.
Trade payables and other non-derivative financial liabilities
Trade payables and other creditors are non-interest bearing and are measured at cost.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the statement of financial position.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the consolidated financial statements requires management to make estimates
and assumptions concerning the future that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting periods. The resulting accounting
estimates will, by definition, differ from the related actual results.
Exploration and evaluation assets (Note 9)
The application of the Group’s accounting policy for exploration and evaluation expenditure requires
judgement in determining whether it is likely that future economic benefits are likely either from
future exploration or sale or where activities have not reached a stage which permits a reasonable
assessment of the existence of reserves. The deferral policy requires management to make certain
estimates and assumptions about future events or circumstances, in particular whether an
economically viable extraction operation can be established. Estimates and assumptions made may
change if new information becomes available. If, after expenditure is capitalised, information
becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is
written off in the statement of profit or loss and other comprehensive income in the period when
the new information becomes available.
Impairment of investments (Note 9, 11)
Investments held are subject to impairment review. The Group’s management undertakes an
impairment review annually or more frequently if events or changes in circumstances indicate that
the carrying value may not be recoverable.
The Directors have carried out a detailed impairment review in respect of investments. The Group
assesses at each reporting date whether there is an indication that an asset may be impaired, by
considering the net present value of discounted cash flows forecasts which have been discounted.
The cash flow projections are based on the assumption that the Group can realise projected sales. A
prudent approach has been applied with no residual value being factored.
3 Segmental information
In the opinion of the Directors the Group has one class of business being the exploration for, and
development and production of gold and other related activities.
The Group's primary reporting format is determined by the geographical segment according to the
Orogen Gold plc
P a g e | 30
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
location of the exploration asset. There are currently three geographic reporting segments: Armenia
and Serbia involved in Gold exploration and development and the United Kingdom & Ireland being
the head and administrative offices.
Segment information of the business is presented below:
2015
2014
Serbia
£’000
Armenia
£’000
Total
£’000
United
Kingdom &
Ireland
£’000
Serbia
£’000
Armenia
£’000
Total
£’000
—
—
—
—
—
—
—
—
—
—
(356)
(529)
(19)
—
—
—
—
(548)
—
(5)
(534)
—
—
—
(1,318)
—
(1,318)
(895)
(529)
(1,337)
—
(1,866)
5
7
—
—
7
(890)
(522)
(1,337)
—
(1,859)
United
Kingdom
& Ireland
£’000
—
(356)
(5)
—
—
—
—
(534)
(361)
(534)
5
—
(356)
(534)
Income
statement
Revenue
General and
administrative
expenses
Share based
payments
Impairment
charge
Group
operating loss
Finance
revenue
Group loss
before tax
Assets and
liabilities
Segment
assets
Segment
liabilities
4 Operating loss
940
(47)
893
5
1,577
2,522
1,168
511
1,311
2,990
(16)
—
(63)
(50)
(11)
1,577
2,459
1,118
(19)
492
—
(69)
1,311
2,921
Operating loss is stated after charging:
Directors’ emoluments
Services provided by the Company’s auditors:
– Audit fees and expenses
– Tax compliance
– Other services pursuant to legislations
Foreign currency loss
5 Finance income
Bank interest received
2015
£’000
2014
£’000
172
320
16
2
—
3
16
2
—
3
2015
£’000
5
2014
£’000
7
Orogen Gold plc
P a g e | 31
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6 Employees
Aggregate Directors’ emoluments including consulting fees
Wages and salaries
Social security costs
Total
Other than the Directors of the Group, the Group has no employees.
7 Income tax benefit / (expense)
2015
£’000
172
—
—
172
2014
£’000
320
12
3
335
Loss on ordinary activities before taxation
Tax at the UK corporation tax rate of 20%/21%
Tax effect of expenses not deductible for tax
Tax effect of utilisation of previously unrecognised tax
losses
Tax on loss on ordinary activities
Group
Company
2015
£’000
(890)
(178)
107
71
—
2014
£’000
(1,859)
(390)
277
113
—
2015
£’000
(346)
(69)
40
29
—
2014
£’000
(2,528)
(531)
525
6
—
The Group has tax losses of £2,436,000 (2014: £1,350,000) to carry forward against future taxable
profits. The deferred tax asset on these tax losses at 20% amounts to £487,000 (2014: £283,000) and
has not been recognised due to the uncertainty of the recovery.
8 Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the
weighted average number of ordinary shares in issue during the period:
Loss after tax attributable to equity holders of the parent (£’000)
Weighted average number of ordinary shares in issue (share in millions)
Fully diluted average number of ordinary shares in issue (share in millions)
Basic and diluted loss per share (pence)
2015
(677)
4,002
4,002
(0.02)
2014
(1,657)
2,723
2,723
(0.06)
Basic and diluted earnings per share are the same, since where a loss is incurred the effect of
outstanding share options and warrants is considered anti-dilutive and is ignored for the purpose of
the loss per share calculation. The share options outstanding as at 31 December 2015 totalled
380,000,000 (2014: 225,000,000) and are potentially dilutive.
Orogen Gold plc
P a g e | 32
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9 Exploration and evaluation assets
Armenia
£’000
Serbia
£’000
Total
£’000
387
924
1,311
5,838
993
6,831
5,451
69
5,520
—
—
—
1,311
3,702
1,318
5,020
500
Cost
At 1 January 2014
Additions
At 31 December 2014
Impairment
At 1 January 2014
Impairment charge
At 31 December 2014
Carrying value 31 December 2014
Cost
At 1 January 2015
Additions
At 31 December 2015
Impairment
At 1 January 2015
Impairment charge
At 31 December 2015
Carrying value 31 December 2015
As part of the annual impairment review of asset carrying values a charge of £534,000 (2014:
£1,318,000) was recorded in relation to the Deli Jovan project in Serbia. Subsequent to year end, the
Company has concluded that it has better options available to it and therefore it has decided to
terminate the Deli Jovan project and relinquish the exploration permit.
5,020
534
5,554
—
5,020
534
5,554
1,577
3,702
1,318
5,020
1,811
—
—
—
1,577
1,311
266
1,577
5,520
34
5,554
6,831
300
7,131
10 Property, plant and equipment
Cost
At 1 January 2014
Disposals
At 31 December 2014
Accumulated depreciation
At 1 January 2014
Disposals
At 31 December 2014
Carrying value 31 December 2014
Cost
At 1 January 2015
Additions
At 31 December 2015
Accumulated depreciation
At 1 January 2015
Additions
At 31 December 2015
Carrying value 31 December 2015
Freehold
Land
£’000
Office and
Field
Equipment
£’000
2
—
2
—
—
—
2
2
—
2
—
—
—
2
27
(25)
2
7
(6)
1
1
2
—
2
1
1
2
—
Total
£’000
29
(25)
4
7
(6)
1
3
4
—
4
1
1
2
2
Orogen Gold plc
P a g e | 33
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11 Non-current assets
Investments in subsidiaries and associates:
Cost as at 1 January
Additions
Cost at 31 December
Impairment as at 1 January
Impairment charge
Impairment at 31 December
Carrying value as at 31 December
Break down of carrying value of investment:
Emotion Fitness Mag Kft – investment
Emotion Fitness Mag Kft -impairment
Medavinci Gold Limited - investment
Medavinci Gold Limited - impairment
Investments
Medavinci Gold Limited – loan
Medavinci Gold Limited – loan provision
Loans to subsidiaries
Total non-current assets
Group
Company
2015
£’000
—
—
—
—
—
—
—
2014
£’000
—
—
—
—
—
—
—
2015
£’000
8,350
413
8,763
6,500
200
6,700
2,063
2014
£’000
7,346
1,004
8,350
4,000
2,500
6,500
1,850
Group
Company
2015
£’000
339
(339)
—
—
—
—
—
—
—
2014
£’000
339
(339)
—
—
—
—
—
—
—
2015
£’000
339
(339)
3,370
(3,370)
—
5,393
(3,330)
2,063
2,063
2014
£’000
339
(339)
3,370
(3,370)
—
4,980
(3,130)
1,850
1,850
As part of the annual impairment review of asset carrying values a charge of £200,000 (2014:
£2,500,000) was recorded in relation to the Company’s intercompany receivable from Medavinci
Gold Limited. This follows the review of the carrying value of the Deli Jovan project (see note 9).
Medavinci Gold Limited operates as a holding company of Orogen Gold Limited an Irish registered
company with gold exploration interests in Serbia and Armenia.
Emotion Fitness Mag Kft
The Group's investment in Emotion Fitness Mag Kft (a Hungarian registered company) represents a
47% interest in that company. Emotion Fitness Mag Kft discontinued the operation of a fitness
centre from its Budapest premises in 2011. The Directors consider it is unlikely that the Company
will recover any value from this investment and accordingly have fully impaired the value of the
investment.
Subsidiary companies
Deli Jovan Exploration d.o.o.
Medavinci Gold Limited
Emotion Fitness Limited
Orogen Gold Limited
Orogen Gold (Serbia) Limited
Orogen Gold (Armenia) Limited
1
Percentage of share type held and overall voting rights
Incorporation
Serbia
UK
UK
Ireland
Ireland
Ireland
Holding
Type of share held
Indirect Ordinary shares
Direct Ordinary shares
Direct Ordinary shares
Indirect Ordinary shares
Indirect Ordinary shares
Indirect Ordinary shares
%
Holding1
2015
60
100
100
100
100
100
%
Holding1
2014
60
100
100
100
100
100
Orogen Gold plc
P a g e | 34
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12 Trade and other receivables
VAT recoverable
Other receivables and prepayments
Receivables from Group Companies
Trade and other receivables
Group
Company
2015
£’000
16
6
—
22
2014
£’000
50
8
—
58
2015
£’000
5
4
52
61
2014
£’000
18
3
156
177
The Directors consider that the carrying amount of trade and other receivables approximates their
fair value.
13 Cash and cash equivalents
Cash at bank
Cash and cash equivalents
Group
Company
2015
£’000
921
921
2014
£’000
1,118
1,118
2015
£’000
301
301
2014
£’000
340
340
14 Share capital
Details of ordinary and deferred shares issued are in the table below:
Date
At 1 Jan 2014
10 Sept 2014
16 Oct 2014
20 Oct 2014
19 Dec 2014
19 Dec 2014
At 31 Dec 2014
27 Jan 2015
25 Mar 2015
30 Oct 2015
At 31 Dec 2015
Details
Opening Balance
Share placing - £1,125,000
Share placing to Directors - £75,000
Drill for equity agreement
Capital reorganisation
Capital reorganisation
Mutsk continuation notice
Drill for equity agreement
Share placing - £450,000
Issue Price
£
0.0011
0.00115
0.002
Ordinary Shares
(£0.001/£0.0001)
Number of
shares
2,395,839,120
1,022,727,272
65,217,391
76,648,400
(3,560,432,183)
3,560,432,183
3,560,432,183
110,886,804
36,350,350
1,800,000,000
5,507,669,337
0.000597
0.002
0.00025
Deferred Shares
(£0.009)
Number of
shares
73,599,817
Issue
Price £
0.001
356,043,218
429,643,035
0.009
429,643,035
On 19 December 2014, the Company effected a capital reorganisation of the existing share capital
whereby each holding of 1 existing ordinary shares (par value £0.001), were subdivided into one new
ordinary share (par value £0.0001) and one deferred share of £0.0009. Every 10 deferred shares so
created were then consolidated into one deferred share of £0.009 each in line with the issue price of
existing deferred shares already in issue.
15 Share based payments
The Group has a share ownership compensation scheme for senior executives of the Group. In
accordance with the provisions of the plan, as approved by shareholders at a previous general
meeting, senior executives may be granted options to purchase ordinary shares in the Company.
The Group has on occasion issued warrants, or share options to third parties by way of settlement of
liabilities to strategic suppliers and consultants. Each share option converts into one ordinary share
of Orogen Gold plc upon exercise. No amounts are paid or payable by the recipient of the option for
the option. The options carry neither rights to dividends nor voting rights at shareholders meetings.
Orogen Gold plc
P a g e | 35
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Balance at 1 January
Lapsed during the year
Issued during the year
Balance at 31 December
Exercisable at 31 December
2015
2014
Number of
share options
225,000,000
(25,000,000)
180,000,000
380,000,000
200,000,000
Weighted average
exercise price
0.68p
0.80p
0.035p
0.369p
0.60p
Number of share
options
225,000,000
—
—
225,000,000
225,000,000
Weighted average
exercise price
0.68p
—
—
0.68p
0.68p
The fair value of equity based share options granted is estimated at the date of grant using the
Black-Scholes pricing model, taking into account the terms and conditions upon which the options
have been granted. The calculated fair value of share options and warrants charged to the Group
and Company financial statements in the year is £5,000 (2014: nil). On his appointment as CEO, Colin
Bird has been granted options over a total of up to 180,000,000 new ordinary shares of 0.01p each
at an exercise price of 0.035p. The options are subject to performance based vesting conditions over
7 years. The total fair value of the share options granted during 2015 is £41,000.
The following are the inputs to the model for the options granted during the year:
Strike price
Total units
Underlying asset price
Time (days)
Volatility
Interest rate p.a.
16 Retained earnings
Opening balance
Loss for the year
Closing balance
Share Options
2015
0.035p
180,000,000
0.035p
2,555
110%
1.25%
Group
Company
2015
£’000
(14,088)
(677)
(14,765)
2014
£’000
(12,431)
(1,657)
(14,088)
2015
£’000
(14,514)
(346)
(14,860)
2014
£’000
(11,986)
(2,528)
(14,514)
In accordance with the provisions of the Companies Act 2006, the Company has not presented a
statement of profit or loss and other comprehensive income. The Company's loss for the year was
£346,000 (2014: loss £2,528,000).
17 Trade and other payables
Trade payables
Accruals and deferred income
Amounts due to Directors
Payable to Group Companies
Trade and other payables
Group
Company
2015
£’000
8
42
13
—
63
2014
£’000
16
32
21
—
69
2015
£’000
6
36
8
39
89
2014
£’000
9
27
4
62
102
Amounts due to Directors are unsecured, interest free and are current liabilities.
Orogen Gold plc
P a g e | 36
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18 Related party transactions
See the Directors report for details of remuneration of Directors. Subsidiary information is presented
below and in note 11.
Shares purchased by Directors
Shares in Orogen Gold plc were acquired by the Directors of the Company as part of share placings
as follows:
Colin Bird
Adam Reynolds
Ed Slowey
Alan Mooney
Michael Nolan
Total
Subscription shares
October 2015
100,000,000
25,000,000
25,000,000
25,000,000
25,000,000
200,000,000
Other transactions with Directors
The following amounts were charged during the year to the Company by entities related to the
Directors:
2015
£
8,900
8,900
2014
£
6,000
6,000
Office facilities and administration
Total
Parent transactions with Group companies
During the year the Company advanced £413,000 (2014: £1,004,000) to Medavinci Gold Limited by
way of intercompany loans for exploration activities. The balance outstanding from Medavinci Gold
Limited at 31 December 2015 is £5,393,000 (2014: £4,980,000). The Company made a provision of
£200,000 (2014: £3,130,000) against this receivable in the current year (see note 11). The
intercompany loans are interest free and unsecured.
As at the 31 December 2015 the Company had trade receivable balances of £51,000 (2014:
£154,000) with Orogen Gold (Armenia) Limited and £1,000 (2014: £2,000) with Orogen Gold (Serbia)
Limited. Intercompany trade receivable balances are payable within 30 days of the invoice date. The
Company’s total intercompany income for the year was £181,000 (2014: £1,157,000).
As at the 31 December 2015 the Company had a trade payable balance of £39,000 (2014: £62,000)
with Orogen Gold Limited. Intercompany trade payable balances are payable within 30 days of the
invoice date. The Company’s total intercompany recharges incurred for the year was £150,000
(2014: £854,000).
19 Events after the reporting period
In March 2016 the Deli Jovan permit lapsed. An application for renewal of the permit was not
submitted and the partners have agreed to withdraw from the project. The Board estimates that the
total exit costs, all to be incurred in 2016, should not exceed an aggregate sum of £20,000.
In April 2016, Orogen Gold, announced that it had signed an exclusive Term Sheet with Galileo
Resources Plc, a UK AIM-listed company, covering a highly prospective epithermal gold-silver project
at Silverton in Nevada, USA, which is one of the best-endowed gold districts in the world.
Orogen Gold plc
P a g e | 37
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Orogen will have an exclusive right to earn an initial 51% interest in the Silverton project over the
6km² claim area through exploration spend of US$400,000 over 18 months. Subsequently the
Company can earn an additional 24% interest in the project through an additional exploration spend
of US$1.5 million over a further 30 month period.
20 Financial instruments – risk management
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining 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 Group’s finance function. The Board receives regular updates from the Executive
Directors 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 Group’s
competitiveness and flexibility. The Company’s operations expose it to some financial risks arising
from its use of financial instruments, the most significant ones being cash flow interest rate risk,
foreign exchange risk, liquidity risk and capital risk. Further details regarding these policies are set
out below:
Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from its deposits of cash and cash equivalents
with banks. The cash balances maintained by the Group are proactively managed in order to ensure
that attractive rates of interest are received for the available funds but without affecting the working
capital flexibility the Group requires. The Group is not at present exposed to cash flow interest rate
risk on borrowings as it has no debt. No subsidiary company of the Group is permitted to enter into
any borrowing facility or lease agreement without the prior consent of the Company.
Interest rates on financial assets
The Group’s financial assets consist of cash and cash equivalents, loans, trade and other receivables.
The interest rate profile at 31 December 2015 of these assets was as follows:
Orogen Gold plc
P a g e | 38
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 December 2015
UK Sterling
Euro
US Dollar
Other currencies
31 December 2014
UK Sterling
Euro
US Dollar
Other currencies
Total
£’000
Financial assets on which
interest is earned
£’000
Financial assets on which
interest in not earned
£’000
897
25
19
2
943
1,086
78
3
9
1,176
588
—
19
—
607
721
22
3
1
747
309
25
—
2
336
365
56
—
8
429
The Group earned interest on its interest bearing financial assets at rates between 0.05% and 0.9%
(2014: 0.15% and 1.1%) during the year.
A change in interest rates on the statement of financial position date would increase/ (decrease) the
equity and the anticipated annual income or loss by the theoretical amounts presented below. The
analysis is made on the assumption that the rest of the variables remain constant. The analysis with
respect to 31 December 2014 was prepared under the same assumptions.
Instruments bearing interest
2015
2014
Increase in
1%
£’000
6
Decrease of
1%
£’000
(6)
Increase in
1%
£’000
10
Decrease of
1%
£’000
(10)
It is considered that there have been no significant changes in cash flow interest rate risk at the
reporting date compared to the previous year end and that therefore this risk has had no material
impact on earnings or shareholders’ equity.
Foreign exchange risk
Foreign exchange risk may arise because the Group has operations located in various parts of the
world where the local currency is not the same as the functional currency in which the Company
operates.
Only in exceptional circumstances will the Group consider hedging its net investments in overseas
operations, as generally it does not consider that the reduction in foreign currency exposure
warrants the cash flow risk created from such hedging techniques. It is the Group’s policy to ensure
that individual Group entities enter into local transactions in their functional currency wherever
possible and that surplus funds over and above immediate working capital requirements are held in
Sterling deposits.
The Group considers this policy minimises any unnecessary foreign exchange exposure. In order to
monitor the continuing effectiveness of this policy the Board through their approval of both
Orogen Gold plc
P a g e | 39
Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
corporate and capital expenditure budgets and review of the currency profile of cash balances and
management accounts, considers the effectiveness of the policy on an on-going basis.
The following table discloses the major exchange rates of those currencies utilised by the Group:
Foreign currency units to £1 UK Sterling (rounded)
Average 2015
At 31 December 2015
Average 2014
At 31 December 2014
(EUR = Euro and USD = United States Dollar)
EUR
1.374
1.357
1.242
1.278
USD
1.528
1.480
1.644
1.554
Liquidity risk
Liquidity risk arises from the Group’s management of working capital; it is the risk that the Group
will encounter difficulty in meeting its financial obligations as they fall due. The principal obligations
of the Group arise in respect of committed expenditure in respect of its on-going exploration work.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its
obligations when they become due. To achieve this aim, it seeks to maintain readily available cash
balances (or agreed facilities) to meet expected requirements and to raise new equity finance to
meet the next phase of exploration and where relevant development expenditure.
The Board receives cash flow projections on a monthly basis as well as information on cash balances.
The Board will not commit to material expenditure in respect of its on-going exploration work prior
to being satisfied that sufficient funding is available to the Group to finance the planned
programmes. For cash and cash equivalents, the Company only uses recognised banks with medium
to high credit ratings.
Capital risk
The Group’s objectives when managing capital are to safeguard the ability to continue as a going
concern in order to provide returns for shareholders and benefits to other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
Orogen Gold plc
P a g e | 40
Annual Report 2015
COMPANY INFORMATION
WEBSITE: HTTP://WWW.OROGENGOLD.COM
Registered office
Finsgate
5-7 Cranwood Street
London EC1V 9EE
Registered number
5379931, England and Wales
Dublin office
Directors
Secretary
Auditors
Banker
Nominated advisor
Broker
Registrars
Solicitors
18 Fitzwilliam Place
Dublin 2
Adam Reynolds – Non-executive Chairman
Colin Bird – Chief Executive
Ed Slowey – Operations Director
Alan Mooney – Finance Director
Michael Nolan – Non-executive Director
Ross Crockett
Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London EC1V 9EE
Coutts & Co
440 Strand
London EC3V 3ND
Allied Irish Bank
Ashford House
Tara Street, Dublin 2
Cairn Financial Advisers LLP
61 Cheapside
London EC2V 6AX
Beaufort Securities Limited
131 Finsbury Pavement
London EC2A 1NT
Capita Asset Services
The Registry, 34 Beckenham Road
Beckenham
Kent BR3 4TU
BPE Solicitors LLP
St. James’ House
St. James’ Square
Cheltenham GL50 3PR
Mason Hayes & Curran
South Bank House, Barrow Street
Dublin 4
Orogen Gold plc
P a g e | 41
Annual Report 2015