TIDMARCL
RNS Number : 4438A
Altus Resource Capital Limited
19 February 2014
Altus Resource Capital Limited
Half-Yearly
Financial Report
from 1 July 2013 to 31 December 2013 (Unaudited)
SUMMARY INFORMATION
Company Overview
Altus Resource Capital Limited ("ARC" or the "Company") is a
Guernsey authorised, closed-ended investment company incorporated
on 30 April 2009, which had shares admitted to trading on the
Specialist Fund Market (the "SFM") of the London Stock Exchange
(the "LSE") on 30 June 2009 and listed on the Official List of the
Channel Islands Securities Exchange Authority (the "CISEA")
(formerly the Channel Islands Stock Exchange) on 22 December
2009.
The Company issued 26,000,000 ordinary shares at GBP1.00 per
share on 30 June 2009 and a further 10,997,233 ordinary shares at
GBP1.33 per share on 22 December 2009. On 2 August 2010 a further
2,722,336 ordinary shares were issued at GBP1.40 per share.
Following an investment of GBP5,000,000 by the Company in Altus
Global Gold Limited in October 2011, the group comprises the
Company and its subsidiary Altus Global Gold Limited (together the
"Group"), as detailed in note 7 to the Consolidated Financial
Statements.
Altus Global Gold Limited is an authorised open-ended investment
company incorporated under the laws of Guernsey on 10 October 2011
with registered number 54069. It listed on the CISEA on 1 November
2011.
Altus Global Gold Limited was established to realise capital
growth from a portfolio of gold and precious metals equities, with
the aim of generating a significant capital return to shareholders.
It invests in mid-tier and major gold and precious metals companies
with a focus on mid-tier producers.
Investment Objectives and Policy
The Company's objective is to realise capital growth from a
concentrated portfolio of Junior Resource Equities and to generate
a significant capital return to shareholders.
The Company invests in companies engaged in the exploration,
development and mining of metals and minerals with a focus on
companies that operate in the gold sector. Portfolio companies will
be predominantly, but not exclusively, listed or quoted on either
UK markets or other recognised stock exchanges including the
Canadian and Australian markets. They will typically be capitalised
at less than GBP500 million at the time of investment by the
Company.
The Company's investment activities are managed by Altus Capital
Limited (the "Investment Manager") who reports to the Board. The
Investment Manager is a Financial Conduct Authority ("FCA")
authorised and regulated wholly-owned subsidiary of Altus
Strategies Limited.
CHAIRMAN'S STATEMENT AND INTERIM MANAGEMENT REPORT
I hereby present the Half-Yearly Financial Report of the Company
for the period between 1 July 2013 and 31 December 2013 (the
"Period"). The Company's unaudited Net Asset Value ("NAV") rose
1.3% to the end of the Period at GBP29 million or GBP0.73 per
ordinary share. The mining sector continued to face challenges
during the Period with significant volatility in the gold price
which closed the Period down 2.3% at US$1,205 per ounce and gold
equities with the FTSE Gold Mines Index and S&P TSX Gold Index
declining 8.6% and 2.9% respectively.
The Company remains invested in Altus Global Gold Limited, a
Guernsey registered open-ended investment company established and
managed by Altus Capital Limited, seed-financed by the Company and
admitted to the Official List of the ClSE (Code: AGGL) in November
2011. The investment provides exposure to a concentrated portfolio
of primarily mid-tier gold equities and reflects the Investment
Manager's conviction that the fundamentals for the gold price
remain robust and that, following the significant divergence of
gold equities from the gold price, substantial returns can be
delivered from investing in quality gold producers.
A description of the important events that have occurred during
the Period and their impact on the condensed set of financial
statements is included in the Investment Manager's Report, and
includes a description of the principal risks and uncertainties,
along with Note 15 in the financial statements. Details of all
related party transactions are given in Note 16. Other than the
information set out in this report, the Board is not aware of any
events during the Period which would have had a material impact on
the financial position of the Company.
On behalf of the Board of Directors, I thank all shareholders
for their support.
Nick Falla
Chairman
INVESTMENT MANAGER'S REPORT
The second half of 2013 saw significant changes to the global
outlook. In the Middle East, US backed intervention in Syria became
almost a certainty as the Assad regime was accused of using
chemical weapons and crossing a "red line". Foreign policy
observers were then shocked to find the UK voted against the
deployment of forces for the first time since the Suez Crisis in
1956 and Russia became the world's diplomat brokering a deal to
prevent intervention. Political instability remains rife in the
region with the on-going Syrian crisis putting increasing strain on
the ability of neighbouring countries to house refugees. Some
stability has been restored via a potential agreement between the
US and Iran to ease economic sanctions in exchange for a cessation
of uranium enrichment over 5%. Although this has been deemed
largely positive, both Israel and Saudi Arabia are viewing this
renewed co-operation with Iran as a betrayal of strategic interests
in the region.
In the US domestically, a government shutdown, caused by
disagreements over the Affordable Care Act, almost led to a failure
to raise the debt ceiling. Following an eleventh hour agreement,
the issue was deferred until mid-February, but China's Dagong
Global Credit Rating downgraded US treasuries as a result. The
decrease in trust between the US and China may have significant
implications for the US reserve currency status in the years to
come, indeed World Gold Council figures suggest emerging economy
central banks continue to be net buyers of gold as faith in the US
dollar following Quantitative Easing "1, 2, 3 and 4" diminishes.
China's gold demand in 2013 is expected to total more than 1,000
tonnes surpassing India for the first time while Russia's total
reserves passed 1000 tonnes for the first time in November 2013 and
Turkey is on track to exceed 500 tonnes. During the Period, the
price of gold continued to be dominated by speculation over whether
the Federal Reserve would begin to taper asset purchases. Finally
tapering was announced during the December meeting of the FOMC.
Political uncertainty translated into gold price volatility
during the period with a sharp recovery in the gold price from the
June low of just under US$1,200 per ounce up to US$1,417 per ounce
by 28 August. With the impending war in Syria averted and the US
debt ceiling extended, the debate over tapering dominated the gold
price trajectory until the end of 2013. The gold price decline was
consistent over the third quarter reaching a low of US$1,188 per
ounce on the 19 December against a back drop of strengthening
currencies and global equity markets.
Other metals have remained flat during the Period, having
suffered steep declines in early 2013. Copper has stabilised above
US$7,000 per tonne and the iron ore spot price surprised analysts
by climbing above US$130 per tonne in July and stabilising on the
back of strong Chinese imports.
Mining companies through 2013 have continued to focus on
delivering shareholder returns and cutting expenditure through some
of the most difficult economic conditions facing the sector for a
decade. Gold miners, in particular, are having to take significant
write-downs on marginal operations that were developed on the
assumption that the gold price would continue to rise. 2013 was
therefore a pivotal year and quality mining equities are now
beginning to emerge leaner with significantly more realistic
commodity price assumptions that should enable them to generate
profits at or below current metals prices.
At the end of the Period the Company held twenty four resource
equities, four precious metal backed Exchange Traded Funds and cash
representing 13% of assets under management.
Outlook
The Investment Manager remains confident that the fundamentals
that have supported a decade of growth for the gold price remain
intact today and that the outlook for gold remains positive over
the medium term. These factors include the continued currency
debasement, low to negative real interest rates and on-going QE
measures by the major central banks, coupled with the increasing
demand for gold from the burgeoning middle classes of China and
other emerging economies.
With an increased focus on delivering shareholder returns, gold
equities that meet their targets are expected to outperform the
gold price going forward. The Investment Manager intends to retain
the Company's weighting towards high quality gold equities with low
cost operations and strong growth profiles.
The fundamentals for many other commodities remain robust driven
by the continued industrialisation and urbanisation of China and
other Brazil Russia, India and China economies coupled with supply
side constraints as production diminishes from major mines as new
developments are deferred. The Investment Manager continues to
monitor companies operating across the full suite of metals and
minerals but focuses on equities that should not only benefit from
a stable or strengthening commodity price but also through
delivering operationally.
The Company remains well-positioned to benefit from an
anticipated upswing in the mining sector from the current
historically low valuations. Strong stock selection based on
detailed sector knowledge, proactive engagement with the management
teams, a concentrated portfolio of investee companies and an active
trading strategy should generate significant returns to
shareholders. The focus of the portfolio remains on companies with
quality assets that offer resource and/or production growth and
should realise significant share price appreciation as the seasoned
management teams deliver on the ground.
Principal Risks and Uncertainties
The Company is focused on investing in junior resources
companies and is therefore subject to the risks associated with
concentrating its investments in this asset class. The performance
of the Company will be affected by the performance of the
securities of investee companies and is thus subject to the sharp
price volatility of shares of companies principally engaged in
activities related to metals and minerals. Historically the prices
of the commodities have fluctuated significantly and are affected
by numerous factors which the Company cannot predict or control.
Political and economic conditions in metal and mineral producing
countries may have a direct effect on the mining and production of
these metals and minerals, and consequently, on their prices. In
addition, the Company has invested, and will continue to invest in
companies with assets or operations in emerging or developing
markets and will consequently be exposed to various increased risks
associated with investing in such markets.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL
STATEMENTS
The Board of Directors jointly and severally confirm that, to
the best of their knowledge:
(a) The consolidated financial statements, prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company; and
(b) This Interim Management Report includes or incorporates by reference:
(i) an indication of important events that have occurred during
the first six months of the financial year and their impact on the
financial statements;
(ii) a description of the principal risks and uncertainties for
the remaining six months of the financial year;
(iii) confirmation that there were no related party transactions
in the first six months of the current financial year that have
materially affected the financial position or the performance of
the Company during that period; and
(iv) any changes in the related parties transactions described
in the last annual report that could have a material effect on the
financial position or performance of the Company in the first six
months of the current financial year.
Signed on behalf of the Board of Directors on 18 February
2014.
Nick Falla Robert Milroy
Chairman Director
DIRECTORS
Nicholas J Falla: Chairman (non-executive)
Nicholas Falla has over thirty years of experience in the
finance industry including fifteen years of experience in the
commodity markets. He is currently the Managing Director of Xocoatl
Limited a private investment company taking strategic proprietary
positions in the commodities markets and Finance Director of Pharma
E Limited, a private pharmaceutical supplier. Nick was senior
non-executive director of MW Tops Limited, a closed-ended
investment company listed on the London Stock Exchange which
entered into voluntary liquidation in September 2010, whilst
transferring its assets into another investment vehicle. From
1993-2000 Nick worked as the financial controller for Bank of
Bermuda (Guernsey) Limited and from 2000 to 2002 he was their
regional controller for Europe. In addition he has acted as an
interim Financial Director for the Guernsey banking operation of
Credit Suisse Guernsey Limited and has worked on various finance
and accounting based projects with companies such as KPMG (Channel
Islands) and the Blenheim Group. Nick trained as an accountant with
Turquands Barton Mayhew & Co in Guernsey.
David Gelber: Director (non-executive)
David Gelber began his career in trading in 1976 when he joined
Citibank in London. David has since held a variety of senior
trading positions, in derivatives in particular, working for
Citibank, Chemical Bank and HSBC, where he was Chief Operating
Officer of HSBC Global Markets. In 1994 David joined ICAP, an
inter-dealer broker, as COO and assisted in implementing two
mergers, first with Exco plc and then with Garban. David currently
serves as Chairman of Walker Crips Group plc, a stockbroker and
wealth manager and serves as a non-executive director of of DDCAP
Limited, a leading arranger of Islamic banking transactions, Exotix
Limited, an investment banking boutique specialising in frontier
markets and Intercapital Private Group Limited, a holding company
invested in ICAP plc and CityIndex Limited, a spread-betting and
contracts for difference provider. He is a founding partner of
Castellain Capital, a fund manager. David has a B.Sc in statistics
and law from the University of Jerusalem and an M.Sc in computer
science from the University of London.
Robert Milroy: Director (non-executive)
Robert Milroy is Chairman of Milroy Capital Limited, a company
which invests in and manages various Mining and Energy related
projects. He was a Founding Director of the Corazon Capital Group
(a Guernsey regulated investment management and stock-broking
group) for 14 years until its takeover by Collins Stewart Plc in
2010. Outside of expertise in running and managing various natural
resources and hedge funds he has over 40 years experience in the
Oil and Gas and Mining business either through direct
owner/management experience various projects in Chile, Peru,
Argentina, Ghana, Canada, USA, Mexico, Australia, Norway and
Greenland. In addition, he was the Managing Director of Eagle
Drilling Inc. for 13 years, a firm that specialised in hard rock
diamond core drilling in Central and Western Africa. Robert
graduated with a Bachelor of Commerce (Honours) from the University
of Manitoba and is a Director on a number of Mining and Energy
related companies. Robert is also a Director of Altus Resource
Capital Limited.
David Netherway (non-independent non-executive)
David Netherway is a mining engineer with over 35 years of
experience in the mining industry and until the takeover by Gryphon
Minerals Limited, was the CEO of Shield Mining Limited, an
Australian listed exploration company. David was involved in the
construction and development of the Iduapriem, Siguiri and Kiniero
gold mines in West Africa and has mining experience in Africa,
Australia, China, Canada, India and the Former Soviet Union. David
served as the CEO of Toronto listed Afcan Mining Corporation, a
China focused gold mining company that was sold to Eldorado Gold in
2005. David has also held senior management positions in a number
of gold mining companies including Golden Shamrock Mines, Ashanti
Goldfields and Semafo Inc. He is currently the chairman of Aureus
Mining Inc, Kilo Goldmines Limited and a non-executive director of
Crusader Resources Limited and Altus Global Gold Limited. He is the
ex-Chairman of Afferro Mining Inc and was a non-executive Director
of Gryphon Minerals Ltd, Kazkahgold Group and GMA Resources Ltd.
David is the current non-executive chairman of Altus Strategies
Limited and is thus not considered an Independent Director of the
Company.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period from 1 July 2013 to 31 December 2013
1 Jul 2013 to 1 Jul 2012 to
31 Dec 2013 31 Dec 2012
Notes GBP GBP
Net movement in unrealised
appreciation / (depreciation)
of investments 8 10,936,185 (1,474,765)
Realised losses on investments 8 (10,038,188) (1,254,673)
Operating income 3 58,167 188,946
Operating expenses 4 (808,062) (834,627)
Net gain / (loss) for
the Period 148,102 (3,375,119)
Other comprehensive income - -
Total comprehensive income 148,102 (3,375,119)
================================ =============================
Attributable to:
Owners of the Company 371,894 (3,236,273)
Non-controlling interest 13 (223,792) (138,846)
148,102 (3,375,119)
================================ =============================
Earnings per share for
the Period
- Basic and Diluted 6 0.01 (0.08)
-------------------------------- -----------------------------
There are no recognised gains or losses for the Period other
than those disclosed above.
In arriving at the results for the financial period, all amounts
are derived from continuing operations.
The notes as contained within this report form an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at for the period from 1 July 2013 to 31 December 2013
31 Dec 2013 30 Jun 2013
Notes GBP GBP
NON-CURRENT ASSETS
Financial assets designated
as at fair value through
profit and loss 8 26,456,378 28,065,169
CURRENT ASSETS
Cash and cash equivalents 4,407,111 1,868,097
Trade and other receivables 9 56,950 936,053
------------------------- ----------------------
4,464,061 2,804,150
TOTAL ASSETS 30,920,439 30,869,319
------------------------- ----------------------
CURRENT LIABILITIES
Trade and other payables 10 107,749 209,731
107,749 209,731
NET ASSETS 30,812,690 30,659,588
------------------------- ----------------------
EQUITY
Share premium 12 42,602,254 42,602,254
Revenue reserve (13,761,838) (14,133,732)
Equity attributable to
owners of the Company 28,840,416 28,468,522
Non-controlling interest 13 1,972,274 2,191,066
TOTAL EQUITY 30,812,690 30,659,588
------------------------- ----------------------
Net asset value per Ordinary
Share Pence Pence
based on 39,719,569 (30
Jun 2013: 39,719,569) Shares
in issue 72.61 71.67
------------------------- ----------------------
The unaudited consolidated financial statements were approved
and authorised for issue by the Board on 18 February 2014.
Nick Falla Robert Milroy
Chairman Director
The notes as contained within this report form an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period from 1 July 2013 to 31 December 2013
Share Share Premium Accumulated Non-controlling Total
Capital Profits interest
GBP GBP GBP GBP GBP
Balance as at
1 July 2013 - 42,602,254 (14,133,732) 2,191,066 30,659,588
Net loss for the
period - - 371,894 (223,792) 148,102
Adjustment
arising
from change in
non-controlling
interest - - - 5,000 5,000
Balance as at
31 December
2013 - 42,602,254 (13,761,838) 1,972,274 30,812,690
------------------ ---------------------- ------------------------ ---------------- -------------------
Share Share Premium Accumulated Non-controlling Total
Capital Profits interest
GBP GBP GBP GBP GBP
Balance as at
1 July 2012 - 42,602,254 18,062,470 437,726 61,102,450
Net loss for the
year - - (32,196,202) (1,746,660) (33,942,862)
Adjustment
arising
from change in
non-controlling
interest - - - 3,500,000 3,500,000
Balance as at
30 June 2013 - 42,602,254 (14,133,732) 2,191,066 30,659,588
------------------ ---------------------- ------------------------ ---------------- -------------------
The notes as contained within this report form an
integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the period from 1 July 2013 to 31 December 2013
1 Jul 2013 1 Jul 2012
to to
31 Dec 2013 31 Dec 2012
Notes GBP GBP
OPERATING ACTIVITIES
Net profit / (loss) for the
period attributable to shareholders 148,102 (3,375,119)
Net movement in unrealised
(appreciation) / depreciation
on investments 8 (10,936,185) 1,474,765
Interest received (7,865) (188,946)
Decrease in payables (15,431) (399,892)
(Increase) / decrease in receivables (13,033) 255,390
Realised gains on investments 8 10,038,188 1,254,673
Foreign exchange movements 358,067 111,917
NET CASH FLOW FROM OPERATING
ACTIVITIES (428,157) (867,212)
--------------------------- --------------------
INVESTING ACTIVITIES
Interest received 7,865 188,946
Purchase of investments 8 (11,802,534) (50,466,006)
Sale of investments 8 15,114,907 37,899,425
NET CASH FLOW FROM INVESTING
ACTIVITIES 3,320,238 (12,377,635)
--------------------------- --------------------
FINANCING ACTIVITIES
Proceeds from issues of shares
in subsidiary 5,000 3,500,000
NET CASH FLOW FROM FINANCING
ACTIVITIES 5,000 3,500,000
--------------------------- --------------------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,868,097 13,893,566
Increase / (decrease) in cash
and cash equivalents 2,897,081 (9,744,847)
Effect of foreign exchange
rates (358,067) (111,917)
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 4,407,111 4,036,802
--------------------------- --------------------
The notes as contained within this report form an integral
part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period from 1 July 2013 to 31 December 2013
1 GENERAL INFORMATION
The consolidated financial statements incorporate the financial
statements of the Group.
The Company is a closed-ended investment company incorporated
in Guernsey on 30 April 2009, which had shares admitted
to trading on the SFM of the London Stock Exchange on 30
June 2009 and listed on the official list of the CISEA
on 22 December 2009.
The principal activity of the Group is to realise capital
growth from a concentrated portfolio of resource equities
and to generate a significant capital return to shareholders.
2 ACCOUNTING POLICIES
The significant accounting policies have been applied consistently
in dealing with the items which are considered material
in relation to the Group's Consolidated Financial Statements:
(a) Basis of Preparation
The consolidated financial statements have been prepared
in conformity with International Financial Reporting Standards
("IFRS") as adopted in the European Union which comprise
standards and interpretations approved by the International
Accounting Standards Board ("IASB") and International Financial
Reporting Interpretations Committee ("IFRIC"), together
with applicable Guernsey law. The financial statements
have been prepared on a historical cost basis except for
the measurement at fair value of certain financial instruments.
The following Standards or Interpretations have been adopted
by the Group in the current year:
IFRS 13 Fair value measurement - Original issue effective
for annual periods beginning on or after 1 January 2013.
IAS 1 Presentation of Financial Statements - Amendments
resulting from Annual Improvements 2009-2011 Cycle (comparative
information) for annual periods beginning on or after 1
January 2013
IAS 32 Financial Instruments: Presentation - annual improvements
effective for annual periods beginning on or after 1 January
2013.
The following Standards or Interpretations that are expected
to affect the Group have been issued but not yet adopted
by the Group as shown below. Other Standards or Interpretations
issued by the IASB and the IFRIC are not expected to affect
the Group.
IFRS 7 Financial Instruments: Disclosures - Amendments
relating to the offsetting of assets and liabilities and
additional hedge accounting disclosures (and consequential
amendments) effective for no earlier than annual periods
beginning 1 January 2017.
IFRS 9 Financial Instruments - Classification and Measurement
(revised November 2009) effective no earlier than annual
periods beginning on or after 1 January 2017.
IFRS 9 Financial Instruments - accounting for financial
liabilities and derecognition effective no earlier than
annual periods beginning on or after 1 January 2017.
IFRS 9 Financial Instruments - reissue to incorporate a
hedge accounting chapter effective no earlier than annual
periods beginning on or after 1 January 2017.
IFRS 10 Consolidated Financial Statements - Amendments
for investment entities for annual periods beginning on
or after 1 January 2014.
IFRS 12 Disclosure of Interests in Other Entities - Amendments
for investment entities for annual periods beginning on
or after 1 January 2014.
IAS 27 Separate Financial Statements - Amendments for investment
entities effective for annual periods beginning on or after
1 January 2014.
IAS 32 Financial Instruments: Presentation - Amendments
relating to the offsetting of assets and liabilities effective
for annual periods beginning on or after 1 January 2014.
The Directors have considered the above and are of the
opinion that the above Standards and Interpretations are
not expected to have a material impact on the Group's financial
statements except for the presentation of additional disclosures
and changes to the presentation of components of the financial
statements. These items will be applied in the first financial
period for which they are required.
(b) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and its Subsidiary. The Company
owns 53.23% (June 2013: 53.28%) of the shares in the Subsidiary
and has the power to govern the financial and operating
policies of the Subsidiary so as to obtain benefits from
their activities.
Intra-group balances and transactions, and any unrealised
income and expenses arising from intra-group transactions
are eliminated in preparing the consolidated financial
statements.
Non-controlling interests in the Subsidiary are identified
separately from the Group's equity therein. The interests
of non-controlling shareholders are initially measured at
the non-controlling interest's proportionate share of the
fair value of the acquiree's identifiable net assets. Subsequent
to acquisition, the carrying amount of non-controlling interest
is the amount of the interest at initial recognition plus
the non-controlling interest's share of subsequent changes
in equity. Total comprehensive income is attributed to non-controlling
interest even if this results in the non-controlling interest
having a deficit balance.
(c) Judgements and estimates
The preparation of financial statements in accordance with
IFRS requires management to make judgements, estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results could differ from such estimates.
The estimates and underlying assumptions are reviewed on
an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimate was revised
if the revision affects only that period or in the period
of the revision and future periods if the revision affects
both current and future periods.
The most critical judgements, apart from those involving
estimates, that management has made in the process of applying
the Company's accounting policies and that have the most
significant effect on the amounts recognised in the financial
statements are the functional currency of the Company (see
note 2(d)(i)) and the fair value of investments designated
to be at fair value through profit or loss (see note 2(e)(i)).
The valuation methods/techniques used by the Company in
valuing financial instruments involve critical judgements
to be made and therefore the actual value of financial instruments
could differ significantly from the value disclosed in these
consolidated financial statements.
(d) Foreign currency
(i) Functional and Presentation Currency
The Company's investors are mainly from the UK, with the
subscriptions and redemptions of the Participating Redeemable
Shares denominated in Sterling. The primary activity of
the Company is to realise capital growth from a portfolio
of gold and precious metals equities with the aim of generating
a significant capital return to Shareholders.
The performance of the Company is measured and reported
to investors in sterling. The Directors consider sterling
as the currency that most faithfully represents the economic
effects of the underlying transactions, events and conditions.
The financial statements are presented in sterling, which
is the Company's functional and presentation currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and
from the translation at period-end exchange rates of monetary
assets and liabilities denominated in foreign currencies
are recognised in the Consolidated Statement of Total Comprehensive.
Translation differences on non-monetary financial assets
and liabilities such as equities at fair value through
profit or loss are recognised in the Consolidated Statement
of Total Comprehensive Income. The Company holds investments
denominated in Australian, Canadian and US Dollars at the
reporting date, and may enter into forward foreign currency
contracts to hedge the exchange rate risk arising from
future cash flows on these investments. As at 31 December
2013 no forward foreign currency contracts were taken out.
(e) Financial Instruments
Financial assets and financial liabilities are recognised
in the Statement of Financial Position when the Company
becomes a party to the contractual provisions of the instrument.
(i) Financial Assets
The classification of financial assets at initial recognition
depends on the purpose for which the financial asset was
acquired and its characteristics.
All financial assets are initially recognised at fair value.
All purchases of financial assets are recorded at trade
date, being the date on which the Company became party
to the contractual requirement of the financial asset.
The Company's financial assets are categorised as financial
assets at fair value through profit or loss. Unless otherwise
indicated the carrying amounts of the Company's financial
assets approximate to their fair values. Gains and losses
arising from changes in the fair value of financial assets
classified as fair value through profit or loss are recognised
in the Consolidated Statement of Total Comprehensive Income.
A financial asset (in whole or in part) is derecognised
either:
-- when the Company has transferred substantially all
the risk and rewards of ownership;
-- when it has not retained substantially all the risk
and rewards and when it no longer has control over the
asset or a portion of the asset; or
-- when the contractual right to receive cash flow has
expired.
(ii) Financial Liabilities
The classification of financial liabilities at initial
recognition depends on the purpose for which the financial
liability was issued and its characteristics.
All financial liabilities are initially recognised at fair
value net of transaction costs incurred. All purchases
of financial liabilities are recorded on trade date, being
the date on which the Company becomes party to the contractual
requirements of the financial liability. Unless otherwise
indicated the carrying amounts of the Company's financial
liabilities approximate to their fair values.
Financial liabilities measured at amortised cost include
other short-term monetary liabilities, which are initially
recognised at fair value and subsequently carried at amortised
cost using the effective interest rate method.
A financial liability (in whole or in part) is derecognised
when the Company has extinguished its contractual obligations,
it expires or is cancelled. Any gain or loss on derecognition
is taken to the Consolidated Statement of Comprehensive
Income.
(f) Going Concern
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue
in operational existence for the foreseeable future. The
Directors believe the Group is well placed to manage its
business risks successfully despite the current economic
climate for the 12 months subsequent to signing. Accordingly,
the Directors have adopted the going concern basis in preparing
the financial information.
(g) Taxation
The Company and its Subsidiary have been granted exemption
under the Income Tax (Exempt Bodies) (Guernsey) Ordinance,
1989 from Guernsey Income Tax, and each entity is charged
an annual fee of GBP600.
(h) Expenses
All expenses are accounted for on an accruals basis.
(i) Interest Income
Interest income is accounted for on an accruals basis.
(j) Cash and Cash equivalents
Cash at bank and short term deposits which are held to
maturity are carried at cost. Cash and cash equivalents
are defined as call deposits, short term deposits and
highly liquid investments readily convertible to known
amounts of cash and subject to insignificant risk of
changes in value. For the purposes of the Consolidated
Statement of Cash Flows, cash and cash equivalents consist
of cash and deposits at bank.
(k) Share issue costs
The Share issue costs borne by the Company are recognised
in the Consolidated Statement of Changes in Equity, as
the Company's Ordinary Shares have no fixed redemption
date.
(l) Investments
All investments and derivative financial instruments
have been designated as financial assets "at fair value
through profit or loss". Investments are initially recognised
on the date of purchase at cost, being the fair value
of the consideration given, excluding transaction costs
associated with the investment. After initial recognition,
investments are measured at fair value, with unrealised
gains and losses on investments and impairment of investments
recognised in the Consolidated Statement of Comprehensive
Income. Commissions paid on the sale or purchase of investments
are recognised in the Consolidated Statement of Comprehensive
Income as incurred.
Fair value is the amount for which the financial instruments
could be exchanged, or a liability settled, between knowledgeable
willing parties in an arms length transaction. Fair value
also reflects the credit quality of the issuers of the
financial instruments.
For investments actively traded in organised financial
markets, fair value is determined by reference to Stock
Exchange quoted market bid prices as at the close of
business on the reporting date. If no quoted market bid
price is available at the close of business on the reporting
date, the last available market bid price is used.
Valuations of unquoted trade investments and warrants
are based on valuations provided to the Group by the
Investment Manager. These valuations are intended to
be an indication of the fair value of those investments,
using valuation techniques designed to reflect the best
estimation of the price at which they could be sold,
even though there is no guarantee that a willing buyer
might be found if the Group chose to sell the relevant
investment. The indicative fair values of the investments
are based on an approximation of the market level of
the investments. As the investments are not traded in
an active market, the indicative fair value is determined
by using valuation techniques. The Investment Manager
uses a variety of methods and makes assumptions that
are based on market conditions existing at the reporting
date. Different assumptions regarding these factors,
combined with different valuation techniques and models
used, could lead to different valuations of the financial
instruments by different parties.
All "regular way" purchases and sales of financial assets
are recognised on the "trade date", i.e. the date that
the entity commits to purchase or sell the asset. Regular
way purchases or sales are purchases or sales of financial
assets that require delivery of the asset within the time
frame generally established by regulations or convention
in the market place.
(n) Segmental Reporting
The Directors are of the opinion that the Group is engaged
in a single segment of business, being the investment business
and operates solely from Guernsey; therefore no segmental
reporting is provided.
3 OPERATING INCOME
1 Jul 2013 1 Jul 2012
to to
31 Dec 2013 31 Dec 2012
GBP GBP
Bank interest 7,865 26,485
Dividend income 50,302 74,414
Bond income - 88,046
Sundry income - 1
58,167 188,946
-------------------------------- ----------------------------
4 OPERATING EXPENSES
1 Jul 2012
1 Jul 2013 to to
31 Dec 2013 31 Dec 2012
GBP GBP
Investment Manager's fee 150,128 281,028
Accountancy fees 4,457 4,533
Administrator's fee 41,365 37,795
Registrar's fee 3,312 3,801
Directors' fees 76,861 76,533
Custody fees 14,464 20,536
Audit fee 16,510 16,780
Directors' and Officers' insurance 2,418 2,405
Annual fees 9,993 8,995
Printing and stationery 2,036 1,774
Bank interest and charges 6,220 6,485
Commissions paid 62,888 164,246
Corporate and shareholder advisory
fees 23,427 46,852
Legal and professional fees - -
Travel expenses 22,788 34,603
Sundry costs 13,128 16,344
(Profit) / loss on foreign
exchange 358,067 111,917
808,062 834,627
-------------------------------- -----------------------------
5 DIRECTORS' REMUNERATION
The Directors of the Company are paid GBP20,000 per annum.
In addition to GBP20,000 per annum, Nicholas Falla receives
an additional fee of GBP5,000 as Chairman and Robert Milroy
receives an additional fee of GBP3,000 as Chairman of the
audit committee.
The Directors of the Subsidiary are paid GBP15,000 per annum.
In addition to GBP15,000 per annum, the Chairman of the Subsidiary
receives an additional fee of GBP3,000.
6 EARNINGS PER SHARE
Earnings per Ordinary Share is calculated by dividing the
net profit/ (loss) for the Period attributable to holders
of Ordinary Shares of the Company ('Shareholders') of GBP371,894
(31 Dec 2012: loss GBP3,236,273) by the weighted average
number of Ordinary Shares in issue during the Period (39,719,569
(31 Dec 2012: 39,719,569). There are no dilutive instruments
and therefore basic and diluted earnings per Ordinary Share
are identical.
7 SUBSIDIARIES
On 27 October 2011 the Company acquired 90.41% of the voting
equity of the Subsidiary for a consideration of GBP5,000,000.
The Subsidiary is an authorised open-ended investment company
with registered number 54069. The Subsidiary was incorporated
on 10 October 2011 and listed on the official list of the
CISEA on 1 November 2011. The Administrator of the Subsidiary
is Praxis Group and the Custodian is the Royal Bank of Canada.
At the time of the acquisition, the Subsidiary had no assets
or liabilities and had not commenced trading. The Company's
holding in the Subsidiary has subsequently decreased to
53.23% of the voting equity as at 31 December 2013, due
to further issues of shares to minority investors by the
Subsidiary. Included in the Total comprehensive income for
the Period attributable to the owners of the Company is
a loss of GBP223,792 (Dec 2012: loss GBP138,846) representing
the Company's share of the Subsidiary's loss for the year.
The Subsidiary was established to realise capital growth
from a portfolio of gold and precious metals equities, with
the aim of generating a significant capital return to shareholders.
The Subsidiary invests in mid-tier and major gold and precious
metals companies with a focus on mid-tier products.
The financial year end of the Subsidiary is 30 June, which
is co-terminus with the financial year end of the Company.
8 INVESTMENTS
TOTAL TOTAL
31 Dec 2013 30 Jun 2013
GBP GBP
Opening portfolio cost 59,605,503 58,593,473
Additions - cost 11,715,983 70,999,401
Sales (14,222,771) (57,590,144)
Realised gain on investments (10,038,188) (12,397,227)
Unrealised appreciation on
valuation brought forward (31,540,334) (11,067,502)
Unrealised (depreciation)
/ appreciation on valuation
for the period 10,936,185 (20,472,832)
Closing valuation 26,456,378 28,065,169
---------------------- -------------------
Unrealised (depreciation)
/ appreciation on valuation
carried forward (20,604,149) (31,540,334)
---------------------- -------------------
IFRS 7 requires the fair value of investments to be disclosed
by the source of inputs, using a three-level hierarchy as
detailed below:
Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1);
Inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2);
Inputs for the asset or liability that are not based on
observable market data (unobservable inputs) (Level 3).
Investments held by the Group have been classified as Level
1, for those investments that are quoted and are valued
using quoted market bid prices and Level 2, for those unquoted
investments that are valued using standard modelling techniques
by the Investment Manager using observable inputs and Level
3 for the private equity investments that are valued using
a combination of methods including a comparable transaction,
market multiple approach, discounted cash flow or liquidation
analysis approaches, after taking account of foreign exchange
movements. This is in accordance with the fair value hierarchy.
Details of the value of each classification are listed in
the table below. Values are based on the market value of
the investment as at the reporting date:
Fair Value Fair Value
31 Dec 2013 30 Jun 2013
GBP GBP
Level 1 25,697,304 26,675,726
Level 2 416,017 1,016,078
Level 3 343,057 373,365
Total 26,456,378 28,065,169
-------------------------------- -----------------------------
The following table shows a reconciliation of all movements
in the fair value of financial instruments categorised within
Level 3 between the beginning and the end of the Period:
31 Dec 2013 30 Jun 2013
GBP GBP
Opening portfolio cost 3,391,077 3,391,077
Additions - cost - -
Sales - -
Realised gain on investments - -
Unrealised appreciation on
valuation brought forward (3,017,712) (737,003)
Movement in unrealised (depreciation)
/ appreciation on valuation
of the year (30,308) (2,280,709)
Closing valuation 343,057 373,365
-------------------------------- -----------------------------
There have been no transfers between Level 1 and Level 2
of the fair value hierarchy during the Period.
9 TRADE AND OTHER RECEIVABLES
31 Dec 2013 30 Jun 2013
GBP GBP
Accrued income 33,097 28,706
Prepayments 23,853 15,211
Broker debtors - 892,136
56,950 936,053
-------------------------------- -----------------------
The above carrying value of receivables is equivalent to
its fair value.
10 TRADE AND OTHER PAYABLES
(amounts falling due within
one year) 31 Dec 2013 30 Jun 2013
GBP GBP
Trade creditors 66,937 70,671
Accrued expenses 40,812 52,509
Broker creditors - 86,551
107,749 209,731
-------------------------------- -----------------------
The above carrying value of payables is equivalent to its
fair value.
11 SHARE CAPITAL
Authorised SHARES GBP
Unlimited number of Ordinary Shares
of no par value Unlimited -
============ =============================
Issued
Date of issue SHARES GBP
29 June 2009 26,000,000 -
21 December 2009 10,997,233 -
3 August 2010 2,722,336 -
Ordinary Shares in issue as at
30 June 2013 and 31 December 2013 39,719,569 -
============ =============================
Holders of Ordinary Shares are entitled to receive, and
participate in, any dividends out of income; other distributions
of the Company available for such purposes and resolved
to be distributed in respect of any accounting period; or
other income or right to participate therein.
On a winding up, Ordinary shareholders are entitled to the
surplus assets remaining after payment of all the creditors
of the Company.
Ordinary shareholders also have the right to receive notice
of and to attend, speak and vote at general meetings of
the Company and each Member being present in person or by
proxy or by a duly authorised representative at a meeting
shall upon a show of hands have one vote and upon a poll
each such holder present in person or by proxy or by a duly
authorised representative shall have one vote in respect
of every Ordinary Share held by him.
12 SHARE PREMIUM GBP
Premium on shares issued 29 June
2009 26,000,000
Premium on shares issued 21 December
2009 14,667,020
Premium on shares issued 3 August
2010 3,818,894
Issue costs (1,883,660)
Share premium as at 30 June 2013
and 31 December 2013 42,602,254
=============================
Under IAS 32 'Financial Instruments: Presentation', transaction
costs of any equity transaction are accounted for as a deduction
from equity to the extent they are incremental costs directly
attributable to the equity transaction that otherwise would
have been avoided.
13 NON-CONTROLLING INTEREST
The Subsidiary has a 46.77% non-controlling interest.
GBP
Balance as at 1 July 2013 2,191,066
Share of loss for the period (223,792)
Adjustment arising from change in non-controlling
interest 5,000
Balance as at 31 December 2013 1,972,274
==============================
14 FINANCIAL INSTRUMENTS
The Group's main financial instruments comprise:
Cash and cash equivalents that arise directly from the
(a) Group's operations; and
(b) Quoted and unquoted investment securities.
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Group's financial instruments
are market price risk, credit risk, liquidity risk, interest
rate risk, foreign exchange risk and capital management
risk. The Board regularly reviews and agrees policies for
managing each of these risks and these are summarised below:
(a) Market Price Risk
Market price risk arises mainly from uncertainty about
future prices of financial instruments held. It represents
the potential loss the Group might suffer through holding
market positions in the face of price movements. The Investment
Manager actively monitors market prices and reports to
the Board as to the appropriateness of the prices used
for valuation purposes. A list of the top 10 investments
held by the Group at the period end is shown in the Schedule
of Top 10 Investments as contained within this report.
If the value of the Group's investment portfolio were to
increase by 30%, it would represent a gain of GBP7,936,913
(30 Jun 2013: GBP8,419,551). This would cause the net asset
value of the Group to rise by 25.76%. (30 Jun 2013: 27.46%).
If the value of the Group's investment portfolio were to
decrease by 30%, it would represent a decrease of GBP7,936,913
(30 Jun 2013: GBP8,419,551). This would cause the net asset
value of the Group to fall by 25.76%. (30 Jun 2013: 27.46%).
Some of the market price risk is mitigated by the Investment
Manager's use of various put and call options and Exchange
Traded Funds.
(b) Credit Risk
Credit risk is the risk that an issuer or counterparty will
be unable or unwilling to meet a commitment that it has
entered into with the Group. The Directors receive financial
information on a regular basis which is used to identify
and monitor risk.
It is Group policy not to invest more than 20% of the gross
assets of the Group in the securities of any one company
or group at the time the investment is made.
The Group has no significant concentration of credit risk,
with exposure spread over a large number of investments.
At 31 December 2013 the Group's largest exposure to a single
investment was GBP2,549,866 (30 Jun 2013: GBP3,195,273),
which represents 9.64% (30 Jun 2013: 11.39%) of the total
market value of investments.
Investors should be aware that the prospective returns to
shareholders mirror the returns under the investments held
or entered into by the Group and that any default by an
issuer of any such investment held by the Group would have
a consequential adverse effect on the ability of the Group
to pay some or all of the entitlement to shareholders. Such
a default might, for example, arise on the insolvency of
an issuer of an investment.
The Group's financial assets exposed to credit risk are
as follows:
31 Dec 2013 30 Jun 2013
GBP GBP
Investments in equities/warrants 26,456,378 28,065,169
Cash and cash equivalents 4,407,111 1,868,097
Trade and other receivables 56,950 936,053
30,920,439 30,869,319
-------------------------------------------- ------------------------------
The Group is exposed to credit risk in respect of its cash
and cash equivalents, arising from possible default of the
relevant counterparty, with a maximum exposure equal to
the carrying value of those assets. The credit risk on liquid
funds is limited because the counterparties are banks with
high credit ratings assigned by international credit-rating
agencies. The Group monitors the placement of cash balances
on an on-going basis.
The Group invests its cash and cash equivalents with Royal
Bank of Canada (Channel Islands) Limited and Barclays Private
Clients International Limited, which had a Standard and
Poor's rating of AA- and A as at the date of signing of
the financial statements.
The investments of the Group are held in custody by Anson
Custody Limited or Royal Bank of Canada (Channel Islands)
Limited ("RBCCI"), (together the "Custodians"). Bankruptcy
or insolvency of the Custodians may cause the Group's rights
with respect to investments held by the Custodians to be
delayed. Investments held with Anson Custody Limited are
held in a Crest account maintained by Anson Registrars Limited
in a sub-account designated exclusively for the Group. This
ensures that the investments are ring fenced and will be
protected should Anson Custody Limited become bankrupt or
insolvent.
RBCCI mitigate risk by using a sub custodian network comprising
top-rated and well respected counterparties. The custodian
network is monitored on an on-going basis to ensure that
each one continues to meet RBCCI's stringent criteria.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in realising assets or otherwise raising funds
to meet financial commitments. The Group's main financial
commitment is its on-going operating expenses.
The Investment Manager ensures that the Group has sufficient
liquid resources available to fulfil its operational plans
and to meet its financial obligations as they fall due.
The table below details the residual contractual maturities
of financial liabilities:
As at 31 December 2013 Over 1
1-12 months year
GBP GBP
Trade creditors 66,937 -
Accrued expenses 40,812 -
Broker creditors -
107,749 -
------------------------------------------------------ -----------------------------
As at 30 June 2013 Over 1
1-12 months year
GBP GBP
Trade creditors 70,671 -
Accrued expenses 52,509 -
Broker creditors 86,551 -
209,731 -
------------------------------------------------------ -----------------------------
Note that all amounts included within the 1-12 months column
above have a contractual maturity within 3 months.
(d) Interest Rate Risk
The Group holds cash in several bank accounts, the return
on which is subject to fluctuations in market interest
rates.
Other than cash and cash equivalents, none of the assets
or liabilities of the Group attract or incur interest.
The following table details the Group's exposure to interest
rate risks:
As at 31 December 2013:
Floating
less than Non-interest
1 month bearing Fixed Total
GBP GBP GBP GBP
Assets
Designated as
at fair value
through profit
or loss on initial
recognition:
Investments - 26,154,391 301,987 26,456,378
Loans and
receivables: -
Accrued income - 33,097 - 33,097
Prepayments - 23,853 - 23,853
Broker debtors - - - -
Cash and cash
equivalents 4,407,111 - - 4,407,111
----------------------- -------------------------------- -------------------------- -----------------------------
Total Assets 4,407,111 26,211,341 301,987 30,920,439
----------------------- -------------------------------- -------------------------- -----------------------------
Liabilities
Financial
liabilities
measured at
amortised
cost:
Trade creditors - 66,937 - 66,937
Accrued expenses - 40,812 - 40,812
Broker creditors - - - -
Total Liabilities - 107,749 - 107,749
----------------------- -------------------------------- -------------------------- -----------------------------
Total interest
sensitivity gap 4,407,111
-----------------------
As at 30 June 2013:
Floating
less than Non-interest
1 month bearing Fixed Total
GBP GBP GBP GBP
Assets
Designated as
at fair value
through profit
or loss on initial
recognition:
Investments - 27,736,503 328,666 28,065,169
Loans and receivables: -
Accrued income - 28,706 - 28,706
Prepayments - 15,211 - 15,211
Broker debtors - 892,136 - 892,136
Cash and cash
equivalents 1,868,097 - - 1,868,097
----------------------- -------------------------- -------------------- -----------------
Total Assets 1,868,097 28,672,556 328,666 30,869,319
----------------------- -------------------------- -------------------- -----------------
Liabilities
Financial liabilities
measured at
amortised cost:
Trade creditors - 70,671 - 70,671
Accrued expenses - 52,509 - 52,509
Broker creditors - 86,551 - 86,551
Total Liabilities - 209,731 - 209,731
----------------------- -------------------------- -------------------- -----------------
Total interest
sensitivity
gap 1,868,097
-----------------------
Interest rate sensitivity
If interest rates had been 25 basis points higher and all
other variables were held constant, the Group's net loss
attributable to Shareholders for the period ended 31 December
2013 would have decreased by approximately GBP5,509 (30
Jun 2013: GBP4,670 increase in net gain) or 0.02%(30 Jun
2013: 0.02%) of Net Assets due an increase in the amount
of interest receivable on the bank balances.
If interest rates had been 25 basis points lower and all
other variables were held constant, the Group's net loss
attributable to Shareholders for the period ended 31 December
2013 would have decreased by approximately GBP5,509 (30
Jun 2013: GBP4,670) or 0.02%(30 Jun 2013: 0.02%) of Net
Assets due a decrease in the amount of interest receivable
on the bank balances.
(e) Foreign Exchange Risk
A substantial proportion of the Group's portfolio is invested
in overseas securities and movements in exchange rates can
significantly affect their Sterling value. The Group does
not normally hedge against foreign currency movements affecting
the value of the investment portfolio, but takes account
of this risk when making investment decisions.
The Group undertakes certain transactions denominated in
foreign currencies. Hence, exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed by minimising
the amount of foreign currency held at any one time.
The carrying amounts of the Group's foreign currency denominated
monetary assets at the reporting date are as follows:
31 Dec 2013 30 Jun 2013
GBP GBP
Australian Dollar 6,240,904 6,579,996
Canadian Dollar 16,387,162 14,437,911
US Dollar 3,936,127 7,037,398
Norwegian Krone - -
26,564,193 28,055,305
-------------------------------------- -------------------------------
As the Group does not invest in Eurozone equities, with
the exception of the United Kingdom, the Investment Manager
does not consider that there is any increased risk to the
Group as a result of the Eurozone crisis and the directors
have considered whether the UK assets have suffered impairment
in value in the current economic climate.
(f) Capital Management
The investment objective of the Group is to provide shareholders
with attractive long term returns, expected to be in the
form of capital, through a diversified portfolio.
As the Company's Ordinary Shares are traded on the SFM,
the Ordinary Shares may trade at a discount to their NAV
per Share on occasion. However, in structuring the Group,
the Directors have given detailed consideration to the discount
risk and how this may be managed.
The Group monitors capital on the basis of the carrying
amount of equity as presented on the face of the Consolidated
Statement of Financial Position.
16 RELATED PARTY TRANSACTIONS AND DIRECTORS BENEFICIAL INTERESTS
The Group is managed by the Investment Manager, a wholly-owned
FCA authorised and regulated subsidiary of Altus Strategies
Limited. Altus Strategies Limited owns 503,699 Ordinary
Shares in the Company and 500,000 Ordinary Shares (5.32%)
in the Subsidiary.
The Director David Netherway is a non-executive chairman
of Altus Strategies Limited, which as mentioned above, owns
503,699 shares (1.27%) in the Company. David Netherway is
also Non-Executive Chairman of Kilo Goldmines Limited, whose
equities and warrants are invested in by the Group. The
total investment in Kilo Goldmines Limited represents 2.61%
of the market value of the Group's investments.
The Director Nick Falla holds 30,000 shares (0.08%) in the
Company.
The Director David Gelber holds 53,000 shares (0.13%) in
the Company. This is held as part of a nominee trust holding
in the Company.
The Director Robert Milroy holds 30,000 shares (0.08%) in
the Company.
Under the Investment Management Agreement between the Investment
Manager and the Company, the Investment Manager is entitled
to receive fees of the greater of 0.85% per annum of the
Company's NAV or GBP150,000 per annum.
Under the Investment Management Agreement between the Investment
Manager and the Subsidiary, the Investment Manager is entitled
to receive fees of 1.5% per annum of the Subsidiary's NAV,
subject to the Total Expense Ratio not exceeding 2%.
During the Period the Group incurred GBP150,128 (Dec 2012:
GBP281,028) of fees, of which GBP62,170 (June 2013: GBP61,398)
was outstanding at the Period end as shown in trade and
other payables.
During the Period, the Group was charged travel expenses
totalling GBP22,788 (Dec 2012: GBP34,603) by the Investment
Manager.
The Investment Manager agreed to rebate the Company in
full for any management fees paid by the Subsidiary. During
the year no such fees had been received by the Investment
Manager from the Subsidiary.
The Investment Manager is also entitled to receive a performance
fee (the "Performance Fee") from both the Company and
the Subsidiary. The first component of the Performance
Fee is calculated for the first time in respect of the
financial accounting period first ending following the
second anniversary of the date of Admission. The fee is
equal to 20% of the excess of the NAV per Share as at
the end of the financial accounting period (adjusted to
account for dividends and returns of capital paid out
during the period and in respect of which the Manager
has been paid or is to be paid the second component of
the Performance Fee) over the basic performance hurdle,
this being an amount equal to the issue price increased
by 10% of the Issue Price per annum up to the end of the
relevant performance period.
Thereafter this fee shall be paid on an annual basis in
respect of each financial period subject to the basic
performance hurdle and a high watermark having been exceeded.
The high watermark is the NAV at the end of the financial
period in respect of which the last Performance Fee was
paid. If, however, the high watermark is not exceeded
for any consecutive period of three years it shall be
re-based to a value equal to the NAV as at the end of
the third financial period. The basic performance hurdle,
as described above, must however still be exceeded in
order for this component of the Performance Fee to be
payable.
The first component of the Performance Fee will be paid
on a per Share basis, multiplied by the time weighted
average of the number of Shares in issue in the relevant
performance period (or since admission in the first performance
period) (together, if applicable, with an amount equal
to the VAT thereon). In the event that there is a further
issue of Ordinary Shares, a redemption of Ordinary Shares
or other capital reorganisation of the Company or Subsidiary,
the calculation of the Performance Fee will be adjusted
appropriately.
The second component of the Performance Fee is an amount
equal to 20% of the sum of all dividends, distributions
and other returns of capital paid out to Shareholders
of the Company and Subsidiary during the relevant performance
period (but excluding redemptions and share buy backs
that are deemed distributions under The Companies (Guernsey)
Law, 2008, subject to the performance hurdle having been
satisfied.
The performance hurdle is the requirement that the NAV
on the relevant calculation date must exceed an amount
equal to the Issue Price increased by 10% of the Issue
Price per annum up to the end of the relevant performance
period.
No performance fee provision has been made for the Period
as the hurdle has not been met. No Performance Fee provision
has been made for the Subsidiary for the Period as the
performance hurdle has not been met.
Nimrod Capital LLP is the Company's Corporate and Shareholder
Adviser and is entitled to receive fees of 0.15% of the
Company's NAV per annum. During the Period the Group incurred
GBP23,427 (Dec 2012: GBP46,852) of costs, of which GBP10,910
(Jun 2013: GBP10,391) was outstanding at the Period end
as shown in accrued expenses.
TOP 10 INVESTMENTS IN SECURITIES AS AT 31 DECEMBER 2013
31 Dec 2013
Investment* Cost Market Unrealised
Value profit / (loss)
GBP GBP GBP
Base Resources Limited 2,624,929 2,549,866 (75,063)
Nevsun Resources Com
Npv 2,317,807 1,994,729 (323,078)
Oceanagold Corp 1,959,674 1,901,391 (58,283)
Guyana Goldfields Inc 2,974,348 1,351,839 (1,622,509)
Mountain Province Diamonds 1,186,572 1,158,724 (27,848)
Endeavour Mining Corp 5,852,917 1,150,146 (4,702,771)
Kennady Diamonds 350,000 1,100,637 750,637
Fission Uranium 614,387 1,080,745 466,358
Mineral Deposits 1,362,175 1,066,916 (295,259)
Panoro Minerals Com
Npv 2,006,141 1,034,342 (971,799)
21,248,949 14,389,335 (6,859,614)
----------------- ----------------------- -----------------------
* Each line represents the amalgamated holdings in an entity
if the Group has holdings in more than one share class
in the same company.
TOP 10 INVESTMENTS IN SECURITIES AS AT 30 JUNE 2013
30 Jun 2013
Investment * Cost Market Unrealised
Value profit / (loss)
GBP GBP GBP
Base Resources Ltd 3,267,138 3,195,273 (71,865)
Endeavour Mining Corp 6,825,087 1,596,857 (5,228,230)
Nevsun Resources Ltd 1,922,035 1,518,005 (404,030)
ETFS Physical Palladium 1,624,643 1,490,416 (134,227)
Detour Gold Corp 4,031,861 1,436,851 (2,595,010)
Uranium Participation
Corp 1,469,266 1,410,051 (59,215)
ETFS Physical Platinum 1,585,539 1,384,542 (200,997)
Guyana Goldfields
Inc 3,496,264 1,278,219 (2,218,045)
iShares Silver Trust 1,549,997 1,126,714 (423,283)
SPDR Gold Shares 1,226,189 964,269 (261,920)
26,998,018 15,401,196 (11,596,821)
------------------- ------------------------- ----------------------------
* Each line represents the amalgamated holdings in an entity
if the Group has holdings in more than one share class in
the same company.
ADVISORS & CONTACT INFORMATION
Key Information
Exchange
Ticker
Listing Date
Fiscal Year End
Base Currency
ISIN
SEDOL
Country of Incorporation
Management and Administration
Registered Office
Altus Resource Capital Limited
PO Box 156
Frances House
Sir William Place
St Peter Port
Guernsey GY1 4EU
Investment Manager
Altus Capital Limited
14 Station Road
Didcot
Oxfordshire OX11 7LL
Placing and Corporate and Shareholder Advisory Agent
Nimrod Capital LLP
3 St Helen's Place
London EC3A 6AB
SFM of the LSE/ CISEA
ARCL/ ARC
30 June 2009/22 December 2009
30 June
GBP
GG00B54BPN15
B54BPN1
Guernsey - Registration number 50318
Secretary and Administrator
JTC Fund Managers (Guernsey) Limited
PO Box 156
Frances House
Sir William Place
St Peter Port
Guernsey GY1 4EU
Registrar
Anson Registrars Limited
P.O. Box 426, Anson Place
Mill Court, La Charroterie
St Peter Port
Guernsey GY1 3WX
Auditor
Deloitte LLP
Regency Court
Glategny Esplanade
St Peter Port
Guernsey GY1 3HW
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LKLFFZLFLBBL
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