TIDMFLOR
RNS Number : 8554P
Fluormin PLC
10 October 2011
10 October 2011 07:00
Fluormin Plc
("Fluormin", the "Company" or the "Group")
Results for Year Ended June 2011
LONDON, UK -- Fluormin Plc (AIM: FLOR) is pleased to announce
its results for the twelve months ended 30 June 2011, and
completion of its transformation into a fluorspar producer.
Operational and Financial Highlights
-- Agreement to acquire controlling interest in Sallies Limited
("Sallies"), a South African producer of fluorspar;
-- Agreement to acquire 20 per cent interest in Kenya Fluorspar
Company Limited ("KFC") - a producer of fluorspar in Kenya;
-- Successful financings totalling approx. GBP7,500,000;
-- Formation of trading company, FluorOne Trading Limited, in
conjunction with Jeff Kofsky, marketing director and leading trader
of fluorspar.
Recent Activity
-- Admission of Company to AIM as Fluormin plc;
-- Completion of Sallies and KFC acquisitions;
-- Disposal of non-core Tunisian base metal assets for US$10.2
million to subsidiaries of Glencore International AG and securing
of off-take agreements on these assets;
-- Repayment of US$500,000 shareholder loan by KFC;
-- Successful financing of approx. GBP4.5 million at GBP1.05 per
share;
-- Current cash position of approx. US$20 million
Review of 2011 Financial Results
The Group incurred a net loss of GBP2,796,000 and GBP914,000 for
the years ended 30 June 2011 and 2010, respectively. As the
acquisition of a controlling interest in Sallies was post balance,
the Company did not have producing operations in these fiscal
periods and incurred expenses in respect of its transformation from
a base metals explorer to a fluorspar producer. In connection with
this transformation, the Company's earnings were impacted by
employment related costs of GBP814,000.
The information contained in this announcement an does not
constitute the Group's statutory accounts as defined in section 434
of the Companies Act 2006 but is derived from those accounts. The
statutory accounts for the year ended 31 June 2011 have been
approved by the Board and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting notice of
which will be sent to shareholders shortly. The auditors have
reported on those accounts and their report was unqualified, with
no matters by way of emphasis, and did not contain statements under
section 498(2) of the Companies Act 2006 (regarding adequacy of
accounting records and returns) or under section 498(3) (regarding
provision of necessary information and explanations).
Enquiries:
Fluormin plc
Al Gourley, Chief Executive
Officer (44)020-7556-0940, agourley@fluormin.com
Westhouse Securities
Martin Davison (44)020 7601 6100
Tim Feather 44)020 7601 6100
Tavistock Communications
Lydia Eades (44)020 7290 3150, leades@tavistock.co.uk
Jos Simson (44)020 7290 3150, jsimson@tavistock.co.uk
For further information please visit www.fluormin.com.
About Fluormin Plc
Fluormin plc is a producer of acid grade fluorspar, an
industrial mineral widely used in the chemical and aluminum
industries for the making of products such as
hydrochloro-fluorocarbons (e.g. freon gas) and aluminum
fluorite.
Fluorspar is sold in two common grades - acid grade and
metallurgical grade, also known as acidspar and metspar. The major
uses of fluorspar are in the production of hydrofluoric acid or
hydrogen fluoride (HF) (acidspar), aluminium production (acidspar)
and steelmaking (metspar). As with rare earths, China is a major
factor in the fluorspar market, as it dominates the production and
consumption of fluorspar and has been the leading supplier of
fluorspar for 20 years. In the last decade, China has decreased its
exports of fluorspar from approximately 0.85 mtpa to no more than
0.5 mtpa. It is expected that - as China continues to build HF
plants and downstream value-added products - its exports may
decrease further. In the last 12 months, Europe and the United
States have both placed fluorspar on their list of critical
minerals.
The Group's principal asset is the Witkop fluorspar mine, which
is controlled by Fluormin through a 63 per cent interest in Sallies
Limited. The capacity of the mine is 140,000 tpa and it has been
operating for decades with substantial resources and reserves.
Fluormin also has production exposure through its 20% holding in
Kenya Fluorspar Company Limited (KFC), which operates a mine at
Kimwarer, Kenya. The mine will produce in excess of 100,000 tonnes
of fluorspar in 2011.
The Group's other key assets include its interest in FluorOne
Trading Limited, a trading business established by the Company to
trade fluorspar (including non-Group product), fluorspar off-take
agreements with subsidiaries of Glencore International AG
(Glencore) in respect of the Bou Jabour and Fej Lahdoum base metal
projects, which are advanced exploration projects under active
exploration and development by Glencore, and the Zriba-Guebli
project (and former fluorspar mine) in Tunisia.
Forward Looking Information
Some of the statements contained in this news release include
"forward looking statements" that express expectations as to future
events or results. Forward looking statements involve a number of
risks and uncertainties and the Company cannot give assurance that
such statements will prove to be correct.
Chairman's Letter
The year ended 30 June 2011, and subsequently to the date of
this report, witnessed a major transformation of Fluormin in terms
of its Operations, Finance, Management and prospects.
Management
On the Management front, the Company was pleased to secure the
commitment of Al Gourley and Mark Bolton to join the Company as
co-CEOs, effective from September and November, 2011, respectively.
Both have substantial experience in mining finance and resource
M&A transactions and will be key to executing the Company's
growth plans.
The Board was strengthened during and after the reporting period
by the appointments of Jeff Kofsky and Sean Murray, both having
substantial experience in the industrial minerals industry. I
joined the Board and assumed the role of Chairman in January
2011.
We want to thank Richard Linnell and Dunbar Dales, who resigned
from the Board on 15 June 2011 and 6 August 2011, respectively, for
their efforts over the past two years.
Operations
Operationally, the Company holds the controlling stake in a
producing mine in South Africa (Sallies), a minority stake in a
producing mine in Kenya (KFC), and exploration and off-take
agreements in Tunisia. Most of these assets were acquired after the
year-end, although the agreements that facilitated these
transactions were announced as early as December 2010.
In South Africa, the Company holds a 63% interest (its original
interest having been diluted through conversion of certain debt
into equity) in Sallies, which is a substantial world-class
producer of acid grade fluorspar. Sallies recommenced mining
operations with financial assistance from the Company in March
2011. Sallies is expected to generate substantial cash flow for the
Company during the financial year ending June 2012, as fluorspar
prices have increased quite dramatically during the reporting
period from approximately US$300 to over US$400 FOB China.
In Kenya, the Company holds a 20% interest in KFC, also a
substantial producer of acid grade fluorspar. KFC benefits from
very low operating costs and has generated sufficient cash flow
following the world financial crisis to repay shareholder loans,
including a shareholder loan from the Company for US$0.5 million,
the final payment of which was made on 07 October 2011. KFC expects
to have a substantial cash balance in excess of working capital
requirements by the end of the current calendar year.
The Company also successfully disposed of its Tunisian base
metals exploration properties, Bou Jabour and Fej Lahdoum,
subsequent to the year end. The Company retains an indirect
interest in these base metal assets through fluorspar off-take
agreements, which the Company believes could lead to a very low
cost source of fluorspar supply in the future.
Financial
The Group made a consolidated loss for the year ended 30 June
2011 of GBP2.8 million (2010 - GBP914,000). Most of the loss arose
from professional fees incurred in the relisting of the Company and
the various acquisitions and restructurings undertaken, as well as
the expensing of options used to attract and retain the present
management and members of the Board.
The Company raised in excess of GBP18 million during the
financial year, and subsequently and up to the date of this report,
through a combination of asset disposals and fundraisings. The
Company expects to use some of its cash holdings to complete the
acquisition of the minority shareholdings and debenture holdings it
does not presently hold in Sallies. This is expected to cost in the
order of US$11 million, assuming the shareholders and debenture
holders all accept cash (in lieu of shares in the Company), and is
expected to complete in December 2011.
The capital structure of the Company changed significantly over
the reporting period. The Company issued 93 million new ordinary
shares in September 2010 at 1.25 pence per share raising GBP1.2
million. In December 2010 and January 2011 a further 361.2 million
new ordinary shares were issued at 1.75 pence per share to raise
GBP6.3 million. In addition, in August 2011, 25 million shares were
issued to Albert Gourley and 15 million were issued to Mark Bolton,
both at 2 pence per share.
With effect from 31 August 2011, the Company's share capital was
consolidated on the basis of a 25:1 share consolidation, resulting
in the outstanding share capital of the Company being substantially
reduced. As of the date of this letter, and following the Company's
issuance of 3.6 million new ordinary shares (post-consolidation) in
September 2011 at GBP1.05 per share raising GBP3.8 million, the
Company has an issued share capital of approximately 54 million
ordinary shares.
Outlook
As for rare earths, China is the predominant factor in the price
of fluorspar. Over the last 20 years, China has moved from
exporting 80% of their fluorspar production to exporting 10%. China
now consumes over 50% of the world's production of fluorspar; and
it continues to build plants for the production of hydrofluoric
acid, the major use of acid grade fluorspar. As a result, exports
of the raw material have diminished over time and are expected to
continue to diminish into the future.
Accordingly, the Company's outlook is positive. Our new
management team is well suited to take advantage of the Company's
anticipated cash flows to build Fluormin into a significant
business, and we are confident that your Company has never been
better positioned for success.
Nicholas Davidoff
Chairman
Chief Executive's Report
Recent Accomplishments
During the year ended 30 June 2011 and subsequently, up to the
date of its report, the Company enjoyed continued support from its
major shareholders, Firebird Global Master Fund Ltd and Firebird
Global Master Fund II Ltd. With such support, the Company was able
to
-- raise over GBP11 million;
-- acquire substantial interests in fluorspar assets;
-- dispose of assets for consideration exceeding US$10.25
million; and
-- build a trading business in conjunction with a leading trader
of fluorspar.
The Company completed a number of transactions with several
different parties over the financial year, and subsequent to
year-end, in order to acquire its fluorspar assets and relist as a
public company, including financings, acquisition agreements,
disposals and other transactions. Management is now better able to
focus on managing these assets and growing the business from a base
of cash-producing assets and a strong statement of financial
position.
Fluorspar Assets
The Company currently holds as of the date of this report:
-- a controlling 63 per cent stake in South African fluorspar
producer Sallies;
-- a 20 per cent stake in Kenyan fluorspar producer KFC;
-- two fluorspar off-take agreements with subsidiaries of
Glencore International AG, which could offer very low cost sources
of future fluorspar supply;
-- a 100 per cent interest in the former Zriba-Guebli mine in
Tunisia, which merits substantial exploration work; and
-- a 49 per cent interest in FluorOne Trading Limited.
Sallies and KFC, together, produce well in excess of 200,000
tonnes per annum of acid grade fluorspar (or acidspar). Sallies has
a stated capacity of 140,000 tonnes per annum, whilst KFC has a
stated capacity of approximately 100,000 tonnes per annum. KFC is
expected to meet its name-plate capacity in the calendar year
ending December 2011, whilst Sallies requires continued investment
in the opening of mine pits and build-up of ore feed to meet its
name-plate capacity. KFC benefits from a much lower cost of
production, but its product does contain higher levels of phosphate
which can impact on its pricing.
Fluorspar Uses
The mineral fluorite, commonly known as fluorspar, is the
primary commercial source of fluorine. Fluorspar is sold in two
common grades - acid grade and metallurgical grade, also known as
acidspar and metspar. The major uses of fluorspar are in the
production of hydrofluoric acid or hydrogen fluoride (HF)
(acidspar), aluminium production (acidspar) and steelmaking
(metspar). HF is used to manufacture virtually all organic and
inorganic fluorine-containing compounds, including fluoropolymers
and fluorocarbons, as well as aluminium trifluoride. The most
important use of fluorocarbons is as refrigerants in the domestic,
industrial and automotive sectors; this accounts for approximately
45 per cent of HF usage.
There is very limited potential to recycle the majority of
fluorochemicals and the potential for substitution is very low.
Furthermore, the newer generations of refrigerants has consistently
used more fluorspar per kilogram of end product than the products
they replaced.
Fluorspar Market
Demand for acid grade fluorspar (acidspar) grew steadily from
2000 until 2007 from 2.7 million tonnes per annum (mtpa) to 3.8
mtpa. This was largely fueled by rising living standards in
developing countries, which pushed up demand for fluorspar's
derivative chemical products, particularly those used as
refrigerants (e.g. freezers, fridges and air conditioning units in
homes, cars and industrial cooling applications).
Consumption during this period was in excess of production for
each year, except 2001 and 2004 when there was a balanced market.
Until 2007, this deficit was partially met by sales from the US
strategic stockpile, which is now substantially depleted. In 2008,
demand started to drop as a result of the international financial
crisis and then collapsed in 2009, as consumers reduced stocks.
Demand recovered slowly through 2010 and accelerated during the
first quarter of 2011 as Chinese supplies became tighter.
China is a major factor in the fluorspar market. China dominates
the production and consumption of fluorspar and has been the
leading supplier of fluorspar for 20 years. Nevertheless, in the
last decade, China has decreased its exports of fluorspar from
approximately 0.85 mtpa to no more than 0.5 mtpa. It is expected
that - as China continues to build HF plants and downstream
value-added products - its exports may reduce further or cease
altogether.
In the last 12 months, Europe and the United States have both
placed fluorspar on their list of critical minerals.
A Gourley
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2011
Notes 2011 2010
-------------------------------------------- ----- ------- -------
GBP'000 GBP'000
-------------------------------------------- ----- ------- -------
Continuing Operations
-------------------------------------------- ----- ------- -------
Exploration expenses (116) (275)
-------------------------------------------- ----- ------- -------
Gross loss (116) (275)
-------------------------------------------- ----- ------- -------
Administrative expenses (2,614) (639)
-------------------------------------------- ----- ------- -------
Operating loss (2,730) (914)
-------------------------------------------- ----- ------- -------
Investment income 61 -
-------------------------------------------- ----- ------- -------
Share in (loss) of joint venture 5 (4) -
-------------------------------------------- ----- ------- -------
Income tax expense - -
-------------------------------------------- ----- ------- -------
(Loss) for the period from continuing
operations (2,673) (914)
-------------------------------------------- ----- ------- -------
Discontinued Operations
-------------------------------------------- ----- ------- -------
(Loss) for the period from discontinued
operations (123) -
-------------------------------------------- ----- ------- -------
Total comprehensive (loss) for the year
attributable to the equity holders of
the parent (2,796) (914)
-------------------------------------------- ----- ------- -------
(Loss) per share
-------------------------------------------- ----- ------- -------
Basic and diluted (loss) per share from
continuing operations after tax (pence) 3 (15.31) (4.41)
-------------------------------------------- ----- ------- -------
Basic and diluted (loss) per share from
discontinuing operations after tax (pence) 3 (0.70) (0.82)
-------------------------------------------- ----- ------- -------
Basic and diluted (loss) per share from
continuing and discontinuing operations
after tax (pence) 3 (16.01) (6.23)
-------------------------------------------- ----- ------- -------
The Company has taken advantage of s.408 of the Companies Act
2006 not to present its own Income Statement.
COMPANY STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2011
Notes 2011 2010
------------------------------------ -------- --------
GBP'000 GBP'000
------------------------------------ -------- --------
(Loss) for the period (2,840) (962)
------------------------------------- -------- --------
Other comprehensive income - -
------------------------------------- -------- --------
Total comprehensive (loss)
for the period (2,840) (962)
------------------------------------- -------- --------
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
As at 30 June 2011
Group Company
--------------------------------- ----- ----------------- -----------------
Notes 2011 2010 2011 2010
--------------------------------- ----- -------- ------- -------- -------
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ----- -------- ------- -------- -------
Non-current assets
--------------------------------- ----- -------- ------- -------- -------
Property, plant and equipment 38 43 1 -
--------------------------------- ----- -------- ------- -------- -------
Investments 4 776 - 1,087 -
--------------------------------- ----- -------- ------- -------- -------
Share in assets of joint venture 5 311 - - -
--------------------------------- ----- -------- ------- -------- -------
1,125 43 1,088 -
--------------------------------- ----- -------- ------- -------- -------
Current assets
--------------------------------- ----- -------- ------- -------- -------
Trade and other receivables 6 89 44 81 38
--------------------------------- ----- -------- ------- -------- -------
Loans to affiliated companies 6 3,864 - 3,819 -
--------------------------------- ----- -------- ------- -------- -------
Cash and cash equivalents 7 1,280 461 1,277 454
--------------------------------- ----- -------- ------- -------- -------
Current liabilities 5,233 505 5,177 492
--------------------------------- ----- -------- ------- -------- -------
Trade and other payables 8 (382) (74) (374) (59)
--------------------------------- ----- -------- ------- -------- -------
(382) (74) (374) (59)
--------------------------------- ----- -------- ------- -------- -------
Net current assets 4,851 431 4,803 433
--------------------------------- ----- -------- ------- -------- -------
Net assets 5,976 474 5,891 433
--------------------------------- ----- -------- ------- -------- -------
Equity
--------------------------------- ----- -------- ------- -------- -------
Share capital 9 3,805 1,079 3,805 1,079
--------------------------------- ----- -------- ------- -------- -------
Share premium account 12,199 7,441 12,199 7,441
--------------------------------- ----- -------- ------- -------- -------
Share option reserve 862 48 862 48
--------------------------------- ----- -------- ------- -------- -------
Retained loss (10,890) (8,094) (10,975) (8,135)
--------------------------------- ----- -------- ------- -------- -------
Total equity 5,976 474 5,891 433
--------------------------------- ----- -------- ------- -------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2011
Ordinary Preference Share
Share Share Share Option Retained
Capital Capital Premium Reserve Earnings Total
------------------- --------- ----------- -------- ---------- ----------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- ----------- -------- ---------- ----------- --------
Balance at
1 July 2009 546 - 6,474 229 (7,362) (113)
-------------------------- --------- ----------- -------- ---------- ----------- --------
Loss for the
year - - - - (914) (914)
-------------------------- --------- ----------- -------- ---------- ----------- --------
Other
comprehensive
income (loss) for
the year - - - - - -
------------------- --------- ----------- -------- ---------- ----------- --------
Issue of convertible
preference
shares in the
year - 133 367 - - 500
-------------------------- --------- ----------- -------- ---------- ----------- --------
Conversion
of preference
shares in the
year 133 (133) - - - -
-------------------------- --------- ----------- -------- ---------- ----------- --------
Issue of ordinary
shares in the
year 400 - 600 - - 1,000
-------------------------- --------- ----------- -------- ---------- ----------- --------
Share based
payments - - - 1 - 1
-------------------------- --------- ----------- -------- ---------- ----------- --------
Transfer from
share option
reserve - - - (182) 182 -
-------------------------- --------- ----------- -------- ---------- ----------- --------
Balance
at 30 June
2010 1,079 - 7,441 48 (8,094) 474
------------- ------- -------------- ----------- ------------ -------------- -------------------
Loss for
the year - - - - (2,796) (2,796)
------------- ------- -------------- ----------- ------------ -------------- -------------------
Issue of
ordinary
shares in
the year 2,726 - 4,758 - - 7,484
------------- ------- -------------- ----------- ------------ -------------- -------------------
Share based
payments - - - 814 - 814
------------- ------- -------------- ----------- ------------ -------------- -------------------
Balance
at 30 June
2011 3,805 - 12,199 862 (10,890) 5,976
------------- ------- -------------- ----------- ------------ -------------- -------------------
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2011
Ordinary Preference Share
Share Share Share Option Retained
Capital Capital Premium Reserve Earnings Total
--------------- --------- ----------- -------- -------- --------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- ----------- -------- -------- --------- --------
Balance at
1 July 2009 546 - 6,474 229 (7,355) (106)
--------------- --------- ----------- -------- -------- --------- --------
Profit for
the year - - - - (962) (962)
--------------- --------- ----------- -------- -------- --------- --------
Other
comprehensive
income (loss)
for the year - - - - - -
--------------- --------- ----------- -------- -------- --------- --------
Issue of
preference
shares in the
year - 133 367 - - 500
--------------- --------- ----------- -------- -------- --------- --------
Conversion
of preference
shares in the
year 133 (133) - - - -
--------------- --------- ----------- -------- -------- --------- --------
Issue of
ordinary
shares in the
year 400 - 600 - - 1,000
--------------- --------- ----------- -------- -------- --------- --------
Share based
payments - - - 1 - 1
--------------- --------- ----------- -------- -------- --------- --------
Transfer from
share option
reserve - - - (182) 182 -
--------------- --------- ----------- -------- -------- --------- --------
Balance at
30 June 2010 1,079 - 7,441 48 (8,135) 433
--------------- --------- ----------- -------- -------- --------- --------
Loss for the
year - - - - (2,840) (2,840)
--------------- --------- ----------- -------- -------- --------- --------
Issue of
ordinary
shares in the
year 2,726 - 4,758 - - 7,484
--------------- --------- ----------- -------- -------- --------- --------
Share based
payments - - - 814 - 814
--------------- --------- ----------- -------- -------- --------- --------
Balance at
30 June 2011 3,805 - 12,199 862 (10,975) 5,891
--------------- --------- ----------- -------- -------- --------- --------
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
For the year ended 30 June 2011
Notes Group Company
---------------------------------- ------ ---------------- ----------------
2011 2010 2011 2010
---------------------------------- ------ ------- ------- ------- -------
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------ ------- ------- ------- -------
Cash flows from operating
activities
---------------------------------- ------ ------- ------- ------- -------
Operating loss from continuing
and discontinued operations before
interest and tax (2,853) (914) (2,856) (962)
------------------------------------------ ------- ------- ------- -------
Add : Depreciation charges for
the year 7 41 1 6
------------------------------------------ ------- ------- ------- -------
Add : Share option reserve charge 814 1 814 1
------------------------------------------ ------- ------- ------- -------
Add: Write-off of intangibles/investments - 82 - 84
------------------------------------------ ------- ------- ------- -------
Less: Foreign exchange gain (127) - (122) -
------------------------------------------ ------- ------- ------- -------
Operating loss before working capital
change (2,159) (790) (2,163) (871)
------------------------------------------ ------- ------- ------- -------
(Increase) Decrease in trade and
other receivables (45) (18) (44) 62
------------------------------------------ ------- ------- ------- -------
(Increase) Decrease in loans to
affiliated companies (3,864) - (3,819) -
------------------------------------------ ------- ------- ------- -------
Increase in trade and other payables 308 32 316 26
------------------------------------------ ------- ------- ------- -------
Net cash flow from operating activities (5,760) (776) (5,710) (783)
------------------------------------------ ------- ------- ------- -------
Cash flows from investing
activities
---------------------------------- ------ ------- ------- ------- -------
Purchases of plant and equipment (1) - (1) -
------------------------------------------ ------- ------- ------- -------
Investment in affiliated companies (1,079) (1,079)
------------------------------------------ ------- ------- ------- -------
Investment income received 175 - 129 -
------------------------------------------ ------- ------- ------- -------
Net cash from investing activities (905) - (951) -
------------------------------------------ ------- ------- ------- -------
Cash flows from financing
activities
---------------------------------- ------ ------- ------- ------- -------
Proceeds on issue of share capital 7,484 1,000 7,484 1,000
------------------------------------------ ------- ------- ------- -------
Net cash from financing activities 7,484 1,000 7,484 1,000
------------------------------------------ ------- ------- ------- -------
Net increase in cash and cash equivalents 819 224 823 217
------------------------------------------ ------- ------- ------- -------
Cash and cash equivalents at the
beginning of the year 461 237 454 237
------------------------------------------ ------- ------- ------- -------
Cash and cash equivalents at the
end of the year 1,280 461 1,277 454
------------------------------------------ ------- ------- ------- -------
NOTES TO THE ACCOUNTS
1. General information
Fluormin plc (formerly known as Maghreb Minerals Plc) is a
public limited company and was incorporated in England and Wales on
7 June 2004. The Company was admitted to the AIM Market of the
London Stock Exchange on 23 December 2004. The Company's shares
were suspended from AIM in December 2010. The Company was
re-admitted to AIM in September 2011. The address of its registered
office and principal place of business are disclosed on the last
page of the annual report. The principal activities of the Company
and its subsidiaries (the Group) are described in the Chairman's
Statement.
The preliminary results do not include the notes of the type
normally included in an ordinary Annual Report. Accordingly the
report is to be read in conjunction with the Annual Report for the
year ended 30 June 2011 which was prepared in accordance with
International Financial Standards as adopted by the European
Union.
2. Dividends
No distributions were made to equity shareholders during the
year ended 30 June 2011 (2010 - nil).
3. Loss per ordinary share (basic and diluted)
The calculation of the basic loss per share attributable to the
ordinary equity holders of the parent has been calculated on the
net loss after tax of GBP2,796,000 (2010 - GBP914,000). Whereas,
the weighted average number of ordinary shares at the reporting
date is 436,680,288 (2010 - 115,247,075) due to the 25 to 1
consolidation of share capital prior to the year end, the weighted
average share capital is 17,467,212.
Share options in issue decrease the loss per share for the year,
and as such are deemed anti-dilutive. Therefore the diluted loss
per share is the same as the basic loss per share for both 2011 and
2010.
The total number of share options outstanding at the year end
which could potentially become dilutive in the future is
120,033,333 (2010 - 19,100,000). These numbers have not been
adjusted for the 25 to 1 post year end consolidation of share
capital.
2011 2010
---------------------------------------------- -------- ---------
Pence Pence
Restated
Total basic and diluted loss per share
from continuing operations (15.31) (4.41)
Total basic and diluted loss per share
from discontinued operations (0.70) (0.82)
Total basic and diluted loss per share
from continuing and discontinued operations (16.01) (5.23)
---------------------------------------------- -------- ---------
4. Group investments in and loans to affiliated companies
Investments in affiliated companies GBP'000
---------------------------------------- --------
Cost
---------------------------------------- --------
At 30 June 2009 84
---------------------------------------- --------
Additions -
---------------------------------------- --------
Written down during 2010 (84)
---------------------------------------- --------
At 30 June 2010 -
---------------------------------------- --------
Investment into Sallies Limited (11.4%
interest) 776
---------------------------------------- --------
Written down during 2011 -
---------------------------------------- --------
Net Book Value
At 30 June 2011 776
---------------------------------------- --------
At 30 June 2010 -
---------------------------------------- --------
Sterling
Loans to affiliated Repayment Interest Currency amount
companies date Rate of Loan GBP'000
--------------------- ----------- ----------- --------- ---------
Loan to FluorOne LIBOR plus
Trading BVI Variable 3% US$ 602
--------------------- ----------- ----------- --------- ---------
Loan to Sallies
Limited Variable 10% ZAR 3,262
--------------------- ----------- ----------- --------- ---------
Value of Loans
30 June 2011 3,864
---------------------------------- ----------- --------- ---------
Value of Loans -
30 June 2010
---------------------------------- ----------- --------- ---------
In 2010, the Directors wrote off the intangible assets of the
Group and the investment in its dormant subsidiary company, Maghreb
Mining Limited, which was struck off the Companies Register during
the course of this financial year.
On 30 September 2010, the Company acquired an 11.4% interest in
Sallies Limited from Honeywell International Inc. for a
consideration of US$ 1.2 million (GBP776,000). This is regarded as
a strategic long term investment for the Company in the fluorspar
market. In addition, the Company, through its wholly-owned
subsidiary entered into a US$8 million loan agreement with Sallies
Limited to enable Sallies Ltd to recommence its production of
fluorspar of which US$5 million has been drawn down to 30 June
2011.
In April 2011, the company acquired a 49 % interest in FluorOne
Trading BVI by subscribing US$ 490,000 for new shares in the
company. The Company also entered into a loan agreement with
FluorOne Trading BVI to fund the latter's fluorspar trading
activities of which US$963,000 has been advanced to 30 June
2011.
5. Interest in Joint Venture
The company has an investment in the following joint venture
undertaking:
Country of Principal Interest Accounting
incorporation activity reference
date
----------------- --------------- ---------------- --------- -----------
Fluorone Trading British Virgin Trading and 49% 30 June
Ltd Islands marketing
of commodities
Fluorone Trading Ltd is a joint venture between Fluormin Plc and
Mr Jeffery Kofsky. Fluormin owns 49% and Mr Kofsky owns 51% of the
issued share capital of the company.
The Group's investment in the Joint Venture at the balance sheet
date comprises:
Investments in Joint
Ventures GBP'000
2011
----------------------------------------- ---------------------
Cost GBP'000
Balance on 1 July 2010 -
Additions 315
---------------------
As at 30 June 2011 315
---------------------
Share of Joint Venture operating profit
on ordinary activities (4)
---------------------
Net investment in Joint Venture 311
=====================
6. Trade and other receivables
Group Company
---------------------------------- ------------------ ------------------
2011 2010 2011 2010
---------------------------------- -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- --------
Due within one year
---------------------------------- -------- -------- -------- --------
Amount due from subsidiary
undertakings relating
to working capital requirements - - - -
---------------------------------- -------- -------- -------- --------
Loans due from subsidiary
and affiliate undertakings. 3,864 - 3,819 -
---------------------------------- -------- -------- -------- --------
Total due from affiliated
companies 3,864 - 3,819 -
---------------------------------- -------- -------- -------- --------
Other receivables 76 34 68 29
---------------------------------- -------- -------- -------- --------
Prepaid expenses and
accrued income 13 10 13 9
---------------------------------- -------- -------- -------- --------
Total trade and other
receivables 89 44 81 38
---------------------------------- -------- -------- -------- --------
3,953 44 3,900 38
---------------------------------- -------- -------- -------- --------
In relation to funding for working capital requirements provided
by the parent company to the subsidiaries, the amount due by
subsidiary undertakings to the parent company at 30 June 2011
totaled GBP4,762,000 (2010 - GBP4,414,000). A further provision of
GBP348,000 (2010 - GBP356,000) has been made against the balance in
the accounts of the Company, to arrive at a nil carrying value
(2010 - GBPNil).
Movements on the intercompany balances are tabled below:
Company
------------------------------------------- ------------------
2011 2010
------------------------------------------- -------- --------
GBP'000 GBP'000
------------------------------------------- -------- --------
Gross intercompany working capital
balances at 1 July 2011/2010 4,414 4,138
------------------------------------------- -------- --------
Additions for working capital 348 276
------------------------------------------- -------- --------
Total at 30 June 2011/2010 4,762 4,414
------------------------------------------- -------- --------
Provision on intercompany balances (7,762) (4,414)
------------------------------------------- -------- --------
Net intercompany working capital - -
balances at 30 June 2011/2010
------------------------------------------- -------- --------
Loans provided to subsidiary undertakings 3,849 -
------------------------------------------- -------- --------
Interest accruing 15 -
------------------------------------------- -------- --------
Net loans to subsidiary undertakings 3,864 -
at 30 June 2011/2010
------------------------------------------- -------- --------
The Group has no trade receivables. Other receivables constitute
the only financial assets within the category "loans and
receivables" as defined by IAS 39, except for cash and cash
equivalents.
Other receivables comprise mainly of amounts paid in advance of
services, are non-interest bearing and generally have a 30 - 90 day
term. The fair value of other receivables approximates their book
value.
No provision for impairment of other receivables has been made
as there is no objective evidence that the Group will not be able
to collect all amounts due according to the original terms. There
are no other receivables that were past due date.
7. Cash and cash equivalents
Group Company
-------------------------- ------------------ ------------------
2011 2010 2011 2010
-------------------------- -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- --------
Cash at bank and in hand 1,280 461 1,277 454
-------------------------- -------- -------- -------- --------
1,280 461 1,277 454
-------------------------- -------- -------- -------- --------
The Directors consider that the carrying amount of these assets
approximates to their fair value. The credit risk on liquid funds
is limited because the counter-party is a bank with a high credit
rating.
8. Trade and other payables
Group Company
------------------------ ------------------ ------------------
2011 2010 2011 2010
------------------------ -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- -------- --------
Falling due within one
year
------------------------ -------- -------- -------- --------
Other payables - - - -
------------------------ -------- -------- -------- --------
Trade payables 208 48 209 33
------------------------ -------- -------- -------- --------
Accruals and deferred
income 174 26 165 26
------------------------ -------- -------- -------- --------
382 74 374 59
------------------------ -------- -------- -------- --------
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
9. Share capital
Number '000 Nominal Value GBP'000
Called up, allotted and
fully paid
Ordinary shares of 0.6p
each 634,129 179,923 3,805 1,079
The Company has one class of ordinary shares which carry no
right to fixed income.
During the course of the year, the movement in the called up,
allotted and fully paid share capital was as follows:
Number Nominal Value
('000) (GBP'000)
-------------------- -------- --------------
Balance at 1 July
2010 179,923 1,079
-------------------- -------- --------------
Issued in:
-------------------- -------- --------------
September 2010 93,000 558
-------------------- -------- --------------
December 2010 180,603 1,084
-------------------- -------- --------------
January 2011 180,603 1,084
-------------------- -------- --------------
Balance at 30 June
2011 634,129 3,805
-------------------- -------- --------------
In this financial year 454,200,000 (2010-88,889,000) ordinary
shares were issued.
10. Parent company profit and loss account
As permitted under Section 408 of the Companies Act 2006, no
income statement is presented for the holding company. The loss for
the year after tax for the holding company was GBP2,840,000
(2010-GBP962,000).
11. Related party transactions
GROUP
Key management are those persons having authority and
responsibility for planning, controlling and directing the
activities of the Group. In the opinion of the Board, the Group's
key management are the Directors of Fluormin Plc. Information
regarding the comparison is given below in aggregate for each
category specified in IAS 24 Related Party Disclosures:
2011 2010
------------------------------ -------- --------
GBP'000 GBP'000
------------------------------ -------- --------
Short-term employee benefits 202 75
------------------------------ -------- --------
Post employment benefits - -
------------------------------ -------- --------
Other long term benefits - -
------------------------------ -------- --------
Termination benefits - 75
------------------------------ -------- --------
Share based payments 554 (10)
------------------------------ -------- --------
756 140
------------------------------ -------- --------
Transactions between the Company and its subsidiaries have been
eliminated on consolidation and are not disclosed in this note.
Details of transactions between the Group and other related parties
are disclosed below.
Amounts owed
Consultancy Loans to Related from Related
Other Purchases Services Parties Parties
------------ ------------------ ------------------ ------------------ ------------------
2011 2010 2011 2010 2011 2010 2011 2010
------------ -------- -------- -------- -------- -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ -------- -------- -------- -------- -------- -------- -------- --------
Companies
------------ -------- -------- -------- -------- -------- -------- -------- --------
Pegasus
Resources 106 - - - - - - -
------------ -------- -------- -------- -------- -------- -------- -------- --------
FluorOne
Trading
BVI - - - - 602 - - -
------------ -------- -------- -------- -------- -------- -------- -------- --------
Sallies
Limited - - - - 3,217 - - -
------------ -------- -------- -------- -------- -------- -------- -------- --------
Dales
Project
Management
cc - - 219 49 - - - -
------------ -------- -------- -------- -------- -------- -------- -------- --------
Fasken
Martineau
LLP - 49 785 - - - - -
------------ -------- -------- -------- -------- -------- -------- -------- --------
D H Dales is the proprietor of Dales Project Management cc.
Payments made by the Company Dales Project Management cc relate to
services rendered by Directors of the Company.
Payments to Fasken Martineau LLP by the Group relate to certain
legal expenditure. Albert Gourley was a partner of Fasken Martineau
LLP.
Pegasus Resources is a company of which J. Kofsky is a Director
and through which the Company initially subscribed for part of its
49% interest in FluoOne Trading BVI.
FluoOne Trading BVI and Sallies Limited are companies in which
the Company has a 49% and 11.4% interest respectively and to which
the Group has advanced loans.
COMPANY
Working Capital transactions between the Company and its
subsidiaries are below:
As at
As at 30 30
June June
2011 2010
------------------------------------------------ --------- --------
GBP'000 GBP'000
Balance on inter-company account from
Parent company to subsidiary companies
2010/2009 4,414 4,188
Management charges due by subsidiary companies
to Parent company 200 100
Provision of working capital from Parent
company to subsidiary companies 148 126
Balance at 30 June 2011/2010 4,762 4,414
------------------------------------------------ --------- --------
All intercompany debtors have been provided for in full in the
Company accounts of Fluormin Plc.
Loans made by the Company to its subsidiaries are below:
As at 30 As at
June 30
2011 June
2010
--------------------------------------------- --------- --------
GBP'000 GBP'000
--------------------------------------------- --------- --------
Balance on inter-company loan account - -
from parent company to subsidiary companies
2010/2009
--------------------------------------------- --------- --------
Loans advanced 3,087 -
--------------------------------------------- --------- --------
Interest Accrued 16 -
--------------------------------------------- --------- --------
Fair Value appreciation 114 -
--------------------------------------------- --------- --------
Balance at 30 June 2011/2010 3,217 -
--------------------------------------------- --------- --------
12. Financial instruments
The Group's financial instruments comprise cash and cash
equivalents and items such as trade payables and receivables which
arise directly from its operations. The main purpose of these
financial instruments is to provide finance for the Group's
operations.
The following table shows the carrying value as at 30 June 2011
for each category of financial assets and liabilities as required
by IFRS 7.
Group Company
-------------------------------- -------------------- --------------------
2011 2010 2011 2010
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- --------- ---------
Financial assets
-------------------------------- --------- --------- --------- ---------
Loans and receivables 3,952 495 3,900 482
-------------------------------- --------- --------- --------- ---------
Financial liabilities
-------------------------------- --------- --------- --------- ---------
Financial liabilities measured
at amortised cost (382) (74) (375) (59)
-------------------------------- --------- --------- --------- ---------
The Group's operations expose it to a variety of financial risks
including liquidity risk, interest rate risk and foreign currency
exchange rate risk. Given the size of the Group, the directors have
not delegated the responsibility of monitoring financial risk
management to a sub-committee of the board. The policies set by the
board of directors are implemented by the Company's finance
department.
Credit risk
The Group has no trade receivables but does have cash balances
at bank and loans to affiliated companies. The maximum exposure is
limited to a carrying figure of cash and cash equivalents at the
year end of GBP1,280,000 (2010 - GBP461,000) and other receivables
of GBP76,000 (2010 - GBP34,000). The credit exposure on the cash
balances is considered to be limited because the counter-party is a
bank with a high credit rating.
The Group has loans to affiliated companies of GBP3,864,000
(2010-GBPNil). Which at the year end are considered their fair
value.
Interest rate risk
The Group has interest bearing assets comprising only cash and
cash equivalents which earn interest at a variable rate.
The Group's cash and cash equivalents earned interest at a rate
variable between 0% and 1%.
Liquidity risk
The Group has no long-term debt finance. The Group's financial
liabilities comprise trade payables details. The following table
shows the contractual maturities of the Group's trade payables
which are measured at their amortised cost equal to the gross cash
flow payable.
Group Company
------------------- ------------------ ------------------
2011 2010 2011 2010
------------------- -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- -------- --------
3 months or
less
------------------- -------- -------- -------- --------
Trade Payables 208 48 209 33
------------------- -------- -------- -------- --------
Accruals 174 26 165 26
------------------- -------- -------- -------- --------
Total 382 74 375 59
------------------- -------- -------- -------- --------
Over 3 months - - - -
------------------- -------- -------- -------- --------
Total Liabilities 382 74 374 59
------------------- -------- -------- -------- --------
Market risk and sensitivity analysis
Foreign currency exchange rate risk
The Group is exposed to foreign currency exchange rate risk as a
result of loans receivable and trade payables which will be settled
in US dollars, South African Rand, Euros and Tunisian Dinars.
During the year the Group did not enter into any arrangements to
hedge this risk, as the directors' did not consider the exposure to
be significant given the nature of the balances. The Group will
review this policy as appropriate in the future.
Had the South African Rand weakened by 10% against sterling the
fair value, or realiseable value of the loan would decrease and
therefore post-tax losses and equity would been GBP177,000
(2010-GBPNil) higher. Conversely, if the South African Rand had
strengthened 10% against sterling, post tax losses and equity would
have been GBP469,000 (2010 - GBPNil) lower.
Had the United States Dollar weakened by 10% against sterling
the fair value, or realiseable value of the loan would decrease and
therefore post-tax losses and equity would been GBP55,000
(2010-GBPNil) higher. Conversely, if the United States Dollar had
strengthened 10% against sterling, post tax losses and equity would
have been GBP67,000 (2010 - GBPNil) lower.
As at 30 June 2011, if the TND had weakened by 10% against
sterling with all other variables held constant, post-tax losses
and equity would have been GBP16,000 (2010 - GBP14,000) lower.
Conversely, if the TND had strengthened 10% against sterling with
all other variables held constant, post tax losses and equity would
have been GBP19,000 (2010 - GBP16,000) higher.
Interest rate risk
The Group is exposed to interest rate risk as a result of loans
with interest calculated at LIBOR.
Had the South African Rand weakened by 10% against sterling with
all other variables held constant, post-tax losses and equity
arising from interest income received would have been GBP6,000
(2010 - GBPNil) higher. Conversely, if the South African Rand had
strengthened 10% against sterling with all other variables held
constant, post tax losses and equity arising from interest income
received would have been GBP7,000 (2010 - GBPNil) lower.
No variation in the rate of exchange of the United States Dollar
would have impacted materially on the Group's post-tax losses and
equity arising from interest income received in 2011or 2010.
The Group is exposed to interest rate risk as a result of
positive cash balances, denominated in sterling, which earn
interest at a variable rate. As at 30 June 2011, if bank lending
rates had increased by 0.5% with all other variables held constant,
post-tax losses and equity would have been GBP4,000 (2010 -
GBP2,000) lower. Conversely, if bank lending rates had fallen 0.5%
with all other variables held constant, post tax losses and equity
would have been GBP4,000 (2010 - GBP2,000) higher.
13. Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders.
The Group defines capital as being share capital plus reserves.
The Board of Directors monitors the level of capital as compared to
the Group's long-term expense commitments and adjusts the level of
capital as is determined to be necessary by issuing new shares.
The Group is not subject to any externally imposed capital
requirements.
14. Controlling party
Firebird Management LLC.
15. Events since the reporting date
Changes in operations
On 11 August 2011, the Company disposed of its lead/zinc
projects to subsidiaries of Glencore Plc in consideration of
US$10.2 million and the right to all fluorspar produced from these
prospects (at the incremental cost of producing the same).
On 31 August 2011, the shareholders approved the change of the
Company's name to Fluormin plc, in order to reflect the Company's
new strategic focus and the Acquisition Agreements announced on 24
December 2011.
On 8 September 2011 the two Acquisition Agreements were
completed. This resulted in Fluormin's aggregate shareholding in
Sallies increasing to 78.29 per cent and to 58% of the Sallies
debenture in issue, as well as Fluormin acquiring a 20%
shareholding in KFC through a holding company. The completion of
the Sallies transaction triggered a mandatory offer by the Company
to the minority holders of Sallies' shares and debentures and any
holder of options to subscribe for Sallies shares. This, if
successful, will lead to a 100 per cent. ownership interest in
Sallies. It is anticipated that the process will be completed by 31
December 2011.
Capital Structure Changes
The capital structure of the Company changed significantly after
the reporting period.
The Company issued 93,000,000 new ordinary shares in September
2010 at 1.25 pence per share raising GBP1,162,500.
In addition, in August 2011, 25,000,000 shares were issued to
Albert Gourley at 2 pence per share and 15,000,000 to Mark Bolton
at 2 pence per share.
With effect from 31 August 2011, the Company's existing share
capital was consolidated on the basis of 1 (one) New Ordinary Share
for every 25 Existing Ordinary Shares held by Shareholders on the
register of members of the Company at the close of business on the
Record Date (31 August 2011).
Subsequent to the reporting period, the Company issued 3,605,307
new ordinary shares (post consolidation) on 8 September 2011 at
GBP1.05 per share raising GBP 3,786,000.
The consideration for the purchase of Sallies shares after the
end of the reporting period was GBP5.135 million. A fair value
assessment of the assets and liabilities Sallies has not been
carried out.
16. Approval of financial statements
The financial statements were approved by the Board of Directors
and authorised for issue on 7 October 2011.
17. The information contained in this announcement an does not
constitute the Group's statutory accounts as defined in section 434
of the Companies Act 2006 but is derived from those accounts. The
statutory accounts for the year ended 31 June 2011 have been
approved by the Board and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting notice of
which will be sent to shareholders shortly. The auditors have
reported on those accounts and their report was unqualified, with
no matters by way of emphasis, and did not contain statements under
section 498(2) of the Companies Act 2006 (regarding adequacy of
accounting records and returns) or under section 498(3) (regarding
provision of necessary information and explanations).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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