RNS Number:8084O
Nufcor Uranium Limited
26 February 2008
NUFCOR URANIUM LIMITED ("NUFCOR URANIUM" OR "THE COMPANY")
INTERIM RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2007
Nufcor Uranium today announces its interim results for the period from 1 July
2007 to 31 December 2007.
Highlights
Highlights for the period ended 31 December 2007:
* Income US$2,248,744
* Loss for the period (US$15,727,137)
* Shareholders' equity US$165,156,655
* Net assets at market value US$262,640,655
* NAV per share at 31 December 2007 �3.20 (US$6.37)
* Decrease in NAV since 1 July 2007 (�1.53) (32.35%)
Commenting on the results, Kelvin Williams, Chairman of Nufcor Uranium said:
"The uranium market has experienced significant price volatility and the price
of U3O8 has remained under pressure into 2008. Absence of short term demand has
played a critical role in this period. Long term market circumstances for
uranium remain strongly favourable, with increasing nuclear utility demand and
restrained new production growth. However, in the short term, the price of
uranium could be vulnerable to fluctuations in discretionary demand in this
market."
"At the Annual General Meeting of the Company on 28th September 2007, approval
was given for the Company to buy back up to 15% of the shares in issue at the
discretion of the directors."
"Over the period, the Nufcor Uranium share price has reflected movements in the
spot uranium price as it traded in a wide range, and as at the end of December
2007, the share price was trading at a premium of 2% to the reported diluted NAV
of the Company at that time. The Company continues to investigate ways of
encouraging ever-wider levels of trading in, and ownership of, Nufcor Uranium
shares."
Market Commentary
Following a run of price increases lasting more than 4 years, the spot price of
U3O8 reached an all-time high of $136.00/lb in mid-June 2007 (source: Ux
Consulting). Price weakened thereafter due to weak seasonal demand during the
summer months along with a substantial reduction in speculative activity. The
spot price dropped to a low of $75.00/lb at the start of October before
recovering to end the year at $90.00/lb. The limited liquidity observed in short
term uranium markets results in greater price volatility compared with that
observed in the long term market.
Term market prices have remained remarkably steady with published prices
remaining at $95.00/lb throughout the second half of 2007. The ongoing strength
of term market prices highlights continued industry concerns over the
availability of uranium in the medium term (2-5 years). Term activity remains
the dominant contracting force in the uranium market with up to 90% of utility
demand procured via direct multi-year supply agreements with producers.
Development of new uranium supply sources remained constrained in 2007.
Preliminary estimates indicate that production for the year will reach 108
million pounds of U3O8 (source: Ux Consulting). This represents a 5% increase
compared with 2006, however, is well below the 117 million pounds of U3O8
forecast at the start of the year. Water issues have continued to dog the mining
industry with operations in Australia and Canada impacted by climatic and
groundwater problems in 2007. In Kazakhstan, shortages of sulphuric acid have
slowed the pace of mine development while various other production bottlenecks
have affected operations in Southern Africa.
Forward uranium market fundamentals remain positive with robust demand augmented
via an increasing number of new reactor build projects. Market prices are
anticipated to remain robust for several years with the potential for price
spikes in the event of further supply disruption.
Nufcor Capital Limited
Two London Bridge
London
SE1 9RA
For further information, please contact:
Nufcor Uranium Limited +27 82 788 0094
Kelvin Williams (Chairman)
Nufcor Capital Limited +44 20 7939 1830
Rian Raghavjee
Gary Stoker
Smithfield +44 20 7360 4900
Rupert Trefgarne
Income statement
For the half year ended 31st December 2007
Note 1st July 2007 28th June 2006
to to
31st December 2007 31st December 2006
US$ US$
Income
Bank interest 195,680 697,651
Uranium loan fees 2 2,053,064 161,949
----------- -----------
2,248,744 859,600
----------- -----------
Expenses 2
Impairment charge 3 16,160,000 -
Investment advisory fees 1,319,750 586,953
Audit fees 65,626 31,429
Directors fees 120,836 105,115
Other administrative expenses 309,669 708,958
----------- -----------
17,975,881 1,432,455
----------- -----------
Loss for the financial period
attributable to equity
shareholders (15,727,137) (572,855)
=========== ===========
Basic loss per share 7 US$(0.381) US$(0.017)
=========== ===========
Diluted loss per share 7 US$(0.373) US$(0.017)
=========== ===========
The notes on pages 12 to 20 form part of these financial statements.
Balance sheet
At 31st December 2007
Note 31st December 2007 30th June 2007
US$ US$
ASSETS
Non-current assets
Other assets - Uranium holdings 3 156,466,000 172,626,000
----------- -----------
156,466,000 172,626,000
----------- -----------
Current assets
Trade and other receivables 4 1,314,633 1,308,021
Cash and cash equivalents 7,784,115 7,447,215
----------- -----------
9,098,748 8,755,236
----------- -----------
Total assets 165,564,748 181,381,236
=========== ===========
EQUITY
Share capital 5 412,500 412,500
Share premium account - 180,990,188
Distributable reserve 2 180,990,188 -
Retained earnings (16,246,033) (518,896)
----------- -----------
Total equity 165,156,655 180,883,792
----------- -----------
LIABILITIES
Current liabilities
Trade and other payables 8 408,093 497,444
----------- -----------
Total liabilities 408,093 497,444
----------- -----------
Total EQUITY AND LIABILITIES 165,564,748 181,381,236
=========== ===========
The notes on pages 12 to 20 form part of these financial statements.
The financial statements were authorised for issue by the board of directors on
26th February 2008 and signed on its behalf by:
............................................... ...............................................
K H Williams W Scott
Chairman Director
Statement of changes in equity
For the half year ended 31st December 2007
Note Ordinary Share Distributable Retained Total
shares premium reserve earnings US$
US$ US$ US$ US$
Balance at
1st 412,500 180,990,188 - (518,896) 180,883,792
July 2007
Loss for the
period - - - (15,727,137) (15,727,137)
Transfer to
distributable
reserve 2 - (180,990,188) 180,990,188 - -
------- --------- --------- -------- --------
Balance at
31st December
2007 412,500 - 180,990,188 (16,246,033) 165,156,655
======= ========= ========= ======== ========
Note Ordinary Share Distributable Retained Total
shares premium reserve earnings US$
US$ US$ US$ US$
Balance at 28th - - - - -
June 2006
Issue of shares 330,000 119,708,153 - - 120,038,153
Loss for the
period - - - (572,855) (572,855)
Fair value of
equity-settled
share-option 6 - 2,215,868 - - 2,215,868
granted
Formation and
listing expenses
recognised - (2,215,868) - - (2,215,868)
directly in
equity in
relation to
equity-settled
share-option
granted
Formation and
listing expenses
recognised - (5,643,025) - - (5,643,025)
directly in
equity
------- --------- --------- -------- --------
Balance at 31st
December 2006 330,000 114,065,128 - (572,855) 113,822,273
======= ========= ========= ======== ========
The notes on pages 12 to 20 form part of these financial statements.
Cash flow statement
For the half year ended 31st December 2007
1st July 2007 28th June 2006
to to
31st December 31st December
2007 2006
US$ US$
NET CASH FLOWS FROM OPERATING ACTIVITIES
Loss from operations (15,727,137) (572,855)
Increase in receivables (6,612) (208,527)
(Decrease)/increase in
payables (89,351) 493,660
Impairment charge 16,160,000 -
Purchase of uranium holdings - (108,366,000)
NET CASH INFLOW/(OUTFLOW) FROM OPERATING
ACTIVITIES ---------- -----------
336,900 (108,653,722)
---------- -----------
FINANCING ACTIVITIES
Proceeds from issue of
ordinary shares - 120,038,153
Formation and listing expenses
recognised directly - (5,643,025)
in equity
---------- -----------
CASH FROM FINANCING ACTIVITIES - 114,395,128
---------- -----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 336,900 5,741,406
CASH AND CASH EQUIVALENTS 7,447,215 -
AT BEGINNING OF PERIOD
========== ===========
CASH AND CASH EQUIVALENTS 7,784,115 5,741,406
AT END OF PERIOD
========== ===========
The notes on pages 12 to 20 form part of these financial statements.
Notes to the financial statements
For the half year ended 31st December 2007
1. GENERAL INFORMATION
Nufcor Uranium Limited (the "Company") was incorporated in Guernsey on 28th June
2006 and is a closed ended investment company.
The Company was admitted to the Alternative Investment Market of the London
Stock Exchange ("AIM") on 21st July 2006.
Activities
The Company's activities include holding and lending uranium oxide concentrates
("U3O8") and uranium hexafluoride ("UF6"), with the primary investment objective
of achieving capital appreciation in the value of its uranium holdings.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") and IFRIC interpretations as adopted by
the European Union (EU) and with Section 64 of The Companies (Guernsey) Law,
1994 applicable to companies reporting under IFRS. The financial statements have
been prepared under the historical cost convention. A summary of the more
important accounting policies is set out below.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results ultimately may differ
from those estimates.
(a) Published standards effective in 2007
IFRS 7, Financial Instruments: Disclosures, and a complementary amendment to IAS
1, Presentation of Financial Statements - Capital Disclosures (effective for
year ends beginning on or after 1st January 2007). IFRS 7 introduces new
disclosures to improve the information about financial instruments. It requires
the disclosure of qualitative and quantitative information about exposure to
risks arising from financial instruments, including specified minimum
disclosures about credit risk, liquidity risk and market risk, including
sensitivity analysis to market risk. It replaces disclosure requirements in IAS
32, Financial Instruments: Disclosure and Presentation. It is applicable to all
entities that report under IFRS. The amendment to IAS 1 introduces disclosures
about the level of an entity's capital and how it manages capital.
(b) Interpretations to existing standards in issue that are effective in
2007 but not relevant for the Company's operations
The following interpretation is mandatory for accounting periods beginning on or
after 1st January 2007 but is not relevant to the Company's operations:
* IFRIC 11, IFRS 2 - Group and Treasury Share Transactions (effective from
1st March 2007)
(c) Standards and interpretations to existing standards in issue that are
not yet effective and not relevant for the Company's operations
The following standards and interpretations are mandatory for accounting periods
beginning on or after 1st January 2008 but are not relevant for the Company's
operations:
* IFRS 8, Operating Segments (effective from 1st January 2009)
* IFRIC 12, Service Concession Agreements (effective from 1st January 2008)
* IFRIC 13, Customer Loyalty Programmes (effective from 1st July 2008)
* IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction (effective from 1st January 2008).
Notes to the financial statements
For the half year ended 31st December 2007
SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign currency translation
(a) Functional and presentation currency
The functional currency of the Company is US Dollars. The Company's investors
are mainly from the United Kingdom and North America. The primary activity of
the Company is to invest in U3O8 and UF6 which are valued in US Dollars. The
performance of the Company is measured and reported to the investors in both
Sterling and US Dollars.
The Board of Directors considers the US Dollar as the currency that most
faithfully represents the economic effects of the underlying transactions,
events and conditions. The financial statements are presented in US Dollars
which is the Company's functional and presentation currency.
(b) Transactions and balances
Transactions in foreign currencies are accounted for at the rates of exchange
ruling at the dates of those transactions. Income statement items in foreign
currencies are translated into US Dollars at transaction date. Foreign currency
balances at year end are translated at the approximate rates of exchange ruling
at that date. Gains and losses arising on the settlement of transactions and the
translation at period end exchange rates of monetary assets and liabilities
balances denominated in foreign currencies are recognised in the income
statement.
Segmental reporting
The Company has one main business segment and one main geographic segment.
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that are
subject to risks and returns that are different from those of segments operating
on other economic environments.
Revenue recognition
Revenue is recognised only when it is probable that the economic benefits
associated with a transaction will flow to the company and the amount of revenue
can be measured reliably.
Revenue on the sale of U3O8 and UF6 is recognised at the time of delivery.
Uranium loan fees
Fees from loans of U3O8 and UF6 to third parties are recognised in the income
statement on an effective yield basis. The fees are based on a loan rate and are
calculated on the market value of the loaned uranium on a quarterly basis.
Formation and listing expenses recognised directly in equity
Formation and listing expenses are expensed against share premium as they are
incurred.
Expenses
All operating expenses, including investment advisory fees, are recognised in
the income statement on an accruals basis.
Holdings of U3O8 and UF6
Holdings of U3O8 and UF6 are valued at cost less impairment. Any impairment is
recognised in the income statement.
U3O8 and UF6 on loan to counterparties remain on the balance sheet as the
Company retains substantially all of the risks and rewards of ownership.
Notes to the financial statements
For the half year ended 31st December 2007
SIGNIFICANT ACCOUNTING POLICIES (continued)
Forward contracts
From time to time, the Company may enter into contracts for the future delivery
of U3O8 and UF6 at a fixed price. Such contracts are "executory contracts" in
that both parties are still to perform, to an equal degree, the actions required
of them by the contract until the day of final delivery under the contract.
Executory contracts are not recognised in the balance sheet of the Company, but
are noted as a future financial commitment.
Financial instruments
Financial assets and liabilities carried on the balance sheet include cash and
cash equivalents, trade and other accounts receivable and payable.
Financial instruments are classified as assets, liabilities or equity in
accordance with the substance of the contractual arrangement. Interest, gains
and losses relating to a financial instrument classified as an asset or
liability are reported as an expense or income. Financial instruments are offset
when the Company has a legally enforceable right to offset and intends to settle
either on a net basis or to realise the asset and settle the liability
simultaneously.
Trade receivables
Trade receivables are measured on initial recognition at fair value and
subsequently measured at amortised cost less provision for impairment.
Appropriate allowances for estimated irrecoverable amounts are recognised in the
income statement when there is objective evidence that the asset is impaired.
Any allowance recognised is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows discounted
at the effective interest rate computed on initial recognition of the asset.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits and deposits
with original maturities of three months or less.
Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate of
the amount can be made.
Provisions are measured at the directors' best estimate of the expenditure
required to settle the obligation at the balance sheet date, and are discounted
to present value where the effect is material.
The Company recognises a provision for onerous contracts when the expected
benefits to be derived from a contract are less than the unavoidable costs of
meeting the obligations under the contract.
Contingent liabilities are disclosed if the future obligation is probable or the
amount cannot be reasonably estimated.
Trade payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method. Trade
payables are carried at the fair value of the consideration to be paid in future
for services that have been received or supplied and invoiced or formally agreed
with the supplier.
Notes to the financial statements
For the half year ended 31st December 2007
SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment of other assets
Other assets are reviewed for impairment losses whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the carrying amount of the
asset exceeds its recoverable amount (that is, the higher of the asset's net
selling price and value in use). For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash flows.
Taxation
The Company is incorporated in Guernsey. With effect from 1st January 2008
Guernsey has implemented a zero tax system whereby the Company will be taxed at
a rate of zero percent. The Company will be liable to deduct tax at source from
any distribution or deemed distribution to Guernsey resident shareholders. A de
minimus has been proposed so that this will apply only to Guernsey residents
holding 1% or more of the issued share capital.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction from
the proceeds, net of tax, and are disclosed in the statement of changes in
equity.
Distributable reserve
On 12th October 2007, the Company was granted approval for a capital reduction
by way of cancellation of the amount standing to the credit of its share premium
account on that date. The amount cancelled was transferred to distributable
reserves.
Share-based payments
The Company has applied the requirements of IFRS 2, Share-based Payments.
The Company has issued equity share options which represent equity-settled
share-based payments in connection with the admission of the Company to AIM.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the equity-settled share
based payment is deemed to be an incremental cost directly attributable to the
issue of the shares at admission and as such is deducted from equity.
Fair value is measured by use of the Black-Scholes pricing model. The expected
life used in the model is based on management's best estimate and is adjusted
for the effects of non-transferability, exercise restrictions and behavioural
considerations.
See Note 6 for further description of the equity-settled share option granted.
Risk management
The Company attempts to mitigate risks that may affect its performance through a
process of identifying, assessing, reporting and managing material risks. The
principal risks to which the Company is exposed are uranium price risk,
counterparty credit risk, custodian credit risk and liquidity risk.
Uranium price risk
As an investor in uranium, the Company holds significant positions in uranium
that are exposed to changes in market price. In addition, the Company may enter
into fixed price forward purchase and sales contracts. The price of uranium is
volatile and is influenced by numerous factors beyond the Company's control,
such as demand and supply fundamentals and geopolitical events.
The objective of the Company is capital appreciation, which it intends to
achieve through a policy of acquiring uranium and a strategy of holding such
uranium for the long-term and not actively speculating or trading with regard to
short-term changes in the price of uranium. Accordingly, the Company does not
hedge or otherwise protect against movements in uranium price.
Notes to the financial statements
For the half year ended 31st December 2007
SIGNIFICANT ACCOUNTING POLICIES (continued)
The following table details the sensitivity of the Company's published net asset
value attributable to holders of ordinary shares (NAV) to a 10% increase and
decrease in the market price of uranium, with all other variables held constant.
31st December 2007 30th June 2007
US$ US$
Change in NAV (%) Change in NAV (%)
10% increase in uranium market price +9.7% +9.8%
10% decrease in uranium market price -9.7% -9.8%
Counterparty credit risk
The Company's purchase, sale and lending of uranium expose the Company to the
risk of non-payment or non-performance. The directors review credit issues
associated with each and every transaction and consideration is given to credit
worthiness and credit concentration issues, the provision of appropriate
security, and other risk mitigation measures.
Custodian credit risk
The Company is exposed to the credit risk of the Custodian, Nufcor International
Limited, and that of the conversion and enrichment facilities ("facilities"),
the ultimate custodian of the Company's uranium. The Custodian is required to
give the Company immediate notice of any material adverse change in its
financial condition and has an obligation to notify the Company of any material
adverse change in the financial position of the facilities at which its uranium
is held. The directors periodically review and manage the Company's exposure to
the credit risk of facilities that hold its material by diversifying its uranium
holdings across several facilities.
Physical uranium loss risk
The uranium owned by the Company could suffer damage or destruction by fire,
chemical accident, leakage or other incidents beyond the Company's control. This
may result in losses which are not compensated for either by the Custodian
(through its contractual arrangements with the conversion and enrichment
facilities) or by insurance proceeds. The directors periodically review and
manage the Company's risk of uranium loss by diversifying its uranium holding
across several conversion and enrichment facilities, considering the
availability of indemnities from the facilities and/or the availability of
external insurance cover.
Liquidity risk
The Company funds ongoing expenses from interest income, uranium loan fees, and
from cash held on demand and on deposit. The Company could be exposed to
significant liquidity risk if it were to fully invest its cash balances and if
income from uranium loan fees were to reduce, and other sources of funding were
to become unavailable. The directors' review rolling forecasts of the Company's
cash requirements on an ongoing basis and the Company currently maintains a cash
balance adequate to meet expected cash requirements for the forward 12 month
period.
Notes to the financial statements
For the half year ended 31st December 2007
3. URANIUM HOLDINGS
31st December 2007 31st December 2007
US$ US$
Cost Market value
2,300,000 lbs of U3O8 108,366,000 205,850,000
200,000 kgU of UF6 64,260,000
Impairment charge (16,160,000)
---------
Recoverable amount 48,100,000 48,100,000
--------- ---------
156,466,000 253,950,000
--------- ---------
30th June 2007 30th June 2007
US$ US$
Cost Market value
2,300,000 lbs of U3O8 108,366,000 311,650,000
200,000 kgU of UF6 64,260,000 71,800,000
--------- ---------
172,626,000 383,450,000
--------- ---------
The market value of U3O8 is taken as the average of (i) the month end UxC U3O8
spot price indicator (as published by Ux Consulting Company, LLC in its Ux
weekly publication) and (ii) the month end TradeTech U3O8 exchange value (as
published by TradeTech, LLC in the Nuclear Market Review), ("the Average U3O8
Published Price"), and that of UF6 is taken as the average of (i) the month end
UxC UF6 spot NA price and (ii) the month end TradeTech UF6 value, ("the Average
UF6 Published Price").
Subsequent to the private placement of 8.25 million shares in May 2007, the
Company purchased 200,000 kgU of UF6 at a price of US$321.30 for a total
consideration of US$64,260,000. As at 31st December 2007, the Average UF6
Published Price, as defined above, had fallen to US$240.5 per kgU of UF6, and
the market value of the Company's UF6 holdings was accordingly US$48,100,000. In
accordance with the Company's stated accounting policies and IFRS, the Company's
holdings of U3O8 and UF6 are separately valued at the lower of cost or
realisable value which in IFRS is described as "cost less impairment". Any
impairment is recognised in the Income Statement and therefore the Company has
recognised an "impairment charge" of US$16,160,000. Shareholders should note
that this has already been reflected in the published net asset value released
by the Company on a monthly basis (see reconciliation on page 21) where the
Company's Holdings of U3O8 and UF6 are valued at market value nor does it imply
that the condition of the Company's material has deteriorated.
At 31st December 2007, 920,000 lbs of U3O8 (US$43,346,425 at cost; US$82,340,000
at market value) was on loan to third parties. The uranium on loan was
collateralised to its replacement value by a guarantee issued to the Company by
the parent company of the borrower.
4. TRADE AND OTHER RECEIVABLES
31st December 2007 30th June 2007
US$ US$
Accrued loan fee 1,261,890 1,308,021
Accrued bank interest receivable 5,936 -
Prepayments 46,807 -
--------- ---------
1,314,633 1,308,021
========= =========
Notes to the financial statements
For the half year ended 31st December 2007
5. SHARE CAPITAL
31st December 2007 30th June 2007
US$ US$
Authorised
=========
85,000,000 Ordinary Shares 850,000 850,000
of US$0.01 each
========= =========
Issued and fully paid
========= =========
41,250,000 Ordinary Shares 412,500 412,500
of US$0.01 each
========= =========
Rights of shareholders
The Ordinary Shares carry the right to vote, the right to receive all dividends
declared by the Company and on a winding up will have the right to share pro
rata in the surplus assets of the Company. The shares carry no right to fixed
income.
6. SHARE-BASED PAYMENTS
Equity-settled share option
The Company issued the Custodian an option over shares representing 2,475,000 of
the Company's issued ordinary share capital at the time of admission to AIM. The
option was granted to reward the Custodian for its services in relation to the
Company issuing shares and obtaining admission to AIM.
The grant of the option was conditional upon the Company's admission to AIM and
vested on the date of admission. The option may be exercised at any time (or
times) during the period commencing on 21st July 2008 and ending on 21st July
2011. The exercise price of the option is fixed at GBP2.05 per share.
Options Weighted average
exercise price
US$
Outstanding at beginning of period 2,475,000 3.79
Granted during the period - -
Forfeited during the period - -
Exercised during the period - -
Expired during the period - -
Outstanding at the end of the period 2,475,000 3.79
Exercisable at the end of the period - -
The inputs into the Black-Scholes model are as follows:
Weighted average share price US$3.79
Weighted average exercise price US$3.79
Expected volatility 11.56%
Expected life 5 years
Risk free rate 4.84%
Expected dividends nil
Expected volatility was determined by calculating the historical volatility of
U3O8, the underlying asset in which the Company is invested, over the past 3
years. The expected life used in the model was based on management's expectation
that the option will be exercised at the end of the life of the option.
The Company recognised total expenses of US$2,215,868 representing the
equity-settled share-based payment to the Custodian for its services in relation
to the Company issuing shares and obtaining admission to AIM during the period.
The expense has been recognised directly in equity along with other admission
expenses within the annual financial statements to 30th June 2007.
Notes to the financial statements
For the half year ended 31st December 2007
7. EARNINGS PER SHARE
1st July 2007 28th June 2006
to 31st to 31st
December December
2007 2006
US$ US$
Earnings
Loss for the purposes of basic
and diluted earnings per share (15,727,137) (572,855)
========= =========
1st July 2007 28th June 2007
to 31st to 31st
December December
2007 2006
US$ US$
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per share 41,250,000 33,000,000
Effect of dilutive potential ordinary shares:
share options 873,387 565,350
========= =========
Weighted average number of ordinary shares
for the purpose of diluted earnings per share 42,123,387 33,565,350
========= =========
Basic loss per share US$(0.381) US$(0.017)
========= =========
Diluted loss per share US$(0.373) US$(0.017)
========= =========
8. TRADE AND OTHER PAYABLES
31st December 2007 30th June 2007
US$ US$
Advisory fee payable 211,625 319,542
Accrued expenses 196,468 177,902
--------- ---------
408,093 497,444
========= =========
Notes to the financial statements
For the half year ended 31st December 2007
9. RELATED PARTY TRANSACTIONS
The following are related parties to the Company:
K H Williams - Non-executive Chairman
A C Pickford - Non-executive Director
W Scott - Non-executive Director
M S Travis - Non-executive Director
Nufcor International Limited - Custodian
Nufcor Capital Limited - Adviser
At 31st December 2007, the Custodian held 3,300,000 shares (8% of issued shares)
(2006: 3,300,000 shares (10% of issued shares)) in the Company and the option to
acquire a further 2,475,000 shares as per an option agreement dated 21st July
2006.
The Company has entered into a location swap agreement with Nuclear Fuel
Corporation of South Africa (Pty) Limited ("Nufcor SA"), a party related to the
Custodian, to swap 995,000 lbs of U3O8 held by the Company at one facility in
exchange for an equal quantity of U3O8 held by Nufcor SA at a different
facility. The location swap was performed for mutual benefit and for no monetary
consideration. As at 31st December 2007, the Company had swapped 820,000 (2006:
230,000) lbs of U3O8 under the agreement.
Mr K H Williams, the Chairman of the Company, was a director of the Custodian
until his resignation on 31st December 2007. The Adviser is, in turn, a wholly
owned subsidiary of the Custodian. The Company has an Advisory Services
Agreement with the Adviser and the Custodian pursuant to which the Adviser
advises on regulated investment activities, provides market information to the
Board and, on the instruction of the Board, identifies opportunities to acquire,
sell and lend uranium.
The Adviser provides advisory services to the Company. The Company pays the
Adviser a monthly fee in arrears equal to one twelfth of 1% of the total market
value of the uranium owned by the Company. Advisory fees charged in the period
totalled US$1,319,750 (2006: US$586,953), and the sum of US$211,625 was
outstanding as at 31st December 2007.
Non-executive directors are entitled to fees totalling GBP132,500 (2006:
GBP110,000) per annum with effect from 31st December 2007. The highest paid
non-executive Director receives a fee of GBP50,000 per annum. During the period
fees totalling US$120,835 (2006: US$ 105,115) were charged.
Mr A C Pickford, a director of the Company, is Chairman of Mercator Trust
Company Limited ("Mercator"), the Company's administrator. Mercator is entitled
to an annual administration fee. During the period fees totalling US$89,200
(2006: US$56,754) were charged and the sum of US$40,828 was outstanding as at
31st December 2007. Mr A C Pickford holds 12,195 shares (0.03%) (2006: 12,195
shares (0.04%)) in the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEWFWMSASEFE
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