TIDMTMC
Toledo Mining Corporation plc ("Toledo" or the "Company") (AIM:TMC)
Sale and Purchase Transactions
Toledo announces that the Company, DMCI Mining Corporation ("DMCI Mining") and
ENK PLC have agreed the Closings on 31 December 2012 of the Company's sale of
the 31% shareholding in Nickeline Resources Holdings Inc to DMCI Mining ("Sale")
and purchase of the 18.7% interest in Berong Nickel Corporation ("BNC") from ENK
PLC ("Purchase").
Interim Results
Toledo's Interim Results for the six months ended 30 September 2012 reflect a
GBP1.1 million contribution by BNC to the Company's pre-tax profit of GBP0.3
million:
* BNC shipped 420,000 WMT of ore yielding 4,700 tonnes of contained nickel
metal in the period
* BNC maintained its annualised production plan of 750,000 WMT
* Toledo half-year attributable profit before tax of GBP0.265 million (30
September 2011: loss GBP0.310 million)
* Toledo had cash holdings at the end of the period of GBP1.6 million (30
September 2011: GBP3.8 million)
* Consolidated net assets at 30 September 2012 were GBP26.5 million, equivalent
to 53 pence per share
Since the period end:
* Sale and Purchase Transactions completed and Toledo's direct interest in BNC
increased to 40%
* BNC repaid US$2.774 million ( GBP1.7 million) cash to Toledo
* DMCI Mining acquired 17.01% interest in Toledo; Mr Isidro Consunji appointed
non-executive director
* Fevamotinico SARL and associate Forth Asset Management Ltd; aggregate
holding of 25. 18% in Toledo
* Mr Robert Jenkins appointed independent non-executive director
Commenting on the half-year result and events since the Company's period end,
Victor Kolesnikov, CEO, said, "These results reflect your Company's continued
investment in our projects and the strength of our local management team in the
Philippines, as BNC returned a healthy net profit despite challenging market
conditions and a constrained operating environment. I believe that Toledo is
stronger now in our shareholder base, in the composition of its board of
directors, with our strategic partners and throughout our operations in the
Philippines, and we can look ahead to driving the Company forward in 2013 to
unlock further value for shareholders as we expand and develop our nickel
business."
For further information, please see financial statements below, visit
www.toledomining.com or contact:
Victor Kolesnikov, Chief Executive Officer, Toledo Mining Corporation +44 (0)
20 7290 3100
Richard Morrison / Jen Boorer, RFC Ambrian Ltd
+44 (0) 20 3440 6800
Anthony Shewell, Fin Public Relations
+44 (0) 20 7608 2280
Carina Corbett, 4C Communications Ltd
+44 (0) 20 3170 7973
Toledo Mining Corporation Plc
Interim Results for the six month period
ended 30 September 2012
CHAIRMAN'S LETTER TO SHAREHOLDERS
The first six months of the financial year saw the Company report a modest
profit, reflecting our economic share in the results of a solid performance by
Berong Nickel Corporation (BNC) notwithstanding the persistently demanding
economic environment. Mining companies in the Philippines continue to face the
challenges of tough trading conditions in global commodity markets and in
responding to constraints on operations domestically, while suspension of mining
laws continues pending implementation of the new Presidential Executive Order
Number 79. Against this background, we have also continued to work with our
local partners to pursue and meet obligations for the permitting and further
development necessary to take the Ipilan project towards production.
Following the various changes to our shareholder register in October, we are
pleased to welcome DMCI Mining Corporation (DMCI), a wholly owned subsidiary of
DMCI Holdings Inc. both as a shareholder in Toledo and in December as one of our
partners in BNC. DMCI Holdings Inc. is a major Philippines-listed public company
with significant experience in major project development.
In October DMCI acquired a 17.1% interest in Toledo from Daintree Resources
Limited (Daintree) which, in line with its revised investment strategy, divested
of its entire 22.1% holding in Toledo in two separate transactions; Mr Jason
Cheng, the controlling shareholder of Daintree has remained a non-executive
director of Toledo. In the second transaction Daintree sold its remaining
interest to Forth Asset Management Ltd, an associate of major shareholder
Fevamotinico SARL, with the result that together they hold an aggregated
interest of 25.2% in your Company. Further, the Company was informed in October
that Mr Jason Cropper has increased his holding in Toledo to 20.3%.
Having two such renowned Philippine companies as DMCI and Atlas Consolidated
Mining and Development Corporation (Atlas) as our partners positively reinforces
BNC's identity as an emerging business in the Philippines, which will give BNC a
significant advantage as the project gears up to progress to its next stage of
development.
Complementing DMCI's strategic investment in Toledo and BNC, I am pleased to
welcome as a member of Toledo's Board Mr Isidro Consunji, President of DMCI
Holdings Inc. and a director of DMCI, as non-executive director. I am also
pleased to welcome to the Board Mr Robert Jenkins as an independent non-
executive director. Mr Jenkins has over thirty years' experience in investment
management and corporate finance and in January, will also become chairman of
the Company's Audit Committee. These appointments expand and provide balance in
the Board structure and bring considerable depth and breadth of experience which
will be invaluable going forward.
Looking ahead we shall continue to build on our growing success with our
strengthened local partnerships in the Philippines. BNC will maintain its
production profile for next year at the same level as 2012, while at the same
time will actively pursue its goals, subject to receipt of and further
applications for permitting, of expanding exploration and mine production. We
shall also determinedly pursue the value-added HPAL processing project to bring
us closer to our ultimate goal of nickel metal production.
We remain indebted to our shareholders for their continued support, extend our
thanks to all our employees for their hard work and loyal commitment, and
congratulate our staff and management in the Philippines on an excellent
performance throughout 2012.
Constantine Thanassoulas
Chairman
Toledo Mining Corporation PLC
CHIEF EXECUTIVE OFFICER'S REVIEW
Financial Results
For the six months to 30 September 2012, Toledo recorded an attributable profit
of GBP265,853 after accounting for foreign exchange losses of GBP152,692 which arose
primarily from currency translation of the US dollar denominated loans advanced
by Toledo to its Philippines associated undertakings. The attributable profit
was a significant improvement on the loss of GBP310,127 for the comparable 2011
period.
After accounting for attributable profits, consolidated net assets as at 30
September 2012 were GBP26.5 million, equivalent to 53 pence per ordinary share.
Toledo had cash holdings of GBP1.558 million at 30 September 2012. On 9 October
2012, Toledo received from BNC a loan repayment of US$2.774 million ( GBP1.726
million) which has substantially improved the Company's cash position.
Operations
Berong has continued to perform strongly during 2012. Favourable weather
conditions gave rise to a longer than usual shipping window with the result that
in this calendar year, 15 shipments containing more than 776,000 wmt of ore
(above our stated objective of 750,000 tonnes) have been successfully
completed, yielding over 9,000 tonnes of contained nickel metal. Of this total
shipped ore, 420,000 wmt yielding nearly 4,700 tonnes of contained metal were
shipped during the period under review.
Permitting delays, following the implementation of the new presidential
Executive Order, continue to present challenges, but all requirements for our
tree cutting permit have been complied with and since publication of the
Executive Order and the Implementation of Rules and Regulations earlier this
year, BNC's application has been recommended for approval and we are hopeful it
will receive final sign-off in 2013. In any event, having reviewed and
optimised the mining plan for 2013, BNC is confident that production tonnages
and grades can be maintained at 2012 levels, while awaiting receipt of the new
tree cutting permit.
There were some positive outcomes resulting from the constrained conditions in
which BNC found itself during the year: the team was able to gain invaluable
experience in the simultaneous production of different ore grades which
substantially improved efficiencies both in personnel and in the operation
itself. I am in no doubt that the difficulties faced by our team at BNC during
the year have strengthened and equipped them to deal with the big challenge to
improve productivity and to expand our mining operations when the tree cutting
permit is issued.
Stable cash flows from BNC have provided the necessary funding to commence
evaluation of HPAL technology to treat the lower grade ores at Berong, in
pursuit of our value-added processing strategy and to that end, we have engaged
well established consultants such as GHD and SNC-Lavalin to conduct the
necessary studies.
Corporate Activity
In May, ENK plc announced that it intended to sell its 18.7% interest in BNC for
US$6,552,000. Over the summer, the Board took the decision to exercise the
Company's pre-emption right under the Berong Shareholders Agreement to acquire
this interest, the result of which will increase Toledo's direct interest in BNC
to 40%.
Subsequent to the end of the period under review, Toledo exchanged contracts
with DMCI whereby they would acquire from Toledo a 31% interest in Nickeline
Resources Holdings Inc. (NRHI) for a cash consideration of US$6,552,000. NRHI
holds 60% of BNC and this sale represents an 18.6% indirect interest in Berong.
The proceeds from this sale are being applied to the purchase of ENK's interest
in BNC and although Toledo's overall interest in BNC will not change materially
as a result of these two transactions, the Company's increased direct interest
will give it greater representation on the Board of BNC.
Market conditions
Despite ongoing difficult global commodities markets, there continues to be a
positive dynamic in the nickel ore market with strong and stable demand from
China which has resulted in improving payable factors for our ore. The general
consensus is that the coming years will see a supply deficit in the nickel
market and this adds to our confidence that our plans for a value-added
processing project are well timed.
Environment, Health & Safety and Corporate Social Responsibility
Berong continues to set the regional benchmark in best practice for its
environmental protection and safety. The high standards of environmental
protection and enhancement activities are used as a yardstick for other mining
companies in the Philippines.
Funds from the Company's Social Development and Management Programme and royalty
payments made to the indigenous people, continue to provide essential services
to the community as well as establishing livelihood projects which aim to
empower the local community in generating its own sustainable income.
Outlook
The outlook for Toledo looks positive. We move forward with a firmer position
in BNC, enhanced by two highly regarded local Philippine partners, DMCI and
Atlas, whose presence substantially improves our position to bring the Berong
project to a different level by increasing the capacity of our current direct
ore shipping operation as well as our added-value project to use HPAL technology
to process the lower grade ore at Berong. Aided by a prolonged shipping window,
BNC has enjoyed a good year, exceeding its output target, maintaining its end-
user markets in China and opening up new channels to Japan. We shall continue
our efforts to seek to consolidate and develop Berong's market position as a
reputable ore supplier and despite ongoing global economic difficulties, BNC is
better placed now to enhance its performance and make an increased contribution
to the real underlying value of Toledo's investment.
I am grateful for the enduring support and hard work demonstrated by our staff,
both in the Philippines and in London, and I thank our shareholders for their
continued support. I wish also to acknowledge the co-operation and support of
the local community in the Philippines, the Local Government Units and the
Provincial and National Governments as we continue to forge strong
relationships.
Victor Kolesnikov
Chief Executive Officer
Toledo Mining Corporation PLC
INDEPENDENT REVIEW REPORT TO TOLEDO MINING CORPORATION PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2012 which comprises the Condensed Consolidated Interim Income
Statement, the Condensed Consolidated Interim Statement of Comprehensive
Income, the Condensed Consolidated Statement of Financial Position, the
Condensed Consolidated Statement of Changes in Equity, the Condensed
Consolidated Interim Statement of Cash Flows and the related notes numbered 1 to
9. We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The AIM Rules require that the accounting policies and
presentation applied to the half-yearly figures must be consistent with those
applied in the latest published annual accounts except where the accounting
policies and presentation are to be changed in the subsequent annual financial
statements, in which case the new accounting policies and presentation should be
followed, and the changes and the reason for the changes should be disclosed in
the half-yearly financial report.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting," as adopted by the European Union.
Our Responsibility
Our responsibility is to express a conclusion on the condensed set of financial
statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2012 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union.
Sawin & Edwards
Chartered Accountants
Suite 1.3, Vernon House
23 Sicilian Avenue
London
WC1A 2QS
28 December 2012
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
Six month period ended 30 September 2012
Six months period Six months period
ended ended
30 September 30 September Year ended
2012 2011 31 March 2012
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Revenue - 98,753 154,912
Gross profit - 98,753 154,912
Administrative
expenses (795,630) (782,737) (1,560,583)
Foreign exchange
(losses)/gains (152,692) 436,621 67,615
Other operating
income 24,943 44,763 94,145
Unrealized losses on
investments - (304,764) (304,763)
Share of results of
associates 1,150,595 178,072 1,088,739
Profit/(loss) from
operations 227,216 (329,292) (459,935)
Investment income 4,516 9,504 11,373
_______ _______ _______
Profit/(loss) before
taxation 231,732 (319,788) (448,562)
Income tax expense - - -
Profit/(loss) for
the period 231,732 (319,788) (448,562)
Attributable to:
Equity holders of
the parent 265,853 (310,127) (416,382)
Non-controlling
interest (34,121) (9,661) (32,180)
231,732 (319,788) (448,562)
Earnings/(loss) per
share (pence) -
including share of
associates results 4
Basic 0.53 (0.62) (0.84)
Diluted 0.53 (0.62) (0.84)
Earnings/(loss) per
share (pence) -
excluding share of
associates results 4
Basic (1.77) (0.98) (3.02)
Diluted (1.77) (0.98) (3.02)
The Group has no recognised gains or losses other than the results for the
periods as set out above.
CONDENSED CONSOLIDATED INTERIM STATEMENT
OF COMPREHENSIVE INCOME
Six month period ended 30 September 2012
Six months Six months
period ended period ended Year ended
30 September 30 September 31 March
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
Profit/(loss) for the
period 231,732 (319,787) (448,562)
Foreign currency
translation
differences for
foreign operations (7,129) 22,242 2,925
Other comprehensive
(expense)/income for
the period (7,129) 22,242 2,925
Total comprehensive
income/(expense) for
the year 224,603 (297,545) (445,637)
Attributable to:
Equity holders of the
parent 261,853 (297,649) (414,740)
Non-controlling
interest (37,250) 104 (30,897)
224,603 (297,545) (445,637)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2012
As at
As at 30 September As at
30 September 2012 2011 31 March 2012
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
ASSETS
Non-Current Assets
Property, plant
and equipment 6,927 933 683
Investments in
associated
undertakings 10,434,124 8,309,112 9,283,529
Loans and
receivables 14,055,101 14,127,422 14,049,297
Trade and other
receivables 41,400 - 41,400
Total non-current
assets 24,537,552 22,437,467 23,374,909
Current Assets
Trade and other
receivables 1,106,815 932,405 816,649
Taxation 25,612 31,395 86,344
Cash and cash
equivalents 1,623,830 3,781,521 2,619,846
Total current
assets 2,756,257 4,745,321 3,522,839
_________ _______ _________
Total Assets 27,293,809 27,182,788 26,897,748
EQUITY AND
LIABILITIES
Current
Liabilities
Trade and other
payables 771,461 752,192 600,003
______ ______ ____
Total current
liabilities 771,461 752,192 600,003
_______ _______ _______
Total Liabilities 771,461 752,192 600,003
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(continued)
As at 30 September 2012
As at As at As at
30 September 2012 30 September 2011 31 March 2012
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
Equity and Reserves
Called up share
capital 5 2,492,267 2,492,267 2,492,267
Share premium 28,714,157 28,714,157 28,714,157
Share based
payments reserve 24,393 193,801 86,168
Translation reserve 76,448 91,283 80,448
Profit and loss
account (5,099,330) (5,443,576) (5,426,958)
Equity attributable
to equity holders
of the parent 26,207,935 26,047,932 25,946,082
Non-controlling
interest 314,413 382,664 351,663
_________ _________ _________
Total Equity 26,522,348 26,430,596 26,297,745
Total equity and
liabilities 27,293,809 27,182,788 26,897,748
These interim results were approved by the Board on 28 December 2012 and signed
on its behalf by:
Constantine Thanassoulas
Chairman
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six month period ended 30 September 2012
Share Trans-
Based Non- lation
Share Share Payments Retained controlling Exchange
Capital Premium Reserve Loss Interest Reserve Total
GBP GBP GBP GBP GBP GBP GBP
Balance at 1
April 2012 2,492,267 28,714,157 86,168 (5,426,958) 351,663 80,448 26,297,745
Total
comprehensive
income
/(expense)
Profit/(loss)
for the
period - - - 265,853 (34,121) - 231,732
Total other
comprehensive
income
/(expense) - - - - (3,129) (4,000) (7,129)
Total
comprehensive
income
/(expense)
for the
period - - - 265,853 (37,250) (4,000) 224,603
Transfer from
reserve - - (61,775) 61,775 - - -
Balance at
30 September
2012 2,492,267 28,714,157 24,393 (5,099,330) 314,413 76,448 26,522,348
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six month period ended 30 September 2011
Share Trans-
Based Non- lation
Share Share Payments Retained controlling Exchange
Capital Premium Reserve Loss Interest Reserve Total
GBP GBP GBP GBP GBP GBP GBP
Balance at 1
April 2011 2,492,267 28,714,157 193,801 (5,133,449) 382,560 78,806 26,728,142
Total
comprehensive
income
/(expense)
Loss for the
period - - - (310,127) (9,661) - (319,788)
Total other
comprehensive
income
/(expense) - - - - 9,765 12,477 22,242
Total
comprehensive
income
/(expense)
for the
period - - - (310,127) 104 12,477 (297,545)
________ _________ _______ _______ ______ ______ _______
Balance at
30 September
2011 2,492,267 28,714,157 193,801 (5,443,576) 382,664 91,283 26,430,596
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2012
Trans-
Share lation
Based Non-
Share Share Payments Retained controlling Exchange
Capital Premium Reserve Loss Interest Reserve Total
GBP GBP GBP GBP GBP GBP GBP
Balance at 1
April 2011 2,492,267 28,714,157 193,801 (5,133,449) 382,560 78,806 26,728,142
Total
comprehensive
expense
Profit/(Loss)
for the year
- - - (416,382) (32,180) - (448,562)
Total other
comprehensive
expense - - - - 1,283 1,642 2,925
Total
comprehensive
expense for
the year - - - (416,382) (30,897) 1,642 (445,637)
Transfer from
reserve - - (122,873) 122,873 - - -
Share options
granted in
year - - 15,240 - - - 15,240
________ _________ _______ _______ ______ ______ _______
Balance at
31 March 2012 2,492,267 28,714,157 86,168 (5,426,958) 351,663 80,448 26,297,745
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Six month period ended 30 September 2012
Six months Six months
period ended period ended
30 September 30 September Year ended
2012 2011 31 March 2012
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Net cash outflow from
operating activities (827,531) (474,326) (1,319,963)
Investing Activities
Capital expenditure (7,316) - -
Investment income 4,516 9,504 11,373
Investments - - (63,752)
Loan investments
repaid/(advanced) (165,685) 2,369,101 2,114,946
_________ _________ _________
Net cash flow from
investing activities (168,485) 2,378,605 2,062,567
(Decrease) / increase
in cash and cash
equivalents (996,016) 1,904,279 742,604
Cash and cash
equivalents brought
forward 2,619,846 1,877,242 1,877,242
________ ________ ________
Cash and cash
equivalents carried
forward 1,623,830 3,781,521 2,619,846
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Six month period ended 30 September 2012
1. General information
Toledo Mining Corporation PLC ("Toledo" or "Company") is a company incorporated
in England and Wales under the Companies Act 1985. The Company's registered
office is First Floor, 10 Dover Street, London, W1S 4LQ. The registration number
of the Company is 5055833.
The principal activity of the Company is the investment in and exploration and
development of mining projects, specifically in associated companies (together
with Company and its subsidiaries the "Group") in the Philippines.
The Group's principal activity is carried out in US dollars. The financial
statements are presented in pounds sterling as this is the currency of United
Kingdom, the country where the Company is incorporated and its ordinary shares
admitted for trading.
The Board of directors has authorised the issue of these interim results on the
date of the statement as set out above.
2. Accounting policies
Basis of accounting
The interim results have been prepared in accordance with International
Accounting Standard 34 "Interim Financial Reporting".
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs).
The interim results have been prepared on the historical cost basis except that
certain financial instruments are accounted for at fair values. The same
principal accounting policies and methods of computation have been followed in
the interim results as compared with the Group's financial statements for the
year ended 31 March 2012.
Going Concern
The interim results have been prepared on a going concern basis, which
contemplates continuity of normal business activities and the realisation of
assets and settlement of liabilities in the ordinary course of business.
The directors believe that it is appropriate to prepare the financial report on
a going concern basis as they are confident that the Company has adequate cash
resources for at least the next twelve months.
3. Segmental analysis
The turnover and profit/(loss) are attributable to the principal activities of
the Group. Segmental information on a geographical basis is set out below:
Period ended 30 September 2012
UK Philippines China Total
GBP GBP GBP GBP
Revenue
- - - -
Loss for the period
excluding associates (841,138) - (77,725) (918,863)
Share of associates
results - 1,150,595 - 1,150,595
Total assets 3,630,881 22,936,117 726,811 27,293,809
Total liabilities (337,907) (432,950) (604) (771,461)
Loan investment
additions - 165,685 - 165,685
Period ended 30 September 2011
UK Philippines China Total
GBP GBP GBP GBP
Revenue - - 98,753 98,753
Loss for the period
excluding associates (475,853) - (22,007) (497,860)
Share of associates results - 178,072 - 178,072
Total assets 3,848,134 22,452,982 881,672 27,182,788
Total liabilities (287,814) (464,378) - (752,192)
Loan investment net
repayments - 1,999,986 - 1,999,986
Year ended 31 March 2012
UK Philippines China Total
GBP GBP GBP GBP
Revenue - - 154,912 154,912
Profit/(Loss) for the
year excluding
associates (1,463,998) - (73,303) (1,537,301)
Share of associates
results - 1,088,739 - 1,088,739
Total assets 3,140,476 22,930,313 826,959 26,897,748
Total liabilities 146,325 437,780 15,898 600,003
Loan investment
reduction - (2,078,111) - (2,078,111)
4. Profit/(Loss) per share - including share of associates results
Profit/(loss) per share has been calculated by dividing the profit/(loss) for
the period after taxation including share of associates profits of GBP1,150,595
(30 September 2011: profits GBP178,072; 31 March 2012: profits GBP1,088,739)
attributable to the equity holders of the parent company of GBP265,853 (30
September 2011: loss GBP310,127) (31 March 2012: loss GBP416,382) by the weighted
average number of shares in issue for the period of 49,845,333 (and for 30
September 2011 and 31 March 2012).
Diluted profit per share has been calculated using the weighted average number
of shares in issue for the period, diluted for the effect of share options in
existence at the period end of 340,000 ( 30 September 2011 and 31 March
2012: 665,000).
Loss per share - excluding share of associates results
Loss per share has been calculated by dividing the loss for the period after
taxation excluding share of associates profits of GBP1,150,595 (30 September
2011: profits GBP178,072 and 31 March 2012: profits GBP1,088,739) attributable to
the equity holders of the parent company of GBP884,742 (30 September 2011:
GBP488,199; 31 March 2012: GBP1,505,121) by the weighted average number of shares in
issue for the period of 49,845,333 (and for 30 September 2011 and 31 March
2012).
5. Called up share capital
Six months period Six months period
ended 30 September ended 30 September Year ended 31
2012 2011 March 2012
(Unaudited) (Unaudited) (Audited)
Authorised
Ordinary shares
of 5p each
Number 66,460,453 66,460,453 66,460,453
Nominal value 3,323,023 3,323,023 3,323,023
Allotted and
fully paid
Ordinary shares
of 5p each
Number 49,845,333 49,845,333 49,845,333
Nominal value 2,492,267 2,492,267 2,492,267
6. Material related party transactions
Atlas Consolidated Mining and Development Corporation ('Atlas') and ENK PLC are
joint venture partners with the Company under the Berong Venture Agreement.
Brooks Nickel Ventures, Inc. (Brooks) and Celestial Nickel Mining and
Exploration Corporation ('Celestial') are joint venture partners with the
Company under the Celestial/Ipilan Venture Agreement.
Atlas is joint venture partner with the Company under the Ulugan Venture
Agreement.
Under the Berong, Celestial/Ipilan and Ulugan Venture Agreements, the Company
has through the expenditure of qualifying costs of GBP10,464,306 (and as at 30
September 2011 and 31 March 2012) acquired equity interests in the following
Philippines' registered companies.
TMM Ulugan Ulugan Nickeline Berong Nickel Ipilan
Management Resources Nickel Resources Nickel Laterite Nickel
Inc Holdings Corp. Holdings Corp. Resources Corp.
Inc Inc Inc
Direct 40% 30% 40% 40% 21.3% 20% 40%
Indirect - - 18% 18% 34.8% - 12%
Total 40% 30% 58% 58% 56.1% 20% 52%
In May 2007, the Company entered into an agreement to make a loan facility
available to Brooks of up to US$2.5 million principal, subsequently increased on
4 March 2010 to US$10 million. On 7 September 2012 the Company agreed to
increase the facility to US$10,592,329. During the period, the Company advanced
a further US$260,000 (period to 30 September 2011: US$520,000; year to 31 March
2012: US$910,400) to Brooks and principal outstanding at 30 September 2012
amounted to US$10,485,329. This amount forms part of the total principal amount
advanced as shown under non-current loan investments. Since the period end, on
7 December 2012 the Company agreed by letter to further increase the facility to
US$10,832,329 and has advanced a further US$347,000 bringing the facility to
fully drawn as at the date of these financial statements. Under the terms of the
agreement the loan facility bears interest at 10% cumulative per annum and, as
amended by the agreement in March 2010, is repayable four years from each
drawdown. Under terms of the letter of 7 December 2012, the Company has agreed
to extend the moratorium since 1 April 2011 on interest charges, and to not make
immediate demand of repayments falling due, until 31 March 2013 while the
parties continue to discuss an appropriate restructuring of facilities for the
ongoing funding for development of the Ipilan nickel project. The loan is
presently secured over Brooks' share of earnings from the Ipilan nickel project
and is repayable out of Brooks' share of the Ipilan future cash flows.
Under the Celestial joint venture agreement, the Company has an option to
acquire a 40% holding in Celestial. During the year ended 30 March 2007 the
Company agreed to an advance of US$900,000, against the option exercise amount.
If the Company decides not to exercise the option to purchase, or is prevented
by any cause from exercising the option to purchase, then the borrowers are
required to reimburse the US$900,000. The advance is interest free and
guaranteed by Celestial but is otherwise unsecured. The amount forms part of the
total principal amount advanced as shown under non-current loan investments.
Celestial owns 40% of the issued share capital of Nickel Laterite Resources Inc.
which owns 60% of Ipilan Nickel Corporation ('INC'). There is a royalty
agreement in place such that the Company has a commitment to make certain
payments to Celestial as described in note 7.
A potential claim for an unspecified sum for breach of contract has been
notified to the Company in respect of a dispute with Celestial. The directors
are firmly of the opinion that the claim is without foundation and no provision
has been made in these accounts in respect of this.
The Company's expenditure commitment under the Ulugan Venture Agreement at the
period end is US$700,000 (and as at 30 September 2011 and 31 March 2012).
Under the Berong Venture Agreement, the Company has advanced funds to Berong
Nickel Corporation ('BNC') to meet ongoing mine development costs. During the
period, the Company made no further advances (period to 30 September 2011:
US$112,200; year to 31 March 2012: US$392,588) to BNC. The amount outstanding at
30 September 2012 was US$8,345,593. These amounts form part of the total
principal amount advanced as shown under non-current loan investments. On 9
October 2012 BNC repaid to the Company an amount of US$2,774,310 reducing the
advances outstanding to US$5,571,283 as at the date of these financial
statements. The amounts advanced are interest free, unsecured and have no fixed
terms of repayment.
The Company has two subsidiaries, China Nickel Corporation ('CNC'), and China
Nickel & Steel Corporation (not trading).
During the period CNC made no charges to BNC (period to 30 September 2011:
US$112,074; year to 31 March 2012 US$173,086; in respect of consulting fees). At
the period end BNC owed to CNC US$935,886 (30 September 2011: US$1,184,166; 31
March 2012: US$1,138,604).
During the period CNC made no charges to INC US$Nil (period to 30 September
2011: US$48,032; year to 31 March 2011: US$74,180) in respect of consulting
fees. At the period end INC owed to CNC US$104,328 (30 September 2011:
US$78,215) (31 March 2012: US$104,328).
7. Commitments and contingencies
Under a royalty agreement, the Company has made a commitment to make certain
payments to Celestial under the Ipilan Venture Agreement as follows:
Upon completion of positive bankable feasibility study US$ 500,000
Upon the commencement of construction of plant US$1,200,000
A potential claim for an unspecified sum for breach of contract has been
notified to the Company in respect of a dispute with Celestial. The directors
are firmly of the opinion that the claim is without foundation and no provision
has been made in these accounts in respect of this.
8. Associate Undertakings
The Company had equity holdings in the following associate undertakings at 30
September 2012 (and at 30 September 2011 and 31 March 2012):
TMM Ulugan Ulugan Nickeline Berong Nickel Ipilan
Management Resources Nickel Resources Nickel Laterite Nickel
Inc Holdings Corp. Holdings Corp. Resources Corp.
Inc Inc Inc
Direct 40% 30% 40% 40% 21.3% 20% 40%
Indirect - - 18% 18% 34.8% - 12%
Total 40% 30% 58% 58% 56.1% 20% 52%
The principal place of business and country of incorporation of the associate
undertakings is the Philippines.
Summarised results of the associate undertakings as translated into Sterling are
as follows:
Period ended 30 September 2012
Berong Nickel Ipilan Nickel Remaining
Corporation Corporation Associates Total
GBP GBP GBP GBP
Revenue 9,844,979 - 193,402 10,038,381
Profit / (loss)
for the period 1,948,623 104,366 8,176 2,061,165
Total assets 18,373,424 7,680,111 2,228,815 28,282,350
Total
liabilities (10,681,607) (8,529,187) (2,078,878) (21,289,672)
Period ended 30 September 2011
Berong Nickel Ipilan Nickel Remaining
Corporation Corporation Associates Total
GBP GBP GBP GBP
Revenue 3,893,349 - 197,316 4,090,665
Profit / (loss)
for the period 373,080 (74,461) 18,670 317,289
Total assets 15,438,200 7,146,667 2,184,616 24,769,483
Total liabilities 11,485,493 109,545 1,703,630 13,298,668
Year ended 31 March 2012
Berong Nickel Ipilan Nickel Remaining
Corporation Corporation Associates Total
GBP GBP GBP GBP
Revenue 11,053,650 - 416,687 11,470,337
Profit / (loss)
for the year 2,055,970 (129,398) 6,846 1,933,418
Total assets 17,840,329 7,291,689 2,160,643 27,292,661
Total liabilities 12,263,983 8,220,221 1,977,416 22,461,620
9. Post balance sheet events
On 9 October 2012 BNC repaid to the Company an amount of US$2,774,310 reducing
the advances outstanding to US$5,571,283.
On 24 October 2012 Daintree Resources Limited, a company controlled by Mr Jason
Cheng, a director of the Company, sold a 17.01% holding in Toledo to DMCI Mining
Corporation, reducing its holding in Toledo to 4.99%.
On 30 October 2012 Daintree sold its remaining 4.99% holding in Toledo to Forth
Asset Management Limited, a company under common ultimate beneficial
ownership with Fevamotinico SARL and therefore deemed an associate of
Fevamotinico which holds 20.19% of Toledo. Accordingly, Fevamotinico and its
associate hold a total of 25.18% of the voting rights of the Company.
On 7 December 2012 the Company agreed by letter to further increase the INC
facility to US$10,832,329 and has advanced a further US$347,000 since the
balance sheet date, bringing the facility to fully drawn, and to extend the
moratorium since 1 April 2011 on interest charges and to not make immediate
demand of repayments falling due, until 31 March 2013.
On 14 December 2012 the Company appointed Mr Isidro Consunji, a director of
DMCI, as a non-executive director of Toledo and Mr Robert Jenkins as an
independent non-executive director of the Company. Mr Jenkins was also appointed
Audit Committee Chairman effective 1 January 2013.
On 19 December 2012, pursuant to the Company's announcement on 22 October 2012,
Toledo exchanged contracts for the sale of an 18.6% indirect interest in BNC
('Sale') to DMCI for cash consideration of US$6,552,000 comprised of a 31%
shareholding in Nickeline Resource Holdings Inc on which the Company estimates a
capital gains liability to UK corporation tax will arise of approximately
US$489,000. DMCI acquired a 17.01% holding in Toledo on 24 October 2012.
As DMCI is a related party by virtue of its 17.01% holding in Toledo, the Sale
is a related party transaction as defined by Rule 13 of the AIM Rules for
Companies. Accordingly, the directors of the Company (Mr Consunji being recused)
considered, having consulted with the Company's nominated adviser, that the
terms of the Sale were fair and reasonable as far as the Company's shareholders
are concerned.
On 24 December 2012, pursuant to the Company's announcement on 29 June 2012 for
the purchase of an 18.7% direct interest in BNC ('Purchase') from ENK PLC for
cash consideration of US$6,552,000 (comprised of an 18.7% shareholding in BNC
and rights to stockholder advances of US$1,789,220), Toledo and ENK PLC agreed
to Closing of contracts on 31 December 2012. On completion of the Purchase the
balance of Company's loan to BNC will be US$7,360,503. ENK PLC sold its 5.01%
holding in Toledo on 8 May 2012. On 12 October 2012 DMCI Mining Corporation
announced, as joint offeror, unconditional control of ENK PLC.
Following completion of the Purchase and Sale, the Company will have the
following equity holdings in the associate undertakings:
TMM Ulugan Ulugan Nickeline Berong Nickel Ipilan
Management Resources Nickel Resources Nickel Laterite Nickel
Inc Holdings Corp. Holdings Corp. Resources Corp.
Inc Inc Inc
Direct 40% 30% 40% 9% 40.0% 20% 40%
Indirect - - 18% 18% 16.2% - 12%
Total 40% 30% 58% 27% 56.2% 20% 52%
TMC Interim Results to 30 Sept 2012:
http://hugin.info/137994/R/1667505/541375.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Toledo Mining Corporation PLC via Thomson Reuters ONE
[HUG#1667505]
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