TIDMTSTR
RNS Number : 4600R
Tri-Star Resources PLC
09 March 2016
TRI-STAR RESOURCES PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015
9 March 2016
Tri-Star Resources plc ("Tri-Star" or the "Company") is pleased
to announce its financial results for the year ended 31 December
2015.
Financial highlights:
-- Profit on sale of intellectual property of GBP1.6 million (2014: GBPnil)
-- Board monthly ongoing salary cost cut by over 50%
-- Operating expenses reduced by 21%
-- Loss before impairments and fair value movements reduced by 27%
-- Cash as at 29 February 2016 of GBP1.0 million
Operational highlights:
-- In June 2015, agreement reached for the sale of Tri-Star's
intellectual property rights ("IPR") to Strategic & Precious
Metals Processing LLC ("SPMP") for a sum of up to US$6.0
million
-- In August 2015 Tri-Star completed the raising of GBP3.5
million by way of private placement of convertible notes and new
equity
-- On 16 September 2015 Tri-Star announced that SPMP had
achieved financial close for the Oman Antimony Roaster Project
("OAR") and Tri-Star had fully funded in cash its equity funding
commitment, to SPMP, of US$6.0 million;
-- US$4.0 million received from sale of IPR on financial close, US$2 million remains contingent
-- Post year end, in February 2016, Tri-Star announced that SPMP
had entered into an EPCM services agreement with world leading
engineering services provider, WorleyParsons
-- Non-core gold assets sold in Canada; licence extension obtained in Turkey
Guy Eastaugh, Chief Executive Officer, said "I am pleased to
present these annual results to shareholders demonstrating not only
the enormous operational achievements the Company made in 2015 but
also the impact of the sale of intellectual property to our
associate joint venture company, SPMP, and its successful financial
close.
"The Company's financial position entering 2016 is sound, given
we have GBP1.0 million in cash and our operating costs greatly
reduced going forward, the result of extensive cost cutting
measures implemented towards the latter part of 2015 and into 2016.
We are very pleased with the advances made to date and look forward
to further significant accomplishments this year."
CHAIRMAN'S STATEMENT
2015 represented a truly transformational year for Tri-Star. The
Company, in conjunction with its joint venture partners in SPMP,
brought the OAR to financial close in the midst of very difficult
market conditions for this type of commercial endeavour. In
addition, alongside the successful sale of our intellectual
property to the joint venture, Tri-Star was able to fully finance
its $6.0 million equity share of the project.
Throughout 2015, the Company continued to advance the OAR,
achieving many significant milestones along the way, culminating
with Tri-Star's successful GBP3.5 million fundraise in August 2015
and financial close of the OAR shortly thereafter in September
2015. Reports already published in earlier years had confirmed the
project's technical and financial viability and the engineering
design work has now been completed. The OAR joint venture company
itself, Strategic & Precious Metals Processing LLC, has long
since taken over the detailed negotiations with counterparties
required on a number of fronts in relation to the project. In
February 2016, SPMP achieved a notable milestone with the
appointment of a lead EPCM contractor to oversee the construction
of the Roaster. Whilst significant tasks remain ahead, the Company
and its partners have demonstrated considerable commitment and
desire to see the OAR come to fruition. SPMP is set to commence
site preparation and construction of the facility during 2016, with
plant commissioning by the end of 2017.
In 2015 we took the difficult decision to scale back our
operations in Canada in the light of prevailing low prices for
commodities and metals, generally, around the world. We have
reduced our footprint to comprise essentially the strategically
important antimony prospect in the Bald Hill region of New
Brunswick, Canada. The associated gold assets have long been
considered non-core and in January 2016 a significant proportion of
these gold assets, comprising the Golden Pike properties, were
sold. Likewise, in light of prevailing market conditions, the
Company is reviewing the strategic options open to it in relation
to the Göynük antimony mine in Turkey.
Regarding the Company's financial position, during the year
Tri-Star secured additional funding through a GBP2.0 million
private placing of Convertible Notes with Odey European Inc. and
also raised a further GBP1.5 million through the issue of new
equity. Details of the subsequent important changes to the terms of
the Convertible Notes are set out in the accompanying financial
statements.
As for the overall result for the year, I am pleased to report
that the Group recorded a very much reduced loss before impairments
and movements in the fair value of the Convertible Notes of
GBP1,816,000 (2014: GBP2,497,000), down by 27%. A dividend is not
being recommended at this time.
I would like to thank my non-executive Board colleagues Adrian
Collins and Jonathan Quirk for all their hard work during the year,
along with the executive management team and our employees for
their dedication and effort during what turned out to be a hugely
successful year for Tri-Star.
In September 2015, Guy Eastaugh was appointed Chief Executive
Officer, having previously been our Chief Financial Officer and
Emin Eyi was appointed Deputy Chairman of the Company
contemporaneous with his appointment as Chief Executive Officer of
SPMP. Ken Hight stepped down from the Board in October and I thank
him for his hugely valuable contribution since joining us in
2013.
Mark Wellesley-Wood
Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
Our goal is to become a leading antimony metal processing and
technology company. The Company's principal asset is its 40% share
in Strategic & Precious Metals Processing LLC which is
developing a 20,000 tonne per annum antimony production facility in
Sohar, Sultanate of Oman, the "OAR". Tri-Star also owns upstream
antimony assets in Canada and Turkey.
I am pleased to report on the Company's progress towards
achieving its aims during 2015 and set out the clear priorities for
Tri-Star's financial and other resources for the future.
Result for the year
During 2015, despite the heavily increased activity level and
costs associated both with the raising of funds by TriStar and the
Company assisting SPMP in achieving its financial close, Tri-Star
was successful in containing operating expenditure well within
previously observed levels. Exploration and administration costs,
which are very largely cash in nature, fell by 21% in 2015 to
GBP1,789,000.
2015 2014
Expanded Profit and Loss Account GBP'000 GBP'000
Share based payments (337) (21)
Exploration and administrative costs (1,789) (2,255)
Financial advisory costs payable on (863) -
financial close
Loss from operations (2,989) (2,276)
Gain on sale of Intellectual Property 1,555 -
Share of loss in associates (382) (221)
Loss before impairment and finance expense (1,816) (2,497)
Impairments and amortisation (4,203) (6)
Net finance (expense)/income (1,710) 106
Taxation 601 -
Loss after taxation (7,128) (2,397)
One-off success fees of GBP863,000 were paid, in cash, by
Tri-Star to third party financial advisors assisting Tri-Star in
connection with SPMP achieving its financial close in September
2015.
Tri-Star realised a GBP1,555,000 gain from the September 2015
sale of its intellectual property rights in the OAR to joint
venture company, SPMP. $4.0 million of cash was received by
Tri-Star on financial close of the OAR. A further $2.0 million is
payable by SPMP to Tri-Star contingent on certain future events
concerning the successful commissioning of the OAR.
Share of loss in associates represents Tri-Star's share of
SPMP's post tax result for the year. SPMP has been loss making to
date during what are the early stages of its development.
The impairment of GBP4,203,000 taken in 2015 is related to the
intangible exploration asset that arose on the acquisition of
Portage Minerals Inc. in 2013. In light of current market
conditions, the Directors have decided to impair this asset in
full. This is discussed further in this report and also in the
notes to the financial statements.
Net finance expense of GBP1,710,000 in 2015 (2014: net income
GBP106,000) represents the net impact on profit and loss of the
revaluation of the Convertible Notes at the financial year end.
This item is non-cash in nature. Further detail on this is set out
in the accompanying notes to the financial statements.
Of the net tax credit of GBP601,000, GBP76,000 comprises actual
cash tax receivable in the year rebated to the Company under the UK
tax regime in respect of qualifying research and development
expenditure.
Antimony
Antimony (Sb) is a silvery-white, shining, soft and brittle
metal. It is a semiconductor and has thermal conductivity lower
than most metals. Due to its poor mechanical properties, pure
antimony is only used in very small quantities; larger amounts are
used for alloys and in antimony compounds. Antimony is a member of
the Group 15 "pnictogen" elements, also known as the nitrogen
family, in the Periodic Table. Antimony has atomic number 51 and an
atomic weight of 122. The metal is brittle and has a low melting
point of 630(o) C and boils at 1380(o) C.
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The principal use of antimony is in flame retardants as antimony
trioxide (ATO). ATO is most commonly used as a synergist to improve
the performance of other flame retardants such as aluminium
hydroxide, magnesium hydroxide and halogenated compounds. ATO is
used in this way in many products including plastics, textiles,
rubber, adhesives and plastic covers for aircrafts and automobiles.
The largest applications for metallic antimony are as alloying
material for lead and tin and for lead antimony plates in lead-acid
batteries. Alloying lead and tin with antimony improves the
properties of the alloys which are used in solders, bullets and
plain bearings. The second most common use of antimony alloy is as
a hardener for lead electrodes in lead acid batteries. This use is
in decline as the antimony content of typical automotive battery
alloys has declined by weight as calcium, aluminium and tin alloys
are expected to replace it over time.
An emerging application is the use of antimony in
microelectronics.
Oman Antimony Roaster
Background
In 2011, the Company began seeking partners in the Gulf region
to investigate the siting and construction of a 20,000 tonne per
annum antimony production facility to be engineered to meet EU
environmental and regional based standards. The facility is being
designed to produce antimony ingot, ATO and related products. This
exercise led ultimately to the formation of a local consortium to
develop the Oman Antimony Roaster in late 2013.
Oman joint venture
Strategic & Precious Metals Processing LLC, an Omani
company, was formed in June 2014 to develop and build the OAR
within the Port of Sohar Free Zone in the Sultanate of Oman.
Tri-Star has a 40% equity interest in SPMP, with the other joint
venture partners being; Oman Investment Fund (which also owns 40%)
and DNR Industries Limited (which owns the remaining 20%).
Development and financial close
During 2014 and the first half of 2015, the Company worked
closely with its joint venture partners to progress the legal,
engineering and environmental due diligence work streams associated
with the project. The process moved on to the finalisation of the
banking documentation in August 2015 and ultimately financial
closure in September 2015.
In 2015, the Company made a number of announcements relating to
progress made by SPMP, most notably:
-- In February 2015, the signing of a Facility Offer Letter
between SPMP and Bank Nizwa, a bank based in Oman, to provide SPMP
with a Sharia compliant facility of up to US$40 million;
-- Also in February 2015, the receipt by SPMP of the provisional
environmental permit from the Ministry of Environmental and Climate
Affairs;
-- In April 2015, SPMP took delivery of an engineering report
which discussed the viability of the overall antimony roasting
process as developed by Tri-Star and provided a capital expenditure
estimate of approximately US$62 million for the construction of the
facility;
-- Also in April 2015, the signing by SPMP of heads of agreement
with Traxys Europe SA, selecting Traxys as SPMP's nominated trading
partner. In this role, it is intended that Traxys will supply
feedstock and provide offtake and related financing and other
services to SPMP;
-- In June 2015, Tri-Star announced that it had reached
agreement with SPMP for the sale of Tri-Star's intellectual
property to SPMP for a sum of up to $6.0 million, in three $2.0
million tranches. The first two payments were subsequently received
by Tri-Star on financial close;
-- At the beginning of August 2015, Tri-Star completed the
raising of GBP3.5 million by way of a private placement of
convertible notes and new equity to fund its 40% equity share of
SPMP;
-- Later in August 2015, it was announced that SPMP had entered
into definitive agreements with Bank Nizwa with regard to the $40
million project finance debt for the project; and
-- On 16 September 2015 Tri-Star announced that SPMP had
achieved financial close and Tri-Star had fully funded its equity
funding commitment of $6.0 million. SPMP had now in place $70
million of funding ($15 million equity drawn-down on financial
close; $15 million of committed shareholder loans and $40 million
of committed non-recourse project debt).
Since financial close, SPMP has been working vigorously to put
in place the various contractual arrangements required in order to
commence construction of the project. WorleyParsons was appointed
lead EPCM contractor in February 2016. SPMP's immediate goal now is
commencement of ground-breaking in the first half of 2016 and then
to work towards full commissioning of the OAR by end 2017, with
commercial production in 2018. Support of, and active engagement
with, SPMP by Tri-Star by virtue of Tri-Star's 40% interest in SPMP
remains Tri-Star's number one priority.
Refractory Gold
Refractory gold is in the ground gold 'ore' trapped in sulphide
lattice structures that conventional processes are unable to
unlock. The clean roasting antimony technology developed by
Tri-Star and sold to SPMP in 2015 has opened the treatment again of
these world gold resources, estimated to be 30% - 50% of remaining
gold in the ground. The second phase of SPMP's proposed antimony
plant in Oman envisages a refractory gold roaster that solves this
problem efficiently and at low cost to provide potentially a very
valuable alternative processing route for the world's gold
resources trapped in this manner.
Canada
In 2013, the Company completed the acquisition of Portage
Minerals, a Canadian exploration company. As a consequence of the
transaction, Tri-Star now owns Portage's Bald Hill deposit, which
is one of the largest undeveloped antimony projects in Canada. As
outlined in the NI 43-101 technical report for the Bald Hill
property, drilling indicated a potential quantity and grade in the
725,000 to 1,000,000 tonne range grading 4.11% to 5.32% contained
antimony. The Bald Hill deposit presents a synergistic opportunity
for Tri-Star given the potential to develop the deposit and for
Bald Hill to become a potential future supplier of feedstock for
the Roaster Project.
In addition, Tri-Star has an interest in a gold deposit, Golden
Ridge, in which Tri-Star has a 60% interest. Golden Ridge has an
inferred mineral resources of 17,780,000 tonnes at 0.91 g/t gold
for 520,200 ounces of gold. The interest in Golden Ridge is viewed
as non-core by the Company.
In 2015, in response to worsening economic conditions for junior
miners in the region, the Company took the difficult but necessary
decision to downsize its operations in Canada, selling (in January
2016) a portion of historically held gold assets (the Golden Pike
discovery) and ceasing further exploration at Bald Hill, for the
time being. The consideration for the sale of Golden Pike, which
completed in January 2016, comprised 350,000 shares in Globex
Mining Enterprises Inc. and a potential future royalty payment
accruing to Tri-Star dependent on production.
As a consequence of prevailing market conditions, the Directors
have determined the need to take an impairment of the intangible
exploration asset that arose on the acquisition of Portage Minerals
Inc. in 2013. This has resulted in a write-down and realised loss
recorded through profit and loss of GBP4,023,000 in this year's
accounts.
Turkey
Tri-Star's Göynük Project is a historical artisanal mine in a
known antimony belt in the Murat Dagi mountains of western Turkey.
The mine is about 250 kilometres east of the port of Izmir on the
west coast and 50 kilometres north of Usak.
The property comprises a mined area of 25 hectares within an
exploration area of 783 hectares. A further exploration area of 685
hectares (Göynük East) was added in June 2011 contiguous to the
east of the original area bringing the total exploration area
holding to approximately 1,470 hectares. The Company announced the
grant of a licence extension to the original 783 hectare area in
January 2016.
Given prevailing poor market conditions, the Company is
reviewing its strategic options for the mine.
Funding
In August 2015, the Company completed a private placing of
GBP3.5 million, comprising GBP2.0 million of Convertible Notes with
Odey European Inc. and GBP1.5 million of new equity. Further detail
on the revised terms of the Convertible Notes, which includes those
previously issued in June 2013 and August 2014, is set out in the
notes to the accompanying financial statements.
During the year, the Company also raised $4.0 million from the
sale of its intellectual property to joint venture company, SPMP.
This sale, which assisted in raising the required funds to finance
Tri-Star's $6.0 million equity investment in SPMP resulted in a
gain in 2015 to profit and loss of GBP1,550,000. A further $2.0
million of consideration remains due to Tri-Star by SPMP contingent
on future events. As at 29 February 2016, the Company had GBP1.0
million in cash.
Costs
The Company pays close attention to its costs, looking to
minimise these wherever possible. One of the largest cash cost
items is employee and Board costs. The run-rate of Board costs has
reduced significantly over the year and now stands at less than
half the run-rate accruing in January 2015.
Dec 2015 Jan 2015 % Change
Board salaries: monthly
run rate GBP26,500 GBP54,000 -51.0%
Key Performance Indicators
Given the early stage of the Company's development and its
current scale of operations, the Board does not consider the use of
particular financial or operational KPIs.
Safety, Health and Environmental Policies
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Tri-Star is committed to meeting international best industrial
practice in each jurisdiction in which it operates with respect to
Human rights, Safety, Health and Environmental (SHE) policies.
Management, employees and contractors are governed by and required
to comply with Tri-Star's SHE policies as well as all applicable
international, national federal, provincial and municipal
legislations and regulations. It is the primary responsibility of
the supervisors and other senior field staff of Tri-Star and its
subsidiaries to oversee safe work practices and ensure that rules,
regulations, policies and procedures are being followed.
Principal risks and uncertainties
The Board continually reviews the risks facing the Group. The
Group is not yet revenue generating. The principal risks and
uncertainties facing the Group involve the ability to raise funding
in order to finance the continued development of the OAR, mining
activities and any other opportunities identified by the Board, as
well as the uncertainties relating to the amount and quality of
metals available in its mines, the obtaining of necessary operating
permits and licences, the costs of extraction and production and
the exposure to fluctuating commodity prices.
Financial risk management objectives and policies
The Group's principal financial instruments comprise of cash,
convertible notes and other financial liabilities. The main purpose
of these financial instruments is to raise financing for the
Group's operations. The Group has various other financial
instruments such as loans and also trade payables, which arise
directly from its operations.
It is, and has been throughout the year under review, the
Group's policy that no trading in financial instruments shall be
undertaken. The main risks arising from the Group's financial
instruments are liquidity risk, price risk and foreign exchange
risk. The Board reviews and agrees policies for managing each of
these risks and they are summarised below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash reserves to fund the Group's operating activities. Management
monitors the forecasts of the Group's cash flows and cash balances
monthly and raises funds in discrete tranches to manage the
activities through to revenue generation.
Price risk
The Group is exposed to fluctuating commodity prices of antimony
and the existence and quality of the antimony product within the
licensed area. The Directors will continue to review the prices of
antimony when significant mining is undertaken and will consider
how this risk can be mitigated at that stage.
Foreign exchange risk
The Group operates in a number of jurisdictions and carries out
transactions in Sterling, Turkish Lira, Canadian dollars and US
dollars. The Group puts in place hedging arrangements only when
receipts and/or payments in a foreign currency are due and known
with a high degree of certainty. Otherwise, no currency hedging
takes place. Furthermore, it is the Group's policy not to engage in
use of currency derivatives, derivative trading or to take part in
currency speculation.
Future prospects
We expect the remainder of the year to be challenging given
worldwide strong economic headwinds for the mining sector as a
whole, but Tri-Star will remain focussed on its being also a period
of significant advancement for the Company as SPMP takes the OAR
forward into the construction phase.
Guy Eastaugh
Chief Executive Officer
Enquiries:
Tri-Star Resources plc Tel: +44 (0) 20 3470 0470
Guy Eastaugh, Chief Executive Officer
SP Angel Corporate Finance (Nomad and Broker) Tel: +44 (0) 20 3470 0470
Robert Wooldridge / Jeff Keating
Yellow Jersey PR Limited (Media Relations) Tel: +44 (0) 7738 076304
Dominic Barretto / Alistair de Kare-Silver
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Years to 31 December
Notes 2015 2014
GBP'000 GBP'000
Share based payments (337) (21)
Amortisation and impairment
of intangible assets (4,203) (6)
Exploration expenditure and
other administrative expenses (2,652) (2,255)
-------- --------
Total administrative expenses
and loss from operations (7,192) (2,282)
Profit on sale of intangible
asset 2 1,555 -
Share of loss in associated
companies (382) (221)
Finance income 3 3 944
Finance cost 3 (1,713) (838)
-------- --------
Loss before taxation (7,729) (2,397)
Taxation 4 601 -
Loss after taxation, and loss
attributable to the equity holders
of the Company (7,128) (2,397)
Loss after taxation attributable
to
Non-controlling interest 232 (62)
Equity holders of the parent (7,360) (2,335)
Other comprehensive (expenditure)/income
Items that will be reclassified
subsequently to profit and loss
Exchange loss on translating
foreign operations (502) (104)
-------- --------
Other comprehensive (expenditure)/income
for the period, net of tax (502) (104)
-------- --------
Total comprehensive loss for
the year, attributable to owners
of the company (7,630) (2,501)
======== ========
Total comprehensive loss attributable
to
Non-controlling interest 232 (62)
Equity holders of the parent (7,862) (2,439)
Loss per share
Basic and diluted loss per share
(pence) 5 (0.09) (0.03)
======== ========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December
2015 2014
ASSETS Notes GBP'000 GBP'000
Non-current
Intangible assets 6 - 4,777
Investment in associates 2,252 45
Property, plant and equipment 62 68
2,314 4,890
---------------------- ----------------------
Current
Cash and cash equivalents 1,308 1,496
Trade and other receivables 148 117
Total current assets 1,456 1,613
Total assets 3,770 6,503
---------------------- ----------------------
LIABILITIES
Current
Trade and other payables 373 324
Financial liability 7 1,100 626
Total current liabilities 1,473 950
Loans repayable after one year
Loans 7 8,318 5,073
Deferred tax liability 176 796
Total liabilities 9,967 6,819
---------------------- ----------------------
EQUITY
Issued share capital 2,601 2,525
Share premium 14,515 13,179
Share based payment reserve 1,074 767
Other reserves (6,914) (6,412)
Retained earnings (17,470) (10,140)
(6,194) (81)
Non-controlling interest (3) (235)
Total equity (6,197) (316)
Total equity and liabilities 3,770 6,503
====================== ======================
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Share Trans-lation Retained Total Non-control-ling Total
capital premium reserves based reserve earnings attributable interest equity
payment to owners
reserves of parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 January
2014 2,520 13,162 (6,156) 1,072 (152) (8,131) 2,315 (173) 2,142
Share based
payments - - - 21 - - 21 - 21
Issue of
share capital 5 17 - - - - 22 - 22
Transfer
on exercise
of warrants - - - (326) - 326 - - -
-------- ---------- ---------- ---------- ------------- ---------- -------------- ----------------- --------
Transactions
with owners 5 17 - - 305 - 326 43 - 43
-------- ---------- ---------- ---------- ------------- ---------- -------------- ----------------- --------
Exchange
difference
on translating
foreign
operations - - - - (104) - (104) - (104)
Loss for
the year - - - - - (2,335) (2,335) (62) (2,397)
------------- -----------------
Total
comprehensive
loss for
the period - - - - (104) (2,335) (2,439) (62) (2,501)
-------- ---------- ---------- ---------- ------------- ---------- -------------- ----------------- --------
Balance at
31 December
2014 2,525 13,179 (6,156) 767 (256) (10,140) (81) (235) (316)
======== ========== ========== ========== ============= ========== ============== ================= ========
Share based
payments - - - 337 - - 337 - 337
Issue of
share capital 76 1,449 - - - - 1,525 - 1,525
Transfer
on lapse
of warrants - - - (30) - 30 - - -
Share placing
costs - (113) - - - - (113) - (113)
Transactions
with owners 76 1,336 - 307 - 30 1,749 - 1,749
-------- ---------- ---------- ---------- ------------- ---------- -------------- ----------------- --------
Exchange
difference
on translating
foreign
operations - - - - (502) - (502) - (502)
Loss for
the period - - - - - (7,360) (7,360) 232 (7,128)
Total
comprehensive
loss for
the period - - - - (502) (7,360) (7,862) 232 (7,630)
-------- ---------- ---------- ---------- ------------- ---------- -------------- ----------------- --------
Balance at
31 December
2015 2,601 14,515 (6,156) 1,074 (758) (17,470) (6,194) (3) (6,197)
======== ========== ========== ========== ============= ========== ============== ================= ========
CONSOLIDATED STATEMENT OF CASH FLOWS
Years to 31 December
Note 2015 2014
GBP'000 GBP'000
Cash flow from operating activities
Continuing operations
Loss after taxation (7,128) (2,397)
Amortisation and impairment of
intangibles 6 4,203 6
Depreciation 20 24
Finance income (3) (4)
Finance cost 1,503 838
Loss from associates 382 221
Fees paid by shares 25 17
Share based payments 337 21
Movement on fair value of derivatives 210 (940)
(Increase)/decrease in trade and
other receivables (30) (32)
(Decrease)/increase in trade and
other payables (483) (96)
Net cash (outflow)/inflow from
operating activities (964) (2,342)
-------- --------
Cash flows from investing activities
Finance income 3 4
Cash invested in associates (2,589) (266)
Purchase of property, plant and
equipment (15) (10)
Proceeds of sale of property,
plant and equipment - 11
Net cash outflow from investing
activities (2,601) (261)
-------- --------
Cash flows from financing activities
Proceeds from issue of share capital 1,500 5
Share issue costs (113) -
Finance costs - -
New loans 7 2,000 2,000
Net cash inflow from financing
activities 3,387 2,005
-------- --------
Net change in cash and cash equivalents (178) (598)
Cash and cash equivalents at beginning
of period 1,496 2,101
Exchange differences on cash and
cash equivalents (10) (7)
Cash and cash equivalents at end
of period 1,308 1,496
======== ========
Basis of Preparation
The financial statements for Tri-Star and its subsidiaries (the
"Group") have been prepared under the historical cost convention
except for the derivative financial instrument which is at fair
value and in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRS). The Company's
ordinary shares are quoted on AIM, a market operated by the London
Stock Exchange. The Company applies the Companies Act 2006 when
preparing its annual financial statements.
The Group financial statements have been prepared under IFRS and
the principal accounting policies adopted remain unchanged from
those adopted by the Group in preparing its financial statements
for the prior year.
GOING CONCERN
The Group has not earned revenue during 2015 and it is still in
the development phase of its business. Therefore, the operations of
the Group are currently being financed from funds which the Company
has raised from private and public placings of its shares,
convertible bonds and other sources.
The Directors have prepared cash flow forecasts for the period
ending 30 June 2017. The forecasts identify unavoidable third party
running costs of the Group and demonstrate that the Group will have
sufficient cash resources available to allow it to continue in
business for a period of at least twelve months from the date of
approval of these financial statements. Accordingly, the accounts
have been prepared on a going concern basis.
BASIS OF CONSOLIDATION
The Group financial statements consolidate those of the Company
and all of its subsidiary undertakings drawn up to the statement of
financial position date. Subsidiaries are entities which are
controlled by the Group. Control is achieved when the Group has
power over the investee, has the right to variable returns from the
investee and has the power to affects its returns. The Group
obtains and exercises control through voting rights and control is
reassessed if there are indications that the status of any of the
three elements have changed.
Unrealised gains on transactions between the Company and its
subsidiaries are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the
asset transferred. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
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The Group's investment in associated undertakings is accounted
for using the equity method. The consolidated income statement
includes the Group's share of the associated profits and losses
while the Group's share of net assets of associates is shown in the
consolidated statement of financial position.
NOTES TO THE FINANCIAL STATEMENTS
1 SEGMENTAL REPORTING
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group's chief operating decision maker to make decisions
about the allocation of resources and an assessment of performance
and about which discrete financial information is available.
The Board considers that the Company comprises only one
operating segment, that of mining and development.
In respect of the non-current assets, GBP41,000 (2014:
GBP53,000) arise in the UK, and GBP2,273,000 (2014: GBP4,837,000)
arise in the rest of the world.
2 PROFIT on SALE of INTANGIBLE asset
On 16 September 2015, when the Company's associate SPMP achieved
financial close, the IP for the OAR was sold to SPMP for US$4
million. A further US$2 million will become due to Tri-Star on
successful completion of a pilot plant. This further US$2 million
has not been recognised in the accounts. The Group has recognised
profits of US$2.4 million (GBP GBP1,555,000) being 60% of the
proceeds received as the Group has a 40% interest in SPMP. The
costs of developing the IP had previously been recognised in the
profit and loss of the Group.
3 finance income and costs
2015 2014
GBP'000 GBP'000
Finance costs
Interest payable on historic loans (6) -
Movement in derivative 210 -
Interest payable on convertible loan 1,509 838
1,713 838
============== ==============
2015 2014
GBP'000 GBP'000
Finance income
Bank interest 3 4
Interest payable on convertible loan - 940
3 944
======== ========
Further details regarding the movement in fair value of
derivatives and interest payable on the convertible loan are set
out in note 7.
4 Taxation
Unrelieved tax losses of approximately GBP14.92 million (2014:
GBP8.27 million) remain available to offset against future taxable
trading profits. The unprovided deferred tax asset at 31 December
2015 is GBP3,269,000 (2014: GBP1,923,000) which has not been
provided on the grounds that it is uncertain when taxable profits
will be generated by the Group to utilise those losses.
The tax charge for the year comprises:
2015 2014
GBP'000 GBP'000
Research and development taxation relief 76 -
Deferred taxation in respect of transition
to IFRS (176)
Deferred taxation in respect on intangible
asset 701 -
601 -
-------- --------
The tax assessed for the period differs from the standard rate
of corporation tax in the UK as follows:
2015 2014
GBP'000 GBP'000
Loss before taxation (7,729) (2,397)
----------------------- --------
Loss multiplied by standard rate (1,662) (515)
of corporation tax in the UK of 20.25%
(2014: 21.5%)
Effect of:
Expenses not deductible for tax purposes (2) -
Overseas profit/(loss) not recognised 293 (169)
R&D tax rebate 76 -
Impairment of goodwill 140 -
Interest disallowed 409 -
Unrelieved tax losses 1,346 684
Total tax charge for year 601 -
======================= ========
5 LOSS PER SHARE
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of ordinary shares in issue during the period.
2015 2014
GBP'000 GBP'000
Loss attributable to owners of the
Company after tax (7,128) (2,397)
--------------- ---------------
2015 2014
Number Number
Weighted average number of ordinary
shares for calculating basic loss
per share 7,554,686,570 6,876,723,387
--------------- ---------------
2015 2014
Pence Pence
Basic and diluted loss per share (0.09) (0.03)
--------------- ---------------
Dilutive earnings per share is the same as basic loss per share
in each year because the potential shares arising under the share
option scheme and share warrants are anti-dilutive. The weighted
average number of ordinary shares excludes deferred shares which
have no voting rights and no entitlement to a dividend.
6 INtangible assets
Other Intangible Mining Goodwill Total
Exploration & Mineral
Asset Licences
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2014 4,076 102 815 4,993
Exchange Difference (95) - (19) (114)
------------------ -------------- -------------- ------------------
At 31 December 2014 3,981 102 796 4,879
Exchange Difference (479) - (95) (574)
At 31 December 2015 3,502 102 701 4,305
------------------ -------------- -------------- ------------------
Amortisation and impairment
At 1 January 2014 - 96 - 96
Amortisation charge in
the year - 6 - 6
At 31 December 2014 - 102 - 102
Impairment charge in
the year 3,502 - 701 4,203
------------------
At 31 December 2015 3,502 102 701 4,305
------------------ -------------- -------------- ------------------
Net book value
At 31 December 2015 - - - -
------------------ -------------- -------------- ------------------
At 31 December 2014 3,981 - 796 4,777
------------------ -------------- -------------- ------------------
At 1 January 2014 4,076 6 815 4,897
------------------ -------------- -------------- ------------------
The exploration asset relates to the acquisition of Portage
Minerals Inc. in 2013. The exploration asset is required to be
reviewed for impairment only if there are any indications that the
carrying amount exceeds the recoverable amount. Following an
impairment review, the Directors have concluded that the asset
should be fully impaired at 31 December 2015.
Goodwill on acquisition relates to goodwill arising on the
acquisition of Portage Minerals Inc. Goodwill is not amortised but
is reviewed for impairment on an annual basis or more frequently if
there are any indications that goodwill may be impaired. The
Directors consider that the goodwill should be fully impaired as at
31 December 2015 in light of the decision to fully impair the
related exploration asset.
Mining and mineral licences are amortised on a straight line
basis over the life of the licences.
7 CONVERTIBLE SECURED LOAN NOTES
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