TIDMURA
RNS Number : 7727Z
Uranium Resources PLC
19 December 2017
Uranium Resources plc
("Uranium Resources" or the "Company")
Final Results
The Company is pleased to announce its audited final results for
the year ended 30 June 2017.
MANAGING DIRECTOR'S STATEMENT
On 4 December 2017, the Company announced that it had agreed
conditionally to dispose of the Mtonya Project ("Mtonya") to its
majority shareholder Estes Limited (the "Disposal") and to the
subsequent reorganisation and recapitalisation of the Company which
will become an AIM Rule 15 cash shell. As part of the Proposals,
the Company is raising GBP900,000 in new equity (the "Placing") and
a number of key board changes are taking place.
The Disposal and the Placing are included in a set of proposals
(the "Proposals") that are set out in a circular ("Circular") which
has been sent to shareholders. The Circular also sets out why the
Existing Directors recommend that Shareholders vote in favour of
the Resolutions to be proposed at the General Meeting which is to
be held at the offices of Shakespeare Martineau LLP, 6th Floor, 60
Gracechurch Street, London EC3V OHR, at 12.00 p.m. on 20 December
2017.
Disposal
Subject to shareholder approval, the Company will dispose of
Mtonya to Estes Limited ("Estes"), in partial settlement of the
outstanding loans from Estes to the Company (approximately $2.07
million as at the date of signing these financial statements). The
partial settlement is in the amount of US$1.2 million, a valuation
which is 25 per cent higher than the top of the fair market range
provided by independent consultants for Mtonya. In addition, it is
proposed that Estes will capitalise the remaining debt owed to it
by the Company of US$870,000 at a price of 0.5p per share.
The Disposal constitutes a fundamental change of business in
accordance with the AIM Rules and is therefore subject to
shareholder approval. Alex Gostevskikh, Andrew Lewis and James
Pratt (the "Independent Directors") are supportive of the Disposal
on the basis that Estes has informed the Company that it is no
longer willing to provide financial support to it and the Disposal
provides a return to the Company significantly higher than the
third party valuation of the Mtonya Project. The Independent
Directors also believe that significant funds would be required to
undertake a meaningful drilling programme at Mtonya and that such
early stage exploration projects are difficult to fund, especially
as the market for uranium remains depressed. The Independent
Directors intend to vote in favour of the resolutions as a
whole.
Share Capital Reorganisation and Placing
The Company is proposing to undertake a Share Capital
Reorganisation which will result in 59,788,833 New Ordinary Shares
being in issue following the Disposal and capitalisation of the
Estes loan balance. Following the Share Capital Reorganisation
7,777,778 New Ordinary will be issued to pursuant to the Director
Capitalisations resulting in 67,566 611 New Ordinary Shares being
in issue immediately prior to the Placing.
Within the proposal, pending shareholder approval, the Company
has conditionally raised GBP900,000 at 0.45p, via the placing of
200,000,000 New Ordinary Shares through Peterhouse Corporate
Finance Limited, together with a 1 for 2 attaching warrant (the
"Placing Warrants"). The Placing Warrants are exercisable at 0.9p
per New Ordinary Share, three months from the date of grant and for
a period of 12 months from the date of grant or until the Company
completes a transaction which constitutes a reverse takeover in
accordance with AIM Rule 14 (the "Final Exercise Date") whichever
is earlier.
Subject to Shareholder approval, admission of the New Ordinary
Shares to trading on AIM is expected on or around 21 December 2017
and the Company's name will change to URA Holdings plc (the TIDM
will remain URA). Under the Proposals the Enlarged Share Capital
will comprise 267,566,611 New Ordinary Shares of 0.15p each.
In order to provide existing shareholders with some ability to
subscribe should they so choose on the same terms as the Placing
Warrants, the Board proposes, subject to regulatory prohibitions
relating to marketing securities in certain jurisdictions, to issue
new warrants to existing shareholders on the record date on a pro
rata basis of one Bonus Warrant for every two New Ordinary Shares
held (the "Bonus Warrant Issue") at an exercise price of 0.9p per
share.
Board Changes
Conditional on the passing of the Resolutions, it is proposed
that the Existing Directors, with the exception of Alex
Gostevskikh, step down from the Board and that Peter Redmond and
Melissa Sturgess are appointed directors (the "Proposed
Directors"). Peter and Melissa have many years of experience as
directors of AIM companies and intend that the new strategy of the
Company will be to acquire a substantial business that is seeking
an AIM quoted platform. Peter has been involved in the
restructuring of a number of AIM quoted companies and Melissa most
recently spearheaded the recapitalisation of Messaging
International plc and subsequent creation of SigmaRoc plc.
Background to the Proposals
The Company was incorporated on 11 January 2005 and its shares
were admitted to trading on AIM on 18 February 2005. The Company's
strategy was to make investments in the mining and minerals sectors
and specifically in the uranium sector.
On 3 April 2012, Uranium Resources announced it had raised
GBP3.93 million (gross) through a Placing of 163,750,000 new
ordinary shares of 0.1 pence each in the Company at a price of 2.4
pence per ordinary share. The funds raised were used to support the
development of the Mtonya Project located 100 kilometres east of
Songea in southern Tanzania. As a consequence of the placing, the
Company's major shareholder, Estes, increased its holding in the
Company to 56 per cent of the issued share capital. At this time
the Company was not subject to the UK Takeover Code.
On 26 March 2013 the Company entered into a US$1 million loan
agreement with Estes to fund working capital requirements pending
the publication of its maiden mineral resource estimate at
Mtonya.
On 3 May 2013 the Company announced that it had completed a
maiden CIM-compliant Mineral Resource estimate for Mtonya. The
Mineral Resource Estimate was prepared by Roscoe Postle Associates
Inc. of Toronto, Ontario. The CIM Inferred Resource estimate was
3.6 million tonnes at 255 ppm U3O8 containing 2.0 Mlb U3O8. The
resource estimate was based on 159 diamond drillholes (38,591m)
completed by the Company in 2010 to 2012. Only assays of drill core
samples were used in the resource estimate. The Directors expect
that the resource will be amenable ISR, the most-cost effective and
environmentally-acceptable method of uranium extraction.
The market for uranium has been depressed since the Fukushima
disaster in Japan in 2011 following which many countries reassessed
or cancelled their nuclear power programmes. The market has
remained subdued and the Directors do not believe the price of
uranium will return to higher levels in the near term.
Notwithstanding this, the Directors believed the potential
low-cost extraction of uranium at Mtonya via ISR would mean that
the project could be developed economically should the market for
U3O8 improve. However, given the state of the uranium market, no
further drilling activity was undertaken at Mtonya and
the Company focused on evaluating the existing exploration work
and also began discussions with a potential strategic partner with
a uranium exploration project in Tanzania. In order to fund the
Company's ongoing working capital requirements, and avoid dilution
for Shareholders, the Company entered into a series of loans with
Estes which continued to support the Company financially.
On 5 July 2017, the Company announced that Estes, which
currently holds 55.1 per cent of the issued share capital, remained
supportive of the Company and would fund ongoing working capital
requirements while the Company reviewed alternative financial
arrangements.
The Directors believe that the Mtonya licence requires
significant additional funds to undertake further exploration
drilling to increase the size of the resource and consider that
such a drilling programme cannot be justified given the current
depressed uranium market. In addition, the Directors do not believe
that such a significant equity fundraise would be achievable
without offering a large discount to the current share price. Estes
has also informed the Board that it is unwilling to continue
lending the Company funds for working capital purposes. However it
has indicated that it would be willing to acquire Mtonya in partial
settlement of the debt owed to Estes by the Company. The partial
settlement will be in the amount of US$1.2 million. In addition,
Estes is also willing to capitalise the remaining debt owed to it
by the Company of US$870,000 at a price of 0.5p per Share.
The Board is therefore faced with a situation where it could
propose to seek cancellation of the Company's admission to AIM, but
then there would effectively be no market in the Existing Ordinary
Shares, and without financial support from Estes, the Directors
would have to consider placing the Company into administration or,
and as proposed in this Circular, the Board could dispose of
Mtonya, introduce new funds, appoint new directors, and look to
adopt a new strategy.
Having considered these alternatives at length with a number of
its advisers, the Board has concluded that the best available
option is to dispose of Mtonya to Estes, recapitalise the Company
and introduce new directors.
Financial Results
Uranium Resources is not producing revenue and as such the
Company is reporting a loss of US$1,598,000 for the year ended 30
June 2017 mainly due to the impairment of the Exploration and
evaluation assets (2016: loss US$15,447,000).
Funding and going concern
In March 2013, March 2014, February 2015 (with Supplementary
agreement dated April 19, 2016), January 2017 (with Supplementary
agreements dated July 7, 2017, November 1, 2017) the Company
entered into a US$1million, US$300,000, US$500,000 and US$210,000
loan facility agreements ('the Loans') respectively with its major
shareholder and strategic investor Estes Limited ('Estes'). The
Loans are unsecured and bear interest at LIBOR.
At 30 June 2017, the Company had drawn down US$1,872,212
(excluding interest) against these facilities.
Estes has informed the Board that it is unwilling to continue
lending the Company funds for working capital purposes. However it
has indicated that it would be willing to acquire Mtonya in partial
settlement of the debt owed to Estes by the Company. The partial
settlement will be the amount of US$1,200,000.
In June 2017, the Company commissioned a report from Micon to
estimate the current fair-market value of the Mtonya Project. The
independent appraiser determined the value of uranium resources
within the range US$240,000 to US$960,000.
Considering the depressed uranium market, no further drilling
activity has been undertaken in Mtonya since 2013, given the
uncertainty in actual uranium mineral resources being held in
Mtonya, the Board decided to
impair the exploration and evaluations assets to the highest of
the fair value and value in use, which is US$1,200,000.
As a result the impairment was recognised as of 30 June 2017 at
the total amount of US$1,584,000. In addition, Estes is also
willing to capitalise the remaining debt owed to it by the Company
at a price of 0.5p per Share.
Directors of the Company have agreed to write off a large
proportion of the fees owed to them such that the Company will owe
them GBP 35,000.
Outlook
Following completion of the disposal of Mtonya to Estes, the
Company will be regarded as an AIM Rule 15 cash shell. New
investors are going to invest GBP 900,000 (gross) in the Company
and the new directors will pursue a strategy focusing on an
acquisition that can create significant value for shareholders in
the form of capital growth and/or dividends.
Alex Gostevskikh
Managing Director
19 December 2017
For further information please visit www.uraniumresources.co.uk
or contact:
Alex Gostevskikh Uranium Resources Tel: +1 778 938-7631
plc
Matthew Johnson Northland Capital Tel: +44 (0)203
/ David Hignell Partners Ltd 861 6625
URANIUM RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2017
2017 2016
US$'000 US$'000
Notes
Administrative expenses 45 (218)
Impairment of exploration assets 9 (1,584) (14,901)
Group operating loss 3 (1,539) (15,119)
Interest payable 4 (14) (11)
Foreign exchange (losses)/gains 4 (45) (317)
---------- -----------
Loss before taxation (1,598) (15,447)
Taxation 5 - -
---------- -----------
Loss for the year (1,598) (15,447)
Other comprehensive income
Exchange differences on translating
foreign operations 41 220
---------- -----------
Total comprehensive loss attributable
to the equity holders of the
parent (1,557) (15,227)
========== ===========
Loss per share (cents)
Basic and Diluted 6 (0.21) (203.89)
The results shown above related entirely to continuing
operations and are attributable to equity shareholders of the
Company.
URANIUM RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
2017 2016
Notes US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 9 1,200 2,800
---------- ----------
Current assets
Receivables 11 8 -
Cash and cash equivalents 6 22
---------- ----------
14 22
---------- ----------
Total Assets 1,214 2,822
---------- ----------
Liabilities
Current liabilities
Borrowings 13 (1,912) (1,715)
Trade and other payables 12 (100) (348)
---------- ----------
(2,012) (2,063)
---------- ----------
Total Liabilities (2,012) (2,063)
---------- ----------
Net Assets (798) 759
========== ==========
Equity
Capital and reserves attributable
to equity holders
Share capital 14 1,225 1,225
Share premium 21,776 21,776
Foreign exchange reserve (65) (106)
Retained losses (23,734) (22,136)
Total Equity (798) 759
========== ==========
The financial statements were approved and authorised for issue
by the Board of Directors on 19 December 2017 and signed on its
behalf by:
Alex Gostevskikh
Managing Director
Company Registration Number: 05329401
URANIUM RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
2017 2016
Notes US$'000 US$'000
Assets
Non-current assets
Investments in subsidiaries 10 1,200 2,621
---------- ----------
Current assets
Receivables 11 - -
Cash and cash equivalents 4 14
---------- ----------
4 14
---------- ----------
Total Assets 1,204 2,635
---------- ----------
Liabilities
Current liabilities
Borrowings 13 (1,912) (1,715)
Trade and other payables 12 (62) (305)
---------- ----------
(1,974) (2,020)
---------- ----------
Total Liabilities (1,974) (2,020)
---------- ----------
Net Assets (770) 615
========== ==========
Equity
Capital and reserves attributable
to equity holders
Share capital 14 1,225 1,225
Share premium 21,776 21,776
Foreign exchange reserve (3,328) (2,934)
Retained losses (20,443) (19,452)
Total Equity (770) 615
========== ==========
The financial statements were approved and authorised for issue
by the Board of Directors on 19 December 2017 and signed on its
behalf by:
Alex Gostevskikh
Managing Director
Company Registration Number: 05329401
URANIUM RESOURCES PLC
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2017
Consolidated statement of changes in equity
Foreign
currency
Share Share translation Retained Total
capital premium reserve losses equity
US$'000 US$'000 US$'000 US$'000 US$'000
At 1 July 2015 1,225 21,776 (326) (6,689) 15,986
Total comprehensive
income/(loss) - - 220 (15,447) (15,227)
At 30 June 2016 1,225 21,776 (106) (22,136) 759
Total comprehensive
income/(loss) - - 41 (1,598) (1,557)
At 30 June 2017 1,225 21,776 (65) (23,734) (798)
=========== ========= ============= =========== ==========
Company statement of changes in equity
Foreign
currency
Share Share translation Retained Total
capital premium reserve losses equity
US$'000 US$'000 US$'000 US$'000 US$'000
At 1 July 2015 1,225 21,776 (334) (6,136) 16,531
Total comprehensive
income/(loss) - - (2,600) (13,316) (15,916)
At 30 June 2016 1,225 21,776 (2,934) (19,452) 615
Total comprehensive
income/(loss) - - (394) (991) (1,385)
At 30 June 2017 1,225 21,776 (3,328) (20,443) (770)
============= ============== ============= ============= =============
URANIUM RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2017
2017 2016
US$'000 US$'000
Cash flows from operating activities
Loss for the year (1,598) (15,447)
Impairment of exploration and
evaluation assets 1,584 14,901
Salary payable write-off (326) -
Interest expense 14 11
Foreign exchange loss 45 319
(Increase) / Decrease in receivables (8) 10
Increase in payables 89 5
-------- ---------
Net cash used in operating activities (200) (201)
-------- ---------
Investing activities
Funds used for exploration and evaluation - (150)
-------- ---------
Net cash used in investing activities - (87)
-------- ---------
Financing activities
Borrowings 183 288
Net cash inflow from financing 183 288
-------- ---------
Decrease in cash and cash equivalents (17) (13)
Foreign exchange movements on
cash 1 1
Cash and cash equivalents at beginning
of the year 22 21
-------- ---------
Cash and cash equivalents at the
end of the year 6 22
======== =========
URANIUM RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2017
2017 2016
US$'000 US$'000
Cash flows from
operating activities
(Loss) for the year (991) (13,316)
Impairment loss 1,443 14,901
Salary payable write-off (326) -
Interest expense 14 11
Foreign exchange (gain) (329) (1,787)
Decrease in receivables - 10
Increase in payables 97 20
Net cash used in operating activities (92) (161)
-------- ---------
Investing activities
Investments and loans granted to
subsidiaries (100) (118)
-------- ---------
Net cash used in
investing activities (100) (118)
-------- ---------
Financing activities
Borrowings 183 288
Net cash inflow
from financing 183 288
-------- ---------
Decrease in cash and cash equivalents (9) 9
Foreign exchange
retranslation (1) 1
Cash and cash equivalents at beginning
of the year 14 4
-------- ---------
Cash and cash equivalents at the
end of the year 4 14
======== =========
URANIUM RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2016
1. Background and accounting policies
The Company is registered in England and Wales, having been
incorporated on 11 January 2005 under the Companies Act with
registered number 05329401 as a public company limited by shares.
The Company's shares are traded on the AIM Market ("AIM") of The
London Stock Exchange plc.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been applied to all years presented, unless otherwise stated
below.
The Company's and Group's financial statements for the year
ended 30 June 2017 and for the comparative year ended 30 June 2016
have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union ("IFRS") and
IFRIC (International Financial Reporting Interpretations Committee)
interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
1.1 Basis of preparation
The Group financial statements are prepared on the going concern
basis, under the historical cost convention as modified for fair
value accounting, if applicable, and in accordance with IFRS,
including IFRS 6 'Exploration for and Evaluation of Mineral
Resources'. The Parent Company's financial statements have also
been prepared in accordance with IFRS and the Companies Act
2006.
The Group and Parent Company financial statements are presented
in US$ and have been rounded to the nearest US$'000.
The consolidated financial statements incorporate the accounts
of the Company and its subsidiaries and have been prepared by using
the principles of acquisition accounting ("the purchase method"),
which includes the results of the subsidiaries from their dates of
acquisition. Intra-group sales, profits and balances are eliminated
fully on consolidation.
1.2 Going concern
In March 2013, March 2014, February 2015 (with Supplementary
agreement dated April 19, 2016), January 2017 (with Supplementary
agreements dated July 7, 2017, November 1, 2017) the Company
entered into a US$1million, US$300,000, US$500,000 and US$ 210,000
loan facility agreements ('the Loans') respectively with its major
shareholder and strategic investor Estes Limited ('Estes'). The
Loans are unsecured and bear interest at LIBOR. At 30 June 2017,
the Company had drawn down US$1,872,212 (excluding interest)
against these facilities. Interest accrued as of the reporting date
is US$ 39,425.
Estes has informed the Board that it is unwilling to continue
lending the Company funds for working capital purposes. However it
has indicated that it would be willing to acquire Mtonya in partial
settlement of the debt owed to Estes by the Company. The partial
settlement will be the amount of US$1,200,000.
In June 2017, the Company commissioned a report from Micon to
estimate the current fair-market value of the Mtonya Project. The
independent appraiser determined the value of uranium resources
within the range US$240,000 to US$960,000.
The Board considered the depressed Uranium market, no further
drilling activity has been undertaken in Mtonya since 2013 and
uncertainty in the actual uranium mineral resources being held in
Mtonya decided to accept this proposal as it is 25 per cent higher
than the top of the fair market range provided in the report by an
independent appraiser in June 2017.
In addition, Estes is also willing to capitalise the remaining
debt owed to it by the Company at a price of 0.5p per Share.
Directors of the Company have agreed to write off the fees owed to
them such that the Company will owe them GBP 35,000.
All these transactions will be approved at the General Meeting
to be held on 20 December 2017 as the Company has received an
irrevocable undertaking from Estes in favour of the Resolutions in
respect of its shareholding of 417,354,167 Existing Ordinary Shares
representing 55.1 per cent of the existing ordinary share capital
of the Company. Following completion of the disposal of Mtonya to
Estes, the Company will be regarded as an AIM Rule 15 cash
shell.
New investors are going to invest GBP 900,000 (gross) in the
Company and the new directors will pursue a strategy focusing on an
acquisition that can create significant value for shareholders in
the form of capital growth and/or dividends.
Therefore the directors have continued to adopt the going
concern basis.
The financial statements do not include the adjustments that
would result if the Group was unable to continue in operation.
1.3 New IFRS standards and interpretations
The accounting policies adopted in the preparation of these
financial statements are consistent with those followed in the
preparation of the prior year's financial statements except for the
adoption of new standards and interpretations effective as of 1
July 2016. The Company has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
New and amended standards and interpretations
There were a number of new standards and interpretations,
effective from 1 July 2016 that the Company applied for the first
time in the current year.
The nature and the impact of each new standard and amendment
that may have an impact on the Company now or in the future, is
described below. A few other amendments apply for the first time in
2016; however, they do not impact the annual financial statements
of the Company.
Other than the changes described below, the accounting policies
adopted are consistent with those of the previous financial
year.
Following relevant revisions and amendments
to existing standards were issued by the IASB,
which are effective for the accounting period
beginning on or after January 1, 2017 and have
been adopted by the Company:
Standard number Effective
Title date
--------------- --------------------------- -----------
IFRS 12 Annual improvements to January 1,
IFRS: the 2014-2016 cycle 2017
- Amendments
IFRS 12 Recognition of deferred January 1,
tax assets for unrealized 2017
losses - Amendments
----------------------------------------------------------
The revisions and amendments have been applied
in accordance with the transitional provisions
and do not have a material impact on the Company's
individual financial statements.
Standards issued but not yet effective
Standards issued but not yet effective up to the date of
issuance of the Company's financial statements are described below.
This description is of standards and interpretations issued, which
the Company reasonably expects to be applicable at a future date.
The Company intends to adopt those standards when they become
effective. The Company expects that adoption of these standards,
amendments and interpretations in most cases not to have any
significant impact on the Company's financial position or
performance in the period of initial application. In cases where it
will have an impact, the Company is still assessing the possible
impact.
IFRS 9 "Financial Instruments" (2014)
The IASB released IFRS 9 "Financial Instruments" (2014),
representing the completion of its project to replace IAS 39
"Financial Instruments: Recognition and Measurement". The new
standard introduces extensive changes to IAS 39's guidance on the
classification and measurement of financial assets and introduces a
new "expected credit loss" model for the impairment of financial
assets. IFRS 9 also provides new guidance on the application of
hedge accounting.
The new standard is required to be applied for annual reporting
periods beginning on or after 1 January 2018.
IFRS 15 "Revenue from Contracts with Customers"
IFRS 15 presents new requirements for the recognition of
revenue, replacing IAS 18 "Revenue", IAS 11 "Construction
contracts", and several revenue-related Interpretations. The new
standard establishes a control-based revenue recognition model and
provides additional guidance in many areas not covered in detail
under existing IFRSs, including how to account for arrangements
with multiple performance obligations, variable pricing, customer
refund rights, supplier repurchase options, and other common
complexities.
IFRS 15 is effective for reporting periods beginning on or after
1 January 2018.
IFRS 16 "Leases"
IFRS 16 "Leases" brings most leases on-balance sheet for lessees
under a single model, eliminating the distinction between operating
and finance leases. Lessor accounting however remains largely
unchanged and the distinction between operating and finance leases
is retained. IFRS 16 supersedes IAS 17 "Leases" and related
interpretations and is effective for periods beginning on or after
1 January 2019, with earlier adoption permitted if IFRS 15 "Revenue
from Contracts with Customers" has also been applied.
1.4 Exploration and evaluation expenditure
Once a licence has been obtained, all costs associated with
exploration and evaluation are capitalised on a project-by-project
basis, where a project may be a collection of geographically and
geologically similar licences. The costs are carried forward on a
project-by-project basis until it has been established that
commercial reserves do not exist or are insufficiently supported by
the potential carrying value of the project. Costs incurred include
appropriate technical and administrative expenses but not general
overheads.
Where possible, general Tanzanian costs attributable to projects
are allocated to each project. However, where this is impractical,
these general costs are held in a separate cost pool and are
carried forward in one general pool of assets until it has been
established that commercial reserves do not exist or are
insufficiently supported by the potential carrying value of all
Tanzanian projects.
When production commences, the accumulated costs for the
relevant area of interest are transferred from
intangible assets to tangible assets as "Developed Uranium
Assets" and amortised over the estimated life of the commercial
reserves on a unit of production basis, as discussed in note 1.7
below.
1.5 Impairment of exploration and evaluation expenditure
The carrying value of unevaluated areas is assessed on at least
an annual basis or when there has been an indication that
impairment in value may have occurred. The impairment of
unevaluated prospects is assessed as based on the Directors'
intention with regard to future exploration and development of
individual significant areas and the ability to obtain funds to
finance such exploration and development.
An impairment loss is reversed if, and only if, there has been a
change in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognized. A reversal of
an impairment loss for an assets is recognized in profit or loss,
unless the asset is carried at revalued amount, in which case, such
reversal is treated as revaluation reserve. However, to the extent
that an impairment loss on the same
revalued asset was previously recognized in profit or loss, a
reversal of impairment is also recognized in profit or loss.
1.6 Impairment of developed uranium assets
When events or changes in circumstances indicate that the
carrying amount of developed uranium assets included within
tangible assets may not be recoverable from future net revenues
from uranium reserves attributable to that asset, a comparison
between the net book value of the asset and the discounted future
cash flows from the estimated recoverable uranium reserves is
undertaken. To the extent that the carrying amount exceeds the
recoverable amount, the asset is written down to its recoverable
amount, with the write off charged to the statement of
comprehensive income.
1.7 Amortisation of developed uranium assets
Developed uranium assets are amortised on a unit of production
basis using the ratio of uranium production in the period to the
estimated quantity of commercial reserves at the end of the period
plus production in the period. Changes in estimates of commercial
reserves or future development costs are dealt with
prospectively.
1.8 Decommissioning costs
Where a material liability for the removal of production
facilities and site restoration at the end of the field life
exists, a provision for decommissioning is recognised. The amount
recognised is the present value of estimated future expenditure
determined in accordance with local conditions and requirements. An
asset of an amount equivalent to the provision is also created and
depreciated on a unit of production basis. Changes in estimates are
recognised prospectively, with corresponding adjustments to the
provision and the associated asset.
1.9 Cash and cash equivalents
Cash and cash equivalents are carried in the statement of
financial position at cost and comprise cash in hand, cash at bank,
deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less. Bank
overdrafts are included within borrowings in current liabilities on
the statement of financial position. For the purposes of the
statement of cashflows, cash and cash equivalents
also includes any the bank overdrafts.
1.10 Investments in subsidiaries
Investments in subsidiary companies are stated at cost less
provision for impairment in the Company's statement of financial
position.
1.11 Foreign currencies
(i) Functional and presentational currency
Items included in the Group's and Parent Company's financial
statements are measured using the currency of the primary economic
environment in which the Group operates ("the functional
currency"). The Directors consider the Pound Sterling to be the
Parent Company's functional currency. The Group and Company
financial statements are presented in US$.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of
comprehensive income. The year-end rate applied was GBP1: US$1.299
(2016: GBP1: US$1.33898)
Transactions in the accounts of individual Group companies are
recorded at the rate of exchange ruling on the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the statement of
financial position date. All differences are taken to the statement
of comprehensive income.
1.12 Deferred taxation
Deferred income taxes are provided in full, using the liability
method, for all temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
financial statements. Deferred income taxes are determined using
tax rates that have been enacted or substantially enacted and are
expected to apply when the related deferred income tax asset is
realised or the related deferred income tax liability is settled.
The principal temporary differences arise from depreciation or
amortisation charged on assets and tax losses carried forward.
Deferred tax assets relating to the carry forward of unused tax
losses are recognised to the extent that it is probable that future
taxable profit will be available against which the unused tax
losses can be utilised.
1.13 Receivables
Receivables are carried at original invoice amount less
provision made for impairment of these receivables. A provision for
impairment of receivables is established when there is objective
evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. The amount of
the provision is the difference between the assets' carrying amount
and the recoverable amount. Provisions
for impairment of receivables are included in the statement of
comprehensive income.
1.14 Payables
Payables are recognised initially at fair values and
subsequently measured at amortised cost using the effective
interest method.
1.15 Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the increase of new shares or options are
shown in equity as a deduction from the proceeds.
1.16 Critical accounting judgements and estimates
The preparation of financial statements in conformity with
International Financial Reporting Standards requires the use of
accounting estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during
the reporting period. Although these estimates are based on
management's best knowledge of current events and actions, actual
results ultimately may differ from those estimates. IFRS also
require management to exercise its judgement in the process of
applying the Group's accounting policies. The prime areas involving
a higher degree of judgement or complexity, where assumptions and
estimates are significant to the financial statements, are as
follows:
Impairment of exploration and evaluation of assets
The Group determines whether exploration and evaluation assets
are impaired when facts and circumstances suggest that the carrying
amount may exceed its recoverable amount. Such indicators include
the point at which a determination is made as to whether or not
commercial reserves exist. The carrying amount of exploration and
evaluation assets at 30 June 2017 is included in note 9 to the
financial statements.
2. Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision--maker.
The chief operating decision--maker, who is responsible for
allocating resources and assessing performance of the operating
segment and that make strategic decisions, has been identified as
the Board of Directors.
The Group had no operating revenue during the period.
The Group operates in one segment, the exploration and
evaluation of uranium. The Parent Company operates a head office
based in the United Kingdom which incurred certain administration
and corporate costs. The Group's operations span two countries,
Tanzania and the United Kingdom.
Segment results Segment results
2017 2016
US$'000 US$'000
Uranium (Tanzania) (93) (25)
Administration and Corporate
(UK) 138 (193)
Uranium (Tanzania) Impairment (1,584) (14,901)
-------- ---------
Total operating loss
of all segments (1,539) (15,119)
-------- ---------
Finance expense (14) (11)
Foreign exchange (losses) (45) (317)
Loss before and after
tax (1,598) (15,447)
======== =========
The Group's depreciation, amortisation and capital expenditure
is incurred entirely within the Tanzanian segment.
Segment assets and liabilities Non-Current Non-Current
Assets Liabilities
2017 2016 2017 2016
US$'000 US$'000 US$'000 US$'000
Uranium (Tanzania) 1,200 2,800 - -
Administration and Corporate - - - -
(UK)
--------- --------- --------- ---------
Total of all segments 1,200 2,800 - -
========= ========= ========= =========
Total Assets Total Liabilities
Segment assets and liabilities 2017 2016 2017 2016
US$'000 US$'000 US$'000 US$'000
Uranium (Tanzania) 1,210 2,808 38 43
Administration and Corporate
(UK) 4 14 1,974 2,020
--------- --------- --------- ---------
Total of all segments 1,214 2,822 2,012 2,063
========= ========= ========= =========
3. Group operating loss
2017 2016
US$'000 US$'000
The Group's operating loss is
stated after charging / (crediting):
Accounting fees 23 18
Audit fees 18 17
Broker / Nomad fees 51 59
Directors' remuneration (excluding
share-based payments) 91 80
Salary 55 -
Listing costs 6 16
Travel and accommodation expenses 3 -
General expenses 34 28
Salary payable write-off (326) -
Impairment charge 1,584 14,901
======== =======
4. Interest
2017 2016
US$'000 US$'000
Foreign exchange (losses) (45) (317)
Loan interest payable (14) (11)
======== ========
5. Taxation
2017 2016
US$'000 US$'000
UK corporation tax - -
Overseas tax - -
Deferred tax - -
-------- ---------
Total tax charge - -
======== =========
The tax charge can be reconciled
to the loss for the year as follows:
Loss for the year (1,598) (15,447)
-------- ---------
Tax at the standard rate of UK
corporation tax of 19.75% (2016:
20%) (316) (3,205)
Effects of:
Disallowed expenses - -
Tax losses carried forward not
yet recognised as a deferred tax
asset 316 3,205
-------- ---------
Total tax charge - -
======== =========
At the year-end date, the Group has unused tax losses of
US$20,443,000 (2016: US $19,452,000) available for offset against
suitable future profits. A deferred tax asset has not been
recognised in respect of such losses due to the uncertainty of
future profit streams. The deferred tax asset at 17% (2016: 18%) is
estimated to be US$3,475,310 (2016: US$ 3,501,360).
6. Loss per share
The basic loss per ordinary share is 0.21 cents (2016: 203.89
cents) and has been calculated using the loss for the financial
year of US$ 1,598,000 (2016: loss US$ 15,447,000) and the weighted
average number of ordinary shares in issue of 757,632,495 (2016:
757,632,495).
The diluted loss per share has been kept the same as the basic
loss per share as the conversion of share options decreases the
basic loss per share, thus being anti-dilutive.
7. Holding company profit and loss account
In accordance with the provisions of the Section 408 of the
Companies Act 2006, the Parent Company has not presented a
statement of comprehensive income. A loss for the year ended 30
June 2017 of US$ 991,000 (2016: loss US$13,316,000) has been
included in the consolidated statement of comprehensive income.
8. Staff costs (including Directors)
2017 2016
US$'000 US$'000
Wages, salaries and fees 146 107
Social security costs (including - -
refunds)
146 107
-------- --------
Transferred to intangible assets - (27)
-------- --------
Salary payable write-off (326) -
======== ========
(180) 80
======== ========
Key management of the Group are considered to be the Directors
of the Company and their accrued remuneration was as follows:
2017 (US$'000s) 2016 (US$'000s)
--------------------- ------------------ ------
Fees/ Total Fees/ allowances/ Total
allowances/ salaries
salaries
Ross Warner - - - -
James Pratt - - - -
Alex Gostevskikh
(1) 91 91 80 80
Andrew Lewis - - - -
Total Key Management 91 91 80 80
============= ====== ================== ======
(1) During the period nil % (2016: 25% - US$26,704) of Alex
Gostevskikh's salary was capitalised to intangibles.
Directors have agreed to reduce their salary liabilities to GBP
35,000. The amount relating to the salary write off in the current
year amounts of US$ 326,052 (GBP 257,091) and is disclosed within
Administrative expenses.
9. Exploration and evaluation assets
Group Exploration
and evaluation
expenditure
Cost and net book value US$'000
At 1 July 2015 17,651
Additions 142
Foreign exchange (92) (14,901)
Impairment
At 30 June 2016 2,800
Foreign exchange (16)
Impairment (1,584)
---------------
At 30 June 2017 1,200
===============
The Group's intangible asset consists entirely of capitalised
exploration and evaluation expenditure. The exploration and
evaluation ("E&E") asset represents costs incurred in relation
to the Group's Tanzanian licences. These amounts have not been
written off to the statement of comprehensive income as exploration
expenses because commercial reserves have not yet been established
nor has the determination process been completed.
In June 2017, the Company commissioned a report from Micon to
estimate the current fair-market value of the Mtonya Project. The
independent appraiser determined the value of uranium resources
within the range US$240,000 to US$960,000.
The major shareholder of the Company, Estes Limited, proposed to
exchange URA's interest in the Mtonya Project, which is held
through several URA's Tanzanian subsidiaries for consideration of
US$ 1,200,000 of Estes debt (see Note 17 Events after the reporting
date).
The Board considered the depressed uranium market, no further
drilling activity has been undertaken in Mtonya since 2013 and
uncertainty in the actual uranium mineral resources being held in
Mtonya decided to impair the exploration and evaluation assets to
the highest of the fair value and value in use, which is US$
1,200,000.
As a result the impairment was recognised as of June 30, 2017 at
the total amount of US$1,584,000. (2016: GBP14,901,000)
10. Investments in subsidiary undertakings
Loans Investments
to subsidiary in subsidiary
undertakings undertakings Total
US$'000 US$'000 US$'000
Company
Cost
At 1 July 2015 14,338 3,846 18,184
Loans granted/Investments 118 27 145
Impairment (14,220) (681) (14,901)
Foreign exchange on
loans (236) (571) (807)
At 30 June 2016 - 2,621 2,621
=============== =============== =========
Loans granted/Investments 100 - 100
Impairment (100) (1,343) (1,443)
Foreign exchange - (78) (78)
At 30 June 2017 - 1,200 1,200
=============== =============== =========
The Company's subsidiary undertakings as at 30 June 2017 were as
follows:
Principal Percentage of ordinary
Subsidiary undertakings activities share capital held
Direct
Deep Yellow Tanzania
Limited Uranium exploration 100%
URA (St Henri) Limited Dormant 100%
WML Uranium Holdings
Limited Holding company 100%
Indirect
Western Metals Tanzania
Limited Uranium exploration 100%
Western Metals Exploration
Limited Dormant 100%
Western Metals Uranium
Limited Dormant 100%
In June 2017, the Company commissioned a report from Micon to
estimate the current fair-market value of the Mtonya Project. The
independent appraiser determined the value of uranium resources
within the range US$240,000 to US$960,000.
The major shareholder of the Company, Estes Limited, proposed to
exchange URA's interest in the Mtonya Project, which is held
through several URA's Tanzanian subsidiaries for consideration of
US$ 1,200,000 of Estes debt.
As of June 30, 2017 the impairment at the total amount of
US$1,443,000 was recognised in the Company
individual financial statements, reducing the value of the
Investments to the highest of the fair value and value in use.
11. Receivables
2017 2016
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Other receivables 8 - - -
======== ======== ======== ========
12. Trade and other 2017 2016
payables
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Trade payables 42 42 287 287
Accruals and other
payables 58 20 61 18
-------- -------- -------- --------
100 62 348 305
======== ======== ======== ========
13. Borrowings -current
2017 2016
Group Company Group Company
US$'000 US$'000 US$'000 US$'000
Borrowings in period 1,912 1,912 1,715 1,715
Borrowings carried
forward 1,912 1,912 1,715 1,715
======== ======== ======== ========
On 15 March 2013, the Company entered into a US$1 million loan
facility agreement with its major shareholder and strategic
investor Estes Limited. The Loan facility, which is unsecured, has
been fully utilised. The Loan bears interest at LIBOR.
On 18 March 2014, the Company entered into a US$300,000 loan
facility agreement with its major shareholder and strategic
investor Estes Limited. The Loan facility is unsecured. As of 30
June 2016 the Company had drawn down $290,000 against the available
facility. The Loan bears interest at LIBOR.
On 19 February 2015, the Company entered into a US$200,000 loan
facility agreement with its major shareholder and strategic
investor Estes Limited. Subsequently the total principle amount was
increased to US$500,000. The Loan facility is unsecured. As of 30
June 2017 the Company had drawn down US$497,687 against the
available facility. The Loan bears interest at LIBOR.
On January 16, 2017 the Company entered into a US$50,000 loan
facility agreement with its major shareholder and strategic
investor Estes Limited. Subsequently the total principle amount was
increased to US$210,000. The Loan facility is unsecured. As of 30
June 2017 the Company had drawn down US$144,525 against the
available facility. The Loan bears interest at LIBOR.
At 30 June 2017, the Company had drawn down US$1,872,212
(excluding interest) against these facilities. Interest accrued as
of the reporting date is US$ 39,425.
Please see note 17 for the status of the above loans discussed
as of the date of signing the Financial Statements.
Estes has proposed to acquire Mtonya in partial settlement of
the debt owed to it by the Company. The partial settlement will be
at the amount of US$1.2 million. In addition, Estes is also willing
to capitalise the remaining debt owed to it by the Company at a
price of 0.5p per Share. For more detailed information see Note
17.
14. Share capital
2016 2015
US$'000 US$'000
Allotted, called up and fully paid
share capital
757,632,495 (2016 - 745,493,750)
ordinary shares of 0.1p each 1,225 1,225
======== ========
During the year ended June 30, 2017 there were no changes in the
Share capital of the Company.
15. Decommissioning expenditure
The Directors have considered the need for any necessary
provision for the cost of rectifying any environmental damage, as
might be required under local legislation and the Group's licence
obligations. In their view, no provision is necessary at 30 June
2017 for any future costs of decommissioning or any environmental
damage.
16. Financial instruments
Interest rate risk
The Company's exposure to interest rate risk, which is the risk
that a financial instrument's value will fluctuate as a result of
changes in market interest rates on classes of financial assets and
financial liabilities, was as follows:
Floating Fixed Floating Fixed
interest interest interest interest
rate rate rate rate
30 June 30 June 30 June 30 June
2017 2017 2016 2016
Financial liabilities US$'000 US$'000 US$'000 US$'000
and assets:
Borrowings 1,912 - 1,715 -
Cash at bank 6 - 22 -
The effective weighted average interest rate was 0.77% (2016:
0.69%) on financial liabilities.
The net fair value of financial assets and financial liabilities
approximates to their carrying amount as disclosed in the statement
of financial position and in the related notes.
Financial risk management
The Directors recognise that this is an area in which they may
need to develop specific policies should the
Group become exposed to further financial risks as the business
develops.
Capital risk management
The Group considers capital to be its equity reserves. At the
current stage of the Group's life cycle, the Group's
objective in managing its capital is to ensure funds raised meet
the exploration expenditure commitments.
The Group ensures it is meeting its objectives by reviewing its
KPIs to ensure its exploration activities are progressing in line
with expectations, controlling costs and placing unused funds on
deposit to conserve resources and increase returns on surplus cash
held.
17. Events after the year end date
Estes has informed the Board that it is unwilling to continue
lending the Company funds for working capital purposes. However it
has indicated that it would be willing to acquire Mtonya in partial
settlement of the debt owed to Estes by the Company. The partial
settlement will be the amount of US$1.2 million. In addition, Estes
is also willing to capitalise the remaining debt owed to it by the
Company at a price of 0.5p per Share.
The Board considered the depressed Uranium market, no further
drilling activity has been undertaken in Mtonya since 2013 and
uncertainty in the actual uranium mineral resources being held in
Mtonya decided to accept this proposal as it is 25 per cent higher
than the top of the fair market range provided in the report by an
independent appraiser in June 2017 (see Note 9 Exploration and
evaluation assets).
Directors of the Company have agreed to write off the fees owed
to them such that the Company will owe them GBP 35,000.
All these transactions should be approved on the Shareholders
Meeting in December 2017.
18. Related party transactions
Key management of the Group are considered to be the Directors
of the Company. There are no transactions with the Directors other
than the above, and their remuneration and interests in shares and
share options. The remuneration of individual Directors is shown in
the Directors' Report.
Estes Limited, the Company's ultimate controlling party,
provided an additional loan facility during the period. As at 30
June 2017, the outstanding balance and the maximum outstanding
during the year was US$1,912,000 (2016: US$1,715,000). During the
year, interest of US$13,692 was charged. Further details of the
loan facility are included in note 13 and 14 to the financial
statements.
Estes has informed the Board that it is unwilling to continue
lending the Company funds for working capital purposes. However it
has indicated that it would be willing to acquire Mtonya in partial
settlement of the debt owed to Estes by the Company. The partial
settlement will be the amount of US$1.2 million. In addition, Estes
is also willing to capitalise the remaining debt owed to it by the
Company at a price of 0.5p per Share. For more detailed information
please see note 17 Events after the reporting date.
19. Ultimate controlling party
As at 30 June 2017, the Company's ultimate controlling party is
Estes Limited which owns 55.1% of the
Company's issued share capital. Details of transactions with
Estes are included in note 18.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TLBLTMBJBMLR
(END) Dow Jones Newswires
December 19, 2017 04:42 ET (09:42 GMT)
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