Announcements 2007
Preliminary Results for the period ended 31 December 2006
07 March 2007
Brinkley Mining announces its un-audited preliminary results for the period ended 31 December 2006.
Highlights
June 2006
• Raised approximately £18.6 million (net of costs) and admitted to trading on the AIM market.
July 2006
• Appointment of Arbuthnot Securities Limited as the Company's Broker.
September 2006
• Appointment of Zodwa Manase as a non executive director. Zodwa is a highly experienced South African business woman who serves on the boards of the South Africa Reserve Bank, several high profile South African businesses and is Chair of the Audit Committee of the Office of the President.
October 2006
• Prospecting Right granted over the Waterval area and part of Rietkuil area. The Waterval area has historical grades of 1,820 ppm U3O8.
• Brinkley Mining gains first right of refusal for the exploration and development of any uranium projects in the Democratic Republic of Congo ("DRC").
January 2007
• Appointment of Ralph Bagirathi as Chief Executive Southern Africa who is responsible for managing the Group's interests in South Africa and the DRC.
• Application submitted covering five prospective uranium areas in the DRC.
• Mandated to conduct radiation testing and certification of export materials to assist in security control of radioactive material in the DRC. A fee per unit certified will be received.
February 2007
• Prospecting Right over Waterval area and a portion of Rietkuil area are notarised and executed with South Africa's Department of Minerals and Energy (the "DME"). Exploration commences on these areas beginning with airborne geophysical survey.
March 2007
• Announces Net Loss of £2.7m which includes £2.4m loss relating to share-based payments and has cash at bank of £16.6m as at 31 December 2006.
Gerard Holden, Executive Chairman, said:
"The Group's strategy during this time has been to build a portfolio of uranium exploration projects with significant potential in Africa. We believe that we are on the right path to achieve this. The Company has now commenced the exploration of its South African assets, and is actively pursuing the grant of the remaining licenses in South Africa. In addition Brinkley Mining is ready to start exploration work in the DRC as soon as permits are granted and to develop the DRC radiation testing business to become a financial contributor at the earliest opportunity. The Directors are excited about the prospects for the Company in 2007 and thank our shareholders for their ongoing support."
CHAIRMAN'S STATEMENT
The past year has been an important phase in the growth and development of Brinkley Mining Plc. During the period our 49% owned associate company, Western Uranium (Pty) Limited ("Western Uranium") was granted prospecting rights, and commenced a detailed exploration programme on the Waterval project area in South Africa. In the DRC our 70% owned subsidiary, Brinkley Africa Limited ("Brinkley Africa"), entered into an agreement with the country's atomic energy authority, Le Commissariat General a l'Energie Atomique (the "CGEA"), to jointly develop uranium assets.
Exploration Summary
South Africa
Key progress was made at the Waterval Project in South Africa where prospecting rights were secured in February 2007. Since this time we have commenced a detailed exploration programme of the deposit. An extensive airborne geophysical programme has been completed and is currently being interpreted by specialists. Over 150 previously drilled holes have been located and logged and we are in the process of mobilising to clean those holes in preparation for a detailed down hole logging programme which is expected to commence by April 2007. Once this is complete a number of the previously drilled holes will be twinned and analysed for uranium and molybdenum. This information will be compiled with the results of the interpretation of the airborne geophysics work and a resource drilling campaign will be executed. We intend to continue this exploration programme with the goal of achieving an inferred resource in the third quarter of 2007.
In SRK's Competent Person's Report dated May 2006, prepared for the Company as part of the admission to trading on AIM, SRK estimated the mineralised potential of Waterval to be approximately 10.8 million pounds of U3O8 and 5.8 million pounds of molybdenum (basis 5% of the area of uraniferous sandstones mineralised) and approx 21.6 million pounds U3O8 and 11.5 million pounds molybdenum (basis 10% of the area of uraniferous sandstones mineralised). It should be noted that these numbers do not constitute or claim to be a mineral resource under any of the modern internationally accepted standards for reporting mineral resources.
The other three areas applied for by Western Uranium in South Africa are Flagfontein, Damsfontein/Blomfontein and Rietkuil. Each of these applications is in various stages of the prospecting right process. As previously announced in relation to the Flagfontein and Damsfontein/Blomfontein applications, the DME initially indicated to Western Uranium that it did not intend to grant the rights citing a lack of financial capacity of Western Uranium and an inappropriate work programme and budget. Western Uranium submitted a formal appeal in regards to the Flagfontein application and the Damsfontein/Blomfontein application on the basis, amongst others, that the Minister and the DME had only considered Western Uranium's financial resources and had not taken into account the significant cash balances held by Brinkley Mining, which Brinkley Mining intends to make funds available as required to Western Uranium to complete the exploration programmes. The Company is satisfied that Western Uranium has been able to demonstrate sufficient financial resources to the DME and in conjunction with our Historically Disadvantaged South African partners we are pursuing clarification from the DME of the status of these applications.
Democratic Republic of Congo
As part of our strategy to develop uranium assets in Africa, Brinkley Africa entered into an agreement with the CGEA to explore and exploit the uranium assets in the DRC.
Since October we have made good progress with the development of the DRC projects and, in conjunction with the CGEA, have identified five areas which are prospective for uranium in the Katanga province in the south east of the DRC. Two of these prospects have previously identified uranium resources.
Under the terms of the agreement, the CGEA has officially requested the Minister of Mines to issue Exploration Permits over the five areas. Brinkley Africa has work programmes in place and a technical team ready to commence implementation of an extensive exploration programme as soon as the Exploration Permits are granted. We look forward to developing these potentially substantial resources at the earliest opportunity.
As part of the above agreement with the CGEA, Brinkley Africa has entered into an addendum to the original Memorandum of Understanding which provides for the parties to incorporate a new company in the DRC. This new company is called Societe d'Inspection des Matieres Nucleaires et des Substances Radioactive ("SOCIMAR"). SOCIMAR is mandated by the CGEA to conduct radiation testing and certification of export materials with a view to implementing proper controls and to restrict the illicit export of radioactive material. SOCIMAR will receive a fee per unit certified.
Brinkley Africa will have board control of SOCIMAR and an approximate 40% economic interest. A project implementation plan has been agreed with the CGEA and the first personnel have been recruited. It is SOCIMAR's objective to have the required controls operational at a number of border crossings in the next four months.
Southern Sudan
The Company is progressing its applications for uranium prospecting rights in Southern Sudan and has been in discussion with the responsible Ministry to ensure these are granted at the earliest opportunity.
Other
The Company has entered into a cooperation agreement with the Regional Centre for Mapping of Resources for Development based in Nairobi, Kenya (the "RCMRD"). The RCMRD is a multi governmental agency tasked with assisting the development of natural resources for its member countries. Our agreement covers a broad geographical area where there are geological conditions favourable for the discovery of uranium deposits. A work programme is being finalised utilising the strengths of both party's resources and will be started in the near future.
Corporate
With the growth in the Group's exploration project portfolio over the past year and the further expansion now being planned, we have appointed Ralph Bagirathi as Chief Executive, Southern Africa. He has extensive experience in the resource sector covering the areas of mine management, project development and project finance.
Ralph has over 20 years experience performing roles ranging from Regional Mining consultant for Anglo Platinum Ltd; General Manager for Alexkor Ltd; managing mining resources for ABSA Bank and most recently as Executive Director for Decorum Capital Partners.
The Company has also recruited first class experienced personnel in the areas of country and project management in the DRC and project and geological management in South Africa.
During January 2007, I accepted an expanded executive role as Executive Chairman and look forward to working together with all parties to assist in the future development of the Company. As from 7 March 2007, Clayton Dodd has elected to step down as an executive director of the Company and will assume a role as non executive director with immediate effect.
Results Summary
The Group loss for the year was approximately £2.7 million which is mainly attributable to an expense of approximately £2.4 million relating share based payments.
Outlook
The Group's strategy during this time has been to build a portfolio of uranium exploration projects with significant potential in Africa. We believe that we are on the right path to achieve this. The Company has now commenced the exploration of its South African assets, and is actively pursuing the grant of the remaining licenses in South Africa. In addition Brinkley Mining is ready to start exploration work in the DRC as soon as permits are granted and is developing the DRC radiation testing business to become a financial contributor at the earliest opportunity. The Directors are excited about the prospects for the Company in 2007 and thank our shareholders for their ongoing support.
J. Gerard Holden
Executive Chairman
For further information, please contact:
Brinkley Mining Plc
Gerard Holden, Chairman
Donald Strang, Finance Director
Bruce Stewart, Investor Relations
Tel +44 (0) 207 016 5108 Fax +44 (0) 207 016 5101
Beaumont Cornish Limited
Roland Cornish, Chairman
Tel +44 (0) 20 7628 3396 Fax +44 (0) 20 7628 3393
Arbuthnot Securities Limited
Graham Swindells
Tel +44 20 7012 2000
Parkgreen Communications
Justine Howarth, Clare Irvine
Tel +44 (0) 20 7851 7480 Fax +44 (0) 20 7494 9023
Group Income Statement (unaudited)
for the period ended 31 December 2006
| Notes | Period 11 August 2005 to 31 December 2006 £'000 |
|
|---|---|---|
| Turnover | - | |
| Administrative expenses | (835) | |
| Exploration expenditure write off | (45) | |
| Share options expensed | (2,372) | |
| Group operating loss | (3,252) | |
| Interest receivable | 505 | |
| Loss before Taxation | (2,747) | |
| Income tax expense | - | |
| Loss for the period after taxation | (2,747) | |
| Minority Interests | 0 | |
| Loss for the period attributable to equity holders of the parent company | (2,747) | |
| Loss per share | Pence | |
| -Basic | 2 | (1.22) |
| -Fully Diluted | 2 | (1.15) |
Group Statement of Recognised Income and Expense (unaudited)
for the period ended 31st December 2006
| Notes | Period 11 August 2005 to 31 December 2006 £'000 |
|
|---|---|---|
| Loss for the financial period | (2,747) | |
| Currency translation difference | (124) | |
| Total recognised gains and losses for the period | (2,871) |
Group Balance Sheet (Unaudited)
At 31st December 2006
| Notes | 31 Dec 2006 £'000 |
31 Dec 2006 £'000 |
|
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible Assets | 9,491 | ||
| Tangible Assests | 249 | 9,740 | |
| CURRENT ASSETS | |||
| Cash and cash equivalents | 16,615 | ||
| Trade and other receivables | 475 | ||
| Total Current Assets | 17,090 | ||
| TOTAL ASSETS | 26,830 | ||
| LIABILITIES | |||
| Current liabilities | |||
| Trade and other payables | (183) | ||
| TOTAL LIABILITIES | (183) | ||
| NET ASSETS | 26,647 | ||
| EQUITY | |||
| Equity attributable to the shareholders of the parent | |||
| Called up share capital | 3 | 465 | |
| Share premium | 3 | 18,306 | |
| Retained profit | 3 | (2,747) | |
| Merger Reserve | 3 | 7,033 | |
| Asset Revalution Reserve | 3 | 1,342 | |
| Foreign Exchange Reserve | 3 | (124) | |
| Share based payments reserve | 3 | 2,372 | |
| EQUITY SHAREHOLDERS’ FUNDS | 26,647 | ||
| Equity Minority Interests | 3 | 0 | |
| TOTAL EQUITY | 26,647 |
Group Reconciliation of Changes in Equity (unaudited)
For the period ended 31 December 2006
| Called Up Share Capital £000's |
Share Premium Reserve £000's |
Merger Reserve £000's |
Asset Revaluation Reserve £000's |
Foreign Currency Translation Reserve £000's |
Share Based payment Reserve £000's |
Retained Earnings £000's |
Total £000's |
Minority Interests £000's |
Total Equity £000's |
|
|---|---|---|---|---|---|---|---|---|---|---|
| As at 11 August 2005 | - | - | - | - | - | - | - | - | - | - |
| Share capital issued | 465 | 19,237 | - | - | - | - | - | 19,702 | - | 19,702 |
| Cost of share issue | - | (931) | - | - | - | - | - | (931) | - | (931) |
| Merger reserve arising on acquisition of subsidiary | - | - | 7,033 | - | - | - | - | 7,033 | - | 7,033 |
| Loss for the year | - | - | - | - | - | (2,747) | (2,747) | - | (2,747) | |
| Share based payments | - | - | - | - | - | 2,372 | - | 2,372 | - | 2,372 |
| Minority Interests | - | - | - | - | - | - | - | - | - | - |
| Currency translation differences | - | - | - | - | (124) | - | - | (124) | - | (124) |
| Fair value of intangible asset at acquisition | - | - | - | 1,342 | - | - | - | 1,342 | - | 1,342 |
| As at 31 December 2006 | 465 | (931) | 7,033 | 1,342 | (124) | 2,372 | (2,747) | 25,647 | - | 25,647 |
Group Cash Flow Statement (Unaudited)
For the period ended 31st December 2006
| Notes | Period 11 August 2005 to 31 December 2006 £'000 |
|
|---|---|---|
| CASH OUTFLOW FROM OPERATING ACTIVITIES | ||
| Net Operating Loss | (3,252) | |
| (Increase) in Trade and other debtors | (475) | |
| Increase in trade and other payables | 183 | |
| Foreign Exchanged translation | (124) | |
| Share options expensed | 2,372 | |
| NET OUT FLOW FROM OPERATING ACTIVITIES | (1,296) | |
| Cash flows from investing activities Interest Received | 505 | |
| NET CASH FLOWS FROM INVESTING ACTIVITIES | 505 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Payments to acquire intangible assets | (623) | |
| Payments to acquire tangible assets | (249) | |
| NET CASH FLOWS USED IN INVESTING ACTIVITIES | (872) | |
| ACQUISITIONS AND DISPOSALSs | ||
| Payments in acquisition of subsidiaries | (267) | |
| NET OUT FLOW FROM ACQUISITIONS AND DISPOSALSs | (267) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Issue of ordinary share capital | 19,311 | |
| Share issue costs | (766) | |
| NET CASH FLOWS FROM FINANCING ACTIVITIES | 18,545 | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 16,615 | |
| Cash and Cash equivalents at beginning of period | - | |
| Cash and Cash equivalents at END of period | 16,615 |
Summary Notes to the Financial Statements
For the period ended 31 December 2006
1 Summary of Significant Accounting Policies
(a) Statement of compliance with IFRSs
The group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The company's financial statements have been prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 1985. The principal accounting policies adopted by the group and company are set out below.
(b) Basis of Preparation
The group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern bases. The financial report is presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) unless otherwise stated.
(c) Basis of consolidation
The consolidated financial information incorporates the results of the Company and its subsidiaries ("the Group") using the purchase method. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained. Intercompany transactions and balances between group companies are eliminated in full. Minority interests represent the portion of profit or loss and net assets in subsidiaries that are not held by the group and are presented separately in the income statement and within equity in the consolidated balance sheet.
(d) Revenue
The Group had no revenue during the period ending 31 December 2006.
(e) Foreign Currency
The Company's functional currency is Sterling (£). Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. As at the reporting date the assets and liabilities of these subsidiaries are translated into the presentation currency of Brinkley Mining Plc at the rate of exchange ruling at the balance sheet date and their income statements are translated at the average exchange rate for the year. The exchange differences arising on the translation are taken directly to a separate component of equity.
All other differences are taken to the income statement with the exception of differences on foreign currency borrowings, which, to the extent that they are used to finance or provide a hedge against foreign equity investments, are taken directly to reserves to the extent of the exchange difference arising on the net investment in these enterprises. Tax charges or credits that are directly and solely attributable to such exchange differences are also taken to reserves.
(f) Goodwill and Intangible assets
Intangible assets are recorded at cost less eventual amortisation and provision for impairment in value. Goodwill on consolidation is capitalized and shown within fixed assets. Positive goodwill is subject to an annual impairment review, and Negative goodwill is immediately written-off to the income statement when it arises.
(g) Exploration and Development Costs
Exploration and development costs are carried forward in respect of areas of interest where the consolidated entity's rights to tenure are current and where these costs are expected to be recouped through successful development and exploration, or by sale. Alternatively, these costs are carried forward while active and significant operations are continuing in relation to the areas of interest and it is too early to make reasonable assessment of the existence or otherwise of economically recoverable reserves. When the area of interest is abandoned, exploration and evaluation costs previously capitalised are written off to the Income Statement.
In accordance with the full cost method, all costs associated with mining development and investment are capitalised on a project-by-project basis pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If a mining development project is successful, the related expenditures will be written-off over the estimated life of the commercial ore reserves on a unit of production basis. Impairment reviews will be carried out regularly by the directors of the company. Where a project is abandoned, or is considered to be of no further commercial value to the company, the related costs will be written off.
The recoverability of deferred mining costs and mining interests is dependent upon the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition of recoverable reserves.
(h) Significant accounting judgments, estimates and assumptions
(i) Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
(ii) Impairment of goodwill and intangibles with indefinite useful lives
The Group determines whether goodwill and intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating units to which the goodwill and intangibles with indefinite useful lives are allocated.
(iii) Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black and Scholes model.
(i) Finance costs/revenue
Borrowing costs are recognised as an expense when incurred.
Finance revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
(j) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(k) Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.
(l) Investments
Investments in subsidiary undertakings are stated at cost less any provision for impairment in value, prior to their elimination on consolidation.
(m) Financial Instruments
The Group's financial instruments, other than its investments, comprise cash and items arising directly from its operation such as trade debtors and trade creditors. The Group has overseas subsidiaries in South Africa and Seychelles whose expenses are denominated in South African Rand and US Dollars. Market price risk is inherent in the Group's activities and is accepted as such. There is no material difference between the book value and fair value of the Group's cash.
(n) Deferred Taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the tax computations, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case it is also dealt with in equity.
(o) Merger Reserve
The difference between the fair value of an acquisition and the nominal value of the shares allotted in a share exchange have been credited to a merger reserve account, in accordance with the merger relief provisions of the Companies Act 1985 and accordingly no share premium for such transactions is set-up.
(p) Property, plant and equipment
Depreciation is provided on all other tangible assets to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates:
Land (including option costs) - Nil
There is no depreciation charge in the year of acquisition. All assets are subject to annual impairment reviews.
(q) Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(r) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.
(s) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
(t) Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
(u) Share-based payment transactions
(i) Equity settled transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based pa yments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black and Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Brinkley Mining Plc (market conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and
(ii) the Group's best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 2).
(v) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
-costs of servicing equity (other than dividends) and preference share dividends;
-the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
-other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
2. Loss per share
The calculation of the basic loss per ordinary share is based on a loss of approximately £2,7 million to 31 December 2006 and the average weighted number of ordinary shares outstanding of 225,918,304 in the period ended 31 December 2006. The calculation of the diluted earnings per share is based on the loss of approximately £2.7 million and the total diluted shares of 238,165,708.
3. Share capital
The authorised share capital of the Company and the called up and fully paid amounts at 31 December 2006 were as follows:
| Period ending 31 December 2006 £ |
|
|---|---|
| Authorised: | |
| 1,000,000,000 ordinary shares of 0.15p each | 1,500,000 |
| Allotted, called up and fully paid: | |
| 309,751,248 ordinary shares of 0.15p each | 464,627 |
The following share issues took place during the period:
| Date | Number of shares | Price per share | Total consideration | |
|---|---|---|---|---|
| August 2005 | On incorporation, for cash | 2 | 0.0015 | 0 |
| August 2005 | For cash | 19,999,998 | 0.0015 | 30,000 |
| August 2005 | For cash | 16,250,000 | 0.02 | 325,000 |
| November 2005 | For cash | 19,360,000 | 0.05 | 968,000 |
| November 2005 | Non cash - To acquire Uranium Holdings (Pty) Ltd | 145,000,000 | 0.0015 | 217,500 |
| December 2005 | For cash | 22,350,000 | 0.05 | 1,117,500 |
| January 2006 | For cash | 2,300,000 | 0.05 | 115,000 |
| May 2006 | For cash | 75,347,770 | 0.20 | 15,069,554 |
| May 2006 | Non cash - commission | 734,888 | 0.20 | 146,978 |
| May 2006 | For cash | 3,371,514 | 0.50 | 1,685,757 |
| May 2006 | Non cash - commission | 37,076 | 0.50 | 18,538 |
| November 2006 | To acquire Brinkley Africa Ltd | 5,000,000 | 0.0015 | 7,500 |
| Less: share issue expenses | (930,791) | |||
| Total allotted, called and fully paid | 309,751,248 | 18,770,536 |
4. Preliminary Announcement
The financial information set out in this preliminary announcement, which was approved by the directors on 7 March 2007, has been prepared on the basis of the accounting policies set out in the unaudited accounts for the period ended 31 December 2006. The financial information does not constitute the group's statutory accounts for the year ended 31 December 2006. Statutory accounts for 2006 will be posted to shareholders on or before 30 March 2007.
5. Qualified Person
Kiran Morzaria B.Eng (ACSM), (FGS), MBA, has reviewed the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School. He has compiled, read and approved the technical disclosure in this regulatory announcement.
