Toledo Mining Full Year Results for the Year Ended 31 March 2010
(Thomson Reuters ONE) -
23 August 2010
Toledo Mining Full Year Results for the Year Ended 31 March 2010
Toledo Mining Corporation plc ("Toledo" or the "Company") (AIM: TMC) is pleased
to present its final results for the year ended 31 March 2010.
Highlights
Operational
* Three shipments totalling 143,765 wet metric tonnes to the Yabulu Refinery
* Receipt of exploration permits at Berong and commencement of a drilling
programme
Financial
* Berong sales revenue: US$3.3 million (2009: US$14.65 million)
* Consolidated loss before tax: £1.98 million (2009: £1.9 million)
* Loss per share including associates: 4.74p (2009: earnings per share of
5.55p)
* Cash reserves: £3.91 million, as at 31 March 2010
Corporate
* Successful placing of 12 million shares at a price of 28 pence to raise £3.2
million net of expenses
* Election of Jason Cheng as Non-Executive Director
* Appointment of Ken Stein as Chief Operating Officer
For further information, please visit www.toledomining.com or contact:
Reg Eccles, Chairman, Toledo Mining Corporation +44 (0) 20 7514 1480
Richard Greenfield, Ambrian Partners Ltd +44 (0) 20 7634 4700
Alex Buck, BuckBias Limited +44 (0) 7932 740 452
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2010
The past 18 months have been a particularly busy time for Toledo Mining
Corporation plc ("Toledo" or the "Company") as we have sought to progress the
development of our nickel interests in the Philippines.
During the first half of the financial year, Berong Nickel Corporation ("BNC"),
in which Toledo has a 56.1% economic interest, shipped 143,765 wet metric tonnes
("wmt") of nickel ore to Queensland Nickel Pty Ltd ("QNP") in Australia,
generating US$3.3 million net revenue. All shipments were made from the
stockpile accumulated at site prior to the Berong mine being placed on care and
maintenance during the worst months of the global banking crisis.
However, shortly after BHP Billiton announced in July 2009 that it had sold the
Yabulu refinery to an entity controlled by Professor Clive Palmer, QNP advised
BNC that it would not be taking any more shipments from Berong. This action
deprived Berong of very substantial future revenue and resulted in the loss of
several hundred jobs at Berong. Needless to say, BNC disputes the legitimacy of
QNP's action and will be seeking compensation through the appropriate mechanism
set out in the contract.
For the financial year to 31 March 2010, Toledo reported pre-tax losses of £1.98
million, and loss per share including associated companies' results of 4.74
pence. These compared respectively to £1.91 million profit and fully diluted
earnings per share of 5.48 pence for 2009.
The reported 2010 loss was after interest earned on cash holdings and
outstanding US$-denominated loans to Philippine partners of £0.69 million, and
exchange rate losses of £0.71 million on those loans. Excluding exchange losses,
Toledo recorded a pre-tax loss of £1.27 million, of which the share of
associated companies' losses in the Philippines accounted for £0.86 million.
During the year, Toledo continued to fund not only its share of operating
expenses in the Philippine projects but also those of our Philippine partners
under the terms of existing loan agreements. As a consequence, the Group
consumed cash of £2.22 million during the financial year and held cash of £3.91
million as at 31 March 2010.
Shortly after the commencement of our financial year, we announced that Daintree
Resources Limited had acquired 20% of the share capital of Toledo through on
market purchases. In July 2009, following the share placement to existing and
new shareholders that raised £3.36 million before expenses, Jason Cheng, a
co-owner of Daintree, was elected to the Board. Jason is the managing partner of
a private equity group operating out of Hong Kong which invests in energy and
mineral resources throughout the Asian region. With this development, Toledo
gained not only a financially strong supportive shareholder but, even more
importantly, access to a team of regional specialists capable of making a
significant contribution to the development of our business. The present
negotiation with Jinchuan Group Limited ("Jinchuan"), discussed below, is a case
in point.
As a result of subscription to the placing, Daintree's holding in Toledo
increased to 24% and Toledo welcomed yet another important shareholder to its
register - Fevamotinico SARL, a company controlled by Kostyantin Zhevago. Mr
Zhevago is probably best known as the CEO and majority shareholder of Ferrexpo,
the Ukrainian iron ore miner and iron pellet producer which is listed on the
London Stock Exchange and has a market capitalisation of some £1.8 billion. Mr
Zhevago already has an interest in the nickel industry by virtue of a
ferronickel business he is developing in Macedonia.
The funds raised in the placing have been, and continue to be, applied to an
exploration programme at Berong, securing the right to mine the Ipilan deposit
through a "Declaration of Mine Feasibility" and general working capital
requirements.
At Berong, the target is to increase the JORC resource from the current 10
million dry metric tonnes ("dmt") to the 40 million dmt considered necessary to
support a value-added processing plant. A drilling programme at Berong commenced
in February 2010 and is expected to take around 12 months.
Permitting for a mining operation at Ipilan is at a very advanced stage. All the
four local councils ("barangays"), the municipality and the province within
which Ipilan is located have endorsed our proposed operation. The mandatory
environmental study and Declaration of Mine Feasibility (akin to a
pre-feasibility study) have been submitted to the relevant authorities and await
review and sign off. It is anticipated that Ipilan will receive all the
necessary consents so that it will be in a position to commence the development
of a mining operation in 2011; the actual commencement date will be dependent
upon securing profitable, long-term ore supply contracts.
While these developments have been progressing, Toledo has continued to seek
long-term direct ore shipping ("DOS") supply contracts which would justify
restoring operations at Berong. Although DOS demand by Chinese pig nickel
operators has increased during the past year, the major part of this has been
for low nickel/high iron ore (typically containing less than 1% nickel and
45%-plus iron), primarily as a substitute for high priced iron ore. Berong has
received enquiries for its ore, which has a much higher nickel content, but thus
far the prices offered have been insufficiently attractive to justify restarting
the mine. Since the end of the reporting period, however, there have been signs
that prices are beginning to improve and, if this trend continues, mining
operations could resume at Berong in 2011.
Toledo has always recognised the benefit that a strong strategic industrial
partner can bring to realising the full potential of its nickel interests. When
European Nickel plc ("European Nickel") acquired 19.3% of Toledo and 18.7% of
BNC in June 2008, the expectation was that this would result in a fairly rapid
development of a heap leaching operation at Berong utilising European Nickel's
technology. Later that same month, Toledo announced the signing of a Memorandum
of Understanding ("MoU") with Jiangxi Rare Earth & Rare Metals Tungsten Group
("JXTC") for the development of a nickel leaching plant using Ipilan ore to
serve a nickel refinery JXTC planned to build in China.
The global banking crisis and the accompanying collapse in the nickel price
prevented any immediate implementation of these plans, and both European Nickel
and JXTC have subsequently found it necessary to reassess their priorities.
European Nickel, which recently merged with Rusina Mining, has two major
projects to finance and develop - Caldag in Turkey and Acoje in the Philippines.
Although European Nickel still has an 18.7% stake in BNC, its equity interest in
Toledo has been reduced to 7.1%.
JXTC has not yet begun construction of its planned nickel refinery. At the end
of April this year, it was announced that Chinalco, the major Chinese aluminium
and copper producer, was to take a 51% stake in the nickel refinery project and
had government approval to acquire JXTC itself. Seemingly good news for Toledo,
it is now clear however that JXTC will not progress the MoU until its ownership
position is resolved, nor is there any certainty that Chinalco will wish to do
so if it does acquire JXTC.
Toledo has not been idle in seeking other strategic partners, and after the end
of the financial year, in July 2010, we signed an MoU with Jinchuan, China's
largest producer of primary nickel and one of the world's leading producers.
Like many other sulphide nickel producers, Jinchuan recognises the need to
access the more plentiful nickel laterite resources, and those in the
Philippines could not be better located to support its ambitious expansion
plans.
Under the proposed agreement, Jinchuan will inject funds into Toledo by taking a
29.9% equity interest in the Company, and will offer Toledo and its joint
venture partners long-term ore supply contracts from 2013 as well as the
opportunity to participate in downstream processing. Your Board is very excited
about this proposed strategic alliance and, provided all parties to the
agreement are satisfied with the terms, expects a definitive agreement to be
signed before the end of 2010.
In March this year, we appointed Ken Stein as Toledo's Chief Operating Officer
and General Manager in the Philippines. Ken replaced Tim Ashworth as Chief
Executive of TMM Management Inc ("TMM"), the company responsible for managing
the day-to-day operations in the Philippines on behalf of both Toledo and our
partners, and is a valuable addition to our management team. Ken has over 30
years' engineering and technical experience in the mining industry, and was
previously responsible for managing European Nickel's participation in the Acoje
heap leach nickel project in the Philippines. I would like to take this
opportunity to express the Board's appreciation and gratitude to Tim Ashworth
and indeed the whole TMM management team who have worked diligently throughout
what has been an extremely busy and challenging period for our Company.
Finally, I wish to thank our shareholders for their continuing support as the
nickel market, like other global markets, slowly recovers from the exceptionally
severe economic downturn. We have made encouraging progress towards securing
Toledo's future as a major value-added nickel producer, and I look forward to
updating you over the coming year as we achieve further important milestones on
that journey.
Reginald Eccles
Chairman
23 August 2010
OPERATING REVIEW
Management's focus for the period under review has been concentrated on building
the foundations necessary to become a major value-added nickel producer: by
delineating an increased resource at Berong to support a potential nickel
processing plant producing 20,000 tonnes of nickel per annum, by progressing the
right to mine at Ipilan, and by seeking a strategic partner to help realise this
objective.
While the nickel price recovered from a low of around US$10,000 per tonne at the
start of the financial year, to an average of over US$17,000 per tonne for the
second half of the financial year, DOS demand for higher grade nickel laterite
ore remained weak despite Toledo's efforts to secure long-term DOS supply
contracts which would justify restoring operations at Berong.
During the financial year, BNC made three shipments totalling 143,765 wmt to the
Yabulu Refinery in Queensland, Australia, generating US$3.3 million net revenue.
The shipments to QNP were made under a five-year contract running until 2012,
under which QNP was committed to purchase a minimum of 300,000 wmt per annum. In
July 2009, BHP Billiton sold the refinery to an entity controlled by Professor
Clive Palmer, following which QNP informed BNC it would no longer be taking any
ore shipments from Berong. This has clearly impacted our operations at Berong,
forcing the mine to remain on care and maintenance with the loss of much needed
jobs for the local community, and depriving BNC of substantial future revenues.
BNC disputes the legitimacy of QNP's action. Toledo has appointed lawyers in
Australia on behalf of BNC to pursue claims against QNP for losses and damages
arising from QNP's attempted cancellation of the DOS contract.
The DOS market to China is currently dominated by Chinese pig iron operators
substituting higher priced iron ore with cheaper low nickel/high iron content
ore. Berong ore typically ranges from 1.0-2.2% nickel and 20-30% iron. Although
BNC has received enquiries during the past year, the prices offered were
uneconomical and would not support the resumption of mining operations at
Berong. BNC continues to work hard, assisted by its Chinese nickel agent, to
secure long-term DOS contracts, and there are indications that demand and prices
for higher grade nickel ore may be improving. While the Berong mine continues on
care and maintenance, operations can be restarted on short notice.
Community relations at Berong continue to be a key priority for the management
team. Alongside funding community initiatives, particularly focused towards
health, such as the health clinic, medical services and a water treatment
facility, BNC continues to set the benchmark in responsible mining and
sustainable practices in the Philippines. Members of the team will be presenting
a paper at the International Conference on the Rehabilitation, Restoration and
Transformation of Mining Land, showcasing the work being done on rehabilitation
research at Berong.
Permitting work began in June 2009 to enable exploration at Dangla, Morsoom and
Long Point. The Company is aiming to delineate an additional 30 million dmt of
JORC resources during the coming year as the Board considers a total Berong JORC
resource of over 40 million dmt of nickel laterite ore would be sufficient to
support a 20,000 tonne per annum nickel processing plant.
A budget of US$1.5 million has been allocated for the drilling programme, and to
date 297 holes have been drilled inside the MPSA area and 565 holes in new
exploration areas. Although drilling at Berong commenced in February of this
year, BNC is still waiting permission to explore some of the areas regarded as
the most prospective. It is expected that BNC will get access to at least one of
these areas (most likely Long Point) before the end of 2010.
Following the publication of a JORC resource for Ipilan in December 2008, Ipilan
Nickel Corporation ("INC") completed an in-house resource update at the
beginning of the financial year, covering all the completed holes within the
tenement. The update indicated a total resource of approximately 52 million dmt
at an average of 1.1% Ni, compared to the announced JORC resource of 44 million
dmt at 1.19% Ni. In January 2009, the exploration extension for another two
years was granted and the process of obtaining permits to mine began in earnest.
The Ipilan operation has been endorsed by all the four local barangays, and has
also gained municipal and provincial approval. The Environmental Impact Study
("EIS") has been completed and submitted to the Department of Environment and
Natural Resources ("DENR") for sign-off. Once this is granted, it will trigger
the issuing of the all-important Environmental Compliance Certificate ("ECC").
At the time of writing, the EIS is in the process of being presented for
approval to the Palawan Council for Sustainable Development ("PCSD"). These
documents, coupled with the Definitive Mine Feasibility Study, are then
submitted to both the DENR and the PCSD. This is the final stage of the
permitting process and, once completed, will allow a DOS operation to be
established. The exact timing of the commencement of mine development and
subsequent operations will be determined by the securing of long-term DOS
contracts.
After the end of the reporting period, in July this year, Toledo announced a
potentially transforming development for the Company when it signed a MoU with
Jinchuan Group Limited, the largest nickel producer in China. This followed six
months of detailed negotiations by TMM and Jason Cheng. Under the terms of the
MoU, it is proposed that Jinchuan will acquire a 29.9% strategic investment in
Toledo for around £7.4 million and enter into a commercial DOS contract for at
least one million tonnes per annum of nickel ore from 2013, which will supply
Jinchuan's planned ferronickel smelter in China's Guangxi Province. Toledo will
be granted a right to co-invest in this plant, and the parties will also work
together on a second potential processing plant in the Philippines.
This strategic alliance would provide a secure path for the fast-track
development of our assets, and a means to unlock the tremendous potential of our
resource base in Palawan. Jinchuan's proven operating and technical expertise,
together with Toledo's assets and people in the Philippines, would be an
excellent combination.
Completion of the transactions set out in the MoU is subject to the satisfaction
of conditions precedent including the signature of definitive legal agreements;
completion of due diligence; board, shareholder, and, where relevant, partner
and regulatory approvals - all of which are currently underway and are expected
to be finalised before the end of 2010.
TMM's priorities during the current financial year are to secure exploration
permits for the outstanding areas at Berong, continue the drilling programme,
progress the Definitive Mine Feasibility Study through to completion, and
finalise the MoU with Jinchuan into a definitive legal agreement that will
enable Toledo to accelerate towards its ultimate objective of becoming a major,
highly profitable value-added nickel producer.
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2010
Year Year
Ended Ended
31 March 2010 31 March 2009
Notes £ £
Revenue 3 362,098 1,190,121
Gross profit 362,098 1,190,121
Administration expenses (1,567,371) (2,467,557)
Foreign exchange (losses) / gains (693,255) 3,590,618
Other operating income 92,711 71,786
Realised and unrealised gains on current
asset investments - 142,291
Share of results of associates (863,997) (1,133,453)
(Loss) / profit from operations 4 (2,669,814) 1,393,806
Investment income 7 686,991 526,081
(Loss) / profit before taxation (1,982,823) 1,919,887
Income tax credit/(expense) 8 198,100 (198,100)
(Loss) / profit for the year (1,784,723) 1,721,787
Attributable to:
Equity holders of the parent (1,772,838) 1,639,603
Minority interest (11,885) 82,184
__________ ________
(1,784,723) 1,721,787
(Loss) / earnings per share in pence -
including share of associates results
Basic 9 (4.74) 5.55
Diluted 9 (4.74) 5.48
(Loss) / earnings per share in pence -
excluding share of associates results
Basic 9 (2.43) 9.39
Diluted 9 (2.43) 9.26
The Company has taken advantage of section 408 of the Companies Act 2006 not to
publish its own income statement account
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2010
Year Year
Ended Ended
31 March 2010 31 March 2009
£ £
(Loss) / profit for the year (1,784,723) 1,721,787
Foreign currency translation differences (57,799) 255,134
for foreign operations
________ _______
Other comprehensive (expense) / income (57,799) 255,134
for the year
_________ _________
Total comprehensive (expense) / income (1,842,522) 1,976,921
for the year
Attributable to:
Equity holders of the parent (1,810,097) 1,833,791
Minority interest (32,425) 143,130
________ ________
(1,842,522) 1,976,921
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2010
Notes 31 March 2010 31 March 2009
£ £
ASSETS
Non-current assets
Property, plant and equipment 10 281 1,629
Investment in associated undertakings 12 10,409,711 11,273,708
Loans and receivables 13 14,451,634 13,755,986
Trade and other receivables 14 40,036 38,450
Total non-current assets 24,901,662 25,069,773
Current assets
Trade and other receivables 15 901,623 951,159
Taxation 16 211,512 29,001
Cash and cash equivalents 17 3,916,603 2,882,774
Total current assets 5,029,738 3,862,934
_________ _________
TOTAL ASSETS 29,931,400 28,932,707
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 18 682,392 996,112
Taxation 19 - 209,547
Total current liabilities 682,392 1,205,659
_________ ________
Total liabilities 682,392 1,205,659
Equity
Share capital 20 2,076,917 1,476,917
Share premium account 21 27,218,897 24,570,675
Share based payments reserve 22 233,183 307,899
Translation reserve 109,970 142,395
Retained (loss) / profit (786,052) 795,810
Equity attributable to equity holders of the
parent 28,852,915 27,293,696
Minority Interest 23 396,093 433,352
Total equity 29,249,008 27,727,048
_________ _________
TOTAL EQUITY AND LIABILITIES 29,931,400 28,932,707
COMPANY BALANCE SHEET AS AT 31 MARCH 2010
Notes 31 March 2010 31 March 2009
£ £
ASSETS
Non-current assets
Property, plant and equipment 10 281 1,629
Investment in subsidiary undertaking 11 10,286 10,286
Investment in associated undertakings 12 9,870,107 9,870,107
Loans and receivables 13 14,451,634 13,755,986
Trade and other receivables 14 40,036 38,450
Total non-current assets 24,372,344 23,676,458
Current assets
Trade and other receivables 15 43,549 52,703
Taxation 16 211,512 29,001
Cash and cash equivalents 17 3,852,581 2,712,295
Total current assets 4,107,642 2,793,999
_________ _________
TOTAL ASSETS 28,479,986 26,470,457
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 18 672,561 924,314
Taxation 19 - 209,547
Total current liabilities 672,561 1,133,861
_________ ________
Total liabilities 672,561 1,133,861
Equity
Share capital 20 2,076,917 1,476,917
Share premium account 21 27,218,897 24,570,675
Share based payments reserve 22 233,183 307,899
Retained loss (1,721,572) (1,018,895)
Equity attributable to equity holders of the
parent 27,807,425 25,336,596
Total equity 27,807,425 25,336,596
_________ _________
TOTAL EQUITY AND LIABILITIES 28,479,986 26,470,457
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2010
Share Trans-
Based Retained lation
31 March 2010 Share Share Payments Profit / Minority Exchange
Capital Premium Reserve (Loss) Interest Reserve Total
£ £ £ £ £ £ £
Balance at 1
April 2009 1,476,917 24,570,675 307,899 795,810 433,352 142,395 27,727,048
Total
comprehensive
expense for
the year
Loss - - - (1,772,838) (11,885) - (1,784,723)
Total other
comprehensive
expense - - - - (25,374) (32,425) (57,799)
________ _______ ________ _________ ________ ________ ________
Total
comprehensive
expense for
the year - - - (1,772,838) (37,259) (32,425) (1,842,522)
Transactions
with
owners
Issue of new
shares 600,000 2,648,222 - - - - 3,248,222
Transfer from
reserve - - (190,976) 190,976 - - -
Share options
granted in
year - - 116,260 - - - 116,260
________ _________ ______ _______ _______ _______ _________
Balance at 31
March 2010 2,076,917 27,218,897 233,183 (786,052) 396,093 109,970 29,249,008
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2010
Share Trans-
Based lation
31 March 2009 Share Share Payments Retained Minority Exchange
Capital Premium Reserve Loss Interest Reserve Total
£ £ £ £ £ £ £
Balance at 1
April 2008 1,476,917 24,508,568 408,980 (882,767) 239,164 (735) 25,750,127
Total
comprehensive
income for the
year
Profit - - - 1,639,603 82,184 - 1,721,787
Total other
comprehensive
income - - - - 112,004 143,130 255,134
_______ ________ ______ ________ _______ _______ ________
Total
comprehensive
income for the
year - - - 1,639,603 194,188 143,130 1,976,921
Transfer from
reserve - 62,107 (101,081) 38,974 - - -
________ _________ ________ _______ _______ _______ _________
Balance at 31
March 2009 1,476,917 24,570,675 307,899 795,810 433,352 142,395 27,727,048
CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010
Notes Year Year
Ended Ended
31 March 2010 31 March 2009
£ £
Net cash outflow from operating activities 24 (1,291,874) (1,312,017)
Investing activities
Investment income 22,560 220,540
Sale of current investments - 555,907
Loan investments advanced (747,723) (2,039,918)
_________ _________
Net cash outflow from investing activities (725,163) (1,263,471)
Financing activities
Issue of equity share capital 3,248,222 -
_________ ________
Net cash inflow from financing activities 3,248,222 -
Taxation
Payment of corporation tax (197,356) -
________ ________
Net increase / (decrease) in cash and cash
equivalents 1,033,829 (2,575,488)
Cash and cash equivalents at 1 April 2,882,774 5,458,262
_________ ________
Cash and cash equivalents at 31 March 17 3,916,603 2,882,774
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2010
1. General information
Toledo Mining Corporation Plc is a company incorporated in England and Wales
under the Companies Act 1985. The Company's registered office is Ground Floor,
11 Albemarle Street, London, W1S 4HH. The registration number of the Company is
5174452.
The principal activity of the Group is the investment in and exploration and
development of mining projects, specifically in the Philippines.
The Group's principal activity is carried out in US dollars. The financial
statements are presented in pounds Sterling as this is the currency of the
country (the UK) where the Company is incorporated and its ordinary shares are
admitted for trading.
The Board of directors has authorised the issue of these financial statements on
the date of the statement as set out on page 12.
2. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs).
The financial statements have been prepared on the historical cost basis except
that certain financial instruments are accounted for at fair values. The
principal accounting policies adopted are set out below.
New standards applied
The Group has applied the following relevant standards which are effective for
annual reporting periods beginning on or after 1 January 2009.
IFRS 2 (revised) Share-based payment vesting conditions and cancellations
IFRS 8 Operating segments
IAS 1 (revised and amended) Presentation of financial statements
IAS 16 (amended) Property, plant and equipment
IAS 19 (amended) Employee benefits
IAS 23 (revised and amended) Borrowing costs
IAS 27 (amended) Consolidated and separate financial statements
IAS 28 (amended) Investments in associates
IAS 32 (amended) Financial instruments - presentation
IAS 36 (amended) Impairment of assets
IAS 38 (amended) Intangible assets
IAS 39 (amended) Financial instruments- recognition and measurement
The adoption of these standards did not have a material impact on the Group and
Company's financial position or performance. IAS 1 (revised) resulted in a
change in the manner in which the statements are presented
New standards not applied
The IASB has issued the following relevant standards which are not effective and
have not been early adopted for these financial statements:
Effective date
IFRS 3 (revised) Business combinations 1 July 2009
IAS 27 (amended) Consolidated and separate financial statements 1 July 2009
The directors do not anticipate that adoption of these standards will have a
material impact on the Group and Company's financial position
Going Concern
The financial statements have been prepared on a going concern basis, which
contemplates continuity of normal business activities and the realisation of
assets and settlement of liabilities in the ordinary course of business.
The Directors believe that it is appropriate to prepare the financial report on
a going concern basis as they are confident that the Company will be able to
raise additional funds through further debt or equity raisings when required.
The Directors are of the opinion that the proposed debt or equity raising
measures and the existing cash resources will provide sufficient funds to enable
the Company to continue its operations for at least the next twelve months.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and all Group undertakings. Control is achieved when the Company
has the power to govern the financial and operating policies of an investee
entity so as to obtain benefits from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair value of the identifiable net
assets acquired is recognised as goodwill.
Any deficiency of the cost of acquisition below the fair value of the
identifiable net assets acquired (i.e. discount on acquisition) is credited to
the income statement in the period of acquisition. The interest of minority
shareholders is stated at the minority's proportion of the fair values of the
assets and liabilities recognised. Subsequently, any losses applicable to the
minority interest in excess of the minority interest are allocated against the
interests of the parent.
The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
the Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Investments in Associates
An associate is an entity over which the Group is in a position to exercise
significant influence, but not control or joint control, through participation
in the financial and operating policy decisions of the investee.
The results and assets and liabilities of associates are incorporated in these
financial statements using the equity method of accounting. Investments in
associates are carried in the balance sheet at cost as adjusted by
post-acquisition changes in the Group's share of the net assets of the
associate, less any impairment in the value of individual investments. Losses
of the associates in excess of the Group's interest in those associates are not
recognised.
Where a Group company transacts with an associate of the Group, unrealised
profits and losses are eliminated to the extent of the Group's interest in the
relevant associate. Losses may provide evidence of an impairment of the asset
transferred in which case appropriate provision is made for impairment.
The Group and its associated undertakings have complied with the requirements of
IFRS 6 Exploration for and Evaluation of Mineral Resources.
Upon commencement of commercial production operation of a mining property, the
investment in the associate company relating to that property is amortised on
the basis of ore body extracted as a proportion of the ore body estimate of that
property.
Revenue recognition
Revenue and other operating income represent the provision of consultancy,
management and office services for the year.
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Gains and losses on current asset investments represent realised and unrealised
gains / (losses).
Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the rates
of exchange prevailing on the dates of the individual transactions. For
practical reasons, a rate that approximates to the actual rate at the date of
the transaction is often used. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing on the balance sheet date. Non-monetary assets and liabilities
that are denominated in foreign currencies are retranslated at the rates
prevailing at the balance sheet date. Gains and losses arising on retranslation
are included in net profit or loss for the period. On consolidation, the assets
and liabilities of the Group's overseas operations are translated at exchange
rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the period unless exchange rates
fluctuate significantly. Exchange differences arising, if any, are classified
as equity and transferred to the Group's translation reserve. Such translation
differences are recognised as income or as expenses in the period in which the
operation is disposed of.
The following rates of exchange have been applied:
2010 2009
1 US Dollar to 1 British Pound
Closing rate 0.6637 0.7038
Average rate 0.6276 0.5919
1 Philippine Peso to 1 British Pound
Closing rate 0.0147 0.0146
Average rate 0.0135 0.0128
Taxation
The income tax expense represents the sum of the tax currently payable and
deferred tax. The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the income
statement, because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet date.
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 computation of taxable
profit, 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. Such assets and liabilities are not recognised if the
temporary difference arises from the original recognition of other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
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 the deferred tax is also
dealt with in equity.
No recognition has been made for the deferred tax asset arising in respect of
current losses as the directors are of the opinion that this may not be
realisable in the foreseeable future.
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet
when the Company becomes a party to the contractual provisions of the
instrument.
Non-current intangible assets
Non-current intangible assets are shown at cost less any provisions made in
respect of impairment.
Asset impairments
Assets are reviewed for impairment at each balance sheet date or if events or
changes in circumstances indicate that the carrying amount may not be
recoverable. When a review is conducted, the recoverable amount is assessed by
reference to the net present value of expected future cash flows of the relevant
income generating unit or disposal value, if higher.
If an asset is impaired, a provision is made to reduce the carrying amount to
its estimated recoverable amount.
Non-current asset investments
Loan investments are shown at cost less provision for any permanent diminution
in value. Loan investments are recognised as an asset when sums are advanced.
Property, plant and equipment
Office equipment and furniture are shown at cost less accumulated depreciation
and any recognised impairment loss. Depreciation is charged so as to write off
the cost of assets over their estimated useful lives, using the straight line
method on the following basis:
Office furniture and fittings 33% - 50%
Computer and office equipment 33% - 100%
Cash and cash equivalents
Cash and cash equivalents comprise cash held at bank and on short term deposits.
Trade payables
Trade payables are not interest bearing and are stated at their nominal value.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated irrecoverable amounts.
Investments
Investments are recognised and derecognised on a trade date where a purchase or
sale of an investment is under a contract whose terms require delivery of the
investment within the timeframe established by the market concerned, and are
initially measured at cost, including transaction costs.
Investments are classified as held-for-trading and are measured at subsequent
reporting dates at fair value. Where securities are held for trading purposes,
gains and losses arising from changes in fair value are included in net profit
or loss for the period.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received
except where those proceeds appear to be less than the fair value of the equity
instruments issued, in which case the equity instruments are recorded at fair
value. The difference between the proceeds received and the fair value is
reflected in the share based payments reserve.
The costs of issuing new equity are charged against the share premium account.
Operating Leases
Rental costs under operating leases are charged to the income statement on a
straight line basis over the term of the lease. Where an incentive to sign the
lease has been taken the incentive is spread on a straight line basis over the
lease term.
Pension costs
The Company makes defined contributions to the independent pension scheme of its
employees.
Share based payments
The Group has applied the requirements of IFRS 2 Share-based Payments
The Group issues equity-settled based payments to directors, staff and certain
professional advisors of the Group. Equity-settled share-based payments are
measured at fair value at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payment is expensed on a
straight-line basis over the vesting period, based on the Group's estimate of
shares that will eventually vest.
Fair value is measured using a Black-Scholes model. The expected life used in
the model has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and behavioural
considerations.
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In the process of applying the Group's accounting policies above, management
necessarily make judgements and estimates that have a significant effect on the
amounts recognised in the financial statements. Changes in the assumptions
underlying the estimates could result in a significant impact to the financial
statements. The most critical of these accounting judgement and estimation areas
are as follows:
Impairment of Assets
The Group reviews the carrying amounts of assets as at each balance sheet date
or if events or changes in circumstance indicate that the carrying amount may
not be recoverable to determine whether there is any indication of impairment.
If any such indication exists, the assets' recoverable amount or value in use is
estimated. Determining the value in use requires the determination of future
cash flows expected to be generated from the continued use and ultimate disposal
of the asset. This requires the Company to make estimates and assumptions that
can materially affect the financial statements. Any resulting impairment loss
could have a material adverse impact on the Group's financial position and
results of operations.
3. Segmental analysis
The turnover and loss before tax are attributable to the principal activities of
the Group.
Segmental information on a geographical basis is set out below:
Year ended 31 March 2010
UK Philippines China Total
£ £ £ £
Revenue 6,380 - 355,718 362,098
Loss for the year (893,653) - (27,073) (920,726)
Share of associates results - ( 863,997) - (863,997)
Depreciation 1,348 - - 1,348
Total assets 4,147,678 24,861,626 922,096 29,931,400
Total liabilities 207,971 464,590 9,831 682,392
Loan investment additions - 1,410,568 - 1,410,568
Year ended 31 March 2009
UK Philippines China Total
£ £ £ £
Revenue 32,126 - 1,157,995 1,190,121
Profit for the year 2,668,032 - 187,208 2,855,240
Share of associates results - (1,133,453) - (1,133,453)
Depreciation / Amortisation - 6,267 - 6,267
Total assets 2,832,448 25,031,323 1,068,936 28,932,707
Total liabilities 641,202 492,657 71,800 1,205,659
Loan investment additions - 2,433,719 - 2,433,719
Details of associated companies' results are shown in note 30.
4. (Loss) / profit from operations
(Loss) / profit from operations is stated after charging / (crediting):
Year ended Year ended
31 March 2010 31 March 2009
£ £
Auditors remuneration:
-auditing of the financial statements of the Company
pursuant to legislation 43,690 37,695
- as reporting accountants 18,750 17,365
- taxation compliance 820 4,984
Audit fees - other auditor 15,067 29,953
Operating lease - office rent 69,186 69,298
Gains on current asset investments - (142,291)
Foreign exchange losses / (gains) 693,255 (3,590,618)
Directors fees and emoluments (see note 6) 247,205 246,546
Depreciation 1,348 4,897
Amortisation - 1,370
5. Particulars of employees
The average number of staff employed by the Group during the financial year
amounted to:
Year ended Year ended
31 March 2010 31 March 2009
No. No.
Administrative staff 1 2
The aggregate costs of the above were:
£ £
Wages and salaries 43,404 54,584
Social security costs (1,115) 6,001
Pension costs - defined contribution - 2,084
Share based payments 57,460 -
______ ______
99,749 62,669
Share based payments charge relates to share options granted during the year to
management and employees of TMM Management Inc.
6. Directors' emoluments and fees
The Company also employed five (2009: seven) directors during the year with
aggregate emoluments in respect of qualifying services as follows:
Year ended Year ended
31 March 2010 31 March 2009
£ £
Directors' emoluments 25,200 16,500
Directors' fees 42,600 30,150
Amounts paid to third parties for the provision of
directors' services 59,400 188,750
Share based payments and related costs 58,800 10,385
______ ______
186,000 245,785
£ £
Highest paid director 64,200 120,000
In the year ended 31 March 2009 the Company paid £126,000 to directors as
compensation for loss of office. This amount is included in the 2009 directors'
fees total of £245,785 above.
Amounts paid in respect of professional consulting services are not included
above. The related party note (note 26) discloses the full amounts paid to
directors directly and to third parties, for directors' fees, consulting fees
and expenses.
7. Investment income
Year ended Year ended
31 March 2010 31 March 2009
Group Group
£ £
Interest on bank deposits 24,146 132,280
Interest on loan investments 662,845 393,801
_______ ______
686,991 526,081
8. Income tax expense
Group Group
Year ended Year ended
31 March 2010 31 March 2009
£ £
Taxation (credit) /charge (198,100) 198,100
Current tax reconciliation
(Loss) / profit for the year before taxation (1,982,823) 1,919,887
8. Income tax expense (continued)
Group Group
Year ended Year ended
31 March 2010 31 March 2009
£ £
(Loss) / profit for the year (555,190) 537,568
multiplied by standard
Rate of UK corporation tax 28%
Effects of:
Expenses not deductible for tax
purposes 16,624 2,609
Non taxable income - 11,474
Excess of capital allowance over (4,299)
depreciation (4,091)
Overseas loss / (profits) 7,581 (52,418)
Share of associate results 241,919 317,367
Utilisation of losses - (614,409)
Increase in potential tax credits 95,265 -
_______ _______
Tax (credit) / charge (198,100) 198,100
Potential UK tax credits available
multiplied by
standard rate of corporation tax
28% 217,296 122,031
No recognition has been made of the deferred tax asset in respect of the losses
shown above as the directors are of the opinion that this may not be realisable
in the foreseeable future.
9. Loss / earnings per share - including share of associates results
Loss per share (2009: earnings per share) has been calculated by dividing the
loss for the year after taxation including share of associates losses of
£863,997 (2009: £1,133,453) attributable to the equity holders of the parent
company
Unternehmensinformation / Kurzprofil:
Datum: 23.08.2010 - 13:59 Uhr
Sprache: Deutsch
News-ID 39885
Anzahl Zeichen: 0
contact information:
Town:
LONDON
Kategorie:
Business News
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"Toledo Mining Full Year Results for the Year Ended 31 March 2010"
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