African Eagle Resources plc : Audited Financial Results for year end 2012
(Thomson Reuters ONE) -
African Eagle Resources plc (the "Company") (AIM: AFE; AltX: AEA) today
announces its results and the publication of its 2012 Annual Report and
Financial Statements for the year ended 31 December 2012. This is being posted
to shareholders today and will be available on the Company's website shortly:
www.africaneagle.co.uk.
Chairman's Statement
2012 was a year of significant progress for the Company and the Dutwa project,
and in technical and commercial terms Dutwa has been significantly de-risked.
However, more recently in 2013 the Company has not been able to secure the
additional funding needed to advance its development programme in Tanzania as it
had planned. While the Company considers Dutwa to be a strong and competitive
nickel project, in the absence of further funding from the capital markets we
took the decision in Q1 2013 to suspend project activities and thereafter to
consider further funding requests from the Company's Tanzanian subsidiaries on a
case by case basis. Following this decision, the Company is now seeking to make
a partial or total sale of these assets. These are challenging times however,
and there can be no guarantee that any value can be achieved for these assets.
This Statement therefore covers both our achievements in the year and also
describes the Company's strategy in the light of the difficult situation I have
outlined above.
In July, 2012, Ambassador Paul Rupia joined the Board as a Non-Executive
Director. Paul is a former head of the Tanzanian Civil Service. He has brought
to the Board an intimate knowledge of Tanzania, and his advice has been
invaluable to all of us in African Eagle.
Test work performed on the Dutwa laterite ore identified the very favourable
impact of ore beneficiation on the metallurgical performance of Dutwa. The
results of the additional work, described in more detail in the Operations
Overview, improved the overall viability of Dutwa and defined an opportunity for
further exploration relating to potential for sulphides hosting nickel and
platinum group elements below the laterite resource. Despite this strong
progress, events subsequent to the year-end in capital markets, the mining
industry in general and the nickel sector in particular have meant that the
Company is unable to continue to fund the completion of the Dutwa Bankable
Feasibility Study (the "BFS") as planned even though considerable efforts have
been expended to engage a strategic investor which would be able to take the
project forward.
The Company raised £12,651,399 in new capital in 2012. A subscription by the
IFC closed in the first quarter and in the second quarter further capital was
received from a placement and open offer. While substantial, the Company
recognised that the capital raised was not sufficient to enable the Company to
complete the BFS as planned. However, and with the resources available very
good progress was achieved on progressing the BFS with de-risking occurring in
many key areas including metallurgy, logistics and reagent supply and social and
environmental. The remaining work to complete the BFS essentially comprises
large scale continuous pilot plant test work and detailed engineering sufficient
for capital and operating cost estimates with a nominal accuracy of 15%, and the
further development of commercial contract negotiations relating to logistics,
major equipment items and other key services.
Given that the cost of this further work is beyond the financial resources of
the Company, and that the current state of financial markets is such that the
Company cannot raise new funds to cover this activity, the Company retained
Cutfield Freeman & Co to assist in the search for a strategic partner to take a
majority position in the Dutwa project in return for funding the remainder of
the BFS and underwriting eventual project development financing arrangements. In
the currently depressed market and with the outlook for commodities we have not
been able to secure a strategic partner on this basis.
In April 2013, the Company announced that the Tanzanian Revenue Authority
("TRA") had undertaken a review of the previous tax filings of one of the
Company's Tanzanian subsidiaries. The Tanzanian subsidiary and its advisers have
recently been in further discussions with the TRA and have received
communication from the TRA outlining its initial view of the liability for the
period up to 31 December 2012. In the consolidated financial statements the
Company has fully provided its own estimate, approximately £600,000, to support
the potential liability of the subsidiary concerned. Whilst no formal tax demand
from the TRA has yet been received, the Directors of the Tanzanian subsidiary,
advised by the Company and its tax and legal advisers, will continue to discuss
the matter with the TRA in the hope that this matter can be brought to a
satisfactory close as expeditiously as possible. However, neither the Tanzanian
subsidiary nor the Company can forecast the level of any potential tax
assessments or tax liabilities with certainty and there can be no assurance that
the Tanzanian subsidiary will not be subject to a materially different value in
any assessment it may receive.
Following a review of the Company's strategy in early 2013, taking into account
the factors noted above, your Directors determined that the Company needed to
take immediate action to preserve the Company's cash position, and take the
steps necessary to retain the main licences related to the Company's nickel
assets, but that it could no longer provide funding to its Tanzanian subsidiary,
Red Hill Nickel Limited ("RHN"), the main operating entity for the Dutwa
project. The Board decided to progress three initiatives:
* To continue to seek a purchaser for the Dutwa assets, with the consideration
being in cash and/or a carried interest;
* To recover any value possible from the Miyabi JV and other non-Dutwa assets
via a sale of our interest for cash or equity; and
* To maintain the AIM-listed plc with a view to seeking new investment
opportunities in the natural resources and related sectors, thereby
retaining a possibility of securing some upside for shareholders.
An alternative, formally liquidating the Tanzanian assets and proposing to
return any residual cash in the Company to shareholders via a Members' Voluntary
Liquidation was rejected for two reasons. Firstly the residual cash in the plc
after closing out all business issues and the cost of liquidation was considered
unlikely to be significant in terms of cash per share. Secondly, the Board's
opinion following discussions with major shareholders was that a transaction
involving injection of new assets into the Company, whilst not quantifiable now,
could, if achieved, potentially offer greater value for shareholders.
The outcome remains uncertain in the absence of firm offers for the Company's
Tanzanian assets, and Directors are unable to estimate with any certainty
whether assets will be sold as a whole or in part, the timing of any sale, or
quantify the proceeds that may be receivable. In the absence of an orderly
realisation, further adjustments might have to be made and these could include,
but may not be limited to, the write down of assets and the inclusion of further
liabilities. The extent of such write-downs and liabilities might be higher if
the assets and liabilities had to be realised in a short timescale. For this
reason the Board has decided to prepare the consolidated financial statements on
a basis other than that of a going concern. The Board, however, continues with
its efforts to secure value from its investments in Tanzania, and to reduce
costs to an absolute minimum whilst doing so.
Finally, I would like to take this opportunity to express my and my fellow
Directors' appreciation for the hard work and dedication of our staff in
Tanzania and in London. It is very disappointing that, despite their efforts and
their talent, current market conditions mean that the Company may be unable to
see their plans fulfilled.
Chris Pointon
Chairman
12 June 2013
Operations Overview
Nickel Assets - Dutwa
2012 commenced with significant optimism regarding the development of the
Company's flagship nickel project in Tanzania - Dutwa. It concluded with the
confirmation that Dutwa is a world-class nickel laterite project with properties
and potential at the leading edge of the nickel industry. Significant progress
was achieved with the development of Dutwa and in reorganising, stabilising and
focussing the Company in general. A small team of dedicated staff worked
diligently and very efficiently throughout the year to achieve significant
results.
Despite the challenges of the nickel market and its poor commodity price
performance the mining industry overall remained robust in 2012. In the first
month of the year the Company was able to complete the development of its BFS
team with the appointment of Aidan Schoonbee as Project Director. Aidan brought
to the Company a depth of experience in project management and as an experienced
metallurgist was well positioned to join our project metallurgist Dr. Chad
Czerny in the BFS development. Concurrent with Aidan's appointment the Company
engaged the services of Lycopodium Minerals as the BFS engineer. This
appointment completed the core consulting BFS team and enabled a strong group to
be established to complete the BFS and the associated environmental and social
impact assessment (the "ESIA") being managed by Citrus Partners. Working
together the project team embarked on the performance of all requisite studies
and the preparation of all the documentation required to confirm the economic
viability of the project and to apply for the mining licence required for the
development of Dutwa.
Concurrent with the commencement of the detailed activities of the BFS the
Tanzanian based exploration team were completing the diamond drilling for the
resource upgrade on the Dutwa hills. Thereafter, the drilling for the 60t of
metallurgical core samples for use in the BFS pilot plant was performed.
As a result of the exploration drilling performed during 2012, under direction
of Exploration Manager Mark Davey, Snowden Mining Consultants of Perth Australia
("Snowden") prepared updated resource estimates with the gross Dutwa resources
expanding by 13% to 107Mt reported above a 0.55% Ni cut off grade while the
Indicated resource increased 108% to 101Mt with a total metal content at almost
1Mt of nickel. The resource definition confirmed the unusually favourable
mineralogy of Dutwa defining the resource as having a high silica content at
~65% (silica is inert to acid) and only ~12% iron oxides.
The metallurgical performance of this favourable resource mineralogy was subject
to extensive test work throughout the year as a part of the BFS development. A
significant programme of beneficiation batch test work performed in laboratories
in Perth, Australia, demonstrated that the majority of the ores particularly the
"ferruginous siliceous" respond well to straightforward low energy wet scrubbing
and screening at a coarse grain size which rejects a significant proportion of
the silica while retaining the majority (>70%) of the nickel. Indeed over 50%
of the run-of-mine ore feed is typically rejected by this scrubbing resulting in
a plant throughput rate less than half that originally anticipated, for the same
nickel output. For "ferruginous siliceous" ores the run-of-mine nickel grade
(~0.9-1% Ni) is increased to between 1.7 and 1.8% Ni typically. Moreover, the
scrubbing results in partial removal of some detrimental, acid consuming
elements. The result of which is that the resultant ore feed to the
hydrometallurgical process plant performs more favourably in the leach
resulting in a lower acid (and other reagent) demand compared to the run-of-
mine ore. The impact of this on the project overall is a reduction in the
relative capital cost of the project per unit of nickel output (lower throughput
rate results in a smaller plant) and a reduction in operating cost (less reagent
consumption due to the lower acid demand and lesser levels of impurities
requiring removal) with both the requirements for sulphur importation and
limestone significantly reduced.
The reduction in the requirements for these key reagents in turn reduces the
demand for transportation into the project. Transportation was also the subject
of significant evaluation during the year. Specialist rail engineers with
significant experience in the transport of large quantities of coal on the
narrow gauge systems in eastern Australia (Lycopodium Rail) reviewed the
existing rail systems in Kenya and Tanzania. Kenya is a viable option for
transport in conjunction with barge transport on Lake Victoria. The project is
located within 25 km of the lake and an existing lake port in Kenya at Kisumu is
connected directly by rail to the port of Mombasa. While the Kenyan rail system
offers opportunity it is the Tanzanian system that presently provides the best
transport option for Dutwa.
The Tanzanian Central Line connects the main Tanzanian port of Dar es Salaam to
Mwanza and passes within just 70km of the Dutwa project. In its current
condition engineers consider that the Central Line has the capacity to support
the project with only limited work. The Dutwa project would require transport
of up to 1.25Mt per annum; importantly, the existing spare capacity is estimated
to be substantially in excess of that. The World Bank is working with the
government of Tanzania to expand the capacity of the Central Line over a
significant portion of its length toward Dutwa to a level of capacity well
beyond the requirements of the project. The World Bank has indicated that the
proposed upgrade project is scheduled for completion before Dutwa would be
brought into operation. What is currently missing from the existing Central
Line is reliable rolling stock. The planned World Bank project would provide a
certain rolling stock fleet but the Company determined that this capacity was
not sufficient to improve the confidence in the project and sought opportunities
with the government to develop a framework whereby privately owned and run
trains could be operated on the public infrastructure. To this end the Company
developed a Memorandum of Understanding ("MoU") with the Tanzanian Ministry of
Transport and its associated rail and other port agencies. The MoU was
developed in 2012 and executed in 2013, albeit no further development will be
undertaken by the Company.
Employing data from the metallurgical results described above Snowden prepared
early mine plans from the resource block models including mine production
schedules for use in cost planning and economic analyses. Such schedules were
developed on a block-by-block basis to a level of detail usually only performed
during development stages beyond normal BFS work. This activity significantly
improves the forecast performance of the project overall.
Reagent studies also advanced significantly during the year. A large high
quality resource of limestone offering many years of life is currently in
production close to the coast and immediately adjacent to a spur of the Central
Line. The central rail system enables this to be a potentially reliable source
for the limestone that the project requires. Additional resources closer to the
Dutwa project in the nearby Shinyanga region have also been investigated as a
means to reduce the transportation requirements. A sulphur market study
identified that significant raw sulphur production will commence in the Middle
East in the next year or two as by-product from sour gas projects already under
development. Such production would provide multiples of the quantity required
to support the operation of a sulphuric acid-based atmospheric leach plant at
Dutwa. The UAE sulphur source is well situated geographically for supply to the
port at Dar es Salaam thereby minimising transport costs.
All of these elements individually provide significant benefits to Dutwa, but
the resulting combination is much greater than the simple sum of the parts. The
quality of the Dutwa project in the nickel laterite industry has been greatly
enhanced by the work performed to date on the BFS. Despite the significant
reduction in the price of nickel compounded by an increase in transport and
reagent pricing relative to the Scoping Study, the BFS optimisation has resulted
in the mitigation of numerous adverse market conditions. Internal Company-
developed operating cost estimates taking into account all of these BFS
developments, confirmed that Dutwa will be a low cost laterite producer and
would be cash positive under all currently forecast floor prices for nickel.
Metallurgical continuous pilot plant test work and the resultant definitive BFS
engineering planned for performance in 2013 has ceased due to the lack of
available funding required to continue.
In conjunction with the BFS there have been extensive development activities
related to the baseline studies for the ESIA. All standard environmental
baseline activities have been completed with greater than a year of data
accumulated and assessed. Data for more than one rainy season has been obtained
ensuring a robust and world class ESIA basis. Social activities progressed
significantly concurrently with the environmental work. Social studies included
health, socio-economic and land ownership studies combined with early skills
assessments directed toward predicting the available labour pool and training
programmes. All ESIA work was performed to IFC performance standard 2012 and
activities were reviewed frequently by the IFC.
The tight capital markets and the long understood requirement that Dutwa would
need a strategic partner to ensure effective development resulted in the Company
appointing Cutfield Freeman and Co Ltd. as financial adviser for the development
of Dutwa. Significant efforts were directed toward discussions with the large
nickel producers and other potential parties. Although several large companies
expressed interest in Dutwa recognising its superior mineralogy and strategic
location, the global challenges currently being faced by the wider nickel
industry and commodities generally has meant that no potential strategic
partners have committed to the project.
In addition to the work performed on the known laterite resource a review of
work performed previously identified the potential for nickel sulphide and PGE
mineralisation existing below the lateritic caps of the two main hills. The data
from drill holes conducted over the many years of work at Dutwa was re-evaluated
and nickel sulphide mineralisation with promising nickel and PGE grades was
identified in a number of the short tails of holes drilled for the purpose of
the defining the laterite resource. Exploration of the sulphide potential at
Dutwa was identified in early 2013 as a key activity to be performed concurrent
with the strategic partner search for the laterite. Unfortunately, the appetite
of capital markets to support earlier stage exploration projects is very subdued
at present and these activities have not occurred.
Nickel Assets - Zanzui
Zanzui is cluster of licences comprising a large (140km2) area about 50km south
of Dutwa. The main area of mineralisation is related to in a mafic/ultramafic
ring complex of about 75km2. Laterite resource drilling performed during 2008
and 2010 was provided to Snowden, which developed a maiden resource for Zanzui
of 27Mt at 0.81% nickel and 0.06% cobalt. The mineralisation at Zanzui is
considered similar to that of Wamangola, the most favourable hill at Dutwa, and
is potential feed to the Dutwa project during the later stages of its operation
life.
Like Dutwa the potential for nickel and PGE sulphide mineralisation was also
identified at Zanzui. Revision of work, including drilling, by the United
Nations Development Programme and the Company confirmed the presence of sulphide
mineralisation with values of Ni and PGEs. Perhaps more exciting has been the
re-appraisal of early drill holes by the Company at Dutwa, where nickel
sulphides with grades in excess of 0.5% Ni have been observed in reverse
circulation drill cuttings. Although the intersections are few, they are at
shallow depth (less than 100m vertical) and appear to conform to a zone within
the ultramafic complex. Exploration programmes for Zanzui have been developed
but their execution is dependent upon the availability of funding.
Gold Assets - Tanzania
Miyabi - The Company continued its Joint Venture with Rift Valley Resources of
Perth WA on its Miyabi gold project, also in Tanzania, with Rift Valley
Resources (RVR), an ASX listed Australian company, whereby RVR could earn a 50%
interest in the project by continuing exploration, and a further 25% by
completing a Bankable Feasibility Study. In May 2013, the Company was able to
confirm that the 50% threshold had been achieved. During 2012 RVR completed more
than 11,000m of drilling at Miyabi identifying two new mineralised zones beyond
the extents of the current resource. Some encouraging intersections were
reported including 18m at 18.3g/t gold and 12m at 21.6g/t gold.
Igurubi - a prior pending JV agreement established in 2010 did not close as
certain conditions were not achieved in the time period established. The
Company commenced the search for an alternative investor and/or earn-in partner.
Little work was performed at Igurubi during 2012.
Msasa - Little work was performed at Msasa during 2012 and the Company commenced
efforts to search for an investor and/or earn-in partner for Msasa.
Copper Assets - Zambia
The Company's copper assets in Zambia were sold to Elephant Copper in July 2012
and the sale closed in November. Despite challenging market conditions the
Company was able to identify and foster good interest in the Zambian copper
assets. As a result of the transaction the Company holds a 21% interest in
Elephant Copper, a private company managed from South Africa.
We believe that inherent value remains in the Company's assets in Tanzania and
in particular the Dutwa project and the intellectual property that has been
developed for it to date under the BFS. Accordingly the Company continues to
examine strategies to realise this value. However, due to the lack of firm
offers, and the minimal cash reserves the Company has taken a decision to write
down the value of these assets to nil with the exception of our listed
investment in Kibo Mining Plc.
Trevor Moss
Director and Chief Executive Officer
12 June 2013
Financial and Risk Review
As set out in the Directors' Report and note 2(a) to the financial statements
the Company has adopted the break up basis of accounting for the year ended 31
December 2012 for the consolidated financial statements. As a consequence the
loss before taxation attributable to owners of the parent of £28,935,734 (2011:
£2,960,124) is significantly impacted by asset impairment charges of £25,366,967
(2011: £1,640,836) reflecting the Directors' evaluation of assets' realisable
value. Employee benefits and other expenses were £1,701,750 higher in 2012 than
2011 due principally to additional employees and Directors during the year. The
loss per share increased from 0.6 pence in 2011 to 4.7 pence in 2012.
Statement of financial position
On a break up basis cash and other liquid assets have been measured at fair
value at 31 December 2012. Capitalised costs and other assets where no value is
expected to be recovered have been written off. Liabilities include
management's best estimate of amounts due to the Tanzanian Revenue Authorities
as set out in note 29. On this basis net assets declined to £1,696,562 in 2012
compared to £18,953,784 in 2011.
Cash flow
Net cash increased over the year to £3,645,458 at 31 December 2012 compared to
£2,285,347 at 31 December 2011. £12,202,857 after expenses was raised by share
issuance during the year (2011: 3,561,325), of which £7,994,499 (2011:
£3,445,546) was used in investing activities, principally in relation to
preparing for the Dutwa Bankable Feasibility Study, and £2,837,194 (2011:
£999,651) in operations.
Key performance indicators
The Board of African Eagle monitors relevant KPIs on a monthly basis as follows:
Financial KPIs
* Total expenditure burn rates;
* Monthly cash flow budget comparisons
* Annual budget and reforecast reviews
Non-financial KPIs
Health and safety - number of reported incidents. There were no serious
incidents reported during the year;
Risk review
The risks inherent on the break up basis of accounting at 31 December 2012 have
been reviewed by the Board. The principal risks are detailed below.
Liquidity risk
Liquidity risk is the risk of running out of working and investment capital.
Such risk is further discussed in the Chairman's Statement and Operations
Overview on pages 2 to 4. Key sensitivities are discussed in the basis of
preparation note 2(a).
Taxation and other legislation
The Tanzanian Revenue Authority ("TRA") had undertaken a review of the previous
tax filings of one of the Company's Tanzanian subsidiaries. The extent and risks
relating thereto are set out in note 29 in the accompanying financial
statements.
Licence risk
Permits and other authorisations and/or such concessions, rights, licences,
permits and other authorisations may be suspended, terminated or revoked prior
to their expiration in light of the company preparing accounts on a break up
basis, and limiting the funding of its Tanzanian subsidiaries.
Trevor Moss
Chief Executive Officer
12 June 2013
Report of the Directors
To the members of African Eagle Resources plc, Company number 3912362
The Directors present their report together with the audited consolidated
financial statements for the year ended 31 December 2012.
Business review
A review of the Group's trading during the year and future developments is
contained in the Chairman's Statement and the Operations Overview as set out on
pages 2 to 4.
The Group's financial and non-financial indicators are set out in the Financial
and Risk Review on page 5. There was a Group loss after taxation for the year of
£28,935,734 (2011: £2,960,124). The Directors do not recommend the payment of a
dividend.
Going Concern - consolidated financial statements
Financial statements are normally prepared on a going concern basis unless there
is a reason to depart from this basis. The Company announced on 15 May 2013,
that the Directors were taking immediate steps to minimise costs and preserve
the Company's cash position, and were undertaking a restructuring in order to
examine strategies for realising value from the Group's assets. Furthermore the
Company is currently exploring options, as set out in the Chairman's Statement,
to dispose of assets as a means to provide funding for the restructured group
which, if successful, would result in African Eagle Resources plc being
maintained as an AIM-listed plc with a view to an opportunistic transaction in
the next 6-12 months. In the event that no transaction is concluded or
additional funding secured then the Company would be liquidated.
Given both the lack of availability of funding and a viable restructuring plan,
capable of execution at the present time, the Directors consider it
inappropriate to prepare the consolidated financial statements on a going
concern basis, and therefore the Directors have prepared these Accounts on a
break-up basis as set out in note 2.
The effect of preparing the consolidated financial statements on a break-up
basis is that all group assets and liabilities have been restated to their
estimated recoverable value as at 31 December 2012:
* cash and other liquid assets have been measured at fair value at 31 December
2012;
* capitalised costs and other assets where no value is expected to be
recovered have been written off; and
* liabilities are only recognised if an obligation exists at the balance sheet
date.
Going Concern - Parent Company
The Directors consider that the Company has adequate financial resources to
continue in operational existence, subject to satisfactory conclusion to some
inherent uncertainties, including the ability of the Company to secure a
strategic partner or generate funds through the sale of subsidiary companies
assets. These matters represent material uncertainties that may cast significant
doubt on the Company's ability to continue as a going concern. Nonetheless, the
Directors consider it is appropriate to continue to adopt the going concern
basis of accounting in preparing the Parent Company financial statements, as set
out in note 2(a).
Directors
The Directors in office during the year and current at the date of this report
are listed below. The interests of the Directors in the shares of the Company at
31 December 2012 or the date of resignation, and 31 December 2011 were as
follows:
-------------------------------------------------------------------------------
As at 31 December As at 31 December
2012 2011
Ordinary Shares Options Ordinary Options
Shares
-------------------------------------------------------------------------------
Chris 26/01/2012 750,000 150,000 - -
Pointon (Appointed)
Trevor Moss 01/12/2011 1,187,500 6,000,000 - -
(Appointed)
David 02/07/2012 - 3,000,000 - -
Newbold (Appointed)
31/03/2013(Resigned)
Don Newport 26/01/2012 - - - -
(Appointed)
Julian 28/04/2011 78,530,761 - 46,030,761 -
McIntyre (Appointed)
Paul Rupia 27/07/2012 - 150,000 - -
(Appointed)
Robert 20/06/2012 - 262,000 - 262,000
McLearon (Appointed)
02/07/2012 (Resigned)
Mark Parker 24/04/2012 (Resigned) 4,563,967 3,676,328 4,563,967 3,676,328
Christopher 24/04/2012 (Resigned) 1,047,165 3,504,618 1,047,165 3,504,618
Davies
Andrew 01/12/2011 182,500 3,000,000 - 3,000,000
Robertson (Appointed)
07/06/2012 (Resigned)
Euan 24/04/2012 (Resigned) 1,193,333 2,205,824 1,193,333 2,205,824
Worthington
Geoffrey 04/04/2012 (Resigned) 975,967 1,637,230 975,967 1,637,230
Cooper
Bevan 25/11/2011 (Resigned) 260,833 1,931,000
Metcalf
-------------------------------------------------------------------------------
Total 88,431,193 23,586,000 54,072,026 16,217,000
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Substantial shareholdings
As at 31 May 2013, the only holdings of 3% or more in the issued share capital
are:
-------------------------------------------------------------------------------
Shares in the Company Approximate % of the
Company's issued share
capital(1)
-------------------------------------------------------------------------------
Allard Services Ltd 78,530,761 11.32%
International Finance
Corporation 78,009,570 11.24%
Anglo Pacific Group Plc 30,550,000 4.40%
Barclays Wealth 29,916,569 4.31%
TD Waterhouse (Europe) Ltd 28,421,364 4.10%
Vestra Wealth LLP 27,225,678 3.92%
Salkeld Investments Ltd 25,675,000 3.70%
Intervantage Investments 25,000,000 3.60%
Hargreaves Lansdown Asset
Management 22,479,564 3.24%
Halifax Share Dealing
Services 21,378,327 3.08%
-------------------------------------------------------------------------------
(1) Based on 694,014,407 shares issued and outstanding at 31 May 2013
Directors' remuneration
Directors' emoluments are shown in note 8.
Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare financial
statements in accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union ("EU"). Under company law the
directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and the
Company and of the profit or loss for the Group for that period. In preparing
these financial statements, the Directors are required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgments and estimates that are reasonable and prudent; and
* Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business, as
noted above under Going Concern.
The Directors are responsible for keeping adequate accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
In so far as each of the Directors is aware:
* There is no relevant audit information of which the Company's auditors are
unaware; and
* The Directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Events after Balance Sheet date
Refer to note 27 for details of the events after the balance sheet date.
Payment policy and practice
It is the Group's normal practice to settle the terms of payment when agreeing
the terms of a transaction, to ensure that suppliers are aware of those terms,
and to abide by them. The Company had no trade payables at the year end.
Financial risk management objectives and policies
The Group's financial risk management objectives and policies are set out in the
Financial and Risk Review on page 5 and comply with the disclosure made in note
23 relating to the disclosure required by IFRS 7 Financial Instruments.
Auditors
PricewaterhouseCoopers LLP replaced Grant Thornton UK LLP as auditors during the
year. PricewaterhouseCoopers LLP offer themselves for reappointment as auditors
in accordance with Section 489 (4) of the Companies Act 2006.
On Behalf of the Board
Trevor Moss
Director
12 June 2013
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AFRICAN EAGLE RESOURCES PLC
We have audited the consolidated financial statements of African Eagle Resources
plc for the year ended 31 December 2012 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the Consolidated Cash
Flow Statement and the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on
page 6, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the
Company's members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the group's circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the
Annual Report and Accounts to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the consolidated financial statements:
* give a true and fair view of the state of the group's affairs as at 31
December 2012 and of its loss and cash flows for the year then ended;
* have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
* have been prepared in accordance with the requirements of the Companies Act
2006.
Emphasis of matter - Basis of preparation
In forming our opinion on the consolidated financial statements, which is not
modified, we have considered the adequacy of the disclosures made in note 2 to
the financial statements concerning the going concern basis of accounting. Due
to the adverse position in relation to the funding of African Eagle Resources
plc, which has prevented the Company completing a bankable feasibility study for
the Dutwa project, there is significant uncertainty over the future of the
group. For this reason the directors consider that the consolidated financial
statements should be prepared on a basis other than that of a going concern. As
explained in note 2, adjustments have been made in these consolidated financial
statements as a result of preparing them on this basis.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial
year for which the consolidated financial statements are prepared is consistent
with the group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for our
audit.
Other matter
We have reported separately on the Parent company financial statements of
African Eagle Resources plc for the year ended 31 December 2012. That report
includes an emphasis of matter.
Alison Baker (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
12 June 2013
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AFRICAN EAGLE RESOURCES PLC
We have audited the Parent Company financial statements of African Eagle
Resources plc for the year ended 31 December 2012 which comprise the Company
Statement of Financial Position, the Company Statement of Changes in Equity, the
Company Cash Flow Statement and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union and as applied in accordance with the Companies Act 2006.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on
page 6, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the
Company's members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the
Annual Report and Accounts to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the Parent Company financial statements:
* give a true and fair view of the state of the Company's affairs as at 31
December 2012 and of its cash flows for the year then ended;
* have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the Companies Act 2006; and
* have been prepared in accordance with the requirements of the Companies Act
2006.
Emphasis of matter - going concern
In forming our opinion on the Parent Company financial statements, which is not
modified, we have considered the adequacy of the disclosures made in Note 2 to
the financial statements concerning the Company's ability to continue as a going
concern. The uncertainties over the future of the Company, including the ability
of the Company to secure a strategic partner or generate funds through the sale
of subsidiary companies' assets, indicate the existence of a material
uncertainty that may cast significant doubt about the Company's ability to
continue as a going concern. The financial statements do not include the
adjustments that would result if the Company was unable to continue as a going
concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial
year for which the Parent Company financial statements are prepared is
consistent with the Parent Company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the Company, or returns
adequate for our audit have not been received from branches not visited by
us; or
* the Parent Company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for our
audit.
Other matter
We have reported separately on the consolidated financial statements of African
Eagle Resources plc for the year ended 31 December 2012. That report includes an
emphasis of matter.
Alison Baker (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
12 June 2013
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2012
-------------------------------------------------------------------------------
Year to Year to
31 December 31 December
2012 2011
Note £ £
-------------------------------------------------------------------------------
Employee benefits expense 4 (1,649,651) (677,784)
Impairment of assets 5 (25,366,967) (1,640,836)
Other expenses 6 (1,549,362) (819,479)
Depreciation expense 12 (46,670) (30,511)
Profit on disposal of assets held for sale 14 327,132 -
Share of loss in associate during the year 15 (11,806) (9,116)
Payroll levies related to prior years 29 (601,754) -
-------------------------------------------------------------------------------
Operating loss (28,899,078) (3,177,726)
Finance income:
Bank interest receivable 108,464 10,117
Foreign exchange (loss)/gain on translation (145,120) 207,485
-------------------------------------------------------------------------------
Loss before tax (28,935,734) (2,960,124)
Income tax expense 9 - -
-------------------------------------------------------------------------------
Loss attributable to owners of the parent (28,935,734) (2,960,124)
-------------------------------------------------------------------------------
Other comprehensive (loss):
Exchange differences on translation of foreign (799,667) (233,131)
operations
Available for sale investments fair value 13 (40,000) (170,400)
adjustment
-------------------------------------------------------------------------------
Other comprehensive (loss) for the year (839,667) (403,531)
-------------------------------------------------------------------------------
Total comprehensive loss attributable to owners (29,775,401) (3,363,655)
of the parent
-------------------------------------------------------------------------------
Loss per share:
Basic and diluted loss per share from total and 10 (4.7p) (0.7p)
continuing operations
-------------------------------------------------------------------------------
Headline loss per share from total and 10 (0.6p) (0.3p)
continuing operations
-------------------------------------------------------------------------------
At 31 December 2012 all operations are continuing, subject to post balance sheet
events set out in note 27. The Company has elected to take the exemption under
section 408 of the Companies Act 2006 not to present the Parent Company Income
Statement and Statement of Comprehensive Income.
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated Statement of Financial Position
For the year ended 31 December 2012
-----------------------------------------------------------------------------
31 December 31 December
2012 2011
Note £ £
-----------------------------------------------------------------------------
Assets
Deferred exploration costs 11 - 11,126,684
Property, plant and equipment 12 - 81,259
Available for sale investments 13 68,000 160,000
Exploration assets held for sale 14 - 2,465,518
Investment in associates 15 - 2,677,921
Investment in joint ventures 17 - 32,993
Other receivables - Short term 18a 241,233 509,556
Cash and cash equivalents 19 3,645,458 2,285,347
-----------------------------------------------------------------------------
Total assets 3,954,691 19,339,278
-----------------------------------------------------------------------------
Liabilities
Current liabilities
Payroll related levies related to prior years 29 (601,754) -
Other payables 20 (1,656,375) (385,494)
-----------------------------------------------------------------------------
Total liabilities (2,258,129) (385,494)
-----------------------------------------------------------------------------
Net assets 1,696,562 18,953,784
-----------------------------------------------------------------------------
Equity
Equity attributable to owners of the parent:
Share capital 21 6,940,145 4,095,862
Share premium account 36,559,743 27,201,169
Merger reserve 405,723 705,723
Available for sale revaluation reserve - 40,000
Foreign currency reserve (989,933) (190,266)
Retained losses (41,219,116) (12,898,704)
-----------------------------------------------------------------------------
Total equity 1,696,562 18,953,784
-----------------------------------------------------------------------------
The accompanying notes form an integral part of these consolidated financial
statements.
The financial statements were approved by the Board of Directors on 12 June
2013.
Trevor Moss
Director
12 June 2013
Company Statement of Financial Position
For the year ended 31 December 2012
------------------------------------------------------------------------------
Note 31 December 31 December
2012 2011
£ £
------------------------------------------------------------------------------
Assets
Property , plant and equipment 12 - 2,372
Available for sale investments 13 68,000 160,000
Investments in subsidiaries - 79,857
Other receivables - Short term 18a 77,018 132,563
Other receivables - Long term 18b - 23,206,053
Cash and cash equivalents 19 3,590,516 2,025,646
------------------------------------------------------------------------------
Total assets 3,735,534 25,606,491
------------------------------------------------------------------------------
Liabilities
Current liabilities
Other payables 20 (547,889) (151,569)
------------------------------------------------------------------------------
Total liabilities (547,889) (151,569)
------------------------------------------------------------------------------
Net assets 3,187,645 25,454,922
------------------------------------------------------------------------------
Equity
Equity attributable to equity holders of parent
Share capital 21 6,940,145 4,095,862
Share premium account 36,559,743 27,201,169
Available for sale revaluation reserve - 40,000
Retained losses (40,312,243) (5,882,109)
------------------------------------------------------------------------------
Total equity 3,187,645 25,454,922
------------------------------------------------------------------------------
The accompanying notes form an integral part of these Company financial
statements.
The financial statements were approved by the Board of Directors on 12 June
2013.
Trevor Moss
Director
12 June 2013
Consolidated Statement of Changes in Equity
For the year ended 31 December 2012
----------------------------------------------------------------------------------------------
Share Share Merger Available Foreign Retained Total
Capital premium Reserve for sale currency Losses Equity
account revaluation reserve
reserve
£ £ £ £ £ £ £
----------------------------------------------------------------------------------------------
Balance at 1 3,847,622 23,888,084 705,723 210,400 42,865 (10,220,415) 18,474,279
January 2011
Loss for year - - - - - (2,960,124) (2,960,124)
Other
comprehensive
income/(loss):
Exchange - - - - (233,131) - (233,131)
differences on
translation of
foreign
operations
Available for - - - (170,400) - - (170,400)
sale
investments -
fair value
adjustment
----------------------------------------------------------------------------------------------
Total - - - (170,400) (233,131) (2,960,124) (3,363,655)
comprehensive
loss for the
year
----------------------------------------------------------------------------------------------
Transactions
with equity
owners for
2011:
Issue of share 248,240 3,512,720 - - - - 3,760,960
capital
Share issue - (199,635) - - - - (199,635)
costs
Share-based - - - - - 281,835 281,835
payments
----------------------------------------------------------------------------------------------
Total 248,240 3,313,085 - - - 281,835 3,843,160
transactions
with equity
owners
----------------------------------------------------------------------------------------------
Balance at 31 4,095,862 27,201,169 705,723 40,000 (190,266) (12,898,704) 18,953,784
December 2011
Loss for year - - - - - (28,935,734) (28,935,734)
Other
comprehensive
income/(loss):
Exchange - - - - (799,667) - (799,667)
differences on
translation of
foreign
operations
Available for - - - (40,000) - - (40,000)
sale
investments -
fair value
adjustment
Transfer - - (300,000) - - 300,000 -
merger reserve
to profit and
loss
-------------------------------------------------------
Unternehmensinformation / Kurzprofil:
Datum: 13.06.2013 - 08:00 Uhr
Sprache: Deutsch
News-ID 269291
Anzahl Zeichen: 65615
contact information:
Town:
London,
Kategorie:
Business News
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