REG - Condor Gold PLC - CONDOR FILES FINAL PROSPECTUS <Origin Href="QuoteRef">CNDR.L</Origin> - Part 2
27/12/2017 07:08
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chemicals that are harmful to the environment to separate the precious metals
from the ore. There can be no assurance that the Company will not be subject
to environmental liabilities resulting from such operations in the future,
which could have a material adverse impact on the Company. In addition,
artisanal work practices are often unsafe and accidents and/or incidents may
occur on the Company's property, and there is an added reputational risk that
third parties may wish to link the activities of the artisanal miners to that
of the Company in the event of accidents or incidents, which could have a
material adverse impact on the Company.
The goodwill and cooperation from the communities in which the Company
operates are also required in order for the Company to operate. State entities
such as MEM and MARENA will not approve exploration or production activities
without the agreement and acceptance of local communities and stakeholders.
As disclosed in the PFS, it is envisaged that approximately 300 dwellings are
required to be relocated as part of the development of 800 hectares of the La
India Project's mine site infrastructure. The extraction of minerals from the
open pit at the La India Project requires the relocation of these dwellings
over the life of the mine. The Nicaraguan Government will require the
inhabitants of the dwellings to agree to the terms of the resettlement as part
of the permitting process.
The Company's negotiation of the terms of resettlement with the inhabitants of
the dwellings is subject to various risks, including risks related to
community opposition to such resettlement. If the Company is delayed in
negotiating the final terms of resettlement, the Company's receipt of the
Environmental Permit will be delayed. If the Company is unable to reach
agreements with such inhabitants at any point, the Company expects that it
will pursue an underground option or a smaller open pit for the Project. If
the Company is delayed or unable to negotiate the terms of resettlement with
the inhabitants, the business and financial condition of the Company may be
materially affected.
Difficulty in Enforcement of Judgements
All of the subsidiaries of the Company and the majority of its assets are
located outside of Canada. Accordingly, it may be difficult for investors to
enforce within Canada any judgments obtained against the Company, including
judgments predicated upon the civil liability provisions of applicable
Canadian securities laws. Consequently, investors may be effectively prevented
from pursuing remedies against the Company under Canadian securities laws or
otherwise.
________________________________________________________________________________
A&R NSR Agreement
The Company's subsidiary, La India Gold S.A. ("La India SA"), and
International Royalty Company ("IRC"), a subsidiary of Royal Gold, Inc., are
parties to an amended and restated net smelter return royalty dated effective
September 21, 2016 (the "A&R NSR Agreement"). Under the A&R NSR Agreement, La
India SA and IRC agreed to amend and restate the terms and conditions of an
existing royalty agreement that had been under dispute in Canada and
Nicaragua. As a result, La India SA confirmed that it had granted a 3% NSR in
favour IRC on the NSR Property, as calculated in accordance with the A&R NSR
Agreement. Under the A&R NSR Agreement, La India SA also granted a number of
rights and provided certain covenants regarding its future operations to IRC,
as further described below.
La India SA has granted IRC a right of first refusal over any new royalty or
other participation rights in respect of any minerals or profits from the NSR
Property, other than as may be required to be granted to a governmental
authority in Nicaragua. In addition, if La India SA is entitled to acquire
from a third party any royalty or other participation in respect of minerals
or profits from the NSR Property (a "Third Party Royalty") and La India SA
does not intend to acquire such Third Party Royalty, La India SA shall,
subject to confidentiality or other legal requirements, (i) notify IRC of all
such Third Party Royalties and, (ii) at IRC's request within 10 days of such
notification, assign to IRC its right to acquire such Third Party Royalty.
La India SA has also agreed with IRC to do all things and make all payments
necessary or appropriate to maintain the right, title and interest of La India
SA and IRC in the NSR Property and to maintain the NSR Property in good
standing. Further, La India SA has agreed to not abandon or surrender or allow
to lapse or expire any part of any remaining mining claims or leases relating
to or comprising the NSR Property without the prior consent of IRC, such
consent to not be unreasonably withheld.
La India SA has agreed with IRC to not sell or transfer, or permit any
encumbrance, other than permitted encumbrances, to exist on any or all of the
NSR Property, the minerals from the NSR Property, the receivables derived from
the sale or other disposition of such minerals, or the income of La India SA,
without the prior consent of IRC. La India SA retains all decision making with
respect to the conduct of operations on the NSR Property, including all
decisions with respect to the sale or other deposition of minerals, provided
it acts reasonably and in accordance with good mining and engineering practice
in the circumstance. Although La India SA is prohibited from encumbering the
NSR Property, the definition of permitted encumbrances in the A&R NSR
Agreement includes, among others, any encumbrances in, to or over the NSR
Property to any project lenders as security for the payment or performance of
any project financing, provided that such project lenders enter into an
inter-creditor agreement with IRC on such customary terms and conditions as
IRC may reasonably require. Accordingly, the Company does not currently expect
that the A&R NSR Agreement will materially impact any project financing
related to the La India Project.
Finally, La India SA and IRC have also entered into security agreements to
protect IRC's interests in the A&R NSR Agreement. The security was created by
means of two public deeds dated December 7, 2016, between IRC and La India SA,
which were registered at the General Department of Mines of the Ministry of
Energy and Mines in Nicaragua. In addition, mortgages were registered with the
Public Registry in Nicaragua and annotations of the mortgages were made for
each of the Company's individual Concessions comprising the NSR Property.
These security interests will remain valid and effective during such
Concessions' term and will continue in the event that such Concessions' term
is extended.
The A&R NSR Agreement was entered into in conjunction with an Assignment,
Assumption, Novation and Consent Agreement among the Company, La India SA,
IRC, B2Gold and a subsidiary of B2Gold, Triton Minera S.A. (the "Settlement
Agreement"). This Settlement Agreement was entered into to settle an ongoing
dispute between B2Gold and Condor regarding the 3% NSR, as discussed above.
Under the Settlement Agreement, La India SA agreed to assume the 3% NSR in
favour of IRC within Concessions covering certain portions of the La India
Project (the "NSR Property"). In addition, the parties agreed to certain
covenants to not sue and a number of mutual releases were granted.
Four concessions totalling 96 km² and acquired by the Company prior to
September 2010 were excluded from the 3% NSR under the A&R NSR Agreement,
while a total of 138.9 km² of the La India Project is within in the NSR
Property. Consequently approximately 90% of the Company's current Indicated
and Inferred Resources on La India Project are subject to a 3% NSR under the
A&R NSR Agreement, with 174.5 km² of the La India Project (totaling 313.4 km²)
excluded. The map below provides an overview of the NSR Property.
In connection with the A&R NSR Agreement and the Settlement Agreement, the
Company exchanged certain land surface rights covering approximately 3,508
hectares with B2Gold in return for the Company's 20% shareholding in Cerro
Quiroz S.A.. Cerro Quiroz S.A. owns the Cerro Quiroz Concession adjacent to La
Libertad Concession, on which a subsidiary of B2Gold operates the Libertad
mine.
Company number: 05587987
CONDOR GOLD PLC
Interim Accounts
For the Three and Nine Months Ended 30 September 2017
CONDOR GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS TO 30 SEPTEMBER 2017
Nine months to 30.09.17unaudited£ Nine months to 30.09.16unaudited£ Threemonths to 30.09.17unaudited£ Three monthsto 30.09.16unaudited£
Revenue - - - -
Administrative expenses (3,883,952) (3,929,201) (538,473) (630,993)
Operating loss Note 3 (3,883,952) (3,929,201) (538,473) (630,993)
Finance income - 1,361 - -
Loss before income tax (3,883,952) (3,927,840) (538,473) (630,993)
Income tax expense Note 4 - - - -
Loss for the period (3,883,952) (3,927,840) (538,473) (630,993)
Other comprehensive income/(loss):
Currency translation differences 735,189 2,479,955 (786,028) 458,705
Other comprehensive income/(loss) for the period 735,189 2,479,955 (786,028) 458,705
Total comprehensive loss for the period (3,148,763) (1,447,885) (1,324,501) (172,288)
Loss attributable to:
Non-controlling interest - (683) - (297)
Owners of the parent (3,883,952) (3,927,157) (538,473) (630,696)
(3,883,952) (3,927,840) (538,473) (630,993)
Total comprehensive loss attributable to:
Non-controlling interest (6,946) (11,019) 2,809 (2,091)
Owners of the parent (3,141,817) (1,436,866) (1,327,310) (170,197)
(3,148,763) (1,447,885) (1,324,501) (172,288)
Loss per share expressed in pence per share:
Basic and diluted (in pence) Note 7 (6.52) (7.81) (0.88) (1.19)
CONDOR GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2017
30.09.17unaudited£ 31.12.16audited£ 30.09.16unaudited£
ASSETS:
NON-CURRENT ASSETS
Property, plant and equipment 275,766 234,390 325,729
Intangible assets 18,355,741 15,924,194 20,822,675
18,631,507 16,158,584 21,148,404
CURRENT ASSETS
Trade and other receivables 580,942 545,251 1,118,815
Cash and cash equivalents 2,020,493 583,610 1,629,392
2,601,435 1,128,861 2,748,207
TOTAL ASSETS 21,232,942 17,287,445 23,896,611
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables 354,019 351,551 115,535
TOTAL LIABILITIES 354,019 351,551 115,535
NET CURRENT ASSETS 2,247,416 777,310 2,632,672
NET ASSETS 20,878,923 16,935,894 23,781,076
SHAREHOLDERS' EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Called up share capital Note 8 12,273,076 10,582,129 10,582,129
Share premium 32,426,047 28,875,061 28,875,061
Legal reserves - - 71
Exchange difference reserve 1,374,661 632,526 4,039,892
Retained earnings (25,109,211) (23,075,118) (19,628,045)
20,964,573 17,014,598 23,869,108
TOTAL EQUITY ATTRIBUTABLE TO:
Non-controlling interest (85,650) (78,704) (88,032)
20,878,923 16,935,894 23,781,076
CONDOR GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 SEPTEMBER 2017
Share capital Share premium Legal reserve Exchange difference reserve Retained earnings Total Non controlling interest Total equity
£ £ £ £ £ £ £ £
At 1 January 2016 9,161,463 27,442,728 71 1,549,601 (17,893,453) 20,260,410 (77,012) 20,183,398
Comprehensive income:
Loss for the period - - - - (3,927,157) (3,927,157) (683) (3,927,840)
Other comprehensive income:
Currency translation differences - - - 2,490,291 - 2,490,291 (10,336) 2,479,955
Total comprehensive income - - - 2,490,291 (3,927,157) (1,436,866) (11,019) (1,447,885)
New shares issued 1,420,666 1,432,333 - - - 2,852,999 - 2,852,999
Share based payment - - 2,192,565 2,192,565 - 2,192,565
At 30 September 2016 10,582,129 28,875,061 71 4,039,892 (19,628,045) 23,869,108 (88,032) 23,781,076
At 1 January 2017 10,582,129 28,875,061 - 632,526 (23,075,118) 17,014,598 (78,704) 16,935,894
Comprehensive income:
Loss for the period - - - - (3,883,952) (3,883,952) - (3,883,952)
Other comprehensive income:
Currency translation differences - - - 742,135 - 742,135 (6,946) 735,189
Total comprehensive income - - - 742,135 (3,883,952) (3,141,817) (6,946) (3,148,763)
New shares issued 1,690,947 3,550,986 - - - 5,241,933 - 5,241,933
Share based payment - - - - 1,849,859 1,849,859 - 1,849,859
At 30 September 2017 12,273,076 32,426,047 - 1,374,661 (25,109,211) 20,964,573 (85,650) 20,878,923
CONDOR GOLD PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
AS AT 30 SEPTEMBER 2017
Nine months to 30.09.17unaudited£ Nine months to 30.09.16unaudited£
Cash flows from operating activities
Loss before tax (3,883,952) (3,927,840)
Share based payment 1,849,859 2,192,563
Depreciation charges 75,601 25,460
Impairment charge of intangible fixed assets - 18,045
Finance income - (1,361)
(1,958,492) (1,693,133)
(Increase) in trade and other receivables (35,691) (173,488)
Increase/(decrease) in trade and other payables 2,468 (444,449)
Net cash absorbed in operating activities (1,991,715) (2,311,070)
Cash flows from investing activities
Purchase of intangible fixed assets (2,506,191) (1,353,553)
Purchase of tangible fixed assets (118,216) (12,528)
Interest received - 1,361
Net cash absorbed in investing activities (2,624,407) (1,364,720)
Cash flows from financing activities
Net proceeds from share issue 5,241,933 2,853,000
Net cash generated in financing activities 5,241,933 2,853,000
Increase / (decrease) in cash and cash equivalents 625,811 (822,790)
Cash and cash equivalents at beginning of period 583,610 1,105,457
Exchange losses on cash and bank 811,073 1,346,725
Cash and cash equivalents at end of period 2,020,493 1,629,392
CONDOR GOLD PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS TO 30 SEPTEMBER 2017
1. COMPLIANCE WITH ACCOUNTING STANDARDS
Basis of preparation
This condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as issued by the International
Accounting Standards Board (IASB) and as adopted by the EU.
The annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards (IFRSs) as issued by the IASB and
as adopted by the EU. This condensed set of financial statements has been
prepared applying the accounting policies and presentation that are to be
applied in the preparation of the group's consolidated financial statements
for the year. IFRS is subject to ongoing review and endorsement by the EU or
possible amendment by interpretative guidance and the issuance of new
standards by the IASB.
The statutory accounts for the year ended 31 December 2016, which have been
filed with the Registrar of Companies. The auditors reported on those
accounts; their Audit Report was unqualified and did not contain a statement
under either Section 237(2) or Section 237(3) of the Companies Act 2006.
These condensed financial statements are unaudited and does not constitute
statutory financial statements as defined in section 434 of the Companies Act
2006. The condensed financial statements for the three and nine months ended
30 September 2017 was approved by the Directors on 20 December 2017.
The Directors consider the going concern basis to be appropriate based on cash
flow forecasts and projections and current levels of commitments, cash and
cash equivalents. The comparative period presented is that of the three and
nine months ended 30 September 2016.
The Directors are of the opinion that due to the nature of the Group's
activities and the events during that period these are the most appropriate
comparatives for the current period. Copies of these financial statements are
available on the Company's website.
2. ACCOUNTING POLICIES
The interim financial information for the months ended 30 September 2017 has
been prepared on the basis of the accounting policies set out in the most
recently published financial statements for the Group for the year ended 31
December 2016, which are available on the Company's website
www.condorgoldplc.com, as the Company does not anticipate the addition of new
standards to the Group's results for the year ended 31 December 2017 which
would materially impact the results.
3. REVENUE AND SEGMENTAL REPORTING
The Group has not generated any revenue during the period. The Group's
operations are located in England, El Salvador and Nicaragua.
The following is an analysis of the carrying amount of segment assets, and
additions to plant and equipment, analysed by geographical area in which the
assets are located.
3. REVENUE AND SEGMENTAL REPORTING - continued
The Group's results by reportable segment for the nine month period ended 30
September 2017 are as follows:
UKNine months to 30.09.2017£ El SalvadorNine months to 30.09.2017£ NicaraguaNine months to 30.09.2017£ ConsolidationNine months to 30.09.2017£
RESULTS
Operating (loss) (3,167,647) - (716,305) (3,883,952)
The Group's results by reportable segment for the three month period ended 30
September 2017 are as follows:
UKThree months to 30.09.2017£ El SalvadorThree months to 30.09.2017£ NicaraguaThree months to 30.09.2017£ ConsolidationThree months to 30.09.2017£
RESULTS
Operating (loss) (528,310) - (10,163) (538,473)
Assets
All transactions between each reportable segment are accounted for using the
same accounting policies as the Group uses.
UK30.09.2017£ El Salvador30.09.2017£ Nicaragua30.09.2017£ Consolidation30.09.2017£
ASSETS
Total assets 2,512,069 - 18,720,873 21,232,942
UK30.09.2017£ El Salvador30.09.2017£ Nicaragua30.09.2017£ Consolidation30.09.2017£
LIABILITIES
Total liabilities (138,853) - (215,166) (354,019)
3. REVENUE AND SEGMENTAL REPORTING - continued
The Group's results by reportable segment for the nine month period ended 30
September 2016 are as follows:
UKNine months to 30.09.2016£ El SalvadorNine months to 30.09.2016£ NicaraguaNine months to 30.09.2016£ ConsolidationNine months to 30.09.2016£
RESULTS
Operating (loss) (3,000,776) (56,703) (871,722) (3,929,201)
Interest income 1,347 14 - 1,361
The Group's results by reportable segment for the three month period ended 30
September 2016 are as follows:
UKThree months to 30.09.2016£ El SalvadorThree months to 30.09.2016£ NicaraguaThree months to 30.09.2016£ ConsolidationThree months to 30.09.2016£
RESULTS
Operating (loss) (627,354) - (3,639) (630,993)
Assets
All transactions between each reportable segment are accounted for using the
same accounting policies as the Group uses.
UK30.09.2016£ El Salvador30.09.2016£ Nicaragua30.09.2016£ Consolidation30.09.2016£
ASSETS
Total assets 4,280,916 - 19,615,695 23,896,611
UK30.09.2016£ El Salvador30.09.2016£ Nicaragua30.09.2016£ Consolidation30.09.2016£
LIABILITIES
Total liabilities (3,487) - (112,048) (115,535)
4. TAXATION
There is no current tax charge for the period. The accounts do not include a
deferred tax asset in respect of carry forward unused tax losses as the
Directors are unable to assess that there will be probable future taxable
profits available against which the unused tax losses can be utilised.
5. INTANGIBLE FIXED ASSETS
During the nine months ended 30 September 2017, the Group acquired intangible
assets with a cost of £2,506,091 (nine months ended 30 September 2016: £
1,353,553).
During the three months ended 30 September 2017, the Group acquired intangible
assets with a cost of £899,565 (three months ended 30 September 2016: £
484,442).
6. EQUITY-SETTLED SHARE OPTION SCHEME AND WARRANTS
The estimated fair value of the options and warrants granted was;
Nine months to 30.09.17unaudited£ Nine months to 30.09.16unaudited£ Three months to 30.09.17unaudited£ Three Monthsto 30.09.16unaudited£
Warrants and options charge (1,849,859) (2,192,565) (194,171) (64,654)
The fair value has been fully recognised within administration expenses, on a
pro-rata basis over the vesting period. This fair value has been calculated
using the Black-Scholes option pricing model. The latest inputs into the model
were as follows:
2017 2016
Share price 63p 63p
Exercise price 93p 80p
Expected volatility 39.9% 149.5%
Expected life (yrs.) 2 5
Risk free rate 0.23% 0.23%
Expected dividend yield - -
7. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
A reconciliation is set out below:
Nine months to 30.09.17 Nine months to 30.09.16
Basic EPS
(Loss) for the period (3,883,952) (3,927,157)
Weighted average number of shares 59,531,450 50,310,588
(Loss) per share (in pence) (6.52) (7.81)
Three months to 30.09.17 Three months to 30.09.16
Basic EPS
(Loss) for the period (538,473) (630,696)
Weighted average number of shares 61,365,682 52,858,726
Loss per share (in pence) (0.88) (1.19)
In accordance with IAS 33, as the Group has reported a loss for the period, diluted earnings per share are not included.
8. CALLED-UP SHARE CAPITAL
30.09.17£ 30.09.16£
Allotted and fully paid
Ordinary shares 61,365,380 of 20p each (30.09.16: 52,910,647 of 20p each) 12,273,076 10,582,129
On 20 February 2017, 8,454,733 ordinary shares were issued at a price of 62p
per share.
9. RELATED PARTY TRANSACTIONS
During the reporting period the Company received consultancy advice from the following related parties:
Company Related party Ninemonths to 30.09.2017£ Ninemonths to 30.09.2016£ Three months to 30.09.2017£ Three months to 30.09.2016£
Axial Associates Limited Mark Child 33,333 37,500 8,333 12500
Burnbrae Limited Jim Mellon 16,667 18,748 4,167 6,250
Peter Flindell 38,627 28,322 9,833 7,753
No amounts were outstanding at the period end date (30 September 2016: £NIL).
10. SEASONALITY OF THE GROUP'S BUSINESS OPERATIONS
There are no seasonal factors which affect the trade of any company in the Group.
- Ends -
This information is provided by RNS
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