REG - Horizonte Minerals - Final Results <Origin Href="QuoteRef">HZM.L</Origin> - Part 3
25/02/2015 07:00
- Part 3: For the preceding part double click ID:nRSY7672Fb
range of option exercise prices is as follows:
Range of exercise prices (£) 2014 2014 2014 2014 2013 2013 2013 2013
Weighted Number of Weighted Weighted Weighted Number of Weighted Weighted
average shares average average average shares average average
exercise price remaining life remaining life exercise price remaining life remaining life
(£) expected contracted (£) expected contracted
(years) (years) (years) (years)
0-0.1 0.076 17,200,000 8.65 8.65 0.095 2,850,000 4.0 6.0
0.1-0.2 0.154 21,100,000 6.63 6.63 0.133 23,010,000 6.6 7.6
17 Other reserves
Available for sale Merger Translation Other
reserve reserve reserve reserve Total
Group £ £ £ £ £
At 1 January 2013 (55,291) 10,888,760 (4,346,470) (1,048,100) 5,438,899
Other comprehensive income (174,985) - - - (174,985)
Currency translation differences - - (4,124,364) - (4,124,364)
At 31 December 2013 (230,276) 10,888,760 (8,470,834) (1,048,100) 1,139,550
Other comprehensive income (22,729) - - - (22,729)
Currency translation differences - - (1,438,422) - (1,438,422)
At 31 December 2014 (253,005) 10,888,760 (9,909,256) (1,048,100) (321,601)
Company Merger Total
reserve £
£
At 1 January 2013 and 31 December 2013 10,888,760 10,888,760
At 1 January 2014 and 31 December 2014 10,888,760 10,888,760
The other reserve as at 31 December 2014 arose on consolidation as a result of
merger accounting for the acquisition of the entire issued share capital of
Horizonte Exploration Limited during 2006 and represents the difference
between the value of the share capital and premium issued for the acquisition
and that of the acquired share capital and premium of Horizonte Exploration
Limited.
Currency translation differences relate to the translation of Group entities
that have a functional currency different from the presentation currency
(refer note 2.8c).
18 Trade and other payables
Group Company
2014 2013 2014 2013
£ £ £ £
Non-current
Contingent consideration 2,235,512 2,477,310 2,235,512 2,477,310
2,235,512 2,477,310 2,235,512 2,477,310
Current
Trade and other payables 28,380 11,632 3,239 6,203
Amounts due to related parties (refer note 21) - - 413,930 413,930
Social security and other taxes 27,303 28,322 15,040 13,000
Accrued expenses 280,211 108,099 69,951 42,100
335,894 148,053 502,160 475,233
Total trade and other payables 2,571,406 2,625,363 2,737,672 2,952,543
Trade and other payables include amounts due of £204,066 (2013: £72,694) in
relation to exploration and evaluation activities.
Contingent consideration
The fair value of the potential contingent consideration arrangement was
estimated at the acquisition date according to when future taxable profits
against which the tax losses may be utilised were anticipated to arise. The
fair value estimates were based on the current rates of tax on profits in
Brazil of 34%. A discount factor of 7.0% was applied to the future dates at
which the tax losses will be utilised and consideration paid.
As at 31 December 2014, there was a finance expense of £173,903 (2013:
£165,138) recognised in finance costs within the statement of comprehensive
income in respect of the contingent consideration arrangement, as the discount
applied to the contingent consideration at the date of acquisition was
unwound.
At 31 March 2014, Management reassessed the fair value of the potential
contingent consideration in accordance with the Group accounting policy. The
cash flow model used to estimate the contingent consideration was adjusted, to
take into account changed assumptions in the timing of cash flows as derived
from the Pre-Feasibility Study as published by the Group in March 2014. The
key assumptions underlying the cash flow model are unchanged as at 31 December
2014. The change in the fair value of contingent consideration has generated a
credit to profit or loss of £415,702 for the year ended 31 December 2014 due
to exchange rate changes in Management's assumptions and in the functional
currency in which the liability is payable. During 2013, the change in fair
value of £46,940 was due to exchange rate changes.
19 Dividends
No dividend has been declared or paid by the Company during the year ended 31
December 2014 (2013: nil).
20 Earnings per share
(a) Basic
The basic loss per share of 0.283p (2013 loss per share: 0.709p) is calculated
by dividing the loss attributable to owners of the parent by the weighted
average number of ordinary shares in issue during the year.
2014 2013
Group £ £
Loss attributable to owners of the parent (1,241,936) (2,713,221)
Weighted average number of ordinary shares in issue 439,259,597 382,737,815
(b) Diluted
The basic and diluted earnings per share for the years ended 31 December 2014
and 31 December 2013 are the same as the effect of the exercise of share
options would be anti-dilutive.
Details of share options that could potentially dilute earnings per share in
future periods are set out in note 16.
21 Related party transactions
The following transactions took place with subsidiaries in the year:
A fee totalling £202,045 (2013: £183,241) was charged to HM do Brazil Ltda,
£nil (2013: £64,740) to Minera El Aguila SAC and £475,589 (2013: £368,344) to
Araguaia Niquel Mineração Ltda by Horizonte Minerals Plc in respect of
consultancy services provided and funding costs. In 2013 the balance due from
HM do Brasil Ltda of £554,372, from Minera El Aguila SAC of £1,283,978, from
HM Brazil (IOM) Ltd of £2,000,000, to PMA Geoquimica Ltda of £111,016 and from
Brazil Mineral Holdings Ltd of £536,867 were impaired through profit or loss.
Amounts totalling £2,076,925 (2013: £3,828,388) were lent to HM Brazil (IOM)
Ltd, HM do Brasil Ltda, Araguaia Niquel Mineraçao Ltda, PMA Geoquimica Ltda,
Minera El Aguila SAC and Minera El Cotahuasi SAC to finance exploration work
during 2014, by Horizonte Minerals Plc. Interest is charged at an annual rate
of 4% on balances outstanding during the year.
Balances with subsidiaries at the year end were:
2014 2014 2013 2013
Assets Liabilities Assets Liabilities
Company £ £ £ £
HM do Brasil Ltda 274,678 - - -
Minera El Aguila SAC 3,848 - - -
HM Brazil (IOM) Ltd 4,493,680 - 4,078,148 -
Horizonte Nickel (IOM) Ltd 26,916,381 - 25,158,763 -
Araguaia Niquel Mineração Ltda 3,478,592 - 2,687,382 -
Horizonte Minerals (IOM) Ltd 253,004 - 253,004 -
Horizonte Exploration Ltd - 413,930 - 413,930
Total 35,420,183 413,930 32,177,297 413,930
All Group transactions were eliminated on consolidation.
On 31 July 2014 a total of 50,000,000 shares were issued through a public
offering in Canada, at a price of CAD 0.11 per share and a private placement
was closed for a total of 41,287,608 shares, at a price of £0.06 per share, to
raise £5,447,265 before expenses. As part of this private placement, Teck
Resources Limited subscribed for 18,115,942 shares representing 43.9 percent
of the private placement and Henderson Global Investors subscribed for
8,333,333 shares, representing 20.2 percent of the private placement. By
reason of their existing shareholdings in the Company, the participation of
Teck Resources Limited and Henderson Global Investors in the private placement
each constitute a related party transaction under AIM Rule 13 of the AIM Rules
for Companies.
On 11 June 2013, 41,093,327 ordinary shares of 1p each were issued fully paid
for cash consideration at 7.5 pence per share to raise £3.1 million before
expenses. As part of this private placement, Teck Resources Limited subscribed
for 20,000,000 shares representing 48.7 percent of the placing and Henderson
Global Investors subscribed for 12,133,329 shares, representing 29.5 percent
of the placing. By reason of their existing shareholdings in the Company, the
participation of Teck Resources Limited and Henderson Global Investors in the
private placement each constitute a related party transaction under AIM Rule
13 of the AIM Rules for Companies.
On 27 June 2013 the Company signed an agreement for an £8 million Equity
Financing Facility ('EFF') with Darwin Strategic Limited ('Darwin'), a
majority owned subsidiary of Henderson Global Investors' Volantis Capital. The
EFF agreement with Darwin provides Horizonte with an equity line facility
which, subject to certain conditions and restrictions, can be drawn on any
time over 36 months. The floor subscription price in relation to each draw
down is set at the discretion of the Company. Horizonte is under no obligation
to make a draw down and there are no penalty fees if the Company does not use
the facility.
22 Ultimate controlling party
The Directors believe there to be no ultimate controlling party.
23 Expenses by nature
2014 2013
Group £ £
Staff costs 680,080 228,505
Indemnity for loss of office 29,227 77,847
Exploration related costs expensed (excluding staff costs) 166,866 188,438
Charge for share options granted 125,107 171,277
Depreciation (note 10) 3,666 4,370
Loss on foreign exchange 46,364 149,199
Change in fair value of contingent consideration (415,702) (46,940)
Impairments of intangible fixed assets 31,989 1,033,240
Other expenses 431,849 789,598
Total operating expenses 1,099,446 2,595,534
24 Directors' remuneration
Discretionary
Basic salary Other performance
and fees benefits related bonus Total
Group 2014 £ £ £ £
Non-Executive Directors
Alexander Christopher - - - -
David Hall 44,008 - - 44,008
William Fisher 24,000 - - 24,000
Allan Walker 24,000 - - 24,000
Owen Bavinton 24,000 - - 24,000
Executive Directors
Jeremy Martin 146,000 45,754 65,000 256,754
364,000 45,754 65,000 372,762
Discretionary
Basic salary Other performance
and fees benefits related bonus Total
Group 2013 £ £ £ £
Non-Executive Directors
Alexander Christopher - - - -
David Hall 47,870 - - 47,870
William Fisher 24,000 - - 24,000
Allan Walker 24,000 - - 24,000
Owen Bavinton 24,000 - - 24,000
Executive Directors
Jeremy Martin 146,000 45,754 - 191,754
265,870 45,754 - 311,624
The Company does not operate a pension scheme. Included in other benefits for
the year of £45,754 (2013: £45,754) are contributions to a Defined
Contribution pension plan held by Mr Jeremy Martin of £44,313 (2013: £44,313).
The bonus paid to Mr Martin in 2014 of £65,000 (2013: £nil) was in respect of
delivery of the Pre-Feasibility Study.
25 Employee benefit expense (including directors)
2014 2013
Group £ £
Wages and salaries 916,650 999,956
Social security costs 266,136 286,990
Indemnity for loss of office 29,227 77,847
Share options granted to Directors and employees (note 16) 125,107 171,277
1,337,120 1,536,070
Average number of employees including Directors 31 43
Employee benefit expenses includes £502,706 (2013: £1,058,441) of costs
capitalised and included within intangible non-current assets. In 2014 no
employee benefit expenses have been reimbursed by joint venture partners
(2013: £nil).
Share options granted include costs of £53,379 (2013: £101,918) relating to
Directors.
26 Investments
2014 2013
Company £ £
Shares in Group undertakings 2,348,042 2,348,042
Loans to Group undertakings 35,420,183 32,177,297
37,768,225 34,525,339
Investments in Group undertakings are stated at cost.
On 23 March 2006 the Company acquired the entire issued share capital of
Horizonte Exploration Limited by means of a share for share exchange; the
consideration for the acquisition was 21,841,000 ordinary shares of 1 penny
each, issued at a premium of 9 pence per share. The difference between the
total consideration and the assets acquired has been credited to other
reserves.
27 Commitments
Operating lease commitments
The Group leases office premises under cancellable and non-cancellable
operating lease agreements. The cancellable lease terms are up to two years
and are renewable at the end of the lease period at market rate. The leases
can be cancelled by payment of up to three months rental as a cancellation
fee. The lease payments charged to profit or loss during the year are
disclosed in note 6.
The future aggregate minimum lease payments under non-cancellable operating
leases are as follows:
2014 2013
Group £ £
Not later than one year 22,201 9,849
Later than one year and no later than five years - -
Total 22,201 9,849
Capital Commitments
Capital expenditure contracted for at the end of the reporting period but not
yet incurred is as follows:
2014 2013
Group £ £
Intangible assets 7,004 421,051
Capital commitments relate to contractual commitments for metallurgical,
economic and environmental evaluations by third parties. Once incurred these
costs will be capitalised as intangible exploration asset additions.
Other Commitments
On 12 January 2012 the Company signed an option agreement with Anglo Pacific
Group plc ('Anglo Pacific') for a future Net Smelter Royalty ('NSR'). The
option was exercisable by Anglo Pacific upon completion of a Pre-Feasibility
Study on the site where they would pay Horizonte USD 12.5 million and receive
a NSR. The NSR would be at a rate of 1.5% of nickel revenue produced up to
30,000 tonnes per annum, reduced by 0.02% for every 1,000 tonnes per annum
above this rate. The rate was fixed at a minimum rate of 1.1% for production
of 50,000 tonnes per annum and above. The Pre-Feasibility Study was completed
in March 2014Recent news on Horizonte Minerals
See all newsREG - AIM Horizonte Minerals - Cancellation - Horizonte Minerals Plc
AnnouncementREG - Horizonte Minerals - Appointment of Administrators
AnnouncementREG - AIM Horizonte Minerals - Suspension - Horizonte Minerals Plc
AnnouncementREG - Horizonte Minerals - Notice of resolution to appoint administrators
AnnouncementREG - Horizonte Minerals - Corporate Update
Announcement