REG - Horizonte Minerals - Final Results <Origin Href="QuoteRef">HZM.L</Origin> - Part 3

Horizonte MineralsAnnouncement

15/03/2016 07:00

- Part 3: For the preceding part double click  ID:nRSO0590Sb 

   -        25,608   
 Executive Directors                                                
 Jeremy Martin            149,000     1,950       39,104   190,054  
 Key Management                                                     
 Jeffrey Karoly           99,000      -           48,656   147,656  
                          355,208     1,950       87,760   444,918  
 
 
                                                                    
                          Aggregate   Other       Pension           
                          emoluments  emoluments  costs    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     66,442      44,312   256,754  
 Key Management                                                     
 Jeffrey Karoly           99,000      20,000      47,943   166,943  
                          361,008     86,442      92,25    539,705  
 
 
The Company does not operate a pension scheme. Pension costs comprise
contributions to Defined Contribution pension plans held by the relevant
Director or Key Management. 
 
25 Employee benefit expense (including directors and key management) 
 
                                                                     2015       2014       
 Group                                                               £          £          
 Wages and salaries                                                  844,343    916,650    
 Social security costs                                               198,064    266,136    
 Indemnity for loss of office                                        55,216     29,227     
 Share options granted to Directors and employees (note 17)          100,248    125,107    
                                                                     1,197,871  1,337,120  
 Management                                                          6          6          
 Field staff                                                         26         25         
 Average number of employees including Directors and key management  32         31         
 
 
Employee benefit expenses includes £586,348 (2014: £502,706) of costs
capitalised and included within intangible non-current assets. 
 
Share options granted include costs of £81,883 (2014: £53,379) relating to
Directors. 
 
26 Investment in subsidiaries 
 
                               2015        2014        
 Company                       £           £           
 Shares in Group undertakings  2,348,042   2,348,042   
 Loans to Group undertakings   42,350,832  35,420,183  
                               44,698,874  37,768,225  
 
 
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 one year and
are renewable at the end of the lease period at market rate. The leases can be
cancelled by payment of up to one month's 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: 
 
                          2015    2014    
 Group                    £       £       
 Not later than one year  46,596  22,201  
 Total                    46,596  22,201  
 
 
Capital Commitments 
 
Capital expenditure contracted for at the end of the reporting period but not
yet incurred is as follows: 
 
                    2015    2014   
 Group              £       £      
 Intangible assets  42,100  7,004  
 
 
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. 
 
28   Contingent Liabilities 
 
(a)   Glencore Araguaia Project 
 
On 28 September 2015 the Company announced that it had reached agreement to
indirectly acquire through wholly owned subsidiaries in Brazil the advanced
high-grade Glencore Araguaia nickel project ('GAP') in north central Brazil. 
GAP is located in the vicinity of the Company's Araguaia Project. 
 
Pursuant to a conditional asset purchase agreement ('Asset Purchase
Agreement') between, amongst others, the Company and Xstrata Brasil Exploraçâo
Mineral Ltda ('Xstrata'), a wholly-owned subsidiary of Glencore Canada
Corporation ('Glencore'), the Company has agreed to pay a total consideration
of US$8 million to Xstrata, which holds the title to GAP.  The consideration
is to be paid according the following schedule; 
 
·      US$2,000,000 in ordinary shares in the capital of the Company (the
"Initial Consideration Shares"), split between the SdT and VdS deposit areas
and payable on the relevant closing date for such deposit area.  The closing
date is linked to the date on which the Company or a subsidiary of it is
registered as holder of such deposit areas by the National Department of
Mineral Production of Brazil ('DNPM'), the deadline for which can be extended
after 6 months at the option of the Company for a period of up to a year from
the date of the signing of the Asset Purchase Agreement.  The transfer of the
mineral concession for the VdS deposit area from Xstrata was completed in
November 2015 and following approval received at a general meeting of its
shareholders convened on 25 November 2015, Initial Consideration Shares to the
value of US$660,000 were issued to Xstrata. As at 31st December 2015, the
registration of the transfer of the mineral concession for the SdT deposit
area from Xstrata to a subsidiary of the Company had not been completed by the
DNPM. Should this take place within the deadlines outlined above, at the time
of closing the Company will issue the Initial Consideration Shares to Xstrata
to the value of US$1,340,000 at a price per Initial Consideration Share equal
to the 5 day volume weighted average share price on AIM taken on the business
day prior to the relevant closing. As such no provision has been made until
such time as registration of the transfer has been completed. 
 
·      US$1,000,000 after the date of issuance of a joint feasibility study
for the combined Araguaia & GAP project areas, to be satisfied in HZM Shares
(at the 5 day volume weighted average price taken on the tenth business day
after the date of such issuance) or cash, at the election of the Company.
Following transfer of the concession for the VdS deposit area to a subsidiary
of the Company, US$330,000 of this US$1,000,000 has been included in
contingent consideration payable; and 
 
·      The remaining US$5,000,000 consideration will be paid in cash, as at
the date of first commercial production from any of the resource areas within
the Enlarged Project area. Following transfer of the concession for the VdS
deposit area to a subsidiary of the Company, this has been included in
contingent consideration payable. 
 
The SdT deposit area concessions are subject to on-going litigation with a
Brazilian third party.  Glencore has disputed these claims.  The parties have
agreed certain protections including the receipt by HZM from Glencore of
certain indemnities in respect of such litigation. 
 
The Asset Purchase Agreement contains customary warranties regarding the GAP
project and the parties' ability to enter into the Proposed Transaction and is
subject to customary termination rights and confidentiality obligations. 
 
(b) Other Contingencies 
 
The Group has received a claim from various trade union organisations in
Brazil regarding outstanding membership fees due in relation to various
subsidiaries within the Group. Some of these claims relate to periods prior to
the acquisition of the relevant subsidiary and would be covered by warranties
granted by the previous owners at the date of sale. The Directors are
confident that no amounts are due in relation to these proposed membership
fees and that the claims will be unsuccessful. No subsequent actions, claims
or communications from the various trade union organisations have been
received subsequent to the requests for payment. As a result, no provision has
been made in the Financial Statements for the year ended 31 December 2015 for
amounts claimed. Should the claim be successful, the maximum amount payable in
relation to fees not subject to the warranty agreement would be approximately
£64,000. 
 
In 2013 the Group received an infraction notice from the Brazilian
Environmental Agency's (IBAMA) district office in Conceição do Araguaia in
connection with carrying out  drilling activities in 2011 without the relevant
permits. Drilling equipment was furthermore impounded. The Group strongly
believes that it operated with all necessary permits and has initiated legal
proceedings to overturn the infraction notice. The Group has secured
cancelation of  the injunction and has appealed the associated fine of
approximately £22,000. 
 
In August 2014 the Group received a claim from a former employee in Brazil
with regard to amounts allegedly due under the terms of his employment. The
Group is defending the claim and it is not currently practicable to estimate
the extent of any liability that may arise. 
 
In December 2014 the Group received a writ from the State Attorney in
Conceiçao do Araguaia regarding alleged environmental damages caused by
drilling activities in 2011. To ensure proper environmental stewardship, the
Group conducts certified baseline studies prior to all drill programmes and
ensures that areas explored are properly maintained and conserved in
accordance with local environmental legislation. After drilling has occurred,
drill sites and access routes are rehabilitated to equal or better conditions
and evidence is retained to demonstrate that such rehabilitation work has been
completed. In January 2015 the Group filed a robust defence against the writ.
A court hearing was held in May 2015 at which documents were requested to
confirm that valid environmental authorisations were in place. These were
subsequently submitted as requested. No substantive financial claim continues
to be made against the Group under the terms of the writ. The Group continues
to believe that the writ is flawed and is working towards having it withdrawn
in due course.  As a result no provision has been made in the Financial
Statements for the year ended 31 December 2015. 
 
29 Parent Company Statement of Comprehensive Income 
 
As permitted by section 408 of the Companies Act 2006, the statement of
comprehensive income of the Parent Company is not presented as part of these
Financial Statements. The Parent Company's profit for the year was £311,625
(2014: £226,045 loss). 
 
30 Events after the reporting date 
 
No significant events have occurred since the reporting date. 
 
* * ENDS * * 
 
About Horizonte Minerals: 
 
Horizonte Minerals plc is an AIM and TSX-listed nickel development company
focused in Brazil, which wholly owns the advanced Araguaia nickel laterite
project located to the south of the Carajas mineral district of northern
Brazil.  The Company is developing Araguaia as the next major nickel mine in
Brazil. 
 
The Project, which has excellent infrastructure in place including rail, road,
water and power has a current NI 43-101 compliant Mineral Resource of 71.98Mt
grading 1.33% Ni (Indicated) and 25.4Mt at 1.21% Ni (Inferred) at a 0.95%
nickel cut-off; included in Resources is a Probable Reserve base of 21.2Mt at
1.66%Ni. 
 
Horizonte has a strong shareholder structure including Teck Resources Limited
(28.1%) and Henderson Global Investors (17.0%). 
 
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION 
 
Except for statements of historical fact relating to the Company, certain
information contained in this press release constitutes "forward-looking
information" under Canadian securities legislation. Forward-looking
information includes, but is not limited to, statements with respect to the
potential of the Company's current or future property mineral projects; the
success of exploration and mining activities; cost and timing of future
exploration, production and development; the estimation of mineral resources
and reserves and the ability of the Company to achieve its goals in respect of
growing its mineral resources; and the realization of mineral resource and
reserve estimates. Generally, forward-looking information can be identified by
the use of forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might" or "will be taken", "occur"
or "be achieved". Forward-looking information is based on the reasonable
assumptions, estimates, analysis and opinions of management made in light of
its experience and its perception of trends, current conditions and expected
developments, as well as other factors that management believes to be relevant
and reasonable in the circumstances at the date that such statements are made,
and are inherently subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or
achievements of the Company to be materially different from those expressed or
implied by such forward-looking information, including but not limited to
risks related to: exploration and mining risks, competition from competitors
with greater capital; the Company's lack of experience with respect to
development-stage mining operations; fluctuations in metal prices; uninsured
risks; environmental and other regulatory requirements; exploration, mining
and other licences; the Company's future payment obligations; potential
disputes with respect to the Company's title to, and the area of, its mining
concessions; the Company's dependence on its ability to obtain sufficient
financing in the future; the Company's dependence on its relationships with
third parties; the Company's joint ventures; the potential of currency
fluctuations and political or economic instability  in countries in which the
Company operates; currency exchange fluctuations; the Company's ability to
manage its growth effectively; the trading market for the ordinary shares of
the Company; uncertainty with respect to the Company's plans to continue to
develop its operations and new projects; the Company's dependence on key
personnel; possible conflicts of interest of directors and officers of the
Company, and various risks associated with the legal and regulatory framework
within which the Company operates. 
 
Although management of the Company has attempted to identify important factors
that could cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements. 
 
This information is provided by RNS
The company news service from the London Stock Exchange