REG - URU Metals Limited - Final Results <Origin Href="QuoteRef">URU.L</Origin> - Part 2
30/09/2016 16:35
- Part 2: For the preceding part double click ID:nRSd4045La
16 requires lessees to account for all leases under a
single on-balance sheet model in a similar way to finance leases under IAS 17
- Leases ("IAS 17"). The standard includes two recognition exemptions for
lessees - leases of 'low-value' assets (e.g., personal computers) and
short-term leases (i.e., leases with a lease term of 12 months or less). At
the commencement date of a lease, a lessee will recognize a liability to make
lease payments (i.e., the lease liability) and an asset representing the right
to use the underlying asset during the lease term (i.e., the right-of-use
asset). Lessees will be required to separately recognize the interest expense
on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence
of certain events (e.g., a change in the lease term, a change in future lease
payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognize the amount of the remeasurement
of the lease liability as an adjustment to the right-of-use asset. Lessor
accounting is substantially unchanged from today's accounting under IAS 17.
Lessors will continue to classify all leases using the same classification
principle as in IAS 17 and distinguish between two types of leases: operating
and finance leases. Management believes that IFRS 16 will not have any impact
on these financial statements as all current are low value leases.
5. Financial instruments
Fair value determination
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value hierarchy establishes three levels to
classify the inputs to valuation techniques used to measure fair value. Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities. Level 2 inputs are quoted prices in markets that are not
active, quoted prices for similar assets or liabilities in active markets,
inputs other than quoted prices that are observable for the asset or
liability, or inputs that are derived principally from or corroborated by
observable market data or other means. Level 3 inputs are unobservable
(supported by little or no market activity). The fair value hierarchy gives
the highest priority to Level 1 inputs and the lowest priority to Level 3
inputs. The Company has no financial instruments carried at fair value as at
March 31, 2016, other than the contingent payment on acquiring SSOAB (as
defined in note 13). This is a level 3 financial liability as determined based
on management's expected time to settle the obligation and management's
estimated discount rate used.
Financial risk management
The Company's Board of Directors monitors and manages the financial risks
relating to the operations of the Company. These include liquidity risk,
credit risks and market risks which include foreign currency and interest rate
risks.
Credit risk
Credit risk is the risk of loss associated with a counterparty's inability to
fulfill its payment obligations. The Company's credit risk is primarily
attributable to the Company's cash and cash equivalents and other receivables.
The Company has no allowance for impairment that might represent an estimate
of incurred losses on other receivables. The Company has cash and cash
equivalents of $484,000 (March 31, 2015 - $574,000), which represent the
maximum credit exposure on these assets. As at March 31, 2016, the majority of
the cash and cash equivalents were held with a major Canadian chartered bank
from which management believes the risk of loss to be minimal.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Company's approach
to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking
damage to the Company's reputation.
Typically the Company tries to ensure that it has sufficient cash on demand to
meet expected operational expenses for a period of twelve months, including
the servicing of financial obligations; this excludes the potential impact of
extreme circumstances that cannot reasonably be predicted. Management monitors
the rolling forecasts of the Company's liquidity reserve on the basis of
expected cash flows.
The following are the contractual maturities of financial liabilities:
6 months
(In thousands of United States Dollars) amount cash flows or less years
March 31, 2016
Trade and other payables $ 596 $ 596 $ 596 $ -
March 31, 2015
Trade and other payables $ 379 $ 379 $ 379 $ -
Market risks
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices will affect the Company's
loss or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimizing the return. The Company does not apply
hedge accounting in order to manage volatility in statements of loss.
Foreign currency rate risk
The Company, operating internationally, is exposed to currency risk on
purchases that are denominated in a currency other than the functional
currency of the Company's entities, primarily Pound Sterling ("GBP"), the
Canadian Dollar ("CAD"), the South African Rand ("ZAR"), Swedish Krona ("SEK")
and the US Dollar ("USD").
The Company does not hedge its exposure to currency risk.
In respect of other monetary assets and liabilities denominated in foreign
currencies, the Company's policy is to ensure that its net exposure is kept to
an acceptable level by buying or selling foreign currencies at spot rates when
necessary to address short term imbalances.
The Company's exposure to foreign currency risk, based on notional amounts,
was as follows:
(In thousands of United States Dollars) USD GBP SEK CAD Total
March 31, 2016
Cash and cash equivalents $ 10 $ 463 $ 4 $ 7 $ 484
Receivables - - - 171 171
Trade and other payable - (139 ) (78 ) (379 ) (596 )
March 31, 2015
Cash and cash equivalents $ 17 $ 537 $ 5 $ 15 $ 574
Receivables - - 2 - 2
Trade and other payable - (136 ) (13 ) (230 ) (379 )
Interest rate risk
The financial assets and liabilities of the Company are subject to interest
rate risk, based on changes in the prevailing interest rate. The Company does
not enter into interest rate swap or derivative contracts. The primary goal of
the Company's investment strategy is to make timely investments in listed or
unlisted mining and mineral development properties to optimize shareholder
value. Where appropriate, the Company will act as an active investor and will
strive to advance corporate actions that deliver value adding outcomes. The
Company will undertake joint ventures with companies that have the potential
to realize value through mineral project development, and invest substantially
in those joint ventures to advance asset development over the near term.
Sensitivity analysis
A 10% strengthening of the USD against the following currencies at March 31,
2016 would have increased/(decreased) equity and profit or loss by the amounts
shown below. This was determined by recalculating the USD balances held using
a 10% greater exchange rate to the USD. This analysis assumes that all other
variables, in particular interest rates, remain constant.
March 31, 2016 March 31, 2015
(In thousands of United States Dollars) Equity Profit or loss Equity Profit or loss
GBP $ - $ (32 ) $ - $ (40 )
CAD $ - $ 23 $ - $ 28
SEK $ - $ 7 $ - $ 3
6. Capital risk management
The Company includes its share capital and premium, reserves and accumulated
deficit as capital. The Company's objective is to maintain a flexible capital
structure which optimizes the costs of capital at an acceptable risk. In light
of economic changes and with the risk characteristics of the underlying
assets, the Company manages the capital structure and makes adjustments to it.
As the Company has no cash flow from operations and in order to maintain or
adjust the capital structure, the Company may attempt to issue new shares,
issue debt and/or find a strategic partner. Neither the Company nor any of its
subsidiaries are subject to externally imposed capital requirements.
The Company prepares annual expenditure budgets to facilitate the management
of its capital requirements and updates them as necessary depending on various
factors such as capital deployment and general industry conditions. The
Company's investment policy is in highly liquid, short-term interest-bearing
investments with short maturities. During the year ended March 31, 2016, there
were no changes in the Company's approach to capital management.
7. Purchase of Umnex Minerals Limpopo Pty ("UML")
In November 2013, the Company acquired 100% interest in Southern Africa Nickel
Limited ("SAN Ltd."). SAN Ltd in turn had a 74% interest in a joint operation
(the "SAN-Umnex Joint Venture"). The remaining 26% was held by Umnex Mineral
Holdings Pty ("UMH"), which had title to the Zebediela licences through its
subsidiary, UML. SAN Ltd and UMH had been in dispute since 2011, and
arbitration had begun in August 2013. As a result of this arbitration, in
fiscal 2013 the Company had provided in full for the costs of the Zebediela
project (USD 1,821,000). The reversal of the impairment will be assessed once
the title to the licences has been completely transferred to the Company.
On April 10, 2014, SAN Ltd. and UMH agreed that SAN Ltd. would purchase 100%
of UML from UMH for consideration of 33,194,181 in new URU Metals shares and
8,000,000 bonus shares issued to directors and officers for their services in
the acquisition of UML.
The Zebediela Project extends over three separate mining titles in Limpopo
Province. As at the date of acquisition, title to all three rights were held
by parties unrelated to UML, and transfer of the rights to UML's subsidiary
Lesogo Platinum Uitloop Pty ("LPU") had not been completed. The timing of the
transfer is uncertain and regulatory approval of the transfer remains
outstanding.
Under the terms of the acquisition agreement, UMH is permitted to return the
shares and take back the licences should URU Metals:
• fail to maintain adequate cash funds to meet its general and project expenditure obligations, or
• fail to meet the purchased rights' minimum statutory expenditure obligations, or
• raise equity capital at a valuation of below 1.5 pence per share in the financing immediately after the acquisition
As at March 31, 2016, the "general and project expenditure obligations" and
the "minimum statutory expenditure obligations" of the general and project
expenditure obligations had not been determined. The financing the Company
completed during the year ended March 31, 2016 (note 10) does not impact URU's
ownership of the project.
The acquisition does not meet the definition of a "business" as set out in
IFRS 3, and the Company has treated the transaction as a purchase of assets.
As it was not a business combination, transaction costs have been capitalized,
and as the transaction affected neither accounting nor taxable profit,
deferred taxes do not arise.
The following table summarizes the assessment of consideration paid for UML
and the amounts of assets acquired at the acquisition date:
Consideration USD '000s
Value of shares issued $ 996
Value of bonus shares issued 226
Cash-based acquisition costs 126
$ 1,348
Identifiable net assets acquired
Intangible assets $ 1,348
$ 1,348
Of the consideration paid, $95,000 was incurred and capitalized to intangible
assets in the year ended March 31, 2014.
Additionally, conditional consideration of 12,000,000 free-trading shares is
payable if either 1) a transaction is consummated by URU Metals to sell,
farm-out, or similarly dispose of any portion of a mineral project on some or
all of the mining titles, or 2) a mining right is obtained from the South
African Department of Mines and Resources in respect of some or all of the
rights, or 3) an effective change of control of URU Metals occurs. As at March
31, 2016, none of the above conditions have occurred.
8. Intangible assets
(In thousands of United States Dollars)
Exploration costs
South African
COST Projects SSOAB Nueltin Total
Balance, March 31, 2014 $ 3,976 $ 1,438 $ 175 $ 5,589
Acquired (1)(i) 1,254 - - 1,254
Foreign exchange (440 ) (453 ) (22 ) (915 )
Additions 5 111 - 116
Impairment - - (153 ) (153 )
Balance, March 31, 2015 4,795 1,096 - 5,891
Foreign exchange (133 ) 34 - (99 )
Additions - 56 - 56
Transfer to long-term prepaid assets (2) - (41 ) - (41 )
Impairment - (1,145 ) - (1,145 )
Balance, March 31, 2016 $ 4,662 $ - $ - $ 4,662
South African
ACCUMULATED AMORTIZATION AND IMPAIRMENT Projects SSOAB Nueltin Total
Balance, March 31, 2014 $ (2,088 ) $ - $ - $ (2,088 )
Foreign exchange 236 - - 236
Balance, March 31, 2015 (1,852 ) - - (1,852 )
Foreign exchange 47 - - 47
Balance, March 31, 2016 $ (1,805 ) $ - - $ (1,805 )
South African
CARRYING VALUE Projects SSOAB Nueltin Total
Balance, March 31, 2015 $ 2,943 $ 1,096 $ - $ 4,039
Balance, March 31, 2016 $ 2,857 $ - $ - $ 2,857
(1) The Company made a fair value allocation between Burgersfort properties
and Zebediela properties and the entire SAN Ltd. acquisition fair value was
related to Zebediela properties.
(2) On determination that an impairment charge was required for the company's
SSOAB Narke project, the Company identified a long term prepaid asset for
future drilling costs that may be applied to projects undertaken in other
locations. Accordingly, the long-term prepaid asset was transferred out of
intangible assets.
(i) The intangible assets acquired from UML were capitalized as additions to
South African Projects.
SSOAB Licences
SSOAB (as defined in note 13) had 100% ownership of several exploration
licences near the town of Örebro, Sweden. The Swedish licences are considered
to be a single project, and thus to be one CGU. During the year ended March
31, 2016, due to the continued decline of the prices of oil and uranium, the
Company decided not to pursue the continued development of SSOAB properties
and therefore determined that the recoverable amount of the intangibles under
SSOAB properties is the value in use of the properties which was estimated to
be $nil. The Company recorded $1,145 impairment of intangible assets in the
consolidated statements of loss and comprehensive loss for the year ended
March 31, 2016. Subsequent to year end, the Company has allowed its licenses
to lapse.
Nueltin Licence
Nueltin was party to an option agreement with Cameco Corporation ("Cameco"),
the holder of a licence located in the Nunavut Territory of Canada. Under the
agreement, the Company could earn 51% interest in the project from Cameco in
return for exclusively funding CDN$2.5 million in exploration expenditures by
December 31, 2016. The Cameco project was considered to be one CGU. During the
year ended March 31, 2015, the Company wrote off the Nueltin Licence in an
amount $153,000 as the Company had no plan to pursue the project in Nunavut
Territory.
South African Projects
On 5 October 2010, the Company announced that it had entered into a joint
venture (the "SAN-URU Joint Venture") with SAN Ltd, the joint owner and
current developer of a portfolio of large nickel projects in Southern Africa.
Under the agreement, the Company committed to provide funding to the SAN-URU
Joint Venture of, in aggregate, up to 3.6 million over a period of 20 months
from 5 October 2010. The SAN-URU Joint Venture's interests included a 50%
interest in a joint arrangement to explore mineral rights near the town of
Burgersfort in South Africa (the "Burgersfort Project") as well as the
Zebediela Nickel Project as noted below.
On 6 April 2011, the Company announced the satisfactory and successful
conclusion of all due diligence activities between SAN Ltd and Umnex Mineral
Holdings Pty ("Umnex"), in relation to the acquisition of the Zebediela Nickel
Project close to the mining town of Mokopane in the Limpopo province of South
Africa. The Zebediela project is a joint venture, structured exclusively
between SAN Ltd and Umnex (the "SAN-Umnex Joint Venture"). The acquisition of
an interest in the Zebediela rights via the SAN-Umnex Joint Venture involved
no additional cash consideration to be made by either the Company or SAN Ltd.
and did not increase the Company's original committed contribution to the
SAN-URU Joint Venture of $3.6 million.
In fiscal 2012, URU Metals satisfied all its obligations under the SAN-URU
Joint Venture Agreement and thus had a fully vested 50% interest in the
SAN-URU Joint Venture. However, as announced on 6 April 2011, the SAN-URU
Joint Venture sought to continue the development of the Zebediela Nickel
Project. Umnex, the vendor of the Zebediela Nickel Project, would receive a
direct interest in the SAN-URU Joint Venture from both Southern African Nickel
and URU Metals. Subsequent to that direct investment - and assuming that the
arbitration (see below) was to have ruled in SAN Ltd.'s favour - the effective
interest of each party in the SAN-URU Joint Venture would have been URU Metals
45%, SAN Ltd. 40%, and Umnex 15%.
In fiscal 2013, a dispute arose between SAN Ltd. and Umnex. Both parties
alleged that the other party had failed in its obligations under their
SAN-Umnex Joint Venture agreement. Primarily, Umnex alleged that SAN Ltd. has
failed in its obligation to achieve a public listing for the SAN-Umnex Joint
Venture by July 6, 2012, and thus Umnex had the ability to leave the Joint
Venture with ownership of the mineral rights in exchange for payment of
historical exploration costs, whereas SAN Ltd alleged that Umnex had not
facilitated the required transfer of the mineral licence into the correct
corporate vehicle first, which was necessary to allow the public listing to
proceed. URU's interest in the Zebediela project was negotiated as an
amendment to the SAN-URU Joint Venture; URU Metals was never party to the
dispute between SAN Ltd and Umnex. As at March 31, 2013, URU Metals had
fulfilled all of its obligations under that separate agreement. URU Metals was
in active discussions between Umnex and SAN Ltd to facilitate a resolution to
the dispute. Discussion through to the end of calendar 2012 failed to resolve
the dispute between Umnex and SAN Ltd, such that those two partners entered
into a formal arbitration process.
URU Metals acquired 100% of the shares of SAN Ltd in November 2013.
The arbitration was ultimately settled as a condition of URU Metals's
acquisition in April 2014 of the Umnex subsidiary which held the Zebediela
licences.
Accounting treatment of SAN-URU Joint Venture (the Burgersfort properties).
With URU's acquisition of SAN Ltd during the year ended March 31, 2014, the
SAN-URU Joint Venture was dissolved, and SAN Ltd obtained ownership of the
JV's 50% interest in the Burgersfort properties. SAN Ltd's interest in the
Burgersfort properties is a Joint Operation, as set out in IFRS 11 - Joint
Arrangements, with BSC Resources as the other party to the arrangement.
Accounting treatment of SAN-Umnex Joint Venture (the Zebediela properties)
The original agreement intended that SAN Ltd would have 74% ownership of the
final agreement. Accordingly, at March 31, 2014, SAN Ltd's interest in
Zebediela remained a Farm-in Agreement, and the Company capitalised 100% of
the costs it incurred in relation to the SAN-Umnex Joint Venture to the extent
that the costs were directly related to exploration and evaluation
activities.
On April 10, 2014, SAN Ltd. and UMH agreed that SAN Ltd. would purchase 100%
of UML from UMH for consideration, thereby dissolving the SAN-Umnex Joint
Venture (note 7).
9. Receivables
As at As at
March 31, March 31,
(In thousands of United States Dollars) 2016 2015
Other receivables $ 171 $ 2
10. Share capital and premium
(In thousands of United States Dollars except number of shares)
Number of
shares Share capital Share premium Total
Balance, March 31, 2014 132,776,722 $ 1,328 $ 46,196 $ 47,524
Shares issued for acquisition of UML (note 7) 41,194,181 412 810 1,222
Shares issued in private placement (i) 54,333,334 543 831 1,374
Shares issued for professional service (ii) 656,142 7 7 14
Transaction costs incurred for private placement - - (184 ) (184 )
Balance, March 31, 2015 228,960,379 $ 2,290 $ 47,660 $ 49,950
Shares issued in private placement (iii) 95,000,000 900 (344 ) 556
Shares issued for professional fees (iii) 5,000,000 50 (19 ) 31
Transaction costs incurred for private placement - - (61 ) (61 )
Balance, March 31, 2016 328,960,379 $ 3,240 $ 47,236 $ 50,476
Issued shares
All issued shares are fully paid up.
Authorized: unlimited number of common shares. There are no preferences or
restrictions attached to any classes of common shares.
(i) On May 2, 2014, the Company announced the placing of 54,333,334 new shares
at a price of 1.5 pence per share for a total of GBP 815,000. Of the total,
19,283,335 shares were issued to Niketo Co. Ltd., a company wholly owned by
NWT, the Company's largest shareholder. 8,500,000 of these share were issued
in settlement of professional fees owed.
(ii) During the year ended March 31, 2015, the Company issued 656,142 shares
to RB Milestone, a consultant, for settlement of professional services
provided with a total value of $14,000.
(iii) During the year ended March 31, 2016, the Company issued 95 million
shares at GBP 0.004 per share for gross proceeds of $525,000 and settlement of
CEO salaries, director fees and consulting fees of $62,000 and $31,000
consulting fees were settled against 5 million shares to be issued at GBP
0.004 per share. Transaction costs of $61,000 were incurred for the private
placement. The Company's CEO subscribed for 5 million shares in the private
placement for settlement of salaries and director fees of $31,000.
Unissued shares
In terms of the BVI Business Companies Act, the unissued shares are under the
control of the Directors.
Dividends
Dividends declared and paid by the Company were $nil for the year ended March
31, 2016 (March 31, 2015 - $nil)
11. Share option reserve
(a) Share options
The Share Option Plan is administered by the Board of Directors, which
determines individual eligibility under the plan for optioning to each
individual. Below is disclosure of the movement of the Company's share options
as well as a reconciliation of the number and weighted average exercise price
of the Company's share options outstanding on March 31, 2016.
The assessed fair value at grant date is determined using the Black-Scholes
Model that takes into account the exercise price, the term of the option, the
share price at grant date, the expected price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the
term of the option.
(i) Reconciliation of share options outstanding as at March 31, 2016:
Weighted Number of
average options originally Number
Exercise prices (GBP) remaining life (years) granted exercisable
0.049 4.56 2,633,334 2,633,334
0.020 1.15 8,500,000 8,500,000
0.030 1.95 11,133,334 11,133,334
(ii) Continuity and exercise price
The number and weighted average exercise prices of share options are as
follows:
Weighted
average
Number exercise price
of options per share (GBP)
Balance, March 31, 2014 7,483,334 0.04
Options granted 8,500,000 0.02
Options expired unexercised (2,850,000 ) 0.05
Balance, March 31, 2015 13,133,334 0.03
Options expired unexercised (2,000,000 ) 0.03
Balance, March 31, 2016 11,133,334 0.03
On May 22, 2014, the Company granted a total of 8,500,000 options to directors
and contractors at an exercise price of GBP0.02 per share. The options granted
vested immediately upon grant. The fair value of share options granted was
$98,067 (GBP58,319) which was expensed during the yar ended March 31, 2015.
The fair value of these share options was calculated using the Black Scholes
model with the following assumptions:
Risk-free interest rate 1.04%
Expected life (years) 3.0
Expected volatility * 49.62%
Dividend yield per share Nil
Exercise price GBP0.02
Share price GBP0.02
* Expected volatility was determined on the basis of the historical volatility
of the Company's common shares during the past three years.
(b) Warrants
The following is a summary of the Company's warrants granted under its Share
Incentive Scheme. As at March 31, 2016, the following warrants, issued in
respect of capital raising, had been granted but not exercised:
Number of Exercise Expiry Fair value at
Name Date granted Date vested warrants price (GBP) date grant date (GBP)
Beaumont October 9, 2009 October 9, 2009 100,000 0.345 October 9, 2019 0.345
There were no movements in warrants during the years ended March 31, 2015 or
March 31, 2016.
12. Trade and other payables
As at As at
March 31, March 31,
(In thousands of United States Dollars) 2016 2015
Other payables $ 300 $ 105
Accruals 296 274
$ 596 $ 379
13. Contingent consideration on SSOAB purchase
On May 23, 2013, the Company announced that it had acquired all the
outstanding ordinary shares of a Swedish company, Svenska
Skifferoljeaktiebolaget ("SSOAB") from a private company. The acquisition was
made to obtain SSOAB's only significant assets: its title to six exploration
licences in Sweden, located in Örebro County.
URU Metals paid the vendors $300,000 and issued 17 million ordinary shares as
consideration to the vendors for the purchase of SSOAB. An additional 2.5
million ordinary shares, plus a cash payment of $25,000, were paid as a
finder's fee on the transaction. A deferred payment of $200,000 will be paid
by URU Metals to the vendors upon the completion of the first exploration
drill program on the property in the future. The agreement had not specified a
drilling timetable; management's best estimate was that it would be on or
about three years after acquisition (i.e. May 2016), although the drilling
would be contingent on the Company's cash position. Coincident with the
deferred payment would be a return to the purchasers of cash and equivalents
in the company at transfer of SEK 132,000 ($21,000 at date of purchase).
As at March 31, 2016, the Company decided not to continue the drilling program
and the contingent consideration of $221,000 (comprising a purchase cost of
$200,000 plus a return of assets of $21,000) was discounted and de-recognized
at fair value of $nil.
As at As at
March 31, March 31,
(In thousands of United States Dollars) : 2016 2015
Opening balance $ 142 $ 160
Accretion 21 29
Dereognition of contingent consideration (163 ) (43 )
Foreign exchange - (4 )
$ - $ 142
14. Related party transactions
(a) Transactions with key management personnel
During the year ended March 31, 2016, no stock options were granted to key
management personnel.
During the year ended March 31, 2015, stock options of 8,000,000 were granted
to officers and directors of the Company at an exercise price of GBP 0.02 per
share.
Details of stock options outstanding granted to directors, management and past
directors and management are as follows:
Weighted Number of
average options originally Expiry
Directors/officers exercise price (GBP) granted date
Directors
J. Vieira 0.02 2,000,000 May 23, 2017
D. Subotic 0.02 3,000,000 May 23, 2017
Management
J. Zorbas 0.02 3,000,000 May 23, 2017
8,000,000
The former Chief Executive Officer and director R. Lemaitre and former Chief
Financial Officer, R. Swarts resigned during the prior two years and the Board
of Directors confirmed that their options remained in force until they expire
or are unexercised.
(b) Management remuneration
Year Year
ended ended
March 31, March 31,
(In thousands of United States Dollars) 2016 2015
Fees for services as director $ 36 $ 45
Basic salary 236 114
Share-based payments - 92
Total $ 272 $ 251
Please refer to note 10 (iii) for settlement of CEO salaries and director fees
for issuance of shares.
During the year ended March 31, 2016, the Company paid $12,000 to Jay Vieira,
one of the directors of the Company for professional services.
15. Loss before income tax
The following items have been charged in arriving at the operating loss for
the year:
(In thousands of United States Dollars)
March 31, March 31,
Note 2016 2015
Auditors' remuneration $ 79 $ 96
Directors' fees 36 45
Legal fees 56 21
Operating lease payments 32 62
Depreciation - 7
Foreign exchange loss (gain)
Realized 32 53
Unrealized 47 (73 )
Staff remuneration
Share options expensed - Directors (equity settled) 11a - 98
Share options expensed - salaries - 115
Other professional fees 126 192
16. Income tax expense and deferred taxation
The Company is incorporated in the British Virgin Islands (BVI). The BVI under
the Business Companies Act (BCA) imposes no corporate or capital gains taxes.
As such, the Company's losses will not result in an income tax recovery in the
BVI. However, the Company as a Group may be liable for taxes in the
jurisdictions where it operates or develops mining properties.
Effective 13 July 2012, the Company became resident in Canada, and is subject
to income taxes at a combined federal and provincial statutory tax rate of
26.5% (2015 - 26.5%) .
Income tax expense from the amount that would be computed by applying the
Canadian federal and provincial statutory income tax rates to the loss for the
year is as follows:
2016 2015
Loss for the year before taxes $ (1,633 ) $ (1,129 )
Statutory tax rate 26.5% 26.5%
Expected income tax recovery (433 ) (299 )
Non-deductible/non-taxable items - 26
Benefit of losses not recognized 433 273
- -
No deferred tax asset has been recognised because there is insufficient
evidence of the timing of suitable future profits against which it can be
recovered. No deferred tax liability has been recognised as a result of the
losses in the periods to date.
The significant components of the Company's unrecognized deductible temporary
differences as at March 31, 2016 and 2015 are as follows:
2016 2015
Loss carry-forward $ 9,768 $ 9,098
Share issuance costs 74 25
Other 982 -
Subtotal $ 10,824 $ 9,123
The group has non-capital losses in Canada of USD 1,652,000 expiring in 2036,
USD 878,000 expiring in 2035, USD 575,000 expiring in 2034 and USD 7,645,000
expiring in 2033.
17. Segmented information
(a) Reportable segments
The Company has two reportable segments, as described below, which are the
Company's strategic business units. Both are determined by the Chief Executive
Officer (the "CEO"), the Company's chief operating decision-maker, and have
not changed year-over-year. The strategic business units offer different
services, and are managed separately because they require different
strategies.
The following summary describes the operations in each of the Company's
reportable segments:
Exploration Includes obtaining licences and exploring these licence areas.
Corporate office Includes all Company administration and procurement
There are no other operations that meet any of the quantitative thresholds for
determining reportable segments during the years ended March 31, 2016 or
2015.
There are varying levels of integration between the Exploration and Corporate
Office reportable segments. This integration includes shared administration
and procurement services.
Information regarding the results of each reportable segment is included
below. Performance is measured based on segmented results. Any inter-segment
transactions would be determined on an arm's length basis. Inter-segment
pricing for 2016 and 2015 consisted of funding advanced from Corporate Office
to Exploration.
(b) Operating segments
(In thousands of United States Dollars)
Exploration Corporate office Total
2016 2015 2016 2015 2016 2015
Depreciation $ - $ 7 $ - $ 1 $ - $ 8
Reportable segment loss before tax $ 1,003 $ 139 $ 620 $ 990 $ 1,633 $ 1,129
Material non-cash items in segment loss before tax:
Share-based payments expenses $ - $ - $ - $ 98 $ - $ 98
Exploration Corporate office Total
2016 2015 2016 2015 2016 2015
Reportable segment assets $ 2,902 $ 4,049 $ 651 $ 566 $ 3,553 $ 4,615
Reportable segment liabilities $ (12 ) $ (144 ) $ (584 ) $ (377 ) $ (596 ) $ (521 )
(c) Geographical segments
During the years ended March 31, 2016 and 2015, business activities took place
in Sweden, Canada and South Africa.
In presenting information based on the geographical segments, segment assets
are based on the geographical location of the assets.
The following table presents segmented information on the Company's operations
and net loss for the year ended March 31, 2016 and assets and liabilities as
at March 31, 2016:
(In thousands of United States Dollars) Canada Sweden South Africa Total
Net loss $ 620 $ 1,003 $ - $ 1,633
Total assets $ 651 $ 45 $ 2,857 $ 3,553
Non-current assets $ - $ - $ 2,898 $ 2,898
Liabilities $ (584 ) $ (12 ) $ - $ (596 )
The following table presents segmented information on the Company's operations
and net loss for the year ended March 31, 2015 and assets and liabilities as
at March 31, 2015:
(In thousands of United States Dollars) Canada Sweden South Africa Total
Net loss $ 1,162 $ (33 ) $ - $ 1,129
Depreciation $ 8 $ - $ - $ 8
Share-based payments $ 98 $ - $ - $ 98
Total assets $ 566 $ 1,106 $ 2,943 $ 4,615
Non-current assets $ - $ 1,084 $ 2,955 $ 4,039
Liabilities $ (377 ) $ (144 ) $ - $ (521 )
18. Commitments and Contingency
Commitments
Refer to note 13 for SSOAB contingent consideration.
Refer to note 7 for conditional consideration for UML acquisition.
Contingency
The Company's former controller filed a law suit claiming approximately
$40,000 against the Company. URU delivered a defense and counterclaim against
the former controller. Documents have been produced by the parties but there
have not been any examinations for discovery. At this stage, it is too early
to evaluate the relative strength of the claim, defense and counterclaim and
no amounts have been accrued in the financial statements in relations to this
matter.
19. Subsequent event
On April 15, 2016, 5,000,000 shares were issued to the CEO of the Company in
settlement of salaries and director fees of $31,000.
This announcement contains inside information for the purposes of Article 7 of
Regulation 596/2014.
For further information please visit www.urumetals.com or contact:
URU Metals LimitedJohn Zorbas(Chief Executive Officer) +1 416 504 3978
Northland Capital Partners Limited(Nominated Adviser and Joint Broker)Edward Hutton / Matthew Johnson + 44 (0) 203 861 6625
This information is provided by RNS
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