REG - URU Metals Limited - Final Results <Origin Href="QuoteRef">URU.L</Origin> - Part 2
29/09/2017 07:07
- Part 2: For the preceding part double click ID:nRSc1668Sa
- (1,145 ) (1,145 )
Balance, March 31, 2016 $ 4,662 $ - $ 4,662
Additions 8 - 8
Foreign exchange (113 ) (113 )
Balance, March 31, 2017 $ 4,557 $ - $ 4,557
South Africa
ACCUMULATED AMORTIZATION AND IMPAIRMENT Project SSOAB Total
Balance, March 31, 2015 $ (1,852 ) $ - $ (1,852 )
Foreign exchange 47 - 47
Balance, March 31, 2016 $ (1,805 ) $ - $ (1,805 )
Foreign exchange 44 - 44
Balance, March 31, 2017 $ (1,761 ) $ - $ (1,761 )
South African
CARRYING VALUE Projects SSOAB Total
Balance, March 31, 2016 $ 2,857 $ - $ 2,857
Balance, March 31, 2017 $ 2,796 $ - $ 2,796
(1) 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.
SSOAB Licences
SSOAB (as defined in note 14) 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 was 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. The foreign currency reserve of SSOAB was reclassified from
equity to the consolidated statements of loss and comprehensive loss for the
year ended March 31, 2017.
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 as the Company had no plan to pursue the project in Nunavut
Territory and the Company let the option expire.
South African Projects
In November 2013, the Company acquired 100% interest in Southern Africa Nickel
Limited ("SAN Ltd.") which was the Company's joint venture partner since 2010
on the Zebediela Nickel Project and 50% interest in the Burgersfort Project.
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. With
URU's acquisition of SAN Ltd., the SAN-URU joint venture was dissolved and San
Ltd. obtained ownership of the JV's 50% interest in the Burgersfort Project
with BSC resources as the other party to the agreement.
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 Nickel Project extends over three separate adjacent prospecting
rights in the Limpopo Province of South Africa. All three rights are held by
LPU which in turn is 100% owned by UML.
All three rights are currently compliant with minimum expenditure obligations,
annual report submissions, annual prospecting fees, and submitted prospecting
work programs.
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
As at March 31, 2017, the "general and project expenditure obligations" and
the "minimum statutory expenditure obligations" of the general and project
expenditure obligations had not been determined.
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, 2017, none of the above conditions have occurred.
9. Marketable security
On March 1, 2017, the Company acquired 7,550,000 shares of Management Resource
Solutions Plc ("Management Resource") for GBP0.15 per share by issuance of
25,166,666 common shares of the Company. The fair value of the Management
Resource shares was determined to be the value of the URU shares issued, as
Management Resource was a public company whose shares were not trading at the
time and the market price was not available. As at March 31, 2017, the trading
in the shares of Management Resource was still suspended and management
determined to use the fair value of the URU shares issued on March 1, 2017 of
3.7 pence per share as the fair value of the Management Resource shares.
Subsequent to year end, the trading in the shares of Management Resource was
resumed (note 20) and the value of the shares had decreased to GBP0.045 per
share on September 20, 2017.
10. Receivables
As at As at
March 31, March 31,
(In thousands of United States Dollars) 2017 2016
Receivables $ 30 $ 171
11. 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, 2015 228,960,379 $ 2,290 $ 47,660 $ 49,950
Shares issued in private placement (i) 95,000,000 900 (344 ) 556
Shares issued for professional fees (i) 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
Shares issued in private placements (ii)(iii)(iv)(v) 374,944,444 3,799 (1,141 ) 2,414
Shares issued for professional fees (iii)(iv)(v) 23,499,999 235 (93 ) 142
Fair value of warrants issued (iv) - - (57 ) (57 )
Shares issued upon exercise of warrants(vi) 20,000,000 200 46 246
Reclassification of fair value of warrants upon exercise (vi) - - 57 57
Shares issued for acquisition of marketable security(vii) 25,166,666 252 898 1,394
Transaction costs incurred for private placement - - (223 ) (223 )
Balance, March 31, 2017 772,571,488 $ 7,726 $ 46,723 $ 54,449
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) 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 Chief
Executive Officer ("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 CEO of the Company subscribed for 5 million
shares in the private placement for settlement of CEO salaries and director
fees of $31,000.
(ii) On April 15, 2016, 5,000,000 shares to be issued in the private placement
as described above during the year ended March 31, 2016 were issued to the CEO
of the Company in settlement of his salaries.
(iii) On November 22, 2016, the Company issued 185,000,000 shares at GBP 0.004
for gross proceeds of $832,000 and settlement of director fees and consulting
fees of $87,000. Officers and directors of the Company subscribed for
32,500,000 shares for $161,000. Transaction costs of $81,000 were incurred.
(iv) On January 9, 2017, the Company issued 200,000,000 shares at GBP 0.0045
for gross proceeds of $1,063,000 and settlement of director fees and
consulting fees of $30,000. Related parties including Niketo Limited, a
company with the common management of URU and officers and directors of the
Company subscribed for 31,111,111 shares for $170,000. Transaction costs of
$105,000 were incurred.
On January 9, 2017. the Company issued 20,000,000 warrants to Adam
International Investments Limited ("Adam International") with each warrant
exercisable at GBP0.01 for a share of the Company. The fair value of the
warrants was determined to be $57 using the Black Scholes model with the
following assumptions: risk free rate of 0.73%, dividend yield of 0%, expected
life of 1 year, expected volatility of 145.7%, exercise price of GBP 0.01 and
share price of GBP0.0059.
(v) On February 13, 2017, the Company issued 13,444,443 shares at GBP 0.045
for gross proceeds of $732,000 and settlement of director fees and consulting
fees of $25,000. Related parties including Niketo Limited, a company with the
common management of URU and officers and directors of the Company subscribed
for 3,555,555 shares for $200,000. Transaction costs of $21,000 were
incurred.
(vi) On March 1, 2017, the Company issued 20,000,000 shares for the exercise
of the 20,000,000 warrants issued to Adam International above for gross
proceeds of $246,000.
(vii) On March 1, 2017, the Company issued 25,166,666 for acquisition of
7,550,000 of Management Resources Solutions Plc ("MRS") from Scopn Pty Ltd. at
a price of GBP0.15 per share. Transaction costs of $7,000 were incurred.
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, 2017 (year ended March 31, 2016 - $nil)
12. 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, 2017.
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, 2017:
Weighted Number of
average options originally Number
Exercise prices (GBP) remaining life (years) granted exercisable
0.049 3.56 2,633,334 2,633,334
0.020 (i) 0.15 8,500,000 8,500,000
0.030 0.95 11,133,334 11,133,334
(i) Subsequent to year end, 8,000,000 of these options were exercised and the
remaining 500,000 options expired unexercised (note 20).
(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, 2015 13,133,334 0.03
Options expired unexercised (2,000,000 ) 0.03
Balance, March 31, 2016 and March 31, 2017 11,133,334 0.03
(b) Warrants
The following is a summary of the Company's warrants granted under its Share
Incentive Scheme. As at March 31, 2017, 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
Refer to note 11(iv) for the issuance and exercise of 20 million warrants
during the year ended March 31, 2017.
13. Trade and other payables
As at As at
March 31, March 31,
(In thousands of United States Dollars) 2017 2016
Other payables $ 291 $ 300
Accruals 386 296
$ 677 $ 596
14. 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 was to 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).
During the year ended 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. During the year ended March 31, 2017,
the contingent consideration was no longer recorded.
As at As at
March 31, March 31,
(In thousands of United States Dollars) : 2017 2016
Opening balance $ - $ 142
Accretion - 21
Derecognition of contingent consideration - (163 )
$ - $ -
15. Related party transactions
(a) Transactions with key management personnel
During the year ended March 31, 2017, no stock options were granted to key
management personnel.
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 CEO 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.
All options held by management were exercised subsequent to March 31, 2017
(note 20).
(b) Management remuneration
Year Year
ended ended
March 31, March 31,
(In thousands of United States Dollars) 2017 2016
Fees for services as director $ 121 $ 36
Basic salary 158 236
Total $ 279 $ 272
Please refer to note 11 (i)(ii)(iii)(iv)(v) for settlement of CEO salaries and
director fees for issuance of shares.
During the year ended March 31, 2017, the Company issued 15,833,333 shares and
444,444 shares to David Subotic and Jay Vieira, respectively, for settlement
of their director fees (note 11 (iii)(iv)(v)).
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.
16. 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 2017 2016
Auditors' remuneration $ 63 $ 79
Directors' fees 121 36
Legal fees 36 56
Operating lease payments 32 32
Depreciation 3 -
Foreign exchange loss (gain)
Realized - 32
Unrealized (86 ) 47
Other professional fees 232 126
17. 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% (2016 - 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:
2017 2016
Loss for the year before taxes $ (645 ) $ (1,633 )
Statutory tax rate 26.5% 26.5%
Expected income tax recovery (171 ) (433 )
Benefit of losses not recognized 171 433
- -
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, 2017 and 2016 are as follows:
2017 2016
Loss carry-forward $ 10,476 $ 9,768
Share issuance costs 234 74
Other $ 982 $ 982
18. 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 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 year ended March 31, 2017 or 2016.
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 2017 and 2016 consisted of funding advanced from Corporate Office
to Exploration.
(b) Operating segments
(In thousands of United States Dollars)
Exploration Corporate office Total
2017 2016 2017 2016 2017 2016
Depreciation $ 3 $ - $ - $ - $ 3 $ -
Reportable segment loss
before tax $ 3 $ 1,003 $ 642 $ 630 $ 645 $ 1,633
Exploration Corporate office Total
2017 2016 2017 2016 2017 2016
Reportable segment assets $ 2,878 $ 2,902 $ 3,956 $ 651 $ 6,834 $ 3,553
Reportable segment liabilities $ (10 ) $ (12 ) $ (667 ) $ (584 ) $ (677 ) $ (596 )
(c) Geographical segments
During the year ended March 31, 2017 and 2016, business activities took place
in 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, 2017 and assets and liabilities as
at March 31, 2017:
(In thousands of United States Dollars) Canada Sweden South Africa Total
Net loss $ 642 $ - $ 3 $ 645
Total assets $ 3,956 $ - $ 2,878 $ 6,834
Non-current assets $ 113 $ - $ 2,840 $ 2,953
Liabilities $ (667 ) $ (10 ) $ - $ (677 )
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 )
19. Commitments and Contingency
Commitments
Refer to notes 8 and 20(iii) 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 consolidated financial statements in
relations to this matter.
20. Subsequent events
(i) In April 2017, 8 million stock options were exercised by the officers and
directors of the Company for a total proceeds of $126 (GBP100) and in relation
to a director resignation settlement pay of $76 (GBP60).
(ii) On April 19, 2017, 15,050,000 stock options with each exercisable into a
common share of the Company at GBP0.06 per share were granted to officers,
directors and consultants of the Company and 15,150,000 stock options each
exercisable into a common share of the Company at GBP0.09 per share were
granted to officers, directors and consultants of the Company. The fair value
of the options was estimated at $72,038 (GBP52,256). The options vest in five
years.
(iii) On April 19, 2017, the Company entered into a Corporate and Management
Services Agreement (the "Agreement") with UMH. As per the Agreement, UMH shall
provide to UML services including project management, coordination of mining
rights application, mineral rights management, finance and accounting,
technical, metallurgical, engineering and geological services and corporate
finance and capital raising. In exchange of the services, UMH will earning the
following fees:
1. Once the Bankable Feasibility Study commences a monthly retainer of
ZAR150,000 until then a monthly retainer of ZAR75,000 will be paid;
2. First right of offer for technical, metallurgical, engineering and
geological services at market related pricing;
3. Capital raising and corporate finance fees of 5% of the transaction value
of capital raised through UMH sources;
4. UMH will be issued a 1.5% royalty on all revenue generated from the
Zebediela project. 1% of the royalty can be purchased back by URU or its
successor for the amount of $2 million provided that URU exercises this right
within 24 months of the Mining Right being issued by the Department of Mineral
Resources of South Africa.
(iv) On May 5, 2017, the MRS shares resumed trading on the AIM market of the
London Stock Exchange. Based on the closing middle market share price of
GBP0.045 per MRS share on September 20, 2017, the value of the 7,550,000 MRS
shares acquired on March 1, 2017 was $460 ($1,173 as at March 31, 2017, based
on the value of the URU shares issued as acquisition consideration).
This announcement contains inside information.
END
For further information, please contact:
URU Metals Limited +1 416 504 3978
John Zorbas
(Chief Executive Officer)
Northland Capital Partners Limited + 44 (0) 203 861 6625
(Nominated Adviser and Joint Broker)
Edward Hutton / Matthew Johnson
Beaufort Securities Limited + 44 (0) 207 382 8300
(Joint Broker)
Jonathan Belliss
SVS Securities Plc +44 (0) 203 700 0093
(Joint Broker)
Tom Curran
This information is provided by RNS
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