TIDMSMA
RNS Number : 1627S
Sovereign Mines of Africa PLC
29 September 2017
29 September 2017
Sovereign Mines of Africa PLC
("SMA" or "the Company")
Interim Results for the six months ended 30 June 2017
Sovereign Mines of Africa PLC (AIM:SMA), is pleased to announced
its interim results for the six months ended 30 June 2017.
Enquiries:
SOVEREIGN MINES OF AFRICA PLC
Giles Clarke - c/o Camarco
+44 20 3757 6983
SHORE CAPITAL - NOMINATED ADVISER & BROKER
Toby Gibbs / Jerry Keen
+44 207 408 4090
CAMARCO
Tom Huddart / Jane Glover / Billy Clegg
+44 20 3757 4980
SOVEREIGN MINES OF AFRICA PLC
CHAIRMAN'S STATEMENT
On 20 January 2017, the Company announced it had completed the
farm-out of its 75% interest in the Mandiana Gold Project in the
Republic of Guinea, West Africa to Volcanic Metals Corp. In
connection with the farm-out Volcanic has changed its name to
"Volcanic Gold Mines Inc." and now trades under its new name on the
TSX Venture Exchange, under the symbol "VG". In consideration for
the farm-out the Company received 2,502,489 common shares in
Volcanic, as announced on 7 November 2016.
Having previously pursued a wider strategy of targeting assets
in a number of sectors, the Company is now pursuing a more targeted
strategy. A Memorandum of Understanding ("MOU") was signed on 28
September 2017 with an Indian business to acquire its specialist
eyewear manufacturing company. Further announcements will be made
in due course.
The Company is currently deemed a cash shell under AIM Rule 15,
pursuant to which it is required to make an acquisition which
constitutes a reverse takeover under AIM Rule 14. Trading in the
Company's shares was suspended on 21 July 2017. Trading in the
Company's shares will remain suspended until publication of a
re-admission document and the approval of any transaction at a
general meeting of the Company. If no transaction is completed the
Company's shares are scheduled to be cancelled from trading on AIM
on 21 January 2018 pursuant to AIM Rule 41.
We would like to thank all our shareholders for their continued
support during this period of change within the Company and we look
forward into the second half of 2017 with confidence.
Financial
The Company reports a loss from continuing operations of
GBP95,433 for the six-month period ended 30 June 2017, compared to
a loss of GBP43,795 for the corresponding period in 2016. The loss
in the period represents the costs of running the Company during
this transitional phase. The Company also reported a profit from
discontinued operations in relation to the sale of its interest in
the Mandiana Gold Project of GBP656,140, representing the market
value of the Volcanic shares received as consideration for the
disposal on 20 January 2017.
The Company had cash resources of GBP278,235 at 30 June 2017
which will provide sufficient finance to cover the Company's
ongoing expenditure.
Post year end the Company has sold a total of 1,533,989 of its
equity shares in Volcanic. The average share price for the sales is
CAD$0.43, resulting in total consideration, net of commission, of
GBP402,640.
Related Party Transaction
On 28 September 2017 the Company agreed a contract with
Westleigh Investments Holdings Ltd to provide bookkeeping and other
secretarial services for a fee of GBP19,000 per six months. The
independent directors, being Jeremy Sparrow and Rupert Fraser,
consider, having consulted with the Company's nominated adviser,
Shore Capital, that the terms of the contract with Westleigh
Investments Holdings Ltd are fair and reasonable insofar as the
Company's shareholders are concerned.
C G Clarke
Chairman
29 September 2017
SOVEREIGN MINES OF AFRICA PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 June 2017
Six months Six months Year ended
ended ended 31 December
Note 30 June 30 June 2016
2017 2016 Audited
Unaudited Unaudited GBP
GBP GBP
Administrative costs
Other administrative
expenses (95,433) (44,976) (207,683)
Finance income - 1,181 6,136
------------------ ------------------ ------------------
Loss on ordinary activities
before taxation (95,433) (43,795) (201,547)
Tax on loss on ordinary - - -
activities
------------------ ------------------ ------------------
Loss for the financial
period from continuing
operations (95,433) (43,795) (201,547)
Profit from discontinued
operation 4 656,140 - -
------------------ ------------------ ------------------
Profit/(loss) for the
period attributable to
owners of the parent 560,707 (43,795) (201,547)
Other comprehensive - - -
income
Items that may be reclassified
to profit or loss:
Revaluation of available-for-sale 144,894 - -
investments
------------------ ------------------ ------------------
Total comprehensive income/(loss)
for the period attributable
to owners of the parent 705,601 (43,795) (201,547)
=========== =========== ===========
Total comprehensive income/(loss)
attributable to owners of the parent
arising from:
Continuing operations (95,433) (43,795) (201,547)
Discontinued operation 801,034 - -
------------------ ------------------ ------------------
705,601 (43,795) (201,547)
=========== =========== ===========
Earnings/(loss) per ordinary
share (pence)
From continuing and
discontinued operations:
Basic and diluted 5 0.065p (0.005)p (0.02)p
=========== =========== ===========
SOVEREIGN MINES OF AFRICA PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
As at As at As at
30 June 30 June 31 December
2017 2016 2016
Note Unaudited Unaudited Audited
GBP GBP GBP
FIXED ASSETS
Available for sale
financial assets 4 801,034 - -
Intangible assets - - -
------------------ ------------------ ------------------
801,034 - -
------------------ ------------------ ------------------
CURRENT ASSETS
Other receivables 11,652 - 2,438
Cash at bank 278,235 452,866 399,446
Assets classified
as held for sale 4 - - -
------------------ ------------------ ------------------
289,887 452,866 401,884
CURRENT LIABILITIES
Trade and other payables (27,348) (27,131) (49,883)
----------------- ----------------- ------------------
NET CURRENT ASSETS 262,538 425,735 352,001
---------------- ---------------- ------------------
NET ASSETS 1,063,573 425,735 352,001
=========== =========== ===========
EQUITY ATTRIBUTABLE
TO EQUITY
HOLDERS OF THE COMPANY
Share capital 6 3,163,589 3,163,589 3,163,589
Share premium account 5,563,520 5,563,520 5,563,520
Reconstruction reserve (586,100) (586,100) (586,100)
Share-based payment
reserve 696,097 606,108 690,126
Retained earnings (7,773,533) (8,321,382) (8,479,134)
---------------- ---------------- ----------------
TOTAL EQUITY 1,063,573 425,735 352,001
=========== =========== ===========
SOVEREIGN MINES OF AFRICA PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2017
Six months Six months Year ended
to 30 June to 30 June 31 December 2016
2017 2016
Unaudited Unaudited Audited
GBP GBP GBP
Net cashflow
used in
operating
activities 3 (121,211) (49,485) (101,724)
Cash flows
from
financing
activities
Finance
income - 1,181 -
------------------------------------------- ------------------------------------------- ---------------------------------------------------
- 1,181 -
Net decrease
in cash and
cash
equivalents (121,211) (48,304) (101,724)
Cash and
cash
equivalents
at
beginning
of period 399,446 501,170 501,170
------------------------------------------- ------------------------------------------- ---------------------------------------------------
Cash and
cash
equivalents
at end of
period 278,235 452,866 399,446
=========== =========== ===========
All cashflows are from continuing operations.
SOVEREIGN MINES OF AFRICA PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 June 2017
Share Share Reconstruction Retained Share-based Total
capital premium reserve earnings payment
reserve
GBP GBP GBP GBP GBP GBP
At 1 January
2016 3,163,589 5,563,520 (586,100) (8,277,587) 600,305 463,727
Loss and
total
comprehensive
income for
six months
ended 30
June 2016 - - - (43,795) - (43,795)
Share-based
payment
expense - - - - 5,803 5,803
________ ________ ________ ________ _______ ________
At 30 June
2016 3,163,589 5,563,520 (586,100) (8,321,382) 606,108 425,735
Loss and
total
comprehensive
income for
six months
ended 31
December
2016 - - - (157,752) - (157,752)
Share-based
payment
expense - - - - 84,018 84,018
________ ________ ________ ________ ________ ________
At 31 December
2016 3,163,589 5,563,520 (586,100) (8,479,134) 690,126 352,001
Total
comprehensive
income for
six months
ended 30
June 2017 - - - 705,601 - 705,601
Share-based
payment
expense - - - - 5,971 5,971
________ ________ ________ ________ _______ ________
At 30 June
2017 3,163,589 5,563,520 (586,100) (7,773,533) 696,097 1,063,573
======= ======== ======== ======= ======= ========
SOVEREIGN MINES OF AFRICA PLC
Notes to the interim consolidated financial information
Six months ended 30 June 2017
1. GENERAL
These unaudited consolidated interim financial statements are
for the six months ended 30 June 2017. They do not include all the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements for the year ended 31 December 2016, which were prepared
under International Financial Reporting Standards ("IFRS") as
adopted by the European Union ("EU"). A number of new standards,
amendments to existing standards and interpretations were effective
from 1 January 2017. The adoption of these amendments did not have
an impact on the interim financial statements for the six months
ended 30 June 2017.
The consolidated interim financial statements have been prepared
under the historical cost convention except for certain fair value
adjustments required by certain standards. These statements do not
constitute statutory accounts under s434 of the Companies Act 2006
(the "Act").
The statutory accounts for the year ended 31 December 2016 have
been filed with the Registrar of Companies. Those accounts have
received an unqualified audit report and did not contain statements
or matters to which the auditors drew attention under the Act.
The Directors are satisfied that the Company has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, these interim financial statements have been
prepared on a going concern basis as the Directors are of the
opinion that the Company has sufficient funds to meet their ongoing
working capital and committed capital expenditure requirements
The interim financial information is unaudited. The Company's
operations are not subject to seasonality or cyclicality. No
dividend has been declared or paid in this interim period.
2. ACCOUNTING POLICIES
The principal accounting policies and methods of computation
have remained unchanged from those used in the preparation of the
2016 annual financial statements and are expected to be used for
the 31 December 2017 annual financial statements.
SOVEREIGN MINES OF AFRICA PLC
Notes to the interim consolidated financial information
Six months ended 30 June 2017
3. CASH FLOWS FROM OPERATING ACTIVITIES
Six months Six months Year ended
to to
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP GBP GBP
Loss before taxation from
continuing operations (95,433) (43,795) (201,547)
Adjustments for:
Finance income - (1,181) -
Share-based payment expense 5,971 5,803 89,821
------------------- ------------------- --------------------
(89,462) (39,173) (111,726)
Increase in receivables (9,214) - (2,438)
(Decrease)/increase in
payables (22,535) (10,312) 12,440
---------------- ---------------- ----------------
Net cashflow used in operating
activities (121,211) (49,485) (101,724)
============= ============= =============
All cashflows are from continuing operations.
4. DISCONTINUED OPERATION
On 20 January 2017, the Company sold its 75% interest in the
Mandiana Gold Project ("Mandiana") in Republic of Guinea, West
Africa to Volcanic Gold Mines Inc. ('Volcanic'), a Canadian
publicly listed mining company. In consideration for the sale, the
Company received 2,502,489 common shares in Volcanic representing
9.9% of the outstanding share capital of Volcanic at the time of
transaction. The gain on disposal is presented in this interim
report as a discontinued operation. At 31 December 2016, the
intangible asset was classified as held for sale.
The gain on disposal of GBP656,140 is calculated is the
difference between the fair value of the consideration and the book
value at the date of disposal.
The fair value (the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable, willing
parties in an arm's length transaction) of the Volcanic shares on
20 January was GBP656,140 (2,502,489 at CAD$ 0.43 per share
translated at the exchange rate on the day of CAD$/GBP 1.64). The
book value of the asset was nil as a result of it being fully
written down in 2015.
The shares in Volcanic have been classified as an 'Available for
Sale' financial asset in accordance with IAS 39 'Financial
Instruments: recognition and measurement'. On initial recognition,
the asset is recognised at fair value. The shares are revalued at
each balance sheet date with movements being recognised through
Other Comprehensive Income.
SOVEREIGN MINES OF AFRICA PLC
Notes to the interim consolidated financial information
Six months ended 30 June 2017
5. LOSS/EARNINGS PER SHARE
Six months Six months Year ended
to to
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
Weighted average number
of ordinary shares in
issue 860,858,955 860,858,859 860,858,955
=============== ====================== ===================
Profit/(loss) after
taxation (GBP)
From continuing operations (95,433) (43,795) (201,547)
From discontinued
operations 656,140 - -
------------------- ---------------------- -------------------------
560,707 (43,795) (201,547)
=============== ====================== ===================
Earnings/(loss) per share from continuing
and discontinued operations attributable
to equity holders of the parent during
the period:
Basic earnings/(loss)
Per Share (pence)
From continuing operations (0.011) (0.005) (0.02)
From discontinued
operations 0.076 - -
------------------- ---------------------- -------------------
0.065 (0.005) (0.02)
============= =================== ===================
Due to there being a loss during the period from continuing
operations, the share options and warrants are anti-dilutive and
therefore the diluted earnings/(loss) per share is the same as the
basic earnings/(loss) per share.
6. SHARE CAPITAL
Issued and fully paid:
2017 2016 2017 2016
No. of No. of shares GBP GBP
shares
Ordinary shares of
GBP0.0001 each 860,859,050 860,859,050 3,163,589 3,163,589
================== ================== ============= ==============
SOVEREIGN MINES OF AFRICA PLC
Notes to the interim consolidated financial information
Six months ended 30 June 2017
7. POST BALANCE SHEET EVENTS
Post year end the Company has sold a total of 1,533,989 of its
shares in Volcanic. The average share price for the sales is
CAD$0.43, resulting in a total consideration, net of commission of
GBP402,640.
A Memorandum of Understanding was signed on 28 September 2017
with an Indian business to acquire its specialist eyewear
manufacturing company.
8. COPIES OF INTERIM REPORT
Copies of the interim report are available to the public from
the Company at Lakeside Fountain Lane, St Mellons, Cardiff, United
Kingdom, CF3 0FB during normal office hours, Saturdays and Sundays
excepted, for 14 days from today and are available on the website
at www.sovmines.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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