TIDMMIR
RNS Number : 1239U
Mining Investments Resources PLC
28 November 2013
Mining Investments Resources plc
("MIR" or "the Company")
Audited Results for the year ended 30 June 2013
Proposed share capital reorganisation
Notice of Annual General Meeting
and
Posting of Annual Report and Accounts
Chairman's review
The twelve month period to 30 June 2013 was one of
implementation of the Company's strategy to make investments in
mining companies in Russia. Mining Investments Resources plc (MIR)
business development effort in Russia has been led by Dr Pavel
Kepezhinskas, a senior member of the Russian mining community who
has a successful track record of founding junior mining companies
in Russia, two of which (Silver Bears Resources and Amur Minerals
Corporation) have been taken public on the Canadian and UK stock
exchanges respectively. In November 2013, Dr Kepezhniskas formally
joined the Board of MIR as Director of Business Development and is
a shareholder in the Company holding 15 million shares (11.69 per
cent.).
This strategy resulted in an announcement on 5 November 2012 of
MIR entering into a Strategic Alliance Agreement with Artel Vostok,
a company which is one of the main gold alluvial mining companies
in the northern region of Khabarovsk and the announcement of MIR
undertaking a potential investment in a silver mine in the
Primorsky region of Russia.
The period towards the end of the 2012/13 financial year was
very difficult for MIR as well as many other junior mining
companies. The transactions which MIR has focused on are
investments in projects to mine precious metals and unfortunately
the gold price has fallen dramatically by 24 per cent. to October
2013. The silver price has also been volatile and 2 year silver
prices have fallen from around $32/oz to a low of $18.61/oz in
2013, but have recovered slightly to around the $22/oz level. The
gold price had been steadily increasing for 12 years prior to the
unexpected 2013 gold price crash and this created uncertainty in
the financial markets. Accordingly, MIR has been obliged to conduct
its negotiations slowly in order to ensure it is entering into
investment opportunities which have a good chance of being able to
raise the additional funding which will be required to support
them. Also, in order to maintain its investment company status MIR
was obliged to keep funds invested in junior mining companies and
some of these investments have fallen in value along with the
junior mining sector.
At the current time the gold and silver prices have stabilised
at levels which are historically still high and offer attractive
investment opportunities to develop the sort of projects which MIR
is focused on, all of which have high grade deposits. We are
optimistic that Artel Vostok will prevail in the licencing process
and that the Primorsky silver project will be secured on attractive
terms. MIR is also actively holding discussions relating to a
number of other projects in the Far East of Russia and we are very
hopeful that we will be able to widen the portfolio during the
forthcoming year.
Artel Vostok Strategic Alliance Agreement
During the year, MIR entered into a Strategic Alliance Agreement
with Artel Vostok (www.artelvostok.ru), an influential company in
the Khabarovsk region of Russia, which operates alluvial mines and
undertakes mining exploration activities as a contractor for other
mining companies. Artel Vostok operates in the North of Khabarovsk,
based in the Kiran camp. The Artel Vostok Strategic Alliance
agreement results from a relationship which Dr Kepezhinskas has had
for 18 years with Artel Vostok in which he assisted Artel Vostok in
identifying and successfully exploring the source of gold for
another of Artel Vostok's alluvial rivers, at Avleyakan. The
Avleyakan mine was successfully explored in joint venture with a
company which Dr Kepezhinskas assisted in founding, Silver Bears
Resources which is quoted on the Toronto stock exchange (Ticker
SBR).
The Agreement envisages that Artel Vostok will seek to acquire
exploration licences over several areas which have been identified
as having geological exploration potential and thereafter MIR
intends to acquire an interest in the licences. It also encompasses
co-operation on other projects within the area of operations of
Artel Vostok which is an area in the Khabarovsk region which
contains many other identified mineral exploration
opportunities.
As a first step, Artel Vostok has applied for the first
exploration licence. Exploration licence applications in Russia are
subject to approval at the local level for submission to Moscow, an
approval process in Moscow and then are published for formal
application. The formal application process is held by a National
Licence round. MIR's management have been informed that this
exploration area has been approved in the region and in Moscow and
will be included in the next round of licencing of the Russian
Federation. Once a licencing decision has been made MIR will be in
a position to make an investment on terms to be agreed.
Primorsky Silver Project
MIR is also undertaking negotiations to invest in a company
which controls a silver mine in the Primorsky region of Russia, and
signed a letter of intent for an investment which is conditional
upon due diligence and technical appraisal. The programme defined
in the letter of intent was to restart.
The Primorsky region of Russia contains a significant number of
unexplored discoveries of high grade silver resources. Dr
Kepezhinskas has been studying the geology of this region since
1992. The Primorsky silver mine was the only producing silver mine
in the region during the Soviet Union and MIR believes provides a
strategic acquisition to implement a wider strategy of exploration
and production in one of the last unexplored silver provinces in
the world.
During the due diligence and technical appraisal stage, MIR's
management identified the possibility of upgrading the current
processing facilities to increase recovery and replace the
necessity to smelt a concentrate. In addition, the Company believes
that it should be possible to reprocess tailings from the existing
tailings dam. The feasibility of undertaking a plant upgrade and
accurately estimating the recovery factors for the ore and tailings
is therefore subject to the metallurgical testing of the ore and
tailings from the existing mine.
The letter of intent was entered into at a time of higher silver
prices and with the considerable turbulence in silver prices and
the financial markets for precious metals companies, the Board has
had to consider whether it is prudent to proceed with the
transaction and negotiations have been proceeding slowly as a
result. However, given the recent current stability in silver
prices, increased confidence in the financial markets for silver
investments combined with the economic advantages of the plant
revamp, which should compensate for the lower silver price, MIR is
now in the process of renegotiating terms for potential
investment.
As the plant upgrade possibilities and tailings recovery require
confirmation with sampling and testing, MIR has amended its letter
of intent so that the first stage involves a programme, estimated
to cost around US$100,000, to survey the volume and grade of the
tailings and to undertake metallurgical test work on the ore and
tailings. At current silver price levels, the Directors believe
that the Primorsky silver investment offers attractive economics if
approached in a prudent manner. The Primorsky silver mine is an
unusual opportunity because it contains some high grade silver
veins (C1 resources are grading over 600g/t) and substantial
exploration areas which also offer the possibility of identifying
additional high grade resources.
Financial results Year ended 30 June 2013
The financial results for year-end resulted in a loss of
GBP368k. During the year the Company made realised gains on short
term quoted investments of GBP117k and received GBP12k in
dividends. At the year-end, short term quoted investments still
held showed an unrealised loss of GBP100k which was in line with
the general fall in junior mining company stocks. Included within
the loss for the year is GBP141k in respect of the costs of
undertaking the legal and technical due diligence in Russia on the
projects in which MIR is engaged. The remaining GBP356k was
incurred in the general and administrative costs of running the
Company.
The Company generated a net cash outflow from operating
activities of GBP429k which included GBP163k in respect of payments
to settle debts arising prior to the restructuring of MIR, when the
Company traded as Lagan Capital Plc. In addition, the company had a
net cash outflow of GBP118k resulting from its investing
activities. This was offset by net cash inflows of GBP930k from the
issue of new shares. As a result, the Company has generated a net
increase in cash and cash equivalents of GBP383k.
Proposed share capital reorganisation
The Company's Annual Report and Accounts (the "Annual Report")
for the year ended 30 June 2013 has today been sent to shareholders
together with notice of the Annual General Meeting (the "AGM") to
be held at the offices of Kerman & Co LLP, 200 Strand WC2R 1 DJ
at 10.30 am on Friday 20 December 2013 to consider various
resolutions (the "Resolutions"). The Annual Report and notice of
AGM are available on the Company's website: www.mirplc.com.
Included within the Resolutions is a special resolution
proposing a reorganisation of the Company's share capital (the
"Capital Reorganisation"). As detailed in the Annual Report and
other recent announcements the Company is considering a number of
investment opportunities all of which are likely to require the
Company to raise capital. As the Company's current share price is
significantly below the Company's current nominal value of each
ordinary share of 1p each, it would be unable to issue shares at or
around the current share price as the law prohibits the Company
issuing shares at a discount to its nominal value. As a result, it
is proposed that the Company performs the Capital Reorganisation in
order to reduce the nominal value of its shares on the following
basis: the existing issued ordinary shares of 1p each in the
capital of the Company ("Existing Ordinary Shares") as at the
Record Date, being 6.00 pm on 19 December 2013, will be subdivided
into as one new ordinary share of 0.01p each in the capital of the
Company ("New Ordinary Shares") and one A deferred share of 0.99p
each in the capital of the Company ("A Deferred Shares"). Subject
to the passing of the Resolutions, the New Ordinary Shares will for
all material purposes have the same rights as the Existing Ordinary
Shares and the A Deferred Shares will have the rights and
restrictions ascribed to them in the Company's articles of
association as amended.
Following the Capital Reorganisation there will be 128,281,120
ordinary shares of 0.01p in issue and each shareholder will
continue to hold the same number of shares as before the Capital
Reorganisation.
In addition the directors are seeking authority to issue and
allot new ordinary shares up to an aggregate nominal amount of
GBP500,000 and dis-apply statutory pre-emption rights up to the
same amount. The directors believe these authorities together with
the Capital reorganisation will provide them with the greatest
flexibility when seeking to negotiate and conclude investments and
would recommend shareholders vote in favour of the resolutions.
Michael Nosworthy
Executive Chairman
27 November 2013
Enquiries
Mining Investments Resources
Michael Nosworthy plc +33 675657274
Mining Investments Resources
Steve Roberts plc 07812043436
Northland Capital Partners
Luke Cairns / Matthew Limited
Johnson (Nomad and Joint Broker) 020 7796 8800
Peterhouse Corporate Finance
Jon Levinson / Lucy Limited
Williams (Joint Broker) 020 7469 0936
Consolidated statement of comprehensive income
for the year ended 30 June 2013
30 June 30 June
2013 2012
GBP000 GBP000
----------------------------------------------------- ----------- ---------
Revenue 12 -
----------------------------------------------------- ----------- ---------
Other income 117 -
Total income 129 -
----------------------------------------------------- ----------- ---------
Direct project costs (141)
Administrative expenses (356) (634)
----------------------------------------------------- ----------- ---------
Total expenditure (497) (634)
----------------------------------------------------- ----------- ---------
Operating loss (368) (634)
Finance costs - -
----------------------------------------------------- ----------- ---------
Pre-tax loss for the year (368) (634)
Tax expense - -
----------------------------------------------------- ----------- ---------
Total loss for the year (368) (634)
Other Comprehensive Income
----------------------------------------------------- ----------- ---------
Items which will be subsequently reclassified
to profit and loss
----------------------------------------------------- ----------- ---------
Unrealised loss on investments (100) -
----------------------------------------------------- ----------- ---------
Total comprehensive income for the year (468) (634)
----------------------------------------------------- ----------- ---------
Loss per share
- basic (00.60p) (11.48p)
- diluted (00.60p) (11.48p)
----------------------------------------------------- ----------- ---------
Consolidated balance sheet
as at 30 June 2013
30 June 30 June
2013 2012
GBP000 GBP000
----------------------------------- --------- ---------
Assets
Non-current assets 285
Investments - -
Loans and receivables - -
----------------------------------- --------- ---------
Total non-current assets 285 -
----------------------------------- --------- ---------
Current assets
Trade and other receivables 13 -
Cash and cash equivalents 403 20
----------------------------------- --------- ---------
416 20
----------------------------------- --------- ---------
Total assets 701 20
----------------------------------- --------- ---------
Equity
Capital and reserves attributable
to the Company's equity holders
Share capital 3,767 2,539
Share premium account 7,633 7,633
Retained earnings (10,914) (10,335)
----------------------------------- --------- ---------
Total equity 486 (163)
----------------------------------- --------- ---------
Liabilities
Current liabilities
Trade and other payables 215 183
Non-current liabilities
Trade and other payables - -
----------------------------------- --------- ---------
Total liabilities 215 183
----------------------------------- --------- ---------
Total equity and liabilities 701 20
----------------------------------- --------- ---------
Consolidated cash flow statement
for the year ended 30 June 2013
Year ended Year ended
30 June 30 June
2013 2012
GBP000 GBP000
------------------------------------------------------- ------------- --------------------
Operating activities
Loss for the year before tax (368) (634)
Gain on disposal of investments (117)
Impairment on financial assets - 454
Change in trade and other receivables (13) 331
Change in trade and other payables 32 14
Liabilities settled through issue
of shares 37 -
------------------------------------------------------- ------------- --------------------
Net cash (outflow)/inflow from operating
activities (429) 165
------------------------------------------------------- ------------- --------------------
Investing activities
Purchase of listed investments (709) -
Proceeds from sale of listed investments 591 (173)
------------------------------------------------------- ------------- --------------------
Net cash inflow from investing activities (118) (173)
------------------------------------------------------- ------------- --------------------
Financing activities
Proceeds from issue of share capital 1,041 -
------------------------------------------------------- ------------- --------------------
Costs directly attributable to issue
of share capital (111) -
------------------------------------------------------- ------------- --------------------
Net cash inflow from financing activities 930 -
------------------------------------------------------- ------------- --------------------
Cash and cash equivalents, beginning
of year 20 28
Net increase/(decrease) in cash
and cash equivalents 383 (8)
------------------------------------------------------- ------------- --------------------
Cash and cash equivalents, end of
year 403 20
------------------------------------------------------- ------------- --------------------
Consolidated statement of changes
in equity
for the year ended 30 June
2013
Share Profit Total
Share capital premium & loss equity
GBP000 GBP000 GBP000 GBP000
------------------------------------- ---------------- ------------- ----------- ------------
Balance as at 30 June 2011 2,539 7,633 (9,701) 471
------------------------------------- ---------------- ------------- ----------- ------------
Shares issued - - - -
------------------------------------- ---------------- ------------- ----------- ------------
Transactions with owners - - - -
------------------------------------- ---------------- ------------- ----------- ------------
Loss for the year - - (634) (634)
------------------------------------- ---------------- ------------- ----------- ------------
Total comprehensive income
for the year - - (634) (634)
------------------------------------- ---------------- ------------- ----------- ------------
Balance as at 30 June 2012 2,539 7,633 (10,335) (163)
Shares issued 1,228 - (111) 1,117
------------------------------------- ---------------- ------------- ----------- ------------
Loss for the year - - (368) (368)
------------------------------------- ---------------- ------------- ----------- ------------
Other comprehensive income - - (100) (100)
------------------------------------- ---------------- ------------- ----------- ------------
Total comprehensive income
for the year - - (468) (468)
------------------------------------- ---------------- ------------- ----------- ------------
Balance as at 30 June 2013 3,767 7,633 (10,914) 486
------------------------------------- ---------------- ------------- ----------- ------------
Notes
1. Financial statements
The financial information set out in this announcement does not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006 for the year ended 30 June 2013 or for the
year ended 30 June 2012, but is derived from those accounts. The
financial statements for 2013 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The
auditors have issued an unqualified report on these accounts. The
auditor has issued an unqualified opinion in respect of the
financial statements which does not contain any statements under
the Companies Act 2006, Section 498(2) or Section 498(3).
2. Summary of significant accounting policies
Basis of preparation
The financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union. The financial statements have
been presented in accordance with IAS 1 Presentation of Financial
Statements (Revised 2007). The Group has elected to present a
"statement of comprehensive income" as one statement.
The Directors have prepared these accounts on a going concern
basis, since they believe that the Group will be able to pay its
liabilities as they fall due. The accounts are prepared according
to the historic cost convention with the exception of investments
designated as available for sale which are held at fair value.
Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the business review and the financial position of
the Group. In addition, the directors' report includes the Group's
objectives, policies and processes for managing its capital and its
financial risk management objectives. Further details of the
Company's financial instruments and hedging activities and its
exposure to credit risk and liquidity risk are detailed below.
A portion of the Group's working capital is currently invested
in a portfolio of listed companies. These assets will be liquidated
as and when required in order to meet the Group's liabilities and
expenses. The Directors recognise that stock market volatility
could have either a positive or negative effect on the value of the
shareholdings and hence on this source of working capital. Prior to
the liquidation of shareholdings as soon as is considered
opportune, the diversification of holdings over a number of
different shares reduces the volatility and risk of the portfolio
to levels closer to that of the market in general.
In considering going concern, the Directors have prepared cash
flow forecasts to the end of December 2014 and these show adequate
current working capital to meet the Groups' obligations until that
date. Even in the event of negative market movements reducing the
share portfolio's value prior to its liquidation, the Directors
remain confident that these current resources alone will be
adequate to meet the Groups' obligations for the next 12 months.
The forecasts are based on the assumption that the Group will not
generate any significant cash inflows during this period in respect
of its investments and that working capital requirements will be
maintained at currently planned levels.
In common with many mining and mining exploration companies, the
Company needs to raise finance for its activities in discrete
tranches to finance its activities for limited periods. The
Directors are confident that the Company currently has a range of
project or development activities against which it has a reasonable
expectation of being able to raise further funds for both project
expenditure and corporate expenses. Such activities would be
supplementary to the forecast activities included in the current
working capital forecast.
Based on this assessment, the Directors have a reasonable
expectation that the Group has adequate resources to continue as a
viable entity for the foreseeable future and the Directors
therefore continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
3. Dividends
The directors do not recommend the payment of a dividend (2012:
nil)
Annual Report
The Annual Report will be posted to all shareholders on 28
November 2013 and will be available on the Company's website at
www.mirplc.com. Additional copies will be made available to the
public, free of charge, from the Company's registered office at
Bridge House, London Bridge, London, SE1 9QR.
Annual General Meeting
The Company's Annual General Meeting will be held on Friday 20
December 2013 at 10.30 a.m. at the offices of Kerman & Co. LLP,
200 Strand, London WC2R 1DJ. The Notice of the AGM and the
associated explanatory notes relating to the proposed resolutions
at that meeting are included in the Company's annual report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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