Horizonte Minerals Plc: Final Results
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E-mailLONDON, UNITED KINGDOM -- (Marketwired) -- 03/17/17 -- Horizonte Minerals Plc (AIM: HZM)(TSX: HZM) ('Horizonte' or 'the Company'), the nickel development company focused in Brazil, announces its final results for the year ended 31 December 2016.
Highlights
-- Publication of PFS on Araguaia Nickel Project which demonstrated robust
economics
-- Post tax NPV8 of US$581 million at a nickel price of US$14,000/t and an
NPV8 of US$328 million at US$12,000/t Ni
-- Post tax IRR of 26.4% at US$14,000/t and 19.3% at US$12,000/t Ni
-- High grade ore with average nickel grade of 1.96% for the first 10 years
of production
-- Project on the lower range of the global cost curve with C1 cash costs
of US$3.15/Ib Ni (US$6,948/t Ni)
-- GBP 9 million fundraise, including key strategic institutions, completed
in December 2016 to finance the Araguaia Feasibility Study (FS) - cash
of GBP 9.3 million as at year end
-- Strong balance sheet with net assets of GBP 37 million
-- Future demand for nickel looks robust with predicted growth running
between 2% and 4% this year
-- Feasibility Study underway with planned completion end of 2017
Chairman's Statement
2016 was a significant year for Horizonte which saw us achieve numerous major milestones at our Araguaia Nickel Project in Brazil. These include the delivery of a Pre-Feasibility Study ('PFS'), the receipt of our Preliminary Environmental Licence, and raising the funds to deliver a Feasibility Study in 2017. We are now focussed on taking this project up the value curve, through the Feasibility Study process and into development as one of the lower cost ferronickel operations in the market, benefitting from its high grade resource and low capital intensity.
Our updated PFS demonstrates that the enlarged Araguaia Project is one of the largest and highest grade undeveloped nickel saprolite resources globally. It will generate US$1.3 billion in free cash flow over the Life of Mine ('LOM') considering an estimation of US$12,000/t long term. Having combined Glencore's adjacent nickel project with our own Araguaia project in a low-cost acquisition which was completed in 2016, the new compelling economics highlight a post-tax NPV of U$328 million and IRR of 19% based on a long-term nickel price of US$12,000/t. Using the bank's consensus of a mid-term nickel price of US$14,000/t, the NPV increases to US$581 million with an IRR of 26.4% showing the significant gearing that is available with any future increase in nickel prices.
Once developed, Araguaia, is expected to produce around 14,500 tonnes of nickel per year, with a resource that is now a Tier 1 world class asset in terms of size and grade. The value is demonstrated in this updated PFS which now shows an average grade for the first 10 years of mining of 1.96% nickel, and the life of mine grade over 28 years averaging 1.77% nickel. This places the project firmly in the upper quartile of the global grade curve for this type of deposit.
Most significantly the PFS also demonstrates that Araguaia is cash flow positive at today's nickel prices, which puts the project within a limited group of global assets that are considered viable in the current low nickel price environment. The start of 2016 saw nickel prices at a 13 year low of US$7,750/t, however after base metals rallied in the last quarter of 2016, many banks and analysts raised their 2017 forecasts for nickel. There are multiple reasons for this including the United States of America's ambitious infrastructure spending plans which are expected to boost global metal demand growth over the coming years, coupled with the closing of multiple nickel mines which will slow market growth and curtail supply.
Morgan Stanley and Credit Suisse both picked nickel as its number one metal for 2016. Wood Mackenzie have cited that the "optimistically resurgent Chinese stainless market" will be the contributing factor to the predicted favourable pricing fundamentals and Macquarie has stated that nickel use in batteries could more than double over the next 10 years. Now is the time to be developing the next generation projects at the low-price range to create maximum value. We are targeting nickel production from Araguaia by 2019 which aligns the project ideally with this predicted increase in nickel price over the mid-term, offering leveraged exposure to one of the world's next major nickel mines at the optimum time.
Another testament to the quality of Araguaia, is that we successfully raised GBP 9 million in November 2016 from institutions in both the UK and Canada to fund the Feasibility Study. As a result, we were delighted to welcome two new significant institutional investors, JP Morgan and Hargreave Hale, to our already strong shareholder register which also includes Teck, Henderson, City Financial, Richard Griffiths. I believe that the calibre of this group of cornerstone investors is a strong endorsement for a company of our size.
Eager to move forward we appointed a Feasibility Study Manager in January 2017. With a high calibre nickel development team (ex Falconbridge; Xstrata; Anglo American) already in place we believe Wagner Oliveira will be a valuable addition to our team, bringing considerable experience in the nickel arena having worked with Anglo American plc on its Barro Alto ferronickel operation and prior to this at the Codemin ferronickel plant in Brazil. We have already finalised the selection of the engineering groups to undertake the Feasibility Study with a view to delivering the full report by the end of 2017. Having been granted the Preliminary Licence in 2016 which demonstrated the Para State government's confidence in the credibility and viability of Araguaia, we have been able to progress the work towards the Installation Licence which we will apply for this year, the receipt of which will permit the construction of the project.
Conclusion
As a team, I am proud that we have taken Araguaia from a grassroots discovery up the development curve to where we stand today, about to embark on a Feasibility Study for one of the largest nickel projects in the world. Despite difficult nickel pricing, 2016 was a year of growth for Horizonte and the year ahead will see us transform into a near-term nickel producer, taking advantage of the forecasted rise in the price of the metal. I would like to take this opportunity to thank the Horizonte Board and Management team for their continued hard work towards the development of your company and I look forward to the year ahead with great confidence.
David J Hall, Chairman
16 March 2017
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HORIZONTE MINERALS PLC
We have audited the financial statements of Horizonte Minerals plc for the year ended 31 December 2016 which comprise the consolidated statements of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of changes in equity, the consolidated and company statements of cash flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council's (FRC's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC's website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of Group and Company's affairs as
at 31 December 2016 and of the Group's loss for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
-- have been prepared in accordance with the requirements of the Companies
Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-- the information given in the strategic report and directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
-- the strategic report and directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns adequate for
our audit have not been received from branches not visited by us; or
-- the financial statements are not in agreement with the accounting
records and returns; or
-- certain disclosures of directors' remuneration specified by law are not
made; or
-- we have not received all the information and explanations we require for
our audit.
Stuart Barnsdall (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London, UK
Date: 16 March 2017
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
INDEPENDENT AUDITOR'S REPORT IN RESPECT OF CANADIAN NATIONAL INSTRUMENT 52-107 (ACCEPTABLE ACCOUNTING PRINCIPALS AND AUDITING STANDARDS)
To the Shareholders of Horizonte Minerals PLC
We have audited the accompanying financial statements of Horizonte Minerals PLC for the year ended 31 December 2016 which comprise the consolidated statement of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of changes in equity, the consolidated and company statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in the preparation of the consolidated financial statements is applicable law and International Financial Reporting Standards (IFRSs).
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the applicable financial reporting framework, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian Generally Accepted Auditing Standards (Canadian GAAS). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Horizonte Minerals PLC as at 31 December 2016 and its financial performance and its cash flows for the year then ended in accordance with IFRSs.
Other matters
During the year ended 31 December 2016, the Company changed its auditor and as such the audit of the financial statements for the year ended 31 December 2015 was performed by the Group's previous auditors, except for the restated amounts and disclosures relating to the prior year adjustment described in note 21 which we have audited.
BDO LLP London United Kingdom 16 March 2017
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
Year ended
Year ended 31 December
31 December 2015
2016 (Restated)
Notes GBP GBP
----------------------------------------------------------------------------
Administrative expenses (1,009,623) (864,892)
Charge for share options granted (324,890) (100,248)
Changes in fair value of contingent
consideration 17 (260,632) (26,969)
Gain/(loss) on foreign exchange 65,241 (251,409)
Other losses - impairment of available-
for-sale assets - (253,006)
----------------------------------------------------------------------------
Operating loss 6 (1,529,904) (1,496,524)
Finance income 8 4,387 14,918
Finance costs 8 (220,817) (63,093)
----------------------------------------------------------------------------
Loss before taxation (1,746,334) (1,544,699)
Income tax 9 - -
----------------------------------------------------------------------------
Loss for the year from continuing
operations attributable to owners of the
parent (1,746,334) (1,544,699)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
Impairment in value of available-for-sale
financial assets - 253,006
Currency translation differences on
translating foreign operations 16 9,315,180 (6,354,056)
----------------------------------------------------------------------------
Other comprehensive income for the year,
net of tax 9,315,180 (6,101,050)
----------------------------------------------------------------------------
Total comprehensive income for the year
attributable to owners of the parent 7,568,846 (7,654,749)
----------------------------------------------------------------------------
Loss per share from continuing operations
attributable to owners of the parent
----------------------------------------------------------------------------
Basic and diluted (pence per share) 19 (0.240) (0.290)
----------------------------------------------------------------------------
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
Company number: 05676866
As at 31 December 2016
31 December 1 January
31 December 2015 2015
2016 (Restated) (Restated)
Notes GBP GBP GBP
----------------------------------------------------------------------------
Assets
Non-current assets
Intangible assets 10 32,017,796 20,351,355 21,075,565
Property, plant & equipment 862 11,888 54,390
----------------------------------------------------------------------------
32,018,658 20,363,243 21,129,955
----------------------------------------------------------------------------
Current assets
Trade and other receivables 35,493 40,912 22,709
Cash and cash equivalents 12 9,317,781 2,738,905 5,030,968
----------------------------------------------------------------------------
9,353,274 2,779,817 5,053,677
----------------------------------------------------------------------------
Total assets 41,371,932 23,143,060 26,183,632
----------------------------------------------------------------------------
Equity and liabilities
Equity attributable to
owners of the parent
Share capital 13 11,719,343 6,712,044 4,924,271
Share premium 14 35,767,344 31,252,708 31,095,370
Other reserves 16 4,467,064 (4,848,116) 1,252,934
Retained losses (14,899,297) (13,477,853) (12,033,402)
----------------------------------------------------------------------------
Total equity 37,054,454 19,638,783 25,239,173
----------------------------------------------------------------------------
Liabilities
Non-current liabilities
Contingent consideration 17 3,643,042 3,161,592 335,327
Deferred tax liabilities 9 282,450 193,665 273,238
----------------------------------------------------------------------------
3,925,492 3,355,257 608,895
----------------------------------------------------------------------------
Current liabilities
Trade and other payables 17 391,986 149,020 335,894
----------------------------------------------------------------------------
391,986 149,020 335,894
----------------------------------------------------------------------------
Total liabilities 4,317,478 3,504,277 944,459
----------------------------------------------------------------------------
Total equity and
liabilities 41,371,932 23,143,060 26,183,632
----------------------------------------------------------------------------
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The Financial Statements were authorised for issue by the Board of Directors on 16 March 2017 and were signed on its behalf.
David J Hall, Chairman
Jeremy J Martin, Chief Executive Officer
Company Statement of Financial Position
Company number: 05676866
As at 31 December 2016
31 December 1 January
31 December 2015 2015
2016 (Restated) (Restated)
Notes GBP GBP GBP
----------------------------------------------------------------------------
Assets
Non-current assets
Property, plant & equipment 11 283 1,254 2,291
Investment in subsidiaries 25 43,670,347 40,292,156 33,361,507
----------------------------------------------------------------------------
43,670,630 40,293,410 33,363,798
----------------------------------------------------------------------------
Current assets
Trade and other receivables 35,423 18,739 13,818
Cash and cash equivalents 12 9,143,993 2,568,266 4,208,984
----------------------------------------------------------------------------
9,179,416 2,587,005 4,222,802
----------------------------------------------------------------------------
Total assets 52,850,046 42,880,415 37,586,600
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity and liabilities
Equity attributable to
equity shareholders
Share capital 13 11,719,343 6,712,044 4,924,271
Share premium 14 35,767,344 31,252,708 31,095,370
Merger reserve 16 10,888,760 10,888,760 10,888,760
Retained losses (9,915,498) (9,637,561) (10,159,288)
----------------------------------------------------------------------------
Total equity 48,459,949 39,215,951 36,749,113
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Non-current liabilities
Contingent consideration 17 3,643,042 3,161,591 335,327
----------------------------------------------------------------------------
3,643,042 3,161,591 335,327
----------------------------------------------------------------------------
Current liabilities
Trade and other payables 17 747,055 502,873 502,160
----------------------------------------------------------------------------
747,055 502,873 502,160
----------------------------------------------------------------------------
Total liabilities 4,390,097 3,664,464 837,487
----------------------------------------------------------------------------
Total equity and
liabilities 52,850,046 42,880,415 37,586,600
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The above Company Statement of Financial Position should be read in conjunction with the accompanying notes, loss for the period was GBP 602,827 (2015: GBP 421,479 profit).
The Financial Statements were authorised for issue by the Board of Directors on 16 March 2017 and were signed on its behalf.
David J Hall, Chairman
Jeremy J Martin, Chief Executive Officer
Statements of Changes in Equity
For the year ended 31 December 2016
Attributable to owners of the parent
-------------------------------------------------------------
Share Share Retained Other
capital premium losses reserves Total
Consolidated GBP GBP GBP GBP GBP
----------------------------------------------------------------------------
As at 1 January
2015
(previously
reported) 4,924,271 31,095,370 (9,526,869) (321,601) 26,171,171
----------------------------------------------------------------------------
Refer note 22 c - - - 1,574,535 1,574,535
Refer note 22 d - - (2,506,533) - (2,506,533)
----------------------------------------------------------------------------
As at 1 January
2015
(Restated) 4,924,271 31,095,370 (12,033,402) 1,252,934 25,239,173
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Loss for the
year - - (1,544,699) - (1,544,699)
Other
comprehensive
income:
Impairment of
available-for-
sale financial
assets - - - 253,006 253,006
Currency
translation
differences on
translating
foreign
operations - - - (6,354,056) (6,354,056)
----------------------------------------------------------------------------
Total
comprehensive
income for the
year - - (1,544,699) (6,101,050) (7,654,749)
----------------------------------------------------------------------------
Issue of
ordinary
shares 1,787,773 200,300 - - 1,988,073
Issue costs - (42,962) - - (42,962)
Share-based
payments - - 100,248 - 100,248
----------------------------------------------------------------------------
Total
transactions
with owners,
recognised
directly in
equity 1,787,773 157,338 100,248 - 2,045,359
----------------------------------------------------------------------------
As at 31
December 2015
(Restated) 6,712,044 31,252,708 (13,477,853) (4,848,116) 19,638,783
----------------------------------------------------------------------------
Loss for the
year - - (1,746,334) - (1,746,334)
Other
comprehensive
income:
Currency
translation
differences on
translating
foreign
operations - - - 9,315,180 9,315,180
----------------------------------------------------------------------------
Total
comprehensive
income for the
year - - (1,746,334) 9,315,180 7,568,846
----------------------------------------------------------------------------
Issue of
ordinary
shares 5,007,299 5,005,321 - - 10,012,620
Issue costs - (490,685) - - (490,685)
Share-based
payments - - 324,890 - 324,890
----------------------------------------------------------------------------
Total
transactions
with owners,
recognised
directly in
equity 5,007,299 4,514,636 324,890 - 9,846,825
----------------------------------------------------------------------------
As at 31
December 2016 11,719,343 35,767,344 (14,899,297) 4,467,064 37,054,454
A breakdown of other reserves is provided in note 18.
Attributable to equity shareholders
-------------------------------------------------------------
Share Share Retained Merger
capital premium losses reserves Total
Company GBP GBP GBP GBP GBP
----------------------------------------------------------------------------
As at 1 January
2015
previously
reported 4,924,271 31,095,370 (7,652,755) 10,888,760 39,255,646
Refer note 22 d - - (2,506,533) - (2,506,533)
As at 1 January
2015
(Restated) 4,924,271 31,095,370 (10,159,288) 10,888,760 36,749,113
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Loss and total
comprehensive
income for the
year - - 421,479 - 421,479
----------------------------------------------------------------------------
Issue of
ordinary
shares 1,787,773 200,300 - - 1,988,073
Issue costs - (42,962) - - (42,962)
Share-based
payments - - 100,248 - 100,248
----------------------------------------------------------------------------
Total
transactions
with owners,
recognised
directly in
equity 1,787,773 157,338 100,248 - 2,045,359
----------------------------------------------------------------------------
As at 31
December 2015
(Restated) 6,712,044 31,252,708 (9,637,561) 10,888,760 39,215,951
----------------------------------------------------------------------------
Loss and total
comprehensive
income for the
year - - (602,827) - (602,827)
----------------------------------------------------------------------------
Issue of
ordinary
shares 5,007,299 5,005,321 - - 10,012,620
Issue costs - (490,685) - - (490,685)
Share-based
payments - - 324,890 - 324,890
----------------------------------------------------------------------------
Total
transactions
with owners,
recognised
directly in
equity 5,007,299 4,514,636 324,890 - 9,846,825
----------------------------------------------------------------------------
As at 31
December 2016 11,719,343 35,767,344 (9,915,498) 10,888,760 48,459,949
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
31 December
31 December 2015
2016 (Restated)
Notes GBP GBP
----------------------------------------------------------------------------
Cash flows from operating activities
Loss before taxation (1,746,334) (1,544,699)
Finance income (4,387) (14,918)
Finance costs 220,817 63,093
Impairment of Peruvian reserves - 17,200
Impairment of available-for-sale
financial assets - 253,006
Charge for share options granted 324,890 100,248
Gain on sale of property, plant and
equipment - (24,453)
Exchange differences (177,940) 251,409
Change in fair value of contingent
consideration 260,632 26,969
Depreciation 1,084 1,419
----------------------------------------------------------------------------
Operating loss before changes in
working capital (1,121,238) (870,726)
Decrease/(increase) in trade and other
receivables 22,588 (19,635)
Increase/(decrease) in trade and other
payables 242,965 (37,154)
----------------------------------------------------------------------------
Net cash used in operating activities (855,685) (927,515)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from investing activities
Purchase of intangible assets (1,253,212) (2,663,260)
Proceeds from sale of property, plant
and equipment - 26,734
Interest received 4,387 14,918
----------------------------------------------------------------------------
Net cash used in investing activities (1,248,825) (2,621,608)
----------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from issue of ordinary shares 9,000,000 1,550,000
Issue costs (380,685) (42,962)
----------------------------------------------------------------------------
Net cash generated from financing
activities 8,619,315 1,507,038
----------------------------------------------------------------------------
Net increase/(decrease) in cash and
cash equivalents 6,514,805 (2,042,085)
----------------------------------------------------------------------------
Cash and cash equivalents at beginning
of year 2,738,905 5,030,968
Exchange gain/(loss) on cash and cash
equivalents 64,071 (249,978)
----------------------------------------------------------------------------
Cash and cash equivalents at end of the
year 12 9,317,781 2,738,905
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Major non-cash transactions
On 8 August 2016 the Company issued 50,729,922 new Ordinary shares in the company at a price of GBP 0.0199 per share to Xstrata as consideration for the acquisition of certain licences for the Glencore Araguaia Project from Xstrata Brasil Exploracao Mineral Ltda.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Company Statement of Cash Flows
For year ended 31 December 2016
31 December
31 December 2015
2016 (Restated)
Notes GBP GBP
----------------------------------------------------------------------------
Cash flows from operating activities
(Loss)/profit before taxation (602,827) 421,479
Finance income (1,668) (6,952)
Charge for share options granted 324,890 100,248
Exchange differences 283,555 (375,747)
Change in fair value of contingent
consideration 260,632 26,969
Depreciation 971 1,037
----------------------------------------------------------------------------
Operating profit before changes in
working capital 265,553 30,212
Increase in trade and other receivables (16,683) (4,921)
Increase in trade and other payables 244,182 713
----------------------------------------------------------------------------
Net cash flows generated from operating
activities 493,052 167,034
----------------------------------------------------------------------------
Cash flows from investing activities
Loans to subsidiary undertakings (2,573,088) (3,321,742)
Interest received 1,668 6,952
----------------------------------------------------------------------------
Net cash used in investing activities (2,571,420) (3,314,790)
----------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from issue of ordinary shares 9,000,000 1,550,000
Issue costs (380,685) (42,962)
----------------------------------------------------------------------------
Net cash generated from financing
activities 8,619,315 1,507,038
----------------------------------------------------------------------------
Net increase/(decrease) in cash and
cash equivalents 6,540,947 (1,640,718)
Exchange loss on cash and cash
equivalents 34,779 -
Cash and cash equivalents at beginning
of year 2,568,266 4,208,984
----------------------------------------------------------------------------
Cash and cash equivalents at end of the
year 12 9,143,993 2,568,266
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Major non-cash transactions
On 8 August 2016 the Company issued 50,729,922 new Ordinary shares in the company at a price of GBP 0.0199 per share to Xstrata as consideration for the acquisition of certain licences for the Glencore Araguaia Project from Xstrata Brasil Exploracao Mineral Ltda.
The above Company Statement of Cash Flows should be read in conjunction with the accompanying notes.
Notes to the Financial Statements
1 General information
The principal activity of Horizonte Minerals Plc ('the Company') and its subsidiaries (together 'the Group') is the exploration and development of base metals. The Company's shares are listed on the AIM market of the London Stock Exchange and on the Toronto Stock Exchange. The Company is incorporated and domiciled in England and Wales. The address of its registered office is 26 Dover Street, London W1S 4LY.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these Financial Statements are set out below. These policies have been consistently applied to all the years presented.
2.1 Basis of preparation
These Financial Statements have been prepared in accordance with International Financial Reporting Standards ('IFRSs') and IFRS interpretations Committee ('IFRS IC') interpretations as adopted by the European Union ('EU') and with IFRS and their interpretations issued by the IASB. The consolidated financial statements have also been prepared in accordance with and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Financial Statements have been prepared under the historical cost convention as modified by the revaluation of available-for-sale financial assets.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements, are disclosed in Note 4.
2.2 Changes in accounting policy and disclosures
a) New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that were effective for the first time for the financial year beginning 1 January 2016 that have had a material impact on the Group or Company.
b) New and amended standards, and interpretations issued but not yet effective for the financial year beginning 1 January 2016 and not early adopted
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements are listed below. The Group intends to adopt these standards, if applicable, when they become effective. Unless stated below, there are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
Standard Effective Date IFRS 15 Revenue from Contracts with Customers 01-Jan-18 IFRS 9 Financial Instruments 01-Jan-18 IFRS 16 Leases (i) 01-Jan-19
(i)Subject to EU endorsement
The only standard which is anticipated to be significant or relevant to the Group is IFRS 9 "Financial Instruments", the Group is in the process of assessing the impact of the standards on the Financial Statements. Both IFRS 15 and IFRS 16 are not expected to have a material impact on the Group at this stage of the Group's operations.
2.3 Basis of consolidation
Horizonte Minerals Plc was incorporated on 16 January 2006. On 23 March 2006 Horizonte Minerals Plc acquired the entire issued share capital of Horizonte Exploration Limited (HEL) by way of a share for share exchange. The transaction was treated as a group reconstruction and was accounted for using the merger accounting method as the entities were under common control before and after the acquisition.
Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
-- The contractual arrangement with the other vote holders of the investee. -- Rights arising from other contractual arrangements. -- The Group's voting rights and potential voting rights.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Other than for the acquisition of HEL as noted above, the Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.
If an acquisition is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or a liability is recognised in accordance with IAS 39 either in profit or loss or as a change in other comprehensive income. The unwinding of the discount on contingent consideration liabilities is recognised as a finance charge within profit or loss. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The excess of the consideration transferred and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with policies adopted by the Group.
Investments in subsidiaries are accounted for at cost less impairment.
The following 100% owned subsidiaries have been included within the consolidated Financial Statements:
Subsidiary Held Registered Address Country of Nature of
undertaking incorporation business
----------------------------------------------------------------------------
Horizonte Directly 26 Dover Street, England Mineral
Exploration Ltd London, W1S 4LY Exploration
Horizonte Indirectly Devonshire House, Isle of Man Holding
Minerals (IOM) 15 St Georges St, company
Ltd Douglas, Isle of
Man
HM Brazil (IOM) Indirectly Devonshire House, Isle of Man Holding
Ltd 15 St Georges St, company
Douglas, Isle of
Man
Cluny (IOM) Ltd Indirectly Devonshire House, Isle of Man Holding
15 St Georges St, company
Douglas, Isle of
Man
Champol (IOM) Indirectly Devonshire House, Isle of Man Holding
ltd 15 St Georges St, company
Douglas, Isle of
Man
Horizonte Nickel Indirectly Devonshire House, Isle of Man Holding
(IOM) Ltd 15 St Georges St, company
Douglas, Isle of
Man
HM do Brasil Indirectly CNPJ Brazil Mineral
Ltda 07.819.038/0001-30 Exploration
com sede na
Avenida Amazonas,
2904, loja 511,
Bairro Prado, Belo
Horizonte - MG.
CEP: 30.411-186
Araguaia Niquel Indirectly CNPJ Brazil Mineral
Mineracao Ltda 97.515.035/0001-03 Exploration
com sede na
Avenida Amazonas,
2904, loja 511,
Bairro Prado, Belo
Horizonte - MG.
CEP: 30.411-186
Lontra Indirectly CNPJ Brazil Mineral
Empreendimentos 11.928.960/0001-32 Exploration
e Participacoes com sede na
Ltda Avenida Amazonas,
2904, loja 511,
Bairro Prado, Belo
Horizonte - MG.
CEP: 30.411-186
Typhon Brasil Indirectly CNPJ Brazil Mineral
Mineracao Ltda 23.282.640/0001-37 Exploration
com sede Alameda
Ezequiel Dias, n.
427, 20 andar,
bairro
Funcionarios,
Municipio de Belo
Horizonte, Estado
de Minas Gerais,
CEP 30.130-110.
Trias Brasil Indirectly CNPJ Brazil Mineral
Mineracao Ltda 23.282.280/0001-73 Exploration
com sede na
Alameda Ezequiel
Dias, n. 427, 20
andar, bairro
Funcionarios,
Municipio de Belo
Horizonte, Estado
de Minas Gerais,
CEP 30.130-110
2.4 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 Chairman's Statement on pages 4 and 5; in addition note 3 to the Financial Statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit and liquidity risk.
The Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating revenues and an operating loss has been reported, the Directors consider that the Group has sufficient funds to undertake its operating activities for a period of at least the next 12 months including any additional expenditure required in relation to its current exploration projects. The Group has cash reserves which are considered sufficient by the Directors to fund the Group's committed expenditure both operationally and on its exploration projects for the foreseeable future. However, as additional projects are identified and the Araguaia project moves towards production, additional funding will be required.
As a result of considerations noted above, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing these Financial Statements.
2.5 Intangible Assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets, liabilities and contingent liabilities of the acquired subsidiary at the date of acquisition. Goodwill arising on the acquisition of subsidiaries is included in 'intangible assets'. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment.
(b) Exploration and evaluation assets
The Group capitalises expenditure in relation to exploration and evaluation of mineral assets when the legal rights are obtained. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource.
Exploration and evaluation assets arising on business combinations are included at their acquisition-date fair value in accordance with IFRS 3 (revised) 'Business combinations'. Other exploration and evaluation assets and all subsequent expenditure on assets acquired as part of a business combination are recorded and held at cost.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas.
Whenever the exploration for and evaluation of mineral resources does not lead to the discovery of commercially viable quantities of mineral resources or the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to profit or loss.
2.6 Property, plant and equipment
All property, plant and equipment is stated at historic cost less accumulated depreciation. Historic cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred.
Depreciation is charged on a straight-line basis so as to write off the cost of assets, over their estimated useful lives, using the straight-line method, on the following bases:
Office equipment 25% Vehicles and other field equipment 25% - 33%
The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount.
2.7 Impairment of non-financial assets
Assets that have an indefinite useful life, such as goodwill or intangible exploration assets not ready to use, are not subject to amortisation and are tested annually for impairment. Intangible assets that are subject to amortisation and property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
2.8 Foreign currency translation
(a) Functional and presentation currency
Items included in the Financial Statements of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the UK and Isle of Man entities is Pounds Sterling and the functional currency of the Brazilian entities is Brazilian Real. The Consolidated Financial Statements are presented in Pounds Sterling, rounded to the nearest pound, which is the Company's functional and Group's presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
(c) Group companies
The results and financial position of all the Group's entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(1) assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that
statement of financial position;
(2) each component of profit or loss is translated at average exchange
rates during the accounting period (unless this average is not a
reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions); and
(3) all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in profit or loss as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and retranslated at the end of each reporting period.
2.9 Financial assets
The Group classifies its financial assets as loans and receivables.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method, less impairment. The Group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the Consolidated Statement of Financial Position and loans to group undertakings in the Company Statement of Financial Position.
Derecognition
A financial asset is derecognised when the rights to receive cash flows from the asset have expired.
2.10 Cash and cash equivalents
In the Statement of Financial Position and Statement of Cash Flows, cash and cash equivalents comprise cash at bank and in hand and demand deposits with banks and other financial institutions, that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
2.11 Impairment of financial assets
(a) Assets carried at amortised cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
For loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the Consolidated Income Statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the Consolidated Income Statement.
2.12 Taxation
The tax credit or expense for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
The charge for current tax is calculated on the basis of the tax laws enacted or substantively enacted by the end of the reporting period in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is accounted for using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax assets are recognised on tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the Statement of Financial Position date and are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax assets and liabilities are not discounted.
2.13 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.14 Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.
Fair value through profit or loss
This category comprises the contingent consideration which are carried in the consolidated statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income.
Other financial liabilities
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
2.15 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Trade payables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.
2.16 Operating leases
Leases of assets under which a significant amount of the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are charged to the Income Statement on a straight-line basis over the period of the respective leases.
2.17 Share-based payments and incentives
The Group operates equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of employee services received in exchange for the grant of share options are recognised as an expense. The total expense to be apportioned over the vesting period is determined by reference to the fair value of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market performance vesting
conditions; and
-- including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period the Group revises its estimate of the number of options that are expected to vest.
It recognises the impact of the revision of original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
When options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.
The fair value of goods or services received in exchange for shares is recognised as an expense.
2.18 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer, the Company's chief operating decision-maker ("CODM").
2.19 Finance income
Interest income is recognised using the effective interest method, taking into account the principal amounts outstanding and the interest rates applicable.
2.20 Provisions and Contingent Liabilities
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as finance cost.
Contingent liabilities are potential obligations that arise from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events that, however, are beyond the control of the Group. Furthermore, present obligations may constitute contingent liabilities if it is not probable that an outflow of resources will be required to settle the obligation, or a sufficiently reliable estimate of the amount of the obligation cannot be made.
3 Financial risk management
3.1 Financial risk factors
The main financial risks to which the Group's activities are exposed are liquidity and fluctuations on foreign currency. The Group's overall risk management programme focusses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
Risk management is carried out by the Board of Directors under policies approved at the quarterly Board meetings. The Board frequently discusses principles for overall risk management including policies for specific areas such as foreign exchange.
(a) Liquidity risks
In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Group monitors its cash and future funding requirements through the use of cash flow forecasts.
All cash, with the exception of that required for immediate working capital requirements, is held on short-term deposit.
(b) Foreign currency risks
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Brazilian Real, US Dollar and the Pound Sterling.
Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations that are denominated in a foreign currency. The Group holds a proportion of its cash in US Dollars and Brazilian Reals to hedge its exposure to foreign currency fluctuations and recognises the profits and losses resulting from currency fluctuations as and when they arise. The volume of transactions is not deemed sufficient to enter into forward contracts.
At 31 December 2016, if the Brazilian Real had weakened/strengthened by 20% against Pound Sterling and US Dollar with all other variables held constant, post tax loss for the year would have been approximately GBP 41,448 lower/higher mainly as a result of foreign exchange losses/gains on translation of Brazilian Real expenditure and denominated bank balances.
(c) Interest rate risk
As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group's interest rate risk arises from its cash held on short-term deposit for which the Directors use a mixture of fixed and variable rate deposits. As a result, fluctuations in interest rates are not expected to have a significant impact on profit or loss or equity.
(d) Price risk
Given the size and stage of the Group's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.
(e) Credit risk
Credit risk arises from cash and cash equivalents and outstanding receivables. The Group maintains cash and short-term deposits with a variety of credit worthy financial institutions and considers the credit ratings of these institutions before investing in order to mitigate against the associated credit risk.
3.2 Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to provide returns for shareholders and to enable the Group to continue its exploration and evaluation activities. The Group has no debt at 31 December 2016 and defines capital based on the total equity of the Group. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.
As indicated above, the Group holds cash reserves on deposit at several banks and in different currencies until they are required and in order to match where possible with the corresponding liabilities in that currency.
3.3 Fair value estimation
The carrying values of trade receivables and payables are assumed to be approximate to their fair values, due to their short-term nature. The fair value of contingent consideration is estimated by discounting the future expected contractual cash flows at the Group's current cost of capital of 7% based on the interest rate available to the Group for a similar financial instrument.
4 Critical accounting estimates and judgements
The preparation of the Financial Statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are not limited to:
4.1 Impairment of exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 31 December 2016 of GBP 31,737,737 (2015: GBP 20,159,327 ). Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned to date warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long-term metal prices, anticipated resource volumes and grades, permitting and infrastructure. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside, a decision will be made to discontinue exploration.
4.2 Estimated impairment of goodwill
Goodwill has a carrying value at 31 December 2016 of GBP 280,059 (2015: GBP 192,028) which is included in intangible assets. The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2.7.
Management has concluded that there is no impairment charge necessary to the carrying value of goodwill. See also note 10 to the Financial Statements.
4.3 Contingent consideration
Contingent consideration has a carrying value of GBP 3,643,042, at 31 December 2016 (2015: GBP 3,161,591). there are two contingent consideration arrangements in place as at 31 December 2016:
- A contingent consideration arrangement that requires the Group to pay
the former owners of Teck Cominco Brasil S.A (subsequently renamed
Araguaia Niquel Mineracao Ltda) 50% of the tax effect upon utilisation
of the tax losses existing in Teck Cominco Brasil S.A at the date of
acquisition. Under the terms of the acquisition agreement, tax losses
that existed at the date of acquisition and which are subsequently
utilised in a period greater than 10 years from that date are not
subject to the contingent consideration arrangement.
This acquisition was accounted for as a business combination and an
assessment of the fair value of the contingent consideration was made
at the date of acquisition. This fair value is reassessed in each
subsequent accounting period. In arriving at an estimate of the fair
value management make an assessment of the probability of utilisation
of all or part of the tax losses by the end of the 10 year period
which is August 2020. The Group has used discounted cash flow analysis
to determine when it is anticipated that the tax losses will be
utilised and any potential contingent consideration paid. These cash
flows could be affected by movements in a number of factors including
the timing of the development and commissioning of the project,
commodity prices, operating costs, capital expenditure, production
levels, grades, recoveries and interest rates. Because of the
condition of the acquisition agreement to utilise tax losses prior to
August 2020 a critical assumption in the assessment of value of the
contingent consideration is the timing of commencement of profitable
production.
As explained in note 21, following a reassessment of the IFRS
accounting requirements, management has determined that the value
attributed to the contingent consideration must be reviewed at the end
of each reporting period and adjusted to reflect the current best
estimate. This review was not completed in prior years and
accordingly, a restatement of prior years' financial statements has
been made.
- A contingent consideration arrangement that requires the Group to pay
Xstrata Brasil Mineracao Ltda US$1,000,000 after the date of issuance
of a Feasibility Study comprising the Araguaia project and the Vale
dos Sonhos ('VdS') and Serra do Tapa ('SdT') project areas ('GAP')
(together the 'Enlarged Project'), to be satisfied in shares in the
Company (at the 5 day volume weighted average price taken on the tenth
business day after the date of such issuance) or cash, at the election
of the Company; and remaining consideration of US$5,000,000 to be paid
in cash, as at the date of first commercial production from any of the
resource areas within the Enlarged Project area. The critical
assumptions relating to the assessment of the contingent consideration
of S$5,000,000 are similar to those described above for the contingent
consideration payable to the former owners of Teck Cominco Brasil S.A.
The Contingent consideration is considered to be a level 3 hierarchy
valuation, the following are unobservable inputs for the valuation
model: Discount rate and probability factor. In addition, the model
includes the foreign exchange rate.
Management have sensitized the fair value calculation to reasonable
changes in the unobservable inputs and note that if the discount rate
were to increase to 10% then the FV would decrease to GBP 3,387,315.
Management have sensitized the probability factor and note that a
change in the probability weighting of 25% would cause the overall
value of the contingent consideration to increase by GBP 96,207.
A contingent consideration arrangement that requires the Group to pay Xstrata Brasil Mineracao Ltda US$1,000,000 after the date of issuance of a Feasibility Study comprising the Araguaia project and the Vale dos Sonhos ('VdS') and Serra do Tapa ('SdT') project areas ('GAP') (together the 'Enlarged Project'), to be satisfied in shares in the Company (at the 5 day volume weighted average price taken on the tenth business day after the date of such issuance) or cash, at the election of the Company; and remaining consideration of US$5,000,000 to be paid in cash, as at the date of first commercial production from any of the resource areas within the Enlarged Project area. The critical assumptions relating to the assessment of the contingent consideration of S$5,000,000 are similar to those described above for the contingent consideration payable to the former owners of Teck Cominco Brasil S.A.
There has been no change in valuation technique during the period.
4.4 Current and deferred taxation
The Group is subject to income taxes in numerous jurisdictions. Judgment is required in determining the worldwide provision for such taxes. The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will affect the current and deferred income tax assets and liabilities in the period in which such determination is made.
Deferred tax liabilities have been recognised on the fair value gains in exploration assets arising on the acquisitions of Araguaia Niquel Mineracao Ltda (formerly Teck Cominco Brasil S.A) and Lontra Empreendimentos e Participacoes Ltda. A deferred tax asset in respect of the losses has been recognised on acquisition of Araguaia Niquel Mineracao Ltda to the extent that it can be set against the deferred tax liability arising on the fair value gains. In determining whether a deferred tax asset in excess of this amount should be recognized management must make an assessment of the probability that the tax losses will be utilized and a deferred tax asset is only recognised if it is considered probable that the tax losses will be utilized.
As explained in note 21, following a reassessment of the IFRS accounting requirements, management has determined based on information available at the time of preparation of the 2010 financial statements, the utilization of these losses had a lower probability at the time of the acquisition in 2010 and a restatement derecognizing the deferred tax asset has been made. Management review the position each financial period and this assessment remains.
4.5 Other areas
Other estimates include but are not limited to future cash flows associated with assets, useful lives for depreciation and fair value of financial instruments.
5 Segmental reporting
The Group operates principally in the UK and Brazil, with operations managed on a project by project basis within each geographical area. Activities in the UK are mainly administrative in nature whilst the activities in Brazil relate to exploration and evaluation work. The reports used by the chief operating decision-maker are based on these geographical segments.
UK Brazil Other Total
2016 2016 2016 2016
2016 GBP GBP GBP GBP
----------------------------------------------------------------------------
Administrative expenses (802,409) (207,214) - (1,009,623)
Loss on foreign exchange 46,454 18,787 - 65,241
----------------------------------------------------------------------------
Loss from operations per
reportable segment (755,955) (188,427) - (944,382)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Depreciation charges (970) (114) - (1,084)
Additions to non-current
assets - 11,578,410 - 11,578,410
Reportable segment assets 9,309,132 32,062,800 - 41,371,932
Reportable segment non-
current assets - 32,018,658 - 32,018,658
Reportable segment
liabilities 3,969,966 347,511 - 4,317,477
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total
UK Brazil Other 2015
2015 2015 2015 (Restated)
2015 (Restated) GBP GBP GBP GBP
----------------------------------------------------------------------------
Administrative expenses (662,305) (189,234) (13,353) (864,892)
Loss) on foreign exchange (114,838) (136,571) - (251,409)
----------------------------------------------------------------------------
Loss from operations per
reportable segment (777,143) (325,805) (13,353) (1,116,301)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Depreciation charges (1,037) (382) - (1,419)
Additions to non-current
assets - (645,313) - (645,313)
Reportable segment assets 2,687,317 20,455,743 - 23,143,060
Reportable segment non-
current assets - 20,363,243 - 20,363,243
Reportable segment
liabilities 3,249,980 254,296 - 3,504,276
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Inter segment revenues are calculated and recorded in accordance with the underlying intra group service agreements.
A reconciliation of adjusted loss from operations per reportable segment to loss before tax is provided as follows:
2015
2016 (Restated)
GBP GBP
----------------------------------------------------------------------------
Loss from operations per reportable segment (944,382) (1,116,301)
Changes in fair value of contingent
consideration (refer note 17) (260,632) (26,969)
Charge for share options granted (324,890) (100,248)
Impairment of available-for-sale asset - (253,006)
Finance income 4,387 14,918
Finance costs (220,817) (63,093)
----------------------------------------------------------------------------
Loss for the year from continuing operations (1,746,334) (1,544,699)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
6 Expenses by nature
2015
2016 (Restated)
Group GBP GBP
----------------------------------------------------------------------------
Charge for share options granted 324,890 100,248
Depreciation (note 11) 1,084 1,419
Operating lease charges 36,053 95,182
Profit on disposal of property, plant and equipment - (24,453)
----------------------------------------------------------------------------
7 Auditor remuneration
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company's auditor and its associates:
2016 2015
Group GBP GBP
----------------------------------------------------------------------------
Fees payable to the Company's auditor and its associates for
the audit of the parent company and consolidated financial
statements (2015: PKF Littlejohn) 32,000 37,500
Fees payable to the Company's auditor and its associates for
other services:
- Audit related assurance services (paid to PKF Littlejohn) 5,000 7,000
- Tax compliance services 2,000 1,900
----------------------------------------------------------------------------
----------------------------------------------------------------------------
8 Finance income and costs
2015
2016 (Restated)
Group GBP GBP
----------------------------------------------------------------------------
Finance income:
- Interest income on cash and short-term bank
deposits 4,387 14,918
Finance costs:
- Contingent consideration: unwinding of discount (220,817) (63,093)
----------------------------------------------------------------------------
Net finance costs (216,430) (48,175)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
9 Income Tax
2015
2016 (Restated)
Group GBP GBP
----------------------------------------------------------------------------
Tax charge:
Current tax charge for the year - -
----------------------------------------------------------------------------
Deferred tax charge for the year - -
----------------------------------------------------------------------------
Tax on loss for the year - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Reconciliation of current tax
2015
2016 (Restated)
Group GBP GBP
----------------------------------------------------------------------------
Loss before income tax (1,746,334) (1,544,699)
Current tax at 22.87% (2015: 32.52%) (399,387) (502,336)
Effects of:
Expenses not deducted for tax purposes 9,080 46,319
Utilisation of tax losses brought forward - (150,480)
Tax losses carried forward for which no deferred
income tax asset was recognised - UK - -
Tax losses carried forward for which no deferred
income tax asset was recognised - Brazil 408,466 606,497
----------------------------------------------------------------------------
Total tax - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
No tax charge or credit arises on the loss for the year.
The weighted average applicable tax rate of 22.87% used is a combination of the 20% effective standard rate of corporation tax in the UK, 34% Brazilian corporation tax. The weighted average applicable tax rate has decreased from 32.52% to 22.87% as a greater proportion of loss before income tax arose in the UK.
Deferred income tax
An analysis of deferred tax assets and liabilities is set out below.
2015
2016 (Restated)
Group GBP GBP
----------------------------------------------------------------------------
Deferred tax assets 4,744,885 6,920,143
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Deferred tax liabilities
- Deferred tax liability to be settled after
more than 12 months (5,027,335) (7,113,808)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Deferred tax liabilities (net) (282,450) (193,665)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The movement on the net deferred tax liabilities is as follows:
2015
2016 (Restated)
Group GBP GBP
----------------------------------------------------------------------------
At 1 January (193,665) (273,273)
----------------------------------------------------------------------------
Exchange differences (88,785) 79,608
----------------------------------------------------------------------------
At 31 December (282,450) (193,665)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Deferred tax assets are recognised on tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.
Deferred tax liabilities are recognised in respect of fair value adjustments to the carrying value of intangible assets as a result of the acquisition of such assets.
The Group has tax losses of approximately GBP 18,132,502 (2015: GBP 17,363,000) in Brazil and excess management charges of approximately GBP 2,492,408 (2015: GBP 1,690,000) in the UK available to carry forward against future taxable profits. Deferred tax asset have been recognised up to the amount of the deferred tax liability arising on the fair value adjustments potential deferred tax assets of GBP 6,663,532 have not been recognised.
10 Intangible assets
Intangible assets comprise exploration licenses, exploration and evaluation costs and goodwill. Exploration and evaluation costs comprise acquired and internally generated assets.
Exploration
and
Exploration evaluation
Goodwill Licenses costs Total
Group GBP GBP GBP GBP
----------------------------------------------------------------------------
Cost
At 1 January 2015
(Restated) 270,925 - 20,804,640 21,075,565
Additions - 3,174,275 2,540,833 5,715,108
Exchange rate movements (78,897) - (6,360,421) (6,439,318)
----------------------------------------------------------------------------
At 31 December 2015
(Restated) 192,028 3,174,275 16,985,052 20,351,355
----------------------------------------------------------------------------
Additions - 1,012,620 1,253,212 2,265,831
Exchange rate movements 88,032 1,458,290 7,854,288 9,400,610
----------------------------------------------------------------------------
Net book amount at 31
December 2016 280,060 5,645,185 26,092,551 32,017,796
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(a) Exploration and evaluation assets
No indicators of impairment were identified during the year.
In October 2016, a Canadian NI 43-101 compliant Pre-Feasibility Study ('PFS') was published by the Company regarding the enlarged Araguaia Project which included the areas recently acquired from Glencore Xstrata. The financial results and conclusions of the PFS clearly indicate the economic viability of the Araguaia Project. The Directors undertook an assessment of impairment through evaluating the results of the PFS and judged that no impairment was required with regards to the Araguaia Project.
(b) Goodwill
Goodwill arose on the acquisition of Lontra Empreendimentos e Participacoes Ltda in 2010. The Directors have determined the recoverable amount of goodwill based on the same assumptions used for the assessment of the Lontra exploration project detailed above. As a result of this assessment, the Directors have concluded that no impairment charge is necessary against the carrying value of goodwill.
Impairment reviews for exploration and evaluation assets are carried out either on a project by project basis or by geographical area.
The adjacent Araguaia/Lontra/Vila Oito and Floresta exploration sites ('the Araguaia Project'), together with the Vale dos Sonhos deposit acquired from Xstrata Brasil Mineracao Ltda comprise a resource of a sufficient size and scale to allow the Company to create a significant single nickel project. For this reason, at the current stage of development, these two projects are viewed and assessed for impairment by management as a single cash generating unit.
The mineral concession for the Vale dos Sonhos deposit was acquired from Xstrata Brasil Mineracao Ltda, a subsidiary of Glencore Canada Corporation, in November 2015.
The recoverable amount has been determined by reference to the PFS undertaken during the year on the Araguaia Project. The key inputs and assumptions in deriving the value in use were, the discount rate of 8%, Nickel price of US$12,000/t and a life of mine of 28years.
Sensitivity to changes in assumptions
For the base case NPV8 of the Araguaia Project of US$581 million using a nickel price of US$14,000/t and US$328 million using US$12,000/t as per the PFS to be reduced to the book value of the Araguaia Project as at 31 December 2016, the discount rate applied to the cash flow model would need to be increased from 8% to 21%.
11 Property, plant and equipment
Vehicles and
other field Office
equipment equipment Total
Group GBP GBP GBP
----------------------------------------------------------------------------
Cost
At 1 January 2015 152,089 14,730 166,819
Disposals (40,089) - (40,089)
Foreign exchange movements (37,353) (2,134) (39,487)
----------------------------------------------------------------------------
At 31 December 2015 74,647 12,596 87,243
Foreign exchange movements 31,657 1,802 33,459
----------------------------------------------------------------------------
At 31 December 2016 106,304 14,398 120,702
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Accumulated depreciation
At 1 January 2015 104,117 8,312 112,429
Charge for the year 26,245 2,469 28,714
Disposals (26,916) - (26,916)
Foreign exchange movements (37,807) (1,065) (38,872)
----------------------------------------------------------------------------
At 31 December 2015 65,639 9,716 75,355
----------------------------------------------------------------------------
Charge for the year 11,766 2,614 14,380
Foreign exchange movements 28,320 1,785 30,105
----------------------------------------------------------------------------
At 31 December 2016 105,725 14,115 119,840
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net book amount as at 31 December
2016 579 283 862
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net book amount as at 31 December
2015 9,008 2,880 11,888
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net book amount as at 1 January 2015 47,972 6,418 54,390
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Depreciation charges of GBP 13,296 (2015: GBP 27,295) have been capitalised and included within intangible exploration and evaluation asset additions for the year. The remaining depreciation expense for the year ended 31 December 2016 of GBP 1,084 (2015: GBP 1,419) has been charged in 'administrative expenses' under 'Depreciation.'
Field Office
equipment equipment Total
Company GBP GBP GBP
----------------------------------------------------------------------------
Cost
At 1 January 2015 4,208 7,403 11,611
Additions - - -
----------------------------------------------------------------------------
At 31 December 2015 and 2016 4,208 7,403 11,611
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Accumulated depreciation
At 1 January 2015 4,208 5,112 9,320
Charge for the year - 1,037 1,037
----------------------------------------------------------------------------
At 31 December 2015 4,208 6,149 10,357
----------------------------------------------------------------------------
Charge for the year - 971 971
----------------------------------------------------------------------------
At 31 December 2016 4,208 7,120 11,328
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net book amount as at 31 December 2016 - 283 283
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net book amount as at 31 December 2015 - 1,254 1,254
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net book amount as at 1 January 2015 - 2,291 2,291
----------------------------------------------------------------------------
----------------------------------------------------------------------------
12 Cash and cash equivalents
Group Company
--------------------------------------------
2016 2015 2016 2015
GBP GBP GBP GBP
----------------------------------------------------------------------------
Cash at bank and on hand 9,250,281 2,676,160 9,094,308 2,519,018
Short-term deposits 67,500 62,745 49,685 49,248
----------------------------------------------------------------------------
9,317,781 2,738,905 9,143,993 2,568,266
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The Group's cash at bank and short-term deposits are held with institutions with the following credit ratings (Fitch):
Group Company
------------------------------------------------
2016 2015 2016 2015
GBP GBP GBP GBP
----------------------------------------------------------------------------
A 9,217,380 2,616,981 9,094,308 2,519,018
BBB- 100,401 121,924 49,685 49,248
----------------------------------------------------------------------------
9,317,781 2,738,905 9,143,993 2,568,266
----------------------------------------------------------------------------
----------------------------------------------------------------------------
13 Share capital
2016 2016 2015 2015
Group and Company Number GBP Number GBP
----------------------------------------------------------------------------
Issued and fully paid
Ordinary shares of 1p
each
At 1 January 671,204,378 6,712,044 492,427,105 4,924,271
Issue of ordinary shares 500,729,922 5,007,299 178,777,273 1,787,773
----------------------------------------------------------------------------
At 31 December 1,171,934,300 11,719,343 671,204,378 6,712,044
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Share capital comprises amount subscribed for shares at the nominal value.
2016
On 8 August 2016, a total of 50,729,922 new ordinary shares were issued at the prevailing market price of GBP 0.0199 per share in consideration for the purchase of the Vale dos Sonhos mineral concession from Xstrata Brasil Mineracao Ltda.
On 30 November 2016, a total of 374,000,000 shares were issued through a private placement at a price of GBP 0.02 per share to raise GBP 7,480,000 before expenses.
On 2 December 2016, a total of 76,000,000 shares were issued through a private placement at a price of GBP 0.02 per share to raise GBP 1,520,000 before expenses.
2015
On 2 October 2015, a total of 112,500,000 shares were issued through a private placement at a price of GBP 0.01 per share to raise GBP 1,125,000 before expenses.
On 9 October 2015, a total of 42,500,000 shares were issued through a private placement at a price of GBP 0.01 per share to raise GBP 425,000 before expenses.
On 25 November 2015, a total of 23,777,273 shares were issued at GBP 0.0184 per share in consideration for the purchase of the Vale dos Sonhos mineral concession from Xstrata Brasil Mineracao Ltda.
14 Share premium
2016 2015
Group and Company GBP GBP
----------------------------------------------------------------------------
At 1 January 31,252,708 31,095,370
Premium arising on issue of ordinary shares 5,005,662 200,300
Issue costs (490,685) (42,962)
----------------------------------------------------------------------------
At 31 December 35,767,344 31,252,708
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Share premium comprises the amount subscribed for share capital in excess of nominal value.
15 Share-based payments
The Directors have discretion to grant options to the Group employees to subscribe for Ordinary shares up to a maximum of 10% of the Company's issued share capital. One third of options are exercisable at each six months anniversary from the date of grant, such that all options are exercisable 18 months after the date of grant and all lapse on the tenth anniversary of the date of grant or the holder ceasing to be an employee of the Group. Should holders cease employment then the options remain valid for a period of 3 months after cessation of employment, following which they will lapse. Neither the Company nor the Group has any legal or constructive obligation to settle or repurchase the options in cash.
Movements on number of share options and their related exercise price are as follows:
Weighted Weighted
average average
Number of exercise Number of exercise
options price options price
2016 2016 2015 2015
GBP GBP GBP GBP
----------------------------------------------------------------------------
Outstanding at 1 January 48,760,000 0.124 38,300,000 0.119
Forfeited (8,450,000) 0.092 (2,790,000) 0.151
Granted 15,000,000 0.030 13,250,000 0.040
Outstanding at 31 December 55,310,000 0.079 48,760,000 0.096
----------------------------------------------------------------------------
Exercisable at 31 December 36,760,000 0.102 30,693,333 0.124
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The options outstanding at 31 December 2016 had a weighted average remaining contractual life of 7.28 years (2015: 7.45 years).
The fair value of the share options was determined using the Black-Scholes valuation model.
The parameters used are detailed below.
2016 2015
Group and Company options options
----------------------------------------------------------------------------
Date of grant or reissue 01/09/2016 10/06/2015
Weighted average share price 2.03 pence 2.63 pence
Weighted average exercise price 3.00 pence 4.00 pence
Expiry date 31/08/2026 09/06/2025
Options granted 15,000,000 13,250,000
Volatility 64% 75%
Dividend yield Nil Nil
Option life 10 years 10 years
Annual risk free interest rate 2.83% 2.83%
----------------------------------------------------------------------------
The expected volatility is based on historical volatility for the six months prior to the date of grant. The risk free rate of return is based on zero yield government bonds for a term consistent with the option life.
The range of option exercise prices is as follows:
2016 2016
2016 Weighted Weighted
Weighted average average
average remaining remaining
exercise 2016 life life
Range of exercise price Number of expected contracted
prices (GBP) (GBP) shares (years) (years)
----------------------------------------------------------------------------
0-0.1 0.049 39,850,000 8.34 8.34
0.1-0.2 0.154 15,460,000 4.57 4.57
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2015
2015 Weighted 2015
Weighted average Weighted
average remaining average
exercise 2015 life remaining life
Range of exercise price Number of expected contracted
prices (GBP) (GBP) shares (years) (years)
----------------------------------------------------------------------------
0-0.1 0.060 30,300,000 8.62 8.62
0.1-0.2 0.154 18,460,000 5.53 5.53
----------------------------------------------------------------------------
----------------------------------------------------------------------------
16 Other reserves
Available-
for-sale Merger Translation Other
reserve reserve reserve reserve Total
Group GBP GBP GBP GBP GBP
----------------------------------------------------------------------------
At 1 January
2015 (As
previously
reported) (253,006) 10,888,760 (9,909,255) (1,048,100) (321,601)
----------------------------------------------------------------------------
Refer note 22 c - - 1,574,535 - 1,574,535
----------------------------------------------------------------------------
At 1 January
2015 (Restated) (253,006) 10,888,760 (8,334,720) (1,048,100) 1,252,934
Permanent
diminution
taken to income 253,006 - - - 253,006
Currency
translation
differences - - (6,354,056) - (6,354,056)
----------------------------------------------------------------------------
At 31 December
2015 (Restated) - 10,888,760 (14,688,776) (1,048,100) (4,848,116)
----------------------------------------------------------------------------
Other
comprehensive
income - - - - -
Currency
translation
differences - - 9,315,180 - 9,315,180
----------------------------------------------------------------------------
At 31 December
2016 - 10,888,760 (5,373,596) (1,048,100) 4,467,064
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Merger
reserve Total
Company GBP GBP
----------------------------------------------------------------------------
At 1 January 2015 and 31 December 2015 10,888,760 10,888,760
----------------------------------------------------------------------------
----------------------------------------------------------------------------
At 1 January 2016 and 31 December 2016 10,888,760 10,888,760
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The merger and other reserve as at 31 December 2016 arose on consolidation as a result of merger accounting for the acquisition of the entire issued share capital of Horizonte Exploration Limited during 2006 and represents the difference between the value of the share capital and premium issued for the acquisition and that of the acquired share capital and premium of Horizonte Exploration Limited.
Currency translation differences relate to the translation of Group entities that have a functional currency different from the presentation currency (refer note 2.8). Movements in the translation reserve are linked to the changes in the value of the Brazilian Real against the Pound Sterling: the intangible assets of the Group are located in Brazil, and their functional currency is the Brazilian Real, which increased in value against Sterling during the year.
The available for sale reserve represents changes in the fair value of assets that are held available for sale.
17 Trade and other payables
Group Company
----------------------------------------------
2015 2015
2016 (Restated) 2016 (Restated)
GBP GBP GBP GBP
----------------------------------------------------------------------------
Non-current
----------------------------------------------------------------------------
Contingent consideration
payable to former owners of
Teck Cominco Brasil S.A. 115,100 354,713 115,100 354,713
Contingent consideration
payable to Xstrata Brasil
Mineracao Ltda (refer note
27) 3,527,942 2,806,878 3,527,942 2,806,878
----------------------------------------------------------------------------
Total contingent consideration 3,643,042 3,161,591 3,643,042 3,161,591
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current
Trade and other payables 229,046 16,038 148,985 10,377
Amounts due to related parties
(refer note 22) - - 413,930 413,930
Social security and other
taxes 19,088 21,519 19,088 15,533
Accrued expenses 143,851 111,463 165,052 63,033
----------------------------------------------------------------------------
391,985 149,020 747,055 502,873
----------------------------------------------------------------------------
Total trade and other payables 4,035,027 3,310,611 4,390,097 3,664,464
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Trade and other payables include amounts due of GBP 65,053 (2015: GBP 65,748) in relation to exploration and evaluation activities.
Contingent Consideration payable to the former owners of Teck Cominco Brasil S.A.
The fair value of the contingent consideration arrangement with the former owners of Teck Cominco Brasil S.A. was estimated at the acquisition date according to the probability and timing of when future taxable profits will arise against which the tax losses may be utilised in accordance with the terms of the acquisition agreement.
As explained in note 21 the estimate of fair value has been restated and is now assessed to be GBP 115,100 (2015: GBP 354,713). The critical assumptions underlying the fair value estimate are set out in note 4.3. Estimates were also based on the current rates of tax on profits in Brazil of 34% and a discount factor of 7.0% was applied to the future dates at which the tax losses will be utilised and consideration paid.
Contingent Consideration payable to Xstrata Brasil Mineracao Ltda
On 28 September 2015 the Company announced that it had reached agreement to indirectly acquire through wholly owned subsidiaries in Brazil the advanced high-grade Glencore Araguaia nickel project ('GAP') in north central Brazil. GAP is located in the vicinity of the Company's Araguaia Project.
Pursuant to a conditional asset purchase agreement ('Asset Purchase Agreement') between, amongst others, the Company and Xstrata Brasil Exploracao Mineral Ltda ('Xstrata'), a wholly-owned subsidiary of Glencore Canada Corporation ('Glencore'), the Company has agreed to pay a total consideration of US$8 million to Xstrata, which holds the title to GAP. The consideration is to be paid according the following schedule;
-- US$2,000,000 in ordinary shares in the capital of the Company which as
at 31 December 2016 had been settled by way of issuing new shares in the
Company.
-- US$1,000,000 after the date of issuance of a joint Feasibility Study for
the combined Araguaia & GAP project areas, to be satisfied in HZM Shares
(at the 5 day volume weighted average price taken on the tenth business
day after the date of such issuance) or cash, at the election of the
Company; and
-- The remaining US$5,000,000 consideration will be paid in cash, as at the
date of first commercial production from any of the resource areas
within the Enlarged Project area. Following transfer of the concession
for the VdS deposit area to a subsidiary of the Company, this has been
included in contingent consideration payable.
The critical assumptions underlying the treatment of the contingent consideration are set out in note 4.3.
As at 31 December 2016, there was a finance expense of GBP 193,868 (2015: GBP 14,505) recognised in finance costs within the Statement of Comprehensive Income in respect of the contingent consideration arrangement, as the discount applied to the contingent consideration at the date of acquisition was unwound.
18 Dividends
No dividend has been declared or paid by the Company during the year ended 31 December 2016 (2015: nil).
19 Earnings per share
(a) Basic
The basic loss per share of 0.240p loss per share (2015 loss per share: 0.290p) is calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.
2016 2015
Group GBP GBP
----------------------------------------------------------------------------
Loss attributable to owners of the parent (1,746,334) (1,544,699)
Weighted average number of ordinary shares in
issue 727,096,642 531,868,151
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(b) Diluted
The basic and diluted loss per share for the years ended 31 December 2016 and 31 December 2015 are the same as the effect of the exercise of share options would be anti-dilutive.
Details of share options that could potentially dilute earnings per share in future periods are set out in note 15.
20 Related party transactions
The following transactions took place with subsidiaries in the year:
A fee totalling GBP 312,043 (2015: GBP 232,829) was charged to HM do Brazil Ltda, GBP 872,784 (2015: GBP 639,814) to Araguaia Niquel Mineracao Ltda and GBP 58,806 to Typhon Brasil Mineracao Ltda by Horizonte Minerals Plc in respect of consultancy services provided and funding costs.
Amounts totalling GBP 782,926 (2015: GBP 4,919,360) were lent to HM Brazil (IOM) Ltd, HM do Brasil Ltda, Araguaia Niquel Mineracao Ltda and Typhon Brasil Mineracao Ltda to finance exploration work during 2016, by Horizonte Minerals Plc. Interest is charged at an annual rate of 6% on balances outstanding during the year.
Balances with subsidiaries at the year end were:
2016 2016 2015 2015
Assets Liabilities Assets Liabilities
Company GBP GBP GBP GBP
----------------------------------------------------------------------------
HM do Brasil Ltda 792,301 - 845,808 -
Minera El Aguila SAC - - - -
HM Brazil (IOM) Ltd 4,933,377 - 4,725,314 -
Horizonte Nickel (IOM) Ltd 26,070,923 - 24,340,018 -
Araguaia Niquel Mineracao
Ltda 6,074,517 - 4,605,395 -
Horizonte Minerals (IOM)
Ltd 253,004 - 253,004 -
Horizonte Exploration Ltd - 413,930 - 413,930
Typhon Brasil Mineracao
Ltda 3,198,183 - 3,174,275 -
----------------------------------------------------------------------------
Total 41,322,305 413,930 37,944,114 413,930
----------------------------------------------------------------------------
All Group transactions were eliminated on consolidation.
On 30 November 2016 a total of 374,000,000,000 shares were issued through a private placement at a price of GBP 0.02 per share, to raise GBP 7,480,000 before expenses. As part of this private placement, Henderson Global Investors subscribed for 50,000,000 shares and Richard Griffiths subscribed for 62,235,000 shares representing 13.4 percent and 16.6 percent respectively of the private placement. By reason of its existing shareholdings in the Company, the participation of Henderson Global Investors and Richard Griffiths in the private placement of 30 November 2016 constituted a related party transaction under AIM Rule 13 of the AIM Rules for Companies.
On 2 December 2016 a total of 76,000,000 shares were issued through a non brokered private placement in Canada, at a price of C$0.04 per share. As part of this private placement, Teck Resources Limited subscribed for 21,517,250 shares representing 28.3 percent of the private placement. By reason of their existing shareholdings in the Company, the participation of Teck Resources Limited in the private placement each constitute a related party transaction under AIM Rule 13 of the AIM Rules for Companies.
On 27 June 2013 the Company signed an agreement for an GBP 8 million Equity Financing Facility ('EFF') with Darwin Strategic Limited ('Darwin'), a majority owned subsidiary of Henderson Global Investors' Volantis Capital. The EFF agreement with Darwin provides Horizonte with an equity line facility which, subject to certain conditions and restrictions, can be drawn on any time over 36 months. The floor subscription price in relation to each draw down is set at the discretion of the Company. Horizonte did not utilise this facility during the period and it has now lapsed.
21 Restatements of contingent consideration and deferred tax asset
These financial statements reflect prior year adjustments in respect of a deferred tax asset, contingent consideration and associated exchange differences and finance costs. Both the deferred tax asset and contingent consideration arose from the acquisition of Teck Cominco Brasil S.A. in 2010, which was accounted for as a business combination. The initial recognition of both of these items required management to make an assessment of the probabilities of the tax losses being utilised and the fair value of the contingent consideration to be paid.
Following the recent review undertaken of the relevant recognition criteria, and conditions relating to both items it has been concluded that the level of deferred tax recognised at the time of the acquisition requires re-calculation. The recognition of the deferred tax asset at an early stage in the Araguaia project did not meet the criteria prescribed by IAS 12 - Income Taxes, of it being probable that they could be utilised.
It has also been concluded that the fair value of the contingent consideration applied at time of acquisition similarly requires re calculation. This liability relates to payments due to the vendors upon utilisation of brought forward tax losses of Teck Cominco. The payments would be 50% of the tax effect of the losses utilised from the date of acquisition up to August 2020. The fair value originally calculated assumed 100% utilisation of the brought forward tax losses and was not a probability weighted to reflect the underlying risks of the project and the requirement to utilise the losses within a set timeframe.
Management now believes that it would be appropriate to restate the Financial Statements to derecognize the deferred tax asset and re-measure the contingent consideration as follows:
a. Deferred tax asset
A deferred tax asset of GBP 5,065,976 has been derecognised at 1 January 2015.
A deferred tax asset of GBP 3,590,675 has been derecognised at 31 December 2015.
b. Contingent consideration and finance costs
A contingent consideration liability has been reduced to GBP 335,327 at 1 January 2015.
Finance costs are reduced by GBP 275,336 in the year ended 31 December 2015 in respect of reversing the unwinding of the discount on the contingent consideration.
A contingent consideration liability has been reduced to GBP 3,161,591 at 31 December 2015.
c. Foreign exchange translation reserve
An adjustment of GBP 1,574,535 has been made to the foreign exchange translation reserve at 1 January 2015 in respect of the above adjustments.
A further adjustment of GBP 913,675 has been made to the foreign exchange translation reserve at 31 December 2015 in respect of further movements of the deferred tax asset and contingent consideration during 2015.
d. Retained losses
The net impact on retained losses at 1 January 2015 of the above adjustments is GBP 2,506,533.
e. Intangible assets
An increase in carrying value of intangible exploration and evaluation assets as at 1 January 2015 of GBP 305,253.
22 Ultimate controlling party
The Directors believe there to be no ultimate controlling party.
23 Directors' remuneration (including Key Management)
Share
Social based
Aggregate Security Other payment Pension
emoluments charges emoluments charge costs Total
Group 2016 GBP GBP GBP GBP GBP GBP
----------------------------------------------------------------------------
Non-Executive
Directors
Alexander
Christopher - - - - - -
David Hall 29,000 3,312 - 24,520 - 56,832
William Fisher 29,000 - - 24,520 - 53,520
Allan Walker 29,000 4,002 - 24,520 - 57,522
Owen Bavinton - - - 24,520 32,167 56,687
Executive
Directors
Jeremy Martin 170,000 31,326 59,236 67,430 17,000 344,992
Key Management
Jeffrey Karoly 128,000 13,524 9,600 61,300 15,553 227,977
Simon Retter 15,541 2,145 8,000 - - 25,686
----------------------------------------------------------
400,541 54,309 76,836 165,510 64,720 823,216
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Share
Social based
Aggregate Security Other payment Pension
emoluments charges emoluments charge costs Total
Group 2015 GBP GBP GBP GBP GBP GBP
----------------------------------------------------------------------------
Non-Executive
Directors
Alexander
Christopher - - - - - -
David Hall 33,600 - - 4,128 - 37,728
William Fisher 24,000 - - 4,128 - 28,128
Allan Walker 24,000 3,312 - 4,128 - 31,440
Owen Bavinton 25,608 3,534 - 4,128 - 33,270
Executive
Directors
Jeremy Martin 149,000 20,562 1,950 11,353 39,104 221,969
Key Management
Jeffrey Karoly 99,000 12,672 - 10,321 48,656 170,649
----------------------------------------------------------
355,208 40,080 1,950 38,188 87,760 523,184
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The Company does not operate a pension scheme. Pension costs comprise contributions to Defined Contribution pension plans held by the relevant Director or Key Management.
24 Employee benefit expense (including Directors and Key Management)
Group Company
2016 2015 2016 2015
Group GBP GBP GBP GBP
----------------------------------------------------------------------------
Wages and salaries 809,954 844,343 627,155 524,501
Social security costs 134,096 198,064 49,463 47,611
Indemnity for loss of office 50,519 55,216 30,000 -
Share options granted to Directors
and employees (note 17) 324,890 100,248 324,890 100,248
----------------------------------------------------------------------------
1,319,459 1,197,871 1,031,508 672,360
----------------------------------------------------------------------------
Management 6 6 6 6
Field staff 12 26 - -
------------------------------------------
Average number of employees
including Directors and Key
Management 18 32 6 6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Employee benefit expenses includes GBP 393,712 (2015: GBP 586,348) of costs capitalised and included within intangible non-current assets.
Share options granted include costs of GBP 165,510 (2015: GBP 81,883) relating to Directors.
25 Investment in subsidiaries
2015
2016 (Restated)
Company GBP GBP
----------------------------------------------------------------------------
Shares in Group undertakings 2,348,042 2,348,042
Loans to Group undertakings 41,332,305 37,944,114
----------------------------------------------------------------------------
43,670,347 40,292,156
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Investments in Group undertakings are stated at cost. The loans to Group undertakings are repayable on demand and currently carry interest at 6%, however there is currently no expectation of repayment within the next twelve months and therefore loans are treated as non-current.
On 23 March 2006 the Company acquired the entire issued share capital of Horizonte Exploration Limited by means of a share for share exchange; the consideration for the acquisition was 21,841,000 ordinary shares of 1 penny each, issued at a premium of 9 pence per share. The difference between the total consideration and the assets acquired has been credited to other reserves.
26 Commitments
Operating lease commitments
The Group leases office premises under cancellable and non-cancellable operating lease agreements. The cancellable lease terms are up to one year and are renewable at the end of the lease period at market rate. The leases can be cancelled by payment of up to one month's rental as a cancellation fee. The lease payments charged to profit or loss during the year are disclosed in note 6.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
2016 2015
Group GBP GBP
----------------------------------------------------------------------------
Not later than one year 11,996 46,596
----------------------------------------------------------------------------
Total 11,996 46,596
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital Commitments
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
2016 2015
Group GBP GBP
----------------------------------------------------------------------------
Intangible assets - 42,100
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital commitments relate to contractual commitments for metallurgical, economic and environmental evaluations by third parties. Once incurred these costs will be capitalised as intangible exploration asset additions.
27 Contingent Liabilities
(a) Glencore Araguaia Project
The SdT deposit area concessions are subject to on-going litigation with a Brazilian third party. Glencore has disputed these claims. The parties have agreed certain protections including the receipt by HZM from Glencore of certain indemnities in respect of such litigation.
The Asset Purchase Agreement contains customary warranties regarding the GAP project and the parties' ability to enter into the Proposed Transaction and is subject to customary termination rights and confidentiality obligations.
(b) Other Contingencies
The Group has received a claim from various trade union organisations in Brazil regarding outstanding membership fees due in relation to various subsidiaries within the Group. Some of these claims relate to periods prior to the acquisition of the relevant subsidiary and would be covered by warranties granted by the previous owners at the date of sale. The Directors are confident that no amounts are due in relation to these proposed membership fees and that the claims will be unsuccessful. No subsequent actions, claims or communications from the various trade union organisations have been received subsequent to the requests for payment. As a result, no provision has been made in the Financial Statements for the year ended 31 December 2016 for amounts claimed. Should the claim be successful, the maximum amount payable in relation to fees not subject to the warranty agreement would be approximately GBP 64,000.
In 2013 the Group received an infraction notice from the Brazilian Environmental Agency's ('IBAMA') district office in Conceicao do Araguaia in connection with carrying out drilling activities in 2011 without the relevant permits. Drilling equipment was furthermore impounded. The Group strongly believes that it operated with all necessary permits and has initiated legal proceedings to overturn the infraction notice. The Group has secured cancellation of the injunction and has appealed the associated fine and infraction notices of approximately GBP 68,000 which has not been recognised in these financial statements.
In August 2014, the Group received a claim from a former employee in Brazil with regard to amounts allegedly due under the terms of his employment. The Group is defending the claim and it is not currently practicable to estimate the extent of any liability that may arise.
In December 2014, the Group received a writ from the State Attorney in Conceicao do Araguaia regarding alleged environmental damages caused by drilling activities in 2011. To ensure proper environmental stewardship, the Group conducts certified baseline studies prior to all drill programmes and ensures that areas explored are properly maintained and conserved in accordance with local environmental legislation. After drilling has occurred, drill sites and access routes are rehabilitated to equal or better conditions and evidence is retained to demonstrate that such rehabilitation work has been completed. In January 2015, the Group filed a robust defence against the writ. A court hearing was held in May 2015 at which documents were requested to confirm that valid environmental authorisations were in place. These were subsequently submitted as requested. No substantive financial claim continues to be made against the Group under the terms of the writ. The Group continues to believe that the writ is flawed and is working towards having it withdrawn in due course. As a result no provision has been made in the Financial Statements for the year ended 31 December 2016.
28 Parent Company Statement of Comprehensive Income
As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the Parent Company is not presented as part of these Financial Statements. The Parent Company's profit for the year was GBP 602,827 loss (2015: GBP 421,479 profit).
29 Events after the reporting date
No significant events have occurred since the reporting date.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information visit www.horizonteminerals.com.
About Horizonte Minerals:
Horizonte Minerals plc is an AIM and TSX-listed nickel development company focused in Brazil, which wholly owns the advanced Araguaia nickel laterite project located to the south of the Carajas mineral district of northern Brazil. The Company is developing Araguaia as the next major nickel mine in Brazil, with targeted production by 2019.
The Project has good infrastructure in place including rail, road, water and power.
Horizonte has a strong shareholder structure including Teck Resources Limited 17.9%, Henderson Global Investors 14.1%, Richard Griffiths 14.5%, JP Morgan 8.4%, Hargreave Hale 6.4% and Glencore 6.4%.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Except for statements of historical fact relating to the Company, certain information contained in this press release constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the potential of the Company's current or future property mineral projects; the success of exploration and mining activities; cost and timing of future exploration, production and development; the estimation of mineral resources and reserves and the ability of the Company to achieve its goals in respect of growing its mineral resources; and the realization of mineral resource and reserve estimates. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to: exploration and mining risks, competition from competitors with greater capital; the Company's lack of experience with respect to development-stage mining operations; fluctuations in metal prices; uninsured risks; environmental and other regulatory requirements; exploration, mining and other licences; the Company's future payment obligations; potential disputes with respect to the Company's title to, and the area of, its mining concessions; the Company's dependence on its ability to obtain sufficient financing in the future; the Company's dependence on its relationships with third parties; the Company's joint ventures; the potential of currency fluctuations and political or economic instability in countries in which the Company operates; currency exchange fluctuations; the Company's ability to manage its growth effectively; the trading market for the ordinary shares of the Company; uncertainty with respect to the Company's plans to continue to develop its operations and new projects; the Company's dependence on key personnel; possible conflicts of interest of directors and officers of the Company, and various risks associated with the legal and regulatory framework within which the Company operates.
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Contacts: Horizonte Minerals plc Jeremy Martin +44 (0) 20 7763 7157 Horizonte Minerals plc David Hall +44 (0) 20 7763 7157 [email protected] www.horizonteminerals.com finnCap Ltd (Corporate Broking) Emily Morris +44 (0) 20 7220 0500 finnCap Ltd (Corporate Finance) Christopher Raggett +44 (0) 20 7220 0500 finnCap Ltd (Corporate Finance) James Thompson +44 (0) 20 7220 0500 finnCap Ltd (Corporate Finance) Anthony Adams +44 (0) 20 7220 0500 Shard Capital (Joint Broker) Damon Heath +44 (0) 20 7186 9952 Shard Capital (Joint Broker) Erik Woolgar +44 (0) 20 7186 9952 St Brides Partners Ltd (PR) Lottie Brocklehurst +44 (0) 20 7236 1177 St Brides Partners Ltd (PR) Elisabeth Cowell +44 (0) 20 7236 1177
Source: Horizonte Minerals Plc
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