02340546-00000001-00030947-w@#Clients#4427#001#01188307-PDF 002002001001Alexander Mining plc 2015042820150428134240101
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Audited annual financial statements - English
20150428
20150428
BC
AB
00030947
Alexander Mining plc
Alexander Mining plc
Martin Rosser
44
2072921300
44
2072921313
England and Wales
099099000000000000000090000091000999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999
001
20050208
1231
019
00110000000000000999
10000000000009999999
PKF (UK) LLP
PKF (UK) LLP
Equity Financial Trust Company
Equity Financial Trust Company
001
20130111
13:04:13
0
AXM
20141231
001
35 Piccadilly
London
United Kingdom
United Kingdom
W1J 0DW
44
2072921300
44
2072921313
35 Piccadilly
London
United Kingdom
United Kingdom
W1J 0DW
440
2072921300
440
2072921313
Alexander Mining is an AIM listed mining and mineral
processing technology company with a reputation for
strong technical management, allied with financial markets
expertise and experience.
The Company’s activities are directed towards the objective
of becoming a highly profitable and diversified mining
technology company.
This will be achieved from the commercialisation of its
proprietary mineral processing technologies, partnerships
in producing mines and the acquisition of equity positions
in advanced projects.
Strategic Report
About Us
Alexander Mining plc Annual Report &?Accounts 2014
Further
advancement of our
proprietary leaching
technologies
Continued interest
from mining
companies in
leaching
technologies
Continued success
in registration of
patents
Highlights
Contents
Strategic Report
IFC Highlights
01 Chairman’s Statement
03 Review of Operations
06 Corporate and Social Responsibility
Corporate Governance
07 Directors
08 Directors’ Report
10 Independent Auditor’s Report
Financial Statements
11 Consolidated Income Statement
11 Consolidated Statement of
Comprehensive Income
12 Consolidated Balance Sheet
13 Company Balance Sheet
14 Statements of Cash Flows
15 Consolidated Statement of
Changes in Equity
15 Company Statement of
Changes in Equity
16 Notes to the Financial Statements
Shareholder Information
29 Notice of Annual General Meeting
30 Notes to the Notice of
Annual General Meeting
31 Form of Proxy
IBC Directors and Advisors
After an encouraging start, the Company’s progress during 2014 was not
as rapid as we envisaged. Although significant technical achievements
were made, our commercialisation efforts, due to third party business
circumstances and related decisions beyond our control, were frustrated.
However, after an indifferent year, I am delighted with the results of the
management team’s efforts late in the reporting year which enabled the
release of the most recent news announced in February 2015 regarding
the potentially transformative commercialisation opportunity with Compass
Resources Limited (‘Compass’). Subject to the execution of a definitive
agreement, which is currently under negotiation, this will provide for the
granting of an AmmLeach
®
licence and certain technical and management
services for use at Compass’ Browns Oxide copper-cobalt mine.
This agreement would bring significant revenue to Alexander by way
of upfront and ongoing services fees, plus a future production royalty.
Technical work
There was notable research and technical development success, which
underwrites our commercialisation programme. This included the major
development announced in April 2014 of the breakthrough testwork to
produce the world’s first zinc cathode using our AmmLeach
®
technology.
That work used conventional leaching, solvent extraction and electro-winning
equipment in the test facility available for hire at Simulus Engineers (‘Simulus’),
Perth, Western Australia. Importantly, supporting one of the most attractive
benefits of the AmmLeach
®
technology, i.e. significantly lower capital and
operating costs, and operating conditions at ambient temperature and
pressure. This represents the first successful demonstration of AmmLeach
®
technology for zinc at this scale and the first solvent extraction of zinc from
primary oxide ores using ammoniacal leaching.
We believe that this confirmed our AmmLeach
®
process as the only
economically viable method to unlock the value of hitherto problematic
zinc oxide deposits. The Company has built up an extensive database of all
of the world’s major zinc oxide deposits and has now conducted favourable
AmmLeach
®
amenability testwork on samples from a significant number.
The Republic of Turkey is a particular country of interest.
Zinc oxide deposits are highly attractive in terms of their tendency to have
high average zinc grades both absolutely and relatively when compared with
world averages for sulphide ores. In addition, the fact that most of the known
deposits are at or near surface generally makes for easier mining.
However, the inherent processing challenges have meant that almost all
remain unexploited except those with grades high enough to justify direct
shipment (+20-25% zinc) to smelters. Those deposits found in the Tethyan
orogenic belt of Turkey are especially prospective.
Commercialisation activities
The results of our commercialisation efforts during the year were
disappointing. In particular, this was due to the unravelling of the commercial
licence, financing and consultancy agreement (‘Agreement’) announced in
February with the Company’s large shareholder the Ebullio Group (‘Ebullio’).
This was not due to any technology considerations but with Ebullio’s
commercial decision to terminate its agreement to acquire all of the assets in
Turkey of Red Crescent Resources Limited. As this was a condition precedent
the Agreement was terminated. Nevertheless, we continue to have a close
relationship with Ebullio and to support its interest in developing mining
opportunities in Turkey.
In July, the Company announced that Phoenix Global Mining (‘PGM’) had
confirmed its interest in investigating the use of AmmLeach
®
for highly
prospective zinc oxide properties in Turkey. At that time PGM had an earn-in
Agreement with a Turkish industrial group, to develop their base metals
exploration and mining licences. PGM subsequently decided to drop this
opportunity for commercial reasons.
Alexander announced in September that it had signed an option agreement
(‘Option Agreement’) with a mid-tier mining company (the ‘Entity’). The Entity
was a highly regarded mid-tier, multi-commodity mining company with
exploration, development and operational experience. Under the Option
Agreement, the Entity had been granted an exclusive three months’ option
period to complete due diligence on the AmmLeach
®
zinc processing
technology. This was in exchange for the cash payment to Alexander of
US$360,000. (£217,000). Exercise of the option would have resulted in further
cash payments in exchange for Alexander equity, as well as a licence with
a gross sales revenue royalty on all metals production by the Entity using
the AmmLeach
®
technology.
Although a highly detailed and favourable technical due diligence was
conducted, unfortunately the Entity had a change in its corporate plans due
to a need to focus more on its domestic growth strategy. Accordingly,
in December the Entity informed the Company that it would not exercise
its option. It advised that its due diligence on the use of the AmmLeach
®
process for zinc production was favourable and it had formed the view that
there is value in the technology. It also said that it remained interested in
continuing to build its relationship with Alexander.
Strategic Report
Chairman’s Statement &
Review of the Year
01Alexander Mining plc Annual Report &?Accounts 2014
Intellectual property
The results of the programme, in conjunction with Wrays, the Company’s
patent attorney, to protect our leaching technology intellectual property (‘IP’),
measured by patents granted by method and country have been excellent.
This includes patents granted in Mexico, Canada, Mongolia, Botswana,
Mozambique, Namibia, Tanzania and Zambia
Developments in 2015
In late February 2015, the Company was delighted to announce that it had
signed a non-binding Heads of Agreement (‘HoA’) with Compass, a listed
Australian public company (ASX:CMR), for executing a definitive agreement
(‘Agreement’) covering an AmmLeach
®
licence and certain technical
management services for Compass in the Northern Territory, Australia.
These arrangements should significantly accelerate the first commercial
adoption of Alexander’s proprietary AmmLeach
®
technology with
particular relevance to copper/cobalt resources.
We greatly look forward to working closely together with Compass under
this transformative agreement. Assuming the completion of a positive
AmmLeach
®
feasibility study and production go-ahead, the mine would
partner our AmmLeach
®
technology with existing high quality mining assets.
The plan is to generate significant economic value from the Browns Oxide
mine and the first step is the completion of an AmmLeach
®
feasibility study,
with a pilot plant programme funded by Compass. This pilot plant programme
would be carried out at the independent commercial facilities of Simulus,
under the supervision of Alexander’s technical personnel. This would lead
to the completion of a feasibility study into commercial production and is
dependent upon statutory approval and obtaining all necessary permits
required to recommence production.
Compass is currently working to complete a financing facility with
sophisticated institutional investors as the first stage in a proposed major
refinancing and relisting of the company. The proceeds of their financing will
be used for various purposes, including payments due under the Agreement
to Alexander and for the third party AmmLeach
®
pilot plant and feasibility
study costs. Moreover, Australia is one of the world’s leading mining countries
and together with Alexander’s metallurgical team based in Perth, Western
Australia, it provides an exemplary project to work on together with Compass.
Compass and Alexander believe that market conditions are the most
favourable for several years for growth by attractively priced corporate
acquisitions. Accordingly, the companies expect to form a strategic alliance
in Australia to investigate the acquisition by Compass of copper resources
which can be exploited using the proprietary Leaching Technologies of
Alexander. This will be on terms to be agreed in respect of each such project.
Financial
The Company has maintained its very tight rein on costs whilst ensuring the
protection of its intellectual property through patent applications. In January
2015, the Company raised £360,000 (gross) through the issue of 72,000,000
new ordinary shares to institutional and other investors. The net proceeds of
the Placing were for general working capital purposes. In conjunction with the
expected revenue from the agreement with Compass, this should ensure
adequate funding for the next twelve months on the current budget.
Outlook
In these uncertain economic times, especially for the mining business,
I believe that Alexander is better placed than most in the junior sector.
Although global economic recovery is volatile and commodity prices have
fallen significantly of late, the Company will continue to work hard to succeed
with the commercialisation of its technology. Indeed the weakness in most
base metals prices during the last year and the deleterious impact on
operating margins has led to an imperative for companies to cut costs
wherever possible. In this environment, we believe that the scope for major
operating and capital cost savings for existing and potential mines using our
technology should be of ever greater interest. Particularly as the opportunity
offered has significant environmental benefits.
The exciting opportunity with Compass offers Alexander a most encouraging
start to 2015 and I look forward with considerable optimism.
As always, I would like to thank the Company’s shareholders for their support
and also our employees, consultants and directors for their highly-valued
effort during the last year.
Matt Sutcliffe
Executive Chairman
10 April 2015
Strategic Report
Chairman’s Statement &
Review of the Year
02Alexander Mining plc Annual Report &?Accounts 2014
Business Objective
Alexander’s corporate objective is the profitable commercialisation of its
proprietary leaching technologies (‘Leaching Technologies’) to achieve long-
term capital growth and revenue from licences and royalties. This is based on
the potential for major operating and capital cost savings for suitable mines
using Alexander’s Leaching Technologies as the principal mineral processing
method to produce base metals at the mine site. In addition, the Leaching
technologies may offer significant operating and environmental benefits.
The base metals of most commercial importance are copper, zinc and cobalt.
Business Strategy
Alexander has adopted a flexible dual approach to the commercialisation of
its technology. It has held discussions and signed confidentiality agreements
with a significant and growing number of mining companies, metals traders
and specialist investment institutions. In addition, it has been proactive in
identifying mining properties, and their owners, with potential for the use of
the Leaching Technologies. As a result, Alexander has built up a comprehensive
database and also conducted amenability testwork on the many samples
provided. Discussions have taken place and continue with interested parties,
the purpose of which is to negotiate issuing to owners a licence to use the
Leaching Technologies in exchange for royalties, cash fees and/or minority
equity interests in projects.
Key Financial and Other Performance Indicators
At this stage in its development, Alexander is focused on the commercialisation
of its Leaching Technologies. As and when it is successful in realising this
stage production, financial, operational, health and safety and environmental
key performance indicators will become relevant and will be measured and
reported upon as appropriate.
Business Risks
Alexander’s main business risk is related to the possibility of it not be able
to successfully commercialise its technology. Inherent risk diversification is
offered geographically, by technology and by metal. When compared with
conventional exploration-driven mining companies, the business risks differ
markedly. The stages at which Alexander’s technology is of interest to a
potential user is from the project feasibility study stage, through to existing
mining operations. As such, the inherent technical risks of the mining industry
in discovering a potential new mine do not apply as a deposit has already
been found.
Development risks
Alexander’s strategy to commercialise its proprietary Leaching Technologies,
either through third party licensing agreements or direct equity interests
in amenable deposits, is subject to specific technical risks relating to the
technologies and wider technical risks like final engineering, which are
relevant to the mining industry as a whole.
There is a risk that Alexander will be unable to negotiate suitable licensing
arrangements with third parties for the use of its proprietary Leaching
Technologies. Alexander may also be unable to negotiate as an alternative
the acquisition of equity interests in amenable deposits at commercially
attractive prices, or finance the acquisition thereof. Third party aspects
beyond the control of Alexander remains a risk.
Alexander’s proprietary Leaching Technologies have not yet been applied
on an industrial scale. The results of testwork performed to date, both in the
laboratory and at pilot plant scale, although significant and positive may not
be reproducible at an industrial scale in an economically efficient manner.
Alexander mitigates and manages the developmental risk for the
commercialisation of the technologies by holding discussions with a wide
range of companies representing a number of target projects and mines with
a diversification of both metals and countries. In addition, it is likely to work
with suitably experienced third parties, including independent metallurgical
and process engineering experts in the partnering of its technologies with
mineral deposits and/or mines.
Loss of key personnel from Alexander
The commercialisation of Alexander’s leaching technologies is dependent
upon the continuing application of skills provided by highly qualified and
experienced employees, directors and consultants. There is a risk that
Alexander’s management, employees, directors and consultants will be
targeted by competitors. The loss of any such key personnel may adversely
affect the ability of Alexander to achieve its objectives. Alexander mitigates
this risk by ensuring that all key employees, directors and consultants are
rewarded appropriately and participate in Alexander’s share option scheme,
further details of which are set out in note 20 to the Financial Statements.
Intellectual property risk
Alexander’s success depends in part on its ability to obtain and maintain
protection for its intellectual property, so that it can ensure that royalties or
licence fees are payable for the use of its proprietary leaching technologies.
Alexander has applied for patents covering its Leaching Technologies in most
countries of commercial interest. Although some have been granted, there is
a risk that other patents may not be granted and Alexander may not be able
to exclude competitors from developing similar technologies.
However, Alexander actively manages its intellectual property rights portfolio,
which includes significant proprietary knowhow in addition to the patent
pending innovations. When dealing with potential clients, Alexander ensures
that confidentiality agreements are signed acknowledging the full range of
Alexander’s intellectual property. In addition, contracts are in place with all
relevant employees, consultants, contractors and advisers to ensure that all
intellectual property rights arising in the course of their work on behalf of
Alexander vest with Alexander, and that such intellectual property can only
be used for the benefit of Alexander.
Environmental risk
Following the sale of its Peruvian subsidiary, the Company is no longer
exposed to environmental risks.
Financial risks are referred to in the Directors’ Report under Risk Management
and Financial Risks on page 8.
MetaLeach
®
MetaLeach Limited (‘MetaLeach
®
’) is Alexander’s subsidiary for the ownership
and commercialisation of its proprietary hydrometallurgical mineral processing
technologies. These technologies have the potential to revolutionise the
extraction processes for many base metal deposits, reducing costs, and/or
improving recoveries, and hence enhancing operating margins at the mine
site. Being capable of producing metal on-site greatly enhances the mine gate
economics compared to conventional concentrators. In addition, in many
cases the technologies will enable the treatment of base metals deposits
which hitherto have not been possible to treat. The technologies are
especially suitable for high-acid-consuming carbonate hosted ores.
MetaLeach
®
owns the intellectual property to two ambient temperature,
ambient pressure hydrometallurgical technologies, namely AmmLeach
®
(patents granted and pending) and HyperLeach
®
(patents granted and
pending). These technologies are environmentally friendly, cost effective
processes for the extraction of base metals at ambient temperature and
pressure from amenable ore deposits and concentrates allowing the
production of high value products at the mine site (i.e. metal powder
or sheets).
Strategic Report
Review of Operations
03Alexander Mining plc Annual Report &?Accounts 2014
Comparison of AmmLeach
®
with acid leaching of copper
Parameter Acid AmmLeach
®
Mineralogy Oxides, carbonates, silicates, some sulphides Almost any – dependent upon pre-treatment stage
Selectivity Low: iron, manganese, calcium and silica are likely problems High: no iron, manganese, calcium or silica dissolution
Rate of extraction Limited by acid strength and diffusion Ammonia concentration in leach solution
matched to leaching rate
Recovery 80% of leachable metal >80% in ~130 days
Heap lifetime ~55-480 days ~80-130 days
Sulphate precipitation Reduced permeability in heap, break down of clays and Calcium and iron solubilities too low for precipitation,
plant scaling due to precipitation of gypsum and jarosite also low sulphate levels in leach solution
Leachant consumption Depends upon carbonate content but 30 to over 100kg/t Depends on concentration used but range of 3-5kg/t
reported for operating heaps measured at former Leon copper project;
<1kg/t in second pilot run
Safety Large volumes of concentrated acid required to be On demand ammonia / carbon dioxide systems using
transported to site hydrolysis of urea minimises risks. Anhydrous
ammonia NOT required
Precious metals Heap to be neutralised before cyanidation. Needs to be Neutralisation not required, potential for simultaneous
100% effective to prevent cyanide release recovery using thiosulphate or sequential leaching
using cyanide
Decommissioning Heap requires washing, neutralisation and long term Heap can be washed and left, residual ammonia acts
monitoring of acid mine drainage (AMD) as fertiliser for vegetation regrowth, minimal likelihood
of AMD
Strategic Report
Review of Operations
continued
04Alexander Mining plc Annual Report &?Accounts 2014
The AmmLeach
®
Process
Developed for the extraction of base metals, especially copper, zinc and
cobalt from ore deposits and concentrates. The process utilises ammonia
based chemistry to selectively extract metals from ores under ambient
temperature and pressure conditions. The target ores will typically be high
acid consuming making them uneconomic using conventional processes.
AmmLeach
®
is a viable alternative to acid leach processes as it is far more
selective for valuable metals whilst rejecting unwanted metals. This selectivity
offers a considerable number of technical and economic benefits through
simplification of the flow sheet.
AmmLeach
®
uses the same three major stages as acid processes - leaching,
solvent extraction (SX) and electro-winning (EW). Leaching occurs in two
steps, an ore specific pre-treatment which converts the metals into a soluble
form and the main leaching step, which uses barren solution recycled from
the SX stage. AmmLeach
®
requires no special purpose built equipment and
it can directly replace acid leaching in an existing operation. It is suitable for
both low grade heap leaching and higher grade tank leaching.
The AmmLeach
®
process has an extremely high selectivity for the target
metal over iron, silica, aluminium and manganese, which are insoluble under
AmmLeach
®
conditions. Calcium and magnesium solubilities are also
significantly suppressed by the presence of carbonate.
Decommissioning of the heap is extremely simple as no neutralisation is
necessary and the potential for acid mine drainage is virtually eliminated.
After final leaching the heap is simply washed to recover ammonia and then
left to vegetate, with the residual ammonia acting as a fertiliser. The alkaline
residue allows immediate application of cyanide leaching of gold and silver in
ores where there is an economic precious metal content after removal of high
cyanide consuming metals such as copper.
Copper
Copper is the world’s most important base metal by value and its price
is a bellwether of world industrial production. Approximately 20% of global
mined copper production is produced from oxide ores using leaching,
solvent extraction and electrowinning (SX-EW) hydrometallurgy. Alexander
believes that its proprietary leaching technology has the potential to increase
significantly the share of global copper produced using hydrometallurgical
processes. Hydrometallurgical recovery of copper is much more attractive
to mine owners than the production of concentrates from sulphide ores as it
results in the production of high value cathodes at the mine. When sold these
realise almost 100% of the copper content, compared to concentrates where
owners may receive as little as 60% of the copper value.
The capability of tailoring the rate of recovery is an important feature of the
AmmLeach
®
process and allows the plant to operate more flexibly with the rate
of leaching matched to the operating capacity of the solvent extraction plant.
A scoping study indicated that it is possible to convert an acid heap leach
operation directly to an AmmLeach
®
with minimal capital expenditure.
Zinc
The vast majority (~95%) of world zinc metal production uses smelting
to recover and refine zinc metal from zinc-containing feed material such as
zinc concentrates or zinc oxides. Development of a new hydrometallurgical
process route for zinc oxides has the potential to simplify zinc refining.
MetaLeach
®
has developed a novel (patents granted and pending) process
for the solvent extraction of zinc from ammoniacal solutions. Test work has
shown that zinc can be very efficiently extracted using commercially available
reagents and stripped with acid solutions, with better efficiency and greater
selectivity than has previously been reported.
The general flow sheet for the zinc process is straightforward and consists
of leaching, purification and recovery stages. The nature of the leach stage
depends upon a number of factors, notably the grade of ore and leaching
kinetics. High grade, fast leaching ore would be readily accommodated by
an agitated tank leach, whilst low grade, slow leaching ores would be better
suited to heap leaching. Depending upon the product desired, there may be
no need for a solution purification stage, considerably simplifying the overall
process flow sheet.
A wide range of different oxide zinc mineralogies can potentially be treated
by AmmLeach
®
, including those with significant hemimorphite content which
presently can only be treated using acid. In AmmLeach
®
solutions, the
leaching can be extremely rapid provided the conditions are appropriately
matched to the ore. The acid route requires ore containing >10% zinc to be
economically viable. The co dissolution of silica and iron in the acid results in
a very complex flow sheet, as typified by that used at the Skorpion mine in
Namibia.
Copper process economics
An analysis of the economics of the AmmLeach
®
process compared with
conventional acid leaching for high acid consuming copper ores is dependent
upon a multitude of parameters specific to the mineralogy of the deposit and
its location. Suffice it to say that the capital and operating cost savings can be
major, particularly for high acid consuming ore bodies located in remote
locations with long transport distances. This is because the safe supply of
sulphuric acid is logistically difficult and expensive as the transport costs of
bulk chemicals in-country to site can be as much again as, or more than, the
free-on-board cost.
In many instances, economics will dictate that the mine will have to build
an expensive sulphur burning sulphuric acid plant for the supply of acid.
In addition, to regulate supply variations and for acid plant maintenance, acid
storage tanks for around one month’s consumption, whether the mine makes
its own or buys in acid, will be required, significantly adding to the capital
cost. As well as a substantial capital cost saving, this is where AmmLeach
®
has a major operating cost advantage too, due to an order of magnitude
reduction in reagent consumption per tonne of ore processed.
For example, for even a moderately high acid consuming ore, ten to fifteen times
as much acid (50kg/t) as ammonia will be consumed. This is due to the
fundamental difference between the two leaching processes in that whereas acid
is consumed by gangue minerals during leaching, ammonia is not. The reagent is
recycled and only relatively small losses of ammonia need to be made up.
Capital cost comparisons for the AmmLeach
®
technology and conventional
acid leaching assume that certain aspects are common to both leach
systems i.e. mining, mine infrastructure, mine waste disposal, process plant
residue disposal, project buildings (administration, laboratories, workshop,
warehouse etc.), site access roads, the power transmission line and the water
supply line. Hence any comparison is limited to the process plant itself.
Typically for copper only oxide ores, process plant capital costs for
AmmLeach
®
and acid heap leach operations of the same size are similar as,
excluding reagent production and storage/handling costs on site, essentially
the same equipment is used for both processes. However, importantly, where
economics dictate that sulphuric acid is made on site, there can be a major
differential associated with reagents and, in particular, the differential costs of
ammonia and sulphuric acid.
The AmmLeach
®
process can achieve much higher copper solution
concentrations in the pregnant leach solution (PLS) than are typically seen in
acid plants. Typical copper concentrations for an acid leaching operation are
of the order of 1-2g copper (Cu)/L compared to PLS concentrations for the
AmmLeach
®
process of 6-12g Cu/L. This, coupled to the much greater
copper transfer in solvent extraction, allows the efficient handling of high
copper tenors in PLS (in acid plants this would necessitate larger volume
mixer-settlers due to the higher volume of PLS and lower transfer between
aqueous and organic phases); i.e. more metal produced per unit size of plant
than in a corresponding acid leach-SX-EW plant.
Moreover, in ores where cobalt is a valuable by/co-product (e.g. DRC and
Zambia), AmmLeach
®
offers additional significant capital and operating cost
savings. This is because in the case of the acid leach circuit the cobalt
recovery circuit is complex in that the main leach solubilises a range of
metals. The raffinate bleed will therefore contain unextracted copper, iron
(both ferrous and ferric), manganese and aluminium. Other species may also
be present and these will need to be examined and potentially dealt with as
well. Such metals include nickel and cadmium. For the production of metal
a multiplicity of unit operations are required ahead of cobalt metal production.
In the case of the alkaline leach circuit, the requirements for purification ahead
of final cobalt recovery are much less complex. The leach itself is highly
selective for copper and cobalt since not all metals are soluble in ammoniacal
solutions. In this respect there is negligible iron, silica, calcium, aluminium and
manganese present in the liquor. A number of possibilities exist for recovery of
cobalt from the ammoniacal solution.
Commercialisation of AmmLeach
®
The following metal ores are particular targets for the commercialisation
of the AmmLeach
®
process:
• Copper and copper/cobalt oxide deposits
• Zinc oxide deposits
• Copper-gold and zinc-silver ores (AmmLeach
®
followed by
cyanide leaching)
Geographic diversification is offered as the countries with the most
prospective geology for hosting high acid consuming copper (Cu), cobalt (Co)
and zinc (Zn) oxides are Chile (Cu), Peru (Zn), Mexico (Zn), Central America
(Zn), USA (Cu), Democratic Republic of the Congo (Cu, Cu/Co), Zambia (Cu),
Turkey (Zn, Cu) and Australia (Cu).
Of these, the copper process has already been demonstrated at pilot plant
scale for heap leaching and at bench scale for agitated leaching. The cobalt
(or copper and cobalt oxide ore) process has been small pilot scale tested
successfully for agitated leaching and at bench scale for heap leaching.
Further development of the zinc process has led to a new solvent extraction
process for zinc from ammoniacal solutions, for which several patents have
been granted and further patents are pending. This patent application is for
the recovery of zinc from ores which do not require pre-treatment before
ammoniacal leaching. A patent covering a process allowing selective leaching
of zinc from sideritic zinc ores has also been granted.
Because of the tailored pre-treatment step, almost any ore type is amenable
to the AmmLeach
®
process. Thus far, it has been demonstrated on
predominantly oxide ores but many sulphide ores have also been shown to
leach after appropriate pre-treatment. This advance allows the treatment of
mixed oxide-sulphide ores which are often present in the transition from
weathered to un-weathered ore. As a project proceeds, the AmmLeach
®
process can be modified to cope with the changing mineralogy from oxide
to sulphide without substantial capital expenditure.
Polymetallic ores can also be processed by AmmLeach
®
with separation
achieved using solvent extraction to separate metals and produce multiple
revenue streams. The minimisation of ammonia transfer allows these metals
to be recovered directly from their strip solution by precipitation, crystallisation
or electro-winning.
The alkaline conditions used in the AmmLeach
®
process allow precious
metals to be recovered from the base metal depleted heap using a secondary
leach step. The heap can simply be washed to recover ammonia and subjected
to standard alkaline cyanidation to recover gold and silver. The incorporation
of precious metals recovery within the AmmLeach
®
process is being
investigated and preliminary work on the leaching of cyanide consuming
metals prior to precious metal leaching with cyanide looks highly promising.
HyperLeach
®
process
The HyperLeach
®
process (patents granted and pending), although less
advanced, has significant potential. HyperLeach
®
may be suitable for the
extraction of metals, especially copper, zinc, nickel, cobalt, molybdenum and
rhenium from sulphide ore deposits and concentrates. The process utilises
chlorine based chemistry to solubilise metals from ores under ambient
temperature and pressure conditions. The HyperLeach
®
process can be
operated as either heap leach or tank leach.
Great promise has been shown for molybdenum–rhenium sulphide ores
with low reagent consumption which could make heap leaching of such ores
economically feasible for the first time. Low grade nickel sulphide ores have
also shown great promise with high metal recoveries being achieved during
agitated leaches. Preliminary work has indicated that heap leaching may be
possible for some ores. This allows the treatment of ores which are too low
grade to process via the conventional, grind, float and smelt route.
Work in an independent laboratory has resulted in further scale-up data on
the leaching of copper sulphide concentrates to produce copper metal at the
mine site. These results have shown that it is possible to leach the majority of
copper from chalcopyrite concentrates whilst leaving a residue which is
saleable as a smelter feed. Further work on heap leaching low grade copper
sulphide ores is planned.
HyperLeach
®
can be used as a pre-treatment for AmmLeach
®
to provide the
best of both processes. HyperLeach
®
solubilises and mobilises target metals
from sulphides with AmmLeach
®
leaching the target metals selectively. This
combination would allow processing of a whole ore body from the oxide cap
through the transition zone to the sulphide basement in a single plant with
only small changes during the lifetime of the orebody.
Strategic Report
Review of Operations
continued
05Alexander Mining plc Annual Report &?Accounts 2014
The Strategic Report, as set out on pages 01 to 06,
has been approved by the Board.
On behalf of the Board
T A?Cross
Company Secretary
10 April 2015
The Group’s core values are:
• To be a good corporate citizen, demonstrating integrity in each
business and community in which we operate
• To be open and honest in all our dealings, while respecting
commercial and personal confidentiality
• To be objective, consistent and fair with all our stakeholders
• To respect the dignity and wellbeing of all our stakeholders and
all those with whom we are involved
• To operate professionally in a performance-orientated culture
and be committed to continuous improvement
Our Stakeholders
We are committed to developing mutually beneficial partnerships with
our stakeholders throughout the life cycle of our activities and operations.
Our principal stakeholders include our shareholders; employees, their families,
and employee representatives; the communities in which we operate;
our business partners and local and national governments.
Environmental Policy
The Group is aware of the potential impact that its operations may have
on the environment. It will ensure that all of its activities and operations
have the minimum environmental impact possible.
The Group intends to meet or exceed international standards of excellence
with regard to environmental matters. Our operations and activities will be in
compliance with applicable laws and regulations. We will adopt and adhere
to standards that are protective of both human health and the environment.
For our operations we will develop and implement closure and reclamation
plans that provide for long-term environmental stability and suitable post-
mining beneficial land-uses at all relevant sites.
Each employee (including contractors) will be held accountable for ensuring
that those employees, equipment, facilities and resources within their area
of responsibility are managed to comply with this policy and to minimise
environmental risk.
Ethical Policy
The Group is committed to comply with all laws, regulations, standards and
international conventions which apply to our businesses and to our relationships
with our stakeholders. Where laws and regulations are non-existent or
inadequate, we will maintain the highest reasonable standards appropriate.
We will in an accurate, timely and verifiable manner, consistently disclose
material information about the Group and its performance. This will be readily
understandable by appropriate regulators, our stakeholders and the public.
The Group complies and will continue to comply to the fullest extent with
current and future anti-bribery legislation.
We will endeavour to ensure that no employee acts in a manner that would
in any way contravene these principles. The Group will take the appropriate
disciplinary action concerning any contravention.
Community Policy
The Group’s aim is to have a positive impact on the people, cultures and
communities in which it operates. It will be respectful of local and indigenous
people, their values, traditions, culture and the environment. The Group will
also strive to ensure that surrounding communities are informed of, and where
possible, involved in, developments which affect them, throughout the life
cycle of our operations. It will undertake social investment initiatives in the
areas of need where we can make a practical and meaningful contribution.
Labour Policy
The Group is committed to upholding fundamental human rights and,
accordingly, we seek to ensure the implementation of fair employment
practices. The Group will also commit to creating workplaces free of
harassment and unfair discrimination.
Health and Safety Policy
The Group is committed to complying with all relevant occupational health
and safety laws, regulations and standards. In the absence thereof, standards
reflecting best practice will be adopted.
Corporate governance
The Board intends that, so far as is relevant for a group of its size and stage
of development, it will continue to maintain best practice governance.
The Board has established appropriately constituted Audit and Remuneration
Committees with formally delegated responsibilities.
The Board of Directors
The Board of Directors currently comprises six members, including two
executive directors and four non-executive directors. The Board has a
wealth of both corporate finance and mining experience, from exploration,
development and through to production. The structure of the Board ensures
that no one individual or group dominates the decision making process.
Board meetings are held regularly to provide effective leadership and overall
management of the Group’s affairs through the schedule of matters reserved
for Board decisions. This includes the approval of the budget and business
plan, major capital expenditure, acquisitions and disposals, risk management
policies and the approval of financial statements. All directors have access to
the advice and services of the Company’s solicitors and the Company
Secretary, who is responsible for ensuring that all Board procedures are
followed. Any director may take independent professional advice at the
Company’s expense in the furtherance of their duties.
The Audit Committee
The Audit Committee, which meets not less than twice a year, considers the
Group’s financial reporting (including accounting policies) and internal financial
controls. The Audit Committee, which comprises Mr E Morfett (Chairman) and
Mr R Davey, receives reports from management and the external auditor to
enable it to fulfil its responsibility for ensuring that the financial performance
of the Group is properly monitored and reported on. In addition, it keeps
under review the scope, cost and results of the external audit, and the
independence and objectivity of the external auditor.
The Remuneration Committee
The Remuneration Committee, which meets when necessary, is responsible
for making recommendations to the Board on directors’ and senior
executives’ remuneration. The Committee comprises Mr R Davey (Chairman)
and Mr J Bunyan. Non-executive directors’ remuneration and conditions are
considered and agreed by the Board.
Financial packages for executive directors are established by reference to
those prevailing in the employment market for executives of equivalent status
both in terms of level of responsibility of the position and their achievement of
recognised job qualifications and skills. The Committee will also have regard
to the terms which may be required to attract the equivalent experienced
executive to join the Board from another company.
Internal Controls
The directors acknowledge their responsibility for the Group’s systems of
internal controls and for reviewing their effectiveness. These internal controls
are designed to safeguard the assets of the Group and to ensure the reliability
of financial information for both internal use and external publication. Whilst the
directors acknowledge that no internal control system can provide absolute
assurance against material misstatement or loss, they have reviewed the
controls that are in place and are taking the appropriate action to ensure that
the systems continue to develop in accordance with the growth of the Group.
Relations with Shareholders
The Board attaches great importance to maintaining good relations with its
shareholders. Extensive information about the Group’s activities is included
in the Annual Report and Accounts and Interim Reports, which are sent to
all shareholders. Market sensitive information is regularly released to all
shareholders concurrently in accordance with stock exchange rules.
The Annual General Meeting provides an opportunity for all shareholders to
communicate with and to question the Board on any aspect of the Group’s
activities. The Company maintains a corporate website where information on
the Group is regularly updated and all announcements are posted as they are
released. The Company welcomes communication from both its private and
institutional shareholders.
Share dealing
The Company has adopted a share dealing code for directors and relevant
employees in accordance with the Rules of the Alternative Investment Market
(‘AIM’) of the London Stock Exchange and will take proper steps to ensure
compliance by the directors and those employees.
Strategic Report
Corporate and Social
Responsibility
06Alexander Mining plc Annual Report &?Accounts 2014
Matt Sutcliffe
Executive Chairman
Matt Sutcliffe graduated from the University of Nottingham in 1990 with a PhD
in mining engineering. He is also a chartered engineer and worked as a
mining engineer in underground nickel mines from 1990 to 1994 with Inco
Limited, within its Manitoba division. He has additional experience in operating
gold and coal mines gained whilst working with Gencor and British Coal.
For 10 years before founding Alexander, he worked in the City of London as
a mining analyst and corporate financier specialising in the resources sector.
During this time he was a mining analyst at T Hoare & Co, head of mining at
Williams de Broe and a director of corporate finance at Evolution Beeson
Gregory (now Evolution Securities). At Evolution Beeson Gregory, he advised
a large number of public natural resources companies, as well as arranging
a number of equity listings for junior and mid-tier mining and oil and gas
companies on AIM. Whilst at both Williams de Broe and Evolution Beeson
Gregory, he was recognised as one of the industry pioneers for listing mining
companies on AIM.
Martin Rosser
Chief Executive Officer
Martin Rosser is a chartered mining engineer and FIMMM who has 33 years’
practical industry and financial markets experience since graduating with a
degree in mining engineering from the Camborne School of Mines in 1981.
Initially, he spent five years working as a mining engineer in Australia, both
on underground and surface gold mines, including time with Western Mining
Corporation at Central Norseman. In 1987, he returned to the UK and worked
as a mining analyst with two City stockbrokers.
He then joined the natural resources industry specialist firm of David
Williamson Associates Limited in 1989 as a founder employee, and
subsequently Managing Director. During this time, until joining Alexander in
June 2005, he provided extensive corporate finance advisory and arranger
services to the firm’s worldwide natural resources industry clients.
From 2002, until its takeover by Lonmin plc in January 2007, he was a
non-executive director of TSX listed AfriOre Limited.
Roger Davey
Non-Executive Director
Roger Davey is a chartered mining engineer and a graduate of the Camborne
School of Mines, with over 30 years’ experience in the mining industry. For 13
years, until the end of 2010, he was an Assistant Director and the Senior
Mining Engineer at N M Rothschild (London) in the Mining and Metals project
finance team, where he had responsibility for the assessment of the technical
risks associated with project loans.
Mr Davey was appointed to the board of Alexander in August 2006. Prior to
this, his experience covered the financing, development and operation of both
underground and surface mining operations in gold and base metals at senior
management and director level in South America, Africa and the United
Kingdom. This includes, from 1994 – 1997, being the General Manager of
Minorco (AngloGold) subsidiaries in Argentina, where he was responsible for
the development of the US$270m Cerro Vanguardia gold-silver mine.
Emil Morfett
Non-Executive Director
Emil Morfett, who joined the board in 2007, has over 30 years’ of relevant,
experience, with eight years in the mining industry and twenty years in mining
finance. He graduated with a B.Sc. in geology from the University of London
and worked for Rio Tinto in Saudi Arabia. As a mature student, he completed
an M.Sc. in mineral exploration at Queens University, Ontario, Canada.
He then worked in Johannesburg for Goldfields of South Africa. In 1987,
he moved to London to work as a mining analyst. In 1993 he became the
Global Head of Mining Research at Bank Paribas and left in 1997 to become
Vice President and Head of Mining Research for J P Morgan in London.
In 2001, he founded his own consulting business (Millstone Grit Limited,
of which he is Managing Director), providing both equity and debt focused
mining research and strategic advice. He continues to provide independent,
bespoke research and financial analysis of mining companies and projects
to select hedge funds, merchant banks and mining companies.
James Bunyan
Non-Executive Director
James Bunyan, who joined the board in April 2005, holds an MBA from
Warwick University and a BSc in Biochemistry from Heriot-Watt. He specialises
in corporate development with international business development across a
broad range of industrial and commercial sectors worldwide.
He has proven business skills in strategic business planning, mergers,
acquisitions, disposals, turnarounds and fundraising, with particular
experience in mining. He was for five years a director of Tiberon Minerals Ltd,
which developed the Nui Phao deposit in Vietnam from an exploration
concept to one of the largest tungsten polymetallic deposits in the world.
Nui Phao, together with a bankable feasibility study, was sold to Dragon
Capital for over US$350m. It is now a successful operating mine.
Alan Clegg
Non-executive Director
Alan Clegg is a mining engineer with British and South African citizenship and
is a resident of Turkey. He has over 35 years’ experience gained from working
in mining and minerals projects in more than 160 countries. This has been as
team leader or a member of teams that have completed feasibility studies
and/or constructed over sixty mining and mineral projects with a combined
value in excess of US$8bn over the last twenty years. He was a founder,
Executive Manager and Chief Consulting Engineer of the Mining Engineering
Consulting group within the TWP Holdings Ltd Consulting engineering
consultancy practice, a major provider of engineering design, procurement,
construction management and asset services largely within the mining sector.
The TWP Holdings group was recently acquired and is now part of the Worley
Parsons Group, one of the leading global providers of technical, project and
operational support services to the mining and energy sectors.
He is a registered Professional Mining Engineer (Pr.Eng), a registered
Professional Construction Project Manager (Pr.CPM) and a registered Project
Management Professional (PMP). He has professional Fellowship status with
the South African Institute of Mining & Metallurgy (FSAIMM) and the Institute
of Quarrying (FIOQ), as well as professional memberships of most of the major
mining institutes globally. He is a recognised mining technical assessment,
reporting and mining project valuation expert, with key experience in stock
exchange listings and the requirements for successful capital raising having
sat on the boards of several international and multinational mining,
engineering, mining equipment and construction sector companies.
Corporate Governance
Directors
07Alexander Mining plc Annual Report &?Accounts 2014
The directors present their report and the audited consolidated financial
statements for the year ended 31 December 2014.
Principal activities
The principal activity of the Group is the commercialisation of the Group’s
proprietary mineral processing technologies, either through licensing to third
parties and/or the acquisition of equity stakes in amenable deposits.
Results
The Group made a consolidated net loss for the year of £910,000 (2013:
£1,365,000). The directors do not recommend the payment of a dividend
(2013: nil).
Research and development
The Group, through its wholly owned subsidiary MetaLeach Limited is
involved in the ongoing research and development of its proprietary mineral
processing technologies, AmmLeach
®
and HyperLeach
®
. Further details
thereof are set out in the Strategic Report on pages 01 to 06.
Risk Management and Financial Risks
The successful commercialisation of the Group’s proprietary mineral
processing technologies is subject to a number of risks, both in relation to
third party licensing opportunities and the acquisition of equity interests in
amenable deposits for the Group. In addition, like all businesses, the Group is
exposed to financial risks. The Board adopts a prudent approach to minimise
these risks as far as practicable, consistent with the corporate objectives of
the Group. These risks are summarised below, together with the disclosures
set out in note 18 to the Financial Statements.
Currency exchange risk
The Group reports its financial results in Sterling, while a proportion of the
Group’s costs and revenues are incurred in US Dollars, Australian Dollars, and
New Zealand Dollars. Accordingly, movements in the Sterling exchange rate
with these currencies could have a detrimental effect on the Group’s results
or financial position.
Liquidity risk
The Group has to date relied upon shareholder funding of its activities.
Development of mineral properties, the acquisition of new opportunities,
or the recovery of royalty/licensing income from third party assets, may be
dependent upon the Group’s ability to obtain further financing through joint
ventures, equity or debt financing or other means. Although the Group has
been successful in the past in obtaining equity financing, there can be no
assurance that the Group will be able to obtain adequate financing in the
future or that the terms of such financing will be favourable.
Credit risk
The Group has no material credit risk at the date of this report.
Commodity price risk
The Group’s proprietary leaching technologies have the potential to reduce
costs and enhance margins at the mine site. The level of interest from mining
companies in commercialisation of the Group’s proprietary leaching
technologies may be affected, for better or worse, by future movements
in global metal prices.
Strategic and business risks are described in the Strategic Report
on pages 01 to 06.
Going concern
Based on a review of the Group’s budgets and cash flow forecasts,
the directors have identified that if current and near-term corporate
development opportunities are unsuccessful in providing adequate funding
then the Company will need to raise finance within the next twelve months
in order to continue its operations and to meet its commitments.
In common with many mining, exploration and intellectual property
development companies, the Company needs to raise finance for its activities
in discrete tranches to finance its activities for limited periods. The Directors
are confident that the Company currently has a range of corporate
development opportunities, which could include significant funding outcomes
and moreover that, if necessary, any further funding can be raised as and
when required. (Accordingly, attention is drawn to Note 24, Post Balance
Sheet events, where details of potential significant business development
funding opportunities are provided). On this basis, the Directors have
concluded that it is appropriate to draw up the financial statements on the
going concern basis. However, there can be no certainty that either
development opportunities or alternative funding will be secured in the
necessary timescales. This indicates the existence of a material uncertainty
that may cast significant doubt on the ability of the company and the group
to continue as a going concern and therefore, that it may be unable to realise
its assets and discharge its liabilities in the normal course of business.
The financial statements do not include the adjustments that would result
if the Company and Group were unable to continue as a going concern.
Directors
The directors of the Company who held office during the year and their
beneficial interests in the shares of the Company at the year-end were
as follows:
SharesShares
held atheld at
31 December31 December
20142013
NumberNumber
M L Sutcliffe - Executive Chairman10,906,00010,906,000
M L Rosser - Chief Executive Officer925,000925,000
J S Bunyan - Non-Executive Deputy Chairman--
A M Clegg - Non-Executive--
R O Davey - Non-Executive--
E M Morfett - Non-Executive450,000450,000
12,281,00012,281,000
In accordance with the Company’s Articles of Association, Mr M L Rosser
and Mr R O Davey will retire by rotation at the Annual General Meeting. Being
eligible, Mr Rosser will offer himself for re-election. Mr Davey has indicated
that he will not stand for re-election. Other than their service contracts,
no director of the Holding Company has a material interest in a contract with
the Company. Details of directors’ remuneration are set out in note 6 to the
financial statements.
During the year, directors’ and officers’ liability insurance was maintained
for directors and other officers of the Group as permitted by the Companies
Act 2006.
Indemnity granted to Directors and officers by
Company’s Articles of Association
Subject to the provisions of Companies Act 1985 (also applicable under
Companies Act 2006) but without prejudice to any indemnity to which a
Director may otherwise be entitled, every Director or other officer of the
Company (other than any person (whether or not an officer of the Company)
engaged by the Company as auditor) shall be indemnified out of the assets
of the Company against any liability incurred by him for negligence, default,
breach of duty or breach of trust in relation to the affairs of the Company,
provided that this Article shall be deemed not to provide for, or entitle any
such person to, indemnification to the extent that it would cause this Article,
or any element of it, to be treated as void under Companies Act 2006.
Corporate Governance
Directors’ Report
08Alexander Mining plc Annual Report &?Accounts 2014
The directors’ interests in share options are as follows:
Executive Directors hold options to subscribe for ordinary shares in the Company as follows:
At 31 December 2014At 31 December 2013
Price Exercise period M L Sutcliffe M L RosserM L Sutcliffe M L Rosser
4.92p 01/06/13 - 22/12/201,500,000 2,700,0001,500,000 2,700,000
Total 1,500,000 2,700,0001,500,000 2,700,000
Non-executive Directors hold options to subscribe for ordinary shares in the Company as follows:
At 31 December 2014At 31 December 2013
Price Exercise period J S Bunyan A M Clegg R O Davey E M MorfettJ S Bunyan A M Clegg R O Davey E M Morfett
4.92p 01/06/13 - 22/12/20800,000 800,000 800,000 800,000800,000 800,000 800,000 800,000
Total 800,000 800,000 800,000 800,000800,000 800,000 800,000 800,000
At 31 December 2014At 31 December 2013
All directorsAll directors
Total - all directors7,400,0007,400,000
Details of the Company’s substantial shareholders are set out on the
Company’s website at www.alexandermining.com.
Share capital and share options
Details of the share capital of the Company at 31 December 2014 are set out
in note 15 to the financial statements. Details of the share options outstanding
at 31 December 2014 are set out in note 20 to the financial statements.
Post Balance Sheet Events
Details of post balance sheet events are set out in note 24 to the
financial statements.
Stock Exchange
The Company’s shares are quoted on the AIM market of the London Stock
Exchange (symbol AXM).
Annual General Meeting
The Notice convening the Company’s Annual General Meeting, to be held
on 13 May 2015, is set out in pages 29 to 30 of this report. Full details of
the resolutions proposed at that meeting may be found in the Notice.
Provision of information to auditor
In the case of each of the directors who are directors of the Company
at the date when this report is approved:
• So far as they are individually aware, there is no relevant audit information
of which the Company’s auditor is unaware; and
• Each of the directors has taken all the steps that they ought to have
taken as a director to make themself aware of any relevant audit
information and to establish that the Company’s auditor is aware
of the information.
Auditor
A resolution to re-appoint BDO LLP as auditor of the company will be
put to the Annual General Meeting.
Statement of directors’ responsibilities
The directors are responsible for preparing the strategic report, the directors’
report and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have elected to prepare the Group
and Company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. Under
company law the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs of the
Group and Company and of the profit or loss of the Group for that period.
The directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies trading securities
on the Alternative Investment Market.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
• state whether they have been prepared in accordance with IFRSs as
adopted by the European Union, subject to any material departures
disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the company’s transactions and disclose
with reasonable accuracy at any time the financial position of the company
and enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are
published on the Company’s website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s website is the responsibility
of the directors. The directors’ responsibility also extends to the ongoing
integrity of the financial statements contained therein.
By Order of the Board
Terence Cross
Company Secretary
10 April 2015
Corporate Governance
Directors’ Report
continued
09Alexander Mining plc Annual Report &?Accounts 2014
We have audited the financial statements of Alexander Mining plc for the
year ended 31 December 2014 which comprise the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated and company balance sheets, the group and company
statement of cash flows, the consolidated and company statements of
changes in equity 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
and, as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
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 the
group’s and the parent company’s affairs as at 31 December 2014
and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006;
and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Emphasis of matter - going concern
In forming our opinion, which is not modified, we have considered the
adequacy of the disclosures made in note 2(a) to the financial statements
concerning near-term corporate developments and the possibility that the
company may need to raise further finance within the next twelve months in
order to continue its operations and to meet its commitments. If the company is
unable to secure such additional funding, this may have a consequential impact
on the company’s and the group’s ability to continue as a going concern.
The outcome of any corporate developments or fundraising cannot presently
be determined. These conditions, along with the other matters explained in
note 2(a) to the financial statements, indicate the existence of a material
uncertainty which may cast significant doubt about the Company’s and the
Groups’ ability to continue as a going concern. The financial statements do
not include the adjustments that would result if the Company and Group was
unable to continue as a going concern.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion 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.
Matters on which we are required to report by exception
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 by the parent company,
or returns adequate for our audit have not been received from branches
not visited by us; or
• the parent company 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.
Jason Homewood (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
10 April 2015
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Corporate Governance
Independent auditor’s report
to the members of Alexander Mining plc
10Alexander Mining plc Annual Report &?Accounts 2014
Consolidated statement of comprehensive income
For the year ended 31 December 2014
2014 2013
notes £’000 £’000
Continuing operations
Revenue 4 507 26
Cost of sales - -
Gross profit 507 26
Administrative expenses (989) (1,010)
Research and development expenses (367) (390)
Profit on disposal of property, plant and equipment - 4
Operating loss 4 (849) (1,370)
Finance income 7 1 5
Loss before taxation (848) (1,365)
Income tax expense 8 - -
Loss for the year from continuing operations (848) (1,365)
Loss for the year from discontinued operations 12 (62) -
Loss for the year (910) (1,365)
Basic and diluted loss per share (pence):
from continuing operations 9 (0.48)p (0.84)p
from continuing and discontinued operations 9 (0.52)p (0.84)p
from discontinued operations 9 (0.04)p -
All components of profit or loss for the year are attributable to equity holders of the parent.
2014 2013
£’000 £’0 N00
Loss for the year (910) (1,365)
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Exchange differences on translating foreign operations - (1)
Exchange differences realised on disposal of subsidiary 61 -
Total comprehensive loss for the year attributable to equity holders of the parent (849) (1,366)
Financial Statements
Consolidated income statement
For the year ended 31 December 2014
11Alexander Mining plc Annual Report &?Accounts 2014
2014 2013
notes £’000 £’000
Assets
Property, plant and equipment 10 - -
Total non-current assets - -
Trade and other receivables 13 67 60
Cash and cash equivalents 14 116 398
Total current assets 183 458
Total assets 183 458
Equity attributable to owners of the parent
Issued share capital 15 13,639 13,633
Share premium 15 13,298 13,020
Translation reserve - (61)
Accumulated losses (27,211) (26,423)
Total equity (274) 169
Liabilities
Current liabilities
Trade and other payables 16 439 289
Provisions 17 18 -
Total current liabilities 457 289
Total liabilities 457 289
Total equity and liabilities 183 458
These financial statements were approved by the Board of Directors and authorised for issue on
10 April 2015 and were signed on their behalf by:
M L Rosser
Director
Financial Statements
Consolidated balance sheet
As at 31 December 2014
12Alexander Mining plc Annual Report &?Accounts 2014
2014 2013
notes £’000 £’000
Assets
Property, plant and equipment 10 - -
Total non-current assets - -
Trade and other receivables 13 67 61
Cash and cash equivalents 14 116 396
Total current assets 183 457
Total assets 183 457
Equity attributable to owners of the parent
Issued share capital 15 13,639 13,633
Share premium 15 13,298 13,020
Accumulated losses (26,955) (26,309)
Total equity (18) 344
Liabilities
Trade and other payables 16 183 113
Provisions 17 18 -
Total current liabilities 201 113
Total liabilities 201 113
Total equity and liabilities 183 457
These financial statements were approved by the Board of Directors and authorised for issue on
10 April 2015 and were signed on their behalf by:
M L Rosser
Director
Financial Statements
Company balance sheet
Company number 5357433 in England and Wales
As at 31 December 2014
13Alexander Mining plc Annual Report &?Accounts 2014
Group Company
2014 2013 2014 2013
notes £’000 £’000 £’000 £’000
Cash flows from operating activities
Operating loss – continuing operations (849) (1,370) (304) (776)
Operating loss – discontinued operations (1) - - -
Depreciation and amortisation charge - 8 - 8
Decrease / (Increase) in trade and other receivables (7) 7 (6) (8)
Increase in trade and other payables 150 95 70 1
Increase in provisions 18 - 18 -
Shares issued in payment of expenses 52 69 52 69
Share option charge 21 21 21 21
Profit on disposal of property, plant and equipment - (4) - (4)
Inter-company recharges - - (10) (10)
Net cash outflow from operating activities (616) (1,174) (159) (699)
Cash flows from investing activities
Amounts remitted to subsidiary companies - - (457) (466)
Interest received 1 1 1 1
Proceeds from sale of subsidiary - 101 - 101
Proceeds from sale of property, plant and equipment - 12 - 12
Net cash inflow/(outflow) from investing activities 1 114 (456) (352)
Cash flows from financing activities
Proceeds from the issue of share capital 232 935 232 935
Proceeds from lapsed share issue, net of costs 62 - 62 -
Proceeds from issue of share options 39 - 39 -
Net cash inflow from financing activities 333 935 333 935
Net decrease in cash and cash equivalents (282) (125) (282) (116)
Cash and cash equivalents at beginning of year 398 519 396 518
Exchange differences - 4 2 (6)
Cash and cash equivalents at end of year 14 116 398 116 396
Financial Statements
Statements of cash flows
For the year ended 31 December 2014
14Alexander Mining plc Annual Report &?Accounts 2014
Share Share Shares to Translation Accumulated Total
capital premium be issued reserve losses equity
£’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2013 13,606 12,043 - (60) (25,079) 510
Accumulated loss for year - - - - (1,365) (1,365)
Translation difference - - - (1) - (1)
Total comprehensive loss for the year attributable
to equity holders of the parent - - - (1) (1,365) (1,366)
Share option costs - - - - 21 21
Shares issued 27 977 - - - 1,004
At 31 December 2013 13,633 13,020 - (61) (26,423) 169
Accumulated loss for year - - - - (910) (910)
Realisation of foreign exchange losses upon sale of subsidiary - - - 61 - 61
Total comprehensive loss for the year attributable
to equity holders of the parent - - - 61 (910) (849)
Share option costs - - - - 21 21
Share issue subscription (note 15) - - 100 - - 100
Costs of share issue subscription - - (38) - - (38)
Share issue lapsed - - (62) - 62 -
Share option issued (note 20) - - - - 39 39
Shares issued 6 278 - - - 284
At 31 December 2014 13,639 13,298 - - (27,211) (274)
Share Share Share to Accumulated Total
capital premium be issued losses equity
£’000 £’000 £’000 £’000 £’000
At 1 January 2013 13,606 12,043 - (25,073) 576
Accumulated loss for year - - - (1,257) ( 1,257)
Total comprehensive loss for the year attributable to equity holders of the parent - - - (1,257) (1,257)
Share option costs - - - 21 21
Shares issued 27 977 - - 1,004
At 31 December 2013 13,633 13,020 - (26,309) 344
Accumulated loss for year - - - (768) (768)
Total comprehensive loss for the year attributable to equity holders of the parent - - - (768) (768)
Share option costs - - - 21 21
Share issue subscription (note 15) - - 100 - 100
Costs of share issue subscription - - (38) - (38)
Share issue lapsed - - (62) 62 -
Share option issued (note 20) - - - 39 39
Shares issued 6 278 - - 284
At 31 December 2014 13,639 13,298 - (26,955) (18)
Financial Statements
Consolidated statement of changes in equity
For the year ended 31 December 2014
15Alexander Mining plc Annual Report &?Accounts 2014
Company statement of changes in equity
For the year ended 31 December 2014
1 General Information
Alexander Mining plc (the “Company”) is a public limited company incorporated and domiciled in England and its shares are traded on the AIM Market
of the London Stock Exchange. Alexander Mining plc is a holding company of a group of companies (the “Group”), the principal activities of which are the
commercialisation of the Group’s proprietary mineral processing technologies, either through licensing to third parties and/or the acquisition of equity stakes
in amenable deposits.
These consolidated financial statements were approved for issue by the Board of Directors on 10 April 2015.
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 applied consistently
to all the years presented, unless otherwise stated.
a) Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) in force at the reporting date and their
interpretations issued by the International Accounting Standards Board (“IASB”) as adopted for use within the European Union.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or areas where
assumptions or estimates are significant to the financial statements, are disclosed in note 2(o).
A separate income statement for the parent company has not been presented, as permitted by section 408 of the Companies Act 2006.
The financial statements are prepared in accordance with IFRS and interpretations in force at the reporting date. The Company has not adopted any standards
or interpretations in advance of the required implementation dates.
Going Concern
Based on a review of the Group’s budgets and cash flow forecasts, the directors have identified that if current and near-term corporate development
opportunities are unsuccessful in providing adequate funding then the Company will need to raise finance within the next twelve months in order to continue
its operations and to meet its commitments.
In common with many mining, exploration and intellectual property development companies, the Company needs to raise finance for its activities in discrete
tranches to finance its activities for limited periods. The Directors are confident that the Company currently has a range of corporate development opportunities,
which could include significant funding outcomes and moreover that, if necessary, any further funding can be raised as and when required. (Accordingly,
attention is drawn to Note 24, Post Balance Sheet events, where details of potential significant business development funding opportunities are provided).
On this basis, the Directors have concluded that it is appropriate to draw up the financial statements on the going concern basis. However, there can be no
certainty that either development opportunities or alternative funding will be secured in the necessary timescales. This indicates the existence of a material
uncertainty that may cast significant doubt on the ability of the company and the group to continue as a going concern and therefore, that it may be unable to
realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the
Company and Group were unable to continue as a going concern.
Standards, Amendments and Interpretations issued but not yet effective
No Standards and Interpretations that have been issued but are not yet effective, and that are available for early application, have been applied by the Group
in these financial statements. There are no Standards or Interpretations issued, but not yet effective, which are expected to have a material effect on the financial
statements in the future.
b) Basis of consolidation
i) Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries)
made up to 31 December each year. Control is recognised where the Company has the power to direct relevant activities, exposure to variable returns
and a right to use the power to affect those returns.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies into line with those used by the Group.
ii) Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the
consolidated financial statements.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
16Alexander Mining plc Annual Report &?Accounts 2014
c) Foreign currency
The Company’s functional and presentational currency is Sterling rounded to the nearest thousand and is the currency of the primary economic environment
in which the Company operates.
i) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated to Sterling at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income statement.
ii) Financial statements of foreign operations
On consolidation, the assets and liabilities of the Group’s overseas operations that do not have a Sterling functional currency are translated at exchange
rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rate for the year. Exchange differences
arising are recognised in other comprehensive income through the Group’s translation reserve. Such translation differences are recognised in the
income statement in the year in which the operation is disposed of.
iii) Net investment in foreign operations
Exchange differences arising from the translation of the net investment in foreign operations are recognised in other comprehensive income through
the Group’s translation reserve. They are released into the income statement upon disposal of the foreign operation.
d) Property, plant and equipment
i) Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see note 2e) below).
ii) Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost
is incurred if it is probable that the future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other costs are recognised in the income statement as an expense as incurred.
iii) Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each item of property, plant and equipment.
The estimated useful lives of all other categories of assets are three years.
The residual value is assessed annually. Gains and losses on disposal are determined by comparing proceeds with carrying amount and are included
in the income statement.
e) Impairment
i) Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable the asset is reviewed for
impairment. An asset’s carrying value is written down to its estimated recoverable amount (being the higher of the fair value less costs to sell and
value in use) if that is less than the asset’s carrying amount.
ii) Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of
its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised in the income
statement for the year.
f) Financial instruments
i) Investments
Investments in subsidiary undertakings are stated at cost less provision for impairment.
ii) Trade and other receivables
Trade and other receivables are not interest bearing and are stated at amortised cost.
iii) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original
maturities of three months or less.
iv) Trade and other payables
Trade and other payables are not interest bearing and are stated at amortised cost.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
17Alexander Mining plc Annual Report &?Accounts 2014
g) Share based payment transactions
Directors, senior executives and consultants of the Group have been granted options to subscribe for ordinary shares. All options are equity settled. The fair
value of services received in return for share options granted is measured by reference to the fair value of the share options granted, at date of grant, and is
expensed to the income statement on a straight line basis over the estimated vesting period. This estimate is determined using an appropriate valuation model
considering the effects of the vesting conditions and the expected exercise period.
Shares issued in settlement of expenses are recognised at the fair value of the services received.
All Share Option costs incurred are charged directly to Accumulated Losses.
h) Operating lease payments
Payments made under operating leases are recognised on a straight-line basis over the term of the lease.
i) Share capital
The Company’s ordinary shares are classified as equity.
j) Provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources
will be required to settle the obligation and the amount can be reliably estimated.
k) Revenue
Revenue comprises the fair value of the consideration received or receivable for the provision of services to or from external customers (net of value-added tax
and other sales taxes).
Sale of testwork services
The group sells services to other mining companies. These services are generally provided on fixed-price contracts, with contract terms usually less than one
year. Revenue is recognised under the percentage-of-completion method, based on the services performed to date as a percentage of the total services to be
performed.
Royalty income
Royalty income is recognised on an accruals basis in accordance with the substance of the relevant agreements.
l) Research and development costs
Research costs are recognised in the income statement as an expense as incurred. Development costs are recognised in the income statement as an expense
as incurred unless the development project meets specific criteria for deferral and amortisation. No development costs have been deferred to date because
there is insufficient information at the balance sheet date to quantify the expected future economic benefits from the proprietary leaching technologies.
m) Taxation
The charge for taxation is based on the profit or loss for the year and takes into account deferred tax. Deferred tax is the tax expected to be payable or
recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit or loss, and is accounted for using the balance sheet method.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available in the foreseeable future against which
the temporary differences can be utilised.
n) Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker.
The Chief Operating Decision Maker, responsible for allocating resources and assessing performance of the operating segments, has been identified as
the Board of Directors.
o) Critical accounting estimates and judgements
The preparation of financial statements under the principles of IFRS requires management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Information about such judgements and estimates is contained in the accounting policies and/or the notes to the financial statements and the key areas are
summarised below. The only area of judgement that has a significant effect on the amounts recognised in the financial statements is:
• Estimation of share based payment costs – notes 2(g) and 20.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
18Alexander Mining plc Annual Report &?Accounts 2014
3 Segmental information
The following information is given about the Group’s reportable segments:
The Chief Operating Decision Maker is the Board of Directors. The Board reviews the Group’s internal reporting in order to assess performance of the Group.
Management has determined the operating segment based on the reports reviewed by the Board.
The Board considers that there is only one operating segment. This incorporates similar activities and services, namely Head Office, including the development
and management of intellectual property rights. The results and assets of Peruvian operations, prior to their disposal, were deemed to be immaterial and were
therefore included within the single segment. The analysis has been prepared on the basis that prevailed and was reported to the Board until 31 December 2014.
As the group is in the early stages of developing and licensing a new product, the Board assesses the performance of the business based on the segment’s
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), and overall loss before tax.
The Head Office and Intellectual Property segment recognises all costs and revenues. This segment is not further sub-divided to different geographical regions
due to its knowledge and services being offered to a broad geographical spread of clients, often indirectly through multinational groups.
As the Company has only a single activity and there is also only one geographical segment, the disclosures for this segment have already been given in
these financial statements.
4 Operating loss
Operating loss is stated after charging/(crediting):
2014 2013
£’000 £’000
Depreciation - 8
Exchange (gain)/loss on foreign currency - (4)
Operating lease expense 46 41
Share option charge (note 20) 21 21
Shares issued in payment of expenses (note 15) 56 69
Research and development expenses 367 390
Revenue is comprised of:
2014 2013
£’000 £’000
Sales of services to third parties 29 26
Inducement fee received (see below) 300 -
Standstill fee received from unnamed ‘mid-tier mining company’ 178 -
507 26
The inducement fee of £300,000 was a non-refundable payment received from Ebullio Commodities Limited in consideration for entering into a series of
agreements with them. Those agreements subsequently lapsed.
A fee of £217,000 was received from an unnamed ‘mid-tier mining company’ in contemplation of a further series of agreements. The £217,000 was allocated
as to a non-refundable standstill fee of £178,000 in respect of a period of exclusivity granted for the period during which it considered entering into the further
agreements, while £39,000 was allocated in respect of the related option to subscribe to the Company’s shares. (See also Chairman’s Statement and review
of the year for details of the option agreement and note 20 for details of the related option payment of £39,000 received in conjunction with the standstill fee).
5 Auditor’s remuneration
2014 2013
£’000 £’000
Fees payable to the Company’s auditor for the audit of parent company and consolidated financial statements 19 20
Tax compliance services 3 6
22 26
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
19Alexander Mining plc Annual Report &?Accounts 2014
6 Staff costs and directors’ emoluments
Directors’ remuneration is set out below:
Other
Annual salary Fees benefits Total
£’000 £’000 £’000 £’000
2014
M L Sutcliffe 191 - 3 194
M L Rosser 128 - 2 130
J S Bunyan - 40 - 40
A M Clegg - 25 - 25
R O Davey - 25 - 25
E M Morfett - 25 - 25
319 115 5 439
2013
M L Sutcliffe 197 - 4 201
M L Rosser 128 - 2 130
J S Bunyan - 40 - 40
A M Clegg - 21 - 21
R O Davey - 25 - 25
E M Morfett - 25 - 25
325 111 6 442
The directors’ fees detailed above include amounts that remain unpaid and deferred or subordinated in favour of third party creditors (refer to notes 16 and 23).
The aggregate staff costs for the year were as follows:
2014 2013
£’000 £’000
Directors’ remuneration 324 331
Other staff wages and salaries 196 211
Social security costs 28 28
Share based payments 21 21
569 591
On average, excluding non-executive directors, the group employed 3 technical staff members (2013: 3) and 2 administration staff (2013: 2).
7 Finance income
2014 2013
£’000 £’000
Interest on short term bank deposits 1 1
Exchange differences on foreign currency - 4
1 5
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
20Alexander Mining plc Annual Report &?Accounts 2014
8 Income taxes
No liability to income taxes arises in the year.
The current tax charge for the year differs from the credit resulting from the loss before tax at the standard rate of corporation tax in the UK.
The differences are explained below:
2014 2013
£’000 £’000
Loss before tax (848) (1,364)
Current tax at 21.5% (2013: 23.25%) (182) (317)
Effects of:
Expenses not deductible for tax purposes 147 195
Qualifying depreciation in excess of capital allowances on which no deferred tax has been provided (1) (6)
Unrelieved tax losses arising in the year 36 128
Income tax expense - -
Unrecognised deferred tax assets
2014 2013
£’000 £’000
Cumulative tax losses 1,375 1,384
Unrelieved exploration expenditure arising in overseas subsidiaries - 149
Accelerated capital allowances 5 -
Unrecognised deferred tax asset at end of year 1,380 1,533
Deferred tax assets carried forward have not been recognised in the accounts because there is currently insufficient evidence of the timing of suitable future
taxable profits against which they can be recovered.
9 Loss per share
The calculation of loss per share is based on the weighted average number of shares in issue in the year to 31 December 2014 of 175,087,554
(31 December 2013: 162,053,428) and computed on the respective profit and loss figures as follows:
2014 2013
£’000 Per share £’000 Per share
Loss - continuing operations (848) (0.48)p (1,365) (0.84)p
Loss - discontinued operations (62) (0.04)p - -
Loss - continuing and discontinued operations (910) (0.52)p (1,365) (0.84)p
There is no difference between the diluted loss per share and the basic loss per share presented. Share options granted to employees could potentially
dilute basic earnings per share in the future, but were not included in the calculation of diluted earnings per share as they are anti-dilutive for the year presented.
See note 20 for further details.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
21Alexander Mining plc Annual Report &?Accounts 2014
10 Property, plant and equipment
Company and Group
Office
equipment Leasehold Motor
and furniture improvements vehicles Total
£’000 £’000 £’000 £’000
Cost
As at 1 January 2013 37 35 35 107
Disposals - - (35) (35)
As at 31 December 2013 37 35 - 72
As at 31 December 2014 37 35 - 72
Depreciation
As at 1 January 2013 (36) (35) (20) (91)
Charged in year (1) - (7) (8)
Disposals - - 27 27
As at 31 December 2013 (37) (35) - (72)
As at 31 December 2014 (37) (35) - (72)
Net book value
As at 31 December 2014 - - - -
As at 31 December 2013 - - - -
As at 1 January 2013 1 - 15 16
11 Investments
Group Company
2014 2013 2014 2013
£’000 £’000 £’000 £’000
Subsidiary undertakings (a) - - - -
(a) Company subsidiary undertakings
As at 31 December 2014, the Group owned interests in the following subsidiary undertakings, which are included in the consolidated financial statements:
Name Holding Business Activity Country of Incorporation
MetaLeach Limited 100% Leaching technology development British Virgin Islands
Molinetes (BVI) Limited 100% Dormant British Virgin Islands
Alexander Mining Katanga s.p.r.l. 100% Dormant Democratic Republic of Congo
12 Disposal of subsidiary – Discontinued operation
On 10 September 2014, the Company’s subsidiary, Molinetes (BVI) Limited, completed the sale of its entire interest in its subsidiary,
Compania Minera Molinetes SAC for the nominal sum of Peruvian Nuevos Soles 100 (approximately £21). The value of net assets disposed was nil.
The net loss for the year attributed to the discontinued business comprised as follows:
2014 2013
£’000 £’000
Administrative expenses (1) -
Realisation of translation reserve transferred to income statement on disposal of the subsidiary (IAS21) (61) -
Loss for the year on discontinued operations (62) (9)
Other comprehensive income relating to the discontinued and disposed of subsidiary
The cumulative amount transferred to translation reserve in respect of the disposed subsidiary amounted to a debit of £61,000 at 31 December 2013.
This translation reserve was realised by its transfer to the Income Statement on disposal of the subsidiary during the year ended 31 December 2014.
13 Trade and other receivables
Group Company
2014 2013 2014 2013
£’000 £’000 £’000 £’000
Current assets
Other receivables 25 24 25 24
Other taxes and social security 2 3 2 3
Prepayments and accrued income 40 33 40 34
67 60 67 61
Amounts due to the Company from its subsidiary companies have been fully provided for as detailed in note 23.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
22Alexander Mining plc Annual Report &?Accounts 2014
14 Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits and short term deposits. Cash and cash equivalents included in the cash flow statement
comprise the following balance sheet amounts:
Group Company
2014 2013 2014 2013
£’000 £’000 £’000 £’000
Cash on hand and demand deposits 116 398 116 396
15 Share capital
2014 2013
Issued and fully paid ordinary shares with a nominal value of 0.1p (2013 0.1p)
Number of shares 176,319,379 170,496,861
Nominal value (£) 176,319 170,497
Issued and fully paid deferred shares with a nominal value of 9.9p
Number of shares 135,986,542 135,986,542
Nominal value (£) 13,462,667 13,462,667
Total nominal value (£) 13,638,986 13,633,164
Details of share options issued during the year and outstanding at 31 December 2014 are set out in note 20.
Changes in issued Share Capital and Share Premium:
For the year ended 31 December 2014
Number of Share Share
Ordinary shares shares capital premium Total
£’000 £’000 £’000
Balance at 1 January 2014 170,496,861 170 13,020 13,190
Shares issued for cash at 5.25p each, on 19 February 4,604,762 5 237 242
Share issue costs charged to share premium, on 19 February - - (14) (14)
Shares issued at average of 5.16p each - in settlement of expenses, on 19 February 487,387 - 25 25
Shares issued at 3.375p each - in settlement of expenses, on 24 September 311,111 - 10 10
Shares issued at 5.068p each - in settlement of expenses, on 24 September 419,258 1 20 21
Balance at 31 December 2014 176,319,379 176 13,298 13,474
Deferred
Number of share
Deferred shares shares capital
£’000
Balance at 1 January 2014 and 31 December 2014 135,986,542 13,463
Lapsed share issue
During February 2014 the Company received a non-refundable payment of £100,000 on account of the proposed issue of shares to Ebullio Commodities
Limited. That agreement subsequently lapsed. After deduction of the Company’s legal costs of £38,000 related to the proposed issue, the balance of £62,000
was transferred directly to accumulated losses (see statements of changes in equity on page 15 of this report).
Capital and reserves
The Consolidated and Company statements of changes in equity are set out on page 15 of this report.
• The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations that do not
have a Sterling functional currency. The prior year reserve balance of £61,000 related entirely to the operations of Compania Minera Molinetes SAC and
was transferred to the Income Statement upon the sale of that subsidiary on 10 September 2014 (see note 12).
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
23Alexander Mining plc Annual Report &?Accounts 2014
16 Trade and other payables
Group Company
2014 2013 2014 2013
£’000 £’000 £’000 £’000
Trade payables 46 31 46 31
Other taxes and social security 2 5 2 5
Accruals and deferred income 391 253 135 77
439 289 183 113
Accruals and deferred income included £331,000 (2013: £206,000) owed to directors of the Company (see note 23) and £11,582 (2013: £nil) owed to senior
staff members, in respect of directors’ fees or remuneration. In terms of subordination agreements signed during August 2014 between the Company and the
individuals concerned, these and similarly remaining future balances may not be claimed for payment at any time when the Group’s third party creditor liabilities
exceed its cash or liquid assets.
Fee deferral agreements signed between the Company and the directors on 1 January 2015 deferred amounts owed to directors, totalling £314,000,
which may not be claimed for payment before 1 July 2016.
17 Provisions
Office dilapidation and redecoration
The office redecoration provision represents the directors’ estimate of the costs expected to be incurred by the Company in removing its additions and
improvements and redecorating the Company’s office premises prior to the end of the office lease in June 2015.
Group Company
2014 2013 2014 2013
£’000 £’000 £’000 £’000
Office redecoration provision 18 - 18 -
18 Financial risk management
The Group’s and Company’s principal financial assets comprise cash and cash equivalents and other receivables. In addition, the Company’s financial assets
include amounts due from subsidiaries. The Group’s and Company’s financial liabilities comprise: trade payables; other payables; and accrued expenses.
All of the Group’s and Company’s financial liabilities are measured at amortised cost. The Group’s and Company’s financial assets are classified as loans and
receivables.
The Board of Directors determines, as required, the degree to which it is appropriate to use financial instruments, commodity contracts or other hedging
contracts or techniques to mitigate financial risks. The main risks for which such instruments may be appropriate are interest rate risk, liquidity risk and foreign
currency risk, each of which is discussed below. All non-routine transactions require Board approval. During 2014 the Group has not used derivative financial
instruments.
The Board consider that the risk components detailed below apply to both the Group and Company. Financial risks are managed at Group rather than
Company level.
Credit risk
Credit risk refers to the risk that the Group’s financial assets will be impaired by the default of a third party. The Group is exposed to credit risk on its cash and
cash equivalents as set out in note 14, with additional risk attached to other receivables set out in note 13. Credit risk is managed by ensuring that surplus funds
are deposited only with well-established financial institutions of high quality credit standing.
At 31 December 2014 the Group had no significant trade receivables. The Group’s focus on commercialising its technologies may result in significant trade
receivables during 2015, the credit risk on which will be managed by assessing the credit quality of each customer, taking into account its financial position
and any other relevant factors. The Company is exposed to credit risk through receivable balances from Group companies. See Note 23 for further detail.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
24Alexander Mining plc Annual Report &?Accounts 2014
Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial commitment, recognised asset or liability will fluctuate due to changes in foreign currency
rates. The Group reports its financial results in Sterling and is therefore exposed to foreign currency risk as a result of financial assets, future transactions and
investments in foreign companies denominated in currencies other than Sterling.
Exchange gains and losses on financial assets or future transactions are recognised directly in the income statement. A proportion of the Group’s costs are
incurred in US Dollars, Australian Dollars and New Zealand Dollars. Accordingly, movements in the Sterling exchange rate against these currencies could have
a detrimental effect on the Group’s results and financial condition. Such changes are not considered likely to have a material effect on the Group’s financial
position at 31 December 2014.
Foreign exchange risk is managed by maintaining some cash deposits in currencies other than Sterling. The table below shows the currency profiles of cash
and cash equivalents:
2014 2013
£’000 £’000
Sterling 54 162
US Dollars 58 233
Australian Dollars 4 3
116 398
The table below shows an analysis of net monetary assets and liabilities by the Sterling functional currency of the Group:
2014 2013
£’000 £’000
Balances denominated in
Sterling (71) 100
US Dollars 58 232
Australian Dollars (31) (26)
New Zealand Dollars (241) (169)
(285) 137
Commodity price risk
Commodity price risk is the risk that the Group’s future earnings will be adversely impacted by changes in the market prices of commodities.
The Group is exposed to commodity price risk as its future revenues may be determined by reference to market prices of metals.
In addition to any new projects acquired by the Group, future revenue streams may include royalties from the development of third party assets.
The Group’s revenue from such royalty streams will be dependent on future commodity prices, both in terms of the absolute value of the royalty and
the commodity price required for the successful economic development of such assets.
Liquidity risk
Liquidity risk relates to the ability of the Group to meet future obligations and financial liabilities. The Group monitors its risk to a shortage of funds using
cash flow models, which consider existing financial assets, liabilities and projected cash inflows and outflows from operations.
The table below sets out the maturity profile of financial liabilities at 31 December.
Group Company
2014 2013 2014 2013
£’000 £’000 £’000 £’000
Due in less than one month 415 53 159 47
Due between one and three months 6 44 6 44
Due between three months and one year 18 192 18 22
439 289 183 113
31 December 2014 balances due in less than one month, include amounts owed to directors. Fee deferral agreements signed between the Company and the
directors on 1 January 2015 deferred amounts owed to directors, totalling £314,000, which may not be claimed for payment before 1 July 2016.
To date the Group has relied upon shareholder funding of its activities. Development of intellectual property, the acquisition of new opportunities, or the recovery
of royalty income from third party assets, may be dependent upon the Group’s ability to obtain further financing through joint ventures, equity or debt financing,
corporate developments or other means. Although the Group has been successful in the past in obtaining equity financing there can be no assurance that the
Group will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.
Based on a review of the Group’s budgets and cash flow forecasts, the directors have identified that if current and near-term corporate development
opportunities are unsuccessful in providing adequate funding then the Company will need to raise finance within the next twelve months in order to continue
its operations and to meet its commitments.
In common with many mining, exploration and intellectual property development companies, the Company needs to raise finance for its activities in discrete
tranches to finance its activities for limited periods. The Directors are confident that the Company currently has a range of corporate development opportunities
which could include significant funding outcomes and moreover that, if necessary, any further funding can be raised as and when required.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
25Alexander Mining plc Annual Report &?Accounts 2014
Interest rate risk profile of financial assets
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest
rates. Interest rate risk arises from interest bearing financial assets and liabilities that the Group uses. Interest bearing assets comprise cash and cash
equivalents. It is the Group’s policy to settle trade payables within the credit terms allowed and the Group does not therefore incur interest on overdue balances.
At 31 December 2014 and 2013 the Group had short term deposits which attracted interest as follows:
2014 2013
Interest Interest rate Interest Interest rate
£’000 £’000
Sterling deposits 1 0.2% 1 0.50%
Australian dollar deposits 0 0.75% 0 0%
The value of the Group’s assets at 31 December 2014 and 2013 and the result for the year would not be materially affected by changes in interest rates.
Fair values of financial assets and liabilities
It is the directors’ opinion that the carrying values of the Group’s and the Company’s financial assets and liabilities as at 31 December 2014 and 31 December
2013 are not materially different from their fair values. They have therefore not been shown separately.
19 Capital management
The Group’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern, and develop its activities to provide returns
for shareholders and benefits for other stakeholders.
The Group’s capital structure comprises all components of equity (i.e. ordinary share capital, share premium, retained earnings and other reserves).
At 31 December 2014 the Group had no debt. When considering the future capital requirements of the Group and the potential to fund specific project
development via debt the directors consider the risk characteristics of all of the underlying assets in assessing the optimal capital structure.
20 Share based payments and share options
(i) Executive Share Option Plan
The Group operates an Executive Share Option Plan, under which directors, senior executives and consultants have been granted options to subscribe for
ordinary shares. All options are share settled.
The fair value of services received in return for share options granted is measured by reference to the fair value of the share options granted. This estimate
is based on a Black-Scholes model which is considered most appropriate considering the effects of the vesting conditions, expected exercise period and
the payment of dividends by the Company.
The following inputs were used in the calculation of the fair value of the share options re-issued or awarded during the period:
Date of Grant 12 May 2014
Fair value (p)
1
1.5p
Share price (p) 3.875p
Exercise price (p) 4.92p
Expected volatility
2
68%
Option life 3 years
Expected dividends 0.0%
Risk-free rate of return 0.5%
1
The fair value of options re-issued or awarded on 12 May 2014 was 1.5p per share.
2
Volatility for options granted was estimated based on the Company’s daily closing share price during the 12 months prior to the issue of the share options.
(ii) Other share options or warrants
On 15 May 2013 the Company granted 12,000,000 share options to Metalvalue Capital Holdings, exercisable at £0.05 per share until 30 April 2014,
at which date the options lapsed, unexercised.
On 15 September 2014 the Company granted 60,000,000 share options to an unnamed “mid-tier mining company”, exercisable at £0.03 per share until
15 December 2014, at which date the options lapsed unexercised. The non-refundable fair value of £39,000 received for those options was transferred
directly to accumulated losses.
Total contingently issuable shares
2014 2013
Executive share Option Plan 12,900,000 12,900,000
Other share options - 12,000,000
Total contingently issuable shares 12,900,000 24,900,000
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
26Alexander Mining plc Annual Report &?Accounts 2014
The number and weighted average exercise prices of share options are as follows:
2014 2013
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
Outstanding at the beginning of the year 5.08p 24,900,000 10.10p 10,175,000
Lapsed during the year (Metaleach Capital Holdings) 5.00p (12,000,000) 10.00p -
Cancelled during the year 11.0p (500,000) 10.00p (9,675,000)
Re-issued during the year 4.92p 500,000 4.92p 9,675,000
Granted during the year (employees) - - 4.92p 2,725,000
Granted during the year (Metaleach Capital Holdings) - - 5.00p 12,000,000
Granted during the year (un-named “mid-tier mining company”) 3.0p 60,000,000 - -
Lapsed during the year 3.0p (60,000,000) - -
Outstanding at the end of the year 4.92p 12,900,000 5.08p 24,900,000
Exercisable at the end of the year 4.92p 4,300,000 5.21p 12,416,666
Share options outstanding at 31 December 2014 had a weighted average exercise price of 4.92 pence (2013: 5.08 pence) and a weighted average contractual
life of 5.98 years (2013: 3.76 years). To date no share options have been exercised. There are no market based vesting conditions attaching to any share options
outstanding at 31 December 2014. All options outstanding at the end of the year have a final exercise date of 22 December 2020.
On 1 January 2013, the 31 December 2012 balance of £558,371 held in the Share Option Reserve was transferred to Accumulated Losses. This represented
a change only in balance sheet presentation and had no net effect on total shareholders’ equity. All Share Option costs incurred thereafter are charged directly
to Accumulated Losses.
On 12 May 2014, the Board cancelled a total of 500,000 existing share options with an average exercise price of 11p per share and approved the issue of new
replacement share options, on a one-for-one basis, with an exercise price of 4.92p per share. The 4.92p exercise price represented a 27% premium over the
closing mid-market share price on 12 May 2014.
21 Commitments
Future commitments for the Group under non-cancellable operating leases are as follows:
2014 2013
£’000 £’000
Payable within one year 11 41
The Group does not sub-lease any of its leased premises. Payments under operating leases recognised in operating loss in the year are set out in note 4.
22 Contingent liabilities
There were no contingent liabilities at 31 December 2014 or 31 December 2013.
23 Related parties
The Group's investments in subsidiaries have been disclosed in note 11.
During the year the Company entered into the following transactions with other Group companies:
Sale of good Amounts owed by group companies
and services
At Increase Provisions At 31
1 January in year in year December
£’000 £’000 £’000 £’000 £’000
MetaLeach Limited - 2014 10 - 467 (467) -
MetaLeach Limited - 2013 10 - 467 (467) -
On 10 September 2014, the Company’s subsidiary, Molinetes (BVI) Limited, completed the sale of its entire interest in its subsidiary, Compania Minera Molinetes
SAC for the nominal sum of Peruvian Nuevos Soles 100 (approximately £21). Outstanding receivables of £439,339 due from these subsidiaries were written off
against provisions. At 31 December 2013 the Company had an outstanding amount receivable from Molinetes BVI Limited of £437,905 and a provision of
£437,905 against that balance.
At 31 December 2014 the Company had an outstanding amount receivable from MetaLeach Limited of £2,591,858 (2013: £2,124,138). The Company has
recognised a provision of £2,591,858 (2013: £2,124,138) against that balance, which has been assessed as impaired due to the uncertainty of success, over
extended timeframes, surrounding the subsidiary’s operations. The amount owed is unsecured, interest-free, and has no fixed terms of repayment. The balance
will be settled in cash. No guarantees have been given or received.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
27Alexander Mining plc Annual Report &?Accounts 2014
Details of directors’ emoluments are set out in note 6. Compensation for key management personnel was as follows:
2014 2013
£’000 £’000
Short-term employee benefits 597 616
National Insurance contributions 31 24
Other benefits 5 6
Share-based payments 20 19
653 665
During the year, MetaLeach Limited paid £nil (2013: £15,000) to consulting metallurgist Dr Katherine Malatt in respect of AmmLeach
®
testwork supervision.
Dr Malatt is the spouse of Garry Johnston, a senior Group employee.
During the year Alexander Mining plc received £18,924 (2013: £16,000) from Equest Limited in respect of office services provided to Global Oil Shale Limited.
Mr Matthew Sutcliffe is a director of Alexander Mining plc and was a director of Global Oil Shale Limited until 31 January 2014.
At 31 December 2014, the following amounts were owed to directors of the Company in respect of deferred payments of directors’ fees.
These amounts, totalling £331,000 (2013:£206,000), are included in Trade and Other Payables (note 16):
Mr M L Sutcliffe £242,000 (2013:£169,000)
Mr M L Rosser £ 44,000 (2013:£ 37,000)
Mr J S Bunyan £ 13,000 (2013: nil)
Mr A M Clegg £ 2,000 (2013: nil)
Mr R O Davey £ 15,000 (2013: nil)
Mr E M Morfett £ 15,000 (2013: nil)
24 Post balance sheet events
Post balance sheet issue of shares:
On 13 January 2015, the Company issued 72,000,000 new shares of 0.1p each for cash at 0.5p each to raise £360,000 (gross). In connection with that placing,
the Company issued 3,600,000 warrants, valid for two years, to subscribe for ordinary shares at 0.5p per share
On 13 January 2015 the Company also issued 1,090,909 new shares of 0.1p each, at a price of 0.825p per share, in lieu of £9,000 in fees due to the Company’s
nominated advisor and 1,500,000 new shares of 0.1p each at a price of 0.80p per share in lieu of £12,000 in fees due to a consultant for investor relations and
advisory services.
On 22 January 2015, the Company issued 5,000,000 new shares of 0.1p each, at a price of 0.6p per share, to Cove House Investments Limited, in respect of
consultancy and advisory services.
Following admission of the above shares, the Company has a total of 255,910,288 ordinary shares in issue.
On 23 February 2015 the Company announced a non-binding Heads of Agreement (“HoA”) signed with Compass Resources Limited (“Compass”) a listed
Australian public company, for an AmmLeach
®
licence and certain technical and management services relating to a feasibility study planned for the use of
AmmLeach
®
at Compass’s treatment plant and mine in Australia for copper, cobalt and nickel production.
Compass and Alexander are currently working to finalise the definitive agreement (‘Agreement’), conditional on completion of Compass’ proposed financing.
The key commercial terms agreed in the HoA are:
On completion of the definitive agreement, the Company will grant to Compass a licence to use Alexander’s leaching technologies (AmmLeach
®
). The principal
terms of the licence and technical consultancy and management services will include:
I. Cash payments by Compass totalling A$1,100,000 to Alexander on commencement of the Agreement;
II. Compass will also pay to Alexander:
a. A$400,000 three months after the initial fee payment; and
b. A$425,000 upon delivery of the feasibility study.;
III. A$550,000 during the construction and commissioning stage, dependent on a construction go-ahead decision; and
IV. A royalty of 2.6077% on saleable metal production after capped third party royalties.
Conditional upon the Agreement being executed, and subject to Alexander shareholders’ approval at the 2015 AGM, the Company will grant to Compass
the following share options:
I. options over 5 million ordinary shares of 0.1p each at an exercise price of 7.5p per share for 18 months from issue; and
II. options over 5 million ordinary shares of 0.1p each at an exercise price of 10.0p per share for 24 months from issue.
Financial Statements
Notes to the Financial Statements
For the year ended 31 December 2014
28Alexander Mining plc Annual Report &?Accounts 2014
Notice is hereby given that the Annual General Meeting of Alexander Mining
plc will be held at the East India Club, 16 St James’s Square, London, SW1Y
4LH at 10:30am on Wednesday 13th May 2015 in order to consider and, if
thought fit, pass resolutions 1 to 4 as ordinary resolutions and resolution 5 as
a special resolution:
Ordinary Resolutions
1. To receive, consider and adopt the Directors’ Report and Accounts
for the year ended 31st December 2014, together with the Auditor’s
report thereon.
2. To re-elect as a director Mr M L Rosser who retires by rotation in
accordance with Article 93 of the Company’s Articles of Association
and who, being eligible, offers himself for re-election.
3. To re-appoint BDO LLP of 55 Baker Street, London W1U 7EU,
as auditors of the Company and to authorise the Directors to
determine their remuneration.
4. That the Directors be generally and unconditionally authorised pursuant
to Section 551 of the Companies Act 2006 (the ‘2006 Act’) to allot
shares in the Company or grant rights to subscribe for or to convert any
security into shares in the Company (‘Rights’) up to an aggregate
nominal amount of £150,000 provided that this authority shall, unless
previously revoked or varied by the Company in general meeting, expire
at the conclusion of the next Annual General Meeting of the Company
following the date of the passing of this resolution or (if earlier) 12
months from the date of passing this resolution, but so that the directors
may before such expiry make an offer or agreement which would or
might require relevant securities to be allotted after such expiry and the
directors may allot relevant securities in pursuance of that offer or
agreement as if the authority hereby conferred had not expired.
This authority is in substitution for all previous authorities conferred
on the Directors in accordance with Section 80 of the Companies Act
1985, or Section 551 of the 2006 Act.
Special Resolution
5. That, subject to the passing of Resolution 4, the Directors be given the
general power to allot equity securities (as defined by Section 560 of
the 2006 Act) for cash, either pursuant to the authority conferred by
Resolution 4 or by way of a sale of treasury shares, as if Section 561(1)
of the 2006 Act did not apply to any such allotment, provided that this
power shall be limited to:
5.1the allotment of equity securities in connection with an offer
by way of a rights issue:
5.1.1to the holders of ordinary shares in proportion (as nearly as may
be practicable) to their respective holdings; and
5.1.2to holders of other equity securities as required by the rights
of those securities or as the Directors otherwise consider
necessary, but subject to such exclusions or other arrangements
as the Board may deem necessary or expedient in relation to
treasury shares, fractional entitlements, record dates, legal or
practical problems in or under the laws of any territory or the
requirements of any regulatory body or stock exchange; and
5.2the allotment (otherwise than pursuant to paragraph 5.1 above)
of equity securities up to an aggregate nominal amount of
£150,000.
The power granted by this resolution will unless renewed, varied
or revoked by the Company, expire at the conclusion of the next
Annual General Meeting of the Company following the date of
the passing of this resolution or (if earlier) 12 months from the
date of passing this resolution, save that the Company may,
before such expiry make offers or agreements which would or
might require equity securities to be allotted after such expiry
and the Directors may allot equity securities in pursuance of
any such offer or agreement notwithstanding that the power
conferred by this resolution has expired.
This resolution revokes and replaces all unexercised powers
previously granted to the Directors to allot equity securities as if
either section 89(1) of the Companies Act 1985 or section 561(1)
of the 2006 Act did not apply, but without prejudice to any
allotment of equity securities already made or agreed to be
made pursuant to such authorities.
The Board of Alexander Mining plc recommends that shareholders vote in
favour of all the proposed resolutions.
Members or their appointed Proxies are entitled to ask questions of the Board
at the Annual General Meeting. The Board will answer any such questions
unless (i) to do so would interfere unduly with the conduct of the meeting or
involve the disclosure of confidential information; or (ii) the answer has already
been given on the Company’s web-site; or (iii) to answer such questions is
contrary to the Company’s best interest or the good order of the meeting.
By order of the Board
T A Cross
Company Secretary
10 April 2015
Registered Office:
1st Floor, 35 Piccadilly, London, W1J 0DW
Shareholder Information
Notice of Annual General Meeting
(incorporated and registered in England and Wales under number 5357433)
29Alexander Mining plc Annual Report &?Accounts 2014
1. A member of the Company entitled to attend and vote at this meeting
is entitled to appoint one or more proxies to exercise all or any of the
member’s rights to attend, speak and vote at the meeting, using the
attached Form of Proxy. A proxy need not also be a member. If a
member appoints more than one proxy to attend the meeting, each
proxy must be appointed to exercise the rights attached to a different
share or shares held by the member. If a member wishes to appoint
more than one proxy and so requires additional proxy forms, the
member should contact Capita Asset Services on 0871 664 0300 (calls
cost 10p per minute plus network extras, lines are open 9.00am –
5.30pm Mon - Fri). Completion and return of a Form of Proxy will not
preclude a member from attending and voting at the meeting should
the member so decide.
2. To be valid, the Form of Proxy and any power of attorney or other
authority under which it is signed (or a notarially certified copy of such
authority) must be completed and returned so as to reach: (i) the
Company’s Registrars in accordance with the reply paid details or (ii)
by hand to Capita Asset Services, The Registry, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU not less than 48 hours before the time
appointed for the Annual General Meeting or any adjournment thereof.
3. A corporation which is a member can appoint one or more corporate
representatives who may exercise on its behalf all of its powers as a
member, provided that they do not do so in respect of the same shares.
4. The Company, pursuant to resolution 41(1) of the Uncertificated
Securities Regulations 2001, specifies that only those shareholders
registered in the register of members of the Company at 6:00pm on
11th May 2015 (or, if the meeting is adjourned, at 6:00pm on the day
two days prior to the adjourned meeting) be entitled to attend and vote
at the Annual General Meeting (and for the purpose of determining the
number of votes a member may cast). Changes to the register of
members after the relevant time shall be disregarded in determining
the rights of any person to attend and vote at the meeting.
5. If the Chairman, as a result of any proxy appointments, is given
discretion as to how the votes the subject of those proxies are cast
and the voting rights in respect of those discretionary proxies, when
added to the interests in the Company’s securities already held by the
Chairman, result in the Chairman holding such number of voting rights
that he has a notifiable obligation under the Disclosure and
Transparency Rules, the Chairman will make the necessary notifications
to the Company and the Financial Conduct Authority. As a result, any
member holding 3% or more of the voting rights in the Company who
grants the Chairman a discretionary proxy in respect of some or all of
those voting rights and so would otherwise have a notification
obligation under the Disclosure and Transparency Rules, need not
make a separate notification to the Company and the Financial
Conduct Authority.
6. The following documents will be available for inspection during normal
business hours on any week day at the Company’s registered office up
until the date of the Annual General Meeting and at the place of the
meeting from 30 minutes before the start of the meeting on
13th May 2015 until the end of the meeting:
i)a copy of the Memorandum and Articles of Association
of the Company;
ii)the contracts of service and letters of appointment between
the Company or its subsidiary undertakings and its Directors.
7. To appoint proxies or give/amend an instruction to an appointed proxy
via the CREST system, the CREST message must be received by the
issuer’s agent (ID: RA10) by 6:00pm on 11th May 2015 and time of
receipt will be taken as the time (as determined by the timestamp
applied by the CREST Applications Host) that the issuer’s agent is able
to retrieve the message. CREST Personal Members or other CREST
Sponsored Members, and CREST Members who have appointed
voting service providers, should refer to their sponsor/voting service
provider for advice on appointing proxies via CREST. Regulation 35 of
the Uncertificated Securities Regulations 2001 will apply to all proxy
appointments sent by CREST. For information on CREST procedures
and system timings, please refer to the CREST Manual.
Shareholder Information
Notes to the Notice of
Annual General Meeting
30Alexander Mining plc Annual Report &?Accounts 2014
Proxy Form for use by holders of ordinary shares at the Annual General Meeting (the ‘AGM’) to be held on Wednesday 13th May 2015.
Please read the Notice of the Meeting and the accompanying explanatory notes to this Proxy Form carefully before completing this Proxy Form.
I/We(block capitals please)
of
being a member/members of Alexander Mining plc, appoint the Chairman of the AGM or (see Explanatory Note 2)*
as my/our proxy to exercise all or any of my/our rights to attend, speak and vote in respect of my/our voting entitlement on my/our
behalf as indicated below at the AGM and at any adjournment thereof (see Explanatory Notes 3, 4 and 5).
Please tick here if this proxy appointment is one of multiple appointments being made.
* For the appointment of more than one proxy, please refer to Explanatory Note 4. Please clearly mark the boxes below to instruct
your proxy how to vote.
Resolutions For Against Vote withheld Discretionary
Ordinary Resolutions
1. Adoption of Report and Accounts
2. Re-election of Mr M L Rosser
3. Re-appointment of BDO LLP
4. Authority to allot new shares
Special Resolution
5. Dis-application of pre-emption rights
Signature (see Explanatory Note 6) Date
Explanatory Notes to the Proxy Form:
1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the AGM on your behalf. You should appoint a proxy using the
procedure set out in these Explanatory Notes.
2. A proxy need not be a member of the Company but must attend the meeting to represent you. If you wish to appoint as a proxy a person other than the Chairman of the AGM, please delete the
words “the Chairman of the AGM” and insert the full name of the other person in the box provided on this Proxy Form. If you sign and return this Proxy Form with no name inserted in the box, the
Chairman of the AGM will be deemed to be your proxy. If the proxy is being appointed in relation to less than your full voting entitlement, please enter in the box next to the proxy holder’s name
the number of shares in relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting entitlement (or if this Proxy
Form has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account).
3. The completion and return of this Proxy Form will not prevent you from attending in person and voting at the AGM should you subsequently decide to do so. However, if you have appointed a
proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
4. You are entitled to appoint more than one proxy provided that each proxy is appointed to exercise rights attached to a different share or shares held by you. You may not appoint more than one
proxy to exercise rights attached to any one share. To appoint more than one proxy please use a photocopy of this form or contact Capita Asset Services on 0871 664 0300 (calls cost 10p per
minute plus network extras, lines are open 9.00am – 5.30pm Mon - Fri). Please indicate in the box next to the proxy holder’s name the number of shares in relation to which they are authorised to
act as your proxy. Please also indicate by ticking the box provided, if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in
the same envelope.
5. If you wish your proxy to cast all of your votes for or against a resolution you should insert an “X” in the appropriate box. If you wish your proxy to cast only certain votes for and certain votes
against, insert the relevant number of shares in the appropriate box. The “Vote Withheld” option is provided to enable you to instruct your proxy to abstain from voting on a particular resolution. A
“Vote Withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “For” or “Against” a resolution. The “Discretionary” option is provided to enable you to
give discretion to your proxy to vote or abstain from voting on a particular resolution as he or she thinks fit. In the absence of instructions, your proxy may vote or abstain from voting as he or she
thinks fit on the specified resolutions and, unless instructed otherwise, may also vote or abstain from voting as he or she thinks fit on any other business (including on a motion to amend a
resolution, to propose a new resolution or to adjourn the AGM) which may properly come before the AGM.
6. This Proxy Form must be signed by the member or his/her attorney. Where the member is a corporation, the Proxy Form must be executed under its common seal or signed by a duly authorised
representative of the corporation, stating their capacity (e.g. director, secretary). In the case of joint holders, any one holder may sign this Proxy Form. The vote of the senior joint holder (whether in
person or by proxy) will be taken to the exclusion of all others, seniority being determined by the order in which the names stand in the register of members in respect of the joint holding.
7. To be valid, the Form of Proxy and any power of attorney or other authority under which it is signed (or a notarially certified copy of such authority) must be completed and returned so as to reach
(i) the Company’s Registrars in accordance with the reply paid details,
(ii) or by hand to Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, not less than 48 hours before the time appointed for the meeting.
8. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, entitlement to attend and vote at the AGM and the number of votes which may be cast thereat will be determined by
reference to the register of members of the Company at 6pm on the day which is two days before the day of the AGM or adjourned meeting. Changes to entries on the register of members after
that time shall be disregarded in determining the rights of any person to attend and vote at the meeting.
9. All alterations made to this Proxy Form must be initialled by the signatory.
10. If you submit more than one valid proxy appointment in respect of the same share or shares, the appointment received last before the latest time for the receipt of proxies will take precedence. If
the Company is unable to determine which was received last, none of the proxy appointments in respect of that share or shares shall be valid.
11. Shares held in uncertificated form (i.e. in CREST) may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual.
Shareholder Information
Form of Proxy
31Alexander Mining plc Annual Report &?Accounts 2014
BUSINESS REPLY
Licence No. RLUB-TBUX-EGUC
PXS 1
34 Beckenham Road
Beckenham
BR3 4ZF
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Shareholder Information
Company Information
Company Information
Alexander Mining plc, 1st Floor, 35 Piccadilly,
London, W1J 0DW, United Kingdom
Telephone: +44 (0) 20 7292 1300
Fax: +44 (0) 20 7292 1313
Email: info@alexandermining.com
Website: www.alexandermining.com
Company registration number: 5357433
Directors and Advisors
Company Secretary
T A Cross
Directors
M L Sutcliffe
M L Rosser
J S Bunyan
A M Clegg
R O Davey
E M Morfett
Registrars
Capita Asset Services
40 Dukes Place, London, EC3A 7NH
Auditor
BDO LLP
55 Baker Street, London, W1U 7EU
Nominated Adviser and Broker
Northland Capital Partners Limited
131 Finsbury Pavement, London, EC2A 1NT
Registered office
1st Floor, 35 Piccadilly,
London, W1J 0DW, United Kingdom
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Alexander Mining plc
Annual Report &?Accounts 2014
Alexander Mining plc
1st Floor 35 Piccadilly
London W1J 0DW
United Kingdom
T: +44 (0) 20 7292 1300
F: +44 (0) 20 7292 1313
www.alexandermining.com
admin@alexandermining.com
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