EXECUTIVE DIRECTOR’S STATEMENT
The eighteen months to 30 September 2011 have required patience from shareholders and management in the face of frustrating delays, both in removing the remaining links to the Malawian subsidiary and in expanding the Company’s project portfolio.
As announced in the interim results on 30 November 2011, the Company continues to discuss opportunities on more than one front and is hopeful that the results of this work can be announced in the near future. Discussions have been undertaken on projects within and outside Malawi and the Company continues to implement strict standards in its evaluation criteria.
During the period covered by this report the Company closed down the exploration camp at Chimimbe and the administrative office in Balaka. In conjunction with this, Lisungwe Mineral Resources staff were released and exploration works at Chimimbe were rehabiliited, in accordance with the licence provisions. The reasons for this arose from the high costs maintaining such a team necessitated and the reduced prospectivity of the licences. The quick closure of operations in Malawi and the strict control of funds to the subsidiary ensured the Company could continue to explore new opportunities and projects. However Lisungwe Mineral Resources itself held significant outstanding liabilities and the decision was taken that the Company could no longer support it.
The change of name to ‘Rare Earths and Metals’ was a result of the new focus of the Company; the signing of the first Joint Venture on the Chikangawa project represented a significant milestone. The immediate cost to the Company was very low and the opportunity to build upon historical exploration that revealed strong niobium and tantalum results was attractive. The opportunity to test for rare earths, previously unassayed for, presents additional upside.
As announced in the interim results on 30 November 2011, the Company continues to discuss a number of opportunities and is hopeful that discussions will conclude positively on at least one front. Once a suitable opportunity has been identified, the Company intends to raise further funds.
23 February 2012
The Directors present their fifth annual report on the affairs of the Company, together with the financial statements for the eighteen month period ended 30 September 2011.
Principal activities and future developments
The principal activities of the Company in the eighteen months under review have been to evaluate the potential of the nickel and pyrite projects in Malawi and subsequently to close down Lisungwe Mineral Resources Limited (LMR). Following on from that the Company reviewed potential opportunities in Malawi and applied for the Chikangawa exploration licence on the evidence of encouraging past exploration.
The current developments during the period and those of the future are given in the Executive Director’s statement.
Results and dividends
The results for the period and the financial position of the Company are shown in the following financial statements.
On 23 September 2011, the Company disposed of its subsidiary, Lisungwe Mineral Resources Limited and, consequently, has not prepared group accounts.
The Company has incurred a pre-tax loss of £(92,490) (2010: Loss of £(2,248,925)).
The Company has net liabilities of £(16,211) (2010: £(29,639)).
The Directors do not recommend the payment of a dividend.
Notwithstanding the loss incurred during the period under review and the deficit of shareholders equity at the balance sheet date, the Directors are of the opinion that preparation of the Company’s accounts on a going concern basis is appropriate. It remains the belief of the Board that a future is possible although uncertainty does exist with regard to the availability of future funding.
By order of the Board
23 February 2012
The Company is pleased to announce that the audit report has been signed today by Mr Mark Fryza Senior Statutory Auditor of Fryza Bannister Financials Limited.
Statement of comprehensive income
for the period ended 30 September 2011
18 months ended Year ended
30 September 31 March
Investment income 78 452
Exploration costs (6,557) -
Administrative expenses (55,186) (47,685)
Finance costs (3,315) - ________ __________
Loss before and after taxation
from continuing operations (64,980) (47,233)
Loss for the period from discontinued operations (27,510) (2,201,692)
Loss for the period (92,490) (2,248,925)
Other comprehensive income - -
Total comprehensive (expense) for the period (92,490) (2,248,925)
Loss per share – basic
From continuing and discontinued operations
(pence per share) (0.026) (0.888)
From continuing operations
(pence per share) (0.018) (0.019)
All amounts are attributable to equity holders of the company.
Statement of financial position
as at 30 September 2011
30 September 31 March
Investment in subsidiary - 1
Total non-current assets - 1
Cash and cash equivalents 53,338 985
Trade and other receivables 3,427 7,712
Total current assets 56,765 8,697
Total assets 56,765 8,698
Equity and Liabilities
Capital and reserves attributable to
Equity holders of the company
Called-up share capital 202,424 154,920
Share premium reserve 1,586,105 1,531,091
Share option reserve 81,490 81,490
Retained earnings (1,889,630) (2,509,640)
Merger reserve - 712,500
Option premium on convertible notes 3,400 -
Total equity (16,211) (29,639)
Trade and other payables 23,061 38,337
Borrowings 49,915 -
Total current liabilities 72,976 38,337
Total equity and liabilities 56,765 8,698 _________ _________
- General information
The company, Rare Earths and Metals plc (formerly Lisungwe plc) was formed as a management holding company providing administrative and management services to its subsidiary, Lisungwe Mineral Resources Limited (LMR). LMR was engaged in mineral exploration in Malawi, a small southern African country. These activities were suspended by the end of the previous accounting period and this remained the position throughout the current accounting period. The decision was taken by the Board to dispose of its entire shareholding in LMR as it was no longer financially viable to maintain. The company disposed of its entire shareholding on 23 September 2011.
The accounting reference date was extended in February 2011 from 31 March 2011 to 30 September 2011. This was to enable the disposal of LMR to be presented in the next available financial statements.
The company is now actively engaged in identifying suitable mineral exploration projects in its own name. During the period the company acquired a 90% share of an exploration licence with a view to assessing its potential for niobium, tantalum and rare earths.
The company is a public limited company which is listed on PLUS markets and is incorporated and domiciled in the UK. The address of its registered office is 55 Gower Street, London WC1E 6HQ.
- Authorisation of financial statements
The financial statements were authorised for issue by the board on 23 February 2012 and the statement of financial position was signed on the board’s behalf by Frederick Bell and John Watkins.
3. Loss per share
18 months ended Year ended
30 September 31 March
Pence per share Pence per share
Loss per share
From continuing operations (0.018) (0.019)
From discontinued operations (0.008) (0.869)
Total basis loss per share (0.026) (0.888)
The basic loss per share is derived by dividing the loss for the period attributable to ordinary shareholders by the weighted average number of shares in issue.
Weighted average number of Ordinary shares
of £0.0005 in issue 361,220,520 253,298,853
Due to the losses incurred during the period a diluted loss per share has not been calculated as this would serve to reduce the basic loss per share.
4. The financial information has been prepared on the going concern basis, the validity of which depends principally on the discovery of economically viable mineral deposits and the availability of subsequent funding to extract the resource. Based on past experience and future expectations, the management believe it is appropriate to prepare these financial statements on a going concern basis.
5. The financial information set out in this announcement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. This financial information set out in this announcement is unaudited and has not been reviewed by the Company’s auditors.
6. The directors do not recommend the payment of a dividend.
Copies of the report will be mailed to all Shareholders shortly together with a notice of the annual general meeting to be held at 10.00 am Thursday 29 March 2012 at the offices of Ronaldsons, 55 Gower Street, London WC1E 6HQ.
The Directors of Rare Earths and Metals plc accept responsibility for this announcement.
Rare Earths and Metals plc
Frederick Bell, Managing Director
Tel: 07554 872794
John Watkins, Chairman
Tel: 01483 771992
Rivington Street Corporate Finance Limited Corporate Adviser
Tel: 020 7562 3373