Unaudited interim results for the 6 months ende...

For immediate release: 0700hrs 24 December 2009 Emerging Metals Limited ("EML", "Emerging Metals" or "the Company") Unaudited interim financial statements for the six month period ended 30 September 2010 Emerging Metals Limited (AIM: EML), the investment company focused on investment metals, today announces its interim results for the six month period ended 30th September 2010. Financial Highlights * Holding in Kalahari Minerals Plc reduced to £nil (31 March 2010: £ 16,497,647) following sale of remaining 8,917,647 shares at £1.85 on the 16 April 2010; * Special Dividend of 7.13 pence per share - aggregate amount of £25,352,097 - declared on 16 April 2010 and paid on 18 May 2010; * Holding in Extract Resources Limited reduced to £nil (31 March 2010: £ 1,740,508) following sale of 368,721 shares at AUD7.00 on the 19 July 2010; * Equity shareholder funds decreased in period to £9,975,844 (31 March 2010: £35,867,184) following the May 2010 shareholder dividend; * Current assets valuation decreased to £10,001,338 (31 March 2010: £ 35,920,430) following sale of Kalahari and Extract holdings; * Cash reserves at period end remain extremely healthy at £9,990,019 (31 March 2010: £17,676,956); * Operating expenses for period below budget at £521,233 of which £329,953 related to a commission payment on the sale of Kalahari Shares (30 September 2009: operating expenses £347,952); * Net asset value per share as of 30 September 2010: 2.81 pence (30 September 2009: 10.70 pence); * Net loss for the six months ended 30 September 2010: £896,884 (30 September 2009: profit of £13,916,315 resulting from investment gains of £14,419 ,739); * As of the 30 November 2010, the Company's cash balances stand at £ 9,640,544, representing 2.71 pence per share. Co-chairman Stephen Dattels commented: "The Board anticipates that the cash it has retained will provide sufficient working capital for the Directors to continue to develop opportunities for investment in situations which are, in their opinion, undervalued or capable of producing a similar level of return as achieved with the realisation of the Kalahari investment. The Board intends therefore to continue to implement its Investing Policy." --Ends-- Contact details Emerging Metals Religare Capital Fox-Davies Capital GTH Limited Markets Limited Communications Denham Eke Peter Daniel Fox-Davies Toby Hall Trevelyan-Clark Christian Pickel Emily Staples +44 (0) 1624 639396 +44 (0) 20 7444 +44 (0) 20 7936 +44 (0) 20 3103 0800 5200 3900 CHAIRMEN's STATEMENT Dear Shareholders, Investing Policy Since last writing to you in the company's annual accounts published on 22nd September, 2010, your Board has continued to seek investment opportunities as approved by shareholders at the General Meeting of the Company on 10th April 2009. At this meeting, the Company was reclassified as an "investing company" (as defined by the AIM Rules for Companies). The Board anticipates that the cash it has retained will provide sufficient working capital for the Directors to continue to develop opportunities for investment in situations which are, in their opinion, undervalued or capable of producing a similar level of return as achieved with the realisation of the Kalahari investment. The Board intends therefore to continue to implement this Investing Policy. The Company plans to target exposure to Investment Metals which include all metals other than base metals (such as copper and lead, but excluding for these purposes zinc) and bulk commodities metals (such as iron, potassium and aluminium) in addition to minor metals. All of these opportunities may include interests in exploration permits and licences, mining projects under development, operating mines, smelters, slag stockpiles, refineries, and associated activities. These activities may be undertaken in the ordinary course of business and as an alternative to holding cash reserves on a day-to-day basis. The Directors continue to believe that current market conditions will provide good opportunities for a positive return. The Directors do not envisage that the Company's investment portfolio will be leveraged initially; however, this position may be reviewed should the Board become aware of available and commercially prudent financing arrangements. The Company will consider cross holdings of shares in circumstances that would benefit its broader investment strategy. In evaluating possible additional opportunities in Investment Metals, the Directors take into account the goal of achieving a diversified exposure to different Investment Metals as well as the market outlook for individual elements, although there will be no maximum exposure limits. The Directors estimate that investments will be held for periods of up to five years. The Directors believe that their collective experience in the areas of mining, acquisitions, accounting and corporate and financial management, together with the opinion of expert consultants in the evaluation and exploitation of Investment Metals opportunities, will enable the Company to achieve its objectives. Furthermore, the Directors continue to take an active role in the management and development of any future projects. Investments On the 26th April 2010, following shareholder approval, the Company's remaining shareholding of Kalahari Shares was sold to Nippon Uranium Resources (Australia) Proprietary Limited, a wholly owned subsidiary of Itochu Corporation of Japan. The number of shares sold was 8,917,647 at a price 185 pence per share, and the Company received gross proceeds of £16,497,647 resulting in an investment gain of £11,612,665. In the same accounting period, the Company subsequently also disposed of its holding in Extract Resources Limited generating additional investment gains of £1,499,735. Dividend payment The Board declared a Special Dividend of 7.13 pence per share on 16th April 2010 which was paid on 18th May 2010, being an aggregate amount of £25,352,097. Half Year Results As expected, our half year results to 30th September 2010 show a comprehensive loss for the period of £896,884 (30th September 2009: profit £13,916,315 - including an investment gain of £14,427,398). This figure reflects the sale of our remaining investments and the subsequent shareholder dividend payment. Following the implementation of operating efficiencies and on a like-for-like basis, the Company's running expenses are below budget at £191,280 (30th September 2009: £347,952). The Other Costs figure in the accounts of £521,233 includes a commission payment on the sale of Kalahari Shares of £329,953. Following the payment of a dividend of £25,352,097 on 18th May 2010, equity shareholder funds have decreased to £9,975,844 (31st March 2010: £35,867,184) and our cash reserves have decreased to £9,990,019 (31st March 2010: £ 17,676,956). Investments stand at £nil (31st March 2010: £ 18,238,155). Subsequent Events - Acquisition and Option over Uranium Concentrates On the 12th November 2010, the Company announced that it had contracted for the physical delivery of 25,000 lbs triuranium octocide ("U3O8") and had entered into an option agreement for the physical delivery of a further 200,000 lbs U3O8. The physical delivery contract is priced at US$58.00 for each pound of U3O8 delivered and is in respect of 25,000 lbs of U3O8. Delivery to a conversion facility in Canada is due on 17th January 2011 with cash payment (equivalent to £898,723 at £/US$1.6134) by no later than 18th January 2011. The option contract is in respect of 200,000 lbs U3O8 for physical delivery by book transfer at a designated facility and expires on 31st January 2011. An option premium of US$500,000 (equivalent to £309,905 at £/US$ 1.6134) was paid on the 17th November 2010 and the additional option strike price is US$59.00 per pound U3O8, or a total US$11,800,000 (equivalent to £7,313,747 at £/US$ 1.6134). The Director's made the decision to sell the option in respect of 200,000 lbs of U3O8 on the 30th November 2010 at a bid price of US$3.00 for settlement on the 15th December 2010, generating a net US$100,000 profit on the sale. Finally, we would like to express our appreciation to the shareholders for their continued support. Stephen Dattels James Mellon Co-chairman Co-chairman Statement of comprehensive income For the six months ended 30 Notes For the For the For the September 2010 period from period from year ended 1 April 1 April 31 March 2010 to 30 2009 to 30 2010 September September 2010 2009 (Audited) (Unaudited) (Unaudited) £ £ £ Income Exchange losses (20,011) - (61,521) Unrealised gains on - 14,419,739 2,814,733 investments Realised (losses) / gains on (296,434) - 11,612,665 investments ────── ────── ────── (316,445) 14,419,739 14,365,877 Operating expenses Directors' fees 8 (99,191) (156,007) (241,005) Other costs 3 (521,233) (347,952) (396,888) Impairment losses 5 - - (5,319,860) ────── ────── ────── (620,424) (503,959) (5,957,753) ────── ────── ────── (Loss) / profit before (936,869) 13,915,780 8,408,124 interest income Interest income 1(e) 39,985 535 646 ────── ────── ────── (Loss) / profit before (896,884) 13,916,315 8,408,770 taxation Taxation 9 - - - ────── ────── ────── (Loss) / profit for the period (896,884) 13,916,315 8,408,770 ══════ ══════ ══════ Other comprehensive income - - - ────── ────── ────── Total comprehensive (loss) / (896,884) 13,916,315 8,408,770 income for the period ══════ ══════ ══════ Earnings per share 15 ( 0.0025) 0.0421 0.0254 ══════ ══════ ══════ Diluted earnings per share 15 (0.0025) 0.0393 0.0237 ══════ ══════ ══════ The Directors consider that the Company's results derive from continuing activities. The notes form part of these financial statements. Statement of financial position as at 30 September 2010 Notes Unaudited Unaudited at Audited at at 30 September 30 September 31 March 2010 2009 2010 £ £ £ Assets Non-current assets Land options 1(f),4 - 4,818,455 - Intangible fixed assets 1(c),5 - 501,405 - ────── ────── ────── - 5,319,860 - ────── ────── ────── Current assets Investments 1(f) - 34,703,396 18,238,155 Trade and other receivables 1(f) 11,319 6,231 5,319 Cash and cash equivalents 1(f) 9,990,019 683,176 17,676,956 ────── ────── ────── 10,001,338 35,392,803 35,920,430 ────── ────── ────── Total assets 10,001,338 40,712,663 35,920,430 ══════ ══════ ══════ Equity and liabilities Capital and reserves Share capital 6 - - - Share premium 6 15,804,554 14,560,530 15,245,789 Share option reserve 7 - 3,504,144 1,201,674 Equity share based payment reserve 1(j) - 151,557 201,124 Accumulated (loss) / profit (5,828,710) 22,423,672 19,218,597 ────── ────── ────── Total equity 9,975,844 40,639,903 35,867,184 ────── ────── ────── Current liabilities Trade and other payables 25,494 72,760 53,246 ────── ────── ────── Total liabilities 25,494 72,760 53,246 ────── ────── ────── ────── ────── ────── Total equity and liabilities 10,001,338 40,712,663 35,920,430 ══════ ══════ ══════ The notes form part of these financial statements. Statement of changes in equity for the six months ended 30 September 2010 Share Share Share Share Accumulated Total Premium Option Based Capital Profits Reserves Option Payments £ £ £ £ £ £ Balance at 31 March 14,560,530 3,504,144 80,240 - 8,507,357 26,652,271 2009 Total comprehensive ────── ─────── ─────── ────── ─────── ─────── income for the period - - - - 13,916,315 13,916,315 Profit - - - - - - Other comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners Shares issued - - - - - - Share based payment - - 71,317 - - 71,317 reserve Total contributions by ────── ─────── ─────── ────── ─────── ─────── and distributions to owners - - 71,317 - 13,916,315 13,987,632 ────── ─────── ─────── ────── ─────── ─────── ────── ─────── ─────── ────── ─────── ─────── Balance at 30 September 14,560,530 3,504,144 151,557 - 22,423,672 40,639,903 2009 ══════ ═══════ ═══════ ══════ ═══════ ═══════ Share Share Share Share Accumulated Total Premium Option Based Capital Profits Reserves Option Payments £ £ £ £ £ £ Balance at 31 March 15,245,789 1,201,674 201,124 - 19,218,597 35,867,184 2010 Total comprehensive ────── ─────── ─────── ────── ─────── ─────── income for the period - - - - (896,884) (896,884) Loss - - - - - - Other comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners Exercise of share 357,641 (1,201,674) - - 1,201,674 357,641 options Dividend payments - - - - (25,352,097) (25,352,097) Share based payment 201,124 - (201,124) - - - reserve Total contributions ────── ─────── ─────── ────── ─────── ─────── by and distributions to owners 558,765 (1,201,674) 201,124) - (25,047,307) (25,891,340) ────── ────── ─────── ────── ─────── ─────── ────── ─────── ─────── ────── ─────── ─────── Balance at 30 15,804,554 - - - (5,828,710) 9,975,844 September 2010 ══════ ═══════ ═══════ ══════ ═══════ ═══════ The notes form part of these financial statements. Statement of cash flows for the six months ended 30 September Notes For the For the For the 2010 period from period from year ended 1 April 2010 1 April 31 March to 30 2009 to 30 2010 September September 2010 2009 (Audited) (Unaudited) (Unaudited) £ £ £ Net cash outflow from operating 10 (835,326) (418,901) (583,280) activities Cash flows from investing activities Amount paid in cash for intangible - - - fixed assets Amount paid in cash for investments - (2,655,883) (2,655,882) Proceeds on sale of investments 17,941,721 - 16,472,899 Net cash inflow / (outflow) from ────── ────── ────── investing activities 17,941,721 (2,655,883) 13,817,017 ────── ────── ────── Cash flows from financing activities Increase in share premium 558,765 - 685,259 Dividends paid to equity holders (25,352,097) - - Net cash (outflow) / inflow from ────── ────── ────── financing activities (24,793,332) - 685,259 ────── ────── ────── (Decrease)/ increase in cash and (7,686,937) (3,074,784) 13,918,996 cash equivalents Cash and cash equivalents at 17,676,956 3,757,960 3,757,960 beginning of period ────── ────── ────── Cash and cash equivalents at the 9,990,019 683,176 17,676,956 end of period ══════ ══════ ══════ The notes form part of these financial statements.Notes (forming part of the interim financial statements for the six monthsended 30 September2010) 1 Accounting policies Emerging Metals Limited is a Company domiciled in the British Virgin Islands. The interim financial statements incorporate the principal accounting policies set out below. a. Statement of compliance The interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the interpretations adopted by the International Accounting Standards Board (IASB). b. Basis of preparation The preparation of interim financial statements in conformity with 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 only affects that period or in the period of the revision and future periods if the revision affects both current and future periods. The key estimate and judgement made by the Directors is the fair value of the land option. A number of new standards, amendments to standards and interpretations are not yet effective for the period, and have not been applied in preparing these interim financial statements: New/Revised International Accounting Standards / Effective date International Financial Reporting Standards (IAS/ IFRS) (accounting periods commencing after) IAS 24 Related Party Disclosures - Revised definition 1 January 2011 of related parties IFRS 9 Financial Instruments 1 January 2013 IFRIC Interpretation IFRIC 19 Extinguishing Financial Liabilities with 1 July 2010 Equity Instruments The Directors do not expect the adoption of the other standards and interpretations to have a material impact on the Company's interim financial statements in the period of initial application. c. Intangible assets Exploration rights and associated survey costs are capitalised as incurred and reviewed annually for impairment and are carried at cost less accumulated impairment losses. d. Impairment The carrying amounts of the Company's assets not carried at fair value through profit and loss are reviewed at least at each statement of financial position date to determine whether there is any indication of impairment. If there is any indication that an asset may be impaired, its recoverable amount is estimated. The recoverable amount is the higher of its net selling price and its value in use. In assessing value in use, the expected future cash flows from the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss would be recognised whenever evidence exists that the carrying value is not recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. An impairment loss is recognised and charged to earnings if the discounted expected future cash flows are less than the carrying amount. Fair value is estimated by discounting the expected future cash flows using a discount factor that reflects the market rate for a term consistent with the period of expected cash flows. For an asset that does not generate cash inflows that are largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. An impairment loss is recognised in the income statement whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a change in the estimates used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior years. e. Interest Income Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable. f. Financial instruments Measurement Financial instruments are initially measured at cost, which includes transaction costs. Subsequent to initial recognition these instruments are measured as set out below. Land options Land options were stated at fair value, as estimated by the Directors. This is estimated to be the current market value of the options. There will be no amortisation of the premium paid. Investments Investments related to holdings in two entities which were acquired to realise gains from fluctuations in the prices or margins of traders and are accounted for on a trading basis. These assets were valued at fair value based on quoted bid prices. Any realised and unrealised gains and losses are presented within `Other Income'. Trade and other receivables Trade and other receivables originated by the Company are stated at amortised cost less impairment losses. Cash and cash equivalents Cash and cash equivalents are measured at amortised cost and due on demand. Financial liabilities Non-derivative financial liabilities are recognised at amortised cost. g) Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are discounted. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. h) Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the statement of financial position date. All differences are taken to the statement of comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. i) Share based payments Under IFRS 2 `Share Based Payments', the Company determines the fair value of options issued to Weatherly International plc as part consideration of the land option (as per the Tsumeb Option Agreement (note 4)) share option reserves in the statement of financial position. The Company determines the fair value of options issued to Directors remuneration and recognises the amount as an expense in the statement of comprehensive income with a corresponding increase in equity. j) Directors equity share based payments The fair value of the incentive granted is recognised as an expense with a corresponding increase in equity. The fair value is measured at the grant date and spread over the period during which the directors become unconditionally entitled to the incentives. k) Dividends Dividends are recognised as a liability in the year in which they are declared and approved by the Company's shareholders in the annual general meeting. 2 Operating segments It is the Directors' opinion that the Company operates within a single segment. 3 Other costs For the For the For the year period from period from ended 31 1 April 2010 1 April 2009 March 2010 to 30 to 30 September September (Audited) 2010 2009 (Unaudited) (Unaudited) £ £ £ Professional fees 137,285 213,714 305,560 Audit fee 10,901 11,825 19,025 Travel and transport expenses - 3,045 3,045 Commission on sale of 329,953 - - investments Office expenses 43,094 119,368 69,258 ──────── ──────── ──────── 521,233 347,952 396,888 ════════ ════════ ════════ 4 Land option The land option comprised the Tsumeb Option as described below and is stated at fair value. Fair value, as estimated by the Directors, as at 30 September 2010 is £nil (30 September 2009: £4,818,455). Please refer to note 5. 5 Impairment losses The impairment losses recognised in the statement of comprehensive income, as a separate line item within operating profit are as follows: For the period For the For the year from 1 April period from 1 ended 31 March 2010 to 30 April 2009 to 2010 September 30 September (Audited) 2010 2009 (Unaudited) (Unaudited) £ £ £ Intangible fixed assets - 501,405 501,405 Cost of land options - 4,818,455 4,818,455 ────── ────── ────── - 5,319,860 5,319,860 ══════ ══════ ══════ On the 31 March 2010 the Directors' opinion was that the carrying value of these assets were not deemed recoverable and exceeded their fair value and that the carrying values be written off anticipating the expiry at the end of July 2010. The option has now expired. 6 Share capital and share premium For the For the For the period from 1 period from period from April 2010 to 1 April 1 April 2009 30 September 2009 to 30 to 31 March 2010 September 2010 2009 (Audited) (Unaudited) (Unaudited) £ £ £ Authorised The Company is authorised to issue - - - an unlimited number of no par value shares of a single class Issued 355,569,386 (30 September 2009: - - - 330,759,300 ordinary shares of £ 0.00 each) ordinary shares of £ 0.00 each. Share premium 1 share at incorporation - - - 71,528,234 shares at £0.0001 per 7,153 7,153 7,153 share 214,584,704 shares at £0.0500 per 10,729,235 10,729,235 10,729,235 share 21,899,698 shares at £0.0500 per 1,094,985 1,094,985 1,094,985 share 22,746,663 shares at £0.1200 per 2,729,157 2,729,157 2,729,157 share 685,259 - 685,259 13,705,179 shares at £0.0500 per share 201,124 - - 3,952,084 shares at £0.05089 per 357,641 - - share 7,152,823 shares at £0.0500 per share ──────── ──────── ──────── Total 15,804,554 14,560,530 15,245,789 ════════ ════════ ════════ The shares issued during the period with share premium of £558,765 relate to the exercise of share options (please refer to note 7) and equity share-based payments following a resolution passed for the Directors of the Company to accept 50% of their remuneration in the form of new shares issued at mid-market prices (please refer to note 8). 7 Share based payments On the 6 April 2010 the Company issued 7,152,823 (30 September 2009: nil) ordinary shares at no par value for a total consideration of £357,641 in respect of an exercise of the outstanding founder share options. In summary, as at 30 September 2010, the value of the share options in issue is £nil (30 September 2009: £3,504,144) 8 Directors' Fees Mitchell For the For the For the Alland period from period from period 1 April 1 April from 1 2010 to 30 2009 to 30 April September September 2009 to 2009 31 March 2010 2010 (Unaudited) (Unaudited) (Audited) £ £ £ 71,582 12,507 70,676 Denham Eke 49,184 46,925 95,329 Stephen 12,500 12,500 25,000 Dattels James Mellon 12,500 12,500 25,000 Patrick Weller 12,500 12,500 25,000 ────── ────── ────── Total 99,191 156,007 241,005 ══════ ══════ ══════ In November 2008 the Company granted equity share-based payments following a resolution passed for the Directors of the Company to accept 50% of their remuneration in the form of new shares issued at mid-market prices. On the 20 April 2010 the Company allotted 3,952,084 (30 September 2009: nil) new ordinary shares of nil par value in lieu of salary and fee payments to directors in accordance with the announcement of final results made on 22 September 2010. The new shares were issued at month end mid-market prices/ exchange rates (USD/GBP) in respect of the period November 2008 to March 2010 inclusive. The volume weighted average issue price in respect of each director was approximately 5.089p. The Company has no employees other than the Directors. 9 Taxation The Company is exempt from the provisions of the Income Tax Ordinance of the British Virgin Islands. 10 Notes to the cash flow statement Reconciliation of (loss) / profit for the period to net outflow from operating activities For the For the For the period from period from period from 1 April 1 April 2009 1 April 2009 2010 to 30 to 30 to 31 March September September 2010 2010 2009 (Audited) (Unaudited) (Unaudited) £ £ £ (Loss)/profit for (896,884) 13,916,315 8,408,770 the period Adjustment for: (Increase) / (6,000) 146 1,058 decrease in trade and other receivables (Decrease) / (27,752) 13,060 (6,454) increase in trade and other payables Share based (201,124) 71,317 120,884 payment charge Unrealised gains - (14,419,739) (2,814,733) on investments Impairment losses - - 5,319,860 Realised losses / 296,434 - (11,612,665) (gains) on investments ─────── ─────── ─────── Net cash outflow (835,326) (418,901) (583,280) from operating activities ═══════ ═══════ ═══════ 11 Financial risk management The Company's financial instruments are exposed to a number of risks as detailed below: Credit risk Credit risk is the risk of financial loss to the Company if a counter party to a financial instrument fails to meet its contractual obligations. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: For the For the For the period from period from period from 1 April 2010 1 April 1 April to 30 2009 to 30 2009 to 31 September September March 2010 2010 2009 (Audited) (Unaudited) Unaudited) £ £ £ Cash and cash equivalents 9,990,019 683,176 17,676,956 ══════ ══════ ══════ The Company invests available cash and cash equivalents with an Isle of Man licensed bank, which has a strong history on the Island. The Company has a nominal level of debtors, and as such the Company is able to determine that credit risk is considered minimal in relation to debtors. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk is managed by the Company by means of cash flow planning to ensure that future cash requirements are anticipated. All liabilities are due within one month. Market price risk Market price risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity price will affect the Company's income or the value of its holdings of financial instruments. All investments present a risk of loss of capital due to unexpected and unforeseen events in the financial markets, and these can have a material and unpredictable impact on the portfolio value. The maximum risk resulting from the portfolio is equivalent to their fair value. For the For the For the period from period from year ended 1 April 2010 1 April 31 March to 30 2009 to 30 2010 September September (Audited) 2010 2009 (Unaudited) naudited) £ £ £ Land option - 4,818,455 - Intangible fixed assets - 501,405 - Investments - 34,703,396 18,238,155 ═══════ ═══════ ═══════ Interest rate risk The Company holds current assets in the form of cash at bank. As a result, the Company is subject to risk due to fluctuations in the prevailing level of market interest rates. The weighted average interest rate at 30 September 2010 was 0.0152% (30 September 2009: 0.0152%) and all balances are held on demand. The Directors do not regard that interest income is a core revenue stream of the Company and therefore fluctuations in interest rates will not adversely impact the continuing operations of the Company. At 30 September 2010 the carrying amounts of cash resources, trade and other receivables, and trade and other payables approximate their fair values due to their short-term maturities. 12 Significant shareholdings Except for the interests disclosed in this note, the Directors are not aware of any holding of Ordinary Shares as at the date of these accounts representing 3% or more of the issued share capital of the Company: Number of ordinary shares Number of Ordinary Shares Percentage of Issued Capital Vidacos Nominees Limited 133,091,841 37.43% Mr Ronald Bruce Rowan 25,000,000 7.03% Chase Nominees Limited 21,324,263 6.00% HSBC Global Custody Nominee (Uk) Limited 19,221,007 5.41% Ambrian Nominees Limited 12,705,179 3.57% Hargreaves Lansdown (Nominees) Limited 12,473,137 3.51% Directors interests Stephen Dettels 1 21,224,263 5.97% James Mellon 2 31,537,443 8.87% Notes to Directors' Interests: 1. Stephen Dattels' entire shareholding of 21,224,263 shares is held by Regent Mercantile Holdings Limited, a company which is owned by the trustee of a discretionary trust under which Stephen Dattels is a beneficiary. 2. James Mellon's shareholding consists of 29,537,443 shares which are held by Galloway Limited, a company which is indirectly wholly owned by the trustee of a settlement under which James Mellon has a life interest and a further 2,000,000 shares held in James Mellon's own name. Denham Eke is a Director of Galloway Limited. 13 Related party transaction The Company has entered into a service agreement with Burnbrae Limited for the provision of administrative and general office services. Mr James Mellon and Mr Denham Eke are both directors of Burnbrae Limited and the Company. During the six month period ended 30 September 2010 the Company paid £27,760 (30 September 2009: £15,450) under this agreement and as at 30 September 2010 an amount of £ nil (30 September 2009: £227) was owed to Burnbrae Limited. During the six month period ended 30 September 2010 the Company paid £61,684 (30 September 2009: £29,712) and issued nil options (30 September 2009: 497,035) to Mr James Mellon and Mr Denham Eke in respect of Directors fees. * Subsequent events On the 12 November 2010 the Company announced that it had contracted for the physical delivery of 25,000lbs of triuranium octocide ("U3O8") and had entered into an option agreement for the physical delivery of a further 200,000lbs U3O8. The physical delivery contract was priced at US$58.00 for each pound of U3O8 delivered and was in respect of 25,000lbs U3O8. Delivery to a conversion facility in Canada is due on 17 January 2011 with cash payment (equivalent to £ 898,723 at £/$ 1.6134) by no later than 18 January 2011. The option contract is in respect of 200,000lbs U3O8 for physical delivery by book transfer at a designated facility and expires on 31 January 2011. An option premium of US$500,000 (equivalent to £309,905 at £/$ 1.6134) was paid on 17 November 2010 and the additional option strike price is US$59.00 per pound U3O8, or a total US$11,800,000 (equivalent to £7,313,747 at £/$ 1.6134). Due to the U308 market stalling faster than anticipated due to year end profit taking the Director's made the decision to sell the above mentioned options on the 30 November 2010 at a bid price of US$3.00 for settlement on the 15 December 2010 generating a net US$100,000 profit on the sale. 15 Basic and diluted earnings per share The calculation of basic earnings per share of the Company is based on the net loss attributable to shareholders for the period of £896,884 (30 September 2009: profit £13,916,315) and the weighted average number of shares of 344,306,441 (30 September 2009: 330,759,300) in issue during the period. The calculation of diluted earnings per share of the Company includes the weighted average number of share options and shares to be issued in respect of share based payments (see note 1(j)) for the period. Six month Six month period ended 30 period ended 30 September September 2009 2010 £ £ Retained Earnings for basic and diluted (896,884) 13,916,315 earnings per share: ═══════ ═══════ 2010 2009 Weighted average number of shares for 355,569,386 330,759,300 basic earnings per share Effect of dilutive share options - 23,843,329 Weighted average number of shares for ──────── ──────── diluted earnings per share 355,569,386 354,602,629 ════════ ════════

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