Interim results for six months ended 30 June 2014

RNS Number : 9742S

Strategic Minerals PLC

30 September 2014

 



30 September 2014

Strategic Minerals Plc

("Strategic Minerals", "Group" or the "Company")

Interim results for the six months ended 30 June 2014

Strategic Minerals Plc (AIM: SML; USOTC: SMCDY), the magnetite iron ore producer and exploration company, announces its interim results for the six months ended 30 June 2014.

Highlights

Financial 

·    Total revenues generated: US$5.7 million (H1 2013: US$21.5 million);

·    EBITDA level loss for the period: US$2.0 million (H1 2013: US$0.7 million);

·    Total comprehensive loss for the period: US$2.7 million (H1 2013: US$5.5 million);

·    Cash and cash equivalents at 30 June 2014 was US$1.3 million (31 Dec 2013: US$1.2 million).

·    Raised US$1.5 million (net of expenses) at 0.8 pence per share with the issue of 125 million shares;

·    Issued 45 million shares to a creditor in exchange for obligations owed to them.

Operational 

·    Significant decline in Platts IODEX 62% Fe price resulted in the cessation of iron ore exports with final export of material occurring in February 2014;

·    Total export sales of 64,000 dry metric tonnes ("DMT") (H1 2013: 247,000 DMT );

·    Domestic Sales of 12,850 short wet ton ("SWT") (H1 2013: 8,900 SWT);

·    Average net FOB price achieved: US$76.23/DMT (H1 2013: US$84.73/DMT).

Julien McInally, Executive Chairman of Strategic Minerals, said:

"The drop in iron ore price has made it a challenging half year which resulted in the decision to cease the export of iron ore and focus on domestic sales that are not linked to iron ore price. The Company reduced its losses in spite of significantly reduced revenue and there will be a further positive impact to our cost structure with the focus purely on our higher margin domestic sales business and the corporate overhead reductions which will take effect in the second half of this year."

"The Company is in a good position to add value for shareholders, with a restructured Board, focused strategy on US domestic growth from our existing Cobre asset and the continued focus on securing additional near term cash flow opportunities. I am pleased with the significant cost reductions to corporate overheads in the last few months and our board is confident that our new strategy will result in significant financial and operational improvements in the medium term. I am grateful to our shareholders for their support and I look forward to updating you during the months to come."

For further information:

Company
Strategic Minerals plc
Julien McInally Executive Chairman	[phone]
Nominated Adviser and Broker
Allenby Capital Limited
Jeremy Porter / James Reeve	[phone]
Financial Public Relations
Tavistock
Jos Simson/Nuala Gallagher	[phone]

About Strategic Minerals

The strategy for Strategic Minerals PLC (AIM: SML) is to build a diversified portfolio of cash generating high quality strategic minerals operations and near term mining projects in jurisdictions where returns are commensurate with risk. Strategic Minerals currently produces magnetite iron ore from its operation in New Mexico in the United States and holds exploration properties in Australia. The Company is continuing to add value to its existing Cobre operation while it evaluates a number of acquisition opportunities in commodities such as tin, copper, iron ore, gold and other high value strategic minerals with a focus on projects that can be monetised quickly.  The Company will also consider larger projects in these strategic minerals that the Company believes can be funded via joint venture arrangements. www.strategicminerals.net

Chairman's Statement

The six months to the end of June 2014 has been a challenging period for the business.  The significant decline in the iron ore price to historic lows of around $80/tonne has resulted in the Company ceasing the export of iron ore magnetite, focusing instead on broadening its base of domestic sales from our Cobre operation in New Mexcio, USA.  The Board has undergone a restructure and, since that took place in the later part of the period, the Company has focused on new acquisition opportunities while continuing to improve the value to its existing operation.

Financial results

Strategic Minerals generated revenues of $5.7 million for the six-month period ended 30 June 2014 (2013: $21.5 million). Revenues were generated from our New Mexican operations, primarily through magnetite export sales which totalled $4.8 million (H1 2013: 20.9 million). Domestic sales in the USA totalled $0.9 million (H1 2013: $0.6 million).

The Company incurred a comprehensive loss for the financial period of $2.7 million as compared to a loss of $5.5 million for the six-month period ended 30 June 2013. During the half year, revenues were significantly reduced by $15.8 million - mainly due to a reduction in export sales volumes from 247,000 DMT to 64,000 DMT when compared to 30 June 2013 period. In addition, the FOB price dropped, when compared to the same period last year, from US$84.73/DMT to US$76.23/DMT. The cost of goods sold reduced in line with sales volumes during the half year but this was offset by an increase of $10/DMT on a per unit basis due to an increase in rail and mining costs during the period.  In addition, the cost of goods sold included a write down of inventory located at the port of Guaymas in Mexico amounting to $0.2 million.  Rail infrastructure and intangible assets were largely written off at the end of 31 December 2013, which resulted in $0.8 million of amortisation for the period.

Summary of Results		As restated
	6 months to	6 months to	Year to
	30 June	30 June	31 December
	2014	2013	2013
	(Unaudited)	(Unaudited)	(Audited)
	$'000	$'000	$'000
Revenue	5,745	21,544		37,242
Cost of sales	(6,415)	(20,700)		(35,237)
	________	________		________
Gross (loss)/profit	(670)	844		2,005
Administrative expenses	(1,313)	(1,508)		(3,541)
EBITDA	(1,983)	(664)		(1,536)
Non cash item:
Depreciation	(1)	(635)		(1,036)
Share based payment	-	(108)		(458)
Amortisation of intangible asset	(773)	(4,854)		(8,578)
Impairment of intangible asset	-	-		(14,366)
Impairment of railway infrastructure	-	-		(2,324)
Loss from operations	(2,757)	(6,261)		(28,298)

Basic and fully diluted loss per share for the period was 0.4 cents (1.1 cents for the six months ended 30 June 2013).

Operations

New Mexican Operations

The Company's change in strategy from a largely export focused business to a domestic sales focus has progressed well during the half year, with the Cobre operation servicing domestic magnetite customers in markets such as the concrete and fertilizer industries.

A total of 12,850 SWT was sold in the last six months which represented a 44% increase over the same period last year. Sales started the year very well but softened in the last three months of the period, due mainly to operational issues at one of our customer's sites and seasonal issues where trucks are deployed on agricultural haulage during the North American summer months.  We expect the seasonal interruptions to cease in the near term, which should result in an increase of sales orders. 

In addition to focusing on securing longer term contracts with existing and new domestic customers, the Company commenced test work on the potential to produce a Heavy Dense Media ("HDM") product in order to add value to its Cobre operation.  The price of HDM product is not directly linked to the iron ore price and generally sells at a significant premium to the Platts price. HDM product is sold into the coal, water filtration, sintering, magnet and other industries. The Company expects to receive the results of that test work in the coming months, which will assist with market and process design reviews.

Exploration

During the half year, the Company started the process of obtaining approval for an exploration programme on its Jotanooka project in Western Australia.  This work will allow the Company to initiate an exploration programme to evaluate the near surface high grade haematite potential for a Direct Shipping Ore (DSO) project. The Jotanooka project is ideally located 300 kilometres from a deep water port which has existing modern rail infrastructure nearby.  The project is neighboured by Sinosteel Midwest Corporation's Koolanooka project, which delivered 4Mt of DSO to the Chinese steel markets over a three-year mine life before closing in 2013 after the project sold all of its DSO material. A decision on whether to initiate the exploration programme will be made in light of the Company's cash position.

The Iron Glen project in Queensland Australia continues to be maintained and rehabilitation work was commenced on the site during the period and has now been completed.  Further work on this project will be conditional on further funding and subject to prioritisation of project initiatives. 

New Acquisitions

The Company has a cash flow generating business which allows us to be selective in securing new near-term cash flow generating projects. Since May 2014 and the restructure of the board, the Company has reviewed and been in detailed discussions on a number of acquisitions in tin, gold, iron ore and other strategic minerals. We will keep the market updated as opportunities progress.

Safety

The Company continues to maintain a high level of safety performance with no reportable environmental or personnel incidents being recorded.

Other Matters

In May 2014 the Board underwent a restructure which resulted in the appointment of myself as Executive Chairman and Mr Lyle Hobbs as our United States based Executive Director. Mr Patrick Griffiths agreed to remain on the board and provides important corporate continuity for the Company.  The Company intends to appoint a non-executive Chairman based in the United Kingdom, at which point I will take on the role of Managing Director. A number of potential candidates are being evaluated and an appointment will be made in due course. 

Immediately following the new Director appointments in May, the Company completed a corporate overhead review which identified a number of potential savings.  The corporate overhead review resulted in a reduction of directors fees and other overheads and the Company is on track to reduce overall corporate overheads to less than US$1.2M on an annualised basis going forward excluding costs associated with reviewing new opportunities and other exceptional items. 

Finally, I would like to take this opportunity to thank my fellow Directors, our management and staff in New Mexico, and our advisers for their support and hard work on your behalf during the period. Additionally, I would like to thank our contractors, suppliers and partners for their on-going support.

Julien McInally

Executive Chairman

30 September 2014

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2014

		As restated
	6 months to	6 months to	Year to
	30 June	30 June	31 December
	2014	2013	2013
	(Unaudited)	(Unaudited)	(Audited)
	$'000	$'000	$'000
Continuing operations
Revenue	5,745	21,544	37,242
Cost of sales	(6,415)	(20,700)	(35,237)
	________	________	________
Gross (loss)/ profit	(670)	844	2,005
Administrative expenses	(1,313)	(1,508)	(3,541)
Amortisation of intangible asset	(773)	(4,854)	(8,578)
Impairment of intangible asset	-	-	(14,366)
Depreciation	(1)	(635)	(1,036)
Impairment of railway infrastructure	-	-	(2,324)
Share based payment	-	(108)	(458)
	________	________	________
Loss from operations	(2,757)	(6,261)	(28,298)
Finance expense	(15)	(598)	(673)
	________	________	________
Loss before taxation	(2,772)	(6,859)	(28,971)
Income tax credit	162	1,214	5,092
	________	________	________
Loss for the period	(2,610)	(5,645)	(23,879)
Other comprehensive income
Exchange (losses) / gains arising on translation of foreign operations	(138)	156	182
	________	________	________
Total comprehensive loss	(2,748)	(5,489)	(23,697)
	________	________	________
Loss for the period attributable to:
Owners of the parent	(2,610)	(5,645)	(23,879)
	________	________	________
Total comprehensive loss attributable to:
Owners of the parent	(2,748)	(5,489)	(23,697)
	________	________	________
Loss per share attributable to the ordinary equity holders of the parent:
Continuing activities - Basic and diluted	(0.4) cents	(1.1)cents	(4.4) cents
	________	________	________

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

		As restated
	30 June	30 June	31 December
	2014	2013	2013
	(Unaudited)	(Unaudited)	(Audited)
	$'000	$'000	$'000
Assets
Non-current assets
Intangible assets	772	19,362	1,545
Deferred exploration and evaluation	1,847	1,875	1,825
Property, plant and equipment	3	2,531	4
Deferred tax asset	-	665	-
	________	________	________
	2,622	24,433	3,374
	________	________	________
Current assets
Inventories	351	4,259	2,223
Trade and other receivables	594	1,984	3,069
Cash and cash equivalents	1,291	2,025	1,183
	________	________	________
	2,236	8,268	6,475
	________	________	________
Total Assets	4,858	32,701	9,849
	________	________	________
Equity and liabilities
Share capital	1,169	884	884
Share premium reserve	41,707	39,847	39,847
Merger reserve	20,240	20,240	20,240
Foreign exchange reserve	(298)	(186)	(160)
Share options reserve	2,478	2,128	2,478
Other reserves	(23,023)	(23,023)	(23,023)
Accumulated loss	(38,803)	(17,959)	(36,193)
	________	________	________
Total Equity	3,470	21,931	4,073
	________	________	________
Liabilities
Non-current liabilities
Deferred tax liability	162	4,541	324
	________	________	________
	162	4,541	324
	________	________	________
Current liabilities
Loans and borrowings	-	1,294	-
Trade and other payables	1,226	4,935	5,452
	________	________	________
	1,226	6,229	5,452
	________	________	________
Total Liabilities	1,388	10,770	5,776
	________	________	________
Total Equity and Liabilities	4,858	32,701	9,849
	________	________	________

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE PERIOD ENDED 30 JUNE 2014

		As restated
	6 months to	6 months to	Year to
	30 June	30 June	31 December
	2014	2013	2013
	(Unaudited)	(Unaudited)	(Audited)
	$'000	$'000	$'000
Cash flows from operating activities
Loss before tax	(2,772)	(6,859)	(28,971)
Adjustments for:
Impairment of property, plant and equipment	-	-	2,324
Depreciation of property, plant and equipment	1	635	1,039
Impairment of intangible assets	-	-	14,366
Amortisation of intangible assets	773	4,854	8,578
Adjustment to inventory	443	-	-
Increase in inventory	1,428	(1,664)	559
(Increase) / decrease in trade and other receivables	2,958	(804)	(1,795)
Increase / (decrease) in trade and other payables	(4,226)	826	1,047
Share based payment expense	-	108	459
	_______	_______	_______
Net cash flows from operating activities	(1,395)	(2,904)	(2,394)
	_______	_______	_______
Investing activities
Increase in deferred exploration and evaluation	(21)	(32)	-
Acquisition of property, plant and equipment	-	-	(50)
	_______	_______	_______
Net cash used in investing activities	(21)	(32)	(50)
	_______	_______	_______
Financing activities
Net proceeds from issue of equity share capital	1,542	6,580	6,580
Net repayment of borrowings	-	(3,307)	(4,696)
	_______	_______	_______
Net cash from financing activities	1,542	3,273	1,884
	_______	_______	_______
Net increase / (decrease) in cash and cash equivalents	126	337	(560)
Cash and cash equivalents at beginning of period	1,183	1,732	1,732
Exchange gains / (losses) on cash and cash equivalents	(18)	(44)	11
	_______	_______	_______
Cash and cash equivalents at end of period	1,291	2,025	1,183
	_______	_______	_______

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2014

	Share capital	Share  premium  reserve	Merger  reserve	Share  options  reserve	Other Reserves	Foreign  exchange  reserve	Accumulated loss	Total Equity
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Balance as at 1 January 2013 (as restated)	719	33,432	20,240	2,163	(23,023)	(342)	(12,457)	20,732
Loss for the period	-	-	-	-	-	-	(5,645)	(5,645)
Foreign exchange translation	-	-	-	-	-	156	-	156
						_______	_______	_______
Total comprehensive income  for the period						156	(5,645)	(5,489)
Shares issued in the year	160	7,073	-	-	-	-	-	7,233
Expense of share issue	-	(658)	-	-	-	-	-	(658)
Share based payments	-	-	-	108	-	-	-	108
Exercise of options	5	-	-	(143)	-	-	143	5
	_______	_______	_______	_______	_______	_______	_______	_______
Balance at 30 June 2013 (as restated) - Unaudited	884	39,847	20,240	2,128	(23,023)	(186)	(17,959)	21,931
	_______	_______	_______	_______	_______	_______	_______	_______
Loss for the period	-	-	-	-	-	-	(18,234)	(18,234)
Foreign exchange translation	-	-	-	-	-	26	-	26
						_______	_______	_______
Total comprehensive income for the year						26	(18,234)	(18,208)
Shares issued in the period	-	-	-	-	-	-	-	-
Expenses of share issue	-	-	-	-	-	-	-	-
Share based payments	-	-	-	350	-	-	-	350
	_______	_______	_______	_______	_______	_______	_______	_______
Balance at 31 December 2013 - Audited	884	39,847	20,240	2,478	(23,023)	(160)	(36,193)	4,073
	_______	_______	_______	_______	_______	_______	_______	_______
Loss for the period							(2,610)	(2,610)
Foreign exchange translation						(138)	-	(138)
						_______	_______	_______
Total comprehensive income for the year						(138)	(2,610)	(2,748)
Shares issued in the year	285	1,994	-	-	-	-	-	2,279
Expenses of share issue	-	(134)	-	-	-	-	-	(134)
Exercise of options	-	-	-	-	-	-	-	-
Share based payments	-	-	-	-	-	-	-	-
	_______	_______	_______	_______	_______	_______	_______	_______
Balance at 30 June 2014 - Unaudited	1,169	41,707	20,240	2,478	(23,023)	(298)	(38,803)	3,470
	_______	_______	_______	_______	_______	_______	_______	_______

All comprehensive income is attributable to the owners of the parent.

The accompanying accounting policies and notes form an integral part of these financial statements

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

1.   General information

Strategic Minerals Plc ("the Company") is a public company incorporated in England and Wales.  The consolidated interim financial statements of the Company for the six months ended 30 June 2014 comprise the Company and its subsidiaries (together referred to as the "Group").

2.   Accounting policies

Basis of preparation

These consolidated financial statements have been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. IAS 34 is not required to be adopted by the Company and has not been applied in the preparation of this interim information. The consolidated financial statements do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2013 Annual Report. The financial information for the half years ended 30 June 2014 and 30 June 2013 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited.

The annual financial statements of Strategic Minerals Plc are prepared in accordance with IFRSs as adopted by the European Union. The comparative financial information for the year ended 31 December 2013 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2013 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2013 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The Company has amended its reporting currency since 30 June 2013 to US dollars as the Company's revenues, expenses, assets and liabilities are predominately in US currency. Hence, the 30 June 2013 financial statement comparatives are noted as being restated.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.

The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Group's latest annual audited financial statements.

In addition, the IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report was published. It is not expected that any of these will have a material impact on the Group.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

3.  Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future.  Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.  In the future, actual experience may differ from these estimates and assumptions.  The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Judgements

(a)  Revenue recognition

The eventual price invoiced for export sales is determined based on a formula linked to the Platts IODEX 62% Fe CFR China in months following the month of sale and quality analysis post loading. For this period the amount recorded as revenue was the final agreed invoice value so no judgement has been applied in recording revenue for the year. 

Estimates and assumptions

(b)  Carrying value of intangible assets

In assessing the continuing carrying value of the exploration and evaluation costs carried the Company has made an estimation of the value of the underlying tenements and exploration licenses held.

In assessing the continuing carrying value of the other intangible asset, being the contractual relationship acquired on the acquisition of Ebony Iron Pty Limited, the key estimate and assumption made in the valuation model adopted has been the expected level of product which the Company will be able to sell.

(c)  Share based payments, warrants and options

The fair value of warrants and options recognised in the income statement is measured by use of the Black Scholes model, which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted; based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share price volatility percentage factor used in the calculation is based on management's best estimate of future share price behaviour based on past experience.  There were no options issued in the current period.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

4.	Segment information

The Group has three main segments:

·     Southern Minerals Group LLC (SMG) - This segment is involved in the sale of magnetite to both the US domestic market and shipment of magnetite to port for onward export sale. 

·     Head Office - This segment incurs all the administrative costs of central operations and finances the Group's operations. 

·     Australia - This segment holds the tenements in Australia and incurs all related operating costs.

Factors that management used to identify the Group's reportable segments

The Group's reportable segments are strategic business units that carry out different functions and operations and operate in different jurisdictions.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Executive Chairman and Executive Directors.

Measurement of operating segment profit or loss, assets and liabilities

The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with EU Adopted IFRS but excluding non-cash losses, such as the amortisation of intangible assets, and the effects of share-based payments.

Segment assets exclude tax assets and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities. Loans and borrowings are allocated to the segments in which the borrowings are held. Details are provided in the reconciliation from segment assets and liabilities to the Group's statement of financial position.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

4.	Segment information (continued)

				Head
			SMG	Office	Australia	Total
	6 Months to 30 June 2014 (Unaudited)		2014	2014	2014	2014
			$'000	$'000	$'000	$'000
	Revenue		5,745	-	-	5,745
	Cost of sales		(6,415)	-	-	(6,415)
			_______	_______	_______	_______
	Gross loss		(670)	-	-	(670)
	Depreciation		-	(1)	-	(1)
	Administrative expenses		(998)	(289)	(26)	(1313)
	Amortisation of intangible asset		(773)	-	-	(773)
			_______	_______	_______	_______
	Segment loss from operations		(2,441)	(290)	(26)	(2,757)
	Finance expense		-	(15)	-	(15)
			_______	_______	_______	_______
	Segment loss before taxation		(2,441)	(305)	(26)	(2,772)
			_______	_______	_______	_______

				Head
	6 months to 30 June 2013 (Unaudited)		SMG	Office	Australia	Total
			2013	2013	2013	2013
			$'000	$'000	$'000	$'000
	Revenue		21,544	-	-	21,544
	Cost of sales		(20,700)	-	-	(20,700)
			_______	_______	_______	_______
	Gross profit		844	-	-	844
	Depreciation of railway infrastructure		(635)	-	-	(635)
	Administrative expenses		(344)	(996)	(168)	(1,508)
	Amortisation of intangible asset		(4,854)	-	-	(4,854)
	Share-based payments		-	-	(108)	(108)
			_______	_______	_______	_______
	Segment loss from operations		(4,989)	(996)	(276)	(6,261)
	Finance expense		-	(598)	-	(598)
			_______	_______	_______	_______
	Segment loss before taxation		(4,989)	(1,594)	(276)	(6,859)
			_______	_______	_______	_______

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

4.	Segment information (continued)

				Head
	Year to 31 December 2013 (Audited)		SMG	Office	Australia	Total
			2013	2013	2013	2013
			$'000	$'000	$'000	$'000
	Revenue		37,242	-	-	37,242
	Cost of sales		(35,237)	-	-	(35,237)
			_______	_______	_______	_______
	Gross profit		2,005	-	-	2,005
	Exploration and evaluation expenditure		-	-	-	-
	Depreciation of railway infrastructure		(1,036)	-	-	(1,036)
	Administrative expenses		(874)	(2,416)	(251)	(3,541)
	Amortisation of intangible asset		(8,578)	-	-	(8,578)
	Share-based payments charge		(458)	-	-	(458)
	Impairment to railway infrastructure		(2,324)	-	-	(2,324)
	Impairment to intangible asset		(14,366)	-	-	(14,366)
			_______	_______	_______	_______
	Segment profit / (loss) from operations		(25,631)	(2,416)	(251)	(28,298)
	Finance expense		-	(673)	-	(673)
			_______	_______	_______	_______
	Segment profit / (loss) before taxation		(25,631)	(3,089)	(251)	(28,971)
			_______	_______	_______	_______

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

4.	Segment information (continued)

				Head
			SMG	office	Australia	Total
	As at 30 June 2014 (Unaudited)		$'000	$'000	$'000	$'000
	Additions to non-current assets (excluding deferred tax)		-	-	21	21
			_______	_______	_______	_______
	Reportable segment assets (excluding deferred tax)		1,972	517	2,369	4,858
			_______	_______	_______	_______
	Reportable segment liabilities		379	833	14	1,226
			_______	_______	_______
	Deferred tax liabilities					162
						_______
	Total Group liabilities					1,388
						_______

	As at 30 June 2013 (Unaudited)		$'000	$'000	$'000	$'000
	Additions to non-current assets		-	-	32	32
			_______	_______	_______	_______
	Reportable segment assets		27,690	1,974	2,372	32,036
			_______	_______	_______	_______
	Reportable segment liabilities		3,817	2,122	290	6,229
			_______	_______	_______
	Deferred tax liabilities					4,541
						_______
	Total Group liabilities					10,770
						_______

	As at 31 December 2013 (Audited)		$'000	$'000	$'000	$'000
	Additions to non-current assets (excluding deferred tax)		-	-	50	50
			_______	_______	_______	_______
	Reportable segment assets (excluding deferred tax)		7,222	786	1,841	9,849
			_______	_______	_______	_______
	Reportable segment liabilities		4,727	683	42	5,452
			_______	_______	_______
	Deferred tax liabilities					324
						_______
	Total Group liabilities					5,776
						_______

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

5.	Operating loss

Administration costs by nature

		6 months to	6 months to	Year to
		30 June	30 June	31 December
		2014	2013	2013
		(Unaudited)	(Unaudited)	(Audited)
		$'000	$'000	$'000
	Operating loss is stated after charging/(crediting):
	Directors' fees and emoluments	630	645	1,163
	Auditors' remuneration	25	15	44
	Salaries, wages and other staff related costs	140	196	476
	Operating lease - land and buildings	30	43	84
	Legal, professional and consultancy fees	207	341	839
	Travelling and related costs	61	96	252
	Foreign exchange (gain) / loss	(120)	(90)	55
	Other expenses	340	262	628
		________	________	________
		1,313	1,508	3,541
		________	________	________

6

Dividends

No dividend is proposed for the period.  

7	Loss per share

Losses per ordinary share have been calculated using the weighted average number of shares in issue during the relevant financial year as provided below.

		6 months to	6 months to	Year to
		30 June	30 June	31 December
		2014	2013	2013
		(Unaudited)	(Unaudited)	(Audited)
	Weighted average number of shares	629,902,908	531,305,190	542,430,126
	Loss for the period	($2,610,000)	($5,645,000)	($23,879,000)
	Loss per share in the period	(0.4) cents	(1.1) cents	(4.4) cents

As the Group has made a loss for the period, diluted earnings per share is deemed to be the same as the basic earnings per share.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

8.	Share capital
		2014	2014	2013	2013
		No	$'000	No	$'000
	Allotted, called up and fully paid
	Ordinary shares	723,825,560	1,169	553,825,560	884
		__________	__________	__________	__________

In April, the Company issued 125,000,000 ordinary shares (the "Subscription Shares") through subscription and raised $1,541,000 (£920,000) net of expenses from new investors at a price of £0.008 per Subscription Share (the "Subscription Price").

Further, the Company issued 45,000,000 ordinary shares (the "Glencore Shares") in the Company to Glencore AG at the Subscription Price, in exchange for the obligation owed to them.

Share options and warrants

A reconciliation of the movements in the number of options and warrants outstanding and exercisable during the period is as follows:

Date of Grant	Granted as at 31 December 2013	Lapsed or cancelled	Granted as at 30 June 2014	Exercise price	Date of vesting	Date of expiry
31.03.11	23,369,988	(23,369,988)	-	1.86p	31.03.11	31.03.14
30.06.11	8,421,416	-	8,421,416	5.0p	30.06.11	29.06.16
01.03.12	4,000,000	(4,000,000)	-	16.0p	01.06.13	01.03.14
01.03.12	4,000,000	-	4,000,000	20.0p	01.06.14	01.03.15
03.05.12	39,062,500	(39,062,500)	-	12.0p	03.05.12	30.04.14
31.03.11	26,639,956	(26,639,956)	-	3.1p	31.03.11	31.03.14
06.11.13	31,000,000	(25,000,000)	6,000,000	5.0p	27.06.13	27.06.16
06.11.13	16,500,000	(12,500,000)	4,000,000	7.5p	27.06.13	27.06.16
06.11.13	12,500,000	(12,500,000)	-	10.0p	27.06.13	27.06.16
	165,493,860	(143,072,444)	22,421,416

Copies of this interim report will be made available on the Company's website, www.strategicminerals.net, by tomorrow.

 

END

 

 

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