Final Results

FOR: WISHBONE GOLD PLC AIM SYMBOL: WSBN PINKSHEETS SYMBOL: WISHY June 30, 2014 Wishbone Gold plc Final Results LONDON, UNITED KINGDOM--(Marketwired - June 30, 2014) - Wishbone Gold plc (AIM:WSBN) (PINKSHEETS:WISHY), the AIM listed exploration and acquisition company focused on identifying and developing precious metal assets, is pleased to announce its final results for the year ended 31 December 2013. General Highlights (including post period end) -- Continuing successful exploration results -- The appointment of Tabarak Investment Bank, based in the Dubai International Financial Centre ("DIFC"), as an additional adviser to the company. -- Share exchange agreement with General Resources Investment Trust ("GRIT") -- Open Offer to Shareholders -- Beaufort Securities Ltd were appointed as broker on 10th May 2013 and Northland Capital Ltd were appointed as NOMAD on 14th October 2013. Outlook The board remains optimistic about the prospects for 2014 with very promising exploration results on tenements during the 2013 year, we are building on this in the current 2014 exploration season. Chairman Richard Poulden said: "Wishbone has made significant strides towards its objectives this year. We have successfully brought on board a substantial institutional investor, GRIT, who have confidence in our management team. With the fire power and back up of both GRIT and Tabarak Investment Bank we are well placed to bring on board both small and large opportunities. In addition, we have an ever-growing pipeline of potential projects that we are constantly evaluating as well as continuing the exploration of our current portfolio. I am confident in a successful and strong future for Wishbone Gold's prospects." Chairman's Statement Dear Shareholders It is with great pleasure that I write to you as fellow shareholders for the second time since our Company was admitted to trading on AIM. There is a lot of technical ground to be covered in this statement so in order to ensure that you read what I think is important I am going to start with those points even though some wash over into the current year. Exciting things taken out of order Additional Tenements & good exploration results During the year under review we were notified that we had been granted the EPMs for Wishbone III and Wishbone IV, which we had applied for during 2012. These now surround the most prospective areas on Wishbone II and cover extensions to the North and East as well as being prospective in their own right. We achieved very promising exploration results on Wishbone II and White Mountains during the year, which we are building on in the current exploration season. Share Exchange with GRIT Signing the share exchange agreement with General Resources Investment Trust ("GRIT") was important to us. This was conditional during 2013 and became unconditional on 7th March 2014. Under this agreement Wishbone issued 45,772,693 ordinary shares in exchange for 1,031,360 ordinary shares in GRIT. Obviously this will provide funding to Wishbone through the sale of the GRIT shares but it also brings on board an institution with a huge amount of resources expertise and who believe, like us, that we are at the bottom of a cycle particularly in precious metals. More important to me than the simple funding through the share exchange is the future support for other deals and the worldwide connections of the managers of the fund. GRIT's support for Wishbone was amply demonstrated by their subscription under the open offer to shareholders (see below). Appointment of Tabarak Investment Bank On 2nd April 2014 we announced the appointment of Tabarak Investment Bank, based in the Dubai International Financial Centre ("DIFC"), as an additional adviser to the company. Tabarak has particular expertise in the financing of commodity projects on both trading and mining. They are primarily providers of debt finance in excess of $50m. Having Tabarak on board means that we are already working with a group who can assist immediately with any substantial project for which we may need finance. Open Offer to Shareholders On 4th April we announced an open offer to shareholders. Black Swan FZE, a company with which I am associated, underwrote this. The objective here was to do what amounted to a rights issue so as to raise money without disadvantaging small shareholders who are normally excluded from this kind of placing. 38% of the offer was taken up which, considering it is something of a first, I find encouraging. Possible Acquisitions During the year under review and the first part of 2014 we have reviewed potential acquisitions in Australia, Indonesia, Vietnam and North America. This program is continuing and as soon as there is some conclusive news in this regard it will be announced. As stated previously we continue to look for a project, which is either in production or close to production, and as can be seen from the foregoing we now have the backing to finance such a deal on the right terms. Management Changes On 10th September 2013, Clive Hyman was appointed CFO and Jonathan Harrison retired to the role of non- executive director. Clive had been working with Jonathan for some months prior to the formal appointment and subsequently has proved an excellent addition to the team. In recognition of his contribution thus far, on 7th March 2014 he was granted options over 5 million new ordinary shares in the company to vest as follows: 2,000,000 immediately, 2,000,000 on 7th March 2015, and 1,000,000 on 7th March 2016. I am obviously very pleased that Jonathan has agreed to stay on as a non-exec. He has been a source of wise counsel over many years and I am sure will continue to be so. Check his twitter feed for his new found freedom to travel though! Change of Advisors Beaufort Securities Ltd were appointed as broker on 10th May 2013 and Northland Capital Ltd were appointed as NOMAD on 14th October 2013. The Market for Gold I have been outspoken in my belief in the long term upside potential inherent in the precious metals market, and by extension in gold and silver explorers and developers. I expressed this again this year on stage at the UK Investor show and even issued a Newsletter setting out what I think is happening in the gold market. This is available on the Black Swan Plc website and also on the Wishbone site. In essence, if you had asked me five years ago if LIBOR was rigged I would have scoffed at how impossible that would be to achieve. Now, if you asked me that same question about any western financial market I would, at the very least, hesitate... I have stated since the Quantitative Easing program began in 2008 that this activity would inevitably lead to inflation. It is impossible to inject that amount of money into the financial system, both in the US and Europe and NOT get inflation. All inflation is good for the value of precious metals. It is also good for scarce assets (such as classic cars and houses in certain areas). At the same time as the massive QE programs have been injecting money into the system, Asia, and in particular China, have been buying gold and demanding physical delivery of every ounce they buy. China has not stated its actual gold reserves for many years but has merely left us to guess at the total by releasing snippets of data on gold shipped through Hong Kong and on domestic demand. Any minor analysis of this however shows that their gold holdings must now be substantially above the last admitted figure of 1,054mt. Overall therefore we believe that gold remains a store of value for the future and that Wishbone is well positioned to exploit this to the benefit of our shareholders. Details on the Exploration during the year During the year under review, I am pleased to report highly encouraging sampling results at our two original concessions. The number of gold exploration projects in Queensland has tripled over the past decade. Wishbone's own prospects, together with the recent discoveries in Mount Wright and Welcome are found on the southern borders of the Hodgkinson and Chillago area, which are renowned for their historic vein and alluvial gold deposits. All of these historical mineral occurrences were discovered at the surface and mined to limited depths of less than a hundred meters. The Group's main targets are focused on extensions of some of these shallow indications of mineralisation like those found in the immediate area below the town of Charters Towers (west of Wishbone II and IV), and at Ravenswood (south of Wishbone II) via a large, deep open pit have together produced tons of gold from the early 20th Century to the present from just such extensions of outcrop discoveries. Wishbone's four properties in the Mingela region of Queensland, with all following the strategy of being close to old or existing gold or other mineral mines. Three of the tenements, Wishbone II, III and IV, are highly prospective and come with encouraging initial sampling and geomagnetics. Wishbone II's Oakey Mill and Hanging Valley have shown encouraging results, with the former close to the Mt Wright Gold mine operated by Resolute Resources and currently producing 100k oz/yr. White Mountain, on the other hand, is highly prospective and based on six historic operations, including an old mine that produced 17.4kg Au. High grade Au is indicated by sampling at Clements's Copper historical workings, with a positive CPR suggesting major targets. In October 2013 we announced the results of exploration in the Wishbone II tenement: Hanging Valley Prospect Area -- Latest results strengthen the Board's conclusion that the Hanging Valley represents a priority target that may contain multiple polymetallic veins located perpendicular to the major Alex Hill Shear Zone -- Latest work defined extensions to the previously identified polymetallic DAB vein system as well as a parallel vein with grades of 1.25% copper ('Cu'); 0.12g/t gold ('Au'); 476ppm molybdenum ('Mo'); 262ppm arsenic ('As') -- High grades (including one sample at 25.2 g/t Au) were also returned from rock chip samples on the previously discovered Haughton Bluff Creek West vein system -- Regional stream sediment sampling returned strongly anomalous results up to 27.7ppb Au in the area Oaky Mill Prospect Area -- Significant areas of copper and gold mineralisation discovered by soil sampling -- Samples from 17 outcrops returned grades greater than 1% copper ('Cu') and a further 8 samples returned grades greater than 0.5% with one sample as high as 4.83% Cu and 0.23 g/t Au -- Stream sediment samples defined elevated gold levels up to 11.7ppb Au -- High grade rock chip samples of up to 7.32 g/t Au were taken from an area to the west of the prospect that was previously unexplored Financial Overview At the end of the period under review, Wishbone Gold held cash balances totalling US$ 135,074 (2012: US$589,116). Since then a net US$457,000 has been added to cash as a result of the Open Offer. Costs continue to be tightly controlled to enable as much of the funds available to the Company are spent in the ground for exploration purposes. The Directors are all paid minimal salaries and at the Company's option these can be paid in ordinary shares. During the period under review and during the current year all directors' salaries have been paid by shares in this way. Administrative costs during the year totalled US$ 625,872 (2012: US$281,727), an indication of the increased activities now being undertaken by Wishbone Gold. There is a substantial adjustment in the accounts for the previous year whereby US$537,076 has been moved into the profit and loss account instead of being written off against share premium. Last year the then Baker Tilly audit team in Gibraltar, supported by Baker Tilly in London, told us that this was the correct treatment. That same team now works for Ernst & Young and this year they have decided, supported by Ernst & Young in London, that this treatment was incorrect and accordingly our accounts need to be restated. We will be seeking an adjustment in the audit fee to ensure we are not charged twice for these diametrically opposed pieces of advice. The following events took place after the year end : -- The conditional agreement with GRIT became unconditional on 7th March 2014 and wishbone Gold Plc issued 45,772,693 ordinary shares in exchange for 1,031,360 ordinary shares in GRIT. -- Share options were issued to Clive Hyman, the CFO, on 7th March 2014 over 5 million new ordinary shares in the company to vest as follows: 2,000,000 immediately, 2,000,000 on 7th March 2015, and 1,000,000 on 7th March 2016 -- The company appointed Tabarak Investment Bank as one of its advisors on 2 April 2014 -- The company announced a conditional Placing and Open offer on 4th April, 2014. A total of 33,677,181 new ordinary shares were admitted to trading AIM on 28 April, 2014. The issue was under written by Black Swan FZE, a company in which Richard Poulden has an interest and 980,888 commission shares were paid accordingly representing 3% of the amount underwritten. The total issued and voting share capital after this event is 262,551,235 ordinary shares. The shares allotted and issued to Black Swan FZE are in the process of settlement. The Directors expect to receive the proceeds in the first week of July 2014. Outlook Wishbone has made significant strides towards its objectives this year. We have successfully brought on board a substantial institutional investor, GRIT, who have confidence in our management team. With the fire power and back up of both GRIT and Tabarak Investment Bank we are well placed to bring on board both small and large opportunities. In addition, we have an ever-growing pipeline of potential projects that we are constantly evaluating as well as continuing the exploration of our current portfolio. Finally, I would like to thank the Board, management team and all our advisers for their hard work during the year. Of particular note was the support from all our advisors for getting the open offer completed as this was a far larger and more complex task than it should be: it is this cost and complexity which unfairly dissuades companies from following this route for fundraising. Lastly, I would thank you, our shareholders, for your support. I toyed with ending with some comment about "gold may be in the gutter but is headed..." but after due consideration I think we are better off with Thomas Cromwell: "Out of every ditch a path if only you can see it". Let me assure you that China does not think it is even close to the ditch, let alone in it. RO'D Poulden Chairman Consolidated Income Statement for the year ended 31 December 2013 As restated Year ended 31 Year ended 31 December 2013 December 2012 Notes US$ US$ Revenue - - ------------------------------ Pre-exploration costs expensed 3 (19,026) (2,435) Abortive acquisition costs (17,143) - Administrative costs 5 (625,872) (281,727) ------------------------------ Operating loss 5 (662,041) (284,162) ------------------------------ Loss before taxation (662,041) (284,162) Income tax expense 6 - - AIM listing transaction costs related to existing shares 23 - (537,046) Loss for the financial year attributable to equity holders of the parent (662,041) (821,208) ------------------------------ Loss per share: Basic and diluted (cents) 7 0.374 0.591 ------------------------------ Consolidated Statement of Comprehensive Income for the year ended 31 December 2013 As restated Year ended 31 Year ended 31 December 2013 December 2012 US$ US$ Loss for the year (662,041) (821,208) ------------------------------ Other comprehensive loss Other comprehensive loss to be reclassified to profit or loss in subsequent periods: Exchange differences on translating foreign operations (66,589) (36,010) ------------------------------ Other comprehensive loss for the year, net of tax (66,589) (36,010) ------------------------------ Total comprehensive loss for the year attributable to equity holders of the parent (728,630) (857,218) ------------------------------ Consolidated Statement of Financial Position at 31 December 2013 As restated As at 31 As at 31 December 2013 December 2012 Notes US$ US$ ASSETS Non-current assets Intangible assets 9 408,239 187,080 ------------------------------ Total non-current assets 408,239 187,080 ------------------------------ Current assets Other receivables 10 42,355 25,656 Cash and cash equivalents 11 135,074 589,116 ------------------------------ Total current assets 177,429 614,772 ------------------------------ TOTAL ASSETS 585,668 801,852 ------------------------------ EQUITY AND LIABILITIES Capital and reserves Share capital 12 286,351 267,888 Share premium 1,535,399 1,223,583 Share based payment reserve 29,449 29,449 Retained loss (1,599,931) (937,890) Foreign exchange reserve (99,467) (32,878) ------------------------------ Equity attributable to Shareholders of the Company 151,801 550,152 ------------------------------ Current liabilities Borrowings 14 164,952 58,717 Trade and other payables 15 268,915 192,983 ------------------------------ TOTAL LIABILITIES 433,867 251,700 ------------------------------ TOTAL EQUITY AND LIABILITIES 585,668 801,852 ------------------------------ Company Statement of Financial Position at 31 December 2013 As restated As at 31 As at 31 December 2013 December 2012 Notes US$ US$ ASSETS Non-current assets Investments 8 173,584 173,584 ------------------------------ Total non-current assets 173,584 173,584 ------------------------------ Current assets Other receivables 10 457,601 565,137 Cash 11 97,187 178,086 ------------------------------ Total current assets 554,788 743,223 ------------------------------ TOTAL ASSETS 728,372 916,807 ------------------------------ EQUITY AND LIABILITIES Capital and reserves Share capital 12 286,351 267,888 Share premium 1,535,399 1,223,583 Share based payment reserve 29,449 29,449 Retained loss (1,519,199) (836,431) ------------------------------ Equity attributable to Shareholders of the Company 332,000 684,489 ------------------------------ Current liabilities Borrowings 14 164,952 58,717 Trade and other payables 15 231,420 173,601 ------------------------------ TOTAL LIABILITIES 396,372 232,318 ------------------------------ TOTAL EQUITY AND LIABILITIES 728,372 916,807 ------------------------------ Consolidated Statement of Changes in Equity for the year ended 31 December 2013 Share based Share Share payment capital premium reserve US$ US$ US$ At 01 January 2012 175,229 - - Issue of shares (Note 12) 92,659 1,513,817 - Share issue costs - (827,280) - Issue of warrants - - 29,449 Loss for the year - - - Foreign exchange difference on translation - - - --------------------------------------------- At 31 December 2012(as previously reported) 267,888 686,537 29,449 Reclassification (Note 23) - 537,046 - --------------------------------------------- At 31 December 2013(as restated) 267,888 1,223,583 29,449 Issue of shares (Note 12) 18,463 311,816 - Issue of warrants - - - Loss for the year - - - Foreign exchange on net foreign investment - - - --------------------------------------------- At 31 December 2013 286,351 1,535,399 29,449 --------------------------------------------- Foreign exchange Retained translation Total loss reserve equity --------------- US$ US$ US$ At 01 January 2012 (116,682) 3,132 61,679 Issue of shares (Note 12) - - 1,606,476 Share issue costs - - (827,280) Issue of warrants - - 29,449 Loss for the year (284,162) - (284,162) Foreign exchange difference on translation - (36,010) (36,010) --------------------------------------------- At 31 December 2012(as previously reported) (400,844) (32,878) 550,152 Reclassification (Note 23) (537,046) - - --------------------------------------------- At 31 December 2013(as restated) (937,890) (32,878) 550,152 Issue of shares (Note 12) - - 330,279 Issue of warrants - - - Loss for the year (662,041) - (662,041) Foreign exchange on net foreign investment - (66,589) (66,589) --------------------------------------------- At 31 December 2013 (1,599,931) (99,467) 151,801 --------------------------------------------- Foreign exchange translation reserve records exchanges differences which arise on the translation of the Australian subsidiary's financial statements. Company Statement of Changes in Equity for the year ended 31 December 2013 Share based Share Share payment Retained Total capital premium reserve loss equity US$ US$ US$ US$ US$ At 01 January 2012 175,229 - - (8,877) 166,352 Issue of shares (Note 12) 92,659 1,513,817 - - 1,606,476 Share issue costs - (827,280) - - (827,280) Issue of warrants - - 29,449 - 29,449 Loss for the year - - - (290,508) (290,508) --------------------------------------------------- At 31 December 2012(as previously reported) 267,888 686,537 29,449 (299,385) 684,489 --------------------------------------------------- Reclassification (Note 23) - 537,046 - (537,046) - --------------------------------------------------- At 31 December 2012(as restated) 267,888 1,223,583 29,449 (836,431) 684,489 Issue of shares (Note 12) 18,463 311,816 - - 330,279 Issue of warrants - - - - - Loss for the year - - - (682,768) (682,768) --------------------------------------------------- At 31 December 2013 286,351 1,535,399 29,449 (1,519,199) 332,000 --------------------------------------------------- Consolidated Statement of Cash Flows for the year ended 31 December 2013 As restated Year ended Year ended 31 December 31 December 2013 2012 Notes US$ US$ Cash outflow from operating activities 16 (320,428) (720,799) ------------------------------ Cash flow from investing activities Expenditure on exploration activities (256,165) (71,477) ------------------------------ Net cash used in investing activities (256,165) (71,477) ------------------------------ Cash flow from financing activitiesNet proceeds from issue of shares - 1,345,691 Increase in borrowings 162,271 22,717 ------------------------------ Net cash generated from financing activities 162,271 1,368,408 ------------------------------ Net (decrease)/increase in cash and cash equivalents (414,322) 576,132 Effects of foreign exchange (39,720) 976 Cash and cash equivalents at beginning of the year 589,116 12,008 ------------------------------ Cash and cash equivalents at end of the year 135,074 589,116 ------------------------------ Company Statement of Cash Flows for the year ended 31 December 2013 As restated Year ended Year ended 31 December 31 December 2013 2012 ---------------------------------------------- Notes US$ US$ Cash outflow from operating activities 16 (239,135) (1,190,322) ------------------------------ Cash flow from financing activitiesNet proceeds from issue of shares - 1,345,691 Increase in borrowings 162,271 22,717 ------------------------------ Net cash generated from financing activities 162,271 1,368,408 ------------------------------ Net (decrease)/ increase in cash and cash equivalents (76,864) 178,086 Effects of foreign exchange (4,035) Cash and cash equivalents at beginning of the year 178,086 - ------------------------------ Cash and cash equivalents at end of the year 97,187 178,086 ------------------------------ Notes to the Consolidated Accounts for the year ended 31 December 2013 1. General information The consolidated financial statements of Wishbone Gold Plc for the year ended 31 December 2013 were authorised for issue in accordance with a resolution of the Company's directors on 27th June, 2014. The Company was incorporated in Gibraltar under the name of Wishbone Gold Plc as a public company under the Gibraltar Companies Act. The authorised share capital of the Company is GBP 1,000,000 divided into 1,000,000,000 shares of GBP .001 each. The registered office is located at G1 Haven Court, 5 Library Ramp, Gibraltar. The principal activity of the Company is that of holding company of a group which is engaged in mineral exploration. On 6 December 2010, the Company purchased, by way of a share for share exchange, 100% of the share capital of Wishbone Gold Pty Ltd for the fair value consideration of US$173,584. On 16 July 2012, the Company was admitted to the Alternative Investment Market ("AIM") and a placement of 25,750,000 ordinary shares at GBP .02 per ordinary share was completed as at that time, generating gross proceeds of GBP 515,000. On 20 November 2012, the Company announced the commencement of a non-capital raising American Depositary Receipt ('ADR') Programme. Under the programme, ADRs in the Company's ordinary shares have commenced trading on the Pink OTC Markets Inc. Deutsche Bank AG ('Deutsche') has been appointed the Depositary Bank for the sponsored Level I programme, the intention of which is to broaden Wishbone's global investor base. ADRs are U.S. dollar-denominated shares traded on an American stock exchange issued by depositary banks in the US. Wishbone retains its primary listing on AIM. On 2 July 2013, the Company approved the conversion of GBP 207,222.87 of expenses and debts into 11,841,307 ordinary shares to the Directors at a price of 1.75 p to satisfy debts and expenses of incurred on behalf of the Company. 2. Accounting policies Basis of preparation The accounts of Wishbone Gold Plc and its subsidiary together "the Group" have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") applied in accordance with the provisions of the Gibraltar Companies Act, Gibraltar Companies (Accounts) Act 1999 and Gibraltar (Consolidated Accounts) Act 1999. In accordance with the Gibraltar Companies (Consolidated Accounts) Act 1999, the individual statement of financial position of the Company has been presented as part of the financial statements. The individual statement of comprehensive income has not been presented as part of the financial statements as permitted by Section 10 of the Act. IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC") and there is an on-going process of review and endorsement by the European Commission. The accounts have been prepared on the basis of the recognition and measurement principles of IFRS that are applicable for the year commencing 1 January 2013. The consolidated accounts have been prepared under the historical cost convention. The principal accounting policies set out below have been consistently applied to all periods presented other than changes from the new and amended standards and interpretations effective from 1 January 2013. Going Concern The financial statements have been prepared on the going concern basis, the validity of which is dependent on the discovery, successful further development and ultimate production of mineral reserves and the availability of sufficient finance to bring the reserves to economic maturity and profitability. The Group has incurred trading losses during the financial years ended 31 December 2011 to 31 December 2013. The Directors have reviewed the financial performance of the Group since 31 December 2012 and have considered the Group's cash projections for the 12 months from the date of approval of the financial statements. The projections indicate that the Group has adequate funds to meet its obligations. The Board of Directors is confident that the Group has access to continued financial support from its major shareholders, sufficient to enable the Group to meet its liabilities as and when they fall due for the foreseeable future. Exploration and evaluation costs capitalised as intangible assets amounted to US$408,239 (2012:US$187,080) at the year end. The Directors recognise that the realisation of intangible assets depends on the successful discovery and development of mineral reserves. The Directors have reviewed the proposed work programme for exploration and evaluation assets and on the basis of the encouraging results from the exploration programme and the prospects for raising additional funds as required, consider it appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result if the going concern assumption was no longer deemed appropriate. Changes in accounting policies and disclosures New and amended standards and interpretations The Group applied IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1 when it became effective from 1 January 2013. While the application did not require a restatement of previous financial statements, it did result in a minor change to the presentation of the item included in the Statement of Comprehensive Income. Several other amendments apply for the first time in 2013. However, they do not impact the annual consolidated financial statements of the Group. The nature and the impact of each new standard and/or amendment are described below. Other than the change described below, the accounting policies adopted are consistent with those of the previous financial year. IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1 The amendments to IAS 1 introduce a grouping of items presented in OCI. Items that will be reclassified ('recycled') to profit or loss at a future point in time (e.g., net loss or gain on AFS financial assets) have to be presented separately from items that will not be reclassified (e.g., revaluation of land and buildings). The amendments affect presentation only and have no impact on the Group's financial position or performance. Standards issued but not yet effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective. IFRS 9 Financial Instruments IFRS 9, as issued, reflects the first phase of the IASB's work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to IFRS 9Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. In subsequent phases, the IASB is addressing hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of the Group's financial assets, but will not have an impact on classification and measurements of the Group's financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued. IFRS 10 Consolidated financial statements IFRS 10 builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The Group has yet to assess IFRS 10's full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 January 2014. As a consequence of this change IAS 27 Consolidated and Separate Financial Statements has been amended. IFRS 11 Joint arrangements IFRS 11 considers joint arrangements by focusing on the rights and obligations of the arrangement rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. The Group has yet to assess IFRS 11's full impact and intends to adopt IFRS 11 no later than the accounting period beginning on or after 1 January 2014. As a consequence of this change IAS 28 accounting for associates has been amended to reflect the accounting for joint ventures under the equity method. IFRS 12 Disclosures of interests in other entities Includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The Group has yet to assess IFRS 12's full impact and intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 January 2014. Together with IFRS 10 and 11, IAS 27 and IAS 28 have been revised. In conjunction with the assessment of IFRS 10 and 11, the Group does not consider that the adoption of this standard will have a significant impact on the consolidated financial statements. Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) These amendments which are effective for annual periods beginning on or after 1 January 2014 provide an exception to the consolidation requirement for entities that meet the definition of an investment entity under IFRS 10. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. It is not expected that this amendment would be relevant to the Group, since the sole subsidiary in the Group does not qualify as an investment entity under IFRS 10. IAS 32 Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32 These amendments clarify the meaning of "currently has a legally enforceable right to set-off" and the criteria for non-simultaneous settlement mechanisms of clearing houses to qualify for offsetting. These are effective for annual periods beginning on or after 1 January 2014. These amendments are not expected to be relevant to the Group. IFRIC Interpretation 21 Levies (IFRIC 21) IFRIC 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be anticipated before the specified minimum threshold is reached. IFRIC 21 is effective for annual periods beginning on or after 1 January 2014. The Group does not expect that IFRIC 21 will have material financial impact in future financial statements. IAS 39 Novation of Derivatives and Continuation of Hedge Accounting - Amendments to IAS 39 These amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. These amendments are effective for annual periods beginning on or after 1 January 2014. The Group has not novated its derivatives during the current period. However, these amendments would be considered for future novations. Basis of consolidation The Group's consolidated accounts incorporate the accounts of the Company and its subsidiary prepared to 31 December each year. Control is achieved where the Company has power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the accounts of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions and balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the consolidated accounts. In the parent company financial statements investment in the subsidiary is accounted for at cost. Business combinations and goodwill On acquisition, the assets and liabilities and contingent liabilities of subsidiaries are measured at their fair values at the date of acquisition. Any excess of cost of acquisition over the fair value of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to theincome statement in the period of acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Exploration and evaluation assets Costs arising from exploration and evaluation activities are accumulated separately for each area of interest and only capitalised where such costs are expected to be recovered through successful development, or through sale, or where exploration and evaluation activities have not, at the reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves. Expenditure capitalised comprises direct costs that have a specific connection with a particular area of interest. Capitalised expenditure in respect of areas of interest is written off in the income statement when the above criteria do not apply or when the directors assess that the carrying value may exceed the recoverable amount. Capitalised costs in respect of an area of interest that is abandoned are written off in the period in which the decision to abandon is made. Once production commences, capitalised expenditure in respect of an area of interest will be amortised on a unit of production basis by reference to the reserves of that area of interest. Impairment At each year end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows 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, for which the estimates of future cash flow have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (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 (cash-generating unit) in prior periods. A reversal of the impairment loss is recognised in the income statement immediately. Foreign currencies The consolidated financial statements are presented in United States Dollars, the presentation currency of the Company. The functional currency of the Company up to 16 July 2012 was United States Dollars and became Pounds Sterling from this date which reflecting that the majority of the financing and expenses are denominated in GBP All values are rounded to the nearest United States Dollar. Transactions denominated in a foreign currency are translated into US$ at the rate of exchange ruling at the date of the transaction. At the year end date, monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at that date. All exchange differences are dealt with in the income statement. On consolidation, the assets and liabilities of foreign operations which have a functional currency other than US$ are translated into US$ at foreign exchange rates ruling at the year end date. The revenues and expenses of these subsidiary undertakings are translated at average rates applicable in the period. All resulting exchange differences are recognised as a separate component of equity. Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation are recognised in the consolidated statement of comprehensive income and disclosed as a separate component of equity, such foreign exchange gains or losses are reclassified from equity to the income statement on disposal of the net foreign operation. The same foreign exchange gains or losses are recognised in the stand alone income statements of either the parent or the foreign operation. In the statement of cash flows, cash flows denominated in foreign currencies are translated into the presentation currency of the Group at the average exchange rate for the year or the prevailing rate at the time of the transaction where more appropriate. The closing exchange rate applied at the year end date was AUD$ 1.1268 per US$1 (2012:AUD$0.9640). The average exchange rate applied at the year end date was AUD$1.0362 per US$1 (2012:AUD$0.9658). Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment loss represents the loss incurred by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of loss that is reported to the Board of Directors for the purpose of resource allocation and the assessment of segment performance. When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment assets and liabilities. For this purpose, all assets and liabilities are allocated to reportable segments; (see note 4). Other receivables Other receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment. Provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. The amount of the impairment is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at the effective interest rate. Cash and cash equivalents Cash and cash equivalents comprise on demand deposits held with banks, with an original maturity of three months or less. Derivative financial instruments Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the income statement. Trade and other payables Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest rate method. Convertible loan notes The fair value of the liability component included in short-term borrowings is calculated using a market interest rate for an equivalent non-convertible loan note. The residual amount, if any, representing the value of the equity conversion component, is included in shareholder's equity in other reserves net of deferred income tax. The convertible loan notes issued on 1 December 2010 were converted to 4,219,255 new ordinary shares at 2.5p per share on the listing of the Company on the Alternative Investment Market on the 16 July 2012. Taxation Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date. Deferred taxation is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated accounts. However, if the deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates and laws that have been enacted (or substantively enacted) by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its liabilities. Equity instruments issued by a group entity are recorded at the proceeds received, net of any direct issue costs. Share based payments The Company issued warrants to the previous Nominated Adviser in connection with the listing on AIM. The warrants represent equity-settled share based compensation and vested at the date of grant. The fair value of the warrants has been treated as part of the cost of raising capital and was charged to share premium with a corresponding increase in the share based payment reserve. Share based payments The Company issued warrants to the previous Nominated Adviser in connection with the listing on AIM. The warrants represent equity-settled share based compensation and vested at the date of grant. The fair value of the warrants has been treated as part of the cost of raising capital and was charged to share premium with a corresponding increase in the share based payment reserve. 3. Critical accounting estimates and judgements The critical accounting estimates and judgements made by the Group regarding the future or other key sources of estimation, uncertainty and judgement that may have a significant risk of giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial year are: Critical judgements in applying the Group's accounting policies Going concern The preparation of the financial statements requires an assessment on the validity of the going concern assumption. The validity of the going concern assumption is dependent on the discovery, successful further development and ultimate production of reserves and the availability of sufficient finance to bring the reserves to economic maturity and profitability. Impairment of exploration and evaluation assets At the reporting date, the exploration and evaluation activities have not reached a stage to allow the Group to assess whether any indication of impairment exists and therefore the Board of Directors has not made a formal estimate of the recoverable amount. Parent company statement of financial position - impairment of the investment in and loan to the subsidiary At the reporting date, the subsidiary had net liabilities of US$93,968 (AUD$105,884) (2012:US$48,107 (AUD$46,375)). As noted above, the exploration and evaluation activities conducted by the subsidiary have not reached a stage to allow the Board of Directors to assess whether an indication of impairment exists in respect of the investment in and loan to the subsidiary of US$173,584 (2012:US$173,584) and US$421,281 (2012:US$539,481), respectively. Share for share exchange agreement with GRIT In November 2013, the Company entered into a share for share exchange agreement with GRIT to issue 45,772,693 new ordinary shares in exchange for 1,031,360 ordinary shares in GRIT at an issue price of GBP 1 conditional upon GRIT's shares listing on the London Stock Exchange. The share for share exchange agreement meets the definition of a derivative contract under IAS 39 and has been treated as such. Management has determined that the fair value of the contract cannot be reliably estimated and no value has been attributed as of 31 December 2013. Key accounting estimates Valuation of warrants As described in Note 13, the fair value of the warrants granted was calculated using the Black & Scholes model which requires the input of highly subjective assumptions, including volatility of the share price. Any changes in subjective input assumptions may materially affect the fair value estimate. 4. Segmental analysis Management has determined the operating segments by considering the business from both a geographic and product perspective. For management purposes, the Group is currently organised into one operating division: resource evaluation. This division is the business segment for which the Group reports its segment information internally to the Board of Directors. The Group's operations are predominantly in Australia. 5. Operating loss 2013 2012 US$ US$ Operating loss is stated after charging: Pre-exploration costs 19,026 2,435 Consultancy fees 2,209 10,525 Auditor's remuneration: Fees payable to the Company's auditor for the audit of the Group consolidated financial statements 19,231 16,168 Other assurance services 7,243 - Fees payable to the Subsidiary's auditor for the audit of the Subsidiary: The audit of the Company's subsidiaries pursuant to legislation 9,651 8,823 Accounting and tax compliance 10,295 7,786 Foreign exchange losses 5,482 242 ----------------------------- 6. Income tax expense As restated 2013 2012 US$ US$ Total income tax recognised in the current year - - ------------------------------ The income tax expense for the year can be reconciled to the accounting profit as follows: Loss before taxation (662,041) (821,208) ------------------------------ Loss before taxation multiplied by the standard rate in Gibraltar of 10% (2012: 10%) (66,204) (82,121) Taxation effects of: Losses 66,204 82,121 ------------------------------ - - ------------------------------ The Group has unused tax losses from its subsidiary, which is subject to tax in Australia, of approximately US$435,182 at 31 December 2013 (2012: US$138,148). A related deferred tax asset has not been recognised in the financial information due to the uncertainty surrounding its recoverability. The deferred tax asset can be recovered against suitable future trading profits. Tax losses have no expiry date. 7. Loss per share As restated 2013 2012 US$ US$ Loss for the purposes of basic loss per share being net loss attributable to equity shareholders of the parent (662,041) (821,208) --------------- Loss for the purpose of diluted earnings per share (662,041) (821,208) ------------------------------ Number of shares: Weighted average number of ordinary shares for the purpose of basic and diluted loss per share 176,917,694 138,774,954 ------------------------------ Basic and diluted (cents) (0.37) (0.59) ------------------------------ As there are no dilutive potential ordinary shares, there is no difference between the diluted and the basic loss per share. Note 22 details share transactions post year end which would have significantly affected the ordinary shares outstanding as at 31 December 2013. 8. Investments - Company 2013 2012 US$ US$ At 1 January 173,584 173,584 Additions - - ----------------------------- Net book value at 31 December 173,584 173,584 ----------------------------- Subsidiary The Company's subsidiary undertaking as at the year end and its aggregate amount of capital and reserves and the results for the last relevant financial year were as follows: Total Name of Proportion Nature of capital and Loss for Company Holding held business reserves the year Wishbone 110,000,000 100% Exploration (US$93,968) (US$57,430) Gold Pty ordinary company Ltd shares of AUD$.001 each The above company is incorporated in Australia; the registered office address is PKF, RSL Centre Level 5, 9 Beach Road, Surfer's Paradise QLD 4217, Australia. 9. Intangible assets - Group As restated Exploration and evaluation assets 2013 2012 US$ US$ At 1 January 187,080 114,935 Additions 221,159 72,145 ----------------------------- Net book value 31 December 408,239 187,080 ----------------------------- No production has commenced during the year, therefore the above costs are not subject to amortisation. The Group holds Exploration Permits for Mining ("EPMs") to four tenements which have expiration dates ranging from May 2016 to September 2018. The renewal of the EPMs is for a maximum further period of 5 years. Permits are not automatically renewed but require an application to the Queensland Department of Natural Resources and Mines. 10. Other receivables - Group 2013 2012 US$ US$ Debtors 6,035 - Prepayments 17,262 25,656 Deferred costs 19,058 - ----------------------------- 42,355 25,656 ----------------------------- Other receivables - Company Prepayments 17,262 25,656 Deferred costs 19,058 - Amount owed by subsidiary undertaking 421,281 539,481 ----------------------------- 457,601 565,137 ----------------------------- The amount owed by subsidiary undertaking relates to an interest free loan to Wishbone Gold Pty, repayable on demand. 11. Cash and cash equivalents - Group 2013 2012 US$ US$ Cash at bank 135,074 589,116 ----------------------------- Cash and cash equivalents - Company Cash at bank 97,187 178,086 ----------------------------- 12. Share capital - Group and Company 2013 2012 US$ US$ Authorised 1,000,000,000 (2012: 1,000,000,000) ordinary shares of GBP 0.001 each (US$0.0016) 1,600,000 1,600,000 ----------------------------- Allotted and called up 183,101,361 (2012: 170,987,327) ordinary shares of GBP 0.001 each (US$0.0016) 286,351 267,888 ----------------------------- On 16 July 2012, Wishbone Gold Plc issued 4,219,355 new ordinary shares of GBP 0.001 on conversion of the Black Swan FZE convertible loan notes at 2.5p per share for a total consideration of GBP 105,483.47 as per the terms of the convertible loan note. On 16 July 2012, Wishbone Gold Plc issued 30,017,972 new ordinary shares of GBP 0.001 on conversion of US$651,390 Convertible Loan Notes issued in June 2012 and converted at a discount of 30% to the listing price of 2p per share. On 16 July 2012, Wishbone Gold Plc issued 25,750,000 new ordinary shares of GBP 0.001 at 2p per share for a total consideration of GBP 515,000 on listing on the Alternative Investment Market. On 2 July 2013, the Company approved the conversion of GBP 207,222.87 of expenses and debts into 11,841,307 ordinary shares to the Directors at a price of 1.75p to satisfy debts and expenses incurred on behalf of the Company. On 18 December 2013 the Company approved the conversion of GBP 7,500 of expenses into 272,727 shares at a price of 2.75p. Ordinary shares carry a right to receive notice of, attend, or vote at any Annual General and Extraordinary General meetings of the Company. The holders are entitled to receive dividends declared and paid by the Company. 13. Share based payments The Company issued warrants on 10 July 2012 in connection with its admission to AIM. Each warrant is convertible into one new ordinary share at an exercise price of 2p per share and may be exercised no later than 16 July 2017. Details of the warrants in issue during the year ended 31 December 2013 (2012:1,709,873) are as follows: Number of Exercise price Warrants GBP Outstanding at 31 December 1,709,873 0.02 ----------------------------- Fair value is measured by use of the Black & Scholes model with the assumption of 60% future market volatility and a future interest rate of 5% per annum based on a future normalised economic climate. The expected life used in the model is the time to expiry of the warrants; no adjustments have been made for the effects of non- transferability and exercise restrictions. The fair value of warrants granted as at 31 December 2013 is US$29,449 (2012: US$ 29,449). The warrants were fully vested on the date of issue. 14. Borrowings - Group and Company 2013 2012 US$ US$ Loan from Black Swan FZE 164,952 58,717 ----------------------------- The loan from Black Swan FZE outstanding at 31 December 2012 to the Company was repaid in shares on 2 July 2013, being satisfied by the issue of 2,204,136 new ordinary shares as a price of 1.75p. A new loan facility was entered into in the course of the year from Black Swan FZE for a maximum amount of GBP 150,000. This loan is not convertible into shares and carries an interest charge of 5% per annum, calculated on the principal and interest outstanding each month until redemption. The loan is repayable at any time at the option of Black Swan FZE. GBP 100,000 (US$163,506) of the facility was drawn down on 6 November 2013. The remaining facility of GBP 50,000 (US$83,208) was drawn down on 4 March 2014. The Directors consider that the carrying amount of borrowings approximates to their fair value. 15. Trade and other payables - Group 2013 2012 US$ US$ Trade payables 60,608 47,355 Accruals 208,307 145,628 ----------------------------- 268,915 192,983 ----------------------------- Trade and other payables - Company Trade payables 42,928 45,993 Accruals 188,492 127,608 ----------------------------- 231,420 173,601 ----------------------------- 16. Cash outflow from operating activities - Group As restated 2013 2012 US$ US$ Loss before tax (662,041) (821,208) Non-cash items: Foreign exchange loss 5,482 242 Interest expense 1,234 - Administrative expenses converted into ordinary shares 141,970 - ------------------------------ Operating cash flow before changes in working capital (513,355) (820,966) Increase in receivables (17,226) (540,415) Increase in payables 210,153 640,582 ------------------------------ Net cash outflow from operating activities (320,428) (720,799) ------------------------------ Cash outflow from operating activities - Company As restated 2013 2012 US$ US$ Loss before tax (682,768) (857,554) Non-cash items: Foreign exchange loss 83,641 35,840 Interest expense 1,234 - Administrative expenses converted into ordinary shares 141,970 - ------------------------------ Operating cash flow before changes in working capital (455,923) (791,714) Decrease/(increase) in receivables 29,377 (566,967) Increase in payables 187,411 168,359 ------------------------------ Net cash outflow from operating activities (239,135) (1,190,322) ------------------------------ 17. Staff costs The Group has no direct employees. Staff costs for the year ended 31 December 2013 were US$Nil (2012:US$Nil). 18. Financial instruments The Group's financial instruments comprise cash and cash equivalents, borrowings and items such as trade payables which arise directly from its operations. The main purpose of the financial instruments is to provide finance for the Group's operations. The Group's operations expose it to a variety of financial risks including credit risk, liquidity risk, interest rate risk and foreign currency exchange rate risk. The Directors do not believe the Group is exposed to any material equity price risk. The policies are set by the Board of Directors. Classification of financial instruments All Group financial assets are classified as loans and receivables, and are held at amortised cost. All of the Group's financial liabilities classified as other financial liabilities are also held at amortised cost. The carrying value of all financial instruments approximates to their fair value. Capital management The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group defines capital as being share capital plus reserves. The Board of Directors monitor the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary, by issuing new shares. The Group is not subject to any externally imposed capital requirements. Credit risk The Group's credit risk is primarily attributable to its cash and cash equivalents. However, these are deposited at reputable financial institutions, therefore management do not consider the risk to be significant. The carrying amount of financial assets represents the maximum credit exposure. The maximum credit exposure to credit risk at the reporting date was US$141,109 (2012:US$589,116). The total of other receivables and cash and cash equivalents constitutes all of the financial assets within the IAS 39 category; loans and receivables held by the Group. Interest rate risk The Group's interest bearing assets comprise only cash and cash equivalents and earn interest at a variable rate. The Group has a policy of maintaining debt at fixed rates which are agreed at the time of acquiring debt to ensure certainty of future interest cash flows. The directors will revisit the appropriateness of the policy should the Group's operations change in size or nature. The only Group borrowing at 31 December 2013 was US$164,952 (2012:US$58,717) owing to Black Swan FZE, 5% interest is payable on this borrowing and it is repayable at any time at the option of Black Swan FZE and cannot be converted into shares. No sensitivity analysis for interest rate risk has been presented as any changes in the rates of interest applied to cash balances would have no significant effect on either profit or loss or equity. The Group has not entered into any derivative transactions during the period under review. Liquidity risk The Group actively maintains cash balances that are designed to ensure that sufficient funds are available for operations and planned expansions. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. All of the Group's financial liabilities are measured at amortised cost. Non-derivative financial liabilities, comprising borrowings, trade creditors and accruals of US$268,915 (2012: US$192,983) are repayable within 1-3 months from the year end. These amounts represent the contractual undiscounted cash flows, balances due equal their carrying balances as the impact of discounting is not significant. Foreign currency exchange rate risk The Group undertakes certain transactions in foreign currencies. Hence, exposure to exchange rate fluctuations arises. The Group and Company incurs foreign currency risk on transactions denominated in currencies other than their functional currencies. The principal currency that gives rise to this risk at Group level is United States Dollars. At the year end, the Group's exposure to currencies other than the functional currencies is minimal, accordingly any increase or decrease in the exchange rates relative to the functional currencies would not have a significant effect on the financial statements. 19. Commitments Expenditure commitments In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various authorities. These obligations are subject to periodic renegotiations. These obligations are not provided for in the accounts and as at the year end are payable as follows: 2013 2012 US$ US$ Within one year 111,932 95,781 After one year but not more than five years 407,829 354,340 ---------------------------- 519,761 450,121 ---------------------------- 20. Related party transactions Company A convertible loan note was issued by the Company on 1 December 2010 with a principal amount of GBP 150,000. The loan note was convertible at the option of Black Swan Plc. (the Note holder). Richard Poulden who is the Chairman of the Company is also a director of Black Swan Plc. Under the facility, total drawings amounted to US$Nil (2012:US$219,717) during the year. On 16 July 2012 the US Dollar equivalent of GBP 105,483 was converted into 4,219,355 new ordinary shares of GBP 0.001p per share at a price of 2.5p per share on the listing of the Company on AIM. On 30 June 2013 the balance of US$58,717 was converted into shares as part of the conversion of directors fees and expenses into equity. The Company took of advantage of a new facility granted in 2013 by Black Swan FZE of GBP 150,000 which was drawn down as follows: US$163,506 (GBP 100,000) on 6 November 2013 and US$83,208 (GBP 50,000) on 4 March 2014. The terms of this facility are set out in Note 14 above. As part of the placing and open offer outlined in Note 22 below, Black Swan FZE, a company in which Richard Poulden has an interest, underwrote the issue and 980,888 commission shares were paid accordingly representing 3% of the amount underwritten. On the listing of the Company on AIM on 16 July 2012, the following new ordinary shares of GBP 0.001p were subscribed for by the directors under the pre listing fund raise on Loan Note Agreements at a 30% discount to the share price of 2p per share. Jonathan Harrison 3,456,221 shares for a total consideration of US$75,000 George Cardona 6,912,442 shares for a total consideration of US$150,000 The following table summarises the fees incurred in respect of director's services for the years ended 31 December 2013 and 2012, and the amounts settled by the Company by way of share issues: Professor Richard Jonathan George Alan Michael Poulden(1) Harrison(2) Cardona Gravett Mainelli(3) Total US$ US$ US$ US$ US$ US$ As at 01/01/11 - - - - - - Charge for year 18,300 20,804 9,608 9,608 9,395 67,716 ---------- ----------- --------- --------- ----------- -------- As at 31/12/12 18,300 20,804 9,608 9,608 9,395 67,716 Charge for year 37,937 32,212 19,171 19,171 19,845 147,568 Settled in shares on 30/06/13 37,007 38,293 19,169 19,164 19,169 132,792 ---------- ----------- --------- --------- ----------- -------- As at 31/12/13 19,231 14,723 9,615 9,615 10,076 82,491 ---------- ----------- --------- --------- ----------- -------- 1 Richard Poulden's services are billed by Black Swan FZE, in which Richard Poulden, a director of the Company, has an interest, as consultancy services. In addition, the services of the CFO, Clive Hyman, who is not a director of the Company, are US$ 50,000 per annum and are billed by Black Swan FZE to Wishbone Gold Plc. The Company settled US$12,642 of these fees in ordinary shares to Black Swan FZE, a company in which Richard Poulden has an interest. Travelling expenses of US$101,818 (2012:US$43,377) were incurred on behalf of the Company during the year. A total of US$50,698 (2012:US$41,965) is payable at the year end. US$114,091(2012:US$nil) were settled through the issue of ordinary shares during the year. 2 Jonathan Harrison's services are billed by Easy Business Consulting Limited, in which Jonathan Harrison, a director of the Company, has an interest, for consultancy services. 3 Professor Michael Mainelli's services are billed by Z/Yen Group Limited, in which Professor Michael Mainelli, a director of the Company, has an interest, for consulting services. 21. Ultimate controlling party The directors believe that there is no single ultimate controlling party. 22. Events after the reporting date The following events took place after the year end: -- The conditional agreement with GRIT became unconditional on 7 March 2014 and Wishbone Gold Plc issued 45,772,693 ordinary shares in exchange for 1,031,360 ordinary shares in GRIT at an issue price of GBP 1. -- Share options were issued to Clive Hyman, the CFO, on 7 March 2014 over 5 million new ordinary shares in the Company to vest as follows: 2,000,000 immediately on grant, 2,000,000 on 7 March 2015, and 1,000,000 on 7 March 2016. -- The Company appointed Tabarak Investment Bank as one of its advisors on 2 April 2014. -- The Company announced a conditional Placing and Open offer on 4 April 2014. A total of 33,677,181 new ordinary shares were admitted to trading AIM on 28 April 2014. The issue was underwritten by Black Swan FZE, a company in which Richard Poulden has an interest and 980,888 commission shares were paid accordingly representing 3% of the amount underwritten. The total issued and voting share capital after this event is 262,551,235 ordinary shares. The shares allotted and issued to Black Swan FZE are in the process of settlement. The Directors expect to receive the proceeds in the first week of July 2014. 23. Prior period adjustment A total of US$827,280 transaction costs were deducted from the Share premium account in respect of the admission of the share capital to trading on AIM on 16 July 2012. US$537,046 of these costs should have been allocated to existing shares and accordingly charged to the Consolidated Income Statement. As a result, a prior period adjustment has been made to recognise the U$537,046 in the Consolidated Income Statement and reclassified from the Share premium account to the Retained loss account in the Consolidated and Company Statement of Changes in Equity. 24. Availability of accounts Copies of the full report and accounts will be posted to shareholders in due course and are available to download from the Company's website, www.wishbonegold.com today. -30- FOR FURTHER INFORMATION PLEASE CONTACT: Wishbone Gold plc Richard Poulden Executive Chairman +44 77 0341 2817 OR Wishbone Gold plc Clive Hyman CFO +44 20 7382 8372 +44 78 0263 4163 clive.hyman@wishbonegold.com OR Northland Capital Partners Limited Louis Castro +44 20 7382 1100 OR Northland Capital Partners Limited Lauren Kettle +44 20 7382 1100 OR Beaufort Securities Limited Chris Rourke + 44 20 7382 8300 OR Beaufort Securities Limited Saif Janjua + 44 20 7382 8300 OR Damson PR Abigail Stuart-Menteth +44 7855 526550 INDUSTRY: Environment-Natural Resource Management, Manufacturing and Production-Mining and Metals SUBJECT: ERN -0- Wishbone Gold Plc

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