TIDMORE
RNS Number : 4973J
Orogen PLC
29 June 2017
Orogen plc (formerly Orogen Gold plc)
("Orogen" or "the Company")
Final Results for the year ended 31 December 2016
Orogen plc (AIM:ORE), the cash sell currently finalising the
reverse takeover of e-commerce womenswear brand Sosandar, announces
its audited results for the year ended 31 December 2016.
During the period under review the Company operated mineral
exploration activities. Since the period end it announced that it
would be disposing its assets to become a cash shell. On 26 May
2017, it subsequently announced agreed heads of terms for the
reverse takeover of Thread 35 Limited which operates an e-commerce
womenswear brand under the brand name "Sosandar".
Enquiries:
Orogen plc C/o Walbrook
Adam Reynolds, Non-executive
Chairman
Cairn Financial Advisers
LLP (Nominated Adviser)
Sandy Jamieson / Liam
Murray / Richard Nash +44 (0) 20 7213 0880
Turner Pope Investments
(TPI) Ltd (Broker)
Ben Turner / James Pope +44 (0) 20 3621 4120
Walbrook (Public Relations +44 (0) 20 7933 8780
and Investor Relations) orogen@walbrookpr.com
Paul Cornelius / Nick
Rome
Chairman's Statement
On 21 March 2017, the Company announced that it had completed a
review of its operations and had concluded that it was no longer in
Shareholders' interests for the Company to continue to provide
financial support for its mineral exploration activities. The Board
proposed to dispose of the Company's mineral exploration interests
and change the Company's business strategy. The Company became an
AIM Rule 15 cash shell on 7 April 2017.
On 26 May 2017, the Company announced that it had agreed heads
of terms with Thread 35 Limited ("Thread") to acquire Thread's
entire issued share capital, subject to certain conditions and due
diligence. This acquisition would constitute a reverse transaction
under the AIM rules. Thread operates an e-commerce womenswear brand
under the brand name "Sosandar".
As at the date of this report, discussions are continuing the
disposal of the mineral interests and the other subsidiaries of
Orogen.
I am delighted with the progress we are making with regards to
the due diligence process relating to the acquisition of Thread. I
believe we have identified a very exciting acquisition, with a
strong and experienced management team in a market sector that is
growing rapidly. I look forward to reporting back to shareholders
in due course.
______________
Adam Reynolds
Chairman
Date: 28 June 2017
Strategic Report
REVIEW OF BUSINESS
Mutsk Gold Project, Armenia
Exercise of Earn-in Option
During the year, Orogen completed the earn-in exploration
expenditures of US$2.5 million on the Mutsk property prior to the
required date of 31 August 2016. On completion of the earn-in
expenditure Orogen exercised its option to acquire an 80% interest
in Georaid CJSC, the Armenian registered company which holds the
exploration licence covering the Mutsk property. Orogen received
its 80% interest during the year. An additional GBP125,000 of
exploration expenditure was incurred on the project after the
option exercise date in the period to 31 December 2016. As the
Company's partners on the project have not contributed to this
expenditure as is required to maintain their 20% interest in the
project, Orogen's interest in the project increased to
approximately 82% by the year end.
2016 Exploration Programme
Diamond drilling at the Mutsk gold property recommenced in early
July 2016 with the aim of extending the footprint of the gold
deposit. An initial programme of seven holes totalling 1,015 metres
directed towards the east was completed in early September 2016.
The holes were focussed to the east and south of the main gold zone
at Mutsk. Six of the seven holes completed cut sections of
hydrothermal alteration with associated gold-bearing intervals.
A further step-out drilling programme was undertaken in
October-November 2016 comprising of four step-out diamond drill
holes to assess the potential strike extent of the Mutsk gold
deposit. All holes were drilled at 50 degrees towards the east.
Overall, management was very encouraged by the outcome of a
relatively limited drilling programme in 2016. This has
demonstrated that a substantial gold deposit has been discovered
with open pit potential. The strike length of the Mutsk deposit has
been substantially increased in the current year from 0.5km to
1.3km, with the deposit still open to the south. In addition,
drilling to the east of the original discovery has located further
multiple gold bands, almost doubling the mineralisation footprint
from east to west. There is also potential for additional
discoveries further to the east, as well as at depth. The drilling
has given an indication of the potential scale of the project.
Silverton, Nevada
The Silverton project is located northeast of Tonopah in the
central Pancake Range in Nevada, USA. Over the last three decades
multiple companies have explored the property for gold and
silver.
In June 2016 Orogen signed an agreement with Galileo Resources
plc ("Galileo") pursuant to which Orogen has the right to earn-in
to a 51% interest in the project by way of exploration expenditure
of US$400,000 (the "First Expenditure") within 18 months and
thereafter the possibility to spend an additional US$1,500,000 (the
"Second Expenditure") within 30 months to earn-in a further 24%
interest, in total 75%, in the project. Galileo will have the right
to participate pro rata after the First Expenditure; should it
exercise this right it would retain a 49% equity interest in
Silverton (as opposed to being diluted down to 25%).
In October 2016, Orogen completed a total of 1,274m of reverse
circulation drilling in five holes on two targets within the
Silverton claim area. Holes were targeted primarily at testing the
Silverton Fault Zone at depth beneath previous shallower vertical
drilling that had intercepted moderate to low grade gold and silver
mineralisation over significant widths in the fault hanging-wall.
The Silverton Fault appeared to be a potential feeder to widespread
shallow gold mineralisation.
The holes generally confirmed earlier results, with low-grade
gold occurring in a package of iron-stained and pyrite-bearing
felsitic tuff and quartzite within the hanging-wall sequence above
the fault structure. Three of the four holes aimed at the fault
zone intersected gold mineralisation, however the intercepts were
not enhanced compared to the shallower historic holes. While the
geology was much as expected, no significant gold mineralisation
was encountered.
CHANGE OF NAME AND STRATGEY
While the 2016 drilling results at Mutsk were encouraging in
that they extended the gold deposit footprint, an independent study
of the deposit has concluded that the current resource lies well
below the target of 1,000,000 ounces of gold for the project. The
Company believes that there is scope to add to the resource through
additional exploration and infill drilling, albeit that the overall
gold grade of circa 1 g/t is low and will therefore require
significant additional tonnage to move the project forward to a
commercial mine. As the Company has limited capital resources, and
the Board does not consider that the Company will be able to raise
the relatively significant level of new funds on acceptable terms
to finance the further exploration that is needed to delineate the
target orebody, it has been decided that a sale or joint venture of
this project to a larger and more financially robust entity gives
the project the opportunity to move forward and gives the Company
some expectation of recovering part of its investment.
The drilling results at Silverton in Nevada were disappointing.
A low grade zone has been encountered on the Silverton fault zone,
but there is no sign of gold enhancement at depth. The Board does
not consider that these results provide a strong case for further
drilling.
On 21 March 2017, Orogen announced details of a proposed new
strategy and consequent restructuring of its operations. The Board
has completed a review of its operations and has concluded that it
is no longer in shareholders' interests for the Company to continue
to provide financial support for its mineral exploration
activities. It is therefore seeking to dispose of its interests in
its mineral exploration projects, and to conclude an acquisition
which would constitute a reverse takeover under the AIM Rules. The
Company has decided to cap further expenditure on its existing
mineral exploration projects at GBP75,000 and to put them on care
and maintenance programmes whilst buyers are sought for the
Company's interests in these assets.
As an initial step in the above restructuring, the Company
proposed to undertake a share consolidation and sub-division in
order to increase the price at which the Company's shares trade on
AIM and to enable the Company to raise funds through the issue of
new shares. As part of the proposals that were put to a shareholder
vote on 7 April 2017, up to GBP3.47m of new funds were to be
introduced to the company to implement the new strategy and the
Company's name was to be changed to Orogen plc.
All resolutions put to shareholders were approved at a general
meeting on 7 April 2017. Accordingly, the capital reorganisation
and change of the Company name to Orogen plc were completed.
The decision to cease the Company's mineral exploration
activities represents a fundamental change of business under Rule
15 of the AIM Rules. Following the resolutions being passed, the
Company is deemed to be an AIM Rule 15 cash shell, which means that
the Company must make an acquisition or acquisitions which
constitute a reverse takeover under Rule 14 of the AIM Rules within
six months of the general meeting, otherwise the trading of the
Company's shares on AIM will be suspended. If the Company has not
made an acquisition or acquisitions which constitute a reverse
takeover under Rule 14 of the AIM Rules within six months of such
suspension, the admission of the Company's shares to trading on AIM
will be cancelled.
FINANCIAL AND CORPORATE
The loss for the year amounted to GBP3,083,000 (2015:
GBP890,000). The loss for the year comprises an impairment charge
of GBP2,691,000 (2015: GBP534,000), general and administrative
expenses of GBP375,000 (2015: GBP356,000), share based payment
charge of GBP20,000 (2015: GBP5,000) and finance income of GBP3,000
(2015: GBP5,000). The impairment charge is as a result of a review
performed on the carrying value of the exploration and evaluation
assets related to the Mutsk Gold Project (GBP2,515,000) and
Silverton project (GBP168,000). A further GBP8,000 (2015:
GBP534,000) was impaired on the Deli Jovan project and has been
included in the loss on discontinued operations.
Following the completion of the capital reorganisation and
placing on 7 April 2017 there was a total of 262,728,022 ordinary
shares in issue. The Company raised gross proceeds of approximately
GBP3.47 million, through an open offer, placing and second placing
which added 231,364,011 ordinary shares to the 31,364,011 ordinary
shares in existence after the capital reorganisation.
Immediately following the general meeting on 7 April 2017, Colin
Bird, Edward Slowey, Michael Nolan and Alan Mooney resigned from
the Board and Steven Metcalfe and Mark Collingbourne were appointed
as non-executive directors of the Company with immediate effect. In
addition, the Company appointed Turner Pope Investments (TPI) Ltd
as sole broker with immediate effect.
PRINCIPAL RISKS AND UNCERTAINTIES
The success of the Company is dependent on its ability to
identify appropriate acquisitions and to attract sufficient funding
to successfully develop them. The Company considers that the
principal risks to the achievement of its business plans are as
follows:
-- Implementation risk: The Company's future success is largely
dependent upon its ability to identify and execute a successful
acquisition or acquisitions which constitutes a reverse takeover
under Rule 14 of the AIM Rules. At the date of this report, whilst
the Directors and have identified a number of potential acquisition
opportunities that might be suitable for further consideration, the
Directors have not carried out any due diligence on any acquisition
opportunities or entered into any discussions or agreements in
relation to any opportunity. There can be no assurance that the
Company will be able to identify opportunities that are suitable or
conclude agreements with any target business in the future. In
addition, the Company may face competition for acquisitions from
other organisations which may be larger and/or better funded. The
Company cannot accurately predict how long it will take to deploy
the capital available to it, if at all. Precise timings will depend
on, among other things, the availability of suitable acquisitions,
due diligence, negotiations with counterparties and investment
structuring considerations.
-- Due diligence risk: The due diligence process that the
Company will undertake in connection with the strategy may not
reveal all facts that may be relevant in connection with a proposed
acquisition. Before investing, the Company is expected to conduct
due diligence on a potential acquisition, including valuation
analysis in order to identify material issues which might affect an
investment decision. In many cases, the Company will rely on third
parties and public information to conduct any such due diligence.
The due diligence process may at times be subjective and only
limited information may be available. In addition, the Company
expects that any third party due diligence, feasibility, valuation
or similar analyses will be subject to a number of qualifications
and may be based on assumptions that could prove to be incorrect.
Accordingly, the Company cannot assure investors that the due
diligence investigation that it or any third party will carry out
with respect to any future development will reveal or highlight all
relevant risks associated with such an acquisition. Due diligence
may also be insufficient to reveal all of the past and future
liabilities relating to the operations and objectives of the
target. The Company may lose all or part of the value of such
acquisition, which could have a material adverse effect on the
Company's financial condition and results of operations and which
could reduce the value of the Company's ordinary shares.
-- Financial risk: There is a risk that the Company may incur
substantial legal, financial and advisory expenses arising from
unsuccessful transactions. The net proceeds of the April 2017
placing are likely to be insufficient to fund in full all suitable
acquisitions identified by the Board. Accordingly, the Company
expects to seek additional sources of financing to implement its
strategy. There can be no assurance that the Company will be able
to raise those funds, whether on acceptable terms or at all. If
further financing is obtained by issuing equity securities or
convertible debt securities, existing shareholders may be diluted
and the new securities may carry rights, privileges and preferences
superior to existing ordinary shares. The Company may seek debt
finance to fund all or part of any future acquisition. There can be
no assurance that the Company will be able to raise those debt
funds, whether on acceptable terms or at all. If such funding is
unavailable, the Company may be required to reduce the scope of its
operations or anticipated expansion. If debt financing is obtained,
the Company's ability to raise further finance and its ability to
operate its business may be subject to restrictions imposed by the
providers of such funding.
For and on behalf of the board:
_________________
Adam Reynolds
Director
Date: 28 June 2017
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2016
2016 2015(1)
Notes GBP'000 GBP'000
-------------------------------------- ------ -------- --------
Continuing operations
Revenue - -
Operational costs - -
-------------------------------------- ------ -------- --------
Gross profit - -
General and administrative
expenses (334) (356)
Share based payments 17 (20) (5)
Impairment of exploration and
evaluation assets 9 (2,683) -
Group operating loss 4 (3,037) (361)
Finance income 5 3 5
-------------------------------------- ------ -------- --------
Loss on ordinary activities
before taxation (3,034) (356)
Tax on loss on ordinary activities 7 - -
-------------------------------------- ------ -------- --------
Loss for the year from continuing
operations (3,034) (356)
Discontinued operations
Loss for the year from discontinued
operations 11 (49) (534)
-------------------------------------- ------ -------- --------
Total loss for the year (3,083) (890)
-------------------------------------- ------ -------- --------
Attributable to:
Equity holders of the parent (2,609) (677)
Non-controlling interests (474) (213)
-------------------------------------- ------ -------- --------
Group loss for the year (3,083) (890)
Exchange translation differences 66 (2)
-------------------------------------- ------ -------- --------
Total comprehensive loss for
the year (3,017) (892)
Attributable to:
Owners of the parent (2,543) (679)
Non-controlling interests (474) (213)
-------------------------------------- ------ -------- --------
(3,017) (892)
-------------------------------------- ------ -------- --------
Loss per share:
Loss per share - basic and
diluted, attributable to ordinary
equity holders of the parent
(pence) 8 (10.3) (4.2)
Loss per share - basic and
diluted, from continuing operations
(pence) 8 (10.1) (2.2)
-------------------------------------- ------ -------- --------
1 - The comparatives have been restated to reflect the
reclassification of Deli Jovan Exploration d.o.o. and Orogen Gold
(Serbia) Limited as discontinued operations. The changes in
presentation and the circumstances surrounding them are described
in Note 2 - Accounting policies and Note 11 - Discontinued
operations.
Consolidated statement of financial position
As at 31 December 2016
2016 2015
Notes GBP'000 GBP'000
------------------------------- ------ --------- ---------
Assets
Non-current assets
Exploration and evaluation
assets 9 - 1,577
Property, plant and equipment 12 - 2
------------------------------- ------ --------- ---------
Total non-current assets - 1,579
------------------------------- ------ --------- ---------
Current assets
Trade and other receivables 14 46 22
Cash and cash equivalents 15 342 921
Total current assets 388 943
------------------------------- ------ --------- ---------
Total assets 388 2,522
------------------------------- ------ --------- ---------
Equity and liabilities
Equity
Share capital 16 4,651 4,418
Share premium 16 12,268 12,181
Other reserves 676 625
Retained earnings 18 (17,367) (14,765)
------------------------------- ------ --------- ---------
Equity attributable to owners
of the parent 228 2,459
Non-controlling interests 3 -
------------------------------- ------ --------- ---------
Total equity 231 2,459
------------------------------- ------ --------- ---------
Current liabilities
Trade and other payables 19 157 63
------------------------------- ------ --------- ---------
Total current liabilities 157 63
------------------------------- ------ --------- ---------
Total liabilities 157 63
------------------------------- ------ --------- ---------
Total equity and liabilities 388 2,522
------------------------------- ------ --------- ---------
The financial statements were approved and authorised for issue
by the Board of Directors on 28 June 2017 and were signed on its
behalf by:
_____________________
Adam Reynolds
Director
Company Number: 5379931
Consolidated statement of cash flows
For the year ended 31 December 2016
2016 2015(1)
Notes GBP'000 GBP'000
----------------------------------------- ------ -------- --------
Cash flows from operating activities
Group loss for the year - continuing
operations (3,034) (356)
Group loss for the year - discontinued
operations (49) (534)
----------------------------------------- ------ -------- --------
Group loss for the year (3,083) (890)
Finance income 5 (3) (5)
Share based payments 17 20 5
Profit on disposal of subsidiary 11 (25) -
Impairment of exploration and
evaluation assets 9 2,691 534
Working capital adjustments:
Change in trade and other receivables 91 36
Change in trade and other payables (32) (4)
Net cash flow from operating
activities (341) (324)
----------------------------------------- ------ -------- --------
Cash flow from investing activities
Expenditure on exploration
and evaluation assets and project
earn-ins (568) (292)
Outflow on disposal of subsidiary 11 (4) -
Inflow on acquisition of subsidiary 10 11 -
Bank interest received 5 3 5
----------------------------------------- ------ -------- --------
Net cash flow from investing
activities (558) (287)
----------------------------------------- ------ -------- --------
Cash flow from financing activities
Net proceeds from issue of
equity instruments 16 320 411
----------------------------------------- ------ -------- --------
Net cash flow from financing
activities 320 411
----------------------------------------- ------ -------- --------
Net change in cash and cash
equivalents (579) (200)
Net foreign exchange difference - 3
Cash and cash equivalents at
beginning of year 15 921 1,118
----------------------------------------- ------ -------- --------
Cash and cash equivalents at
end of year 15 342 921
----------------------------------------- ------ -------- --------
1 - The comparatives have been restated to reflect the
reclassification of Deli Jovan Exploration d.o.o. and Orogen Gold
(Serbia) Limited as discontinued operations. The changes in
presentation and the circumstances surrounding them are described
in Note 2 - Accounting policies and Note 11 - Discontinued
operations.
.
Consolidated statement of changes in equity
For the year ended 31 December 2016
Foreign
Share Shares currency Non-controlling
Share Share based to be Retained translation interests
capital premium payment issued earnings reserve Total Total
reserve reserve equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Balance at 1
January
2015 4,222 11,827 592 138 (14,088) 30 2,721 200 2,921
Loss for the
year - - - - (677) - (677) (213) (890)
Foreign
exchange
translation
reserve - - - - - (2) (2) - (2)
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Total
comprehensive
income - - - - (677) (2) (679) (213) (892)
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Other
movements - - - - - - - 13 13
Shares based
payments 17 - - 5 - - - 5 - 5
Issue of share
capital 16 196 354 - (138) - - 412 - 412
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Balance at 31
December
2015 4,418 12,181 597 - (14,765) 28 2,459 - 2,459
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Balance at 1
January
2016 4,418 12,181 597 - (14,765) 28 2,459 - 2,459
Loss for the
year - - - - (2,609) - (2,609) (474) (3,083)
Foreign
exchange
translation
reserve - - - - - 66 66 - 66
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Total
comprehensive
income - - - - (2,609) 66 (2,543) (474) (3,017)
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Acquisition of
a
subsidiary 10 - - - - - - - 477 477
Disposal of a
subsidiary - - - - - (28) (28) - (28)
Transfer of
shares
based payment
reserve - - (7) - 7 - - - -
Shares based
payments 17 - - 20 - - - 20 - 20
Issue of share
capital 16 233 87 - - - - 320 - 320
Balance at 31
December
2016 4,651 12,268 610 - (17,367) 66 228 3 231
--------------- ------ --------- --------- --------- --------- ---------- ------------- -------- ----------------- --------
Share capital is the amount subscribed for shares at nominal
value.
Share premium represents the excess of the amount subscribed for
share capital over the nominal value of those shares net of share
issue expenses.
Share based payments reserve relate to the charge for share
based payments in accordance with International Financial Reporting
Standard 2.
Shares to be issued reserve represents the deferred share
consideration in relation to services performed in 2014 for which
shares were issued in 2015.
Retained earnings represent the cumulative loss of the Group
attributable to equity shareholders.
Foreign currency translation reserve represents the
retranslation of foreign subsidiaries.
Non-controlling interests represent the share of ownership of
subsidiary companies outside the Group.
Notes to the consolidated financial statements
1 General information
Orogen plc (formerly Orogen Gold plc) (the "Company") is a
company incorporated in England and Wales. Details of the
registered office, the officers and advisers to the Company are
presented on the Company
Information page at the end of this report. The Company is
listed on the AIM market of the London Stock Exchange
(ticker: ORE.L).
The principal activity of the Company during the year was gold
and mineral exploration and production in Europe and the USA. At a
general meeting of the Company on 7 April 2017, a change of
strategy was approved by the shareholders of the Company. The
Company is now classified as an AIM Rule 15 cash shell.
2 Significant accounting policies
Basis of preparation
The consolidated financial statements consolidate those of the
Company and its subsidiaries (together the "Group" or "Orogen").
The consolidated financial statements of the Group and the
individual financial statements of the Company are prepared in
accordance with applicable UK law and International Financial
Reporting Standards ("IFRS") as adopted by the European Union and
as applied in accordance with the provisions of the Companies Act
2006. The Directors consider that the financial information
presented in these Financial Statements represents fairly the
financial position, operations and cash flows for the period, in
conformity with IFRS.
Consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiaries and associated
undertakings. All consolidated subsidiaries have a reporting date
of 31 December.
Subsidiaries are all entities over which Orogen plc has the
power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting
rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Company. They are de-consolidated from the date
that control ceases.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of
the cost of acquisition over the fair value of the Group's share of
the identifiable net assets acquired is recorded as goodwill. If
the cost of acquisition is less than the fair value of the net
assets of the subsidiary acquired, the difference is recognised
directly in the income statement.
Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are also eliminated but considered an impairment indicator
of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the
policies adopted by the Group.
Comparative Information
There have been a number of developments which have changed the
presentation of the comparative information and these are
summarised as follows:
- On 8 September 2016, a liquidation process commenced for Deli
Jovan Exploration d.o.o. a 60% owned Serbian subsidiary of the
Company. All results and cash flows of the subsidiary for the year
ended 31 December 2015 have been reclassified as discontinued.
- Orogen Gold (Serbia) Limited holds the Group's 60% interest in
Deli Jovan Exploration d.o.o. It doesn't have any other activities.
All results and cash flows of the subsidiary for the year ended 31
December 2015 have been reclassified as discontinued.
- The segmental information for 31 December 2015 has been
restated to include the above changes within discontinued
operations.
Except as indicated above, the Group financial statements have
been prepared on a basis consistent with that reported for the year
ended 31 December 2015.
Functional and presentation currency
Items included in the financial statements of the Group are
measured using the currency of the primary economic environment in
which the entity operates (the functional currency). The financial
statements are presented in Pounds Sterling (GBP), which is the
Group's presentation currency and the Company's functional
currency.
Foreign currency transactions are translated into the functional
currency using exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
statement.
The results and financial position of all Group entities (none
of which has the currency of a hyper-inflationary economy) that
have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
-- assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
-- income and expenses for each income statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
-- all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of
such investments, are taken to shareholders' equity. When a foreign
operation is partially disposed of or sold, exchange differences
that were recorded in equity are recognised in the income statement
as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the
previous financial period. New standards and amendments to IFRS
effective as of 1 January 2016 have been reviewed by the Group.
These standards and amendments principally relate to clarifications
and presentation and there has been no material impact on the
financial statements as a result. The new standards include:
-- Amendments to IAS 16 and IAS 38: Clarification of Acceptable
Methods of Depreciation and Amortisation
-- Amendments to IFRSs: Annual Improvements 2012-2014 Cycle
-- Disclosure Initiative (Amendments to IAS1)
-- Amendment to IAS27: Equity Methods in Separate Financial Statements
-- Amendment to IFRS 11: Accounting for Acquisitions of Interest in Joint Ventures
-- Clarification of Acceptable Methods of Depreciation and Amortisation: Disclosure Initiative
-- Amendments to IFRS 10, IFRS 12 and IAS 28: Investment
Entities: Applying the Consolidation Exception.
Standards issued but not yet effective
There were a number of standards and interpretations which were
in issue at 31 December 2016 but were not effective at 31 December
2016 and have not been adopted for these Financial Statements. The
Directors have assessed the impact of these accounting changes on
the Company.
The new standards include:
IFRS 9 Financial Instruments (2)
IFRS 15 Revenue from Contracts with
Customers (2)
IFRS 16 Leases(3)
Improvements to IFRSs Annual Improvements 2014-2016
Cycle (2, 3)
Amendments to IAS Transfers of Investment Property
40 (2)
Amendments to IAS Recognition of deferred tax
12 assets for unrealised losses
(1)
Amendments to IAS Disclosure Initiative (1)
7
Clarifications to Revenue from Contracts with
IFRS 15 Customers (2)
Amendments to IFRS Classification and Measurement
2 of Share-based Payment Transactions
(2)
IFRIC 23 Uncertainty over Income Tax
Treatments (3)
IFRIC 22 Foreign Currency Transactions
and Advance Consideration (2)
(1) Effective for annual periods beginning on or after 1 January
2017
(2) Effective for annual periods beginning on or after 1 January
2018
(3) Effective for annual periods beginning on or after 1 January
2019
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of Financial Statements in conformity with IFRS
requires management to make estimates and judgements that affect
the reported amounts of assets and liabilities as well as the
disclosure of contingent assets and liabilities at the period end
and the reported amounts of revenues and expenses during the
reporting period. Estimates and judgements are continually
evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be
reasonable under the circumstances.
The Group's accounting policy descriptions set out the areas
that involve significant estimation, uncertainty and critical
judgement. The most significant of which are exploration and
evaluation expenditure, business combinations and impairment of
intangible assets and investments.
Principal accounting policies
The principal accounting policies are summarised below. They
have been consistently applied throughout the period covered by the
Financial Statements.
Business combinations
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date fair
value and the amount of any non-controlling interest in the
acquiree. In the consolidated Financial Statements, acquisition
costs incurred are expensed and included in general and
administrative expenses.
Exploration and evaluation assets
Exploration and evaluation assets are measured using the cost
method of recognition. Exploration and evaluation expenditure is
capitalised and recognised as an exploration and evaluation asset
when the rights to an area of interest are current, the
expenditures are expected to be recouped through successful
development and exploitation activities and the operations are
current and have not reached such a stage that a reasonable
assessment of recoverable reserves can be made.
Exploration and evaluation expenditure includes:
-- acquisition of rights to explore
-- researching, analysing and collating of historical data
-- exploratory drilling, sampling and trenching
-- evaluation of technical feasibility and commercial viability
-- administrative and general overheads related to an area of interest
The application of the Group's accounting policy for exploration
and evaluation expenditure requires judgement in determining
whether it is likely that future economic benefits are likely
either from future exploration or sale or where activities have not
reached a stage which permits a reasonable assessment of the
existence of reserves. The deferral policy requires management to
make certain estimates and assumptions about future events or
circumstances, in particular whether an economically viable
extraction operation can be established. Estimates and assumptions
made may change if new information becomes available. If, after
expenditure is capitalised, information becomes available
suggesting that the recovery of expenditure is unlikely, the amount
capitalised is written off in the statement of profit or loss and
other comprehensive income in the period when the new information
becomes available.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and any accumulated impairment losses. Property, plant
and equipment comprises office and field equipment and freehold
land. Freehold land is not depreciated. Office and field equipment
are depreciated over 3 to 10 years.
Equity
Equity instruments issued by the Company are recorded at the
value of the proceeds received, net of direct issue costs,
allocated between share capital and share premium.
Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Group's share of the net identifiable
assets of the acquired subsidiary or associate at the date of
acquisition. Goodwill on acquisitions of subsidiaries is included
in 'intangible assets'. Separately recognised goodwill is tested
annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed.
Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose
of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are
expected to benefit from the business combination in which the
goodwill arose. The Group allocates goodwill to each business
segment in each country in which it operates.
Impairment of non-financial assets
At each statement of financial position date, the Company
reviews the carrying amounts of its investments 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 Company
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. An intangible asset with an indefinite
useful life is tested for impairment annually and whenever there is
an indication that the asset may be impaired.
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 flows 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 years. A reversal of
an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
Taxation
Income tax
Income tax expense represents the sum of the tax currently
payable and deferred tax. The tax currently payable is based on
taxable profit for the year. Taxable profit differs from profit as
reported in the same income statement because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group and Company's liability for current tax is calculated using
tax rates that have been enacted or substantively enacted by the
statement of financial position date.
Deferred tax
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from goodwill
or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax is reviewed at each
statement of financial position date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset
realised. Deferred tax is charged or credited to the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group and Company intends to
settle its current tax assets and liabilities on a net basis.
Share based compensation
The fair value of the employee and suppliers services received
in exchange for the grant of the options is recognised as an
expense. The total amount to be expensed over the vesting year is
determined by reference to the fair value of the options granted,
excluding the impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-market
vesting conditions are included in assumptions about the number of
options that are expected to vest. At each statement of financial
position date, the entity revises its estimates of the number of
options that are expected to vest. It recognises the impact of the
revision to original estimates, if any, in the income statement,
with a corresponding adjustment to equity.
The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and
share premium when the options are exercised.
The fair value of share based payments 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 and is selected based on past experience,
future expectations and benchmarked against peer companies in the
industry.
Provisions
Provisions are recognised when the Group and Company has a
present obligation as a result of a past event, and it is probable
that the Group and Company will be required to settle that
obligation. Provisions are measured at the Directors' best estimate
of the expenditure required to settle the obligation at the
statement of financial position date, and are discounted to present
value where the effect is material.
Financial instruments
Non-derivative financial instruments comprise investments in
equity and debt securities, trade and other receivables, cash and
cash equivalents, loans and borrowings, and trade and other
payables. Non-derivative financial instruments are recognised
initially at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transactions
costs, except as described below. Subsequent to initial recognition
non-derivative financial instruments are measured as described
below.
A financial instrument is recognised when the Group becomes a
party to the contractual provisions of the instrument. Financial
assets are derecognised if the Group's contractual rights to the
cash flows from the financial assets expire or if the Group
transfers the financial assets to another party without retaining
control or substantially all risks and rewards of the asset.
Regular purchases and sales of financial assets are accounted for
at trade date, i.e. the date that the Group commits itself to
purchase or sell the asset. Financial liabilities are derecognised
if the Group's obligations specified in the contract expire or are
discharged or cancelled.
Fair values
The carrying amounts of the financial assets and liabilities
such as cash and cash equivalents, receivables and payables of the
Group and Company at the statement of financial position date
approximated their fair values, due to relatively short term nature
of these financial instruments.
Trade payables and other non-derivative financial
liabilities
Trade payables and other creditors are non-interest bearing and
are measured at cost.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities
on the statement of financial position.
3 Segmental information
In the opinion of the Directors, during the year, the Group had
one class of business being the exploration for, and development
and production of gold and other related activities.
The Group's primary reporting format was determined by the
geographical segment according to the location of the exploration
asset. At 31 December 2016, there were four geographic reporting
segments: Armenia and USA involved in Gold exploration and
development, discontinued operation in Serbia and the United
Kingdom & Ireland being the head and administrative
offices.
Segment information of the business for the year ending 31
December 2016 is presented below:
Discontinued
UK & Ireland USA Armenia operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------------- -------- ---------- ------------- --------
Income statement
General and administrative
expenses (314) - (20) (41) (375)
Share based payments (20) - - - (20)
Impairment charge - (168) (2,515) (8) (2,691)
Group operating loss (334) (168) (2,535) (49) (3,086)
Finance revenue 3 - - - 3
---------------------------- --------------- -------- ---------- ------------- --------
Group loss before
tax (331) (168) (2,535) (49) (3,083)
---------------------------- --------------- -------- ---------- ------------- --------
Assets and liabilities
Segment assets 371 - 17 - 388
Segment liabilities (124) - (33) - (157)
---------------------------- --------------- -------- ---------- ------------- --------
247 - (16) - 231
---------------------------- --------------- -------- ---------- ------------- --------
Segment information of the business for the year ending 31
December 2015 is presented below:
Discontinued
UK & Ireland USA Armenia operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------------- -------- ---------- ------------- --------
Income statement
General and administrative
expenses (356) - - - (356)
Share based payments (5) - - - (5)
Impairment charge - - - (534) (534)
Group operating loss (361) - - (534) (895)
Finance revenue 5 - - - 5
---------------------------- --------------- -------- ---------- ------------- --------
Group loss before tax (356) - - (534) (890)
---------------------------- --------------- -------- ---------- ------------- --------
Assets and liabilities
Segment assets 940 - 1,577 5 2,522
Segment liabilities (47) - - (16) (63)
---------------------------- --------------- -------- ---------- ------------- --------
893 - 1,577 11 2,459
---------------------------- --------------- -------- ---------- ------------- --------
4 Operating loss
2016 2015
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Operating loss is stated after charging/(crediting):
Directors' emoluments 125 172
Services provided by the Company's auditors:
- Audit fees and expenses 16 16
- Tax compliance 2 2
- Other services pursuant to legislations - -
Foreign currency (gain)/loss (9) 3
------------------------------------------------------ -------- --------
5 Finance income
2016 2015
GBP'000 GBP'000
------------------------ -------- --------
Bank interest received 3 5
------------------------ -------- --------
6 Employees
2016 2015
GBP'000 GBP'000
------------------------------------------- -------- --------
Aggregate Directors' emoluments including
consulting fees 125 172
Wages and salaries 34 -
Social security costs 13 -
------------------------------------------- -------- --------
Total 172 172
------------------------------------------- -------- --------
Including the Directors, the Group's average number of employees
during the year was 8 (2015: 5). Including the Directors, the
Company's average number of employees during the year was 5 (2015:
5).
7 Income tax benefit / (expense)
No corporation tax charge arises in the year ended 31 December
2016 and the year ended 31 December 2015. A reconciliation of the
expected tax benefit computed by applying the tax rate applicable
in the primary jurisdiction, the UK, to the loss before tax to the
actual tax credit is as follows:
Group Company
------------------ ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- -------- -------- --------
Loss on ordinary activities
before taxation (3,083) (890) (2,588) (346)
Tax at the UK corporation
tax rate of 20% (617) (178) (518) (69)
Expenses not deductible for
tax purposes 539 107 477 40
Losses unutilised 64 49 41 29
Differences in overseas taxation
rates 14 22 - -
Tax on loss on ordinary activities - - - -
------------------------------------ -------- -------- -------- --------
The Group has estimated tax losses of GBP3,185,000 (2015:
GBP2,798,000) to carry forward against future taxable profits. The
deferred tax asset on these tax losses at 20% amounts to GBP637,000
(2015: GBP560,000) and has not been recognised due to the
uncertainty of the recovery. Due to the post year end fundamental
change in the Company's business following the exit of the mineral
exploration industry, tax losses carried forward may not be fully
available for use against the future profits of the Group.
8 Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number
of ordinary shares in issue during the period:
2016 2015
----------------------------------------- ----------- -----------
Loss after tax attributable to
equity holders of the parent from
continuing operations (GBP'000) (2,560) (356)
Loss after tax attributable to
equity holders of the parent from
discontinued operations (GBP'000) (49) (321)
----------------------------------------- ----------- -----------
Loss after tax attributable to
equity holders of the parent (GBP'000) (2,609) (677)
Weighted average number of ordinary
shares in issue 25,702,809 16,007,144
Fully diluted average number of
ordinary shares in issue 25,702,809 16,007,144
----------------------------------------- ----------- -----------
Basic and diluted loss per share
(pence) - continuing operations (10.1) (2.2)
----------------------------------------- ----------- -----------
Basic and diluted loss per share
(pence) - discontinued operations (0.2) (2.0)
----------------------------------------- ----------- -----------
Basic and diluted loss per share
(pence) (10.3) (4.2)
----------------------------------------- ----------- -----------
(A) The ordinary share numbers at 31 December 2016, have been
adjusted by a factor of 250 to take into account the 250 to 1 share
consolidation that took place on 7 April 2017.
Basic and diluted earnings per share are the same, since where a
loss is incurred the effect of outstanding share options and
warrants is considered anti-dilutive and is ignored for the purpose
of the loss per share calculation. The share options outstanding as
at 31 December 2016 totalled 380,000,000 (2015: 380,000,000) and
are potentially dilutive.
9 Exploration and evaluation assets
GROUP COMPANY
----------------------------------------- ------------------
USA Armenia Serbia Total USA Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- ---------- --------- -------- -------- --------
Cost
At 1 January 2015 - 1,311 5,520 6,831 - -
Additions - 266 34 300 - -
------------------------- -------- ---------- --------- -------- -------- --------
At 31 December 2015 - 1,577 5,554 7,131 - -
------------------------- -------- ---------- --------- -------- -------- --------
Impairment
At 1 January 2015 - - 5,020 5,020 - -
Impairment charge - - 534 534 - -
------------------------- -------- ---------- --------- -------- -------- --------
At 31 December 2015 - - 5,554 5,554 - -
------------------------- -------- ---------- --------- -------- -------- --------
Carrying value 31
December 2015 - 1,577 - 1,577 - -
------------------------- -------- ---------- --------- -------- -------- --------
Cost
At 1 January 2016 - 1,577 5,554 7,131 - -
Additions 168 938 8 1,114 168 168
Discontinued operations - - (5,562) (5,562) - -
------------------------- -------- ---------- --------- -------- -------- --------
At 31 December 2016 168 2,515 - 2,683 168 168
Impairment
At 1 January 2016 - - 5,554 5,554 - -
Impairment charge 168 2,515 8 2,691 168 168
Discontinued operations - - (5,562) (5,562) - -
At 31 December 2016 168 2,515 - 2,683 168 168
Carrying value 31
December 2016 - - - - - -
------------------------- -------- ---------- --------- -------- -------- --------
As part of the annual impairment review of asset carrying values
a charge of GBP2,515,000 (2015: nil) was recorded in relation to
the Mutsk project in Armenia.
As part of the annual impairment review of asset carrying values
a charge of GBP168,000 (2015: nil) was recorded in relation to the
Silverton project in USA. During the year, the Company decided to
terminate the Deli Jovan project and relinquish the exploration
permit.
Annual Impairment Review
The Group's policy in relation to exploration and evaluation
expenditure is to capitalise the expenditure when the rights to an
area of interest are current, the expenditures are expected to be
recouped through successful development and exploitation activities
and the operations are current and have not reached such a stage
that a reasonable assessment of recoverable reserves can be
made.
The Company believes that sufficient information was available
at the reporting date (including disappointing exploration results,
no substantive expenditure forecast on the assets and a depressed
share price) which suggested that the recovery of expenditure on
the Mutsk and Silverton areas of interest was unlikely, therefore
the amounts which were capitalised in respect of these assets were
written off to the statement of comprehensive income.
After year end, at a General Meeting of the Company on 7 April
2017, shareholders approved a change of strategy and an exit from
mineral exploration. The Company has decided to cap further
expenditure on its existing mineral exploration projects at
GBP75,000 and to put them on care and maintenance programmes whilst
buyers are sought for the Company's interests in these assets.
As a result of the above the Directors determined that there
were facts and circumstances which indicated at year end that the
Group's assets were impaired and accordingly the assets were
written off. The actions undertaken by the Company since the year
end reflect the resulting impact of the underlying issues which had
begun to affect the Group prior to the year end.
10 Business combinations and non-controlling interests
Acquisition of Georaid CJSC
On 31 August 2016, the Group earned a 80% interest in the
Armenia company Georaid CJSC following the completion of US$2.5
million (GBP1,907,000) exploration financing of the Mutsk gold
project. At the date of acquisition non-controlling interests have
been measured at their proportionate interest in the book values of
the subsidiary net assets as adjusted for the accounting policies
of the Group (the total subsidiary net assets after accounting
policy and fair value adjustments was GBP2,384,000).
Assets acquired and liabilities assumed:
At date
of acquisition
GBP'000
----------------------------------- ----------------
Assets
Exploration and evaluation assets
(see note below) 2,390
Cash and cash equivalents 11
Trade and other receivables 18
Total assets 2,419
----------------------------------- ----------------
Liabilities
Trade and other payables 35
----------------------------------- ----------------
Total liabilities 35
----------------------------------- ----------------
Total net assets 2,384
Non-controlling interest 477
----------------------------------- ----------------
Purchase consideration 1,907
----------------------------------- ----------------
At the acquisition date a fair value uplift was made to the
exploration and evaluation assets, which resulted in a total value
of GBP2,390,000 at the acquisition date, to reflect the value of
the Group's investment in the Mutsk gold project.
An additional GBP125,000 of exploration expenditure was incurred
to 31 December 2016 on the Mutsk gold project after the 80% earn-in
date. As the Company's partners on the project have not contributed
to this expenditure as is required to maintain their 20% interest
in the project, Orogen's interest in the project increased to
approximately 82% by the year end. Shares in Georaid CJSC for the
increased interest in the project have not yet been issued to
Orogen.
11 Discontinued operations
Serbian gold exploration operations
On 8 September 2016, a liquidation process commenced for Deli
Jovan Exploration d.o.o. a 60% owned Serbian subsidiary of the
Company. All results and cash flows of the subsidiary for the year
ended 31 December 2015 have been reclassified as discontinued.
Orogen Gold (Serbia) Limited holds the Group's 60% interest in
Deli Jovan Exploration d.o.o. It doesn't have any other activities.
All results and cash flows of the subsidiary for the year ended 31
December 2015 have been reclassified as discontinued.
Armenia and USA gold exploration operations
On 21 March 2017, the Company announced its proposals to dispose
of the Company's mineral exploration interests and change the
Company's business strategy. At a general meeting on the 7 April
2017, the Company's shareholders approved resolutions for a change
of strategy resulting in the Company being classified as an AIM
Rule 15 cash shell. The Company has decided to cap further
expenditure on its existing mineral exploration projects at
GBP75,000 and to put them on care and maintenance programmes whilst
buyers are sought for the Company's interests in these assets. The
Board does not believe that all the conditions to classify the
Armenian and USA gold exploration operations as discontinued and
available for sale were met at 31 December 2016. Therefore, these
operations have been included as continuing at 31 December
2016.
Results for discontinued operations:
As indicated above, the liquidation process for Deli Jovan
Exploration d.o.o. commenced in 2016. As a consequence of this, the
results and cash flows of the subsidiary and its holding Company,
Orogen Gold (Serbia) Limited, for the year ended 31 December 2015
have been reclassified as discontinued.
Group Company
------------------ ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- -------- --------
Revenue - - 3 11
General and administrative
costs (41) - (66) -
Impairment charges (8) (534) - (200)
Loss on discontinued operations
before tax (49) (534) (63) (189)
Tax - - - -
--------------------------------- -------- -------- -------- --------
Loss for the period from
discontinued operations (49) (534) (63) (189)
--------------------------------- -------- -------- -------- --------
Loss per share from discontinued operations:
2016 2015
Pence Pence
---------------------------------------------- ------ ------
Loss per share from discontinued operations:
Basic and diluted (A) (0.2) (2.0)
---------------------------------------------- ------ ------
(A) The share number used in the LPS calculation is the post
period end share consolidation amount - see note 16 for
details.
The net cash flows incurred are as follows:
Group
2016 2015
GBP'000 GBP'000
--------------------------- -------- --------
Operating (11) (14)
Investing (4) (26)
Financing - -
Net cash (outflow)/inflow (15) (40)
--------------------------- -------- --------
12 Property, plant and equipment - Group
Office
Freehold and
Land Field Total
Equipment
GBP'000 GBP'000 GBP'000
---------------------------- ----------- ------------ --------
Cost
At 1 January 2015 2 2 4
Additions - - -
---------------------------- ----------- ------------ --------
At 31 December 2015 2 2 4
---------------------------- ----------- ------------ --------
Accumulated depreciation
At 1 January 2015 - 1 1
Additions - 1 1
---------------------------- ----------- ------------ --------
At 31 December 2015 - 2 2
---------------------------- ----------- ------------ --------
Carrying value 31 December
2015 2 - 2
---------------------------- ----------- ------------ --------
Cost
At 1 January 2016 2 2 4
Discontinued operations (2) (2) (4)
---------------------------- ----------- ------------ --------
At 31 December 2016 - - -
Accumulated depreciation
At 1 January 2016 - 2 2
Discontinued operations - (2) (2)
At 31 December 2016 - - -
Carrying value 31 December
2016 - - -
---------------------------- ----------- ------------ --------
13 Non-current assets
Investments in subsidiaries and associates:
Group Company
-------------------- ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- -------- --------
Cost as at 1 January - - 9,102 8,689
Additions -- -- -234 413
---------------------------- --------- --------- -------- --------
Cost at 31 December -- -- -9,336 9,102
---------------------------- --------- --------- -------- --------
Impairment as at 1 January - - 7,039 6,839
Impairment charge - - 2,197 200
---------------------------- --------- --------- -------- --------
Impairment at 31 December - - 9,236 7,039
---------------------------- --------- --------- -------- --------
Carrying value as at 31
December - - 100 2,063
---------------------------- --------- --------- -------- --------
Break down of carrying value of investment:
Group Company
------------------- ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- -------- -------- --------
Emotion Fitness Mag Kft
- investment - 339 - 339
Emotion Fitness Mag Kft
-impairment - (339) - (339)
Medavinci Gold Limited -
investment - - 3,370 3,370
Medavinci Gold Limited -
impairment - - (3,370) (3,370)
-------------------------- --------- -------- -------- --------
Investments - - - -
-------------------------- --------- -------- -------- --------
Medavinci Gold Limited -
loan - - 5,627 5,393
Medavinci Gold Limited -
loan provision - - (5,527) (3,330)
-------------------------- --------- -------- -------- --------
Loans to subsidiaries - - 100 2,063
-------------------------- --------- -------- -------- --------
Total non-current assets -- -- -100 2,063
-------------------------- --------- -------- -------- --------
As part of the annual impairment review of asset carrying values
a charge of GBP2,197,000 (2015: GBP200,000) was recorded in
relation to the Company's intercompany receivable from Medavinci
Gold Limited. This follows the review of the carrying value of all
exploration assets (see note 9). Medavinci Gold Limited operates as
a holding company of Orogen Gold Limited an Irish registered
company with gold exploration interests in Armenia.
Emotion Fitness Mag Kft
The Group's investment in Emotion Fitness Mag Kft (a Hungarian
registered company) represents a 47% interest in that company.
Emotion Fitness Mag Kft discontinued the operation of a fitness
centre from its Budapest premises in 2011. The Directors consider
it is unlikely that the Company will recover any value from this
investment and accordingly have fully impaired the value of the
investment.
% Holding(1)
Subsidiary companies Holding Type of % Holding(1)
Incorporation share held 2016 2015
------------------------ ----------------- ---------- -------------- ------------- -------------
Deli Jovan Exploration Ordinary
d.o.o. Serbia Indirect shares - 60
Ordinary
Medavinci Gold Limited UK Direct shares 100 100
Emotion Fitness Ordinary
Limited UK Direct shares 100 100
Ordinary
Orogen Gold Limited Ireland Indirect shares 100 100
Orogen Gold (Serbia) Ordinary
Limited Ireland Indirect shares 100 100
Orogen Gold (Armenia) Ordinary
Limited Ireland Indirect shares 100 100
Georaid CJSC Indirect Ordinary
Armenia shares 80 -
------------------------ ----------------- ---------- -------------- ------------- -------------
(1) Percentage of share type held and overall voting rights
List of registered offices:
Company Registered Office Address
----------------------- -------------------------------------
Deli Jovan Exploration Ustanička 128 a, Beograd-Vo
d.o.o. dovac
Medavinci Gold Finsgate, 5-7 Cranwood Street,
Limited London, EC1V 9EE
Emotion Fitness Finsgate, 5-7 Cranwood Street,
Limited London, EC1V 9EE
Orogen Gold Limited 18 Fitzwilliam Place, Dublin
2
Orogen Gold (Serbia) 18 Fitzwilliam Place, Dublin
Limited 2
Orogen Gold (Armenia) 18 Fitzwilliam Place, Dublin
Limited 2
Georaid CJSC 8H.Qochar,apt.16, Yerevan
----------------------- -------------------------------------
14 Trade and other receivables
Group Company
------------------ ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- -------- -------- --------
VAT recoverable 15 16 10 5
Other receivables and prepayments 31 6 22 4
Receivables from Group Companies - - 30 52
----------------------------------- -------- -------- -------- --------
Trade and other receivables 46 22 62 61
----------------------------------- -------- -------- -------- --------
The Directors consider that the carrying amount of trade and
other receivables approximates their fair value.
15 Cash and cash equivalents
Group Company
------------------ ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- -------- --------
Cash at bank 342 921 64 301
--------------------------- -------- -------- -------- --------
Cash and cash equivalents 342 921 64 301
--------------------------- -------- -------- -------- --------
16 Share capital
Details of ordinary shares issued are in the table below:
Ordinary Shares (GBP0.001)
------------------------------------------------------------------------------------------ ---------
Total Total
Share Share
Issue Capital Premium
Date Number of Price GBP'000 GBP'000
Details shares GBP
----------------------------- --------------------- -------------- --------- --------- ---------
At 1
Jan 2015 Opening Balance 3,560,432,183 356 11,827
27 Jan Mutsk continuation
2015 notice 110,886,804 0.000597 11 55
25 Mar Drill for equity
2015 agreement 36,350,350 0.002 4 69
30 Oct Share placing
2015 - GBP450,000 1,800,000,000 0.00025 180 230
At 31
Dec 2015 5,507,669,337 551 12,181
----------------------------- --------------------- -------------- --------- --------- ---------
9 Aug Share placing
2016 - GBP350,000 2,333,333,333 0.00015 233 87
At 31
Dec 2016 7,841,002,670 784 12,268
----------------------------- --------------------- -------------- --------- --------- ---------
Details of deferred shares issued are in the table below:
Deferred Shares (GBP0.009)
-------------------------------------------------------------
Total Total
Number Share Share
Date of shares Capital Premium
GBP'000 GBP'000
------------------------- ------------ --------- ---------
At 1 Jan 2015, 31 Dec
2015 and 31 Dec 2016 429,643,035 3,867 -
------------------------- ------------ --------- ---------
On 7 April 2017, every 250 existing ordinary shares of par value
0.01p in the Company at close of business on 7 April 2017 became 1
new ordinary share of par value 0.01p and 249 new deferred shares
of par value 0.01p. The rights attaching to the new ordinary shares
of 0.01p will be identical in all respects to those of the old
ordinary shares of 0.01p.
Similar to the old deferred shares of 0.9p each, the new
deferred shares of 0.01p created are effectively valueless as they
will not carry any rights to vote or dividend rights. In addition,
holders of deferred shares will only be entitled to a payment on a
return of capital or on a winding up of the Company after each of
the holders of new ordinary shares of 0.01p each have received a
payment of GBP10,000,000 on each such share. The new deferred
shares are not and will not be listed or traded on AIM or any other
investment exchange and are only transferable in limited
circumstances.
17 Share based payments
The Group has a share ownership compensation scheme for senior
executives of the Group. In accordance with the provisions of the
plan, as approved by shareholders at a previous general meeting,
senior executives may be granted options to purchase ordinary
shares in the Company.
The Group has on occasion issued warrants, or share options to
third parties by way of settlement of liabilities to strategic
suppliers and consultants. Each share option converts into one
ordinary share of Orogen plc upon exercise. No amounts are paid or
payable by the recipient of the option for the option. The options
carry neither rights to dividends nor voting rights at shareholders
meetings.
2016 2015
--------------------------- ---------------------------
Weighted Weighted
average average
Number of exercise Number of exercise
share options price share options price
---------------- --------------- ---------- --------------- ----------
Balance at 1
January 380,000,000 0.369p 225,000,000 0.68p
Lapsed during
the year - - (25,000,000) 0.80p
Issued during
the year - - 180,000,000 0.035p
Balance at 31
December (B) 380,000,000 0.369p 380,000,000 0.369p
---------------- --------------- ---------- --------------- ----------
Exercisable at
31 December 200,000,000 0.60p 200,000,000 0.60p
---------------- --------------- ---------- --------------- ----------
(A) See note 16 in relation to the post year end share
reorganisation. All existing rights attached to share options were
amended to reflect the new share structure. The rights are now over
new ordinary shares of 0.01p, with the original units divided by a
factor of 250 and the original exercise price increased by a factor
of 250.
(B) 300,000,000 of these options lapsed on 7 April 2017
following the board changes that were effective on that date as a
result of the change of company strategy.
The fair value of equity based share options granted is
estimated at the date of grant using the Black-Scholes pricing
model, taking into account the terms and conditions upon which the
options have been granted. The calculated fair value of share
options and warrants charged to the Group and Company financial
statements in the year is GBP20,000 (2015: GBP5,000). The total
fair value of the share options granted during 2015 is
GBP41,000.
The following are the inputs to the model for the options
granted during the prior year:
Share
Options
2015
------------------------ ------------
Strike price 0.035p
Total units 180,000,000
Underlying asset price 0.035p
Time (days) 2,555
Volatility 110%
Interest rate p.a. 1.25%
------------------------ ------------
(A) See note 16 in relation to the post year end share
reorganisation.
18 Retained earnings
Group Company
-------------------- --------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- --------- ---------
Opening balance (14,765) (14,088) (14,860) (14,514)
Loss for the year (2,609) (677) (2,588) (346)
Transfer from share based
payment reserve 7 - 7 -
Closing balance (17,367) (14,765) (17,441) (14,860)
--------------------------- --------- --------- --------- ---------
In accordance with the provisions of the Companies Act 2006, the
Company has not presented a statement of profit or loss and other
comprehensive income. The Company's loss for the year was
GBP2,588,000 (2015: loss GBP346,000).
19 Trade and other payables
Group Company
------------------ ------------------
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------- --------
Trade payables 15 8 13 6
Accruals and deferred income 126 42 93 36
Amounts due to Directors 16 13 8 8
Payable to Group Companies - - 24 39
Trade and other payables 157 63 138 89
------------------------------ -------- -------- -------- --------
Amounts due to Directors are unsecured, interest free and are
current liabilities.
20 Related party transactions
See the Directors report for details of remuneration of
Directors.
Shares purchased by Directors
Shares in Orogen plc were acquired by the Directors of the
Company as part of share placings as follows:
Subscription
shares
October
2015
--------------- -------------
Colin Bird 100,000,000
Adam Reynolds 25,000,000
Ed Slowey 25,000,000
Alan Mooney 25,000,000
Michael Nolan 25,000,000
Total 200,000,000
--------------- -------------
(A) See note 16 in relation to the post year end share
reorganisation.
There were no shares purchased via share placings by directors
during 2016.
Other transactions with Directors
The following amounts were charged during the year to the
Company by entities related to the Directors:
2016 2015
GBP'000 GBP'000
-------------------------------------- -------- --------
Office facilities and administration 10 9
Total 10 9
-------------------------------------- -------- --------
Office facilities and administration costs include GBP10,000
(2015: GBP9,000) in relation to office licence fees. The office
licence fees were charged on an arm's length basis.
Silverton Agreement with Galileo Resource plc ("Galileo")
In June 2016, Orogen executed an earn-in agreement with Galileo
covering the Silverton gold-silver property in Nevada, USA
("Silverton"). Under the earn-in agreement Orogen secured the right
to earn-in to an initial 51% interest in Silverton by spending
US$400,000 within 18 months and thereafter the possibility to spend
an additional US$1,500,000 within 30 months to earn-in a further
24% interest. At the time of the transaction, Colin Bird was a
director of both Galileo and Orogen and had shareholdings of 24.81%
and 1.82% respectively.
Parent transactions with Group companies
During the year the Company advanced GBP234,000 (2015:
GBP413,000) to Medavinci Gold Limited by way of intercompany loans
for exploration activities. The balance outstanding from Medavinci
Gold Limited at 31 December 2016 is GBP5,627,000 (2015:
GBP5,393,000). The Company made a provision of GBP2,197,000 (2015:
GBP200,000) against this receivable in the current year (see note
13). The intercompany loans are interest free and unsecured.
As at the 31 December 2016 the Company had trade receivable
balances of GBP30,000 (2015: GBP51,000) with Orogen Gold (Armenia)
Limited and nil (2015: GBP1,000) with Orogen Gold (Serbia) Limited.
Intercompany trade receivable balances are payable within 30 days
of the invoice date. The Company's total intercompany income for
the year was GBP144,000 (2015: GBP181,000).
As at the 31 December 2016 the Company had a trade payable
balance of GBP24,000 (2015: GBP39,000) with Orogen Gold Limited.
Intercompany trade payable balances are payable within 30 days of
the invoice date. The Company's total intercompany recharges
incurred for the year was GBP106,000 (2015: GBP150,000).
21 Financial instruments - risk management
In common with all other businesses, the Group is exposed to
risks that arise from its use of financial instruments. This note
describes the Group's objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure
them from previous periods unless otherwise stated in this
note.
General objectives, policies and processes
The Board has overall responsibility for the determination of
the Group's risk management objectives and policies and, whilst
retaining responsibility for them it has delegated the authority
for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group's
finance function. The Board receives regular updates from the
management team through which it reviews the effectiveness of the
processes put in place and the appropriateness of the objectives
and policies it sets. The overall objective of the Board is to set
policies that seek to reduce risk as far as possible without unduly
affecting the Group's competitiveness and flexibility. The
Company's operations expose it to some financial risks arising from
its use of financial instruments, the most significant ones being
cash flow interest rate risk, foreign exchange risk, liquidity risk
and capital risk. Further details regarding these policies are set
out below:
Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from its
deposits of cash and cash equivalents with banks. The cash balances
maintained by the Group are proactively managed in order to ensure
that attractive rates of interest are received for the available
funds but without affecting the working capital flexibility the
Group requires. The Group is not at present exposed to cash flow
interest rate risk on borrowings as it has no debt. No subsidiary
company of the Group is permitted to enter into any borrowing
facility or lease agreement without the prior consent of the
Company.
Interest rates on financial assets
The Group's financial assets consist of cash and cash
equivalents, loans, trade and other receivables. The interest rate
profile of these assets was as follows:
Total Financial Financial
assets on assets on
which interest which interest
is earned in not earned
GBP'000 GBP'000 GBP'000
------------------ -------- ---------------- ----------------
31 December 2016
UK Sterling 264 184 80
Euro 29 - 29
US Dollar 88 61 27
Other currencies 7 1 6
388 246 142
31 December 2015
UK Sterling 897 588 309
Euro 25 - 25
US Dollar 19 19 -
Other currencies 2 - 2
943 607 336
------------------ -------- ---------------- ----------------
The Group earned interest on its interest bearing financial
assets at rates between 0.05% and 0.75% (2015: 0.05% and 0.9%)
during the year.
A change in interest rates on the statement of financial
position date would increase/ (decrease) the equity and the
anticipated annual income or loss by the theoretical amounts
presented below. The analysis is made on the assumption that the
rest of the variables remain constant. The analysis with respect to
31 December 2015 was prepared under the same assumptions.
2016 2015
-------------------- --------------------
Increase Decrease Increase Decrease
in 1% of 1% in 1% of 1%
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- --------- --------- ---------
Instruments bearing interest 7 (7) 6 (6)
------------------------------ --------- --------- --------- ---------
It is considered that there have been no significant changes in
cash flow interest rate risk at the reporting date compared to the
previous year end and that therefore this risk has had no material
impact on earnings or shareholders' equity.
Foreign exchange risk
Foreign exchange risk may arise because the Group has operations
located in various parts of the world where the local currency is
not the same as the functional currency in which the Company
operates.
Only in exceptional circumstances will the Group consider
hedging its net investments in overseas operations, as generally it
does not consider that the reduction in foreign currency exposure
warrants the cash flow risk created from such hedging techniques.
It is the Group's policy to ensure that individual Group entities
enter into local transactions in their functional currency wherever
possible and that surplus funds over and above immediate working
capital requirements are held in Sterling deposits.
The Group considers this policy minimises any unnecessary
foreign exchange exposure. In order to monitor the continuing
effectiveness of this policy the Board through their approval of
both corporate and capital expenditure budgets and review of the
currency profile of cash balances and management accounts,
considers the effectiveness of the policy on an on-going basis.
The following table discloses the major exchange rates of those
currencies utilised by the Group:
Foreign currency units EUR USD
to GBP1 UK Sterling (rounded)
-------------------------------- ------ ------
Average 2016 1.225 1.351
At 31 December 2016 1.174 1.235
Average 2015 1.374 1.528
At 31 December 2015 1.357 1.480
-------------------------------- ------ ------
(EUR = Euro and USD = United States Dollar)
Liquidity risk
Liquidity risk arises from the Group's management of working
capital; it is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. The principal
obligations of the Group arise in respect of committed expenditure
in respect of its on-going exploration work. The Group's policy is
to ensure that it will always have sufficient cash to allow it to
meet its obligations when they become due. To achieve this aim, it
seeks to maintain readily available cash balances (or agreed
facilities) to meet expected requirements and to raise new equity
finance to meet the next phase of exploration and where relevant
development expenditure.
The Board receives cash flow projections on a monthly basis as
well as information on cash balances. The Board will not commit to
material expenditure in respect of its on-going exploration work
prior to being satisfied that sufficient funding is available to
the Group to finance the planned programmes. For cash and cash
equivalents, the Company only uses recognised banks with medium to
high credit ratings.
Capital risk
The Group's objectives when managing capital are to safeguard
the ability to continue as a going concern in order to provide
returns for shareholders and benefits to other stakeholders and to
maintain an optimal capital structure to reduce the cost of
capital.
22 Capital commitments and contingencies
Capital Commitments
Following the approval of the change in strategy on 7 April
2017, Orogen will withdraw from mineral exploration and will not
commit further substantial expenditure on its exploration assets in
the meantime. All costs incurred to 31 December 2016 in respect of
the Company's work programmes have been accrued for. Going forward
the Group has liabilities in respect of general overheads in
relation to its exploration projects, GBP50,000 in the period to 7
April 2017, and has decided to cap further expenditure, after the
change of strategy date, on its mineral exploration projects at
GBP75,000 whilst buyers are sought for the Company's interest in
these assets. The Company estimates that total future costs in
relation to mineral exploration after 31 December 2016 should not
exceed GBP125,000 in aggregate.
Contingent liabilities
Georaid CJSC ("Georaid") Mutsk Gold Project Joint Venture
Agreement
Under the Joint Venture Agreement with Georaid if a positive
bankable feasibility study is obtained on the Mutsk gold project,
then Orogen will issue ordinary shares in the Company to the former
Georaid principals to the value of US$300,000. The US$300,000 share
based payment is contingent on the Company (1) exercising its
option to acquire an 80% interest in the project (this option was
exercised in August 2016); (2) the project partners undertaking
further substantial exploration work on the project and (3) a
feasibility study being commissioned which is both positive in its
outcome and bankable.
23 Events after the reporting period
Change of Name and Strategy
On 7 April 2017 at a general meeting of the Company, Orogen
shareholders voted to adopt resolutions to effect a change of
strategy and to change the name of the Company from Orogen Gold plc
to Orogen plc. Trading on AIM commenced under the new Company name
on 10 April 2017.
The decision to cease the Company's mineral exploration
activities represents a fundamental change of business under Rule
15 of the AIM Rules. The Company is deemed to be an AIM Rule 15
cash shell, which means that the Company must make an acquisition
or acquisitions which constitute a reverse takeover under Rule 14
of the AIM Rules within six months of the 7 April 2017 general
meeting, otherwise the trading of the Company's shares on AIM will
be suspended. If the Company has not made an acquisition or
acquisitions which constitute a reverse takeover under Rule 14 of
the AIM Rules within six months of such suspension, the admission
of the Company's shares to trading on AIM will be cancelled.
Capital Restructuring and Issue of Shares
On 7 April 2017, every 250 existing ordinary shares of par value
0.01p in the Company at close of business on 7 April 2017 became 1
new ordinary share of par value 0.01p and 249 new deferred shares
of par value 0.01p. The rights attaching to the new ordinary shares
of 0.01p will be identical in all respects to those of the old
ordinary shares of 0.01p.
On 7 April 2017 the Company raised gross proceeds of
approximately GBP3.47 million, through an open offer, placing and
second placing which added 231,364,011 ordinary shares to the
31,364,011 ordinary shares in existence after the capital
reorganisation.
Directorate Changes
Following the general meeting on 7 April 2017, Colin Bird,
Edward Slowey, Michael Nolan and Alan Mooney resigned from the
Board and Steven Metcalfe and Mark Collingbourne were appointed as
directors of the Company with immediate effect.
Issue of Equity
On 3 May 2017, the Company issued 2,000,000 new ordinary shares
of 0.01p at 1.5p in settlement of professional fees. Following the
issue of the new ordinary shares, the total number of ordinary
shares in issue is 264,728,022.
Silverton Agreement Withdrawal
On 8 May 2017, Orogen issued formal notice to Galileo Resources
plc of its withdrawal from the Silverton Agreement. As permitted
under the agreement, Orogen has withdrawn without recourse with all
interests in the Silverton property reverting back to Galileo.
Suspension, Loan and Potential Acquisition
On the 26 May 2017, the Company announced that it had agreed
heads of terms with Thread 35 Limited ("Thread") to acquire
Thread's entire issued share capital, subject to certain conditions
and due diligence. Thread operates an e-commerce womenswear brand
under the brand name "Sosandar". This acquisition would constitute
a reverse transaction under the AIM Rules. Consequently, the
Company has requested that trading in its shares is temporarily
suspended, pending either the publication of an admission document
or until the proposed acquisition negotiations are terminated.
As part of the proposed transaction Orogen has made a secured
loan of up to GBP250,000 ("Loan") to Thread. The Loan is interest
free and may be drawn down in two tranches. The first tranche of
GBP100,000 may be drawn down immediately, whilst the second tranche
may only be drawn down on the condition that letters of intent are
obtained by the Company from Thread's shareholders to accept the
terms of an offer to acquire their shares. On 14 June 2017, the
second tranche of the Loan was drawn down.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEUFMAFWSELM
(END) Dow Jones Newswires
June 29, 2017 02:00 ET (06:00 GMT)
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