CORCEL PLC — Annual Report 2015

Nov 23, 2015

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RNS Number : 5313G

Regency Mines PLC

23 November 2015

Regency Mines Plc

("Regency" or the "Company")

Final Results for the Year Ended 30 June 2015

23rd November 2015

Chairman's Review

Dear Shareholders,

Overview 

Regency Mines listed ten years ago in 2005 as a base metal exploration company focussed on nickel which would also actively seek mining finance and transactional opportunities. The latter, it was hoped, could give it greater stability through the exploration cycle and generate cash flow. The 'commodity supercycle' created by demand from the industrialising economies and in particular China was at that time already under way; nickel prices had started to rise from their long-term trend levels in late 2003, and other metals followed in 2004.

The transactional opportunities came early for Regency and have become important again recently. Our dealings in Ram Resources Ltd, Alba Mineral Resources plc, and the Horse Hill oil exploration consortium have been significant contributors to our business with timelines and cost structures very different from and complementary to traditional exploration activities.

On the other hand, base metal exploration projects and related technology investments such as Direct Nickel Ltd have been a drain on our resources and difficult to progress as the natural resource markets declined.  This despite high quality and often successful exploration work over the years, including the definition of a major nickel mineral resource at Mambare in Papua New Guinea and significant progress exploring for potash and phosphate in Sudan.    Sudan in particular constituted the majority of the low-cost exploration undertaken in the year to 30th June 2015.  

In 2015 we can see that a new supply-demand balance has been established and bottlenecks in supply no longer exist. The commodity supercycle appears over. Nickel, as it was the first to move on the way up, has been the first to retreat to a price which looks much like a continuation of the pre-2003 long-term price trend. Demand for stainless steel, into which two thirds of nickel will go, can be expected to show steady growth, but the shortages that drove high prices and drove technical innovation seem less likely today. 

In the circumstances we have felt it prudent to take an impairment on our investment in nickel technology company Direct Nickel Ltd, reducing its carrying value from £4,188,415 to £762,439, as well as impairments on our various exploration tenements.

While endeavouring to retain assets with long-term value and those with established resources, the Company's emphasis remains, as last year, on generating cash flow and returns for investors, whether from investment sales or from  the development of revenue-producing assets. The Horse Hill investment last year led to no less than thirteen public announcements as the well was drilled and results assessed, and dominated discourse on the Company for a while, raising the profile of the business. It was subsequently disposed of when it became evident from the results that development of the project would not lead to a short-term production asset. To have kept it because it could possibly have turned into something different, with uncertain cash inflows hoped for in the long term but further substantial cash outflows very certain in the short term, would have been an unjustifiable abandonment of our investment rationale and would have been to adopt a much more aggressive and higher risk profile than we were comfortable with.

The emphasis on cash flow has had another consequence, with the majority of overhead costs having been eliminated in a programme which has been taking effect in stages since the year end. Geology and Finance services will from now on be provided on an outsourced as-needed basis with little to no recurring fixed costs.  Office costs have been reduced and are expected to be further reduced by subletting excess space. Both administrative costs in London and the overseas costs of maintaining assets remain under constant review to ensure that they remain proportionate and justifiable to our shareholders.

The Company has been seeking further opportunities for taking participation interests in low cost onshore oil production that can match our current investment criteria. In furtherance of this Regency has formed close working relationships with prospective long-term partners, and some projects are already at an advanced stage of discussion with more news expected.

Discussion of the Results   

The increase in loss for the year before taxation, from £1,515,447 to £5,888,742 is due primarily to the decision to impair the carrying value of the Direct Nickel holding by £3,425,976. The impairment level suggested by the accounting standard accords with the view of Regency's management. Direct Nickel is significantly impacted by the decline in the nickel price and a reduced appetite for technical innovation in the sector.

This impairment would account for the whole of the increased loss but for the different impacts of the sale of the Fraser Range tenements into Ram Resources Ltd (ASX:RMR)("Ram"), and subsequent disposals of Ram stock, in each year.  What is shown in the 2015 accounts is a loss on disposal of Ram stock, against a gain on the sale of tenements in the previous year.  Taking the two together the underlying reality is that tenements with a total cost to Regency of AUD97,641 are today represented by AUD742,952.38 proceeds from sales of Ram stock, a 4% carried interest in the tenements which Regency can convert to AUD200,000 value of Ram stock, and 59,516,530 retained Ram shares with a current market value of approximately AUD119,033, plus a retained royalty.

The investment in and subsequent sale for £300,000 of the interest in Horse Hill gave rise to an £83,900 loss, included under exploration expenses. The underlying picture is clearer when one takes into account that as a result of the co-investment in Horse Hill with Alba Mineral Resources plc ("Alba"), the Alba price rose and Regency was able during the period to realise a profit on sale of investment of £131,756 from selling a holding previously carried at £48,821, and that Regency was also able to raise £447,700 before expenses in September 2014 at a price per share approximately double that achieved four months earlier and before investing in Horse Hill. 

Administrative expenses are shown as rising as a result only of the inclusion of exchange losses within this heading, since these losses on translation rose to £217,934 from £41,126 in the previous year as a result of the strength of sterling over the period.

Prospects

The Company continues to focus on the identification and pursuit of cash flow generative opportunities in the onshore oil sector, and has made considerable progress since the end of the financial year.

The Company made an opportunistic and successful application for a major asset, the low cost 555 sq km license at Motzfeldt in southern Greenland, which hosts what is believed to be the world's largest known tantalum resource, with a JORC Resource so far identified of 340m tons Ta2O5 at 120 ppm, as well as resources of zirconium and niobium, and potential for other minerals. This, and an interest in a planned graphite mine development at Halberts in Western Australia, represent further potential transactional opportunities where the Company through its continuing discussions will seek greater liquidity for its interests. The holding in and conversion rights into Ram are considered a non-core asset where further value may be extracted. 

Careful management of existing portfolio assets will aim at preserving and maximizing value while restricting holding costs wherever possible.

Today Regency has the opportunity to redefine its identity as a company engaging in transactional and cash flow-generative opportunities, which is also a return to its roots at listing. For that purpose it must de-emphasise its back catalogue where appropriate in order to present a new clear and focussed identity that will be attractive to both current and future investors. The necessary and often painful preparatory steps have been taken over the past year, and we expect to move decisively going forward.  We look ahead to announcing more detail on these plans and developments. 

Andrew Bell

Chairman 

20 November 2015

For further information, please contact:

Andrew Bell 0207 747 9960 or 0776 647 4849                            Chairman Regency Mines Plc

Scott Kaintz 0207 747 9960                                                          Executive Director Regency Mines Plc

Roland Cornish/Rosalind Hill Abrahams 0207 628 3396          NOMAD Beaumont Cornish Limited

Jason Robertson 0129 351 7744                                                  Broker Dowgate Capital Stockbrokers Ltd.

Christian Pickel 0203 128 8208                                                    Media Relations MHP Communications

Results and dividends

Regency Mines (the "Parent") and its subsidiaries made a post-tax loss of £5,888,742 (2014: £1,508,812).  The Directors do not recommend the payment of a dividend.  The following financial statements are extracted from the audited financial statements which were approved by the Board of Directors and authorised for issue on 20 November 2015.

Consolidated statement of financial position

as at 30 June 2015

	Notes	30 June 2015 £	30 June 2014 £
ASSETS
Non-current assets
Property, plant and equipment	9	8,828	22,562
Investments in associates and joint ventures	11	1,660,854	2,234,244
Available for sale financial assets	12	995,011	4,611,833
Exploration assets	13	829,151	1,198,306
Total non-current assets		3,493,844	8,066,945
Current assets
Cash and cash equivalents	20	3,565	267,325
Trade and other receivables	14	1,830,683	1,659,602
Total current assets		1,834,248	1,926,927
Total assets		5,328,092	9,993,872
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital	18	1,815,326	1,475,403
Share premium account		16,700,261	15,944,484
Share-based payment reserve		-	41,512
Other reserves		60,140	(370,137)
Retained earnings		(13,936,310)	(8,089,080)
Total equity		4,639,417	9,002,182
LIABILITIES
Current liabilities
Trade and other payables	15	393,685	503,427
Short-term borrowings	15	294,990	488,263
Total current liabilities		688,675	991,690
Total equity and liabilities		5,328,092	9,993,872

These financial statements were approved by the Board of Directors and authorised for issue on 20 November 2015 and are signed on its behalf by:

Andrew R M Bell                 Scott Kaintz

Chairman and CEO            Director

The accompanying notes form an integral part of these financial statements.

Consolidated income statement

for the year ended 30 June 2015

	Notes	Year to 30 June 2015 £	Year to 30 June 2014 £
Revenue
Management services		29,640	77,571
Gain on sale of tenements		66,469	1,147,504
Total revenue		96,109	1,225,075
Loss on dilution of interest in associate		(215,157)	(24,232)
Loss on sales of investments		(382,678)	(435,374)
Impairment of available for sale financial assets		(3,425,976)	-
Exploration expenses		(559,843)	(876,245)
Administrative expenses (net)		(964,761)	(881,947)
Share of losses of associates and joint ventures (net of tax)		(420,418)	(494,398)
Finance costs, net	4	(16,018)	(28,326)
Loss for the year before taxation	3	(5,888,742)	(1,515,447)
Tax credit	5	-	6,635
Loss for the year attributable to owners of the Parent		(5,888,742)	(1,508,812)
Loss per share attributable to owners of the Parent
Loss per share - basic	8	(0.34) pence	(0.12) pence
Loss per share - diluted	8	(0.34) pence	(0.12) pence

All of the Group's operations are considered to be continuing.

The accompanying notes form an integral part of these financial statements.

Consolidated statement of comprehensive income

for the year ended 30 June 2015

	30 June 2015 £	30 June 2014 £
Loss for the year	(5,888,742)	(1,508,812)
Other comprehensive (expense)/income
Items that will be reclassified subsequently to profit or loss
Deficit on revaluation of available for sale	394,641	(270,265)
Deferred tax on available for sale financial assets	-	(6,635)
Share of other comprehensive income of associates	(12,814)	53,651
Unrealised foreign currency gain	48,450	118,436
Other comprehensive income/(expense) for the year	430,277	(104,813)
Total comprehensive expense for the year attributable to owners of the Parent	(5,458,465)	(1,613,625)

The accompanying notes form an integral part of these financial statements.

Consolidated statement of changes in equity

for the year ended 30 June 2015

The movements in equity during the year were as follows:

	Share capital £	Share premium account £	Retained earnings £	Share-based payment reserve £	Other reserves £	Total equity £
As at 30 June 2013	1,106,050	15,025,276	(6,595,363)	56,607	(265,324)	9,327,246
Changes in equity for 2014
Loss for the year	-	-	(1,508,812)	-	-	(1,508,812)
Other comprehensive income for the year	-	-	-	-	(104,813)	(104,813)
Transactions with owners
Issue of shares	369,353	936,708	-	-	-	1,306,061
Share issue and fundraising costs	-	(17,500)	-	-	-	(17,500)
Share-based payment transfer	-	-	15,095	(15,095)	-	-
Total transactions with owners	369,353	919,208	15,095	(15,095)	-	1,288,561
As at 30 June 2014	1,475,403	15,944,484	(8,089,080)	41,512	(370,137)	9,002,182
Changes in equity for 2015
Loss for the year	-	-	(5,888,742)	-	-	(5,888,742)
Other comprehensive income for the year	-	-	-	-	430,277	430,277
Transactions with owners
Issue of shares	339,923	782,132	-	-	-	1,122,055
Share issue and fundraising costs	-	(26,355)	-	-	-	(26,355)
Share-based payment transfer	-	-	41,512	(41,512)	-	-
Total transactions with owners	339,923	755,777	41,512	(41,512)	-	1,095,700
As at 30 June 2015	1,815,326	16,700,261	(13,936,310)	-	60,140	4,639,417

	Available for sale financial asset reserve £	Associate investments reserve £	Foreign currency translation reserve £	Total other reserves £
As at 30 June 2013	(35,034)	(457,640)	227,350	(265,324)
Changes in equity for 2014
Other comprehensive (expense)/income for the year	(276,900)	53,651	118,436	(104,813)
As at 30 June 2014	(311,934)	(403,989)	345,786	(370,137)
Changes in equity for 2015
Other comprehensive (expense)/income for the year	394,641	(12,814)	48,450	430,277
As at 30 June 2015	82,707	(416,803)	394,236	60,140

See note 17 for a description of each reserve included above.

Consolidated statement of cash flows

for the year ended 30 June 2015

	Year to 30 June 2015 £	Year to 30 June 2014 £
Cash flows from operating activities
Loss before taxation	(5,888,742)	(1,515,447)
Increase in receivables	(93,569)	(46,330)
(Decrease)/increase in payables	(109,740)	66,569
Depreciation	13,734	25,783
Impairment of exploration properties	553,096	849,895
Share-based payments	72,290	93,255
Currency losses	154,425	228,923
Finance cost, net	16,018	28,326
Share of losses of associate	420,418	494,398
Loss on sale of investments	382,678	435,374
Gain on sale of tenements	(66,469)	(1,147,504)
Impairment of available for sale financial assets	3,425,976	-
Loss on dilution of interest in associate	215,157	24,232
Net cash outflow from operations	(904,728)	(462,526)
Cash flows from investing activities
Interest received	17,003	13,715
Proceeds from sale of investments	605,123	275,317
Purchase of property, plant and equipment	-	(1,028)
Purchase of available for sale financial assets	(300,000)	(53,793)
Payments for exploration costs	(347,428)	(519,140)
Payments for investments in associates and joint ventures	(75,000)	(153,000)
Net cash outflow from investing activities	(100,302)	(437,929)
Cash inflows from financing activities
Proceeds from issue of shares	1,049,765	1,212,805
Transaction costs of issue of shares	(26,355)	(17,500)
Interest paid	(33,021)	(42,041)
Proceeds of new borrowings	99,787	383,180
Repayment of borrowings	(348,906)	(381,425)
Net cash inflow from financing activities	741,270	1,155,019
Net decrease)/increase in cash and cash equivalents	(263,760)	254,564
Cash and cash equivalents at the beginning of period	267,325	12,761
Cash and cash equivalents at end of period	3,565	267,325

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

Registration number: 05227458

Company statement of financial position

as at 30 June 2015

	Notes	30 June 2015 £	30 June 2014 £
ASSETS
Non-current assets
Property, plant and equipment	9	8,828	22,562
Investments in subsidiaries	10	482	482
Investments in associates and joint ventures	11	1,827,454	2,815,969
Available for sale financial assets	12	909,749	4,611,833
Exploration assets	13	662,384	698,926
Total non-current assets		3,408,897	8,149,772
Current assets
Cash and cash equivalents	20	2,432	264,577
Trade and other receivables	14	2,548,606	2,354,267
Total current assets		2,551,038	2,618,844
Total assets		5,959,935	10,768,616
EQUITY AND LIABILITIES
Called up share capital	18	1,815,326	1,475,403
Share premium account		16,700,261	15,944,484
Other reserves		33,530	(336,651)
Retained earnings		(13,267,690)	(7,303,631)
Total equity		5,281,427	9,779,605
LIABILITIES
Current liabilities
Trade and other payables	15	383,518	500,748
Short-term borrowings	15	294,990	488,263
Total current liabilities		678,508	989,011
Total equity and liabilities		5,959,935	10,768,616

These financial statements were approved by the Board of Directors and authorised for issue on 20 November 2015 and are signed on its behalf by:

Andrew R M Bell                 Scott Kaintz

Chairman and CEO            Director

The accompanying notes form an integral part of these financial statements.

Company statement of changes in equity

for the year ended 30 June 2015

The movements in reserves during the year were as follows:

	Share capital £	Share premium account £	Retained earnings £	Other reserves £	Total equity £
As at 30 June 2013	1,106,050	15,025,276	(6,065,040)	(123,996)	9,942,290
Changes in equity for 2014
Loss for the year	-	-	(1,253,686)	-	(1,253,686)
Other comprehensive expense for the year	-	-	-	(197,560)	(197,560)
Transactions with owners
Issue of shares	369,353	936,708	-	-	1,306,061
Share issue and fundraising costs	-	(17,500)	-	-	(17,500)
Share based payment transfer	-	-	15,095	(15,095)	-
Total transactions with owners	369,353	919,208	15,095	(15,095)	1,288,561
As at 30 June 2014	1,475,403	15,944,484	(7,303,631)	(336,651)	9,779,605
Changes in equity for 2015
Loss for the year	-	-	(6,005,571)	-	(6,005,571)
Other comprehensive income for the year	-	-	-	411,693	411,693
Transactions with owners
Issue of shares	339,923	782,132	-	-	1,122,055
Share issue and fundraising costs	-	(26,355)	-	-	(26,355)
Share based payment transfer	-	-	41,512	(41,512)	-
Total transactions with owners	339,923	755,777	41,512	(41,512)	1,095,700
As at 30 June 2015	1,815,326	16,700,261	(13,267,690)	33,530	5,281,427

	Available for sale financial asset reserve £	Share-based payment reserve £	Currency reserve £	Total other reserves £
As at 30 June 2013	(182,575)	56,607	1,972	(123,996)
Changes in equity for 2014
Other comprehensive expense for the year	(197,560)	-	-	(197,560)
Share based payment transfer	-	(15,095)	-	(15,095)
As at 30 June 2014	(380,135)	41,512	1,972	(336,651)
Changes in equity for 2015
Other comprehensive income for the year	411,693	-	-	411,693
Share based payment transfer	-	(41,512)	-	(41,512)
As at 30 June 2015	31,558	-	1,972	33,530

See note 17 for a description of each reserve included above.

Company statement of cash flows

for the year ended 30 June 2015

	Year to 30 June 2015 £	Year to 30 June 2014 £
Cash flows from operating activities
Loss before taxation	(6,005,571)	(1,284,021)
Increase/(decrease) in receivables	(194,339)	12,090
Decrease/(increase) in payables	(117,230)	95,038
Depreciation	13,734	25,759
Share-based payments	72,290	93,255
Finance costs, net	16,018	28,326
Currency (gain)/loss	55,846	(40,962)
Loss on sale of investments	382,678	538,415
Impairment of associate	1,063,515	-
Impairment of available for sale investment	3,425,976	-
Impairment of exploration expenses	351,689	-
Net cash outflow from operations	(935,394)	(532,100)
Cash flows from investing activities
Interest received	17,003	13,715
Payments for exploration costs	(315,147)	(450,684)
Payments for investments in associates and joint ventures	(75,000)	(153,000)
Purchase of property, plant and equipment	-	(1,028)
Purchase of available for sale financial assets	(300,000)	(53,793)
Proceeds from sale of investments	605,123	275,115
Net cash outflow from investing activities	(68,021)	(369,675)
Cash inflows from financing activities
Proceeds from issue of shares	1,049,765	1,212,805
Transaction costs of issue of shares	(26,355)	(17,500)
Interest paid	(33,021)	(42,041)
Proceeds of new borrowings	99,787	383,180
Repayments of borrowings	(348,906)	(381,425)
Net cash inflow from financing activities	741,270	1,155,019
Net (decrease)/increase in cash and cash equivalents	(262,145)	253,244
Cash and cash equivalents at the beginning of period	264,577	11,333
Cash and cash equivalents at end of period	2,432	264,577

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

Notes to financial statements

for the year ended 30 June 2015

1. Principal accounting policies

1.1 Authorisation of financial statements and statement of compliance with IFRS

The Group financial statements of Regency Mines plc ("the Company" or "Regency") for the year ended 30 June 2015 were authorised for issue by the Board on 20 November 2015 and signed on the Board's behalf by Andrew Bell and Scott Kaintz. Regency Mines plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM.

1.2 Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU ("IFRS") and the requirements of the Companies Act applicable to companies reporting under IFRS.

The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments. The principal accounting policies adopted are set out below.

Going concern

The financial report has been prepared on the basis of a going concern.

The consolidated entity incurred a net loss before tax of £5,888,742 during the period ended 30 June 2015, and had a net cash outflow of £1,005,030 from operating and investing activities.  The consolidated entity continues to be reliant upon completion of capital raising for continued operations, the provision of working capital and for the repayment of the £294,990 interest bearing loan due for repayment in December 2015, and January 2016. Whilst the Directors have instituted measures to preserve cash and secure additional finance, these circumstances create material uncertainties over future trading results and cash flows. 

The Group's cash flow forecast for the 12 months ending 31 December 2016 highlights the fact that the company is expected to generate negative cash flow through that period.  The Board of Directors, are evaluating all the options available, including the injection of funds into the Group during the next 12 months, and are confident that the necessary funds will be raised in order for the Group to remain cash positive for the whole period.

The Company has in August 2015 announced the raising of £200,000 through a share placing of 444,444,600 ordinary shares.  The Directors feel that a sizeable fundraising associated with a current or new project development plan will be the most likely scenario at this time. 

In addition, the Group has further implemented plans to minimise its cash outflows by reducing its fixed costs and overheads by such measures as staff reductions both in the form of redundancies and natural employee attrition, as well as minimizing marketing costs and other office and corporate expenditure. The decision was made during the year to close the geology and accounting departments and instead to rely on outsourced contractors on an ad hoc basis to perform residual functions, giving the Company a much lower level of fixed costs and much greater operational flexibility. The Group's income has traditionally arisen from the provision of management services and in 2015 this is expected to grow from additional rental income from subletting unneeded office space. As of H2 2015 the business strategy has been altered to include the identification and development of oil and gas projects with near-term cash generative potential.  At the time of this note several projects were under consideration with negotiations underway on one in particular in the United States.  A successful investment of the type being considered has the potential to begin to generate reliable cashflows to the Company in the first half of 2016 and ultimately has the potential to cover ongoing Company overheads. 

If additional equity capital is not obtained, the going concern basis may not be appropriate, with the result that the Group may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated in the financial report.  The Directors have concluded that the combination of these circumstances represents a material uncertainty that casts significant doubt upon the Group's ability to continue as a going concern. Nevertheless after making enquiries, and considering the uncertainties described above, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.

Company Statement of Comprehensive Income

As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £6,005,571 (2014: £1,253,686). The Company's other comprehensive income for the financial year was £411,693 (2014: expense £197,560).

Amendments to published standards effective for the year ended 30 June 2015

The following standards have been adopted during the year:

·      IFRS 10 "Consolidated Financial Statements";

·      IFRS 11 "Joint Arrangements";

·      IFRS 12 "Disclosure of Interests in Other Entities"; 

·      IAS 27 (Revised) "Separate Financial Statements"; and

·      IAS 28 (Revised) "Investments in Associates and Joint Ventures".

Additional disclosures, where applicable, have been provided to comply with the revised standards although the adoption of these amendments has had no significant impact on the financial position and performance of the Group.

IFRS 10 is a new standard which establishes principles for the presentation and preparation of consolidated financial statements. As a result of its publication, the Directors are required to consider the application of the revised definition of control to determine whether additional entities will need to be consolidated and whether consolidation is still appropriate for those that currently are.

The new definition of control will require the Directors to consider whether the Company has:

a) power over the investee;

b) exposure, or rights, to variable returns from involvement with the investee; and

c) the ability to use power over the investee to affect the amount of the investor's returns.

IFRS 11 replaces IAS 31 "Interests in Joint Ventures" and SIC-13 "Jointly Controlled Entities - Non-monetary Contributions by Venturers". It removes the option to account for jointly controlled entities ("JCEs") using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. JCEs under current IAS 31 that will be classified as joint ventures under IFRS 11 will transition from proportionate consolidation to the equity method by aggregating the carrying values previously recorded, testing that amount for impairment and then using that amount as deemed cost for applying the equity method going forward. The Group recognises its interest in jointly controlled entities using the equity method of accounting. The application of this new standard will not impact the financial position of the Group.

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures related to an entity's interests in subsidiaries, joint arrangements, associates and structured entities.

Standards adopted early by the Group

The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.

Adoption of standards and interpretations

As at the date of authorisation of these financial statements, there were standards and interpretations in issue but that are not yet effective and have not been applied in these financial statements, as listed below.

Standards, amendments and interpretations in issue but not effective

Effective for annual periods beginning on or after 1 January 2015:

·      IFRS 9 "Financial Instruments: Classification and Measurement".

Effective for annual periods beginning on or after 1 January 2016:

·      IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations";

·      IAS 1 "Presentation of Financial Statements (revised)"; and

·      IAS 34 "Interim Financial Reporting (revised)".

The Directors do not anticipate that the adoption of these standards and interpretations in future periods could have a material effect on the financial position or performance of the Group and Company.

1.3 Basis of consolidation

The consolidated financial statements of the Group incorporate the financial statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.

Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases.

The acquisition 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, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.

Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.

Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

·      derecognises the assets (including goodwill) and liabilities of the subsidiary;

·      derecognises the carrying amount of any non-controlling interest;

·      derecognises the cumulative translation differences recorded in equity;

·      recognises the fair value of the consideration received;

·      recognises the fair value of any investment retained;

·      recognises any surplus or deficit in profit or loss; and

·      reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

For the year ended 30 June 2015, the consolidated financial statements combine those of the Company with those of its subsidiaries, Red Rock Uranium Pty Limited, Regency Mines Australasia Pty Limited and Regency Resources Limited.

1.4 Summary of significant accounting policies

1.4.1 Investment in associates

An associate is an entity over which the Company is in a position to exercise significant influence, but not control or jointly control, through participation in the financial and operating policy decisions of the investee.

Investments in associates are recognised in the consolidated financial statements using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised unless the Group has incurred obligations or made payments on behalf of the associate.

Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds received for the dilutive share issue and the value of the Company's effective disposal.

In the Company accounts investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment when there is objective evidence of impairment.

1.4.2 Interests in joint ventures

The Group has a contractual arrangement with Direct Nickel Pty Ltd which represents a joint venture established through an interest in a jointly controlled entity, Oro Nickel (Vanuatu) Limited.

The Group recognises its interest in the entity's assets and liabilities using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax.

Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.

Financial statements of the jointly controlled entity are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's financial statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.

1.4.3 Taxation

Corporation tax payable is provided on taxable profits at the current rate. The tax expense represents the sum of the current tax expense and deferred tax expense.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income 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's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount 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 balance sheet liability method. Deferred tax liabilities are 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 the initial recognition of goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:

·      the same taxable entity; or

·      different taxable entities which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.

1.4.4 Property, plant and equipment

Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised at cost and is depreciated on a straight line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:

Office furniture, fixtures and fittings          - 33% per annum

Leasehold improvements                         - 5% per annum

1.4.5 Foreign currencies

Both the functional and presentational currency of Regency Mines plc is Sterling (£). Each Group entity determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

The functional currencies of the foreign subsidiaries and joint venture are the Australian Dollar ("AUD") and the Papua New Guinea Kina ("PNG").

Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income when the changes in fair value are recognised directly in other comprehensive income.

On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.

1.4.6 Revenue

Revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of the Group and the Company, when those inflows result in increases in equity.

Revenue is measured at the fair value of the consideration received or receivable for investment asset disposals in the normal course of business and is recognised when revenue and associated costs can be measured reliably and future economic benefits are probable.

In addition, revenue from management services is recognised on an accruals basis when the services have been delivered and any associated costs have been incurred.

1.4.7 Exploration assets

Exploration assets comprise exploration and development costs incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments.

Recoupment of exploration and development costs is dependent upon successful development and commercial exploitation of each area of interest and will be amortised over the expected commercial life of each area once production commences. The Group and the Company currently have no exploration assets where production has commenced.

The Group adopts the "area of interest" method of accounting whereby all exploration and development costs relating to an area of interest are capitalised and carried forward until abandoned. In the event that an area of interest is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval of an application is expensed with the exception of refundable rent which is raised as a receivable.

Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.

1.4.8 Share-based payments

The Group operates an equity-settled share-based payment arrangement whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.

The fair value of options granted to Directors and others in respect of services provided is recognised as an expense in the statements of income with a corresponding increase in equity reserves - the share-based payment reserve.

On exercise or lapse of share options, the proportion of the share-based payment reserve relevant to those options is transferred to retained earnings. On exercise, equity is also increased by the amount of the proceeds received.

The fair value is measured at grant date and charged over the vesting period during which the option becomes unconditional.

The fair value of options is calculated using the Black-Scholes model taking into account the terms and conditions upon which the options were granted. There are no market vesting conditions. The exercise price is fixed at the date of grant. For other equity instruments granted during the year (i.e. other than share options), fair value is measured on the basis of an observable market price.

1.4.9 Pension

The Group operates a defined contribution pension plan which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.

1.4.10 Finance costs/revenue

Borrowing costs are recognised on an accruals basis using the effective interest method.

Finance revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

1.4.11 Financial instruments

Financial assets and financial liabilities are recognised where the Group has become party to the contractual provisions of the instrument.

Financial assets

Investments

Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.

Investments in associate companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.

For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses previously recognised in other comprehensive income are transferred to profit and loss.

Available for sale financial assets

Equity investments intended to be held for an indefinite period of time are classified as available for sale financial assets. They are carried at fair value, where this can be reliably measured, with movements in fair value recognised in other comprehensive income and debited or credited to the available for sale financial assets reserve. Where the fair value cannot be reliably measured, the investment is carried at cost or a lower valuation where the Directors consider the value of the investment to be impaired.

Available for sale financial assets are included within non-current assets. On disposal, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had previously been recognised directly in reserves is recognised in the Income Statement.

Income from available for sale financial assets is accounted for in the Income Statement when the right to receive it has been established.

The Group assesses at each reporting date whether there is objective evidence that an investment is impaired. When there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the Income Statement - is removed from other comprehensive income and recognised in the Income Statement. Impairment losses on equity investments are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income.

Cash and cash equivalents

Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Trade and other receivables

Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectable amounts.

An allowance for impairment is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

After initial recognition these assets are measured at amortised cost using the effective interest method less provision for impairment.

Financial liabilities and equity

Trade and other payables

Trade and other payables are initially recognised at fair value and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

Short-term borrowings

Short-term borrowings are recorded initially at their fair value, plus directly attributable transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable on settlement or redemption, are recognised in profit or loss over the term of the instrument using an effective rate of interest.

Equity instruments

Equity instruments issued by the Company are recorded at fair value as initial recognition net of issue costs.

1.5 Significant accounting judgements, estimates and assumptions

The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Significant judgements in applying the accounting policies

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements:

Recognition of holdings less than 20% as an associate

The Directors have classified, as an associate, an equity investment where the Company is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee.

Significant influence is presumed when the Company holds greater than 20% of the voting power of the investee, unless it can be clearly demonstrated that this is not the case. Conversely, if the Company holds less than 20% of the voting power of an investee, it is presumed that the Company does not have significant influence, unless such influence can be clearly demonstrated.

The Company owns 4.87% (2014: 9.80%) of the issued share capital of Red Rock Resources plc. Andrew Bell, Chairman and Chief Executive Officer of the Company, is also a member of the Board and the Executive Chairman of Red Rock Resources plc. In accordance with IAS 28, the Directors of the Company consider this to provide the Group with significant influence as defined by the standard. As such, it continues to recognise Red Rock Resources plc as an associate for the year ended 30 June 2015 despite its shareholding falling below 20%.

The effect of recognising Red Rock Resources as an available for sale financial asset would be to decrease the loss by £431,906 and increase other comprehensive income by £12,814.

Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined using the Black-Scholes model.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

·      In the principal market for the asset or liability; or

·      In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

·      Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

·      Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

·      Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Impairment of available for sale financial assets

The Group follows the guidance of IAS 39 to determine when an available for sale financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred "loss event") and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which fair value of an investment is less than its cost.

In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. "Significant" is evaluated against the original cost of the investment and "prolonged" against the period in which the fair value has been below its original cost. Mining share prices typically have more volatility than most other shares and this is taken into account by management when considering if a significant decline in the fair value of its mining investments has occurred. Management would consider that there is a prolonged decline in the fair value of an equity investment when the period of decline in fair value has extended to beyond the expectation management have for the equity investment. This expectation will be influenced particularly by the company development cycle of the investment.

As a result of the Group's evaluation, no impairment (2014: no impairment) on available for sale investments was recognised in the income statement.

2. Segmental analysis

As with all mineral exploration ventures yet to generate cash from operations, ensuring adequate cash is available to meet operational obligations and to provide for investment opportunities is critical. This is therefore the main focus of management information presented to the chief operational decision makers, being the Executive Chairman and the Board of Directors.

The only sources of funds are issues of new equity and sales of exploration rights, investments or other assets. Therefore, in addition to monitoring the current market perception of the Company to shareholders, brokers and other possible providers of equity finance, constant attention is paid to:

·      available cash;

·      the balance available in the Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Limited advised by Yorkville Advisors LLC; and

·      the market value of the Group's listed investments.

At 30 June 2015 the Group had cash and cash equivalents of £3,565 and undrawn facilities available in the SEDA of £3.19m.

The market value of the most significant of the Group's listed investments at 30 June 2015 is as follows:

·      Red Rock Resources plc         £113,560.

Once the Group's main focus of operations becomes production, the nature of management information examined by the Board will alter to reflect the need to monitor revenues, margins, overheads and trade balances, as well as cash.

IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity, the countries in which revenue is earned regardless of whether this information is used in by management in making operating decisions.

Year to 30 June 2015	Investment in Red Rock Resources plc £	Other investments £	Australian exploration £	Papua New Guinea exploration £	Corporate and unallocated £	Total £
Revenue
Management services	-	-	-	-	29,640	29,640
Gain on sale of tenements	-	-	66,469	-	-	66,469
	-	-	66,469	-	29,640	96,109
Loss on dilution of interest in associate	(215,157)	-	-	-	-	(215,157)
Loss on sale of investments	-	131,756	(514,434)	-	-	(382,678)
Exploration expenses	-	(341,404)	(208,154)	(10,285)	-	(559,843)
Administrative expenses*	-	-	(169,427)	-	(795,334)	(964,761)
Share of losses in associates	(431,906)	-	-	11,488	-	(420,418)
Impairment of available for sale investments	-	(3,425,976)	-	-	-	(3,425,976)
Finance cost - net	-	-	-	-	(16,018)	(16,018)
Net (loss)/profit before tax from continuing operations	(647,063)	(3,635,624)	(825,546)	1,203	(781,712)	(5,888,742)

Year to 30 June 2014	Investment in Red Rock Resources plc £	Other investments £	Australian exploration £	Papua New Guinea exploration £	Corporate and unallocated £	Total £
Revenue
Management services	-	-	-	-	77,571	77,571
Gain on sale of tenements	-	-	1,147,504	-	-	1,147,504
	-	-	1,147,504	-	77,571	1,225,075
Loss on dilution of interest in associate	(24,232)	-	-	-	-	(24,232)
Loss on sale of investments	-	(435,374)	-	-	-	(435,374)
Exploration expenses	-	-	(869,082)	(7,163)	-	(876,245)
Administrative expenses*	-	-	(94,259)	-	(787,688)	(881,947)
Share of losses in associates	(394,805)	-	-	(99,593)	-	(494,398)
Finance cost - net	-	-	-	-	(28,326)	(28,326)
Net (loss)/profit before tax from continuing operations	(419,037)	(435,374)	184,163	(106,756)	(738,443)	(1,515,447)

* Included in administrative expenses is depreciation charge of £13,734 (2014: £25,783) under Corporate and unallocated.

Information by geographical area

Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.

Year to 30 June 2015	UK      £	Australia              £	Papua New Guinea                   £	Sudan        £	Other          £	Total                   £
Revenue
Management services	29,640	-	-	-	-	29,640
Gain on sale of tenements	-	66,469	-	-	-	66,469
Total segment revenue	29,640	66,469	-	-	-	96,109
Non-current assets
Investments in associates and joint ventures	-	-	1,660,854	-	-	1,660,854
Property, plant and equipment	8,828	-	-	-	-	8,828
Available for sale financial assets	147,307	847,704	-	-	-	995,011
Exploration assets	-	149,141	-	626,810	53,200	829,151
Total segment non-current assets	156,135	996,845	1,660,854	626,810	53,200	3,493,844

Year to 30 June 2014	UK £	Australia £	Papua New Guinea £	Sudan £	Total £
Revenue
Management services	77,571	-	-	-	77,571
Gain on sale of tenements	-	1,147,504	-	-	1,147,504
Total segment revenue	77,571	1,147,504	-	-	1,225,075
Non-current assets
Investments in associates and joint ventures	584,878	-	1,649,366	-	2,234,244
Property, plant and equipment	22,562	-	-	-	22,562
Available for sale financial assets	136,933	4,474,900	-	-	4,611,833
Exploration assets	-	499,380	-	698,926	1,198,306
Total segment non-current assets	744,373	4,974,280	1,649,366	698,926	8,066,945

3. Loss on ordinary activities before taxation

Group	2015 £	2014 £
Loss on ordinary activities before taxation is stated after charging:
Auditor's remuneration:
- fees payable to the Company's auditor for the audit of consolidated and Company financial statements	15,000	15,000
- fees payable to subsidiary auditors for the audit of subsidiary financial statements	2,225	2,370
Depreciation	13,734	25,783
Directors' emoluments	204,401	185,343
Share-based payments - Directors	30,000	29,975
Share-based payments - Staff	42,290	63,280
Currency losses	217,934	41,126

As declared in note 7, Directors are remunerated in part by third parties with whom the Company and Group have contractual arrangements.

4. Finance costs, net

	2015 £	2014 £
Interest expense	(33,021)	(42,041)
Interest income	17,003	13,715
	(16,018)	(28,326)

5. Taxation

	2015 £	2014 £
Current period transaction of the Group
UK corporation tax at 20.75% (2014: 22.50%) on profits for the period	-	-
Deferred tax
Origination and reversal of temporary differences	-	(6,635)
Deferred tax assets derecognised	-	-
Tax (credit)	-	(6,635)
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation	(5,888,742)	(1,515,447)
Loss on ordinary activities at the average UK standard rate of 20.75% (2014: 22.50%)	(1,221,914)	(340,976)
Impact of subsidiaries and associates	(24,242)	69,803
Effect of tax benefit of losses carried forward derecognised	298,090	282,883
Effect of non-deductible expense	948,066	(18,345)
Other deductions for tax purposes	-	-
Current tax (credit)	-	(6,635)

In addition to the amounts charged to the Consolidated Statement of Income a deferred tax charge amounting to £nil (2014:  £6,635) relating to the Group's investments was recognised in the Statement of Comprehensive Income.

Finance Act 2013 set the main rate of corporation tax at 21% from 1 April 2014 and at 20% from 1 April 2015. Therefore deferred tax assets/(liabilities) are calculated at 20% (2014: 21%).

6. Staff costs

The aggregate employment costs of staff (including Directors) for the year was:

	2015 £	2014 £
Wages and salaries	455,774	585,559
Pension	18,743	25,176
Social security costs	40,785	50,111
Employee share-based payment charge	72,290	93,255
Total staff costs	587,592	754,101

The average number of Group employees (including Directors) during the year was:

	2015 Number	2014 Number
Executives	5	5
Administration	7	8
Exploration	5	8
	17	21

The Company's staff are employed both by the Company and Red Rock Resources plc ("Red Rock"). During the year, staff costs of £105,848 (2014: £174,863) were recharged to Red Rock. Such recharges are offset against administration expenses in the income statement.

During the year, for all Directors and employees who have been employed for more than three months, the Company contributed to a defined contributions pension scheme as described under Directors' remuneration in the Directors' Report and a Share Incentive Plan ("SIP") as described under Management incentives in the Directors' Report.

7. Directors' emoluments

2015	Directors' fees £	Consultancy fees £	Share-based payments - SIP £	Pension contributions £	Social security costs £	Total £
Executive Directors
A R M Bell	48,000	15,000	6,000	2,930	4,531	76,461
S Kaintz	65,000	-	6,000	3,138	7,440	81,578
Non-executive Directors
E Bugnosen	18,000	-	6,000	882	1,092	25,974
J M E Lee	18,000	-	6,000	-	1,163	25,163
J Watkins	18,000	-	6,000	-	1,225	25,225
	167,000	15,000	30,000	6,950	15,451	234,401

2014	Directors' fees £	Consultancy fees £	Share-based payments - SIP £	Pension contributions £	Social security costs £	Total £
Executive Directors
A R M Bell	48,000	15,000	6,000	3,485	4,021	76,506
S Kaintz	39,000	-	6,000	3,284	7,333	55,617
Non-executive Directors
E Bugnosen	23,740	-	5,975	1,232	1,836	32,783
J M E Lee	18,000	-	6,000	-	1,206	25,206
J Watkins	18,000	-	6,000	-	1,206	25,206
	146,740	15,000	29,975	8,001	15,602	215,318

E Bugnosen became a non-executive director with effect from 1 November 2013. For the three months prior to the year end he was paid on a per diem basis.

The number of Directors who exercised share options in year was nil (2014: nil).

During the year, the Company contributed to a Share Incentive Plan more fully described in the Directors' Report.  4,285,714 (2014: 638,297) free shares were issued to each employee, including Directors, making a total of 21,428,571 (2014: 3,191,485) to Directors.

The Company also operates a contributory pension scheme.

8. Loss per share

The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue.

Diluted loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.

The following reflects the loss and share data used in the basic and diluted loss per share computations:

	2015	2014
Loss attributable to equity holders of the Parent	£(5,888,742)	£(1,508,812)
Weighted average number of ordinary shares of £0.0001 (2014: £0.001) in issue	1,740,350,467	1,243,943,418
Loss per share - basic	(0.34) pence	(0.12) pence
Weighted average number of ordinary shares of £0.0001 (2014: £0.001) in issue inclusive of dilutive outstanding options	1,740,350,467	1,243,943,418
Loss per share - fully diluted	(0.34) pence	(0.12) pence

The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows:

	2015 £	2014 £
Loss per share denominator	1,740,350,467	1,243,943,418
Weighted average number of dilutive share options	-	-
Diluted loss per share denominator	1,740,350,467	1,243,943,418

In accordance with IAS 33, the diluted earnings per share denominator takes into account the difference between the average market price of ordinary shares in the year and the weighted average exercise price of the outstanding options. The Group has weighted average share options of 3,201,099 (2014: 14,072,329) which were not included in the calculation of diluted loss per share because they are non-dilutive for the year presented.

9. Property, plant and equipment

Group	Leasehold improvements £	Office furniture and equipment £	Total £
Cost
At 1 July 2013	14,822	123,779	138,601
Additions	-	1,028	1,028
Disposals	-	(201)	(201)
Currency exchange	-	(45)	(45)
At 30 June 2014	14,822	124,561	139,383
Additions	-	-	-
At 30 June 2015	14,822	124,561	139,383
Depreciation
At 1 July 2013	(1,395)	(89,667)	(91,062)
Charge	(9,361)	(16,422)	(25,783)
Currency exchange	-	24	24
At 30 June 2014	(10,756)	(106,065)	(116,821)
Charge	(4,066)	(9,668)	(13,734)
At 30 June 2015	(14,822)	(115,733)	(130,555)
Net book value
At 30 June 2015	-	8,828	8,828
At 30 June 2014	4,066	18,496	22,562

Company	Leasehold improvements £	Office  furniture  and equipment £	Total £
Cost
At 1 July 2013	14,822	123,342	138,164
Additions	-	1,028	1,028
At 30 June 2014	14,822	124,370	139,192
Additions	-	-	-
At 30 June 2015	14,822	124,370	139,192
Depreciation
At 1 July 2013	(1,395)	(89,476)	(90,871)
Charge	(9,361)	(16,398)	(25,759)
At 30 June 2014	(10,756)	(105,874)	(116,630)
Charge	(4,066)	(9,668)	(13,734)
At 30 June 2015	(14,822)	(115,542)	(130,364)
Net book value
At 30 June 2015	-	8,828	8,828
At 30 June 2014	4,066	18,496	22,562

10. Investments in subsidiaries

Company	£
Cost
At 30 June 2015 and 2014	482
Impairment
At 30 June 2015 and 2014	-
Net carrying value
Net book amount at 30 June 2015 and 2014	482

The Parent Company of the Group holds more than 50% of the share capital of the following companies, the results of which are consolidated:

Company	Country of registration	Class	Proportion held by Group	Nature of business
Red Rock Uranium Pty Limited	Australia	Ordinary	100%	Mineral exploration
Regency Mines Australasia Pty Limited	Australia	Ordinary	100%	Mineral exploration
Regency Resources Limited	Australia	Ordinary	100%	Dormant
Regency Resources Inc	USA	Ordinary	100%	Oil exploration

11. Investments in associates and joint ventures

	Group		Company
Carrying balance	£		£
At 30 June 2013	2,546,222		2,662,969
Additions	153,000		153,000
Loss on dilution of interest	(24,232)		-
Share of total comprehensive loss for the year	(440,746)		-
At 30 June 2014	2,234,244		2,815,969
Additions	75,000		75,000
Impairment	-		(1,063,515)
Loss on dilution of interest	(215,157)		-
Share of total comprehensive loss for the year	(433,233)		-
Net book amount at 30 June 2015	1,660,854		1,827,454

The market value of investments in listed associates as at 30 June 2015 was £113,560 (2014: £530,933).

The Parent Company of the Group, as at 30 June 2015, had a significant influence by virtue other than a shareholding of over 20% or had joint control through a joint venture contractual arrangement in the following companies:

Name	Country of registration	Class	Proportion held by Group	Accounting year end
Direct
Red Rock Resources plc	England and Wales	Ordinary	4.87%	30 June 2015
Oro Nickel (Vanuatu) Limited	Vanuatu	Ordinary	50.00%	30 June 2015

Summarised financial information for the Company's associates and joint ventures, where available, as at 30 June 2015 is given below:

	For the year ended 30 June 2015				As at 30 June 2015
Name	Revenue £	Loss £	Total  comprehensive expense £		Assets £	Liabilities £
Red Rock Resources plc	-	(8,411,541)	(8,604,716)		9,625,758	(2,098,270)

12. Available for sale financial assets

	Group £	Company £
Net book amount
At 30 June 2013	4,343,140	4,343,140
Additions during the year	1,249,449	1,249,449
Disposals during year	(710,491)	(813,531)
Revaluation	(270,265)	(167,225)
At 30 June 2014	4,611,833	4,611,833
Additions during the year	402,314	300,000
Disposals during year	(987,801)	(987,801)
Impairments during year	(3,425,976)	(3,425,976)
Revaluation	394,641	411,693
Net book value at 30 June 2015	995,011	909,749

Note: see Note 21 for details of listed and unlisted AFS assets.

13. Exploration assets

	Group			Company
	2015 £	2014 £		2015 £	2014 £
Cost
At 30 June 2014	2,684,318	2,412,505		698,926	248,242
Additions during the year	347,428	519,140		315,147	450,684
Disposals in the year	(200,647)	(48,152)		-	-
Exchange gains	(290,355)	(199,175)		-	-
At 30 June 2015	2,540,744	2,684,318		1,014,073	698,926
Impairment
At 30 June 2014	(1,486,012)	(683,864)		-	-
Impairments recognised in the year	(553,096)	(849,895)		(351,689)	-
Disposals in the year	87,290	-		-	-
Exchange gains	240,225	47,747		-	-
At 30 June 2015	(1,711,593)	(1,486,012)		(351,689)	-
Net book value
At 30 June 2015	829,151	1,198,306		662,384	698,926
At 30 June 2014	1,198,306	1,728,641		698,926	248,242

14. Trade and other receivables

	Group			Company
	2015 £	2014 £		2015 £	2014 £
Sundry debtors	287,211	200,533		91,794	36,116
Prepayments	29,683	52,424		29,683	52,424
Amounts owed by Group undertakings	-	-		913,340	859,082
Amounts owed by related parties:
- due from associates and joint ventures	1,513,789	1,398,799		1,513,789	1,398,799
- due from key management	-	7,846		-	7,846
Total	1,830,683	1,659,602		2,548,606	2,354,267

15. Trade and other payables

	Group			Company
	2015 £	2014 £		2015 £	2014 £
Trade and other payables	192,034	270,549		181,867	268,874
Accruals	197,680	231,874		197,680	231,874
Amounts due to related parties:
- due to associates	-	1,004		-	-
- due to key management	3,971	-		3,971	-
Trade and other payables	393,685	503,427		383,518	500,748
Short-term borrowings	294,990	488,263		294,990	488,263
Total	688,675	991,690		678,508	989,011

YA Global Master SPV Limited

A short-term loan of £99,787 (2014: £288,263 and £200,000) was provided by YA Global Master SPV Limited. Interest is charged on this loan at a rate of 12% (2014: 12% and 10%) per annum. Repayments are made either in cash or by issue of shares in the Company in line with the terms of the agreement. The Company has pledged all of its shares in Oro Nickel (Vanuatu) Limited as well as 85,000,000 shares in Red Rock Resources plc as security for the loans.

16. Deferred tax assets/(liabilities)

The movement in the Company's and Group's net deferred tax position is as follows:

Group and Company	2015 £	2014 £
At 30 June 2014	-	-
Deferred tax credit recognised in the Income Statement	-	6,635
Deferred tax (charge) recognised in the Statement of Other Comprehensive Income	-	(6,635)
At 30 June 2015	-	-

The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon during the period:

Group and Company	Investments £	Other £	Total £
Asset/(liability) at 30 June 2013	-	-	-
Credit to the Income Statement for the year	6,635	-	6,635
Charge to the Statement of Comprehensive Income for the year	(6,635)	-	(6,635)
Asset/(liability) at 30 June 2014 and 30 June 2015	-	-	-

17. Reserves

Share premium

The share premium account represents the excess of consideration received for shares issued above their nominal value net of transaction costs.

Foreign currency translation reserve

The translation reserve represents the exchange gains and losses that have arisen on the retranslation of overseas operations.

Retained earnings

Retained earnings represent the cumulative profit and loss net of distributions to owners.

Available for sale financial asset reserve

The available for sale financial asset reserve represents the cumulative revaluation gains and losses in respect of available for sale trade investments.

Associate investment reserve

The associate investments reserve represents the cumulative share of gains/losses of associates recognised in the Statement of Other Comprehensive Income.

Share-based payment reserve

The share-based payment reserve represents the cumulative charge for options granted, still outstanding and not exercised.

18. Share capital - Company

The share capital of the Company is as follows:

Issued and fully paid	2015 £	2014 £
1,788,918,926 deferred shares of £0.0009 each	1,610,027	-
1,475,402,734 ordinary shares of £0.001 each	-	1,475,403
2,052,990,373 ordinary shares of £0.0001 each	205,299	-
As at 30 June	1,815,326	1,475,403

Movement in share capital	Number	Nominal £
Ordinary shares of £0.001 each
As at 30 June 2013	1,106,049,883	1,106,050
Shares issued in the year to 30 June 2014	369,352,851	369,353
As at 30 June 2014	1,475,402,734	1,475,403
Issued 12 August 2014 at 0.28 pence per share	60,500,063	60,500
Issued 29 August 2014 at 0.28 pence per share	56,321,437	56,321
Issued 29 September 2014 at 0.40 pence per share	61,925,000	61,925
Issued 29 September 2014 at 0.477263 pence per share	41,905,659	41,906
Issued 27 November 2014 at 0.1721 pence per share	92,864,033	92,864
As at 20 February 2015, pre-share re-organisation	1,788,918,926	1,788,919
20 February 2015, Share Re-organisation (see below)
Issue of deferred shares of £0.0009 each	(1,788,918,926)	(1,610,027)
Issue of new ordinary shares of £0.0001 each	1,788,918,926	178,892
Issued 02 April 2015 at 0.07 pence per share	124,907,129	12,491
Issued 30 June 2015 at 0.071858 pence per share	139,164,318	13,916
Total shares issued in the year	577,587,639	339,923
As at 30 June 2015 - ordinary shares of £0.0001 each	2,052,990,373	205,299

Change in Nominal Value / share re-organisation

The nominal value of shares in the company was originally 0.1 pence.  At a shareholders meeting on 20 February 2015, the Company's shareholders approved a re-organisation of the company's shares which resulted in the creation of two classes of shares, being:

·      Ordinary shares with a nominal value of 0.01 pence, which will continue as the company's listed securities.

·      Deferred shares with a value of 0.09 pence which, subject to the provisions of the Companies Act 2006, may be cancelled by the company, or bought back for £1 and then cancelled. These deferred shares are not quoted and carry no rights whatsoever.

Capital management

Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.

The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.

19. Share-based payments

Employee share options

In prior years, the Company established an employee share option plan to enable the issue of options as part of the remuneration of key management personnel and Directors to enable them to purchase ordinary shares in the Company. Under the plan, the options were granted for no consideration; they were granted for the periods specified and vested immediately. Options granted under the plan carry no dividend or voting rights.

Under IFRS 2 "Share-based Payments", the Company determines the fair value of the options issued to Directors and employees as remuneration and recognises the amount as an expense in the Income Statement with a corresponding increase in equity.

The expense was charged in full during the previous years. There is no charge during the year.

The Company and Group have no outstanding options to subscribe for ordinary shares.

	2015			2014
Company and Group	Number of options Number	Weighted average exercise price Pence		Number of options Number	Weighted average exercise price Pence
Outstanding at the beginning of the period	13,200,000	3.00		18,000,000	3.00
Expired	(13,200,000)	3.00		(4,800,000)	3.00
Outstanding at the end of the period	-	-		13,200,000	3.00
Exercisable at the end of the period	-	-		13,200,000	3.00

Share Incentive Plan

The Company operates a tax efficient Share Incentive Plan, a government approved scheme, the terms of which provide for an equal reward to every employee, including Directors, who had served for three months or more at the time of issue. The terms of the plan provide for:

·      each employee to be given the right to subscribe any amount up to £150 per month with Trustees who invest the monies in the Company's shares;

·      the Company to match the employee's investment by contributing an amount equal to double the employee's investment ("matching shares"); and

·      the Company to award free shares to a maximum of £3,600 per employee per annum.

The subscriptions remain free of taxation and national insurance if held for five years.

The fair value of services provided is recognised as an expense in the Income Statement at grant date and is determined indirectly by reference to the fair value of the free and matching shares granted. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date.

During the financial year, a total of 103,271,418 free and matching shares were awarded with a fair value of 0.07 pence, resulting in a share-based payment charge of £72,290 in the income statement.

20. Cash and cash equivalents

Group	30 June 2015 £	Cash flow £	30 June 2014 £
Cash in hand and at bank	3,565	(263,760)	267,325

Company	30 June 2015 £	Cash flow £	30 June 2014 £
Cash in hand and at bank	2,432	(262,145)	264,577

21. Financial instruments

21.1 Categories of financial instruments

The Group and Company holds a number of financial instruments, including bank deposits, short-term investments, loans and receivables and trade payables.

The carrying amounts for each category of financial instrument, measured in accordance with IAS 39 as detailed in the accounting policies, are as follows:

Group 30 June 2015	2015 £	2014 £
Financial assets
Available for sale financial assets at fair value through other comprehensive income
Quoted equity shares	232,572	423,418
Available for sale financial assets at cost
Unquoted equity shares	762,439	4,188,415
Total available for sale financial assets	995,011	4,611,833
Loans and receivables
Trade and other receivables	1,830,683	1,659,602
Total financial assets	2,825,694	6,271,435
Total current	1,830,683	1,659,602
Total non-current	995,011	4,611,833

The carrying value of non-current financial assets in the Company equals that of the Group. The carrying value of current financial assets in the Company is higher than that of the Group mainly due to intercompany debt eliminated at the Group level.

Available for sale financial assets at cost

As at 30 June 2015, £762,439 of the Group's available for sale financial assets are valued at cost less impairment due to the investment being privately held and no quoted market price information is available. This consists of the Group's investment in Direct Nickel Ltd. There is currently no intention to dispose of this investment in the foreseeable future.

Financial instruments held at cost less impairment can be reconciled from beginning to ending balances as follows:

	Unlisted investments at cost
Group and Company	2015 £	2014 £
Brought forward	4,188,415	4,188,415
Additions/(disposals)	-	-
Impairment	(3,425,976)	-
Carried forward	762,439	4,188,415

Group 30 June 2015	2015 £	2014 £
Financial liabilities
Loans and borrowings
Trade and other payables	393,685	503,427
Short-term borrowings	294,990	488,263
Total financial liabilities	688,675	991,690
Total current	688,675	991,690
Total non-current	-	-

Current financial liabilities in the Company are lower than that of the Group, due to trade and other payables in subsidiary companies.

Trade receivables and trade payables

Management assessed that other receivables and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

Borrowings

The carrying value of interest-bearing loans and borrowings is determined by calculating present values at the reporting date, using the issuer's borrowing rate.

21.2 Fair values

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

·      Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

·      Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

·      Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The carrying amount of the Group and Company's financial assets and liabilities is not materially different to their fair value. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Where a quoted price in an active market is available, the fair value is based on the quoted price at the end of the reporting period. In the absence of a quoted price in an active market, the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

The following table provides the fair value measurement hierarchy of the Group's assets and liabilities:

Group	Level 1 £	Level 2 £	Level 3 £	Total £
30 June 2015
Available for sale financial assets at fair value through other comprehensive income - Quoted equity shares	232,572	-	-	232,572
- Unquoted equity shares	-	762,439	-	762,439
30 June 2014
Available for sale financial assets at fair value through other comprehensive income - Quoted equity shares	423,418	-	-	423,418
- Unquoted equity shares	-	4,188,415	-	4,188,415

21.3 Financial risk management policies

The Directors monitor the Group's financial risk management policies and exposures and approve financial transactions.

The Directors' overall risk management strategy seeks to assist the consolidated Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements.

Specific financial risk exposures and management

The main risks the Group is exposed to through its financial instruments are credit risk and market risk consisting of interest rate risk, liquidity risk, equity price risk and foreign exchange risk.

Credit risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.

Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial liability of significant customers and counterparties), ensuring, to the extent possible, that customers and counterparties to transactions are of sound creditworthiness. Such monitoring is used in assessing receivables for impairment.

Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the Directors have otherwise cleared as being financially sound.

Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in note 14.

There are no amounts of collateral held as security in respect of trade and other receivables.

The consolidated Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated Group.

Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:

·      monitoring undrawn credit facilities;

·      obtaining funding from a variety of sources; and

·      maintaining a reputable credit profile.

The Directors are confident that adequate resources exist to finance operations to commercial exploration and that controls over expenditure are carefully managed. All financial liabilities are due to be settled within the next twelve months.

Market risk

Interest rate risk

The Company is not exposed to any material interest rate risk because interest rates on loans are fixed in advance.

Equity price risk

Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities, but also include political, economic, social, technical, environmental and regulatory factors.

The Group's exposure to price risk on listed investments is as follows:

Group	2015 £	2014 £
Change in equity:
- increase in listed investments by 10%	23,257	42,342
- decrease in listed investments by 10%	(23,257)	(42,342)

Foreign exchange risk

The Group's transactions are carried out in a variety of currencies, including Australian Dollar, Canadian Dollar, Papua New Guinea Kina and UK Sterling.

To mitigate the Group's exposure to foreign currency risk, non-Sterling cash flows are monitored. The Group does not enter into forward exchange contracts to mitigate the exposure to foreign currency risk as amounts paid and received in specific currencies are expected to largely offset one another and the currencies most widely traded in are relatively stable.

The Directors consider the balances most susceptible to foreign currency movements to be the available for sale financial assets at market price.

These assets are denominated in the following currencies:

Group  30 June 2015	GBP £	AUD $	CAD $	Total £
Available for sale investments at market price	144,732	85,265	2,575	232,572

Group 30 June 2014	GBP £	AUD $	CAD $	Total £
Available for sale investments at market price	129,138	286,485	7,795	423,418

The following table illustrates the sensitivity of the value of investments at market price in regards to the GBP, Australian Dollar and Canadian Dollar exchange rates.

It assumes a +/-8% (2014: +/-8%) change in the AUD/GBP exchange rate and a +/-6% (2014: +/-6%) change in the CAD/GBP exchange rate for the year ended 30 June 2015. These percentages have been based on the average market volatility in exchange rates in the previous twelve months.

Impact on available for sale financial assets at market price

	2015 £	2014 £
8%/8% increase in AUD fx rate against GBP	6,821	22,919
8%/8% decrease in AUD fx rate against GBP	(6,821)	(22,919)
6%/6% increase in CAD fx rate against GBP	155	468
6%/6% decrease in CAD fx rate against GBP	(155)	(468)

Exposures to foreign exchange rates vary during the year depending on the volume and nature of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group's exposure to currency risk.

22. Significant agreements and transactions

UK Onshore Oil and Gas Project

·      On 11 July 2014, the Company announced that it signed a Heads of Agreement ("HOA") with Horse Hill Developments Ltd ("HHDL") for the Company to acquire a 5% stake in HHDL. HHDL is a newly incorporated special purpose company which has a 65% participating interest in the Petroleum Exploration and Development Licence 137 ("PEDL 137") in the Weald Basin, UK.  The participants in the Horse Hill -1 well are HHDL as operator with a 65% interest and Magellan Petroleum Corporation with a 35% interest.

The initial consideration payable by the Company under the HOA was £300,000. A non-refundable deposit of £10,000 was paid on signing of the HOA and the balance subject to completion and execution of definitive agreements. The Company made further payments of the remaining £290,000 according to cash calls required for drilling the well.  Following the payments, the Company announced on 18 September 2014 that the HOA previously put in place for the Company to own a 5% interest in HHDL was converted to a definitive Investment Agreement confirming the Company owns 5% of HHDL.

The Company also owns an additional 0.47% indirect interest in HHDL by virtue of its 9.39% ownership in Alba Mineral Resources Plc ("Alba"). Alba owns 5% of HHDL.

The Company's interest in Alba was subsequently sold in the second half of 2015.

·      On 12 March 2015, the Company announced that it has executed a binding term sheet to sell its interests in Horse Hill Developments Ltd ("HHDL") for a total consideration of £300,000 payable in cash. The sale was completed on 8 April 2015.

West Virginia Shallow Oil Project

·      On 24 September 2014, the Company announced that Regency Resources Inc. ("RRI"), a newly-formed 100% owned subsidiary of the Company, signed an exploration and investment agreement to participate in an unincorporated joint venture with Carter Oil and Gas and others for RRI to obtain a 25% working interest ("WI") in the West Virginia Shallow-Oil Project ("WVSO") which initially includes two wells to be drilled and operated by Abarta Oil & Gas Co. The WI is equivalent to not less than 20.25% Net Revenue Interest ("NRI") as specified under the investment agreement. The remaining 75% working interest is to be held by various investors including a 25% stake by Abarta Oil & Gas Co.  An initial consideration of US$19.5k was settled on signing. As of quarter 4 2015 the project was considered on hold depending on movements in oil prices and a decision by the parties involved.

Fraser West Project in Australia

·      On 20 February 2015, the Company announced that RAM Resources ("RAM") had issued 35,000,000 shares to the Company by conversion of 5.6% out of the 13.5% carried interest retained by the Company in the Fraser Range tenements. The shares have been issued to the Company at a deemed issue price of AUD 0.8c, valuing the shares at AUD$280,000.

·      On 3 June 2015, the Company announced that RAM had agreed to issue a further 39,000,000 shares at AUD0.005 per share reflecting conversion of 3.9% of its carried interest in the Fraser West Project following RAM placing of up to AUD1.6m. Following this conversion RAM will own 96% of the Fraser West Project and the Company will retain a 4% carried interest.

Munglinup Graphite

·      On 20 May 2015, the Company announced that it has reached agreements with the holders of adjacent tenements formerly held by Graphite Australia Pty Ltd (the "GAPL Tenements") and other parties. These agreements will enable development of the neighbouring Halberts property, formerly a mine producing high quality graphite, to proceed. Under the agreements, Regency Mines Australasia Pty Ltd ("RGMA") will surrender its interest in the Munglinup tenements. Gold Terrace Pty Ltd, a private Australian company, and the holder of the GAPL Tenements, will within a year of execution use its best endeavours to issue RGMA with 3,000,000 shares in the capital of the proposed listed vehicle, with a current value of approximately AUD200,000, and in the event of failing to do so will pay RGMA the sum of AUD200,000 within 54 weeks of execution.

Share Incentive Plan

·      On 14 April 2015, the Company announced that it had approved the issue of 124,907,129 shares under the Company's Share Incentive Plan with reference to mid-market price of 0.07 pence on 31 March 2015.

Reorganisation of Share Capital

·      On 20 February 2015, the Company announced that a resolution was passed at the General Meeting held that day whereby  each of the 1,788,918,926 existing Ordinary Shares will be subdivided into one new Ordinary Share of 0.01p each and one Deferred Share of 0.09p each.

23. Commitments

As at 30 June 2015, the Company had entered into the following commitments:

·      Exploration commitments: On-going exploration expenditure is required to maintain title to the Group mineral exploration permits. No provision has been made in the financial statements for these amounts as the expenditure is expected to be fulfilled in the normal course of the operations of the Group.

·      The Company has an existing joint lease agreement with Red Rock Resources plc and Greatland Gold plc relating to Ivybridge House, 1 Adam Street, London WC2N 6LE. The lease is non-cancellable until 1 December 2017. Future minimum annual rental and service charges payable by the Company is £38,850.

24. Related party transactions

·      On 5 April 2013, Regency Mines plc, Red Rock Resources plc and Greatland Gold plc, companies of which Andrew Bell and John Watkins are also directors, entered into a joint lease at Ivybridge House, 1 Adam Street, London WC2N 6LE. The three companies also share service costs and other outgoings of an office. The total of these costs charged to Red Rock Resources plc during the year was £151,632 (2014:178,327), of which £48,725 (2014:£55,784) represented the Company's share of the office rent and the balance services provided. Regency charges Greatland Gold plc fixed quarterly fees for rent and office costs which totals to £24,000 during the year (2014: £24,000).

·      Professional staff employed by the Company are sub-contracted to Red Rock Resources plc to work on specific assignments as necessary. During the year, total costs were £105,848 (2014: £174,863).

·      The costs incurred by the Company on behalf of Red Rock Resources plc are invoiced at each month end and settled as soon as may be possible. By agreement, the Company charges interest at the rate of 0.5% per month on all balances outstanding at each month end until they are settled. The total charged to Red Rock Resources plc for the year was £16,865 (2014: £11,602).

·      Related party receivables and payables are disclosed in notes 14 and 15, respectively.

·      The key management personnel are the Directors and their remuneration is disclosed within note 7.

25. Events after the reporting period

Issue of equity

·      On 20 August 2015, the Company issued 444,444,600 new ordinary shares of 0.01 pence each at a price of £0.00045 per share for a total consideration of £200,000. Additionally, for every two new ordinary shares subscribed for, one warrant will be issued to the subscriber. The warrants will enable the holder to subscribe for one new ordinary share in the Company at an exercise price of £0.00065 at any time from 4 September 2015 to 3 March 2017.

Board changes

·      On 15 September 2015, John Watkins resigned from the Board of Directors.

·      On 30 September 2015, Julian Lee resigned from the Board of Directors.

Sale of interest

·      On 22 October 2015, the Company announced that it sold the whole of its residual 4.23% interest in Alba Mineral Resources plc ("Alba") for net proceeds of £91,878. The interest comprised 29,715,006 Ordinary Shares in Alba which at the mid-market closing price on 21 October 2015 had a market value of £96,574. The sale represents a £17,861 surplus over book cost of £74,017.

Oil and Gas Co-operation Agreement

On 16 November 2015, the Company announced that it has begun active co-operation with American Resources Inc aimed at identifying and pursuing oil and gas investment opportunities in the Southern United States. The first project is contingent on satisfactory leasing arrangements and would involve the Company taking a 50% Working Interest in the planned redevelopment of the North Francitas Oil project in Jackson and Matagorda Counties Texas, USA, for an aggregate cost of up to US$ 430,000.

26. Control

There is considered to be no controlling related party.

27. These results are audited, however, the financial information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The consolidated statement of financial position at 30 June 2015 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2015 statutory financial statements.  The auditors have reported on the 2015 financial statements; their report was unqualified but did contain an emphasis of matter paragraph on going concern as follows;

''Without qualifying our opinion, we draw attention to note 1.2 in the financial statements which indicates that the Group incurred a net loss of £5,888,742 during the year ended 30 June 2015 and, as of that date, the Group's current liabilities exceeded its current assets by £368,216, on the basis of excluding amounts due from associates and joint ventures of £1,513,789.

As explained in note 1.2, the Group has implemented plans to minimise its cash outflows by reducing its overheads and corporate expenditure.  The Group is also considering disposals of investments to improve liquidity.

These conditions, along with other matters as set forth in Note 1.2, indicate the existence of a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.''

It contained no statement under sections 498(2) or (3) of the Companies Act 2006. The financial statements for 2015 will be delivered to the Registrar of Companies by 31 December 2015.

1. A copy of the Company's annual report and financial statements for 2015 will be made available on the Company's website www.regency-mines.com shortly and at the Annual General Meeting which will be held at Ivybridge House, 1 Adam Street, London WC2N 6LE on 23 December 2015 at 11.00am; in addition the Annual Report will be posted to the Shareholders who requested a hard copy.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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