GB00B63R0322

29 July 2019

Equatorial Mining and Exploration Plc

("EME" or the "Company")

Audited Annual Results for the year ended 31 December 2018

Chairman's statement

The highlight of the 12 month period under review was the agreement with South African coal mining company, ARQ Minerals announced on the 17^th July 2018.  What followed was a rapid process involving the move of the Company's coal mine (the St Leonard Mine in Kogi State) into early production and the commencement of small scale supply into the local cement industry.

During December, the mine was beset with unusually heavy rain fall making short term progress impossible. The decision was made to stop activity, conserve funds and consider a newly introduced alternative opportunity, a mining project in Rwanda.

On 18^th December 2018 the Company announced the appointment of two new directors; Charles Bray and Mike Staten to enable the Rwandan project to be fully examined. It became evident in the early part of 2019 that this new opportunity would eclipse the existing project in Nigeria in terms of viability and economic potential and the decision was made to formalise the process through the announcement made on 3^rd June. In the announcement we communicated that Eastinco has concluded an exclusive joint venture contractual relationship providing for the mining and subsequent off-take of coltan ore with a local Rwandan mining co-operative. Mineral mining in Rwanda is conducted mainly as artisanal and small-scale mining. Following completion of the acquisition, the Company will be positioned to modernise, mechanise, implement health and safety measures and explore the expansion of these joint-venture sites and pursue other Rwandan and central and East African mining opportunities

The Company took the view that Eastinco represented an exceptional acquisition for the Company and so followed an extensive period of due diligence, document production and funds raising resulting in the announcement of 2^nd July 2019.

Post Year End Update

This set of results has been delayed as a result of the Company committing itself entirely to the Eastinco acquisition and the £1.3 million fund raise.  As the fund raise is due to be completed at the end of July 2019, management is now focussed on completing the acquisition of Eastinco. In conjunction with the completion of the Eastinco acquisition the company is working with the Eastinco management on the implementation of our initial coltan mining project and to identify new individual and joint-venture opportunities to drive the company's growth. Additionally, the fund raising capital allows for Eastinco to trade coltan, tin, and tungsten to arbitrage local market price differentials.

We are excited to get started and look forward to updating shareholders as to our progress. Following completion of the fund raising, Eastinco can deploy capital on existing, producing, and profitable mines to significantly increase productivity and improve worker health and safety. This commitment allows for the community to secure its long-term future with the artisanal mine transitioning to surface mining while improving on the bottom line for Eastinco and the Company.

The intended fundraising targets £1.3 million of gross investment proceeds which will be utilised to fund Eastinco's operations and the Company's overheads.  Each newly issued share provided to investors will allow for them to receive one new warrant with an exercise price of £0.00015 expiring in September 2020.  Thus, should the Company's share price exceed this level an anticipated £2.0 million of additional gross proceeds will likely become available to fund expansion.

C Bray

Chairman

24 July 2019

The Directors of the Company accept responsibility for the announcement. 

Equatorial Mining & Exploration Plc:                                    charles.bray@eme-plc.com

Charles Bray, Executive Chairman

NEX EXCHANGE CORPORATE ADVISER:

Alexander David Securities Limited

David Scott -Corporate Finance

James Dewhurst - Corporate Broking 

Telephone: +44 (0) 20 7448 9820

http://www.ad-securities.com

49 Queen Victoria Street, London EC4N 4SA

Strategic report

PRINCIPAL ACTIVITIES

Equatorial Mining and Exploration plc is an investment vehicle, admitted to trading on NEX Exchange Growth Market.  Since admission, the board has been evaluating a number of acquisition possibilities.

The Company's former Nigerian subsidiary which was incorporated in 2016 and was effectively dormant commenced mining activities in December 2017 and on a full mining basis in July 2018. At present it the operations have been put on hold and the company is under care and maintenance as it

re-evaluates the potential for continued operations.

KEY PERFORMANCE INDICATORS

Given the straightforward nature of the business at this time, the Directors are of the opinion that analysis using KPI's is not necessary for an understanding of the development, performance or position of the business.  The Directors will look to introduce suitable KPI's following any acquisition.

PRINCIPAL RISKS AND UNCERTAINTIES FACING THE COMPANY

The Company is at an early stage of development and is dependent upon the continuing ability of the Directors to identify suitable investment or acquisition opportunities and implement the Company's Strategy.  During the identification process the Company's resources may be extended without return on investigative effort and due diligence. The company may face competition to acquire particular companies or investments.  Competing acquirers may have greater financial resources than the Company.

The company will need to raise further funds in the future, either to complete a proposed acquisition or investment, or to raise additional working capital for such an acquisition or investment.  There can be no guarantee that additional funds can be raised when necessary.  In these circumstances the company would need to secure additional funding from other sources and/or scale back its future plans. We refer to the paragraph on going concern which is included in the Directors report for further details.

BUSINESS REVIEW

In the Admission Document issued on 28 April 2011, the Company's stated investment criteria were summarised as follows:

-     the target acquisition or investment will be in the prospecting or mining of valuable minerals;

-     the target acquisition or investment should be profitable or have a significant asset value and may have opportunities for consolidation or further development. The Directors will, on an exceptional basis, also consider loss-making targets where, in the Directors' opinion, there is clear opportunity to develop a profitable and attractive business; and

-     the owners of the target acquisition or investment should accept part of the consideration for any acquisition in new ordinary shares or other securities to be issued by the Company.

Since the Company's admission, and as made clear in subsequent announcements, the Directors have widened their search for the optimal investment beyond rare earth metals into the full range of precious and industrial metals, and other natural resources such as fossil fuels.

BUSINESS REVIEW (Continued…)

In the meantime, the Company has maintained its NEX Exchange Growth Market listing on minimal overhead and maintains a small cash balance.  The quotation was suspended on 31 May 2018, pending publication of these accounts.

The Company looks forward to keeping shareholders informed of developments and I express my gratitude for their patience to date.

RESULTS AND DIVIDENDS

The Company incurred an operating loss of £232,000 for the year (2017 - £309,000). Interest income was £Nil (2017 - £Nil), interest paid refunded was £10,702 (2017 - £Nil), resulting in a loss for the year before and after tax of £221,000 (2017 - £309,000)

The directors do not recommend the payment of a dividend for the period.

FUTURE DEVELOPMENTS

The Company will continue to investigate the opportunities afforded by its Nigerian investment and look to solidify operations in Rwanda to grow the investment opportunities relating to coltan, tin, and tungsten mining either through joint-venture relationships or through the direct ownership of mines.

M Staten

Director

24 July 2019

EQUATORIAL MINING AND EXPLORATION PLC

INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2018

The notes on pages 24 to 38 are an integral part of these financial statements

EQUATORIAL MINING AND EXPLORATION PLC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

The notes on pages 24 to 38 are an integral part of these financial statements

EQUATORIAL MINING AND EXPLORATION PLC

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2018

The notes on pages 24 to 38 are an integral part of these financial statements.

Reserves

EQUATORIAL MINING AND EXPLORATION PLC

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2018

The notes on pages 24 to 38 are an integral part of these financial statements

These financial statements were approved for issue by the Board of Directors on 24 July 2019 and were signed on its behalf by:

M Staten

Director

COMPANY REGISTRATION NUMBER 07496976

(England and Wales)
 

EQUATORIAL MINING AND EXPLORATION PLC

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2018