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Lithic Metals and Energy Limited

("Lithic" or the Company")

Interim results for the 6 months ended 30 September 2009

Lithic (AIM code: LMY), the AIM-quoted African nickel and uranium exploration company, today announces its interim results for the six months ended 30th September 2009.

Directors' report

I have pleasure in presenting the unaudited interim financial statements of Lithic for the six months ended 30 September 2009. 

Market conditions have been particularly challenging over recent months and following shareholder pressure for a change in strategy, a new Board was appointed at a Special General Meeting convened in July this year and a strategic review of the business was immediately announced. Whilst this has been ongoing, the Company has significantly reduced its exploration expenditure across all assets.

On 29 October 2009 the Company announced the intention to acquire the entire issued capital of Amber Petroleum Limited, a private company incorporated in the British Virgin Islands whose focus is on investment in junior uranium mining and exploration companies. On the same day trading in the Company's shares on the London Stock Exchange was suspended.

It is anticipated that the Acquisition, and the New Business Strategy and as a result of this an increase in the authorised capital of the Company will be put before a Special General Meeting (SGM) to be convened in due course. It is anticipated that the SGM will approve the completion of the transaction and admission of the enlarged share capital of the Company to be admitted to AIM before 31 December 2009. 

The board is committed to creating an International mining and exploration group focused on acquiring and developing resource projects, in particular uranium and nickel assets. The Acquisition of Amber Petroleum Limited is an integral part of this strategy. The Board look forward to providing additional updates in due course.

Financial Information

The Company and it subsidiaries report a deficit after tax for the half year ended 30 September 2009 of £586,073 (compared to a deficit of £305,977 for the six months ended 30 September 2008).

No dividend was paid or declared during the period.

The basic deficit and diluted deficit per share for the period was 0.46 pence (30 September 2008: 0.20 pence). 

For more information please contact:

David Weill	Nicola Marrin/Catherine Leftley	Laurence Reed
Lithic Metals & Energy Ltd	Seymour Pierce	Threadneedle Communications
Tel: +44 (0) 207 881 0180	Tel: +44 (0) 207 107 8000	Tel: +44 (0) 20 7936 9696

 

 

 

 

Condensed Consolidated Statement of Comprehensive Income 

For the six months ended 30 September 2009

	Note	Unaudited  six months ended		Unaudited six months ended		Audited  year  ended
		September 2009		September 2008		March  2009
		£		£		£
Total revenue Impairment charge Other expenses	3 3	28,268 (565) (613,776)		222,982 - (528,959)		310,082 (1,982,193) (930,527)
Deficit before income tax		(586,073)		(305,977)		(2,602,638)
Deficit before and after tax for the half-year		(586,073)		(305,977)		(2,602,638)
Other comprehensive income:
Exchange differences on translation of foreign entities		36,886		158,570		798,969
Income tax effect		-		-		-
Total other comprehensive income		36,886		158,570		798,969
TOTAL COMPREHENSIVE INCOME/(DEFICIT) - attributable to owners		(549,187)		(147,407)		(1,803,669)
Earnings per share:
- Basic and diluted deficit per share (pence)	4	(0.46)		(0.20)		(1.78)

Condensed Consolidated Statement of Cash Flows

for the six months ended 30 September 2009

	Unaudited  six months ended			Unaudited  six months ended		Audited  Year  ended
	September 2009			September 2008		March  2009
	£			£		£
Cash flows from operating activities Payments to suppliers and employees Interest received Management fee received	(528,839) 2,499 -		(534,578) 99,690 122,893			(744,431) 122,434 -
Net cash utilised by operating activities	(526,340)		(311,995)			(621,997)
Cash flows from investing activities Payments for mineral exploration activities Payments for business development projects Payments for property, plant and equipment Proceeds from Insurers and on sale of assets	(4,011) (84,697) - -		(541,301) (886,213) (156,662) -			(1,126,237) (1,317,281) (142,988) 4,706
Net cash utilised by investing activities	(88,708)		(1,584,176)			(2,581,800)
Cash flows from financing activities Share issue costs	-		-			(153,100)
Net cash generated from financing activities	-		-			(153,100)
Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period	(615,048) 1,563,912		(1,896,171) 4,920,809			(3,356,897) 4,920,809
Cash and cash equivalents at end of the year - (Note 7)	948,864		3,024,638			1,563,912

Condensed Consolidated Statement of Financial Position

at 30 September 2009

	Note	Unaudited		Unaudited		Audited
		September 2009		September 2008		March 2009
		£		£		£
ASSETS
Non-current assets Property, plant and equipment Mineral properties Other assets	5 6	206,056 2,936,020 1,722,626		288,824 3,724,883 1,126,067		294,443 2,932,009 1,522,120
Total non current assets		4,864,702		5,139,774		4,748,572
Current assets Trade and other receivables Prepayments  Cash and cash equivalents	7	87,278 85,032 948,864		130,620 133,321 3,024,638		137,997 50,148 1,563,912
Total current assets		1,121,174		3,288,579		1,752,057
Total assets		5,985,876		8,428,353		6,500,629
EQUITY AND LIABILITIES
Current liabilities Trade and other payables Provisions		224,931 9,896		317,000 36,370		169,699 41,248
Total liabilities		234,827		353,370		210,947
Equity Issued capital Share premium account Options and Warrants Reserve Foreign currency translation reserve Accumulated deficit	9 9 10 10 10	1,262,972 7,815,178 295,899 795,040 (4,418,040)		1,522,972 7,838,278 272,492 113,251 (1,672,010)		1,392,972 7,815,178 285,346 758,153 (3,961,967)
Total equity		5,751,049		8,074,983		6,289,682
Total equity and liabilities		5,985,876		8,428,353		6,500,629

 

 

 

Condensed Statement of Changes in Equity

for the six months ended 30 September 2009

		£
Issued Capital
Opening balance as at 1 April 2008		1,522,972
Issued during the period		-
Closing balance as at 30 September 2008		1,522,972
Share buy-back Closing balance as at 31 March 2009 Additional transfer on share buy-back Closing balance as at 30 September 2009		(130,000) 1,392,972 (130,000) 1,262,972
Share Premium Reserve
Opening balance as at 1 April 2008		7,838,278
Premium on shares issued during the period		-
Closing balance as at 30 September 2008		7,838,278
Share buy-back during year Closing balance as at 31 March 2009 and 30 September 2009		(23,100 7,815,178
Options & Warrants Reserve
Opening balance as at 1 April 2008		180,821
Recognition of share-based payments		91,671
Closing balance as at 30 September 2008		272,492
Recognition of share-based payments Closing balance as at 31 March 2009 Recognition of share-based payments Closing balance as at 30 September 2009		12,854 285,346 10,553 295,899
Accumulated Deficit
Opening balance as at 1 April 2008 Deficit for the period		(1,366,033) (305,977)
Closing balance as at 30 September 2008		(1,672,010)
Deficit for the period Closing balance as at 31 March 2009 Deficit for the period Reserve movement on share buy-back Closing balance as at 30 September 2009		(2,289,957) (3,961,967) (586,073) 130,000 (4,418,040)
Foreign Currency Translation Reserve
Opening balance as at 1 April 2008		(40,816)
Exchange differences arising on translation of foreign operations		154,067
Closing balance as at 30 September 2008 Exchange differences arising on translation of foreign operations Closing balance as at 31 March 2009 Exchange differences arising on translation of foreign operations Closing balance as at 30 September 2009		113,251 644,902 758,153 36,887 795,040
Total of shareholders equity at 30 September 2009		5,751,049

Selected Explanatory Notes to the Interim Financial Statements

1. Key accounting policies

Lithic Metals and Energy Limited (hereafter "Lithic" or the "Company") is a company registered and domiciled in Bermuda whose principal activities comprise minerals exploration and development for the benefit of shareholders.

The Company's registered office is:

Canon's Court
2 Victoria Street

Hamilton HM 12
Bermuda

The financial statements incorporate the principal accounting policies as set out in the annual financial statements to 31 March 2009, a selection of which are set out below. Accounting policies of the subsidiaries are consistent with those of the holding company.

Statement of compliance

The Group's annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB) and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB. These interim financial statements are prepared in accordance with IAS34 'Interim Financial Reporting'.

Basis of preparation

The Group financial statements are prepared on the historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Pounds Sterling, unless otherwise noted.

The preparation of IFRS financial statements requires the use of certain critical accounting estimates and requires management to exercise a higher degree of judgement in the process of applying the Group's accounting policies. Significant estimates used in the preparation of these consolidated financial statements include, amongst other things, plant and equipment, the expected economic lives of and the future operating results and net cash flows expected to result from the utilization of resource properties and the estimated values of options. Actual results may differ from those estimates. 

Going concern 

The financial statements have been prepared on the basis that the consolidated entity is a going concern, which contemplates the continuity of normal business activity, realisation of assets and the settlement of liabilities in the normal course of business. If the consolidated entity chooses to maintain its current high level of expenditure on specific projects, it will have to raise additional capital. If the consolidated entity does not raise additional capital in the short term it can continue as a going concern by substantially reducing exploration expenditure until funding is available, without jeopardising its commitment base on those specific projects. The consolidated entity always has the opportunity to enter into joint venture arrangements to fulfil ongoing exploration expenditure or apply for expenditure exemptions. The Directors are of the opinion that the basis upon which the financial statements are prepared is appropriate in the circumstances. However, if an event were to arise where the consolidated entity could not raise additional equity capital or reduce its current rate of exploration expenditure by entering into joint ventures in order to remain as a going concern, there is no certainty as to whether the consolidated entity could realise assets at the amounts as shown in the financial statements and extinguish liabilities in the normal course of business.

Principles of consolidation

 

            a) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of Lithic and its subsidiaries (hereafter the "Group" or "Consolidated Entity") as at 30 September 2009, and the results of its subsidiaries for the six month period then ended. Subsidiaries are those entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than fifty percent of the voting rights so as to obtain benefits from its activities. The existing and effect of potential voting rights which are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Minority interests (when relevant) in the results are shown separately in the consolidated income statement and balance sheet respectively.

The Group financial statements incorporate the assets, liabilities and results of operations of the Company and its subsidiaries acquired and disposed of during a financial period. These assets, liabilities and results are included from the effective dates of acquisition to the effective dates of disposal. Where necessary, the accounting policies of subsidiaries are changed to ensure the consistency with the policies adopted by the Group.

b) Joint ventures 

Joint venture operations, if any, are accounted for using the equity method and are carried at cost by the parent entity. Under the equity method, the share of the profits and losses of the joint venture is recognised in the statement of comprehensive income. Profits or losses on transactions establishing the joint venture are eliminated to the extent of the Group's ownership interest until such time as they are realized by the joint venture partnership on consumption or sale, unless they relate to an unrealized loss that provides evidence of the impairment of an asset transferred

Mineral exploration expenditure

Exploration and evaluation costs incurred by the Group are accumulated separately for each area of interest. Such costs comprise net direct costs and an appropriate portion of related overhead costs, but do not include general overheads or administrative costs that do not have a specific association with a particular area of interest. Exploration and evaluation costs are carried forward to the extent that:

a) such costs are expected to be recouped through the successful development and utilisation of the area of interest, or alternatively by its sale; or

b) exploration and evaluation activities in the area of interest have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.

In the event that an area of interest is abandoned or if the Directors consider the costs incurred exceed the area of interest's recoverable amount, accumulated costs carried forward are written off in the year in which that assessment is made.

Exploration and evaluation costs are not carried forward in respect of any area of interest unless the Group's right of tenure to the property is current. Depletion is not charged on areas of interest under development until commercial production commences, at which time it will be recorded using a units of production basis which will be based on the mineral mined at each area of interest relative to the estimated resource relating of that area of interest.

Joint venture management fees

A management fee is earned on expenditure incurred on the Uranium Joint Venture at a rate of 20% of the underlying costs incurred in Zambia. This income is recognised in the consolidated statement of comprehensive income with a corresponding amount capitalised to business development costs.

Revenue recognition

Interest revenue is recorded on a time proportion basis, based on the effective yield of the asset. The effective yield of the asset is the rate of interest required to discount the stream of future cash receipts, expected over the life of the financial asset, to equate to its net carrying amount.

Foreign currency

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Pounds Sterling which is the functional currency of Lithic Metals and Energy Limited and is the presentation currency for its consolidated financial statements.

Foreign currency translations are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non-monetary items, such as equities held at fair value through the profit and loss, are reported as part of the fair value gain or loss. 

The results and financial position of the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: 

• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.

• Income and expenses for each income statement are translated at average rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction date, in which case income and expenses are translated at the dates of the transactions); and

• All resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities and borrowings are taken to shareholders equity. When a foreign operation is sold or borrowings repaid, a proportionate share of such exchange differences are recognised in the income statement as part of the gain or loss on sale.

Earnings per share and dilutive earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of interest and other finance charges associated with diluted potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

2.         Segmental information

Lithic has early adopted IFRS 8 'Operating Segments'. Lithic operates in three reporting geological areas and reports to management on a project by project basis. During the financial year Lithic operated in:

 

                a.     Zambia - exploring for Nickel and Uranium.

                b.     Togo - exploring for Uranium, Nickel, Zinc and Chromite. 

                c.     Mozambique - exploring for Nickel

As the projects are all in exploration phase no segmental revenue or segment results are disclosed. Lithic's policy is to capitalise all exploration expenditure where it has legal tenure to the exploration licences and such expenditures are expected to be recouped through the successful development and utilization of the area of interest, or alternatively by its sale or the exploration and evaluation activities at each area of interest have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. All exploration expenditure is accumulated on an area of interest basis and reflected in the balance sheet under "Mineral Properties".

Each project is a reportable segment where it comprises at least 10% of the capitalised exploration costs. Where the aggregate of reportable segments are not within 75% of total exploration costs capitalised, additional segments are sought and disclosed so that all reportable segments comprise at least 75% of total capitalised exploration costs. No reportable segment has been merged or aggregated together to meet the 10% rule mentioned above.

                                        

			Capitalised exploration costs
	Country	Mineral/Metals	Acquisition costs	Exploration costs	Total
			£	£	£
Asset reconciliation - September 2009
- Haito	Togo	Nickel/Chromite	309,093	545,159	854,252
- Pagala	Togo	Zinc	309,093	205,459	514,552
- Niamtougou	Togo	Uranium	309,093	239,439	548,532
- Kara	Togo	Uranium	309,092	91,803	400,895
- Mavita	Mozambique	Nickel	-	617,789	617,789
Segmental exploration assets			1,236,371	1,699,649	2,936,020
Segmental property, plant and equipment
- Zambia					70,196
- Togo					109,945
- Mozambique					335
Other assets in Bermuda (see Note 6)					1,722,626
Unallocated assets					1,146,754
Total assets					5,985,876

			Capitalised exploration costs
	Country	Mineral/Metals	Acquisition costs	Exploration costs	Total
			£	£	£
Asset reconciliation - March 2009
- Haito	Togo	Nickel/Chromite	309,093	571,627	880,720
- Pagala	Togo	Zinc	309,093	215,445	524,538
- Niamtougou	Togo	Uranium	309,093	184,448	493,541
- Kara	Togo	Uranium	309,092	64,916	374,008
- Mavita	Mozambique	Nickel	-	659,202	659,202
Segmental exploration assets			1,236,371	1,695,638	2,932,009
Segmental property, plant and equipment
- Zambia					109,285
- Togo					150,114
- Mozambique					563
Other assets in Bermuda (see Note 6)					1,522,120
Unallocated assets					1,786,538
Total assets					6,500,629

 

 

During the year to 31 March 2009 Lithic impaired the Mitaba project in Zambia, and capitalised exploration costs associated with this project amounting to £1,982,193 were expensed as an impairment cost.

 

 

Liabilities Reconciliation	Total  Liabilities	Total  Liabilities
	Sept 09	March 09
	£	£
Zambia	17,418	14,562
Togo	21,635	34,681
Mozambique	1,885	2,111
Total segmental liabilities	40,938	51,354
Unallocated liabilities	193,889	159,593
Total liabilities	234,827	210,947

 

 

3. Reconciliation of deficit

The deficit before income tax was after the following income and expenses:

	Unaudited six months ended  September 2009	Unaudited  six months ended September 2008	Audited  year ended  March 2009
	£	£	£
Interest income	2,499	99,690	122,434
Management fee received	25,769	122,893	183,947
Profit on asset write-off	-	399	73
Foreign exchange gains	-		3,628
Total revenue	28,268	222,982	310,082
Auditors' remuneration
- audit services	(6,263)	(5,800)	(35,725)
Depreciation	(8,901)	(7,934)	(17,053)
Directors' fees	(31,250)	(39,327)	(77,976)
Exploration expenditure written off	(565)	-	(1,982,193)
Foreign exchange losses Interest expense	(221,617) -	(73,617) -	(120,675) (5,767)
Other costs	(241,254)	(175,405)	(290,897)
Personnel costs - defined contribution plan	(7,334)	(13,159)	(25,278)
Personnel costs - salaries	(86,604)	(122,046)	(252,631)
Share-based payments	(10,553)	(91,671)	(104,525)
Total expenses	(614,341)	(528,959)	(2,912,720)
Deficit for period	(586,073)	(305,977)	(2,602,638)

  

4. Loss Per Share

The calculation of the loss and diluted loss per share is based on the deficit for the financial period of £586,073  (2008 - £305,977) and the weighted number of average ordinary shares of 126,297,197 (2008 - 152,297,197). No warrants or options have been taken into account for the diluted loss per share as the impact of these instruments is non-dilutive.

Shares	Unaudited six months ended  September 2009	Unaudited  six months ended  September 2008	Audited year ended March 2009
Basic weighted average number of ordinary shares on issue	126,297,197	152,297,197	145,832,716
Basic loss per share  (pence)	(0.46)	(0.20)	(1.78)

5. Mineral Interests

a)  Reconciliation

	Unaudited six months ended  September 2009	Unaudited  six months ended  September 2008	Audited  year ended   March 2009
	£	£	£
Opening balance	2,932,009	3,083,930	3,094,160
Exploration costs capitalised for the period	123,864	566,858	1,334,658
Exploration costs written off	(565)	-	(1,982,193)
Foreign exchange movements	(119,288)	74,095	485,384
As at 30 September 2008	2,936,020	3,724,883	2,932,009

b)  Exploration expenditure per project

	Unaudited six months ended   September 2009	Unaudited  six months ended  September 2008	Audited  year ended   March 2009
	£	£	£
Group exploration projects
Mitaba	-	1,578,636	-
Haito	854,252	606,473	880,720
Pagala	514,552	445,716	524,538
Niamtougou	548,532	419,738	493,541
Kara	400,895	331,839	374,008
Mavita	617,789	342,481	659,202
As at 30 September 2008	2,936,020	3,724,883	2,932,009

  

6. Other assets

	Unaudited six months ended   September 2009	Unaudited  six months ended  September 2008	Audited  year ended   March 2009
	£	£	£
Opening balance	1,522,120	204,839	205,816
Investment in uranium JV farm-in projects	200,506	921,228	1,316,304
Business development costs	1,722,626	1,126,067	1,522,120

Lithic is farming into a uranium Joint Venture with Zambezi Resources Limited. The costs associated with this farm-in are capitalised to business development projects and forms part of acquisition costs once the farm-in is earned. In the event that Lithic decides not to proceed with the Joint Venture, all costs capitalised to the Joint Venture will be expensed.

7. Cash and cash equivalents

	Unaudited six months ended   September 2009	Unaudited  six months ended  September 2008	Audited  year ended   March 2009
	£	£	£
Cash on hand and at bank	203,389	311,307	207,810
Cash on term deposits	745,475	2,713,331	1,356,102
Total cash and cash equivalents	948,864	3,024,638	1,563,912

8. Investment in Subsidiaries

At 30 September 2009, the Company had interests in the following subsidiaries:

Company	Country of Incorporation	Holding Company	Class of Share Capital Held	% Held	Nature of Business	Investment Cost
						£
MR Nickel (Bermuda) Limited	Bermuda	Lithic Metals and Energy Limited	Ordinary	100	Exploration	7,500
MR Nickel Limited	Zambia	MR Nickel (Bermuda) Limited	Ordinary	100	Exploration	12
Zambezi Niquel Mozambique Limitada	Mozambique	MR Nickel (Bermuda) Limited	Ordinary	100	Exploration	420
Regent Resources Capital Corporation Limited (BVI)	British Virgin Islands	Lithic Metals and Energy Limited	Ordinary	100	Exploration	1,246,566
Regent Resources Capital Corporation SAU	Togo	RRCC (BVI) Limited	Ordinary	100	Exploration	10,195

Loans by the Company to its subsidiaries are at call, interest free with no agreed fixed terms of repayment. The Company has undertaken not to recall the loans within 12 months from the date of this report unless the respective subsidiaries are in a financial position to do so. The balance owing by subsidiaries at 30 September 2009 was £2,014,682 (30 September 2008; £1,568,694).

9. Issued Capital

The Company has 302 million authorised ordinary par value shares at £0.01 each.

	Number of Shares	Issued Capital
	£	£
Issued and fully paid
Balance at 1 April 2008	152,297,197	1,522,972
Share buy-back December 2008	(26,000,000)	(130,000)
Balance at 31 March 2009	126,297,197	1,392,972
Share buy-back December 2008 (note e)	-	(130,000)
Balance at 30 September 2008	126,297,197	1,262,972

Notes

• There were 10,900,000 share options outstanding at the beginning and end of the period.

• No options were issued or exercised in the period.

• No options expired or were forfeited in the period.

• The weighted average price of the share options outstanding at the end of the period was £0.12. 

• The share buy-back in December 2008 was priced at 0.5p, less than the nominal value of the shares and a transfer to revenue reserves has been made in the current period for the difference between the cost of the shares and the nominal value of the shares bought back.  

10. Reserves

	Share premium reserve	Accumulated  deficit	Foreign currency translation reserve	Options and warrants reserve
	£	£	£	£
As at 1 April 2009	7,838,278	(3,961,967)	758,153	285,346
Movements during the period	(23,100)	(456,073)	36,887	10,553
As at 30 September 2009	7,815,178	(4,418,040)	795,040	295,899

• The share premium reserve reflects the amounts received for the issuance of shares in excess of the par value of the share.

• The accumulated deficit represents the Group's operational losses since incorporation.

• The foreign currency translation reserve represents the foreign exchange movements on the translation of all foreign entities controlled by the Group. 

• The options and warrants reserve represents the value of all share based payments made to directors, staff and other persons as measured by the Black Scholes valuation model. The respective amounts are transferred out of the reserve and into share capital, share premium accounts and accumulated deficit as and when the options and warrants are exercised.

11. Commitments

On 21 May 2008 the Group entered into a joint venture "Heads of Agreement" with Zambezi Resources Limited (hereafter "ZRL") and signed the farm-in Joint Venture agreement on 28 April 2008 in which Lithic has the right to explore for uranium on certain of ZRL's mining licences. In terms of the agreement Lithic is required to contribute in aggregate US$5 million, over a period of 2.5 years, for a 51% equity participation in both Oryx Resources Limited and Sothern African Resources Limited. To achieve the 51% holding, Lithic must still contribute US$1,924,275 in aggregate, to the respective companies.

The Group is party to a lease of business premises, being the former Head Office in Perth, Australia. The premises are leased for a fixed term of three years and include an option to renew. The lease is subject to an increase price adjustments being the maximum of 5% or current rental prices at that time. The lease expires in March 2011 at the reporting date the commitment under the lease was £77,396.

The Group had no contingent liabilities at 30 September 2009.

12. Post-balance Sheet Events 

On 29 October 2009 the Company announced that as part of the continuing review of the business, the Company intends to acquire the entire issued capital of Amber Petroleum Limited, a private company incorporated in the British Virgin Islands via a share for share exchange. On the same day trading in the Company's shares on the London Stock Exchange was suspended.

A Special General meeting will be convened in due course to approve the transaction which will include increasing the authorised share capital to £30,000,000 and changing the name of the enlarged Company to AfNat Resources Limited. The board believes that trading in the Enlarged Share Capital will commence prior to 31 December 2009.

 

Authorised on behalf of the Board.

            

                

David Weill	Ozge Erdem
Director	Director
Date:   25 November 2009	Date:   25 November 2009

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ENDIR PUGMWGUPBGMA