Toledo Mining Corporation Plc 
 
 
Registered Number: 5055833    
 
 
 
 
 
 
 
 
 
 
 
Financial Statements 
 
For the year ended 31 March 2011 
 
 
 
 
 
 
 
  1 
 
Contents  
    
  
Page
Highlights 2
Chairman’s statement 3
Chief Executive Officer’s review 6
In the community 9
Directors and senior management  11
Report of the directors 13
Statement of directors’ responsibilities 19
Independent auditors’ report  20
Consolidated income statement 22
Consolidated statement of comprehensive income 23
Consolidated balance sheet 24
Company balance sheet 25
Consolidated statement of changes in equity 26
Company statement of changes in equity                       28
Consolidated cash flow statement 30
Company cash flow statement 31
Notes to the financial statements 32
Corporate directory 58
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  2 
 
Highlights 
 
 
Operational 
• Recommencement of mining operations at the Berong mine 
• Sales contract secured for stockpiled ore of approximately 150,000 wmt 
• Targeted production of 450,000 wmt of ore containing 1.8% nickel by Q4 2011  
• Sales and production target of 750,000 wmt for 2012 
 
Financial 
• Settlement of Atlas loan: total of US$4.5 million to be received by end September 2011 
• Consolidated loss before tax: £4.4 million (2010: £1.98 million) 
• Loss per share including associates:10.16p (2010: 4.74p) 
• Cash balances: £1.88 million as at 31 March 2011 
 
 
Corporate 
• Appointment of Victor Kolesnikov as Chief Executive Officer 
• Appointment of Pierre Charlent as Chief Operating Officer 
• Successful placing of 8.307 million shares at a price of 23 pence to raise £1.9 million net of 
expenses  
  3 
 
 Chairman’s statement 
 
 
In the 18 months since the beginning of Toledo’s 2011 financial year, our management has worked 
tirelessly to extract greater value from our nickel investments located in the Philippines. 
 
It was very pleasing therefore to be able to announce in April that sales contracts had been 
secured to finance the reopening of the Berong mine, which duly occurred in May. 
 
The intention is now to produce 450,000 wet metric tonnes (wmt) of nickel ore this calendar year 
rising to 750,000 wmt annually thereafter. The expected net revenue generated from ore sales will 
be more than sufficient at current nickel prices for the joint owners of Berong to fund an exploration 
programme of the area around Berong and undertake engineering studies to improve ship loading 
capability and determine the optimal technology for local processing of ore. 
 
At the Ipilan project, on the eastern and opposite side of Palawan Island to Berong, significant 
progress has been made towards being able to mine the deposit. Last December, we announced 
that statutory licencing obligations had been progressed to the point where only a mine feasibility 
plan and related documents required official sign off before mining operations could begin. The 
feasibility plan has been submitted to the Minerals and Geosciences Bureau, and it is understood 
that their initial review has drawn no negative feedback. 
 
At the beginning of our financial year, we had just commenced an exploration programme on the 
Moorsom prospect, lying within a 14 kilometre radius of the Berong mine. The stated aim was to 
prove up sufficient ore capable of supporting a processing operation producing 20,000 tonnes per 
annum of contained nickel. 
 
Although the initial results were encouraging, the programme was curtailed when it became 
apparent that whilst the requisite tonnage undoubtedly exists, the nickel grade is less than hoped. 
In-house analysis of the assay data indicates a total resource of 43 million tonnes grading just over 
0.8% nickel using a 0% cut-off grade. Further work is required to determine whether any part of 
this huge resource has the potential of commercial development. 
 
As mentioned in my half yearly statement, the area long believed to offer significant exploration 
potential is the coastal portion of the Long Point prospect, located some 20 kilometres to the north 
east of the Berong mine. This area, which lies within an Environmental Critical Area Network 
(ECAN), is presently off limits to exploration. However, we remain hopeful that with the support of 
the local council, which has petitioned for the ECAN map to be redrawn, we will be granted 
permission to explore  
 
Palawan is a particularly environmentally sensitive island within which to operate. Often described 
as the Philippines last ecological frontier it has been accorded special status under the 
Constitution. It is not surprising therefore that obtaining permits to explore and mine on Palawan 
requires extensive review and cooperation with local authorities. Management of both Berong and 
Ipilan has ensured that very careful attention to community, social and environmental issues has 
enabled the restart of the Berong mine and successful ratification of the environmental plans for 
the development of Ipilan. 
 
More detailed operational information on both Berong and Ipilan is contained in the Chief 
Executive’s review. 
 
For the financial year to 31 March 2011 Toledo reported a pre-tax loss of £4.4 million as compared 
to a loss of £2.0 million in the 2010 financial year. Of the £2.4 million increase in pre-tax losses, 
£1.6 million is due to non-cash provisions with respect to the early settlement by Atlas 
Consolidated Mining and Development Corporation (Atlas) of a loan from Toledo to Atlas, a partner 
in Berong, and a reduction in the carrying value of our investment in Ipilan. A further £0.21 million 
was due to foreign exchange losses on US$ denominated loans to Philippine partners. Associated  4 
 
company losses rose by £0.36 million and administrative expenses were £0.46 million higher, 
principally as a result of negotiations with the Jinchuan Group during the financial year. 
 
With no income during 2010 and for most of this year, Toledo has relied on the loyal support of 
shareholders. Last December, the company placed 8.307 million shares to raise £1.9 million net of 
expenses. As a result of the issue, Toledo now has 49,845,333 fully paid ordinary shares in issue 
of which Daintree Limited (whose major shareholder, Jason Cheng, sits on the Toledo board) holds 
22% and Fevamotinico SARL (a company related to Kostyantin Zhevago) holds 20%. The issue 
also saw Mr. Jason Cropper increase his equity holding to 6.7%, since when, through on market 
purchases, his holding has risen to 16%. Meanwhile, Toledo’s once most significant shareholder, 
European Nickel plc, now has just a little over 5% equity holding, although it still retains its 18.7% 
voting interest in Berong Nickel Corporation. 
 
Presently financial matters look a lot better for both Toledo and its shareholders. The Berong mine 
should now be self-financing for the foreseeable future. Whilst Toledo still has a commitment to 
fund (on a recoverable basis) Ipilan up to mine development, your company is well funded as a 
result of the early settlement of the Atlas loan referred to earlier and which will add US$4.5 million 
to Toledo’s cash holdings.   
 
It is quite natural that strong commodity prices draws the attention of mineral rich countries to the 
wealth beneath their feet and heightens the debate as to how best these resources be developed 
for the benefit of the country concerned.  
 
The Philippines, with its exceptional endowment of mineral resources, is no exception to such 
debate, the current focus being on the pros and cons of limiting ore exports in preference to 
domestic processing and on whether to tighten or relax the legislation limiting foreign ownership of 
mineral properties. Toledo welcomes clarification and resolution on both these issues. 
 
Meanwhile, your company considers it wise to recognise Philippine nationals’ desire to process 
minerals within the country and, accordingly, to plan for a more restrictive environment on ore 
exports. We do not see such an outcome as necessarily financially damaging for Toledo. Equally, 
we believe that any change to the legislation on foreign ownership will recognise the important 
contribution foreign investment makes to the Philippine economy. 
 
As Toledo became more confident that developments in the nickel market and in particular the 
explosive growth in demand for nickel ore, primarily from China but also elsewhere, would support 
a reopening of the Berong mine and accelerate value added ambitions, we moved to strengthen 
our management capabilities.  
 
In January 2011, we welcomed Victor Kolesnikov to the Toledo board. In March we appointed him 
Chief Executive Officer. Victor is a metallurgist with over 22 years’ experience in mining and sales 
in the non-ferrous metals industry, including eight years with Norilsk Nickel, the world’s largest 
nickel producer. In the short time since his appointment as CEO, Victor has made a very positive 
impact on our business including overseeing the commencement of operations at Berong. 
 
In May 2011, we appointed Pierre Charlent, Chief Operating Officer based in the Philippines. 
Pierre replaces Ken Stein, who returned to Australia for personal reasons. As a geologist and 
mining engineer, Pierre not only complements Victor’s metallurgical expertise, but also comes to 
Toledo with over 25 years’ experience in the mining industry, including 14 years in nickel laterite 
exploration, mining and development in New Caledonia. 
 
We are very fortunate to have been able to recruit two such high calibre and experienced 
individuals. 
 
With the commitment of the staff of the Manila-based management company of Berong and Ipilan 
and the employees at the respective sites, we have significantly advanced the reactivation of 
Berong and made substantial progress in the permitting at Ipilan. The Toledo board owes all of 
them a huge debt of gratitude.  5 
 
 
I would also like to thank Felix Pole who stood down from the Toledo board at the end of June. 
Felix was my companion in guiding Toledo through some very challenging times. Fortunately, 
although Felix resigned from the board because of the heavy demands of his business interests, 
he remains available should we need to tap his wise counsel. 
 
Finally, I would like to extend my thanks to our shareholders for their continued support. We have 
made much positive progress this year and I look forward to updating you as we continue to realise 
further goals over the coming year. 
 
 
Reginald Eccles 
Chairman 
24 August 2011  6 
 
Chief Executive Officer’s review 
 
The Berong nickel mine, in which Toledo has a 56.1% economic interest, successfully 
recommenced operations in May 2011.This became possible due to favourable market conditions 
for high grade saprolite nickel ores and strong nickel prices which have stayed above 
US$20,000/tonne since August 2010. Prior to reopening the Berong mine, Toledo developed a 
new strategy with its JV partners in Berong Nickel Corporation (BNC) to target production of nickel 
ore containing 1.8% nickel, which is currently being implemented.  
 
The 1.8% plan was developed consistent with growing market demands for this ore type.  The 
recent significant changes in market demand for high grade saprolite nickel ore have opened up 
sound prospects for our deposits. Historically, the development of exports of high grade saprolite 
nickel ore began from New Caledonia during the 1950's by Japanese ferronickel producers. Later, 
they extended their ore source market to Indonesia and the Philippines. The requirement for nickel 
content in the ore in 2001 was very high at 2.45%, which is why only a few nickel ore producers in 
the Philippines could compete in this market. 
 
From 2003, the European manufacturers of ferronickel also started using high grade saprolite ore 
from Asia in their Electric Arc Furnace (EAF) production, thereby competing with Japanese 
consumers. By the end of 2006, the typical nickel content of high grade saprolite ores exported 
from New Caledonia, Indonesia and the Philippines had fallen to 2.2% nickel due to a general 
decline in the grade of existing deposits and also due to the increased demand for ore. The most 
significant changes in the market began in 2006, when China began to use nickel ore for the 
production of nickel pig iron (NPI) in blast furnaces, which were previously used for iron production.  
 
As the technology for production of pig iron in blast furnaces requires high iron content in raw 
materials, the Chinese manufacturers mainly used limonitic nickel ores with high iron content (45-
55%) and low nickel content (0.9-1%). The proportion of high grade saprolitic ore in the blast 
furnaces' production of NPI was relatively small. At the time of the crash in nickel prices at the end 
of 2008, China did not yet have substantial numbers of EAF plants for ferronickel production, and 
had not yet created competition in the market for high grade ores. However, it rapidly became clear 
to the Chinese ferronickel and NPI producers that the use of EAF for ferronickel production using 
high grade ores was much more competitive compared to NPI production in blast furnaces. 
  
By early 2011, China had already built significant numbers of EAF plants for the production of 
ferronickel. This dramatically increased the demand for high grade saprolitic ore, resulting in a 
decrease in the average available grade from 2.2% to 1.8% nickel content. All of this has led to the 
Berong deposit, with its substantial reserves of 1.8% nickel ore grade, becoming very competitive 
against the previous market leaders in high grade ore production from New Caledonia, Indonesia 
and the Philippines. 
 
The restart of the Berong mine by BNC was facilitated by the sale of the existing stockpile of low 
grade ore, produced in 2008, the proceeds of which are being used as working capital to support 
mining operations. Currently, 103,530 wet metric tonnes (wmt) of nickel ore with an average grade 
of 1.54% nickel has been shipped from the existing stockpile, yielding a revenue of US$2.57 million 
to BNC. 
 
To date, a further 160,569 wmt of ore with a nickel content of 1.8% has been mined and delivered 
to the stockpile. We anticipate producing a total of 450,000 wmt of ore containing 1.8% nickel by 
the end of this year, from which we expect to ship 200,000-250,000 wmt in this shipping season. 
Because Berong uses barges to load ships offshore, sea conditions typically limit shipments to 
between March and October.  It is planned that shipments will be resumed at the beginning of 
March 2012, when sea conditions again become conducive to barge ship loading. We have revised 
our projected shipping target for BNC, as announced on 27 May 2011, downwards by 50,000 
tonnes.  
  
The Berong mine is targeting production of 750,000 wmt of 1.8% nickel ore during 2012. To 
address the constraints of the limited shipping window, BNC has recently engaged an engineering  7 
 
company to look into the possibility of increasing the shipping period, the successful outcome of 
which would increase the capacity of the Berong port to 1,000,000 wmt per year. Among the range 
of possible measures being considered in the engineering study are the extension of the pier to 
accommodate bigger barges and the construction of a protective sea wall. 
 
The JORC-compliant resource for Berong was prepared by Snowden Mining Industry Consultants 
in June 2007. The total resource over the area drilled was stated at 9.92 million dry tonnes 
averaging 1.55 % Ni at a 1% cut-off grade. This resource included a subset of high grade resource 
of 4.88 million dry tonnes grading 1.88% Ni at a 1.5% cut-off grade. 
 
Currently, following the 2006 to 2008 direct shipping ore operation, the balance of this high grade 
resource is approximately 4.68 million dry tonnes (equivalent to approximately 6.98 million wet 
tonnes of ore) which will support a 9-year life of mine at the present rate of production of 750,000 
wmt of 1.8% nickel grade per annum. For every tonne of high-grade ore produced, approximately 
two tonnes of low grade ore with nickel content averaging 1.3% will be produced alongside. This 
will be stored at the mine site area in anticipation of future value added processing operations or 
for sale should favourable market conditions prevail. 
 
A Mining Project Feasibility Study for Ipilan, in which Toledo holds a 52% economic interest, was 
carried out in August 2010 and the relevant documents were compiled and submitted to the Mines 
and Geosciences Bureau for review and approval in November 2010. These included a 
Declaration of Project Mining Feasibility (DMF), Environmental Protection and Enhancement 
Program, Final Mine Rehabilitation and Decommissioning Plan, Social Development and 
Management Plan and a Health and Safety plan. Clearance of the all-important Strategic 
Environmental Plan (SEP) has been received from the Palawan Council for Sustainable 
Development (PCSD). 
 
A comprehensive sintering test has been undertaken on Ipilan’s ore, which has highlighted an 
opportunity to upgrade the ore, especially its limonitic part. This study has opened up the possibility 
of upgrading the iron and nickel content of Ipilan’s limonitic ore to make it more suitable for NPI 
blast furnace production. As Berong’s ore is similar to Ipilan’s, the results of the study could also be 
extended to Berong’s low grade limonitic ore. Capital and operating costs of the process are being 
evaluated. Mine experience gained in the development and operation of Berong will be applied to 
Ipilan once full permitting for mine development has been secured. 
 
Past works have confirmed the possibility of using all the available leaching technologies such as 
high pressure acid leaching (HPAL), atmospheric leaching (AL) and heap leaching (HL) for 
processing the ores of our deposits. We continue to assess the viability of these technologies in 
line with changing market conditions. We are also expanding our study on pyro-metallurgical 
technologies, such as looking into regional EAF production of ferronickel to evaluate which is the 
most viable and sustainable value added process for our ore.  
 
Berong continues to set the benchmark in best practice for its environmental work within the 
community. The mine rehabilitation area is now home to 4.5 hectares of rubber trees, which should 
provide the community with a sustainable source of income for years to come.  Alongside this, 
Toledo is dedicated to preserving its relationships with the local government units (LGUs) and 
schools in support of the National Greening Project to deliver our commitment to plant 50 new 
trees for every one tree cut.  In this regard, numerous species of value added trees, fruit trees and 
grasses continue to be planted. 
 
Funds from royalty payments made to the indigenous peoples continue to provide essential 
services to the community as well as establishing livelihood projects, which aim to empower the 
local community in generating its own income.  We are consistently investing more time and 
money into Corporate Social Responsibility (CSR) projects than is our obligation, as mandated by 
law, and continue to strive to contribute positively to the local environment and communities 
amongst which we operate.   
  8 
 
Finally, it would not have been possible to resume operations at Berong at such short notice, or 
indeed at all, without the continued  support and hard work of all of our stakeholders including the 
local community, the LGUs, the Provincial and National Government and of course our staff and 
management both locally in the Philippines and in the UK. I would like to take this opportunity to 
congratulate them all and look ahead to continued success in the months and years to come. 
 
 
Victor Kolesnikov 
Chief Executive Officer 
24 August 2011 
 
 
 
Competent person statement  
The resource information in this statement is based on information reviewed by Mr Pierre Charlent, 
Chief Operating Officer of Toledo Mining Corporation, who is a Member of the Australasian 
Institute of Mining & Metallurgy. Mr Charlent has sufficient experience, which is relevant to the style 
of mineralisation and type of deposit under consideration and to the activities undertaken, to qualify 
as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of 
Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Mr Charlent 
consents to the inclusion in this statement of the matters based on this information, in the form and 
context in which they appear. 
 
 
 
 
 
 
 
  9 
 
In the community 
 
Toledo is very mindful of its duty to manage the environmental and social impact of its mining 
operations in a responsible and sensitive manner. All businesses are part of the wider society, and 
we believe they have both the responsibility and the capability to make a positive contribution to 
the communities in which they operate.  
 
Berong Nickel Corporation (BNC) recognises that the efficient operation of its business depends on 
the support of the local authorities and of the community as a whole, and seeks to provide 
significant and sustainable benefits through its presence. BNC’s Community Relations Officer, Joy 
Asignacion, ensures that everyone within the local community has a say in identifying and 
participating in projects backed by the company. There are currently two main focus areas for 
these projects – the Social Development and Management Programme and Community 
Programmes. 
 
BNC’s Social Development and Management Programme (SDMP) was launched in 2007, following 
extensive consultation with the community and local government to ensure that the programme 
would be fully aligned with their interests and aspirations. Since then, the SDMP has funded a 
number of very successful initiatives, including a scholarship scheme, a para-teachers programme, 
improved medical services, and a potable water system. 
 
The Community Programmes are wide ranging, and are selected and run with the active 
involvement of members of the community. Recent programmes include: 
• Livelihood 
Backyard gardening scheme; Tilapia Festival; manufacture of coco-based products; buying 
station for recyclable materials. 
• Education 
Read-along scheme; Berong Elementary Extension School; Science Month Celebration at 
Berong National High School.  
• Health  
Cooking contest; supplemental feeding; personal hygiene demonstration; community garden 
and beautification; “Dumi mo, Linis mo” (construction of comfort rooms); new mothers’ classes; 
school garden. 
 
Adopt-a-Mountain 
BNC devised its Adopt-a-Mountain programme as a proactive and imaginative response to a 
directive issued by the Environmental Management Bureau of the Philippine Department of 
Environment and Natural Resources (DENR) relating to the rehabilitation by mining operators of 
denuded forests or mountains outside of currently approved mining areas. Along with restoration 
and conservation, the programme also aims to provide livelihoods to local people by planting tree 
species that can generate sustainable income in the future. 
 
The Barangay (district) of Berong is home to indigenous peoples called “Tagbanua” and migrants 
from the Visayan Islands. The Tagbanua are the aborigines of Quezon and have inhabited the land 
for centuries. Slash and burn farming (known locally as “kaingin”) and fishing are the main sources 
of livelihood of the nomadic Tagbanua, and this has had a detrimental effect on the environment 
within the district. 
 
BNC’s community relations team faced a real challenge in finding denuded areas to adopt, since 
most of them are still being used as “kaingin” by the Tagbanua who understandably do not want to 
leave unless they can sell the land at a very high price to BNC. However, following a series of 
negotiations conducted with the helpful guidance of the DENR, the first tree planting event under 
the Adopt-a-Mountain programme was able to take place on 11 September 2010. Hundreds of 
people from the community, including schoolchildren along with their teachers and mothers, 
government officials and local civic groups, converged and planted around 6,000 seedlings.  
  10 
 
The Adopt-a-Mountain initiative is not only helping to rehabilitate the local environment, but also to 
promote better understanding and relationships throughout the community. BNC will continue to 
fund and extend this initiative, and the Barangay of Berong has declared that 11 September will 
from now on be designated Adopt-a-Mountain Day.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  11 
 
Directors and senior management 
 
 
Board of directors 
 
Reginald Eccles 
Chairman 
Mr Eccles has extensive experience in the mining industry, specialising in the areas of planning, 
strategy and finance. He has worked for major international mining houses (Anglo American 
Corporation and Consolidated Goldfields plc), co-founded a successful minerals consultancy and a 
publishing business, and served as Head of Global Mining Equities for both SBC Warburg (now 
UBS) and ABN Amro. 
 
Victor Kolesnikov 
Chief Executive Officer 
Mr Kolesnikov is a qualified metallurgical engineer with over 22 years’ experience in the non-
ferrous metals industry, including eight years with Norilsk Nickel, the world’s largest nickel 
producer. Although based in London, he spends extended periods in the Philippines working with 
the local management and joint venture partners utilising his specialist expertise to maximise the 
potential inherent in Toledo’s nickel assets. 
 
Simon Purkiss 
Non-Executive Director 
Mr Purkiss is a metallurgical engineer with over 25 years’ experience in the base metals and 
platinum group metals industries. He has held various operational and business development roles 
at Impala Platinum Ltd and BHP Billiton. Mr Purkiss was one of the founders of European Nickel 
plc, a UK registered company that has developed the heap leach process for application to nickel 
laterites. 
 
Constantine Thanassoulas 
Non-Executive Director 
Mr Thanassoulas was the Chief Executive Officer of Larco SA, the largest ferronickel company in 
Europe, from 2004-2008. Prior to this, he held a number of senior positions in the banking 
industry. Mr Thanassoulas is currently a partner of Eilon Associates Ltd, an investment banking 
consultancy, and is a past President of the European Finance Association and President of the 
European Financial Management Association. 
 
Jason Cheng 
Non-Executive Director 
Mr Cheng is based in Hong Kong and is the Managing Director of Kerogen Capital Ltd, a private 
equity firm which invests in the energy sector. Previously, he worked in investment banking in the 
resources sector at Schroders and JP Morgan in Australia, and was also based in Beijing, 
undertaking investment and advisory activities at Jade International Capital Partners. Mr Cheng 
holds a Bachelor of Commerce from Melbourne University and a Masters of Commerce from 
Sydney University.  
 
Senior management in the Philippines 
 
Pierre Charlent 
Chief Operating Officer 
Mr Charlent is a geologist and mining engineer with over 25 years’ experience including 14 years 
with nickel laterite exploration, mine development and mining in New Caledonia. His experience 
covers project generation, exploration, resource and reserves calculations, mine design, 
development and optimisation, mine planning, mine management for direct shipping ore and onsite 
processing. He holds a Masters in Geology and Geophysics from the University of Montpellier and 
a degree in Mining Engineering from École des Mines d’Alès, France, and is a member of the 
Australasian Institute of Mining and Metallurgy and a member of the Society of Economic 
Geologists (USA).  12 
 
Rufo S. Cabanlig Jr 
General Manager for Projects 
Employed by TMM, Mr Cabanlig has been a mining engineer for over 30 years and has extensive 
experience in the design, engineering and operations of surface mines. He was previously Head of 
Operations for Philippines Pyrite Corporation, a wholly owned subsidiary of the state owned 
Philippines Phosphate Fertiliser Corporation, and also held senior positions with the Philippines 
National Oil Company (PNOC) and its subsidiaries. He undertook postgraduate studies in Mineral 
Economics from the University of the Philippines, where he also obtained his degree in Mining 
Engineering. 
 
Ramon Antonio L. Flores 
Resource Development & Technical Services Manager 
Employed by TMM, Mr Flores is a geologist with over 30 years’ international experience covering 
exploration, consulting, research, computing and management. He held positions previously with 
Gold Fields, Newcrest and Anglo American, and has consulted for clients worldwide. He holds a 
Masters in Environment and Natural Resources Management from the University of the 
Philippines, and a degree in Geology as well as postgraduate diplomas in Remote Sensing and 
Research and Development Management. 
 
Marissa S. Nicdao 
Officer in Charge, Accounting 
Employed by TMM, Ms Nicdao has extensive accounting experience including 15 years in senior 
positions. She was Chief Accountant for Metals Mineral Resources Corporation and for Minoro 
Mining and Exploration Corporation. Her responsibilities include the production of regular 
management reports, budgeting, reconciliation of account balances, review of mine site 
performance, and analysis of costs/variances. She has a degree in Business Administration with 
major in Accounting, and is a Certified Public Accountant. 
 
 
TMM Management Inc is the company responsible for managing the day-to-day operations in the 
Philippines on behalf of Toledo and its partners.  
 
  13 
 
Report of the directors 
For the year ended 31 March 2011 
 
The directors present their report with the audited Group financial statements for the year ended 31 
March 2011. 
 
Principal activities and review of business 
 
The principal activity of the Group is investment directly and indirectly in, and operation of, mining 
exploration and development projects. The Group is comprised of the Toledo Mining Corporation 
plc (“the Company”), its subsidiaries and associated undertakings. 
 
During the year, the Group’s main undertaking was the continuing development of the Berong 
nickel project, in which the Company has a 56.1% economic interest and the Ipilan nickel project, 
in which the Company has a 52% economic interest. 
 
Loss before taxation for the year was £4,377,343 (2010:  £1,982,823) and basic loss per share 
including share of associated results was 10.16 pence (2010: 4.74 pence). 
 
During the year, the Company incurred a large foreign exchange translation loss, principally arising 
on the re-translation of loan investments and receivables held at the balance sheet date. The loan 
investments are denominated in US Dollars and the exchange loss arose on the unfavourable 
movement of the US Dollar to the British Pound. The total foreign exchange translation loss for the 
year was £905,973 (2010: loss £693,255).  
 
The Company has continued to advance its pro-rata share of funds as required to meet the 
ongoing development costs at Berong. The loan to Berong Nickel Corporation (BNC) has been 
advanced as an interest-free, unsecured loan and has no fixed terms of repayment. 
 
Under the terms of loan agreements entered into with Atlas Consolidated Mining and Development 
Corporation (ACMDC) and Brooks Nickel Ventures Inc (Brooks) to fund their shares of required 
ongoing development costs respectively at Berong and Ipilan, the Company advanced 
US$177,369  to ACMDC (2010: nil) and US$1,140,000 to Brooks (2010: US$845,146) during the 
year. On 4 July 2011 the Company and ACMDC reached an agreement for ACMDC to repay by 30 
September 2011 the amount of US$4,449,880 in full and final settlement of ACMDC loan, resulting 
in a charge of $1,197,893 (£746,767) included in the loss before taxation for the year.  
 
Details of these loan agreements and the ACMDC settlement are contained in note 13 to the 
financial statements.  
 
The Berong mine remained on care and maintenance throughout the year. No shipments were 
made to year end. In May 2011, the mine was returned to production and direct ore shipments 
resumed. 
 
The Company continued legal action on behalf of BNC against Queensland Nickel Pty arising from 
the attempted cancellation of ore shipments and failure to meet the contractual minimum 300,000 
wmt annual offtake through to 2012. 
 
On 24 December 2010, the Company raised £1.9 million after costs from the placing of 8,307,000 
ordinary shares at £0.23 each. By dilution, European Nickel PLC reduced its equity interest in the 
Company from 7.7% to 6.4%, while maintaining its 18.7 % direct interest in BNC, owner of the 
Berong nickel mine and project. Immediately following the placing, Daintree’s holding was 
decreased by dilution to 22.01%. Fevamotinico SARL increased their holding to 20.18%, and Mr J 
Cropper increased his holding to 6.67%. 
 
Further details of the Company’s activities for the year are set out in the Chairman’s statement and 
in the Chief Executive Officer’s review. 
  14 
 
Key performance indicators 
 2011 2010 
   
Revenue  growth/ decline) 26% (70)% 
Loss  before taxation £4,377,343 £1,982,823 
Loss per share - basic   
- including share of associates’ results 10.16 pence 4.74 pence 
- excluding share of associates’ results   7.32 pence 2.43 pence 
 
 
Results and dividends 
The loss for the year from ordinary activities before tax amounted to £4,377,343 (2010:  
£1,982,823). The directors do not recommend the payment of a dividend. 
 
Share capital 
Details of share capital are given in note 20 to the financial statements. 
 
Risk management 
See note 29 to the financial statements. 
 
Future developments 
The directors anticipate the Company’s major future developments will revolve around further 
investment in and development of the Berong and Ipilan nickel projects. In particular, the Company 
is executing an exploration programme at Berong to prove up resources sufficient to support value-
adding processing projects. The mining at Berong will continue along with the direct ore shipping, 
which recommenced in May 2011, being supplied from the existing JORC delineated reserves. At 
the same time, we continue to evaluate and progress strategic value-added processing 
opportunities for the entire resource managed by the Company. 
 
Principal risks and uncertainties facing the Group 
The principal risks faced by the Group are as follows: 
• The Company’s ability to raise sufficient funds through the issue of equity or debt in order to 
continue to fund its share of the Group’s planned exploration costs and other operating 
expenditure. 
• The exploration for and development of mineral deposits involves significant risks, which even a 
combination of careful evaluation, experience and knowledge may not eliminate. There can be 
no guarantee that the estimates of quantities and grades of minerals disclosed will be available 
to extract.  With all mining operations there is uncertainty and, therefore, risk associated with 
operating parameters and costs resulting from the scaling up of extraction methods tested in 
pilot conditions. 
• Non-repayment of significant loans advanced and recovery of interest accrued. 
• The operations of the Group may be disrupted by a variety of risks and hazards which are 
beyond the control of the Group. These may include geological, geotechnical and seismic 
factors, environmental hazards, industrial accidents, occupational and health hazards, technical 
failures, labour disputes, unusual or unexpected rock formations, flooding and extended 
interruptions due to inclement or hazardous weather conditions, explosions and other acts.  
These risks and hazards could also result in damage to, or destruction of, production facilities, 
personal injury, environmental damage, business interruption, monetary losses and possible 
legal liability. 
• The Group’s future success is substantially dependent on the continued services and 
performance of its key personnel.  Their loss or the inability to recruit personnel of the 
appropriate calibre could have a significant adverse effect on the business of the Group. 
• The selling price of the nickel ore produced by the Group’s operations varies in line with 
movements of the price of nickel as quoted on the London Metal Exchange. 
                   
  15 
 
• Some or all of the operating and exploration licences issued in respect of the projects may be 
subject to conditions which, if not satisfied, may lead to the revocation of such licences. 
• The Group may have minority interests in the companies, partnerships and ventures in which it 
invests and may be unable to exercise control over the operations of such companies. 
• The operations of the Group are located in the Philippines where there may be a number of 
associated risks over which it will have no control.  These may include economic, social or 
political instability or change, terrorism, hyperinflation, currency non-convertibility or instability, 
changes of laws affecting foreign ownership, government participation, taxation, working 
conditions, rates of exchange, exchange control, and exploration licensing. 
• The Group’s total return and net assets can be significantly affected by currency movements. 
 
Directors and their interests 
The directors who served during the year and their interests in the Company’s ordinary shares 
were as follows: 
   5p ordinary shares 
   At 31 March 2011 At 31 March 2010 
     
R Eccles   50,000 50,000 
F Pole 
(1)
 (Resigned 30 June 2011)  
 
20,000 20,000 
S Purkiss   - - 
C Thanassoulas   - - 
J Cheng 
(2)
    10,972,250 9,972,250 
V Kolesnikov (Appointed 1 February 2011)  
- 
- 
 
(1)
 Held by family interests. 
(2)
 J Cheng is a Managing Director and controlling shareholder of Daintree Resources Ltd.  
 
Directors’ remuneration 
 
The remuneration of the Directors during the year was comprised as follows:  
 
Year ended  
31 March 2011 
Salary 
 
 
£ 
Fees 
 
 
£ 
Share- 
based 
payments  
£ 
Total  
emoluments 
 
£ 
Consulting 
 services 
 
£ 
Total 
 
 
£ 
R Eccles - 38,400 - 38,400 106,050 144,450 
F Pole - 26,400 - 26,400 43,000 69,400 
S Purkiss - 24,000 - 24,000 - 24,000 
C Thanassoulas - 26,400 - 26,400 34,000 60,400 
J Cheng - 24,000 - 24,000 - 24,000 
V Kolesnikov 18,333 2,000 - 20,333 12,000 32,333 
 18,333 141,200 - 159,533 195,050 354,583 
  
Year ended  
31 March 2010 
Salary 
 
 
£ 
Fees 
 
 
£ 
Share- 
based 
payments  
£ 
Total  
emoluments 
 
£ 
Consulting 
 services 
 
£ 
Total 
 
 
£ 
R Eccles - 34,800  29,400 64,200  79,300  143,500 
F Pole - 25,200  29,400 54,600  58,800  113,400 
S Purkiss - 24,600  - 24,600  10,800  35,400 
C Thanassoulas - 25,200  - 25,200  22,600  47,800 
J Cheng - 17,400  - 17,400  - 17,400 
 - 127,200 58,800 186,000 171,500 357,500 
    
The share-based payments arose on options granted to Directors on 14 September 2009. 
No options were granted to the directors during the year. Directors’ options at 31 March 2011 and 
2010 were:  16 
 
 
Director Grant Date Number Exercise 
Price 
Vesting Date Expiring Date 
R Eccles           14/09/2009 150,000 50p 14/09/2009 14/09/2012 
F Pole 14/09/2009 150,000 50p 14/09/2009 14/09/2012 
 
Note 
1 At the discretion of the Board, Mr Pole’s share options will not expire 90 days after his 
resignation on 30 June 2011 but will continue to vest until their full expiry date. 
 
Events since the balance sheet date 
Subsequent to 31 March 2011: 
The Company has advanced a further: 
• £68,700 (as US$112,200) to Berong Nickel Corporation as an interest-free, unsecured advance 
under the Berong Venture Agreement; 
• £317,329 (as US$520,000) to Brooks Nickel Ventures Inc. to meet that company’s share of 
Ipilan project expenditure.  
• £248,433 (as US$400,000) to Berong Nickel Corporation as an interest-free bridging loan for 
short-term working capital. The bridging loan was repaid in full on 1 August 2011. 
The Company received: 
• £121,552 (as US$195,000) from China Nickel Corporation as an interest free loan. The loan 
was repaid in full on 29 July 2011. 
 
On 4 July 2011, the Company and ACMDC reached an agreement for ACMDC to repay by 30 
September 2011 the amount of US$4,449,880 in full and final settlement of ACMDC loan. The first 
of three staged repayments, in the amount of US$1,500,000, was received by the Company on 29 
July 2011. Details of the financial impact of this settlement are set out in note 13. 
 
Substantial shareholdings 
At 19 August 2011, the following shareholders held 3% or more of the issued share capital of the 
Company: 
 Number of Percentage issued 
 ordinary shares ordinary shares 
Daintree Resources Limited 10,972,250 22.01% 
Fevamotinico SARL   10,060,000 20.18% 
J Cropper 7,966,771 15.98% 
European Nickel plc 2,501,019 5.02% 
Barclays Wealth (retail) 1,562,989 3.13% 
   
 
 
 
  17 
 
Corporate governance 
As Toledo Mining Corporation plc is not a fully listed company, it is not required to comply with the 
Code of Best Practice published by the Committee on the Financial Aspects of Corporate 
Governance (“the Combined Code”). However, the directors do place a high degree of importance 
on ensuring that high standards of corporate governance are maintained. As a result, most of the 
relevant principles set out in the Combined Code have been adopted during the period and these 
are summarised below. 
 
Directors 
The Company supports the concept of an effective Board leading and controlling the Company.  
The Board is responsible for approving the Company’s policies and strategies. It meets frequently 
and receives and reviews, on a timely basis, financial and operating information appropriate to 
being able to discharge its duties. Directors are free to seek any further information they consider 
necessary. All directors submit themselves for re-election every three years by rotation in 
accordance with the Articles of Association. All new appointments to the Board are subject to 
resolution of the shareholders at the following Annual General Meeting. 
 
Relations with shareholders 
The Company values the views of its shareholders and recognises their interest in the Company’s 
strategy and performance. The Board is available to discuss current events with its institutional and 
private shareholders and positively encourages attendance at General Meetings. 
 
Audit Committee 
The Company has established an audit committee comprised of the non-executive directors.  It is 
responsible for making recommendations to the Board on the appointment of auditors and the 
audit fee. It is also responsible for ensuring that the financial performance of the Company is 
properly monitored and reported on, and receives and reviews reports from management and the 
auditors relating to the interim report, the annual report and accounts, and the internal control 
systems of the Company. 
 
Nomination Committee 
This committee was responsible for overseeing the selection and appointment of directors. The 
committee makes recommendations to the Board on the appropriate skill mix, personal qualities, 
expertise and diversity of each position. With effect from 1 July 2011, the function of the 
Nomination Committee has been incorporated into the scope of the Remuneration Committee. 
 
Remuneration Committee 
The Company has established a remuneration committee comprised of the non-executive 
directors. It is responsible for the review and recommendation of the scale and structure of 
remuneration for key management personnel, including any bonus arrangements or the award of 
share options. Details of the directors’ emoluments are set out in the financial statements.  
However, there is no separate Report of the Remuneration Committee. It is the Company’s policy 
that the remuneration of directors should be commensurate with services provided by them to the 
Company. 
 
Internal financial control and risk management 
The directors are responsible for the Company’s system of internal financial control and also for 
identifying the major business risks faced by the Company.  The system of internal financial control 
is designed to provide reasonable, but not absolute, assurance against material misstatement or 
loss. In fulfilling these responsibilities, the Board has reviewed the effectiveness of the system of 
internal financial control. The directors have established procedures for planning, budgeting and for 
monitoring, on a regular basis, the performance of the Company and for determining the 
appropriate course of action to manage any major business risks. The Board has considered the 
need for an internal audit function but has decided the size of the Company does not justify it at 
present. This decision will be reviewed annually. 
 
 
  18 
 
Supplier payment policy 
It is the Company’s policy to agree terms of payment with all suppliers at the time of the 
transaction, and to pay suppliers as and when they fall due for payment or alternatively to agree 
revised terms of payment. No distinction is made between different classes of suppliers. At the 
year end, trade payables amounted to 21 days (2010: 18 days). 
 
Political and charitable donations 
No political or charitable donations were made during the year. 
 
Indemnity provision 
Directors and Officers insurance is in place to indemnify the directors against liabilities arising from 
the discharge of their duties as directors of the Company. 
 
Auditors 
Length of service of audit assignment partner 
W K Sawin has been the audit assignment partner for six years. Under APB Ethical Standard 3, 
the audit partner should be rotated after five years but may continue for a sixth year in cases where 
changes and developments within the company make a change of audit partner inadvisable at that 
time. The audit committee fully endorsed the one-year extension on the understanding that a 
rotation of audit partner takes place before the next annual audit. 
 
Reappointment of auditors 
Sawin & Edwards have indicated their willingness to continue in office.  A resolution to reappoint as 
auditors Sawin & Edwards for the ensuing year will be proposed at the 2011 Annual General 
Meeting. 
 
By order of the Board: 
 
 
Reginald Eccles 
Chairman 
24 August 2011 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  19 
 
Statement of directors’ responsibilities 
For the year ended 31 March 2011 
 
The directors are responsible for preparing the Annual Report and the financial statements in 
accordance with applicable law and regulations. 
 
Company law requires the directors to prepare financial statements for each financial year. Under 
that law, the directors have elected to prepare the financial statements in accordance with 
International Financial Reporting Standards and applicable law. The financial statements are 
required by law to give a true and fair view of the state of affairs of the Company and Group and of 
the profit or loss of the Group for that period. In preparing those financial statements, the directors 
are required to: 
a) select suitable accounting policies and then apply them consistently 
b) make judgments and estimates that are reasonable and prudent 
c) state whether applicable accounting standards have been followed, subject to any material 
departures disclosed and explained in the financial statements 
 
 
d) prepare the financial statements on the going concern basis, unless it is inappropriate to 
presume that the Company and Group will continue in business.  
 
The directors are responsible for keeping adequate accounting records that disclose with 
reasonable accuracy at any time the financial position of the Company and of the Group and to 
enable them to ensure that the financial statements comply with the Companies Act 2006.  They 
are also responsible for safeguarding the assets of the Company and Group and hence for taking 
reasonable steps for the prevention and detection of fraud and other irregularities. 
 
The directors are responsible for the maintenance and integrity of the corporate and financial 
information included on the Company website.  Legislation in the United Kingdom governing the 
preparation and dissemination of financial statements may differ from legislation in other 
jurisdictions.
 
 
The directors confirm that so far as they are aware, there is no relevant audit information (as 
defined by section 418(3) of the Companies Act 2006) of which the Company’s auditors are 
unaware. They have taken all the steps that they ought to have taken as directors in order to make 
themselves aware of any relevant audit information and to establish that the Company's auditors 
are aware of that information. 
 
 
 
 
 
 
 
 
 
 
 
 
  20 
 
Independent auditors’ report 
To the shareholders of Toledo Mining Corporation plc 
 
 
We have audited the financial statements of Toledo Mining Corporation plc for the year ended 31 
March 2011 which comprise the Consolidated Income Statement, the Consolidated Statement of 
Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and 
Company Statements of Changes in Equity, the Consolidated and Company Cash Flow 
Statements and the related notes numbered 1 to 31. The financial reporting framework that has 
been applied in their preparation is applicable law and International Financial Reporting Standards 
(IFRSs) as adopted by the European Union and as regards the parent Company financial 
statements, as applied in accordance with the provisions of the Companies Act 2006. 
 
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of 
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to 
the Company’s members those matters we are required to state to them in an auditor’s report and 
for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company’s members as a body, for our 
audit work, for this report, or for the opinions we have formed. 
 
Respective responsibilities of directors and auditors 
As explained more fully in the Directors’ Responsibility Statement set out on page 19, the directors 
are responsible for the preparation of the financial statements and for being satisfied that they give 
a true and fair view. 
 
Our responsibility is to audit the financial statements in accordance with applicable law and 
International Standards on Auditing (UK and Ireland). Those standards require us to comply with 
the Auditing Practices Board’s Ethical Standards for Auditors 
 
Scope of the audit 
An audit involves obtaining evidence about the amounts and disclosures in the financial statements 
sufficient to give reasonable assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an assessment of whether the 
accounting policies are appropriate to the Group’s and the Company’s circumstances and have 
been consistently applied and adequately disclosed; the reasonableness of significant accounting 
estimates made by the directors; and the overall presentation of the financial statements. In 
addition we read all the financial information and non-financial information in the Annual Report to 
identify material inconsistencies with the audited Financial Statements. If we become aware of any 
apparent material misstatements or inconsistencies we consider the implications for our report. 
  
Opinion 
In our opinion: 
• the financial statements give a true and fair view of the state of the Group’s and the parent 
Company's affairs as at 31 March 2011 and of the Group’s  loss for the year then ended;  
• the group financial statements have been properly prepared in accordance with IFRSs as 
adopted by the European Union;  
• the parent Company financial statements have  been properly prepared in accordance with 
IFRSs as adopted by the European Union and as applied in accordance with the provisions of 
the Companies Act 2006; and 
• the financial statements have been prepared in accordance with the Companies Act 2006.  
 
Opinion on other matters prescribed by the Companies Act 2006 
In our opinion the information given in the Directors’ report for the financial year for which the 
financial statements are prepared is consistent with the financial statements. 
         
  21 
 
Matters on which we are required to report by exception 
We have nothing to report in respect of the following matters where the Companies Act 2006 
requires us to report to you if, in our opinion: 
• adequate accounting records have not been kept, or returns adequate for our audit have not 
been received from branches not visited by us; or 
• the Company’s financial statements are not in agreement with the accounting records and 
returns; or 
• certain disclosures of directors’ remuneration specified by law are not made; or 
• we have not received all of the information and explanations we require for our audit. 
 
 
Witold K Sawin (Senior Statutory Auditor)              15 Southampton Place 
For and on behalf of Sawin & Edwards,               London  
Statutory Auditors                                 WC1A 2AJ 
 
24 August 2011 
 
 
 
 
 
 
 
 
 
 
  22 
 
Consolidated income statement 
For the year ended 31 March 2011 
 
  Year Year 
  ended ended 
  31 March 2011 31 March 2010 
 Notes £ £ 
    
Revenue 3 457,949  362,098 
    
Gross profit  457,949 362,098 
    
Administration expenses  (2,023,351) (1,567,371) 
    
Foreign exchange losses   (946,775) (693,255) 
    
Other operating income  153,179 92,711 
    
Unrealised losses on non-current 
investments 12,13 (1,619,527) - 
    
Share of results of associates  (1,225,830) (863,997) 
    
Loss from operations 4 (5,204,355) (2,669,814) 
    
Investment income 8 ___827,012       686,991 
    
Loss before taxation  (4,377,343) (1,982,823) 
    
Income tax credit 8 ________ -        198,100 
    
Loss for the year  (4,377,343)  (1,784,723) 
    
Attributable to:    
Equity holders of the parent  (4,388,197) (1,772,838) 
Minority interest  10,854      (11,885) 
  ___   _____ __________ 
  (4,377,343)  (1,784,723) 
Loss per share in pence - including 
share of associates’ results     
Basic 9 (10.16) (4.74) 
Diluted 9 (10.16) (4.74) 
    
Loss per share in pence - excluding 
share of associates’ results    
Basic 9 (7.32) (2.43) 
Diluted 9 (7.32) (2.43) 
 
The Company has taken advantage of section 408 of the Companies Act 2006 not to publish its 
own income statement account. 
  23 
 
Consolidated statement of comprehensive income 
For the year ended 31 March 2011 
 
 Year  Year 
 ended  ended 
 31 March 2011  31 March 2010 
 £  £ 
(Loss)/profit for the year (4,377,343)  (1,784,723) 
    
Foreign currency translation differences    
for foreign operations 55,551  (57,799) 
    
Other comprehensive (expense)/ income _    ______  ________ 
for the year        55,551    (57,799) 
    
Total comprehensive (expense)/income _________   _________ 
for the year (4,321,792)  (1,842,522) 
    
Attributable to:    
Equity holders of the parent (4,357,033)  (1,810,097) 
Minority interest 35,241  (32,425) 
 ________  _________ 
 (4,321,792)  (1,842,522) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  24 
 
Consolidated balance sheet 
As at 31 March 2011 
 
  31 March 2011 31 March 2010 
 Notes £ £ 
ASSETS    
Non-current assets    
Property, plant and equipment 10 1,184 281 
Investment in associated undertakings 12 8,435,801 10,409,711 
Loans and receivables 13 16,127,408 14,451,634 
Trade and other receivables 14  ____      -        40,036 
Total non-current assets  24,564,393 24,901,662 
    
Current assets    
Trade and other receivables 15 964,934 901,623 
Taxation 16 11,741 211,512 
Cash and cash equivalents 17 1,877,242 3,916,603 
Total current assets  2,853,917 5,029,738 
  _________ _________ 
TOTAL ASSETS  27,418,310 29,931,400 
    
EQUITY AND LIABILITIES    
    
Current liabilities    
Trade and other payables 18 678,396 682,392 
Taxation 19 __  11,772                  - 
Total current liabilities      690,168      682,392 
  ________ _________ 
Total liabilities      690,168      682,392 
 
Equity     
Share capital 20 2,492,267 2,076,917 
Share premium account 21 28,714,157 27,218,897 
Share-based payments reserve 22 193,801 233,183 
Translation reserve  78,806 109,970 
Retained (loss)/profit  (5,133,449) (786,052) 
Equity attributable to equity holders 
of the parent  26,345,582 28,852,915 
Minority interest 23 ___382,560 396,093 
Total equity  26,728,142 29,249,008 
    
TOTAL EQUITY AND LIABILITIES  27,418,310 29,931,400 
 
The financial statements were approved by the Board of directors on 24 August 2011 and signed 
on their behalf by:  
 
 
 
R Eccles 
Director 
  25 
 
Company balance sheet 
As at 31 March 2011 
 
 
Equity     
Share capital 20 2,492,267 2,076,917 
Share premium account 21 28,714,157 27,218,897 
Share based payments reserve 22 193,801 233,183 
Retained loss  (4,857,011) (1,721,572) 
Equity attributable to equity holders of 
the parent  26,543,214 27,807,425 
   
Total equity  26,543,214 27,807,425 
  _________ 
TOTAL EQUITY AND LIABILITIES  27,212,952 28,479,986 
 
The financial statements were approved by the Board of directors on 24 August 2011 and signed 
on their behalf by:  
 
 
R Eccles 
Director 
Toledo Mining Corporation plc  Company number 5055833
  31 March 2011 31 March 2010 
 Notes £ £ 
Assets    
Non-current assets    
Property, plant and equipment 10 1,184 281 
Investment in subsidiary undertaking 11 10,286 10,286 
Investment in associated undertakings 12 9,122,027 9,870,107 
Loans and receivables 13 16,127,408 14,451,634   
Trade and other receivables 14 ________-        40,036 
Total non-current assets  25,260,905 24,372,344 
    
Current assets    
Trade and other receivables 15 81,035 43,549 
Taxation 16 11,741 211,512 
Cash and cash equivalents 17 1,859,271   3,852,581 
Total current assets  1,952,047   4,107,642 
   _________ 
Total assets  27,212,952 28,479,986 
    
Equity and liabilities    
    
Current liabilities    
Trade and other payables 18 657,966 672,561 
Taxation 19   11,772                  -             
Total current liabilities  669,738      672,561 
   _________ 
Total liabilities  669,738      672,561  26 
 
Consolidated statement of changes in equity 
For the year ended 31 March 2011  
 
 
 
   Share-   Trans-  
   based Retained  lation  
31 March 2011 Share Share payments profit/  Minority exchange  
 capital premium reserve (loss) interest reserve Total 
 £ £ £ £ £ £ £ 
Balance at 1 April 
2010 2,076,917 27,218,897 233,183 (786,052) 396,093 109,970 29,249,008 
        
Total 
comprehensive        
expense for the 
year        
        
Profit/(loss) - - - (4,388,197) 10,854 - (4,377,343) 
        
Total other         
comprehensive  
expense - - - - (24,387) (31,164) (55,551) 
 ________ _______ ________ _________ ________ ________ ________ 
Total 
comprehensive        
expense for the 
year              -                -           - (4,388,197) (13,533) (31,164) (4,432,894) 
        
        
Transactions with        
owners         
Issue of new 
shares 415,350 1,495,260 - - - - 1,910,610 
        
Transfer from 
reserve - - 
 
(40,800) 40,800 - - - 
        
Share options 
granted in year - - 
 
1,418 - - - 1,418 
        
Balance at 31 
March 2011 2,492,267 28,714,157 193,801 (5,133,449) 382,560 78,806 26,728,142 
 
 
 
   
        
 
 
   
  27 
 
Consolidated statement of changes in equity (continued) 
For the year ended 31 March 2011 
 
 
 
   Share-   Trans-  
   based Retained  lation  
31 March 2010 Share Share payments profit/ Minority exchange  
 capital premium reserve (loss) interest reserve Total 
 £ £ £ £ £ £ £ 
Balance at 1 April 
2009 1,476,917 24,570,675 307,899 795,810 433,352 142,395 27,727,048 
        
Total 
comprehensive        
expense for the 
year        
        
Loss - - - (1,772,838) (11,885) - (1,784,723) 
        
Total other         
comprehensive  
expense - - - - (25,374) (32,425) (57,799) 
 ________ _______ ________ _________ ________ ________ ________ 
Total 
comprehensive        
expense for the 
year              -                -           - (1,772,838) (37,259) (32,425) (1,842,522) 
        
        
Transactions with        
owners         
Issue of new 
shares 600,000 2,648,222 - - - - 3,248,222 
        
Transfer from 
reserve - - 
 
(190,976) 190,976 - - - 
        
Share options 
granted in year - - 
 
116,260 - - - 116,260 
        
Balance at 31 
March 2010 2,076,917 27,218,897 233,183 (786,052) 396,093 109,970 29,249,008 
 
 
 
 
 
 
 
   
  28 
 
Company statement of changes in equity  
For the year ended 31 March 2011 
 
 
 
 
  
Share- 
based 
 
 
31 March 2011 Share Share payments Retained  
 capital premium reserve loss Total 
 £ £ £ £ £ 
Balance at 1 April  
2010 2,076,917 27,218,897 233,183 (1,721,572) 27,807,425 
      
Total comprehensive      
expense for the year      
Loss - - - (3,176,239) (3,176,239) 
      
Transactions with      
owners       
Issue of new shares 415,350 1,495,260 - - 1,910,610 
      
Transfer from reserve - - (40,800) 40,800 - 
      
Share options granted 
in year - - 
 
1,418 - 1,418 
      
Balance at 31 March 
2011 2,492,267 28,714,157 193,801 (4,857,011) 26,543,214 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  29 
 
Company statement of changes in equity (continued) 
For the year ended 31 March 2011 
 
 
 
  
Share- 
based   
31 March 2010 Share Share payments Retained  
 capital premium reserve loss Total 
 £ £ £ £ £ 
Balance at 1 April  
2009 1,476,917 24,570,675 307,899 (1,018,895) 25,336,596 
      
Total comprehensive      
expense for the year      
Loss - - - (893,653) (893,653) 
      
Transactions with      
owners       
Issue of new shares 600,000 2,648,222 - - 3,248,222 
      
Transfer from reserve - - (190,976) 190,976 - 
      
Share options granted 
in year - - 
 
116,260 - 116,260 
      
Balance at 31 March 
2010 2,076,917 27,218,897 233,183 (1,721,572) 27,807,425 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  30 
 
Consolidated cash flow statement 
For the year ended 31 March 2011 
 
 
  Year Year 
  ended  ended 
  31 March 2011 31 March 2010 
 Notes £ £ 
    
Net cash outflow from operating 
activities 
24 
(1,454,070) (1,291,874)  
    
Investing activities    
Investment income  17,813 22,560 
Investments  (124,680) - 
Loan investments advanced  (2,586,390) (747,723) 
  _________ _________ 
Net cash outflow from investing activities  (2,693,257)   (725,163) 
    
Financing activities    
Issue of equity share capital  1,910,610 3,248,222 
  ________   _________ 
Net cash inflow from financing activities  1,910,610   3,248,222 
    
Taxation    
Refund/(payment) of corporation tax  197,356 (197,356) 
  ________ ________ 
Net increase/(decrease) in cash and cash 
equivalents 
 
(2,039,361) 1,033,829 
    
Cash and cash equivalents at 1 April  3,916,603 2,882,774 
  ________ _________ 
Cash and cash equivalents at 31 March 17 1,877,242   3,916,603 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  31 
 
Company cash flow statement 
For the year ended 31 March 2011 
 
 
  Year Year 
  ended  ended 
  31 March 2011 31 March 2010 
 Notes £ £ 
    
Net cash outflow from operating 
activities 
 
24 (1,408,019) (1,185,417) 
    
Investing activities    
Investment income  17,813 22,560 
Investments  (124,680) - 
Loan investments advanced  (2,586,390) (747,723) 
  _________ _________ 
Net cash outflow from investing activities  (2,693,257)   (725,163) 
    
Financing activities    
Issue of equity share capital  1,910,610 3,248,222 
  ________ ________ 
Net cash inflow from financing activities  1,910,610  3,248,222 
    
Taxation    
Refund/(payment) of corporation tax  197,356 (197,356) 
  ________ ________ 
Net increase/(decrease)  in cash and 
cash equivalents 
 
(1,993,310) 1,140,286 
    
Cash and cash equivalents at 1 April   3,852,581 2,712,295 
  ________ ________ 
Cash and cash equivalents at 31 March  17 1,859,271 3,852,581 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  32 
 
Notes to the financial statements 
For the year ended 31 March 2011 
 
1. General information 
 
Toledo Mining Corporation plc is a company incorporated in England and Wales under the 
Companies Act 1985. The Company’s registered office is Ground Floor, 11 Albemarle Street, 
London, W1S 4HH. The registration number of the Company is 5055833. 
 
The principal activity of the Group is the investment in and exploration and development of 
mining projects, specifically in the Philippines. 
 
The Group’s principal activity is carried out in US dollars. The financial statements are 
presented in pounds sterling as this is the currency of the country (the UK) where the 
Company is incorporated and its ordinary shares are admitted for trading. 
 
The Board of directors has authorised the issue of these financial statements on the date of 
the statement as set out on page 18. 
 
2. Accounting policies 
 
 Basis of accounting 
The financial statements have been prepared in accordance with International Financial 
Reporting Standards (IFRSs). 
 
 The financial statements have been prepared on the historical cost basis except that certain 
financial instruments are accounted for at fair values. The principal accounting policies 
adopted are set out below. 
  
 New standards applied 
The Group has applied the following relevant standards which are effective for annual 
reporting periods beginning on or after 1 April 2010. 
 
IFRS 2 (revised)   Share-based payment vesting conditions and 
cancellations      
IFRS 3 (revised)   Business combinations 
IFRS 7   Financial instruments - disclosures 
IFRS 8   Operating segments                                                                  
IAS 1 (revised and amended)   Presentation of financial statements                           
IAS 7 (amended)   Statement of cash flows 
IAS 16 (amended)   Property, plant and equipment 
IAS 19 (amended)   Employee benefits 
IAS 23 (revised and amended)   Borrowing costs                                                                           
IAS 27 (amended)   Consolidated and separate financial statements 
IAS 28 (amended)   Investments in associates 
IAS 32 (amended)   Financial instruments - presentation 
IAS 36 (amended)   Impairment of assets 
IAS 38 (amended)   Intangible assets 
IAS 39 (amended)   Financial instruments- recognition and measurement  33 
 
The adoption of these standards did not have a material impact on the Group and 
Company’s financial position or performance. IAS 1 (revised) resulted in a change in the 
manner in which the statements are presented. 
 
New standards not applied 
The IASB has issued the following relevant standards which are not yet effective and 
have not been adopted early for these financial statements: 
 
IFRS 3 (amended)  Business combinations, effective date 1 July 2010 
IFRS 7 (amended)  Disclosures, effective date 1 January 2011 
IFRS 9  Financial Instruments, effective date 1 January 
2013 
IAS 1 (amended)  Presentation of financial statements, effective date 
1 January 2011 
IAS 24 (revised)  Related party disclosure, effective date 1 January 
2011 
IAS 27 (amended)  Consolidated and separate financial statements, 
effective date 1 July 2010 
IAS 34 (amended)  Interim financial reporting, effective date 1 January 
2011 
  
The directors do not anticipate that adoption of these standards will have a material impact on 
the Group and Company’s financial position or performance. 
 
 Going concern 
 The financial statements have been prepared on a going concern basis, which contemplates 
continuity of normal business activities and the realisation of assets and settlement of liabilities 
in the ordinary course of business. 
 
 The Directors believe that it is appropriate to prepare the financial report on a going concern 
basis as they are confident that the Company will be able to raise additional funds through 
further debt or equity raisings when required. The Directors are of the opinion that the 
proposed debt or equity raising measures and the existing cash resources will provide 
sufficient funds to enable the Company to continue its operations for at least the next 12 
months. 
 
 Basis of consolidation 
 The consolidated financial statements incorporate the financial statements of the Company 
and all Group undertakings. Control is achieved when the Company has the power to govern 
the financial and operating policies of an investee entity so as to obtain benefits from its 
activities. 
 
 On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured 
at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair 
value of the identifiable net assets acquired is recognised as goodwill.  
 
 Any deficiency of the cost of acquisition below the fair value of the identifiable net assets 
acquired (i.e. discount on acquisition) is credited to the income statement in the period of 
acquisition. The interest of minority shareholders is stated at the minority’s proportion of the 
fair values of the assets and liabilities recognised. Subsequently, any losses applicable to the 
minority interest in excess of the minority interest are allocated against the interests of the 
parent.  34 
 
The results of subsidiaries acquired or disposed of during the year are included in the 
consolidated income statement from the effective date of acquisition or up to the effective date 
of disposal, as appropriate. 
 
 Where necessary, adjustments are made to the financial statements of subsidiaries to bring 
the accounting policies used into line with those used by the Group. 
 
 All intra-group transactions, balances, income and expenses are eliminated on consolidation. 
  
 Investments in associates 
 An associate is an entity over which the Group 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. 
 
 The results and assets and liabilities of associates are incorporated in these financial 
statements using the equity method of accounting. Investments in associates are carried in the 
balance sheet at cost as adjusted by post-acquisition changes in the Group’s share of the net 
assets of the associate, less any impairment in the value of individual investments. Losses of 
the associates in excess of the Group’s interest in those associates are not recognised. 
 
 Where a Group company transacts with an associate of the Group, unrealised profits and 
losses are eliminated to the extent of the Group’s interest in the relevant associate. Losses 
may provide evidence of an impairment of the asset transferred in which case appropriate 
provision is made for impairment. 
 
 The Group and its associated undertakings have complied with the requirements of IFRS 6 
Exploration for and evaluation of mineral resources.  
 
 Upon commencement of commercial production operation of a mining property, the investment 
in the associate company relating to that property is amortised on the basis of ore body 
extracted as a proportion of the ore body estimate of that property. 
 
 Revenue recognition 
Revenue and other operating income represent the provision of consultancy, management 
and office services for the year. 
 
Interest income is accrued on a time basis, by reference to the principal outstanding and at the 
effective interest rate applicable, which is the rate that exactly discounts estimated future cash 
receipts through the expected life of the financial asset to that asset’s net carrying amount. 
 
Losses on current asset investments represent realised and unrealised losses. 
 
Foreign currencies 
Transactions in currencies other than pounds sterling are recorded at the rates of exchange 
prevailing on the dates of the individual transactions. For practical reasons, a rate that 
approximates to the actual rate at the date of the transaction is often used. At each balance 
sheet date, assets and liabilities that are denominated in foreign currencies are retranslated at 
the rates prevailing on the balance sheet date. Gains and losses arising on retranslation are 
included in net profit or loss for the period. 
  35 
 
On consolidation, the assets and liabilities of the Group’s overseas operations are translated 
at exchange rates prevailing on the balance sheet date. Income and expense items are 
translated at the average exchange rates for the period unless exchange rates fluctuate 
significantly. Exchange differences arising, if any, are classified as equity and transferred to 
the Group’s translation reserve. Such translation differences are recognised as income or as 
expenses in the period in which the operation is disposed of. 
 
The following rates of exchange have been applied: 
 2011 2010 
1 US Dollar to 1 British  Pound   
Closing rate 0.6234 0.6637 
Average rate 0.6433 0.6276 
1 Philippine Peso to 1 British Pound   
Closing rate 0.0144 0.0147 
Average rate 0.0144 0.0135 
 
 Taxation 
The income tax expense represents the sum of the tax currently payable and deferred tax.  
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net 
profit as reported in the income statement, because it excludes items of income or expense 
that are taxable or deductible in other years and it further excludes items that are never 
taxable or deductible. The Group’s liability for current tax is calculated using tax rates that 
have been enacted or substantively enacted by the balance sheet date. 
  
Deferred tax is the tax expected to be payable or recoverable on differences between the 
carrying amounts of assets and liabilities in the financial statements and the corresponding tax 
bases used in the computation of taxable profit, and is accounted for using the balance sheet 
liability method. Deferred tax liabilities are generally recognised for all taxable temporary 
differences and deferred tax assets are recognised to the extent that it is probable that taxable 
profits will be available against which deductible temporary differences can be utilised. Such 
assets and liabilities are not recognised if the temporary difference arises from the original 
recognition of other assets and liabilities in a transaction that affects neither the tax profit nor 
the accounting profit.  
 
The carrying amount of deferred tax assets is reviewed at each balance sheet date and 
reduced to the extent that it is no longer probable that sufficient taxable profits will be available 
to allow all or part of the asset to be recovered. 
 
Deferred tax is calculated at the tax rates that are expected to apply in the period when the 
liability is settled or the asset is realised. Deferred tax is charged or credited in the income 
statement, except when it relates to items charged or credited directly to equity, in which case 
the deferred tax is also dealt with in equity. 
 
No recognition has been made for the deferred tax asset arising in respect of current losses as 
the directors are of the opinion that this may not be realisable in the foreseeable future. 
  36 
 
 Financial instruments 
Financial assets and financial liabilities are recognised on the balance sheet when the 
Company becomes a party to the contractual provisions of the instrument. 
 
 Non-current intangible assets 
Non-current intangible assets are shown at cost less any provisions made in respect of 
impairment.  
 
 Asset impairments 
Assets are reviewed for impairment at each balance sheet date or if events or changes in 
circumstances indicate that the carrying amount may not be recoverable. When a review is 
conducted, the recoverable amount is assessed by reference to the net present value of 
expected future cash flows of the relevant income generating unit or disposal value, if higher. 
 
If an asset is impaired, a provision is made to reduce the carrying amount to its estimated 
recoverable amount. 
 
 Non-current asset investments 
Loan investments are shown at cost less provision for any permanent diminution in value. 
Loan investments are recognised as an asset when sums are advanced. 
 
Property, plant and equipment 
Office equipment and furniture are shown at cost less accumulated depreciation and any 
recognised impairment loss. Depreciation is charged so as to write off the cost of assets over 
their estimated useful lives, using the straight line method on the following basis: 
 
Office furniture and fittings  33% - 50% 
Computer and office equipment 33% - 100% 
 
Cash and cash equivalents 
Cash and cash equivalents comprise cash held at bank and on short term deposits. 
 
Trade payables 
Trade payables are not interest bearing and are stated at their nominal value. 
 
Trade receivables  
Trade receivables do not carry any interest and are stated at their nominal value as reduced 
by appropriate allowances for estimated irrecoverable amounts. 
 
Investments 
Investments are recognised and derecognised on a trade date where a purchase or sale of an 
investment is under a contract whose terms require delivery of the investment within the 
timeframe established by the market concerned, and are initially measured at cost, including 
transaction costs.  
 
Investments are classified as held-for-trading and are measured at subsequent reporting dates 
at fair value. Where securities are held for trading purposes, gains and losses arising from 
changes in fair value are included in net profit or loss for the period. 
 
Equity instruments 
Equity instruments issued by the Company are recorded at the proceeds received except 
where those proceeds appear to be less than the fair value of the equity instruments issued, in 
which case the equity instruments are recorded at fair value. The difference between the 
proceeds received and the fair value is reflected in the share based payments reserve. 
 
The costs of issuing new equity are charged against the share premium account. 
  37 
 
 Operating leases 
Rental costs under operating leases are charged to the income statement on a straight line 
basis over the term of the lease. Where an incentive to sign the lease has been taken, the 
incentive is spread on a straight line basis over the lease term. 
 
Pension costs 
The Company makes defined contributions to the independent pension scheme of its 
employees. 
 
Share-based payments 
The Group has applied the requirements of IFRS 2 Share-based payments. 
 
The Group issues equity-settled share-based payments to directors, staff and certain 
professional advisors of the Group. Equity-settled share-based payments are measured at fair 
value at the date of grant. The fair value determined at the grant date of the equity-settled 
share-based payment is expensed on a straight-line basis over the vesting period, based on 
the Group’s estimate of shares that will eventually vest. 
 
Fair value is measured using a Black-Scholes model. The expected life used in the model has 
been adjusted, based on management’s best estimate, for the effects of non-transferability, 
exercise restrictions, and behavioural considerations. 
 
       Critical accounting judgments and key sources of estimation uncertainty  
In the process of applying the Group’s accounting policies above, management necessarily 
makes judgments and estimates that have a significant effect on the amounts recognised in 
the financial statements. Changes in the assumptions underlying the estimates could result in 
a significant impact to the financial statements. The most critical of these accounting judgment 
and estimation areas are as follows: 
 
 Impairment of assets   
The Group reviews the carrying amounts of assets as at each balance sheet date, or if events 
or changes in circumstance indicate that the carrying amount may not be recoverable, to 
determine whether there is any indication of impairment. If any such indication exists, the 
asset’s recoverable amount or value in use is estimated. Determining the value in use requires 
the determination of future cash flows expected to be generated from the continued use and 
ultimate disposal of the asset. This requires the Company to make estimates and assumptions 
that can materially affect the financial statements. Any resulting impairment loss could have a 
material adverse impact on the Group’s financial position and results of operations. 
 
 
 
  38 
 
3. Segmental analysis 
 
The turnover and loss before tax are attributable to the principal activities of the Group.  
 
Segmental information on a geographical basis is set out below: 
 
 Year ended 31 March 2011 
  
 UK Philippines China Total 
 £ £ £ £ 
Revenue          7,299                   -       450,650 457,949 
     
Profit/(loss) for the year (3,176,239)                   -         24,725 (3,151,514) 
     
Share of associates’ results                   - (1,225,830)                  - (1,225,830) 
     
Depreciation/amortisation _______612                  -                  - _______612 
     
Total assets 1,045,018 25,471,424 __901,868 27,418,310 
     
Total liabilities 233,358  __436,380    _  20,429 ___ 690,168 
     
Loan investment additions                -  1,800,454                -  1,800,454 
 
Year ended 31 March 2010 
  
 UK Philippines China Total 
 £ £ £ £ 
Revenue           6,380                   -     355,718     362,098 
     
Loss for the year  (893,653)                   -    (27,073)   (920,726) 
     
Share of associates’ results                   -    ( 863,997)                 -   (863,997) 
 
Depreciation           1,348                                                                -                 -          1,348 
     
Total assets 4,147,678 24,861,626  922,096 29,931,400 
     
Total liabilities      207,971      464,590       9,831   682,392 
     
Loan investment additions                  -   1,410,568                 -  1,410,568 
 
Details of associated companies’ results are shown in note 30.     
     
 
 
 
 
 
 
 
 
 
 
  39 
 
4. Loss from operations 
  
 Loss from operations is stated after charging: 
 
 Year ended Year ended 
 31 March 2011 31 March 2010 
 £ £ 
Auditors remuneration:   
-auditing of the financial statements of the Company   
pursuant to legislation 48,490 43,690 
 - as reporting accountants - 18,750 
 - taxation compliance 1950 820 
Audit fees - other auditor 24,316 15,067 
Operating lease - office rent 69,186 69,186 
Foreign exchange losses  946,775 693,255 
Directors’ fees and emoluments (see note 6) 159,533 247,205 
Depreciation         612 __1,348 
  
5. Particulars of employees 
 
 The average number of staff employed by the Group during the financial year amounted to: 
  
 Year ended Year ended 
 31 March 2011 31 March 2010 
 No. No. 
Administrative staff           1           2 
 
 The aggregate costs of the above were: 
 £ £ 
Wages and salaries 29,664 43,404 
Social security costs 4,450 (1,115) 
Share based payments  1,418 57,640 
  ______  ______ 
 35,532 99,929 
  
Share-based payments charge relates to share options granted during the year to 
management and employees of TMM Management Inc in the Philippines. 
 
6. Directors’ emoluments and fees 
 
The Company also employed six (2010: five) directors during the year with aggregate 
emoluments in respect of qualifying services as follows: 
 
 Year ended Year ended 
 31 March 2011 31 March 2010 
 £ £ 
Directors’ emoluments 42,333 25,200 
Directors’ fees 54,800 42,600 
Amounts paid to third parties for the provision of 
directors’ services 62,400 59,400 
Share-based payments and related costs - 58,800 
 ______ ______ 
 159,533 186,000 
 
 £ £ 
Highest paid director 38,400 64,200 
  40 
 
Amounts paid in respect of professional consulting services are not included above. These are 
disclosed in the report of the directors on page 15 and the related party transactions note 26 
discloses the full amounts paid to directors directly and to third parties, for directors’ fees, 
consulting fees and expenses.  
 
7. Investment income 
 
Year ended Year ended 
31 March 2011  31 March 2010 
  Group  Group 
  £  £ 
Interest on bank deposits  17,813  24,146 
Interest on loan investments   809,199  662,845 
  _______  ______ 
  827,012   686,991 
 
8.    Income tax expense 
 
 Group Group 
 Year ended Year ended 
 31 March 2011 31 March 2010 
 £ £ 
Taxation credit - 198,100 
   
Current tax reconciliation   
Loss for the year before taxation (4,377,343) (1,982,823) 
   
 
   
   
    Group Group 
 Year ended Year ended 
 31 March 2011 31 March 2010 
 £ £ 
Loss for the year multiplied by standard 
rate of UK corporation tax 28% 
(1,225,656) 
 
(555,190) 
 
Effects of: 
Expenses not deductible for tax purposes 454,584 16,624 
Excess of capital allowance over depreciation (3,655) (4,299) 
Overseas loss/(profit) (6,923) 7,581 
Share of associates’ results 343,232 241,919 
Increase in potential tax credits 438,418 95,265 
 ________ _______ 
Tax  credit _______- (198,100)          
   
Potential UK tax credits available multiplied by   
standard rate of corporation tax 28% 818,527 217,296 
   
 
No recognition has been made of the deferred tax asset in respect of the losses shown above 
as the directors are of the opinion that this may not be realisable in the foreseeable future. 
  41 
 
9. Loss per share 
  
 Including share of associates’ results 
Loss per share has been calculated by dividing the loss for the year after taxation including 
share of associates’ losses of £1,225,830 (2010: £863,997) attributable to the equity holders of 
the parent company of £4,388,197 (2010:  £1,772,838) by the weighted average number of 
shares in issue at the year end of 43,176,974 (2010: 37,439,972). 
 
Diluted loss per share has been calculated using the weighted average number of shares in 
issue at the year end, diluted for the effect of share options in existence at the year end of 
665,000 (2010: 790,000). 
 
Excluding share of associates’ results 
Loss per share has been calculated by dividing the loss for the year after taxation excluding 
share of associates losses of £1,225,830 (2010: £863,997) attributable to the equity holders of 
the parent company of £3,162,367 (2010: £908,841) by the weighted average number of 
shares in issue at the year end of 43,176,974 (2010: 37,439,972). 
 
Diluted loss per share has been calculated using the weighted average number of shares in 
issue at the year end, diluted for the effect of share options in existence at the year end of 
665,000 (2010: 790,000).  42 
 
 
 
10. Property, plant and equipment 
 Company and Group 
 
 Computer and 
 office equipment 
Furniture, fixtures 
 and fittings 
Total 
 £ £ £ 
Cost    
Balance at 1 April 2010 39,986 38,105 78,091 
Additions in year 1,515 - 1,515 
 _____ _____ _____ 
Balance at 31 March 2011  41,501 38,105 79,606 
    
Depreciation    
Balance at 1 April 2010 39,705 38,105 77,810 
Charge for the year 612 - 612 
 _____ _____ _____ 
Balance at 31 March 2011 40,317 38,105 78,422 
    
Net book value    
At 31 March 2011 1,184 _____- 1,184 
    
At 31 March 2010 281 _____- 281 
  
Computer and 
 office equipment 
 
Furniture, fixtures 
 and fittings 
 
Total 
 £ £ £ 
Cost    
Balance at 1 April 2009 39,986 38,105 78,091 
 _____ _____ _____ 
Balance at 31 March 2010  39,986 38,105 78,091 
    
Depreciation    
Balance at 1 April 2009 39,102 37,360 76,462 
Charge for the year 603 745 1,348 
 _____ _____ _____ 
Balance at 31 March 2010 39,705 38,105 77,810 
    
Net book value    
At 31 March 2010       281            -      281 
    
At 31 March 2009       884       745   1,629 
 
 
 
 
 
  43 
 
 11. Investment in subsidiary undertakings 
  
Company 2011 2010 
 £ £ 
Cost   
Balance brought forward 10,286 10,286 
 _____ _____ 
Balance carried forward 10,286 10,286 
 
Subsidiary Country of Holding Proportion of  Nature of 
undertaking incorporation  voting shares 
held 
business 
     
China Nickel  
Corporation 
British Virgin 
Islands 
Ordinary 
shares 56.1% 
Consultancy 
Services 
China Nickel &  
Steel Corporation 
British Virgin 
Islands 
Ordinary 
shares 100% 
 
Dormant 
 
 
12.  Investment in associated undertakings 
  
Group 2011 2010 
 £ £ 
Cost   
Balance brought forward 11,005,854 11,869,851 
Addition 124,680 - 
Share of associate undertakings’ results     (1,225,830)     (863,997)  
   _________   _________ 
Balance carried forward _9,904,704 11,005,854 
 
Amortisation/impairment   
Balance brought forward 596,143 596,143 
Impairment charge 872,760 - 
 ________ ______ 
Balance carried forward 1,468,903 596,143 
 
Net book value 8,435,801 10,409,711 
 
   
Company 2011 2010 
 £ £ 
Cost   
Balance brought forward 10,466,250 10,466,250 
Addition 124,680 - 
 _________               _________               
Balance carried forward 10,590,930 10,466,250 
 
Amortisation/impairment   
Balance brought forward 596,143 596,143 
Impairment charge 872,760 - 
 ________  _______ 
Balance carried forward 1,468,903 596,143 
 
Net book value 9,122,027 9,870,107 
  44 
 
13. Loans and receivables  
 
Company and Group 2011 2010 
 £ £ 
Balance brought forward 14,451,634 13,755,986 
Additions 3,395,590 1,410,568 
Impairment charge (746,767) - 
Translation exchange movement (973,049) (714,920) 
Balance carried forward 16,127,408 14,451,634 
 
In April 2006, the Company subscribed for up to US$5 million in a three-year Loan Note in 
Atlas Consolidated Mining and Development Corporation (ACMDC), secured over ACMDC’s 
share of the Berong nickel project. The Note bears interest at the rate of 10% cumulative per 
annum and was repayable three years from each drawdown; it  is repayable out of ACMDC’s 
share of the Berong nickel project cash flow or is convertible into ACMDC shares or repayable 
in US$ cash (at the election of the Company). 
 
The principal amount advanced at 31 March 2011 was US$4,967,676 (2010 US$4,803,616). 
On 7 July 2010, the agreement was amended to extend repayments to four years from each 
drawdown. On 4 July 2011 the Company accepted an offer to settle the Loan Note in the 
amount of US$4,499,880 to be paid by ACMDC in three equal instalments at the ends of July, 
August and September 2011. The first instalment of US$1,500,000 was received on 29 July 
2011. The balance at 31 March 2011 of US$5,693,464 was written down to US$4,499,880, 
resulting in an impairment charge for the year of US$1,193,584 (£746,767).     
   
In 2007, the Company entered into an agreement to make a loan facility available to Brooks 
Nickel Ventures Inc. (Brooks) of up to US$2.5 million, secured over Brooks’ share of the Ipilan 
nickel project. This facility was subsequently increased in 2007 and in 2010 to US$10 million 
and terms extended from three to four years from each drawdown, to meet continuing pre-
operational exploration and working capital requirements. The loan bears interest at 10% 
cumulative per annum and is repayable out of Brooks’ share of the Ipilan nickel project 
operating cash flow. The principal amount advanced at 31 March 2011 was US$9,314,930 
(2010: US$8,174,930). At 31 March 2011, amounts totalling US$3,206,602 made up of 
principal drawn of US$2,137,421 and accrued interest of US$1,069,181 were due to be repaid. 
The Company is in discussions with Brooks in respect of addressing the repayments falling 
due.  
 
 Company and Group 
As repayments are linked to successful commercial exploitation of the Berong and Ipilan nickel 
projects respectively, the directors are of the opinion that it would be impractical to predict 
when these repayments might occur. The receivables are therefore shown at historical cost. 
 
Under the Celestial joint venture agreement, the Company has the option to take a 40% 
holding in Celestial Nickel Mining and Exploration Corporation (CNMEC). In August 2007, the 
board agreed to an advance of US$900,000 against the option exercise amount. If the 
Company decides not to exercise the option to purchase, or is prevented by any cause from 
exercising the option to purchase, then the borrowers are required to reimburse the advance. 
The advances are interest-free and guaranteed by CNMEC but are otherwise unsecured. Due 
to the uncertainty as to when, or if, the Company will exercise this option, the receivable has 
been shown at historical cost. 
 
Under the Berong venture agreement, the Company has advanced funds to Berong Nickel 
Corporation (BNC) to meet ongoing mine development costs. The total amount advanced at 
31 March 2011 was US$7,953,005 (2010: US$5,554,181). The loan amounts advanced are 
interest-free, unsecured and have no fixed terms of repayment.  As repayments are linked to 
successful commercial exploitation of the Berong nickel project, the directors are of the opinion 
that it would be impractical to predict when this receivable will be repaid and it is therefore 
shown at historical cost.  45 
 
14. Trade and other receivables – non-current 
 Company and Group 
 
 2011 2010 
  £ £ 
Rent deposit          - 40,036 
 
15. Trade and other receivables – current 
 
 Group Company Group Company 
 2011 2011 2010 2010 
 £ £ £ £ 
Trade receivables 903,771 19,872 879,887 21,813 
Rent deposit 40,063 40,063 - - 
Prepayments and accrued income  21,100   21,100   21,736   21,736 
 964,934 81,035 901,623   43,549 
 
16. Taxation 
 
 Group Company Group Company 
 2011 2011 2010 2010 
 £ £ £ £ 
Corporation tax recoverable - - 197,356 197,356 
Net payroll taxes recoverable 5,060 5,060 6,314 6,314 
VAT recoverable 6,681 6,681 7,842 7,842 
 ______ ______ ______ ______ 
 11,741 11,741 211,512 211,512 
 
17. Cash and cash equivalents 
 
 Group Company Group Company 
 2011 2011 2010 2010 
 £ £ £ £ 
Cash held in trust bank account 13,381 13,381 14,246 14,246 
Cash at bank and in hand 1,863,861 1,845,890 3,902,357 3,838,335 
 1,877,242 1,859,271 3,916,603 3,852,581 
 
 
18. Trade and other payables 
 
 Group Company Group Company 
 2011 2011 2010 2010 
 £ £ £ £ 
Trade payables 98,111 81,419 84,639 74,808 
Accruals 143,905 140,167 133,163 133,163 
Other payables 436,380 436,380 464,590 464,590 
 678,396 657,966 682,392 672,561 
 
Other payables relate to the Company’s remaining expenditure commitments which have been 
capitalised as part of the cost of acquiring the equity interests in the fixed asset investments as 
follows: 
 Group Company Group Company 
 2011 2011 2010 2010 
 £ £ £ £ 
Ulugan nickel project 436,380 436,380 464,590 464,590 
  46 
 
19. Taxation liabilities 
 
 Group Company Group Company 
 2011 2011 2010 2010 
 £ £ £ £ 
Payroll taxes 11,772 11,772 - - 
Corporation tax - - - - 
 ______ ______ ______ ______ 
 11,772 11,772            -            - 
 
20. Called up share capital 
 Company and Group  
 
 Number £ Number £ 
Ordinary shares of 5p each 2011 2011 2010 2010 
     
Authorised 55,879,500 2,793,975 55,879,500 2,793,975 
     
Allotted and fully paid 49,845,333 2,492,267 41,538,333 2,076,917 
 
 The Company has one class of ordinary shares which carry no right to fixed income. 
 
On 18 January 2011, the Company undertook a placement of 8,307,000 ordinary shares at 23 
pence per share.  
 
Share options in existence at 31 March 2011 are as follows: 
 
Number Description Exercise price Expiry date 
150,000 Ordinary shares  1.50 30 November 2011 
300,000 Ordinary shares £0.50 13 September 2012 
140,000 Ordinary shares  £0.50 11 February 2013 
  75,000 Ordinary shares  £0.50 9 November 2013 
 
The share options vested on the date of grant and are capable of being exercised at any 
time from the date of grant until the earlier of:  
1. the third anniversary of the date of grant;  
2. 12 months after the death of the optionholder; or 
3. 90 days after the optionholder ceases to hold office or employment with the Company or 
any subsidiary of the Company (other than at the discretion of the Board or by reason of 
his death). 
 
21. Share premium account 
 
Company and Group   
 2011 2010 
 £ £ 
Balance brought forward 27,218,897 24,570,675 
Premium arising on issue of equity shares 1,495,260 2,648,222 
   _________   _________ 
Balance carried forward 28,714,157 27,218,897 
 
 
 
  47 
 
22. Share-based payments reserve 
Company and Group   
 2011  2010 
 £ £ 
Balance brought forward 233,183 307,899 
Share options granted in year  1,418 116,260 
Transfer to retained loss (40,800) (190,976) 
  _______  _______ 
Balance carried forward 193,801  233,183 
 
The share-based payments reserve relates to share options granted to directors, staff and 
certain professional advisors. 
  
The share options vest on the date of grant and are capable of being exercised at any time 
between the date of grant and the expiry date. Share options granted since 1 April 2009 shall 
expire on the earlier of the date of expiry and 90 days after the date the grantee ceases to be a 
director or employee of the Company or of its associate (this can be amended at the discretion 
of the Directors). 
 
 Movement on share options was as follows: 
   
 2011 2010 
 No. of options No. of options 
Options at beginning of year 790,000 395,000 
Options granted 75,000 640,000 
Options lapsed (200,000) (245,000) 
 _______ ________ 
Options at end of year _665,000    790,000 
   
   
Options exercisable at year end 665,000 790,000 
 
Weighted average exercise prices were as follows:   
Options at beginning of year £0.66 £1.50 
Options granted £0.50 £0.47 
Options lapsed £0.40 £1.50 
Options at end of year £0.73 £0.66 
Options exercisable at year end £0.73 £0.66 
 
 2011 2010 
Weighted average remaining contracted life of options 
outstanding at the year end (years) 1.5 2.8 
   
Exercise prices of options outstanding at the year end   
 No. of options No. of options 
Exercise price per share   
£0.40 - 200,000 
£0.50 515,000 440,000 
£1.50  150,000  150,000 
  665,000  790,000 
   
Weighted average fair value of options granted in the 
period £0.02         £0.18 
 
 
  48 
 
The option pricing model used in calculating the fair value of options granted was the Black 
Scholes model.  
 
Inputs into the model for share options granted in the year were as follows: 
  
 2011 2010 
Weighted average share price £0.23 £0.33 
Weighted average exercise price £0.50 £0.47 
Average expected volatility 44% 89% 
Average option life (years) 3.0 3.6  
Average risk-free rate  0.63% 2.67% 
Expected dividends Nil Nil 
 
Expected volatility was determined by calculating the actual volatility of the Company’s share   
price based on historical movement.        
  
23. Minority interest – Group 
 
 The minority interest is in relation to a 43.9% share in China Nickel Corporation.  
 
 2011 2010 
 £ £ 
Share of current assets 391,530 400,409 
Share of current liabilities _(8,970)   (4,316) 
 382,560  396,093 
 
 
  49 
 
24. Cash flows from operating activities 
  
Group 2011 2010 
 £ £ 
Net (loss)/profit from operations (5,204,355) (2,669,814) 
Adjustments for:   
Share of associate undertakings’ losses  1,225,830 863,997 
Unrealised losses on investments 1,619,527 - 
Foreign exchange movements 917,497 657,121 
Depreciation 612 1,348 
Share-based payments charge 1,418 116,260 
 _________ _________ 
Operating cash flows before movements in working 
capital 
 
(1,439,471) 
 
(1,031,088) 
Capital expenditure (1,515)  
Decrease/(increase) in trade and other receivables (20,860) 52,934 
(Decrease)/increase in trade and other payables         7,776    (313,720) 
Cash outflow from operations  (1,454,070) (1,291,874) 
 
   
Company 2011 2010 
 £ £ 
Net  (loss)/profit from operations (4,003,251) (1,778,741) 
Adjustments for:   
Unrealised losses on investments 1,619,527 - 
Foreign exchange movements 973,049 714,919 
Amortisation - - 
Depreciation 612 1,348 
Share-based payments charge 1,418 116,260 
Loss on disposal of fixed assets - - 
 _________ _________ 
 (1,408,645) (946,214) 
Capital expenditure (1,515) - 
(Increase)/decrease in trade and other receivables 4,964 12,551 
(Decrease)/increase in trade and other payables (2,823) (251,754) 
 _________ _________ 
Cash outflow from operations (1,408,019) (1,185,417 
 
25. Controlling party 
 
 There is no ultimate controlling party of the Company. 
 
26. Related party transactions 
 
The Company was charged £155,437 (2010: £120,708) by Metal Analysis Limited for the 
provision of services of R Eccles, £38,600 (2010: £34,800) for services as Chairman and 
Director of the Company and £106,050 (2010: £78,300) for services as a consultant to the 
Company. Metal Analysis Limited also incurred expenses and recharged to the Company 
£10,787 (2010: £7,608). 
 
At the year end the Company owed £2,800 (2010: £4,000) to Metal Analysis Limited. 
 
During the year, the Company was charged £nil (2010: £12,600) by BHM Limited for the 
provision of services of S Purkiss, £nil (2010:£12,600) for services as Director of the Company 
and £nil (2010: £nil) for services as a consultant to the Company. 
 
  50 
 
At the year end and at 31 March 2010, the Company owed £nil to BHM Limited. 
 
During the year, the Company was charged £24,000 (2010: £22,800) by Consolidated Mines & 
Metals Limited for the provision of services of S Purkiss, £24,000 (2010: £12,000) for services 
as Director of the Company and £nil (2010: £10,800) for services as a consultant to the 
Company. 
 
At the year end, the Company owed £2,000 (2010:£11,600) to Consolidated Mines & Metals 
Limited. 
 
The Company was charged £77,748 (2010: £92,476) by F Pole, £26,400 (2010: £25,200) for 
services as Director of the Company and £43,000 (2010: £58,800) for services as a consultant 
to the Company. F Pole also incurred expenses and recharged to the Company £8,348 (2010: 
£8,476). 
 
At the year end the Company owed £12,400 (2010: £12,100) to F Pole. 
 
The Company was charged £60,400 (2010: £48,364) by C Thanassoulas, £26,400 (2010: 
£25,200) for services as Director of the Company and £34,000 (2010: £22,600) for services as 
a consultant to the Company. C Thanassoulas also incurred expenses and recharged to the 
Company £nil (2010: £564). 
 
At the year end the Company owed £2,400 (2010: £7,364) to C Thanassoulas. 
 
Simon Purkiss resigned as Executive Deputy Chairman and a director of European Nickel plc 
on 31 January 2011. 
 
Atlas Consolidated Mining and Development Corporation (ACMDC) and European Nickel plc 
are joint venture partners with the Company under the Berong Venture Agreement. 
 
Brooks Nickel Ventures, Inc. (Brooks) and Celestial Nickel Mining and Exploration Corporation 
(CNMEC) are joint venture partners with the Company under the Celestial/Ipilan Venture 
Agreement.   
 
Atlas Consolidated Mining and Development Corporation (ACMDC) is joint venture partner 
with the Company under the Ulugan Venture Agreement. 
 
Under the Berong, Celestial and Ulugan Venture Agreements, the Company has through the 
expenditure of qualifying costs of £10,464,306 acquired equity interests in the following 
Philippines’ registered companies. 
 
  
TMM 
Management 
Inc. 
Ulugan 
Resources 
Holdings 
Inc. 
 
Ulugan 
Nickel 
Corp. 
Nickeline 
Resources 
Holdings 
Inc. 
Nickel 
Laterite 
Resources 
Inc. 
 
Berong 
Nickel 
Corp. 
 
Ipilan 
Nickel 
Corp. 
Direct 40% 30% 40% 40% 20% 21.3% 40% 
Indirect       -       - 18% 18%       - 34.8% 12% 
Total 40% 30% 58% 58% 20% 56.1% 52%  51 
 
In April 2006, the Company subscribed for up to US$5 million in a three-year Loan Note in 
Atlas Consolidated Mining and Development Corporation (ACMDC), secured over ACMDC’s 
share of the Berong nickel project. The Note bears interest at the rate of 10% cumulative per 
annum and was repayable three years from each drawdown; it  is repayable out of ACMDC’s 
share of the Berong nickel project cash flow or is convertible into ACMDC shares or repayable 
in US$ cash (at the election of the Company). The principal amount advanced at 31 March 
2011 was US$4,967,676 (2010 US$4,803,616). On 7 July 2010, the agreement was amended 
to extend repayments to four years from each drawdown. On 4 July 2011, the Company 
accepted an offer to settle the Loan Note in the amount of US$4,499,880 to be paid by 
ACMDC in three equal instalments at the ends of July, August and September 2011. The first 
instalment of US$1,500,000 was received on 29 July 2011. 
 
During the year, the Company made further advances of US$177,369 (2010: US$nil) to 
ACMDC under the Loan Note. This amount forms part of total principal amount advanced as 
shown under non-current loan investments (see note 13).   
 
In 2007, the Company entered into an agreement to make a loan facility available to Brooks 
Nickel Ventures Inc. (Brooks) of up to US$2.5 million, secured over Brooks’ share of the Ipilan 
nickel project. This facility was subsequently increased in 2007 and in 2010 to US$10 million 
and terms extended from three to four years from each drawdown, to meet continuing pre-
operational exploration and working capital requirements. The loan bears interest at 10% 
cumulative per annum and is repayable out of Brooks’ share of the Ipilan nickel project 
operating cash flow. The principal amount advanced at 31 March 2011 was US$9,314,930 
(2010: US$8,174,930). 
 
Under the Celestial Venture Agreement, the Company has the option to take a 40% holding in 
CNMEC.  During the year ended 30 March 2007 the Company agreed to an advance of 
US$900,000, as shown in note 13, against the option exercise amount. If the Company 
decides not to exercise the option to purchase, or is prevented by any cause from exercising 
the option to purchase, then the borrowers are required to reimburse the US$900,000.  The 
advance is interest-free and guaranteed by CNMEC and its guarantors but is otherwise 
unsecured. 
 
CNMEC owns 40% of the issued share capital of Nickel Laterite Resources Inc.   
 
During the year, the Company paid CNMEC US$200,000 on completion of the definitive 
mining feasibility study. There is an agreement in place such that the Company has a 
commitment to make certain further payments to CNMEC as described in note 27. 
 
A potential claim for an unspecified sum for breach of contract has been notified to the 
Company in respect of a dispute with Celestial Nickel Mining Exploration Corporation.  The 
directors are firmly of the opinion that the claim is without foundation and no provision has 
been made in these accounts in that respect. 
 
The Company’s expenditure commitment under the Ulugan Venture Agreement at the year 
end and at 31 March 2010 is US$700,000. 
 
Under the Berong Venture Agreement, the Company has advanced funds to Berong Nickel 
Corporation (BNC) to meet ongoing mine development costs, of which US$6,129,258 was 
repaid in 2007. During the year, the Company advanced US$2,398,824 (2010: US$327,789) 
to BNC. This amount forms part of the total amount advanced as shown under non-current 
loan investments (see note 13). The loan amounts advanced are interest-free, unsecured and 
have no fixed terms of repayment. 
 
The Company has two subsidiaries, details of which are given in note 11.  52 
 
During the year, China Nickel Corporation charged Berong Nickel Corporation US$339,659 
(2010: US$524,195) in respect of consulting fees. At the year end, Berong Nickel Corporation 
owed China Nickel Corporation US$1,134,887 (2010: US$1,182,197). 
 
During the year, China Nickel Corporation charged Ipilan Nickel Corporation US$334,225 
(2010: US$116,040) in respect of consulting fees. At the year end, Ipilan Nickel Corporation 
owed China Nickel Corporation US$282,954 (2010: US$110,667). 
 
27. Commitments and contingencies 
 
Under a royalty agreement, the Company has made a commitment to make certain payments 
to CNMEC as follows: 
  
Upon completion of positive bankable feasibility study US$500,000 
Upon the commencement of construction of plant US$1,200,000 
 
A potential claim for an unspecified sum for breach of contract has been notified to the 
Company in respect of a dispute with CNMEC.  The directors are firmly of the opinion that the 
claim is without foundation and no provision has been made in these accounts in respect of 
this. 
 
28. Post balance sheet events 
 
Subsequent to 31 March 2011: 
The Company has advanced a further: 
• £68,700 (as US$112,200) to Berong Nickel Corporation as an interest free, unsecured 
advance under the Berong Venture Agreement; 
• £317,329 (as US$520,000) to Brooks Nickel Ventures Inc. to meet that company’s share of 
Ipilan project expenditure; 
• £248,433 (as US$400,000) to Berong Nickel Corporation as an interest-free bridging loan 
for short-term working capital. The bridging loan was repaid in full on 1 August 2011. 
The Company received: 
• £121,552 (as US$195,000) from China Nickel Corporation as an interest-free loan. The 
loan was repaid in full on 29 July 2011. 
 
On 4 July 2011, the Company and ACMDC reached an agreement for ACMDC to repay by 30 
September 2011 the amount of US$4,498,880 in full and final settlement of ACMDC loan. The 
first of three staged repayments, in the amount of US$1,500,000, was received by the 
Company on 29 July 2011.  
              
29.  Financial assets and liabilities 
 
 The Group’s financial instruments comprise cash and cash equivalents, loan investments and 
financial assets and various items such as trade receivables, trade payables, accruals and 
prepayments that arise directly from its operations. 
 
 The main purpose of these financial instruments is to finance the Group’s operations. 
 
 The Board regularly reviews and agrees policies for managing the level of risk arising from the 
Group’s financial instruments.  These are summarised below: 
 
   53 
 
Credit risk 
 Credit risk refers to the risk that a counterparty will default on its contractual obligations 
resulting in financial loss to the Company and Group, and arises principally from the 
consolidated entity’s loan receivables which are considered by the directors to be recoverable.  
 
 The carrying amounts of the financial assets recognised in the balance sheet best represents 
the Company and Group’s maximum exposure to credit risk at the reporting date. In respect of 
certain of the loans receivable the amounts are repayable from the borrower’s share of cash 
flows from the related mining projects (see note 13). No other collateral or security is held by 
the Company or Group in respect of these assets. The credit quality of all financial assets that 
are neither past due nor impaired is appropriate and is consistently monitored in order to 
identify any potential adverse changes in credit quality. There are no financial assets that have 
had renegotiated terms that would otherwise, without that renegotiation, have been past due 
or impaired at the balance sheet date. 
 
 Liquidity risk 
 Liquidity risk is the risk that the Company and Group will not be able to meet its financial 
obligations as they fall due.  
 
 The Company and Group’s policy throughout the year has been to ensure that it has adequate 
liquidity to meet its liabilities when due by careful management of its working capital. 
 
  
  
 
 
 
 
 
 
 
 
 
 
           
  54 
 
The following are the contractual maturities of financial liabilities: 
 
Group     
31 March 2011  
Carrying 
amount 
 
 
Cash flows 
 
3 months or 
less 
Greater 
than 3 
months 
 £ £ £ £ 
Trade and other payables 242,016 242,016 242,016 - 
Project expenditure commitment 436,380 436,380 - 436,380 
 ________ ________ ______ _______ 
 678,396 678,396 242,016 436,380 
  
31 March 2010 
 
 
Carrying 
amount 
 
 
 
Cash flows 
 
 
3 months or 
less 
 
Greater 
than 3 
months 
 £ £ £ £ 
Trade and other payables 217,802 217,802 217,802 - 
Project expenditure commitment 464,590 464,590 - 464,590 
Tax liabilities ________ ________ ______  _______ 
    682,392    683,392 217,802    464,590          
   
Company     
31 March 2011  
Carrying 
amount 
 
 
Cash flows 
 
3 months or 
less 
Greater 
than 3 
months 
 £ £ £ £ 
Trade and other payables 221,586 221,586 221,586 - 
Project expenditure commitment 436,380 436,380 - 436,380 
 ________ ________ ______ _______ 
 657,966 657,966 221,586 436,380 
Company     
31 March 2010  
Carrying 
amount 
 
Cash flows 
 
3 months or 
less 
Greater 
than 3 
months 
 £ £ £ £ 
Trade and other payables 207,971 207,971 207,971 - 
Project expenditure commitment 464,590 464,590 - 464,590 
Tax liabilities     
 ________ ________ ______ ______ 
    672,561    672,561 207,971    464,590         
 
Market risk 
 Market risk is the risk that changes in market prices, such as commodity prices, foreign    
exchange rates, interest rates and equity prices will affect the Company’s and Group’s income 
or the value of its holdings in financial instruments. 
 
 Commodity price risk 
 The principal activity of the Company and the Group is the development of nickel mining 
properties in the Philippines and the principal market risk facing the Group is an adverse 
movement in the commodity price of nickel. 
 
 Any long-term adverse movement in this price would affect the commercial viability of the 
mining properties and hence the value of investments by the Company and the Group as a 
whole. 
 
 
 
   55 
 
 Foreign currency risk 
 The Group undertakes transactions principally in Sterling and US Dollars. While the Group 
continually monitors its exposure to movements in currency rates, it does not utilise hedging 
instruments to protect against currency risks. The main currency exposure risk to the 
Company is in relation to the US Dollar loan investments which are repayable in US Dollars. 
 
 Interest rate risk 
 The Group utilises cash deposits at variable rates of interest for a variety of short-term periods, 
depending on cash requirements. The rates are reviewed regularly and the best rate obtained 
in the context of the Group’s needs.  
 
 Extent and nature of financial instruments 
 The financial assets and liabilities held by the Company and Group at the period end are 
shown below together with their fair values. Fair values have been arrived at after due and 
careful consideration by the Company’s directors.  
  
Group 31 March  31 March  31 March  31 March  
 2011 2011 2010 2010 
 £ £ £ £ 
Assets Carrying Net fair Carrying Net fair 
 amount value amount value 
Loans and receivables 16,127,140 16,127,140 14,451,634 14,451,634 
Trade and other receivables 964,934 964,934 941,659 941,659 
Taxation 11,741 11,741 211,512 211,512 
Short-term deposits 1,816,436 1,816,436 2,517,686 2,517,686 
Cash at bank and in hand 60,806 60,806 1,398,917 1,398,917 
 _________ _________ _________ _________ 
 18,981,057 18,981,057 19,521,408 19,521,408 
        
Group 31 March  31 March  31 March  31 March  
 2011 2011 2010 2010 
 £ £ £ £ 
Liabilities Carrying Net fair Carrying Net fair 
 amount value amount value 
Trade and other payables 242,016 242,016 217,802 217,802 
Project expenditure 
commitment 
 
436,380 
 
436,380 
 
464,590 
 
464,590 
Taxation 11,772 11,772 - - 
 ________ ________ ________ ________ 
 690.168 690,168    682,392    682,392 
 
  56 
 
 
Company 31 March  31 March  31 March  31 March  
 2011 2011 2010 2010 
 £ £ £ £ 
Assets Carrying Net fair Carrying Net fair 
 amount value amount value 
Loans and receivables 16,127,140 16,127,140 14,451,634 14,451,634 
Trade and other receivables 81,036 81,036 83,585 83,585 
Taxation 11,741 11,741 211,512 211,512 
Short-term deposits 1,816,436 1,816,436 2,517,686 2,517,686 
Cash at bank and in hand 42,835 42,835 1,334,895 1,334,895 
 _________ _________ _________ _________ 
 18,079,188 18,079,188 18,599,312 18,599,312 
 
Company 31 March  31 March  31 March  31 March  
 2011 2011 2010 2010 
 £ £ £ £ 
Liabilities Carrying Net fair Carrying Net fair 
 amount value amount value 
Trade and other payables 221,586 221,586 207,971 207,971 
Project expenditure 
commitment 
 
436,380 
 
436,380 
 
464,590 
 
464,590 
Taxation 11,772 11,772 - - 
 ________ ________ ________ ________ 
 669,738 669,738    672,561    672,561 
 
 Capital management 
 The Company’s capital consists wholly of ordinary shares. There are no other categories of 
shares in issue and the Company does not use any other financial instruments as capital 
substitutes or quasi capital. The Company manages its issued capital by considering future 
capital requirements of the Group which are largely dictated by the exploration and 
development of the mining properties in the Philippines and the head office overhead costs of 
the Company in London. The Company’s board of directors as a whole manages the capital by 
considering the need to raise further capital to meet the above costs on a rolling 12 month 
basis so as to enable the accounts to be prepared on a going concern basis but without 
unnecessary dilution of existing shareholder interests. The Board always places a priority on 
maximising the return to existing shareholders before raising further capital. 
 
 There are no externally imposed capital requirements on the Company. 
 
 Details of the ordinary share capital are set out in note 20. 
 
 
 
 
 
    57 
 
30. Associate undertakings 
  
 The Company has equity holdings in the following associate undertakings: 
 
  
TMM 
Management 
Inc 
Ulugan 
Resources 
Holdings 
Inc 
 
Ulugan 
Nickel 
Corp. 
Nickeline 
Resources 
Holdings 
Inc 
Nickel 
Laterite 
Resources 
Inc 
 
Berong 
Nickel 
Corp. 
 
Ipilan 
Nickel 
Corp. 
Direct 40% 30% 40% 40% 20% 21.3% 40% 
Indirect       -       - 18% 18%       - 34.8% 12% 
Total 40% 30% 58% 58% 20% 56.1% 52% 
 
The principal place of business and country of incorporation of the associate undertakings is the 
Philippines. 
  
 Summarised results of the associate undertakings as translated into sterling are as follows: 
 
 
 
 Berong Nickel 
Corporation 
Ipilan Nickel 
Corporation 
Remaining 
Associates Total 
Year ended 31 March 2010 £ £ £ £ 
     
Revenue    2,387,297                -    405,612   2,792,909 
     
Profit/(loss) for the year (1,402,435)  (174,709)      14,517 (1,562,627) 
     
Total assets  13,187,476 6,425,163 2,176,616 21,789,255 
     
Total liabilities    7,520,371    104,218 1,728,040   9,352,629 
     
 
31. Operating lease commitments 
 
The Company and Group had outstanding operating lease commitments falling due as follows: 
 
Land and buildings 
 
 
2011 
 
2010 
 £ £ 
Within one year  38,131 76,895 
Within 2 – 5 years  ___    -   38,131 
Total  38,131 115,026 
 
On 23 April 2010, the Company entered into a new lease to occupy its offices at Ground Floor, 11 
Albemarle Street, London W1S 4HH for a period expiring on 28 September 2011. 
 
 Berong Nickel 
Corporation 
Ipilan Nickel 
Corporation 
Remaining 
associates Total 
Year ended 31 March 2011 £ £ £ £ 
     
Revenue ________- ________- __392,796 __392,796 
     
Profit/(loss) for the year (2,028,577) (180,460) (16,164) (2,192,873) 
     
Total assets 12,218,121 6,961,851 2,285,953 21,465,925 
     
Total liabilities 8,695,249 253,780 1,830,367 10,779,396  58 
 
Corporate directory 
 
 
Directors Reg Eccles (Chairman) 
  Victor Kolesnikov (Chief Executive Officer) 
  Simon Purkiss (Non-Executive Director) 
  Constantine Thanassoulas   (Non-Executive Director) 
  Jason Cheng       (Non-Executive Director) 
 
Secretary Thrings LLP 
 
Registered office Ground Floor, 11 Albemarle Street  
   London 
   W1S 4HH 
 
Nominated adviser 
and broker  Ambrian Partners Limited 
   Old Change House 
   128 Queen Victoria Street 
   London 
   EC4V 4BJ 
 
Solicitors  Thrings LLP 
   Kinnaird House  
   1 Pall Mall East 
   London 
   SW1Y 5AU 
 
Auditors Sawin & Edwards 
  15 Southampton Place 
  London 
  WC1A 2AJ 
 
Financial Adrian Harvey FCCA 
  GHCP Services Limited 
  Second Floor, 81 Piccadilly 
  London 
  W1J 8HY 
 
Principal bankers Coutts & Co 
   188 Fleet Street 
   London 
   EC4A 2HT 
  
Registrars  Capita IRG plc 
   Bourne House, 34 Beckenham Road 
   Beckenham 
   Kent 
   BR3 4TU 
 
Website  www.toledomining.com