Alecto Energy PLC Alecto Energy plc - Final Results, Notice of AGM and Proposed Change of Name by 24hgold

Alecto Energy plc / Index: AIM / Epic: ALO

19 April 2011

Alecto Energy plc (�Alecto� or �the Company�)

Final Results

Notice of Annual General Meeting

Proposed Change of Name

The Directors of Alecto are pleased to announce the Company�s audited results for the year ended 31 December 2010 and gives notice of its annual general meeting to be held on 23 May 2011.

Overview

� Successfully granted three base metal and two uranium development licences in prospective mining district of Mauritania

� Commenced four phase exploration programme focussed on identifying key areas for further development

� Appointment of leading consultants SRK Exploration Services to undertake phases 1 and 2 of exploration

� Healthy cash position - �2,370,000 raised during the period via two Placings

� Experienced Board focussed on building a solid portfolio through acquisition of complementary resource projects in Africa

� Proposed name change to Alecto Minerals in order to reflect the Company�s focus on the resource sector

Chairman�s Report

Operational Review

This has been an important year for Alecto, during which we have successfully been granted three gold and base metal and two uranium development licences covering circa 3,500 sq km in the highly prospective Mauritanide mobile belt in Mauritania. With a defined work programme currently underway at a number of these licences, a strong cash position to fund our forthcoming activities and an experienced management team in place, we are now centred on building value both on the ground and through the acquisition of complementary resource projects, primarily in Africa.

Mauritania provides the Company with an opportunity for discovery, having already yielded some significant mining projects including Red Back Mining Inc�s Tasiast Gold Mine with a resource of 6.5 Moz (but remains open along strike). Production at the Guelb Moghrein deposit, owned by First Quantum Minerals, has also resumed with both copper and gold being targeted.

Our licences were granted by the Mauritanian Ministry of Industry and Mines in October 2010, following extensive fieldwork and analysis of historic data conducted by our consulting partner, O�Connor International Ltd (�O�Connor�), together with leading consultants SRK Exploration Services (�SRK ES�).

The three gold and base metal licences are located at Chegar (756 sq km), Wad Armour (613 sq km) and Zreibya (459 sq km) and SRK ES has commenced work on our defined exploration programme to identify key areas of interest for further development and drilling. This is primarily taking place at Wad Amour and Zreibya which are both considered highly prospective and have good accessibility. The first phase of the work programme includes detailed soil sampling and regional reconnaissance work, which commenced in February 2011, and reinterpretation and analysis of historic data is being carried out in tandem with this. Once the results from these studies are received, additional soil sampling and geophysical surveys will be undertaken and this is expected to commence by the end of April 2011. Exploration at these licences is still at an early stage but to date, progress has been encouraging and we are optimistic about the Company�s ability to advance these projects to the next stages of development.

Having previously seen geochemical sampling results in May 2010 which demonstrated the existence of uranium values at the sites, SRK ES is also carrying out initial exploratory and data analysis at our Mreiti (888 sq km) and Wad Mourkba (704 sq km) uranium licences to support our existing knowledge of the licences. The licences span an internal WSW-ESE contact within the Achaean shield and close to its edge with the younger rocks of the Taoudenu Sedimentary Basin. We look forward to results from these studies and will update shareholders accordingly.

We also have exposure to additional resource projects through investments in a number of entities. In July 2010, the Board converted the �45,000 working capital facility provided to Bulgarian Mining Corporation Ltd (�BMC�) into a 20% shareholding in BMC further to evaluating its uranium assets. Additionally, in June 2010, the Company also took a 9.73% shareholding in AIM listed Charles Street Capital plc (�CSC�), which is currently looking to invest in opportunities across the resource sector.

Financial Review

The loss before taxation of the Group for the year ended 31 December 2010 amounted to �655,806 (31 December 2009: �213,750). During the year the Company raised �2,370,000 before expenses through two placings of new shares.

Outlook

We have made progress over the past year which we believe has created a platform for future growth. Our licences are situated in a highly prospective region of Mauritania which is already home to a number of significant mining projects.

We are also evaluating additional resource opportunities in Africa and particularly in Ghana.

Finally, I would like to thank our shareholders for the support we have received during the past year, and look forward to updating them on these developments over the coming months. I would also like to thank our excellent management team for its continued dedication.

Malcolm James

Chairman

19 April 2011

Notice of Annual General Meeting

A notice of the Company�s annual general meeting, along with a copy of the Company�s annual report and accounts will be posted to shareholders shortly. The annual general meeting will be held at the London Marriott Hotel Park Lane, 140 Park Lane, London W1K 7AA on 23 May 2011 at 12.00pm.

Proposed Change of Name

A resolution has been included at the annual general meeting for the proposed change of the Company�s name to Alecto Minerals plc. As the Company has broadened its investment strategy the Directors believe the change of name to Alecto Minerals plc more accurately reflects the activities of the Company.

**ENDS**

For further information, please visit www.alectoenergy.com or contact:

Damian Conboy	Alecto Energy plc	Tel: 020 3326 1725
Greg Kuenzel	Alecto Energy plc	Tel: 020 3326 1725
Nick Naylor	Allenby Capital Ltd	Tel: 020 3328 5656
Alex Price	Allenby Capital Ltd	Tel: 020 3328 5656
Hugo de Salis	St Brides Media & Finance Ltd	Tel: 020 7236 1177
Elisabeth Cowell	St Brides Media & Finance Ltd	Tel: 020 7236 1177

BALANCE SHEETS

As at 31 December 2010

		Group		Company
	Note	2010 �	2009 �	2010 �	2009 �
Non-Current Assets
Property, plant and equipment	7	-	-	-	-
Intangible assets	8	768,489	-	-	-
Investment in subsidiaries	9	-	-	807,643	-
Restricted assets	10	21,464	-	-	-
Available-for-sale financial assets	11	365,000	-	365,000	-
		1,154,953	-	1,172,643	-
Current Assets
Trade and other receivables	12	126,774	27,200	126,774	27,200
Cash and cash equivalents	13	2,015,012	741,964	2,015,011	741,512
		2,141,786	769,164	2,141,785	768,712
Total Assets		3,296,739	769,164	3,314,428	768,712
Current Liabilities
Trade and other payables	14	82,837	67,330	80,777	67,330
		82,837	67,330	80,777	67,330
Non-current liabilities
Deferred tax	15	-	-	-	-
		-	-	-	-
Total Liabilities		82,837	67,330	80,777	67,330
Net Assets		3,213,902	701,834	3,233,651	701,382
Capital and Reserves Attributable to Equity Holders of the Company
Called up share capital	16	1,303,860	656,412	1,303,860	656,412
Share premium account	16	5,124,210	3,007,576	5,124,210	3,007,576
Merger reserve		-	-	-	405,000
Other reserves	17	333,938	182,504	333,938	182,504
Foreign currency translation reserve Available-for-sale financial asset reserve		(19,748) 176,000	(52,106) -	- 176,000	- -
Retained losses		(3,704,358)	(3,092,552)	(3,704,357)	(3,550,110)
Total Equity		3,213,902	701,834	3,233,651	701,382

GROUP INCOME STATEMENT

For the year ended 31 December 2010

		Group
		Continuing Operations	Discontinuing Operations	Total		Continuing Operations	Discontinuing Operations		Total
	Note	2010 �	2010 �	2010 �		2009 �	2009 �		2009 �
Administration expenses		(604,005)	-	(604,005)		(208,538)	(4,287)		(212,825)
Loss on foreign exchange		-	-	-		-	(1,623)		(1,623)
Loss on dissolution of subsidiary	18	-	(52,558)	(52,558)		-	-		-
Operating Loss	6	(604,005)	(52,558)	(656,563)		(208,538)	(5,910)		(214,448)
Finance income	21	757	-	757		698	-		698
Loss Before Taxation		(603,248)	(52,558)	(655,806)		(207,840)	(5,910)		(213,750)
Corporation tax credit	22	44,000	-	44,000		-	-		-
Loss for the Year		(559,248)	(52,558)	(611,806)		(207,840)	(5,910)		(213,750)
Attributable to Owners of the Parent		(559,248)	(52,558)	(611,806)		(207,840)	(5,910)		(213,750)

Basic and Diluted Loss Per Share (pence)	23	(0.531) p	(0.049) p		(0.580) p	(0.410) p	(0.011) p	(0.421) p

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2010

		Group
		Continuing Operations	Discontinuing Operations	Total	Continuing Operations	Discontinuing Operations	Total
	Note	2010 �	2010 �	2010 �	2009 �	2009 �	2009 �
Loss for the year		(559,248)	(52,558)	(611,806)	(207,840)	(5,910)	(213,750)
Other Comprehensive Income:
Exchange differences on translating foreign operations		(19,748)	-	(19,748)	-	708	708
Reclassification adjustment: Cumulative foreign currency translation losses on dissolution of subsidiary		-	52,106	52,106	-	-	-
Available-for-sale financial assets (net of tax)	22	176,000	-	176,000	-	-	-
Total Comprehensive Income for the Year Attributable to Owners of the Parent		(402,996)	(452)	(403,448)	(207,840)	(5,202)	(213,042)

GROUP STATEMENT OF CHANGES IN SHAREHOLDERS� EQUITY

For the year ended 31 December 2010

	Attributable to owners of the parent
	Share capital	Share premium	Available-for-sale investments	Share option reserve	Translation reserve	Profit and loss account		Total equity
	�	�	�	�	�	�		�
As at 1 January 2009	196,146	2,755,170	-	175,707	(52,814)	(2,878,802)		195,407
Comprehensive income
Loss for the year						(213,750)		(213,750)
Other comprehensive income
Currency translation differences	-	-	-	-	708	-		708
Total comprehensive income	-	-	-	-	708	(213,750)		(213,042)
Transactions with owners
Issue of ordinary shares	460,266	258,010	-	-	-	-		718,276
Share based payments	-	(5,604)	-	6,797	-	-		1,193
Total transactions with owners	460,266	252,406	-	6,797	-	-		719,469
As at 31 December 2009	656,412	3,007,576	-	182,504	(52,106)	(3,092,552)		701,834
Comprehensive income
Loss for the year	-	-	-	-	-	(611,806)		(611,806)
Other comprehensive income
Currency translation differences	-	-	-	-	32,358	-		32,358
Available-for-sale financial assets (net of tax)	-	-	176,000	-	-	-	176,000
Total other comprehensive income	-	-	176,000	-	32,358	-		208,358
Total Comprehensive income	-	-	176,000	-	32,358	(611,806)		(403,448)
Transactions with owners
Issue of ordinary shares	647,448	2,286,633	-	-	-	-		2,934,081
Issue costs	-	(169,999)	-	108,327	-	-		(61,672)
Share based payments	-	-	-	43,107	-	-		43,107
Total transactions with owners	647,448	2,116,634	-	151,434	-	-			2,915,516
As at 31 December 2010	1,303,860	5,124,210	176,000	333,938	(19,748)	(3,704,358)			3,213,902

GROUP CASH FLOW STATEMENT

For the year ended 31 December 2010

		Group
		Continuing Operations	Dis-continuing Operations	Total	Continuing Operations	Dis-continuing Operations	Total
	Note	2010 �	2010 �	2010 �	2009 �	2009 �	2009 �
Cash flows from operating activities
Operating loss		(604,005)	(52,558)	(656,563)	(208,538)	(5,910)	(214,448)
Adjustments for:
Depreciation		-	-	-	292	-	292
Share options expense		43,106	-	43,106	1,193	-	1,193
Loss on dissolution of subsidiary		-	52,558	52,558	-	-	-
Exclusivity fee		90,000	-	90,000	-	-	-
Consultancy fees paid in shares		70,000	-	70,000	-	-	-
Decrease in trade and other receivables		7,328	-	7,328	5,217	1,197	6,414
Decrease in trade and other payables		(38,254)	-	(38,254)	(48,759)	-	(48,759)
Foreign exchange		-	-	-	-	1,623	1,623
Net cash used in operations		(431,825)	-	(431,825)	(250,595)	(3,090)	(253,685)
Cash flows from investing activities
Cash paid on dissolution of subsidiary		-	(452)	(452)	-	-	-
Interest received		757	-	757	698	-	698
Cash paid for restricted assets		(21,465)		(21,465)	-	-	-
Loans to third parties		(45,000)	-	(45,000)	-	-	-
Purchase of available-for-sale financial assets		(100,000)	-	(100,000)	-	-	-
Purchase of intangible assets		(244,307)	-	(244,307)	-	-	-
Net cash generated/(used) in investing activities		(410,015)	(452)	(410,467)	698	-	698
Cash flows from financing activities
Proceeds from issue of share capital		2,177,179	-	2,177,179	723,277	-	723,277
Transaction costs of share issue		(61,672)	-	(61,672)	(5,000)	-	(5,000)
Net cash generated from financing activities		2,115,507	-	2,115,507	718,277	-	718,277
Net increase / (decrease) in cash and cash equivalents		1,273,667	(452)	1,273,215	468,380	(3,090)	465,290
Cash and cash equivalents at beginning of period		741,512	452	741,964	273,132	3,013	276,145
Exchange gains on cash and cash equivalents		(167)	-	(167)	-	529	529
Cash and cash equivalents at end of period	13	2,015,012	-	2,015,012	741,512	452	741,964

SELECTED NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2010

These notes have been selected from and should be read in conjunction with the Company�s annual report and accounts, available to view from the Company�s website, http://www.alectoenergy.com.

1. General information

The principal activity of Alecto Energy Plc (�the Company�) and its subsidiaries (together �the Group�) is the exploration and development of precious and base metals. The Company�s shares are listed on the Alternative Investment Market of the London Stock Exchange. The Company is incorporated and domiciled in the UK.

The address of its registered office is 200 Strand, London WC2R 1DJ.

2. Summary of Significant Accounting Policies

The principal Accounting Policies applied in the preparation of these Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Basis of Preparation of Financial Statements

The Consolidated Financial Statements have been prepared in accordance with EU-endorsed International Financial Reporting Standards (IFRSs) and International Financial Reporting Interpretations Committee (IFRIC) interpretations and the parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Consolidated Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.

The Financial Statements are presented in Pound Sterling rounded to the nearest pound.

Alecto Energy Plc, the legal parent, is domiciled and incorporated in the United Kingdom.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group�s Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 4.

2.2 Changes in accounting policy and disclosures

(a) New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2010.

IFRS 3 (revised), �Business Combinations�, and consequential amendments to IAS 27, �Consolidated and separate financial statements�, IAS 28 �Investments in associates�, and IAS 31 �Interests in joint ventures�, are effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009.

The revised standard continues to apply the acquisition method to business combinations but with some significant changes compared to IFRS 3. For example, all payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of comprehensive income. All acquisition costs are expensed.

The adoption of these standards has no impact on the current period, as all new companies within the Group have been owned since incorporation.

(b) New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 January 2010 but not currently relevant to the Group

The following standards and amendments to existing standards have been published and are mandatory for the group�s accounting periods beginning on or after 1 January 2010, but are not relevant to the Group.

Amendments to IFRS 1 �First-time Adoption of International Financial Reporting Standards� and IAS 27 �Consolidated and Separate Financial Statements� addressed concerns that retrospectively determining the cost of an investment in separate financial statements and applying the cost method in accordance with IAS 27 on first-time adoption of IFRSs cannot, in some circumstances, be achieved without undue cost or effort. These amendments were effective for periods beginning on or after 1 July 2009.

Further amendments to IFRS 1 addressed the retrospective application of IFRSs to particular situations (oil and gas assets and leasing contracts), and are aimed at ensuring that entities applying IFRSs will not face undue cost or effort in the transition process. These amendments were effective for periods beginning on or after 1 January 2010.

(b) New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 January 2010 but not currently relevant to the group (continued)

Amendments to IFRS 2 �Share-based Payment� clarified the accounting for group cash-settled share-based payment transactions. These amendments were effective for periods beginning on or after 1 January 2010.

Amendments to IAS 39 �Financial Instruments: Recognition and Measurement� provided additional guidance on what can be designated as a hedged item. These amendments were effective for periods beginning on or after 1 July 2009.

IFRIC 17 �Distributions of Non-cash Assets to Owners� standardised practice in the measurement of distributions of non-cash assets to owners. This interpretation was effective for periods beginning on or after 1 July 2009.

IFRIC 18 �Transfers of Assets from Customers� clarified the requirements of IFRSs for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water). This interpretation was effective for periods beginning on or after 1 July 2009.

(c) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2010 and not early adopted

The group and parent entity�s assessment of the impact of these new standards and interpretations is set out below.

IFRS 9 �Financial Instruments� specifies how an entity should classify and measure financial instruments, including some hybrid contracts, with the aim of improving and simplifying the approach to classification and measurement compared with IAS 39. This standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. The Directors are assessing the possible impact of this standard on the Group�s financial statements.

A revised version of IAS 24 �Related Party Disclosures� simplifies the disclosure requirements for government-related entities and clarifies the definition of a related party. This revision is effective for periods beginning on or after 1 January 2011 and is not expected to have an impact on the Group�s financial statements.

An amendment to IFRS 1 �First-time Adoption of International Financial Reporting Standards� relieves first-time adopters of IFRSs from providing the additional disclosures introduced in March 2009 by �Improving Disclosures about Financial Instruments� (Amendments to IFRS 7). This amendment is effective for periods beginning on or after 1 July 2010 and is not expected to have an impact on the Group�s financial statements.

Further amendments to IFRS 1 replace references to a fixed date of 1 January 2004 with �the date of transition to IFRSs�, thus eliminating the need for companies adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs, and provide guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation. This amendment is effective for periods beginning on or after 1 July 2011, subject to EU endorsement, and is not expected to have an impact on the Group�s financial statements.

Amendments to IFRS 7 �Financial Instruments: Disclosures� are designed to help users of financial statements evaluate the risk exposures relating to transfers of financial assets and the effect of those risks on an entity�s financial position. These amendments are effective for periods beginning on or after 1 January 2011, subject to EU endorsement. The Directors are assessing the possible impact of these amendments on the Group�s financial statements.

Amendments to IAS 12 �Income Taxes� introduce a presumption that recovery of the carrying amount of an asset measured using the fair value model in IAS 40 �Investment Property� will normally be through sale. These amendments are effective for periods beginning on or after 1 January 2012, subject to EU endorsement, and are not expected to have an impact on the Group�s financial statements.

Amendments to IAS 32 �Financial Instruments: Presentation� address the accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. These amendments are effective for periods beginning on or after 1 February 2010, and are not expected to have an impact on the Group�s financial statements.

�Improvements to IFRSs� are collections of amendments to IFRSs resulting from the annual improvements project, a method of making necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project. These improvements have various implementation dates; for May 2010 improvements, the earliest is effective for periods beginning on or after 1 July 2010 subject to EU endorsement. The Directors are assessing the possible impact of these improvements on the Group�s financial statements.

(c) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2010 and not early adopted

IFRIC 19 �Extinguishing Financial Liabilities with Equity Instruments� clarifies the treatment required when an entity renegotiates the terms of a financial liability with its creditor, and the creditor agrees to accept the entity�s shares or other equity instruments to settle the financial liability fully or partially. This interpretation is effective for periods beginning on or after 1 July 2010. The Directors are assessing the possible impact of this interpretation on the Group�s financial statements.

An amendment to IFRIC 14 �IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction�, on prepayments of a minimum funding requirement, applies in the limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements. The amendment permits such an entity to treat the benefit of such an early payment as an asset. This amendment is effective for periods beginning on or after 1 January 2011, and is not expected to have an impact on the Group�s financial statements.

2.3 Basis of Consolidation

The Group Financial Statements consolidate the Financial Statements of Alecto Energy plc and the management accounts of all of its subsidiary undertakings made up to 31 December 2010.

Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group obtains and exercises control through voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values at the acquisition date.

Investments in subsidiaries are accounted for at cost less impairment.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

2.4 Going Concern

The Group�s business activities together with the factors likely to affect its future development, performance and position are set out in the Chairman�s report on page 3. In addition, Notes 3 and 4 to the Financial Statements include the Group�s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit and liquidity risk.

The Financial Statements have been prepared on a going concern basis. Although the Group�s assets are not generating revenues and an operating loss has been reported, the Directors believe that the Group has sufficient funds to undertake its operating activities over the next 12 months including any additional payment required in relation to its current exploration projects. The Group has financial resources which, the Directors believe, will be sufficient to fund the Group�s committed expenditure both operationally and on various exploration projects for this time period. However, in order to meet the minimum spending requirements over the life of existing projects and as additional projects are identified additional funding will be required. The amount of funding is unforeseen at the point of approval of these Financial Statements and the Group will be required to raise additional funds either via an issue of equity or through the issuance of debt. The Directors are confident that funds will be forthcoming if and when they are required.

The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

2.5 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

2.6 Foreign Currencies

(a) Functional and presentation currency

Items included in the Financial Statements of the Group�s entities are measured using the currency of the primary economic environment in which the entity operates (the �functional currency�). The functional currency of the UK parent entity is sterling and the functional currency of the BVI subsidiary is US Dollars. The currency of Mauritania is the Mauritanian Ouguiya, however all material contracts with the Mauritanian subsidiary are denominated in Euros which is, therefore, its functional currency. The functional currency of the Group�s previously owned Australian subsidiary was Australian Dollars. The Financial Statements are presented in pound sterling, rounded to the nearest pound, which is the Company�s functional and Group�s presentation currency.

(b) Transactions and balances

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

(c) Group companies

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

� assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

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

� all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.

2.7 Intangible assets

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Exploration and evaluation assets are recorded and held at cost.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas.

Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the income statement.

2.8 Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all tangible assets to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates:

Computer equipment � 40% straight line

An asset�s carrying amount is written down immediately to its recoverable amount if the asset�s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within �Other (losses)/gains� in the income statement.

2.9 Impairment of non-financial assets

Assets that have an indefinite useful life, for example, intangible assets not ready to use, are not subject to amortisation and are tested annually for impairment. Tangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset�s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset�s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.10 Financial Assets

Classification

The Group classifies its financial assets in the following categories: loans and receivables and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Group�s loans and receivables comprise trade and other receivables, restricted assets and cash and cash equivalents in the balance sheet.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period.

Recognition and measurement

Investments are initially recognised at fair value plus transaction costs, for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value unless the Group is precluded from doing so as, in the case of unlisted equity securities, the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. In such circumstances available-for-sale financial assets are held at cost and reviewed annually for impairment. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as �gains and losses from investment securities.�

Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of other income. Dividends on available-for-sale equity instruments are recognised in the income statement as part of Other Income when the Group�s right to receive payments is established.

Impairment of financial assets

(i) Assets carried at amortised cost

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a �loss event�), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

� significant financial difficulty of the issuer or obligor;

� a breach of contract, such as a default or delinquency in interest or principal repayments;

� the disappearance of an active market for that financial asset because of financial difficulties; or

� observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio.

The amount of the loss is measured as the difference between the asset�s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset�s original effective interest rate. The asset�s carrying amount is reduced, and the loss is recognised in the income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument�s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor�s credit rating), the reversal of the previously recognised impairment loss is recognised in the income statement.

(ii) Assets classified as available-for-sale

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. For debt securities, the Group uses the criteria referred to in (i) above. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss � measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the income statement � is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the income statement, the impairment loss is reversed through the income statement.

2.11 Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, demand deposits, bank overdrafts, and short-term, highly liquid investments that are readily convertible into known amounts of cash, and are subject to an insignificant risk of changes in value.

2.12 Taxation

The tax credit or expense for the period comprises deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

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

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.

Deferred tax assets and liabilities are not discounted.

2.13 Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.14 Share Based Payments

The Group operates a number of equity-settled, share-based schemes, under which the entity receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in the income statement or charged to equity depending on the nature of the service provided. The total amount to be expensed or charged is determined by reference to the fair value of the options granted:

� including any market performance conditions;

� excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

� including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

2.15 Trade Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

2.16 Operating leases

Leases of assets under which a significant amount of the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are charged to the income statement on a straight-line basis over the period of the respective leases.

2.17 Finance income

Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates applicable.

3. Financial Risk Management

3.1 Financial Risk Factors

The Group�s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group�s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group�s financial performance.

Market Risk

(a) Foreign currency risks

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Bulgarian Leva, Mauritanian Ouguiya and the UK pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group negotiates all material contracts for activities in relation to its subsidiary in Euros which in the Directors� opinion is more stable than the local currency. The Group also holds minimal liquid assets in Mauritanian Ouguiya. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts. The Group has not sensitised the figures for fluctuations in foreign exchange rates as the Directors are of the opinion that these fluctuations would not have a significant impact on the financial statements of the Group at the present time. The Directors will Continue to assess the effect of movements in exchange rates on the Groups financial operations and initiate suitable risk management measures where necessary.

(b) Price risk

The Group is exposed to commodity price risk as a result of its operations. However, given the size of the Group�s operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The Directors will revisit the appropriateness of this policy should the Group�s operations change in size or nature.

The Group is exposed to equity securities price risk because of investments held by the Group as available-for-sale financial assets. The Group�s investments in equity of other entities that are publicly traded are listed on AIM. There is a limited volume of shares traded in the Company�s investee and if the Company was to dispose of a significant percentage of its shares this could have a substantial impact on the realisable value of these shares.

The Group does not have a substantial portfolio of shares and manages its price risk by undertaking specific company research prior to investing. The Group�s listed equity investment is held for long term growth which the Directors believe mitigates the risk of crystallising short term speculative reductions in value.

The table below summarises the impact of increases/decreases in the AIM index on the Group�s other comprehensive income for the year. The analysis is based on the assumption that the AIM index had increased/decreased by 10% with all other variables held constant and all the Group�s listed equity investments moved according to the historical correlation with the index.

2010

Index

Impact on post tax losses

�

Impact on other comprehensive income

�

AIM

12,160

48,640

No comparative figures are presented as the Group did not have listed equity investments at 31 December 2009.

Other comprehensive income would increase/decrease as a result of gains/losses on listed equity securities classified as available-for-sale. Post tax losses would increase/decrease as a result of the utilisation of tax losses arising from the movement in fair value of listed equity securities classified as available-for-sale.

(c) Interest rate risk

As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group�s interest rate risk arises from its cash held on short-term deposit, which is not significant.

Credit Risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables.

The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

Liquidity Risk

In keeping with similar sized mineral exploration Groups, the Group�s continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Directors are confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.

3.2 Capital Risk Management

The Group�s objectives when managing capital are to safeguard the Group�s ability to continue as a going concern, in order to provide returns for shareholders and to enable the Group to continue its exploration and evaluation activities. The Group has no debt at 31 December 2010 and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.

3.3 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

The following table presents the Group�s assets that are measured at fair value at 31 December 2010. The Group does not have any liabilities measured at fair value. The Group had no assets or liabilities measured at fair value at 31 December 2009.

Assets	Level 1 �	Total �

Available-for-sale financial assets	320,000	320,000
Total assets	320,000	320,000

The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm�s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise AIM listed equity investments classified as available-for-for sale financial assets.

4. Critical Accounting Estimates and Judgements

The preparation of the combined financial statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant items subject to such estimates and assumptions include, but are not limited to:

Impairment of exploration and evaluation costs

Exploration and evaluation costs have a carrying value at 31 December 2010 of �768,489 (2009: �Nil). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only depreciated once extraction of the resource commences. Management tests annually whether exploration projects have future economic value in accordance with the accounting policy stated in note 2.7. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the year warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration. The Directors have reviewed the estimated value of each project prepared by management and have concluded that no impairment charge is necessary.

Share based payment transactions

The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received.

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in note 17.

Available-for-sale financial assets

Available-for-sale financial assets have a carrying value at 31 December 2010 of �365,000 (2009: �Nil). The Group holds both listed and unlisted equity securities as available-for-sale financial assets.

At 31 December 2010 the Group�s listed equity securities held as available-for-sale investments were suspended from trading as the investee was pursuing a significant acquisition which constituted a reverse acquisition under the definition of AIM rule 14. The fair value of these financial instruments has been determined by reference to the last available market price of those instruments prior to suspension. The Directors have a reasonable expectation that the transaction will be completed and the investee�s shares will be readmitted to AIM for trading. Should the readmission not occur the carrying value of the Group�s listed equity securities of �320,000 may be impaired.

The fair value of financial instruments that are not traded in an active market (for example un-listed equity securities) is determined, where possible, by using valuation techniques. Management have concluded that in the case of unlisted securities held as available-for-sale financial assets the range of reasonable fair value estimates is significant and estimates cannot be reasonably assessed. In such circumstances the Group is precluded from measuring the instruments at fair value and have thus valued these investments at cost less impairment.

The Group follows the guidance of IAS 39 to determine when an available-for-sale equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow.

Current and deferred taxation

The Group is subject to income taxes in numerous jurisdictions. Judgment is required in determining the worldwide provision for such taxes. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will affect the current and deferred income tax assets and liabilities in the period in which such determination is made.

Deferred tax liabilities have been recognised on the fair value gains in available-for-sale financial assets. A deferred tax asset has been recognised for the utilisation of the available capital tax losses against the fair value gain. Should the actual final outcome regarding the utilisation of these losses be different from management�s estimations the Group may need to revise the carrying value of this asset.

5. Segmental Information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the year Group has interests in three geographical segments, the United Kingdom, Australia and Mauritania. Activities in the UK are mainly administrative in nature whilst the activities in Mauritania relate to exploration and evaluation work. The activities in Australia relate to various costs of closure for a subsidiary of the Group which was dissolved during the year.

The Group had no turnover during the year.

2010	Australia �	Mauritania �	UK �	Total �

Administrative expenses	-	-	604,005	604,005
Loss on dissolution of subsidiary	52,558	-	-	52,558
Loss from operations per reportable segment	52,558	-	604,005	656,563
Additions to non-current assets	-	788,071	-	788,071
Reportable segment assets	-	789,953	2,506,786	3,296,739
Reportable segment liabilities	-	2,060	80,777	82,837


2009		Australia �	UK �	Total �

Administrative expenses		4,287	208,538	212,825
Loss on foreign exchange		1,623	-	1,623
Loss from operations per reportable segment		5,910	208,538	214,448
Depreciation charges	-	-	292	292
Additions to non-current assets	-	-	-	-
Reportable segment assets		452	768,712	769,164
Reportable segment liabilities		-	67,330	67,330

Activities occurring in Australia are classified as discontinued. All other reportable segments are classified as continuing operations.

A reconciliation of adjusted loss from operations per reportable segment to profit/(loss) before tax is provided as follows:

	2010 �	2009 �
Loss from operations per reportable segment	656,563	214,448
-Finance income	(757)	(698)
Loss for the year before taxation	655,806	213,750

6. Operating Loss

The operating loss is stated after charging:	Group
	2010 �	2009 �
Fees payable to the Company�s auditors for the audit of the Parent Company and consolidated accounts	12,000	10,000
Fees payable to the Company�s auditors for tax services	1,000	1,000
Depreciation	-	292
Share option costs	42,567	1,193
Loss on dissolution of subsidiary (note 18)	52,558	-
Operating lease charges	39,000	-

7. Property, Plant and Equipment

	Group	Company
	Computer equipment �	Computer equipment �
Cost
As at 1 January 2009	2,101	2,101
As at 31 December 2009	2,101	2,101
As at 31 December 2010	2,101	2,101

Depreciation
As at 1 January 2009	1,809	1,809
Charge for the year	292	292
As at 31 December 2009	2,101	2,101
Charge for the year	-	-
As at 31 December 2010	2,101	2,101
Net book value as at 31 December 2009	-	-
Net book value as at 31 December 2010	-	-

8. Intangible Fixed Assets � Exploration and Evaluation Assets

Exploration and evaluation assets are all internally generated.

	Group
Cost and Net Book Value	2010 �	2009 �
At 1 January	-	-
Additions	788,071	-
Exchange rate movements	(19,582)
At 31 December	768,489	-

Exploration projects in Mauritania are at an early stage of development and no JORC or non-JORC compliant resource estimates are available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances which could indicate the existence of impairment:

� The Group�s right to explore in an area has expired, or will expire in the near future without renewal.

� No further exploration or evaluation is planned or budgeted for.

� A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves.

� Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

Following their assessment the Directors concluded that no impairment of exploration and evaluation assets was necessary during the year ended 31 December 2010.

9. Investments in Subsidiary Undertakings

	Company
	2010 �	2009 �
Shares in Group Undertakings
At 1 January	-	-
Additions	1	-
Disposals	-	-
At 31 December	1	-
Loans to Group undertakings	807,642	-
Total	807,643	-

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less impairment provision.

On 24 January 2010 the Company�s Australian subsidiary Oreion Australia Energy Pty Ltd was deregistered and dissolved. The carrying value of the investment had been fully impaired and provided for by the Company in the year ended 31 December 2008.

On 12 May 2010 the Company created a subsidiary in the British Virgin Islands, Alecto Holdings International Limited. On 23 December 2010 the Group created a subsidiary in Mauritania, Alecto Holdings International Limited.

Details of Subsidiary Undertakings

Name of subsidiary	Place of establishment	Parent company	Registered capital	Share capital held	Principal activities
Alecto Holdings International Limited	British Virgin Islands	Alecto Energy plc	Ordinary shares US$1	100%	Dormant
Alecto Holdings International Limited	Mauritania	Alecto Holdings International Limited	Ordinary shares MOU 1,000,000	100%	Exploration

10. Restricted Assets

Group

Company

2010

�

2009

�

2010

�

2009

�

Bank guarantees (note 25(b))

21,464

11. Available-for-Sale Financial Assets

	Group		Company
	2010 �	2009 �	2010 �	2009 �
At 1 January	-	-	-	-
Additions	145,000	-	145,000	-
Net gains transferred to equity (note 22)	220,000	-	220,000	-
At 31 December	365,000	-	365,000	-
Less: non-current portion	(365,000)	-	(365,000)	-
Current portion	-	-	-	-

Available-for-sale financial assets include the following:

	Group		Company
	2010 �	2009 �	2010 �	2009 �
UK listed equity securities	320,000	-	320,000	-
European unlisted equity securities	45,000	-	45,000	-
	365,000	-	365,000	-

On 27 January 2010 the Company signed an agreement with Bulgarian Mining Corporation (�BMC�) for the provision of a working capital facility. The Company also paid the shareholders of BMC �90,000 through the issue of shares in the Company for a 90 day exclusivity period in which to investigate the possible purchase of BMC. Following a detailed technical review by independent consultants, on 21 July 2010 the Company converted the working capital facility of �45,000 provided to BMC into a 20% equity holding in BMC.

The Company has no presence on the Board of BMC and the remaining 80% of the shares are owned by a majority shareholder. For these reasons, despite the Company holding 20% of the ordinary share capital of BMC, the Directors are of the opinion that the Company does not exercise significant influence over the financial and operating policy decisions of BMC. As a result, the Directors are satisfied that the investment in BMC does not fall within the scope of IAS 28 �Investments in Associates� and have accounted for the investment as an available-for-sale financial asset in the consolidated financial statements of the Group.

The Directors are of the opinion that �45,000 represents the fair value of the equity interesting BMC at the date of conversion of the loan.

Available-for-sale financial assets are denominated in the following currencies:

	Group		Company
	2010 �	2009 �	2010 �	2009 �
UK pound	320,000	-	320,000	-
Bulgarian Leva	45,000	-	45,000	-
	365,000	-	365,000	-

None of these financial assets is impaired.

12. Trade and Other Receivables

	Group		Company
	2010 �	2009 �	2010 �	2009 �
Unpaid share capital	106,902	-	106,902	-
Prepayments	11,764	11,748	11,764	11,748
VAT receivable	8,108	3,452	8,108	3,452
Other receivables	-	12,000	-	12,000
	126,774	27,200	126,774	27,200

Trade and other receivables are all due within one year. The fair value of all receivables is the same as their carrying values stated above.

All trade and other receivables are denominated in Pound Sterling. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

Unpaid share capital

Unpaid share capital of �106,902 relates to ordinary shares that have been subscribed for and issued during the year but remain unpaid at the balance sheet date. Whilst these shares remain outstanding they carry voting but no dividend rights.

On 7 January 2011 the Company received a payment of �103,902 in full settlement for 62,402,325 unpaid ordinary shares. In March 2011 the Company received payments totalling �3,000 in full settlement of the remaining unpaid share capital that was outstanding at 31 December 2010.

At 31 December 2010 All trade and other receivables were fully performing with the exception of unpaid share capital which was past due but not impaired.

13. Cash and Cash Equivalents

Group

Company

2010

�

2009

�

2010

�

2009

�

Cash at bank and on hand

2,015,012

741,964

2,015,011

741,512

All of the Group�s cash at bank is held with institutions with an AA credit rating.

14. Trade and Other Payables

	Group		Company
	2010 �	2009 �	2010 �	2009 �
Trade payables	58,837	55,950	56,777	55,950
Accrued expenses	24,000	11,380	24,000	11,380
	82,837	67,330	80,777	67,330

Trade and other payables include amounts due of �53,764 (2009: �Nil) in relation to exploration and evaluation activities.

15. Deferred tax

An analysis of deferred tax assets and liabilities is set out below.

	Group		Company
	2010 �	2009 �	2010 �	2009 �
Deferred tax assets
Deferred tax asset to be recovered after more than 12 months	(44,000)	-	(44,000)	-

Deferred tax liabilities
- Deferred tax liability to be recovered after more than 12 months	44,000	-	44,000	-

Deferred tax liability (net)	-	-	-	-

The deferred tax asset and liability have been offset in the Group and Company balance sheets as the asset and liability arose in the same tax jurisdiction and there is a legally enforceable right of offset.

The gross movement on the deferred tax account is as follows:

	Group		Company
Deferred tax liabilities	2010 �	2009 �	2010 �	2009 �
At 1 January	-	-	-	-
Income statement credit (note 22)	(44,000)	-	(44,000)	-
Tax charge relating to components of other comprehensive income (note 22)	44,000	-	44,000	-
At 31 December	-	-	-	-

The movement in the deferred tax liability during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

	Group	Company
Deferred tax liabilities	Fair value gains �	Fair value gains �

At 1 January 2009 and 31 December 2009	-	-

Charged to other comprehensive income	44,000	44,000

At 31 December 2010	44,000	44,000

	Group	Company
Deferred tax assets	Tax losses �	Tax losses �

At 1 January 2009 and 31 December 2009

Credited to the income statement	(44,000)	(44,000)

At 31 December 2010	(44,000)	(44,000)

Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. A deferred tax asset of �44,000 has been recognised in respect of capital losses that would be available to offset against the taxable gain arising on the revaluation of available-for-sale financial assets.

The Group has additional capital losses of approximately �220,000 (2009: �440,000) and other losses of approximately �1,484,293 (2009: �1,395,518) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.

16. Share Capital

Authorised

2010	Number	�
Authorised
Ordinary shares of 0.7 p each	2,000,000,000	14,000,000

2009	Number	�
Authorised
Ordinary shares of 0.07 p each	20,000,000,000	14,000,000

There has been no movement in the authorised share capital during the year.

On 6 May 2010 the Company consolidated its share capital on the basis of 1 new ordinary share for every 10 existing ordinary shares. This consolidation of shares was approved at the Company�s Annual General Meeting on 7 May 2010.

Issued � Group and Company

	Number of shares	Ordinary shares �	Share premium �		Total �
Issued and fully paid
At 1 January 2009	280,207,901	196,146	2,755,170		2,951,316
Issue of new shares � 28 August 2009	657,523,869	460,266	252,406		712,672
At 31 December 2009	937,731,770	656,412	3,007,576		3,663,988
Issue of new shares � 27 January 2010	30,000,000	21,000	69,000		90,000
Issue of new shares � 31 March 2010	52,187,500	36,531	130,469		167,000
Consolidation of share capital -6 May 2010	(917,927,337)	-	-		-
Issue of new shares � 22 October 2010	21,777,778	152,444	337,556		490,000
Issue of new shares � 21 December 2010⁽¹⁾	59,433,697	416,036	1,502,231		1,918,267
At 31 December 2010	183,203,408	1,282,423	5,046,832		6,329,255
Issued and unpaid
At 1 January and 31 December 2009	-	-	-	-
Issue of new shares � 31 March 2010	937,500	656	2,344	3,000
Consolidation of share capital � 6 May 2010	(843,750)	-	-	-
Issue of new shares � 21 December 2010⁽²⁾	2,968,628	20,781	75,034	95,815
At 31 December 2010	3,062,372	21,437	77,378	98,815
Issued share capital at 31 December 2009	937,731,770	656,412	3,007,576	3,663,988
Issued share capital at 31 December 2010	186,265,780	1,303,860	5,124,210	6,428,070

(1) Includes aggregate issue costs of �161,912

(2) Includes issue costs of �8,087

On 27 January 2010 the Company issued 30,000,000 shares of 0.07 pence each fully paid at 0.3 pence per share in consideration for the rights to an exclusivity period. The fair value of these rights was measured with reference to the market value of the shares on the date of issue as there was no available data for the market value of these rights. The share based payment charge of �90,000 has been included within administrative expenses in the income statement.

On 31 March 2010 the Company issued 21,875,000 shares of 0.07 pence each fully paid at 0.32 pence per share to certain professional advisors in settlement of outstanding liabilities for services in relation to project assessment and consulting services.

On 22 October the Company issued 21,777,778 shares to a consultant in settlement of various services provided in relation to exploration and evaluation licences owned by a subsidiary of the Company. The share based payment charge of �490,000, being the fair value measured at market price of the services provided, in relation to these services has been capitalised as part of exploration and evaluation assets.

17. Share Options and Warrants

Share options and warrants outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:

		Shares
Expiry date	Exercise price in � per share	2010	2009
2 August 2011	0.020		20,958,712
28 August 2011	0.005		113,931,963
2 August 2011	0.200	2,095,871	-
28 August 2011	0.050	11,393,196	-
22 October 2012	0.045	8,000,000	-
20 December 2012	0.050	31,201,162	-
		52,690,229	134,890,675

The options are exercisable starting immediately from the date of grant and lapse on the second or fifth anniversary of the date of grant. The Company and Group have no legal or constructive obligation to settle or repurchase the options in cash.

The fair value of the share options was determined using the Black Scholes valuation model. The parameters used are detailed below:

	2010 Warrants	2010 Options	2009 Options	2006 Options
Option granted on:	20/12/2010	22/10/2010	28/08/2009	02/08/2006
Option life (years)	2 years	2 years	2 years	5 years
Share price (pence per share)	3.90p	4.65p	1.60p	30.00p
Risk free rate	2.31%	1.88%	2.69%	4.6%
Expected volatility	33%	20%	52%	70%
Expected dividend yield	-	-	-	-
Marketability discount	20%	20%	-	80%
Total fair value of options granted (�000)	108	43	7	175

All balances stated in the table above have been adjusted for the share consolidation on 6 May 2010.

The expected volatility is based on historical volatility for the 6 months prior to the date of granting. The risk free rate of return is based on zero yield government bonds for a term consistent with the option life.

A reconciliation of options granted over the year to 31 December 2010 is shown below:

	2010		2009
	Number	Weighted average exercise price (�)	Number	Weighted average exercise price (�)
Outstanding as at 1 January	134,890,675	0.007	20,958,712	0.020
Adjustment for share consolidation	(121,401,608)		-	-
Outstanding after share consolidation	13,489,067	0.070	-	-
Granted	39,201,162	0.049	113,931,963	0.005
Outstanding as at 31 December	52,690,229	0.055	134,890,675	0.007
Exercisable at 31 December	52,690,229	0.055	134,890,675	0.007

As a result of the share consolidation on 6 May 2010 (refer note 16) the Company amended the terms of the outstanding options and warrants. The terms were amended on the basis of 1 new warrant or option for every 10 existing warrants or options previously held with a corresponding change to the exercise price. The consolidation of the warrants and options did not give rise to any adjustment in their fair value.

	2010				2009
Range of exercise prices (�)	Weighted average exercise price (�)	Number of shares	Weighted average remaining life expected (years)	Weighted average remaining life contracted (years)	Weighted average exercise price (�)	Number of shares	Weighted average remaining life expected (years)	Weighted average remaining life contracted (years)
0 � 0.01	-	-	-	-	0.005	113,931,963	1.66	1.66
0.01 � 0.02	-	-	-	-	0.020	20,958,712	1.59	1.59
0 � 0.10	0.049	50,594,358	1.65	1.65	-	-	-	-
0.10 � 0.20	0.200	2,095,871	0.59	0.59	-	-	-	-

No options were exercised during the period. The total fair value has resulted in a charge to the Income Statement for the year ended 31 December 2010 of �43,106 (2009: �1,193) and a charge to share premium of �108,327 (2009: �5,604).

18. Loss on dissolution of subsidiary

Group

2010

�

2009

�

Loss on dissolution of subsidiary

(52,558)

On 24 January 2010 the Company�s wholly owned subsidiary Oreion Australia Energy Pty Ltd was deregistered and dissolved. Net exchange losses of �52,106 recorded in equity prior to the date of disposal have been reclassified in the income statement as part of the loss on disposal.

19. Employees

The Company had no full time employees during the year. The Directors and Company Secretary provided professional services as required on a part-time basis. Details of Directors� fees are disclosed in Note 20.

20. Directors' Remuneration

	Directors� Fees		Options Issued
	2010 �	2009 �	2010 �	2009 �
Non-executive Directors
Toby Howell	24,000	12,000	-	-
Malcolm James	24,000	8,000	-	-
Damian Conboy	24,000	8,774	32,330	895
	72,000	28,774	32,330	895

No pension benefits are provided for any Director.

21. Finance Income

	Group
	2010 �	2009 �
Interest received from Bank	757	698
Net Finance Income	757	698

22. Taxation

No charge to taxation arises due to the losses incurred. No deferred tax asset has been recognised on accumulated tax losses, as the recoverability of any assets is not likely in the foreseeable future.

	Group
Income tax expense	2010 �	2009 �
Analysis of tax charge
Current tax charge for the year	-	-
Deferred tax (credit) for the year	(44,000)	-
Tax on loss for the year	(44,000)	-

	Group
	2010 �	2009 �
Loss before tax	(655,806)	(213,750)
Tax at the applicable rate of 28% (2009: 28.25%)	(183,626)	(60,385)
Effects of:
Expenditure not deductible for tax	94,697
Net tax effect of losses carried forward	88,929	60,385
Tax charge	-	-

Due to changes in UK tax legislation the applicable tax rate has changes from 28.25% to 28%.

The tax charge relating to components of other comprehensive income is as follows:

	2010			2009
	Before tax �	Tax charge �	After tax �	Before tax �	Tax charge �	After tax �
Available-for-sale financial assets (note 11)	220,000	(44,000)	(176,000)	-	-	-
Other comprehensive income	220,000	(44,000)	(176,000)	-	-	-
Current tax Deferred tax (note 15)		- (44,000)			- -

The deferred tax charge has been estimated at a rate of 20% of the fair value gain on available-for-sale financial assets, representing the tax rate that is expected to apply to the period when the temporary difference reverses and was substantively enacted at the balance sheet date.

23. Loss per Share

The calculation of the total basic loss per share of 0.580 pence (2009: loss of 0.421 pence) is based on the loss attributable to ordinary shareholders of �611,806 (2009: �213,750) and on the weighted average number of ordinary shares of 105,333,000 (2009: 50,718,874) in issue during the period. The calculation of the basic loss per share from continuing operations of 0.531 pence (2009: loss of 0.410 pence) is based on the loss attributable to ordinary shareholders from continuing operations of �559,248 (2009: �207,840). The basic loss per share from discontinued operations of 0.049 pence (2009: loss of 0.011 pence) is based on the loss attributable to ordinary shareholders from discontinued operations of �52,558 (2009: �5,910).

The weighted average number of shares in issue and associated loss per share have been restated for all periods due to the consolidation of the Company�s share capital detailed in note 16. The consolidation of share capital was an adjustment to the number of ordinary shares in issue without a corresponding change in the Company�s resources. Consequently, in accordance with IAS 33, the shares are treated as if the conversion took place at the beginning of the earliest period stated.

In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of share options would be to decrease the loss per share. Details of share options that could potentially dilute earnings per share in future periods are set out in Note 17.

The Company is committed to the issuance of ordinary shares to a consultant should certain conditions be met in future periods. The issuance of these ordinary shares could potentially dilute earnings per share. Further details of this arrangement are set out in note 25.

24 Expenses by nature

Group	2010 �	2009 �

Directors� fees	72,000	28,774
Exploration and project assessment costs expensed	152,123	-
Aborted acquisition costs	90,000	-
Establishment expenses	45,187	10,464
Loss/(gain) on foreign exchange	-
Share option expenses	43,106	1,193
Loss on disposal of subsidiary	52,558	-
Other expenses	201,589	174,017
Total operating expenses	656,563	214,448

25 Commitments

(a) Licence agreements

On 23 November 2010 the Group acquired three gold exploration licences, and on 13 December 2010 two uranium exploration licences in Mauritania. These licences are for a period of 3 years from the date of grant and include commitments to pay annual land royalty fees in the second and third year and adhere to minimum spend requirements.

At the end of the licence period the Group have the right to renew the licence or, if a defined resource has been established, apply for a mining licence for the target area. Upon grant of any mining licence the Mauritanian Government will receive a 10% shareholding of the rights and benefits of the licence area. The Mauritanian Government also has the option to purchase an additional 10% of the rights and benefits at the market rate upon granting of the mining licence.

At 31 December 2010 the future aggregate minimum royalty fee payments and minimum spend requirements are as follows:

Group	Land royalty fees �	Minimum spend requirement �	Total �

Not later than one year	-	123,672	123,672
Later than one year and no later than five years	65,960	2,715,606	2,781,566
Total	65,960	2,839,278	2,905,238

(b) Bank guarantees

The Group has provided bank guarantees as security for the minimum spend requirements on the Mauritanian exploration licences. The guarantees are not released until the end of the licence period. The balance held via bank guarantee at 31 December 2010 is �21,464 (31 December 2009: �Nil) and is included within restricted assets (note 10).

(c) Capital commitments

Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:

Group

2010

�

2009

�

Intangible assets

490,000

The Group has entered into a contractual arrangement with O�Connor International Limited (�OCI�) for consultancy work on the Mauritanian licence areas acquired during the year. An amount of �130,000 for each gold licence and �50,000 for each uranium licence, �490,000 in aggregate, remains committed under this contract. The payment of this fee is contingent on the issuance of a feasibility study indicating economic feasibility for the relevant licence area. These amounts are to be paid via the issuance of shares in the Company and will become payable on the date the relevant feasibility study is issued.

(d) Royalty agreements

As part of the contractual arrangement with OCI noted above, the Group has agreed to pay OCI a royalty on revenue for each gold licence acquired based on the total ounces of gold sold equal to US$1 for every US$250 of the sale price per ounce. The Group has also agreed to pay OCI a royalty on revenue for each uranium licence acquired based on US$0.4 for every pound of Uranium sold.

These royalties will become payable when the licence areas move into production and resources are sold from any of these areas.

(e) Operating lease commitments

The Group leases office premises under a non-cancellable operating lease agreement. The lease is on an annual contract renewable at the end of the lease period at market rate. The lease is cancellable by either party at 6 months notice. The lease expenditure charged to the income statement during the year is disclosed in note 6.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Group

2010

�

2009

�

Not later than one year

18,000

26. Related Party Transactions

Investment in Charles Street Capital plc

On 15 July 2010 the Company subscribed for 100,000,000 shares in Charles Street Capital plc (�CSC�) at a subscription price of 0.1 pence per share. The purchase was satisfied by total cash consideration of �100,000. As a result of the transaction the Company holds a 9.73% shareholding in CSC.

The shares in CSC have been classified as an available-for-sale financial asset in the Group and Company financial statements. In accordance with IAS 39 the investment in CHC was re-valued to its fair value at 31 December 2010. This resulted in a gain of �220,000 which has been recognised in other comprehensive income.

Damian Conboy, a director of the Company is also a director of Charles Street Capital plc.

Consultancy agreement with O�Connor International Limited

O�Connor International Limited (�OCI�) is a company controlled by John O�Connor, a significant shareholder of the Company. During the year the Company entered into various agreements with OCI for the provision of consultancy services and licence application fees. The total value of consulting services charged to the Group by OCI during the year was �756,897 (2009: �Nil). Licence application fees incurred during the year amounted to �66,331 (2009: �Nil).

The Company paid �490,000 of consultancy fees incurred during the year through the issuance of 21,777,778 shares at an issue price of 2.25 pence per share being the fair value of the services provided. The balance outstanding with OCI at 31 December 2010 in relation to fees payable in cash was �53,764 (2009: �Nil).

In addition to the consultancy fees paid during the year the Group is also committed to payments in future periods under the terms of the consultancy agreement. Details of these commitments are disclosed in note 25 of these financial statements.

Loans to Group undertakings

As at 31 December 2010 there are amounts receivable of �805,328 (31 December 2009: �Nil) due from Alecto Holdings International Limited (Mauritania) to the Company and amounts receivable of �2,314 (31 December 2009: �Nil) due from Alecto Holdings International Limited (BVI). These amounts are is interest free and repayable in Sterling when sufficient cash resources are available in the subsidiaries.

All Group transactions were eliminated on consolidation.

Other transactions

Exchange Minerals plc, a company of which Damian Conboy is a Director, charged rental fees to the Group for the rental of office space and various office administration services used by the Parent Company. The total fees charged during the year ended 31 December 2010 amounted to �45,954 (31 December 2009: �Nil).

27. Ultimate Controlling Party

The Directors believe there to be no ultimate controlling party.

28. Events after the Balance Sheet Date

On 7 January 2011 the Company received a payment of �103,902 in full settlement for 62,402,325 ordinary shares that were outstanding and unpaid at 31 December 2010. In March 2011 the Company received payments totalling �3,000 in full settlement of the remaining unpaid share capital that was outstanding at 31 December 2010 (refer note 12).

On 22 February the Company created a subsidiary in Mauritania, Alecto Mauritania Limited. On the same date the assets and liabilities of Alecto Holdings International Limited (Mauritania), including the intragroup loan referred to in note 26, were transferred to Alecto Mauritania Limited. Alecto Holdings International Limited (Mauritania) is in the process of being dissolved.

Elisabeth Cowell

St Brides Media & Finance Ltd

Chaucer House

38 Bow Lane

London EC4M 9AY

T: +44 (0) 207 236 1177 | M: +44 (0) 7900 248 213 | F: +44 (0) 207 236 1188 | www.sbmf.co.uk

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