North River Resources plc / Ticker: NRRP / Index: AIM / Sector: Mining

30 September 2015

North River Resources plc

('North River' or 'the Company')

Interim Results for the six months ended 30 June 2015

North River Resources plc, the AIM quoted resource company focussed on the Namib Lead-Zinc Project ('Namib Project') in Namibia, is pleased to provide its unaudited interim results for the six months ended 30 June 2015.

Highlights:

• Significant progress made in developing Namib into an economically robust and operationally efficient mining operation

• Strengthened Board through appointments of James Beams to Chief Executive Officer, and Keith Marshall and Ken Sangster as Non-Executive Directors to support the project through its next stage of development

• Further metallurgical testwork led to an updated process flow sheet

• Ongoing and proactive engagement with the Namibian Ministry of Mines, including a Ministerial visit to mine site, in line with goal to receive Mining Licence

• Phase One Fundraising launched - focused on providing all shareholders with an opportunity to participate

CEO's Statement

North River is focused on developing its flagship Namib Lead Zinc Project in Namibia into an economically robust and operationally efficient mining operation. Our activities during the period have been undertaken with this vision firmly in mind. To this end, we have undertaken supplementary metallurgical studies, overseen by new, highly qualified members of the Board who were appointed in January 2015; engaged regularly and proactively with Namibia's Ministry of Mines to progress our Mining Licence application; and focused on delivering a financing plan to enable us to take the project forward to a point of making an investment decision.

The Namib Project entails re-opening a previously producing mine and construction of a new plant to process 250,000 tonnes of ore per annum over an initial 3.5 year mine life and we are confident that this can be extended considerably by increasing the resource through drilling. The Namib Project currently has reserves of 585,000 tonnes @ 6.2% zinc, 2.9% lead and 46 g/t silver and total underground resources of 1,250,000 tonnes @ 6.5% zinc, 2.5% lead and 43.7 g/t silver. Located 20km inland from Swakopmund in Namibia, the project is very well situated, with excellent surrounding infrastructure. Namibia has a well established mining industry and good access to local mining suppliers and support services.

I joined North River in January 2015, shortly after the publication of the Definitive Feasibility Study ('DFS'). At the same time, North River welcomed Keith Marshall, a mining engineer who has previously held senior mine leadership roles with Rio Tinto PLC, and Ken Sangster, a metallurgist with 49 years' experience in the mining industry, as Non-Executive Directors. These senior appointments were designed to support the next phase of development at Namib and we have benefited greatly from their expertise during our work in the period to refine both the mine plan and the process flow sheet.

The Board identified where additional technical evaluation work was required to define a mine plan and processing plant design to a level of confidence to support a project investment decision. Supplementary metallurgical testwork was undertaken which identified the optimised grind size and new reagent regime, and from this a robust processing methodology was developed which can operate with consistent results with a wide range of mineral composition. This significantly strengthens the bankability of the Namib Project.

With this process now complete, we are now positioned to undertake initial Front End Engineering & Design ('FEED'). While these additional activities will lead to a stronger and more robust project they have, together with the fact that the Mining Licence has not yet been received, led to a revised development timeframe for the Namib Project.

In light of the revised development timeframe, the Independent Directors concluded that a number of project milestones required under the July 2014 Investment Agreement with Greenstone Resources L.P. ('Greenstone') were no longer achievable before the long-stop date in that agreement of 4 October 2015. As a result, the Company and Greenstone agreed in July 2015 to terminate the July 2014 Investment Agreement. Greenstone remains a committed shareholder and supportive of the Company's revised plans for the Namib Project.

The Company estimates that a total of US$25 - US$30 million in funding will be required to bring the Namib Project into production. In August, we announced an initial near term financing plan to raise US$4 million ('Phase One Fundraising') to progress the Namib Project to a construction decision. The Phase One Financing consists of US$1.2 million of Convertible Loan Notes issued to Greenstone followed, on 15 September 2015, by the launch of an Open Offer and Placing for the remaining US$2.8 million. This was fully underwritten by Greenstone, subject to certain conditions. This structure provides all our valued shareholders with an opportunity to participate in the future of our Company's development, and we look forward to providing shareholders with an update when this process is complete.

The Phase One Fundraising will enable us to undertake the FEED; early development of the Namib Project's North decline; sourcing of plant and equipment; on-going underground development programme required to establish access for the next phase of resource expansion drilling; and early stage recruitment of technical and operational staff. We acquired the first loader in the period after bringing the underground development activities in-house and are now focusing on mining development productivity.

Full construction financing ('Phase Two Fundraising') will follow the receipt of the Mining Licence and completion of the FEED, with its related updated cost estimates for the Namib Project.

Our commitment to bringing the Namib Project into production is clear. During the period we hosted a site visit for the Minister of Mines and Energy in Namibia, the Honorable Obeth Kandjoze, the Governor of the Erongo Region, the Honorable Cleophas Mutjavikua and a large delegation from the Mining Ministry. The visit included very constructive discussions on the development plans for the Namib Project.

Financial Review:

North River is reporting a loss before taxation of £1,377,787 (30 June 2014: loss of £1,726,901). The Company's cash position at the end of the period was £602,093 (30 June 2014: £528,796).

Outlook:

I would like to thank our shareholders for their support and patience during what has been a period of adjustment for North River. The Company's goal of bringing the Namib Project into production in the most economically and operationally efficient way possible has been further facilitated by our work during the period. The coming months will see us secure the remaining US$2.8 million of the Phase One Fundraising to support the next steps towards taking the project into construction.

I would like to reiterate that shareholder engagement is important to us, and I look forward to holding our next Investor Call on Thursday 3 November 2015.

James Beams

Chief Executive Officer 30 September 2015

For further information please visit www.northriverresources.com or contact:

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM 1 JANUARY 2015 TO 30 JUNE 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1 JANUARY 2015 TO 30 JUNE 2015

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM 1 JANUARY 2015 TO 30 JUNE 2015

Cash and cash equivalents comprise cash on hand and bank balances.

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2015

1. BASIS OF PREPARATION

   
   

   These half year accounts are prepared in accordance with the historical cost convention and in accordance with the International Financial Reporting Standards ('IFRS'), as adopted by the European Union, including IFRS 6 'Exploration for and Evaluation of Mineral Resources' and IAS 34 'Interim Financial Reporting'.

   
   

   These half year accounts for the six months ended 30 June 2015 are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. They have been prepared using accounting bases and policies consistent with those used in the preparation of the financial statements of the Company and the Group for the year ended 31 December 2014 and expected to be adopted in the financial year ending 31 December 2015.

   
   

   The half year accounts include unaudited comparative figures for the half year ended 30 June 2014 and comparatives for the year ended 31 December 2014 that have been extracted from the audited financial statements for that year.

   
   

   The financial statements for the year ended 31 December 2014 have been delivered to the Registrar of Companies and the auditor's report on those financial statements was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006. The auditors' report included an 'emphasis of matter' in connection with the Group's going concern and licence renewal position.

   
   

   No new IFRS standards, amendments or interpretations became effective in the six months to the 30 June 2015 which had a material effect on this consolidated interim financial information.

   
   

   The Group's financial risk management objectives and policies are consistent with those disclosed in the 2014 annual report.

   
   

   Going concern

   The Directors believe that the Group will be able to raise as required, sufficient cash to enable it to continue its operations, and continue to meet, as and when they fall due, its planned and committed exploration and development activities (see note 12) and liabilities for at least the next twelve months from the date of approval of these condensed half year accounts. For this reason the Directors continue to adopt the going concern basis in preparing the accounts.

   
   

   Applications for the Namib Lead Mining Licence and the renewal of several exploration EPLs in the Licence Areas have been made and are awaiting confirmation. If the Mining Licence is not received or the EPLs are not renewed then the Directors would have to reconsider the position of the Group and the resulting ability to continue operations as planned. The Directors believe that all outstanding licence confirmations will be received within the normal time duration for these applications.

   
   

2. SEGMENT REPORTING

   
   

   For the purposes of segmental information, the operations of the Group are focussed in the United Kingdom, Namibia and Mozambique and comprise one class of business: the exploration and evaluation of mineral resources.

   
   

   The Company acts as a holding company.

   
   

   The Group's operating loss for the period arose from its operations in the United Kingdom, Namibia and Mozambique. In addition, all of the Group's assets are based in the United Kingdom, Namibia and Mozambique.

   
   

   United Kingdom	Namibia	Mozambique	Total
   £	£	£	£
   Exploration & evaluation expenditure	-	(692,150)	-	(692,150)
   Administration expenses	(615,429)	(73,125)	-	(688,544)
   Interest paid	-	(134)	-	(134)
   Interest received	650	2,401	-	3,051
   Loss before taxation	(614,779)	(763,008)	-	(1,377,787)
   Trade and other receivables	203,715	57,950	25,114	286,779

   Geographical Segment - Group Six months ended 30 June 2015 (UNAUDITED)

   
   

   Cash and cash equivalents	563,613	26,199	12,281	602,093
   Accrued expenditure and provisions	(195,449)	(109,595)	-	(305,044)
   Goodwill	-	7,738,986	-	7,738,986
   Investment in associate company	-	-	113,182	113,182
   Intangible assets	5,577	-	56,495	62,072
   Plant and equipment	975	197,897	-	198,872
   Net assets	578,431	7,911,437	207,072	8,696,940

   
   

   At the end of June 2015, the Group had not yet commenced commercial production from its exploration sites and therefore had no turnover for the period.

   
   

   United Kingdom	Namibia	Mozambique	Total
   £	£	£	£
   Exploration & evaluation expenditure	-	(1,128,187)	-	(1,128,187)
   Administration expenses	(486,771)	(114,393)	-	(601,164)
   Interest paid	-	(14)	-	(14)
   Interest received	963	1,501	-	2,464
   Loss before taxation	(485,808)	(1,241,093)	-	(1,726,901)
   Trade and other receivables	259,705	296,253	25,114	581,072
   Cash and cash equivalents	265,261	251,254	12,281	528,796
   Accrued expenditure and provisions	(593,219)	(471,769)	-	(1,064,988)
   Goodwill	-	7,738,986	-	7,738,986
   Investment in associate company	-	-	113,182	113,182
   Intangible assets	9,933	1,949	56,495	68,377
   Plant and equipment	5,140	93,704	-	98,844
   Net assets	(53,180)	7,910,377	207,072	8,064,269

   Geographical Segment - Group Six months ended 30 June 2014 (UNAUDITED)

   
   

   United Kingdom	Namibia	Mozambique	Total
   £	£	£	£
   Other income	-	189	-	189
   Exploration & evaluation expenditure	-	(2,178,666)	-	(2,178,666)
   Administration expenses	(940,861)	(206,798)	-	(1,147,659)
   Interest paid	-	(267)	-	(267)
   Interest received	1,623	4,303	-	5,926
   (939,238)	(2,381,239)	-	(3,320,477)
   Loss before taxation
   Trade and other receivables	217,988	201,715	25,114	444,817
   Cash and cash equivalents	1,762,632	129,947	12,281	1,904,860
   Accrued expenditure and provisions	(220,409)	(106,546)	-	(326,955)
   Goodwill	-	7,738,986	-	7,738,986
   Investment in associate company	-	-	113,182	113,182
   Intangible assets	7,755	688	56,495	64,938
   Plant and equipment	2,755	141,102	-	143,857
   Net assets	1,770,721	8,105,892	207,072	10,083,685

   Geographical Segment - Group Year ended 31 December 2014 (Audited)

   
   

3. LOSS PER SHARE

   
   

   Loss for the period from continuing operations £	Weighted average number of shares	Loss per share Basic - pence per share
   Six months ended 30 June 2015 (Unaudited)	(1,377,787)	1,915,875,310	(0.07) pence
   Six months ended 30 June 2014 (Unaudited)	(1,726,901)	1,302,298,915	(0.13) pence
   Year ended 31 December 2014 (Audited)	(3,320,477)	1,499,075,167	(0.22) pence

   
   

   The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued and has been kept the same as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

   
   

4. GOODWILL

   
   

   The Company acquired, on 20 November 2009, the entire issued share capital in, and the shareholder loans to, West Africa Gold Exploration (Namibia) (Pty) Ltd ('WAGE') and Namib Lead and Zinc Mining (Pty) Ltd ('Namib Lead'). The consideration paid by the Company for these two Namibian entities and the shareholder loans was satisfied by the allotment of 266,666,667 Ordinary shares of £0.002 each ('Ordinary shares') at a price of 3 pence per Ordinary share.

   
   

   Name of company	Country	Holding	Portion held	Nature of business
   West Africa Gold Exploration (Namibia) (Pty) Ltd	Namibia	Ordinary shares	100%	Exploration and mining
   Namib Lead and Zinc Mining (Pty) Ltd	Namibia	Ordinary shares	100%	Exploration and mining

   
   

   
   

   Unaudited At 30 June 2015 £	Unaudited At 30 June 2014 £	Audited At 30 Dec 2014 £
   Goodwill	7,738,986	7,738,986	7,738,986

   
   

   Goodwill impairment review

   
   

   The Directors are of the opinion that the Goodwill acquired in respect of WAGE and Namib Lead in November 2009 represents the value of the licence areas held by WAGE and Namib Lead at 30 June 2015. However, this goodwill has been written down by £92,782 in prior years being the value of the Ubib Exclusive Prospecting Licences (EPL) 3139 which, was relinquished in April 2013.

   
   

5. INTANGIBLE ASSETS

   
   

   Exploration licences	Software	Total
   £	£	£
   COST
   At 31 December 2013 (Audited)	137,605	38,021	175,626
   Effects of foreign exchange	(3,109)	(861)	(3,970)
   At 30 June 2014 (Unaudited)	134,496	37,160	171,656
   Effects of foreign exchange	(32)	(9)	(41)
   At 31 December 2014 (Audited)	134,464	37,151	171,615
   Effects of foreign exchange	(5,159)	(1,429)	(6,588)
   At 30 June 2015 (Unaudited)	129,305	35,722	165,027
   AMORTISATION
   At 31 December 2013 (Audited)	81,110	22,094	103,204
   Charge for the period	-	3,916	3,916
   Effects of foreign exchange	(3,109)	(732)	(3,841)
   At 30 June 2014 (Unaudited)	78,001	25,278	103,279
   Charge for the period	-	3,450	3,450
   Effects of foreign exchange	(32)	(20)	(52)
   At 31 December 2014 (Audited)	77,969	28,708	106,677
   Charge for the period	-	2,861	2,861
   Effects of foreign exchange	(5,159)	(1,424)	(6,583)
   At 30 June 2015 (Unaudited)	72,810	30,145	102,955
   NET BOOK VALUE
   At 30 June 2015 (Unaudited)	56,495	5,577	62,072
   At 30 June 2014 (Unaudited)	56,495	11,882	68,377
   At 31 December 2014 (Audited)	56,495	8,443	64,938

   
   

   
   

6. PROPERTY, PLANT AND EQUIPMENT

   
   

   Plant & machinery	Fixtures & fittings	Motor vehicles			Total
   £	£	£		£
   COST
   At 31 December 2013 (Audited)	94,511	36,137	179,681			310,329
   Additions in the period	567	1,332	-	1,899
   Effects of foreign exchange	(3,624)	(752)	(6,887)			(11,263)
   At 30 June 2014 (Unaudited)	91,454	36,717	172,794			300,965
   Additions in the period	72,761	2,802	-	75,563
   Effects of foreign exchange	(763)	(36)	(70)			(869)
   At 31 December 2014 (Audited)	163,452	39,483	172,724			375,659
   Additions in the period	89,052	5,375	-	94,427
   Effects of foreign exchange	(10,815)	(1,432)	(11,430)			(23,677)
   At 30 June 2015 (Unaudited)	241,689	43,426	161,294			446,409
   DEPRECIATION
   At 31 December 2013 (Audited)	50,565	24,830	108,093			183,488
   Charge for the period	10,528	4,509	10,132			25,169
   Effects of foreign exchange	(2,046)	(576)	(3,914)			(6,536)
   At 30 June 2014 (Unaudited)	59,047	28,763	114,311			202,121
   Charge for the period	14,155	4,567	11,294			30,016
   Effects of foreign exchange	(157)	(28)	(150)			(335)
   At 31 December 2014 (Audited)	73,045	33,302	125,455			231,802
   Charge for the period	19,362	3,113	9,411			31,886
   Effects of foreign exchange	(5,997)	(1,286)	(8,868)			(16,151)
   At 30 June 2015 (Unaudited)	86,410	35,129	125,998			247,537
   NET BOOK VALUE
   At 30 June 2015 (Unaudited)	155,279	8,297	35,296	198,872
   At 30 June 2014 (Unaudited)	32,407	7,954	58,483	98,844
   At 31 December 2014 (Audited)	90,407	6,181	47,269	143,857

   
   

   
   

7. INVESTMENT IN ASSOCIATED COMPANY

   
   

   The following entity meets the definition of an associate and has been equity accounted in the consolidated interim financial information:

   
   

   Company	Country of Incorporation	Group interest at 30 June 13
   North River Resources (Murrupula) Limitada	Mozambique	40%

   
   

   North River Resources (Murrupula) Limitada ('Murrupula') is a company that was registered in Mozambique on 27 January 2011. The Group's interest in Murrupula is jointly held by North River Resources plc and NRR Mozambique Limited. It is also the beneficial owner of an exploration licence in Mozambique. The licence and Murrupula are the subject of a Heads of Agreement between Baobab Resources Limited ('Baobab') and North River Resources plc. Under this agreement Baobab is entitled to a 60% participation interest in Murrupula. Boabab have completed the agreed level of exploration work. Legal control over Murrupula has not yet passed to Baobab, however, effective control has passed. Accordingly, these consolidated financial statements have been prepared on the basis that control has passed and that Murrupula is treated as an associate as from 1 October 2011.

   
   

8. SHARE CAPITAL

   Allotted, issued and fully paid:

   Number	Class	Nominal value	Unaudited At 30 June 2015 £	Unaudited At 30 June 2014 £	Audited At 31 December 2014 £
   1,915,875,310	Ordinary	0.2p	3,831,750	2,702,034	3,831,750

   
   

   
   

   Date of issue	Detail of issue	Number of Ordinary shares	Share capital	Share premium
   £	£
   As at 31 December 2013	1,120,247,632	2,240,495		17,875,349
   29 January 2014	Drill-for-Equity agreement	29,166,667	58,333		116,667
   29 January 2014	Placing for feasibility study	170,833,333	341,667		683,333
   21 March 2014	Placing to provide working capital	30,769,232	61,539		138,461
   Cost of issuing capital in the period	-	(75,591)
   As at 30 June 2014	1,351,016,864	2,702,034		18,738,219
   15 July 2014	Placing to Greenstone Resources LP	33,333,333	66,667		133,333
   17 July 2014	Placing to Greenstone Resources LP	270,588,464	541,177		1,082,354
   17 November 2014	Placing to Greenstone Resources LP	260,936,649	521,873		1,304,683
   As at 31 December 2014	1,915,875,310	3,831,750		21,258,590
   -	-	-
   As at 30 June 2015	1,915,875,310	3,831,750		21,258,590

   -

   
   

9. SUBSIDIARY ENTITIES

   
   

   The consolidated interim financial information includes the following group companies:

   
   

   Company	Country of Incorporation	Holding	Nature of business
   NRR Energy Minerals Limited	United Kingdom	100%	Holding company
   NRR Mozambique Limited	United Kingdom	100%	Holding company
   West Africa Gold Exploration (Namibia) (Pty) Ltd	Namibia	100%	Exploration and mining
   Namib Lead and Zinc Mining (Pty) Ltd	Namibia	100%	Exploration and mining
   North River Resources Namibia (Pty) Ltd	Namibia	100%	Administration
   North River Resources (Mavuzi) Limitada	Mozambique	100%	Inactive

   
   

   NRR Energy Minerals Limited and NRR Mozambique Limited act as holding companies to associates, joint venture companies and subsidiaries in Namibia and Mozambique respectively.

   
   

   Unaudited 6 months ended 30 June 2015	Unaudited 6 months ended 30 June 2014	Audited Year ended 31 Dec 2014
   Opening balance	9,100,000	105,100,000	105,100,000
   Expired in the period	(9,100,000)	(81,000,000)	(96,000,000)
   Closing balance	-	24,100,000	9,100,000

10. SHARE-BASED PAYMENTS Share options outstanding

    
    

    There are no share options outstanding as at 30 June 2015. All share options were fully expensed in prior periods.

    
    

11. CONTROL