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its metal (principally gold and copper) price assumptions being met or bettered.

Should there be a moderate and sustained decrease in either the production or metal price assumptions, doubt would

be cast over the Group’s short term cash position. Under this circumstance, the Group would look to defer all non-

essential capital expenditure and administrative costs in order to preserve cash. The Group also has access to local

sources of short term finance to meet any shortfalls.

The Group’s assumptions are based on best estimates and appropriate sensitivities have been applied. Appropriate

rigour and diligence has been performed by the directors in approving the assumptions. The directors believe all

assumptions are prepared on a realistic basis using the best available information.

After making due enquiry, the directors have a reasonable expectation that the Group has adequate resources to

continue in operational existence for the foreseeable future. Accordingly, the Group continues to adopt the going

concern basis in preparing the financial statements.

2 Operating segments

The Group determines operating segments based on the information that is internally provided to the Group’s chief

operating decision maker. The chief operating decision maker has been identified as the board of directors. The board

of directors currently considers consolidated financial information for the entire Group and reviews the business based

on the Group income statement and Group statement of financial position in their entireties. Accordingly, the Group

has only one operating segment, mining operations. The mining operations comprise the Group’s major producing

asset, the Gedabek mines which accounts for all the Group’s revenues and the majority of its cost of sales,

depreciation and amortisation. The Group’s mining operations are all located within Azerbaijan and therefore all

within one geographic segment.

All sales of gold and silver bullion are made to one customer, the Group’s gold refinery, MKS Finance SA, based in

Switzerland. Copper concentrate is sold to Industrial Minerals SA.

3 Income tax

Income tax (charge) or credit during the period represents the change in deferred tax liability during the period

incurred by the RV Investment Group Services LLC (a wholly owned subsidiary of the Company) representative office

registered in Azerbaijan.

The deferred tax asset or liability is calculated at the tax rates that are expected to apply in the period when the

liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it

relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

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 they relate to income taxes levied by the same taxation authority and the

Group intends to settle its current tax assets and liabilities on a net basis.

Deferred tax liability increased in the 6 months to 30 June 2016 due to a decrease in temporary differences arising

from a decrease of unused tax losses during the period.

At the statement of financial position date, the Group has unused tax losses within the Company and a subsidiary

(Anglo Asian Operations Limited) available for offset against future profits. No deferred tax asset has been

recognised in respect of such losses due to the unpredictability of future profit streams. Unused tax losses may be

carried forward indefinitely.

4 Profit / (loss) per ordinary share

Profit / (loss) per ordinary share

6 months to

30 June 2016

(unaudited)

$000

6 months to

30 June 2015

(unaudited)

$000

Profit / (loss) after tax for the period

424

(3,378)