Financial Statements for year to 31 December 2017

REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS

LISTED INVESTMENTS

PLUTUS POWERGEN PLC

Plutus PowerGen plc ("Plutus"), which is listed on AIM, is a power company focused on the development, construction and operation of flexible electricity and gas power generation in the UK.

In Q1 2017, the company's share price fell significantly as a result of the uncertainty surrounding the OFGEM statement regarding TRIAD payments to local embedded power generators.  Given that Plutus benefits from multiple earnings streams, it believes that its business model going forward continues to be attractive.  It also has a number of projects in the pipeline that are expected to deliver additional fees and revenues. The company is continuing to broaden its exposure to the UK energy sector which includes looking to develop battery energy storage projects. It has also received planning for two further renewable green diesel power generation sites and has recently signed a joint venture with a leading UK supplier of gas and diesel generators. 

Plutus has commissioned two new 20MW flexible energy generation sites in Stowmarket, Suffolk and has energised two sites in Ipswich.  The company now has 120MW of flexible energy generation sites in operation with a further three 20MW sites expected to come into operation in 2018.  More generally, the company is focused on moving into gas powered energy generation, energy storage and hybrid generation sites during 2018.  Gas powered sites offer significantly more attractive returns compared to diesel powered sites and hybrid sites allow power generation sites of various types to partner with storage technologies giving the company access to additional revenue streams. 

MX OIL PLC

MX Oil plc ("MX Oil") holds an indirect investment in a Nigerian oil and gas licence, OML 113, which includes the Aje Field. During the year, the two wells in the Aje Field within block OML 113 have continued to produce notwithstanding an interruption in production at Aje 5 whilst some subsurface intervention was carried out. 

As part of the oil production process, a significant quantity of new data about the underlying reservoir and related geology has been collected.  Consequently, the partners in the licence commissioned the preparation of an updated Competent Persons Report ("CPR") in order to take into account this new data and to provide a more accurate update of the future potential of the field.

The revised CPR has now been completed which is an update to the CPR prepared previously in July 2014 and incorporates all the developments and new data generated by the project since that date. The level of reserves reported in this latest CPR represents a significant increase compared to the previous report and highlights the future potential of the Aje Field.

Now that the company has received the updated CPR, work is currently underway on modelling the potential for new oil wells in both the Turonian and Cenomanian.  Subject to the outcome of this work, it expects to see further development drilling in 2019, with a view to progressing to a full scale oil and gas integrated project thereafter.

Also, during the year, shareholders approved the adoption of a revised investing policy by the company to include interesting opportunities in adjacent areas of oil services, energy, power and related technologies.

METAL TIGER PLC

Metal Tiger plc ("Metal Tiger") which is listed on AIM, is focused on investing in mineral projects with a precious metals and strategic metals focus.  During the year, the company has continued to invest in MOD Resources Limited ("MOD") which is continuing to make good progress on its high-grade copper and silver deposit ("T3") in Botswana.  The company is looking forward to the results of the next resource upgrade on this asset, the finalisation of the definitive feasibility study and further exploration work in this licence area.

The company has also progressed the IPO of its joint venture in Thailand, however, the timing of this has been postponed pending greater clarity of the Thailand Government's Mineral Management Master Plan.

The company also raised £4.85 million by way of a private placement and further funds through the exercise of warrants.

SHUMBA ENERGY LIMITED

During the year Shumba Energy Limited has continued to develop its coal and energy interests in Botswana.  It currently has three advanced stage projects and one earlier stage alternative energy project.

ARC MINERALS PLC (formerly ORTAC RESOURCES LIMITED)

The company has made significant progress during the year.  It is now focused on its two high potential African mining assets namely: Casa Mining Limited ("CASA") a private company that holds prospective gold mining and exploration licences in the Democratic Republic of Congo; and Zamsort Limited ("Zamsort"), a company based in Zambia with interests in copper and cobalt. The company now owns some 90% of CASA having, during the year, made an offer to acquire the shares that it did not already own.  It has also increased its ownership in Zamsort to 55%.  During the period, the board of the company has also been restructured. 

POLEMOS PLC

Polemos plc is an investment company listed on AIM with a specific focus on the natural resources sector. During the year, Polemos plc invested in Oyster Oil and Gas Limited ("Oyster"), a company already listed on the TSX-V.  Oyster currently operates four blocks in the Republic of Djibouti (100% interest) of which three blocks are located onshore and one block offshore.  It also operates a 100% working interest in a large onshore block in the Republic of Madagascar.   In July 2017, Polemos raised around £500,000 for working capital purposes and to fund the seeking of investment opportunities.

In September 2017, Polemos announced the potential acquisition of a cyber security business SecurLinx Corporation, a US based cyber security company.  As this would constitute a reverse takeover, its shares weresuspended pending the publication of an admission document. This transaction, however, could not be completed and so the company came back to the market on 9 March 2018 as an AIM Rule 15 cash shell which effectively means that it needs to secure an alternative reverse takeover transaction within six months of this date.

PIRES INVESTMENTS PLC

Pires Investments plc is an investment company listed on AIM with a specific focus on the natural resources sector. It is currently seeking interesting investment opportunities.  The company's principal assets comprise cash and an investment in Eco (Atlantic) Oil and Gas Limited which, since the year end, has increased in value significantly. As a result, the company is now well placed to pursue exciting investment opportunities.

CORA GOLD LIMITED

Cora Gold Limited is a West African focused gold exploration company.  The company's principal project is the Sanankoro gold discovery in southern Mali. The company listed on AIM in October 2017.  Since then it has commenced drilling at Sanankoro which has yield some positive results.  It has also commenced drilling at its Tekeledougou project in southern Mali which has also produced some good results. Consequently, the company's share price has increased by some 40% since the year end.

I3 ENERGY PLC

I3 Energy Limited ("I3 Energy") owns a 100% operated interest in the Liberator field, an oil discovery situated within Block 13/23d of the North Sea, immediately adjacent to the Blake field and situated 2 kilometres from Blake's producing drill centre.  The company was introduced to AIM in July 2017.During Q1 2018, the companyraised additional funds and also announced that it was in advanced discussions with various possible partners regarding a potential joint venture relating to its 100% owned Liberator Oil Field and its 30^th Offshore Licencing Round application.  In May 2018, it announced that it had been awarded its sole 30^th Offshore Licensing Round application target, Block 13/23c 123 km², on a 100% Interest basis.

Since the year end, I3 Energy's share price has increased by around 300%.  Paternoster has realised some significant gains on this investment.

UNLISTED INVESTMENTS

CRADLE ARC MINERALS PLC (formerly ALECTO MINERALS PLC)

In December 2016, the company announced the proposed acquisition of the Mowana Copper Mine in Botswana ("Mowana"). This acquisition constituted a reverse takeover under the AIM Rules for Companies and, as a result, the company's shares were suspended. Mowana is a former producing copper mine that has already been brought back into production. Unfortunately, the company was not able to complete the acquisition of Mowana prior to the company being delisted.  However, since then, the company has worked hard to complete the acquisition and raise the appropriate level of funding such that it was able to come back to AIM in early 2018, albeit at a lower price than originally envisaged.  Since then, it has announced a maiden JORC resource for Mowana and an increase in production at the mine.

GLENWICK PLC

In February 2017, Paternoster subscribed for new ordinary shares in Glenwick plc ("Glenwick"), principally to gain exposure to its pre-IPO investment in I3 Energy plc. During the year, I3 Energy plc ("I3 Energy") was introduced to AIM and Paternoster received shares in I3 Energy. At the same time, Glenwick was progressing the acquisition of 100% of the share capital of Cora Gold Limited ("Cora Gold").  This transaction ultimately did not take place as Cora Gold completed its own IPO instead.  However, in order to compensate Glenwick for costs incurred, it received a number of Cora Gold shares which were then distributed to Glenwick shareholders.  Post period end, Glenwick is now in the process of being wound up and, whilst the share prices of I3 Energy and Cora Gold did not perform very well during 2017, post period end they have both improved, with I3 Energy increasing very significantly.  As a result, Paternoster has made a very attractive return from its investment in Glenwick.

ERIDGE CAPITAL LIMITED (formerly NEW WORLD OIL AND GAS PLC)

Eridge Capital Limited is an investment company with net assets comprising cash and a convertible loan in Big Sofa Technologies plc ("Big Sofa"), a company listed on AIM. During the year, the company changed its name and has migrated to the British Virgin Islands as this was believed to be a more appropriate jurisdiction for an unlisted investment company compared to remaining in Jersey.  The company is actively working on a revised strategy in order to deliver a return to shareholders. Post period end, the Company's loan in Big Sofa has been repaid and part of the loan has been converted into shares.

ELEPHANT OIL LIMITED

Elephant Oil Limited, is an oil and gas exploration company focused on West Africa, which holds a 100% interest in Block B, onshore Benin, on the prolific West Africa Transform Margin. The company continues to look at options to develop its asset and presence in the region.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2017

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2017

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2017

STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 31 DECEMBER 2017