TIDMCAML
RNS Number : 5043R
Central Asia Metals PLC
22 September 2017
22 September 2017
Central Asia Metals plc
(the "Group", the "Company" or "CAML")
Interim Results for the Six Months Ended 30 June 2017
Central Asia Metals plc (AIM: CAML) is pleased to announce its
unaudited interim results for the six months ended 30 June 2017
("H1 2017" or the "Period").
The Company is also pleased to declare an interim dividend of
6.5 pence per ordinary share (H1 2016: 5.5 pence), which equates to
24% of Kounrad gross revenue for the period.
H1 2017 Operational Highlights
-- Copper production of 7,027 tonnes, an increase of 2% vs. H1 2016 (6,908 tonnes)
-- Copper sales of 6,870 tonnes, an increase of 8% vs. H1 2016 (6,355 tonnes)
-- Leaching of Western Dumps underway, 1,300 tonnes of copper recovered
-- No Lost Time Injuries ("LTIs"), LTI free man hours now exceed 1.7 million
H1 2017 Financial Highlights
-- Gross revenue of $38.6 million (H1 2016: $30.9 million)
-- Average copper price achieved of $5,659 per tonne (H1 2016: $4,903 per tonne)
-- C1 cash cost of $0.45 per pound (H1 2016: $0.40 per pound)
-- EBITDA of $24.0 million (H1 2016: $17.4 million), margin of 62% (H1 2016: 56%)
-- Profit before tax up 36% to $20.4 million (H1 2016: $15.0 million)
-- EPS from continuing operations of 13.50 cents per share (H1 2016: 9.57 cents per share)
-- Interim dividend of 6.5 pence per share to be paid on 27 October 2017 (H1 2016: 5.5 pence)
-- Group cash balance of $41.7 million as at 30 June 2017 (31
December 2016: $40.4 million), with no debt
Outlook
-- On course to achieve 2017 copper production guidance of between 13,000 and 14,000 tonnes
-- 40% of 2017 copper production to come from Western Dumps with
increasing percentage of Western Dump copper production from 2018
onwards
-- Future Kounrad annual sustaining capex of only c.$2 million
-- 2017 budget of $1.8 million for Shuak drilling and wider exploration programme
Post period end
-- Acquisition of Lynx Resources, a Macedonian zinc and lead
producer, and associated equity issue, announced separately
today
Nick Clarke, Executive Chairman, commented:
"I am pleased to report another strong set of financial results,
demonstrating that Kounrad continues to be a highly profitable and
cash generative operation. Our copper price received for the period
was approximately $0.34 per pound higher than that received in H1
2016, whilst our C1 cash cost increased by only $0.05 per pound,
leading to an increased EBITDA margin for the period of 62%.
"The 6.5p dividend that we have today declared represents 24% of
our gross revenue from Kounrad and is in line with our historic
policy. Once this dividend is paid, we will have returned in excess
of $100 million to our shareholders in dividends and share
buy-backs since we commenced production at Kounrad in 2012.
"We are particularly proud of our achievements in terms of
corporate social responsibility (CSR) and are pleased that our
copper is produced safely, with no lost time injuries reported
during the six month period, and with minimal impact to the
environment in which we operate.
"We are delighted to have announced separately today our
intended acquisition of Lion and we look forward to becoming the
operators of the Simba zinc-lead mine in the near future. The Board
believes that this acquisition is an excellent fit for CAML as,
like Kounrad, Simba is a low cost operation that should enable us
to continue to pay the sector leading dividends for which we have
become known, whilst providing us with commodity, operational and
geographical diversification."
For further information please visit www.centralasiametals.com.
(The content of the CAML website should not be considered to form
part of or be incorporated into this announcement)
Enquiries:
Central Asia Metals Nick Clarke, +44 (0)20 7898
Executive Chairman 9001
Nigel Robinson,
CFO louise.wrathall@centralasiametals.com
Louise Wrathall,
Investor Relations
---------------------- --------------------- ---------------------------------------
Peel Hunt (Nominated
Adviser & Joint Matthew Armitt +44 (0)20 7418
Broker) Ross Allister 8900
---------------------- --------------------- ---------------------------------------
Mirabaud Securities +44 (0) 20 7878
(Joint Broker) Peter Krens 3362
---------------------- --------------------- ---------------------------------------
+44 (0) 20 7138
3205
Tim Blythe +44 (0) 20 7138
Blytheweigh Camilla Horsfall 3224
---------------------- --------------------- ---------------------------------------
Analyst presentation conference call
An analyst presentation on the Company's interim results hosted
by management will take place at 09:30 (BST) on Friday 22 September
2017 at the offices of Peel Hunt (Moor House, 120 London Wall,
London EC2Y 5ET) and will be accompanied by a live conference
call.
The accompanying presentation slides will be available on the
Company's website:
https://www.centralasiametals.com/investors/proposed-acquisition/ .
The conference call can be accessed by dialling 0808 109 0700 (from
the UK) or +44 20 3003 2666 (from all other locations) and quoting
'Central Asia Metals'.
Executive Chairman Review
The Board of CAML is pleased to declare an interim dividend of
6.5 pence per ordinary share, which represents 24% of Kounrad gross
revenue for the reporting period and is in line with the stated
policy. This is to be paid on 27 October 2017.
H1 2017 has been another period of solid production, broadly in
line with that of H1 2016. However, the copper price has been much
stronger during this period and the company has received an average
copper price of $5,659 per tonne, 15% higher than that of H1 2016.
This, coupled with 8% higher sales volumes, has led to a 25%
increase in gross revenue during the six month period. With only a
$0.05 per pound C1 cash cost increase, associated primarily with
the commencement of production of the Western Dumps, Kounrad's
production costs remain amongst the lowest in the world. The Kazakh
Tenge, which weakened in August 2015, has remained broadly stable
since and, importantly, there has been little in-country inflation
encountered by the Company. This has meant that CAML's
profitability has increased significantly.
In addition to the Company's strong financial performance, it is
important to note that these results have been delivered with
safety front of mind, and the team at Kounrad have now worked over
1.7 million man hours without recording a lost time injury.
Q2 2017 was an important period of transition, as the Kounrad
team began irrigating the Western Dumps. By the end of the quarter,
approximately 1,300 tonnes of copper had been recovered from this
material. The leaching process has been in line with our
expectations and test work and, in the month of June, copper
production from the Western Dumps represented c.40% of total metal
recovered.
During the winter period, the Shuak exploration team undertook
desk studies reviewing all historic data and, in doing so, designed
the 2017 exploration programme. Together with partners, Aksu-Esil,
CAML has now commenced field based work, with a TEM-FAST
electromagnetic geophysics survey nearing completion and geological
mapping underway. A diamond drilling programme of approximately
4,700 metres has recently commenced, together with an initial 7,000
metre core hydrotransport (CHT) drilling campaign. In total, 22,000
metres of drilling are planned for 2017 at a cost of c.$1.8
million.
CAML does not intend to develop the Copper Bay project and, in
August 2017, the Board made the decision to dispose of its holding
in that company and will commence the sales process during Q4
2017.
Operating Review
Kounrad
Operations
CAML is pleased to report a period of strong operational
performance at Kounrad, with copper cathode production for the
first six months of 2017 broadly in line with that of 2016 at 7,027
tonnes. This ensures that the company is on course to achieve its
full year production guidance of between 13,000 tonnes and 14,000
tonnes of copper cathode.
H1 2017 copper cathode sales of 6,870 tonnes represent an
increase of 8% on H1 2016. The copper was sold predominantly
through CAML's offtake partner, Traxys, and the technical quality
of the copper cathode remains high at 99.998% and continues to meet
the requirements of CAML's customers.
On the Eastern Dumps, the majority of leaching during H1 2017
was from Dump 5, with some additional leaching undertaken on Dump
7. As of 30 June 2017, CAML estimates that there is a further
19,500 tonnes of copper to be recovered from the Eastern Dumps
during the next three years. The new sprinkling irrigation system,
which has been designed to enable CAML to recover copper resources
from within the slope areas of the dumps, became operational on
Dump 9-10 in July 2017.
In April 2017, the Company began irrigating the Western Dumps.
Leaching began on Dumps 16 and 22, in an area known as the Initial
Leach Area ("ILA") and, by the end of the quarter, approximately
1,300 tonnes of copper had been recovered from this material.
Copper recovery from the Western Dumps has been in line with
expectations in terms of timing and copper grade within the
pregnant leach solution ("PLS").
Utilisation of the SX-EW facility remains at high levels, with
an average of 99.4% achieved during the reported period.
Corporate and Social Responsibility ("CSR")
In H1 2017, CAML recorded zero Lost Time Injuries ("LTI") with
the total LTI free man hours worked exceeding 1.7 million by the
end of the period. During the reporting period, CAML maintained a
strong focus on health and safety with a wide variety of training
courses for all employees and contractors as well as further
development of its health and safety management systems,
particularly for the new Western Dumps operation.
In conjunction with SRK Consulting, a further programme of
environmental and hydrogeological site investigations commenced in
H1 2017 focussing on the northern part of the Western Dumps,
outside the ILA. The studies focussed on bedrock drilling
programmes to determine the geological structure and groundwater
flow horizons for leaching operations in the coming years. A number
of boreholes will be drilled throughout 2017, and these will be
utilised as long term monitoring boreholes.
Several routine state inspections relating to health and safety
and environmental aspects of the operations were undertaken during
the period, with the outcome being that CAML adheres to all
relevant regulations at Kounrad.
The Company continues to actively engage with the local
community, with the focus remaining on health and education,
particularly with regards to children, and charitable organisations
based in Kounrad and Balkhash.
Shuak
Throughout the winter, the team at Shuak has reviewed historic
exploration work and available data ahead of commencing field based
work in Q2 2017. Together with partners, Aksu-Esil, CAML has been
undertaking geological mapping and is nearing completion of a
TEM-FAST electromagnetic geophysics programme, which has been
designed primarily to ascertain the depth and extent of the
saprolite weathering horizon.
The 2017 diamond drilling programme of approximately 4,700
metres has recently commenced, together with an initial 7,000 metre
core hydrotransport (CHT) drilling campaign, which is likely to be
increased by another 10,000 metres this year. Priority areas for
both work programmes are Mongol V and Mongol North. In total,
22,000 metres of drilling are planned for 2017, as well as some
trenching of other target areas. During August 2017, CAML became
the registered owner of the Shuak sub soil user contract.
The Company remains focused on the near surface copper oxide
resource potential of the licence area, and believes that in the
future it could be possible to develop another SX-EW style of
processing operation at Shuak, similar to that at Kounrad. In
addition, the company also intends to explore the primary copper
porphyry target at depth.
Copper Bay
During the reported period, CAML undertook some additional
engineering studies with the intention of improving the economics
of the Copper Bay project. While some capital expenditure savings
were identified and there is the potential to optimise the project
further in the future, the Board decided that these findings were
not sufficiently material to warrant developing Copper Bay in the
near term. In August 2017, the CAML Board therefore made the
decision to sell the project and, consequently, a sales process
will commence during Q4 2017.
Financial Review
Overview
CAML has reported a strong set of financial results, with
increased revenue and EBITDA compared to H1 2016 due to a
combination of higher copper prices achieved and higher sales
volumes. Continued cost control has enabled the Kounrad project to
continue producing copper at costs well within the lowest industry
quartile.
The Group generated H1 2017 EBITDA of $24.0 million (H1 2016:
$17.4 million), representing an increase of 38% from the prior
corresponding period, and an EBITDA margin of 62% (H1 2016:
56%).
Income statement
Group profit after tax from continuing operations increased by
42% to $15.0 million (H1 2016: $10.6 million), primarily as a
result of higher revenue. Earnings per share from continuing
operations increased to 13.50 cents (H1 2016: 9.57 cents).
Revenue
A total of 6,813 tonnes (H1 2016: 6,250 tonnes) of copper
cathode from Kounrad were sold as part of the Company's off-take
arrangements with Traxys and a further 57 tonnes (H1 2016: 105
tonnes) were sold locally. Total Kounrad copper sales were 6,870
tonnes (H1 2016: 6,355 tonnes), representing an 8% increase in
volumes.
While copper cathode sales volumes have increased when compared
to H1 2016, Group revenue also benefitted from a 15% increase in
the average copper price received, which was $5,659 per tonne in H1
2017 (H1 2016: $4,903 per tonne). This generated gross revenue for
the Group of $38.6 million (H1 2016: $30.9 million).
CAML's off-take arrangement with metals trader, Traxys, has been
fixed through to 31 December 2018 and the commitment is for a
minimum of 90% of the Kounrad copper cathode production. The Group
reports both a gross revenue and a net revenue line, which reflects
the offset of the off-takers fixed fee from the price of the copper
achieved. During H1 2017 the fixed fee was $1.3 million (H1 2016:
$1.2 million).
Cost of sales
Cost of sales for the period was $10.4 million (H1 2016: $8.3
million). The increase is due to higher sales volumes, higher
depreciation charges following the completion of the Kounrad Stage
2 Expansion and higher mineral extraction tax ("MET"). Depreciation
and amortisation charges during the period were $3.3 million (H1
2016: $2.2 million). MET for the period was $2.3 million (H1 2016:
$1.8 million) and is charged by the Kazakhstan authorities at the
rate of 5.7% on the value of metal recovered during the period.
During the period, the Kazakhstan Tenge appreciated slightly
against the US Dollar which also resulted in some increase in the
cost base. The average exchange rate for the period was 318 KZT/USD
(H1 2016: 346 KZT/USD), resulting in the Kazakhstan Tenge being
worth an average 9% more in US Dollar terms in H1 2017 compared to
H1 2016. Approximately 60% of the total cost base in Kazakhstan is
denominated in Tenge (70% of C1 cash costs).
C1 cash cost of production
C1 cash cost of production is a standard metric used in the
copper mining industry to allow comparison across the sector. In
line with the Wood Mackenzie approach, CAML calculates C1 by
including all direct costs of production at Kounrad (reagents,
power, production labour and materials) as well as local
administrative expenses, and distribution and selling costs. Local
taxes including MET and depreciation and amortisation charges are
excluded from C1 and reported within the fully inclusive unit cost
of production.
Kounrad's C1 cash cost of production remains firmly in the
lowest quartile of the industry cost curve for copper production at
$0.45 per pound (H1 2016: $0.40 per pound). Production from the
Western Dumps commenced in April 2017 and this resulted in slightly
higher electricity consumption and additional labour costs to
manage the Western Dumps operations during the period. Over the
coming years, the proportion of copper that Kounrad produces from
the Eastern Dumps will fall as production from the Western Dumps
gradually increases. This will result in slightly higher
electricity consumption and additional labour to manage the Western
Dumps operations.
The Group's fully inclusive unit cost for the period was $1.08
per pound (H1 2016: $0.97 per pound). This includes depreciation
and amortisation charges, local taxes including MET and corporate
overheads associated with the Kounrad project. The 11% increase in
the fully inclusive unit cost is due to the increased C1 cash cost,
higher depreciation and amortisation charges, and larger MET
obligations as explained above.
Administrative expenses
During the period, administrative expenses were $6.1 million (H1
2016: $5.9 million). The Group recognised a share based payment
charge of $1.2 million (H1 2016: $1.4 million) in relation to the
Company's Share Option Schemes.
Discontinued operations
In December 2016, CAML Mongolia BV signed an agreement with a
third party to sell its entire interest in Monresources LLC for a
cash consideration of $100 with deferred consideration dependent on
the outcome of future events. Confirmation of the transfer of
shares to the third party was received in February 2017. Following
unsuccessful attempts to dispose of the Ereen project, CAML has
taken the decision to exit its position in Zuunmod UUL LLC. It is
envisaged that this process will be completed by the end of 2017.
The Group continues to hold for sale the assets it owns in Mongolia
in this financial period although these assets were fully written
off in prior periods.
Balance sheet
During the period, there were additions to property, plant and
equipment of $1.2 million (H1 2016: $9.6 million). The additions
were a combination of Kounrad sustaining capital expenditure as
well as costs incurred to finalise the commissioning of the Kounrad
Stage 2 Expansion at the Western Dumps. Capital expenditure is
significantly reduced from the prior period due to finalisation of
the Stage 2 Expansion in early 2017. This expansion was completed
approximately 30% below the original $19.5 million budget, due to a
combination of cost savings associated with the weaker local
currency and engineering efficiencies.
A further $0.4 million (H1 2016: $0.8 million) was capitalised
in relation to exploration and evaluation costs incurred on the
Copper Bay project.
As at 30 June 2017, current trade and other receivables were
$1.0 million (31 December 2016: $0.9 million) and non-current trade
and other receivables were $2.7 million (31 December 2016: $2.7
million).
During the period, the Kazakhstan authorities refunded to CAML
$0.5 million of outstanding VAT. As at 30 June 2017, a total of
$2.7 million (31 December 2016: $2.8 million) of VAT receivable was
still owed to the Group. A further amount of $0.1 million was
refunded in July 2017 and has been classified as a current
receivable as at 30 June 2017. The Group is working closely with
its advisors to recover the remaining VAT, a portion of which will
be recovered through local sales of copper cathode to effectively
offset VAT liabilities.
As at 30 June 2017, current trade and other payables were $4.8
million (31 December 2016: $6.0 million) and the Group has no
debt.
The Group had cash of $41.7 million on 30 June 2017 (31 December
2016: $40.4 million).
Cash flows
The continued strong operational performance of the Kounrad
project and the associated low costs of production resulted in
robust cash flows for the Group during the period, with cash
generated from operations increasing to $17.4 million (H1 2016:
$13.8 million). During the period, $13.5 million (H1 2016: $12.5
million) was returned to shareholders as dividends.
$5.8 million of Kazakhstan corporate income tax was paid during
the period (H1 2016: $3.6 million). Payments made during H1 2017
included $4.8 million towards the 2017 corporate income tax
liability and $1.0 million of 2016 corporate income tax paid in
April 2017.
Importantly, after completing the Stage 2 Expansion capital
expenditure programme, CAML has no additional major capital
programmes at Kounrad, with only annual sustaining capital
expenditure at a cost of approximately $2.0 million expected going
forward.
Dividend
The Company's current dividend policy is that it will return a
minimum of 20% of the gross revenues generated from the Kounrad
project to shareholders.
The CAML Board has declared an interim dividend for the period
of 6.5 pence per ordinary share. The interim dividend equates to
approximately 24% of the gross revenue for the period and will be
payable on 27 October 2017 to shareholders registered on 6 October
2017.
Directors' Responsibility Statement
The Directors confirm that, to the best of their knowledge, the
condensed consolidated interim financial information has been
prepared in accordance with IAS 34 as adopted by the European
Union.
On behalf of the Board
Nigel Robinson
Chief Financial Officer
Independent review report to Central Asia Metals plc
Report on the Interim Results for the six months ended 30 June
2017
Our conclusion
We have reviewed Central Asia Metals plc's Interim Results for
the Six months Ended June 2017 (the "interim financial statements")
in the half-yearly report of Central Asia Metals plc for the 6
month period ended 30 June 2017. Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the AIM
Rules for Companies.
What we have reviewed
The interim financial statements comprise:
-- the condensed interim balance sheet as at 30 June 2017;
-- the condensed interim income statement and condensed
statement of comprehensive income for the period then
ended;
-- the condensed interim statement of cash flows for the period then ended;
-- the condensed interim statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly
report have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union and the AIM Rules for Companies.
As disclosed in the notes to the interim financial statements,
the financial reporting framework that has been applied in the
preparation of the interim financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The half-yearly report, including the interim financial
statements, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the
half-yearly report in accordance with the AIM Rules for Companies
which require that the financial information must be presented and
prepared in a form consistent with that which will be adopted in
the company's annual financial statements.
Our responsibility is to express a conclusion on the interim
financial statements in the half-yearly report based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the AIM
Rules for Companies and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half-yearly
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
22 September 2017
a) The maintenance and integrity of the Central Asia Metals plc
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the interim financial statements
since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
CONDENSED INTERIM INCOME STATEMENT (unaudited)
for the six months period ended 30 June 2017
Six months ended
30-Jun-17 30-Jun-16
Note $'000 $'000
------------------------------------------ ---- ------------ ---------------
Continuing operations
Revenue 37,320 29,728
------------------------------------------ ---- ------------ ---------------
Presented as:
Gross revenue 38,580 30,884
Less: off-take buyer's fees (1,260) (1,156)
------------------------------------------ ---- ------------ ---------------
Revenue 37,320 29,728
------------------------------------------ ---- ------------ ---------------
Cost of sales (10,374) (8,309)
------------------------------------------ ---- ------------ ---------------
Gross profit 26,946 21,419
------------------------------------------ ---- ------------ ---------------
Distribution and selling costs (140) (341)
Administrative expenses (6,140) (5,911)
Other income 106 72
Foreign exchange rate loss (342) (246)
Operating profit 20,430 14,993
------------------------------------------ ---- ------------ ---------------
Finance income 80 39
Finance costs (92) (71)
Profit before income tax 20,418 14,961
Income tax 6 (5,411) (4,331)
------------------------------------------ ---- ------------ ---------------
Profit for the period from continuing
operations 15,007 10,630
------------------------------------------ ---- ------------ ---------------
Discontinued operations
Profit/(loss) for the period from
discontinued operations 80 (77)
------------------------------------------ ---- ------------ ---------------
Profit for the period 15,087 10,553
------------------------------------------ ---- ------------ ---------------
Profit attributable to:
* Non-controlling interests (49) (46)
* Owners of the parent 15,136 10,599
------------------------------------------ ---- ------------ ---------------
5 15,087 10,553
------------------------------------------ ---- ------------ ---------------
Earnings/(loss) per share from continuing $ $ cents
and discontinued operations attributable cents
to owners of the parent during the
period (expressed in cents per share)
------------------------------------------ ---- ------------ ---------------
Basic earnings/(loss) per share
From continuing operations 7 13.50 9.57
From discontinued operations 0.07 (0.07)
------------------------------------------ ---- ------------ ---------------
From profit for the period 13.57 9.50
------------------------------------------ ---- ------------ ---------------
Diluted earnings/(loss) per share
From continuing operations 7 13.14 9.35
From discontinued operations 0.07 (0.07)
------------------------------------------ ---- ------------ ---------------
From profit for the period 13.21 9.28
------------------------------------------ ---- ------------ ---------------
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
for the six months period ended 30 June 2017
Six months
ended
-------------------------------------------- --------------------
30-Jun-17 30-Jun-16
$'000 $'000
-------------------------------------------- --------- ---------
Profit for the period 15,087 10,553
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Currency translation differences 3,443 405
Other comprehensive income for the period,
net of tax 3,443 405
-------------------------------------------- --------- ---------
Total comprehensive income for the period 18,530 10,958
-------------------------------------------- --------- ---------
Attributable to:
* Non-controlling interests (49) (46)
* Owners of the parents 18,579 11,004
-------------------------------------------- --------- ---------
Total comprehensive income for the period 18,530 10,958
-------------------------------------------- --------- ---------
Total comprehensive income/(expense) attributable to equity
shareholders arises from:
- Continuing operations 18,450 11,035
- Discontinued operations 80 (77)
----------------------------- ------ ------
18,530 10,958
----------------------------- ------ ------
CONDENSED INTERIM BALANCE SHEET
as at 30 June 2017
Unaudited Audited Unaudited
------------ ------------ ------------
30-Jun-17 31-Dec-16 30-Jun-16
Note $'000 $'000 $'000
----------------------------------- ---- ------------ ------------ ------------
Assets
Non-current assets
Property, plant and equipment 8 50,361 50,324 49,145
Intangible assets 9 41,761 40,759 40,178
Other non-current receivables 11 2,653 2,738 2,127
----------------------------------- ---- ------------ ------------ ------------
94,775 93,821 91,450
----------------------------------- ---- ------------ ------------ ------------
Current assets
Inventories 10 4,406 3,319 4,110
Trade and other receivables 11 975 919 3,131
Restricted cash 122 118 94
Cash and cash equivalents 41,580 40,258 30,107
----------------------------------- ---- ------------ ------------ ------------
47,083 44,614 37,442
----------------------------------- ---- ------------ ------------ ------------
Assets of the disposal
group classified as held
for sale - 45 72
----------------------------------- ---- ------------ ------------ ------------
47,083 44,659 37,514
----------------------------------- ---- ------------ ------------ ------------
Total assets 141,858 138,480 128,964
----------------------------------- ---- ------------ ------------ ------------
Equity attributable to
owners of the parent
Ordinary shares 1,121 1,121 1,121
Treasury shares (7,780) (7,780) (7,810)
Currency translation reserve (83,992) (87,435) (88,064)
Retained earnings:
At 1 January 215,479 209,120 209,120
Profit for the period attributable
to the owners 15,136 26,270 10,599
Other changes in retained
earnings (13,602) (19,911) (13,479)
----------------------------------- ---- ------------ ------------ ------------
217,013 215,479 206,240
----------------------------------- ---- ------------ ------------ ------------
126,362 121,385 111,487
----------------------------------- ---- ------------ ------------ ------------
Non-controlling interests 42 91 218
----------------------------------- ---- ------------ ------------ ------------
Total equity 126,404 121,476 111,705
----------------------------------- ---- ------------ ------------ ------------
Liabilities
Non-current liabilities
Deferred income tax liability 12 8,661 8,541 10,258
Provision for other liabilities
and charges 2,023 2,087 2,398
----------------------------------- ---- ------------ ------------ ------------
10,684 10,628 12,656
----------------------------------- ---- ------------ ------------ ------------
Current liabilities
----------------------------------- ---- ------------ ------------ ------------
Trade and other payables 4,770 6,020 4,166
----------------------------------- ---- ------------ ------------ ------------
4,770 6,020 4,166
----------------------------------- ---- ------------ ------------ ------------
Liabilities of disposal
group classified as held
for sale - 356 437
----------------------------------- ---- ------------ ------------ ------------
4,770 6,376 4,603
----------------------------------- ---- ------------ ------------ ------------
Total liabilities 15,454 17,004 17,259
----------------------------------- ---- ------------ ------------ ------------
Total equity and liabilities 141,858 138,480 128,964
----------------------------------- ---- ------------ ------------ ------------
CONDENSED INTERIM STATEMENT OF CHANGES OF EQUITY (unaudited)
for the six months period ended 30 June 2017
Currency Non-controlling
Ordinary Treasury translation Retained interest
Shares Shares reserve Earnings Total Total
--------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
At 31 December
2016 1,121 (7,780) (87,435) 215,479 121,385 91 121,476
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
Profit/(loss)
for
the period - - - 15,136 15,136 (49) 15,087
Other
comprehensive
income -
currency
translation
differences - - 3,443 - 3,443 - 3,443
Total
comprehensive
income - - 3,443 15,136 18,579 (49) 18,530
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
Transactions
with
owners
Share based
payments - - - 1,235 1,235 - 1,235
Disposal of
Monresources
LLC - - - 161 161 - 161
Exercise of
options - - - (1,492) (1,492) - (1,492)
Dividends - - - (13,506) (13,506) - (13,506)
Total
transactions
with owners,
recognised
directly in
equity - - - (13,602) (13,602) - (13,602)
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
At 30 June 2017 1,121 (7,780) (83,992) 217,013 126,362 42 126,404
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
Currency Non-controlling
Ordinary Treasury translation Retained interest
Shares Shares reserve Earnings Total Total
--------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
At 31 December
2015 1,121 (7,810) (88,469) 209,120 113,962 264 114,226
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
Profit/(loss)
for
the period - - - 10,599 10,599 (46) 10,553
Other
comprehensive
income -
currency
translation
differences - - 405 - 405 - 405
Total
comprehensive
income - - 405 10,599 11,004 (46) 10,958
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
Transactions
with
owners
Share based
payments - - - 1,392 1,392 - 1,392
Exercise of
options - - - (2,349) (2,349) - (2,349)
Dividends - - - (12,522) (12,522) - (12,522)
Total
transactions
with owners,
recognised
directly in
equity - - - (13,479) (13,479) - (13,479)
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
At 30 June 2016 1,121 (7,810) (88,064) 206,240 111,487 218 111,705
---------------- ------------ ------------ -------------- ------------- ---------- --------------- ----------
CONDENSED INTERIM STATEMENT OF CASH FLOWS (unaudited)
for the six months period ended 30 June 2017
Six months ended
30-Jun-17 30-Jun-16
Note $'000 $'000
------------------------------------- ------- --------- ---------
Cash flows from operating activities
Cash generated from operations 13 23,122 17,395
Corporate income tax paid (5,765) (3,602)
Interest paid (4) (2)
-------------------------------------- ------- --------- ---------
Net cash generated from operating
activities 17,353 13,791
-------------------------------------- ------- --------- ---------
Cash flows from investing activities
Purchases of property, plant
and equipment 8 (1,177) (9,596)
Purchase of intangible assets 9 (447) (780)
Proceeds from sale of property,
plant and equipment 76 -
Interest received 80 39
Restricted cash (increase)/
decrease (4) 400
-------------------------------------- ------- --------- ---------
Net cash used in investing
activities (1,472) (9,937)
-------------------------------------- ------- --------- ---------
Cash flows from financing activities
Dividend paid to owners of
the parent (13,506) (12,522)
Settlement on exercise of share
options (1,492) (2,349)
Net cash used in financing
activity (14,998) (14,871)
-------------------------------------- ------- --------- ---------
Effect of foreign exchange
gains/(losses) on cash and
cash equivalents 440 (390)
-------------------------------------- ------- --------- ---------
Net increase/(decrease) in
cash and cash equivalents 1,323 (11,407)
-------------------------------------- ------- --------- ---------
Cash and cash equivalents at
1 January 40,258 41,524
-------------------------------------- ------- --------- ---------
Cash and cash equivalents at
30 June 41,581 30,117
-------------------------------------- ------- --------- ---------
Cash and cash equivalents at 30 June 2017 includes cash at bank
on hand included in assets held for sale of nil (30 June 2016:
$10,000).
NOTES TO THE INTERIM FINANCIAL INFORMATION
For the six months period ended 30 June 2017
1. General information
Central Asia Metals plc ("CAML" or the "Company") and its
subsidiaries (the "Group") are a mining and exploration
organisation with operations primarily in Kazakhstan and a parent
holding company based in the United Kingdom ("UK").
The Group's principal business activity is the production of
copper cathode at its Kounrad operations in Kazakhstan. The Group
also owns a 75% shareholding in the Copper Bay tailings project in
Chile. During the period, the Group also held for sale two
exploration projects in Mongolia and in February 2017 the Group
disposed of its interest in one of the projects.
CAML is a public limited company, which is listed on the AIM
market of the London Stock Exchange and incorporated and domiciled
in the UK. The address of its registered office is Masters House,
107 Hammersmith Road, London, W14 0QH. The Company's registered
number is 5559627.
The condensed consolidated interim financial information
incorporate the results of Central Asia Metals plc and its
subsidiary undertakings as at 30 June 2017 and was approved by the
Directors for issue on 7 September 2017. These condensed interim
financial statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2016 were approved by the
board of directors on 4 April 2017 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was
unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under section 498 of the Companies
Act 2006.
These condensed interim financial statements have been reviewed,
not audited.
2. Basis of preparation
The condensed interim financial information for the six months
ended 30 June 2017 has been prepared in accordance with IAS 34,
'Interim financial reporting'. The condensed interim financial
information should be read in conjunction with the annual financial
statements for the year ended 31 December 2016, which have been
prepared in accordance with IFRS.
3. Accounting policies
The accounting policies, methods of computation and presentation
used in the preparation of the interim financial information are
the same as those used in the Group's audited financial statements
for the year ended 31 December 2016.
Going concern
After review of the Group's operations, financial position and
forecasts, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, the Directors continue to
adopt the going concern basis in preparing the unaudited interim
financial information.
4. Estimates
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed interim financial information, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 31 December 2016.
5. Segmental information
The Board is the Group's chief operating decision-maker.
Management have determined the operating segments based on the
information reviewed by the Board for the purposes of allocating
resources and assessing performance. The Board considers the
business from a mining project perspective.
The Group has business segments consisting of an SX-EW copper
plant at Kounrad in Kazakhstan, the Shuak exploration project in
Kazakhstan and the Copper Bay exploration project in Chile. The
Group operations are controlled from a head office in London, UK
but this does not represent a separate business segment.
The Board assesses the performance of the Kounrad project based
on a number of key operational and financial measures which relate
to copper production output, revenues from the sales of copper and
the overall costs of producing the copper.
The segments results for the period ended 30 June 2017 are as
follows:
Unaudited
-------------------------------- ------- --------- -------- ------------- ---------
Shuak Kounrad Copper Unallocated Total
Bay
-------------------------------- ------- --------- -------- ------------- ---------
$'000 $'000 $'000 $'000 $'000
------- --------- -------- ------------- ---------
Gross revenue - 38,580 - 38,580
Off-take buyers' fees - (1,260) - (1,260)
-------------------------------- ------- --------- -------- ------------- ---------
Revenue - 37,320 - 37,320
-------------------------------- ------- --------- -------- ------------- ---------
Kounrad EBITDA - 29,323 - - 29,323
Shuak administrative
expenses (96) - - - (96)
Copper Bay administrative
expenses - - (328) - (328)
Unallocated costs including
corporate - - - (4,897) (4,897)
-------------------------------- ------- --------- -------- ------------- ---------
Group continuing operations
EBITDA (96) 29,323 (328) (4,897) 24,002
Depreciation and amortisation - (3,273) - (63) (3,336)
Foreign exchange rate
(loss)/gain (3) (251) 31 (119) (342)
Other income - 106 - - 106
Finance income - 4 - 76 80
Finance costs (2) (88) - (2) (92)
-------------------------------- ------- --------- -------- ------------- ---------
Profit before income
tax (101) 25,821 (297) (5,005) 20,418
-------------------------------- ------- --------- -------- ------------- ---------
Income tax (5,411)
-------------------------------- ------- --------- -------- ------------- ---------
Profit for the period
after taxation from continuing
operations 15,007
-------------------------------- ------- --------- -------- ------------- ---------
Profit from discontinued
operations 80
-------------------------------- ------- --------- -------- ------------- ---------
Profit for the period 15,087
-------------------------------- ------- --------- -------- ------------- ---------
CAML signed the framework agreement to acquire the Shuak
copper-gold exploration project in November 2016 and the
comparative segmental results for the six month period ended 30
June 2016 do not include the results of the Shuak project. The
segments results for the period ended 30 June 2016 are as
follows:
Unaudited
------------------------------------- --------- -------- ------------- ---------
Kounrad Copper Unallocated Total
Bay
------------------------------------- --------- -------- ------------- ---------
$'000 $'000 $'000 $'000
--------- -------- ------------- ---------
Gross revenue 30,884 - - 30,884
Off-take buyers' fees (1,156) - - (1,156)
-------------------------------------- --------- -------- ------------- ---------
Revenue 29,728 - - 29,728
-------------------------------------- --------- -------- ------------- ---------
Kounrad EBITDA 22,168 - - 22,168
Copper Bay administrative
expenses - (449) - (449)
Unallocated costs including
corporate - - (4,303) (4,303)
-------------------------------------- --------- -------- ------------- ---------
Group continuing operations
EBITDA 22,168 (449) (4,303) 17,416
Depreciation and amortisation (2,207) - (42) (2,249)
Foreign exchange rate gain/(loss) 31 62 (339) (246)
Other income 72 - - 72
Finance income 5 - 34 39
Finance costs (71) - - (71)
-------------------------------------- --------- -------- ------------- ---------
Profit before income tax 19,998 (387) (4,650) 14,961
-------------------------------------- --------- -------- ------------- ---------
Income tax (4,331) - - (4,331)
-------------------------------------- --------- -------- ------------- ---------
Profit for the period after
taxation from continuing operations 15,667 (387) (4,650) 10,630
-------------------------------------- --------- -------- ------------- ---------
Loss from discontinued operations (77)
-------------------------------------- --------- -------- ------------- ---------
Profit for the period 10,553
-------------------------------------- --------- -------- ------------- ---------
Group segmental assets and liabilities for the six months ended
30 June 2017 are as follows:
Segmental Segmental
Assets Liabilities
-------------------------------- -------------------- --------------------
30-Jun-17 31-Dec-16 30-Jun-17 31-Dec-16
-------------------------------- --------- --------- --------- ---------
$'000 $'000 $'000 $'000
-------------------------------- --------- --------- --------- ---------
Shuak 305 - (30) -
Kounrad 97,554 98,275 (13,551) (13,700)
Copper Bay 4,539 4,766 (164) (259)
Assets held for sale - 45 - (356)
Unallocated including corporate 39,460 35,394 (1,709) (2,689)
-------------------------------- --------- --------- --------- ---------
Total 141,858 138,480 (15,454) (17,004)
-------------------------------- --------- --------- --------- ---------
6. Income tax
Six months
ended
------------------------------- ----------------------
30-Jun-17 30-Jun-16
$'000 $'000
Current tax on profits for the
year 5,608 4,331
Deferred tax credit (note 12) (197) -
------------------------------- ---------- ----------
Income tax expense 5,411 4,331
--------------------------------- ---------- ----------
Corporate income tax is calculated at 19.5% (H1 2016: 20%) of
the assessable profit for the year for the UK parent company and
20% for the operating subsidiaries in Kazakhstan (H1 2016:
20%).
Deferred tax assets have not been recognised on tax losses
primarily at the parent company and Copper Bay subsidiaries as it
remains uncertain whether these entities will have sufficient
taxable profits in the future to utilise these losses.
7. Earnings per share
Basic earnings/(loss) per share is calculated by dividing the
profit/(loss) attributable to owners of the Company by the weighted
average number of Ordinary Shares in issue during the period
excluding Ordinary Shares purchased by the Company and held as
treasury shares.
(a) Basic
Six months
ended
----------------------------------------------- ------------------------
30-Jun-17 30-Jun-16
----------------------------------------------- ----------- -----------
$'000 $'000
----------------------------------------------- ----------- -----------
Profit from continuing operations attributable
to owners of the parent 15,056 10,676
----------------------------------------------- ----------- -----------
Profit/(loss) from discontinued operations
attributable to owners of the parent 80 (77)
----------------------------------------------- ----------- -----------
Total 15,136 10,599
----------------------------------------------- ----------- -----------
Weighted average number of Ordinary Shares
in issue 111,558,091 111,558,091
----------------------------------------------- ----------- -----------
Earnings/(loss) per share from continuing
and discontinued operations attributable
to owners of the parent during the period
(expressed in $ cents per share) $ cents $ cents
From continuing operations 13.50 9.57
From discontinued operations 0.07 (0.07)
----------------------------------------------- ----------- -----------
From profit for the period 13.57 9.50
----------------------------------------------- ----------- -----------
The diluted earnings/(loss) per share is calculated by adjusting
the weighted average number of Ordinary Shares outstanding after
assuming the conversion of all outstanding granted share
options.
(b) Diluted
Six months
ended
----------------------------------------------- --------------------------------
30-Jun-17 30-Jun-16
----------------------------------------------- ------------- -----------------
$'000 $'000
----------------------------------------------- ------------- -----------------
Profit from continuing operations attributable
to owners of the parent 15,056 10,676
----------------------------------------------- ------------- -----------------
Profit/(loss) from discontinued operations
attributable to owners of the parent 80 (77)
----------------------------------------------- ------------- -----------------
Total 15,136 10,599
----------------------------------------------- ------------- -----------------
Weighted average number of ordinary shares
in issue 111,558,091 111,558,091
Adjusted for:
- Share Options 3,033,290 2,643,025
Weighted average number of ordinary shares
for diluted earnings per share 114,591,381 114,201,116
Diluted earnings per share $ cents $ cents
From continuing operations 13.14 9.35
From discontinued operations 0.07 (0.07)
----------------------------------------------- ------------- -----------------
From profit for the period 13.21 9.28
----------------------------------------------- ------------- -----------------
8. Property, plant and equipment
Motor
Construction Plant Mining vehicles
in progress and equipment assets and office Total
equipment
------------------------- ------------------ --------------- -------- ----------- -------
Group $'000 $'000 $'000 $'000 $'000
------------------------- ------------------ --------------- -------- ----------- -------
Cost
At 1 January 2016 2,003 49,408 1,601 1,301 54,313
Additions 11,572 557 - 202 12,331
Disposals - (246) - (3) (249)
Change in estimate
- asset retirement
obligation - (22) - - (22)
Transfers (10,443) 10,427 - 16 -
Exchange differences 67 985 30 26 1,108
------------------------- ------------------ --------------- -------- ----------- -------
At 31 December 2016 3,199 61,109 1,631 1,542 67,481
Additions 1,030 22 - 125 1,177
Disposals - (104) - (21) (125)
Change in estimate
- asset retirement
obligation - (230) - - (230)
Transfers (2,331) 2,310 - 21 -
Exchange differences 137 1,812 60 50 2,059
At 30 June 2017 2,035 64,919 1,691 1,717 70,362
------------------------- ------------------ --------------- -------- ----------- -------
Accumulated depreciation
At 1 January 2016 - 12,953 62 498 13,513
Provided during the
year - 3,445 38 155 3,638
Disposals - (246) - (3) (249)
Exchange differences - 213 - 42 255
------------------------- ------------------ --------------- -------- ----------- -------
At 31 December 2016 - 16,365 100 692 17,157
Provided during the
period - 2,476 20 90 2,586
Disposals - (102) - (18) (120)
Exchange differences - 356 4 18 378
------------------------- ------------------ --------------- -------- ----------- -------
At 30 June 2017 - 19,095 124 782 20,001
------------------------- ------------------ --------------- -------- ----------- -------
Net book value at 31
December 2016 3,199 44,744 1,531 850 50,324
------------------------- ------------------ --------------- -------- ----------- -------
Net book value at 30
June 2017 2,035 45,824 1,567 935 50,361
------------------------- ------------------ --------------- -------- ----------- -------
The reduction in estimate in relation to the asset retirement
obligation of $230,000 (2016: $22,000) is due to a combination of
adjusting the provision recognised at the net present value of
future expected costs using an inflation rate of 5.56% (2016:
6.02%) and discount rate of 8.07% (2016: 8.07%) representing the
risk-free rate (pre-tax) for Kazakhstan as well as updating the
provision for management's best estimate of the costs that will be
incurred based on current contractual and regulatory requirements
and the estimated useful life of mine to 2034.
9. Intangible assets
Exploration
and Mining
evaluation licences Computer
Goodwill costs and permits software Total
------------------------------ ---------- ----------- ------------- ---------- -------
Group $'000 $'000 $'000 $'000 $'000
------------------------------ ---------- ----------- ------------- ---------- -------
Cost
At 1 January 2016 10,106 2,039 30,631 38 42,814
Additions - 1,561 14 19 1,594
Exchange differences 187 - 306 1 494
------------------------------ ---------- ----------- ------------- ---------- -------
At 31 December 2016 10,293 3,600 30,951 58 44,902
Additions - 438 - 9 447
Exchange differences 379 - 1,083 - 1,462
At 30 June 2017 10,672 4,038 32,034 67 46,811
------------------------------ ---------- ----------- ------------- ---------- -------
Accumulated amortisation
At 1 January 2016 - - 2,524 23 2,547
Provided during the year - - 1,554 9 1,563
Exchange differences - 30 3 33
------------------------------ ---------- ----------- ------------- ---------- -------
At 31 December 2016 - - 4,108 35 4,143
Provided during the period - - 823 2 825
Exchange differences - - 82 - 82
------------------------------ ---------- ----------- ------------- ---------- -------
At 30 June 2017 - - 5,013 37 5,050
------------------------------ ---------- ----------- ------------- ---------- -------
Net book value at 31 December
2016 10,293 3,600 26,843 23 40,759
------------------------------ ---------- ----------- ------------- ---------- -------
Net book value at 30 June
2017 10,672 4,038 27,021 30 41,761
------------------------------ ---------- ----------- ------------- ---------- -------
Copper Bay project
The Group has reviewed the indicators for impairment under IFRS
6 Exploration and Evaluation of Mineral Resources and has not
identified any indicators of impairment.
10. Inventories
30-Jun-17 31 Dec
$'000 16
$'000
--------------- --------- -------
Raw materials 3,781 2,962
Finished goods 625 357
--------------- --------- -------
4,406 3,319
--------------- --------- -------
11. Trade and other receivables
30-Jun-17 31-Dec-16
Current receivables $'000 $'000
------------------------ ---------- ---------
Trade receivables 22 -
Prepayments 443 347
VAT receivable 357 548
Other receivable 153 24
975 919
------------------------ ---------- ---------
Non-current receivables
Prepayments 73 368
VAT receivable 2,580 2,370
2,653 2,738
------------------------ ---------- ---------
As at 30 June 2017, the total Group VAT receivable was
$2,937,000 (31 December 2016: $2,918,000) which included an amount
of $2,725,000 (31 December 2016: $2,838,000) of VAT owed to the
Group by the Kazakhstan authorities. During the six month period
ended 30 June 2017, the authorities refunded $545,000 and a further
amount of $145,000 was refunded from the authorities in July 2017
and has been classified as current trade and other receivables as
at 30 June 2017. The Group is working closely with its advisors to
recover the remaining VAT, a portion of which will be recovered
through local sales of copper cathode to effectively offset VAT
liabilities.
12. Deferred income tax liability
The movements in the Group's deferred tax assets and liabilities
which are expected to be recovered or settled more than 12 months
after the reporting period are as follows:
Currency Credit
to
income
translation statement At
At 1 30
January differences $'000 June
2017 2017
$'000 $'000 $'000
---------------------------- --------- ------------------ ------------------- ------------- ---------------------
Other timing differences (82) - - (82)
Deferred tax liability on
fair value adjustment on
Kounrad Transaction (8,459) (317) 197 (8,579)
Deferred tax liability, net (8,541) (317) 197 (8,661)
--------------------------------------- ------------------ ------------------- ------------- ---------------------
A taxable temporary difference arose as a result of the Kounrad
Transaction, where the carrying amount of the assets acquired were
increased to fair value at the date of acquisition but the tax base
remained at cost. The deferred tax liability arising from this
taxable temporary difference has been reduced by $197,000 to
reflect the tax consequences of depreciating and amortising the
recognised fair values of the assets during the period.
Currency Credit
translation to At
At 1 income 30
January differences statement June
2016 2016
$'000 $'000 $'000 $'000
---------------------------- -------- -------------------------- -------------- ------------ ---------
Other timing differences (134) (18) - (152)
Deferred tax liability on
fair value adjustment on
Kounrad Transaction (10,106) - - (10,106)
Deferred tax liability, net (10,240) (18) - (10,258)
-------------------------------------- -------------------------- -------------- ------------ ---------
Where the realisation of deferred tax assets is dependent on
future profits, the Group recognises losses carried forward and
other deferred tax assets only to the extent that the realisation
of the related tax benefit through future taxable profits is
probable.
13. Cash generated from operations
Six months ended
30-Jun-17 30-Jun-16
$'000 $'000
------------------------------------ --------- ---------
Profit before income tax including
discontinued operations 20,498 14,884
Adjustments for:
Depreciation 2,511 1,361
Amortisation 825 888
Gain on disposal of property, plant
and equipment (71) -
Foreign exchange loss 373 246
Share based payments 1,235 1,392
Finance income (80) (39)
Finance costs 92 71
Charges in working capital:
Inventories (1,085) (1,079)
Trade and other receivables 41 1,640
Trade and other payables (1,217) (1,969)
Cash generated from operations 23,122 17,395
------------------------------------ --------- ---------
14. Commitments
Significant capital expenditure contracted for at the end of the
reporting period but not recognised as liabilities is as
follows:
30-Jun-17 30-Jun-16
$'000 $'000
------------------------------ ---------- ----------
Property, plant and equipment - 309
Other 283 1,269
------------------------------ ---------- ----------
Total 283 1,578
------------------------------ ---------- ----------
The reduction in commitments from the prior period is due to the
completion of the Kounrad Stage 2 Expansion.
15. Dividend per share
An interim dividend of 6.5 pence per ordinary share (2016: 5.5
pence per share) was declared by the CAML Board on 22 September
2017.
16. Related party transactions
During the six month period ended 30 June 2017, the Group had no
transactions with related parties with the exception of the
Company's subsidiaries.
Mr Kenges Rakishev became a major shareholder of CAML on 23 May
2014 following completion of the Kounrad Transaction. He was
appointed to the CAML Board on 9 December 2013 following the
completion of the first part of the transaction. Consequently,
Kenges Rakishev is considered a related party in any dealings he
has with the Group. As part of the obligations on Kenges Rakishev
for completing the Kounrad Transaction, he signed a relationship
agreement with CAML setting out the terms of the relationship
between himself and the Group.
In June 2017, Kenges Rakishev sold his 86.09% interest in JSC
Kazkommertsbank ("KKB") to JSC Halyk Bank and resigned as Chairman
of KKB in July 2017. The Group uses the facilities of KKB and JSC
Halyk Bank within Kazakhstan for its normal day-to-day banking.
Kenges Rakishev is a Director of JSC Insurance Company. The
Group incurs insurance premiums with JSC Insurance Company and has
made an insurance claim under which a syndicate of insurers,
including JSC Insurance Company, have a potential liability.
During the period, the Group paid consultancy fees of $37,500 to
Nurlan Zhakupov, a Non-Executive Director of the company, under a
consultancy agreement in terms of which Mr Zhakupov provides
services over and above his normal duties.
17. Events after the reporting period
Kazakhstan VAT recoverability
As at 30 June 2017 a total of $2,725,000 (31 December 2016:
$2,838,000) of VAT receivable was still owed to the Group by the
Kazakhstan authorities. A portion of this amount totalling $145,000
was refunded from the authorities in July 2017 and has been
classified as current trade and other receivables as at 30 June
2017.
Shuak project
During August 2017, CAML became the registered owner of the
Shuak sub soil user contract.
Copper Bay project
Given that CAML does not intend to develop the Copper Bay
project in current market conditions, in August 2017, the CAML
Board made the decision to dispose of its holding in that company
and will commence the sales process during Q4 2017.
Project Lion
Acquisition of Lynx Resources, a Macedonian zinc and lead
producer, and associated equity issue, announced separately
today.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFSLARILFID
(END) Dow Jones Newswires
September 22, 2017 02:01 ET (06:01 GMT)
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