TIDMKEM
RNS Number : 0881Q
Kemin Resources PLC
04 June 2018
4 June 2018
Kemin Resources Plc
("Kemin" or the "Company")
2017 Audited Annual Results
Kemin (AIM: KEM), a molybdenum and tungsten exploration and
development company with substantial interests in Kazakhstan, today
announces its audited annual results for the year ended 31 December
2017.
Highlights
-- Award of the extension of the licence at Smirnovskoye in H1
2017, the extension to the licence at Drozhilovskoye is in the
final stages and the expectation is that it will be received in Q2
2018;
-- Detailed drilling amounting to 534 metres was conducted at
the Drozhilovskoye field, with 427 samples taken for analysis in Q1
2018 (please refer to the RNS dated 19 March 2018 for further
information);
-- In Q1 2018, the Company supplied samples to China Molybdenum
which is one of the largest Molybdenum mining Companies in China
for analytical testing to determine the grade and production
techniques, with a view subject to sourcing additional funding, to
developing a pilot plant and potentially negotiating offtake
agreements in the future;
-- Continued financing support for the Company from Amrita
Investments Limited, a vehicle owned by the Company's majority
shareholders;
-- Attributable loss of GBP463,000 (2016: GBP432,000) in the year.
The accounts for the year ended 31 December 2017 will shortly be
available on the Company's website, www.keminresources.com. The
Company is today posting its annual report and accounts, together
with accompanying notice of Annual General Meeting, to
Shareholders.
The Annual General Meeting of the Company will be held at
offices of BDO LLP, 55 Baker Street, London, W1U 7EU on 29 June
2018 at 9.30am.
Commenting on the results, Sanzhar Assaubayev, the CEO of Kemin,
said:
"Once the analysis of the samples taken from Drozhilovskoye is
complete, the Company Is planning to move forward to the next stage
of its development which will, subject to sourcing additional
funding, be the development of a pilot plant."
For further information, please visit www.keminresources.com or
contact:
Kemin Resources Plc
Rajinder Basra (Chief Financial Officer)
+44(0)207 932 2456
Strand Hanson Limited (Nominated & Financial Adviser and
Broker)
James Spinney / Ritchie Balmer
+44(0)207 409 3494
Information on the Company
Kemin Resources Plc (AIM:KEM) ("Kemin" or the "Company"), is an
exploration and development Company, its principal mining assets
are located in Northern Kazakhstan. The Company is focused on
exploring and advancing its two exploration sites for the
extraction of molybdenum, tungsten, lithium and copper deposits at
Drozhilovskoye and Smirnovskoye. Kemin was formed into its present
structure in April 2013 by the reverse take-over of GMA Resources
plc by the 'Joint Venture Kazakh-Russian Mining Company LLP'
(KRMC).
Chairman's Statement
During the year the extension to the original licence was
approved for Smirnovskoye, and the licence extension is valid until
September 2019. In relation to Drozhilovskoye, we do not see any
issues in obtaining the license as we have satisfied all the
requests for information from the relevant ministry. Administrative
delays have held up the licence and we are now expecting to receive
the signed licence in Q2 2018.
The Company is now in a new phase of development and moving
towards production. We have entered into talks with interested
parties in particular with China Molybdenum, which has expertise in
processing our particular minerals. The economics of moving to
production have changed as commodity prices have stabilised and
with the inclusion of Lithium in the profit generation models the
projects are more economically viable.
One of the key steps moving forward is to update and more
clearly define the resources. The Company undertook exploration
drilling in Q1 2018 at the Drozhilovskoye site, the results of
which were very encouraging, (as announced by the Company on 19
March 2018). This drilling was undertaken by an external geological
firm and the results of which will prove useful in bringing
partners on board to develop the site. In addition a Competent
Persons Report is shortly to be commissioned under the JORC code.
This will provide further external verification of the resources on
both sites.
We are keen to press forward with the plans for development. The
sourcing of a partner that has skill and expertise in this area is
seen as extremely beneficial to moving the plans forward.
Exploration drilling
The Company undertook exploration drilling in Q1 2018 at the
Drozhilovskoye site, the results of which were very
encouraging.
In terms of funding, the Company has sufficient operational
funds from its existing facility with Amrita Investments. The
Company will seek to source developmental funds as the project
moves forward and the quantum of funding requirement becomes more
transparent.
The Board wishes to thank the shareholders for their patience
and we are confident of looking forward to a productive 2018 as the
Company develops.
Kanat Assaubayev
Chairman
1 June 2018
Chief Executive Officer's Report
Overview
As an update on the licences:
-- The extension to the Smirnovskoye licence and associated work
programmes was agreed with the Kazakh authorities and the licence
extended to September 2019.
-- The extension to the Drozhilovskoye licence and associated
work programmes is with the Kazakh authorities, and is in the final
administrative stages of sign off. Final sign is expected in Q2
2018, and the licence extension will run for 2 years from the date
of signing.
The Company has been moving forward with the development of the
sites with a view to moving to production. The initial starting
point is the analysis of samples that were extracted at
Drozhilovskoye. Once this has been completed and the technological
basis for extracting the three principal minerals Molybdenum,
Tungsten and Lithium from the ore a production plan will be
established. It is envisaged subject to sourcing additional
funding, that a pilot plant will be established with an initial run
rate of 300,000t or ore per annum. The full production plant will
be significantly higher than this at approx. 3mt of ore being
processed.
Exploration Work Update
The latest drilling and analysis work clarified the geological
structure of the Drozhilovskoye field and confirmed that the
tungsten and molybdenum minerals are isolated, and that they can be
selectively mined. The work also confirmed the presence of
significant amounts of high quality lithium. The work undertaken by
the Company internally has allowed a re-estimation of the contained
metal content of both molybdenum and tungsten resources and
provides a first estimate for the lithium resource (all with a
cut-off grade of 0.05%). The drilling consisted of number of bore
holes, totaling 534 metres and 417 samples were taken for
analytical review. Please refer to the Company's RNS dated 19 March
2018 for further information.
Further development of the asset
The Company's lead specialists recently visited Chinese research
institutes to familiarise themselves with the technology and
discuss the detailed procedures for processing molybdenum, tungsten
and lithium ores, and to deliver a presentation on Kemin.
The trip also involved a visit to an operating plant for the
beneficiation of molybdenum, tungsten and lithium ores with the end
product being flotation concentrates of three different types of
metal, i.e. molybdenum, tungsten and lithium. The deposits of the
Drozhilovskoye field are regarded by management to be very similar
to the ores being processed at that plant.
This plant visited is owned by China Molybdenum, which is the
largest molybdenum mining company in China. During the meeting,
China Molybdenum showed interest in the Drozhilovskoye field and
discussions were held in relation to a possible joint development
of the field. These initial discussions centered on development via
open pit mining, and situation of the production complex close to
good rail links and power supplies. This, together with the
presence of lithium, and other minerals, indicated from the test
drilling conducted, makes the development of the field attractive
to a partner, and further discussions are planned to take
place.
The following work needs to be carried out to transition to the
production phase:
-- Completion of a mineral block model and resource estimation.
As part of the process of moving to the next stage of development
the Company will instruct a Competent Persons Report in accordance
with the JORC code, for both sites;
-- Approval of the reserves by the Kazakh authorities;
-- Further geological exploration through drilling confirmatory
boreholes and taking further samples for process testing and
determining an efficient technology for the extraction of
molybdenum, tungsten and lithium;
-- Subject to sourcing additional funding, the process testing
will be followed by construction of a pilot beneficiation plant
with a proposed processing capacity of 300kt per year, and which
will produce a concentrate of molybdenite, tungsten and a
concentrate of lithium;
-- Completion of a feasibility study to confirm all technical
and financial results including using the design of the pilot
beneficiation plant to develop, subject to sourcing additional
funding. A beneficiation plant with ore processing capacity of
3.0mt per year.
Funding
Funding requirements are being assessed to determine what
additional funding is required in the first instance in relation to
the construction of the pilot plant.
The costs of the work programs for both sites totals
approximately GBP2.3m for the two year licence period.
The Company has sufficient cash resources available under its
current facility arrangements with Amrita (GBP4.5million of which
is still available for drawdown) to perform the work programmes as
currently specified. However dependent on future plans and in
particular the setting up and operation of a pilot plant, further
funds may be raised through equity/debt finance. During this
non-productive phase the Company will maintain a tight control of
costs in order to maintain cash resources.
In relation to development funding to move to the production
stage, the Company is currently exploring and developing plans to
obtain further lines of funding, once a firmer budgeted cost of
developing the pilot plant, and production techniques are
refined.
Summary
The Company is in advanced talks with interested parties who
have been encouraged by the recent drill results. The expectation
is that an agreement will be reached to progress the development of
the sites, with the aim to move towards production in the near
future initially on a pilot plant basis.
Financial performance review
The consolidated loss attributable to Kemin shareholders in the
twelve months ended 31 December 2017 was GBP463,000 (FY 2016:
GBP432,000). The overall loss including that attributable to
minority shareholders was GBP484,000 (2016:GBP445,000). The costs
of servicing the debt and administrative costs of the Group were in
line with expectations. Of the loss GBP356,000 is attributable to
the head office, being administrative costs of which the majority
relates to maintaining the professional fees and associated fees
for maintaining the London listing on the London Stock Exchange. In
addition certain costs are incurred in supporting the
administrative function in Kazakhstan. They have been maintained at
competitive levels.
The other principal expense relates to finance charges which
total GBP287,000, (2016 GBP287,000). The interest accrued on the
loan in the current year has been Capitalised against the loan
balance.
As in the prior year the cash spend is kept to a minimum at
present with a limited capital expenditure programme. The principal
cash expenses have related to servicing the head office
administrative function, interest charges and loan repayments have
been deferred until cash resources allow them to be repaid. It is
the intention to move forward with sample testing with the aim of
raising the necessary funds to develop the pilot plant in the near
term.
Support is still being obtained from the principal shareholder
via Amrita Investments Ltd. The current cash balances and
availability of further draw downs (GBP4.5million left to drawdown)
on the Amrita loan facility if required, provides sufficient funds
for the company to continue to meet its current obligations.
Cost control
Overall costs have been maintained in line with the prior year.
The Company is currently developing its longer term plans of
development.
Principal risks and uncertainties
The principal risks exposed to the Company are:
-- availability of future funding outside of the Amrita facility;
-- political and economic environment;
-- fluctuation in commodity prices;
-- financial risk;
-- the resource differing in grade and quantity to that
predicted by feasibility studies; and
-- fluctuations in exchange rates resulting from changes in the value of the Kazakh Tenge.
Mineral resource statement as at February 2013
The tables below demonstrate the most recent independently
verified reserves/resources for the two deposits at a cut-off grade
of 0.05% based on GKZ classifications as follows. Please refer to
the Company's RNS dated 19 March 2018 for the most recent internal
resource estimate on the Drozhilovskoye field.
Drozhilovskoye
Reserve/ Ore Reserve/ Molybdenum Molybdenum Tungsten Tungsten
Resource Classification Resource Metal Grade Metal Grade
(Mt) (kt) (%) (kt) (%)
=========================== ============== ============ ============ ========== ==========
C1 139.8 262.9 0.19 64.3 0.05
============== ============ ============ ========== ==========
C2 130.5 77.5 0.06 88.3 0.03
============== ============ ============ ========== ==========
P 300 150 0.05 150 0.05
============== ============ ============ ========== ==========
Smirnovskoye
Reserve/ Ore Reserve/ Molybdenum Molybdenum Tungsten Tungsten
Resource Resource Metal Grade Metal Grade
Classification (Mt) (kt) (%) (kt) (%)
================== ================== ============ ============ ========== ==========
C1 170.5 221.7 0.13 17.1 0.01
================== ============ ============ ========== ==========
C2 108.1 114.2 0.11 13.2 0.12
================== ============ ============ ========== ==========
P 673 417 0.06 165 0.03
================== ============ ============ ========== ==========
Mitigation of risks and uncertainties
The Company's management has analysed the risks and
uncertainties and monitors the risks as far as it is practical do
so given the early development of the Company.
Certain factors are beyond the control of the Company such as
the fluctuations in the price of the commodities. However the Group
is aware of these factors and tries to mitigate them as far as
possible. The plan is to move forward with test production to
encompass the production of Lithium in the overall plan, which
increases the economics of the overall project.
The Company cannot control the political and economic
environment of the country in which the resources are based.
However, to minimise the risk, Kemin maintains close relationships
with the Kazakhstan authorities in order to minimise bureaucratic
delays and problems.
In the future as funds are required in order to move to the next
stage of development it is the Company's aim is to fix interest
rates, where possible, with the preferred option being to raise
funds via equity. As stated the Company has sufficient working
capital facilities at present to meet its current cash flow
requirements.
The Company has used independent consultants experienced in
resource reports, of the type required by the Group, to mitigate as
far as possible any material changes in the resource estimates.
Key performance indicators
Given the stage of development of the Company, the key
performance indicators used by the management for monitoring
progress and strategic objectives for the business are set out
below:
31 December
2017 2016
--------- ----------------------------
Molybdenum resources (metal equivalent) -
C1 (Kt) 484.6 484.6
--------- ----------------------------
Tungsten resources (metal equivalent) - C1
(Kt) 81.4 81.4
--------- ----------------------------
Molybdenum resources - inferred grade (%) 0.156 0.156
--------- ----------------------------
Tungsten resources - inferred grade (%) 0.026 0.026
--------- ----------------------------
Cash balance (GBP000's) 16 59
--------- ----------------------------
Exploration expenditure (cumulative - GBP000's) 2,396 2,539
--------- ----------------------------
Net loss (GBP000's) 484 445
--------- ----------------------------
The change in the value of the exploration expenditure is due
principally to the effect of the change in valuation of the Kazakh
Tenge against Sterling.
The key statistic is the level of resources which has been
measured under the GKZ classification, and will be updated shortly
under JORC (2012) by an independent consultancy once the additional
exploration and evaluation work is completed.
Given the stage of development of the Group, it has a low number
of employees who are concentrated in the head office. Details of
the Group policy on employees are given on page 9.
The Strategic report was approved and authorised by the Board
and signed on its behalf by:
Sanzhar Assaubayev
Chief Executive Officer
1 June 2018
Consolidated statement of profit or loss
Year ended 31 December 2017
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
------------- -------------
Administrative expenses (197) (158)
-------------------------------------------------------- ------------- -------------
Operating loss (197) (158)
Finance expense (287) (287)
-------------------------------------------------------- ------------- -------------
Loss before income tax (484) (445)
-------------------------------------------------------- ------------- -------------
Income tax expense - -
-------------------------------------------------------- ------------- -------------
Loss for the year (484) (445)
-------------------------------------------------------- ------------- -------------
Loss for the year attributable to:
Equity shareholders of the parent (463) (432)
Non-controlling interest (21) (13)
-------------------------------------------------------- ------------- -------------
(484) (445)
-------------------------------------------------------- ------------- -------------
Loss per ordinary share - basic and diluted
Attributable to the equity shareholders of the parent (0.26p) (0.25p)
-------------------------------------------------------- ------------- -------------
Consolidated statement of comprehensive income
Year ended 31 December 2017
2017 2016
GBP'000 GBP'000
---------------------------------------------------------- -------- --------
Loss for the year (484) (445)
Items which may be re-classified to statement of profit
or loss
Currency translation differences arising on translations
of foreign operations that may be reclassified to
the profit or loss (34) (58)
---------------------------------------------------------- -------- --------
Total comprehensive loss (518) (503)
---------------------------------------------------------- -------- --------
Total comprehensive loss attributable to:
Owners of the parent (514) (481)
Non-controlling interest (4) (22)
---------------------------------------------------------- -------- --------
(518) (503)
---------------------------------------------------------- -------- --------
Consolidated statement of financial position
As at 31 December 2017
As at As at
31 December 31 December
2017 2016
GBP'000 GBP'000
--------------------------------------------- ------------- -------------
Assets
Non-current
Intangible assets 2,314 2,539
Property, plant and equipment 13 15
Other non-current assets 145 169
Restricted cash 3 5
---------------------------------------------- ------------- -------------
Non-current assets 2,475 2,728
Current
Other receivable 27 10
Cash and equivalents 16 59
---------------------------------------------- ------------- -------------
43 69
--------------------------------------------- ------------- -------------
Total assets 2,518 2,797
---------------------------------------------- ------------- -------------
Liabilities
Non-current
Borrowings 3,206 2,990
---------------------------------------------- ------------- -------------
Non-current liabilities 3,206 2,990
---------------------------------------------- ------------- -------------
Current
Trade and other payables 1,657 1,590
Borrowings 646 690
---------------------------------------------- ------------- -------------
Current liabilities 2,303 2,280
---------------------------------------------- ------------- -------------
Total liabilities 5,509 5,270
---------------------------------------------- ------------- -------------
Net liabilities (2,991) (2,473)
---------------------------------------------- ------------- -------------
Equity
Equity attributable to owners of the parent
Ordinary share capital 1,748 1,748
Deferred share capital 6,168 6,168
Share premium account 37,414 37,414
Merger reserve (41,682) (41,682)
Share based payment reserve 1,105 1,105
Other reserve 1,188 1,188
Accumulated losses (8,687) (8,224)
Currency translation reserve (48) 3
---------------------------------------------- ------------- -------------
(2,794) (2,280)
Non-controlling interest (197) (193)
---------------------------------------------- ------------- -------------
Total equity (2,991) (2,473)
---------------------------------------------- ------------- -------------
Consolidated statement of changes in equity
Year ended 31 December 2017
Share Attributed
Ordinary Deferred based Accu- to owners Non-
share share Share Merger payment Other mulated Translation of the controlling
capital capital premium reserve reserve reserve losses reserve parent interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
At 1 January
2016 1,748 6,168 37,414 (41,682) 1,105 912 (7,792) 52 (2,075) (171) (2,246)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
Loss for the
year - - - - - - (432) - (432) (13) (445)
Currency
translation
differences
arising on
translation
of
foreign
operations - - - - - - - (49) (49) (9) (58)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
Total
comprehensive
loss - - - - - - (432) (49) (481) (22) (503)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
Contribution
from
related party - - - - - 276 - - 276 - 276
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
At 31 December
2016 &
1 January
2017 1,748 6,168 37,414 (41,682) 1,105 1,188 (8,224) 3 (2,280) (193) (2,473)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
Loss for the
year - - - - - - (463) - (463) (21) (484)
Currency
translation
differences
arising on
translation
of
foreign
operations - - - - - - - (51) (51) 17 (34)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
Total
comprehensive
loss - - - - - - (463) (51) (514) (4) (518)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
At 31 December
2017 1,748 6,168 37,414 (41,682) 1,105 1,188 (8,687) (48) (2,794) (197) (2,991)
-------------- -------- -------- ------- -------- ------- ------- ------- ----------- ---------- ----------- --------
Ordinary share capital: Amount subscribed for share capital at
nominal value.
Deferred shares: The shares carry no right to receive income
distributions or entitle the shareholders to attend or vote at
company meetings. Share premium: Amount subscribed for share
capital in excess of nominal value.
Merger reserve: Represents the amount arising on the acquisition
of KRMC.
Share based payment reserve: This relates to an adjustment
required under IFRS 2 to account for the reverse takeover.
Other reserve: The premium between the effective interest rate
and coupon rate on the loan issued by a shareholder related
party.
Accumulated losses: Cumulative losses recognised in the
consolidated statement of comprehensive income. Translation
reserve: Gains/losses arising on retranslating the net assets of
overseas operations into sterling.
The accompanying notes are an integral part of these Company
financial statements.
Consolidated statement of cash flows
Year ended 31 December 2017
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
-------------------------------------------- ------------- -------------
Net cash outflow from operating activities (46) (247)
--------------------------------------------- ------------- -------------
Investing activities
Exploration costs (5) -
-------------------------------------------- ------------- -------------
Net cash used in investing activities (5) (1)
--------------------------------------------- ------------- -------------
Financing activities
Repayment of borrowings - (1)
Advances of borrowings 8 (1)
--------------------------------------------- ------------- -------------
Net cash inflow from financing activities 8 (1)
--------------------------------------------- ------------- -------------
Decrease in cash and cash equivalents (43) (248)
Cash and cash equivalents at the beginning
of period 59 307
--------------------------------------------- ------------- -------------
Cash and cash equivalents at the end of
period 16 59
--------------------------------------------- ------------- -------------
Notes
1. General Information
The Group's principal activity is that of mining, exploration
and mine development. The parent company principal activity is
managing the trade and the investment of its subsidiary company. It
is incorporated in England and Wales and has its registered office
and business address at 28 Eccleston Square, London, SW1V 1NZ. The
shares of Kemin Resources Plc are quoted on the AIM market which is
operated by the London Stock Exchange.
2. Basis of preparation
The Group's consolidated financial statements are for the year
ended 31 December 2017. They have been prepared in accordance with
the accounting policies set out below.
The Group prepares its consolidated financial statements in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The consolidated financial statements have been prepared under
the historical cost basis, except for the treatment of certain
financial instruments. They are presented in Pounds Sterling which
is the functional currency of the parent, the functional currency
of the subsidiary is the Kazakh Tenge and the figures are rounded
to the nearest thousand (GBP'000) except where otherwise noted.
The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires Group management to exercise judgment
in applying the Group's accounting policies. The areas where
significant judgments are estimates have been made in preparing the
financial statements and their effect are disclosed in note 2.
3. Going concern
The Group's principal assets are the molybdenum and tungsten
deposits at Drozhilovskoye and Smirnovskoye in Kazakhstan. The
exploration and evaluation work conducted so far indicate
substantial economic exploitable reserves. This work was further
enhanced by additional drilling in Q1 2018, which revealed the
presence of significant amounts of Lithium.
At current and projected future projected prices of the
commodities the indicative NPV is positive.
There has been significant interest, in particular from a
Chinese based Company, with a view to finalising an offtake
agreement for purchasing an initial trial batch. Subject to
sourcing additional funding the Company is in the process of
developing plans to put in place a pilot plant, with the intention
to move forward to commercial production after an assessment of the
initial production results.
As at 31 December 2017, the Group had cash on hand of GBP16,000
(2016: GBP59,000) and at the reporting date the Group's liabilities
exceeded its assets by GBP2,991,000 (2016: GBP2,473,000).
The parent Company has an agreement with Amrita Investment
Limited, a company incorporated in the British Virgin Islands and
ultimately controlled by the Assaubayev family, under this
facility, there is an amount of approximately GBP4.5m available to
be applied towards working capital requirements.
The initial loan of GBP7m was entered into on 4 February 2013
and was repayable on the earlier of the fifth anniversary of the
agreement or when an equity fundraising is undertaken that raises
at least GBP5,000,000 (before expenses) at which point the Lender
may choose to convert the loan into the ordinary shares of the
Company at the conversion rates stipulated by the agreement. The
loan was extended in May 2018 to 4 February 2020, under the same
terms and conditions of the original loan.
The Directors anticipate that while they may seek to raise
further finance in the future it now has access to sufficient funds
for its immediate need, and have therefore prepared these financial
statements on a going concern basis.
4. Intangible assets
Contract Contract
No. 1605 No. 1606 Total
Exploration & evaluation assets GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ---------
Cost
At 1 January 2016 544 1,526 2,070
Exchange difference 123 346 469
-------------------------------------- ---------- ---------- ---------
At 31 December 2016 & 1 January 2017 667 1,872 2,539
-------------------------------------- ---------- ---------- ---------
Additions 5 - 5
Exchange difference (56) (174) (230)
-------------------------------------- ---------- ---------- ---------
At 31 December 2017 616 1,698 2,314
-------------------------------------- ---------- ---------- ---------
Exploration and evaluation assets relate to the capitalised
licence costs and subsequent exploration expenditure incurred in
respect of the Smirnovskoye deposit (licence No. 1605) and the
Drozhilovskoye deposit (licence No. 1606) awarded to KRMC in
December 2004 for the exploration and production of tungsten,
molybdenum and copper.
Licence No. 1605: The exploration subsoil contract is approved
until September 2019.
Licence No. 1606: The exploration subsoil contract has expired
in May 2017. The Group has applied for the extension of the
exploration contract. According to the underlying contract the
Group has a legal right to extend the exploration contract for a
period not exceeding 2 years, it is awaiting approval from the
relevant government authorities. The licence will run from the date
of renewal for two years.
The Group suspended exploration work during the period pending
agreement on the renewal of license 1606. However in Q1 2018
drilling was undertaken at Drozhilovskoye in order to obtain
mineral samples for analysis and testing. There have been some
breaches of contract terms as a result. However the renewal of
license 1606 is expected to received shortly and the Group
anticipates at that time it will either remedy the non-compliance
or that these will be superseded by revised terms.
Both deposits are located in Kostanay region of Kazakhstan.
5. Events after the reporting date
There are no events to note after the reporting date.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FKDDPQBKDBAK
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June 04, 2018 02:00 ET (06:00 GMT)
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