TIDMFAR
RNS Number : 5258K
Ferro-Alloy Resources Limited
29 August 2019
Ferro-Alloy Resources Limited ("FAR" or "the Company" or "the
Group")
Interim Results for the six months ended 30 June 2019
Ferro-Alloy Resources Limited, the vanadium producer and
developer of the large Balasausqandiq vanadium deposit in Southern
Kazakhstan, announces its unaudited results for the six months
ended 30 June 2019.
Highlights:
-- Admitted to trading on the London Stock Exchange on 28 March 2019, raising $6.9m (GBP5.3m) before expenses
-- Continuous production maintained during major expansion and improvement work at the existing vanadium concentrate
processing operation ("Existing Operation")
-- 55% year-on-year increase in production at the Existing Operation; production of vanadium pentoxide in H1 2019
totalled 71.5 tonnes
-- Incremental improvements to the Existing Operation already increasing production; record monthly production of
vanadium pentoxide achieved in June 2019 of 17.6 tonnes
-- Completion of first batch of improvements to the Existing Operation targeted for the end of Q3 2019 resulting in
an anticipated significant increase in production in Q4 2019
-- Development continuing at the large Balasausqandiq Vanadium Project (the "Project"); which has a NPV of $2
billion at a long-term forecast vanadium pentoxide price of $7.50/lb
-- Upgrade of the local feasibility study on the Project continuing
For further information, visit www.ferro-alloy.com or
contact:
Ferro-Alloy Resources Nick Bridgen (CEO) info@ferro-alloy.com
Limited
Shore Capital
(Corporate Broker) Jerry Keen/Toby Gibbs +44 207 408 4090
St Brides Partners
Limited
(Financial PR & IR Catherine Leftley/Gaby
Adviser) Jenner +44 207 236 1177
Operations Review
The Existing Operation
Production at the Existing Operation was maintained throughout
H1 2019 with only minor interruptions in spite of significant
levels of capital development work being undertaken at the plant.
Installation of new equipment and the renovation of the existing
belt filter meant that plant availability averaged only 75% in the
period but despite this, overall production reached 71.5 tonnes,
representing a 55% increase to that achieved in the H1 2018.
Incremental expansion and improvement work already completed has
resulted in record production in June 2019 of 17.6 tonnes of
vanadium pentoxide.
The main work carried out in H1 to expand and improve production
at the Existing Operation included:
-- construction of a 990m2 extension to the plant facility;
-- installation of electrometallurgical and recrystallisation equipment;
-- construction of a 15,000m2 evaporation pond;
-- detailed engineering for the construction of a connecting line and transformer station to the adjacent 110 kV
power-line;
-- addition of substantial new equipment to increase capacity of existing production processes; and
-- construction of supporting worker accommodation
Equipment delivered to site during H1 2019 included:
-- a rotating pre-roasting furnace for the pre-roasting of concentrates;
-- a second main concentrate roasting oven;
-- a furnace for the decomposition of ammonium metavanadate ("AMV") into vanadium pentoxide;
-- three new 16 cubic meters tanks with cooling systems for increasing the capacity for sedimentation of AMV;
-- two new 16 cubic metre tanks with steam heating for the leaching with sodium carbonate of vanadium concentrates;
-- a new 16 cubic metre tank for the preliminary leaching of roasted vanadium concentrates; and
-- a new press-filter
Outlook for the Existing Operation
Whilst record production has already been reported as a result
of recent improvement work, the most significant increases are
expected to come in Q4 2019.
Completion of the process plant building expansion and
installation and commissioning of the first phase of new equipment
is targeted at the end of Q3 2019 resulting in an increase in
name-plate capacity to over 50 tonnes of vanadium pentoxide per
month, over four times higher than the average for H1 2019.
However, operations are likely to be impacted by unreliability of
the current power supply until the connection is made to a new high
voltage power line, expected around the end of Q1 2020.
The new equipment includes a dissociation oven which will enable
the Company to produce vanadium pentoxide powder and eliminate the
discount which applies to the current production of AMV. Work is
progressing on the second part of the capital programme which is
expected to further increase production later in 2020.
Balasausqandiq
Development of the large Balasausqandiq vanadium deposit is
on-going in parallel with the Existing Operation.
Balasausquandiq has a significant advantage when compared to
most other vanadium deposits and producers in that the ore is not
vanadiferous titano-magnetite ("VTM") and therefore does not
require the expensive concentrating and high temperature roasting
which VTM requires. This reduces both capital and operating costs
by about 60% and is likely to make the Group the lowest cost
primary producer. The proposed development is planned in two phases
to produce up to 22,400 tonnes per year of vanadium pentoxide
which, at a long-term price assumption of $7.50/lb of vanadium
pentoxide, will result in a Net Present Value (at 10% discount
rate) of over $2 billion.
The Company has previously completed a feasibility study to
locally required standards, supplemented by a western-style JORC
reserve and resource estimate and the construction and operation of
a 15,000 tpy pilot plant which has also proved the feasibility of
the proposed process. A completed gap analysis has highlighted
relatively small areas where further work is required to meet the
standards of a typical western banking feasibility study. This will
be carried out simultaneously with the already-planned confirmatory
work to test the potential of using simpler vertical autoclaves
instead of the more complex and expensive horizontal autoclaves
that the pilot plant operation has indicated are not required.
Corporate
On 28 March 2019 the Company was admitted to listing on the
London Stock Exchange.
On 25(th) of July 2019 Ferro-Alloy Resources Limited appointed
Shore Capital to act as Corporate Broker.
Vanadium prices in the period
Prices of vanadium pentoxide have been volatile in the reporting
period, starting the year at around US$16/lb before falling to
around US$7/lb by the end of the H1 reporting period. The fall in
vanadium prices from the high levels experienced in 2018 was
expected by the industry, although the timing was more sudden than
had been forecast. As a result of industry trading practices and
the application of the Company's accounting policies, the fall in
price has resulted in certain charges to profit in the year that
are not expected to recur.
During the period the Group procured certain raw materials at
prices based on the prevailing spot vanadium prices and, as these
materials can take several months for delivery and processing,
these were purchased at higher prices than those prevailing when
the end product was sold, having the effect of reducing trading
profits during periods of falling prices.
Furthermore, as is the norm in the industry, revenue, and the
corresponding trade receivable are recognised at the time of
transfer of control of products to the customer, but the final
pricing determination is based on assay and prices around the time
of arrival of the goods at the port of destination which can be
several months later. Therefore, receivables relating to shipments
made in Q4 2018 which had been valued at fair value based on the
price prevailing at the end of 2018, realised less than the
carrying value. The loss, together with the fair value adjustments
to further sales made in H1, is included in note 2 as Other
Revenues.
In accordance with the Company's accounting policy, shipments
made in H1 2019, which had not yet been assayed and priced at
destination by the end of the period, have been valued on the basis
of the price prevailing as at 30 June 2019 of around $7/lb.
Vanadium prices are now very close to the level that the Company
expects in the long-term, so the directors do not anticipate
further significant falls or increases. However, there is
uncertainty over the extent of future Chinese enforcement of new
steel standards which might increase demand and price volatility.
Stable prices will lessen the accounting effects detailed above and
as production rises in Q4 2019 and the Company starts to produce
vanadium pentoxide instead of AMV, it is expected that
profitability will be very much enhanced.
Earnings and cash flow
The Group generated revenues of US$1.1m for the period compared
to US$1.7m for the first six months of 2018, reflecting the falling
market prices and the negative Other Revenue detailed above and
below. Cost of sales increased to US$1.3m from US$0.7m for the
first six months of 2018 reflecting the increased volumes and the
relatively high price at which raw materials were acquired.
Administrative expenses of US$0.9m (H1 2018: US$0.6m) included
non-recurring listing costs of $0.3m, with the remainder
principally comprising employee costs, audit and professional
services, reflecting the higher costs associated with the Company
being listed on the London Stock Exchange.
The Group made a net loss before and after tax of US$1.3m (H1
2018: profit of US$0.3m).
Net cash outflows from operating activities totalled US$2.3m (H1
2018: US$0m) principally reflecting the decrease in selling prices.
Net cash outflows from investing activities included US$0.5m (H1
2018: US$0.2m) of capital expenditure associated with expanding the
processing operation. Net cash inflows from financing activities
totalled US$6.6m (H1 2018: US$0.2m) being the proceeds, net of
commissions, from the offer at the time of listing on the London
Stock Exchange.
Balance sheet review
Non-current assets increased to US$3.3m at 30 June 2019 (2018:
US$2.8m), reflecting the capital expenditure in existing
operations.
Current assets excluding cash balances increased to US$2.4m from
US$1.1m year before. The increase was driven by increases in
production resulting in higher inventories (US$1.6m from US$0.9m)
and an increase in prepayments (US$0.7m from US$0.1m)
The Group had cash of US$4.6m at 30 June 2019 (2018:
US$0.9m).
Description of principal risks, uncertainties and how they are
managed
Risks and uncertainties which the Group is facing are as set out
in the financial statements for the year ended 31 December 2019 in
the CEO's Report on Operations as published on 30 April 2019. In
addition, the timing and extent of the increase in production
anticipated in the fourth quarter of 2019 is uncertain because it
depends on the performance of sub-contractors and unforeseen
commissioning delay. Furthermore, until the connection to the new
power-line, expected around the end of the first quarter of 2020,
there may be interruptions to production outside the control of the
Company. Since the changes being made to the process plant are in
the nature of expansions and improvements to the existing processes
without any significant change in the style of equipment or
technology, the directors are confident that any such outcomes can
be relatively easily managed but recognises that some delay may be
possible.
Responsibility statements
Directors Responsibility Statement
We confirm that to the best of our knowledge:
a) the Condensed set of Interim Financial Statements has been
prepared in accordance with IAS 34 Interim Financial Reporting;
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year);
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related
partiestransactions and changes therein); and
d) the condensed set of interim financial statements, which has
been prepared in accordance with the applicable set of accounting
standards, gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the issuer, or the
undertakings included in the consolidation as a whole as required
by DTR 4.2.4R.
This Half Yearly Report has been approved by the Board and
signed on its behalf by:
James Turian
Director
29.08.2019
Condensed unaudited Consolidated Statement of Comprehensive
Income
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
Note $000 $000
------------- ------------------------
Revenue 2 1,108 1,661
Cost of sales 3 (1,323) (658)
------------- ------------------------
Gross (loss) profit (215) 1,003
Administrative expenses 4 (947) (604)
Distribution expenses (58) (42)
Other expenses (1) (1)
------------- ------------------------
(Loss) profit from operating
activities (1,221) 356
------------- ------------------------
Net finance income/(costs) 6 (89) (25)
------------- ------------------------
Profit (loss) before income
tax (1,310) 331
============= ========================
Income tax - (1)
(Loss) profit for the period (1,310) 330
Other comprehensive (loss)
income
Items that may be reclassified
to profit or loss
Exchange differences arising
on translation of foreign
operations 9 11
------------- ------------------------
Total comprehensive (loss)
income for the period (1,301) 341
============= ========================
(Loss)/earnings/per share
(basic and diluted), US$ 14 (0.004) 0.001
------------- ------------------------
Condensed unaudited Consolidated Statement of Financial
Position
Unaudited
31 December
30 June 2019 2018
Note $000 $000
-------------- -----------
ASSETS
Non-current assets
Property, plant and equipment 7 2,515 2,203
Exploration and evaluation
assets 8 60 59
Intangible assets 9 25 25
Long-term VAT receivable 11 429 237
Prepayments 12 251 249
Total non-current assets 3,280 2,773
-------------- -----------
Current assets
Inventories 10 1,616 929
Trade and other receivables 11 56 38
Prepayments 12 686 91
Cash and cash equivalents 13 4,623 892
Total current assets 6,981 1,950
-------------- -----------
Total assets 10,261 4,723
============== ===========
EQUITY AND LIABILITIES
Equity
Share capital 14 33,978 27,330
Additional paid-in capital 397 380
Foreign currency translation
reserve (2,956) (2,965)
Accumulated losses (22,585) (21,275)
-------------- -----------
Total equity 8,834 3,470
-------------- -----------
Non-current liabilities
Provisions 60 60
Total non-current liabilities 60 60
-------------- -----------
Current liabilities
Trade and other payables 16 1,011 929
Contract liability 15 356 264
-------------- -----------
Total current liabilities 1,367 1,193
-------------- -----------
Total liabilities 1,427 1,253
-------------- -----------
Total equity and liabilities 10,261 4,723
============== ===========
Condensed unaudited Consolidated Statement of Changes in
Equity
Additional Foreign currency
Share Share paid in capital translation Accumulated
capital premium $000 reserve losses Total
$000 $000 $000 $000 $000
-------- ---------- ---------------- ---------------- ------------------ -------
Balance at 1 January
2018 15 26,904 380 (2,672) (24,238) 389
Profit for the period - - - - 330 330
Other comprehensive
income
Exchange differences
arising on
translation
of foreign
operations - - - 11 - 11
-------- ---------- ---------------- ---------------- ------------------ -------
Total comprehensive
income (loss)
for the period - - - 11 330 341
-------- ---------- ---------------- ---------------- ------------------ -------
Transactions with
owners, recorded
directly in equity
Shares issued - 181 - - - 181
Balance at 30 June
2018 15 27,085 380 (2,661) (23,908) 911
======== ========== ================ ================ ================== =======
Balance at 1 January
2019 27,330 - 380 (2,965) (21,275) 3,470
Loss for the period - - - - (1,310) (1,310)
Other comprehensive
expense
Exchange differences
arising on
translation
of foreign
operations - - - 9 - 9
-------- ---------- ---------------- ---------------- ------------------ -------
Total comprehensive
income (loss)
for the period - - - 9 (1,310) (1,301)
-------- ---------- ---------------- ---------------- ------------------ -------
Transactions with
owners, recorded
directly in equity
Shares issued (note
14) 6,648 - - - - 6,648
Other transactions
recognised directly
in equity (note 14) - - 17 - - 17
-------- ---------- ---------------- ---------------- ------------------ -------
Balance at 30 June
2019 33,978 - 397 (2,956) (22,585) 8,834
======== ========== ================ ================ ================== =======
Condensed unaudited Consolidated Statement
of Cash Flow
------------- -------------
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Cash flows from operating activities
(Loss) income for the period (1,310) 331
Adjustments for:
Depreciation and amortisation 257 18
Loss on write-off of property, plant and
equipment - 15
Expenses on credit loss provisions and impairment
of prepayments 21 -
Income tax - (1)
Net finance costs / (income) 89 25
Cash from operating activities before changes
in working capital (943) 388
Change in inventories (680) (3)
Change in trade and other receivables (231) (416)
Change in prepayments (595) (31)
Change in trade and other payables 82 116
Change in contract liability 92 -
------------- -------------
Net cash from operating activities (2,275) 54
------------- -------------
Cash flows from investing activities
Acquisition of property, plant and equipment (519) (169)
Net cash used in investing activities (519) (169)
------------- -------------
Cash flows from financing activities
Proceeds from issue of share capital 6,880 181
Transaction costs on shares subscription (232) -
Net cash from financing activities 6,648 181
------------- -------------
Net increase in cash and cash equivalents 3,854 66
Cash and cash equivalents at the beginning
of the period 892 267
------------- -------------
Effect of movements in exchange rates on
cash and cash equivalents (123) (24)
------------- -------------
Cash and cash equivalents at the end of
the period 4,623 309
============= =============
Unaudited notes to the Financial Statements for the 6 months
period ended 30 June 2019
1 Basis of preparation
These Condensed Unaudited Financial Statements have been
prepared in accordance with IAS34 Interim Financial Reporting. The
same accounting policies and basis of preparation have been
followed as in the annual financial statements of the Group which
were published in 30 April 2019.
The consolidated financial statements are prepared in accordance
with IFRS on a going concern basis. The Directors have reviewed the
Group's cash flow forecasts for at least 12 months following the
reporting date, including sensitivities and mitigating actions.
After taking into account available cash and forecast cash flow
from operations, the Directors consider that the Group has adequate
resources to continue its operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
These Condensed Unaudited Financial Statements have not been
approved or reviewed by the Corporate Auditor.
IFRS 16, Leases, has been applied for the first time but its
impact is not material.
2 Revenue
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Revenue from sales of vanadium
products 1,972 1,661
Sales of gravel and waste rock 1 -
Total revenue from customers 1,973 1,661
------------- -------------
Other revenues Ð change in
fair value of customer contract (865) -
============= =============
1,108 1,661
============= =============
Vanadium products
Under certain sales contracts the single performance obligation
is the delivery of AMV to the designated delivery point at which
point possession, title and risk on the product transfers to the
buyer. The buyer makes an initial provisional payment based on
volumes and quantities assessed by the Company and market spot
prices at the date of shipment. The final payment is received once
the product has reached its final destination with adjustments for
quality / quantity and pricing. The final pricing is based on the
historical average market prices during a quotation period based on
the date the product reaches the port of destination and an
adjusting payment or receipt will be made to the initially received
revenue. Where the final payment for a shipment made prior to the
end of an accounting period has not been determined before the end
of that period, the revenue is recognised based on the spot price
that prevails at the end of the accounting period, with adjustments
for the value of money and the carry costs where significant.
Other revenue related to the change in the fair value of amounts
receivable under the sales contracts between the date of initial
recognition and year end resulting from market prices are recorded
as other revenue. Refer to note 17 for details of contract
liabilities recorded at fair value.
3 Cost of sales
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Materials 753 360
Wages, salaries and related taxes 257 219
Depreciation 244 22
Electricity 58 37
Other 11 20
------------- -------------
1,323 658
============= =============
4 Administrative expenses
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Wages, salaries and related taxes 422 391
Listing & reorganisation expenses 336 105
Audit 61 -
Professional services 43 17
Materials 24 22
Business trip expenses 15 13
Depreciation and amortization 13 6
Security 8 9
Communication and information services 3 3
Bank fees 2 4
Other 20 34
------------- -------------
947 604
============= =============
5 Personnel costs
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Wages, salaries and related taxes 639 584
-------------
639 584
============= =============
6 Finance costs
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Net foreign exchange costs 89 25
Net finance costs/(income) 89 25
============= =============
7 Property, plant and equipment
Plant and Construction
Land and buildings equipment Vehicles Computers Other in progress Total
$000 $000 $000 $000 $000 $000 $000
------------------ ---------- -------- --------- ----- ------------ -------
Cost
Balance at 1 January
2018 1,853 2,015 364 13 42 202 4,489
Additions 9 131 123 13 47 350 673
Disposals - (27) - - (4) (17) (48)
Foreign currency
translation
difference (251) (283) (61) (3) (10) (61) (669)
------------------ ---------- -------- --------- ----- ------------ -------
Balance at 31 December
2018 1,611 1,836 426 23 75 474 4,445
================== ========== ======== ========= ===== ============ =======
Balance at 1 January
2019 1,611 1,836 426 23 75 474 4,445
Additions 63 200 155 14 17 70 519
Transfers - 181 - - - (181) -
Foreign currency
translation
difference 14 16 3 1 2 5 41
------------------ ---------- -------- --------- ----- ------------ -------
Balance at 30 June 2019 1,688 2,233 584 38 94 368 5,005
================== ========== ======== ========= ===== ============ =======
Depreciation
Balance at 1 January
2018 1,853 2,015 295 13 32 202 4,410
Depreciation for the
period - 10 29 1 5 - 45
Disposals - (27) - - - - (27)
Reversal of impairment (1,022) (393) - - - (175) (1,590)
Foreign currency
translation
difference (250) (270) (42) (2) (5) (27) (596)
------------------ ---------- -------- --------- ----- ------------ -------
Balance at 31 December
2018 581 1,335 282 12 32 - 2,242
================== ========== ======== ========= ===== ============ =======
Balance at 1 January
2019 581 1,335 282 12 32 - 2,242
Depreciation for the
period 28 171 22 2 4 - 227
Transfers - - - - - - -
Foreign currency
translation
difference 5 13 3 1 (1) - 21
------------------ ---------- -------- --------- ----- ------------ -------
Balance at 30 June 2019 614 1,519 307 15 35 - 2,490
================== ========== ======== ========= ===== ============ =======
Carrying amounts
At 1 January 2018 - - 69 - 10 - 79
================== ========== ======== ========= ===== ============ =======
At 31 December 2018 1,030 501 144 11 43 474 2,203
================== ========== ======== ========= ===== ============ =======
At 30 June 2019 1,074 714 277 23 59 368 2,515
================== ========== ======== ========= ===== ============ =======
.
8 Exploration and evaluation assets
The Group's exploration and evaluation assets relate to
Balasausqandiq deposit. During the six months period ended 30 June
2019 the Group did not capitalise any exploration and evaluation
assets (in 2018: US$nil). As at 30 June 2019 the carrying value of
exploration and evaluation assets was US$0.060m (2018:
US$0.059m).
9 Intangible assets
Mineral Computer
rights Patents software Total
$000 $000 $000 $000
-------- -------- ---------- ------
Cost
Balance at 1 January
2018 115 36 4 155
Additions - 2 - 2
Foreign currency translation
difference (16) (5) (1) (22)
-------- -------- ---------- ------
Balance at 31 December
2018 99 33 3 135
======== ======== ========== ======
Balance at 1 January
2019 99 33 3 135
Additions - - - -
Foreign currency translation
difference 1 1 - 2
-------- -------- ---------- ------
Balance at 30 June 2019 100 34 3 137
======== ======== ========== ======
Amortisation
Balance at 1 January
2018 115 36 2 153
Amortisation for the
year - - 1 1
Reversal of impairment - (23) - (23)
Foreign currency translation
difference (16) (4) (1) (21)
-------- -------- ---------- ------
Balance at 31 December
2018 99 9 2 110
======== ======== ========== ======
Balance at 1 January
2019 99 9 2 110
Amortisation for the
year - 1 - 1
Foreign currency translation
difference 1 (1) 1 1
-------- -------- ---------- ------
Balance at 30 June 2019 100 9 3 112
======== ======== ========== ======
Carrying amounts
At 1 January 2018 - - 2 2
======== ======== ========== ======
At 31 December 2018 - 25 - 25
======== ======== ========== ======
At 30 June 2019 - 25 - 25
======== ======== ========== ======
10 Inventories
Unaudited
31 December
30 June 2019 2018
$000 $000
-------------- -----------
Raw materials and consumables 1,162 527
Finished goods 448 184
Goods in transit - 218
Work in progress 6 -
1,616 929
============== ===========
11 Trade and other receivables
Unaudited 31 December
Non-current 30 June 2019 2018
$000 $000
------------- -----------
VAT receivable 789 594
Provision for VAT receivable (360) (357)
429 237
============= ===========
Unaudited 31 December
Current 30 June 2019 2018
$000 $000
------------- -----------
Trade receivables from third
parties 26 21
Due from employees - 24
Other receivables 51 14
------------- -----------
77 59
Expected credit loss provision (21) (21)
-------------
56 38
============= ===========
The expected credit loss provision relates to credit impaired
receivables which are in default and the Group considers the
probability of collection to be remote given the age of the
receivable and default status.
12 Prepayments
Unaudited
31 December
30 June 2019 2018
$000 $000
-------------- -----------
Non-current
Prepayments for equipment 251 249
-------------- -----------
251 249
============== ===========
Current
Prepayments for goods and services 686 91
-------------- -----------
686 91
============== ===========
13 Cash and cash equivalents
Unaudited
31 December
30 June 2019 2018
$000 $000
-------------- -----------
Bank balances and other cash
deposits 4,623 885
Petty cash - 7
Cash and cash equivalents 4,623 892
============== ===========
14 Equity
(a) Share capital
Number of shares unless otherwise stated Ordinary shares
Unaudited 31 December
30 June 2019 2018
------------- -----------
Par value - -
Outstanding at beginning of
year 305,471,087 1,523,732
Shares issued prior to share
split - 1,493
Share reorganisation (split) - 305,045,000
Shares issued post share split 7,507,761 426,087
-------------
Outstanding at end of year 312,978,848 305,471,087
============= ===========
Ordinary shares
All shares rank equally. The holders of ordinary shares are
entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company.
In July 2018 the Company's shareholders voted by ordinary
resolution to subdivide each share into 200 new shares of no par
value so that the listed shares will be of a value within the
normal range for listing companies. As a result, the share premium
was transferred to share capital in 2018.
Reserves
Share capital: Value of shares issued less costs of issuance.
Prior to the share restructuring share capital related to the
nominal value of shares issued.
Additional paid in capital: Amounts due to shareholders which
were waived.
Foreign currency translation reserve: Foreign currency
differences on retranslation of results from functional to
presentational currency and foreign exchange movements on
intercompany balances considered to represent net investments which
are permanent as equity.
Accumulated losses: Cumulative net losses.
(b) Dividends
No dividends were declared for the six-month period ended 30
June 2019.
(c) (Loss) earnings per share (basic and diluted)
The calculation of basic and diluted earnings / (loss) per share
has been based on the following (loss) profit attributable to
ordinary shareholders and weighted-average number of ordinary
shares outstanding.
(i) (Loss) profit attributable to ordinary shareholders (basic and diluted)
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
(Loss) profit for the year, attributable
to owners of the Company (1,310) 330
------------- -------------
(Loss) profit attributable to ordinary
shareholders (1,310) 330
============= =============
(ii) Weighted-average number of ordinary shares (basic and diluted)
Unaudited
Unaudited six-month
six-month period ended
period ended 30 June 2018
Shares 30 June 2019 Restated
------------- -------------
Issued ordinary shares at 1 January
(after subdivision) 305,471,087 304,746,400
Effect of shares issued (weighted) 5,718,240 101,000
Weighted-average number of ordinary
shares at
30 June 311,189,327 304,847,400
============= =============
(Loss) earnings per share of common
stock attributable to the Company
(basic and diluted) (0.004) 0.001
------------- -------------
The 2018 comparative has been revised to reflect the share split
as if it had occurred on 1 January 2018 for comparability purposes.
There are no significant dilutive or potentially dilutive
instruments.
15 Loans and borrowings
There were no outstanding loans at 30 June 2019 (31 December
2018: US$nil) and no borrowings or loan repayments in the six month
period ended 30 June 2019 (in 2018: the borrowing was US$ nil).
16 Trade and other payables
Unaudited
31 December
30 June 2019 2018
$000 $000
-------------- -----------
Trade payables 594 302
Advances received 159 5
Due to directors/key management 146 547
Due to employees 57 44
Other taxes 55 31
1,011 929
============== ===========
17 Contract liability (trade and other payables at FVPL)
Unaudited
31 December
30 June 2019 2018
$000 $000
-------------- -----------
Contract liability (trade and other
payables at FVPL) 356 264
356 264
============== ===========
18 Contingencies
(a) Insurance
The insurance industry in the Kazakhstan is in a developing
state and many forms of insurance protection common in other parts
of the world are not yet generally or economically available. The
Group does not have full coverage for its plant facilities,
business interruption, or third party liability in respect of
property or environmental damage arising from accidents on Group
property or relating to Group operations. There is a risk that the
loss or destruction of certain assets could have a material adverse
effect on the GroupÕs operations and financial position.
(b) Taxation contingencies
The taxation system in Kazakhstan is relatively new and is
characterised by frequent changes in legislation, official
pronouncements and court decisions which are often unclear,
contradictory and subject to varying interpretations by different
tax authorities. Taxes are subject to review and investigation by
various levels of authorities which have the authority to impose
severe fines, penalties and interest charges. A tax year generally
remains open for review by the tax authorities for five subsequent
calendar years but under certain circumstances a tax year may
remain open longer.
These circumstances may create tax risks in Kazakhstan that are
more significant than in other countries. Management believes that
it has provided adequately for tax liabilities based on its
interpretations of applicable tax legislation, official
pronouncements and court decisions. However, the interpretations of
the relevant authorities could differ and the effect on these
consolidated financial statements, if the authorities were
successful in enforcing their interpretations, could be
significant.
There are no tax claims or disputes at present.
19 Segment reporting
The Group's operations are split into three segments based on
the nature of operations: processing, subsoil operations (being
operations related to exploration and mining) and corporate segment
for the purposes of IFRS 8 Operating Segments. The GroupÕs assets
are primarily concentrated in the Republic of Kazakhstan and the
GroupÕs revenues are derived from operations in, and connected
with, the Republic of Kazakhstan.
Unaudited six-month
period ended 30 June
2019
Processing Subsoil Corporate Total
$000 $000 $000 $000
---------- ------- --------- -------
Revenue 1,108 - - 1,108
Cost of sales (1,323) - - (1,323)
Administrative expenses (278) (14) (656) (1,271)
Distribution & other
expenses (59) - - (59)
Finance costs 9 - (98) (89)
(Loss)/Profit before
tax (543) (14) (753) (1,310)
========== ======= ========= =======
Unaudited six-month
period ended 30 June
2018
Processing Subsoil Corporate Total
$000 $000 $000 $000
---------- ------- --------- -------
Revenue 1,661 - - 1,661
Cost of sales (658) - - (658)
Administrative expenses (229) (20) (355) (604)
Distribution & other
expenses (43) - - (43)
Finance costs 1 - (26) (25)
---------- ------- --------- -------
Profit before tax 732 (20) (381) 331
========== ======= ========= =======
20 Related party transactions
(a) Transactions with management and close family members
Management remuneration
Key management personnel received the following remuneration
during the year, which is included in personnel costs (see Note
5):
Unaudited Unaudited
six-month six-month
period ended period ended
30 June 2019 30 June 2018
$000 $000
------------- -------------
Wages, salaries and related
taxes 190 178
------------- -------------
(b) Transactions with other related parties
There were no other related party transactions.
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
IR CKCDBPBKKCFB
(END) Dow Jones Newswires
August 29, 2019 02:01 ET (06:01 GMT)
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