TIDMAMC
RNS Number : 4342R
Amur Minerals Corporation
29 June 2015
29 June 2015 AMUR MINERALS CORPORATION
("Amur" or the "Company")
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
CHAIRMAN'S STATEMENT
It is with pleasure that I take this opportunity to update the
shareholders of Amur Minerals Corporation on the financial year
ended 31 December 2014, a year in which, we forged the foundation
for a new and dynamic AMC. Efforts made in 2014 were critical in
transforming the Company and leading to the two major milestones in
early 2015. These early 2015 milestones include the issue and
registration of the 20 year "Detailed Exploration and Production
Licence" (the "Production Licence") and the compilation of a
"Preliminary Economic Assessment" (the "PEA") from which future
activities can be defined, leading to the production decision and
ultimate development of Kun-Manie. Presently, Kun-Manie, located in
the Far East of Russia, is ranked among the 20 largest nickel
copper sulphide projects in the world. Substantial exploration
potential remains providing the opportunity to advance further up
the world rankings. The key milestones derived from work during
2014 were as follows:
-- The Production Licence was issued to our wholly owned
subsidiary (ZAO Kun-Manie). The terms and conditions of the
Production Licence allow the Company to recover all revenues from
100% of the mined metal that specifically includes nickel, copper,
cobalt, platinum, palladium, gold and silver. It is noted that the
project is a deposit of federal strategic significance.
-- The issuance of the Company-compiled PEA was significant as
it establishes a current technical and economic assessment
correlative to the terms and conditions of the Production Licence.
It provides technical and financial benchmarks from which a
long-term plan will be defined. The plan will cover further
exploration, engineering, development and operational
considerations for this proposed large-scale bulk mineable
operation. Presently, the unaudited results of the PEA indicate the
operation could rank AMC among the mid-tier to major international
nickel sulphide producers.
The Company has also been active in a broad realm of areas about
which I am also pleased to report in the following sections.
Production Licence
The Production Licence was approved in May 2015 and registered
with the State Geological Fund in early June 2015. The Production
Licence expires on 1 July 2035 and can be extended should
additional reserves prolong the profitable mine life be discovered.
Since the year end, the Company has also paid the Russian
Federation the amount of 23.6 million Roubles as a one-time payment
for the acquisition of 100% of the production rights.
Preliminary Economic Assessment
The design of the proposed Kun-Manie operation and its economic
potential were re-assessed using all available information and the
terms and conditions of the Production Licence. While the
Production Licence was under the approval process, our
internationally experienced engineering management developed a long
term operational plan matched to the terms and conditions of the
licence. This resulted in a substantial update to the 2007
Pre-Feasibility Study ("PFS") compiled by SRK Consulting Ltd
("SRK"), which allows the Company to develop an implementation
strategy to reach a production decision. Preliminary unaudited
Company results indicate that the potential Net Present Value
("NPV", discounted at 10%) of the new 15 year production design
ranges from US$709 million (at US$7.50 per pound for nickel) to
$US1.436 billion (US$9.50 per pound for nickel).
Vertically-integrated operations will cover construction, mining,
processing and smelting of the Kun-Manie sulphide ores. The initial
capital cost estimate is projected to be in the order of US$1.38
billion with an additional sustaining capital requirement of US$475
million over the 15 year life.
Additional Accomplishments
Given the two transformational milestones achieved during 2014,
the Company was also active on other fronts. Using a minimal
expenditure cost approach, the Company focused on completing tasks
intended to shorten the lead time on efforts that ultimately lead
to a production decision. These included:
-- The Company is ready and capable to complete 6,000 metres of
drilling. The award of the Production Licence triggered our
preparations for mobilisation of our drill crews for an infill
drill programme at Flangovy where Inferred resources will be
converted to Indicated resources, a necessity to obtaining future
bankability.
-- On award of a Production Licence, most companies initiate
preparation of the mandatory detailed exploration and preliminary
development programme referred to as the Project (Proyect).
Typically, this can take up to a year to complete including local
expert approvals. Only after the approval is obtained can field
activities be resumed. Proactively, our team compiled the necessary
documentation in advance of the Production Licence award and are
working with the local expert committee for review and approval. By
having completed the programme in advance and with only the
approval remaining, the Company should succeed in conducting a full
seasonal drill programme, targeting infill drill efforts at
Kun-Manie. The Company plans to drill up to 6,000 metres this field
season, ending in early November, weather permitting.
-- The next phase of metallurgical test work was established.
The programme includes testing of specifically drilled
metallurgical core holes from Flangovy and Kubuk. In addition, a
series of samples will be tested to determine the metallurgical
recoveries at various nickel grade intervals for both Flangovy and
Kubuk. These samples, located in the Company's Khabarovsk core
storage facility, will establish the variability of the recoveries
as the mined grade varies in the delivered ore to the processing
plant. Samples will shortly be shipped to an independent
metallurgical laboratory.
-- The proposed operation will require a substantial volume of
both industrial and potable water. In late 2014, the Company
identified an area from which to source the necessary water
requirements and applied for the rights to evaluate and develop the
area in support of the proposed operation. The rights to the 112 km
square area were granted on 7 May 2015. Typically, this is done
later in the project assessment life. A work programme is under
development to establish a development plan.
Financial Considerations
Financially, as reported in our yearly financial audit for the
period ending 31 December 2014, the Company is well positioned. Key
highlights include:
-- The Company remained debt free throughout 2014 with cash
reserves of US$1.389 million as at 31 December 2014.
-- During the year the Company received the remaining
settlements from the Lanstead Capital LLP (Lanstead) financing
agreement entered into during February 2012, totalling US$1.390
million. This brought this financing agreement to completion with
total receipts from all settlements of US$4.0 million.
-- In addition, the Company's financing agreement entered into
with Lanstead in July 2013 received 3 settlements with proceeds of
US$0.45 million during the year. The remaining settlements are
expected to provide proceeds of an additional US$7.381 million
(valued at the 31 December 2014 share price of 10.5p).
-- Subsequent to the year end, the Company's cash position has
continued to improve given that the Company's share price and
volume have more than doubled from 1 January 2015 to June 2015.
Lanstead have therefore made further settlements resulting in
substantial inflows, leaving an unaudited cash position for the
Group of US$ 6.0 million as at 17 June 2015.
Outlook
The Company has entered a new era with the Production Licence in
hand. Going forward, the Company's efforts will be focused on
generating data that will ultimately lead to the compilation of a
definitive feasibility study. Production and financing decisions
will stem from this Study. There is a great deal that remains to be
accomplished on such a large scale Kun Manie project. Infill
drilling at Flangovy and Kubuk will kick off this era. Additional
metallurgical test work is required to determine how ores will
respond to treatment at the plant and what final products will be
derived from a potential smelter. More infrastructure challenges
remain in the design and construction of an access road to the
site. It will be challenging but rewarding as results continue to
add to establishing one of the world's largest nickel
operations.
Development of the project will require time and focus, and it
was for this reason that the Company has proactively undertaken a
series of tasks that are not typically initiated until later in a
project's life, such as the acquisition of the water rights. The
year ahead should see continued news flow that will clarify and
refine the vision of the future operation. The Company has met the
challenges to this point and will continue to do so under the
direction of its Executive Management. The CEO and COO both have
worked in the pre-production and construction phases of project
development during assignments with Fluor Engineering, Kvarner
Aker, Washington Group, Davy, Minproc, Bechtel and other
engineering and production groups. Their combined experience
includes major large scale projects such as Bingham Canyon,
Porgera, and Olympic Dam.
Financially, existing funds will allow us to start the
preproduction assessment phase. The team will also continue to work
with financial institutions and assess potential partners as
opportunities are presented. This will include broadening the
geographical scope beyond Europe and the UK.
Lastly, the Company extends its appreciation and thanks to long
term shareholders that have supported the Company to this point and
into the future. Personally, I also wish to thank all parties that
have been a part of the team that has brought us to this
exhilarating point. Congratulations and thanks go to our dedicated
and skilled staff, the Russian authorities that were key to
processing the Production Licence, our contractors and the UK
support staff. Welcome to the next phase of development of the
Kun-Manie project and the set of challenges that will be offered
up.
Mr. Robert W. Schafer
Non Executive Chairman
26 June 2015
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals Corp. S.P. Angel Corporate Finance LLP Yellow Jersey
Robin Young CEO Ewan Leggat Dominic Barretto
Katy Birkin Kelsey Traynor
+44 (0) 7981 126 818 +44 (0) 20 3470 0470 +44 (0) 77 6853 7739
AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES
consolidated STATEMENT OF FINANCIAL POSITION
AS OF 31 DECEMBER 2014
(Amounts in '000s US Dollars)
31 December 31 December
2014 2013
NON-CURRENT ASSETS
Capitalised exploration
costs 11,783 18,318
Property, plant and equipment 252 637
Total non-current assets 12,035 18,955
------------- -------------
CURRENT ASSETS
Other receivables 83 188
Inventories 237 269
Derivative financial
asset 7,381 8,225
Cash and cash equivalents 1,389 2,392
Total current assets 9,090 11,074
------------- -------------
Total assets 21,125 30,029
============= =============
CURRENT LIABILITIES
Trade and other payables 407 123
Total current liabilities 407 123
------------- -------------
CAPITAL AND RESERVES ATTRIBUTABLE
TO OWNERS OF THE PARENT
Share capital 48,949 48,949
Share premium 6,473 6,473
Share options reserve 2,306 2,086
Retained deficit (25,163) (23,802)
Foreign currency translation
reserve (11,847) (3,800)
Total equity 20,718 29,906
------------- -------------
Total liabilities and
equity 21,125 30,029
============= =============
The financial statements were approved and authorised for issue
by the Board of Directors on 26 June 2015 and were signed on its
behalf by:
Robin Young Brian Savage
AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE income
FOR THE year ENDED 31 DECEMBER 2014
(Amounts in '000s US Dollars)
Year ended Year ended
31 December 31 December
2014 2013
------------ -------------------
Administrative expenses (2,358) (2,539)
Loss from operations (2,358) (2,539)
Finance expense (161) (1,141)
Fair value movement on derivative
financial assets 1,158 (151)
Loss before tax (1,361) (3,831)
Taxation - -
Loss for the year attributable
to owners of the parent (1,361) (3,831)
============ ===================
Other Comprehensive income:
Exchange differences on
translation of foreign operations (8,047) (1,362)
Other comprehensive income
for the year, net of tax (8,047) (1,362)
Total comprehensive income
for the year attributable
to owners of the parent (9,408) (5,193)
============ ===================
Loss per share: basic & US$(0.003) US$(0.009)
diluted
AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED sTATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2014
(Amounts in '000s US Dollars)
Year Year
ended ended
31 December 31 December
2014 2013
------------- -------------
Cash flow from operating activities:
Payments to suppliers and employees (1,960) (1,556)
Net cash used in operating activities (1,960) (1,556)
------------- -------------
Cash flow from investing activities:
Payments for property, plant and equipment - (70)
Payments for capitalised expenditure (748) (2,245)
Net cash used in investing activities (748) (2,315)
------------- -------------
Cash flow from financing activities:
Proceeds from issue of equity shares
(net of issue costs) - 1,832
Cash received from derivative financial
asset 1,841 2,410
Net cash from financing activities 1,841 4,242
------------- -------------
Net change in cash and cash equivalents (867) 371
Cash and cash equivalents at the beginning
of the year 2,392 2,048
Foreign exchange effects (136) (27)
Cash and cash equivalents at the end
of the year 1,389 2,392
============= =============
AMUR MINERALS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED Statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2014
(Amounts in '000s US Dollars)
Foreign Currency
Share Share Options Translation
Share capital premium account Reserve Retained deficit Reserve Total
--------------- ----------------- --------------- ---------------- ---------------- -------
Balance at 31
December 2012 40,902 6,613 1,256 (20,135) (2,438) 26,198
--------------- ----------------- --------------- ---------------- ---------------- -------
Loss for the year - - - (3,831) - (3,831)
Other
comprehensive
income for the
year - - - - (1,362) (1,362)
--------------- ----------------- --------------- ---------------- ---------------- -------
Total
comprehensive
income - - - (3,831) (1,362) (5,193)
Shares issued 8,047 - - - - 8,047
Share options
expired in the
period - - (164) 164 - -
Equity settled
share based
payments - - 871 - - 871
Equity settled
share based
payments
associated with
issue of shares - (123) 123 - - -
Costs associated
with issue of
share capital - (17) - - - (17)
Balance at 31
December 2013 48,949 6,473 2,086 (23,802) (3,800) 29,906
--------------- ----------------- --------------- ---------------- ---------------- -------
Loss for the year - - - (1,361) - (1,361)
Other
comprehensive
income for the
year - - - - (8,047) (8,047)
--------------- ----------------- --------------- ---------------- ---------------- -------
Total
comprehensive
income - - - (1,361) (8,047) (9,408)
Equity settled
share based
payments - - 344 - - 344
Equity settled
share based
payments
associated with
issue of shares - - (124) - - (124)
Balance as 31
December 2014 48,949 6,473 2,306 (25,163) (11,847) 20,718
=============== ================= =============== ================ ================ =======
1. Basis of prePARATION
a) Statement of compliance
The financial statements have been presented in thousands of
United States Dollars and prepared in accordance with International
Financial Reporting Standards as adopted by the European Union
(IFRS). The principal accounting policies adopted in the
preparation of the financial statements are set out in note 3 to
these financial statements. The policies have been consistently
applied to all the years presented, unless otherwise stated.
b) Going concern
These consolidated annual financial statements are prepared on a
going concern basis. The Group operates as a natural resources
exploration and development company. To date, the Group has not
earned significant revenues and is considered to be in the
exploration and development stage. The Directors anticipate that a
mining licence will eventually be granted for the Kun-Manie
deposit, but cannot estimate a date for commercial production to
commence.
The Directors have prepared a cash flow projection for period to
July 2016 which indicates that the Group is sufficiently funded by
its current financial resources, which comprise cash and derivative
financial assets, for the next 12 months. The Directors therefore
consider the Group to be a going concern and have prepared the
financial statements on that basis.
c) Profit/(Loss) per share
Basic and diluted loss per share are calculated and set out
below. The effects of warrants and share options outstanding at the
year ends are anti-dilutive and the total of 27.2 million (2013:
27.2 million) of potential ordinary shares have therefore been
excluded from the following calculations:
31 December 31 December
2014 2013
------------ ------------
Net loss for the year (1,361) (3,831)
Weighted average number of shares
used in the calculation of basic
loss per share 431,151,334 387,227,252
Basic and diluted loss per share US$(0.003) US$(0.009)
d) Events after the reporting date
Director and Executive Share Purchase
In January 2015 the Board of Directors, Executive staff and
other service providers opted to receive new shares in lieu of
compensation. A total of 3,035,955 new shares were issued at a
placing price of 10.25p. The Board members received a total of
682,422 new shares with the remainder being issued to professional
staff and certain service providers.
Mining Licence Award
In May 2015 the Company announced that Kun-Maine production
licence had been award. The licence would cover 36 square
kilometres and be valid until 1 July 2035.
Annual Accounts
Copies of the Group's Annual Accounts will be posted to the
shareholders today and are available for download from the
Company's website at www.amurminerals.com.
Notes to Editors
The information contained in this announcement has been reviewed
and approved by the CEO of Amur, Robin Young. Mr. Young is a
Geological Engineer (cum laude) and is a Qualified Professional
Geologist, as defined by the Toronto and Vancouver Stock
Exchanges.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) (www.jorc.org)
A 'Mineral Resource' is a concentration or occurrence of
material of intrinsic economic interest in or on the Earth's crust
in such form, quality and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge. Mineral Resources are
sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.
An 'Inferred Mineral Resource' is that part of a Mineral
Resource for which tonnage, grade and mineral content can be
estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes which may be limited or of uncertain
quality and reliability.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource
for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough
to confirm geological and/or grade continuity.
An 'Ore Reserve' is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials
and allowances for losses which may occur when the material is
mined. Appropriate assessments and studies have been carried out,
and include consideration of and modification by realistically
assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors. These assessments
demonstrate at the time of reporting that extraction could
reasonably be justified. Ore Reserves are sub-divided in order of
increasing confidence into Probable Ore Reserves and Proved Ore
Reserves.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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