TIDMMTL
RNS Number : 3485Z
Metals Exploration PLC
14 September 2022
METALS EXPLORATION PLC
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2022
Metals Exploration plc (AIM: MTL) ("Metals Exploration" or the
"Company"), the Philippine gold producer, announces its interim
results for the six months ended 30 June 2022, and will be made
available on the Company's website at www.metalsexploration.com
.
Highlights
-- Gold production of 31,348 ounces (H1 2021: 35,316 ounces);
-- Gold recoveries of 87.7% (H1 2021: 81.0%);
-- Operating profit of US$9.4 million achieved (H1 2021: US$14.2 million);
-- Positive cashflow from operations of US$17.0 million (H1 2021: US$21.3 million);
-- The Group's senior debt was US$8.1 million (H1 2021: US$42.4
million) - it is expected that the senior loan will be fully repaid
during Q4 2022.
-- Net Debt as at 30 June 2022 US$92.9 million (H1 2021: US$111.0 million);
-- Over 17 million man-hours since the last reported lost-time injury.
Production Summary
Runruno Project
------------------- ---------- -------------------
Production Summary Actual Actual Actual
------------------- ---------- -------------------
6 Months 6 Months 12 Months
to to to
30 June 30 June 31 December
Units 2022 2021 2021
--------- ----------
Mining
--------- ---------- -------------------
Ore Mined Tonnes 1,289,123 713,742 1,896,808
---------- ---------- -------------------
Waste Mined Tonnes 5,676,856 4,537,749 8,874,266
---------- ---------- -------------------
Total Mined Tonnes 6,965,979 5,251,491 10,771,074
---------- ---------- -------------------
Au Grade Mined g/tonne 1.10 1.27 1.21
---------- ---------- -------------------
Strip Ratio 4.28 5.92 4.43
---------- -------------------
Processing
--------- ---------- -------------------
Ore Milled Tonnes 1,017,258 1,048,290 2,136,875
---------- ---------- -------------------
Gold (Au) Grade g/tonne 1.09 1.29 1.26
---------- ---------- -------------------
Sulphur Grade % 0.98 1.11 0.97
---------- ---------- -------------------
Au Milled (contained) ounces 35,742 43,620 86,611
---------- ---------- -------------------
Recovery % 87.7 81.0 83.7
---------- ---------- -------------------
Au Poured ounces 31,348 35,316 73,206
---------- ---------- -------------------
Sales
--------- ---------- -------------------
Au Sold ounces 30,676 34,745 72,447
---------- ---------- -------------------
Au Price US$/oz 1,878 1,797 1,792
---------- ---------- -------------------
Review of Operations
Safety and health
The outstanding safety record of the operation continues with in
excess of 17 million man-hours with no lost time incidents
occurring since the last lost time incident in December 2016. All
employees and contractors are to be congratulated on this ongoing
achievement.
The COVID-19 vaccination programme has been successful in that
in excess of 95% of all staff and on-site contractors have received
at least two vaccine doses. This has contributed to the mine-site
operations being unaffected as a result of COVID-19.
Finance
A lower head grade of 1.10g/t for H1 2022 (H1 2021: 1.27g/t)
contributed to lower gold production and sales revenue. Gold sales
were US$57.6 million (H1 2021 US$62.4 million). Operations resulted
in positive free cash flow of US$17.0 million (H1 2021: US$21.3
million).
As at H1 2022 end, the Group's senior debt was US$8.1 million
(H1 2021: US$42.4 million) with net debt of US$92.9 million (H1
2021: US$109.6 million). Total debt repayments made during H1 2022
were US$17.0 million (H1 2021: US$20.6 million). It is expected
that the senior loan will be fully repaid during Q4 2022. Details
of these debt facilities can be found in Note 5.
Mining
Mining production of ore and waste was 7.0 Mt for H1 2022 (H1
2021: 5.3Mt) and the total ore mined was 1.3Mt (H1 2021:
0.7Mt).
Mining of Stage 1 of the mine plan was completed during H1 2022,
while mining of Stage 2 was completed in early Q3 2022. In-pit
back-filling of waste is well underway.
Full access to Stage 3 of the mine plan, which is critical to
the mining operation schedule, was not achieved during H1 2022.
Notwithstanding several court orders in the Company's favour,
access to a key area of Stage 3 was not achieved. This resulted in
changes to the Company mine plan delaying access to higher grade
material in Stage 3. Mining of this material is now scheduled to
commence in Q3 2022. These access issues have also temporarily
halted both the resource definition and exploration drill
programmes planned for Stages 4 and 5. Access to the final Stage 3
areas was secured during Q3 2022.
During H1 2022, due to macro-economic conditions, there was a
noticeable increase in the cost of essential consumables including
fuel, explosives etc, resulting in mining unit costs exceeding
budget. The Company's mining equipment fleet performed adequately
during H1 2022.
Process plant
Throughput for H1 2022 of 1.02Mt (H1 2021: 1.05Mt) was on
budget, however, operations were managed to a lower feed grade.
Delays in accessing mine plan Stage 3 and 4 affected the head grade
during H1 2022, with higher grade material from Stage 3 now
scheduled to be accessed during H2 2022.
Gold production for H1 2022 was 31,348 ounces (H1 2021: 35,316
ounces). Notwithstanding the below noted BIOX performance issues, a
higher gold recovery rate of 87.7% was achieved (H1 2021:
81.0%).
Adverse weather events resulted in numerous power failures
during Q2 2022. These power outages contributed to a lack of
stability of the BIOX bacteria culture; giving rise to resultant
production losses over several weeks. Difficulties were experienced
in re-establishing a stable bacteria culture in the BIOX circuit
due to an unknown contaminant that developed in the return water
sources that were being used to feed the BIOX circuit. As a result
of these issues BIOX has under-performed in H1 2022, impacting
overall gold produced during the period. Since period end, there
have been no further water contaminant issues, which are expected
to have a similar effect on the BIOX circuit's performance.
A major upgrade to the process plant return water and cooling
systems is underway. Once completed, the Company will have an
increased ability to control BIOX temperature and to reduce the
risk of contaminated return water feed.
Further unplanned process plant downtime during H1 2022 was
caused in the main by tails line failures and conveyor belt and
return water line repairs.
Residual Storage Impoundment ("RSI")
The RSI is operating to design with an excellent environmental
performance record. Construction of the final Stage 6 RSI lift has
commenced with completion expected by year end.
The performance of the RSI is continuously monitored by an
independent international consulting group. Engineering and final
detailed designs for the final in-rock spillway are well advanced
with the commencement of construction expected in H1 2023.
Community & Government Relations
Productive relations with both the community and the Philippine
government continue. The Company, with the assistance of various
government agencies, finally secured full access to Stage 3 mine
areas in Q3 2022. Further removal of illegal miners, their
infrastructure and dwellings from mine plan Stages 4 and 5 is
required to allow exploration drilling to be undertaken in these
areas.
Corporate
In June 2022 Tim Livesey replaced Jeremy Wrathall as an
Independent Non-Executive Director of the Company.
Mr Livesey has been appointed Chairman of the Remuneration
Committee and a member of the Audit Committee.
The 2022 AGM held in June 2022 approved acapital sub-division
and capital reduction. The capital sub-division corporate event
changed the nominal value of ordinary shares to GBP0.0001 while
creating a new class of Deferred Shares effective from the date of
the AGM.
Since period end, the Company completed the capital reduction
corporate event, eliminating both the Deferred Share capital
account and the Share Premium account, resulting in a capital
reduction of approximately US$224 million, with an offsetting
US$224 million credit applied against the accumulated profit and
loss account. This has simplified the Company's equity structure
whilst adding greater flexibility for both future equity raises and
shareholder distributions.
In addition, in June 2022, the Company issued 17,462,835
ordinary shares at an issue price of GBP0.01245 to certain members
of senior management in lieu of a GBP217,400 cash bonus.
For further information please visit or contact
www.metalsexploration.com
Metals Exploration PLC
Via Tavistock Communications
Limited +44 (0) 207 920 3150
-------------------------
Nominated & Financial Adviser: STRAND HANSON LIMITED
-------------------------
James Spinney, James Dance,
Rob Patrick +44 (0) 207 409 3494
-------------------------
Financial Adviser & Broker: HANNAM & PARTNERS
-------------------------
Matt Hasson, Franck Nganou +44 (0) 207 907 8500
-------------------------
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
-------------------------
Jos Simson, Nick Elwes +44 (0) 207 920 3150
-------------------------
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
for the six months ended 30 June 2022
Notes 6 month period ended 6 month period ended Year ended
30 June 2022 30 June 2021 31 December 2021
(unaudited) (unaudited) (audited)
US$ US$ US$
Continuing Operations
Revenue 57,621,936 62,439,246 129,843,489
Cost of sales (42,493,529) (44,363,193) (91,977,555)
---------------------- ----------------------- ----------------------
Gross profit 15,128,407 18,076,053 37,865,934
Administrative expenses (5,724,198) (3,897,168) (8,475,303)
---------------------- ----------------------- ----------------------
Operating profit 9,404,209 14,178,885 29,390,631
---------------------- ----------------------- ----------------------
Impairment loss (670,677) (798,275) (1,450,078)
Loss on sale of assets - (78,206) (78,206)
Net finance and other costs (7,271,289) (7,324,104) (16,232,196)
Loss on fair value changes to
derivatives (526,495) - (332,996)
Share based payment expense (75,698) - (10,982)
Share of (loss)/ profit of
associates (2,729) (6,642) 18,232
---------------------- ----------------------- ----------------------
Profit before tax 857,321 5,971,658 11,304,405
Tax expense (75,255) (29,910) (11,769)
---------------------- ----------------------- ----------------------
Profit for the period attributable
to equity holders of the parent 782,066 5,941,748 11,292,636
====================== ======================= ======================
Other comprehensive
income :
Items that may be
re-classified
subsequently
to profit or loss:
Exchange differences on
translating foreign operations 40,020 (1,428,287) (791,929)
Items that will not be
re-classified
subsequently
to profit or loss:
Re-measurement of pension
liabilities - - 123,855
---------------------- ----------------------- ----------------------
Total comprehensive profit for the
period attributable to equity
holders of the parent 822,086 4,513,461 10,624,562
====================== ======================= ======================
Earnings per share:
Basic cents per share 4 0.04 0.29 0.55
Diluted cents per share 0.04 0.28 0.52
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
as at 30 June 2022
Notes 30 June 2022 30 June 2021 (Unaudited) 31 December 2021
(Unaudited) (Audited)
US$ US$ US$
Non-current assets
Property, plant and
equipment 88,810,504 99,810,635 95,941,405
Other intangible assets 49,743 65,396 70,115
Investment in associate
companies 179,536 157,391 182,265
Trade and other
receivables 5,572,524 5,606,159 5,529,628
94,612,307 105,639,581 101,723,413
------------------------ ------------------------- ------------------------
Current assets
Inventories 22,136,388 16,524,182 17,217,885
Trade and other
receivables 6,890,283 7,023,876 5,968,568
Cash and cash
equivalents 288,439 4,702,995 4,736,970
29,315,110 28,251,053 27,923,423
------------------------ ------------------------- ------------------------
Non-current liabilities
Loans 5 (74,146,474) (85,041,950) (78,856,268)
Trade and other payables (1,871,640) (1,938,387) (1,950,535)
Deferred tax liabilities (880,935) (838,661) (805,680)
Provision for mine
rehabilitation (4,031,740) (3,310,074) (4,015,050)
(80,930,789) (91,129,072) (85,627,533)
------------------------ ------------------------- ------------------------
Current liabilities
Trade and other payables (12,791,908) (10,095,399) (10,328,000)
Loans - current portion 5 (18,711,883) (29,264,218) (23,834,279)
Derivative liabilities (805,124) - (332,996)
(32,308,915) (39,359,617) (34,495,275)
------------------------ ------------------------- ------------------------
Net assets 10,687,713 3,401,945 9,524,028
======================== ========================= ========================
Equity
Share capital 6 27,952,353 27,950,217 27,950,217
Share premium account 6 196,118,890 195,855,125 195,855,125
Acquisition of
non-controlling
interest reserve (5,107,515) (5,107,515) (5,107,515)
Translation reserve 14,708,496 16,262,872 14,668,476
Re-measurement reserve 162,003 38,148 162,003
Other reserves 1,613,617 1,526,937 1,537,919
Profit and loss account (224,760,131) (233,123,839) (225,542,197)
------------------------ ------------------------- ------------------------
Equity attributable to
equity holders of the
parent 10,687,713 3,401,945 9,524,028
======================== ========================= ========================
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2022
Acquisition of
Share non-controlling Profit and
Share premium interest Translation Re-measurement Other loss Total
capital account reserve reserve reserve reserve account equity
US$ US$ US$ US$ US$ US$ US$ US$
------------ ------------ ---------------- ------------ --------------- ------------ ----------- ------------
Balance at 1
January 2022 27,950,217 195,855,125 (5,107,515) 14,668,476 162,003 1,537,919 (225,542,197) 9,524,028
Exchange
differences
on
translating
foreign
operations - - - 40,020 - - - 40,020
Profit for the
period - - - - - - 782,066 782,066
Share based
payment - - - - - 75,698 - 75,698
----------- ------------ ------------ ----------- -------- ---------- -------------- -----------
Total
comprehensive
(loss)/profit
for the
period - - - 40,020 - 75,698 782,066 897,784
Equity issue 2,136 263,765 - - - - - 265,901
Balance at 30
June 2022 27,952,353 196,118,890 (5,107,515) 14,708,496 162,003 1,613,617 (224,760,131) 10,687,713
----------- ------------ ------------ ----------- -------- ---------- -------------- -----------
Equity is the aggregate of the following:
-- Share capital; being the nominal value of shares issued.
-- Share premium account; being the excess received over the
nominal value of shares issued less direct issue costs.
-- Acquisition of non-controlling interests reserve; being
amounts recognised on acquiring additional equity in a controlled
subsidiary.
-- Translation reserve; being the foreign exchange differences
on the translation of foreign subsidiaries.
-- Re-measurement reserve; being the cumulative actuarial gains
and losses, return on plan assets and changes in the effect of the
asset ceiling (excluding net interest on defined benefit liability)
recognised in the statement of total comprehensive income.
-- Other reserves; being the cumulative fair value of warrants
associated with certain mezzanine debt facilities and share-based
payments expense.
-- Profit and loss account; being the cumulative loss attributable to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2021
Acquisition of
Share non-controlling
Share premium interest Translation Re-measurement Other Profit and Total
capital account reserve reserve reserve reserve loss account equity
US$ US$ US$ US$ US$ US$ US$ US$
----------- ------------ ---------------- ------------ --------------- ---------- -------------- ------------
Balance at 1
January 2021 27,950,217 195,855,125 (5,107,515) 17,691,159 38,148 1,526,937 (239,065,587) (1,111,516)
Exchange
differences
on
translating
foreign
operations - - - (1,428,287) - - - (1,428,287)
Profit for the
period - - - - - - 5,941,748 5,941,748
----------- ------------ ---------------- ------------ --------------- ---------- -------------- ------------
Total
comprehensive
(loss)/profit
for the
period - - - (1,428,287) - - 5,941,748 4,513,461
Balance at 30
June 2021 27,950,217 195,855,125 (5,107,515) 16,262,872 38,148 1,526,937 (233,123,839) 3,401,945
----------- ------------ ---------------- ------------ --------------- ---------- -------------- ------------
Equity is the aggregate of the following:
-- Share capital; being the nominal value of shares issued.
-- Share premium account; being the excess received over the
nominal value of shares issued less direct issue costs.
-- Acquisition of non-controlling interests reserve; being
amounts recognised on acquiring additional equity in a controlled
subsidiary.
-- Translation reserve; being the foreign exchange differences
on the translation of foreign subsidiaries.
-- Re-measurement reserve; being the cumulative actuarial gains
and losses, return on plan assets and changes in the effect of the
asset ceiling (excluding net interest on defined benefit liability)
recognised in the statement of total comprehensive income.
-- Other reserves; being the cumulative fair value of warrants
associated with certain mezzanine debt facilities.
-- Profit and loss account; being the cumulative loss attributable to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Acquisition of
Share non-controlling
Share premium interest Translation Re-measurement Other Profit and Total
capital account reserve reserve reserve reserve loss account equity
US$ US$ US$ US$ US$ US$ US$ US$
----------- ------------ ---------------- ------------ --------------- ---------- -------------- ------------
Balance at 1
January 2021 27,950,217 195,855,125 (5,107,515) 15,460,405 38,148 1,526,937 (236,834,833) (1,111,516)
Exchange
differences
on
translating
foreign
operations - - - (791,929) - - - (791,929)
Change in
pension
liability - - - - 123,855 - - 123,855
Profit for the
year - - - - - - 11,292,636 11,292,636
Share based
payments - - - - - 10,982 - 10,982
----------- ------------ ---------------- ------------ --------------- ---------- -------------- ------------
Total
comprehensive
profit/(loss)
for the
period - - - (791,929) 123,855 10,982 11,292,636 10,635,544
Balance at 31
December 2021 27,950,217 195,855,125 (5,107,515) 14,668,476 162,003 1,537,919 (225,542,197) 9,524,028
----------- ------------ ---------------- ------------ --------------- ---------- -------------- ------------
Equity is the aggregate of the following:
-- Share capital; being the nominal value of shares issued.
-- Share premium account; being the excess received over the
nominal value of shares issued less direct issue costs.
-- Acquisition of non-controlling interests reserve; being
amounts recognised on acquiring additional equity in a controlled
subsidiary.
-- Translation reserve; being the foreign exchange differences
on the translation of foreign subsidiaries.
-- Re-measurement reserve; being the cumulative actuarial gains
and losses, return on plan assets and changes in the effect of the
asset ceiling (excluding net interest on defined benefit liability)
recognised in the statement of total comprehensive income.
-- Other reserves; being the cumulative fair value of warrants
associated with certain mezzanine debt facilities and share-based
payments expense.
-- Profit and loss account; being the cumulative loss attributable to equity shareholders.
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT for the six
months ended 30 June 2022
6 month period ended 6 month period ended Year ended
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021
Notes (audited)
US$ US$ US$
Net cash arising from operating
activities 17,037,683 21,274,714 46,515,768
------------------------- ------------------------- ------------------------
Investing activities
Exploration expenses incurred - (285,885)* (338,203)
Purchase of property, plant and
equipment (3,991,767) (4,636,801) (11,542,751)
Purchase of intangible assets - (45,993)* (45,993)
Proceeds from sale of plant and
equipment - 60,000 60,000
------------------------- ------------------------- ------------------------
Net cash used in investing
activities (3,991,767) (4,908,679) (11,866,947)
------------------------- ------------------------- ------------------------
Financing activities
Repayment of borrowings -
principal and interest (17,000,000) (20,600,000) (39,675,000)
Net cash arising from financing
activities (17,000,000) (20,600,000) (39.675.000)
------------------------- ------------------------- ------------------------
Net(decrease)/increase in cash
and cash equivalents (3,954,084) (4,233,965) (5,026,179)
Cash and cash equivalents at
beginning of period 4,736,970 8,931,792 8,931,792
Foreign exchange difference (494,447) 5,168 831,357
Cash and cash equivalents at end
of period 288,439 4,702,995 4,736,970
========================= ========================= ========================
* Restated 30 June 2021 to be consistent with subsequent
disclosure as at the 31 December 2021 year end
Notes to the condensed consolidated interim financial
statements
1. General information
These condensed consolidated interim financial statements of
Metals Exploration and its subsidiaries (the "Group") were approved
by the Board of Directors on 13 September 2022. Metals Exploration
is the parent company of the Group. Its shares are quoted on AIM
market of the London Stock Exchange plc. The registered address of
Metals Exploration plc is 38 - 43 Lincoln's Inn Fields, London,
WC2A 3PE.
The condensed consolidated interim financial statements for the
period 1 January 2022 to 30 June 2022 are unaudited. The financial
information has been prepared on the basis of IFRS that the
Directors expect to be adopted in the UK and applicable as at 31
December 2022. The group has chosen not to adopt IAS 34 "Interim
Financial Statements" in preparing the interim financial
information the condensed consolidated interim financial statements
incorporate unaudited comparative figures for the interim period
fro m 1 January 2021 to 30 June 2021 and the audited financial year
ended 31 December 2021.
The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory accounts for the year
ended 31 December 2021, which were prepared under International
Financial Reporting Standards, were filed with the Registrar of
Companies. The auditors reported on these accounts and their report
was unqualified and did not contain a statement under either
Section 498 (2) or Section 498 (3) of the Companies Act 2006.
2. Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with UK-adopted
international accounting standards. The financial information has
been prepared based on UK-adopted international accounting
standards that the Board of Directors expect to be applicable as at
31 December 2022.
These condensed consolidated interim financial statements have
been prepared under the historical cost convention, except for
derivative financial instruments, which are measured at fair value,
and in accordance with UK-adopted international accounting
standards . There have been no changes in accounting policies as
described in the 2021 annual financial statements.
3. Going concern
These condensed consolidated interim financial statements of the
Group have been prepared on a going concern basis, which
contemplates the continuity of business activities, the realisation
of assets and the settlement of liabilities in the normal course of
business.
Although as at 30 June 2022, the Group's current liabilities
continue to exceed its current assets, primarily due to the
estimated external borrowings the Group expects to repay within the
next 12 months, there is no obligation to adhere to a set loan
principal or interest repayment schedule.
The Group is not subject to any set principal or interest
repayment schedule. Excess free cashflow is required to be paid to
lenders on a minimum quarterly basis only when net working capital
is in excess of US$5million. In addition, the Group is not in
default if it is unable to make a quarterly payment to the lenders,
but would continue to be obliged to pay out the excess free cash
flow as soon as possible. As a result of these debt repayment
arrangements, including the ongoing existence of a US$5million
positive net working capital balance, together with the sustained
positive cash flows being produced by the Runruno Project, the
Directors believe there is no material uncertainty over the Group's
going concern.
The Group and its ability to operate as a going concern and to
meet its commitments as and when they fall due is dependent upon
the ability of the Group to operate the Runruno Project
successfully so as to generate sufficient cash flows to enable the
Group to settle its liabilities (including the restructured debt
facilities) as they fall due.
T he Board of Directors believes that the Runruno Project will
continue to operate successfully and produce positive cash flows
for at least 12 months from the date of this interim report, being
13 September 2022. As a result, the Board of Directors considers it
appropriate that the half-year financial information should be
prepared on a going concern basis.
4. Earnings per share
The earnings per share was calculated on the basis of net
profit/(loss) attributable to equity shareholders divided by the
weighted average number of ordinary shares.
6 month period ended 30 June 6 month period ended 30 June Year ended
2022 2021 31 December 2021
(unaudited) (unaudited) (audited)
US$ US$ US$
Earnings
Net profit/(loss) attributable
to equity shareholders for the
purpose of basic and diluted
earnings per share 782,066 5,941,748 11,292,636
Number of shares
Weighted average number of
ordinary shares for the
purpose of basic earnings per
share 2,072,588,751 2,071,334,586 2,071,334,586
------------------------------- ------------------------------- ------------------
Number of dilutive shares under
warrant/option 114,083,011 30,950,049 115,983,670
Weighted average number of
ordinary shares for the
purpose of diluted earnings
per share 2,186,671,762 2,102,284,635 2,187,318,256
------------------------------- ------------------------------- ------------------
Basic earnings cents per share 0.04 0.29 0.55
Diluted earnings cents per
share 0.04 0.28 0.52
------------------------------- ------------------------------- ------------------
5. Loans
Senior debt
On 28 May 2015, the Group entered into a loan with two foreign
international resource banks for US$83,000,000 in project finance
(the "Facility Agreement"). In January 2020 the Facility Agreement
was acquired by companies associated with the Mezzanine Lenders
(the "New Lenders").
In October 2020 the Group completed a debt restructuring with
the New Lenders, whereby the Group no longer has an obligation to
meet any fixed interest and principal repayment schedule (the "New
Senior Debt"). The Group's repayment obligation under the New
Senior Debt is limited to making a quarterly repayment of that
amount which equals the available net working capital ("NWC") over
and above a minimum US$5 million NWC buffer. NWC is defined as the
Group's available cash on hand plus gold sales proceeds due, and
gold doré on hand or in transit, less all current liabilities
(including budgeted operational, CAPEX and exploration expenses,
taxes, hedging costs and government charges, but excluding all
unpaid debt principal and interest).
The principal plus capitalised interest balance owing by the
Group under the Facility Agreement as at 30 June 2022 was
US$8,109,129 (30 June 2021: US$42,410,937).
Mezzanine debt
Since 2015, the Company has entered into numerous facility
agreements with two major shareholders, MTL (Luxembourg) Sarl and
Runruno Holdings Limited (the "Mezzanine Lenders"). The purpose of
these unsecured advances was for general corporate and working
capital requirements of the Company and to enable completion of the
Runruno Project.
In October 2020 the various original mezzanine facilities were
consolidated into two new facilities (the "New Mezzanine
Facilities") and a GBP100,000 revolving credit facility. There is
no obligation to make any repayment of any amounts due under the
New Mezzanine Facilities until the New Senior Debt is fully repaid.
The New Mezzanine Facilities interest rate will initially be 15%
per annum, reducing to 7% per annum once the New Senior Debt has
been fully repaid. The principal and accrued interest/fees balance
owing by the Company to the Mezzanine Lenders as at 30 June 2022
was US$85,117,009 (30 June 2021: US$73,314,888).
The Group's outstanding debt is summarised as follows:
June 2022 June 2021 December 2021
US$ US$ US$
Total loans due within one year* 18,711,883 29,264,218 23,834,279
=========== =========== ==============
Total loans due after more than one year* 74,146,474 85,041,950 78,856,268
=========== =========== ==============
* Given the Group is not subject to a fixed repayment schedule
then, in accordance with the restructured debt facilities, there is
no certainty as to what amount of debt will be repaid within one
year from period end. Thus the determination of what debt is deemed
current and what is deemed non-current is subject to estimation. In
making this calculation the Group has taken into account the
Group's estimate of what principal repayments will be made during
the next 12 month period.
6. Share capital
The 17 June 2022 AGM approved a capital reorganisation which
consisted of both a capital sub-division and a capital reduction.
The capital sub-division effected a change in the nominal value of
ordinary shares. This was achieved by dividing the existing
ordinary shares of GBP0.01 nominal value into one New Ordinary
Share, with a nominal value of GBP0.0001 and one Deferred Share
with a nominal value of GBP0.0099 each. The Deferred Shares have
limited rights and the restrictions as set out in the new Articles
of the Company adopted at the AGM. This capital sub-division was
effective as from the day of the AGM.
The capital reduction element was to cancel, for no
consideration the deferred shares and share premium account by way
of creating a reserve to be offset against accumulated losses. This
capital reduction was subsequently completed in July 2022 and is a
non-adjusting post-balance sheet event. The issued capital of the
Company as at 30 June 2022 is shown below.
December
June 2022 June 2021 December 2021 June 2022 June 2021 2021
Number of Number of
Number of shares shares shares US$ US$ US$
Ordinary shares
of GBP0.01 par
value
Opening balance 2,071,334,586 2,071,334,586 2,071,334,586 27,950,217 27,950,217 27,950,217
Sub-division ( 2,071,334,586) - - (27,950,217) - -
Closing balance - 2,071,334,586 2,071,334,586 - 27,950,217 27,950,217
----------------- -------------- -------------- ------------- ------------ -----------
Ordinary shares of
GBP0.0001 par value
Opening balance - - - - - -
Sub-division 2,071,334,586 - - 279,502 - -
Issued in period 17,461,835 - - 2,136 - -
----------------- -------------- -------------- ------------- ------------ -----------
Closing balance 2,088,796,421 - - 281,638 - -
----------------- -------------- -------------- ------------- ------------ -----------
Deferred shares of
GBP0.0099 par value*
Opening balance - - - - - -
Sub-division 2,071,334,586 - - 27,670,715 - -
----------------- -------------- -------------- ------------- ------------ -----------
Closing balance* 2,071,334,586 - - 27,670,715 - -
----------------- -------------- --------------
Total share capital 27,952,353 27,950,217 27,950,217
============= ============ ===========
* Following completion of the necessary court approval process
these Deferred Shares were cancelled in July 2022.
7. Contingent liabilities
The Group has no contingent liabilities identified as at 30 June
2022 (2021: US$nil).
8. Subsequent events
There have been no subsequent disclosable events other than the
completion of the capital reduction referred to in note 6.
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END
IR FLFVDATIVLIF
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September 14, 2022 02:01 ET (06:01 GMT)
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