TIDMCNG
China Nonferrous Gold Limited
('CNG' or the 'Company' and with its subsidiaries the
"Group")
Interim Results for the Six-Month Period Ended 30 June 2020
China Nonferrous Gold Limited (AIM:CNG), the gold producer with
the operational Pakrut Gold Project ('the Pakrut Project') in the
Republic of Tajikistan, today announces its interim results for the
six-month period ended 30 June 2020.
The results below are available on the Company's website at
www.cnfgold.com.
Highlights
-- From January to June 2020, a total of 261,268 tons of ore was extracted
from the Pakrut gold mine; 344,652 tons of ore was processed at a grade
of 2.28 g/t; and 17,411.21 oz gold ingots was poured.
-- From January to June 2020, the Group sold 14,839.18 oz of gold ingots,
achieving sales revenue of US$24.33 million.
-- Since the outbreak of COVID-19 in Tajikistan on April 30 2020, the
Company has taken appropriate steps and effective measures to ensure that
staff at protected at site. To date operations at the mine site at Pakrut
continue as normal, and there are no confirmed or suspected cases in the
Company in Tajikistan or China.
-- After the outbreak of the Tajikistan epidemic, flights with China have
not been opened, the Company has organised a private chartered flight to
transport around 45 Chinese employees to Tajikistan from China, which has
taken off on 8 August 2020. We therefore remain confident that the annual
internal production target can be achieved.
For further information please visit the Company's website
(www.cnfgold.com) or contact:
China Nonferrous Gold Limited
Yu Lixian, Chairman
Tel: +86 10 8442 6681
WH Ireland Limited (NOMAD & Broker)
Katy Mitchell, James Sinclair-Ford
Tel: +44 (0)207 220 1666
Blytheweigh (PR)
Tim Blythe
Tel: +44 (0)20 7138 3224
Project Summary
The Pakrut Gold Project, of which CNG has 100 per cent
ownership, is situated in Tajikistan approximately 120km northeast
of the capital city Dushanbe. Pakrut is located within the Tien
Shan gold belt, which extends from Uzbekistan into Tajikistan,
Kyrgyzstan and Western China, and which hosts a number of
multi-million ounce gold deposits.
About Tajikistan
Tajikistan is a secular republic located in Central Asia. The
country is a member of the Commonwealth of Independent States and
the Shanghai Cooperation Organisation. Tajikistan hosts numerous
operating precious metal mines as well as the largest aluminum
smelter in Central Asia. CNG's management team has extensive
experience in the mining industry in Tajikistan.
Chairman's Statement
As Chairman of the board, it gives me great pleasure to present
the Chairman's statement of the Interim Results for the Six-Month
Period Ended 30 June 2020. Following the first year of successful
complete production in 2019, the Pakrut gold mine entered steady
state production and full operation in 2020, making the Group a
significant gold producer in Tajikistan.
From January to June 2020, a total of 261,268 tons of ore was
extracted from the Pakrut gold mine During that same six month
period:
-- 344,652 tons of ore was processed;
-- the average grade of the raw ore was 2.28 g/t;
-- the recovery rate of processing was 92.07%;
-- 9,979 tons of concentrate was produced from the processing plant; and
-- 8,924 tons of concentrate among them was treated in the smelter (the
comprehensive recovery rate of smelting was 85.96%) and 17,411.21 oz gold
ingots were poured.
From 2020, the gold price began to rise, especially after March
2020, which has benefited the Group. From January to August 2020,
the Group sold 21,314.66 oz of gold ingots, achieving sales revenue
of US$36.51million (unaudited), with an average sales price of
US$1,712.96 / oz. However, there can be no guarantee that these
sales will be achieved for the rest of the year.
Financial Results
The Company continued its production and operation work during
the first six months of 2020. Administration expenditure was
US$8,063,474 (30 June 2019: US$6,306,764). The largest increase is
the depreciation expense in relation to PPE mainly because CIP was
moved into PPE and its depreciation began in 2019. The operating
profit was US$1,503,000 (30 June 2019: US$278,000). Total cash
equivalents at the end of the period amounted to US$19,548,292 (30
June 2019: US$16,147,939). As at 30 June 2020, the Group held net
liabilities of $20,712,868 (30 June 2019: net liabilities
$1,363,000).
Given the limited production and cash balances the Group has
been reliant on support from its major shareholder, CNMC, and its
associates. In April 2020, the Company drew down US$14.50 million
on a new US$30 million loan facility with China Construction Bank
(Asia) Corporation Limited, which is being used for general working
capital purposes to fund the Pakrut gold mine. On June 30, 2020,
the principal amount of CCB Macau's due loan of USD 5 million has
been repaid.
The Group commenced full production in January 2019. As
mentioned earlier, the Company currently has borrowings of
c.US$362m (of which c.US$353m is the principal loan amount and the
balance represents accrued interest), the majority of which is due
for repayment before June 2021 (and a significant proportion of
which is due for repayment before the end of December 2020). The
Directors believe that the Company's major shareholder will
continue to support the Company but in order to ensure the
repayment of existing loans, a broader refinancing is required.
Discussions are ongoing and are expected to be completed in the
near term. Further updates will be provided when a refinancing
package is entered into.
Outlook
With the normal production and operation of Pakrut gold mine,
the Company is confident in its ability to achieve the production
target of 680,000 tons of ore set at the beginning of this year.
This is considered a prudent target in light of the uncertainties
presented by the COVID pandemic.
The Company is continuing to enhance its production capacity.
Whilst improving production, the Company is also focusing on
perfecting and improving the smelting process by reducing
production costs, increasing recovery rates and improving
competitiveness.
While we have taken big strides in the production and operation
of the Pakrut gold mine and achieved much, there are still
challenges to overcome and targets to meet, all of which I am
confident to accomplish in the coming months.
Overall, however, the uncertainty created by the COVID-19
pandemic on production and operations still exists in Tajikistan,
and the long term effects are difficult to predict and
estimate.
I would like to take this opportunity to thank all our
employees, management and advisers for their continued hard work in
2020. I would also like to extend my thanks to all our stakeholders
for their continued backing over the years. I very much look
forward to updating our shareholders further on the mine
developments, production levels, new strategy and direction.
Yu Lixian
Chairman
30 September 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2020
Unaudited Unaudited Audited
Six months
Six months ended ended 30 June Year ended 31
30 June 2020 2019 December 2019
Note US$'000 US$'000 US$'000
Revenue 24,329 20,881 49,157
Cost of sales (14,134) (13,582) (32,842)
Gross profit 10,195 7,299 16,315
Other Operating
income - - 116
Administrative
and other
expenses (8,063) (6,307) (16,337)
(Loss)/Gain on
foreign
exchange (629) (714) (905)
Other operating
expenses - - (136)
Operating
profit/(loss) 1,503 278 (947)
Interest income 50 218 270
Finance costs (8,465) (9,812) (20,796)
-
Loss before Tax (6,927) (9,316) (21,473)
Income tax - (243) (508)
Loss for the
period
attributable to
owners (6,927) (9,559) (21,981)
of the Company
Other
comprehensive
income - - -
Total
comprehensive
income for the
period
attributable to
owners of the
Company (6,927) (9,559) (21,981)
Earnings per
Share
Basic and diluted
(cents) 3 (1.81) (2.49) (5.75)
All of the activities of the Group are classified as
continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Unaudited Unaudited Audited
30 June 30 June 2019 31 December
2020US$'000 US$'000 2019US$'000
Non-Current
Assets
Property, plant
and equipment 5 400,701 410,826 402,548
Total Non-Current
Assets 400,701 410,826 402,548
Current Assets
Inventories 17,035 4,248 16,856
Trade and other
receivables 6,373 6,912 4,766
Cash and cash
equivalents 19,548 16,148 11,120
Total Current
Assets 42,956 27,308 32,743
Non-Current
Liabilities
4
Borrowings 4 (18,586) (78,650) (103,586)
Provisions for
other
liabilities and
charges (913) (157,725) (913)
Total Non-Current
Liabilities (19,499) (236,375) (104,499)
Current
Liabilities
Borrowings 4 (362,077) (837) (267,527)
Trade and other
payables (82,792) (202,285) (77,050)
Total Current
Liabilities (444,870) (203,122) (344,577)
Total Liabilities (464,369) (439,497) (311,843)
Net Liabilities (20,712) (1,363) (13,785)
Capital And
Reserves
Share Capital 38 38 38
Share premium 65,901 65,901 65,901
Other reserves 10,175 10,175 10,175
Retained earnings (96,826) (77,477) (89,899)
Total Equity (20,712) (1,363) (13,785)
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 JUNE 2020
Unaudited Unaudited Audited
Year ended31
Six months ended 30 Six months ended 30 Dec 2019
June 2020 US$'000 June2019 US$'000 US$'000
Cash flows from
Operating
Activities
Loss before income
tax (6,927) (9,316) (21,473)
Adjustments for:
Finance income (50) (218) (270)
Finance cost 8,465 9,812 20,796
Depreciation 3,741 5,056 7,722
Foreign exchange - - 905
Impairment - - -
Change in working
capital:
Inventory 178 13,095 487
Trade and other
receivables (1,620) (2,217) (904)
Trade and other
payables (11,054) (4,653) (7,039)
Other current assets (13) (988) (154)
Other current
liabilities 353 1,109 3,554
Tax paid (244) -
Net cash flows from
Operating
Activities 2,906 11,436 3,624
Cash flows from
Investing
Activities
Purchase of
property, plant and
equipment (1,892) (6,198) (5,842)
Payments for mining
rights and
construction in
progress - - -
Disposal of PPE - - -
Interest received 50 218 270
Net cash used in
Investing
Activities (1,840) (5,980) (5,572)
Cash flows from
Financing
Activities
Proceeds from
borrowings 14,550 20,000 20,000
Repayment of
borrowings (5,000) (5,000) (10,000)
Interest paid (2,186) (12,671) (5,295)
Net Cash (used
in)/from Financing
Activities 7,364 2,329 4,705
Net
Increase/(Decrease)
in Cash and Cash 8,428 7,785 2,757
Equivalents
Cash and cash
equivalents at
beginning of the
period 11,120 8,363 8,363
Cash and cash
equivalents at end
of the period 19,548 16,148 11,120
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2020
Share Share Other Retained Total
capital premium reserve earnings equity
US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2019 38 65,901 10,175 (67,918) 8,196
Loss and total comprehensive
income for the period - - - (9,559) (9,559)
Balance at 30 June 2019 38 65,901 10,175 (77,477) (1,363)
Loss and total comprehensive
income for - - - (12,442) (12,442)
the period
Balance at 31 December 2019
(audited) 38 65,901 10,175 (89,899) (13,785)
Balance at 1 January 2020 38 65,901 10,175 (89,899) 13,785)
Loss and total comprehensive
income for the period - - - (6,927) (6,927)
Balance at 30 June 2020
(unaudited) 38 65,901 10,175 (96,826) (20,712)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2020
1. Accounting Policies
i) Basis of preparation
China Nonferrous Gold Limited (the "Company") is a company
registered in the Cayman Islands. The condensed consolidated
interim financial statements of the Company for the six months
ended 30 June 2020 comprise the result of the Company and its
subsidiaries (together referred to as the "Group") and have been
prepared in accordance with the AIM Rules for Companies. As
permitted, the Company has chosen not to adopt IAS 34 "Interim
Financial Statement" in preparing these interim financial
statements.
The consolidated interim financial information for the period 1
January 2020 to 30 June 2020 is unaudited and has not been reviewed
in accordance with International Standard on Review Engagements
2410 issued by the Auditing Practices Board. In the opinion of the
Directors the condensed interim financial information for the
period presents fairly the financial position, and results from
operations and cash flows for the period in conformity with the
generally accepted accounting principles consistently applied.
The condensed interim financial information incorporates
unaudited comparative figures for the interim period 1 January 2019
to 30 June 2019 and extracts from the audited financial statements
for the year to 31 December 2019. The financial information
contained in this interim report does not constitute statutory
accounts.
The comparatives for the full year ended 31 December 2019 are
not the Company's full statutory accounts for that year. A copy of
the accounts for that year have been delivered to members. The
auditor's report on those financial statements was unqualified.
The interim report has not been audited or reviewed by the
Company's auditor. The key risks and uncertainties and critical
accountancy estimates remain unchanged from 31 December 2019 and
the accounting policies adopted are consistent with those used in
the preparation of its financial statements for the year ended 31
December 2019.
ii) Cyclicality
The interim results for the six months ended 30 June 2020 are
not necessarily indicative of the results to be expected for the
financial year 2020. The operations of China Nonferrous Gold
Limited may be subject to seasonal variations depending on the
severity of snowfall levels at the mine site. Severe levels may
impact the ability to continue operations and result in damage to
the mine site.
2. Going Concern
The Interim Financial Statements have been prepared assuming the
Company will continue as a going concern. Under the going concern
assumption, an entity is ordinarily viewed as continuing in
business for the foreseeable future with neither the intention nor
the necessity of liquidation, ceasing trading or seeking protection
from creditors pursuant to laws and regulations.
In assessing whether the going concern assumption is
appropriate, the Directors take into account all available
information for the foreseeable future, in particular for the
twelve months from the date of approval of the Interim Financial
Statements. This information includes:
-- Management prepared cash flow projections;
-- Estimations as to when full production will commence and first revenues
will be generated and associated cash flows will occur;
-- The ability to complete the mine site work within the stated timeframe
and budget;
-- Sources of funding from external sources;
-- Settle financial obligations as they fall due;
-- The continued financial support of the considered controlling party; and
-- The ability of management to renegotiate current financing arrangements
as was achieved in June 2020 in respect of the loan with China Nonferrous
Metals International Mining Co. Ltd.
-- The ultimate parent will continue to support the Group and therefore the
directors believe that funding and financial support will be forthcoming
if required although this is not guaranteed.
As at the date of approval of these interim statements, and
based upon consideration of the above, the Directors are satisfied
that the Group has sufficient cash and loan facilities to finance
the Group's operating expenses and any further development and
construction of the Pakrut Gold Project that is required. The
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence and thus they
continue to adopt the going concern basis of accounting in
preparing the interim results.
3. Earnings per Share
June 2020 June 2019 December 2019
Basic and diluted earnings per (1.81)
share(cents) (2.49)
(5.75)
The basic earnings per share is calculated by dividing the loss
attributable to equity holders after tax of US$6,927,214 (30 June
2019: US$9,558,940) by the weighted average number of shares in
issue and carrying the right to receive dividend. For all the
periods disclosed up to 2020, the total number of shares remain
unchanged being 382,392,292 shares.
4. Borrowings
June 2020 June 2019 December 2019
US$000 US$000 US$000
Bank borrowings 104,550 100,000 95,000
Other loans 276,113 260,010 276,113
Less: unamortised borrowing costs - - -
Total 380,663 360,010 371,113
Non-current portion 18,586 202,285 103,586
Current portion 362,077 157,724 267,527
The fair value of borrowings equals their carrying amounts, as
the impact of discounting is not significant.
In April 2020, the Company drew down US$14.50 million on a new
US$30 million loan facility with China Construction Bank (Asia)
Corporation Limited, which is being used for general working
capital purposes to fund the Pakrut gold mine.
The Company extended the repayment period of loans in place with
CNMC Trade Company Limited (CNMC Trade), totalling US$146.50
million, to December 2020. The Company currently has total debt
facilities (including banking facilities), before interest, of
c.US$353.7 million (being the US$341m announced in July 2020, plus
the CNMIM loan of US$12.7m).
5. Property, Plant and Equipment
Office
furniture
and Motor Plant and Producing Assets under
Land equipment vehicles machinery Mines construction Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
Cost
At 1 January
2019 32 755 10,772 14,990 - - 26,549
Additions - 152 - 2,129 - 3,561 5,842
Transfer - - - - 398,639 761 399,400
Disposals - (320) (2,074) - - - (2,394)
At 31
December
2019 32 587 8,698 17,119 398,639 4,322 429,396
Additions - - - - 1,892 - -
Transfers - - - - 4,322 (4,322) -
Disposals - - - - - - -
At 30 June
2020 32 587 8,698 17,119 404,853 - 429,396
Accumulated
Depreciation
At 1 January
2019 - 611 7,909 10,607 - - 19,127
Charge for
the period - 31 392 869 8,823 - 10,116
Disposals - (320) (2,074) - - - (2,394)
At 31
December
2019 - 322 6,227 11,476 8,823 - 26,849
Charge for
the period 18 1,262 1,360 1.101 3,741
Disposals - - - - - -
At 30 June
2020 - 340 7,489 12,836 9,924 30,589
Net Book
Value
At 30 June
2020 32 247 1,209 4,283 394,929 - 400,701
At 31
December
2019 32 265 2,471 5,643 389,816 4,322 402,548
As the mine started full production from January 2019, all
assets included in 'Mines under construction' are transferred to
'Producing mines' as part of Property, Plant and Equipment.
Therefore, as at 31 December 2019 and 30 June 2020, there is nil
balance being carried forward for 'Mines under construction'. Total
depreciation is $3,741,760 for the 6 months period.
View source version on businesswire.com:
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CONTACT:
China Nonferrous Gold Limited
SOURCE: China Nonferrous Gold Limited
Copyright Business Wire 2020
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