30 September 2024
KEFI Gold and Copper
plc
("KEFI", or the "Company", or the "Group")
INTERIM RESULTS FOR THE SIX
MONTHS ENDED 30 JUNE 2024
KEFI Gold and Copper plc (AIM:
KEFI), the gold exploration and development company with projects
in the Democratic Republic of Ethiopia and the Kingdom of Saudi
Arabia, is pleased to announce its unaudited interim results for
the six months ended 30 June 2024.
The interim results for the Group
encompass the activities of KEFI Minerals (Ethiopia) Ltd ("KME"),
Tulu Kapi Gold Mines Share Company ("TKGM") in Ethiopia, and Gold
& Minerals Ltd ("GMCO") in Saudi Arabia.
The Tulu Kapi Gold Project ("Tulu
Kapi") is currently 95% beneficially owned by KEFI through KEFI's
wholly owned subsidiary KME. The Hawiah Copper-Gold Project
("Hawiah"), the Jibal Qutman Gold Project ("Jibal Qutman") and
other Saudi projects are held by GMCO in which KEFI currently has a
24.75% interest.
Both TKGM and GMCO are being
developed by KEFI and its partners as separate operating companies
so that each can build a local organisation capable of developing
and managing long-term production and exploration activities, as
well as fully exploit future development opportunities.
Highlights
KEFI is swiftly advancing its
Early Works at Tulu Kapi in Ethiopia, benefiting from the overtly
supportive local community. The lack of legacy social or
environmental issues at Tulu Kapi, such as those often associated
with artisanal mining found in other mining regions, has simplified
the task at hand for our Company. The general country environment
has also become increasingly development-focused and pro-mining in
particular, with significant site activities commencing over the
past two months due to the deployment of extensive
safety-protection forces. During this time, Ethiopia has introduced
national pro-development reforms, positioning the country once
again among the top 10 globally for growth, a status it held for
nearly two decades.
Recent reforms in Ethiopia include
the floating of the currency, the launch of the first IPO on the
new Ethiopian Stock Exchange, the opening of the local financial
sector to foreign investment, the rescheduling of international
debt, and the implementation of a significant IMF financial support
package.
Recent reforms for the mining
industry spearheaded by KEFI include exemption from exchange and
capital controls, capital ratios of up to 80:20 for mining,
market-based interest rates and specialised security deployment for
strategic mining projects. KEFI is positioned to launch the first
Ethiopian listed securities in the Ethiopian mining
sector.
In Saudi Arabia, the joint venture
has made two core discoveries, which continue to grow in size, as
well as several satellite discoveries. To support the next phase of
GMCO's development, the local leadership team has been expanded and
feasibility studies for the Jibal Qutman Gold and Hawiah
Copper-Gold projects are being refined and re-focused, while GMCO's
regional exploration efforts are being further elevated.
As previously reported this
quarter, we remain on track with our high-grade Tulu Kapi project
in Ethiopia, our flagship and most advanced venture. Thanks to the
Ethiopian Government's substantial efforts to ensure safe and
internationally compliant development, the Tulu Kapi funding
package can now progress towards project launch. The Early Works
programme was launched in Q2-2024 to demonstrate readiness for
Major Works and the next steps are to finalise second bank credit
approval, sign the definitive detailed financing agreements,
drawdown the equity funding and then launch Major Works - all
targeted within Q4-2024.
Other than completing the Early
Works programme generally, the current focus is particularly
on:
|
· Reinforcing our
social licence to operate at site via an intense consultative
process to demonstrate our readiness on the ground for Major
Works;
· the co lender's
credit approval which now includes a discussion in respect
increasing the financing amounts on offer;
· the book build
for the issuance of the Equity Risk Notes to local subsidiaries of
multinational corporations and local sophisticated investor;
and
· preparing for
possible additional stock exchange listing of KEFI or regional
listing of the Ethiopian subsidiary, to follow the launch of Major
Works at Tulu Kapi.
|
Our patient work with the local
and regional finance community is working well in mitigating
against an over-reliance on development support from what has been
a cyclically weak stock market for the junior mining sector during
much of the past decade. The current record gold prices could begin
to put the investment spotlight onto our sector.
Working Capital
The Company successfully raised
gross proceeds of approximately £5.0 million, comprising £4.5
million from the placing and £495,916 from the retail offer in
March 2024. Additionally, the Company issued remuneration shares to
certain KEFI directors valued at £500,000 in lieu of cash for
accrued fees and, during May 2024, the Company issued shares
totalling £1.4 million to key advisers in recognition of their
services in supporting various value-enhancing initiatives
following the launch of the Early Works programme at the Company's
Tulu Kapi Gold Project.
Board and Management Team
After appointing in 2023
independent Non-executive Director of the Company Dr Alistair
Clark, a world-recognised social and environmental expert, the
Company also recently appointed Mr Addis Alemayehou as an
independent Non-executive Director of the Company with effect from
the closing of the Company's Annual General Meeting ("AGM") held on
22 July 2024. Addis is a senior figure in the Ethiopian business
community, including a prominent role advising major international
corporations with long-standing operations therein.
Mark Tyler, a non-executive
director of the Company, retired from the Company at the conclusion
of the AGM.
The senior project planning and
finance teams are unchanged, the project management team in
Ethiopia has been expanded with Early Works and most recruitment
will trigger with the launch of Major Works.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under
Article 17 of MAR.
Enquiries
KEFI Gold and Copper plc
|
|
Harry Anagnostaras-Adams (Managing
Director)
|
+357 99457843
|
John Leach (Finance
Director)
|
+357 99208130
|
|
|
SP Angel Corporate Finance LLP (Nominated
Adviser)
|
+44 (0) 20 3470 0470
|
Jeff Keating, Adam Cowl
|
|
|
|
Tavira Securities Limited (Lead Broker)
|
+44 (0) 20 7100 5100
|
Oliver Stansfield, Jonathan
Evans
|
|
|
|
IFC Advisory Ltd (Financial PR and IR)
|
+44 (0) 20 3934 6630
|
Tim Metcalfe, Florence
Chandler
|
|
|
|
3PPB LLC International (Non-UK IR)
|
|
Patrick Chidley
|
+1 (917) 991 7701
|
Paul Durham
|
+1 (203)
940 2538
|
Condensed interim consolidated statements of comprehensive
income
(unaudited) (All amounts in GBP thousands unless otherwise
stated)
|
Notes
|
Six months
ended
30 June 2024
Unaudited
£'000
|
|
Six
months
ended
30 June 2023
Unaudited
£'000
|
|
|
|
|
|
Revenue
|
|
-
|
|
-
|
Exploration expenses
|
|
-
|
|
-
|
Gross loss
|
|
-
|
|
-
|
Administration expenses
|
|
(3,283)
|
|
(1,512)
|
Share-based payments
|
|
-
|
|
(62)
|
Share of loss from jointly
controlled entity
|
11
|
(2,239)
|
|
(2,368)
|
Reversal of impairment/(Impairment)
in jointly controlled entity
|
11
|
64
|
|
(203)
|
Gain from dilution of equity
interest in joint venture
|
11
|
833
|
|
1,169
|
Operating loss
|
|
(4,625)
|
|
(2,976)
|
Foreign exchange
(loss)/gain
|
|
(4)
|
|
12
|
Finance expense
|
|
(1,470)
|
|
(452)
|
Loss before tax
|
|
(6,099)
|
|
(3,416)
|
Tax
|
|
-
|
|
-
|
Loss for the period
|
|
(6,099)
|
|
(3,416)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
(6,099)
|
|
(3,416)
|
Other comprehensive loss:
|
|
|
|
|
Exchange differences on translating
foreign operations
|
|
-
|
|
-
|
Total comprehensive loss for the
period
|
|
(6,099)
|
|
(3,416)
|
|
|
|
|
|
Basic loss per share
(pence)
|
4
|
(0.10)
|
|
(0.08)
|
The notes are an integral part of
these unaudited condensed interim consolidated financial
statements.
Condensed interim consolidated statements of financial
position
(unaudited) (All amounts in GBP
thousands unless otherwise stated)
|
Notes
|
|
Unaudited
30 June
2024
|
|
Audited
31
Dec
2023
|
ASSETS
|
|
|
£'000
|
|
£'000
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
142
|
|
100
|
Intangible assets
|
6
|
|
36,264
|
|
34,716
|
Investments in JV
|
11
|
|
-
|
|
-
|
|
|
|
36,406
|
|
34,816
|
Current assets
|
|
|
|
|
|
Financial assets at fair value
through OCI
|
|
|
-
|
|
-
|
Trade and other
receivables
|
5
|
|
1,155
|
|
528
|
Cash and cash equivalents
|
|
|
982
|
|
192
|
|
|
|
2,137
|
|
720
|
|
|
|
|
|
|
Total assets
|
|
|
38,543
|
|
35,536
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
Issued capital and reserves
attributable to owners of the parent
|
|
|
|
|
|
Share capital
|
7
|
|
6,059
|
|
4,965
|
Deferred Shares
|
7
|
|
23,328
|
|
23,328
|
Share premium
|
7
|
|
54,169
|
|
48,922
|
Share options reserve
|
8
|
|
1,989
|
|
3,675
|
Accumulated losses
|
|
|
(60,839)
|
|
(56,483)
|
|
|
|
24,706
|
|
24,407
|
Non-controlling interest
|
|
|
1,832
|
|
1,709
|
Total equity
|
|
|
26,538
|
|
26,116
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
9
|
|
9,029
|
|
7,307
|
Loans and borrowings
|
10
|
|
2,976
|
|
2,113
|
|
|
|
12,005
|
|
9,420
|
|
|
|
|
|
|
Total liabilities
|
|
|
12,005
|
|
9,420
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
|
38,543
|
|
35,536
|
|
|
|
|
|
|
The notes are an integral part of
these unaudited condensed interim consolidated financial
statements.
On 29 September 2024, the Board of
Directors of KEFI Gold and Copper Plc authorised these unaudited
condensed interim financial statements for issue.
John Leach
Finance Director
Condensed interim consolidated statement of changes in
equity
(unaudited) (All amounts in GBP
thousands unless otherwise stated)
Attributable to the equity
holders of parent
|
Share
Capital
|
Deferred
shares
|
Share
premium
|
Share
options and warrants reserve
|
Accumulated losses
|
Total
|
NCI
|
Total
equity
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 January 2023 Audited
|
3,939
|
23,328
|
43,187
|
3,747
|
(48,781)
|
25,420
|
1,562
|
26,982
|
Loss for the period
|
-
|
-
|
-
|
-
|
(3,416)
|
(3,416)
|
-
|
(3,416)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total Comprehensive
Income
|
-
|
-
|
-
|
-
|
(3,416)
|
(3,416)
|
-
|
(3,416)
|
Recognition of share-based
payments
|
-
|
-
|
-
|
62
|
-
|
62
|
-
|
62
|
Cancellation & Expiry of
options/warrants
|
-
|
-
|
-
|
(200)
|
200
|
-
|
-
|
-
|
Issue of share capital and
warrants
|
919
|
-
|
5,513
|
-
|
-
|
6,432
|
-
|
6,432
|
Share issue costs
|
-
|
-
|
(311)
|
-
|
-
|
(311)
|
-
|
(311)
|
Warrants issued fair
value
|
-
|
|
-
|
(141)
|
141
|
-
|
-
|
-
|
Non-controlling interest
|
-
|
-
|
-
|
-
|
(59)
|
(59)
|
59
|
-
|
At 30 June 2023 Unaudited
|
4,858
|
23,328
|
48,389
|
3,468
|
(51,915)
|
28,128
|
1,621
|
29,749
|
Loss for the year
|
-
|
-
|
-
|
-
|
(4,480)
|
(4,480)
|
-
|
(4,480)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total Comprehensive
Income
|
-
|
-
|
-
|
-
|
(4,480)
|
(4,480)
|
-
|
(4,480)
|
Recognition of share-based
payments
|
-
|
-
|
-
|
207
|
-
|
207
|
-
|
207
|
Issue of share capital and
warrants
|
107
|
-
|
643
|
-
|
-
|
750
|
-
|
750
|
Share issue costs
|
-
|
-
|
(110)
|
-
|
-
|
(110)
|
-
|
(110)
|
Non-controlling interest
|
-
|
-
|
-
|
-
|
(88)
|
(88)
|
88
|
-
|
At 1 January 2024 Audited
|
4,965
|
23,328
|
48,922
|
3,675
|
(56,483)
|
24,407
|
1,709
|
26,116
|
Loss for the period
|
-
|
-
|
-
|
-
|
(6,099)
|
(6,099)
|
-
|
(6,099)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total Comprehensive
Income
|
-
|
-
|
-
|
-
|
(6,099)
|
(6,099)
|
-
|
(6,099)
|
Recognition of share-based
payments
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
Cancellation & Expiry of
options/warrants
|
-
|
-
|
-
|
(1,866)
|
1,866
|
-
|
-
|
-
|
Issue of share capital and
warrants
|
1,094
|
-
|
5,760
|
-
|
-
|
6,854
|
-
|
6,854
|
Share issue costs
|
-
|
-
|
(333)
|
-
|
-
|
(333)
|
-
|
(333)
|
Warrants issued fair
value
|
|
|
(180)
|
180
|
|
-
|
-
|
-
|
Non-controlling interest
|
-
|
-
|
-
|
-
|
(123)
|
(123)
|
123
|
-
|
At 30 June 2024 Unaudited
|
6,059
|
23,328
|
54,169
|
1,989
|
(60,839)
|
24,706
|
1,832
|
26,538
|
The following describes the nature
and purpose of each reserve within owner's equity:
Reserve
|
Description and purpose
|
Share capital
|
amount subscribed for share capital
at nominal value.
|
Deferred shares
|
under the restructuring of share
capital, ordinary shares of in the capital of the Company were
sub-divided into deferred share.
|
Share premium
|
amount subscribed for share capital
in excess of nominal value, net of issue costs.
|
Share options and warrants
reserve
|
reserve for share options and
warrants granted but not exercised or lapsed.
|
Foreign exchange reserve
|
cumulative foreign exchange net
gains and losses recognized on consolidation.
|
Accumulated losses
|
cumulative net gains and losses
recognized in the statement of comprehensive income, excluding
foreign exchange gains within other comprehensive
income.
|
NCI (Non-controlling
interest)
|
the portion of equity ownership in a
subsidiary not attributable to the parent company.
|
The notes are an integral part of
these unaudited condensed interim consolidated financial
statements.
Condensed interim consolidated statements of cash
flows
(unaudited) (All amounts in GBP
thousands unless otherwise stated)
|
Notes
|
|
Six months ended 30 June
2024
|
|
Six
months ended 30 June 2023
|
|
|
|
£'000
|
|
£'000
|
Cash flows from operating
activities:
|
|
|
|
|
|
Loss before tax
|
|
|
(6,099)
|
|
(3,416)
|
Adjustments for:
|
|
|
|
|
|
Share-based benefits
|
|
|
-
|
|
62
|
Gain from dilution of equity
interest in joint venture
|
11
|
|
(833)
|
|
(1,169)
|
Share of loss in jointly controlled entity
|
|
|
2,239
|
|
2,368
|
Impairment loss in
jointly controlled entity
|
|
|
(64)
|
|
203
|
Depreciation
|
|
|
9
|
|
15
|
Finance expense
|
|
|
1,304
|
|
417
|
Exchange differences
|
|
|
5
|
|
2
|
Cash outflows from operating
activities before working capital changes
|
|
|
(3,439)
|
|
(1,511)
|
|
|
|
|
|
|
Interest paid
|
|
|
(746)
|
|
-
|
|
|
|
|
|
|
Changes in working
capital:
|
|
|
|
|
|
Trade and other
receivables
|
|
|
(627)
|
|
40
|
Trade and other payables
|
|
|
2,540
|
|
1,122
|
|
|
|
|
|
|
Net cash used in operating
activities
|
|
|
(2,272)
|
|
(349)
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
Purchases of plant and
equipment
|
|
|
(51)
|
|
(3)
|
Proceeds from repayment of financial
asset
|
|
|
-
|
|
-
|
Project exploration and evaluation
costs
|
6
|
|
(1,625)
|
|
(1,567)
|
Advances to jointly controlled entity
|
|
|
-
|
|
(795)
|
Net cash used in investing
activities
|
|
|
(1,676)
|
|
(2,365)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
Proceeds from issue of share
capital
|
7
|
|
2,654
|
|
2,228
|
Listing and issue costs
|
7
|
|
(334)
|
|
(311)
|
Bank short term loan
|
|
|
413
|
|
-
|
Repayment short-term working capital
bridging finance
|
10.2
|
|
(1,595)
|
|
(167)
|
Proceeds short-term working capital
bridging finance
|
10.2
|
|
3,600
|
|
1,140
|
Net cash from financing
activities
|
|
|
4,738
|
|
2,890
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents
|
|
|
790
|
|
176
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
At beginning of period
|
|
|
192
|
|
220
|
At end of period
|
|
|
982
|
|
389
|
The notes are an integral part of
these unaudited condensed interim consolidated financial
statements.
Notes to the condensed interim consolidated financial
statements
For
the six months to 30 June 2024 (unaudited) and
2023
(All amounts in GBP thousands unless otherwise
stated)
1. Incorporation and principal
activities
Country of incorporation
The Company was incorporated in
United Kingdom as a public limited company on 24 October
2006. Its registered office is at 27/28 Eastcastle Street,
London W1W 8DH.
Principal activities
The principal activities of the
Group for the period are:
·
|
To explore for mineral deposits of
precious and base metals and other minerals that appear capable of
commercial exploitation, including topographical, geological,
geochemical and geophysical studies and exploratory
drilling.
|
·
|
To evaluate mineral deposits
determining the technical feasibility and commercial viability of
development, including the determination of the volume and grade of
the deposit, examination of extraction methods, infrastructure
requirements and market and finance studies.
|
·
|
To develop, operate mineral
deposits and market the metals produced.
|
2.
Summary of significant accounting policies
The principal accounting policies
applied in the preparation of these condensed interim consolidated
financial statements are set out below. These policies have been
applied consistently throughout the period presented in these
condensed interim consolidated financial statements unless
otherwise stated.
Basis of preparation and consolidation
These condensed interim financial
statements are unaudited.
The unaudited interim condensed
consolidated financial statements for the period ended 30 June 2024
have been prepared in accordance with International Accounting
Standard 34: Interim Financial Reporting. IFRS comprise the
standard issued by the International Accounting Standard Board
("IASB"), and IFRS Interpretations Committee ("IFRICs") as issued
by the IASB as adopted for use in the UK.
These unaudited interim condensed
consolidated financial statements include the financial statements
of the Company and its subsidiary undertakings. They have been
prepared using accounting bases and policies consistent with those
used in the preparation of the consolidated financial statements of
the Company and the Group for the year ended 31 December 2023.
These unaudited interim condensed consolidated financial statements
do not include all the disclosures required for annual financial
statements, and accordingly, should be read in conjunction with the
consolidated financial statements and other information set out in
the Group's annual report for the year ended 31 December
2023.
Going concern
The financial report has been
prepared on the going concern basis which contemplates the
continuity of normal business activities and the realisation of
assets and the settlement of liabilities in the ordinary course of
business.
The annual financial statements of
Kefi Gold and Copper Plc for the year ended 31 December 2023 were
prepared in accordance with UK adopted international accounting
standards in conformity with the requirements of the Companies Act
2006. The Independent Auditors' Report on the Group's 2023 Annual
Report was an unqualified audit opinion with a material uncertainty
relating to going concern noted.
We draw attention to the interim
financial statements, which indicate that the Group incurred a net
loss of £6,099,000 (2023: loss of £3,416,000) during the period
ended 30 June 2024 and, as of that date, the Group's current
liabilities exceeded its current assets. As stated in this note
events or conditions, along with other matters as set forth in this
note, indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going
concern.
The assessment of the Group's
ability to continue as a going concern involves judgment regarding
future funding available for the development of the Tulu Kapi Gold
project, exploration of the Saudi Arabia exploration properties and
for working capital requirements. In considering the Group's
ability to continue as a Going Concern, management have considered
funds on hand at the date of approval of the financial statements,
planned expenditures covering a period of at least 12 months from
the date of approving these financial statements and the Group's
strategic objectives as part of this assessment.
As at the date of approval of the
financial statements, the Group expects to be able to obtain
financing to fund activities until financial close of the Tulu Kapi
project. The Group has previously been successful in arranging such
funding when required and expects to be able to continue to do so.
Financing will also be required to continue the development of the
Tulu Kapi Gold Project through to production as set out in a
company announcement 'Tulu Kapi Operational Update' dated 20 August
2024.
The Group's ability to continue as
a going concern is contingent on raising additional capital and/or
the successful exploration and subsequent exploitation of its areas
of interest through sale or development. If sufficient additional
capital is not raised, the going concern basis of accounting may
not be appropriate, and the Group may have to realise its assets
and extinguish its liabilities other than in the ordinary course of
business and at amounts different from those stated in the
financial report. No allowance for such circumstances has been made
in the financial report.
Notwithstanding the existence of
material uncertainty that may cast significant doubt over the Group
and Company's ability to continue as a going concern based on
historical experience and ongoing proactive discussions with
stakeholders, the Board has a reasonable expectation that the Group
will be able to raise further funds to meet its obligations.
Subject to the above, the Directors have concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
3. Operating
segments
The Group has two distinct
operating segments, being that of mineral exploration and
development and corporate activities. The Group's exploration and
development activities are in Ethiopia and Saudi Arabia held
through jointly controlled entities in each jurisdiction with KEFI
administration and corporate activities based in Cyprus.
Unaudited Six months ended 30 June
2024
|
Corporate
|
Ethiopia
|
Saudi
Arabia
|
|
Total
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
Operating loss (Excluding loss from
jointly controlled entity)
|
(3,212)
|
(71)
|
-
|
|
(3,283)
|
Other finance costs
|
(1,470)
|
-
|
-
|
|
(1,470)
|
Foreign exchange
(loss)/profit
|
(232)
|
228
|
-
|
|
(4)
|
Gain on dilution of joint
venture
|
|
|
833
|
|
833
|
Share of (loss)/Profit from jointly
controlled entity
|
-
|
-
|
(2,239)
|
|
(2,239)
|
Reversal of impairment loss
in jointly controlled entity
|
-
|
-
|
64
|
|
64
|
Loss before tax
|
(4,914)
|
157
|
(1,342)
|
|
(6,099)
|
Tax
|
|
|
|
|
-
|
Loss for the period
|
|
|
|
|
(6.099)
|
|
|
|
|
|
|
Total assets
|
1,268
|
37,275
|
-
|
|
38,543
|
Total liabilities
|
(10,964)
|
(1,041)
|
-
|
|
(12,005)
|
Unaudited Six months ended 30 June
2023
|
Cyprus
|
Ethiopia
|
Saudi
Arabia
|
|
Total
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
Operating loss (Excluding loss from
jointly controlled entity)
|
(1,528)
|
(46)
|
-
|
|
(1,574)
|
Other finance costs
|
(452)
|
-
|
-
|
|
(452)
|
Foreign exchange profit
|
(772)
|
784
|
-
|
|
12
|
Gain on dilution of jointly
controlled entity
|
-
|
|
1,169
|
|
1,169
|
Share of loss from jointly
controlled entity
|
-
|
-
|
(2,368)
|
|
(2,368)
|
Reversal of impairment loss in
jointly controlled entity
|
-
|
-
|
(203)
|
|
(203)
|
Loss before tax
|
(2,752)
|
738
|
(1,402)
|
|
(3,416)
|
Tax
|
|
|
|
|
-
|
Loss for the period
|
|
|
|
|
(3,416)
|
|
|
|
|
|
|
Total assets
|
974
|
33,490
|
-
|
|
34,464
|
Total liabilities
|
(4,066)
|
(649)
|
-
|
|
(4,715)
|
4. Loss per
share
The calculation of the basic and
fully diluted loss per share attributable to the ordinary equity
holders of the parent is based on the following data:
|
Six months ended 30 June
2024
|
|
Six
months ended 30 June 2023
|
Unaudited
|
Unaudited
|
£'000
|
£'000
|
Net loss attributable to equity
shareholders
|
(6,099)
|
|
(3,416)
|
Net loss for basic and diluted loss
attributable to equity shareholders
|
(6,099)
|
|
(3,416)
|
Weighted average number of ordinary
shares for basic loss per share (000's)
|
5,561,263
|
|
4,044,481
|
Weighted average number of ordinary
shares for diluted loss per share (000's)
|
5,825,698
|
|
5,169,887
|
Loss per share:
|
|
|
|
Basic loss per share
(pence)
|
(0.10)
|
|
(0.08)
|
|
|
|
|
|
|
|
|
| |
The effect of share options and
warrants on the loss per share is anti-dilutive.
5. Trade and other
receivables
|
|
|
30 June
2024
|
|
31
Dec
2023
|
|
|
|
Unaudited
|
|
Audited
|
|
|
|
£'000
|
|
£'000
|
Upfront Service Fee
|
|
|
665
|
|
-
|
Other receivables
|
|
|
35
|
|
124
|
VAT
|
|
|
455
|
|
404
|
|
|
|
|
|
|
|
|
|
1,155
|
|
528
|
6. Intangible
assets
|
|
|
|
|
|
|
|
|
|
Total exploration and project
evaluation costs
|
|
|
|
|
£ '000
|
Cost
|
|
|
|
|
At 1 January 2024
(Audited)
|
|
|
|
34,982
|
Additions
|
|
|
|
1,548
|
At 30 June 2024
(Unaudited)
|
|
|
|
36,530
|
|
|
|
|
|
Accumulated Impairment
|
|
|
|
|
At 1 January 2024
(Audited)
|
|
|
|
266
|
At 30 June 2024
(Unaudited)
|
|
|
|
266
|
|
|
|
|
|
Net Book Value at 30 June 2024
(Unaudited)
|
|
|
|
36,264
|
Net Book Value at 31 December 2023
(Audited)
|
|
|
|
|
|
|
|
34,716
|
|
|
|
|
| |
7. Share
capital
|
Number of
shares
000's
|
|
Share
Capital
£'000
|
Deferred
shares
£'000
|
Share
premium
£'000
|
Total
£'000
|
Issued and fully paid
|
|
|
|
|
|
|
At 1 January 2024
(Audited)
|
4,965,125
|
|
4,965
|
23,328
|
48,922
|
77,215
|
Share Equity Placement 8 March
2024
|
750,000
|
|
750
|
-
|
3,750
|
4,500
|
Share Equity Placement 26 March
2024
|
165,986
|
|
166
|
-
|
830
|
996
|
Share Equity Placement 28 May
2024
|
177,982
|
|
178
|
|
1,180
|
1,358
|
Share issue costs
|
-
|
|
-
|
-
|
(333)
|
(333)
|
Warrants issue fair value
cost
|
-
|
|
-
|
-
|
(180)
|
(180)
|
At 30 June 2024
(Unaudited)
|
6,059,093
|
|
6,059
|
23,328
|
54,169
|
83,556
|
Issued capital
On the 8 March 2024 the Company
admitted 750,000,000 new ordinary shares of the Company at a
placing price of 0.6 pence per Ordinary Share.
On the 26 March 2024 the Company
admitted 165,986,055 new ordinary shares of the Company at a
placing price of 0.6 pence per Ordinary Share. Shares valued at £495,916 were placed with retail investors,
while £500,000 worth of shares were issued to settle
remuneration.
On the 28 May 2024 the Company
admitted 177,981,851 new ordinary shares of 0.1p each at a price of
0.763p per share. These shares were issued to certain key
advisers to the Company in consideration for their
services.
8. Share Based
Payments
Warrants
Pursuant to shareholder approval
at the AGM, certain placement Broker
commissions and advisory services were satisfied through the grant
of 49,900,000 warrants. Each Warrant entitles the Broker and
Adviser to subscribe for one new Ordinary Share at a price of 0.6
pence per share, exercisable for a period of three years from 26
March 2024.
Details of warrants outstanding as
at 30 June 2024:
Grant date
|
Expiry date
|
Exercise
price
|
|
Unaudited Number of
warrants*
|
|
|
|
|
000's
|
18 May
2022
|
17 May
2025
|
0.80p
|
|
75,000
|
30 June
2023
|
02 July
2026
|
0.70p
|
|
39,286
|
26 March
2024
|
26 March
2027
|
0.60p
|
|
49,900
|
|
|
|
|
|
|
|
|
|
164,186
|
The estimated fair values of the
warrants were calculated using the Black Scholes option pricing
model. The inputs into the model and the
results are as follows:
Date
|
Closing share price at issue date
|
Exercise price
|
Expected volatility
|
Expected life
|
Risk
free rate
|
Expected dividend yield
|
Discount factor
|
Estimated fair value
|
26 March 2024
|
0.57p
|
0.60p
|
90%
|
3yrs
|
5.5%
|
Nil
|
0%
|
0.36p
|
|
Weighted average ex.
price
|
Unaudited Number of
warrants*
000's
|
|
|
|
Outstanding warrants at 1 January
2024
|
1,51p
|
1,007,383
|
- granted
|
0.60p
|
49,900
|
-
cancelled/expired/forfeited
|
1.60p
|
(893,097)
|
- exercised
|
|
-
|
Outstanding warrants at 30 June
2024
|
0.72p
|
164,186
|
These warrants were issued to
advisers and shareholders of the Group.
Share options reserve
Details of share options
outstanding as at 30 June 2024:
Grant date
|
Expiry date
|
Exercise
price
|
|
Unaudited
Number of shares*
000's
|
|
|
|
|
|
17-Mar-21
|
16-Mar-25
|
2.55p
|
|
92,249
|
12-Sep-23
|
11-Sep-30
|
0.60p
|
|
8,000
|
|
|
|
|
100,249
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June
2024
|
|
31
Dec
2023
|
|
|
|
|
Unaudited
|
|
Audited
|
|
Opening amount
|
|
|
3,675
|
|
3,747
|
|
Warrants issued costs
|
|
|
180
|
|
110
|
|
Share options charges relating to
employees
|
|
|
-
|
|
42
|
|
Share options issued to directors
and key management (Note 12.1)
|
|
|
-
|
|
81
|
|
Forfeited options
|
|
|
-
|
|
36
|
|
Exercised warrants
|
|
|
-
|
|
-
|
|
Expired warrants
|
|
|
(1,664)
|
|
(178)
|
|
Expired options
|
|
|
(202)
|
|
(163)
|
|
Closing Amount
|
|
|
1,989
|
|
3,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted average ex.
price
|
Unaudited
Number of
shares*
000's
|
|
|
|
Outstanding options at 1 January
2024
|
2.58p
|
109,849
|
- granted
|
-
|
-
|
- forfeited
|
-
|
-
|
- cancelled/expired
|
4.50p
|
(9,600)
|
Outstanding options at 30 June
2024
|
2.49p
|
100,249
|
The Company has not issued share
options to directors, employees and advisers to the Group during
the period.
The option agreements contain
provisions adjusting the exercise price in certain circumstances
including the allotment of fully paid Ordinary shares by way of a
capitalisation of the Company's reserves, a subdivision or
consolidation of the Ordinary shares, a reduction of share capital
and offers or invitations (whether by way of rights issue or
otherwise) to the holders of Ordinary shares.
The estimated fair values of the
options were calculated using the Black Scholes option pricing
model.
9. Trade and other
payables
|
|
|
30 June
2024
Unaudited
|
|
31 Dec
2023
Audited
|
|
|
|
£'000
|
|
£'000
|
Accruals and other
payables
|
|
|
3,301
|
|
2,877
|
Other loans
|
|
|
99
|
|
100
|
Payable to jointly controlled entity
(Note 11 and Note 12.3)
|
|
|
5,071
|
|
3,728
|
Payable to Key Management and
Shareholder (Note 12.3)
|
|
|
558
|
|
602
|
|
|
|
9,029
|
|
7,307
|
10. Loans and
Borrowings
10.1.
Short-Term
Working Capital Bridging Finance
|
Currency
|
Interest
|
Maturity
|
Repayment
|
Unsecured working capital bridging
finance
|
GBP
|
See
Table below
|
On
Demand
|
See
Table below
|
|
|
|
|
|
Ethiopian Bank Short term
Loan
|
ETB
|
20%
|
March
2025
|
See
Table below
|
The Group has the option to access
working capital from certain existing stakeholders. This unsecured
working capital bridging finance is short‐term debt which is unsecured and
ranked below other loans. Bridging Finance facilities bear a fixed
interest rate and were set off in shares by the lenders
participation in the Company placements. If the Group is unable to
repay this financing, it will only be repaid after any other debt
securities have been settled, if applicable.
Unsecured working capital bridging finance
|
Balance 1 Jan
2024
Audited
|
Drawdown
Amount
Unaudited
|
Transaction
Costs
Unaudited
|
Interest
Unaudited
|
Repayment
Shares/Payment
Netting¹
Unaudited
|
Repayment
Cash
Unaudited
|
Period
Ended
30 June
2024
Unaudited
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Repayable in cash in less than a
year
|
2,113
|
3,600
|
-
|
1,304
|
(2,113)
|
(2,341)
|
2,563
|
|
Ethiopian Bank Loan
|
-
|
413
|
-
|
-
|
-
|
-
|
413
|
|
Total
|
2,113
|
4,013
|
-
|
1,304
|
(2,113)
|
(2,341)
|
2,976
|
|
10.2.
Reconciliation
of liabilities arising from financing activities
|
|
Cash Flows
|
|
|
Unsecured working capital bridging finance
|
Balance
1 Jan
2024
Audited
|
Inflow
Unaudited
|
(Outflow)
Unaudited
|
Finance Costs
Unaudited
|
Shares/Payment
Netting¹
Unaudited
|
Balance
30 June 2024
Unaudited
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Short term loans
|
2,113
|
4,013
|
(2,341)
|
1,304
|
(2,113)
|
2,976
|
|
2,113
|
4,013
|
(2,341)
|
1,304
|
(2,113)
|
2,976
|
|
|
|
|
|
|
|
| |
¹ The
lenders agreed to set off their short term loans
owed by Company against amounts owed by the lenders as a result of
their participation in the Company share placements during the
year. The payment netting procedure was utilized to streamline the
cash settlement process for participating in share placement and
repaying bridging finance.
11. Joint venture
agreements
KEFI is the technical partner with
a 24.75% shareholding in GMCO with ARTAR holding the other 75.25%.
KEFI provides GMCO with technical advice and assistance, including
personnel to manage and supervise all exploration and technical
studies. ARTAR provides administrative advice and assistance to
ensure that GMCO remains in compliance with all governmental and
other procedures. GMCO has five Directors, of whom two are
nominated by KEFI. GMCO is treated as a jointly controlled entity
and has been equity accounted. KEFI has reconciled its share in
GMCO's losses.
During the current year, all
relevant activities of GMCO required the unanimous consent of its
five directors. Under terms of the original GMCO shareholders
agreement, if a shareholder's ownership stake falls below 25%, the
remaining shareholder has the right, but not the obligation, to
acquire the interest at fair value. "Fair value" is determined as
an estimate of the price the transferring party would have received
if it had sold all its shares in GMCO in an arm's length exchange,
driven by typical business considerations.
Amendments to the shareholders'
agreement provide flexibility in the event a shareholder stake
falls below the 25% threshold. These amendments include adjustments
to the composition of GMCO's board based on shareholding
percentages and amendment to the process for nominating and
appointing the Managing Director/Chief Executive Officer. In
addition, indemnification and reimbursement clauses were added for
parties undertaking sole risk projects, with guidelines for
compensating GMCO for costs incurred in such endeavours, as well as
a framework for continuing projects independently.
The Company elected not to
contribute its pro rata share of joint venture expenditure during
the period (KEFI share being £832,983) and thus KEFI's interest
reduced from 26.8% to 24.75% under the dilution provisions of the
joint venture agreement. The carrying value of GMCO in the accounts
of KEFI is nil (due to KEFI's conservative policy of expensing GMCO
costs when incurred) and this release from liability resulted in a
gain of £832,983 in the profit and loss statement.
Management conducted a review to
determine whether it still retained significant influence over GMCO
and concluded that this remained the case. GMCO is still a jointly
controlled entity of KEFI, supported by factors including KEFI's
continued significant shareholding, representation on the Board of
Directors, active involvement in policy-making processes, and other
relevant considerations.
A loss of £2,239,000 was recognized
by the Group for the period ended 30 June 2024 (2023: £2,571,000)
representing the Group's share of losses for the period. As at 30
June 2024, KEFI owed ARTAR an amount of £ 5,070,000 (2023:
£1,776,000).
|
|
Period
Ended
30 June
2024
Unaudited
|
|
Opening Balance
|
-
|
|
Additional Investment during the
period
|
1,342
|
|
FX Gain on advances made to
GMCO
|
-
|
|
Profit on Dilution
|
833
|
|
Share of loss in jointly controlled
entity
|
(2,239)
|
|
Additional impairment loss
|
64
|
|
Closing Balance
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
12. Related party
transactions
The following transactions were
carried out with related parties:
12.1. Compensation of key
management personnel
The total remuneration of the
Directors and other key management personnel was as
follows:
|
Six months ended 30 June
2024
|
|
Six
months ended 30
June 2023
|
|
|
Unaudited
£'000
|
|
Unaudited
£'000
|
|
Directors' fees
|
272
|
|
258
|
|
Directors' other benefits
|
22
|
|
18
|
|
Share-based benefits to
directors
|
-
|
|
34
|
|
Director's bonus
|
285
|
|
-
|
|
Key management fees
|
174
|
|
163
|
|
Key management other benefits
|
-
|
|
-
|
|
Share-based benefits to key
management
|
-
|
|
6
|
|
Key management bonus
|
50
|
|
-
|
|
|
803
|
|
479
|
|
Share-based benefits
The Company has issued share
options to directors and key management. On 27 March
2014, the Board
approved a new share option scheme ("the Scheme") for directors,
senior managers and employees. The Scheme formalised the existing
policy that options may be granted over ordinary shares
representing up to a maximum of 10 per cent of the Group's issued
share capital.
12.2. Transactions with
shareholders and related parties
|
|
|
Transaction to
period
end
30 June
2024
|
|
Transaction to period
end
30 June
2023
|
|
|
|
Unaudited
|
|
Unaudited
|
Name
|
Nature of transactions
|
Relationship
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GPR Dehler
|
Receiving of management and other
professional services
|
Key Management and
Shareholder
|
224
|
|
163
|
Nanancito Limited/Mr.
Nicoletto
|
Receiving of management and other
professional services
|
Shareholder
|
-
|
|
141
|
|
|
|
224
|
|
304
|
12.3. Payable to related
parties
|
|
|
|
|
|
The Group
|
|
|
30 June
2024
|
|
31 Dec
2023
|
|
|
|
Unaudited
|
|
Audited
|
Name
|
Nature of transactions
|
Relationship
|
£'000
|
|
£'000
|
|
|
|
|
|
|
Payable to Key Management and
Shareholders
|
Fees for services
|
Key Management and
Shareholders
|
558
|
|
602
|
|
|
|
|
|
|
|
|
|
558
|
|
602
|
13. Capital
commitments
|
|
30-Jun-24
|
|
31-Dec-23
|
|
Unaudited
|
Audited
|
|
¹£'000
|
£'000
|
|
|
|
|
|
|
|
|
Tulu Kapi Project costs¹
|
|
1,237
|
|
776
|
|
|
|
|
|
Saudi Arabia Exploration costs
committed to field work that has been recommenced
|
|
4,867
|
|
5,113
|
¹ Once the Company and its partners
in Tulu Kapi Gold Mine Share Company Limited start development at
the Tulu Kapi Gold Project (the "Project") the Company will have
project capital commitments.
14. Contingent
Liability
14.1 Performance-Based Short-Term Incentive Plan
(STI)
The Company has implemented a
performance-based short-term incentive plan (STI) approved by the
Remuneration Committee and the Board. This plan is designed to
align with the Company's strategic objectives and to appropriately
recognise and reward employee contributions as the Company and its
projects advance. The STI plan supersedes any previously
communicated incentives and is contingent upon the achievement of
specified milestones related to the Company's projects.
STI Bonuses
The STI plan outlines three
specific bonuses, each contingent upon the successful achievement
of key milestones associated with the Tulu Kapi Gold Project. The
bonuses are allocated as follows:
Directors and Key Management Personnel¹
|
STI Bonus
1¹
|
STI Bonus
2¹
|
STI Bonus
3¹
|
|
|
£'000
|
£'000
|
£'000
|
Total
|
Executive Chairman²
|
400
|
400
|
400
|
1,200
|
Finance Director²
|
400
|
200
|
200
|
800
|
PDMR and Other Managers
|
500
|
750
|
800
|
2,050
|
Total
|
1,300
|
1,350
|
1,400
|
4,050
|
· STI
Bonus 1: Payable upon the granting of credit approvals by the
lenders to the Tulu Kapi Gold Project¹.
· STI
Bonus 2: Payable upon project finance lenders permitting debt
disbursement to commence for Tulu Kapi, and no earlier than 12
months after STI Bonus 1 has been earned¹.
· STI
Bonus 3: Payable upon the commencement of production at Tulu Kapi,
and no earlier than 12 months after STI Bonus 2 has been
earned¹.
¹ Recipients may elect to receive
the STI Bonus in either shares or cash. If taken in shares, the
issue price will be based on the VWAP (Volume Weighted Average
Price) for the month following the achievement of the relevant
milestone. If taken in cash, the timing of the payment is subject
to cash availability as determined by the Board, but in any event,
no later than 6 months after the relevant milestone is
achieved.
² Except in cases of change of
control or cessation of employment in the designated role, the
payment of STI Bonuses 1, 2, and 3 is also contingent on the
Company's share price meeting specific conditions:
· STI
Bonus 1: The closing mid-price of the Company's shares must be
above 1.5p for five consecutive trading days.
· STI
Bonus 2: Additionally, the closing mid-price of the Company's
shares must be above 2.5p for five consecutive trading
days.
· STI
Bonus 3: Additionally, the closing mid-price of the Company's
shares must be above 3.0p for five consecutive trading
days.
Any shares issued as payment for
the STI Bonus, except in cases of change of control or cessation of
employment in the designated role, will be subject to a 12-month
lock-in period. Any cash-paid STI bonus must be covered by the Tulu
Kapi project finance package.
The STI plan represents a
contingent liability as defined under IFRS, where the obligation is
dependent on the occurrence of uncertain future events related to
the Company's performance and project milestones. These potential
obligations are recognised only if and when the specified
milestones are achieved, and the respective conditions are met. At
this stage, the Company has no present obligation, and thus no
provisions have been recognised in the financial statements. The
contingent liabilities will be reassessed regularly, and any
changes will be disclosed accordingly.
|
15. Events after the reporting
date
During July and August 2024, after
the end of the reporting period, the Ethiopian Birr experienced a
major devaluation against all major foreign currencies. This
devaluation is considered a non-adjusting event as it reflects
conditions that arose after the reporting period.
The Group's subsidiary in Ethiopia
holds assets and liabilities denominated in Ethiopian Birr, and the
devaluation may have an impact on the subsidiary's financial
position and results. As of the reporting date, management is in
the process of assessing the financial implications, including the
potential impact on the Group's consolidated financial statements.
The full extent of the impact is not yet quantifiable, and
appropriate measures are being considered to mitigate any adverse
effects.