TIDMMTL
RNS Number : 2223M
Metals Exploration PLC
20 September 2021
METALS EXPLORATION PLC
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2021
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 2021.
Highlights
-- Gold production of 35,316 ounces (H1 2020: 31,940 ounces), up 10.6%;
-- Gold recoveries of 81.0% (H1 2020: 68.5%), up 18.2%;
-- Operating profit of US$14.2 million achieved (H1 2020: US$9.2 million), up 54.3%;
-- Positive cashflow from operations of US$21.3 million (H1 2020: US$8.3 million), up 156.6%;
-- Net Debt as at 30 June 2021 US$111.0 million (H1 2020: US$126.2 million), down 12.0%, and
-- New Independent Chairman and three new Non-Executive Directors appointed.
COVID-19
-- Ongoing impacts from the pandemic do not appear to threaten
the medium and long term viability of the Group's operations.
-- Secured a supply of approved COVID-19 vaccinations sufficient
to fully vaccinate the entire workforce, including on-site
contractors - vaccination programme will commence in late September
2021.
Production Summary
Runruno Project
---------- -------------- --------------------
Production Summary Actual Actual Actual
---------- -------------- --------------------
6 Months 12 Months
to 6 Months to
30 June to 31 December
Units 2021 30 June 2020 2020
--------- --------------
Mining
--------- -------------- --------------------
Ore Mined Tonnes 713,742 1,125,138 2,473,400
---------- -------------- --------------------
Waste Mined Tonnes 4,537,749 4,414,126 8,922,496
---------- -------------- --------------------
Total Mined Tonnes 5,251,491 5,539,264 11,395,896
---------- -------------- --------------------
Au Grade Mined g/tonne 1.27 1.44 1.40
---------- -------------- --------------------
Strip Ratio 5.92 3.92 3.32
-------------- --------------------
Processing
--------- -------------- --------------------
Ore Milled Tonnes 1,048,290 1,047,099 2,057,274
---------- -------------- --------------------
Gold (Au) Grade g/tonne 1.29 1.39 1.41
---------- -------------- --------------------
Sulphur Grade % 1.11 1.28 1.22
---------- -------------- --------------------
Au Milled (contained) ounces 43,620 46,939 93,568
---------- -------------- --------------------
Recovery % 81.0 68.5 72.2
---------- -------------- --------------------
Au Poured ounces 35,316 31,940 67,552
---------- -------------- --------------------
Sales
--------- -------------- --------------------
Au Sold ounces 34,745 32,121 68,510
---------- -------------- --------------------
Au Price US$/oz 1,797 1,647 1,782
---------- -------------- --------------------
Review of Operations
COVID-19 Impact
During H1 2021 the Philippines suffered from a new wave of
COVID-19 infections that spread to the neighbouring cities/towns
near the Runruno mine site. Despite enhanced on-site testing and
strict site access protocols approximately 35 on-site cases of
COVID-19 were detected. Interruptions to mining/processing
operations were limited.
The continued spread of the 'Delta' variant throughout Asia
however is evidence that the COVID-19 pandemic continues to be a
source of concern and ongoing management for all businesses. To
reduce the risk of future infections and to protect our workforce
the Company has secured a supply of Philippine government approved
COVID-19 vaccinations sufficient to fully vaccinate the entire
workforce, including on-site contractors. It is expected that our
vaccination programme will commence during September 2021.
All COVID-19 cases detected, along with the Company's response,
have been reported to the appropriate government agencies. The
Company continues to be compliant with all relevant government
directives with regards COVID-19.
Other than disruptions due to the Q2 2021 on-site outbreak of
COVID-19, the main operational disruption from the pandemic has
been the ongoing and regularly changing restrictions on the
movement of people in and out of the country.
Notwithstanding these issues H1 2021 resulted in gold sales of
US$62.4 million, an increase of 18.0% over H1 2020 (US$52.9
million). Operations resulted in positive free cash flow of US$21.3
million, a 156.3% increase on H1 2020 (US$8.3 million).
The outstanding safety record of the operation continues with in
excess of 14 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.
Finance
As at H1 2021 end the Group's net debt was US$109.6 million (H1
2020: US$125.5 million). Total debt repayments made during H1 2021
were in excess of forecast at US$20.6 million (H1 2020: US$nil).
Details of these debt facilities can be found in Note 6. The
continued positive operating performance has strengthened the Group
balance sheet such that it now shows a positive net asset
balance.
Mining
Mining production of ore and waste was 5.3 Mt for H1 2021 (H1
2020: 5.5Mt) and the total ore mined was 0.7Mt (H1 2020: 1.1Mt).
Total ore movement was below budget and significantly impacted by a
government prohibition of the use of explosives for several weeks
at the beginning of the year.
Access to Stage 3 of the mine plan, which is critical to
advancing mining operations, has been hampered during H1 2021 by
delays in the resettlement of the illegal miners from this area.
However, the resettlement process has progressed during (and since)
the half-year period, although the Company does not yet have full
access to the areas required to develop Stage 3. Work is ongoing in
relation to the resettlement of the remaining illegal miners from
Stages 3, 4 and 5 of the mine plan.
The programme of infill resource and mine plan drilling that
commenced in Q3 2020 and was expected to be completed by the end of
Q2 2021 has been delayed due to disruptions caused by the COVID-19
pandemic and equipment issues. In addition, further drilling is
required in Stages 3 to 5 of the mine plan; however, this has been
delayed due to the need to complete the resettlement of illegal
miners in the area. Operations are targeting to complete this
drilling during the 2022-2023 budget cycles. Notwithstanding the
above, management is expecting to develop an updated resource model
by calendar end 2021.
Process plant
Throughput for H1 2021 of 1.05Mt (H1 2020: 1.05Mt) was on
budget, however, operations were managed to a lower feed grade.
Ongoing delays in accessing mine plan Stages 3 and 4 continues to
affect the head grade with higher grade material from Stage 3 now
not scheduled to be accessed until Q1 2022.
Gold production for H1 2021 was 35,316 ounces at a significantly
higher recovery rate of 81.0% (H1 2020: 31,940 ounces at a recovery
rate of 68.5%) as a result of improvements in all aspects of
process plant operations.
The 4(th) blower to the BIOX circuit was installed during Q3
2021, with the aim to increase the available air for, and hence
increase efficiency of, the BIOX circuit.
Implementation of minor design modifications to the flotation
circuit continue; with the aim to increase the consistency of gold
recovery of this circuit.
During H1 2021, major shutdowns were undertaken to install the
SAG mill variable speed drive, to replace the SAG mill liners and
to upgrade electrical cables to the BIOX and mill circuits.
Unplanned downtime consisted in the main of tails line failures and
conveyor belt repairs.
Residual Storage Impoundment ("RSI")
The RSI is operating to design with an excellent environmental
performance record. Staged construction of the RSI continues with
development of Stage 5.5 completed in August 2021.
The performance of the RSI is continuously monitored by an
independent international consulting group. Engineering and
geotechnical studies on finalising the location and structure of
the final in-rock spillway are well advanced and should be
completed by calendar end 2021.
Community & Government Relations
Productive relations with both the community and the government
continue. The Company continues its consultation with the
government in relation to removing illegal miners, their
infrastructure and dwellings from those areas scheduled to be mined
as part of mine plan Stages 3 to 5. Access to Stage 3 of the mine
is being developed.
Corporate
In April 2021, the Company appointed three new Non-Executive
Directors:
- David Cather as Independent Non-Executive Chairman; formerly
CEO (Mining) of Abu Dhabi Capital Group and Avocet Mining plc
- Jeremy Wrathall as Independent Non-Executive Director; CEO of
Cornish Lithium Ltd and formerly Global Head of Natural Resources -
London at Investec
- Andrew Chubb as Non-Executive Director; Partner and Head of
Mining at investment bank Hannam & Partners
Further to this, on 31 August 2021 Steven Smith replaced Andrew
Stancliffe as the MTL Luxemburg nominated Non-Executive
Director.
These appointments have significantly strengthened the Board as
they have brought considerable experience and knowledge across
mining, mining finance and investment areas.
This Announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("UK MAR").
Upon the publication of this Announcement, this inside information
is now considered to be in the public domain.
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
-------------------------
Nilesh Patel +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 2021
Notes 6 month period ended 6 month period ended Year ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
US$ US$ US$
Continuing Operations
Revenue 62,439,246 52,890,892 122,098,677
Cost of sales (44,363,193) (39,906,887) (83,258,806)
---------------------- ----------------------- -----------------------
Gross profit 18,076,053 12,984,005 38,839,871
Administrative expenses (3,897,168) (3,805,015) (8,377,651)
---------------------- ----------------------- -----------------------
Operating profit 14,178,885 9,178,990 30,462,220
---------------------- ----------------------- -----------------------
Impairment loss 5 (798,275) - (1,292,814)
Loss on sale of assets (78,206) - -
Net finance and other
costs (7,324,104) (10,521,655) (19,403,985)
Share of (loss)/ profit
of associates (6,642) (4,783) 2,625
Profit/(loss) before tax 5,971,658 (1,347,448) 9,768,046
Tax expense (29,910) (29,634) (19,749)
---------------------- ----------------------- -----------------------
Profit/(loss) for the
period attributable to
equity holders of the
parent 5,941,748 (1,377,082) 9,748,297
====================== ======================= =======================
Other comprehensive
income :
Items that may be
re-classified
subsequently
to profit or loss:
Exchange differences on
translating foreign
operations (1,428,287) 788,963 2,947,074
Items that will not be
re-classified
subsequently
to profit or loss:
Re-measurement of pension
liabilities - - (28,655)
---------------------- ----------------------- -----------------------
Total comprehensive
profit/(loss) for the
period attributable to
equity holders of the
parent 4,513,461 (588,119) 12,666,716
====================== ======================= =======================
Earnings per share:
Basic cents per share 4 0.29 (0.07) 0.47
Diluted cents per share 0.28 (0.07) 0.46
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
as at 30 June 2021
Notes 30 June 2021 30 June 2020 (Unaudited) 31 December 2020
(Unaudited) (Audited)
US$ US$ US$
Non-current assets
Property, plant and
equipment 99,810,635 104,544,555 103,159,132
Other intangible assets 65,396 52,675 52,030
Investment in associate
companies 157,391 156,625 164,033
Trade and other
receivables 5,606,159 4,978,226 5,500,577
105,639,581 109,732,081 108,875,772
------------------------ ------------------------- ------------------------
Current assets
Inventories 16,524,182 10,924,581 14,620,743
Trade and other
receivables 7,023,876 8,313,738 11,807,274
Cash and cash
equivalents 4,702,995 7,322,055 8,931,792
28,251,053 26,560,374 35,359,809
------------------------ ------------------------- ------------------------
Non-current liabilities
Loans 6 (85,041,950) (8,222,018) (98,150,386)
Trade and other payables (1,938,387) (973,000) (1,799,862)
Deferred tax liabilities (838,661) (765,814) (808,757)
Provision for mine
rehabilitation (3,310,074) (2,898,035) (3,291,388)
(91,129,072) (12,858,867) (104,050,393)
------------------------ ------------------------- ------------------------
Current liabilities
Trade and other payables (10,095,399) (13,188,760) (12,032,486)
Loans - current portion 6 (29,264,218) (124,611,179) (29,264,218)
(39,359,617) (137,799,939) (41,296,704)
------------------------ ------------------------- ------------------------
Net assets/(liabilities) 3,401,945 (14,366,351) (1,111,516)
======================== ========================= ========================
Equity
Share capital 27,950,217 27,950,217 27,950,217
Share premium account 195,855,125 195,855,125 195,855,125
Acquisition of
non-controlling
interest reserve (5,107,515) (5,107,515) (5,107,515)
Translation reserve 16,262,872 15,533,048 17,691,159
Re-measurement reserve 38,148 66,803 38,148
Other reserves 1,526,937 1,526,937 1,526,937
Profit and loss account (233,123,839) (250,190,966) (239,065,587)
------------------------ ------------------------- ------------------------
Equity attributable to
equity holders of the
parent 3,401,945 (14,366,351) (1,111,516)
======================== ========================= ========================
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2021
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 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
goodwill arising 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 six months ended 30 June 2020
Acquisition of
Share non-controlling
Share premium interest Translation Re-measurement Other Profit and
capital account reserve reserve reserve reserve loss account Total equity
US$ US$ US$ US$ US$ US$ US$ US$
----------- ------------ ---------------- ------------ --------------- ---------- -------------- -------------
Balance at 1
January 2020 27,950,217 195,855,125 (5,107,515) 14,744,085 66,803 1,526,937 (248,813,884) (13,778,232)
Exchange
differences
on
translating
foreign
operations - - - 788,963 - - - 788,963
Loss for the
period - - - - - - (1,377,082) (1,377,082)
----------- ------------ ---------------- ------------ --------------- ---------- -------------- -------------
Total
comprehensive
loss for the
period - - - 788,963 - - (1,377,082) (588,119)
Transfer to
profit & loss - - -
----------- ------------ ---------------- ------------ --------------- ---------- -------------- -------------
Balance at 30
June 2020 27,950,217 195,855,125 (5,107,515) 15,533,048 66,803 1,526,937 (250,190,966) (14,366,351)
----------- ------------ ---------------- ------------ --------------- ---------- -------------- -------------
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
goodwill arising 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 2020
Acquisition of
Share non-controlling
Share premium interest Translation Re-measurement Other Profit and
capital account reserve reserve reserve reserve loss account Total equity
US$ US$ US$ US$ US$ US$ US$ US$
----------- ------------ ---------------- ------------ --------------- ------------ -------------- -------------
Balance at 1
January 2020 27,950,217 195,855,125 (5,107,515) 14,744,085 66,803 1,526,937 (248,813,884) (13,778,232)
Exchange
differences
on
translating
foreign
operations - - - 2,947,074 - - - 2,947,074
Change in
pension
liability - - - - (28,655) - - (28,655)
Profit for the
year - - - - - - 9,748,297 9,748,297
----------- ------------ ---------------- ------------ --------------- ------------ -------------- -------------
Total
comprehensive
profit/(loss)
for the
period - - - 2,947,074 (28,655) - 9,748,297 12,666,716
Balance at 31
December 2020 27,950,217 195,855,125 (5,107,515) 17,691,159 38,148 1,526,937 (239,065,587) (1,111,516)
----------- ------------ ---------------- ------------ --------------- ------------ -------------- -------------
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
goodwill arising 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 CASH FLOW STATEMENT for the six
months ended 30 June 2021
6 month period ended 6 month period ended Year ended
30 June 2021 (unaudited) 30 June 2020 (unaudited) 31 December 2020
Notes (audited)
US$ US$ US$
Net cash arising from operating
activities 21,274,714 8,282,707 28,131,523
------------------------- ------------------------- ------------------------
Investing activities
Purchase of property, plant and
equipment (4,636,801) (5,657,881) (12,731,516)
Purchase of intangible assets (331,878) (28,256) (76,443)
Proceeds from sale of plant and
equipment 60,000 - 250,000
------------------------- ------------------------- ------------------------
Net cash used in investing
activities (4,908,679) (5,686,137) (12,557,959)
------------------------- ------------------------- ------------------------
Financing activities
Repayment of borrowings -
principal and interest (20,600,000) - (11,332,074)
Net cash arising from financing
activities (20,600,000) - (11,332,074)
------------------------- ------------------------- ------------------------
Net(decrease)/increase in cash
and cash equivalents (4,233,965) 2,596,570 4,251,490
Cash and cash equivalents at
beginning of period 8,931,792 4,818,981 4,818,981
Foreign exchange difference 5,168 (93,496) (138,679)
Cash and cash equivalents at end
of period 4,702,995 7,322,055 8,931,792
========================= ========================= ========================
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 17 September 2021. 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 200 Strand, London, WC2R 1DJ.
The condensed consolidated interim financial statements for the
period 1 January 2021 to 30 June 2021 are unaudited. In the opinion
of the Board of Directors, the condensed consolidated interim
financial statements for the period presents fairly the financial
position, and results from operations and cash flows for the period
in confor mity with the generally accepted accounting principles
consistently applied. The condensed consolidated interim financial
statements incorporate unaudited comparative figures for the
interim period fro m 1 January 2020 to 30 June 2020 and the audited
financial year ended 31 December 2020.
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 2020, 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 2021.
These condensed consolidated interim financial statements have
been prepared under the historical cost convention. There have been
no changes in accounting policies as described in the 2020 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.
To date the Group has managed to limit the impact of COVID-19 on
its operations. The main impact to have arisen during the COVID-19
crises is the limitation on movement of personnel to/from the
project site and in/out of the Philippines. Although the pandemic
continues throughout the Philippines, including the Group recording
numerous on-site positive cases of COVID-19 during the half-year,
COVID-19 related pressures are being well managed. The longer the
impacts of the pandemic continue the greater the risk to
operations. However, the Group's ability to keep the project in a
positive cash flow position since the commencement of the pandemic
gives reason to believe the impact of COVID-19 will not affect the
future going concern status of the Group.
Although as at 30 June 2021, 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's October 2020 debt restructure removed any set
principal or interest repayment schedule. Excess free cashflow will
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. As a result of this debt restructure, and the ongoing
existence of a US$5million positive net working capital balance,
together with the sustained positive cash flows being produced by
the Runruno Project, the Directors believe there is no material
uncertainty over the Group's going concern.
The continuing viability of the Group and its ability to operate
as a going concern and to meet its commitments as and when they
fall due is dependent upon the ability of the Group to operate the
Runruno Project successfully so as to generate sufficient cash
flows to enable the Group to settle its liabilities (including the
restructured debt facilities) as they fall due.
On the basis of the above, t he Board of Directors believe that
the Runruno Project will continue to operate successfully and
produce positive cash flows. As a result the Board of Directors
consider it appropriate that the half-year financial information
should be prepared on a going concern basis.
4. Earnings per share
The earnings per share was calculated on the basis of net
profit/(loss) attributable to equity shareholders divided by the
weighted average number of ordinary shares.
6 month period ended 30 June 6 month period ended 30 June Year ended
2021 2020 31 December 2020
(unaudited) (unaudited) (audited)
US$ US$ US$
Earnings
Net profit/(loss) attributable
to equity shareholders for the
purpose of basic and diluted
earnings per share 5,941,748 (1,377,082) 9,748,297
Number of shares
Weighted average number of
ordinary shares for the
purpose of basic earnings per
share 2,071,334,586 2,071,334,586 2,071,334,586
------------------------------- ------------------------------- ------------------
Number of dilutive shares under
warrant 30,950,049 30,950,049 30,950,049
Weighted average number of
ordinary shares for the
purpose of diluted earnings
per share 2,102,284,635 2,102,284,635 2,102,284,635
------------------------------- ------------------------------- ------------------
Basic earnings cents per share 0.29 (0.07) 0.47
Diluted earnings cents per
share 0.28 (0.07) 0.46
------------------------------- ------------------------------- ------------------
5. Impairment charges
6 month period ended 30 June 6 month period ended 30 June Year ended
2021 2020 31 December 2020
(unaudited) (unaudited) (audited)
US$ US$ US$
Exploration expenditure write
off 285,855 - 17,523
Other receivables* 507,159 - 1,269,745
Other 5,261 - 5,546
------------------------------- ------------------------------- ------------------
Total 798,275 - 1,292,814
=============================== =============================== ==================
* Other receivables include VAT/Import duties on importations
and other goods and services and stamp duties. Although until July
2022 the Group operates under an exemption from these paying taxes
the Group continues to have little success in advancing its legal
challenges to recover these past paid government imposts, and
accordingly an impairment charge has been raised. In addition an
impairment charge has been raised against advances made to
associates.
6. Loans
On 28 May 2015, the Company 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").
On 23 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 now 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 2021 was
US$42,410,937 (30 June 2020: US$70,818,508).
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 under the debt restructuring 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
Facility 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 2021 was US$73,314,888 (30 June
2020: US$62,014,689).
The Group's outstanding loan positions were:
June 2021 June 2020 December 2020
US$ US$ US$
Total loans due within one year* 29,264,218 124,611,179 29,264,218
=========== ============ ==============
Total loans due after more than one year* 85,041,950 8,222,018 98,150,386
=========== ============ ==============
* 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.
7. Contingent liabilities
The Group has no contingent liabilities identified as at 30 June
2021 (2020: US$nil).
8. Subsequent events
There have been no subsequent disclosable events.
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END
IR MZGMLMLLGMZM
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September 20, 2021 02:00 ET (06:00 GMT)
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