TIDMPERE
RNS Number : 7714X
Pembridge Resources plc
28 April 2023
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS AMED BY
REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310.
28 April 2023
2022 Financial Statements Released
London, United Kingdom - Pembridge Resources plc (LSE: PERE)
("Pembridge" or the "Company") announces that, on 27 April 2023,
the Board of Directors of the Company approved the Annual Report
and Consolidated Financial Statements for the year ended 31
December 2022.
Highlights
-- Loss for the year of $8,013,000, driven mainly by
mark-to-market revaluation of the Company's investment in Minto
Metals Corp ("Minto") (2021 - profit of $20,580,000, being driven
by exceptional non-cash gains)
-- Basic loss per share of 8.3c (2021: earnings per share 24.4c)
-- Net assets at 31 December 2022 of $3,232,000 (2021: $10,894,000)
-- Loan from Chairman and CEO term extended from December 2022 until December 2025
Post Year End
-- Repayment of $3m convertible loan notes deferred from May 2023 until May 2025
-- Ongoing negotiations on timing of payment to Capstone of
remaining USD 5 million purchase price and timing of receipt from
Minto of remaining surety funding provided by Pembridge and
accumulated interest
-- Cost saving measures introduced
-- Interest due on loan to Gati Al-Jebouri added to principal
Negotiations are ongoing between Capstone Copper Corp
("Capstone"), Minto Metals Corp ("Minto") and Pembridge, involving
the timing of both the $ 5 million final payment due to Capstone
for the acquisition of the Minto mine and of Minto repaying the
last surety funding due to Pembridge, being the remaining principal
of CAD 1 million and accumulated interest including the amount that
was due on 31 March 2023. Pembridge's management expect these
negotiations to reach a constructive conclusion in the near
term.
The Company has recently introduced cost saving measures, the
main ones being that its CEO and Chairman has agreed to defer his
salary effective from March until September 2023 and the company's
CFO has agreed to move to a part-time basis with a corresponding
cost saving effective from 1 April.
In addition, because of Pembridge's presently limited cash
resources, it has agreed with Gati Al-Jebouri that the interest
that became payable on its loan from him on 31 March 2023 will be
added to the loan principal.
The financial statements are available in pdf form on the
Company's website using the link below.
https://www.pembridgeresources.com/investors/financial-reports
The Company's Annual General Meeting will be held on 28 June
2023.
Extracts from the consolidated financial statements follow.
Gati Al-Jebouri, Chief Executive Officer and Chairman of the
Board of Pembridge said:
"The results of Pembridge for 2022 are affected by the
challenges experienced during the year by Minto, in which Pembridge
holds a 11.1% investment, which is reflected in the financial
statements as the fall in the market value of that investment and
deferral of the remaining surety repayments and accrued interest
due to Pembridge from Minto.
In response to this, to improve the Company's solvency we have
extended the repayment term of our convertible loan notes by two
years and of the loan from myself by three years, and we have
recently introduced measures to reduce our operating costs, all of
which is intended to preserve the value of the Company for its
investors.
We are negotiating with Minto and Capstone in respect of the
timing of the $5m payment due to Capstone and the remaining surety
funding due to Pembridge from Minto and we hope to announce a
constructive outcome on these matters in the near term."
Cautionary Statement
This News Release includes certain "forward-looking statements"
which are not comprised of historical facts. Forward-looking
statements include estimates and statements that describe the
Company's future plans, objectives or goals, including words to the
effect that the Company, or management, expects a stated condition
or result to occur. Forward-looking statements may be identified by
such terms as "believes", "anticipates", "expects", "estimates",
"may", "could", "would", "will", or "plan". Since forward-looking
statements are based on assumptions and address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Although these statements are based on information
currently available to the Company, the Company provides no
assurance that actual results will meet management's expectations.
Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information.
Forward-looking information in this news release includes, but is
not limited to, the Company's intentions regarding its objectives,
goals or future plans and statements. Factors that could cause
actual results to differ materially from such forward-looking
information include, but are not limited to, the Company's ability
to predict or counteract the potential impact of COVID-19
coronavirus on factors relevant to the Company's business, failure
to identify additional mineral resources, failure to convert
estimated mineral resources to reserves with more advanced studies,
the inability to eventually complete a feasibility study which
could support a production decision, the preliminary nature of
metallurgical test results may not be representative of the deposit
as a whole, delays in obtaining or failures to obtain required
governmental, environmental or other project approvals, political
risks, uncertainties relating to the availability and costs of
financing needed in the future, changes in equity markets,
inflation, changes in exchange rates, fluctuations in commodity
prices, delays in the development of projects, capital, operating
and reclamation costs varying significantly from estimates and the
other risks involved in the mineral exploration and development
industry, and those risks set out in the Company's public
documents. Although the Company believes that the assumptions and
factors used in preparing the forward-looking information in this
news release are reasonable, undue reliance should not be placed on
such information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
S
NOTES TO EDITORS
Pembridge is a mining company that is listed on the standard
segment of the Official List of the FCA and trading on the main
market for listed securities of London Stock Exchange plc.
Pembridge has an investment in Minto Metals Corp, a British
Columbia incorporated business listed on the TSX Venture Exchange
under the symbol "MNTO" that operates the Minto mine in Yukon,
Canada.
About Minto Metals Corp
Minto Metals Corp operates the underground copper-gold-silver
mine located in central Yukon, approximately 240 kilometres north
of the capital Whitehorse along the Klondike Highway. In excess of
US$350 million of capital expenditure has been invested into Minto
operations since site construction began in 2006. The Minto mine
was in continuous production between 2007 and 2018, when the mine
was placed onto temporary care and maintenance. Pembridge acquired
the Minto mine from Capstone Mining Corporation in June 2019 and
restarted operations in October 2019.
Enquiries:
Pembridge Resources plc: +44 (0) 7905 125740
Gati Al-Jebouri, Chief Executive Officer and Chairman of the
Board
David James, Chief Financial Officer
Tavira Financial Ltd: +44 (0)20 7100 5100
Jonathan Evans
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 December 31 December
2022 2021
US$'000 US$'000
Administrative, legal and professional
expenses (1,309) (1,186)
Exceptional items
- revaluation of Capstone liability - (1,429)
- payment of Capstone liability by Minto
in March 2021 - 5,000
- a ssumption of the Capstone liability
by Minto Metals Corp - 15,000
- mark-to-market valuation of investment
in Minto Metals Corp (6,215) 3,800
Foreign exchange gain 448 40
Operating (loss) / profit (7,076) 21,225
Finance income 200 274
Finance cost (1,137) (919)
(Loss) / Profit before income tax (8,013) 20,580
Income tax - -
(Loss) / profit for the year (8,013) 20,580
Other comprehensive income (2) -
Total comprehensive (loss) / income
for the year (8,015) 20,580
============ ============
(Loss) / profit is attributable to:
Non-controlling interest (10) -
Shareholders of the Company (8,003) 20,580
------------ ------------
(Loss) / profit for the year (8,013) 20,580
============ ============
Total comprehensive (loss) / income is
attributable to:
Non-controlling interest (10) -
Shareholders of the Company (8,005) 20,580
------------ ------------
Total comprehensive (loss) / income
for the year (8,015) 20,580
Year ended Year ended
31 December 31 December
Earnings per share expressed in US cents 2022 2021
(Loss) / profit per share attributable
to the equity holders of the Company
* Basic (8.3c) 24.4c
* Diluted (8.3c) 19.1c
All amounts relate to continuing activities.
Consolidated Statement of Financial Position
31 December 31 December
2022 2021
US$'000 US$'000
Assets
Non-current assets
Investments in financial assets 9,854 16,036
Promissory note from Minto - 5,000
Total non-current assets 9,854 21,036
Current assets
Promissory note from Minto 5,000 -
Trade and other receivables 1,894 4,157
Cash and cash equivalents 617 280
Total current assets 7,511 4,437
Total assets 17,365 25,473
Non-Current liabilities
Borrowings (5,753) (3,000)
Deferred consideration due to Capstone - (5,000)
Total non-current liabilities (5,753) (8,000)
Current liabilities
Trade and other payables (380) (434)
Borrowings (3,000) (6,145)
Deferred consideration due to Capstone (5,000) -
Total current liabilities (8,380) (6,579)
Total liabilities (14,133) (14,579)
Net assets 3,232 10,894
Equity
Share capital 1,276 1,212
Share premium 10,246 10,000
Capital redemption reserve 1,011 1,011
Translation reserve (2) -
Other reserve 325 293
Retained deficit (9,625) (1,622)
Equity attributable to shareholders
of the Company 3,231 10,894
Non-controlling interests 1 -
Total equity 3,232 10,894
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Share Share Capital Other Retained Total Non-controlling Total
capital premium redemption reserve deficit interest Equity
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1
January
2021 965 9,222 1,011 46 (22,202) (10,958) - (10,958)
--------- --------- ------------ --------- --------- --------- ---------------- ---------
Profit for the
year - - - - 20,580 20,580 - 20,580
- - - - - - - -
Other
comprehensive
income for the
year
Total comprehensive
income for the
year - - - - 20,580 20,580 - 20,580
--------- --------- ------------ --------- --------- --------- ---------------- ---------
Proceeds from
shares
issued 247 789 - - - 1,036 - 1,036
Direct cost of
shares issued - (11) - - - (11) - (11)
Share based
payments - - - 247 - 247 - 247
Total transactions
with owners
recognised
directly in equity 247 778 - 247 - 1,272 - 1,272
Balance at 1
January
2022 1,212 10,000 1,011 293 (1,622) 10,894 - 10,894
Loss for the year - - - - (8,003) (8,003) (10) (8,013)
Other
comprehensive
income for the
year - - - (2) - (2) - (2)
Total comprehensive
income for the
year - - - (2) (8,003) (8,005) (10) (8,015)
--------- --------- ------------ --------- --------- --------- ---------------- ---------
Proceeds from
shares
issued 64 246 - - - 310 11 321
Share based
payments - - - 32 - 32 - 32
Total transactions
with owners
recognised
directly in equity 64 246 - 32 - 342 11 353
--------- --------- ------------ --------- --------- --------- ---------------- ---------
Balance at 31
December 2022 1,276 10,246 1,011 323 (9,625) 3,231 1 3,232
========= ========= ============ ========= ========= ========= ================ =========
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Nominal value of shares issued.
Share premium Amount subscribed for share capital in excess
of nominal value, less share issue costs.
Capital redemption Reserve created on cancellation of deferred shares.
reserve
Other reserve Cumulative fair value of warrants and share options
granted, together with the equity element of the
convertible loan.
Translation reserve Cumulative translation adjustment from retranslation
of group undertakings with functional currencies
other than USD.
Retained deficit Cumulative net gains and losses recognised in
the statement of comprehensive income.
Non-controlling Non-controlling interests represent the portion
interest of the equity of a subsidiary not attributable
either directly or indirectly to the parent company
and are presented separately in the Consolidated
Statement of comprehensive income and within equity
in the Consolidated statement of financial position,
distinguished from parent company shareholders'
equity.
Consolidated Cash flow statement
Year Ended Year Ended
31 December 31 December
2022 2021
US$'000 US$'000
Cash flows from operating activities
(Loss) / profit for the year (8,013) 20,580
Adjusted for:
Net finance costs 937 645
Unrealised FX on debt included in administrative
expenses (668) (31)
Share based payments 32 247
Revaluation of Capstone liability - (3,571)
Assumption of the Capstone liability by
Minto Metals Corp - (15,000)
Mark-to-market valuation of investment
in Minto Metals Corp 6,215 (3,800)
Movement in fair value of derivatives 56 (26)
(1,441) (956)
Movements in working capital
Decrease in trade and other receivables 2,451 -
Decrease in trade and other payables (101) (55)
------------ ------------
Cash generated / (used) by operations 909 (1,011)
Income taxes recovered / (paid) - -
Net cash generated from / (used in) operating
activities 909 (1,011)
Cash flows from investing activities
Purchase of investments (33) (3,034)
Net cash used in investing activities (33) (3,034)
Cash flows from financing activities
Interest payments (420) -
Repayment of borrowings (333) (20)
Proceeds from borrowings - 3,304
Proceeds from issuance of shares 214 1,025
Net cash (used in) / generated from financing
activities (539) 4,309
Net increase in cash and cash equivalents 337 264
Cash and cash equivalents at beginning
of year 280 16
Cash and cash equivalents at end of year 617 280
BASIS OF PREPARATION
The Financial Statements have been prepared in accordance with
UK-adopted international accounting standards.
The Financial Statements have been prepared under the historical
cost convention, except as modified for assets and liabilities
recognised at fair value on a business combination and contingent
consideration measured at fair value.
The preparation of Financial Statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
high degree of judgement or complexity, or areas where assumptions
and estimates are significant to the Financial Statements, are
disclosed in Note 4.
Going concern
The Financial Statements have been prepared on a going concern
basis, which assumes that the Company will continue operating in
the foreseeable future and will be able to service its debt
obligations, realise its assets and discharge its liabilities as
they fall due.
The Company and Group have a planning, budgeting and forecasting
process to determine the funds required to support their operations
and expansionary plans. The budget for 2023 assumes repayments from
Minto during 2023 and cost saving measures that are mentioned in
the Strategic Report.
Negotiations are ongoing between Capstone Copper Corp
("Capstone"), Minto and Pembridge in respect of the timing of both
the USD 5 million final payment due to Capstone and of Minto
repaying the last surety funding due to Pembridge, being the
remaining principal of CAD 1 million and accumulated interest
including the amount that was due on 31 March 2023. The Group's
ability to continue as a going concern is dependent on the outcome
of these negotiations. Pembridge's management expect these
negotiations to reach a constructive conclusion but, because there
can be no assurance of their outcome, a material uncertainty exists
which may cast doubt on the Group's ability to continue as a going
concern.
In June 2021 Pembridge raised debt of USD 3 million using 14%
Convertible Loan Notes, which was used exclusively for the purchase
of additional newly issued shares in Minto Metals Corp. ("Minto")
when it became listed on the Toronto Stock Exchange at the IPO
price of CAD 2.60 per share, giving Pembridge an overall equity
stake in Minto of 11.1%. The Convertible Loan Notes had a maturity
date of 31 May 2023. Since 31 December 2022, Pembridge has reached
agreement with the Convertible Loan Note holders to extend the
repayment period to May 2025, with interest payments being made at
the same 14% per annum each year on or around 31 May of each year,
with Pembridge having the right to defer payment of interest until
May 2025 if the cash position of Pembridge does not permit the
payment of interest. In return, Pembridge has agreed that the
accrued interest up to 31 January 2023 is to be settled at the time
of the new terms being accepted by each Convertible Loan Note
investor and for the conversion price to be reduced from GBP0.08 to
GBP0.0375 per share, expressed as 4.65 USD cents at the exchange
rate of GBP1:USD1.24 when the arrangement was proposed.
Pembridge does not presently plan to sell its holding in Minto,
but Minto is now a publicly listed company so this can be done if
necessary to raise funds. A restriction on pre-existing owners
selling shares means that, as at 31 December 2022, Pembridge could
sell 60% of its shares, with the restriction on the remaining 40%
lifting on 25 May 2023, so that it would be possible to sell these
shares if the cash proceeds were needed.
Having prepared forecasts based on current resources, assessing
methods of obtaining additional finance, the Directors believe the
Company and Group has sufficient resources to meet its obligations
for a period of 12 months from the date of approval of these
Financial Statements. Taking these matters into consideration, the
Directors continue to adopt the going concern basis of accounting
in preparing these Financial Statements. The Financial Statements
do not include the adjustments that would be required should the
going concern basis of preparation no longer be appropriate.
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