TIDMZIOC
RNS Number : 2469C
Zanaga Iron Ore Company Ltd
28 September 2018
28 September 2018
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2018
Zanaga Iron Ore Company Limited ("ZIOC" or the "Company") (AIM:
ZIOC) is pleased to announce its unaudited interim results for the
six months ended 30 June 2018.
Highlights
-- Early Production Project ("EPP")
o Positive product test results
-- Pellet feed concentrate results confirmed a premium product
with an iron ore grade of 67.4% and low impurities is capable of
being produced at the Zanaga Iron Ore Project ("Zanaga Project")
from haematitic upper level orebody layers
-- Positive pellet test results from test work on pellets
produced using new cold pelletisation technology with potential to
provide significant cost benefits versus traditional pelletisation
plants. Process launched by Jumelles, with support of Glencore, to
ascertain commercial acceptability of Zanaga cold pellets with a
range of steel industry customers
o Cost estimations being secured from pellet plant developers
for the potential pelletisation component of the EPP project,
including assessment of both cold pelletisation and traditional
pelletisation solutions
-- Initial high level results indicate major capital and
operating cost savings through the development of a cold
pelletisation plant solution
-- High level cost estimates indicate that a traditional
pelletisation plant solution may present a viable economic solution
in spite of the higher costs
o Logistics routes for the EPP project to two potential exit
ports further defined - firm cost estimates under negotiation, with
further results expected in Q4 2018
o Study work underway to ascertain overall project feasibility
and scope of operations with the objective of defining the EPP's
economics
-- Port
o Non-binding Letter of Intent ("LOI") submitted to China Road
and Bridge Corporation (CRBC) by Mining Project Development Congo
SAU ("MPD Congo") and other mining companies to support CRBC's
discussions with Chinese funding institutions for the development
of the new bulk mineral port at Pointe-Indienne, Republic of
Congo
-- Appointment of Mr Jonathan Andrew Velloza ("Johnny Velloza")
to the board of ZIOC as an Independent Non-Executive Director on 6
September 2018
-- Cash balance of US$3.0m as at 30 June 2018 and US$2.8m at 31 August 2018
Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
"The first half of 2018 has been very positive for the Zanaga
Iron Ore Project and the Company. Supported by its shareholders,
Jumelles has made major progress in progressing the Zanaga Project
through the definition of a small scale early production project
solution (EPP Project). The EPP Project is made all the more
attractive due to the potential ability to produce high grade iron
ore products that are currently trading at a premium in the market.
We're also cautiously optimistic about the positive results from
the testing of the Zanaga product with a lower capital and
operating cost cold pelletisation technology that has shown
excellent results in its testing with a steel company and
independent laboratories. The future of iron ore particularly lies
in the production of high quality iron ore materials and the Zanaga
Project is well aligned to benefit from that trend going
forward.
We are also very pleased that Johnny Velloza has now joined the
Board of ZIOC. Johnny's extensive operational experience in the
mining industry, particularly in iron ore, will prove invaluable to
the Company as the Zanaga Project advances through the next phase
of technical study work.
We look forward to providing our shareholders with further
updates on the Early Production Project as the cost estimates are
received and compiled by the Zanaga project team."
Copies of the unaudited interim results for the six months ended
30 June 2018 are available on the Company's website at
www.zanagairon.com
The Zanaga Iron Ore Company Limited LEI number is
21380085XNXEX6NL6L23.
For further information, please contact:
Zanaga Iron Ore
Corporate Development and Andrew Trahar
Investor Relations Manager +44 20 7399 1105
Liberum Capital Limited
Nominated Adviser, Financial Christopher Britton
Adviser and Corporate Broker and Richard Crawley
+44 20 3100 2000
About us:
Zanaga Iron Ore Company Limited (AIM ticker: ZIOC) is the owner
of 50% less one share in the Zanaga Iron Ore Project based in the
Republic of Congo (Congo Brazzaville) through its investment in
associate. The Zanaga Iron Ore Project is one of the largest iron
ore deposits in Africa and has the potential to become a
world-class iron ore producer.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Business Review - Operations
Cash Reserves and Project Funding
As already reported in the Company's annual results published on
29 June 2018, Glencore and ZIOC agreed a 2018 Project Work
Programme and Budget for the Zanaga Project of US$1.3m plus US$0.2m
of discretionary spend dependent on certain workstreams requiring
capital. ZIOC agreed to contribute towards the work programme and
budget an amount comprising US$0.7m plus 49.99% of all
discretionary items approved jointly with Glencore. Ignoring any
entitlement to savings, ZIOC's potential contribution to the Zanaga
Project in 2018 is US$0.8m in total.
We are pleased to report that the Zanaga Project's activities
are currently running in line with the 2018 budget forecast.
As at 31 August 2018, ZIOC had cash reserves of US$2.8m and the
Board continues to take a very prudent approach to the management
of the business.
Changes to the Board of Directors
Mr Jonathan Andrew Velloza ("Johnny Velloza") joined the board
of ZIOC as an Independent Non-Executive Director following the
Company's Annual General Meeting on 6 September 2018. Mr Velloza
has a wealth of experience in the mining industry and is currently
completing his tenure as Deputy CEO and COO of Gem Diamonds Ltd.
Prior to this, he was with BHP Western Australia Iron Ore where he
was General Manager at Mining Area C, the largest iron ore mine in
the BHP portfolio, from 2013 to 2015, leading a number of
successful operational efficiency programs. He has also acted as a
Senior Exploration Manager in Zambia and Chile for BHP from
2011-2013, Operations Manager at AngloGold Ashanti from 2009-2010
and held numerous managerial positions at De Beers from
2001-2009.
Mr Velloza, aged 47, holds a Bachelor's degree in Mining
Engineering from The University of Johannesburg and a Bachelor's
degree in Business from The University of South Africa.
In addition, Mr Michael Haworth stepped down as a Director to
focus on other business commitments and retired at the Company's
Annual General Meeting on 5 September 2018.
Early Production Project Assessment (EPP)
As part of the Company's annual results published on 29 June
2018, the Company provided a comprehensive update on progress
relating to investigations into the potential for development of a
low capital cost project utilising existing road, rail and port
transportation infrastructure. The project is envisaged to mine and
beneficiate Zanaga's haematitic surface ores and produce either (a)
high quality iron ore pellet feed concentrate, or (b) high quality
iron ore pellets. Both of the target products would be expected to
receive significant price premiums in the iron ore market.
The Zanaga Project Team have made significant progress in
testing a new form of iron ore pellet, produced using a lower
capital and operating cost technology, the results of which have
been announced to shareholders on 29 June 2018 and 7 August
2018.
Following the success of the cold pelletisation test work,
Jumelles, supported by ZIOC and Glencore, has commenced a process
to assess customer acceptance of these new iron ore pellets. This
process includes engaging with steel mills who might become
substantial consumers of this product. As part of this process,
Jumelles as a member of the Glencore group has the opportunity to
utilise Glencore's extensive Iron Ore trading network.
Due to the continued rise in premiums for high quality iron ore
pellets, the Zanaga Project team also commenced the process of
securing capital and operating cost estimates for a conventional
pelletisation solution for the Zanaga Project. It is encouraging to
see the progress that is being made on establishing the viability
of developing this solution for the EPP Project, and initial
estimates provided to the Zanaga Project team indicate that an
additional degree of optionality could be available in determining
the potential viability of the EPP project using conventional
pelletisation solutions.
As indicated previously, the Company and its associate Jumelles
intend to be in a position to provide more detail on the outcomes
of the study work by the end of this year including an economic
assessment of the viability of the EPP project.
Cold pelletisation test results
On 30 June 2018, ZIOC announced the significant progress made in
the Zanaga Iron Ore Project's pelletisation test work programme
aimed at producing an industry acceptable iron ore pellet product
using a lower cost cold pelletisation process. The results showed
that the most recent batches of Zanaga cold pellets had met all
industry standard tests as determined by independent third party
laboratories.
Test work was then commissioned with the intention of
ascertaining commercial acceptability in the steel production
process. Two further 20kg samples of Zanaga cold pellets were sent
to a European steel mill as well as an accredited European
laboratory servicing the steel industry. The tests conducted by
these independent laboratories returned positive results within the
industry acceptable limits for conventional pellets.
These tests were undertaken by Jumelles, the joint venture
between the Company and Glencore, as part of the overall initiative
to establish the viability of an Early Production Project (EPP) as
described in the Company's Annual Report released on 30 June 2018.
As part of the ongoing work-streams, discussions are taking place
with steel mills to consider further steps and tests that need to
be taken in order to assess potential demand and pricing for Zanaga
pellets and pellet feed concentrate.
Iron Ore Market
Iron ore prices have continued to be supported by robust demand
from the steel industry in the first half of 2018. It is
particularly encouraging that price premiums for high quality iron
ore products, especially pellet feed concentrates and pellets
themselves, have increased over the period supported by China's
sustained drive to improve steel manufacturing efficiency and
reduce pollution.
We do not expect major increases in supply of iron ore, and
particularly not in high quality products with low impurities. We
expect the structural shift in demand for high quality products to
remain for the foreseeable future and the supply base to be unable
to meet it for some time.
New Mineral Port in Pointe-Indienne
In March 2013, the RoC signed a Memorandum of Understanding with
China Communications Construction Company ("CCCC"), and its
subsidiary China Road and Bridge Corporation ("CRBC"), for the
development of a new multi-user port facility 9km north of the
existing port of Pointe-Noire at Pointe Indienne, including a
deepwater bulk export facility for the iron ore industry. CRBC has
conducted a significant amount of work on this major project,
including a feasibility study on the port development.
ZIOC notes that there is still discussion between the RoC
Government, China EXIM Bank and China Road and Bridge Corporation
(CRBC) on the financing and development plan for the new bulk
materials port development north of Pointe Noire.
Advancement of the new port development could provide a key
catalyst in allowing the Zanaga 12Mtpa Stage One development
project to derisk and proceed towards seeking finance.
CRBC has confirmed to the Zanaga Project team that it is engaged
in discussions with Chinese funding institutions on the development
of the New Mineral Port at Pointe-Indienne.
ZIOC confirms that a non-binding LOI has been provided to CRBC
by Jumelles' subsidiary, MPD Congo, and four other mining companies
to support the development of this port; this LOI outlines the need
to hold discussions with CBRC to determine an economically and
technical viable development of the new port in alignment with the
needs of the mining companies.
Outlook and next steps
The global iron ore market continues to show strong demand
fundamentals and solid support for high quality products such as
Zanaga would produce.
The Zanaga Project Team have done an excellent job in
progressing the definition of the EPP Project and advancing its
economic assessment. The Zanaga project has always targeted the
production of premium quality products and we remain focused on
this strategy, including the potential to extend the product
development plan through to the production of high quality pellet
feed or pellets.
While port and power arrangements remain a challenge, the Zanaga
Project Team continue to engage with stakeholders on the new
mineral port as well as the opportunities presented by the
extension of the port of Pointe Noire itself.
We look forward to providing further information to shareholders
towards the end of 2018.
Financial review
Results from operations
The financial statements contain the results for ZIOC for the
first half of 2018. ZIOC made a loss in the half-year of US$0.8m
compared to a loss of US$1.4m in the full year ended December 2017.
The loss for the 2018 half-year period comprised:
1 January to 1 January to 1 January to
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
US$000 US$000 US$000
-------------------------------------------------------------------- ------------ ------------ ------------
General expenses (416) (357) (943)
Net foreign exchange (loss)/gain (64) 242 366
Share of loss of associate (354) (382) (824)
Interest income 3 3 8
(Loss)/Gain before tax (831) (494) (1,393)
Tax - -
Currency translation (13) - 52
Share of other comprehensive income of associate - foreign exchange (9) (84) (48)
-------------------------------------------------------------------- ------------ ------------ ------------
Total Comprehensive income (853) (578) (1,389)
-------------------------------------------------------------------- ------------ ------------ ------------
General expenses of US$0.4m (2017: US$0.4m), Directors' fees of
US$0.1m (2017: US$0.1m), professional fees of US$0.2m (2017:
US$0.2m) and US$0.1m (2017: US$0.1m) of other general operating
expenses.
The share of loss of associate of US$0.35m (2017: US$0.4m)
relates to ZIOC's investment in Jumelles Limited ("Jumelles"), the
joint venture company in respect of the Zanaga Project. From May
2014, as a result of the completion of the Feasibility Study and
thus consideration to complete the Glencore share option, only 50%
(less one share) of the Jumelles results are now included
above.
During the half year period, Jumelles' project expenditure was
US$0.7 including the effects of currency translation of $0.01m
loss. Capitalised exploration assets however, remain at
US$80.0m.
Financial position
ZIOC's net asset value ("NAV") of US$40.5m is comprised of a
US$37.5m investment in Jumelles and US$3.0m of cash balances.
30 June 2018 30 June 2017 31 December 2017
Unaudited Unaudited Audited
US$m US$m US$m
--------------------------------------- ------------ ------------ ----------------
Investment in associate 37.5 37.6 37.9
Fixed assets - - -
Cash 3.0 4.4 4.9
Other net current assets/(liabilities) - 0.1 (0.1)
--------------------------------------- ------------ ------------ ----------------
Net assets 40.5 42.1 42.7
--------------------------------------- ------------ ------------ ----------------
Cost of investment
The investment in associate relates to the carrying value of the
investment in Jumelles, which as at 30 June 2018 owned 50% less one
share of the Project. The carrying value of this investment is
unchanged in 2018 due to:
-- Company funding per the Supplemental Agreements of US$0. 3m; and
-- The Company's US$0.35m share of the comprehensive loss US$
0.7m made by Jumelles during the half-year.
As at 30 June 2018, Jumelles had aggregated assets of US$81.7m
(June 2017: US$82.1m) and aggregated liabilities of US$0.8m (June
2017: US$0.8m). Non-current assets consisted of US$80.0m (June
2017: US$80.0m) of capitalised exploration assets and US$1.4m (June
2017: US$1.7m) of other fixed assets including property, plant and
equipment. Cash balances amounted to US$0.3m (June 2017: US$0.4m)
and other current assets were US$0.1m (June 2017: US$0.1m).
Cash flow
Cash balances have decreased by US$0.7m since 31 December 2017.
Additional investment in Jumelles required under Funding Agreements
(details set out in note 1 to the financial statements) utilised
US$0.3m, operating activities US$0.3m, and foreign exchange losses
were US$0.1m as the value of UK Sterling weakened against the US
Dollar, thus decreasing the US Dollar value of the UK Sterling
denominated cash balances.
30 June 2018 30 June 2017 31 December 2017
Unaudited Unaudited Audited
US$000 US$000 US$000
------------------------------ ------------ ------------ ----------------
GBP Balances 2.3 3.4 2.7
USD value of GBP balances 3.0 4.4 3.7
USD value of other currencies - - -
USD balances - - -
------------------------------ ------------ ------------ ----------------
Cash Total 3.0 4.4 3.7
------------------------------ ------------ ------------ ----------------
Consolidated Statement of Comprehensive Income for the six
months ended 30 June 2018
1 January 1 January 1 January
to to to
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
Note US$000 US$000 US$000
-------------------------------------------------- ---- ---------- ---------- ------------
Administrative expenses (480) (115) (577)
Share of (loss)/profit associate (354) (382) (824)
-------------------------------------------------- ---- ---------- ---------- ------------
Operating loss (834) (496) (1,401)
Interest Income 3 3 8
(Loss) before tax (831) (494) (1,393)
Taxation 5 - - -
-------------------------------------------------- ---- ---------- ---------- ------------
(Loss) for the period (831) (494) (1,393)
Foreign exchange translation - foreign operations (13) - 52
Share of other comprehensive (loss)/income
of associate - foreign exchange translation (9) (84) (48)
-------------------------------------------------- ---- ---------- ---------- ------------
Other comprehensive (loss)/gain (22) (84) 4
-------------------------------------------------- ---- ---------- ---------- ------------
Total comprehensive (loss)/gain (853) (578) (1,389)
-------------------------------------------------- ---- ---------- ---------- ------------
(Loss)/Earnings per share (Cents)
Basic 7 (0.3) (0.2) (0.5)
Diluted 7 (0.3) (0.2) (0.5)
The loss for the period is attributable to the equity holders of
the parent company. All other comprehensive income may be
classified as profit and loss in the future.
Consolidated Statement of changes in equity
for the six months ended 30 June 2018
Foreign
currency
Share Retained translation Total
capital earnings reserve Equity
US$000 US$000 US$000 US$000
-------------------------------------------------------- ------------- --------------- ----------- ------------
Balance at 1 January 2017 267,012 (227,662) 3,322 42,672
-------------------------------------------------------- ------------- --------------- ----------- ------------
Consideration for share-based payments - other services - - - -
Share buy backs - - - -
Loss for the period - (494) - (494)
Other comprehensive (loss)/ income - - (84) (84)
-------------------------------------------------------- ------------- --------------- ----------- ------------
Total comprehensive (loss)/income - (494) 984) (578)
-------------------------------------------------------- ------------- --------------- ----------- ------------
Balance at 30 June 2017 267,012 (228,156) 3,238 42,094
-------------------------------------------------------- ------------- --------------- ----------- ------------
Consideration for share-based payments - other services - -
Share buy backs - - - -
Loss for the period - (899) - (899)
Other comprehensive (loss)/income - - 88 88
-------------------------------------------------------- ------------- --------------- ----------- ------------
Total comprehensive (loss)/income - (899) 88 (811)
-------------------------------------------------------- ------------- --------------- ----------- ------------
Balance at 31 December 2017 267,012 (229,055) 3,326 41,283
-------------------------------------------------------- ------------- --------------- ----------- ------------
Consideration for share-based payments - other services - - - -
Share buy backs - - - -
Loss for the period - (831) - (831)
Other comprehensive (loss)/income - - (22) (22)
-------------------------------------------------------- ------------- --------------- ----------- ------------
Total comprehensive loss - (831) (22) (853)
-------------------------------------------------------- ------------- --------------- ----------- ------------
Balance at 30 June 2018 267,012 (229,886) 3,304 40,430
-------------------------------------------------------- ------------- --------------- ----------- ------------
Consolidated Balance sheet
as at 30 June 2018
30 June 31 December
30 June 2017 2017
2018 Unaudited Unaudited Audited
Note US$000 US$000 US$000
----------------------------------------- ---- --------------- ---------- -----------
Non-current asset
Property, plant and equipment - - -
Investment in associate 6 37,518 37,636 37,589
----------------------------------------- ---- --------------- ---------- -----------
37,518 37,636 37,589
----------------------------------------- ---- --------------- ---------- -----------
Current assets
Other receivables 38 65 49
Cash and cash equivalents 2,949 4,435 3,721
----------------------------------------- ---- --------------- ---------- -----------
2,987 4,500 3,770
----------------------------------------- ---- --------------- ---------- -----------
Total Assets 40,505 42,136 41,359
----------------------------------------- ---- --------------- ---------- -----------
Current liabilities
Trade and other payables (75) (42) (75)
----------------------------------------- ---- --------------- ---------- -----------
Net assets 40,430 42,094 41,284
----------------------------------------- ---- --------------- ---------- -----------
Equity attributable to equity holders of
the parent
Share capital 267,012 267,012 267,012
Retained earnings (229,886) (228,156) (229,055)
Foreign currency translation reserve 3,304 3,238 3,327
----------------------------------------- ---- --------------- ---------- -----------
Total equity 40,430 42,094 41,284
----------------------------------------- ---- --------------- ---------- -----------
These financial statements were approved by the Board of
Directors on 27 September 2018.
Consolidated Cash flow statement
for the six months ended 30 June 2018
1 January 1 January 1 January
to to To
30 June 30 June 31 Dec
20187 2017 2017
Unaudited Unaudited Audited
US$000 US$000 US$000
------------------------------------------------- ---------- ---------- ---------
Cash flows from operating activities
Loss for the year (831) (494) (1,393)
Adjustments for:
Depreciation - - -
Interest received (3) (3) (8)
Taxation expense - - -
Decrease in other receivables (3) (6) 11
Decrease in trade and other payables - (71) (38)
Net exchange (profit)/loss 64 (242) (313)
Gain on part sale of associate - - -
Share of Total Comprehensive income of associate 354 382 824
Impairment to share of investment in associate - - -
Share-based payments - - -
Tax paid - - -
------------------------------------------------- ---------- ---------- ---------
Net cash from operating activities (419) (434) 917
Cash flows from financing activities
Repurchase of own shares - - -
Net cash from financing activities - - -
------------------------------------------------- ---------- ---------- ---------
Cash flows from investing activities
Interest received 3 3 8
Acquisition of property, plant and equipment - - -
Investment in associate (292) (229) (588)
Net cash from investing activities (289) (226) (580)
Net decrease in cash and cash equivalents (708) (660) (1,497)
Cash and cash equivalents at beginning of period 3,721 4,852 4,852
Effect of exchange rate difference (64) 242 366
-------------------------------------------------- ---------- ---------- ---------
Cash and cash equivalents at end of period 2,949 4,434 3,721
-------------------------------------------------- ---------- ---------- ---------
Notes to the financial statements
1. Business information and going concern basis of
preparation
In common with many exploration and development companies in the
mining sector, the Company raises funding in phases as its projects
develop.
Following completion of the Feasibility Study in April 2014,
modified to a staged development basis under the terms of the
Supplemental Agreement announced on 13 September 2013, the
consideration for the Call Option whereby Glencore owns 50% plus
one share shareholding in the project, is now satisfied. The Mining
Licence was granted in August 2014 and a Mining Convention was
signed with the Government of the Republic of Congo. This has now
been ratified by the Republic of Congo and adopted as law. Under
the 2018 funding agreement entered into by the Company and
Glencore, the Company's funding obligations for the 2018 work
programme and budget are for a sum of US$0.65m, plus a percentage
share of discretionary costs. Such share for the Company would be
US$0.11m if all the discretionary costs were approved jointly by
the Company and Glencore. On current projections, it is estimated
that the cash amounts payable by the Company to Jumelles during
2018 will be between approximately US$0.65m and US$0.76m. As
regards ZIOC's corporate costs for the 2018 financial year, it is
estimated that such costs will be of the order of US$0.6m and
US$0.8m. The directors have a reasonable expectation that the
Company has adequate financial resources to continue in operational
existence for the foreseeable future, being a period of at least
twelve months from the date of approval of these half-yearly
financial statements. For these reasons, the financial statements
of the Company have been prepared on a going concern basis.
2. Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the periods presented, unless
otherwise stated.
3. Basis of preparation
The condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
In accordance with the AIM Rules for Companies, the condensed
set of financial statements has been prepared in applying the
accounting policies and presentation that were applied in the
preparation of the Company's published consolidated financial
statements for the year ended 31 December 2017. The comparative
figures for the financial year ended 31 December 2017 are not the
Company's statutory accounts for that financial year. The 2017
accounts have been reported on by the Company's auditors. The
report of the auditors was (i) unqualified and (ii) did not include
a reference to any matter to which the auditors drew attention by
way of emphasis without qualifying their report.
Up until 30 April 2014, the Company accounted for 100% of the
Jumelles group Comprehensive Income. From May 2014, as a result of
completion of the Feasibility Study (note 1 above) and thus
consideration to complete the Call Option, the Company has
accounted for 50% less one share shareholding portion of that
Comprehensive Income.
4. Segmental reporting
The Company has one operating segment, being its investment in
the Zanaga Project, held through Jumelles. Financial information
regarding this segment is provided in note 6.
5. Taxation
The Company is exempt from most forms of taxation in the British
Virgin Islands ("BVI"), provided the Company does not trade in the
BVI and does not have any employees working in the BVI. All
dividends, interest, rents, royalties and other expense amounts
paid by the Company, and capital gains realised with respect to any
shares, debt obligations or other securities of the Company, are
exempt from taxation in the BVI.
30 June 2018 30 June 2017 31 December 2017
Unaudited Unaudited Audited
US$000 US$000 US$000
--------------------------------------------------------------- ------------ ------------ ----------------
Recognised in profit and loss:
Current year - - -
Reconciliation of effective tax rate
Profit/(Loss) before tax (831) (494) (1,393)
Income tax using the BVI corporation tax rate of 0% (2015: 0%) - - -
Effect of tax rate in foreign jurisdictions - - -
--------------------------------------------------------------- ------------ ------------ ----------------
The effective tax rate for the Group is 0.00% (December 2017:
0.00%).
6. Investment in associate
US$000
---------------------------- ------
Balance at 1 January 2017 37,873
Additions 229
Share of comprehensive loss (466)
---------------------------- ------
Balance at 30 June 2017 37,636
---------------------------- ------
Additions 359
Share of comprehensive loss (406)
Balance at 31 December 2017 37,589
---------------------------- ------
Additions 292
Share of comprehensive loss (363)
---------------------------- ------
Balance at 30 June 2018 37,518
---------------------------- ------
From 30 April 2014, the investment represents a 50% less one
share shareholding (previously 100%) in Jumelles for 2,000,000
shares of 4,000,001 total shares in issue.
On 11 February 2011, Xstrata Projects (now renamed Glencore
Projects) exercised the Xstrata Call Option and from that date owns
50% plus one share of Jumelles and Jumelles is controlled at both a
shareholder and director level by Glencore Projects. However, as
the shares issued on exercise of the option were not considered to
vest until provision of the services relating to the Preliminary
Feasibility Study and the Feasibility Study had been completed, the
Group continued to account for a 100% interest in Jumelles until
the Feasibility Study was completed in April 2014. From May 2014
the Group has accounted for the reduction of its interest in
Jumelles. The Group's interest remains accounted for as an
associate using the equity method of accounting.
The Group financial statements account for the Glencore Projects
transaction as an in-substance equity-settled share-based payment
for the provision of services by Glencore Projects to Jumelles in
relation to the Preliminary Feasibility Study and the Feasibility
Study. These services largely were provided through third party
contractors and were measured at the cost of the services
provided.
As at 30 June 2018, Jumelles had aggregated assets of US$81.7m
(June 2017: US$82.1m) and aggregated liabilities of US$0.8m (June
2017: US$0.8m). For the 6 months ended 30 June 2018, Jumelles
incurred no taxation charge (June 2017: US$nil). A summarised
consolidated balance sheet of Jumelles for the 6 months ended 30
June 2018, including adjustments made for equity accounting, is
included below:
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
US$000 US$000 US$000
---------------------------------------- ---------- ---------- ------------
Non-current assets
Property, plant and equipment 1,403 1,697 1,519
Exploration and other evaluation assets 80,000 80,000 80,000
Total non-current assets 81,403 81,697 81,519
---------------------------------------- ---------- ---------- ------------
Current assets 320 495 355
Current liabilities (763) (838) (772)
---------------------------------------- ---------- ---------- ------------
Net current liabilities (443) (343) (417)
---------------------------------------- ---------- ---------- ------------
Net assets 80,960 81,354 81,103
---------------------------------------- ---------- ---------- ------------
Share capital 337,627 337,627 338,190
Translation reserve (4,841) (4,894) (4,823)
Retained earnings (251,379) (252,264)
---------------------------------------- ---------- ---------- ------------
80,960 81,354 81,103
---------------------------------------- ---------- ---------- ------------
30 June 30 June
2018 2017 31 December 2017
Unaudited Unaudited Audited
7. Earnings per share US$000 US$000 US$000
----------------------------------------------------------- ---------- ---------- ----------------
Profit/(Loss) (Basic and diluted) (US$000) (831) (494) (1,393)
Weighted average number of shares (thousands)
Basic and diluted
Issued shares at beginning of period 283,201 278,777 278,777
Effect of shares issued - - -
Effect of share repurchase - - -
Effect of own shares - (3,842) (3,842)
Effect of share split - - -
----------------------------------------------------------- ---------- ---------- ----------------
Weighted average number of shares at end of period - basic 283,210 274,935 274,935
----------------------------------------------------------- ---------- ---------- ----------------
(Loss)/Earnings per share (Cents)
Basic (0.3) (0.2) (0.5)
Diluted (0.3) (0.2) (0.5)
----------------------------------------------------------- ---------- ---------- ----------------
8. Related parties
The following transactions occurred with related parties during
the period:
Transactions for the period Closing balance
---------- ----------------------------- ----------- -----------------------
30 June 30 June 31 December 30 June 30 June 31 December
2018 2017 2017 2018 2017 2017
Unaudited Unaudited Audited Unaudited Unaudited Audited
US$000 US$000 US$000 US$000 US$000 US$000
--------------------- ---------- ------------- -------------- ----------- ---------- -----------
Funding:
To Jumelles Limited 292 229 589 35 35 33
--------------------- ---------- ------------- -------------- ----------- ---------- -----------
--------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR UBOBRWUAKUAR
(END) Dow Jones Newswires
September 28, 2018 02:01 ET (06:01 GMT)
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