REG - Shuka Minerals PLC - Interim Results for the six months to 30 June 2023
25/09/2023 07:00
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RNS Number : 4189N Shuka Minerals PLC 25 September 2023
25 September 2023
SHUKA MINERALS PLC
("Shuka" or the "Company")
Interim Results for the six months to 30 June 2023
Shuka Minerals plc (AIM: SKA), an African focused mine operator and developer,
announces the Company's unaudited interim results for the six months ended 30
June 2023.
CEO'S report
I am pleased to present the Company's Interim Results for the six-month period
from 1 January 2023 to 30 June 2023. The period was a transformative one for
the Company, particularly from a corporate perspective with a strategic
investment of £1.47 million secured from two African focused mining
investment groups, an intended significant restructuring of the Board of
Directors, a change of name to Shuka Minerals plc (which was successfully
approved by shareholders subsequent to the end of the period) and the
application of the funds raised to not only fund its ongoing working capital
requirements at its operating Rukwa Coal Mine, but also to fund due diligence
costs associated with ongoing review work of potential new and strategically
complimentary projects in Africa.
The most notable development during the six-month period, was the strategic
investment that the Company was able to secure with Q Global Commodities
Group, one of South Africa's leading independent commodity, mining, logistics
and investment funds and with Gathoni Muchai Investments Limited, an East
Africa based mining investment group. As part of this investment, the Company
received an aggregate £1.47 million of new funding, with £575,000 received
in June 2023, and the £893,000 balance received in September 2023 following
shareholder approval at the Annual General Meeting held on 3 August 2023.
In conjunction with this strategic investment, the Company commenced a major
restructuring and strengthening of its Board, and I was pleased to confirm the
appointment of Mr Jason Brewer, a director of Gathoni Muchai Investments and
the CEO of London-listed Marula Mining Plc, as Executive Director of the
Company in June 2023. I am also looking forward to the proposed appointment of
Mr Quinton van der Burgh later this year, who is the founder and CEO of Q
Global Commodities and one of South Africa's leading mining
entrepreneurs, and who will join the Company as Director and Non-Executive
Chairman, subject to satisfactory completion of customary due diligence by the
Company's Nominated Adviser. Mr Nicholas von Schirnding, resigned as a
director of the Company, with effect from 31 October 2023. I would like to
thank Nick for his work and commitment to the Company over the years and would
like to welcome Jason and, in due course, Quinton to the Board, whom I believe
will be transformative appointments for the Company as it looks to
re-establish itself over the coming months as a leading African focused mining
and development company.
During the period and while the Company completed its corporate restructuring
and recapitalisation, the Company continued to manage day-to-day operations at
its wholly owned Rukwa Coal Mine in Tanzania. Operations during the period
were quite challenging as a result of the high moisture content in the
run-of-mine ("ROM") coal stockpile, which impacted on the coal washing process
and coal production over the period. As a result of the wash plant performance
and ongoing maintenance work on plant and equipment during the period, only
limited coal sales were made into the regional markets during the period. The
Company continues to review its ongoing investment in the Rukwa Coal Mine and
targeted production rates. In parallel with its operational activities, the
Company continued in its discussions with the Mining Commission in Tanzania,
to ensure ongoing compliance with local regulations, and to address previously
disclosed outstanding legacy matters concerning claims and litigation and the
status of the mining licence.
The strategic investment received from Gathoni Muchai Investments and Q Global
Commodities has ensured that the Company has been able to fund its ongoing
working capital needs and corporate and mining development activities, and
importantly fund costs associated with the evaluation of potential
complementary advanced mining and mine development projects across Africa with
the support and active involvement of these two new major shareholders.
I look forward to providing further updates as we progress our strategy and to
operating under our new company name of Shuka Minerals plc which was approved
by shareholders at the Annual General Meeting held on 3 August 2023, and
officially announced on 1 September 2023. This is a name which certainly
reflects our position as a mine operator in east Africa and as a truly African
focused mining and development company that is committed to ensuring its
activities demonstrate a commitment to environmental sustainability, community
engagement, and responsible mining practices.
I would like to thank all our shareholders for their ongoing support and I
look forward to working alongside my fellow directors and all key stakeholders
over the rest of 2023.
Noel Lyons
Chief Executive Officer
For further information please contact:
Shuka Minerals Plc info@shukaminerals.com (mailto:info@shukaminerals.com)
Jason Brewer - Executive Director
Noel Lyons - Chief Executive Officer
Strand Hanson Limited +44 (0) 20 7409 3494
(Financial and Nominated Adviser)
James Harris
Richard Johnson
Tavira Securities Limited +44 (0) 20 7100 5100
(Joint Broker)
Oliver Stansfield
Jonathan Evans
Peterhouse Capital Limited +44 (0) 20 3934 6630
(Joint Broker)
Charles Goodfellow
Duncan Vasey
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended Year
30 June 23 30 June 22 ended
31 Dec 22
Unaudited Unaudited Audited
Note £ £ £
Revenue 68,926 56,146 183,448
Cost of sales (151,627) (452,484) (896,147)
Gross loss (82,701) (396,338) (712,699)
Administrative expenses (656,060) (423,627) (1,038,384)
Group operating loss (738,761) (819,965) (1,751,083)
Finance income - - 68
Finance costs (7,562) (675) (4,747)
Loss on operations before taxation (746,323) (820,640) (1,755,762)
Taxation - - (917)
Loss for the period after taxation (746,323) (820,640) (1,756,679)
Other comprehensive income/(loss): - - -
(Loss)/gain on translation of overseas subsidiary (335,033) 624,211 691,850
Total comprehensive loss for the period
(1,081,356) (196,429) (1,064,829)
Attributable to:
Equity holders of the Company (1,080,722) (195,155) (1,062,161)
Non-controlling interest (634) (1,274) (2,668)
(1,081,356) (196,429) (1,064,829)
Loss per share
- basic and diluted (pence) 2 (2.54) (3.79) (7.97)
The income for the period arises from the Group's continuing operations.
CONSOLIDATED statement of financial position
as at 30 June 2023
As at As at As at
30 June 23 30 June 22 31 Dec 22
Unaudited Unaudited Audited
Note £ £ £
Non-current assets
Property, plant and equipment 4 5,568,304 5,906,709 5,911,876
Intangible assets 5 333,907 349,607 352,627
5,902,211 6,256,316 6,264,503
Current assets
Inventories 111,516 180,124 117,766
Trade and other receivables 309,778 353,457 347,984
Cash and cash equivalents 440,655 477,438 237,300
861,949 1,011,019 703,050
Current liabilities
Trade and other payables (745,718) (308,174) (402,200)
Borrowings (27,817) (5,206) (29,376)
(773,535) (313,380) (431,576)
Current assets less current liabilities 88,414 697,639 271,474
Total assets less current liabilities 5,990,625 6,953,955 6,535,977
Non - current liabilities
Borrowings (52,375) - (67,128)
Environmental rehabilitation liability (28,984) (27,339) (30,609)
Net assets 5,909,266 6,926,616 6,438,240
Capital and reserves
Called-up share capital 4,348,744 4,176,601 4,233,744
Share premium account 23,009,976 22,254,317 22,569,976
Share based payment reserve 210,037 346,774 277,654
Foreign currency translation reserve 937,960 1,205,354 1,272,993
Retained earnings (22,574,502) (21,038,103) (21,896,430)
Issued capital and reserves attributable to owners of the parent company 5,932,215 6,944,943 6,457,937
Non-controlling interest (22,949) (18,327) (19,697)
Total equity 5,909,266 6,926,616 6,438,240
CONSOLIDATED statement of changes in equity
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Earnings Account Share Option Reserve Foreign Currency Total Non-controlling interest Total
Translation Reserve
£ £ £ £ £ £ £ £
At 1 January 2023 4,233,744 22,569,976 (21,896,430) 277,654 1,272,993 6,457,937 (19,697) 6,438,240
Comprehensive Income for the year
Foreign currency translation - - - - (335,033) (335,033) (2,464) (337,497)
Loss for the year - - (745,689) - - (745,689) (634) (746,323)
Total comprehensive income for the year - - (745,689) - (335,033) (1,080,722) (3,098) (1,083,820)
Transactions with owners
Issue of share capital 115,000 460,000 - - - 575,000 - 575,000
Share issue costs - (20,000) - - - (20,000) - (20,000)
Lapsed share options - - 67,617 (67,617) - - - -
Total transactions with owners 115,000 440,000 67,617 (67,617) - 555,000 - 555,000
Non- controlling interest share of goodwill
- - -
- - - (154) (154)
At 30 June 2023 4,348,744 23,009,976 (22,574,502) 210,037 937,960 5,932,215 (22,949) 5,909,266
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Earnings Account Share Option Reserve Foreign Currency Total Non-controlling interest Total
Translation Reserve
£ £ £ £ £ £ £ £
At 1 January 2022 4,176,601 22,254,317 (20,325,577) 453,614 581,143 7,140,098 (17,328) 7,122,770
Comprehensive Income for the year
Foreign currency translation - - - - 624,211 624,211 - 624,211
Loss for the year - - (819,366) - - (819,366) (1,274) (820,640)
Total comprehensive income for the year - - (819,366) - 624,211 (195,155) (1,274) (196,429)
Transactions with owners
Lapsed share options - - 106,840 (106,840) - - - -
Total transactions with owners - - 106,840 (106,840) - - - -
Non- controlling interest share of goodwill
- - - - - - 275 275
At 30 June 2022 4,176,601 22,254,317 (21,038,103) 346,774 1,205,354 6,944,943 (18,327) 6,926,616
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Earnings Account Share Option Reserve Foreign Currency Total Non-controlling interest Total
Translation Reserve
£ £ £ £ £ £ £ £
At 1 January 2022 4,176,601 22,254,317 (20,325,577) 453,614 581,143 7,140,098 (17,328) 7,122,770
Comprehensive Income for the year
Foreign currency translation - - - - 691,850 691,850 691,850
Loss for the year - - (1,754,011) - - (1,754,011) (2,668) (1,756,679)
Total comprehensive income for the year - - (1,754,011) - 691,850 (1,062,161) (2,668) (1,064,829)
Transactions with owners
Issue of share capital 57,143 342,857 - - - 400,000 - 400,000
Share issue costs - (20,000) - - - (20,000) - (20,000)
Share options/warrants charge - (7,198) - 7,198 - - - -
Lapse of share options/warrants - - 183,158 (183,158) - - - -
Total transactions with owners 57,143 315,659 183,158 (175,960) - 380,000 - 380,000
Non- controlling interest share of goodwill - - - - - - 299 299
At 31 December 2022 4,233,744 22,569,976 (21,896,430) 277,654 1,272,993 6,457,937 (19,697) 6,438,240
consolidated CASH FLOW STATEMENT
Six months Six months Year
ended ended ended
30 June 23 30 June 22 31 Dec 22
Unaudited Unaudited Audited
£ £ £
Cash flows from operating activities
Operating loss (738,761) (819,965) (1,751,083)
Depreciation 30,542 144,039 324,790
Movement in inventories - (20,310) 40,903
Movement in trade and other receivables (16,825) 185,761 (92,615)
Movement in trade and other payables 358,750 (112,135) (26,820)
Loss on foreign exchange (1,977) (115,391) (4,614)
Expected credit losses - - 242,780
Net cash used in operating activities (368,271) (738,001) (1,266,659)
---
Tax Paid - - (1,319)
Cash flows from investing activities
Purchase of property, plant and equipment - - (41,236)
Finance income - 48 68
Net cash used in investing activities - 48 (41,168)
Cash flows from financing activities
Repayment of lease liabilities (11,536) (14,078) (22,138)
Lease interest (4,483) (723) (1,793)
Other interest paid (3,079) - -
Proceeds on issue of ordinary shares 614,850 - 360,150
Share issue costs (20,000) - (20,000)
Net cash generated from financing activities 575,752 (14,801) 316,219
Net increase/(decrease) in cash and cash equivalents 207,481 (752,754) (992,927)
Cash and cash equivalents at beginning of year 237,300 1,229,801 1,229,801
Exchange losses on cash and cash equivalents (4,126) 391 426
Cash and cash equivalents at end of year 440,655 477,438 237,300
NOTES TO THE INTERIM REPORT
1. Financial information and basis of preparation
The interim financial statements of Shuka Minerals Plc are unaudited
consolidated financial statements for the six months ended 30 June 2023 which
have been prepared in accordance with UK adopted international accounting
standards. They include unaudited comparatives for the six months ended 30
June 2022 together with audited comparatives for the year ended 31 December
2022.
The interim financial statements do not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2022 have been reported on by the company's
auditors and have been filed with the Registrar of Companies. The report of
the auditors contained a qualified opinion and an Emphasis of mater paragraph
on Operationalisation of up to 16% Government of Tanzania non-dilutive free
carried share interest and the recoverability of VAT in Tanzania. Aside from
the Qualification and Emphasis of matter paragraphs above, the auditor's
report did not contain any statement under section 498 of the Companies Act
2006.
The interim consolidated financial statements for the six months ended 30 June
2023 have been prepared on the basis of accounting policies expected to be
adopted for the year ended 31 December 2023. These are anticipated to be
consistent with those set out in the Group's latest financial statements for
the year ended 31 December 2022. These accounting policies are drawn up in
accordance with adopted International Accounting Standards ("IAS") and
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board.
2. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
30 June 23 30 June 22 31 December 22
£ £ £
Loss after taxation (746,323) (820,640) (1,756,679)
Weighted average number of shares in the period 29,329,474 21,645,575 22,036,964
Basic and diluted loss per share (pence) (2.54) (3.79) (7.97)
The loss attributable to equity shareholders and weighted average number of
ordinary shares for the purposes of calculating diluted earnings per ordinary
share are identical to those used for basic earnings per ordinary share. This
is because the exercise of share options and warrants would have the effect of
reducing the loss per ordinary share and is therefore anti-dilutive.
3. Dividends
No dividends are proposed for the six months ended 30 June 2022 (six months
ended 30 June 2021: £nil, year ended 31 December 2021: £nil).
4. Property, plant and equipment
Coal Production assets Plant & machinery Fixtures & fittings Motor vehicles
Total
£ £ £ £ £
Cost or valuation
As at 1 January 2023 5,855,019 1,344,491 7,554 328,480 7,535,544
Foreign exchange adjustment (310.858) (70,984) (180) (16,553) (398,575)
At 30 June 2023 5,544,161 1,273,507 7,374 311,927 7,136,969
Accumulated depreciation
As at 1 January 2023 173,642 1,301,920 7,445 140,661 1,623,668
Depletion/Charge for the year 3,849 3,760 13 22,920 30,542
Foreign exchange adjustment (9,227) (68,846) (180) (7,292) (85,545)
At 30 June 2023 168,264 1,236,834 7,278 156,289 1,568,665
Net book value
As at 30 June 2023 5,375,897 36,673 96 155,638 5,568,304
Coal Production assets Plant & machinery Fixtures & fittings Motor vehicles
Total
£ £ £ £ £
Cost or valuation 5,230,294 1,201,831 7,191 193,620 6,632,936
As at 1 January 2022
Foreign exchange adjustment 574,580 131,210 334 19,437 725,561
At 30 June 2022 5,804,874 1,333,041 7,525 213,057 7,358,497
Accumulated depreciation
As at 1 January 2022 114,026 925,484 7,045 134,460 1,181,015
Depletion/Charge for the year 3,587 132,234 18 8,200 144,039
Foreign exchange adjustment 12,518 100,880 334 13,002 126,734
At 30 June 2022 130,131 1,158,598 7,397 155,662 1,451,788
Net book value
As at 30 June 2022 5,674,743 174,443 128 57,395 5,906,709
4. Property, plant and equipment (continued)
Coal Production assets Plant & machinery Fixtures & fittings Motor vehicles
Total
£ £ £ £ £
Cost or valuation 5,230,294 1,201,831 7,191 193,620 6,632,936
As at 1 January 2022
Additions - - - 141,141 141,141
Adjustments - - - (27,414) (27,414)
Foreign exchange adjustment 624,725 142,660 363 21,133 788,881
At 31 December 2022 5,855,019 1,344,491 7,554 328,480 7,535,544
Accumulated depreciation
As at 1 January 2022 114,026 925,484 7,045 134,460 1,181,015
Depletion/Charge for the year 46,002 259,777 37 18,974 324,790
Adjustments - - - (27,414) (27,414)
Foreign exchange adjustment 13,614 116,659 363 14,641 145,277
At 31 December 2022 173,642 1,301,920 7,445 140,661 1,623,668
Net book value
As at 31 December 2022 5,681,377 42,571 109 187,819 5,911,876
5. Intangible assets
Mining Licences Total
£ £
Cost or valuation
As at 1 January 2023 1,667,530 1,667,530
Foreign exchange adjustment (88,530) (88,530)
At 30 June 2023 1,579,000 1,579,000
Accumulated amortisation and impairment
As at 1 January 2023 1,314,903 1,314,903
Foreign exchange adjustment (69,810) (69,810)
At 30 June 2023 1,245,093 1,245,093
Net book value
As at 30 June 2023 333,907 333,907
5. Intangible assets (continued)
Mining Licences Total
£ £
Cost or valuation
As at 1 January 2022 1,489,604 1,489,604
Foreign exchange adjustment 163,644 163,644
At 30 June 2022 1,653,248 1,653,248
Accumulated amortisation and impairment
As at 1 January 2022 1,174,602 1,174,602
Foreign exchange adjustment 129,039 129,039
At 30 June 2022 1,303,641 1,303,641
Net book value
As at 30 June 2022 349,607 349,607
Mining Licences Total
£ £
Cost or valuation
As at 1 January 2022 1,489,604 1,489,604
Foreign exchange adjustment 177,926 177,926
At 31 December 2022 1,667,530 1,667,530
Accumulated amortisation and impairment
As at 1 January 2022 1,174,602 1,174,602
Foreign exchange adjustment 140,301 140,301
At 31 December 2022 1,314,903 1,314,903
Net book value
As at 31 December 2022 352,627 352,627
6. Share capital
No £ No £ £
Ordinary shares of 1p each Ordinary shares of 0.02p/1p each Deferred shares of 0.001p each Deferred shares of 0.001p each Total share capital
Issued and fully paid
At 1 January 2022 21,645,575 216,457 396,014,437,346 3,960,144 4,176,601
On 7 December 2022 the company issued 5,714,286 Ordinary 1p shares at 7p each 5,714,286 57,143 - - 57,143
As at 31 December 2022 27,359,861 273,600 396,014,437,346 3,960,144 4,233,744
No £ No £ £
Ordinary shares of 1p each Ordinary shares of 0.02p/1p each Deferred shares of 0.001p each Deferred shares of 0.001p each Total share capital
Issued and fully paid
At 1 January 2022 and 30 June 2022 21,645,575 216,457 396,014,437,346 3,960,144 4,176,601
No £ No £ £
Ordinary shares of 1p each Ordinary shares of 0.02p/1p each Deferred shares of 0.001p each Deferred shares of 0.001p each Total share capital
Issued and fully paid
At 1 January 2023 27,359,861 273,600 396,014,437,346 3,960,144 4,233,744
On 31 May 2023 the company issued 11,500.000 Ordinary 1p shares at 5p each 11,500,000 115,000 - - 115,000
As at 31 December 2022 38,859,861 388,600 396,014,437,346 3,960,144 4,348,744
7. Distribution of interim report to shareholders
The interim report will be available for inspection by the public at the
registered office of the Company during normal business hours on any weekday
and from the Company's website http://www.shukaminerals.com/
(http://www.shukaminerals.com/) . Further copies are available on request.
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