REG-AltynGold Plc Annual Financial Report
05/05/2023 13:30
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Annual Financial Report
AltynGold plc
("AltynGold" or the "Company")
Publication of Annual Report and Financial Results for the year ended 31
December 2022; update on temporary share suspension
AltynGold is pleased to announce that the Company’s Annual Report and
audited financial results for the year ended 31 December 2022 have been
published on the Company’s website at www.altyngold.uk
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.altyngold.uk&esheet=53394430&newsitemid=20230505005209&lan=en-US&anchor=www.altyngold.uk&index=1&md5=c71fa873b418fcef51a7a1de0ff295e0)
and uploaded to the Financial Conduct Authority’s ("FCA") National Storage
Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fdata.fca.org.uk%2F%23%2Fnsm%2Fnationalstoragemechanism&esheet=53394430&newsitemid=20230505005209&lan=en-US&anchor=https%3A%2F%2Fdata.fca.org.uk%2F%23%2Fnsm%2Fnationalstoragemechanism&index=2&md5=6381b67618ca616f7f942a448df856c4)
.
Further to its announcement on 28 April 2023, the Company has applied to the
FCA for the restoration of its ordinary shares to the standard listing segment
of the Official List of the FCA and to trading on the Main Market of the
London Stock Exchange. A further announcement in this respect will be made in
due course.
Highlights
Financial highlights
• Turnover increased in the year to US$62m (2021: US$50m) an increase of
23.4%.
• 34,499oz of gold sold (2021: 27,747oz), an increase of 24.3%.
• Average gold price achieved (including silver), US$1,762oz, (2021:
US$1,803oz).
• The Company made a profit before tax of US$13.4m (2021: US$18.3m).
• Adjusted EBITDA (Earnings before interest, tax, depreciation and
amortisation) of US$21.9m (2021: US$26.4m).
• The Group repaid borrowings of US$15m (2021: US$7.9m).
• The Group obtained a further advance of US$40m from Bank Center Credit for
capital development.
Operational highlights
• Ore processed 527,000t (2021: 571,000t).
• Gold poured 34,023oz, (2021: 28,450oz) a 19.6 % increase year-on-year.
• Mined gold grade 2.17g/t, (2021: 1.97g/t).
• Operating cash cost US$805oz, (2021: US$649oz).
• Gold recovery rate 83.43% (2021: 83.05%).
Underground development & exploration
• Transport declines were developed and are both now at 50masl from 117masl
decline 1 and 134masl decline 2.
• Development of the shaft and tunnelling amounted to 6,699 linear metres
(2021: 6,209 linear metres).
• Exploration drilling at Sekisovskoye amounted to 129,928 linear metres
(2021: 119,438 linear metres).
• An extension to the mining licence for two years at Teren-Sai has been
applied for and is expected to be finalised in the second half of 2023.
The Annual General Meeting of the Company will be held at Langham Court Hotel,
31-35 Langham Street, London W1W 6BU, United Kingdom on Thursday 22 June 2023
at 11.00am.
Further Information:
For further information please contact:
AltynGold Plc
Rajinder Basra
+44 (0) 203 432 3198
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014, as it forms part of domestic law by virtue of the European
Union (Withdrawal) Act 2018.
Information on the Company
AltynGold Plc (LSE:ALTN) is an exploration and development company, which is
listed on the main market segment of the London Stock Exchange.
To read more about AltynGold Plc please visit our website www.altyngold.uk
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.altyngold.uk&esheet=53394430&newsitemid=20230505005209&lan=en-US&anchor=www.altyngold.uk&index=3&md5=68f6a403ee02d33e1b1906c708b6f78e)
.
CHAIRMAN’S STATEMENT
The Company had another successful year increasing its sales output to
34,499oz, generating a turnover of US$62m and a profit before tax of US$13.4m.
The Company is advancing on its development plan having successfully secured
US$ 40m funding at attractive terms. The ensuing objective is to increase ore
production to 760ktpa in 2023 as a springboard to achieving 1mtpa thereafter
in line with the processing plant expansion planned for 2023-2024.
In conjunction with its development strategy, the Company is closely
monitoring and controlling its carbon emissions. AltynGold currently ranks
among the lowest emitters according to Kazakhstan’s environmental
legislation. The Board is continuing to develop plans and reviewing
technologies that will reduce future carbon emissions.
The development of Teren-Sai has been progressing slower than anticipated but
the management is committed to continuing the exploration program and
accelerating ore extraction; initially open pit and then underground. The
mining license for an additional two year term is in process and expected to
be granted in the second half of 2023. The application for renewal is with the
appropriate government department for consideration, and the delay has been
due to checks to be performed by the relevant government body on the land to
be returned that is not required for commercial development. The checks have
been delayed until weather conditions improve on site, but the Company sees no
issues in progressing the application once this has been done.
Looking forward, the Company is anticipating solid growth. While higher
interest rates and the strong dollar may hinder the demand and price of gold,
the latter should be supported by geopolitical turmoil. Indeed, professional
consensus forecasts see the gold price trading in US$1,800oz -US$1,900oz
range. Although Kazakhstan is not immune to the global inflationary dynamic,
this pressure should be mitigated by the stronger dollar in which our revenues
are denominated.
With continuing positive operational developments, it is hoped that the share
price will be more reflective of the Company progress and its future
prospects.
Finally I would like to conclude by thanking our Board members and employees
for their unwavering support and I look forward to another successful year.
Kanat Assaubayev
Chairman
CHIEF EXECUTIVE OFFICER’S REVIEW
Overview
The Company’s gold production increased 19.6% with gold poured reaching
34,023oz the highest level since operations at Sekisovskoye mine commenced.
This was achieved despite the setback of extreme weather which resulted in
abnormally low production of 527,000tpa of processed ore which was mitigated
by higher grades of 2.17g/t and drawing on stock pile with 585,000tpa ore
milled.
The budgets have been set to reach an output of 760-800,000tpa for 2023
assuming the additional capex equipment comes on stream as planned.
Following extensive drilling works at Teren-Sai, the exploration area has been
remapped versus the original license with areas that are no longer of
commercial interest returned to the government. This process has slowed the
license renewal which is now expected to be finalised in the second half of
2023. In the interim, the Company has put plans in place for further drilling
and site preparation pending the agreement on the new the license details.
The Company entered into credit arrangements with Bank Center Credit to
finance the processing plant expansion and the acquisition of new mining
equipment. While this financing was completed in November, the funds will be
fully drawn in in 2023. Concurrently, the processing plant expansion work has
already commenced and substantial equipment purchases were placed post year
end, which should result in higher level of ore production.
Mine development
The Company has continued its development at Sekisovskoye in line with its
mining plan. The pace of development should further accelerate in 2023 as the
US$40m funding is deployed for the acquisition of new equipment and
infrastructure development. The majority of the new equipment is expected to
be in place during the first half of 2023
The principal development milestones achieved during the period were:
• Tunnelling and shaft sinking of 6,699 linear metres, (2021: 6,209). This
included 1,040 linear metres at 150masl to open up further reserves for
explotation in 2023.
• Blast hole drilling of 129,928 linear metres (2021: 119,438).
• Exploration drilling was carried out and amounted to 13,928 linear metres
(2021: 18,943). The exploration drilling was carried out at horizons 174masl
and 150masl along ore bodies 11 and 5.
• Backfilling of voids was carried out as the declines are moving down and
the blocks are mined.
The principal mining operations in the period were at ore bodies 6-8, ore body
5 and 11 at horizons 117masl, 134masl, and 150masl.
Both transport declines have been developed to 50masl with expected
continuation of this development in 2023 as shown on the underground map of
the mine.
In order to continue safe mining operations and enable efficient engagement
with the local environment, the following capital and maintenance works were
carried out at the mine site and surrounding areas:
• Connections were made to the local water supply and maintenance carried on
the water pumps.
• The local stream was cleared and the bridge giving access to the mine and
the local village repaired. The main roads were also repaired and cleared
during the winter season.
• The Company undertook the repair of the local stadium and park zones of
the local village from where the majority of the work force are hired.
The key production figures are shown below:
Mining results ore extraction
2022 2021
Ore mined T 527,231 571,035
Gold grade g/t 2.17 1.94
Silver grade g/t 1.78 1.81
Contained gold oz 36,835 35,580
Contained silver oz 30,233 33,296
Mining results processing
2022 2021
Crushing T 574,614 534,426
Milling T 585,480 541,576
G old grade g/t 2.17 1.97
Silver grade g/t 1.64 1.63
Gold recovery % 83.43 83.05
Silver recovery % 72.87 73.54
Contained gold oz 40,782 34,258
Contained silver oz 30,927 28,408
Gold Poured oz 34,023 28,450
Silver poured oz 22,538 20,891
Exploration – Teren-Sai
As mentioned above the Company is awaiting the extension of the license for a
three-year period therefore only a limited exploration activity was carried
out. In the period, 2,000 linear metres of exploration drilling were carried
out.
The areas of interest are No. 2,4 and 5 with area 2 being the first target of
development. A competent persons report was conducted on this area in 2019. As
noted previously, the results from the test production obtained from open pit
workings for Area No. 2 indicated an average grade of 1.8g/t.
The exploration work carried out in the period under the original 2016 license
is as follows:
- exploratory pneumatic percussion drilling of 1,352 wells, with a total
volume of 67,581 running meters ;
- core drilling - 74 wells, with a total volume of 18,360 running meters ;
- sludge sampling - 33,791 samples;
- core sampling - 18,350 samples.
Based on the results of prospecting work conducted during the reporting
period, three prospective areas for the discovery of gold mineralisation were
identified in the ore field areas Nos. 2, 4 and 5.
In area No. 2, 25 major ore intersections were identified in 7 wells. In area
No. 4, 15 major ore intersections were identified in 6 wells. In area No. 5,
14 major ore intersections were identified in 14 wells.
The main tasks relating to the updated license consists of the following
geological and geophysical works:
- topographic and geodetic works;
- drilling of core wells;
- logging works;
- testing;
- laboratory and analytical work;
- Topographic tie-in of the 133 wells to be drilled;
- Geophysical research in 1,995 linear meters wells;
- Drilling operations (core inclined drilling) with a volume of 39,900 linear
meters;
- Laboratory work on 50,474 samples;
- Other geological operations (development of design documents, work, etc.)
The exploration activities are aimed at obtaining sufficient geological data
to make a preliminary estimate of mineral resources, which will be followed by
production.
Capital requirements
The Company raised a US$40m facility in order to fund its capital
requirements for 2023 as detailed in the table below:
-The principal focus will be on capacity expansion which entails upgrading the
processing plant and infrastructure. An extra grinding mill and new
underground mining equipment will also be added. The mill is expected to be
installed with minimal disruption to existing operations in 2023 with the
capex program extending into 2024.
Regarding Teren-Sai, the current capex budget foresees continuation of
exploration at the site pending the approval of the updated development plan.
Further advancement of the project will subsequently depend on raising
additional funding.
Projected capital expenditure Total 2023 2024
US$m US$m US$m
Prospect drilling 4 2 2
Underground development 19 8 11
Infrastructure 2 2 -
Ore handling facilities 17 11 6
Process plant incremental expansion 2 1 1
Total 44 24 20
Longer term plan
The Company has had a successful year, with the capex investment increasing
ore extraction from the Sekisovskoye site which increased to 570ktpa. The aim
remains to move this up to 1mtpa, and budgets have been drawn up and funds
allocated to expand the existing capacity of the processing plant to 1mtpa
within two years. The longer term aim is to increase the ore extraction
towards the 2mtpa within a time frame of 6 years.
The capex required as outlined above amounts to US$38m, and will be largely
met from funds raised from operations. In addition to this an amount of US$75m
will be required to bring the Teren-Sai project on stream, as it will require
new processing facilities and infrastructure to be developed at the Teren-Sai
site. In the initial period the site will be stripped and made ready for open
pit production in order to move to production efficiently once the necessary
funding is in place. The brokers who are providing sponsored research and
opening up opportunities for investor funding will play a key role in moving
the projects forward.
The Board are constantly looking to diversify and invest in new and
complementary operations in Kazakhstan and internationally, however the
primary driver at present is to bring the Kazakhstan gold sites, as outlined
above, to their full potential.
FINANCIAL PERFORMANCE
Key performance indicators 2022 2021 2020
Annual gold sales Oz 34,499 27,747 16,535
Annual gold poured Oz 34,023 28,450 17,028
Revenue US$m 62 50.0 30.0
Operating cash cost of production US$oz 805 649 800
EBITDA US$m 21.9 26.4 13.5
Net Assets US$m 62.2 55.2 35.3
The production results at Sekisovskoye are encouraging with the investment in
the capital and more efficient working practices increasing the key figures of
mineral processing towards target levels. Further investment is planned, with
the funds received from Bank Center Credit to increase the capacity of the
process plant. As this will be an add on to the existing structures there is
no disruption anticipated while the works are being carried out to implement
the upgrades.
Ore mined totalled 527,000t which was lower than the previous year due to
extreme weather. Part of the shortfall was covered by stockpiles from prior
years.
Gold poured increased 19.6 % to 34,023oz (2021: 28,450oz). Recovery rate also
improved to 83.43% (2021:83.05%).
During 2022, the Company sold 34,499oz of gold (2021: 27,747oz) at an average
price US$1,762per oz (2021:US$1,803). As such revenue expansion was solely
driven by volume increase in production. The Company budgets a medium term
price range of US$1,700 - US$1,800. Total Company output was taken by the
Kazakh national refinery In line with the long standing off-take agreement. As
in previous years, sales were translated using the spot US$ exchange rate at
the point of sales.
The total cash cost of production which includes administrative costs but
excludes depreciation and provisions amounted to US$1,160oz, (2021: US$834oz).
The operating cash cost excluding administrative costs amounted to US$805oz
(2021: US$649oz).
>The administrative costs have increased by US$6.6m mainly as a result of
one off items. The Company sponsored projects worth US$3.6m for the benefit of
the community in line with central government recommendations. A further US$3m
was spent on mine upgrade, ecological research, carbon offset programs and
climate change reporting. The expenditure on these projects is expected to
decline in the forthcoming 2023 period.
The Company realised a gross profit of US$29.3m (2021: US$27.8m) and net
profit before tax of US$13.4m (2021: US$18.3m).
Adjusted EBITDA decreased to US$21.9m (2021: US$26.4m) as a result of the
non-recurring increase in administrative costs identified above. Details of
the calculation are shown in note 13 of the financial statements.
Cash at year end was US$116,000 (2021: US$3.6m). Funds utilization included
US$9.7m change in working capital following significant prepayments for
equipment, US$6.4m bond and other loans and interest repayment net of new
loans and US$9.2m capital additions. The Company raised funds post year end
from the issue of a bond on the Astana International Exchange (AIX), raising
US$9.4m.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2022
2022 2021
Note $000 $000
Revenue 3 62,037 50,290
Cost of sales (32,697) (22,496)
Gross profit 29,340 27,794
Administrative expenses (8,590) (4,648)
Administrative expenses – sponsorship programs (3,654) (490)
Impairments (82) (734)
Operating profit 17,014 21,922
Foreign exchange (504) (366)
Finance expense (3,096) (3,289)
Total finance cost (3,600) (3,655)
Profit before tax 13,414 18,267
Taxation receipt/(expense) (181) 56
Profit for the year attributable to the equity holders of the parent 13,233 18,323
Profit per ordinary share
Basic 48.42c 11.27c
Diluted 48.42c 10.97c
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
2022 2021
Note $000 $000
Profit for the year 13,233 18,323
Items that may be reclassified subsequently to the income statement
Currency translation differences arising on translations of foreign operations (4,822) (1,491)
Currency translation differences on translation of foreign operations relating (1,408) 3,038
to tax
(6,230) 1,547
Total comprehensive profit for the year 7,003 19,870
Total comprehensive profit attributable to:
Equity holders of the parent 7,003 19,870
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
2022 2021
(Registration number: 05048549) Note $000 $000
Assets
Non-current assets
Intangible assets 5 12,698 13,346
Property, plant and equipment 6 36,975 35,350
Deferred tax assets 6,052 8,189
Trade and other receivables 14,600 3,925
Restricted cash 50 70
70,375 60,880
Current assets
Inventories 11,260 9,121
Trade and other receivables 16,622 21,530
Cash and cash equivalents 116 3,593
27,998 34,244
Total assets 98,373 95,124
Equity and liabilities
Current liabilities
Trade and other payables (6,253) (5,684)
Provisions (263) (232)
Loans and borrowings (13,611) (15,087)
(20,127) (21,003)
Non-current liabilities
Vat payable (332) (242)
Other payables (688) (1000)
Provisions (5,517) (5,453)
Loans and borrowings (9,501) (12,221)
(16,038) (18,916)
Total liabilities (36,165) (39,919)
Equity
Share capital (4,267) (4,267)
Share premium (152,839) (152,839)
Merger reserve 282 282
Other reserves - -
Foreign currency translation reserve 57,642 51,412
Accumulated losses 36,974 50,207
Equity attributable to owners of the company (62,208) (55,205)
Total equity and liabilities (98,373) (95,124)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Currency
Share Share Merger translation Other Accumulated Total
capital premium reserve reserve reserves losses equity
$000 $000 $000 $000 $000 $000 $000
At 1 January 2021 4,267 152,839 (282) (52,959) 333 (68,863) 35,335
Profit for the year – – – – – 18,323 18,323
Other comprehensive loss – – – 1,547 – – 1,547
Total comprehensive loss – – – 1,547 – 18,323 19,870
Share options exercised – – – – (333) 333 –
At 31 December 2021 4,267 152,839 (282) (51,412) – (50,207) 55,205
At 1 January 2022 4,267 152,839 (282) (51,412) – (50,207) 55,205
Profit for the year – – – – – 13,233 13,233
Other comprehensive income – – – (6,230) – – (6,229)
Total comprehensive income – – – (6,230) – 13,233 7,004
Transfer to reserves – – – – – – –
At 31 December 2022 4,267 152,839 (282) (57,642) – (36,974) 62,208
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2022
2022 2021
$000 $000
Cash flows from operating activities
Net cash flow from operating activities 12,234 6,797
Cash flows from investing activities
Acquisitions of property plant and equipment (8,948) (5,495)
Acquisition of intangible assets (240) (837)
Net cash flows from investing activities (9,188) (6,332)
Cash flows from financing activities
Interest paid (2,388) (2,411)
Loans received 11,025 6,356
Loans repaid (15,028) (7,985)
Net cash flows from financing activities (6,391) (4,040)
Net (decrease)/increase in cash and cash equivalents (3,345) (3,575)
Cash and cash equivalents at 1 January 3,593 7,154
Effect of exchange rate fluctuations on cash held (132) 14
Cash and cash equivalents at 31 December 116 3,593
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2022
1 General information
AltynGold Plc (the "Company") is a Company incorporated in England and Wales
under the Companies Act 2006. The financial information set out above for the
years ended 31 December 2022 and 31 December 2021 does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006, but is
derived from those accounts. Whilst the financial information included in this
announcement has been compiled in accordance with international financial
reporting standards adopted pursuant to Regulation (EC) in conformity with the
requirements of the Companies Act 2006, this announcement itself does not
contain sufficient financial information to comply with IFRS. A copy of the
statutory accounts for 2021 has been delivered to the Registrar of Companies
and those for 2022 will be layed before the shareholders at the Annual General
Meeting. The full audited financial statements for the years end 31 December
2022 and 31 December 2021 do comply with IFRS.
2 Going concern
The Group increased turnover in the year to US$62m, generating an EBITDA of
US$21.9m (2021 US$26.4m) . The EBITDA was lower than the prior year due to
additional costs incurred in the period. Additional amounts were paid in
relation to government initiated sponsorship of community projects, these
amounted to US$3.6m, together with fees paid in relation to project appraisals
and consultancy amounting to US$3m. These fees are not expected to be at the
same level in future years.
In summary the EBITDA was utilised in repayment of debt, falling from US$27.4m
to US$23.1m, the investment in capital equipment of US$9m , and advances to
suppliers to commence works at Sekisovskoye resulted in an increase of working
capital of US$8m. As the US$10m Bond was repaid in December 2022, this
resulted in a low cash balance at the year end of US$116,000 (2021: US$3.6m).
The Board have reviewed the Group’s forecast cash flows for the period to
June 2024, which include the capital and interest repayments to be made in
relation to the Group’s borrowings. The bank loans to fund the increase in
production have been agreed with capital repayment holidays to allow
production to increase before principal loan repayments are required. In
addition the Company has raised further funds amounting to US$10m by placing a
bond on AIX in April 2023 to provide additional working capital to fund
operations in its growth stage.
Capital and operating costs are based on approved budgets and latest forecasts
and development plans. Based on the Group’s cash flow forecasts, the
Directors believe that the, net cash flows from operations, and increased
production based on projections of future growth, are sufficient for the
Company to achieve its current plans and cash requirements including the
repayment of loans which are due for repayment in the period.
The Board have considered possible stress case scenarios that they consider
may be likely to impact on the Group’s operations, financial position and
forecasts. Factors considered are factors that may lower the production at the
mine and possible impact on the price of gold if this was to fall. From the
analysis undertaken the Board have concluded that Group will be able to
continue to trade by the careful management of its existing resources. The
stress tests included the following scenarios amongst others, a fall in the
gold price by 10% from current levels, a drop in budgeted production by 10% or
a combination of both factors together. In each case the Group would not
experience a cash shortfall in either scenario. If required the Group would
manage its resources, reducing investment and managing its payables in order
to maintain liquidity.
The Board therefore considers it is appropriate to adopt the going concern
basis of accounting in preparing these financial statements.
3 Revenue
The analysis of the Group’s revenue for the year from continuing operations
is as follows:
2022 2021
$000 $000
Sale of gold and silver 61,053 50,031
Other sales 984 259
62,037 50,290
Included in revenues from sale of gold and silver are revenues of
US$61,053,000 (2021: US$50,031,000) which arose from sales of precious metals
to one customer based Kazakhstan. Other sales amounted to US$984,000 (2021:
US$259,000) and related to lease and rental income.
4 Profit per ordinary share
The calculation of basic and diluted earnings per share from continuing
operations is based upon the retained profit from continuing operations for
the financial year of US$13.2m (2021: US$18.3m).
The weighted average number of ordinary shares for calculating the basic
earnings per share in 2022 and 2021 is shown below.
2022 2021
No.
No.
Basic 27,332,933 27,332,933
Diluted 27,332,933 27,332,933
5 Intangible assets
Group Teren-Sai Exploration and Total
geological data
evaluation costs
US$000
US$000
US$000
Cost or valuation
At 1 January 2021 9,026 8,650 17,676
Additions – 830 830
Amortisation capitalised – 585 585
Currency translation (225) (240) (465)
At 31 December 2021 8,801 9,825 18,626
At 1 January 2022 8,801 9,825 18,626
Additions – 240 240
Amortisation capitalised – 541 541
Currency translation (589) (654) (1,243)
At 31 December 2022 8,212 9,952 18,164
Amortisation
At 1 January 2021 4,662 165 4,827
Amortisation charge 585 – 585
Currency translation (125) (7) (132)
At 31 December 2021 5,122 158 5,280
At 1 January 2022 5,122 158 5,280
Amortisation charge 541 – 541
Currency translation (343) (12) (355)
At 31 December 2022 5,320 146 5,466
Carrying amount
At 31 December 2022 2,892 9,806 12,698
At 31 December 2021 3,679 9,667 13,346
At 1 January 2021 4,364 8,485 12,849
The value of the geological data purchased is in the opinion of the Directors
the value that would have been incurred if the drilling had been undertaken by
a third party (or internally). The Company has continued to develop the site
with a CPR completed in 2019 on one of the fifteen target zones area 2, which
includes 3 potential targets, and further exploration works in the other
areas. Full details are given in the mineral resources statement included as
part of the Annual Report. A two years extension to continue to explore the
area has been applied for, the approval is expected to be received in H2 2023.
The directors consider that no impairment is required taking into account the
CPR results, exploration and planned production in the future. The write off
of the geological data over the period of the licence to the end of the
extended licence period.is appropriate. After that period the costs amortised
are capitalised in line with the Company’s accounting policy within the
subsidiary TOO GMK Altyn MM LLP, there are no impairment indicators.
The bank loan from Bank Center Credit is secured in the assets of the Group.
.
6 Property, plant and equipment
Group Mining Freehold Equipment, Plant, Assets under Total
properties
Land and
fixtures and
machinery and
construction
US$000
US$000
buildings
fittings
buildings
US$000
US$000
US$000
US$000
Cost or valuation
At 1 January 2021 13,264 24,050 11,780 9,322 1,973 60,389
Additions 3,356 197 2,147 653 2,187 8,540
Disposals – – (655) (4) – (659)
Transfers – 1,441 – – (1,441) –
Transfer from inventories – – – – 170 170
Currency translation (611) (654) (203) (261) (67) (1,796)
At 31 December 2021 16,009 25,034 13,069 9,710 2,822 66,644
At 1 January 2022 16,009 25,034 13,069 9,710 2,822 66,644
Additions 3,936 42 837 6 4,295 9,116
Disposals – – (476) (33) – (509)
Transfers – 4,387 187 65 (4,639) –
Transfer from inventories – – – – (16) (16)
Currency translation (1,584) (1,673) (929) (674) (183) (5,043)
At 31 December 2022 18,361 27,790 12,688 9,074 2,279 70,192
Depreciation
At 1 January 2021 2,869 11,371 9,182 4,875 – 28,297
Charge for year 699 2,188 817 782 – 4,486
Eliminated on disposal – (2) (655) (4) – (661)
Currency translation (218) (238) (239) (133) – (828)
At 31 December 2021 3,350 13,319 9,105 5,520 – 31,294
At 1 January 2022 3,350 13,319 9,105 5,520 – 31,294
Charge for the year 800 2,128 893 770 – 4,591
Eliminated on disposal – – (464) (33) – (497)
Currency translation (227) (986) (590) (368) – (2,171)
At 31 December 2022 3,923 14,461 8,944 5,889 – 33,217
Carrying amount
At 31 December 2022 14,438 13,329 3,744 3,185 2,279 36,975
At 31 December 2021 12,659 11,715 3,964 4,190 2,822 35,350
At 1 January 2021 10,395 12,679 2,598 4,447 1,973 32,092
Capitalised cost of mining property are amortised over the life of the licence
from commencement of production on a unit of production basis. This basis uses
the ratio of production in the period compared to the mineral reserves at the
end of the period. Mineral reserves estimates are based on a number of
underlying assumptions, which are inherently uncertain. Mineral reserves
estimates take into consideration estimates by independent geological
consultants. However, the amount of mineral that will ultimately be recovered
cannot be known until the end of the life of the mine.
Any changes in reserve estimates are, for amortisation purposes, treated on a
prospective basis. The recovery of the capitalised cost of the Company’s
property, plant and equipment is dependent on the development of the
underground mine.
The Directors are required to consider whether the non-current assets
comprising, mineral properties, plant and equipment have suffered any
impairment. The recoverable amount is determined based on value in use
calculations. The use of this method requires the estimation of future cash
flows and the choice of a discount rate in order to calculate the present
value of the cash flows. The directors considered entity specific factors such
as available finance, cost of production, grades achievable, and sales price.
The directors have concluded that no adjustment is required for impairment.
The bank loan from Bank Center Credit is secured on the assets of the Group.
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AltynGold Plc
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