REG-AltynGold Plc Annual Financial Report
26/04/2024 07:00
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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 2023
AltynGold is pleased to announce that the Company’s Annual Report and
audited financial results for the year ended 31 December 2023 will be
available 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=53956972&newsitemid=20240425620093&lan=en-US&anchor=www.altyngold.uk&index=1&md5=86663e115886506ecc3563e1ac450d58)
and also be 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=53956972&newsitemid=20240425620093&lan=en-US&anchor=https%3A%2F%2Fdata.fca.org.uk%2F%23%2Fnsm%2Fnationalstoragemechanism&index=2&md5=cf12e0e58aa71b31252f6ccd9dfe2ab6)
.
Highlights
Financial highlights
* Turnover increased in the year to US$64m (2022: US$62m), an increase of 3.2%.
* 32,765oz of gold sold (2022: 34,499oz), a decrease of 5%.
* Average gold price achieved (including silver), US$1,967oz, (2022:
US$1,762oz).
* The Group made a profit before tax of US$11.3m (2022: US$13.2).
* Adjusted EBITDA (Earnings before interest, tax, depreciation and amortisation)
of US$22.3m (2022: US$21.9m).
* The Group repaid borrowings of US$16.6m (2022: US$15m).
Operational highlights
* Ore processed 701,000t (2022: 527,000t).
* Gold poured 33,110, (2022: 34,023oz) a 2.7 % decrease year-on-year.
* Mined gold grade 2.08g/t, (2022: 2.17g/t).
* Operating cash cost US$1,041oz, (2022: US$805oz).
* Gold recovery rate 83.60% (2022: 83.43%).
Underground development & exploration
* Continuing development of the processing capacity to 1mt/y.
* Continuing maintenance and development of the ore bodies to be mined.
* Development of the shaft and tunneling amounted to 6,432 linear metres, (2022:
6,699 linear metres).
* Exploration drilling at Sekisovskoye amounted to 115,116 linear metres (2022:
129,928 linear metres).
* An extension to the mining licence was obtained for two years at Teren- Sai
until March 2026.
The Annual General Meeting of the Company will be held at Langham Court Hotel,
31-35 Langham Street, London W1W 6BU, United Kingdom on 21 June 2024 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=53956972&newsitemid=20240425620093&lan=en-US&anchor=www.altyngold.uk&index=3&md5=1d34b17996fbd21680f709d018638adf)
CHAIRMAN’S STATEMENT
The Company’s strategy has been focused on organic growth mainly developing
the Sekisovskoye mine while gradually advancing Teren-Sai to production,
aiming at an annual gold production of 100,000oz in the long term.
Following substantial investments in equipment and a significant increase in
ore production, Sekisovskoye has entered into its final phase of development.
Indeed, the processing plant capacity expansion is expected to come on stream
in the second half of 2024. While the process has encountered some delays,
overall we are pleased with the results so far achieved, and the professional
manner in which our staff adapted to and resolved the technical issues that
arose.
In relation to Teren-Sai, the final terms of the updated licence were agreed
with the authorities in March 2024. Our aim is to bring the asset into
production within the two-year exploration period. The Company sees Teren-Sai
as a key development, not only would it increase productive capacity but also
diversify it away from the reliance on a single site for production.
Our plan for the current period consists in consolidating AltynGold’s strong
growth profile while reducing its financial gearing. The Company has come a
long way since its LSE listing in 2014, developing and executing an effective
growth strategy and moving the Company into profit.
Our next challenge is to seek new growth opportunities to further expand and
diversify the business.
I would like to thank my fellow directors for their invaluable input in the
year assisting in developing and driving the strategic development of the
Company. The employees have consistently performed well and we look forward to
a higher level of output in the current year.
Kanat Assaubayev
Chairman
25 April 2024
CHIEF EXECUTIVE OFFICER’S REVIEW
Overview
With the majority of the new mining equipment for the extraction of ore
commissioned and working on site, the Company has been able to increase mined
ore by 33% to 701,000t. The ore has been stockpiled as the processing plant is
currently being upgraded in order to bring planned processing capacity to
1mtpa. The production has been interrupted during the construction phase,
which has extended over the initial planned period. The processing plant is
now on target to be commissioned and in operation in the second half of 2024.
The development and maintenance works at the Sekisovskoye mine have continued
with extensive works being carried out to extend the supplies of water and
ventilation as the declines move further down as detailed below.
In the current year, gold poured reached 33,110oz, 2.7% lower from the record
level achieved last year of 34,023oz, and by 12% from budgeted levels for
2023. This was as a result of the issues noted above as well as lower gold
grade in the year. The grade is expected to increase as improved targeting and
mining of ore bodies reduces the level of dilution.
Regarding Teren-Sai, detailed discussions with the ministry involving
revisions to the mining area and the proposed work plan, resulted in the
extension of the exploration licence in March 2024 for a period of 2 years.
Initial works have been planned to commence in area No.2 in order to develop
the area with a view to bringing it into production in the near term.
Mine development
The principal development milestones achieved during the period were:
* Tunnelling and shaft sinking of 6,432 linear metres, (2022: 6,699). This
included 1,239 linear metres of mining works to open up further reserves for
exploitation in 2024.
* Blast hole drilling of 151,116 linear metres (2022: 129,928).
* Exploration drilling was carried out and amounted to 11,756 linear metres
(2022: 13,928). The exploration drilling was carried out at horizons +174masl
for ore body 11, +142masl, +117masl ore bodies 6-8 and +150masl in relation to
ore body 10.
* Backfilling of voids was carried out as the declines are moving down and the
blocks are mined.
* Both transport declines have been further developed No 1 to +49masl and No 2
to +64masl.
The following capital and maintenance works were carried out at the mine site
and surrounding areas:
* The main water flow inflow was completed at elevation +150masl. This involved
running 170 running metres of pipe line that also connected up to outlets at
+320masl.
* The central distribution centre was built at elevation +150masl.
* Work has been undertaken and is continuing in 2024 in order to provide new
ventilation shafts at the lower levels.
The key production figures are shown below:
Mining results ore extraction
2023 2022
Ore mined T 701,465 527,035
Gold grade g/t 2.01 2.17
Silver grade g/t 2.14 1.78
Contained gold oz 45,270 36,835
Contained silver oz 48,199 30,233
Mining results processing
2023 2022
Crushing T 595,457 574,614
Milling T 591,975 585,480
Gold grade g/t 2.08 2.17
Silver grade g/t 1.96 1.64
Gold recovery % 83.60 83.43
Silver recovery % 73.47 72.37
Contained gold oz 39,607 40,782
Contained silver oz 37,258 30,927
Gold Poured oz 33,110 34,023
Silver poured oz 27,372 22,538
Exploration – Teren-Sai
Exploration activity was limited in the period as the Company was in
negotiations with the mining authorities to extend the exploration period of
the licence, the addendum was agreed in March 2024 to extend the licence for a
further two years until March 2026.
In summary 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.
Planned works in 2024 include the following:
* The construction of two transport slopes
* Exploration works to be undertaken with three drilling rigs. The aim is to
delineate the ore bodies in more detail with the anticipated length of the
works estimated to be 600 linear metres.
* A holding warehouse will be constructed, with a capacity of 30 tons
* Ventilation and other capital works will be undertaken on the basic
infrastructure at Teren- Sai.
Capital requirements
The Company currently has sufficient plant and equipment in order to deliver
the planned production going forward.
The capex budget as outlined below relates principally to the continued
development of the mining works at Sekisovskoye relating to the developments
of the declines and the final amounts payable in relation to the expansion of
the processing plant and enhancement of the tailings dam. Prepayments have
already been made in relation to a number of the items in the 2024 budget such
as the amount payable in relation to the milling equipment required for the
expansion of the processing plant capacity.
Regarding Teren-Sai, the current capex budget as outlined below relates to the
committed capex works as agreed with the Kazakh mining authorities for the
further exploration works that are envisaged in relation to the 2 year licence
period.
Further advancement of the Teren-Sai project to full production will
subsequently depend on raising additional funding.
Projected capital expenditure Total 2024 2025
US$m US$m US$m
Prospect drilling 4 3 1
Underground development 19 7 12
Infrastructure 1 1 -
Teran- Saiwork program 7 3 4
Process plant incremental expansion 4 4 -
Total 35 18 17
Longer term plan
The budget for 2024 foresees ore production increasing to a run rate of
760,000-800,000t per annum in line with the projected expansion of the
processing plant in the second half of 2024. The drilling and exploration
targets for Sekisovskoye are set at a similar level to the prior year with
continued development of the declines in order to access further reserves.
Development plans relating to the open pit operations at Teren-Sai are
awaiting approval and require a minimal capital budget, as the Company has the
necessary equipment in place to commence site preparation.
The total capital required as outlined above amounts to US$35m and will be
largely met from operating activities or funds raised in the year.
Additional capital will be injected as necessary if funding allows an
accelerated expansion.
The current tailings dam has capacity until 2025 for the planned production,
hence it will be reviewed for redevelopment during 2024.
FINANCIAL PERFORMANCE
Key performance indicators 2023 2022 2021
Annual gold sales Oz 32,765 34,499 27,747
Annual gold poured Oz 33,110 34,023 28,450
Revenue US$m 64.0 62.0 50.0
Operating cash cost of production US$oz 1,043 805 649
EBITDA US$m 22.3 21.9 26.4
Net Assets US$m 74.9 62.2 55.2
The revenue for the year increased as a result of a stronger gold price during
the period. The extraction of ore also increased and was in line with
expectations however the amount of gold processed was lower than that budgeted
due to unanticipated disruptions during the processing plant upgrade.
During 2023, the Company sold 32,765oz of gold (2022:34,499oz) at an average
price US$1,967per oz (2022: US$1,762). Revenue generated increased from US$62m
to US$64m as a result. As last year, the total Company’s output was taken by
the Kazakh national refinery. The refining of the doré is carried out by the
Kazakh national refinery, the costs of which have risen during the period.
This factor has been reflected in the increased cost of sales, together with
higher mineral extraction tax charged in the period. The Company is looking at
ways to adopt a more efficient work program and decrease direct costs of
production.
As in previous years, sales were translated using the spot US$ exchange rate
at the point of sales. During the year, there was minimal effect due to
exchange rate fluctuations of the Kazakh Tenge to the US Dollar.
Ore mined increased by 33% to 701,000t from last year’s level of 527,000t.
The increase was driven by investments in mining equipment in the prior year.
The increase in the ore produced is being stockpiled to be utilised once the
expanded processing capacity comes on stream.
Gold poured decreased 2.7% to 33,110oz (2022: 34,023oz). The initial plan was
to pour 37,525oz, but delays and interruptions to the work flows led to the
shortfall.
Recovery rate was in line with the prior year and budget at 83.6% (2022:
83.4%). The Company expects a small improvement in the recovery rate in the
current year.
Total cash cost of production which includes administrative costs but excludes
depreciation and provisions amounted to US$1,255/oz, (2022: US$1,160/oz).
Operating cash cost excluding administrative costs amounted to US$1,043/oz
(2022: US$805/oz). The key drivers for the increase in operating cash cost
were the general inflation in commodity prices and labour costs as well as the
rate hike in the mineral extraction tax from 5% to 7.5%. It is anticipated
that the additional processing plant capacity and a higher level of production
should reduce cash costs of production with economies of scale diluting the
effect of fixed costs.
Administrative costs in 2023 were US$7.0m versus US$8.6m in 2022. The
reduction is due to one off projects undertaken in 2022 relating to carbon
offset programs and the feasibility study of the additional processing
capacity as well as exceptional costs of US$3.6m relating to promotional and
government led sponsorship schemes.
The Company realised a gross profit of US$23.3m (2022: US$29.3m) and net
profit after tax of US$11.3m (2022: US$13.2m). The decrease in margin is being
offset to a large extent by savings in the administrative costs as outlined
above.
Adjusted EBITDA increased to US$22.3m (2022: US$21.9m). Details of the
calculation are shown in note 13 of the financial statements.
Cash at year end was US$5.5m (2022: US$116,000). The movement in funds is
principally due to the following:
* Cash generated from operations after movements in working capital amounted to
US$14.7m (2022: US$12.2m)
* Funds utilisation included US$40.2m in relation to capital asset acquisitions
(2022: US$8.9m)
* US$16.6m (2022: US$15m) in relation to repayment and servicing of debt and
* New loans raised amounted to US$51.5m (2022: US$11m), principally utilised to
modernise and expand the processing plant.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2023
2023 2022
Note $000 $000
Revenue 3 64,434 62,037
Cost of sales (41,102) (32,697)
Gross profit 23,332 29,340
Administrative expenses (6,977) (8,590)
Administrative expenses – sponsorship programs - (3,654)
Impairments (439) (82)
Operating profit 15,916 17,014
Foreign exchange 252 (504)
Finance expense (4,283) (3,096)
Total finance cost (4,031) (3,600)
Profit before tax 11,885 13,414
Taxation receipt/(expense) (546) (181)
Profit for the year attributable to the equity holders of the parent 11,339 13,233
Profit per ordinary share
Basic 41.48c 48.42c
Diluted 41.48c 48.42c
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2023
2023 2022
Note $000 $000
Profit for the year 11,339 13,233
Items that may be reclassified subsequently to the income statement
Currency translation differences arising on translations of foreign operations 1210 (4,822)
Currency translation differences on translation of foreign operations relating (4,075) (1,408)
to tax
(2,865) (6,230)
Total comprehensive profit for the year 8,474 7,003
Total comprehensive profit attributable to:
Equity holders of the parent 8,474 7,003
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
2023 2022
(Registration number: 05048549) Note $000 $000
Assets
Non-current assets
Intangible assets 5 13,661 12,698
Property, plant and equipment 6 70,593 36,975
Deferred tax assets 1,419 6,052
Trade and other receivables 18,354 14,600
Restricted cash 33 50
104,060 70,375
Current assets
Inventories 17,464 11,260
Trade and other receivables 18,465 16,622
Cash and cash equivalents 5,502 116
41,431 27,998
Total assets 145,491 98,373
Equity and liabilities
Current liabilities
Trade and other payables (9,658) (6,253)
Provisions (324) (263)
Loans and borrowings ( 18,132) (13,611)
(28,114) (20,127)
Non-current liabilities
Vat payable (114) (332)
Other payables (133) (688)
Provisions (6,089) (5517)
Loans and borrowings (40,359) (9,501)
(46,695) (16,038)
Total liabilities (74,809) (36,165)
Equity
Share capital (4,267) (4,267)
Share premium (152,839) (152,839)
Merger reserve 282 282
Foreign currency translation reserve 60,507 57,642
Accumulated losses 25,635 36,974
Equity attributable to owners of the company (70,682) (62,208)
Total equity and liabilities (145,491) (98,373)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
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 2022 4,267 152,839 (282) (51,412) - (50,208) 55,204
Profit for the year – – – – – 13,234 13,234
Other comprehensive loss – – – (6,230) – – (6,230)
Total comprehensive loss – – – (6,230) – 13,234 7,004
Share options exercised – – – – - 333 –
At 31 December 2022 4,267 152,839 (282) (57,642) – (36,974) 62,208
At 1 January 2023 4,267 152,839 (282) (57,642) – (36,974) 62,208
Profit for the year – – – – – 11,339 11,339
Other comprehensive income – – – (2,865) – – (2,865)
Total comprehensive income – – – (2,865) – 11,339 8,474
Transfer to reserves – – – – – – –
At 31 December 2023 4,267 152,839 (282) (60,507) – (25,635) 70,682
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2023
2023 2022
$000 $000
Cash flows from operating activities
Net cash flow from operating activities 14,651 12,234
Cash flows from investing activities
Acquisitions of property plant and equipment (40,171) (8,948)
Acquisition of intangible assets (766) (240)
Net cash flows from investing activities (40,937) (9,188)
Cash flows from financing activities
Interest paid (3,228) (2,388)
Loans received 51,481 11,025
Loans repaid (16,581) 15,028)
Net cash flows from financing activities 31,672 (6,391)
Net (decrease)/increase in cash and cash equivalents 5,386 (3,345)
Cash and cash equivalents at 1 January 116 3,593
Effect of exchange rate fluctuations on cash held - (132)
Cash and cash equivalents at 31 December 5,502 116
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023
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 2023 and 31 December 2022 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 2022 has been delivered to the Registrar of Companies
and those for 2023 will be layed before the shareholders at the Annual General
Meeting. The full audited financial statements for the years end 31 December
2023 and 31 December 2022 do comply with IFRS.
2 Going concern
The Group increased turnover in the year to US$64m, generating an EBITDA of
US$22.3m (2022 US$21.9m).
The Board have reviewed the Group’s forecast cash flows for the period to
June 2025, which include the capital and interest repayments to be made in
relation to the Group’s borrowings. Capital and operating costs are based on
approved budgets and latest forecasts and development plans. These have been
based on costs that have been fixed with suppliers where applicable and other
costs that include inflationary allowance. The gold price used in the
forecasts has been based on an average of consensus forecasts.
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 Group to achieve its current plans
and cash requirements including the repayment of loans which are due for
repayment in the period. In order to provide greater headroom the management
agreed an extension to a repayment holiday on a US$10m loan from the bank
extending the period from May 2024 to commence repayments in January 2025.
The Board have considered possible stress case scenarios that they consider
most likely to impact on the Group’s operations, financial position and
forecasts. Possible likely scenarios are based around whether the productive
capacity will come on stream as planned and budgets and forecasts have been
flexed to account for different scenarios.
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 delay of three
months to a delay of six months in relation to the upgrade of the processing
capacity of the Company which is set to increase by 1mtpa.
In each separate case the Group would not experience a cash shortfall, the
Group would manage its resources, reducing or adjusting the timing of
discretionary capital investment and managing its payables in order to
maintain liquidity as appropriate.
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:
2023 2022
$000 $000
Sale of gold and silver 63,748 61,053
Other sales 686 984
64,434 62,037
Included in revenues from sale of gold and silver are revenues of
US$63,748,000 (2022: US$61,053,000) which arose from sales of precious metals
to one customer based in Kazakhstan. Other sales amounted to US$686,000 (2022:
US$984,000) 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$11.3m (2022: US$13.2m).
The weighted average number of ordinary shares for calculating the basic
earnings per share in 2023 and 2022 is shown below.
2023 2022
No.
No.
Basic 27,332,934 27,332,934
Diluted 27,332,934 27,332,934
5 Intangible assets
Teren-Sai
Teren-Sai Exploration and Other
geological evaluation intangible
data costs assets Total
$000 $000 $000 $000
Cost or valuation
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 2021 8,212 9,952 – 18,164
At 1 January 2023 8,212 9,952 – 18,164
Additions – 7 759 766
Amortisation capitalised – 546 – 546
Currency translation 146 179 61 386
At 31 December 2023 8,358 10,684 820 19,862
Amortisation
At 1 January 2022 5,122 146 – 5,268
Amortisation charge 541 – – 541
Currency translation (343) – – (343)
At 31 December 2022 5,320 146 – 5,466
At 1 January 2023 5,320 146 – 5,466
Amortisation charge 546 – 75 621
Currency translation 97 – 17 114
At 31 December 2023 5,963 146 92 6,201
Carrying amount
At 31 December 2023 2,395 10,538 728 13,661
At 31 December 2022 2,892 9,806 – 12,698
At 1 January 2022 3,679 9,825 – 13,504
The intangible assets relate to the historic geological information pertaining
to the Teren-Sai ore fields. The ore fields are located in close proximity to
the current mining operations of Sekisovskoye. The Company obtained a licence
for exploration and evaluation on the site in May 2016 from the Kazakh
authorities, the addendum to the licence was extended for a two year period in
March 2024. Funds have been allocated in the 2024 budget to continue the
planned exploration work based on the agreed work program with the Kazakh
authorities.
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. 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 is being made
over the exploration licence term, the costs amortised are capitalised as part
of the exploration asset in line with the Company’s accounting policy.
The bank loan from Bank Center Credit is secured on the assets of the Group.
6 Property, plant and equipment
Freehold Equipment, Plant,
Mining
Land and
fixtures and
machinery and
Assets under
properties buildings fittings buildings construction Total
$000 $000 $000 $000 $000 $000
Cost or valuation
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
At 1 January 2023 18,361 27,790 12,688 9,074 2,279 70,192
Additions 4,971 349 7,312 10,708 15,818 39,158
Disposals – (6) (592) (17) – (615)
Transfers – 5,586 – – (5,586) –
Transfer from inventories – – – – 682 682
Currency translation 487 516 178 163 19 1,363
At 31 December 2023 23,819 34,235 19,586 19,928 13,212 110,780
Depreciation
At 1 January 2022 3,350 13,319 9,105 5,520 – 31,294
Charge for year 800 2,128 893 770 – 4,591
Eliminated on disposal – – (464) (33) – (497)
Currency translation (227) (986) (590) (368) – (2,171)
Transfers – – – – – –
At 31 December 2022 3,923 14,461 8,944 5,889 – 33,217
At 1 January 2023 3,923 14,461 8,944 5,889 – 33,217
Charge for the year 1,452 2,474 1,250 1,739 – 6,915
Eliminated on disposal – (6) (555) (41) – (602)
Currency translation 125 280 152 100 – 657
Transfers – – – – – –
At 31 December 2023 5,500 17,209 9,791 7,687 – 40,187
Carrying amount
At 31 December 2023 18,319 17,026 9,795 12,241 13,212 70,593
At 31 December 2022 14,438 13,329 3,744 3,185 2,279 36,975
At 1 January 2022 12,659 11,715 3,964 4,190 2,822 35,350
Capitalised cost of mining property are written off 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 depreciation purposes, treated on a
prospective basis. The recovery of the capitalised cost of the Group’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 discount rate applied has been calculated using the factors and financing
relevant to the Company and industry, and based at a level of 12-13%.
Expansion and growth of the Company has been considered as a key factor,
details of which are expanded upon in the Chief Executives Review.
The bank loan from Bank Center Credit is secured on the assets of the Group.
The additions to tangible assets in the year includes an amount of US$553,000
in relation to capitalised interest.
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