REG - Amur Minerals Corp - AUDITED FINAL RESULTS YEAR ENDED 31 DECEMBER 2021
30/06/2022 07:16
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RNS Number : 7269Q Amur Minerals Corporation 30 June 2022
30 June
2022
AMUR MINERALS CORPORATION
("Amur", the "Company" or the Group)
AUDITED FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
2021 Highlights:
· Advancing the TEO Project document for the Kun-Manie Project, and
submission of the draft report to the expert commission of the State Committee
on Reserves ("GKZ").
· Sale of Amur's 14% interest in the Nathan River Resources ("NRR")
Roper Bar iron ore operation in Australia.
· Continued M&A effort to identify a partner and / or buyer of
the Kun-Manie nickel copper sulphide project located in the Russian Far
East.
Chairman's Statement
It is with pleasure that I update you on the activities of the Company for the
twelve month period to 31 December 2021, as well as the period since the year
end, including recent global events which have impacted us. Along with all
worldwide corporate entities, Amur Minerals Corporation (the "Company") had to
balance and endure the challenges related to the Covid-19 pandemic during the
year and the more recent, post 2021, developing geopolitical situation in the
Ukraine. Broadly, our major areas of focus during the year included:
· Advancing the TEO Project document for the Kun-Manie Project,
compiled by the expert team of Oreoll Ltd. ("Oreoll") and submission of the
draft report to the expert commission of the State Committee on Reserves
("GKZ"). This is a document required by the Russian Federation which was
completed post 2021 and maintains our compliance with the Russian permitting
regime.
· Selling our 14% interest in the Nathan River Resources ("NRR")
Roper Bar iron ore operation in Australia. Grossing US$5.9 million with a
profit of US$0.9 million.
· The continued M&A effort to identify a partner and / or buyer
of the Kun-Manie nickel copper sulphide project located in the Russian Far
East. A bona fide purchase offer being ultimately rejected in May 2022.
The strategic plan for 2022 was to carry out the work plan and strategy to
maintain the extraction rights to its 100% controlled Kun-Manie project and
this continues to be our prime objective.
However, the current geopolitical situation in Ukraine has radically altered
our strategy for 2022. It is therefore important that we also provide key
additional information as to the impact of Russia's "Special Military
Operation" ("SMO"). Given the changing situation regarding the SMO, the 2022
strategy may require rapid adjustments depending on the actions of various
nation states and the Russian Federation ("RF"). This has not yet impacted
our in-Russia operational activities but has substantially altered our
activities related to our M&A strategy.
Looking at our 2021 activities in isolation, we present the Annual Report and
Accounts for the year 31 December 2021. Importantly, we note that over the
course of the year 2021, the Company continued to remain debt-free, and its
cash reserve increased 2.4 times from US$2,790,000 (1 January 2021) to
US$6,682,000 (31 December 2021).
Kun-Manie Nickel-Copper Sulphide Project
Kun-Manie is and remains our flagship project as one of the largest
undeveloped nickel - copper sulphide projects in the world. It is located
near the three largest nickel consuming nations of Japan, Korea and China and
we will continue to focus on this project.
Our primary objective is to maintain the Group's 100% production rights at
Kun-Manie. We shall continue to complete specific work programmes per the
terms and conditions of the licence to maintain our production rights.
Entering 2021, two objectives remained to be completed. The first was the
completion of an expert commission report called a TEO Project which was
scheduled for completion at the end of 2021 and completed in H1 2022.
Thereafter, a Mine Plan document must also be completed.
Production approval for the Kun-Manie project requires RF approvals based on
Russian protocols. These approvals cannot be obtained based on "western
standard" Feasibility, Definitive or Bankable studies. The approvals are
derived from several RF agencies based on Russian standard design work
completed by certified institutes. It has always been a priority for us to
obtain suitable and approvable Russian documentation for obtaining the
required approvals. This approach ensures that we maintain the integrity of
and production rights to the licence and have a fully suitable and approved,
ready to operate mining operation at the end of the day. This part of our
strategy remains unchanged from 2021.
For clarification, it is important to understand what a TEO Project is. It
is a feasibility study level document compiled by certified Russian Federation
experts using specific state-defined procedures and reporting requirements and
is ultimately approved by the State Committee on Reserves ("GKZ"). The
document addresses all project disciplines and is similar to the contents of
western feasibility study. It is to include all available technical results
and study work specific to the project. For compilation of this TEO Project
report, we contracted an experienced and independent expert company (Oreoll
LLC) who warranted it would diligently complete and defend the results
submitted to the GKZ. Oreoll's first submission date on our behalf was 20
August 2021.
In the evaluation process, the first submission of the TEO Project is
considered a draft document. A GKZ commission of experienced, certified and
approved experts covering all project disciplines is then assembled and each
expert examines specific sections of the report relevant to their expertise.
Discussions between Oreoll and the GKZ experts are held and Oreoll is directed
to finalise the negotiated document. This final report covers the design
basis of the project with regard to operating parameters, design
considerations, operating and capital cost estimates, infrastructure
requirements and financial analysis.
In a post 2021 event, the Company announced the final TEO Project results in
an RNS released 7 June 2022. The key highlights were:
· The TEO Project was compiled by Oreoll LLC and GKZ Russian
Federation certified experts from all project disciplines.
· The GKZ expert commission approved a 19-year open pit operational
design with revenue generation derived from two saleable concentrates allowing
for the recovery of both copper and nickel. Minor payable amounts for gold,
platinum and palladium will also be recovered.
· The design parameters maximise revenue generation to the RF based
on fully loaded taxation and royalty schemes. The total Net Present Value
("NPV(10%)") deliverable to the RF is projected to be US$ 628 million. This
approach does not optimise the financial return to the project operator which
is addressed during the next and final requirement of the mine planning stage
for the licence.
· The GKZ commission reviewed Oreoll's submission. Necessary
adjustments allowing for the identification and approval of operational
parameters and considerations, associated capital and operating costs, the
revenue generation from the sale of individual nickel and copper concentrates
and selected commodity prices were defined. As a result of the expert
evaluations, a Life of Mine ("LOM") cutoff grade ("COG") was defined to be
0.2% Ni. The annual nominal production rate of 12.4 million ore tonnes was
selected.
· Lerchs Grossman open pit production analyses including mining
loses and dilution indicate the average LOM ore production grades for delivery
to the sulphide flotation plant will be 0.66% Ni, 0.18% Cu, 0.015% Co, 0.05
grammes per tonne ("g/t") Au, 0.90 g/t Ag, 0.14 g/t Pt and 0.14 gt/ Pd. The
total cumulative LOM RF National Association of Subsoil Examination ("NAEN")
certified Reserve totals 187.1 million ore tonnes. Approximately 4.6 cubic
metres ("m(3)") (13.8 tonnes) of waste will be extracted per ore tonne.
· The Oreoll and GKZ experts have determined the LOM capital cost
estimate is US$ 1.92 billion with US$ 1.14 billion allocated as preproduction
and construction costs, US$ 698 million in sustaining costs and US$ 85 million
in working capital. The increase in the capital cost estimate from
previously reported projections is attributable to the more than doubling of
the previous annual operational capacity impacting the expansion of the open
pit mining fleet, plant expansion and the addition of a copper recovery
circuit within the process plant, tailings storage expansion, power plant
requirements and the need to construct a dual carriage way access road capable
of handling the increased mine support and concentrate transport needs. All
capital expenditure sectors include contingencies specific to the project and
its location.
· Operating costs per ore tonne are projected to be US$ 42.32
including ore and waste mining costs, depreciation and royalties.
· Accounting for both flotation plant metallurgical losses and
adjustments for off take fees, the LOM recovered payable metals from the two
concentrates total 627 thousand nickel tonnes, 177 thousand copper tonnes, 1.5
tonnes of gold, 3.3 tonnes of platinum and 3.5 tonnes of palladium. The
payable metal schedules and all fees are based on confidential metal trading
schedules provided by two reputable, internationally recognised industry
metals traders.
· Nickel and copper account for 95% of the LOM revenue obtained
from the nickel and copper concentrate products. The GKZ approved
conservative prices for the primary revenue generators of nickel and copper
were US$ 14,468 per Ni tonne (US$ 6.56 per pound) and US$ 6,758 per Cu tonne
(US$ 3.07 per pound). Minor credits were included for gold (US$ 58.90 / g),
platinum (US$ 34.35 / g) and palladium (US$ 80.75 / g). Metal prices for
nickel and copper as at 28 June 2022 were US$10.82 and US$3.86, respectively.
· Using these conservative/low metals prices across the 19 year
production schedule, the NPV(10%)to the Company is US$ 333 million with an
Internal Rate of Return ("IRR") of 15.6%. The payback period for the 12.4
million ore tonne per year operation is projected to be 5.5 years.
The most important component derived within the GKZ approved TEO Project is
the registration of the mining reserve. It is from these final certified
reserves that a Mine Plan will be developed. For your convenience, the table
below defines the 19 year GKZ Life of Mine NAEN reserve by tonnages and grades
to be delivered to the mill.
Mine Delivered Mill Feed NAEN Reserve
Dilution and Mining Losses Included
COG 0.2% Ni
Commodity Factor In Balance - B + C1 + C2
0.2% Ni COG Grade
Mill Feed Tonnes T 187,134,000
Ni T 1,233,697 0.66%
Cu T 343,045 0.18%
Co T 25,518 0.014%
Pt Kg 25,709 0.14 g/t
Pd Kg 26,547 0.14 g/t
Au Kg 8,964 0.05 g/t
Ag Kg 168,505 0.90 g/t
JORC resources and reserves are not accepted by the Russian Federation,
however, we have provided JORC estimates over the life of our exploration
programme. We implemented this approach in accordance with CRIRSCO
recommendations which allow shareholders to measure the progress of resource
expansion of our resource with time. Though not required, CRIRSCO recommend
this approach be taken for publicly listed companies such as Amur.
With the TEO Project now complete, our next phase is to compile the Mining
Plan due mid-year 2023, which leads to obtaining construction, mining and
operational approvals and funding considerations.
Kun-Manie -Russia's SMO, Sanctions and Orders
Entering 2021, our strategy regarding funding was based on the knowledge that
the preproduction and construction start-up capital expenditure would be
relatively large (greater than US$ 0.5 billion) given the remote location of
the project. We anticipated that project funding would require a consortium
of Russian and international funding sources. The strategy throughout 2021
and into the start of 2022 consisted of:
· Completion of all required conditions per the terms of the
licence including the mandatory TEO Project (Feasibility Study), review by the
State Committee on Reserves ("GKZ") and the subsequent mandatory Mine Plan
work also requiring certified Russian institutes input and approvals.
· Detailed engineering and design work completed to Russian
standards thus making it suited for approvals by the specific authorities and
meeting the investment requirements of Russian financial institutions.
· In anticipation that we would have to raise substantial funds
from both inside and outside of Russia to fully support financing, a western
bankable study will also be compiled. Potential outside funding sources will
include internationally recognised financial institutions and intermediate
metal off-takers. Based on discussions with western mining engineering
companies experienced in Russia, the western study should be a hybrid product
based on the Russian documentation but compiled in a manner meeting both
Russian and international requirements. The best time to undertake this
western work is during the later stages of the assembly of the Russian banking
study following the TEO Project.
In Q1 22, we revisited the funding approach of our strategy due to the SMO in
Ukraine. Sanctions are now in place and continue to be introduced by
various nation states. These target Russian banking institutions, select
Russian companies and numerous individuals associated with mineral and
industrial activities. In response, the Russian Federation issued and
continues to issue counter measures (Orders). The main Order restricts the
ability of companies to operate within Russia through strict currency controls
restricting the outflow of funds from Russia.
To this point, our subsidiary, AO Kun-Manie a Russian company, has functioned
on an unhindered basis. The sanctions and orders have, however, impacted the
Group's activities.
AMC - The SMO, Sanctions and Orders
In 2020, Amur developed a shortlist of potential partners or purchasers
wherein a Russia-based project would be of interest. The list included
Russian and internationally based mining companies, investment groups,
financial institutions, metal trading groups and electric vehicle battery
manufacturers. Discussions were held with potential partners and
confidentiality agreements were signed with interested parties.
In Q2 21 and Q3 21, the M&A market relating to nickel and copper sulphide
projects improved due to the increasing Green Energy interest and electric
vehicle battery demand. Three parties (one western and two Russian)
demonstrated bona fide interest in funding or purchasing Kun-Manie.
Medea Naturals Resources ("MNR") were contracted to establish a Fair Market
Value ("FMV") for the sale of Kun-Manie. Based on their survey and the
analysis of world-wide nickel exploration and development project
transactions, they established a transaction sale price ranging from US$106
million to US$131 million. The majority of the transactions surveyed were
external to Russia, but focused on an anticipated yield earned by a project
sale.
Negotiations advanced with all three parties and funding alternatives and
purchase options were tabled. Of the three, a proposed outright purchase of
Kun-Manie was selected as it offered the highest consideration available to
the Company, approaching fair market value. Transaction documentation was
initiated and neared completion in late February 2022.
On 24 February 2022, Russia initiated the SMO. The action resulted in the
immediate implementation of sanctions and counter measure responses by the
Russian Government on 28 February, 1 March and 8 March of 2022. The combined
actions had an immediate impact on the proposed sale of Kun-Manie, voiding the
agreed terms of the nearly final Share Purchase Agreement ("SPA"). The buyer
and Amur agreed to monitor the situation and revisit the SPA once the full
impact of the sanctions and orders were understood.
Upon completion of a sanction and order review period, negotiations were
resumed to modify the SPA allowing for all constraints to be considered.
Specific considerations and impacts to the transaction and available
alternatives is a transaction structure as follows:
· A transaction with a Russian entity or individual can be
implemented if they are not sanctioned. Searches by our Russian and UK
solicitors confirmed the buyer was free from restriction, and regular reviews
were conducted as sanctions are frequently updated. The buyer remained
unsanctioned and we were able to modify the SPA.
· Russian Government implemented Orders restricting foreign
currency flow out of Russia will have the greatest impact. Foreign exchange
payments may be made with the approval of a newly formed Currency Control
Committee and this committee has final approval on the quantity and timing of
currency flow from Russia. The buyer's funds would originate from Russia,
and therefore must be approved by the committee.
· For the transaction, the Company requires legal support using
Russian solicitors to ensure that the transaction will meet all regulatory and
statutory considerations. Many legal entities have exited Russia, including
our former Russian solicitors who were involved in negotiations. We had
anticipated that this might occur and have already engaged a highly regarded,
experienced Russian law firm, Birch Legal.
· In the event that Amur is unable to complete a transaction with
the buyer, the SMO has substantially and adversely impacted the opportunity to
sell and develop Kun-Manie. Sanctions have eliminated many companies,
including mining entities, some off-take metal marketers and all sanctioned
Russian companies as potential business counterparts. Additionally, the
larger and well-funded Russian resource banks and fund sources are
predominantly now sanctioned. International funding sources are avoiding
participation in Russian based projects.
May 2022 Kun-Manie Transaction Offer
From late March through early May of 2022, a revised SPA was negotiated and
executed with the buyer. All necessary associated documentation was
completed, including the Circular for shareholder approval of the offer. For
a total consideration of US$105 million, Stanmix Holding Limited offered to
purchase AO Kun-Manie per the following terms.
· US$15 million upon Completion of the Transaction (to occur within
60 days of signing the SPA)
· US$10 million within 12 months of the date of the SPA
· US$50 million within 48 months of the date of the SPA
· US$30 million, payable in ten annual installments of US$3 million
commencing in 2027
Requiring shareholder approval, a General Meeting was set for 25 May 2022.
At the request of attending shareholders, our Chief Executive Officer ("CEO"),
Robin Young conducted a Q&A session related to the transaction.
Subsequent to the Q&A session, the offer from Stanmix was rejected. The
primary reasons from shareholders attending were:
· Payment terms extended over to long a period.
· No absolute guarantee that all payments would be forthcoming.
· Initial payments were insufficient.
· Specific dividends to shareholders were not identified.
Robin Young was asked to revisit the M&A potential given the concerns of
the attending shareholders. As at the date of this report we continue to be
in discussions with Stanmix.
Of special note, the beneficial underlying owner of Stanmix (Mr. Vladislav
Sviblov) entered into an agreement to purchase the mining assets of Kinross
Gold in Russia. This transaction was announced and completed by Kinross Gold
on 15 June 2022. Based on renegotiated terms, the total consideration
purchase price reported by Kinross was US$340 million, a reduction of nearly
50% from the original offer. This is the first transaction completed by a
Russian buyer with a western owner since the SMO, introduction of sanctions
and the counter measure responses of the Russian Federation.
Impact of Kun-Manie Sale On The Company
In the event of a sale of Kun-Manie is successful, the Company will be
classified as a cash shell by the Alternative Investment Market ("AIM").
During the immediately following six months, the Company will need to acquire
another project or company via a Reverse Take Over ("RTO") to maintain trading
on AIM. Should an RTO not be completed within that timescale, the Company
will be suspended from trading and if after six months in suspension with no
RTO having occurred, the Company would be delisted. In anticipation of a
sale, we are examining the acquisition of projects, particularly within more
favourable mining jurisdictions as a part of our strategy.
An alternative scenario is to reclassify the Company as an investment vehicle
which would require the Company to successfully raise gross placing proceeds
of at least £6.0 million.
NRR Roper Bar Iron Ore Transaction
In 2020 the Group acquired a Convertible Loan Note ("CLN") on Nathan River
Resources Pte Limited ("NRR") which owns the Roper Bar Iron Ore Project
("Roper Bar") totalling US$4,670,000. Roper Bar is a large established iron
ore deposit in the Northern Territory of Australia with a defined JORC
resource of 446,000,000 tonnes at 39.9% Fe and a JORC reserve of 4,760,000
tonnes at 60.1% Fe. NRR had re-established the mining and shipping of iron ore
to China under an offtake agreement with Glencore.
On 3 July 2021, the Group announced that it sold its wholly owned subsidiary
Carlo Holdings Limited ("CHL"), the direct owner of the NRR CLN, for a cash
consideration of US$5,892,000 to Hamilton Investments Pte. Ltd., a subsidiary
of Britmar (Asia) Pte Ltd. The Group recognised a profit on the sale of
US$915,000. In addition, the CLN carried an interest-bearing coupon at 14%
which was payable to the Company. Amur received US$530,000 during its period
of ownership, of which US$327,000 was received in the year 2021.
Since the completion of the sale, in November 2021, the Roper Bar project was
placed into care and maintenance.
Financial Overview
As at 31 December 2021 the Company had cash reserves of US$6,682,000, up from
US$2,790,000 at the start of 2021 and remains debt free.
The increase in cash reserves derives largely from the sale of the Company's
wholly owned subsidiary CHL for cash consideration of US$6,137,019. As a
result, the Company has not found it necessary to undertake any equity
placings or other fundraising activities during the period. The Group also
received coupon interest payments of 14% from the NRR CLN held within CHL.
During the reporting period US$327,000 was received.
Administration expenses for the 2021 year totalled US$1,790,000 (2020:
US$3,083,000). The main reasons for the decrease in administration expenses
was the reduction in non-executive directors from four to three, saving
US$177,000, a reduction in professional fees of US$150,000 as a result of
completing the TEO in mid-2022 and a lower share-based payment expense in 2021
of $105,000 compared to $485,000 in 2020. Additionally, administration
expenses of US$367,000 relating to Kun-Manie were presented within
discontinued operation as at 31 December 2021 in line with the Board's plans
to sell the entity.
Other Comprehensive Income was charged with a translation loss of US$138,000
(2020: US$4,123,000) due to the weakening of the Russian rouble to the US
dollar. Expenditure on exploration was US$703,000 (2020: US$1,200,000) as the
Group completed and submitted the TEO Project for review in August 2021.
Exploration assets realised an exchange loss of US$585,000 (2020: exchange
loss US$3,840,000) also due to the weakening of the Russian rouble to the US
dollar.
An aggregate of £254,000 in cash was received, post year end from the
execution of warrants in late January / early February 2022.
Covid-19
During early 2021, the Group continued to care for the safety of its personnel
by implementing special measures to protect its workforce while at the same
time ensuring business continuity. The Company continued to operate
effectively over an extended period of time without requiring regular access
to physical offices, slowly reverting to pre-Covid-19 operating conditions as
the situation eased towards the end of 2021.
Covid-19 created significant uncertainty and disruption in the financial
markets. However, the Company has not realised a negative impact of Covid-19
on its ability to conduct business across the Group including the sale of its
iron ore subsidiary. With the virus apparently in the rear view, the
Directors will continue to monitor developments.
Outlook
The Company's primary objectives for 2022 includes the completion of the TEO
Project and continuing the acquisition of all necessary information for
commencement of the Mining Plan and the required incumbent study work.
Work will continue at a level allowing for the compilation of bankable
feasibility studies. Given that a mining operation within Russia requires
Russian sourced and certified work to obtain operational permits and access,
the initial focus is on the generation of a Russian bankable study.
Follow-on compilation of a hybrid western bankable study is also planned.
This hybrid study will include the Russian study work with necessary
considerations to allow for the document to support external Russia funding
sources.
Both documents will include the technical, environmental, and economic detail
for needed by unsanctioned Russian and external Russia institutional investors
to advance funding for mine construction and advancement into production.
Completion of both documents will require considerable interaction between
Russian and international organisations to complete an international BFS for
consideration.
We shall also continue to pursue the sale of the Kun-Manie project. The most
likely buyer will be a Russian entity due to the current geopolitical
situation in Ukraine.
On behalf of the Board of Directors, I would like to thank all the staff for
their dedication, loyalty and hard work throughout this period in getting the
TEO Project organised and progressing it toward its completion.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals Corp. S.P. Angel Corporate Finance LLP BlytheRay
Robin Young CEO Richard Morrison Megan Ray
Adam Cowl Tim Blythe
+7 (4212) 755 615 +44 (0) 20 3470 0470 +44 (0) 20 7138 3203
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
2021 2020
US$'000 US$'000
Non-current assets
Intangible Assets - 23,542
Property, plant and equipment - 452
Financial assets at fair value through profit and loss - 5,255
Total non-current assets - 29,249
Current assets
Inventories - 207
Trade and other receivables 109 158
Cash and cash equivalents 6,682 2,790
Total current assets 6,791 3,155
Non-current assets classified as held for sale 24,447 -
Total assets 31,238 32,404
Current liabilities
Trade and other payables 968 913
Total current liabilities 968 913
Non-current liabilities
Rehabilitation provision - 141
Total non-current liabilities - 141
Liabilities directly associated with non-current assets classified as held for 159 -
sale
Total liabilities 1,127 1,054
Net assets 30,111 31,350
Equity
Share capital 80,449 80,449
Share premium 4,278 4,278
Foreign currency translation reserve (17,612) (17,474)
Share options reserve 512 577
Retained deficit (37,516) (36,480)
Total equity 30,111 31,350
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
US$'000 US$'000
(1,790) (3,083)
Administrative Expenses
(1,790) (3,083)
Operating loss
- 205
Finance Income
Finance costs - (104)
Gain on revaluation of assets held at fair value through profit and loss* - 423
Loss on early redemption - (109)
(1,790) (2,668)
Loss before taxation
- -
Tax Expense
(1,790) (2,668)
Loss for the year from continuing operations
956 -
Profit from discontinued operations - assets sold
Loss from discontinued operations - assets held for sale (372) -
(1,206) (2,668)
Loss for the year
Loss attributable to: (1,206) (2,668)
- Owners of the parent
(0.13) (0.25)
Loss per share (cents) from continuing operations attributable to owners of
the Parent - Basic & Diluted
(0.04) -
Earnings per share (cents) from discontinued operations attributable to owners
of the Parent - Basic & Diluted
*Assets held at fair value were disposed of in the period and have been
included in discontinued operation for the year ended 31 December 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
US$'000 US$'000
(1,206) (2,668)
Loss for the year
Other comprehensive loss
Items that may be classified to profit or loss:
(138) (4,123)
Exchange differences on translation of foreign operations
(138) (4,123)
Total other comprehensive loss for the year
(1,344) (6,791)
Total comprehensive loss for the year attributable to:
- Owners of the parent
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
US$'000 US$'000 US$'000 US$'000
Cash flows from operating activities
Payments to suppliers and employees (1,833) (2,196)
(1,833) (2,196)
Net cash outflow used in operating activities
Cash flow from investing activities
Payments for exploration expenditure (426) (564)
Loans granted - (4,658)
Sale of investments 6,137 -
Interest received 327 43
6,038 (5,179)
Net cash generated from/(used in) investing activities
Cash flow from financing activities
Cash received on issue of shares, net of issue costs - 10,005
Issue of convertible loans, net of issue costs - 607
Repayment of convertible loans - (720)
- 9,892
Net cash generated from financing activities
4,205 2,517
Net Increase/(decrease) in cash and cash equivalents
2,790 398
Cash and cash equivalents at beginning of year
Exchange differences on cash and cash equivalents (313) (125)
6,682 2,790
Cash and cash equivalents at end of year
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share Share Premium Foreign Share Options Reserve Retained Deficit Total Equity
Capital US$'000 Currency US$'000 US$'000 US$'000
US$'000 Translation
Reserve
US$'000
Balance at 1 January 2020 69,510 4,790 (13,351) 1,136 (34,948) 27,137
Year ended 31 December 2020:
Loss for the year - - - - (2,668) (2,668)
Other comprehensive loss
Exchange differences on translation of foreign operations - - (4,123) - - (4,123)
Total comprehensive loss for the year - - (4,123) - (2,668) (6,791)
Issue of share capital 10,063 (512) - - - 9,551
Conversion warrants 876 - - - - 876
Options charge for the year - - - 577 - 577
Options expired - - - (1,136) 1,136 -
Balance at 31 December 2020 80,449 4,278 (17,474) 577 (36,480) 31,350
Balance at 1 January 2021 80,449 4,278 (17,474) 577 (36,480) 31,350
Year ended 31 December 2021:
Loss for the year - - - - (1,206) (1,206)
Other comprehensive loss
Exchange differences on translation of foreign operations - - (138) - - (138)
Total comprehensive loss for the year - - (138) - (1,206) (1,344)
Issue of share capital - - - - - -
Conversion warrants - - - - - -
Options charge for the year - - - 105 - 105
Options expired - - - (170) 170 -
Balance at 31 December 2021 80,449 4,278 (17,612) 512 (37,516) 30,111
1. Basis of prePARATION
a) General Information
Amur Minerals Corporation is incorporated under the British Virgin Islands
Business Companies Act 2004. The registered office is Kingston Chambers, P.O.
Box 173, Road Town, Tortola, British Virgin Islands.
The Company and its subsidiaries ("Group") locates, evaluates, acquires,
explores and develops mineral properties and projects with its primary asset
being located in the Russian Far East.
The Company is also the 100% owner of Irosta Trading Limited ("Irosta"), an
investment holding company incorporated and registered in Cyprus. Irosta holds
100% of the shares in AO Kun-Manie ("Kun-Manie"), an exploration and mining
company incorporated and registered in Russia, which holds the Group's mineral
licences. The Company also sold its wholly owned subsidiary Carlo Holdings
Limited during the year.
The Group's principal place of business is in the Russian Federation.
The Group's principal asset is the Kun-Manie production licence, which was
issued in May 2015. The licence is valid until 1 July 2035 and allows the
Company's subsidiary, AO Kun-Manie, to recover all revenues from 100% (less
metal extraction royalties) of the mined metal that specifically includes
nickel, copper, cobalt, platinum, palladium, gold and silver. The Company's
management are evaluating the project with a view of determining an
appropriate model for the development and ultimate exploitation of the
project. This includes the potential sale of the asset.
b) Basis of Preparation
These financial statements have been prepared under the historical cost
convention, except for the valuation of derivative financial instruments, on
the basis of a going concern and in accordance with UK-adopted international
accounting standards.
The financial statements are presented in thousands of United States Dollars.
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
The preparation of financial statements in accordance with International
Accounting Standards as issued by the International Accounting Standards Board
("IASB") and interpretations issued by the International Financial Reporting
Interpretations Committee ("IFRIC") requires management to make judgements,
estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and factors that are
believed to be reasonable under the circumstances, the results of which form
the basis of making judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ
from these estimates. The areas involving a higher degree of judgement or
complexity, or where assumptions and estimates are significant to the
consolidated financial statements, are disclosed in note 3.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision only affects that period, or in the period
of revision and future periods if the revision affects both current and future
periods.
c) Going concern
The Group operates as a natural resource exploration and development group. To
date, it has not earned any revenues and is considered to be in the final
stages of exploration and evaluation activities of its Kun-Manie project.
The Directors have reviewed the Group's cash flow forecast for the period to
30 June 2023 and believe the Group has sufficient cash resources to cover
planned and committed expenditures over the period. As a result of the sale of
Carlo Holdings Limited in the year, the Group received a cash injection of
US$6 million and has retained a large portion of the proceeds to date.
The Group plans to sell its wholly owned subsidiary Kun-Manie and if sold, the
Group will use the proceeds of sale to pay dividends while maintaining
sufficient funds to acquire another project via an RTO. Should an RTO not be
completed, the Company will enter into suspension and after six months in
suspension the Company will be delisted. In anticipation of a sale, the
board are examining projects of interest as a part of its strategy.
The Board are continuing the assess suitable offers to purchase Kun-Manie,
however, should a sale not go forward, the Directors have forecast a scenario
where the Kun-Manie project is advanced, and per the requirements to maintain
the license, develop a mine plan. The Board are confident that they have
sufficient funds to take the TEO forward and to produce a mine plan, and in a
worse-case scenario mitigating actions within the Directors' control could be
taken to reduce overheads if required. However, substantial funds would need
to be raised in order to fully support preproduction and construction of the
mine, outside of the going concern period.
The biggest risk with taking the Kun-Manie project forward is the Company's
ability to still operate within Russia in light of Russia's SMO and the
sanctions put in place by the rest of the world. To date, the Company has
still been able to control its subsidiary and operations, however, the Board
understands that further restrictions and sanctions could make operating and
raising sufficient capital from financial institutions in Russia difficult or
impossible.
Additionally, the Directors are confident that funding will be raised when
required, however they understand that their ability to do this is not
completely within in their control.
Under both scenarios outlined above the Directors are confident that
throughout the going concern forecast period the Group will have sufficient
funds to meet obligations as they fall due and thus the Directors continue to
prepare the financial statements on a going concern basis.
c) Loss per share
Basic and diluted loss per share is calculated and set out below. The effects
of warrants and share options outstanding at the year ends are anti-dilutive
and the total of 64.3 million (2020: 90.1 million) of potential ordinary
shares have therefore been excluded from the following calculations:
2021 2020
Number of shares
Weighted average number of ordinary shares used in the calculation of basic
earnings per share 1,379,872,315 1,071,175,000
2021
2020
Earnings US$'000 US$'000
Net loss for the year from continued operations attributable to equity (1,790)
shareholders
(2,688)
Loss per share for continuing operations (expressed in cents)
Basic and diluted loss per share (0.13) (0.25)
2021
2020
Earnings US$'000 US$'000
Net profit for the year from discontinued operations attributable to equity 584
shareholders
-
Earnings per share for continuing operations (expressed in cents)
Basic and diluted earnings per share (0.04) -
d) Events after the reporting date
On 28 January 2022, Plena Global Opportunities LLC elected to convert
3,000,000 warrants, at the warrant exercise price of 1.43 pence per share
providing the Company £42,900.
On 3 February 2022, Axis Capital Marketing, LTD elected to convert 5,000,000
warrants, at the warrant exercise price of 2.12 pence per share providing the
Company £106,000.
On 11 February 2022, Axis Capital Marketing, elected to convert 5,000,000
warrants, at the warrant exercise price of 2.12 pence per share providing the
Company £106,000.
On 23 February 2022, the Russian Federation began its 'special military
operation' in Ukraine triggering the implementation of a series of sanctions
with the Russian Federation subsequently enacting a series of currency control
measures.
On 9 May 2022, the Group received an offer to be approved by shareholders at a
General Meeting (scheduled for 25 May 2022) for the sale of 100% of its
interest in Irosta's wholly owned subsidiary, AO Kun-Manie. For a total
consideration of US$105 million, Stanmix Holding Limited will purchase AO KM
and the benefit of all amounts owed by AO KM to Amur under intra-group loans.
On 25 May 2022, the shareholders declined to approve the 9 May 2022 Share
Purchase Agreement.
On 7 June 2022, the Company issued an RNS stating the results of the TEO
Project by the State Committee on Reserves ("GKZ") which had been compiled by
mining experts Oreoll and the GKZ.
Annual Accounts
Copies of the Group's Annual Accounts will be posted to the Amur shareholders
today and are available for download from the Company's website at
www.amurminerals.com (http://www.amurminerals.com) .
Notes to Editors
The information on exploration results and Mineral Resources contained in this
announcement has been reviewed and approved by the CEO of Amur, Robin Young.
Mr. Young is a Geological Engineer (cum laude) and is a Qualified Professional
Geologist, as defined by the Toronto and Vancouver Stock Exchanges and a
Qualified Person for the purposes of the AIM Rules for Companies.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) (www.jorc.org
(http://www.jorc.org) )
A 'Mineral Resource' is a concentration or occurrence of material of intrinsic
economic interest in or on the Earth's crust in such form, quality and
quantity that there are reasonable prospects for eventual economic extraction.
The location, quantity, grade, geological characteristics and continuity of a
Mineral Resource are known, estimated or interpreted from specific geological
evidence and knowledge. Mineral Resources are sub-divided, in order of
increasing geological confidence, into Inferred, Indicated and Measured
categories.
An 'Inferred Mineral Resource' is that part of a Mineral Resource for which
tonnage, grade and mineral content can be estimated with a low level of
confidence. It is inferred from geological evidence and assumed but not
verified geological and/or grade continuity. It is based on information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes which may be limited or of uncertain
quality and reliability.
An 'Indicated Mineral Resource' is that part of a Mineral Resource for which
tonnage, densities, shape, physical characteristics, grade and mineral content
can be estimated with a reasonable level of confidence. It is based on
exploration, sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill
holes. The locations are too widely or inappropriately spaced to confirm
geological and/or grade continuity but are spaced closely enough for
continuity to be assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource for which
tonnage, densities, shape, physical characteristics, grade and mineral content
can be estimated with a high level of confidence. It is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough to confirm
geological and/or grade continuity.
An 'Ore Reserve' is the economically mineable part of a Measured and/or
Indicated Mineral Resource. It includes diluting materials and allowances for
losses which may occur when the material is mined. Appropriate assessments and
studies have been carried out, and include consideration of and modification
by realistically assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors. These assessments demonstrate
at the time of reporting that extraction could reasonably be justified. Ore
Reserves are sub-divided in order of increasing confidence into Probable Ore
Reserves and Proved Ore Reserves.
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