REG - Central Asia Metals - Interim Results for the 6 Months Ended 30 June 14 <Origin Href="QuoteRef">CAML.L</Origin> - Part 2
29/10/2014 14:19
- Part 2: For the preceding part double click ID:nRSY5503Sa
- 65 476 34 575
Net book value at 1 January 2014 9,278 1,890 5,506 19 16,693
Net book value at 30 June 2014 20,291 2,685 59,947 26 82,949
1. On completion of the SUC Transaction on 23 May 2014, the Group
derecognised its previously held 60% interest and recognised its 100% interest
at cost together with the fair value uplift associated with the transaction of
$54,015,555.
2. There was an additional amortisation charge during the period of
$280,055 as a result of the fair value uplift in intangible assets.
9. Trade and Other Receivables
30-Jun-14 31-Dec-13
$'000 $'000
Trade receivables 18,438 5,715
Less: provision for impairment of trade receivables (13) (33)
Trade receivables, net 18,425 5,682
Receivables from related parties - 11,654
Prepayments 2,015 1,156
20,440 18,492
Less: non - current portion
Trade and other receivables (5,406) (5,436)
Receivables from related parties - (11,654)
Current Portion 15,034 1,402
The carrying value of all the above receivables is a reasonable approximation
of fair value.
10. Share Capital and Premium
Number of Shares Ordinary Shares Share Premium Treasury Shares Total Equity
No $'000 $'000 $'000 $'000
At 1 January 2013 86,165,934 862 61,431 (4,236) 58,057
Capital reduction - - (61,431) - (61,431)
Sale of treasury shares - - - 136 136
At 31 December 2013 86,165,934 862 - (4,100) (3,238)
Ordinary shares issue 21,211,751 212 56,041 - 56,253
Exercised options - - - 420 420
Exercised warrants 260,000 3 423 - 426
At 30 June 2014 107,637,685 1,077 56,464 (3,680) 53,861
On the completion of the Kounrad transaction a total of 21,211,751 ordinary
shares were issued to Kenges Rakishev.
During 6 months ended 30 June 2014 the Group had no balances attributable to
non-controlling interests (31 December 2013: nil).
11. Cash Generated from operations
Six months ended
30-Jun-14 30-Jun-13
$'000 $'000
Profit before income tax including discontinued operations 52,176 11,454
Adjustments for:
Depreciation 4,485 1,259
Amortisation 467 26
Foreign exchange (2,495) (108)
Gain on re-measuring to fair value the existing interest on acquisition of control (33,039) -
Share options 799 330
Finance income (44) (9)
Finance costs 128 115
Charges in working capital:
Inventories 437 215
Trade and other receivables (13,453) 941
Trade and other payables (725) (1,012)
Movement in provisions (116) (41)
Cash generated from operations 8,620 13,170
12. Commitments
30-Jun-14 31-Dec-13
$'000 $'000
Kazakhstan 2,398 737
UK 1,116 1,095
Mongolia 42 90
Total 3,556 1,922
30-Jun-14 31-Dec-13
$'000 $'000
Property, plant and equipment 1,253 178
Intangible assets 314 218
Other 1,989 1,526
Total 3,556 1,922
At 30 June 2014 the amounts contracted for but not provided for in the
financial statements amounted to $3,556,098 for the Group (31 December 2013:
$1,922,398).
13. Dividend per share
An interim dividend of 5 pence per ordinary share (2013: 4 pence per share)
was declared by the CAML Board on 24 September 2014.
14. Business combination
The Company has been working on the completion of the acquisition of the
remaining 40% of the Kounrad Project since early 2012. The acquisition
(collectively known as the "Kounrad Transaction") consisted of two key parts;
· The first transaction involving the transfer of an additional 40%
ownership of Kounrad Copper Company LLP ("KCC") was completed on 21 October
2013.
· The second transaction involving the transfer of the remaining 40%
economic interest in the subsoil use contract ("SUC") remained outstanding as
at 31 December 2013. This was completed on 23 May 2014.
On completion of the Kounrad Transaction and in line with the agreements, a
total of 21,211,751 ordinary shares were issued to Mr Kenges Rakishev ("KR")
on 23 May 2014. In addition a cash payment of £848,470 ($1,432,047) was paid
to KR on that date in line with the agreements.
As a consequence of the completion of both transactions, the CAML Group became
100% owner of the Kounrad Project and, in accordance with IFRS 3 "Business
Combinations", recognized the acquired assets and liabilities of both KCC and
the SUC based upon their fair values.
Consideration
The fair value of the 21,211,751 Ordinary Shares issued as part of the
consideration for the Kounrad Transaction was determined based on the
published share price of the Company on the relevant dates. In the case of
KCC this was 21 October 2013 when the remaining 40% of KCC Shares were
re-registered and in the case of the SUC transfer it was deemed to be 23 May
2014 when the Kounrad Transaction was finally completed and the agreed
consideration paid to KR.
In addition an agreed cash consideration of $1,432,047 was paid on 23 May
2014. This was all allocated as consideration for the additional 40% shares
in KCC as per the legal agreements resulting in a minor adjustment of
$1,049,798 to the fair values associated with the assets and liabilities of
KCC as reported at 31 December 2013.
The total purchase consideration amounted to $57,685,494.
The table below summarises the consideration paid for both KCC and the SUC
together with the fair value of all the assets acquired and the liabilities
assumed for both the KCC and SUC parts of the Kounrad Transaction;
Consideration SUC$'000 Kounrad Copper Company LLP$'000 Total$'000
Equity instrument 16,845 39,409 56,254
Cash consideration - 1,432 1,432
Total consideration 16,845 40,841 57,686
Recognised amounts of identifiable assets acquired and liabilities acquired SUC Kounrad Copper Company LLP Total
Property, plant and equipment 4,196 73,875 78,071
Intangible assets 59,914 - 59,914
Inventories 554 4,075 4,629
Cash and cash equivalents 816 8,233 9,049
Trade and other receivables 2,225 35,855 38,080
Trade and other payables (23,159) (9,853) (33,012)
Borrowings (2,075) - (2,075)
Other liabilities and charges (359) (10,083) (10,442)
Deferred tax liabilities (10,803) (9,488) (20,291)
Total identifiable net assets at fair value 31,309 92,614 123,923
Derecognition of previously held interests 60%
Removal of book value 7,142 (32,796) (25,654)
Removal of fair value uplift (32,409) (28,465) (60,874)
Total interests acquired 40% 6,042 31,353 37,395
Purchase consideration 16,845 40,841 57,686
Provisional goodwill 10,803 9,488 20,291
Note - the numbers presented in the table above are provisional and subject to
review.
Completion of the SUC Transaction
As stated above, the second transaction involving the transfer of the
remaining 40% economic interest in the subsoil use contract ("SUC") completed
on 23 May 2014. In accordance with IFRS 3 "Business Combinations", the Group
recognised the assets and liabilities based upon their fair values. The fair
value uplift applied to the assets acquired as part of the SUC transaction has
all been applied to the intangible assets of the SUC under Mining Licences and
Permits resulting in an uplift of $54,016,000.
The Group recognised a gain of $32,409,333 as a result of measuring at fair
value its 60% interest in the SUC held before the business combination. This
gain is included in other income, as a line item "Gain on re-measuring to fair
value the existing interests on acquisition of control", in the Group's income
statement for the six month period ended 30 June 2014.
Minor amendments to KCC Transaction as reported at 31 December 2013
As at 31 December 2013, the cash consideration had been apportioned to both
the KCC and SUC parts of the Kounrad Transaction. This assumption was revised
following a review of the detailed legal agreements associated with the
transaction. Consequently, the adjustment and revised allocation of the cash
consideration to the KCC part of the transaction resulted in an additional
gain of $629,798 through the income statement.
As a result the Group reported a total gain through the income statement,
under the line item "Gain on re-measuring to fair value the existing interests
on acquisition of control", for the six month period ended 30 June 2014 of
$33,039,131. This reported gain is in addition to the $27,835,000 gain
reported by the Group in the 12 month period ending 31 December 2013 making a
reported total gain for the completion of the Kounrad Transaction of
$60,874,131.
This minor amendment to the allocation of the cash consideration also resulted
in an additional fair value uplift associated with the property, plant and
equipment of KCC. The fair value uplift reported as at 31 December 2013 was
$46,392,000 giving a total on completion of $47,441,797.
Provisional Goodwill
The provisional goodwill arising on the completion of the Kounrad Transaction
amounted to $20,291,043 which includes a minor adjustment of $209,933
resulting from the reallocation of the cash consideration assigned to KCC as
mentioned above. The goodwill is not deductible for tax purposes.
This is the amount of the deferred tax liability which arises on the
difference between the assigned fair value of the acquired assets and
liabilities and their tax base.
The acquisition costs related to the completion of the transaction in the six
months ended 30 June 2014 are approximately $105,161. These have been charged
to administrative expenses in the consolidated income statement.
15. Related Party Transactions
During the six month period ending 30 June 2014 the Group had no transactions
with related parties with the exception of the company's subsidiaries and the
Kounrad Transaction described below.
Kounrad Transaction
Mr Kenges Rakishev (KR) became a major shareholder of CAML on 23 May 2014
following completion of the Kounrad Transaction. He was appointed to the CAML
Board on 9 December 2013 following the completion of the first part of the
transaction. As a consequence, KR is considered a related party in any future
dealings he has with the Group.
As far as the Group is aware, they do not have any dealings with companies
associated with KR. As part of the obligations on KR for completing the
Kounrad Transaction, he signed a relationship agreement with CAML setting out
the terms of the relationship between KR and the Group.
As part of KR's business interests he recently completed the acquisition of a
46.5% interest in BTA Bank JSC along with JSC Kazkommertsbank. The Group uses
the facilities of JSC Kazkommertsbank within Kazakhstan for its normal
day-to-day banking.
16. Post Balance Sheet Events
On 2 July 2014, the Company announced that the SDB Group LLP, an entity 100
per cent. owned and controlled by Mr Kenges Rakishev, a Non-Executive Director
of the Company, had entered into a loan agreement whereby security over
21,211,751 ordinary shares of US$0.01 each in the capital of the Company (the
"Pledged Shares") held by Mr Kenges Rakishev was granted in favour of JSC
CenterCredit Bank.
There is no change in Mr Rakishev's legal or beneficial shareholding in the
Company and he continues to have an interest and voting rights in 21,211,751
ordinary shares. The Pledged Shares will remain subject to the restricted
dealing provisions originally agreed with Mr Kenges Rakishev and CAML as part
of the Kounrad Transaction.
The Company has obtained an undertaking from JSC CenterCredit Bank that should
the security be enforced, the Company will be granted a priority right to
place the shares.
On 23 July 2014 the Company allotted and issued 3,500,000 ordinary shares of
US$0.01 each to the trustee of the Central Asia Metals Limited Share Trust
(the "Employee Benefit Trust"). These ordinary shares are being issued with a
view to satisfying current awards granted under the Company's Employee Share
Plans together with any future awards that may be granted by the Company.
On 31 July 2014 Mirabaud Securities LLP exercised their remaining 932,053
warrants at an exercise price of 96 pence per share. The Company received
£894,771 in cash for the exercise of the warrants.
This information is provided by RNS
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