REG - East Star Resources - Half-year Report
29/09/2023 14:30
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RNS Number : 2229O East Star Resources PLC 29 September 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
29 September 2023
East Star Resources Plc
("East Star" or the "Company")
Half Year Report for the Six Months Ended 30 June 2023
East Star Resources Plc (LSE:EST), which is defining mineral resources in
Kazakhstan for the energy revolution, is pleased to present its half year
report for the six month period ended 30 June 2023.
Projects Highlights
Copper-Zinc-Lead - Rudny Altai VMS Belt
· Announced on 25 January 2023 the identification of a substantial
copper-zinc-lead-deposit located within the 100% owned RA3 licence (the
"Verkhuba Deposit")
o An independent JORC-compliant Exploration Target of 19-23 Mt at 1.4-1.9%
CuEq for the Verkhuba Deposit was announced on 21 March 2023, defined by 97
drill holes comprising 42,178 m of historical diamond drilling
o Conducted extensive geological traverse over project area in preparation
for drilling, mapping more than 70 historical collar locations
· Post period-end, in August 2023, East Star commenced diamond core
drilling, focusing primarily on the Verkhuba Deposit
· Announced on 20 September 2023 encouraging observations with visual
core inspection combined with X-ray fluorescence ("XRF") readings confirming
presence of copper and zinc mineralisation in the first four holes at Verkhuba
o Copper mineralisation identified in all holes with multiple massive
sulphide intervals recognised
o Drilling identified large thicknesses of disseminated copper
mineralisation, not previously acknowledged or assayed in historical drilling
· Core is being prepared for multi-element assay including copper,
zinc, and precious metals (gold/silver)
Rare Earths - East Kostanay
· Announced on 3 April 2023 assay results from drilling in November
2022 which demonstrated high grade intersections across the entire tested area
and broad intersections in every drill hole, validating historical data and
providing a strong indication of an REE deposit of consequential size and
grade
· Sequential leach test results announced on 16 June 2023 demonstrated
that a majority of REEs had been liberated from primary minerals during the
weathering process
· Planning low-cost assessment of additional test work to identify if
an economic process to leach rare earth elements from the weathered material
is possible
Gold - Chu-Ili Orogenic Gold Belt
· Assay results from 2022 drilling on Apmintas Licence announced on 13
February 2023 demonstrated:
o Anomalous gold mineralisation in all three target areas with potential
economic grades in the Eshkilitau II and Southern Shabdar targets
o Eshkilitau II has potential for a mineralised system with a strike of
>1 km along a fault zone with significant regional exploration upside
potential from >10km of strike
o Analysis ongoing to determine next steps
· Assay results from 2022 drilling on Dalny Licence announced on 26
April 2023 confirmed a gold bearing mineralised system with shallow
intersections of potentially economic grades and widths
o Analysis ongoing to determine next steps
Sandy Barblett, Non-Executive Chairman, commented:
"In early January 2023 East Star identified a substantial copper-zinc-lead deposit defined from extensive historical drilling. Since then, we have wasted no time in preparing for and undertaking our first copper drilling programme, primarily focusing on this deposit. Together with a number of exciting heli-electromagnetic and other targets, the Company's Rudny Altai prospects are potential game-changers for our Company in a prolific copper region with established infrastructure. We look forward in due course to receiving results of the first assays, from what is evidently a strongly mineralised system.
"In addition, field and desktop work continues on other prospects across the VMS licences. A review by one of the world's most prominent VMS experts, Dr Bruce Gemmell, highlights our licences as being "highly prospective for the discovery of new VMS deposits." This was further validated by a field visit from VMS expert, Dr Carl Brauhart, in August 2023, which confirmed our analysis that felsic volcanic rocks are abundant across the tenements with almost all field observations being consistent with a deep marine environment suitable for the establishment of VMS deposits.
"In parallel, East Star has continued to evaluate data from our rare earths and gold projects to determine the next steps in exploration."
For further information visit the Company's website at www.eaststarplc.com
(http://www.eaststarplc.com) , or contact:
East Star Resources Plc
Alex Walker, Chief Executive Officer
Tel: +44 (0)20 7390 0234 (via Vigo Consulting)
Peterhouse Capital Limited (Corporate Broker)
Duncan Vasey / Lucy Williams
Tel: +44 (0) 20 7469 0930
Vigo Consulting (Investor Relations)
Ben Simons / Peter Jacob
Tel: +44 (0)20 7390 0234
About East Star Resources Plc
East Star Resources is focused on the discovery and development of strategic
minerals required for the energy revolution. With an initial nine licences
covering 1,321.5 km² in three mineral rich districts of Kazakhstan, East
Star is undertaking an intensive exploration programme, applying modern
geophysics to discover minerals in levels that were not previously explored.
The Company also intends to further expand its licence portfolio
in Kazakhstan. East Star's management are based permanently on the ground,
supported by local expertise, and joint ventures with the state mining
company.
Follow us on social media:
LinkedIn: https://www.linkedin.com/company/east-star-resources/
(https://www.linkedin.com/company/east-star-resources/)
Twitter: https://twitter.com/EastStar_PLC (https://twitter.com/EastStar_PLC)
Subscribe to our email alert service to be notified whenever East Star
releases news:
www.eaststarplc.com/newsalerts (http://www.eaststarplc.com/newsalerts)
The person who arranged for the release of this announcement was Alex Walker,
CEO of the Company.
CHAIRMAN'S STATEMENT
Introduction
The first half of 2023 (the "Period") has seen intense operational activity.
In early January 2023, East Star identified a substantial copper-zinc-lead
deposit defined from extensive historical drilling. Since then, we have wasted
no time in preparing for and undertaking our first copper drilling campaign,
primarily focusing on this deposit. Together with a number of exciting
heli-electromagnetic ("HEM") and other targets, the Company's Rudny Altai
prospects are potential game-changers in a prolific copper region with
established infrastructure, providing a potential route to a low-CAPEX
development.
In parallel, East Star has continued work to evaluate data from our rare
earths and gold projects to determine the next steps in exploration.
Review of Operations
Copper-Zinc-Lead - Rudny Altai VMS Belt
On 25 January 2023, East Star announced the identification of a substantial
copper-zinc-lead deposit ("Cu-Zn-Pb") located within our 100% owned RA3
licence, centrally located in the world-class Rudny Altai VMS belt. The newly
identified polymetallic deposit known as the Verkhuba Deposit is within the
greater Verkhuba Ore District on East Star's licences which includes a number
of other high priority HEM anomalies.
The next step in anticipation of drilling was to commission leading resource
advisors AMC Consultants to determine an independent JORC-compliant
Exploration Target for the Verkhuba Deposit. On 21 March 2023, we published
AMC Consultants' Exploration Target of 19-23 Mt at 1.0-1.4% Cu and 1.0-1.4% Zn
(1.4-1.9% CuEq), which is defined by 97 drill holes comprising 42,178 m of
historical diamond drilling, reviewed by East Star over the preceding 12
months.
Shortly after the Period, in July 2023, we began to prepare the site for an
initial drilling programme. Our field teams undertook an extensive geological
traverse over the project area, mapping more than 70 historical collar
locations as well as a number of copper outcrops. On 10 July 2023, we
announced we had contracted Everest Sondaj LLP, a Turkish-owned and locally
operated drilling contractor with extensive experience in drilling oriented
diamond core in mountainous areas, to execute our drilling programme.
During August 2023, we commenced diamond core drilling at the Verkuba Deposit.
This initial programme was aimed, amongst other things, at twinning existing
boreholes with identified strong copper mineralisation, as well as testing the
potential of gold and silver mineralisation which was not assayed for in
historical drilling but is known to be present in metallurgical samples taken
from within the deposit.
On 20 September 2023, we were pleased to announce encouraging observations
from visual inspection and logging of core, with much of the drilling
correlating with anticipated mineralised zones from the historical data. Broad
zones of disseminated sulphides with consistent copper and zinc readings by
XRF, along with zones of chalcopyrite-rich massive sulphides, leaves very
little doubt we are in a strongly mineralised system. Core is currently being
prepared for assay which will provide the data we need to model these results
against the historical drill holes which will hopefully form the basis of a
JORC compliant resource.'
In addition, field and desktop work continues on other prospects across the
Rudny Altai VMS licences. A review by one of the world's most prominent VMS
experts, Dr Bruce Gemmell, highlights our licences as being "highly
prospective for the discovery of new VMS deposits." This was further validated
by a field visit from VMS expert, Dr Carl Brauhart, in August 2023, which
confirmed our analysis that felsic volcanic rocks are abundant across the
tenements with almost all field observations being consistent with a deep
marine environment suitable for the establishment of VMS deposits.
Rare Earths - East Kostanay
On 3 April 2023, we announced assay results from initial drilling to test the
Talairyk project for Rare Earth Element ("REE") concentrations. The results
demonstrated high grade intersections across the entire tested area and broad
intersections in every drill hole, validating historical data and providing a
strong indication of an REE deposit of consequential size and grade. Samples
analysed reported Total Rare Earth Oxides with an average grade of 934.4 ppm
with the highest-grade result of 2m at 6,127 ppm TREO.
Eight samples were sent for five-stage sequential leach test work to provide
an initial indication as to the leachability of the REEs from the clays. The
test work was conducted by the School of Applied Sciences at University of
Brighton, UK and the results were announced on 16 June 2023. Sequential leach
testing clearly demonstrated that a majority of REEs were liberated from
primary minerals during the weathering process and were now associated with
other mineral phases. Our understanding of the minerology and potential for
economic extraction of REEs from the Talairyk deposit has grown significantly
and, while not definitive, it will allow us to plan a low-cost assessment of
what additional test work is required to identify if an economic process to
leach rare earth elements from the weathered material is possible. We are
consulting with metallurgical specialists in this regard to assess the next
phase of testing.
Gold - Chu-Ili Orogenic Gold Belt
On 13 February 2023, we announced results from diamond core drilling
undertaken in 2022 on the Apmintas Licence. The results demonstrated gold
bearing systems in all three target areas. Eshkilitau II showed potential for
an extensive mineralised system with a strike of more than 1 km along a fault
zone. High-grade intersections at Southern Shabdar (32.15 g/t Au) and
Eshkilitau (14.01 g/t Au) demonstrated the existence of high-grade zones
within the mineralised systems while gold occurrences mapped over 10 km of the
Eshkilitau trend demonstrated the exploration upside within the region.
On 26 April 2023, we announced results from diamond core drilling in 2022 on
the Dalny Licence, with results from the Alatagyl northern area indicating a
gold bearing mineralised system with shallow intersections of potentially
economic grades and widths.
We are undertaking a review of all the drill results against the historical
data to expand our knowledge of the mineralisation system on these licences
and determine the scope of follow-up exploration.
Key East Star Financial Indicators
· Cash and cash equivalents at 30 June 2023 were £765,000
· Loss before taxation for the Period was £260,000
· The Group held net assets at 30 June 2023 of £3,494,000
Summary
We are eagerly awaiting the assays from the drilling at the Verkhuba Copper
Deposit from what is evidently a strongly mineralised system. Further
understanding and advancing the opportunity at Verkhuba and other attractive
targets is clearly our number one priority in the coming months given the
scale and proximity of the opportunity. A maiden JORC-compliant resource,
which we hope to obtain in due course, will move us a step closer towards our
objective of a low CAPEX, low OPEX development with nearby processing options.
I would like to pay tribute to Alex Walker and his in-country team for the
tremendous progress made during the Period. We thank all shareholders for
their continued support and look forward to updating you again in due course.
Sandy Barblett
Non-Executive Chairman
29 September 2023
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTH PERIOD ENDING 30 JUNE 2023
Unaudited Unaudited
Period ending Period ending
30 June
31 May
2022
2023
Note £'000 £'000
Continuing Operations
Administrative expenses 5 (260) (399)
Operating loss (260) (399)
Finance Income - (93)
Reverse acquisition expense - (1,626)
Loss before taxation (260) (2,118)
Other comprehensive income (60) 91
Total comprehensive loss for the period attributable to shareholders from (320) (2,027)
continuing operations
Basic & dilutive earnings per share - (£ pence) 6 (0.143) (1.435)
The notes form an integral part of the Condensed Consolidated Interim
Financial Statements.
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Unaudited Unaudited Audited
As At As At As At
30 June
31 May
31 December
2023
2022
2022
Note £'000 £'000 £'000
NON-CURRENT ASSETS
Exploration assets 7 2,543 - 2,268
Earn in advance (financial asset) 57 - 57
Property, plant and equipment 19 26 25
Intangibles - 1,039 -
TOTAL NON-CURRENT ASSETS 2,619 1,065 2,350
CURRENT ASSETS
Cash and cash equivalents 765 3,205 1,456
Trade and other receivables 180 327 133
TOTAL CURRENT ASSETS 945 3,532 1,589
TOTAL ASSETS 3,564 4,597 3,939
CURRENT LIABILITIES
Trade and other payables 70 50 127
TOTAL CURRENT LIABILITIES 70 50 127
TOTAL LIABILITIES 70 50 127
NET ASSETS 3,494 4,547 3,812
EQUITY
Share capital 9 1,823 1,823 1,823
Share premium 9 5,891 5,905 5,891
Share based payment reserve 10 270 106 268
Share capital to be issued 3,750 3,750 3,750
Foreign exchange reserve 6 93 66
Reverse acquisition reserve (4,795) (4,932) (4,795)
Retained earnings (3,451) (2,198) (3,191)
Non controlling interest (0.03) (0.03) -
TOTAL EQUITY 3,494 4,547 3,812
The notes form an integral part of the Condensed Consolidated Interim
Financial Statements.
The Condensed Consolidated Financial Statements were approved and authorised
by the Board of Directors on 29 September 2023
Sandy Barblett
Non-Executive Chairman
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTH PERIOD ENDING 30 JUNE 2023
Share Capital Share Premium Equity reserve SBP reserve Foreign exchange reserve Reverse acquisition reserve Share Capital to issue Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2021 53 132 31 - (4) - - (86) 126
Loss for period - - - - - - - (3,105) (3,105)
Other comprehensive income - - - - 70 - - - 70
Total comprehensive expense for year - - - - 70 - - (3,105) (3,035)
Transactions with owners in own capacity
Recognition of PLC equity at acquisition date 695 1,501 - 24 - 1,257 - - 3,477
Remove share capital of DVK (53) (132) (31) - - 216 - - -
Issue of shares for acquisition of subsidiary 504 2,014 - - - (6,268) 3,750 - -
Issue of shares for placing 624 2,494 - - - - - - 3,118
Share issue costs - (118) - - - - - - (118)
Broker warrants issued - - - 132 - - - - 132
Employee options issued - - - 112 - - - - 112
Transactions with owners in own capacity 1,770 5,759 (31) 268 - (4,795) 3,750 - 6,721
Balance at 31 December 2022 1,823 5,891 - 268 66 (4,795) 3,750 (3,191) 3,812
Loss for period - - - - - - - (260) (260)
Other comprehensive income - - - - (60) - - - (60)
Total comprehensive income for period - - - - (60) - - (260) (320)
Transactions with owners in own capacity
Employee options issued - - - 2 - - - - 2
Transactions with owners in own capacity - - - 2 - - - - 2
Balance at 30 June 2023 1,823 5,891 - 270 6 (4,795) 3,750 (3,451) 3,494
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
STATEMENT OF CASHFLOWS
FOR THE 6 MONTH PERIOD ENDING 30 JUNE 2023
Unaudited Unaudited
6 month period ended 6 month period ended
30 June
31 May
2022
2023
£'000 £'000
Cash flow from operating activities
Loss before taxation for the period (320) (2,027)
Adjustments for:
Share based payment on reverse acquisition - 1,626
Depreciation 7 -
Share based payments 2 82
Foreign exchange 54 35
Listing expenses settled in shares - 18
Changes in working capital:
Decrease / (increase) in trade and other receivables (102) 346
Increase / (decrease) in trade and other payables (46) (158)
Net cash outflow from operating activities (405) (78)
Cash flows from investing activities
Investment in fixed assets (1) (0.8)
Spend on exploration assets (275) (1,039)
Net cash flow from investing activities (276) (1,040)
Cash flows from financing activities
Proceeds from Issue of Shares - 3,100
Share Issue Costs - (105)
Net cash flow from financing activities - 2,995
Net increase in cash and cash equivalents (681) 1,877
Cash and cash equivalents at beginning of the period 1,456 1,353
Foreign exchange impact on cash (10) (25)
Cash and cash equivalents at end of the period 765 3,205
EAST STAR RESOURCES PLC - CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIOD ENDING 30 JUNE 2023
1. General information
East Star Resources Plc was incorporated under the Companies Act 2006 on 17
November 2020 in England and Wales under the name Cawmed Resources Limited and
remains domiciled there with Registered Number 13025608. The Company
subsequently changed its name to East Star Resources Limited on 27 January
2021 and on 3rd March 2021 re-registered as a plc. The following condensed
consolidated interim financial statements are consolidated to include the
Company and all its subsidiaries ("the Group").
The address of its registered office is Eccleston Yards, 25 Eccleston Place,
London SW1W 9NF, United Kingdom.
The principal activity of the Group is to explore opportunities in the natural
resources sector specifically in relation to gold and copper extraction. In
prior periods the Company successfully completed the acquisition of Discovery
Ventures Kazakhstan ("DVK"), a Kazakhstan based subsidiary which jointly holds
multiple exploration licenses. During this period the Group has under taken
significant exploration activities across these licenses and regularly
reported to the market on the immense potential of the area.
2. Accounting policies
IAS 8 requires that management shall use its judgement in developing and
applying accounting policies that result in information which is relevant to
the economic decision-making needs of users, that are reliable, free from
bias, prudent, complete and represent faithfully the financial position,
financial performance and cash flows of the entity.
2.1 Basis of preparation
The condensed consolidated interim financial statements ("interim financial
statements") have been prepared in accordance with International Accounting
Standard 34 "Interim Financial Reporting" (IAS 34). The interim financial
statements have been prepared on the historical cost basis, except for assets
and liabilities measured at fair value through profit and loss. The Directors
have decided not to present parent company standalone financial statements as
they do not add to the understandability of the position of the Group.
The functional currency for each entity in the Group is determined as the
currency of the primary economic environment in which it operates. The
functional currency of the Company's subsidiaries is the Kazakhstan Tenge. The
presentational currency of the Group is Pounds Sterling as this is the
functional currency of the parent entity and also the currency in which equity
fundraising has been facilitated. Amounts have been rounded to the nearest
£'000.
The interim financial statements have not been audited and do not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006. The figures have been prepared using applicable accounting policies and
practices consistent with those adopted in the audited annual financial
statements for the year ended 31 December 2022.
The interim financial statements are for the six months to 30 June 2023, being
six months from the financial year end for the Group being 31 December 2022.
The interim financial statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Group's annual audited financial statements for the
period ended 31 December 2022. The Group has prepared the interim financial
statements using reverse acquisition methodology and therefore has presented
the comparatives for the accounting acquirer (legal subsidiary - DVK). As per
IAS 34 the comparative data for the comparable year-to-date period has been
presented as well as the year-to-date figures for the immediately preceding
financial year being 31 December 2022.
Due to the Parent Company changing accounting reference dates from 31 November
to 31 December comparable interims periods are not strictly identical. However
as there is no seasonal affects to the business and the periods are of equal
length the Directors do not see any issue in presenting the comparative
period. The Group is in its relative infancy also and is yet to establish a
consistent business cycle so the usefulness of comparability is limited.
The business is not considered to be seasonal in nature.
New standards, amendments and interpretations adopted by the Group
During the current period the Group adopted all the new and revised standards,
amendments and interpretations that are relevant to its operations and are
effective for accounting periods beginning on 1 January 2023. This adoption
did not have a material effect on the accounting policies of the Group.
New standards, amendments and interpretations not yet adopted by the Group.
The standards and interpretations that are relevant to the Group, issued, but
not yet effective, up to the date of these interim Financial Statements have
been evaluated by the Directors and they do not consider that there will be a
material impact of transition on the financial statements.
2.2 Going concern
The Directors have assessed the Group's ability to adopt the going concern
basis of accounting and consider the adoption to be appropriate in the
preparation of the interim financial statements. Currently the Group has cash
and cash equivalents of £765k and its only major committed expenditure
relates to minimum spend commitments on licenses which equates to around
£260,000 until the Group's next reporting date. This combined with a current
average cash burn rate across the Group of around £30,000/month supports the
fact that the Group will not have any liquidity issues in the near future.
Management have prepared in depth budgets and cash flow analysis to support
their assumptions and hence are confident in the adoption of the going concern
basis for the Group.
2.3 Risks and uncertainties
The Directors continuously assess and monitor the key risks of the business.
The business has not materially changed since the end of the last period and
hence risks pertaining to the business remain materially similar. Overall the
Board feels that the team and risk mitigation factors that are in place are
sufficient to reasonably deal with any risks that may arise.
3. Critical accounting estimates and judgements
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
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 affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed below:
Recoverable value of exploration assets - Note 7
Costs capitalised in respect of the Group's mining assets are required to be
assessed for impairment under the provisions of IFRS 6. Such an estimate
requires the Group to exercise judgement in respect of the indicators of
impairment and also in respect of inputs used in the models which are used to
support the carrying value of the assets. Such inputs include estimates of
mineral reserves, production profiles, commodity prices, capital expenditure,
inflation rates, and pre-tax discount rates that reflect current market
assessments of (a) the time value of money; and (b) the risks specific to the
asset for which the future cash flow estimates have not been adjusted. The
Directors concluded that there was no impairment as at 31 December 2022 and
circumstances have not changed since then to indicate that there would be any
impairment at 30 June 2023.
4. Segment reporting
The Group manages its operations in two segments, being exploration activities
in Kazakhstan and corporate functions in the United Kingdom. The results of
these segments are regularly reviewed by the board as a basis for the
allocation of resources, in conjunction with individual investment appraisals,
and to assess their performance.
Contributions per segment to loss before taxation are detailed below:
United Kingdom Kazakhstan Total
£'000 £'000 £'000
Administrative expenses (205) (55) (260)
Operating loss from continued operations per reportable segment (205) (55) (260)
Reportable segment assets 891 2,673 3,564
Reportable segment liabilities (16) (55) (70)
Total 875 2,619 3,494
5. Administrative expenses
2023 United Kingdom Kazakhstan Total
£'000
£'000
£'000
Consultancy expense (41) (94) (135)
Professional fees (53) - (53)
Administrative expenses (61) (3) (64)
Salary expense (44) - (44)
Foreign Exchange (6) 42 36
(205) (55) (260)
6. Earnings per share
The calculation for basic and diluted earnings per ordinary share is based on
the total comprehensive loss after income tax attributable to equity
shareholders for the period and is as follows:
Unaudited Unaudited Audited
6 month period ended 6 month period ended Year
30 June
31 May
2023
2022 ended 31 December
2022
Net loss for the period attributable to ordinary equity holders for continuing (260) (2,027) (3,105)
operations (£'000)
Weighted average number of ordinary shares in issue 182,250,164 141,193,801 180,843,292
Basic and diluted earnings per share for continuing operations (pence) (0.143) (1.435) (1.72)
There is no difference between the diluted loss per share and the basic loss
per share presented. Share options and warrants could potentially dilute basic
earnings per share in the future but were not included in the calculation of
diluted earnings per share as they are anti-dilutive for the period presented.
See note 23 for further details.
7. Exploration & evaluation assets
£'000
Opening balance - 1 January 2023 2,268
Exploration expenditure across licenses 275
As at 30 June 2023 2,543
Exploration and evaluation assets relate specifically to mining licenses held
in the Kazakhstan based subsidiaries. The Group holds a total of 8 licenses
plus one jointly through a farm in arrangement with Phoenix Mining Ltd across
3 mineral districts being specifically the Chu-Ili belt, East Kostanay region
and Rudny Altai belt. The majority of investment in the assets has been across
the Chu-Ili and Rudny held licenses to date.
8. Investment in subsidiaries
Name Business Activity Country of Incorporation Registered Address Percentage Holding
Discovery Ventures Kazakhstan Limited Mineral exploration Kazakhstan bld. 12/1, VP 32, 3rd floor, IHUB coworking, D. Konayev Street, Yessil 100%
district, Astana city, Z05H9B0, Kazakhstan
Chu Ili Resources ltd* Mineral exploration Kazakhstan bld. 12/1, VP 32, 3rd floor, IHUB coworking, D. Konayev Street, Yessil 80%
district, Astana city, Z05H9B0, Kazakhstan
Rudny Resources ltd* Mineral exploration Kazakhstan bld. 12/1, VP 32, 3rd floor, IHUB coworking, D. Konayev Street, Yessil 80%
district, Astana city, Z05H9B0, Kazakhstan
*Subsidiaries held indirectly through Discovery Ventures Kazakhstan
9. Share capital and share premium
Ordinary Shares Share Capital Share Premium Total
# £'000 £'000 £'000
As at 31 December 2022 182,250,164 1,823 5,891 7,714
As at 30 June 2023 182,250,164 1,823 5,891 7,714
10. Share based payments reserve
The following options over ordinary shares have been granted by the Group and
are outstanding at period end:
£'000
Opening balance - 1 January 2023 268
Employee options 2
As at 30 June 2023 270
Warrants
As at 30 June 2023
Weighted average exercise price Number of
warrants
Brought forward at 1 January 2023 5p 14,813,505
Granted in period 5p -
Vested in period 5p -
Lapsed in period 5p (6,000,000)
Outstanding at 30 June 2023 5p 8,813,505
Exercisable at 30 June 2023 5p 8,813,505
Options
As at 30 June 2023
Weighted average exercise price Number of
warrants
Brought forward at 1 January 2023 5p 11,250,000
Granted in period(1) 5p 4,432,326
Vested in period 5p -
Cancelled in period (181,159)
Outstanding at 30 June 2023 5p 15,501,167
Exercisable at 30 June 2023 5p 11,250,000
(1) On 1 March 2023, 4,432,326 employee options were granted in relation to
the Long Term Incentive Plan implemented. These options have an exercise price
of £0.043 and expire 10 years from the grant date.
The option vesting details are listed below:
Vesting Event Trigger for Vesting Number of options vested on date of vesting
1 50% of the Shares under Option shall Vest on the first anniversary of the Date 50% of options issued
of Grant;
2 25% of the Shares under Option shall Vest on the second anniversary of the 25% of options issued
Date of Grant; and
3 the remaining number of the Shares under Option shall Vest on the third 25% of options issued
anniversary of the Date of Grant.
12. Related party transactions
Equity issued to Directors & Director related entities
As a result of the Long Term Incentive Plan implemented during the Period the
Directors and following employees were issued options as below:
Name Role Options
Alex Walker Director 2,898,511
Anthony Eastman Director 289,855
David Minchin Director 289,855
Sandy Barblett Director 289,855
Akmaral Niyazova Employee 181,159
Saltanat Mukasheva Employee 181,159
Zhanara Ismuratova Employee 181,159
Ruslan Balykbayev Employee 120,773
Provision of services
During the period, £30,241 was paid to Orana Corporate LLP for the provision
of administrative and corporate accounting services of which £6,030 remains
owing at 30 June 2023. Anthony Eastman is a Director of the Company and a
partner of Orana Corporate LLP.
Other than these there were no other related party transactions.
13. Events subsequent to period end
There were no material events subsequent to period end that require
disclosure.
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