REG - Eurasia Mining PLC - Interim Results for the six months ended 30 June
30/09/2022 07:01
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RNS Number : 2363B Eurasia Mining PLC 30 September 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN REGULATION NO.
596/2014 (AS IT FORMS PART OF RETAINED EU LAW AS DEFINED IN THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018) AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS
UNDER ARTICLE 7 OF THAT REGULATION.
30 September 2022
Eurasia Mining plc
("Eurasia" or the "Company")
Interim Results for the six months ended 30 June 2022
Eurasia, the palladium, platinum, rhodium, iridium and gold producing company,
today reports its unaudited interim results and operational summary for the
six months ended 30 June 2022.
Chairman's Statement
Dear Shareholder,
The first half of 2022 has seen significant progress at our West Kytlim mine,
as described in the Operations Update below. Eurasia's plan to install grid
power to site to reduce the carbon output associated with overburden
stripping, while also reducing operational expenditure and improving
efficiency, is advancing well and our electric dragline, which is currently
being assembled, is aimed to significantly improve the stripping programme
this coming winter.
At Monchetundra the ongoing DFS study for the Loipishnune and West Nittis open
pits represents an important reporting milestone for the project's development
and is on schedule for submission before the end of 2022.
Since February the conflict in Ukraine has affected all international commerce
to some extent. The effect on our operations, including funding group
subsidiary companies has been minimal to date. We took the decision to
stockpile ore from West Kytlim at the beginning of the mining season due to
our strong cash position, volatility in the market currently, and in
anticipation of higher realisable sales revenue in the future. As such,
despite producing 167 kg of PGM concentrate (113kg for full year 2021), we
have made no commercial sales of platinum in the period, instead opting to
retain this PGM concentrate, which has a net realisable value of c.£3 million
for refining at a later date. The value ascribed to this concentrate is for
the platinum content only and does not include any other PGMs or gold.
Our cash balance remains robust, with more than £3 million and US$6.6 million
at the time of writing in the Group's sterling and US$ denominated bank
accounts respectively. Due to volatility in exchange rates in funding
subsidiaries through inter-company loans, a net gain of £6.1 million was
reported for the period. The Company's cash reserves are held in USD and GBP
accounts outside of Russia and therefore not directly exposed to Ruble foreign
exchange gains or losses against other major hard currencies.
Following the Company's Annual Results announcement of 29 June 2022, Eurasia's
directors have maintained a regular dialogue with the Company's legal advisers
regarding the potential impact of any UK or EU sanctions. The Company remains
satisfied that neither of its current activities at the West Kytlim Mine or on
the Kola Peninsula are prohibited under UK or EU sanctions rules. Furthermore,
the Group does not engage and has not engaged with any sanctioned persons,
entities or agencies.
To date there has been no significant impact on the Group's activities as a
result of the ongoing updates to the UK and EU sanctions legislation.
Sanctions introduced by the Russian Federal government have also not affected
the Group. The Group continues to closely monitor all regulatory requirements
and changes to the laws, rules and regulations, taking steps whenever
necessary to ensure compliance with new legislation.
With regards to the proposed sale of our Russian assets, as previously
announced, our M&A team is focusing on BRICS counterparties, and
discussions are ongoing with predominantly Russian, Indian and Chinese
non-sanctioned counterparties. Whereas progress has been made with certain
parties, at present there can be no guarantee that the Company will enter into
a legally binding sale and purchase agreement with any of the interested
parties. We expect potential buyers to remain anonymous until the Company is
in a position to execute a legally binding agreement and further updates
regarding the sale process will be made as appropriate.
In terms of the future development of Eurasia Mining PLC, we continue to look
at expanding the business in various ways, including the development of
hydrogen projects internationally coupled with new mining opportunities in
investment friendly jurisdictions. The Company is also committed to the
continued development of Monchetundra as well as NKT (Eurasia's project, a
Tier-1 scale Nickel mine formerly operated by Norilsk Nickel) and continuing
to mine at West Kytlim.
The Company's Board has decades of experience in mineral project
identification and the management of complex engineering projects during the
development phase, such as the three pits at West Kytlim (Malaya Sosnovka,
Klyuchiki and Bolshaya Sosnovka) which were successfully brought into
production by Eurasia's technical team. James Nieuwenhuys, our CEO launched a
number of mines, including as COO of Polyus (the world's largest gold company
in terms of reserves and resources) as well as Managing Director of
SNC-Lavalin and Bateman (large EPC companies).
We again thank our shareholders for their continued support.
Christian Schaffalitzky
Chairman of Eurasia Mining Plc
James Nieuwenhuys, Chief Executive Officer of the Company, commented;
"We continue to advance our plans at both operations in the Urals and Kola
Peninsula, adding value to both projects while pursuing a potential sale of
assets as previously announced. Despite significant geopolitical tensions the
operating environment within Russia itself has not changed materially with
respect to our operations there. The Board will take a view on the best
opportunity to refine to saleable metals at a later date, meanwhile production
is ongoing at the time of writing, and we look forward to updating on our
electric power and dragline projects, both expected to contribute to the
winter 2022/23 stripping programme."
Consent for release
Christian Schaffalitzky, FIMMM, PGeo, CEng, is a director of the Company. He
has reviewed the update and consents to the inclusion of the exploration
information in the form and context in which it appears here. He is a
Competent Person for the purposes of the reporting of these results.
For further information, please contact:
Eurasia Mining Plc
Christian Schaffalitzky/ Keith Byrne
+44 (0)207 932 0418
SP Angel Corporate Finance LLP (Nomad and Joint Broker)
Jeff Keating / David Hignell / Adam Cowl
+44 (0)20 3470 0470
Optiva Securities (Joint Broker)
Christian Dennis
Tel: +44 (0) 20 3137 1902
Operations update
West Kytlim
Eurasia's mine at West Kytlim commenced production on schedule this season,
with all three process plants in operation, due in large part to the careful
management of the winter stripping operation which precedes the mining season.
Major projects including the installation of an electric dragline and a power
line to site have progressed well through the summer months. All 286 posts on
the power lines route to site have been installed and the line itself is
currently being pulled through. Electric infrastructure at site, including the
high voltage sub-station constructing and commissioning and six separate
electrical hook ups, have been installed.
The work plan for the 2023 season envisages mining of the western bank of the
Tylai River. A detailed design for a small bridge has been prepared at an
estimated material cost of £231k. Work on this temporary construction,
designed to be moveable to another site as required, will commence in October
2022.
Lost time injury frequency rate ("LTIFR") remains at zero. A full-time labour
safety engineer, appointed earlier in this season has now introduced all
required protocols.
Year to date operational highlights
· Power line and e-dragline construction projects on course for
completion later in this season.
· LTIFR remains at zero for the 2022 season.
· Three process plants operational throughout the mining season
processing Kluchiki and Bolshaya Sosnovka ores.
· Typil exploration license drilling results show prospective ore
bodies at this exploration permit west of the main West Kytlim mine permit.
· A total of 434,000 cubic meters PGM bearing gravels washed at
three sites to 31 August 2022.
· A total of 167 kg raw platinum (113kg for full year 2021) has
been produced year to date and has been transported to a secure location in
Ekaterinburg for later refining.
West Kytlim is an ESG focussed mine site, as such it is the Company's
intention to keep the mine's environmental impact to a minimum:
· Cooperation Agreement signed in July 2022 with the Karpinsk
Municipal Administration on social and economic development in the town of
Kytlim.
· Limited use of reinforced concrete and asphalt. Mine buildings
built mostly of timber milled on site.
· Open pits remediated when 'mined out', with recovery within 5 to
10 years post mining.
· Modern machinery powered by renewable generated electricity
utilised where possible.
Our plans to transition from predominantly diesel-based stripping to renewable
generated electric powered stripping are nearing completion. The board
recognises the potential to remove the operational Green House Gas emissions
associated with this stage of the mining process as valuable in improving the
projects' environmental credits.
Typil license
An exploration programme for the 24.5km(2) Typil exploration license, directly
adjacent to the operating mine was approved in early 2021 allowing geological
mapping, using soil and stream sediment sampling on both banks of the Kosva
River to commence in August 2021.
468.1m (75 holes) were drilled on 7 lines in the northeast portion of the
Licence area and in areas where tree felling was not required. Key highlights
from the programme, with a drilling density commensurate with Russian standard
C2 Reserves are provided as follows;
· At the confluence of the Typil and Kosva rivers, a potential ore
body of 20m wide and 0.8m thick at an average grade of 235 mg/m(3) raw
platinum is contoured in Quaternary sediments.
· At the eastern bank of the Typil River a potential ore body 0.8m
thick with an inferred width of 80m at an average grade of 192 mg/m(3) raw
platinum is contoured in pre-Quaternary (Neogene) sediments.
· On Line 24, in Quaternary sediments of the Typil eastern bank, a
110m wide and not less than 0.6 m thick layer is identified with an average
grade of 284mg/m(3) (sample grades up to 860 mg/m3).
· On the eastern bank of the Typilez Creek, two lodes with
potentially economic platinum grades are identified. At a placer width of 160m
and average thickness of 1.3m, the average grade reported is 261 mg/m(3). At a
width of 80m and average thickness of 0.9m, the average grade increases to 310
mg/m(3) (sample grades up to 1,524 mg/m(3)).
· Numerous other platinum bearing intervals were identified in the
drill programme for follow up in the next stage of drilling while several
other prospective areas including the Typilez, Mulychevka and Kyria River
areas remain understudied.
These results are presented in a table in Appendix I below. The Typil
exploration report was provided by Michael Sukhov, Chief Geologist at
Kosvinsky Kamen.
Monchetundra, Monchetundra Flanks and other Kola projects
The Definitive Feasibility Study for the Monchetundra (West Nittis and Loipishnune) open pits is well advanced and on schedule for completion this year. Details of this report will be provided when a response is received from the relevant authorities. The Company has previously released a report commissioned by Wardell Armstrong International covering the adjacent NKT deposit, a deposit which the Company has title to through its Monchetundra Flanks license. Reporting on other Kola deposits, including Nyud and Moroshkovoe will be provided when Eurasia holds title to the relevant licenses. Operational highlights include:
· Monchetundra Definitive Feasibility Study being progressed for
completion by the end of 2022.
· Metallurgical testwork reports now available for compilation into
the larger DFS report. New metallurgical study by SGS, Mekhanobr-St
Petersburg, LIMS and Gipronickel (Norilsk Nickel's engineering arm) suggests
grades, recoveries and flowsheet unchanged from the 2016 feasibility study.
· Rock mechanics studies and Hydro/Geotech drilling now complete
for West Nittis and Loipishnune open pits.
· Recalculation of Monchetundra project resources and pit outlines,
reflecting metal price movement since the feasibility study, for submission as
a necessary component of the DFS.
· Work continues on assessment of the NKT Project, contained within
Eurasia's 80% Flanks exploration license adjacent the Monchetundra (West
Nittis and Loipishnune) mining license, as a standalone project or as a
project combined with Monchetundra deposits.
Appendix I: Representative Typil exploration license drilling results:
Drill line no Drill hole no From To Length (m) Width (m) Sediments Raw Pt* mg/m(3)
Sample Drill hole intervals
21 C-21-11 4.5 5.3 0.8 20 Quaternary 235
25 C-25-94 7.0 7.8 0.8 80 Neogene 192
Provisional placer deposits contoured at C2 drilling density
24 Drill holes 3.8* 7.3* 0.6*** 110 Quaternary 284
2-14
40 15-27 10.5* 13.6** 1.3*** 160 Quaternary 261
may be restated, at a higher cut-off grade as;
40 23-27 10.5* 13.6** 0.9*** 80 Quaternary 310
Note: * minimal depth; ** maximum depth; *** average length
The mineral measured at the West Kytlim mine is referred to as Raw Platinum
which is comprised of Platinum, Iridium, Palladium, Rhodium and Gold.
Drilling density for the programme is that of Russian standard C1 and C2 as
defined in Russian industry mineral reporting nomenclature. All drilling to
date at a drilling diameter of 20cm.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2022
Note 6 months to 12 months to 6 months to
30 June 31 December 30 June
2022 2021 2021
(unaudited) (audited) (unaudited)
£ £ £
Sales 4 101,836 2,331,225 425,965
Cost of sales (36,197) (2,584,680) (665,448)
Gross profit/(loss) 65,639 (253,455) (239,483)
Administrative costs (1,257,924) (2,717,765) (1,197,899)
Investment income 10,070 1,394 511
Finance costs (49,717) (103,445) (53,144)
Other gains 5 6,108,902 - 24,093
Other losses 5 (1,024,892) (65,250) -
Profit/(loss) before tax 3,852,078 (3,138,521) (1,465,922)
Income tax expense - -
Profit/(loss) for the period 3,852,078 (3,138,521) (1,465,922)
Other comprehensive (loss)/income:
Items that will not be reclassified subsequently to
profit and loss:
NCI share of foreign exchange differences on translation of foreign operations 405,694 36,855 1,293
Items that will be reclassified subsequently to
profit and loss:
Parents share of foreign exchange differences on translation 945,695 (58,679) 4,116
of foreign operations
Other comprehensive income/(loss) for the period, net of tax 1,295,040 1,351,389 5,409
Total comprehensive income/(loss) for the period 5,203,467 (3,160,345) (1,460,513)
Profit/(loss) for the period attributable to:
Equity holders of the parent 2,556,416 (2,910,479) (1,351,127)
Non-controlling interest 1,295,662 (228,042) (114,795)
3,852,078 (3,138,521) (1,465,922)
Total comprehensive income/(loss) for the period attributable to:
Equity holders of the parent 3,502,111 (2,969,158) (1,347,011)
Non-controlling interest 1,701,356 (191,187) (113,502)
5,203,467 (3,160,345) (1,460,513)
Basic and diluted profit/(loss) (pence per share) 0.09 (0.10) (0.05)
Condensed consolidated statement of financial position
As at 30 June 2022
Note At 30 June At 31 December At 30 June
2022 2021 2021
(unaudited) (audited) (unaudited)
£ £ £
ASSETS
Non-current assets
Property, plant and equipment 6 12,634,691 5,061,743 4,578,844
Assets in the course of construction 1,329,132 640,423 124,303
Intangible assets 7 3,146,073 1,389,029 792,425
Investment to potential share in joint venture 8 584,591 367,464 368,447
Total non-current assets 17,694,487 7,458,659 5,864,019
Current assets
Inventories 9 2,135,082 38,673 360,630
Trade and other receivables 10 4,124,692 1,681,864 450,659
Current tax assets 10,371 5,334 5,348
Cash and bank balances 13,559,308 22,009,507 16,067,991
Total current assets 19,829,453 23,735,378 16,884,628
Total assets 37,523,940 31,194,037 22,748,647
EQUITY
Capital and reserves
Issued capital 11 61,187,111 61,187,111 51,080,629
Reserves 12 4,868,386 3,922,691 3,985,486
Accumulated losses (30,558,116) (33,114,532) (31,555,180)
Equity attributable to equity holders of the parent 35,497,381 31,995,270 23,510,935
Non-controlling interest (248,693) (1,950,049) (1,872,364)
Total equity 35,248,688 30,045,221 21,638,571
LIABILITIES
Non-current liabilities
Lease liabilities 14 431,973 307,136 405,494
Provisions 16 470,029 143,268 99,422
Total non-current liabilities 902,002 450,404 504,916
Current liabilities
Borrowings 13 50,833 31,953 32,038
Lease liabilities 14 211,397 122,407 113,059
Trade and other payables 15 1,111,020 486,558 443,943
Provisions 16 - 57,494 16,120
Total current liabilities 1,373,250 698,412 605,160
Total liabilities 2,275,252 1,148,816 1,110,076
Total equity and liabilities 37,523,940 31,194,037 22,748,647
Condensed statement of changes in equity
For the six months ended 30 June 2021
Attributable to owners of the parent
Note Share Share premium Deferred shares Other reserves Foreign currency translation reserve Accumulated losses Total attributable to owners of parent Non-controlling interest Total equity
capital
£ £ £ £ £ £ £ £ £
Balance at 1 January 2021 2,758,702 28,028,671 7,025,483 3,924,026 57,344 (30,204,053) 11,590,173 (1,758,862) 9,831,311
Issue of ordinary share capital for cash 53,307 14,072,982 - - - - 14,126,289 - 14,126,289
Share issue cost - (858,516) - - - - (858,516) - (858,516)
Transaction with owners 53,307 13,214,466 - - - - 13,267,773 - 13,267,773
Loss for the period - - - - - (1,351,127) (1,351,127) (114,795) (1,465,922)
Other comprehensive loss
Exchange differences on translation - - - - 4,116 - 4,116 1,293 5,409
of foreign operations
Total comprehensive income - - - - 4,116 (1,351,127) (1,347,011) (113,502) (1,460,513)
Balance at 30 June 2021 2,812,009 41,243,137 7,025,483 3,924,026 61,460 (31,555,180) 23,510,935 (1,872,364) 21,638,571
Condensed statement of changes in equity
For the six months ended 30 June 2022
Attributable to owners of the parent
Note Share Share premium Deferred shares Other reserves Foreign currency translation reserve Accumulated losses Total attributable to owners of parent Non-controlling interest Total equity
capital
£ £ £ £ £ £ £ £ £
Balance at 1 January 2022 2,853,560 51,308,068 7,025,483 3,924,026 (1,335) (33,114,532) 31,995,270 (1,950,049) 30,045,221
Transaction with owners - - - - - - - - -
Loss for the period - - - - - 2,556,416 2,556,416 1,295,662 3,852,078
Other comprehensive loss
Exchange differences on translation - - - - 945,695 - 945,695 405,694 1,351,389
of foreign operations
Total comprehensive income - - - - 945,695 2,556,416 3,502,111 1,701,356 5,203,467
Balance at 30 June 2022 2,853,560 51,308,068 7,025,483 3,924,026 944,360 (30,558,116) 35,497,381 (248,693) 35,248,688
Condensed consolidated statement of cash flows
for the six months ended 30 June 2022
6 months to 12 months to 6 months to
30 June 31 December 30 June
2022 2021 2021
(unaudited) (audited) (unaudited)
£ £ £
Cash flows from operating activities
Profit/(loss) for the period 3,852,078 (3,138,521) (1,465,922)
Adjustments for:
Depreciation and amortisation of non-current assets 1,194,452 422,752 289,850
- Asset value write off to cost of sales - 149,882
(Loss)/gain on sale or disposal of property, plant and equipment (4,219) - -
Finance costs recognised in profit or loss 49,717 103,445 53,144
Investment revenue recognised in profit or loss (10,070) (1,394) (511)
Loss on impairment of financial assets
Loss on impairment of inventory 1,024,892
Rehabilitation cost recognised in profit or loss 90,096 145,785 61,643
Net foreign exchange (profit)/loss (6,104,683) 65,250 (24,093)
92,263 (2,252,801) (1,085,889)
Movements in working capital
Increase in inventories (3,098,450) (24,862) (346,782)
Increase in trade and other receivables (1,614,762) (1,395,059) (163,307)
Increase in trade and other payables 508,844 197,729 155,217
Cash used in operations (4,112,105) (3,474,993) (1,440,761)
Net cash used in operating activities (4,112,105) (3,474,993) (1,440,761)
Cash flows from investing activities
Interest received 10,070 1,394 511
Investment to acquire interest in joint venture - (367,465) (368,447)
Payments for property, plant and equipment (6,221,805) (1,910,033) (629,005)
Payments for other intangible assets (910,258) (682,419) (92,774)
Proceeds from disposal of property, plant and equipment 4,219 - -
Net cash used in investing activities (7,117,774) (2,958,523) (1,089,715)
Cash flows from financing activities
Proceeds from issues of equity shares - 24,929,694 14,126,289
Payment for share issue costs - (1,555,439) (858,516)
Repayment of lease liability (24,757) (101,674) (13,971)
Interest paid (41,449) (101,048) (51,966)
Net cash (used in)/generated by financing activities (66,206) 23,171,533 13,201,836
Net (decrease)/increase in cash and cash equivalents (11,296,085) 16,738,017 10,671,360
Effects of exchange rate changes on the balance of 2,845,886 (132,611) (7,470)
cash held in foreign currencies
Cash and cash equivalents at the beginning of period 22,009,507 5,404,101 5,404,101
Cash and cash equivalents at the end of the period 13,559,308 22,009,507 16,067,991
Selected notes to the condensed consolidated financial statements
for the six months ended 30 June 2022
1. General information
Eurasia Mining plc (the "Company") is a public limited company incorporated
and domiciled in Great Britain with its registered office at International
House, 42 Cromwell Road, London SW7 4EF, United Kingdom and principal place of
business at Clubhouse Bank, 1 Angel Court, EC2R 7HJ. The Company's shares are
listed on AIM, a market of the London Stock Exchange. The principal activities
of the Company and its subsidiaries (the "Group") are related to the
exploration for and development of platinum group metals, gold and other
minerals in Russia.
The financial information set out in these condensed interim consolidated
financial statements (the "Interim Financial Statements") do not constitute
statutory accounts as defined in Section 435 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2021,
prepared under International Financial Reporting Standards (the "IFRS"), have
been filed with the Registrar of Companies. The auditor's report on those
financial statements was unqualified. The report did not contain a statement
under Section 498(2) of the Companies Act 2006.
2. Basis of preparation
The Group prepares consolidated financial statements in accordance with
International Accounting Standards in conformity with the requirements of the
Companies Act 2006. These condensed consolidated interim financial statements
for the period ended 30 June 2022 have been prepared by applying the
recognition and measurement provisions of IFRS and the accounting policies
adopted in the audited accounts for the year ended 31 December 2021.
These Interim Financial Statements have been prepared under the historical
cost convention.
The accounting policies have been applied consistently throughout the Group
for the purposes of preparation of these condensed consolidated interim
financial statements.
The Interim Financial Statements are presented in Pounds Sterling (£), which
is also the functional currency of the parent company.
3. Accounting policies
The Interim Financial Statements have been prepared in accordance with the
accounting policies adopted in the Group's last annual financial statements
for the year ended 31 December 2021.
4. Sales
6 months to 12 months to 6 months to
30 June 31 December 30 June
2022 2021 2021
£ £ £
Sale of platinum and other metals 52,037 2,331,225 425,965
Rental income 49,799 - -
101,836 2,331,225 425,965
There has been no commercial sale of platinum in H12022. Raw platinum
concentrate from the West Kytlim mining operation is currently being
stockpiled at a secure location in Ekaterinburg for refining at more
favourable Platinum and other PGM prices at a later date. Revenue generated in
the first six months of 2022 is from the price adjustment due to timing
between point of sale of other metals in 2021 and settlement date in early
2022 (£52,037), as well as income from rental of mining equipment to a mine
site contractor (£49,799).
5. Other gains and losses
6 months to 12 months to 6 months to
30 June 31 December 30 June
2022 2021 2021
£ £ £
Gains
Gain on disposal of property, plant and equipment 4,219 - -
Net foreign exchange gain * 6,104,683 - 24,093
6,108,902 - 24,093
Losses
Impairment of inventory ** (1,024,892) - -
Net foreign exchange loss - (65,250) (429,171)
(1,024,892) (65,250) (429,171)
5,084,010 (65,250) (405,078)
* Significant exchange gain is a result of revaluation of monetary items
expressed in Russian Rubles ('RUB') which strengthens from GBP/RUB 101.18 at 1
January 2022 to GBP/RUB 63.6 at 31 June 2022.
** Impairment of inventory - revaluation of stockpiled platinum concentrate
to net realisable value using platinum price and RUB/USD exchange rate
prevailing at 30 June 2022.
6. Property, plant and equipment
30 June 31 December 30 June
2022 2021 2021
£ £ £
Net book value at the beginning of period 5,061,743 4,295,908 4,295,908
Additions 5,911,509 1,298,813 533,983
Written off to cost of sales - (149,882) -
Depreciation (1,194,452) (422,752) (289,850)
Exchange differences 2,855,891 39,656 38,803
Net book value at the end of period 12,634,691 5,061,743 4,578,844
7. Intangible assets
30 June 31 December 30 June
2022 2021 2021
£ £ £
Net book value at the beginning of period 1,389,029 696,504 696,504
Additions 910,258 682,420 92,774
Exchange differences 846,786 10,105 3,147
Net book value at the end of period 3,146,073 1,389,029 792,425
Intangible assets represent capitalised costs associated with Group's
exploration, evaluation and development of mineral resources.
8. Investment to potential share in joint venture
Investments to potential share in joint venture represents an investment made
in March 2021 to enter into a joint venture and acquire, in stages, 75%
interests in new assets on Kola peninsula leveraging agreements in place with
both Rosgeo and the Far East and Arctic Region Development Corporation.
('ERDC', see RNS dated 6 December 2021). It is intended that these assets
would be held in new joint venture companies to be developed at the Company's
option. By 31 December 2021 The Company had invested RUB37,180,000 (£367,464
at the then prevailing RUB/GBP exchange rate). No further investments have
been made in the reporting period, and the amount is carried to 30 June 2022
as RUB37,180,000 (£584,591).
9. Inventory
30 June 31 December 30 June
2022 2021 2021
Platinum concentrate 1,753,532 - -
Other inventory 381,550 38,673 360,630
2,135,082 38,673 360,630
Stockpiled platinum concentrate has been revalued to net realisable value
using platinum price and RUB/USD exchange rate prevailing at 30 June 2022.
10. Trade and other receivables
30 June 31 December 30 June
2022 2021 2021
Trade receivables 78,520 480,588 495
Advances made 1,759,183 520,385
Prepayments 36,681 140,335 22,707
VAT receivable 2,123,355 359,290 324,261
Other receivables 126,953 181,266 103,196
4,124,692 1,681,864 450,659
The fair value of trade and other receivables is not materially different to
the carrying values presented. None of the receivables are provided as
security or past due.
11. Share capital
30 June 31 December 30 June
2022 2021 2021
Issued ordinary shares with a nominal value of 0.1p:
Number 2,853,559,995 2,853,559,995 2,724,774,624
Nominal value (£) 2,853,560 2,853,560 2,724,775
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
Issued deferred shares with a nominal value of 4.9 p:
Number 143,377,203 143,377,203 143,377,203
Nominal value (£) 7,025,483 7,025,483 7,025,483
Deferred shares have the following rights and restrictions attached to them:
- they do not entitle the holders to receive any dividends and distributions;
- they do not entitle the holders to receive notice or to attend or vote at
General Meetings of the Company;
- on return of capital on a winding up the holders of the deferred shares are
only entitled to receive the amount paid up on such shares after the holders
of the ordinary shares have received the sum of 0.1p for each ordinary share
held by them and do not have any other right to participate in the assets of
the Company.
There had been no change in the issued share capital during the reporting
period
Ordinary shares Number of shares Share Share
capital
premium
£ £
Balance at 1 January 2022 2,853,559,995 2,853,560 51,308,068
Balance at 30 June 2022 2,853,559,995 2,853,560 51,308,068
Deferred shares Number of deferred shares Deferred share
capital
£
Balance at 1 January and 30 June 2022 143,377,203 7,025,483
12. Reserves
30 June 31 December 30 June
2022 2021 2021
£ £ £
Capital redemption reserve 3,539,906 3,539,906 3,539,906
Foreign currency translation reserve 944,360 (1,335) 61,460
Equity-based payment reserve 384,120 384,120 384,120
4,868,386 3,922,691 3,985,486
The capital redemption reserve was created as a result of a share capital
restructuring in earlier years. There is no policy of regular transactions
affecting the capital redemption reserve.
The foreign currency translation reserve represents exchange differences
relating to the translation from the functional currencies of the Group's
foreign subsidiaries into GBP.
The equity-based payments reserve represents a reserve arisen on (i) the grant
of share options to employees under the employee share option plan and (ii) on
issue of warrants under terms of professional service agreements.
13. Borrowings
30 June 31 December 30 June
2022 2021 2021
£ £ £
Current
Unsecured loan 50,833 31,953 32,038
50,833 31,953 32,038
In 2017 the Group entered into unsecured loan facility to borrow up to 57
million Russian Rubles ('RUB') at 14% per annum, from Region Metal, the then
contractor and the West Kytlim mine operator. The Group had drawn RUB 4.18
million and repaid RUB 0.9 million by 31 December 2021. As the contractor's
arrangements had been discontinued the Group has no intention to utilise any
more funds from this facility. The loan was due for repayment in 2021 but the
Group received a court order not to repay the loan due to ongoing court
arbitrage between the lender and its creditors.
The Group is not a party of this arbitrage and/or not linked to any party.
No borrowing costs were capitalised in 2022 and 2021.
14. Lease liabilities
The Group leases certain of its plant and equipment. The average remaining
lease term is 3 years (2021: 4 years). . The Group has option to purchase the
equipment for a nominal amount at the maturity of the finance lease. The
Group's obligation under finance leases are secured by the lessor's title to
the leased assets.
Interest rates underlying all obligations under finance leases are fixed at
respective contract dates ranging from 21.9% to 23.5% per annum.
Minimum lease payments 30 June 31 December 30 June
2022 2021 2021
£ £ £
Less than one year 315,252 200,633 203,647
Between one and five years 496,817 377,027 511,819
More than five years - - -
812,069 577,660 715,466
Less future finance charges (168,699) (148,117) (196,913)
Present value of minimum lease payments 643,370 429,543 518,553
Present value of minimum lease payments 30 June 31 December 30 June
2022 2021 2021
£ £ £
Less than one year 211,397 122,407 113,059
Between one and five years 431,973 307,136 405,494
More than five years - - -
Present value of minimum lease payments 643,370 429,543 518,553
15. Trade and other payables
30 June 31 December 30 June
2022 2021 2021
Trade payables 615,115 210,665 232,746
Accruals 56,826 161,035 23,051
Social security and other taxes 167,392 18,751 44,594
Other payables 271,687 96,107 143,552
1,111,020 486,558 443,943
The fair value of trade and other payables is not materially different to the
carrying values presented. The above listed payables were all unsecured.
16. Provision
30 June 31 December 30 June
2022 2021 2021
£ £ £
Long term provision:
Environment rehabilitation 470,029 143,268 99,422
Short term provision:
Environment rehabilitation - 57,494 16,120
470,029 200,762 115,542
Movement in provision Six months to 12 months to Six months to
30 June 31 December 30 June
2022 2021 2021
£ £ £
At 1 January 200,762 52,137 52,137
Recognised in the period 79,541 138,020 60,292
Utilised in the period - - -
Reduction resulting from re-measurement or settlement without cost 10,555 7,487 -
Unwinding of discount and effect of changes in the discount rate 8,268 2,397 1,178
Exchange difference 170,903 721 1,935
At the end of the period 470,029 200,762 115,542
Provision is made for the cost of restoration and environmental rehabilitation
of the land disturbed by the West Kytlim mining operations, based on the
estimated future costs using information available at the reporting date.
The provision is discounted using a risk-free discount rate of from 8.65% to
8.70% (2021: 3.87% to 5.08%) depending on the commitment terms, attributed to
the Russian Federal Bonds.
Provision is estimated based on the sub-areas within general West Kytlim
mining licence the company has carried down its operations on by the end of
the reporting period. Timing is stipulated by the forestry permits issued at
the pre-mining stage for each of sub-areas. Actual costs in respect of the
long-term provision recognised in 2022 will be incurred within 2023-2025.
17. Commitments
At the time of the award of the Monchetundra mining license a royalty payment
was calculated by the Russian Federal Reserves Commission. 20% of this payment
was paid in December of 2018 and the remaining 80%, or RUB 16.68 million
(approximately £262,000) to be paid by November 2023.
During 2020 the Group entered into several lease agreements to lease mining
plant and equipment. As at 30 June 2022 the average lease term was 3 years and
present value of minimum lease payments £643,370 (30 June 2021: £518,553).
18. Contingent liabilities
In 2021 the Company had invested RUB 37,180,000 (£584,591 at a prevailing
exchange rate at 30 June 2022) in respect of the Nyud-Moroshkovoe and other
potential licenses and projects as per the agreements in place with Rosgeo and
ERDC.
Further investments are at the Company's discretion. The Nyud-Moroshkovoe
project is being used by the Company as the template for the remaining assets,
which will only be evaluated after the successful conclusion of the
Nyud-Moroshkovoe project.
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