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RNS Number : 8308M Eurasia Mining PLC 19 September 2023
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.
19 September 2023
Eurasia Mining plc
("Eurasia" or the "Company")
Interim Results for the six months ended 30 June 2023
Eurasia, the palladium, platinum, rhodium, iridium and gold mining company,
today reports its unaudited interim results and operational summary for the
six months ended 30 June 2023.
A copy of this announcement is also available on Eurasia's website at:
https://www.eurasiamining.co.uk/investors/news-announcements
(https://www.eurasiamining.co.uk/investors/news-announcements)
For further information, please contact:
Eurasia Mining Plc
Christian Schaffalitzky/ Keith Byrne
+44 (0)207 932 0418
SP Angel Corporate Finance LLP (Nomad and Broker)
Jeff Keating / David Hignell / Adam Cowl
+44 (0)20 3470 0470
Chairman's Statement
Dear Shareholder
The first six months of 2023 saw the Company focused principally on our plan
to sell our Russian assets.
Proposed sale of Russian assets
We have concentrated on this effort since 2020 and can report that we continue
to make progress. Our focus on BRICS non-sanctioned counterparties continues,
with several parties currently at various stages of their due diligence.
Although, as stated previously, there is no guarantee of a positive outcome to
this activity, the Board remains focused on achieving a successful conclusion.
West Kytlim
Site preparation work was completed during the first quarter of 2023, but due
to the sale process being Eurasia's main priority, no metal concentrate has
been produced at West Kytlim since the end of 2022.
Our key focus at West Kytlim has been on the sale of 2022 concentrate, which
is currently held in inventory, with no restrictions related to its sale as a
precious metals bearing high grade concentrate. The Board expects the
concentrates to be sold at carrying value and we are currently evaluating
offers from three parties who responded to the tender process.
We have started to receive value-added tax refunds (VAT) against capital
expenditure in previous years, which also contributes to our cash position
(see below), in addition to the proposed concentrate sale.
Monchetundra
The Definitive Feasibility Study ('DFS') at Monchetundra was approved by the
authorities in late June 2023. This allows Eurasia to present this development
and the resulting improvement in value to potential purchasers. The Company
does not believe it is appropriate to commence construction immediately, as it
is expected that any counterparties to the proposed asset sale may have their
own plans for the development of Monchetundra and can either proceed with the
EPCF contract signed with Sinosteel, or with a different contractor.
Financial position
The Company's current cash assets at 30 June 2023 including cash held in bank
accounts (£0.4 million) and US treasury notes (£1.54 million) totalled
£1.94 million. The value of unsold concentrate within Inventories at 30 June
2023 was approximately £3.5 million. In addition, the Company expects to
receive VAT refunds of circa £1.5 million.
The Company's cash reserves are held in USD and GBP accounts outside of Russia
and therefore not directly or indirectly exposed to Rouble foreign exchange
gains or losses against other major hard currencies.
Sanctions
The Board continues to maintain a regular dialogue with the Company's legal
advisers regarding the potential impact of any US, UK or EU sanctions on the
Company, its operations and assets. The Company remains satisfied that its
current operations are not prohibited under US, UK or EU sanctions rules.
Furthermore, the Group does not engage and has not engaged with any sanctioned
persons, entities or agencies. 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.
Management changes
Following the retirement of James Nieuwenhuys as CEO, the Company has
established an Operations Committee, led by Christian Schaffalitzky, which
oversees the day-to-day project development activities of the Company,
alongside the proposed sale process on which the full Board is engaged.
Eurasia does not intend to make any further management appointments at this
stage.
Litigation
The previously announced litigation case between the Company and Queeld
Investments Limited and Mispare Limited, and Eurasia remains ongoing. Further
developments regarding this case will be announced as appropriate. The
previously announced case filed by Logik Developments Ltd was settled in July
2023.
Outlook
We recognise that, in relation to the potential asset sale, it may be a source
of frustration for shareholders that we cannot report on specific
counterparties, the nature of our discussions, and the ongoing processes in
more detail. This reflects the regulatory regime and the many confidentiality
agreements that govern this activity. However, although there can be no
guarantees, all the Eurasia Board members are engaged in contributing towards
a successful outcome to this process, and we look forward to providing our
shareholders with further updates as appropriate.
We again thank our shareholders for their continued support.
Christian Schaffalitzky
Chairman
Eurasia Mining PLC
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2023
Note 6 months to 12 months to 6 months to
30 June 31 December 30 June
2023 2022 2022
(unaudited) (audited) (unaudited)
£ £ £
Sales 4 - 119,525 101,836
Cost of sales - (30,173) (36,197)
Gross profit - 89,352 65,639
Administrative costs (1,298,464) (4,618,351) (1,257,924)
Investment income 53,184 61,325 10,070
Finance costs (44,789) (107,697) (49,717)
Other gains 5 272,549 187,592 6,108,902
Other losses 5 (6,361,898) (2,842,309) (1,024,892)
(Loss)/profit before tax (7,379,418) (7,230,088) 3,852,078
Income tax expense - - -
(Loss)/profit for the period (7,379,418) (7,230,088) 3,852,078
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 682,020 (61,656) 405,694
Items that will be reclassified subsequently to
profit and loss:
Parents share of foreign exchange differences on translation 1,738,236 (341,762) 945,695
of foreign operations
Other comprehensive income/(loss) for the period, net of tax 2,420,256 (403,418) 1,351,389
Total comprehensive (loss)/income for the period (4,959,162) (7,633,506) 5,203,467
(Loss)/profit for the period attributable to:
Equity holders of the parent (5,638,150) (5,840,245) 2,556,416
Non-controlling interest (1,741,268) (1,389,843) 1,295,662
(7,379,418) (7,230,088) 3,852,078
Total comprehensive (loss)/income for the period attributable to:
Equity holders of the parent (3,899,914) (6,182,007) 3,502,111
Non-controlling interest (1,059,248) (1,451,499) 1,701,356
(4,959,162) (7,633,506) 5,203,467
Basic and diluted (loss)/profit (pence per share) (0.20) (0.21) 0.09
Condensed consolidated statement of financial position
As at 30 June 2023
Note At 30 June At 31 December At 30 June
2023 2022 2022
(unaudited) (audited) (unaudited)
£ £ £
ASSETS
Non-current assets
Property, plant and equipment 6 8,470,553 9,600,231 12,634,691
Assets in the course of construction 538,537 696,026 1,329,132
Intangible assets 7 2,748,361 2,859,368 3,146,073
Investment in financial assets 1,592,143 3,807,925
Investments in joint ventures - - 584,591
Total non-current assets 13,349,594 16,963,550 17,694,487
Current assets
Inventories 3,687,482 4,182,382 2,135,082
Trade and other receivables 8 2,684,475 3,171,669 4,124,692
Other financial assets 89,485 - -
Current tax assets 5,967 6,050 10,371
Cash and bank balances 405,875 1,009,908 13,559,308
Total current assets 6,873,284 8,370,009 19,829,453
Total assets 20,222,878 25,333,559 37,523,940
EQUITY
Capital and reserves
Issued capital 9 61,208,111 61,187,111 61,187,111
Reserves 10 5,330,971 3,580,929 4,868,386
Accumulated losses (44,604,733) (38,954,777) (30,558,116)
Equity attributable to equity holders of the parent 21,934,349 25,813,263 35,497,381
Non-controlling interest (4,460,796) (3,401,548) (248,693)
Total equity 17,473,553 22,411,715 35,248,688
LIABILITIES
Non-current liabilities
Lease liabilities 11 147,592 181,198 431,973
Provisions 13 173,645 254,218 470,029
Total non-current liabilities 321,237 435,416 902,002
Current liabilities
Borrowings - - 50,833
Lease liabilities 11 98,256 167,071 211,397
Trade and other payables 12 2,265,361 2,230,879 1,111,020
Provisions 13 64,471 88,478 -
(file:///C%3A/Users/alexa/Documents/EURASIA/01%20-%20EURASIA%20-%20Current/Audit%20and%20Interims/2023-06%20interims/EUA%20Interim%202023-V2.xlsx#RANGE!EM_Provision_Current)
Total current liabilities 2,428,088 2,486,428 1,373,250
Total liabilities 2,749,325 2,921,844 2,275,252
Total equity and liabilities 20,222,878 25,333,559 37,523,940
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 statement of changes in equity
For the six months ended 30 June 2023
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 2023 2,853,560 51,308,068 7,025,483 3,924,026 (343,097) (38,954,777) 25,813,263 (3,401,548) 22,411,715
Issue of shares under employee share option plan 5,000 16,000 11,806 (11,806) - - 21,000
Transaction with owners 5,000 16,000 - 11,806 - (11,806) - - 21,000
Loss for the period - - - - - (5,638,150) (5,638,150) (1,741,268) (7,379,418)
Other comprehensive loss
Exchange differences on translation - - - - 1,738,236 - 1,738,236 682,020 2,420,256
of foreign operations
Total comprehensive income - - - - 1,738,236 (5,638,150) (3,899,914) (1,059,248) (4,959,162)
Balance at 30 June 2023 2,858,560 51,324,068 7,025,483 3,935,832 1,395,139 (44,604,733) 21,913,349 (4,460,796) 17,473,553
Condensed consolidated statement of cash flows
for the six months ended 30 June 2021
6 months to 12 months to 6 months to
30 June 31 December 30 June
2023 2022 2022
(unaudited) (audited) (unaudited)
£ £ £
Cash flows from operating activities
(Loss)/profit for the period (7,379,418) (7,230,088) 3,852,078
Adjustments for:
Depreciation and amortisation of non-current assets 497,628 1,006,210 1,194,452
- Asset value write off to cost of sales 2,365,988
Gain/(loss) on sale or disposal of property, plant and equipment - (4,952) (4,219)
Finance costs recognised in profit or loss 47,548 107,697 49,717
Investment revenue recognised in profit or loss (53,184) (61,325) (10,070)
(Gain)/loss on disposal of investments 18,362 814,158 -
(Loss reversal)/loss recognised on valuation of inventory (272,549) 2,028,151 1,024,892
Rehabilitation cost recognised in profit or loss (57,548) 99,725 90,096
Net foreign exchange loss/(profit) 6,343,536 (182,640) (6,104,683)
(855,625) (1,057,076) 92,263
Movements in working capital
Increase in inventories (75,390) (6,166,681) (3,098,450)
Increase in trade and other receivables (71,805) (1,300,887) (1,614,762)
Increase in trade and other payables 392,291 1,716,777 508,844
Cash used in operations (610,529) (6,807,867) (4,112,105)
Net cash used in operating activities (610,529) (6,807,867) (4,112,105)
Cash flows from investing activities
Payments for investment securities - (7,030,548) -
Proceeds from sale of investment securities 2,284,775 2,835,299 -
Interest received - 11,943 10,070
loan provided to non-related party (143,071) - -
Investment to acquire interest in joint venture - (354,769) -
Payments for property, plant and equipment (1,210,627) (7,190,406) (6,221,805)
Payments for other intangible assets (475,540) (1,239,085) (910,258)
Proceeds from disposal of property, plant and equipment - 4,952 4,219
Net cash generated by/(used in) investing activities 455,537 (12,962,614) (7,117,774)
Cash flows from financing activities
Repayment of borrowings - (36,232) -
Proceeds from issues of equity shares 21,000 - -
Repayment of lease liability (41,167) (141,528) (24,757)
Interest paid (33,681) (90,446) (41,449)
Net cash used in financing activities (53,848) (268,206) (66,206)
Net decrease in cash and cash equivalents (208,840) (20,038,687) (11,296,085)
Effects of exchange rate changes on the balance of (395,193) (960,912) 2,845,886
cash held in foreign currencies
Cash and cash equivalents at the beginning of period 1,009,908 22,009,507 22,009,507
Cash and cash equivalents at the end of the period 405,875 1,009,908 13,559,308
Selected notes to the condensed consolidated financial statements for the six
months ended 30 June 2023
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 2022,
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 2023 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 2022.
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 2022.
4. Revenue
6 months to 12 months to 6 months to
30 June 31 December 30 June
2023 2022 2022
£ £ £
Sale of platinum and other metals - 61,075 -
Other revenue - 58,450 101,836
- 119,525 101,836
5. Other gains and losses
6 months to 12 months to 6 months to
30 June 31 December 30 June
2023 2022 2022
£ £ £
Gains
Gain on disposal of property, plant and equipment - 4,952 4,219
Reversal of loss on revaluation of stock to net realisable value 272,549 - -
Net foreign exchange gain - 182,640 6,104,683
272,549 187,592 6,108,902
Losses
Impairment of investments (18,362) (814,158) -
Loss on revaluation of stock to net realisable value - (2,028,151) (1,024,892)
Net foreign exchange loss (6,343,536) - -
(6,361,898) (2,842,309) (1,024,892)
(6,089,349) (2,654,717) 5,084,010
The majority of the foreign exchange gains and losses are a result of the
revaluation of monetary assets and liabilities in the subsidiary accounts as a
result of movements in the Rouble exchange rates.
In 2022 the Group took a decision to postpone the sale of platinum and other
metals due to a strong Ruble and low platinum price. Stock available at 30
June 2023 represents platinum concentrate ready for refining, which was valued
(i) using methodology set in the refining and sale and purchase agreement made
with local refinery in 2021 and (ii) exchange rate and metal prices at 30 June
2023.
6. Property, plant and equipment
30 June 31 December 30 June
2023 2022 2022
£ £ £
Net book value at the beginning of period 9,600,231 5,061,743 5,061,743
Additions 1,137,353 2,443,927 5,911,509
Transferred from assets under construction 90,499 4,776,644 -
Written off to inventory - (2,365,988) (2,365,988)
Depreciation (497,628) (1,006,210) (1,194,452)
Exchange differences (1,859,902) 690,115 2,855,891
Net book value at the end of period 8,470,553 9,600,231 12,634,691
7. Intangible assets
30 June 31 December 30 June
2023 2022 2022
£ £ £
Net book value at the beginning of period 2,859,368 1,389,029 1,389,029
Additions 475,540 1,239,085 910,258
Exchange differences (586,547) 231,254 846,786
Net book value at the end of period 2,748,361 2,859,368 3,146,073
Intangible assets represent capitalised costs associated with Group's
exploration, evaluation and development of mineral resources.
8. Trade and other receivables
30 June 31 December 30 June
2023 2022 2022
Trade receivables - - 78,520
Advances made 677,536 822,280 1,759,183
Prepayments 26,929 135,447 36,681
VAT recoverable 1,496,281 1,942,410 2,123,355
Other receivables 483,729 271,532 126,953
2,684,475 3,171,669 4,124,692
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.
9. Share capital
30 June 31 December 30 June
2023 2022 2022
Issued ordinary shares with a nominal value of 0.1p:
Number 2,858,559,995 2,853,559,995 2,853,559,995
Nominal value (£) 2,853,560 2,853,560 2,853,560
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; and
- 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 2023 2,853,559,995 2,853,560 51,308,068
Exercise of warrants and options 5,000,000 5,000 16,000
Balance at 30 June 2023 2,858,559,995 2,858,560 51,324,068
Deferred shares Number of deferred shares Deferred share
capital
£
Balance at 1 January and 30 June 2021 143,377,203 7,025,483
10. Reserves
30 June 31 December 30 June
2023 2022 2022
£ £ £
Capital redemption reserve 3,539,906 3,539,906 3,539,906
Foreign currency translation reserve 1,395,139 (343,097) 944,360
Equity-based payment reserve 395,926 384,120 384,120
5,330,971 3,580,929 4,868,386
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.
11. Lease liabilities
The Group leases certain of its plant and equipment. The average lease term is
4.5 years, expiring in 2025. 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
2023 2022 2022
£ £ £
Less than one year 179,418 224,700 315,252
Between one and five years 103,334 202,820 496,817
More than five years - - -
282,753 427,520 812,069
Less future finance charges (36,905) (79,251) (168,699)
Present value of minimum lease payments 245,848 348,269 643,370
Present value of minimum lease payments 30 June 31 December 30 June
2023 2022 2022
£ £ £
Less than one year 147,592 167,071 211,397
Between one and five years 98,256 181,198 431,973
More than five years - - -
Present value of minimum lease payments 245,848 348,269 643,370
12. Trade and other payables
30 June 31 December 30 June
2023 2022 2022
Trade payables 802,525 270,214 615,115
Accruals 1,326,107 1,825,269 56,826
Social security and other taxes 45,523 46,460 167,392
Other payables 91,206 88,936 271,687
2,265,361 2,230,879 1,111,020
The fair value of trade and other payables is not materially different to the
carrying values presented. The above listed payables were all unsecured.
13. Provision
30 June 31 December 30 June
2023 2022 2022
£ £ £
Long term provision:
Environment rehabilitation 470,029 254,218 470,029
Short term provision:
Environment rehabilitation - 88,478 -
470,029 342,696 470,029
Movement in provision Six month to 12 month to Six month to
30 June 31 December 30 June
2023 2022 2022
£ £ £
At 1 January 342,696 200,762 200,762
Recognised in the period - 54,612 79,541
Utilised in the period - - -
Reduction resulting from re-measurement or settlement without cost (57,548) 45,446 10,555
Unwinding of discount and effect of changes in the discount rate 13,867 17,251 8,268
Exchange difference (60,899) 24,625 170,903
At the end of the period 238,116 342,696 470,029
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 6.6% to
6.88% (2020: 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 by 30 June 2023 will be incurred within
2023-2025.
14. 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 Rub16.68 mln
(approximately £150,000) 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 2023 the average lease term was 2 years and
present value of minimum lease payments £245,848 (2022: £643,370).
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