REG - Eurasia Mining PLC - Interim Results
27/09/2024 07:00
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RNS Number : 8994F Eurasia Mining PLC 27 September 2024
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.
27 September 2024
Eurasia Mining plc
("Eurasia" or the "Company")
Interim Results for the six months ended 30 June 2024
Eurasia Mining Plc ("Eurasia" or the "Company"), 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 2024.
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
+44 (0)207 932 0418
SP Angel Corporate Finance LLP (Nomad and Broker)
Jeff Keating / David Hignell / Adam Cowl
+44 (0)20 3470 0470
Yellow Jersey PR (Financial PR)
Charles Goodwin / Shivantha Thambirajah
+44 (0)207 932 0418
eurasia@yellowjerseypr.com (mailto:eurasia@yellowjerseypr.com)
Chairman's Statement
Dear Shareholder,
As announced in the Annual Report, which was published earlier in this month
of September, the first six months of 2024 reflected the maintenance of the
Company's assets in good standing while continuing with our possible asset
sale process.
At West Kytlim, low level work and maintenance required to comply with the
regulations continued. The PGM concentrate inventory stockpile continues to be
stored in a secure facility with some additional material generated from the
required compliance. High grades of Osmium (c.2% Osmium metal content in the
PGM concentrate) were discovered recently through several tests of 3
representative samples selected from over 6Koz of concentrate by
internationally certified laboratory Anserteko. The discovery of high grades
of Osmium leads to significant increase of the value of the existing PGM
concentrate inventory, as well as the significant increase of the in-situ
value of the reserves and resources of the West Kytlim mine and its revenue
generation potential.
At Monchetundra, work in preparation for mine construction neared completion
and the advancing of NKT tier-1 (according to Wardell Armstrong International,
please refer to RNS dated 16 December 2021) brownfield asset continued.
Post period end, in September the Company entered into a trade finance
facility to provide additional liquidity in addition to the stored metal
concentrates. As described in the Company's announcement dated 6 September
2024, the facility will provide up to £2.5 million to the Company in tranches
upon certain milestones being achieved, and is convertible by the lender at an
average conversion price of 2.7 pence per share, being a premium to the
current share price.
The Company continues to monitor the sanction regimes in the US, UK and EU to
ensure ongoing compliance. The Company remains satisfied that its activities
are not prohibited under the sanctions' rules.
Our strategy continues to focus primarily on the potential sale of the
Company's assets in Russia, being the West Kytlim operating mine, the
Monchetundra Project mining license, the NKT brownfield project and the
entitlement to the Nyud brownfield project. The Company remains committed to
this possible sale and, as ever, there can be no guarantee that Eurasia will
enter into binding agreements regarding the sale process.
We are grateful to our shareholders for their continued support and I look
forward to providing information regarding our forthcoming AGM.
Christian Schaffalitzky
Executive Chairman
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2024
Note 6 months to 12 months to 6 months to
30 June 31 December 30 June
2024 2023 2023
(unaudited) (audited) (unaudited)
£ £ £
Sales 4 - 2,069,262 -
Cost of sales - (1,564,224) -
Gross profit - 505,038 -
Administrative costs (885,970) (1,185,490) (1,298,464)
Investment income 2,958 55,159 53,184
Finance costs (49,145) (83,101) (44,789)
Other gains 5 1,230,703 391,983 272,549
Other losses 5 (870,249) (6,364,529) (6,361,898)
(Loss)/profit before tax (571,703) (6,680,940) (7,379,418)
Income tax - (2,001) -
expense
(Loss)/profit for the period (571,703) (6,682,941) (7,379,418)
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 (134,419) 530,146 682,020
Items that will be reclassified subsequently to
profit and loss:
Parents share of foreign exchange differences on translation (264,735) 1,352,061 1,738,236
of foreign operations
Other comprehensive (loss)/income for the period, net of tax (399,154) 1,882,207 2,420,256
Total comprehensive (loss)/income for the period (970,857) (4,800,734) (4,959,162)
(Loss)/profit for the period attributable to:
Equity holders of the parent (553,519) (5,486,899) (5,638,150)
Non-controlling interest (18,184) (1,196,042) (1,741,268)
(571,703) (6,682,941) (7,379,418)
Total comprehensive (loss)/income for the period attributable to:
Equity holders of the parent (818,254) (4,134,838) (3,899,914)
Non-controlling interest (152,603) (665,896) (1,059,248)
(970,857) (4,800,734) (4,959,162)
Basic and diluted loss (pence per share) (0.02) (0.21) (0.20)
Condensed consolidated statement of financial position
As at 30 June 2024
Note At 30 June At 31 December At 30 June 2023
2024 2023
(unaudited) (audited) (unaudited)
£ £ £
ASSETS
Non-current assets
Property, plant and equipment 6 9,473,508 10,210,983 8,470,553
Assets in the course of construction 518,150 336,131 538,537
Intangible assets 7 3,436,107 3,148,382 2,748,361
Investment in financial assets - - 1,592,143
Total non-current assets 13,427,765 13,695,496 13,349,594
Current assets
Inventories 4,127,939 2,305,108 3,687,482
Trade and other receivables 8 1,271,268 1,736,589 2,684,475
Other financial assets 67,304 63,610 89,485
Current tax assets 4,661 5,806 5,967
Cash and bank balances 215,922 1,318,065 405,875
Total current assets 5,687,094 5,429,178 6,873,284
Total assets 19,114,859 19,124,674 20,222,878
EQUITY
Capital and reserves
Issued capital 9 61,233,311 61,233,311 61,208,111
Reserves 10 4,284,135 4,548,870 5,330,971
Accumulated losses (44,611,075) (44,057,556) (44,604,733)
Equity attributable to equity holders of the parent 20,906,371 21,724,625 21,934,349
Non-controlling interest (4,220,047) (4,067,444) (4,460,796)
Total equity 16,686,324 17,657,181 17,473,553
LIABILITIES
Non-current liabilities
Lease liabilities 12 6,142 24,966 147,592
Provisions 14 389,325 397,747 173,645
Total non-current liabilities 395,467 422,713 321,237
Current liabilities
Borrowings 11 50,713 44,014 -
Lease liabilities 12 113,324 139,178 98,256
Trade and other payables 13 1,843,351 861,498 2,265,361
Current tax liabilities - 90 -
Provisions 14 25,680 - 64,471
Total current liabilities 2,033,068 1,044,780 2,428,088
Total liabilities 2,428,535 1,467,493 2,749,325
Total equity and liabilities 19,114,859 19,124,674 20,222,878
Condensed statement of changes in equity
For the six months ended 30 June 2024 (unaudited)
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 2024 2,864,560 51,343,268 7,025,483 3,539,906 1,008,964 (44,057,556) 21,724,625 (4,067,444) 17,657,181
Transaction with owners - - - - - - - - -
Loss for the period - - - - - (494,924) (494,924) (3,535) (498,459)
Other comprehensive loss
Exchange differences on translation - - - - (323,330) - (323,330) (149,068) (472,398)
of foreign operations
Total comprehensive income - - - - (323,330) (494,924) (818,254) (152,603) (970,857)
Balance at 30 June 2024 2,864,560 51,343,268 7,025,483 3,539,906 685,634 (44,552,480) 20,906,371 (4,220,047) 16,686,324
Condensed statement of changes in equity
For the six months ended 30 June 2023 (unaudited)
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 2024
6 months to 30 June 12 months to 31 December 6 months to 30 June
2024 2023 2023
(unaudited) (audited) (unaudited)
£ £ £
Cash flows from operating activities
Loss for the period (571,703) (6,682,941) (7,379,418)
Adjustments for:
Depreciation and amortisation of non-current assets 1,929,115 1,139,921 497,628
Finance costs recognised in profit or loss 49,145 83,101 47,548
Investment revenue recognised in profit or loss (2,958) (55,159) (53,184)
(Gain)/loss on disposal of investments - 53,408 18,362
Impairment loss/(reversal) recognised on inventory 870,249 (391,983) (272,549)
Rehabilitation cost recognised in profit or loss (33,709) 104,158 (57,548)
Income tax expense recognised in profit or loss - 2,001 -
Net foreign exchange (profit)/loss (1,230,703) 6,311,121 6,343,536
1,009,436 563,627 (855,625)
Movements in working capital
(Increase)/decrease in inventories (2,582,503) 1,372,033 (75,390)
Decrease/(increase) in trade and other receivables 526,726 840,011 (71,805)
Increase/(decrease) in trade and other payables 913,478 (987,299) 392,291
Cash (used in)/generated by operations (132,863) 1,788,372 (610,529)
Income taxes paid 1,334 (2,965) -
Net cash (used in)/generated by operating activities (131,529) 1,785,407 (610,529)
Cash flows from investing activities
Proceeds from sale of investment securities - 3,651,014 2,284,775
Interest received - 382 -
loan provided to non-related party - (61,620) (143,071)
Payments for property, plant and equipment (887,525) (3,519,254) (1,210,627)
Payments for other intangible assets (135,366) (912,820) (475,540)
Net cash (used in)/generated by investing activities (1,022,891) (842,297) 455,537
Cash flows from financing activities
Proceeds from issues of equity shares - 46,200 21,000
Proceeds from borrowings - 44,014 -
Repayment of lease liability (49,631) (116,905) (41,167)
Interest paid (12,825) (49,887) (33,681)
Net cash used in financing activities (62,456) (76,578) (53,848)
Net (decrease)/increase in cash and cash equivalents (1,216,876) 866,531 (208,840)
Effects of exchange rate changes on the balance of 114,733 (558,374) (395,193)
cash held in foreign currencies
Cash and cash equivalents at the beginning of period 1,318,065 1,009,908 1,009,908
Cash and cash equivalents at the end of the period 215,922 1,318,065 405,875
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.
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 2023,
prepared in accordance with UK-adopted International Accounting Standards,
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
UK-adopted 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 2024 have been prepared by
applying the recognition and measurement provisions of the standards and the
accounting policies adopted in the audited accounts for the year ended 31
December 2023.
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 2023.
4. Revenue
6 months to 12 months to 6 months to
30 June 31 December 30 June
2024 2023 2023
£ £ £
Sale of platinum and other metals - 2,069,262 -
- 2,069,262 -
5. Other gains and losses
6 months to 12 months to 6 months to
30 June 31 December 30 June
2024 2023 2023
£ £ £
Gains
Reversal of loss on revaluation of stock to net realisable value - 391,983 -
Reversal of loss on revaluation of stock to net realisable value - - 272,549
Net foreign exchange gain 1,230,703 - -
1,230,703 391,983 272,549
Losses
Impairment of investments - - (18,362)
Loss on revaluation of stock to net realisable value (870,249) - -
Loss on debt settlement - (53,408) -
Net foreign exchange loss - (6,311,121) (6,343,536)
(870,249) (6,364,529) (6,361,898)
360,454 (5,972,546) (6,089,349)
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.
Loss on revaluation of stock available at 30 June 2024 represents platinum
concentrate ready for sale or refining, which was valued (i) using methodology
set in the refining and sale and purchase agreement made with local refinery
and (ii) exchange rate and metal prices at 30 June 2024.
6. Property, plant and equipment
30 June 31 December 30 June
2024 2023 2023
£ £ £
Net book value at the beginning of period 10,210,983 9,600,231 9,600,231
Additions 719,325 2,738,440 1,137,353
Transferred from assets under construction 2,305 991,394 90,499
Depreciation (1,929,115) (1,139,921) (497,628)
Exchange differences 470,010 (1,979,161) (1,859,902)
Net book value at the end of period 9,473,508 10,210,983 8,470,553
7. Intangible assets
30June 31December 30June
2024 2023 2023
£ £ £
Net book value at the beginning of period 3,148,382 2,859,368 2,859,368
Additions 135,366 912,820 475,540
Exchange differences 152,359 (623,806) (586,547)
Net book value at the end of period 3,436,107 3,148,382 2,748,361
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
2024 2023 2023
Trade receivables - 760,374 -
Advances made 17,271 - 677,536
Prepayments 24,730 126,330 26,929
VAT recoverable 521,875 343,425 1,496,281
Mining tax refund due 408,462 404,195 -
Other receivables 298,930 102,265 483,729
1,271,268 1,736,589 2,684,475
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
2024 2023 2023
Issued ordinary shares with a nominal value of 0.1p:
Number 2,864,559,995 2,864,559,995 2,858,559,995
Nominal value (£) 2,864,560 2,864,560 2,858,560
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;
- 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 2024 2,864,559,995 2,864,560 51,343,268
Balance at 30 June 2024 2,864,559,995 2,864,560 51,343,268
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
30June 31December 30June
2024 2023 2023
£ £ £
Capital redemption reserve 3,539,906 3,539,906 3,539,906
Foreign currency translation reserve 744,229 1,008,964 1,395,139
Equity-based payment reserve - - 395,926
4,284,135 4,548,870 5,330,971
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. Borrowings
30 June 31 December 30 June
2024 2023 2023
£ £ £
Current
Unsecured loan 50,713 44,014 -
50,713 44,014 -
In December 2023, the Group entered into unsecured loan facility to borrow RUB
5 million (GBP 44,014 at the rate exchange rate as at 31 December 2023) at 20%
per annum: Russian central bank rate of 16% at the date of the borrowing (19%
at the date of this report) plus 4% margin at the date of the borrowing (1% at
the date of this report). The loan is repayable by 31 December 2024. No
borrowing costs were capitalised in 2023 and 2024.
12. Lease liabilities
The Group has the following leases in place:
i) Leases of mining 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 obligations under finance leases are fixed at
respective contract dates ranging from 21.9% to 23.5% per annum. For
comparison Russian central bank rate is 19% at the date of this report.
ii) Rent of offices and other properties. The average lease term is three
years expiring in 2025. There is no option to purchase properties at the end
of rental period.
Interest rates underlying obligations under finance leases are fixed at
respective contract dates at 10.27% per annum.
Minimum lease payments 30 June 31 December 30 June
2024 2023 2023
£ £ £
Less than one year 118,706 157,445 179,418
Between one and five years 6,320 25,987 103,334
More than five years - - -
125,026 183,432 282,753
Less future finance charges (5,560) (19,288) (36,905)
119,466 164,144 245,848
Present value of minimum lease payments
Present value of minimum lease payments 30June 31December 30June
2024 2023 2023
£ £ £
Less than one year 113,324 139,178 147,592
Between one and five years 6,142 24,966 98,256
More than five years - - -
119,466 164,144 245,848
Present value of minimum lease payments
13. Trade and other payables
30June 31December 30June
2024 2023 2023
Trade payables 1,111,521 552,599 802,525
Accruals 239,346 170,316 1,326,107
Social security and other taxes 226,368 33,832 45,523
Other payables 266,116 104,751 91,206
1,843,351 861,498 2,265,361
The fair value of trade and other payables is not materially different to the
carrying values presented. The above listed payables were all unsecured.
14. Provision
30 June 31 December 30 June
2024 2023 2023
£ £ £
Long term provision:
Environment rehabilitation 389,325 397,747 173,645
Short term provision:
Environment rehabilitation 25,680 - 64,471
415,005 397,747 238,116
Movement in provision Six month to 12 month to Six month to
30 June 31 December 30 June
2024 2023 2023
£ £ £
At 1 January 397,747 342,696 342,696
Utilised in the period - 104,158 -
Reduction resulting from re-measurement or settlement without cost (33,709) - (57,548)
Unwinding of discount and effect of changes in the discount rate 31,988 33,214 13,867
Exchange difference 18,979 (82,321) (60,899)
At the end of the period 415,005 397,747 238,116
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 14.66% to
16.67% (2023: 12.01% to 12.61%) 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 2024 will be incurred within
2025-2040.
15. Commitments
During 2020 the Group entered into several lease agreements to lease mining
plant and equipment. As at 30 June 2024 the average lease term was one year.
During 2023 the Group entered into several rent agreements to rent office and
other properties. As at 30 June 2024 the average rental term was 1.5 year.
Present value of minimum lease payments £119,466 (30 June 2023: £245,848).
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