REG - Ferro-Alloy Resrcs. - Interim Results
26/09/2024 07:00
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RNS Number : 7092F Ferro-Alloy Resources Limited 26 September 2024
26 September 2024
Ferro-Alloy Resources Limited
("Ferro-Alloy" or "the Company" or "the Group")
Interim Results for the six months ended 30 June 2024
and
Carbon concentrate and feasibility study update
Ferro-Alloy Resources Limited (LSE:FAR), the vanadium producer and developer
of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, announces
its unaudited interim results for the six months ended 30 June 2024 and
provides an update on the results from the testing completed on its carbon
concentrate and the Balasausqandiq feasibility study.
Overview
Carbon Concentrate
· Results from the testing of the Company's carbon concentrate to be
produced from the tailings of the Balasausqandiq ore have confirmed the
suitability of the concentrate for use in tyre rubber manufacture and other
carbon black based rubber applications.
· The testing has shown that the carbon concentrate can be successfully
used as a partial substitute for conventional carbon black filler in a
passenger car tyre sidewall compound formulation.
· A marketing report quantifying the value proposition of the
concentrate is being finalised.
Feasibility Study
· Feasibility study for Phase 1 is ongoing:
o Current focus of the study is on the optimisation of the planned tailings
storage facility. Site selection is in progress and preliminary capital
estimates have been completed on a staged construction basis to refine initial
capital spend.
o Design capacity of the of the Phase 1 process plant has been increased to
1.65m tonnes throughput per year and the comminution circuit design work has
been completed.
o Reagent optimisation programme commenced to quantify improvements to the
project's expected operational expenditure.
o In order to accommodate the increased design capacity of the Phase 1
process plant and the reagent optimisation programme, the Company now expects
the feasibility study to be published during Q2 2025.
Operations
· The Plant operated well during the period. Production in H1 2024 was
slightly lower than H1 2023 due to lower overall grades of vanadium and
molybdenum contained within the catalysts processed.
· Commissioned two new drying ovens which allow the conversion of
ammonium metavanadate by disassociation into vanadium pentoxide which commands
better pricing. The Company is evaluating plans to acquire the equipment to
produce vanadium pentoxide flake to access a larger market.
· Test processing of the nickel-rich residues held at the plant site on
a commercial scale did not sufficiently replicate the results achieved in the
laboratory and consequently the plant will revert to processing bought-in
catalysts during Q4 2024. This decision is partly driven by low metal prices.
The Plant may resume treating the residues if metal product prices recover.
· Research and development are ongoing to determine the suitability of
the nickel-rich residues for the production of ferro-nickel.
Financial
· Total revenues of US$2.1m for the period (H1 2023: US$3.3m) reflect
the significant decrease in the price of vanadium pentoxide between the two
reporting periods.
· Overall loss for the period of US$3.99m (H1 2023: loss of US$1.53m).
· Cash balance of US$2.5m at the period end and US$1.1m as at 20
September 2024.
Corporate
· During the period, the Company listed and sold a third tranche of
bonds with a nominal value of US$5m under the terms of the Kazakhstan Bond
Programme on the AIX.
Nick Bridgen, CEO of Ferro-Alloy Resources said:
"The success of the carbon test work programme has confirmed the tremendous
value of this product in the manufacture of tyres and in the rubber industry
generally. This will be factored into the feasibility study which will also
include the increased throughput and reagent optimisation programme.
The current vanadium price is exceptionally low, principally caused by the
slow-down of construction in China. This is affecting current results, but the
long-term forecasts continue to show a deficit of world production as vanadium
redox flow batteries ramp up and China recovers. Historically, when a deficit
arises, the price moves up strongly."
ENDS
For further information, visit www.ferro-alloy.com or contact:
Ferro-Alloy Resources Limited Nick Bridgen (CEO) / William Callewaert (CFO) info@ferro-alloy.com
Shore Capital Toby Gibbs/Lucy Bowden +44 207 408 4090
(Joint Corporate Broker)
Panmure Liberum Limited Scott Mathieson/John More +44 20 3100 2000
(Joint Corporate Broker)
St Brides Partners Limited Ana Ribeiro / Charlotte Page +44 207 236 1177
(Financial PR & IR Adviser)
About Ferro-Alloy Resources Limited:
The Company's operations are all located at the Balasausqandiq deposit in
Kyzylordinskoye Oblast in the South of Kazakhstan. Currently the Company has
two main business activities:
a) the high grade Balasausqandiq vanadium project (the "Project"); and
b) an existing vanadium concentrate processing operation (the "Existing
Operation")
Balasausqandiq is a very large deposit, with vanadium as the principal product
together with several by-products. Owing to the nature of the ore, the capital
and operating costs of development are very much lower than for other vanadium
projects.
The most recent mineral resource estimate for ore-body one (of seven) provided
an Indicated Mineral Resource of 32.9 million tonnes at a mean grade of 0.62%
V(2)O(5) equating to 203,364 contained tonnes of vanadium pentoxide
("V(2)O(5)"). In the system of reserve estimation used in Kazakhstan the
reserves are estimated to be over 70m tonnes in ore-bodies 1 to 5 but this
does not include the full depth of ore-bodies 2 to 5 or the remaining
ore-bodies which remain substantially unexplored.
The Project will be developed in two phases, Phase 1 and Phase 2, with Phase 1
treating 1.65m tonnes per year.
There is an existing concentrate processing operation at the site of the
Balasausqandiq deposit. The production facilities were originally created from
a 15,000 tonnes per year pilot plant which was then expanded and adapted to
recover vanadium, molybdenum and nickel from purchased concentrates.
The existing operation is located on the same site and uses some of the same
infrastructure as the Project, but is a separate operation which will continue
in parallel with the development and operation of the Project.
Interim Management Report
The Company is engaged primarily in carrying out a feasibility study into the
giant Balasausqandiq vanadium project which is now entering the final stages.
Concurrently, the Company continues to operate a small-scale process plant to
produce vanadium, molybdenum and nickel from purchased concentrates.
Balasausqandiq feasibility study
Carbon black substitute concentrate
The Company's specialist rubber consultants in the UK have completed testing
on the carbon black substitute concentrate and the results have confirmed the
suitability of the concentrate for use in tyre rubber manufacture and other
carbon black based rubber applications.
The testing undertaken has shown that the carbon concentrate to be produced by
the Company from the Balasausqandiq ore tailings can be successfully used as a
partial substitute for conventional carbon black filler in a passenger car
tyre sidewall compound formulation. The results show that with a substitution
of up to 10% it was possible to produce compounds with similar physical
properties to that made with a control formulation using 100% N660 carbon
black, the most commonly used grade of carbon black for tyre sidewalls. Tyres
made with this blended material would, therefore, be expected to deliver
similar performance.
Whilst the data did show that the carbon concentrate, when substituted at
levels greater than 10%, produced slightly less of a reinforcing effect in the
rubber compound than conventional carbon black, some potential advantages in
physical properties were identified which could lead to improvements in tyre
rolling resistance and sidewall damage resistance.
Specialist marketing consultants are finalising their report which will advise
on marketing and the appropriate pricing of the Company's material.
Processing
The feasibility study has progressed with a primary focus on the optimisation
of the tailings storage facility by SRK Consulting (Kazakhstan) Limited. Site
selection has continued and a final geophysical survey is
underway. Preliminary capital estimates have been completed with a focus on
staging the construction of the facility to optimise the initial capital
spend.
As soon as the final carbon concentrate and vanadium market reports have been
received, SRK will commence the mine planning study.
As communicated last year, the 2023 ore reserve that was estimated for
Ore-Body 1 of the Balasausqandiq deposit was 35.4% larger than previously
estimated, which lead to a review of the appropriate size of the Phase 1
development plan. The Company has now applied to the Ministry of Industry and
Construction of the Republic of Kazakhstan for an amendment to the Company's
Subsoil Use Agreement which will have the effect of increasing the annual
tonnage to be mined during the life of Phase 1 of the project to 1.65 million
tonnes per year (including mining dilution) and to defer certain amounts to be
mined prior to and during commissioning. Ongoing discussions with a Working
Committee of the Ministry have required re-submission of certain documents
relating to environmental provisions, future site restoration plans and
industrial safety, prior to approval.
In anticipation of approval, the Company has increased the design capacity of
Phase 1 of the process plant to 1.65 million tonnes throughput per year. The
upgraded design is being progressed by Tetra Tech Limited and the comminution
circuit aspects of the design have been completed.
Concurrently, the Company has engaged SGS Canada Inc to conduct a reagent
optimisation programme to identify potential improvements to the metallurgical
regimes identified in the previously completed metallurgical programme to take
account of current reagent prices and delivery costs.
In addition to these items, the main components of the study currently
underway include the ecological study, estimate of capital costs and financial
evaluation.
In order to accommodate the increased design capacity of the Phase 1 process
plant and the reagent optimisation programme, the Company now expects the
feasibility study to be published during Q2 2025.
Operations review
The existing operation
The Company's existing process plant operated well during the period. However,
production was slightly lower than the same period in 2023 due to lower
overall grades of vanadium and molybdenum contained within the concentrates
processed.
During the period, two new drying ovens were commissioned which allow the
Company to convert a proportion of its production into vanadium pentoxide by
disassociation of ammonium metavanadate ("AMV"). Currently, the vanadium
pentoxide produced by the plant is in the form of powder but the Company plans
to acquire equipment for the production of vanadium pentoxide flakes, opening
up a larger and slightly higher priced market. The Company has also started to
expand the wet-tailings pond to increase pond capacity by almost 50%,
potentially allowing an increase in secondary vanadium and molybdenum
production from the solutions held in the pond as well as improving product
purity.
The Company has previously sold the residues from the treatment of catalysts
as a low grade nickel concentrate but, owing to low nickel prices and high
transport costs, the Company has chosen to stockpile this material while a
process for its further treatment could be developed by the Company's
technical department. This process has since been developed allowing a
significant amount of the remaining vanadium and molybdenum to be extracted
from the residues, raising the overall extraction of these metals from
catalysts to very high levels, as well as enriching the nickel content in the
remaining residues so that they can be more cost-effectively transported and
achieve a higher price. Following good laboratory test results, test
processing at a commercial scale during Q3 2024 did not sufficiently replicate
the results achieved in the laboratory and consequently the plant will revert
to processing bought-in catalysts during Q4 2024. In the event that global
metal prices recover to levels that would make the commercial processing of
the nickel residues profitable the plant may resume treating the residues
either instead of or concurrently with bought-in catalysts.
Research and development work by our technical department is ongoing to
determine whether the Company can process the upgraded nickel concentrates to
produce ferro-nickel.
Research and development
The Company is participating in three grant-funded research and development
projects in Kazakhstan after competitively tendering projects for awards for
the most promising opportunities for commercialisation of scientific and
scientific-technical activities.
As previously announced, one project is aimed at producing and commercialising
mixed vanadium oxides suitable for the production of electrolyte for vanadium
redox flow batteries. This project is in conjunction with the Satbayev
University in Almaty, Kazakhstan where the electrolytes are produced from
Company oxides and tested in a vanadium redox flow battery, following which
the agreed plan is for the commercial sale of three tonnes of mixed oxides.
The Company plans to position itself to be able to continue supplying into
this market on a fully commercial basis according to demand.
A second project is in association with the Kazakhstan National Engineering
Academy to build a pilot-scale plant at the existing plant site, in advance of
the construction of the mine, to produce a carbon concentrate direct from the
Balasausqandiq ore, rather than from the tailings as noted above, and to
develop commercial applications.
A third project is working with the Satbayev University on an improved
analytical-chemical process in the treatment of ore.
The Company also cooperates with the Satbayev University to offer work
experience to promising students, with opportunities for continuing work with
the Company. Not only does this enrich the student experience at the
Satbayev University but it also gives the Company a pathway to finding
high-quality recruits.
Production
During the period the plant processed 19.4% more tonnes of catalyst compared
to the prior year. However, as noted above, the overall metal grades of the
catalysts treated were less than those during 2023 resulting in 2% and 32%
less vanadium and molybdenum production, respectively. The plant produced 11.7
tonnes more nickel during the period in comparison to 2023, representing a
19.3% increase.
2024 2023 2024 2023 2024 2023
Quarter Tonnes of vanadium pentoxide* Tonnes of vanadium pentoxide* Tonnes of molybdenum** Tonnes of molybdenum** Tonnes of nickel*** Tonnes of nickel***
Q1 81.6 31.3 7.1 6.5 33.4 9.7
Q2 87.6 141.4 6.9 14.1 38.8 50.8
H1 169.2 172.7 14.0 20.6 72.2 60.5
* partly contained in AMV
** contained in ferro-molybdenum
*** contained in nickel concentrate
Outlook
Current vanadium prices, as detailed below, are exceptionally low and at a
level where it is difficult to forecast overall Group profitability
notwithstanding the successful operation of the current process plant and the
developments that are being achieved in new processes and improved operations.
Nevertheless, the plant is capable of generating a significant contribution to
the Group's current overheads which would be incurred as it completes the
feasibility study in any case.
Recent monthly average prices of vanadium pentoxide have been in the bottom 4%
of such monthly averages, adjusted for inflation, over the last 24 years.
Vanadium prices have been impacted by the slow-down in Chinese construction
and the sale of Russian product into China at discounted prices. These
conditions are not expected to change in the short term but, in the longer
term, they must do so to prevent large company closures and reductions in
capacity. Significant tonnages are going to be required for planned
large-scale vanadium redox flow batteries, most notably in China, and recently
announced changes to Chinese re-bar standards will potentially also act to
boost demand. Historically, the vanadium price has been volatile and shortages
rapidly translate into rising prices, sometimes to extremely high levels.
Meanwhile, the process plant operations are now running smoothly, and the new
equipment, products and increased pond and drying capacity will put the
Company in a good position to capitalise on rising prices.
Corporate
During the period, the Company listed and sold a third tranche of bonds with a
nominal value of US$5m under the terms of the Kazakhstan Bond Programme on the
AIX.
Product prices in the period
Vanadium Pentoxide
At the start of 2024, the price of vanadium pentoxide was around US5.75/lb,
after which the price fluctuated within a band of US$5.00/lb to US$6.00/lb for
the entirety of the reporting period under consideration. As at 20 September
2024, the price of vanadium pentoxide was US$5.00/lb.
Ferro-Molybdenum
At the start of 2024, the price of ferro-molybdenum was around US$48/kg, after
which it remained at a similar level until the end of April. From May onwards
the price fluctuated within a band of US$51/kg to US$55/kg until the end of
the reporting period. As at 20 September 2024, the price of ferro-molybdenum
was US$50/kg.
Earnings and cash flow
The Group generated total revenues of US$2.1m for the period compared to
US$3.3m for the first six months of 2023, representing a reduction in overall
revenue of US$1.2m. The reduction in revenue reflects the significant decrease
in the price of vanadium pentoxide between the two reporting periods (the
average price of vanadium pentoxide during the first six months of 2023 was
US$9.06/lb in comparison to US$5.58/lb in 2024). Additionally, the Group has
undertaken a number of tolling contracts during the period instead of
processing its own bought-in concentrates.
The cost of sales for the period under review was US$3.6m in line, given the
volumes and nature of concentrates processed, with the first six months of
2023 (2023: US$3.6m).
Administrative expenses for the period were US$1.8m (2023: US$1.3m)
representing an increase of US$0.5m mainly attributable to broker commission
for the issue of the third tranche of bonds noted above and increased salary
costs.
The Group made a loss before and after tax of US$3.99m (2023: loss of
US$1.53m).
Net cash outflows used in operating activities were US$2.6m (2023: cash
outflow of US$1.0m). Net cash used in investing activities during the period
was US$1.1m (2023: cash outflow of US$2.3m). Net cash inflow from financing
activities was US$4.5m (2023: cash outflow of US$1.1m) representing the
proceeds received from the sale of the third tranche of bonds.
Balance sheet review
At the period end, non-current assets totalled US$14.1m (2023: US$11.9m)
reflecting the continued capitalisation of expenses incurred by the Group on
the development of the Balasausqandiq feasibility study (as an exploration and
evaluation asset).
Current assets, excluding cash balances, totalled US$5.1m at the period end
compared to US$5.0m for the prior period.
The Group held an aggregate cash balance of US$2.5m at the period end (2023:
US$0.6m) and US$1.1m as at 20 September 2024. The board of directors is
currently considering the options available to the Group to increase cash
levels to ensure the completion of the feasibility study and the support of
the ongoing processing operations. An option available to the board would be
the issue and sale of a further trance of bonds under the Kazakhstan Bond
Programme.
The Group held non-current liabilities of US$12.4m at the period end (2023:
US$ nil) representing the value of the Company's bonds sold since the
inception of the Kazakhstan Bond Programme.
Current liabilities at the period end were US$3.9m (2023: US$3.0m) comprising
of trade payables and accrued bond interest.
Environmental, social and governance
Both the existing operation and the planned process plant for Balasausqandiq
will have a strongly positive environmental impact. The vanadium from
production will benefit energy storage in both vanadium redox flow batteries,
the front-running technology for fixed ground long-term energy storage, but
also potentially in certain technologies for mobile batteries used in electric
vehicles.
The CO(2) emissions created by our production at Balasausqandiq are expected
to be a fraction of most other producers which generally require concentration
and high-temperature roasting to liberate the vanadium. The carbon concentrate
which we plan to market as a replacement for carbon black is produced without
burning hydrocarbons, as is the usual production process.
Description of principal risks, uncertainties and how they are managed
(a) Current processing operations
Current processing operations make up a small part of the Company's expected
future value but are intended to provide useful cash flows in the near term
and allow the Group to gain valuable experience of the vanadium industry. The
principal risks of this operation are the prices of its products (vanadium,
molybdenum and nickel), availability of vanadium-bearing concentrates and the
efficiency of recovery of products from those concentrates.
The Group is constantly reviewing the market opportunities for supplies of
vanadium-bearing concentrates from reliable suppliers that can deliver
concentrates on a timely basis in order to ensure that the Group does not
incur production shortfalls leading to reduced revenues. The Group aims to
extract all the useful components of the raw materials so that ultimately no
residues remain on site and so that the maximum value is obtained from each
tonne treated. By these means, we aim to be one of the most efficient and
lowest cost secondary vanadium treatment plants so that our competitive
position reduces the danger of high prices for raw materials making the
operation uneconomic.
(b) Balasausqandiq project
The Balasausqandiq project will be a much larger contributor to the Company's
value than the current processing operations and is primarily dependent on
long-term vanadium prices.
The project is also dependent on raising finance to meet projected capital
costs (see below) and the successful construction and commissioning of the
project's proposed mine processing facilities. It is not unusual for new
mining projects to experience unforeseen problems, incur unexpected costs and
be exposed to delays during construction, commissioning, and initial
production, all of which could have a material adverse effect on the Company's
operations and financial position. The Company has taken steps to mitigate
such potential adverse effects by engaging globally recognised engineers and
consultants to assist with the development and design of the key elements of
the project in addition to the Group's own highly qualified workforce.
(c) Geopolitical situation
The ongoing invasion of Ukraine by Russia is not directly impacting the
Group's operations although current low vanadium pentoxide prices are, in
part, likely being driven by Russian producers selling at significant
discounts to China. The continued main risk of the conflict is to the Group's
import and export transport routes, many of which involve transit through
Russia. Whilst these are currently operating without issue, sanctions have
been made against Russian and Belarusian vehicles transiting through Europe
(but not against vehicles registered in other jurisdictions in the region such
as Kazakhstan). There is a risk that further sanctions might prevent transit
through Russia. The Company continues to review alternative transit routes for
raw material imports and product exports through the West of Kazakhstan,
either via the Caspian Sea or overland south of the Caspian Sea. Routes to
China are working normally.
With respect to the global sanctions imposed on certain Russian entities and
individuals, the Group monitors the implications of those sanctions on the
Group's trading activities on an ongoing basis.
(d) Financing risk
The Balasausqandiq project will require substantial funds to be raised in debt
and equity which will be dependent upon market conditions at the time and the
successful completion of the Phase 1 feasibility study.
In March of 2021 the Company signed an investment agreement with Vision Blue
Resources Limited ("Vision Blue"). Under the terms of this agreement and in
addition to Vision Blue's participation in the 2022 equity fundraise,
investments totalling US$14.3m have already been made and Vision Blue has the
right to subscribe a further US$2.5m at the original deal price of 9 pence per
share at any time up to two months after the announcement of the Phase 1
feasibility study. Vision Blue also has further options to subscribe up to
US$30m at higher prices to partially finance the construction of the project.
The favourable financial and other characteristics of the project determined
by studies so far completed give the Directors confidence that the outcome of
the Phase 1 feasibility study will be successful. Initial discussions with
potential providers of debt finance have been encouraging.
(e) Climate change risk
The Group has not identified any particular climate change related scenarios
that would likely have a significant impact on the Balasausqandiq project or
the existing operation. The existing operation already functions in an
environment that is subject to extreme weather conditions and is, therefore,
considered to have a strong resilience to existing and future climate-related
scenarios.
(f) Risks associated with the developing nature of the Kazakh economy
According to the World Bank, Kazakhstan has transitioned from
lower-middle-income to upper-middle-income status in less than two decades.
Kazakhstan's regulatory environment has similarly developed and the Company
believes that the period of rapid change and high risk is coming to an end.
Nevertheless, the economic and social regulatory environment continues to
develop and there remain some areas where regulatory risk is greater than in
developed economies.
(g) Commodity price risk:
As already noted above, the success of the Company is dependent upon the
long-term prices of the products to be produced by the planned mine processing
facilities. As a result of there being no formally established trading markets
for the Company's principal products from the project, there is a risk that
price fluctuations and volatility for these products may have an adverse
impact on the Company's future financial performance.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
a. the condensed set of unaudited financial statements which have been
prepared in accordance with IAS 34 'Interim Financial Reporting' give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Company and its undertakings included in the consolidation as a
whole, as required by DTR 4.2.4R;
b. the interim management report includes a fair review of the
information required by DTR 4.2.7R; and
c. the interim management report includes a fair review of the
information required by DTR 4.2.8R.
This interim financial report for the six months ended 30 June 2024 has been
approved by the Board and signed on its behalf by:
William Callewaert
Director
25 September 2024
Ferro-Alloy Resources Limited
Condensed unaudited Statement of Profit or Loss and Other Comprehensive Income
for the six months ended 30 June 2024
Note Unaudited Unaudited six-month period ended 30 June 2023 $000 Audited year
six-month
ended
period ended
31 December 2023
30 June 2024 $000
$000
Revenue from customers (pricing at shipment) 2 2,170 3,410 6,164
Other revenue (adjustments to price after delivery and fair value 2 (21) (96) (448)
changes)
Total revenue 2 2,149 3,314 5,716
Cost of sales 3 (3,622) (3,565) (6,769)
Gross (loss) / income (1,473) (251) (1,053)
Other income 4 7 13 20
Administrative expenses 5 (1,850) (1,337) (3,371)
Distribution expenses (58) (66) (193)
Other expenses 6 (24) (47) (471)
Loss from operating activities (3,398) (1,688) (5,068)
Net finance (cost) / income 8 (593) 158 (183)
Loss before income tax (3,991) (1,530) (5,251)
- - -
Income tax
Loss for the period (3,991) (1,530) (5,251)
Other comprehensive (loss) / income
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations (761) 496 39
Total comprehensive loss for the period (4,752) (1,034) (5,212)
Loss per share (basic and diluted) 16 (0.008) (0.003) (0.012)
These condensed unaudited financial statements were approved by the directors
on 25 September 2024 and signed by:
_____________________________
William Callewaert
Director
Ferro-Alloy Resources Limited
Condensed unaudited Statement of Financial Position
for the six months ended 30 June 2024
Note Unaudited Unaudited Audited 31 December 2023
30 June 2024
30 June 2023 $000
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 9 5,404 6,072 5,951
Exploration and evaluation assets 10 7,836 5,581 7,145
Intangible assets 11 20 20 20
Prepayments 14 853 185 888
Total non-current assets 14,113 11,858 14,004
Current assets
Inventories 12 1,800 2,015 1,983
Trade and other receivables 13 2,152 1,892 1,316
Prepayments 14 1,166 1,115 762
Cash and cash equivalents 15 2,528 606 1,952
Total current assets 7,646 5,628 6,013
Total assets 21,759 17,486 20,017
EQUITY AND LIABILITIES
Equity
Share capital 55,027 50,827 55,027
Convertible loan notes 16 - 4,019 -
Additional paid-in capital 397 397 397
Share-based payment reserve 20 5 20
Foreign currency translation reserve (4,883) (3,665) (4,122)
Accumulated losses (45,097) (37,204) (41,106)
Total equity 5,464 14,379 10,216
Non-current liabilities
Loans and borrowings 17 12,396 - 7,393
Provisions 30 33 31
Total non-current liabilities 12,426 33 7,424
Current liabilities
Trade and other payables 18 3,636 3,074 2,141
Deferred income 19 - - 102
Interest payable 17 233 - 134
Total current liabilities 3,869 3,074 2,377
Total liabilities 16,295 3,107 9,801
Total equity and liabilities 21,759 17,486 20,017
Ferro-Alloy Resources Limited
Condensed unaudited Statement of Changes in Equity
for the six months ended 30 June 2024
Share Convertible Additional paid in capital Share-based Foreign currency translation reserve Accumulated Total
capital
loan notes
$000
payment
$000
losses
$000
$000
$000
reserve
$000
$000
Balance at 1 January 2023 50,827 4,019 397 5 (4,161) (35,674) 15,413
Loss for the year - - - - - (1,530) (1,530)
Other comprehensive income
Exchange differences arising on translation of foreign operations - - - - 496 - 496
Total comprehensive loss for the year - - - - 496 (1,530) (1,034)
Transactions with owners, recorded directly in equity
Shares issued, net of issue costs - - - - - - -
Other transactions recognised directly in equity - - - - - - -
Balance at 30 June 2023 50,827 4,019 397 5 (3,665) (37,204) 14,379
Balance at 31 December 2023 55,027 - 397 20 (4,122) (41,106) 10,216
Balance at 1 January 2024 55,027 - 397 20 (4,122) (41,106) 10,216
Loss for the period - - - - - (3,991) (3,991)
Other comprehensive loss
Exchange differences arising on translation of foreign operations - - - - (761) - (761)
Total comprehensive loss for the period - - - - (761) (3,991) (4,752)
Transactions with owners, recorded directly in equity
Shares issued, net of issue costs - - - - - - -
Other transactions recognised directly in equity - - - - - - -
Balance at 30 June 2024 55,027 - 397 20 (4,883) (45,097) 5,464
Ferro-Alloy Resources Limited
Condensed unaudited Statement of Cash Flows
for the six months ended 30 June 2024
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Cash flows from operating activities Note
Loss for the period (3,991) (1,530) (5,251)
Adjustments for:
Depreciation and amortisation 3, 5 391 210 476
Write-off of property, plant and equipment 3 - 1
Write-down of inventory to net realisable value - - 254
Write-off of non-refundable VAT 30
Share-based payment expense - - 15
Net finance cost / (income) 8 593 (158) 183
Cash used in operating activities before changes in working capital (3,004) (1,478) (4,292)
Change in inventories 183 (387) (609)
Change in trade and other receivables (836) (741) (195)
Change in prepayments (369) 884 534
Change in trade and other payables 1,495 683 (622)
Change in deferred income 19 (102) - 102
Net cash used in operating activities (2,633) (1,039) (5,082)
Cash flows from investing activities
Acquisition of property, plant and equipment 9 (135) (773) (978)
Acquisition of exploration and evaluation assets 10 (1,002) (1,481) (2,931)
Acquisition of intangible assets 11 (1) (1) (1)
Proceeds on fixed asset disposal -
Net cash used in investing activities (1,138) (2,255) (3,910)
Cash flows from financing activities
Proceeds / (repayment) from borrowings 17 5,003 (1,112) 6,672
Interest paid 17 (523) (32) (157)
Net cash used in financing activities 4,480 (1,144) 6,515
Net increase / (decrease) in cash and cash equivalents 709 (4,438) (2,477)
Cash and cash equivalents at the beginning of year 15 1,952 4,331 4,331
Effect of movements in exchange rates on cash and cash equivalents (133) 713 98
Cash and cash equivalents at the end of the period 2,528 606 1,952
Notes to the Condensed unaudited Financial Statements for the six months ended 30 June 2024
1 (a) Basis of preparation
These Condensed unaudited Financial Statements have been prepared in
accordance with IAS34 'Interim Financial Reporting' and International
Financial Reporting Standards as adopted by the European Union ("IFRS") on a
going concern basis.
The same accounting policies and basis of preparation have been followed as
adopted in the annual financial statements of the Group which were published
on 29 April 2024.
(b) Going concern
The Directors have reviewed the Group's cash flow forecasts for a period of at
least 12 months from the date of approval of the financial statements,
together with sensitivities and mitigating actions. In addition, the Directors
have given specific consideration to the continued risks and uncertainties
associated with the geopolitical situation with respect to Russia and Ukraine.
The Group now has the facilities and capacity in place to operate profitably
and although the amount of those profits available to fund the Group's ongoing
overhead costs may vary with metal prices and other factors, the Directors are
confident that the Company has sufficient resources to continue as a going
concern for at least the next 12 months.
(c) Use of estimates and judgements
Preparing the financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Carrying value of processing operations
The Directors have tested the existing operation's property, plant and
equipment ("PP&E") for impairment (Note 9) at 30 June 2024. In doing so,
net present value cash flow forecasts were prepared using the value in use
method which required key estimates including vanadium pentoxide and
ferro-molybdenum prices, production including the impact of ongoing PP&E
maintenance costs and an appropriate discount rate. Key estimates included:
· Production volumes of 72 tonnes per month of vanadium pentoxide (or
equivalent as AMV) and 12 tonnes of molybdenum (as ferro-molybdenum) from 2025
thereafter.
· Average prices of vanadium pentoxide of US$5.50/lb and
ferro-molybdenum of US$51/kg in 2024 and thereafter, reflecting management
estimates having consideration of market commentary less a discount, and used
by the Company as a long-term assumption for other planning purposes.
· Discount rate of 14.7% post tax in real terms.
Based on the key assumptions set out above, the recoverable amount of PP&E
(US$8.9m) exceeds its carrying amount (US$5.4m) by US$3.5m and, therefore,
PP&E has not been impaired.
Inventories (Note 12)
The Group holds material inventories which are assessed for impairment at each
reporting date. The assessment of net realisable value requires consideration
of future cost to process and sell and spot market prices at the period end
less applicable discounts. The estimates are based on market data and
historical trends.
Exploration and evaluation assets (Note 10)
The Group holds material exploration and evaluation assets and judgement is
applied in determining whether impairment indicators exist under the Group's
accounting policy. In determining that no impairment indicator exists
management have considered the Competent Person's Report on the asset, the
strategic plans for exploration and future development and the status of the
Subsoil Use Agreement ("SUA"). Judgement was required in determining that a
current application for deferral of obligations under the SUA will be granted
and management anticipate such approvals being provided given their
understanding of the Kazakh market and plans for the asset.
(d) Unaudited status
These Condensed unaudited Financial Statements have not been audited or
reviewed by the Group's auditor.
2 Revenue
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Sales of vanadium products 1,264 2,340 3,308
Sales of ferro-molybdenum 720 955 2,698
Sales of nickel products - 109 143
Tolling revenue 179 - -
Service revenue 7 6 15
Total revenue from customers under IFRS 15 2,170 3,410 6,164
Other revenue (adjustments to price after delivery and fair value changes) (21) (96) (448)
Total revenue 2,149 3,314 5,716
Vanadium products
Under certain sales contracts the single performance obligation is the
delivery of AMV to the designated delivery point at which point possession,
title and risk on the product transfers to the buyer. The buyer makes an
initial provisional payment based on volumes and quantities assessed by the
Company and market spot prices of vanadium pentoxide for AMV at the date of
shipment. The final payment is received once the product has reached its final
destination with adjustments for quality / quantity and pricing. The final
pricing is based on the historical average market prices during a quotation
period based on the date the product reaches the port of destination and an
adjusting payment or receipt will be made to the revenue initially received.
Where the final payment for a shipment made prior to the end of an accounting
period has not been determined before the end of that period, the revenue is
recognised based on the spot price that prevails at the end of the accounting
period.
Other revenue related to the change in the fair value of amounts receivable
and payable under the sales contracts between the date of initial recognition
and the period end resulting from market prices are recorded as other revenue.
3 Cost of sales
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Materials 2,438 2,651 4,832
Wages, salaries and related taxes 659 538 1,128
Depreciation 355 190 425
Electricity 60 42 94
Other 110 144 290
3,622 3,565 6,769
4 Other income
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Currency conversion gain 3 8 8
Other (sales of equipment) 4 5 12
7 13 20
5 Administrative expenses
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Wages, salaries and related taxes 955 867 2,023
Professional services 120 61 315
Taxes other than income tax - - 18
Listing and financing expenses 356 97 155
Audit 107 126 125
Materials 22 24 48
Rent 37 17 40
Depreciation and amortisation 36 20 51
Insurance 43 2 44
Bank fees 5 12 23
Travel expenses 23 13 89
Communication and information services 9 8 30
Other 137 90 410
1,850 1,337 3,371
6 Other expenses
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Currency conversion loss 20 27 59
Write-down of inventory to net realisable value - - 254
Write-down of obsolete assets - - 1
Share-based payment expense - - 15
Other 4 20 142
24 47 471
7 Personnel costs
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Wages, salaries and related taxes 1,702 1,610 3,232
1,702 1,610 3,232
Personnel costs of US$537,000 (2023: US$495,000) have been charged to cost of sales, US$955,000 (2023: US$867,000) to administrative expenses and US$210,000 (2023: US$248,000) were charged to cost of inventories which were not yet sold as at the end of the period.
8 Finance costs
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Net foreign exchange gain (28) (175) (83)
Interest expense on financial liabilities (bonds) 621 17 266
Net finance cost / (income) 593 (158) 183
9 Property, plant and equipment
Land and buildings Plant and equipment Vehicles Computers Other Construction in progress Total
$000 $000 $000 $000 $000 $000 $000
Cost
Balance at 1 January 2023 1,959 2,723 458 43 174 3,448 8,805
Additions - 254 - 1 8 510 773
Transfers 255 46 - - - (301) -
Disposals - (4) - - (5) - (9)
Foreign currency translation difference 35 51 10 - 3 64 163
Balance at 30 June 2023 2,249 3,070 468 44 180 3,721 9,732
Balance at 31 December 2023 5,015 3,822 522 49 256 242 9,906
Additions - 81 - 2 - 52 135
Transfers - 194 - - - (194) -
Disposals - (3) - - (1) - (4)
Foreign currency translation difference (179) (150) (19) (1) (9) (2) (360)
Balance at 30 June 2024 4,836 3,944 503 50 246 98 9,677
Depreciation
Balance at 1 January 2023 708 2,256 322 28 57 - 3,371
Depreciation for the period 45 165 16 2 7 - 235
Disposals - (4) - - (5) - (9)
Foreign currency translation difference 12 41 7 1 2 - 63
Balance at 30 June 2023 765 2,458 345 31 61 - 3,660
Balance at 31 December 2023 851 2,621 361 33 89 - 3,955
Balance at 1 January 2024 851 2,621 361 33 89 - 3,955
Depreciation for the period 226 227 17 3 10 - 483
Disposals - (1) - - - - (1)
Foreign currency translation difference (41) (104) (14) (1) (4) - (164)
Balance at 30 June 2024 1,036 2,743 364 35 95 - 4,273
Carrying amounts
At 1 January 2023 1,251 467 136 15 117 3,448 5,434
At 30 June 2023 1,484 612 123 13 119 3,721 6,072
At 31 December 2023 4,164 1,201 161 16 167 242 5,951
At 30 June 2024 3,800 1,201 139 15 151 98 5,404
Depreciation expense of US$355,000 (2023: US$190,000) has been charged to cost
of sales, excluding cost of finished goods that were not sold at year-end,
US$36,000 (2023: US$20,000) to administrative expenses, and US$96,000 has been
charged to the cost of finished goods that were not sold at the end of the
period (2023: US$67,000).
Construction in progress relates to upgrades to the processing plant
associated with the expansion of the facility.
10 Exploration and evaluation assets
The Group's exploration and evaluation assets relate to the Balasausqandiq
deposit. During the six month period ended 30 June 2024, the Group capitalised
the costs of technical design, sample test-work and project management costs,
all relating to the Company's Stage 1 feasibility study. As at 30 June 2024,
the carrying value of exploration and evaluation assets was US$7.8m (2023:
US$5.6m).
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
Balance at 1 January 7,145 4,208 4,208
Additions (Stage 1 feasibility study) 1,002 1,481 2,931
Foreign currency translation difference (311) (108) 6
Balance at 30 June / 31 December 7,836 5,581 7,145
11 Intangible assets
Mineral rights Patents Computer software Total
$000 $000 $000 $000
Cost
Balance at 1 January 2023 83 32 3 118
Additions - 1 - 1
Foreign currency translation difference 1 1 - 2
Balance at 30 June 2023 84 34 3 121
Balance at 31 December 2023 84 34 3 121
Balance at 1 January 2024 84 34 3 121
Additions - 1 - 1
Foreign currency translation difference (3) (1) - (4)
Balance at 30 June 2024 81 34 3 118
Amortisation
Balance at 1 January 2023 83 13 3 99
Amortisation for the year - 1 - 1
Foreign currency translation difference 1 - - 1
Balance at 30 June 2023 84 14 3 101
Balance at 31 December 2023 84 14 3 101
Balance at 1 January 2024 84 14 3 101
Amortisation for the year - 1 - 1
Foreign currency translation difference (3) (1) - (4)
Balance at 30 June 2024 81 14 3 98
Carrying amounts
At 1 January 2023 - 19 - 19
At 30 June 2023 - 20 - 20
At 31 December 2023 - 20 - 20
At 30 June 2024 - 20 - 20
During the six months ended 30 June 2024 and 2023, amortisation of intangible
assets was charged to administrative expenses.
12 Inventories
Unaudited Audited 31 December 2023
30 June 2024
$000
$000
Unaudited 30 June 2023 $000
Raw materials and consumables 815 1,422 1,456
Finished goods 975 584 517
Work in progress 10 9 10
1,800 2,015 1,983
During the six months ended 30 June 2024, inventories expensed to profit and
loss amounted to US$2.4m (six months period ended 30 June 2023:US$2.7m).
13 Trade and other receivables
Current Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
$000
$000 $000
Trade receivables from third parties 1,215 920 264
Due from employees 20 55 66
VAT receivable 918 920 1,049
Other receivables 63 64 4
2,216 1,959 1,383
Expected credit loss provision for receivables (64) (67) (67)
2,152 1,892 1,316
The expected credit loss provision for receivable relates to credit impaired
receivables which are in default and the Group considers the probability of
collection to be remote given the age of the receivable and default status.
14 Prepayments
Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
$000
$000
$000
Non-current
Prepayments 853 185 888
853 185 888
Current
Prepayments for goods and services 1,166 1,115 762
1,166 1,115 762
15 Cash and cash equivalents
Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
$000
$000
$000
Cash at current bank accounts 551 592 1,488
Cash at bank deposits 1,976 13 417
Petty cash 1 1 47
Cash and cash equivalents 2,528 606 1,952
16 Equity
(a) Share capital
Number of shares unless otherwise
stated
Ordinary shares
Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
Par value - - -
Outstanding at beginning of year 483,222,238 449,702,150 449,702,150
Shares issued - - 33,520,088
Outstanding at end of period 483,222,238 449,702,150 483,222,238
Ordinary shares
All shares rank equally. The holders of ordinary shares are entitled to
receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company.
The Company did not issue any ordinary shares during the period. During 2023,
the convertible loan notes held by Vision Blue were converted into equity
under the terms of the Convertible Loan Note agreement in place between the
Company and Vision Blue. Further information can be found in the Company's
2023 Annual Report.
Reserves
Share capital: Value of shares issued less costs of issuance.
Convertible loan notes: Further investment rights at issue price.
Additional paid in capital: Amounts due to shareholders which were waived.
Share-based payment: Share options issued during the period.
Foreign currency translation reserve: Foreign currency differences on
retranslation of results from functional to presentational currency and
foreign exchange movements on intercompany balances considered to represent
net investments which are considered as permanent equity.
Accumulated losses: Cumulative net losses.
(b) Dividends
No dividends were declared for the six months ended 30 June 2024 (2023: US$
nil).
(c) Loss per share (basic and diluted)
The calculation of basic and diluted loss per share has been based on the loss
attributable to ordinary shareholders and the weighted-average number of
ordinary shares outstanding. There are no convertible bonds and convertible
preferred stock, so basic and diluted losses are equal.
(i) Loss attributable to ordinary shareholders (basic and
diluted)
Unaudited Unaudited Audited year ended
six-month
six-month
31 December 2023
period ended
period ended
$000
30 June 2024
30 June 2023
$000
$000
Loss for the period, attributable to owners of the Company (3,991) (1,530) (5,251)
Loss attributable to ordinary shareholders (3,991) (1,530) (5,251)
(ii) Weighted-average number of ordinary shares (basic and
diluted)
Shares Unaudited Unaudited Audited year ended
six-month
six-month
31 December 2023
period ended
period ended
30 June 2024
30 June 2023
Issued ordinary shares at 1 January (after subdivision) 483,222,238 449,702,150 449,702,150
Effect of shares issued (weighted) - - 3,857,106
Weighted-average number of ordinary shares at period / year end 483,222,238 449,702,150 453,559,256
Loss per share of common stock attributable to the Company: (0.0083) (0.0034) (0.012)
(Basic and diluted / US$)
17 Loans and borrowings
In 2023 the Company launched a US$20m bond programme in Kazakhstan ("the
Programme") and issued two tranches of unsecured corporate bonds under the
Programme with effective interest rates of 9.2% and 10.4%, respectively. In
2024, the Company issued a third tranche of bonds under the Programme with an
effective interest rate of 11.5%.
With respect to the first tranche of bonds (2023), investors have subscribed
for a total of 1,500 bonds with a nominal value of US$2,000 each. These bonds
are unsecured, have a three-year term and bear a coupon rate of 9%, paid
twice-yearly. The bonds have been listed on AIX with ISIN number KZX000001474.
With respect to the second tranche of bonds (2023), investors have subscribed
for a total of 50,000 bonds with a nominal value of US$100 each. These bonds
are unsecured, have a three-year term and bear a coupon rate of 10%, paid
quarterly. The bonds have been listed on AIX with ISIN number KZX000001623.
With respect to the third tranche of bonds (2024), investors have subscribed
for a total of 50,000 bonds with a nominal value of US$100 each. These bonds
are unsecured, have a three-year term and bear a coupon rate of 11%, paid
quarterly. The bonds have been listed on AIX with ISIN number KZX000001946.
Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
$000
$000
$000
Non-current liabilities
Bonds payable 12,396 - 7,393
12,396 - 7,393
Current liabilities
Interest payable 233 - 134
233 - 134
Non-cash transactions from financing activities are shown in the
reconciliation of liabilities from financing transactions below:
Unaudited Unaudited
six-month
six-month
period ended
period ended Audited year ended 31 December 2023
30 June 2024
30 June 2023
$000
$000
$000
At 1 January 7,527 1,127 1,127
Cash flows:
-Interest paid (523) (32) (157)
-Repayment of loans and borrowings - (1,112) (1,112)
-Proceeds from loans and borrowings 5,003 - 7,784
Total 12,007 (17) 7,642
Non-cash flows
- Interest accruing in the period 622 17 273
- Bond discount / premium - - (388)
At 30 June / 31 December 12,629 - 7,527
18 Trade and other payables
Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
$000
$000
$000
Trade payables 2,565 2,550 1,781
Debt to directors/key management (Note 22) - 11 79
Debt to employees 242 154 192
Other taxes 52 225 72
Advances received 777 134 17
3,636 3,074 2,141
19 Deferred income
Unaudited Unaudited Audited 31 December 2023
30 June 2024 30 June 2023
$000
$000
$000
Government grants - - 102
- - 102
During 2023, the Group was awarded grant funding by the Kazakhstan Science
Fund for the development of technology for the production of mixed vanadium
oxides for use in vanadium redox flow batteries.
20 Contingencies
(a) Insurance
The insurance industry in the Kazakhstan is in a developing state and many
forms of insurance protection common in other parts of the world are not yet
generally or economically available. The Group does not have full coverage for
its plant facilities, business interruption or third party liability in
respect of property or environmental damage arising from accidents on Group
property or relating to Group operations. There is a risk that the loss or
destruction of certain assets could have a material adverse effect on the
Group's operations and financial position.
(b) Taxation contingencies
The taxation system in Kazakhstan is relatively new and is characterised by
frequent changes in legislation, official pronouncements and court decisions
which are often unclear, contradictory and subject to varying interpretations
by different tax authorities. Taxes are subject to review and investigation by
various levels of authorities which have the authority to impose severe fines,
penalties and interest charges. A tax year generally remains open for review
by the tax authorities for five subsequent calendar years but under certain
circumstances a tax year may remain open for longer.
These circumstances may create tax risks in Kazakhstan that are more
significant than in other countries. Management believes that it has provided
adequately for tax liabilities based on its interpretations of applicable tax
legislation, official pronouncements and court decisions. However, the
interpretations of the relevant authorities could differ and the effect on
these consolidated financial statements, if the authorities were successful in
enforcing their interpretations, could be significant.
There are no tax claims or disputes at present.
21 Segment reporting
The Group's operations are split into three segments based on the nature of
operations: processing, subsoil operations (being operations related to
exploration and mining) and corporate segment for the purposes of IFRS 8
Operating Segments. The Group's assets are primarily concentrated in the
Republic of Kazakhstan and the Group's revenues are derived from operations
in, and connected with, the Republic of Kazakhstan.
Unaudited six-month period ended 30 June 2024
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 2,149 - - 2,149
Cost of sales (3,622) - - (3,622)
Other income 6 - 1 7
Administrative expenses (475) (42) (1,333) (1,850)
Distribution & other expenses (82) - - (82)
Finance costs 217 - (810) (593)
Loss before tax (1,807) (42) (2,142) (3,991)
Unaudited six-month period ended 30 June 2023
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 3,314 - - 3,314
Cost of sales (3,565) - - (3,565)
Other income 8 - 5 13
Administrative expenses (402) (24) (911) (1,337)
Distribution & other expenses (113) - - (113)
Finance costs (40) - 198 158
Loss before tax (798) (24) (708) (1,530)
Audited year ended 31 December 2023
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 5,716 - - 5,716
Cost of sales (6,769) - - (6,769)
Other income 15 - 5 20
Administrative expenses (1,130) (41) (2,200) (3,371)
Distribution & other expenses (649) - (15) (664)
Finance costs (139) - (44) (183)
Loss before tax (2,956) (41) (2,254) (5,251)
Included in revenue arising from processing are revenues of US$2.2m (2023:
US$3.1m) which arose from sales to four of the Group' largest customers. No
other single customer contributes 10 per cent or more to the Group's revenue.
All of the Group's assets are attributable to the Group's processing
operations.
Sales to the Group's largest customers during the six months ended 30 June
2024 were as follows:
Customer
A
US$ 1.0m (45%) (2023:US$ 1.5m)
Customer
B
US$ 0.4m (17%) (2023: US$1.5m)
Customer
C
US$ 0.4m (20%) (2023: US$ 0.1m)
Customer
D
US$ 0.4m (18%) (2023: nil)
22 Related party transactions
Transactions with management and close family members
Management remuneration
Key management personnel received the following remuneration during the year,
which is included in personnel costs (see Note 5):
Unaudited Unaudited Audited year ended 31 December 2023 $000
six-month
six-month
period ended
period ended
30 June 2024
30 June 2023
$000
$000
Wages, salaries and related taxes 538 474 1,114
The amount of wages and salaries outstanding at 30 June 2024 is equal to US$
nil (2023: US$11,000).
Other
The Company is party to a sub-let agreement between Turian Sports Horses
Limited as head lessee and NH Limited as landlord for the rental of office
space in Guernsey. Turian Sports Horses Limited is wholly owned by James
Turian, one of the Company's directors and NH Limited is owned by James Turian
and Sharon Turian, equally. Sums paid to NH Limited during the six months
ended 30 June 2024 were US$7,214 (2023: US$10,667).
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