REG - Ferro-Alloy Rsrcs - Interim Results
15/09/2022 07:00
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RNS Number : 5196Z Ferro-Alloy Resources Limited 15 September 2022
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018.
15 September 2022
Ferro-Alloy Resources Limited
("Ferro-Alloy" or the "Company" or the "Group")
Interim Results for the six months ended 30 June 2022
Ferro-Alloy Resources Limited (LSE:FAR), the vanadium mining and processing
company with operations based in Southern Kazakhstan, is pleased to announce
its interim results for the six months ended 30 June 2022.
Overview
Operating highlights
· Feasibility study ongoing on both Phase 1 and Phase 2 of the
Balasausqandiq project
· Drilling of four ore-bodies (OB 1 - 4) nearing completion, early
indication of a possible 40% resource increase from early X-ray fluorescence
results of 800m strike comparison in OB1
· Metallurgical test work confirms 93% recovery into leach
· Expansion and adaptation of Existing Operation near completion
· Half year production of vanadium pentoxide 95% higher than H1 2021
· Production of ferro-molybdenum scheduled to increase with
commissioning of new resin circuit in H2
· High grade nickel concentrate production to start in H2, with
associated additional recovery of vanadium
· Conversion of AMV to vanadium pentoxide to start in final quarter of
2022
· Vanadium pentoxide prices remaining high compared with historic
average levels
· Annualised production rate is expected to reach the targeted 1,500
tonnes of vanadium pentoxide equivalent towards end of 2022
· Carbon by-product proven suitable for use in tyre manufacture,
significantly increasing its potential value
Financial performance
· H1 revenue of US$3.9m, while materially ahead of last year, has been
impacted by the supply chain issues caused by the war in Ukraine and the after
effects of Covid-19
· Uncertainty remains as to the impact these issues will have on the
outcome for H2 but the Company expects H2 revenues to be significantly greater
than H1
Proposed fundraise
· In order to ensure that the ongoing feasibility study on both Phase 1
and Phase 2 of the Balasausqandiq project can be completed as quickly as
possible, with the maximum scope and quality, regardless of the potential
impact of supply chain issues the Company has been experiencing as a result of
the geopolitical climate and the residual impact of Covid-19, the Company will
launch an equity fundraise immediately following this announcement
· The Company, with the full support of its strategic investor, Vision
Blue Resources Limited, is proposing to raise a total of approximately US$10
million before expenses by way of a placing, direct subscription and
PrimaryBid offer
· Full details of the proposed fundraise will be set out in an
announcement to be published by the Company immediately following the
publication of this announcement
Sir Mick Davis, Non-executive Chairman, commented:
"The early results of the expanded feasibility study are confirming the
potential for Balasausqandiq to become a globally significant vanadium
operation. Installations around the world of vanadium flow batteries are
increasing, which is perhaps the basis for vanadium prices remaining strong
compared with historic levels. This, and the highly attractive suite of
by-products, in particular carbon black where there is potential for a
significant value increase, amply justify Vision Blue's confidence in the
long-term future of Balasausqandiq project.
"Both the existing operation and the planned process plant for Balasausqandiq
will have a strongly positive ESG impact, something critical for attracting
customers and investors going forward. With vanadium benefitting energy
storage in both vanadium redox flow batteries as well as certain technologies
for mobile batteries used in electric vehicles, we are in pole position to
contribute significantly to a clean energy future.
"I expect to see significant progress and results in the coming months,
particularly when the geopolitical headwinds begin to ease, and I look forward
to updating shareholders on our developments."
For further information, visit www.ferro-alloy.com or contact:
Ferro-Alloy Resources Limited
Nick Bridgen, Chief Executive Officer
William Callewaert, Chief Financial
Officer
info@ferro-alloy.com
Shore Capital (Joint Corporate Broker)
Toby Gibbs / John
More
Tel: +44 (0)207
408 4090
Liberum Capital (Joint Corporate Broker)
Tel: +44 (0)203
100 2000
Scott Mathieson / William King
St Brides Partners Limited (Financial PR & IR Adviser)
Catherine Leftley / Ana
Ribeiro
Tel: +44 (0)207 236 1177
Operations Review
Summary
Ferro-Alloy Resources Limited ("the Company") is currently undertaking a
comprehensive bankable feasibility study on both Phase 1 and Phase 2 of the
Balasausqandiq project in the Kyzylordinskaya oblast of southern Kazakhstan.
Current indications are that this project will be one of the largest vanadium
operations in the world with negative vanadium production costs after
by-product credits. The Competent Person's Report ("CPR") issued in 2018
showed a net present value for the project of US$2 billion after capital
expenditure on Phase 1 of just US$100m, with the Phase 2 expansion being
financed from earnings. So far in the study, the conclusions of that report
have been supported, with the metallurgical recovery into leach independently
tested to achieve up to 95% (CPR - 93%), and an early comparison of an 800
metre strike length of the first ore body showing up to 40% more ore in that
section. A study into the uses of the carbon by-product to be produced by
the project shows it to be even more prospective than envisaged in the CPR,
with a 40% carbon concentrate able to replace a proportion of carbon black
grade N550 in the making of tyres with no diminution of performance.
Although commercial negotiations have not yet taken place, the value of this
material, based on the value of carbon black that it replaces, is likely to be
significantly higher than previously estimated.
In the existing operation, we have achieved record production and successfully
accomplished several further important steps in the development of the
operation, targeting 1,500 tonnes per year of vanadium pentoxide or
equivalent, in revenue terms, in molybdenum and nickel.
Both the existing operation and the planned process plant for Balasausqandiq
will have a strongly positive ESG 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. Furthermore, in both operations we are aiming to leave little or no
residues from processing operations, since all the components of the ore are
potentially useful. The CO2 emissions caused 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.
Balasausqandiq feasibility study
One ore-body ("OB1") has already been explored and provided a reserve of 23
million tonnes, sufficient for a mine-life of over 20 years at the Phase 1
level of production of 1 million tonnes of ore per year. Increasing the
drilling density of OB1 plus drilling of a further three ore bodies (OB 2 - 4)
is now nearing completion although sample preparation and assaying are
expected to take up to another three months. The aim of this further drilling
is to prove sufficient ore reserve to give a significant mine-life for the
Phase 2 production target of four million tonnes per year. There is an area
of topography within OB1 that is difficult to access for exploration purposes
which is currently being omitted from the programme, but a decision on whether
this will have to be drilled or replaced in the programme will be taken when
preliminary modelling is completed. The access difficulties are not expected
to create any difficulties for actual mining in due course.
No new assay results have yet been received but a comparison of an 800 metre
strike length of OB1 as previously modelled, with the results of the increased
density of drilling, using semi-quantitative X-ray fluorescence measurements,
shows a 40% increase in tonnes of ore, albeit at a slightly lower grade.
Metallurgical test-work has shown a recovery of vanadium pentoxide into leach
of up to 95%, slightly in excess of the pilot plant results used in the CPR.
Test-work is ongoing to confirm the final product recovery.
A study has also been carried out on the enrichment of carbon in the plant
tails after the vanadium recovery process and the potential use of this
material as a substitute for carbon black in the production of rubber,
principally tyres. The study has shown that the carbon content can easily be
upgraded from the approximately 18% tails grade to around 40% by standard
flotation means, giving a 75% recovery of carbon, and that the 40% concentrate
can be substituted in the making of tyres for around 20% of N550 grade carbon
black without loss of performance. Carbon black is an expensive form of carbon
that is usually made by the incomplete combustion of hydrocarbons, with only
some 40% of the carbon feed being recovered in the product, so use of our
material will greatly reduce the CO(2) emissions caused in the making of tyres
compared with the standard material. Production of sufficient concentrate
for testing by a tyre manufacturer prior to commercial discussions is ongoing.
We expect to be able to announce the results of the exploration and
metallurgical programmes early in 2023 and the full feasibility study into
Phase 1 of the Balasausqandiq project in the middle of 2023, with Phase 2
following afterwards.
Expenditure on the feasibility study in the first half of 2022 was US$1.7m.
The Existing Operation
Summary
The existing plant was developed from the former pilot plant, designed to
develop and test the process which will be used for the Balasausqandiq process
plant. After successful completion of the test programme, the decision was
made to expand and develop the plant on a long-term commercial basis partly in
order to keep the trained work-force and management occupied and ready for the
main Balasausqandiq project and partly for the earnings that will greatly
assist the financing of the project.
The expansion and adaptation is now nearly complete to produce a plant capable
of extracting vanadium, molybdenum and nickel from secondary imported raw
materials, mainly spent catalysts used in the de-metalisation of crude oil.
The last stage of the planned development, to produce a high-grade nickel
concentrate from the tailings, is now complete but commissioning is awaiting
the delayed delivery of a new press filter from Italian suppliers, now
expected in October. A significant part of this project is also to extract
more vanadium from the tailings in a secondary recovery during repulpation of
the nickel-rich tailings. Upon completion of this last step, the plant will
be extremely competitive in that all of the valuable components of the feed
will be recovered and the operation will be environmentally benign with little
or no residues remaining on site for disposal - all the content will be
recovered as products. The plant is now extremely flexible and allows
management to select a wide range of raw materials for processing with varying
metal contents depending on the market price for such materials. The
targeted production level is around 1,500 tonnes per year of vanadium
equivalent (in terms of revenue). Throughput and therefore profitability of
the plant in the first half of 2022 was impacted by the January riots in
Kazakhstan, delays in shipments of concentrates caused by COVID-19 in late
2021, the Ukrainian invasion in 2022 and world-wide shipping delays. Certain
reagents also became scarce during this period as China prohibited the export
of ammonium sulphate, in particular. The Ukrainian invasion caused not only
shipping disruption but also banking delays which held up some vital payments
to suppliers for up to a month at a time. Shipping costs remain elevated,
affecting both imports and exports. Production of vanadium pentoxide
equivalent (based on revenue) reached a peak of 56.5 tonnes in April 2022, but
the early months in the period and June and July were particularly affected by
delays to concentrate deliveries.
The result of these external problems has been a disappointing start to 2022,
however, production was at record levels and the net loss for the half year
was reduced to US$694,000 after meeting parent company costs and the
management of the ongoing feasibility study. The net loss is also after
allowing for the falling vanadium price over the period, which resulted in a
downwards revenue adjustment of US$417,000, being the difference between the
price at the time the sale was agreed and the price during the contractual
pricing period which is linked to delivery.
Production
Production during the first half year was mixed, with very good production
when the plant was not constrained by raw-material or reagent supply issues.
The capacity of the plant was very much greater than the actual output.
Quarter Tonnes of vanadium pentoxide contained in AMV Tonnes of vanadium pentoxide contained in AMV Growth from same quarter / half of 2021 Tonnes of molybdenum contained in ferro-molybdenum
2022 2021 (2022 only)
Q1 80.5 57.4 +40% 11.2
Q2 91.7 30.8 +198% 11.1
H1 2022 172.2 88.2 +95% 22.3
Outlook
The existing processing plant is operating well. Two new step-changes in
production are both expected in the next couple of months. When the delayed
press filter arrives, the new nickel concentrate production can begin, and
when the delivery of sorption resin arrives from France, there will be a
significant increase in ferro-molybdenum production. Currently, the
nickel-rich tailings and molybdenum-containing solutions are being stockpiled
pending the start of these operations, allowing for a particularly sharp
increase as the stockpiles are reduced over the ensuing year. Towards the
end of 2022 the annualised production rate is expected to reach the targeted
1,500 tonnes of vanadium pentoxide equivalent, at current prices this would
translate into revenue potential of c. US$2m per month during 2023. Later in
the year a further new dissociation oven will arrive, allowing the conversion
of ammonium metavanadate to vanadium pentoxide. A previous oven acquired for
this purpose was diverted to the drying of calcium molybdate to allow
conversion to ferro-molybdenum, contributing more profit than its originally
intended use.
Although the transport and banking issues associated with the Ukrainian
invasion are largely stabilising, with little effect now on delivery schedules
except as to pricing, we expect some continuing disruption. Uncertainty
remains as to the impact these issues will have on the outcome for H2 but the
Company expects H2 revenues to be greater than H1. Nevertheless, the
improvements to the plant scheduled for the remainder of 2022 will enable us
to extract more value from each tonne of raw material delivered and should
have a significant impact on profitability in the future.
Corporate
Although the existing operation is forecast to make significant profits,
particularly after the developments discussed above, the directors have
considered that the overwhelming priority is for the successful completion of
the feasibility study into the Balasausqandiq project and to accelerate its
development. For this reason, the Company has decided to carry out a
fundraise placing of US$10m so that whatever geopolitical situation or other
unforeseen events arise, the study can continue as quickly as possible.
The proposed placing is wholly supported by our strategic shareholder, Vision
Blue Resources Limited ("Vision Blue"), who have offered to subscribe for 100%
of the placing, but are willing to be scaled back to their pro rata
shareholding if demand from elsewhere requires it.
Directors Chris Thomas and Nicholas Bridgen also plan to subscribe to the
placing.
The earnings from the existing operation are expected to continue and any
surplus funds earned, that are not needed for the feasibility study, will be
applied to the accelerated development of the Balasausqandiq project including
front-end engineering and the ordering of long lead-time items.
Product prices in the period
Vanadium Pentoxide
At the start of 2022 the price of vanadium pentoxide was around US$8.75/lb,
lifting slightly to over US$9/lb by 30 June 2022 (having reached a peak of
US$12/lb during the period) and reaching US$8/lb in early September 2022.
Ferro-Molybdenum
At the start of 2022 the price of ferro-molybdenum was around US$44/kg,
falling to US$43/kg by 30 June 2022 and reaching US$36/kg at the end of August
2022.
COVID-19
In contrast to the previous 24 months, the ongoing risk of COVID-19 on the
Group and its operations is considered small. However, the situation continues
to be monitored and in the event that new variants increase illness and/or
transmission, mitigating steps may be required to be re-instated. Similarly,
since the delays to raw-material deliveries which we experienced in January
and February, we have not been informed of any COVID-19 related issues causing
further delays, although the continuing lockdowns in China are disrupting
markets at the macro-level.
Earnings and cash flow
The Group generated total revenues of US$3.9m for the period compared to
US$1.5m for the first six months of 2021, reflecting the higher production
output noted above.
The cost of sales increased to US$3.5m from US$1.5m for the first six months
of 2021, reflecting primarily the purchase cost of the increased volume of
concentrate that was processed.
Administrative expenses amounted to US$1.2m (2021: US$0.8m).
The Group made a loss before and after tax of US$0.7m (2021: loss of US$1.1m).
Net cash outflows from operating activities totalled US$0.5m (2021: cash
outflow of US$1.3m). Both investment activities and capital expenditure
marginally increased during the period, with net cash outflows from investing
activities totalling US$1.7m (2021: US$1.6m). The main investment activity of
the period was the continued development of the feasibility study. Net cash
outflows from financing activities totalled US$0.04m (2021: inflows of
US$10.1m) the difference reflecting Vision Blue's investment in the Group
during 2021.
Balance sheet review
At the period end, non-current assets totalled to US$8.0m (2021: US$6.4m)
reflecting the continued capitalisation of expenses to exploration and
evaluation assets incurred during the period with respect to the feasibility
study and the expansion of equipment at the plant site.
Current assets, excluding cash balances, totalled US$4.8m at the period end
compared with US$2.9m at 31 December 2021. The increased position during the
period is a result of both cash payments having been made on account by the
Group with trade suppliers in order to secure a flow of concentrates to be
processed by the plant as well as increased trade debtor balances as a result
of significant product sales made before the period end (subsequently settled
post period end).
The Group held an aggregate cash balance of US$0.5m at the period end (2021:
US$8.2m).
With respect to non-current liabilities, the reduction in the overall balance
from US$0.9m at 31 December 2021 to US$0.05m is attributable to the
reclassification of bonds previously issued by the Company, that will mature
within the next 12 months, to current liabilities.
Current liabilities have increased from US$1.3m at 31 December 2021 to US$4.2m
at the period end. The increase is represented by the bond liability
reclassification noted above, a fair value through profit and loss payable
provision of US$0.4m being recognised with respect to product sales that have
suffered negative market price movements between the date of sale and date of
delivery / acceptance by the customer and an increase in trade creditors for
concentrate / plant processing materials of US$1.5m.
Description of principal risks, uncertainties and how they are managed
(a) Current processing operations
Current processing operations make up a small part of the Group's expected
future value but provide useful cash flows in the near term and allow the
Group to gain and retain an experienced workforce and build our expertise in
the production processes and operating in the local environment. The principal
risks of this operation are the prices of its products (vanadium, molybdenum
and nickel), availability and price of vanadium bearing concentrates,
availability of reagents and the efficiency of the production processes.
The Company is constantly reviewing the market opportunities for alternative
supplies of vanadium bearing concentrates and has sufficient long-term
contracts in place. The Company aims to extract all the useful components of
the raw materials so that no residues remain on site and so that the maximum
value is obtained from each tonne treated. By this 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) Geopolitical situation
While the invasion of Ukraine by Russia does not directly impact the Company's
operations, the directors continue to closely monitor the situation. The main
risk is to product sales transport routes, many of which involve transit
through Russia. Whilst these are currently operating, sanctions have been
made against Russian and Belorussian vehicles transiting through Europe. There
is a risk that further sanctions might prevent transit through Russia into
Latvia, to and from where some of the Company's imports and exports currently
flow. The Company is investigating 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. Routes to China are working
normally.
(c) Financing risk
In March 2021 the Company signed an investment agreement with Vision Blue.
Under the terms of this agreement, investments totalling US$10.1m 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 has further
options to subscribe up to US$30m at higher prices to partially finance the
construction of the Balasausqandiq project. However, the Balasausqandiq
project will require substantial funds to be raised in debt and possibly
further equity which will be dependent upon market conditions at the time and
the successful completion of the feasibility study.
The existing operation is operating well and, after the commissioning of the
new nickel concentrate operation, an associated increase in vanadium
production, and the increased production of ferro-molybdenum, is forecast to
make significant profits from later in 2022. However, experience in the first
half of 2022 has shown that the operation is sensitive to geopolitical
factors, the resolution of which are not guaranteed in the short or medium
term. Since the main objective over the next 12 months is to bring to fruition
the Balasausqandiq project, we have decided to ensure that the feasibility
study is fully funded under any foreseeable conditions and therefore the
directors have resolved to carry out a fundraise placing in September 2022.
In the event that the existing operation returns to the previously anticipated
operating environment, significant surplus funds will be generated which will
be used for front-end engineering and accelerating the implementation of the
main project.
(d) Climate change risk
The climate in the environment around the operations in Kazakhstan is
generally hot with temperatures often reaching 40 C, but with a short sharp
winter where temperatures in January and February frequently reach -22 C.
Although there are rivers in the vicinity from which water could be drawn
(subject to permissions), there is currently plentiful ground water.
Significant changes to rainfall patterns might have currently unknown effects
on the availability of such water for production purposes. The operation is
being designed to minimise water use and to recycle where possible.
(e) 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.
(f) Balasausqandiq project
The Balasausqandiq project is a much larger contributor to the Group's value
than current operations and the extent of its profitability is primarily
dependent on long term vanadium prices.
The project is also dependent on raising finance to meet capital costs
anticipated to amount to in excess of US$100m for the first phase. Raising
this money will be dependent on the successful outcome of the feasibility
study which is ongoing. The favourable financial and other characteristics of
the project determined by studies so far completed give the directors
confidence that the outcome of the study will be successful. Initial
discussions with the providers of finance, including the Development Bank of
Kazakhstan (for which our project has passed through initial screening), have
been encouraging.
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 2022 has been
approved by the Board and signed on its behalf by:
William Callewaert
Director
14 September 2022
Condensed unaudited Statement of Profit or Loss and Other Comprehensive Income
for the six months ended 30 June 2022
Note Unaudited Unaudited six-month period ended 30 June 2021 $000 Audited year
six-month
ended
period ended
31 December 2021
30 June 2022
$000
$000
Revenue from customers (pricing at shipment) 2 4,327 1,520 4,709
Other revenue (adjustments to price after delivery and fair value 2 (417) 27 22
changes)
Total revenue 2 3,910 1,547 4,731
Cost of sales 3 (3,541) (1,491) (4,893)
Gross income / (loss) 369 56 (162)
Other income 12 8 28
Administrative expenses 4 (1,154) (849) (2,471)
Distribution expenses (52) (218) (94)
Other expenses - (2) (11)
Loss from operating activities (825) (1,005) (2,710)
Net finance costs 6 131 (78) (117)
Loss before income tax (694) (1,083) (2,827)
- - -
Income tax
Loss for the period (694) (1,083) (2,827)
Other comprehensive (loss) / income
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations (834) 145 (158)
Total comprehensive loss for the period (1,528) (938) (2,985)
Loss per share (basic and diluted) 14 (0.002) (0.003) (0.008)
These condensed unaudited financial statements were approved by directors on
14 September 2022.
Condensed unaudited Statement of Financial Position for the six months ended Note Unaudited Unaudited Audited 31 December 2021
30 June 2022
30 June 2022
30 June 2021
$000
$000
$000
ASSETS
Non-current assets
Property, plant and equipment 7 4,624 2,705 4,863
Exploration and evaluation assets 8 2,819 1,158 1,434
Intangible assets 9 19 21 21
Prepayments 12 575 2,489 930
Total non-current assets 8,037 6,373 7,248
Current assets
Inventories 10 2,422 480 2,100
Trade and other receivables 11 1,356 685 116
Prepayments 12 1,043 393 670
Cash and cash equivalents 13 542 8,158 2,810
Total current assets 5,363 9,716 5,696
Total assets 13,400 16,089 12,944
EQUITY AND LIABILITIES
Equity
Share capital 14 41,252 41,252 41,252
Convertible loan notes 14 4,019 4,019 4,019
Additional paid-in capital 397 397 397
Foreign currency translation reserve (4,454) (3,317) (3,620)
Accumulated losses (32,082) (29,644) (31,388)
Total equity 9,132 12,707 10,660
Non-current liabilities
Loans and borrowings 15 - 896 901
Provisions 45 46 42
Total non-current liabilities 45 942 943
Current liabilities
Loans and borrowings 15 1,390 523 489
Trade and other payables 16 2,404 1,917 828
Payables at FVTPL 17 405 - -
Interest payable 15 24 - 24
Total current liabilities 4,223 2,440 1,341
Total liabilities 4,268 3,382 2,284
Total equity and liabilities 13,400 16,089 12,944
Condensed unaudited Statement of Changes in Equity for the six months ended 30
June 2022
Share Convertible loan notes Additional paid in capital Foreign currency translation reserve Accumulated Total
capital
$000
$000
$000
losses
$000
$000
$000
Balance at 1 January 2021 35,606 - 397 (3,462) (28,561) 3,980
Loss for the year - - - - (1,083) (1,083)
Other comprehensive expense
Exchange differences arising on translation of foreign operations - - - 145 - 145
Total comprehensive income / (loss) for the year - - - 145 (1,083) (938)
Transactions with owners, recorded directly in equity
Shares issued, net of issue costs 5 646 - - - - 5,646
Convertible loan notes - 4,019 - - - 4,019
Balance at 30 June 2021 41,252 4,019 397 (3,317) (29,644) 12,707
Balance at 31 December 2021 41,252 4,019 397 (3,620) (31,388) 10,660
Balance at 1 January 2022 41,252 4,019 397 (3,620) (31,388) 10,660
Loss for the year - - - - (694) (694)
Other comprehensive income
Exchange differences arising on translation of foreign operations - - - (834) - (834)
Total comprehensive income / (loss) for the year - - - (834) (694) (1,528)
Transactions with owners, recorded directly in equity
Shares issued, net of issue costs (note 14) - - - - - -
Convertible loan notes - - - - - -
Balance at 30 June 2022 41,252 4,019 397 (4,454) (32,082) 9,132
Condensed unaudited Statement of Cash Flows for the six months ended 30 June Unaudited Unaudited Audited
2022
six-month
six-month
year ended
period ended
period ended
31 December 2021
30 June 2022
30 June 2021
$000
$000
$000
Cash flows from operating activities Note
Loss for the period (694) (1,083) (2,827)
Adjustments for:
Depreciation and amortisation 3, 4 269 207 455
Write off of property, plant and equipment - - (84)
Write off of VAT non refundable - - 499
Net finance costs 6 (131) 78 117
Cash from operating activities before changes in working capital (556) (798) (1,840)
Change in inventories (516) 205 (1,209)
Change in trade and other receivables (1,256) (519) (397)
Change in prepayments (137) (341) (628)
Change in trade and other payables 1,583 214 (846)
Change in payables at FVTPL 419 (60) (59)
Net cash from operating activities (463) (1,299) (4,979)
Cash flows from investing activities
Acquisition of property, plant and equipment 7 (361) (1,229) (2,211)
Acquisition of exploration and evaluation assets 8 (1,385) (320) (333)
Acquisition of intangible assets 9 (1) (1) (1)
Net cash used in investing activities (1,747) (1,550) (2,545)
Cash flows from financing activities
Proceeds from issue of share capital 14 - 5,900 5,900
Transaction costs on shares subscription 14 - (254) (254)
Proceeds from issue of convertible loan notes 14 - 4,019 4,019
Proceeds from borrowings 15 - 476 476
Interest paid 15 (41) (30) (80)
Net cash from financing activities (41) 10,111 10,061
Net increase in cash and cash equivalents (2,251) 7,262 2,537
Cash and cash equivalents at the beginning of year 13 2,810 707 707
Effect of movements in exchange rates on cash and cash equivalents (17) 189 (434)
Cash and cash equivalents at the end of the period 542 8,158 2,810
Notes to the Condensed unaudited Financial Statements
for the six months ended 30 June 2022
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 2022.
(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 these 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 Company signed an investment agreement with Vision Blue on 15 March 2021
as a result of which Vision Blue and their co-investors have so far subscribed
for shares and convertible loan notes to the value of US$10.1m to fund the
expansion of the existing operation and completion of the feasibility study in
the Balasausqandiq project, both of which are in progress.
Vision Blue may, at their option, invest a further US$2.5m at the original
deal price of 9 pence per share at any time up to two months after the issue
of the feasibility study for the development of Phase 1 of the Balasausqandiq
project, expected during the middle of 2023. Since the share price is
currently significantly higher than this figure, the directors are confident
that these funds are likely to be available.
While the Group's production has been variable during the period as a result
of the geopolitical factors noted above, which have since stabilised, and
while the profits available to fund the feasibility study and investment
programme 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 processing operations' property, plant and
equipment ("PP&E") for impairment (Note 7) at 30 June 2022. In doing so,
net present value cash flow forecasts were prepared to approximate value in
use which required key estimates including vanadium pentoxide,
ferro-molybdenum and ferro-nickel prices, production including the impact of
corresponding ongoing costs and an appropriate discount rate. Key estimates
included:
· Production volumes of 69 tonnes per month of vanadium pentoxide (as
AMV), 23 tonnes of molybdenum (as ferro-molybdenum) and from September 2022
and 17 tonnes of nickel (as ferro-nickel).
· Average prices of vanadium pentoxide of US$7.85/lb, ferro-molybdenum
of US$36.75/kg and ferro-nickel of US$20/kg in 2022 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 10% post tax in real terms.
Based on the key assumptions set out above, the recoverable amount of PP&E
(US$78.6m) exceeds its carrying amount (US$4.6m) by US$74m and, therefore,
PP&E has not been impaired.
Fair value of trade receivables and payables classified at fair value through
profit and loss (Note 17)
The consideration receivable in respect of certain sales for which performance
obligations have been satisfied at period end and for which the Group has
received prepayment under the terms of the sale agreements, remain subject to
pricing adjustments with reference to market prices in the month of arrival at
the port of final destination for AMV and month of shipment from the port for
ferro-molybdenum. Under the Group's accounting policies, the fair value of the
consideration is determined and the remaining receivable is adjusted to
reflect fair value, or, if the final estimated consideration is lower than the
amounts received prior to the year end, a payable at fair value through profit
or loss ("FVTPL") is recorded. In the absence of forward market prices for the
commodity, management estimated the forward price based on: a) spot market
prices for vanadium pentoxide and ferro-molybdenum at 30 June 2022 less
applicable deductions for AMV; b) foreign exchange rates; c) risk free rates
and d) carry costs when material.
As at 30 June 2022 the Group recognised a payable at FVTPL of US$405,000
(2021: US$ Nil).
Inventories (Note 10)
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 8)
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 licence. Judgement was required in determining that an application
for deferral of obligations under the licence will be granted and management
anticipate such approvals being provided given the impact of the geopolitical
situation, 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 2021
30 June 2022
30 June 2021
$000
$000
$000
Revenue from sales of vanadium products 3,343 1,436 4,078
Revenue from sales of molybdate calcium - 74 392
Revenue from sales of ferro-molybdenum 897 - 161
Sales of gravel and waste rock 87 10 61
Service revenue - - 17
Total revenue from customers under IFRS 15 4,327 1,520 4,709
Other revenue (adjustments to price after delivery and fair value charges) (417) 27 22
Total revenue 3,910 1,547 4,731
Products
Under certain sales contracts the single performance obligation is the
delivery of products to the designated delivery point at which point
possession, title and risk transfers to the buyer. Typically, the buyer makes
an initial provisional payment based on volumes and quantities assessed by the
Company and market spot prices 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 based on the historical average market prices
during a quotation period and an adjusting payment or receipt will be made to
the initially received revenue. 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.
Revenues 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 2021
30 June 2022
30 June 2021
$000
$000
$000
Materials 2,738 977 3,709
Wages, salaries and related taxes 451 258 656
Depreciation 254 194 425
Electricity 74 43 9
Other 24 19 4
3,541 1,491 4,893
4 Administrative expenses
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2021
30 June 2022
30 June 2021
$000
$000
$000
Wages, salaries and related taxes 633 449 1,035
Professional services 163 155 305
Write-off of non-refundable VAT - - 499
Taxes other than income tax - - 17
Listing and reorganisation expenses 13 44 119
Audit 57 4 151
Materials 43 45 75
Depreciation and amortisation 15 13 30
Insurance 2 20 22
Bank fees 15 42 20
Business trip expenses 10 9 18
Security 7 7 14
Communication and information services 6 5 7
Other 190 56 159
1,154 849 2,471
5 Personnel costs
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2021
30 June 2022
30 June 2021
$000
$000
$000
Wages, salaries and related taxes 1,083 758 1,711
1,083 758 1,711
Personnel costs of US$421,000 (2021: US$232,000) have been charged to cost of sales, US$633,000 (2021: US$448,000) to administrative expenses and US$29,000 (2021: US$78,000) were charged to cost of inventories which were not yet sold as at the end of the period.
6 Finance costs
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2021
30 June 2022
30 June 2021
$000
$000
$000
(Gain) / loss on foreign exchange (172) 41 35
Interest expense on financial liabilities (bonds) 41 37 82
Net finance costs (131) 78 117
7 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 2021 1,529 1,853 541 36 99 1,560 5,618
Additions - 4 - 2 10 158 174
Transfers 495 743 7 - - (1,245) -
Disposals - 0 (22) - - - (22)
Foreign currency translation difference (30) (38) (8) (1) (2) (16) (95)
Balance at 30 June 2021 1,994 2,562 518 37 107 457 5,675
Balance at 31 December 2021 2,060 2,639 509 39 102 2,632 7,981
Balance at 1 January 2022 2,060 2,639 509 39 102 2,632 7,981
Additions 35 85 - 1 11 229 361
Transfers - - - - - - -
Disposals - - (17) - - - (17)
Foreign currency translation difference (150) (194) (36) (3) (8) (196) (587)
Balance at 30 June 2022 1,945 2,530 456 37 105 2,665 7,738
Depreciation
Balance at 1 January 2021 629 1,779 340 22 48 - 2,818
Depreciation for the period 37 161 17 3 5 - 223
Disposals - - (22) - - - (22)
Foreign currency translation difference (11) (31) (5) - (1) - (48)
Balance at 30 June 2021 655 1,909 330 25 52 - 2,971
Balance at 31 December 2021 688 2,028 327 28 47 - 3,118
Balance at 1 January 2022 688 2,028 327 28 47 - 3,118
Depreciation for the period 34 186 17 3 5 - 245
Disposals - - (17) - - - (17)
Foreign currency translation difference (51) (152) (23) (2) (4) - (232)
Balance at 30 June 2022 671 2,062 304 29 48 - 3,114
Carrying amounts
At 1 January 2021 900 74 201 14 51 1,560 2,800
At 30 June 2021 1,339 653 188 12 55 457 2,705
At 31 December 2021 1,372 611 182 11 55 2,632 4,863
At 30 June 2022 1,274 468 152 8 57 2,665 4,624
Depreciation expense of US$224,000 (2021: US$193,000) has been charged to cost
of sales, excluding cost of finished goods that were not sold at year-end,
US$15,000 (2021: US$12,000) to administrative expenses, and US$21,000 has been
charged to cost of finished goods that were not sold at the end of the period
(2021: US$17,000).
Construction in progress relates to upgrades to the processing plant
associated with the expansion of the facility.
8 Exploration and evaluation assets
Unaudited Unaudited Audited
six-month
six-month
year ended
period ended
period ended
31 December 2021
30 June 2022
30 June 2021
$000
$000
$000
Balance at 1 January 1,434 813 813
Additions (feasibility study) 1,653 320 626
Change in estimate (asset restoration obligation) - - (14)
Foreign currency translation difference (268) 26 9
Balance at 30 June / 31 December 2,819 1,158 1,434
The Group's exploration and evaluation assets relate to the Balasausqandiq
deposit. During the six month period ended 30 June 2022 the Group capitalised
the expenses for the feasibility study as exploration and evaluation assets.
As at 30 June 2022, the carrying value of exploration and evaluation assets
was US$2.8m (2021: US$1.2m).
9 Intangible assets
Mineral rights Patents Computer software Total
$000
$000
$000
$000
Cost
Balance at 1 January 2021 91 32 3 126
Additions - 1 - 1
Foreign currency translation difference (9) (3) - (12)
Balance at 30 June 2021 91 33 3 126
Balance at 31 December 2021 88 32 3 124
Balance at 1 January 2022 88 33 3 124
Additions - 1 - 1
Foreign currency translation difference (6) (3) - (9)
Balance at 30 June 2022 82 31 3 116
Amortisation
Balance at 1 January 2021 91 11 3 105
Amortisation for the year - 1 - 1
Foreign currency translation difference (9) - - (9)
Balance at 30 June 2021 91 11 3 105
Balance at 31 December 2021 88 12 3 103
Balance at 1 January 2022 88 12 3 103
Amortisation for the year - 1 - 1
Foreign currency translation difference (6) (1) - (7)
Balance at 30 June 2022 82 12 3 97
Carrying amounts
At 1 January 2021 - 21 - 21
At 30 June 2021 - 21 - 21
At 31 December 2021 - 21 - 21
At 30 June 2022 - 19 - 19
During the six months ended 30 June 2022 and 2021, amortisation of intangible
assets was charged to administrative expenses.
10 Inventories
Unaudited Audited 31 December 2021
30 June 2022
$000
$000
Unaudited 30 June 2021 $000
Raw materials and consumables 2,223 389 1,805
Finished goods 192 83 287
Work in progress 7 8 7
Goods in transit - - 1
2,422 480 2,100
During the six months ended 30 June 2022, inventories expensed to profit and
loss amounted to $2.8m (six months period ended 30 June 2021:US $1.0m).
11 Trade and other receivables
Current Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
$000
$000 $000
Trade receivables from third parties 351 346 62
Due from employees 44 24 22
VAT receivable 976 345 58
Other receivables 20 6 9
1,391 721 151
Expected credit loss provision for receivables (35) (36) (35)
1,356 685 116
12 Prepayments
Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
$000
$000
$000
Non-current
Prepayments 575 2,489 930
575 2,489 930
Current
Prepayments for goods and services 1,043 393 670
1,043 393 670
The non-current prepayments balance at 30 June 2022 is mainly related to
payments made on account to third party consultants that have been contracted
to assist with the preparation of the feasibility study.
The current prepayments are related mainly to purchase of raw materials for
processing.
13 Cash and cash equivalents
Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
$000
$000
$000
Cash at current bank accounts 529 8,143 2,795
Cash at bank deposits 13 14 14
Petty cash - 1 1
Cash and cash equivalents 542 8,158 2,810
14 Equity
(a) Share capital
Number of shares unless otherwise
stated
Ordinary shares
Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
Par value - - -
Outstanding at beginning of year 377,676,799 330,589,052 330,589,052
Shares issued - 47,087,747 47,087,747
Outstanding at end of period 377,676,799 377,676,799 377,676,799
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 (2021:
47,087,747 ordinary shares issued).
Convertible loan notes
Convertible loan notes are considered as equity as the conditions that are set
out in the Convertible Loan Note agreement provide for conversion into equity
in all circumstances except certain conditions that the directors of the
Company do not consider probable. In particular, the conditions required to be
fulfilled before conversion takes place include an obligation on the Company
to receive certain consents from the regulatory authorities and avoidance of
the possibility of triggering a requirement for the issue of a prospectus
which will automatically be achieved upon the effluxion of time provided no
further shares are issued.
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.
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 permanent as equity.
Accumulated losses: Cumulative net losses.
(b) Dividends
No dividends were declared for the six months ended 30 June 2022 (2021: US$
Nil).
(c) Loss per share (basic and diluted)
The calculation of basic and diluted loss per share has been based on the
following loss attributable to ordinary shareholders and 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 2021
period ended
period ended
$000
30 June 2022
30 June 2021
$000
$000
Loss for the period, attributable to owners of the Company (694) (1,083) (2,827)
Loss attributable to ordinary shareholders (694) (1,083) (2,827)
(ii) Weighted-average number of ordinary shares (basic and diluted)
Shares Unaudited Unaudited Audited year ended
six-month
six-month
31 December 2021
period ended
period ended
30 June 2022
30 June 2021
Issued ordinary shares at 1 January (after subdivision) 377,676,799 330,589,052 330,589,052
Effect of shares issued (weighted) - 4,531,663 4,531,663
Weighted-average number of ordinary shares at period / year end 377,676,799 335,120,715 335,120,715
Earnings (loss) per share of common stock attributable to the Company: (0.0018) (0.0032) (0.008)
Basic and diluted
15 Loans and borrowings
The Company has issued unsecured corporate bonds with effective interest rates
of 5.8% - 7.0%. Investors have subscribed for a total of 706 of the Company's
bonds with a nominal value of US$2,000 each issued at a premium or discount to
achieve the effective interest rates agreed. The bonds are unsecured, have a
three-year term, and bear the coupon rate of 5.8%, paid twice-yearly. The
bonds have been listed on AIX with identifier FAR.0323 and ISIN number
KZX000000336. Some of the investors (that own 206 bonds) have the right to
receive early repayment after a minimum period of 12 months from the purchase
date. All of the Company's issued bonds in circulation will mature during
March 2023.
Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
$000
$000
$000
Non-current liabilities
Bonds payable - 896 901
- 896 901
Current liabilities
Bonds payable (early repayment rights) 1,390 512 465
Interest payable 24 11 24
1,414 523 489
The terms and conditions of outstanding bonds at 30 June 2022 were as follows:
US$ Currency Effective interest rate Nominal amount Actual Coupon rate Coupon Interest
amount
paid
Bonds payable US$ 7.5% 506 503 5.8% 12 12
Bonds payable US$ 7.0% 886 876 5.8% 26 26
Bonds payable US$ 5.8% 20 21 5.8% 3 3
1,412 1,400 41 41
During the six month period ended 30 June 2022 the Group did not receive any
proceeds from the sale of bonds (2021: US$475,830).
Non-cash transactions from financing activities are shown in the
reconciliation of liabilities from financing transactions overleaf.
Loans and borrowings
Unaudited Unaudited
six-month
six-month
period ended
period ended Audited year ended 31 December 2021
30 June 2022
30 June 2021
$000
$000
$000
At 1 January 1,427 936 936
Cash flows:
-Interest paid (41) (30) (80)
-Proceeds from loans and borrowings - 476 476
Total 1,386 1,382 1,332
Non-cash flows
- Interest accrued during the period 41 37 95
At 30 June / 31 December 1,427 1,419 1,427
16 Trade and other payables
Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
$000
$000
$000
Trade payables 2,130 1,016 625
Debt to directors/key management (Note 20) 75 745 7
Debt to employees 73 65 68
Other taxes 116 91 117
Advances received 10 - 11
2,404 1,917 828
17 Payables at FVTPL
Unaudited Unaudited Audited 31 December 2021
30 June 2022 30 June 2021
$000
$000
$000
Payables at FVTPL 405 - -
405 - -
18 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.
19 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 2022
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 3,910 - - 3,910
Cost of sales (3,541) - - (3,541)
Other income 12 - - 12
Administrative expenses (466) (29) (659) (1,154)
Distribution & other expenses (52) - - (52)
Finance costs 596 - (465) 131
Loss before tax 459 (29) (1,124) (694)
Unaudited six-month period ended 30 June 2021
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 1,547 - - 1,547
Cost of sales (1,491) - - (1,491)
Other income 8 - - 8
Administrative expenses (247) (25) (576) (849)
Distribution & other expenses (220) - - (220)
Finance costs (8) - (70) (78)
Loss before tax (411) (25) (646) (1,083)
Audited year ended 31 December 2021
Processing Subsoil Corporate Total
$000
$000
$000
$000
Revenue 4,731 - - 4,731
Cost of sales (4,893) - - (4,893)
Other income 28 - - 28
Administrative expenses (1,131) (31) (1,309) (2,471)
Distribution & other expenses (94) - (11) (105)
Finance costs 97 - (214) (117)
Loss before tax (1,262) (31) (1,534) (2,827)
Included in revenue arising from processing operations are revenues of US$3.9m
(2021: US$1.5m) which arose from sales to the three largest customers of the
Group. No other single customer contributes 10 per cent or more to the Group's
revenue.
The sales to the three largest customers of the Group during the six months
ended 30 June 2022 were:
London Chemicals
(UK) US$
1.9m (49%) (2021:US$ 0.4m)
MTALX
(UK)
US$ 1.1m (27%) (US$ 2021: 0.6m)
MetImpex (Russia)
US$ 0.7m (17%) (2021: US$ 0.2m)
20 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 2021 $000
six-month
six-month
period ended
period ended
30 June 2022
30 June 2021
$000
$000
Wages, salaries and related taxes 360 200 400
Wages and salaries that were due to key management personnel at 30 June 2022
were US$75,000 (2021: US$700,000).
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