REG - KEFI Minerals plc - Full Year Results 2015 <Origin Href="QuoteRef">KEFI.L</Origin> - Part 3
07/06/2016 07:06
- Part 3: For the preceding part double click ID:nRSG3754Ab
Current assets 1,473 1,885 106 129
1,966 2,653 142 182
Non-current liabilities 54,974 45,095 3,971 3,092
Current liabilities 1,048 916 76 63
56,022 46,011 4,047 3,155
Net liabilities (54,056) (43,358) (3,905) (2,973)
Share capital 2,500 2,500 181 171
Accumulated losses (56,556) (45,858) (4,086) (3,144)
(54,056) (43,358) (3,905) (2,973)
Exchange rates SAR to GBP
Closing rate 0.1806 0.1714
In May 2009, KEFI announced the formation of a new minerals exploration jointly controlled entity, Gold & Minerals Co.
Limited ("G&M"), a limited liability company in Saudi Arabia, with leading Saudi construction and investment group Abdul
Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR"). KEFI is the operating partner with a 40% shareholding in G&M with
ARTAR holding the other 60%. KEFI provides G&M with technical advice and assistance, including personnel to manage and
supervise all exploration and technical studies. ARTAR provides administrative advice and assistance to ensure that G&M
remains in compliance with all governmental and other procedures. G&M is treated as a jointly controlled entity and has
been equity accounted and has reconciled its share in G&M's losses.
The above figures reported represent cumulative exploration activity incurred by G&M since its incorporation in 2009. The
accounting policy for exploration costs recorded in the G&M audited financial statements is to capitalise qualifying
expenditure and review for impairment, if applicable. This is in contrast to the Group's accounting policy relating to
exploration costs which is to expense costs through profit and loss until the Board decides on the development of a project
(Note 2). Consequently, exploration costs of G&M at 31 December 2015 amounting to SAR56.6 million (2014: SAR45.8 million)
have been adjusted to bring the figures in line with the Group's accounting policies.
Notes to the consolidated financial statements (continued)
Year ended 31 December 2015
19. Jointly controlled entities (continued)
19.2 Jointly controlled entity with Gold and Minerals (continued)
A loss of £735,000 was recognized by the Group for the year ended 31 December 2015 (2014: £ 982,000) representing the
Group's share of losses in the year.
As at 31 December 2015 KEFI owed ARTAR an amount of £90,000 (2014: receivable £186,000) - Note 21.5.
As at 31 December 2015, G&M owed KEFI an amount of £6,000 (2014: £32,000) - Note 21.4.
20. Trade and other payables
The Group Year Ended31.12.15£'000 Year Ended31.12.14£'000
Accruals and other payables 1,011 825
Other loans 236 229
Payable to shareholders (Note 21.3) 8 8
Payable to jointly controlled entity (Note 21.5) 90 186
VAT Liability 650 1,954
1,995 3,202
In January 2014 an agreement was made with Ethiopian Revenue and Customs Authority ("ERCA") to repay the balance of the VAT
liability plus interest accruing on the unpaid principal amount over a three-year payment plan in accordance with the
relevant tax proclamation, 25% of the assessed outstanding amount is payable immediately and the balance under an agreed
payment schedule. This initial payment, of ETB 27,111,509 (approximately £848,590), equivalent to 25% of the assessed tax
amount outstanding, was made in January 2014. The balance of the liability plus interest accruing on the unpaid principal
amount will be paid subject to a three-year payment plan formally agreed with ERCA. During the year an amount of ETB
45,100,000 (approximately £1,441,815), was paid. The amount to be paid over the next year is ETB 20,063,350 (approximately
£ 647,832).
Other loans are unsecured, interest free and repayable on demand.
The Company Year Ended31.12.15£'000 Year Ended31.12.14£'000
Accruals and other payables 886 746
Payable to jointly controlled entity (Note 21.5) 90 186
976 932
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented above.
Notes to the consolidated financial statements (continued)
Year ended 31 December 2015
21. Related party transactions
The following transactions were carried out with related parties:
21.1 Compensation of key management personnel
The total remuneration of key management personnel was as follows:
Year Ended31.12.15£'000 Year Ended31.12.14£'000
Directors' fees * 471 444
Directors' other benefits 51 164
Directors' bonus 50 107
Share option-based benefits to directors (Note 17) 146 200
Other key management personnel fees and other benefits 204 -
Other key management personnel bonus 37 -
Share option-based benefits other key management personnel 11 -
970 915
* Part of the salary of the Exploration Director is paid directly by the jointly-controlled entity G&M.
Share-based benefits
The Company has issued share options to directors and key management. All options, except those noted in Note 18, expire
six years after grant date and are exercisable at the exercise price in whole or in part no more than one third from the
grant date, two thirds after two years from the grant date and the balance after three years from the grant date.
21.2 Receivable from director Year Ended31.12.15£'000 Year Ended31.12.14£'000
Name Nature of transactions Relationship
Ian Rutherford Plimer Loan to Director Non-Executive Director - 20
No interest is payable by the director and the loan was repaid in full in 2015.
21.3 Payable to shareholders 2015 2014
Name Nature of transactions Relationship
Atalaya Mining PLC (previously EMED) Finance Shareholder 8 8
21.4 Receivable from related parties
The Group 2015 2014
Name Nature of transactions Relationship
Gold & Minerals Co. Limited Finance Jointly controlled entity 6 32
6 32
The Company 2015 2014
Name Nature of transactions Relationship
Gold & Minerals Co. Limited Finance Jointly controlled entity 80 106
KEFI Minerals Marketing and Sales Cyprus Limited Finance Subsidiary 3 -
Kefi Minerals Ethiopia Limited Advance Subsidiary 7,417 2,807
7,500 2,913
Notes to the consolidated financial statements (continued)Year ended 31 December 2015 21. Related party transactions (continued)
21.5 Payable to related parties
The Group 2015 2014
Name Nature of transactions Relationship
Abdul Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR") Finance Jointly controlled entity 90 186
90 186
The Company 2015 2014
Name Nature of transactions Relationship
Abdul Rahman Saad Al-Rashid & Sons Company Limited ("ARTAR") Finance Jointly controlled entity 90 186
90 186
Name Nature of transactions Relationship 2015 2014
Atalaya Mining PLC (previously EMED) Provision of management and other professional services Shareholder 8 8
22. Contingent liabilities
22.1 Geological database
In 2006, Atalaya Mining PLC (previously EMED) acquired a proprietary geological database that covers extensive parts of
Turkey and Greece and transferred to the Company that part of the geological database that relates to areas in Turkey.
Under the agreement, the Company has undertaken to make a payment of approximately £52,000 (AUD 105,000) for each tenement
it is subsequently awarded in Turkey and which was identified from the database. The maximum number of such payments
required under the agreement is four, resulting in a contingent liability of up to £210,000. These payments are to be
settled by issuing shares in the Company. To date, only one tranche of shares have been issued under this agreement in
June 2007 for £43,750 (AUD 105,000).
22.2 Charge issued
On 13th August 2015, the Company created a fixed charge in favour of AIB Group (UK) Plc over amounts held in the Company's
deposit accounts with the bank. The charge is in regard to time credit banking facilities provided by AIB Group (UK) Plc.
At 31 December 2015, the balance in the deposit accounts was £20,000.
22.3 Legal Allegations
Allegations were made against a subsidiary of the Company in 2015 by 39 persons in the Oromiya Regional State of Ethiopia,
that exploration drilling between 1998 and 2006 had caused damage to land occupied (but not owned) by them, despite
rehabilitation having been completed, reported and accepted by the regulatory authorities at that time. They allege damage
of ETB 249,589,430 (approximately £8 million). The allegations were dismissed in March 2014 but the plaintiffs have
directed the allegations to another arm of the judiciary. The Group's lawyers believe that the allegations are spurious and
that the chances of the judiciary holding that there exists a bona fide damages case to be heard are low.
Notes to the consolidated financial statements (continued)
Year ended 31 December 2015
23. Capital commitments
The Group has the following capital or other commitments as at 31 December 2015 0.03 Million (2014 0.8 Million),
Year Ended31.12.15£'000 Year Ended31.12.14£'000
Exploration programme commitments - 727
Property, plant and equipment 27 -
27 727
24. Events after the reporting date
On 19 January 2016, 48,114,000 options were issued to the Directors and a further 31,886,000 options have been granted to
other non-board members of the senior management team. The options have an exercise price of 0.42p, expire after 6 years,
and vest in two equal annual instalments.
The Company raised GBP1,747,759 before expenses on 22 March 2016 through a placing of 499,359,791 ordinary shares of 0.1p
each at a price of 0.35p per share. On this date, the Company also granted warrants to subscribe for 24,967,989 ordinary
shares of 0.1p each at a price on 0.35p per share.
In May 2016 the Company received formal confirmation from the Government of Ethiopia of its commitment to invest equity
capital of US$20 million in Tulu Kapi.
During June 2016 the funding requirement reduced from US$145 million to estimated US$130 million, after accounting for
further anticipated savings and project spending prior to project finance completion in 2016.
In June 2016 the finance plan is based on Project Equity of US$20 million from the Government of Ethiopia, Project Debt of
US$95 million which leaves a residual US$15 million to be optimised for financial completion in the second half of 2016.
KEFI has received expressions of interest for equity investment from project contractors and mezzanine-style financiers.
Notes to the consolidated financial statements (continued)
Year ended 31 December 2015
25. Adoption of new and revised International Financial Reporting Standards (IFRSs)
During the current year the Group adopted all the new and revised International Financial Reporting Standards (IFRS) as
adopted by EU that are relevant to its operations and are effective for accounting periods beginning on 1 January 2015.
This adoption did not have a material effect on the accounting policies of the Group. At the date of approval of these
financial statements, standards and interpretations were issued by the International Accounting Standards Board which were
not yet effective. Some, but not all of these were adopted by the European Union. The Board of Directors expects that the
adoption of these accounting standards in future periods will not have an impact on the financial statements of the Group
other than the following:
(i) Standards and Interpretations not adopted by the EU
New standards
IFRS 9 "Financial Instruments"
IFRS 9 makes substantial changes to the measurement of financial assets and financial liabilities. There will only be three
categories of financial assets at either fair value through profit and loss, fair value through comprehensive income or
measured at amortized cost. On adoption of the standard the Group will have to re-determine the classification of its
financial assets based on the business model for each financial asset. This is not considered likely to give rise to any
significant adjustments, other than the re-classification.
The principal change to the measurement of financial assets measured at amortized cost or fair value through other
comprehensive income is that impairments will be recognized on an expected loss basis, compared the current incurred loss
approach. As such, where there are expected to be credit losses, these are recognized in profit or loss. For financial
assets measured at amortized cost, the carrying amount is reduced for the loss allowance. For financial assets measured at
fair value through other comprehensive income, the loss allowance is recognized in other comprehensive income and does not
reduce the carrying amount of the financial assets.
Financial liabilities of the Group are expected to continue to be recognized at amortized cost.
IFRS 9 has not been adopted by the European Union, and consequently there is no effective date.
IFRS 15 "Revenue from Contracts with Customers"
The standard has been developed to provide a comprehensive set of principles in presenting the nature, amount, timing and
uncertainty of revenue and cash flows arising from a contract with a customer. The standard is based around five steps in
recognizing revenue:
1. Identify the contract with the customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price; and
5. Recognize revenue when a performance obligation is satisfied.
The Group is not currently generating income from gold sales revenue, hence there is not considered to be any significant
impact at the Group's current stage of development. Management are currently evaluating the impact of the standard on the
financial statements.
IFRS 15 has not been adopted by the European Union, and consequently there is no effective date.
This information is provided by RNS
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