REG - Keras Resources PLC - Interim Results
28/09/2022 07:01
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RNS Number : 8976A Keras Resources PLC 28 September 2022
Keras Resources plc ('Keras' or the 'Company')
Interim Results
Keras Resources plc (AIM: KRS) announces its half year results for the six
months ending 30 June 2022.
Overview
· Substantial progress has been made towards building our business into
a cash-generative producer of high-grade premium organic fertiliser in the
North American market
· Increased ownership of the Diamond Creek phosphate mine, Utah, US to
100% - now in full control of mine to market activities
· All permits and authorisation approvals renewed in line with the
project's licence obligations at Diamond Creek - in the process of expanding
permitted mining footprint
· Record sales in August 2022 of 700t (40% in excess of budget) and
repeat forward orders resulted in extended mining campaign to produce
additional tonnage
· Sales guidance of between 7,500 tons and 8,000 tons of phosphate
product forecast from September 2022 to June 2023 at an all-in sustaining
cost (AISC) margin of between $80 and $100 per ton
· Targeting 25,000 tons per annum of phosphate product as our
medium-term annual sales objective into a market which is expected to grow at
8% per annum in tonnage terms as well as 14% in value terms
· As a result of the extended mining season, drilling programme to
further define the ore reserve at Diamond Creek will now commence in spring
2023
· Successful placing of £1.95m (before expenses) raised at a premium
supported by cornerstone investor First Uranium Resources Ltd
· Board changes implemented
o Graham Stacey appointed as CEO in June, with Russell Lamming moving to
Non-Executive Chairman and Brian Moritz moving to Non-Executive Director
o Claire Parry joining as Independent Non-Executive Director with Dave
Reeves stepping down
· Continued focus for 2022 and beyond is increasing the Company's
market share in the North American organic fertiliser market and building
Diamond Creek into the premier organic phosphate producer in the US
Graham Stacey, Keras Resources Chief Executive Officer, commented, "Our vision
remains to build Diamond Creek into the premier organic phosphate producer in
the US and we have made real progress over the past few months having acquired
100% in the business and focussing our efforts on resetting the business,
starting to ramp up sales and timing production from our mine and milling
facilities to meet our sales targets. We produce a high-grade, premium
phosphate product that supports soil health, regenerative agriculture and
provides investors with direct exposure to the buoyant global fertiliser
industry. We believe we are ideally positioned to capitalise on the robust
fundamentals of the sector and look forward to further building on the
foundations we have laid to date, producing both a valuable and essential
commodity whilst generating returns for our stakeholders."
The information contained within this Announcement is deemed by the Company to
constitute inside information as stipulated under Article 7 of the Market
Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the
domestic law of the United Kingdom by virtue of the European
Union (Withdrawal) Act 2018 (as amended). Upon the publication of this
Announcement via the Regulatory Information Service, this inside information
is now considered to be in the public domain.
Graham Stacey Keras Resources plc annabel (mailto:annabel@kerasplc.com) @kerasplc.com
(mailto:annabel@kerasplc.com)
Annabel Redford
Ewan Leggat / Charlie Bouverat SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Nominated Adviser & Joint Broker
Joint Broker Shard Capital Partners LLP +44 (0) 207 186 9900
Damon Heath / Erik Woolgar
Financial and Corporate Communications Celicourt +44 (0) 774 884 3871
Felicity Winkles
Chairman's Statement
This is my first statement since becoming Non-Executive Chairman on 1
September 2022 and it is a pleasure to provide an update on the Company's
activities over the past six months during what has been a transformational
period for the Company. The acquisition of the outstanding 49% of Falcon Isle
Resources ("Falcon Isle"), which owns the Diamond Creek high-grade premium
organic phosphate mine ("Diamond Creek") has now placed Keras in full control
of the operation which markets organic fertilisers with the highest available
phosphate (P(2)O(5)) in the US. The mine itself is situated high in the
Wasatch mountains, 20 miles from the milling plant in Spanish Fork which
provides convenient access to locally available contracting services,
consumables, technical and financial service providers and easy access to
distribution links.
Since taking control of the operation substantial progress has been made
towards building our business into a cash-generative producer of high-grade
premium organic fertiliser for the US market and establishing a strategic
position in this fast-growing sector. The Spanish Fork processing plant is
now back in production, two mining campaigns have been undertaken at the
Diamond Creek mine and repeat customers are now beginning to make longer-term
offtake commitments. We are now focussing on Falcon Isle's marketing
efforts, which were previously the responsibility of our partner, and ensuring
we continue to build our position in the US organic phosphate to fertiliser
industry.
The Utah Department of Oil, Gas & Mining (UDOGM) and US Forest Service
(USFS) carried out a routine inspection and site visit during April 2022 and
all permits and authorisation approvals were renewed in line with the
project's licence obligations. We are currently in the process of expanding
our permitted mining footprint in line with new regulations. Two phases of
summer mining have been completed as planned, a second phase as a required
result of increased sales demand to ensure ample product availability for the
2022-2023 spring sales season. We are targeting 25,000 tons per annum as our
medium-term annual sales objective into a market which is expected to grow at
8% per annum in tonnage terms as well as 14% in value terms. As an owner
operator of our processing plant we are able to tailor our product mix to
customer requirements which, in addition to product quality, gives us an
important competitive advantage in the region. As a result of the extended
mining season, our drilling programme which we will undertake to further
define the ore reserve at Diamond Creek will now commence in spring next year.
The Board continues to review and evaluate all areas of the business to look
to further optimise efficiencies and create economies of scale.
We have previously reported on the delivery and commencement of construction
of a granulator plant during the second half of 2021, this construction was
paused as announced in November 2021 while the acquisition of the outstanding
49% in the business was negotiated and completed during March 2022, this pause
gave us the opportunity to evaluate value-enhancing opportunities such as the
incorporation of supplementary feed circuits to produce custom blended organic
products including Nitrogen and Potassium feedstock to potentially supplement
the phosphate-only granulates we'd previously planned. Decisions on the final
configuration of the plant will be made during the coming months and
construction will re-commence thereafter.
Marketing and Market Fundamentals
Sales has been a key focus for us as we are looking to continue to build
market share for our products under the PhosAgri brand. Core to our marketing
is highlighting the value that our premium >12% available P(2)O(5) products
can offer from a value-in-use basis along with the benefits of its high
calcium content. Importantly we are also getting a deeper understanding of our
client requirements and adapting our product mix to suit the cyclical seasonal
agriculture business which will be key to increasing our market share in the
dynamic North American organic fertiliser market. We have the flexibility
within our operational set up to be able to adapt accordingly which will be an
important aspect of ongoing discussions across our existing and prospective
new customer bases.
We are delighted with a 40% increase in sales for August 2022 to 700t against
our 500t forecast, as well as repeat forward orders off the back of which we
have set out sales guidance of between 7,500 tons and 8,000 tons of phosphate
product forecast from 1 September 2022 to June 2023 at an all-in sustaining
cost (AISC) margin of between $80 and $100 per ton. Importantly, whilst we
offer an organic product, we are not limited to the organic market as PhosAgri
can be used as a blend, so widening our audience in this regard will enables
us to investigate retail potential and further downstream avenues.
All of this ties into the market backdrop and we are excited by the
significant opportunity offered to us by the North American fertiliser
industry which research forecasts to grow at 8% per annum on a consolidated
annual growth rate (CAGR) in volume terms, and more importantly 14% on a value
basis which suggest a material disjoint between demand and supply growth.
Synthetic fertiliser pricing has seen a 60% increase year on year which,
albeit due to geopolitical pressure on the supply of fertiliser inputs, is
forecast to continue which will both support pricing for organic fertilisers
but also growers' substitution of synthetic fertilisers with organic
substitutes. Demand is also underpinned by key long-term drivers, including
security of supply, environmental factors, the ongoing education and awareness
around soil health, as well as the increasing demand for organic food - all of
which our PhosAgri products support, and particularly with our location close
to the Central California Valley.
Carbon Market
As previously outlined, we are also looking to leverage our low carbon
footprint relative to synthetic fertiliser producers and the net carbon
sequestration that provides. This presents a revenue augmentation opportunity
through the generation and trading of carbon credits. We are exploring this
through partnering with growers and verification agencies to create and trade
carbon credits and develop offset programmes. This would not deviate from our
current business model but complement and augment our revenue model. Whilst
early stage we are actively pursuing this avenue and will provide further
updates as this project matures.
Togo
As reported previously, on the 18(th) October 2019 the Council of Ministers of
the Republic of Togo published a decree granting the right for large-scale
exploitation of the manganese deposit at Nayéga to the Company's subsidiary,
Société Générale des Mines ("SGM"). Since that date the Company has
concentrated its efforts on obtaining the required Exploitation Permit. The
terms of the permit and associated protocols have been agreed, and SGM has
been converted from a private to a public company, as required by law and in
compliance with the draft Mining Convention. However, the exploitation permit
approval has not been forthcoming. We continue to negotiate in good faith with
the authorities in Togo to achieve a satisfactory outcome and will update the
market in due course on developments.
Financial review
During the period we successfully completed a £1.95m (before expenses)
capital raise. This was supported by the Directors and also saw First Uranium
Resources Ltd come in as a cornerstone investor now owning 10% of Keras.
Subsequently associates of First Uranium have acquired an additional 7% of
Keras in the market. They share our view that the North American phosphate
market will be a key growth market and we are very pleased to have them on
board as a supportive shareholder. Since taking control of the operation in
March 2022 Keras management has now progressed Falcon Isle into a cashflow
positive entity. Although our reserves are low we do not believe that we will
need to come back to the market for funding for our current development plan.
The results for the 6 months ended 30 June 2022 show a loss of £467,000.
The incurred loss is partly driven by substantial legal costs incurred in
connection with the dispute with our former partner in Falcon Isle, the
dispute also resulted in the temporary shutdown of our processing plant in
Utah, with a corresponding reduction in sales.
Board Changes
We have made significant Board changes effective 1 September 2022. With Graham
Stacey taking on the CEO role and in the process of relocating to the US we
will have key management based on site and he will continue to build the team
around him. I would like to reiterate my thanks to Dave Reeves for all his
significant contributions to Keras during his tenure on the Board and as a
significant shareholder, and Brian Moritz for his excellent stewardship of
Keras as Chairman since listing in 2011. It was also a pleasure to welcome
Claire Parry as Independent Non-Executive Director at the beginning of
September 2022. She has previously advised Keras on accounting matters and she
brings further financial and independent counsel to the Board. I look forward
to working alongside Claire, Graham and Brian who remains as Company Secretary
and a valued Non-Executive Director.
Outlook
As we outlined in our previous results, the Exploitation Permit for the
Nayéga mine remains pending but we continue to engage with the Togolese
authorities to seek a satisfactory outcome. We will announce further updates
in due course. Our main thrust in the near term remains to progress our
phosphate to fertiliser business, underlined by our recent rebrand of the
Company and our updated website. We are mining an essential resource that
can create value, be part of the greener economy and contribute to a more
sustainable future. As a mining company we remain ever conscious of our
obligations and commitments in line with best environmental, social and
governance ("ESG") practice and will continue to take the initiative within
this area.
I would like to thank our shareholders for their ongoing support. We are
excited about what the future holds for Keras, both at Diamond Creek as an
organic phosphate producer and as we broaden our remit into the carbon market.
We will also pursue new opportunities should they fit within our strategy and
be value generating for the business. We have set out our plans and goals as
outlined, ramping up operations whilst rationalising costs, widening our
customer base and accessing new markets, all with responsible mining at the
centre of what we do. We are looking to develop and sustain a positive legacy
whilst creating value for all stakeholders and I look forward to our progress
in delivering this as we continue to build Keras and Diamond Creek into the
premier organic phosphate producer in the US.
Russell Lamming
Chairman
27 September 2022
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2022
6 months to 30-Jun-22 6 months to 6 months to 30-Sep-21 15 months to 31-Dec-21
(unaudited) 31-Mar-21 (unaudited) (audited)
£'000 (unaudited) £'000 £'000
£'000
Continuing operations
Revenue 212 31 311 452
Cost of production (104) (74) (229) (496)
Gross profit/loss 108 (43) 82 (44)
Administrative and exploration expenses (550) (517) (426) (1,448)
Loss from operating activities (442) (560) (344) (1,492)
Finance income - - - -
Finance costs (25) - (1) (43)
Net finance costs (25) - (1) (43)
Share of net loss of associate accounted for using the equity method
- - - (116)
Loss on change of ownership - - - (363)
Loss before taxation (467) (560) (345) (2,014)
Taxation - - - -
Loss for the period (467) (560) (345) (2,014)
Other comprehensive income - items that may be subsequently reclassified to
profit or loss
Exchange translation on foreign operations 53 (47) 108 66
Total comprehensive (loss) for the period (414) (607) (237) (1,948)
(Loss)/profit attributable to:
Owners of the Company (470) (497) (382) (1,729)
Non-controlling interests 3 (63) 37 (285)
(Loss)/profit for the period (467) (560) (345) (2,014)
Total comprehensive income/(loss) attributable to:
Owners of the Company (414) (556) (268) (1,670)
Non-controlling interests - (51) 31 (278)
Total comprehensive loss for the period (414) (607) (237) (1,948)
Earnings per share - continuing operations
Basic and diluted (loss)/earnings per share (pence)
(0.015) (0.017) (0.006) (0.033)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 7 4,875 3,637 4,282 4,606
Property, plant and equipment 8 591 493 691 554
Right of use asset 9 185 - - 215
5,651 4,130 4,973 5,375
Current assets
Inventory 10 484 135 245 273
Trade and other receivables 11 115 391 243 94
Cash and cash equivalents 440 886 299 166
1,039 1,412 787 533
Total assets 6,690 5,542 5,760 5,908
Equity
Equity attributable to owners of the Company
Share capital 12 798 629 629 630
Share premium 12 5,838 4,027 4,027 4,033
Other reserves 173 68 95 111
Retained deficit (2,885) (590) (878) (1,721)
3,924 4,134 3,873 3,053
Non-controlling interests (133) 934 965 229
Total equity 3,791 5,068 4,838 3,282
Liabilities
Current liabilities
Trade and other payables 13 1,423 474 922 1,658
Lease liabilities - current 9 120 - - 107
1,543 474 922 1,765
Non-current liabilities
Trade and other payables 13 1,293 - - 749
Lease liabilities - non-current 9 63 - - 112
1,356 - - 861
Total liabilities 2,899 474 922 2,626
Total equity and liabilities 6,690 5,542 5,760 5,908
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDING 31 MARCH 2021
Total attributable to owners of the Company
Share option/ Retained earnings/ (deficit) Total Non-controlling interests £'000
warrant reserve Financial assets at FVOCI £'000 £'000
Share capital £'000 Share premium £'000 Exchange reserve £'000 Total
£'000 £'000 equity
£'000
Balance at 1 October 2020 (audited) 487 2,637 63 (47) - 8 3,148 (140) 3,008
Loss for the period - - - - - (497) (497) (63) (560)
Other comprehensive income - - - 42 - (101) (59) 12 (47)
Total comprehensive loss for the period - - 42 - (598) (556) (51) (607)
Issue of ordinary shares 142 1,463 - - - - 1,605 - 1,605
Issue costs - (73) - - - - (73) - (73)
Non-controlling interest on acquisition of subsidiary
- - - - - - - 1,125 1,125
Share based payment transactions - - 10 - - - 10 - 10
142 1,390 10 - - - 1,542 1,125 2,667
Balance at 31 March 2021 (unaudited) 629 4,027 73 (5) - (590) 4,134 934 5,068
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
Total attributable to owners of the Company
Share option/
warrant reserve Retained earnings/ (deficit) Non-controlling interests
Share capital £'000 Share premium £'000 Exchange reserve Financial assets at FVOCI £'000 £'000 £'000 Total
£'000 £'000 Total equity
£'000 £'000
Balance at 1 April 2021 (unaudited) 629 4,027 73 (5) - (590) 4,134 934 5,068
Loss for the period - - - - - (382) (382) 37 (345)
Other comprehensive income - - - 20 - 94 114 (6) 108
Total comprehensive loss for the period - - 20 - (288) (268) 31 (237)
Issue of ordinary shares - - - - - - - - -
Issue costs - - - - - - - - -
Non-controlling interest on acquisition of subsidiary -
- - - - - - - -
Share based payment transactions - - 7 - - - 7 - 7
- - 7 - - - 7 - 7
Balance at 30 September 2021 (unaudited) 629 4,027 80 15 - (878) 3,873 965 4,838
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED 31 DECEMBER 2021
Total attributable to owners of the Company
Share option/
warrant reserve Financial assets at FVOCI Retained Earnings/ (deficit) Non-controlling interests £'000
Share capital Share premium £'000 Exchange reserve £'000 £'000 Total
£'000 £'000 £'000 Total equity
£'000 £'000
Balance at 1 October 2021 (unaudited) 629 4,027 80 15 - (878) 3,873 965 4,838
Loss for the period - - - - - (850) (850) (259) (1,109)
Other comprehensive income - - - (4) - 7 3 2 5
Total comprehensive income for the period - - - (4) - (843) (847) (257) (1,104)
Issue of ordinary shares 1 6 - - - - 7 - 7
Issue costs - - - - - - - - -
Non-controlling interest on acquisition of subsidiary - - - - - - - (479) (479)
Share based payment transactions - - 20 - - - 20 - 20
1 6 20 - - - 27 (479) (452)
Balance at 31 December 2021 (audited) 630 4,033 100 11 - (1,721) 3,053 229 3,282
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Total attributable to owners of the Company
Share option/
warrant reserve Financial assets at FVOCI Non-controlling interests
Share capital Share premium £'000 Exchange reserve £'000 Retained earnings £'000 Total
£'000 £'000 £'000 £'000 Total equity
£'000 £'000
Balance at 1 January 2022 (audited) 630 4,033 100 11 - (1,721) 3,053 229 3,282
Loss for the period - - - - - (470) (470) 3 (467)
Total other comprehensive income - - - 56 - - 56 (3) 53
Total comprehensive loss for the period - - - 56 - (470) (414) - (414)
Issue of ordinary shares 168 1,845 - - - - 2,013 - 2,013
Issue costs - (40) - - - - (40) - (40)
Acquisition of NCI without a change in control (note 15)
- - - - - (694) (694) (362) (1,056)
Share based payment transactions - - 6 - - - 6 6
168 1,805 6 - - (694) 1,285 (362) 923
Balance at 30 June 2022 (unaudited) 798 5,838 106 67 - (2,885) 3,924 (133) 3,791
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
31-Jun-22 31-Mar-21 30-Sep-21 31 -Dec-21
(unaudited) (unaudited) (unaudited) (audited)
£'000 £'000 £' 000 £'000
Cash flows from operating activities
Loss from operating activities (467) (560) (345) (2,014)
Adjustments for:
Depreciation and amortisation 99 18 17 172
Share of loss of equity accounted associate - 71 116
Loss on disposal of property, plant and - - - -
equipment
Foreign exchange differences (356) 117 124 73
Equity-settled share-based payment transactions 6 10 7 37
(718) (344) (197) (1,616)
Changes in:
- inventories (211) 7 (110) (216)
- trade and other receivables (21) (186) 148 111
- trade and other payables (747) 45 448 540
Cash used in operating activities (1,697) (478) 289 (1,181)
Finance costs - - - -
Net cash used in operating activities (1,697) (478) 289 (1,181)
Cash flows from investing activities
Cash acquired on acquisition - 158 - 158
Acquisition of property, plant and equipment - (93) (209) (188)
Exploration and licence expenditure (2) (161) (667) (538)
Investment in associate to date of control - (455) - -
Net cash used in investing activities (2) (551) (876) (568)
Cash flows from financing activities
Net proceeds from issue of share capital 1,973 1,477 - 1,477
Loans (to)/repaid by subsidiaries - - - -
Net cash flows from financing activities 1,973 1,477 - 1,477
Net (decrease)/increase in cash and cash equivalents 274 448 (587) (272)
Cash and cash equivalents at beginning of period 166 438 886 438
Effect of foreign exchange rate changes - - -
Cash and cash equivalents at end of period 440 886 299 166
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
1. Reporting entity
Keras Resources plc (the "Company") is a company domiciled in England and
Wales. The unaudited condensed consolidated interim financial statements of
the Company as at and for the six months ended 30 June 2022 comprise the
Company and its subsidiaries (together referred to as the "Group") and the
Group's interests in associates and jointly controlled entities. The Group
currently operates as an explorer and developer.
2. Basis of preparation
(a) Statement of compliance
This condensed consolidated interim financial report has been prepared in
accordance with IAS 34 Interim Financial Reporting. Selected explanatory notes
are included to explain events and transactions that are significant to an
understanding of the changes in financial performance and position of the
Group since the last consolidated financial statements as at and for the
period ended 31 December 2021. This condensed consolidated interim financial
report does not include all the information required for full annual financial
statements prepared in accordance with International Financial Reporting
Standards.
This condensed consolidated interim financial report was approved by the Board
of Directors on 27 September 2022.
(b) Judgements and estimates
Preparing the interim financial report 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 expense.
Actual results may differ from these estimates.
In preparing this condensed consolidated interim financial report, significant
judgements made by Management in applying the Group's accounting policies and
key sources of estimation uncertainty were the same as those that applied to
the audited consolidated financial statements as at and for the period ended
31 December 2021.
3. Significant accounting policies
The accounting policies applied by the Group in this condensed consolidated
interim financial report are the same as those applied by the Group in its
audited consolidated financial statements as at and for the period ended 31
December 2021.
4. Financial instruments
Financial risk management
The Group's financial risk management objectives and policies are consistent
with those disclosed in the audited consolidated financial statements as at
and for the period ended 31 December 2021.
5. Segment information
The Group considers that it operates in two distinct business areas, manganese
mining in West Africa and phosphate mining in Utah, USA. These business
areas form the basis of the Group's operating segments. For each segment,
the Group's CEO (the chief operating decision maker) reviews internal
management reports on at least a quarterly basis.
Other operations relate to the group's administrative functions conducted at
its head office and by its intermediate holding company together with
consolidation adjustments.
Information regarding the results of each reportable segment is included
below. Performance is measured based on segment profit before tax, as
included in the internal management reports that are reviewed by the Group's
CEO. Segment results are used to measure performance as Management believes
such information is the most relevant in evaluating the performance of certain
segments relative to other entities that operate within the exploration
industry.
Information about reportable segments
For the six months ended 30 June 2022 (unaudited)
Other operations
Manganese Phosphate £'000 Total
£'000 £'000 £'000
External revenue - 212 - 212
Profit/(loss) before tax 22 9 (498) (467)
Segment assets 1,228 4,744 718 6,690
For the six months ended 31 March 2021 (unaudited)
Other operations
Manganese Phosphate £'000 Total
£'000 £'000 £'000
External revenue - 31 - 31
Loss before tax (60) (110) (390) (560)
Segment assets 1,082 2,958 1,502 5,542
For the six months ended 30 September 2021 (unaudited)
Other operations
Manganese Phosphate £'000 Total
£'000 £'000 £'000
External revenue - 311 - 311
Profit/(loss) before tax (52) 20 (313) (345)
Segment assets 1,076 4,036 648 5,760
For the three months ended 31 December 2021 (audited)
Other operations
Manganese Phosphate £'000 Total
£'000 £'000 £'000
External revenue - 109 - 109
Profit/(loss) before tax 52 (479) (682) (1,109)
Segment assets 1,535 4,229 144 5,908
Information about geographical segments:
For the six months ended 30 June 2022 (unaudited)
Other operations £'000
West Africa £'000 US Total
£'000 £'000
External revenue - 212 - 212
Profit/(loss) before tax 22 9 (498) (467)
Segment assets 1,228 4,744 718 6,690
For the six months ended 31 March 2021 (unaudited)
Other operations
West Africa US £'000 Total
£'000 £'000 £'000
External revenue - 31 - 31
Loss before tax (60) (110) (390) (560)
Segment assets 1,082 2,958 1,502 5,542
For the six months ended 30 September 2021 (unaudited)
Other operations
West Africa US £'000 Total
£'000 £'000 £'000
External revenue - 311 - 311
Profit/(loss) before tax (52) 20 (313) (345)
Segment assets 1,076 4,036 648 5,760
For the three months ended 31 December 2021 (audited)
Other operations
West Africa US £'000 Total
£'000 £'000 £'000
External revenue - 109 - 109
Profit/(loss) before tax 52 (479) (682) (1,109)
Segment assets 1,535 4,229 144 5,908
6. Seasonality of operations
Mining at Falcon Isle takes place between May and November due to winter snow
cover at the mine site and on the approach road. The fertiliser produced is
used primarily during the planting and growing seasons, but sales by Falcon
Isle take place throughout the year.
7. Intangible assets
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(Unaudited) (unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000
Cost
Balance at beginning of period 4,643 1,227 3,637 1,227
Additions 3 2,629 607 3,584
Disposals - (158) - (158)
Effect of movement in exchange rates 298 (61) 38 (10)
Balance at end of period 4,944 3,637 4,282 4,643
Impairment losses
Balance at beginning of period 37 158 - 158
Impairment 26 - - -
Amortisation - - 37
Disposals (158) - (158)
Effect of movement in exchange rates 6 - - -
Balance at end of period 69 - - 37
Carrying amounts
Balance at end of period 4,875 3,637 4,282 4,606
Balance at beginning of period 4,606 1,069 3,637 1,069
Intangible assets comprise the fair value of prospecting and exploration
rights.
8. Property, plant and equipment
Acquisitions and disposals
During the six months ended 30 June 2022 the Group acquired assets with a cost
of £nil (six months ended 31 March 2021: £263,000, six months ended 30
September 2021: £209,000, three months ended 31 December 2021: (£112,000)).
No assets were disposed of during the six months ended 30 June 2022 or any
comparative period.
9. Right of use asset
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000
Balance at beginning of period 215 - - -
Additions - - - 314
Depreciation (66) - - (99)
Effects of movements in exchange rates 36 - - -
185 - - 215
Lease liability
£'000 £'000 £'000 £'000
Balance at beginning of period 219 - - -
Additions - - - 314
Principal reduction (64) - - (105)
Finance cost 5 - - 10
Effects of movements in exchange rates 23 -
183 - - 219
Current portion 120 - - 107
Non current portion 63 - - 112
183 - - 219
10. Inventories
30-Jun-22 31-Mar-21 (unaudited) 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000
Phosphate 484 135 245 273
484 135 245 273
11. Trade and other receivables
30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000
Trade receivables - - - 7
Other receivables 95 352 226 87
Prepayments 20 39 17 -
115 391 243 94
Trade receivables and other receivables are stated at their nominal values
less allowances for non-recoverability.
12. Share capital and reserves
Ordinary shares
On 26 April 2022 the Company announced the raising of a total
of £1,950,000 (before expenses) by the issue of 1,625,000,000 new ordinary
shares of 0.01p each ("Ordinary Shares") at a price of 0.12p per share. On 4
May 2022 1,000,000,000 new Ordinary Shares were issued for cash consideration
to raise £1,200,000 and the balance of 625,000,000 new Ordinary Shares were
issued on 18 May 2022 through a Broker Option following approval at a General
Meeting of the company held on 16 May 2022. In addition, a further 52,500,000
new Ordinary shares were issued on 18 May 2022 at a price of 0.12p per share
in settlement of liabilities.
Each of the 1,677,500,000 new Ordinary Shares issued had attached a warrant
entitling the registered holder to subscribe for one new Ordinary Share at a
price of 0.18p at any time up to 31 May 2024.
Subsequent to 30 June 2022, following approval at a General Meeting of the
company held on 25 July 2022, the Ordinary Shares were consolidated on the
basis that every 100 Ordinary Shares were be consolidated into 1 ordinary
share of 1p ("Consolidated Ordinary Share"). Following the consolidation, the
Company's issued share capital comprises 79,735,731 Consolidated Ordinary
Shares. The subscription rights of the warrants referred to above were varied
accordingly.
Dividends
No dividends were declared or paid in the six months ended 30 June 2022 (six
months ended 31 March 2021: £nil, six months ended 30 September 2021: £nil,
three months ended 31 December 2021: £nil)).
13. Trade and other payables
Current 30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000
Trade payables 401 146 567 962
Accruals 210 230 249 93
Amounts due to Falcon Isle' minority interest - - - 593
Other payables 814 98 106 11
1,425 474 922 1,658
Non-current 30-Jun-22 31-Mar-21 30-Sep-21 31-Dec-21
(unaudited) (unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000
Amounts due to Falcon Isle' minority interest - - - 749
Other payables 1,293 - - -
1,293 - - 749
There is no material difference between the fair value of trade and other
payables and their book value.
14. Acquisition of non-controlling interest ("NCI") in Falcon Isle
In March 2022, the Group agreed to acquire the outstanding 49% equity interest
in Falcon Isle, together with loans totalling $1,816,527 made by the vendor to
Falcon Isle for total consideration of $3.2 million payable in four annual
tranches of $800,000 commencing on 1 July 2022. The first payment was made
on 30 June 2022., The second payment, due by 1 July 2023, has been treated as
a current liability and is included in other payables. The final two
instalments have been treated as non-current liabilities.
The following table summarises the effect of changes in the Company's
ownership interest in Falcon Isle.
£'000
Carrying amount of NCI acquired 362
Consideration less value of loan acquired 1,056
694
The decrease in equity attributable to the owners of the Company comprised:
- A decrease in retained earnings of £694,000.
15. Related parties
The total amount due to Dave Reeves at the period end was £2,000 in respect
of unpaid remuneration (six months ended 31 March 2021: £43,000, six months
ended 30 September 2021: £55,000, fifteen months ended 31 December 2021:
£25,000).
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