REG - Metals Exploration - Interim Results for six months ended 30 June 2024
23/09/2024 07:00
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RNS Number : 1201F Metals Exploration PLC 23 September 2024
METALS EXPLORATION PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or,
together with its subsidiaries the "Group"), a gold producer in the
Philippines, announces its unaudited interim results for the six months ended
30 June 2024. The results will be made available on the Company's website at
www.metalsexploration.com (http://www.metalsexploration.com) .
Highlights
· H1 2024 profit before tax of US$58.4 million (H1 2023: US$37.0
million);
· H1 2024 earnings before tax, interest, depreciation, amortization
and impairment charges US$47.1 million (H1 2023: US$43.0 million)
· H1 2024 gold production of 42,535 ounces (H1 2023: 45,533
ounces);
· H1 2024 gold recoveries of 89.6% (H1 2023: 89.8%);
· H1 2024 positive free cash flow of US$46.4 million (H1 2023:
US$41.9 million);
· Over 23 million man-hours since the last reported lost-time
injury;
· Announcement of off-market buy-back of Runruno Holdings Limited's
18.6% shareholding - to be completed by the end of Q3 2024;
· Debt free status confirmed with all debt disputes resolved and
cash on hand of US$6.6 million as at 30 June 2024; and
· Acquisition of the YMC group interest completed post period-end.
Production Summary
Runruno Project
Production Summary Actual Actual Actual
Units 6 Months to 6 Months to 12 Months to
30 June 2024 30 June 2023 31 December 2023
Mining
Ore Mined Tonnes 1,172,930 848,023 1,949,654
Waste Mined Tonnes 4,849,036 5,385,929 10,412,735
Total Mined Tonnes 6,021,966 6,233,952 12,362,398
Au Grade Mined g/tonne 1.37 1.59 1.47
Strip Ratio 4.07 6.08 5.03
Processing
Ore Milled Tonnes 1,099,159 1,068,391 2,104,207
Gold (Au) Grade g/tonne 1.34 1.48 1.42
Sulphur Grade % 1.35 1.41 1.36
Au Milled (contained) ounces 47,489 50,701 96,068
Recovery % 89.6 89.8 88.7
Au Poured ounces 42,535 45,533 85,194
Sales
Au Sold ounces 41,589 46,186 85,744
Au Price US$/oz 2,190 1,939 1,944
Corporate
Buy-back of RHL shares
On 20 June 2024 the Company agreed to purchase the entire shareholding of
Runruno Holdings Limited ("RHL"), being 393,513,302 ordinary shares of
£0.0001 each in the capital of the Company ("Ordinary Shares") (the "RHL
Shares") over three tranches and at a price of 5 pence per share, by means of
an off-market buy back (the "Buy Back"). At a General Meeting of shareholders
on 23 August 2024 the Buy Back of RHL's 18.6% interest in the Company was
approved.
The Buy Back price of 5 pence per share was agreed by the Company and RHL at a
date during negotiations of the Buy Back, based on the 30-day trailing volume
weighted average market price at that date. The tranches of the Buy Back are:
· 203,640,000 RHL Shares acquired on 2 September 2024;
· 94,936,651 RHL Shares acquired on 2 September 2024; and
· 94,936,651 RHL Shares to be acquired by no later than 30
September 2024.
The aggregate consideration for the Buy Back is £19,675,665. All shares
acquired from RHL will initially be held in treasury, until either cancelled
or re-issued. Shares held in treasury have no voting rights. Following
completion of the first tranche of the Buy Back, the relationship agreement
with RHL was terminated.
Production fee and termination of Revolving Credit Facility ("RCF")
In conjunction with entering into the Buy Back agreement, the Group agreed to
a production fee agreement with RHL. The Group has agreed to pay RHL a
production fee of US$164 per ounce of gold produced at the Runruno contract
area on any production that exceeds 204,269 ounces of gold from 1 May 2024
(being approximately 105% of the current forecast gold production from such
date, based upon the Group's life of mine plan for the Runruno mine). Any such
production fee due would be paid quarterly in arrears. Following completion of
the first tranche of the Buy Back, the RCF was terminated with no early
termination fee payable to either RHL or MTL Luxembourg S.a.r.l ("MTL Lux").
Debt settlement
The Company completed various agreements with its lenders, also in June 2024,
that resolved all debt disputes including the payment of the final agreed
principal/interest and applicable lender legal fees for both the senior and
mezzanine debt, confirming that the Group is now debt free.
YMC Acquisition
At the General Meeting on 23 August 2024, shareholders also approved the
completion of a share purchase agreement, to acquire a controlling interest in
the Yamang Mineral Corporation group (the "YMC Group"). The aggregate
consideration payable by the Company to the YMC Group shareholders was US$1.6
million in cash and the issue of options to subscribe for up to 41 million new
Ordinary Shares at an exercise price equal to nominal value. This acquisition
was completed on 27 August 2024. Refer to the announcement dated 28 August
2024.
Additional Option Issue
At the Annual General Meeting, shareholders approved the issue of 6.6 million
options to subscribe for new Ordinary Shares at an exercise price equal to
nominal value, to the independent non-executive chairman.
Exercise of Options
During H1 2024, the Company issued 19,800,000 new Ordinary Shares at an issue
price of £0.0001 to certain non-executive directors/ex-directors following
the exercise of options.
Review of Runruno Gold Mine Operations
Safety and health
The outstanding safety record at Runruno continues with in excess of 23
million man-hours with no lost time incidents occurring since the last lost
time incident in December 2016. This is something the Company is incredibly
proud of, and all employees and contractors are to be congratulated on this
ongoing achievement.
Finance
Gold sales were 41,589 oz for revenues of US$91.1 million (H1 2023 46,186 oz
for revenues of US$89.6 million) at an average price of US$2,190 per oz (H1
2023 US$1,939 per oz), resulting in positive free cash flow of US$46.4 million
(H1 2023: US$41.9 million).
During H1 2024, the Group resolved all debt related disputes confirming that
the Group is debt free. Total debt repayments made during H1 2024 were US$27.2
million (H1 2023: US$35.0 million).
Mining
Mining production of ore and waste was slightly down at 6.0Mt for H1 2024 (H1
2023: 6.2Mt). Total ore mined was slightly higher at 1.2Mt (H1 2023: 0.8Mt),
at a lower grade of 1.37g/t (H1 2023: 1.59g/t).
Process plant
Stable operations were delivered during H1 2024, leading to gold production of
42,535 ounces (H1 2023: 45,533 ounces). Throughput for H1 2024 was on budget
at 1.10Mt (H1 2023: 1.07Mt) with a lower head grade of 1.34g/t (H1 2023:
1.48g/t) resulting in slightly lower levels of production
Efforts to gain marginal gold recovery improvements continue with an excellent
average overall gold recovery rate of 89.6% achieved (H1 2023: 89.8%).
Unplanned process plant downtime during H1 2024 did not materially interrupt
production and consisted mainly of power interruptions, pump changeovers as
well as repairs to the return discharge line ("RDL") and final tails line,
conveyor belts, rollers and trommel panel screens.
Residual Storage Impoundment ("RSI")
The RSI is operating to design with an excellent environmental performance
record. Stage 6 RSI lift was completed in H1 2024, and the dam water freeboard
remained well within design limits.
Construction of the RSI final in-rock spillway continues, albeit slightly
behind schedule. The day-to-day performance of the RSI, including the
construction of the final in-rock spillway, is continuously monitored by an
independent international consulting group.
Community & Government Relations
Productive relations with both the community and the Philippine government
continue.
YMC Group Update
As noted above, the acquisition of the YMC Group was completed on 27 August
2024. The YMC Group holds a majority and controlling interest in a highly
prospective exploration licence covering 16,200 hectares on Luzon,
Philippines, approximately 200km north of the Company's Runruno mine, in the
Cordillera region, which is a prolific gold belt in the Philippines, with
proven mineral endowment, having produced over 40Moz of gold historically. The
Company has undertaken initial geophysics and geochemistry activities over
this project area (known as the Abra project) as a prelude to designing an
exploration drill programme. It is expected that drilling of initial targets
will commence in Q4 2024.
Darren Bowden, CEO of Metals Exploration, commented:
"The first half of 2024 has been transformational for the Company.
Operationally Runruno has continued to perform strongly whilst the corporate
actions taken will provide a platform for the future growth of the Company.
"In January the Company announced the acquisition the YMC Group, which
completed in August, and which the Company believes holds some highly
prospective exploration acreage; with our first drill campaign of this
prospect expected in Q4 2024. In addition to this, the strong performance at
Runruno has enabled the Company to gain debt free status, resolving all debt
disputes. This is a very significant achievement considering the historical
debt levels of the recent past. This accomplishment will ensure that the
Company has more than ample firepower to progress the Company's assets whilst
continuing to seek further appropriate acquisition opportunities. The final
piece of the jigsaw in the first half of the year, again approved in August,
was the off-market buy-back of RHL's shareholding (to be completed by the end
of September 2024); removing a number of corporate and operational
restrictions that have previously been placed on the team and will ensure
management has the opportunity to deliver the Company's growth strategy.
"The Company enters the second half of the year in an incredibly strong
position, and is greatly looking forward to commencing initial drilling at YMC
and providing further updates across all our operations."
For further information please visit or contact www.metalsexploration.com
(http://www.metalsexploration.com)
Metals Exploration PLC
Via Tavistock Communications Limited +44 (0) 207 920 3150
Nominated & Financial Adviser: STRAND HANSON LIMITED
James Spinney, James Dance, Rob Patrick +44 (0) 207 409 3494
Financial Adviser & Broker: HANNAM & PARTNERS
Matt Hasson, Franck Nganou +44 (0) 207 907 8500
Public Relations: TAVISTOCK COMMUNICATIONS LIMITED
Jos Simson, Nick Elwes +44 (0) 207 920 3150
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME for the six
months ended 30 June 2024
Notes 6 month period ended 30 June 2024 (unaudited) 6 month period ended Year ended
30 June 2023 (unaudited) 31 December 2023 (audited)
US$ US$ US$
Continuing Operations
Revenue 91,085,493 89,551,687 166,682,876
Cost of sales (73,353,868) (53,677,981) (129,422,805)
Gross profit 17,731,625 35,873,706 37,260,071
Administrative expenses (5,598,788) (4,758,815) (8,086,753)
Operating profit 12,132,837 31,114,891 29,173,318
Impairment reversal 7 49,712,946 8,846,685 97,737,620
Net finance and other costs (696,536) (2,930,501) (7,310,461)
Provision for loss on derivatives (2,716,439) (57,800) (29,759)
Share based payment expense (5,313) (21,814) (31,368)
Share of (loss)/ profit of associates (4,645) 3,021 15,970
Profit before tax 58,422,850 36,954,482 119,555,320
Tax benefit/(expense) 63,576 4,141 (306,582)
Profit for the period attributable to equity holders of the parent 58,486,426 36,958,623 119,248,738
Other comprehensive income:
Items that may be re-classified subsequently
to profit or loss:
Exchange differences on translating foreign operations (749,907) (660,052) (3,479,370)
Items that will not be re-classified subsequently
to profit or loss:
Re-measurement of pension liabilities - - 222,909
Total comprehensive profit for the period attributable to equity holders of 57,736,519 36,298,571 115,992,277
the parent
Earnings per share:
Basic cents per share 6 2.78 1.77 5.70
Diluted cents per share 6 2.78 1.75 5.64
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
as at 30 June 2024
Notes 30 June 2024 (Unaudited) 30 June 2023 (Unaudited) 31 December 2023 (Audited)
US$ US$ US$
Non-current assets
Property, plant and equipment 7 155,968,686 84,395,285 140,597,506
Other intangible assets - 467,179 7,664
Investment in associate companies 116,736 108,432 121,381
Trade and other receivables 19,807,825 12,616,843 16,720,701
175,893,247 97,587,739 157,447,252
Current assets
Inventories 20,795,474 19,471,994 18,695,048
Trade and other receivables 9,950,924 7,640,051 5,000,515
Cash and cash equivalents 6,578,641 490,207 339,997
37,325,039 27,602,252 24,035,560
Non-current liabilities
Trade and other payables (70,850) (1,247,303) (70,850)
Retirement benefits obligations (2,471,289) (2,463,112) (2,471,289)
Provision for loss on derivatives (361,400) - -
Deferred tax liabilities (481,120) (574,038) (544,697)
Provision for mine rehabilitation (4,161,553) (3,781,339) (4,145,567)
(7,546,212) (8,065,792) (7,232,403)
Current liabilities
Trade and other payables (11,284,917) (13,210,650) (16,063,666)
Loans - current portion 8 - (49,301,270) (23,896,298)
Provision for loss on derivatives (2,709,923) (382,920) (357,546)
(13,994,840) (62,894,840) (40,317,510)
Net assets 191,677,234 54,229,359 133,932,899
Equity
Share capital 9 285,286 282,503 282,783
Share premium account 9 144,350 144,350 144,350
Acquisition of non-controlling interest reserve (5,107,515) (5,107,515) (5,107,515)
Translation reserve 10,191,724 13,760,949 10,941,631
Re-measurement reserve (249,740) (472,649) (249,740)
Other reserves 149,664 1,661,734 144,351
Profit and loss account 186,263,465 43,959,987 127,777,039
Equity attributable to equity holders of the parent 191,677,234 54,229,359 133,932,899
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six
months ended 30 June 2024
Share capital Share premium account Acquisition of non-controlling interest reserve Translation reserve Re-measurement reserve Profit and loss account Total equity
Other reserve
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2024 282,783 144,350 (5,107,515) 10,941,631 (249,740) 144,351 127,777,039 133,932,899
Exchange differences on translating foreign operations - - - (749,907) - - - (749,907)
Profit for the period - - - - - - 58,486,426 58,486,426
Total comprehensive (loss)/profit for the period - - - (749,907) - - 58,486,426 57,736,519
Share based payment - - - - - 5,313 - 5,313
Equity issue 2,503 - - - - - - 2,503
Balance at 30 June 2024 285,286 144,350 (5,107,515) 10,191,724 (249,740) 149,664 186,263,465 191,677,234
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued.
· Share premium account; being the excess received over the nominal
value of shares issued less direct issue costs.
· Acquisition of non-controlling interests reserve; being amounts
recognised on acquiring additional equity in a controlled subsidiary.
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries.
· Re-measurement reserve; being the cumulative actuarial gains and
losses, return on plan assets and changes in the effect of the asset ceiling
(excluding net interest on defined benefit liability) recognised in the
statement of total comprehensive income.
· Other reserves; being the cumulative share-based payments
expense.
· Profit and loss account; being the cumulative profit attributable
to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six
months ended 30 June 2023
Share capital Share premium account Acquisition of non-controlling interest reserve Translation reserve Re-measurement reserve Profit and loss account Total equity
Other reserve
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2023 281,638 - (5,107,515) 14,421,001 (472,649) 1,639,920 7,001,364 17,763,759
Exchange differences on translating foreign operations - - - (660,052) - - - (660,052)
Profit for the period - - - - - - 36,958,623 36,958,623
Total comprehensive (loss)/profit for the period - - - (660,052) - - 36,958,623 36,298,571
Share based payment - - - - - 21,814 - 21,814
Equity issue 865 144,350 - - - - - 145,215
Balance at 30 June 2023 282,503 144,350 (5,107,515) 13,760,949 (472,649) 1,661,734 43,959,987 54,229,359
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued.
· Share premium account; being the excess received over the nominal
value of shares issued less direct issue costs.
· Acquisition of non-controlling interests reserve; being amounts
recognised on acquiring additional equity in a controlled subsidiary.
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries.
· Re-measurement reserve; being the cumulative actuarial gains and
losses, return on plan assets and changes in the effect of the asset ceiling
(excluding net interest on defined benefit liability) recognised in the
statement of total comprehensive income.
· Other reserves; being the cumulative fair value of warrants
associated with certain mezzanine debt facilities and share-based payments
expense.
· Profit and loss account; being the cumulative profit attributable
to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the year
ended 31 December 2023
Share capital Share premium account Acquisition of non-controlling interest reserve Translation reserve Re-measurement reserve Profit and loss account Total equity
Other reserve
US$ US$ US$ US$ US$ US$ US$ US$
281,638 - (5,107,515) 14,421,001 (472,649) 1,639,920 7,001,364 17,763,759
Balance at 1 January 2023
Exchange differences on translating foreign operations - - - (3,479,370) - - - (3,479,370)
Change in pension liability - - - - 222,909 - - 222,909
Profit for the year - - - - - - 119,248,738 119,248,738
Total comprehensive profit/(loss) for the period - - - (3,479,370) 222,909 - 119,248,738 115,992,277
Share based payments - - - - - 31,368 - 31,368
Share issue 1,145 144,350 - - - - - 145,495
Transfer of other reserve to profit and loss account - - - - - (1,526,937) 1,526,937 -
Balance at 31 December 2023 282,783 144,350 (5,107,515) 10,941,631 (249,740) 144,351 127,777,039 133,932,899
Equity is the aggregate of the following:
· Share capital; being the nominal value of shares issued.
· Share premium account; being the excess received over the nominal
value of shares issued less direct issue costs.
· Acquisition of non-controlling interests reserve; being amounts
recognised on acquiring additional equity in a controlled subsidiary.
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries.
· Re-measurement reserve; being the cumulative actuarial gains and
losses, return on plan assets and changes in the effect of the asset ceiling
(excluding net interest on defined benefit liability) recognised in the
statement of total comprehensive income.
· Other reserves; being the cumulative fair value of warrants
associated with certain mezzanine debt facilities and share-based payments
expense. Upon the expiry of the relevant warrants the cumulative fair value
of warrants was transferred to profit and loss account.
· Profit and loss account; being the cumulative profit attributable
to equity shareholders.
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT for the six months ended 30
June 2024
6 month period ended 6 month period ended Year ended
30 June 2024 (unaudited) 30 June 2023 (unaudited) 31 December 2023 (audited)
Note US$ US$ US$
74,561,379
Net cash arising from operating activities 8 36,988,492 39,838,746
Investing activities
Exploration expenses incurred (636,382) (449,477) -
Purchase of property, plant and equipment (2,869,853) (4,687,652) (10,250,030)
Net cash used in investing activities (3,506,235) (5,137,129) (10,250,030)
Financing activities
Repayment of borrowings - principal (23,896,298) (32,855,626) (61,430,747)
Repayment of borrowings - interest (3,338,575) (2,194,374) (3,369,253)
Share issue 2,503 - 280
Net cash used in financing activities (27,232,370) (35,050,000) (64,799,720)
Net increase/(decrease) in cash and cash equivalents (488,371)
6,249,887 (348,383)
Cash and cash equivalents at beginning of period 339,997 861,069 861,069
Effects of exchange rate changes on cash and cash equivalents (32,701)
(11,243) (22,479)
Cash and cash equivalents at end of period 6,578,641 490,207 339,997
Notes to the condensed consolidated interim financial statements
1. General information
These condensed consolidated interim financial statements of Metals
Exploration and its subsidiaries (the "Group") were approved by the Board of
Directors on 20 September 2024. Metals Exploration is the parent company of
the Group. Its shares are quoted on AIM market of the London Stock Exchange
plc. The registered address of Metals Exploration plc is 38 - 43 Lincoln's Inn
Fields, London, WC2A 3PE.
The condensed consolidated interim financial statements for the period 1
January 2024 to 30 June 2024 are unaudited. The group has chosen not to adopt
IAS 34 "Interim Financial Statements" in preparing the interim financial
information. The condensed consolidated interim financial statements
incorporate unaudited comparative figures for the interim period from 1
January 2023 to 30 June 2023 and the audited financial year ended 31 December
2023.
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory accounts for the year ended 31 December 2023, which were
prepared under UK-adopted international financial accounting standards, were
filed with the Registrar of Companies. The auditors reported on these accounts
and their report was unqualified and did not contain a statement under either
Section 498 (2) or Section 498 (3) of the Companies Act 2006.
2. Basis of preparation
The interim financial information in this report has been prepared using
accounting policies consistent with UK-adopted international accounting
standards. The financial information has been prepared based on UK-adopted
international accounting standards that the Board of Directors expect to be
applicable as at 31 December 2024.
These condensed consolidated interim financial statements have been prepared
under the historical cost convention, except for derivative financial
instruments, which are measured at fair value, and in accordance with
UK-adopted international accounting standards. There have been no changes in
accounting policies as described in the 2023 annual financial statements.
3. Going concern
These condensed consolidated interim financial statements of the Group have
been prepared on a going concern basis, which contemplates the continuity of
business activities, the realisation of assets and the settlement of
liabilities in the normal course of business.
The Group and its ability to operate as a going concern and to meet its
commitments as and when they fall due is dependent upon the ability of the
Group to operate the Runruno Project successfully to generate sufficient cash
flows to enable the Group to settle its liabilities as they fall due.
The Board of Directors believes that the Runruno Project will continue to
operate successfully and produce positive cash flows for at least 12 months
from the date of this interim report, being 20 September 2024. As a result,
the Board of Directors considers it appropriate that the half-year financial
information should be prepared on a going concern basis.
4. Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Group's medium term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Group's statutory accounts for the year ended 31 December 2023,
a copy of which is available on the Company's website:
https://metalsexploration.com/ (https://metalsexploration.com/) .
5. Critical accounting estimates
The preparation of condensed consolidated interim financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the end of the reporting period.
Significant items subject to such estimates are set out in Note 2 of the
Group's statutory accounts for the year ended 31 December 2023. The nature and
amounts of such estimates have not changed significantly during the interim
period.
6. Earnings per share
The earnings per share was calculated based on the net profit/(loss)
attributable to equity shareholders divided by the weighted average number of
Ordinary Shares.
6 month period ended 30 June 2024 6 month period ended 30 June 2023 Year ended 31 December 2023
(unaudited) (unaudited) (audited)
US$ US$ US$
Earnings
Net profit attributable to equity shareholders for the purpose of basic and 119,248,738
diluted earnings per share
58,486,426 36,958,623
Number of shares
Weighted average number of Ordinary Shares for the purpose of basic earnings 2,092,720,603
per share
2,101,371,744 2,089,230,821
Number of dilutive shares under warrant/option - 22,000,000 19,800,000
Weighted average number of Ordinary Shares for the purpose of diluted earnings 2,101,371,744 2,111,230,821 2,112,520,603
per share
Basic earnings cents per share 2.78 1.77 5.70
Diluted earnings cents per share 2.78 1.75 5.64
7. Impairment reversal
Property, plant and equipment ("PPE")
The Group considers that the entire Runruno project (encompassing capitalised
property, plant and equipment, mining licence costs, deferred exploration
expenditure and the provision for mine rehabilitation and decommissioning)
comprises a single cash generating unit ("CGU") as all stages of the project
are interdependent in terms of generating cash flow and do not have the
capacity to generate separate and distinct cash flow streams.
The Group assesses the recoverable amount of the Runruno project CGU based on
the value in use of the Runruno operations using cash flow projections over
the remaining expected life of mine ("LOM") and at appropriate discount rates.
Based on assumptions current as at 30 June 2024, in particular the ongoing
relatively high gold prices and the increased productivity of the Runruno
mine, the Group considered that the remaining balance of the 2018 impairment
of PPE be reversed.
Accordingly, and in accordance with IAS 36 -- Impairment of Assets, an
impairment credit has been raised in H1 2024 to increase the book value of the
PPE by US$50 million. This US$50 million impairment reversal, combined with
the US$100 million impairment reversal booked in the 2023 financial year, has
fully eliminated the 2018 PPE impairment charge. A consequence of these
impairment reversals is that the depreciation expense for H1 2024 has
increased to US$37.5 million from US$11.8 million in H1 2023.
8. Reconciliation of profit after tax
to net cash arising from operating activities
6 month period ended 30 June 2024 6 month period ended 30 June 2023 Year ended 31 December 2023
(unaudited) (unaudited) (audited)
US$ US$ US$
Profit after tax 58,486,426 36,958,623 119,248,738
Depreciation and amortisation 37,522,323 11,766,932 51,492,601
Provisions 2,713,777 57,800 29,759
Impairment (reversal)/charge (49,712,946) (8,846,685) (97,318,816)
Share of losses/(profits) of associates 4,645 (3,021) (15,970)
Share based payment expense 5,313 21,814 31,368
Shares issued in lieu of cash bonus - 145,215 145,215
Finance expenses 1,401,810 3,370,915 10,732,133
Foreign exchange (gain)/loss (694,061) (440,247) (2,642,249)
Exploration expenses 636,382 - -
(Increase)/decrease in receivables (9,074,493) (4,478,977) (10,048,701)
Decrease/(Increase) in inventories (2,100,426) 1,743,493 820,441
Increase/(Decrease) in payables (2,136,682) (457,118) 2,061,476
Net cash arising from operating activities 74,561,379
36,988,492 39,838,746
9. Loans
Finalisation of the Group's senior and mezzanine debt facilities was
protracted due to an inability to effect the elevation of the mezzanine debt
to a fully secured status due to a dispute over the applicable interest rate
and several disputed debt covenant breaches. During June 2024, the Group
entered into full and final settlements with the lenders, including payment of
the final principal/interest and agreed appropriate lender legal fees. These
agreements confirmed that the Group is debt free. Subsequently all lender
registered security has been released/withdrawn.
During H1 2024, total senior debt payments of US$2,817 (H1 2023: US$ Nil) were
made. During the H1 2024, total mezzanine debt payments of US$27.2 million
were made (H1 2023: US$35.0 million). Included in the US$27.2 million debt
payments was $3.38 million loan interest.
In addition, post period-end, the Revolving Credit Facility was terminated as
part of the RHL Buy Back and Production fee agreements, with no termination
fee payable to either RHL or MTL Lux.
The Group's debt balances are shown below:
June 2024 June 2023 December 2023
US$ US$ US$
Total loans due within one year - 49,301,270 23,896,298
10. Share capital
The Company issued 19,800,000 new Ordinary Shares at an issue price of
£0.0001 following the exercise of options in April and June 2024. In June
2023 the Company issued 7,147,850 new Ordinary Shares at an issue price of
£0.01679 in lieu of paying a cash bonus.
June 2024 June 2023 December 2023 June 2024 June 2023 December 2023
Number of shares Number of shares Number of shares US$ US$ US$
Ordinary shares of £0.0001 par value
Opening balance 2,098,144,271 2,088,796,421 2,088,796,421 282,783 281,638 281,638
Share issue in period 19,800,000 7,147,850 9,347,850 2,503 865 1,145
Closing balance 2,117,944,271 2,095,944,271 2,098,144,271 285,286 282,503 282,783
Share premium
Opening balance 144,350 - -
Share issue in period - 144,350 144,350
Closing balance 144,350 144,350 144,350
11. Contingent liabilities
The Group has no contingent liabilities identified as at 30 June 2024 (2023:
US$ nil).
12. Subsequent events
There have been no subsequent disclosable events other than:
· On 1 July 2024, the Company issued 6,600,000 options to acquire
new Ordinary Shares to a director.
· On 23 August 2024, at a general meeting, shareholders approved an
off-market buy-back of Ordinary Shares owned by Runruno Holdings Limited. The
Company has completed the acquisition of the first two tranches of RHL shares
being 298,576,651 shares at a total cost of £14.93 million. A final tranche
of 94,936,651 RHL shares is to be acquired before 30 September 2024 at a total
cost of £4.7 million. The shares acquired from RHL will initially be held, at
the directors' discretion, in treasury as non-voting shares; until either
cancelled or re-issued.
· On 23 August 2024, at a general meeting of shareholders the
Company entered into a future production fee agreement as part of an overall
settlement with Runruno Holdings Limited. As a result, the Revolving Credit
Facility with the Group's lenders terminated with no termination fee payable.
· Following shareholder approval at the 23 August 2024 general
meeting, the Company completed the acquisition of the controlling interests in
the Yamang Mining Corporation group by payment of US$1.6 million and the issue
of 41 million options to acquire MTL Ordinary Shares at an exercise price of
£0.0001.
· On 29 August 2024 the Company issued 3,785,446 new Ordinary
Shares at an issue price of £0.0353 in lieu of paying a cash bonus.
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