REG - Metals Exploration - Interim Results
27/09/2023 07:00
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RNS Number : 7458N Metals Exploration PLC 27 September 2023
METALS EXPLORATION PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023
Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or,
together with its subsidiaries the "Group"), a Philippine gold producer,
announces record interim results for the six months ended 30 June 2023. The
results will be made available on the Company's website at
www.metalsexploration.com (http://www.metalsexploration.com) .
Highlights
· Record half-year operating profit of US$31.1 million achieved (H1
2022: US$9.4 million) - up 231%;
· Record half-year gold production of 45,533 ounces (H1 2022:
31,348 ounces) - up 45%;
· Record half-year gold recoveries of 89.8% (H1 2022: 87.7%) - up
2.4%;
· Record half-year positive cashflow from operations of US$39.8
million (H1 2022: US$17.0 million) - up 134%;
· Net Debt as at 30 June 2023 US$48.8 million (H1 2022: US$92.9
million);
· Debt repayments during H1 2023 of US$35.0 million (H1 2022:
US$17.0 million);
· Over 20 million man-hours since the last reported lost-time
injury;
· FY2023 full year production forecast of between 78,000 and 81,000
ounces of gold, with AISC forecast to be between US$1,120 and US$1,200 per
ounce.
Production Summary
Runruno Project
Production Summary Actual Actual Actual
Units 6 Months to 6 Months to 12 Months to
30 June 2023 30 June 2022 31 December 2022
Mining
Ore Mined Tonnes 848,023 1,289,123 2,292,439
Waste Mined Tonnes 5,385,929 5,676,856 11,422,847
Total Mined Tonnes 6,233,952 6,965,979 13,715,286
Au Grade Mined g/tonne 1.59 1.10 1.31
Strip Ratio 6.08 4.28 4.89
Processing
Ore Milled Tonnes 1,068,391 1,017,258 2,068,031
Gold (Au) Grade g/tonne 1.48 1.09 1.27
Sulphur Grade % 1.41 0.98 1.36
Au Milled (contained) ounces 50,701 35,742 84,677
Recovery % 89.8 87.7 85.7
Au Poured ounces 45,533 31,348 72,537
Sales
Au Sold ounces 46,186 30,676 69,249
Au Price US$/oz 1,939 1,878 1,797
Review of Operations
During H1 2023 the Group enjoyed a sustained stable mine and process
operations. Higher grade ore from Stage 3 of the mine plan was accessed and
processed, which combined with record recoveries and consistently high prices
led to a record operating profit of US$31.1 million, up 231% on H1 2022.
Safety and health
The outstanding safety record of the operation continues with in excess of 20
million man-hours with no lost time incidents occurring since the last lost
time incident in December 2016. This is something we are incredibly proud of
and all employees and contractors are to be congratulated on this ongoing
achievement.
Finance
A higher head grade of 1.48g/t for H1 2023 (H1 2022: 1.09g/t) contributed to
the record gold production and sales revenue. Gold sales were US$89.6 million
(H1 2022 US$57.6 million). Operations resulted in positive free cash flow of
US$39.8 million (H1 2022: US$17.0 million).
As at H1 2023 end, the Group's net debt was US$48.8 million (H1 2022: US$92.9
million). Total debt repayments made during H1 2023 were US$35.0 million (H1
2022: US$17.0 million). Details of these debt facilities can be found in Note
6.
Mining
Mining production of ore and waste was slightly down at 6.2Mt for H1 2023 (H1
2022: 7.0Mt) due to diverting dump trucks to assist with the Residual Storage
Impoundment ("RSI") final spillway earthworks which commenced in Q1 2023.
Total ore mined was lower at 0.8Mt (H1 2022: 1.3Mt), however the grade mined
was up at 1.59g/t (H1 2022: 1.10g/t).
An exploration drill programme in Stages 4 and 5 commenced in Q1 2023, with
the objective of identifying new gold resources both in and near-to the
current pit-shell design. To date, this drilling has not produced any material
gold discoveries. The final holes in this drill programme should be completed
in early Q4 2023.
Process plant
Stable operations were delivered during H1 2023, leading to record gold
production of 45,533 ounces (H1 2022: 30,676 ounces). Throughput for H1 2023
of 1.07Mt (H1 2022: 1.02Mt) was on budget, while unfettered access to mine
plan Stage 3 and 4 provided an increased head grade of 1.48g/t (H1 2022:
1.09g/t).
Efforts to bring BIOX performance up to design continue, however ongoing
issues with controlling the temperature in the BIOX tanks continue.
Notwithstanding this a higher record overall gold recovery rate of 89.8% was
achieved (H1 2022: 87.7%).
Unplanned process plant downtime during H1 2023 was caused in the main by
tails line failures and conveyor belt and return water line repairs.
Residual Storage Impoundment
The RSI is operating to design with an excellent environmental performance
record. Construction of the final Stage 6 RSI lift was completed in H1 2023
and the dam water freeboard remained well within design limits.
Earthworks for the construction of the RSI final in-rock spillway are well
advanced and the day-to-day performance of the RSI is continuously monitored
by an independent international consulting group.
Community & Government Relations
Productive relations with both the community and the Philippine government
continue. In conjunction with relevant government agencies, the Company has
largely completed the removal of illegal miners, including their
infrastructure and dwellings, from mine plan Stages 4 and 5.
Corporate
In June 2023, the Company issued 7,147,850 new ordinary shares at an issue
price of £0.01679 (US$0.02032) to certain members of senior management in
lieu of a £120,012 (US$145,215) cash bonus.
Darren Bowden, CEO of Metals Exploration, commented:
"We are delighted with the Group's performance in the first half of 2023 which
has seen significant operational improvements and record performances at
Runruno, also enabling us to continue to reduce our debt substantially. We are
also very proud of our ongoing outstanding safety record as this is something
that is at the forefront of everything we do and is an incredible achievement
by all our employees and contractors.
The Company is well set for the remainder of the year as we look to continue
to deliver strong performances at Runruno across all our key metrics and hit
our target guidance for production and AISC for FY2023."
For further information please visit or contact www.metalsexploration.com
(http://www.metalsexploration.com)
Metals Exploration PLC
Via Tavistock Communications Limited +44 (0) 207 920 3150
Nominated & Financial Adviser: STRAND HANSON LIMITED
James Spinney, James Dance, Rob Patrick +44 (0) 207 409 3494
Financial Adviser & Broker: HANNAM & PARTNERS
Matt Hasson, Franck Nganou +44 (0) 207 907 8500
Public Relations: TAVISTOCK COMMUNICATIONS LIMITED
Jos Simson, Nick Elwes +44 (0) 207 920 3150
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME for the six
months ended 30 June 2023
Notes 6 month period ended 30 June 2023 (unaudited) 6 month period ended Year ended
30 June 2022 (unaudited) 31 December 2022 (audited)
US$ US$ US$
Continuing Operations
Revenue 89,551,687 57,621,936 124,410,991
Cost of sales (53,677,981) (42,493,529) (91,667,471)
Gross profit 35,873,706 15,128,407 32,743,520
Administrative expenses (4,758,815) (5,724,198) (8,924,926)
Operating profit 31,114,891 9,404,209 23,818,594
Impairment reversal/(loss) 5 8,846,685 (670,677) (1,202,397)
Net finance and other costs (2,930,501) (7,271,289) (13,765,824)
Loss on fair value changes to derivatives (57,800) (526,495) (4,883)
Share based payment expense (21,814) (75,698) (102,001)
Share of (loss)/ profit of associates 3,021 (2,729) (76,854)
Profit before tax 36,954,482 857,321 8,666,635
Tax expense 4,141 (75,255) 87,321
Profit for the period attributable to equity holders of the parent 36,958,623 782,066 8,753,956
Other comprehensive income:
Items that may be re-classified subsequently
to profit or loss:
Exchange differences on translating foreign operations (660,052) 40,020 (247,475)
Items that will not be re-classified subsequently
to profit or loss:
Re-measurement of pension liabilities - - (634,652)
Total comprehensive profit for the period attributable to equity holders of 36,298,571 822,086 7,871,829
the parent
Earnings per share:
Basic cents per share 4 1.77 0.04 0.42
Diluted cents per share 4 1.75 0.04 0.42
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
as at 30 June 2023
Notes 30 June 2023 (Unaudited) 30 June 2022 (Unaudited) 31 December 2022 (Audited)
US$ US$ US$
Non-current assets
Property, plant and equipment 5 84,395,285 88,810,504 81,459,218
Other intangible assets 467,179 49,743 33,049
Investment in associate companies 108,432 179,536 105,411
Trade and other receivables 12,616,843 5,572,524 8,796,133
97,587,739 94,612,307 90,393,811
Current assets
Inventories 19,471,994 22,136,388 21,215,487
Trade and other receivables 7,640,051 6,890,283 8,135,100
Cash and cash equivalents 490,207 288,439 861,069
27,602,252 29,315,110 30,211,656
Non-current liabilities
Loans 6 - (74,146,474) (51,983,413)
Trade and other payables (1,247,303) - (1,314,556)
Retirement benefits obligations (2,463,112) (1,871,640) (2,463,112)
Deferred tax liabilities (574,038) (880,935) (574,038)
Provision for mine rehabilitation (3,781,339) (4,031,740) (3,764,708)
(8,065,792) (80,930,789) (60,099,827)
Current liabilities
Trade and other payables (13,210,650) (12,791,908) (12,431,948)
Loans - current portion 6 (49,301,270) (18,711,883) (30,001,208)
Derivative liabilities (382,920) (805,124) (308,725)
(62,894,840) (32,308,915) (42,741,881)
Net assets 54,229,359 10,687,713 17,763,759
Equity
Share capital 7 282,503 27,952,353 281,638
Share premium account 7 144,350 196,118,890 -
Acquisition of non-controlling interest reserve (5,107,515) (5,107,515) (5,107,515)
Translation reserve 13,760,949 14,708,496 14,421,001
Re-measurement reserve (472,649) 162,003 (472,649)
Other reserves 1,661,734 1,613,617 1,639,920
Profit and loss account 43,959,987 (224,760,131) 7,001,364
Equity attributable to equity holders of the parent 54,229,359 10,687,713 17,763,759
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 loss attributable
to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six
months ended 30 June 2022
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 2022 27,950,217 195,855,125 (5,107,515) 14,668,476 162,003 1,537,919 (225,542,197) 9,524,028
Exchange differences on translating foreign operations - - - 40,020 - - - 40,020
Profit for the period - - - - - - 782,066 782,066
Total comprehensive (loss)/profit for the period - - - 40,020 - - 782,066 822,086
Share based payment - - - - - 75,698 - 75,698
Equity issue 2,136 263,765 - - - - - 265,901
Balance at 30 June 2022 27,952,353 196,118,890 (5,107,515) 14,708,496 162,003 1,613,617 (224,760,131) 10,687,713
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 loss attributable
to equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the year
ended 31 December 2022
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$
27,950,217 195,855,125 (5,107,515) 14,668,476 162,003 1,537,919 (225,542,197) 9,524,028
Balance at 1 January 2022
Exchange differences on translating foreign operations - - - (247,475) - - (247,475)
-
Change in pension liability - - - - (634,652) - - (634,652)
Profit for the year - - - - - - 8,753,956 8,753,956
Total comprehensive profit/(loss) for the period - - - (247,475) (634,652) - 8,753,956 7,871,829
Share based payments - - - - - 102,001 - 102,001
Share issue 2,136 263,765 - - - - - 265,901
Capital reduction (27,670,715) (196,118,890) - - - - 223,789,605 -
Balance at 31 December 2022 281,638 - (5,107,515) 14,421,001 (472,649) 1,639,920 7,001,364 17,763,759
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 loss attributable
to equity shareholders.
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT for the six months ended 30
June 2023
6 month period ended 6 month period ended Year ended
30 June 2023 (unaudited) 30 June 2022 (unaudited) 31 December 2022 (audited)
US$ US$ US$
Net cash arising from operating activities 38,189,947
39,838,746 17,037,683
Investing activities
Exploration expenses incurred (449,477) - -
Purchase of property, plant and equipment (4,687,652) (3,991,767) (8,227,773)
Net cash used in investing activities (5,137,129) (3,991,767) (8,227,773)
Financing activities
Repayment of borrowings - principal (32,855,626) (16,477,173)* (31,998,689)
Repayment of borrowings - interest (2,194,374) (522,827)* (1,824,311)
Net cash used in financing activities (35,050,000) (17,000,000) (33,823,000)
Net(decrease)/increase in cash and cash equivalents (3,860,826)
(348,383) (3,954,084)
Cash and cash equivalents at beginning of period 861,069 4,736,970 4,736,970
Foreign exchange difference (22,479) (494,447) (15,075)
Cash and cash equivalents at end of period 490,207 288,439 861,069
* Restated 30 June 2022 repayment of borrowings with a value of US$17 million
into its principal and interest elements to align with disclosures in the 2022
full year financial statements.
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 26 September 2023. 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 2023 to 30 June 2023 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 2022 to 30 June 2022 and the audited financial year ended 31 December
2022.
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 2022, 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 2023.
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 2022 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.
Although as at 30 June 2023, the Group's current liabilities continue to
exceed its current assets, primarily due to the estimated external borrowings
the Group expects to repay within the next 12 months, there is no obligation
to adhere to a set loan principal or interest repayment schedule.
The Group is not subject to any set principal or interest repayment schedule.
Excess free cashflow is required to be paid to lenders on a minimum quarterly
basis only when net working capital is in excess of US$5million. In addition,
the Group is not in default if it is unable to make a quarterly payment to the
lenders, but would continue to be obliged to pay out the excess free cash flow
as soon as possible. As a result of these debt repayment arrangements,
including the ongoing existence of a US$5million positive net working capital
balance, together with the sustained positive cash flows being produced by the
Runruno Project, the Directors believe there is no material uncertainty over
the Group's going concern.
The Group and its ability to operate as a going concern and to meet its
commitments as and when they fall due is dependent upon the ability of the
Group to operate the Runruno Project successfully so as to generate sufficient
cash flows to enable the Group to settle its liabilities as they fall due.
The Board of Directors believes that the Runruno Project will continue to
operate successfully and produce positive cash flows for at least 12 months
from the date of this interim report, being 26 September 2023. As a result,
the Board of Directors considers it appropriate that the half-year financial
information should be prepared on a going concern basis.
4. Earnings per share
The earnings per share was calculated on the basis of net profit/(loss)
attributable to equity shareholders divided by the weighted average number of
ordinary shares.
6 month period ended 30 June 2023 6 month period ended 30 June 2022 Year ended
31 December 2022
(unaudited) (unaudited) (audited)
US$ US$ US$
Earnings
Net profit/(loss) attributable to equity shareholders for the purpose of basic 8,753,956
and diluted earnings per share
36,958,623 782,066
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings 2,080,759,193
per share
2,089,230,821 2,072,588,751
Number of dilutive shares under warrant/option 22,000,000 19,958,011* 16,181,534
Weighted average number of ordinary shares for the purpose of diluted earnings 2,111,230,821 2,092,546,762* 2,096,940,727
per share
Basic earnings cents per share 1.77 0.04 0.42
Diluted earnings cents per share 1.75 0.04 0.42
* Restated to remove 94,125,000 warrant instruments previously incorrectly
included as these were anti-dilutive in nature.
5. 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 2023, in particular the ongoing
relatively high gold prices and the increased productivity of the Runruno
mine, the Group considered that a partial reversal of the 2018 impairment of
PPE be recognised. Accordingly, and in accordance with IAS 36 -- Impairment of
Assets, an impairment credit has been raised in H1 2023 to increase the book
value of the PPE by US$10 million.
6. Loans
Senior debt
The US$83,000,000 senior debt facility has effectively been fully repaid with
only US$1,253 outstanding as at 30 June 2023. This small balance has remained
in place to maintain the existing security while the process of elevating the
status of the mezzanine debt from unsecured to secured debt (the "Elevation").
This Elevation process provides for the interest rate on the mezzanine debt to
reduce from 15% to 7%.
The process of elevating the status of the mezzanine loans to that of secured
debt is continuing. The mechanics to achieve this requires new securities to
be created across several jurisdictions. The documentation to achieve all
aspects of the elevation is largely agreed, and the process of executing these
documents is expected to commence in Q3 2023.
Mezzanine debt
Since 2015, the Company has entered into numerous facility agreements with two
major shareholders, MTL Luxembourg Sarl ("MTL Luxembourg") and Runruno
Holdings Limited (the "RHL Group") (the "Mezzanine Lenders"). The purpose of
these unsecured advances was for general corporate and working capital
requirements of the Company and to enable completion of the Runruno Project.
In October 2020 the various original mezzanine facilities were consolidated
into two new facilities (the "New Mezzanine Facilities") and a £100,000
revolving credit facility. There is no obligation to make any repayment of any
amounts due under the New Mezzanine Facilities until the senior debt is fully
repaid.
The majority mezzanine lender, MTL Luxembourg, Nick Candy's investment vehicle
(holding 70.7% of the mezzanine debt), has confirmed in writing that, subject
to completion of the elevation documents within a reasonable period, the
interest rate on its portion of the mezzanine debt will reduce to 7% per annum
from 15% per annum as from 3 November 2022 (being the date that the Company
could have fully repaid the Senior Facility, but for the requirements of the
Elevation).
The minority 29.3% mezzanine lender, the RHL Group, has not confirmed the same
in writing; however, the Company is hopeful the RHL Group will apply the 7%
interest rate from 3 November 2022 and that this will be formalised once the
elevation documents are completed within a reasonable period.
Total mezzanine debt payments of US$35.0 million were made during H1 2023 (H1
2022: US$17.0 million).
The net debt position of the Group as at 30 June 2023 was US$48.8 million (H1
2022: US$92.9 million).
The Group's outstanding debt is summarised as follows:
June 2023 June 2022 December 2022
US$ US$ US$
Total loans due within one year* 49,301,270 18,711,883 30,001,208
Total loans due after more than one year* - 74,146,474 51,983,413
* Given the Group is not subject to a fixed repayment schedule then, in
accordance with the restructured debt facilities, there is no certainty as to
what amount of debt will be repaid within one year from period end. Thus, the
determination of what debt is deemed current and what is deemed non-current is
subject to estimation. In making this calculation the Group has taken account
of the Group's estimate of what principal repayments will be made during the
next 12 month period.
7. Share capital
The 17 June 2022 AGM approved a capital reorganisation which consisted of both
a capital sub-division and a capital reduction. The capital sub-division
effected a change in the nominal value of ordinary shares. This was achieved
by dividing the existing ordinary shares of £0.01 nominal value into one New
Ordinary Share, with a nominal value of £0.0001 and one Deferred Share with a
nominal value of £0.0099 each. The Deferred Shares had limited rights as set
out in the new Articles of the Company adopted at the AGM. This capital
sub-division was effective as from the day of the AGM. The capital reduction
element was to cancel, for no consideration, the deferred shares and share
premium account by way of creating a reserve to be offset against accumulated
losses. This capital reduction was completed in July 2022.
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 2023 June 2022 December 2022 June 2023 June 2022 December 2022
Number of shares Number of shares Number of shares US$ US$ US$
Ordinary shares of £0.01 par value
Opening balance - 2,071,334,586 2,071,334,586 - 27,950,217 27,950,217
Sub-division - (2,071,334,586) (2,071,334,586) - (27,950,217) (27,950,217)
Closing balance - - - - - -
Ordinary shares of £0.0001 par value
Opening balance 2,088,796,421 - - 281,638 - -
Sub-division/capital reduction - 2,071,334,586 2,071,334,586 - 279,502 279,502
Share issue in period 7,147,850 17,461,835 17,461,835 865 2,136 2,136
Closing balance 2,095,944,271 2,088,796,421 2,088,796,421 282,503 281,638 281,638
Deferred shares of £0.0099 par value
Opening balance - - - - - -
Sub-division/capital reduction - 2,071,334,586 - - 27,670,715 -
Closing balance - 2,071,334,586 - - 27,670,715 -
Share premium
Opening balance - - 195,855,125 195,855,125
Sub-division/capital reduction - - (196,118,890)
Share issue in period 144,350 263,765 263,765
Closing balance 144,350 196,118,890 -
8. Contingent liabilities
The Group has no contingent liabilities identified as at 30 June 2023 (2022:
US$nil) other than:
· In accordance with the provisions of the Financial and Technical
Assistance Agreement ("FTAA") with the Philippine government, which governs
the operations of the Runruno mine, an application to extend the exemption
from numerous taxes including corporate income tax, VAT, stamp duty and import
duty has been lodged. This application for the extension of the exemption from
these taxes has passed through several steps in the process of being approved
and has the garnered the support of some of the relevant government
departments.
Although uncertain, the Group remains confident that the extension will
ultimately be granted. As a result, the interim financial statements are based
on the assumption that the extension will be granted (consistent with the
December 2022 financial statements).
However, should this exemption request not be granted, the Group will have
liability for various past taxes. The Group believes it will be able to net
this potential liability against past payments VAT and import duties which it
believes it is entitled to recover. As some of these past VAT and Import duty
payments are subject to court proceedings the potential quantum of the tax
liability can't be predicted with certainty.
9. Subsequent events
There have been no subsequent disclosable events other than:
· On 18 September 2023 the Company announced the resignation of Mr
David Cather as Independent Chairman and non-executive director. Mr Steven
Smith has been appointed interim Chairman until such time as the Company
appoints a new independent Chairman. Mr Cather will continue as a director the
of Metals Exploration Pte Ltd (the group's Singapore incorporated holding
company), while remaining a mining engineering consultant to FCF Minerals, the
Company's Philippine operating subsidiary.
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