REG - Shuka Minerals PLC - Interim Results and Update on Financial Position
30/09/2024 17:30
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RNS Number : 3252G Shuka Minerals PLC 30 September 2024
30 September 2024
SHUKA MINERALS PLC
("Shuka" or the "Company")
Interim Results for the six months to 30 June 2024 and update on Financial
Position
Shuka Minerals plc (AIM: SKA), an African focused mine operator and developer,
announces the Company's unaudited interim results for the six months ended 30
June 2024.
Chairman's Report
I am pleased to present the Company's Interim Results for the six-month period
from 1 January 2024 to 30 June 2024. This period has seen operational
developments and some strategic advancements that underscore our potential
future direction.
Corporate Developments
Settlement of Legacy Dispute with Upendo Group
A significant development in the first half of the year was the settlement of
the long-standing dispute with Upendo Group regarding their 10% residual
interest in the Rukwa coal mining license. This dispute, which had persisted
for many years, was resolved in February 2024 with a definitive agreement,
under which the Company has paid US$110,000 to Upendo. The settlement draws a
clear line under the matter, bringing all related legal proceedings to a
close, and involves a waiver of any future claims by Upendo.
Board Changes
During the period Mr. Jason Brewer stepped down from the Board to avoid
potential conflicts of interest. However, the Company is pleased to have
retained Mr. Brewer as a strategic adviser under a consultancy agreement,
ensuring that we continue to benefit from his expertise.
As the strategic direction of the Company progresses, it has been agreed that
Noel Lyons, Paul Ryan and Allen Zimbler will each leave the company with
effect from 30 November 2024, or such earlier date as may be agreed. The
Company is actively progressing the appointment of additional directors, at
both executive and non-executive level and looks forward to providing further
updates once customary due diligence has been concluded.
Operational Performance
Rukwa Coal Mine
Operationally, the Rukwa coal mine has faced challenges, particularly due to
the rainy season, which caused a temporary halt in production. Nonetheless,
with the return of local staff and preparation for the new production cycle,
we are optimistic that output will resume in the coming months. Demand for
coal in regional markets remains strong, and we expect this trend to continue
into the second half of the year.
Strategic Growth Initiatives
Potential Acquisition
As previously announced in March 2024, the Board is progressing the potential
acquisition of a brownfield base metals project in East Africa (the
"Project"). The due diligence process has now been completed, with independent
technical and legal assessments indicating that the Project presents an
attractive opportunity for the Company.
The Project has a historical non-JORC compliant resource base with an
estimated in-situ value of approximately US$1.98 billion, and economic
analyses project pre-tax cash flows of US$1.84 billion. Should the acquisition
proceed, our development plan will include a phased exploration program to
validate the resource further and establish a clear pathway for both open-pit
and underground mining operations.
We have already paid US$150,000 to the counterparty as part of this
acquisition process, with the remaining consideration of US$5.85 million to be
settled through a combination of cash and equity on a staged-payment basis.
While regulatory approvals and closing conditions are still pending, we remain
confident in the strategic benefits of this acquisition.
While the Board remains excited by the potential acquisition, there can be no
certainty that the requisite regulatory approvals and customary closing
conditions will be satisfied (or waived) and that definitive documentation
will be concluded, or as to the eventual detailed terms or timing of the
transaction.
Further announcements regarding the potential acquisition will be made as and
when appropriate.
Convertible Loan Note and Financial Position
To fund the potential acquisition and support our broader growth plans, we
announced in May 2024 that we had secured a £2 million convertible loan note
agreement with AUO Commercial Brokerage LLC ("AUO"). AUO subsequently advised
the Company in August 2024 that its investment capital was tied up in ongoing
transactions which were taking longer to conclude than they initially
anticipated, and accordingly it did not have access at that time to the
Company's requested initial CLN drawdown funds.
While AUO has reiterated its commitment to supporting the Company's future
endeavours and financial needs to support the ongoing business and obligations
of the Company, the Company currently has limited cash at bank and continues
to carefully manage its resources and creditors. Assuming it is able to
continue to manage creditors, it expects current funds available will be
sufficient to the end of November 2024.
Accordingly, in the absence of funds being provided by AUO on a timely basis,
the Company is actively exploring alternative sources of financing in order to
provide sufficient working capital for the Company, until such time as the
requested funds are provided by AUO pursuant to the convertible loan note or
otherwise.
This includes discussions with Gathoni Muchai Investments Limited ("GMI"), a
major shareholder of the Company, which has provisionally offered an
unsecured, interest free, non-convertible loan facility, of £500,000, subject
to GMI having secured the necessary funding in the near term to provide such a
facility; however there can be no guarantee these discussions
will be formalised or that GMI will secure the requisite funding and
accordingly there can be no guarantee that such a facility will be made
available.
Whilst the Board remains confident in its ability to raise such additional
funding on a timely basis, there can be no guarantee that such funding will be
secured, or as to the terms of any such financing, which may impact the
Company's ability to continue to trade.
Further announcements will be made as appropriate.
Thank you for your continued support.
Quinton Van Der Burgh
Chairman, Shuka Minerals PLC.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed
in accordance with the Company's obligations under Article 17 of MAR.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended Year
30 June 24 30 June 23 ended
31 Dec 23
Unaudited Unaudited Audited
Note £ £ £
Revenue 2,330 68,926 194,346
Cost of sales (92,060) (151,627) (438,877)
Gross loss (89,730) (82,701) (244,531)
Administrative expenses (452,960) (656,060) (1,424,120)
Group operating loss (542,690) (738,761) (1,668,651)
Finance income 2,082 - 3,256
Finance costs (3,608) (7,562) (16,133)
Loss on operations before taxation (544,216) (746,323) (1,681,528)
Taxation - - (972)
Loss for the period after taxation (544,216) (746,323) (1,682,500)
Other comprehensive income/(loss): - - -
Gain/(loss) on translation of overseas subsidiary 45,451 (335,033) (349,479)
Total comprehensive loss for the period
(498,765) (1,081,356) (2,031,979)
Attributable to:
Equity holders of the Company (498,218) (1,080,722) (2,030,327)
Non-controlling interest (547) (634) (1,652)
(498,765) (1,081,356) (2,031,979)
Loss per share
- basic and diluted (pence) 2 (0.90) (2.54) (4.11)
The income for the period arises from the Group's continuing operations.
CONSOLIDATED statement of financial position
as at 30 June 2024
As at As at As at
30 June 24 30 June 23 31 Dec 23
Unaudited Unaudited Audited
Note £ £ £
Non-current assets
Property, plant and equipment 4 5,497,645 5,568,304 5,469,134
Intangible assets 5 335,807 333,907 333,041
5,833,452 5,902,211 5,802,175
Current assets
Inventories 75,633 111,516 75,011
Trade and other receivables 438,744 309,778 416,370
Cash and cash equivalents 92,530 440,655 633,093
606,907 861,949 1,124,478
Current liabilities
Trade and other payables (540,720) (745,718) (515,376)
Borrowings (34,651) (27,817) (34,366)
(575,371) (773,535) (549,742)
Current assets less current liabilities 31,536 88,414 574,732
Total assets less current liabilities 5,864,988 5,990,625 6,376,907
Non - current liabilities
Borrowings (17,259) (52,375) (32,131)
Environmental rehabilitation liability (32,354) (28,984) (32,086)
Net assets 5,815,375 5,909,266 6,312,690
Capital and reserves
Called-up share capital 4,562,344 4,348,744 4,562,344
Share premium account 24,035,973 23,009,976 23,995,626
Share based payment reserve 324,495 210,037 364,842
Foreign currency translation reserve 968,965 937,960 923,514
Retained earnings (24,053,330) (22,574,502) (23,509,661)
Issued capital and reserves attributable to owners of the parent company 5,838,447 5,932,215 6,336,665
Non-controlling interest (23,072) (22,949) (23,975)
Total equity 5,815,375 5,909,266 6,312,690
CONSOLIDATED statement of changes in equity
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Earnings Account Share Option Reserve Foreign Currency Total Non-controlling interest Total
Translation Reserve
£ £ £ £ £ £ £ £
At 1 January 2023 4,233,744 22,569,976 (21,896,430) 277,654 1,272,993 6,457,937 (19,697) 6,438,240
Comprehensive Income for the year
Foreign currency translation - - - - (335,033) (335,033) (2,464) (337,497)
Loss for the year - - (745,689) - - (745,689) (634) (746,323)
Total comprehensive income for the year - - (745,689) - (335,033) (1,080,722) (3,098) (1,083,820)
Transactions with owners
Issue of share capital 115,000 460,000 - - - 575,000 - 575,000
Share issue costs - (20,000) - - - (20,000) - (20,000)
Lapsed share options - - 67,617 (67,617) - - - -
Total transactions with owners 115,000 440,000 67,617 (67,617) - 555,000 - 555,000
Non- controlling interest share of goodwill
- - - - - - (154) (154)
At 30 June 2023 4,348,744 23,009,976 (22,574,502) 210,037 937,960 5,932,215 (22,949) 5,909,266
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Earnings Account Share Option Reserve Foreign Currency Total Non-controlling interest Total
Translation Reserve
£ £ £ £ £ £ £ £
At 1 January 2024 4,562,344 23,995,626 (23,509,661) 364,842 923,514 6,336,665 (23,975) 6,312,690
Comprehensive Income for the year
Foreign currency translation - - - - 45,451 45,451 1,428 46,879
Loss for the year - - (543,669) - (543,669) (547) (544,216)
Total comprehensive income for the year - - (543,669) - 45,451 (498,218) 881 (497,337)
Transactions with owners
Lapsed share options - 40,347 - (40,347) - - - -
Total transactions with owners - 40,347 - (40,347) - - - -
Non- controlling interest share of goodwill
- - - - - - 22 22
At 30 June 2024 4,562,344 24,035,973 (24,053,330) 324,495 968,965 5,838,447 (23,072) 5,815,375
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Earnings Account Share Option Reserve Foreign Currency Total Non-controlling interest Total
Translation Reserve
£ £ £ £ £ £ £ £
At 1 January 2023 4,233,744 22,569,976 (21,896,430) 277,654 1,272,993 6,457,937 (19,697) 6,438,240
Comprehensive Income for the year
Foreign currency translation - - - - (349,479) (349,479) (2,464) (351,943)
Loss for the year - - (1,680,848) - - (1,680,848) (1,652) (1,682,500)
Total comprehensive income for the year - - (1,680,848) - (349,479) (2,030,327) (4,116) (2,034,443)
Transactions with owners
Issue of share capital 328,600 1,445,650 - - - 1,774,250 - 1,774,250
Share issue costs - (20,000) - - - (20,000) - (20,000)
Share options/warrants charge - - - 154,805 - 154,805 - 154,805
Lapse of share options/warrants - - 67,617 (67,617) - - - -
Total transactions with owners 328,600 1,425,650 67,617 87,188 - 1,909,055 - 1,909,055
Non- controlling interest share of goodwill - - - - - - (162) (162)
At 31 December 2023 4,562,344 23,995,626 (23,509,661) 364,842 923,514 6,336,665 (23,975) 6,312,690
consolidated CASH FLOW STATEMENT
Six months Six months Year
ended ended ended
30 June 24 30 June 23 31 Dec 23
Unaudited Unaudited Audited
£ £ £
Cash flows from operating activities
Operating loss (542,690) (738,761) (1,668,651)
Depreciation 16,910 30,542 114,422
Share based payments - - 154,805
Expected credit losses - - (4,387)
Impairment of inventories - - 45,925
Movement in inventories (20,005) - (8,798)
Movement in trade and other receivables 22,311 (16,825) (94,500)
Movement in trade and other payables (1,538) 358,750 104,216
Loss on foreign exchange - (1,977) (2,135)
Expected credit losses - -
Net cash used in operating activities (525,012) (368,271) (1,359,103)
Tax Paid - -
----
Cash flows from investing activities
Finance income 2,082 - 3,256
Net cash used in investing activities 2,082 - 3,256
Cash flows from financing activities
Repayment of lease liabilities (15,134) (11,536) (25,265)
Lease interest (3,608) (4,483) (9,687)
Other interest paid - (3,079) (3,187)
Proceeds on issue of ordinary shares - 614,850 1,814,100
Share issue costs - (20,000) (20,000)
Net cash (used)/generated from financing activities (18,742) 575,752 1,755,961
Net (decrease)/increase in cash and cash equivalents (541,672) 207,481 400,114
Cash and cash equivalents at beginning of year 633,094 237,300 237,300
Exchange losses on cash and cash equivalents 1,108 (4,126) (4,321)
Cash and cash equivalents at end of year 92,530 440,655 633,093
NOTES TO THE INTERIM REPORT
1. Financial information and basis of preparation
The interim financial statements of Shuka Minerals Plc are unaudited
consolidated financial statements for the six months ended 30 June 2024 which
have been prepared in accordance with UK adopted international accounting
standards. They include unaudited comparatives for the six months ended 30
June 2023 together with audited comparatives for the year ended 31 December
2023.
The interim financial statements do not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2023 have been reported on by the company's
auditors and have been filed with the Registrar of Companies. The report of
the auditors unqualified and contained an Emphasis of mater paragraph on
Operationalisation of up to 16% Government of Tanzania non-dilutive free
carried share interest and the recoverability of VAT in Tanzania. Aside from
the Emphasis of matter paragraphs above, the auditor's report did not contain
any statement under section 498 of the Companies Act 2006.
The interim consolidated financial statements for the six months ended 30 June
2024 have been prepared on the basis of accounting policies expected to be
adopted for the year ended 31 December 2024. These are anticipated to be
consistent with those set out in the Group's latest financial statements for
the year ended 31 December 2023. These accounting policies are drawn up in
accordance with adopted International Accounting Standards ("IAS") and
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board.
2. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
30 June 24 30 June 23 31 December 23
£ £ £
Loss after taxation (544,216) (746,323) (1,682,500)
Weighted average number of shares in the period 60,219,861 29,329,474 40,922,217
Basic and diluted loss per share (pence) (0.90) (2.54) (4.11)
The loss attributable to equity shareholders and weighted average number of
ordinary shares for the purposes of calculating diluted earnings per ordinary
share are identical to those used for basic earnings per ordinary share. This
is because the exercise of share options and warrants would have the effect of
reducing the loss per ordinary share and is therefore anti-dilutive.
3. Dividends
No dividends are proposed for the six months ended 30 June 2024 (six months
ended 30 June 2023: £nil, year ended 31 December 2023: £nil).
4. Property, plant and equipment
Coal Production assets Plant & machinery Fixtures & fittings Motor vehicles
Total
£ £ £ £ £
Cost or valuation
As at 1 January 2024 5,529,808 1,270,229 7,366 311,162 7,118,565
Foreign exchange adjustment 45,921 10,488 27 2,446 58,882
At 30 June 2024 5,575,729 1,280,717 7,393 313,608 7,177,447
Accumulated depreciation
As at 1 January 2024 194,860 1,269,183 7,284 178,104 1,649,431
Depletion/Charge for the year - 131 9 16,770 16,910
Foreign exchange adjustment 1,611 10,480 27 1,343 13,461
At 30 June 2024 196,471 1,279,794 7,320 196,217 1,679,802
Net book value
As at 30 June 2024 5,379,258 923 73 117,391 5,497,645
Coal Production assets Plant & machinery Fixtures & fittings Motor vehicles
Total
£ £ £ £ £
Cost or valuation
As at 1 January 2023 5,855,019 1,344,491 7,554 328,480 7,535,544
Foreign exchange adjustment (310,858) (70,984) (180) (16,553) (398,575)
At 30 June 2023 5,544,161 1,273,507 7,374 311,927 7,136,969
Accumulated depreciation
As at 1 January 2023 173,642 1,301,920 7,445 140,661 1,623,668
Depletion/Charge for the year 3,849 3,760 13 22,920 30,542
Foreign exchange adjustment (9,227) (68,846) (180) (7,292) (85,545)
At 30 June 2023 168,264 1,236,834 7,278 156,289 1,568,665
Net book value
As at 30 June 2023 5,375,897 36,673 96 155,638 5,568,304
4. Property, plant and equipment (continued)
Coal Production assets Plant & machinery Fixtures & fittings Motor vehicles
Total
£ £ £ £ £
Cost or valuation 5,855,019 1,344,491 328,480 7,535,544
As at 1 January 2023 7,554
Foreign exchange adjustment (325,211) (74,262) (188) (17,318) (416,979)
At 31 December 2023 5,529,808 1,270,229 7,366 311,162 7,118,565
Accumulated depreciation
As at 1 January 2023 173,642 1,301,920 7,445 140,661 1,623,668
Depletion/Charge for the year 30,871 39,171 27 44,353 114,422
Adjustments - - - - -
Foreign exchange adjustment (9,653) (71,908) (188) (6,910) (88,659)
At 31 December 2023 194,860 1,269,183 7,284 178,104 1,649,431
Net book value
As at 31 December 2023 5,334,948 1,046 82 133,058 5,469,134
5. Intangible assets
Mining Licences Total
£ £
Cost or valuation
As at 1 January 2024 1,574,911 1,574,911
Foreign exchange adjustment 13,081 13,081
At 30 June 2024 1,587,992 1,587,992
Accumulated amortisation and impairment
As at 1 January 2024 1,241,870 1,241,870
Foreign exchange adjustment 10,315 10,315
At 30 June 2024 1,252,185 1,252,185
Net book value
As at 30 June 2024 335,807 335,807
5. Intangible assets (continued)
Mining Licences Total
£ £
Cost or valuation
As at 1 January 2023 1,667,530 1,667,530
Foreign exchange adjustment (88,530) (88,530)
At 30 June 2023 1,579,000 1,579,000
Accumulated amortisation and impairment
As at 1 January 2023 1,314,903 1,314,903
Foreign exchange adjustment (69,810) (69,810)
At 30 June 2023 1,245,093 1,245,093
Net book value
As at 30 June 2023 333,907 333,907
Mining Licences Total
£ £
Cost or valuation
As at 1 January 2023 1,667,530 1,667,530
Foreign exchange adjustment (92,619) (92,619)
At 31 December 2023 1,574,911 1,574,911
Accumulated amortisation and impairment
As at 1 January 2023 1,314,903 1,314,903
Foreign exchange adjustment (73,033) (73,033)
At 31 December 2023 1,241,870 1,241,870
Net book value
As at 31 December 2023 333,041 333,041
6. Share capital
No £ No £ £
Ordinary shares of 1p each Ordinary shares of 0.02p/1p each Deferred shares of 0.001p each Deferred shares of 0.001p each Total share capital
Issued and fully paid
At 1 January 2024 and 30 June 2024
60,219,861 602,200 396,014,437,346 3,960,144 4,562,344
No £ No £ £
Ordinary shares of 1p each Ordinary shares of 0.02p/1p each Deferred shares of 0.001p each Deferred shares of 0.001p each Total share capital
Issued and fully paid
At 1 January 2023 27,359,861 273,600 396,014,437,346 3,960,144 4,233,744
On 31 May 2023 the company issued 11,500,000 Ordinary 1p shares at 5p each 11,500,000 115,000 - - 115,000
As at 30 June 2023 38,859,861 388,600 396,014,437,346 3,960,144 4,348,744
No £ No £ £
Ordinary shares of 1p each Ordinary shares of 0.02p/1p each Deferred shares of 0.001p each Deferred shares of 0.001p each Total share capital
Issued and fully paid
At 1 January 2023 27,359,861 273,600 396,014,437,346 3,960,144 4,233,744
On 31 May 2023 11,500,000 Ordinary 1p shares were issue for 5p 11,500,000 115,000 - - 115,000
On 7 September 2023 17,860,000 Ordinary 1p shares were issued for 5p
17,860,000 178,600 - - 178,600
On 7 September 2023 3,500,000 Ordinary shares of 1p each were issued for 8.75p
3,500,000 35,000 - - 35,000
As at 31 December 2023 60,219,861 602,200 396,014,437,346 3,960,144 4,562,344
7. Distribution of interim report to shareholders
The interim report will be available for inspection by the public at the
registered office of the Company during normal business hours on any weekday
and from the Company's website http://www.shukaminerals.com/
(http://www.shukaminerals.com/) . Further copies are available on request.
Enquiries:
Shuka Minerals Plc +254 (0)743 303075
Noel Lyons - CEO
Strand Hanson Limited +44 (0) 20 7409 3494
Financial and Nominated Adviser
James Harris | Richard Johnson
Tavira Securities Limited +44 (0) 20 7100 5100
Joint Broker
Oliver Stansfield | Jonathan Evans
Peterhouse Capital Limited +44 (0)20 7469 0930
Joint Broker
Charles Goodfellow | Duncan Vasey
Gathoni Muchai Investments info@shukaminerals.com
Financial PR and IR
Faith Kinyanjui Mumbi
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