REG - Strategic Minerals - Interim Results - Half Year to 30 June 2017 <Origin Href="QuoteRef">SMLP.L</Origin> - Part 2
29/09/2017 07:06
- Part 2: For the preceding part double click ID:nRSc1422Sa
liabilities 70 71 - 1 142
________ ________ ________ ________
Deferred tax liabilities -
________
Total Group liabilities 142
________
STRATEGIC MINERALS PLC
NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2017
5. Operating loss
Administration costs by nature
6 months to 6 months to Year to
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
Operating gain/loss is stated after charging/(crediting):
Directors' fees and emoluments 181 105 262
Depreciation 48 26 48
Equipment rental 134 54 147
Equity accounting share of loss 49 - -
Auditors' remuneration - 52 27
Revaluation of investments (58) - -
Salaries, wages and other staff related costs 116 65 307
Insurance 26 2 -
Legal, professional and consultancy fees 147 77 464
Travelling and related costs 71 7 79
Foreign exchange 20 - 34
Share based payments 91 - 41
Other expenses 185 289 146
6 Exploration and Evaluation Expenditure
In the six months ending 30 June 2017 the Company purchased the remaining 50%
of Central Australian Rare Earths Pty Ltd which resulted in the addition of
deferred exploration and evaluation costs at acquisition which were recognised
at fair value.
Exploration/
evaluation
costs
(Unaudited)
Cost $'000
At 1 January 2017 -
Additions on acquisition of associates 812
________
At 30 June 2017 812
________
STRATEGIC MINERALS PLC
NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2017
7 Investments in associates and joint ventures
Investments
(Unaudited)
Cost $'000
At 1 January 2017 563
Acquisition of joint venture interests *1,068
Acquisition of associate interests ** 672
Share of equity loss in joint ventures (49)
Fair value adjustment 58
Investment in associates consolidated (1,056)
Foreign exchange difference 60
________
At 30 June 2017 1,316
________
* During the period the Company paid $1,068 in cash to acquire an additional
33.6% interest in Cornwall Resources Limited ("CRL) (CRL was previously New
Age Exploration Limited) which holds the Redmoor tin/tungsten project in
Cornwall taking the Company's interest in CRL to 50%.
** During the period the company acquired the balance of 50% of CARE from
joint venture partner Rarus Limited for £522,500 ($672,000). The acquisition
was financed by the issue of 19,000,000 ordinary shares in the company at an
issue price of £0.0275. This resulted in CARE becoming a 100% own subsidiary
of the Company and hence is now consolidated in the accounts.
.
30 June 2016 31 December 2016
Investment in associate - Central Australian Rare Earths Pty Ltd - 278
Investment in joint venture - Cornwall Resources Limited 1,316 285
________ ________
Total Investments 1,316 563
________ ________
STRATEGIC MINERALS PLC
NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2017
8 Business combinations
In June 2017, the company settled the purchase of the remaining 50% interest
in Central Australian Rare Earths Pty Ltd ("CARE") which owns exploration
tenements in the Northern Territory and Western Australia. The Company paid
£522,500 ($672,000) via the issue of 19,000,000 ordinary shares in the Company
at an issue price of £0.0275. Hence, CARE is now a wholly owned subsidiary of
the Company.
The Company valued the deferred exploration and evaluation at the historical
expenditure on the tenements within CARE. Details of the fair value of
identifiable assets and liabilities acquired, purchase consideration
and goodwill are as follows:
Book Value Adjustment Fair Value
$'000 $'000 $'000
Deferred exploration and evaluation 812 - 812
Receivables 11 - 11
Payables (69) - (69)
________ ________ ________
Identifiable assets acquired and liabilities assumed 754 - 754
________ ________ ________
Fair value of consideration paid Fair Value
$'000
Issue of shares 672
Previously held 50% equity interest * 377
________
1,049
________
Goodwill 295
________
* The group previously held a 50% equity interest in CARE prior to the
acquisition of the remaining 50% interest. Upon the remeasuring the equity
interest already held to fair value a gain of $58,000 has been recognised on
the investment in the period.
9 Dividends
No dividend is proposed for the period.
10 Earnings per share
Earnings per ordinary share have been calculated using the weighted average
number of shares in issue during the relevant financial year as provided
below.
6 months to 6 months to Year to
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Weighted average number of shares-Basic 1,227,015,247 898,448,028 1,008,103,186
Earnings/(Loss) for the period 158,000 ($322,000) $351,000
Earnings/(Loss) per share in the period-Basic 0.013 cents (0.036) cents 0.034 cents
STRATEGIC MINERALS PLC
NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2017
11. Share capital and premium
2017 2017 2016 2016
No $'000 No $'000
Allotted, called up and fully paid
Ordinary shares 1,245,825,560 46,472 1,218,492,227 45,738
__________ __________ __________ __________
In March 2017, the Company issued 8,333,333 ordinary shares due to options
being exercised at an exercise price of 0.60 pence.
In June 2017, the Company issued 19,000,000 ordinary shares to shareholders in
Rarus Limited, pursuant to its agreement to acquire the balance of Rarus'
shares in Central Australian Rare Earths Pty Ltd.
Share options and warrants
The number of options and warrants as at 30 June 2017 and a reconciliation of
the movements during the half year are as follows:
Date of Grant Granted as at 31 December 2016 Issued Lapsed or cancelled Granted as at 30 June 2017 Exercise price Date of vesting Date of expiry
10.04.15 27,000,000 - - 27,000,000 1.0p 19.04.17 30.06.18
10.04.15 27,000,000 - - 27,000,000 1.0p 19.05.17 30.06.19
14.07.15 8,333,333 - 8,333,333 - 0.6p 14.07.15 14.07.18
06.01.17 - * 16,000,000 - 16,000,000 1.0p 19.04.17 30.06.18
06.01.17 - ** 16,000,000 - 16,000,000 1.0p 19.05.17 60.06.19
62,333,333 32,000,000 8,333,333 86,000,000
* Tranche 1 options were issued to directors and management during the half
year. They expire on the 30.06.18 and had a market based vesting condition
which is satisfied once a 1.5 pence volume weighted average price ("VWAP") per
ordinary share is achieved over five consecutive trading days on AIM.
** The Tranche 2 options were issued to directors and management during the
half year. They expire on 30.06.19 and had a market based vesting condition
which is satisfied once a 3.0 pence VWAP per ordinary share is achieved over
five consecutive trading days on AIM.
The vesting conditions of all the outstanding options were satisfied during
the half year hence the fair value of all outstanding amounts not recognised
in previous periods has been recognised during the half year.
The estimated fair value of options issued during the half year are calculated
by applying the Black-Scholes option pricing model after taking into account
market based vesting conditions. The assumptions used in the calculation were
as follows:
Tranche 1 Tranche 2
Share price at date of grant 0.52p 0.52p
Exercise price 1.00p 1.00p
Market vesting condition 1.50p 3.00p
Expected volatility 81% 81%
Expected dividend Nil Nil
Contractual life 1.48 years 2.48 years
Risk free rate 0.42% 0.42%
Estimated fair value of each option 0.09p 0.10p
11 Post balance date events
On 29 August 2017 Mr John Peters, the Managing Director, exercised options
over 10,000,000 shares which were due to expire on 30 June 2017. Mr Peters
provided £100,000 which represented an exercise price of £0.01 per share.
On 5 September 2017, the Company announced that it had achieved record
domestic sales at its Cobre magnetite stockpile in New Mexico, USA ("Cobre")
during the month of August 2017, more than doubling the previous record posted
in July 2017. Cobre is operated by Strategic Minerals' wholly owned
subsidiary, Southern Minerals Group LLC (SMG). The strong sales in July and
August represent 96% of 2016's annual sales and 119% of 2015's annual sales.
The robust July and August sales performances have already ensured that the Q3
2017 quarterly update will report a new quarterly domestic sales record for
the Company.
On 7 September 2017, the Company announced the results of its phase 1 drilling
programme of the Redmoor project which is owned by CRL. The highlights were
as follows:
- Successful high-grade tin and tungsten intersection in Johnson's Lode
and in Kelly Bray Lode
- Great Southern Lode re-interpreted as a high-grade part of the Sheeted
Vein System ("SVS")
- Encouraging results from discrete high-grade zones within the SVS
mineralisation
- SVS high-grade zone widths and grades exceeding CRL's expectations.
Exceptional intercepts include:
CRD007: 14.8 m @ 1.00 % SnEq from 245.7 m, including 2.5 m @ 3.39 % SnEq from
257.9 m
CRD009: 17.5 m @ 0.68 % SnEq from 265.9 m, including 3.1 m @ 1.97 % SnEq from
280.3 m
CRD009: 28.2 m @ 0.81 % SnEq from 298.8 m, including 7.0 m @ 1.89 % SnEq from
317.5 m
CRD010: 11.1 m @ 0.57 % SnEq from 113.3 m, including 3.1 m @ 1.19 % SnEq from
121.3 m
- Re-examination of historical (1980's) drilling results has identified 31
significant intercepts within SVS high-grade zones
- Phase 2 exploration re-focused on further defining the high-grade zones
within the SVS as these are potentially an economically attractive target for
underground mining
- CRL's joint venture partners, have committed a further £150,000 to
continue the first three additional holes in Phase 2 and have committed to
complete an additional 3 holes should they be required
- All drilling is expected to be completed and reported upon in Q4, with a
Resource Update expected to be released in Q1 2018
- Ongoing positive community support with Cornwall Council extending
drilling consent to 31 October 2017
Copies of this interim report will be made available on the Company's website,
www.strategicminerals.net.
This information is provided by RNS
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