TIDMMNC
RNS Number : 5724J
Metminco Limited
03 April 2018
ANNUAL FINANCIAL REPORT FOR THE YEARED 31 DECEMBER 2017
Metminco Limited (ASX: MNC; AIM: MNC) ("Metminco" or the
"Company") is pleased to announce that it has today released its
Financial Report for the year ended 31 December 2017.
A summary of the Financial Report is set out below. The full
report can be accessed from the Company's website via the following
link:
http://www.metminco.com.au/site/PDF/2529_1/2017AnnualFinancialStatements
Overview
The Company's portfolio of assets includes the Quinchia Project
in Colombia and the Loica, Vallecillo and Mollacas projects in
Chile. The Company focussed its full attention on the Miraflores
Project at Quinchia while the Chilean assets remained on care and
maintenance throughout 2017.
The Miraflores Project was purchased from RMB Resources
Australia Pty Ltd on 20 June 2016. A Scoping Study commissioned by
Metminco during the second half of 2016 indicated that the project,
developed as an underground mine with processing facilities on
site, was the preferred development option given the robust
economics indicated for that development option. Based on this
work, Metminco commenced with a Feasibility Study on the Miraflores
Project late in 2016. The Feasibility Study was completed in
October 2017.
Miraflores Feasibility Study
The Miraflores Feasibility Study ("Study") was prepared
following the guidelines of the Canadian Securities Administrators'
National Instrument 43-101 and Form 43-101F1 and the JORC code
(2012). A Mineral Resource Statement was prepared in conformity
with generally accepted "Estimation of Mineral Resources and
Mineral Reserves Best Practice Guidelines" (CIM Guidelines) in 2012
and updated in 2016 to comply with the NI 43-101 and the JORC Code
(2012 edition) (The Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (the JORC Code)). A
Project Ore Reserve Estimate, classified and reported in accordance
with the Canadian Securities Administrators National Instrument
43-101 (NI 43-101) and the corresponding CIM Definition Standards
on Mineral Resources and Ore Reserves and the JORC Code (2012) was
also issued in October 2017 and updated in November 2017.
In summary, the Study considered an underground mining operation
generating 4.3Mt of mineralised material at a head grade of 3.3g/t
gold over 9.3 years to deliver 421,000oz recovered gold. Capital
costs were estimated at US$72 million and operating costs were
estimated at AISC of US$643/oz. At a gold price estimate of
US$1,300/oz. over the life of the operation, the Study generated an
NPV of US$72 million (at 8% discount rate) and payback of 3.6
years.
Permitting, Environmental and Social studies
Baseline Study and Environmental Impact Assessment programs were
recommenced in July 2017 modified in order to meet the data quality
objectives associated with the revised mine plan and project
layout. The monitoring and environmental inventories consist of
fauna and flora characterisation; underground and surface water
characterisation; noise, vibration and air pollution; and potential
contaminants from extracted minerals and stored tailings.
These data along with the mineralogical, geological, social and
economic aspects of the new Project will be used to inform the
Environmental Impact Assessment.
The environmental process will include participation of, and
provision of information to, all communities in the Project
area.
A Plan of works was submitted to the Colombian Mining Agency in
January 2018.
Cash Position and Funding
During the year ended 31 December 2017, Metminco's cash position
increased to A$834,377 from $71,548 due to the receipt of A$6.6
million due to the sale of its interest in the Los Calatos Project,
additional fund raisings (A$2.2 million net of costs) and
convertible notes (A$0.7 million net of costs).
Cash outgoings for the period were focussed on the continued
development of the Miraflores Gold Project and corporate overheads.
Expenditure for the year was focused on the Miraflores Feasibility
Study including an updated JORC 2012 Mineral Resource estimate, the
mining study, metallurgical test work, evaluation of processing
options, infrastructure work towards completion of the Feasibility
Study and the preparation of the EIA (Environmental Impact
Assessment).
As stated in the Notes to the Financial Statements, Metminco is
an exploration Company currently without an operating cash inflow
and the net cash position of the Group will continue to decrease
until such time as the Group has an operating cash inflow. Funds
from the sale of the Los Calatos Project have been applied to
completion of the Miraflores Feasibility Study and the lodgement of
the Environmental Impact Assessment (EIA) leading towards a
decision to mine, subject to mine development funding and EIA
approval. The release of the Miraflores Feasibility Study on 30
October 2017 confirmed the robust economics of the potential
development of the Miraflores Project into a near term cash
flow.
Details of fund raising during the year ended 31 December 2017
follow:
Sale of Interest in the Los Calatos Project
As announced 27 June 2017 the Company sold its 49% interest in
Los Calatos Holding, owner of the Los Calatos Project, for
approximately US$5 million (A$6.6 million) cash consideration net
of costs (the LCH Sale). Proceeds from the LCH Sale have provided a
non-dilutive form of financing for ongoing work programs towards
the development of the Miraflores Gold Project.
Placement and derivative asset
During the year the Company completed a second tranche of the
placement announced 17 November 2016 by placing a total of
36,919,831 new fully paid ordinary shares (Shares) and receiving
approximately A$1.7 million net of costs. The remaining
approximately $2.6 million of the A$3 million Lanstead Capital LP
funding facility is to be received over 18 months subject to the
Company's measured share price compared to the benchmark price
(A$0.158). If the Metminco measured share price exceeds the
benchmark price, for that month, the Company will receive more than
100 per cent of the monthly settlement due on a pro rata basis.
There is no upper limit placed on the additional proceeds
receivable by the Company as part of the monthly settlements.
Should the measured share price be below the benchmark price, the
Company will receive less than 100 per cent of the expected monthly
settlement on a pro rata basis.
Convertible note facility (Convertible Notes)
In May 2017 the Company entered into an A$0.75 million unsecured
convertible note facility with Redfield Asset Management.
The key terms of the convertible notes are as follows:
-- Face Value: A$750,000
-- Coupon Rate: 12.5% per annum, compounded monthly interest to be capitalised.
-- Conversion: No later than 12 months from date of issue at
which time the Convertible Notes and capitalised interest
automatically convert to fully paid ordinary shares (Shares) at the
Conversion Price.
-- Conversion Price: A$0.06075
-- Options granted:
i) 12,345,639 exercisable at $0.081 per Share any time prior to
24 months from date of issue
ii) 12,345,639 exercisable at $0.081 per Share any time prior to
24 months from date of issue to be issued as soon as Company's
available placement capacity under ASX Listing is refreshed.
-- Funding: A$750,000 after fees has been received.
-- Underwriting Fee: 4.5% of Face Value
Share Consolidation
Following the completion of the security consolidation on 4
January 2017 the Company had on issue 90,280,468 fully paid Shares
and 100,000 unlisted options to acquire one share at A$1.51 per
Share on or before 1 August 2017.
Small Holding Sale Facility
On 14 July 2017 the Company initiated a 'Small Holding Sale
Facility' for shareholders who hold a 'Small Holding' of shares
(unmarketable parcels) in the Company. Under ASX Listing Rules and
the Company's constitution a 'Small Holding' is defined as:
- a shareholding with a market value of less than A$500, and therefore
- any shareholding of 11,111 shares or less in the Company,
based on the closing share price of A$0.045 per share on the Record
Date (Monday, 10 July 2017) is deemed to be a 'Small Holding'
On 4 October 2017 the Company completed the buyback. The total
number of shares purchased under the facility was 3,875,424 shares
representing approximately 3% of the issued capital in Metminco.
With the purchase of the small holdings the number of Metminco
shareholders has reduced by more than 6,900 to 1,294
shareholders.
Board Changes
Kevin Wilson - Executive Chairman
Kevin Wilson was appointed Executive Chairman on 23 March
2018.
William Howe - Managing Director
William Howe who was appointed a Director Metminco on 17 July
2009 and Managing Director on 8 December 2010 resigned on 23 March
2018.
Ram Venkat - Non-Executive Director
Mr. Ram Venkat was appointed as a Non-Executive Director of the
Company effective 20 March 2017 and resigned on 19 March 2018.
Phillip Wing - Chair
Phillip Wing, who held office as a Director of Metminco Limited
since 17 July 2009 and as Chair since 27 July 2016 resigned on 3
August 2017.
Note CONsolidated Group
31 December 31 December
2017 2016
$ $
Revenue 2 - 389
Finance costs 16 (559,484) (221,057)
Share based payment expense 29 (426,174) -
Foreign exchange (loss)/gain (110,185) 16,369
Administration expenses (792,509) (65,140)
Employment expenses (1,295,015) (503,267)
Corporate expenses (1,416,089) (975,800)
Occupancy expense (161,574) (199,537)
Exploration and evaluation
expenditure written off 15 (48,437) (407,300)
Loss on loss of control
of subsidiary 12 - (121,540,173)
Impairment - Land Value
Chile 14 (934,037) -
Impairment of non-current
receivables (180,669) -
Depreciation (40,282) (92,156)
Realised loss on derivative
asset 11 (797,257)
Unrealised loss on derivative
asset 11 (1,260,330)
Share of net loss of associate - (113,198)
Loss on sale of asset 12 (27,228,513) -
Profit on disposal of assets 23,182 -
Loss before income tax (35,227,373) (124,100,870)
Income tax expense 4 - -
------------ -------------
Loss for the year 3 (35,227,373) (124,100,870)
------------ -------------
Other comprehensive income
Items that may be reclassified
subsequently to profit
or loss:
Exchange differences on
translating foreign controlled
entities (net of tax) (208,982) 423,051
Total Comprehensive Loss
for the year (35,436,355) (123,677,819)
------------ -------------
Loss for the year attributable
to members of the parent
entity: (35,227,373) (124,100,870)
------------ -------------
Total comprehensive loss
attributable to members
of the parent entity
from continuing operations: (35,436,355) (123,677,819)
------------ -------------
Basic loss per share(cents) 7 (28.39) (169.38)
Diluted loss per share 7 (28.39) (169.38)
Note CONsolidated Group
31 December 31 December
2017 2016
$ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 8 834,377 71,548
Trade and other receivables 9 167,382 385,827
Derivative asset 11 272,683 -
Asset held for sale 10 2,586,122 -
Other assets 48,610 21,060
------------- -------------
TOTAL CURRENT ASSETS 3,909,174 478,435
------------- -------------
NON-CURRENT ASSETS
Investment in associate 12 - 33,766,877
Property, plant and equipment 14 569,642 4,538,349
Exploration and evaluation expenditure 15 12,015,128 9,486,691
------------- -------------
TOTAL NON-CURRENT ASSETS 12,584,770 47,791,917
------------- -------------
TOTAL ASSETS 16,493,944 48,270,352
------------- -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 16 3,392,074 3,425,242
Short term provisions 17 187,214 236,775
------------- -------------
TOTAL CURRENT LIABILITIES 3,579,288 3,662,017
------------- -------------
NON-CURRENT LIABILITIES
Long term provisions 17 - 79,903
Long term payables 16 4,322,867 4,893,628
TOTAL NON-CURRENT LIABILITIES 4,322,867 4,973,531
------------- -------------
TOTAL LIABILITIES 7,902,155 8,635,548
------------- -------------
NET ASSETS 8,591,789 39,634,804
------------- -------------
EQUITY
Issued capital 18 332,987,792 329,032,074
Reserves 27 (29,914,047) (30,142,687)
Accumulated losses (294,481,956) (259,254,583)
------------- -------------
TOTAL EQUITY 8,591,789 39,634,804
------------- -------------
.
Convertible Foreign Acquisition
Note Currency Reserve
Issued Accumulated Option equity Translation
Capital Losses Reserve Reserve Reserve Total
CONSOLIDATED $ $ $ $ $ $ $
GROUP
Total equity
as at 1 Jan
2016 324,037,464 (137,675,903) 67,756 - 23,230,638 (41,506,662) 168,153,293
Loss attributable
to members
of the parent
entity - (124,100,870) - - - - (124,100,870)
Other comprehensive
income - - - - 423,051 - 423,051
----------- ------------- -------- ----------- ------------ ------------ -------------
Total comprehensive
loss - (124,100,870) - - 423,051 - (123,677,819)
Transactions
with owners:
Shares issued
during the
period 5,415,242 - - - - - 5,415,242
Transaction
costs (420,632) - - - - - (420,632)
Loss of control
of subsidiary - 2,509,120 - - (12,344,400) - (9,835,280)
Options expired - 13,070 (13,070) - - - -
Balance as
at 31 December
2016 329,032,074 (259,254,583) 54,686 - 11,309,289 (41,506,662) 39,634,804
----------- ------------- -------- ----------- ------------ ------------ -------------
Total equity
as at 1 Jan
2017 329,032,074 (259,254,583) 54,686 - 11,309,289 (41,506,662) 39,634,804
Loss attributable
to members
of the parent
entity - (35,227,373) - - - - (35,227,373)
Other comprehensive
income - - - - (208,982) - (208,982)
----------- ------------- -------- ----------- ------------ ------------ -------------
Total comprehensive
loss - (35,227,373) - - (208,982) - (35,436,355)
Transactions -
with owners:
Shares issued
during the
period 4,375,000 - - - - - 4,375,000
Transaction
costs (419,282) - - - - - (419,282)
Equity component
of convertible
note - - - 11,448 - - 11,448
Options issued - - 426,174 - - - 426,174
Options expired - - - - - - -
Balance as
at 31 December
2017 332,987,792 (294,481,956) 480,860 11,448 11,100,307 (40,506,662) 8,591,789
----------- ------------- -------- ----------- ------------ ------------ -------------
Note CONSOLIDATED GROUP
31 December 31 December
2017 2016
$ $
CASH FLOWS FROM OPERATING
ACTIVITIES
Payments to suppliers and
employees (4,388,346) (1,121,361)
Interest received - 389
Net cash used in operating
activities 23(b) (4,388,346) (1,120,972)
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant
and equipment - (931)
Payments for exploration
expenditure (2,759,699) (2,335,294)
Payment against deferred
consideration (1,000,000) (253,637)
Proceeds from sale of plant
& equipment 23,182 -
Proceeds from sale of Los
Calatos 6,538,365 -
----------- -----------
Net cash provided by/(used
in) investing activities 2,801,848 (2,589,862)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of
shares 1,825,000 3,185,207
Payments in respect to
capital raisings (419,282) (381,677)
Cash received from convertible
notes 29 750,000 -
Cash received from derivative
asset 10 194,412 -
Net cash provided by financing
activities 2,350,130 2,803,530
----------- -----------
Net increase/(decrease)
in cash held 763,632 (907,304)
Cash and cash equivalents
at the beginning of the
year 71,548 949,790
Effect of exchange rates
on cash holdings in foreign
currencies (803) 29,062
----------- -----------
Cash and cash equivalents
at the end of the year 23(a) 834,377 71,548
=========== ===========
Kevin Wilson
Executive Chairman
Metminco Limited ABN Suite 401, 6 Help Street,
43 119 759 349 Chatswood NSW, 2067
ASX Code: MNC.AX; AIM Tel: +61 (0) 2 9460 1856;
Code: MNC.L Fax: +61 (0) 2 9460 1857
www.metminco.com.au
For further information,
please contact:
METMINCO LIMITED
Graeme Hogan Office: +61 (0) 2
9460 1856
NOMINATED ADVISOR AND BROKER
RFC Ambrian
Australia
Andrew Thomson/Alena Broesder Office: +61 (0) 2
9250 0000
United Kingdom
Charlie Cryer Office: +44 (0) 20
3440 6800
PUBLIC RELATIONS
Camarco
United Kingdom
Gordon Poole / Tom Huddart Office: + 44 (0) 20
3757 4997
------------------------------ --------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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