TIDMMTL
RNS Number : 7458N
Metals Exploration PLC
27 September 2023
METALS EXPLORATION PLC
INTERIM RESULTS FOR THE SIX MONTHSED 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 .
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$1,200 per ounce.
Production Summary
Runruno Project
---------- ---------- -------------
Production Summary Actual Actual Actual
---------- ---------- -------------
6 Months 6 Months 12 Months
to to to
30 June 30 June 31 December
Units 2023 2022 2022
------------------------- --------- ----------
Mining
--------- ---------- -------------
Ore Mined Tonnes 848,023 1,289,123 2,292,439
---------- ---------- -------------
Waste Mined Tonnes 5,385,929 5,676,856 11,422,847
---------- ---------- -------------
Total Mined Tonnes 6,233,952 6,965,979 13,715,286
---------- ---------- -------------
Au Grade Mined g/tonne 1.59 1.10 1.31
---------- ---------- -------------
Strip Ratio 6.08 4.28 4.89
---------- -------------
Processing
--------- ---------- -------------
Ore Milled Tonnes 1,068,391 1,017,258 2,068,031
---------- ---------- -------------
Gold (Au) Grade g/tonne 1.48 1.09 1.27
---------- ---------- -------------
Sulphur Grade % 1.41 0.98 1.36
---------- ---------- -------------
Au Milled (contained) ounces 50,701 35,742 84,677
---------- ---------- -------------
Recovery % 89.8 87.7 85.7
---------- ---------- -------------
Au Poured ounces 45,533 31,348 72,537
---------- ---------- -------------
Sales
--------- ---------- -------------
Au Sold ounces 46,186 30,676 69,249
---------- ---------- -------------
Au Price US$/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 6.2 Mt
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 d am 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 GBP0.01679 (US$0.02032) to certain members of
senior management in lieu of a GBP120,012 (US$145,215) cash
bonus.
Darren Bowden, CEO of Metals Exploration, commented :
"We are delighted with the Group's performance in the first half
of 2023 which has seen significant operational improvements and
record performances at Runruno, also enabling us to continue to
reduce our debt substantially. We are also very proud of our
ongoing outstanding safety record as this is something that is at
the forefront of everything we do and is an incredible achievement
by all our employees and contractors.
The Company is well set for the remainder of the year as we look
to continue to deliver strong performances at Runruno across all
our key metrics and hit our target guidance for production and AISC
for FY2023."
For further information please visit or contact
www.metalsexploration.com
Metals Exploration PLC
Via Tavistock Communications
Limited +44 (0) 207 920 3150
-------------------------
Nominated & Financial Adviser: STRAND HANSON LIMITED
-------------------------
James Spinney, James Dance,
Rob Patrick +44 (0) 207 409 3494
-------------------------
Financial Adviser & Broker: HANNAM & PARTNERS
-------------------------
Matt Hasson, Franck Nganou +44 (0) 207 907 8500
-------------------------
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
-------------------------
Jos Simson, Nick Elwes +44 (0) 207 920 3150
-------------------------
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
for the six months ended 30 June 2023
Notes 6 month period ended 6 month period ended Year ended
30 June 2023 30 June 2022 31 December 2022
(unaudited) (unaudited) (audited)
US$ 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 the parent 36,298,571 822,086 7,871,829
====================== ======================= =======================
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 30 June 2022 (Unaudited) 31 December 2022
(Unaudited) (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
Acquisition of
Share non-controlling Profit and
Share premium interest Translation Re-measurement Other loss Total
capital account reserve reserve reserve reserve account equity
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
Acquisition of
Share non-controlling Profit and
Share premium interest Translation Re-measurement Other loss Total
capital account reserve reserve reserve reserve account equity
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
Acquisition of
non-controlling
Share Share premium interest Translation Re-measurement Other Profit and Total
capital account reserve reserve reserve reserve loss account equity
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 - - - (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 39,838,746 17,037,683 38,189,947
-------------------------- -------------------------- --------------------------
Investing activities
Exploration expenses (449,477) -
incurred -
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 (348,383) (3,954,084) (3,860,826)
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 fro m 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$5million
positive net working capital balance, together with the sustained
positive cash flows being produced by the Runruno Project, the
Directors believe there is no material uncertainty over the Group's
going concern.
The Group and its ability to operate as a going concern and to
meet its commitments as and when they fall due is dependent upon
the ability of the Group to operate the Runruno Project
successfully so as to generate sufficient cash flows to enable the
Group to settle its liabilities as they fall due.
T he Board of Directors believes that the Runruno Project will
continue to operate successfully and produce positive cash flows
for at least 12 months from the date of this interim report, being
26 September 2023. As a result, the Board of Directors considers it
appropriate that the half-year financial information should be
prepared on a going concern basis.
4. Earnings per share
The earnings per share was calculated on the basis of net
profit/(loss) attributable to equity shareholders divided by the
weighted average number of ordinary shares.
6 month period ended 30 June 6 month period ended 30 June Year ended
2023 2022 31 December 2022
(unaudited) (unaudited) (audited)
US$ US$ US$
Earnings
Net profit/(loss) attributable
to equity shareholders for the
purpose of basic and diluted
earnings per share 36,958,623 782,066 8,753,956
Number of shares
Weighted average number of
ordinary shares for the
purpose of basic earnings per
share 2,089,230,821 2,072,588,751 2,080,759,193
------------------------------- ------------------------------- ------------------
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
per share 2,111,230,821 2,092,546,762* 2,096,940,727
------------------------------- ------------------------------- ------------------
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 GBP100,000 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 GBP0.01 nominal value into one New Ordinary
Share, with a nominal value of GBP0.0001 and one Deferred Share
with a nominal value of GBP0.0099 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 GBP0.01679 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 GBP0.01 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
GBP0.0001 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
GBP0.0099 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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END
IR SEMFWMEDSEDU
(END) Dow Jones Newswires
September 27, 2023 02:00 ET (06:00 GMT)
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