TIDMALTN 
 
 

ALTYNGOLD PLC

 

Chief Executive Review

 

AltynGold Plc ("AltynGold" or the "Company"), the gold mining and development company, announces its unaudited results for the six months to 30 June 2021.

 

The financing raised in 2020 has been utilised to buy new underground mining equipment and improve the infrastructure at the mine. The resultant increase in production and improving grade as the orebody is being mined more efficiently is now translating into increased turnover and profitability for the Group. With the gold price at its current levels of around US$1,800oz, the Group has improved its turnover from the prior period June 2020 by more than 100%.

 

Highlights:

 

Mine development

   -- Transport decline No.1 was developed by 150 linear metres, on ore bodies 
      3-8 at 148masl, transport decline 2 by 144 linear metres, opening up 
      reserves of 770,000 tons for extraction. 
 
   -- Development of the shaft and tunneling amounted to 3,131 linear metres, 
      (H12020:2,345 linear metres). 
 
   -- Blast hole drilling amounted to 60,161 linear metres, (H1 2020: 22,500 
      linear metres). 
 
   -- Ore was mined in the period principally from ore bodies 3-8 at 150 and 
      the level of 178masl, and ore body 11 at the levels 131-174masl. 
 
   -- Exploration drilling at Sekisovskoye amounted to 8,200 linear metres. 
 
   -- Extensive maintenance and improvement works were carried out to maintain 
      production safely and efficiently. 
 
   -- Exploration work at Teren-Sai continued -- 9,330 linear metres of 
      exploratory drilling in Area No. 1, 3,860 core samples extracted in Area 
      No.2. 
 

Production

   -- Ore extracted in the period was 266,607t (H1 2020: 235,724t). 
 
   -- The milled ore was 262,744t (H1 2020: 186,966t), in the current period, 
      an increase of 41%. 
 
   -- Average processed gold grade in the period was 1.88g/t (H1 2020: 
      1.53g/t). 
 
   -- Gold recovery averaged 82.18% during the 6 month period (H1 2020: 
      79.79%). 
 
   -- H1 2021 gold production from Sekisovskoye was 13,066oz, compared with H1 
      2020 of 6,990oz. 
 

Financial

   -- The turnover has increased to US$23m (H1 2020: US$11.5m). The gold price 
      achieved averaged US$1,832oz during the period (H1 2020 US$1,693oz). 
 
   -- The Company made a gross profit of US$14.0m (H1 2020: gross profit of 
      US$3.9m), with a net profit before taxation of US$9.3m (H1 2020: loss of 
      US$1.2m). 
 
   -- The total cash cost of production was US$766oz (H1 2020: US$963oz). 
 
   -- Adjusted EBITDA achieved was positive at US$13.4m (H1: 2020: US$5.0m). 
 
   -- Borrowings were reduced by US$2.4m in the period. Cash balances at 30 
      June 2021 were US$3.5m (H1 2020: US$7.2m). 
 

Aidar Assaubayev, CEO of AltynGold plc commented:

 

"The Board are pleased with the progress being made with turnover increasing by more than 100% to US$23m and operating profit moving up to US$11.2m from US$0.6m. The capital expenditure has boosted production and revenues and the full year results look promising. Progress at Teren-Sai is continuing, and the Company is in the process of compiling the documentation to renew the licence and to move Area No.2 into the next phase to calculate the reserves."

 

For further information please contact:

 

AltynGold plc

 

For further information please contact:

 

Rajinder Basra, CFO +44 (0) 203 432 3198

 

Information on the Company

 

AltynGold plc (LSE:ALTN) is an exploration and development company, which is listed on the main market segment of the London Stock Exchange. The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

 

To read more about AltynGold plc please visit our website www.altyngold.uk

 

H1 2021 Review

 

Mine development

 

Sekisovskoye

 

The input of significant capital equipment additions in 2020 and H1 2021 has enabled the Company to progress mining operations in all areas of mining operations. A significant acquisition in this regard was the purchase of the self-propelled tunnelling equipment.

 

The principal development milestones achieved in the period were:

   -- Tunnelling and shaft sinking of 3,131 linear metres, in the similar 
      period last year it was 2,345 metres. 
 
   -- Blast hole drilling of 60,161 linear metres (H1 2020: 22,500 metres). 
 
   -- Exploration drilling was carried out and amounted to 8,200 linear metres 
 
   -- Backfilling of voids was carried out in the period amounting to a volume 
      of 38,177m. 
 

During this period the Company has been concentrating on developing ore bodies 3-8 at horizons 150m-178m and ore body 11 at horizons 134m-174m. The transport decline No.2 was extended by 144 linear metres allowing the access of 640,000 tons of ore. Similarly transport decline No. 1 was extended by 150 linear metres opening up accessible reserves of 130,000 tons.

 

In order to continue to mine efficiently and safely the following capital/maintenance was carried out:

   -- A forced air facility was commissioned and built at elevation 355masl, 
      this necessitated the installation of 17km of overhead 6Kv lines. The 
      Korfmann ventilation equipment will allow safe and stable operations for 
      a period up to 2029 in accordance with the mine operational plans. 
 
   -- Various works were carried out to enable the efficient and safe working 
      of the stoping, this included introducing a new system of stoping and 
      obtaining an Ulba-150 charging unit to improve the quality of ore 
      crushing. 
 
   -- The mine operational procedures are constantly being updated to conform 
      to current safe working practices, during the period an electronic 
      accounting and explosive digitised log was introduced. 
 

In summary the Company has been operating in line with its budgeted mining plan, the operations at the mine have complied with all current government guidelines in relation to COVID-19. There has been minimal disruption to the production at the mine and the procedures and operations employed by the Company have ensured that the employees have been working in a safe environment.

 

Teren-Sai

 

In the current six month period the Company has been concentrating its efforts on the exploration of two particular areas within the 198km area of the prospective site.

 

In relation to Area No.1, 233 exploratory pneumatic wells were drilled, resulting in 9,330 linear metres of drilling. From this 4,665 core samples were extracted. The area is currently being mapped to outline the morphology of the ore body and calculate the reserves at this site. The work is ongoing, but good progress was made in the period.

 

With regards to Area no. 2 this is the most advanced project in the Teren-Sai block, with extensive drilling being undertaken in prior periods. The exploration program in this area is now complete with 15 core wells and 3,860 linear metres being drilled in the period, and 3,860 core samples being extracted. The reserves estimate is currently being calculated in accordance with the State Reserves Committee of Kazakhstan, once completed the analysis will be forwarded to the appropriate government department. This will enable the Company to start to move to the next phase of operations and plan for production from Area No. 2.

 

H1 2021 Operational Overview -- Sekisovskoye

 
 
Underground mine             H1 2021  H1 2020 
Ore extracted        tons    266,607  235,724 
Gold grade           g/t     1.85     1.49 
Silver grade         g/t     1.80     1.10 
 
Mineral processing           H1 2021  H1 2020 
Milling              tons    262,774  186,966 
Gold grade           g/t     1.88     1.53 
Silver grade         g/t     1.83     1.05 
Gold recovery        %       82.18%   79.79% 
Silver recovery      %       73.19%   72.88% 
Gold produced        ounces  13,066   6,990 
Silver produced      ounces  11,315   4,555 
 

During the period there was a significant amount of planned repair and restoration work carried out at the processing plant. To the extent it related to an upgrade/major overhaul the costs were capitalised, these works were in addition to normal planned repairs absorbed into the costs for the period. The work included the replacement of essential components in one of the grinding mills, as well as significant upgrades to the electrolysis section of the plant. The management see the upgrades and renewal of equipment as key to moving production up to the next level.

 

An advance payment was made in July 2021 for the following equipment which is due to be delivered for installation in Q3 2021, regeneration heater, KMD fine crusher, shaker screens for the crushing and grading complex. It is anticipated the improvements will lead to uninterrupted and more efficient production in future periods.

 

The ore milled in the period saw an increase from the prior period of 41%, and further increases are expected as the upgrades and maintenance programs progress. Significantly the grade achieved of 1.88g/t is higher than the grade that was budgeted at 1.81g/t. The effect of the new equipment reducing the dilution is having the desired effect in increasing the grade, the grade is budgeted to increase as the mine moves down to the lower levels.

 

The upgrades are also feeding into the increased recovery rates which have moved up from 79.8% to 82%, the Company expects to maintain recovery at these enhanced levels.

 

There has been a significant increase in production and sales of gold dore, increasing from 6,990oz in June 2020 to in excess of 13,000oz in June 2021, for the full year to 31 December 2020 the total gold poured was 17,000oz. The Company is pleased with the progress that has been made.

 

H1 2021 Financial Review

 

The Company has reported a gross profit of US$14.0m for H1 2021, against US$3.9m for H1 2020, with turnover of US$23m (H1 2020 US$11.5m).

 

The Company has seen a significant increase in its margin as revenue grows with increasing production from higher grade ore and a higher average gold price achieved of US$1,832 (H1 2020 US$1,693).

 

Sekisovskoye produced 13,066oz of gold in H1 2021 (H1 2020: 6,990oz). Gold sold during the period amounted to 12,560oz (H1 2020: 6,790oz).

 

The operating cash cost of production (cost of sales excluding depreciation and provisions) for the period was US$546/oz (H1 2020 US$828/oz). The total cash cost was US$766/oz as compared to US$963/oz in H1 2020. The directors monitor the cash cost closely and see it as a key indicator of the cost being incurred to extract the gold.

 

In terms of other costs there has been a significant increase in administrative costs these relate to three principal factors. An increase in travel expenses compared to the prior period. In the period to June 2020 there was restricted travel due to COVID-19. An increase in administrative salaries, a number of additional staff at higher skill levels and remuneration were employed by the Company. The third factor related to the use of specialist consultants and advisors that were utilised on special projects and for the provision of strategic advice to the Company. In total these accounted for US$1.3m of the total increase of US$1.9m.

 

In terms of finance costs there is a significant increase in the period from 2020 of US$0.9m to US$1.7m. The principal factor was due to a full period charges on the loans drawn down from Bank Center Credit and the balance of the Bond that was raised on the Kazakh Stock exchange which amounted to US$6.5m and was drawn down in June 2020.

 

The financial statements for June 2020 have been adjusted for the fair value of the share options granted on 30 June 2020 to Freedom Finance who were instrumental in raising the bonds on the Kazakh stock exchange, as disclosed in note 1. This has resulted in an additional charge in the 30 June 2020 income statement of US$2.4m and a corresponding credit of US$2.4m to the share based reserve. As the options were subsequently issued in October 2020 the share based reserve have since been credited to accumulated losses.

 

In terms of the financial position of the Company at 30 June 2021 the deferred tax asset has reduced with the Company moving into profit, resulting in a charge in the current period of US$0.5m. At June 2020 no adjustment was made to deferred tax as the impact of the acquisition of new equipment driving up production and profitability was not clear. During the period the Company has made substantial advance payments for equipment, parts and mining services increasing by US$2.6m from 31 December 2020.

 

Borrowings have reduced by US$ 2.4m overall from December 2020 due principally to the repayment of bonds in line with the agreed terms of repayment.

 

As of 30 June 2021, the Company had cash balances of US$3.5m. The Directors have assessed that with the current cash balances and cash forecast to be generated from operations sufficient cash will be available to meet its current budgeted medium term plans. The directors are forward looking and are aiming to develop further funding opportunities to grow the Company.

 

Aidar Assaubayev

 

Chief Executive Officer

 

3 September 2021

 

Directors Responsibility Statement and Report on Principal Risks and Uncertainties

 

Responsibility statement

 

The Board confirms to the best of their knowledge, that the condensed set of financial statements have been prepared in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

The interim management report includes a fair review of the information required by:

 

DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

DTR 4.2.8R of the Disclosures and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party transactions described in the last annual report that could do so.

 

The Company's management has analysed the risks and uncertainties and has in place control systems that monitor daily the performance of the business via key performance indicators. Certain factors are beyond the control of the Company such as the fluctuations in the price of gold and possible political upheaval. However, the Company is aware of these factors and tries to mitigate these as far as possible. In relation to the gold price the Company is pushing to achieve a lower cost base in order to minimise possible downward pressure of gold prices on profitability. In addition, it maintains close relationships with the Kazakhstan authorities in order to minimise bureaucratic delays and problems.

 

Risks and uncertainties identified by the Company are set out on page 8 and 9 of the 2020 Annual Report and Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2021 to the principal risks and uncertainties as set out in the 2020 Annual Report and Accounts and these are as follows:

   -- Fiscal changes in Kazakhstan 
 
   -- No access to capital 
 
   -- Commodity price risk 
 
   -- Currency risk 
 
   -- Reliance on operating in one country 
 
   -- Reliant on one operating mine 
 
   -- Technical difficulties associated with developing the underground mine at 
      Sekisovskoye and Teren-Sai 
 
   -- Failure to achieve production estimates 
 
   -- COVID -19 uncertainties 
 
   -- Health, safety and environment 
 

The Directors do not expect any changes in the principal risks for the remaining six months of the financial year.

 

Aidar Assaubayev

 

Chief Executive Officer

 

3 September 2021

 

INDEPENT REVIEW REPORT TO ALTYNGOLD PLC

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2021 which comprises the consolidated income statement, the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and notes to the financial information.

 

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

Directors' responsibilities

 

The half-yearly financial report is the responsibility of and has been approved by the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1, the annual financial statements of the group will be prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this interim financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

 

Our responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2021 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

Use of our report

 

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting its responsibilities in respect of half-yearly financial reporting in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

 

BDO LLP

 

Chartered Accountants

 

London

 

United Kingdom

 

3 September 2021

 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

 
 
ALTYNGOLD PLC 
 Consolidated income statement 
 
                                            Six months       Six months 
                                             ended 30 June    ended 30 June 
                                             2021             2020 
                                            Unaudited        Unaudited 
                                                             (restated) 
                                            US$'000          US$'000 
Revenue                                     23,009            11,495 
Cost of sales                               (9,037)          (7,571) 
Gross profit                                13,972           3,924 
 
 Administrative expenses                     (2,757)          (918) 
SShare based payment                        -                (2,400) 
 
 Operating profit                            11,215           606 
Foreign exchange                            (278)            (890) 
Finance expense                             (1,676)          (867) 
 
 Profit/(loss) before taxation               9,261            (1,151) 
Taxation                                    (510)            - 
Profit/(loss) attributable to s equity 
 shareholders 
 
 
                                             8,751            (1,151) 
 
 
 
 Profit/(loss) per ordinary share     Note 
 
 Basic and diluted (US cent)          3      32.03c           (4.48c) 
 

ALTYNGOLD PLC

 

Consolidated statement of profit or loss and other comprehensive income

 
 
                                               Six months      Six months 
                                               ended 30 June   ended 30 June 
                                               2021            2020 
 
                                              unaudited        unaudited 
                                                              (restated) 
                                              US$'000         US$'000 
Profit/l(loss) for the period                 8,751           (1,151) 
Currency translation differences arising on 
translations of F foreign operations items 
which will or may be reclassified to profit 
or loss                                        (1,493)         (1,649) 
 
Total comprehensive profit/(loss) for the 
 period attributable to equity shareholders    7,258          (2,800) 
 
 
ALTYNGOLD PLC 
 Consolidated statement of financial position 
 
 
                                                 Six months      Year ended 
                                                 ended 30 June   31 December 
                                                 2021            2020 
 
                                         Notes   (unaudited)     (audited) 
                                                US$'000         US$'000 
 
 Non-current assets 
Intangible assets                        5      13,016          12,849 
Property, plant and equipment            6      33,163          32,092 
Other receivables                        7      5,996           6,700 
Deferred tax asset                              4,026           5,311 
Restricted cash                                 13              13 
                                                56,214          56,965 
 
 Current assets 
Inventories                                     8,522           5,468 
Trade and other receivables              7      12,874          7,182 
Cash and cash equivalents                       3,478           7,154 
                                                24,874          19,804 
Total assets                                    81,088          76,769 
 
 Current liabilities 
Trade and other payables                        (6,111)         (6,705) 
Provisions                                      (186)           (151) 
Borrowings                               10     (3,238)         (5,833) 
                                                (9,535)         (12,689) 
Net current assets                              15,339          7,115 
 
 Non-current liabilities 
Other financial liabilities & payables          (388)           (722) 
Provisions                                      (5,082)         (4,763) 
Borrowings                               10     (23,490)        (23,260) 
                                                (28,960)        (28,745) 
Total liabilities                               (38,495)        (41,434) 
Net assets                                      42,593          35,335 
 
 Equity 
Called-up share capital                         4,267           4,267 
Share premium                                   152,839         152,839 
Merger reserve                                  (282)           (282) 
Other reserve                                   333             333 
Currency translation reserve                    (54,452)        (52,959) 
Accumulated loss                                (60,112)        (68,863) 
Total equity                                    42,593          35,335 
 
 

The financial information was approved and authorised for issue by the Board of Directors on 3 September 2021 and was signed on its behalf by:

 

Aidar Assaubayev -- Chief Executive Officer

 

ALTYNGOLD PLC

 

Consolidated statement of changes of equity

 
 
                                                             Share 
                                               Currency      based 
                   Share    Share     Merger   translation   payment   Other     Accumulated 
                   capital   premium  reserve  reserve       reserve   reserves   losses       Total 
Unaudited          US$'000  US$'000   US'000   US$'000       US$'000   US$'000   US$'000      US$'000 
At 1 January 2021  4,267    152,839   (282)    (52,959)      -         333       (68,863)     35,335 
Profit for the 
 period            -        -         -        -             -         -         8,751        8,751 
Exchange 
 differences on 
 translating 
 foreign 
 operations        -        -         -        (1,493)                 -         -            (1,493) 
Total 
 comprehensive 
 profit for the 
 period            -        -         -        (1,493)       -         -         8,751        7,258 
At 30 June 2021    4,267    152,839   (282)    (54,452)      -         333       (60,112)     42,593 
 
Unaudited          US$'000  US$'000   US'000   US$'000       US$'000   US$'000   US$'000      US$'000 
At 1 January 2020  4,055    151,476   (282)    (48,102)      -         333       (74,201)     33,279 
Profit for the 
 period            -        -         -        -             -         -         1,249        1,249 
Other 
 comprehensive 
 loss              -        -         -        (1,649)                 -         -            (1,649) 
Total 
 comprehensive 
 loss for the 
 period            -        -         -        (1,649)                 -         1,249        (400) 
New share capital 
 subscribed        13       62        -        -             -         -         -            75 
At 30 June 2020 
 as previously 
 reported          4,068    151,538   (282)    (49,751)                333       (72,952)     32,954 
Share based 
 payment (see 
 note 1)           -        -         -        -             2,400     -         (2,400)      - 
Loss for the 
 period restated   -        -         -        -             -         -         (1,151)      (1,151) 
Total 
 comprehensive 
 loss for the 
 period -- as 
 restated          -        -         -        -                       -         (1,151)      (1,151) 
At 30 June 2020 
 as restated       4,068    151,538   (282)    (49,751)      2,400     333       (75,352)     32,954 
 
 
Audited            US$'000  US$'000   US'000   US$'000       US$'000   US$'000   US$'000      US$'000 
At 1 January 2020  4,055    151,476   (282)    (48,102)      -         333       (74,201)     33,279 
Loss for the year  -        -         -        -             -         -         2,938        2,938 
Other 
 comprehensive 
 loss              -        -         -        (4,857)                 -         -            (4,857) 
Total 
 comprehensive 
 loss for the 
 year              -        -         -        (4,857)       -         -         2,938        (1,919) 
Share based 
 payment charge    -        -         -        -             2,400     -         -            2,400 
Share options 
 exercised         199      11 1,301           -             (2,400)   -         2,400        1,500 
New share capital 
 subscribed        13       6         2 -      -             -         -         -            75 
At 31 December 
 2020              4,267    152,839   (282)    (52,959)      -         333       (68,863)     35,335 
 
 
 
ALTYNGOLD PLC 
 Consolidated statement of cash flows 
 
 
                                     Six months ended    Six months ended 
                                     30 June 2021        30 June 2020 
 
                                     (unaudited)         (unaudited) 
Note                                US$'000             US$'000 
Net cash inflow from operating 
 activities                        81,819               1,280 
 
 Investing activities 
Purchase of property, plant and 
 equipment                          *(2,133)            (6,371) 
Acquisition of intangible assets    (375)               (265) 
 
Net cash used in investing 
activities                           (2,508)             (6,636) 
 
 Financing activities 
Loans received                      4,641               13,956 
Loans repaid                        (6,518)             (1,711) 
Interest paid                       (1,120)             (949) 
 
Net cash flow (decrease)/increase 
from financing activities            (2,997)             11,296 
 
(Decrease)/increase in cash and 
cash equivalents                     (3,686)             5,940 
 
 
Cash and cash equivalents at the 
beginning of the period              7,154               105 
Effect of exchange rate 
 fluctuations on cash held          10                  - 
Cash and cash equivalents at end 
 of the period/year                 3,478               7,874 
 

* Cash paid to purchase property, plant and equipment represents additions of US$4.2m (note 6) plus a decrease in trade payables of $0.3m less by a decrease in prepayments for equipment of $2.4m (Note 7).

 

ALTYNGOLD PLC

 

Notes to the consolidated financial information

 

1. Basis of preparation

 

General

 

AltynGold Plc (the "Company") is a Company incorporated in England and Wales under the Companies Act 2006. The address of its registered office, and place of business of the Company and its subsidiaries is set out within the Company information at the end of this interim report

 

The Company is registered and domiciled in England and Wales, whose shares are publicly traded on the London Stock Exchange. The interim financial results for the period ended 30 June 2021 are unaudited. The financial information contained within this report does not constitute statutory accounts as defined by Section 434(3) of the Companies Act 2006.

 

This interim financial information of the Company and its subsidiaries ("the Group") for the six months ended 30 June 2021 have been prepared, in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority, and on a basis consistent with the accounting policies set out in the Group's consolidated annual financial statements for the year ended 31 December 2020. It has not been audited, does not include all of the information required for full annual financial statements, and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 December 2020 , which has been prepared in accordance with both "international accounting standards in conformity with the requirements of the Companies Act 2006" and "international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union".

 

These interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2020 were approved by the board of directors on 30 April 2021 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

 

The financial statements have been reviewed, not audited.

 

The financial information is presented in US Dollars and has been prepared under the historical cost convention. On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board. AltynGold Plc transitioned to UK-adopted international accounting standards in its consolidated financial statements on 1 January 2021. There was no impact or changes in accounting policies from the transition.

 

The same accounting policies, presentation and method of computation together with critical accounting estimates, assumptions and judgements are followed in this consolidated financial information as were applied in the Group's latest annual financial statements except that in the current financial year, the Group has adopted a number of revised Standards and Interpretations. However, none of these have had a material impact on the Group. In addition, the IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report was published. It is not expected that any of these will have a material impact on the Group.

 

Prior period adjustments

 

Share based payment

 

The prior period has been adjusted to account for the fair value of the grant of share options made on 30 June 2020, which was not accounted for in that period. This has resulted in a charge to the profit and loss account of US$2.4m at 30 June 2020 with a corresponding credit entry to the share based payment reserve in the statement of changes in equity. There was no impact on the equity attributable to shareholders as at 30 June 2020 which remained unchanged at US$32.9m

 

The share options were exercised in October 2020 resulting in the transfer of the share based payment reserve to accumulated losses.

 

ALTYNGOLD PLC

 

Notes to the consolidated financial information (continued)

 

Going concern

 

During the current period the Group has been able to grow its turnover and profitability, increasing production facilitated by the capital expenditure funded by the borrowings which the Group has been able to reduce by US2.4m, and which now stand at US$26.7m. The resultant increase in cash flow and adjusted EBITDA which has moved up from US$5m to US$13.4m has enabled the Group to maintain cash reserves and repay the bonds during the year which amounted to US$2.3m.

 

At the period end the Group had cash resources of US$3.5m (31 December 2020: US$7.2m). The Board have reviewed the Group's cash flow forecasts for the period to December 2022. The forecasts are based on the current approved budgets taking in to account any adjustments from current trading. The principal capital costs have now been made and the Directors are of the opinion that the current cash balances and cash generated from operations will be sufficient to for the Group to meet its cash flow requirements.

 

As reported in the 2020 Annual Report there has been minimal disruption at present from the effects of COVID-19 on the operations of the Group. However the Board are mindful that this is a constantly changing and evolving situation that needs to be kept under constant review. As such the existing arrangements in relation to all stakeholders to include employees, suppliers and customers are monitored to ensure there is no disruption in the operations.

 

The Board have considered as at the period end possible stress case scenarios that they consider may likely impact the Group's operations, financial; position and forecasts. As at the year-end these are seen as being, illness of the employees, disruption to supply chains in and out of the group, impacting the production and possible falls in gold prices.

 

From the analysis undertaken the Board have concluded that the Group will be able to continue to trade based on its existing resources. The stress tests included a drop in the gold price of 10% from the current gold price and budgeted production by 20%, in both scenarios and combination of both together it was concluded that the Group had sufficient cash reserves to continue to operate. The Board therefore considers it appropriate to adopt the going concern basis of accounting in preparing these financial statements.

 

2. Segmental information

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments and making strategic decision, has been identified as the Board of Directors.

 

The Board of Directors consider there to be two operating segments, the exploration and development of mineral resources at Sekisovskoye and at Teren-Sai, both based in one geographical segment, being Kazakhstan. All sales were made in Kazakhstan from the mine at Sekisovskoye. However in relation to Teren-Sai as there is discrete financial information available and the assets account for greater than 10% of the combined total assets of all segments it is considered to be a separate operating segment.

 

Teren-Sai is an exploration asset, details of the carrying value of the asset are shown in note 5.

 

3. Profit/(loss) per ordinary share

 

Basic profit/(loss) per share is calculated by dividing the profit/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The weighted average number of ordinary shares and retained profit/(loss) for the financial period for calculating the basic loss per share for the period are as follows:

 
                                                     Six months   Six months 
                                                      ended 30     ended 30 
                                                      June 2021    June 2020 
                                                                   (restated) 
                                                     (unaudited)  (unaudited) 
The basic weighted average number of ordinary 
shares in issue during the period 
                                                      27,332,933   *25,697,036 
The profit/(loss) for the period attributable to 
equity shareholders (US$'000s) 
                                                      8,751        (1,151) 
 

*Restated to reflect the 100:1 consolidation of shares in October 2020.

 

4. Alternative performance measures

 

The Directors have presented the alternative performance measures adjusted EBITDA , operating cash cost and total cash cost as they monitor these performance measures at a consolidated level and the Directors believe it is relevant in measuring the Group's performance.

 

A reconciliation of the alternative performance measures is shown below.

 

Adjusted EBITDA, operating cash cost and total cash cost are not defined performance measures in IFRS. The Group's definition of adjusted these may not be comparable with similar titled performance measures as disclosed by other entities.

 
                                                          Six months 
                                         Six months        ended 30 June 
                                          ended 30 June    2020 
                                          2021             (unaudited) 
                                          (unaudited)      (restated) 
Adjusted EBITDA                           US$000's         US $000's 
Profit/(loss) before taxation            9,261            (1,151) 
Adjusted for 
Finance expense                          1,676            867 
Depreciation of tangible fixed assets    2,167            1,947 
Share based payment                      -                2,400 
Foreign currency translation             278              890 
Adjusted EBITDA                          13,382           4,953 
 

Operating cash cost

 

US$ US$

 
Cost of sales                            9,037    7,571 
Adjusted for 
Depreciation of tangible fixed assets    (2,167)  (1,947) 
                                         6,870    5,624 
Gold sold in the period per oz           12,560   6,790 
Operating cash cost per oz               546      828 
 

Total cash cost

 
Cost of sales                            9,037    7,571 
Adjusted for 
Administrative expenses                  2,758    918 
Depreciation of tangible fixed assets    (2,167)  (1,947) 
                                         9,628    6,542 
 
 
Gold sold in the period per oz    12,560  6,790 
Total cash cost per oz            766     963 
 
 
                          Teren-Sai         Exploration and 
5. Intangible assets       geological data   evaluation costs  US$'000 
 
Cost 
1 January 2020            9,931             7,488              17,419 
Additions                 -                 1,271              1,271 
Amortisation capitalised  -                 608                608 
Currency translation 
 adjustment               (905)             (717)              (1,622) 
December 2020             9,026             8,650              17,676 
Additions                 -                 375                375 
Amortisation capitalised  -                 324                324 
Transfer                  -                 (165)              (165) 
Currency translation 
 adjustment               (145)             (140)              (285) 
30 June 2021              8,881             9,044              17,925 
 
Accumulated amortisation 
1 January 2020            4,476             -                  4,476 
Charge for the period     608               -                  608 
Currency translation 
 adjustment               (422)             -                  (422) 
Revenue relating to 
 production                                 165                165 
31 December 2020          4,662             165                4,827 
Charge for the period     324               -                  324 
Transfer to cost          -                 (165)              (165) 
Currency translation 
 adjustment               (77)                                 (77) 
30 June 2021              4,909             -                  4,909 
 
 
 Net books values 
30 June 2021              3,972             9,044              13,016 
31 December 2020          4,364             8,485              12,849 
 

The intangible assets relate to the historic geological information pertaining to the Teren-Sai ore fields. The ore fields are located in close proximity to the current open pit and underground mining operations of Sekisovskoye. In May 2016 the Company was awarded an exploration and evaluation contract, which is valid for six years, with a right to extend for a further 6 years, with the right to extend for another 5 years if there is a commercial discovery of resources. It is the intention of the Company to extend the licence and the necessary documentation is being prepared. Ongoing costs in relation to exploration and evaluation are capitalised.

 

6. Property, plant and equipment

 
                                                  Plant, 
                             Freehold land        Equipment                 Total 
                 Mining       and                 fixtures 
                 properties   buildings           and        Assets under 
                 and leases                       fittings   construction 
                 US$000       US$000                US$000   US$000          US$000 
Cost 
1 January 2020   13,949      24,786               17,446     1,067          57,248 
Additions        1,622       166                  5,555      1,246          8,589 
Disposals        -           -                    (250)      -              (250) 
Transfers        (764)       -- 1,383 1,3811,383  (8)        (471)          140 
Transfer from 
 inventories     -           -- -1,383            -          241            241 
Currency 
 translation 
 adjustment      (1,543)     (2,285)              (1,641)    (110)          (5,579) 
31 December 
 2020            13,264      24,050               21,102     1,973          60,389 
Additions        1,761       103                  1,633      745            4,242 
Disposals        -           -                    -          -              - 
Transfers        161         652                  67         (652) (6531)   228 
Transfer to 
 inventories     -           - -1,383             -          (365)          (365) 
Currency 
 translation 
 adjustment      (325)       (410)                (346)      (29)           (1,110) 
30 June 2021     14,861      24,395               22,456     1,672          63,384 
 
 
Accumulated 
depreciation 
1 January 2020   2,441       10,563               13,928     -              26,932 
Charge for the 
 period          520         1,885                1,545      -              3,950 
Disposals        -           -                    (250)      -              (250) 
Transfers        140         (80)                 80         -              140 
Currency 
 translation 
 adjustment      (232)       (997)                (1,246)    -              (2,475) 
1 December 
 2020            2,869       11,371               14,057     -              28,297 
Charge for the 
period            299         1,074                794        -              2,167 
Transfers        161         -                    67         -              228 
Currency 
 translation 
 adjustment      (54)        (191)                (226)      -              (471) 
30 June 2021     3,275       12,254               14,692     - -            30,221 
 
 
Carrying 
amount 
30 June 2021     11,586      12,141               7,764      1,672          33,163 
31 December 
 2020            10,395      12,679               7,045      1,973          32,092 
 
 

ALTYNGOLD PLC

 

Notes to the consolidated financial information (continued)

 

7. Trade and other receivables

 

Non-current

 
                                                   30 June       31 December 
                                                    2021          2020 
                                                    (unaudited)   (audited) 
                                                    US$000's      US $000's 
VAT recoverable                                    3,436         1,705 
Prepayments- advances to suppliers for equipment   2,560         4,995 
                                                   5,996         6,700 
 

The amount recoverable in relation to Value Added Tax is expected to be recovered by offset against VAT payable in future periods.

 

Current

 
                                      30 June       31 December 
                                       2021          2020 
                                       (unaudited)   (audited) 
                                       US$000's      US $000's 
Trade receivables                     783           - 
VAT recoverable                       4,199         3,549 
Prepayments- advances to suppliers    7,884         2,826 
Other receivables -- recoverable      23            823 
Other receivables -- provision        (15)          (16) 
                                      12,874        7,182 
 

Prepayments have increased as a result of advance payments to suppliers for parts and consumables.

 

8. Notes to the cash flow statement

 
                                         Six months       Six months 
                                          ended 30 June    ended 30 June 
                                          2021             2020 
                                          (unaudited)      (unaudited) 
                                                           (restated) 
                                          US$000's         US $000's 
Profit/(loss) before taxation            9,261            (1,151) 
Adjusted for 
Finance expense                          1,676            867 
Depreciation of tangible fixed assets    2,167            1,947 
Increase in inventories                  (2,689)          (2,424) 
Increase in trade receivables            (7,641)          (102) 
Decrease in trade and other payables     (1,233)          (1,147) 
Share based payment                      -                2,400 
Foreign currency translation             278              890 
Cash inflow from operations              1,819            1,280 
Income taxes                             -                - 
                                         1.819            1,280 
 

9. Related party transactions

 

Remuneration of key management personnel

 

The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 - "Related Party Disclosures". The total amount remaining unpaid with respect to remuneration of key management personnel amounted to US$77,000 (31 December 2020 US$52,000).

 
                                Six months  Six months 
                                 ended 30    Ended 30 
                                 June 2021   June 2020 
                                US$000      US$000 
Short term employee benefits    66          35 
                                66          35 
Social security costs           2           2 
                                68          37 
 

During the period, the following transactions were connected with Company's in which the Assaubayev family have a controlling interest:

   -- An amount is owing to Asia Mining Group of US$nil, (31 December 2020: 
      US$85,892) and is included within trade payables. 
 
   -- Loan amounts due by the Group to Amrita Investments Limited a company 
      controlled by the Assaubayev family, total US$nil (31 December 2020 
      US$45,000). The 10% convertible bond and interest due to Amrita 
      Investments of U$1,559,250 was repaid in May 2021 as per the terms of the 
      bond, (31 December 2020 US$1,525,747). 
 
   -- The balance of the 10% convertible bond issued to African Resources 
      Limited amounting to US$297,000 (including accrued interest) was repaid 
      in May 2021. 
 

10 . Borrowings

 
                                          Six months       Year ended 
                                           ended 30 June    31 December 
                                           2021             2020 
                                           (unaudited)      (audited) 
                                           US$000's         US $000's 
 
Current loans and borrowings 
Bonds                                     -                2,882 
Bank loans                                3,238            2,906 
Related party loans                       -                45 
                                          3,238            5,833 
Due one-two years 
Bonds                                     9,458            9,317 
Bank loans                                5,348            2,997 
                                          14,806           12,314 
Due two-five years 
Bank loans                                8,684            8,990 
                                          8,684            8,990 
Due more than five years 
Bank loans                                -                1,956 
                                          -                1,956 
Total non-current loans and borrowings    23,490           23,260 
 

Bond Listed on Astana International Exchange

 

The total number of bonds at the period end amounted to US$10m at a coupon rate of 9%, the bonds are repayable in December 2022. At the year end the carrying value approximates to their fair value.

 

Bank loans

 

The Company has an agreed a facility with JSC Bank Center Credit (BCC) for an amount of US$17m. The bank loan is repayable in instalments over a term of 7 years and bears interest at 6%-7%, capital repayments commenced in October 2020.

 

In addition on 30 December 2020 the Company agreed a new facility with BCC of US$5.5m (2.3bln Tenge), of this amount US$3.6m has to be utilised to purchase equipment and the balance of US$1.9m for working capital purposes. US$973,000 was drawn down in December 2020, the balance of the loan was drawn down in 2021. The loan is denominated in Kazakh Tenge with interest at 15.5% repayable in instalments over 5 years with a 6 month capital repayment holiday.

 

The bank loan is secured over the assets of the Group.

 

11. Reserves

 

A description and purpose of reserves is given below:

 
Reserve                        Description and purpose 
                               Amount of the contributions made by 
 Share capital                 shareholders in return for the issue of 
                               shares. 
Share premium                  Amount subscribed for share capital in excess 
                               of nominal value. 
Share based payment            Amount accrued in relation to the share based 
                               payment charge relating to the share options 
                               issued. 
Merger Reserve                 Reserve created on application of merger 
                               accounting under a previous GAAP. 
                               Gains/losses arising on re-translating the net 
 Currency translation reserve  assets of overseas operations into US Dollars. 
Accumulated losses             Cumulative net gains and losses recognised in 
                               the consolidated statement of financial 
                               position. 
 

12. Events after the balance sheet date

 

There were no significant post balance sheet events to report.

 

This report will be available on our website at www.altyngold.uk

 
ALTYNGOLD PLC 
 Company information 
 
 
 Directors                  Kanat Assaubayev           Chairman 
                            Aidar Assaubayev           Chief executive officer 
                            Sanzhar Assaubayev         Executive director 
                            Ashar Qureshi              Non-executive director 
                            Thomas Gallagher           Non-executive director 
                            Victor Shkolnik            Non-executive director 
 
 Secretary                  Rajinder Basra 
Registered office and      Company number: 05048549 
number                     28 Eccleston Square 
                           London SW1V 1NZ 
                           Telephone: +44 208 932 
                           2455 
 
 Company website            www.altyngold.uk 
                           10 Novostroyevskaya 
 Kazakhstan office         Sekisovskoye Village 
                           Kazakhstan Telephone: +7 
                           (0) 72331 27927 Fax: +7 
                           (0) 72331 27933 
 
 Auditor                    BDO LLP, 
                            55 Baker Street, 
                            London W1U 7EU 
                           Neville Registrars 
 Registrars                Neville House Steelpark 
                           Road Halesowen West 
                           Midlands B62 8HD 
                           Telephone: +44 (0) 121 
                           585 1131 
                           NatWest Bank plc London 
 Bankers                   City Commercial Business 
                           Centre 7th Floor, 280 
                           Bishopsgate London EC2M 
                           4RB LTG Bank AG 
                           Herrengasse 12 FL-9490, 
                           Vaduz Principal of 
                           Liechtenstein 
 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210905005016/en/

 
    CONTACT: 

Altyn Plc

 
    SOURCE: Altyn Plc 
Copyright Business Wire 2021 
 

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