TIDMALTN
AltynGold plc
("Altyn" or the "Company")
Results for the year ended 31 December 2021
AltynGold Plc (LSE:ALTN) an exploration and development company,
is pleased to announce its results for the year ended 31 December
2021.
Highlights
Financial highlights
-- Turnover increased in the year to US$50m (2020: US$30m) an
increase of 67%.
-- 27,747oz of gold sold (2020: 16,535oz), an increase of
68%.
-- Average gold price achieved (including silver), US$1,803oz,
(2020: US$1,816oz).
-- The Company made a profit before tax of US$18.3m (2020:
US$3.3m).
-- Adjusted EBITDA (Earnings before interest, tax, depreciation
and amortisation) of US$26.4m (2020: US$13.5m).
-- The Group repaid borrowings of US$7.9m (2020: US$3.4m).
-- Capital expenditure in the year amounted to US$8.1m (2020:
US$8.6m).
Operational highlights
-- Ore processed 571,000t (2020 506,000t).
-- Gold poured 28,450oz, (2020: 17,028oz) a 67% increase
year-on-year.
-- Mined gold grade 1.97g/t, (2020: 1.57g/t).
-- Operating cash cost US$649/oz, (2020: US$800/oz).
-- Gold recovery rate 83.05% (2020: 80.44%).
Underground development & exploration
-- Transport decline No.1 was developed and is now at 117masl on
ore bodies 3-8, transport decline 2 is now at 134masl, opening up
significant reserves at ore body 11.
-- Development of the shaft and tunnelling amounted to 6,209
linear metres.
-- Blast hole drilling at Sekisovskoye amounted to 119,340
linear metres.
-- Extensive maintenance and improvement works were carried out
to maintain production safely and efficiently.
-- Exploration work at Teren-Sai continued with the drilling of
22,580m linear metres of exploratory drilling.
Further Information:
For further information please contact:
AltynGold Plc
Rajinder Basra
+44 (0) 203 432 3198
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.
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.
To read more about AltynGold Plc please visit our website
www.altyngold.uk
CHAIRMAN'S STATEMENT
Given the backdrop of the COVID-19 pandemic, 2021 was pencilled
in by many Companies to potentially be a difficult trading year.
Indeed for some sectors this has been the case, in relation to
AltynGold, due to the careful management of its resources and
deployment of its fundraising into new equipment and infrastructure
improvements, the Company has been able to generate a significant
uplift in its revenue and profits. The primary driver to the
increase in revenues in the current year has been the increase in
production and grades achieved.
The Company is particularly pleased with the principal key
performance indicators in the majority of cases exceeding the
budgets that were set for the year. The Company generated an EBITDA
in excess of US$26m (2020: US$13.5m) on a turnover of US$50m (2020:
US$30m).
During the year the Company reviewed the staffing structure
which led to a number of changes at head office in terms of grade
and departmental structures. At Board level, after a review, two
new Non-Executive directors were appointed to complement the skills
and expertise of the existing Board. This resulted in the
employment of the Company's first female Director Maryam Buribayeva
who, together with Vladimir Shkolnik, will monitor and assess the
Company's environmental obligations. The Board sees its climate
change and environmental obligations has increasing importance in
the future and will monitor this closely, especially in light of
the new environmental laws introduced by the Kazakhstan government
in July 2021.
The Company is changing and evolving and moving towards its
medium term plan for the extraction of 850ktpa. The budget for 2023
is set at 650ktpa, with the move to 850ktpa being planned
thereafter. With a stable cost base and a gold price consensus of
US$1,700 in the medium term the business model is evolving. Further
plant upgrades are scheduled for 2023 that will move the capacity
up to 1mtpa for Sekisovskoye in the longer term.
In terms of funding, there is sufficient cash generation to fund
the expanded operations at Sekisovskoye and service the debt for
existing operations.
In relation to Teren-Sai, from the exploration work and test
production results, we believe the asset will add significantly to
the profitability of the Company. The development of Teren-Sai will
require additional funding initially. This can be met by the
Company's own resources, however it will require further external
funding to bring it fully on stream. With the Company gearing set
to go down with the repayment of the bond listed on AIX and the
scheduled repayment of the bank borrowings, the Company are looking
at a number of possibilities to raise further funds.
The Company is set to move forward having established a strong
platform for growth, from a review and strengthening of its
management and human resources, keeping tight controls over its
operational structure and ensuring that the right level of
financing is in place. The growth and prosperity of the Company are
always balanced by the Company's obligations to all stakeholders
and wider environmental issues which are growing in importance.
Kanat Assaubayev
Chairman
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
The Company achieved its principal goals in relation to its
current operations at Sekisovskoye being that of processing ore of
571ktpa (budget 570kpta), and producing gold of 34,258oz (target
33,634oz). The step up in ore extraction and the subsequent
processing of the ore has led to a marked change in the
profitability of the Company. The Company profits have climbed to
US$18.3m (2020: US$3.3m) and EBITDA has moved to US$26.4m from last
year's level of US$13.5m.
In relation to Teren-Sai the exploration program has proved
fruitful, and the extension of the licence and move to a commercial
discovery in Area no2 is being processed. Initially the areas will
be stripped, as the initial step to make it ready for ore
extraction. Further plans will be put in place once the licence is
acquired for Area No. 2. In relation to the other areas of
interest, further exploration drilling is to be continued.
During the year a comprehensive review was undertaken to assess
the human resources requirements of the Company. The review ranged
from the assessment of the Board, head office function and the
production workforce. This resulted in changes to the Board, with
the employment of the Company's first female Director. In relation
to head office, staff were employed to deal with the financial and
regulatory requirements of the Company. Fewer staff were required,
but the pay grades did increase to attract the calibre of staff
required. The increase at the production site was a result of the
greater volume of processing.
The Company drew down the balance of its facilities with Bank
Center Credit at the start of the year, and took on a short term
working capital loan at the start of the year repayable in
September 2022. The EBITDA is generating funds to repay the loans
during the year, finance its capital commitments and repay the AIX
bond in December 2022. In the current period factors that will have
a positive effect on the Company's profitability in the forthcoming
year are the devaluation of the Kazakh Tenge against the US Dollar
and the increase in the gold price, currently trading at a higher
rate than the average achieved in 2021 of US$1,803oz.
Economic outlook
In relation to COVID-19 the restrictions have largely eased and
there was little impact on the productivity of the Company. A
mention should also be made of the unrest which occurred at the
start of 2022 in Kazakhstan, which was largely contained to Almaty.
The Company was largely insulated from the effects of any lockdowns
and restrictions imposed. The Company is aware of its wider social
duties and obligations and is a responsible employer in this
regard, maintaining good relationships with its workforce.
With regard to the possible impact on the Company's operations
that may arise out of the conflict that has arisen in Ukraine and
sanctions imposed in Russia. On a macro scale Kazakhstan as a
country has close ties with Russia, and thus the devaluation of the
Russian Rouble has had an effect on devaluing the Kazakh Tenge
against the US Dollar, and there has been an upward push on the
price of an ounce of gold, which is currently trading in the range
of US$1,950oz. At a Company level, the trading with Russia has been
reviewed and alternative sources put in place for the small value
of consumables purchased from Russia. There is no reliance on
Russian companies in terms of the supply of capital equipment,
parts or financing. All sales will continue under the current off
take agreement with all sales made in Kazakhstan in US Dollars.
Mine development
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 6,209 linear metres.
-- Blast hole drilling of 119,340 linear metres.
-- Exploration drilling was carried out and amounted to 18,943
linear metres.
-- Backfilling of voids was carried out in the period amounting
to a volume of 64,404m.
During this period the Company has been concentrating on
developing ore bodies 3-8 at horizons 117masl-178masl and ore body
11 at horizons 134masl-174masl.
The transport decline No.2 was extended by 343 linear metres
allowing the access of 640,000 tons of ore. Similarly transport
decline No. 1 was extended by 391 linear metres opening up
accessible reserves of 163,000 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.
The key production figures are shown below:
Mining results ore extraction
2021 2020
Ore mined T 571,035 506,050
Gold grade g/t 1.94 1.57
Silver grade g/t 1.81 1.08
Contained gold oz 35,580 25,555
Contained silver oz 33,296 17,525
Mining results processing
2021 2020
Crushing T 534,426 421,040
Milling T 541,576 420,256
Gold grade g/t 1.97 1.58
Silver grade g/t 1.63 1.13
Gold recovery % 83.05 80.44
Silver recovery % 73.54 72.81
Contained gold oz 34,258 21,355
Contained silver oz 28,408 15,253
Gold Poured oz 28,450 17,028
Silver poured oz 20,891 11,180
Projected capital expenditure
Total 2022 2023
US$m US$m US$m
Prospect drilling 2.3 1.4 0.9
Underground development 7.2 5.3 1.9
Infrastructure 5.2 0.4 4.8
Ore handling facilities 14.0 -- 14.0
Process plant incremental expansion 9.0 2.4 6.6
Teren-Sai exploration program 0.4 0.4 --
Total 38.1 9.9 28.2
Exploration -- Teren-Sai
During the year the Company conducted exploration drilling and
core drilling at three areas within the exploration site. In total
22,500m of pneumatic drilling and 7,500m of core drilling was
planned, the actual results were 22,580m and 7,560m
respectively.
The Company finalised its core drilling in Area no.2 in January
and February drilling 1,520m of core samples, and conducted further
core drilling in Area no. 5 amounting to 1,140m. Area No.5 core
samples are being analysed with a view to also moving this to the
commercial discovery phase, however due to time constraints in
finalising and analysing the drilling results during winter and the
need to complete all necessary paperwork to extend the licences
which have expired in May 2022, the Company has concentrated on
finalising the development of Area No2, and will progress the
development of Area no.5 in the future.
The principal focus of the work program in the current year was
to look at the prospective site at No. 6 where extensive
exploration drilling was carried out amounting to 22,580m, this was
followed up by 3,700m of core drilling towards the end of the year.
Sampled grades obtained from the core samples extracted ranged from
1.4g/t to 2.4g/t.
The exploration licence at Teren-Sai expired in May 2022, under
the contract the Company has the right to renew the licence. The
Company has submitted an application to extend the licence in order
to conduct further site works in Teren Sai and to further define
the areas of interest to the Company. In relation to Area No.2 the
Company is considering moving to the production phase after further
testing, and to the remaining sites of interest an extension to the
exploration licence. As noted in the prior year, the results from
the test production for Area No. 2 indicated an average grade of
1.8g/t, with the initial production being obtained from open pit
workings.
The move to a production licence will require additional capital
expenditure in order to build a new processing plant, a tailings
dam and other infrastructure requirements in order to process the
ore efficiently. The test production that was processed at
Sekisovskoye has shown that the ore can be processed using the same
technology as that currently being employed at Sekisovskoye. It is
the intention of the Company to make initial preparations for site
development, however moving to the full production phase will
require further fund raising to achieve its full potential. The
Company is in the process of looking at lines of funding to move
the project forward.
Capital requirements
The capex requirements for the next two years are detailed in
the table below. The budgeted plans foresee the Company expanding
ore extraction and production to a capacity of 1mtpa for
Sekisovskoye in 2023, at which point there will also be further
investment in the mining equipment needed to process the increase
in ore output.
In relation to the development of its prospective resource at
Teren-Sai, the current capex budget allows for the continuation of
exploration at the site. Further development of the site at
Teren-Sai is dependent on raising further funding, in addition to
that which will be provided from cash flow from existing
operations.
Longer term plan
The Company has a had a successful year, with the capex
investment increasing ore extraction from the Sekisovskoye site
which increased to 570ktpa. The aim remains to move this up to
1mtpa, and budgets have been drawn up and funds allocated to expand
the existing capacity of the processing plant to 1mtpa within two
years. The longer term aim is to increase the ore extraction
towards the 2mtpa within a time frame of 6 years.
The capex required as outlined above amounts to US$38m, and will
be largely met from funds raised from operations. In addition to
this an amount of US$75m will be required to bring the Teren-Sai
project on stream, as it will require new processing facilities and
infrastructure to be developed at the Teren-Sai site. In the
initial period the site will be stripped and made ready for open
pit production in order to move to production efficiently once the
necessary funding is in place. The brokers who are providing
sponsored research and opening up opportunities for investor
funding will play a key role in moving the projects forward.
The Board are constantly looking to diversify and invest in new
and complementary operations in Kazakhstan and internationally,
however the primary driver at present is to bring the Kazakhstan
gold sites, as outlined above, to their full potential.
FINANCIAL PERFORMANCE
Key performance indicators (KPIs)
Annual gold sales (oz)
27,747
2021 27,747
2020 16,535
2019 10,500
Annual gold poured (oz)
28,450
2021 28,450
2020 17,027
2019 10,537
Revenue (US$m)
US$50
2021 50.0
2020 30.0
2019 14.9
Operating cash cost of production (US$/oz)
US$649
2021 649
2020 800
2019 854
EBITDA (US$m)
US$26.4
2021 26.4
2020 13.5
2019 3.3
Net assets (US$m)
US$55.2
2021 55.2
2020 35.3
2019 33.3
The significant investment into plant upgrades and new capital
and infrastructure development during the year has resulted in the
Company meeting its targeted production levels and in a number of
areas exceeding them. The upgrades and new equipment allowed for
more targeted mining of the ore bodies resulting in higher grades
and recoveries being achieved in the year.
The ore mined was 571,000t against the budget of 570,000t, the
resulting ore processed of 534,000t was a significant improvement
on the prior year of 506,000t. The current run rate is indicating a
higher level of ore to be mined in the year to 31 December 2022.
This is a key deliverable for the Company and the management are
pleased with the performance in the year and are keen on driving
this forward to higher levels.
Gold processed has increased by 60% from the prior year to
34,258oz (2020: 21,355oz), the Company had budgeted 33.635oz. A
significant increase, the increase in output was accompanied by a
higher level of recovery of 83.05% increasing from 80.44% in the
prior year and the budgeted recovery rate of 82.13%. The upgrades
of the plant and capital investment have paid a key role in
increasing the levels being achieved.
During 2021, the Company sold 27,747oz of gold (2020: 16,535oz).
The average price achieved per oz was similar to that of last year
at US$1,803 (2020:US$1,816). The increase in profitability in the
Company has been achieved through a volume increase in production,
since the year end the average price of gold has increased and is
currently trading in the region of US$1,950 to US$2,000. It is
difficult to predict how the price of gold will move in the future
but the current sentiment is positive.
There were again no changes to the sales off-take agreement
currently in place with the Kazakh national refinery, which
continues to take all of the Company's output. As in the prior
year, sales are translated at the spot US$ market rate at the point
the gold is sold.
The total cash cost of production, which includes administrative
costs but excludes depreciation and provisions, amounted to
US$834/oz, (2020: S$970oz). The operating cash cost excluding
administrative costs amounted to US$649/oz (2020: US$800/oz). The
Kazakh Tenge in recent years has been weakening against the US
Dollar in 2020 it averaged 413Kzt to one US Dollar weakening to an
average of 426Kzt in 2021, it is currently in the region of 440Kzt.
As the Company's revenues are earned in US Dollars and a
significant cost base is in Kazakh Tenge, it will have the benefit
of reducing the cost base of the Company.
The administrative costs have increased in the year by US$2.3m
as a result of four principal factors. First, during the year the
Company as part of its wider responsibilities to the community the
Company agreed to assist in the building of a wing of a new
school/university building with an overall cost of US$550,000.
Second, there was an increase in wages and salaries by US$860,000
principally as a result of the increase in the number of staff as
well as the recruitment of experienced and skilled employees at a
higher salary rate. The third factor relates to various
professional fees of US$480,000 relating to sponsored research in
order to increase the Company profile and attract new investors and
the development of further funding opportunities. The final factor
was travel cost returning to a normal level as the Company emerged
from restrictions imposed by COVID, translating into an increase of
US$540,000.
The Company has reported a net profit of US$18.3m before tax
(2020: US3.38m) with a gross profit of US$27.8m (2020: US$12.4m).
As noted above the principal drivers to the better results was the
increased production, grades and recoverability achieved from the
investment of the capex.
The adjusted EBITDA increased to US$26.4m, (2020: US$13.5m)
details of the calculation are shown in note 13 of the financial
statements.
In relation to cash at the year end this was US$3.6m (2020:
US$7.2m). Cash generation as indicated by EBITDA was much higher in
the current year. The utilisation of funds by the Company was a
result of a net repayment of loans and capital expenditure in the
year and a substantial prepayment in relation to production
facilitation for the forthcoming period. These have resulted in a
drop in the cash balance at the year end, the balance is expected
to increase as the prepayment is unwound and as a result of higher
revenues from the increase in gold prices.
The bonds as listed on AIX of US$10m are due for repayment in
December 2022. During the year net borrowings were repaid of
US$1.6m. The interest incurred on the debt in 2021 amounted to
US$2.5m (2020: US$4.1m) the reduction was due to repayment of the
bonds to Amrita Investments Limited and African Resources Limited,
the balance of loans being repaid in H1 2021.
The Company managed to perform to its plan as set out and
increase revenues and profitability, dealing with any issues as
posed by the government restrictions involving COVID-19 and at the
same time looking after the welfare of the staff. The net assets of
the Company increased by US$19.9m.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2021
2021 2020
Note $000 $000
Revenue 3 50,290 30,032
Cost of sales (22,496) (17,610)
Gross profit 27,794 12,422
Administrative expenses (5,138) (2,826)
Share based payment -- (2,400)
Impairments (734) (34)
Operating profit 21,922 7,162
Foreign exchange (366) (1,508)
Finance expense (3,289) (2,324)
Total finance cost (3,655) (3,832)
Profit before tax 18,267 3,330
Taxation receipt/(expense) 56 (392)
Profit for the year attributable to the equity
holders of the parent 18,323 2,938
Profit per ordinary share
Basic 67.04c 11.27c
Diluted 67.04c 10.97c
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
2021 2020
Note $000 $000
Profit for the year 18,323 2,938
Items that may be reclassified subsequently to the
income statement
Currency translation differences arising on translations of
foreign operations (1,491) (3,846)
Currency translation differences on translation of foreign
operations relating to tax 3,038 (1,011)
1,547 (4,857)
Total comprehensive profit/(loss) for the year 19,870 (1,919)
Total comprehensive profit/(loss) attributable to:
Equity holders of the parent 19,870 (1,919)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2021
2021 2020
(Registration number: 05048549) Note $000 $000
Assets
Non-current assets
Intangible assets 5 13,346 12,849
Property, plant and equipment 6 35,350 32,092
Deferred tax assets 8,189 5,311
Trade and other receivables 3,925 6,700
Restricted cash 70 13
60,880 56,965
Current assets
Inventories 9,121 5,468
Trade and other receivables 21,530 7,182
Cash and cash equivalents 3,593 7,154
34,244 19,804
Total assets 95,124 76,769
Equity and liabilities
Current liabilities
Trade and other payables (5,684) (6,705)
Provisions (232) (151)
Loans and borrowings (15,087) (5,833)
(21,003) (12,689)
Non-current liabilities
Vat payable (242) (230)
Other payables (1,000) (492)
Provisions (5,453) (4,763)
Loans and borrowings (12,221) (23,260)
(18,916) (28,745)
Total liabilities (39,919) (41,434)
Equity
Share capital (4,267) (4,267)
Share premium (152,839) (152,839)
Merger reserve 282 282
Other reserves -- (333)
Foreign currency translation reserve 51,412 52,959
Accumulated losses 50,207 68,863
Equity attributable to owners of the company (55,205) (35,335)
Total equity and liabilities (95,124) (76,769)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Share
Currency based
Share Share Merger translation payment Other Accumulated Total
capital premium reserve reserve reserve reserves losses equity
$000 $000 $000 $000 $000 $000 $000 $000
At 1 January
2020 4,055 151,476 (282) (48,102) -- 333 (74,201) 33,279
Profit for the
year -- -- -- -- -- -- 2,938 2,938
Other
comprehensive
loss -- -- -- (4,857) -- -- -- (4,857)
Total
comprehensive
loss -- -- -- (4,857) -- -- 2,938 (1,919)
New share
capital
subscribed 13 62 -- -- -- -- -- 75
Share based
payment
charge -- -- -- -- 2,400 -- -- 2,400
Share options
exercised 199 1,301 -- -- (2,400) -- 2,400 1,500
At 31 December
2020 4,267 152,839 (282) (52,959) -- 333 (68,863) 35,335
At 1 January
2021 4,267 152,839 (282) (52,959) -- 333 (68,863) 35,335
Profit for the
year -- -- -- -- -- -- 18,323 18,323
Other
comprehensive
income -- -- -- 1,547 -- -- -- 1,547
Total
comprehensive
income -- -- -- 1,547 -- -- 18,323 19,870
Transfer to
reserves -- -- -- -- -- (333) 333 --
At 31 December
2021 4,267 152,839 (282) (51,412) -- -- (50,207) 55,205
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2021
2020 2019
Note $000 $000
Cash flows from operating activities
Net cash flow from operating activities 6,797 4,245
Cash flows from investing activities
Acquisitions of property plant and equipment (5,502) (8,559)
Acquisition of intangible assets (830) (1,271)
Proceeds from test production -- 165
Net cash flows from investing activities (6,332) (9,665)
Cash flows from financing activities
Interest paid (2,411) (3,740)
Loans received 6,356 16,903
Loans repaid (7,985) (3,431)
Proceeds of share issue -- 1,500
Commission paid -- (588)
Net cash flows from financing activities (4,040) 10,644
Net (decrease)/increase in cash and cash equivalents (3,575) 5,224
Cash and cash equivalents at 1 January 7,154 1,934
Effect of exchange rate fluctuations on cash held 14 (4)
Cash and cash equivalents at 31 December 3,593 7,154
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2021
1 General information
AltynGold Plc (the "Company") is a Company incorporated in
England and Wales under the Companies Act 2006. The financial
information set out above for the years ended 31 December 2021 and
31 December 2020 does not constitute statutory accounts as defined
in Section 434 of the Companies Act 2006, but is derived from those
accounts. Whilst the financial information included in this
announcement has been compiled in accordance with international
financial reporting standards adopted pursuant to Regulation (EC)
in conformity with the requirements of the Companies Act 2006, this
announcement itself does not contain sufficient financial
information to comply with IFRS. A copy of the statutory accounts
for 2020 has been delivered to the Registrar of Companies and those
for 2021 will be layed before the shareholders at the Annual
General Meeting. The full audited financial statements for the
years end 31 December 2021 and 31 December 2020 do comply with
IFRS.
2 Going concern
The Group had a successful year increasing revenues by 67% from
the prior year to US$50m, resulting in an increase of adjusted
EBITDA to an amount in excess of US$26m. The Group did enter into
some further short term financing at the start of the year from the
Bank Center Credit in order to smooth the working capital of the
Group. The majority of this is repayable by September 2022. This
provided positive funding to the Group in the year, the adjusted
EBITDA is expected to continue at increasing levels in the future
as production grows, coupled with a strong gold price and the
devaluation of the Kazakh Tenge.
At the year-end the Group had cash resources of US$3.6m (2020:
US$7.2m) available. The decrease in funds from the prior year is
principally due to prepayments made to secure the services of
subcontractors in relation to future mine development and ore
extraction, as well as the repayment of loans in the year.
The Board have reviewed the Group's forecast cash flows for the
period to September 2023, which include the capital and interest
repayments to be made in relation to the Group's borrowings. The
principal loan that is due for repayment is the bond raised on the
Kazakhstan Stock exchange of US$10m which is repayable in December
2022. Capital and operating costs are based on approved budgets and
latest forecasts in the case of 2022 and current development plans
in the case of 2023. There are significant judgements inherent in
the cash forecast model, the significant assumptions are the
anticipated level of production to be achieved and the gold price.
In the case of planned production profiles these are based on a
planned increase from current levels being achieved and in the
latter the consensus view of the anticipated gold price in the
short/medium term.
Based on the Group's cash flow forecasts, the Directors believe
that the combination of its current cash balances, net cash flows
from operations, and increased production based on projections of
future growth, are sufficient for the Company to achieve its
current plans and cash requirements including the repayment of
loans which are due for repayment in the period.
The Group's adapted well to the impact of COVID-19, and there
was little impact on the operations of the Group from COVID-19, the
Ukraine conflict or the civil unrest that occurred in Kazakhstan in
the early part of the year. However the Board have considered
possible stress case scenarios that they consider may be likely to
impact on the Group's operations, financial position and forecasts.
Factors considered are operational disruptions that may lower the
production at the mine and possible impact on the price of gold if
this was to fall. From the analysis undertaken the Board have
concluded that the Group will be able to continue to trade by the
careful management of its existing resources. The stress tests
included the following scenarios amongst others, a fall in the gold
price to US$1,561oz, a drop in budgeted production by 20% or a
combination of both factors together. In each case the Group would
not experience a cash shortfall in either scenario. If required the
Group would manage its resources, reducing investment and managing
its payables in order to maintain liquidity.
The Board therefore considers it is appropriate to adopt the
going concern basis of accounting in preparing these financial
statements.
3 Revenue
The analysis of the Group's revenue for the year from continuing
operations is as follows:
2021 2020
$000 $000
Sale of gold and silver 50,031 29,790
Other sales 259 242
50,290 30,032
Included in revenues from sale of gold and silver are revenues
of US$50,031,000 (2020: US$29,790,000) which arose from sales of
precious metals to one customer based in Kazakhstan. Other sales
amounted to US$259,000 (2020: US$242,000) and related to lease and
rental income.
4 Profit per ordinary share
The calculation of basic and diluted earnings per share from
continuing operations is based upon the retained profit from
continuing operations for the financial year of US$18.3m (2020:
US$2.9m).
The weighted average number of ordinary shares for calculating
the basic earnings per share in 2021 and 2020 is shown below.
The diluted earnings per share in 2020 arose as the convertible
loan notes had conversion rights, which would have resulted in an
additional 702,650 shares being issued, the convertible loan notes
were all redeemed in the year. There are currently no share options
in issue that would result in diluted earnings per share.
2021 2020
No. No.
Basic 27,332,933 26,070,079
Diluted 27,332,933 26,772,729
5 Intangible assets
Teren-Sai Exploration and
geological data evaluation costs Total
Group US$000 US$000 US$000
Cost or valuation
At 1 January 2020 9,931 7,488 17,419
Additions -- 1,271 1,271
Amortisation capitalised -- 608 608
Currency translation (905) (717) (1,622)
At 31 December 2020 9,026 8,650 17,676
At 1 January 2021 9,026 8,650 17,676
Additions -- 830 830
Amortisation capitalised -- 585 585
Currency translation (225) (240) (465)
At 31 December 2021 8,801 9,825 18,626
Amortisation
At 1 January 2020 4,476 -- 4,476
Amortisation charge 608 -- 608
Currency translation (422) -- (422)
Revenue relating to test
production -- 165 165
At 31 December 2020 4,662 165 4,827
At 1 January 2021 4,662 165 4,827
Amortisation charge 585 -- 585
Currency translation (125) (7) (132)
At 31 December 2021 5,122 158 5,280
Carrying amount
At 31 December 2021 3,679 9,667 13,346
At 31 December 2020 4,364 8,485 12,849
At 1 January 2020 5,455 7,488 12,943
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 mining operations of
Sekisovskoye. The Company obtained a contract for exploration and
evaluation on the site in May 2016 from the Kazakh authorities, the
licence expired in May 2022. The Company has the right to extend
the licence and has submitted the necessary paperwork to extend the
exploration phase in the areas of interest within the Teren-Sai ore
field with a view to moving area No. 2 to the production phase.
The value of the geological data purchased is in the opinion of
the Directors the value that would have been incurred if the
drilling had been undertaken by a third party (or internally). The
Company has continued to develop the site with a CPR completed in
2019 on one of the fifteen target zones area 2, which includes 3
potential targets, and further exploration works in the other
areas. Full details are given in the mineral resources statement
included as part of the Annual Report.
The directors consider that no impairment is required taking
into account the CPR results, exploration and planned production in
the future. The write off of the geological data over the period of
the licence to the end of the (optional) extended licence period
May 2027 is appropriate. After that period the costs amortised are
capitalised in line with the Company's accounting policy within the
subsidiary TOO GMK Altyn MM LLP, there are no impairment
indicators.
6 Property, plant and equipment
Equipment, Plant,
Freehold fixtures machinery
Mining Land and and and Assets under
properties buildings fittings buildings construction Total
Group US$000 US$000 US$000 US$000 US$000 US$000
Cost or
valuation
At 1 January
2020 13,949 24,786 9,945 7,501 1,067 57,248
Additions 1,622 166 2,838 2,717 1,246 8,589
Disposals -- -- (70) (180) -- (250)
Transfers (764) 1,383 (26) 18 (471) 140
Transfer from
inventories -- -- -- -- 241 241
Currency
translation (1,543) (2,285) (907) (734) (110) (5,579)
At 31
December
2020 13,264 24,050 11,780 9,322 1,973 60,389
At 1 January
2021 13,264 24,050 11,780 9,322 1,973 60,389
Additions 3,356 197 2,147 653 2,187 8,540
Disposals -- -- (655) (4) -- (659)
Transfers -- 1,441 -- -- (1,441) --
Transfer from
inventories -- -- -- -- 170 170
Currency
translation (611) (654) (203) (261) (67) (1,796)
At 31
December
2021 16,009 25,034 13,069 9,710 2,822 66,644
Depreciation
At 1 January
2020 2,441 10,563 9,204 4,724 -- 26,932
Charge for
year 520 1,885 773 772 -- 3,950
Eliminated on
disposal -- -- (70) (180) -- (250)
Currency
translation (232) (997) (805) (441) -- (2,475)
Transfers 140 (80) 80 -- -- 140
At 31
December
2020 2,869 11,371 9,182 4,875 -- 28,297
At 1 January
2021 2,869 11,371 9,182 4,875 -- 28,297
Charge for
the year 699 2,188 817 782 -- 4,486
Eliminated on
disposal -- (2) (655) (4) -- (661)
Currency
translation (218) (238) (239) (133) -- (828)
Transfers -- -- -- -- -- --
At 31
December
2021 3,350 13,319 9,105 5,520 -- 31,294
Carrying
amount
At 31
December
2021 12,659 11,715 3,964 4,190 2,822 35,350
At 31
December
2020 10,395 12,679 2,598 4,447 1,973 32,092
At 1 January
2020 11,508 14,223 741 2,777 1,067 30,316
Included within the additions to mining properties is an amount
of US$430,000 relating to an increase in the abandonment and
restoration provision, see note 21.
Capitalised cost of mining property are amortised over the life
of the licence from commencement of production on a unit of
production basis. This basis uses the ratio of production in the
period compared to the mineral reserves at the end of the period.
Mineral reserves estimates are based on a number of underlying
assumptions, which are inherently uncertain. Mineral reserves
estimates take into consideration estimates by independent
geological consultants. However, the amount of mineral that will
ultimately be recovered cannot be known until the end of the life
of the mine.
Any changes in reserve estimates are, for amortisation purposes,
treated on a prospective basis. The recovery of the capitalised
cost of the Company's property, plant and equipment is dependent on
the development of the underground mine.
The Directors are required to consider whether the non-current
assets comprising, mineral properties, plant and equipment have
suffered any impairment. The recoverable amount is determined based
on value in use calculations. The use of this method requires the
estimation of future cash flows and the choice of a discount rate
in order to calculate the present value of the cash flows. The
directors considered entity specific factors such as available
finance, cost of production, grades achievable, and sales price.
The directors have concluded that no adjustment is required for
impairment.
View source version on businesswire.com:
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CONTACT:
AltynGold Plc
SOURCE: AltynGold Plc
Copyright Business Wire 2022
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