TIDMAMC
RNS Number : 2633D
Amur Minerals Corporation
25 June 2019
25 June 2019
AMUR MINERALS CORPORATION
("Amur" or the "Company")
AUDITED FINAL RESULTS FOR THE YEARED 31 DECEMBER 2018
The 2017 field season resulted in an impressive 50% expansion of
the Kun-Manie resource base to just over 1.5 million tonnes of
nickel equivalent averaging 1.02% resulting in its being ranked
among the five largest undeveloped nickel sulphide projects in the
world. Although this establishes Kun-Manie as a large scale deposit
by global standards we felt that there some important and valuable
objectives still to be explored and proven for the 2018 field
season. Primarily, that the Ikenskoe ("IKEN") and Kubuk ("KUB")
deposits form one continuous open pit mineable deposit.
2018 Operational Developments
Substantial Field Season and Resource Expansion
The updated Mineral Resource statement released in March 2018,
incorporating the 2017 field season, provided a 50% increase in the
JORC compliant resource to 155 million ore tonnes with a nickel
equivalent ("Ni Eq") content of 1.58 million tonnes averaging 1.02%
Ni Eq. In June 2018 we released an updated Mining Potential
statement based on this new Mineral Resource statement. In February
2019 we released an updated Pre- Feasibility Statement ("PFS")
based on these new 2018 resource and mining potential numbers (the
Executive Summary of this PFS can be downloaded from Amur's
website). While the PFS was being compiled, we utilised the
opportunity to further enhance the Mineral Resource with additional
drilling.
The 2018 field season was an even bigger undertaking than the
year before and was targeted at converting a large block of
inferred resource to indicated and very importantly determining if
the Ikenskoe and Kubuk deposits are connected and the resultant
linking of the two deposit was suited to allowing for a single open
pit operation. Whilst we awaited final independent verification of
the 2018 drill results, we reported that as much as 30 million
tonnes of inferred resource has been converted to indicated and
that an additional 25 million tonnes for new resource has been
defined linking the Ikenskoe and Kubuk deposits. All drilling was
implemented to allow for its categorisation as indicated, therefore
making it suitable for inclusion in the Mining Ore Reserves. The
successfully linking of the two deposits will potentially form one
large 4-kilometre-long pit.
Also, as part of the 2018 drill program, a large scale
metallurgical samples from Ikenskoe, Kubuk and the area between
these two deposits was collected to be added to similar samples
from Maly Kurumkon / Flangovy and Vodorazdelny. This bulk sample
now totalling approximately 15 tonnes will be used in a number of
studies to determine final processing design and the potential to
produce a separate copper only concentrate stream.
We feel strongly that the newly identified mineralisation
provides the potential to substantially enhance the February 2019
PFS which demonstrates Kun-Manie is already a sufficient resource
that is economically viable. With the robust results reported
within the PFS, we have begun to advance our plans and activities
to identify and engage with potential strategic partners.
Financial Overview
As at 31 December 2018 the Company had cash reserves of
US$1.3million, down from the US$2.6 million at the start of
2018.
In February 2018 the Company entered into a convertible loan
facility of up to US$10 million, with an initial advance of US$4
million being drawn. As at 31 December 2018 50.9 million new
ordinary shares have been issued by the Company in settlement of
US$2.4 million in principal and accrued interest. As at 31 December
2018 the balance of the loan, net of issue costs, stood at US$1.7
million. In February 2019, the Company restructured the outstanding
US$1.2 million of the initial advance and drew down a further
US$0.5 million (net of implementation fee). A further 10.9 million
warrants with an exercise price of 3.76 pence per share were issued
to the investors as part of this restructuring and second draw
down.
In April 2018 the Board and executive management entered into a
12 month share purchase program whereby an independent broker would
purchase GBP5,000 of shares from the open market on the 20th of
each month. As at reporting date 1.1 million shares have been
purchased under the programme.
In 2018 the Company spent US$2.0 million on exploration costs
(2017: US$3.23 million) and US$48,000 on capital equipment (2017:
US$470,000).
In the Consolidated Statement of Comprehensive Income an
exchange loss on the translation of foreign operations of US$4.2
million was recorded (2017: US$1.2 million gain). This was due to
the weakening of the Russian Rouble relative to the US Dollar.
Outlook
The work that we are undertaking in 2019 is orientated towards
preparing and positioning the Company for the next stage of its
development - strategic investment and project financing. To date
this has involved management, with support from the Group's
financial advisor Medea Capital Partners Ltd, engaging with
external parties who provide long term support for projects
transitioning from exploration to production and beyond. These
engagements have for the most part been centred around developing
the external parties' knowledge of Kun-Manie and building personal
relationships. We have benefited in return by gaining current
knowledge of the global markets for nickel and just as importantly,
the end users of nickel.
With those relationships in place, and new ones being developed,
we will in 2019 be able to undertake focused activities that will
support the Company's aim of attracting the right sort of strategic
investment and partnering. It is important that the Company is in
as strong a position as it can attain for this next stage of
development as success here will begin to unlock the considerable
value held within the Kun-Manie project. The Board and management
believe that the Company is well positioned given the size and
location of Kun-Manie to capitalise on the growth in the nickel
market. We have been seeing clear indicators that recent increased
interest in nickel is now turning towards interest in the future
sourcing of nickel supply.
The PFS is a report on the current state of Kun-Manie's
development and it presents a robust picture of a large
nickel/copper sulphide project ready to advance toward and through
development and the value chain. However, the PFS is a living
document and we will be updating the Mineable Ore Reserves to
include the 2018 field season results which in turn will result in
an updated mine plan and project economics. Detailed metallurgical
work will also be undertaken to firstly determine if a separate
copper stream can be produced and if so what the economic impact
that would have as this could materially increase the revenue
potential of the copper. Secondly, the detailed flow sheet or ore
processing plant design will also be finalised. Both of these
studies will utilise the 15 tonne bulk sample acquired across all
deposits. Running concurrently with the metallurgical test work
various studies such as detailed logistics, road design and
environmental/social impact will also be undertaken.
This work will ultimately turn the PFS into a Bankable
Feasibility Study ("BFS") and will just as importantly be used to
produce the Permanent Conditions TEO, the Russian version of a BFS.
So although we do not foresee the need for any further drilling
this next stage of undertakings will provide the necessary
information to obtain Russian authorisation to commence
construction and implementation of a full-scale operation.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals Corp. S.P. Angel Corporate Finance LLP Blytheweigh
Robin Young CEO Ewan Leggat Megan Ray
Lindsay Mair Tim Blythe
+7 (4212) 755 615 +44 (0) 20 3470 0470 +44 (0) 20 7138 3203
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
2018 2017
US$'000 US$'000
Non-current assets
Exploration and evaluation assets 23,010 22,376
Property, plant and equipment 1,668 2,884
----------- ---------
24,678 25,260
----------- ---------
Current assets
Inventories 257 769
Other receivables 191 741
Cash and cash equivalents 1,257 2,555
----------- ---------
1,705 4,065
----------- ---------
Total assets 26,383 29,325
----------- ---------
Current liabilities
Trade and other payables 802 768
Convertible loan notes 1,663 -
Derivative financial liabilities 153 -
----------- ---------
2,618 768
----------- ---------
Net current assets (913) 3,297
----------- ---------
Non-current liabilities
Rehabilitation provision 146 176
Total liabilities 2,764 944
----------- ---------
Net Assets 23,619 28,381
=========== =========
Equity
Share capital 65,674 62,879
Share premium 4,904 4,904
Foreign currency translation reserve (15,476) (11,227)
Share options reserve 2,034 3,366
Retained deficit (33,517) (31,541)
----------- ---------
Total equity 23,619 28,381
=========== =========
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2018
2018 2017
US$'000 US$'000
Administrative expenses (2,153) (1,924)
Operating loss (2,153) (1,924)
Finance income 1 3
Finance costs (1,223) -
Fair value movements on derivative financial
instruments 67 767
Loss before taxation (3,308) (1,154)
Tax expense - -
Loss for the year attributable to owners
of the parent (3,308) (1,154)
============= ========
Loss per share (expressed in cents)
Basic and diluted (0.51) (0.20)
============= ========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
2018 2017
US$'000 US$'000
Loss for the year (3,308) (1,154)
============= ========
Other comprehensive income items that
may be reclassified to profit or loss
Exchange differences on translation of
foreign operations (4,249) 1,200
Total other comprehensive income for the
year (4,249) 1,200
Total comprehensive income for the year
attributable to owners of the parent (7,557) 46
============= ========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
2018 2017
US$'000 US$'000 US$'000 US$'000
Cash flows from operating activities
Payments to suppliers and employees (2,586) (2,703)
-------- --------
Net cash outflow from operating
activities (2,586) (2,703)
Cash flow from investing activities
Payments for exploration expenditure (2,003) (3,234)
Payments for property, plant and
equipment (48) (470)
Interest received 1 3
-------- --------
Net cash used in investing activities (2,050) (3,701)
Cash flow from financing activities
Cash received on issue of shares - 570
Issue of convertible loans, net 3,454 -
of issue costs
Net cash generated from financing
activities 3,454 570
-------- --------
Net decrease in cash and cash equivalents (1,182) (5,834)
Cash and cash equivalents at beginning
of year 2,555 8,199
Exchange gains/(losses) on cash
and cash equivalents (116) 190
-------- --------
Cash and cash equivalents at end
of year 1,257 2,555
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Share Share Foreign Share Retained Total
capital premium currency options deficit equity
translation reserve
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January
2017 60,293 4,904 (12,427) 3,575 (30,596) 25,749
--------- --------- ------------- --------- --------- --------
Year ended 31 December
2017:
Loss for the year - - - - (1,154) (1,154)
Other comprehensive
income:
Exchange differences
on translation of
foreign operations - - 1,200 - - 1,200
--------- --------- ------------- --------- --------- --------
Total Comprehensive
income for the year - - 1,200 - (1,154) 46
Issue of share capital 2,528 - - - - 2,528
Options expired - - - (209) 209 -
Exercise of options 58 - - - - 58
--------- --------- ------------- --------- --------- --------
Balance at 31 December
2017 62,879 4,904 (11,227) 3,366 (31,541) 28,381
========= ========= ============= ========= ========= ========
Share Share Foreign Share Retained Total
capital premium currency options deficit equity
translation reserve
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January
2018 62,879 4,904 (11,227) 3,366 (31,541) 28,381
--------- --------- ------------- --------- --------- --------
Year ended 31 December
2018:
Loss for the year - - - - (3,308) (3,308)
Other comprehensive
income:
Exchange differences
on translation of
foreign operations - - (4,249) - - (4,249)
--------- --------- ------------- --------- --------- --------
Total Comprehensive
income for the year - - (4,429) - (3,308) (7,557)
Issue of share capital 39 - - - - 39
Conversion of loan
notes 2,756 - - - - 2,756
Options expired - - - (1,332) 1,332 -
Balance at 31 December
2017 65,674 4,904 (15,476) 2,034 (33,517) 23,619
========= ========= ============= ========= ========= ========
1. Basis of prePARATION
a) General Information
Amur Minerals Corporation is incorporated under the British
Virgin Islands Business Companies Act 2004. The registered office
is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British
Virgin Islands.
The Company and its subsidiaries ("Group") locates, evaluates,
acquires, explores and develops mineral properties and projects in
the Russian Far East.
The Company is the 100% owner of Irosta Trading Limited
("Irosta"), an investment holding company incorporated and
registered in Cyprus. Irosta holds 100% of the shares in ZAO
Kun-Manie ("Kun-Manie"), an exploration and mining company
incorporated and registered in Russia, which holds the Group's
mineral licences.
The Group's principal place of business is in the Russian
Federation.
The Group's principal asset is the Kun-Manie production licence,
which was issued in May 2015. The licence is valid until 1 July
2035 and allows the Company's subsidiary, ZAO Kun-Manie, to recover
all revenues from 100% of the mined metal that specifically
includes nickel, copper, cobalt, platinum, palladium, gold and
silver. The Company's management are evaluating the project with a
view of determining an appropriate model for the development and
ultimate exploitation of the project.
b) Basis of Preparation
These financial statements have been prepared under the
historical cost convention, except for the valuation of derivative
financial instruments, on the basis of a going concern and in
accordance with International Financial Reporting Standards (IFRS)
and IFRIC interpretations issued by the International Accounting
Standards Board (IASB) as adopted by the European Union.
The financial statements are presented in thousands of United
States Dollars.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates. The areas involving a higher degree of judgement or
complexity, or where assumptions and estimates are significant to
the consolidated financial statements, are disclosed in note 3.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision only
affects that period, or in the period of revision and future
periods if the revision affects both current and future
periods.
c) Going concern
The Group operates as a natural resources exploration and
development group. To date, it has not earned significant revenues
and is considered to be in the final stages of exploration and
evaluation activities of its Kun-Manie project.
The Directors have reviewed the Group's cash flow forecast for
the period to 31 December 2020 and note that the Group's ability to
continue advancing its exploration and evaluation work program to
Definitive Feasibility Stage ("DFS") is dependent on its ability to
raise additional financing either through share placings with new
partners or combination of debt and equity financing from financial
institutions. The Group's cashflow forecast has been prepared on
the basis whereby the loan note will be converted in line with the
agreed schedule rather than redeemed for cash.
The Directors are currently in negotiations with a number of
parties in respect of raising further funds. Whilst progress is
being made on a number of potential transactions which would
provide additional funding to the Group, there are no binding
agreements in place.
These conditions indicate the existence of a material
uncertainty which may cast significant doubt over the Group's
ability to continue as a going concern. Based on the current
progress of the negotiations with potential investors and providers
of finance the Directors believe that the necessary funds to
provide adequate financing to continue with the current work
program on its Kun-Manie project will be raised as required and
accordingly they are confident that the Group will continue as a
going concern and have prepared the financial statements on that
basis.
The financial statements do not include the adjustments that
would result if the Group was not able to continue as a going
concern.
c) Loss per share
Basic and diluted loss per share are calculated and set out
below. The effects of warrants and share options outstanding at the
year ends are anti-dilutive and the total of 12.4 million (2017:
30.7 million) of potential ordinary shares have therefore been
excluded from the following calculations:
2018 2017
Number of shares
Weighted average number of ordinary
shares used in the calculation of basic
earnings per share 656,558,298 613,250,727
2018 2017
Earnings US$'000 US$'000
Net loss for the year from continued
operations attributable to equity shareholders (3,308) (1,154)
============ ============
Loss per share for continuing operations
(expressed in cents)
Basic and diluted earnings per share (0.51) (0.20)
d) Events after the reporting date
On 12 January 2019, pursuant to the convertible loan agreement
entered into on 13 February 2018, the Company issued 13,200,051 new
Ordinary Shares to Cuart Investment PPC Ltd and YA II PN Ltd in
settlement on US$404,000 of principal and accrued interest.
On 26 February 2019, the Company announced the completion of its
Pre-Feasibility Study on the Kun- Manie nickel-copper sulphide
project.
On 27 February 2019, pursuant to the convertible loan agreement
entered into on 13 February 2018, the Company issued 6,193,997 new
Ordinary Shares to Cuart Investment PPC Ltd and YA II PN Ltd in
settlement on US$218,000 of principal and accrued interest.
On 22 March 2019, the Company has extended the maturity date to
20 March 2020 on the existing convertible loan notes entered into
with Cuart Investments PPC Ltd and YA II PN Ltd on 13 February.
Additionally, a further advance of US$500,000 (net of an
implementation fee) has been secured. In conjunction with the
extension of the maturity date and the further advance, the
investors have been also issued with 10,902,956 warrants to
subscribe for shares in the Company at an exercise price of 3.76
pence per share, representing a premium of approximately 25% to the
closing mid-market price on 21 March 2019. The warrants will be
exercisable for a period of three years.
Annual Accounts
Copies of the Group's Annual Accounts will be posted to the Amur
shareholders today and are available for download from the
Company's website at www.amurminerals.com.
Notes to Editors
The information on exploration results and Mineral Resources
contained in this announcement has been reviewed and approved by
the CEO of Amur, Robin Young. Mr. Young is a Geological Engineer
(cum laude) and is a Qualified Professional Geologist, as defined
by the Toronto and Vancouver Stock Exchanges and a Qualified Person
for the purposes of the AIM Rules for Companies.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) (www.jorc.org)
A 'Mineral Resource' is a concentration or occurrence of
material of intrinsic economic interest in or on the Earth's crust
in such form, quality and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge. Mineral Resources are
sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.
An 'Inferred Mineral Resource' is that part of a Mineral
Resource for which tonnage, grade and mineral content can be
estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes which may be limited or of uncertain
quality and reliability.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource
for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough
to confirm geological and/or grade continuity.
An 'Ore Reserve' is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials
and allowances for losses which may occur when the material is
mined. Appropriate assessments and studies have been carried out,
and include consideration of and modification by realistically
assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors. These assessments
demonstrate at the time of reporting that extraction could
reasonably be justified. Ore Reserves are sub-divided in order of
increasing confidence into Probable Ore Reserves and Proved Ore
Reserves.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEFESLFUSESM
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