TIDMKEM
Kemin Resources plc("Kemin" or the "Company")
Interim report - 6 months to 30 June 2018
Kemin Resources Plc (AIM: KEM), the exploration and development
company with substantial interests in Kazakhstan, announces its
unaudited interim results for the six months ended 30 June
2018.
Highlights:
-- Supplement to the licence extension in relation to Drozhilovskoye
(licence 1606) deposit has been approved allowing exploration
and
production until June 2021;
-- Core drilling samples from Drozhilovskoye were shipped to China
Molybdenum in Q1 2018. They are continuing to conduct
technological
and analytical testing of the ore samples, results are expected
in the
near term.
-- Continued support for the Company from its major shareholder; and
-- Attributable loss reduced to GBP75,000 (H1 2017: GBP206,000), due to
continuing savings in administrative overheads and income
from
consultancy;
During the period the Company received financial support from
Amrita (as disclosed in note 1) a Company connected with the major
shareholder and also from a Director of the subsidiary Company as
disclosed in note 7 of the Interim Statements. The loan from the
Director of approximately GBP26,000 under Kazakhstan Company Law is
charged with no interest, the loan was to fund short term working
capital and the Directors are of the opinion the terms of the
transaction are fair and reasonable.
Commenting on the results, Sanzhar Assaubayev, CEO of Kemin
Resources said:
"The Company is continuing to develop its close relationship
with China Molybdenum. The final relationship between the two
Companies will depend on the technological results obtained from
the samples analysed. It is anticipated on successful completion of
testing the next stage will be the development of a test plant.The
nature and extent of funds required will be known at that
time".
For further information, please visit
http://www.keminresources.com or contact:
Kemin Resources Plc
Rajinder Basra (Chief Financial Officer)
+44(0)207 932 2456
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
Kemin Resources plc (AIM: KEM) was formed into its present
structure in April 2013 by the reverse take-over of GMA Resources
plc by the 'Joint Venture Kazakh-Russian Mining Company LLP'
(KRMC).
The Company is focused on developing its mineral resources
including molybdenum, tungsten and lithium deposits Drozhilovskoye
and Smirnovskoye. Each of the deposits is assessed to have
significant value.
Kemin's 90% owned Kazakh entity, KRMC, is the developer and
future operator of the two subsoil licences that allow exploration
and mining at each deposit.
Both deposits are located in northern Kazakhstan.
Kemin Resources Plc
Chief Executive Officer's Review
With both licences renewed the Smirnovskoye licence is valid
after the supplemental agreements until July 2019, while the
Drozhilovskoye licence has recently been extended to June 2021.
The exploration/drilling work undertaken in the period related
principally to the extraction of ore samples and the excavation of
test pits at Drozhilovskoye. The resulting samples were sent to
China Molybdenum and the Company is awaiting the results of the
analysis after which the next stage of development can be planned.
Initial design and other associated work has been undertaken in
relation to the pilot plant, however a detailed report on the grade
and refinement to production techniques is required in order to
finalise the design of the pilot plant and funding required. Once
the report is finalised the Company will also be able to determine
the extent of involvement of China Molybdenum in the project moving
forward.
As stated in the Annual Report once the technological
report/feedback has been obtained from China Molybdenum the Company
will determine the next steps:
-- The extent of drilling further confirmatory drill holes and
instructing a Competent Persons Report (CPR);
-- The development of the 300kt per annum pilot plant;
-- Feasibility study to encompass all financial and production data
obtained from the pilot plant subject to sourcing additional
funding
to develop the 3.0mt per year beneficiation plant.
During the period the Company obtained funds from Amrita
Investments Limited, (a Company connected to the Assaubayev
family), and from a Director of KRMC for working capital purposes
and to fund the limited drilling programme. In addition, KRMC
provided project consultancy to unrelated Companies in the period
which generated funds amounting to approximately GBP140,000.
The major shareholder which is owned by the Assaubayev family,
is fully committed to continuing to advance the project. Under a
facility agreement in place with Amrita Investments Limited (a
company controlled by the Assaubayev family) the Company has access
to circa GBP4.4m of financing. Further details in relation to this
facility are set out later in this report.
Sanzhar Assaubayev
CEO Kemin Resources Plc
Kemin
Resources
Plc
Consolidated
income
statement
Six months
ended
30 June
2018
Six months Six months Year ended
30 June 30 June 31 December 2017
2018 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing
operations
Other 140 - -
operating
income
Administrative (62) (93) (197)
expenses
Operating 78 (93) (197)
Profit/(loss)
Finance (153) (115) (287)
Expense
Loss before (75) (208) (484)
taxation
Income tax - - -
expense
Loss for (75) (208) (484)
the
period
Loss for
the
period
attributable
to:
Equity (75) (206) (463)
shareholders
of the
parent
Non-controlling - (2) (21)
interest
(75) (208) (484)
Loss per
ordinary
share
Basic (0.04p) (0.12p) (0.26p)
& Diluted
Consolidated
statement
of
comprehensive
income
Six months
ended
30 June
2018
Six months Six months Year ended
30 June 30 June 31 December 2017
2018 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Loss for (75) (208) (484)
the
period
Currency 24 10 (34)
translation
differences
arising
on
translations
of foreign
operations*
Total (51) (198) (518)
comprehensive
loss
* items
which
may
be
re-classified
to
statement
or profit
or loss.
Loss for
the
period
attributable
to:
Equity (55) (200) (514)
shareholders
of the
parent
Non-controlling 4 2 (4)
interest
(51) (198) (518)
Kemin
Resources
Plc
Consolidated
Statement
of
financial
position
Six months
ended
30 June
2018
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Non-current
assets
Intangible 2,362 2,502 2,314
assets
Property, 12 14 13
plant
and
equipment
Other 137 167 145
non-current
assets
Restricted 2 4 3
cash
2,513 2,687 2,475
Current
assets
Other 130 24 27
receivables
Cash and 73 8 16
cash
equivalents
203 32 69
Total 2,716 2,719 2,518
assets
Current
liabilities
Trade and 1,650 1,617 1,657
other
payables
Loans 584 669 696
and
borrowings
2,234 2,286 2,303
Non-current
liabilities
Loans 3,524 3,104 3,206
and
borrowings
3,524 3,104 3,206
Total 5,758 5,390 5,509
liabilities
Net (3,042) (2,671) (2,991)
liabilities
Equity
Ordinary 1,748 1,748 1,748
share
capital
Deferred 6,168 6,168 6,168
share
capital
Share 37,414 37,414 37,414
premium
Merger (41,682) (41,682) (41,682)
reserve
Share based 1,105 1,105 1,105
payment
reserve
Other 1,188 1,188 1,188
reserve
Currency (28) 9 (48)
translation
reserve
Retained (8,762) (8,430) (8,687)
earnings
(2,849) (2,480) (2,794)
Non-controlling (193) (191) (197)
interest
Total (3,042) (2,671) (2,991)
equity
Kemin
Resources
Plc
Consolidated
Statement
of
changes
in
equity
Six
months
ended
30 June
2018
Ordinary Deferred Share based Currency Attributed to Non-
share share Share Merger payment Other translation Retained owners of the controlling
capital capital premium reserve reserve reserve reserve earnings parent interest Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
1 1,748 6,168 37,414 (41,682) 1,105 1,188 (48) (8,687) (2,794) (197) (2,991)
January
2018
Loss for - - - - - - - (75) (75) - (75)
the
period
Currency - - - - - - 20 - 20 4 24
translation
differences
arising
on
translation
of
foreign
operations
Total - - - - - 20 (75) (55) 4 (51)
comprehensive
loss
At 30 1,748 6,168 37,414 (41,682) 1,105 1.188 (28) (8,762) (2,849) (193) (3,042)
June
2018
At 1,748 6,168 37,414 (41,682) 1,105 1,188 3 (8,224) (2,280) (193) (2,473)
1
January
2017
Loss for - - - - - - - (206) (206) (2) (208)
the
period
Currency - - - - - - 6 - 6 4 10
translation
differences
arising
on
translation
of
foreign
operations
Total - - - - - - 6 (206) (200) 2 (198)
comprehensive
loss
At 30 1,748 6,168 37,414 (41,682) 1,105 1.188 9 (8,430) (2,480) (191) (2,671)
June
2017
At 1,748 6,168 37,414 (41,682) 1,105 1,188 3 (8,224) (2,280) (193) (2,473)
1
January
2017
Loss for - - - - - - - (463) (463) (21) (484)
the year
Currency - - - - - - (51) - (51) 17 (34)
translation
differences
arising
on
translation
of
foreign
operations
Total - - - - - - (51) (463) (514) (4) (518)
comprehensive
loss
At 1,748 6,168 37,414 (41,682) 1,105 1,188 (48) (8,687) (2,794) (197) (2,991)
31
December
2017
Kemin Resources
Plc
Consolidated cash
flow statement
Six months ended
30 June 2018
Six months Six months Year ended
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net cash outflow 7 (51) (46)
from
operating activities
Investing
activities
Exploration (54) - (5)
costs
Net cash outflow (54) - (5)
from
investing activities
Financing
activities
Loans (26) - -
repaid
Advances of 130 - 8
borrowings
Net cash flow from 104 - 8
financing
activities
Increase/(decrease) 57 (51) (43)
in cash
and cash equivalents
Cash and cash 16 59 59
equivalents
at
the beginning of
the period
Cash and cash 73 8 16
equivalents
at the end of
the period
Kemin Resources PlcNotes to the consolidated financial
informationSix months ended 30 June 2018
1 Basis of preparation
The consolidated interim financial information has been prepared
using policies based on International Financial Reporting Standards
(IFRS and IFRIC interpretations) issued by the International
Accounting Standards Board ("IASB") as adopted for use in the
EU.
The consolidated interim financial information have been
prepared using the accounting policies which will be applied in the
Group's financial statements for the year ended 31 December 2017.
The consolidated interim financial information for the period 1
January 2018 to 30 June 2018 is unaudited and incorporates
unaudited comparative figures for the interim period 1 January 2017
to 30 June 2017 and the audited financial information for the year
to 31 December 2017. It does not include all disclosures that would
otherwise be required within a complete set of financial
statements.
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 have a material
impact on the Group.
Going Concern
As at 30 June 2018, the Group had cash in hand of GBP73,000
(December 2017: GBP16,000).
Under a loan agreement in 2013, Amrita Investment Limited (a
company incorporated in the British Virgin Islands and ultimately
controlled by the Assaubayev family) made available a facility of
GBP7,000,000 on an unsecured basis. This was to be applied towards
the Group's working capital requirements and the settlement of
debts due of the Joint Venture Kazakhstan-Russian Mining Company
LLP (KMRC). The loan was extended to expire on 4 February 2020
under the same terms and conditions as the original loan.
There is currently approximately GBP4.4m available under this
facility.
The loan bears interest at LIBOR+5%. The loan is repayable on
the earliest of the fifth anniversary of the agreement or of the
fundraising completion date in respect of any equity fundraising
which raises at least GBP5,000,000 (before expenses). At this point
the Lender may choose to convert the loan into the ordinary shares
of the Company at the conversion rates stipulated within the
contract.
The Directors are confident that the Group has sufficient
resources available to meet its liabilities as they fall due and
its working capital requirements going forward and have therefore
prepared these financial statements on a going concern basis.
Kemin Resources PlcNotes to the consolidated financial
information (continued)Six months ended 30 June 2018
2 Loss per ordinary share
The calculation of basic and diluted earnings per share from
continuing operations is based upon the retained loss for the
financial period, six months to 30 June 2018 is GBP75,000, (30 June
2017: loss GBP206,000, 31 December 2017 loss GBP463,000).
The weighted average number of ordinary shares for calculating
the basic loss per share and diluted loss per share for the six
months to 30 June 2018 is 174,833,041 (30 June 2017 174,833,041, 31
December 2017 174,833,041).
3 Functional and presentational currency
The Group has prepared its financial statements in British
Pounds. The functional currency of Joint Venture Kazakhstan-Russian
Mining Company LLP (KRMC) trading company in Kazakhstan is the
Kazakhstan Tenge ("KZT"). The functional currency of Kemin
Resources is Pound Sterling. The rates used to convert Kazakhstan
Tenge into British Pounds in these financial statements are as
follows:
30 June 2018 30 June 2017 31 December 2017
Closing Average Closing Average Closing Average
KZT= GBP 450.00 449.00 414.00 402.00 448.00 420.00
The currency translation movement on the Group's net investment
in its subsidiaries in Kazakhstan is taken to reserves.
The financial statements of all Group companies are translated
into British Pounds whereby their income statements are translated
at the average rate of exchange for the year and their statement of
financial position at the closing rate of exchange at the reporting
date. Currency translation adjustments arising on the restatement
of opening net assets, together with adjustments arising from the
retranslation of intergroup and long term foreign currency loans to
subsidiaries, are taken direct to reserves.
Transactions denominated in currencies other than the functional
currency of a Company are recorded at the rate of exchange
prevailing at the date of the transaction. Monetary assets and
liabilities are translated into the relevant functional currency at
the closing rates of exchange at the reporting date. Exchange
differences arising from the restatement of monetary assets and
liabilities at the closing rate of exchange at the reporting date
or from the settlement of monetary transactions at a rate different
from that at which the asset or liability was recorded are dealt
with through the income statement.
4 Events after the balance sheet date
There were no significant transactions after the reporting
date.
5 Approval of interim group financial statements
The interim group financial statements for the six months to 30
June 2018 were approved by the directors on 27 September 2018.
6 Ultimate Controlling Party
The controlling party of Kemin Resources plc is Bergfolk
Corporation, by virtue of the fact that it owns 76,14% of the
voting rights in the company. The ultimate controlling party is the
Assaubayev family.
Kemin Resources Plc
Notes to the consolidated financial information (continued)
Six months ended 30 June 2018
7 Related Party Transactions
During the period Amrita Investments Limited a Company in which
the Assaubayev family have a controlling interest, made a loan to
KRMC of USD$60,000 (GBP46,000) at an interest rate of 5% per annum.
At 30 June 2018 an amount of USD$25,000 (GBP19,000) was
outstanding, (2017 GBPnil).
Kemin Plc currently owes GBP2.7m (2017 GBP2.65m) to Amrita
Investments Limited the loan is payable at 5% plus Libor. An
advance on the facility was made of GBP60,000 in the period.
The following Companies in which the Assaubayev family have an
interest have loans outstanding with KRMC, Altyn MunaiGaz LLP
GBP60,000 (2017 GBP57,000), Hawkinson Capital Inc GBP525,000 (2017
GBP496,000) and Lanochkin S.S. GBP35,000 (2017 GBP35,000).
A T Bulanbayev a Director of the subsidiary KRMC made a loan to
the Company of 12m Kazakh Tenge, (GBP26,600), in accordance with
Kazakhstan Company law no interest is charged on this loan
amount.
Kemin Resources Plc
Company Details
DirectorsSanzhar Assaubayev, Chief ExecutiveKanat Assaubayev,
ChairmanAshar Qureshi, Non-Executive Director (Vice-Chairman)Aidar
Assaubayev, Non-Executive DirectorNeil Herbert, Non-Executive
Director
SecretaryRajinder Basra FCA
Registered office28 Eccleston SquareLondonSW1V 1NZ
Auditors to the GroupBDO LLP55 Baker StreetLondonW1U 7EU
RegistrarsNeville Registrars18 Laurel LaneHalesowenWest
MidlandsB63 3DA
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(END) Dow Jones Newswires
September 28, 2018 07:13 ET (11:13 GMT)
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