METALS EXPLORATION
PLC
INTERIM RESULTS FOR THE SIX
MONTHS ENDED 30 JUNE 2024
Metals Exploration plc (AIM: MTL)
("Metals Exploration", the "Company" or, together with its
subsidiaries the "Group"), a gold producer in the Philippines,
announces its unaudited interim results for the six months ended 30
June 2024. The results will be made available on the Company's
website at www.metalsexploration.com.
Highlights
· H1 2024 profit before tax of
US$58.4 million (H1 2023: US$37.0
million);
· H1 2024 earnings before tax,
interest, depreciation, amortization and impairment charges US$47.1
million (H1 2023: US$43.0 million)
· H1 2024 gold production of
42,535 ounces (H1 2023: 45,533 ounces);
· H1 2024
gold recoveries
of 89.6% (H1 2023: 89.8%);
· H1 2024
positive free
cash flow of US$46.4 million (H1 2023: US$41.9
million);
· Over 23 million man-hours
since the last reported lost-time injury;
· Announcement of off-market
buy-back of Runruno Holdings Limited's 18.6% shareholding - to be
completed by the end of Q3 2024;
· Debt free status confirmed
with all debt disputes resolved and cash on hand of US$6.6 million
as at 30 June 2024; and
· Acquisition of the YMC group
interest completed post period-end.
Production Summary
|
Runruno Project
|
|
|
|
|
|
|
Production Summary
|
|
|
Actual
|
Actual
|
Actual
|
|
|
Units
|
|
6 Months to
30 June
2024
|
6 Months to
30 June
2023
|
12 Months
to
31 December
2023
|
|
Mining
|
|
|
|
|
|
|
Ore Mined
|
Tonnes
|
|
1,172,930
|
848,023
|
1,949,654
|
|
Waste Mined
|
Tonnes
|
|
4,849,036
|
5,385,929
|
10,412,735
|
|
Total Mined
|
Tonnes
|
|
6,021,966
|
6,233,952
|
12,362,398
|
|
Au Grade Mined
|
g/tonne
|
|
1.37
|
1.59
|
1.47
|
|
Strip Ratio
|
|
|
4.07
|
6.08
|
5.03
|
|
Processing
|
|
|
|
|
|
|
Ore Milled
|
Tonnes
|
|
1,099,159
|
1,068,391
|
2,104,207
|
|
Gold (Au) Grade
|
g/tonne
|
|
1.34
|
1.48
|
1.42
|
|
Sulphur Grade
|
%
|
|
1.35
|
1.41
|
1.36
|
|
Au Milled (contained)
|
ounces
|
|
47,489
|
50,701
|
96,068
|
|
Recovery
|
%
|
|
89.6
|
89.8
|
88.7
|
|
Au Poured
|
ounces
|
|
42,535
|
45,533
|
85,194
|
|
Sales
|
|
|
|
|
|
|
Au Sold
|
ounces
|
|
41,589
|
46,186
|
85,744
|
|
Au Price
|
US$/oz
|
|
2,190
|
1,939
|
1,944
|
Corporate
Buy-back of RHL shares
On 20 June 2024 the Company agreed
to purchase the entire shareholding of Runruno Holdings Limited
("RHL"), being 393,513,302 ordinary shares of £0.0001 each in the
capital of the Company ("Ordinary Shares") (the "RHL Shares") over
three tranches and at a price of 5 pence per share, by means of an
off-market buy back (the "Buy Back"). At a General Meeting of
shareholders on 23 August 2024 the Buy Back of RHL's 18.6% interest
in the Company was approved.
The Buy Back price of 5 pence per
share was agreed by the Company and RHL at a date during
negotiations of the Buy Back, based on the 30-day trailing volume
weighted average market price at that date. The tranches of the Buy
Back are:
· 203,640,000 RHL Shares acquired on 2 September
2024;
· 94,936,651 RHL Shares acquired on 2 September 2024;
and
· 94,936,651 RHL Shares to be acquired by no later than 30
September 2024.
The aggregate consideration for the
Buy Back is £19,675,665. All shares acquired from RHL will
initially be held in treasury, until either cancelled or re-issued.
Shares held in treasury have no voting rights. Following completion
of the first tranche of the Buy Back, the relationship agreement
with RHL was terminated.
Production fee and termination of Revolving Credit Facility
("RCF")
In conjunction with entering into
the Buy Back agreement, the Group agreed to a production fee
agreement with RHL. The Group has agreed to
pay RHL a production fee of US$164 per ounce of gold produced at
the Runruno contract area on any production that exceeds 204,269
ounces of gold from 1 May 2024 (being approximately 105% of the
current forecast gold production from such date, based upon the
Group's life of mine plan for the Runruno mine). Any such
production fee due would be paid quarterly in arrears. Following
completion of the first tranche of the Buy Back, the RCF was
terminated with no early termination fee payable to either RHL
or MTL Luxembourg S.a.r.l ("MTL
Lux").
Debt settlement
The Company completed various
agreements with its lenders, also in June 2024, that resolved all
debt disputes including the payment of the final agreed
principal/interest and applicable lender legal fees for both the
senior and mezzanine debt, confirming that the Group is now debt
free.
YMC Acquisition
At the General Meeting on 23 August
2024, shareholders also approved the completion of a
share purchase agreement, to acquire a controlling
interest in the Yamang Mineral Corporation group (the "YMC Group").
The aggregate consideration payable by the Company to the YMC Group
shareholders was US$1.6 million in cash and the issue of options to
subscribe for up to 41 million new Ordinary Shares
at an exercise price equal to nominal
value. This acquisition was completed on 27
August 2024. Refer to the announcement dated 28 August
2024.
Additional Option Issue
At the
Annual General Meeting, shareholders
approved the issue of 6.6 million options to subscribe for new
Ordinary Shares at an exercise price equal
to nominal value, to the independent
non-executive chairman.
Exercise of Options
During H1 2024, the Company issued
19,800,000 new Ordinary Shares at an issue price of £0.0001 to
certain non-executive directors/ex-directors following the exercise
of options.
Review of Runruno Gold Mine
Operations
Safety and health
The outstanding safety record at
Runruno continues with in excess of 23 million man-hours with no
lost time incidents occurring since the last lost time incident in
December 2016. This is something the Company is incredibly proud
of, and all employees and contractors are to be congratulated on
this ongoing achievement.
Finance
Gold sales were 41,589 oz for
revenues of US$91.1 million (H1 2023 46,186 oz for revenues of
US$89.6 million) at an average price of US$2,190 per oz (H1 2023 US$1,939 per
oz), resulting in positive free cash flow of US$46.4 million (H1
2023: US$41.9 million).
During H1 2024, the Group resolved
all debt related disputes confirming that the Group is debt free.
Total debt repayments made during H1 2024 were US$27.2 million (H1
2023: US$35.0 million).
Mining
Mining production of ore and waste
was slightly down at 6.0Mt for H1 2024 (H1 2023: 6.2Mt). Total ore
mined was slightly higher at 1.2Mt (H1 2023: 0.8Mt), at a lower
grade of 1.37g/t (H1 2023: 1.59g/t).
Process plant
Stable operations were delivered
during H1 2024, leading to gold production of 42,535 ounces (H1
2023: 45,533 ounces). Throughput for H1 2024 was on budget at
1.10Mt (H1 2023: 1.07Mt) with a lower head grade of 1.34g/t (H1
2023: 1.48g/t) resulting in slightly lower levels of
production
Efforts to gain marginal gold
recovery improvements continue with an excellent average overall
gold recovery rate of 89.6% achieved (H1 2023: 89.8%).
Unplanned process plant downtime
during H1 2024 did not materially interrupt production and
consisted mainly of power interruptions, pump changeovers as well
as repairs to the return discharge line ("RDL") and final tails
line, conveyor belts, rollers and trommel panel screens.
Residual Storage Impoundment ("RSI")
The RSI is operating to design with
an excellent environmental performance record. Stage 6 RSI lift was
completed in H1 2024, and the
dam water freeboard remained well within
design limits.
Construction of the RSI final
in-rock spillway continues, albeit slightly behind schedule. The
day-to-day performance of the RSI, including the construction of
the final in-rock spillway, is continuously monitored by an
independent international consulting group.
Community & Government Relations
Productive relations with both the
community and the Philippine government continue.
YMC Group
Update
As noted above, the acquisition of
the YMC Group was completed on 27 August 2024. The YMC Group
holds a majority and controlling interest in a
highly prospective exploration licence covering 16,200 hectares on
Luzon, Philippines, approximately 200km north of the Company's
Runruno mine, in the Cordillera region, which is a prolific gold
belt in the Philippines, with proven mineral endowment, having
produced over 40Moz of gold historically. The Company has
undertaken initial geophysics and geochemistry activities over this
project area (known as the Abra project) as a prelude to designing
an exploration drill programme. It is expected that drilling of
initial targets will commence in Q4 2024.
Darren Bowden, CEO of Metals Exploration,
commented:
"The first half of 2024 has been transformational for the
Company. Operationally Runruno has continued to perform strongly
whilst the corporate actions taken will provide a platform for the
future growth of the Company.
"In January the Company announced the acquisition the YMC
Group, which completed in August, and which the Company believes
holds some highly prospective exploration acreage; with our first
drill campaign of this prospect expected in Q4 2024. In
addition to this, the strong performance at Runruno has enabled the
Company to gain debt free status, resolving all debt
disputes. This is a very significant achievement considering
the historical debt levels of the recent past. This
accomplishment will ensure that the Company has more than ample
firepower to progress the Company's assets whilst continuing to
seek further appropriate acquisition opportunities. The final piece
of the jigsaw in the first half of the year, again approved in
August, was the off-market buy-back of RHL's shareholding (to be
completed by the end of September 2024); removing a number of
corporate and operational restrictions that have previously been
placed on the team and will ensure management has the opportunity
to deliver the Company's growth strategy.
"The Company enters the second half of the year in an
incredibly strong position, and is greatly looking forward to
commencing initial drilling at YMC and providing further updates
across all our operations."
For further information please visit
or contact www.metalsexploration.com
|
Metals Exploration PLC
|
|
|
Via Tavistock Communications
Limited
|
+44 (0) 207 920 3150
|
|
Nominated & Financial Adviser:
|
STRAND HANSON LIMITED
|
|
James Spinney, James Dance, Rob
Patrick
|
+44 (0) 207 409 3494
|
|
Financial Adviser & Broker:
|
HANNAM & PARTNERS
|
|
Matt Hasson, Franck Nganou
|
+44 (0) 207 907 8500
|
|
Public Relations:
|
TAVISTOCK COMMUNICATIONS LIMITED
|
|
Jos Simson, Nick Elwes
|
+44 (0) 207 920 3150
|
CONDENSED CONSOLIDATED STATEMENT OF
TOTAL COMPREHENSIVE INCOME for the six months ended 30 June
2024
|
|
Notes
|
6 month period ended 30 June
2024 (unaudited)
|
|
6 month period
ended
30 June 2023
(unaudited)
|
|
Year ended
31 December 2023
(audited)
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
Continuing Operations
|
|
|
|
|
|
|
|
Revenue
|
|
91,085,493
|
|
89,551,687
|
|
166,682,876
|
|
Cost of sales
|
|
(73,353,868)
|
|
(53,677,981)
|
|
(129,422,805)
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
17,731,625
|
|
35,873,706
|
|
37,260,071
|
|
Administrative expenses
|
|
(5,598,788)
|
|
(4,758,815)
|
|
(8,086,753)
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
12,132,837
|
|
31,114,891
|
|
29,173,318
|
|
|
|
|
|
|
|
|
|
Impairment reversal
|
7
|
49,712,946
|
|
8,846,685
|
|
97,737,620
|
|
Net finance and other
costs
|
|
(696,536)
|
|
(2,930,501)
|
|
(7,310,461)
|
|
Provision for loss on
derivatives
|
|
(2,716,439)
|
|
(57,800)
|
|
(29,759)
|
|
Share based payment
expense
|
|
(5,313)
|
|
(21,814)
|
|
(31,368)
|
|
Share of (loss)/ profit of
associates
|
|
(4,645)
|
|
3,021
|
|
15,970
|
|
|
|
|
|
|
|
|
|
Profit before tax
|
|
58,422,850
|
|
36,954,482
|
|
119,555,320
|
|
|
|
|
|
|
|
|
|
Tax benefit/(expense)
|
|
63,576
|
|
4,141
|
|
(306,582)
|
|
Profit for the period attributable to
equity holders of
the parent
|
|
58,486,426
|
|
36,958,623
|
|
119,248,738
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
Items that may be re-classified
subsequently
to profit or loss:
|
|
|
|
|
|
|
|
Exchange differences on translating
foreign operations
|
|
(749,907)
|
|
(660,052)
|
|
(3,479,370)
|
|
Items that will not be re-classified subsequently
to profit or loss:
|
|
|
|
|
|
|
|
Re-measurement of pension
liabilities
|
|
-
|
|
-
|
|
222,909
|
|
Total comprehensive profit for the period
attributable to
equity holders of the parent
|
|
57,736,519
|
|
36,298,571
|
|
115,992,277
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic cents per share
Diluted cents per share
|
6
6
|
2.78
2.78
|
|
1.77
1.75
|
|
5.70
5.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
as
at 30 June 2024
|
|
|
|
|
|
|
|
|
|
|
Notes
|
30 June 2024
(Unaudited)
|
|
30 June 2023
(Unaudited)
|
|
31 December 2023
(Audited)
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
7
|
155,968,686
|
|
84,395,285
|
|
140,597,506
|
|
|
Other intangible assets
|
|
-
|
|
467,179
|
|
7,664
|
|
|
Investment in associate
companies
|
|
116,736
|
|
108,432
|
|
121,381
|
|
|
Trade and other
receivables
|
|
19,807,825
|
|
12,616,843
|
|
16,720,701
|
|
|
|
|
175,893,247
|
|
97,587,739
|
|
157,447,252
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Inventories
|
|
20,795,474
|
|
19,471,994
|
|
18,695,048
|
|
|
Trade and other
receivables
|
|
9,950,924
|
|
7,640,051
|
|
5,000,515
|
|
|
Cash and cash equivalents
|
|
6,578,641
|
|
490,207
|
|
339,997
|
|
|
|
|
37,325,039
|
|
27,602,252
|
|
24,035,560
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
(70,850)
|
|
(1,247,303)
|
|
(70,850)
|
|
|
Retirement benefits
obligations
|
|
(2,471,289)
|
|
(2,463,112)
|
|
(2,471,289)
|
|
|
Provision for loss on
derivatives
|
|
(361,400)
|
|
-
|
|
-
|
|
|
Deferred tax liabilities
|
|
(481,120)
|
|
(574,038)
|
|
(544,697)
|
|
|
Provision for mine
rehabilitation
|
|
(4,161,553)
|
|
(3,781,339)
|
|
(4,145,567)
|
|
|
|
|
(7,546,212)
|
|
(8,065,792)
|
|
(7,232,403)
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
(11,284,917)
|
|
(13,210,650)
|
|
(16,063,666)
|
|
|
Loans - current portion
|
8
|
-
|
|
(49,301,270)
|
|
(23,896,298)
|
|
|
Provision for loss on
derivatives
|
|
(2,709,923)
|
|
(382,920)
|
|
(357,546)
|
|
|
|
|
(13,994,840)
|
|
(62,894,840)
|
|
(40,317,510)
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets
|
|
191,677,234
|
|
54,229,359
|
|
133,932,899
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Share capital
|
9
|
285,286
|
|
282,503
|
|
282,783
|
|
|
Share premium account
|
9
|
144,350
|
|
144,350
|
|
144,350
|
|
|
Acquisition of non-controlling
interest reserve
|
|
(5,107,515)
|
|
(5,107,515)
|
|
(5,107,515)
|
|
|
Translation reserve
|
|
10,191,724
|
|
13,760,949
|
|
10,941,631
|
|
|
Re-measurement reserve
|
|
(249,740)
|
|
(472,649)
|
|
(249,740)
|
|
|
Other reserves
|
|
149,664
|
|
1,661,734
|
|
144,351
|
|
|
Profit and loss account
|
|
186,263,465
|
|
43,959,987
|
|
127,777,039
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to equity holders of the
parent
|
|
191,677,234
|
|
54,229,359
|
|
133,932,899
|
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2024
|
|
Share
capital
|
Share
premium account
|
Acquisition of non-controlling interest reserve
|
Translation reserve
|
Re-measurement reserve
|
Other
reserve
|
Profit and
loss account
|
Total
equity
|
|
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
Balance at 1 January 2024
|
282,783
|
144,350
|
(5,107,515)
|
10,941,631
|
(249,740)
|
144,351
|
127,777,039
|
133,932,899
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating
foreign operations
|
-
|
-
|
-
|
(749,907)
|
-
|
-
|
-
|
(749,907)
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
58,486,426
|
58,486,426
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive (loss)/profit for
the period
|
-
|
-
|
-
|
(749,907)
|
-
|
-
|
58,486,426
|
57,736,519
|
|
Share based payment
|
-
|
-
|
-
|
-
|
-
|
5,313
|
-
|
5,313
|
|
Equity issue
|
2,503
|
-
|
-
|
-
|
-
|
-
|
-
|
2,503
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2024
|
285,286
|
144,350
|
(5,107,515)
|
10,191,724
|
(249,740)
|
149,664
|
186,263,465
|
191,677,234
|
Equity is the aggregate of the
following:
· Share
capital; being the nominal value of shares issued.
· Share
premium account; being the excess received over the nominal value
of shares issued less direct issue costs.
· Acquisition of non-controlling interests reserve; being
amounts recognised on acquiring additional equity in a controlled
subsidiary.
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries.
· Re-measurement reserve; being the cumulative actuarial gains
and losses, return on plan assets and changes in the effect of the
asset ceiling (excluding net interest on defined benefit liability)
recognised in the statement of total comprehensive
income.
· Other
reserves; being the cumulative share-based payments
expense.
· Profit
and loss account; being the cumulative profit attributable to
equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2023
|
|
|
Share
capital
|
Share
premium account
|
Acquisition of non-controlling interest reserve
|
Translation reserve
|
Re-measurement reserve
|
Other
reserve
|
Profit and
loss account
|
Total
equity
|
|
|
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
Balance at 1 January 2023
|
281,638
|
-
|
(5,107,515)
|
14,421,001
|
(472,649)
|
1,639,920
|
7,001,364
|
17,763,759
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating
foreign operations
|
-
|
-
|
-
|
(660,052)
|
-
|
-
|
-
|
(660,052)
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
36,958,623
|
36,958,623
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive (loss)/profit for
the period
|
-
|
-
|
-
|
(660,052)
|
-
|
-
|
36,958,623
|
36,298,571
|
|
Share based payment
|
-
|
-
|
-
|
-
|
-
|
21,814
|
-
|
21,814
|
|
Equity issue
|
865
|
144,350
|
-
|
-
|
-
|
-
|
-
|
145,215
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2023
|
282,503
|
144,350
|
(5,107,515)
|
13,760,949
|
(472,649)
|
1,661,734
|
43,959,987
|
54,229,359
|
Equity is the aggregate of the
following:
· Share
capital; being the nominal value of shares issued.
· Share
premium account; being the excess received over the nominal value
of shares issued less direct issue costs.
· Acquisition of non-controlling interests reserve; being
amounts recognised on acquiring additional equity in a controlled
subsidiary.
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries.
· Re-measurement reserve; being the cumulative actuarial gains
and losses, return on plan assets and changes in the effect of the
asset ceiling (excluding net interest on defined benefit liability)
recognised in the statement of total comprehensive
income.
· Other
reserves; being the cumulative fair value of warrants associated
with certain mezzanine debt facilities and share-based payments
expense.
· Profit
and loss account; being the cumulative profit attributable to
equity shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
|
|
Share
capital
|
Share
premium account
|
Acquisition of non-controlling interest reserve
|
Translation reserve
|
Re-measurement reserve
|
Other
reserve
|
Profit and
loss account
|
Total
equity
|
|
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
US$
|
|
Balance at 1 January 2023
|
281,638
|
-
|
(5,107,515)
|
14,421,001
|
(472,649)
|
1,639,920
|
7,001,364
|
17,763,759
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating
foreign operations
|
-
|
-
|
-
|
(3,479,370)
|
-
|
-
|
-
|
(3,479,370)
|
|
Change in pension
liability
|
-
|
-
|
-
|
-
|
222,909
|
-
|
-
|
222,909
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
119,248,738
|
119,248,738
|
|
Total comprehensive profit/(loss) for
the period
|
-
|
-
|
-
|
(3,479,370)
|
222,909
|
-
|
119,248,738
|
115,992,277
|
|
Share based payments
|
-
|
-
|
-
|
-
|
-
|
31,368
|
-
|
31,368
|
|
Share issue
|
1,145
|
144,350
|
-
|
-
|
-
|
-
|
-
|
145,495
|
|
Transfer of other reserve to profit
and loss account
|
-
|
-
|
-
|
-
|
-
|
(1,526,937)
|
1,526,937
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December
2023
|
282,783
|
144,350
|
(5,107,515)
|
10,941,631
|
(249,740)
|
144,351
|
127,777,039
|
133,932,899
|
Equity is the aggregate of the
following:
· Share
capital; being the nominal value of shares issued.
· Share
premium account; being the excess received over the nominal value
of shares issued less direct issue costs.
· Acquisition of non-controlling interests reserve; being
amounts recognised on acquiring additional equity in a controlled
subsidiary.
· Translation reserve; being the foreign exchange differences on
the translation of foreign subsidiaries.
· Re-measurement reserve; being the cumulative actuarial gains
and losses, return on plan assets and changes in the effect of the
asset ceiling (excluding net interest on defined benefit liability)
recognised in the statement of total comprehensive
income.
· Other
reserves; being the cumulative fair value of warrants associated
with certain mezzanine debt facilities and share-based payments
expense. Upon the expiry of the relevant warrants the
cumulative fair value of warrants was transferred to profit and
loss account.
· Profit
and loss account; being the cumulative profit attributable to
equity shareholders.
CONDENSED CONSOLIDATED INTERIM CASH
FLOW STATEMENT for the six months ended 30 June 2024
|
|
|
6 month period
ended
30 June 2024
(unaudited)
|
|
6 month period
ended
30 June 2023
(unaudited)
|
|
Year ended
31 December 2023
(audited)
|
|
|
Note
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
Net
cash arising from operating activities
|
8
|
36,988,492
|
|
39,838,746
|
|
74,561,379
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
Exploration expenses
incurred
|
|
(636,382)
|
|
(449,477)
|
|
-
|
|
Purchase of property, plant and
equipment
|
|
(2,869,853)
|
|
(4,687,652)
|
|
(10,250,030)
|
|
Net
cash used in investing activities
|
|
(3,506,235)
|
|
(5,137,129)
|
|
(10,250,030)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
Repayment of borrowings -
principal
|
|
(23,896,298)
|
|
(32,855,626)
|
|
(61,430,747)
|
|
Repayment of borrowings -
interest
|
|
(3,338,575)
|
|
(2,194,374)
|
|
(3,369,253)
|
|
Share issue
|
|
2,503
|
|
-
|
|
280
|
|
Net
cash used in financing activities
|
|
(27,232,370)
|
|
(35,050,000)
|
|
(64,799,720)
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and
cash equivalents
|
|
6,249,887
|
|
(348,383)
|
|
(488,371)
|
|
Cash and cash equivalents at
beginning of period
|
|
339,997
|
|
861,069
|
|
861,069
|
|
Effects of exchange rate changes on
cash and cash equivalents
|
|
(11,243)
|
|
(22,479)
|
|
(32,701)
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of period
|
|
6,578,641
|
|
490,207
|
|
339,997
|
Notes to the condensed consolidated
interim financial statements
1.
General information
These condensed consolidated interim
financial statements of Metals Exploration
and its subsidiaries (the "Group") were approved by the Board of
Directors on 20 September 2024. Metals Exploration is the parent
company of the Group. Its shares are quoted on AIM market of the
London Stock Exchange plc. The registered address of Metals
Exploration plc is 38 - 43 Lincoln's Inn Fields, London, WC2A
3PE.
The condensed
consolidated interim financial statements for the
period 1 January 2024 to 30 June 2024 are
unaudited. The
group has chosen not to adopt IAS 34 "Interim Financial Statements"
in preparing the interim financial information. The condensed consolidated interim
financial statements incorporate unaudited
comparative figures for the interim period from 1 January 2023 to 30 June
2023 and the audited financial year ended 31 December
2023.
The financial information set out in
this interim report does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The Group's
statutory accounts for the year ended 31 December 2023, which were
prepared under UK-adopted international financial accounting
standards, were filed with the Registrar of Companies. The auditors
reported on these accounts and their report was unqualified and did
not contain a statement under either Section 498 (2) or Section 498
(3) of the Companies Act 2006.
2.
Basis of preparation
The interim financial information in
this report has been prepared using accounting policies consistent
with UK-adopted international accounting standards. The financial
information has been prepared based on UK-adopted international
accounting standards that the Board of Directors expect to be
applicable as at 31 December 2024.
These condensed consolidated interim
financial statements have been prepared under the historical cost
convention, except for derivative financial
instruments, which are measured at fair value, and in accordance
with UK-adopted international accounting
standards. There have been no changes in
accounting policies as described in the 2023 annual financial
statements.
3.
Going concern
These condensed consolidated interim
financial statements of the Group have been prepared on a going
concern basis, which contemplates the continuity of business
activities, the realisation of assets and the settlement of
liabilities in the normal course of business.
The Group and its ability to operate
as a going concern and to meet its commitments as and when they
fall due is dependent upon the ability of the Group to operate the
Runruno Project successfully to generate sufficient cash flows to
enable the Group to settle its liabilities as they fall
due.
The Board of
Directors believes that the Runruno Project will continue to
operate successfully and produce positive cash flows for at least
12 months from the date of this interim report, being 20 September
2024. As a result, the Board of Directors considers it appropriate
that the half-year financial information should be prepared on a
going concern basis.
4.
Risks and uncertainties
The Board continuously assesses and
monitors the key risks of the business. The key risks that could
affect the Group's medium term performance and the factors that
mitigate those risks have not substantially changed from those set
out in the Group's statutory accounts for the year ended 31
December 2023, a copy of which is available on the Company's
website: https://metalsexploration.com/.
5.
Critical accounting estimates
The preparation of condensed
consolidated interim financial statements requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the end of the reporting period.
Significant items subject to such estimates are set out in Note 2
of the Group's statutory accounts for the year ended 31 December
2023. The nature and amounts of such estimates have not changed
significantly during the interim period.
6.
Earnings per share
The earnings per share was
calculated based on the net profit/(loss) attributable to equity
shareholders divided by the weighted average number of Ordinary
Shares.
|
|
6 month
period ended 30 June 2024
|
6 month
period ended 30 June 2023
|
Year ended
31 December 2023
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
|
US$
|
US$
|
US$
|
|
Earnings
|
|
|
|
|
Net profit attributable to equity
shareholders for the purpose of basic and diluted earnings per
share
|
58,486,426
|
36,958,623
|
119,248,738
|
|
|
|
|
|
|
Number of shares
|
|
|
|
|
Weighted average number of Ordinary
Shares for the purpose of basic earnings per share
|
2,101,371,744
|
2,089,230,821
|
2,092,720,603
|
|
|
|
|
|
|
Number of dilutive shares under
warrant/option
|
-
|
22,000,000
|
19,800,000
|
|
Weighted average number of Ordinary
Shares for the purpose of diluted earnings per share
|
2,101,371,744
|
2,111,230,821
|
2,112,520,603
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings cents per
share
|
2.78
|
1.77
|
5.70
|
|
Diluted earnings cents per
share
|
2.78
|
1.75
|
5.64
|
7.
Impairment reversal
Property, plant and equipment
("PPE")
The Group
considers that the entire Runruno project (encompassing capitalised
property, plant and equipment, mining licence costs, deferred
exploration expenditure and the provision for mine rehabilitation
and decommissioning) comprises a single cash generating unit
("CGU") as all stages of the project are interdependent in terms of
generating cash flow and do not have the capacity to generate
separate and distinct cash flow streams.
The Group assesses the recoverable
amount of the Runruno project CGU based on the value in use of the
Runruno operations using cash flow projections over the remaining
expected life of mine ("LOM") and at appropriate discount rates.
Based on assumptions current as at 30 June 2024, in particular the
ongoing relatively high gold prices and the increased productivity
of the Runruno mine, the Group considered that the remaining
balance of the 2018 impairment of PPE be reversed.
Accordingly, and in accordance with
IAS 36 -- Impairment of
Assets, an impairment credit has been raised in H1 2024 to
increase the book value of the PPE by US$50 million. This US$50
million impairment reversal, combined with the US$100 million
impairment reversal booked in the 2023 financial year, has fully
eliminated the 2018 PPE impairment charge. A consequence of these
impairment reversals is that the depreciation expense for H1 2024
has increased to US$37.5 million from US$11.8 million in H1
2023.
8.
Reconciliation of profit after tax to net cash arising from
operating activities
|
|
6 month period ended 30 June
2024
|
6 month period ended 30 June
2023
|
Year ended 31 December
2023
|
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
|
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
Profit after tax
|
58,486,426
|
36,958,623
|
119,248,738
|
|
|
|
|
|
|
Depreciation and
amortisation
|
37,522,323
|
11,766,932
|
51,492,601
|
|
Provisions
|
2,713,777
|
57,800
|
29,759
|
|
Impairment
(reversal)/charge
|
(49,712,946)
|
(8,846,685)
|
(97,318,816)
|
|
Share of losses/(profits) of
associates
|
4,645
|
(3,021)
|
(15,970)
|
|
Share based payment
expense
|
5,313
|
21,814
|
31,368
|
|
Shares issued in lieu of cash
bonus
|
-
|
145,215
|
145,215
|
|
Finance expenses
|
1,401,810
|
3,370,915
|
10,732,133
|
|
Foreign exchange
(gain)/loss
|
(694,061)
|
(440,247)
|
(2,642,249)
|
|
Exploration expenses
|
636,382
|
-
|
-
|
|
(Increase)/decrease in
receivables
|
(9,074,493)
|
(4,478,977)
|
(10,048,701)
|
|
Decrease/(Increase) in
inventories
|
(2,100,426)
|
1,743,493
|
820,441
|
|
Increase/(Decrease) in
payables
|
(2,136,682)
|
(457,118)
|
2,061,476
|
|
|
|
|
|
|
Net cash arising from operating
activities
|
36,988,492
|
39,838,746
|
74,561,379
|
|
|
|
|
|
|
|
9.
Loans
Finalisation of the Group's senior
and mezzanine debt facilities was protracted due to an inability to
effect the elevation of the mezzanine debt to a fully secured
status due to a dispute over the applicable interest rate and
several disputed debt covenant breaches. During June 2024, the
Group entered into full and final settlements with the lenders,
including payment of the final principal/interest and agreed
appropriate lender legal fees. These agreements confirmed that the
Group is debt free. Subsequently all lender registered security has
been released/withdrawn.
During H1 2024, total senior debt
payments of US$2,817 (H1 2023: US$ Nil) were made. During the H1
2024, total mezzanine debt payments of US$27.2 million were made
(H1 2023: US$35.0 million). Included in the US$27.2 million debt
payments was $3.38 million loan interest.
In addition, post period-end, the
Revolving Credit Facility was terminated as part of the RHL Buy
Back and Production fee agreements, with no termination fee payable
to either RHL or MTL Lux.
The Group's debt balances are shown
below:
|
|
June 2024
|
June 2023
|
December
2023
|
|
|
US$
|
US$
|
US$
|
|
Total loans due within one
year
|
-
|
49,301,270
|
23,896,298
|
10.
Share capital
The Company issued 19,800,000 new
Ordinary Shares at an issue price of £0.0001 following the exercise
of options in April and June 2024. In June 2023 the Company
issued 7,147,850 new Ordinary Shares at an issue price of £0.01679
in lieu of paying a cash bonus.
|
|
June 2024
|
June 2023
|
December
2023
|
June 2024
|
June 2023
|
December
2023
|
|
|
Number of
shares
|
Number of
shares
|
Number of
shares
|
US$
|
US$
|
US$
|
|
Ordinary shares of £0.0001 par value
|
|
|
|
|
|
|
|
Opening balance
|
2,098,144,271
|
2,088,796,421
|
2,088,796,421
|
282,783
|
281,638
|
281,638
|
|
Share issue in period
|
19,800,000
|
7,147,850
|
9,347,850
|
2,503
|
865
|
1,145
|
|
Closing balance
|
2,117,944,271
|
2,095,944,271
|
2,098,144,271
|
285,286
|
282,503
|
282,783
|
|
Share premium
|
|
|
|
|
|
|
|
Opening balance
|
|
|
|
144,350
|
-
|
-
|
|
Share issue in period
|
|
|
|
-
|
144,350
|
144,350
|
|
Closing balance
|
|
|
|
144,350
|
144,350
|
144,350
|
11.
Contingent liabilities
The Group has no contingent
liabilities identified as at 30 June 2024 (2023: US$
nil).
12.
Subsequent events
There have been no subsequent
disclosable events other than:
· On 1
July 2024, the Company issued 6,600,000
options to acquire new Ordinary Shares to a director.
· On 23
August 2024, at a general meeting, shareholders approved an
off-market buy-back of Ordinary Shares owned by Runruno Holdings
Limited. The Company has completed the acquisition of the first two
tranches of RHL shares being 298,576,651 shares at a total cost of
£14.93 million. A final tranche of 94,936,651 RHL shares is to be
acquired before 30 September 2024 at a total cost of £4.7 million.
The shares acquired from RHL will initially be held, at the
directors' discretion, in treasury as non-voting shares; until
either cancelled or re-issued.
· On 23
August 2024, at a general meeting of shareholders the Company
entered into a future production fee agreement as part of an
overall settlement with Runruno Holdings Limited. As a result, the
Revolving Credit Facility with the Group's lenders terminated with
no termination fee payable.
· Following shareholder approval at the 23 August 2024 general
meeting, the Company completed the acquisition of the controlling
interests in the Yamang Mining Corporation group by payment of
US$1.6 million and the issue of 41 million options to acquire
MTL Ordinary Shares at an exercise price
of £0.0001.
· On 29
August 2024 the Company issued 3,785,446
new Ordinary Shares at an issue price of £0.0353 in lieu of paying
a cash bonus.
