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
TRI-STAR RESOURCES
PLC
Interim Results
for the six month period ended 30 June
2018
Tri-Star (AIM: TSTR), the mining and minerals processing
company, is pleased to announce unaudited results for the six
months ended 30 June 2018.
During the period, Tri-Star’s principal activities continued to
be its investment in an antimony and gold production facility in
the Sultanate of Oman (the “SPMP
Project” or the “Project”) which is being developed by Strategic
& Precious Metals Processing LLC (“SPMP”), an Omani company in
which Tri-Star has a 40% equity interest.
Financial Highlights
- On-going cash administrative expenses down 30% to £285k (H1
2017: £410k);
- Annualised salaries have fallen 45% in cash terms since H2 2017
as the Company moved to a share-based compensation structure to
preserve cash resources and align management more closely with
shareholders; major reduction in costs on non-core exploration
assets as primary focus remains on flagship investment in
Oman;
- A total of £3.6m of the short-term secured loan note has been
repaid this year, leaving a balance of £1.0m as of 31 August 2018;
- Net assets increased 130% to £5.8m (30
June 2017: £2.5m);
- Loans to SPMP have increased by 60% in the period to £7.1m,
which currently accrue interest at 15% per annum;
- Successful completion of a £13.0m fund raising through the
placement of new ordinary shares, announced on 25 June 2018 and completed after the period end;
of the funds raised, £10.6m (US$14m)
is being injected into Strategic & Precious Metals Processing
LLC (“SPMP”) in the form of equity and mezzanine debt.
SPMP Highlights
- First class safety record with over 2.48m injury-free man hours have been achieved to
date on site;
- Steven Din joined SPMP as CEO on
1 August and is carrying out a full operational review using some
of the most experienced experts in the field to aid in the hot
commissioning and troubleshooting;
- The new schedule indicates first antimony metal by the end of
October and first gold shortly thereafter;
- Valuable relationships and contracts with international
feedstock and other raw material suppliers have been secured;
- To date, SPMP has secured a total of US$13.8m in letter of credit facilities from Bank
Nizwa S.A.O.G and Alizz Islamic Bank S.A.O.G for the purchase of
feedstock;
- Amer Al Jabri has joined SPMP as
CFO, bringing a significant amount of experience in securing trade
financing and working capital facilities having previously helped
set up a commodity trader specialising in trading Crude Oil,
Petrochemicals & Chemicals;
- Total SPMP funding is currently US$161m, of which external funding comprises
US$66m senior bank debt and
US$13m letter of credit facilities,
representing 49% of total funding. SPMP is currently negotiating
additional working capital facilities to cover the plant ramp up
phase.
Karen O’Mahony, Acting Chief Executive
Officer of Tri-Star, commented:
“This financial report comes at an
exciting time in the history of the Company with our flagship
Oman project almost ready to
produce first metal. Whilst the SPMP management has been working
hard on site in Sohar, we have been focusing on streamlining
Tri-Star and its other subsidiaries to ensure that as much value as
possible from the underlying asset is realised for the Company’s
shareholders. These results reflect our focus on cash cost
reduction at the corporate level, allowing shareholders funds to be
applied to getting this project into production.”
“Tri-Star’s management has also been
actively involved at SPMP board level to support the SPMP
management team with sourcing feedstock and arranging financing
facilities.”
“Steven Din joined SPMP on
1 August 2018 and has hit the ground
running by making key interventions. He has brought in very
experienced external consultants to help with the completion of the
gold calcine and the commissioning process. He and the team also
have managed to secure several new and interesting feedstock
deals.”
Business Review
In the first half of the year, the main focus of management and
Board was to focus on cash cost reduction at the head office and
subsidiary levels while still maintaining the Company’s funding
commitment to SPMP.
The Board is pleased to announce that it has successfully
reduced on-going cash administrative expense by 30% in H1 2018 to
£285k (H1 2017: £410k). A key factor in the reduction of
administrative expense was the reduction of the Board from six to
four members and the restructuring of executive remuneration. The
Board is satisfied that the new structure provides a balanced,
well-functioning Board that meets the needs of the Company.
Further savings were realised through contract re-negotiations
and replacement of some service providers. At the Turkish
subsidiary level, costs were decreased through the sale of
non-essential assets and cost rationalisation.
The Company’s balance sheet was significantly improved with Net
Assets increasing by 130% to £5.8m (30 June
2017: £2.5m).
In H1 2018, Company debt (25% secured loan notes issued to funds
under the management of Odey Asset Management LLP – “Odey Secured
Loan Notes”) was reduced from £4.3m to £2.7m (as at 30 June 2018). Subsequently, a further £2.0m was
repaid leaving a balance of approximately £1.0m as of 31 August 2018.
Tri-Star continues to give full financial support to achieving
SPMP’s strategic objectives. To this end, Tri-Star carried out an
Open Offer which closed in January
2018 (details of which were discussed in Tri-Star’s 2017
year end results) and subsequently executed a placement of ordinary
shares in July 2018 (“Placing”).
Through the Placing, the Company raised £13.0m (before expenses)
by way of placing 30,232,558 new ordinary shares in the Company at
a price of 43 pence each. The funds
managed by Odey Asset Management LLP (the “Odey Funds”) currently
hold 67,805,797 ordinary shares in the Company, representing 72.06%
of the enlarged issued share capital.
The proceeds raised will be used to further fund the SPMP
Project (US$14.0m or £10.6m), and to
repay a portion of the Odey Secured Loan Notes (US$2.6m or £2.0m) which were accruing interest at
a rate of 25% per annum. Approximately £300,000 of the net proceeds
have been retained for working capital purposes. Of the
US$14.0m earmarked to fund the SPMP
Project US$5.1m (£3.9m) has been
advanced to date. This funding of SPMP was made in the form of
further mezzanine loans advanced to SPMP rather than traditional
equity. This decision was made for two reasons: 1) It represents a
healthier financial position for the Company and 2) The principal
on the mezzanine loans can be repaid by SPMP to Tri-Star with no
tax implications.
In other news, David Fletcher,
Tri-Star’s Non-Executive Director (NED) was appointed to the board
of SPMP LLC in June 2018 and he has
proved to be an excellent addition.
As at 31 August 2018 Tri-Star held
£7.3m in cash. This cash balance arises as only US$5.13m of the £14.0m raised in July 2018 had been invested in SPMP at the end of
August 2018.
ENDS
Enquiries:
Tri-Star Resources plc |
|
Karen O’Mahony, Acting CEO/ CFO |
Tel: +44 (0)20 7653
6291 |
Tavistock
Communications Ltd
Charles Vivian/ Gareth Tredway |
Tel +44 (0)20 7920 3150 |
SP Angel Corporate Finance (Nominated Adviser and Joint
Broker) |
|
Robert Wooldridge/Jeff Keating |
Tel: +44 (0)20 3470 0470 |
|
|
FinnCap Ltd (Joint
Broker) |
|
Christopher Raggett/Camille
Gochez |
Tel: +44 (0)20 7220 0500 |
Notes to the Editor
Tri-Star’s principal activities are in an antimony and gold
production facility (the “SPMP Project” or the “Project”).
The SPMP Project is based in Sohar, Sultanate of Oman, and is being developed by Strategic
& Precious Metals Processing LLC (“SPMP”), an Omani company in
which Tri-Star has a 40% equity interest.
Tri-Star also has antimony exploration licenses in Canada and Turkey and a mining permit in Turkey which are held for their potential
contribution of feedstock to the SPMP Project.
TRI-STAR RESOURCES PLC
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE
2018
|
Notes |
Unaudited Period ended 30 June 2018 |
|
Unaudited
Period ended 30 June 2017 (restated) |
|
Audited
Year ended 31 December 2017 |
|
|
£’000 |
|
£’000 |
|
£’000 |
Antimony sales |
|
6 |
|
- |
|
- |
|
|
|
|
|
|
|
Share based payment
charge |
|
(558) |
|
(130) |
|
(135) |
Exceptional
expenses |
4 |
(100) |
|
- |
|
(23) |
Administrative
expenses |
|
(285) |
|
(410) |
|
(846) |
Amortisation of
intangibles |
|
(1) |
|
(1) |
|
(2) |
Total administrative
expenses and loss from operations |
|
(938) |
|
(541) |
|
(1,006) |
|
|
|
|
|
|
|
Profit on sale of
AFSA |
|
- |
|
55 |
|
55 |
Share of loss in
associated companies |
|
(56) |
|
(17) |
|
(41) |
|
|
|
|
|
|
|
Finance income |
|
269 |
|
- |
|
31 |
Loss on extinguishment
of debt |
|
- |
|
(3,637) |
|
(3,637) |
Finance cost |
|
(306) |
|
(1,228) |
|
(1,364) |
Loss before
taxation |
|
(1,031) |
|
(5,368) |
|
(5,962) |
|
|
|
|
|
|
|
Taxation |
5 |
29 |
|
62 |
|
80 |
|
|
|
|
|
|
|
Loss after taxation,
and loss attributable to the equity holders of the Company |
|
(1,002) |
|
(5,306) |
|
(5,882) |
|
|
|
|
|
|
|
Loss before and
after taxation attributable to |
|
|
|
|
|
|
Non-controlling
interest |
|
- |
|
- |
|
(1) |
Equity holders of the
parent |
|
(1,002) |
|
(5,306) |
|
(5,881) |
|
|
|
|
|
|
|
Other comprehensive
(expenditure)/income |
|
|
|
|
|
|
Items that will be
reclassified subsequently to profit and loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on
translating foreign operations |
|
(8) |
|
(5) |
|
(19) |
Recycle to income
statement on disposal of available for sale asset |
|
- |
|
(47) |
|
(47) |
Other comprehensive
(expenditure)/income for the period, net of tax |
|
(8) |
|
(52) |
|
(66) |
|
|
|
|
|
|
|
Total comprehensive
loss for the year, attributable to owners of the company |
|
(1,010) |
|
(5,358) |
|
(5,948) |
|
|
|
|
|
|
|
Total comprehensive
loss attributable to |
|
|
|
|
|
|
Non-controlling
interest |
|
- |
|
- |
|
(1) |
Equity holders of the
parent |
|
(1,010) |
|
(5,358) |
|
(5,947) |
|
|
|
|
|
|
|
Loss per
share |
|
|
|
|
|
|
Basic and diluted loss
per share (pence) (restated) |
6 |
(1.64) |
|
(58.78) |
|
(40.91) |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AT 30 JUNE 2018
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
30 June 2018 |
|
30
June 2017 (restated) |
|
31
December 2017 |
|
|
|
|
|
|
|
Assets |
Notes |
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
Intangible assets |
|
10 |
|
15 |
|
12 |
Investment in
associates |
7 |
1,188 |
|
1,466 |
|
1,421 |
Loan to associate |
8 |
7,115 |
|
- |
|
4,439 |
Property, plant and
equipment |
|
11 |
|
32 |
|
21 |
|
|
8,324 |
|
1,513 |
|
5,893 |
Current |
|
|
|
|
|
|
Cash and cash
equivalents |
|
280 |
|
1,108 |
|
485 |
Trade and other
receivables |
|
117 |
|
104 |
|
106 |
Total current
assets |
|
397 |
|
1,212 |
|
591 |
|
|
|
|
|
|
|
Total
assets |
|
8,721 |
|
2,725 |
|
6,484 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Trade and other
payables |
|
88 |
|
63 |
|
77 |
Short term loans |
8 |
2,730 |
|
- |
|
4,348 |
Total current
liabilities |
|
2,818 |
|
63 |
|
4,425 |
|
|
|
|
|
|
|
Liabilities due
after one year |
|
|
|
|
|
|
Deferred tax
liability |
|
130 |
|
148 |
|
130 |
Total
liabilities |
|
2,948 |
|
211 |
|
4,555 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Issued share
capital |
|
5,371 |
|
3,160 |
|
3,160 |
Share premium |
|
33,432 |
|
31,342 |
|
31,347 |
Share based payment
reserve |
|
1,663 |
|
1,130 |
|
1,105 |
Other reserves |
|
(6,156) |
|
(6,156) |
|
(6,156) |
Translation
reserve |
|
(805) |
|
(783) |
|
(797) |
Retained earnings |
|
(27,728) |
|
(26,176) |
|
(26,726) |
|
|
5,777 |
|
2,517 |
|
1,933 |
|
|
|
|
|
|
|
Non-controlling
interest |
|
(4) |
|
(3) |
|
(4) |
Total
equity |
|
5,773 |
|
2,514 |
|
1,929 |
Total equity and
liabilities |
|
8,721 |
|
2,725 |
|
6,484 |
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE
2018
|
|
Unaudited Period ended |
|
Unaudited
Period ended |
|
Audited
Year ended |
|
|
30
June 2018 |
|
30 June
2017 (restated) |
|
31
December 2017 |
|
|
£'000 |
|
£'000 |
|
£'000 |
Cash flows from
operating activities |
|
|
|
|
|
|
Loss after tax |
|
(1,002) |
|
(5,306) |
|
(5,882) |
Amortisation of
intangibles |
|
1 |
|
1 |
|
2 |
Depreciation |
|
9 |
|
10 |
|
20 |
Finance income |
|
(269) |
|
- |
|
(31) |
Finance cost |
|
306 |
|
1,176 |
|
1,312 |
Loss from
associates |
|
56 |
|
17 |
|
41 |
Fees paid by
shares |
|
5 |
|
130 |
|
135 |
Loss on extinguishment
of loans |
|
- |
|
3,637 |
|
3,637 |
Equity settled
share-based payments |
|
558 |
|
- |
|
- |
Movement on fair value
of derivatives |
|
- |
|
52 |
|
52 |
Profit on disposal of
AFSA |
|
- |
|
(55) |
|
(55) |
Increase in trade and
other receivables |
|
(14) |
|
(67) |
|
(10) |
Increase/(decrease) in
trade and other payables |
|
10 |
|
(11) |
|
(15) |
Net cash outflow
from operating activities |
|
(340) |
|
(416) |
|
(794) |
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Loans made to
associate |
|
(2,016) |
|
- |
|
(4,511) |
Proceeds from sale pf
property, plant and equipment |
|
11 |
|
- |
|
- |
Net receipts on sale of
AFSA |
|
- |
|
96 |
|
96 |
Finance income |
|
2 |
|
- |
|
- |
Net cash
(outflow)/inflow from investing activities |
|
(2,003) |
|
96 |
|
(4,415) |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Proceeds from issue of
share capital |
|
4,420 |
|
1,300 |
|
1,300 |
Share issue costs |
|
(129) |
|
(54) |
|
(54) |
Finance costs |
|
(161) |
|
(263) |
|
(498) |
Repayment of loans |
|
(1,805) |
|
- |
|
- |
New loans |
|
- |
|
- |
|
4,511 |
Net cash inflow from
financing activities |
|
2,325 |
|
983 |
|
5,259 |
|
|
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents |
|
(18) |
|
663 |
|
50 |
Cash and cash
equivalents at beginning of period |
|
485 |
|
447 |
|
447 |
Exchange differences
on cash and cash equivalents |
|
(187) |
|
(2) |
|
(12) |
Cash and cash
equivalents at end of period |
|
280 |
|
1,108 |
|
485 |
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE
2018
|
Share
capital |
Share
premium account |
Other
reserves |
Share-based payment reserve |
Translation reserve |
Retained earnings |
Total
attributable to owners of parent |
Non-controlling interest |
Total
equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
Balance at 1
January 2017 (audited) |
2,601 |
14,525 |
(6,109) |
1,130 |
(778) |
(20,870) |
(9,501) |
(3) |
(9,504) |
Issue of share
capital |
559 |
13,057 |
- |
- |
- |
- |
13,616 |
- |
13,616 |
Share issue costs |
- |
(54) |
- |
- |
- |
- |
(54) |
- |
(54) |
Fair value on
extinguishment of loan |
- |
3,814 |
- |
- |
- |
- |
3,814 |
- |
3,814 |
Transactions with
owners |
559 |
16,817 |
- |
- |
- |
- |
17,376 |
- |
17,376 |
Loss for the
period |
- |
- |
- |
- |
- |
(5,306) |
(5,306) |
- |
(5,306) |
Transfer on sales of
available for sale asset |
- |
- |
(47) |
- |
- |
- |
(47) |
- |
(47) |
Exchange difference on
translation of foreign operations |
- |
- |
- |
- |
(5) |
- |
(5) |
- |
(5) |
Total comprehensive
loss for the period |
- |
- |
(47) |
- |
(5) |
(5,306) |
(5,358) |
- |
(5,358) |
Balance at 30 June
2017 (unaudited) (restated) |
3,160 |
31,342 |
(6,156) |
1,130 |
(783) |
(26,176) |
2,517 |
(3) |
2,514 |
Issue of share
capital |
- |
5 |
- |
- |
- |
- |
5 |
- |
5 |
Transfer on lapse of
options |
- |
- |
- |
(25) |
- |
25 |
- |
- |
- |
Transactions with
owners |
- |
5 |
- |
-
25 |
- |
25 |
5 |
- |
5 |
Loss for the
period |
- |
- |
- |
- |
- |
(575) |
(575) |
(1) |
(576) |
Exchange difference on
translation of foreign operations |
- |
- |
- |
- |
(14) |
- |
(14) |
- |
(14) |
Total comprehensive
loss for the period |
- |
- |
- |
- |
(14) |
(575) |
(589) |
(1) |
(590) |
Balance at 31
December 2017 (audited) |
3,160 |
31,347 |
(6,156) |
1,105 |
(797) |
(26,726) |
1,933 |
(4) |
1,929 |
Issue of share
capital |
2,211 |
2,214 |
- |
- |
- |
- |
4,425 |
- |
4,425 |
Share issue costs |
- |
(129) |
- |
- |
- |
- |
(129) |
- |
(129) |
Share based
payments |
- |
- |
- |
558 |
- |
- |
558 |
- |
558 |
Transactions with
owners |
2,211 |
2,085 |
- |
558 |
- |
- |
4,854 |
- |
4,854 |
Loss for the
period |
- |
- |
- |
- |
- |
(1,002) |
(1,002) |
- |
(1,002) |
Exchange difference on
translation of foreign operations |
- |
- |
- |
- |
(8) |
- |
(8) |
- |
(8) |
Total comprehensive
loss for the period |
- |
- |
- |
- |
(8) |
(1,002) |
(1,010) |
- |
(1,010) |
Balance at 30 June
2018 (unaudited) |
5,371 |
33,432 |
(6,156) |
1,663 |
(805) |
(27,728) |
5,777 |
(4) |
5,773 |
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2018
1. GENERAL INFORMATION
The financial information set out in this interim report for the
Company, its subsidiaries and associates (the “Group”) does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group’s statutory financial
statements for the year ended 31 December
2017 have been completed and filed at Companies House.
The auditor’s report on the annual financial statements was
unqualified and did not contain statements under section 498(2) or
section 498(3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company’s ordinary shares are quoted on the AIM market of
the London Stock Exchange and the Company applies the Companies Act
2006 when preparing its annual financial statements.
The annual financial statements for the year ended 31 December 2018 will be prepared under
International Financial Reporting Standards as adopted by the
European Union (IFRS) and the principal accounting policies adopted
remain unchanged from those adopted in preparing its financial
statements for the year ended 31 December
2017.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
condensed consolidated interim financial statements. IFRS 9 -
Financial Instruments has been applied.
The financial statements for the period ended 30 June 2017 have been restated in respect of the
share of losses in associated companies only. This is as a result
of a change in accounting policy within SPMP in respect of
capitalisation of costs, and has been applied to the June 2017 accounts to give a meaningful
comparison. This restatement has resulted in a decrease in share of
loss in associated companies of £353,000 and an increase in the
investment in associates of £353,000.
GOING CONCERN
The Directors have prepared cash flow forecasts for the period
ending 30 September 2019. The forecasts assume that the
balance of US$2m due from SPMP on
successful commissioning of the Oman Antimony Roaster in its pilot
phase will be received, as described further in Note 8. The
forecasts demonstrate that the Group will have sufficient cash
resources available to allow it, assuming the US$2m is received, to continue in business for a
period of at least twelve months from the date of approval of these
financial statements. Accordingly, the accounts have been
prepared on a going concern basis.
3. SEGMENTAL REPORTING
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group’s chief operating decision maker to make decisions
about the allocation of resources and assessment of performance and
about which discrete financial information is available. The
chief operating decision maker has defined that the Group’s only
reportable operating segment during the period is mining.
In respect of the non-current assets as at 30 June 2018 of £8,324,000, £5,000 arise in the
UK (30 June 2017: £20,000,
31 December 2017: £12,000), and
£8,319,000 arise in the rest of the world (30 June 2017: £1,140,000, 31 December 2017: £5,881,000).
4. EXCEPTIONAL EXPENSES
Exceptional expenses relate to the restructuring of the Board of
Tri-Star and the management team.
5. TAXATION
As at 31 December 2017 Tri-Star
Resources plc had unrelieved Schedule D Case 1 corporation tax
losses of £4.99m. The Directors expect these losses to be
available to offset against future taxable trading
profits.
The Group has not recognised a deferred tax asset at
30 June 2018 (30 June and
31 December 2017: £nil) in respect of
these losses on the grounds that it is uncertain when taxable
profits will be generated by the Group to utilise any such
losses.
6. (LOSS) PER SHARE
The calculation of the basic (loss) per share is based on the
(loss) attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
|
Unaudited |
Unaudited |
Unaudited |
|
period
ended |
period ended |
period ended |
|
30 June
2018 |
30 June 2017
(restated) |
31 December 2017
(restated) |
|
£’000 |
£’000 |
£’000 |
|
|
|
|
Loss on ordinary activities after
tax (&’000) |
(1,002) |
(5,306) |
(5,882) |
Weighted average number of shares for calculating basic loss per
share |
60,921,020 |
9,026,640 |
14,378,619 |
|
|
|
|
Basic and diluted loss per share
(pence) |
(1.64) |
(58.78) |
(40.91) |
|
|
|
|
Diluted earnings per share is the same as basic loss per share
in each year because the potential shares arising under the share
option scheme and share warrants are not included.
The weighted average number of ordinary shares excludes deferred
shares which have no voting rights and no entitlement to a
dividend.
On 13 June 2018, Tri-Star
consolidated every 1,000 of its ordinary shares of 0.005 pence into one new ordinary share of
5 pence each. This resulted in
63,850,388,257 shares being consolidated into 63,850,258 new
ordinary shares of 5 pence each. The
loss per share for prior periods has been restated to show the
comparative loss had the consolidation already taken place. The
loss per share for the current period has been calculated as if the
consolidation had taken place at the beginning of the period.
7. INVESTMENT IN ASSOCIATES
Strategic & Precious Metals Processing LLC (“SPMP”) was
incorporated in the Sultanate of Oman in 2014. Tri-Star has a 40%
interest in the company and accounts for its investment in SPMP as
an associate undertaking.
SPMP made a loss of £140,000 in the period to 30 June 2018 (30 June
2017 (restated): £43,000, 31 December
2017: £103,000) of which Tri-Star’s share in the Group
accounts was £56,000 (30 June 2017
(restated): £17,000, 31 December
2017: 41,000). Tri-Star had a net investment of
£1,188,000 on consolidation as at 30 June
2018 (30 June 2017 (restated):
£1,466,000, 31 December 2017:
£1,421,000).
Additionally, Tri-Star has made loans to SPMP as detailed in
Note 7.
8. LOAN NOTES
SPMP Mezzanine loan notes
Loans receivable represent the US$6m mezzanine loan which the Company advanced
to SPMP as announced on 29 November
2017, and the further US$2.8m
advanced as announced on 24 January
2018.
The principal terms of the loan are as follows:
- An interest rate of 15% per annum compounded, payable in full
on redemption of the loan;
- Ranks pari passu with the existing mezzanine loans already in
place at SPMP;
- Loan term of five years with SPMP having the option to redeem
(with accrued interest to date) from the third anniversary of
drawdown.
- All repayments made by SPMP to each of its 3 shareholders will
be pari passu in proportion to the respective total loan amounts
outstanding.
There is an option to convert the loan into shares if it remains
outstanding for 12 months after the due date.
Since the period end a further US$8m has been advanced by the Company to SPMP by
way of mezzanine loans.
Odey Loan Notes
Loan Notes payable comprise short-dated secured loan notes
issued to OEI and OMI, two of the three OAM Funds that were equity
shareholding funds as of the 30th June 2018. The Loan Notes are secured on a
debenture comprising a fixed and floating charge over all the
assets of Tri-Star Resources plc.
The Loan Notes carry an annual interest rate of 25% and had an
original repayment date of 30 June
2018 or equity placement whichever is earlier. As an equity
placement took place in January 2018,
the loans technically fell due, but OEI and OMI agreed to extend
repayment to 30 June 2019 or earlier
at the Company’s discretion.
The US$6,000,000 Loan Notes were
issued in November 2017 and as at
31 December 2017 had an outstanding
balance of US$6,140,000 including
accrued interest. On 19 January 2018,
US$2,681,000 of the principal and
interest was repaid. As at the period end, the outstanding balance
of the Loan Notes was US$3,950,000.
Since the period end a further US$2,639,000 has been repaid on 10 July 2018 leaving an outstanding balance of
£1,338,000.
9. CONTINGENT ASSET
Under the agreement to sell the Roaster intellectual property to
Strategic & Precious Metals Processing LLC, there is a balance
of US$2m due to be paid to
Tri-Star. This payment is contingent upon the successful
commissioning of the plant in its pilot phase. The Directors
have determined not to accrue this deferred income.
Therefore, there is a contingent asset of US$2m as at 30 June
2018 (30 June and 31 December
2017: US$2m).
10. EVENTS AFTER THE REPORTING
DATE
On 22 June 2018 Tri-Star announced
a proposed Conditional Placing of 30,232,558 new ordinary shares of
5p each raising £13m before expenses, which completed on
12 July 2018. The proceeds of this
were used to invest a further US$14m
in SPMP and to repay US$2,639,000 of
the Odey loans. Approximately £300,000 of the net proceeds have
been retained for working capital purposes.