Last checked at 28 Sep 2018 08:00
28 September 2018
Bezant Resources Plc
("Bezant" or the "Company")
Interim Results for the Six Months Ended 30 June 2018
Bezant (AIM: BZT), the copper-gold exploration and development company, announces its unaudited interim results for the six months ended 30 June 2018.
Highlights:
· Fundraising of £600,000 (before expenses) in February 2018 via a subscription and placing of, in aggregate, 133,333,333 new ordinary shares of 0.2 pence each in the capital of the Company ("Ordinary Shares") at a price of 0.45 pence per share which included a cornerstone investment of £400,000 from Tiger Resource Finance plc, alongside its directors, including Colin Bird and his associates
· Board restructuring with Colin Bird appointed as Executive Chairman in March 2018 and Laurence Read assuming the role of CEO in January 2018
· Novum Securities Limited appointed as sole broker to the Company
· Disposal of Choco platinum-gold project, Colombia, for consideration of US$500,000 concluded in April 2018, thereby removing the Company's exposure to further mining costs and liabilities associated with the project
· Strategic review completed in May 2018 with the Company now focused on generating value from its Mankayan and Eureka copper-gold assets
· Exploration period of the Mineral Production Sharing Agreement ("MPSA") No. 057-96-CAR in respect of the Company's Mankayan Project, Philippines, renewed for a standard period expiring in April 2020
· Further fundraising of £800,000 (before expenses) in late May 2018 through a subscription and placing of, in aggregate, 222,222,222 new Ordinary Shares at a price of 0.36 pence per share, including a £50,000 participation from Colin Bird
· During the reporting period a thorough review and analysis was undertaken of all assets in the group's portfolio which continues as the Company seeks to maximise value from its copper-gold assets in the Philippines and Argentina
Post Period End
· In aggregate, 87.5m options over Ordinary Shares granted in August 2018 pursuant to the Company's Executive Share Option Scheme of which 75m were awarded to the Company's Directors (42.5m with an exercise price of 0.5 pence per share and 32.5m with an exercise price of 1 pence per share)
Commenting today, Laurence Read, CEO of Bezant, said:
"During the reporting period, we have undertaken a significant strategic review and restructuring programme, resulting in the Company now having a clear focus on generating value from its copper-gold asset portfolio. Our Colombian alluvial gold-platinum operations were successfully sold to a private acquirer and an intense phase of work has now commenced, as we work through the considerable information held on our Mankayan and Eureka projects. Our belief in the Company's existing copper-gold portfolio continues to grow as we discover more facets to the projects and work closely with third party consultants to investigate the potential and unlock the inherent value of such promising assets."
For further information, please contact:
| Bezant Resources Plc Laurence Read Chief Executive Officer
Colin Bird Executive Chairman
Strand Hanson Limited (Nomad) James Harris / Matthew Chandler / James Dance
Novum Securities Limited (Broker) Jon Belliss
or visit http://www.bezantresources.com
|
Tel: +44 (0)20 3289 9923
Tel: +44 (0)20 7409 3494
Tel: +44 (0)20 7399 9400
|
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Chairman's Statement
I am pleased to present the Group's unaudited interim results for the 6 months ended 30 June 2018 and would like to take this opportunity to provide an overview of the Board's ongoing strategy which was developed during the early part of 2018.
As the incoming Chairman, appointed in March 2018, I joined the Company's management team and had the benefit of hindsight. At the end of 2017, the Company's then short-term cash flow constraints were, in my opinion, dwarfed by the sheer magnitude and potential of the Company's Mankayan copper-gold project in the Philippines (the "Mankayan Project") and its lesser explored Eureka project in Argentina.
During the reporting period, the Company has successfully raised, in aggregate, £1,400,000 (gross), disposed, in late April 2018, of the Company's Choco alluvial gold-platinum project in Colombia (the "Choco Project") for gross proceeds of US$500,000, conducted significant technical analysis of its remaining projects and concluded a comprehensive strategic review such that the Company is now focussed on maximising value from its quality copper-gold projects with the Mankayan Project, in particular, now amongst the global forerunners in this arena with its impressive Cu equivalent grades.
Prior to joining the Company, I had clear views on the potential of the two copper related projects in its portfolio and this has been endorsed by my subsequent close scrutiny of the available historic technical data. Likewise, I believed that the Company's management were a team I could work closely with to seek to release such potential future value, and this too has been borne out by our close interaction since my appointment.
Once the strategic decision had been made to exit from the Choco Project, the executive team implemented the disposal in a very professional and commercial manner with US$450,000 of the gross sale proceeds received on signing of the legally binding sale agreement and the balancing US$50,000 held in escrow pending routine post-completion deliverables/handover matters.
Global stock markets have generally continued to strengthen notwithstanding trade war issues. It remains my personal expectation that inflationary pressure is now building and that interest rates will need to rise as a consequence, which I believe could then lead to a correction with markets becoming somewhat depressed. The aforementioned climate is typically good for commodities and, economic conditions apart, the fundamentals for base metals are very encouraging, particularly for copper.
It is noted that the typical gestation period for a large new copper mine is approximately 8 years from exploration activities commencing. Therefore, forecast demand in 2020 to 2030 is key to the sanctioning of new mining operations and many market commentators are projecting significant copper price increases for this period. The Board recognises that during the life of a potential future mine there will inevitably be cyclical variations in the price of copper but I personally believe that a prospective developer will always focus on the mid to long term market price when evaluating copper projects.
In this context, our Mankayan Project is technically advanced and well positioned amongst a diminishing list of prospective global copper projects, and we are now actively marketing the project in a focused manner to large mining groups and institutions who recognise the strength of copper price fundamentals and the opportunity the project represents.
Mr Colin Bird
Executive Chairman
28 September 2018
Group Statement of Profit and Loss
For the six months ended 30 June 2018
|
| Notes | Unaudited Six months ended 30 June 2018 £'000 | Unaudited Six months ended 30 June 2017 £'000 | Audited Year ended 31 December 2017 £'000 |
|
|
|
|
|
|
| CONTINUING OPERATIONS |
|
|
|
|
|
|
|
|
|
|
| Group revenue |
| - | - | - |
|
Cost of sales |
| - | - | - |
|
|
|
|
|
|
| Gross profit/(loss) |
| - | - | - |
|
|
|
|
|
|
| Operating expenses |
| (293) | (523) | (968) |
|
Group operating loss |
| (293) | (523) | (968) |
|
|
|
|
|
|
| Other income |
| 9 | 3 | 3 |
| Impairment | 3 | (199) | - | (80) |
|
|
|
|
|
|
| Loss before taxation |
| (483) | (520) | (1,045) |
|
Taxation |
| - | - | - |
|
|
|
|
|
|
| Loss for the period from continued operations |
| (483) | (520) | (1,045) |
|
|
|
|
|
|
| DISCONTINUED OPERATIONS |
|
|
|
|
| Loss for the period from discontinued operations | 8 | (316) | (486) | (3,587) |
|
|
|
|
|
|
| Loss for the period |
| (799) | (1,006) | (4,632) |
|
|
|
|
|
|
| Attributable to: Owners of the Company |
| (854) | (1,006) | (4,633) |
| - Continuing operations |
| (483) | (520) | (1,045) |
| - Discontinued operations |
| (371) | (486) | (3,588) |
| Non-controlling interest - discontinued operations |
| 55 | - | 1 |
|
|
| (799) | (1,006) | (4,632) |
| Loss per share (pence) |
|
|
|
|
| ||
| Basic and diluted from continuing operations | 4 | (0.06) | (0.18) | (0.29) |
| ||
| Basic and diluted from discontinued operations | 4 | (0.04) | (0.16) | (1.00) |
| ||
| Basic and diluted from all operations | 4 | (0.10) | (0.34) | (1.29) |
| ||
|
|
|
|
|
| |||
Group Statement of Other Comprehensive Income
For the six months ended 30 June 2018
|
|
| Unaudited Six months ended 30 June 2018 £'000 | Unaudited Six months ended 30 June 2017 £'000 | Audited Year ended 31 December 2017 £'000 |
| Other comprehensive income: |
|
|
|
|
| Loss for the period |
| (799) | (1,006) | (4,632) |
| Foreign currency reserve movement |
| (97) | 23 | 61 |
| Total comprehensive loss for the period |
| (896) | (983) | (4,571) |
|
|
|
|
|
|
| Attributable to: Owners of the Company |
| (950) | (986) | (4,575) |
| - Continuing operations |
| (495) | (526) | (1,068) |
| - Discontinued operations |
| (455) | (460) | (3,507) |
| Non-controlling interest - discontinued operations |
| 54 | 3 | 4 |
|
|
| (896) | (983) | (4,571) |
|
|
|
|
|
|
Group Consolidated Statement of Changes in Equity
For the six months ended 30 June 2018
|
| Share Capital £'000 | Share Premium £'000 | Shares to be issued £'000 | Other Reserves £'000 | Retained Losses £'000 | Non-Controll ing interest £'000 | Total Equity £'000 |
| Unaudited - six months ended 30 June 2018 |
|
|
|
|
|
|
|
| Balance at 1 January 2018 | 1,225 | 35,433 | - | 802 | (32,124) | (50) | 5,286 |
| Current period loss | - | - | - |
| (854) | 55 | (799) |
| Foreign currency reserve | - | - | - | (96) | - | (1) | (97) |
| Total comprehensive loss for the period | - | - | - | (96) | (854) | 54 | (896) |
| Proceeds from shares issued (net of expenses) | 773 | 659 | - | - | - | - | 1,432 |
| Warrants issued | - | (16) | - | 16 | - | - | - |
| Disposal of operations | - | - | - | - | 4 | (4) | - |
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2018 | 1,998 | 36,076 | - | 722 | (32,974) | - | 5,822 |
| Unaudited - six months ended 30 June 2017 |
|
|
|
|
|
|
|
| Balance at 1 January 2017 | 410 | 33,227 | - | 991 | (27,756) | (54) | 6,818 |
| Current period loss | - | - | - | - | (1,006) | - | (1,006) |
| Foreign currency reserve | - | - | - | 20 | - | 3 | 23 |
| Total comprehensive loss for the period | - | - | - | 20 | (1,006) | 3 | (983) |
| Proceeds from shares issued (net of expenses) | 200 | 694 | - | - | - | - | 894 |
| Warrants issued | - | - | - | 8 | - | - | 8 |
| Issue of ordinary shares related to business combination | 50 | 221 | - | - | - | - | 271 |
| Acquisition of subsidiary companies | - | - | 163 | - | - | - | 163 |
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2017 | 660 | 34,142 | 163 | 1,011 | (28,762) | (51) | 7,171 |
| Audited - year ended 31 December 2017 |
|
|
|
|
|
|
|
| Balance at 1 January 2017 | 410 | 33,227 | - | 991 | (27,756) | (54) | 6,818 |
| Current period loss | - | - | - | - | (4,633) | 1 | (4,632) |
| Foreign currency reserve | - | - | - | 58 | - | 3 | 61 |
| Total comprehensive loss for the period | - | - | - | 58 | (4,633) | 4 | (4,571) |
| Proceeds from shares issued | 765 | 1,985 | - | - | - | - | 2,750 |
| Issue of ordinary shares related to business combination | 50 | 221 | - | - | - | - | 271 |
| Warrants issued | - | - | - | 18 | - | - | 18 |
| Lapsed share options | - | - | - | (265) | 265 | - | - |
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2017 | 1,225 | 35,433 | - | 802 | (32,124) | (50) | 5,286 |
Group Consolidated Balance Sheet
As at 30 June 2018
|
|
|
| Unaudited | Unaudited | Audited |
|
|
|
| 30 June 2018 | 30 June 2017 | 31 December 2017 |
|
| Notes |
| £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ASSETS
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
| Plant and equipment | 5 |
| 7 | 2,385 | 10 |
| Intangible assets | 6 |
| - | 316 | - |
| Exploration and evaluation assets | 7 |
| 4,782 | 4,789 | 4,786 |
| Total non-current assets |
|
| 4,789 | 7,490 | 4,796 |
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
| Trade and other receivables |
|
| 109 | 121 | 99 |
| Cash and cash equivalents |
|
| 1,014 | 199 | 231 |
|
|
|
| 1,123 | 320 | 330 |
| Non-current assets classified as held for sale | 8 |
| - | - | 467 |
| Total current assets |
|
| 1,123 | 320 | 797 |
|
|
|
|
|
|
|
| TOTAL ASSETS |
|
| 5,912 | 7,810 | 5,593 |
|
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
| Trade and other payables |
|
| 90 | 639 | 212 |
| Liabilities directly associated with non-current assets classified as held for sale | 8 |
| - | - | 95 |
| Total current liabilities |
|
| 90 | 639 | 307 |
|
|
|
|
|
|
|
|
NET ASSETS |
|
| 5,822 | 7,171 | 5,286 |
|
|
|
|
|
|
|
| EQUITY |
|
|
|
|
|
| Share capital | 9 |
| 1,998 | 660 | 1,225 |
| Share premium | 9 |
| 36,076 | 34,142 | 35,433 |
| Shares to be issued |
|
| - | 163 | - |
| Share-based payment reserve |
|
| 34 | 273 | 18 |
| Foreign exchange reserve |
|
| 688 | 746 | 784 |
| Retained losses |
|
| (32,974) | (28,762) | (32,124) |
| EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT |
|
| 5,822 | 7,222 | 5,336 |
| NON-CONTROLLING INTEREST |
|
| - | (51) | (50) |
|
TOTAL EQUITY |
|
| 5,822 | 7,171 | 5,286 |
Group Consolidated Statement of Cash Flows
For the six months ended 30 June 2018
|
|
| Unaudited | Unaudited | Audited |
|
|
| Six months ended 30 June 2018 | Six months ended 30 June 2017 |
Year ended 31 December 2017 |
|
| Notes | £'000 | £'000 | £'000 |
|
|
|
|
|
|
| Net cash outflow from operating activities | 10.1 | (824) | (576) | (2,068) |
|
|
|
|
|
|
| Cash flows used in investing activities |
|
|
|
|
| Other income |
| 9 | 26 | 53 |
| Acquisition of plant and equipment |
| - | (2) | (13) |
| Option payments (net) |
| - | (234) | (233) |
| Proceeds from disposal of group, net of cash disposed | 10.2 | 234 | - | - |
| Acquisition of subsidiary, net of cash acquired |
| - | (155) | (155) |
| Loans to associates |
| (131) | - | (102) |
|
|
| 112 | (365) | (450) |
| Cash flows from financing activities |
|
|
|
|
| Proceeds from issuance of ordinary shares (net of issue cost) |
| 1,293 | 894 | 2,593 |
|
|
| 1,293 | 894 | 2,593 |
| Increase/(decrease) in cash |
| 581 | (47) | 75 |
|
|
|
|
|
|
| Cash and cash equivalents at beginning of period |
| 251 | 229 | 229 |
| Foreign exchange movement |
| 182 | 17 | (53) |
|
|
|
|
|
|
| Cash and cash equivalents at end of period |
| 1,014 | 199 | 251 |
|
|
|
|
|
|
| Cash and cash equivalents - continuing operations |
| 1,014 | 97 | 231 |
| Cash and cash equivalents included in assets classified as held for sale |
| - | 102 | 20 |
Notes to the interim financial information
For the six months ended 30 June 2018
| 1. | Basis of preparation The unaudited interim financial information set out above, which incorporates the financial information of the Company and its subsidiary undertakings (the "Group"), has been prepared using the historical cost convention and in accordance with International Financial Reporting Standards ("IFRS"), including IFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by the European Union ("EU") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
These interim results for the six months ended 30 June 2018 are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2017 have been delivered to the Registrar of Companies and the auditors' report on those financial statements was unqualified and contained an emphasis of matter pertaining to going concern.
Going concern basis of accounting The Group made a loss after tax from all operations for the six months ended 30 June 2018 of £799,000 had negative cash flows from operations and is currently not generating revenues. Cash and cash equivalents were £1,014,000 as at 30 June 2018. An operating loss is expected in the 12 months subsequent to the date of these results and accordingly the Company will probably need to raise funding to provide additional working capital to finance its on-going activities. Management has successfully raised funds in the past, but there is no guarantee that adequate funds will be available when needed in the future.
There is a material uncertainty related to the conditions above that may cast significant doubt on the Group's ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.
Based on the Board's assessment that the Company will be able to raise additional funds, if required, to meet its working capital and capital expenditure requirements, the Board have concluded that they have a reasonable expectation that the Group can continue in operational existence for the foreseeable future. For these reasons the Group continues to adopt the going concern basis in preparing this unaudited interim financial information. |
| 2. | Segment reporting For the purposes of segmental information, the operations of the Group are focused in three geographical segments, namely: the UK, Argentina and the Philippines and comprise one class of business: the exploration, evaluation and development of mineral resources. The UK is used for the administration of the Company.
The Group's operating loss arose from its operations in the UK, Argentina, the Philippines and Colombia (discontinued). |
|
| For the six months ended 30 June 2018 |
|
|
| |||
|
|
| Continuing | Discontinued |
|
| ||
|
|
| UK | Argentina | Philippines | Colombia | Total |
|
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
|
| Consolidated loss before tax | (248) | (32) | (203) | (316) | (799) |
|
|
| Included in the consolidated loss before tax are the following income/(expense) items: |
|
|
|
|
|
|
|
| Foreign currency gain | 143 | - | - | - | 143 |
|
|
|
|
|
|
|
|
|
|
|
| Total Assets | 1,099 | 4,813 | - | - | 5,912 |
|
|
| Total Liabilities | (87) | (3) | - | - | 90 |
|
|
| For the six months ended 30 June 2017 |
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
| UK | Argentina | Philippines | Colombia | Total |
|
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
|
| Consolidated loss before tax | (487) | (33) | - | (486) | (1,006) |
|
|
| Included in the consolidated loss before tax are the following income/(expense) items: |
|
|
|
|
|
|
|
| Depreciation | (1) | (2) | - | - | (3) |
|
|
| Foreign currency gain | (92) | - | - | (8) | (100) |
|
|
|
|
|
|
|
|
|
|
|
| Total Assets | 88 | 4,830 | - | 2,892 | 7,810 |
|
|
| Total Liabilities | (303) | (12) | - | (324) | (639) |
|
|
| For the year ended 31 December 2017 |
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
| UK | Argentina | Philippines | Colombia | Total |
|
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
|
| Consolidated loss before tax | (991) | (54) | - | (3,587) | (4,632) |
|
|
| Included in the consolidated loss before tax are the following income/(expense) items: |
|
|
|
|
|
|
|
| Depreciation | (80) | - | - | (2,094) | (2,174) |
|
|
| Interest received | (1) | (4) | - | (9) | (14) |
|
|
| Foreign currency gain | (155) | - | - | (12) | (167) |
|
|
|
|
|
|
|
|
|
|
|
| Total Assets | 324 | 4,802 | - | 467 | 5,593 |
|
|
| Total Liabilities | (208) | (4) | - | (95) | (307) |
|
| 3. | Impairment | Unaudited | Unaudited | Audited |
|
|
| Six months ended 30 June 2018 | Six months ended 30 June 2017 | Year ended 31 December 2017 |
|
|
| £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
| Impairment loss on loan to associate | 199 | - | 80 |
|
|
| 199 | - | 80 |
| 4. | Loss per share |
|
| The basic and diluted loss per share have been calculated using the loss attributable to equity holders of the Company for the six months ended 30 June 2018 of £854,000 (six months ended 30 June 2017: £1,006,000; year ended 31 December 2017: £4,633,000). The basic loss per share was calculated using a weighted average number of shares in issue of 871,214,591 (six months ended 30 June 2017: 298,892,115; year ended 31 December 2017: 359,330,994).
The weighted average number of shares in issue and to be issued if calculating the diluted loss per share would amount to 918,460,580 (six months ended 30 June 2017: 301,289,915; year ended 31 December 2017: 406,576,983).
The diluted loss per share and the basic loss per share are recorded as the same amount, as conversion of share options decreases the basic loss per share, thus being anti-dilutive. |
| 5. | Plant and equipment | ||||
|
|
| Unaudited | Unaudited | Audited |
|
|
|
| 30 June 2018 | 30 June 2017 | 31 December 2017 |
|
|
|
| £'000 | £'000 | £'000 |
|
| 5.1 | Cost |
|
|
|
|
|
| Balance at beginning of period | 84 | 95 | 95 |
|
|
| Acquisitions through business combinations - Plant | - | 708 | 545 |
|
|
| Transfer - Mine development from options (note 6) | - | 1,666 | 1,668 |
|
|
| Additions - Equipment | - | 2 | 13 |
|
|
| Classified as held for sale (note 8) | - | - | (2,252) |
|
|
| Exchange differences | (8) | (10) | 15 |
|
|
| At end of period | 76 | 2,461 | 84 |
|
|
|
|
|
|
|
|
| 5.2 | Depreciation |
|
|
|
|
|
| Balance at beginning of period | 74 | 75 | 75 |
|
|
| Charge for the period | - | 3 | 14 |
|
|
| Classified as held for sale | - | - | (9) |
|
|
| Exchange differences | (5) | (2) | (6) |
|
|
| At end of period | 69 | 76 | 74 |
|
|
|
|
|
|
|
|
|
|
Net book value at end of period | 7 | 2,385 | 10 |
|
| 6. | Intangible assets | ||||
|
|
| Unaudited | Unaudited | Audited |
|
|
|
| 30 June 2018 | 30 June 2017 | 31 December 2017 |
|
|
|
| £'000 | £'000 | £'000 |
|
| 6.1 | Options to acquire exploration licences |
|
|
|
|
|
| Balance at beginning of period | - | 1,672 | 1,672 |
|
|
| Additions | - | - | 288 |
|
|
| Contribution to option costs | - | (275) | (275) |
|
|
| Payment to exercise option | - | 437 | - |
|
|
| Transfer option exercised to Mine Development (note 5) | - | (1,666) | (1,668)1 |
|
|
| Exchange differences | - | (14) | (17) |
|
|
| Carried forward at end of period | - | 154 | - |
|
|
|
|
|
|
|
|
| 6.2 | Intellectual property rights over proprietary geological data |
|
|
|
|
|
| Balance at beginning of period | - | 162 | 162 |
|
|
| Classified as held for sale (note 8) | - | - | (162) |
|
|
| Carried forward at end of period | - | 162 | - |
|
|
|
|
|
|
|
|
|
|
Total intangibles | - | 316 | - |
|
|
|
|
|
|
|
|
|
| 1 The option costs were transferred to mine development upon the exercise of the option in December 2017 to acquire mining titles FKJ-083 and HCA-082 in the Choco Region of Colombia. |
| |||
| 7. | Exploration and evaluation assets | ||||
|
|
| Unaudited | Unaudited | Audited |
|
|
|
| 30 June 2018 | 30 June 2017 | 31 December 2017 |
|
|
|
| £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
| Balance at beginning of period | 4,786 | 4,790 | 4,790 |
|
|
| Foreign exchange | (4) | (1) | (4) |
|
|
|
Carried forward at end of period | 4,782 | 4,789 | 4,786 |
|
The amount of capitalised exploration and evaluation expenditure relates to 11 licences comprising the Eureka Project and are located in north-west Jujuy near to the Argentine border with Bolivia and are formally known as Mina Eureka, Mina Eureka II, Mina Gino I, Mina Gino II, Mina Mason I, Mina Mason II, Mina Julio I, Mina Julio II, Mina Paul I and Mina Paul II, covering, in aggregate, an area in excess of approximately 5,500 hectares and accessible via a series of gravel roads. All licences remains valid and in good standing.
The directors have assessed the value of the intangible assets, and in their opinion, based on a review of the expiry dates of licences, expected available funds and the intention to continue exploration and evaluation, no impairment is necessary.
| 8. | Non-current assets and disposal groups classified as held for sale |
|
| |||
|
|
|
|
| |||
|
| Following a comprehensive review of the strategic options available for its operations in Colombia, Bezant entered into a legally binding agreement on 25 April 2018 (the "Sale Agreement") with Auvert Mining Group Limited ("Auvert") for the sale of its wholly owned subsidiary Ulloa Recursos Naturales S.A.S. ("Ulloa"), which held the Group's wholly owned alluvial platinum and gold licences, located in the Choco region of Colombia, and the associated processing plant, mobile test plant and other mining equipment located in the licence area (the "Choco Project").
As a result of the transaction, this group of assets (the "disposal group") were disclosed as a disposal group held for sale at 31 December 2017. The assets and liabilities to be disposed of are set out below and are stated at the lower of carrying amount and fair value less cost to sell which resulted in an impairment charge of £2.1m in 2017 based on the sale proceeds. The total consideration payable by Auvert to the Company in respect of the Disposal is, in aggregate, US$500,000 payable in cash, of which US$450,000 had already been paid and the balance of US$50,000 was held in escrow with the Company's solicitors to be released subject to delivery of satisfactory receipt by Auvert of certain post-completion deliverables. | |||||
|
|
|
| 31 December 2017 |
| ||
|
|
|
| £'000 |
| ||
|
| Assets of disposal groups classified as held for sale |
|
|
| ||
|
| Plant and equipment |
| 158 |
| ||
|
| Intangible assets |
| 162 |
| ||
|
| Trade and other receivables |
| 127 |
| ||
|
| Cash and cash equivalents |
| 20 |
| ||
|
|
|
|
|
| ||
|
| Total assets |
| 467 |
| ||
|
|
|
|
|
| ||
|
| Liabilities of disposal groups classified as held for sale |
|
|
| ||
|
| Trade and other payables |
| 95 |
| ||
|
|
|
|
|
| ||
|
| Total liabilities |
| 95 |
| ||
|
| Analysis of the results of discontinued operations and the results recognised on the measurement of assets of disposal groups is as follows: |
| |||
|
|
| Unaudited | Unaudited | Audited | |
|
|
| Six months ended 30 June 2018 | Six months ended 30 June 2017 | Year ended 31 December 2017 | |
|
| Due to results of disposal group being separately disclosed, comparative information has been restated to ensure comparability. | £'000 | £'000 | £'000 | |
|
|
|
|
|
| |
|
| Revenue | - | - | 88 | |
|
| Cost of sales | (130) | - | (831) | |
|
| Operating expenses | (285) | (489) | (769) | |
|
| Other income | - | 3 | 19 | |
|
| Loss before tax of discontinued operations | (415) | (486) | (1,493) | |
|
| Tax (charge)/credit | - | - | - | |
|
| Loss after tax of discontinued operations | (415) | (486) | (1,493) | |
|
| Foreign currency translation reserve reclassification | 338 | - | - | |
|
| Impairment loss on disposal group | (239) | - | (2,094) | |
|
| Loss for the year from discontinued operations | (316) | (486) | (3,587) | |
|
|
|
|
|
| |
|
| Cash flow information |
|
|
| |
|
| Operating cash flows | (393) | (720) | (1,314) | |
|
| Investing cash flows | (142) | (549) | (465) | |
|
| Financing cash flows | 563 | 1,359 | 1,771 | |
|
| Total cash flows | 28 | 90 | (8) | |
| 9. | Share capital | ||||
|
|
| Unaudited | Unaudited | Audited |
|
|
|
| 30 June 2018 | 30 June 2017 | 31 December 2017 |
|
|
|
| £'000 | £'000 | £'000 |
|
|
| Number |
|
|
|
|
|
| Authorised |
|
|
|
|
|
| 5,000,000,000 ordinary shares of 0.2p each | 10,000 | 10,000 | 10,000 |
|
|
|
|
|
|
|
|
|
| Allotted, called up and fully paid |
|
|
|
|
|
| As at beginning of the period | 1,225 | 410 | 410 |
|
|
| Share subscription | 773 | 200 | 765 |
|
|
| Acquisition of subsidiary | - | 50 | 50 |
|
|
|
As at end of period | 1,998 | 660 | 1,225 |
|
|
|
|
|
|
|
|
|
|
| Number of shares 30 June 2018 | Number of shares 30 June 2017 | Number of shares 31 Dec 2017 |
|
|
| Ordinary share capital is summarised below: |
|
|
|
|
|
| As at beginning of the period | 612,273,038 | 204,953,507 | 204,953,507 |
|
|
| Share subscription | 355,555,555 | 100,000,000 | 369,959,889 |
|
|
| Shares issued to directors, management and Verona | 30,944,4451 | - | 12,359,6422 |
|
|
| Acquisition of subsidiary | - | 25,000,000 | 25,000,000 |
|
|
|
As at end of period | 998,773,038 | 329,953,507 | 612,273,038 |
|
|
|
|
|
|
|
|
|
| 1 Certain of the Company's directors agreed to convert outstanding fees of £31,233, due in respect of the period from 1 July 2017 to 31 December 2017, into 6,940,667 new Ordinary Shares (the "Director Shares") and the Company's management agreed to convert outstanding fees and salaries of £22,217, due in respect of the same period, into 4,937,111 new Ordinary Shares (the "Management Shares"). In addition, £30,000 of fees due to Dr. Bernard Olivier, the Company's former CEO who resigned as a director on 15 January 2018, were converted into 6,666,667 new Ordinary Shares (the "Fee Conversion Shares"). The Director Shares, Management Shares and Fee Conversion Shares were issued at a price of 0.45 pence per share (the "Conversion Price") which represents a premium of approximately 7.14 per cent. to the Company's closing mid-market share price of 0.42 pence on 21 March 2018.
In addition, £55,800 in respect of certain fees and expenses owed by the Company to Verona Investment Group Inc. ("Verona") was settled by the issue of 12,400,000 new Ordinary Shares at the Conversion Price (the "Verona Shares"). Furthermore, the obligation to issue a further 15,000,000 new Ordinary Shares to Verona as deferred consideration for the acquisition of Kellstown Investments Corp. on achievement of certain operational milestones at the Choco Project, as announced on 31 May 2017, has now been terminated.
2 In satisfaction of certain accrued directors' fees, salaries and certain fees outstanding to senior management and consultants which had been unpaid for the period from 1 October 2016 to 31 July 2017, Bezant issued 12,359,642 new ordinary shares of 0.2 pence each in the Company on 14 August 2017. The conversion was made at the volume weighted average price ("VWAP") of the Company's shares over the period the fees were outstanding. The VWAP over the period of approximately 1.2976 pence per share represented a premium of approximately 1.7 per cent. to the closing mid-market share price of 1.32 pence on 4 August 2017. In total, unpaid fees of, in aggregate, £160,379 were converted into new ordinary shares. |
| |||
|
|
| Unaudited | Unaudited | Audited |
|
|
| 30 June 2018 | 30 June 2017 | 31 December 2017 |
|
|
| £'000 | £'000 | £'000 |
|
| The share premium was as follows: |
|
|
|
|
| As at beginning of period | 35,433 | 33,227 | 33,227 |
|
| Share subscription | 757 | 800 | 2,229 |
|
| Share issue costs | (98) | (106) | (244) |
|
| Transfer to share option reserve - warrants issued | (16) | - | - |
|
| Acquisition of subsidiary | - | 221 | 221 |
|
|
As at end of period | 36,076 | 34,142 | 35,433 |
|
|
|
|
|
|
|
| Each fully paid ordinary share carries the right to one vote at a meeting of the Company. Holders of shares also have the right to receive dividends and to participate in the proceeds from sale of all surplus assets in proportion to the total shares issued in the event of the Company winding up. | |||
| 10.1 | Reconciliation of operating loss to net cash outflow from operating activities |
|
|
|
|
|
| Unaudited | Unaudited | Audited |
|
|
| Six months ended 30 June 2018 | Six months ended 30 June 2017 | Year ended 31 December 2017 |
|
|
| £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
| Operating loss from all operations | (708) | (1,009) | (2,480) |
|
|
|
|
|
|
|
| Depreciation and amortisation | - | 3 | 14 |
|
| VAT refunds received | - | (26) | (33) |
|
| Foreign exchange (gain)/loss | (143) | 100 | 167 |
|
| Share option expense | - | 8 | 18 |
|
| Decrease/(increase) in receivables | 97 | (40) | (145) |
|
| (Decrease)/increase in payables | (70) | 388 | 391 |
|
|
Net cash outflow from operating activities | (824) | (576) | (2,068) |
| 10.2 | Proceeds from disposal of group, net of cash disposed |
|
|
| |
|
|
| Unaudited | Unaudited | Audited | |
|
|
| Six months ended 30 June 2018 | Six months ended 30 June 2017 | Year ended 31 December 2017 | |
|
|
| £'000 | £'000 | £'000 | |
|
|
|
|
|
| |
|
| Plant and equipment | 300 | - | - | |
|
| Intangible assets | 162 | - | - | |
|
| Trade and other receivables | 103 | - | - | |
|
| Cash and cash equivalents | 48 | - | - | |
|
| Trade and other payables | (92) | - | - | |
|
|
| 521 | - | - | |
|
| Non-controlling interest | (4) | - | - | |
|
| Foreign currency translation reserve | (338) | - | - | |
|
| Loss on sale of group | 186 | - | - | |
|
| Proceeds from sale | 365 | - | - | |
|
| Other disposal costs | (83) | - | - | |
|
| Net cash of group sold | (48) | - | - | |
|
|
Net cash proceeds | 234 | - | - | |
| 11. | Subsequent events |
| |||
|
| As announced on 23 August 2018, the Company granted, in aggregate, 87,500,000 options over ordinary shares of £0.002 each in the capital of the Company ("Ordinary Shares") pursuant to the Executive Share Option Scheme approved at the Company's Annual General Meeting held on 22 June 2018 (the "Options"). Of the 87,500,000 Options, 75,000,000 were awarded to directors of the Company. |
| |||
| 12. | Availability of Interim Report |
|
| A copy of these interim results will be available from the Company's registered office during normal business hours on any weekday at Floor 6, Quadrant House, 4 Thomas More Square, London E1W 1YW and can also be downloaded from the Company's website at www.bezantresources.com. Bezant Resources Plc is registered in England and Wales with company number 02918391. |
INDEPENDENT REVIEW REPORT BY THE AUDITORS
TO BEZANT RESOURCES PLC
Introduction
We have been engaged by the Company to review the condensed financial information in the interim results for the six months ended 30 June 2018 which comprises the Group Statement of Profit and Loss, the Group Statement of Other Comprehensive Income, the Group Statement of Changes in Equity, the Group Balance Sheet, the Group Cash Flow Statement and the related notes. We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' Responsibilities
The interim results are the responsibility of, and have been approved by, the directors. The directors are responsible for preparing the interim results in accordance with the AIM Rules for Companies.
As disclosed in note 1, the annual financial statements of the Group will be prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in the interim results has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim results based on our review.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Emphasis of matters in respect of Going concern
We have considered the adequacy of the going concern disclosures made in note 1 to the unaudited interim financial information concerning the Group's ability to continue as a going concern. The Group incurred an operating loss of £799,000 during the period ended 30 June 2018 and is still incurring losses. As discussed in note 1.1, the Group has raised £1.4m before expenses during the period but will need to raise further funds in order to meet its budgeted operating costs. These conditions, along with the other matters discussed in note 1.1 indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The interim results do not include the adjustments (such as impairment of assets) that would result if the Group were unable to continue as a going concern.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed financial statements in the interim results for the six months ended 30 June 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.
UHY Hacker Young LLP
Chartered Accountants
Registered Auditors
London
28 September 2018