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KRYSO RESOURCES PLC Final Results for the year ended 31 December 2009 And Notice of Annual General Meeting
Kryso Resources plc ("Kryso" or "the Company") is pleased to announce its final results for the year ended 31 December 2009. The results below are extracted from the Company's audited Annual Report and Financial Statements. Copies of the Annual Report together with a Notice of Annual General Meeting are being posted to shareholders today and will be available on the Company's website at www.kryso.com and from the Company's registered offices at Unit 3H, Cooper House, 2 Michael Road, London SW6 2AD.
For further information please contact:
Dr. Trevor Davenport/Craig Brown, Kryso Resources plc
Tel: +44 (0) 20 7371 0600
Katy Mitchell, WH Ireland Limited
Tel: +44 (0) 161 832 2174
Christian Dennis, Orbis Equity Partners Limited
Tel: +44 (0) 20 3137 1902
CHAIRMAN'S STATEMENT
Since my half-yearly report to shareholders on 30 September 2009, I am very pleased to say that Kryso has made strong progress in advancing its 100% owned Pakrut gold project in Tajikistan.
Perhaps the most visible progress has been the achievement of a marked increase in the JORC resources of Pakrut. In November 2009, GeoLogix Mineral Resource Consultants (Pty) Ltd completed an updated JORC Code compliant resource estimate for the project, increasing its total JORC resources by approximately 43% to 2,830,104oz Au (on the basis of a cut-off grade of 0.5 g/t Au). Of this resource, 1,333,539oz Au is in the Measured and Indicated categories.
In April 2010, Kryso announced highly encouraging assay results from drilling at Pakrut that took place in the second half of 2009. These results included intersections of 25.5m at 7.5 g/t, 42.4m at 5.4 g/t and 12.0m at 6.4 g/t Au in Ore Zone 1, which remains open at depth, and intersections of 9.0m at 7.5 g/t and 13.5m at 7.5 g/t Au (with 4.5m at 20.1 g/t) in Ore Zone 3. Intersections at potentially economic grades were also reported in Ore Zone 6a. Kryso's 2010 drilling programme at Pakrut commenced in May.
The bankable feasibility study (BFS) for the Pakrut project is underway, and will include a revised resource based on an updated wire-frame model of the deposit. This updated resource will include all drilling results from Pakrut, including those announced in April.
A decision was taken in late 2009 to reorient the Pakrut BFS around an underground mining approach. This is expected to improve the economics of the project, and will enable access to higher grade ore during the early stages of the proposed mining operation. It has however contributed to a delay in the completion of the BFS. Another factor was the later than expected availability of the Pakrut resource update announced in November 2009. These delays are regrettable, but the extra time taken to complete the study is a price worth paying to achieve the most favourable end result.
Activities at Kryso's Hukas nickel-copper-cobalt-PGM project remain on hold while strategic alternatives for the project, which may include a sale or joint venture, are evaluated.
We are delighted to have welcomed Steven Poulton as a Non-Executive Director in December 2009. Steven represents one of Kryso's major shareholders, ALTUS Resource Capital Limited, and with his wide ranging experience has a valuable contribution to make to the Company's development. Gennady Tolmachev has resigned as a Non-Executive Director now that Vertex Mining International (Cyprus) Ltd no longer holds a notifiable interest in the Company's shares. I remain acting Managing Director pending the conclusion of our search for a suitable permanent Managing Director. Candidates are being evaluated on a continuing basis, and we are confident that the right individual for the role will present themselves soon.
In October 2009, Kryso strengthened its financial position through a placing of shares to raise £500,000 before costs.
In comparison with the year to 31 December 2008, during the year to 31 December 2009 the amount spent by the Company on development work and capitalised decreased by US$2,012,000 to US$1,759,000; administration expenditure including exceptional legal expenses increased by US$204,000 to US$1,184,000. Kryso's overall loss increased from US$1,043,000 to US$1,259,000, owing primarily to US$190,802 in legal fees incurred as a result of the Vertex Mining deal, which was not concluded. Total cash equity funding raised during the period was US$3,940,871 after expenses.
It is heartening to see that the price of gold has recently hit record nominal highs, and we look forward to another year of great progress for Kryso.
Trevor DavenportNon-Executive Chairman6 June 2010KRYSO RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - Year ended 31 December 2009
2009 2008 US$000 US$000 Turnover - - Cost of sales - - Gross Profit - - Administrative expenses (993) (980) Exceptional expenses (191) - Loss on foreign exchange (78) (105) Operating Loss (1,262) (1,085) Interest receivable 3 42 Loss on Ordinary Activities before Taxation (1,259) (1,043) Tax on loss on ordinary activities - - Loss on Ordinary Activities after Taxation (1,259) (1,043)attributable to equity holders of the Company Total comprehensive income attributable (1,259) (1,043)to equity holders of the Company
Basic and Diluted Loss per Share attributable $(0.0108) $(0.0125) to equity holders of the Company (expressed in
dollars per share)
All of the activities of the Group are classed as continuing.
The Company has taken advantage of section 408 of the Companies Act 2006 not to publish its own Statement of Comprehensive Income.
The Group has no recognised gains or losses other than the results for the years as set out above.
KRYSO RESOURCES PLC
CONSOLIDATED BALANCE SHEET - As at 31 December 2009
2009 2008 US$000 US$000 Fixed Assets Intangible assets 15,652 13,893 Tangible assets 63 170 15,715 14,063 Current Assets Inventories 518 452 Debtors 108 78 Cash and cash equivalents 1,826 453 2,452 983 Current Liabilities Trade and other payables (383) (820) Borrowings (724) (383) (1,544) Net Current Assets/(Liabilities) 2,069 (561) Total Assets less Current Liabilities 17,784 13,502 Equity Called-up share capital 2,725 1,680 Share premium account 17,778 14,529 Retained earnings (2,719) (2,707) Total Equity 17,784 13,502KRYSO RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - Year ended 31 December 2009
Share Share Retained Total capital premium earnings US$'000 US$'000 US$'000 US$'000 Balance at 1 January 1,481 13,033 (1,676) 12,8382008 Comprehensive income - - (1,043) (1,043)for the year Share based payments - - 12 12 Issue of ordinary 199 1,585 - 1,784shares Costs of share issues - (89) - (89) Balance at 31 December 1,680 14,529 (2,707) 13,5022008 Comprehensive income - - (1,259) (1,259)for the year Share based payments - - 1,247 1,247 Issue of ordinary 1,045 4,722 - 5,767shares Costs of share issues - (1,473) - (1,473) Balance at 31 December 2,725 17,778 (2,719) 17,7842009
The cost of share issues in the year ended 31 December 2009 for the Group and Company includes a charge of US$1,212,228 relating to the fair value of the placing warrants.
KRYSO RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT - Year ended 31 December 2009
2009 2008 US$000 US$000 Net Cash Outflow from Operating Activities (1,634) (100) Cash flows from Investing Activities Payments to acquire intangible fixed assets (1,660) (3,486) Payments to acquire tangible fixed assets (3) (8) Interest received 3 42 Net Cash Outflow from Investing Activities (1,660) (3,452) Cash flows from Financing Activities Issue of equity share capital (net of issue 3,940 1,695costs) Proceeds from borrowings 727 724 Net Cash generated from Financing Activities 4,667 2,419 Net Increase/(Decrease) in Cash and cash 1,373 (1,133)equivalents Cash and cash equivalents at beginning of the 453 1,586year Cash and cash equivalents at end of the year 1,826 453
KRYSO RESOURCES PLC
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT - Year ended 31 December 2009
Reconciliation of Operating Loss to Net Cash Outflow from Operating Activities
2009 2008 US$000 US$000 Operating loss (1,262) (1,085) Depreciation 11 15 Share based payments 35 12 (Increase)/Decrease in stocks (66) 169 (Increase)/Decrease in debtors (30) 249 (Decrease)/Increase in creditors (437) 540 Non-cash interest on convertible loan 53 - Foreign exchange on convertible loan 62 - Net Cash Outflow from Operating Activities (1,634) (100)
Major non-cash transactions
The Group and Company had the following major non-cash transactions during the year:
As disclosed in note 17 to the Financial Statements, the convertible loan plus accrued interest from Great Basin Gold amounting to US$839,052 was converted into 10,723,389 ordinary shares at a strike price of 5p per share. In addition, a mandatorily convertible bond of US$727,250 was received during 2009 from Vertex Mining International (Cyprus) Limited. This was subsequently converted into 9,090,909 ordinary shares at a strike price of 5.5p per share.
As disclosed in note 20 to the Financial Statements, placing warrants were granted to investors during the year with a fair value of US$1,212,228 which has been fully charged against the share premium account.
KRYSO RESOURCES PLCACCOUNTING POLICIESBasis of Accounting
These Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, IFRIC interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Financial Statements have been prepared under the historical cost convention.
The preparation of Financial Statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The functional currency of the Company and Group is US dollars and accordingly the amounts in the Financial Statements are denominated in that currency. The Balance Sheet rates of exchange for the US dollar to UK Sterling were $1.59257 to £1 (2008: $1.4479 to £1).
Basis of Consolidation
The consolidated Financial Statements incorporate the Financial Statements of the Company and all Group undertakings. These are adjusted, where appropriate, to conform to Group accounting policies. Subsidiaries are all entities over which the Group has power to govern the financial and operating policies accompanying a shareholding of more than one half of the voting rights. All significant intercompany transactions and balances between group undertakings are eliminated on consolidation.
Going Concern
United Kingdom company law requires the Company's Directors to consider whether it is appropriate to prepare the Financial Statements on the basis that the Company and Group is a going concern. In considering this matter the Directors have reviewed the Group's budget for 2010 and its plan for 2011. This included consideration of the cash flow implications of the budget and plan. The cash flow forecasts prepared by the Directors for the twelve months from the date of signing these Financial Statements indicate that the Company and Group will need to raise new finance in order to fund its operating costs. There can be no guarantee that the Company will be successful in its efforts to arrange additional financing on terms satisfactory to the Company.
The Company has received an undertaking from Altus Resource Capital Limited ("Altus"), a shareholder in the Company, to act as a financier of last resort for a period of twelve months from the date of approval of these Financial Statements in order to ensure that the Group and Company have sufficient working capital to remain as a going concern. The commitment from Altus is subject to a maximum of £500,000 and to the Company acting reasonably in its attempts to raise finance through the issue of new equity from other investors or shareholders. Steven James Poulton is a director of the Company and of Altus Asset Management Limited, the investment manager of Altus.
The completion of the bankable feasibility study will enable the Group to enter into discussions to secure funding to progress the Pakrut gold project into an underground mining operation. It is likely that these discussions will not be completed for some time and there is no guarantee that the Group will be able to secure sufficient levels of funding on acceptable terms.
The Directors have concluded that these circumstances represent a material uncertainty that may cast doubt upon the Company's ability to continue as a going concern and therefore may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after considering the uncertainties above, the Directors have a reasonable expectation that sufficient new funds will be raised to continue in operational existence for the foreseeable future. For this reason, and given the undertaking from Altus, the Directors continue to adopt the going concern basis of preparation for these Financial Statements.
KRYSO RESOURCES PLC NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting (the "Meeting") of Kryso Resources plc (the "Company") will be held at the offices of Speechly Bircham LLP, 6 New Street Square, London EC4A 3LX at 11 a.m. on 30 June 2010 for the following purposes:
ORDINARY RESOLUTIONS Ordinary Business
To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions:
1. To receive and consider the statement of accounts for the period ended 31 December 2009 together with the reports of the directors and the auditors thereon.
2. To elect Steven Poulton, who stands for election in accordance with the Company's Articles of Association, as a director.
3. To re-elect Craig Brown, who retires by rotation in accordance with the Company's Articles of Association, as a director.
4. To re-elect Abuali Ismatov, who retires by rotation in accordance with the Company's Articles of Association, as a director.
5. To re-appoint Littlejohn LLP as auditors to act as such until the conclusion of the next General Meeting of the Company at which accounts are laid before the Company and to authorise the directors of the Company to fix their remuneration.
Special Business
To consider and, if thought fit, to pass the following resolutions of which resolutions 6 and 8 will be proposed as ordinary resolutions and resolution 7 as a special resolution:
6. That the directors be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 ("the Act") to exercise all powers of the Company to allot shares in the Company and to grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal amount of £3,000,000, provided that the authority hereby conferred shall:
(a) operate in substitution for and to the exclusion of any previous authority given to the directors pursuant to section 80 of the Companies Act 1985 or section 551 of the Act; and
(b) expire on whichever is earlier of the conclusion of the next Annual General Meeting of the Company or the date falling 15 months from the date of the passing of this resolution unless such authority is renewed, varied, or revoked by the Company in general meeting, save that the Company may at any time before such expiry make an offer or agreement which might require shares in the Company to be allotted, or rights to subscribe for or to convert any security into shares in the Company to be granted, after such expiry and the directors may allot shares in the Company or grant rights to subscribe for, or convert any security into, shares in the Company in pursuance of such offer or agreement as if the authority hereby conferred had not expired.
7. That, subject to the passing of Resolution 6, the directors be and they are hereby empowered pursuant to sections 570 and 573 of the Act to allot equity securities (as defined in section 560 of the Act) for cash as if section 561(1) of the Act did not apply to any such allotment pursuant to the general authority conferred on them by Resolution 6 above (as varied from time to time by the Company in general meeting) and/or by way of a sale of treasury shares PROVIDED THAT such power shall be limited to:
(a) the allotment of equity securities in connection with a rights issue or any other pre-emptive offer in favour of holders of equity securities where the equity securities respectively attributable to the interest of all such holders are proportionate (as nearly as may be) to the respective amounts of equity securities held by them subject only to such exclusions or other arrangements as the directors may consider appropriate to deal with treasury shares, fractional entitlements or legal or practical difficulties under the laws of or the requirements of any recognised regulatory body in any territory or otherwise;
(b) in connection with the issue of any shares pursuant to the exercise of any options granted under the Company's unapproved employee share scheme, adopted by the board of the Company on 24 November 2004 (as amended from time to time) (the "Share Option Scheme"); and
(c) the allotment (otherwise than pursuant to sub paragraphs (a) and (b) above) of equity securities up to an aggregate nominal amount of £2,500,000, and the power hereby conferred shall operate in substitution for and to the exclusion of any previous power given to the directors pursuant to section 95 of the Companies Act 1985 or sections 570 or 573 of the Act and shall expire on whichever is the earlier of the conclusion of the next Annual General Meeting of the Company or the date falling 15 months from the date of the passing of this resolution unless such power is renewed or extended prior to or at such meeting, except that the Company may before the expiry of any power contained in this resolution make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
8. That the following amendment to the Share Option Scheme be and is approved:
The maximum percentage of the issued share capital of the Company from time to time over which options may be granted to any one person under the Share Option Scheme be increased from 2 per cent. to 5 per cent.
If approved, the above amendment will be implemented by the Board under the terms of the Share Option Scheme.
By order of the BoardCraig BrownSecretaryDated 6 June 2010Registered Office:Unit 3H, Cooper House2 Michael RoadLondon SW6 2AD NOTES TO THE NOTICE OF GENERAL MEETING
Entitlement to attend and vote
1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the Company's register of members at:
* 6.00 p.m. on 28 June 2010; or * if this Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting,
shall be entitled to attend and vote at the Meeting.
Appointment of proxies
2. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form.
3. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy your proxy card or contact Neville Registrars Limited to obtain an extra proxy card on 0121 585 1131, or from outside the UK on +44 (0)121 585 1131. Lines are open 9 am to 5 pm Monday to Friday, excluding UK bank holidays.
5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting.
Appointment of proxy using hard copy proxy form
6. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
* completed and signed; * sent or delivered to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA; and * received by Neville Registrars Limited no later than 11 a.m. on 28 June 2010.
In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.
Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form.
Appointment of proxies through CREST
7. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual (available from https://www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited's (EUI) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID: 7RA11) by 11 a.m. on 28 June 2010. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
Appoint for proxy by joint members
8. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-name being the most senior).
Changing proxy instructions
9. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Neville Registrars Limited on on 0121 585 1131, or from outside the UK on +44 (0)121 585 1131. Lines are open 9 am to 5 pm Monday to Friday, excluding UK bank holidays.
If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
Termination of proxy appointments
10. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. The revocation notice must be received by Neville Registrars Limited no later than 11 a.m. on 28 June 2010.
If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.
Corporate representatives
11. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share.
Issued shares and total voting rights
12. As at 6.00 p.m. on 4 June 2010, the Company's issued share capital comprised 160,785,697 ordinary shares of £0.01 each. Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 6 p.m. on 4 June 2010 is 160,785,697.
Communication
13. You may not use any electronic address provided either in this notice of meeting; or any related documents (including the letter with which this notice of meeting was enclosed and proxy form) to communicate with the Company for any purposes other than those expressly stated.
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