China Nonferr Regulatory News (CNG)

19 Sep 2012 07:00

Kryso Resources plc

('Kryso' or the 'Company')

Interim Results for the Six-Month Period Ended 30 June 2012

Kryso Resources PLC (AIM:KYS), the mineral exploration and development company developing the Pakrut Gold Project in Tajiksitan, is pleased to announce its Interim Results for the six months ended 30 June 2012.

Operational Highlights

Issue of mining licence valid to 2030 JORC resource upgrade to over 5 million ounces of gold

Financial Highlights

Development work costs up 266% to US$5,207,000 (1H2011: US$1,424,000) due to: Construction of mine infrastructure Consultants engaged to finalise detailed engineering and design and secure mining licence Employment of additional expatriate engineers Depreciation on recently acquired construction equipment US$93.5million project finance loan facility secured, with first drawdown on facility expected to take place in near future Loss up 100% to US$892,000 (1H2011: US$447,000) primarily due to reduced profit on foreign exchange Administration expenses up 4% to US$970,000 (1H2011: US$937,000)

Post period End

Award of the underground mine construction contract: Works commenced and completion scheduled for March 2014, with production to commence immediately thereafter Revised feasibility study due to be published in the near future with updated capital and operating expenditure requirements

Craig Brown, Managing Director, commented: "It has been an eventful six months for our Company as we now take the 5Moz Au Pakrut Gold Project into full-scale construction. Facilitating construction has been the award of the mining licence and finalisation of the US$93.5million project finance loan facility with major shareholder China Nonferrous Metals Int'l Mining Ltd."

For further information please visit the Company's website (www.kryso.com) or contact:

Craig Brown, Kryso Resources plc

Tel: +44 (0) 20 7349 9160

Jeremy Ellis/Chris Sim/Neil Elliot, Investec Bank Plc

Tel: +44 (0) 20 7597 5970

Jon Belliss, XCAP Securities Plc

Tel: +44 (0) 20 7101 7070

Paul Cornelius, Walbrook PR

Tel: +44 (0) 20 7933 8780

About the Pakrut Gold Project

The Pakrut Gold Project, of which Kryso has 100% ownership, is situated in Tajikistan approximately 112km northeast of the capital city Dushanbe. The Pakrut Gold Project has estimated total JORC compliant resources of 5,020,000 oz Au (assuming a cut-off grade of 0.5 g/t Au) and is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and western China, and hosts a number of multi-million ounce gold deposits.

Construction of the underground mine at the Pakrut Gold Project has commenced. Exploration work continues at Pakrut and other near targets at Eastern Pakrut and Rufigar where the Company expects to be able to further increase the JORC resource.

About Tajikistan

Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States (CIS) and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminium smelter in Central Asia. Kryso's management team has extensive experience in the mining industry in Tajikistan.

KRYSO RESOURCES PLC

Chairman's Statement

Operational Highlights

During the half year to June 2012, our Company has achieved a number of significant milestones in the development of the Pakrut Gold Project (the "Project"). These include the issue of the mining licence which is valid to 2030, JORC resource upgrade to over 5 million ounces of gold and post period end, the award of the underground mine construction contract.

Works have now commenced and completion is scheduled for March 2014, with production to commence immediately thereafter. This is therefore an incredibly exciting time as Kryso transitions from an exploration and development company into a gold producer.

Drilling Programme

We currently have five diamond drill rigs operating at the sites. We expect to release independently verified assay results in the near future.

Mine Construction

Following a competitive tender process, the Company recently awarded the contract for the construction of the underground mine to China No. 15 Metallurgical Construction Group Co., Ltd ("15th MCC"). The works to be undertaken by 15th MCC will comprise construction of the main ramp, mining area ramp, east air shaft, west air shaft, level and sublevel development works, chambers, ore pass, exploration works, mining and cutting works, installation of equipment for the mine, construction of a flood discharge tunnel for the tailings dam and ancillary works. The awarding of the other main construction contracts relating to power lines, processing facilities and the tailings dam will be announced by the Company shortly.

The Beijing General Research Institute of Mining & Metallurgy ("BGRIMM") is currently completing the final version of the Bankable Feasibility Study ("BFS") for the Project. The results of the BFS will be released by the Company in the near future providing for increasing production capacity compared with the previous BFS and will update both the capital and operating expenditure requirements for the Pakrut Gold Project. Kryso envisage an initial processing capacity of 660,000 tons of ore per annum, increasing to 1,320,000 tons per annum from 2017.

Financial Highlights

Development work costs increased 266% to US$5,207,000 (1H2011: US$1,424,000) due to additional expatriate engineers being employed, depreciation on recently acquired equipment and consultants engaged to finalise the detailed engineering and design and securing the mining licence. These costs have been fully capitalised.

Administration expenses increased 4% to US$970,000 (1H2011: US$937,000).

The Company secured a US$93.5million project finance loan facility during the period, with the first drawdown on the facility expected to take place in the near future. The loss increased 100% to US$892,000 (1H2011: US$447,000) due to reduced profit on foreign exchange.

Outlook

The next 18 months will see the Company undertake full-scale construction at the Pakrut Gold Project, ultimately leading to gold production, which is expected to commence in Q1 2014. Our Company has evolved considerably since its listing on the AIM market of the London Stock Exchange in 2004 and I am excited by the prospect of completing the transition to gold producer.

I would like to take this opportunity to thank all of our employees, management and advisors for their efforts during 2012 and also thank our shareholders for their continued support of our Company. I very much look forward to updating our shareholders on the Company's further progress as we undertake full-scale construction in the second half of the year.

Tao Luo

Non-Executive Chairman

18 September 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2012

								Audited
				Unaudited Six months to30 June 2012		Unaudited Six months to30 June 2011		Year ended 31 December 2011
		Note		US$'000		US$'000		US$'000
Group Revenue				-		-		-
Cost of sales				-		-		-
Gross Profit				-		-		-
Administrative expenses				(970)		(937)		(1,583)
Profit on foreign exchange				68		460		137
Operating Loss				(902)		(477)		(1,446)
Finance income				10		30		54
Loss on Ordinary Activities before Taxation		2		(892)		(447)		(1,392)
Tax on loss on ordinary activities				-		-		-
Loss on Ordinary Activities after Taxation
attributable to equity holders of the Company				(892)		(447)		(1,392)
Total Comprehensive Income attributable to equity
holders of the Company				(892)		(447)		(1,392)
Loss per Share (expressed in US dollars per share)
attributable to equity holders of the Company
- basic and diluted		3		(0.0031)		(0.0018)		(0.0053)

All of the activities of the Group are classed as continuing.

CONSOLIDATED BALANCE SHEET

AS AT 30 JUNE 2012

												Audited
				Unaudited Six months to 30 June 2012 US$'000				Unaudited Six months to 30 June 2011 US$'000				Year ended 31 December2011 US$'000
Non-current Assets
Intangible assets				28,275				19,716				23,068
Tangible assets				2,737				125				1,335
				31,012				19,841				24,403
Current Assets
Inventories				1,846				1,577				1,703
Debtors				504				1,335				1,216
Cash and cash equivalents				7,339				13,285				11,050
				9,689				16,197				13,969
Current Liabilities
Trade and other payables				(542)				(322)				(109)
				(542)				(322)				(109)
Net Current Assets				9,147				15,875				13,860
Total Assets less Current Liabilities				40,159				35,716				38,263
Equity and Reserves attributable to Equity
Holders of the Company
Called-up equity share capital				4,773				4,296				4,640
Share premium account				40,650				34,933				37,995
Retained earnings				(5,264)				(3,513)				(4,372)
Total Equity				40,159				35,716				38,263

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2012

												Audited
				Unaudited Six months to30 June 2012				Unaudited Six months to30 June 2011				Year ended 31 December2011
				US$'000				US$'000				US$'000
Net Cash Inflow/(Outflow) from Operating Activities				111				(2,500)				(3,595)
Cash flows from Investing Activities
Interest received				10				30				54
Payments to acquire intangible fixed assets				(4,782)				(1,412)				(4,557)
Payments to acquire tangible fixed assets				(1,838)				(56)				(1,480)
Net cash outflow from Investing Activities				(6,610)				(1,438)				(5,983)
Cash flows from Financing Activities
Issue of equity share capital (net of issue costs)				2,788				632				4,037
Net cash inflow from Financing Activities				2,788				632				4,037
Net (Decrease)/Increase in Cash and Cash Equivalents				(3,711)				(3,306)				(5,541)
Cash and cash equivalents at beginning of period				11,050				16,591				16,591
Cash and cash equivalents at end of period				7,339				13,285				11,050
Reconciliation of Operating Loss to Net Cash
Outflow from Operating Activities
Operating loss				(902)				(477)				(1,446)
Depreciation				11				3				11
Share based payments				0				0				86
Increase in inventories				(143)				(855)				(981)
Decrease/(increase) in debtors				712				(1,254)				(1,135)
Increase/(decrease) in creditors				433				83				(130)
Net Cash Inflow/(Outflow) from Operating Activities				111				(2,500)				(3,595)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2012

				Capital				Share				Retained				Total
								premium				earnings				equity
				US$'000				US$'000				US$'000				US$'000
Balance at 1 January 2011				4,216				34,381				(3,066)				35,531
Total comprehensive income				-				-				(447)				(447)
New shares issued				80				552				-				632
Balance at 30 June 2011				4,296				34,933				(3,513)				35,716
Total comprehensive income				-				-				(945)				(945)
Share based payment				-				-				86				86
New shares issued				344				3,062				-				3,406
Cost of shares issued				-				(1,996)				-				(1,996)
Balance at 31 December 2011				4,640				37,995				(4,372)				38,263
Total comprehensive income				-				-				(892)				(892)
New shares issued				133				2,655				-				2,788
Balance at 30 June 2012				4,773				40,650				(5,264)				40,159

1. Accounting Policies

Basis of Accounting

These unaudited interim financial statements were approved for issue by the Kryso Resources plc Board of Directors on 18 September 2012.

This financial information has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRIC Interpretations. The financial information has been prepared under the historical cost convention. The annual financial statements are prepared in accordance with IFRS as adopted by the European Union. The same accounting policies are followed in the interim financial information as applied in the Group's latest annual audited financial statements.

As permitted, the Group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing this interim financial information.

The Group has applied consistent accounting policies in preparing the consolidated interim financial statements for the six months ended 30 June 2012, the comparative information for the six months ended 30 June 2011, and the financial statements for the year ended 31 December 2011.

New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 January 2012 but not currently relevant to the Group

The following standards and amendments to existing standards have been published and are mandatory for the Group's accounting periods beginning on or after 1 January 2012 or later periods, but not currently relevant to the Group:

Amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards" replace references to a fixed date of 1 January 2004 with "the date of transition to IFRSs", thus eliminating the need for companies adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs, and provide guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation. Amendments to IFRS 7 "Financial Instruments: Disclosures" are designed to help users of financial statements evaluate the risk exposures relating to transfers of financial assets and the effect of those risks on an entity's financial position.

New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2012 and not early adopted

The Directors are assessing the possible impact of these standards on the Group's Financial Statements:

IFRS 9 "Financial Instruments" specifies how an entity should classify and measure financial assets, including some hybrid contracts, with the aim of improving and simplifying the approach to classification and measurement compared with IAS 39. This standard is effective for periods beginning on or after 1 January 2015, subject to EU endorsement. Amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards" require that first-time adopters apply the requirements in IFRS 9 "Financial Instruments" and IAS 20 "Accounting for Government Grants and Disclosure of Government Assistance" prospectively to government loans existing at the date of transition to IFRSs. Entities may choose to apply the requirements retrospectively if the information needed to do so had been obtained at the time of initially accounting for the loan. The amendments are effective for periods beginning on or after 1 January 2013, subject to EU endorsement. Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" require entities to apply IFRS 9 for annual periods beginning on or after 1 January 2015 instead of on or after 1 January 2013, subject to EU endorsement. Early application continues to be permitted. The amendments also require additional disclosures on transition from IAS 39 "Financial Instruments: Recognition and Measurement" to IFRS 9. Amendments to IFRS 10 "Consolidated Financial Statements", IFRS 11 "Joint Arrangements" and IFRS 12 "Disclosure of Interests in Other Entities" clarify the IASB's intention when first issuing the transition guidance in IFRS 10, provide similar relief in IFRS 11 and IFRS 12 from the presentation or adjustment of comparative information for periods prior to the immediately preceding period, and provide additional transition relief by eliminating the requirement to present comparatives for the disclosures relating to unconsolidated structured entities for any period before the first annual period for which IFRS 12 is applied. The amendments are effective for periods beginning on or after 1 January 2013, subject to EU endorsement. Amendments to IAS 12 "Income Taxes" introduce a presumption that recovery of the carrying amount of an asset measured using the fair value model in IAS 40 "Investment Property" will normally be through sale. The amendments are effective for periods beginning on or after 1 January 2012, subject to EU endorsement. "Annual Improvements 2009 - 2011 Cycle" sets out amendments to various IFRSs and provides a vehicle for making non-urgent but necessary amendments to IFRSs: An amendment to IFRS 1 "First-time Adoption of International Financial Reporting Standards" clarifies whether an entity may apply IFRS 1:

(a) if the entity meets the criteria for applying IFRS 1 and has applied IFRS 1 in a previous reporting period; or

(b) if the entity meets the criteria for applying IFRS 1 and has applied IFRSs in a previous reporting period when IFRS 1 did not exist.

The amendment also addresses the transitional provisions for borrowing costs relating to qualifying assets for which the commencement date for capitalisation was before the date of transition to IFRSs.

An amendment to IAS 1 "Presentation of Financial Statements" clarifies the requirements for providing comparative information:

(a) for the opening statement of financial position when an entity changes accounting policies, or makes retrospective restatements or reclassifications; and

(b) when an entity provides financial statements beyond the minimum comparative information requirements.

An amendment to IAS 16 "Property, Plant and Equipment" addresses a perceived inconsistency in the classification requirements for servicing equipment. An amendment to IAS 32 "Financial Instruments: Presentation" addresses perceived inconsistencies between IAS 12 "Income Taxes" and IAS 32 with regard to recognising the consequences of income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction. An amendment to IAS 34 "Interim Financial Reporting" clarifies the requirements on segment information for total assets and liabilities for each reportable segment.

The amendments are effective for periods beginning on or after 1 January 2013, subject to EU endorsement.

Critical accounting estimates

The preparation of consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in the Group's 2011 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

These interim results are unaudited and do not constitute statutory financial statements as defined in section 435 of the Companies Act 2006. The functional currency of the Group is US dollars and accordingly the amounts in the interim results are denominated in that currency. The balance sheet rates of exchange for the US dollar to UK Sterling was US$1.56148 to: £1.

The statutory financial statements for Kryso Resources plc for the year ended 31 December 2011 received an unqualified Auditors Report.

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.

Intangible assets - Exploration and Evaluation Expenditure

Research expenditure is written off in the year in which it is incurred. The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. When a decision is taken that a mining property becomes viable for commercial production, all further pre-production expenditure is capitalised. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to undertake topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and other activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource.

Exploration and evaluation assets are assessed for impairment annually. The assessment is carried out by allocating exploration and evaluation assets to cash generating units which are based on specific projects and geographical areas. Where exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities at the unit, the associated expenditure will be written off to profit or loss.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

2. Operating Loss

Operating loss is stated after charging/(crediting):						Audited
		Unaudited		Unaudited		Year ended
		Six months to		Six months to		31 December
		30 June 2012		30 June 2011		2011
		US$'000		US$'000		US$'000
Depreciation		437		15		230
Less transfer to exploration costs		(426)		(12)		(219)
Operating lease rentals - other		46		18		102
(Gain)/loss on foreign exchange		(68)		(460)		(137)

3. Loss per Share

Loss attributable to equity
holders of the Company (US$'000)		892		447		1,392
Weighted average number of ordinary shares in issue		283,859,796		253,797,339		260,970,293

The loss per share is calculated by dividing the loss for the period after tax attributable to equity holders by the weighted average number of ordinary shares in issue during the period. There is no difference between the diluted loss per share and the loss per share shown.

Copyright Business Wire 2012